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Item 7. Management’s Discussion and Analysis

2024-11-21 compared with 2023-11-16 · 266 added, 292 removed, 562 unchanged (50% of the section changed)

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For information concerning activity with our related parties, refer to Note 25, Supplemental Information , to the consolidated financial statements.

Table of Conte n t s

BUSINESS OVERVIEW

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Approximately 23,000 passionate, talented, and committed employees from diverse backgrounds together are driven by Air Products’ higher purpose to create innovative solutions that benefit the environment, enhance sustainability, and reimagine what is possible to address the challenges facing customers, communities, and the world.

Our products and services enable our customers to improve their environmental performance, product quality, and productivity.

Our core business provides essential gases, related equipment, and applications expertise to customers in dozens of industries, including refining, chemicals, metals, electronics, manufacturing, medical, and food.

We also develop, engineer, build, own, and operate some of the world’s largest clean hydrogen projects that will support the transition to low- and zero-carbon energy in the heavy-duty transportation and industrial sectors.

Additionally, we are the world leader in the supply of LNG process technology and equipment and provide turbomachinery, membrane systems, and cryogenic containers globally.

Focused on serving energy, environmental, and emerging markets, we are committed to generating a cleaner future by offering products and services that enable our customers to improve their environmental performance, product quality, and productivity.

Our core industrial gases business provides essential gases, related equipment, and applications expertise to customers in dozens of industries, including refining, chemicals, metals, electronics, manufacturing, medical, and food.

We also develop, engineer, build, own, and operate some of the world's largest clean hydrogen projects that will support the transition to low- and zero-carbon energy in the industrial and heavy-duty transportation sectors.

Through our sale of equipment businesses, we also provide turbomachinery, membrane systems, and cryogenic containers globally.

For additional information on our product and service offerings, including production, distribution, and end use, refer to Item 1, Business , of this Annual Report on Form 10-K.

Air Products conducts business in approximately 50 countries and regions throughout the world.

We conduct business in approximately 50 countries and regions throughout the world.

Our industrial gases business is organized and operated regionally in the Americas, Asia, Europe, and Middle East and India segments and generates the majority of our sales via our on-site and merchant supply modes.

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For additional information regarding our supply modes and business segments, refer to Note 7, Revenue Recognition , and Note 26, Business Segment and Geographic Information , to the consolidated financial statements.

Our results of operations for the periods presented in this Annual Report on Form 10-K include the results of our former liquefied natural gas ("LNG") process technology and equipment business, which we sold to Honeywell International Inc.

on 30 September 2024.

This divestiture, which does not qualify for presentation as a discontinued operation, reflects our commitment to our industrial gases and clean hydrogen growth strategy.

Refer to Note 4, Gain on Sale of Business , to the consolidated financial statements for additional information.

2024 IN SUMMARY

In fiscal year 2023, we achieved earnings growth through pricing discipline in our merchant business as well as improved on-site volumes, including higher demand for hydrogen, despite inflation, higher maintenance activities, and higher costs to support our long-term strategy.

Due to the structure of our contracts, which generally contain fixed monthly charges and/or minimum purchase requirements, our on-site business generates stable cash flow and consistently contributes about half our total sales, regardless of the economic environment.

We also recognized higher income from our equity affiliates due to the contribution of the second phase of the Jazan gasification and power project and positive results from other unconsolidated joint ventures across the regions.

Additionally, we successfully secured capital to fund low- and zero-carbon hydrogen growth projects.

In March, we issued our inaugural green bonds in concurrent $600 and €700 million debt offerings, making Air Products the first U.S.

chemical company to qualify green and blue hydrogen projects as an eligible expenditure category.

Additionally, in May, our NEOM Green Hydrogen Company joint venture completed financial close on the world’s largest green hydrogen-based ammonia production facility, securing $6.1 billion of non-recourse financing from local, regional, and international banks and financial institutions.

This funding is an important strategic milestone that will allow us to continue executing projects that will accelerate the energy transition while creating long-term value for our shareholders.

In addition to investing in high return projects, we believe creating shareholder value includes paying quarterly cash dividends on our common stock, which we have increased for 41 consecutive years.

In fiscal year 2023, we increased our dividend to $1.75 per share, representing an 8% increase, or $0.13 per share, from the previous dividend of $1.62 per share.

Table of Conte n t s

Underlying results in our core industrial gases business were positive across our three largest regional segments, reflecting both merchant pricing gains and lower power costs in the Americas and Europe segments as well as favorable on-site volumes globally as we brought new plants onstream.

The favorable volumes in our on-site business, which contributed approximately half our annual consolidated sales, were partially offset by lower global demand for merchant products as well as lower equipment sales in our Corporate and other segment.

Additionally, the strategic productivity actions that we initiated in 2023 drove cost improvement across our organization, which partially offset higher costs resulting from inflation and increased planned maintenance activities.

We also recognized higher equity affiliates' income from our unconsolidated joint ventures, particularly in the Americas segment.

Strategic capital allocation is one of our top priorities at Air Products.

In addition to investing in our low- and zero-carbon hydrogen projects currently under construction, we continued to deploy capital in our core industrial gases business by investing in new industrial gas plants as well as maintaining and replacing existing facilities.

Additionally, at the end of September, we recognized a gain of approximately $1.6 billion in operating income ($1.2 billion after tax, or $5.38 per share) upon completion of the sale of the LNG business.

Divesting this non-core business reflects our continued focus on executing our growth strategy.

We also issued $2.5 billion of green senior notes to fund projects that are expected to have environmental benefits as defined under our Green Finance Framework.

These cash-generating actions will enable us to continue investing in projects that will provide clean hydrogen at scale to accelerate the energy transition while creating long-term value for our shareholders.

We believe providing a consistent dividend plays a critical part in the creation of shareholder value.

During fiscal year 2024, we returned approximately $1.6 billion to our shareholders through dividend payments.

Fiscal Year 2024 Highlights

• Sales of $12.6 billion decreased 1%, or $98.6, as lower energy cost pass-through to customers of 6% and unfavorable currency of 3% were mostly offset by higher pricing of 5% and higher volumes of 3%.

• Operating income of $2.5 billion increased 7%, or $155.8, as our pricing actions and higher volumes were partially offset by higher costs and unfavorable currency.

Additionally, we recorded higher charges for business and asset actions in fiscal year 2023 compared to fiscal year 2022.

Operating margin of 19.8% increased 140 basis points ("bp") from 18.4% in the prior year, which included a positive impact from lower energy cost pass-through to customers in 2023.

• Equity affiliates' income of $604.3 increased 26%, or $122.8, primarily due to a higher contribution from the Jazan Integrated Gasification and Power Company ("JIGPC") joint venture, which completed the second phase of the asset purchase associated with the Jazan gasification and power project in January 2023, as well as higher income from our affiliates in Italy and Mexico.

The prior year included recognition of the remaining deferred profit associated with air separation units previously sold to Jazan Gas Project Company, which was partially offset by an impairment charge related to two small affiliates in our Asia segment.

• Net income of $2.3 billion increased 3%, or $72.1, primarily due to favorable pricing, net of power and fuel costs, partially offset by a charge for business and asset actions, higher non-service pension costs, and higher other costs.

Net income margin of 18.6% increased 80 bp from 17.8% in the prior year, which included a positive impact from lower energy cost pass-through.

Comparisons presented in the highlights below are for fiscal year 2024 vs.

fiscal year 2023.

• Sales of $12.1 billion decreased 4%, or $499.4, primarily due to 5% lower energy cost pass-through, which was partially offset by 1% higher pricing.

Volume and currency were both flat versus the prior year.

• Operating income of $4.5 billion increased 79%, or $2.0 billion, primarily due to the $1.6 billion gain recognized on the sale of the LNG business during the fourth quarter of fiscal year 2024 as well as positive pricing, lower charges for business and asset actions, and favorable business mix, partially offset by an unfavorable impact from currency and higher costs.

Operating margin of 36.9% increased 1,710 basis points ("bp") from 19.8% in the prior year.

• Equity affiliates' income of $647.7 increased 7%, or $43.4, as higher income from affiliates in the Americas segment was partially offset by a lower contribution from an affiliate in Europe.

