DEFA14A

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.     )

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¨ Preliminary Proxy Statement

 

¨ Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

 

¨ Definitive Proxy Statement

 

x Definitive Additional Materials

 

¨ Soliciting Material Pursuant to §240.14a-12

Airgas, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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It’s All About Value (Updated)
It’s All About Value (Updated)
August 18, 2010
August 18, 2010

1
1
1
1
1
1
IMPORTANT INFORMATION
In
connection
with
its
2010
Annual
Meeting
of
Stockholders,
Airgas,
Inc.
has
filed
a
definitive
proxy
statement
on
Schedule
14A
with
the
Securities
and
Exchange
Commission
(the
“SEC”).
INVESTORS
AND
STOCKHOLDERS
OF
AIRGAS
ARE
URGED
TO
READ
THE
PROXY
STATEMENT
FOR
THE
2010
ANNUAL
MEETING
IN
ITS
ENTIRETY
BECAUSE
IT
CONTAINS
IMPORTANT
INFORMATION.
In
response
to
the
tender
offer
proposed
by
Air
Products
and
Chemicals,
Inc.
referred
to
in
this
communication,
Airgas
has
filed
with
the
SEC
a
Solicitation/Recommendation
Statement
on
Schedule
14D-9,
as
amended.
STOCKHOLDERS
OF
AIRGAS
ARE
ADVISED
TO
READ
AIRGAS’
SOLICITATION/
RECOMMENDATION
STATEMENT
ON
SCHEDULE
14D-9,
AS
AMENDED,
IN
ITS
ENTIRETY
BECAUSE
IT
CONTAINS
IMPORTANT
INFORMATION.
This
communication
does
not
constitute
an
offer
to
sell
or
the
solicitation
of
an
offer
to
buy
any
securities
of
Air
Products.
Investors
and
stockholders
will
be
able
to
obtain
free
copies
of
Airgas’
definitive
proxy
statement,
the
Solicitation/Recommendation
Statement
on
Schedule
14D-9,
any
amendments
or
supplements
to
the
proxy
statement
and/or
the
Schedule
14D-9,
any
other
documents
filed
by
Airgas
in
connection
with
the
2010
Annual
Meeting
and/or
the
tender
offer
by
Air
Products,
and
other
documents
filed
with
the
SEC
by
Airgas
at
the
SEC’s
website
at
www.sec.gov.
Free
copies
of
the
definitive
proxy
statement,
the
Solicitation/
Recommendation
Statement
on
Schedule
14D-
9,
and
any
amendments
and
supplements
to
these
documents
are
also
available
in
the
“Investor
Information”
section
of
the
Company’s
website
at
www.airgas.com,
or
through
the
following
web
address:
http://investor.shareholder.com/arg/airgascontent.cfm.
Airgas
and
its
directors
and
certain
of
its
executive
officers
may
be
deemed
to
be
participants
in
the
solicitation
of
proxies
in
connection
with
its
2010
Annual
Meeting.
Detailed
information
regarding
the
names,
affiliations
and
interests
of
Airgas’
directors
and
executive
officers
is
available
in
the
definitive
proxy
statement
for
the
2010
Annual
Meeting,
which
was
filed
with
the
SEC
on
July
23,
2010.
To
the
extent
holdings
of
Airgas
securities
have
changed,
such
changes
have
been
or
will
be
reflected
on
Statements
of
Change
in
Ownership
on
Form
4
filed with the SEC.
FORWARD-LOOKING STATEMENTS
This
presentation
contains
statements
that
are
forward
looking.
Forward-looking
statements
include
the
statements
identified
as
forward-looking
in
the
Company’s
press
release
announcing
its
quarterly
earnings,
as
well
as
any
statement
that
is
not
based
on
historical
fact,
including
statements
containing
the
words
“believes,”
“may,”
“plans,”
“will,”
“could,”
“should,”
“estimates,”
“continues,”
“anticipates,”
“intends,”
“expects”
and
similar
expressions.
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
the
factors
identified
in
the
Company’s
press
release
announcing
its
quarterly
earnings,
as
well
as
other
factors
described
in
the
Company’s
reports,
including
its
March
31,
2010
Form
10-K,
subsequent
Forms
10-Q,
and
other
forms
filed
by
the
Company
with
the
Securities
and
Exchange
Commission.
The
Company
notes
that
forward-looking
statements
made
in
connection
with
a
tender
offer
are
not
subject
to
the
safe
harbors
created
by
the
Private
Securities
Litigation
Reform
Act
of
1995.
The
Company
is
not
waiving
any
other
defenses
that
may
be
available
under
applicable
law.
1
1

2
2
Agenda
Agenda
Slide
Slide
Introduction
2
The Airgas Growth Story
6
Earnings Growth Outlook & 2012 Goals
16
Our Perspective on Valuation
32
Conclusion
45
Appendix
49

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3
3
Airgas Has Consistently Created
Airgas Has Consistently Created
Shareholder Value…
Shareholder Value…
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 (c)
11.9%
Officer and Director Stock Beneficial Ownership
Ranking in S&P 500
#28 highest out of 500
Note: Market data measured through market close on February 4, 2010, prior to date of announcement of the Air Products offer.
(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.
(c)
Includes all options and other rights to acquire shares exercisable on or within 60 days of May 31, 2010.

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4
•
Airgas’
management has a proven track record of exceptional shareholder
value
creation
•
The Airgas Board unanimously believes that Air Products’
offer grossly
undervalues Airgas and is not a sensible starting point for any discussions or
negotiations
–
The Airgas Board has always been prepared to engage in discussions if and
when it believes those conversations will result in an appropriate value for
Airgas stockholders
•
We believe strongly that Airgas will generate more value for stockholders by
executing its strategic plan than by pursuing Air Products’
proposed transaction
–
FY Q1 2011 announced results demonstrate the strength of our earnings
growth, underpinned by an economic recovery that is just beginning
•
In addition, Airgas has significant “scarcity value”
as the largest independent
packaged gas business in the world
Our Board Believes That Air Products’
Our Board Believes That Air Products’
Offer
Offer
Would Deprive Shareholders of Full Value
Would Deprive Shareholders of Full Value
We believe that Airgas is poised to deliver significant value driven by a
material recovery in our earnings through 2012

5
5
5
5
5
5
5
5
5
5
5
5
Time Has Provided Additional Value
Time Has Provided Additional Value
to Our Shareholders
to Our Shareholders
10-Year U.S. Treasury Yield
Source: Bloomberg market data as of August 13, 2010, public filings
Note: All data shown from February 5, 2010, the date of the announcement of the initial Air Products public offer, and August 13, 2010.
* Represents quarterly Adjusted EPS.  See attached reconciliations of non-GAAP measures.
(1) Shown indexed to close as of February 5, 2010, and denominated in local currencies.
Peer Stock Prices¹
Our Earnings*
90%
100%
110%
120%
130%
Feb-2010
May-2010
Aug-2010
Air
Liquide:
18.4%
Praxair:
17.9%
Linde:
15.9%
$ 0.65
$ 0.69
$ 0.83
FQ3
2010
FQ4
2010
FQ1
2011
2.5%
3.0%
3.5%
4.0%
4.5%
Feb-2010
May-2010
Aug-2010
2.7 %
•
Additionally, from December 31, 2009 to August 13, 2010,
Airgas reduced adjusted debt by more than $230 million

6
6
Agenda
Agenda
Slide
Slide
Introduction
2
The Airgas Growth Story
6
Earnings Growth Outlook & 2012 Goals
16
Our Perspective on Valuation
32
Conclusion
45
Appendix
49

Airgas Is the Only Remaining Independent
Airgas Is the Only Remaining Independent
Packaged Gas Company of Scale in the World…
Packaged Gas Company of Scale in the World…
$12B+ U.S. Packaged Gases &
Welding Hardgoods
Market
~900
Independents
50%
Airgas
25%
Praxair
Taiyo Nippon Sanso
Air Liquide
Linde
Packaged Gases
$6.5B+
Welding Hardgoods
$5.5B+
•
Air Liquide
•
Air Products
•
Linde
•
Praxair
•
Air Liquide
•
Linde
•
Praxair
•
Taiyo Nippon Sanso
•
Regional Competitors
•
Independents
•
Air Liquide
•
Linde
•
Praxair
•
Taiyo Nippon Sanso
•
Regional Competitors
•
Independents
Safety PPE
$6B+
Other MRO
$50B+
Pipeline & bulk
~$10B
The 100 largest
independents
account for nearly
25% of the
total market

