UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) 24 October 2002
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Air Products and Chemicals, Inc.
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(Exact name of registrant as specified in charter)
Delaware 1-4534 23-1274455
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(State of other jurisdiction of incorporation) (Commission file number) (IRS Identification number)
7201 Hamilton Boulevard, Allentown, Pennsylvania 18195-1501
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (610) 481-4911
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Item 5. Other Events.
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AIR PRODUCTS REPORTS FOURTH QUARTER EARNINGS PER SHARE OF 65 CENTS
LEHIGH VALLEY, Pa. (October 24, 2002) - Air Products (NYSE:APD) today reported
net income of $144 million, or diluted earnings per share (EPS) of $.65 for its
fourth fiscal quarter ended September 30, 2002. Net income increased 40 percent
and diluted EPS was up 38 percent compared with prior year net income of $103
million and $.47 per share. Excluding special items in the prior year quarter,
net income and diluted EPS increased eight percent.
Diluted EPS was up two cents from the prior quarter, one cent ahead of the
company's guidance.
Quarter revenues of $1.4 billion were flat compared with the prior year.
Excluding acquisitions, divestitures and currency effects, underlying sales
decreased three percent versus the prior year quarter, reflecting softer volumes
in the company's North American merchant gases, lower equipment sales in the
global electronics businesses, and lower prices in certain chemicals product
lines. Revenues increased two percent sequentially.
Commenting on the quarter, John P. Jones, Air Products' Chairman and Chief
Executive Officer, said, "We performed well in the face of slower than expected
growth in worldwide manufacturing activity. In this environment, we continued to
control our costs while building on our strategic positions in key growth
markets. We took a major step forward in building our leading Asian electronics
position by acquiring a controlling interest in San Fu Chemical Company, Ltd.,
our Taiwanese affiliate. We also signed new business in the Gulf Coast with
Murphy Oil USA, Inc., expanding our leading market position in the supply of
refinery hydrogen for clean fuels. And we introduced Airflex(R) EF811, a new,
environmentally-friendly emulsion polymer, which we believe will be a
breakthrough for the coatings industry."
The following discussion excludes special items recorded in the fourth fiscal
quarter of 2001.
In the Industrial Gases segment, sales of $967 million increased one percent
versus the prior year. Excluding acquisitions, divestitures and currency
effects, sales declined two percent. Operating income was down one percent
versus the prior year, with favorable currency and acquisitions and divestitures
offset by a one-time electronics equipment sale gain in the prior year and lower
North American merchant gas volumes.
2
Sequentially, gases revenues were up six percent and operating income was up
four percent, as lower electronics results were more than offset by currency,
acquisitions, lower maintenance costs and fourth quarter operating performance
bonuses in the company's hydrogen business.
In the Chemicals segment, sales of $359 million decreased one percent and
operating income of $42 million increased two percent versus the prior year.
Excluding currency effects, sales decreased three percent. Year-on-year cost
improvements and modest volume increases more than offset margin erosion in
certain product lines.
Sequentially, chemicals revenues were down seven percent and operating income
was down 12 percent. Lower plant costs were more than offset by lower volumes in
the company's intermediates business, principally due to weaker sales to
herbicide markets and customer outages.
Equipment sales were down one percent versus the prior year. Operating income
was nearly double as a result of favorable cost performance and higher helium
container shipments.
For fiscal 2002, Air Products' sales of $5.4 billion were down eight percent and
net income of $519 million was flat compared with the prior year. Full year
diluted EPS was $2.36, or $2.33 exclusive of special items.
Commenting on the year, Mr. Jones said, "We outperformed the S&P 500 for a
second year in a row, a testament to our portfolio management actions,
commitment to improving return on capital, and our focused business execution.
On the portfolio management front, in addition to the acquisition of San Fu, we
improved our business mix by divesting our U.S. packaged gases business. And on
October 1st, we completed the acquisition of American Homecare Supply, marking
our entry in to the U.S. respiratory homecare market. Most importantly, our
employees set many records this year in safety and global environmental
performance," he said.
