Air Products Reports Solid Fourth Quarter and Fiscal 2013 Financial Results

 Air Products Reports Solid Fourth Quarter and Fiscal 2013 Financial Results

Full Year Summary

- Sales of $10.2 billion up six percent versus prior year

- Adjusted EPS of $5.50* or $4.73 on a GAAP basis - both up two percent versus
prior year

- Strengthened leadership positions with wins in China, hydrogen, electronics
and LNG

- Repurchased $462 million of shares

- Dividend increased by 11 percent - 31 years of consecutive increases

- Total shareholder return of 33 percent

Fourth Quarter Summary

- Sales of $2.6 billion up one percent excluding the PUI business

- Adjusted EPS of $1.47* up four* percent versus prior year and GAAP basis EPS
of $0.70 up nine percent

- Secured major hydrogen wins in India and Canada

PR Newswire

LEHIGH VALLEY, Pa., Oct. 29, 2013

LEHIGH VALLEY, Pa., Oct. 29, 2013 /PRNewswire/ --Air Products (NYSE:APD)
today reported net income of $315 million* and diluted earnings per share
(EPS) of $1.47* on a non-GAAP, continuing operations basis, for its fiscal
fourth quarter ended September 30, 2013.

These results exclude after-tax expenses of $164 million, or $0.77 per share,
primarily for cost reduction, and asset and product rationalization actions,
mainly in the Company's Electronics and Merchant Gases businesses, and for
streamlining corporate functions.

On a GAAP basis, net income and diluted EPS from continuing operations were
$150 million and $0.70, respectively, for the quarter.

The discussion of fourth quarter and full year results and guidance in this
release are based on non-GAAP continuing operations. A reconciliation to GAAP
results can be found at the end of this release.*

Fourth quarter revenues of $2,587 million decreased one percent versus prior
year on two percent lower base volumes, and a negative two percent impact due
to the previously announced decision to exit the Polyurethane Intermediates
(PUI) business. Higher energy pass-through and positive currency impacts
partially offset the lower volumes. Sequentially, overall sales increased two
percent, with underlying sales up three percent on higher volumes across all
business segments.

Operating income of $421 million for the quarter increased three percent
versus prior year. Operating margin of 16.3 percent was up 60 basis points
versus prior year despite higher pension costs. Sequentially, operating income
increased 10 percent and operating margin improved 130 basis points, mostly
due to higher volumes and lower costs.

For fiscal 2013, sales of $10,180 million increased six percent versus prior
year, with acquisitions contributing five percent and higher energy
pass-through contributing two percent, partially offset by one percent lower
volumes driven by the PUI business exit. Underlying sales, excluding PUI,
increased one percent on higher North America and Asia Tonnage Gases volumes,
higher Performance Materials volumes, and LNG equipment activity. Operating
income of $1,566 million improved two percent on the prior year. Operating
margin was down 60 basis points, primarily due to higher pension costs.

Commenting on the fiscal year, John McGlade, chairman, president and chief
executive officer, said, "We delivered on our key priorities and produced
strong returns for shareholders, reflecting our continued focus on cost
reduction, productivity improvements and disciplined project execution.
Despite a weak economy, our volumes improved and our productivity initiatives
more than offset inflation."

Fourth Quarter Results by Business Segment:

