2. Forward-Looking Statements
NOTE: This presentation contains โforward-looking statementsโ within the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. These forward-looking statements are based on managementโs
reasonable expectations and assumptions as of the date of this presentation regarding important risk
factors. Actual performance and financial results may differ materially from those expressed in the forward-
looking statements because of many factors, including those specifically referenced as future events or
outcomes that the company anticipates as well as, among other things, overall economic and business
conditions different than those currently anticipated and demand for Air Productsโ goods and services during that
time; competitive factors in the industries in which it competes; interruption in ordinary sources of supply; the
ability to recover unanticipated increased energy and raw material costs from customers; uninsured litigation
judgments or settlements; changes in government regulations; consequences of acts of war or terrorism
impacting the United Statesโ and other markets; the effects of a pandemic or epidemic or a natural disaster;
charges related to portfolio management and cost reduction actions; the success of implementing cost reduction
programs and achieving anticipated acquisition synergies; the timing, impact and other uncertainties of future
acquisitions or divestitures or unanticipated contract terminations; significant fluctuations in interest rates and
foreign currencies from that currently anticipated; the impact of tax and other legislation and regulations in
jurisdictions in which Air Products and its affiliates operate; the impact of new financial accounting standards; and
the timing and rate at which tax credits can be utilized. The company disclaims any obligation or undertaking to
disseminate any updates or revisions to any forward-looking statements contained in this presentation to reflect
any change in the companyโs assumptions, beliefs or expectations or any change in events, conditions or
circumstances upon which any such forward-looking statements are based.
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3. Air Products
At a glance
$9B in sales
Diverse markets and
geographies
Positioned for continued
long-term value creation
FY06 Geographic Sales
FY06 Segment Sales
Canada/Latin
Tonnage ROW
Merchant America (4%)
Gases (2%)
Gases (25%) Asia
(31%)
United States
(16%)
(49%)
Equipment &
Energy
Healthcare Europe
(6%)
(6%) (29%)
Electronics &
Chemicals Performance
(10%) Materials
(22%)
3
4. Value Proposition
Profitable Growth
Stability
โ Long term contracts
โ Consistent and predictable
cash flows
โ Strong balance sheet
Earnings growth
โ Volume loading
โ Pricing/margins
โ Productivity
Improving returns
4
5. A Healthy Report Card
Three consecutive years
FY04 FY05 FY06
$7.8
$7.0 $8.9
Sales ($B)โฆโฆโฆโฆโฆ
$3.50
$2.53 $2.93
EPS* ($/share)โฆโฆ.......
9.3% 10.0%
ORONA* (%) โฆโฆโฆโฆ.. 11.3%
SG&A as % of Sales*.... 12.2%
14.2% 13.5%
Balance Sheetโฆโฆโฆโฆ. โAโ rating
Dividend increase &
Shareholder Valueโฆโฆ.
share repurchase
5
* Comparison is non-GAAP. See appendix slide for GAAP reconciliation.
6. Consolidated 1H Financials:
Continued Solid Performance
1H FY06 1H FY07 Change
Sales ($B) $4.2 $4.9 16%
Diluted EPS ($/share)* $1.66 $2.05 23%
ORONA (%)** 10.6% 11.9% 130bp
SG&A as a % of Sales* 12.3% 11.8% (50bp)
* Continuing Operations
6 ** Comparisons are non-GAAP, see appendix for reconciliation
7. Tonnage Gases
Investments Drive Growth
Industrial gases via
FYโ06 Performance
large on-sites or
vs. Prior Year:
pipelines to refining,
chemical, metallurgical
Sales $2.2 billion
industries
up 28%
Growing hydrogen
franchise position; Op. Inc. $341 million
gasification and new up 39%*
oxygen technologies
Strong volumes from six
new refinery hydrogen plants
(35% capacity increase)
and base business growth
7
* Comparisons are non-GAAP
8. Equipment & Energy
LNG Drives Growth
Air sep, hydrocarbon FYโ06 Performance
recovery/purification,
vs. Prior Year:
natural gas liquefaction,
helium distribution
Sales $537 million
equipment; future up 45%
energy technologies
Op. Inc. $69 million
Oil and gas, utilities,
up significantly*
chemical, metals markets
Driven by orders for
liquefied natural gas (LNG)
heat exchangers and
air separation units
8
