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  • 1. Paul Huck, SVP & CFO 2007 Citi Basic Materials Symposium New York City December 5, 2007
  • 2. Forward-Looking Statements NOTE: This presentation contains “forward-looking statements” within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management’s reasonable expectations and assumptions as of the date of this presentation regarding important risk factors. Actual performance and financial results may differ materially from projections and estimates expressed in the forward-looking statements because of many factors, including, without limitation, overall economic and business conditions different than those currently anticipated; future financial and operating performance of major customers and industries served by Air Products; the impact of competitive products and pricing; interruption in ordinary sources of supply of raw materials; the ability to recover unanticipated increased energy and raw material costs from customers; costs and outcomes of litigation or regulatory activities; consequences of acts of war or terrorism impacting the United States’ 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 new or changed tax and other legislation and regulations in jurisdictions in which Air Products and its affiliates operate; the impact of new or changed 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 company’s assumptions, beliefs or expectations or any change in events, conditions or circumstances upon which any such forward-looking statements are based. 2
  • 3. Air Products At a glance $10B in sales FY’07 Diverse markets and geographies Positioned for continued long-term value creation FY07 Geographic Sales FY07 Segment Sales ROW (2%) Tonnage Asia Merchant Gases (17%) Gases (26%) (32%) United States Equipment & (44%) Energy Healthcare (6%) (6%) Europe (32%) Electronics & Chemicals Performance (10%) (9%) Canada/Latin Materials America (5%) (21%) (22%) 3
  • 4. Value Proposition Profitable Growth Stability – Long term contracts – Consistent and predictable cash flows – Strong balance sheet Earnings growth – New projects – Margin improvement – Productivity Improving returns – Good progress – Continued opportunity 4
  • 5. Supply Modes Durable Business Models 10, 15 and 20-year contracts Take-or-pay minimum volumes Contractual energy pass-through Equipment & Formula escalation Services 19% Onsite/Pipeline 34% 3-5 year contracts Package Gases & Liquid/Bulk Regional business Specialty Materials 21% Cost pass-through/surcharges 26% % of consolidated revenues 5 (excludes Chemicals segment)
  • 6. A Healthy Report Card Four consecutive years FY07 FY04 FY05 FY06 $7.7 $10.0 $6.9 $8.8 Sales ($B)……………… EPS* ($/share)……....... $3.49 $2.52 $4.37 $2.92 ORONA* (%) ………….. 9.4% 10.0% 12.5% 11.4% ROCE* (%)…………….. 9.9% 10.5% 12.7% 11.6% SG&A / Sales (%)*…… 12.3% 14.3% 13.6% 11.8% “A” rating Balance sheet…………. Dividend increase & Shareholder value……. share repurchase 6 * Comparisons are non-GAAP. See appendix slide for GAAP reconciliation.
  • 7. Equity Affiliate Income >$100M FY07 Revenues 100% basis ~$1.6B Italy $470M India Mexico $85M Thailand $515M $80M South Africa $130M 7
