-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Krc5saoKGimrQ7ld8b1b/2q4eK9Jqfy2ay7ZFBw/4CIa5xfcw9Ch85SPGD3/4fWx 1Zd73Q6srQL2al7aPA19+A== 0000804212-99-000013.txt : 19990623 0000804212-99-000013.hdr.sgml : 19990623 ACCESSION NUMBER: 0000804212-99-000013 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990621 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AIRGAS INC CENTRAL INDEX KEY: 0000804212 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-CHEMICALS & ALLIED PRODUCTS [5160] IRS NUMBER: 560732648 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-09344 FILM NUMBER: 99649124 BUSINESS ADDRESS: STREET 1: 259 RADNOR-CHESETER ROAD STREET 2: SUITE 100 CITY: RADNOR STATE: PA ZIP: 19087 BUSINESS PHONE: 6106875253 MAIL ADDRESS: STREET 1: 259 RADNOR-CHESTER ROAD STREET 2: SUITE 100 CITY: RADNOR STATE: PA ZIP: 19087 11-K 1 FORM 11-K 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 11-K (Mark One) [ x ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1998 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to _______ Commission file numbers: 33-25419 and 33-64058 A. Full title of the plan and the address of the plan, if different from that of the issuer named below: Airgas, Inc. 401(k) Plan B. Name of the issuer of the securities held pursuant to the plan and the address of its principal executive office: Airgas, Inc. 259 North Radnor-Chester Road, Suite 100 Radnor, PA 19087-5283 2 REQUIRED INFORMATION (1) Financial Statements: The following financial statements, including Independent Auditors' Report thereon of Airgas, Inc. 401(k) Plan, are submitted herewith: Statements of Net Assets Available for Benefits as of December 31, 1998 and 1997 Statements of Changes in Net Assets Available for Benefits for the years ended December 31, 1998 and 1997 Notes to Financial Statements Item 27(a) - Schedule of Assets Held for Investment Purposes Item 27(d) - Schedule of Reportable Transactions The schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are included in the aforementioned financial statements of the Airgas, Inc. 401(k) Plan. (2) Exhibits: 23.1 Consent of KPMG LLP 3 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan Administrator has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. AIRGAS, INC. 401(k) PLAN (Name of Plan) BY:/s/ 401(k) Plan Committee _____________________________ BY:/s/ Scott M. Melman _____________________________ Scott M. Melman Senior Vice President and Chief Financial Officer BY:/s/ Todd R. Craun _____________________________ Todd R. Craun General Counsel and Secretary DATED: June 18, 1999 4 AIRGAS, INC. 401(k) PLAN Financial Statements and Supplementary Schedules December 31, 1998 and 1997 (With Independent Auditors' Report Thereon) 5 AIRGAS, INC. 401(k) PLAN December 31, 1998 and 1997 INDEX ______________________________________________________________________________ Page Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . . 6 Financial Statements: Statement of Net Assets Available for Benefits as of December 31, 1998 . . . . . . . . . . . . . . . . . . . . . . 7 Statement of Net Assets Available for Benefits as of December 31, 1997 . . . . . . . . . . . . . . . . . . . . . . 9 Statement of Changes in Net Assets Available for Benefits for the years ended December 31, 1998. . . . . . . . . . . 11 Statement of Changes in Net Assets Available for Benefits for the years ended December 31, 1997. . . . . . . . . . . 14 Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . 17 Schedule 1 Item 27(a) - Schedule of Assets Held for Investment Purposes . . . . 26 2 Item 27(d) - Schedule of Reportable Transactions . . . . . . . . . . 27 6 INDEPENDENT AUDITORS' REPORT The Plan Administrator Airgas, Inc. 401(k) Plan: We have audited the accompanying statements of net assets available for benefits of the Airgas, Inc. 401(k) Plan as of December 31, 1998 and 1997, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Airgas, Inc. 401(k) Plan at December 31, 1998 and 1997 and the changes in net assets available for benefits for the years then ended, in conformity with generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of assets held for investment purposes and reportable transactions as of and for the year ended December 31, 1998, are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedules have been subjected to the auditing procedures applied in the audits of the basic financial statements, and in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. The Fund Information in the statement of net assets available for benefits and the statement of changes in net assets available for benefits is presented for purposes of additional analysis rather than to present the net assets available for plan benefits and changes in net assets available for plan benefits of each fund. The supplemental schedules and Fund Information have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. KPMG LLP Philadelphia, Pennsylvania May 7, 1999 7 AIRGAS, INC. 401(k) PLAN Statement of Net Assets Available for Benefits, with Fund Information December 31, 1998
