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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|
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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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Emerging
growth company
¨
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(Do not check if a smaller reporting company)
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|
|
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Class
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Outstanding at 31 March 2017
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Common Stock, $1 par value
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217,724,491
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Page No.
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||
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|
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Three Months Ended
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Six Months Ended
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||||||||||
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31 March
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31 March
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||||||||||
(Millions of dollars, except for share data)
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2017
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2016
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2017
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2016
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||||||||
Sales
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$
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1,980.1
|
|
$
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1,777.4
|
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$
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3,862.6
|
|
$
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3,643.7
|
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Cost of sales
|
1,403.8
|
|
1,213.0
|
|
2,721.9
|
|
2,508.9
|
|
||||
Selling and administrative
|
177.9
|
|
167.8
|
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343.6
|
|
341.7
|
|
||||
Research and development
|
14.8
|
|
18.2
|
|
29.9
|
|
35.1
|
|
||||
Business separation costs
|
—
|
|
7.4
|
|
30.2
|
|
19.4
|
|
||||
Cost reduction and asset actions
|
10.3
|
|
10.7
|
|
60.3
|
|
10.7
|
|
||||
Pension settlement loss
|
4.1
|
|
2.0
|
|
4.1
|
|
2.0
|
|
||||
Other income (expense), net
|
22.0
|
|
13.3
|
|
46.7
|
|
18.2
|
|
||||
Operating Income
|
391.2
|
|
371.6
|
|
719.3
|
|
744.1
|
|
||||
Equity affiliates’ income
|
34.2
|
|
32.3
|
|
72.2
|
|
65.6
|
|
||||
Interest expense
|
30.5
|
|
25.7
|
|
60.0
|
|
47.9
|
|
||||
Other non-operating income (expense), net
|
9.7
|
|
—
|
|
9.7
|
|
—
|
|
||||
Income From Continuing Operations Before Taxes
|
404.6
|
|
378.2
|
|
741.2
|
|
761.8
|
|
||||
Income tax provision
|
94.5
|
|
93.5
|
|
172.9
|
|
189.9
|
|
||||
Income from Continuing Operations
|
310.1
|
|
284.7
|
|
568.3
|
|
571.9
|
|
||||
Income (Loss) From Discontinued Operations, net of tax
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1,825.6
|
|
(750.2
|
)
|
1,873.8
|
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(665.4
|
)
|
||||
Net Income (Loss)
|
2,135.7
|
|
(465.5
|
)
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2,442.1
|
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(93.5
|
)
|
||||
Net Income Attributable to Noncontrolling Interests of Continuing Operations
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5.7
|
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5.8
|
|
12.3
|
|
12.1
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|
||||
Net Income Attributable to Noncontrolling Interests of Discontinued Operations
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—
|
|
2.0
|
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—
|
|
4.1
|
|
||||
Net Income (Loss) Attributable to Air Products
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$
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2,130.0
|
|
$
|
(473.3
|
)
|
$
|
2,429.8
|
|
$
|
(109.7
|
)
|
Net Income Attributable to Air Products
|
|
|
|
|
||||||||
Income from continuing operations
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$
|
304.4
|
|
$
|
278.9
|
|
$
|
556.0
|
|
$
|
559.8
|
|
Income (Loss) from discontinued operations
|
1,825.6
|
|
(752.2
|
)
|
1,873.8
|
|
(669.5
|
)
|
||||
Net Income (Loss) Attributable to Air Products
|
$
|
2,130.0
|
|
$
|
(473.3
|
)
|
$
|
2,429.8
|
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$
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(109.7
|
)
|
Basic Earnings Per Common Share Attributable to Air Products
|
|
|
|
|
||||||||
Income from continuing operations
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$
|
1.40
|
|
$
|
1.29
|
|
$
|
2.55
|
|
$
|
2.59
|
|
Income (Loss) from discontinued operations
|
8.38
|
|
(3.48
|
)
|
8.61
|
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(3.10
|
)
|
||||
Net Income (Loss) Attributable to Air Products
|
$
|
9.78
|
|
$
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(2.19
|
)
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$
|
11.16
|
|
$
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(.51
|
)
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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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$
|
1.39
|
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$
|
1.28
|
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$
|
2.53
|
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$
|
2.57
|
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Income (Loss) from discontinued operations
|
8.31
|
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(3.45
|
)
|
8.53
|
|
(3.08
|
)
|
||||
Net Income (Loss) Attributable to Air Products
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$
|
9.70
|
|
$
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(2.17
|
)
|
$
|
11.06
|
|
$
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(.51
|
)
|
Weighted Average Common Shares – Basic
(in millions)
|
217.9
|
|
216.1
|
|
217.8
|
|
215.9
|
|
||||
Weighted Average Common Shares – Diluted
(in millions)
|
219.7
|
|
217.9
|
|
219.6
|
|
217.8
|
|
||||
Dividends Declared Per Common Share – Cash
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$
|
.95
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$
|
.86
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$
|
1.81
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$
|
1.67
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Three Months Ended
|
||||||
|
|
31 March
|
||||||
(Millions of dollars)
|
|
2017
|
|
2016
|
||||
Net Income (Loss)
|
|
$
|
2,135.7
|
|
|
$
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(465.5
|
)
|
Other Comprehensive Income, net of tax:
|
|
|
|
|
||||
Translation adjustments, net of tax of ($8.0) and ($19.1)
|
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149.6
|
|
|
139.9
|
|
||
Net gain (loss) on derivatives, net of tax of ($5.7) and $10.2
|
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(15.4
|
)
|
|
12.8
|
|
||
Pension and postretirement benefits, net of tax of $1.2
|
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3.8
|
|
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—
|
|
||
Reclassification adjustments:
|
|
|
|
|
||||
Currency translation adjustment
|
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49.1
|
|
|
.4
|
|
||
Derivatives, net of tax of $2.7 and ($0.5)
|
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5.8
|
|
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(11.1
|
)
|
||
Pension and postretirement benefits, net of tax of $13.7 and $11.3
|
|
30.1
|
|
|
22.7
|
|
||
Total Other Comprehensive Income
|
|
223.0
|
|
|
164.7
|
|
||
Comprehensive Income (Loss)
|
|
2,358.7
|
|
|
(300.8
|
)
|
||
Net Income Attributable to Noncontrolling Interests
|
|
5.7
|
|
|
7.8
|
|
||
Other Comprehensive Income Attributable to Noncontrolling Interests
|
|
5.0
|
|
|
2.8
|
|
||
Comprehensive Income (Loss) Attributable to Air Products
|
|
$
|
2,348.0
|
|
|
$
|
(311.4
|
)
|
|
|
|
|
|
||||
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|
Six Months Ended
|
||||||
|
|
31 March
|
||||||
(Millions of dollars)
|
|
2017
|
|
2016
|
||||
Net Income (Loss)
|
|
$
|
2,442.1
|
|
|
$
|
(93.5
|
)
|
Other Comprehensive Income (Loss), net of tax:
|
|
|
|
|
||||
Translation adjustments, net of tax of $24.3 and ($25.8)
|
|
(131.6
|
)
|
|
37.0
|
|
||
Net gain (loss) on derivatives, net of tax of ($16.4) and $15.0
|
|
(25.2
|
)
|
|
28.8
|
|
||
Pension and postretirement benefits, net of tax of $1.2
|
|
3.8
|
|
|
—
|
|
||
Reclassification adjustments:
|
|
|
|
|
||||
Currency translation adjustment
|
|
49.1
|
|
|
2.8
|
|
||
Derivatives, net of tax of $13.3 and ($8.5)
|
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31.4
|
|
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(30.4
|
)
|
||
Pension and postretirement benefits, net of tax of $26.6 and $21.4
|
|
57.5
|
|
|
43.8
|
|
||
Total Other Comprehensive Income (Loss)
|
|
(15.0
|
)
|
|
82.0
|
|
||
Comprehensive Income (Loss)
|
|
2,427.1
|
|
|
(11.5
|
)
|
||
Net Income Attributable to Noncontrolling Interests
|
|
12.3
|
|
|
16.2
|
|
||
Other Comprehensive Income Attributable to Noncontrolling Interests
|
|
1.9
|
|
|
2.8
|
|
||
Comprehensive Income (Loss) Attributable to Air Products
|
|
$
|
2,412.9
|
|
|
$
|
(30.5
|
)
|
|
|
31 March
|
|
30 September
|
||||
(Millions of dollars, except for share data)
|
|
2017
|
|
2016
|
||||
Assets
|
|
|
|
|
||||
Current Assets
|
|
|
|
|
||||
Cash and cash items
|
|
$
|
1,869.3
|
|
|
$
|
1,293.2
|
|
Short-term investments
|
|
1,423.2
|
|
|
—
|
|
||
Trade receivables, net
|
|
1,176.3
|
|
|
1,146.2
|
|
||
Inventories
|
|
322.8
|
|
|
255.0
|
|
||
Contracts in progress, less progress billings
|
|
68.8
|
|
|
64.6
|
|
||
Prepaid expenses
|
|
61.9
|
|
|
93.9
|
|
||
Other receivables and current assets
|
|
362.0
|
|
|
538.2
|
|
||
Current assets of discontinued operations
|
|
9.8
|
|
|
926.2
|
|
||
Total Current Assets
|
|
5,294.1
|
|
|
4,317.3
|
|
||
Investment in net assets of and advances to equity affiliates
|
|
1,296.3
|
|
|
1,283.6
|
|
||
Plant and equipment, at cost
|
|
18,716.2
|
|
|
18,660.2
|
|
||
Less: accumulated depreciation
|
|
10,518.0
|
|
|
10,400.5
|
|
||
Plant and equipment, net
|
|
8,198.2
|
|
|
8,259.7
|
|
||
Goodwill, net
|
|
827.2
|
|
|
845.1
|
|
||
Intangible assets, net
|
|
377.6
|
|
|
387.9
|
|
||
Noncurrent capital lease receivables
|
|
1,147.9
|
|
|
1,221.7
|
|
||
Other noncurrent assets
|
|
730.2
|
|
|
671.0
|
|
||
Noncurrent assets of discontinued operations
|
|
—
|
|
|
1,042.3
|
|
||
Total Noncurrent Assets
|
|
12,577.4
|
|
|
13,711.3
|
|
||
Total Assets
|
|
$
|
17,871.5
|
|
|
$
|
18,028.6
|
|
Liabilities and Equity
|
|
|
|
|
||||
Current Liabilities
|
|
|
|
|
||||
Payables and accrued liabilities
|
|
$
|
1,490.6
|
|
|
$
|
1,652.2
|
|
Accrued income taxes
|
|
544.8
|
|
|
117.9
|
|
||
Short-term borrowings
|
|
122.3
|
|
|
935.8
|
|
||
Current portion of long-term debt
|
|
420.5
|
|
|
365.4
|
|
||
Current liabilities of discontinued operations
|
|
24.1
|
|
|
211.8
|
|
||
Total Current Liabilities
|
|
2,602.3
|
|
|
3,283.1
|
|
||
Long-term debt
|
|
3,300.4
|
|
|
3,909.7
|
|
||
Other noncurrent liabilities
|
|
1,897.9
|
|
|
1,816.5
|
|
||
Deferred income taxes
|
|
650.7
|
|
|
710.4
|
|
||
Noncurrent liabilities of discontinued operations
|