  oMerchant Gases sales of $1,054 million increased four percent versus prior
    year on higher volumes and improved pricing. Operating income of $177
    million increased ten percent versus prior year, largely due to higher
    volumes and improved pricing, and the completion of prior year cost
    reductions in Europe. Sequential sales increased two percent due to
    stronger volumes in the U.S/Canada and Asia. Operating income increased
    seven percent sequentially on higher volumes and lower costs.
  oTonnage Gases sales of $835 million decreased one percent versus the prior
    year mostly due to lower PUI volumes offsetting higher energy pass-through
    and positive currency impact. Excluding PUI, volumes were down one
    percent, with strong U.S. hydrogen volumes offset by a contract
    termination in Latin America. Operating income of $135 million was down
    four percent versus prior year due to higher maintenance costs, higher
    pension costs and the impact of the contract termination. Sequential sales
    decreased one percent as higher volumes were more than offset by lower
    energy pass-through. Sequential operating income increased nine percent,
    excluding PUI, largely due to higher volumes.
  oElectronics and Performance Materials sales of $580 million were down six
    percent versus prior year, primarily driven by lower Electronics equipment
    sales. Operating income of $96 million increased 12 percent, primarily due
    to higher inventory costs in the prior year. Operating margin improved 270
    basis points on the higher income and product mix. Sequential sales were
    up three percent on higher volumes. Sequential operating income improved
    10 percent and operating margin was up 120 basis points, primarily due to
    higher volumes.
  oEquipment and Energy sales of $118 million were down seven percent versus
    prior year due to lower ASU sales, partially offset by higher LNG project
    activity. Operating income of $21 million increased 16 percent versus
    prior year due to higher LNG project activity. Sequentially, sales
    increased 14 percent and operating income improved 28 percent on the
    higher LNG project activity. The sales backlog increased 23 percent versus
    prior quarter on continued LNG project orders.

Outlook

Air Products expects first quarter EPS from continuing operations to be
between $1.30 and $1.35 per share. The Company's guidance for continuing
operations for fiscal 2014 is a range of $5.70 to $5.90 per share.

Looking ahead, McGlade said, "We are taking decisive actions to build momentum
and accelerate earnings growth. Our priorities for 2014 remain consistent,
executing against our backlog, winning profitable new projects, loading
existing assets, and implementing further productivity and cost initiatives.
The investments we have made over the past several years are key drivers for
Air Products' future and we believe shareholders will realize stronger returns
because of these actions."

Access the Q4 earnings teleconference scheduled for 10:00 a.m. Eastern Time on
October 29 by calling 719-325-2339 and entering pass code 7953787, or access
event details on our website.

About Air Products

Air Products (NYSE:APD) provides atmospheric, process and specialty gases;
performance materials; equipment; and technology. For over 70 years, the
Company has enabled customers to become more productive, energy efficient and
sustainable. More than 20,000 employees in over 50 countries supply innovative
solutions to the energy, environment and emerging markets. These include
semiconductor materials, refinery hydrogen, coal gasification, natural gas
liquefaction, and advanced coatings and adhesives. In fiscal 2013, Air
Products had sales of $10.2 billion. For more information, visit
www.airproducts.com. 

Note: This release contains "forward-looking statements" within the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995,
including statements about earnings guidance and business outlook. These
forward-looking statements are based on management's reasonable expectations
and assumptions as of the date of this release. Actual performance and
financial results may differ materially from projections and estimates
expressed in the forward-looking statements because of many factors not
anticipated by management, including, without limitation, weakening or
reversal of global or regional economic recovery; future financial and
operating performance of major customers; unanticipated contract terminations
or customer cancellations or postponement of projects and sales; the impact of
competitive products and pricing; interruption in ordinary sources of supply
of raw materials; unanticipated asset impairments or losses; the impact of
price fluctuations in natural gas; the ability to recover unanticipated
increased energy and raw material costs from customers; costs and outcomes of
litigation or regulatory investigations; the impact of management and
organizational changes, including the chief executive officer search; the
success of productivity programs; the timing, impact, and other uncertainties
of future acquisitions or divestitures; significant fluctuations in interest
rates and foreign currencies from that currently anticipated; political risks,
including the risks of unanticipated government actions that may result in
project delays, cancellations or expropriations; the impact of changes in
environmental, tax or other legislation and regulations in jurisdictions in
which the Company and its affiliates operate; the impact on the effective tax
rate of changes in the mix of earnings among our U.S. and international
operations; and other risk factors described in the Company's Form 10K for its
fiscal year ended September 30, 2012. The Company disclaims any obligation or
undertaking to disseminate any updates or revisions to any forward-looking
statements contained in this document to reflect any change in the Company's
assumptions, beliefs or expectations or any change in events, conditions, or
circumstances upon which any such forward-looking statements are based.

