LEHIGH VALLEY, Pa.,
Nov. 7, 2019 /PRNewswire/ --
Fiscal 2019 (comparisons versus prior year):
- GAAP EPS** of $7.94, up 20
percent; GAAP net income of $1,809
million, up 18 percent; and GAAP net income margin of 20.3
percent, up 310 basis points
- Adjusted EPS* of $8.21, up 10
percent; adjusted EBITDA margin* of 38.9 percent, up 400 basis
points
Q4 FY19 (comparisons versus prior year):
- GAAP EPS** of $2.27, up 11
percent; GAAP net income of $519
million, up 13 percent; and GAAP net income margin of 22.7
percent, up 270 basis points
- Adjusted EPS* of $2.27, up 14
percent; adjusted EBITDA margin* of 41.9 percent, up 610 basis
points
Fiscal 2019 Highlights
- 37th consecutive year of dividend increase
- Continued to execute gasification strategy:
-
- Confirmed final negotiations to form $11.5 billion joint venture to acquire the
gasification/power/industrial gas assets at Jazan Economic City,
Saudi Arabia
- Closed on GE gasification technology acquisition
- Announced new China
gasification project with Debang
- Continued to win and successfully execute base business
projects around the world
Guidance
- Fiscal 2020 full-year adjusted EPS guidance of $9.35 to $9.60 per
share*, up 14 to 17 percent over prior year adjusted EPS*,
including the expected contribution from the Jazan gas and power
project; fiscal 2020 first quarter adjusted EPS guidance of
$2.05 to $2.10 per share*, up 10 to 13 percent over fiscal
2019 first quarter adjusted EPS*
- Expected fiscal year 2020 capital expenditures* of
approximately $4 billion to
$4.5 billion, including the expected
spending for the Jazan gas and power project
*The identified results and guidance in this release,
including in the highlights above, include references to non-GAAP
financial measures. Additional information regarding these measures
and a reconciliation 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 from investing activities if they were to
occur.
**Earnings per share is from continuing operations and
attributable to Air Products.
Air Products (NYSE: APD) today reported fiscal year 2019
results, including GAAP diluted EPS from continuing operations of
$7.94, up 20 percent; GAAP net income
of $1,809 million, up 18 percent,
primarily driven by higher pricing, volumes and tax reform impacts;
and GAAP net income margin of 20.3 percent, up 310 basis points,
each versus prior year.
For the year, on a non-GAAP basis, adjusted diluted EPS from
continuing operations of $8.21, up 10
percent; adjusted EBITDA of $3.5
billion, up 11 percent, primarily driven by the higher
pricing and volumes; and adjusted EBITDA margin of 38.9 percent, up
400 basis points, each versus prior year.
Full-year sales of $8.9 billion
were flat versus last year on two percent volume growth and three
percent higher pricing, offset three percent by unfavorable
currency and two percent from a contract modification to a tolling
agreement in India, which impacts
sales but not profits. Volume growth was primarily driven by new
plants and supported by positive base volume, partially offset by
lower activity from the Jazan ASU sale of equipment project as it
nears completion, which reduced overall volume growth by two
percent.
Fiscal Fourth Quarter Results (Q4FY19)
Air Products reported, for its fiscal fourth quarter ended
September 30, 2019, GAAP diluted EPS
from continuing operations of $2.27,
up 11 percent; GAAP net income of $519
million, up 13 percent, primarily driven by higher pricing,
volumes, and prior-year tax reform and pension settlement impacts;
and GAAP net income margin of 22.7 percent, up 270 basis points,
each versus prior year.
For the fiscal fourth quarter, on a non-GAAP basis, adjusted
diluted EPS from continuing operations of $2.27, up 14 percent; adjusted EBITDA of
$957 million, up 16 percent,
primarily driven by positive volume and pricing; and adjusted
EBITDA margin of 41.9 percent, up 610 basis points, each
versus prior year.
Fourth quarter sales of $2.3
billion decreased one percent, as five percent higher
volumes and three percent higher pricing were more than offset by
four percent lower energy cost pass-through, three percent from the
India contract modification
referenced above, and two percent unfavorable currency. Volume
growth was driven primarily by new plants, base business growth and
a short-term contract in Asia,
which was partially offset by lower activity from the Jazan sale of
equipment project, which reduced overall volume growth by two
percent.
Commenting on the results, Seifi
Ghasemi, chairman, president and chief executive officer,
said, "Our people have stayed focused on serving our customers and
creating value for our shareholders, every day, and I want to thank
them for their hard work, commitment and dedication. We are
pursuing our strategic Five-Point Plan, including a focus on
sustainability that is driving significant global growth
opportunities in gasification, carbon capture, and hydrogen for
mobility. We are generating significant cash, and also have the
technical and operational strength, to execute on our base business
while continuing to deploy capital into industrial gas megaprojects
around the world."
Fiscal Fourth Quarter Results by Business
Segment (comparisons versus prior year)
- Industrial Gases - Americas sales of $937 million decreased five percent, as three
percent higher pricing was more than offset by five percent lower
energy pass-through, two percent lower volumes, and one percent
unfavorable currency. Operating income of $261 million increased four percent, primarily
driven by higher pricing, and operating margin of 27.8 percent
increased 230 basis points. Adjusted EBITDA of $412 million increased three percent, primarily
driven by higher pricing, and adjusted EBITDA margin of 43.9
percent increased 350 basis points.
- Industrial Gases - EMEA sales of $489 million decreased 12 percent. Volumes
increased five percent and higher pricing contributed four percent.
These results were more than offset by five percent lower energy
pass-through, four percent unfavorable currency, and a 12 percent
decrease from the India contract
modification. Operating income of $121
million increased 14 percent, primarily driven by higher
pricing, and operating margin of 24.7 percent increased 560 basis
points; the India contract
modification and lower energy pass-through improved operating
margin by approximately 350 basis points. Adjusted EBITDA of
$193 million increased 11 percent,
primarily driven by higher pricing. Adjusted EBITDA margin of 39.5
percent increased 810 basis points; the India contract modification and lower energy
pass-through improved adjusted EBITDA margin by approximately 600
basis points.
- Industrial Gases - Asia
sales of $732 million increased 16
percent. Volumes increased 16 percent, driven primarily by new
plants, including the Lu'An gasification project, a short-term
contract and base business growth. Pricing increased three percent,
while currency had a negative three percent impact. Operating
income of $231 million increased 28
percent on improved volumes, pricing and productivity, and
operating margin of 31.6 percent increased 310 basis points.
Adjusted EBITDA of $354 million
increased 31 percent on improved volumes, pricing and productivity,
and adjusted EBITDA margin of 48.3 percent increased 550 basis
points.
Outlook
Ghasemi said, "Air Products cannot control the economic and
geopolitical uncertainty in the world. But we do have control over
the actions we take to remain profitable and adapt to the
constantly changing world. Our strong, capable and flexible team is
focused on delivering productivity and creating our own growth
opportunities through gasification, carbon capture, hydrogen for
mobility and other projects driven by the world's need for cleaner
energy and high-value products. A great example is the
broader-scope joint venture at Jazan, a world-class project with
world-class partners. We remain committed to continue growing
adjusted earnings per share by more than 10 percent per year over
the long term."