|
—
|
|
|
1,095.5
|
|
||
Total Noncurrent Liabilities
|
|
5,849.0
|
|
|
7,532.1
|
|
||
Total Liabilities
|
|
8,451.3
|
|
|
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
|
|
975.5
|
|
|
970.0
|
|
||
Retained earnings
|
|
12,692.5
|
|
|
10,475.5
|
|
||
Accumulated other comprehensive loss
|
|
(2,393.7
|
)
|
|
(2,388.3
|
)
|
||
Treasury stock, at cost (2017 - 31,731,093 shares; 2016 - 32,104,759 shares)
|
|
(2,206.3
|
)
|
|
(2,227.0
|
)
|
||
Total Air Products Shareholders’ Equity
|
|
9,317.4
|
|
|
7,079.6
|
|
||
Noncontrolling Interests
|
|
102.8
|
|
|
133.8
|
|
||
Total Equity
|
|
9,420.2
|
|
|
7,213.4
|
|
||
Total Liabilities and Equity
|
|
$
|
17,871.5
|
|
|
$
|
18,028.6
|
|
|
Six Months Ended
|
|||||
|
31 March
|
|||||
(Millions of dollars)
|
2017
|
2016
|
||||
Operating Activities
|
|
|
||||
Net income (loss)
|
$
|
2,442.1
|
|
$
|
(93.5
|
)
|
Less: Net income attributable to noncontrolling interests of continuing operations
|
12.3
|
|
12.1
|
|
||
Less: Net income attributable to noncontrolling interests of discontinued operations
|
—
|
|
4.1
|
|
||
Net income (loss) attributable to Air Products
|
2,429.8
|
|
(109.7
|
)
|
||
(Income) Loss from discontinued operations
|
(1,873.8
|
)
|
669.5
|
|
||
Income from continuing operations attributable to Air Products
|
556.0
|
|
559.8
|
|
||
Adjustments to reconcile income to cash provided by operating activities:
|
|
|
||||
Depreciation and amortization
|
417.9
|
|
428.6
|
|
||
Deferred income taxes
|
(68.6
|
)
|
80.0
|
|
||
Undistributed earnings of unconsolidated affiliates
|
(31.5
|
)
|
(7.4
|
)
|
||
Gain on sale of assets and investments
|
(6.5
|
)
|
(2.3
|
)
|
||
Share-based compensation
|
18.5
|
|
16.4
|
|
||
Noncurrent capital lease receivables
|
45.4
|
|
40.6
|
|
||
Write-down of long-lived assets associated with restructuring
|
45.7
|
|
—
|
|
||
Other adjustments
|
34.0
|
|
37.8
|
|
||
Working capital changes that provided (used) cash, excluding effects of acquisitions and divestitures:
|
|
|
||||
Trade receivables
|
(53.8
|
)
|
46.1
|
|
||
Inventories
|
20.7
|
|
(1.1
|
)
|
||
Contracts in progress, less progress billings
|
(5.0
|
)
|
(38.3
|
)
|
||
Other receivables
|
118.4
|
|
(54.4
|
)
|
||
Payables and accrued liabilities
|
(178.6
|
)
|
(191.5
|
)
|
||
Other working capital
|
(51.4
|
)
|
(24.3
|
)
|
||
Cash Provided by Operating Activities
|
861.2
|
|
890.0
|
|
||
Investing Activities
|
|
|
||||
Additions to plant and equipment
|
(532.2
|
)
|
(472.0
|
)
|
||
Investment in and advances to unconsolidated affiliates
|
(8.9
|
)
|
(1.5
|
)
|
||
Proceeds from sale of assets and investments
|
13.5
|
|
38.1
|
|
||
Purchases of investments
|
(1,823.2
|
)
|
—
|
|
||
Proceeds from investments
|
400.0
|
|
—
|
|
||
Other investing activities
|
(1.6
|
)
|
(1.0
|
)
|
||
Cash Used for Investing Activities
|
(1,952.4
|
)
|
(436.4
|
)
|
||
Financing Activities
|
|
|
||||
Long-term debt proceeds
|
1.3
|
|
—
|
|
||
Payments on long-term debt
|
(469.7
|
)
|
(65.6
|
)
|
||
Net decrease in commercial paper and short-term borrowings
|
(816.6
|
)
|
(1.6
|
)
|
||
Dividends paid to shareholders
|
(374.0
|
)
|
(349.1
|
)
|
||
Proceeds from stock option exercises
|
19.9
|
|
35.5
|
|
||
Other financing activities
|
(22.7
|
)
|
(21.0
|
)
|
||
Cash Used for Financing Activities
|
(1,661.8
|
)
|
(401.8
|
)
|
||
Discontinued Operations
|
|
|
||||
Cash (used for) provided by operating activities
|
(520.8
|
)
|
182.1
|
|
||
Cash provided by (used for) investing activities
|
3,750.6
|
|
(127.3
|
)
|
||
Cash provided by (used for) investing activities
|
69.5
|
|
(6.8
|
)
|
||
Cash Provided by Discontinued Operations
|
3,299.3
|
|
48.0
|
|
||
Effect of Exchange Rate Changes on Cash
|
(7.8
|
)
|
6.9
|
|
||
Increase in Cash and Cash Items
|
538.5
|
|
106.7
|
|
||
Cash and Cash Items – Beginning of Year
|
1,330.8
|
|
206.4
|
|
||
Cash and Cash Items – End of Period
|
$
|
1,869.3
|
|
$
|
313.1
|
|
Less: Cash and Cash Items – Discontinued Operations
|
—
|
|
26.4
|
|
||
Cash and Cash Items – Continuing Operations
|
$
|
1,869.3
|
|
$
|
286.7
|
|
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
|
)
|
|||
Cash expenditures
|
|
—
|
|
|
(1.4
|
)
|
|
(1.4
|
)
|
|||
Currency translation adjustments
|
|
—
|
|
|
1.1
|
|
|
1.1
|
|
|||
31 March 2017
|
|
$
|
—
|
|
|
$
|
64.9
|
|
|
$
|
64.9
|
|
|
Three Months Ended
|
||||||||
|
31 March 2017
|
||||||||
|
|
|
Total
|
||||||
|
Performance
|
Energy-
|
Discontinued
|
||||||
|
Materials
|
from-Waste
(A)
|
Operations
|
||||||
Cost of sales
|
$
|
3.3
|
|
$
|
3.0
|
|
$
|
6.3
|
|
Selling and administrative
|
2.1
|
|
—
|
|
2.1
|
|
|||
Other income (expense), net
|
.7
|
|
(.4
|
)
|
.3
|
|
|||
Income (Loss) Before Taxes
|
(4.7
|
)
|
(3.4
|
)
|
(8.1
|
)
|
|||
Income tax provision
|
(.3
|
)
|
(.9
|
)
|
(1.2
|
)
|
|||
Income (Loss) From Operations of Discontinued Operations, net of tax
|
(4.4
|
)
|
(2.5
|
)
|
(6.9
|
)
|
|||
Gain on Disposal, net of tax
(C)
|
1,832.5
|
|
—
|
|
1,832.5
|
|
|||
Income (Loss) from Discontinued Operations, net of tax
|
$
|
1,828.1
|
|
$
|
(2.5
|
)
|
$
|
1,825.6
|
|
|
Six Months Ended
|
||||||||
|
31 March 2017
|
||||||||
|
|
|
Total
|
||||||
|
Performance
|
Energy-
|
Discontinued
|
||||||
|
Materials
|
from-Waste
(A)
|
Operations
|
||||||
Sales
|
$
|
254.8
|
|
$
|
—
|
|
$
|
254.8
|
|
Cost of sales
|
182.3
|
|
9.6
|
|
191.9
|
|
|||
Selling and administrative
|
22.5
|
|
.2
|
|
22.7
|
|
|||
Research and development
|
5.1
|
|
—
|
|
5.1
|
|
|||
Other income (expense), net
|
.3
|
|
(.1
|
)
|
.2
|
|
|||
Operating Income (Loss)
|
45.2
|
|
(9.9
|
)
|
35.3
|
|
|||
Equity affiliates’ income
|
.3
|
|
—
|
|
.3
|
|
|||
Income (Loss) Before Taxes
|
45.5
|
|
(9.9
|
)
|
35.6
|
|
|||
Income tax provision
(B)
|
(50.8
|
)
|
(2.0
|
)
|
(52.8
|
)
|
|||
Income (Loss) From Operations of Discontinued Operations, net of tax
|
96.3
|
|
(7.9
|
)
|
88.4
|
|
|||
Gain (Loss) on Disposal, net of tax
(C)
|
1,832.5
|
|
(47.1
|
)
|
1,785.4
|
|
|||
Income (Loss) from Discontinued Operations, net of tax
|
$
|
1,928.8
|
|
$
|
(55.0
|
)
|
$
|
1,873.8
|
|
(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, we released valuation allowances related to capital loss and net operating loss carryforwards during the first quarter of 2017 that favorably impacted our income tax provision within discontinued operations by approximately $
66
.
|
(C)
|
After-tax gain on sale of
$1,832.5
includes expense for income tax reserves for uncertain tax positions of
$26.1
gross (
$19.1
net) in various jurisdictions.
|
|
Three Months Ended
|
|||||||||||
|
31 March 2016
|
|||||||||||
|
|
|
|
Total
|
||||||||
|
Electronic
|
Performance
|
Energy-
|
Discontinued
|
||||||||
|
Materials
|
Materials
|
from-Waste
(A)
|
Operations
|
||||||||
Sales
|
$
|
230.7
|
|
$
|
263.1
|
|
$
|
—
|
|
$
|
493.8
|
|
Cost of sales
|
127.6
|
|
178.3
|
|
3.2
|
|
309.1
|
|
||||
Selling and administrative
|
20.0
|
|
19.5
|
|
.9
|
|
40.4
|
|
||||
Research and development
|
9.5
|
|
4.9
|
|
.3
|
|
14.7
|
|
||||
Other income (expense), net
|
2.8
|
|
4.9
|
|
.6
|
|
8.3
|
|
||||
Operating Income (Loss)
|
76.4
|
|
65.3
|
|
(3.8
|
)
|
137.9
|
|
||||
Equity affiliates’ income
|
—
|
|
.2
|
|
—
|
|
.2
|
|
||||
Income (Loss) Before Taxes
(B)
|
76.4
|
|
65.5
|
|
(3.8
|
)
|
138.1
|
|
||||
Income tax provision
|
16.7
|
|
22.3
|
|
2.7
|
|
41.7
|
|
||||
Income (Loss) From Operations of Discontinued Operations
|
59.7
|
|
43.2
|
|
(6.5
|
)
|
96.4
|
|
||||
Loss on Disposal, net of tax
|
—
|
|
—
|
|
(846.6
|
)
|
(846.6
|
)
|
||||
Income (Loss) from Operations of Discontinued Operations, net of tax
|
59.7
|
|
43.2
|
|
(853.1
|
)
|
(750.2
|
)
|
||||
Net Income Attributable to Noncontrolling Interests of Discontinued Operations
|
2.0
|
|
—
|
|
—
|
|
2.0
|
|
||||
Net Income (Loss) From Discontinued Operations, net of tax
|
$
|
57.7
|
|
$
|
43.2
|
|
$
|
(853.1
|
)
|
$
|
(752.2
|
)
|
|
Six Months Ended
|
|||||||||||
|
31 March 2016
|
|||||||||||
|
|
|
|
Total
|
||||||||
|
Electronic
|
Performance
|
Energy-
|
Discontinued
|
||||||||
|
Materials
|
Materials
|
from-Waste
(A)
|
Operations
|
||||||||
Sales
|
$
|
473.3
|
|
$
|
510.0
|
|
$
|
—
|
|
$
|
983.3
|
|
Cost of sales
|
254.9
|
|
350.9
|
|
5.3
|
|
611.1
|
|
||||
Selling and administrative
|
38.4
|
|
38.5
|
|
1.6
|
|
78.5
|
|
||||
Research and development
|
19.6
|
|
9.9
|
|
.7
|
|
30.2
|
|
||||
Other income (expense), net
|
5.0
|
|
3.7
|
|
(13.7
|
)
|
(5.0
|
)
|
||||
Operating Income (Loss)
|
165.4
|
|
114.4
|
|
(21.3
|
)
|
258.5
|
|
||||
Equity affiliates’ income
|
.2
|
|
.4
|
|
—
|
|
.6
|
|
||||
Income (Loss) Before Taxes
(B)
|
165.6
|
|
114.8
|
|
(21.3
|
)
|
259.1
|
|
||||
Income tax provision
|
41.6
|
|
36.9
|
|
(.6
|
)
|
77.9
|
|
||||
Income (Loss) From Operations of Discontinued Operations
|
124.0
|
|
77.9
|
|
(20.7
|
)
|
181.2
|
|
||||
Loss on Disposal, net of tax
|
—
|
|
—
|
|
(846.6
|
)
|
(846.6
|
)
|
||||
Income (Loss) from Operations of Discontinued Operations, net of tax
|
124.0
|
|
77.9
|
|
(867.3
|
)
|
(665.4
|
)
|
||||
Net Income Attributable to Noncontrolling Interests of Discontinued Operations
|
4.1
|
|
—
|
|
—
|
|
4.1
|
|
||||
Net Income (Loss) From Discontinued Operations, net of tax
|
$
|
119.9
|
|
$
|
77.9
|
|
$
|
(867.3
|
)
|
$
|
(669.5
|
)
|
(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 and six
months ended
31 March 2016
, income before taxes from operations of discontinued operations attributable to Air Products was $
135.7
and
$254.1
, respectively.
|
|
31 March 2017
|
||||||||
|
|
|
Total
|
||||||
|
Performance
|
Energy-
|
Discontinued
|
||||||
|
Materials
|
from-Waste
|
Operations
|
||||||
Assets
|
|
|
|
||||||
Current Assets
|
|
|
|
||||||
Plant and equipment, net
|
$
|
—
|
|
$
|
9.6
|
|
$
|
9.6
|
|
Other receivables and current assets
|
—
|
|
.2
|
|
.2
|
|
|||
Total Current Assets
|
—
|
|
9.8
|
|
9.8
|
|
|||
Total Assets
|
$
|
—
|
|
$
|
9.8
|
|
$
|
9.8
|
|
Liabilities
|
|
|
|
||||||
Current Liabilities
|
|
|
|
||||||
Payables and accrued liabilities
(A)
|
$
|
17.4
|
|
$
|
6.7
|
|
$
|
24.1
|
|
Total Current Liabilities
|
17.4
|
|
6.7
|
|
24.1
|
|
|||
Total Liabilities
|
$
|
17.4
|
|
$
|
6.7
|
|
$
|
24.1
|
|
(A)
|
Includes reserves associated with disposition of businesses.
|
|
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
|
|
18.0
|
|
|
45.7
|
|
|
63.7
|
|
|||
Noncash expenses
|
|
—
|
|
|
(45.7
|
)
|
|
(45.7
|
)
|
|||
Amount reflected in pension liability
|
|
(.2
|
)
|
|
—
|
|
|
(.2
|
)
|
|||
Cash expenditures
|
|
(18.8
|
)
|
|
—
|
|
|
(18.8
|
)
|
|||
Currency translation adjustment
|
|
(.5
|
)
|
|
—
|
|
|
(.5
|
)
|
|||
31 March 2017
|
|
$
|
10.8
|
|
|
$
|
—
|
|
|
$
|
10.8
|
|
6.
|
INVENTORIES
|
|
|
31 March
|
|
30 September
|
||||
|
|
2017
|
|
2016
|
||||
Finished goods
|
|
$
|
131.1
|
|
|
$
|
131.3
|
|
Work in process
|
|
17.4
|
|
|
18.3
|
|
||
Raw materials, supplies and other
|
|
189.4
|
|
|
117.1
|
|
||
|
|
$
|
337.9
|
|
|
$
|
266.7
|
|
Less: Excess of FIFO cost over LIFO cost
|
|
(15.1
|
)
|
|
(11.7
|
)
|
||
Inventories
|
|
$
|
322.8
|
|
|
$
|
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
|
|
(.9
|
)
|
|
(17.0
|
)
|
|
.3
|
|
|
(.3
|
)
|
|
(17.9
|
)
|
|||||
Goodwill, net at 31 March 2017
|
|
$
|
308.2
|
|
|
$
|
363.6
|
|
|
$
|
135.5
|
|
|
$
|
19.9
|
|
|
$
|
827.2
|
|
|
|
31 March
|
|
30 September
|
||||
|
|
2017
|
|
2016
|
||||
Goodwill, gross
|
|
$
|
1,084.7
|
|
|
$
|
1,103.7
|
|
Accumulated impairment losses
(A)
|
|
(257.5
|
)
|
|
(258.6
|
)
|
||
Goodwill, net
|
|
$
|
827.2
|
|
|
$
|
845.1
|
|
(A)
|
Amount is attributable to the Industrial Gases – Americas segment and includes currency translation of
$47.7
and
$46.6
as of
31 March 2017
and
30 September 2016
, respectively.
|
8.
