LEHIGH VALLEY, Pa.,
Oct. 21, 2011 /PRNewswire/ --
Access the Q4 earnings teleconference scheduled for 10:00
a.m. Eastern Daylight Time on October 21 by
calling (719) 457-2662 and entering passcode 9784651
or listen on the Web at
www.airproducts.com/en/investors/earnings-releases/teleconference-information.aspx.
Fourth Quarter Highlights
- Sales of $2.6 billion up 11%
- EPS of $1.51 up 12%*
- Awarded significant Tonnage contracts in the U.S. Gulf Coast
and China
- Agreement with new equity affiliate partner in Saudi Arabia
Full Year Highlights
- Sales of $10.1 billion up
12%
- EPS of $5.73 up 14%*
- Capital spending of $1.6 billion
up 22%*
- $649 million in share repurchases
completed and new $1 billion
authorization
- Dividend increased for 29th consecutive year
Air Products (NYSE: APD) today reported net income of
$325 million, or diluted earnings per
share (EPS) of $1.51, for its fiscal
2011 fourth quarter versus $294
million* and $1.35*,
respectively, for the fourth quarter of fiscal 2010.
The discussion of fourth quarter and full year results and
guidance in this release is based on non-GAAP comparisons. A
reconciliation can be found at the end of this release.*
Fourth quarter revenues of $2,611
million increased 11 percent versus prior year and one
percent sequentially. Underlying revenues were up six percent and
two percent, respectively. Operating income of $425 million rose six percent versus prior year
and two percent sequentially on improved volumes.
For fiscal 2011, sales of $10,082
million increased 12 percent, primarily driven by a nine
percent volume increase. Operating income of $1,671 million was up 13 percent and diluted EPS
of $5.73 increased 14 percent from
the prior year.
Commenting on the results, John
McGlade, chairman, president and CEO said, "This quarter's
improvements were driven by growth in emerging markets and strong
performance in our Tonnage Gases business. Overall economic
activity for this quarter continued at the slower underlying growth
rate we saw last quarter."
Reflecting on the year, McGlade said, "We achieved another solid
year of key project wins, double digit sales and earnings growth
despite a slowing global economy in the second half of 2011. More
importantly, we saw strong gains in operating cash flow, and we
improved our most important measure, return on capital, by 80 basis
points to 13.3% for the year."
Fourth Quarter Segment Performance
- Merchant Gases sales of $1,045
million increased 10 percent from the prior year on higher
volumes in Asia and
U.S./Canada. Sequentially, sales
increased two percent, on three percent volume growth. Operating
income of $192 million improved four
percent from the prior year on better volumes and positive pricing
in Asia and U.S./Canada. This was partially offset by higher
costs and lower Healthcare pricing in Europe.
- Tonnage Gases sales of $883
million were up 17 percent from the prior year on 11 percent
volume growth, primarily driven by new projects. Sales were up two
percent sequentially. Operating income of $152 million was up 30 percent from the prior
year, based on higher volumes, lower costs and gains related to
contract modifications.
- Electronics and Performance Materials sales of
$587 million increased
12 percent from the prior year, primarily on higher
Electronics volumes and Performance Materials pricing.
Sequentially, sales decreased three percent on lower Performance
Materials volumes due to slowdowns in key markets including
housing, construction and autos. Operating income of $92 million was up nine percent on higher
Electronics volumes and improved pricing in Performance Materials.
- Equipment and Energy sales of $96
million and operating income of $12
million were down 25 percent and 43 percent, respectively,
versus the prior year due to lower LNG and air separation unit
activity. Sequential sales were up 21 percent on higher air
separation unit activity. The sales backlog versus prior year is up
22 percent based on several new large orders.
Outlook
Looking ahead, McGlade said, "While the near-term economic
outlook is for continued slow growth and is clouded by global
economic and policy uncertainties, we are well positioned with a
large backlog of projects backed by signed customer contracts. We
are confident that the prospects for industrial gases and Air
Products, in particular, remain bright, and we remain committed to
achieving our 2015 goals for growth, margin and, most importantly,
return on capital."
The company today announced initial guidance for fiscal year
2012 EPS in the range of $5.90 to
$6.30 per share, representing year-over-year earnings growth
of three to 10 percent. For the first quarter of fiscal 2012 ending
December 31, 2011, EPS is expected to be between $1.31 and $1.39 per share.