Air Products' full-year fiscal 2020 adjusted EPS guidance is
$9.35 to $9.60 per share, up 14 to 17 percent over prior
year adjusted EPS, including the expected contribution from
the Jazan gas and power project. For the fiscal 2020 first quarter,
Air Products' adjusted EPS guidance is $2.05 to $2.10 per
share, up 10 to 13 percent over the fiscal 2019 first quarter
adjusted EPS.
Air Products expects capital expenditures of approximately
$4 billion to $4.5 billion for full-year fiscal 2020, including
the expected spending for the Jazan gas and power project.
Effective October 1, 2018, Air
Products adopted the new revenue recognition standard, which had no
material impact on the company's financial statements.
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 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. 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. Management therefore is unable to
reconcile, without unreasonable effort, the Company's forecasted
range of adjusted EPS and effective tax rate to a comparable GAAP
range.
Earnings Teleconference
Access the Q4 earnings teleconference scheduled for
10:00 a.m. Eastern Time on
November 7, 2019 by calling
323-794-2598 and entering passcode 2097101, or access the Event
Details page on Air Products' Investor Relations web site.
About Air Products
Air Products (NYSE:APD) is a world-leading industrial gases
company in operation for nearly 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,
chemical, 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.
The Company had fiscal 2019 sales of $8.9
billion from operations in 50 countries and has a current
market capitalization of about $50
billion. Approximately 16,000 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.
NOTE: This release contains "forward-looking statements"
within the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, including statements about earnings
guidance, business outlook and investment opportunities. These
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: changes in global or
regional economic conditions, supply and demand dynamics in market
segments we serve, or in the financial markets; 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 or customer cancellations or postponement of projects
and sales; future financial and operating performance of major
customers and joint venture partners; our ability to develop,
implement, and operate new technologies, or to execute the projects
in our backlog; our ability to develop and operate large scale and
technically complex projects, including gasification 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 affecting our business and related compliance
requirements, including regulations related to 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, acts of war, or terrorism; the
impact 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 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
raw materials; the success of productivity and operational
improvement programs; and other risk factors described in the
Company's Form 10-K for its fiscal year ended September 30, 2018. Except as required by law,
the Company disclaims any obligation or undertaking to update or
revise any forward-looking statements contained herein to reflect
any change in the 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
|
Twelve Months
Ended
|
|
30
September
|
30
September
|
(Millions of dollars,
except for share and per share data)
|
2019
|
2018
|
2019
|
2018
|
Sales
|
$2,283.2
|
|
$2,298.9
|
|
$8,918.9
|
|
$8,930.2
|
|
Cost of
sales
|
1,490.8
|
|
1,565.8
|
|
5,975.5
|
|
6,189.5
|
|
Facility
closure
|
—
|
|
—
|
|
29.0
|
|
—
|
|
Selling and
administrative
|
181.9
|
|
186.0
|
|
750.0
|
|
760.8
|
|
Research and
development
|
22.9
|
|
20.4
|
|
72.9
|
|
64.5
|
|
Cost reduction
actions
|
—
|
|
—
|
|
25.5
|
|
—
|
|
Gain on exchange of
equity affiliate investments
|
—
|
|
—
|
|
29.1
|
|
—
|
|
Other income
(expense), net
|
15.6
|
|
7.0
|
|
49.3
|
|
50.2
|
|
Operating
Income
|
603.2
|
|
533.7
|
|
2,144.4
|
|
1,965.6
|
|
Equity affiliates'
income
|
59.9
|
|
59.2
|
|
215.4
|
|
174.8
|
|
Interest
expense
|
30.1
|
|
35.4
|
|
137.0
|
|
130.5
|
|
Other non-operating
income (expense), net
|
16.9
|
|
(28.6)
|
|
66.7
|
|
5.1
|
|
Income From
Continuing Operations Before Taxes
|
649.9
|
|
528.9
|
|
2,289.5
|
|
2,015.0
|
|
Income tax
provision
|
131.2
|
|
69.2
|
|
480.1
|
|
524.3
|
|
Income From
Continuing Operations
|
518.7
|
|
459.7
|
|
1,809.4
|
|
1,490.7
|
|
Income from
discontinued operations, net of tax
|
—
|
|
—
|
|
—
|
|
42.2
|
|
Net
Income
|
518.7
|
|
459.7
|
|
1,809.4
|
|
1,532.9
|
|
Net income
attributable to noncontrolling interests of continuing
operations
|
15.5
|
|
6.8
|
|
49.4
|
|
35.1
|
|
Net Income
Attributable to Air Products
|
$503.2
|
|
$452.9
|
|
$1,760.0
|
|
$1,497.8
|
|
Net Income
Attributable to Air Products
|
|
|
|
|
Net income from
continuing operations
|
$503.2
|
|
$452.9
|
|
$1,760.0
|
|
$1,455.6
|
|
Net income from
discontinued operations
|
—
|
|
—
|
|
—
|
|
42.2
|
|
Net Income
Attributable to Air Products
|
$503.2
|
|
$452.9
|
|
$1,760.0
|
|
$1,497.8
|
|
Basic Earnings Per
Common Share Attributable to Air Products
|
|
|
|
|
Basic earnings per
share from continuing operations
|
$2.28
|
|
$2.06
|
|
$7.99
|
|
$6.64
|
|
Basic earnings per
share from discontinued operations
|
—
|
|
—
|
|
—
|
|
.19
|
|
Basic Earnings Per
Common Share Attributable to Air Products
|
$2.28
|
|
$2.06
|
|
$7.99
|
|
$6.83
|