|
FINANCIAL INSTRUMENTS
|
|
|
31 March 2017
|
|
30 September 2016
|
||||||||||
|
|
US$
Notional
|
|
Years
Average
Maturity
|
|
US$
Notional
|
|
Years
Average
Maturity
|
||||||
Forward Exchange Contracts:
|
|
|
|
|
|
|
|
|
||||||
Cash flow hedges
|
|
$
|
3,472.9
|
|
|
.5
|
|
|
$
|
4,130.3
|
|
|
.5
|
|
Net investment hedges
|
|
664.4
|
|
|
3.2
|
|
|
968.2
|
|
|
2.7
|
|
||
Not designated
|
|
1,526.1
|
|
|
.3
|
|
|
2,648.3
|
|
|
.4
|
|
||
Total Forward Exchange Contracts
|
|
$
|
5,663.4
|
|
|
.7
|
|
|
$
|
7,746.8
|
|
|
.7
|
|
|
|
31 March 2017
|
|
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
|
%
|
|
1.8
|
|
$
|
600.0
|
|
|
LIBOR
|
|
|
2.28
|
%
|
|
2.3
|
Cross currency interest rate swaps
(net investment hedge)
|
|
$
|
503.4
|
|
|
3.24
|
%
|
|
2.39
|
%
|
|
2.0
|
|
$
|
517.7
|
|
|
3.24
|
%
|
|
2.43
|
%
|
|
2.6
|
Cross currency interest rate swaps
(cash flow hedge)
|
|
$
|
1,088.9
|
|
|
4.77
|
%
|
|
2.72
|
%
|
|
2.8
|
|
$
|
1,088.9
|
|
|
4.77
|
%
|
|
2.72
|
%
|
|
3.3
|
Cross currency interest rate swaps
(not designated)
|
|
$
|
41.7
|
|
|
3.40
|
%
|
|
1.78
|
%
|
|
1.9
|
|
$
|
27.4
|
|
|
3.62
|
%
|
|
.81
|
%
|
|
1.8
|
|
Balance Sheet
Location
|
31 March 2017
|
30 September 2016
|
Balance Sheet
Location
|
31 March 2017
|
30 September 2016
|
||||||||
Derivatives Designated as Hedging Instruments:
|
|
|
|
|
|
|
||||||||
Forward exchange contracts
|
Other receivables
|
$
|
36.3
|
|
$
|
72.3
|
|
Accrued liabilities
|
$
|
76.7
|
|
$
|
44.0
|
|
Interest rate management contracts
|
Other receivables
|
37.6
|
|
19.9
|
|
Accrued liabilities
|
.4
|
|
—
|
|
||||
Forward exchange contracts
|
Other noncurrent
assets
|
72.6
|
|
44.4
|
|
Other noncurrent
liabilities
|
1.2
|
|
9.1
|
|
||||
Interest rate management contracts
|
Other noncurrent
assets
|
155.0
|
|
160.0
|
|
Other noncurrent
liabilities
|
22.5
|
|
12.0
|
|
||||
Total Derivatives Designated as Hedging Instruments
|
|
$
|
301.5
|
|
$
|
296.6
|
|
|
$
|
100.8
|
|
$
|
65.1
|
|
Derivatives Not Designated as Hedging Instruments:
|
|
|
|
|
|
|
||||||||
Forward exchange contracts
|
Other receivables
|
$
|
20.3
|
|
$
|
77.1
|
|
Accrued liabilities
|
$
|
13.1
|
|
$
|
29.5
|
|
Interest rate management contracts
|
Other noncurrent
assets
|
3.7
|
|
—
|
|
Other noncurrent
liabilities
|
.8
|
|
.7
|
|
||||
Total Derivatives Not Designated as Hedging Instruments
|
|
$
|
24.0
|
|
$
|
77.1
|
|
|
$
|
13.9
|
|
$
|
30.2
|
|
Total Derivatives
|
|
$
|
325.5
|
|
$
|
373.7
|
|
|
$
|
114.7
|
|
$
|
95.3
|
|
|
Three Months Ended 31 March
|
|||||||||||||||||||||||
|
Forward
Exchange Contracts
|
Foreign Currency
Debt
|
Other
(A)
|
Total
|
||||||||||||||||||||
|
2017
|
2016
|
2017
|
2016
|
2017
|
2016
|
2017
|
2016
|
||||||||||||||||
Cash Flow Hedges, net of tax:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net gain (loss) recognized in OCI (effective portion)
|
$
|
11.1
|
|
$
|
32.5
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(26.5
|
)
|
$
|
(19.7
|
)
|
$
|
(15.4
|
)
|
$
|
12.8
|
|
Net (gain) loss reclassified from OCI to sales/cost of sales (effective portion)
|
1.2
|
|
.5
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1.2
|
|
.5
|
|
||||||||
Net (gain) loss reclassified from OCI to other income (expense), net (effective portion)
|
(10.8
|
)
|
(30.2
|
)
|
—
|
|
—
|
|
15.8
|
|
16.5
|
|
5.0
|
|
(13.7
|
)
|
||||||||
Net (gain) loss reclassified from OCI to interest expense (effective portion)
|
(1.6
|
)
|
1.2
|
|
—
|
|
—
|
|
.7
|
|
.8
|
|
(.9
|
)
|
2.0
|
|
||||||||
Net (gain) loss reclassified from OCI to other income (expense), net (ineffective portion)
|
.5
|
|
.1
|
|
—
|
|
—
|
|
—
|
|
—
|
|
.5
|
|
.1
|
|
||||||||
Fair Value Hedges:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net gain (loss) recognized in interest expense
(B)
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(2.8
|
)
|
$
|
7.2
|
|
$
|
(2.8
|
)
|
$
|
7.2
|
|
Net Investment Hedges, net of tax:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net gain (loss) recognized in OCI
|
$
|
(.8
|
)
|
$
|
(9.4
|
)
|
$
|
(7.8
|
)
|
$
|
(17.9
|
)
|
$
|
(6.5
|
)
|
$
|
1.9
|
|
$
|
(15.1
|
)
|
$
|
(25.4
|
)
|
Derivatives Not Designated as Hedging Instruments:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net gain (loss) recognized in other income (expense), net
(C)
|
$
|
(2.5
|
)
|
$
|
.2
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(.6
|
)
|
$
|
(.6
|
)
|
$
|
(3.1
|
)
|
$
|
(.4
|
)
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Six Months Ended 31 March
|
|||||||||||||||||||||||
|
Forward
Exchange Contracts
|
Foreign Currency
Debt
|
Other
(A)
|
Total
|
||||||||||||||||||||
|
2017
|
2016
|
2017
|
2016
|
2017
|
2016
|
2017
|
2016
|
||||||||||||||||
Cash Flow Hedges, net of tax:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net gain (loss) recognized in OCI (effective portion)
|
$
|
(48.3
|
)
|
$
|
27.8
|
|
$
|
—
|
|
$
|
—
|
|
$
|
23.1
|
|
$
|
1.0
|
|
$
|
(25.2
|
)
|
$
|
28.8
|
|
Net (gain) loss reclassified from OCI to sales/cost of sales (effective portion)
|
5.8
|
|
1.4
|
|
—
|
|
—
|
|
—
|
|
—
|
|
5.8
|
|
1.4
|
|
||||||||
Net (gain) loss reclassified from OCI to other income (expense), net (effective portion)
|
38.7
|
|
(32.0
|
)
|
—
|
|
—
|
|
(12.4
|
)
|
(3.7
|
)
|
26.3
|
|
(35.7
|
)
|
||||||||
Net (gain) loss reclassified from OCI to interest expense (effective portion)
|
(2.4
|
)
|
2.6
|
|
—
|
|
—
|
|
1.4
|
|
1.6
|
|
(1.0
|
)
|
4.2
|
|
||||||||
Net (gain) loss reclassified from OCI to other income (expense), net (ineffective portion)
|
.3
|
|
(.3
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
.3
|
|
(.3
|
)
|
||||||||
Fair Value Hedges:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net gain (loss) recognized in interest expense
(B)
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(11.9
|
)
|
$
|
(1.8
|
)
|
$
|
(11.9
|
)
|
$
|
(1.8
|
)
|
Net Investment Hedges, net of tax:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net gain (loss) recognized in OCI
|
$
|
27.1
|
|
$
|
(6.4
|
)
|
$
|
34.0
|
|
$
|
(10.3
|
)
|
$
|
6.6
|
|
$
|
8.4
|
|
$
|
67.7
|
|
$
|
(8.3
|
)
|
Derivatives Not Designated as Hedging Instruments:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net gain (loss) recognized in other income (expense), net
(C)
|
$
|
(.4
|
)
|
$
|
(.2
|
)
|
$
|
—
|
|
$
|
—
|
|
$
|
.2
|
|
$
|
(.6
|
)
|
$
|
(.2
|
)
|
$
|
(.8
|
)
|
(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 March 2017
|
|
30 September 2016
|
||||||||||||
|
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Derivatives
|
|
|
|
|
|
|
|
|
||||||||
Forward exchange contracts
|
|
$
|
129.2
|
|
|
$
|
129.2
|
|
|
$
|
193.8
|
|
|
$
|
193.8
|
|
Interest rate management contracts
|
|
196.3
|
|
|
196.3
|
|
|
179.9
|
|
|
179.9
|
|
||||
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Derivatives
|
|
|
|
|
|
|
|
|
||||||||
Forward exchange contracts
|
|
$
|
91.0
|
|
|
$
|
91.0
|
|
|
$
|
82.6
|
|
|
$
|
82.6
|
|
Interest rate management contracts
|
|
23.7
|
|
|
23.7
|
|
|
12.7
|
|
|
12.7
|
|
||||
Long-term debt, including current portion
|
|
3,720.9
|
|
|
3,823.0
|
|
|
4,275.1
|
|
|
4,450.5
|
|
|
31 March 2017
|
|
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
|
$
|
129.2
|
|
$
|
—
|
|
$
|
129.2
|
|
$
|
—
|
|
|
$
|
193.8
|
|
$
|
—
|
|
$
|
193.8
|
|
$
|
—
|
|
Interest rate management contracts
|
196.3
|
|
—
|
|
196.3
|
|
—
|
|
|
179.9
|
|
—
|
|
179.9
|
|
—
|
|
||||||||
Total Assets at Fair Value
|
$
|
325.5
|
|
$
|
—
|
|
$
|
325.5
|
|
$
|
—
|
|
|
$
|
373.7
|
|
$
|
—
|
|
$
|
373.7
|
|
$
|
—
|
|
Liabilities at Fair Value
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivatives
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Forward exchange contracts
|
$
|
91.0
|
|
$
|
—
|
|
$
|
91.0
|
|
$
|
—
|
|
|
$
|
82.6
|
|
$
|
—
|
|
$
|
82.6
|
|
$
|
—
|
|
Interest rate management contracts
|
23.7
|
|
—
|
|
23.7
|
|
—
|
|
|
12.7
|
|
—
|
|
12.7
|
|
—
|
|
||||||||
Total Liabilities at Fair Value
|
$
|
114.7
|
|
$
|
—
|
|
$
|
114.7
|
|
$
|
—
|
|
|
$
|
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. There have been no significant updates to our estimates as of 31 March 2017. For additional information, see Note
3
,
Discontinued Operations
and Note
5
,
Cost Reduction and Asset Actions
.
|
10.
|
RETIREMENT BENEFITS
|
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||||||
Three Months Ended 31 March
|
|
U.S.
|
|
International
|
|
U.S.
|
|
International
|
|
|
|
|
||||||||||||
Service cost
|
|
$
|
6.9
|
|
|
$
|
6.3
|
|
|
$
|
9.3
|
|
|
$
|
6.1
|
|
|
$
|
.2
|
|
|
$
|
.6
|
|
Interest cost
|
|
27.6
|
|
|
7.9
|
|
|
27.7
|
|
|
11.1
|
|
|
.4
|
|
|
.5
|
|
||||||
Expected return on plan assets
|
|
(51.7
|
)
|
|
(18.3
|
)
|
|
(50.5
|
)
|
|
(19.6
|
)
|
|
—
|
|
|
—
|
|
||||||
Prior service cost amortization
|
|
.6
|
|
|
(.1
|
)
|
|
.8
|
|
|
(.1
|
)
|
|
—
|
|
|
—
|
|
||||||
Actuarial loss amortization
|
|
20.9
|
|
|
13.2
|
|
|
21.5
|
|
|
9.1
|
|
|
—
|
|
|
.1
|
|
||||||
Settlements
|
|
4.1
|
|
|
4.0
|
|
|
2.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Curtailment
|
|
.1
|
|
|
1.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Special termination benefits
|
|
(.1
|
)
|
|
.1
|
|
|
.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other
|
|
—
|
|
|
(2.2
|
)
|
|
—
|
|
|
.5
|
|
|
—
|
|
|
—
|
|
||||||
Net periodic benefit cost (Total)
|
|
$
|
8.4
|
|
|
$
|
12.7
|
|
|
$
|
12.0
|
|
|
$
|
7.1
|
|
|
$
|
.6
|
|
|
$
|
1.2
|
|
Less: Discontinued Operations
|
|
(.1
|
)
|
|
(3.4
|
)
|
|
(2.1
|
)
|
|
(.2
|
)
|
|
—
|
|
|
—
|
|
||||||
Net periodic benefit cost (Continuing Operations)
|
|
$
|
8.3
|
|
|
$
|
9.3
|
|
|
$
|
9.9
|
|
|
$
|
6.9
|
|
|
$
|
.6
|
|
|
$
|
1.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||||||
Six Months Ended 31 March
|
|
U.S.
|
|
International
|
|
U.S.
|
|
International
|
|
|
|
|
||||||||||||
Service cost
|
|
$
|
15.2
|
|
|
$
|
13.0
|
|
|
$
|
18.3
|
|
|
$
|
12.3
|
|
|
$
|
.7
|
|
|
$
|
1.1
|
|
Interest cost
|
|
52.5
|
|
|
15.5
|
|
|
55.4
|
|
|
22.7
|
|
|
.8
|
|
|
1.0
|
|
||||||
Expected return on plan assets
|
|
(104.4
|
)
|
|
(36.8
|
)
|
|
(101.0
|
)
|
|
(40.3
|
)
|
|
—
|
|
|
—
|
|
||||||
Prior service cost amortization
|
|
1.2
|
|
|
(.1
|
)
|
|
1.5
|
|
|
(.1
|
)
|
|
—
|
|
|
—
|
|
||||||
Actuarial loss amortization
|
|
47.0
|
|
|
27.1
|
|
|
42.6
|
|
|
18.3
|
|
|
.2
|
|
|
.3
|
|
||||||
Settlements
|
|
4.1
|
|
|
1.7
|
|
|
2.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Curtailment
|
|
4.3
|
|
|
(1.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Special termination benefits
|
|
1.0
|
|
|
.5
|
|
|
.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other
|
|
—
|
|
|
.5
|
|
|
—
|
|
|
1.0
|
|
|
—
|
|
|
—
|
|
||||||
Net periodic benefit cost (Total)
|
|
$
|
20.9
|
|
|
$
|
20.1
|
|
|
$
|
20.0
|
|
|
$
|
13.9
|
|
|
$
|
1.7
|
|
|
$
|
2.4
|
|
Less: Discontinued Operations
|
|
(.7
|
)
|
|
(4.1
|
)
|
|
(3.9
|
)
|
|
(1.6
|
)
|
|
—
|
|
|
—
|
|
||||||
Net periodic benefit cost (Continuing Operations)
|
|
$
|
20.2
|
|
|
$
|
16.0
|
|
|
$
|
16.1
|
|
|
$
|
12.3
|
|
|
$
|
1.7
|
|
|
$
|
2.4
|
|
11.
|
COMMITMENTS AND CONTINGENCIES
|
12.
|
SHARE-BASED COMPENSATION
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
31 March
|
|
31 March
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Before-Tax Share-Based Compensation Cost
|
|
$
|
9.5
|
|
|
$
|
8.1
|
|
|
$
|
18.5
|
|
|
$
|
16.4
|
|
Income Tax Benefit
|
|
(3.3
|
)
|
|
(2.7
|
)
|
|
(6.3
|
)
|
|
(5.5
|
)
|
||||
After-Tax Share-Based Compensation Cost
|
|
$
|
6.2
|
|
|
$
|
5.4
|
|
|
$
|
12.2
|
|
|
$
|
10.9
|
|
Expected volatility
|
|
20.6
|
%
|
Risk-free interest rate
|
|
1.4
|
%
|
Expected dividend yield
|
|
2.5
|
%
|
13.