"As was the case last year at this time, continued uncertainty in manufacturing
growth forecasts requires that we provide a range of $2.40 to $2.60 for our
fiscal year 2003 EPS guidance, up between three and 12 percent from our 2002
result," Mr. Jones said. "This range reflects no growth to modest growth in
U.S. manufacturing production."
Mr. Jones added that Air Products expects fiscal first quarter EPS in the range
of 58 to 62 cents, which includes the effects of first quarter seasonality and
continued weakening in the electronics markets.
3
***NOTE: The forward-looking statements contained in this release are based on
current expectations regarding important risk factors. Actual results may differ
materially from those expressed. Factors that might cause forward-looking
statements to differ materially from actual results include, among other things,
overall economic and business conditions and demand for Air Products' goods and
services during that time; competitive factors in the industries in which it
competes; interruption in ordinary sources of supply; the ability to recover
increased energy and raw material costs from customers; spikes in the pricing of
natural gas; changes in government regulations; consequences of acts of
terrorism impacting the United States' and other markets; the success of
implementing cost reduction programs; the timing, impact and other uncertainties
of future acquisitions or divestitures; significant fluctuations in interest
rates and foreign currencies; the impact of tax and other legislation and
regulations in jurisdictions in which Air Products and its affiliates operate;
and the timing and rate at which tax credits can be utilized.
Please review the attached financial tables, including the Summary of
Consolidated Financial Information:
4
AIR PRODUCTS AND CHEMICALS, INC.
SUMMARY OF CONSOLIDATED FINANCIAL INFORMATION
(Unaudited)
(Millions of dollars, except per share)
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Three Months Ended Twelve Months Ended
30 September 30 September
2002 2001 2002 2001
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Sales $1,398.0 $1,396.6 $5,401.2 $5,857.8
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Net Income:
As reported $144.3 $103.1 $525.4 $465.6
Exclusive of special items $144.3 $133.1(b) $518.6(a) $519.3(c)
- ---------------------------------------------------------------------------------------------------------------------------------
Basic Earnings Per Share:
As reported $.66 $.48 $2.42 $2.17
Exclusive of special items $.66 $.62 $2.39 $2.42
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Diluted Earnings Per Share:
As reported $.65 $.47 $2.36 $2.12
Exclusive of special items $.65 $.60(b) $2.33(a) $2.37(c)
- ---------------------------------------------------------------------------------------------------------------------------------
Operating Return on Net Assets 10.6% 11.1%
Capital Expenditures $800.6 $806.3
Depreciation $157.1 $139.4 $581.0 $573.0
- ---------------------------------------------------------------------------------------------------------------------------------
(a) Excluded an after-tax gain of $25.7, or $.12 per share, on the sale of U.S.
packaged gas business and an after-tax charge of $18.9, or $.09 per share,
for a global cost reduction plan.
(b) Excluded an after-tax charge of $47.3, or $.21 per share, for a global cost
reduction plan, an after-tax loss of $47.3, or $.21 per share, on the early
retirement of debt, and an after-tax gain of $64.6, or $.29 per share, on
the divestiture of interest in cogeneration facilities.
(c) Excluded an after-tax charge of $67.3, or $.31 per share, for a global cost
reduction plan, an after-tax charge of $3.7, or $.02 per share, for costs
related to a litigation settlement, an after-tax loss of $47.3, or $.21 per
share, on the early retirement of debt, and an after-tax gain of $64.6, or
$.29 per share, on the divestiture of interest in cogeneration facilities.
