Delaware | 001-04534 | 23-1274455 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
7201 Hamilton Boulevard, Allentown, Pennsylvania | 18195-1501 | |
(Address of Principal Executive Offices) | (Zip Code) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Emerging growth company | ¨ |
(d) | Exhibits |
99.1 | Press Release dated 26 April 2018. |
Air Products and Chemicals, Inc. | ||
(Registrant) | ||
Date: 26 April 2018 | By: | /s/ M. Scott Crocco |
M. Scott Crocco | ||
Executive Vice President and Chief Financial Officer |
Exhibit No. | Description | |
Press Release dated 26 April 2018. |
News Release | ![]() |
• | GAAP EPS of $1.89, up 36 percent from the prior year; GAAP net income of $416 million |
• | Adjusted EPS of $1.71*, up 20 percent versus prior year |
• | Adjusted EBITDA margin of 34.3 percent*, up 140 basis points versus prior year |
• | Expect to close on $1.3 billion Lu'An syngas supply joint venture in fiscal 2018 third quarter, onstream in phases |
• | Awarded industrial gases supply to Samsung Electronics' second 3D V-NAND Fab in Western China |
• | Signed agreement to purchase largest carbon dioxide business in Continental Europe, ACP Europe SA |
• | Increased fiscal 2018 adjusted EPS guidance to $7.25 to $7.40 per share, now up 15 to 17 percent over prior year. This increase is due in part to the expected contribution from the Lu'An project. Fiscal 2018 third quarter adjusted EPS guidance of $1.80 to $1.85 per share, up nine to 12 percent over fiscal 2017 third quarter. |
• | Including the Lu'An project, expected fiscal year 2018 capital spending of $1.8 to $2.0 billion |
• | Industrial Gases – Americas sales of $913 million increased three percent over prior year, driven by higher hydrogen and merchant gases volumes. Adjusted EBITDA of $362 million increased three percent over the prior year, primarily driven by the higher volumes. |
• | Industrial Gases – EMEA sales of $562 million increased 36 percent over prior year, driven by 20 percent higher volumes, 15 percent favorable currency and one percent favorable pricing. The higher volumes were primarily from the new hydrogen plant in India; merchant volumes also contributed positively. Adjusted EBITDA of $179 million increased 29 percent over the prior year on the higher volumes, pricing and currency. Adjusted EBITDA margin of 31.8 percent decreased 160 basis points from the prior year; excluding the India plant, which has comparatively high natural gas costs, adjusted EBITDA margin was up slightly compared to prior year. |
• | Industrial Gases – Asia sales of $558 million increased 28 percent over prior year, driven by 17 percent higher volumes from new plants and base business growth, eight percent favorable currency, and three percent higher pricing. Adjusted EBITDA of $227 million increased 30 percent on the strong volumes, favorable currency and higher pricing. |
Continuing Operations | |||||||||||||||||
Three Months Ended 31 March | |||||||||||||||||
Q2 2018 vs. Q2 2017 | Operating Income | Operating Margin(A) | Equity Affiliates' Income | Income Tax Provision | Net Income | Diluted EPS | |||||||||||
2018 GAAP | $455.4 | 21.1 | % | $43.7 | $56.2 | $416.4 | $1.89 | ||||||||||
2017 GAAP | 395.6 | 20.0 | % | 34.2 | 94.5 | 304.4 | 1.39 | ||||||||||
Change GAAP | $59.8 | 110 | bp | $9.5 | ($38.3 | ) | $112.0 | $.50 | |||||||||
% Change GAAP | 15 | % | 28 | % | (41 | )% | 37 | % | 36 | % | |||||||
2018 GAAP | $455.4 | 21.1 | % | $43.7 | $56.2 | $416.4 | $1.89 | ||||||||||
Tax restructuring benefit | — | — | % | — | 38.8 | (38.8 | ) | (.18 | ) | ||||||||
2018 Non-GAAP Measure | $455.4 | 21.1 | % | $43.7 | $95.0 | $377.6 | $1.71 | ||||||||||
2017 GAAP | $395.6 | 20.0 | % | $34.2 | $94.5 | $304.4 | $1.39 | ||||||||||