8
8
•
Leader in 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 markets
•
We also produce various gases
–
Fifth largest U.S. producer of atmospheric gases
–
Leading U.S. supplier of liquid CO2 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
…With an Unparalleled Distribution Platform
…With an Unparalleled Distribution Platform
and Significant Production of Gases
and Significant Production of Gases
–
Telesales
–
Catalog
–
eBusiness
8
8

Known Locally Nationwide
Known Locally Nationwide
9
9
~1,100 Locations
•
875+ branches
•
325+ HP fill plants
•
16 ASU’s
•
18 acetylene plants
•
6 liquid CO
2
production plants
•
63 regional spec gas labs
•
8 national spec gas labs
•
6 hardgoods distribution centers
14,000+ Associates
•
~1,500 sales people
(25% specialists)
•
5,000+ drivers
10M+ Cylinders
13,500+ Bulk Tanks
5,000+ Vehicles
Branch / Retail Store / Other
Air Separation Unit (“ASU”)
Hardgoods Distribution Center

10
10
Packaged Gases
Packaged Gases
Bulk Gases
Bulk Gases
Creating Value for Customers
Creating Value for Customers
Through the Right Supply Modes
Through the Right Supply Modes
Cylinders
Cylinders
Dewars
Dewars
MicroBulk
MicroBulk
Bulk,        
Bulk,        
Tube Trailers
Tube Trailers
Size of Supply Mode
Onsite,
Onsite,
Pipeline
Pipeline
•
Our full range of supply modes enables our customers to
optimize their production processes and reduce total costs
10
10

11
11
Hardgoods
Hardgoods
Supply Modes
Supply Modes
6 national hardgoods
distribution centers
•
Drop-ship large and small order
quantities to end customers
•
1-2 day delivery to 95% of U.S.; next-
day delivery to 60% of U.S.
875+ regional company branches
•
Service walk-in customers with
inventory on-hand
•
Deliver to customers on truck routes
or via common carrier
•
Direct to customer from manufacturer
•
Vendor managed inventory (VMI)
11
11

Airgas 2000
Airgas 2000
Airgas 2010
Airgas 2010
Creating operating culture
Building out infrastructure
Repositioning company              
(40+ hub companies)
Early stages of establishing
Strategic Products
Gas/Rent = ~50% of sales
Balance sheet leverage high
Operating culture firmly in place
Scalable infrastructure
12 regional operating companies form our
national distribution platform
11 strategically-aligned companies
complement our core business
Strategic Products established                    
(account for more than 40% of sales)
Gas/Rent = ~65% of sales
Operating efficiency programs
Significant Bulk capabilities
Spec Gas innovation & marketing
Ammonia and Refrigerants offerings
Tech expertise / Engineering capabilities
Demand planning / Buying Centers
Brand management / RADNOR
private label
Comfortable balance sheet leverage
12
12
We Are Stronger Than Ever...
We Are Stronger Than Ever...
12
12

Note: Dollars in millions.
13
13
$27
$41
$109
$196
$191
$190
$197
$236
$256
$314
$397
$489
$666
$746
$665
$50
$145
$139
$62
$38
$79
$194
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Fiscal Year Adjusted EBITDA
13
13
In the midst of the worst recession
since the Great Depression, FY 2010
was Airgas’
only significant annual
EBITDA decline in 22 years
…And Have Delivered Significant
…And Have Delivered Significant
EBITDA Growth Over the Last 22 Years
EBITDA Growth Over the Last 22 Years

14
14
Track Record of Double-Digit Growth
Track Record of Double-Digit Growth
in Revenue, EBITDA and EPS…
in Revenue, EBITDA and EPS…
14
14
Revenue
2001-2009 CAGR
EBITDA *
2001-2009 CAGR
EBITDA * –
Capex
2001-2009 CAGR
Diluted EPS
2001-2009 CAGR
Source: Financials based on company filings calendarized to December year end.
Note: CAGR = Compound Annual Growth Rate
* See attached reconciliation of non-GAAP measures.
Airgas
Air Products
11%
5%
Airgas
Air Products
17%
5%
Airgas
Air Products
15%
5%
Airgas
Air Products
20%
7%

15
15
Actual EPS vs. Consensus EPS Estimates
Source:
FactSet
and
consensus
Wall
Street
estimates
as
of
August
13,
2010.
15
15
…Consistently Meeting or Exceeding
…Consistently Meeting or Exceeding
Consensus Analyst Estimates
Consensus Analyst Estimates
—
Consensus Estimates
Actual
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
Mar-01
Mar-02
Mar-03
Mar-04
Mar-05
Mar-06
Mar-07
Mar-08
Mar-09
Mar-10

16
16
Agenda
Agenda
Slide
Slide
Introduction
2
The Airgas Growth Story
6
Earnings Growth Outlook & 2012 Goals
16
Our Perspective on Valuation
32
Conclusion
45
Appendix
49

17
17
17
17
17
17
17
17
17
17
•
Moderate macro-economic recovery underpins our Same-Store Sales
(“SSS”) growth of ~7% per year
–
Comparable to SSS growth in the prior recovery period
•
As SSS increase, the operating leverage inherent in Airgas business
model has historically translated to a higher EBITDA margin on every
dollar of incremental revenue, and we expect this to continue
•
Business mix is focused on higher-margin activities
–
e.g.
Gas
&
Rent
now
comprises
65%
of
total
sales
versus
55%
1
in
the
prior
recovery period
•
Margin
expansion
is
expected
to
be
further
enhanced
by
continued
focus
on operating efficiencies
•
Investment of nearly $2.5 billion in capex
and acquisitions in the last
three years is not yet fully reflected in current performance
–
Our goal of CY2012 EPS of $4.20+ reflects all of the costs of the SAP
implementation but none of the benefits
17
17
Why We Expect a Clear Path to EPS of
Why We Expect a Clear Path to EPS of
$4.20+ by CY 2012…
$4.20+ by CY 2012…
1
CY2002.

18
18
18
18
18
18
18
18
18
18
18
18
What Happened in the Last Recovery?
What Happened in the Last Recovery?
* See attached reconciliations of non-GAAP measures.
Note: “CAGR”
= Compound Annual Growth Rate.
18% CAGR

19
19
19
19
Source: Airgas Management and Wall Street research.
* See attached reconciliations of non-GAAP measures.
Airgas’
earnings recovery is clearly underway and reinforces our confidence
in our CY2012 EPS goal of $4.20+
We have exceeded the high end of
our guidance and consensus
estimates by 15%
and
Q1 2010 by 26%
Strong operating momentum    
is reflected in our 7+%
raise in    
guidance
1Q11 has resulted in the highest
EBITDA margin in ARG    
history and is already                      
within our
CY’12 Goals
1Q FY2011 –
Adj. EPS*
FY2011 –
Adj. EPS*
EBITDA Margin*
Announced
First Fiscal Quarter
Revised Guidance
Actual 1QF11
CY12 Goal
Recovery is Demonstrated
Recovery is Demonstrated
in Our 1Q FY2011 Earnings
in Our 1Q FY2011 Earnings

20
20
20
20
20
20
20
20
20
20
•
Five key factors drive our earnings goal of $4.20+ in
CY 2012
I.
Expected recovery of Same-Store Sales growth
II.
Demonstrated operating leverage in the business
model
III.
Continued focus on cutting operating costs
IV.
Maintaining higher margin business mix
V.
Realization of anticipated returns on capital
investments made in recent years
20
20
Expected Earnings Growth and          
Expected Earnings Growth and          
Strong Cash Flow Are Projected to
Strong Cash Flow Are Projected to
Underpin Our Shareholder Value Creation
Underpin Our Shareholder Value Creation