The company also announced that it expects capital spending in
fiscal 2012 to be between $1.9 and $2.2
billion.
Air Products (NYSE:APD) serves customers in industrial, energy,
technology and healthcare markets worldwide with a unique portfolio
of atmospheric gases, process and specialty gases, performance
materials, and equipment and services. Founded in 1940,
Air Products has built leading positions in key growth markets
such as semiconductor materials, refinery hydrogen, home healthcare
services, natural gas liquefaction, and advanced coatings and
adhesives. The company is recognized for its innovative culture,
operational excellence and commitment to safety and the
environment. In fiscal 2011, Air Products had revenues of
$10.1 billion, operations in over 40
countries, and 18,900 employees around the globe. For more
information, visit www.airproducts.com.
NOTE: This release contains "forward-looking statements"
within the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, including earnings guidance,
projections and targets. These forward-looking statements are based
on management's reasonable expectations and assumptions as of the
date of this release. Actual performance and financial results may
differ materially from projections and estimates expressed in the
forward-looking statements because of many factors not anticipated
by management, including, without limitation, renewed deterioration
in global economic and business conditions, including weakening
demand for the Company's products and inability to maintain
pricing; future financial and operating performance of major
customers and industries served by the Company; unanticipated
contract terminations or customer cancellations or postponement of
projects and sales; the success of commercial negotiations; asset
impairments due to economic conditions or specific product or
customer events; the impact of competitive products and pricing;
interruption in ordinary sources of supply of raw materials; the
Company's ability to recover energy and raw material costs from
customers ; the Company's ability to maintain and improve cost
efficiency of operations; costs and outcomes of litigation or
regulatory activities; successful development and market acceptance
of new products and applications, the ability to attract, hire and
retain qualified personnel in all regions of the world where the
Company operates; the success of cost reduction and productivity
programs; the timing, impact, and other uncertainties of future
acquisitions, divestitures and restructuring activities;
significant fluctuations in interest rates and foreign currencies
from that currently anticipated; the continued availability of
capital funding sources in all of the Company's foreign operations;
the impact of environmental, healthcare, tax or other legislation
and regulations in jurisdictions in which the Company and its
affiliates operate; the impact of new or changed financial
accounting guidance; the timing and rate at which tax credits can
be utilized and other risk factors described in the Company's Form
10K for its fiscal year ended September 30,
2010. The Company disclaims any obligation or undertaking to
disseminate any updates or revisions to any forward-looking
statements contained in this document to reflect any change in the
Company's assumptions, beliefs or expectations or any change in
events, conditions, or circumstances upon which any such
forward-looking statements are based.
*The presentation of non-GAAP measures is intended to enhance
the usefulness of financial information by providing measures which
our management uses internally to evaluate our baseline performance
on a comparable basis. Presented below are reconciliations
of the reported GAAP results to non-GAAP measures. Income from
continuing operations and diluted EPS data are attributable to Air
Products.
CONSOLIDATED RESULTS
|
|
|
|
Continuing
Operations
|
|
|
|
Q4
|
Q4
|
Q4
|
YTD
|
YTD
|
|
|
|
Operating
Income
|
Income
|
Diluted
EPS
|
Operating
Income
|
Diluted
EPS
|
|
2011 GAAP
|
|
$425.3
|
$324.8
|
$1.51
|
$1,622.2
|
$5.59
|
|
2010 GAAP
|
|
367.0
|
272.1
|
1.25
|
1,389.0
|
4.74
|
|
% Change GAAP
|
|
16%
|
19%
|
21%
|
17%
|
18%
|
|
|
|
|
|
|
|
|
|
2011 GAAP
|
|
|
|
|
$1,622.2
|
$5.59
|
|
Net loss on Airgas
transaction
(YTD tax impact $16.9)
(a)
|
|
|
|
48.5
|
.14
|
|
2011 Non-GAAP Measure
|
|
|
|
|
$1,670.7
|
$5.73
|
|
|
|
|
|
|
|
|
|
2010 GAAP
|
|
$367.0
|
272.1
|
$1.25
|
$1,389.0
|
4.74
|
|
Net loss on
Airgas transaction
|
|
|
|
|
|
|
(Q4 tax impact $12.9, YTD tax
impact $35.9) (b)
|
34.7
|
21.8
|
.10
|
96.0
|
.28
|
|
2010 Non-GAAP Measure
|
|
$401.7
|
$293.9
|
$1.35
|
$1,485.0
|
$5.02
|
|
% Change Non-GAAP
|
|
6%
|
11%
|
12%
|
13%
|
14%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1
2012
|
YTD 2012
|
|
2012 Guidance
|
|
|
$1.31-$1.39
|
$5.90-$6.30
|
|
2011 GAAP
|
|
|
|
$5.59
|
|
% Change
|
|
|
|
6%-13%
|
|
|
|
|
|
|
|
% Change Non-GAAP
Measure
|
|
|
|
3% -10%
|
|
(a) Based on statutory tax rate
of 36.57%, including impact of tax rate adjustment for 2010 and
first quarter 2011 costs.
