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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 Form 10-K
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 For
the fiscal year ended March 31, 2009or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from ______to ______
 Commission File No. 1-9344
 AIRGAS, INC.
  Delaware
    
    56-0732648(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)
 259 North Radnor-Chester Road, Suite 100Radnor, Pennsylvania
    
    19087-5283(Address of principal executive offices)
    
    (Zip Code)
  (Registrants telephone number, including area code)
  Name of Each ExchangeTitle of Each Class
    
    on Which RegisteredCommon Stock, par value $0.01 per share
    
    New York Stock Exchange
  þ o
 o þ
 þ o
 o o
 o
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ
   DOCUMENTS INCORPORATED BY REFERENCE




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##### 



AIRGAS, INC.
  ITEM NO.
    
    PAGEPART I1. Business
    
    
    31A. Risk Factors
    
    
    111B. Unresolved Staff Comments
    
    
    142. Properties
    
    
    153. Legal Proceedings
    
    
    154. Submission of Matters to a Vote of Security Holders
    
    
    16PART II5. Market for Registrants Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities
    
    
    166. Selected Financial Data
    
    
    187. Managements Discussion and Analysis of Financial Condition and
Results of Operations
    
    
    207A. Quantitative and Qualitative Disclosures About Market
Risk
    
    
    498. Financial Statements and Supplementary Data
    
    
    519. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
    
    
    519A. Controls and Procedures
    
    
    519B. Other Information
    
    
    51PART III10. Directors, Executive Officers and Corporate Governance
    
    
    5211. Executive Compensation
    
    
    5212. Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters
    
    
    5313. Certain Relationships and Related Transactions, and Director
Independence
    
    
    5414. Principal Accountant Fees and Services
    
    
    54PART IV15. Exhibits and Financial Statement Schedules
    
    
    54Signatures
    
    
    58
  2




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PART I
 
 ITEM 1. BUSINESS.
      3




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Principal Products and Services
  Principal Markets and Methods of Distribution
   4




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\

Customer Base
  
    
    Repair & Maintenance (27%)
    
    Industrial Manufacturing (25%)
    
    Non-Residential Construction (13%)
    
    Medical (9%)
    
    Petrochemical (7%)
    
    Food Products (6%)
    
    Wholesale Trade (4%)
    
    Analytical (2%)
    
    Utilities and Mining (2%)
    
    Transportation (2%)
    
    Other (3%).
 Supply
   5




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Carbon Dioxide & Dry Ice
  Nitrous Oxide
  Specialty Products
  Refrigerants
    
    
    markets with high potential growth or low cyclicality such as energy and
infrastructure construction, medical, environmental, research, life sciences and food products;
    
    strategic product offerings with favorable growth profiles due to application
development, increasing environmental regulation, and strong cross-selling opportunities e.g., bulk
gases, specialty gases, medical products,
 6




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carbon dioxide and safety products;
 
    
    a compelling value proposition for customers to reduce their total cost of
procurement through our broad product and service offerings and custom engineered
solutions;
    
    improved training, tools and resources for all associates;
    
    reducing costs associated with production, cylinder maintenance and distribution
logistics; and
    
    acquisitions to complement and expand our business and to leverage our significant
national platform.
        2
   7




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Name
    
    Age
    
    PositionPeter McCausland
    
    
    59
    
    
    Chairman of the Board, President and Chief Executive OfficerMichael L. Molinini
    
    
    58
    
    
    Executive Vice President and Chief Operating OfficerRobert M. McLaughlin
    
    
    52
    
    
    Senior Vice President and Chief Financial OfficerRobert A. Dougherty
    
    
    51
    
    
    Senior Vice President and Chief Information OfficerPatrick M. Visintainer
    
    
    45
    
    
    Senior Vice President  SalesDwight T. Wilson
    
    
    53
    
    
    Senior Vice President  Human ResourcesLeslie J. Graff
    
    
    48
    
    
    Senior Vice President  Corporate DevelopmentRobert H. Young, Jr.
    
    
    58
    
    
    Senior Vice President and General CounselMax D. Hooper
    
    
    49
    
    
    Division President  WestB. Shaun Powers
    
    
    57
    
    
    Division President  EastAndrew R. Cichocki
    
    
    46
    
    
    Division President  Gas OperationsThomas M. Smyth (1)
    
    
    55
    
    
    Vice President and Controller
 
 (1)
    
    Mr. Smyth serves as the Companys Principal Accounting Officer, but he is not
an executive officer.      8




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Code of Ethics and Business Conduct
  
 Corporate Governance Guidelines
  Certifications
   10




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ITEM 1A. RISK FACTORS.
  We face risks related to the current economic conditions, which may impact the demand for and
supply of our products and our results of operations.
  We
operate in a highly competitive environment and such competition
could negatively impact us.
  Increases in product and energy costs could reduce our profitability.
  Our financial results may be adversely affected by gas supply disruptions/constraints
  11




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Recent turmoil in the U.S. credit markets may impact our ability to obtain financing or
increase the cost of future financing.
   We may not be successful in integrating acquisitions and achieving intended benefits and
synergies.
  
    
    acquired companies may not have an internal control structure appropriate for a larger
public company resulting in significant internal control remediations;
    
    acquired operations, information systems and products may be difficult to assimilate;
    
    acquired operations may not achieve targeted synergies;
    
    we may not be able to retain key employees, customers and business relationships of
acquired companies; and
    
    our management team may have their attention and resources diverted from ongoing
operations.
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We depend on our key personnel to manage our business effectively and they may be difficult
to replace.
  We are subject to litigation risk as a result of the nature of our business, which may have a
material adverse effect on our business.
  We have established insurance programs with significant deductibles and maximum coverage
limits which could result in the recognition of significant losses.
  Catastrophic events may disrupt our business and adversely affect our operating results.
  We are subject to environmental, health and safety regulations that generate ongoing
environmental costs and could subject us to liability.
   13




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We face risks in connection with our current project to install a new enterprise information
system for our business.
  Market conditions and other uncertainties may unfavorably impact our withdrawal liabilities
from multi-employer pension plans.
  
 ITEM 1B. UNRESOLVED STAFF COMMENTS.
  14




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ITEM 2. PROPERTIES.
      
 ITEM 3. LEGAL PROCEEDINGS.
  15




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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
  
 PART II
 
 ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES.
  DividendsHigh
    
    
    Low
    
    
    Per ShareFiscal 2009First Quarter
    
    $
    64.72
    
    
    $
    45.98
    
    
    $
    0.12Second Quarter
    
    
    60.00
    
    
    
    44.35
    
    
    
    0.12Third Quarter
    
    
    47.00
    
    
    
    27.45
    
    
    
    0.16Fourth Quarter
    
    
    40.65
    
    
    
    27.09
    
    
    
    0.16Fiscal 2008First Quarter
    
    $
    48.23
    
    
    $
    41.49
    
    
    $
    0.09Second Quarter
    
    
    52.05
    
    
    
    42.31
    
    
    
    0.09Third Quarter
    
    
    55.27
    
    
    
    45.85
    
    
    
    0.09Fourth Quarter
    
    
    51.01
    
    
    
    40.24
    
    
    
    0.12
   16




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Stockholder Return Performance Presentation
   Airgas, Inc.
Comparison of Five Year Cumulative Total Return
 
 March 31
    
    
    2004
    
    
    2005
    
    
    2006
    
    
    2007
    
    
    2008
    
    
    2009u
    
    Airgas
    
    
    
    100.00
    
    
    
    
    112.98
    
    
    
    
    186.32
    
    
    
    
    202.36
    
    
    
    
    220.04
    
    
    
    
    165.81m
    
    S&P MidCap 400 Chemicals
    
    
    
    100.00
    
    
    
    
    127.67
    
    
    
    
    131.70
    
    
    
    
    160.70
    
    
    
    
    174.67
    
    
    
    
    116.10n
    
    S&P MidCap 400
    
    
    
    100.00
    
    
    
    
    110.43
    
    
    
    
    134.31
    
    
    
    
    145.65
    
    
    
    
    135.50
    
    
    
    
    86.59
 
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ITEM 6. SELECTED FINANCIAL DATA.
  Years Ended March 31,(In thousands, except per share amounts):
    

2009 (1)
    
    
    2008 (2)
    
    

2007 (3)
    
    
    2006 (4)
    
    

2005 (5)Operating Results:Net sales
    
    $
    4,349,455
    
    
    $
    4,017,024
    
    
    $
    3,205,051
    
    
    $
    2,829,610
    
    
    $
    2,367,782Depreciation and amortization
    
    
    220,795
    
    
    
    189,775
    
    
    
    147,343
    
    
    
    127,542
    
    
    
    111,078Operating income
    
    
    524,868
    
    
    
    475,824
    
    
    
    341,497
    
    
    
    269,142
    
    
    
    202,454Interest expense, net
    
    
    84,395
    
    
    
    89,485
    
    
    
    60,180
    
    
    
    54,145
    
    
    
    51,245Discount on securitization of trade receivables
    
    
    10,738
    
    
    
    17,031
    
    
    
    13,630
    
    
    
    9,371
    
    
    
    4,711Loss on debt extinguishment
    
    
    
    
    
    
    
    
    
    
    12,099
    
    
    
    
    
    
    
    Other income (expense), net
    
    
    (382
    )
    
    
    1,454
    
    
    
    1,556
    
    
    
    2,411
    
    
    
    1,129Income taxes
    
    
    168,265
    
    
    
    144,184
    
    
    
    99,883
    
    
    
    77,866
    
    
    
    54,261Minority interest in earnings of consolidated
affiliate
    
    
    
    
    
    
    (3,230
    )
    
    
    (2,845
    )
    
    
    (2,656
    )
    
    
    (1,808
    )Income from continuing operations before the
cumulative
effect of a change in accounting principle
    
    
    261,088
    
    
    
    223,348
    
    
    
    154,416
    
    
    
    127,515
    
    
    
    91,558Income (loss) from discontinued operations,
net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,424
    )
    
    
    464Cumulative effect of a change in accounting
principle, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,540
    )
    
    
    Net earnings
    
    $
    261,088
    
    
    $
    223,348
    
    
    $
    154,416
    
    
    $
    123,551
    
    
    $
    92,022NET EARNINGS PER COMMON SHAREBASICEarnings from continuing operations
before the
cumulative effect of a change in
accounting principle
    
    $
    3.19
    
    
    $
    2.74
    
    
    $
    1.98
    
    
    $
    1.66
    
    
    $
    1.22Earnings (loss) from discontinued
operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.02
    )
    
    
    0.01Cumulative effect of a change in
accounting principle
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.03
    )
    
    
    Net earnings per share
    
    $
    3.19
    
    
    $
    2.74
    
    
    $
    1.98
    
    
    $
    1.61
    
    
    $
    1.23DILUTEDEarnings from continuing operations
before the
cumulative effect of a change
in accounting principle
    
    $
    3.12
    
    
    $
    2.66
    
    
    $
    1.92
    
    
    $
    1.62
    
    
    $
    1.19Earnings (loss) from discontinued
operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.02
    )
    
    
    0.01Cumulative effect of a change in
accounting principle
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.03
    )
    
    
    Net earnings per share
    
    $
    3.12
    
    
    $
    2.66
    
    
    $
    1.92
    
    
    $
    1.57
    
    
    $
    1.20Dividends per common share declared and paid
(6)
    
    $
    0.56
    
    
    $
    0.39
    
    
    $
    0.28
    
    
    $
    0.24
    
    
    $
    0.18Balance
Sheet and Other Data at March 31:Working capital
    
    $
    285,510
    
    
    $
    132,323
    
    
    $
    121,543
    
    
    $
    (17,138
    )
    
    $
    132,969Total assets
    
    
    4,399,537
    
    
    
    3,987,264
    
    
    
    3,333,457
    
    
    
    2,474,412
    
    
    
    2,291,863Current portion of long-term debt
    
    
    11,058
    
    
    
    40,400
    
    
    
    40,296
    
    
    
    131,901
    
    
    
    6,948Long-term debt
    
    
    1,750,308
    
    
    
    1,539,648
    
    
    
    1,309,719
    
    
    
    635,726
    
    
    
    801,635Deferred income tax liability, net
    
    
    565,783
    
    
    
    439,782
    
    
    
    373,246
    
    
    
    327,818
    
    
    
    282,186Other non-current liabilities
    
    
    79,231
    
    
    
    80,104
    
    
    
    39,963
    
    
    
    30,864
    
    
    
    24,391Minority interest in affiliate
    
    
    
    
    
    
    
    
    
    
    57,191
    
    
    
    57,191
    
    
    
    36,191Stockholders equity
    
    
    1,571,755
    
    
    
    1,413,336
    
    
    
    1,125,382
    
    
    
    947,159
    
    
    
    814,172Capital expenditures for years ended March 31,
    
    
    351,912
    
    
    
    267,378
    
    
    
    238,274
    
    
    
    208,603
    
    
    
    167,977
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(1)
    
    Stock-based compensation expense in fiscal 2009 was $20.6 million ($14.1
million after tax), or $0.17 per diluted share.(2)
    
    As discussed in Item 7, Managements Discussion and Analysis of Financial
Condition and Results of Operations and in the notes to the Companys Consolidated
Financial Statements included in Item 8, Financial Statements and Supplementary Data,
the results for fiscal 2008 include a one time, non-cash charge of $2.5 million, or
$0.03 per diluted share, related to the National Welders Exchange Transaction through
which the joint venture became a 100% owned subsidiary. Also included in the results
for fiscal 2008 is a tax benefit of $1.3 million, or $0.01 per diluted share, due to
additional guidance issued with respect to a prior year change in Texas state income tax
law. Fiscal 2008 acquisition integration costs, principally related to the Linde Bulk
Gas and Linde Package Gas acquisitions, were $10.1 million ($6.2 million after tax).
Stock-based compensation expense in fiscal 2008 was $16.6 million ($11.3 million after
tax), or $0.13 per diluted share.(3)
    
    As discussed in Item 7, Managements Discussion and Analysis of Financial
Condition and Results of Operations and in the notes to the Companys Consolidated
Financial Statements included in Item 8, Financial Statements and Supplementary Data,
the results for fiscal 2007 include a charge of $12.1 million ($7.9 million after tax),
or approximately $0.10 per diluted share, for the early extinguishment of debt and a tax
benefit of $0.02 per diluted share related to a change in Texas state income tax law.
The Company also adopted Statement of Financial Accounting Standards No. 123R,
Share-Based Payment,utilizing the modified prospective method in fiscal 2007. Under
the modified prospective method, no stock-based compensation expense was reflected in
periods prior to fiscal 2007. Stock-based compensation expense in fiscal 2007 was $15.4
million ($10.9 million after tax), or $0.13 per diluted share.(4)
    
    The results for fiscal 2006 include an after-tax charge of $2.5 million as a
result of the adoption of Financial Accounting Standards Board Interpretation No. 47,
Accounting for Conditional Asset Retirement Obligations, an interpretation of FASB
Statement No. 143,which was recorded as a cumulative effect of a change in accounting
principle, an after-tax loss of $1.9 million on the divestiture of Rutland Tool, which
was reported as a discontinued operation, and an estimated loss of $2.2 million ($1.4
million after tax) related to hurricanes Katrina and Rita. Working capital decreased in
fiscal 2006 compared to 2005 primarily due to an increase in the current portion of
long-term debt.(5)
    
    The results for fiscal 2005 include integration costs related to the
acquisition of the U.S. packaged gas business of The BOC Group, Inc. and employee
separation costs of $6.4 million ($4.0 million after tax). Fiscal 2005 also reflected a
full year of National Welders as a consolidated affiliate. See Note 13 to the
Consolidated Financial Statements included under Item 8, Financial Statements and
Supplementary Data.(6)
    
    The Company paid its stockholders quarterly cash dividends of $0.12 per share
at the end of each of the first two quarters of fiscal 2009. In the third and fourth
quarters of fiscal 2009, the Company paid dividends of $0.16 per share. During fiscal
2008, the Company paid regular quarterly cash dividends of $0.09 per share during the
first three quarters and $0.12 per share during the fourth quarter. In fiscal 2007,
fiscal 2006, and fiscal 2005, the Company paid its stockholders regular quarterly cash
dividends of $0.07, $0.06, and $0.045 per share, respectively. On May 19, 2009, the
Companys Board of Directors declared a regular quarterly cash dividend of $0.18 per
share, which is payable on June 30, 2009 to stockholders of record as of June 15, 2009.
Future dividend declarations and associated amounts paid will depend upon the Companys
earnings, financial condition, loan covenants, capital requirements and other factors
deemed relevant by management and the Companys Board of Directors. 19




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ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
 RESULTS OF OPERATIONS: 2009 COMPARED TO 2008
 OVERVIEW
    Acquisitions
  20




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Financing
   Stock Repurchase Plan
  Business Segments
  Enterprise Information System
  Looking Forward
  21




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INCOME STATEMENT COMMENTARY Three Months Ended March 31, 2009 Compared to Three Months Ended
March 31, 2008
 Net Sales
   Three Months EndedNet Sales
    
    March 31,(In thousands)
    
    2009
    
    
    2008
    
    
    Increase/ (Decrease)Distribution
    
    $
    893,967
    
    
    $
    995,125
    
    
    $
    (101,158
    )
    
    
    -10
    %All Other Operations
    
    
    103,559
    
    
    
    96,201
    
    
    
    7,358
    
    
    
    8
    %Intercompany eliminations
    
    
    (5,426
    )
    
    
    (4,729
    )
    
    
    (697
    )$
    992,100
    
    
    $
    1,086,597
    
    
    $
    (94,497
    )
    
    
    -9
    %
   22




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®
   Gross Profits (Excluding Depreciation)
   Three Months EndedGross Profits (excluding depreciation)
    
    March 31,(In thousands)
    
    2009
    
    
    2008
    
    
    Increase/ (Decrease)Distribution
    
    $
    498,358
    
    
    $
    520,956
    
    
    $
    (22,598
    )
    
    
    -4
    %All Other Operations
    
    
    46,013
    
    
    
