EX-99.(A)(6) 7 dex99a6.htm UPDATED PRESENTATION Updated Presentation
Our Rejection of Air Products’
Our Rejection of Air Products’
Proposals
Proposals
(Updated)
(Updated)
February 22, 2010    
February 22, 2010    
Exhibit (a)(6)


1
1
This presentation contains statements that are forward looking, as that term is defined by the Private Securities Litigation
Reform Act of 1995, as amended, or by the SEC in its rules, regulations and releases. These statements include, but are not
limited to: our having strong prospects for organic and acquisition growth in the coming years; the economy just beginning its
recovery;
the
view
that
under
the
terms
of
Air
Products’
proposal,
our
stockholders
would
sacrifice
real
value
and
opportunity;
our
belief
that
a
combination
of
our
two
companies
could
destroy
rather
than
create
value;
and
our
prospects
for
continued
growth and stockholder value creation. We intend that such forward-looking statements be subject to the safe harbors created
thereby. All forward-looking statements are based on current expectations regarding important risk factors and should not be
regarded as a representation by us or any other person that the results expressed therein will be achieved. Airgas assumes no
obligation to revise or update any forward-looking statements for any reason, except as required by law. Important factors that
could cause actual results to differ materially from those contained in any forward-looking statement include: adverse changes
in
customer
buying
patterns
resulting
from
further
deterioration
in
current
economic
conditions;
weakening
in
the
operating
and
financial performance of our customers, which can negatively impact our sales and ability to collect our accounts receivable;
postponement of projects due to the recession; customer acceptance of price increases; the success of implementing and
continuing our cost reduction programs; supply cost pressures; increased industry competition; our ability to successfully
identify,
consummate,
and
integrate
acquisitions;
our
ability
to
achieve
acquisition
synergies;
our
continued
ability
to
access
credit markets on satisfactory terms; significant fluctuations in interest rates; increases in energy costs and other operating
expenses eroding planned cost savings; higher than expected implementation costs of the SAP system; conversion problems
related to the SAP system that disrupt our business and negatively impact customer relationships; the impact of tightened
credit markets on our customers; the impact of changes in tax and fiscal policies and laws; the potential for increased
expenditures relating to compliance with environmental regulatory initiatives; the impact of new environmental, healthcare, tax,
accounting, and other regulation; continued potential liability under the Multiemployer Pension Plan Amendments Act of 1980
with respect to our participation in or withdrawal from multi-employer pension plans for our union employees; the extent and
duration
of
current
recessionary
trends
in
the
U.S.
economy;
the
effect
of
catastrophic
events;
political
and
economic
uncertainties
associated
with
current
world
events;
and
other
factors
described
in
Airgas’
reports,
including
its
March
31,
2009
Form 10-K, subsequent Forms 10-Q, and other documents filed by Airgas with the SEC.
Forward-Looking Statements
Forward-Looking Statements
1
1


2
2
2
2
ADDITIONAL INFORMATION
This communication does not constitute an offer to buy or solicitation of an offer to sell any securities.  In response to the
tender offer commenced by Air Products Distribution, Inc., a wholly owned subsidiary of Air Products and Chemicals, Inc.,
Airgas has filed a solicitation/recommendation statement on Schedule 14D-9 with the U.S. Securities and Exchange
Commission (“SEC”). INVESTORS AND SECURITY HOLDERS OF AIRGAS ARE URGED TO READ THESE AND OTHER
DOCUMENTS
FILED
WITH
THE
SEC
CAREFULLY
IN
THEIR
ENTIRETY
BECAUSE
THEY
CONTAIN
IMPORTANT
INFORMATION.  Investors and security holders may obtain free copies of these documents and other documents filed with the
SEC by Airgas through the web site maintained by the SEC at http://www.sec.gov
In addition, Airgas may file a proxy statement with the SEC.  Any definitive proxy statement will be mailed to stockholders of
Airgas.  INVESTORS AND SECURITY HOLDERS OF AIRGAS ARE URGED TO READ THESE AND OTHER DOCUMENTS
FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION.  Investors and security holders will be able to obtain free copies of these documents
(if and when available) and other documents filed with the SEC by Airgas through the web site maintained by the SEC at
http://www.sec.gov.
CERTAIN INFORMATION REGARDING PARTICIPANTS
Airgas and certain of its respective directors and executive officers may be deemed to be participants under the rules of the
SEC.
Security
holders
may
obtain
information
regarding
the
names,
affiliations
and
interests
of
Airgas’
directors
and
executive
officers in Airgas’
Annual Report on Form 10-K for the year ended March 31, 2009, which was filed with the SEC on June 1,
2009,
and
its
proxy
statement
for
the
2009
Annual
Meeting,
which
was
filed
with
the
SEC
on
July
13,
2009.
These
documents
can
be
obtained
free
of
charge
from
the
sources
indicated
above.
Additional
information
regarding
the
interests
of
these
participants in any proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will
also be included in any proxy statement and other relevant materials to be filed with the SEC if and when they become
available.


Why We Rejected Air Products’
Why We Rejected Air Products’
Proposals
Proposals


4
4
Why Airgas’
Why Airgas’
Board Has Rejected Air
Board Has Rejected Air
Products’
Products’
Proposals
Proposals
Air Products’
proposals:
Grossly undervalue Airgas
Do not reflect value of Airgas’
industry-leading position, unrivaled platform, and
substantial recent investments
Attempt to exploit a temporary valuation anomaly
Do
not
reflect
Airgas’
significant
opportunities
in
economic
recovery
Airgas’
standalone
value
proposition
is
superior
to
Air
Products’
proposals
Track record of double-digit growth
11% Revenue CAGR
17% EBITDA* CAGR
20% Diluted EPS CAGR
21% Cashflow
from Operations* CAGR
Outstanding share price performance
4,201% total shareholder return since IPO
85% total shareholder return in past 5 years
4
4
Note: CAGR (Compound Annual Growth Rate) calculated over 2001-2009 period and based on company filings calendarized to December year end. Total shareholder return as of
February 4, 2010 
*See attached reconciliation of non-GAAP measures