Cost reduction and asset actions | 10.3 | .5 | % | — | 3.1 | 7.2 | .03 | ||||||||||
Pension settlement loss | — | — | % | — | 1.5 | 2.6 | .01 | ||||||||||
2017 Non-GAAP Measure | $405.9 | 20.5 | % | $34.2 | $99.1 | $314.2 | $1.43 | ||||||||||
Change Non-GAAP Measure | $49.5 | 60 | bp | $9.5 | ($4.1 | ) | $63.4 | $.28 | |||||||||
% Change Non-GAAP Measure | 12 | % | 28 | % | (4 | )% | 20 | % | 20 | % |
Continuing Operations | |||||||||||||||||
Six Months Ended 31 March | |||||||||||||||||
2018 vs. 2017 | Operating Income | Operating Margin(A) | Equity Affiliates' Income | Income Tax Provision | Net Income | Diluted EPS | |||||||||||
2018 GAAP | $916.1 | 21.0 | % | $57.5 | $348.0 | $572.0 | $2.59 | ||||||||||
2017 GAAP | 723.9 | 18.7 | % | 72.2 | 172.9 | 556.0 | 2.53 | ||||||||||
Change GAAP | $192.2 | 230 | bp | ($14.7 | ) | $175.1 | $16.0 | $.06 | |||||||||
% Change GAAP | 27 | % | (20 | )% | 101 | % | 3 | % | 2 | % | |||||||
2018 GAAP | $916.1 | 21.0 | % | $57.5 | $348.0 | $572.0 | $2.59 | ||||||||||
Tax reform repatriation | — | — | % | 32.5 | (420.5 | ) | 453.0 | 2.06 | |||||||||
Tax reform rate change and other | — | — | % | — | 214.0 | (214.0 | ) | (.97 | ) | ||||||||
Tax restructuring benefit | — | — | % | — | 38.8 | (38.8 | ) | (.18 | ) | ||||||||
2018 Non-GAAP Measure | $916.1 | 21.0 | % | $90.0 | $180.3 | $772.2 | $3.50 | ||||||||||
2017 GAAP | $723.9 | 18.7 | % | $72.2 | $172.9 | $556.0 | $2.53 | ||||||||||
Business separation costs | 32.5 | .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 | — | — | % | — | 1.5 | 2.6 | .01 | ||||||||||
2017 Non-GAAP Measure | $816.7 | 21.1 | % | $72.2 | $187.3 | $636.2 | $2.90 | ||||||||||
Change Non-GAAP Measure | $99.4 | (10 | )bp | $17.8 | ($7.0 | ) | $136.0 | $.60 | |||||||||
% Change Non-GAAP Measure | 12 | % | 25 | % | (4 | )% | 21 | % | 21 | % |
(A) | Operating margin is calculated by dividing operating income by sales. |
2018 | Q1 | Q2 | Q3 | Q4 | Q2 YTD Total | |||||||||||||||
Income from Continuing Operations(A) | $162.7 | $423.6 | $586.3 | |||||||||||||||||
Add: Interest expense | 29.8 | 30.4 | 60.2 | |||||||||||||||||
Less: Other non-operating income (expense), net | 9.8 | 11.1 | 20.9 | |||||||||||||||||
Add: Income tax provision | 291.8 | 56.2 | 348.0 | |||||||||||||||||
Add: Depreciation and amortization | 227.9 | 240.0 | 467.9 | |||||||||||||||||
Add: Tax reform repatriation - equity method investment | 32.5 | — | 32.5 | |||||||||||||||||
Adjusted EBITDA | $734.9 | $739.1 | $1,474.0 | |||||||||||||||||
2017 | Q1 | Q2 | Q3 | Q4 | Q2 YTD Total | |||||||||||||||
Income from Continuing Operations(A) | $258.2 | $310.1 | $106.4 | $480.5 | $568.3 | |||||||||||||||
Add: Interest expense | 29.5 | 30.5 | 29.8 | 30.8 | 60.0 | |||||||||||||||
Less: Other non-operating income (expense), net | (.2 | ) | 5.3 | 3.7 | 7.8 | 5.1 | ||||||||||||||
Add: Income tax provision (benefit) | 78.4 | 94.5 | 89.3 | (1.3 | ) | 172.9 | ||||||||||||||
Add: Depreciation and amortization | 206.1 | 211.8 | 216.9 | 231.0 | 417.9 | |||||||||||||||
Add: Business separation costs | 32.5 | — | — | — | 32.5 | |||||||||||||||
Add: Cost reduction and asset actions | 50.0 | 10.3 | 42.7 | 48.4 | 60.3 | |||||||||||||||
Add: Goodwill and intangible asset impairment charge | — | — | 162.1 | — | — | |||||||||||||||
Less: Gain on land sale | — | — | — | 12.2 | — | |||||||||||||||
Add: Equity method investment impairment charge | — | — | 79.5 | — | — | |||||||||||||||
Adjusted EBITDA | $654.9 | $651.9 | $723.0 | $769.4 | $1,306.8 |
(A) | Includes net income attributable to noncontrolling interests. |
2018 vs. 2017 | Q1 | Q2 | Q2 YTD Total | |||||||||||||
Change GAAP | ||||||||||||||||
Income from continuing operations change | ($95.5 | ) | $113.5 | $18.0 | ||||||||||||
