Air Products and Chemicals (APD) 10-Q 26 Jan 10 2010 Q1 Quarterly report Financial data

Document and Company Informatio

Document and Company Information (USD $)
In Billions, except Share data	3 Months Ended Dec. 31, 2009	Jan. 19, 2010	Mar. 31, 2009
Document and Company Information [Abstract]
Entity Registrant Name	AIR PRODUCTS & CHEMICALS INC /DE/
Entity Central Index Key	0000002969
Document Type	10-Q
Document Period End Date	2009-12-31
Amendment Flag	false
Current Fiscal Year End Date	--09-30
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			11.8
Entity Common Stock, Shares Outstanding		212,152,350

Consolidated Balance Sheets (Un

Consolidated Balance Sheets (Unaudited) (USD $)
In Millions	Dec. 31, 2009	Sep. 30, 2009
Current Assets
Cash and cash items	$323	488.2
Trade receivables, less allowances for doubtful accounts	1377.8	1363.2
Inventories	522.6	509.6
Contracts in progress, less progress billings	132.2	132.3
Prepaid expenses	136.8	99.7
Other receivables and current assets	286.6	399.8
Current assets of discontinued operations	4.2	5
Total Current Assets	2783.2	2997.8
Investment In Net Assets of and Advances to Equity Affiliates	878.2	868.1
Plant and Equipment, at cost	15957.2	15751.3
Less: Accumulated depreciation	9,012	8891.7
Plant and Equipment, net	6945.2	6859.6
Goodwill	912.2	916
Intangible Assets, net	259.5	262.6
Noncurrent Capital Lease Receivables	717.7	687
Other Noncurrent Assets	418.5	438
Total Assets	12914.5	13029.1
Current Liabilities
Payables and accrued liabilities	1378.5	1660.4
Accrued income taxes	43.9	42.9
Short-term borrowings	269.1	333.8
Current portion of long-term debt	444.5	452.1
Current liabilities of discontinued operations	8.9	14.4
Total Current Liabilities	2144.9	2503.6
Long-Term Debt	3705.1	3715.6
Deferred Income and Other Noncurrent Liabilities	1509.4	1,522
Deferred Income Taxes	371	357.9
Total Liabilities	7730.4	8099.1
Equity
Common stock (par value $1 per share; 2010 and 2009 - 249,455,584 shares)	249.4	249.4
Capital in excess of par value	809.7	822.9
Retained earnings	7389.8	7234.6
Accumulated other comprehensive income (loss)	-1115.2	-1161.8
Treasury stock, at cost (2010 - 37,303,234 shares; 2009 - 38,195,320 shares)	-2299.8	-2353.2
Total Air Products Shareholders' Equity	5033.9	4791.9
Noncontrolling Interests	150.2	138.1
Total Equity	5184.1	4,930
Total Liabilities and Equity	12914.5	13029.1

1_Consolidated Balance Sheets (

Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $)
	Dec. 31, 2009	Sep. 30, 2009
Equity
Common stock, par value	1	1
Common stock, issued shares	249,455,584	249,455,584
Treasury stock, shares	37,303,234	38,195,320

Consolidated Income Statements

Consolidated Income Statements (Unaudited) (USD $)
In Millions, except Per Share data	3 Months Ended Dec. 31, 2009	3 Months Ended Dec. 31, 2008
Sales	2173.5	2195.3
Cost of sales	1568.6	1629.7
Selling and administrative	244.1	247
Research and development	27.2	33.2
Global cost reduction plan	0	174.2
Other income, net	11.4	2.9
Operating Income	345	114.1
Equity affiliates' income	26.9	24.5
Interest expense	31.6	36.5
Income from Continuing Operations before Taxes	340.3	102.1
Income tax provision	83.5	7.1
Income from Continuing Operations	256.8	95
Loss from Discontinued Operations, net of tax	0	-21.4
Net Income	256.8	73.6
Less: Net income attributable to noncontrolling interests	5	5
Net Income Attributable to Air Products	251.8	68.6
Net Income Attributable to Air Products
Income from continuing operations	251.8	90
Loss from Discontinued Operations	0	-21.4
Net Income Attributable to Air Products	251.8	68.6
Basic Earnings Per Common Share Attributable to Air Products
Income from continuing operations	1.19	0.43
Loss from discontinued operations	$0	-0.1
Net Income Attributable to Air Products	1.19	0.33
Diluted Earnings Per Common Share Attributable to Air Products
Income from continuing operations	1.16	0.42
Loss from discontinued operations	$0	-0.1
Net Income Attributable to Air Products	1.16	0.32
Weighted Average of Common Shares Outstanding (in millions)	211.7	209.4
Weighted Average of Common Shares Outstanding Assuming Dilution (in millions)	217	212.1
Dividends Declared Per Common Share - Cash	0.45	0.44