5
AIR PRODUCTS AND CHEMICALS, INC. and Subsidiaries
CONSOLIDATED INCOME
(Unaudited)
(Millions of dollars, except per share)
- ----------------------------------------------------------------------------------------------------------------------------
Three Months Ended Twelve Months Ended
30 September 30 September
2002 2001 2002 2001
- --------------------------------------------------------------------------------------------------------------------------
SALES $1,398.0 $1,396.6 $5,401.2 $5,857.8
COSTS AND EXPENSES
Cost of sales 971.6 1,003.4 3,827.7 4,243.3
Selling and administrative 183.8 215.8 715.1 752.1
Research and development 30.2 32.2 120.6 122.5
Other (income) expense, net (8.4) 6.9 (37.1) (5.5)
- -------------------------------------------------------------------------------------------------------------------------
OPERATING INCOME 220.8 138.3 774.9 745.4
Income from equity affiliates, net of 19.8 21.6 76.2 81.2
related expenses
Gain on sale of packaged gas business -- -- 55.7 --
Gain on divestiture of interest in -- 101.6 -- 101.6
cogeneration facilities
Loss on early retirement of debt -- 75.8 -- 75.8
Interest expense 28.7 43.8 122.3 191.2
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INCOME BEFORE TAXES AND 211.9 141.9 784.5 661.2
MINORITY INTEREST
Income taxes 61.8 38.4 240.8 190.5
Minority interest (a) 5.8 .4 18.3 5.1
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NET INCOME $144.3 $103.1 $525.4 $465.6
==========================================================================================================================
BASIC EARNINGS PER COMMON $.66 $.48 $2.42 $2.17
SHARE
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DILUTED EARNINGS PER COMMON $.65 $.47 $2.36 $2.12
SHARE
- --------------------------------------------------------------------------------------------------------------------------
WEIGHTED AVERAGE NUMBER OF 218.4 215.5 217.2 214.8
COMMON SHARES (in millions)
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WEIGHTED AVERAGE NUMBER OF 223.5 220.0 222.7 219.3
COMMON AND COMMON
EQUIVALENT SHARES (in millions)
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DIVIDENDS DECLARED PER COMMON $.21 $.20 $.82 $.78
SHARE - Cash
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(a) Minority interest primarily includes before-tax amounts.
6
AIR PRODUCTS AND CHEMICALS, INC. and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Millions of dollars)
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30 September
ASSETS 2002 2001
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CURRENT ASSETS
Cash and cash items $253.7 $66.2
Trade receivables, less allowances for 980.9 913.4
doubtful accounts
Inventories and contracts in progress 460.7 478.4
Other current assets 214.0 226.8
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TOTAL CURRENT ASSETS 1,909.3 1,684.8
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INVESTMENTS IN NET ASSETS OF AND ADVANCES 484.2 499.5
TO EQUITY AFFILIATES
PLANT AND EQUIPMENT, at cost 10,879.8 10,226.5
Less - Accumulated depreciation 5,502.0 5,108.0
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PLANT AND EQUIPMENT, net 5,377.8 5,118.5
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GOODWILL 431.1 384.7
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OTHER NONCURRENT ASSETS 292.6 396.6
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TOTAL ASSETS $8,495.0 $8,084.1
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LIABILITIES AND SHAREHOLDERS' EQUITY
- --------------------------------------------------------------------------------
CURRENT LIABILITIES
Payables, trade and other $485.6 $512.2
Accrued liabilities 353.7 341.6
Accrued income taxes 72.9 48.4
Short-term borrowings 116.9 255.7
Current portion of long-term debt 227.1 194.5
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TOTAL CURRENT LIABILITIES 1,256.2 1,352.4
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LONG-TERM DEBT 2,041.0 2,027.5
DEFERRED INCOME & OTHER NONCURRENT LIABILITIES 827.4 702.0
DEFERRED INCOME TAXES 725.6 778.4
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TOTAL LIABILITIES 4,850.2 4,860.3
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MINORITY INTERESTS IN SUBSIDIARY COMPANIES 184.4 118.0
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TOTAL SHAREHOLDERS' EQUITY 3,460.4 3,105.8
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $8,495.0 $8,084.1
================================================================================
7