Income from continuing operations % change | (37 | )% | 37 | % | 3 | % | ||||||||||
Change Non-GAAP | ||||||||||||||||
Adjusted EBITDA change | $80.0 | $87.2 | $167.2 | |||||||||||||
Adjusted EBITDA % change | 12 | % | 13 | % | 13 | % |
Industrial Gases– Americas | Industrial Gases– EMEA | Industrial Gases– Asia | Industrial Gases– Global | Corporate and other | Segment Total | |||||||||||||
GAAP MEASURE | ||||||||||||||||||
Three Months Ended 31 March 2018 | ||||||||||||||||||
Operating income (loss) | $222.3 | $116.7 | $148.7 | $12.1 | ($44.4 | ) | $455.4 | |||||||||||
Operating margin | 24.3 | % | 20.8 | % | 26.7 | % | 21.1 | % | ||||||||||
Three Months Ended 31 March 2017 | ||||||||||||||||||
Operating income (loss) | $223.2 | $88.6 | $112.3 | $22.7 | ($40.9 | ) | $405.9 | |||||||||||
Operating margin | 25.1 | % | 21.4 | % | 25.8 | % | 20.5 | % | ||||||||||
Operating income (loss) change | ($.9 | ) | $28.1 | $36.4 | ($10.6 | ) | ($3.5 | ) | $49.5 | |||||||||
Operating income (loss) % change | — | % | 32 | % | 32 | % | (47 | )% | (9 | )% | 12 | % | ||||||
Operating margin change | (80 | ) bp | (60 | ) bp | 90 | bp | 60 | bp | ||||||||||
NON-GAAP MEASURE | ||||||||||||||||||
Three Months Ended 31 March 2018 | ||||||||||||||||||
Operating income (loss) | $222.3 | $116.7 | $148.7 | $12.1 | ($44.4 | ) | $455.4 | |||||||||||
Add: Depreciation and amortization | 122.3 | 50.7 | 62.6 | 1.9 | 2.5 | 240.0 | ||||||||||||
Add: Equity affiliates' income | 16.9 | 11.1 | 15.4 | .3 | — | 43.7 | ||||||||||||
Adjusted EBITDA | $361.5 | $178.5 | $226.7 | $14.3 | ($41.9 | ) | $739.1 | |||||||||||
Adjusted EBITDA margin | 39.6 | % | 31.8 | % | 40.7 | % | 34.3 | % | ||||||||||
Three Months Ended 31 March 2017 | ||||||||||||||||||
Operating income (loss) | $223.2 | $88.6 | $112.3 | $22.7 | ($40.9 | ) | $405.9 | |||||||||||
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 | $352.2 | $138.5 | $174.5 | $24.4 | ($37.7 | ) | $651.9 | |||||||||||
Adjusted EBITDA margin | 39.6 | % | 33.4 | % | 40.0 | % | 32.9 | % | ||||||||||
Adjusted EBITDA change | $9.3 | $40.0 | $52.2 | ($10.1 | ) | ($4.2 | ) | $87.2 | ||||||||||
Adjusted EBITDA % change | 3 | % | 29 | % | 30 | % | (41 | )% | (11 | )% | 13 | % | ||||||
Adjusted EBITDA margin change | — | (160 | ) bp | 70 | bp | 140 | 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 2018 | ||||||||||||||||||
Operating income (loss) | $439.5 | $221.2 | $324.2 | $21.6 | ($90.4 | ) | $916.1 | |||||||||||
Operating margin | 24.1 | % | 20.5 | % | 27.0 | % | 21.0 | % | ||||||||||
Six Months Ended 31 March 2017 | ||||||||||||||||||
Operating income (loss) | $446.5 | $178.6 | $230.7 | $30.9 | ($70.0 | ) | $816.7 | |||||||||||
Operating margin | 25.5 | % | 21.9 | % | 26.4 | % | 21.1 | % | ||||||||||
Operating income (loss) change | ($7.0 | ) | $42.6 | $93.5 | ($9.3 | ) | ($20.4 | ) | $99.4 | |||||||||
Operating income (loss) % change | (2 | )% | 24 | % | 41 | % | (30 | )% | (29 | )% | 12 | % | ||||||
Operating margin change | (140 | ) bp | (140 | ) bp | 60 | bp | (10 | ) bp | ||||||||||
NON-GAAP MEASURE | ||||||||||||||||||
Six Months Ended 31 March 2018 | ||||||||||||||||||
Operating income (loss) | $439.5 | $221.2 | $324.2 | $21.6 | ($90.4 | ) | $916.1 | |||||||||||
Add: Depreciation and amortization | 240.1 | 99.8 | 119.4 | 3.5 | 5.1 | 467.9 | ||||||||||||
Add: Equity affiliates' income | 35.5 | 24.2 | 29.6 | .7 | — | 90.0 | ||||||||||||
Adjusted EBITDA | $715.1 | $345.2 | $473.2 | $25.8 | ($85.3 | ) | $1,474.0 | |||||||||||
Adjusted EBITDA margin | 39.2 | % | 32.0 | % | 39.4 | % | 33.7 | % | ||||||||||
Six Months Ended 31 March 2017 | ||||||||||||||||||
Operating income (loss) | $446.5 | $178.6 | $230.7 | $30.9 | ($70.0 | ) | $816.7 | |||||||||||