|
Diluted Earnings
Per Common Share Attributable to Air Products
|
|
|
|
|
Diluted earnings per
share from continuing operations
|
$2.27
|
|
$2.05
|
|
$7.94
|
|
$6.59
|
|
Diluted earnings per
share from discontinued operations
|
—
|
|
—
|
|
—
|
|
.19
|
|
Diluted Earnings
Per Common Share Attributable to Air Products
|
$2.27
|
|
$2.05
|
|
$7.94
|
|
$6.78
|
|
Weighted Average
Common Shares – Basic (in millions)
|
220.7
|
|
219.6
|
|
220.3
|
|
219.3
|
|
Weighted Average
Common Shares – Diluted (in millions)
|
222.1
|
|
220.9
|
|
221.6
|
|
220.8
|
|
AIR PRODUCTS AND
CHEMICALS, INC. and Subsidiaries
|
CONSOLIDATED
BALANCE SHEETS
|
(Unaudited)
|
|
|
30
September
|
30
September
|
(Millions of
dollars)
|
2019
|
2018
|
Assets
|
|
|
Current
Assets
|
|
|
Cash and cash
items
|
$2,248.7
|
|
$2,791.3
|
|
Short-term
investments
|
166.0
|
|
184.7
|
|
Trade receivables,
net
|
1,260.2
|
|
1,207.2
|
|
Inventories
|
388.3
|
|
396.1
|
|
Prepaid
expenses
|
77.4
|
|
129.6
|
|
Other receivables and
current assets
|
477.7
|
|
373.3
|
|
Total Current
Assets
|
4,618.3
|
|
5,082.2
|
|
Investment in net
assets of and advances to equity affiliates
|
1,276.2
|
|
1,277.2
|
|
Plant and equipment,
at cost
|
22,333.7
|
|
21,490.2
|
|
Less: accumulated
depreciation
|
11,996.1
|
|
11,566.5
|
|
Plant and equipment,
net
|
10,337.6
|
|
9,923.7
|
|
Goodwill,
net
|
797.1
|
|
788.9
|
|
Intangible assets,
net
|
419.5
|
|
438.5
|
|
Noncurrent capital
lease receivables
|
890.0
|
|
1,013.3
|
|
Other noncurrent
assets
|
604.1
|
|
654.5
|
|
Total Noncurrent
Assets
|
14,324.5
|
|
14,096.1
|
|
Total
Assets
|
$18,942.8
|
|
$19,178.3
|
|
Liabilities and
Equity
|
|
|
Current
Liabilities
|
|
|
Payables and accrued
liabilities
|
$1,635.7
|
|
$1,817.8
|
|
Accrued income
taxes
|
86.6
|
|
59.6
|
|
Short-term
borrowings
|
58.2
|
|
54.3
|
|
Current portion of
long-term debt
|
40.4
|
|
406.6
|
|
Total Current
Liabilities
|
1,820.9
|
|
2,338.3
|
|
Long-term
debt
|
2,907.3
|
|
2,967.4
|
|
Long-term debt –
related party
|
320.1
|
|
384.3
|
|
Other noncurrent
liabilities
|
1,712.4
|
|
1,536.9
|
|
Deferred income
taxes
|
793.8
|
|
775.1
|
|
Total Noncurrent
Liabilities
|
5,733.6
|
|
5,663.7
|
|
Total
Liabilities
|
7,554.5
|
|
8,002.0
|
|
Air Products
Shareholders' Equity
|
11,053.6
|
|
10,857.5
|
|
Noncontrolling
Interests
|
334.7
|
|
318.8
|
|
Total
Equity
|
11,388.3
|
|
11,176.3
|
|
Total Liabilities
and Equity
|
$18,942.8
|
|
$19,178.3
|
|
AIR PRODUCTS
AND CHEMICALS, INC. and Subsidiaries
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
|
|
Twelve Months
Ended
|
|
30
September
|
(Millions of
dollars)
|
2019
|
2018
|
Operating
Activities
|
|
|
Net income
|
$1,809.4
|
|
$1,532.9
|
|
Less: Net income
attributable to noncontrolling interests of continuing
operations
|
49.4
|
|
35.1
|
|
Net income
attributable to Air Products
|
1,760.0
|
|
1,497.8
|
|
Income from
discontinued operations
|
—
|
|
(42.2)
|
|
Income from
continuing operations attributable to Air Products
|
1,760.0
|
|
1,455.6
|
|
Adjustments to
reconcile income to cash provided by operating
activities:
|
|
|
Depreciation and
amortization
|
1,082.8
|
|
970.7
|
|
Deferred income
taxes
|
57.6
|
|
(55.4)
|
|
Tax reform
repatriation
|
49.4
|
|
240.6
|
|
Facility
closure
|
29.0
|
|
—
|
|
Undistributed
earnings of unconsolidated affiliates
|
(75.8)
|
|
(59.8)
|
|
Gain on sale of
assets and investments
|
(24.2)
|
|
(6.9)
|
|
Share-based
compensation
|
41.2
|
|
38.8
|
|
Noncurrent capital
lease receivables
|
94.6
|
|
97.4
|
|
Other
adjustments
|
(19.4)
|
|
131.6
|
|
Working capital
changes that provided (used) cash, excluding effects of
acquisitions:
|
|
|
Trade
receivables
|
(69.0)
|
|
(42.8)
|
|
Inventories
|
(3.0)
|
|
(64.2)
|
|
Other
receivables
|
79.8
|
|
128.3
|
|
Payables and accrued
liabilities
|
(41.8)
|
|
(277.7)
|
|
Other working
capital
|
8.7
|
|
(9.0)
|
|
Cash Provided by
Operating Activities
|
2,969.9
|
|
2,547.2
|
|
Investing
Activities
|
|
|
Additions to plant
and equipment
|
(1,989.7)
|
|
(1,568.4)
|
|
Acquisitions, less
cash acquired
|
(123.2)
|
|
(345.4)
|
|
Investment in and
advances to unconsolidated affiliates
|
(15.7)
|
|
—
|
|
Proceeds from sale of
assets and investments
|
11.1
|
|
48.8
|
|
Purchases of
investments
|
(172.1)
|
|
(530.3)
|
|
Proceeds from
investments
|
190.5
|
|
748.2
|
|
Other investing
activities
|
(14.3)
|
|
5.5
|
|
Cash Used for
Investing Activities
|
(2,113.4)
|
|
(1,641.6)
|
|
Financing
Activities
|
|
|
Long-term debt
proceeds
|
—
|
|
.5
|
|
Payments on long-term
debt
|
(428.6)
|
|
(418.7)
|
|
Net increase
(decrease) in commercial paper and short-term borrowings
|
3.9
|
|
(78.5)
|
|
Dividends paid to
shareholders
|
(994.0)
|
|
(897.8)
|
|
Proceeds from stock
option exercises
|
68.1
|
|
76.2
|
|
Other financing
activities
|
(19.9)
|
|
(41.5)
|
|
Cash Used for
Financing Activities
|
(1,370.5)
|
|
(1,359.8)
|
|
Discontinued
Operations
|
|
|
Cash used for
operating activities
|
—
|
|
(12.8)
|
|
Cash provided by
investing activities
|
—
|
|
18.6
|
|
Cash provided by
financing activities
|
—
|
|
—
|
|
Cash Provided by
Discontinued Operations
|
—
|
|
5.8
|
|
Effect of Exchange
Rate Changes on Cash
|
(28.6)
|
|
(33.9)
|
|
Decrease in Cash and
Cash Items
|
(542.6)
|
|
(482.3)
|
|
Cash and Cash items -
Beginning of Year
|
2,791.3
|
|
3,273.6
|
|
Cash and Cash
items - End of Period
|
$2,248.7
|
|
$2,791.3
|
|
Supplemental Cash
Flow Information
|
|
|
Cash paid for taxes
(net of refunds) - Continuing operations
|
$323.6
|
|
$364.6
|
|
AIR PRODUCTS AND