• Net income of $3.9 billion increased 65%, or $1.5 billion, and net income margin of 31.9% increased 1,330 bp from 18.6% in the prior year, in each case primarily due to the $1.2 billion after-tax gain recognized upon the sale of the LNG business at the end of the fourth quarter.

• Adjusted EBITDA of $5.0 billion increased 7%, or $344.5, and adjusted EBITDA margin of 41.7% increased 440 bp from 37.3% in the prior year.

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A summary table of changes in diluted EPS is presented below.

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Changes in Diluted EPS Attributable to Air Products

The per share impacts presented in the table below were calculated independently and may not sum to the total change in diluted EPS due to rounding.

The per share impacts for the items presented in the table below were calculated independently and may not sum to the total change in diluted EPS due to rounding.

Fiscal Year Ended 30 September 2024 2023 Increase (Decrease)

Total Diluted EPS $17.18 $10.33 $6.85

Diluted EPS from income from discontinued operations 0.03 0.06 (0.03)

Diluted EPS from (loss) income from discontinued operations (0.06) 0.03 (0.09)

Diluted EPS From Continuing Operations $17.24 $10.30 $6.94

% Change from prior year 67 %

Operating Impacts

Operating Items

Underlying business

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Currency (0.09)

Gain on sale of business 5.38

Business and asset actions 0.72

Total Operating Impacts $0.56

Other Impacts

Total Operating Items

Equity affiliates' income $0.16

Equity method investment impairment charge 0.05

Interest expense (0.15)

Other non-operating income/expense, net, excluding discrete item below 0.11

Non-service pension cost/benefit, net (0.44)

Other non-operating income/expense, net:

Loss on de-designation of cash flow hedges

Non-service pension cost, net

Change in effective tax rate 0.17

Noncontrolling interests (0.01)

Weighted average diluted shares (0.01)

Total Other Impacts ($0.34)

Total Other Items

Total Change in Diluted EPS From Continuing Operations $6.94

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Diluted EPS From Continuing Operations $17.24 $10.30 $6.94

Gain on sale of business (5.38) — (5.38)

Business and asset actions 0.20 0.92 (0.72)

Equity method investment impairment charge — 0.05 (0.05)

Non-service pension cost (benefit), net 0.29 (0.15) 0.44

Loss on de-designation of cash flow hedges 0.02 — 0.02

Non-service pension cost, net 0.34 0.29 0.05

Adjusted Diluted EPS From Continuing Operations $12.43 $11.51 $0.92

% Change from prior year 8 %

Table of Conte n t s

The guidance below should be read in conjunction with the Forward-Looking Statements of this Annual Report on Form 10-K.

The first pillar of our two-pillar growth strategy is our core industrial gas business, which is supported by a consistent stream of revenue due to the structure of our on-site contracts.

We expect new on-site projects, including the natural gas-to-syngas processing facility in Uzbekistan, as well as several new LNG sale of equipment projects to contribute to our results in 2024.

To mitigate the impact of ongoing inflationary pressures, we are focused on actions we can control, such as maintaining pricing discipline in our merchant business.

Additionally, we expect to see cost improvement in certain areas of our organization as a result of strategic business actions taken earlier in 2023.

The second pillar of our strategy is our blue and green hydrogen projects, many of which are already under execution.

We anticipate benefits from tax incentives created by the U.S.

Inflation Reduction Act of 2022 for carbon sequestration and clean hydrogen production in future years once our projects in these areas come on-stream, such as our blue hydrogen and blue ammonia clean energy complex in Louisiana.

We are also gaining support from foreign regulators for our projects outside the U.S., including the recently announced blue hydrogen project in the Netherlands.

We believe the infrastructure readiness we are preparing now will continue to be a competitive advantage for Air Products, allowing us to create sustainable growth opportunities that deliver value to our shareholders, customers, employees, and communities around the world.

Statements regarding business outlook should be read in conjunction with the Forward-Looking Statements of this Annual Report on Form 10-K.

We have focused teams within Air Products executing the two pillars of our growth strategy, which are underpinned by our core competencies, technology, and more than 80 years of industrial gas experience, including over 65 years of hydrogen expertise.

Our employees are dedicated to the ongoing success of our core industrial gases business while we pursue strategic high growth opportunities in clean hydrogen.

In fiscal year 2025, we expect merchant pricing improvement as well as positive volume contributions from several smaller industrial gas on-site plants that are scheduled to come onstream.

Cost discipline remains a top priority as we seek to mitigate the impact of ongoing inflationary pressures through productivity actions.

Economic activity in China remains uncertain.

Additionally, we estimate an earnings per share headwind of approximately 4%, or $0.49, as a result of the LNG business divestiture.

We expect sustained performance and our ability to raise capital to meet the cash needs of our growth strategy while rewarding shareholders through increased dividends, as we have done for the past 42 consecutive years.

Beyond fiscal year 2025, we see significant opportunity in clean hydrogen driven by demand for decarbonization solutions such as the application of green hydrogen to meet Europe's emission reduction mandates across the heavy industrial and transport sectors, blue hydrogen in the form of blue ammonia to minimize the use of coal in Asia's power plants, as well as blue and green ammonia to directly power ships.

We have made significant progress in the construction of some of our energy transition projects, such as the NEOM Green Hydrogen Project that is on schedule to come onstream at the end of 2026 with first product delivery in early 2027.

RESULTS OF OPERATIONS

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Energy cost pass-through to customers (5 %)

Currency (3 %)

Total Consolidated Sales Change (4 %)

Sales of $12.6 billion decreased 1%, or $98.6, as lower energy cost pass-through to customers of 6% and unfavorable currency of 3% were mostly offset by higher pricing of 5% and higher volumes of 3%.

Lower natural gas prices in the Americas and Europe segments drove the lower energy cost pass-through to our on-site customers.

Unfavorable currency was primarily attributable to strengthening of the U.S.

Dollar against the Chinese Renminbi.

Pricing actions in our merchant business improved sales across each of our regional segments, while the volume improvement was primarily attributable to our on-site business in the Americas and Asia segments.

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Sales of $12.1 billion decreased 4%, or $499.4, primarily due to 5% lower energy cost pass-through driven by lower natural gas prices in North America and Europe.

Sales in our on-site business, which typically represent approximately half our total company sales, fluctuate with power and fuel prices due to contract provisions that allow us to pass through changes in energy costs to our customers.

The lower sales due to energy cost pass-through were partially offset by a modest 1% total company price improvement, which equates to a 2% improvement for the merchant business.

The pricing improvement was attributable to our Americas and Europe segments.

Volumes were flat on a total company basis as weaker global merchant demand and lower sales of equipment offset improvements in our on-site business, which were driven by new assets in Europe and Asia as well as higher demand for hydrogen in the U.S.

Additionally, favorable on-site volumes in our Americas segment included a one-time asset sale associated with an early contract termination at the request of a customer.

Currency was stable versus the prior year.

Cost of Sales and Gross Margin

Cost of sales of $8.8 billion decreased 5%, or $505.5, due to lower energy cost pass-through to customers of $791 and a favorable impact from currency of $213, partially offset by higher costs associated with sales volumes of $311 and unfavorable other costs of $188.

The unfavorable costs were driven by inflation, project development activities, and planned maintenance.

Gross margin of 29.9% increased 340 bp from 26.5% in the prior year primarily due to favorable pricing and lower energy cost pass-through to customers, partially offset by the impact of higher costs.

The favorable impact from lower energy cost pass-through to customers was about 200 bp.

Cost of sales of $8.2 billion decreased 8%, or $664.3, due to lower energy cost pass-through to customers of $646, a favorable impact from currency of $20, and lower other costs of $10, partially offset by higher costs associated with sales volumes of $12.

Higher costs due to labor inflation and planned maintenance activities were partially offset by lower power costs in our merchant business in Europe and the Americas as well as improvements from strategic productivity actions.

Gross margin of 32.5% increased 260 bp from 29.9% in the prior year.

Approximately half of the margin improvement was attributable to lower energy cost pass-through to customers.

Selling and Administrative Expense

Selling and administrative expense of $957.0 increased 6%, or $56.4, primarily due to higher employee compensation, inflation, and additional costs to support growth, partially offset by a favorable impact from currency.

