Business Segment And Geographic Information

12 Months Ended

Sep. 30, 2011

Business Segment And Geographic Information [Abstract]

Business Segment And Geographic Information

24.  BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION

Our segments are organized based on differences in product and/or type of customer. We have four business segments consisting of Merchant Gases, Tonnage Gases, Electronics and Performance Materials, and Equipment and Energy.

Merchant Gases

The Merchant Gases segment sells atmospheric gases such as oxygen, nitrogen, and argon (primarily recovered by the cryogenic distillation of air); process gases such as hydrogen and helium (purchased or refined from crude helium); and medical and specialty gases, along with certain services and equipment, throughout the world to customers in many industries, including those in metals, glass, chemical processing, food processing, healthcare, steel, general manufacturing, and petroleum and natural gas industries. There are four principal types of products: liquid bulk, packaged gases, small on-site plants, and healthcare products. Most merchant product is delivered via bulk supply, in liquid or gaseous form, by tanker or tube trailer. Smaller quantities of industrial, specialty, and medical gases are delivered in cylinders and dewars as "packaged gases," or through small on-sites (cryogenic or noncryogenic generators). Through our healthcare business, we offer respiratory therapies, home medical equipment, and infusion services, primarily in Europe. Electricity is the largest cost component in the production of atmospheric gases. Natural gas is also an energy source at a number of our Merchant Gases facilities. We mitigate energy and natural gas prices through pricing formulas and surcharges. The Merchant Gases segment also includes our share of the results of several joint ventures accounted for by the equity method. The largest of these joint ventures operate in Mexico, Italy, South Africa, India and Thailand. Merchant Gases competes worldwide against global industrial gas companies and several regional sellers. Competition in industrial gases is based primarily on price, reliability of supply, and the development of industrial gas applications. Competition in the healthcare business involves price, quality, service, and reliability of supply.

Tonnage Gases

Tonnage Gases provides hydrogen, carbon monoxide, nitrogen, oxygen, and syngas principally to the energy production and refining, chemical, and metallurgical industries worldwide. The Tonnage Gases segment also includes our Polyurethane Intermediates (PUI) business. The PUI business markets toluene diamine to customers under long-term contracts. For large-volume, or "tonnage" industrial gas users, we either construct a gas plant adjacent to or near the customer's facility—hence the term "on-site"—or deliver product through a pipeline from a nearby location. We are the world's largest provider of hydrogen, which is used by refiners to lower the sulfur content of gasoline and diesel fuels to reduce smog and ozone depletion. Electricity is the largest cost component in the production of atmospheric gases, and natural gas is the principal raw material for hydrogen, carbon monoxide, and syngas production. We mitigate energy and natural gas price changes through our long-term cost pass-through type contracts. Tonnage Gases competes against global industrial gas companies, as well as regional competitors. Competition is based primarily on price, reliability of supply, the development of applications that use industrial gases and, in some cases, provision of other services or products such as power and steam generation. We also derive a competitive advantage in regions where we have pipeline networks, which enable us to provide reliable and economic supply of products to customers.

Electronics and Performance Materials

The Electronics and Performance Materials segment employs applications technology to provide solutions to a broad range of global industries through expertise in chemical synthesis, analytical technology, process engineering, and surface science. This segment provides specialty and tonnage gases, specialty chemicals, services, and equipment to the electronics industry for the manufacture of silicon and compound semiconductors, LCD and other displays, and photovoltaic devices. The segment also provides performance chemical solutions for the coatings, inks, adhesives, civil engineering, personal care, institutional and industrial cleaning, mining, oil field, polyurethane, and other industries. The Electronics and Performance Materials segment faces competition on a product-by-product basis against competitors ranging from niche suppliers with a single product to larger and more vertically integrated companies. Competition is principally conducted on the basis of price, quality, product performance, reliability of product supply, technical innovation, service, and global infrastructure.

Equipment and Energy

The Equipment and Energy segment designs and manufactures cryogenic and gas processing equipment for air separation, hydrocarbon recovery and purification, natural gas liquefaction (LNG), and helium distribution, and serves energy markets in a variety of ways. Equipment is sold worldwide to customers in a variety of industries, including chemical and petrochemical manufacturing, oil and gas recovery and processing, and steel and primary metals processing. Energy markets are served through our operation and partial ownership of cogeneration and flue gas desulfurization facilities. In addition, we are developing hydrogen as an energy carrier, waste-to-energy facilities to produce electricity, carbon capture technologies for a variety of industrial and power applications, and oxygen-based technologies to serve energy markets in the future. Equipment and Energy competes with a great number of firms for all of its offerings except LNG heat exchangers, for which there are fewer competitors due to the limited market size and proprietary technologies. Competition is based primarily on technological performance, service, technical know-how, price, and performance guarantees.

Other

Other operating income (loss) includes other expense and income that cannot be directly associated with the business segments, including foreign exchange gains and losses, and costs previously allocated to businesses now reported as discontinued operations. Also included are LIFO inventory adjustments, as the business segments use FIFO and the LIFO pool adjustments are not allocated to the business segments. Corporate general and administrative costs and research and development costs are fully allocated to the business segments.