    41,926
    
    
    
    4,087
    
    
    
    10
    %$
    544,371
    
    
    $
    562,882
    
    
    $
    (18,511
    )
    
    
    -3
    %
 23




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Operating Expenses
    Operating Income
  24




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Three Months EndedOperating Income
    
    March 31,(In thousands)
    
    2009
    
    
    2008
    
    
    Increase/ (Decrease)Distribution
    
    $
    105,295
    
    
    $
    120,656
    
    
    $
    (15,361
    )
    
    
    -13
    %All Other
Operations
    
    
    9,211
    
    
    
    10,404
    
    
    
    (1,193
    )
    
    
    -11
    %$
    114,506
    
    
    $
    131,060
    
    
    $
    (16,554
    )
    
    
    -13
    %
   INCOME STATEMENT COMMENTARY Fiscal Year Ended March 31, 2009 compared to Fiscal Year Ended
March 31, 2008
 Net Sales
  Year EndedNet Sales
    
    March 31,(In thousands)
    
    2009
    
    
    2008
    
    
    IncreaseDistribution
    
    $
    3,918,376
    
    
    $
    3,688,966
    
    
    $
    229,410
    
    
    
    6
    %All Other Operations
    
    
    457,329
    
    
    
    343,246
    
    
    
    114,083
    
    
    
    33
    %Intercompany eliminations
    
    
    (26,250
    )
    
    
    (15,188
    )
    
    
    (11,062
    )$
    4,349,455
    
    
    $
    4,017,024
    
    
    $
    332,431
    
    
    
    8
    %
  25




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##### Table of Contents



®
  Gross Profits (Excluding Depreciation)
  Year EndedGross Profits (excluding depreciation)
    
    March 31,(In thousands)
    
    2009
    
    
    2008
    
    
    IncreaseDistribution
    
    $
    2,105,251
    
    
    $
    1,918,966
    
    
    $
    186,285
    
    
    
    10
    %All Other Operations
    
    
    199,184
    
    
    
    168,795
    
    
    
    30,389
    
    
    
    18
    %$
    2,304,435
    
    
    $
    2,087,761
    
    
    $
    216,674
    
    
    
    10
    %
   26




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Operating Expenses
   Operating Income
  Year EndedOperating Income
    
    March 31,(In thousands)
    
    2009
    
    
    2008
    
    
    IncreaseDistribution
    
    $
    469,888
    
    
    $
    425,922
    
    
    $
    43,966
    
    
    
    10
    %All Other Operations
    
    
    54,980
    
    
    
    49,902
    
    
    
    5,078
    
    
    
    10
    %$
    524,868
    
    
    $
    475,824
    
    
    $
    49,044
    
    
    
    10
    %
   Interest Expense and Discount on Securitization of Trade Receivables
  27




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Income Tax Expense
  Net Earnings
  28




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##### Table of Contents



RESULTS OF OPERATIONS: 2008 COMPARED TO 2007
 OVERVIEW
   Acquisitions
   National Welders Exchange Transaction
  29




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##### Table of Contents



Supply Constraints
   Reinstated Stock Repurchase Plan
  30




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##### Table of Contents



INCOME STATEMENT COMMENTARY
 Net Sales
  Year EndedNet Sales
    
    March 31,(In thousands)
    
    2008
    
    
    2007
    
    
    IncreaseDistribution
    
    $
    3,688,966
    
    
    $
    2,939,285
    
    
    $
    749,681
    
    
    
    26
    %All Other Operations
    
    
    343,246
    
    
    
    277,729
    
    
    
    65,517
    
    
    
    24
    %Intercompany eliminations
    
    
    (15,188
    )
    
    
    (11,963
    )
    
    
    (3,225
    )$
    4,017,024
    
    
    $
    3,205,051
    
    
    $
    811,973
    
    
    
    25
    %
  2 ®
 ®
 31




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##### Table of Contents



Gross Profits (Excluding Depreciation)
  Year EndedGross Profits (excluding depreciation)
    
    March 31,(In thousands)
    
    2008
    
    
    2007
    
    
    IncreaseDistribution
    
    $
    1,918,966
    
    
    $
    1,494,081
    
    
    $
    424,885
    
    
    
    28
    %All Other Operations
    
    
    168,795
    
    
    
    143,738
    
    
    
    25,057
    
    
    
    17
    %$
    2,087,761
    
    
    $
    1,637,819
    
    
    $
    449,942
    
    
    
    27
    %
   Operating Expenses
  32




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##### Table of Contents



Operating Income
  Year EndedOperating Income
    
    March 31,(In thousands)
    
    2008
    
    
    2007
    
    
    IncreaseDistribution
    
    $
    425,922
    
    
    $
    298,565
    
    
    $
    127,357
    
    
    
    43
    %All Other Operations
    
    
    49,902
    
    
    
    42,932
    
    
    
    6,970
    
    
    
    16
    %$
    475,824
    
    
    $
    341,497
    
    
    $
    134,327
    
    
    
    39
    %
   Interest Expense and Discount on Securitization of Trade Receivables
 Loss on Debt Extinguishment
  33




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##### Table of Contents



Loss on Debt Extinguishment
  Income Tax Expense
  Net Earnings
  LIQUIDITY AND CAPITAL RESOURCES
 Fiscal 2009 Cash Flows
  34




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Dividends
  35




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##### Table of Contents



Financial Instruments
 Senior Credit Facility
    Total Borrowing Capacity
  36




---



##### Table of Contents



Money Market Loans
   Senior Subordinated Notes
   37




---



##### Table of Contents



Acquisition Notes and Other
  Refinancing of National Welders Debt
  Trade Receivables Securitization
   38




---



##### Table of Contents



Interest Rate Swap Agreements
     39




---



##### Table of Contents



OTHER
 Critical Accounting Estimates
  Trade Receivables/Subordinated Retained Interest
  Inventories
  40




---



##### Table of Contents



Goodwill and Other Intangible Assets
 Goodwill and Other Intangible
Assets
      41




---



##### Table of Contents



Business Insurance Reserves
  42




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##### Table of Contents



Contractual Obligations
  Payments Due by PeriodLess than 1
    
    
    
    
    
    
    
    
    
    More than 5(In thousands)
    
    Total
    
    Year (a)
    
    1 to 3 Years (a)
    
    3 to 5 Years (a)
    
    Years (a)Contractual Obligations:Long-term debt (1)
    
    $
    1,761,366
    
    
    $
    11,058
    
    
    $
    1,198,338
    
    
    $
    1,229
    
    
    $
    550,741Estimated interest payments on
long-term debt (2)
    
    
    359,942
    
    
    
    56,438
    
    
    
    96,538
    
    
    
    75,912
    
    
    
    131,054Estimated payments on
interest rate swap agreements
(3)
    
    
    12,524
    
    
    
    10,056
    
    
    
    2,468
    
    
    
    
    
    
    
    Non-compete agreements (4)
    
    
    21,607
    
    
    
    4,744
    
    
    
    7,364
    
    
    
    5,257
    
    
    
    4,242Letters of credit (5)
    
    
    41,782
    
    
    
    41,782
    
    
    
    
    
    
    
    
    
    
    
    Operating leases (6)
    
    
    295,034
    
    
    
    83,948
    
    
    
    128,051
    
    
    
    57,535
    
    
    
    25,500Purchase obligations:Liquid bulk gas supply
agreements (7)
    
    
    885,842
    
    
    
    125,577
    
    
    
    215,526
    
    
    
    201,596
    
    
    
    343,143Liquid carbon dioxide supply
agreements (8)
    
    
    201,193
    
    
    
    18,324
    
    
    
    28,238
    
    
    
    26,062
    
    
    
    128,569Ammonia supply agreements (9)
    
    
    2,017
    
    
    
    2,017
    
    
    
    
    
    
    
    
    
    
    
    Other purchase commitments (10)
    
    
    6,917
    
    
    
    6,917
    
    
    
    
    
    
    
    
    
    
    
    Construction commitments (11)
    
    
    9,867
    
    
    
    9,867
    
    
    
    
    
    
    
    
    
    
    
    Total Contractual Obligations
    
    $
    3,598,091
    
    
    $
    370,728
    
    
    $
    1,676,523
    
    
    $
    367,591
    
    
    $
    1,183,249
 
 (a)
    
    The Less than one Year column relates to obligations due in fiscal 2010.
The 1 to 3 Years column relates to obligations due in fiscal years ending March 31, 2011
and 2012. The 3 to 5 Years column relates to obligations due in fiscal years ending
March 31, 2013 and 2014. The More than 5 Years column relates to obligations due in
fiscal years ending March 31, 2015 and beyond.(1)
    
    Aggregate long-term debt instruments are reflected in the Consolidated Balance
Sheet as of March 31, 2009. Long-term debt includes capital lease obligations, which were
not material and, therefore, did not warrant separate disclosure. Principal payments on
the term loan under the Credit Facility are not reflected in the Less than 1 Year column
above due to the Companys ability and intention to refinance
the payments with borrowings under its long-term revolving credit line. See Note 10 to the
Consolidated Financial Statements for more information regarding long-term debt
instruments.(2)
    
    The future interest payments on the Companys long-term debt obligations were
estimated based on the current outstanding principal reduced by scheduled maturities in
each period presented and interest rates as of March 31, 2009. The actual interest
payments may differ materially from those presented above based on actual amounts of
long-term debt outstanding and actual interest rates in future periods. A majority of the
Companys variable rate debt is based on a spread over LIBOR. Based on the Companys
fixed to variable interest rate ratio at March 31, 2009, for every 25 basis point increase
in LIBOR, the Company estimates that its annual interest expense would increase
approximately by $2.2 million. 43




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##### Table of Contents



(3)
    
    Payments or receipts under interest rate swap agreements result from changes
in market interest rates compared to contractual rates and payments to be exchanged
between the parties to the agreements. The estimated payments in future periods were
determined based on forward LIBOR rates as of March 31, 2009. Actual payments or receipts
may differ materially from those presented above based on actual interest rates in future
periods.(4)
    
    Non-compete agreements are obligations of the Company to make scheduled future
payments, generally to former owners of acquired businesses, contingent upon their
compliance with the covenants of the non-compete agreement.(5)
    
    Letters of credit are guarantees of payment to third parties. The Companys
letters of credit principally back obligations associated with the Companys self-insured
retention on workers compensation, business automobile and general liability claims. The
letters of credit are supported by the Companys Credit Facility.(6)
    
    The Companys operating leases at March 31, 2009 include approximately $179
million in fleet vehicles under long-term operating leases. The Company guarantees a
residual value of $29 million related to its leased vehicles.(7)
    
    In addition to the gas volumes supplied by Airgas Merchant Gases, the Company
purchases industrial, medical and specialty gases pursuant to requirements contracts from
national and regional producers of industrial gases. The Company has a long-term
take-or-pay supply agreement, in effect through August 31, 2017, with Air Products to
supply the Company with bulk liquid nitrogen, oxygen and argon. Additionally, the Company
purchases helium and hydrogen gases from Air Products under long-term supply agreements.
Based on the volume of fiscal 2009 purchases, the Air Products supply agreements represent
approximately $55 million annually in liquid bulk gas purchases.The Company also has long-term take-or-pay supply agreements with Linde AG to purchase
oxygen, nitrogen, argon, helium and acetylene. The agreements expire at various dates
through July 2019 and represent almost $50 million in annual bulk gas purchases.
Additionally, the Company has long-term take-or-pay supply agreements to purchase oxygen,
nitrogen, argon and helium from other major producers. Annual purchases under these contracts are
approximately $20 million and they expire at various dates through 2024.The purchase commitments for future periods contained in the table above reflect estimates
based on fiscal 2009 purchases. The supply agreements noted above contain periodic
adjustments based on certain economic indices and market analysis. The Company believes
the minimum product purchases under the agreements are within the Companys normal product
purchases. Actual purchases in future periods under the supply agreements could differ
materially from those presented in the table due to fluctuations
in demand requirements related to varying sales levels as well as changes in economic
conditions.(8)
    
    The Company is a party to long-term take-or-pay supply agreements for the
purchase of liquid carbon dioxide with approximately 15 suppliers that expire at various
dates through 2044. The purchase commitments for future periods contained in the table
above reflect estimates based on fiscal 2009 purchases. The Company believes the minimum
product purchases under the agreements are within the Companys normal product purchases.
Actual purchases in future periods under the carbon dioxide supply agreements could differ
materially from those presented in the table due to fluctuations in demand requirements
related to varying sales levels as well as changes in economic conditions. Certain of the
liquid carbon dioxide supply agreements contain market pricing subject to certain economic
indices. 44




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##### Table of Contents



In June 2008, the Company signed a 15-year take-or-pay supply agreement with First
United Ethanol LLC, (FUEL) to supply the Company with feed stock of raw carbon dioxide.
The agreement is expected to commence in November 2009 after the Company completes its 450
tons per day liquification plant at FUELs new complex in Camilla, GA. Annual purchases
under this contract will be approximately $1.3 million annually.(9)
    
    The Company purchases ammonia from a variety of sources and is obligated to
purchase approximately $2 million annually under these contracts.(10)
    
    Other purchase commitments primarily include property, plant and equipment
expenditures.(11)
    
    Construction commitments represent outstanding commitments to customers
primarily to construct a raw liquid carbon dioxide plant in Camilla, GA. Off-Balance Sheet Arrangements
   Payments Due by Period(In thousands)
    
    
    
    
    
    Less than 1
    
    
    
    
    
    
    
    
    
    More than 5Off-balance sheet obligations as
of March 31, 2009:
    
    Total
    
    Year
    
    1 to 3 Years
    
    3 to 5 Years
    
    YearsTrade receivables
securitization
    
    $
    311,400
    
    
    $
    311,400
    
    
    $
    
    
    
    $
    
    
    
    $
    Estimated discount on
securitization
    
    
    3,800
    
    
    
    3,800
    
    
    
    
    
    
    
    
    
    
    
    Total off-balance sheet obligations
    
    $
    315,200
    
    
    $
    315,200
    
    
    $
    
    
    
    $
    
    
    
    $
    
 45




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##### Table of Contents



Accounting Pronouncements Issued But Not Yet Adopted
 Business Combinations
 Business Combinations
 Accounting
for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from
Contingencies
 Determination of the Useful Life of
Intangible Assets
 Accounting for Defensive
Intangible Assets
 Fair Value Measurements
 Effective Date of FASB Statement No. 157
 46




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##### Table of Contents



Interim Disclosures about
Fair Value of Financial Instruments
 Non-controlling Interests in Consolidated Financial Statements
 Noncontrolling Interests in Consolidated
Financial Statements Consolidated Financial Statements
 Forward-Looking Statements
  47




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48




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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Interest Rate Risk
   Fiscal Year of Maturity(In millions)
    
    2010
    
    2011
    
    2012
    
    2013
    
    2014
    
    Thereafter
    
    Total
    
    Fair ValueFixed Rate Debt:Acquisition notes and other
    
    $
    11
    
    
    $
    8
    
    
    $
    3
    
    
    $
    0.7
    
    
    $
    0.5
    
    
    $
    0.8
    
    
    $
    24
    
    
    $
    25Interest expense
    
    
    1.1
    
    
    
    0.6
    
    
    
    0.2
    
    
    
    0.1
    
    
    
    0.1
    
    
    
    0.1
    
    
    
    2.2Average interest rate
    
    
    6.13
    %
    
    
    6.18
    %
    
    
    6.25
    %
    
    
    5.85
    %
    
    
    6.18
    %
    
    
    5.68
    %Senior subordinated notes due 2014
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    150
    
    
    $
    150
    
    
    $
    140Interest expense
    
    
    9.4
    
    
    
    9.4
    
    
    
    9.4
    
    
    
    9.4
    
    
    
    9.4
    
    
    
    2.6
    
    
    
    49.6Interest rate
    
    
    6.25
    %
    
    
    6.25
    %
    
    
    6.25
    %
    
    
    6.25
    %
    
    
    6.25
    %
    
    
    6.25
    %Senior subordinated notes due 2018
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    400
    
    
    $
    400
    
    
    $
    378Interest expense
    
    
    28.5
    
    
    
    28.5
    
    
    
    28.5
    
    
    
    28.5
    
    
    
    28.5
    
    
    
    128.3
    
    
    
    270.8Interest rate
    
    
    7.13
    %
    
    
    7.13
    %
    
    
    7.13
    %
    
    
    7.13
    %
    
    
    7.13
    %
    
    
    7.13
    %
 Fiscal Year of Maturity(In millions)
    
    2010
    
    2011
    
    2012
    
    2013
    
    2014
    
    Thereafter
    
    Total
    
    Fair ValueVariable Rate Debt:Revolving credit borrowings- US
    
    $
    
    
    
    $
    
    
    
    $
    751
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    751
    
    
    $
    721Interest expense
    
    
    9.3
    
    
    
    9.3
    
    
    
    3.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    21.6Interest rate (a)
    
    
    1.24
    %
    
    
    1.24
    %
    
    
    1.24
    %Revolving credit borrowings- Canada
    
    $
    
    
    
    $
    
    
    
    $
    15
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    15
    
    
    $
    14Interest expense
    
    
    0.2
    
    
    
    0.2
    
    
    
    0.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.5Interest rate (a)
    
    
    1.49
    %
    
    
    1.49
    %
    
    
    1.49
    %Revolving credit borrowings- Multi-currency
    
    $
    
    
    
    $
    
    
    
    $
    24
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    24
    
    
    $
    23Interest expense
    
    
    0.5
    
    
    
    0.5
    
    
    
    0.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1.1Interest rate (a)
    
    
    2.05
    %
    
    
    2.05
    %
    
    
    2.05
    %Term loans (c)
    
    $
    
    
    
    $
    236
    
    
    $
    162
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    398
    
    
    $
    382Interest expense
    
    
    7.4
    
    
    
    6.0
    
    
    
    0.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14.2Interest rate (c)
    
    
    1.85
    %
    
    
    1.85
    %
    
    
    1.85
    %
 49




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##### Table of Contents



Fiscal Year of Maturity(In millions)
    
    2010
    
    2011
    
    2012
    
    2013
    
    2014
    
    Thereafter
    
    Total
    
    Fair ValueInterest Rate Swaps:18 swaps receive variable/pay fixedNotional amounts
    
    $
    377
    
    
    $
    250
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    627
    
    
    $
    12.5Swap payments
    
    
    10.0
    
    
    
    2.5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12.5$627 million notional amountVariable forward receive rate = 1.70%Weighted average pay rate = 4.21%Other Off-Balance SheetLIBOR-based Agreement (b):Trade receivables securitization
    
    $
    311
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    311
    
    
    $
    311Discount on securitization
    
    
    3.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3.8Variable discount rate at 3/31/2009 of
1.24%
 
 (a)
    
    The interest rate on the revolving credit facilities is the weighted average
of the variable interest rates on each of the U.S. dollar revolving credit line, the
multi-currency revolving credit line and the Canadian dollar credit line. The variable
interest rates on the U.S. dollar revolving credit line are based on a spread over LIBOR
applicable to each tranche under the U.S. credit line. The average of the variable
interest rates on the multi-currency portion of the Credit Facilities is based on a
spread over the Euro currency rate applicable to each foreign currency borrowing under
the multi-currency credit line. The average of the variable interest rates on the
Canadian dollar portion of the Credit Facility is based on a spread over the Canadian
Bankers Acceptance Rate applicable to each tranche under the Canadian credit line.(b)
    
    The trade receivables securitization agreement expires in March 2010. The
Company expects continued availability under the Agreement until it expires in March
2010 and under similar agreements thereafter. Given the contraction of the securitized
asset market in the current credit environment, the Company is evaluating the current
arrangement with the banks and will evaluate this and other financing alternatives in
fiscal 2010. Based on the characteristics of its receivable pool, the Company believes
that trade receivable securitization will continue to be an attractive source of funds.
In the event such source of funding was unavailable or reduced, the Company believes that
it would be able to secure an alternative source of funds.(c)
    
    The consolidated financial statements and related notes reflect the term
loans principal payments due through March 31, 2010 as long-term based on the Companys
ability and intention to refinance those principal payments with its revolving credit
line. Estimated interest payments on the term loans reflect the amortization of the
term loans principal for each period presented. Limitations of the Tabular Presentation
  Foreign Currency Rate Risk
  50




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##### Table of Contents



ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
  
 ITEM 9.
    
