LEHIGH
VALLEY, Pa., Aug. 4, 2022
/PRNewswire/ --
Q3 FY22 (comparisons versus prior year):
- GAAP EPS# of $2.62, up
11 percent; GAAP net income of $587
million, up 10 percent; and GAAP net income margin of 18.4
percent, down 200 basis points
- Adjusted EPS* of $2.62, up 13
percent; adjusted EBITDA* of $1,081
million, up 11 percent; and adjusted EBITDA margin* of 33.9
percent, down 360 basis points
Recent Highlights
- Advancing the Energy Transition:
-
- Developing potential projects in Oman, the United
Kingdom and the Netherlands
for the supply of low- and zero-carbon hydrogen
- Growing the Base On-site Business:
-
- Signed long-term supply agreement with Indian Oil Corporation
Limited ("IOCL") to build, own and operate a new industrial gases
complex supplying hydrogen, nitrogen and steam to IOCL's Barauni
Refinery in Bihar, India in
2024
- Demonstrating Sustainability in Action:
-
- Announced additional sustainability commitments, including
$15 billion in capital investments
for first-mover zero- and low-carbon hydrogen projects, goal to
reduce Scope 3 CO2 emissions intensity by one-third by 2030, path
to achieve net zero operations by 2050, and engagement with the
Science Based Targets Initiative to help support development of the
sectoral framework that will shape the methodology for the
chemicals sector
- Published 2022 Sustainability Report detailing the Company's
sustainability strategy in action, world-scale energy-transition
projects and industrial gases and expertise helping customers
reduce environmental impacts
- Hosted second annual Week of Inclusion, providing activities
and resources for all employees in support of the Company's
diversity goals
Guidance
- Maintained fiscal 2022 full-year adjusted EPS guidance* of
$10.20 to $10.40, up 14 percent at the midpoint, over prior
year adjusted EPS*; fiscal 2022 fourth quarter adjusted EPS
guidance* of $2.68 to $2.88, up seven to 15 percent over prior year
fourth quarter adjusted EPS*
- Expect fiscal year 2022 capital expenditures* of over
$4.5 billion
#Earnings per share is calculated and
presented on a diluted basis from continuing operations
attributable to Air Products.
*Certain results in this release, including in the highlights
above, include references to non-GAAP financial measures on a
consolidated, continuing operations basis and a segment basis.
Additional information regarding these measures and reconciliations
of GAAP to non-GAAP historical results can be found below. In
addition, as discussed below, it is not possible, without
unreasonable efforts, to identify the timing or occurrence of
events and transactions that could significantly impact future GAAP
EPS or cash flow used for investing activities if they were to
occur.
Air Products (NYSE:APD) today reported third quarter fiscal 2022
results, including GAAP EPS from continuing operations of
$2.62, up 11 percent over prior year,
and GAAP net income of $587 million,
up 10 percent over prior year due to higher pricing, higher equity
affiliates' income and higher volumes, which were partially offset
by higher costs driven by inflation, higher supply chain costs, and
planned maintenance activities, as well as unfavorable currency due
to the strengthening of the dollar. GAAP net income margin of 18.4
percent decreased 200 basis points, primarily driven by higher
energy cost pass-through, which negatively impacted margin by
approximately 250 basis points.
For the quarter, on a non-GAAP basis, adjusted EPS from
continuing operations of $2.62
increased 13 percent over the prior year, and adjusted EBITDA of
$1,081 million was up 11 percent over
the prior year, due to higher pricing, higher equity affiliates'
income and higher volumes, which were partially offset by higher
costs driven by inflation, higher supply chain costs, and planned
maintenance activities, as well as unfavorable currency due to the
strengthening of the dollar. Adjusted EBITDA margin of 33.9 percent
decreased 360 basis points, primarily driven by higher energy cost
pass-through, which negatively impacted margin by approximately 500
basis points.
Third quarter sales of $3.2
billion increased 22 percent over the prior year on 15
percent higher energy cost pass-through, seven percent higher
pricing and five percent higher volumes, partially offset by five
percent unfavorable currency. Volume growth was driven by new
assets, recovery in hydrogen in the Americas, better merchant
demand, and higher sale of equipment activity. Pricing improved in
the Americas, Asia and Europe—the
Company's three largest segments.
Commenting on the results, Air Products' Chairman, President and
Chief Executive Officer Seifi
Ghasemi said, "Our people across the globe are executing on
our strategy, which is fundamentally based on doing two things at
the same time: running our base industrial gas business
efficiently and continuing to invest in and grow it, while also
being the first-mover in low- and zero-carbon hydrogen projects
that help the world decarbonize and drive the broader energy
transition. Despite significant, continued challenges in the world,
our team's hard work and commitment are enabling the strength and
stability of our business to shine through, as evidenced in our
results this quarter."
Fiscal Third Quarter Results by Business Segment
- Americas sales of $1,416
million were up 33 percent over the prior year on 22 percent
higher energy cost pass-through, eight percent higher pricing, and
four percent higher volumes, partially offset by one percent
unfavorable currency. Operating income of $299 increased five percent and adjusted EBITDA
of $481 million increased three
percent on the higher pricing and higher volumes in the base
business, partially offset by costs for inflation, higher planned
maintenance, and higher supply chain costs as well as favorable
one-time items in the prior year. Operating margin of 21.1 percent
decreased 580 basis points and adjusted EBITDA margin of 33.9
percent decreased 980 basis points, primarily due to higher energy
cost pass-through, which lowered operating margin and adjusted
EBITDA margin by approximately 450 basis points and 800 basis
points, respectively.
