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 2007 annual report on Form 10-K. An analysis of results for the third quarter and first nine months of 2008, including an update to the Company's 2008 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. All amounts are presented in millions of dollars, except for share data, unless otherwise indicated.
THIRD QUARTER 2008 VS. THIRD QUARTER 2007 THIRD QUARTER 2008 IN SUMMARY
Х Sales of $2,808 were up 16% from the prior year, primarily due to volume growth in Merchant Gases and Electronics and Performance Materials segments, improved pricing in Merchant Gases, the favorable impacts of currency, and higher natural gas contractual cost pass-through.

Х Operating income of $68 decreased by $285. Higher volumes and favorable currency effects increased operating income. The Company recorded an impairment charge of $315 related to its U.S. Healthcare business. Subsequent to 30 June 2008, the Company announced its intention to sell this business.

Х Net income of $70 decreased $215 and diluted earnings per share of $.32 decreased $.96. A summary table of changes in diluted earnings per share is presented below. The Company sold its Elkton, Md., and Piedmont, S.C. production facilities and the related North American atmospheric emulsions and global pressure sensitive adhesives businesses to Ashland Inc. for cash proceeds of $92 resulting in an after-tax gain of $19.

Х For a discussion of the challenges, risks, and opportunities on which management is focused, refer to the update to the Company's 2008 Outlook provided on page 33-34.

Table of Contents

Changes in Diluted Earnings per Share

                                                   Three Months Ended
                                                        30 June              Increase
                                                   2008          2007       (Decrease)

   Diluted Earnings per Share                    $   .32        $ 1.28           ($.96 )

   Operating Income (after-tax)
   Underlying business
   Volume                                                                          .06
   Price/raw materials/mix                                                        (.02 )
   Cost                                                                              -
   Currency                                                                        .06
   U.S. Healthcare impairment                                                    (1.09 )

   Operating Income                                                               (.99 )

   Other (after-tax)
   Equity affiliates' income                                                       .06
   Discontinued operations                                                         .05
   Prior year settlement of tax audits                                            (.12 )
   Income tax rate                                                                 .01
   Average shares outstanding                                                      .03

   Other                                                                           .03


   Total Change in Diluted Earnings per Share                                    ($.96 )