CHEMICALS, INC. and Subsidiaries
|
SUMMARY BY
BUSINESS SEGMENTS
|
(Unaudited)
|
|
(Millions of
dollars)
|
Industrial
Gases –
Americas
|
Industrial
Gases –
EMEA
|
Industrial
Gases –
Asia
|
Industrial
Gases –
Global
|
Corporate
and other
|
Total
|
Three Months Ended
30 September 2019
|
|
|
|
|
|
|
Sales
|
$937.3
|
|
$489.3
|
|
$732.0
|
|
$81.1
|
|
$43.5
|
|
$2,283.2
|
|
Operating income
(loss)
|
260.7
|
|
120.9
|
|
231.3
|
|
6.2
|
|
(15.9)
|
|
603.2
|
|
Depreciation and
amortization
|
128.4
|
|
49.1
|
|
108.8
|
|
2.3
|
|
5.0
|
|
293.6
|
|
Equity affiliates'
income
|
22.7
|
|
23.2
|
|
13.5
|
|
.5
|
|
—
|
|
59.9
|
|
Three Months Ended
30 September 2018
|
|
|
|
|
|
|
Sales
|
$987.1
|
|
$554.7
|
|
$633.0
|
|
$100.3
|
|
$23.8
|
|
$2,298.9
|
|
Operating income
(loss)
|
251.3
|
|
105.8
|
|
180.2
|
|
12.5
|
|
(40.2)
|
|
509.6
|
|
Depreciation and
amortization
|
124.7
|
|
49.0
|
|
76.9
|
|
2.3
|
|
4.3
|
|
257.2
|
|
Equity affiliates'
income (loss)
|
22.4
|
|
19.4
|
|
13.6
|
|
(.2)
|
|
—
|
|
55.2
|
|
|
|
|
|
|
|
|
|
Industrial
Gases –
Americas
|
Industrial
Gases –
EMEA
|
Industrial
Gases –
Asia
|
Industrial
Gases –
Global
|
Corporate
and other
|
Total
|
Twelve Months
Ended 30 September 2019
|
|
|
|
|
|
|
Sales
|
$3,873.5
|
|
$2,002.5
|
|
$2,663.6
|
|
$261.0
|
|
$118.3
|
|
$8,918.9
|
|
Operating income
(loss)
|
997.7
|
|
472.4
|
|
864.2
|
|
(11.7)
|
|
(152.8)
|
|
2,169.8
|
|
Depreciation and
amortization
|
505.2
|
|
189.5
|
|
361.5
|
|
8.6
|
|
18.0
|
|
1,082.8
|
|
Equity affiliates'
income
|
84.8
|
|
69.0
|
|
58.4
|
|
3.2
|
|
—
|
|
215.4
|
|
Twelve Months
Ended 30 September 2018
|
|
|
|
|
|
|
Sales
|
$3,758.8
|
|
$2,193.3
|
|
$2,458.0
|
|
$436.1
|
|
$84.0
|
|
$8,930.2
|
|
Operating income
(loss)
|
927.9
|
|
445.8
|
|
689.9
|
|
53.9
|
|
(176.0)
|
|
1,941.5
|
|
Depreciation and
amortization
|
485.3
|
|
198.6
|
|
265.8
|
|
8.1
|
|
12.9
|
|
970.7
|
|
Equity affiliates'
income
|
82.0
|
|
61.1
|
|
58.3
|
|
1.9
|
|
—
|
|
203.3
|
|
Total
Assets
|
|
|
|
|
|
|
30 September
2019
|
$5,832.2
|
|
$3,250.8
|
|
$6,240.6
|
|
$325.7
|
|
$3,293.5
|
|
$18,942.8
|
|
30 September
2018
|
5,904.0
|
|
3,280.4
|
|
5,899.5
|
|
240.1
|
|
3,854.3
|
|
19,178.3
|
|
Below is a reconciliation to operating income as reflected on
our consolidated income statements:
|
Three Months
Ended
|
Twelve Months
Ended
|
|
30
September
|
30
September
|
Operating
Income
|
2019
|
2018
|
2019
|
2018
|
Total
|
$603.2
|
|
$509.6
|
|
$2,169.8
|
|
$1,941.5
|
|
Change in inventory
valuation method
|
—
|
|
24.1
|
|
—
|
|
24.1
|
|
Facility
closure
|
—
|
|
—
|
|
(29.0)
|
|
—
|
|
Cost reduction
actions
|
—
|
|
—
|
|
(25.5)
|
|
—
|
|
Gain on exchange of
equity affiliate investments
|
—
|
|
—
|
|
29.1
|
|
—
|
|
Consolidated
Operating Income
|
$603.2
|
|
$533.7
|
|
$2,144.4
|
|
$1,965.6
|
|
Below is a reconciliation to equity affiliates' income as
reflected on our consolidated income statements:
|
Three Months
Ended
|
Twelve Months
Ended
|
|
30
September
|
30
September
|
Equity Affiliates'
Income
|
2019
|
2018
|
2019
|
2018
|
Total
|
$59.9
|
|
$55.2
|
|
$215.4
|
|
$203.3
|
|
Tax reform
repatriation - equity method investment
|
—
|
|
4.0
|
|
—
|
|
(28.5)
|
|
Consolidated
Equity Affiliates' Income
|
$59.9
|
|
$59.2
|
|
$215.4
|
|
$174.8
|
|
RECONCILIATIONS OF NON-GAAP FINANCIAL
MEASURES
(Millions of dollars unless otherwise indicated,
except for per share data)
The Company presents certain financial measures on a non-GAAP
("adjusted") basis. On a consolidated basis, these measures include
adjusted diluted earnings per share ("EPS"), adjusted EBITDA, and
adjusted EBITDA margin. On a segment basis, these measures include
adjusted EBITDA and adjusted EBITDA margin. In addition to these
measures, which are presented above, we also include certain
supplemental non-GAAP financial measures that are presented below
to help the reader understand the impact that our non-GAAP
adjustments have on the calculation of our adjusted diluted EPS.
For each non-GAAP financial measure, we present below a
reconciliation to the most directly comparable financial measure
calculated in accordance with U.S. Generally Accepted Accounting
Principles (GAAP).
The Company's non-GAAP measures are not meant to be considered
in isolation or as a substitute for the most directly comparable
measure calculated in accordance with GAAP. The Company believes
these non-GAAP measures provide investors, potential investors,
securities analysts, and others with useful information to evaluate
the performance of the 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 the Company's historical financial performance and
projected future results.
In many cases, non-GAAP measures are determined by adjusting the
most directly comparable GAAP measure to exclude certain disclosed
items, or "non-GAAP adjustments," that the Company believes are not
representative of underlying business performance. For example, the
Company previously excluded certain expenses associated with cost
reduction actions, impairment charges, and gains on disclosed
transactions. The reader should be aware that the Company may
recognize similar losses or gains in the future. Readers should
also consider the limitations associated with these non-GAAP
measures, including the potential lack of comparability of these
measures from one company to another.
The tax impact on our pre-tax non-GAAP adjustments reflects the
expected current and deferred income tax impact of the
transactions. 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.