- Asia sales of
$751 million were flat versus the
prior year, as two percent higher volumes and two percent higher
pricing were offset by four percent unfavorable currency. Operating
income of $211 million decreased four
percent and adjusted EBITDA of $324
million decreased five percent, as the favorable volumes and
pricing were more than offset by unfavorable currency as well as
costs for higher planned maintenance, inflation, and higher supply
chain costs. Operating margin of 28.0 percent decreased 110 basis
points and adjusted EBITDA margin of 43.1 percent decreased 230
basis points.
- Europe sales of
$740 million increased 23 percent
over the prior year on 24 percent higher energy cost pass-through
and 17 percent higher pricing across all product lines and
sub-regions, partially offset by 15 percent unfavorable currency
and three percent lower volumes. Operating income of $137 million increased three percent and adjusted
EBITDA of $207 million increased four
percent, primarily driven by higher pricing, which more than offset
lower volumes, higher power costs and unfavorable currency.
Adjusted EBITDA was also positively impacted by higher equity
affiliates' income. Operating margin of 18.6 percent decreased 380
basis points and adjusted EBITDA margin of 28.0 percent decreased
500 basis points, predominantly due to the higher energy cost
pass-through, which lowered operating margin and adjusted EBITDA
margin by approximately 450 basis points and 700 basis points,
respectively.
- Middle East and
India equity affiliates'
income of $67 million was up
$50 million over the prior year,
primarily from the Jazan joint venture.
- Corporate and other sales of $247
million increased 48 percent over the prior year, driven by
higher sale of equipment activity. This activity drove improvements
in both operating income and adjusted EBITDA.
Outlook
Air Products has maintained full-year fiscal 2022 adjusted EPS
guidance of $10.20 to $10.40, up 14 percent at midpoint, over prior
year adjusted EPS. For the fiscal 2022 fourth quarter, Air
Products' adjusted EPS guidance is $2.68 to $2.88, up
seven to 15 percent over fiscal 2021 fourth quarter adjusted
EPS.
Air Products expects capital expenditures of over $4.5 billion for full-year fiscal 2022.
Management has provided adjusted EPS guidance on a continuing
operations basis, which excludes the impact of certain items that
we believe are not representative of our underlying business
performance, such as the incurrence of additional costs for cost
reduction actions and impairment charges, or the recognition of
gains or losses on disclosed items. It is not possible, without
unreasonable efforts, to predict the timing or occurrence of these
events or the potential for other transactions that may impact
future GAAP EPS or the effective tax rate. Similarly, it is not
possible, without unreasonable efforts, to reconcile our forecasted
capital expenditures to future cash used for investing activities
because we are unable to identify the timing or occurrence of our
future investment activity, which is driven by our assessment of
competing opportunities at the time we enter into transactions.
Furthermore, it is not possible to identify the potential
significance of these events in advance, but any of these events,
if they were to occur, could have a significant effect on our
future GAAP results. Management therefore is unable to reconcile,
without unreasonable effort, the Company's forecasted range of
adjusted EPS, the effective tax rate and our capital expenditures
to a comparable GAAP range.
Earnings Teleconference
Access the fiscal 2022 third
quarter earnings teleconference scheduled for 8:30 a.m. Eastern Time on August 4, 2022 by
calling 323-701-0160 and entering passcode 5156956 or by accessing
the Event Details page on Air Products' Investor Relations
website.
About Air Products
Air Products (NYSE:APD) is a
world-leading industrial gases company in operation for over 80
years. Focused on serving energy, environment and emerging markets,
the Company provides essential industrial gases, related equipment
and applications expertise to customers in dozens of industries,
including refining, chemicals, metals, electronics, manufacturing,
and food and beverage. Air Products is also the global leader in
the supply of liquefied natural gas process technology and
equipment. The Company develops, engineers, builds, owns and
operates some of the world's largest industrial gas projects,
including: gasification projects that sustainably convert abundant
natural resources into syngas for the production of high-value
power, fuels and chemicals; carbon capture projects; and
world-scale low- and zero-carbon hydrogen projects supporting
global transportation and the energy transition.
The Company had fiscal 2021 sales of $10.3 billion from operations in over 50
countries and has a current market capitalization of about
$55 billion. More than 20,000
passionate, talented and committed employees from diverse
backgrounds are driven by Air Products' higher purpose to create
innovative solutions that benefit the environment, enhance
sustainability and address the challenges facing customers,
communities, and the world. For more information, visit
www.airproducts.com or follow us on LinkedIn, Twitter,
Facebook or Instagram.