    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
  
 ITEM 9A. CONTROLS AND PROCEDURES.
 Evaluation of Disclosure Controls and Procedures
  Managements Report on Internal Control over Financial Reporting
 Internal Control  Integrated Framework.
  Changes in Internal Control
  
 ITEM 9B. OTHER INFORMATION.
  51




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##### Table of Contents



PART III
 
 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
  Item 401 Information
  Item 405 Information
  Item 406 Information
  Item 407(c)(3) Information
  Item 407(d)(4) and 407(d)(5) Information
  
 ITEM 11. EXECUTIVE COMPENSATION.
  52




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##### Table of Contents



ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS.
 Item 201(d) Information
  Equity Compensation Plan Information
  (a)
    
    
    (b)
    
    
    (c)Number of securitiesremaining available forNumber of securities to be
    
    
    Weighted-average
    
    
    future issuance under equityissued upon exercise of
    
    
    exercise price of
    
    
    compensation plansoutstanding options,
    
    
    outstanding options,
    
    
    (excluding securities reflectedPlan Category
    
    warrants and rights
    
    
    warrants and rights
    
    
    in column (a))Equity compensationplans approved by
    
    
    132,752
    
    
    $
    29.30
    
    
    834,243      ESPP shares (2)security holders
    
    
    6,640,369
    
    
    $
    30.71
    
    
    2,367,551 stock option
shares (1)Equity compensationplans not approvedby security holders
    
    
    
    
    
    
    
    
    
    
    Total:
    
    
    6,773,121
    
    
    $
    30.68
    
    
    
    3,201,794
 
 (1)
    
    At the Companys August 2006 Annual Meeting of Stockholders, the stockholders
approved the 2006 Equity Incentive Plan (the 2006 Equity Plan). The 2006 Equity Plan
replaced both the 1997 Stock Option Plan for Employees and the 1997 Directors Stock Option
Plan. Shares subject to outstanding stock options that terminate, expire or are canceled
without having been exercised and stock options available for grant under the prior stock
option plans were carried forward to the 2006 Equity Plan. Future grants of stock options
to employees and directors will be issued from the 2006 Equity Plan to the extent there are
options available for grant. As of March 31, 2009, only stock option awards have been
granted under the 2006 Equity Plan and predecessor stock option plans.(2)
    
    The Amended and Restated 2003 Employee Stock Purchase Plan (ESPP) was
approved by the Companys stockholders in August 2006. The ESPP encourages and assists
employees in acquiring an
equity interest in the Company by allowing eligible employees to purchase common stock at a
discount. Item 403 Information
  53




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##### Table of Contents



ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
  
 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
  
 PART IV
 
 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
    Exhibit No.
    
    Description3.1
    
    Amended and Restated Certificate of Incorporation of
Airgas, Inc. dated as of August 7, 1995. (Incorporated by reference to Exhibit 3.1 to
the Companys September 30, 1995 Quarterly Report on Form 10-Q).3.2
    
    Airgas, Inc. By-Laws Amended October 9, 2007. (Incorporated by reference to
Exhibit 3.1 to the Companys September 30, 2007 Quarterly Report on Form 10-Q).4.1
    
    The Eleventh Amended and Restated Credit Agreement, dated as of January 14,
2005, among Airgas, Inc., Airgas Canada, Inc., Red-D-Arc Limited, Bank of America,
N.A., as U.S. Administrative Agent and The Bank of Nova Scotia as Canadian
Administrative Agent. (Incorporated by reference to Exhibit 4 to the Companys
December 31, 2004 Quarterly Report on Form 10-Q).
 54




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##### Table of Contents



Exhibit No.
    
    Description4.2
    
    The Twelfth Amended and Restated Credit Agreement, dated as of July 25, 2006,
among Airgas, Inc., Airgas Canada, Inc., Red-D-Arc Limited, Bank of America, N.A., as
U.S. Administrative Agent and The Bank of Nova Scotia as Canadian Agent. (Incorporated
by reference to Exhibit 4 to the Companys September 30, 2006 Quarterly Report on Form
10-Q).4.3
    
    The First Amendment to the Twelfth Amended and Restated Credit Agreement, dated
as of July 3, 2007, among Airgas, Inc., Airgas Canada, Inc., Red-D-Arc Limited, Bank of
America, N.A., as U.S. Administrative Agent and The Bank of Nova Scotia as Canadian
Administrative Agent. (Incorporated by reference to Exhibit 4.1 to the Companys June
30, 2007 Quarterly Report on Form 10-Q).4.4
    
    Indenture dated as of August 1, 1996 of Airgas, Inc. to Bank of New York,
Trustee. (Incorporated by reference to Exhibit 4.5 to the Companys Registration
Statement on Form S-4 No. 333-23651 dated March 20, 1997).4.5
    
    Form of Airgas, Inc. Medium-Term Note. (Incorporated by reference to Exhibit
4(f) to the Companys Registration Statement on Form S-4 No. 333-08113 dated July 15,
1996).4.6
    
    Indenture, dated as of July 30, 2001, among Airgas, Inc., the subsidiary
guarantors of Airgas, Inc. and The Bank of New York, as Trustee, related to the 9.125%
Senior Subordinated Notes due 2011 (including exhibits). (Incorporated by reference to
Exhibit 4.7 to the Companys Registration Statement on Form S-4 No. 333-68722 dated
August 30, 2001 and as amended September 14, 2001).4.7
    
    Exchange and Registration Rights Agreement, dated as of July 30, 2001, among
Airgas, Inc., the subsidiary guarantors of Airgas, Inc. and the initial purchasers of
the 9.125% Senior Subordinated Notes due 2011. (Incorporated by reference to Exhibit
4.8 to the Companys Registration Statement on Form S-4 No. 333-68722 dated August 30,
2001 and as amended September 14, 2001).4.8
    
    Indenture, dated as of March 8, 2004, among Airgas, Inc., the subsidiary
guarantors of Airgas, Inc. and The Bank of New York, as Trustee, relating to the 6.25%
Senior Subordinated Notes due 2014. (Incorporated by reference to Exhibit 4.14 to the
Companys Registration Statement on Form S-4 No. 333-114499 dated April 15, 2004).4.9
    
    Exchange and Registration Rights Agreement, dated as of March 8, 2004, among
Airgas, Inc., the subsidiary guarantors of Airgas, Inc. and the initial purchasers of
the 6.25% Senior Subordinated Notes due 2014. (Incorporated by reference to Exhibit
4.15 to the Companys Registration Statement on Form S-4 No. 333-114499 dated April 15,
2004).4.10
    
    Rights Agreement, dated as of May 8, 2007, between Airgas, Inc. and The Bank of
New York, as Rights Agent, which includes as Exhibits thereto the Form of Certificate
of Designation, the Form of Right Certificate and the Summary of Rights attached
thereto as Exhibits A, B and C, respectively. (Incorporated by reference to Exhibit
4.1 to the Companys May 10, 2007 Current Report on Form 8-K).
 55




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##### Table of Contents



Exhibit No.
    
    Description4.11
    
    Indenture, dated as of June 10, 2008, among Airgas, Inc., the subsidiary
guarantors ofAirgas, Inc. and The Bank of New York, as Trustee, relating to the 7.125%
Senior Subordinated Notes due 2018. (Incorporated by reference to Exhibit 4.1 to the
Companys June 10, 2008 Current Report on Form 8-K).4.12
    
    Exchange and Registration Rights Agreement, dated as of June 10, 2008, among
Airgas, Inc., the subsidiary guarantors of Airgas, Inc. and the initial purchasers of
the 7.125% Senior Subordinated Notes due 2014. (Incorporated by reference to Exhibit
4.2 to the Companys June 10, 2008 Current Report on Form 8-K).4.13
    
    The Second Amendment to the Twelfth Amended and Restated
Credit Agreement, dated as of April 2, 2008, among Airgas, Inc., Airgas Canada, Inc.,
Red-D-Arc Limited, Bank of America, N.A., as U.S. Administrative Agent, and The Bank of
Nova Scotia, as Canadian Administrative Agent. (Incorporated by reference to Exhibit
4.1 to the Companys September 30, 2008 Quarterly Report on Form 10-Q).4.14
    
    The Third Amendment to the Twelfth Amended and Restated
Credit Agreement, dated as of July 28, 2008, among Airgas, Inc., Airgas Canada, Inc.,
Red-D-Arc Limited, Bank of America, N.A., as U.S. Administrative Agent, and The Bank of
Nova Scotia, as Canadian Administrative Agent. (Incorporated by reference to Exhibit
4.2 to the Companys September 30, 2008 Quarterly Report on Form 10-Q).There are no other instruments with respect to long-term debt of the Company
that involve indebtedness or securities exceeding ten percent of the total
assets of the Company and its subsidiaries on a consolidated basis. The
Company agrees to file a copy of any instrument or agreement defining the
rights of holders of long-term debt of the Company upon request of the
Securities and Exchange Commission* 10.1
    
    Amended and Restated 2003 Employee Stock Purchase Plan dated June 21,
2006, and approved by the Companys stockholders on August 9, 2006. (Incorporated by
reference to the Definitive Proxy Statement on Form DEF14A dated June 30, 2006).* 10.2
    
    1997 Stock Option Plan, as amended through May 7, 2002, and approved by
the Companys stockholders on July 31, 2002. (Incorporated by reference to Exhibit
10.1 to the Companys June 30, 2002 Quarterly Report on Form 10-Q).* 10.3
    
    1997 Directors Stock Option Plan as amended on May 25, 2004, and approved
by the Companys stockholders on August 4, 2004. (Incorporated by reference to the
Definitive Proxy Statement on Form DEF14A dated June 28, 2004).* 10.4
    
    2006 Equity Incentive Plan dated June 21, 2006, and approved by the
Companys stockholders on August 9, 2006. (Incorporated by reference to Exhibit 10.1
to the Companys August 9, 2006 Current Report on Form 8-K).* 10.5
    
    Airgas, Inc. Deferred Compensation Plan dated December 17, 2001.
(Incorporated by reference to Exhibit 4 to the Companys Registration Statement on Form
S-8 No. 333-75258 dated December 17, 2001).
 56




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##### Table of Contents



Exhibit No.
    
    Description* 10.6
    
    Airgas, Inc. Deferred Comp Plan II dated May 23, 2006. (Incorporated by
reference to Exhibit 4 to the Companys Registration Statement on Form S-8 No.
333-136463 dated August 9, 2006).* 10.7
    
    Airgas, Inc. Executive Bonus Plan.* 10.8
    
    Bulk Gas Business Equity Purchase Agreement, dated November 22, 2006, by
and among Holox (USA) B.V., Holox Inc., Linde AG and Airgas, Inc. (Incorporated by
reference to Exhibit 10.1 to the Companys December 31, 2006 Quarterly Report on Form
10-Q).* 10.9
    
    Packaged Gas Business Equity Purchase Agreement, dated March 29, 2007, by
and among Linde Gas Inc., Linde Aktiengesellschaft, and Airgas, Inc. (Incorporated by
reference to Exhibit 10.14 to the Companys March 31, 2007 Annual Report on Form 10-K).* 10.10
    
    Amended and restated Change of Control Agreement between Airgas, Inc. and
Michael L. Molinini dated December 31, 2008. (Incorporated by reference to Exhibit
10.1 to the Companys January 7, 2009 Current Report on Form 8-K). Nine other
executive officers and one additional officer are parties to identical agreements.* 10.11
    
    Amended and Restated Executive Severance Agreement between Airgas, Inc.
and Peter McCausland dated December 31, 2008. (Incorporated by reference to Exhibit
10.2 to the Companys January 7, 2009 Current Report on Form 8-K).* 10.12
    
    Amended and Restated Executive Severance Agreement between Airgas, Inc.
and Peter McCausland dated May 29, 2009.12
    
    Statement re: computation of the ratio of earnings to fixed charges.21
    
    Subsidiaries of the Company.23
    
    Consent of Independent Registered Public Accounting Firm.31.1
    
    Certification of Peter McCausland as Chairman and Chief Executive Officer of
Airgas, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Robert M. McLaughlin as Senior Vice President and Chief
Financial Officer of Airgas, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.32.1
    
    Certification of Peter McCausland as Chairman and Chief Executive Officer of
Airgas, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.32.2
    
    Certification of Robert M. McLaughlin as Senior Vice President and Chief
Financial Officer of Airgas, Inc. pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    A management contract or compensatory plan required to be filed by Item 13 of this Report. 57




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##### Table of Contents



SIGNATURES
   Airgas, Inc.
(Registrant)By:
    /s/ Peter McCauslandPeter McCauslandChairman, President and Chief Executive Officer  Signature
    
    Title
    
    Date/s/ Peter McCausland
(Peter McCausland)
    
    Director, Chairman of the Board,
President and Chief Executive Officer
    
    June 1, 2009/s/ Robert M. McLaughlin

(Robert M. McLaughlin)
    
    Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
    
    June 1, 2009/s/ Thomas M. Smyth

(Thomas M. Smyth)
    
    Vice President and Controller
(Principal Accounting Officer)
    
    June 1, 2009/s/ W. Thacher Brown
    
    Director
    
    June 1, 2009(W. Thacher Brown)/s/ James W. Hovey
    
    Director
    
    June 1, 2009(James W. Hovey)/s/ Richard C. Ill
    
    Director
    
    June 1, 2009(Richard C. Ill)/s/ Paula A. Sneed
    
    Director
    
    June 1, 2009(Paula A. Sneed)
 58




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##### Table of Contents



Signature
    
    Title
    
    Date/s/ David M. Stout
    
    Director
    
    June 1, 2009(David M. Stout)/s/ Lee M. Thomas
    
    Director
    
    June 1, 2009(Lee M. Thomas)/s/ John C. van Roden, Jr.
    