Fund Information ___________________________________________________________________________________________________ Vanguard Airgas Vanguard Vanguard Vanguard LifeStrategy Common Vanguard International U.S. Vanguard Vanguard LifeStrategy Moderate Stock Explorer Growth Growth 500 Index Wellington Growth Growth Fund Fund Fund Fund Fund Fund Fund Fund _______________________________________________________________________________________________________________________________ Assets: Investments $20,933,219 1,248,175 1,473,454 31,307,598 8,693,400 16,088,469 2,282,700 1,901,235 Receivables: Employee contributions 214,814 25,939 25,161 194,331 111,643 121,499 43,792 23,455 Employer contributions 70,602 5,785 5,873 54,255 27,551 36,144 11,266 5,912 _______________________________________________________________________________________________________________________________ Total receivables 285,416 31,724 31,034 248,586 139,194 157,643 55,058 29,367 _______________________________________________________________________________________________________________________________ Employee loans -- -- -- -- -- -- -- -- _______________________________________________________________________________________________________________________________ Net assets available for benefits $21,218,635 1,279,899 1,504,488 31,556,184 8,832,594 16,246,112 2,337,758 1,930,602 _______________________________________________________________________________________________________________________________ See accompanying notes to financial statements. (Continued on next page)
8 AIRGAS, INC. 401(k) PLAN Statement of Net Assets Available for Benefits, with Fund Information (Continued from previous page) December 31, 1998
Fund Information ____________________________________________________________________________ Vanguard LifeStrategy Vanguard Vanguard Conservative LifeStrategy Total Bond Investment Participant Growth Income Market Index Contract Loan Fund Fund Fund Fund Fund Total _______________________________________________________________________________________________________________ Assets: Investments $ 765,504 596,726 1,548,271 21,720,307 -- 108,559,058 Receivables: Employee contributions 9,805 5,983 13,620 109,822 -- 899,864 Employer contributions 2,741 1,633 3,185 38,439 -- 263,386 _______________________________________________________________________________________________________________ Total receivables 12,546 7,616 16,805 148,261 -- 1,163,250 _______________________________________________________________________________________________________________ Employee loans -- -- -- -- 5,052,738 5,052,738 _______________________________________________________________________________________________________________ Net assets available for benefits $ 778,050 604,342 1,565,076 21,868,568 5,052,738 114,775,046 _______________________________________________________________________________________________________________ See accompanying notes to financial statements.
9 AIRGAS, INC. 401(k) PLAN Statement of Net Assets Available for Benefits, with Fund Information December 31, 1997
Fund Information _____________________________________________________________________________________________________ Vanguard Airgas Vanguard Vanguard Vanguard LifeStrategy Common Vanguard International U.S. Vanguard Vanguard LifeStrategy Moderate Stock Explorer Growth Growth 500 Index Wellington Growth Growth Fund Fund Fund Fund Fund Fund Fund Fund ___________________________________________________________________________________________________________________________ Assets: Investments $31,094,350 712,579 833,923 19,564,818 3,429,706 12,285,732 641,028 617,754 Receivables: Employee contributions 328,786 18,837 18,029 181,007 55,313 122,093 22,906 10,446 Employer contributions 82,762 3,997 3,467 43,855 12,108 31,007 5,518 2,513 _______________________________________________________________________________________________________________________________ Total receivables 411,548 22,834 21,496 224,862 67,421 153,100 28,424 12,959 _______________________________________________________________________________________________________________________________ Employee loans -- -- -- -- -- -- -- -- _______________________________________________________________________________________________________________________________ Net assets available for benefits $31,505,898 735,413 855,419 19,789,680 3,497,127 12,438,832 669,452 630,713 _______________________________________________________________________________________________________________________________ See accompanying notes to financial statements. (Continued on next page)
10 AIRGAS, INC. 401(k) PLAN Statement of Net Assets Available for Benefits, with Fund Information (Continued from previous page) December 31, 1997
Fund Information _____________________________________________________________________ Vanguard LifeStrategy Vanguard Vanguard Conservative LifeStrategy Total Bond Investment Participant Growth Income Market Index Contract Loan Fund Fund Fund Fund Fund Total _______________________________________________________________________________________________________ Assets: Investments $ 509,496 205,599 346,319 19,590,497 -- 89,831,801 Receivables: Employee contributions 4,115 3,076 4,735 136,654 -- 905,997 Employer contributions 1,022 613 1,088 38,377 -- 226,327 ________________________________________________________________________________________________________________ Total receivables 5,137 3,689 5,823 175,031 -- 1,132,324 ________________________________________________________________________________________________________________ Employee loans -- -- -- -- 4,445,300 4,445,300 ________________________________________________________________________________________________________________ Net assets available for benefits $ 514,633 209,288 352,142 19,765,528 4,445,300 95,409,425 ________________________________________________________________________________________________________________ See accompanying notes to financial statements.