* The presentation of non-GAAP measures is intended to enhance the usefulness
of financial information by providing measures which our management uses
internally to evaluate our baseline performance on a comparable basis.
Presented below are reconciliations of the reported GAAP results to the
non-GAAP measures.

CONSOLIDATED RESULTS
               Continuing Operations
               Q4                                       YTD
               Operating  Operating  Income    Diluted  Operating   Operating   Diluted
               Income     Margin               EPS      Income      Margin      EPS
 ^2013 GAAP   $  179.2     6.9%     $ 150.2   $ .70    $ 1,324.4    13.0%      $ 4.73
 ^2012 GAAP      157.9     6.1%       137.1     .64      1,282.4    13.3%        4.66
 ^Change GAAP $  21.3      80bp    $ 13.1    $ .06    $ 42.0       (30bp)    $ .07
 ^% Change       13%                  10%       9%       3%                      2%
 GAAP
 ^2013 GAAP   $  179.2     6.9%     $ 150.2   $ .70    $ 1,324.4    13.0%      $ 4.73
 ^Business
 restructuring
 and cost
 reduction        231.6     9.0%       157.9     .74      231.6      2.3%         .74
 plans (tax

 impact $73.7)
 ^Advisory
 costs (tax       10.1      .4%        6.4       .03      10.1       .1%          .03
 impact $3.7)
 ^2013
 Non-GAAP         420.9     16.3%      314.5     1.47     1,566.1    15.4%        5.50
 Measure
 ^2012 GAAP   $  157.9     6.1%     $ 137.1   $ .64    $ 1,282.4    13.3%      $ 4.66
 ^Business
 restructuring
 and cost         240.6     9.2%       161.8     .75      327.4      3.5%         1.03
 reduction
 plans^(a)
 ^Customer
 bankruptcy       9.8       .4%        6.1       .03      9.8        .1%          .03
 (tax impact
 $3.7)
 ^Gain on
 previously
 held equity      -         -          -         -        (85.9)     (.9)%        (.25)
 interest (tax
 impact $31.3)
 ^Q1 Spanish
 tax              -         -          -         -        -          -            .20
 settlement
 ^Q2 Spanish     -         -          -         -        -          -            (.27)
 tax ruling
 ^2012
 Non-GAAP         408.3     15.7%      305.0     1.42     1,533.7    16.0%        5.40
 Measure
 ^Change
 Non-GAAP      $  12.6      60bp    $ 9.5     $ .05    $ 32.4       (60bp)    $ .10
 Measure
 ^% Change
 Non-GAAP         3%                   3%        4%       2%                      2%
 Measure

                                  Operating       Operating
 ^2013 Q4 vs. 2013 Q3            Income          Margin
 ^2013 Q4 GAAP                   $  179.2          6.9%
 ^2013 Q3 GAAP                      383.1          15.0%
 ^Change GAAP                    $  (203.9)        (810bp)
 ^% Change GAAP                     (53)%
 ^2013 Q4 Non-GAAP Measure       $  420.9          16.3%
 ^2013 Q3 Non-GAAP Measure          383.1          15.0%
 ^Change Non-GAAP Measure        $  37.8           130bp
 ^% Change Non-GAAP Measure         10%
 ^(a)Tax impact of $78.8 and $105.0 for Q4 and YTD, respectively.

Capital Expenditures

We utilize a non-GAAP measure in the computation of capital expenditures and
include spending associated with facilities accounted for as capital leases
and purchases of noncontrolling interests. 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. Additionally, the purchase of noncontrolling
interests in a subsidiary is accounted for as an equity transaction and will
be reflected as a financing activity in the statement of cash flows.

The presentation of this non-GAAP measure is intended to enhance the
usefulness of information by providing a measure which our management uses
internally to evaluate and manage our expenditures.

Below is a reconciliation of capital expenditures on a GAAP basis to a
non-GAAP measure. 