5
5
Airgas’
Airgas’
Investment Highlights
Investment Highlights
The premier packaged gases company with leading market position in a
consolidating industry
Management and Board’s 11.8% equity ownership strongly aligns our interests
with shareholders
Organic growth in excess of end-market demand through leveraging existing
infrastructure
Unmatched product and service offerings serving customer base diversified
across industries
Poised to capitalize on substantial infrastructure investment and industry
consolidation achieved over the last decade
Significant value still to be realized from efficiency programs and continued
development of our “operating culture”
Resilient financial performance and significant leverage to expected economic
recovery
Strong cash flow drives shareholder value creation
5
5


6
6
6
6
6
6
Background to Air Products’
Background to Air Products’
Proposals
Proposals
October
15,
2009:
Air
Products
CEO
made
an
unsolicited
verbal
proposal
to
Airgas CEO to acquire Airgas for $60 per share on an all-stock basis
November
20,
2009:
Air
Products’
CEO
sent
a
letter
to
Airgas’
CEO
making
an
unsolicited proposal to acquire Airgas for $60 per share on an all-stock basis
December
17,
2009:
Air
Products’
CEO
sent
a
letter
to
Airgas’
CEO
with
an
unsolicited proposal to acquire Airgas for $62 per share including up to 50%
cash consideration
February
4,
2010:
Air
Products
CEO
sent
a
letter
to
Airgas
CEO
with
an
unsolicited proposal to acquire Airgas for a reduced
price of $60 per share on
an all-cash basis
February
11,
2010:
Air
Products
commenced
tender
offer
at
the
same
$60
price per share
Source:  Airgas Schedule 14D-9 dated February 22, 2010
Airgas’
Board of Directors Has Unanimously Rejected Each of
Air Products’
Proposals Because They Significantly Undervalue
Airgas and its Future Prospects


Airgas –
Airgas –
Creating Shareholder Value
Creating Shareholder Value


8
8
8
8
We Are Highly Confident
We Are Highly Confident
in Our Mid-Term Financial Goals
in Our Mid-Term Financial Goals
TTM
9/30/09
Sales
$4B
Operating
Margin
11.5%
ROC*
10.8%
Acquired Sales CAGR ~3%
SSS CAGR ~5%-7%
Cost Savings Initiatives       
~60-80 bps
Op. Leverage on Sales Growth
~100-150 bps
Assumptions
Revenue Growth
Op. Margin Expansion
Capex
5-6% of sales
Additional Assumptions
Core products CAGR 3-5%; Strategic Products CAGR 7-9%
$150M in sales acquired annually
Non-Tech IP avg
annual growth rate 2-3%
* See non-GAAP reconciliations attached.
Note: “CAGR”
= Compound Annual Growth Rate
FY13-14
Goals
Sales
$5.5B+
Operating
Margin
13%-14%
ROC*
14.5%-15.5%


9
9
Calendar 2012 View of Mid-Term Goals
Calendar 2012 View of Mid-Term Goals
SSS CAGR ~7%
Core products CAGR 3-5%;
Strategic Products CAGR 7-9%
Non-Tech IP CAGR 2-3%
Acquired Sales CAGR ~3%
Operating Efficiency Programs ~60 bps
Non-dependent on economy
Specific Programs Identified
Op. Leverage on Sales Growth ~50 bps
Assumptions
* See attached non-GAAP reconciliations for EBITDA and CY2009 Adjusted EPS.
NOTE: “CAGR”
= Compound Annual Growth Rate
Revenue Growth
Operating / EBITDA Margin Expansion
Strong Cash Flow / Debt Pay Down
CY2009
CY2008
Sales
$3.9B
EBITDA
Margin*
17.3%
EPS*
$2.67
Sales
$4.4B
EBITDA
Margin*
17.0%
EPS
$3.19
Earnings and cash flow drive 20% CAGR
Dividends
Per Share
$0.70
Dividends
Per Share
$0.52
CY2012
CY2012
2
Sales
Sales
$5.2B+
$5.2B+
EBITDA
EBITDA
Margin*
Margin*
18%-18.5%
18%-18.5%
EPS
EPS
$4.20+
$4.20+
Dividends
Dividends
Per Share
Per Share
$1.20
$1.20
Growth
Accelerators
and
further
leverage
of
infrastructure
and
broad
product
&
service
offerings
drive above market growth and provide further upside for Sales and Earnings
Cost
reductions
and
operating
efficiencies
of
~$70
million
since
Dec
2008
Strong momentum into Dec-08 prior to 2009 recession
Significant leverage to economic recovery


10
10
Consistently Strong Performance
Consistently Strong Performance
Against Mid-Term Financial Goals
Against Mid-Term Financial Goals
10
10
* Results exclude unusual items. See attached non-GAAP reconciliations.
Performing well toward FY11 Goals prior to 2009 recession
Highly confident in our mid-term goals


Airgas Fiscal Year EPS Results vs.
Airgas Fiscal Year EPS Results vs.
Guidance & Consensus
Guidance & Consensus
11
11
____________________
Consensus
Estimates
Source:
FactSet
as
of
February
12,
2010.
Initial FY EPS ARG Guidance vs. FY EPS Results
Fiscal Year
Initial Guidance Date
Guidance Range
EPS* Results
FY06
May-05
$1.43 -
$1.50
$1.54
FY07
May-06
$1.76 -
$1.84
$2.00
FY08
May-07
$2.33 -
$2.41
$2.68
FY09
May-08
$3.24 -
$3.40
$3.12
FY10
May-09
$2.60 -
$2.90
$2.66 -
$2.70**
* See attached non-GAAP reconciliations.
** Range based on 4Q10 guidance provided on 1/28/10.
Performance consistently at or above Street expectations


12
12
Delivering Superior Growth to Shareholders
Delivering Superior Growth to Shareholders
12
12
Revenue
2001-2009 CAGR
EBITDA (b)
2001-2009 CAGR
EBITDA –
Capex (a)
2001-2009 CAGR
Note: “CAGR”
= Compound Annual Growth Rate
Note: Financial data based on calendar year end. See attached reconciliations for non-GAAP measures
(a)
Capex net of  proceeds from sales of plant and equipment
(b)
Airgas figures exclude loss due to debt extinguishment and multi-employer pension withdrawal charges
(c)
Diluted EPS reflects earnings per diluted share before the cumulative effect of change in accounting principle
Diluted EPS (c)
2001-2009 CAGR
11
%
15
%
17
%
20
%
Revenue
EBITDA - Capex
EBITDA
Diluted EPS


