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) 24 APRIL 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.
- ---------------------
The registrant reported record income from operations of $133 million, or
earnings per share of 62 cents, a per share increase of 17 percent compared with
last year's income from operations of $113 million, or 53 cents per share, for
the March quarter. These results and the following discussion exclude special
items.
Sales of more than $1.3 billion were seven percent higher than last year's sales
for the March quarter. "Our strategy of focusing on key markets where we have
established leadership positions is succeeding. I am proud of every one of our
17,000 people and their contributions to this quarter's performance. They
delivered significant revenue and earnings growth in the face of adverse energy,
raw material, and currency pressure," Air Products chairman and chief executive
officer H. A. Wagner said.
Industrial gas sales increased 15 percent, operating income was up 20 percent,
and the worldwide gases operating margin increased to 19.6 percent. Electronics'
performance improved dramatically across the globe due to strong demand for
specialty gases and specialty chemicals. Targeted investment over the past year
has supported this growth in value-added products. As expected, Asian results
were robust, driven by strong base business and the consolidation of key joint
ventures in Korea, Malaysia and China. European results also improved as demand
strengthened in northern Europe,
2
<PAGE>
complementing continued strong growth in southern Europe. Gases equity
affiliates' income also rose significantly.
Driven by improvement in all major product lines, chemicals sales were up eight
percent. Operating income increased nine percent as volume growth and solid
productivity more than offset higher raw material costs mainly in the polymers
division.
Mr. Wagner concluded by saying, "The momentum that began building last quarter
across several of our key markets and geographies has resulted in accelerated
growth. We see tremendous opportunity in businesses like electronics and
performance chemicals, and in areas such as Asia. Given our performance in the
first half of our fiscal year, we expect to exceed our 2000 target of 10 percent
earnings growth for our base business before any impacts of the BOC
transaction."
The March 2000 results exclude a $4 million after-tax gain on the sale of a
gases asset. They also exclude after-tax charges of $6 million, or three cents
per share, related to workforce reductions in the chemicals group, and $84
million, or 39 cents per share, primarily related to accounting charges recorded
on purchased option and forward exchange contracts entered into to hedge the
currency exposure of the BOC transaction. The accompanying footnotes contain a
full explanation of the accounting treatment. Including special items, net
income was $48 million, or diluted earnings per share of 22 cents for the March,
2000 quarter.
3
<PAGE>
The March 1999 results exclude an after-tax charge of $6 million, or three cents
per share, primarily related to closure costs for chemicals facilities.
Including special items, net income was $107 million, or diluted earnings per
share of 50 cents for the March 1999 quarter.
***NOTE: The forward-looking statements contained in this document are based on
current expectations regarding important risk factors. Actual results may differ
materially from those expressed. Important risk factors and uncertainties
include the impact of worldwide economic growth, pricing of both the Company's
products and raw materials such as electricity, customer outages and customer
demand, and other factors resulting from fluctuations in interest rates and
foreign currencies, the impact of competitive products and pricing, success of
cost control programs, and the impact of tax and other legislation and other
regulations in the jurisdictions in which the Company and its affiliates
operate.
Factors that might cause forward-looking statements related to the BOC
transaction to differ materially from actual results include, among other
things, requirements, including divestiture requirements, or delays imposed by
regulatory authorities to permit the transaction to be consummated; ultimate
division of BOC assets and liabilities between the Company and Air Liquide;
unanticipated tax and other costs in separating the ownership of BOC's
businesses and assets; ability to amortize goodwill over 40 years; overall
economic and business conditions; demand for the goods and services of Air
Products, BOC or their respective affiliates; competitive factors in the
industries in which each of them competes; changes in government regulation;
success of implementing synergies and other cost reduction programs; the timing,
impact and other uncertainties of future acquisitions or combinations within
relevant industries; fluctuations in interest rates and foreign currencies, and
the price at which Air Products would issue additional equity; and the impact of
tax and other legislation and other regulations in the jurisdictions in which
Air Products, BOC and their respective affiliates operate.***
Financial tables follow:
4
<PAGE>
AIR PRODUCTS AND CHEMICALS, INC.