21
21
21
21
21
21
21
21
21
21
21
21
21
21
21
21
I. Our Projections Assume SSS Growth
I. Our Projections Assume SSS Growth
Comparable to the Last Expansion
Comparable to the Last Expansion
21
21
Calendar Year Same-Store Sales Growth Rate
Note: Represents calendar year ended December 31.  2010 Non-Tech Industrial Production Growth Rate and ISM Index represent year-to-date data through June.
¹
The ISM Purchasing Managers’
Index is a measure of the overall economic health of the manufacturing sector; a value above or below 50 represents an
expansion or a contraction, respectively.
2010-2012 Avg: ~7%
Airgas Calendar Year Sales
2003-2005 Avg: 6%
(2)%
0 %
8 %
11 %
10 %
7 %
6 %
(16)%
30.0
40.0
50.0
60.0
70.0
(20)%
(10)%
0 %
10 %
20 %
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011E
2012E
-
Tech IP
Non-Tech IP Growth Rate
ISM Index¹
$1.8
$1.8
$2.2
$2.7
$3.1
$3.8
$4.4
$3.9
$5.2+
$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
2002
2003
2004
2005
2006
2007
2008
2009
2012E

14%
24%
23%
19%
0 %
10 %
20 %
30 %
2003-2005 Avg
2006
2007
2008
2009
2010-2012 Avg
22
22
22
22
22
22
22
22
22
22
22
22
22
22
II. SSS Growth Drives Substantial EBITDA*
II. SSS Growth Drives Substantial EBITDA*
Growth Due to Operating Leverage
Growth Due to Operating Leverage
Calendar Year Same-Store Sales Growth Rate
Operating Leverage Drives Improved Fall Through
1
(Change in EBITDA* / Change in Sales)
* See attached reconciliations of non-GAAP measures.
1
Fall through has been adjusted for special items.
2
Not meaningful due to negative change in sales in 2009.
Not
Meaningful ²
22+%
6 %
10 %
7 %
6 %
(16)%
(20)%
(10)%
0 %
10 %
20 %
2003-2005 Avg
2006
2007
2008
2009
2010-2012 Avg
~7%

23
23
23
23
23
23
23
23
23
23
III. Operating Leverage Expected to be  
III. Operating Leverage Expected to be  
Further Enhanced by Ongoing Cost Savings
Further Enhanced by Ongoing Cost Savings
•
Achieved original goal of aggregate $25M annual run-rate cost savings
–
Target announced in September 2007
–
Achieved three quarters ahead of schedule in December 2009
•
In December 2009, we announced incremental savings target of $30M to be
achieved by CY 2012
–
Logistics, plant studies and cylinder testing drive savings
•
Cost savings after 2012 expected to be further enhanced by realization of SAP
benefits
Actual Savings
Through CY09
CY10
CY11
CY12
Expected
Cumulative Savings
Through CY12
Routing logistics
$7M+
$5M
$6M
$7M
$25M+
Cylinder testing
$6M+
$2M
$2M
$1M
$11M+
Freight
$5M+
$1M
$1M
$1M
$8M+
Plant studies
$3M+
$2M
$1M
$1M
$7M+
Fuel
$2M+
-
-
-
$2M+
Indirect spend
$2M
-
-
-
$2M+
Total
$25M+
$10M
$10M
$10M
$55M+
Expected Incremental Savings CY10-CY12

24
24
24
24
24
24
24
24
24
24
IV. Business Mix Improvement              
IV. Business Mix Improvement              
Produces Higher Margins
Produces Higher Margins
Gas/Rent
Gas/Rent
55%
55%
Hardgoods
Hardgoods
45%
45%
Last Recession¹
CY 2009
CY 2009
CY 2012E
CY 2012E
•
Gas/Rent
%
of
Sales:
Significantly
higher
margins
than
Hardgoods
•
RADNOR
Private
Label
%
of
Hardgoods
Sales:
Gross
margins
1.5-2.0x
comparable
OEM
products
•
Atmospheric
Gas
Production
%
of
Total
Atmospheric
Gas
Consumption:
Improves
sourcing
position
to
achieve
lowest
landed
cost
and
higher
margins
Gas/Rent
Gas/Rent
65%
65%
Hardgoods
Hardgoods
35%
35%
Gas/Rent
Gas/Rent
65%
65%
Hardgoods
Hardgoods
35%
35%
Sales
$1.7B
$1.7B
$3.9B
$3.9B
$5.2B+
$5.2B+
RADNOR Private Label
(% of Hardgoods
Sales)
~7%
~7%
7%
~12%
~12%
12%
12-15%
Atmospheric Gas Production
(% Total Atmos. Consumption)
10%
10%
60%+
60%+
65%+
65%+
EBITDA Margin*
14%
14%
17%
17%
18.0-18.5%
1
CY2002.
* See attached reconciliations of non-GAAP measures.

25
25
25
25
25
25
25
25
25
25
V. Substantial Investments Since Last Cycle
V. Substantial Investments Since Last Cycle
Should Generate Higher Margins
Should Generate Higher Margins
•
Distribution Footprint:
established national distribution platform, leveraging customer
density, enabling service of large multi-location customers
•
Production Capacity:
increased ASU production capacity has enhanced our sourcing
position
to
achieve
the
lowest
landed
product
cost
1
1
Landed
product
cost
is
the
full
cost
of
a
product
from
sourcing
up
until
the
point
of
sale.
*
See
attached
reconciliations
of
non-GAAP
measures.
Last
Recession
CY’02
CY’09
Goals
CY’12
Cylinders (in millions)
5+
10+
Bulk Tanks
6,000+
13,500+
Locations
~800
~1,100
ASU Production Capacity (liquid tons per day)
475
6,700
ASU Capacity Utilization
~87%
~70%
Revenue per Employee (in thousands)
$200
$279
Adjusted EBITDA Margin*
13.6%
17.3%
18%-18.5%
Adjusted EPS*
$0.94
$2.67
$4.20+
Substantial
Investments
Operational
Efficiency

26
26
26
26
26
26
Source: Airgas Management.
* See attached reconciliations of non-GAAP measures.
First Quarter Fiscal 2011 Already Within the
First Quarter Fiscal 2011 Already Within the
Range of Our CY 2012 EBITDA Margin Goal
Range of Our CY 2012 EBITDA Margin Goal
EBITDA  Margin

27
27
27
27
27
27
Source: Airgas Management.
* See attached reconciliations of non-GAAP measures.
On Track To Achieve CY 2012 EPS Goal
On Track To Achieve CY 2012 EPS Goal
•
1H CY2010 Adjusted EPS* increased +13% vs. 1H CY2009
•
1Q FY2011 Adjusted EPS* increased +26% vs. 1Q FY2010
$ 3.30 -
$ 3.15
$ 3.05 -
$ 2.95
18-23% Increase
16% CAGR
$4.20+
$2.67
7 quarters between
7 quarters between
March 31, 2011 and
March 31, 2011 and
December 31, 2012
December 31, 2012
CY 2009
Actual
Original
FY11 Guidance
(12 Mos. Ended
March 2011)
Revised
FY11 Guidance
(12 Mos. Ended
March 2011)
CY 2012
Goal

28
28
28
28
28
28
* See attached reconciliations of non-GAAP measures.
Note: “CAGR”
= Compound Annual Growth Rate.
As a Result, We Expect EPS Growth
As a Result, We Expect EPS Growth
Consistent with Past Recoveries
Consistent with Past Recoveries
$2.20
$2.60
$3.00
$3.40
$3.80
$4.20
$4.60
Dec
-09
Dec
-10
Dec
-11
Dec
-12
Calendar Year EPS 2009-2012
$0.80
$0.90
$1.00
$1.10
$1.20
$1.30
$1.40
$1.50
$1.60
Dec
-02
Dec
-03
Dec
-04
Dec
-05
Calendar Year Adjusted EPS* 2002-2005
$4.20+
(CY12 Goal)
$2.67*
$1.53
$0.94
16% CAGR
18% CAGR
Adj. EPS*
EPS
FY11
Guidance*
(Updated)
$3.30
$3.15

