x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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23-1274455
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(State or Other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer Identification No.)
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7201 Hamilton Boulevard, Allentown, Pennsylvania
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18195-1501
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(Address of Principal Executive Offices)
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(Zip Code)
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Large accelerated filer
x
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Accelerated filer
¨
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Non-accelerated filer
¨
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Smaller reporting company
¨
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(Do not check if a smaller reporting company)
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Class
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Outstanding at 31 December 2016
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Common Stock, $1 par value
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217,589,952
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Page No.
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Three Months Ended
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||||||
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31 December
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||||||
(Millions of dollars, except for share data)
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2016
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2015
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||||
Sales
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$
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1,882.5
|
|
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$
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1,866.3
|
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Cost of sales
|
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1,318.1
|
|
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1,295.9
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||
Selling and administrative
|
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165.7
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|
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173.9
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||
Research and development
|
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15.1
|
|
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16.9
|
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||
Business separation costs
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30.2
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12.0
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Cost reduction and asset actions
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50.0
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—
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Other income (expense), net
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24.7
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|
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4.9
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Operating Income
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328.1
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|
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372.5
|
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Equity affiliates’ income
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38.0
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33.3
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Interest expense
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29.5
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22.2
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Income From Continuing Operations Before Taxes
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336.6
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383.6
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Income tax provision
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78.4
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96.4
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Income from Continuing Operations
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258.2
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287.2
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Income From Discontinued Operations, net of tax
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48.2
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|
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84.8
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||
Net Income
|
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306.4
|
|
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372.0
|
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||
Net Income Attributable to Noncontrolling Interests of Continuing Operations
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6.6
|
|
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6.3
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Net Income Attributable to Noncontrolling Interests of Discontinued Operations
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—
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2.1
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Net Income Attributable to Air Products
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$
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299.8
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$
|
363.6
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Net Income Attributable to Air Products
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||||
Income from continuing operations
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$
|
251.6
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$
|
280.9
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Income from discontinued operations
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48.2
|
|
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82.7
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||
Net Income Attributable to Air Products
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$
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299.8
|
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$
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363.6
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Basic Earnings Per Common Share Attributable to Air Products
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||||
Income from continuing operations
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$
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1.16
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$
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1.30
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Income from discontinued operations
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.22
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.38
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Net Income Attributable to Air Products
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$
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1.38
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$
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1.68
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Diluted Earnings Per Common Share Attributable to Air Products
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Income from continuing operations
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$
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1.15
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$
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1.29
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Income from discontinued operations
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.22
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.38
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Net Income Attributable to Air Products
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$
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1.37
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$
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1.67
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Weighted Average Common Shares – Basic
(in millions)
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217.7
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215.8
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Weighted Average Common Shares – Diluted
(in millions)
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219.7
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217.6
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Dividends Declared Per Common Share – Cash
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$
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.86
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$
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.81
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Three Months Ended
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||||||
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31 December
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||||||
(Millions of dollars)
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2016
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2015
|
||||
Net Income
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$
|
306.4
|
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$
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372.0
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Other Comprehensive Loss, net of tax:
|
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Translation adjustments, net of tax of $32.3 and ($6.7)
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(281.2
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)
|
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(102.9
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)
|
||
Net gain (loss) on derivatives, net of tax of ($10.7) and $4.8
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(9.8
|
)
|
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16.0
|
|
||
Reclassification adjustments:
|
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Currency translation adjustment
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—
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2.4
|
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Derivatives, net of tax of $10.6 and ($8.0)
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25.6
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(19.3
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)
|
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Pension and postretirement benefits, net of tax of $12.9 and $10.1
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27.4
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21.1
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Total Other Comprehensive Loss
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(238.0
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)
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(82.7
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)
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Comprehensive Income
|
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68.4
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289.3
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Net Income Attributable to Noncontrolling Interests
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6.6
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8.4
|
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Other Comprehensive Loss Attributable to Noncontrolling Interests
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(3.1
|
)
|
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—
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Comprehensive Income Attributable to Air Products
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$
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64.9
|
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$
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280.9
|
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31 December
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30 September
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||||
(Millions of dollars, except for share data)
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2016
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2016
|
||||
Assets
|
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|
||||
Current Assets
|
|
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||||
Cash and cash items
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$
|
655.5
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$
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1,293.2
|
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Trade receivables, net
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1,063.3
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1,146.2
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Inventories
|
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330.7
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255.0
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||
Contracts in progress, less progress billings
|
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84.6
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|
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64.6
|
|
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Prepaid expenses
|
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68.6
|
|
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93.9
|
|
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Other receivables and current assets
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485.9
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538.2
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Current assets of discontinued operations
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860.2
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926.2
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Total Current Assets
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3,548.8
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4,317.3
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Investment in net assets of and advances to equity affiliates
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1,254.7
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1,283.6
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Plant and equipment, at cost
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18,273.8
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18,660.2
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Less: accumulated depreciation
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10,243.5
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10,400.5
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Plant and equipment, net
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8,030.3
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8,259.7
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Goodwill, net
|
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811.1
|
|
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845.1
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|
||
Intangible assets, net
|
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376.7
|
|
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387.9
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|
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Noncurrent capital lease receivables
|
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1,162.6
|
|
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1,221.7
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|
||
Other noncurrent assets
|
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772.0
|
|
|
671.0
|
|
||
Noncurrent assets of discontinued operations
|
|
—
|
|
|
1,042.3
|
|
||
Total Noncurrent Assets
|
|
12,407.4
|
|
|
13,711.3
|
|
||
Total Assets
|
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$
|
15,956.2
|
|
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$
|
18,028.6
|
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Liabilities and Equity
|
|
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|
||||
Current Liabilities
|
|
|
|
|
||||
Payables and accrued liabilities
|
|
$
|
1,677.5
|
|
|
$
|
1,652.2
|
|
Accrued income taxes
|
|
133.7
|
|
|
117.9
|
|
||
Short-term borrowings
|
|
156.1
|
|
|
935.8
|
|
||
Current portion of long-term debt
|
|
873.3
|
|
|
365.4
|
|
||
Current liabilities of discontinued operations
|
|
89.2
|
|
|
211.8
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|
||
Total Current Liabilities
|
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2,929.8
|
|
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3,283.1
|
|
||
Long-term debt
|
|
3,289.0
|
|
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3,909.7
|
|
||
Other noncurrent liabilities
|
|
1,797.3
|
|
|
1,816.5
|
|
||
Deferred income taxes
|
|
679.0
|
|
|
710.4
|
|
||
Noncurrent liabilities of discontinued operations
|
|
—
|
|
|
1,095.5
|
|
||
Total Noncurrent Liabilities
|
|
5,765.3
|
|
|
7,532.1
|
|
||
Total Liabilities
|
|
8,695.1
|
|
|
10,815.2
|
|
||
Commitments and Contingencies – See Note 11
|
|
|
|
|
||||
Air Products Shareholders’ Equity
|
|
|
|
|
||||
Common stock (par value $1 per share; issued 2017 and 2016 - 249,455,584 shares)
|
|
249.4
|
|
|
249.4
|
|
||
Capital in excess of par value
|
|
967.5
|
|
|
970.0
|
|
||
Retained earnings
|
|
10,771.7
|
|
|
10,475.5
|
|
||
Accumulated other comprehensive loss
|
|
(2,611.7
|
)
|
|
(2,388.3
|
)
|
||
Treasury stock, at cost (2017 - 31,865,632 shares; 2016 - 32,104,759 shares)
|
|
(2,215.4
|
)
|
|
(2,227.0
|
)
|
||
Total Air Products Shareholders’ Equity
|
|
7,161.5
|
|
|
7,079.6
|
|
||
Noncontrolling Interests
|
|
99.6
|
|
|
133.8
|
|
||
Total Equity
|
|
7,261.1
|
|
|
7,213.4
|
|
||
Total Liabilities and Equity
|
|
$
|
15,956.2
|
|
|
$
|
18,028.6
|
|
|
|
Three Months Ended
|
||||||
|
|
31 December
|
||||||
(Millions of dollars)
|
|
2016
|
|
2015
|
||||
Operating Activities
|
|
|
|
|
||||
Net income
|
|
$
|
306.4
|
|
|
$
|
372.0
|
|
Less: Net income attributable to noncontrolling interests of continuing operations
|
|
6.6
|
|
|
6.3
|
|
||
Less: Net income attributable to noncontrolling interests of discontinued operations
|
|
—
|
|
|
2.1
|
|
||
Net income attributable to Air Products
|
|
299.8
|
|
|
363.6
|
|
||
Income from discontinued operations
|
|
(48.2
|
)
|
|
(82.7
|
)
|
||
Income from continuing operations attributable to Air Products
|
|
251.6
|
|
|
280.9
|
|
||
Adjustments to reconcile income to cash provided by operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
206.1
|
|
|
214.7
|
|
||
Deferred income taxes
|
|
(23.6
|
)
|
|
31.7
|
|
||
Undistributed earnings of unconsolidated affiliates
|
|
(6.9
|
)
|
|
7.0
|
|
||
Gain on sale of assets and investments
|
|
(5.0
|
)
|
|
(.9
|
)
|
||
Share-based compensation
|
|
9.0
|
|
|
8.3
|
|
||
Noncurrent capital lease receivables
|
|
22.3
|
|
|
12.2
|
|
||
Write-down of long-lived assets associated with restructuring
|
|
45.7
|
|
|
—
|
|
||
Other adjustments
|
|
10.7
|
|
|
(66.2
|
)
|
||
Working capital changes that provided (used) cash, excluding effects of acquisitions and divestitures:
|
|
|
|
|
||||
Trade receivables
|
|
42.3
|
|
|
83.7
|
|
||
Inventories
|
|
9.9
|
|
|
(19.0
|
)
|
||
Contracts in progress, less progress billings
|
|
(22.6
|
)
|
|
(20.3
|
)
|
||
Other receivables
|
|
(7.2
|
)
|
|
(25.3
|
)
|
||
Payables and accrued liabilities
|
|
10.4
|
|
|
(100.7
|
)
|
||
Other working capital
|
|
31.6
|
|
|
(8.9
|
)
|
||
Cash Provided by Operating Activities
|
|
574.3
|
|
|
397.2
|
|
||
Investing Activities
|
|
|
|
|
||||
Additions to plant and equipment
|
|
(239.2
|
)
|
|
(248.4
|
)
|
||
Investment in and advances to unconsolidated affiliates
|
|
(8.8
|
)
|
|
1.3
|
|
||
Proceeds from sale of assets and investments
|
|
11.4
|
|
|
30.8
|
|
||
Other investing activities
|
|
(1.5
|
)
|
|
.6
|
|
||
Cash Used for Investing Activities
|
|
(238.1
|
)
|
|
(215.7
|
)
|
||
Financing Activities
|
|
|
|
|
||||
Long-term debt proceeds
|
|
1.2
|
|
|
—
|
|
||
Payments on long-term debt
|
|
(14.4
|
)
|
|
(65.5
|
)
|
||
Net (decrease) increase in commercial paper and short-term borrowings
|
|
(772.2
|
)
|
|
46.0
|
|
||
Dividends paid to shareholders
|
|
(186.9
|
)
|
|
(174.4
|
)
|
||
Proceeds from stock option exercises
|
|
10.7
|
|
|
10.3
|
|
||
Other financing activities
|
|
(12.9
|
)
|
|
(16.6
|
)
|
||
Cash Used for Financing Activities
|
|
(974.5
|
)
|
|
(200.2
|
)
|
||
Discontinued Operations
|
|
|
|
|
||||
Cash (used for) provided by operating activities
|
|
(59.6
|
)
|
|
176.9
|
|
||
Cash used for investing activities
|
|
(19.4
|
)
|
|
(86.3
|
)
|
||
Cash provided by financing activities
|
|
69.5
|
|
|
2.1
|
|
||
Cash (Used for) Provided by Discontinued Operations
|
|
(9.5
|
)
|
|
92.7
|
|
||
Effect of Exchange Rate Changes on Cash
|
|
(16.2
|
)
|
|
(1.3
|
)
|
||
(Decrease) Increase in Cash and Cash Items
|
|
(664.0
|
)
|
|
72.7
|
|
||
Cash and Cash Items – Beginning of Year
|
|
1,330.8
|
|
|
206.4
|
|
||
Cash and Cash Items – End of Period
|
|
$
|
666.8
|
|
|
$
|
279.1
|
|
Less: Cash and Cash Items – Discontinued Operations
|
|
11.3
|
|
|
46.7
|
|
||
Cash and Cash Items – Continuing Operations
|
|
$
|
655.5
|
|
|
$
|
232.4
|
|
1.
|
BASIS OF PRESENTATION AND MAJOR ACCOUNTING POLICIES
|
2.
|
NEW ACCOUNTING GUIDANCE
|
3.