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 | $702.0 | $280.2 | $353.1 | $34.9 | ($63.4 | ) | $1,306.8 | |||||||||||
Adjusted EBITDA margin | 40.0 | % | 34.4 | % | 40.4 | % | 33.8 | % | ||||||||||
Adjusted EBITDA change | $13.1 | $65.0 | $120.1 | ($9.1 | ) | ($21.9 | ) | $167.2 | ||||||||||
Adjusted EBITDA % change | 2 | % | 23 | % | 34 | % | (26 | )% | (35 | )% | 13 | % | ||||||
Adjusted EBITDA margin change | (80 | ) bp | (240 | ) bp | (100 | ) bp | (10 | ) bp |
Three Months Ended | Six Months Ended | |||||||||||
31 March | 31 March | |||||||||||
Operating Income | 2018 | 2017 | 2018 | 2017 | ||||||||
Segment total | $455.4 | $405.9 | $916.1 | $816.7 | ||||||||
Business separation costs | — | — | — | (32.5 | ) | |||||||
Cost reduction and asset actions | — | (10.3 | ) | — | (60.3 | ) | ||||||
Consolidated Total | $455.4 | $395.6 | $916.1 | $723.9 |
Three Months Ended | Six Months Ended | |||||||||||
31 March | 31 March | |||||||||||
Equity Affiliates' Income | 2018 | 2017 | 2018 | 2017 | ||||||||
Segment total | $43.7 | $34.2 | $90.0 | $72.2 | ||||||||
Tax reform repatriation - equity method investment | — | — | (32.5 | ) | — | |||||||
Consolidated Total | $43.7 | $34.2 | $57.5 | $72.2 |
Effective Tax Rate | |||||||||||||
Three Months Ended 31 March | Six Months Ended 31 March | ||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||
Income Tax Provision—GAAP | $56.2 | $94.5 | $348.0 | $172.9 | |||||||||
Income From Continuing Operations Before Taxes—GAAP | $479.8 | $404.6 | $934.3 | $741.2 | |||||||||
Effective Tax Rate—GAAP | 11.7 | % | 23.4 | % | 37.2 | % | 23.3 | % | |||||
Income Tax Provision—GAAP | $56.2 | $94.5 | $348.0 | $172.9 | |||||||||
Business separation costs | — | — | — | 3.7 | |||||||||
Tax costs associated with business separation | — | — | — | (2.7 | ) | ||||||||
Cost reduction and asset actions | — | 3.1 | — | 11.9 | |||||||||
Pension settlement loss | — | 1.5 | — | 1.5 | |||||||||
Tax reform repatriation | — | — | (420.5 | ) | — | ||||||||
Tax reform rate change and other | — | — | 214.0 | — | |||||||||
Tax restructuring benefit | 38.8 | — | 38.8 | — | |||||||||
Income Tax Provision—Non-GAAP Measure | $95.0 | $99.1 | $180.3 | $187.3 | |||||||||
Income From Continuing Operations Before Taxes—GAAP | $479.8 | $404.6 | $934.3 | $741.2 | |||||||||
Business separation costs | — | — | — | 30.2 | |||||||||
Cost reduction and asset actions | — | 10.3 | — | 60.3 | |||||||||
Pension settlement loss | — | 4.1 | — | 4.1 | |||||||||
Tax reform repatriation - equity method investment | — | — | 32.5 | — | |||||||||
Income From Continuing Operations Before Taxes—Non-GAAP Measure | $479.8 | $419.0 | $966.8 | $835.8 | |||||||||
Effective Tax Rate—Non-GAAP Measure | 19.8 | % | 23.7 | % | 18.6 | % | 22.4 | % |
Three Months Ended 31 March | Six Months Ended 31 March | |||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||
Capital expenditures for continuing operations—GAAP basis | $350.2 | $293.1 | $843.9 | $541.1 | ||||||||
Capital lease expenditures | 5.9 | 1.8 | 12.3 | 5.8 | ||||||||
Capital expenditures—Non-GAAP basis | $356.1 | $294.9 | $856.2 | $546.9 |
2018 | 2017 | 2016 | |||||||||||||||||||||||||||
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | |||||||||||||||||||||
Net income from continuing operations attributable to Air Products | $ | 416.4 | $ | 155.6 | $ | 474.2 | $ | 104.2 | $ | 304.4 | $ | 251.6 | $ | 289.4 | $ | 250.3 | |||||||||||||
Interest expense | 30.4 | 29.8 | 30.8 | 29.8 | 30.5 | 29.5 | 32.2 | 35.1 | |||||||||||||||||||||
Interest expense tax impact | (3.6 | ) | (19.1 | ) | .1 | (13.6 | ) | (7.1 | ) | (6.9 | ) | (8.0 | ) | (12.7 | ) | ||||||||||||||
Interest expense, after-tax | 26.8 | 10.7 | 30.9 | 16.2 | 23.4 | 22.6 | 24.2 | 22.4 | |||||||||||||||||||||
