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Air Products
today issued the following statement in response to Pershing Square Capital
Management's confirmation of its investment in the Company:
Air Products maintains an active dialogue with and carefully considers the
views of its shareholders. The Company has not been contacted by Pershing
Square Capital Management but welcomes new investors and looks forward to
engaging with Pershing Square to understand its views. In keeping with its
long-standing practice, Air Products will thoroughly review constructive input
from shareholders as part of its commitment to increasing shareholder value.
Air Products has taken significant, proactive steps in recent years to deliver
earnings and operating cash flow growth in a very challenging economic
environment. The Company noted that its 2013 total shareholder return of
21.6% through July 24 (the last trading day prior to announcing the adoption
of a stockholder rights plan) is more than double that of its industrial gas
peer group, and that on a one- and three-year basis total returns have
exceeded that of its closest peer (Praxair).[1]
As stated on earnings calls in April and July, Air Products continues to
actively assess additional steps it can take to further improve operations and
increase value to shareholders. That assessment is ongoing and has already
resulted in additional cost-reduction initiatives in those regions and
businesses facing the greatest challenges from slower market growth.
Recent actions taken by Air Products include:
o Streamlining its portfolio, including selling its European home care
business, exiting the polyurethane intermediates (PUI) business and
restructuring its market position in photovoltaics
o Expanding in key high-growth markets through strategic initiatives such as
acquiring Indura, South America's largest independent industrial gas
company
o Reducing its cost base by over $150 million annually, with recently
announced plans for additional cost reductions of approximately $60
million per year beginning in the fiscal 2013 fourth quarter
o Maintaining a regular program for returning capital to shareholders,
including increasing its dividend for the 31^st consecutive year and
repurchasing $460 million of its shares in fiscal 2013 year to date
o Building a record $3 billion project backlog, which is over 80% on-site or
pipeline business with long-term take-or-pay contract terms; these
projects are expected to be immediately accretive to earnings and cash
flow as they come on line over the next several years
Air Products remains focused on disciplined capital allocation, cost-effective
project execution, driving greater productivity, and delivering on its cash
priorities. The Company believes it has significant operating leverage in its
existing assets, making it well positioned for accelerated earnings growth in
an economic recovery.
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