|
DISCONTINUED OPERATIONS
|
|
|
Asset
Actions
|
|
Contract
Actions/Other
|
|
Total
|
||||||
Loss on disposal of business
|
|
$
|
913.5
|
|
|
$
|
32.2
|
|
|
$
|
945.7
|
|
Noncash expenses
|
|
(913.5
|
)
|
|
—
|
|
|
(913.5
|
)
|
|||
Cash expenditures
|
|
—
|
|
|
(18.6
|
)
|
|
(18.6
|
)
|
|||
Currency translation adjustment
|
|
—
|
|
|
(1.4
|
)
|
|
(1.4
|
)
|
|||
30 September 2016
|
|
$
|
—
|
|
|
$
|
12.2
|
|
|
$
|
12.2
|
|
Loss on disposal of business
|
|
6.3
|
|
|
53.0
|
|
|
59.3
|
|
|||
Noncash expenses
|
|
(6.3
|
)
|
|
—
|
|
|
(6.3
|
)
|
|||
31 December 2016
|
|
$
|
—
|
|
|
$
|
65.2
|
|
|
$
|
65.2
|
|
|
Three Months Ended
|
||||||||
|
31 December 2016
|
||||||||
|
|
|
Total
|
||||||
|
Performance
|
Energy-
|
Discontinued
|
||||||
|
Materials
|
from-Waste
(A)
|
Operations
|
||||||
Sales
|
$
|
254.8
|
|
$
|
—
|
|
$
|
254.8
|
|
Cost of sales
|
179.0
|
|
—
|
|
179.0
|
|
|||
Selling and administrative
|
20.4
|
|
—
|
|
20.4
|
|
|||
Research and development
|
5.1
|
|
—
|
|
5.1
|
|
|||
Other income (expense), net
|
(.4
|
)
|
(6.5
|
)
|
(6.9
|
)
|
|||
Operating Income (Loss)
|
49.9
|
|
(6.5
|
)
|
43.4
|
|
|||
Equity affiliates’ income
|
.3
|
|
—
|
|
.3
|
|
|||
Income (Loss) Before Taxes
|
50.2
|
|
(6.5
|
)
|
43.7
|
|
|||
Income tax provision
(B)
|
(50.5
|
)
|
(1.1
|
)
|
(51.6
|
)
|
|||
Income (Loss) From Operations of Discontinued Operations, net of tax
|
100.7
|
|
(5.4
|
)
|
95.3
|
|
|||
Loss on Disposal, net of tax
|
—
|
|
(47.1
|
)
|
(47.1
|
)
|
|||
Income (Loss) from Discontinued Operations, net of tax
|
$
|
100.7
|
|
$
|
(52.5
|
)
|
$
|
48.2
|
|
(A)
|
The loss from operations of discontinued operations for EfW primarily relates to land leases, administrative costs, and costs incurred for ongoing project exit activities.
|
(B)
|
As a result of the expected gain on sale of PMD that closed in the second quarter of 2017, we released valuation allowances related to capital loss and net operating loss carryforwards that favorably impacted our income tax provision within discontinued operations by approximately $
66
during the first quarter of 2017.
|
|
Three Months Ended
|
|||||||||||
|
31 December 2015
|
|||||||||||
|
|
|
|
Total
|
||||||||
|
Electronic
|
Performance
|
Energy-
|
Discontinued
|
||||||||
|
Materials
|
Materials
|
from-Waste
(A)
|
Operations
|
||||||||
Sales
|
$
|
242.6
|
|
$
|
246.9
|
|
$
|
—
|
|
$
|
489.5
|
|
Cost of sales
|
127.3
|
|
172.6
|
|
—
|
|
299.9
|
|
||||
Selling and administrative
|
18.4
|
|
19.0
|
|
—
|
|
37.4
|
|
||||
Research and development
|
10.1
|
|
5.0
|
|
—
|
|
15.1
|
|
||||
Other income (expense), net
|
2.2
|
|
(1.2
|
)
|
(17.6
|
)
|
(16.6
|
)
|
||||
Operating Income (Loss)
|
89.0
|
|
49.1
|
|
(17.6
|
)
|
120.5
|
|
||||
Equity affiliates’ income
|
.2
|
|
.2
|
|
—
|
|
.4
|
|
||||
Income (Loss) Before Taxes
(B)
|
89.2
|
|
49.3
|
|
(17.6
|
)
|
120.9
|
|
||||
Income tax provision
|
24.9
|
|
14.5
|
|
(3.3
|
)
|
36.1
|
|
||||
Income (Loss) from Operations of Discontinued Operations, net of tax
|
64.3
|
|
34.8
|
|
(14.3
|
)
|
84.8
|
|
||||
Net Income Attributable to Noncontrolling Interests of Discontinued Operations
|
2.1
|
|
—
|
|
—
|
|
2.1
|
|
||||
Net Income (Loss) From Discontinued Operations, net of tax
|
$
|
62.2
|
|
$
|
34.8
|
|
$
|
(14.3
|
)
|
$
|
82.7
|
|
(A)
|
The loss from operations of discontinued operations for EfW primarily relates to project suspension costs, land leases, and administrative costs.
|
(B)
|
For the
three
months ended
31 December 2015
, income before taxes from operations of discontinued operations attributable to Air Products was $
118.4
.
|
|
31 December 2016
|
||||||||
|
|
|
Total
|
||||||
|
Performance
|
Energy-
|
Discontinued
|
||||||
|
Materials
|
from-Waste
|
Operations
|
||||||
Assets
|
|
|
|
||||||
Current Assets
|
|
|
|
||||||
Cash and cash items
|
$
|
11.3
|
|
$
|
—
|
|
$
|
11.3
|
|
Trade receivables, net
|
149.5
|
|
—
|
|
149.5
|
|
|||
Inventories
|
222.2
|
|
—
|
|
222.2
|
|
|||
Plant and equipment, net
|
306.8
|
|
11.0
|
|
317.8
|
|
|||
Goodwill, net
|
122.4
|
|
—
|
|
122.4
|
|
|||
Intangible assets, net
|
23.1
|
|
—
|
|
23.1
|
|
|||
Other receivables and current assets
|
12.5
|
|
1.4
|
|
13.9
|
|
|||
Total Current Assets
|
847.8
|
|
12.4
|
|
860.2
|
|
|||
Total Assets
|
$
|
847.8
|
|
$
|
12.4
|
|
$
|
860.2
|
|
Liabilities
|
|
|
|
||||||
Current Liabilities
|
|
|
|
||||||
Payables and accrued liabilities
|
$
|
59.3
|
|
$
|
10.9
|
|
$
|
70.2
|
|
Accrued income taxes
|
11.2
|
|
—
|
|
11.2
|
|
|||
Other current liabilities
|
7.8
|
|
—
|
|
7.8
|
|
|||
Total Current Liabilities
|
78.3
|
|
10.9
|
|
89.2
|
|
|||
Total Liabilities
|
$
|
78.3
|
|
$
|
10.9
|
|
$
|
89.2
|
|
|
30 September 2016
|
|||||||||||
|
|
|
|
Total
|
||||||||
|
Electronic
|
Performance
|
Energy-
|
Discontinued
|
||||||||
|
Materials
|
Materials
|
from-Waste
|
Operations
|
||||||||
Assets
|
|
|
|
|
||||||||
Current Assets
|
|
|
|
|
||||||||
Cash and cash items
|
$
|
170.6
|
|
$
|
37.5
|
|
$
|
—
|
|
$
|
208.1
|
|
Trade receivables, net
|
134.7
|
|
159.0
|
|
—
|
|
293.7
|
|
||||
Inventories
|
138.1
|
|
226.8
|
|
—
|
|
364.9
|
|
||||
Plant and equipment, net
|
—
|
|
—
|
|
18.2
|
|
18.2
|
|
||||
Other receivables and current assets
|
34.5
|
|
5.6
|
|
1.2
|
|
41.3
|
|
||||
Total Current Assets
|
477.9
|
|
428.9
|
|
19.4
|
|
926.2
|
|
||||
Plant and equipment, net
|
296.5
|
|
296.5
|
|
—
|
|
593.0
|
|
||||
Goodwill, net
|
180.0
|
|
125.0
|
|
—
|
|
305.0
|
|
||||
Intangible assets, net
|
75.1
|
|
25.0
|
|
—
|
|
100.1
|
|
||||
Other noncurrent assets
|
37.5
|
|
6.7
|
|
—
|
|
44.2
|
|
||||
Total Noncurrent Assets
|
589.1
|
|
453.2
|
|
—
|
|
1,042.3
|
|
||||
Total Assets
|
$
|
1,067.0
|
|
$
|
882.1
|
|
$
|
19.4
|
|
$
|
1,968.5
|
|
Liabilities
|
|
|
|
|
||||||||
Current Liabilities
|
|
|
|
|
||||||||
Payables and accrued liabilities
|
$
|
85.8
|
|
$
|
72.5
|
|
$
|
19.0
|
|
$
|
177.3
|
|
Accrued income taxes
|
22.7
|
|
6.0
|
|
—
|
|
28.7
|
|
||||
Current portion of long-term debt
|
5.8
|
|
—
|
|
—
|
|
5.8
|
|
||||
Total Current Liabilities
|
114.3
|
|
78.5
|
|
19.0
|
|
211.8
|
|
||||
Long-term debt
|
981.8
|
|
—
|
|
—
|
|
981.8
|
|
||||
Deferred income taxes
|
50.3
|
|
6.4
|
|
—
|
|
56.7
|
|
||||
Other noncurrent liabilities
|
47.4
|
|
9.6
|
|
—
|
|
57.0
|
|
||||
Total Noncurrent Liabilities
|
1,079.5
|
|
16.0
|
|
—
|
|
1,095.5
|
|
||||
Total Liabilities
|
$
|
1,193.8
|
|
$
|
94.5
|
|
$
|
19.0
|
|
$
|
1,307.3
|
|
4.
|
BUSINESS SEPARATION COSTS
|
5.
|
COST REDUCTION AND ASSET ACTIONS
|
|
|
Severance and
Other Benefits
|
|
Asset
Actions/Other
|
|
Total
|
||||||
2016 Charge
|
|
$
|
34.5
|
|
|
$
|
—
|
|
|
$
|
34.5
|
|
Amount reflected in pension liability
|
|
(.9
|
)
|
|
—
|
|
|
(.9
|
)
|
|||
Cash expenditures
|
|
(21.6
|
)
|
|
—
|
|
|
(21.6
|
)
|
|||
Currency translation adjustment
|
|
.3
|
|
|
—
|
|
|
.3
|
|
|||
30 September 2016
|
|
$
|
12.3
|
|
|
$
|
—
|
|
|
$
|
12.3
|
|
2017 Charge
|
|
7.7
|
|
|
45.7
|
|
|
53.4
|
|
|||
Noncash expenses
|
|
—
|
|
|
(45.7
|
)
|
|
(45.7
|
)
|
|||
Amount reflected in pension liability
|
|
(.3
|
)
|
|
—
|
|
|
(.3
|
)
|
|||
Cash expenditures
|
|
(7.6
|
)
|
|
—
|
|
|
(7.6
|
)
|
|||
Currency translation adjustment
|
|
(.6
|
)
|
|
—
|
|
|
(.6
|
)
|
|||
31 December 2016
|
|
$
|
11.5
|
|
|
$
|
—
|
|
|
$
|
11.5
|
|
6.
|
INVENTORIES
|
|
|
31 December
|
|
30 September
|
||||
|
|
2016
|
|
2016
|
||||
Finished goods
|
|
$
|
126.5
|
|
|
$
|
131.3
|
|
Work in process
|
|
17.3
|
|
|
18.3
|
|
||
Raw materials, supplies and other
|
|
202.0
|
|
|
117.1
|
|
||
|
|
$
|
345.8
|
|
|
$
|
266.7
|
|
Less: Excess of FIFO cost over LIFO cost
|
|
(15.1
|
)
|
|
(11.7
|
)
|
||
Inventories
|
|
$
|
330.7
|
|
|
$
|
255.0
|
|
7.
|
GOODWILL
|
|
|
Industrial
Gases–
Americas
|
|
Industrial
Gases–
EMEA
|
|
Industrial
Gases–
Asia
|
|
Industrial
Gases–
Global
|
|
Total
|
||||||||||
Goodwill, net at 30 September 2016
|
|
$
|
309.1
|
|
|
$
|
380.6
|
|
|
$
|
135.2
|
|
|
$
|
20.2
|
|
|
$
|
845.1
|
|
Currency translation
|
|
(4.0
|
)
|
|
(26.9
|
)
|
|
(2.7
|
)
|
|
(.4
|
)
|
|
(34.0
|
)
|
|||||
Goodwill, net at 31 December 2016
|
|
$
|
305.1
|
|
|
$
|
353.7
|
|
|
$
|
132.5
|
|
|
$
|
19.8
|
|
|
$
|
811.1
|
|
|
|
31 December
|
|
30 September
|
||||
|
|
2016
|
|
2016
|
||||
Goodwill, gross
|
|
$
|
1,064.6
|
|
|
$
|
1,103.7
|
|
Accumulated impairment losses
(A)
|
|
(253.5
|
)
|
|
(258.6
|
)
|
||
Goodwill, net
|
|
$
|
811.1
|
|
|
$
|
845.1
|
|
(A)
|
Amount is attributable to the Industrial Gases – Americas segment and includes currency translation of
$51.7
and
$46.6
as of
31 December 2016
and
30 September 2016
, respectively.