The fiscal year 2019 non-GAAP adjustments are detailed below.
For information related to non-GAAP adjustments in fiscal year
2018, refer to Exhibit 99.1 to the Company's Current Report on Form
8-K dated 6 November 2018.
Cost Reduction
Actions
Our consolidated income statements for the twelve
months ended 30 September 2019
include an expense of $25.5
($18.8 after-tax, or $.08 per share) recorded during the third quarter
for severance and other benefits associated with position
eliminations. These actions are expected to drive cost synergies
primarily within the Industrial Gases – EMEA and the Industrial
Gases – Americas segments. The expense has been reflected as "Cost
reduction actions" on the consolidated income statements and was
excluded from segment operating income.
Gain on Exchange Of Equity
Affiliate Investments
On 1 May 2019, we closed on a
transaction involving two 50%-owned industrial gas joint ventures
in China that we accounted for as
equity method investments in our Industrial Gases – Asia segment. As part of the transaction, we
acquired our joint venture partner's 50% interest in WuXi Hi-Tech
Gas Co., Ltd. ("WuXi") in exchange for our 50% interest in
High-Tech Gases (Beijing) Co.,
Ltd. ("High-Tech Gases"). The exchange resulted in a net gain of
$29.1 ($.13 per share), of
which $15.0 resulted from the
revaluation of our previously held equity interest in WuXi to its
acquisition date fair value and $14.1
resulted from the disposition of our interest in High-Tech Gases.
The net gain has been reflected as "Gain on exchange of equity
affiliate investments" on our consolidated income statements and
was excluded from segment operating income for the twelve months
ended 30 September 2019. There were
no tax impacts on the exchange.
The acquisition of the remaining
interest in WuXi was accounted for as a business combination. The
results of this business have been consolidated within our
Industrial Gases – Asia segment as of the acquisition date.
The consolidated results subsequent to the acquisition were not
material.
Pension Settlement
Loss
Our consolidated income statements for the twelve
months ended 30 September 2019
include a pension settlement loss of $5.0 ($3.8 after-tax,
or $.02 per share). This expense was recorded
during the second quarter to accelerate recognition of a portion of
actuarial losses deferred in accumulated other comprehensive loss
associated with the U.S. Supplementary Pension Plan. The loss
is reflected on our consolidated income statements within "Other
non-operating income (expense), net."
Income
Taxes
The United States
enacted the U.S. Tax Cuts and Jobs Act (the "Tax Act") on
22 December 2017. This legislation
significantly changed existing U.S. tax laws, including a reduction
in the federal corporate income tax rate from 35% to 21%, a deemed
repatriation tax on unremitted foreign earnings, as well as other
changes. Our income tax provision for the twelve months ended
30 September 2019 includes a net
expense of $43.8 ($.20 per share) for the reversal of a
$56.2 benefit recorded in the fourth
quarter of fiscal year 2018 related to the U.S. taxation of deemed
foreign dividends, partially offset by a benefit of $12.4 to reduce the total expected costs of the
deemed repatriation tax.
While our accounting for the
provisions of the Tax Act is not provisional, further adjustments
to the deemed repatriation tax could result from future adjustments
to U.S. or foreign tax examinations of the years impacted by the
calculation, or from the issuance of additional federal or state
guidance.
Facility Closure
In
December 2018, one of our customers
was subject to a government enforced shutdown due to environmental
reasons. As a result, we recognized a charge of $29.0 ($22.1
after-tax, or $.10 per share) during
the first quarter of fiscal year 2019 primarily related to the
write-off of onsite assets. This charge is reflected as "Facility
closure" on our consolidated income statements for the twelve
months ended 30 September 2019 and
has been excluded from segment results. Annual sales and operating
income associated with this customer prior to the facility closure
were not material to the Industrial Gases – Asia segment. We do not expect to recognize
additional charges related to this shutdown.
CONSOLIDATED RESULTS
The tables below provide a reconciliation to the most directly
comparable GAAP measure for each of the major components used to
calculate diluted earnings per share (EPS), which the Company views
as a key performance metric. We believe it is important for the
reader to understand the per share impact of our non-GAAP
adjustments as Management does not consider these impacts when
evaluating underlying business performance.
|
Continuing
Operations
|
|
Three Months Ended 30
September
|
Q4 2019 vs. Q4
2018
|
Operating
Income
|
Equity
Affiliates'
Income
|
Income Tax
Provision
|
Net
Income
Attributable
to Air
Products
|
Diluted
EPS
|
2019 GAAP
|
$603.2
|
|
$59.9
|
|
$131.2
|
|
$503.2
|
|
$2.27
|
|
2018 GAAP
|
533.7
|
|
59.2
|
|
69.2
|
|
452.9
|
|
2.05
|
|
Change
GAAP
|
|
|
|
$50.3
|
|
$.22
|
|
% Change
GAAP
|
|
|
|
11
|
%
|
11
|
%
|
2019 GAAP
|
$603.2
|
|
$59.9
|
|
$131.2
|
|
$503.2
|
|
$2.27
|
|
2019 Non-GAAP Measure
("Adjusted")
|
$603.2
|
|
$59.9
|
|
$131.2
|
|
$503.2
|
|
$2.27
|
|
2018 GAAP
|
$533.7
|
|
$59.2
|
|
$69.2
|
|
$452.9
|
|
$2.05
|
|
Change in inventory
valuation method
|
(24.1)
|
|
—
|
|
(6.6)
|
|
(17.5)
|
|
(.08)
|
|
Pension settlement
loss(A)
|
—
|
|
—
|
|
10.5
|
|
33.2
|
|
.15
|
|
Tax reform
repatriation
|
—
|
|
(4.0)
|
|
(28.1)
|
|
24.1
|
|
.11
|
|
Tax reform adjustment
related to deemed foreign dividends
|
—
|
|
—
|
|
56.2
|
|
(56.2)
|
|
(.25)
|
|
Tax reform rate
change and other
|
—
|
|
—
|
|
(2.2)
|
|
2.2
|
|
.01
|
|
Tax
restructuring
|
—
|
|
—
|
|
(3.1)
|
|
3.1
|
|
.01
|
|
2018 Non-GAAP Measure
("Adjusted")
|
$509.6
|
|
$55.2
|
|
$95.9
|
|
$441.8
|
|
$2.00
|
|
Change Non-GAAP
Measure ("Adjusted")
|
|
|
|
$61.4
|
|
$.27
|
|
% Change Non-GAAP
Measure ("Adjusted")
|
|
|
|
14
|
%
|
14
|
%
|
|
|
|
|
|
|
|
Continuing
Operations
|
|
Twelve Months Ended
30 September
|
2019 vs.
