Air Products and Chemicals, Inc. is a world-leading Industrial Gas company founded in 1940 in Delaware.The Company serves energy, electronics, chemicals, metals, and manufacturing customers globally with a unique portfolio of products, services, and solutions that include atmospheric gases, process and special gases, equipment, and services. The Company is the world’s largest supplier of hydrogen and has leading positions in growth markets such as helium and natural gas liquefaction. The Company has approximately 15,300 employees.
In 2017, Air Products put into operation a world-class hydrogen project in India, a large air separation unit in Korea, and the 7th air separation unit in China providing oxygen for coal gasification. Also in 2017, Air Products established a world-class technology centre in the Dhahran Techno Valley Science Park to serve Saudi Arabia and the Middle East region. In November 2017, Air Products signed an investment cooperation agreement with the Yankuang Group for a $3.5 billion coal-to-syngas production facility to be built in Yulin City, Shaanxi Province, China. In September 2017, building on more than 30 years of continuous growth and investment in China, Air Products announced an agreement to form a $1.3 billion joint venture (JV) with Lu’An Clean Energy Company serving the syngas-to-liquids production facility in Changzhi City, Shanxi Province, China. The JV will own and operate the air separation units, gasifiers and syngas cleanup systems to provide syngas to Lu’An under a long-term agreement.
Air Products operate under five segments: Industrial Gases – Americas; Industrial Gases – EMEA (Europe, Middle East, and Africa); Industrial Gases – Asia; Industrial Gases – Global; Corporate and other.
The regional Industrial Gases (Americas, EMEA, and Asia) segments produce and sell atmospheric gases such as oxygen, nitrogen, and argon (primarily recovered by the cryogenic distillation of air) and process gases such as hydrogen, carbon monoxide, helium, syngas, and special gases. The gases are supplied to many industries, including metal, glass, chemical processing, energy production and refining, food processing, metallurgical industries, medical, and general manufacturing.
The Industrial Gases – Global segment includes cryogenic and gas processing equipment sales for air separation. The equipment is sold to many industries, including chemical and petrochemical manufacturing, oil and gas recovery and processing, and steel and primary metal processing.
The Corporate and other segment includes two global businesses: the liquefied natural gas sale of equipment and process technology business and the liquid helium and liquid hydrogen transport and storage container business.
In 2017, Air Products completed the sale of its Performance Materials business to Evonik Industries AG. The results of operations, financial condition, and cash flows for the Electronic Materials and Performance Materials businesses are presented in all the financial statements as discontinued operations.
Regional industrial gases sales constituted approximately 90% of consolidated sales in 2017, 90% in 2016, and 92% in 2015. Sales of tonnage hydrogen and related products constituted approximately 24% of consolidated sales in 2017, 21% in 2016, and 24% in 2015. Sales of atmospheric gases constituted approximately 45% of consolidated sales in 2017, 46% in 2016 and 45% in 2015. Sale of equipment constituted approximately 10% of consolidated sales in 2017, 10% in 2016, and 8% in 2015. According to the Company´s Annual report in 2017, the Company´s sales from continuing operations amounted to $8.2 billion compared to $7.5 billion in 2016, and increased by $683.9 million or 9% over the previous year, primarily due to volume growth from a new project for regional industrial gas businesses.
Cost of sales amounted to $5.8 billion in 2017 and increased by $576.8 million or 11%, due to higher costs, higher energy and natural gas cost passed-through to customers.
Income from continuing operations amounted to $1,134.4 million in 2017 and increased by 3% or $34.9 million, and diluted EPS of $5.16 increased by 2%. Adjusted EPS  of $6.31 increased by 12%. The Company generated strong cash flow and returned about $800 million of that through dividends in 2017.
Adjusted EBITDA  of $2,795.0 million increased by $173.5 million or by 7%, compared to $2,621.5 in 2016 primarily due to higher volumes and favorable cost performance. Adjusted EBITDA margin of 34.1% decreased slightly from 34.9% in 2016 and was negatively impacted by higher contractual energy passed-through to customers.
By segments, the Company achieved the following financial results in 2017/2016/2015 (in millions of US$):
Industrial Gases – Americas
Sales: 3,637.0 (2017) / 3,344.1 (2016) / 3,694.5 (2015)
Operating income: 950.6 (2017) / 893.2 (2016) / 806.1 (2015)
Adjusted EBITDA: 1,473.1 (2017) / 1,389.5 (2016) / 1,288.2 (2015)
Industrial Gases – EMEA
Sales: 1,780.4 (2017) / 1,704.4 (2016) / 1,866.4 (2015)
Operating income: 387.1 (2017) / 384.6 (2016) / 331.3 (2015)
Adjusted EBITDA: 611.3 (2017) / 606.8 (2016) / 568.0 (2015)
Industrial Gases – Asia
Sales: 1,964.7 (2017) / 1,720.4 (2016) / 1,661.3 (2015)
Operating income: 531.2 (2017) / 451.0 (2016) / 389.3 (2015)
Adjusted EBITDA: 787.9 (2017) / 706.7 (2016) / 645.3 (2015)
Industrial Gases – Global
Sales: 722.9 (2017) / 498.8 (2016) / 286.7 (2015)
Operating income: (loss) 71.3 (2017) / (21.3) (2016) / (51.6) (2015)
Adjusted EBITDA: 81.1 (2017) / (13.4) (2016) / (35.9) (2015)
In the global segment sales amounted to $722.9 million in 2017 and increased drastically by $224.1 million or 45%. The increase in sales was primarily driven by a contract for the sale of multiple air separation units for Saudi Aramco’s Jazan oil refinery and power plant in Saudi Arabia.
Other income (expense)
Sales: 82.6 (2017) / 236.0 (2016) / 315.4 (2015)
Operating loss: (170.6) (2017) / (87.6) (2016) / (86.5) (2015)
Adjusted EBITDA: (158.4) (2017) / (68.1) (2016) / (66.2) (2015)
In 2017, sales amounted to $82.6 million and decreased by $153.4 million or 65%, primarily due to lower LNG project activity.
Research and development expenditures were $57.8 million during 2017, compared to $71.6 million during 2016 and decreased by 19%. Research and development expense as a percent of sales decreased to 7% from 1%. In 2015, research and development expenditures were $76.4 million. In 2017, the Company owned approximately 532 United States patents, approximately 2,544 foreign patents, and was a licensee under certain patents owned by others.
 The Company has presented certain financial measures on a non-GAAP (“adjusted”) basis and has provided reconciliation to the most directly comparable financial measure calculated in accordance with GAAP.
 Adjusted EBITDA is defined as income from continuing operations (including non-controlling interests) excluding certain disclosed items before interest expense, other non-operating income (expense), net, income tax provision, and depreciation and amortization expense.