13
13
Delivering Superior Value to Shareholders
Delivering Superior Value to Shareholders
13
13
Absolute Total Shareholder Return
Since Airgas’
IPO (a)
4,201%
Total Shareholder Return CAGR
Since Airgas’
IPO (a)
18%
Total Shareholder Return Since January 1,
1987 Ranking in S&P 500 (b)
#26 highest out of 500
Officer and Director Stock Beneficial Ownership
11.8%
Officer and Director Stock Beneficial Ownership
Ranking in S&P 500
#29 highest out of 500
Note: Market data as of February 4, 2010
(a)
Split-adjusted,
since
Airgas’
IPO
in
1986.
Total
Shareholder
Return
calculated
as
share
price
plus
dividends
reinvested.
(b)
Excludes current S&P 500 constituents which were not public at January 1, 1987.


Airgas’
Airgas’
Growth Strategy
Growth Strategy


15
15
Airgas is the Premier U.S. Packaged
Airgas is the Premier U.S. Packaged
Gas Company
Gas Company
15
15


16
16
16
16
Unparalleled Distribution Platform
Unparalleled Distribution Platform
1,100+
Locations
850+
retail
stores
325+
HP
fill
plants
16 ASU’s
19 acetylene plants
7 liquid CO
2
production plants
65+
regional
spec
gas
labs
9 national spec gas labs
6 hardgoods
distribution centers
14,000+
Associates
~1,500 sales people
(25% specialists)
5,000+
drivers
10M+
Cylinders
13,000+
Bulk
Tanks
5,000+
Vehicles
Branch Location
/ Retail Store /
Other
Air Separation
Unit (“ASU”)
Hardgoods
Distribution
Center


17
17
Leader in Our Product and Service Offerings
Leader in Our Product and Service Offerings
17
17
Undisputed leader of the U.S. packaged gas market
Leading position in U.S. packaged industrial,
medical, and specialty gas market
Significant position in U.S. bulk market
Leading platform for U.S. refrigerants, ammonia,
and process chemicals
A leading producer of various gases
Fifth largest U.S. producer of atmospheric gases
Leading
U.S.
supplier
of
liquid
CO
2
and
dry
ice
Largest U.S. producer of nitrous oxide
Leading supplier of hardgoods
in U.S.
Welding, safety and related MRO supplies
Red-D-Arc
®
rental welders
National platform supports multiple sales channels:
Branch-based field sales
Retail stores
Strategic Accounts
Distributors
Telesales
Catalog
eBusiness


18
18
Growth Accelerators
Growth Accelerators
Growth
"Accelerators"
Projected
to
Add
3
-4%
to
Base
Top-line
Growth,
and
Result
in
Significant
Earnings
Growth
Due
to
Airgas’
Operating
Leverage


19
19
Broad Product and Service Offerings
Broad Product and Service Offerings
Delivered to Diversified Customer Segments
Delivered to Diversified Customer Segments
19
19


20
20
20
20
Bulk Gas
Bulk Gas
Medical Sales
Medical Sales
Safety Products
Safety Products
CO
CO
2
2
/Dry Ice
/Dry Ice
3Q10: Broad-based sequential increase in customer activity;
continued strong existing customer penetration
Long-term: Strong cross-sell, customer base under-penetrated
3Q10: Sequential improvement in industrial mfg, including steel,
auto, and alt. energy; continued strength in food-freezing
Long-term: Application growth, engineering solutions, sales force
presence in the field
3Q10: Slowing in elective and non-critical procedures more than
offset by new customer signings
Long-term: Population demographics for respiratory therapy, full
range of supply modes, strong cross-sell
3Q10: Difficult YoY
comps due to prior year surcharges;
sequential decline due to seasonality of business
Long-term: Food product applications, beverage market
Specialty Gas
Specialty Gas
3Q10: Slowing in chemical processing industries YoY; demand for
core spec gases, including EPA protocols, improving sequentially
Long-term: Application growth, environmental regulations,
enhanced capabilities
-14%
5%
-4%
8%
8%
3-Year
CAGR
3Q10
3Q10
Organic
Organic
Growth
Growth
Strategic Products represent ~40% of total sales
and have strong growth profiles due to:
Favorable customer segments
Application development
Increasing environmental regulation
Strong cross-sell
Quarterly Sales Commentary / Long-Term Growth Accelerators
Strategic Products
Strategic Products
Strategic Products Drive Above-Market
Strategic Products Drive Above-Market
Growth
Growth
6%
6%
3-Year
CAGR
3Q10
3Q10
Organic
Organic
Growth
Growth
-5%
12%
12%
-5%
8%
8%
2%
2%
9%
9%
-7%
6%
6%
-5%
1%
1%
2%
2%
3Q10
3Q10
Seq. DSR
Seq. DSR
Growth
Growth
3%
3%
5%
5%
3%
3%
4%
4%
-7%
3Q10
3Q10
Seq. DSR
Seq. DSR
Growth
Growth
Total Same-Store Sales
Total Strategic Products
Total Strategic Products
Note: “CAGR”
= Compound Annual Growth Rate


21
21
Fragmented and Still Consolidating Industry
Fragmented and Still Consolidating Industry
21
21
Core U.S. packaged gas and
welding hardgoods
business,
highly fragmented, more than
900 packaged gas distributors
Independent distributors account
for about 50%, half of which is
comprised of the largest 100
independents
100 largest average              
$30M annual revenue
Balance averages                 
$4.5M annual revenue
Local, service-intensive
business, compete in geographic
radius
of
about
50
75
miles
Note: Above data based on Management estimates
Airgas is strategically positioned as the preferred acquirer