Net income attributable to noncontrolling interests of continuing operations | 7.2 | 7.1 | 6.3 | 2.2 | 5.7 | 6.6 | 5.0 | 5.4 | |||||||||||||||||||||
Earnings After-Tax—GAAP | $ | 450.4 | $ | 173.4 | $ | 511.4 | $ | 122.6 | $ | 333.5 | $ | 280.8 | $ | 318.6 | $ | 278.1 | |||||||||||||
Disclosed items, after-tax | |||||||||||||||||||||||||||||
Business separation costs | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 26.5 | $ | 19.3 | $ | 6.5 | |||||||||||||
Tax (benefit) costs associated with business separation | — | — | — | (8.2 | ) | — | 2.7 | 4.1 | 47.7 | ||||||||||||||||||||
Cost reduction and asset actions | — | — | 30.9 | 30.0 | 7.2 | 41.2 | 7.2 | 8.7 | |||||||||||||||||||||
Pension settlement loss | — | — | .6 | 3.4 | 2.6 | — | 1.4 | .6 | |||||||||||||||||||||
Goodwill and intangible asset impairment charge | — | — | — | 154.1 | — | — | — | — | |||||||||||||||||||||
Gain on land sale | — | — | (7.6 | ) | — | — | — | — | — | ||||||||||||||||||||
Equity method investment impairment charge | — | — | — | 79.5 | — | — | — | — | |||||||||||||||||||||
Loss on extinguishment of debt | — | — | — | — | — | — | 4.3 | — | |||||||||||||||||||||
Tax election benefit | — | — | (111.4 | ) | — | — | — | — | — | ||||||||||||||||||||
Tax reform repatriation | — | 453.0 | — | — | — | — | — | — | |||||||||||||||||||||
Tax reform rate change and other | — | (214.0 | ) | — | — | — | — | — | — | ||||||||||||||||||||
Tax restructuring benefit | (38.8 | ) | — | — | — | — | — | — | — | ||||||||||||||||||||
Earnings After-Tax—Non‑GAAP | $ | 411.6 | $ | 412.4 | $ | 423.9 | $ | 381.4 | $ | 343.3 | $ | 351.2 | $ | 354.9 | $ | 341.6 | |||||||||||||
Total Capital | |||||||||||||||||||||||||||||
Short-term borrowings | $ | 112.5 | $ | 87.1 | $ | 144.0 | $ | 143.4 | $ | 122.3 | $ | 156.1 | $ | 935.8 | $ | 1,043.0 | $ | 1,478.5 | |||||||||||
Current portion of long-term debt | 11.6 | 11.3 | 416.4 | 416.0 | 420.5 | 873.3 | 365.4 | 714.9 | 763.6 | ||||||||||||||||||||
Long-term debt | 3,442.4 | 3,414.9 | 3,402.4 | 3,366.6 | 3,300.4 | 3,289.0 | 3,909.7 | 3,908.1 | 3,556.9 | ||||||||||||||||||||
Total Debt | 3,566.5 | 3,513.3 | 3,962.8 | 3,926.0 | 3,843.2 | 4,318.4 | 5,210.9 | 5,666.0 | 5,799.0 | ||||||||||||||||||||
Total Equity | 10,693.2 | 10,321.2 | 10,185.5 | 9,509.9 | 9,420.2 | 7,261.1 | 7,213.4 | 7,180.2 | 7,053.1 | ||||||||||||||||||||
Noncontrolling interests of discontinued operations | — | — | — | — | — | — | (33.9 | ) | (32.9 | ) | (33.0 | ) | |||||||||||||||||
Assets of discontinued operations | — | (10.2 | ) | (10.2 | ) | (9.8 | ) | (9.8 | ) | (860.2 | ) | (1,968.5 | ) | (1,762.0 | ) | (1,707.1 | ) | ||||||||||||
Total Capital | $ | 14,259.7 | $ | 13,824.3 | $ | 14,138.1 | $ | 13,426.1 | $ | 13,253.6 | $ | 10,719.3 | $ | 10,421.9 | $ | 11,051.3 | $ | 11,112.0 | |||||||||||
Earnings After Tax—GAAP | $ | 1,257.8 | $ | 1,211.0 | |||||||||||||||||||||||||
Five-quarter average total capital | 13,780.4 | 11,311.6 | |||||||||||||||||||||||||||
ROCE—GAAP items | 9.1 | % | 10.7 | % | |||||||||||||||||||||||||
Change GAAP-based Measure | (160 | )bp | |||||||||||||||||||||||||||
Earnings After Tax—Non-GAAP | $ | 1,629.3 | $ | 1,391.0 | |||||||||||||||||||||||||
Five-quarter average total capital | 13,780.4 | 11,311.6 | |||||||||||||||||||||||||||
ROCE—Non-GAAP items | 11.8 | % | 12.3 | % | |||||||||||||||||||||||||
Change Non-GAAP-based Measure | (50 | )bp |
Diluted EPS | ||||||||
Q3 | Full Year | |||||||
2017 GAAP | $.47 | $5.16 | ||||||
Business separation costs | — | .12 | ||||||
Tax benefit associated with business separation | (.04 | ) | (.02 | ) | ||||
Cost reduction and asset actions | .14 | .49 | ||||||
Pension settlement loss | .02 | .03 | ||||||
Goodwill and intangible asset impairment charge | .70 | .70 | ||||||