Selling and administrative expense of $942.4 decreased 2%, or $14.6, primarily due to lower incentive compensation and strategic productivity actions, partially offset by labor inflation.

Selling and administrative expense as a percentage of sales increased to 7.8% from 7.6% in the prior year.

Research and Development Expense

Research and development expense of $105.6 increased 3%, or $2.7.

Research and development expense of $100.2 decreased 5%, or $5.4.

Research and development expense as a percentage of sales of 0.8% was flat versus the prior year.

Gain on Sale of Business

On 30 September 2024, we completed the sale of our LNG business to Honeywell International Inc.

As a result of the transaction, we recorded a gain of $1,575.6 during the fourth quarter of fiscal year 2024 that is reflected within "Gain on sale of business" on our consolidated income statements ($1,198.4 after tax, or $5.38 per share).

This gain was not recorded in segment results.

Prior to the divestiture, the results of the LNG business were reflected within the Corporate and other segment.

Refer to Note 4, Gain on Sale of Business , to the consolidated financial statements for additional information.

Business and Asset Actions

In fiscal year 2023, we recorded a charge of $244.6 ($204.9 attributable to Air Products after tax, or $0.92 per share) for strategic actions intended to optimize costs and focus resources on our growth projects.

Of the expense, $217.6 resulted from noncash charges to write off assets associated with exited projects that were previously under construction.

The remaining expense included $27.0 for severance and other benefits associated with position eliminations and restructuring of certain organizations globally.

Refer to Note 4, Business and Asset Actions , for additional information.

In fiscal year 2022, we divested our small industrial gas business in Russia due to Russia's invasion of Ukraine.

As a result, we recorded a noncash charge of $73.7 ($61.0 after tax, or $0.27 per share), which included transaction costs and cumulative currency translation losses.

Our consolidated income statements for the fiscal years ended 30 September 2024 and 2023 reflect charges of $57.0 ($43.8 after tax, or $0.20 per share) and $244.6 ($204.9 attributable to Air Products after tax, or $0.92 per share), respectively, for strategic business and asset actions intended to optimize costs and focus resources on our growth projects.

Charges for business and asset actions are not recorded in segment results.

The fiscal year 2024 charge of $57.0 was for severance and other postemployment benefits payable to employees identified under a global cost reduction plan.

We originated this plan during the third quarter of fiscal year 2023, which resulted in an initial charge of $27.0.

Fiscal year 2023 also included a noncash charge of $217.6 to write off assets associated with exited projects that were previously under construction in our Asia and Europe segments.

For additional information, refer to Note 5, Business and Asset Actions , to the consolidated financial statements for additional information.

Other Income (Expense), Net

Other income of $34.8 decreased 38%, or $21.1, primarily due to lower income from the sale of assets and fees charged to our equity affiliates for use of patents and technology as well as an unfavorable foreign exchange impact.

Other income of $58.2 increased 67%, or $23.4, primarily due to higher income from the sale of assets as well as the favorable settlement of a legal dispute.

Refer to Note 19, Commitments and Contingencies , to the consolidated financial statements for additional information.

These items were partially offset by an unfavorable foreign exchange impact from the devaluation of the Argentine peso during the first quarter of fiscal year 2024.

Operating Income and Margin

Operating income of $2.5 billion increased 7%, or $155.8.

Positive pricing, net of power and fuel costs, of $649 and higher volumes of $58 were partially offset by higher costs of $302 and an unfavorable currency impact of $78.

The higher costs were driven by inflation, planned maintenance, and incentive compensation, as well as project development and other costs related to the execution of our growth strategy.

Additionally, as discussed above, we recorded higher charges for business and asset actions in fiscal year 2023 compared to fiscal year 2022.

Operating margin of 19.8% increased 140 bp from 18.4% in the prior year, primarily due to the impact of pricing as well as lower energy cost pass-through to customers, which positively impacted margin by about 100 basis points, partially offset by higher charges for business and asset actions and higher other costs.

Operating income of $4.5 billion increased 79%, or $2.0 billion, primarily due to the $1.6 billion gain recognized on the sale of the LNG business during the fourth quarter of fiscal year 2024.

The improvement from the prior year also reflects positive pricing, net of power and fuel costs, of $192, lower charges for business and asset actions of $188, and favorable business mix of $63.

The on-site improvements reflected within favorable business mix were partially offset by lower merchant demand and recognition of higher project cost estimates related to our sale of equipment activities in fiscal year 2024.

Unfavorable items versus the prior year included an unfavorable impact from currency of $25 and higher costs of $22.

The higher costs were driven by labor inflation and higher planned maintenance, partially offset by improved productivity resulting from strategic business and asset actions and lower costs for incentive compensation.

Operating margin of 36.9% increased 1,710 bp from 19.8% in the prior year primarily due to the gain recognized on the sale of the LNG business, lower charges for business and asset actions, and favorable pricing.

Additionally, while energy cost pass-through has no impact on profit, it does contribute to our margins.

Of the 1,710 bp operating margin improvement, lower energy cost pass-through to customers contributed approximately 100 bp.

Equity Affiliates’ Income

Equity affiliates' income of $604.3 increased 26%, or $122.8, primarily due to a higher contribution from the JIGPC joint venture, which completed the second phase of the asset purchase associated with the Jazan gasification and power project in January 2023, as well as higher income from our affiliates in Italy and Mexico.

Additionally, the prior year included an impairment charge of $14.8 ($11.1 after tax, or $0.05 per share) related to two small affiliates in the Asia segment.

These impacts were partially offset by the prior year recognition of the remaining deferred profit associated with air separation units previously sold to Jazan Gas Project Company, net of other project finalization costs.

For additional information on our equity affiliates, refer to Note 9, Equity Affiliates , to the consolidated financial statements.

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Equity affiliates' income of $647.7 increased 7%, or $43.4, as higher income from affiliates in the Americas segment was partially offset by a lower contribution from an affiliate in Europe.

Interest Expense

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Interest expense $218.8 $177.5

Interest incurred increased 73%, or $123.9, driven by a higher average interest rate on variable-rate instruments in our debt portfolio as well as a higher debt balance, which is largely attributable to the U.S.

Dollar- and Euro-denominated fixed-rate notes issued in March 2023 under our new Green Finance Framework as well as borrowings on our foreign credit facilities.

Capitalized interest increased $74.4 due to a higher carrying value of projects under construction.

Interest incurred increased 73%, or $215.0, primarily due to a higher debt balance from senior notes issued to fund projects under our Green Finance Framework as well as borrowings on financing available for the NEOM Green Hydrogen Project.

Capitalized interest increased $173.7 due to a higher carrying value of projects under construction, which is largely attributable to the NEOM Green Hydrogen Project.

Other Non-Operating Income (Expense), Net

Other non-operating expense was $39.0 versus income of $62.4 in the prior year primarily due to higher non-service pension costs in 2023, which were driven by higher interest cost and lower expected returns on plan assets for the U.S.

salaried pension plan and the U.K.

pension plan.

This impact was partially offset by higher interest income on cash and cash items due to higher interest rates.

Other non-operating expense of $73.8 increased 89%, or $34.8.

We recognized non-service pension costs of $102.0 ($76.8 after tax, or $0.34 per share) in fiscal year 2024 compared to $86.8 ($65.2 after tax, or $0.29 per share) in fiscal year 2023.

Additionally, in fiscal year 2024, we recorded unrealized losses of $16.3 ($4.3 attributable to Air Products after tax, or $0.02 per share) related to certain de-designated interest rate swaps associated with the financing for the NEOM Green Hydrogen Project.

Refer to Note 3, Variable Interest Entities , and Note 15, Financial Instruments , to the consolidated financial statements for additional information.

These unfavorable items were partially offset by higher interest income on cash and cash items and short-term investments.

Discontinued Operations

Income from discontinued operations, net of tax, was $7.4 ($0.03 per share) and $12.6 ($0.06 per share) in fiscal years 2023 and 2022, respectively.

This primarily resulted from the release of unrecognized tax benefits on uncertain tax positions taken with respect to the sale of our former Performance Materials Division for which the statute of limitations expired.