22
22
Acquisitions have helped drive growth and expand our
product offering
Proven ability to buy and build
22
22
Growth Through Acquisition Integration
Growth Through Acquisition Integration
22
22
Business Unit
Sales Acquired
Date
Performance Today
Airgas Safety
$169M
’96/’97
$450M+
profitable
platform
w/
double-digit
growth
Red-D-Arc
®
Welderentals
$15M
’96
$120M+
revenue
w/
above
average
profitability
Airgas Puritan Medical
$70M
’00
$300M+
revenue
w/
product
&
platform
expansions
Ammonia
$65M
’06
$100M+
revenue
as
part
of
Airgas
Specialty
Products
Airgas Merchant Gases
$176M
’07
Significant enhancement to existing bulk
capabilities;
$400M+
revenue
;
more
than
doubled
bulk gas business upon integration


23
23
23
23
23
23
* See attached non-GAAP reconciliations.
1Q09
2Q09
3Q09
4Q09
1Q10
2Q10
3Q10
Sales
$1,117M
$1,162M
$1,079M
$992M
$979M
$962M
$942M
Sales/Day
$17.5M
$18.2M
$17.4M
$15.7M
$15.3M
$15.0M
$15.2M
Seq. Chg.
3%
4%
-4%
-10%
-3%
-2%
+1%
SSS
7%
8%
1%
-13%
-17%
-19%
-14%
EBITDA*
$189M
$200M
$186M
$172M
$165M
$170M
$165M
EBITDA
Margin*
16.9%
17.2%
17.2%
17.4%
16.8%
17.7%
17.5%
Adj. EPS*
$0.81
$0.86
$0.76
$0.68
$0.66
$0.68
$0.65
FCF*
$58M
$54M
$59M
$157M
$119M
$105M
$66M
Profitability preserved in extraordinarily difficult economic environment
Stable cylinder and cryogenic tank rental revenue
Quick, effective expense reduction
Strategic Accounts / Products outperformed core industrial business
3Q10 –
first sequential improvement in daily sales since 2Q09
Durable Business Model
Durable Business Model
Across Economic Cycles
Across Economic Cycles


24
24
24
24
Cost Savings Programs
Cost Savings Programs
Drive Margin Improvement
Drive Margin Improvement
Established goal of $25M annual run-rate operating efficiencies by
September 2010
Have achieved over $25M savings
Routing logistics
$7M+
Cylinder testing
$6M+
Freight
$5M+
Plant studies
$3M+
Fuel
$2M+
Indirect spend
$2M
At December 2009 Analyst Meeting, announced new savings target of
$40M over next 4 years
Logistics, plant studies and cylinder testing will drive savings
Approximately $10M each year


$446M
$66M
25
25
25
25
* See
non-GAAP
reconciliations
attached.
NOTE: “CAGR”
= Compound Annual Growth Rate
Strong Cash Flow
Strong Cash Flow
Drives Shareholder Value Creation
Drives Shareholder Value Creation
Strong Cash Flow from Operations*
Funds growth / maint. capex
Returns cash to stockholders through
Funds acquisitions
dividends and share repurchases
Accelerates debt paydown


26
26
26
26
Significant Upside Remains for Airgas
Significant Upside Remains for Airgas
Shareholders
Shareholders
Acquisition opportunities still abundant in a highly-fragmented industry –
considerable leverage to our premier distribution infrastructure
Sales & marketing alignment by customer segment only recently expanded to
all target segments –
tremendous leverage to fast-growing Strategic Accounts
program
Transition to customer-centric operating culture will enhance cross-sell
opportunities for an already compelling product and service offering
Strategic Products growth will outperform the core business during the
economic recovery
SAP platform to unlock significant yet-to-be-quantified incremental benefits –
provide upside to our mid-term financial targets
Agility
to
identify
and
quickly
integrate
adjacencies
opportunities
for
additional
adjacencies
Growth in adjacencies like refrigerants and diesel exhaust fluid
will accelerate
under tighter regulatory standards in the next several years


Why Air Products’
Why Air Products’
Proposals Are
Proposals Are
Opportunistic
Opportunistic


28
28
28
28
Market Perspectives on Air Products’
Market Perspectives on Air Products’
Opportunistic Proposal
Opportunistic Proposal
“I’m concerned about integration risk…When you have a company acquiring a business that
it’s not intimately familiar with sometimes they don’t wind up with the results that they think
they
will…I’m
not
seeing
the
global
synergies
that
[Air
Products
has]
talked
about.”
John Rogers, Moody’s Investor Service, 18 February 2010
“Air Products’
bid to acquire Airgas is a take-under.”
Mark Gulley, Soleil Securities, 5 February 2010
“While $60 is a 38% premium, ARG’s
stock was already there less than 18-months ago."
Edward Yang, Oppenheimer, 5 February 2010
“FY11
earnings
estimates
do
not
likely
fully
reflect
ARG's
earnings
power.”
Michael Sison, KeyBanc, 5 February 2010
“The move is a bit surprising to us, since Air Products got out of the packaged gases
business
several
years
ago
by
selling
its
business
to
Airgas
...
our
concern
is
why
did
Air
Products
sell
the
business
in
the
first
place,
only
to
reacquire
it
later?”
P.J. Juvekar, Citi, 5 February 2010
Permission to use quotations neither sought nor obtained.


29
29
29
29
Air Products Highlights Some of the
Air Products Highlights Some of the
Compelling Elements of Airgas’
Compelling Elements of Airgas’
Business
Business
Air
Products
CEO
John
McGlade
at
Barclays
Capital
Industrial
Select
Conference
on
Feb.
17,
2010:
“…given some of the market sectors or the industry sectors that Airgas is involved in,
this gives us a really good opportunity for Air Products in the United States to access some
of
the
industry
sectors
that
you
have
here
fabrication,
construction,
pharmaceuticals,
etc…in many cases, these industries buy proportionally more packaged gases than
they
do
liquid
bulk.
So
largely
not
really
available
to
Air
Products
in
the
U.S. market
these
are
good
industries,
and
typically,
if
you
look
at
most
of
these,
they
aren’t
cyclical
in
the
nature
of
some
industrial
cycle.
In
fact,
in
many
cases
really
follow
more
of
a
population
type
of
cycle
in
the
food,
the
medical,
pharmaceuticals,
etc.”
“…the North American market still represents 28% of the worlds growth over the
next five years. It’s a very attractive market.
“…ability in this space to continue to do roll-up acquisitions in the packaged gas
space
and
some
of
the
cross-selling
opportunities
and
the
industry
sector
opportunities…”
[Air Products was] impacted by the global recession just like every company was impacted
in the global recession.”
Permission to use quotations neither sought nor obtained.