    Director
    
    June 1, 2009(John C. van Roden, Jr.)/s/ Ellen C. Wolf
    
    Director
    
    June 1, 2009(Ellen C. Wolf)
 59




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##### Table of Contents



SIGNATURES
   Airgas East, Inc.
(Registrant)By:
    /s/ Thomas M. SmythThomas M. SmythVice President and Director  Signature
    
    Title
    
    Date/s/ Fred Manley

(Fred Manley)
    
    President and Director
(Principal Executive Officer)
    
    June 1, 2009/s/ Thomas M. Smyth

(Thomas M. Smyth)
    
    Vice President and Director
(Principal Financial Officer/Principal
Accounting Officer)
    
    June 1, 2009/s/ B. Shaun Powers

(B. Shaun Powers)
    
    Director
    
    June 1, 2009
 60




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##### Table of Contents



SIGNATURES
   Airgas Great Lakes, Inc.
(Registrant)By:
    /s/ Thomas M. SmythThomas M. SmythVice President and Director  Signature
    
    Title
    
    Date/s/ Kevin McBride

(Kevin McBride)
    
    President and Director
(Principal Executive Officer)
    
    June 1, 2009/s/ Thomas M. Smyth

(Thomas M. Smyth)
    
    Vice President and Director
(Principal Financial Officer/Principal
Accounting Officer)
    
    June 1, 2009/s/ B. Shaun Powers

(B. Shaun Powers)
    
    Director
    
    June 1, 2009
 61




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##### Table of Contents



SIGNATURES
   Airgas Mid America, Inc.
(Registrant)By:
    /s/ Thomas M. SmythThomas M. SmythVice President and Director  Signature
    
    Title
    
    Date/s/ J. Robert Hilliard

(J. Robert Hilliard)
    
    President and Director
(Principal Executive Officer)
    
    June 1, 2009/s/ Thomas M. Smyth

(Thomas M. Smyth)
    
    Vice President and Director
(Principal Financial Officer/Principal
Accounting Officer)
    
    June 1, 2009/s/ B. Shaun Powers

(B. Shaun Powers)
    
    Director
    
    June 1, 2009
 62




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##### Table of Contents



SIGNATURES
   Airgas North Central, Inc.
(Registrant)By:
    /s/ Thomas M. SmythThomas M. SmythVice President and Director  Signature
    
    Title
    
    Date/s/ Ronald Stark

(Ronald Stark)
    
    President and Director
(Principal Executive Officer)
    
    June 1, 2009/s/ Thomas M. Smyth

(Thomas M. Smyth)
    
    Vice President and Director
(Principal Financial Officer/Principal
Accounting
Officer)
    
    June 1, 2009/s/ B. Shaun Powers

(B. Shaun Powers)
    
    Director
    
    June 1, 2009
 63




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##### Table of Contents



SIGNATURES
   Airgas South, Inc.
(Registrant)By:
    /s/ Thomas M. SmythThomas M. SmythVice President and Director  Signature
    
    Title
    
    Date/s/ L. Jay Sullivan

(L. Jay Sullivan)
    
    President and Director
(Principal Executive Officer)
    
    June 1, 2009/s/ Thomas M. Smyth

(Thomas M. Smyth)
    
    Vice President and Director
(Principal Financial Officer/Principal
Accounting
Officer)
    
    June 1, 2009/s/ B. Shaun Powers

(B. Shaun Powers)
    
    Director
    
    June 1, 2009
 64




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##### Table of Contents



SIGNATURES
   Airgas Mid South, Inc.
(Registrant)By:
    /s/ Thomas M. SmythThomas M. SmythVice President and Director  Signature
    
    Title
    
    Date/s/ Terry Lodge

(Terry Lodge)
    
    President and Director
(Principal Executive Officer)
    
    June 1, 2009/s/ Thomas M. Smyth

(Thomas M. Smyth)
    
    Vice President and Director
(Principal Financial Officer/Principal
Accounting
Officer)
    
    June 1, 2009/s/ Max D. Hooper

(Max D. Hooper)
    
    Director
    
    June 1, 2009
 65




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##### Table of Contents



SIGNATURES
   Airgas Intermountain, Inc.
(Registrant)By:
    /s/ Thomas M. SmythThomas M. SmythVice President and Director  Signature
    
    Title
    
    Date/s/ Douglas L. Jones

(Douglas L. Jones)
    
    President and Director
(Principal Executive Officer)
    
    June 1, 2009/s/ Thomas M. Smyth

(Thomas M. Smyth)
    
    Vice President and Director
(Principal Financial Officer/
(Principal
Accounting Officer)
    
    June 1, 2009/s/ Max D. Hooper

(Max D. Hooper)
    
    Director
    
    June 1, 2009
 66




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##### Table of Contents



SIGNATURES
   Airgas Nor Pac, Inc.
(Registrant)By:
    /s/ Thomas M. SmythThomas M. SmythVice President and Director  Signature
    
    Title
    
    Date/s/ Daniel L. Tatro

(Daniel L. Tatro)
    
    President and Director
(Principal Executive Officer)
    
    June 1, 2009/s/ Thomas M. Smyth

(Thomas M. Smyth)
    
    Vice President and Director
(Principal Financial Officer/Principal
Accounting
Officer)
    
    June 1, 2009/s/ Max D. Hooper

(Max D. Hooper)
    
    Director
    
    June 1, 2009
 67




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##### Table of Contents



SIGNATURES
   Airgas Northern California & Nevada, Inc.
(Registrant)By:
    /s/ Thomas M. SmythThomas M. SmythVice President and Director  Signature
    
    Title
    
    Date/s/ Mike Chandler

(Mike Chandler)
    
    President and Director
(Principal Executive Officer)
    
    June 1, 2009/s/ Thomas M. Smyth

(Thomas M. Smyth)
    
    Vice President and Director
(Principal Financial Officer/Principal
Accounting
Officer)
    
    June 1, 2009/s/ Max D. Hooper

(Max D. Hooper)
    
    Director
    
    June 1, 2009
 68




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##### Table of Contents



SIGNATURES
   Airgas Southwest, Inc.
(Registrant)By:
    /s/ Thomas M. SmythThomas M. SmythVice President and Director  Signature
    
    Title
    
    Date/s/ J. Brent Sparks

(J. Brent Sparks)
    
    President and Director
(Principal Executive Officer)
    
    June 1, 2009/s/ Thomas M. Smyth

(Thomas M. Smyth)
    
    Vice President and Director
(Principal Financial Officer/Principal
Accounting
Officer)
    
    June 1, 2009/s/ Max D. Hooper

(Max D. Hooper)
    
    Director
    
    June 1, 2009
 69




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##### Table of Contents



SIGNATURES
   Airgas West, Inc.
(Registrant)By:
    /s/ Thomas M. SmythThomas M. SmythVice President and Director  Signature
    
    Title
    
    Date/s/ Sam Thompson

(Sam Thompson)
    
    President and Director
(Principal Executive Officer)
    
    June 1, 2009/s/ Thomas M. Smyth

(Thomas M. Smyth)
    
    Vice President and Director
(Principal Financial Officer/Principal
Accounting
Officer)
    
    June 1, 2009/s/ Max D. Hooper

(Max D. Hooper)
    
    Director
    
    June 1, 2009
 70




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##### Table of Contents



SIGNATURES
   Airgas Safety, Inc.
(Registrant)By:
    /s/ Thomas M. SmythThomas M. SmythVice President and Director  Signature
    
    Title
    
    Date/s/ Don Carlino

(Don Carlino)
    
    President
(Principal Executive Officer)
    
    June 1, 2009/s/ Thomas M. Smyth

(Thomas M. Smyth)
    
    Vice President and Director
(Principal Financial Officer/Principal
Accounting
Officer)
    
    June 1, 2009/s/ Michael L. Molinini

(Michael L. Molinini)
    
    Director
    
    June 1, 2009
 71




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##### Table of Contents



SIGNATURES
   Airgas Carbonic, Inc.
(Registrant)By:
    /s/ Thomas M. SmythThomas M. SmythVice President and Director  Signature
    
    Title
    
    Date/s/ Philip J. Filer

(Philip J. Filer)
    
    President and Director
(Principal Executive Officer)
    
    June 1, 2009/s/ Thomas M. Smyth

(Thomas M. Smyth)
    
    Vice President and Director
(Principal Financial Officer/Principal
Accounting Officer)
    
    June 1, 2009/s/ Peter McCausland

(Peter McCausland)
    
    Director
    
    June 1, 2009
 72




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##### Table of Contents



SIGNATURES
   Airgas Specialty Gases, Inc.
(Registrant)By:
    /s/ Thomas M. SmythThomas M. SmythVice President and Director  Signature
    
    Title
    
    Date/s/ William Russo

(William Russo)
    
    President and Director
(Principal Executive Officer)
    
    June 1, 2009/s/ Thomas M. Smyth

(Thomas M. Smyth)
    
    Vice President and Director
(Principal Financial Officer/Principal
Accounting Officer)
    
    June 1, 2009/s/ Jim Muller

(Jim Muller)
    
    Director
    
    June 1, 2009
 73




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##### Table of Contents



SIGNATURES
   Nitrous Oxide Corp.
(Registrant)By:
    /s/ Thomas M. SmythThomas M. SmythVice President and Director  Signature
    
    Title
    
    Date/s/ Martin Tupman

(Martin Tupman)
    
    President and Director
(Principal Executive Officer)
    
    June 1, 2009/s/ Thomas M. Smyth

(Thomas M. Smyth)
    
    Vice President and Director
(Principal Financial Officer/Principal
Accounting Officer)
    
    June 1, 2009/s/ Andy Cichocki

(Andy Cichocki)
    
    Director
    
    June 1, 2009
 74




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##### Table of Contents



SIGNATURES
   Red-D-Arc Inc.
(Registrant)By:
    /s/ Thomas M. SmythThomas M. SmythVice President and Director  Signature
    
    Title
    
    Date/s/ Mitch M. Imielinski

(Mitch M. Imielinski)
    
    President and Director
(Principal Executive Officer)
    
    June 1, 2009/s/ Thomas M. Smyth

(Thomas M. Smyth)
    
    Vice President and Director
(Principal Financial Officer/Principal
Accounting Officer)
    
    June 1, 2009/s/ John J.  Appolonia

(John J.  Appolonia)
    
    Director
    
    June 1, 2009
 75




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##### Table of Contents



SIGNATURES
   Airgas Data, LLC
(Registrant)By:
    /s/ Thomas M. SmythThomas M. SmythVice President and Director  Signature
    
    Title
    
    Date/s/ Carey M. Verger

(Carey M. Verger)
    
    Vice President
(Principal Executive Officer)
    
    June 1, 2009/s/ Thomas M. Smyth

(Thomas M. Smyth)
    
    Vice President and Director
(Principal Financial Officer/Principal
Accounting Officer)
    
    June 1, 2009
 76




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 PageReference InAnnual ReportOn Form 10-KFinancial Statements:Statement of Managements Financial Responsibility
    
    
    F-2Managements Report on Internal Control Over Financial Reporting
    
    
    F-3Report of Independent Registered Public Accounting Firm
    
    
    F-4Consolidated Statements of Earnings for the Years Ended
March 31, 2009, 2008 and 2007
    
    
    F-5Consolidated Balance Sheets as of March 31, 2009 and 2008
    
    
    F-6Consolidated Statements of Stockholders Equity for the
Years Ended March 31, 2009, 2008 and 2007
    
    
    F-7Consolidated Statements of Cash Flows for the Years Ended
March 31, 2009, 2008 and 2007
    
    
    F-8Notes to Consolidated Financial Statements
    
    
    F-9Financial Statement Schedule:Schedule II  Valuation and Qualifying Accounts
    
    
    F-56
  F - 1




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##### Table of Contents



Internal
Control  Integrated Framework
   /s/ Peter McCausland
    
    /s/ Robert M. McLaughlinPeter McCausland
    
    Robert M. McLaughlinChairman, President and
    
    Senior Vice President andChief Executive Officer
    
    Chief Financial Officer
  F - 2




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##### Table of Contents



Internal Control  Integrated Framework
  /s/ Peter McCausland
    
    /s/ Robert M. McLaughlinPeter McCausland
    
    Robert M. McLaughlinChairman, President and
    
    Senior Vice President andChief Executive Officer
    
    Chief Financial Officer
  F - 3




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
   Internal Control  Integrated Framework
    Internal Control  Integrated Framework
 Accounting for
Uncertainty in Income Taxes,
  
 F - 4




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF EARNINGS
 Years Ended March 31,(In thousands, except per share amounts)
    
    2009
    
    2008
    
    2007Net Sales
    
    $
    4,349,455
    
    
    $
    4,017,024
    
    
    $
    3,205,051Cost and ExpensesCost of products sold (excluding depreciation expense)
    
    
    2,045,020
    
    
    
    1,929,263
    
    
    
    1,567,232Selling, distribution and administrative expenses
    
    
    1,558,772
    
    
    
    1,422,162
    
    
    
    1,148,979Depreciation
    
    
    198,033
    
    
    
    175,802
    
    
    
    138,818Amortization (Note 8)
    
    
    22,762
    
    
    
    13,973
    
    
    
    8,525Total costs and expenses
    
    
    3,824,587
    
    
    
    3,541,200
    
    
    
    2,863,554Operating Income
    
    
    524,868
    
    
    
    475,824
    
    
    
    341,497Interest expense, net (Note 16)
    
    
    (84,395
    )
    
    
    (89,485
    )
    
    
    (60,180
    )Discount on securitization of trade receivables (Note 4)
    
    
    (10,738
    )
    
    
    (17,031
    )
    
    
    (13,630
    )Loss on the extinguishment of debt (Note 10)
    
    
    
    
    
    
    
    
    
    
    (12,099
    )Other income (expense), net
    
    
    (382
    )
    
    
    1,454
    
    
    
    1,556Earnings before income taxes and minority interest
    
    
    429,353
    
    
    
    370,762
    
    
    
    257,144Income taxes (Note 6)
    
    
    (168,265
    )
    
    
    (144,184
    )
    
    
    (99,883
    )Minority interest in earnings of consolidated affiliate (Note 13)
    
    
    
    
    
    
    (3,230
    )
    
    
    (2,845
    )Net Earnings
    
    $
    261,088
    
    
    $
    223,348
    
    
    $
    154,416Net Earnings per Common Share(Note 17)Basic earnings per share
    
    $
    3.19
    
    
    $
    2.74
    
    
    $
    1.98Diluted earnings per share
    
    $
    3.12
    
    
    $
    2.66
    
    
    $
    1.92Weighted average shares outstanding:Basic
    
    
    81,926
    
    
    
    81,402
    
    
    
    78,025Diluted
    
    
    83,816
    
    
    
    84,235
    
    
    
    82,566
  F - 5




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
 March 31,(In thousands, except per share amounts)
    
    2009
    
    
    2008ASSETSCurrent AssetsCash
    
    $
    47,188
    
    
    $
    43,048Trade receivables, less allowances for doubtful accounts
of $27,572 in 2009 and $22,624 in 2008 (Note 4)
    
    
    184,739
    
    
    
    183,569Inventories, net (Note 5)
    
    
    390,445
    
    
    
    330,732Deferred income tax asset, net (Note 6)
    
    
    34,760
    
    
    
    22,258Prepaid expenses and other current assets
    
    
    60,838
    
    
    
    67,110Total current
assets
    
    
    717,970
    
    
    
    646,717Plant and equipment at cost (Note 7)
    
    
    3,558,730
    
    
    
    3,232,673Less accumulated depreciation
    
    
    (1,192,204
    )
    
    
    (1,037,803
    )Plant and
equipment, net
    
    
    2,366,526
    
    
    
    2,194,870Goodwill (Note 8)
    
    
    1,063,370
    
    
    
    969,059Other intangible assets, net (Note 8)
    
    
    216,070
    
    
    
    148,998Other non-current assets
    
    
    35,601
    
    
    
    27,620Total assets
    
    $
    4,399,537
    
    
    $
    3,987,264LIABILITIES AND STOCKHOLDERS EQUITYCurrent LiabilitiesAccounts payable, trade
    
    $
    156,838
    
    
    $
    185,111Accrued expenses and other current liabilities (Note 9)
    
    
    264,564
    
    
    
    288,883Current portion of long-term debt (Note 10)
    
    
    11,058
    
    
    
    40,400Total current
liabilities
    
    
    432,460
    
    
    
    514,394Long-term debt, excluding current portion (Note 10)
    
    
    1,750,308
    
    
    
    1,539,648Deferred income tax liability, net (Note 6)
    
    
    565,783
    
    
    
    439,782Other non-current liabilities
    
    
    79,231
    
    
    
    80,104Commitments and contingencies (Note 19)Stockholders Equity(Note 14)Preferred stock, 20,030 shares authorized, no shares issued or
outstanding in 2009 and 2008
    
    
    
    
    
    
    Common stock, par value $0.01 per share, 200,000 shares authorized,
85,542 and 84,076 shares issued in 2009 and 2008, respectively
    
    
    856
    
    
    
    841Capital in excess of par value
    
    
    533,030
    
    
    
    468,302Retained earnings
    
    
    1,198,985
    
    
    
    983,663Accumulated other comprehensive loss
    
    
    (10,753
    )
    
    
    (4,713
    )Treasury stock, 4,139 and 1,788 common shares at cost in 2009 and 2008, respectively
    
    
    (150,363
    )
    
    
    (34,757
    )Total stockholders equity
    
    
    1,571,755
    
    
    
    1,413,336Total liabilities and stockholders equity
    
    $
    4,399,537
    
    
    $
    3,987,264
  F - 6




---



##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
 Years Ended March 31, 2009, 2008 and 2007Shares of
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    AccumulatedCommon
    
    
    
    
    
    
    Capital in
    
    
    
    
    
    
    Other
    
    
    Shares of
    
    
    
    
    
    
    TotalStock $0.01
    
    
    Common
    
    
    Excess of
    
    
    Retained
    
    
    Comprehensive
    
    
    Treasury
    
    
    Treasury
    
    
    Stockholders(In thousands)
    
    Par Value
    
    
    Stock
    
    
    Par Value
    
    
    Earnings
    
    
    Income (Loss)
    
    
    Stock
    
    
    Stock
    
    
    EquityBalance  April 1, 2006
    
    
    78,569
    
    
    $
    786
    
    
    $
    289,598
    
    
    $
    665,158
    
    
    $
    4,751
    
    
    
    (1,292
    )
    
    $
    (13,134
    )
    
    $
    947,159Cumulative adjustment to retained earnings for
adoption of SAB 108, net of tax (Note 2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,161
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,161
    )Comprehensive income:Net earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    154,416
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    154,416Foreign currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    2Net change in fair value of interest rate swap
agreements (Note 11)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (850
    )
    
    
    
    
    
    
    
    
    
    
    (850
    )Net tax benefit of other comprehensive income items
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    280
    
    
    
    
    
    
    
    
    
    
    
    280Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    153,848Shares issued with connection with stock options
exercised (Note 15)
    
    
    960
    
    
    
    10
    
    
    
    15,097
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,107Dividends paid on common stock ($0.28) (Note 14)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (21,980
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (21,980
    )Tax benefit associated with the exercise of stock options
    
    
    
    
    
    
    
    
    
    
    9,013
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,013Shares issued in connection with the
Employee Stock Purchase Plan (Note 15)
    
    
    431
    
    
    
    3
    
    
    
    11,948
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,951Expense related to stock-based compensation (Note 15)
    
    
    
    
    
    
    
    
    
    
    15,445
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,445Balance  March 31, 2007
    
    
    79,960
    
    
    $
    799
    
    
    $
    341,101
    
    
    $
    792,433
    
    
    $
    4,183
    
    
    
    (1,292
    )
    
    $
    (13,134
    )
    
    $
    1,125,382Cumulative adjustment to retained earnings for
adoption of FIN 48 (Note 6)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (290
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (290
    )Comprehensive income:Net earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    223,348
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    223,348Foreign currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,738
    