Gain on land sale | — | (.03 | ) | |||||
Equity method investment impairment charge | .36 | .36 | ||||||
Tax election benefit | — | (.50 | ) | |||||
2017 Non-GAAP Measure | $1.65 | $6.31 | ||||||
2018 Non-GAAP Outlook | 1.80–1.85 | 7.25–7.40 | ||||||
Change Non-GAAP | .15–.20 | .94–1.09 | ||||||
% Change Non-GAAP | 9%–12% | 15%–17% |
Three Months Ended | Six Months Ended | |||||||||||
31 March | 31 March | |||||||||||
(Millions of dollars, except for share and per share data) | 2018 | 2017 | 2018 | 2017 | ||||||||
Sales | $2,155.7 | $1,980.1 | $4,372.3 | $3,862.6 | ||||||||
Cost of sales | 1,506.5 | 1,403.8 | 3,078.3 | 2,720.5 | ||||||||
Selling and administrative | 194.6 | 177.6 | 386.2 | 342.3 | ||||||||
Research and development | 14.5 | 14.8 | 29.1 | 29.8 | ||||||||
Business separation costs | — | — | — | 32.5 | ||||||||
Cost reduction and asset actions | — | 10.3 | — | 60.3 | ||||||||
Other income (expense), net | 15.3 | 22.0 | 37.4 | 46.7 | ||||||||
Operating Income | 455.4 | 395.6 | 916.1 | 723.9 | ||||||||
Equity affiliates' income | 43.7 | 34.2 | 57.5 | 72.2 | ||||||||
Interest expense | 30.4 | 30.5 | 60.2 | 60.0 | ||||||||
Other non-operating income (expense), net | 11.1 | 5.3 | 20.9 | 5.1 | ||||||||
Income From Continuing Operations Before Taxes | 479.8 | 404.6 | 934.3 | 741.2 | ||||||||
Income tax provision | 56.2 | 94.5 | 348.0 | 172.9 | ||||||||
Income From Continuing Operations | 423.6 | 310.1 | 586.3 | 568.3 | ||||||||
Income (Loss) From Discontinued Operations, net of tax | — | 1,825.6 | (1.0 | ) | 1,873.8 | |||||||
Net Income | 423.6 | 2,135.7 | 585.3 | 2,442.1 | ||||||||
Net Income Attributable to Noncontrolling Interests of Continuing Operations | 7.2 | 5.7 | 14.3 | 12.3 | ||||||||
Net Income Attributable to Air Products | $416.4 | $2,130.0 | $571.0 | $2,429.8 | ||||||||
Net Income Attributable to Air Products | ||||||||||||
Income from continuing operations | $416.4 | $304.4 | $572.0 | $556.0 | ||||||||
Income (Loss) from discontinued operations | — | 1,825.6 | (1.0 | ) | 1,873.8 | |||||||
Net Income Attributable to Air Products | $416.4 | $2,130.0 | $571.0 | $2,429.8 | ||||||||
Basic Earnings Per Common Share Attributable to Air Products | ||||||||||||
Income from continuing operations | $1.90 | $1.40 | $2.61 | $2.55 | ||||||||
Income from discontinued operations | — | 8.38 | — | 8.61 | ||||||||
Net Income Attributable to Air Products | $1.90 | $9.78 | $2.61 | $11.16 | ||||||||
Diluted Earnings Per Common Share Attributable to Air Products | ||||||||||||
Income from continuing operations | $1.89 | $1.39 | $2.59 | $2.53 | ||||||||
Income from discontinued operations | — | 8.31 | — | 8.53 | ||||||||
Net Income Attributable to Air Products | $1.89 | $9.70 | $2.59 | $11.06 | ||||||||
Weighted Average Common Shares – Basic (in millions) | 219.4 | 217.9 | 219.2 | 217.8 | ||||||||
Weighted Average Common Shares – Diluted (in millions) | 220.8 | 219.7 | 220.7 | 219.6 | ||||||||
Dividends Declared Per Common Share – Cash | $1.10 | $.95 | $2.05 | $1.81 | ||||||||
Other Data from Continuing Operations | ||||||||||||
Depreciation and amortization | $240.0 | $211.8 | $467.9 | $417.9 | ||||||||
Capital expenditures – Refer to page 10 | $356.1 | $294.9 | $856.2 | $546.9 |
31 March | 30 September | |||||
(Millions of dollars) | 2018 | 2017 | ||||
Assets | ||||||
Current Assets | ||||||
Cash and cash items | $3,066.9 | $3,273.6 | ||||
Short-term investments | 137.0 | 404.0 | ||||
Trade receivables, net | 1,252.3 | 1,174.0 | ||||
Inventories | 339.9 | 335.4 | ||||
Contracts in progress, less progress billings | 98.5 | 84.8 | ||||
Prepaid expenses | 131.2 | 191.4 | ||||
Other receivables and current assets | 370.5 | 403.3 | ||||
Current assets of discontinued operations | — | 10.2 | ||||