30
30
30
30
Air Products Admits
Air Products Admits
its Proposals Are Opportunistic
its Proposals Are Opportunistic
“Timing is excellent”
Air Products investor presentation, 5 February 2010
“We believe the timing of the combination is ideal.  The
economy is just beginning to emerge from recession”
John McGlade, Air Products Chairman, President and CEO, Air Products press
release, 5 February 2010
“We said how much can we give to the Airgas shareholders
and still have this be a very, very good deal for the Air
Products shareholders”
Paul Huck, Air Products SVP & CFO, Air Products investor call, 5 February 2010
Permission to use quotations neither sought nor obtained.


31
31
Airgas’
Airgas’
Stock Price Has Consistently
Stock Price Has Consistently
Outperformed…
Outperformed…
31
31
Indexed Price Performance to February 4, 2010
Source: Bloomberg as of February 4, 2010
(100)%
0%
100%
200%
300%
400%
500%
600%
700%
800%
900%
1,000%
Jan-2001
Jul-2002
Jan-2004
Jul-2005
Jan-2007
Jul-2008
Feb-2010
Airgas
Air Products
S&P 500 Index
539.0
79.7
(19.5)
Airgas Has Delivered Consistently Superior Share Price Performance


32
32
…Driving Superior Total Shareholder
…Driving Superior Total Shareholder
Returns in Nearly Every Measurable Period
Returns in Nearly Every Measurable Period
32
32
Source: Company filings and Bloomberg data
Note: Total Shareholder Return calculated based on share price plus dividends reinvested.
Cumulative Total Shareholder Return to January 1, 2010


33
33
Airgas Has Significantly
Airgas Has Significantly
Outperformed Air Products
Outperformed Air Products
33
33
Revenue
2001-2009 CAGR
EBITDA *
2001-2009 CAGR
EBITDA * –
Capex
2001-2009 CAGR
Source: Financials based on company filings calendarized to December year end.
* See attached reconciliation of non-GAAP measures.
Diluted EPS
2001-2009 CAGR
5%
11%
Airgas
Air Products
5%
17%
Airgas
Air Products
15%
5%
Airgas
Air Products
7%
20%
Airgas
Air Products
Note:
CAGR
=
Compound
Annual
Growth
Rate


34
34
Airgas’
Airgas’
Superior Track Record
Superior Track Record
in Executing Acquisitions
in Executing Acquisitions
34
34
Since 2000
Airgas
Air Products
Number of Acquisitions
91
21
Total Disclosed Value of
Acquisitions
$2,210 million
$1,765 million
Acquisition and Restructuring
Related Charges ($mm)
$21 million
$393 million (1)
Acquisition Value Leakage (2)
1%
22%
Source: Company public filings
(1) Includes impairment charge on sale of U.S. Healthcare operations in 2009 and HPPC Business in 2007. Excludes charges and losses on currency hedges related to aborted
BOC transaction.
(2) Defined as acquisition and restructuring related charges as percentage of total disclosed value of acquisitions.


35
35
Proposals Exploit Airgas’
Proposals Exploit Airgas’
Only Significant
Only Significant
Annual EBITDA Decline in 22 Years
Annual EBITDA Decline in 22 Years
35
35
Source: Financials per company filings based on March fiscal year end.
* See attached reconciliation of non-GAAP measures.
Annual EBITDA by Fiscal Year*
TTM
Dec 31,
2009
$27
$41
$109
$196
$191
$190
$197
$236
$256
$314
$396
$489
$666
$746
$672
$50
$145
$139
$62
$38
$79
$194
$0
$200
$400
$600
$800
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009


36
36
36
36
A Temporary Market Overreaction
A Temporary Market Overreaction
Source: Bloomberg; market data as of February 4, 2010
$20
$30
$40
$50
$60
$70
$80
Jan-09
Feb-09
Mar-09
Apr-09
May-09
Jun-09
Jul-09
Aug-09
Sep-09
Oct-09
Nov-09
Dec-09
Jan-10
Feb-10
$43.53
Airgas Stock Price
January 15 –
February 4
(14)%
(12)%
(10)%
(8)%
(6)%
(4)%
(2)%
0%
2%
15-Jan
22-Jan
29-Jan
January 28, 2010
Airgas announces
Q3 FY 2010
earnings
miss guidance by
just 2 cents (3.0%),
stock falls 10%
(10)%


37
37
Airgas is Well-Positioned
Airgas is Well-Positioned
for the U.S. Economic Recovery
for the U.S. Economic Recovery
37
37
Note: GDP forecasts per Bloomberg consensus as of February 9, 2010. Airgas estimates per IBES as of February 4, 2010.  EBITDA calendarized to December
year end
0.4
%
24
%
25
%
3.6
%
3.1
%
2.7
%
2.1
%
(2.4)%
2.7
%
2.9
%
22
%
7
%
(11)%
24
%
10
%
33
%
(15.0)%
(5.0)%
5.0
%
15.0
%
25.0
%
35.0
%
2004
2005
2006
2007
2008
2009
2010E
2011E
U.S. GDP Growth
Airgas EBITDA Growth
U.S. GDP Growth and Airgas EBITDA Growth
(% Year-over-Year)


38
38
Same
Same
-Store
-Store
Sales
Sales
Are
Are
Beginning
Beginning
to
to
Rebound
Rebound
Our Same-Store Sales Grow in Excess of Non-Tech Industrial Production, Which
Has Now Troughed and Begun to Demonstrate Quarterly Growth
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
ARG Dist. SSS
Non-tech IP


