<PAGE>
<PAGE> 1
FORM 11-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[ x ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ________ to _______
Commission file numbers: 33-25419 and 33-64058
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
Airgas, Inc. 401(k) Plan
B. Name of the issuer of the securities held pursuant to the plan and the
address of its principal executive office:
Airgas, Inc.
259 North Radnor-Chester Road, Suite 100
Radnor, PA 19087
<PAGE>
<PAGE> 2
REQUIRED INFORMATION
(1) Financial Statements:
The following financial statements, including Independent Auditors'
Report thereon of Airgas, Inc. 401(k) Plan are submitted herewith:
Statements of Net Assets Available for
Benefits as of December 31, 1997 and 1996
Statements of Changes in Net Assets Available for
Benefits for the two years ended December 31, 1997
Notes to Financial Statements
Item 27(a) - Schedule of Assets Held for Investment Purposes
Item 27(d) - Schedule of Reportable Transactions
The schedules for which provision is made in the applicable accounting
regulations of the Securities and Exchange Commission are included in the
aforementioned financial statements of the Airgas, Inc. 401(k) Plan.
(2) Exhibits
23.1 Consent of KPMG Peat Marwick LLP
<PAGE>
<PAGE> 3
SIGNATURES
__________
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Plan Administrator has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
AIRGAS, INC. 401(k) PLAN
BY:/s/ 401(k) Plan Committee
_________________________
BY:/s/ Scott M. Melman
__________________________
Vice President - Chief
Financial Officer
BY:/s/ Todd R. Craun
__________________________
Secretary
DATED: June 25, 1998
<PAGE>
<PAGE> 4
AIRGAS, INC. 401(k) PLAN
Financial Statements and
Supplementary Schedules
December 31, 1997 and 1996
(With Independent Auditors' Report Thereon)
<PAGE>
<PAGE> 5
AIRGAS, INC. 401(k) PLAN
Table of Contents
December 31, 1997 and 1996
____________________________________________________________________________
Page
Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . 6
Financial Statements:
Statement of Net Assets Available for Benefits
as of December 31, 1997 . . . . . . . . . . . . . . . . . . . . 7
Statement of Net Assets Available for Benefits
as of December 31, 1996 . . . . . . . . . . . . . . . . . . . . 9
Statement of Changes in Net Assets Available for
Benefits, Year ended December 31, 1997 . . . . . . . . . . . . . 10
Statement of Changes in Net Assets Available for
Benefits, Year ended December 31, 1996 . . . . . . . . . . . . . 13
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . 14
Schedule
1 Item 27(a) - Schedule of Assets Held for Investment Purposes . 22
2 Item 27(d) - Schedule of Reportable Transactions . . . . . . . 23
____________________________________________________________________________
<PAGE>
<PAGE> 6
Independent Auditors' Report
The Plan Administrator
Airgas, Inc. 401(k) Plan:
We have audited the accompanying statements of net assets available for
benefits, with fund information, of the Airgas, Inc. 401(k) Plan as of
December 31, 1997 and 1996, and the related statements of changes in net
assets available for benefits, with fund information, for each of the years in
the two-year period ended December 31, 1997. In connection with our audits of
the accompanying statements, we also have audited the supplemental schedule of
assets held for investment purposes (Schedule 1) and the supplemental schedule
of reportable transactions (Schedule 2) as of and for the year ended
December 31, 1997. These financial statements and supplemental schedules are
the responsibility of the Plan's management. Our responsibility is to express
an opinion on these financial statements and supplemental schedules based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Airgas,
Inc. 401(k) Plan at December 31, 1997 and 1996 and the changes in net assets
available for benefits for each of the years in the two-year period ended
December 31, 1997, in conformity with generally accepted accounting
principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets
held for investment purposes and reportable transactions as of and for the
year ended December 31, 1997, are presented for additional analysis and are
not a required part of the basic financial statements but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The supplemental schedules have been subjected to the auditing
procedures applied in the audits of the basic financial statements, and in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole. The Fund Information in the statement
of net assets available for benefits and the statement of changes in net
assets available for benefits is presented for purposes of additional analysis
rather than to present the net assets available for plan benefits and changes
in net assets available for plan benefits of each fund. The supplemental