AIR PRODUCTS AND CHEMICALS, INC. and Subsidiaries
CONDENSED CONSOLIDATED CASH FLOWS
(Unaudited)
(Millions of dollars)
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Twelve Months Ended
30 September
2002 2001
- ------------------------------------------------------------------------------------------------------------------
OPERATING ACTIVITIES
Net Income $525.4 $465.6
Adjustments to reconcile income to cash provided by operating activities:
Depreciation 581.0 573.0
Deferred income taxes 65.2 39.0
Loss on early retirement of debt -- 47.3
Undistributed earnings of unconsolidated affiliates (44.4) (46.2)
Gain on sale of assets and investments (66.5) (104.7)
Other 47.8 36.5
Working capital changes that provided (used) cash,
excluding effects of acquisitions and divestitures:
Trade receivables (13.1) 63.9
Inventories and contracts in progress 55.1 2.6
Payables, trade and other (75.3) (75.6)
Other 3.7 82.6
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CASH PROVIDED BY OPERATING ACTIVITIES 1,078.9 1,084.0
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INVESTING ACTIVITIES
Additions to plant and equipment (a) (642.7) (708.3)
Investment in and advances to unconsolidated affiliates (39.2) (38.3)
Acquisitions, less cash acquired (114.8) (59.2)
Proceeds from sale of assets and investments 292.9 497.0
Other (4.8) 31.1
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CASH USED FOR INVESTING ACTIVITIES (508.6) (277.7)
- ------------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Long-term debt proceeds 61.3 121.0
Payments on long-term debt (203.6) (796.6)
Net (decrease) increase in commercial paper and short-term (170.9) 8.0
borrowings
Purchase of treasury stock -- (87.2)
Dividends paid to shareholders (175.6) (165.2)
Issuance of stock for options and award plans 103.8 87.1
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CASH USED FOR FINANCING ACTIVITIES (385.0) (832.9)
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Effect of Exchange Rate Changes on Cash 2.2 (1.3)
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Increase (Decrease) in Cash and Cash Items 187.5 (27.9)
Cash and Cash Items - Beginning of Year 66.2 94.1
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Cash and Cash Items - End of Period $253.7 $66.2
==================================================================================================================
(a) Excludes capital lease additions of $3.9 and $.5 in 2002 and 2001,
respectively.
8
AIR PRODUCTS AND CHEMICALS, INC. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Millions of dollars, except per share)
Goodwill
- --------
The company adopted Statement of Financial Accounting Standards (SFAS) No. 142,
"Goodwill and Other Intangible Assets," on 1 October 2001. As required by SFAS
No. 142, the company performed impairment tests on goodwill which indicated no
impairment. As of 1 October 2001, the company is no longer amortizing goodwill,
including goodwill associated with investments in equity affiliates. Goodwill
amortization for the three and twelve months ended 30 September 2001 was $3.8
and $14.8, on an after-tax basis, or $.02 and $.07 per share, respectively.
Acquisitions
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Acquisitions in 2002, totaling $114.8, principally included the purchase of an
additional 22% of the outstanding shares of San Fu Chemical Company, Ltd. (San
Fu), increasing the company's ownership interest from 48% to 70%. Since 1987,
the company has had a joint venture arrangement with San Fu, the largest
industrial gas company in Taiwan. San Fu is a full service industrial gas and
chemical company with a broad product portfolio supplying specialty gases,
electronic piping and equipment, liquid/bulk gases, pipeline/on-site gases and
chemicals to the Taiwan marketplace. This investment is consistent with the
company's strategy of investing in growth markets (Asia) and industries
(electronics) and will provide a stronger foundation for growth in both Taiwan
and China.
As of 30 June 2002, the company accounted for its investment in San Fu using the
equity method. In July 2002, the company obtained control through the
acquisition of an additional 22% of the outstanding shares. As part of this
transaction, put options have been issued which give other shareholders the
right to sell San Fu stock to the company at market price when exercised. The
options are effective from January 2005 thru January 2015 and allow for the sale
of all stock owned by other shareholders to the company.