29
29
29
29
29
29
29
29
29
29
29
29
29
29
* See attached reconciliations of non-GAAP measures.
Case 1: FY05
(Goals Published May 2001 Analyst Meeting)
Case 2: FY08
(Goals Published November 2004 Analyst Meeting)
Case 3: CY08
(Goals Represent CY08 Component of FY11 Goals
Published September 2007 Analyst Meeting)
We Have a Track Record of Meeting or
We Have a Track Record of Meeting or
Beating Our Mid-Term Goals
Beating Our Mid-Term Goals
Performing well toward FY11 goals
prior to recession
$3.0B
$315M
10-11%
11-12%
$4.0B
$476M
11.9%
13.2%
Sales
Op. Profit
Op. Margin
ROC*
FY08 Goals
FY08 Results
$4.3B
$541M
12.1%-
12.6%
13.2%-
13.7%
$4.4B
$541M
12.2%
13.5%
Sales
Op. Profit
Op. Margin
ROC*
CY08 Goals
CY08 Results
$2.0B
$200M
10.0%
10.0%
$2.4B
$209M
8.8%
10.3%
Sales
Op. Profit*
Op. Margin*
ROC*
FY05 Goals
FY05 Results

30
30
30
30
30
30
30
30
30
30
Note: Further benefits expected to be realized from ongoing SAP implementation.
In Addition, Returns from Significant Recent
In Addition, Returns from Significant Recent
Investments Have Yet to be Fully Realized...
Investments Have Yet to be Fully Realized...
($ in millions)
Total Capital Deployed
Since January 1, 2007
ASUs (Carrollton, New Carlisle)
$ 80
SAP Implementation to Date
62
CO2 Plants
25
Plant Upgrades / Consolidation
100
Other Capital Expenditures
344
Total Capital Expenditures
$ 990
Linde Bulk Assets
$ 495
Linde Packaged Gas Assets
310
Other Acquisitions
563
Total Acquisitions
$ 1,368
Total Capital Deployed
$ 2,358
Capital
Expenditures
Acquisitions
Total Capital
Deployed
Cylinders & Bulk Tanks
379

31
31
31
31
31
31
Note: Dollars in millions.
*See attached reconciliations of non-GAAP measures.
Air Products’
Initial Proposal
...While Airgas Has Continued to Repay Debt
...While Airgas Has Continued to Repay Debt
and Build Value for Shareholders
and Build Value for Shareholders

32
32
Agenda
Agenda
Slide
Slide
Introduction
2
The Airgas Growth Story
6
Earnings Growth Outlook & 2012 Goals
16
Our Perspective on Valuation
32
Conclusion
45
Appendix
49

I.
Historical average next-twelve-months (NTM) trading multiples of Airgas
–
Airgas’
5-year median NTM multiple is 16.7x P/E¹, which includes negative impact of recession
–
Over the past 5 years, Airgas’
NTM
P/E has averaged:
17.7x when GDP growth is between 0% and 3% (current 2011E consensus of 2.8%) ²
17.0x when ISM Index is between 50 and 55 and 17.2x when ISM index is 55 or greater²
II.
Increase
in
peer
equity
values
and
trading
multiples
since
Air
Products’
February
4
proposal
–
Peers’
share prices have increased by 16% to 18%
–
Peers’
multiples have increased by median of 8% on P/E and 9% on EV/EBITDA³
III.
We
believe
Airgas
shareholders
are
not
receiving
adequate
value
for
Air
Products’
estimated
synergies
–
At
Air
Products’
$250
million
announced
value,
synergies
are
worth
over
$20
per
Airgas
share
4
–
Prior to February 4 proposal, Air Products indicated to Airgas that $350 million of synergies could be
achieved
IV.
Air Products can significantly increase its offer price while maintaining an accretive transaction post-
synergies
–
At $63.50 offer, Air Products expects transaction to be immediately accretive to both GAAP and
Cash EPS even though full synergies not expected until after year 2
V.
Airgas’
strong future growth prospects and significant leverage to recovering economy
VI.
Airgas’
scarcity value as the largest, most valuable packaged gas business and the only remaining
independent packaged gas company of scale in the world
Building Blocks of Value –
Building Blocks of Value –
Why We Believe           
Why We Believe           
Air Products’
Air Products’
Offer Is Inadequate and Opportunistic
Offer Is Inadequate and Opportunistic
33
33
¹  Represents five-year median multiple as of February 4, 2010, prior to date of announcement of the Air Products offer, based on consensus  analyst estimates.
²  Represents U.S. real quarterly GDP growth, ISM Purchasing Managers Index, and five-year average NTM consensus P/E multiples as of February 4, 2010.
3
Based on CY2011 consensus estimates.  Peer set comprises Praxair, Air Liquide, and Linde. 
4
Refer to slide 42.
Source: FactSet consensus estimates, Bloomberg market data

34
34
34
34
34
34
34
34
34
34
34
34
Wall Street Analysts View Our FY11 Guidance
Wall Street Analysts View Our FY11 Guidance
and Our $4.20+ EPS Goal in CY12 Favorably
and Our $4.20+ EPS Goal in CY12 Favorably
•
FY11 Consensus EPS = $3.26, within our FY11 Adjusted EPS* guidance range of $3.15 to $3.30
•
FY13 Consensus EPS = $4.25, growth of 14.8% over FY12 Consensus EPS of $3.70
–
Analysts generally don’t include future acquisitions in estimates
–
Our FY13 encompasses three quarters of CY12
•
“Management
also
reaffirmed
its
goal
of
achieving
CY’12
EPS
of
$4.20,
and
indicated
it
is
on
a
trajectory
to
meet
or
exceed
this
even
absent
any
M&A
contribution.
When
this
goal
was
first
posited,
acquisition
was
seen
as
a
component
of
getting
there,
but
margin/execution
has
made
that
moot.”
–
BB&T Capital Markets, July 22, 2010
•
“Including
acquisitions,
we
believe
earnings
power
for
ARG
could
approach
$4.50
per
share
by
FY13.
While
we
believe
the
company's
internal
goal
of
earnings
of
$4.20
per
share
in
calendar
2012
is
certainly
attainable
given
significant
leverage
to
volume
recovery
and
ongoing
productivity
initiatives,
it
does
not
appear
to
be
conservative
to
us
given
the
need
to
generate
high
single-digit
organic
sales
growth.”
–
KeyBanc
Capital Markets, July 22, 2010
•
“ARG’s
CY12
EPS
guidance
of
$4.20
looks
increasingly
attainable.
APD’s
recently
raised
$63.50/share
hostile
bid
looks
less
attractive
to
ARG
shareholders
given
the
strong
results
and
lower
net
debt.”
–
First Analysis Securities, July 22, 2010
•
“For
FY12
we
are
forecasting
EPS
of
$3.82
which
management
has
not
provided
guidance
for
although
they
have
expressed
an
EPS
goal
of
$4.20
for
CY12
which
would
include
4QFY12
and
the
following
three
quarters.
An
acceleration
in
end
market
recovery
in
the
next
year
would
produce
upside
to
our
estimate
and
management's
guidance;
we
believe
both
reflect
a
steady
albeit
modest
ongoing
recovery.
For
FY12
we
are
looking
for
further
top-line
growth
of
9%
as
the
sales
initiatives
that
are
currently
being
implemented
gain
full
traction.”
–
Piper Jaffray
& Co., July 22, 2010
Note: Permission to use quotations neither sought nor obtained.
* See attached non-GAAP reconciliations.