Cautionary Note Regarding Forward-Looking Statements
This release contains "forward-looking statements" within the safe
harbor provisions of the Private Securities Litigation Reform Act
of 1995, including statements about earnings and capital
expenditure guidance, business outlook and investment
opportunities. Forward-looking statements are based on management's
expectations and assumptions as of the date of this release and are
not guarantees of future performance. While forward-looking
statements are made in good faith and based on assumptions,
expectations and projections that management believes are
reasonable based on currently available information, actual
performance and financial results may differ materially from
projections and estimates expressed in the forward-looking
statements because of many factors, including, without limitation:
the duration and impacts of the ongoing COVID-19 global pandemic
and efforts to contain its transmission, including the effect of
these factors on our business, our customers, economic conditions
and markets generally; changes in global or regional economic
conditions, inflation and supply and demand dynamics in the market
segments we serve, or in the financial markets that may affect the
availability and terms on which we may obtain financing; the
ability to implement price increases to offset cost increases;
disruptions to our supply chain and related distribution delays and
cost increases; risks associated with having extensive
international operations, including political risks, risks
associated with unanticipated government actions and risks of
investing in developing markets; project delays, contract
terminations, customer cancellations, or postponement of projects
and sales; our ability to develop, operate, and manage costs of
large-scale and technically complex projects, including
gasification and hydrogen projects; the future financial and
operating performance of major customers, joint ventures, and
equity affiliates; our ability to develop, implement, and operate
new technologies; our ability to execute the projects in our
backlog and refresh our pipeline of new projects; tariffs, economic
sanctions and regulatory activities in jurisdictions in which we
and our affiliates and joint ventures operate; the impact of
environmental, tax, or other legislation, as well as regulations
and other public policy initiatives affecting our business and the
business of our affiliates and related compliance requirements,
including legislation, regulations, or policies intended to address
global climate change; changes in tax rates and other changes in
tax law; the timing, impact, and other uncertainties relating to
acquisitions and divestitures, including our ability to integrate
acquisitions and separate divested businesses, respectively; risks
relating to cybersecurity incidents, including risks from the
interruption, failure or compromise of our information systems;
catastrophic events, such as natural disasters and extreme weather
events, public health crises, acts of war, including Russia's invasion of Ukraine and the ongoing civil war in
Yemen, or terrorism; the impact on
our business and customers of price fluctuations in oil and natural
gas and disruptions in markets and the economy due to oil and
natural gas price volatility; costs and outcomes of legal or
regulatory proceedings and investigations; asset impairments due to
economic conditions or specific events; significant fluctuations in
inflation, interest rates, and foreign currency exchange rates from
those currently anticipated; damage to facilities, pipelines or
delivery systems, including those we own or operate for third
parties; availability and cost of electric power, natural gas, and
other raw materials; the success of productivity and operational
improvement programs; and other risks described in our Annual
Report on Form 10-K for the fiscal year ended September 30, 2021 and subsequent filings we have
made with the U.S. Securities and Exchange Commission. You are
cautioned not to place undue reliance on our forward-looking
statements. Except as required by law, we disclaim any obligation
or undertaking to update or revise any forward-looking statements
contained herein to reflect any change in assumptions, beliefs, or
expectations or any change in events, conditions, or circumstances
upon which any such forward-looking statements are based.
Air Products and
Chemicals, Inc. and Subsidiaries CONSOLIDATED INCOME
STATEMENTS (Unaudited)
|
|
|
|
|
Three Months Ended
|
Nine Months
Ended
|
|
30 June
|
30 June
|
(Millions of
dollars, except for share and per share data)
|
2022
|
2021
|
2022
|
2021
|
Sales
|
$3,189.3
|
$2,604.7
|
$9,128.6
|
$7,481.9
|
Cost of
sales
|
2,342.1
|
1,801.9
|
6,717.3
|
5,179.8
|
Facility
closure
|
—
|
—
|
—
|
23.2
|
Selling and
administrative
|
216.9
|
213.3
|
676.7
|
626.3
|
Research and
development
|
24.8
|
23.2
|
71.8
|
67.8
|
Gain on exchange with
joint venture partner
|
—
|
—
|
—
|
36.8
|
Other income (expense),
net
|
21.9
|
10.8
|
49.5
|
43.1
|
Operating
Income
|
627.4
|
577.1
|
1,712.3
|
1,664.7
|
Equity affiliates'
income
|
116.1
|
63.2
|
384.7
|
202.3
|
Interest
expense
|
32.7
|
35.6
|
95.5
|
108.4
|
Other non-operating
income (expense), net
|
10.5
|
21.1
|
42.2
|
56.5
|
Income From
Continuing Operations Before Taxes
|
721.3
|
625.8
|
2,043.7
|
1,815.1
|
Income tax
provision
|
134.2
|
101.7
|
370.2
|
337.5
|
Income From
Continuing Operations
|
587.1
|
524.1
|
1,673.5
|
1,477.6
|
Income from
discontinued operations, net of tax
|
—
|
8.2
|
—
|
18.5
|
Net
Income
|
587.1
|
532.3
|
1,673.5
|
1,496.1
|
Net income (loss)
attributable to noncontrolling interests of continuing
operations
|
5.0
|
(1.3)
|
0.5
|
7.4
|
Net Income
Attributable to Air Products
|
$582.1
|
$533.6
|
$1,673.0
|
$1,488.7
|
|
|
|
|
|
Net Income
Attributable to Air Products
|
|
|
|
|
Net income from
continuing operations
|
$582.1
|
$525.4
|
$1,673.0
|
$1,470.2
|
Net income from
discontinued operations
|
—
|
8.2
|
—
|
18.5
|
Net Income
Attributable to Air Products
|
$582.1
|
$533.6
|
$1,673.0
|
$1,488.7
|
|
|
|
|
|
Per Share
Data*
|
|
|
|
|
Basic EPS from
continuing operations
|
$2.62
|
$2.37
|
$7.54
|
$6.63
|
Basic EPS from
discontinued operations
|
—
|
0.04
|
—
|
0.08
|
Basic EPS
Attributable to Air Products
|
$2.62
|
$2.41
|
$7.54
|
$6.72
|
|
|
|
|
|
Diluted EPS from
continuing operations
|
$2.62
|
$2.36
|
$7.52
|
$6.61
|
Diluted EPS from
discontinued operations
|
—
|
0.04
|
—
|
0.08
|
Diluted EPS
Attributable to Air Products
|
$2.62
|
$2.40
|
$7.52
|
$6.69
|
|
|
|
|
|
Weighted Average
Common Shares (in millions)
|
|
|
|
|
Basic
|
222.0
|
221.6
|
222.0
|
221.6
|
Diluted
|
222.5
|
222.5
|
222.5
|
222.5
|
*
|
Earnings per share
("EPS") is calculated independently for each component and may not
sum to total EPS due to rounding.