SUMMARY OF CONSOLIDATED FINANCIAL INFORMATION
(Unaudited)
<TABLE>
<CAPTION>
(Millions of dollars, except per share)
- -------------------------------------------------------------------------------------------------------------
Three Months Ended Six Months Ended
31 March 31 March
2000 1999 2000 1999
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales $1,347.2 $1,253.3 $2,611.6 $2,527.9
- -------------------------------------------------------------------------------------------------------------
Net Income:
As reported $47.6(a) $106.9(c) $98.2(b) $233.3(d)
Exclusive of special items $133.2 $113.3 $254.4 $231.3
- -------------------------------------------------------------------------------------------------------------
Basic Earnings Per
Share:
As reported $.22(a) $.51(c) $.46(b) $1.10(d)
Exclusive of special items $.62 $.54 $1.19 $1.09
- -------------------------------------------------------------------------------------------------------------
Diluted Earnings Per
Share:
As reported $.22(a) $.50(c) $.46(b) $1.08(d)
Exclusive of special items $.62 $.53 $1.18 $1.07
- -------------------------------------------------------------------------------------------------------------
Operating Return on Net Assets(e) 10.1% 11.6%
Capital Expenditures $604.0 $541.3(f)
Depreciation $144.6 $133.5 $276.3 $261.3
- -------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Includes an after-tax charge of $84.1 million, or $.39 per share for costs
related to the BOC acquisition, an after-tax charge of $5.5 million, or
$.03 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. The
charge related to the BOC acquisition consists primarily of accounting
charges recorded on purchased option and forward exchange contracts entered
into to hedge the currency exposure of the acquisition.
(b) Includes an after-tax charge of $154.7 million, or $.72 per share for costs
related to the BOC acquisition, an after-tax charge of $5.5 million, or
$.03 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. The
charge related to the BOC acquisition consists primarily of accounting
charges recorded on purchased option and forward exchange contracts entered
into to hedge the currency exposure of the acquisition.
(c) Includes an after-tax charge of $6.4 million, or $.03 per share primarily
related to Chemicals facility closure costs.
(d) Includes an after-tax gain of $21.3 million, or $.10 per share related to
the formation of Air Products Polymers, an after-tax charge of $12.9
million, or $.06 per share related to a global cost reduction plan, and an
after-tax charge of $6.4 million, or $.03 per share primarily related to
Chemicals facility closure costs.
5
<PAGE>
(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 six months ended 31 March 2000 excludes $8.7 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 six months ended 31 March 1999 excludes $20.3 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.
6
<PAGE>
<TABLE>
<CAPTION>
AIR PRODUCTS AND CHEMICALS, INC. and Subsidiaries
CONSOLIDATED INCOME
(Unaudited)
(Millions of dollars, except per share)
- --------------------------------------------------------------------------------------------------------------------
Three Months Ended Six Months Ended
31 March 31 March
2000 1999 2000 1999
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SALES AND OTHER INCOME
Sales $1,347.2 $1,253.3 $2,611.6 $2,527.9
Other income(expense),net 7.1 4.5 13.9 9.4
- --------------------------------------------------------------------------------------------------------------------
1,354.3 1,257.8 2,625.5 2,537.3
- --------------------------------------------------------------------------------------------------------------------
COSTS AND EXPENSES
Cost of sales 925.6 877.5 1,802.7 1,753.1
Selling and administrative 179.9 168.3 347.7 351.5
Research and development 29.9 29.3 60.0 61.0
- --------------------------------------------------------------------------------------------------------------------
OPERATING INCOME 218.9 182.7 415.1 371.7
Income from equity 21.3 14.1 41.6 23.9
affiliates, net of related expenses
Net gain(loss) on formation -- (.1) -- 31.1
of polymer venture
Loss on currency hedges related to BOC 134.7 -- 247.9 --
transaction and preacquisition expenses
Interest expense 46.8 40.4 88.1 80.8
- --------------------------------------------------------------------------------------------------------------------
INCOME BEFORE TAXES AND 58.7 156.3 120.7 345.9
MINORITY INTEREST
Income taxes 8.3 45.1 17.4 105.0
Minority interest(a) 2.8 4.3 5.1 7.6
- --------------------------------------------------------------------------------------------------------------------
NET INCOME $47.6 $106.9 $98.2 $233.3
====================================================================================================================
BASIC EARNINGS PER COMMON $.22 $.51 $.46 $1.10
SHARE
- --------------------------------------------------------------------------------------------------------------------
DILUTED EARNINGS PER COMMON $.22 $.50 $.46 $1.08
SHARE
- --------------------------------------------------------------------------------------------------------------------
WEIGHTED AVERAGE NUMBER OF 213.3 211.6 213.2 211.5
COMMON SHARES (in millions)
- --------------------------------------------------------------------------------------------------------------------
WEIGHTED AVERAGE NUMBER OF 215.4 215.1 215.5 215.3
COMMON AND COMMON
EQUIVALENT SHARES (in
millions)(b)
- --------------------------------------------------------------------------------------------------------------------
DIVIDENDS DECLARED PER COMMON $.18 $.17 $.36 $.34
SHARE - Cash
- --------------------------------------------------------------------------------------------------------------------
</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.