5 x
10 x
15 x
20 x
25 x
Feb-2000
Feb-2001
Feb-2002
Feb-2003
Feb-2004
Feb-2005
Feb-2006
Feb-2007
Feb-2008
Feb-2009
Feb-2010
Median P/E
2/2000 - 2002
15.1
x
2003 - 2005
16.9
x
2006 - 2008
17.5
x
2009 - 2/2010
14.8
x
Last 5 Years
16.7
x
35
35
35
35
35
35
35
35
35
35
35
35
35
35
35
35
Airgas’
Next
Twelve
Months
P/E
Multiple
for
10
Years
Before
Air
Products’
Unsolicited
Proposal
Source: Bloomberg market data as of February 4, 2010, consensus analyst estimates
Timing Matters: Our Trading History
Timing Matters: Our Trading History
Demonstrates Air Products’
Demonstrates Air Products’
Opportunism
Opportunism
Airgas’
Stock
Price
for
10
Years
Before
Air
Products’
Unsolicited
Proposal
$43.53
$ 0
$ 15
$ 30
$ 45
$ 60
$ 75
Feb-2000
Feb-2001
Feb-2002
Feb-2003
Feb-2004
Feb-2005
Feb-2006
Feb-2007
Feb-2008
Feb-2009
Feb-2010

36
36
36
36
36
36
36
36
36
36
Source: Bloomberg consensus estimates as of August 13, 2010.
¹
Data indexed to January 2006.
Timing Matters:
Timing Matters:
U.S. Economic Recovery is Just Beginning…
U.S. Economic Recovery is Just Beginning…
2.7 %
1.9 %
0.0 %
(2.6)%
3.0 %
2.8 %
3.1 %
2006
2007
2008
2009
2010E
2011E
2012E
U.S. GDP Growth
2.9 %
2.7 %
0.5 %
(4.1)%
1.2 %
1.3 %
1.6 %
2006
2007
2008
2009
2010E
2011E
2012E
European GDP Growth
50
60
70
80
90
100
110
120
Jan-06
Feb-07
Apr-08
May-09
Jul-10
U.S. Industrial Indicators Since 2006¹
ISM Manufacturing Index
Non-Tech Industrial Production
4.6 %
4.6 %
5.8 %
9.3 %
9.6 %
9.1 %
8.1 %
2006
2007
2008
2009
2010E
2011E
2012E
U.S. Unemployment

37
37
37
37
37
37
37
37
37
37
37
37
37
37
37
37
…and Our Multiple Strengthens in Periods of
…and Our Multiple Strengthens in Periods of
Economic Growth -
Economic Growth -
GDP                        
GDP                        
37
37
EV / NTM EBITDA
Price / NTM EPS
Q-o-Q GDP Growth
Airgas Multiple
37
37
3.0x
6.0x
9.0x
12.0x
Feb-05
Jan-06
Dec-06
Nov-07
Oct-08
Sep-09
Aug-10
(8.0%)
(4.0%)
0.0%
4.0%
8.0%
6.0x
12.0x
18.0x
24.0x
Feb-05
Jan-06
Dec-06
Nov-07
Oct-08
Sep-09
Aug-10
(8.0%)
(4.0%)
0.0%
4.0%
8.0%
8.5x
8.4x
7.5x
7.0x
(3%) or
less
(3%) -
0%
0% -
3%
3% or
greater
12.4x
14.4x
17.7x
17.8x
(3%) or
less
(3%) -
0%
0% -
3%
3% or
greater
Average
Multiple
(1)
Average
Multiple
(1)
Source:
FactSet
estimates
as
of
August
13,
2010.
Gross
Domestic
Product,
Real
%
Change
P/P
–
United
States
Quarterly.
(1) Represents 5 years of data prior to February 4, 2010.
February 4, 2010
Proposal
February 4, 2010
Proposal

38
38
38
38
38
38
38
38
38
38
38
38
38
38
38
38
38
38
EV / NTM EBITDA
Price / NTM EPS
ISM Index
Airgas Multiple
…and Our Multiple Strengthens in Periods of
…and Our Multiple Strengthens in Periods of
Economic Growth -
Economic Growth -
ISM
ISM
38
38
3.0x
6.0x
9.0x
12.0x
Feb-05
Jan-06
Dec-06
Nov-07
Oct-08
Sep-09
Aug-10
30
40
50
60
70
6.0x
12.0x
18.0x
24.0x
Feb-05
Jan-06
Dec-06
Nov-07
Oct-08
Sep-09
Aug-10
30
40
50
60
70
80
8.2x
8.1x
8.0x
6.5x
40 or
less
40-50
50-55
55 or
greater
11.1x
15.8x
17.0x
17.2x
40 or
less
40-50
50-55
55 or
greater
Average
Multiple
(1)
Average
Multiple
(1)
February 4, 2010
Proposal
February 4, 2010
Proposal
Source:  FactSet estimates as of August 13, 2010.  ISM Manufacturing, Purchasing Managers Index- United States.
(1) Represents 5 years of data prior to February 4, 2010.

Source: Factset
and company filings.
Note: Current multiples as of August 13, 2010.
(1) Next Twelve Months
(2) Represents median multiple of an equally-weighted index comprising Praxair, Air Liquide, and Linde.
Although Lagging Pre-Recession Levels, Sector Trading
Although Lagging Pre-Recession Levels, Sector Trading
Multiples Have Significantly Increased Since Air Products’
Multiples Have Significantly Increased Since Air Products’
February 4 Proposal
February 4 Proposal
Calendar 2010E EV / EBITDA
39
39
Calendar 2011E EV / EBITDA
Calendar 2012E EV / EBITDA
Calendar 2010E P / EPS
Calendar 2011E P / EPS
Calendar 2012E P / EPS
Current Median: 9.0x
2/4/10 Median: 8.4x
Current Median: 8.4x
2/4/10 Median: 7.7x
Current Median: 7.7x
2/4/10 Median: 7.3x
Current Median: 17.0x
2/4/10 Median: 15.9x
Current Median: 15.5x
2/4/10 Median: 14.4x
Current Median: 14.0x
2/4/10 Median: 13.4x
Multiple as of February 4, 2010
Current Multiple
39
39
8%
9%
5%
7%
8%
5%
10.6x
9.0x
8.1x
8.0x
8.4x
9.4x
PX
AL
LIN
9.8x
8.4x
7.6x
8.5x
7.7x
7.4x
PX
AL
LIN
9.1x
7.7x
7.1x
7.8x
7.3x
7.1x
PX
AL
LIN
18.6x
17.0x
15.6x
16.1x
15.9x
14.9x
PX
AL
LIN
16.5x
15.5x
13.9x
14.3x
14.4x
13.0x
PX
AL
LIN
15.0x
14.0x
12.2x
12.8x
13.4x
12.0x
PX
AL
LIN
3-Year Median
NTM¹
P / EPS
Pre-Lehman Filing
on Sep. 15, 2008
Peers²: 17.8x
3-Year Median
NTM¹
EV / EBITDA
Pre-Lehman Filing
on Sep. 15, 2008
Peers²: 9.1x

$20
$30
$40
$50
$60
$70
$80
Aug-09
Sep-09
Oct-09
Nov-09
Dec-09
Jan-10
Feb-10
Air Products’
Air Products’
February 4 Proposal Followed a
February 4 Proposal Followed a
Temporary Market Anomaly
Temporary Market Anomaly
Source: Bloomberg market data as of February 4, 2010
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)
$43.53
40
40
40
40

Source: Bloomberg market data as of August 13, 2010
Note:
Share
price
changes
of
Praxair,
Air
Liquide,
and
Linde
taken
between
February
5,
2010,
the
date
Air
Products’
$60
proposal
was
made
public,
and
August
13,
2010.
Share
price
changes
denominated
in
the
local
currencies.
1
Average
change
in
share
price
of
Praxair,
Air
Liquide,
and
Linde
between
February
5,
2010,
the
date
Air
Products’
$60
proposal
was
made
public,
and
July
8,
2010,
the
date
of
Air
Products’
offer
of
$63.50.
Share
price
changes
denominated
in
the
local
currencies.
41
41
41
41
Air Products’
Air Products’
Offer “Premium”
Offer “Premium”
Does Not Adequately Reflect the                     
Does Not Adequately Reflect the                     
Growth in Peer Equity Values
Growth in Peer Equity Values
Price
Change
Since
Air
Products’
Initial
Public
Proposal
2.4%
5.8%
11.7%
15.9%
17.9%
18.4%
Increase in APD
Proposal from $62 to
$63.50
Increase in APD
Proposal from $60 to
$63.50
Peer Equity Growth
(as of $63.50 offer date)¹
Linde
Praxair
Air Liquide

42
42
42
42
42
42
42
42
We Believe Airgas Shareholders Are                     
We Believe Airgas Shareholders Are                     
Not Being Adequately Compensated for               
Not Being Adequately Compensated for               
the Value of Air Products’
the Value of Air Products’
Estimated Synergies
Estimated Synergies
•
Air Products has stated that an acquisition of Airgas would have
“substantial cost synergies yielding $250 million run-rate by the end of
year two”
•
However, prior
to
February
4
proposal,
Air
Products
indicated
to
Airgas
that $350 million of synergies could be achieved
•
Air Products has also publicly estimated cash costs of implementing
synergies to be “somewhere in the $350 million to $400 million range”
•
$250M of
annual
synergies
and
$400M
implementation
costs
implies
a
value of synergies in excess of $20 per Airgas share¹
Source: Air Products’
“Offer to Acquire Airgas”
presentation dated February 5, 2010, and associated transcript
¹
Assumes that synergies are capitalized at median peer EV / CY2010E EBITDA multiple of 9.0x.  9.0 x $250M in annual synergies, less $400M in costs to
implement, equals $1.85B, divided by total diluted share count based on the most recent Air Products offer price of $63.50 per share.