    
    
    
    
    
    
    
    
    
    
    4,738Net change in fair value of interest rate swap
agreements (Note 11)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (20,956
    )
    
    
    
    
    
    
    
    
    
    
    (20,956
    )Net tax benefit of other comprehensive income items
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,322
    
    
    
    
    
    
    
    
    
    
    
    7,322Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    214,452Shares issued with connection with stock options
exercised (Note 15)
    
    
    1,238
    
    
    
    13
    
    
    
    20,368
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,381Dividends paid on common stock ($0.39) (Note 14)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (31,828
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (31,828
    )Tax benefit associated with the exercise of stock options
    
    
    
    
    
    
    
    
    
    
    13,327
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,327Shares issued in connection with the
Employee Stock Purchase Plan (Note 15)
    
    
    407
    
    
    
    4
    
    
    
    14,087
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,091Expense related to stock-based compensation (Note 15)
    
    
    
    
    
    
    
    
    
    
    15,587
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,587National Welders exchange transaction (Note 13)
    
    
    2,471
    
    
    
    25
    
    
    
    63,832
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    63,857Purchase of treasury stock (Note 14)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (496
    )
    
    
    (21,623
    )
    
    
    (21,623
    )Balance  March 31, 2008
    
    
    84,076
    
    
    $
    841
    
    
    $
    468,302
    
    
    $
    983,663
    
    
    $
    (4,713
    )
    
    
    (1,788
    )
    
    $
    (34,757
    )
    
    $
    1,413,336Comprehensive income:Net earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    261,088
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    261,088Foreign currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,451
    )
    
    
    
    
    
    
    
    
    
    
    (11,451
    )Net change in fair value of interest rate swap
agreements (Note 11)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,325
    
    
    
    
    
    
    
    
    
    
    
    8,325Net tax expense of other comprehensive income items
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,914
    )
    
    
    
    
    
    
    
    
    
    
    (2,914
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    255,048Shares issued with connection with stock options
exercised (Note 15)
    
    
    1,027
    
    
    
    10
    
    
    
    16,178
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16,188Dividends paid on common stock ($0.56) (Note 14)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (45,766
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (45,766
    )Tax benefit associated with the exercise of stock options
    
    
    
    
    
    
    
    
    
    
    11,846
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,846Shares issued in connection with the
Employee Stock Purchase Plan (Note 15)
    
    
    439
    
    
    
    5
    
    
    
    16,502
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16,507Expense related to stock-based compensation (Note 15)
    
    
    
    
    
    
    
    
    
    
    20,202
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,202Purchase of treasury stock (Note 14)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,351
    )
    
    
    (115,606
    )
    
    
    (115,606
    )Balance  March 31, 2009
    
    
    85,542
    
    
    $
    856
    
    
    $
    533,030
    
    
    $
    1,198,985
    
    
    $
    (10,753
    )
    
    
    (4,139
    )
    
    $
    (150,363
    )
    
    $
    1,571,755
  F - 7




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 Years Ended March 31,(In thousands)
    
    2009
    
    2008
    
    2007CASH FLOWS FROM OPERATING ACTIVITIESNet earnings
    
    $
    261,088
    
    
    $
    223,348
    
    
    $
    154,416Adjustments to reconcile net earnings to net cash provided by
operating activities:Depreciation
    
    
    198,033
    
    
    
    175,802
    
    
    
    138,818Amortization
    
    
    22,762
    
    
    
    13,973
    
    
    
    8,525Deferred income taxes
    
    
    103,280
    
    
    
    74,725
    
    
    
    51,911Loss (gain) on sales of plant and equipment
    
    
    (964
    )
    
    
    714
    
    
    
    39Minority interest in earnings
    
    
    
    
    
    
    3,230
    
    
    
    2,845Stock-based compensation expense
    
    
    20,635
    
    
    
    16,629
    
    
    
    15,445Loss on debt extinguishment
    
    
    
    
    
    
    
    
    
    
    12,099Changes in assets and liabilities, excluding effects of business
acquisitions and divestitures:Securitization of trade receivables
    
    
    (48,600
    )
    
    
    95,600
    
    
    
    20,200Trade receivables, net
    
    
    77,209
    
    
    
    (23,308
    )
    
    
    (37,687
    )Inventories, net
    
    
    441
    
    
    
    (37,079
    )
    
    
    (1,491
    )Prepaid expenses and other current assets
    
    
    4,362
    
    
    
    1,693
    
    
    
    (23,326
    )Accounts payable, trade
    
    
    (40,239
    )
    
    
    8,053
    
    
    
    (15,163
    )Accrued expenses and other current liabilities
    
    
    (15,097
    )
    
    
    (749
    )
    
    
    266Other non-current assets
    
    
    (673
    )
    
    
    (81
    )
    
    
    1,809Other non-current liabilities
    
    
    530
    
    
    
    (2,624
    )
    
    
    (2,363
    )Net cash provided by operating activities
    
    
    582,767
    
    
    
    549,926
    
    
    
    326,343CASH FLOWS FROM INVESTING ACTIVITIESCapital expenditures
    
    
    (351,912
    )
    
    
    (267,378
    )
    
    
    (238,274
    )Proceeds from sales of plant and equipment
    
    
    14,360
    
    
    
    9,345
    
    
    
    8,685Business acquisitions and holdback settlements
    
    
    (273,750
    )
    
    
    (480,096
    )
    
    
    (687,892
    )Other, net
    
    
    1,378
    
    
    
    (1,316
    )
    
    
    (474
    )Net cash used in investing activities
    
    
    (609,924
    )
    
    
    (739,445
    )
    
    
    (917,955
    )CASH FLOWS FROM FINANCING ACTIVITIESProceeds from borrowings
    
    
    1,364,423
    
    
    
    1,162,452
    
    
    
    1,577,967Repayment of debt
    
    
    (1,188,675
    )
    
    
    (953,749
    )
    
    
    (1,008,186
    )Financing costs
    
    
    (9,201
    )
    
    
    
    
    
    
    (5,103
    )Premium paid on call of senior subordinated notes
    
    
    
    
    
    
    
    
    
    
    (10,267
    )Minority interest in earnings
    
    
    
    
    
    
    (711
    )
    
    
    (2,845
    )Purchase of treasury stock
    
    
    (120,219
    )
    
    
    (17,010
    )
    
    
    Proceeds from the exercise of stock options
    
    
    16,188
    
    
    
    20,381
    
    
    
    15,107Stock issued for the Employee Stock Purchase Plan
    
    
    16,507
    
    
    
    14,091
    
    
    
    11,951Tax benefit realized from the exercise of stock options
    
    
    11,846
    
    
    
    13,327
    
    
    
    9,013Dividends paid to stockholders
    
    
    (45,766
    )
    
    
    (31,828
    )
    
    
    (21,980
    )Change in cash overdraft
    
    
    (13,806
    )
    
    
    (317
    )
    
    
    16,901Net cash provided by financing activities
    
    
    31,297
    
    
    
    206,636
    
    
    
    582,558CHANGE IN CASH
    
    $
    4,140
    
    
    $
    17,117
    
    
    $
    (9,054
    )Cash  Beginning of year
    
    
    43,048
    
    
    
    25,931
    
    
    
    34,985Cash  End of year
    
    $
    47,188
    
    
    $
    43,048
    
    
    $
    25,931
 
 F - 8




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Description of the Business
  Basis of Presentation
   Reclassifications and Prior Period Adjustments
    F - 9




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 ) Cash and Cash Overdraft
  Allowance for Doubtful Accounts
  Inventories
  Plant and Equipment
  Goodwill, Other Intangible Assets and Deferred Financing Costs
  F - 10




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    Asset Retirement Obligations
  Commitments and Contingencies
    F - 11




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Income Taxes
   Foreign Currency Translation
  Concentrations of Credit Risk
  Financial Instruments
 Accounting for Derivative Instruments and Hedging Activities,
  F - 12




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Revenue Recognition
  Cost of Products Sold (Excluding Depreciation)
   Selling, Distribution and Administrative Expenses
  ) Depreciation
  Shipping and Handling Fees and Distribution Costs
  F - 13




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  (a) Recently adopted accounting pronouncements
 SFAS 157
 Fair
Value Measurements Effective Date of FASB Statement No. 157
 SFAS 159
 The Fair Value Option for Financial
Assets and Financial Liabilities,
 SFAS 161
 Disclosures about Derivative Instruments and
Hedging Activities
 SFAS 162
 The Hierarchy of Generally Accepted Accounting
Principles
 SAB 108
 Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current
Year Financial Statements
 F - 14




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  (b) Accounting pronouncements issued but not yet adopted
 SFAS 141R
 Business Combinations
 F - 15




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 SFAS 160
 Noncontrolling Interests in Consolidated
Financial Statements Consolidated
Financial Statements
 FSP 142-3
 Determination of the Useful Life of
Intangible Assets Goodwill and Other Intangible Assets
 FSP 141R-1
 Accounting for Assets Acquired and
Liabilities Assumed in a Business Combination That Arise from Contingencies
 FSP 107-1 and APB 28-1
 Interim Disclosures about Fair
Value of Financial Instruments
 F - 16




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 EITF 08-7
 Accounting for Defensive Intangible Assets
        Purchase Price Allocation
   F - 17




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  All OtherDistribution
    
    
    Operations(In thousands)
    
    Business Segment
    
    
    Business Segment
    
    
    TotalCurrent assets, net
    
    $
    22,611
    
    
    $
    72,460
    
    
    $
    95,071Property and equipment
    
    
    32,380
    
    
    
    (46
    )
    
    
    32,334Goodwill
    
    
    34,138
    
    
    
    65,228
    
    
    
    99,366Other intangible assets
    
    
    65,344
    
    
    
    25,662
    
    
    
    91,006Current liabilities
    
    
    (15,984
    )
    
    
    (7,660
    )
    
    
    (23,644
    )Long-term liabilities
    
    
    (17,159
    )
    
    
    (3,224
    )
    
    
    (20,383
    )Total cash consideration
    
    $
    121,330
    
    
    $
    152,420
    
    
    $
    273,750
 Pro Forma Operating Results
   UnauditedYears Ended March 31,(In thousands, except per share amounts)
    
    2009
    
    
    2008Net sales
    
    $
    4,433,158
    
    
    $
    4,406,837Net earnings
    
    
    261,725
    
    
    
    222,442Diluted earnings per share
    
    $
    3.12
    
    
    $
    2.65Fiscal 2008
  F - 18




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Purchase Price Allocation
   Linde Acquisitions
    
    
    Remaining AcquisitionsAll OtherDistribution
    
    
    Distribution
    
    
    Operations(In thousands)
    
    Business Segment
    
    
    Business Segment
    
    
    Business Segment
    
    
    TotalCurrent assets, net
    
    $
    85,227
    
    
    $
    31,171
    
    
    $
    1,341
    
    
    $
    117,739Property and equipment
    
    
    153,756
    
    
    
    68,272
    
    
    
    4,583
    
    
    
    226,611Goodwill
    
    
    54,714
    
    
    
    77,909
    
    
    
    1,584
    
    
    
    134,207Other intangible assets
    
    
    73,609
    
    
    
    23,426
    
    
    
    3,465
    
    
    
    100,500Current liabilities
    
    
    (47,313
    )
    
    
    (15,490
    )
    
    
    (2,306
    )
    
    
    (65,109
    )Long-term liabilities
    
    
    (10,003
    )
    
    
    (22,903
    )
    
    
    (946
    )
    
    
    (33,852
    )Total cash consideration
    
    $
    309,990
    
    
    $
    162,385
    
    
    $
    7,721
    
    
    $
    480,096
   F - 19




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Other
    
    
    TotalSeverance
    
    
    Facility Exit
    
    
    Integration
    
    
    Integration(In thousands)
    
    Accruals
    
    
    Accruals
    
    
    Accruals
    
    
    AccrualsAmounts originally included in acquisition
accounting
    
    $
    5,265
    
    
    $
    5,700
    
    
    $
    
    
    
    $
    10,965Payments
    
    
    (2,781
    )
    
    
    (873
    )
    
    
    (962
    )
    
    
    (4,616
    )Adjustments
    
    
    892
    
    
    
    369
    
    
    
    6,213
    
    
    
    7,474Balance at March 31, 2008
    
    
    3,376
    
    
    
    5,196
    
    
    
    5,251
    
    
    
    13,823Payments
    
    
    (2,577
    )
    
    
    (1,637
    )
    
    
    (839
    )
    
    
    (5,053
    )Adjustments
    
    
    (640
    )
    
    
    19
    
    
    
    221
    
    
    
    (400
    )Balance at March 31, 2009
    
    $
    159
    
    
    $
    3,578
    
    
    $
    4,633
    
    
    $
    8,370
 Pro Forma Operating Results
  UnauditedYears Ended March 31,(In thousands, except per share amounts)
    
    2008
    
    2007Net sales
    
    $
    4,205,464
    
    
    $
    3,950,425Net earnings
    
    
    224,303
    
    
    
    160,283Diluted earnings per share
    
    $
    2.67
    
    
    $
    1.99Fiscal 2007
  F - 20




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Purchase Price Allocation
  Remaining AcquisitionsLinde Acquisition
    
    
    
    
    
    
    All OtherDistribution
    
    
    Distribution
    
    
    Operations(In thousands)
    
    Business Segment
    
    
    Business Segment
    
    
    Business Segment
    
    
    TotalCurrent assets, net
    
    $
    26,924
    
    
    $
    25,839
    
    
    $
    10,600
    
    
    $
    63,363Property and equipment
    
    
    302,388
    
    
    
    66,248
    
    
    
    1,977
    
    
    
    370,613Goodwill
    
    
    166,920
    
    
    
    73,784
    
    
    
    19,890
    
    
    
    260,594Other intangible assets
    
    
    16,700
    
    
    
    21,842
    
    
    
    6,000
    
    
    
    44,542Current liabilities
    
    
    (16,254
    )
    
    
    (19,484
    )
    
    
    (3,555
    )
    
    
    (39,293
    )Long-term liabilities
    
    
    (1,868
    )
    
    
    (7,978
    )
    
    
    (2,081
    )
    
    
    (11,927
    )Total cash consideration
    
    $
    494,810
    
    
    $
    160,251
    
    
    $
    32,831
    
    
    $
    687,892
   ,
Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities
 F - 21




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
     March 31,(In thousands)
    
    2009
    
    
    2008Hardgoods
    
    $
    249,125
    
    
    $
    275,611Gases
    
    
    141,320
    
    
    
    55,121$
    390,445
    
    
    $
    330,732
    Years Ended March 31,(In thousands)
    
    2009
    
    
    2008
    
    
    2007United States
    
    $
    419,377
    
    
    $
    358,381
    
    
    $
    246,699Foreign
    
    
    9,976
    
    
    
    12,381
    
    
    
    10,445$
    429,353
    
    
    $
    370,762
    
    
    $
    257,144
 F - 22




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Years Ended March 31,(In thousands)
    
    2009
    
    
    2008
    
    
    2007Current:Federal
    
    $
    52,562
    
    
    $
    60,221
    
    
    $
    41,760Foreign
    
    
    2,658
    
    
    
    3,718
    
    
    
    2,725State
    
    
    9,765
    
    
    
    5,520
    
    
    
    3,48764,985
    
    
    
    69,459
    
    
    
    47,972Deferred:Federal
    
    
    87,751
    
    
    
    62,351
    
    
    
    46,440Foreign
    
    
    562
    
    
    
    484
    
    
    
    491State
    
    
    14,967
    
    
    
    11,890
    
    
    
    4,980103,280
    
    
    
    74,725
    
    
    
    51,911$
    168,265
    
    
    $
    144,184
    
    
    $
    99,883
  Years Ended March 31,2009
    
    
    2008
    
    
    2007Taxes at U.S. federal statutory rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %Increase (decrease) in income taxes resulting from:State income taxes, net of federal benefit
    
    
    3.6
    %
    
    
    3.3
    %
    
    
    2.9
    %Stock-based compensation expense
    
    
    0.3
    %
    
    
    0.3
    %
    
    
    0.5
    %Change in state tax law
    
    
    0.1
    %
    
    
    (0.3
    %)
    
    
    (0.8
    %)Other, net
    
    
    0.2
    %
    
    
    0.6
    %
    
    
    1.2
    %39.2
    %
    
    
    38.9
    %
    
    
    38.8
    %
 F - 23




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  March 31,(In thousands)
    
    2009
    
    
    2008Deferred Tax Assets:Inventories
    
    $
    17,190
    
    
    $
    10,881Accounts receivable
    
    
    368
    
    
    
    (1,379
    )Deferred rental income
    
    
    17,198
    
    
    
    14,480Insurance reserves
    
    
    14,087
    
    
    
    9,864Litigation settlement and other reserves
    
    
    1,721
    
    
    
    1,634Asset retirement obligations
    
    
    3,766
    
    
    
    3,513Stock based compensation
    
    
    13,555
    
    
    
    8,801Other
    
    
    15,707
    
    
    
    16,011Net operating loss carryforwards
    
    
    20,240
    
    
    
    20,424Valuation allowance
    
    
    (6,211
    )
    
    
    (5,098
    )97,621
    
    
    
    79,131Deferred Tax Liabilities:Plant and equipment
    
    
    (517,225
    )
    
    
    (414,961
    )Intangible assets
    
    
    (94,123
    )
    
    
    (66,211
    )Other
    
    
    (17,296
    )
    
    
    (15,483
    )(628,644
    )
    
    
    (496,655
    )Net deferred tax liability
    
    $
    (531,023
    )
    
    $
    (417,524
    )
  March 31,(In thousands)
    
    2009
    
    
    2008Current deferred tax asset, net
    
    $
    34,760
    
    
    $
    22,258Non-current deferred tax liability, net
    
    
    (565,783
    )
    
    
    (439,782
    )Net deferred tax liability
    
    $
    (531,023
    )
    
