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AIR PRODUCTS REPORTS SECOND QUARTER EPS OF 62 CENTS

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LEHIGH VALLEY, Pa. (April 28, 2004) - Air Products (NYSE:APD) today reported net income of $141 million or diluted earnings per share (EPS) of $.62 for its second fiscal quarter ended March 31, 2004. Net income increased 24 percent and diluted EPS was up 22 percent compared with the prior year. Sequentially, net income and EPS increased seven percent.

Record quarter revenues of $1,857 million were up 18 percent from the prior year on stronger volumes across the company's Gases and Chemicals segments, acquisitions, and favorable currency effects. Sequentially, revenues increased 10 percent, driven by improved volumes and favorable currency effects. Operating income of $210 million was up 19 percent from the prior year and up six percent sequentially.

John P. Jones, Air Products' chairman and chief executive officer, said, "As the manufacturing environment continued to improve, we saw significant volume increases based on strong demand in our growth platforms and our ability to leverage our existing asset base."

Gases segment sales of $1,285 million increased 14 percent over the prior year, mainly on higher volumes and acquisitions in the company's Electronics and Healthcare growth platforms, and favorable currency effects. Operating income of $189 million increased 26 percent, as operating leverage from improved asset loadings more than offset higher costs.

Sequentially, Gases revenues increased seven percent, principally due to stronger volumes in Electronics and Energy and Process Industries. Operating income increased four percent as volume growth was partially offset by higher costs.

Chemicals segment sales of $483 million increased 21 percent versus the prior year due to strong volume growth across the company's Performance Materials growth platform and base Intermediates businesses. Operating income of $35 million increased three percent, as higher volumes were largely offset by higher raw material and other costs.

Sequentially, Chemicals revenues were up 18 percent and operating income increased 42 percent on expected seasonally stronger volumes and new business signings.

Equipment segment revenues of $89 million were up over the prior year on higher air separation unit sales. Operating income declined on lower liquefied natural gas (LNG) heat exchanger activity. Air Products received a new LNG heat exchanger order at the end of the second quarter.

Looking forward, Mr. Jones said, "Our solid volume gains during the first half of the year, coupled with improving manufacturing in North America and Asia, should improve earnings in the second half of our fiscal year. We are now projecting a full-year EPS range of $2.45 to $2.65 and a third fiscal quarter EPS range of $.63 to $.68."

Mr. Jones continued, "Our continued earnings improvement is evidence that the strategies we embarked upon a few years ago are working and delivering value for Air Products' shareholders and customers. Our top line growth remains strong and our SAP project, an integral part of our productivity efforts, is on budget and on schedule."

Air Products will continue to drive portfolio management and cost reduction actions similar to prior years. Upfront costs associated with such actions could reduce Air Products' projected earnings for the current fiscal year.

Air Products (NYSE:APD) serves customers in technology, energy, healthcare and industrial markets worldwide with a unique portfolio of products, services and solutions, providing atmospheric gases, process and specialty gases, performance materials and chemical intermediates. Founded in 1940, Air Products has built leading positions in key growth markets such as semiconductor materials, refinery hydrogen, home healthcare services, natural gas liquefaction, and advanced coatings and adhesives. The company is recognized for its innovative culture, operational excellence and commitment to safety and the environment. With annual revenues of $6.3 billion and operations in over 30 countries, the company's 18,500 employees build lasting relationships with their customers and communities based on understanding, integrity and passion. For more information, visit www.airproducts.com.