|
EQUITY
|
|
Three Months Ended 31 March
|
||||||||||||||||||
|
2017
|
|
2016
|
||||||||||||||||
|
Air
Products
|
Non-
controlling
Interests
|
Total
Equity
|
|
Air
Products
|
Non-
controlling
Interests
|
Total
Equity
|
||||||||||||
Balance at 31 December
|
$
|
7,161.5
|
|
$
|
99.6
|
|
$
|
7,261.1
|
|
|
$
|
7,367.1
|
|
$
|
131.9
|
|
$
|
7,499.0
|
|
Net income (loss)
|
2,130.0
|
|
5.7
|
|
2,135.7
|
|
|
(473.3
|
)
|
7.8
|
|
(465.5
|
)
|
||||||
Other comprehensive income
|
218.0
|
|
5.0
|
|
223.0
|
|
|
161.9
|
|
2.8
|
|
164.7
|
|
||||||
Dividends on common stock (per share $0.95, $0.86)
|
(206.9
|
)
|
—
|
|
(206.9
|
)
|
|
(185.8
|
)
|
—
|
|
(185.8
|
)
|
||||||
Dividends to noncontrolling interests
|
—
|
|
(7.5
|
)
|
(7.5
|
)
|
|
—
|
|
(6.3
|
)
|
(6.3
|
)
|
||||||
Share-based compensation
|
9.5
|
|
—
|
|
9.5
|
|
|
8.1
|
|
—
|
|
8.1
|
|
||||||
Treasury shares for stock option and award plans
|
7.9
|
|
—
|
|
7.9
|
|
|
32.8
|
|
—
|
|
32.8
|
|
||||||
Tax benefit of stock option and award plans
|
—
|
|
—
|
|
—
|
|
|
4.8
|
|
—
|
|
4.8
|
|
||||||
Other equity transactions
|
(2.6
|
)
|
—
|
|
(2.6
|
)
|
|
1.0
|
|
.3
|
|
1.3
|
|
||||||
Balance at 31 March
|
$
|
9,317.4
|
|
$
|
102.8
|
|
$
|
9,420.2
|
|
|
$
|
6,916.6
|
|
$
|
136.5
|
|
$
|
7,053.1
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Six Months Ended 31 March
|
||||||||||||||||||
|
2017
|
|
2016
|
||||||||||||||||
|
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 (loss)
|
2,429.8
|
|
12.3
|
|
2,442.1
|
|
|
(109.7
|
)
|
16.2
|
|
(93.5
|
)
|
||||||
Other comprehensive income (loss)
|
(16.9
|
)
|
1.9
|
|
(15.0
|
)
|
|
79.2
|
|
2.8
|
|
82.0
|
|
||||||
Dividends on common stock (per share $1.81, $1.67)
|
(394.0
|
)
|
—
|
|
(394.0
|
)
|
|
(360.5
|
)
|
—
|
|
(360.5
|
)
|
||||||
Dividends to noncontrolling interests
|
—
|
|
(11.7
|
)
|
(11.7
|
)
|
|
—
|
|
(14.8
|
)
|
(14.8
|
)
|
||||||
Share-based compensation
|
18.5
|
|
—
|
|
18.5
|
|
|
16.4
|
|
—
|
|
16.4
|
|
||||||
Treasury shares for stock option and award plans
|
7.6
|
|
—
|
|
7.6
|
|
|
30.8
|
|
—
|
|
30.8
|
|
||||||
Tax benefit of stock option and award plans
|
—
|
|
—
|
|
—
|
|
|
9.7
|
|
—
|
|
9.7
|
|
||||||
Spin-off of Versum
|
186.5
|
|
(33.9
|
)
|
152.6
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Cumulative change in accounting principle (Note 2)
|
8.8
|
|
—
|
|
8.8
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Other equity transactions
|
(2.5
|
)
|
.4
|
|
(2.1
|
)
|
|
1.7
|
|
.2
|
|
1.9
|
|
||||||
Balance at 31 March
|
$
|
9,317.4
|
|
$
|
102.8
|
|
$
|
9,420.2
|
|
|
$
|
6,916.6
|
|
$
|
136.5
|
|
$
|
7,053.1
|
|
14.
|
ACCUMULATED OTHER COMPREHENSIVE LOSS
|
|
Net loss on
derivatives
qualifying as
hedges
|
|
Foreign
currency
translation
adjustments
|
|
Pension and
postretirement
benefits
|
|
Total
|
|
||||
Balance at 31 December 2016
|
$
|
(49.0
|
)
|
$
|
(1,221.4
|
)
|
$
|
(1,341.3
|
)
|
$
|
(2,611.7
|
)
|
Other comprehensive income (loss) before reclassifications
|
(15.4
|
)
|
149.6
|
|
3.8
|
|
138.0
|
|
||||
Amounts reclassified from AOCL
|
5.8
|
|
49.1
|
|
30.1
|
|
85.0
|
|
||||
Net current period other comprehensive income (loss)
|
(9.6
|
)
|
198.7
|
|
33.9
|
|
223.0
|
|
||||
Amount attributable to noncontrolling interests
|
(.1
|
)
|
5.0
|
|
.1
|
|
5.0
|
|
||||
Balance at 31 March 2017
|
$
|
(58.5
|
)
|
$
|
(1,027.7
|
)
|
$
|
(1,307.5
|
)
|
$
|
(2,393.7
|
)
|
|
|
|
|
|
||||||||
|
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 income (loss) before reclassifications
|
(25.2
|
)
|
(131.6
|
)
|
3.8
|
|
(153.0
|
)
|
||||
Amounts reclassified from AOCL
|
31.4
|
|
49.1
|
|
57.5
|
|
138.0
|
|
||||
Net current period other comprehensive income (loss)
|
6.2
|
|
(82.5
|
)
|
61.3
|
|
(15.0
|
)
|
||||
Spin-off of Versum
|
.2
|
|
6.0
|
|
5.3
|
|
11.5
|
|
||||
Amount attributable to noncontrolling interests
|
(.1
|
)
|
1.9
|
|
.1
|
|
1.9
|
|
||||
Balance at 31 March 2017
|
$
|
(58.5
|
)
|
$
|
(1,027.7
|
)
|
$
|
(1,307.5
|
)
|
$
|
(2,393.7
|
)
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||
|
31 March
|
31 March
|
||||||||||
|
2017
|
2016
|
2017
|
2016
|
||||||||
(Gain) Loss on Cash Flow Hedges, net of tax
|
|
|
|
|
||||||||
Sales/Cost of sales
|
$
|
1.2
|
|
$
|
.5
|
|
$
|
5.8
|
|
$
|
1.4
|
|
Other income (expense), net
|
5.5
|
|
(13.6
|
)
|
26.6
|
|
(36.0
|
)
|
||||
Interest expense
|
(.9
|
)
|
2.0
|
|
(1.0
|
)
|
4.2
|
|
||||
Total (Gain) Loss on Cash Flow Hedges, net of tax
|
$
|
5.8
|
|
$
|
(11.1
|
)
|
$
|
31.4
|
|
$
|
(30.4
|
)
|
Currency Translation Adjustment
(A)
|
$
|
49.1
|
|
$
|
.4
|
|
$
|
49.1
|
|
$
|
2.8
|
|
Pension and Postretirement Benefits, net of tax
(B)
|
$
|
30.1
|
|
$
|
22.7
|
|
$
|
57.5
|
|
$
|
43.8
|
|
(A)
|
The impact is reflected in "Income from discontinued operations, net of tax." The fiscal year 2017 impact relates to the sale of PMD during the second quarter. The fiscal year 2016 impact primarily relates to the sale of an equity affiliate in the first quarter.
|
(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
|
|
Six Months Ended
|
||||||||||||
|
|
31 March
|
|
31 March
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Numerator
|
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
|
$
|
304.4
|
|
|
$
|
278.9
|
|
|
$
|
556.0
|
|
|
$
|
559.8
|
|
Income (Loss) from discontinued operations
|
|
1,825.6
|
|
|
(752.2
|
)
|
|
1,873.8
|
|
|
(669.5
|
)
|
||||
Net Income (Loss) Attributable to Air P
roducts
|
|
$
|
2,130.0
|
|
|
$
|
(473.3
|
)
|
|
$
|
2,429.8
|
|
|
$
|
(109.7
|
)
|
Denominator
(in millions)
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares — Basic
|
|
217.9
|
|
|
216.1
|
|
|
217.8
|
|
|
215.9
|
|
||||
Effect of dilutive securities
|
|
|
|
|
|
|
|
|
||||||||
Employee stock option and other award plans
|
|
1.8
|
|
|
1.8
|
|
|
1.8
|
|
|
1.9
|
|
||||
Weighted average common shares — Diluted
|
|
219.7
|
|
|
217.9
|
|
|
219.6
|
|
|
217.8
|
|
||||
Basic Earnings Per Common Share Attributable to Air Products
|
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
|
$
|
1.40
|
|
|
$
|
1.29
|
|
|
$
|
2.55
|
|
|
$
|
2.59
|
|
Income (Loss) from discontinued operations
|
|
8.38
|
|
|
(3.48
|
)
|
|
8.61
|
|
|
(3.10
|
)
|
||||
Net Income (Loss) Attributable to Air P
roducts
|
|
$
|
9.78
|
|
|
$
|
(2.19
|
)
|
|
$
|
11.16
|
|
|
$
|
(.51
|
)
|
Diluted Earnings Per Common Share Attributable to Air Products
|
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
|
$
|
1.39
|
|
|
$
|
1.28
|
|
|
$
|
2.53
|
|
|
$
|
2.57
|
|
Income (Loss) from discontinued operations
|
|
8.31
|
|
|
(3.45
|
)
|
|
8.53
|
|
|
(3.08
|
)
|
||||
Net Income (Loss) Attributable to Air P
roducts
|
|
$
|
9.70
|
|
|
$
|
(2.17
|
)
|
|
$
|
11.06
|
|
|
$
|
(.51
|
)
|
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 March 2017
|
||||||||||||||||||
Sales
|
$
|
890.1
|
|
$
|
414.2
|
|
$
|
435.9
|
|
$
|
216.5
|
|
$
|
23.4
|
|
$
|
1,980.1
|
|
Operating income (loss)
|
224.5
|
|
86.5
|
|
112.0
|
|
22.8
|
|
(40.2
|
)
|
405.6
|
|
||||||
Depreciation and amortization
|
116.0
|
|
41.6
|
|
49.3
|
|
1.7
|
|
3.2
|
|
211.8
|
|
||||||
Equity affiliates' income
|
13.0
|
|
8.3
|
|
12.9
|
|
—
|
|
—
|
|
34.2
|
|
||||||
Three Months Ended 31 March 2016
|
||||||||||||||||||
Sales
|
$
|
798.1
|
|
$
|
421.8
|
|
$
|
407.9
|
|
$
|
86.6
|
|
$
|
63.0
|
|
$
|
1,777.4
|
|
Operating income (loss)
|
223.5
|
|
90.0
|
|
105.0
|
|
(10.8
|
)
|
(16.0
|
)
|
391.7
|
|
||||||
Depreciation and amortization
|
109.8
|
|
48.2
|
|
48.8
|
|
1.8
|
|
5.3
|
|
213.9
|
|
||||||
Equity affiliates' income
|
7.7
|
|
7.2
|
|
17.4
|
|
—
|
|
—
|
|
32.3
|
|
|
|
|
|
|
|
|
||||||||||||
Six Months Ended 31 March 2017
|
||||||||||||||||||
Sales
|
$
|
1,754.0
|
|
$
|
813.9
|
|
$
|
874.2
|
|
$
|
364.4
|
|
$
|
56.1
|
|
$
|
3,862.6
|
|
Operating income (loss)
|
448.3
|
|
174.5
|
|
230.1
|
|
31.0
|
|
(70.0
|
)
|
813.9
|
|
||||||
Depreciation and amortization
|
227.8
|
|
83.8
|
|
96.0
|
|
3.7
|
|
6.6
|
|
417.9
|
|
||||||
Equity affiliates' income
|
27.7
|
|
17.8
|
|
26.4
|
|
.3
|
|
—
|
|
72.2
|
|
||||||
Six Months Ended 31 March 2016
|
||||||||||||||||||
Sales
|
$
|
1,634.4
|
|
$
|
861.4
|
|
$
|
822.5
|
|
$
|
190.9
|
|
$
|
134.5
|
|
$
|
3,643.7
|
|
Operating income (loss)
|
435.1
|
|
182.3
|
|
222.3
|
|
(30.1
|
)
|
(33.4
|
)
|
776.2
|
|
||||||
Depreciation and amortization
|
218.8
|
|
95.0
|
|
100.7
|
|
3.9
|
|
10.2
|
|
428.6
|
|
||||||
Equity affiliates' income (loss)
|
22.2
|
|
14.8
|
|
29.1
|
|
(.5
|
)
|
—
|
|
65.6
|
|
||||||
Total Assets
|
||||||||||||||||||
31 March 2017
|
$
|
5,898.8
|
|
$
|
3,100.8
|
|
$
|
4,248.1
|
|
$
|
328.9
|
|
$
|
4,285.1
|
|
$
|
17,861.7
|
|
30 September 2016
|
5,896.7
|
|
3,178.6
|
|
4,232.7
|
|
367.6
|
|
2,384.5
|
|
16,060.1
|
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||
|
31 March
|
31 March
|
||||||||||
Operating Income
|
2017
|
2016
|
2017
|
2016
|
||||||||
Segment total
|
$
|
405.6
|
|
$
|
391.7
|
|
$
|
813.9
|
|
$
|
776.2
|
|
Business separation costs
|
—
|
|
(7.4
|
)
|
(30.2
|
)
|
(19.4
|
)
|
||||
Cost reduction and asset actions
|
(10.3
|
)
|
(10.7
|
)
|
(60.3
|
)
|
(10.7
|
)
|
||||
Pension settlement loss
|
(4.1
|
)
|
(2.0
|
)
|
(4.1
|
)
|
(2.0
|
)
|
||||
Consolidated Total
|
$
|
391.2
|
|
$
|
371.6
|
|
$
|
719.3
|
|
$
|
744.1
|
|
|
31 March
|
30 September
|
||||
Total Assets
|
2017
|
2016
|
||||
Segment total
|
$
|
17,861.7
|
|
$
|
16,060.1
|
|
Discontinued operations
|
9.8
|
|
1,968.5
|
|
||
Consolidated Total
|
$
|
17,871.5
|
|
$
|
18,028.6
|
|
•
|
Sales of
$1,980.1
increased
11%
, or
$202.7
from higher volumes of 7% and higher energy contractual pass-through to customers of 5%, partially offset by 1% of unfavorable currency impacts.
|
•
|
Operating income of
$391.2
increased
5%
, or
$19.6
, and operating margin of
19.8%
decreased
110
basis points (bp). On a non-GAAP basis, operating income of
$405.6
increased
4%
, or
$13.9
, and operating margin of
20.5%
decreased
150
bp.
|
•
|
Adjusted EBITDA of
$651.6
increased
2%
, or
$13.7
. Adjusted EBITDA margin of
32.9%
decreased
300
bp.
|
•
|
Income from continuing operations of
$304.4
increased
9%
, or
$25.5
, and diluted earnings per share of
$1.39
increased
9%
, or
$.11
. On a non-GAAP basis, income from continuing operations of
$314.2
increased
5%
, or
$16.3
, and diluted earnings per share of
$1.43
increased
4%
, or
$.06
. A summary table of changes in diluted earnings per share is presented below.
|
•
|
We completed the sale of PMD to Evonik Industries AG on 3 January 2017.
|
•
|
We increased our quarterly dividend by 10% from $.86 to $.95 per share. This represents the 35
th
consecutive year that we have increased our dividend payment.