|
8.
|
FINANCIAL INSTRUMENTS
|
|
|
31 December 2016
|
|
30 September 2016
|
||||||||||
|
|
US$
Notional
|
|
Years
Average
Maturity
|
|
US$
Notional
|
|
Years
Average
Maturity
|
||||||
Forward Exchange Contracts:
|
|
|
|
|
|
|
|
|
||||||
Cash flow hedges
|
|
$
|
4,148.1
|
|
|
.4
|
|
|
$
|
4,130.3
|
|
|
.5
|
|
Net investment hedges
|
|
833.3
|
|
|
2.7
|
|
|
968.2
|
|
|
2.7
|
|
||
Not designated
|
|
2,405.1
|
|
|
.2
|
|
|
2,648.3
|
|
|
.4
|
|
||
Total Forward Exchange Contracts
|
|
$
|
7,386.5
|
|
|
.6
|
|
|
$
|
7,746.8
|
|
|
.7
|
|
|
|
31 December 2016
|
|
30 September 2016
|
||||||||||||||||||||
|
|
US$
Notional
|
|
Average
Pay %
|
|
Average
Receive
%
|
|
Years
Average
Maturity
|
|
US$
Notional
|
|
Average
Pay %
|
|
Average
Receive
%
|
|
Years
Average
Maturity
|
||||||||
Interest rate swaps
(fair value hedge)
|
|
$
|
600.0
|
|
|
LIBOR
|
|
|
2.28
|
%
|
|
2.0
|
|
$
|
600.0
|
|
|
LIBOR
|
|
|
2.28
|
%
|
|
2.3
|
Cross currency interest rate swaps
(net investment hedge)
|
|
$
|
522.0
|
|
|
3.24
|
%
|
|
2.41
|
%
|
|
2.3
|
|
$
|
517.7
|
|
|
3.24
|
%
|
|
2.43
|
%
|
|
2.6
|
Cross currency interest rate swaps
(cash flow hedge)
|
|
$
|
1,088.9
|
|
|
4.77
|
%
|
|
2.72
|
%
|
|
3.0
|
|
$
|
1,088.9
|
|
|
4.77
|
%
|
|
2.72
|
%
|
|
3.3
|
Cross currency interest rate swaps
(not designated)
|
|
$
|
23.1
|
|
|
3.62
|
%
|
|
.81
|
%
|
|
1.6
|
|
$
|
27.4
|
|
|
3.62
|
%
|
|
.81
|
%
|
|
1.8
|
|
Balance Sheet
Location
|
31 December 2016
|
30 September 2016
|
Balance Sheet
Location
|
31 December 2016
|
30 September 2016
|
||||||||
Derivatives Designated as Hedging Instruments:
|
|
|
|
|
|
|
||||||||
Forward exchange contracts
|
Other receivables
|
$
|
62.4
|
|
$
|
72.3
|
|
Accrued liabilities
|
$
|
144.2
|
|
$
|
44.0
|
|
Interest rate management contracts
|
Other receivables
|
32.3
|
|
19.9
|
|
Accrued liabilities
|
—
|
|
—
|
|
||||
Forward exchange contracts
|
Other noncurrent
assets
|
73.6
|
|
44.4
|
|
Other noncurrent
liabilities
|
1.9
|
|
9.1
|
|
||||
Interest rate management contracts
|
Other noncurrent
assets
|
202.6
|
|
160.0
|
|
Other noncurrent
liabilities
|
14.8
|
|
12.0
|
|
||||
Total Derivatives Designated as Hedging Instruments
|
|
$
|
370.9
|
|
$
|
296.6
|
|
|
$
|
160.9
|
|
$
|
65.1
|
|
Derivatives Not Designated as Hedging Instruments:
|
|
|
|
|
|
|
||||||||
Forward exchange contracts
|
Other receivables
|
$
|
93.4
|
|
$
|
77.1
|
|
Accrued liabilities
|
$
|
47.7
|
|
$
|
29.5
|
|
Forward exchange contracts
|
Other noncurrent
assets
|
—
|
|
—
|
|
Other noncurrent
liabilities
|
.2
|
|
—
|
|
||||
Interest rate management contracts
|
Other noncurrent
assets
|
—
|
|
—
|
|
Other noncurrent
liabilities
|
.3
|
|
.7
|
|
||||
Total Derivatives Not Designated as Hedging Instruments
|
|
$
|
93.4
|
|
$
|
77.1
|
|
|
$
|
48.2
|
|
$
|
30.2
|
|
Total Derivatives
|
|
$
|
464.3
|
|
$
|
373.7
|
|
|
$
|
209.1
|
|
$
|
95.3
|
|
|
Three Months Ended 31 December
|
|||||||||||||||||||||||
|
Forward
Exchange Contracts
|
Foreign Currency
Debt
|
Other
(A)
|
Total
|
||||||||||||||||||||
|
2016
|
2015
|
2016
|
2015
|
2016
|
2015
|
2016
|
2015
|
||||||||||||||||
Cash Flow Hedges, net of tax:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net gain (loss) recognized in OCI (effective portion)
|
$
|
(59.4
|
)
|
$
|
(4.7
|
)
|
$
|
—
|
|
$
|
—
|
|
$
|
49.6
|
|
$
|
20.7
|
|
$
|
(9.8
|
)
|
$
|
16.0
|
|
Net (gain) loss reclassified from OCI to sales/cost of sales (effective portion)
|
4.6
|
|
.9
|
|
—
|
|
—
|
|
—
|
|
—
|
|
4.6
|
|
.9
|
|
||||||||
Net (gain) loss reclassified from OCI to other income (expense), net (effective portion)
|
49.5
|
|
(1.8
|
)
|
—
|
|
—
|
|
(28.2
|
)
|
(20.2
|
)
|
21.3
|
|
(22.0
|
)
|
||||||||
Net (gain) loss reclassified from OCI to interest expense (effective portion)
|
(.8
|
)
|
1.4
|
|
—
|
|
—
|
|
.7
|
|
.8
|
|
(.1
|
)
|
2.2
|
|
||||||||
Net (gain) loss reclassified from OCI to other income (expense), net (ineffective portion)
|
(.2
|
)
|
(.4
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(.2
|
)
|
(.4
|
)
|
||||||||
Fair Value Hedges:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net gain (loss) recognized in interest expense
(B)
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(9.1
|
)
|
$
|
(9.0
|
)
|
$
|
(9.1
|
)
|
$
|
(9.0
|
)
|
Net Investment Hedges, net of tax:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net gain (loss) recognized in OCI
|
$
|
27.9
|
|
$
|
3.0
|
|
$
|
41.8
|
|
$
|
7.6
|
|
$
|
13.1
|
|
$
|
6.5
|
|
$
|
82.8
|
|
$
|
17.1
|
|
Derivatives Not Designated as Hedging Instruments:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net gain (loss) recognized in other income (expense), net
(C)
|
$
|
2.1
|
|
$
|
(.4
|
)
|
$
|
—
|
|
$
|
—
|
|
$
|
.8
|
|
$
|
—
|
|
$
|
2.9
|
|
$
|
(.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(A)
|
Other includes the impact on other comprehensive income (OCI) and earnings primarily related to interest rate and cross currency interest rate swaps.
|
(B)
|
The impact of fair value hedges noted above was largely offset by recognized gains and losses resulting from the impact of changes in related interest rates on outstanding debt.
|
(C)
|
The impact of the non-designated hedges noted above was largely offset by recognized gains and losses resulting from the impact of changes in exchange rates on assets and liabilities denominated in non-functional currencies.
|
9.
|
FAIR VALUE MEASUREMENTS
|
Level 1
|
— Quoted prices (unadjusted) in active markets for identical assets or liabilities.
|
Level 2
|
— Inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the asset or liability.
|
Level 3
|
— Inputs that are unobservable for the asset or liability based on our own assumptions (about the assumptions market participants would use in pricing the asset or liability).
|
|
|
31 December 2016
|
|
30 September 2016
|
||||||||||||
|
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Derivatives
|
|
|
|
|
|
|
|
|
||||||||
Forward exchange contracts
|
|
$
|
229.4
|
|
|
$
|
229.4
|
|
|
$
|
193.8
|
|
|
$
|
193.8
|
|
Interest rate management contracts
|
|
234.9
|
|
|
234.9
|
|
|
179.9
|
|
|
179.9
|
|
||||
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Derivatives
|
|
|
|
|
|
|
|
|
||||||||
Forward exchange contracts
|
|
$
|
194.0
|
|
|
$
|
194.0
|
|
|
$
|
82.6
|
|
|
$
|
82.6
|
|
Interest rate management contracts
|
|
15.1
|
|
|
15.1
|
|
|
12.7
|
|
|
12.7
|
|
||||
Long-term debt, including current portion
|
|
4,162.3
|
|
|
4,253.8
|
|
|
4,275.1
|
|
|
4,450.5
|
|
|
31 December 2016
|
|
30 September 2016
|
||||||||||||||||||||||
|
Total
|
Level 1
|
Level 2
|
Level 3
|
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||||||
Assets at Fair Value
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivatives
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Forward exchange contracts
|
$
|
229.4
|
|
$
|
—
|
|
$
|
229.4
|
|
$
|
—
|
|
|
$
|
193.8
|
|
$
|
—
|
|
$
|
193.8
|
|
$
|
—
|
|
Interest rate management contracts
|
234.9
|
|
—
|
|
234.9
|
|
—
|
|
|
179.9
|
|
—
|
|
179.9
|
|
—
|
|
||||||||
Total Assets at Fair Value
|
$
|
464.3
|
|
$
|
—
|
|
$
|
464.3
|
|
$
|
—
|
|
|
$
|
373.7
|
|
$
|
—
|
|
$
|
373.7
|
|
$
|
—
|
|
Liabilities at Fair Value
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivatives
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Forward exchange contracts
|
$
|
194.0
|
|
$
|
—
|
|
$
|
194.0
|
|
$
|
—
|
|
|
$
|
82.6
|
|
$
|
—
|
|
$
|
82.6
|
|
$
|
—
|
|
Interest rate management contracts
|
15.1
|
|
—
|
|
15.1
|
|
—
|
|
|
12.7
|
|
—
|
|
12.7
|
|
—
|
|
||||||||
Total Liabilities at Fair Value
|
$
|
209.1
|
|
$
|
—
|
|
$
|
209.1
|
|
$
|
—
|
|
|
$
|
95.3
|
|
$
|
—
|
|
$
|
95.3
|
|
$
|
—
|
|
|
31 December 2016
|
|
2017
Loss
|
|||||||||||||||
|
Total
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|||||||||||
Plant and Equipment – Continuing operations
(A)
|
$
|
1.4
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.4
|
|
|
$
|
45.7
|
|
Plant and Equipment – Discontinued operations
(A)
|
$
|
11.0
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11.0
|
|
|
$
|
6.3
|
|
(A)
|
We assessed the recoverability of the carrying value of assets associated with the EfW discontinued operation, including the air separation unit within continuing operations of our Industrial Gases- EMEA segment. We based our estimates primarily on an orderly liquidation valuation which resulted in losses for the difference between the orderly liquidation value and net book value of the assets as of 31 December 2016. For additional information, see Note
3
,
Discontinued Operations
and Note
5
,
Cost Reduction and Asset Actions
.
|
10.
|
RETIREMENT BENEFITS
|
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||||||||||
Three Months Ended 31 December
|
|
U.S.
|
|
International
|
|
U.S.
|
|
International
|
|
|
|
|
||||||||||||
Service Cost
|
|
$
|
8.3
|
|
|
$
|
6.7
|
|
|
$
|
9.0
|
|
|
$
|
6.2
|
|
|
$
|
.5
|
|
|
$
|
.5
|
|
Interest Cost
|
|
24.9
|
|
|
7.6
|
|
|
27.7
|
|
|
11.6
|
|
|
.4
|
|
|
.5
|
|
||||||
Expected return on plan assets
|
|
(52.7
|
)
|
|
(18.5
|
)
|
|
(50.5
|
)
|
|
(20.7
|
)
|
|
—
|
|
|
—
|
|
||||||
Prior service cost amortization
|
|
.6
|
|
|
—
|
|
|
.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Actuarial loss amortization
|
|
26.1
|
|
|
13.9
|
|
|
21.1
|
|
|
9.2
|
|
|
.2
|
|
|
.2
|
|
||||||
Settlements
|
|
—
|
|
|
(2.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Curtailment
|
|
4.2
|
|
|
(3.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Special termination benefits
|
|
1.1
|
|
|
.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other
|
|
—
|
|
|
2.7
|
|
|
—
|
|
|
.5
|
|
|
—
|
|
|
—
|
|
||||||
Net periodic benefit cost (Total)
|
|
$
|
12.5
|
|
|
$
|
7.4
|
|
|
$
|
8.0
|
|
|
$
|
6.8
|
|
|
$
|
1.1
|
|
|
$
|
1.2
|
|
Less: Discontinued Operations
|
|
(.6
|
)
|
|
(.7
|
)
|
|
(1.8
|
)
|
|
(1.4
|
)
|
|
—
|
|
|
(.1
|
)
|
||||||
Net periodic benefit cost (Continuing Operations)
|
|
$
|
11.9
|
|
|
$
|
6.7
|
|
|
$
|
6.2
|
|
|
$
|
5.4
|
|
|
$
|
1.1
|
|
|
$
|
1.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11.