    $
    (417,524
    )
     F - 24




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   Accounting for
Uncertainty in Income Taxes
   (In thousands)Unrecognized income tax benefits as of April 1, 2008
    
    $
    6,963Additions for tax positions of prior years
    
    
    518Additions for current year tax positions
    
    
    1,196Reductions for settlements with taxing authorities
    
    
    (175
    )Reductions as a result of expiration of applicable statutes of limitations
    
    
    (93
    )Unrecognized income tax benefits as of March 31, 2009
    
    $
    8,409
   F - 25




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   March 31,(In thousands)
    
    Depreciable Lives (Yrs)
    
    
    2009
    
    
    2008Land and land improvements
    
    
    
    
    
    $
    145,412
    
    
    $
    118,019Buildings and leasehold improvements
    
    
    25
    
    
    
    344,360
    
    
    
    306,308Cylinders
    
    
    30
    
    
    
    1,251,919
    
    
    
    1,218,959Bulk tank stations
    
    
    10 to 30 (Average 19
    )
    
    
    448,764
    
    
    
    402,352Rental equipment
    
    
    3 to 10
    
    
    
    222,302
    
    
    
    199,794Machinery and equipment
    
    
    7 to 10
    
    
    
    665,966
    
    
    
    593,758Computers, furniture and fixtures
    
    
    3 to 10
    
    
    
    152,059
    
    
    
    146,387Transportation equipment
    
    
    3 to 15
    
    
    
    230,435
    
    
    
    200,892Construction in progress
    
    
    
    
    
    
    97,513
    
    
    
    46,204$
    3,558,730
    
    
    $
    3,232,673
   All OtherDistribution
    
    
    Operations(In thousands)
    
    Business Segment
    
    
    Business Segment
    
    
    TotalBalance at March 31, 2007
    
    $
    714,600
    
    
    $
    117,562
    
    
    $
    832,162Acquisitions
    
    
    132,623
    
    
    
    1,584
    
    
    
    134,207Other adjustments
    
    
    2,539
    
    
    
    151
    
    
    
    2,690Balance at March 31, 2008
    
    
    849,762
    
    
    
    119,297
    
    
    
    969,059Acquisitions
    
    
    34,138
    
    
    
    65,228
    
    
    
    99,366Other adjustments
    
    
    (4,818
    )
    
    
    (237
    )
    
    
    (5,055
    )Balance at March 31, 2009
    
    $
    879,082
    
    
    $
    184,288
    
    
    $
    1,063,370
 Test for Goodwill Impairment
  F - 26




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   Other Intangible Assets
    March 31,(In thousands)
    
    2009
    
    
    2008Accrued payroll and employee benefits
    
    $
    80,630
    
    
    $
    86,490Business insurance reserves
    
    
    44,986
    
    
    
    37,433Taxes other than income taxes
    
    
    17,098
    
    
    
    22,628Cash overdraft
    
    
    42,933
    
    
    
    56,739Deferred rental revenue
    
    
    25,611
    
    
    
    22,641Other accrued expenses and current liabilities
    
    
    53,306
    
    
    
    62,952$
    264,564
    
    
    $
    288,883
  F - 27




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   March 31,(In thousands)
    
    2009
    
    
    2008Revolving credit borrowings  U.S.
    
    $
    751,200
    
    
    $
    859,500Revolving credit borrowings  Multi-currency
    
    
    23,712
    
    
    
    Revolving credit borrowings  Canadian
    
    
    14,660
    
    
    
    23,791Term loans
    
    
    397,500
    
    
    
    487,500Money market loan
    
    
    
    
    
    
    30,000Senior subordinated notes
    
    
    550,000
    
    
    
    150,000Acquisition notes and other
    
    
    24,294
    
    
    
    29,257Total long-term debt
    
    
    1,761,366
    
    
    
    1,580,048Less current portion of long-term debt
    
    
    (11,058
    )
    
    
    (40,400
    )Long-term debt, excluding current portion
    
    $
    1,750,308
    
    
    $
    1,539,648
 Senior Credit Facility
    F - 28




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    Money Market Loans
   Senior Subordinated Notes
    F - 29




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Acquisition Notes and Other
  Loss on Debt Extinguishment
  Aggregate Long-term Debt Maturities
  (In thousands)
    
    Debt MaturitiesYears Ending March 31, (1)2010
    
    $
    11,0582011
    
    
    244,2122012
    
    
    954,1262013
    
    
    7192014
    
    
    511Thereafter
    
    
    550,740$
    1,761,366
 
 (1)
    
    The Company has the ability and intention of refinancing current maturities
related to the term loans under
its Credit Facility with its long-term revolving credit line. Therefore, principal payments due in
fiscal 2010 on the term loans have been reflected as long-term in the aggregate maturity schedule.    F  - 30




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   Fair
Value of Derivatives Designated as Hedging InstrumentsMarch 31, 2009
    
    
    March 31, 2008Balance Sheet
    
    
    Fair
    
    
    Balance Sheet
    
    
    Fair(In thousands)
    
    Location
    
    
    Value
    
    
    Location
    
    
    ValueOther non-current
    
    
    
    
    
    Other non-currentInterest rate swaps
    
    liabilities
    
    $
    12,525
    
    
    liabilities
    
    $
    20,849
 Effect
of Derivative Instruments on the Consolidated Statements of
Earnings(In thousands)Amount of Gain (Loss) Recognized in
    
    
    
    
    
    
    Amount of Gain (Loss) ReclassifiedOCI on Derivative
    
    
    Location of Gain
    
    
    from AOCI into IncomeDerivatives in Cash
    
    
    
    
    
    
    
    
    
    
    
    
    
    (Loss) ReclassifiedFlow Hedging
    
    Years Ended March 31,

    
    from AOCI into
    
    
    Years Ended March 31,Relationships
    
    2009
    
    
    2008
    
    
    2007
    
    
    Income
    
    
    2009
    
    
    2008
    
    
    2007Interest rate swaps
    
    $
    8,325
    
    
    $
    (20,956
    )
    
    $
    (850
    )
    
    Interest expense, net
    
    $
    (13,130
    )
    
    $
    63
    
    
    $
    1,375Tax (expense) benefit
    
    
    (2,914
    )
    
    
    7,322
    
    
    
    280
    
    
    Income taxes
    
    
    4,596
    
    
    
    (22
)

    (481
)Net effect
    
    $
    5,411
    
    
    $
    (13,634
    )
    
    $
    (570
    )
    
    
    
    
    
    $
    (8,534
    )
    
    $
    41
    
    
    $

    894
 F - 31




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
      
    
    Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or
liabilities at the measurement date.
    
    Level 2 inputs are inputs, other than quoted prices included within Level 1, that are
observable, directly or indirectly through corroboration with observable market data at the
measurement date.
    
    Level 3 inputs are unobservable inputs that reflect managements best estimate of the
assumptions (including assumptions about risk) that market participants would use in
pricing the asset or liability at the measurement date.
   Quoted prices in
    
    
    Significant other
    
    
    SignificantCarrying value at
    
    
    active markets
    
    
    observable inputs
    
    
    unobservable inputs(In thousands)
    
    March 31, 2009
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3Assets:Subordinated retained interest in trade receivables
sold under the Companys trade receivable securitization
    
    $
    147,853
    
    
    $
    
    
    
    $
    
    
    
    $
    147,853Deferred compensation plan assets
    
    
    4,598
    
    
    
    4,598
    
    
    
    
    
    
    
    Total assets measured at fair value on a recurring basis
    
    $
    152,451
    
    
    $
    4,598
    
    
    $
    
    
    
    $
    147,853Liabilities:Deferred compensation plan liabilities
    
    $
    4,598
    
    
    $
    4,598
    
    
    $
    
    
    
    $
    Derivative liabilities  interest rate swap agreements
    
    
    12,525
    
    
    
    
    
    
    
    12,525
    
    
    
    Total liabilities measured at fair value on a recurring basis
    
    $
    17,123
    
    
    $
    4,598
    
    
    $
    12,525
    
    
    $
    
 F - 32




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Subordinated retained interest
 Deferred compensation plan assets and corresponding liabilities
 Derivative liabilities  interest rate swap agreements
  Subordinated(In thousands)
    
    retained interestBalance at April 1, 2008
    
    $
    163,561Net realized losses included in earnings (bad debt expense)
    
    
    (22,026
    )Additional retained interest, net
    
    
    6,318Balance at March 31, 2009
    
    $
    147,853
  Carrying Value at
    
    
    Fair Value at
    
    
    Carrying Value at
    
    
    Fair Value at(In thousands)
    
    March 31, 2009
    
    
    March 31, 2009
    
    
    March 31, 2008
    
    
    March 31, 2008Revolving credit borrowings
    
    $
    789,572
    
    
    $
    757,989
    
    
    $
    883,291
    
    
    $
    883,291Term loans
    
    
    397,500
    
    
    
    381,600
    
    
    
    487,500
    
    
    
    487,500Money market loans
    
    
    
    
    
    
    
    
    
    
    30,000
    
    
    
    30,0002004 Notes
    
    
    150,000
    
    
    
    139,500
    
    
    
    150,000
    
    
    
    148,1252008 Notes
    
    
    400,000
    
    
    
    378,000
    
    
    
    
    
    
    
    Acquisition and other notes
    
    
    24,294
    
    
    
    24,294
    
    
    
    29,257
    
    
    
    29,662Total  debt
    
    $
    1,761,366
    
    
    $
    1,681,383
    
    
    $
    1,580,048
    
    
    $
    1,578,578
 F - 33




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Consolidation of Variable Interest Entities
   Common Stock
  Preferred Stock and Redeemable Preferred Stock
 Stockholder Rights Plan
  F - 34




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Dividends
  Stockholder Rights Plan
   Stock Repurchase Plan
  Comprehensive Income
  F - 35




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Share-Based Payment
 Fiscal Years Ended March 31,(In thousands)
    
    2009
    
    
    2008
    
    
    2007Stock-based compensation expense related to:Stock option plans
    
    $
    14,863
    
    
    $
    12,660
    
    
    $
    12,164Employee Stock Purchase Plan  options to purchase stock
    
    
    5,772
    
    
    
    3,969
    
    
    
    3,28120,635
    
    
    
    16,629
    
    
    
    15,445Tax benefit
    
    
    (6,544
    )
    
    
    (5,282
    )
    
    
    (4,589
    )Stock-based compensation expense, net of tax
    
    $
    14,091
    
    
    $
    11,347
    
    
    $
    10,856
 2006 Equity Incentive Plan
   Fair Value
  Stock Option Grant Assumptions:
 Fiscal 2009
    
    
    Fiscal 2008
    
    
    Fiscal 2007Expected volatility
    
    
    29.6
    %
    
    
    30.8
    %
    
    
    36.2
    %Expected dividend yield
    
    
    0.90
    %
    
    
    0.82
    %
    
    
    0.80
    %Expected term
    
    5.6 years

    
    5.6 years

    
    5.4 yearsRisk-free interest rate
    
    
    3.2
    %
    
    
    4.7
    %
    
    
    5.0
    %
  F - 36




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Summary of Stock Option Activity
  Weighted-Average
    
    
    AggregateNumber of
    
    
    Exercise Price
    
    
    Intrinsic ValueStock Options
    
    
    Per Share
    
    
    (In thousands)Outstanding at March 31, 2006
    
    
    6,993,818
    
    
    $
    16.37Granted
    
    
    991,440
    
    
    $
    36.19Exercised
    
    
    (967,590
    ) (1)
    
    $
    15.91Forfeited
    
    
    (134,694
    )
    
    $
    26.09Outstanding at March 31, 2007
    
    
    6,882,974
    
    
    $
    19.12
    
    
    $
    158,515Granted
    
    
    1,082,550
    
    
    $
    43.94Exercised
    
    
    (1,238,457
    )
    
    $
    16.46Forfeited
    
    
    (94,364
    )
    
    $
    32.18Outstanding at March 31, 2008
    
    
    6,632,703
    
    
    $
    23.52
    
    
    $
    145,588Granted
    
    
    1,120,273
    
    
    $
    59.67Exercised
    
    
    (1,027,129
    )
    
    $
    15.76Forfeited
    
    
    (85,478
    )
    
    $
    31.63Outstanding at March 31, 2009
    
    
    6,640,369
    
    
    $
    30.71
    
    
    $
    60,142Vested or expected to vest as of
March 31, 2009
    
    
    6,109,139
    
    
    $
    30.71
    
    
    $
    59,988Exercisable as of March 31, 2009
    
    
    3,458,387
    
    
    $
    21.21
    
    
    $
    58,217
 
 (1)
    
    Actual shares issued associated with stock option exercises was 960 thousand due to
a net share issue exercise.   Employee Stock Purchase Plan
   F - 37




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  ESPP Purchase Option Assumptions:
 Fiscal 2009
    
    
    Fiscal 2008
    
    
    Fiscal 2007Expected volatility
    
    
    61.3
    %
    
    
    23.6
    %
    
    
    30.8
    %Expected dividend yield
    
    
    1.07
    %
    
    
    0.86
    %
    
    
    0.73
    %Expected term
    
    
    3 to 6 months

    
    
    3 to 12 months

    
    
    2 to 8 monthsRisk-free interest rate
    
    
    1.7
    %
    
    
    5.0
    %
    
    
    5.0%
  ESPP  Purchase Option Activity
 Weighted-Average
    
    
    AggregateNumber of
    
    
    Exercise Price
    
    
    Intrinsic ValuePurchase Options
    
    
    Per Share
    
    
    (In thousands)Outstanding at March 31, 2006
    
    
    137,687
    
    
    $
    20.50Granted
    
    
    395,587
    
    
    $
    31.10Exercised
    
    
    (430,519
    )
    
    $
    27.76Outstanding at March 31, 2007
    
    
    102,755
    
    
    $
    30.86
    
    
    $
    1,160Granted
    
    
    412,917
    
    
    $
    36.00Exercised
    
    
    (407,038
    )
    
    $
    34.62Outstanding at March 31, 2008
    
    
    108,634
    
    
    $
    36.21
    
    
    $
    1,006Granted
    
    
    463,443
    
    
    $
    35.52Exercised
    
    
    (439,325
    )
    
    $
    37.57Outstanding at March 31, 2009
    
    
    132,752
    
    
    $
    29.30
    
    
    $
    599
 F - 38




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   Years Ended March 31,(In thousands)
    
    2009
    
    
    2008
    
    
    2007Interest expense
    
    $
    87,142
    
    
    $
    92,210
    
    
    $
    62,095Interest and finance charge (income)
    
    
    (2,747
    )
    
    
    (2,725
    )
    
    
    (1,915
    )$
    84,395
    
    
    $
    89,485
    
    
    $
    60,180
    F - 39




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  (In thousands, except per share amounts)
    
    Years Ended March 31,Basic Earnings per Share Computation
    
    2009
    
    
    2008
    
    
    2007Numerator:Net earnings
    
    $
    261,088
    
    
    $
    223,348
    
    
    $
    154,416Denominator:Basic shares outstanding
    
    
    81,926
    
    
    
    81,402
    
    
    
    78,025Basic net earnings per share
    
    $
    3.19
    
    
    $
    2.74
    
    
    $
    1.98
 Years Ended March 31,Diluted Earnings per Share Computation
    
    2009
    
    
    2008 (2)
    
    
    2007 (1)Numerator:Net earnings
    
    $
    261,088
    
    
    $
    223,348
    
    
    $
    154,416Plus: Preferred stock dividends
    
    
    
    
    
    
    711
    
    
    
    2,845Plus: Income taxes on earnings of National Welders
    
    
    
    
    
    
    245
    
    
    
    1,166Net earnings assuming preferred stock conversion
    
    $
    261,088
    
    
    $
    224,304
    
    
    $
    158,427Denominator:Basic shares outstanding
    
    
    81,926
    
    
    
    81,402
    
    
    
    78,025Incremental shares from assumed exercises and conversions:Stock options and options under the Employee Stock Purchase Plan
    
    
    1,890
    
    
    
    2,242
    
    
    
    2,214Preferred stock of National Welders
    
    
    
    
    
    
    591
    
    
    
    2,327Diluted shares outstanding
    
    
    83,816
    
    
    
    84,235
    
    
    
    82,566Diluted net earnings per share
    
    $
    3.12
    
    
    $
    2.66
    
    
    $
    1.92
 
 (1)
    
    On July 3, 2007, the preferred stockholders of the National Welders joint venture
exchanged their preferred stock for common stock of Airgas (see Note 13). Prior to July 3,
2007, the preferred stockholders of National Welders had the option to exchange their 3.2
million preferred shares of National Welders either for cash at a price of $17.78 per share
or for approximately 2.3 million shares of Airgas common stock. If Airgas common stock had
a market value of $24.45 per share or greater, exchange of the preferred stock for Airgas
common stock was assumed because it provided greater value to the preferred stockholders.
Based on the assumed exchange of the preferred stock for Airgas common stock, the 2.3
million shares were included in the diluted shares outstanding.The National Welders preferred stockholders earned a 5% dividend, recognized as Minority
interest in
earnings of consolidated affiliate in the Consolidated Statement of Earnings. Upon the
exchange of the preferred stock for Airgas common stock, the dividend was no longer paid to
the preferred stockholders, resulting in additional net earnings for Airgas. For the
periods in which the exchange was assumed, the 5% preferred stock dividend was added back to
net earnings in the diluted earnings per share computation.For periods prior to the NWS Exchange Transaction, the earnings of National Welders for tax
purposes were treated as a deemed dividend to Airgas, net of an 80% dividend exclusion.
Upon the exchange of National Welders preferred stock for Airgas common stock, National
Welders became a 100% owned subsidiary of Airgas. As a 100% owned subsidiary, the net
earnings of National Welders are not subject to additional tax at the Airgas level. For the
period in which the exchange was assumed, the additional tax was added back to net earnings
in the diluted earnings per share computation.(2)
    
    The diluted earnings per share computation for the year ended March 31, 2008
includes the effect of the items described in (1) above, weighted to reflect the impact of
the NWS Exchange Transaction. F - 40