NOTE: The forward-looking statements contained in this presentation are based on current expectations regarding important risk factors. Actual results may differ materially from those expressed. Factors that might cause forward-looking statements to differ materially from actual results include, among other things, overall economic and business conditions different than those currently anticipated and demand for Air Products' goods and services; competitive factors in the industries in which it competes; interruption in ordinary sources of supply; the ability to recover unanticipated increased energy and raw material costs from customers; uninsured litigation judgments or settlements; spikes in the pricing of natural gas; changes in government regulations; consequences of acts of war or terrorism impacting the United States' and other markets; charges related to currently unplanned portfolio management and cost reduction actions; the success of implementing cost reduction programs; the timing, impact and other uncertainties of future acquisitions or divestitures; significant fluctuations in interest rates and foreign currencies from that currently anticipated; the impact of tax and other legislation and regulations in jurisdictions in which Air Products and its affiliates operate; and the timing and rate at which tax credits can be utilized.

Please review the attached financial tables, including the Summary of Consolidated Financial Information:

AIR PRODUCTS AND CHEMICALS, INC.
SUMMARY OF CONSOLIDATED FINANCIAL INFORMATION
(Unaudited)

Three Months Ended

Six Months Ended

31 March

31 March

2004

2003

2004

2003

Sales

$1,856.5

$1,578.1

$3,541.4

$3,025.1

Income Before Cumulative

   Effect of Accounting Change         

$141.2

$113.6

$273.0

$242.3

Cumulative Effect of

   Accounting Change

--

--

--

(2.9)

Net Income

$141.2

$113.6

$273.0

$239.4

Basic Earnings Per Share:

Income Before Cumulative

   Effect of Accounting Change

$.63

$.52

$1.23

$1.11

Cumulative Effect of

   Accounting Change

--

--

--

(.02)

Net Income

$.63

$.52

$1.23

$1.09

Diluted Earnings Per Share:

Income Before Cumulative

   Effect of Accounting Change

$.62

$.51

$1.20

$1.09

Cumulative Effect of

   Accounting Change

--

--

--

(.02)

Net Income

$.62

$.51

$1.20

$1.07

Capital Expenditures

$198.2

$188.3

$379.3

$539.7

Depreciation

$176.8

$156.4

$347.2

$312.4

(Millions of dollars, except per share)

Three Months Ended

Six Months Ended

31 March

31 March

2004

2003

2004

2003

SALES

$1,856.5

$1,578.1

$3,541.4

$3,025.1

COSTS AND EXPENSES

Cost of sales

1,369.6

1,176.3

2,599.8

2,209.3

Selling and administrative

250.4

206.6

481.8

399.9

Research and development

32.0

31.1

62.0

61.1

Global cost reduction plans, net

--

(.2)

--

(.2)

Other (income) expense, net

(5.6)

(12.0)

(11.1)

(15.3)

OPERATING INCOME

210.1

176.3

408.9

370.3

Equity affiliates' income

22.0

15.2

41.6

43.5

Interest expense

32.3

28.6

63.2

60.3

INCOME BEFORE TAXES AND

    MINORITY INTEREST

199.8

162.9

387.3

353.5

Income taxes

54.9

48.7

106.2

103.8

Minority interest (a)

3.7

.6

8.1

7.4

INCOME BEFORE CUMULATIVE 

    EFFECT OF ACCOUNTING CHANGE

141.2

113.6

273.0

242.3

Cumulative effect of accounting change

--

--

--

(2.9)

NET INCOME

$141.2

$113.6

$273.0

$239.4

BASIC EARNINGS PER

   COMMON SHARE

Income before cumulative effect of

   accounting change

$.63

$.52

$1.23

$1.11

Cumulative effect of

   accounting change

--

--

--

(.02)

Net Income

$.63

$.52

$1.23

$1.09

DILUTED EARNINGS PER

   COMMON SHARE

Income before cumulative effect of

   accounting change

$.62

$.51

$1.20

$1.09

Cumulative effect of

   accounting change

--

--

--

(.02)

Net Income

$.62

$.51

$1.20

$1.07

WEIGHTED AVERAGE OF COMMON

   SHARES OUTSTANDING (in millions)

223.7

219.2

222.8

219.0

WEIGHTED AVERAGE OF COMMON

   SHARES OUTSTANDING ASSUMING

   DILUTION (in millions)