43
43
43
43
43
43
43
43
43
43
43
43
43
43
The Industrial Gas Sector
The Industrial Gas Sector
has Steadily Consolidated…
has Steadily Consolidated…
Major Industrial Gas Players in 2000
Company
AGA
Air Liquide
Air Products
Airgas
The BOC Group
Hede Nielsen
Japan Air Gases
Linde
Linweld
Messer Griesheim
Nippon Sanso
Praxair
Taiyo Toyo Sanso
Valley National Gases
Company
Enterprise Value ($bn)
Air Liquide
$38
Praxair
33
Linde
29
Air Products
20
Airgas
7
Taiyo Nippon Sanso
6
Major Industrial Gas Players in 2010
Source: Bloomberg market data as of August 13, 2010, public filings

44
44
44
44
44
44
44
44
•
As an independent company, Airgas has demonstrated a strong track
record of earnings growth and stock price appreciation
–
Strongly positioned to grow leading share in packaged gas
–
Also strongly positioned to grow share in bulk gases
•
As a result, we believe that Airgas is well positioned to continue to
deliver shareholder value
–
Delivering robust SSS growth
–
Continuing to deliver operating efficiencies
–
Proven history of successful acquisition integration
•
The Airgas Board understands the unique strategic value of the
company
...Airgas Represents
...Airgas Represents
Significant Strategic Value
Significant Strategic Value

45
45
Agenda
Agenda
Slide
Slide
Introduction
2
The Airgas Growth Story
6
Earnings Growth Outlook & 2012 Goals
16
Our Perspective on Valuation
32
Conclusion
45
Appendix
49

46
46
46
46
46
46
46
46
•
Air Products’
proposal would amend Airgas’
bylaws to require Airgas to hold
future Annual Meetings in January
–
Requires Airgas to accelerate its 2011 meeting to elect directors on January
18, 2011 (and all subsequent meetings in January of each year)
•
We believe that implementation of Air Products’
proposals would prevent Airgas’
shareholders from benefiting from the Company’s earnings recovery and
resulting value creation
Full text of the Schedule TO text that was subsequently deleted:
“Given that the economy is just beginning to emerge from recession, Air Products concluded
that the timing is ideal because the combined company would be able to take full advantage of the substantial growth potential, world-class competencies and
synergies unique to this transaction.”
-
Air Products Schedule TO dated February 11, 2010 (deleted in Schedule 14A dated June 16, 2010)
“Given that the economy is just beginning to
“Given that the economy is just beginning to
emerge from recession, Air Products concluded
emerge from recession, Air Products concluded
that the timing is ideal...”
that the timing is ideal...”

47
47
47
47
47
47
47
47
•
Peter McCausland
–
Chairman and CEO of Airgas since 1987
–
Airgas Director since 1986 IPO
–
Beneficial ownership of ARG nearly 8.6 million shares*
–
4,201%
Total
Shareholder
Return
since
joining
the
Airgas
Board
1
•
W. Thacher
Brown
–
Chairman, President and a director of 1838 Investment Advisors LLC from 1988 until
retirement in 2004
–
Airgas Director since August 7, 1989
–
Beneficial ownership of ARG nearly 192,000 shares*
–
1,409%
Total
Shareholder
Return
since
joining
the
Airgas
Board
1
•
Richard C. Ill
–
President, CEO, and a director of Triumph Group (NYSE: TGI) since 1993
–
Airgas Director since August 4, 2004
–
Beneficial ownership of ARG 48,500 shares*
–
110%
Total
Shareholder
Return
since
joining
the
Airgas
Board
1
* Source: 2010 proxy statement.
1
Total Shareholder Returns are calculated as share price plus dividends reinvested, measured through the market close on February 4, 2010, prior to date of
announcement of the Air Products offer. Returns are split-adjusted and are measured since the later of the director’s start date on Airgas Board or IPO.
Airgas’
Airgas’
Nominees Are Keenly Aware
Nominees Are Keenly Aware
of Their Fiduciary Duties
of Their Fiduciary Duties
Eight of our Board members are independent and our Board has significant
equity ownership, which we believe closely aligns the existing Airgas Board
with Airgas’
shareholders’
interests

48
48
48
48
48
48
48
48
•
While Air Products' nominees may not be controlled by Air Products, we believe
their views could be colored by their relationship with Air Products
•
To consider strategies other than the Air Products offer, we believe it would be in
the best interests of our stockholders if our directors are not associated in any
way with Air Products
•
If shareholders vote for Air Products’
bylaw proposals, they could reduce Airgas’
ability to create stockholder value and determine strategic direction
We recommend that you discard any Gold proxy cards
you receive and promptly vote the WHITE proxy card
“FOR”
the three highly qualified Airgas Directors and
“AGAINST”
Air Products’
proposed By-Law amendments
We Believe Air Products’
We Believe Air Products’
Nominees and
Nominees and
Proposals Would Deprive Airgas
Proposals Would Deprive Airgas
Shareholders of Full Value
Shareholders of Full Value

49
49
Agenda
Agenda
Slide
Slide
Introduction
2
The Airgas Growth Story
6
Earnings Growth Outlook & 2012 Goals
16
Our Perspective on Valuation
32
Conclusion
45
Appendix
49

Airgas’
Airgas’
Acquisition History vs. Non-Tech IP
Acquisition History vs. Non-Tech IP
1988-Present
1988-Present
50
50
$0
$100
$200
$300
$400
$500
$600
-10%
-9%
-8%
-7%
-6%
-5%
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
FY88
FY89
FY90
FY91
FY92
FY93
FY94
FY95
FY96
FY97
FY98
FY99
FY00
FY01
FY02
FY03
FY04
FY05
FY06
FY07
FY08
FY09
FY10
S
a
l
e
s
A
c
q
u
i
r
e
d
(
i
n
m
i
l
l
i
o
n
s
)
N
o
n
-
T
e
c
h
I
P
a
n
d
G
D
P
G
r
o
w
t
h
Sales Acquired
Non-Tech IP
Refron
BOC Packaged
Linde
Bulk
Linde
Packaged
Air Products Packaged

51
51
Airgas’
Airgas’
Superior Track Record
Superior Track Record
in Executing Acquisitions
in Executing Acquisitions
51
51
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 through January 2010
(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.