11 AIRGAS, INC. 401(k) PLAN Statement of Changes in Net Assets Available for Benefits, with Fund Information Year ended December 31, 1998
Fund Information ______________________________________________________________________________ Airgas Vanguard Vanguard Common Vanguard International U.S. Vanguard Vanguard Stock Explorer Growth Growth 500 Index Wellington Fund Fund Fund Fund Fund Fund __________________________________________________________________________________________________________________ Investment income (loss): Net appreciation (depreciation) in fair value of investments $(11,569,119) 44,928 144,286 6,434,186 1,422,550 (184,810) Interest and dividends 1,610 11,811 29,553 1,956,012 117,902 1,762,734 __________________________________________________________________________________________________________________ Total investment income (loss) (11,567,509) 56,739 173,839 8,390,198 1,540,452 1,577,924 __________________________________________________________________________________________________________________ Contributions: Employee 3,310,048 396,997 425,813 2,857,403 1,767,183 1,900,573 Employer 2,070,071 96,295 95,847 1,193,763 455,702 843,591 __________________________________________________________________________________________________________________ Total contributions 5,380,119 493,292 521,660 4,051,166 2,222,885 2,744,164 __________________________________________________________________________________________________________________ Disbursements: Benefits paid to participants (2,259,771) (52,416) (110,781) (1,823,074) (290,880) (894,136) Administrative fees (26,897) (1,555) (1,603) (17,199) (5,874) (13,674) __________________________________________________________________________________________________________________ Total disbursements (2,286,668) (53,971) (112,384) (1,840,273) (296,754) (907,810) __________________________________________________________________________________________________________________ Transfers from other benefit plans 441,538 157,827 245,312 864,220 1,056,626 724,398 __________________________________________________________________________________________________________________ Interfund transfers, including loans granted, net of loan repayments (2,254,743) (109,401) (179,358) 301,193 812,258 (331,396) __________________________________________________________________________________________________________________ Net change to plan (10,287,263) 544,486 649,069 11,766,504 5,335,467 3,807,280 Net assets available for benefits: Beginning of year 31,505,898 735,413 855,419 19,789,680 3,497,127 12,438,832 __________________________________________________________________________________________________________________ End of year $ 21,218,635 1,279,899 1,504,488 31,556,184 8,832,594 16,246,112 __________________________________________________________________________________________________________________ See accompanying notes to financial statements. (Continued on next page)
12 AIRGAS, INC. 401(k) PLAN Statement of Changes in Net Assets Available for Benefits, with Fund Information (Continued from previous page) Year ended December 31, 1998
Fund Information ______________________________________________________________________________ Vanguard Vanguard Vanguard Vanguard LifeStrategy LifeStrategy Life Vanguard LifeStrategy Moderate Conservative Strategy Total Bond Investment Growth Growth Growth Income Market Index Contract Fund Fund Fund Fund Fund Fund __________________________________________________________________________________________________________________ Investment income (loss): Net appreciation (depreciation) in fair value of investments $ 210,352 141,263 57,705 24,835 11,706 29 Interest and dividends 77,209 76,935 37,008 32,733 55,138 1,167,091 __________________________________________________________________________________________________________________ Total investment income (loss) 287,561 218,198 94,713 57,568 66,844 1,167,120 __________________________________________________________________________________________________________________ Contributions: Employee 729,906 592,218 176,715 112,840 232,359 1,405,025 Employer 171,049 87,414 35,656 29,364 41,752 1,367,171 __________________________________________________________________________________________________________________ Total contributions 900,955 679,632 212,371 142,204 274,111 2,772,196 __________________________________________________________________________________________________________________ Disbursements: Benefits paid to participants (111,739) (59,127) (196,023) (2,974) (72,239) (2,028,616) Administrative fees (2,918) (1,787) (827) (450) (877) (22,687) __________________________________________________________________________________________________________________ Total disbursements (114,657) (60,914) (196,850) (3,424) (73,116) (2,051,303) __________________________________________________________________________________________________________________ Transfers from other benefit plans 328,249 194,480 214,297 33,258 137,991 558,197 __________________________________________________________________________________________________________________ Interfund transfers, including loans granted, net of loan repayment 266,198 268,493 (61,114) 165,448 807,104 (343,170) __________________________________________________________________________________________________________________ Net change to plan 1,668,306 1,299,889 263,417 395,054 1,212,934 2,103,040 Net assets available for benefits: Beginning of year 669,452 630,713 514,633 209,288 352,142 19,765,528 __________________________________________________________________________________________________________________ End of year $2,337,758 1,930,602 778,050 604,342 1,565,076 21,868,568 __________________________________________________________________________________________________________________ See accompanying notes to financial statements. (Continued on next page)
13 AIRGAS, INC. 401(k) PLAN Statement of Changes in Net Assets Available for Benefits, with Fund Information (Continued from previous page) Year ended December 31, 1998
Fund Information ________________ Participant Loan Fund Total ______________________________________________________________________ Investment income (loss): Net appreciation (depreciation) in fair value of investments -- (3,262,089) Interest and dividends $ 434,368 5,760,104 ______________________________________________________________________ Total investment income (loss) 434,368 2,498,015 ______________________________________________________________________ Contributions: Employee -- 13,907,080 Employer -- 6,487,675 ______________________________________________________________________ Total contributions -- 20,394,755 ______________________________________________________________________ Disbursements: Benefits paid to participants (569,121) (8,470,897) Administrative fees -- (96,348) ______________________________________________________________________ Total disbursements (569,121) (8,567,245) ______________________________________________________________________ Transfers from other benefit plans 83,703 5,040,096 ______________________________________________________________________ Interfund transfers, including loans granted, net of loan repayment 658,488 -- ______________________________________________________________________ Net change to plan 607,438 19,365,621 Net assets available for benefits: Beginning of year 4,445,300 95,409,425 ______________________________________________________________________ End of year $5,052,738 114,775,046 ______________________________________________________________________ See accompanying notes to financial statements.