|
COMMITMENTS AND CONTINGENCIES
|
12.
|
SHARE-BASED COMPENSATION
|
|
|
Three Months Ended
|
||||||
|
|
31 December
|
||||||
|
|
2016
|
|
2015
|
||||
Before-Tax Share-Based Compensation Cost
|
|
$
|
9.0
|
|
|
$
|
8.3
|
|
Income Tax Benefit
|
|
(3.0
|
)
|
|
(2.8
|
)
|
||
After-Tax Share-Based Compensation Cost
|
|
$
|
6.0
|
|
|
$
|
5.5
|
|
Expected volatility
|
|
20.6
|
%
|
Risk-free interest rate
|
|
1.4
|
%
|
Expected dividend yield
|
|
2.5
|
%
|
13.
|
EQUITY
|
|
Three Months Ended 31 December
|
||||||||||||||||||
|
2016
|
|
2015
|
||||||||||||||||
|
Air
Products
|
Non-
controlling
Interests
|
Total
Equity
|
|
Air
Products
|
Non-
controlling
Interests
|
Total
Equity
|
||||||||||||
Balance at 30 September
|
$
|
7,079.6
|
|
$
|
133.8
|
|
$
|
7,213.4
|
|
|
$
|
7,249.0
|
|
$
|
132.1
|
|
$
|
7,381.1
|
|
Net income
|
299.8
|
|
6.6
|
|
306.4
|
|
|
363.6
|
|
8.4
|
|
372.0
|
|
||||||
Other comprehensive loss
|
(234.9
|
)
|
(3.1
|
)
|
(238.0
|
)
|
|
(82.7
|
)
|
—
|
|
(82.7
|
)
|
||||||
Dividends on common stock (per share $0.86, $0.81)
|
(187.1
|
)
|
—
|
|
(187.1
|
)
|
|
(174.7
|
)
|
—
|
|
(174.7
|
)
|
||||||
Dividends to noncontrolling interests
|
—
|
|
(4.2
|
)
|
(4.2
|
)
|
|
—
|
|
(8.5
|
)
|
(8.5
|
)
|
||||||
Share-based compensation
|
9.0
|
|
—
|
|
9.0
|
|
|
8.3
|
|
—
|
|
8.3
|
|
||||||
Treasury shares for stock option and award plans
|
(.3
|
)
|
—
|
|
(.3
|
)
|
|
(2.0
|
)
|
—
|
|
(2.0
|
)
|
||||||
Tax benefit of stock option and award plans
|
—
|
|
—
|
|
—
|
|
|
4.9
|
|
—
|
|
4.9
|
|
||||||
Spin-off of Versum
|
186.5
|
|
(33.9
|
)
|
152.6
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Cumulative change in accounting principle (Note 2)
|
8.8
|
|
—
|
|
8.8
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Other equity transactions
|
.1
|
|
.4
|
|
.5
|
|
|
.7
|
|
(.1
|
)
|
.6
|
|
||||||
Balance at 31 December
|
$
|
7,161.5
|
|
$
|
99.6
|
|
$
|
7,261.1
|
|
|
$
|
7,367.1
|
|
$
|
131.9
|
|
$
|
7,499.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14.
|
ACCUMULATED OTHER COMPREHENSIVE LOSS
|
|
|
Net loss on
derivatives
qualifying as
hedges
|
|
Foreign
currency
translation
adjustments
|
|
Pension and
postretirement
benefits
|
|
Total
|
||||||||
Balance at 30 September 2016
|
|
$
|
(65.0
|
)
|
|
$
|
(949.3
|
)
|
|
$
|
(1,374.0
|
)
|
|
$
|
(2,388.3
|
)
|
Other comprehensive loss before reclassifications
|
|
(9.8
|
)
|
|
(281.2
|
)
|
|
—
|
|
|
(291.0
|
)
|
||||
Amounts reclassified from AOCL
|
|
25.6
|
|
|
—
|
|
|
27.4
|
|
|
53.0
|
|
||||
Net current period other comprehensive income (loss)
|
|
15.8
|
|
|
(281.2
|
)
|
|
27.4
|
|
|
(238.0
|
)
|
||||
Spin-off of Versum
|
|
.2
|
|
|
6.0
|
|
|
5.3
|
|
|
11.5
|
|
||||
Amount attributable to noncontrolling interests
|
|
—
|
|
|
(3.1
|
)
|
|
—
|
|
|
(3.1
|
)
|
||||
Balance at 31 December 2016
|
|
$
|
(49.0
|
)
|
|
$
|
(1,221.4
|
)
|
|
$
|
(1,341.3
|
)
|
|
$
|
(2,611.7
|
)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
||||||
|
31 December
|
||||||
|
2016
|
|
2015
|
||||
(Gain) Loss on Cash Flow Hedges, net of tax
|
|
|
|
||||
Sales/Cost of sales
|
$
|
4.6
|
|
|
$
|
.9
|
|
Other income (expense), net
|
21.1
|
|
|
(22.4
|
)
|
||
Interest expense
|
(.1
|
)
|
|
2.2
|
|
||
Total (Gain) Loss on Cash Flow Hedges, net of tax
|
$
|
25.6
|
|
|
$
|
(19.3
|
)
|
Currency Translation Adjustment
(A)
|
$
|
—
|
|
|
$
|
2.4
|
|
Pension and Postretirement Benefits, net of tax
(B)
|
$
|
27.4
|
|
|
$
|
21.1
|
|
(A)
|
The impact is reflected in Other income (expense), net and relates to the sale of an equity affiliate.
|
(B)
|
The components include items such as prior service cost amortization, actuarial loss amortization, and settlements and are reflected in net periodic benefit cost. Refer to Note
10
,
Retirement Benefits
.
|
15.
|
EARNINGS PER SHARE
|
|
|
Three Months Ended
|
|
||||||
|
|
31 December
|
|
||||||
|
|
2016
|
|
2015
|
|
||||
Numerator
|
|
|
|
|
|
||||
Income from continuing operations
|
|
$
|
251.6
|
|
|
$
|
280.9
|
|
|
Income from discontinued operations
|
|
48.2
|
|
|
82.7
|
|
|
||
Net Income Attributable to Air Products
|
|
$
|
299.8
|
|
|
$
|
363.6
|
|
|
Denominator
(in millions)
|
|
|
|
|
|
||||
Weighted average common shares — Basic
|
|
217.7
|
|
|
215.8
|
|
|
||
Effect of dilutive securities
|
|
|
|
|
|
||||
Employee stock option and other award plans
|
|
2.0
|
|
|
1.8
|
|
|
||
Weighted average common shares — Diluted
|
|
219.7
|
|
|
217.6
|
|
|
||
Basic Earnings Per Common Share Attributable to Air Products
|
|
|
|
|
|
||||
Income from continuing operations
|
|
$
|
1.16
|
|
|
$
|
1.30
|
|
|
Income from discontinued operations
|
|
.22
|
|
|
.38
|
|
|
||
Net Income Attributable to Air Products
|
|
$
|
1.38
|
|
|
$
|
1.68
|
|
|
Diluted Earnings Per Common Share Attributable to Air Products
|
|
|
|
|
|
||||
Income from continuing operations
|
|
$
|
1.15
|
|
|
$
|
1.29
|
|
|
Income from discontinued operations
|
|
.22
|
|
|
.38
|
|
|
||
Net Income Attributable to Air Products
|
|
$
|
1.37
|
|
|
$
|
1.67
|
|
|
16.
|
SUPPLEMENTAL INFORMATION
|
17.
|
BUSINESS SEGMENT INFORMATION
|
•
|
Industrial Gases – Americas
|
•
|
Industrial Gases – EMEA (Europe, Middle East, and Africa)
|
•
|
Industrial Gases – Asia
|
•
|
Industrial Gases – Global
|
•
|
Corporate and other
|
|
Industrial
Gases–
Americas
|
Industrial
Gases–
EMEA
|
Industrial
Gases–
Asia
|
Industrial
Gases–
Global
|
Corporate
and other
|
Segment
Total
|
||||||||||||
Three Months Ended 31 December 2016
|
||||||||||||||||||
Sales
|
$
|
863.9
|
|
$
|
399.7
|
|
$
|
438.3
|
|
$
|
147.9
|
|
$
|
32.7
|
|
$
|
1,882.5
|
|
Operating income (loss)
|
223.8
|
|
88.0
|
|
118.1
|
|
8.2
|
|
(29.8
|
)
|
408.3
|
|
||||||
Depreciation and amortization
|
111.8
|
|
42.2
|
|
46.7
|
|
2.0
|
|
3.4
|
|
206.1
|
|
||||||
Equity affiliates' income
|
14.7
|
|
9.5
|
|
13.5
|
|
.3
|
|
—
|
|
38.0
|
|
||||||
Three Months Ended 31 December 2015
|
||||||||||||||||||
Sales
|
$
|
836.3
|
|
$
|
439.6
|
|
$
|
414.6
|
|
$
|
104.3
|
|
$
|
71.5
|
|
$
|
1,866.3
|
|
Operating income (loss)
|
211.6
|
|
92.3
|
|
117.3
|
|
(19.3
|
)
|
(17.4
|
)
|
384.5
|
|
||||||
Depreciation and amortization
|
109.0
|
|
46.8
|
|
51.9
|
|
2.1
|
|
4.9
|
|
214.7
|
|
||||||
Equity affiliates' income (loss)
|
14.5
|
|
7.6
|
|
11.7
|
|
(.5
|
)
|
—
|
|
33.3
|
|
||||||
Total Assets
|
||||||||||||||||||
31 December 2016
|
$
|
5,873.9
|
|
$
|
3,005.0
|
|
$
|
4,098.0
|
|
$
|
268.5
|
|
$
|
1,850.6
|
|
$
|
15,096.0
|
|
30 September 2016
|
5,896.7
|
|
3,178.6
|
|
4,232.7
|
|
367.6
|
|
2,384.5
|
|
16,060.1
|
|
|
|
Three Months Ended
|
||||||
|
|
31 December
|
||||||
Operating Income
|
|
2016
|
|
2015
|
||||
Segment total
|
|
$
|
408.3
|
|
|
$
|
384.5
|
|
Business separation costs
|
|
(30.2
|
)
|
|
(12.0
|
)
|
||
Cost reduction and asset actions
|
|
(50.0
|
)
|
|
—
|
|
||
Consolidated Total
|
|
$
|
328.1
|
|
|
$
|
372.5
|
|
|
|
31 December
|
|
30 September
|
||||
Total Assets
|
|
2016
|
|
2016
|
||||
Segment total
|
|
$
|
15,096.0
|
|
|
$
|
16,060.1
|
|
Discontinued operations
|
|
860.2
|
|
|
1,968.5
|
|
||
Consolidated Total
|
|
$
|
15,956.2
|
|
|
$
|
18,028.6
|
|
•
|
Sales of
$1,882.5
increased
1%
, or
$16.2
, as higher volumes and energy contractual pass-through to customers of 2% each were partially offset by an unfavorable currency impact of 3%.
|
•
|
Operating income of
$328.1
decreased
12%
, or
$44.4
, and operating margin of
17.4%
decreased
260
basis points (bp). On a non-GAAP basis, operating income of
$408.3
increased
6%
, or
$23.8
, and operating margin of
21.7%
increased
110
bp.
|
•
|
Adjusted EBITDA of
$652.4
increased
3%
, or
$19.9
, primarily due to favorable cost performance. Adjusted EBITDA margin of
34.7%
increased
80
bp.
|
•
|
Income from continuing operations of
$251.6
decreased
10%
, or
$29.3
, and diluted earnings per share of
$1.15
decreased
11%
, or
$0.14
. On a non-GAAP basis, income from continuing operations of
$322.0
increased
10%
, or
$29.1
, and diluted earnings per share of
$1.47
increased
9%
, or
$0.12
. A summary table of changes in diluted earnings per share is presented below.
|
•
|
We completed the spin-off of EMD as Versum Materials, Inc. on 1 October 2016.