|
|
|
Three Months Ended
|
|
|
||||||||
|
|
31 March
|
|
Increase
|
||||||||
|
|
2017
|
|
2016
|
|
(Decrease)
|
||||||
Diluted Earnings per Share
|
|
|
|
|
|
|
||||||
Net Income (Loss)
|
|
$
|
9.70
|
|
|
$
|
(2.17
|
)
|
|
$
|
11.87
|
|
Income (Loss) from Discontinued Operations
|
|
8.31
|
|
|
(3.45
|
)
|
|
11.76
|
|
|||
Income from Continuing Operations – GAAP Basis
|
|
$
|
1.39
|
|
|
$
|
1.28
|
|
|
$
|
.11
|
|
Operating Income Impact (after-tax)
|
|
|
|
|
|
|
||||||
Underlying business
|
|
|
|
|
|
|
||||||
Volume
|
|
|
|
|
|
$
|
.08
|
|
||||
Price/raw materials
|
|
|
|
|
|
(.03
|
)
|
|||||
Costs
|
|
|
|
|
|
—
|
|
|||||
Currency
|
|
|
|
|
|
—
|
|
|||||
Business separation costs
|
|
|
|
|
|
.04
|
|
|||||
Cost reduction and asset actions
|
|
|
|
|
|
.01
|
|
|||||
Operating Income
|
|
|
|
|
|
$
|
.10
|
|
||||
Other (after-tax)
|
|
|
|
|
|
|
||||||
Equity affiliates' income
|
|
|
|
|
|
.01
|
|
|||||
Interest expense
|
|
|
|
|
|
(.02
|
)
|
|||||
Other non-operating income (expense), net
|
|
|
|
|
|
.03
|
|
|||||
Income tax
|
|
|
|
|
|
—
|
|
|||||
Weighted average diluted shares
|
|
|
|
|
|
(.01
|
)
|
|||||
Other
|
|
|
|
|
|
$
|
.01
|
|
||||
Total Change in Diluted Earnings per Share from Continuing Operations – GAAP Basis
|
|
|
|
|
|
$
|
.11
|
|
|
|
Three Months Ended
|
|
|
||||||||
|
|
31 March
|
|
Increase
|
|
|||||||
|
|
2017
|
|
2016
|
|
(Decrease)
|
|
|||||
Income from Continuing Operations – GAAP Basis
|
|
$
|
1.39
|
|
|
$
|
1.28
|
|
|
$
|
.11
|
|
Business separation costs
|
|
—
|
|
|
.04
|
|
|
(.04
|
)
|
|||
Cost reduction and asset actions
|
|
.03
|
|
|
.04
|
|
|
(.01
|
)
|
|||
Pension settlement loss
|
|
.01
|
|
|
.01
|
|
|
—
|
|
|||
Income from Continuing Operations – Non-GAAP Basis
|
|
$
|
1.43
|
|
|
$
|
1.37
|
|
|
$
|
.06
|
|
|
|
Three Months Ended
|
|
|
|
|
|||||||||
|
|
31 March
|
|
|
|
|
|||||||||
|
|
2017
|
|
2016
|
|
$ Change
|
|
Change
|
|||||||
Sales
|
|
$
|
1,980.1
|
|
|
$
|
1,777.4
|
|
|
$
|
202.7
|
|
|
11
|
%
|
Operating income
|
|
391.2
|
|
|
371.6
|
|
|
19.6
|
|
|
5
|
%
|
|||
Operating margin
|
|
19.8
|
%
|
|
20.9
|
%
|
|
|
|
|
(110 bp)
|
|
|||
Equity affiliates’ income
|
|
34.2
|
|
|
32.3
|
|
|
1.9
|
|
|
6
|
%
|
|||
Non-GAAP Basis
|
|
|
|
|
|
|
|
|
|||||||
Adjusted EBITDA
|
|
$
|
651.6
|
|
|
$
|
637.9
|
|
|
$
|
13.7
|
|
|
2
|
%
|
Adjusted EBITDA margin
|
|
32.9
|
%
|
|
35.9
|
%
|
|
|
|
(300 bp)
|
|
||||
Adjusted Operating income
|
|
405.6
|
|
|
391.7
|
|
|
13.9
|
|
|
4
|
%
|
|||
Adjusted Operating margin
|
|
20.5
|
%
|
|
22.0
|
%
|
|
|
|
(150 bp)
|
|
|
% Change from
Prior Year
|
|
Underlying business
|
|
|
Volume
|
7
|
%
|
Price
|
—
|
%
|
Currency
|
(1
|
)%
|
Energy and natural gas cost pass-through
|
5
|
%
|
Total Consolidated Change
|
11
|
%
|
|
|
Three Months Ended
|
||||||
|
|
31 March
|
||||||
|
|
2017
|
|
2016
|
||||
Interest incurred
|
|
$
|
36.4
|
|
|
$
|
36.2
|
|
Less: capitalized interest
|
|
5.9
|
|
|
10.5
|
|
||
Interest expense
|
|
$
|
30.5
|
|
|
$
|
25.7
|
|
|
|
Three Months Ended
|
|
|
|
|
||||||||
|
|
31 March
|
|
|
|
|
||||||||
|
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
||||||
Sales
|
|
$
|
890.1
|
|
|
$
|
798.1
|
|
|
$
|
92.0
|
|
|
12%
|
Operating income
|
|
224.5
|
|
|
223.5
|
|
|
1.0
|
|
|
—%
|
|||
Operating margin
|
|
25.2
|
%
|
|
28.0
|
%
|
|
|
|
(280 bp)
|
||||
Equity affiliates’ income
|
|
13.0
|
|
|
7.7
|
|
|
5.3
|
|
|
69%
|
|||
Adjusted EBITDA
|
|
353.5
|
|
|
341.0
|
|
|
12.5
|
|
|
4%
|
|||
Adjusted EBITDA margin
|
|
39.7
|
%
|
|
42.7
|
%
|
|
|
|
(300 bp)
|
|
% Change from
Prior Year
|
|
Underlying business
|
|
|
Volume
|
1
|
%
|
Price
|
1
|
%
|
Currency
|
1
|
%
|
Energy and natural gas cost pass-through
|
9
|
%
|
Total Industrial Gases – Americas Sales Change
|
12
|
%
|
|
|
Three Months Ended
|
|
|
|
|
||||||||
|
|
31 March
|
|
|
|
|
||||||||
|
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
||||||
Sales
|
|
$
|
414.2
|
|
|
$
|
421.8
|
|
|
$
|
(7.6
|
)
|
|
(2)%
|
Operating income
|
|
86.5
|
|
|
90.0
|
|
|
(3.5
|
)
|
|
(4)%
|
|||
Operating margin
|
|
20.9
|
%
|
|
21.3
|
%
|
|
|
|
(40 bp)
|
||||
Equity affiliates’ income
|
|
8.3
|
|
|
7.2
|
|
|
1.1
|
|
|
15%
|
|||
Adjusted EBITDA
|
|
136.4
|
|
|
145.4
|
|
|
(9.0
|
)
|
|
(6)%
|
|||
Adjusted EBITDA margin
|
|
32.9
|
%
|
|
34.5
|
%
|
|
|
|
(160 bp)
|
|
% Change from
Prior Year
|
|
Underlying business
|
|
|
Volume
|
1
|
%
|
Price
|
—
|
%
|
Currency
|
(6
|
)%
|
Energy and natural gas cost pass-through
|
3
|
%
|
Total Industrial Gases – EMEA Sales Change
|
(2
|
)%
|
|
|
Three Months Ended
|
|
|
|
|
||||||||
|
|
31 March
|
|
|
|
|
||||||||
|
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
||||||
Sales
|
|
$
|
435.9
|
|
|
$
|
407.9
|
|
|
$
|
28.0
|
|
|
7%
|
Operating income
|
|
112.0
|
|
|
105.0
|
|
|
7.0
|
|
|
7%
|
|||
Operating margin
|
|
25.7
|
%
|
|
25.7
|
%
|
|
|
|
— bp
|
||||
Equity affiliates’ income
|
|
12.9
|
|
|
17.4
|
|
|
(4.5
|
)
|
|
(26)%
|
|||
Adjusted EBITDA
|
|
174.2
|
|
|
171.2
|
|
|
3.0
|
|
|
2%
|
|||
Adjusted EBITDA margin
|
|
40.0
|
%
|
|
42.0
|
%
|
|
|
|
(200 bp)
|
|
% Change from
Prior Year
|
|
Underlying business
|
|
|
Volume
|
8
|
%
|
Price
|
—
|
%
|
Currency
|
(1
|
)%
|
Energy and natural gas cost pass-through
|
—
|
%
|
Total Industrial Gases – Asia Sales Change
|
7
|
%
|
|
|
Three Months Ended
|
|
|
|
|
||||||||
|
|
31 March
|
|
|
|
|
||||||||
|
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
||||||
Sales
|
|
$
|
216.5
|
|
|
$
|
86.6
|
|
|
$
|
129.9
|
|
|
150%
|
Operating income (loss)
|
|
22.8
|
|
|
(10.8
|
)
|
|
33.6
|
|
|
311%
|
|||
Adjusted EBITDA
|
|
24.5
|
|
|
(9.0
|
)
|
|
33.5
|
|
|
372%
|
•
|
Sales of
$3,862.6
increased
6%
, or
$218.9
, as underlying sales growth of 5% and higher energy and natural gas cost pass-through to customers of 3% were partially offset by unfavorable currency impacts of 2%. The underlying sales growth was primarily from higher volumes in the Industrial Gases – Global and Industrial Gases – Asia segments.
|
•
|
Operating income of
$719.3
decreased
3%
, or
$24.8
, and operating margin of
18.6%
decreased
180
bp. On a non-GAAP basis, operating income of
$813.9
increased
5%
, or
$37.7
, and operating margin of
21.1%
decreased
20 bp
.
|
•
|
Adjusted EBITDA of
$1,304.0
,
increased
3%
, or
$33.6
, primarily due to favorable cost performance. Adjusted EBITDA margin of
33.8%
decreased
110 bp
.
|
•
|
Income from continuing operations of
$556.0
decreased
1%
, or
$3.8
, and diluted earnings per share of
$2.53
decreased
2%
, or
$.04
. On a non-GAAP basis, income from continuing operations of
$636.2
increased
8%
, or
$45.4
, and diluted earnings per share of
$2.90
increased
7%
, or
$.19
. 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.
|
•
|
We completed the sale of PMD to Evonik Industries AG on 3 January 2017.
|
•
|
We increased our quarterly dividend by 10% from $.86 to $.95 per share. This represents the 35th consecutive year that we have increased our dividend payment.
|
|
|
Six Months Ended
|
|
|
||||||||
|
|
31 March
|
|
Increase
|
||||||||
|
|
2017
|
|
2016
|
|
(Decrease)
|
||||||
Diluted Earnings per Share
|
|
|
|
|
|
|
||||||
Net Income (Loss)
|
|
$
|
11.06
|
|
|
$
|
(.51
|
)
|
|
$
|
11.57
|
|
Income (Loss) from Discontinued Operations
|
|
8.53
|
|
|
(3.08
|
)
|
|
11.61
|
|
|||
Income from Continuing Operations – GAAP Basis
|
|
$
|
2.53
|
|
|
$
|
2.57
|
|
|
$
|
(.04
|
)
|
Operating Income Impact (after-tax)
|
|
|
|
|
|
|
||||||
Underlying business
|
|
|
|
|
|
|
||||||
Volume
|
|
|
|
|
|
$
|
.01
|
|
||||
Price/raw materials
|
|
|
|
|
|
(.03
|
)
|
|||||
Costs
|
|
|
|
|
|
.20
|
|
|||||
Currency
|
|
|
|
|
|
(.04
|
)
|
|||||
Business separation costs
|
|
|
|
|
|
(.03
|
)
|
|||||
Cost reduction and asset actions
|
|
|
|
|
|
(.19
|
)
|
|||||
Operating Income
|
|
|
|
|
|
$
|
(.08
|
)
|
||||
Other (after-tax)
|
|
|
|
|
|
|
||||||
Equity affiliates' income
|
|
|
|
|
|
.02
|
|
|||||
Interest expense
|
|
|
|
|
|
(.04
|
)
|
|||||
Other non-operating income (expense), net
|
|
|
|
|
|
.03
|
|
|||||
Income tax
|
|
|
|
|
|
.06
|
|
|||||
Tax costs associated with business separation
|
|
|
|
|
|
(.01
|
)
|
|||||
Weighted average diluted shares
|
|
|
|
|
|
(.02
|
)
|
|||||
Other
|
|
|
|
|
|
$
|
.04
|
|
||||
Total Change in Diluted Earnings per Share from Continuing Operations – GAAP Basis
|
|
|
|
|
|
$
|
(.04
|
)
|
|
|
Six Months Ended
|
|
|
||||||||
|
|
31 March
|
|
Increase
|
||||||||
|
|
2017
|
|
2016
|
|
(Decrease)
|
||||||
Income from Continuing Operations – GAAP Basis
|
|
$
|
2.53
|
|
|
$
|
2.57
|
|
|
$
|
(.04
|
)
|
Business separation costs
|
|
.12
|
|
|
.09
|
|
|
.03
|
|
|||
Tax costs associated with business separation
|
|
.01
|
|
|
—
|
|
|
.01
|
|
|||