Consolidated Comprehensive Inco

Consolidated Comprehensive Income Statements (Unaudited) (USD $)
In Millions	3 Months Ended Dec. 31, 2009	3 Months Ended Dec. 31, 2008
Net Income	256.8	73.6
Other Comprehensive Income (Loss), net of tax:
Translation adjustments, net of tax (benefit) of $8.3 and $(16.0)	34.9	(321)
Net (loss) gain on derivatives, net of tax (benefit) of $(1.1) and $9.2	-2.4	11.9
Unrealized holding gain (loss) on available-for-sale securities, net of tax (benefit) of $.1 and $(.6)	0.1	-1.1
Reclassification adjustments:
Currency translation adjustment	0	-3.2
Derivatives, net of tax (benefit) of $.8 and $(9.7)	2.5	-14.4
Pension and postretirement benefits, net of tax of $6.5 and $1.3	12.4	2.8
Total Other Comprehensive Income (Loss)	47.5	(325)
Comprehensive Income (Loss)	304.3	-251.4
Comprehensive Income Attributable to Noncontrolling Interests	5.9	1.8
Comprehensive Income (Loss) Attributable to Air Products	298.4	-253.2

2_Consolidated Comprehensive In

Consolidated Comprehensive Income Statements (Unaudited) (Parenthetical) (USD $)
In Millions	3 Months Ended Dec. 31, 2009	3 Months Ended Dec. 31, 2008
Other Comprehensive Income (Loss), net of tax:
Tax effect on translation adjustments	8.3	($16)
Tax effect on net (loss) gain on derivatives	-1.1	9.2
Tax effect on unrealized holding gain (loss) on available-for-sale securities	0.1	-0.6
Reclassification adjustments:
Tax effect on derivatives reclassified	0.8	-9.7
Tax effect on pension and postretirement benefits reclassified	6.5	1.3

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) (USD $)
In Millions	3 Months Ended Dec. 31, 2009		3 Months Ended Dec. 31, 2008
Operating Activities
Net income	256.8		73.6
Less: Net income attributable to noncontrolling interests	5		5
Net income attributable to Air Products	251.8		68.6
Adjustments to reconcile income to cash provided by operating activities:
Depreciation and amortization	217.1		200.6
Impairment of assets of continuing operations	0.6		32.1
Impairment of assets of discontinued operations	0		48.7
Deferred income taxes	115.3		-0.6
Undistributed earnings of unconsolidated affiliates	-8.4		-10.9
Loss on sale of assets and investments	0.4		1.9
Share-based compensation	7.7		17.5
Noncurrent capital lease receivables	-30.7		(37)
Other adjustments	30.1		-5.6
Working capital changes that provided (used) cash, excluding effects of acquisitions and divestitures:
Trade receivables	(27)		101.7
Inventories	-18.1		-53.7
Contracts in progress	9.3		-6.6
Other receivables	11.8		-74.2
Payables and accrued liabilities	-289.9		-42.9
Other working capital	-76.1		-40.4
Cash Provided by Operating Activities	193.9	[1]	199.2	[1]
Investing Activities
Additions to plant and equipment	-288.8		-291.7
Acquisitions, less cash acquired	-9.9		-1.6
Investment in and advances to unconsolidated affiliates	(3)		-0.1
Proceeds from sale of assets and investments	13.1		18.9
Proceeds from sale of discontinued operations	0		0.9
Change in restricted cash	13.2		-31.7
Cash Used for Investing Activities	-275.4		-305.3
Financing Activities
Long-term debt proceeds	53.1		109
Payments on long-term debt	(26)		-41.4
Net (decrease) increase in commercial paper and short-term borrowings	-51.6		145.7
Dividends paid to shareholders	-95.1		-92.1
Proceeds from stock option exercises	27.7		1.1
Excess tax benefit from share-based compensation	8.2		0.6
Cash (Used for) Provided by Financing Activities	-83.7		122.9
Effect of Exchange Rate Changes on Cash	0		-1.8
(Decrease) Increase in Cash and Cash Items	-165.2		15
Cash and Cash Items-Beginning of Year	488.2		103.5
Cash and Cash Items-End of Period	$323		118.5
[1]Pension plan contributions of $255.7 and $42.6, respectively

