2008_Sept_17_CreditSuisse_DJT

David J. TaylorVice PresidentVice PresidentEnergy BusinessesCredit Suisse Chemicals ConferenceSeptember 17, 2008

ForwardForward Looking Statements Looking Statements ForwardForward--Looking Statements Looking Statements NOTE: This document contains “forward-looking statements” within the safe harbor provisions of the Private S iti Liti ti R f A t f 1995 Th f d l ki t t t b d t’Securities Litigation Reform Act of 1995. These forward-looking statements are based on management’s reasonable expectations and assumptions as of the date of this document regarding important risk factors. Actual performance and financial results may differ materially from projections and estimates expressed in the forward-looking statements because of many factors, including, without limitation, overall economic and business conditions different than those currently anticipated; future financial and operating performance ofbusiness conditions different than those currently anticipated; future financial and operating performance of major customers and industries served by the Company; the impact of competitive products and pricing; interruption in ordinary sources of supply of raw materials; the ability to recover unanticipated increased energy and raw material costs from customers; costs and outcomes of litigation or regulatory activities; consequences of acts of war or terrorism impacting the United States’ and other markets; the effects of a pandemic or a natural disaster; the ability to attract, hire and retain qualified personnel in all regions of the world where the company operates; charges related to portfolio management, goodwill recoverability, business restructuring and cost reduction actions; the success of implementing cost reduction programs; the timing, impact, and other uncertainties of future acquisitions or divestitures; unanticipated contract t i ti t ll ti t t f j t l i ifi t fl t ti i i t tterminations or customer cancellation or postponement of projects or sales; significant fluctuations in interest rates and foreign currencies from that currently anticipated; the continued availability of capital funding sources in all of the company’s foreign operations; the impact of new or changed environmental, healthcare, tax or other legislation and regulations in jurisdictions in which the Company and its affiliates operate; the impact of new or changed financial accounting standards; and the timing and rate at which tax credits can beimpact of new or changed financial accounting standards; and the timing and rate at which tax credits can be utilized. The Company disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained in this document to reflect any change in the Company’s assumptions, beliefs or expectations or any change in events, conditions or circumstances upon which any such forward-looking statements are based.

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Air Products Air Products At lAt lAt a glanceAt a glance $10B in revenues $10B in revenues Diverse markets and geographies Positioned for continued long-term value creation

FY07 Geographic SalesFY07 S t S l FY07 Geographic SalesAsia(17%)

FY07 Segment SalesROW (2%)

MerchantGases

TonnageGases

United States(44%)

Gases(34%)

Gases(31%)

Europe(32%)

Canada/LatinEquipment &

Energy

Healthcare(7%) Electronics &

Performance Materials(22%)

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Canada/LatinAmerica (5%)

Energy(6%)

(22%)

Air Products Value PropositionAir Products Value PropositionP fit bl G thP fit bl G thProfitable GrowthProfitable Growth Stabilityy

– Long term contracts– Consistent and predictable

cash flowscash flows – Strong balance sheet

Growth Growth– Solid project backlog– High bidding activity– Energy opportunities

Improving returnsM i i t– Margin improvement

– Productivity– Increasing dividends

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Increasing dividends– Share buyback

Enabling Energy and Environmental Enabling Energy and Environmental Solutions for Today and TomorrowSolutions for Today and TomorrowSolutions for Today and TomorrowSolutions for Today and Tomorrow

Air Products E bl

Energy Conversion & Environmental In-use

B fitEnabler & Environmental Applications Benefit

Hydrogen & Desulfurization /Low sulfur, cleaner

burning fuels

H d & F li

Hydrogen & Integration Solutions

Desulfurization / Refining / Upgrading

burning fuelsIncreased conversion

of a barrel of oil

Hydrogen & Fueling Solutions Fuel Cells Enabling H2 economy

Liquefied Natural Gas Natural gas (remote & ti l(LNG) Heat

Exchangersnon-conventional

liquefactionNatural gas supply

(remote, non-conventional, liquefied

NitrogenRegasificationWell fracturing

Electronic Gases Solar PV Renewable energy

Well fracturing

Oxygen & Integration Solutions

Gas to Liquids (GTL)Coal to Liquids (CTL) Fuel diversity

Enabling Energy and Environmental Enabling Energy and Environmental Solutions for Today and TomorrowSolutions for Today and TomorrowSolutions for Today and TomorrowSolutions for Today and Tomorrow

*Emerging Opportunities

Air Products E bl

Energy Conversion & Environmental In-use

B fit

Oxygen & Integration Combustion processes for steel

Energy efficiency &criteria pollutant

Enabler & Environmental Applications Benefit

Petcoke gasification

Solutions processes for steel, cement, glass, etc.