During the fourth quarter of fiscal year 2024, we recorded a pre-tax loss from discontinued operations of $19.4 ($13.9 after tax, or $0.06 per share) to increase our existing liability for retained environmental remediation obligations associated with the sale of our former Amines business in September 2006.

Refer to the Pace discussion within Note 19, Commitments and Contingencies , to the consolidated financial statements for additional information.

In fiscal year 2023, income from discontinued operations, net of tax, of $7.4 ($0.03 per share) primarily resulted from a net tax benefit recorded in the fourth quarter upon release of tax liabilities for uncertain tax positions taken with respect to the sale of our former Performance Materials Division ("PMD"), which was completed in 2017.

Net Income and Net Income Margin

Net income of $2.3 billion increased 3%, or $72.1, primarily due to favorable pricing, net of power and fuel costs, partially offset by the charge for business and asset actions, higher non-service pension costs, and higher other costs.

Net income margin of 18.6% increased 80 bp from 17.8% in the prior year due to the factors noted above as well as lower energy cost pass-through to customers, which positively impacted margin by about 100 bp.

Net income of $3.9 billion increased 65%, or $1.5 billion, and net income margin of 31.9% increased 1,330 bp from 18.6% in the prior year, in each case primarily due to the $1.2 billion after-tax gain recognized upon the sale of the LNG business at the end of the fourth quarter.

Adjusted EBITDA and Adjusted EBITDA Margin

Adjusted EBITDA of $4.7 billion increased 11%, or $454.8, primarily due to higher pricing, net of power and fuel costs, partially offset by higher costs.

Adjusted EBITDA margin of 37.3% increased 390 bp from 33.4% in the prior year due to the factors noted above as well as lower energy cost pass-through to customers, which positively impacted margin by about 200 bp.

Adjusted EBITDA of $5.0 billion increased 7%, or $344.5, and adjusted EBITDA margin of 41.7% increased 440 bp from 37.3% in the prior year, primarily due to positive pricing, net of power and fuel costs, and favorable business mix, partially offset by labor inflation and higher planned maintenance costs.

The higher costs for labor inflation and planned maintenance activities were offset by improved productivity resulting from strategic business and asset actions and lower costs for incentive compensation.

While lower energy cost pass-through does not impact profit, it improved adjusted EBITDA margin by approximately 200 basis points.

Effective Tax Rate

The effective tax rate equals the income tax provision divided by income from continuing operations before taxes.

Refer to Note 23, Income Taxes , to the consolidated financial statements for details on factors affecting the effective tax rate.

Refer to Note 24, Income Taxes , to the consolidated financial statements for details regarding factors affecting the effective tax rate.

Our effective tax rate was 19.6% and 19.1% for the fiscal years ended 30 September 2024 and 2023, respectively.

During fiscal year 2023, we recorded a charge for business and asset actions of $244.6 ($204.9 attributable to Air Products after tax).

Refer to Note 4, Business and Asset Actions , to the consolidated financial statements for additional information.

The charge included certain losses for which we could not recognize an income tax benefit and were subject to a valuation allowance of $36.0.

Partially offsetting the valuation allowance cost was a $15.9 income tax benefit from a tax election related to a non-U.S.

Our effective tax rate for the current year was higher due to lower excess tax benefits on share-based compensation and the discrete tax impact of our business and asset actions discussed above.

In addition, certain recurring income tax benefits had less of an impact on our effective tax rate in the current year as they did not increase in proportion to the increase in income.

Our current rate is also higher due to nonrecurring benefits in several foreign jurisdictions due to the impact of tax rate changes and productivity credit claims in the prior year.

Our adjusted effective tax rate, which does not include the impact of our business and asset actions discussed above, was 18.9% and 18.1% for the fiscal years ended 30 September 2023 and 2022, respectively.

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Our current year effective tax rate was higher primarily due to the recognition of the $1,575.6 gain on the sale of our LNG business during the fourth quarter of fiscal year 2024.

This gain increased our income from continuing operations before taxes, which diluted the impact of recurring effective tax rate reconciling items for fiscal year 2024.

The gain was also recognized in jurisdictions with higher tax rates.

Partially offsetting this increase were tax benefits unrelated to the sale of our LNG business, which included the release of certain unrecognized tax benefits upon expiration of the statute of limitations for uncertain tax positions taken in prior years, a tax benefit on the sale of a non-U.S.

subsidiary, and a tax election for a non-U.S.

subsidiary during fiscal year 2024.

Our adjusted effective tax rate, which excludes the impact of the gain on the sale of the LNG business as well as other adjustments described in the "Reconciliations of Non-GAAP Financial Measures" section, was 17.8% and 18.9% for the fiscal years ended 30 September 2024 and 2023, respectively.

Our current year adjusted effective tax rate is lower primarily due to earning a greater share of income in jurisdictions with lower tax rates in addition to the tax benefits discussed above.

DISCUSSION OF RESULTS BY BUSINESS SEGMENT

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Total Americas Sales Change (6 %)

Sales of $5.4 billion were flat as higher volumes of 6% and higher pricing of 6% were offset by lower energy cost pass-through to customers of 11% and an unfavorable currency impact of 1%.

The volume improvement was primarily attributable to our on-site business, including better demand for hydrogen.

Additionally, we recovered higher costs in our merchant business through continued focus on pricing actions.

Energy cost pass-through to our on-site customers was lower due to lower natural gas prices.

Operating income of $1.4 billion increased 23%, or $265.3, due to positive pricing, net of power and fuel costs, of $306 and favorable volumes of $78, partially offset by higher costs of $112 and an unfavorable currency impact of $7.

Higher costs were driven by inflation, planned maintenance, and higher incentive compensation.

Operating margin of 26.8% increased 490 bp from 21.9% in the prior year primarily due to favorable pricing and lower energy cost pass-through to customers, partially offset by higher costs.

The favorable impact from lower energy cost pass-through to customers was about 250 bp.

Equity affiliates’ income of $109.2 increased 11%, or $11.0, driven by an affiliate in Mexico.

Table of Conte n t s

Sales of $5.0 billion decreased 6%, or $329.2, due to lower energy cost pass-through to customers of 9% and an unfavorable currency impact of 1%, partially offset by higher pricing of 3% and higher volumes of 1%.

The total segment pricing increase of 3% equates to a 6% improvement in our merchant business, where pricing was favorable across most product lines.

Volumes improved modestly as higher hydrogen demand and a one-time asset sale associated with an early contract termination at the request of a customer were mostly offset by lower demand for merchant products.

Operating income of $1.6 billion increased 9%, or $125.4, due to positive pricing, net of lower power and fuel costs, of $145 and favorable business mix of $49, partially offset by higher costs of $61 and unfavorable currency of $8.

Favorable business mix was attributable to the one-time asset sale as well as higher hydrogen demand.

The higher costs were driven by higher planned maintenance and labor inflation, partially offset by lower incentive compensation as well as the favorable settlement of a legal dispute during the third quarter.

Operating margin of 31.1% increased 430 bp from 26.8% in the prior year primarily due to lower energy cost pass-through to customers and favorable pricing.

Of the 430 bp operating margin improvement, lower energy cost pass-through to customers contributed approximately 250 bp.

Equity affiliates’ income of $158.8 increased 45%, or $49.6, due to higher income from an affiliate in Mexico as well as recognition of our share of income from a one-time asset sale.

Fiscal Year Ended 30 September 2024 2023 $ %/bp

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Total Asia Sales Change — %

Sales of $3.2 billion increased 2%, or $72.8, due to higher volumes of 3%, positive pricing of 3%, and higher energy cost pass-through to customers of 2%, partially offset by unfavorable currency impacts of 6%.

Positive volume contributions from several new traditional industrial gas plants in our on-site business were partially offset by weak economic growth in China and lower activity in the electronics manufacturing industry.

Higher power costs across the region were recovered by our merchant pricing actions.

In our on-site business, the higher power costs increased energy cost pass-through to our customers.

Sales of $3.2 billion were flat as higher volumes of 1% and higher energy cost pass-through to customers of 1% were offset by unfavorable currency impacts of 2%.

Higher volumes in our on-site business, including several new assets across the region, were offset by lower demand for merchant products.

The unfavorable currency impact was primarily attributable to the strengthening of the U.S.