Basis of Presentation and Major

Basis of Presentation and Major Accounting Policies
	3 Months Ended Dec. 31, 2009 USD / shares
Basis of Presentation and Major Accounting Policies [Abstract]
BASIS OF PRESENTATION AND MAJOR ACCOUNTING POLICIES	1. BASIS OF PRESENTATION AND MAJOR ACCOUNTING POLICIES Refer to the Companys 2009 Form 10-K for a description of major accounting policies. There have been no material changes to these accounting policies during the first three months of 2010 other than those detailed in Note 2. The consolidated financial statements of Air Products and Chemicals, Inc. and its subsidiaries (the Company, Air Products, or registrant) included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. In the opinion of the Company, the accompanying statements reflect adjustments necessary to present fairly the financial position, results of operations, and cash flows for those periods indicated, and contain adequate disclosure to make the information presented not misleading. Adjustments included herein are of a normal, recurring nature unless otherwise disclosed in the Notes. The interim results for the periods indicated herein, however, do not reflect certain adjustments, such as the valuation of inventories on the LIFO cost basis, which can only be finally determined on an annual basis. The consolidated financial statements and related Notes included herein should be read in conjunction with the financial statements and Notes thereto included in the Companys latest Form 10-K in order to fully understand the basis of presentation. Results of operations for interim periods are not necessarily indicative of the results of operations for a full year. The Company has evaluated subsequent events for potential recognition and/or disclosure through 26 January2010, the date the consolidated financial statements included in this report on Form 10-Q were issued. There were no subsequent events required to be recognized or disclosed in the financial statements.

New Accounting Guidance

New Accounting Guidance
	3 Months Ended Dec. 31, 2009 USD / shares
New Accounting Guidance [Abstract]
NEW ACCOUNTING GUIDANCE	2. NEW ACCOUNTING GUIDANCE Guidance Implemented Business Combinations In December2007, the Financial Accounting Standards Board (FASB)issued authoritative guidance to affirm that the acquisition method of accounting (previously referred to as the purchase method) be used for all business combinations and for an acquirer to be identified for each business combination. This guidance defines the acquirer as the entity that obtains control of one or more businesses in the business combination and establishes the acquisition date as the date that the acquirer achieves control. Among other requirements, the guidance requires the acquiring entity in a business combination to recognize at full fair value all the assets acquired and liabilities assumed in the transaction. If a business combination is achieved in stages, the previously-held ownership interest is adjusted to fair value at the acquisition date, and any resulting gain or loss is recognized in earnings. Contingent consideration is recognized at fair value at the acquisition date, and restructuring and acquisition-related costs are expensed as incurred. The fair value of assets and liabilities acquired, including uncertain tax positions, can be adjusted during the measurement period. Any adjustments after the measurement period, which cannot exceed one year, will be recognized in earnings. This guidance was effective for the Company on 1 October2009 and will be applied prospectively. The adoption of this guidance did not have a material impact on the Companys consolidated financial statements. During the three months ended 31 December2009, the Company did not enter into any significant business combinations. Noncontrolling Interests In December2007, the FASB issued authoritative guidance that establishes the accounting and reporting standards for the noncontrolling interests in a subsidiary and for the deconsolidation of a subsidiary. It requires entities to report noncontrolling interests in subsidiaries separately within equity in the consolidated balance sheets. It also requires disclosure, on the face of the consolidated statement of income, of the amounts of consolidated net income attributable to the parent and noncontrolling interests. Changes in a parents ownership interests while the parent retains control are treated as equity transactions. If a parent loses control of a subsidiary, any retained noncontrolling interests would be measured at fair value with any gain or loss recognized in earnings. This guidance was effective for the Company on 1 October2009 and will be applied prospectively, except for the presentation and disclosure requirements related to noncontrolling interests, which are applied retrospectively for all periods presented. The Companys financial statements have been updated to reflect the new presentation. Prior year amounts have been reclassified to conform to the current year presentation. Fair Value Measurements In September2006, the FASB issued authoritative guidance that defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. Effective 1 October2008, the Company a