schedules and Fund Information have been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our opinion,
are fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
Philadelphia, Pennsylvania KPMG Peat Marwick LLP
May 27, 1998
<PAGE> 7
<TABLE>
AIRGAS, INC. 401(k) PLAN
Statement of Net Assets Available for Benefits, with Fund Information
December 31, 1997
<CAPTION>
Fund Information
___________________________________________________________________________________
Airgas, Inc. Vanguard Vanguard
Common Vanguard International Vanguard Vanguard Vanguard/ LifeStrategy
Stock Explorer Growth U.S. Growth Index Trust Wellington Growth
Fund Fund Portfolio Portfolio 500 Portfolio Fund Portfolio
_______________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C>
Assets:
Investments $31,094,350 712,579 833,923 19,564,818 3,429,706 12,285,732 641,028
Receivables:
Employee
contributions 328,786 18,837 18,029 181,007 55,313 122,093 22,906
Employer
contributions 82,762 3,997 3,467 43,855 12,108 31,007 5,518
______________________________________________________________________________________________________
Total receivables 411,548 22,834 21,496 224,862 67,421 153,100 28,424
______________________________________________________________________________________________________
Employee loans - - - - - - -
______________________________________________________________________________________________________
Net assets available
for benefits $31,505,898 735,413 855,419 19,789,680 3,497,127 12,438,832 669,452
______________________________________________________________________________________________________
<FN>
See accompanying notes to financial statements. (Continued)
</FN>
</TABLE>
<PAGE> 8
<TABLE>
AIRGAS, INC. 401(k) PLAN
Statement of Net Assets Available for Benefits, with Fund Information, Continued
December 31, 1997
<CAPTION>
Fund Information
___________________________________________________________________________________
Vanguard Vanguard
LifeStrategy LifeStrategy Vanguard Vanguard
Moderate Conservative LifeStrategy Bond Investment Participant
Growth Growth Income Index Contract Loan
Portfolio Portfolio Portfolio Fund Fund Fund Total
_______________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C>
Assets:
Investments $ 617,754 509,496 205,599 346,319 19,590,497 - 89,831,801
Receivables:
Employee
contributions 10,446 4,115 3,076 4,735 136,654 - 905,997
Employer
contributions 2,513 1,022 613 1,088 38,377 - 226,327
_______________________________________________________________________________________________________
Total receivables 12,959 5,137 3,689 5,823 175,031 - 1,132,324
_______________________________________________________________________________________________________
Employee loans - - - - - 4,445,300 4,445,300
_______________________________________________________________________________________________________
Net assets available
for benefits $ 630,713 514,633 209,288 352,142 19,765,528 4,445,300 95,409,425
_______________________________________________________________________________________________________
<FN>
See accompanying notes to financial statements.
</FN>
</TABLE>
<PAGE> 9
<TABLE>
AIRGAS, INC. 401(k) PLAN
Statement of Net Assets Available for Benefits, with Fund Information
December 31, 1996
<CAPTION>
Fund Information
___________________________________________________________________________________
Vanguard
Fidelity Fidelity Airgas, Inc. Guaranteed Money Participant
Magellan Puritan Common Investment Market Loan
Fund Fund Stock Contracts Account Fund Total
_______________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C>
Assets:
Investments $ 12,358,950 7,406,370 45,051,490 14,072,118 895,667 - 79,784,595
Receivables:
Employee contributions - - - - 691,596 - 691,596
Employer contributions - - - - 187,379 - 187,379
_______________________________________________________________________________________________________
Total receivables - - - - 878,975 - 878,975
Employee loans - - - - - 2,884,144 2,884,144
Cash and cash equivalent,
interest-bearing 418,096 437,926 373,279 3,195,694 - - 4,424,995
_______________________________________________________________________________________________________
Total assets 12,777,046 7,844,296 45,424,769 17,267,812 1,774,642 2,884,144 87,972,709
Return of excess
contributions and
other miscellaneous
expenses (123,165) (100,620) (1,076,515) (541,707) - - (1,842,007)
Interfund balances (478,497) (262,999) 1,044,232 (302,736) - - -
_______________________________________________________________________________________________________
Net assets available
for benefits $12,175,384 7,480,677 45,392,486 16,423,369 1,774,642 2,884,144 86,130,702
_______________________________________________________________________________________________________
<FN>
See accompanying notes to financial statements.