|
|
|
Three Months Ended
|
|
|
||||||||
|
|
31 December
|
|
Increase
|
||||||||
|
|
2016
|
|
2015
|
|
(Decrease)
|
||||||
Diluted Earnings per Share
|
|
|
|
|
|
|
||||||
Net Income
|
|
$
|
1.37
|
|
|
$
|
1.67
|
|
|
$
|
(.30
|
)
|
Income from Discontinued Operations
|
|
.22
|
|
|
.38
|
|
|
(.16
|
)
|
|||
Income from Continuing Operations – GAAP Basis
|
|
$
|
1.15
|
|
|
$
|
1.29
|
|
|
$
|
(.14
|
)
|
Operating Income Impact (after-tax)
|
|
|
|
|
|
|
||||||
Underlying business
|
|
|
|
|
|
|
||||||
Volume
|
|
|
|
|
|
$
|
(.07
|
)
|
||||
Price/raw materials
|
|
|
|
|
|
(.01
|
)
|
|||||
Costs
|
|
|
|
|
|
.19
|
|
|||||
Currency
|
|
|
|
|
|
(.03
|
)
|
|||||
Business separation costs
|
|
|
|
|
|
(.06
|
)
|
|||||
Cost reduction and asset actions
|
|
|
|
|
|
(.19
|
)
|
|||||
Operating Income
|
|
|
|
|
|
$
|
(.17
|
)
|
||||
Other (after-tax)
|
|
|
|
|
|
|
||||||
Equity affiliates' income
|
|
|
|
|
|
.02
|
|
|||||
Interest expense
|
|
|
|
|
|
(.03
|
)
|
|||||
Income tax
|
|
|
|
|
|
.06
|
|
|||||
Tax costs associated with business separation
|
|
|
|
|
|
(.01
|
)
|
|||||
Weighted average diluted shares
|
|
|
|
|
|
(.01
|
)
|
|||||
Other
|
|
|
|
|
|
$
|
.03
|
|
||||
Total Change in Diluted Earnings per Share from Continuing Operations – GAAP Basis
|
|
|
|
|
|
$
|
(.14
|
)
|
|
|
Three Months Ended
|
|
|
||||||||
|
|
31 December
|
|
Increase
|
|
|||||||
|
|
2016
|
|
2015
|
|
(Decrease)
|
|
|||||
Income from Continuing Operations – GAAP Basis
|
|
$
|
1.15
|
|
|
$
|
1.29
|
|
|
$
|
(.14
|
)
|
Business separation costs
|
|
.12
|
|
|
.06
|
|
|
.06
|
|
|||
Tax costs associated with business separation
|
|
.01
|
|
|
—
|
|
|
.01
|
|
|||
Cost reduction and asset actions
|
|
.19
|
|
|
—
|
|
|
.19
|
|
|||
Income from Continuing Operations – Non-GAAP Basis
|
|
$
|
1.47
|
|
|
$
|
1.35
|
|
|
$
|
.12
|
|
|
|
Three Months Ended
|
|
|
|
|
|||||||||
|
|
31 December
|
|
|
|
|
|||||||||
|
|
2016
|
|
2015
|
|
$ Change
|
|
Change
|
|||||||
Sales
|
|
$
|
1,882.5
|
|
|
$
|
1,866.3
|
|
|
$
|
16.2
|
|
|
1
|
%
|
Operating income
|
|
328.1
|
|
|
372.5
|
|
|
(44.4
|
)
|
|
(12
|
)%
|
|||
Operating margin
|
|
17.4
|
%
|
|
20.0
|
%
|
|
|
|
|
(260 bp)
|
|
|||
Equity affiliates’ income
|
|
38.0
|
|
|
33.3
|
|
|
4.7
|
|
|
14
|
%
|
|||
Non-GAAP Basis
|
|
|
|
|
|
|
|
|
|||||||
Adjusted EBITDA
|
|
$
|
652.4
|
|
|
$
|
632.5
|
|
|
$
|
19.9
|
|
|
3
|
%
|
Adjusted EBITDA margin
|
|
34.7
|
%
|
|
33.9
|
%
|
|
|
|
80 bp
|
|
||||
Adjusted Operating income
|
|
408.3
|
|
|
384.5
|
|
|
23.8
|
|
|
6
|
%
|
|||
Adjusted Operating margin
|
|
21.7
|
%
|
|
20.6
|
%
|
|
|
|
110 bp
|
|
|
% Change from
Prior Year
|
|
Underlying business
|
|
|
Volume
|
2
|
%
|
Price
|
—
|
%
|
Currency
|
(3
|
)%
|
Energy and raw material cost pass-through
|
2
|
%
|
Total Consolidated Change
|
1
|
%
|
|
|
Three Months Ended
|
||||||
|
|
31 December
|
||||||
|
|
2016
|
|
2015
|
||||
Interest incurred
|
|
$
|
35.8
|
|
|
$
|
35.8
|
|
Less: capitalized interest
|
|
6.3
|
|
|
13.6
|
|
||
Interest expense
|
|
$
|
29.5
|
|
|
$
|
22.2
|
|
|
|
Three Months Ended
|
|
|
|
|
||||||||
|
|
31 December
|
|
|
|
|
||||||||
|
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
||||||
Sales
|
|
$
|
863.9
|
|
|
$
|
836.3
|
|
|
$
|
27.6
|
|
|
3%
|
Operating income
|
|
223.8
|
|
|
211.6
|
|
|
12.2
|
|
|
6%
|
|||
Operating margin
|
|
25.9
|
%
|
|
25.3
|
%
|
|
|
|
60 bp
|
||||
Equity affiliates’ income
|
|
14.7
|
|
|
14.5
|
|
|
.2
|
|
|
1%
|
|||
Adjusted EBITDA
|
|
350.3
|
|
|
335.1
|
|
|
15.2
|
|
|
5%
|
|||
Adjusted EBITDA margin
|
|
40.5
|
%
|
|
40.1
|
%
|
|
|
|
40 bp
|
|
% Change from
Prior Year
|
|
Underlying business
|
|
|
Volume
|
(2
|
)%
|
Price
|
—
|
%
|
Currency
|
—
|
%
|
Energy and raw material cost pass-through
|
5
|
%
|
Total Industrial Gases – Americas Sales Change
|
3
|
%
|
|
|
Three Months Ended
|
|
|
|
|
||||||||
|
|
31 December
|
|
|
|
|
||||||||
|
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
||||||
Sales
|
|
$
|
399.7
|
|
|
$
|
439.6
|
|
|
$
|
(39.9
|
)
|
|
(9)%
|
Operating income
|
|
88.0
|
|
|
92.3
|
|
|
(4.3
|
)
|
|
(5)%
|
|||
Operating margin
|
|
22.0
|
%
|
|
21.0
|
%
|
|
|
|
100 bp
|
||||
Equity affiliates’ income
|
|
9.5
|
|
|
7.6
|
|
|
1.9
|
|
|
25%
|
|||
Adjusted EBITDA
|
|
139.7
|
|
|
146.7
|
|
|
(7.0
|
)
|
|
(5)%
|
|||
Adjusted EBITDA margin
|
|
35.0
|
%
|
|
33.4
|
%
|
|
|
|
160 bp
|
|
% Change from
Prior Year
|
|
Underlying business
|
|
|
Volume
|
(2
|
)%
|
Price
|
—
|
%
|
Currency
|
(6
|
)%
|
Energy and raw material cost pass-through
|
(1
|
)%
|
Total Industrial Gases – EMEA Sales Change
|
(9
|
)%
|
|
|
Three Months Ended
|
|
|
|
|
||||||||
|
|
31 December
|
|
|
|
|
||||||||
|
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
||||||
Sales
|
|
$
|
438.3
|
|
|
$
|
414.6
|
|
|
$
|
23.7
|
|
|
6%
|
Operating income
|
|
118.1
|
|
|
117.3
|
|
|
.8
|
|
|
1%
|
|||
Operating margin
|
|
26.9
|
%
|
|
28.3
|
%
|
|
|
|
(140 bp)
|
||||
Equity affiliates’ income
|
|
13.5
|
|
|
11.7
|
|
|
1.8
|
|
|
15%
|
|||
Adjusted EBITDA
|
|
178.3
|
|
|
180.9
|
|
|
(2.6
|
)
|
|
(1)%
|
|||
Adjusted EBITDA margin
|
|
40.7
|
%
|
|
43.6
|
%
|
|
|
|
(290 bp)
|
|
% Change from
Prior Year
|
|
Underlying business
|
|
|
Volume
|
10
|
%
|
Price
|
(1
|
)%
|
Currency
|
(3
|
)%
|
Energy and raw material cost pass-through
|
—
|
%
|
Total Industrial Gases – Asia Sales Change
|
6
|
%
|
|
|
Three Months Ended
|
|
|
|
|
||||||||
|
|
31 December
|
|
|
|
|
||||||||
|
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
||||||
Sales
|
|
$
|
147.9
|
|
|
$
|
104.3
|
|
|
$
|
43.6
|
|
|
42%
|
Operating income (loss)
|
|
8.2
|
|
|
(19.3
|
)
|
|
27.5
|
|
|
142%
|
|||
Adjusted EBITDA
|
|
10.5
|
|
|
(17.7
|
)
|
|
28.2
|
|
|
159%
|
|
|
Continuing Operations
|
|||||||||||||||||
|
|
Three Months Ended 31 December
|
|||||||||||||||||
2017 vs. 2016
|
|
Operating
Income
|
|
Operating
Margin
(A)
|
|
Income Tax
Provision (B) |
|
Net
Income
|
|
Diluted
EPS
|
|||||||||
2017 GAAP
|
|
$
|
328.1
|
|
|
17.4
|
%
|
|
$
|
78.4
|
|
|
$
|
251.6
|
|
|
$
|
1.15
|
|
2016 GAAP
|
|
372.5
|
|
|
20.0
|
%
|
|
96.4
|
|
|
280.9
|
|
|
1.29
|
|
||||
Change GAAP
|
|
$
|
(44.4
|
)
|
|
(260
|
)bp
|
|
$
|
(18.0
|
)
|
|
$
|
(29.3
|
)
|
|
$
|
(.14
|
)
|
% Change GAAP
|
|
(12
|
)%
|
|
|
|
|
|
(10
|
)%
|
|
(11
|
)%
|
||||||
2017 GAAP
|
|
$
|
328.1
|
|
|
17.4
|
%
|
|
$
|
78.4
|
|
|
$
|
251.6
|
|
|
$
|
1.15
|
|
Business separation costs
|
|
30.2
|
|
|
1.6
|
%
|
|
3.7
|
|
|
26.5
|
|
|
.12
|
|
||||
Tax costs associated with business separation
|
|
—
|
|
|
—
|
%
|
|
(2.7
|
)
|
|
2.7
|
|
|
.01
|
|
||||
Cost reduction and asset actions
|
|
50.0
|
|
|
2.7
|
%
|
|
8.8
|
|
|
41.2
|
|
|
.19
|
|
||||
2017 Non-GAAP Measure
|
|
$
|
408.3
|
|
|
21.7
|
%
|
|
$
|
88.2
|
|
|
$
|
322.0
|
|
|
$
|
1.47
|
|
2016 GAAP
|
|
$
|
372.5
|
|
|
20.0
|
%
|
|
$
|
96.4
|
|
|
$
|
280.9
|
|
|
$
|
1.29
|
|
Business separation costs
|
|
12.0
|
|
|
.6
|
%
|
|
—
|
|
|
12.0
|
|
|
.06
|
|
||||
2016 Non-GAAP Measure
|
|
$
|
384.5
|
|
|
20.6
|
%
|
|
$
|
96.4
|
|
|
$
|
292.9
|
|
|
$
|
1.35
|
|
Change Non-GAAP Measure
|
|
$
|
23.8
|
|
|
110
|
bp
|
|
$
|
(8.2
|
)
|
|
$
|
29.1
|
|
|
$
|
.12
|
|
% Change Non-GAAP Measure
|
|
6
|
%
|
|
|
|
|
|
10
|
%
|
|
9
|
%
|
(A)
|
Operating margin is calculated by dividing operating income by sales.
|
(B)
|
The tax impact of our non-GAAP adjustments reflects the expected current and deferred income tax expense impact of the transactions and is impacted primarily by the statutory tax rate of the various relevant jurisdictions and the taxability of the adjustments in those jurisdictions.
|
|
|
Three Months Ended
|
|||||
|
|
31 December
|
|||||
|
|
2016
|
2015
|
||||
Income from Continuing Operations
(A)
|
|
$
|
258.2
|
|
$
|
287.2
|
|
Add: Interest expense
|
|
29.5
|
|
22.2
|
|
||
Add: Income tax provision
|
|
78.4
|
|
96.4
|
|
||
Add: Depreciation and amortization
|
|
206.1
|
|
214.7
|
|
||
Add: Business separation costs
|
|
30.2
|
|
12.0
|
|
||
Add: Cost reduction and asset actions
|
|
50.0
|
|
—
|
|
||
Adjusted EBITDA
|
|
$
|
652.4
|
|
$
|
632.5
|
|
(A)
|
Includes net income attributable to noncontrolling interests.