(b) Based on statutory tax rate
of 37.4%.
|
|
|
|
|
|
|
Return on Capital Employed (ROCE)
ROCE is calculated as earnings after-tax divided by five-quarter
average total capital. Earnings after-tax is defined as operating
income and equity affiliates' income, after-tax at our quarterly
effective tax rate. On a non-GAAP basis, operating income and taxes
have been adjusted for the impact of the net loss on Airgas
transaction. Total capital consists of total debt and total
equity.
|
|
|
2011
|
2010
|
Basis
Point
Change
|
|
Earnings after-tax
GAAP
|
$1,340.0
|
$1,146.8
|
|
|
Five-quarter average total
capital
|
10,317.2
|
9,636.4
|
|
|
ROCE GAAP
|
13.0%
|
11.9%
|
110
|
|
|
|
|
|
|
|
2011
|
2010
|
Basis
Point
Change
|
|
Earnings after-tax
Non-GAAP
|
$1,370.9
|
$1,205.6
|
|
|
Five-quarter average total
capital
|
10,317.2
|
9,636.4
|
|
|
ROCE Non-GAAP
|
13.3%
|
12.5%
|
80
|
|
|
|
|
|
|
|
Capital Expenditures
We utilize a non-GAAP measure in the computation of capital
expenditures and include spending associated with facilities
accounted for as capital leases. Certain facilities that are
built to provide product to a specific customer are required to be
accounted for as capital leases and such spending is reflected as a
use of cash within cash provided by operating activities.
|
|
|
YTD
|
|
(Millions of dollars)
|
|
2011
|
|
Capital expenditures – GAAP
basis
|
|
$1,408.3
|
|
Capital lease
expenditures
|
|
173.5
|
|
Capital expenditures – Non-GAAP
basis
|
|
$1,581.8
|
|
|
|
|
|
|
|
|
|
2012 Forecast
|
|
Capital expenditures - GAAP
Measure
|
$1,600 to
$1,800
|
|
Capital lease
expenditures
|
300 to 400
|
|
Capital expenditures – Non-GAAP
Measure
|
$1,900 to
$2,200
|
|
|
|
|
|
AIR PRODUCTS
AND CHEMICALS, INC. and Subsidiaries
CONSOLIDATED
INCOME STATEMENTS
(Unaudited)
|
|
|
Three Months
Ended
30
September
|
Twelve
Months Ended
30
September
|
|
(Millions of dollars, except for
share data)
|
2011
|
2010
|
2011
|
2010
|
|
Sales
|
$2,611.2
|
$2,351.2
|
$10,082.0
|
$9,026.0
|
|
Cost of sales
|
1,910.2
|
1,694.7
|
7,315.3
|
6,503.0
|
|
Selling and
administrative
|
257.5
|
231.2
|
1,014.4
|
956.9
|
|
Research and
development
|
32.4
|
31.9
|
118.8
|
114.7
|
|
Net loss on Airgas
transaction
|
—
|
34.7
|
48.5
|
96.0
|
|
Customer bankruptcy
|
—
|
(4.6)
|
—
|
(6.4)
|
|
Pension settlement
|
—
|
5.2
|
—
|
11.5
|
|
Other income, net
|
14.2
|
8.9
|
37.2
|
38.7
|
|
Operating Income
|
425.3
|
367.0
|
1,622.2
|
1,389.0
|
|
Equity affiliates'
income
|
55.1
|
35.3
|
154.3
|
126.9
|
|
Interest expense
|
28.6
|
30.8
|
115.5
|
121.9
|
|
Income from Continuing
Operations before Taxes
|
451.8
|
371.5
|
1,661.0
|
1,394.0
|
|
Income tax
provision
|
112.7
|
93.5
|
408.4
|
339.5
|
|
Income from Continuing
Operations
|
339.1
|
278.0
|
1,252.6
|
1,054.5
|
|
Income from Discontinued
Operations, net of tax
|
—
|
—
|
8.9
|
—
|
|
Net Income
|
339.1
|
278.0
|
1,261.5
|
1,054.5
|
|
Less: Net
Income Attributable to Noncontrolling Interests