14 AIRGAS, INC. 401(k) PLAN Statement of Changes in Net Assets Available for Benefits, with Fund Information Year ended December 31, 1997
Fund Information ___________________________________________________________________________ Airgas Vanguard Vanguard Common Vanguard International U.S. Vanguard Vanguard Stock Explorer Growth Growth 500 Index Wellington Fund Fund Fund Fund Fund Fund ______________________________________________________________________________________________________________ Investment income (loss): Net appreciation (depreciation) in fair value of investments $(12,303,912) (67,801) (93,873) 2,033,531 164,617 724,808 Interest and dividends 33,148 73,646 37,953 796,130 54,698 1,017,846 ______________________________________________________________________________________________________________ Total investment income (loss) (12,270,764) 5,845 (55,920) 2,829,661 219,315 1,742,654 ______________________________________________________________________________________________________________ Contributions: Employee 4,861,545 131,461 282,565 2,346,444 921,431 1,778,333 Employer 2,657,573 26,018 27,245 1,095,611 90,052 783,713 ______________________________________________________________________________________________________________ Total contributions 7,519,118 157,479 309,810 3,442,055 1,011,483 2,562,046 ______________________________________________________________________________________________________________ Disbursements: Benefits paid to participants (2,420,554) (11,852) (3,793) (894,762) (70,972) (727,142) Administrative fees (142,602) (6,539) (364) (45,805) (1,229) (48,773) ______________________________________________________________________________________________________________ Total disbursements (2,563,156) (18,391) (4,157) (940,567) (72,201) (775,915) ______________________________________________________________________________________________________________ Transfer from other benefit plans 34,506 - - - - - ______________________________________________________________________________________________________________ Interfund transfers, including loans granted, net of loan repayment (6,606,292) 590,480 605,686 14,458,531 2,338,530 8,910,047 ______________________________________________________________________________________________________________ Net change to plan (13,886,588) 735,413 855,419 19,789,680 3,497,127 12,438,832 Net assets available for benefits: Beginning of year 45,392,486 - - - - - ______________________________________________________________________________________________________________ End of year $31,505,898 735,413 855,419 19,789,680 3,497,127 12,438,832 ______________________________________________________________________________________________________________ See accompanying notes to financial statements. (Continued on next page)
15 AIRGAS, INC. 401(k) PLAN Statement of Changes in Net Assets Available for Benefits, with Fund Information (Continued from previous page) Year ended December 31, 1997
Fund Information _____________________________________________________________________________ Vanguard Vanguard Vanguard Vanguard LifeStrategy LifeStrategy Life Vanguard LifeStrategy Moderate Conservative Strategy Total Bond Investment Growth Growth Growth Income Market Index Contract Fund Fund Fund Fund Fund Fund _________________________________________________________________________________________________________________ Investment income (loss): Net appreciation (depreciation) in fair value of investments $ 6,289 3,355 72 2,070 5,356 -- Interest and dividends 23,108 24,520 19,133 6,391 8,957 1,649,915 _________________________________________________________________________________________________________________ Total investment income (loss) 29,397 27,875 19,205 8,461 14,313 1,649,915 _________________________________________________________________________________________________________________ Contributions: Employee 332,167 351,387 75,911 128,586 93,400 1,871,166 Employer 40,324 17,056 6,868 8,079 9,410 1,453,325 _________________________________________________________________________________________________________________ Total contributions 372,491 368,443 82,779 136,665 102,810 3,324,491 _________________________________________________________________________________________________________________ Disbursements: Benefits paid to participants (1,800) (3,405) (5,802) (3,349) (42,508) (1,684,112) Administrative fees (501) (299) (161) (85) (151) (88,111) _________________________________________________________________________________________________________________ Total disbursements (2,301) (3,704) (5,963) (3,434) (42,659) (1,772,223) _________________________________________________________________________________________________________________ Transfer from other benefit plans - - - - - 508,388 _________________________________________________________________________________________________________________ Interfund transfers, including loans granted, net of loan repayment 269,865 238,099 418,612 67,596 277,678 (368,412) _________________________________________________________________________________________________________________ Net change to plan 669,452 630,713 514,633 209,288 352,142 3,342,159 Net assets available for benefits: Beginning of year - - - - - 16,423,369 _________________________________________________________________________________________________________________ End of year $669,452 630,713 514,633 209,288 352,142 19,765,528 _________________________________________________________________________________________________________________ See accompanying notes to financial statements. (Continued on next page)
16 AIRGAS, INC. 401(k) PLAN Statement of Changes in Net Assets Available for Benefits, with Fund Information (Continued from previous page) Year ended December 31, 1997
Fund Information _________________________________________________ Vanguard Fidelity Fidelity Money Participant Magellan Puritan Market Loan Fund Fund Account Fund Total ______________________________________________________________________________________________________ Investment income (loss): Net appreciation (depreciation) in fair value of investments $ 372,572 163,522 - - (8,989,394) Interest and dividends 4,831 2,113 - 355,986 4,108,375 ______________________________________________________________________________________________________ Total investment income (loss) 377,403 165,635 - 355,986 (4,881,019) ______________________________________________________________________________________________________ Contributions: Employee - - - - 13,174,396 Employer - - - - 6,215,274 ______________________________________________________________________________________________________ Total contributions - - - - 19,389,670 ______________________________________________________________________________________________________ Disbursements: Benefits paid to participants - - - (152,574) (6,022,625) Administrative fees - - - (2,792) (337,412) ______________________________________________________________________________________________________ Total disbursements - - - (155,366) (6,360,037) ______________________________________________________________________________________________________ Transfer from other benefit plans 462,559 99,941 - 24,715 1,130,109 ______________________________________________________________________________________________________ Interfund transfers, including loans granted, net of loan repayment (13,015,346) (7,746,253) (1,774,642) 1,335,821 - ______________________________________________________________________________________________________ Net change to plan (12,175,384) (7,480,677) (1,774,642) 1,561,156 9,278,723 Net assets available for benefits: Beginning of year 12,175,384 7,480,677 1,774,642 2,884,144 86,130,702 ______________________________________________________________________________________________________ End of year $ - - - 4,445,300 95,409,425 ______________________________________________________________________________________________________ See accompanying notes to financial statements.