</FN>
</TABLE>
<PAGE> 10
<TABLE>
AIRGAS, INC. 401(k) PLAN
Statement of Changes in Net Assets Available for Benefits, with Fund Information
December 31, 1997
<CAPTION> Fund Information
_______________________________________________________________________________________
Airgas, Inc. Vanguard Vanguard Vanguard
Common Vanguard International U.S. Index Vanguard/
Stock Explorer Growth Growth Trust 500 Wellington
Fund Fund Portfolio Portfolio Portfolio Fund
_______________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Investment income (loss):
Net appreciation (depreciation)
in fair value of investments $(12,303,912) (67,801) (93,873) 2,033,531 164,617 724,808
Interest and dividends 33,148 73,646 37,953 796,130 54,698 1,017,846
_______________________________________________________________________________________________________
(12,270,764) 5,845 (55,920) 2,829,661 219,315 1,742,654
_______________________________________________________________________________________________________
Contributions:
Employee 4,861,545 131,461 282,565 2,346,444 921,431 1,778,333
Employer 2,657,573 26,018 27,245 1,095,611 90,052 783,713
_______________________________________________________________________________________________________
7,519,118 157,479 309,810 3,442,055 1,011,483 2,562,046
_______________________________________________________________________________________________________
Disbursements:
Benefits paid to participants (2,420,554) (11,852) (3,793) (894,762) (70,972) (727,142)
Administrative fees (142,602) (6,539) (364) (45,805) (1,229) (48,773)
_______________________________________________________________________________________________________
Total disbursements (2,563,156) (18,391) (4,157) (940,567) (72,201) (775,915)
_______________________________________________________________________________________________________
Transfer from Keokuk
Bargaining Unit 401(k) Plan 34,506 - - - - -
Interfund transfers, including loans
granted, net of loan repayment (6,606,292) 590,480 605,686 14,458,531 2,338,530 8,910,047
_______________________________________________________________________________________________________
Net change to plan (13,886,588) 735,413 855,419 19,789,680 3,497,127 12,438,832
Net assets available for benefits:
Beginning of year 45,392,486 - - - - -
_______________________________________________________________________________________________________
End of year $31,505,898 735,413 855,419 19,789,680 3,497,127 12,438,832
_______________________________________________________________________________________________________
<FN> See accompanying notes to financial statements. (Continued)
</FN> </TABLE>
<PAGE> 11
<TABLE>
AIRGAS, INC. 401(k) PLAN
Statement of Changes in Net Assets Available for Benefits, with Fund Information, Continued
December 31, 1997 <CAPTION> Fund Information
_______________________________________________________________________________________
Vanguard Vanguard Vanguard
Vanguard LifeStrategy LifeStrategy Life Vanguard
LifeStrategy Moderate Conservative Strategy Bond Investment
Growth Growth Growth Income Index Contract
Portfolio Portfolio Portfolio Portfolio Fund Fund
_______________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Investment income (loss):
Net appreciation (depreciation)
in fair value of investments $ 6,289 3,355 72 2,070 5,356 -
Interest and dividends 23,108 24,520 19,133 6,391 8,957 1,649,915
_______________________________________________________________________________________________________
29,397 27,875 19,205 8,461 14,313 1,649,915
_______________________________________________________________________________________________________
Contributions:
Employee 332,167 351,387 75,911 128,586 93,400 1,871,166
Employer 40,324 17,056 6,868 8,079 9,410 1,453,325
_______________________________________________________________________________________________________
372,491 368,443 82,779 136,665 102,810 3,324,491
_______________________________________________________________________________________________________
Disbursements:
Benefits paid to participants (1,800) (3,405) (5,802) (3,349) (42,508) (1,684,112)
Administrative fees (501) (299) (161) (85) (151) (88,111)
_______________________________________________________________________________________________________
Total disbursements (2,301) (3,704) (5,963) (3,434) (42,659) (1,772,223)
_______________________________________________________________________________________________________
Transfer from Keokuk
Bargaining Unit 401(k) Plan - - - - - 508,388
Interfund transfers, including loans
granted, net of loan repayment 269,865 238,099 418,612 67,596 277,678 (368,412)
_______________________________________________________________________________________________________
Net change to plan 669,452 630,713 514,633 209,288 352,142 3,342,159
Net assets available for benefits:
Beginning of year - - - - - 16,423,369
_______________________________________________________________________________________________________
End of year 669,452 630,713 514,633 209,288 352,142 19,765,528
_______________________________________________________________________________________________________
<FN> See accompanying notes to financial statements. (Continued)
</FN> </TABLE>
<PAGE> 12
<TABLE>
AIRGAS, INC. 401(k) PLAN
Statement of Changes in Net Assets Available for Benefits, with Fund Information, Continued
December 31, 1997
<CAPTION> Fund Information
_______________________________________________________________________________________
Vanguard
Fidelity Fidelity Money Participant
Magellan Puritan Market Loan
Fund Fund Account Fund Total
_______________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Investment income (loss):
Net appreciation (depreciation)
in fair value of investments $ 372,572 163,522 - - (8,989,394)
Interest and dividends 4,831 2,113 - 355,986 4,108,375
_______________________________________________________________________________________________________
377,403 165,635 - 355,986 (4,881,019)
_______________________________________________________________________________________________________
Contributions:
Employee - - - - 13,174,396
Employer - - - - 6,215,274
_______________________________________________________________________________________________________
- - - - 19,389,670
_______________________________________________________________________________________________________
Disbursements:
Benefits paid to participants - - - (152,574) (6,022,625)
Administrative fees - - - (2,792) (337,412)
_______________________________________________________________________________________________________
Total disbursements - - - (155,366) (6,360,037)
_______________________________________________________________________________________________________
Transfer from Keokuk
Bargaining Unit 401(k) Plan 462,559 99,941 - 24,715 1,130,109
Interfund transfers, including loans
granted, net of loan repayment (13,015,346) (7,746,253) (1,774,642) 1,335,821 -
_______________________________________________________________________________________________________
Net change to plan (12,175,384) (7,480,677) (1,774,642) 1,561,156 9,278,723
Net assets available for benefits:
Beginning of year 12,175,384 7,480,677 1,774,642 2,884,144 86,130,702
_______________________________________________________________________________________________________
End of year - - - 4,445,300 95,409,425
_______________________________________________________________________________________________________
<FN> See accompanying notes to financial statements.