|
14.3
|
5.9
|
37.3
|
25.4
|
|
Net Income Attributable to Air
Products
|
$324.8
|
$272.1
|
$1,224.2
|
$1,029.1
|
|
Net Income Attributable to Air
Products
|
|
|
|
|
|
Income from continuing
operations
|
$324.8
|
$272.1
|
$1,215.3
|
$1,029.1
|
|
Income from discontinued
operations
|
—
|
—
|
8.9
|
—
|
|
Net Income Attributable to Air
Products
|
$324.8
|
$272.1
|
$1,224.2
|
$1,029.1
|
|
Basic
Earnings Per Common Share Attributable to Air
Products
|
|
|
|
|
|
Income from continuing
operations
|
$1.54
|
$1.28
|
$5.71
|
$4.85
|
|
Income from discontinued
operations
|
—
|
—
|
.04
|
—
|
|
Net Income Attributable to Air
Products
|
$1.54
|
$1.28
|
$5.75
|
$4.85
|
|
Diluted
Earnings Per Common Share Attributable to Air
Products
|
|
|
|
|
|
Income from continuing
operations
|
$1.51
|
$1.25
|
$5.59
|
$4.74
|
|
Income from discontinued
operations
|
—
|
—
|
.04
|
—
|
|
Net Income Attributable to Air
Products
|
$1.51
|
$1.25
|
$5.63
|
$4.74
|
|
|
|
|
|
|
|
Weighted
Average of Common Shares Outstanding (in
millions)
|
211.2
|
212.8
|
213.0
|
212.2
|
|
Weighted
Average of Common Shares Outstanding
Assuming Dilution
(in millions)
|
215.3
|
217.5
|
217.6
|
217.1
|
|
Dividends Declared Per Common
Share – Cash
|
$.58
|
$.49
|
$2.23
|
$1.92
|
|
Other Data from Continuing
Operations:
|
|
|
|
|
|
Depreciation and
amortization
|
$216.6
|
$214.6
|
$873.9
|
$863.4
|
|
Capital expenditures on a
Non-GAAP basis
(see reconciliation at end of
announcement)
|
413.5
|
304.7
|
1,581.8
|
1,298.4
|
|
|
|
|
|
|
|
|
AIR PRODUCTS
AND CHEMICALS, INC. and Subsidiaries
CONDENSED
CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
|
(Millions of dollars)
|
30
September
2011
|
30
September
2010
|
|
Assets
|
|
|
|
Current Assets
|
|
|
|
Cash and cash items
|
$422.5
|
$374.3
|
|
Trade receivables,
net
|
1,575.0
|
1,481.9
|
|
Inventories
|
681.4
|
571.6
|
|
Contracts in progress, less
progress billings
|
146.7
|
163.6
|
|
Prepaid expenses
|
77.9
|
70.3
|
|
Other receivables and current
assets
|
286.3
|
372.1
|
|
Total Current
Assets
|
3,189.8
|
3,033.8
|
|
Investment
in Net Assets of and Advances to Equity Affiliates
|
1,011.6
|
912.8
|
|
Plant and Equipment,
at cost
|
17,227.1
|
16,309.7
|
|
Less: Accumulated
depreciation
|
9,815.1
|
9,258.4
|
|
Plant and
Equipment, net
|
7,412.0
|
7,051.3
|
|
Goodwill
|
892.4
|
914.6
|
|
Intangible Assets,
net
|
260.7
|
285.7
|
|
Noncurrent Capital Lease
Receivables
|
1,042.8
|
770.4
|
|
Other Noncurrent
Assets
|
481.4
|
537.3
|
|
Total Assets
|
$14,290.7
|
$13,505.9
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
Current
Liabilities
|
|
|
|
Payables and accrued
liabilities
|
$1,641.8
|
$1,702.0
|
|
Accrued income taxes
|
65.5
|
73.6
|
|
Short-term
borrowings
|
562.5
|
286.0
|
|
Current
portion of long-term debt
|
72.2
|
182.5
|
|
Total
Current Liabilities
|
2,342.0
|
2,244.1
|
|
Long-Term
Debt
|
3,927.5
|
3,659.8
|
|
Other
Noncurrent Liabilities
|
1,512.4
|
1,569.3
|
|
Deferred