Total Current Assets | 5,396.3 | 5,876.7 | ||||
Investment in net assets of and advances to equity affiliates | 1,305.6 | 1,286.9 | ||||
Plant and equipment, at cost | 20,522.5 | 19,547.8 | ||||
Less: accumulated depreciation | 11,704.8 | 11,107.6 | ||||
Plant and equipment, net | 8,817.7 | 8,440.2 | ||||
Goodwill, net | 815.0 | 721.5 | ||||
Intangible assets, net | 444.4 | 368.3 | ||||
Noncurrent capital lease receivables | 1,128.5 | 1,131.8 | ||||
Other noncurrent assets | 603.6 | 641.8 | ||||
Total Noncurrent Assets | 13,114.8 | 12,590.5 | ||||
Total Assets | $18,511.1 | $18,467.2 | ||||
Liabilities and Equity | ||||||
Current Liabilities | ||||||
Payables and accrued liabilities | $1,551.6 | $1,814.3 | ||||
Accrued income taxes | 76.6 | 98.6 | ||||
Short-term borrowings | 112.5 | 144.0 | ||||
Current portion of long-term debt | 11.6 | 416.4 | ||||
Current liabilities of discontinued operations | — | 15.7 | ||||
Total Current Liabilities | 1,752.3 | 2,489.0 | ||||
Long-term debt | 3,442.4 | 3,402.4 | ||||
Other noncurrent liabilities | 1,923.5 | 1,611.9 | ||||
Deferred income taxes | 699.7 | 778.4 | ||||
Total Noncurrent Liabilities | 6,065.6 | 5,792.7 | ||||
Total Liabilities | 7,817.9 | 8,281.7 | ||||
Air Products Shareholders’ Equity | 10,580.8 | 10,086.2 | ||||
Noncontrolling Interests | 112.4 | 99.3 | ||||
Total Equity | 10,693.2 | 10,185.5 | ||||
Total Liabilities and Equity | $18,511.1 | $18,467.2 |
Six Months Ended | ||||||
31 March | ||||||
(Millions of dollars) | 2018 | 2017 | ||||
Operating Activities | ||||||
Net income | $585.3 | $2,442.1 | ||||
Less: Net income attributable to noncontrolling interests of continuing operations | 14.3 | 12.3 | ||||
Net income attributable to Air Products | 571.0 | 2,429.8 | ||||
(Income) Loss from discontinued operations | 1.0 | (1,873.8 | ) | |||
Income from continuing operations attributable to Air Products | 572.0 | 556.0 | ||||
Adjustments to reconcile income to cash provided by operating activities: | ||||||
Depreciation and amortization | 467.9 | 417.9 | ||||
Deferred income taxes | (94.4 | ) | (68.6 | ) | ||
Tax reform repatriation | 310.3 | — | ||||
Undistributed earnings of unconsolidated affiliates | 3.1 | (31.5 | ) | |||
Gain on sale of assets and investments | (2.4 | ) | (6.5 | ) | ||
Share-based compensation | 22.5 | 18.5 | ||||
Noncurrent capital lease receivables | 47.2 | 45.4 | ||||
Write-down of long-lived assets associated with cost reduction actions | — | 45.7 | ||||
Other adjustments | 44.7 | 34.0 | ||||
Working capital changes that provided (used) cash, excluding effects of acquisitions and divestitures: | ||||||
Trade receivables | (30.2 | ) | (53.8 | ) | ||
Inventories | 5.5 | 20.7 | ||||
Contracts in progress, less progress billings | (12.2 | ) | (5.0 | ) | ||
Other receivables | 23.2 | 118.4 | ||||
Payables and accrued liabilities | (260.4 | ) | (178.6 | ) | ||
Other working capital | 13.3 | (51.4 | ) | |||
Cash Provided by Operating Activities | 1,110.1 | 861.2 | ||||
Investing Activities | ||||||
Additions to plant and equipment | (572.5 | ) | (532.2 | ) | ||
Acquisitions, less cash acquired | (271.4 | ) | — | |||
Investment in and advances to unconsolidated affiliates | — | (8.9 | ) | |||
Proceeds from sale of assets and investments | 34.4 | 13.5 | ||||
Purchases of investments | (345.7 | ) | (1,823.2 | ) | ||
Proceeds from investments | 612.9 | 400.0 | ||||
Other investing activities | (2.6 | ) | (1.6 | ) | ||
Cash Used for Investing Activities | (544.9 | ) | (1,952.4 | ) | ||
Financing Activities | ||||||
Long-term debt proceeds | .5 | 1.3 | ||||
Payments on long-term debt | (409.2 | ) | (469.7 | ) | ||
Net decrease in commercial paper and short-term borrowings | (22.4 | ) | (816.6 | ) | ||