</FN> </TABLE>
<PAGE> 13
<TABLE>
AIRGAS, INC. 401(k) PLAN
Statement of Changes in Net Assets Available for Benefits, with Fund Information
December 31, 1996
<CAPTION> Fund Information
___________________________________________________________________________________
Vanguard
Fidelity Fidelity Airgas, Inc. Guaranteed Money Participant
Magellan Puritan Common Investment Market Loan
Fund Fund Stock Contracts Account Fund Total
_______________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Net appreciation
in fair value of
investments $1,315,646 916,694 9,890,725 - - - 12,123,065
Interest - - - 915,371 2,529 164,234 1,082,134
Earnings on liquidity
fund 16,411 5,253 5,607 59,253 - - 86,524
_______________________________________________________________________________________________________
1,332,057 921,947 9,896,332 974,624 2,529 164,234 13,291,723
_______________________________________________________________________________________________________
Contributions:
Employee 1,835,213 1,427,061 3,287,469 1,684,860 1,395,176 - 9,629,779
Employer 846,121 551,766 2,037,792 1,356,698 376,937 - 5,169,314
_______________________________________________________________________________________________________
2,681,334 1,978,827 5,325,261 3,041,558 1,772,113 - 14,799,093
_______________________________________________________________________________________________________
Benefits paid to
participants (952,025) (507,591)(3,342,119) (2,658,855) - (161,006) (7,621,596)
_______________________________________________________________________________________________________
Interfund transfers,
including loans granted,
net of loan repayments(1,403,475) (288,237) 2,362,238 (1,494,546) - 824,020 -
_______________________________________________________________________________________________________
Net change to plan 1,657,891 2,104,946 14,241,712 (137,219) 1,774,642 827,248 20,469,220
Net assets available
for benefits:
Beginning of year 10,517,493 5,375,731 31,150,774 16,560,588 - 2,056,896 65,661,482
_______________________________________________________________________________________________________
End of year $12,175,384 7,480,677 45,392,486 16,423,369 1,774,642 2,884,144 86,130,702
_______________________________________________________________________________________________________
<FN> See accompanying notes to financial statements.
</FN> </TABLE>
<PAGE> 14
AIRGAS, INC. 401(k) PLAN
Notes to Financial Statements
December 31, 1997 and 1996
(1) Description of the Plan
The following description of the Airgas, Inc. 401(k) Plan (the Plan)
provides general information only. Participants should refer to the Plan
agreement for more complete information.
General
The Plan is a defined contribution plan covering substantially all
employees of Airgas, Inc. and subsidiaries (the Company). Included in the
assets of the Plan are contribution rollovers from pension plans of acquired
companies, where applicable. The Plan is subject to the provisions of the
Employee Retirement Income Security Act of 1974 (ERISA).
Contributions
Employee:
The Plan permits a participant to defer up to 15% of eligible
compensation. The amount of deferred compensation is treated as a salary
reduction and is not subject to federal income tax until withdrawn from the
Plan. In no event will the contribution exceed maximum allowable
contributions as prescribed by the Internal Revenue Service.
Employer:
Contributions to the Plan by the Company are made on a matched basis and
at a rate of 50% of participant deferred compensation. The employer match is
applied on employee contributions of up to 4% of eligible compensation (i.e.,
maximum employer match is 2% of eligible compensation). Plan participants are
eligible for Company matching contributions upon completing a consecutive
twelve-month period of employment with Airgas, Inc., in which an employee is
credited with at least 1,000 hours of service.
In addition to the required Company match, the Company may elect to make
discretionary profit sharing contributions as determined by the Board of
Directors. The Company made discretionary contributions of $3,331,831 and
$3,058,641 for the years ended December 31, 1997 and 1996, respectively.
The Company determines its discretionary contribution based on the overall
profitability of the Company. Of that amount, the Company allocates a portion
to each subsidiary based on that subsidiary's profitability. Each subsidiary
then allocates its profit sharing to individual participants based on their
proportionate compensation.
