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, 2000
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
REQUIRED INFORMATION
(1) Financial Statements:
The following financial statements, including Independent
Auditors' Report thereon of Airgas, Inc. 401(k) Plan, are submitted
herewith:
o Statements of Net Assets Available for Benefits as of
December 31, 2000 and 1999
o Statements of Changes in Net Assets Available for Benefits for
the years ended December 31, 2000 and 1999
o Notes to Financial Statements
o Schedule 1 - Schedule of Assets Held for Investment Purposes
The schedule for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission is
included in the aforementioned financial statements of the Airgas,
Inc. 401(k) Plan.
(2) Exhibits:
23.1 Consent of KPMG LLP
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/ Roger F. Millay
Roger F. Millay
Senior Vice President - Finance and
Chief Financial Officer
BY:/s/ Todd R. Craun
Todd R. Craun
General Counsel and Secretary
DATED: June 27, 2001
AIRGAS, INC. 401(k) PLAN
Financial Statements and
Supplementary Schedule
December 31, 2000 and 1999
(With Independent Auditors' Report Thereon)
AIRGAS, INC. 401(k) PLAN
Table of Contents
Page
Independent Auditors' Report 1
Statements of Net Assets Available for Benefits,
December 31, 2000 and 1999 2
Statements of Changes in Net Assets Available for Benefits,
Years ended December 31, 2000 and 1999 3
Notes to Financial Statements 4
Schedule:
1 - Schedule of Assets Held for Investment Purposes,
December 31, 2000 11
1
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,
2000 and 1999, 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 auditing standards
generally accepted in the United States of America. 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, 2000 and
1999, and the changes in net assets available for benefits for the
years then ended, in conformity with accounting principles
generally accepted in the United States of America.
Our audits were performed for the purpose of forming an opinion on
the basic financial statements taken as a whole. The supplemental
schedule of assets held for investment purposes as of December 31,
2000, is presented for the purpose of additional analysis and is
not a required part of the basic financial statements but is
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. This supplemental
schedule is the responsibility of the Plan's management. The
supplemental schedule has been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to
the basic financial statements taken as a whole.
/S/KPMG LLP
May 25, 2001
2
AIRGAS, INC. 401(k) PLAN
Statements of Net Assets Available for Benefits
December 31, 2000 and 1999
2000 1999
---- ----
Investments $ 127,753,554 $ 126,022,429
----------- -----------
Receivables:
Employee contributions 1,031,817 911,630
Employer contributions 293,373 265,241
----------- -----------
Total receivables 1,325,190 1,176,871
----------- -----------
Participant loans receivable 5,961,386 5,350,628
----------- -----------
Net assets available for benefits $ 135,040,130 $ 132,549,928
=========== ===========
See accompanying notes to financial statements.
3
AIRGAS, INC. 401(k) PLAN
Statements of Changes in Net Assets Available for Benefits
Years ended December 31, 2000 and 1999
2000 1999
---- ----
Additions:
Additions to net assets attributable to:
Investment income:
Net (depreciation) appreciation in
fair value of investments $(25,211,824) $ 9,060,042
Interest and dividends 12,494,171 5,907,679
----------- -----------
Total investment (loss) income, net (12,717,653) 14,967,721
Contributions:
Employee 21,541,344 12,827,724
Employer 5,965,433 4,879,037
----------- -----------
Total contributions 27,506,777 17,706,761
----------- -----------
Deductions:
Benefits paid to participants (13,777,439) (13,348,327)
Transfers to other benefit plans -- (4,696,079)
Administrative fees (155,820) (104,644)
----------- -----------
Total deductions (13,933,259) (18,149,050)
----------- -----------
Transfers from other benefit plans 1,634,337 3,249,450
----------- -----------
Net additions 2,490,202 17,774,882
----------- -----------
Net assets available for benefits:
Beginning of year 132,549,928 114,775,046
----------- -----------
End of year $135,040,130 $132,549,928
=========== ===========
See accompanying notes to financial statements.
4
AIRGAS, INC. 401(k) PLAN
Notes to Financial Statements
December 31, 2000 and 1999
(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). The Vanguard Fiduciary Trust Company (the
Trustee) serves as the trustee for the Plan.
(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 as of the first day of each calendar month
after the date the employee is first credited with one hour
of service. If employees become eligible to participate in
the Plan through a business acquisition, participation may
be delayed up to seven months from the date of acquisition.
5
AIRGAS, INC. 401(k) PLAN
Notes to Financial Statements
December 31, 2000 and 1999
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 $2,718,558 and $1,904,532 for
the years ended December 31, 2000 and 1999, 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 compensation.
(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 Retirement Savings Trust. In addition to the above
initial election, participants may elect, by calling the
Trustee, 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 a
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. The prime
rate at December 31, 2000, was 9.5%.
(e) Vesting
Participants are immediately vested in all contributions.
In addition, all earnings on such investments are fully
vested.
6
AIRGAS, INC. 401(k) PLAN
Notes to Financial Statements
December 31, 2000 and 1999
(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) Transfer to Other Benefit Plans
The transfer to other benefit plans during 1999 primarily
resulted from Plan disbursements in connection with the
fiscal 1999 divestiture of the Company's Calcium Carbide and
Carbon products operations.
(h) Administrative Expenses
All administrative expenses have been paid by the Plan.
(2) Merger of 401(k) Plans
During 2000 and 1999, in connection with acquisitions completed
by the Company, there were transfers in from certain 401(k)
plans of acquired companies.
(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
Investments in the Airgas Common Stock Fund are valued at
market value based upon closing prices at the Plan year-end.
The fair values of the Vanguard funds are based on the net
asset values per share at year-end.