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (In thousands)Years Ending March 31,2010
    
    $
    83,9482011
    
    
    71,3072012
    
    
    56,7442013
    
    
    37,4072014
    
    
    20,128Thereafter
    
    
    25,500$
    295,034
  (a) Legal
  (b) Insurance Coverage
   F - 41




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Supply Agreements
    (d) Construction Commitments
  (e) Letters of Credit
    F - 42




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
      Cash Paid for Interest and Taxes
  Years Ended March 31,(In thousands)
    
    2009
    
    2008
    
    2007Interest paid
    
    $
    75,630
    
    
    $
    93,076
    
    
    $
    71,965Discount on securitization
    
    
    10,738
    
    
    
    17,031
    
    
    
    13,630Income taxes (net of refunds)
    
    
    64,616
    
    
    
    52,254
    
    
    
    50,021
 Significant Non-cash Investing and Financing Transactions
     F - 43




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
      F - 44




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
     All Other(In thousands)
    
    Distribution
    
    
    Operations
    
    
    Eliminations
    
    
    CombinedFiscal 2009Gas and rent
    
    $
    2,239,724
    
    
    $
    452,037
    
    
    $
    (26,236
    )
    
    $
    2,665,525Hardgoods
    
    
    1,678,652
    
    
    
    5,292
    
    
    
    (14
    )
    
    
    1,683,930Total net sales
    
    
    3,918,376
    
    
    
    457,329
    
    
    
    (26,250
    )
    
    
    4,349,455Cost of products
sold, excluding
deprec. expense
    
    
    1,813,125
    
    
    
    258,145
    
    
    
    (26,250
    )
    
    
    2,045,020Selling, distribution
and administrative
expenses
    
    
    1,432,105
    
    
    
    126,667
    
    
    
    
    
    
    
    1,558,772Depreciation
    
    
    184,991
    
    
    
    13,042
    
    
    
    
    
    
    
    198,033Amortization
    
    
    18,267
    
    
    
    4,495
    
    
    
    
    
    
    
    22,762Operating income
    
    $
    469,888
    
    
    $
    54,980
    
    
    $
    
    
    
    $
    524,868Assets
    
    $
    3,921,339
    
    
    $
    478,198
    
    
    
    
    
    
    $
    4,399,537Capital expenditures
    
    $
    319,256
    
    
    $
    32,656
    
    
    
    
    
    
    $
    351,912
 F - 45




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 All Other(In thousands)
    
    Distribution
    
    
    Operations
    
    
    Eliminations
    
    
    CombinedFiscal 2008Gas and rent
    
    $
    2,048,070
    
    
    $
    339,455
    
    
    $
    (15,003
    )
    
    $
    2,372,522Hardgoods
    
    
    1,640,896
    
    
    
    3,791
    
    
    
    (185
    )
    
    
    1,644,502Total net sales
    
    
    3,688,966
    
    
    
    343,246
    
    
    
    (15,188
    )
    
    
    4,017,024Cost of products
sold, excluding
deprec. expense
    
    
    1,770,000
    
    
    
    174,451
    
    
    
    (15,188
    )
    
    
    1,929,263Selling, distribution
and administrative
expenses
    
    
    1,317,717
    
    
    
    104,445
    
    
    
    
    
    
    
    1,422,162Depreciation
    
    
    163,470
    
    
    
    12,332
    
    
    
    
    
    
    
    175,802Amortization
    
    
    11,857
    
    
    
    2,116
    
    
    
    
    
    
    
    13,973Operating income
    
    $
    425,922
    
    
    $
    49,902
    
    
    $
    
    
    
    $
    475,824Assets
    
    $
    3,694,717
    
    
    $
    292,547
    
    
    
    
    
    
    $
    3,987,264Capital expenditures
    
    $
    251,130
    
    
    $
    16,248
    
    
    
    
    
    
    $
    267,378
 All Other(In thousands)
    
    Distribution
    
    
    Operations
    
    
    Eliminations
    
    
    CombinedFiscal 2007Gas and rent
    
    $
    1,560,846
    
    
    $
    274,683
    
    
    $
    (11,942
    )
    
    $
    1,823,587Hardgoods
    
    
    1,378,439
    
    
    
    3,046
    
    
    
    (21
    )
    
    
    1,381,464Total net sales
    
    
    2,939,285
    
    
    
    277,729
    
    
    
    (11,963
    )
    
    
    3,205,051Cost of products
sold, excluding
deprec. expense
    
    
    1,445,204
    
    
    
    133,991
    
    
    
    (11,963
    )
    
    
    1,567,232Selling, distribution
and administrative
expenses
    
    
    1,059,329
    
    
    
    89,650
    
    
    
    
    
    
    
    1,148,979Depreciation
    
    
    129,112
    
    
    
    9,706
    
    
    
    
    
    
    
    138,818Amortization
    
    
    7,075
    
    
    
    1,450
    
    
    
    
    
    
    
    8,525Operating income
    
    $
    298,565
    
    
    $
    42,932
    
    
    $
    
    
    
    $
    341,497Assets
    
    $
    3,077,467
    
    
    $
    255,990
    
    
    
    
    
    
    $
    3,333,457Capital expenditures
    
    $
    216,609
    
    
    $
    21,665
    
    
    
    
    
    
    $
    238,274
 F - 46




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   (In thousands, except per share amounts)
    
    First
    
    Second
    
    Third
    
    Fourth2009Net sales
    
    $
    1,116,714
    
    
    $
    1,161,908
    
    
    $
    1,078,733
    
    
    $
    992,100Operating income
    
    
    134,852
    
    
    
    144,988
    
    
    
    130,522
    
    
    
    114,506Net earnings
    
    
    68,883
    
    
    
    72,821
    
    
    
    62,903
    
    
    
    56,481Basic earnings per share (a)
    
    $
    0.83
    
    
    $
    0.88
    
    
    $
    0.77
    
    
    $
    0.69Diluted earnings per share (a)
    
    $
    0.81
    
    
    $
    0.86
    
    
    $
    0.76
    
    
    $
    0.682008Net sales
    
    $
    915,099
    
    
    $
    1,007,283
    
    
    $
    1,008,045
    
    
    $
    1,086,597Operating income
    
    
    111,038
    
    
    
    115,396
    
    
    
    118,330
    
    
    
    131,060Net earnings (b)
    
    
    51,720
    
    
    
    50,609
    
    
    
    56,806
    
    
    
    64,213Basic earnings per share (a)(b)
    
    $
    0.65
    
    
    $
    0.62
    
    
    $
    0.69
    
    
    $
    0.78Diluted earnings per share (a)(b)
    
    $
    0.63
    
    
    $
    0.60
    
    
    $
    0.67
    
    
    $
    0.76
 
 (a)
    
    Earnings per share calculations for each of the quarters are based on the weighted
average number of shares outstanding in each quarter. Therefore, the sum of the quarterly
earnings per share does not necessarily equal the full year earnings per share disclosed on
the Consolidated Statement of Earnings.(b)
    
    The quarterly results for fiscal 2008 include a one-time, non-cash expense in the
second fiscal quarter of $2.5 million, or $0.03 per diluted share, related to the NWS Exchange
Transaction through which the joint venture became a 100% owned subsidiary and a tax benefit
in the third fiscal quarter of $1.3 million, or $0.01 per diluted share, related to a change
in Texas income state tax law.      F - 47




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Condensed Consolidating Balance Sheet
March 31, 2009
 Non-
    
    
    Elimination(In thousands)
    
    Parent
    
    
    Guarantors
    
    
    Guarantors
    
    
    Entries
    
    
    ConsolidatedASSETSCurrent AssetsCash
    
    $
    
    
    
    $
    40,492
    
    
    $
    6,696
    
    
    $
    
    
    
    $
    47,188Trade receivables, net
    
    
    
    
    
    
    30,157
    
    
    
    154,582
    
    
    
    
    
    
    
    184,739Intercompany receivable
(payable)
    
    
    
    
    
    
    (4,115
    )
    
    
    4,115
    
    
    
    
    
    
    
    Inventories, net
    
    
    
    
    
    
    379,448
    
    
    
    10,997
    
    
    
    
    
    
    
    390,445Deferred income tax asset, net
    
    
    23,901
    
    
    
    12,995
    
    
    
    (2,136
    )
    
    
    
    
    
    
    34,760Prepaid expenses and other
current assets
    
    
    25,639
    
    
    
    33,572
    
    
    
    1,627
    
    
    
    
    
    
    
    60,838Total current assets
    
    
    49,540
    
    
    
    492,549
    
    
    
    175,881
    
    
    
    
    
    
    
    717,970Plant and equipment, net
    
    
    30,649
    
    
    
    2,287,603
    
    
    
    48,274
    
    
    
    
    
    
    
    2,366,526Goodwill
    
    
    
    
    
    
    1,045,691
    
    
    
    17,679
    
    
    
    
    
    
    
    1,063,370Other intangible assets, net
    
    
    
    
    
    
    207,083
    
    
    
    8,987
    
    
    
    
    
    
    
    216,070Investments in subsidiaries
    
    
    3,244,303
    
    
    
    
    
    
    
    
    
    
    
    (3,244,303
    )
    
    
    Other non-current assets
    
    
    21,250
    
    
    
    9,183
    
    
    
    5,168
    
    
    
    
    
    
    
    35,601Total assets
    
    $
    3,345,742
    
    
    $
    4,042,109
    
    
    $
    255,989
    
    
    $
    (3,244,303
    )
    
    $
    4,399,537LIABILITIES AND
STOCKHOLDERS EQUITYCurrent LiabilitiesAccounts payable, trade
    
    $
    1,797
    
    
    $
    147,167
    
    
    $
    7,874
    
    
    $
    
    
    
    $
    156,838Accrued expenses and other
current liabilities
    
    
    85,534
    
    
    
    176,338
    
    
    
    2,692
    
    
    
    
    
    
    
    264,564Current portion of long-term debt
    
    
    
    
    
    
    9,612
    
    
    
    1,446
    
    
    
    
    
    
    
    11,058Total current liabilities
    
    
    87,331
    
    
    
    333,117
    
    
    
    12,012
    
    
    
    
    
    
    
    432,460Long-term debt, excluding
current portion
    
    
    1,698,700
    
    
    
    11,465
    
    
    
    40,143
    
    
    
    
    
    
    
    1,750,308Deferred income tax liability, net
    
    
    (41,992
    )
    
    
    595,431
    
    
    
    12,344
    
    
    
    
    
    
    
    565,783Intercompany (receivable)
payable
    
    
    
    
    
    
    177,216
    
    
    
    (177,216
    )
    
    
    
    
    
    
    Other non-current liabilities
    
    
    29,948
    
    
    
    44,071
    
    
    
    5,212
    
    
    
    
    
    
    
    79,231Commitments and contingenciesStockholders EquityPreferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Common stock, par value $0.01 per share
    
    
    856
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    856Capital in excess of par value
    
    
    533,030
    
    
    
    1,442,400
    
    
    
    8,223
    
    
    
    (1,450,623
    )
    
    
    533,030Retained earnings
    
    
    1,198,985
    
    
    
    1,440,884
    
    
    
    355,696
    
    
    
    (1,796,580
    )
    
    
    1,198,985Accumulated other
comprehensive loss
    
    
    (10,753
    )
    
    
    (2,105
    )
    
    
    (425
    )
    
    
    2,530
    
    
    
    (10,753
    )Treasury stock
    
    
    (150,363
    )
    
    
    (370
    )
    
    
    
    
    
    
    370
    
    
    
    (150,363
    )Total stockholders equity
    
    
    1,571,755
    
    
    
    2,880,809
    
    
    
    363,494
    
    
    
    (3,244,303
    )
    
    
    1,571,755Total liabilities and
stockholders equity
    
    $
    3,345,742
    
    
    $
    4,042,109
    
    
    $
    255,989
    
    
    $
    (3,244,303
    )
    
    $
    4,399,537
 F - 48




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Condensed Consolidating Balance Sheet
March 31, 2008
 Non-
    
    
    Elimination(In thousands)
    
    Parent
    
    
    Guarantors
    
    
    Guarantors
    
    
    Entries
    
    
    ConsolidatedASSETSCurrent AssetsCash
    
    $
    
    
    
    $
    40,397
    
    
    $
    2,651
    
    
    $
    
    
    
    $
    43,048Trade receivables, net
    
    
    
    
    
    
    11,405
    
    
    
    172,164
    
    
    
    
    
    
    
    183,569Intercompany receivable
(payable)
    
    
    
    
    
    
    (2,385
    )
    
    
    2,385
    
    
    
    
    
    
    
    Inventories, net
    
    
    
    
    
    
    322,090
    
    
    
    8,642
    
    
    
    
    
    
    
    330,732Deferred income tax asset, net
    
    
    11,399
    
    
    
    12,995
    
    
    
    (2,136
    )
    
    
    
    
    
    
    22,258Prepaid expenses and other
current assets
    
    
    25,095
    
    
    
    40,408
    
    
    
    1,607
    
    
    
    
    
    
    
    67,110Total current assets
    
    
    36,494
    
    
    
    424,910
    
    
    
    185,313
    
    
    
    
    
    
    
    646,717Plant and equipment, net
    
    
    15,213
    
    
    
    2,135,949
    
    
    
    43,708
    
    
    
    
    
    
    
    2,194,870Goodwill
    
    
    
    
    
    
    951,650
    
    
    
    17,409
    
    
    
    
    
    
    
    969,059Other intangible assets, net
    
    
    
    
    
    
    148,105
    
    
    
    893
    
    
    
    
    
    
    
    148,998Investments in subsidiaries
    
    
    2,992,576
    
    
    
    
    
    
    
    
    
    
    
    (2,992,576
    )
    
    
    Other non-current assets
    
    
    16,121
    
    
    
    9,181
    
    
    
    2,318
    
    
    
    
    
    
    
    27,620Total assets
    
    $
    3,060,404
    
    
    $
    3,669,795
    
    
    $
    249,641
    
    
    $
    (2,992,576
    )
    
    $
    3,987,264LIABILITIES AND
STOCKHOLDERS EQUITYCurrent LiabilitiesAccounts payable, trade
    
    $
    5,740
    
    
    $
    174,498
    
    
    $
    4,873
    
    
    $
    
    
    
    $
    185,111Accrued expenses and other
current liabilities
    
    
    111,536
    
    
    
    174,813
    
    
    
    2,534
    
    
    
    
    
    
    
    288,883Current portion of long-term debt
    
    
    30,000
    
    
    
    9,162
    
    
    
    1,238
    
    
    
    
    
    
    
    40,400Total current liabilities
    
    
    147,276
    
    
    
    358,473
    
    
    
    8,645
    
    
    
    
    
    
    
    514,394Long-term debt, excluding
current portion
    
    
    1,497,000
    
    
    
    16,953
    
    
    
    25,695
    
    
    
    
    
    
    
    1,539,648Deferred income tax liability, net
    
    
    (33,481
    )
    
    
    462,857
    
    
    
    10,406
    
    
    
    
    
    
    
    439,782Intercompany (receivable)
payable
    
    
    450
    
    
    
    106,971
    
    
    
    (107,421
    )
    
    
    
    
    
    
    Other non-current liabilities
    
    
    35,823
    
    
    
    39,400
    
    
    
    4,881
    
    
    
    
    
    
    
    80,104Commitments and contingenciesStockholders EquityPreferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Common stock, par value $0.01
per share
    
    
    841
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    841Capital in excess of par value
    
    
    468,302
    
    
    
    1,502,919
    
    
    
    8,224
    
    
    
    (1,511,143
    )
    
    
    468,302Retained earnings
    
    
    983,663
    
    
    
    1,180,816
    
    
    
    292,065
    
    
    
    (1,472,881
    )
    
    
    983,663Accumulated other comprehensive income (loss)
    
    
    (4,713
    )
    
    
    1,776
    
    
    
    7,146
    
    
    
    (8,922
    )
    
    
    (4,713
    )Treasury stock
    
    
    (34,757
    )
    
    
    (370
    )
    
    
    
    
    
    
    370
    
    
    
    (34,757
    )Total stockholders equity
    
    
    1,413,336
    
    
    
    2,685,141
    
    
    
    307,435
    
    
    
    (2,992,576
    )
    
    
    1,413,336Total liabilities and
stockholders equity
    
    $
    3,060,404
    
    
    $
    3,669,795
    
    
    $
    249,641
    
    
    $
    (2,992,576
    )
    
    $
    3,987,264
 F - 49




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Condensed Consolidating Statement of Earnings
Year Ended
March 31, 2009
 Non-
    
    
    Elimination(In thousands)
    
    Parent
    
    
    Guarantors
    
    
    Guarantors
    
    
    Entries
    
    
    ConsolidatedNet Sales
    
    $
    
    
    
    $
    4,284,869
    
    
    $
    64,586
    
    
    $
    
    
    
    $
    4,349,455Costs and Expenses:Cost of products sold (excluding
depreciation expense)
    
    
    
    
    
    
    2,022,575
    
    
    
    22,445
    
    
    
    
    
    
    
    2,045,020Selling, distribution and
administrative expenses
    
    
    4,824
    
    
    
    1,509,012
    
    
    
    44,936
    
    
    
    
    
    
    
    1,558,772Depreciation
    
    
    4,050
    
    
    
    189,050
    
    
    
    4,933
    
    
    
    
    
    
    
    198,033Amortization
    
    
    
    
    
    
    21,720
    
    
    
    1,042
    
    
    
    
    
    
    
    22,762Operating Income (Loss)
    
    
    (8,874
    )
    
    
    542,512
    
    
    
    (8,770
    )
    
    
    
    
    
    
    524,868Interest (expense) income, net
    
    
    (85,207
    )
    
    
    2,824
    
    
    
    (2,012
    )
    
    
    
    
    
    
    (84,395
    )(Discount) gain on securitization
of trade receivables
    
    
    
    
    
    
    (118,235
    )
    
    
    107,497
    
    
    
    
    
    
    
    (10,738
    )Other income (expense), net
    
    
    (1,041
    )
    