Participant Accounts
Contributions are invested as directed by each participant in twelve
(effective January 31, 1997) separate investment funds. Each participant may
designate, by written notice to the Plan administrator, how the contributions
to his account are to be allocated among the twelve funds. Participants are
required to allocate contributions to the funds in increments of 1% of total
contributions.
<PAGE> 15
(1) Continued
Participant Accounts, Continued
In the event a participant fails to submit a written notice of
allocation, contributions will be invested in the Investment Contract Fund.
In addition to the above initial election, participants may elect, by
calling The Vanguard Group ("Vanguard"), to transfer, in 1% increments of the
total funds credited to their account, monies among the investment funds.
Interest, dividends, and other income earned by the investment funds, net
of administrative fees, are reinvested in the same fund. Such amounts are
allocated to participants based upon the proportion of a participant's balance
to the total fund balance.
Participant Loans
The Plan administrator may, upon the application of a participant, direct
the Trustee to make a loan to such participant. The maximum the participant
may borrow is limited to the lesser of 50% of the participant's Plan balance
or $50,000. The loan will bear interest at a rate equal to prime plus 2% and
shall provide for periodic repayment over a reasonable period of time not to
exceed five years for general purpose loans and thirty years for principal
residence loans. Prime rate at December 31, 1997 was 8.5%.
Vesting
Participants are immediately vested in all contributions. In addition,
all earnings on such investments are fully vested.
Payment of Benefits
Upon retirement, death, or termination of service, participants or
beneficiaries are entitled to a distribution equal to the total value of their
accounts. Such distributions are generally payable in cash.
Participants experiencing serious financial hardships may be entitled to
a distribution upon approval of the Plan administrator.
Administrative Expenses
All administrative expenses, effective January 1, 1997, have been paid by
the plan participants.
(2) Recent Events
During the Plan year ended December 31, 1997, the Company amended the
Plan for the following items:
Merger of Keokuk Bargaining Unit 401(k) Plan
Effective January 1, 1997, the Keokuk Bargaining Unit 401(k) Plan, an
employee benefit plan of a subsidiary of the Company, was merged with and into
the Plan.
<PAGE> 16
(2) Continued
Change of Trustee and Investment Options
Effective January 31, 1997, the Plan changed its trustee to Vanguard.
Prior to January 31, 1997, the Plan's investments were maintained by the
plan's trustee, Corestates Bank. The Plan also changed its investment
options, keeping only the Airgas Common Stock Fund and the GIC Fund (renamed
the Investment Contract Fund) and replacing the two Fidelity funds with ten
Vanguard funds. Plan assets were fully transferred to the new investments by
April 1997. Additionally, effective January 1, 1997, administrative expenses
are paid by the plan participants.
(3) Summary of Significant Accounting Policies
Basis of Accounting
The accompanying financial statements of the Plan have been prepared on
the accrual basis of accounting and present net assets available for benefits
and changes in those assets.
Investments
The fair values of the ten Vanguard funds, the Fidelity Magellan Fund and
the Fidelity Puritan Fund are based on the net asset values per share at
year-end. The Investment Contract Fund is valued at year -end contract
values. Contract value represents contributions made under the contract, plus
interest at the contract rate, less funds used to pay administration expenses
charged by the insurance company.
Investments in the Airgas, Inc. Common Stock Fund are valued at market
based upon closing prices at the Plan year-end. At December 31, 1997, 3,681
plan participants were invested in the Airgas, Inc. Common Stock Fund. The
value per share was $14.00 at December 31, 1997.
The Vanguard Explorer Fund seeks to provide long-term growth of capital
by investing in a diversified group of small-company stocks with prospect for
above-average growth. At December 31, 1997 the Vanguard Explorer Fund had 329
plan participants invested in the fund. The value per share was $55.30 at
December 31, 1997.
The Vanguard International Growth Portfolio seeks to provide long-term
growth of capital by investing in stock of high-quality, seasoned companies
based outside the United States. Stocks are selected from more than 15
countries. At December 31, 1997, the Vanguard International Growth Portfolio
had 367 plan participants invested in the fund. The value per share was
$16.39 at December 31, 1997.
<PAGE> 17
(3) Continued
Vanguard U.S. Growth Portfolio seeks to provide long-term growth of
capital by investing in large, high-quality, seasoned U.S. companies with
records of exceptional growth and above-average prospects for future growth.
At December 31, 1997, the Vanguard U.S. Growth Portfolio had 2,575 plan
participants invested in the fund. The value per share was $28.70 at December
31, 1997.