Cost reduction and asset actions
|
|
.23
|
|
|
.04
|
|
|
.19
|
|
|||
Pension settlement loss
|
|
.01
|
|
|
.01
|
|
|
—
|
|
|||
Income from Continuing Operations – Non-GAAP Basis
|
|
$
|
2.90
|
|
|
$
|
2.71
|
|
|
$
|
.19
|
|
|
|
Six Months Ended
|
|
|
|
|
|||||||||
|
|
31 March
|
|
|
|
|
|||||||||
|
|
2017
|
|
2016
|
|
$ Change
|
|
Change
|
|||||||
Sales
|
|
$
|
3,862.6
|
|
|
$
|
3,643.7
|
|
|
$
|
218.9
|
|
|
6
|
%
|
Operating income
|
|
719.3
|
|
|
744.1
|
|
|
(24.8
|
)
|
|
(3
|
)%
|
|||
Operating margin
|
|
18.6
|
%
|
|
20.4
|
%
|
|
|
|
(180 bp)
|
|
||||
Equity affiliates’ income
|
|
72.2
|
|
|
65.6
|
|
|
6.6
|
|
|
10
|
%
|
|||
Non-GAAP Basis
|
|
|
|
|
|
|
|
|
|||||||
Adjusted EBITDA
|
|
1,304.0
|
|
|
1,270.4
|
|
|
33.6
|
|
|
3
|
%
|
|||
Adjusted EBITDA margin
|
|
33.8
|
%
|
|
34.9
|
%
|
|
|
|
(110 bp)
|
|
||||
Adjusted Operating income
|
|
813.9
|
|
|
776.2
|
|
|
37.7
|
|
|
5
|
%
|
|||
Adjusted Operating margin
|
|
21.1
|
%
|
|
21.3
|
%
|
|
|
|
(20 bp)
|
|
|
% Change from
Prior Year
|
|
Underlying business
|
|
|
Volume
|
5
|
%
|
Price
|
—
|
|
Currency
|
(2
|
)%
|
Energy and natural gas cost pass-through
|
3
|
%
|
Total Consolidated Change
|
6
|
%
|
|
|
Six Months Ended
|
||||||
|
|
31 March
|
||||||
|
|
2017
|
|
2016
|
||||
Interest incurred
|
|
$
|
72.2
|
|
|
$
|
72.0
|
|
Less: capitalized interest
|
|
12.2
|
|
|
24.1
|
|
||
Interest expense
|
|
$
|
60.0
|
|
|
$
|
47.9
|
|
|
|
Six Months Ended
|
|
|
|
|
|||||||||
|
|
31 March
|
|
|
|
|
|||||||||
|
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|||||||
Sales
|
|
$
|
1,754.0
|
|
|
$
|
1,634.4
|
|
|
$
|
119.6
|
|
|
7
|
%
|
Operating income
|
|
448.3
|
|
|
435.1
|
|
|
13.2
|
|
|
3
|
%
|
|||
Operating margin
|
|
25.6
|
%
|
|
26.6
|
%
|
|
|
|
(100 bp)
|
|
||||
Equity affiliates’ income
|
|
27.7
|
|
|
22.2
|
|
|
5.5
|
|
|
25
|
%
|
|||
Adjusted EBITDA
|
|
703.8
|
|
|
676.1
|
|
|
27.7
|
|
|
4
|
%
|
|||
Adjusted EBITDA margin
|
|
40.1
|
%
|
|
41.4
|
%
|
|
|
|
(130 bp)
|
|
|
% Change from
Prior Year
|
|
Underlying business
|
|
|
Volume
|
(1
|
)%
|
Price
|
—
|
%
|
Currency
|
1
|
%
|
Energy and natural gas cost pass-through
|
7
|
%
|
Total Industrial Gases – Americas Sales Change
|
7
|
%
|
|
|
Six Months Ended
|
|
|
|
|
|||||||||
|
|
31 March
|
|
|
|
|
|||||||||
|
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|||||||
Sales
|
|
$
|
813.9
|
|
|
$
|
861.4
|
|
|
$
|
(47.5
|
)
|
|
(6
|
)%
|
Operating income
|
|
174.5
|
|
|
182.3
|
|
|
(7.8
|
)
|
|
(4
|
)%
|
|||
Operating margin
|
|
21.4
|
%
|
|
21.2
|
%
|
|
|
|
20 bp
|
|
||||
Equity affiliates’ income
|
|
17.8
|
|
|
14.8
|
|
|
3.0
|
|
|
20
|
%
|
|||
Adjusted EBITDA
|
|
276.1
|
|
|
292.1
|
|
|
(16.0
|
)
|
|
(5
|
)%
|
|||
Adjusted EBITDA margin
|
|
33.9
|
%
|
|
33.9
|
%
|
|
|
|
— bp
|
|
|
% Change from
Prior Year
|
|
Underlying business
|
|
|
Volume
|
(1
|
)%
|
Price
|
—
|
%
|
Currency
|
(6
|
)%
|
Energy and natural gas cost pass-through
|
1
|
%
|
Total Industrial Gases – EMEA Sales Change
|
(6
|
)%
|
|
|
Six Months Ended
|
|
|
|
|
|||||||||
|
|
31 March
|
|
|
|
|
|||||||||
|
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|||||||
Sales
|
|
$
|
874.2
|
|
|
$
|
822.5
|
|
|
$
|
51.7
|
|
|
6
|
%
|
Operating income
|
|
230.1
|
|
|
222.3
|
|
|
7.8
|
|
|
4
|
%
|
|||
Operating margin
|
|
26.3
|
%
|
|
27.0
|
%
|
|
|
|
(70 bp)
|
|
||||
Equity affiliates’ income
|
|
26.4
|
|
|
29.1
|
|
|
(2.7
|
)
|
|
(9
|
)%
|
|||
Adjusted EBITDA
|
|
352.5
|
|
|
352.1
|
|
|
.4
|
|
|
—
|
%
|
|||
Adjusted EBITDA margin
|
|
40.3
|
%
|
|
42.8
|
%
|
|
|
|
(250 bp)
|
|
|
% Change from
Prior Year
|
|
Underlying business
|
|
|
Volume
|
9
|
%
|
Price
|
(1
|
)%
|
Currency
|
(2
|
)%
|
Energy and natural gas cost pass-through
|
—
|
|
Total Industrial Gases – Asia Sales Change
|
6
|
%
|
|
|
Six Months Ended
|
|
|
|
|
|||||||||
|
|
31 March
|
|
|
|
|
|||||||||
|
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|||||||
Sales
|
|
$
|
364.4
|
|
|
$
|
190.9
|
|
|
$
|
173.5
|
|
|
91
|
%
|
Operating income (loss)
|
|
31.0
|
|
|
(30.1
|
)
|
|
61.1
|
|
|
203
|
%
|
|||
Adjusted EBITDA
|
|
35.0
|
|
|
(26.7
|
)
|
|
61.7
|
|
|
231
|
%
|
|
|
Six Months Ended
|
|
|
|
|
|||||||||
|
|
31 March
|
|
|
|
|
|||||||||
|
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|||||||
Sales
|
|
$
|
56.1
|
|
|
$
|
134.5
|
|
|
$
|
(78.4
|
)
|
|
(58
|
)%
|
Operating income (loss)
|
|
(70.0
|
)
|
|
(33.4
|
)
|
|
(36.6
|
)
|
|
(110
|
)%
|
|||
Adjusted EBITDA
|
|
(63.4
|
)
|
|
(23.2
|
)
|
|
(40.2
|
)
|
|
(173
|
)%
|
|
Continuing Operations
|
|||||||||||||
|
Three Months Ended 31 March
|
|||||||||||||
2017 vs. 2016
|
Operating
Income
|
Operating
Margin
(A)
|
Income Tax
Provision (B) |
Net
Income
|
Diluted
EPS
|
|||||||||
2017 GAAP
|
$
|
391.2
|
|
19.8
|
%
|
$
|
94.5
|
|
$
|
304.4
|
|
$
|
1.39
|
|
2016 GAAP
|
371.6
|
|
20.9
|
%
|
93.5
|
|
278.9
|
|
1.28
|
|
||||
Change GAAP
|
$
|
19.6
|
|
(110
|
)bp
|
$
|
1.0
|
|
$
|
25.5
|
|
$
|
.11
|
|
% Change GAAP
|
5
|
%
|
|
|
9
|
%
|
9
|
%
|
||||||
2017 GAAP
|
$
|
391.2
|
|
19.8
|
%
|
$
|
94.5
|
|
$
|
304.4
|
|
$
|
1.39
|
|
Cost reduction and asset actions
|
10.3
|
|
.5
|
%
|
3.1
|
|
7.2
|
|
.03
|
|
||||
Pension settlement loss
|
4.1
|
|
.2
|
%
|
1.5
|
|
2.6
|
|
.01
|
|
||||
2017 Non-GAAP Measure
|
$
|
405.6
|
|
20.5
|
%
|
$
|
99.1
|
|
$
|
314.2
|
|
$
|
1.43
|
|
2016 GAAP
|
$
|
371.6
|
|
20.9
|
%
|
$
|
93.5
|
|
$
|
278.9
|
|
$
|
1.28
|
|
Business separation costs
|
7.4
|
|
.4
|
%
|
(1.5
|
)
|
8.9
|
|
.04
|
|
||||
Cost reduction and asset actions
|
10.7
|
|
.6
|
%
|
1.9
|
|
8.8
|
|
.04
|
|
||||
Pension settlement loss
|
2.0
|
|
.1
|
%
|
.7
|
|
1.3
|
|
.01
|
|
||||
2016 Non-GAAP Measure
|
$
|
391.7
|
|
22.0
|
%
|
$
|
94.6
|
|
$
|
297.9
|
|
$
|
1.37
|
|
Change Non-GAAP Measure
|
$
|
13.9
|
|
(150
|
)bp
|
$
|
4.5
|
|
$
|
16.3
|
|
$
|
.06
|
|
% Change Non-GAAP Measure
|
4
|
%
|
|
|
5
|
%
|
4
|
%
|
|
|
|
|
|
|
|||||||||
|
Continuing Operations
|
|||||||||||||
|
Six Months Ended 31 March
|
|||||||||||||
2017 vs. 2016
|
Operating
Income
|
Operating
Margin
(A)
|
Income Tax
Provision (B) |
Net
Income
|
Diluted
EPS
|
|||||||||
2017 GAAP
|
$
|
719.3
|
|
18.6
|
%
|
$
|
172.9
|
|
$
|
556.0
|
|
$
|
2.53
|
|
2016 GAAP
|
744.1
|
|
20.4
|
%
|
189.9
|
|
559.8
|
|
2.57
|
|
||||
Change GAAP
|
$
|
(24.8
|
)
|
(180
|
)bp
|
$
|
(17.0
|
)
|
$
|
(3.8
|
)
|
$
|
(.04
|
)
|
% Change GAAP
|
(3
|
)%
|
|
|
(1
|
)%
|
(2
|
)%
|
||||||
2017 GAAP
|
$
|
719.3
|
|
18.6
|
%
|
$
|
172.9
|
|
$
|
556.0
|
|
$
|
2.53
|
|
Business separation costs
|
30.2
|
|
.8
|
%
|
3.7
|
|
26.5
|
|
.12
|
|
||||
Tax costs associated with business separation
|
—
|
|
—
|
%
|
(2.7
|
)
|
2.7
|
|
.01
|
|
||||
Cost reduction and asset actions
|
60.3
|
|
1.6
|
%
|
11.9
|
|
48.4
|
|
.23
|
|
||||
Pension settlement loss
|
4.1
|
|
.1
|
%
|
1.5
|
|
2.6
|
|
.01
|
|
||||
2017 Non-GAAP Measure
|
$
|
813.9
|
|
21.1
|
%
|
$
|
187.3
|
|
$
|
636.2
|
|
$
|
2.90
|
|
2016 GAAP
|
$
|
744.1
|
|
20.4
|
%
|
$
|
189.9
|
|
$
|
559.8
|
|
$
|
2.57
|
|
Business separation costs
|
19.4
|
|
.5
|
%
|
(1.5
|
)
|
20.9
|
|
.09
|
|
||||
Cost reduction and asset actions
|
10.7
|
|
.3
|
%
|
1.9
|
|
8.8
|
|
.04
|
|
||||
Pension settlement loss
|
2.0
|
|
.1
|
%
|
.7
|
|
1.3
|
|
.01
|
|
||||
2016 Non-GAAP Measure
|
$
|
776.2
|
|
21.3
|
%
|
$
|
191.0
|
|
$
|
590.8
|
|
$
|
2.71
|
|
Change Non-GAAP Measure
|
$
|
37.7
|
|
(20
|
)bp
|
$
|
(3.7
|
)
|
$
|
45.4
|
|
$
|
.19
|
|
% Change Non-GAAP Measure
|
5
|
%
|
|
|
8
|
%
|
7
|
%
|
(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
|
Six Months Ended
|
||||||||||
|
31 March
|
31 March
|
||||||||||
|
2017
|
2016
|
2017
|
2016
|
||||||||
Income from Continuing Operations
(A)
|
$
|
310.1
|
|
$
|
284.7
|
|
$
|
568.3
|
|
$
|
571.9
|
|
Add: Interest expense
|
30.5
|
|
25.7
|
|
60.0
|
|
47.9
|
|
||||
Less: Other non-operating income (expense), net
|
9.7
|
|
—
|
|
9.7
|
|
—
|
|
||||
Add: Income tax provision
|
94.5
|
|
93.5
|
|
172.9
|
|
189.9
|
|
||||
Add: Depreciation and amortization
|
211.8
|
|
213.9
|
|
417.9
|
|
428.6
|
|
||||
Add: Business separation costs
|
—
|
|
7.4
|
|
30.2
|
|
19.4
|
|
||||
Add: Cost reduction and asset actions
|
10.3
|
|
10.7
|
|
60.3
|
|
10.7
|
|
||||
Add: Pension settlement loss
|
4.1
|
|
2.0
|
|
4.1
|
|
2.0
|
|
||||
Adjusted EBITDA
|
$
|
651.6
|
|
$
|
637.9
|
|
$
|
1,304.0
|
|
$
|
1,270.4
|
|
Change GAAP
|
|
|
|
|
||||||||
Income from continuing operations change
|
$
|
25.4
|
|
|
$
|
(3.6
|
)
|
|
||||
Income from continuing operations % change
|
9
|
%
|
|
(1
|
)%
|
|
||||||
Change Non-GAAP
|
|
|
|
|
||||||||
Adjusted EBITDA change
|
$
|
13.7
|
|
|
$
|
33.6
|
|
|
||||
Adjusted EBITDA % change
|
2
|
%
|
|
3
|
%
|
|
(A)
|
Includes net income attributable to noncontrolling interests.