    
    (360
    )
    
    
    1,019
    
    
    
    
    
    
    
    (382
    )Earnings (loss) before income taxes
    
    
    (95,122
    )
    
    
    426,741
    
    
    
    97,734
    
    
    
    
    
    
    
    429,353Income tax benefit (expense)
    
    
    32,511
    
    
    
    (166,674
    )
    
    
    (34,102
    )
    
    
    
    
    
    
    (168,265
    )Equity in earnings of subsidiaries
    
    
    323,699
    
    
    
    
    
    
    
    
    
    
    
    (323,699
    )
    
    
    Net Earnings
    
    $
    261,088
    
    
    $
    260,067
    
    
    $
    63,632
    
    
    $
    (323,699
    )
    
    $
    261,088
 F - 50




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Condensed Consolidating Statement of Earnings
Year Ended
March 31, 2008
 Non-
    
    
    Elimination(In thousands)
    
    Parent
    
    
    Guarantors
    
    
    Guarantors
    
    
    Entries
    
    
    ConsolidatedNet Sales
    
    $
    
    
    
    $
    3,972,305
    
    
    $
    44,719
    
    
    $
    
    
    
    $
    4,017,024Costs and Expenses:Cost of products sold (excluding
depreciation expense)
    
    
    
    
    
    
    1,917,251
    
    
    
    12,012
    
    
    
    
    
    
    
    1,929,263Selling, distribution and
administrative expenses
    
    
    271
    
    
    
    1,389,079
    
    
    
    32,812
    
    
    
    
    
    
    
    1,422,162Depreciation
    
    
    4,685
    
    
    
    167,196
    
    
    
    3,921
    
    
    
    
    
    
    
    175,802Amortization
    
    
    16
    
    
    
    13,927
    
    
    
    30
    
    
    
    
    
    
    
    13,973Operating Income (Loss)
    
    
    (4,972
    )
    
    
    484,852
    
    
    
    (4,056
    )
    
    
    
    
    
    
    475,824Interest (expense) income, net
    
    
    (88,363
    )
    
    
    43
    
    
    
    (1,165
    )
    
    
    
    
    
    
    (89,485
    )(Discount) gain on securitization
of trade receivables
    
    
    
    
    
    
    (104,174
    )
    
    
    87,143
    
    
    
    
    
    
    
    (17,031
    )Other income (expense), net
    
    
    (380
    )
    
    
    (173
    )
    
    
    2,007
    
    
    
    
    
    
    
    1,454Earnings (loss) before income
taxes and minority interest
    
    
    (93,715
    )
    
    
    380,548
    
    
    
    83,929
    
    
    
    
    
    
    
    370,762Income tax benefit (expense)
    
    
    35,195
    
    
    
    (150,051
    )
    
    
    (29,328
    )
    
    
    
    
    
    
    (144,184
    )Minority interest in earnings of
consolidated affiliate
    
    
    (2,519
    )
    
    
    (711
    )
    
    
    
    
    
    
    
    
    
    
    (3,230
    )Equity in earnings of subsidiaries
    
    
    284,387
    
    
    
    
    
    
    
    
    
    
    
    (284,387
    )
    
    
    Net Earnings
    
    $
    223,348
    
    
    $
    229,786
    
    
    $
    54,601
    
    
    $
    (284,387
    )
    
    $
    223,348
 F - 51




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Condensed Consolidating Statement of Earnings
Year Ended
March 31, 2007
 Non-
    
    
    Elimination(In thousands)
    
    Parent
    
    
    Guarantors
    
    
    Guarantors
    
    
    Entries
    
    
    ConsolidatedNet Sales
    
    $
    
    
    
    $
    3,168,232
    
    
    $
    36,819
    
    
    $
    
    
    
    $
    3,205,051Costs and Expenses:Cost of products sold
(excluding depreciation expense)
    
    
    
    
    
    
    1,556,252
    
    
    
    10,980
    
    
    
    
    
    
    
    1,567,232Selling, distribution and
administrative expenses
    
    
    6,593
    
    
    
    1,117,741
    
    
    
    24,645
    
    
    
    
    
    
    
    1,148,979Depreciation
    
    
    6,074
    
    
    
    129,656
    
    
    
    3,088
    
    
    
    
    
    
    
    138,818Amortization
    
    
    
    
    
    
    8,525
    
    
    
    
    
    
    
    
    
    
    
    8,525Operating Income (Loss)
    
    
    (12,667
    )
    
    
    356,058
    
    
    
    (1,894
    )
    
    
    
    
    
    
    341,497Interest (expense) income, net
    
    
    (74,369
    )
    
    
    15,315
    
    
    
    (1,126
    )
    
    
    
    
    
    
    (60,180
    )(Discount) gain on securitization
of trade receivables
    
    
    
    
    
    
    (81,487
    )
    
    
    67,857
    
    
    
    
    
    
    
    (13,630
    )Loss on the extinguishment of debt
    
    
    (12,099
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,099
    )Other income (expense), net
    
    
    (82
    )
    
    
    (733
    )
    
    
    2,371
    
    
    
    
    
    
    
    1,556Earnings (loss) before income
taxes and minority interest
    
    
    (99,217
    )
    
    
    289,153
    
    
    
    67,208
    
    
    
    
    
    
    
    257,144Income tax benefit (expense)
    
    
    34,555
    
    
    
    (110,978
    )
    
    
    (23,460
    )
    
    
    
    
    
    
    (99,883
    )Minority interest in earnings of
consolidated affiliate
    
    
    
    
    
    
    (2,845
    )
    
    
    
    
    
    
    
    
    
    
    (2,845
    )Equity in earnings of subsidiaries
    
    
    219,078
    
    
    
    
    
    
    
    
    
    
    
    (219,078
    )
    
    
    Net Earnings
    
    $
    154,416
    
    
    $
    175,330
    
    
    $
    43,748
    
    
    $
    (219,078
    )
    
    $
    154,416
 F - 52




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Condensed Consolidating Statement of Cash Flows
Year Ended
March 31, 2009
 Non-
    
    
    Elimination(In thousands)
    
    Parent
    
    
    Guarantors
    
    
    Guarantors
    
    
    Entries
    
    
    ConsolidatedNet cash provided by (used in)
operating activities
    
    $
    (107,739
    )
    
    $
    602,221
    
    
    $
    88,285
    
    
    $
    
    
    
    $
    582,767CASH FLOWS FROM INVESTING ACTIVITIESCapital expenditures
    
    
    (19,780
    )
    
    
    (323,959
    )
    
    
    (8,173
    )
    
    
    
    
    
    
    (351,912
    )Proceeds from sales of plant and equipment
    
    
    303
    
    
    
    4,711
    
    
    
    9,346
    
    
    
    
    
    
    
    14,360Business acquisitions and holdback
settlements
    
    
    
    
    
    
    (252,070
    )
    
    
    (21,680
    )
    
    
    
    
    
    
    (273,750
    )Other, net
    
    
    (10
    )
    
    
    9,980
    
    
    
    (8,592
    )
    
    
    
    
    
    
    1,378Receipts
from subsidiaries, net
    
    
    82,368
    
    
    
    
    
    
    
    
    
    
    
    (82,368
    )
    
    
    Net cash provided by (used in) investing
activities
    
    
    62,881
    
    
    
    (561,338
    )
    
    
    (29,099
    )
    
    
    (82,368
    )
    
    
    (609,924
    )CASH FLOWS FROM FINANCING ACTIVITIESProceeds from borrowings
    
    
    1,309,188
    
    
    
    26,981
    
    
    
    28,254
    
    
    
    
    
    
    
    1,364,423Repayment of debt
    
    
    (1,119,879
    )
    
    
    (55,197
    )
    
    
    (13,599
    )
    
    
    
    
    
    
    (1,188,675
    )Financing costs
    
    
    (9,201
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,201
    )Purchase of treasury stock
    
    
    (120,219
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (120,219
    )Proceeds from exercise of stock options
    
    
    16,188
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16,188Stock issued for the employee stock
purchase plan
    
    
    16,507
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16,507Tax benefit realized from the exercise of
stock options
    
    
    11,846
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,846Dividends paid to stockholders
    
    
    (45,766
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (45,766
    )Change in cash overdraft
    
    
    (13,806
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13,806
    )Changes in due to/from parent
    
    
    
    
    
    
    (12,572
    )
    
    
    (69,796
    )
    
    
    82,368
    
    
    
    Net cash provided by (used in) financing
activities
    
    
    44,858
    
    
    
    (40,788
    )
    
    
    (55,141
    )
    
    
    82,368
    
    
    
    31,297CHANGE IN CASH
    
    $
    
    
    
    $
    95
    
    
    $
    4,045
    
    
    $
    
    
    
    $
    4,140Cash  Beginning of period
    
    
    
    
    
    
    40,397
    
    
    
    2,651
    
    
    
    
    
    
    
    43,048Cash  End of period
    
    $
    
    
    
    $
    40,492
    
    
    $
    6,696
    
    
    $
    
    
    
    $
    47,188
 F - 53




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##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Condensed Consolidating Statement of Cash Flows
Year Ended
March 31, 2008
 Non-
    
    
    Elimination(In thousands)
    
    Parent
    
    
    Guarantors
    
    
    Guarantors
    
    
    Entries
    
    
    ConsolidatedNet cash provided by (used
in) operating activities
    
    $
    (33,482
    )
    
    $
    547,867
    
    
    $
    35,541
    
    
    $
    
    
    
    $
    549,926CASH FLOWS FROM INVESTING
ACTIVITIESCapital expenditures
    
    
    (3,910
    )
    
    
    (255,264
    )
    
    
    (8,204
    )
    
    
    
    
    
    
    (267,378
    )Proceeds from sales of plant
and equipment
    
    
    6
    
    
    
    8,592
    
    
    
    747
    
    
    
    
    
    
    
    9,345Business acquisitions and
holdback settlements
    
    
    
    
    
    
    (480,096
    )
    
    
    
    
    
    
    
    
    
    
    (480,096
    )Other, net
    
    
    (18
    )
    
    
    7,398
    
    
    
    (8,696
    )
    
    
    
    
    
    
    (1,316
    )Advances to subsidiaries, net
    
    
    (262,684
    )
    
    
    
    
    
    
    
    
    
    
    262,684
    
    
    
    Net cash used in investing
activities
    
    
    (266,606
    )
    
    
    (719,370
    )
    
    
    (16,153
    )
    
    
    262,684
    
    
    
    (739,445
    )CASH FLOWS FROM FINANCING
ACTIVITIESProceeds from borrowings
    
    
    1,132,610
    
    
    
    19,565
    
    
    
    10,277
    
    
    
    
    
    
    
    1,162,452Repayment of debt
    
    
    (831,166
    )
    
    
    (119,127
    )
    
    
    (3,456
    )
    
    
    
    
    
    
    (953,749
    )Minority interest in earnings
    
    
    
    
    
    
    (711
    )
    
    
    
    
    
    
    
    
    
    
    (711
    )Purchase of treasury stock
    
    
    (17,010
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (17,010
    )Proceeds from the exercise of stock options
    
    
    20,381
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,381Stock issued for the employee
stock purchase plan
    
    
    14,091
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,091Tax benefit realized from the
exercise of stock options
    
    
    13,327
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,327Dividends paid to stockholders
    
    
    (31,828
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (31,828
    )Change in cash overdraft
    
    
    (317
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (317
    )Changes in due to/from parent
    
    
    
    
    
    
    286,923
    
    
    
    (24,239
    )
    
    
    (262,684
    )
    
    
    Net cash provided by (used
in) financing activities
    
    
    300,088
    
    
    
    186,650
    
    
    
    (17,418
    )
    
    
    (262,684
    )
    
    
    206,636CHANGE IN CASH
    
    $
    
    
    
    $
    15,147
    
    
    $
    1,970
    
    
    $
    
    
    
    $
    17,117Cash  Beginning of period
    
    
    
    
    
    
    25,250
    
    
    
    681
    
    
    
    
    
    
    
    25,931Cash  End of period
    
    $
    
    
    
    $
    40,397
    
    
    $
    2,651
    
    
    $
    
    
    
    $
    43,048
 F - 54




---



##### Table of Contents



AIRGAS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Condensed Consolidating Statement of Cash Flows
Year Ended
March 31, 2007
 Non-
    
    
    Elimination(In thousands)
    
    Parent
    
    
    Guarantors
    
    
    Guarantors
    
    
    Entries
    
    
    ConsolidatedNet cash provided by (used
in) operating activities
    
    $
    (102,808
    )
    
    $
    432,677
    
    
    $
    (3,526
    )
    
    $
    
    
    
    $
    326,343CASH FLOWS FROM INVESTING
ACTIVITIESCapital expenditures
    
    
    (4,012
    )
    
    
    (228,672
    )
    
    
    (5,590
    )
    
    
    
    
    
    
    (238,274
    )Proceeds from sales of plant
and equipment
    
    
    177
    
    
    
    8,349
    
    
    
    159
    
    
    
    
    
    
    
    8,685Business acquisitions and
holdback settlements
    
    
    
    
    
    
    (687,892
    )
    
    
    
    
    
    
    
    
    
    
    (687,892
    )Other, net
    
    
    (572
    )
    
    
    58
    
    
    
    40
    
    
    
    
    
    
    
    (474
    )Advances to subsidiaries, net
    
    
    (462,564
    )
    
    
    
    
    
    
    
    
    
    
    462,564
    
    
    
    Net cash used in investing
activities
    
    
    (466,971
    )
    
    
    (908,157
    )
    
    
    (5,391
    )
    
    
    462,564
    
    
    
    (917,955
    )CASH FLOWS FROM FINANCING
ACTIVITIESProceeds from borrowings
    
    
    1,480,984
    
    
    
    95,149
    
    
    
    1,834
    
    
    
    
    
    
    
    1,577,967Repayment of debt
    
    
    (926,827
    )
    
    
    (79,215
    )
    
    
    (2,144
    )
    
    
    
    
    
    
    (1,008,186
    )Financing costs
    
    
    (5,103
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,103
    )Premium paid on call of
senior subordinated notes
    
    
    (10,267
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,267
    )Minority interest in earnings
    
    
    
    
    
    
    (2,845
    )
    
    
    
    
    
    
    
    
    
    
    (2,845
    )Proceeds from the exercise of stock options
    
    
    15,107
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,107Stock issued for the employee
stock purchase plan
    
    
    11,951
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,951Tax benefit realized from the
exercise of stock options
    
    
    9,013
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,013Dividends paid to stockholders
    
    
    (21,980
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (21,980
    )Change in cash overdraft
    
    
    16,901
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16,901Changes in due to/from parent
    
    
    
    
    
    
    457,458
    
    
    
    5,106
    
    
    
    (462,564
    )
    
    
    Net cash provided by
financing activities
    
    
    569,779
    
    
    
    470,547
    
    
    
    4,796
    
    
    
    (462,564
    )
    
    
    582,558CHANGE IN CASH
    
    $
    
    
    
    $
    (4,933
    )
    
    $
    (4,121
    )
    
    $
    
    
    
    $
    (9,054
    )Cash  Beginning of period
    
    
    
    
    
    
    30,183
    
    
    
    4,802
    
    
    
    
    
    
    
    34,985Cash  End of period
    
    $
    
    
    
    $
    25,250
    
    
    $
    681
    
    
    $
    
    
    
    $
    25,931
 F - 55




---



##### Table of Contents



SCHEDULE II
 AIRGAS, INC. AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
 AdditionsBalance at
    
    Charged to
    
    Charged
    
    
    
    
    
    BalanceBeginning
    
    Costs and
    
    to Other
    
    
    
    
    
    at End ofDescription
    
    of Period
    
    Expenses
    
    Accounts
    
    Deductions
    
    Period2009Accounts receivable  allowances
for doubtful accounts
    
    $
    22,624
    
    
    $
    23,292
    
    
    $
    (376
    )       (1)
    
    $
    (17,968
    )      (2)
    
    $
    27,572Insurance reserves
    
    
    45,792
    
    
    
    128,014
    
    
    
    1,679
    (3)
    
    
    (120,234
    )      (4)
    
    
    55,251Deferred tax asset valuation
allowance
    
    
    5,098
    
    
    
    1,113
    (6)
    
    
    
    
    
    
    
    
    
    
    6,2112008Accounts receivable  allowances
for doubtful accounts
    
    $
    15,692
    
    
    $
    13,360
    
    
    $
    4,457
    (1)
    
    $
    (10,885
    )      (2)
    
    $
    22,624Insurance reserves
    
    
    34,846
    
    
    
    95,792
    
    
    
    8,002
    (3)
    
    
    (92,848
    )      (4)
    
    
    45,792Deferred tax asset valuation
allowance
    
    
    5,432
    
    
    
    
    
    
    
    
    
    
    
    (334
    )      (5)
    
    
    5,0982007Accounts receivable  allowances
for doubtful accounts
    
    $
    14,782
    
    
    $
    11,150
    
    
    $
    1,938
    (1)
    
    $
    (12,178
    )      (2)
    
    $
    15,692Insurance reserves
    
    
    30,664
    
    
    
    87,357
    
    
    
    
    
    
    
    (83,175
    )      (4)
    
    
    34,846Deferred tax asset valuation
allowance
    
    
    6,347
    
    
    
    
    
    
    
    
    
    
    
    (915
    )      (5)
    
    
    5,432
 
 (1)
    
    Principally reflects subsequent collections of accounts previously written-off.(2)
    
    Write-off of uncollectible accounts.(3)
    
    Represents the balance of probable claim losses in excess of the Companys
self-insured retention for which the Company is fully insured. The Company recorded these
additional business insurance reserves and corresponding insurance receivables in accordance
with FIN 39.(4)
    
    Payments of insurance premiums and claims.(5)
    
    Represents revised estimates of the realizability of certain tax benefits associated
with state net operating loss carryforwards along with changes due to the utilization and
expiration of net operating loss carryforwards.(6)
    
    Represents increases in valuation allowances placed on certain tax benefits
associated with state net operating loss carryforwards. F - 56