  • 8. Merchant Gases Drive a Local Business on a Global Chassis $3.2 billion in FY’07 sales Liquid/Bulk, cylinder and small onsite gases to diverse industrial markets Global business model – Marketing Local Business – Application development Regional – Supply chain Global Roles/Global Differentiators Collaboration Local execution – Logistics – Sales and pricing Margin Improvement – Customer service & Growth Future opportunities – Improve margins – Eastern Europe & Asia growth 8
  • 9. Merchant Gases Strong Growth & Performance $MM $MM Operating Income & Margin Sales 700 20.0% 3500 12% CAGR 600 3000 18.0% 500 2500 16.0% 400 2000 300 1500 14.0% 200 1000 12.0% 100 500 0 10.0% 0 2004 2005 2006 2007 2004 2005 2006 2007 • Revenue by region ($, FY07) Continue delivering double-digit Europe LB growth - Explosive growth in Asia Europe PG North America - Expanding in Eastern/Central Europe Asia - New offerings success Equipment ROW • Achieve 20% operating margins 9
  • 10. Tonnage Gases Market Leader in Refinery Hydrogen H2 Plant Operating Years Global #1 HyCO Position Onstream 2007 APD . . . APD Widening Gap (1940MMscfd) Comp Z Comp X Comp Y 2000 2005 1995 APD Comp. X Comp. Y Others 4,600 Million SCFD 10
  • 11. Tonnage Gases High Growth Segment $MM $MM Operating Income & Margin Sales 450 20.0% 3000 18% CAGR 400 2500 18.0% 350 300 2000 16.0% 250 1500 200 14.0% 150 1000 100 12.0% 500 50 10.0% 0 0 2004 2005 2006 2007 2004 2005 2006 2007 • Significant profit growth and Investment by Region improvement in returns on capital North America while bringing on new investments • Significant large plant bidding opportunities (both H2 & O2) continue Europe & Middle East • Anticipate continued 10%-15% H2 Asia growth 11
  • 12. Strong Hydrogen Pipeline Positions Sarnia Canada 40 Baton Rouge 40 Edmonton, Suncor Louisiana IL RA Canada Plaquemine CN Air Products Canada 40 Geismar Shell Refinery Geismar 16 16 10 Lake ST. 16 Cosmar 16 Pontchartrain CLAIR RIVER Petro-Canada Convent Imperial Oil Nola New Orleans Taft Sherwood Corunna Park 21 21 14 14 630 630 Chalmette Rotterdam 14 14 Europoort Pernis Dominguez Southern SF Bay Channel Refineries 91 California 405 Zwijndrecht Botlek Tarragona 190th Refinery St. 710 To Moerdijk Carson H2 Long 110 VAN NESS Beach Lake Charles AVE. Arpt. Beaumont BP Sepulveda Texas Blvd Carson Mont Belvieu 405 69 APD HyCO facilities 10 Shell City of Houston Battleground Conoco Phillips 73 Wilmington H2 pipeline Carson 1 Port Arthur 10 CO pipeline Anaheim Valero Baytown 2 Street 610 Wilmington Syngas pipeline Conoco Phillips Wilmington Wilmington H2 225 110 45 LaPorte Pasadena Bayport Clear Lake Texas City 12
  • 13. Tonnage Gases Leading the Way on Gasification A leading O2 supplier to gasification facilities Designed, built, own, and operate units for syngas, H2 and CO for pipeline systems: O2 for Gasification/ ATR Customers – NG-based POX units (TPD) – Syngas cleanup/separation 25,000 facilities from POX unit 20,000 Recent wins: 15,000 – Eastman Gasifier in Texas 10,000 – Wison II in China 5,000 – BP Clean Power in 0 California APD Comp X Comp Y Comp Z 13
  • 14. Hydrogen from Eastman Gasifier Project vs. “Off-Gas” Facilities Typical “Off-Gas” Facility Ethylene, etc Raw Chemical Materials Hydrogen plant H2 purification ~ 85% - 95% O/S Eastman facility APD O2 Spare Hydrogen to #3 Pet Coke Air Products >99% O/S #2 Methanol Gasifier Syngas #1 Ammonia 14