Global Cost Reduction Plan

Global Cost Reduction Plan
	3 Months Ended Dec. 31, 2009 USD / shares
Global Cost Reduction Plan [Abstract]
GLOBAL COST REDUCTION PLAN	3. GLOBAL COST REDUCTION PLAN In the first quarter of 2009, the results from continuing operations included a charge of $174.2 ($116.1 after-tax, or $.55 per share) for the global cost reduction plan. For additional information on this charge, as well as a subsequent charge for the plan in the third quarter of 2009, refer to the Companys 2009 Form 10-K. The planned actions associated with the global cost reduction plan are expected to be substantially completed within one year of when the related charges were recognized. As of 31 December2009, the majority of the planned actions associated with the first quarter 2009 charge were completed, with the exception of certain position eliminations and/or associated benefit payments. These actions are expected to be completed in the second quarter of 2010. During the first quarter of 2010, the Company revised its estimate of the costs associated with the 2009 global cost reduction plan. The unfavorable impact of additional severance and other benefits was offset by a favorable variance related to completed business exits and asset management actions. The adjustment to the charge was excluded from segment operating profit and did not have a material impact on any individual segment. The following table summarizes changes to the carrying amount of the accrual for the global cost reduction plan: Asset Severance and Impairments/ Other Benefits Other Costs Total First quarter 2009 charge $ 120.0 $ 54.2 $ 174.2 Third quarter 2009 charge 90.0 34.0 124.0 Environmental charge (a) (16.0 ) (16.0 ) Noncash items (33.8 ) (b) (66.1 ) (99.9 ) Cash expenditures (75.3 ) (.9 ) (76.2 ) Currency translation adjustment 4.3 4.3 30 September2009 $ 105.2 $ 5.2 $ 110.4 Adjustment to charge 6.6 (6.6 ) Noncash items (3.5 ) (b) 2.4 (1.1 ) Cash expenditures (34.4 ) (34.4 ) Currency translation adjustment (1.1 ) (1.1 ) 31 December2009 $ 72.8 $ 1.0 (c) $ 73.8 (a) Reflected in accrual for environmental obligations. See Note 10. (b) Primarily pension-related costs which are reflected in the accrual for pension benefits. (c) Relates to costs associated with the sale of an asset which is expected to be paid in the second quarter of 2010.

Discontinued Operations

Discontinued Operations
	3 Months Ended Dec. 31, 2009 USD / shares
Discontinued Operations [Abstract]
DISCONTINUED OPERATIONS	4. DISCONTINUED OPERATIONS In fiscal 2009, the Company completed the divestiture of its U.S. Healthcare business which has been accounted for as discontinued operations. For additional historical information on this divestiture, refer to the Companys 2009 Form 10-K. In the first quarter of 2009, the U.S. Healthcare business generated sales of $48.2 and income from operations, net of tax, of $.7. In addition, the Company recorded an impairment charge of $48.7 ($30.9 after-tax, or $.15 per share) reflecting a revision in the estimated net realizable value of the U.S. Healthcare business. Also, a tax benefit of $8.8, or $.04 per share, was recorded to revise the estimated tax benefit related to previously recognized impairment charges. Assets and liabilities classified as discontinued operations for the U.S. Healthcare business were $4.2 and $8.9, respectively, at 31 December2009 and $5.0 and $14.4, respectively, at 30 September2009.

Inventories

Inventories
	3 Months Ended Dec. 31, 2009 USD / shares
Inventories [Abstract]
INVENTORIES	5. INVENTORIES The components of inventories are as follows: 31 December 30 September 2009 2009 Inventories at FIFO Cost Finished goods $ 410.4 $ 405.5 Work in process 24.1 20.9 Raw materials and supplies 155.8 151.1 590.3 577.5 Less: Excess of FIFO cost over LIFO cost (67.7 ) (67.9 ) $ 522.6 $ 509.6 FIFO cost approximates replacement cost. The Companys inventories have a high turnover, and as a result, there is little difference between the original cost of an item and its current replacement cost.

Goodwill

Goodwill
	3 Months Ended Dec. 31, 2009 USD / shares
Goodwill [Abstract]
GOODWILL	6. GOODWILL Changes to the carrying amount of consolidated goodwill by segment for the three months ended 31 December2009 are as follows: 30 September Currency 31 December 2009 Translation 2009 Merchant Gases $ 601.3 $ (4.7 ) $ 596.6 Tonnage Gases 16.3 .1 16.4 Electronics and Performance Materials 298.4 .8 299.2 $ 916.0 $ (3.8 ) $ 912.2 Goodwill is subject to impairment testing at least annually. In addition, goodwill is tested more frequently if a change in circumstances or the occurrence of events indicates that potential impairment exists.