228.8

222.5

227.9

222.7

DIVIDENDS DECLARED PER

   COMMON SHARE - Cash

$.23

$.21

$.46

$.42

AIR PRODUCTS AND CHEMICALS, INC. and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

31 March
2004

30 September 2003

ASSETS

CURRENT ASSETS

Cash and cash items

$142.3

$76.2

Trade receivables, less allowances for doubtful accounts

1,354.9

1,188.5

Inventories and contracts in progress

563.3

565.9

Other current assets

265.0

237.3

TOTAL CURRENT ASSETS

2,325.5

2,067.9

INVESTMENTS IN NET ASSETS OF AND ADVANCES TO EQUITY AFFILIATES

601.8

553.5

PLANT AND EQUIPMENT, at cost

12,000.5

11,723.2

Less - Accumulated depreciation

6,284.7

6,086.1

PLANT AND EQUIPMENT, net

5,715.8

5,637.1

GOODWILL

792.2

725.8

INTANGIBLE ASSETS, net

108.7

104.1

OTHER NONCURRENT ASSETS

418.5

343.5

TOTAL ASSETS

$9,962.5

$9,431.9

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES

Payables and accrued liabilities

$1,173.8

$1,123.5

Accrued income taxes

73.1

115.6

Short-term borrowings and current portion of long-term debt

652.7

342.1

TOTAL CURRENT LIABILITIES

1,899.6

1,581.2

LONG-TERM DEBT

2,001.5

2,168.6

DEFERRED INCOME & OTHER NONCURRENT LIABILITIES

994.9

1,005.9

DEFERRED INCOME TAXES

739.5

705.6

TOTAL LIABILITIES

5,635.5

5,461.3

MINORITY INTERESTS IN SUBSIDIARY COMPANIES

186.0

188.1

TOTAL SHAREHOLDERS' EQUITY

4,141.0

3,782.5

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$9,962.5

$9,431.9

AIR PRODUCTS AND CHEMICALS, INC. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

Six Months Ended

31 March

2004

2003

OPERATING ACTIVITIES

Net Income

$273.0

$239.4

Adjustments to reconcile income to cash provided by operating activities:

Depreciation

347.2

312.4

Deferred income taxes

39.9

25.1

Undistributed earnings of unconsolidated affiliates

(25.6)

(2.2)

Gain on sale of assets and investments

--

(8.9)

Other

36.5

1.9

Subtotal

671.0

567.7

Working capital changes that provided (used) cash, excluding effects of acquisitions and divestitures:

    Trade receivables

(131.3)

(69.9)

    Inventories and contracts in progress

(10.4)

(33.6)

    Payables and accrued liabilities (a)

(81.8)

(53.1)

    Other

(75.5)

29.0

CASH PROVIDED BY OPERATING ACTIVITIES

372.0

440.1

INVESTING ACTIVITIES

Additions to plant and equipment (b)

(327.7)

(294.1)

Investment in and advances to unconsolidated affiliates

(3.9)

(5.2)

Acquisitions, less cash acquired (c)

(44.8)

(233.8)

Proceeds from sale of assets and investments

9.3

40.0

Other

(.5)

(1.0)

CASH USED FOR INVESTING ACTIVITIES

(367.6)

(494.1)

FINANCING ACTIVITIES

Long-term debt proceeds

147.3

50.2

Payments on long-term debt

(152.3)

(60.2)

Net increase (decrease) in commercial paper and short-term borrowings

74.0

(54.4)

Dividends paid to shareholders

(102.2)

(91.9)

Issuance of stock for options and award plans

89.4

24.6

CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES

56.2

(131.7)

Effect of Exchange Rate Changes on Cash

5.5

5.4

Increase (Decrease) in Cash and Cash Items

66.1

(180.3)

Cash and Cash Items - Beginning of Year

76.2

253.7

Cash and Cash Items - End of Period

$142.3

$73.4

(Millions of dollars, except per share)

Equity Affiliates' Income

Income from equity affiliates for the six months ended 31 March 2003 included $14 for adjustments related to divestitures recorded in prior periods. $8 is included in Other equity affiliates and $6 is included in Gases equity affiliates.

