Summary of AIR PRODUCTS & CHEMICALS INC /DE/

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
(Millions of dollars, except for share data)
The disclosures in this quarterly report are complementary to those made in the Company's 2008 annual report on Form 10-K. An analysis of results for the second quarter and first six months of 2009, including an update to the Company's 2009 Outlook, is provided in the Management's Discussion and Analysis to follow. All comparisons in the discussion are to the corresponding prior year unless otherwise stated. All amounts presented are in accordance with U.S. generally accepted accounting principles, except as noted. All amounts are presented in millions of dollars, except for share data, unless otherwise indicated.
SECOND QUARTER 2009 VS. SECOND QUARTER 2008 SECOND QUARTER 2009 IN SUMMARY
Х Declining business conditions around the world have created a challenging business environment across the Company's end markets. As a result, volumes declined significantly this quarter as many customers ran at reduced operating rates.

Х Sales of $1,955.4 declined 23% from weaker volumes, unfavorable currency impacts, and lower natural gas and raw material contractual cost pass-through. Underlying business declined due to lower volumes primarily in the Electronics and Performance Materials segment and also in the Tonnage Gases segment. Volumes were lower in the Merchant Gases segment, but this decline was mostly offset by higher pricing.

Х Operating income of $260.4 decreased $88.2. Operating income declined principally from lower volumes and unfavorable currency impacts. Prior year results included a pension settlement charge of $26.3 for the retirement of certain corporate officers and others who were eligible for supplemental pension plan benefits.

Х Income from continuing operations of $189.3 declined $70.5 and diluted earnings per share from continuing operations of $.89 declined $.29. A summary table of changes in diluted earnings per share is presented below.

Х Income from discontinued operations was $16.3 or $.08 per share. The Company recognized a one-time tax benefit of $16.7 ($.08 per share) to increase the tax benefit related to previously recognized impairment charges associated with the U.S. Healthcare business.

Х The Company increased the quarterly dividend from $.44 to $.45 per share. This represents the 27th consecutive year that the Company has increased its dividend payment.

Х For a discussion of the challenges, risks, and opportunities on which management is focused, refer to the update to the Company's 2009 Outlook provided on page 36.

Table of Contents

Changes in Diluted Earnings per Share

                                                             Three Months Ended
                                                                  31 March                  Increase
                                                            2009             2008          (Decrease)

Diluted Earnings per Share

Net Income                                                $   .97          $ 1.43           $   (.46 )
Discontinued Operations                                       .08             .25               (.17 )

Continuing Operations                                     $   .89          $ 1.18           $   (.29 )

Operating Income (after-tax)
Underlying business
Volume                                                                                          (.52 )
Price/raw materials                                                                              .13
Costs                                                                                            .12
Currency                                                                                        (.11 )
2008 Pension settlement                                                                          .08

Operating Income                                                                                (.30 )

Other (after-tax)
Equity affiliates' income                                                                       (.05 )
Interest expense                                                                                 .03
Average shares outstanding                                                                       .03

Other                                                                                            .01

Total Change in Diluted Earnings per Share from
Continuing Operations                                                                       $   (.29 )