Other assets include cash, restricted cash, deferred tax assets, pension assets, financial instruments, and corporate assets previously allocated to businesses now reported as discontinued operations.

Customers

We do not have a homogeneous customer base or end market, and no single customer accounts for more than 10% of our consolidated revenues.

Accounting Policies

The accounting policies of the segments are the same as those described in Note 1, Major Accounting Policies. We evaluate the performance of segments based upon reported segment operating income. Operating income of the business segments includes general corporate expenses. Intersegment sales are not material and are recorded at selling prices that approximate market prices. Equipment manufactured for our industrial gas business is generally transferred at cost and not reflected as an intersegment sale.

Business Segments

Sales to External Customers	2011		2010		2009
Merchant Gases		$4,073.2		$3,718.3		$3,610.6
Tonnage Gases		3,316.7		2,930.8		2,573.6
Electronics and Performance Materials		2,291.5		1,904.7		1,582.2
Equipment and Energy		400.6		472.2		489.8
Segment and Consolidated Totals		$10,082.0		$9,026.0		$8,256.2

Operating Income	2011			2010			2009
Merchant Gases		$759.8			$729.4			$661.2
Tonnage Gases		503.1			444.2			399.6
Electronics and Performance Materials		361.1			251.8			101.6
Equipment and Energy		62.8			67.3			42.2
Segment total		$1,686.8			$1,492.7			$1,204.6
Global cost reduction plan (A)		—			—			(298.2	)
Net loss on Airgas transaction		(48.5	)		(96.0	)		—
Customer bankruptcy and asset actions		—			6.4			(32.1	)
Pension settlement		—			(11.5	)		(10.7	)
Other		(16.1	)		(2.6	)		(17.3	)
Consolidated Total		$1,622.2			$1,389.0			$846.3

^(A) Information about how this charge related to the businesses at the segment level is discussed in Note 5, Global Cost Reduction Plan.

Depreciation and Amortization	2011		2010		2009
Merchant Gases		$396.6		$377.9		$372.3
Tonnage Gases		310.9		303.0		272.2
Electronics and Performance Materials		154.9		169.0		178.2
Equipment and Energy		11.0		12.7		15.9
Segment total		$873.4		$862.6		$838.6
Other		.5		.8		1.7
Consolidated Total		$873.9		$863.4		$840.3

Equity Affiliates' Income	2011		2010		2009
Merchant Gases		$134.6		$104.3		$98.3
Other segments		19.7		22.6		13.9
Segment and Consolidated Totals		$154.3		$126.9		$112.2

Total Assets	2011		2010		2009
Merchant Gases		$5,892.1		$5,824.7		$5,630.8
Tonnage Gases		4,581.8		3,958.1		3,672.0
Electronics and Performance Materials		2,560.7		2,336.1		2,299.1
Equipment and Energy		357.5		362.7		333.8
Segment total		$13,392.1		$12,481.6		$11,935.7
Other		898.6		1,024.3		1,093.4
Consolidated Total		$14,290.7		$13,505.9		$13,029.1

Investment in and Advances to Equity Affiliates	2011		2010		2009
Merchant Gases		$800.4		$749.4		$713.8
Other segments		211.2		163.4		154.3
Segment and Consolidated Totals		$1,011.6		$912.8		$868.1

Identifiable Assets	2011		2010		2009
Merchant Gases		$5,091.7		$5,075.3		$4,917.0
Tonnage Gases		4,464.3		3,876.4		3,597.8
Electronics and Performance Materials		2,488.9		2,275.8		2,249.5
Equipment and Energy		335.6		341.3		303.3
Segment total		$12,380.5		$11,568.8		$11,067.6
Other		898.6		1,024.3		1,093.4
Consolidated Total		$13,279.1		$12,593.1		$12,161.0

Expenditures for Long Lived Assets (A)	2011		2010		2009
Merchant Gases		$432.9		$311.5		$510.8
Tonnage Gases		669.9		557.2		532.1
Electronics and Performance Materials		196.0		139.0		125.4
Equipment and Energy		45.9		22.4		9.8
Segment total		$1,344.7		$1,030.1		$1,178.1
Other		7.0		.8		1.0
Consolidated Total		$1,351.7		$1,030.9		$1,179.1

^(A) Includes plant and equipment

Geographic Information

Sales to External Customers	2011		2010		2009
United States		$4,423.8		$4,110.2		$3,779.8
Canada		297.0		260.3		238.6
Europe		3,002.1		2,819.7		2,765.1
Asia		2,122.1		1,621.0		1,294.2
Latin America/other		237.0		214.8		178.5
		$10,082.0		$9,026.0		$8,256.2

Long Lived Assets (A)	2011		2010		2009
United States		$3,099.2		$2,968.0		$2,987.1
Canada		566.1		608.8		535.2
Europe		1,833.7		1,711.1		1,766.8
Asia		1,786.2		1,658.4		1,462.3
Latin America/other		126.8		105.0		108.2
		$7,412.0		$7,051.3		$6,859.6

^(A) Long lived assets include plant and equipment, net.

Geographic information is based on country of origin. Included in United States revenues are export sales to third party customers of $589.7 in 2011, $570.5 in 2010, and $510.2 in 2009. 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.