Litigation

In the normal course of business, the company is occasionally involved in uninsured legal proceedings, including, in July 2003, Honeywell International, Inc. and GEM Microelectronic Materials, LLC filed suit against the company alleging breach of contract resulting from the termination of a Strategic Alliance Agreement dated 1 October 1998 ("SAA"). The suit alleges that the company will source certain chemicals produced from its recently acquired Ashland Electronic Chemicals business rather than sourcing them from Honeywell. The suit was filed in Delaware Chancery Court seeking specific performance of the SAA and, in the alternative, a combination of specific performance and monetary damages up to $106. Trial was held during the week of 29 March 2004 and ended 2 April 2004. The company intends to continue its vigorous defense of this claim. No decision is expected until July or August 2004. The company has only established an accrual for the anticipated legal costs. Although management is not able to reasonably estimate the amount of any possible loss or a range of loss, it believes that a judgment on damages will be significantly less than the damages sought.

The company does not expect that any sums it may have to pay, if any, in connection with these matters would have a materially adverse effect on its consolidated financial position or net cash flows, even though a future charge for any damage award could have a significant impact on the company's net income in the period in which it is recorded.

Three Months Ended

Six Months Ended

31 March

31 March

2004

2003

2004

2003

Revenues from external customers

Gases

$1,284.9

$1,129.5

$2,488.4

$2,155.3

Chemicals

482.7

398.5

892.8

752.3

Equipment

88.9

50.1

160.2

117.5

Segment Totals

1,856.5

1,578.1

3,541.4

3,025.1

Consolidated Totals

$1,856.5

$1,578.1

$3,541.4

$3,025.1

Operating income

  Gases

$189.4

$150.2

$371.7

$318.2

  Chemicals

34.7

33.7

59.2

66.8

  Equipment

(.2)

3.0

(.5)

7.1

  Segment Totals

223.9

186.9

430.4

392.1

  Corporate research and development and other

     income (expense)

(13.8)

(10.6)

(21.5)

(21.8)

  Consolidated Totals

$210.1

$176.3

$408.9

$370.3

Equity affiliates' income

  Gases

$19.0

$14.6

$36.7

$31.8

  Chemicals

2.9

.8

4.8

3.3

  Equipment

.1

(.2)

.1

.1

  Segment Totals

22.0

15.2

41.6

35.2

  Other

--

--

--

8.3

  Consolidated Totals

$22.0

$15.2

$41.6

$43.5

(Millions of dollars)

31 March

2004

30 September

2003

Identifiable assets (a)

  Gases

$7,250.8

$7,097.3

  Chemicals

1,412.9

1,478.1

  Equipment

212.7

171.4

  Segment Totals

8,876.4

8,746.8

  Corporate assets

484.3

131.6

  Consolidated Totals

$9,360.7

$8,878.4

AIR PRODUCTS AND CHEMICALS, INC. and Subsidiaries
SUMMARY BY GEOGRAPHIC REGIONS
(Unaudited)

Three Months Ended

Six Months Ended

31 March

31 March

2004

2003

2004

2003

Revenues from external customers

  United States

$1,043.1

$941.5

$1,986.3

$1,761.4

  Canada

21.5

30.1

41.1

57.3

      Total North America

1,064.6

971.6

2,027.4

1,818.7

  United Kingdom

178.2

112.3

325.6

229.1

  Spain

108.1

88.9

213.1

173.3

  Other Europe

282.6

234.7

536.9

441.1

       Total Europe

568.9

435.9

1,075.6

843.5

  Asia

181.3

145.6

353.1

306.0

  Latin America

41.7

24.9

85.3

56.7

  All Other

--

.1

--

.2

Total

$1,856.5

$1,578.1

$3,541.4

$3,025.1

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