Divestitures
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On 28 February 2002, the company completed the sale of the majority of its U.S.
packaged gas business, excluding the electronic gases and magnetic resonance
imaging related helium operations, to Airgas, Inc. (Airgas). This sale included
approximately 100 facilities in 30 states associated with the filling and
distribution of cylinders, liquid dewars, tube trailers, and other containers of
industrial gases and non-electronic specialty gases, and the retail selling of
welding hardgoods, including customer service centers, warehouses, and other
related assets. The company also sold its packaged gas operations in the
Carolinas and in Southern Virginia to National Welders Supply Company, Inc., a
joint venture between Airgas and the Turner family of Charlotte, N.C. The assets
sold generated $240 in revenues in 2001 with a modest contribution to operating
income. For the five months ended 28 February 2002, the revenues were
approximately $100 also with a modest contribution to operating income. These
facilities employed 1,200 people. The proceeds from these transactions were
$254.5. The results for the twelve months ended 30 September 2002 included a
gain of $55.7 ($25.7 after-tax, or $.12 per share).
9
The results for the three and twelve months ended 30 September 2001 included a
gain of $101.6 ($64.6 after-tax, or $.29 per share) related to the sale of the
fifty percent interest in two cogeneration facilities located in Cambria County,
Pennsylvania and Orlando, Florida.
Subsequent Event
- ----------------
In October 2002, the company acquired American Homecare Supply, LLC (AHS), a
homecare market leader throughout the northeastern U.S., for approximately $165.
The company and its affiliates currently have a homecare position serving
approximately 180,000 patients. With this acquisition, the company and its
affiliates will provide home medical services to more than 275,000 patients in
14 countries from more than 200 locations, a significant step in the company's
strategy to be a global healthcare provider. With annual sales of more than $110
and more than 800 employees, AHS is ranked among the ten largest U.S. homecare
providers of respiratory therapy and home medical equipment.
Cost Reduction Programs
- -----------------------
The results for the twelve months ended 30 September 2002 included a charge of
$30.8 ($18.9 after-tax, or $.09 per share) for a global cost reduction plan
including packaged gas divestiture related reductions. The plan included 333
position eliminations, resulting in a charge of $27.1 for severance and pension
related benefits. A charge of $3.7 was recognized for asset impairments related
to the planned sale or closure of two small chemicals facilities. The
restructuring charges included in cost of sales, selling and administrative,
research and development, and other expense were $13.4, $14.1, $.4, and $2.9,
respectively.
The results for the three months ended 30 September 2001 included a charge of
$78.3 ($47.3 after-tax, or $.21 per share) for a global cost reduction plan.
This charge included $57.2 for severance benefits and pension plan settlements,
and $21.1 for asset impairments and related restructuring charges. The plan
included 359 position eliminations. The restructuring charges included in cost
of sales, selling and administrative, research and development, and other
expense were $12.5, $44.0, $.7, and $21.1, respectively.
The results for the twelve months ended 30 September 2001 included a charge of
$109.2 ($67.3 after-tax, or $.31 per share) for a global cost reduction plan
(2001 Plan). This charge included $79.6 for severance benefits and pension plan
settlements, and $29.6 for asset impairments and related restructuring charges.
The plan included 670 position eliminations in the areas of manufacturing,
engineering, distribution, and overheads. The restructuring charges included in
cost of sales, selling and administrative, research and development, and other
expense were $26.9, $53.4, $.7, and $28.2, respectively.
The 2001 Plan was completed in 2002, with 644 positions eliminated and total
expenses of $101.5 incurred. The balance of the accrual of $7.7 was reversed
into income during 2002.
Litigation Settlement
- ---------------------
The results for the twelve months ended 30 September 2001 included a charge of
$6.0 ($3.7 after-tax, or $.02 per share) related to a litigation settlement.
10
Loss on Early Retirement of Debt
- --------------------------------
In August 2001, the company retired $459.6 principal amount of various medium
term notes - Series D, E, and F as well as $81.5 of an 8.75% debenture for an
aggregate principal retirement of $541.1. The results for the three and twelve
months ended 30 September 2001 included a loss of $75.8 ($47.3 after-tax, or
$.21 per share) as a result of the early retirement of debt, consisting
primarily of retirement premiums.
Equity Affiliates' Income
- -------------------------
Income from equity affiliates contributed $.08 and $.32 to diluted earnings per
share for the three and twelve months ended 30 September 2002, respectively.