The Vanguard Index Trust - 500 Portfolio seeks to provide long-term
growth of capital and income from dividends by holding each of the 500 stocks
that make up the unmanaged Standard & Poor's 500 Composite Stock Price Index,
a widely recognized benchmark of U.S. market performance. At December 31,
1997 the Vanguard Index Trust - 500 Portfolio had 721 plan participants
invested in the fund. The value per share was $90.07 at December 31, 1997.
The Vanguard/Wellington Fund seeks to provide income and long-term growth
of capital, without undue risk to capital, by investing approximately 65% of
its assets in stocks and the remaining 35% in bonds. At December 31, 1997,
the Vanguard/Wellington Fund had 2,118 plan participants invested in the fund.
The value per share was $29.45 at December 31, 1997.
The Vanguard LifeStrategy Growth Portfolio seeks to provide long-term
growth of capital and income by investing in four Vanguard funds: a domestic
stock fund; an international stock fund; a bond fund; and an asset allocation
fund. At December 31, 1997, the Vanguard LifeStrategy Growth Portfolio Fund
has 341 plan participants invested in the fund. The value per share was
$16.04 at December 31, 1997.
The Vanguard LifeStrategy - Moderate Growth Portfolio seeks to provide
income and long-term growth of capital and income by investing in four
Vanguard funds: a domestic stock fund; an international stock fund; a bond
fund; and an asset allocation fund. The Portfolio's asset allocation ranges
are expected to be 45%-70% stocks, 30%-55% bonds, and 0%-25% short-term
reserves. At December 31, 1997, the Vanguard LifeStrategy - Moderate Growth
Portfolio had 224 plan participants invested in the fund. The value per share
was $14.81 at December 31, 1997.
The Vanguard LifeStrategy - Conservative Growth Portfolio seeks to
provide income and moderate long-term growth of capital and income by
investing in five Vanguard funds: a domestic stock fund; international stock
fund; two bond funds; and an asset allocation fund. The portfolio's asset
allocation ranges are expected to be 25%-50% stocks, 30%-55% bonds, and
20%-45% short-term reserves. At December 31, 1997 the Vanguard LifeStrategy -
Conservative Growth Portfolio had 113 plan participants invested in the
fund. The value per share was $13.40 at December 31, 1997.
The Vanguard LifeStrategy Income Portfolio seeks to provide a high level
of income growth of capital by investing in four Vanguard funds: a stock
fund; two bond funds; and an asset allocation fund. The Portfolio's asset
allocation ranges are expected to be 5%-30% stocks, 50%-75% bonds, and 20%-45%
short-term reserves. At December 31, 1997, the Vanguard LifeStrategy Income
Portfolio had 74 plan participants invested in the fund. The value per share
was $12.43 at December 31, 1997.
<PAGE> 18
(3) Continued
The Vanguard Bond Index Fund seeks to provide a high level of interest
income by attempting to match the performance of the unmanaged Lehman Brothers
Aggregate Bond Index, a widely recognized measure of the entire taxable U.S.
bond market. At December 31, 1997, the Vanguard Bond Index Fund had 147 plan
participants invested in the fund. The value per share was $10.09 at December
31, 1997.
The Investment Contract Fund seeks to preserve the value of the
participants original investment and provide an attractive level of interest
by investing primarily in investment contracts issued by insurance companies
and banks, and other similar types of fixed-principal investments. It is
designed to maintain a constant $1.00 share value. At December 31, 1997,
3,340 plan participants invested in Airgas Investment Contract Fund.
Use of Estimates
The preparation of the financial statements in accordance with generally
accepted accounting principles requires the plan administrator to make
estimates that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts included in the
statement of changes in net assets available for plan benefits. Actual
results could differ from those estimates.