2018
|
Operating
Income
|
Equity Affiliates'
Income
|
Income Tax
Provision
|
Net
Income Attributable to Air Products
|
Diluted
EPS
|
2019 GAAP
|
$2,144.4
|
|
$215.4
|
|
$480.1
|
|
$1,760.0
|
|
$7.94
|
|
2018 GAAP
|
1,965.6
|
|
174.8
|
|
524.3
|
|
1,455.6
|
|
6.59
|
|
Change
GAAP
|
|
|
|
$304.4
|
|
$1.35
|
|
% Change
GAAP
|
|
|
|
21
|
%
|
20
|
%
|
2019 GAAP
|
$2,144.4
|
|
$215.4
|
|
$480.1
|
|
$1,760.0
|
|
$7.94
|
|
Facility
closure
|
29.0
|
|
—
|
|
6.9
|
|
22.1
|
|
.10
|
|
Cost reduction
actions
|
25.5
|
|
—
|
|
6.7
|
|
18.8
|
|
.08
|
|
Gain on exchange of
equity affiliate investments
|
(29.1)
|
|
—
|
|
—
|
|
(29.1)
|
|
(.13)
|
|
Pension settlement
loss(A)
|
—
|
|
—
|
|
1.2
|
|
3.8
|
|
.02
|
|
Tax reform
repatriation
|
—
|
|
—
|
|
12.4
|
|
(12.4)
|
|
(.06)
|
|
Tax reform adjustment
related to deemed foreign dividends
|
—
|
|
—
|
|
(56.2)
|
|
56.2
|
|
.26
|
|
2019 Non-GAAP Measure
("Adjusted")
|
$2,169.8
|
|
$215.4
|
|
$451.1
|
|
$1,819.4
|
|
$8.21
|
|
2018 GAAP
|
$1,965.6
|
|
$174.8
|
|
$524.3
|
|
$1,455.6
|
|
$6.59
|
|
Change in inventory
valuation method
|
(24.1)
|
|
—
|
|
(6.6)
|
|
(17.5)
|
|
(.08)
|
|
Pension settlement
loss(A)
|
—
|
|
—
|
|
10.5
|
|
33.2
|
|
.15
|
|
Tax reform
repatriation
|
—
|
|
28.5
|
|
(448.6)
|
|
477.1
|
|
2.16
|
|
Tax reform adjustment
related to deemed foreign dividends
|
—
|
|
—
|
|
56.2
|
|
(56.2)
|
|
(.25)
|
|
Tax reform rate
change and other
|
—
|
|
—
|
|
211.8
|
|
(211.8)
|
|
(.96)
|
|
Tax
restructuring
|
—
|
|
—
|
|
35.7
|
|
(35.7)
|
|
(.16)
|
|
2018 Non-GAAP Measure
("Adjusted")
|
$1,941.5
|
|
$203.3
|
|
$383.3
|
|
$1,644.7
|
|
$7.45
|
|
Change Non-GAAP
Measure ("Adjusted")
|
|
|
|
$174.7
|
|
$.76
|
|
% Change Non-GAAP
Measure ("Adjusted")
|
|
|
|
11
|
%
|
10
|
%
|
|
|
(A)
|
Reflected on the
consolidated income statements within "Other non-operating income
(expense), net." Fiscal year 2019 includes a before-tax impact
of $5.0 for the twelve months ended 30 September 2019. The fourth
quarter and fiscal year 2018 includes a before-tax impact of
$43.7.
|
ADJUSTED EBITDA
We define Adjusted EBITDA as net income less income (loss) from
discontinued operations and excluding certain non‑GAAP adjustments,
which the Company does 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. Margin is calculated for each period by dividing each
line item by consolidated sales for the respective period.
Below is a presentation of 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:
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
Total
|
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2019
|
|
$2,224.0
|
|
|
|
$2,187.7
|
|
|
|
$2,224.0
|
|
|
|
$2,283.2
|
|
|
|
$8,918.9
|
|
2018
|
|
2,216.6
|
|
|
|
2,155.7
|
|
|
|
2,259.0
|
|
|
|
2,298.9
|
|
|
|
8,930.2
|
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
FY2019
|
2019
|
$
|
Margin
|
|
$
|
Margin
|
|
$
|
Margin
|
|
$
|
Margin
|
|
$
|
Margin
|
Net
income
|
$357.0
|
|
16.0
|
%
|
|
$433.5
|
|
19.8
|
%
|
|
$500.2
|
|
22.5
|
%
|
|
$518.7
|
|
22.7
|
%
|
|
$1,809.4
|
|
20.3
|
%
|
Less: Income from
discontinued operations
|
—
|
|
—
|
%
|
|
—
|
|
—
|
%
|
|
—
|
|
—
|
%
|
|
—
|
|
—
|
%
|
|
—
|
|
—
|
%
|
Add: Interest
expense
|
37.3
|
|
1.7
|
%
|
|
35.4
|
|
1.6
|
%
|
|
34.2
|
|
1.5
|
%
|
|
30.1
|
|
1.3
|
%
|
|
137.0
|
|
1.5
|
%
|
Less: Other
non-operating income
(expense), net
|
18.5
|
|
.8
|
%
|
|
13.7
|
|
.6
|
%
|
|
17.6
|
|
.8
|
%
|
|
16.9
|
|
.7
|
%
|
|
66.7
|
|
.7
|
%
|
Add: Income tax
provision
|
132.1
|
|
5.9
|
%
|
|
107.5
|
|
4.9
|
%
|
|
109.3
|
|
4.9
|
%
|
|
131.2
|
|
5.7
|
%
|
|
480.1
|
|
5.4
|
%
|
Add: Depreciation and
amortization
|
258.0
|
|
11.6
|
%
|
|
262.1
|
|
12.0
|
%
|
|
269.1
|
|
12.1
|
%
|
|
293.6
|
|
12.9
|
%
|
|
1,082.8
|
|
12.1
|
%
|
Add: Facility
closure
|
29.0
|
|
1.3
|
%
|
|
—
|
|
—
|
%
|
|
—
|
|
—
|
%
|
|
—
|
|
—
|
%
|
|
29.0
|
|
.3
|
%
|
Add: Cost reduction
actions
|
—
|
|
—
|
%
|
|
—
|
|
—
|
%
|
|
25.5
|
|
1.2
|
%
|
|
—
|
|
—
|
%
|
|
25.5
|
|
.3
|
%
|
Less: Gain on
exchange of equity affiliate
investments
|
—
|
|
—
|
%
|
|
—
|
|
—
|
%
|
|
29.1
|
|
1.3
|
%
|
|
—
|
|
—
|
%
|
|
29.1
|
|
.3
|
%
|
Adjusted
EBITDA
|
$794.9
|
|
35.7
|
%
|
|
$824.8
|
|
37.7
|
%
|
|
$891.6
|
|
40.1
|
%
|
|
$956.7
|
|
41.9
|
%
|
|
$3,468.0
|
|
38.9
|
%
|
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
FY2018
|
2018
|
$
|
Margin
|
|
$
|
Margin
|
|
$
|
Margin
|
|
$
|
Margin
|
|
$
|
Margin
|
Net
income
|
$161.7
|
|
7.3
|
%
|
|
$423.6
|
|
19.7
|
%
|
|
$487.9
|
|
21.6
|
%
|
|
$459.7
|
|
20.0
|
%
|
|
$1,532.9
|
|
17.2
|
%
|
Less: Income (Loss)
from discontinued
operations
|
(1.0)
|
|
—
|
%
|
|
—
|
|
—
|
%
|
|
43.2
|
|
1.9
|
%
|
|
—
|
|
—
|
%
|
|
42.2
|
|
.5
|
%
|
Add: Interest
expense
|
29.8
|
|
1.3
|
%
|
|
30.4
|
|
1.4
|
%
|
|
34.9
|
|
1.6
|
%
|
|
35.4
|
|
1.5