Financial Instruments

Financial Instruments
	3 Months Ended Dec. 31, 2009 USD / shares
Financial Instruments [Abstract]
FINANCIAL INSTRUMENTS	7. FINANCIAL INSTRUMENTS Currency Price Risk Management The Companys earnings, cash flows, and financial position are exposed to foreign currency risk from foreign currency denominated transactions and net investments in foreign operations. It is the policy of the Company to minimize its cash flow volatility to changes in currency exchange rates. This is accomplished by identifying and evaluating the risk that the Companys cash flows will change in value due to changes in exchange rates and by determining the appropriate strategies necessary to manage such exposures. The Companys objective is to maintain economically balanced currency risk management strategies that provide adequate downside protection. Forward Exchange Contracts The Company enters into forward exchange contracts to reduce the cash flow exposure to foreign currency fluctuations associated with highly anticipated cash flows and certain firm commitments such as the purchase of plant and equipment. Forward exchange contracts are also used to hedge the value of investments in certain foreign subsidiaries and affiliates by creating a liability in a currency in which the Company has a net equity position. In addition to the foreign exchange contracts that are designated as hedges, the Company also hedges foreign currency exposures utilizing forward exchange contracts that are not designated as hedges. These contracts are used to hedge foreign currency-denominated monetary assets and liabilities, primarily working capital. The primary objective of these forward contracts is to protect the value of foreign currency-denominated monetary assets and liabilities from the effects of volatility in foreign exchange rates that might occur prior to their receipt or settlement. Option Contracts In certain limited situations, the Company enters into option contracts to manage cash flow exposures to foreign currency fluctuations. Similar to forward contracts, these instruments are evaluated for hedge accounting treatment and are recognized on the balance sheet at fair value. As of 31 December2009 and 30 September2009, there were no outstanding option contracts. The table below summarizes the Companys outstanding currency price risk management instruments: 31 December 2009 30 September 2009 US$ Years Average US$ Years Average Notional Maturity Notional Maturity Forward exchange contracts: Cash flow hedges $ 1,809.8 .5 $ 1,799.3 .8 Net investment hedges 902.1 2.9 873.6 3.5 Fair value hedges 2.7 .4 Hedges not designated 349.4 .3 330.3 .6 Total Forward Exchange Contracts $ 3,061.3 1.2 $ 3,005.9 1.6 In addition to the above, the Company uses foreign currency denominated debt and qualifying intercompany loans to hedge the foreign currency exposures of the Companys net investment in certain foreign affiliates. The designated foreign currency denominated debt includes 1,013.0 at 31 December2009 and 30 September2009. The designated intercompany loans include 437.0

Fair Value Measurements

Fair Value Measurements
	3 Months Ended Dec. 31, 2009 USD / shares
Fair Value Measurements [Abstract]
FAIR VALUE MEASUREMENTS	8. FAIR VALUE MEASUREMENTS Fair value is defined as an exit price (i.e., the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date). The methods and assumptions used to measure the fair value of financial instruments are as follows: Derivatives The fair value of the Companys interest rate swap agreements and foreign exchange contracts are based on estimates using standard pricing models that take into account the present value of future cash flows as of the balance sheet date. The computation of the fair values of these instruments is generally performed by the Company. These standard pricing models utilize inputs which are derived from or corroborated by observable market data such as interest rate yield curves and currency spot and forward rates. In addition, on an ongoing basis, the Company randomly tests a subset of its valuations against valuations received from the counterparty to the transaction to validate the accuracy of its standard pricing models. The fair value of commodity swaps is based on current market price as provided by the financial institutions with which the commodity swaps have been executed. Counterparties to these derivative contracts are highly rated financial institutions. Other Investments The fair value of other investments is based on quoted market prices in publicly traded companies from the New York and Tokyo Stock Exchanges. Other investments are reported within other noncurrent assets on the balance sheet. Long-term Debt The fair value of the Companys debt is based on estimates using standard pricing models that take into account the present value of future cash flows as of the balance sheet date, and these standard valuation models utilize observable market data such as interest rate yield curves and currency spot rates. The computation of the fair value of these instruments is generally performed by the Company. The carrying values and fair values of financial instruments were as follows: 31 December 2009 30 September 2009 Carrying Value Fair Value Carrying Value Fair Value Assets Derivatives Foreign exchange contracts $ 43.6 $ 43.6 $ 59.8 $ 59.8 Interest rate swap contracts 13.6 13.6 15.1 15.1 Commodity swap contracts 4.3 4.3 Other investments 19.5 19.5 19.4 19.4 Liabilities Derivatives Foreign exchange contracts $ 71.1 $ 71.1 $ 103.9 $ 103.9 Interest rate swap contracts 4.4 4.4 3.4 3.4 Commodity swap contracts 2.4 2.4 Long-term debt, including current portion 4,149.6 4,344.0 4,167.7 4,479.5 The carrying amounts reported in the balance sheet for cash and cash items, trade receivables, payables and accrued liabilities, accrued income taxes, and short-term borrowings approximate fair value due to t