Dividends paid to shareholders | (415.5 | ) | (374.0 | ) | ||
Proceeds from stock option exercises | 52.7 | 19.9 | ||||
Other financing activities | (21.7 | ) | (22.7 | ) | ||
Cash Used for Financing Activities | (815.6 | ) | (1,661.8 | ) | ||
Discontinued Operations | ||||||
Cash used for operating activities | (3.1 | ) | (520.8 | ) | ||
Cash provided by investing activities | 18.6 | 3,750.6 | ||||
Cash provided by financing activities | — | 69.5 | ||||
Cash Provided by Discontinued Operations | 15.5 | 3,299.3 | ||||
Effect of Exchange Rate Changes on Cash | 28.2 | (7.8 | ) | |||
(Decrease) Increase in Cash and Cash Items | (206.7 | ) | 538.5 | |||
Cash and Cash items - Beginning of Year | 3,273.6 | 1,330.8 | ||||
Cash and Cash items - End of Period | $3,066.9 | $1,869.3 | ||||
Supplemental Cash Flow Information | ||||||
Cash paid for taxes (net of refunds) - Continuing operations | $153.7 | $275.0 |
(Millions of dollars) | Industrial Gases – Americas | Industrial Gases – EMEA | Industrial Gases – Asia | Industrial Gases – Global | Corporate and other | Segment Total | ||||||||||||
Three Months Ended 31 March 2018 | ||||||||||||||||||
Sales | $913.2 | $561.6 | $557.6 | $101.7 | $21.6 | $2,155.7 | ||||||||||||
Operating income (loss) | 222.3 | 116.7 | 148.7 | 12.1 | (44.4 | ) | 455.4 | |||||||||||
Depreciation and amortization | 122.3 | 50.7 | 62.6 | 1.9 | 2.5 | 240.0 | ||||||||||||
Equity affiliates' income | 16.9 | 11.1 | 15.4 | .3 | — | 43.7 | ||||||||||||
Three Months Ended 31 March 2017 | ||||||||||||||||||
Sales | $890.1 | $414.2 | $435.9 | $216.5 | $23.4 | $1,980.1 | ||||||||||||
Operating income (loss) | 223.2 | 88.6 | 112.3 | 22.7 | (40.9 | ) | 405.9 | |||||||||||
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 |
Industrial Gases – Americas | Industrial Gases – EMEA | Industrial Gases – Asia | Industrial Gases – Global | Corporate and other | Segment Total | |||||||||||||
Six Months Ended 31 March 2018 | ||||||||||||||||||
Sales | $1,823.0 | $1,077.5 | $1,201.2 | $234.7 | $35.9 | $4,372.3 | ||||||||||||
Operating income (loss) | 439.5 | 221.2 | 324.2 | 21.6 | (90.4 | ) | 916.1 | |||||||||||
Depreciation and amortization | 240.1 | 99.8 | 119.4 | 3.5 | 5.1 | 467.9 | ||||||||||||
Equity affiliates' income | 35.5 | 24.2 | 29.6 | .7 | — | 90.0 | ||||||||||||
Six Months Ended 31 March 2017 | ||||||||||||||||||
Sales | $1,754.0 | $813.9 | $874.2 | $364.4 | $56.1 | $3,862.6 | ||||||||||||
Operating income (loss) | 446.5 | 178.6 | 230.7 | 30.9 | (70.0 | ) | 816.7 | |||||||||||
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 | ||||||||||||
Total Assets | ||||||||||||||||||
31 March 2018 | $5,915.0 | $3,475.5 | $4,779.1 | $252.5 | $4,089.0 | $18,511.1 | ||||||||||||
30 September 2017 | 5,840.8 | 3,276.1 | 4,412.1 | 279.6 | 4,648.4 | 18,457.0 |
Three Months Ended | Six Months Ended | |||||||||||
31 March | 31 March | |||||||||||
Operating Income | 2018 | 2017 | 2018 | 2017 | ||||||||
Segment total | $455.4 | $405.9 | $916.1 | $816.7 | ||||||||
Business separation costs | — | — | — | (32.5 | ) | |||||||
Cost reduction and asset actions | — | (10.3 | ) | — | (60.3 | ) | ||||||
Consolidated Total | $455.4 | $395.6 | $916.1 | $723.9 |
Three Months Ended | Six Months Ended | |||||||||||
31 March | 31 March | |||||||||||
Equity Affiliates' Income | 2018 | 2017 | 2018 | 2017 | ||||||||
Segment total | $43.7 | $34.2 | $90.0 | $72.2 | ||||||||
Tax reform repatriation - equity method investment | — | — | (32.5 | ) | — | |||||||
Consolidated Total | $43.7 | $34.2 | $57.5 | $72.2 |
31 March | 30 September | |||||
Total Assets | 2018 | 2017 | ||||
Segment total | $18,511.1 | $18,457.0 | ||||
Discontinued operations | — | 10.2 | ||||
Consolidated Total | $18,511.1 | $18,467.2 |