|
|
Industrial
Gases– Americas |
Industrial
Gases– EMEA |
Industrial
Gases– Asia |
Industrial
Gases– Global |
Corporate
and other |
Segment
Total |
||||||||||||
GAAP MEASURE
|
|
|
|
|
|
|
||||||||||||
Three Months Ended 31 March 2017
|
||||||||||||||||||
Operating income (loss)
|
$
|
224.5
|
|
$
|
86.5
|
|
$
|
112.0
|
|
$
|
22.8
|
|
$
|
(40.2
|
)
|
$
|
405.6
|
|
Operating margin
|
25.2
|
%
|
20.9
|
%
|
25.7
|
%
|
|
|
20.5
|
%
|
||||||||
Three Months Ended 31 March 2016
|
||||||||||||||||||
Operating income (loss)
|
$
|
223.5
|
|
$
|
90.0
|
|
$
|
105.0
|
|
$
|
(10.8
|
)
|
$
|
(16.0
|
)
|
$
|
391.7
|
|
Operating margin
|
28.0
|
%
|
21.3
|
%
|
25.7
|
%
|
|
|
22.0
|
%
|
||||||||
Operating income (loss) change
|
$
|
1.0
|
|
$
|
(3.5
|
)
|
$
|
7.0
|
|
$
|
33.6
|
|
$
|
(24.2
|
)
|
$
|
13.9
|
|
Operating income (loss) % change
|
—
|
%
|
(4
|
)%
|
7
|
%
|
311
|
%
|
(151
|
)%
|
4
|
%
|
||||||
Operating margin change
|
(280
|
) bp
|
(40
|
) bp
|
—
|
|
|
|
(150
|
) bp
|
||||||||
NON-GAAP MEASURE
|
|
|
|
|
|
|
||||||||||||
Three Months Ended 31 March 2017
|
||||||||||||||||||
Operating income (loss)
|
$
|
224.5
|
|
$
|
86.5
|
|
$
|
112.0
|
|
$
|
22.8
|
|
$
|
(40.2
|
)
|
$
|
405.6
|
|
Add: Depreciation and amortization
|
116.0
|
|
41.6
|
|
49.3
|
|
1.7
|
|
3.2
|
|
211.8
|
|
||||||
Add: Equity affiliates' income
|
13.0
|
|
8.3
|
|
12.9
|
|
—
|
|
—
|
|
34.2
|
|
||||||
Adjusted EBITDA
|
$
|
353.5
|
|
$
|
136.4
|
|
$
|
174.2
|
|
$
|
24.5
|
|
$
|
(37.0
|
)
|
$
|
651.6
|
|
Adjusted EBITDA margin
|
39.7
|
%
|
32.9
|
%
|
40.0
|
%
|
|
|
32.9
|
%
|
||||||||
Three Months Ended 31 March 2016
|
||||||||||||||||||
Operating income (loss)
|
$
|
223.5
|
|
$
|
90.0
|
|
$
|
105.0
|
|
$
|
(10.8
|
)
|
$
|
(16.0
|
)
|
$
|
391.7
|
|
Add: Depreciation and amortization
|
109.8
|
|
48.2
|
|
48.8
|
|
1.8
|
|
5.3
|
|
213.9
|
|
||||||
Add: Equity affiliates' income
|
7.7
|
|
7.2
|
|
17.4
|
|
—
|
|
—
|
|
32.3
|
|
||||||
Adjusted EBITDA
|
$
|
341.0
|
|
$
|
145.4
|
|
$
|
171.2
|
|
$
|
(9.0
|
)
|
$
|
(10.7
|
)
|
$
|
637.9
|
|
Adjusted EBITDA margin
|
42.7
|
%
|
34.5
|
%
|
42.0
|
%
|
|
|
35.9
|
%
|
||||||||
Adjusted EBITDA change
|
$
|
12.5
|
|
$
|
(9.0
|
)
|
$
|
3.0
|
|
$
|
33.5
|
|
$
|
(26.3
|
)
|
$
|
13.7
|
|
Adjusted EBITDA % change
|
4
|
%
|
(6
|
)%
|
2
|
%
|
372
|
%
|
(246
|
)%
|
2
|
%
|
||||||
Adjusted EBITDA margin change
|
(300
|
) bp
|
(160
|
) bp
|
(200
|
) bp
|
|
|
(300
|
) bp
|
|
Industrial
Gases– Americas |
Industrial
Gases– EMEA |
Industrial
Gases– Asia |
Industrial
Gases– Global |
Corporate
and other |
Segment
Total |
||||||||||||
GAAP MEASURE
|
|
|
|
|
|
|
||||||||||||
Six Months Ended 31 March 2017
|
||||||||||||||||||
Operating income (loss)
|
$
|
448.3
|
|
$
|
174.5
|
|
$
|
230.1
|
|
$
|
31.0
|
|
$
|
(70.0
|
)
|
$
|
813.9
|
|
Operating margin
|
25.6
|
%
|
21.4
|
%
|
26.3
|
%
|
|
|
21.1
|
%
|
||||||||
Six Months Ended 31 March 2016
|
||||||||||||||||||
Operating income (loss)
|
$
|
435.1
|
|
$
|
182.3
|
|
$
|
222.3
|
|
$
|
(30.1
|
)
|
$
|
(33.4
|
)
|
$
|
776.2
|
|
Operating margin
|
26.6
|
%
|
21.2
|
%
|
27.0
|
%
|
|
|
21.3
|
%
|
||||||||
Operating income (loss) change
|
$
|
13.2
|
|
$
|
(7.8
|
)
|
$
|
7.8
|
|
$
|
61.1
|
|
$
|
(36.6
|
)
|
$
|
37.7
|
|
Operating income (loss) % change
|
3
|
%
|
(4
|
)%
|
4
|
%
|
203
|
%
|
(110
|
)%
|
5
|
%
|
||||||
Operating margin change
|
(100
|
) bp
|
20
|
bp
|
(70
|
) bp
|
|
|
(20
|
) bp
|
||||||||
NON-GAAP MEASURE
|
|
|
|
|
|
|
||||||||||||
Six Months Ended 31 March 2017
|
||||||||||||||||||
Operating income (loss)
|
$
|
448.3
|
|
$
|
174.5
|
|
$
|
230.1
|
|
$
|
31.0
|
|
$
|
(70.0
|
)
|
$
|
813.9
|
|
Add: Depreciation and amortization
|
227.8
|
|
83.8
|
|
96.0
|
|
3.7
|
|
6.6
|
|
417.9
|
|
||||||
Add: Equity affiliates' income
|
27.7
|
|
17.8
|
|
26.4
|
|
.3
|
|
—
|
|
72.2
|
|
||||||
Adjusted EBITDA
|
$
|
703.8
|
|
$
|
276.1
|
|
$
|
352.5
|
|
$
|
35.0
|
|
$
|
(63.4
|
)
|
$
|
1,304.0
|
|
Adjusted EBITDA margin
|
40.1
|
%
|
33.9
|
%
|
40.3
|
%
|
|
|
33.8
|
%
|
||||||||
Six Months Ended 31 March 2016
|
||||||||||||||||||
Operating income (loss)
|
$
|
435.1
|
|
$
|
182.3
|
|
$
|
222.3
|
|
$
|
(30.1
|
)
|
$
|
(33.4
|
)
|
$
|
776.2
|
|
Add: Depreciation and amortization
|
218.8
|
|
95.0
|
|
100.7
|
|
3.9
|
|
10.2
|
|
428.6
|
|
||||||
Add: Equity affiliates' income (loss)
|
22.2
|
|
14.8
|
|
29.1
|
|
(.5
|
)
|
—
|
|
65.6
|
|
||||||
Adjusted EBITDA
|
$
|
676.1
|
|
$
|
292.1
|
|
$
|
352.1
|
|
$
|
(26.7
|
)
|
$
|
(23.2
|
)
|
$
|
1,270.4
|
|
Adjusted EBITDA margin
|
41.4
|
%
|
33.9
|
%
|
42.8
|
%
|
|
|
34.9
|
%
|
||||||||
Adjusted EBITDA change
|
$
|
27.7
|
|
$
|
(16.0
|
)
|
$
|
.4
|
|
$
|
61.7
|
|
$
|
(40.2
|
)
|
$
|
33.6
|
|
Adjusted EBITDA % change
|
4
|
%
|
(5
|
)%
|
—
|
%
|
231
|
%
|
(173
|
)%
|
3
|
%
|
||||||
Adjusted EBITDA margin change
|
(130
|
) bp
|
—
|
|
(250
|
) bp
|
|
|
(110
|
) bp
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
31 March
|
|
31 March
|
||||||||||||
Operating Income
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Segment total
|
|
$
|
405.6
|
|
|
$
|
391.7
|
|
|
$
|
813.9
|
|
|
$
|
776.2
|
|
Business separation costs
|
|
—
|
|
|
(7.4
|
)
|
|
(30.2
|
)
|
|
(19.4
|
)
|
||||
Cost reduction and asset actions
|
|
(10.3
|
)
|
|
(10.7
|
)
|
|
(60.3
|
)
|
|
(10.7
|
)
|
||||
Pension settlement loss
|
|
(4.1
|
)
|
|
(2.0
|
)
|
|
(4.1
|
)
|
|
(2.0
|
)
|
||||
Consolidated Total
|
|
$
|
391.2
|
|
|
$
|
371.6
|
|
|
$
|
719.3
|
|
|
$
|
744.1
|
|
|
Effective Tax Rate
|
||||||||||||
|
Three Months Ended
31 March |
|
Six Months Ended
31 March |
||||||||||
|
2017
|
2016
|
|
2017
|
2016
|
||||||||
Income Tax Provision—GAAP
|
$
|
94.5
|
|
$
|
93.5
|
|
|
$
|
172.9
|
|
$
|
189.9
|
|
Income From Continuing Operations Before Taxes—GAAP
|
$
|
404.6
|
|
$
|
378.2
|
|
|
$
|
741.2
|
|
$
|
761.8
|
|
Effective Tax Rate—GAAP
|
23.4
|
%
|
24.7
|
%
|
|
23.3
|
%
|
24.9
|
%
|
||||
Income Tax Provision—GAAP
|
$
|
94.5
|
|
$
|
93.5
|
|
|
$
|
172.9
|
|
$
|
189.9
|
|
Business separation costs
|
—
|
|
(1.5
|
)
|
|
3.7
|
|
(1.5
|
)
|
||||
Tax costs associated with business separation
|
—
|
|
—
|
|
|
(2.7
|
)
|
—
|
|
||||
Cost reduction and asset actions
|
3.1
|
|
1.9
|
|
|
11.9
|
|
1.9
|
|
||||
Pension settlement loss
|
1.5
|
|
.7
|
|
|
1.5
|
|
.7
|
|
||||
Income Tax Provision—Non-GAAP Measure
|
$
|
99.1
|
|
$
|
94.6
|
|
|
$
|
187.3
|
|
$
|
191.0
|
|
Income From Continuing Operations Before Taxes—GAAP
|
$
|
404.6
|
|
$
|
378.2
|
|
|
$
|
741.2
|
|
$
|
761.8
|
|
Business separation costs
|
—
|
|
7.4
|
|
|
30.2
|
|
19.4
|
|
||||
Cost reduction and asset actions
|
10.3
|
|
10.7
|
|
|
60.3
|
|
10.7
|
|
||||
Pension settlement loss
|
4.1
|
|
2.0
|
|
|
4.1
|
|
2.0
|
|
||||
Income From Continuing Operations Before Taxes—Non-GAAP Measure
|
$
|
419.0
|
|
$
|
398.3
|
|
|
$
|
835.8
|
|
$
|
793.9
|
|
Effective Tax Rate—Non-GAAP Measure
|
23.7
|
%
|
23.8
|
%
|
|
22.4
|
%
|
24.1
|
%
|
|
|
Six Months Ended
|
||||
|
|
31 March
|
||||
|
|
2017
|
|
2016
|
||
Additions to plant and equipment
|
|
$532.2
|
|
$472.0
|
||
Investment in and advances to unconsolidated affiliates
|
|
8.9
|
|
|
1.5
|
|
Capital expenditures on a GAAP basis
|
|
$541.1
|
|
$473.5
|
||
Capital lease expenditures
(A)
|
|
5.8
|
|
|
18.6
|
|
Capital expenditures on a Non-GAAP basis
|
|
$546.9
|
|
$492.1
|
(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
|
Revolving Credit Agreement dated as of March 31, 2017 for $2,500,000,000
|
|
|
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: April 27, 2017
|
By:
|
/s/ M. Scott Crocco
|
|
|
M. Scott Crocco
|
|
|
Executive Vice President and Chief Financial Officer
|
10.1
|
Revolving Credit Agreement dated as of March 31, 2017 for $2,500,000,000
|
|
|
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
|
|
Page
|
|
|
|
|
|
|
|
|
|
|
|
DEFINITIONS; CONSTRUCTION
|
|
|
|
|
Certain Definitions
|
||
Construction
|
||
Accounting Principles
|
||
|
|
|
|
|
|
|
|
|
|
THE REVOLVING CREDIT LOANS
|
|
|
|
|
Revolving Credit Commitments
|
||
Noteless Agreement; Evidence of Indebtedness
|
||
Making of Revolving Credit Loans
|
||
Swingline Loans
|
||
Fees; Reduction of the Revolving Credit Committed Amounts
|
||
Interest Rates
|
||
Conversion or Renewal of Interest Rate Options
|
||
Optional Prepayments
|
||
Interest Payment Dates
|
||
Increase in Total Revolving Credit Commitment
|
||
Letters of Credit
|
||
|
|
|
|
|
|
|
|
|
|
THE COMPETITIVE BID LOANS
|
|
|
|
|
Competitive Bid Loans
|
||
Competitive Bid Loan Procedures
|
||
Competitive Bid Loan Maturity Dates
|
||
Interest Rates for Competitive Bid Loans
|
||
Competitive Bid Loan Interest Payment Dates
|
||
Competitive Bid Register
|
||
Certain Provisions Relating to LIBOR-Based Loans
|
||
|
|
|
|
|
|
|
|
|
|
PROVISIONS APPLICABLE TO LOANS
|
|
|
|
|
Extension of Revolving Credit Maturity Date and Competitive Bid Expiration Date
|
||
Calculation of Dollar Equivalent Amounts
|
Mandatory Prepayments
|
||
Prepayment Procedures
|
||
Payments Generally; Interest on Overdue Amounts
|
||
Availability of Currencies
|
||
Changes in Law Rendering Certain Loans Unlawful
|
||
Additional Compensation in Certain Circumstances
|
||
Taxes
|
||
Funding by Branch, Subsidiary or Affiliate
|
||
Several Obligations
|
||
Defaulting Lenders
|
||
|
|
|
|
|
|
|
|
|
|
REPRESENTATIONS AND WARRANTIES
|
|
|
|
|
Financial Statements; No Material Adverse Change
|
||
Litigation
|
||
Due Organization
|
||
Consents and Approvals
|
||
Corporate Power, Authorization and Enforceability
|
||
ERISA
|
||
No Conflict
|
||
No Default
|
||
Anti-Corruption Laws and Sanctions
|
||
|
|
|
|
|
|
|
|
|
|
CONDITIONS OF CREDIT
|
|
|
|
|
Conditions to Initial Credit Events
|
||
Conditions to All Credit Events
|
||
Additional Conditions to Initial Credit Events of Other Borrowers
|
||
|
|
|
|
|
|
|
|
|
|
AFFIRMATIVE COVENANTS
|
|
|
|
|
Affirmative Covenants
|
||
|
|
|
|
|
|
|
|
|
|
NEGATIVE COVENANTS
|
|
|
|
|
Maximum Leverage Ratio
|
||
Disposal of Assets
|
||
Liens
|
|
|
|
|
|
|
|
EVENTS OF DEFAULT
|
|
|
|
|
Events of Default
|
||
Consequences of an Event of Default
|
||
|
|
|
|
|
|
|
|
|
|
PARENT GUARANTY
|
|
|
|
|
Guaranty and Suretyship
|
||
Obligations Absolute
|
||
Waivers, etc.
|
||
Reinstatement
|
||
No Stay
|
||
Payments
|
||
Subrogation, etc.