|
%
|
|
130.5
|
|
1.5
|
%
|
Less: Other
non-operating income
(expense), net
|
9.8
|
|
.4
|
%
|
|
11.1
|
|
.5
|
%
|
|
12.8
|
|
.6
|
%
|
|
(28.6)
|
|
(1.3)
|
%
|
|
5.1
|
|
.1
|
%
|
Add: Income tax
provision
|
291.8
|
|
13.2
|
%
|
|
56.2
|
|
2.6
|
%
|
|
107.1
|
|
4.7
|
%
|
|
69.2
|
|
3.0
|
%
|
|
524.3
|
|
5.9
|
%
|
Add: Depreciation and
amortization
|
227.9
|
|
10.3
|
%
|
|
240.0
|
|
11.1
|
%
|
|
245.6
|
|
10.9
|
%
|
|
257.2
|
|
11.2
|
%
|
|
970.7
|
|
10.9
|
%
|
Less: Change in
inventory valuation
method
|
—
|
|
—
|
%
|
|
—
|
|
—
|
%
|
|
—
|
|
—
|
%
|
|
24.1
|
|
1.0
|
%
|
|
24.1
|
|
.3
|
%
|
Add: Tax reform
repatriation - equity
method investment
|
32.5
|
|
1.5
|
%
|
|
—
|
|
—
|
%
|
|
—
|
|
—
|
%
|
|
(4.0)
|
|
(.2)
|
%
|
|
28.5
|
|
.3
|
%
|
Adjusted
EBITDA
|
$734.9
|
|
33.2
|
%
|
|
$739.1
|
|
34.3
|
%
|
|
$819.5
|
|
36.3
|
%
|
|
$822.0
|
|
35.8
|
%
|
|
$3,115.5
|
|
34.9
|
%
|
2019 vs.
2018
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
Total
|
Change
GAAP
|
|
|
|
|
|
|
|
|
|
Net income $
change
|
$195.3
|
|
|
$9.9
|
|
|
$12.3
|
|
|
$59.0
|
|
|
$276.5
|
|
Net income %
change
|
121
|
%
|
|
2
|
%
|
|
3
|
%
|
|
13
|
%
|
|
18
|
%
|
Net income margin
change
|
870
|
bp
|
|
10
|
bp
|
|
90
|
bp
|
|
270
|
bp
|
|
310
|
bp
|
Change
Non-GAAP
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA $
change
|
$60.0
|
|
|
$85.7
|
|
|
$72.1
|
|
|
$134.7
|
|
|
$352.5
|
|
Adjusted EBITDA %
change
|
8
|
%
|
|
12
|
%
|
|
9
|
%
|
|
16
|
%
|
|
11
|
%
|
Adjusted EBITDA
margin change
|
250
|
bp
|
|
340
|
bp
|
|
380
|
bp
|
|
610
|
bp
|
|
400
|
bp
|
Below is a reconciliation of operating income and operating
margin by segment to adjusted EBITDA and adjusted EBITDA margin by
segment for the three months ended 30
September 2019 and 2018:
|
Industrial
Gases–
Americas
|
Industrial
Gases–
EMEA
|
Industrial
Gases–
Asia
|
Industrial
Gases–
Global
|
Corporate
and other
|
Total
|
GAAP
MEASURE
|
|
|
|
|
|
|
Three Months Ended
30 September 2019
|
|
|
|
|
|
|
|
Operating income
(loss)
|
$260.7
|
|
$120.9
|
|
$231.3
|
|
$6.2
|
|
($15.9)
|
|
$603.2
|
|
Operating
margin
|
27.8
|
%
|
24.7
|
%
|
31.6
|
%
|
|
|
|
Three Months Ended
30 September 2018
|
|
|
|
|
|
Operating income
(loss)
|
$251.3
|
|
$105.8
|
|
$180.2
|
|
$12.5
|
|
($40.2)
|
|
$509.6
|
|
Operating
margin
|
25.5
|
%
|
19.1
|
%
|
28.5
|
%
|
|
|
|
Operating income
change
|
$9.4
|
|
$15.1
|
|
$51.1
|
|
|
|
|
Operating income %
change
|
4
|
%
|
14
|
%
|
28
|
%
|
|
|
|
Operating margin
change
|
230
|
bp
|
560
|
bp
|
310
|
bp
|
|
|
|
NON-GAAP
MEASURE
|
|
|
|
|
|
|
Three Months Ended
30 September 2019
|
|
|
|
|
|
Operating income
(loss)
|
$260.7
|
|
$120.9
|
|
$231.3
|
|
$6.2
|
|
($15.9)
|
|
$603.2
|
|
Add: Depreciation and
amortization
|
128.4
|
|
49.1
|
|
108.8
|
|
2.3
|
|
5.0
|
|
293.6
|
|
Add: Equity
affiliates' income
|
22.7
|
|
23.2
|
|
13.5
|
|
.5
|
|
—
|
|
59.9
|
|
Adjusted
EBITDA
|
$411.8
|
|
$193.2
|
|
$353.6
|
|
$9.0
|
|
($10.9)
|
|
$956.7
|
|
Adjusted EBITDA
margin
|
43.9
|
%
|
39.5
|
%
|
48.3
|
%
|
|
|
|
Three Months Ended
30 September 2018
|
|
|
|
|
|
Operating income
(loss)
|
$251.3
|
|
$105.8
|
|
$180.2
|
|
$12.5
|
|
($40.2)
|
|
$509.6
|
|
Add: Depreciation and
amortization
|
124.7
|
|
49.0
|
|
76.9
|
|
2.3
|
|
4.3
|
|
257.2
|
|
Add: Equity
affiliates' income (loss)
|
22.4
|
|
19.4
|
|
13.6
|
|
(.2)
|
|
—
|
|
55.2
|
|
Adjusted
EBITDA
|
$398.4
|
|
$174.2
|
|
$270.7
|
|
$14.6
|
|
($35.9)
|
|
$822.0
|
|
Adjusted EBITDA
margin
|
40.4
|
%
|
31.4
|
%
|
42.8
|
%
|
|
|
|
Adjusted EBITDA
change
|
$13.4
|
|
$19.0
|
|
$82.9
|
|
|
|
|
Adjusted EBITDA %
change
|
3
|
%
|
11
|
%
|
31
|
%
|
|
|
|
Adjusted EBITDA
margin change
|
350
|
bp
|
810
|
bp
|
550
|
bp
|
|
|
|
The following table reconciles operating income as reflected on
our consolidated income statements to total operating income in the
table above:
|
Three Months
Ended
|
|
30
September
|
Operating
Income
|
2019
|
2018
|
Consolidated
operating income
|
$603.2
|
|
$533.7
|
|
Change in inventory
valuation method
|
—
|
|
(24.1)
|
|
Total
|
$603.2
|
|
$509.6
|
|
The following table reconciles equity affiliates' income as
reflected on our consolidated income statements to total equity
affiliates' income in the table above:
|
Three Months
Ended
|
|
30
September
|
Equity Affiliates'
Income
|
2019
|
2018
|
Consolidated equity
affiliates' income
|
$59.9
|
|
$59.2
|
|
Tax reform
repatriation - equity method investment
|
—
|
|
(4.0)
|
|
Total
|
$59.9
|
|
$55.2
|
|
INCOME TAXES
The tax impact of our pre-tax non-GAAP adjustments reflects the
expected current and deferred income tax expense associated with
each adjustment and is primarily dependent upon the statutory tax
rate of the various relevant jurisdictions and the taxability of
the adjustments in those jurisdictions.