Income from equity affiliates, exclusive of the gain on divestiture, contributed
$.09 and $.34 to diluted earnings per share for the three and twelve months
ended 30 September 2001, respectively.
Off-Balance Sheet Arrangements
- ------------------------------
In September 2001, the company sold and leased back certain U.S. cryogenic
manufacturing equipment for $301.9. This operating lease has a five-year term
with purchase and renewal options. This lease includes a residual value
guarantee by the company not to exceed $256. The probability of incurring a
material loss under this guarantee is remote.
Reclassification
- ----------------
As of 1 October 2001, the company changed its reporting of demurrage/cylinder
income to include it in revenues. Previously, it was included as an offset to
cost of sales. The consolidated income statements of the prior periods have been
adjusted to reflect this reclassification.
The company adopted SFAS No. 145, "Rescission of FASB Statements No. 4, 44, and
64, Amendment of FASB Statement No. 13, and Technical Corrections," as of 1 July
2002. This Statement requires gains and losses from debt extinguishments that
are used as part of the company's risk management strategy to be classified as
income from operations rather than as extraordinary items, net of tax. The
impact on the company was to reclassify the extraordinary item recorded in the
fourth quarter of the prior year to income from continuing operations.
11
AIR PRODUCTS AND CHEMICALS, INC. and Subsidiaries
SUMMARY BY BUSINESS SEGMENTS
(Unaudited)
Business segment information is shown below:
- -----------------------------------------------------------------------------------------------------------------
(Millions of dollars) Three Months Ended Twelve Months Ended
30 September 30 September
2002 2001 2002 2001
- -----------------------------------------------------------------------------------------------------------------
Revenues from external customers
Gases $967.3 $959.6 $3,673.9 $4,084.6
Chemicals 359.2 364.5 1,451.7 1,522.8
Equipment 71.5 72.5 275.6 250.4
- -----------------------------------------------------------------------------------------------------------------
Segment Totals 1,398.0 1,396.6 5,401.2 5,857.8
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Consolidated Totals $1,398.0 $1,396.6 $5,401.2 $5,857.8
- -----------------------------------------------------------------------------------------------------------------
Operating income
Gases $172.8 $131.5 $614.0 $654.9
Chemicals 42.1 17.1 172.5 112.3
Equipment 9.0 2.7 20.7 10.0
- -----------------------------------------------------------------------------------------------------------------
Segment Totals 223.9 151.3 807.2 777.2
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Corporate research and development and (3.1) (13.0) (32.3) (31.8)
other income (expense)
- -----------------------------------------------------------------------------------------------------------------
Consolidated Totals $220.8 $138.3 $774.9 $745.4
- -----------------------------------------------------------------------------------------------------------------
Operating income (excluding special
items)
Gases $172.8 $174.3(c) $640.2(a) $724.0(g)
Chemicals 42.1 41.1(d) 177.1(b) 140.9(h)
Equipment 9.0 4.7(e) 20.7 12.0(e)
- -----------------------------------------------------------------------------------------------------------------
Segment Totals 223.9 220.1 838.0 876.9
- -----------------------------------------------------------------------------------------------------------------
Corporate research and development and (3.1) (3.5)(f) (32.3) (16.3)(f)(i)
other income (expense)
- -----------------------------------------------------------------------------------------------------------------
Consolidated Totals $220.8 $216.6 $805.7 $860.6
- -----------------------------------------------------------------------------------------------------------------
Equity affiliates' income
Gases $15.4 $18.6 $61.9 $71.7
Chemicals 3.2 2.3 11.7 7.5
Equipment 1.2 .7 2.6 2.0
- -----------------------------------------------------------------------------------------------------------------
Segment Totals 19.8 21.6 76.2 81.2
- -----------------------------------------------------------------------------------------------------------------
Other -- -- -- --
- -----------------------------------------------------------------------------------------------------------------
Consolidated Totals $19.8 $21.6 $76.2 $81.2
- -----------------------------------------------------------------------------------------------------------------
12
- --------------------------------------------------------------------------------
(Millions of dollars)
30 September
2002 2001
- --------------------------------------------------------------------------------
Identifiable assets (j)
Gases $6,045.0 $5,886.6
Chemicals 1,400.2 1,386.0
Equipment 184.4 185.4
- --------------------------------------------------------------------------------
Segment Totals 7,629.6 7,458.0
- --------------------------------------------------------------------------------
Corporate assets 381.2 126.6
- --------------------------------------------------------------------------------
Consolidated Totals $8,010.8 $7,584.6
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Twelve Months Ended
30 September
2002 2001
- --------------------------------------------------------------------------------
ORONA (j)
Gases 11.0% 12.3%
Chemicals 12.7% 9.8%
Equipment 10.5% 5.5%
- --------------------------------------------------------------------------------
Segment Totals 11.3% 11.6%
- --------------------------------------------------------------------------------
Consolidated Totals 10.6% 11.1%
- --------------------------------------------------------------------------------
(a) Excluded a cost reduction charge of $26.2.