Dollar against the Chinese Renminbi.

Operating income of $906.5 increased 1%, or $8.2, due to positive pricing, net of power and fuel costs, of $59 and higher volumes of $31, partially offset by an unfavorable currency impact of $56 and higher costs of $26.

The higher costs were driven by project development, higher planned maintenance, and inflation.

Operating margin of 28.2% decreased 40 bp from 28.6% in the prior year as higher costs were partially offset by our pricing actions.

Equity affiliates’ income of $29.7 increased 34%, or $7.6, driven by an affiliate in Thailand.

Table of Conte n t s

Pricing was flat versus the prior year.

Operating income of $859.2 decreased 5%, or $47.3, primarily due to unfavorable mix of $22, an unfavorable currency impact of $21, and higher variable costs in our merchant business of $13, partially offset by favorable other costs of $12.

Favorable other costs reflect lower distribution costs and strategic productivity actions that more than offset the impact of inflation.

Operating margin of 26.6% decreased 160 bp from 28.2% in the prior year primarily due to unfavorable mix.

Equity affiliates’ income of $32.9 increased 11%, or $3.2, as higher income from affiliates in Thailand was partially offset by higher maintenance expense for one of our affiliates in China.

Fiscal Year Ended 30 September 2024 2023 $ %/bp

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Energy cost pass-through to customers (8 %)

Currency (2 %)

Total Europe Sales Change (5 %)

Sales of $3.0 billion decreased 4%, or $123.0, due to lower energy cost pass-through to customers of 9% and an unfavorable currency impact of 2%, partially offset by higher pricing of 7%.

Energy cost pass-through to our on-site customers was lower, reflecting lower natural gas prices across the region.

Currency negatively impacted sales due to the strengthening of the U.S.

Dollar against the Euro and the British Pound Sterling.

The pricing improvement was attributable to our merchant business.

Volumes were flat as improvement in hydrogen in our on-site business was offset by lower demand for merchant products.

Operating income of $663.4 increased 32%, or $160.0, as higher pricing, net of power and fuel costs, of $275 was partially offset by higher costs of $100 driven by inflation, higher incentive compensation, and planned maintenance, unfavorable business mix of $8, and an unfavorable currency impact of $7.

Operating margin of 22.4% increased 610 bp from 16.3% in the prior year due to the factors noted above as well as lower energy cost pass-through to customers, which positively impacted margin by about 100 bp.

Equity affiliates’ income of $102.5 increased 31%, or $24.3, driven by an affiliate in Italy.

Table of Conte n t s

Sales of $2.8 billion decreased 5%, or $139.7, due to lower energy cost pass-through to customers of 8%, partially offset by a favorable currency impact of 2% and higher volumes of 1%.

The positive currency impact was primarily attributable to the weakening of the U.S.

Dollar against the Euro.

Volumes improved modestly as contributions from a new facility in Uzbekistan were partially offset by weaker merchant demand.

Pricing was flat versus the prior year.

Operating income of $810.0 increased 22%, or $146.6, due to favorable mix of $80, pricing, net of lower power and fuel costs, of $69, and a favorable impact from currency of $14, partially offset by higher costs of $16.

Higher costs resulting from labor inflation were partially offset by strategic productivity actions.

Operating margin of 28.7% increased 630 bp from 22.4% in the prior year due to favorable volumes and pricing as well as lower energy cost pass-through to customers.

Of the 630 bp operating margin improvement, lower energy cost pass-through to customers contributed approximately 200 bp.

Equity affiliates’ income of $88.1 decreased 14%, or $14.4, driven by prior year non-recurring items for our affiliate in Italy.

Middle East and India

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Adjusted EBITDA 380.0 394.2 (14.2) (4 %)

Sales of $162.5 increased 25%, or $33.0, driven by higher merchant volumes.

Despite higher sales, operating income of $16.9 decreased 20%, or $4.2, primarily due to higher costs for business development and planned maintenance.

Equity affiliates' income of $349.8 increased 19%, or $55.9.

In January 2023, we made an additional investment in the JIGPC joint venture, which completed the second phase of the asset purchase associated with the Jazan gasification and power project.

The resulting higher contribution from JIGPC was partially offset by a prior year net benefit recognized for the remaining deferred profit associated with air separation units previously sold to Jazan Gas Project Company, net of other project finalization costs.

Sales of $134.4 decreased 17%, or $28.1, and operating income of $5.9 decreased 65%, or $11.0, in each case primarily due to lower merchant volumes and pricing.

Equity affiliates' income of $347.5 decreased 1%, or $2.3, driven by higher costs for an affiliate in Saudi Arabia.

Corporate and other

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Operating loss (292.7) (287.3) (5.4) (2 %)

Equity affiliates' income 20.4 13.1 7.3 56 %

Adjusted EBITDA (225.2) (222.4) (2.8) (1 %)

Sales of $889.0 decreased 8%, or $81.8, and operating loss of $287.3 increased $102.6, primarily due to lower contributions from our sale of equipment businesses.

Our Corporate and other segment also incurs costs to provide corporate support functions and global management activities that benefit all segments, which have increased to support our growth strategy.

Table of Conte n t s

Sales of $878.4 decreased 1%, or $10.6, and operating loss of $292.7 increased 2%, or $5.4, primarily due to lower equipment sales and higher project cost estimates.

The lower profit contribution was partially offset by lower incentive compensation and strategic productivity actions.

As discussed above, we completed the sale of the LNG business on 30 September 2024.

The LNG business generated operating income for this segment of approximately $135 and $120 in fiscal years 2024 and 2023, respectively.

Equity affiliates' income of $20.4 increased 56%, or $7.3, driven by higher contributions from an affiliate in Algeria.

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES

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In many cases, non-GAAP financial measures are determined by adjusting the most directly comparable GAAP measure to exclude non-GAAP adjustments that we believe are not representative of our underlying business performance.

For example, we exclude the impact of the non-service components of net periodic benefit/cost for our defined benefit pension plans as further discussed below.

Additionally, we may exclude certain expenses associated with cost reduction actions, impairment charges, and gains on disclosed transactions.

For example, we exclude the impact of the non-service components of net periodic benefit/cost for our defined benefit pension plans.

Non-service related components are recurring, non-operating items that include interest cost, expected returns on plan assets, prior service cost amortization, actuarial loss amortization, as well as special termination benefits, curtailments, and settlements.

The net impact of non-service related components is reflected within “Other non-operating income (expense), net” on our consolidated income statements.

Adjusting for the impact of non-service pension components provides management and users of our financial statements with a more accurate representation of our underlying business performance because these components are driven by factors that are unrelated to our operations, such as volatility in equity and debt markets.

Further, non-service related components are not indicative of our defined benefit plans’ future contribution needs due to the funded status of the plans.

We may also exclude certain expenses associated with cost reduction actions and impairment charges as well as gains on disclosed transactions, such as the sale of the LNG business.

The reader should be aware that we may recognize similar losses or gains in the future.

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Readers should also consider the limitations associated with these non-GAAP financial measures, including the potential lack of comparability of these measures from one company to another.

NON-GAAP ADJUSTMENT FOR NON-SERVICE PENSION COST (BENEFIT), NET

Our adjusted EPS and the adjusted effective tax rate exclude the impact of non-service related components of net periodic benefit/cost for our defined benefit pension plans.

The prior year non-GAAP financial measures presented above and reconciled below have been recast accordingly to conform to the fiscal year 2023 presentation.

The net impact of non-service related components is reflected within “Other non-operating income (expense), net” on our consolidated income statements.

Further, non-service related components are not indicative of our defined benefit plans’ future contribution needs due to the funded status of the plans.