<PAGE>
<PAGE> 19
<TABLE>
(4) Investments
The following presents fair value of investments and the contract value of the guaranteed
investment contracts fund held at December 31, 1997 and 1996:
December 31, 1997
<CAPTION>
Number Fair/
of Contract
Shares Investments Cost Value
_______________________________________________________________________________________________________
<S> <C> <C> <C>
Common Stock:
2,221,025 Airgas Common Stock $28,117,347 31,094,350
_______________________________________________________________________________________________________
Mutual Funds:
12,886 Vanguard Explorer Fund 782,408 712,579
50,880 Vanguard International Growth Portfolio 924,657 833,923
681,701 Vanguard U.S. Growth Portfolio 17,726,029 19,564,818
38,078 Vanguard Index Trust-500 Portfolio 3,278,787 3,429,706
417,173 Vanguard/Wellington Fund 11,666,266 12,285,732
39,964 Vanguard LifeStrategy-Growth Portfolio 634,829 641,028
41,712 Vanguard LifeStrategy-Moderate Growth Portfolio 614,460 617,754
38,022 Vanguard LifeStrategy-Conservative Growth Portfolio 510,404 509,496
16,541 Vanguard LifeStrategy-Income Portfolio 203,787 205,599
34,323 Vanguard Bond Index Fund 342,119 346,319
_______________________________________________________________________________________________________
36,683,746 39,146,954
_______________________________________________________________________________________________________
Guaranteed Investment Contracts:
American International Life Assurance Co.,
Guaranteed Investment Contract, 5.06%,
due 1/99 3,039,105 3,039,105
John Hancock Guaranteed Investment Contracts,
5.31% to 7.02%, due 5/98 to 5/99 3,046,510 3,046,510
Continental Assurance Co. Guaranteed Investment
Contract, 6.64%, due 5/98 2,956,124 2,956,124
Retirement Savings Trust, 6.17%, due 8/2000 10,548,758 10,548,758
_______________________________________________________________________________________________________
19,590,497 19,590,497
_______________________________________________________________________________________________________
$84,391,590 89,831,801
</TABLE>
<PAGE> 20
<TABLE>
(4) Continued December 31, 1996
<CAPTION>
Number Fair/
of Contract
Shares Investments Cost Value
_______________________________________________________________________________________________________
<S> <C> <C> <C>
Common Stock:
2,047,795 Airgas, Inc. Common Stock $23,272,216 45,051,490
_______________________________________________________________________________________________________
Mutual Funds:
153,241 Fidelity Magellan Fund 11,434,465 12,358,950
429,604 Fidelity Puritan Fund 7,002,598 7,406,370
_______________________________________________________________________________________________________
18,437,063 19,765,320
_______________________________________________________________________________________________________
Guaranteed Investment Contracts:
American International Life Assurance Co.,
Guaranteed Investment Contract, 5.06%,
due 1/99 3,126,007 3,126,007
Hartford Insurance Group Guaranteed
Investment Contract, 7.56% due 12/97 549,801 549,801
Confederation Guaranteed Investment Contract,
8.21%, due 12/95 (note 7) 1,039,957 1,039,957
Great West Life Guaranteed Investment
Contracts, 5.85% to 6.75%, due 1/97 to 7/97 3,537,905 3,537,905
John Hancock Guaranteed Investment Contracts,
5.31% to 7.02%, due 5/98 to 5/99 2,955,056 2,955,056
Continental Assurance Co. Guaranteed Investment
Contract, 6.64%, due 5/98 2,863,392 2,863,392
_______________________________________________________________________________________________________
14,072,118 14,072,118
_______________________________________________________________________________________________________
Short-term Investment:
Vanguard Money Market Account 895,667 895,667
_______________________________________________________________________________________________________
$56,677,064 79,784,595
<FN>
The average cost method is followed in determining the cost of investments sold. Purchases and
sales of securities are recorded on a trade date basis.
</FN> </TABLE>
<PAGE> 21
(4) Continued
The average yield earned on the Investment Contract Funds was
approximately 8.9% and 5.6% for the years ended December 31, 1997 and 1996,
respectively. As of December 31, 1997 and December 31, 1996, interest rates
ranged from 5.06% to 7.56%. The increase in the average yield earned on the
Investment Contract Funds relates to the receipt of $364,000 for settlement of
the Confederation Life Fund. Exclusive of this item, the average yield earned
on the Investment Contract Fund for the Plan year ended December 31, 1997 was
approximately 6.9%. In August 1994 the assets of Confederation Life Insurance
Company were placed under the regulatory supervision of the Michigan
Commissioner of Insurance. The Confederation Life Guaranteed Investment
Contract (GIC) was subject to certain regulatory restrictions, and thus the
Plan management ceased accruing interest on the funds. In March 1997 the
rehabilitation plan of the assets was finalized. The rehabilitation plan
provided for receipt of 100% of the August 1994 value into the Plan plus
interest earned between the liquidation plan's asset valuation date and the
actual distribution date. The rehabilitation plan also provides for the
distribution of certain contingent assets, such as litigation proceeds, to GIC
investors in the future as they may become available.
The following investments represent 5% or more of the net assets
available for benefits at December 31, 1997:
Percentage of
Participant's
Fair Value Equity
__________________________________________________________________________
Airgas, Inc. Common Stock $ 31,094,350 32.6%
Vanguard U.S. Growth Portfolio 19,564,818 20.5
Vanguard/Wellington Fund 12,285,732 12.9
Retirement Savings Trust 10,548,758 11.1
__________________________________________________________________________
(5) Federal Income Taxes
As noted in Note 2, the Company amended the Plan effective January 1,
1997. The Company has not yet received a favorable determination letter from
the Internal Revenue Service. The Plan Administrator believes that the Plan
continues to be a qualified trust under Section 401(a) of the Internal Revenue
Code and, thus, is exempt from federal income taxes under Section 501(a) of
the Internal Revenue Code as of December 31, 1997.