Income Taxes
|
570.1
|
335.1
|
|
Total
Liabilities
|
8,352.0
|
7,808.3
|
|
Total Air
Products Shareholders' Equity
|
5,795.8
|
5,546.9
|
|
Noncontrolling
Interests
|
142.9
|
150.7
|
|
Total
Equity
|
5,938.7
|
5,697.6
|
|
Total
Liabilities and Equity
|
$14,290.7
|
$ 13,505.9
|
|
|
|
|
|
|
AIR PRODUCTS
AND CHEMICALS, INC. and Subsidiaries
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
|
Twelve
Months Ended
30 September
|
|
(Millions of dollars)
|
2011
|
2010
|
|
Operating
Activities
|
|
|
|
Net Income
|
$1,261.5
|
$1,054.5
|
|
Less: Net income
attributable to noncontrolling interests
|
37.3
|
25.4
|
|
Net income attributable to
Air Products
|
$1,224.2
|
$1,029.1
|
|
Adjustments to reconcile
income to cash provided by operating activities:
|
|
|
|
Depreciation and
amortization
|
873.9
|
863.4
|
|
Deferred income
taxes
|
185.7
|
96.2
|
|
Undistributed earnings of
unconsolidated affiliates
|
(47.5)
|
(50.6)
|
|
Gain on sale of assets and
investments
|
(12.8)
|
(14.8)
|
|
Share-based
compensation
|
44.8
|
48.6
|
|
Noncurrent capital lease
receivables
|
(272.5)
|
(85.6)
|
|
Net loss on Airgas
transaction
|
48.5
|
96.0
|
|
Payment of
acquisition-related costs
|
(156.2)
|
(12.0)
|
|
Other
adjustments
|
69.7
|
(5.2)
|
|
Working
capital changes that provided (used) cash, excluding effects of
acquisitions and divestitures:
|
|
|
|
Trade
receivables
|
(103.5)
|
(142.5)
|
|
Inventories
|
(101.8)
|
(65.9)
|
|
Contracts in
progress
|
16.7
|
(33.9)
|
|
Other
receivables
|
14.2
|
41.5
|
|
Payables and accrued
liabilities
|
(32.4)
|
(293.6)
|
|
Other working
capital
|
2.2
|
51.7
|
|
Cash Provided by Operating
Activities
|
1,753.2
|
1,522.4
|
|
Investing
Activities
|
|
|
|
Additions to plant and
equipment
|
(1,351.7)
|
(1,030.9)
|
|
Acquisitions, less cash
acquired
|
(10.8)
|
(37.2)
|
|
Investment in and advances
to unconsolidated affiliates
|
(45.8)
|
(4.8)
|
|
Investment in Airgas
stock
|
—
|
(69.6)
|
|
Proceeds from sale of
Airgas stock
|
94.7
|
—
|
|
Proceeds from sale of
assets and investments
|
81.6
|
52.4
|
|
Change in restricted
cash
|
19.8
|
33.6
|
|
Cash Used
for Investing Activities
|
(1,212.2)
|
(1,056.5)
|
|
Financing
Activities
|
|
|
|
Long-term debt
proceeds
|
409.8
|
226.2
|
|
Payments on long-term
debt
|
(187.1)
|
(436.4)
|
|
Net increase (decrease) in
commercial paper and short-term borrowings
|
234.3
|
(74.6)
|
|
Dividends paid to
shareholders
|
(456.7)
|
(398.7)
|
|
Purchase of treasury
stock
|
(649.2)
|
—
|
|
Proceeds from stock option
exercises
|
148.2
|
88.1
|
|
Excess tax benefit from
share-based compensation
|
47.6
|
23.9
|
|
Other financing
activities
|
(31.4)
|
(8.2)
|
|
Cash Used for Financing
Activities
|
(484.5)
|
(579.7)
|
|
|
|
|
|
|
AIR PRODUCTS
AND CHEMICALS, INC. and Subsidiaries
CONSOLIDATED
STATEMENTS OF CASH FLOWS (CONTINUED)
(Unaudited)
|
|
|
Twelve
Months Ended
30 September
|
|
(Millions of dollars)
|
2011
|
2010
|
|
Effect of Exchange Rate Changes
on Cash