                                     Three Months Ended  Twelve Months Ended
                                     30 September        30 September
 (Millions of dollars)               2013     2012       2013       2012
 Capital expenditures - GAAP basis   $ 507.0  $ 1,044.1  $ 1,747.8  $ 2,559.8
 Capital lease expenditures            55.8     72.3       234.9      212.2
 Purchase of noncontrolling            1.4      -          14.0       6.3
 interests
 Capital expenditures - Non-GAAP     $ 564.2  $ 1,116.4  $ 1,996.7  $ 2,778.3
 basis

                                                 FY2014 Forecast  FY2013
 Capital expenditures - GAAP basis             $ 1,800-1,900      $  1,747.8
 Capital lease expenditures/Purchase of          100-200          248.9
 noncontrolling interests
 Capital expenditures - Non-GAAP basis         $ 1,900-2,100      $  1,996.7





AIR PRODUCTS AND CHEMICALS, INC. and Subsidiaries
CONSOLIDATED INCOME STATEMENTS
(Unaudited)
                               Three Months Ended      Twelve Months Ended
                               30 September            30 September
 (Millions of dollars, except  2013        2012        2013         2012
 for share data)
 Sales                         $ 2,586.5   $ 2,605.8   $ 10,180.4   $ 9,611.7
 Cost of sales                   1,882.9     1,923.0     7,472.1      7,051.9
 Selling and administrative      260.2       248.0       1,066.3      946.8
 Research and development        34.6        36.1        133.7        126.4
 Business restructuring and      231.6       240.6       231.6        327.4
 cost reduction plans
 Gain on previously held         -           -           -            85.9
 equity interest
 Customer bankruptcy             -           9.8         -            9.8
 Pension settlements             7.9         -           12.4         -
 Advisory costs                  10.1        -           10.1         -
 Other income (expense), net     20.0        9.6         70.2         47.1
 Operating Income                179.2       157.9       1,324.4      1,282.4
 Equity affiliates' income       42.4        39.5        167.8        153.8
 Interest expense                35.4        38.9        141.8        123.7
 Income from Continuing          186.2       158.5       1,350.4      1,312.5
 Operations before Taxes
 Income tax provision            25.8        17.8        307.9        287.3
 Income from Continuing          160.4       140.7       1,042.5      1,025.2
 Operations
 Income (Loss) from
 Discontinued Operations, net    (13.1)      1.6         (10.0)       168.1
 of tax
 Net Income                      147.3       142.3       1,032.5      1,193.3
 Less: Net Income Attributable   10.2        3.6         38.3         26.0
 to Noncontrolling Interests
 Net Income Attributable to    $ 137.1     $ 138.7     $ 994.2      $ 1,167.3
 Air Products
 Net Income Attributable to
 Air Products
 Income from continuing        $ 150.2     $ 137.1     $ 1,004.2    $ 999.2
 operations
 Income (Loss) from              (13.1)      1.6         (10.0)       168.1
 discontinued operations
 Net Income Attributable to    $ 137.1     $ 138.7     $ 994.2      $ 1,167.3
 Air Products
 Basic Earnings Per Common
 Share Attributable to Air
 Products
 Income from continuing        $ .71       $ .65       $ 4.79       $ 4.73
 operations
 Income (Loss) from              (.06)       .01         (.05)        .80
 discontinued operations
 Net Income Attributable to    $ .65       $ .66       $ 4.74       $ 5.53
 Air Products
 Diluted Earnings Per Common
 Share Attributable to Air
 Products
 Income from continuing        $ .70       $ .64       $ 4.73       $ 4.66
 operations
 Income (Loss) from              (.06)       .01         (.05)        .78
 discontinued operations
 Net Income Attributable to    $ .64       $ .65       $ 4.68       $ 5.44
 Air Products
 Weighted Average Common         211.0       211.9       209.7        211.2
 Shares- Basic (in millions)
 Weighted Average Common         213.8       215.0       212.3        214.7
 Shares- Diluted (in millions)
 Dividends Declared Per Common $ .71       $ .64       $ 2.77       $ 2.50
 Share – Cash
 Other Data from Continuing
 Operations
    Depreciation and           $ 232.6     $ 220.3     $ 907.0      $ 840.8
    amortization
    Capital expenditures on a    564.2       1,116.4     1,996.7      2,778.3
    Non-GAAP basis
           (see page 5 for
           reconciliation)