|
Air Products and
Chemicals, Inc. and Subsidiaries CONSOLIDATED BALANCE
SHEETS (Unaudited)
|
|
30 June
|
30 September
|
(Millions of
dollars)
|
2022
|
2021
|
Assets
|
|
|
Current
Assets
|
|
|
Cash and cash
items
|
$2,957.4
|
$4,468.9
|
Short-term
investments
|
357.6
|
1,331.9
|
Trade receivables,
net
|
1,768.6
|
1,451.3
|
Inventories
|
514.0
|
453.9
|
Prepaid
expenses
|
179.3
|
119.4
|
Other receivables and
current assets
|
590.4
|
550.9
|
Total Current
Assets
|
6,367.3
|
8,376.3
|
Investment in net
assets of and advances to equity affiliates
|
3,339.5
|
1,649.3
|
Plant and equipment, at
cost
|
28,349.1
|
27,488.8
|
Less: accumulated
depreciation
|
14,217.4
|
14,234.2
|
Plant and equipment,
net
|
14,131.7
|
13,254.6
|
Goodwill,
net
|
866.8
|
911.5
|
Intangible assets,
net
|
376.8
|
420.7
|
Noncurrent lease
receivables
|
641.9
|
740.3
|
Other noncurrent
assets
|
1,765.0
|
1,506.5
|
Total Noncurrent
Assets
|
21,121.7
|
18,482.9
|
Total
Assets
|
$27,489.0
|
$26,859.2
|
Liabilities and
Equity
|
|
|
Current
Liabilities
|
|
|
Payables and accrued
liabilities
|
$2,544.4
|
$2,218.3
|
Accrued income
taxes
|
107.9
|
93.9
|
Short-term
borrowings
|
207.3
|
2.4
|
Current portion of
long-term debt
|
547.3
|
484.5
|
Total Current
Liabilities
|
3,406.9
|
2,799.1
|
Long-term
debt
|
6,348.0
|
6,875.7
|
Long-term debt –
related party
|
483.6
|
274.6
|
Other noncurrent
liabilities
|
1,726.2
|
1,640.9
|
Deferred income
taxes
|
1,308.6
|
1,180.9
|
Total Noncurrent
Liabilities
|
9,866.4
|
9,972.1
|
Total
Liabilities
|
13,273.3
|
12,771.2
|
Air Products
Shareholders' Equity
|
13,643.9
|
13,539.7
|
Noncontrolling
Interests
|
571.8
|
548.3
|
Total
Equity
|
14,215.7
|
14,088.0
|
Total Liabilities
and Equity
|
$27,489.0
|
$26,859.2
|
Air Products
and Chemicals, Inc. and Subsidiaries CONSOLIDATED
STATEMENTS OF CASH FLOWS (Unaudited)
|
|
Nine Months
Ended
|
|
30 June
|
(Millions of
dollars)
|
2022
|
2021
|
Operating
Activities
|
|
|
Net income
|
$1,673.5
|
$1,496.1
|
Less: Net income
attributable to noncontrolling interests of continuing
operations
|
0.5
|
7.4
|
Net income attributable
to Air Products
|
1,673.0
|
1,488.7
|
Income from
discontinued operations
|
—
|
(18.5)
|
Income from continuing
operations attributable to Air Products
|
1,673.0
|
1,470.2
|
Adjustments to
reconcile income to cash provided by operating
activities:
|
|
|
Depreciation and
amortization
|
1,005.4
|
988.7
|
Deferred income
taxes
|
69.0
|
87.0
|
Facility
closure
|
—
|
23.2
|
Undistributed earnings
of equity method investments
|
(184.8)
|
(77.8)
|
Gain on sale of assets
and investments
|
(21.4)
|
(30.3)
|
Share-based
compensation
|
37.0
|
34.6
|
Noncurrent lease
receivables
|
65.5
|
78.3
|
Other
adjustments
|
(139.2)
|
(26.8)
|
Working capital changes
that provided (used) cash, excluding effects of
acquisitions:
|
|
|
Trade
receivables
|
(389.7)
|
(84.3)
|
Inventories
|
(80.8)
|
(36.4)
|
Other
receivables
|
(22.8)
|
53.6
|
Payables and accrued
liabilities
|
320.1
|
139.8
|
Other working
capital
|
(118.1)
|
(110.9)
|
Cash Provided by
Operating Activities
|
2,213.2
|
2,508.9
|
Investing
Activities
|
|
|
Additions to plant and
equipment, including long-term deposits
|
(2,139.1)
|
(1,847.8)
|
Acquisitions, less cash
acquired
|
(65.1)
|
(9.8)
|
Investment in and
advances to unconsolidated affiliates
|
(1,650.9)
|
(75.9)
|
Proceeds from sale of
assets and investments
|
32.8
|
30.0
|
Purchases of
investments
|
(1,247.9)
|
(1,953.8)
|
Proceeds from
investments
|
2,219.2
|
1,535.2
|
Other investing
activities
|
6.9
|
4.1
|
Cash Used for
Investing Activities
|
(2,844.1)
|
(2,318.0)
|
Financing
Activities
|
|
|
Long-term debt
proceeds
|
357.0
|
160.9
|
Payments on long-term
debt
|
(400.0)
|
(462.8)
|
Net increase in
commercial paper and short-term borrowings
|
255.0
|
38.7
|
Dividends paid to
shareholders
|
(1,023.9)
|
(924.7)
|
Proceeds from stock
option exercises
|
16.3
|
8.1
|
Other financing
activities
|
(16.5)
|
(23.3)
|
Cash Used for
Financing Activities
|
(812.1)
|
(1,203.1)
|
Discontinued
Operations
|
|
|
Cash provided by
operating activities
|
—
|
6.7
|
Cash provided by
investing activities
|
—
|
—
|
Cash provided by
financing activities
|
—
|
—
|
Cash Provided by
Discontinued Operations
|
—
|
6.7
|
Effect of Exchange
Rate Changes on Cash
|
(68.5)
|
44.1
|
Decrease in cash and
cash items
|
(1,511.5)
|
(961.4)
|
Cash and cash items –
Beginning of year
|
4,468.9
|
5,253.0
|
Cash and Cash Items
– End of Period
|
$2,957.4
|
$4,291.6
|
Supplemental Cash
Flow Information
|
|
|
Cash paid for taxes,
net of refunds (continuing operations)
|
$341.3
|
$291.5
|
Air Products and
Chemicals, Inc. and Subsidiaries
SUMMARY BY BUSINESS SEGMENTS
(Unaudited)