|
||
Continuing Agreement
|
||
|
|
|
|
|
|
|
|
|
|
THE ADMINISTRATIVE AGENT
|
|
|
|
|
Appointment
|
||
General Nature of the Administrative Agent’s Duties
|
||
Exercise of Powers
|
||
General Exculpatory Provisions
|
||
Administration by the Administrative Agent
|
||
Lender Not Relying on the Administrative Agent or Other Lenders
|
||
Indemnification
|
||
The Administrative Agent in its Individual Capacity
|
||
Lenders
|
||
Successor Administrative Agent
|
||
Calculations
|
||
The Administrative Agent’s Fees
|
||
Co-Syndication Agents; Co-Documentation Agents
|
||
|
|
|
|
|
|
|
|
|
|
MISCELLANEOUS
|
|
|
|
|
Holidays
|
||
Records
|
||
Amendments and Waivers
|
||
No Implied Waiver; Cumulative Remedies
|
||
Notices
|
Expenses; Indemnity; No Consequential Damages
|
||
Severability
|
||
Prior Understandings
|
||
Duration; Survival
|
||
Counterparts
|
||
Limitation on Payments
|
||
Set-Off
|
||
Sharing of Collections
|
||
Successors and Assigns; Participations; Assignments
|
||
Judgment Currency
|
||
Governing Law; Submission to Jurisdiction: Waiver of Jury Trial
|
||
USA PATRIOT Act Notification
|
||
Confidentiality
|
||
Platform
|
||
Termination of Existing Credit Agreement
|
||
Acknowledgement and Consent to Bail-In of EEA Financial Institutions
|
Schedule I
|
Pricing Schedule
|
Schedule II
|
Initial Other Borrowers
|
Schedule III
|
Administrative Agent’s Office
|
Schedule IV.A
|
Revolving Credit Committed Amounts
|
Schedule IV.B
|
Letter of Credit Committed Amounts
|
Schedule IV.C
|
Swingline Loans Committed Amounts
|
Schedule V
|
Mandatory Costs Rate Formula
|
Exhibit A
|
Form of Revolving Credit Note
|
Exhibit B
|
Form of Competitive Note
|
Exhibit C
|
Form of Competitive Bid Loan Quote Request
|
Exhibit D
|
Form of Competitive Bid Loan Quote
|
Exhibit E
|
Form of Assignment Agreement
|
Exhibit F
|
Form of Borrower Accession Instrument
|
Exhibit G
|
Form of Other Borrower Removal Notice
|
Exhibit H
|
Form of Amendment for an Increased or New Commitment
|
Exhibit I
|
Form of Standard Notice
|
Public Debt Ratings
|
Applicable Margin for Euro-Rate Loans, CDOR Loans and Swingline Loans
|
Applicable Margin for Base Rate Loans
|
Commitment Fee Rate
|
|||
≥AA- or Aa3
|
0.625
|
%
|
0.00
|
%
|
0.050
|
%
|
A+ or A1
|
0.750
|
%
|
0.00
|
%
|
0.060
|
%
|
A or A2
|
0.875
|
%
|
0.00
|
%
|
0.070
|
%
|
A- or A3
|
1.000
|
%
|
0.00
|
%
|
0.090
|
%
|
≤BBB+ or Baa1
|
1.125
|
%
|
0.125
|
%
|
0.125
|
%
|
*
|
or such other address and/or contact information as may be designated by the Administrative Agent with respect to any Designated Currency. In case of any such designation, the times specified in this Agreement shall, where relevant, be adjusted to the appropriate local times.
|
WELLS FARGO BANK, N.A.
|
$200,000,000
|
BNP PARIBAS
|
$200,000,000
|
DEUTSCHE BANK AG NEW YORK BRANCH
|
$200,000,000
|
HSBC BANK USA, N.A.
|
$200,000,000
|
MIZUHO BANK, LTD.
|
$200,000,000
|
BANK OF AMERICA, N.A.
|
$175,000,000
|
BARCLAYS BANK PLC
|
$175,000,000
|
CITIBANK, N.A.
|
$175,000,000
|
JPMORGAN CHASE BANK, N.A.
|
$175,000,000
|
SUMITOMO MITSUI BANKING CORPORATION
|
$175,000,000
|
THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.
|
$175,000,000
|
BANCO SANTANDER, S.A.
|
$75,000,000
|
BBVA, S.A. NEW YORK BRANCH
|
$75,000,000
|
ING BANK N.V., DUBLIN BRANCH
|
$75,000,000
|
INTESA SANPAOLO
|
$75,000,000
|
LLOYDS BANK PLC
|
$75,000,000
|
THE BANK OF NOVA SCOTIA
|
$75,000,000
|
TOTAL
|
$2,500,000,000
|
WELLS FARGO BANK, N.A.
|
$100,000,000
|
BNP PARIBAS
|
$100,000,000
|
DEUTSCHE BANK AG NEW YORK BRANCH
|
$100,000,000
|
HSBC BANK USA, N.A.
|
$100,000,000
|
MIZUHO BANK, LTD.
|
$100,000,000
|
TOTAL
|
$500,000,000
|
WELLS FARGO BANK, N.A.
|
$100,000,000
|
TOTAL
|
$100,000,000
|
1.
|
Amounts payable by reference to the Mandatory Costs Rate are additions to the interest rate to compensate Lenders for the cost of compliance with (a) the requirements of the Bank of England and/or the Financial Services Authority (or, in either case, any other authority which replaces all or any of its functions) or (b) the requirements of the European Central Bank.
|
2.
|
The Mandatory Costs Rate for any Lender lending from a lending office in a participating member state of the European Community relating to Economic and Monetary Union (other than the United Kingdom) that has adopted the Euro as its lawful currency will be the percentage reasonably determined by such Lender to be the cost (expressed as a percentage of that Lender’s participation in all Revolving Credit Loans made from such office) of complying with the minimum reserve requirements of the European Central Bank in respect of loans made from such office.
|
3.
|
The Mandatory Costs Rate for any Lender lending from a lending office in the United Kingdom will be calculated by such Lender as follows:
|
AB + C (B - D) + E x 0.01
|
100 - (A + C)
|
0.01
|
300
|
4.
|
For the purposes of this Schedule:
|
5.
|
In application of the above formulae, A, B, C and D will be included in the formulae as percentages (i.e. 5 percent will be included in the formula as 5 and not as 0.05). A negative result obtained by subtracting D from B shall be taken as zero. The resulting figures shall be rounded to four decimal places.
|
6.
|
The Administrative Agent may from time to time, after consultation with the Parent and the Lenders, determine and notify to all parties to the
|
To:
|
Wells Fargo Bank, N.A.,
as Administrative Agent |
Borrowing Date
|
Borrower
|
Principal Amount
1
|
Type
2
|
Interest Period
3
|
Currency
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
Each amount must be a Dollar Equivalent Amount of $5,000,000 or a higher integral multiple of $1,000,000.
|
2
|
Insert either “LIBOR-based Margin” (in the case of LIBOR-based Loans) or “Absolute Rate” (in the case of Absolute Rate Loans).
|
1.
|
Quoting Bank:
|
2.
|
Person to contact at Quoting Bank:
|
3.
|
We hereby offer to make Competitive Bid Loan(s) in the following principal amounts, for the following Interest Periods and at the following rates:
|
Borrowing Date
1
|
Borrower
|
Principal Amount
2
|
Type
3
|
Interest Period
4
|
Rate
5
|
Currency
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
As specified in the related Competitive Bid Loan Quote Request.
|
2
|
The principal amount bid for each Interest Period may not exceed the principal amount of Competitive Bid Loans requested. Bids must be made for a Dollar Equivalent Amount of at least $5,000,000 or a higher integral multiple of $1,000,000.
|
3
|
Indicate “LIBOR-based Margin” (in the case of LIBOR-based Loans) or “Absolute Rate” (in the case of Absolute Rate Loans).
|
4
|
Must be not less than seven days, as specified in the related Competitive Bid Loan Quote Request.
|
Aggregate Amount
of Commitment/Loans for all Lenders |
Amount of
Commitment/Loans Assigned |
Percentage of
Commitment/Loans Assigned |
$
|
$
|
%
|
$
|
$
|
%
|
$
|
$
|
%
|
3
|
To be changed to the successor Issuer if such Issuer above is replaced pursuant to ýSection 2.11(h) of the Credit Agreement.
|
4
|
To be changed to the successor Issuer if such Issuer above is replaced pursuant to ýSection 2.11(h) of the Credit Agreement.
|
5
|
To be changed to the successor Issuer if such Issuer above is replaced pursuant to ýSection 2.11(h) of the Credit Agreement.
|
6
|
To be changed to the successor Issuer if such Issuer above is replaced pursuant to ýSection 2.11(h) of the Credit Agreement.
|
7
|
To be added only if the consent of the Parent is required by the terms of the Credit Agreement.
|
TO:
|
Wells Fargo Bank, N.A.,
as Administrative Agent |
FROM:
|
[Name of additional Other Borrower]
Air Products and Chemicals, Inc. |
TO:
|
Wells Fargo Bank, N.A.,
as Administrative Agent |
FROM:
|
[Name of Other Borrower]
Air Products and Chemicals, Inc. |
1
|
To be changed to the successor Issuer or Swingline Lender if such Issuer or Swingline Lender above is replaced pursuant to Section 2.04(f) or ýSection 2.11(h) of the Credit Agreement.
|
2
|
To be changed to the successor Issuer if such Issuer above is replaced pursuant to ýSection 2.11(h) of the Credit Agreement.
|
3
|
To be changed to the successor Issuer if such Issuer above is replaced pursuant to ýSection 2.11(h) of the Credit Agreement.
|
4
|
To be changed to the successor Issuer if such Issuer above is replaced pursuant to ýSection 2.11(h) of the Credit Agreement.
|
5
|
To be changed to the successor Issuer if such Issuer above is replaced pursuant to ýSection 2.11(h) of the Credit Agreement.
|
6
|
To include any new Issuer pursuant to Section 2.11(j) of the Credit Agreement.
|
7
|
To include any new Swingline Lender pursuant to Section 2.04(e) of the Credit Agreement.
|
1.
|
Identity of Borrower:
|
2.
|
Designated Currency of borrowing:
|
3.
|
Date of borrowing: , 201_
|
4.
|
Interest rate Option(s) and principal amount(s) of borrowing:
2
|
£
(a)
|
Base Rate Portion $
|
£
(b)
|
Funding Segment of Euro-Rate Portion $ with a Funding Period of month(s)
|
£
(c)
|
Funding Segment of CDOR Portion $ with a Funding Period of month(s)
|
£
(d)
|
Swingline Loan bearing interest at the LIBOR Market Index Rate
|
5.
|
Type of Loans: [Revolving Credit Loan][Swingline Loan]
|
1
|
Form of Notice of Borrowing to be used for borrowings made pursuant to Section 2.03 of the Credit Agreement.
|
2
|
In the case of borrowings denominated in Dollars, the principal amount of borrowing shall be an integral multiple of $1,000,000 and not less than $5,000,000. In the case of borrowings denominated in a Designated Currency, the principal amount of borrowing shall have an aggregate Dollar Equivalent Amount not less than $5,000,000 and shall be an integral multiple of the amount determined by the Administrative Agent from time to time to be the basic unit in which such currency is traded in the eurocurrency market;
provided
that in the case of borrowings made to refinance the reimbursement of an LC Disbursement as contemplated by Section 2.10(d) of the Credit Agreement, such borrowings may be in the amount of such LC Disbursement.
|
1.
|
Date of conversion/continuation: , 201_
|
2.
|
Interest rate Option(s) and principal amount(s) of Loans being converted/continued:
2
|
£
(a)
|
Base Rate Portion $
|
£
(b)
|
Funding Segment of Euro-Rate Portion $ with a Funding Period of month(s)
|
£
(c)
|
Funding Segment of CDOR Portion $ with a Funding Period of month(s)
|
3.
|
Type of Loans being converted/continued: Revolving Credit Loans
|
4.
|
Nature of conversion/continuation:
|
£
(a)
|
Conversion of Base Rate Portion to Euro-Rate Loans with a new Funding Period of month(s) that commences on the conversion date.
|
£
(b)
|
Conversion of Funding Segment of Euro-Rate Portion to Base Rate Loans
3
|
£
(c)
|
Continuation of Funding Segment of Euro-Rate Portion with a new Funding Period of month(s).
4
|
1
|
Form of Notice of Conversion/Continuation to be used for conversion or continuation of any interest rate Option made pursuant to Section 2.06 of the Credit Agreement.
|
2
|
In the case of Loans denominated in Dollars, the amount to be converted or continued shall be an integral multiple of $1,000,000 and not less than $5,000,000. In the case of Loans denominated in a Designated Currency, the amount to be converted or continued shall have an aggregate Dollar Equivalent Amount not less than $5,000,000 and shall be an integral multiple of the amount determined by the Administrative Agent from time to time to be the basic unit in which such currency is traded in the eurocurrency market.
|
3
|
Conversions from Euro-Rate Option will take place at the expiration of the respective Funding Period.
|
4
|
Continuations of Euro-Rate Option will take place at the expiration of the respective Funding Period.
|
£
(d)
|
Continuation of Funding Segment of CDOR Portion with a new Funding Period of month(s).
5
|
|
|
Six Months Ended
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
31 March
|
|
Year Ended 30 September
|
||||||||||||||||||||
(Millions of dollars, except ratios)
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||||
Earnings:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income from continuing operations
(1)
|
|
$
|
568.3
|
|
|
$
|
1,122.0
|
|
|
$
|
965.9
|
|
|
$
|
691.0
|
|
|
$
|
900.0
|
|
|
$
|
832.2
|
|
Add (deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Provision for income taxes
|
|
172.9
|
|
|
432.6
|
|
|
300.2
|
|
|
258.1
|
|
|
275.1
|
|
|
221.1
|
|
||||||
Fixed charges, excluding capitalized interest
|
|
67.0
|
|
|
123.6
|
|
|
117.6
|
|
|
140.7
|
|
|
156.3
|
|
|
136.4
|
|
||||||
Capitalized interest amortized during the period
|
|
4.5
|
|
|
9.7
|
|
|
9.8
|
|
|
8.7
|
|
|
9.8
|
|
|
9.2
|
|
||||||
Undistributed earnings of equity investees
|
|
(31.5
|
)
|
|
(51.1
|
)
|
|
(101.8
|
)
|
|
(74.9
|
)
|
|
(57.1
|
)
|
|
(62.2
|
)
|
||||||
Noncontrolling interest in pre-tax income of subsidiaries that have not incurred fixed charges
|
|
(1.6
|
)
|
|
(2.6
|
)
|
|
(3.0
|
)
|
|
(2.8
|
)
|
|
—
|
|
|
—
|
|
||||||
Earnings, as adjusted
|
|
$
|
779.6
|
|
|
$
|
1,634.2
|
|
|
$
|
1,288.7
|
|
|
$
|
1,020.8
|
|
|
$
|
1,284.1
|
|
|
$
|
1,136.7
|
|
Fixed Charges:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest on indebtedness, including capital lease obligations
|
|
$
|
57.0
|
|
|
$
|
105.8
|
|
|
$
|
94.6
|
|
|
$
|
120.1
|
|
|
$
|
136.7
|
|
|
$
|
108.1
|
|
Capitalized interest
|
|
12.2
|
|
|
32.7
|
|
|
49.1
|
|
|
33.0
|
|
|
26.0
|
|
|
30.2
|
|
||||||
Amortization of debt discount/premium and expense
|
|
3.0
|
|
|
3.6
|
|
|
8.2
|
|
|
3.9
|
|
|
2.1
|
|
|
10.6
|
|
||||||
Portion of rents under operating leases representative of the interest factor
|
|
7.1
|
|
|
14.2
|
|
|
14.8
|
|
|
16.7
|
|
|
17.5
|
|
|
17.7
|
|
||||||
Fixed charges
(2)
|
|
$
|
79.3
|
|
|
$
|
156.3
|
|
|
$
|
166.7
|
|
|
$
|
173.7
|
|
|
$
|
182.3
|
|
|
$
|
166.6
|
|
Ratio of Earnings to Fixed Charges
(3)
|
|
9.8
|
|
|
10.5
|
|
|
7.7
|
|
|
5.9
|
|
|
7.0
|
|
|
6.8
|
|
(1)
|
Income from continuing operations includes income attributable to noncontrolling interests as well as business restructuring and cost reduction actions of $60.3 ($48.4 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, and $327.4 ($222.4 after-tax) in 2012, 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: April 27, 2017
|
|
/s/ Seifi Ghasemi
|
|
|
Seifi Ghasemi
|
|
|
Chairman, President and Chief Executive Officer
|
|
|
|
|
|
/s/ M. Scott Crocco
|
|
|
M. Scott Crocco
|
|
|
Chief Financial Officer
|