AIR PRODUCTS AND CHEMICALS, INC. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Unaudited)
                                                     30 September 30 September
 (Millions of dollars)                                2013         2012
 Assets
 Current Assets
 Cash and cash items                                  $ 450.4      $ 454.4
 Trade receivables, net                                 1,544.3      1,544.7
 Inventories                                            706.1        786.6
 Contracts in progress, less progress billings          182.3        190.8
 Prepaid expenses                                       121.1        81.7
 Other receivables and current assets                   432.4        342.0
 Current assets of discontinued operations              2.5          15.6
 Total Current Assets                                   3,439.1      3,415.8
 Investment in net assets of and advances to equity     1,195.5      1,175.7
 affiliates
 Plant and equipment, at cost                           19,529.9     18,046.2
 Less: accumulated depreciation                         10,555.9     9,805.6
 Plant and equipment, net                               8,974.0      8,240.6
 Goodwill                                               1,653.8      1,598.4
 Intangible assets, net                                 717.3        761.6
 Noncurrent capital lease receivables                   1,476.9      1,328.9
 Other noncurrent assets                                393.5        393.6
 Noncurrent assets of discontinued operations           -            27.2
 Total Noncurrent Assets                                14,411.0     13,526.0
 Total Assets                                         $ 17,850.1   $ 16,941.8
 Liabilities and Equity
 Current Liabilities
 Payables and accrued liabilities                     $ 1,944.9    $ 1,927.7
 Accrued income taxes                                   63.0         48.5
 Short-term borrowings                                  709.9        633.4
 Current portion of long-term debt                      507.4        74.3
 Current liabilities of discontinued operations         2.4          6.0
 Total Current Liabilities                              3,227.6      2,689.9
 Long-term debt                                         5,056.3      4,584.2
 Other noncurrent liabilities                           1,164.3      1,980.9
 Deferred income taxes                                  827.2        670.8
 Noncurrent liabilities of discontinued operations      -            .2
 Total Noncurrent Liabilities                           7,047.8      7,236.1
 Total Liabilities                                      10,275.4     9,926.0
 Redeemable Noncontrolling Interest                     375.8        392.5
 Air Products Shareholders' Equity                      7,042.1      6,477.2
 Noncontrolling Interests                               156.8        146.1
 Total Equity                                           7,198.9      6,623.3
 Total Liabilities and Equity                         $ 17,850.1   $ 16,941.8