|
|
|
|
The segment results presented below reflect the segment
reorganization announced on 4 November
2021. For additional information on the reorganization,
refer to the Company's Current Report on Form 8-K dated
9 December 2021.
(Millions of
dollars)
|
Americas
|
Asia
|
Europe
|
Middle East
and
India
|
Corporate
and other
|
Total
|
|
Three Months Ended
30 June 2022
|
Sales
|
$1,416.3
|
$751.4
|
$739.6
|
$35.4
|
$246.6
|
$3,189.3
|
|
Operating income
(loss)
|
298.9
|
210.6
|
137.4
|
6.9
|
(26.4)
|
627.4
|
(A)
|
Depreciation and
amortization
|
160.5
|
107.6
|
48.9
|
6.8
|
13.4
|
337.2
|
|
Equity affiliates'
income
|
21.4
|
5.7
|
20.6
|
67.2
|
1.2
|
116.1
|
|
Three Months Ended
30 June 2021
|
Sales
|
$1,063.3
|
$751.8
|
$599.4
|
$23.9
|
$166.3
|
$2,604.7
|
|
Operating income
(loss)
|
286.0
|
219.1
|
134.0
|
6.1
|
(68.1)
|
577.1
|
(A)
|
Depreciation and
amortization
|
154.2
|
113.8
|
52.5
|
6.2
|
9.0
|
335.7
|
|
Equity affiliates'
income
|
24.6
|
8.3
|
11.6
|
17.1
|
1.6
|
63.2
|
|
|
|
|
|
|
|
|
|
(Millions of
dollars)
|
Americas
|
Asia
|
Europe
|
Middle East
and
India
|
Corporate
and other
|
Total
|
|
Nine Months Ended 30
June 2022
|
Sales
|
$3,827.0
|
$2,283.0
|
$2,222.4
|
$88.0
|
$708.2
|
$9,128.6
|
|
Operating income
(loss)
|
841.6
|
635.3
|
353.0
|
16.5
|
(134.1)
|
1,712.3
|
(A)
|
Depreciation and
amortization
|
469.5
|
330.2
|
149.0
|
19.8
|
36.9
|
1,005.4
|
|
Equity affiliates'
income
|
75.7
|
18.5
|
57.8
|
230.6
|
2.1
|
384.7
|
|
Nine Months Ended 30
June 2021
|
Sales
|
$3,052.4
|
$2,166.8
|
$1,701.3
|
$69.6
|
$491.8
|
$7,481.9
|
|
Operating income
(loss)
|
775.2
|
632.4
|
404.4
|
16.8
|
(177.7)
|
1,651.1
|
(A)
|
Depreciation and
amortization
|
459.3
|
331.4
|
152.8
|
18.9
|
26.3
|
988.7
|
|
Equity affiliates'
income
|
79.2
|
24.2
|
39.1
|
54.4
|
5.4
|
202.3
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
|
|
|
|
|
|
|
30 June 2022
|
$8,055.2
|
$7,297.5
|
$3,764.2
|
$2,815.3
|
$5,556.8
|
$27,489.0
|
|
30 September
2021
|
7,092.5
|
7,349.4
|
3,830.3
|
800.6
|
7,786.4
|
26,859.2
|
|
(A)
|
Refer to the
Reconciliation to Consolidated Results section
below.
|
|
Reconciliation to
Consolidated Results
|
The table below reconciles total operating income disclosed in
the tables above to consolidated operating income as reflected on
our consolidated income statements:
|
Three Months
Ended
|
Nine Months
Ended
|
|
30 June
|
30 June
|
Operating
Income
|
2022
|
2021
|
2022
|
2021
|
Total
|
$627.4
|
$577.1
|
$1,712.3
|
$1,651.1
|
Facility
closure
|
—
|
—
|
—
|
(23.2)
|
Gain on exchange with
joint venture partner
|
—
|
—
|
—
|
36.8
|
Consolidated
Operating Income
|
$627.4
|
$577.1
|
$1,712.3
|
$1,664.7
|
|
RECONCILIATIONS
OF NON-GAAP FINANCIAL MEASURES
|
|
|
(Millions of dollars
unless otherwise indicated, except for per share data)
|
|
We present certain financial measures, other than in accordance
with U.S. generally accepted accounting principles ("GAAP"), on an
"adjusted" or "non-GAAP" basis. On a consolidated basis, these
measures include adjusted diluted earnings per share ("EPS"),
adjusted EBITDA, adjusted EBITDA margin, adjusted effective tax
rate, and capital expenditures. On a segment basis, these measures
include adjusted EBITDA and adjusted EBITDA margin. In addition to
these measures, we also present certain supplemental non-GAAP
financial measures to help the reader understand the impact that
certain disclosed items, or "non-GAAP adjustments," have on the
calculation of our adjusted diluted EPS. For each non-GAAP
financial measure, we present a reconciliation to the most directly
comparable financial measure calculated in accordance with
GAAP.
Our non-GAAP financial measures are not meant to be considered
in isolation or as a substitute for the most directly comparable
measure calculated in accordance with GAAP. We believe these
non-GAAP financial measures provide investors, potential investors,
securities analysts, and others with useful information to evaluate
the performance of our business because such measures, when viewed
together with financial results computed in accordance with GAAP,
provide a more complete understanding of the factors and trends
affecting our historical financial performance and projected future
results.
In many cases, non-GAAP financial measures are determined by
adjusting the most directly comparable GAAP measure to exclude
non-GAAP adjustments that we believe are not representative of our
underlying business performance. For example, we previously
excluded certain expenses associated with cost reduction actions,
impairment charges, and gains on disclosed transactions. The reader
should be aware that we may recognize similar losses or gains in
the future. Readers should also consider the limitations associated
with these non-GAAP financial measures, including the potential
lack of comparability of these measures from one company to
another.