39
39
0
20
%
40
%
60
%
80
%
100
%
120
%
140
%
160
%
180
%
Mar-98
Mar-99
Mar-00
Mar-01
Mar-02
Mar-03
Mar-04
15 months
31% recovery
78% post-recovery
EPS growth
0%
20%
40%
60%
80%
100%
120%
140%
160%
180%
Mar-98
Mar-99
Mar-00
Mar-01
Mar-02
Mar-03
Mar-04
22 months
346% recovery
Prior cycle peak
April 1998
Now is Precisely the
Now is Precisely the
Wrong Time to Sell Airgas
Wrong Time to Sell Airgas
39
39
Share Price Indexed to Peak
1998-2004
EPS Indexed to Peak
1998-2004
Sources: Bloomberg, CapitalIQ
Airgas’
EPS and Share Price Performance Recover Late in the Cycle but
Perform Strongly in Periods of Economic Recovery and Expansion


Conclusion
Conclusion


41
41
Air Products’
Air Products’
Proposals Grossly
Proposals Grossly
Undervalue Airgas and Are Opportunistic
Undervalue Airgas and Are Opportunistic
41
41
Air Products’
proposals:
Grossly undervalue Airgas
Do
not
reflect
value
of
Airgas’
industry-leading
position,
unrivaled
platform,
and
substantial recent investments
Attempt to exploit a temporary valuation anomaly
Do
not
reflect
Airgas’
significant
opportunities
in
economic
recovery
Airgas’
standalone
value
proposition
is
superior
to
Air
Products’
proposals
Track record of double-digit growth
11% Revenue CAGR
17% EBITDA* CAGR
20% Diluted EPS CAGR
21% Cashflow
from Operations* CAGR
Outstanding share price performance
4,201% total shareholder return since IPO
85% total shareholder return in past 5 years
Note: CAGR (Compound Annual Growth Rate) calculated over 2001-2009 period and based on company filings calendarized to December year end. Total shareholder return as of     
February 4, 2010 
*See attached reconciliation of non-GAAP measures


Appendix
Appendix


43
43
43
43
Reconciliation: Return on Capital
Reconciliation: Return on Capital
($millions)
FY13-14E
TTM
9/30/09
Operating Income (TTM)
$750
$463
5-Quarter Averages:
Total Assets
5,260
4,380
Securitized Trade Receivables
320
320
Current Liabilities (net of debt)
(580)
(434)
Average Capital Employed
$5,000
$4,266
Return on Capital
15.0%
10.8%
The Company believes this return on capital computation helps investors assess how effectively the Company uses the capital
invested in its operations. Our management uses return on capital as a metric for determining employee compensation.  Non-GAAP
numbers should be read in conjunction with the GAAP financial measures, as non-GAAP metrics are merely a supplement to, and
not a replacement for, GAAP financial measures.  It should be noted as well that our return on capital information may be different
from the return on capital computations provided by other companies.
Quarterly averages used in the computation of return on capital above reflect the impact of material acquisitions as of their
acquisition date.


44
44
44
44
Reconciliation:
Reconciliation:
Net Earnings to Adjusted EBITDA
Net Earnings to Adjusted EBITDA
The Company believes this presentation of adjusted EBITDA helps investors better assess earnings quality. Non-GAAP
numbers should be read in conjunction with GAAP financial measures, as non-GAAP metrics are merely a supplement to,
and not a replacement for, GAAP financial measures.
It should be noted as well that our adjusted EBITDA metric may be
different from adjusted EBITDA metrics provided by other companies.
12 Months Ended
31 December
12 Months Ended
31 December
2009
2001
Net earnings (loss)
$213
($18)
Cumulative effect of change in accounting principle
0
59
Earnings before the cummulative effect of a change
in accounting principle
$213
$41
Plus:
Income taxes
$136
$26
Equity in earnings of unconsolidated affiliates
0
(3)
Interest expense, net
70
48
Discount on securitization of trade receivables
6
5
Loss on the extinguishment of debt
9
0
Other (income) expense, net
(1)
(1)
Depreciation
210
62
Amortization
22
12
Multi-employer pension plan withdrawal charge
7
0
Adjusted EBITDA
$672
$190


45
45
45
45
45
45
Reconciliation: Diluted Earnings per Share
Reconciliation: Diluted Earnings per Share
2009
2001
Net earnings (loss) per diluted share
$2.56
($0.26)
Add:
Cumulative effect per diluted share
of change in accounting principle
-
             
0.85
Earnings per diluted share before
cumulative effect of change in accounting principle
$2.56
$0.59
Twelve Months Ended
December 31,


46
46
46
46
Reconciliations:
Reconciliations:
Quarterly Adjusted EBITDA and Adjusted EPS
Quarterly Adjusted EBITDA and Adjusted EPS
Adjusted EBITDA
($ in millions)
1Q09
2Q09
3Q09
4Q09
1Q10
2Q10
3Q10
Operating Income
$ 135
$ 145
131
$  
115
$  
108
$  
110
$  
100
$  
Plus:
Depreciation
49
      
49
      
50
      
51
      
52
      
53
      
54
      
Amortization
5
         
6
         
5
         
6
         
5
         
5
         
6
         
Multi-employer pension plan
withdrawal charge
-
     
-
     
-
     
-
     
-
     
2
         
5
         
Adjusted EBITDA
$ 189
$ 200
$ 186
$ 172
$ 165
$ 170
$ 165
Fiscal Quarters
The Company believes this presentation of Adjusted EBITDA helps investors better assess earnings quality.
Adjusted EPS
1Q09
2Q09
3Q09
4Q09
1Q10
2Q10
3Q10
Earnings per diluted share
$ 0.81
$ 0.86
$ 0.76
$ 0.68
$ 0.66
$ 0.65
$ 0.56
Plus:
Debt extinguishment charge
-
     
-
     
-
     
-
     
-
     
0.02
   
0.05
   
Multi-employer pension plan
withdrawal charge
-
     
-
     
-
     
-
     
-
     
0.01
   
0.04
   
Adjusted earnings per diluted share
0.81
0.86
0.76
0.68
0.66
0.68
0.65
Fiscal Quarters
The Company believes that adjusted earnings per diluted share provides investors meaningful insight into the Company's earnings
performance
without
the
impact
of
debt
extinguishment
and
multi-employer
pension
plan
withdrawal
charges.
Non-GAAP
numbers
should
be
read in conjunction with GAAP financial measures, as non-GAAP metrics are merely a supplement to, and not a replacement for, GAAP
financial measures.
It should be noted as well that our adjusted earnings per diluted share metric may be different from adjusted earnings per
diluted share metrics provided by other companies.