Retirement Benefits

Retirement Benefits
	3 Months Ended Dec. 31, 2009 USD / shares
Retirement Benefits [Abstract]
RETIREMENT BENEFITS	9. RETIREMENT BENEFITS The components of net pension cost for the defined benefit pension plans and other postretirement benefit cost for the three months ended 31 December2009 and 2008 were as follows: Three Months Ended 31 December 2009 2008 2009 2008 Pension Benefits Other Benefits U.S. International U.S. International Service cost $ 10.6 $ 6.2 $ 8.5 $ 6.6 $ 1.2 $ 1.5 Interest cost 30.9 15.9 30.7 15.1 1.1 1.4 Expected return on plan assets (41.1 ) (16.8 ) (35.5 ) (13.5 ) Prior service cost (credit)amortization .7 .2 .6 .4 (.3 ) Actuarial loss amortization 11.7 5.1 1.5 2.3 .7 .4 Settlement and curtailment charges .5 Special termination benefits 3.5 4.4 10.0 Other .8 .1 Net periodic benefit cost $ 12.8 $ 15.4 $ 10.2 $ 21.0 $ 3.0 $ 3.0 Special termination benefits for the three months ended 31 December2009 and 2008 included $3.5 and $14.2 for the global cost reduction plan, respectively. For the three months ended 31 December2009 and 2008, the Companys cash contributions to funded plans and benefit payments under unfunded plans were $255.7 and $42.6, respectively. Total contributions for fiscal 2010 are expected to be approximately $360. During fiscal 2009, total contributions were $184.8.

Commitments and Contingencies

Commitments and Contingencies
	3 Months Ended Dec. 31, 2009 USD / shares
Commitments and Contingencies [Abstract]
COMMITMENTS AND CONTINGENCIES	10. COMMITMENTS AND CONTINGENCIES Litigation The Company is involved in various legal proceedings, including competition, environmental, health, safety, product liability, and insurance matters. During the third quarter of 2008, a unit of the Brazilian Ministry of Justice issued a report (previously issued in January2007, and then withdrawn) on its investigation of the Companys Brazilian subsidiary, Air Products Brasil Ltda., and several other Brazilian industrial gas companies. The report recommended that the Brazilian Administrative Council for Economic Defense impose sanctions on Air Products Brasil Ltda. and the other industrial gas companies for alleged anticompetitive activities. The Company is actively defending this action and cannot, at this time, reasonably predict the ultimate outcome of the proceedings or sanctions, if any, that will be imposed. While the Company does not expect that any sums it may have to pay in connection with this or any other legal proceeding would have a materially adverse effect on its consolidated financial position or net cash flows, a future charge for regulatory fines or damage awards could have a significant impact on the Companys net income in the period in which it is recorded. Environmental Accruals for environmental loss contingencies are recorded when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. The consolidated balance sheets at 31 December2009 and 30 September2009 included an accrual of $93.3 and $95.0, respectively, primarily as part of other noncurrent liabilities. The environmental liabilities will be paid over a period of up to 30years. The Company estimates the exposure for environmental loss contingencies to range from $93 to a reasonably possible upper exposure of $107 as of 31 December2009. During the first quarter of 2009, management committed to a plan to sell the production facility in Paulsboro, New Jersey and recognized a $16.0 environmental liability associated with this site. In December2009, the Company completed the sale of this facility. The Company is required by the New Jersey state law to investigate and, if contaminated, remediate a site upon its sale. The Company estimates that it will take at least several years to complete the investigation/remediation efforts at this site. Refer to Note 16 to the consolidated financial statements in the Companys 2009 Form 10-K for information on the Companys environmental accruals related to the Pace, Florida, Piedmont, S.C., and Paulsboro, N.J. facilities. At 31 December2009, the accrual balances associated with the Pace, Florida, Piedmont, S.C., and Paulsboro, N.J. facilities totaled $37.7, $22.1, and $15.7, respectively.