When applicable, the tax impact of our pre-tax non-GAAP
adjustments reflects the expected current and deferred income tax
impact of our non-GAAP adjustments. These tax impacts are primarily
driven by the statutory tax rate of the various relevant
jurisdictions and the taxability of the adjustments in those
jurisdictions.
NON-GAAP ADJUSTMENTS
There were no non-GAAP adjustments in the third quarter or first
nine months of fiscal year 2022 that impacted diluted earnings per
share or the effective tax rate. For information related to
non-GAAP adjustments for the three and nine months ended
30 June 2021, refer to Exhibit 99.1
to our Current Report on Form 8-K dated 9
August 2021.
ADJUSTED DILUTED EPS
The table below provides a reconciliation to the most directly
comparable GAAP measure for each of the major components used to
calculate adjusted diluted EPS from continuing operations, which we
view as a key performance metric. In periods that we have non-GAAP
adjustments, we believe it is important for the reader to
understand the per share impact of each such adjustment because
management does not consider these impacts when evaluating
underlying business performance. Per share impacts are calculated
independently and may not sum to total diluted EPS and total
adjusted diluted EPS due to rounding.
|
|
|
|
|
|
|
Three Months Ended 30
June
|
Q3 2022 vs. Q3
2021
|
Operating
Income
|
Equity
Affiliates'
Income
|
Income Tax
Provision
|
Net Income
Attributable
to
Air
Products
|
Diluted
EPS
|
Q3 2022 GAAP
|
$627.4
|
$116.1
|
$134.2
|
$582.1
|
$2.62
|
Q3 2021 GAAP
|
577.1
|
63.2
|
101.7
|
525.4
|
2.36
|
Change GAAP
|
|
|
|
|
$0.26
|
% Change
GAAP
|
|
|
|
|
11 %
|
|
|
|
|
|
|
Q3 2022 GAAP
|
$627.4
|
$116.1
|
$134.2
|
$582.1
|
$2.62
|
No non-GAAP
adjustments
|
—
|
—
|
—
|
—
|
—
|
Q3 2022 Non-GAAP
("Adjusted")
|
$627.4
|
$116.1
|
$134.2
|
$582.1
|
$2.62
|
|
|
|
|
|
|
Q3 2021 GAAP
|
$577.1
|
$63.2
|
$101.7
|
$525.4
|
$2.36
|
Tax election benefit
and other
|
—
|
—
|
12.2
|
(12.2)
|
(0.05)
|
Q3 2021 Non-GAAP
("Adjusted")
|
$577.1
|
$63.2
|
$113.9
|
$513.2
|
$2.31
|
Change Non-GAAP
("Adjusted")
|
|
|
|
|
$0.31
|
% Change Non-GAAP
("Adjusted")
|
|
|
|
|
13 %
|
ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN
We define adjusted EBITDA as net income less income (loss) from
discontinued operations, net of tax, and excluding non-GAAP
adjustments, which we do not believe to be indicative of underlying
business trends, before interest expense, other non-operating
income (expense), net, income tax provision, and depreciation and
amortization expense. Adjusted EBITDA and adjusted EBITDA margin
provide useful metrics for management to assess operating
performance. Margins are calculated independently for each period
by dividing each line item by consolidated sales for the respective
period and may not sum to total margin due to rounding.
The tables below present consolidated sales and a reconciliation
of net income on a GAAP basis to adjusted EBITDA and net income
margin on a GAAP basis to adjusted EBITDA margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3
Year-To-Date
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
(''YTD'')
Total
|
2022
|
$
|
Margin
|
|
$
|
Margin
|
|
$
|
Margin
|
|
$
|
Margin
|
|
$
|
Margin
|
Sales
|
$2,994.2
|
|
|
$2,945.1
|
|
|
$3,189.3
|
|
|
|
|
|
$9,128.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income and net
income margin
|
$549.6
|
18.4 %
|
|
$536.8
|
18.2 %
|
|
$587.1
|
18.4 %
|
|
|
|
|
$1,673.5
|
18.3 %
|
Add: Interest
expense
|
30.5
|
1.0 %
|
|
32.3
|
1.1 %
|
|
32.7
|
1.0 %
|
|
|
|
|
95.5
|
1.0 %
|
Less: Other
non-operating income (expense), net
|
22.6
|
0.8 %
|
|
9.1
|
0.3 %
|
|
10.5
|
0.3 %
|
|
|
|
|
42.2
|
0.5 %
|
Add: Income tax
provision
|
113.3
|
3.8 %
|
|
122.7
|
4.2 %
|
|
134.2
|
4.2 %
|
|
|
|
|
370.2
|
4.1 %
|
Add: Depreciation and
amortization
|
332.3
|
11.1 %
|
|
335.9
|
11.4 %
|
|
337.2
|
10.6 %
|
|
|
|
|
1,005.4
|
11.0 %
|
Adjusted EBITDA and
adjusted EBITDA margin
|
$1,003.1
|
33.5 %
|
|
$1,018.6
|
34.6 %
|
|
$1,080.7
|
33.9 %
|
|
|
|
|
$3,102.4
|
34.0 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
Q3 YTD Total
|
2021
|
$
|
Margin
|
|
$
|
Margin
|
|
$
|
Margin
|
|
$
|
Margin
|
|
$
|
Margin
|
Sales
|
$2,375.2
|
|
|
$2,502.0
|
|
|
$2,604.7
|
|
|
$2,841.1
|
|
|