* Comparisons are non-GAAP
9. Merchant Gases:
Leveraging Strong Demand
Industrial gases, FYโ06 Performance
certain medical /
vs. Prior Year:
specialty gases
supplied to a variety
Sales $2.7 billion
of markets up 10%
Liquid bulk,
Op. Inc. $470 million
packaged gases,
up 18%*
small on-sites
Strong volume performance
in all regions of the world,
supported by new customer
signings and price increases
despite hurricane impacts
9
* Comparisons are non-GAAP
10. Healthcare:
Focused on Improvement
Respiratory therapies, FYโ06 Performance
home medical
vs. Prior Year:
equipment, infusion
services for patients in
Sales $571 million
their homes up 5%
Anticipate future
Op. Inc. $8 million
improvement from higher
down significantly*
U.S. volumes and lower
operating costs
Operational issues in the
U.S. and higher start-up
costs from a new U.K. home
oxygen contract
10
* Comparisons are non-GAAP
11. Electronics & Performance Materials:
A Winning Combination
Specialty / bulk gases / FYโ06 Performance
chemicals, services and
vs. Prior Year:
equipment for electronics;
performance chemical
Sales $1.9 billion
solutions for various end up 12%
markets
Op. Inc. $195 million
Surface science expertise
up 48%*
delivers performance
Strong volumes driven
by semiconductor and
flat-panel display market
demand and Tomah3
Products acquisition
11
* Comparisons are non-GAAP
12. Electronics & Performance Materials
Innovation-based business model
$2B segment under-pinned by technology, innovation
Franchise positions / global leadership in:
โ Fluorine chemistry
โ Surface chemistry
โ Managing materials in high-purity environments
โ Specialty additives for formulated products
Deep understanding of how our customers create value for
their customers
โ Silicon-based manufacturing (ICs, displays)
โ Formulated systems (coatings, foam, adhesivesโฆ)
APD technology provides context for new business
โ Critical mass of our technology investment
โ Enter into new fields with credibility, fresh view &
extensive capabilities
12
13. Performance Materials
Dimensions
A global platform with
>$700MM in sales
3 key product lines + new
initiatives platforms
~50% of sales outside of
North America
Formulated products that
drive leadership positions
Global manufacturing, R&D,
applied technology
infrastructure
13
14. Electronics
Dimensions
~$1.3 billion bulk gas, specialty material
and equipment business
Driven principally by:
โ Semiconductor (~85%)
โ LCD (~10%)
Strong volume growth:
โ 20% CAGR over last 4 years
Business trends:
โ Asia growth
โ Product simplification & controlling
the value chain
14
15. Electronics & Performance Materials:
A natural extension of what
Air Products does best
Customers
โ Long-term relationships that leverage APD global
business infrastructure
Supply Chain
โ World class network of facilities and supply positions in
critical geographies
โ Operationally excellent systems delivering the highest
quality and reliability at the lowest cost
Process
โ Engineering skills to take solutions from lab to world-
scale production
โ Acquisition integration and improvement
Applied technology
โ Knowledgeable people with deep industry understanding
who can identify, quantify and solve customer problems
15
16. Steady Progress to ORONA Goal
12.5%
ORONA Improvement
11.5%
10.5%
4 Qtr Rolling Avg
9.5%
Q1'05
Q2'05
Q3'05
Q4'05
Q1'06
Q2'06
Q3'06
Q4'06
Q1'07
Q2'07
Q3'07
Q4'07
16
* see appendix for ORONA calculation
17. Our FYโ07 Commitments
Add Photo
Achieve 12.5% ORONA
Capture profitable growth
Improve Healthcare performance
Simplify Electronics
Restructure Chemicals
Drive productivity to the
bottom line
17
18. Beyond 2007
Growth Levers
Large ($25MM+) projects on streamโฆ9 in 2008
โ 6 in Tonnage
โ 3 in Electronics
New geographies
โ Poland/Central and Eastern Europe
โ Asia
New applications/products/markets
โ Energy
โ Performance Materials
Productivity
โ Expand gross margins
โ Electronics/Healthcare/Europe business
improvement
โ Leverage SAP
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19. Beyond 2007
Sustainable Double-Digit Growth
at Superior Returns
Targeting EPS growth between 10-15%
6-7% Market growth
2-4% New geographies/applications/products
2-4% Productivity/margin expansion
10-15% Total
ROCE well above our cost of capital +3-5%
More Focused, Less Cyclical,
Higher Growth, Higher Returns
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