7
<PAGE>
AIR PRODUCTS AND CHEMICALS, INC. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
(Millions of dollars)
- ------------------------------------------------------------------------------------------------
31 March
ASSETS 2000 1999
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
CURRENT ASSETS
Cash and cash items $92.7 $85.5
Trade receivables, less allowances for 923.1 889.2
doubtful accounts
Inventories 429.7 432.9
Contracts in progress, less progress billings 68.0 143.0
Other current assets 381.2 164.8
- ------------------------------------------------------------------------------------------------
TOTAL CURRENT ASSETS 1,894.7 1,715.4
- ------------------------------------------------------------------------------------------------
INVESTMENTS IN NET ASSETS OF AND ADVANCES TO 505.9 441.5
EQUITY AFFILIATES
OTHER INVESTMENTS AND ADVANCES 46.3 24.7
PLANT AND EQUIPMENT, at cost 10,491.3 9,744.2
Less - Accumulated depreciation 5,120.7 4,833.1
- ------------------------------------------------------------------------------------------------
PLANT AND EQUIPMENT, net 5,370.6 4,911.1
- ------------------------------------------------------------------------------------------------
GOODWILL 332.6 343.0
OTHER NONCURRENT ASSETS 420.2 357.9
- ------------------------------------------------------------------------------------------------
TOTAL ASSETS $8,570.3 $7,793.6
================================================================================================
LIABILITIES AND SHAREHOLDER'S EQUITY
- ------------------------------------------------------------------------------------------------
CURRENT LIABILITIES
Payables, trade and other $538.3 $513.6
Accrued liabilities 377.4 306.5
Unrealized loss on forward contracts related to 188.7 --
BOC transaction
Accrued income taxes 49.3 30.7
Short-term borrowings 440.6 288.3
Current portion of long-term debt 115.3 201.7
- ------------------------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 1,709.6 1,340.8
- ------------------------------------------------------------------------------------------------
LONG-TERM DEBT 2,506.9 2,231.7
DEFERRED INCOME & OTHER NONCURRENT LIABILITIES 566.8 590.6
DEFERRED INCOME TAXES 744.2 730.2
- ------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 5,527.5 4,893.3
- ------------------------------------------------------------------------------------------------
MINORITY INTERESTS IN SUBSIDIARY COMPANIES 119.5 124.3
- ------------------------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY
Common stock, par value $1 per share 249.5 249.5
Capital in excess of par value 342.1 335.2
Retained earnings 3,723.2 3,561.3
Accumulated other comprehensive income (340.4) (283.7)
Treasury Stock, at cost (681.7) (681.7)
Shares in trust (369.4) (404.6)
- ------------------------------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY 2,923.3 2,776.0
- ------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $8,570.3 $7,793.6
================================================================================================
</TABLE>
8
<PAGE>
AIR PRODUCTS AND CHEMICALS, INC. and Subsidiaries
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(Unaudited)
<TABLE>
<CAPTION>
(Millions of dollars)
- ---------------------------------------------------------------------------------------------------------
Three Months Ended Six Months Ended
31 March 31 March
2000 1999 2000 1999
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET INCOME $47.6 $106.9 $98.2 $233.3
- ---------------------------------------------------------------------------------------------------------
OTHER COMPREHENSIVE INCOME,
net of tax
Foreign currency translation (18.5) (80.6) (63.3) (56.3)
adjustments
Unrealized gains (losses) on
investments:
Unrealized holding gains 1.3 .2 (2.7) 4.1
(losses) arising during the
period
Less: reclassification -- -- -- --
adjustment for gains
included in net income
- ---------------------------------------------------------------------------------------------------------
Net unrealized gains (losses) 1.3 .2 (2.7) 4.1
on investments
- ---------------------------------------------------------------------------------------------------------
TOTAL OTHER COMPREHENSIVE INCOME (17.2) (80.4) (66.0) (52.2)
- ---------------------------------------------------------------------------------------------------------
COMPREHENSIVE INCOME $30.4 $26.5 $32.2 $181.1
======================================================================+==================================
</TABLE>
9
<PAGE>