7
AIRGAS, INC. 401(k) PLAN
Notes to Financial Statements
December 31, 2000 and 1999
Purchases and sales of investments are recorded on a trade-
date basis. The average cost method is followed in
determining the cost of investments sold. Interest income
is accrued when earned. Dividend income is recorded on the
ex-dividend date. Capital gain distributions are included
in dividend income.
Investment options as of December 31, 2000, were as follows:
The Airgas Common Stock Fund invests in Airgas, Inc. common
stock to provide the possibility of long-term growth through
increases in the value of the stock. The stock value per
share was $6.81 at December 31, 2000.
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. The
value per share was $60.09 at December 31, 2000.
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. The value
per share was $18.87 at December 31, 2000.
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. The value per share
was $27.65 at December 31, 2000.
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. The value per share
was $121.86 at December 31, 2000.
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. The value per share was $28.21
at December 31, 2000.
8
AIRGAS, INC. 401(k) PLAN
Notes to Financial Statements
December 31, 2000 and 1999
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. The
Portfolio's asset allocation ranges are expected to be 65%
to 90% stocks, 10% to 35% bonds and 0% to 25% cash
investments. The value per share was $19.59 at December 31,
2000.
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% to 70% stocks, 30% to 55% bonds and
0% to 25% cash investments. The value per share was $17.24
at December 31, 2000.
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% to 50% stocks, 50% to 75%
bonds and 0% to 25% cash investments. The value per share
was $14.70 at December 31, 2000.
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% to 30% stocks, 70% to 95% bonds and 0% to 25% cash
investments. The value per share was $13.00 at December
31, 2000.
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. The value per share was $9.96 at
December 31, 2000.
9
AIRGAS, INC. 401(k) PLAN
Notes to Financial Statements
December 31, 2000 and 1999
The Vanguard Retirement Savings Trust seeks stability of
principal and a high level of current income consistent with
a two- to three-year average maturity. The trust is a tax-
exempt collective trust invested primarily in investment
contracts issued by insurance companies and commercial
banks, and similar types of fixed-principal investments.
The trust intends to maintain a constant net asset value of
$1 per share.
(c) Use of Estimates
The preparation of the financial statements in accordance
with accounting principles generally accepted in the United
States of America 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.
(4) Investments
The following investments represent 5% or more of the net
assets available for benefits at December 31, 2000 and 1999:
2000 1999
---- ----
Airgas Common Stock Fund $ 17,922,364 $ 21,752,826
Vanguard U.S. Growth Fund 33,502,706 39,044,068
Vanguard 500 Index Fund 14,402,139 13,529,546
Vanguard Wellington Fund 17,376,741 15,676,581
Vanguard Retirement Savings Trust 21,667,221 22,313,888
During the years ended December 31, 2000 and 1999, the net
(depreciation) appreciation in the fair value of investments
(including realized gains and losses) was as follows:
2000 1999
---- ----
Airgas Common Stock Fund $ (19,383,952) $ 1,509,563
Mutual Funds (5,827,872) 7,550,479
----------- -----------
Net (depreciation) appreciation
in fair value of investments $ (25,211,824) $ 9,060,042
=========== ===========
10
AIRGAS, INC. 401(k) PLAN
Notes to Financial Statements
December 31, 2000 and 1999
(5) Tax Status
The Internal Revenue Service (IRS) has determined and informed
the Company by a letter dated January 31, 2000, that the Plan
is designed in accordance with applicable sections of the
Internal Revenue Code 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 Internal
Revenue Code and continues to be exempt from federal income
taxes.
(6) Related-Party Transactions
The Plan invests in shares of mutual funds (Vanguard funds)
managed by an affiliate of Vanguard Fiduciary Trust Company,
who acts as trustee for the Plan. Investment transactions of
the Plan qualify as party-in-interest transactions, but are not
prohibited transactions.
(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, 2000, there were 49
participants who were in default of their loans, including 47
participants who were active employees. Loans in the amount of
$125,897 were in default and included in participant loans as
of December 31, 2000.
During the year ended December 31, 1999, there were 88
participants who were in default of their loans, including 87
participants who were active employees. Loans in the amount of
$402,079 were in default and included in the participant loans
as of December 31, 1999.
11
Schedule 1
----------
AIRGAS, INC. 401(k) PLAN
Schedule of Assets Held for Investment Purposes
December 31, 2000
Number
of
Shares Investments * Cost Fair Value
------ ----------- ---- ----------
Common stock:
2,630,806 Airgas Common Stock Fund $ 28,427,525 $ 17,922,364
Mutual funds:
98,675 Vanguard Explorer Fund 6,580,263 5,929,376
178,482 Vanguard International Growth Fund 3,600,088 3,367,953
1,211,671 Vanguard U.S. Growth Fund 39,176,756 33,502,706
118,186 Vanguard 500 Index Fund 13,694,775 14,402,139
615,978 Vanguard Wellington Fund 17,655,426 17,376,741
286,556 Vanguard LifeStrategy Growth Fund 5,625,573 5,613,625
228,118 Vanguard LifeStrategy Moderate Growth Fund 3,901,696 3,932,759
98,754 Vanguard LifeStrategy Conservative Growth Fund 1,454,958 1,451,678
75,427 Vanguard LifeStrategy Income Fund 969,391 980,551
161,289 Vanguard Total Bond Market Index Fund 1,601,780 1,606,441
Vanguard Retirement Savings Trust, 5.89% 21,667,221 21,667,221
Employee loans, 7% to 12% 5,961,386 5,961,386
----------- -----------
Total assets held for investment purposes $150,316,838 $133,714,940
=========== ===========
* - Investment transactions of the Plan qualify as party-in-interest transactions.