47
47
Reconciliations: Adjusted EPS FY06-FY09
Reconciliations: Adjusted EPS FY06-FY09
Reconciliation of Adjusted Earnings per Share (EPS)
Years Ended March 31,
2006
2007
2008
2009
EPS from continuing operations
1.62
$          
1.92
$          
2.66
$          
3.12
$          
Debt extinguishment charge
-
               
0.10
             
-
               
-
               
Stock-based compensation
(1)
(0.10)
           
-
               
-
               
-
               
Hurricane-related losses
0.02
             
-
               
-
               
-
               
National Welders conversion charge
-
               
0.03
             
-
               
Benefit from state tax law change
-
               
(0.02)
           
(0.01)
           
-
               
Adjusted EPS from continuing operations
1.54
$          
2.00
$          
2.68
$          
3.12
$          
The Company believes this presentation of Adjusted EPS helps investors better assess earnings quality.
(1)
The Company adopted SFAS 123R, “Share-based Payments,” using the “modified prospective” method effective
April 1, 2006. The reduction of earnings in fiscal year 2006 represents stock-based compensation expense the
Company would have recognized if SFAS 123R had been applicable in those periods.


48
48
Reconciliation: Free Cash Flow
Reconciliation: Free Cash Flow
48
48
The Company believes that free cash flow and adjusted cash from operations provide investors meaningful insight into the Company's ability to generate cash from
operations, which is available for servicing debt obligations and for the execution of its business strategy, including acquisitions, the prepayment of debt, or to support
other investing and financing activities.  Non-GAAP numbers should be read in conjunction with GAAP financial measures, as non-GAAP metrics are merely a
supplement to, and not a replacement for, GAAP financial measures.  It should be noted as well that our free cash flow and adjusted cash from operations metrics may
be different from free cash flow and adjusted cash from operations metrics provided by other companies.
TTM
($ in millions)
12/31/09
FY09
FY08
FY07
FY06
FY05
FY04
FY03
FY02
FY01
Net cash provided by operating activities
$581
$583
$550
$326
$346
$212
$204
$187
$244
$196
Adjustments to cash provided by operating activities:
Cash used (provided) by the securitization of
     trade receivables
92
49
(96)
(20)
(54)
(27)
(4)
(25)
(61)
(73)
Stock issued for employee stock purchase plan
16
17
14
12
11
10
7
9
7
6
Tax benefit realized from exercise of stock options
5
12
13
9
-
-
-
-
-
-
Adjusted cash from operations
$694
$660
$482
$327
$302
$195
$207
$171
$190
$129
Capital expenditures
($261)
($352)
($267)
($238)
($209)
($168)
($94)
($68)
($58)
($66)
Adjustments to capital expenditures:
Proceeds from sales of plant and equipment
12
14
9
9
8
5
5
4
3
3
Operating lease buyouts
2
6
1
10
15
24
4
-
-
-
Adjusted capital expenditures
($248)
($332)
($257)
($220)
($186)
($139)
($84)
($64)
($55)
($63)
Free Cash Flow
$446
$328
$225
$107
$116
$57
$123
$107
$135
$66


49
49
49
49
Reconciliation: Quarterly Free Cash Flow
Reconciliation: Quarterly Free Cash Flow
The Company believes that free cash flow and adjusted cash from operations provide investors meaningful insight into the Company's ability
to generate cash from operations, which is available for servicing debt obligations and for the execution of its business strategy, including
acquisitions,
the
prepayment
of
debt,
the
payment
of
dividends,
or
to
support
other
investing
and
financing
activities.
Non-GAAP
numbers
should be read in conjunction with GAAP financial measures, as non-GAAP metrics are merely a supplement to, and not a replacement for,
GAAP financial measures.
It should be noted as well that our free cash flow and adjusted cash from operations metrics may be different from
free cash flow and adjusted cash from operations metrics provided by other companies.
Free Cash Flow
($ in millions)
1Q09
2Q09
3Q09
4Q09
1Q10
2Q10
3Q10
Net cash provided by operating activities
128,619
$
141,623
$
143,196
$
169,329
$
162,259
$
137,511
$
111,965
$
Adjustments to cash provided by operating activities:
    Cash used (provided) by securitization of trade receivables
-
           
-
           
-
           
48,600
     
15,900
     
22,800
     
4,800
       
    Stock issued for the employee stock purchase plan
3,934
       
4,168
       
4,133
       
4,272
       
3,888
       
3,871
       
3,577
       
    Tax benefit realized from the exercise of stock options
7,280
       
1,174
       
2,076
       
1,316
       
1,334
       
1,387
       
1,103
       
    Adjusted cash from operations
139,833
$
146,965
$
149,405
$
223,517
$
183,381
$
165,569
$
121,445
$
Capital expenditures
(85,564)
(99,635)
(97,087)
(69,626)
(67,312)
(64,053)
(60,309)
Adjustments to capital expenditures:
    Proceeds from sales of plant and equipment
3,329
       
1,483
       
6,786
       
2,762
       
2,510
       
3,185
       
3,194
       
    Operating lease buyouts
-
           
5,575
       
-
           
-
           
-
           
-
           
1,687
       
    Adjusted capital expenditures
(82,235)
(92,577)
(90,301)
(66,864)
(64,802)
(60,868)
(55,428)
Free Cash Flow
57,598
$  
54,388
$  
59,104
$  
156,653
$
118,579
$
104,701
$
66,017
$  
Fiscal Quarters