AIR PRODUCTS AND CHEMICALS, INC. and Subsidiaries
CONSOLIDATED CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
(Millions of dollars)
- ---------------------------------------------------------------------------------------------------
Six Months Ended
31 March
2000 1999
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net Income $98.2 $233.3
Adjustments to reconcile income to cash provided
by operating activities:
Depreciation 276.3 261.3
Deferred income taxes 12.9 31.9
Gain on formation of polymer venture -- (31.1)
(Gain) loss on currency hedges related to BOC 201.3 --
transaction
Undistributed (earnings) of unconsolidated (25.5) (4.6)
affiliates
(Gain) loss on sale of assets and investments (10.9) 1.6
Other 35.9 66.0
Working capital changes that provided (used)
cash, net of effects of acquisitions:
Trade receivables (41.5) (18.7)
Inventories and contracts in progress 6.8 (40.2)
Payables, trade and other 30.7 45.7
Other (82.6) 4.5
- ---------------------------------------------------------------------------------------------------
CASH PROVIDED BY OPERATING ACTIVITIES 501.6 549.7
- ---------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Additions to plant and equipment (378.6) (450.9)
Acquisitions, less cash acquired (168.7) (22.4)
Investment in and advances to unconsolidated (16.5) (66.0)
affiliates
Proceeds from sale of assets and investments 30.0 31.3
Other (15.3) 19.8
- ---------------------------------------------------------------------------------------------------
CASH USED FOR INVESTING ACTIVITIES (549.1) (488.2)
- ---------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Long-term debt proceeds 507.5 51.5
Payments on long-term debt (369.6) (31.7)
Net increase (decrease) in commercial paper (25.0) 11.4
Net increase (decrease) in other short-term 35.5 9.2
borrowings
Dividends paid to shareholders (76.8) (71.9)
Purchase of Treasury Stock -- (24.6)
Other 1.8 19.6
- ---------------------------------------------------------------------------------------------------
CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES 73.4 (36.5)
- ---------------------------------------------------------------------------------------------------
Effect of Exchange Rate Changes on Cash 5.1 (1.0)
- ---------------------------------------------------------------------------------------------------
Increase in Cash and Cash Items 31.0 24.0
Cash and Cash Items - Beginning of Year 61.6 61.5
- ---------------------------------------------------------------------------------------------------
Cash and Cash Items - End of Period $92.6 $85.5
===================================================================================================
</TABLE>
10
<PAGE>
AIR PRODUCTS AND CHEMICALS, INC. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In July 1999, the Company and L'Air Liquide S.A. ("Air Liquide") of France
agreed to the terms of a recommended offer under which they would acquire BOC,
the leading British industrial gases company, for UK(pound)14.60 per share in
cash, or a total of approximately UK(pound)7.2 billion. Air Products has a
UK(pound)3,950.0 million credit agreement to provide backup for commercial paper
or direct funding for its 50% share of the offer price. Fees incurred to secure
this credit agreement have been deferred and will be amortized on a
straight-line basis over the term of the related debt. The offer will formally
commence in the United Kingdom and the United States upon receipt of the
necessary regulatory clearances, which are expected in the second quarter of
calendar year 2000. The Company expects the transaction will be included in the
Company's financial results for approximately three months of fiscal 2000. Due
to the joint control with Air Liquide, the operations will initially be
accounted for under the equity method. As the Company gains control and
ownership of approximately one-half of the BOC assets expected to be allocated
to it, the operations will be accounted for as consolidated entities.
The results for the six months ended 31 March 2000 include a charge of $247.9
million ($154.7 million after-tax, or $.72 per share) for costs related to the
BOC acquisition. Of this amount, $232.7 million ($145.2 million after-tax, or
$.67 per share) of accounting charges were recorded on purchased currency option
and forward exchange contracts entered into to hedge the currency exposure of
the BOC acquisition. The remaining charge of $15.2 million ($9.5 million
after-tax, or $.05 per share) consists of preacquisition expenses.