|
|
Three Months Ended
|
||
2017 vs. 2016
|
31 December
|
||
Change GAAP
|
|
||
Income from continuing operations change
|
$
|
(29.0
|
)
|
Income from continuing operations % change
|
(10
|
)%
|
|
Change Non-GAAP
|
|
||
Adjusted EBITDA change
|
$
|
19.9
|
|
Adjusted EBITDA % change
|
3
|
%
|
|
Industrial
Gases– Americas |
Industrial
Gases– EMEA |
Industrial
Gases– Asia |
Industrial
Gases– Global |
Corporate
and other |
Segment
Total |
||||||||||||
GAAP MEASURE
|
|
|
|
|
|
|
||||||||||||
Three Months Ended 31 December 2016
|
||||||||||||||||||
Operating income (loss)
|
$
|
223.8
|
|
$
|
88.0
|
|
$
|
118.1
|
|
$
|
8.2
|
|
$
|
(29.8
|
)
|
$
|
408.3
|
|
Operating margin
|
25.9
|
%
|
22.0
|
%
|
26.9
|
%
|
|
|
21.7
|
%
|
||||||||
Three Months Ended 31 December 2015
|
||||||||||||||||||
Operating income (loss)
|
$
|
211.6
|
|
$
|
92.3
|
|
$
|
117.3
|
|
$
|
(19.3
|
)
|
$
|
(17.4
|
)
|
$
|
384.5
|
|
Operating margin
|
25.3
|
%
|
21.0
|
%
|
28.3
|
%
|
|
|
20.6
|
%
|
||||||||
Operating income (loss) change
|
$
|
12.2
|
|
$
|
(4.3
|
)
|
$
|
.8
|
|
$
|
27.5
|
|
$
|
(12.4
|
)
|
$
|
23.8
|
|
Operating income (loss) % change
|
6
|
%
|
(5
|
)%
|
1
|
%
|
142
|
%
|
(71
|
)%
|
6
|
%
|
||||||
Operating margin change
|
60
|
bp
|
100
|
bp
|
(140
|
) bp
|
|
|
110
|
bp
|
||||||||
NON-GAAP MEASURE
|
|
|
|
|
|
|
||||||||||||
Three Months Ended 31 December 2016
|
||||||||||||||||||
Operating income (loss)
|
$
|
223.8
|
|
$
|
88.0
|
|
$
|
118.1
|
|
$
|
8.2
|
|
$
|
(29.8
|
)
|
$
|
408.3
|
|
Add: Depreciation and amortization
|
111.8
|
|
42.2
|
|
46.7
|
|
2.0
|
|
3.4
|
|
206.1
|
|
||||||
Add: Equity affiliates' income
|
14.7
|
|
9.5
|
|
13.5
|
|
.3
|
|
—
|
|
38.0
|
|
||||||
Adjusted EBITDA
|
$
|
350.3
|
|
$
|
139.7
|
|
$
|
178.3
|
|
$
|
10.5
|
|
$
|
(26.4
|
)
|
$
|
652.4
|
|
Adjusted EBITDA margin
|
40.5
|
%
|
35.0
|
%
|
40.7
|
%
|
|
|
34.7
|
%
|
||||||||
Three Months Ended 31 December 2015
|
||||||||||||||||||
Operating income (loss)
|
$
|
211.6
|
|
$
|
92.3
|
|
$
|
117.3
|
|
$
|
(19.3
|
)
|
$
|
(17.4
|
)
|
$
|
384.5
|
|
Add: Depreciation and amortization
|
109.0
|
|
46.8
|
|
51.9
|
|
2.1
|
|
4.9
|
|
214.7
|
|
||||||
Add: Equity affiliates' income (loss)
|
14.5
|
|
7.6
|
|
11.7
|
|
(.5
|
)
|
—
|
|
33.3
|
|
||||||
Adjusted EBITDA
|
$
|
335.1
|
|
$
|
146.7
|
|
$
|
180.9
|
|
$
|
(17.7
|
)
|
$
|
(12.5
|
)
|
$
|
632.5
|
|
Adjusted EBITDA margin
|
40.1
|
%
|
33.4
|
%
|
43.6
|
%
|
|
|
33.9
|
%
|
||||||||
Adjusted EBITDA change
|
$
|
15.2
|
|
$
|
(7.0
|
)
|
$
|
(2.6
|
)
|
$
|
28.2
|
|
$
|
(13.9
|
)
|
$
|
19.9
|
|
Adjusted EBITDA % change
|
5
|
%
|
(5
|
)%
|
(1
|
)%
|
159
|
%
|
(111
|
)%
|
3
|
%
|
||||||
Adjusted EBITDA margin change
|
40
|
bp
|
160
|
bp
|
(290
|
) bp
|
|
|
80
|
bp
|
|
|
Three Months Ended
|
||||||
|
|
31 December
|
||||||
Operating Income
|
|
2016
|
|
2015
|
||||
Segment total
|
|
$
|
408.3
|
|
|
$
|
384.5
|
|
Business separation costs
|
|
(30.2
|
)
|
|
(12.0
|
)
|
||
Cost reduction and asset actions
|
|
(50.0
|
)
|
|
—
|
|
||
Consolidated Total
|
|
$
|
328.1
|
|
|
$
|
372.5
|
|
|
|
Effective Tax Rate
|
||||||
|
|
Three Months Ended
31 December |
||||||
|
|
2016
|
|
2015
|
||||
Income Tax Provision — GAAP
|
|
$
|
78.4
|
|
|
$
|
96.4
|
|
Income From Continuing Operations Before Taxes — GAAP
|
|
$
|
336.6
|
|
|
$
|
383.6
|
|
Effective Tax Rate — GAAP
|
|
23.3
|
%
|
|
25.1
|
%
|
||
Income Tax Provision — GAAP
|
|
$
|
78.4
|
|
|
$
|
96.4
|
|
Business separation costs
|
|
3.7
|
|
|
—
|
|
||
Tax costs associated with business separation
|
|
(2.7
|
)
|
|
—
|
|
||
Cost reduction and asset actions
|
|
8.8
|
|
|
—
|
|
||
Income Tax Provision — Non-GAAP Measure
|
|
$
|
88.2
|
|
|
$
|
96.4
|
|
Income From Continuing Operations Before Taxes — GAAP
|
|
$
|
336.6
|
|
|
$
|
383.6
|
|
Business separation costs
|
|
30.2
|
|
|
12.0
|
|
||
Cost reduction and asset actions
|
|
50.0
|
|
|
—
|
|
||
Income From Continuing Operations Before Taxes — Non-GAAP Measure
|
|
$
|
416.8
|
|
|
$
|
395.6
|
|
Effective Tax Rate — Non-GAAP Measure
|
|
21.2
|
%
|
|
24.4
|
%
|
|
|
Three Months Ended
|
||||
|
|
31 December
|
||||
|
|
2016
|
|
2015
|
||
Additions to plant and equipment
|
|
$239.2
|
|
$248.4
|
||
Acquisitions, less cash acquired
|
|
—
|
|
|
—
|
|
Investment in and advances to unconsolidated affiliates
|
|
8.8
|
|
|
(1.3
|
)
|
Capital expenditures on a GAAP basis
|
|
$248.0
|
|
$247.1
|
||
Capital lease expenditures
(A)
|
|
4.0
|
|
|
7.3
|
|
Capital expenditures on a Non-GAAP basis
|
|
$252.0
|
|
$254.4
|
(A)
|
We utilize a non-GAAP measure in the computation of capital expenditures and include spending associated with facilities accounted for as capital leases. 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, if the arrangement qualifies as a capital lease. The presentation of this non-GAAP measure is intended to enhance the usefulness of information by providing a measure that our management uses internally to evaluate and manage our expenditures.
|
10.1
|
Amendment No. 5 dated as of 9 June 2016, to the Revolving Credit Agreement dated as of 30 April 2013.
|
|
|
10.2
|
Air Products and Chemicals, Inc. Senior Management Severance Plan and Summary Plan Description effective 1 April 2016.
|
|
|
12.
|
Computation of Ratios of Earnings to Fixed Charges.
|
|
|
31.1
|
Certification by the Principal Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
31.2
|
Certification by the Principal Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
32.
|
Certification by the Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. †
|
|
|
101.INS
|
XBRL Instance Document
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema
|
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase
|
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase
|
|
Air Products and Chemicals, Inc.
|
|
|
(Registrant)
|
|
|
|
|
Date: January 27, 2017
|
By:
|
/s/ M. Scott Crocco
|
|
|
M. Scott Crocco
|
|
|
Executive Vice President and Chief Financial Officer
|
10.1
|
Form of Award Agreement under the Long-Term Incentive Plan of the Company for FY2017.
|
|
|
10.2
|
Form of Award Agreement under the Long-Term Incentive Plan of the Company for FY2017.
|
|
|
10.3
|
Amendment No. 2 to the Air Products and Chemicals, Inc. Retirement Savings Plan effective 3 January, 2017.
|
|
|
12.
|
Computation of Ratios of Earnings to Fixed Charges.
|
|
|
31.1
|
Certification by the Principal Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
31.2
|
Certification by the Principal Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
32.
|
Certification by the Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. †
|
|
|
101.INS
|
XBRL Instance Document
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema
|
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase
|
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase
|
1.
|
Restrictive Covenants
.
|
(a)
|
Definitions
. For purposes of this Paragraph 1, the following words shall have the following definitions.
|
(i)
|
“
Affiliate
” of a specified Person shall mean any Person which is under common control with the specified Person, or of which the specified Person is an executive officer, manager, trustee, executor or similar controlling Person.
|
(ii)
|
“
Company
” shall be deemed to include Air Products and Chemicals, Inc. and the subsidiaries and Affiliates of Air Products and Chemicals, Inc.
|
(iii)
|
“
Business of the Company
” means the production, manufacturing and distribution of industrial gases, including atmospheric and process gases; the designing and manufacturing of equipment for the production, processing, purification distribution or storage of gases or for natural gas liquefaction; and any other line of business conducted, developed or being developed by the Company during your employment with the Company, in each case, in which you are or were involved during the course of your employment with the Company or about which you possess Confidential Information.
|
(iv)
|
“
Confidential Information
” means any non-public, proprietary confidential or trade secret information of the Company and/or its customers, including but not limited to, business processes, know-how, practices, methods, plans, research, operations, services, strategies, techniques, formulae, manuals, data, notes, diagrams, customer or vendor information, pricing or cost information, product plans, designs, experimental processes and inventions.
|
(v)
|
“
Person
” means any natural person, corporation, general partnership, limited partnership, limited liability company or partnership, joint venture, proprietorship or other business organization.
|
(vi)
|
“
Provide Services
” means to directly or indirectly, own, manage, control, or participate in the ownership, management or control of, or be employed or engaged by, participate in, serve on the board of directors of, consult with, contribute to, hold a security interest in, render services for, give advice to, provide assistance to or be otherwise affiliated or associated with.
|
(vii)
|
“
Restricted Area
” means any country in which you worked during your employment with the Company, over which you had supervisory responsibility for the Business of the Company while employed by the Company, or with respect to which you have Confidential Information pertaining to the Business of the Company.
|
(b)
|
Acknowledgment
.
|
(i)
|
You acknowledge and agree that (A) the Business of the Company is intensely competitive and that your employment with the Company has required you to have access to, and knowledge of, Confidential Information, which is of vital importance to the success of the Business of the Company; (B) the use, disclosure or dissemination of any Confidential Information, except on behalf of the Company, could place the Company at a serious competitive disadvantage and could do serious damage, financial and otherwise, to the Business of the Company; and (C) the Company is engaged in business, and has customers, throughout the world.
|
(ii)
|
You further understand and acknowledge that the Company invests in customer relationships and as a result, has developed and will develop considerable goodwill with and among its customers. You agree that the restrictive covenants below are necessary to protect the Company’s legitimate business interests in its Confidential Information and goodwill, and that the Company would not have provided the good and valuable consideration set forth in this Award Agreement in absence of such restrictions. You further understand and acknowledge that the Company will be irreparably harmed if you violate the restrictive covenants below.
|
(c)
|
Confidential Information
.
|
(i)
|
You hereby expressly acknowledge and agree that the obligations in this Award Agreement are in addition to, and shall not supersede, obligations you may have pursuant to other agreements with the Company, including, without limitation, your obligations under your Employee Patent and Confidential Information Agreement entered at the time you were employed by the Company, which shall continue to apply in accordance with its terms.
|
(ii)
|
You agree that you have and will at all times hereafter, (A) treat all Confidential Information as strictly confidential; and (B) not directly or indirectly disclose, publish, communicate or make available Confidential Information, or allow it to be disclosed, published, communicated, or made available, in whole or part, to any Person who is not authorized by the Company to know such Confidential Information in the furtherance of the Company’s business.
|
(d)
|
Non-Disparagement
. You agree not to directly or indirectly make, or cause to be made, any statement, observation or opinion that disparages or impugns the business or reputation of the Company, its products, services, agents or employees.
|
(e)
|
Permitted Disclosures
. Pursuant to 18 U.S.C. § 1833(b), you understand that you will not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret of the Company that (i) is made (A) in confidence to a Federal, State, or local government official, either directly or indirectly, or to your attorney and (B) solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding. You understand that if you file a lawsuit for retaliation by the Company for reporting a suspected violation of law, you may disclose the trade secret to your attorney and use the trade secret information in the court proceeding if you (I) file any document containing the trade secret under seal, and (II) do not disclose the trade secret, except pursuant to court order. Nothing in this Award Agreement, or any other agreement you have with the Company, is intended to conflict with 18 U.S.C. § 1833(b) or create liability for disclosures of trade secrets that are expressly allowed by such section. Further, nothing in this Award Agreement or any other agreement you have with the Company shall prohibit or restrict you from making any disclosure of information or documents to any governmental agency or legislative body, or any self-regulatory organization, in each case, without advance notice to the Company.