$7,481.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income and net
income margin
|
$486.7
|
20.5 %
|
|
$477.1
|
19.1 %
|
|
$532.3
|
20.4 %
|
|
$618.8
|
21.8 %
|
|
$1,496.1
|
20.0 %
|
Less: Income from
discontinued operations, net of tax
|
10.3
|
0.4 %
|
|
—
|
— %
|
|
8.2
|
0.3 %
|
|
51.8
|
1.8 %
|
|
18.5
|
0.2 %
|
Add: Interest
expense
|
36.7
|
1.5 %
|
|
36.1
|
1.4 %
|
|
35.6
|
1.4 %
|
|
33.4
|
1.2 %
|
|
108.4
|
1.4 %
|
Less: Other
non-operating income (expense), net
|
18.6
|
0.8 %
|
|
16.8
|
0.7 %
|
|
21.1
|
0.8 %
|
|
17.2
|
0.6 %
|
|
56.5
|
0.8 %
|
Add: Income tax
provision
|
113.9
|
4.8 %
|
|
121.9
|
4.9 %
|
|
101.7
|
3.9 %
|
|
125.3
|
4.4 %
|
|
337.5
|
4.5 %
|
Add: Depreciation and
amortization
|
323.7
|
13.6 %
|
|
329.3
|
13.2 %
|
|
335.7
|
12.9 %
|
|
332.6
|
11.7 %
|
|
988.7
|
13.2 %
|
Add: Facility
closure
|
—
|
— %
|
|
23.2
|
0.9 %
|
|
—
|
— %
|
|
—
|
— %
|
|
23.2
|
0.3 %
|
Less: Gain on exchange
with joint venture partner
|
—
|
— %
|
|
36.8
|
1.5 %
|
|
—
|
— %
|
|
—
|
— %
|
|
36.8
|
0.5 %
|
Adjusted EBITDA and
adjusted EBITDA margin
|
$932.1
|
39.2 %
|
|
$934.0
|
37.3 %
|
|
$976.0
|
37.5 %
|
|
$1,041.1
|
36.6 %
|
|
$2,842.1
|
38.0 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2022 vs.
2021
|
Q1
|
|
Q2
|
|
Q3
|
|
|
|
Q3 YTD Total
|
Change
GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income $
change
|
$62.9
|
|
$59.7
|
|
$54.8
|
|
|
|
$177.4
|
Net income %
change
|
13 %
|
|
13 %
|
|
10 %
|
|
|
|
12 %
|
Net income margin
change
|
(210) bp
|
|
(90) bp
|
|
(200) bp
|
|
|
|
(170) bp
|
Change
Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA $
change
|
$71.0
|
|
$84.6
|
|
$104.7
|
|
|
|
$260.3
|
Adjusted EBITDA %
change
|
8 %
|
|
9 %
|
|
11 %
|
|
|
|
9 %
|
Adjusted EBITDA margin
change
|
(570) bp
|
|
(270) bp
|
|
(360) bp
|
|
|
|
(400) bp
|
The tables below present sales and a reconciliation of operating
income and operating margin to adjusted EBITDA and adjusted EBITDA
margin for the Company's three largest regional segments and a
reconciliation of operating loss to adjusted EBITDA for the
Corporate and other segment for the three months ended 30 June 2022 and 2021:
Americas
|
Q3 FY22
|
Q3 FY21
|
|
$ Change
|
Change
|
Sales
|
$1,416.3
|
$1,063.3
|
|
$353.0
|
33 %
|
|
|
|
|
|
|
Operating
income
|
$298.9
|
$286.0
|
|
$12.9
|
5 %
|
Operating
margin
|
21.1 %
|
26.9 %
|
|
|
(580) bp
|
|
|
|
|
|
|
Reconciliation of GAAP
to Non-GAAP:
|
|
|
|
|
|
Operating
income
|
$298.9
|
$286.0
|
|
|
|
Add: Depreciation and
amortization
|
160.5
|
154.2
|
|
|
|
Add: Equity affiliates'
income
|
21.4
|
24.6
|
|
|
|
Adjusted
EBITDA
|
$480.8
|
$464.8
|
|
$16.0
|
3 %
|
Adjusted EBITDA
margin
|
33.9 %
|
43.7 %
|
|
|
(980) bp
|
Asia
|
Q3 FY22
|
Q3 FY21
|
|
$ Change
|
Change
|
Sales
|
$751.4
|
$751.8
|
|
($0.4)
|
— %
|
|
|
|
|
|
|
Operating
income
|
$210.6
|
$219.1
|
|
($8.5)
|
(4 %)
|
Operating
margin
|
28.0 %
|
29.1 %
|
|
|
(110) bp
|
|
|
|
|
|
|
Reconciliation of GAAP
to Non-GAAP:
|
|
|
|
|
|
Operating
income
|
$210.6
|
$219.1
|
|
|
|
Add: Depreciation and
amortization
|
107.6
|
113.8
|
|
|
|
Add: Equity affiliates'
income
|
5.7
|
8.3
|
|
|
|
Adjusted
EBITDA
|
$323.9
|
$341.2
|
|
($17.3)
|
(5 %)
|
Adjusted EBITDA
margin
|
43.1 %
|
45.4 %
|
|
|
(230) bp
|
Europe
|
Q3 FY22
|
Q3 FY21
|
|
$ Change
|
Change
|
Sales
|
$739.6
|
$599.4
|
|
$140.2
|
23 %
|
|
|
|
|
|
|
Operating
income
|
$137.4
|
$134.0
|
|
$3.4
|
3 %
|
Operating
margin
|
18.6 %
|
22.4 %
|
|
|
(380) bp
|
|
|
|
|
|
|
Reconciliation of GAAP
to Non-GAAP:
|
|
|
|
|
|
Operating
income
|
$137.4
|
$134.0
|
|
|
|
Add: Depreciation and
amortization
|
48.9
|
52.5
|
|
|
|
Add: Equity affiliates'
income
|
20.6
|
11.6
|
|
|
|
Adjusted
EBITDA
|
$206.9
|
$198.1
|
|
$8.8
|
4 %
|
Adjusted EBITDA
margin
|
28.0 %
|
33.0 %
|
|
|
(500) bp
|
Corporate and
other
|
Q3 FY22
|
Q3 FY21
|
|
$ Change
|
Change
|
Sales
|
$246.6
|
$166.3
|
|
$80.3
|
48 %
|
|
|
|
|
|
|
Operating
loss
|
($26.4)
|
($68.1)
|
|
$41.7
|
61 %
|
|
|
|
|
|
|
Reconciliation of GAAP
to Non-GAAP:
|
|
|
|
|
|
Operating
loss
|
($26.4)
|
($68.1)
|
|
|
|
Add: Depreciation and
amortization
|
13.4
|
9.0
|
|
|
|
Add: Equity affiliates'
income
|
1.2
|
1.6
|
|
|
|
Adjusted
EBITDA
|
($11.8)
|
($57.5)
|
|
$45.7
|
79 %
|
ADJUSTED EFFECTIVE TAX RATE
The effective tax rate equals the income tax provision divided
by income from continuing operations before taxes.