  • 15. Equipment and Energy Positioned for continued growth $.6 billion in FY’07 sales Broad customer base – Oil & gas, utilities, chemicals and metals Products – LNG heat exchangers, large air separation units, hydrocarbon separators, helium containers, hydrogen fueling systems… Strategy – Leverage existing relationships – Develop energy projects – Leverage engineering technology and products to grow gases businesses 15
  • 16. LNG Heat Exchangers Market Leadership US Natural Gas Gap APD world leader in LNG equipment technology Consumption Sustainable competitive 25% advantage with AP-X® Net Imports BCFD technology 15% Production US import terminals – 6 constructed; 7 bcfd US NG Imports 2006 & 2020 – 22 approved; 37 bcfd – 27 proposed; 25 bcfd Anticipate 2-3 LNG orders BCFD per year over next 5 years 2020 2006 16
  • 17. Electronics & Performance Materials: A natural extension of what Air Products does best $2.1B segment underpinned by technology, innovation Franchise positions / global leadership Strategic positions with leading customers Operationally excellent global supply chain Leading edge applied technology, new products 17
  • 18. Electronics & Performance Materials Strong Performance $MM $MM Operating Income & Margin Sales 250 15.0% 2500 10% CAGR 200 12.0% 2000 150 9.0% 1500 100 6.0% 1000 50 3.0% 500 0 0.0% 0 2004 2005 2006 2007E 2004 2005 2006 2007E • Excellent profit and return Revenue by region ($, FY07F) improvement driven largely by Asia Electronics turn around (40%) • Continue delivering double-digit North America (40%) growth Latin America • Achieve 15% operating margins (2%) Europe (18%) 18
  • 19. Fiscal Year 2007: Fourth Year of Double-Digit Growth Continuing Operations * Growth vs. PY $∆ %∆ FY06 FY07 ($Millions) Sales $8,753 $10,038 $1,285 15% Operating Income 1,128 1,390 262 23% Net Income 792 976 184 23% EPS ($/share) 3.49 4.37 0.88 25% ORONA (%) 11.4% 12.5% 110bp $567 million in shares repurchased Additional $1B authorization announced Continued to improve the portfolio 19 * Comparison is non-GAAP, see appendix for reconciliation
  • 20. Margin Improvement Focus 17% 14% 2010 2007 300 basis point operating margin improvement from … Cost Plant Improved reduction efficiency mix 200bp 50bp 50bp 20
  • 21. 2008 and Beyond Sustainable Double-Digit Growth at Superior Returns Targeting EPS growth between 10-15% 11 large ($25MM+) projects on stream in ‘08 New geographies New applications/products/markets Cost reduction/productivity ROCE well above our cost of capital +3-5% More Focused, Less Cyclical, Higher Growth, Higher Returns 21
  • 22. Thank you tell me more www.airproducts.com 22
  • 23. Appendix: Non-GAAP Reconciliation 23
  • 24. Appendix: FY2008 Guidance Full Year % FY07 FY08 Guidance Change ($/share) Diluted EPS - Continuing Operations GAAP $4.67 $4.80-$5.00 3%-7% Adjustments (1) ($0.30) Non GAAP $4.37 $4.80-$5.00 10%-14% (1) See previous appendix for listing of adjustments 24