(6) Plan Termination
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. Upon termination of
the Plan, participants would remain fully vested in all amounts credited to
their accounts under the Plan.
<PAGE>
<PAGE> 22
<TABLE>
AIRGAS, INC. 401(k) PLAN Schedule 1
Item 27 (a) - Schedule of Assets Held for Investment Purposes
December 31, 1997
<CAPTION>
Number of Fair/Contract
Shares Investments Cost Value
_______________________________________________________________________________________________________
<S> <C> <C> <C>
Common Stock:
2,221,025 Airgas Common Stock $28,117,347 31,094,350
_______________________________________________________________________________________________________
Mutual Funds:
12,886 Vanguard Explorer Fund 782,408 712,579
50,880 Vanguard International Growth Portfolio 924,657 833,923
681,701 Vanguard U.S. Growth Portfolio 17,726,029 19,564,818
38,078 Vanguard Index Trust-500 Portfolio 3,278,787 3,429,706
417,173 Vanguard/Wellington Fund 11,666,266 12,285,732
39,964 Vanguard LifeStrategy-Growth 634,829 641,028
41,712 Vanguard LifeStrategy-Moderate Growth 614,460 617,754
38,022 Vanguard LifeStrategy-Conservative Growth 510,404 509,496
16,541 Vanguard LifeStrategy-Income 203,787 205,599
34,323 Vanguard Bond Index Fund 342,119 346,319
_______________________________________________________________________________________________________
36,683,746 39,146,954
_______________________________________________________________________________________________________
Guaranteed Investment Contracts:
American International Life Assurance Co.,
Guaranteed Investment Contract, 5.06%,
due 1/99 3,039,105 3,039,105
John Hancock Guaranteed Investment Contracts,
5.31% to 7.02%, due 5/98 to 5/99 3,046,510 3,046,510
Continental Assurance Co. Guaranteed Investment
Contract, 6.64%, due 5/98 2,956,124 2,956,124
Retirement Savings Trust, 6.17%, due 8/2000 10,548,758 10,548,758
_______________________________________________________________________________________________________
19,590,497 19,590,497
_______________________________________________________________________________________________________
Employee loans 4,410,536 4,410,536
_______________________________________________________________________________________________________
$88,802,126 94,242,337
</TABLE>
<PAGE> 23
<TABLE>
AIRGAS, INC. 401(k) PLAN
Item 27(d) - Schedule of Reportable Transactions
Year ended December 31, 1997
<CAPTION>:
_______________________________________________________________________________________________________
During the year ended December 31, 1997, the Plan had the following reportable transactions by issue:
Identity of Description Transaction Purchase Selling Cost of Net
party involved of asset Type Price Price Asset Gain (Loss)
_______________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
The Vanguard Group Vanguard U.S. Growth Purchase $20,114,859 - - -
Portfolio Sale - 2,580,736 2,388,830 191,906
The Vanguard Group Vanguard/Wellington Purchase 13,236,886 - - -
Fund Sale - 1,672,291 1,570,620 101,671
The Vanguard Group Investment Contract Purchase 10,548,758 - - -
Fund
N/A Airgas Common Stock Purchase 10,446,633 - - -
Sale - 7,389,405 5,601,502 1,787,903
Corestates Corestates Liquidity Purchase 26,670,491 - - -
Fund Sale - 31,095,486 31,095,486 -
Corestates Fidelity Puritan Fund Purchase 150,378 - - -
Sale - 7,316,498 7,152,976 163,522
Corestates Fidelity Magellan Fund Purchase 148,545 - - -
Sale - 11,955,582 11,583,010 372,572
_______________________________________________________________________________________________________
</TABLE>
<PAGE>
<PAGE> EX-1
EXHIBIT 23.1
Consent of Independent Auditors
The Board of Directors
Airgas, Inc.
We consent to incorporation by reference in the registration statements (Nos.
33-25419 and 33-64058) on Form S-8 of Airgas, Inc. of our report dated May 27,
1998 relating to the statements of net assets available for benefits of
Airgas, Inc. 401(k) Plan as of December 31, 1997 and 1996, the related
statements of changes in net assets available for benefits for the years ended
in December 31, 1997 and 1996, and the related supplemental schedule of assets
held for investment purposes and schedule of reportable transactions as of
December 31, 1997, which report is included in the December 31, 1997 Annual
Report on Form 11-K of Airgas, Inc. 401(k) Plan.
KPMG Peat Marwick LLP
Philadelphia, Pennsylvania
June 24, 1998
<PAGE>