Share-Based Compensation

Share-Based Compensation
	3 Months Ended Dec. 31, 2009 USD / shares
Share-Based Compensation [Abstract]
SHARE-BASED COMPENSATION	11. SHARE-BASED COMPENSATION The Company has various share-based compensation programs, which include stock options, deferred stock units, and restricted shares. During the three months ended 31 December2009, the Company granted 1.0million stock options at a weighted-average exercise price of $83.60 and an estimated fair value of $25.94 per option. The fair value of these options was estimated using a lattice-based option valuation model that used the following assumptions: expected volatility of 32.6%; expected dividend yield of 2.1%; expected life in years of 6.7-8.0; and a risk-free interest rate of 2.9%-3.3%. In addition, the Company granted 241,606 deferred stock units at a weighted-average grant-date fair value of $83.58 and 30,886 restricted shares at a weighted-average grant-date fair value of $83.60. Refer to Note 18 in the Companys 2009 Form 10-K for information on the valuation and accounting for these programs. Share-based compensation cost charged against income in the three months ended 31 December2009 was $7.7 ($4.8 after-tax). Of the share-based compensation cost recognized, $5.7 was a component of selling and administrative expense, $1.6 a component of cost of sales, and $.4 a component of research and development. Share-based compensation cost charged against income in the three months ended 31 December2008 was $17.5 ($10.7 after-tax). The amount of share-based compensation cost capitalized in 2010 and 2009 was not material.

Equity

Equity
	3 Months Ended Dec. 31, 2009 USD / shares
Equity [Abstract]
EQUITY	12. EQUITY The following is a summary of the changes in total equity for the three months ended 31 December: 2009 2008 Non- Non- Air controlling Total Air controlling Total Products Interests Equity Products Interests Equity Balance at 30 September $ 4,791.9 $ 138.1 $ 4,930.0 $ 5,030.7 $ 136.2 $ 5,166.9 Defined benefit plans measurement date change, net of tax of $14.0 27.7 27.7 Adjusted Balance at 30 September $ 4,791.9 $ 138.1 $ 4,930.0 $ 5,058.4 $ 136.2 $ 5,194.6 Net Income 251.8 5.0 256.8 68.6 5.0 73.6 Components of Other Comprehensive Income (Loss), net of tax: Translation adjustments, net of tax (benefit)of $8.3 and $(16.0) 34.2 .7 34.9 (317.8 ) (3.2 ) (321.0 ) Net (loss)gain on derivatives, net of tax (benefit)of $(1.1) and $9.2 (2.4 ) (2.4 ) 11.9 11.9 Unrealized holding gain (loss)on available-for-sale securities, net of tax (benefit)of $.1 and $(.6) .1 .1 (1.1 ) (1.1 ) Reclassification adjustments: Currency translation adjustment (3.2 ) (3.2 ) Derivatives, net of tax (benefit)of $.8 and $(9.7) 2.5 2.5 (14.4 ) (14.4 ) Pension and postretirement benefits, net of tax of $6.5 and $1.3 12.2 .2 12.4 2.8 2.8 Total Other Comprehensive Income (Loss) 46.6 .9 47.5 (321.8 ) (3.2 ) (325.0 ) Comprehensive Income (Loss) 298.4 5.9 304.3 (253.2 ) 1.8 (251.4 ) Dividends on common stock (per share $.45, $.44) (95.5 ) (95.5 ) (92.2 ) (92.2 ) Dividends to noncontrolling interests (.2 ) (.2 ) Share-based compensation expense 7.7 7.7 17.5 17.5 Issuance of treasury shares for stock option and award plans 20.6 20.6 (4.5 ) (4.5 ) Tax benefits of stock option and award plans 11.9 11.9 .9 .9 Contribution from noncontrolling interests 6.5 6.5 Other equity transactions (1.1 ) (.1 ) (1.2 ) (.8 ) (.1 ) (.9 ) Balance at 31 December $ 5,033.9 $ 150.2 $ 5,184.1 $ 4,726.1 $ 137.9 $ 4,864.0