|
(8.3)
|
(.1)
|
|
Increase (Decrease) in Cash and
Cash Items
|
48.2
|
(113.9)
|
|
Cash and Cash Items – Beginning
of Year
|
374.3
|
488.2
|
|
Cash and Cash Items – End of
Period
|
$422.5
|
$374.3
|
|
|
|
|
|
Supplemental Cash Flow
Information
|
|
|
|
Pension plan
contributions
|
$241.0
|
$406.6
|
|
Significant noncash
transactions:
|
|
|
|
Short-term borrowings
associated with SAGA acquisition
|
—
|
60.9
|
|
Noncurrent liability
related to the purchase of shares from noncontrolling
interests
|
—
|
42.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AIR PRODUCTS
AND CHEMICALS, INC. and Subsidiaries
SUMMARY BY
BUSINESS SEGMENTS
(Unaudited)
|
|
|
Three Months
Ended
30 September
|
Twelve
Months Ended
30 September
|
|
(Millions of dollars)
|
2011
|
2010
|
2011
|
2010
|
|
Sales to External
Customers
|
|
|
|
|
|
Merchant Gases
|
$1,045.4
|
$948.0
|
$4,073.2
|
$3,718.3
|
|
Tonnage Gases
|
882.8
|
751.7
|
3,316.7
|
2,930.8
|
|
Electronics and
Performance Materials
|
587.2
|
523.2
|
2,291.5
|
1,904.7
|
|
Equipment and
Energy
|
95.8
|
128.3
|
400.6
|
472.2
|
|
Segment and Consolidated
Totals
|
$2,611.2
|
$2,351.2
|
$10,082.0
|
$9,026.0
|
|
|
|
|
|
|
|
Operating Income
|
|
|
|
|
|
Merchant Gases
|
$192.4
|
$185.3
|
$759.8
|
$729.4
|
|
Tonnage Gases
|
151.7
|
117.0
|
503.1
|
444.2
|
|
Electronics and
Performance Materials
|
91.5
|
84.0
|
361.1
|
251.8
|
|
Equipment and
Energy
|
11.5
|
20.2
|
62.8
|
67.3
|
|
Segment Total
|
$447.1
|
$406.5
|
$1,686.8
|
$1,492.7
|
|
Net loss on Airgas
transaction
|
—
|
(34.7)
|
(48.5)
|
(96.0)
|
|
Customer
bankruptcy
|
—
|
4.6
|
—
|
6.4
|
|
Pension
settlement
|
—
|
(5.2)
|
—
|
(11.5)
|
|
Other
|
(21.8)
|
(4.2)
|
(16.1)
|
(2.6)
|
|
Consolidated
Total
|
$425.3
|
$367.0
|
$1,622.2
|
$1,389.0
|
|
|
|
|
|
|
|
|
|
|
|
30
September
|
30
September
|
|
(Millions of dollars)
|
2011
|
2010
|
|
Identifiable Assets
(a)
|
|
|
|
Merchant Gases
|
$5,091.7
|
$5,075.3
|
|
Tonnage Gases
|
4,464.3
|
3,876.4
|
|
Electronics and
Performance Materials
|
2,488.9
|
2,275.8
|
|
Equipment and
Energy
|
335.6
|
341.3
|
|
Segment Total
|
$12,380.5
|
$11,568.8
|
|
Other
|
898.6
|
1,024.3
|
|
Consolidated
Total
|
$13,279.1
|
$12,593.1
|
|
(a) Identifiable assets are
equal to total assets less investment in net assets of and advances
to equity affiliates.
|
|
|
|
|
AIR PRODUCTS
AND CHEMICALS, INC. and Subsidiaries
|
|
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
|
|
(Unaudited)
|
|
|
(Millions of dollars, unless otherwise indicated)
DISCONTINUED OPERATIONS
A tax benefit of $8.9, or
$.04 per share, has been recognized
in income from discontinued operations for the twelve months ended
30 September 2011 as it relates to
the previously divested healthcare business. This benefit
resulted from the completion of an audit of tax years 2007 and 2008
by the U.S. Internal Revenue Service. For additional
historical information on the U.S. Healthcare divestiture, refer to
our 2010 Form 10-K.