Table of Conte n t s

ADJUSTED DILUTED EPS

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2024 GAAP $4,466.1 $647.7 ($73.8) $944.9 $3,842.1 $17.24

Business and asset actions (A)

Gain on sale of business (1,575.6) — — (377.2) (1,198.4) (5.38)

Business and asset actions 57.0 — — 13.2 43.8 0.20

Loss on de-designation of cash flow hedges (A)

— — 16.3 1.4 4.3 0.02

Non-service pension cost, net — — 102.0 25.2 76.8 0.34

— — 86.8 21.6 65.2 0.29

2024 Non-GAAP ("Adjusted")

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2023 GAAP $2,494.6 $604.3 ($39.0) $551.2 $2,292.8 $10.30

Business and asset actions

73.7 — — 12.7 61.0 0.27

Equity method investment impairment charge — 14.8 — 3.7 11.1 0.05

Non-service pension benefit, net

Business and asset actions (B)

244.6 — — 34.7 204.9 0.92

Non-service pension cost, net — — 86.8 21.6 65.2 0.29

2023 Non-GAAP ("Adjusted")

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% Change Non-GAAP ("Adjusted") 8 %

(A ) Charge includes $5.0 attributable to noncontrolling interests.

Table of Conte n t s

(A ) Includes $10.6 attributable to noncontrolling interests.

(B ) Includes $5.0 attributable to noncontrolling interests.

ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN

We define adjusted EBITDA as net income less income from discontinued operations, net of tax, and excluding non-GAAP adjustments, which we do not believe to be indicative of underlying business trends, before interest expense, other non-operating income (expense), net, income tax provision, and depreciation and amortization expense.

We define adjusted EBITDA as net income less income or loss from discontinued operations, net of tax, and excluding non-GAAP adjustments, which we do not believe to be indicative of underlying business trends, before interest expense, other non-operating income (expense), net, income tax provision, and depreciation and amortization expense.

Adjusted EBITDA and adjusted EBITDA margin provide useful metrics for management to assess operating performance.

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Net income and net income margin $3,862.4 31.9 % $2,338.6 18.6 %

Income from discontinued operations, net of tax

(Loss) Income from discontinued operations, net of tax

(13.9) (0.1 %) 7.4 0.1 %

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Depreciation and amortization 1,451.1 12.0 % 1,358.3 10.8 %

Gain on sale of business 1,575.6 13.0 % — — %

Business and asset actions 57.0 0.5 % 244.6 1.9 %

Equity method investment impairment charge — — % 14.8 0.1 %

Adjusted EBITDA and adjusted EBITDA margin $5,046.3 41.7 % $4,701.8 37.3 %

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Adjusted EBITDA margin change 440 bp

Table of Conte n t s

The tables below present sales and a reconciliation of operating income and operating margin by segment to adjusted EBITDA and adjusted EBITDA margin by segment for the fiscal years ended 30 September 2024 and 2023:

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Adjusted EBITDA margin 39.1 % 32.5 % 660 bp

Table of Conte n t s

Middle East and India

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Operating loss ($292.7) ($287.3)

($287.3) ($184.7)

Depreciation and amortization 47.1 51.8

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Adjusted EBITDA ($225.2) ($222.4) ($2.8) (1 %)

Table of Conte n t s

ADJUSTED EFFECTIVE TAX RATE

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Income tax provision $944.9 $551.2

$551.2 $500.8

Adjustments for tax impacts on disclosed items:

Gain on sale of business

Business and asset actions

Equity method investment impairment charge — 3.7

Non-service pension tax impact 21.6 (10.8)

Loss on de-designation of cash flow hedges

Non-service pension cost, net

Adjusted income tax provision $607.5 $607.5

Income from continuing operations before taxes $4,821.2 $2,882.4

$2,882.4 $2,754.7

Adjustments for pre-tax impacts of disclosed items:

Gain on sale of business (1,575.6) —

Business and asset actions 57.0 244.6

Equity method investment impairment charge — 14.8

Non-service pension cost (benefit), net 86.8 (44.7)

Loss on de-designation of cash flow hedges 16.3 —

Non-service pension cost, net 102.0 86.8

Adjusted income from continuing operations before taxes $3,420.9 $3,213.8

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Cash used for investing activities $4,919.2 $5,916.4

$5,916.4 $3,857.2

Proceeds from sale of assets and investments 1,878.8 25.4

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NGHC expenditures not funded by Air Products' equity (A)

(2,047.7) (979.1)

Capital expenditures $5,152.0 $5,224.4

(A) Reflects the portion of "Additions to plant and equipment, including long-term deposits" that is associated with NGHC, less our approximate cash investment in the joint venture.

Table of Conte n t s

LIQUIDITY AND CAPITAL RESOURCES

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Deferred income taxes (69.3) (24.7)

Gain on sale of business (1,575.6) —

Business and asset actions 57.0 244.6

Undistributed earnings of equity method investments (206.0) (261.2)

(261.2) (214.7)

Gain on sale of assets and investments (31.4) (15.8)

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In fiscal year 2024, cash provided by operating activities was $3,646.7.

Gain on sale of business of $1,575.6 related to the sale of the LNG business.

Refer to Note 4, Gain on Sale of Business , to the consolidated financial statements for additional information.

Business and asset actions of $57.0 included an expense recognized for severance and other benefits related to a global cost reduction plan.

Refer to Note 5, Business and Asset Actions , to the consolidated financial statements for additional information.

Other operating adjustments of $183.8 primarily included pension expense, net of contributions, of $89.1.

Working capital accounts resulted in a net use of cash of $183.0.

The use of cash of $338.7 within payables and accrued liabilities primarily resulted from a reduction of customer advances for sale of equipment projects as we recognize revenue, payments against severance actions, and payments for incentive compensation under the fiscal year 2023 plan.

Inventories resulted in a use of cash of $137.8 primarily due to purchases of helium.

The use of cash of $111.0 from trade receivables was primarily attributable to the timing of collections.

The source of cash of $370.1 within other working capital was primarily driven by the timing of income tax payments associated with the sale of the LNG business.

We expect to remit all tax payments associated with this transaction in the first half of fiscal year 2025.

In fiscal year 2023, cash provided by operating activities was $3,205.7.

Business and asset actions of $244.6 included noncash charges to write off assets related to our exit from certain projects previously under construction as well as an expense for severance and other benefits.

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The use of cash of $119.0 within other working capital was primarily driven by the timing of income tax payments.

The source of cash of $130.7 from trade receivables was primarily attributable to collection of higher natural gas costs contractually passed through to on-site customers in fiscal year 2023.

Table of Conte n t s

In fiscal year 2022, cash provided by operating activities was $3,170.6.

Undistributed earnings of equity method investments of $214.7 reflects activity from the JIGPC joint venture, which began contributing to our results in late October 2021.

We received cash distributions of approximately $155 from this joint venture during fiscal year 2022.

Other adjustments of $304.9 included adjustments for noncash currency impacts of intercompany balances, deferred costs associated with new projects, contributions to pension plans, and payments made for leasing activities.

Working capital accounts resulted in a net use of cash of $115.8.

The use of cash of $475.2 within trade receivables included the impacts of higher underlying sales and higher natural gas costs passed through to our on-site customers.

The source of cash of $532.5 within payables and accrued liabilities primarily resulted from higher natural gas costs and customer advances for sale of equipment projects.

Other working capital accounts resulted in a use of cash of $77.0 primarily due to contract fulfillment costs and the timing of income tax payments.

The source of cash of $130.7 from trade receivables was primarily attributable to collection of higher natural gas costs contractually passed through to on-site customers.

Cash Flows From Investing Activities

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Additions to plant and equipment, including long-term deposits ($6,796.7) ($4,626.4)

Acquisitions, less cash acquired — (65.1)

Investment in and advances to unconsolidated affiliates — (912.0)

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Cash Used for Investing Activities ($4,919.2) ($5,916.4)

($5,916.4) ($3,857.2)

In fiscal year 2024, cash used for investing activities was $4,919.2.

The use of cash primarily resulted from capital expenditures of $6,796.7 for additions to plant and equipment, including long-term deposits, and investments in financing receivables of $403.0.

Refer to the Capital Expenditures section below for further detail.

Proceeds from sale of assets and investments of $1,878.8 primarily related to the sale of the LNG business.

Refer to Note 4, Gain on Sale of Business , to the consolidated financial statements for additional information.

Maturities of time deposits provided cash of $470.7, which exceeded purchases of time deposits of $141.4.

In fiscal year 2023, cash used for investing activities was $5,916.4.

The use of cash primarily resulted from capital expenditures of $4,626.4 for additions to plant and equipment, including long-term deposits, investments in and advances to unconsolidated affiliates of $912.0, and investments in financing receivables of $665.1.