|
Three Months
Ended
30 June
|
|
2022
|
2021
|
Income tax
provision
|
$134.2
|
$101.7
|
Income from continuing
operations before taxes
|
721.3
|
625.8
|
Effective tax
rate
|
18.6 %
|
16.3 %
|
|
|
|
Income tax
provision
|
$134.2
|
$101.7
|
Tax election benefit
and other
|
—
|
12.2
|
Adjusted income tax
provision
|
$134.2
|
$113.9
|
|
|
|
Income from continuing
operations before taxes
|
$721.3
|
$625.8
|
No impact from
non-GAAP adjustments
|
—
|
—
|
Adjusted income from
continuing operations before taxes
|
$721.3
|
$625.8
|
|
|
|
Adjusted effective tax
rate
|
18.6 %
|
18.2 %
|
CAPITAL EXPENDITURES
We define capital expenditures as cash flows for additions to
plant and equipment, including long-term deposits, acquisitions
(less cash acquired), and investment in and advances to
unconsolidated affiliates. A reconciliation of cash used for
investing activities to our reported capital expenditures is
provided below:
|
Nine Months
Ended
|
|
30 June
|
|
2022
|
2021
|
Cash used for investing
activities
|
$2,844.1
|
$2,318.0
|
Proceeds from sale of
assets and investments
|
32.8
|
30.0
|
Purchases of
investments
|
(1,247.9)
|
(1,953.8)
|
Proceeds from
investments
|
2,219.2
|
1,535.2
|
Other investing
activities
|
6.9
|
4.1
|
Capital
expenditures
|
$3,855.1
|
$1,933.5
|
The components of our capital expenditures are detailed in the
table below:
|
Nine Months
Ended
|
|
30 June
|
|
2022
|
2021
|
Additions to plant and
equipment, including long-term deposits
|
$2,139.1
|
$1,847.8
|
Acquisitions, less cash
acquired
|
65.1
|
9.8
|
Investment in and
advances to unconsolidated affiliates(A)
|
1,650.9
|
75.9
|
Capital
expenditures
|
$3,855.1
|
$1,933.5
|
(A)
|
Investment in and
advances to unconsolidated affiliates of $1.7 billion for the nine
months ended 30 June 2022 includes approximately $130 from a
non-controlling partner in one of our subsidiaries for the initial
investment in the Jazan gasification and power project completed in
the first quarter.
|
We expect capital expenditures for fiscal year 2022 to be over
$4.5 billion.
It is not possible, without unreasonable efforts, to reconcile
our forecasted capital expenditures to future cash used for
investing activities because we are unable to identify the timing
or occurrence of our future investment activity, which is driven by
our assessment of competing opportunities at the time we enter into
transactions. These decisions, either individually or in the
aggregate, could have a significant effect on our cash used for
investing activities.
OUTLOOK
The guidance provided below is on an adjusted continuing
operations basis and is compared to adjusted historical diluted EPS
attributable to Air Products. These adjusted measures exclude the
impact of certain items that we believe are not representative of
our underlying business performance, such as the incurrence of
additional costs for cost reduction actions and impairment charges,
or the recognition of gains or losses on disclosed items. It is not
possible, without unreasonable efforts, to identify the timing or
occurrence of these events or the potential for other transactions
that may impact future GAAP EPS. Furthermore, it is not possible to
identify the potential significance of these events in advance, but
any of these events, if they were to occur, could have a
significant effect on our future GAAP EPS. Accordingly, management
is unable to reconcile, without unreasonable efforts, the Company's
forecasted range of adjusted EPS on a continuing operations basis
to a comparable GAAP range. The per share impact for each non-GAAP
adjustment was calculated independently and may not sum to total
adjusted diluted EPS due to rounding.
|
|
|
|
|
|
|
Diluted
EPS
|
|
|
Q4
|
|
Full Year
|
2021 Diluted
EPS
|
|
$2.51
|
|
$9.12
|
Facility
closure
|
|
—
|
|
0.08
|
Gain on exchange with
joint venture partner
|
|
—
|
|
(0.12)
|
Tax election benefit
and other
|
|
—
|
|
(0.05)
|
2021 Adjusted Diluted
EPS
|
|
$2.51
|
|
$9.02
|
2022 Adjusted Diluted
EPS Outlook
|
|
$2.68–$2.88
|
|
$10.20–$10.40
|
$ Change
|
|
0.17–0.37
|
|
1.18–1.38
|
% Change
|
|
7%–15%
|
|
13%–15%
|
View original
content:https://www.prnewswire.com/news-releases/air-products-reports-fiscal-2022-third-quarter-gaap-eps-and-adjusted-eps-of-2-62--301599815.html
SOURCE Air Products