AIR PRODUCTS AND CHEMICALS, INC. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
                                                    Twelve Months Ended
                                                    30 September
 ^(Millions of dollars)                            2013          2012
 ^Operating Activities
 ^Net Income                                       $ 1,032.5     $ 1,193.3
 ^Less: Net income attributable to noncontrolling    38.3          26.0
 interests
 ^Net income attributable to Air Products          $ 994.2       $ 1,167.3
 ^(Income) Loss from discontinued operations         10.0          (168.1)
 ^Income from continuing operations attributable   $ 1,004.2     $ 999.2
 to Air Products
 ^Adjustments to reconcile income to cash provided
 by operating activities:
        Depreciation and amortization                 907.0         840.8
        Deferred income taxes                         12.8          65.2
        Benefit from Spanish tax ruling               -             (58.3)
        Gain on previously held equity interest       -             (85.9)
        Undistributed earnings of unconsolidated      (59.2)        (53.6)
        affiliates
        Gain on sale of assets and investments        (20.0)        (8.4)
        Share-based compensation                      43.5          43.8
        Noncurrent capital lease receivables          (151.4)       (282.5)
        Write-down of long-lived assets associated    100.4         80.2
        with restructuring / customer bankruptcy
        Other adjustments                             (76.4)        124.5
 ^Working capital changes that provided (used)
 cash, excluding effects of acquisitions and
 divestitures:
        Trade receivables                             4.8           (55.1)
        Inventories                                   75.0          1.3
        Contracts in progress, less progress          (16.2)        (42.9)
        billings
        Other receivables                             (77.0)        (18.3)
        Payables and accrued liabilities              (130.3)       249.7
        Other working capital                         (64.1)        (34.6)
 ^Cash Provided by Operating Activities              1,553.1       1,765.1
 ^Investing Activities
 ^Additions to plant and equipment                   (1,524.2)     (1,521.0)
 ^Acquisitions, less cash acquired                   (224.9)       (863.4)
 ^Investment in and advances to unconsolidated       1.3           (175.4)
 affiliates
 ^Proceeds from sale of assets and investments       52.8          52.5
 ^Change in restricted cash                          -             76.1
 ^Other investing activities                         (2.0)         (4.0)
 ^Cash Used for Investing Activities                 (1,697.0)     (2,435.2)
 ^Financing Activities
 ^Long-term debt proceeds                            927.2         900.4
 ^Payments on long-term debt                         (437.5)       (490.6)
 ^Net increase in commercial paper and short-term    437.7         9.8
 borrowings
 ^Dividends paid to shareholders                     (565.6)       (514.9)
 ^Purchase of treasury shares                        (461.6)       (53.1)
 ^Proceeds from stock option exercises               226.4         124.3
 ^Excess tax benefit from share-based compensation   37.9          31.0
 ^Payment for subsidiary shares from                 (14.0)        (58.4)
 noncontrolling interests
 ^Other financing activities                         (35.1)        (26.9)
 ^Cash Provided by (Used for) Financing Activities   115.4         (78.4)
 ^Discontinued Operations
 ^Cash provided by operating activities              14.3          33.6
 ^Cash provided by (used for) investing activities   (1.2)         765.4
 ^Cash Provided by Discontinued Operations           13.1          799.0
 ^Effect of Exchange Rate Changes on Cash            11.4          (18.6)
 ^Increase (Decrease) in Cash and Cash Items         (4.0)         31.9
 ^Cash and Cash Items – Beginning of Year            454.4         422.5
 ^Cash and Cash Items – End of Period              $ 450.4       $ 454.4





AIR PRODUCTS AND CHEMICALS, INC. and Subsidiaries
SUMMARY BY BUSINESS SEGMENTS
(Unaudited)
                            Three Months Ended         Twelve Months Ended
                            30 September               30 September
 ^(Millions of dollars)    2013           2012        2013         2012
 ^Sales to External
 Customers
      Merchant Gases        $  1,053.8     $ 1,017.0   $ 4,098.6    $ 3,662.4
      Tonnage Gases            834.9         846.0       3,387.3      3,206.7
      Electronics and          579.9         616.5       2,243.4      2,322.5
      Performance Materials
      Equipment and Energy     117.9         126.3       451.1        420.1
 ^Segment and Consolidated $  2,586.5     $ 2,605.8   $ 10,180.4   $ 9,611.7
 Totals
 ^Operating Income
      Merchant Gases        $  176.5       $ 160.6     $ 680.5      $ 644.0
      Tonnage Gases            134.7         140.9       515.9        512.0
      Electronics and
      Performance Materials    95.7          85.3        321.3        425.6
      ^(A)
      Equipment and Energy     20.5          17.7        65.5         44.6
 ^Segment Total            $  427.4       $ 404.5     $ 1,583.2    $ 1,626.2
      Business
      restructuring and        (231.6)       (240.6)     (231.6)      (327.4)
      cost reduction plans
      Customer bankruptcy      -             (9.8)       -            (9.8)
      Pension settlements      (7.9)         -           (12.4)       -
      Advisory costs           (10.1)        -           (10.1)       -
      Other                    1.4           3.8         (4.7)        (6.6)
 ^Consolidated Total       $  179.2       $ 157.9     $ 1,324.4    $ 1,282.4
 ^(A) The gain on remeasuring our previously held equity interest in DA
      NanoMaterials of $85.9 is reflected in the twelve months ended 30
     September 2012.