As of 31 March, the Company has entered into forward currency exchange contracts
for approximately UK(pound)3.3 billion on an after-tax basis. The net impact of
the contracts entered into as of 31 March (after adjusting for the tax impact of
the hedge placed) is that the Company has effectively hedged 100% of the
currency exposure related to the purchase of BOC shares. Gains and losses
associated with changes in the market value of these contracts are recorded
currently in earnings since hedge accounting may not be applied to instruments
which are used to hedge the currency exposure of a business combination. The
purchased currency options outstanding at 31 December 1999 which were entered
into to hedge the currency exposure of the acquisition were sold at market value
during the current quarter.
The results for the three and six months ended 31 March 2000 include a charge of
$8.7 million ($5.5 million after-tax, or $.03 per share) for a global cost
reduction plan in the chemicals segment. This plan was initiated in the fiscal
quarter ended 31 March 2000. The plan includes staff reductions of 103 employees
in the areas of manufacturing and overheads. The plan will be complete by 31
March 2001, with annualized cost savings of $9.3 million accumulating over the
year. Notifications began in the quarter ending 31 March 2000, with actual
termination expenditures beginning in the month of April, 2000. The charges to
cost of sales, selling and administrative, and research and development were
$3.3 million, $4.4 million, and $1.0 million, respectively.
The results for the three and six months ended 31 March 2000 include a gain of
$6.3 million ($4.0 million after-tax, or $.02 per share) related to the sale of
packaged gas facilities.
11
<PAGE>
The current year-to-date consolidated effective tax rate is 15.0%, after
minority interest of $5.1 million. This compares to a rate of 31.0% in the prior
year. The fiscal 2000 rate is significantly impacted by a higher tax rate on the
BOC acquisition hedging transactions, the global cost reduction plan, and the
sale of packaged gas facilities. Excluding these tax impacts, the effective rate
for the six months is 30.5%. The effective rate in the prior year, excluding the
tax rate impact of the gain on the formation of the polymer ventures, a chemical
facility closure and the global cost reduction, was 31.5%.
The results for the three and six months ended 31 March 1999 include a charge of
$10.3 million ($6.4 million after-tax, or $.03 per share) primarily related to
Chemicals facility closure costs.
The results for the six months ended 31 March 1999 include a net gain of
$31.1 million ($21.3 million after-tax, or $.10 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 six months ended 31 March 1999 include a charge of
$20.3 million ($12.9 million after-tax, or $.06 per share) related to a global
cost reduction plan ("the 1999 plan"). The Company began the 1999 plan in the
fiscal quarter ended 31 December 1998. The plan included staffing reductions of
206 employees in the areas of manufacturing, distribution, and overheads. The
charges to cost of sales, selling and administrative, and research and
development were $9.9 million, $9.3 million, and $1.1 million, respectively.
This plan was completed in December, 1999, essentially as expected.
12
<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 Six Months Ended
31 March 31 March
2000 1999 2000 1999
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues from external
customers
Gases $842.1 $735.2 $1,622.7 $1,488.5
Equipment 53.8 101.2 104.4 220.7
Chemicals 451.3 416.9 884.5 818.7
- ---------------------------------------------------------------------------------------------------------------------
Segment Totals 1,347.2 1,253.3 2,611.6 2,527.9
- ---------------------------------------------------------------------------------------------------------------------
Consolidated Totals $1,347.2 $1,253.3 $2,611.6 $2,527.9
- ---------------------------------------------------------------------------------------------------------------------
Operating income
Gases $171.0(a) $137.2 $324.3(a) $258.7(d)
Equipment 5.6 6.9 6.8 29.7(d)
Chemicals 50.0(b) 43.4(c) 101.6(b) 94.2(c)(d)
- ---------------------------------------------------------------------------------------------------------------------
Segment Totals 226.6 187.5 432.7 382.6
- ---------------------------------------------------------------------------------------------------------------------
Corporate research and (7.7) (4.8) (17.6) (10.9)(d)
development and other
income/(expense)
- ---------------------------------------------------------------------------------------------------------------------
Consolidated Totals $218.9 $182.7 $415.1 $371.7
- ---------------------------------------------------------------------------------------------------------------------
Operating income (excluding
special items)
Gases $164.7 $137.2 $318.0 $275.0
Equipment 5.6 6.9 6.8 31.6
Chemicals 58.7 53.7 110.3 106.1
- ---------------------------------------------------------------------------------------------------------------------
Segment Totals 229.0 197.8 435.1 412.7
- ---------------------------------------------------------------------------------------------------------------------
Corporate research and (7.7) (4.8) (17.6) (10.4)
development and other