criteria pollutantreduction

Waste to energy

IGCC

Biomass Gasification

Power

Renewable energy

Oxygen & Integration Solutions

& CO2 Capture

IGCC with CO2capture and

sequestration (CCS) Power with near-zero

Oxygen & Oxyfuel Integration Solutions

& CO2 CaptureCoal combustion

with CCS

near zero CO2 emissions

Ion Transport Membrane (ITM)

Oxygen for gasification and

combustionSignificant cost

reduction

Tonnage GasesTonnage GasesMarket Leader in Refinery HydrogenMarket Leader in Refinery HydrogenMarket Leader in Refinery HydrogenMarket Leader in Refinery Hydrogen

H2 Plant Operating Years

$3 billion in FY’07 sales Refinery, steel, chemicals H2 Plant Operating Years

APD . . .Widening Gap

Global #1 hydrogen supplier Operating experience Operating experience Significant global franchise

positions

1995 2000 2005

APD Comp. X Comp. Y Others

positions Disciplined capital

investments Strong economic drivers for

continued growth

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Tonnage GasesTonnage GasesHigh Growth SegmentHigh Growth SegmentHigh Growth SegmentHigh Growth Segment

Sales3500

Operating Income & Margin450 20.0%

$MM $MM

16% CAGR

1500

2000

2500

3000

200250300350400

14 0%

16.0%

18.0%16% CAGR

0

500

1000

1500

2004 2005 2006 20070

50100150

2004 2005 2006 200710.0%

12.0%

14.0%

2004 2005 2006 2007 2004 2005 2006 2007

Investment by Region • Significant profit growth and improvement

North Americag p g p

in returns on capital while bringing on new investments

• Significant large plant bidding opportunities

Asia

Europe & Middle East

Significant large plant bidding opportunities (both H2 & O2) continue

• Anticipate continued 10%-15% H2 growth

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Major Hydrogen PipelineMajor Hydrogen PipelinePositions Positions -- US/ Canada / Europe US/ Canada / Europe

40

SarniaSarniaCanadaCanada

PlaquemineGeismar

Geismar

LouisianaLouisianaBaton Rouge

16

Edmonton,Edmonton,CanadaCanada

40Suncor

Shell Refinery

40

Air Products Canada

Lake Pontchartrain

ConventCosmar

Taft

10

NolaNew Orleans

16

2121SherwoodPark

Petro-CanadaImperial Oil

16

Corunna

ST.CLAIR RIVER

Chalmette14

14

Europoort

RotterdamRotterdam

DominguezChannel

91

190th

St.710

405

SouthernSouthernCaliforniaCalifornia Zwijndrecht

To Moerdijk

Pernis

Botlek

APD HyCO facilitiesH2 pipeline

BPCarson

ShellWilmingtonConoco Phillips

Carson

Van NessAve.

SepulvedaBlvd

LongBeachArpt.

Carson H2

405

110

1

To Moerdijk

Mont BelvieuBattlegroundCity of Houston

Lake CharlesBeaumont

73

6910

TexasTexas

CO pipelineSyngas pipelineConoco Phillips

Wilmington

Anaheim Street

Wilmington H2110

ValeroWilmington

Port Arthur

BayportPasadena

Clear Lake

Baytown 2

LaPorte

10

45

610

225

9

Clear LakeTexas City

Refining Hydrogen and EnergyRefining Hydrogen and EnergyD i i H d G thD i i H d G thDriving Hydrogen GrowthDriving Hydrogen Growth

Transport fuels growthMore heavy, sour crude

15%o e ea y, sou c ude

Clean fuels legislation 45%

25%

15%

Increased outsourcing trend Future opportunities ConversionFuture opportunities

– Gasification– GTL

ConversionCrudeClean FuelsOutsourcingGTL

– Oil sands– Non-conventional fuels

Outsourcing

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– Non-conventional fuels

Hydrogen Plant IntegrationHydrogen Plant IntegrationAdds Significant ValueAdds Significant ValueAdds Significant ValueAdds Significant Value

H2 toPipeline

Powerto Grid

Steamto Others

Hydrogen

REFINERYSteam

HC Feeds

Power

HC Feeds

FuelH2 Offgas

Air Products H2 / cogen plant

Large ASU Market Large ASU Market Significant Significant Opport nitiesOpport nitiesSignificant Significant Opportunities...Opportunities... High energy prices, new demands for cleaner High energy prices, new demands for cleaner

fuels/air and greenhouse gas reduction Large oxygen requirements: Large oxygen requirements:

– Gas-to-liquids projects:> 30,000 TPD– Gasification projects: >5,000 TPD per trainOpportunities in U.S./Europe for power pp p p

generation using low-value fuelsOpportunities in Canadian Oil Sands for pp

additional processing capability, limiting NG usageChina

Tonnage GasesTonnage GasesLeading the Leading the Way Way on Gasificationon Gasification APD is one of the largest