|
(f)
|
Return of Company Property
. You represent that upon request from the Company at any time and, without request, upon termination of your employment with the Company for any reason, you will deliver to the Company all memoranda, notes, records, manuals, or other documents, including all electronic or other copies of such materials and all documentation prepared or produced in connection therewith, containing Confidential Information, which is in your possession, custody and control, whether made or compiled by you or furnished to you by virtue of your employment with the Company. You further represents that you
|
(g)
|
Notice
. You agree that during your employment with the Company and for one year after your employment with the Company terminates for any reason, you will give the Company ten (10) business days’ written notice of your intention to Provide Services to any other Person that engages in or is preparing to engage in the Business of the Company within the Restricted Area. Such written notice must provide sufficiently detailed information so as to allow the Company to determine if you will be in breach of this Award Agreement if you Provide Services to such other Person.
|
(h)
|
Non-Competition
. During your employment by the Company and for one year after your employment with the Company terminates for any reason, you agree that you will not Provide Services to any Person, other than the Company, that engages in or is preparing to engage in the Business of the Company within the Restricted Area, unless (i) such other Person also engages in lines of business that are separate, distinct and divisible from the Business of the Company, (ii) you do not Provide Services, Confidential Information or strategy to the Business of the Company conducted by such other Person, and (iii) you do not attend meetings where the Business of the Company of such other Person is discussed or where you could, even inadvertently, disclose Confidential Information. Your passive ownership of not more than one percent (1%) of the capital stock or other ownership or equity interest, or voting power, in a public company, registered under the Securities Exchange Act of 1934, as amended, shall not be deemed to be a violation of this paragraph.
|
(i)
|
Non-Solicitation; Non-Interference
. During your employment by the Company and for one (1) year after your last day of employment with the Company, you also agree that you will not, directly or indirectly without the prior written consent of the Company:
|
(i)
|
encourage, persuade, induce, or attempt to encourage or persuade or induce, any person who is an employee at the grade level of 118 or above, an officer, or a director of the Company, in each case, to terminate such relationship with the Company; or hire or engage, participate in the hiring or engagement of, or solicit or make an offer of employment or engagement to any employee at the grade level of 118 or above, officer or director of the Company who was employed or engaged by the Company as of your last day of employment with the Company.
|
(ii)
|
on behalf of any Person engaged in the Business of the Company (other than the Company) solicit, contact, or attempt to solicit or contact any current, former or prospective customer of the Company whom you had contacted within the twenty-four (24) months prior to your last day of employment with the Company or about whom you have any Confidential Information.
|
(iii)
|
encourage or persuade, or attempt to encourage or persuade any (A) customer of the Company, (B) potential customer of the Company during the last twenty-four (24) months of your employment with the Company with which or with whom you knew to be such a potential customer, or (C) prior customer of the Company, in each case, not to do business with the Company or to reduce the amount of business it is doing or might do in the future with or through the Company.
|
(j)
|
Tolling
. If you violate any of the terms of the restrictive covenant obligations articulated herein, the obligation at issue will run from the first date on which you cease to be in violation of such obligation.
|
(k)
|
Successors and Assigns
. This Paragraph 1 shall inure to the benefit of the successors and assigns of the Company and therefore the Company may assign this Paragraph 1, without your consent to, including but not limited to, any of its subsidiaries or affiliates or to any successor (whether by merger, purchase, bankruptcy, reorganization or otherwise) to all or substantially all of the equity, assets or businesses of the Company.
|
2.
|
Interpretation
. All determinations regarding the interpretation, construction, enforcement, waiver, or modification of this Award Agreement and/or the Plan shall be made in the Company’s sole discretion and shall be final and binding on you and the Company. Determinations made under this Award Agreement and the Plan need not be uniform and may be made selectively among individuals, whether or not such individuals are similarly situated.
|
3.
|
Conflict
. If any of the terms of this Award Agreement in the opinion of the Company conflict or are inconsistent with any applicable law or regulation of any governmental agency having jurisdiction, the Company reserves the right to modify this Award Agreement to be consistent with applicable laws or regulations.
|
4.
|
Personal Data
. You understand and acknowledge that the Company holds certain personal information about you, including but not limited to your name, home address, telephone number, date of birth, social security number, salary, nationality, job title, and details of all Shares awarded, cancelled, vested, unvested, or outstanding (the “personal data”). Certain personal data may also constitute “sensitive personal data” within the meaning of applicable local law. Such data include but are not limited to the information provided above and any changes thereto and other appropriate personal and financial data about you. You hereby provide explicit consent to the Company and any Subsidiary to process any such personal data and sensitive personal data. You also hereby provide explicit consent to the Company and any Subsidiary to transfer any such personal data and sensitive personal data outside the country in which you are employed, and to the United States. The legal persons for whom such personal data are intended are the Company and any third party providing services to the Company in connection with the administration of the Plan.
|
5.
|
Plan Documents
. By accepting this award, you acknowledge having received and read the Plan Prospectus, and you consent to receiving information and materials in connection with this Award or any subsequent awards under the Company’s long-term performance plans, including without limitation any prospectuses and plan documents, by any means of electronic delivery available now and/or in the future (including without limitation by e-mail, by Website access, and/or by facsimile), such consent to remain in effect unless and until revoked in writing by you. This Award Agreement and the Plan, which is incorporated herein by reference, constitute the entire agreement between you and the Company regarding the terms and conditions of this Award.
|
6.
|
Jurisdiction; Governing Law
. The parties agree that upon any violation of this Award Agreement, suit may be brought, and the parties consent to personal jurisdiction, in the United States District Court for the Eastern District of Pennsylvania, or in any court of general jurisdiction in Allentown, Pennsylvania; the parties consent to the non-exclusive jurisdiction of any such court in any such suit, action or proceeding; and waive any objection which either party may have to the laying of venue of any such suit, action or proceeding in any such court. This Award Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania without reference to its principles of conflict of law. The parties also irrevocably and unconditionally consents to the service of any process, pleadings, notices, or other papers with respect thereto. EACH PARTY HERETO IRREVOCABLY AGREES TO WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM, OR COUNTERCLAIM BROUGHT BY OR ON BEHALF OF ANY PARTY RELATED TO OR ARISING OUT OF THIS AWARD AGREEMENT.
|
7.
|
Modification; Severability
. If any court of competent jurisdiction finds any provision of this Award Agreement, and particularly the covenants set forth in Paragraph 1, or portion thereof, to not be fully enforceable, it is the intention and desire of the parties that the provision be fully enforced to the extent the court finds them enforceable and, if necessary, that the court modify any provisions of this Award Agreement to the extent deemed necessary by the court to render them reasonable and enforceable and that the court enforce them to such extent. To the extent that such provisions cannot be modified, it is the intention of the parties that the provisions be severable and that the invalidity of any one or more provisions of this Award Agreement shall not affect the legality, validity and enforceability of the remaining provisions of this Award Agreement. If Paragraph 1 is unenforceable in its entirety, then this Award Agreement shall be considered null and void
ab initio
.
|
8.
|
Waiver
. The failure of the Company to enforce any terms, provisions or covenants of this Exhibit shall not be construed as a waiver of the same or of the right of the Company to enforce the same. Waiver by the Company of any breach or default by you of any term or provision of this Exhibit shall not operate as a waiver of any other breach or default.
|
9.
|
No Contract
. Neither your FY2017 Restricted Stock Unit Awards, this Award Agreement, nor the Plan constitute a contract of employment; nor do they guarantee your continued employment for any period required for all or any of your Awards to vest or become exercisable.
|
1.
|
Restrictive Covenants
.
|
(a)
|
Definitions
. For purposes of this Paragraph 1, the following words shall have the following definitions.
|
(i)
|
“
Affiliate
” of a specified Person shall mean any Person which is under common control with the specified Person, or of which the specified Person is an executive officer, manager, trustee, executor or similar controlling Person.
|
(ii)
|
“
Company
” shall be deemed to include Air Products and Chemicals, Inc. and the subsidiaries and Affiliates of Air Products and Chemicals, Inc.
|
(iii)
|
“
Business of the Company
” means the production, manufacturing and distribution of industrial gases, including atmospheric and process gases; the designing and manufacturing of equipment for the production, processing, purification distribution or storage of gases or for natural gas liquefaction; and any other line of business conducted, developed or being developed by the Company during your employment with the Company, in each case, in which you are or were involved during the course of your employment with the Company or about which you possess Confidential Information.
|
(iv)
|
“
Confidential Information
” means any non-public, proprietary confidential or trade secret information of the Company and/or its customers, including but not limited to, business processes, know-how, practices, methods, plans, research, operations, services, strategies, techniques, formulae, manuals, data, notes, diagrams, customer or vendor information, pricing or cost information, product plans, designs, experimental processes and inventions.
|
(v)
|
“
Person
” means any natural person, corporation, general partnership, limited partnership, limited liability company or partnership, joint venture, proprietorship or other business organization.
|
(vi)
|
“
Provide Services
” means to directly or indirectly, own, manage, control, or participate in the ownership, management or control of, or be employed or engaged by, participate in, serve on the board of directors of, consult with, contribute to, hold a security interest in, render services for, give advice to, provide assistance to or be otherwise affiliated or associated with.
|
(vii)
|
“
Restricted Area
” means any country in which you worked during your employment with the Company, over which you had supervisory responsibility for the Business of the Company while employed by the Company, or with respect to which you have Confidential Information pertaining to the Business of the Company.
|
(b)
|
Acknowledgment
.
|
(i)
|
You acknowledge and agree that (A) the Business of the Company is intensely competitive and that your employment with the Company has required you to have access to, and knowledge of, Confidential Information, which is of vital importance to the success of the Business of the Company; (B) the use, disclosure or dissemination of any Confidential Information, except on behalf of the Company, could place the Company at a serious competitive disadvantage and could do serious damage, financial and otherwise, to the Business of the Company; and (C) the Company is engaged in business, and has customers, throughout the world.
|
(ii)
|
You further understand and acknowledge that the Company invests in customer relationships and as a result, has developed and will develop considerable goodwill with and among its customers. You agree that the restrictive covenants below are necessary to protect the Company’s legitimate business interests in its Confidential Information and goodwill, and that the Company would not have provided the good and valuable consideration set forth in this Award Agreement in absence of such restrictions. You further understand and acknowledge that the Company will be irreparably harmed if you violate the restrictive covenants below.
|
(c)
|
Confidential Information
.
|
(i)
|
You hereby expressly acknowledge and agree that the obligations in this Award Agreement are in addition to, and shall not supersede, the obligations you may have pursuant to other agreements with the Company, including, without limitation, your obligations under your Employee Patent and Confidential Information Agreement, entered when you were employed by the Company, which shall continue to apply in accordance with its terms.
|
(ii)
|
You agree that you have and will at all times hereafter, (A) treat all Confidential Information as strictly confidential; and (B) not directly or indirectly disclose, publish, communicate or make available Confidential Information, or allow it to be disclosed, published, communicated, or made available, in whole or part, to any Person who is not authorized by the Company to know such Confidential Information in the furtherance of the Company’s business.
|
(d)
|
Non-Disparagement
. You agree not to directly or indirectly make, or cause to be made, any statement, observation or opinion that disparages or impugns the business or reputation of the Company, its products, services, agents or employees.
|
(e)
|
Permitted Disclosures
. Pursuant to 18 U.S.C. § 1833(b), you understand that you will not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret of the Company that (i) is made (A) in confidence to a Federal, State, or local government official, either directly or indirectly, or to your attorney and (B) solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding. You understand that if you file a lawsuit for retaliation by the Company for reporting a suspected violation of law, you may disclose the trade secret to your attorney and use the trade secret information in the court proceeding if you (I) file any document containing the trade secret under seal, and (II) do not disclose the trade secret, except pursuant to court order. Nothing in this Award Agreement, or any other agreement you have with the Company, is intended to conflict with 18 U.S.C. § 1833(b) or create liability for disclosures of trade secrets that are expressly allowed by such section. Further, nothing in this Award Agreement or any other agreement you have with the Company shall prohibit or restrict you from making any disclosure of information or documents to any governmental agency or legislative body, or any self-regulatory organization, in each case, without advance notice to the Company.
|
(f)
|
Return of Company Property
. You represent that upon request from the Company at any time and, without request, upon termination of your employment with the Company for any reason, you will deliver to the Company all memoranda, notes, records, manuals, or other documents, including all electronic or other copies of such materials and all documentation prepared or produced in connection therewith, containing Confidential Information, which is in your possession, custody and control, whether made or compiled by you or furnished to you by virtue of your employment with the Company. You further represents that you
|
(g)
|
Notice
. You agree that during your employment with the Company and for one year after your employment with the Company terminates for any reason, you will give the Company ten (10) business days’ written notice of your intention to Provide Services to any other Person that engages in or is preparing to engage in the Business of the Company within the Restricted Area. Such written notice must provide sufficiently detailed information so as to allow the Company to determine if you will be in breach of this Award Agreement if you Provide Services to such other Person.