AIRGAS TRANSACTION
In February 2010, we commenced a
tender offer to acquire all the outstanding common stock of Airgas,
Inc. (Airgas), including the associated preferred stock
purchase rights, for $60.00 per share
in cash, less any required withholding tax. The offer was
subject to certain terms and conditions set forth in the Offer to
Purchase dated 11 February 2010, as
amended, including Airgas' redemption of the preferred stock
purchase rights or such rights otherwise being inapplicable to our
purchase of Airgas stock. Airgas, a Delaware company, is the largest U.S.
distributor of industrial, medical, and specialty gases, and hard
goods. On 9 December 2010, we
increased the value of our tender offer to $70.00 per share. At this price, the total value
of the transaction would have been approximately $7.8 billion, including $6.1 billion of equity and $1.7 billion of assumed debt. Based on a decision
by the Delaware Chancery Court to
uphold the decision of Airgas' board of directors to retain the
preferred stock purchase rights, we withdrew our offer on
15 February 2011.
In connection with the tender offer, we had secured committed
financing in the form of a $6.7
billion term loan credit facility. On 3 February 2011, we entered into an amended and
restated credit agreement providing for an amended $6.7 billion term loan credit facility with a
maturity date of 4 June 2011.
No additional underwriting fees were incurred in relation to
the amended agreement. On 16 February
2011, in connection with the termination of the offer to
purchase all outstanding shares of common stock of Airgas, the
credit facility was terminated. No early termination
penalties were incurred and all fees previously accrued and due
under the credit facility were paid as of the date of
termination.
Prior to the tender offer, we purchased approximately 1.5
million shares of Airgas stock for a total cost of $69.6. This amount was recorded as an
available-for-sale investment within other noncurrent assets on the
consolidated balance sheet. On 16
February 2011, we sold the 1.5 million shares of Airgas
stock for total proceeds of $94.7 and
recognized a gain of $25.1
($15.9 after-tax, or $.07 per share).
For the twelve months ended 30 September
2011, a net loss of $48.5
($31.6 after-tax, or $.14 per share) was recognized related to this
transaction. This amount is reflected separately on the
consolidated income statement as "Net loss on Airgas transaction"
and includes amortization of the fees related to the term loan
credit facility, the gain on the sale of Airgas stock, and other
acquisition-related costs. For the twelve months ended
30 September 2011 and 2010, cash
payments for the acquisition-related costs were $156.2 and $12.0,
respectively. These payments are classified as operating
activities on the consolidated statements of cash flows.
RECONCILIATION
|
|
NON-GAAP
MEASURE
|
|
|
We utilize a non-GAAP measure in the computation of capital
expenditures and include spending associated with facilities
accounted for as capital leases and purchases of noncontrolling
interests. Certain contracts associated with facilities that are
built to provide product to a specific customer are required to be
accounted for as leases, and such spending is reflected as a use of
cash within cash provided by operating activities. Additionally,
the purchase of noncontrolling interests in a subsidiary is
accounted for as an equity transaction and will be reflected as a
financing activity in the statement of cash flows.
The presentation of this non-GAAP measure is intended to enhance
the usefulness of information by providing a measure which our
management uses internally to evaluate and manage our
expenditures.
Below is a reconciliation of capital expenditures on a GAAP
basis to a non-GAAP measure.
|
|
|
Three Months
Ended
30 September
|
Twelve
Months Ended
30 September
|
|
(Millions of dollars)
|
2011
|
2010
|
2011
|
2010
|
|
Capital expenditures – GAAP
basis
|
$387.1
|
$280.1
|
$1,408.3
|
$1,133.8
|
|
Capital lease
expenditures
|
26.4
|
22.4
|
173.5
|
122.6
|
|
Noncurrent liability related to
purchase of shares from noncontrolling interests
|
-
|
2.2
|
-
|
42.0
|
|
Capital expenditures – Non-GAAP
basis
|
$413.5
|
$304.7
|
$1,581.8
|
$1,298.4
|
|
|
|
|
|
|
|
|
SOURCE Air Products