Leading the Leading the Way Way on Gasificationon Gasificationg

suppliers of oxygen to gasification facilities around the world (>10 large units)( g )

Designed, built, own, and operate units in Texas for syngas, H2 and CO for pipeline systems:p p y– NG based POX units (LaPorte)– Syngas cleanup / separation

facilities from heavy oil POXfacilities from heavy oil POX unit (Baytown)

Recently announced Tonnage relationship on O and H :relationship on O2 and H2:– Eastman Gasifier -Texas– Wison II, Weihe in China

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– BP Clean Power in California

APD’s Differentiated Oxyfuel COAPD’s Differentiated Oxyfuel CO22Capt re Technolog Capt re Technolog Capture Technology Capture Technology Eliminates N2 from flue gas by burning the fuel in O22 g y g 2

– Solution for retrofitting existing installed base of coal/oil-fired power plantsA li bl t b ild iti l l t– Applicable to new-build supercritical power plants

APD’s patented Oxyfuel CO2 Capture and PurificationPotential to yield overall CO capture rate as high as– Potential to yield overall CO2 capture rate as high as 98%

– Projected to be capable of removing up to 99% SOx d NOand NOx

– Eliminates co-disposal of mercury, SOx and NOx wastes with the CO2 sequestration stream

– Unlike post-combustion capture, does not add new chemicals into the process

U l ki t ti l f t k l Unlocking potential for stack-less coal fired power generation

Oxyfuel Power Plant with APD Oxyfuel Power Plant with APD T h lT h lTechnologyTechnology

Steam Boiler & TurbinesO2 Supply CO2 Transport & Sequestration

APD

500 MWe

CO2 Purification& Compression

Oxygen~10,000 tpd

Coal Flue Gas Recycle APD Patented

Technologygy

50% of Global Natural Gas50% of Global Natural GasReserves are RemoteReserves are RemoteReserves are RemoteReserves are Remote

RussiaRussia

NigeriaNigeriaTrinidadTrinidad

AlgeriaAlgeriaEgyptEgypt

IranIranQatarQatar

VenezuelaVenezuela

NigeriaNigeria

Remote Remote Natural GasNatural Gas

MalaysiaMalaysia

AustraliaAustralia

IndonesiaIndonesia

Natural GasNatural Gas AustraliaAustralia

Source: APD IEASource: APD IEAChileChile Source: APD, IEASource: APD, IEA

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Transforming the LNG MarketTransforming the LNG MarketMaintaining Leadership PositionMaintaining Leadership PositionMaintaining Leadership PositionMaintaining Leadership Position APD world leader in LNG equipment APD world leader in LNG equipment Proprietary AP-X® technology helps make imported

LNG more viableLNG more viable– 50% production increase from single train

High NG prices mean more remote gas is economically High NG prices mean more remote gas is economically viable to develop

Increasing number of receiving terminals in US Europe Increasing number of receiving terminals in US, Europe and China

Anticipate 2 3 orders/year over next 5 years Anticipate 2-3 orders/year over next 5 years

LNG Value Chain…LNG Value Chain…APDAPD B t P iti d I d t i l G CB t P iti d I d t i l G CAPD APD -- Best Positioned Industrial Gas CompanyBest Positioned Industrial Gas Company

Pipeline gasDistributionDistribution

P

Production Liquefaction Shipping

PowerGeneration

Regasification Distribution & Use

APD supplies N APD provides APD provides NAPD supplies LNG heat APD supplies N2offshore systems for oil and gas recovery

APD provides shipboard membrane systems to deliver dry

APD provides N2plants for BTU adjustment

APD utilized LNG

APD supplies LNG heat exchanger andprocess technology license

deliver dry nitrogen

APD utilized LNG refrigeration for making industrial gases

Outlook for Industrial GasesOutlook for Industrial GasesC ti d St thC ti d St thContinued StrengthContinued Strength Future demand drivers are strongFuture demand drivers are strong

– High energy costs efficiencies– High capital costs debottleneckingHigh capital costs debottlenecking– Environmental pressures new applications

Well positioned globally with market leadership– Hydrogen for clean fuels– Oxygen for gasification– Electronics

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2008 and Beyond2008 and BeyondSustainable DoubleSustainable Double--Digit GrowthDigit Growthggat Superior Returnsat Superior Returns Targeting sustainable double-digit EPS growth Targeting sustainable double digit EPS growth● Targeting 300bp margin improvement over

3 years3 years– Cost reduction and SG&A improvement– Improved business mix– Plant efficiency/incremental expansions

Targeting a ROCE 3% to 5% above our cost of Targeting a ROCE 3% to 5% above our cost ofcapital

More Focused, Less Cyclical,More Focused, Less Cyclical,Higher Growth Higher ReturnsHigher Growth Higher Returns

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Higher Growth, Higher ReturnsHigher Growth, Higher Returns

Thank youy

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