|
(h)
|
Non-Competition
. During your employment by the Company and for one year after your employment with the Company terminates for any reason, you agree that you will not Provide Services to any Person, other than the Company, that engages in or is preparing to engage in the Business of the Company within the Restricted Area, unless (i) such other Person also engages in lines of business that are separate, distinct and divisible from the Business of the Company, (ii) you do not Provide Services, Confidential Information or strategy to the Business of the Company conducted by such other Person, and (iii) you do not attend meetings where the Business of the Company conducted by such other Person is discussed or where you could, even inadvertently, disclose Confidential Information. Your passive ownership of not more than one percent (1%) of the capital stock or other ownership or equity interest, or voting power, in a public company, registered under the Securities Exchange Act of 1934, as amended, shall not be deemed to be a violation of this paragraph.
|
(i)
|
Non-Solicitation; Non-Interference
. During your employment by the Company and for one (1) year after your last day of employment with the Company, you also agree that you will not, directly or indirectly without the prior written consent of the Company:
|
(i)
|
encourage, persuade, induce, or attempt to encourage or persuade or induce, any person who is an employee at the grade level of 118 or above, an officer, or a director of the Company, in each case, to terminate such relationship with the Company; or hire or engage, participate in the hiring or engagement of, or solicit or make an offer of employment or engagement to any employee at the grade level of 118 or above, officer or director of the Company who was employed or engaged by the Company as of your last day of employment with the Company.
|
(ii)
|
on behalf of any Person engaged in the Business of the Company (other than the Company) solicit, contact, or attempt to solicit or contact any current, former or prospective customer of the Company whom you had contacted within the twenty-four (24) months prior to your last day of employment with the Company or about whom you have any Confidential Information.
|
(iii)
|
encourage or persuade, or attempt to encourage or persuade any (A) customer of the Company, (B) potential customer of the Company during the last twenty-four (24) months of your employment with the Company with which or with whom you knew to be such a potential customer, or (C) prior customer of the Company, in each case, not to do business with the Company or to reduce the amount of business it is doing or might do in the future with or through the Company.
|
(j)
|
Tolling
. If you violate any of the terms of the restrictive covenant obligations articulated herein, the obligation at issue will run from the first date on which you cease to be in violation of such obligation.
|
(k)
|
Successors and Assigns
. This Paragraph 1 shall inure to the benefit of the successors and assigns of the Company and therefore the Company may assign this Paragraph 1, without your consent to, including but not limited to, any of its subsidiaries or affiliates or to any successor (whether by merger, purchase, bankruptcy, reorganization or otherwise) to all or substantially all of the equity, assets or businesses of the Company.
|
2.
|
Interpretation
. All determinations regarding the interpretation, construction, enforcement, waiver, or modification of this Award Agreement and/or the Plan shall be made in the Company’s sole discretion and shall be final and binding on you and the Company. Determinations made under this Award Agreement and the Plan need not be uniform and may be made selectively among individuals, whether or not such individuals are similarly situated.
|
3.
|
Conflict
. If any of the terms of this Award Agreement in the opinion of the Company conflict or are inconsistent with any applicable law or regulation of any governmental agency having jurisdiction, the Company reserves the right to modify this Award Agreement to be consistent with applicable laws or regulations.
|
4.
|
Personal Data
. You understand and acknowledge that the Company holds certain personal information about you, including but not limited to your name, home address, telephone number, date of birth, social security number, salary, nationality, job title, and details of all Shares awarded, cancelled, vested, unvested, or outstanding (the “personal data”). Certain personal data may also constitute “sensitive personal data” within the meaning of applicable local law. Such data include but are not limited to the information provided above and any changes thereto and other appropriate personal and financial data about you. You hereby provide explicit consent to the Company and any Subsidiary to process any such personal data and sensitive personal data. You also hereby provide explicit consent to the Company and any Subsidiary to transfer any such personal data and sensitive personal data outside the country in which you are employed, and to the United States. The legal persons for whom such personal data are intended are the Company and any third party providing services to the Company in connection with the administration of the Plan.
|
5.
|
Plan Documents
. By accepting this award, you acknowledge having received and read the Plan Prospectus, and you consent to receiving information and materials in connection with this Award or any subsequent awards under the Company’s long-term performance plans, including without limitation any prospectuses and plan documents, by any means of electronic delivery available now and/or in the future (including without limitation by e-mail, by Website access, and/or by facsimile), such consent to remain in effect unless and until revoked in writing by you. This Award Agreement and the Plan, which is incorporated herein by reference, constitute the entire agreement between you and the Company regarding the terms and conditions of this Award.
|
6.
|
Jurisdiction; Governing Law
. The parties agree that upon any violation of this Award Agreement, suit may be brought, and the parties consent to personal jurisdiction, in the United States District Court for the Eastern District of Pennsylvania, or in any court of general jurisdiction in Allentown, Pennsylvania; the parties consent to the non-exclusive jurisdiction of any such court in any such suit, action or proceeding; and waive any objection which either party may have to the laying of venue of any such suit, action or proceeding in any such court. This Award Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania without reference to its principles of conflict of law. The parties also irrevocably and unconditionally consents to the service of any process, pleadings, notices, or other papers with respect thereto. EACH PARTY HERETO IRREVOCABLY AGREES TO WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM, OR COUNTERCLAIM BROUGHT BY OR ON BEHALF OF ANY PARTY RELATED TO OR ARISING OUT OF THIS AGREEMENT.
|
7.
|
Modification; Severability
. If any court of competent jurisdiction finds any provision of this Award Agreement, and particularly the covenants set forth in Paragraph 1, or portion thereof, to not be fully enforceable, it is the intention and desire of the parties that the provision be fully enforced to the extent the court finds them enforceable and, if necessary, that the court modify any provisions of this Award Agreement to the extent deemed necessary by the court to render them reasonable and enforceable and that the court enforce them to such extent. To the extent that such provisions cannot be modified, it is the intention of the parties that the provisions be severable and that the invalidity of any one or more provisions of this Award Agreement shall not affect the legality, validity and enforceability of the remaining provisions of this Award Agreement. If Paragraph 1 is unenforceable in its entirety, then this Award Agreement shall be considered null and void
ab initio
.
|
8.
|
Waiver
. The failure of the Company to enforce any terms, provisions or covenants of this Exhibit shall not be construed as a waiver of the same or of the right of the Company to enforce the same. Waiver by the Company of any breach or default by you of any term or provision of this Exhibit shall not operate as a waiver of any other breach or default.
|
9.
|
No Contract
. Neither your FY2017 Performance Share Awards, this Award Agreement, nor the Plan constitute a contract of employment; nor do they guarantee your continued employment for any period required for all or any of your Awards to vest or become exercisable.
|
1.
|
Performance Shares Earned. For the avoidance of doubt, capitalized terms that are otherwise not defined in this Addendum will have the same definition as in the Award Agreement. The number of Performance Shares earned will be determined in accordance with the following formula:
|
2.
|
Payout Factor. The Payout Factor is based on the Company’s TSR Percentile Rank among the Peer Group for the Performance Period. The Initial Payout Factor is determined in accordance with the following schedule:
|
3.
|
Definitions.
|
Celanese Corp.
|
Ingersoll-Rand, Plc
|
Danaher Corp.
|
Illinois Tool Works, Inc.
|
Dover Corp.
|
Parker-Hannifin Corp.
|
DuPont (E.I.) De Nemours & Co.
|
PPG Industries Inc.
|
Eastman Chemical Co.
|
Praxair, Inc.
|
Eaton Corp.
|
Rockwell Automation, Inc.
|
Ecolab Inc.
|
TE Connectivity, Ltd.
|
Huntsman Corp.
|
|
4.
|
TSR Percentile Rank. The TSR Percentile Rank will be determined as follows:
|
(N-n)
|
(
N
-1)
|
1.
|
Schedule I is amended as attached hereto.
|
2.
|
A new paragraph is added to the end of Section 3.05(a) to read as follows:
|
3.
|
In all other respects the Plan shall remain in full force and effect.
|
Name of Affiliated Company
|
Participating Employer Since Date
|
Revocation Date
|
ProCal
|
2 March 2015
|
N/A
|
Air Products Energy Enterprising, Inc.
|
Continuing
|
N/A
|
Air Products Helium, Inc.
|
Continuing
|
N/A
|
Air Products Manufacturing Co., Inc.
|
Continuing
|
N/A
|
Air Products LLC
|
1 June 2007
|
N/A
|
Air Products Performance Manufacturing, Inc. (formerly known as “Tomah Products, Inc.” and “Tomah Reserve, Inc.”)
|
1 April 2006
|
The Later of January 3, 2017 or the Closing
|
Versum Materials US, LLC
|
1 August 2016
|
1 October 2016
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
||||||||||
|
|
31 December
|
|
Year Ended 30 September
|
||||||||||||||||
(Millions of dollars, except ratios)
|
|
2016
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Earnings:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from continuing operations
(1)
|
|
$
|
258.2
|
|
|
$
|
1,122.0
|
|
|
$
|
965.9
|
|
|
$
|
691.0
|
|
|
$
|
854.0
|
|
Add (deduct):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Provision for income taxes
|
|
78.4
|
|
|
432.6
|
|
|
300.2
|
|
|
258.1
|
|
|
321.1
|
|
|||||
Fixed charges, excluding capitalized interest
|
|
33.1
|
|
|
123.6
|
|
|
117.6
|
|
|
140.7
|
|
|
156.3
|
|
|||||
Capitalized interest amortized during the period
|
|
2.4
|
|
|
9.7
|
|
|
9.8
|
|
|
8.7
|
|
|
9.8
|
|
|||||
Undistributed earnings of equity investees
|
|
(6.9
|
)
|
|
(51.1
|
)
|
|
(101.8
|
)
|
|
(74.9
|
)
|
|
(57.1
|
)
|
|||||
Noncontrolling interest in pre-tax income of subsidiaries that have not incurred fixed charges
|
|
(0.8
|
)
|
|
(2.6
|
)
|
|
(3.0
|
)
|
|
(2.8
|
)
|
|
—
|
|
|||||
Earnings, as adjusted
|
|
$
|
364.4
|
|
|
$
|
1,634.2
|
|
|
$
|
1,288.7
|
|
|
$
|
1,020.8
|
|
|
$
|
1,284.1
|
|
Fixed Charges:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest on indebtedness, including capital lease obligations
|
|
$
|
28.1
|
|
|
$
|
105.8
|
|
|
$
|
94.6
|
|
|
$
|
120.1
|
|
|
$
|
136.7
|
|
Capitalized interest
|
|
6.3
|
|
|
32.7
|
|
|
49.1
|
|
|
33.0
|
|
|
26.0
|
|
|||||
Amortization of debt discount/premium and expense
|
|
1.4
|
|
|
3.6
|
|
|
8.2
|
|
|
3.9
|
|
|
2.1
|
|
|||||
Portion of rents under operating leases representative of the interest factor
|
|
3.6
|
|
|
14.2
|
|
|
14.8
|
|
|
16.7
|
|
|
17.5
|
|
|||||
Fixed charges
(2)
|
|
$
|
39.4
|
|
|
$
|
156.3
|
|
|
$
|
166.7
|
|
|
$
|
173.7
|
|
|
$
|
182.3
|
|
Ratio of Earnings to Fixed Charges
(3)
|
|
9.2
|
|
|
10.5
|
|
|
7.7
|
|
|
5.9
|
|
|
7.0
|
|
(1)
|
Income from continuing operations includes income attributable to noncontrolling interests as well as business restructuring and cost reduction actions of $50.0 ($41.2 after-tax) in 2017, $34.5 ($24.7 after-tax) in 2016, $180.1 ($132.9 after-tax) in 2015, $98.3 ($67.0 after-tax) in 2013, business separation costs of $30.2 ($26.5 after-tax) in 2017 and $50.6 ($46.7 after-tax) in 2016, and a goodwill and intangible asset impairment charge of $310.1 ($308.8 after-tax) in 2014.
|
(2)
|
We are party to certain debt guarantees of equity affiliates. Since we have not been required to satisfy the guarantees, nor is it probable that we will, interest expense related to the guaranteed debt is not included in fixed charges.
|
(3)
|
The ratio of earnings to fixed charges is determined by dividing earnings, as adjusted, by fixed charges. Fixed charges consist of interest on all indebtedness plus that portion of operating lease rentals representative of the interest factor (deemed to be 21% of operating lease rentals).
|
/s/ Seifi Ghasemi
|
Seifi Ghasemi
|
Chairman, President and Chief Executive Officer
|
/s/ M. Scott Crocco
|
M. Scott Crocco
|
Executive Vice President and Chief Financial Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: January 27, 2017
|
|
/s/ Seifi Ghasemi
|
|
|
Seifi Ghasemi
|
|
|
Chairman, President and Chief Executive Officer
|
|
|
|
|
|
/s/ M. Scott Crocco
|
|
|
M. Scott Crocco
|
|
|
Chief Financial Officer
|