17 AIRGAS, INC. 401(k) PLAN Notes to Financial Statements December 31, 1998 and 1997 (1)Description of the Plan The following description of the Airgas, Inc. 401(k) Plan (the Plan) provides general information only. Participants should refer to the plan agreement for more complete information. (a)General The Plan is a defined contribution plan covering substantially all employees of Airgas, Inc. and subsidiaries (the Company). Included in the assets of the Plan are contribution rollovers from benefit plans of acquired companies, where applicable. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). (b)Contributions Employee: The Plan permits a participant to defer up to 15% of eligible compensation. The amount of deferred compensation is treated as a salary reduction and is not subject to federal income tax until withdrawn from the Plan. In no event will the contribution exceed maximum allowable contributions as prescribed by the Internal Revenue Service. Employer: Contributions to the Plan by the Company are made on a matched basis and at a rate of 50% of participant deferred compensation. The employer match is applied on employee contributions of up to 4% of eligible compensation (i.e., maximum employer match is 2% of eligible compensation). Plan participants are eligible for Company matching contributions upon completing a consecutive twelve-month period of employment in which an employee is credited with at least 1,000 hours of service. In addition to the required Company match, the Company may elect to make discretionary contributions as determined by the Board of Directors. The Company made profit sharing discretionary contributions of $3,409,641 and $3,331,831 for the years ended December 31, 1998 and 1997, respectively. The Company determines its discretionary contribution based on the overall profitability of the Company. Of that amount, the Company allocates a portion to each subsidiary based on that subsidiary's profitability. Each subsidiary then allocates its profit sharing to individual participants based on their proportionate earnings. 18 (1) Continued (c)Participant Accounts Contributions are invested as directed by each participant in 12 separate investment funds. Each participant may designate, by written notice to the plan administrator, how the contributions to his or her account are to be allocated among the 12 funds. Participants are required to allocate contributions to the funds in increments of 1% of total contributions. In the event a participant fails to submit a written notice of allocation, contributions will be invested in the Investment Contract Fund. In addition to the above initial election, participants may elect, by calling The Vanguard Group (Vanguard), to transfer, in 1% increments of the total funds credited to their account, monies among the investment funds. Interest, dividends, and other income earned by the investment funds, net of administrative fees, are reinvested in the same fund. Such amounts are allocated to participants based upon the proportion of a participant's balance to the total fund balance. (d)Participant Loans The plan administrator may, upon the application of a participant, direct the Trustee to make a loan to such participant. The maximum the participant may borrow is limited to the lesser of 50% of the participant's plan balance or $50,000. The minimum loan amount is $1,000. The loan will bear interest at a rate equal to prime plus 2% and shall provide for periodic repayment over a reasonable period of time not to exceed five years for general purpose loans and 30 years for principal residence loans. Prime rate at December 31, 1998 was 7.75%. (e)Vesting Participants are immediately vested in all contributions. In addition, all earnings on such investments are fully vested. (f)Payment of Benefits Upon retirement, death, or termination of service, participants or beneficiaries are entitled to a distribution equal to the total value of their accounts. Such distributions are generally payable in cash. Participants experiencing serious financial hardships may be entitled to a distribution upon approval by the plan administrator. (g)Administrative Expenses All administrative expenses have been paid by the Plan participants. 19 (2)Recent Events During the plan years ended December 31, 1998 and 1997, the Company amended the Plan for the following items: (a)Merger of 401(k) Plans Effective January 1, 1997, the Keokuk Bargaining Unit 401(k) Plan, an employee benefit plan of a subsidiary of the Company, was merged with and into the Plan. During 1998, in connection with acquisitions completed by the Company, there were transfers in from certain 401(k) plans. (b)Change of Trustee and Investment Options Effective January 31, 1997, the Plan changed its trustee to Vanguard. Prior to January 31, 1997, the Plan's investments were maintained by the Plan's trustee, CoreStates Bank. The Plan also changed its investment options, keeping only the Airgas Common Stock Fund and the GIC Fund (renamed the Investment Contract Fund) and adding ten Vanguard funds. Plan assets were fully transferred to the new investments