Business Segments

Air Products manages its operations, assesses performance and reports results by six global business segments, which are organized based on differences in product and/or type of customer. The company's six business segments consist of Merchant Gases, Tonnage Gases, Electronics and Performance Materials, Equipment and Energy, Healthcare, and Chemicals.

Merchant Gases
The Merchant Gases segment provides industrial gases such as oxygen, nitrogen, argon, helium, and hydrogen as well as certain medical and specialty gases to a wide variety of industrial and medical customers globally. There are three principal modes of supply: liquid bulk, packaged gases, and small on-site plants. Most merchant product is delivered via bulk supply, in liquid or gaseous form, by tanker or tube trailer. Smaller quantities of industrial, specialty and medical gases are delivered in cylinders and dewars as "packaged gases." Other customers receive product through small on-sites (cryogenic or noncryogenic generators) via sale of gas contracts and some sale of equipment. Electricity is the largest cost input for the production of atmospheric gases.

Tonnage Gases
The Tonnage Gases segment supplies industrial gases, including hydrogen, carbon monoxide, nitrogen and oxygen via large on-site facilities or pipeline systems, principally to customers in the petroleum refining, chemical and metallurgical industries. For large volume, or "tonnage" industrial gas users, the company either constructs a gas plant adjacent to or near the customer's facility—hence the term "on-site"—or delivers product through a pipeline from a nearby location. The company is the world's largest provider of hydrogen, which is used by refiners to lower the sulfur content of gasoline and diesel fuels to reduce smog and ozone depletion. Natural gas is the principal raw material for hydrogen. The company mitigates energy and power price changes through its long-term cost pass-through type contracts.

Electronics and Performance Materials
The Electronics and Performance Materials segment uses applications technology to provide material solutions to a broad range of global industries through expertise in chemical synthesis, analytical technology, process engineering and surface science. This segment provides specialty and tonnage gases, specialty and bulk chemicals, services and equipment to the electronics industry for the manufacture of silicon and compound semiconductors, displays (LCDs, etc.) and photovoltaic devices. The segment also provides performance chemical solutions for the coatings, inks, adhesives, civil engineering, personal care, institutional and industrial cleaning, mining, oil field, polyurethane and other industries.

Equipment and Energy
The Equipment and Energy segment designs and manufactures cryogenic and gas processing equipment for air separation, hydrocarbon recovery and purification, natural gas liquefaction (LNG) and helium distribution equipment. Equipment is sold worldwide to customers in a variety of industries, including chemical and petrochemical manufacturing, oil and gas recovery and processing, and steel and primary metals processing. This segment also constructs, operates, and has an equity ownership interest in power generation and flue gas treatment facilities. The company is developing technologies to continue to serve energy markets in the future, including gasification and alternative energy technologies.

Healthcare
The Healthcare segment provides respiratory therapies, home medical equipment and infusion services to patients in their homes in the United States and Europe. The company serves more than 500,000 patients in 15 countries and has leading market positions in Spain, Portugal and the United Kingdom. Offerings include oxygen therapy, home nebulizer therapy, sleep management therapy, anti-infective therapy, beds and wheelchairs.

Chemicals
The Chemicals segment consists of the Polymer Emulsions business, which is currently being marketed to potential buyers, and the Polyurethane Intermediates business, which is being restructured.

• Other segment operating income includes other expense and income which can not be directly associated with the business segments, including foreign exchange gains and losses, interest income, and costs previously allocated to the Amines business. Also included are LIFO inventory adjustments as the business segments use FIFO and the LIFO pool is kept at corporate. Corporate research and development costs, which had previously been kept in the "Corporate & Other" segment, are now fully allocated to the business segments.
• Other segment assets include cash, deferred tax assets, pension assets, financial instruments and corporate assets previously allocated to the Amines business.