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Maturities of time deposits and short-term treasury securities provided cash of $897.0, which exceeded purchases of investments of $640.1.

In fiscal year 2022, cash used for investing activities was $3,857.2.

Capital expenditures primarily included $2,926.5 for additions to plant and equipment, including long-term deposits, and $1,658.4 for investments in and advances to unconsolidated affiliates.

Proceeds from investments of $2,377.4 resulted from maturities of time deposits and short-term treasury securities and exceeded purchases of investments of $1,637.8.

Capital Expenditures

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Additions to plant and equipment, including long-term deposits $6,796.7 $4,626.4

$4,626.4 $2,926.5

Acquisitions, less cash acquired — 65.1

Investment in and advances to unconsolidated affiliates (A)

912.0 1,658.4

Investment in financing receivables 403.0 665.1

NGHC expenditures not funded by Air Products' equity (B)

(2,047.7) (979.1)

Capital Expenditures $5,152.0 $5,224.4

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(B) Reflects the portion of "Additions to plant and equipment, including long-term deposits" that is associated with NGHC, less our approximate cash investment in the joint venture.

Table of Conte n t s

Capital expenditures in fiscal year 2024 totaled $5,152.0 compared to $5,224.4 in fiscal year 2023.

The increase of $574.4 was driven by spending for plant and equipment, which was largely attributable to purchases associated with our low- and zero-carbon hydrogen projects, as well as ongoing maintenance capital spending.

Higher spending for plant and equipment was partially offset by lower investments in and advances to unconsolidated affiliates, as the second phase of our investment in JIGPC of $908 in fiscal year 2023 was lower than the initial investment of $1.6 billion completed in fiscal year 2022.

These investments included approximately $130 and $73 in fiscal years 2023 and 2022, respectively, received from a noncontrolling partner in one of our subsidiaries.

We expect to complete a remaining investment of approximately $115.

Refer to Note 9, Equity Affiliates , to the consolidated financial statements for additional information.

Fiscal year 2023 also included an investment in financing receivables of $665.1, primarily for progress payments towards the purchase of a natural gas-to-syngas processing facility in Uzbekistan.

Refer to Note 5, Acquisitions , to the consolidated financial statements for additional information.

Spending for plant and equipment primarily included project spending for our clean energy projects such as the NEOM Green Hydrogen Project in NEOM City, Saudi Arabia, as well as our clean energy complexes in Louisiana, United States, and Alberta, Canada.

Additionally, we continued to invest capital in our core industrial gas business for new industrial gas plants as well as maintaining and replacing existing facilities.

We did not recognize any investments in and advances to unconsolidated affiliates during fiscal year 2024;

however, we expect to complete our remaining investment of approximately $115 associated with our investment in JIGPC in fiscal year 2025.

R efer to Note 10, Equity Affiliates , to the consolidated financial statements for additional information.

The investment in financing receivables of $403.0 primarily reflects payments associated with the purchase of renewable fuel assets from World Energy as well as remaining payments on the purchase of a natural gas-to-syngas processing facility in Uzbekistan.

Refer to Note 3, Variable Interest Entities and to Note 6, Acquisition , to the consolidated financial statements for additional information.

Outlook for Investing Activities

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These decisions, either individually or in the aggregate, could have a significant effect on our cash used for investing activities.

We expect capital expenditures for fiscal year 2024 to be approximately $5.0 billion to $5.5 billion, which is driven by clean hydrogen and sustainable aviation fuel projects such as those being executed in California and Louisiana, United States, as well as Alberta, Canada.

We expect capital expenditures for fiscal year 2025 to be approximately $4.5 billion to $5.0 billion, which is driven by additional spending for our clean energy projects that are currently under construction as well as ongoing maintenance capital spending in our core industrial gases business.

We anticipate capital expenditures to be funded with our current cash balance, cash generated from continuing operations, and additional financing activities.

As of the end of fiscal year 2023, we have committed capital of approximately $15 billion to projects intended to accelerate the energy transition.

These low- and zero-carbon hydrogen and other first mover projects demonstrate our commitment to making investments that will make a meaningful difference on climate issues, allowing us to support our customers’ sustainability journeys, conserve resources, and care for our employees and communities.

Cash Flows From Financing Activities

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Payments on long-term debt (486.2) (615.4)

Net increase in commercial paper and short-term borrowings 268.2 17.9

Net (decrease) increase in commercial paper and short-term borrowings (289.9) 268.2

Dividends paid to shareholders (1,564.9) (1,496.6)

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Distributions to noncontrolling interests (25.8) (115.9)

(115.9) (4.8)

Other financing activities (132.5) (205.8)

Cash Provided by (Used for) Financing Activities

$1,609.6 ($1,000.6)

Cash Provided by Financing Activities $2,615.4 $1,609.6

In fiscal year 2024, cash provided by financing activities was $2,615.4.

As further discussed below, the source of cash was primarily attributable to long-term debt proceeds of $3,516.2 as well as an increase in commercial paper and short-term borrowings of $268.2.

These cash inflows were partially offset by dividend payments to shareholders of $1,496.6 and payments on long-term debt of $615.4.

The long-term debt proceeds included proceeds from our inaugural multi-currency green bonds that were issued during the second quarter in concurrent U.S.

Dollar- and Euro-denominated fixed-rate note offerings with aggregate principal amounts of $600 and €700 million, respectively.

The source of cash was primarily driven by long-term debt proceeds of $4,678.3 as well as an increase in investments by noncontrolling interests of $428.5.

Sources were partially offset by dividend payments to shareholders of $1,564.9, payments on long-term debt of $486.2 and net decreases in commercial paper and short-term borrowings of $289.9.

Long-term debt proceeds included $2.5 billion from green senior notes issued during the second quarter in U.S.

Dollar-denominated fixed-rate note offerings.

Consistent with our Green Finance Framework, we have allocated the net proceeds to finance or refinance, in whole or in part, existing or future projects that are expected to have environmental benefits, including those related to pollution prevention and control, renewable energy generation and procurement, and sustainable aviation fuel.

We expect to issue our first allocation report in 2024.

Additionally, as further discussed below, the NGHC joint venture borrowed approximately $2.0 billion.

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Refer to the Credit Facilities section below as well as Note 17, Debt , to the consolidated financial statements for additional information.

Table of Conte n t s

In fiscal year 2022, cash used for financing activities was $1,000.6.

The use of cash was primarily driven by dividend payments to shareholders of $1,383.3 and payments on long-term debt of $400.0 for the repayment of a 3.0% Senior Note.

These uses of cash were partially offset by long-term debt proceeds and short-term borrowings of $766.2 and $17.9, respectively.

In fiscal year 2023, cash provided by financing activities was $1,609.6.

The source of cash was primarily attributable to long-term debt proceeds of $3,516.2 as well as an increase in commercial paper and short-term borrowings of $268.2.

These cash inflows were partially offset by dividend payments to shareholders of $1,496.6 and payments on long-term debt of $615.4.

Financing and Capital Structure

Total debt increased from $7,644.8 as of 30 September 2022 to $10,305.8 as of 30 September 2023, primarily due to non-recourse project financing secured by the NGHC joint venture for construction of the NEOM Green Hydrogen project, issuance of our inaugural green U.S.

Dollar- and Euro-denominated fixed-rate notes, and an increase in outstanding commercial paper.

Total debt increased from $10,305.8 as of 30 September 2023 to $14,227.9 as of 30 September 2024, primarily due to the issuance of green U.S.

Dollar-denominated fixed-rate notes as well as additional borrowings from the non-recourse project financing available to the NGHC joint venture for construction of the NEOM Green Hydrogen project.

Total debt includes related party debt of $304.4 and $328.3 as of 30 September 2024 and 30 September 2023, respectively.

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As of 30 September 2024, we were in compliance with all of the financial and other covenants under our debt agreements.

2021 Credit Agreement

We have a five-year $2.75 billion revolving credit agreement maturing 31 March 2026 with a syndicate of banks (the “2021 Credit Agreement”), under which senior unsecured debt is available to us and certain of our subsidiaries.

The 2021 Credit Agreement provides a source of liquidity and supports our commercial paper program.

No borrowings were outstanding under the 2021 Credit Agreement as of 30 September 2023.