(b) Excluded a cost reduction charge of $4.6.
(c) Excluded a cost reduction charge of $42.8.
(d) Excluded a cost reduction charge of $24.0.
(e) Excluded a cost reduction charge of $2.0.
(f) Excluded a cost reduction charge of $9.5.
(g) Excluded a cost reduction charge of $69.1.
(h) Excluded a cost reduction charge of $28.6.
(i) Excluded a litigation settlement charge of $6.0.
(j) Operating return on net assets (ORONA) is calculated as the rolling four
quarter sum of operating income divided by the rolling five quarter average
of total assets less investments in equity affiliates (identifiable assets).
The ORONA calculation excluded all special items impacting
operating income.
13
AIR PRODUCTS AND CHEMICALS, INC. and Subsidiaries
SUMMARY BY GEOGRAPHIC REGIONS
(Unaudited)
(Millions of dollars)
- ------------------------------------------------------------------------------------------------------------
Three Months Ended Twelve Months Ended
30 September 30 September
2002 2001 2002 2001
- ------------------------------------------------------------------------------------------------------------
Revenues from external customers
United States $798.3 $901.3 $3,301.9 $3,871.4
Canada 27.8 26.1 108.4 116.6
- ------------------------------------------------------------------------------------------------------------
Total North America 826.1 927.4 3,410.3 3,988.0
- ------------------------------------------------------------------------------------------------------------
United Kingdom 117.8 124.7 459.1 478.5
Spain 81.3 77.1 332.2 313.7
Other Europe 200.4 149.8 706.6 608.3
- ------------------------------------------------------------------------------------------------------------
Total Europe 399.5 351.6 1,497.9 1,400.5
- ------------------------------------------------------------------------------------------------------------
Asia 137.0 81.6 377.1 335.3
Latin America 35.3 35.9 115.6 133.7
All Other .1 .1 .3 .3
- ------------------------------------------------------------------------------------------------------------
Total $1,398.0 $1,396.6 $5,401.2 $5,857.8
- ------------------------------------------------------------------------------------------------------------
Note: Geographic information is based on country of origin. The other
Europe segment operates principally in France, Germany, Netherlands,
and Belgium.
Media Inquiries:
---------------
Catherine E. McDonald, tel: (610) 481-3673; e-mail: mcdonace@apci.com
-----------------
Investor Inquiries:
------------------
Alexander W. Masetti, tel: (610) 481-7461; e-mail: masettaw@apci.com
-----------------
14
Item 9. Regulation FD Disclosure
- ---------------------------------
The Q4 earnings teleconference following the earnings release which started at
11:00 a.m. EDT on October 24, 2002 can be accessed by listening on the Company's
web site at http://www.airproducts.com/fin/quarterly.htm. Recordings of the
--------------------------------------------
earnings teleconference and copies of the slides used will continue to be
available at the above web address until 11:59 p.m. EST on November 1, 2002.
15
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Air Products and Chemicals, Inc.
--------------------------------
(Registrant)
Dated: 24 October 2002 By: /s/ John R. Owings
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John R. Owings
Vice President and Chief Financial Officer
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