  • 25. Appendix: FY2007 – Q4 vs. Q3 Fav / (Unfav) FY2007 Q4 FY2007 Q3 FY2007 - Q4 vs Q3 Operating Income from EPS Operating Income from EPS Operating Income from EPS Income Cont. Ops Cont. Ops Income Cont. Ops Cont. Ops Income Cont. Ops Cont. Ops GAAP Measure $389.1 $301.7 $1.35 $363.9 $284.5 $1.28 7% 6% 5% Gain on contract termination ($36.8) ($23.6) ($0.11) Supp. pension plan charge $10.3 $6.4 $0.03 Global cost reduction plan $13.7 $8.8 $0.04 Donation/sale of cost investment ($5.0) ($19.8) ($0.09) Tax adjustments ($11.3) ($0.05) Tax audit resolution ($27.5) ($0.12) Non GAAP Measure $371.3 $262.2 $1.17 $363.9 $257.0 $1.16 2% 2% 1% 25
  • 26. Appendix: ORONA Non-GAAP Reconciliation $ Millions Quarter Ended Dec-04 Mar-05 Jun-05 Sep 05 Dec-05 Mar-06 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 Operating Income Op. Inc. Reported 235.9 238.8 256.8 259.3 253.2 280.3 290.8 231.3 331.2 323.5 363.9 389.1 Proforma Option Expense (11.0) (10.9) (11.1) (14.9) - - - - - - - - Op. Inc. Reported with Option Exp all periods 224.9 227.9 245.7 244.4 253.2 280.3 290.8 231.3 331.2 323.5 363.9 389.1 Disclosed Items: Global Cost Reduction Plan - - - - - - - 72.1 - - - 13.7 Pension Settlement charge 10.3 Gain on contract termination - - - - - - - - - - - (36.8) Donation/sale of cost investment - - - - - - - - - - - (5.0) Op Inc incl Option Expense, ex items 224.9 227.9 245.7 244.4 253.2 280.3 290.8 303.4 331.2 323.5 363.9 371.3 Assets Total Assets 10,653.4 10,707.3 10,309.8 10,408.8 10,624.9 11,032.5 11,290.8 11,180.7 11,500.0 11,878.0 12,568.8 12,668.9 Less Investment in Equity Affiliate 672.1 672.8 661.3 663.7 679.4 718.2 736.4 728.3 765.6 796.2 817.9 855.4 Less Current Assets Disc Ops 141.8 142.9 137.4 136.8 134.6 136.1 116.8 32.2 31.5 30.0 28.5 28.5 Less Non-Current Assets Disc Ops 208.9 205.9 204.6 194.1 189.3 185.8 182.6 56.6 54.4 54.3 55.5 39.8 Net Assets from Cont Ops 9,630.6 9,685.7 9,306.5 9,414.2 9,621.6 9,992.4 10,255.0 10,363.6 10,648.5 10,997.5 11,666.9 11,745.2 ORONA with Option Expense in all periods - reported 4 Qtr Trailing Op Income 971.2 1,023.6 1,068.7 1,055.6 1,133.6 1,176.8 1,249.9 1,407.7 5 Qtr Avg Net Assets from Cont Ops 9,531.7 9,604.1 9,717.9 9,929.4 10,176.2 10,451.4 10,786.3 11,084.3 ORONA with Option Expense in all periods - reported 10.2% 10.7% 11.0% 10.6% 11.1% 11.3% 11.6% 12.7% ORONA for the Quarter (Op inc x 4 / 2 pt avg net assets) 10.6% 11.4% 11.5% 9.0% 12.6% 12.0% 12.8% 13.3% ORONA with Option Expense in all periods - ex items 4 Qtr Trailing Op Income 971.2 1,023.6 1,068.7 1,127.7 1,205.7 1,248.9 1,322.0 1,389.9 5 Qtr Avg Net Assets from Cont Ops 9,531.7 9,604.1 9,717.9 9,929.4 10,176.2 10,451.4 10,786.3 11,084.3 ORONA w/ Option Exp all periods - ex items 10.2% 10.7% 11.0% 11.4% 11.8% 11.9% 12.3% 12.5% ORONA for the Quarter (Op inc x 4 / 2 pt avg net assets) 10.6% 11.4% 11.5% 11.8% 12.6% 12.0% 12.8% 12.7% 26
  • 27. Appendix: ROCE Non-GAAP Reconciliation $ Millions Quarter Ended Dec-04 Mar-05 Jun-05 Sep 05 Dec-05 Mar-06 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 Numerator Operating Income Reported 235.9 238.8 256.8 259.3 253.2 280.3 290.8 231.3 331.2 323.5 363.9 389.1 Proforma Option Expense (11.0) (10.9) (11.1) (14.9) Equity Affiliate Income 25.5 25.2 26.3 28.4 27.8 24.3 25.9 29.7 30.1 32.4 35.5 33.8 Earnings before tax before items 250.4 253.1 272.0 272.8 281.0 304.6 316.7 261.0 361.3 355.9 399.4 422.9 Global Cost Reduction Plan 0.0 0.0 0.0 0.0 0.0 0.0 0.0 72.1 0.0 0.0 0.0 13.7 Gain on Contract Termination 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 (36.8) Pension Settlement Charge 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 10.3 Donation/Sale of Cost Investment 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 (5.0) Earnings before tax ex items 250.4 253.1 272.0 272.8 281.0 304.6 316.7 333.1 361.3 355.9 399.4 405.1 Effective tax rate before items 29.3% 28.7% 26.1% 29.2% 27.0% 27.5% 26.7% 24.6% 26.9% 27.0% 18.0% 18.9% Earnings after tax before items 177.0 180.5 201.0 193.1 205.1 220.8 232.1 196.8 264.1 259.8 327.5 343.0 Effective tax rate ex items 29.3% 28.7% 26.1% 29.2% 27.0% 27.5% 26.7% 27.2% 26.9% 27.0% 25.9% 26.0% Earnings after tax ex items 177.0 180.5 201.0 193.1 205.1 220.8 232.1 242.5 264.1 259.8 296.0 299.8 4 Qtr Trailing Earnings after tax (numerator) - before items 779.7 820.0 851.1 854.8 913.8 952.8 1,048.2 1,194.4 4 Qtr Trailing Earnings after tax (numerator) - ex items 779.7 820.0 851.1 900.5 959.5 998.5 1,062.4 1,119.7 Denominator Total Debt 2,559.0 2,505.3 2,508.7 2,493.7 2,601.9 2,796.6 2,973.3 2,849.8 3,150.2 3,313.9 3,778.9 3,677.2 Equity 4,740.8 4,910.1 4,614.9 4,545.5 4,708.8 4,967.7 5,046.6 4,924.0 5,111.5 5,276.5 5,456.3 5,504.0 Minority Interest 183.8 186.1 179.1 181.1 180.5 191.7 171.2 178.0 188.8 178.4 176.0 177.3 Total Capital 7,483.6 7,601.5 7,302.7 7,220.3 7,491.2 7,956.0 8,191.1 7,951.8 8,450.5 8,768.8 9,411.2 9,358.5 5 Qtr Average Capital (denominator) 7,419.9 7,514.3 7,632.3 7,762.1 8,008.1 8,263.6 8,554.7 8,788.2 ROCE before items 10.5% 10.9% 11.2% 11.0% 11.4% 11.5% 12.3% 13.6% ROCE before items for the Quarter (earnings after tax x 4 / 2 pt avg capital) 11.2% 11.4% 11.5% 9.8% 12.9% 12.1% 14.4% 14.6% ROCE ex items 10.5% 10.9% 11.2% 11.6% 12.0% 12.1% 12.4% 12.7% ROCE ex items for the Quarter (earnings after tax x 4 / 2 pt avg capital) 11.2% 11.4% 11.5% 12.0% 12.9% 12.1% 13.0% 12.8% 27
  • 28. Appendix: ROCE Tax Rate Reconciliation Q105 Q205 Q305 Q405 Q106 Q206 Q306 Q406 Q107 Q207 Q307 Q407 Reported Income from Cont. Ops. Before Tax and Min. Int 233.5 234.3 257.2 261.2 254.7 279.3 287.3 222.7 322.2 318.1 355.2 380.8 Minority Interest (4.3) (4.5) (8.3) (5.6) (6.1) (10.2) (6.4) (7.1) (7.9) (7.4) (8.3) (8.8) Income from Cont. Ops. Before Tax 229.2 229.8 248.9 255.6 248.6 269.1 280.9 215.6 314.3 310.7 346.9 372.0 Proforma Option Expense (11.0) (10.9) (11.1) (14.9) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Income from Cont. Ops. Before Tax w/ Option Exp. 218.2 218.9 237.8 240.7 248.6 269.1 280.9 215.6 314.3 310.7 346.9 372.0 Tax Expense 63.9 62.8 62.0 70.2 67.0 74.0 75.1 53.0 84.7 83.8 62.4 70.3 Tax Rate Reported 29.3% 28.7% 26.1% 29.2% 27.0% 27.5% 26.7% 24.6% 26.9% 27.0% 18.0% 18.9% ITEMS Operating Income Global Cost Reduction Plan 72.1 13.7 Gain on Contract Termination (36.8) Supp. Pension Plan Charge 10.3 Donation/Sale of Cost Investment (5.0) Tax Exp Tax Audit Settlement 27.5 Global Cost Reduction Plan 25.3 4.9 Gain on Contract Termination (13.2) Supp. Pension Plan Charge 3.9 Donation/Sale of Cost Investment 14.8 Tax adjustments 11.3 Ex Items Income from Cont. Ops. Before Tax w/ Option Exp. 218.2 218.9 237.8 240.7 248.6 269.1 280.9 287.7 314.3 310.7 346.9 354.2 Tax Expense 63.9 62.8 62.0 70.2 67.0 74.0 75.1 78.3 84.7 83.8 89.9 92.0 Tax Rate ex Items 29.3% 28.7% 26.1% 29.2% 27.0% 27.5% 26.7% 27.2% 26.9% 27.0% 25.9% 26.0% 28