by April 1997. (3)Summary of Significant Accounting Policies (a)Basis of Accounting The accompanying financial statements of the Plan have been prepared on the accrual basis of accounting and present net assets available for benefits and changes in those assets. (b)Investments The fair values of the ten Vanguard funds are based on the net asset values per share at year-end. The Investment Contract Fund is valued at year-end contract values. Contract value represents contributions made under the contract, plus interest at the contract rate, less funds used to pay administrative expenses charged by the insurance company. Purchases and sales of investments are recorded on a trade-date basis. Interest income is accrued when earned. Dividend income is recorded on the ex-dividend date. Capital gain distributions are included in dividend income. Investments in the Airgas Common Stock Fund are valued at market value based upon closing prices at the plan year-end. At December 31, 1998, 3,690 plan participants were invested in the Airgas Common Stock Fund. The value per share was $8.94 at December 31, 1998. The Vanguard Explorer Fund seeks to provide long-term growth of capital by investing in a diversified group of small-company stocks with prospect for above-average growth. At December 31, 1998 the Vanguard Explorer Fund had 580 plan participants invested in the fund. The value per share was $56.71 at December 31, 1998. The Vanguard International Growth Fund seeks to provide long-term growth of capital by investing in stock of high-quality, seasoned companies based outside the United States. Stocks are selected from more than 15 countries. At December 31, 1998, the Vanguard International Growth Fund had 630 plan participants invested in the fund. The value per share was $18.77 at December 31, 1998. 20 (3) Continued Vanguard U.S. Growth Fund seeks to provide long-term growth of capital by investing in large, high-quality, seasoned U.S. companies with records of exceptional growth and above-average prospects for future growth. At December 31, 1998, the Vanguard U.S. Growth Fund had 3,075 plan participants invested in the fund. The value per share was $37.49 at December 31, 1998. The Vanguard 500 Index Fund seeks to provide long-term growth of capital and income from dividends by holding each of the 500 stocks that make up the unmanaged Standard & Poor's 500 Composite Stock Price Index, a widely recognized benchmark of U.S. market performance. At December 31, 1998 the Vanguard 500 Index Fund had 1,476 plan participants invested in the fund. The value per share was $113.95 at December 31, 1998. The Vanguard Wellington Fund seeks to provide income and long-term growth of capital, without undue risk to capital, by investing approximately 65% of its assets in stocks and the remaining 35% in bonds. At December 31, 1998, the Vanguard Wellington Fund had 2,485 plan participants invested in the fund. The value per share was $29.35 at December 31, 1998. The Vanguard LifeStrategy Growth Fund seeks to provide long-term growth of capital and income by investing in four Vanguard funds: a domestic stock fund; an international stock fund; a bond fund; and an asset allocation fund. At December 31, 1998, the Vanguard LifeStrategy Growth Fund has 725 plan participants invested in the fund. The value per share was $18.79 at December 31, 1998. The Vanguard LifeStrategy Moderate Growth Fund seeks to provide income and long-term growth of capital and income by investing in four Vanguard funds: a domestic stock fund; an international stock fund; a bond fund; and an asset allocation fund. The Portfolio's asset allocation ranges are expected to be 45%-70% stocks, 30%-55% bonds, and 0%-25% cash investments. At December 31, 1998, the Vanguard LifeStrategy Moderate Growth Fund had 480 plan participants invested in the fund. The value per share was $16.86 at December 31, 1998. The Vanguard LifeStrategy Conservative Growth Fund seeks to provide income and moderate long-term growth of capital and income by investing in five Vanguard funds: a domestic stock fund; international stock fund; two bond funds; and an asset allocation fund. The portfolio's asset allocation ranges are expected to be 25%-50% stocks, 50%-75% bonds, and 0%-25% cash investments. At December 31, 1998 the Vanguard LifeStrategy Conservative Growth Fund had 257 plan participants invested in the fund. The value per share was $14.71 at December 31, 1998. The Vanguard LifeStrategy Income Fund seeks to provide a high level of income by investing in four Vanguard funds: a stock fund; two bond funds; and an asset allocation fund. The Portfolio's asset allocation ranges are expected to be 5%-30% stocks, 70%-95% bonds, and 0%-25% cash investments. At December 31, 1998, the Vanguard LifeStrategy Income Fund had 164 plan participants invested in the fund. The value per share was $13.22 at December 31, 1998. 