|
Effective Tax
Rate
|
|
Three Months
Ended
30 September
|
|
Twelve Months
Ended
30 September
|
|
2019
|
2018
|
|
2019
|
2018
|
Income Tax
Provision—GAAP
|
$131.2
|
|
$69.2
|
|
|
$480.1
|
|
$524.3
|
|
Income From
Continuing Operations Before Taxes—GAAP
|
$649.9
|
|
$528.9
|
|
|
$2,289.5
|
|
$2,015.0
|
|
Effective Tax
Rate—GAAP
|
20.2
|
%
|
13.1
|
%
|
|
21.0
|
%
|
26.0
|
%
|
Income Tax
Provision—GAAP
|
$131.2
|
|
$69.2
|
|
|
$480.1
|
|
$524.3
|
|
Change in inventory
valuation method
|
—
|
|
(6.6)
|
|
|
—
|
|
(6.6)
|
|
Facility
closure
|
—
|
|
—
|
|
|
6.9
|
|
—
|
|
Cost reduction
actions
|
—
|
|
—
|
|
|
6.7
|
|
—
|
|
Pension settlement
loss
|
—
|
|
10.5
|
|
|
1.2
|
|
10.5
|
|
Tax reform
repatriation
|
—
|
|
(28.1)
|
|
|
12.4
|
|
(448.6)
|
|
Tax reform adjustment
related to deemed foreign dividends
|
—
|
|
56.2
|
|
|
(56.2)
|
|
56.2
|
|
Tax reform rate
change and other
|
—
|
|
(2.2)
|
|
|
—
|
|
211.8
|
|
Tax
restructuring
|
—
|
|
(3.1)
|
|
|
—
|
|
35.7
|
|
Income Tax
Provision—Non-GAAP Measure ("Adjusted")
|
$131.2
|
|
$95.9
|
|
|
$451.1
|
|
$383.3
|
|
Income From
Continuing Operations Before Taxes—GAAP
|
$649.9
|
|
$528.9
|
|
|
$2,289.5
|
|
$2,015.0
|
|
Change in inventory
valuation method
|
—
|
|
(24.1)
|
|
|
—
|
|
(24.1)
|
|
Facility
closure
|
—
|
|
—
|
|
|
29.0
|
|
—
|
|
Cost reduction
actions
|
—
|
|
—
|
|
|
25.5
|
|
—
|
|
Gain on exchange of
equity affiliate investments
|
—
|
|
—
|
|
|
(29.1)
|
|
—
|
|
Pension settlement
loss
|
—
|
|
43.7
|
|
|
5.0
|
|
43.7
|
|
Tax reform
repatriation - equity method investment
|
—
|
|
(4.0)
|
|
|
—
|
|
28.5
|
|
Income From
Continuing Operations Before Taxes—Non-GAAP
Measure ("Adjusted")
|
$649.9
|
|
$544.5
|
|
|
$2,319.9
|
|
$2,063.1
|
|
Effective Tax
Rate—Non-GAAP Measure ("Adjusted")
|
20.2
|
%
|
17.6
|
%
|
|
19.4
|
%
|
18.6
|
%
|
CAPITAL EXPENDITURES
We define capital expenditures as cash flows for additions to
plant and equipment, 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:
|
Twelve Months
Ended
|
|
30
September
|
|
2019
|
2018
|
Cash used for
investing activities
|
$2,113.4
|
|
$1,641.6
|
|
Proceeds from sale of
assets and investments
|
11.1
|
|
48.8
|
|
Purchases of
investments
|
(172.1)
|
|
(530.3)
|
|
Proceeds from
investments
|
190.5
|
|
748.2
|
|
Other investing
activities
|
(14.3)
|
|
5.5
|
|
Capital
expenditures
|
$2,128.6
|
|
$1,913.8
|
|
The components of our capital expenditures are detailed in the
table below:
|
Twelve Months
Ended
|
|
30
September
|
|
2019
|
2018
|
Additions to plant
and equipment
|
$1,989.7
|
|
$1,568.4
|
|
Acquisitions, less
cash acquired
|
123.2
|
|
345.4
|
|
Investment in and
advances to unconsolidated affiliates
|
15.7
|
|
—
|
|
Capital
expenditures
|
$2,128.6
|
|
$1,913.8
|
|
We expect capital expenditures for fiscal year 2020 to be
approximately $4 billion to
$4.5 billion, including the expected
spending for the Jazan gas and power project.
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
Guidance is provided on an adjusted continuing operations basis
and is compared to adjusted historical diluted EPS, 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 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 effort, the Company's forecasted
range of adjusted EPS on a continuing operations basis to a
comparable GAAP range.
|
|
Diluted
EPS
|
|
|
Q1
|
|
Full Year
|
2019 GAAP Diluted
EPS
|
|
$1.57
|
|
$7.94
|
Facility
closure
|
|
.10
|
|
.10
|
Cost reduction
actions
|
|
—
|
|
.08
|
Gain on exchange of
equity affiliate investments
|
|
—
|
|
(.13)
|
Pension settlement
loss
|
|
—
|
|
.02
|
Tax reform
repatriation
|
|
(.07)
|
|
(.06)
|
Tax reform adjustment
related to deemed foreign dividends
|
|
.26
|
|
.26
|
2019 Adjusted Diluted
EPS
|
|
$1.86
|
|
$8.21
|
2020 Adjusted Diluted
EPS Outlook
|
|
2.05–2.10
|
|
9.35–9.60
|
Change
|
|
.19–.24
|
|
1.14–1.39
|
% Change
|
|
10%–13%
|
|
14%–17%
|
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content:http://www.prnewswire.com/news-releases/air-products-reports-fiscal-2019-gaap-eps-of-7-94--up-20-percent-and-adjusted-eps-of-8-21--up-10-percent-300953736.html
SOURCE Air Products