income/(expense)
- ---------------------------------------------------------------------------------------------------------------------
Consolidated Totals $221.3 $193.0 $417.5 $402.3
- ---------------------------------------------------------------------------------------------------------------------
Equity affiliates' income
Gases 17.8 10.5 $34.2 $17.2
Equipment .5 .2 .8 .7
Chemicals 3.1 3.4 6.7 5.5
Other (.1) -- (.1) .5
- ---------------------------------------------------------------------------------------------------------------------
Segment Totals 21.3 14.1 41.6 23.9
- ---------------------------------------------------------------------------------------------------------------------
Consolidated Totals $21.3 $14.1 $41.6 $23.9
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
(Millions of dollars)
- ---------------------------------------------------------------------------------------------------------------------
Six Months Ended
31 March
2000 1999
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Total assets
Gases $6,243.1 $5,548.5
Equipment 217.2 296.3
Chemicals 1,712.7 1,749.3
- ---------------------------------------------------------------------------------------------------------------------
Segment Totals 8,173.0 7,594.1
- ---------------------------------------------------------------------------------------------------------------------
Corporate assets 397.3 199.5
- ---------------------------------------------------------------------------------------------------------------------
Consolidated Totals $8,570.3 $7,793.6
- ---------------------------------------------------------------------------------------------------------------------
ORONA
Gases 10.8% 11.0%
Equipment 4.7% 22.6%
Chemicals 12.8% 14.9%
- ---------------------------------------------------------------------------------------------------------------------
Segment Totals 11.0% 12.4%
- ---------------------------------------------------------------------------------------------------------------------
Consolidated Totals 10.1% 11.6%
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) The results for the three and six months ended 31 March 2000 include a gain
on the sale of packaged gas facilities of $6.3 million.
(b) The results for the three and six months ended 31 March 2000 include the
cost reduction charge of $8.7 million.
(c) The results for the three and six months ended 31 March 1999 include a
charge of $10.3 million primarily related to Chemicals facility closure
costs.
(d) The results for the six months ended 31 March 1999 include the cost
reduction charge in Gases ($16.3 million), Equipment ($1.9 million),
Chemicals ($1.6 million), and Corporate ($.5 million).
14
<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 Six Months Ended
31 March 31 March
2000 1999 2000 1999
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Total segment operating $226.6 $187.5 $432.7 $382.6
income
Corporate research and (7.7) (4.8) (17.6) (10.9)
development and
other income/(expense)
- ---------------------------------------------------------------------------------------------------------------------
Consolidated operating 218.9 182.7 415.1 371.7
income
- ---------------------------------------------------------------------------------------------------------------------
Segment equity affiliates' income 21.3 14.1 41.6 23.9
Gain on Wacker formation -- (.1) -- 31.1
Loss on currency hedges related 134.7 -- 247.9 --
to BOC transaction and
preacquisition expenses
Interest expense 46.8 40.4 88.1 80.8
- ---------------------------------------------------------------------------------------------------------------------
Consolidated income before $58.7 $156.3 $120.7 $345.9
taxes and minority interest
=====================================================================================================================
</TABLE>
15
<PAGE>
AIR PRODUCTS AND CHEMICALS, INC. and Subsidiaries
SUMMARY BY GEOGRAPHIC REGIONS
(Unaudited)
<TABLE>
<CAPTION>
(Millions of dollars)
- ---------------------------------------------------------------------------------------------------------------------
Three Months Ended Six Months Ended
31 March 31 March
2000 1999 2000 1999
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues from external
customers
United States $879.3 $801.8 $1,718.5 $1,609.7
United Kingdom 124.4 152.9 245.5 323.9
Spain 78.9 80.5 155.7 164.9
Other Europe 149.1 155.2 289.9 299.1
- ---------------------------------------------------------------------------------------------------------------------
Total Europe 352.4 388.6 691.1 787.9
- ---------------------------------------------------------------------------------------------------------------------
Canada/Latin America 55.0 45.2 113.4 103.2
Asia 60.4 17.6 88.4 26.9
All Other .1 .1 .2 .2
- ---------------------------------------------------------------------------------------------------------------------
Total $1,347.2 $1,253.3 $2,611.6 $2,527.9
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
Note: Geographic information is based on country of origin. The other Europe
segment operates principally in France, Germany, Netherlands, and Belgium.
16
<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: 24 April 2000 By: /s/ Leo J. Daley
---------------------------------
Leo J. Daley
Vice President - Finance
(Chief Financial Officer)
17