50
50
50
50
50
50
Reconciliation: Operating Income to Adjusted EBITDA to
Reconciliation: Operating Income to Adjusted EBITDA to
Net Cash Provided by Operating Activities
Net Cash Provided by Operating Activities
FY1989
FY1990
FY1991
FY1992
FY1993
FY1994
FY1995
FY1996
FY1997
FY1998
FY1999
Operating income
$15,958
$23,221
$17,286
$26,316
$34,367
$48,667
$72,600
$92,987
$80,480
$111,709
$112,607
Add:
Depreciation & amortization
11,147
     
17,387
     
21,158
     
23,420
     
28,042
     
30,571
     
36,868
     
45,762
     
64,428
     
82,227
       
83,839
       
Adjusted EBITDA
$27,105
$40,608
$38,444
$49,736
$62,409
$79,238
$109,468
$138,749
$144,908
$193,936
$196,446
(Uses)/sources of cash excluded from Adjusted EBITDA, included in
Cash from Operations:
Interest expense, net
($12,245)
($16,198)
($15,179)
($12,838)
($11,403)
($12,486)
($17,625)
($24,862)
($39,367)
($52,603)
($59,677)
Discount on securitization of receivables
-
              
-
              
-
              
-
              
-
              
-
              
-
              
-
              
-
              
-
                
-
                
Current income taxes
404
         
1,700
       
(599)
        
(3,591)
      
(5,653)
      
(7,838)
      
(12,345)
    
(17,654)
    
(20,012)
    
(16,502)
      
(17,244)
      
Other income (expense)
215
         
157
         
870
         
214
         
546
         
453
         
1,607
       
781
         
1,695
       
9,811
        
29,491
       
Equity in earnings of Elkem joint venture
1,415
       
1,435
       
2,009
       
2,019
       
(897)
        
(1,258)
      
(840)
        
(1,428)
      
(1,356)
      
(1,478)
       
(869)
          
(Gains)/losses on divestitures
-
              
-
              
-
              
-
              
-
              
-
              
(560)
        
-
              
-
              
(1,452)
       
(25,468)
      
(Gain)/losses on sale of PP&E
(32)
          
2
             
(715)
        
(76)
          
(292)
        
(63)
          
110
         
(12)
          
616
         
(504)
          
(222)
          
Stock-based compensation expense
-
              
-
              
-
              
-
              
-
              
-
              
-
              
-
              
-
              
-
                
-
                
Income(loss) on discontinued operations
-
              
-
              
-
              
-
              
-
              
-
              
-
              
-
              
478
         
(635)
          
(871)
          
Other non-cash charges
260
         
308
         
252
         
250
         
-
              
-
              
-
              
-
              
3,930
       
11,422
       
-
                
Cash provided (used) by changes in assets and liabilities
4,379
       
702
         
6,712
       
15,968
     
13,608
     
6,752
       
(2,030)
      
(6,948)
      
(14,801)
    
(13,548)
      
(25,273)
      
Net Cash Provided by Operating Activities
$21,501
$28,714
$31,794
$51,682
$58,318
$64,798
$77,785
$88,626
$76,091
$128,447
$96,313
TTM
FY2000
FY2001
FY2002
FY2003
FY2004
FY2005
FY2006
FY2007
FY2008
FY2009
12/31/2009
Operating income
$105,461
$106,728
$124,938
$156,336
$168,544
$202,454
$268,758
$341,452
$476,146
$524,868
$440,221
Add:
Depreciation & amortization
85,262
     
82,796
     
71,757
     
79,279
     
87,447
     
111,078
   
127,542
   
147,343
   
189,775
   
220,795
     
231,517
     
Adjusted EBITDA
$190,723
$189,524
$196,695
$235,615
$255,991
$313,532
$396,300
$488,795
$665,921
$745,663
$671,738
(Uses)/sources of cash excluded from Adjusted EBITDA, included in
Cash from Operations:
Interest expense, net
($56,879)
($59,550)
($46,775)
($46,374)
($42,357)
($51,245)
($53,812)
($60,180)
($89,860)
($84,395)
($69,746)
Discount on securitization of receivables
-
              
(1,303)
      
(4,846)
      
(3,326)
      
(3,264)
      
(4,711)
      
(9,371)
      
(13,630)
    
(17,031)
    
(10,738)
      
(6,200)
       
Current income taxes
(16,902)
    
(13,402)
    
4,546
       
(33,174)
    
(24,623)
    
(22,622)
    
(30,718)
    
(47,972)
    
(69,459)
    
(64,985)
      
(61,399)
      
Other income (expense)
18,625
     
1,324
       
5,987
       
2,132
       
1,472
       
1,129
       
2,462
       
1,601
       
1,507
       
(382)
          
979
           
Equity in earnings of Elkem joint venture
-
              
-
              
-
              
-
              
-
              
-
              
-
              
-
              
-
              
-
                
-
                
(Gains)/losses on divestitures
(17,712)
    
(1,173)
      
(5,548)
      
241
         
-
              
(360)
        
1,900
       
-
              
-
              
-
                
-
                
(Gain)/losses on sale of PP&E
(915)
        
502
         
405
         
(257)
        
(837)
        
(321)
        
(1,330)
      
39
           
714
         
(964)
          
2,058
        
Stock-based compensation expense
-
              
-
              
-
              
-
              
-
              
-
              
-
              
15,445
     
16,629
     
20,635
       
23,427
       
Income(loss) on discontinued operations
(335)
        
(400)
        
(3,529)
      
(1,776)
      
(457)
        
464
         
(1,424)
      
-
              
-
              
-
                
-
                
Other non-cash charges
458
         
2,281
       
1,068
       
-
              
-
              
-
              
-
              
-
              
-
              
-
                
-
                
Cash provided (used) by changes in assets and liabilities
(22,686)
    
78,329
     
95,691
     
33,931
     
17,865
     
(23,456)
    
42,038
     
(57,755)
    
41,505
     
(22,067)
      
28,205
       
Net Cash Provided by Operating Activities
$94,377
$196,132
$243,694
$187,012
$203,790
$212,410
$346,045
$326,343
$549,926
$582,767
$589,062
The Company believes Adjusted EBITDA provides investors meaningful insight into the Company's ability to generate cash from operations to support required working capital, capital expenditures and financial obligations.
Certain reclassifications have been made to prior period financial statements to conform to the current presentation.