Earnings Per Share

Earnings Per Share
	3 Months Ended Dec. 31, 2009 USD / shares
Earnings Per Share [Abstract]
EARNINGS PER SHARE	13. EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per share (EPS): Three Months Ended 31 December 2009 2008 NUMERATOR Net Income Attributable to Air Products (used in basic and diluted EPS) Income from continuing operations $ 251.8 $ 90.0 Loss from discontinued operations (21.4 ) Net Income Attributable to Air Products $ 251.8 $ 68.6 DENOMINATOR (in millions) Weighted average number of common shares used in basic EPS 211.7 209.4 Effect of dilutive securities Employee stock options 4.4 1.7 Other award plans .9 1.0 5.3 2.7 Weighted average number of common shares and dilutive potential common shares used in diluted EPS 217.0 212.1 BASIC EPS ATTRIBUTABLE TO AIR PRODUCTS Income from continuing operations $ 1.19 $ .43 Loss from discontinued operations (.10 ) Net Income Attributable to Air Products $ 1.19 $ .33 DILUTED EPS ATTRIBUTABLE TO AIR PRODUCTS Income from continuing operations $ 1.16 $ .42 Loss from discontinued operations (.10 ) Net Income Attributable to Air Products $ 1.16 $ .32 Options on 2.2million shares and 8.8million shares were antidilutive and therefore excluded from the computation of diluted earnings per share for the three months ended 31 December2009 and 2008, respectively.

Supplemental Information

Supplemental Information
	3 Months Ended Dec. 31, 2009 USD / shares
Supplemental Information [Abstract]
SUPPLEMENTAL INFORMATION	14. SUPPLEMENTAL INFORMATION 2009 Customer Bankruptcy As a result of events which occurred during the third quarter of 2009, the Company recognized a $22.2 charge primarily for the write-off of certain receivables due to a customer bankruptcy. This customer, who principally receives product from the Tonnage Gases segment, began operating under Chapter11 bankruptcy protection on 6 January2009. Sales and operating income associated with this customer are not material to the Tonnage Gases segments results. At 31 December2009, the Company had remaining outstanding receivables with the customer of $16.3. At the present time, the Company does not expect to recognize additional charges related to this customer. Share Repurchase Program On 20 September2007, the Board of Directors authorized the repurchase of up to $1,000 of the Companys outstanding common stock. In the first quarter of 2010, the Company did not purchase any shares under this authorization. At 31 December2009, $649.2 in share repurchase authorization remains.

Business Segment and Geographic

Business Segment and Geographic Information
	3 Months Ended Dec. 31, 2009 USD / shares
Business Segment and Geographic Information [Abstract]
BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION	15. BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION The Companys segments are organized based on differences in product and/or type of customer. The Company has four business segments consisting of Merchant Gases, Tonnage Gases, Electronics and Performance Materials, and Equipment and Energy. Business Segment Information Three Months Ended 31 December 2009 2008 Revenues from External Customers Merchant Gases $ 933.6 $ 925.2 Tonnage Gases 697.9 744.0 Electronics and Performance Materials 433.4 406.6 Equipment and Energy 108.6 119.5 Segment and Consolidated Totals $ 2,173.5 $ 2,195.3 Operating Income Merchant Gases $ 189.6 $ 170.5 Tonnage Gases 100.2 108.8 Electronics and Performance Materials 48.4 24.6 Equipment and Energy 7.8 7.0 Segment Totals $ 346.0 $ 310.9 Global cost reduction plan (174.2 ) Other (1.0 ) (22.6 ) Consolidated Totals $ 345.0 $ 114.1 31 December 30 September 2009 2009 Identifiable Assets (a) Merchant Gases $ 4,916.5 $ 4,917.0 Tonnage Gases 3,752.3 3,597.8 Electronics and Performance Materials 2,234.6 2,249.5 Equipment and Energy 307.1 303.3 Segment Totals $ 11,210.5 $ 11,067.6 Other 821.6 1,088.4 Discontinued operations 4.2 5.0 Consolidated Totals $ 12,036.3 $ 12,161.0 (a) Identifiable assets are equal to total assets less investments in and advances to equity affiliates. Geographic Information Three Months Ended 31 December 2009 2008 Revenues from External Customers North America $ 1,027.9 $ 1,110.5 Europe 724.3 717.4 Asia 371.5 325.6 Latin America 49.8 41.8 Total $ 2,173.5 $ 2,195.3 Geographic information is based on country of origin. The Europe segment operates principally in Belgium, France, Germany, the Netherlands, Poland, the U.K., and Spain. The Asia segment operates principally in China, Japan, Korea, and Taiwan.