                                  30 September            30 September
 ^(Millions of dollars)              2013                   2012
 ^Identifiable Assets ^(B)
         Merchant Gases               $    6,729.9           $   6,428.5
         Tonnage Gases                     5,397.0               5,059.8
         Electronics and                   2,859.4               2,930.3
         Performance Materials
         Equipment and Energy              675.2                 379.3
 ^Segment Total                      $    15,661.5          $   14,797.9
         Other                             990.6                 925.4
         Discontinued operations           2.5                   42.8
 ^Consolidated Total                 $    16,654.6          $   15,766.1
 ^(B) Identifiable assets are equal to total assets less investment in net
 assets of and advances to equity affiliates.



AIR PRODUCTS AND CHEMICALS, INC. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

(Millions of dollars, unless otherwise indicated)

1. DISCONTINUED OPERATIONS

In January 2012, the Board of Directors authorized the sale of our Homecare
business, which had previously been reported as part of the Merchant Gases
operating segment. During the third quarter of 2012, we recorded a gain of
$207.4 ($150.3 after-tax, or $.70 per share) resulting from the sale of the
majority of this business to The Linde Group. We also recorded an impairment
charge of $33.5 ($29.5 after-tax, or $.14 per share) to write down the
remaining business, which is primarily in the United Kingdom and Ireland, to
its estimated net realizable value.

In the fourth quarter of 2013, we recorded an additional charge of $18.7
($13.6 after-tax, or $.06 per share) to update our estimate of the net
realizable value of the remaining business.

2. BUSINESS RESTRUCTURING AND COST REDUCTION PLANS

During the fourth quarter of 2013, we recorded an expense of $231.6 ($157.9
after-tax, or $.74 per share) to better align our cost structure with current
market conditions. These charges include $100.4 for asset actions and $58.5
for the final settlement of a long-term take-or-pay silane contract primarily
impacting the Electronics business due to continued weakness in the
photovoltaic (PV) and light-emitting diode (LED) markets. In addition, $71.9
was recorded for severance and benefits associated with the elimination of
approximately 700 positions. These reductions primarily impact our Merchant
Gases business and corporate functions. The actions are in response to weaker
than expected business conditions in Europe and Asia and reorganization of our
operations and functional areas.

The charge for this plan is excluded from segment operating profit. The charge
relates to the businesses at the segment level as follows: $61.0 in Merchant
Gases, $28.6 in Tonnage Gases, $141.0 in Electronics and Performance
Materials, and $1.0 in Equipment and Energy.

3. ADVISORY COSTS

We incurred legal and other advisory fees of $10.1 ($6.4 after-tax, or $.03
per share) in connection with our response to the rapid acquisition of a large
position in shares of our common stock by Pershing Square Capital Management
LLC and its affiliates (Pershing Square). These fees, which are reflected on
the consolidated income statements as "Advisory Costs," include costs incurred
before and after Pershing Square's disclosure of its holdings, and cover
advisory services related to the adoption of the Shareholder Rights Plan,
preparation for a potential proxy solicitation campaign, and entering into an
agreement with Pershing Square.

4. BUSINESS COMBINATIONS

On 30 August 2013, we acquired an air separation unit and integrated gases
liquefier in Guiyang, China. This acquisition enabled our Tonnage Gases
segment to secure a long-term sale of gas contract and provided our Merchant
Gases segment with additional capacity in the region. On 31 May 2013, we
acquired EPCO Carbondioxide Products, Inc. (EPCO), the largest independent
U.S. producer of liquid carbon dioxide (CO[2]). This acquisition expanded our
North American offerings of bulk industrial process gases in the Merchant
Gases business segment. In addition, on 1 April 2013, we acquired Wuxi
Chem-Gas Company, Ltd. (WCG). This acquisition provided our Merchant Gases
segment with additional gases presence in the Jiangsu Province of China.

The acquisitions were accounted for as business combinations, and their
results of operations were consolidated within their respective segments after
the acquisition dates. The aggregate purchase price, net of cash acquired,
for these acquisitions was $233, and resulted in recognition of $68 of
goodwill, none of which is deductible for tax purposes.

SOURCE Air Products

Website: http://www.airproducts.com
Contact: Media Inquiries: George Noon, tel: (610) 481-1990; e-mail:
noong@airproducts.com; Investor Inquiries: Simon Moore, tel: (610) 481-7461;
e-mail: mooresr@airproducts.com