21 (3) Continued The Vanguard Total Bond Market Index Fund seeks to provide a high level of interest income by attempting to match the performance of the unmanaged Lehman Brothers Aggregate Bond Index, a widely recognized measure of the entire taxable U.S. bond market. At December 31, 1998, the Vanguard Total Bond Market Index Fund had 339 plan participants invested in the fund. The value per share was $10.27 at December 31, 1998. The Investment Contract Fund seeks to preserve the value of the participants' original investment and provide an attractive level of interest by investing primarily in investment contracts issued by insurance companies and banks, and other similar types of fixed- principal investments. It is designed to maintain a constant $1.00 share value. At December 31, 1998, 3,390 plan participants invested in Airgas Investment Contract Fund. (c)Use of Estimates The preparation of the financial statements in accordance with generally accepted accounting principles requires the plan administrator to make estimates that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts included in the statement of changes in net assets available for plan benefits. Actual results could differ from those estimates. 22 (4)Investments The following presents fair value of investments and the contract value of the guaranteed investment contracts fund held at December 31, 1998 and 1997:
December 31, 1998 ______________________________________________________________________________________________ Fair/Contract Number of Shares Investments Cost Value ______________________________________________________________________________________________ Common Stock: 2,342,178 Airgas Common Stock Fund $ 29,637,729 20,933,219 ______________________________________________________________________________________________ Mutual Funds: 22,010 Vanguard Explorer Fund 1,248,829 1,248,175 78,500 Vanguard International Growth Fund 1,415,149 1,473,454 835,092 Vanguard U.S. Growth Fund 23,658,731 31,307,598 76,291 Vanguard 500 Index Fund 7,273,372 8,693,400 548,159 Vanguard Wellington Fund 15,818,508 16,088,469 121,485 Vanguard LifeStrategy Growth Fund 2,079,762 2,282,700 112,766 Vanguard LifeStrategy Moderate Growth Fund 1,763,158 1,901,235 52,040 Vanguard LifeStrategy Conservative Growth Fund 720,101 765,504 45,138 Vanguard LifeStrategy Income Fund 571,866 596,726 150,757 Vanguard Total Bond Market Index Fund 1,536,187 1,548,271 ______________________________________________________________________________________________ 56,085,663 65,905,532 ______________________________________________________________________________________________ Guaranteed Investment Contracts: American International Life Assurance Co. Guaranteed Investment Contract, 5.06%, due 1/99 3,018,818 3,018,818 John Hancock Guaranteed Investment Contract, 7.02%, due 5/99 2,187,126 2,187,126 Retirement Savings Trust, 5.89% 16,514,363 16,514,363 ______________________________________________________________________________________________ 21,720,307 21,720,307 ______________________________________________________________________________________________ $107,443,699 108,559,058 ______________________________________________________________________________________________
23
December 31, 1997 ______________________________________________________________________________________________ Fair/Contract Number of Shares Investments Cost Value ______________________________________________________________________________________________ Common Stock: 2,221,025 Airgas Common Stock Fund $28,117,347 31,094,350 ______________________________________________________________________________________________ Mutual Funds: 12,886 Vanguard Explorer Fund 782,408 712,579 50,880 Vanguard International Growth Fund 924,657 833,923 681,701 Vanguard U.S. Growth Fund 17,726,029 19,564,818 38,078 Vanguard 500 Index Fund 3,278,787 3,429,706 417,173 Vanguard Wellington Fund 11,666,266 12,285,732 39,964 Vanguard LifeStrategy Growth Fund 634,829 641,028 41,712 Vanguard LifeStrategy Moderate Growth Fund 614,460 617,754 38,022 Vanguard LifeStrategy Conservative Growth Fund 510,404 509,496 16,541 Vanguard LifeStrategy Income Fund 203,787 205,599 34,323 Vanguard Total Bond Market Index Fund 342,119 346,319 ______________________________________________________________________________________________ 36,683,746 39,146,954 ______________________________________________________________________________________________ Guaranteed Investment Contracts: American International Life Assurance Co. Guaranteed Investment Contract, 5.06%, due 1/99 3,039,105 3,039,105 John Hancock Guaranteed Investment Contracts, 5.31% to 7.02%, due 5/98 to 5/99 3,046,510 3,046,510 Continental Assurance Co. Guaranteed Investment Contract, 6.64%, due 5/98 2,956,124 2,956,124 Retirement Savings Trust, 6.17%, due 8/00 10,548,758 10,548,758 ______________________________________________________________________________________________ 19,590,497 19,590,497 ______________________________________________________________________________________________ $84,391,590 89,831,801 ______________________________________________________________________________________________ The average cost method is followed in determining the cost of investments sold. Purchases and sales of securities are recorded on a trade date basis.