52
52
52
52
Total Shareholder Returns outperforming
the S&P 500
Since
1/1/1987,
#26
highest
out
of
500
(Top
5%)
(b)
3-year returns +22%
5-year returns +89%
10-year returns +516%
Officer and Director compensation
practices favorable to peers
Incentive and equity based comp for officers
Equity component to Director comp
No repricing
of options
Officer and Director stock beneficial
ownership
11.9% (#28 highest out of S&P 500)
Employee compensation leveraged,
consistent
Simple options; gainsharing
plans
Incentive-based components at all levels
Clean balance sheet
No material legacy liabilities
No material contingent liabilities
Strong cash flow
Free
Cash
Flow
(c)
$411
million
in
FY10
Cash
from
Operations
(c)
$648
million
in
FY10
(20% CAGR since FY01)
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.
(c)
See
attached
reconciliations
of
non-GAAP
measures.
A History of Value Creation
A History of Value Creation
and Alignment with Shareholders
and Alignment with Shareholders

53
53
53
53
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
* See attached reconciliations of non-GAAP measures
Note: “CAGR”
= Compound Annual Growth Rate
$0
$100
$200
$300
$400
$500
$600
$700
FY01
FY02
FY03
FY04
FY05
FY06
FY07
FY08
FY09
FY10
Maint. Capex
(~3%
of Sales)
Growth Capex
Free
Cash
Flow
Cash from
Operations*
Total Capex*
$411M
$66M
20% CAGR
in
Cash from
Operations*

54
54
54
54
54
54
54
54
(in millions)
2009
2001
CAGR
Net earnings (loss)
213
$                  
(18)
$                   
Cumulative effect of change in accounting principle
-
                     
59
                      
Earnings before the cumulative effect of a change
  in accounting principle
213
                    
41
                      
Plus:
Income Taxes
136
                    
26
                      
Equity in earnings of unconsolidated subsidiary
-
                     
(3)
                       
Interest expense, net
70
                      
48
                      
Discount on securitization of trade receivables
6
                        
5
                        
Loss on the extinguishment of debt
9
                        
-
                     
Other (income) expense, net
(1)
                       
(1)
                       
Depreciation
210
                    
62
                      
Amortization
22
                      
12
                      
Multi-employer pension plan withdrawal charge
7
                        
-
                     
Adjusted EBITDA
672
                    
190
                    
17%
Capital expenditures
(261)
                   
(59)
                     
Adjustments to capital expenditures:
   Proceeds from the sale of plant and equipment
11
                      
3
                        
   Operating lease buyouts
2
                        
-
                         
   Adjusted Capital Expenditures
(248)
                   
(56)
                     
Adjusted EBITDA less Adjusted Capital Expenditures
424
$                 
134
$                 
15%
Twelve Months Ended
December 31,
The Company believes this presentation of the cumulative average growth rates ("CAGR") of adjusted EBITDA and adjusted
EBITDA less adjusted capital expenditures helps investors better assess the Company's growth.  Non-GAAP metrics 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 and adjusted capital expenditures metrics may be
different from adjusted EBITDA and adjusted capital expenditures metrics provided by other companies.
Non-GAAP Reconciliations:
Non-GAAP Reconciliations:
Adjusted EBITDA and Adjusted EBITDA Less Capital Expenditures
Adjusted EBITDA and Adjusted EBITDA Less Capital Expenditures

55
55
55
55
55
55
55
55
55
55
Fiscal Year Ended
March 31, 2005
Sales
2,367,782
$                   
Operating Income
202,454
                       
Adjustment:
Acquisition integration costs
6,400
                           
Adjusted Operating Income
208,854
$                     
Adjusting Operating Margin
8.8%
                              
The Company believes the above adjusted operating income and adjusted operating margin computations
help investors assess the Company’s operating performance without the impact of charges associated with
the integration of major acquisitions. Non-GAAP metrics 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 operating income and adjusted operating margin
metrics may be different from the adjusted operating income and adjusted operating margin metrics
provided by other companies.
Non-GAAP Reconciliations:
Non-GAAP Reconciliations:
Adjusted
Adjusted
Operating
Operating
Income
Income
and
and
Adjusted
Adjusted
Operating
Operating
Margin
Margin
–
–
FY2005
FY2005

56
56
56
56
56
56
Calendar Year
(In thousands)
2005
2008
2008
Operating Income - Trailing Four Quarters
210,454
$                   
476,146
$                   
541,422
$                    
Five Quarter Average of Total Assets
2,134,362
$               
3,708,389
$               
4,122,411
$                
Five Quarter Average of Securitized Trade Receivables
183,300
                     
310,880
                     
360,000
                      
Five Quarter Average of Current Liabilities (exclusive of debt)
(274,035)
                    
(421,589)
                    
(459,362)
                     
Five Quarter Average Capital Employed
2,043,627
$               
3,597,680
$               
4,023,049
$                
Return on Capital
10.3%
                           
13.2%
                           
13.5%
                            
Fiscal Year Ended March 31,
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 one of the metrics for determining employee compensation.  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 return on capital computation information may be different from the return on
capital computations provided by other companies.
56
56
Non-GAAP Reconciliation:
Non-GAAP Reconciliation:
Return on Capital
Return on Capital

57
57
57
57
57
57
57
57
Three Months Ended
Low
High
June 30, 2010
2009
2005
2004
2003
2002
Earnings per diluted share
3.08
$                        
3.23
$                        
0.76
$                             
2.55
$       
1.48
$       
1.18
$       
1.04
$       
0.82
$       
Adjustments:
Costs related to unsolicited takeover attempt
0.03
                          
0.03
                          
0.03
                               
-
          
-
          
-
          
-
          
-
          
Debt extinguishment charges
0.02
                          
0.02
                          
0.02
                               
0.07
         
-
          
-
          
-
          
-
          
Multi-employer pension plan withdrawal charges
0.02
                          
0.02
                          
0.02
                               
0.05
         
-
          
-
          
-
          
-
          
Legal Settlement
-
                            
-
                            
-
                                
-
          
-
          
-
          
-
          
0.08
         
Restructuring charge (recovery)
-
                            
-
                            
-
                                
-
          
-
          
(0.01)
       
-
          
0.03
         
Insurance gain
-
                            
-
                            
-
                                
-
          
-
          
-
          
(0.02)
       
-
          
Fire Losses
-
                            
-
                            
-
                                
-
          
-
          
-
          
0.02
         
-
          
Acquisition integration costs
-
                            
-
                            
-
                                
-
          
0.01
         
0.03
         
-
          
-
          
Employee separation costs
-
                            
-
                            
-
                                
-
          
0.01
         
-
          
-
          
-
          
Hurricane losses
-
                            
-
                            
-
                                
-
          
0.02
         
-
          
-
          
-
          
Losses from discontinued operations
-
                            
-
                            
-
                                
-
          
0.01
         
-
          
0.01
         
0.01
         
Adjusted earnings per diluted share
3.15
$                        
3.30
$                        
0.83
$                             
2.67
$       
1.53
$       
1.20
$       
1.05
$       
0.94
$       
(Updated Guidance)
Fiscal Year Ending March 31, 2011
Calendar Year
The Company believes that the adjusted earnings per diluted share above provide investors meaningful insight into the Company's earnings trend without the impact of debt extinguishment
charges, multi-employer pension plan withdrawal charges, the settlement of material litigation, restructuring charges, insurance gains, fire losses, significant acquisition integration costs,
employee separation costs, hurricane losses, and losses from discontinued operations.  Non-GAAP metrics 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.
Non-GAAP Reconciliation:
Non-GAAP Reconciliation:
Adjusted Earnings Per Diluted Share
Adjusted Earnings Per Diluted Share

58
58
58
58
58
58
58
58
Three Months Ended
Six Months Ended
(in thousands)
Low
High
2009
2002
June 30, 2010
June 30, 2010
Sales
5,200,000
$      
5,200,000
$      
3,886,671
$       
1,714,527
$    
1,052,656
$                      
2,035,964
$              
Operating Income
648,000
$         
675,000
$         
432,221
$           
142,442
$        
122,751
$                         
204,634
$                   
Adjustments:
Depreciation & Amortization
286,000
            
286,000
            
231,518
             
79,294
            
60,467
                              
121,440
                     
Costs related to unsolicited takeover attempt
-
                      
-
                      
-
                       
-
                    
3,787
                                
27,222
                       
Multi-employer pension plan withdrawal charges
-
                      
-
                      
6,650
                   
-
                    
3,204
                                
3,204
                          
Legal Settlement
-
                      
-
                      
-
                       
8,500
               
-
                                    
-
                              
Restructuring charges
-
                      
-
                      
-
                       
2,700
               
-
                                    
-
                              
Other
-
                      
-
                      
400
                      
-
                    
-
                                    
-
                              
Adjusted EBITDA
934,000
$         
961,000
$         
670,790
$           
232,936
$        
190,209
$                         
356,500
$                   
Adjusted EBITDA Margin
18.0%
                   