24 (4) Continued The average yield earned on the Investment Contract Funds was approximately 5.78% and 8.9% for the years ended December 31, 1998 and 1997, respectively. As of December 31, 1998 and December 31, 1997, interest rates ranged from 5.06% to 7.02%. The average yield earned on the Investment Contract Funds for the year ended December 31, 1997 includes the impact of the receipt of $364,000 for settlement of the Confederation Life Fund. Exclusive of this item, the average yield earned on the Investment Contract Fund for the Plan year ended December 31, 1997 was approximately 6.9%. In August 1994 the assets of Confederation Life Insurance Company were placed under the regulatory supervision of the Michigan Commissioner of Insurance. The Confederation Life Guaranteed Investment Contract (GIC) was subject to certain regulatory restrictions, and thus the plan management ceased accruing interest on the funds. In March 1997 the rehabilitation plan of the assets was finalized. The rehabilitation plan provided for receipt of 100% of the August 1994 value into the Plan plus interest earned between the liquidation plan's asset valuation date and the actual distribution date. The rehabilitation plan also provides for the distribution of certain contingent assets, such as litigation proceeds, to GIC investors in the future as they may become available. The following investments represent 5% or more of the net assets available for benefits at December 31, 1998 and 1997: 1998 1997 ____ ____ Airgas Common Stock Fund $ 20,933,129 31,094,350 Vanguard U.S. Growth Fund 31,307,598 19,564,818 Vanguard 500 Index Fund 8,693,400 -- Vanguard Wellington Fund 16,088,469 12,285,732 Retirement Savings Trust 16,514,363 10,548,758 (5)Tax Status The Internal Revenue Service has determined and informed the Company by a letter dated January 23, 1996, that the Plan is designed in accordance with applicable sections of the Internal Revenue Code (IRC) and is therefore exempt from federal income taxes. The Plan has been amended since receiving the determination letter. However, the plan administrator believes that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC and continues to be exempt from federal income taxes. 25 (6)Related Party Transactions The Plan invests in shares of mutual funds managed by an affiliate of Vanguard Fiduciary Trust Company (VFTC). VFTC acts as trustee for only those investments as defined by the Plan. Transactions in such investments qualify as party-in-interest transactions which are exempt from the prohibited transaction rules. (7)Plan Termination Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. Upon termination of the Plan, participants would remain fully vested in all amounts credited to their accounts under the Plan. (8)Defaulted Loans During the year ended December 31, 1998, there were 121 participants who were in default of their loans. Those participants were terminated employees who were deemed to receive a distribution of $397,017 in 1998. As of December 31, 1998, there are 47 participants who are active employees that are in default of their loans. Loans in the amount of $172,103 are in default and included in participant loans as of December 31, 1998. 26 Schedule 1 AIRGAS, INC. 401(k) PLAN Item 27 (a) - Schedule of Assets Held for Investment Purposes December 31, 1998 Number of Shares Investments Cost Value ____________________________________________________________________________________________ Common Stock: 2,342,178 Airgas Common Stock Fund $ 29,637,729 20,933,219 ____________________________________________________________________________________________ Mutual Funds: 22,010 Vanguard Explorer Fund 1,248,829 1,248,175 78,500 Vanguard International Growth Fund 1,415,149 1,473,454 835,092 Vanguard U.S. Growth Fund 23,658,731 31,307,598 76,291 Vanguard 500 Index Fund 7,273,372 8,693,400 548,159 Vanguard Wellington Fund 15,818,508 16,088,469 121,485 Vanguard LifeStrategy Growth Fund 2,079,762 2,282,700 112,766 Vanguard LifeStrategy Moderate Growth Fund 1,763,158 1,901,235 52,040 Vanguard LifeStrategy Conservative Growth Fund 720,101 765,504 45,138 Vanguard LifeStrategy Income Fund 571,866 596,726 150,757 Vanguard Total Bond Market Index Fund 1,536,187 1,548,271 ____________________________________________________________________________________________ 56,085,663 65,905,532 ____________________________________________________________________________________________ Guaranteed Investment Contracts: American International Life Assurance Co. Guaranteed Investment Contract, 5.06%, due 1/99 3,018,818 3,018,818 John Hancock Guaranteed Investment Contracts, 7.02%, due 5/99 2,187,126 2,187,126 Retirement Savings Trust, 5.89% 16,514,363 16,514,363 ____________________________________________________________________________________________ 21,720,307 21,720,307 ____________________________________________________________________________________________ Employee loans 5,052,738 5,052,738 ____________________________________________________________________________________________ $ 112,496,437 113,611,796 ____________________________________________________________________________________________
27 Schedule 2 AIRGAS, INC. 401(k) PLAN Item 27(d) - Schedule of Reportable Transactions Year ended December 31, 1998
: During the year ended December 31, 1998, the Plan had the following reportable transactions by issue: __________________________________________________________________________________________________________________ Identity of Transaction Purchase Selling Cost of Net party involved Description of asset type price price asset gain (loss) __________________________________________________________________________________________________________________ The Vanguard Group Vanguard 500 Index Fund Purchase $ 5,459,234 -- -- -- Sale -- 1,618,089 1,464,828 153,261 The Vanguard Group Vanguard U.S. Growth Fund Purchase 9,305,836 -- -- -- Sale -- 3,997,242 3,376,247 620,995 The Vanguard Group Vanguard Wellington Fund Purchase 6,612,300 -- -- -- Sale -- 2,624,753 2,461,362 163,391 The Vanguard Group Retirement Savings Trust Purchase 10,241,771 -- -- -- Sale -- 4,328,042 4,328,042 -- N/A Airgas Common Stock Fund Purchase 7,949,378 -- -- -- Sale -- 6,541,389 6,430,206 111,183 ___________________________________________________________________________________________________________________
EX-23 2 EX 23.1 - CONSENT OF INDEPENDENT AUDITORS EXHIBIT 23.1 Consent of Independent Auditors The Board of Directors Airgas, Inc. We consent to incorporation by reference in the Registration Statements (Nos. 33-25419 and 33-64058) on Form S-8 of Airgas, Inc. of our report dated May 7, 1999 relating to the statements of net assets available for benefits of Airgas, Inc. 401(k) Plan as of December 31, 1998 and 1997, the related statements of changes in net assets available for benefits for the years ended December 31, 1998 and 1997, and the related supplemental schedule of assets held for investment purposes and schedule of reportable transactions as of December 31, 1998, which report is included in the December 31, 1998, annual report on Form 11-K of Airgas, Inc. 401(k) Plan. KPMG LLP Philadelphia, Pennsylvania June 15, 1999 -----END PRIVACY-ENHANCED MESSAGE-----