18.5%
                   
17.3%
                     
13.6%
                 
18.1%
                                  
17.5%
                            
Calendar Year
2012 Target
The Company believes the above adjusted EBITDA margin computations help investors assess the Company’s operating performance without the impact of depreciation and
amortization and charges associated with the Company’s withdrawal from multi-employer pension plans, costs related to Air Products’ unsolicited takeover attempt, significant legal
settlements and restructuring 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 EBITDA metric may be different from similar metrics provided by other companies.
Non-GAAP Reconciliation:
Non-GAAP Reconciliation:
Adjusted EBITDA Margin
Adjusted EBITDA Margin

59
59
59
59
59
59
59
59
Average
Average
(in thousands)
2003 to 2005
2006
2007
2008
2010E to 2012E
Sales
2,246,184
$              
3,098,086
$              
3,792,509
$              
4,456,256
$              
4,700,000
$              
Change in sales
337,518
$                  
371,006
$                  
694,423
$                  
663,747
$                  
435,000
$                  
Operating Income
201,877
$                  
322,300
$                  
437,733
$                  
541,422
$                  
565,000
$                  
Adjustments:
Depreciation & Amortization
104,021
                    
142,021
                    
179,545
                    
211,885
                    
264,283
                    
Costs related to unsolicited takeover attempt
-
                                
-
                                
-
                                
-
                                
9,074
                        
Multi-employer pension plan withdrawal charge
-
                                
-
                                
-
                                
-
                                
1,068
                        
Restructuring charge (recovery)
(267)
                          
-
                                
-
                                
-
                                
-
                                
Fire Losses
933
                           
-
                                
-
                                
-
                                
-
                                
Acquisition integration costs
1,600
                        
-
                                
10,100
                      
-
                                
-
                                
Employee separation costs
533
                           
-
                                
-
                                
-
                                
-
                                
Hurricane losses
733
                     
-
                            
-
                            
-
                            
-
                            
Adjusted EBITDA
309,431
$                 
464,321
$                 
627,378
$                 
753,307
$                 
839,425
$                 
Change in adjusted EBITDA
47,869
$                    
87,777
$                    
163,057
$                  
125,929
$                  
97,000
$                    
Percentage adjusted EBITDA fall through
14%
                             
24%
                             
23%
                             
19%
                             
22%
                             
Calendar Year
The Company believes that using adjusted EBITDA in its percentage of adjusted EBITDA fall through metric provides investors meaningful insight into the Company's trend of increasing
adjusted EBITDA for every dollar of increased sales without the impact of costs related to the unsolicited takeover attempt, multi-employer pension plan withdrawal charges,
restructuring charges, fire losses, significant acquisition integration costs, employee separation costs and hurricane losses.  Non-GAAP metrics should be read in conjunction with
GAAP financial measures, as non-GAAP measures are merely a supplement to, and not a replacement for, GAAP financial measures.  It should be noted as well that our percentage of
adjusted EBITDA fall through metric may be different from similar metrics provided by other companies.
Non-GAAP Reconciliation:
Non-GAAP Reconciliation:
Adjusted EBITDA Fall Through
Adjusted EBITDA Fall Through

Non-GAAP Reconciliations:
Non-GAAP Reconciliations:
Adjusted Debt and Adjusted EBITDA –
Adjusted Debt and Adjusted EBITDA –
Quarterly
Quarterly
60
60

Non-GAAP Reconciliation:
Non-GAAP Reconciliation:
Adjusted
Adjusted
EBITDA
EBITDA
FY89-FY10
FY89-FY10
61
61
(In thousands)
FY89
FY90
FY91
FY92
FY93
FY94
FY95
FY96
FY97
FY98
FY99
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
Costs related to unsolicited takeover attempt
-
-
-
-
-
-
-
-
-
-
-
Multi-employer pension plan withdrawal charges
-
-
-
-
-
-
-
-
-
-
-
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)
Costs related to unsolicited takeover attempt
-
-
-
-
-
-
-
-
-
-
-
Multi-employer pension plan withdrawal charges
-
-
-
-
-
-
-
-
-
-
-
Other non-cash charges
260
308
252
250
-
-
-
-
3,930
11,422
-
Cash provided by (used in)
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
$      
(In thousands)
FY00
FY01
FY02
FY03
FY04
FY05
FY06
FY07
FY08
FY09
FY10
Operating income
105,461
$  
106,728
$   
124,938
$   
156,336
$   
168,544
$   
202,454
$   
269,142
$   
341,497
$   
475,824
$   
524,868
$    
399,598
$    
Add:
Depreciation & amortization
85,262
82,796
71,757
79,279
87,447
111,078
127,542
147,343
189,775
220,795
234,949
Costs related to unsolicited takeover attempt
-
-
-
-
-
-
-
-
-
-
23,435
Multi-employer pension plan withdrawal charges
-
-
-
-
-
-
-
-
-
-
6,650
Adjusted EBITDA
190,723
189,524
196,695
235,615
255,991
313,532
396,684
488,840
665,599
745,663
664,632
(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)
(54,145)
(60,180)
(89,485)
(84,395)
(63,310)
Discount on securitization of receivables
-
(1,303)
(4,846)
(3,326)
(3,264)
(4,711)
(9,371)
(13,630)
(17,031)
(10,738)
(5,651)
Current income taxes
(16,902)
(13,402)
4,546
(33,174)
(24,623)
(22,622)
(30,718)
(47,972)
(69,459)
(64,985)
(51,634)
Other income (expense)
18,625
1,324
5,987
2,132
1,472
1,129
2,411
1,556
1,454
(382)
1,332
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)
3,014
Stock-based compensation expense
-
-
-
-
-
-
-
15,445
16,629
20,635
22,868
Income/(loss) on discontinued operations
(335)
(400)
(3,529)
(1,776)
(457)
464
(1,424)
-
-
-
-
Costs related to unsolicited takeover attempt
-
-
-
-
-
-
-
-
-
-
(23,435)
Multi-employer pension plan withdrawal charges
-
-
-
-
-
-
-
-
-
-
(6,650)
Other non-cash charges
458
2,281
1,068
-
-
-
-
-
-
-
-
Cash provided by (used in)
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)
58,881
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
$    
600,047
$    
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 expendituresand financial obligations.  Non-GAAP metrics 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.  Certain reclassifications have been made to prior period financial statements to conform to the current presentation.

Non-GAAP Reconciliations:
Non-GAAP Reconciliations:
Adjusted Cash from Operations,
Adjusted Cash from Operations,
Adjusted Capital Expenditures & Free Cash Flow
Adjusted Capital Expenditures & Free Cash Flow
62
62
($ in millions)
FY10
FY09
FY08
FY07
FY06
FY05
FY04
FY03
FY02
FY01
Net cash provided by operating activities
600
$          
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
16
49
(96)
(20)
(54)
(27)
(4)
(25)
(61)
(73)
Stock issued for employee stock purchase plan
15
17
14
12
11
10
7
9
7
6
Tax benefit realized from exercise of stock options
15
12
13
9
-
-
-
-
-
-
Adjusted cash from operations
648
$          
660
$          
482
$          
327
$          
302
$          
195
$          
207
$          
171
$          
190
$          
129
$          
Capital expenditures
(253)
$         
(352)
$         
(267)
$         
(238)
$         
(209)
$         
(168)
$         
(94)
$           
(68)
$           
(58)
$           
(66)
$           
Adjustments to capital expenditures:
Proceeds from sales of plant and equipment
14
14
9
9
8
5
5
4
3
3
Operating lease buyouts
2
6
1
10
15
24
4
-
-
-
Adjusted capital expenditures
(237)
$         
(332)
$         
(257)
$         
(220)
$         
(186)
$         
(139)
$         
(84)
$           
(64)
$           
(55)
$           
(63)
$           
Free Cash Flow
411
$          
328
$          
225
$          
107
$          
116
$          
57
$            
123
$          
107
$          
135
$          
66
$            
Adjusted Cash from Operations
CAGR FY01-FY10
20%
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 metrics 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.