At this time, we do not expect to access the facility for additional liquidity.

The only financial covenant in the 2021 Credit Agreement is a maximum ratio of total debt to total capitalization (equal to total debt plus total equity) not to exceed 70%.

The 2021 Credit Agreement defines total debt as the aggregate principal amount of all indebtedness, excluding limited recourse debt of any project finance subsidiary.

Accordingly, this calculation does not consider borrowings associated with NGHC.

Total debt to total capitalization was 36.6% and 35.8% as of 30 September 2023 and 30 September 2022, respectively.

2024 Credit Agreements

In March 2024, we entered into a five-year $3.0 billion revolving credit agreement maturing 31 March 2029 (the “2024 Five-Year Credit Agreement”) as well as a 364-day $500.0 revolving credit agreement maturing 27 March 2025 that we have the ability to convert into a term loan maturing 27 March 2026 (the “2024 364-Day Credit Agreement” and, together with the 2024 Five-Year Credit Agreement, the “2024 Credit Agreements”).

Both of the 2024 Credit Agreements are syndicated facilities that provide a source of liquidity and support our commercial paper program through availability of senior unsecured debt to us and certain of our subsidiaries.

The 2024 Five-Year Credit Agreement replaced our previous $2.75 billion revolving credit agreement (the “2021 Credit Agreement”), which was terminated upon execution of the 2024 Five-Year Credit Agreement.

No borrowings were outstanding under the 2021 Credit Agreement at the time of its termination, and no early termination penalties were incurred.

No borrowings were outstanding under either of the 2024 Credit Agreements as of 30 September 2024.

Foreign Credit Facilities

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The amount borrowed and outstanding as of 30 September 2023 was $1,041.4.

The increase from 30 September 2022 was driven by borrowings on a new variable-rate Saudi Riyal loan facility that matures in October 2026.

The interest rate on the facility is based on the Saudi Arabian Interbank Offered Rate plus an annual margin of 1.35%.

We entered into this facility in October 2022 and utilized a portion of the proceeds to repay a variable-rate 4.10% Saudi Riyal Loan Facility of $195.6, which was presented within long-term debt on our consolidated balance sheet as of 30 September 2022.

NEOM Green Hydrogen Project Financing

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At the same time, NGHC secured additional non-recourse credit facilities totaling approximately $500 primarily for working capital needs.

As of 30 September 2023, the joint venture had borrowed $1.4 billion of the available financing.

As of 30 September 2024 and 2023, the joint venture had drawn principal amounts of approximately $3.3 billion and $1.4 billion, respectively, from the available financing.

Refer to Note 3, Variable Interest Entities , to the consolidated financial statements for additional information.

The Board of Directors determines whether to declare cash dividends on our common stock and the timing and amount based on financial condition and other factors it deems relevant.

In fiscal year 2023, the Board of Directors increased the quarterly dividend to $1.75 per share, representing an 8% increase, or $0.13 per share, from the previous dividend of $1.62 per share.

In fiscal year 2024, the Board of Directors increased the quarterly dividend to $1.77 per share, representing a 1% increase, or $0.02 per share, from the previous dividend of $1.75 per share.

We expect to continue increasing our quarterly dividend as we have done for the last 42 consecutive years.

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Discontinued Operations

In fiscal years 2023 and 2022, cash provided by operating activities of discontinued operations of $0.6 and $59.6, respectively, resulted from cash received as part of state tax refunds related to the sale of our former Performance Materials Division in fiscal year 2017.

Table of Conte n t s

In fiscal year 2023, cash provided by operating activities of discontinued operations was $0.6.

PENSION BENEFITS

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For additional information, refer to Note 18, Retirement Benefits , to the consolidated financial statements.

Net Periodic Cost (Benefit)

The table below summarizes the components of net periodic cost/benefit for our U.S.

Net Periodic Cost

The table below summarizes the components of net periodic cost for our U.S.

and international defined benefit pension plans for the fiscal years ended 30 September:

Service cost $20.9 $23.2

Non-service related costs (benefits)

Non-service related costs 102.0 86.8

Other 0.9 0.9

Net Periodic Cost (Benefit) $110.9 ($3.6)

Net periodic cost was $110.9 in fiscal year 2023 versus a benefit of $3.6 in the prior year.

The increased costs from the prior year were primarily attributable to higher non-service costs, which were driven by higher interest cost and lower expected returns on plan assets due to a smaller beginning balance of plan assets.

Net Periodic Cost $123.8 $110.9

Net periodic cost was $123.8 and $110.9 in fiscal years 2024 and 2023, respectively.

The increased costs from the prior year were primarily attributable to non-service related costs, which were driven by lower expected returns on plan assets due to a smaller beginning of fiscal year balance of plan assets and higher interest cost, partially offset by a decrease in actuarial loss amortization.

The net impact of non-service related items are reflected within "Other non-operating income (expense), net" on our consolidated income statements.

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The amount of service costs capitalized in fiscal years 2024 and 2023 was not material.

The table below summarizes the assumptions used in the calculation of net periodic cost/benefit for the fiscal years ended 30 September:

The table below summarizes the assumptions used in the calculation of net periodic cost for the fiscal years ended 30 September:

Weighted average discount rate – Service cost 5.6 % 5.1 %

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Weighted average expected rate of compensation increase 3.5 % 3.5 %

In fiscal year 2024, we expect to recognize pension expense of approximately $120 to $130 primarily driven by approximately $100 to $110 of non-service related costs, including lower estimated expected returns on plan assets due to a smaller beginning balance of plan assets and higher interest cost, partially offset by a decrease in actuarial loss amortization.

In fiscal year 2023, we recognized net actuarial losses of $4.4 in other comprehensive income.

In fiscal year 2025, we expect to recognize pension expense of approximately $60 to $70 primarily driven by approximately $40 to $50 of non-service related costs, including higher expected return on plan assets due to a higher beginning balance of plan assets, lower interest cost, and a decrease in actuarial loss amortization.

In fiscal year 2024, we recognized net actuarial gains of $44.6 in other comprehensive income.

Actuarial gains and losses are amortized into pension expense over prospective periods to the extent they are not offset by future gains or losses.

Future changes in the discount rate and actual returns on plan assets could impact the actuarial gain or loss and resulting amortization in years beyond fiscal year 2025.

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Pension Funding

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Projected benefit obligation $3,951.8 $3,511.2

$3,511.2 $3,588.3

Fair value of plan assets at end of year

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($44.3) ($78.2)

The net unfunded liability of $78.2 as of 30 September 2023 increased $15.9 from $62.3 as of 30 September 2022, as increases to the projected benefit obligation from the service and interest cost components of net period pension cost were greater than actuarial gains from higher discount rates.

The net unfunded liability of $44.3 as of 30 September 2024 decreased $33.9 from $78.2 as of 30 September 2023, as actual return on plan assets was greater than increases to the projected benefit obligation from actuarial losses due to lower discount rates as well as the interest cost component of the net periodic pension cost.

Company Contributions

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With the assistance of third-party actuaries, we analyze the liabilities and demographics of each plan, which help guide the level of contributions.

During 2023 and 2022, our cash contributions to funded pension plans and benefit payments for unfunded pension plans were $32.6 and $44.7, respectively.

During fiscal years 2024 and 2023, our cash contributions to funded pension plans and benefit payments for unfunded pension plans were $34.7 and $32.6, respectively.

For fiscal year 2025, cash contributions to defined benefit plans are estimated to be $30 to $40.

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Depreciable Lives of Plant and Equipment

Plant and equipment, net at 30 September 2023 totaled $17,472.1, and depreciation expense totaled $1,325.8 during fiscal year 2023.

Plant and equipment, net as of 30 September 2024 totaled $23,370.9, and depreciation expense totaled $1,419.6 during fiscal year 2024.

Plant and equipment is recorded at cost and depreciated using the straight-line method, which deducts equal amounts of the cost of each asset from earnings every year over its estimated economic useful life.

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wear and tear, obsolescence, technical standards, contract life, market demand, competitive position, raw material availability, and geographic location.

Table of Conte n t s

The estimated economic useful life of an asset is monitored to determine its appropriateness, especially when business circumstances change.

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Likewise, if the estimated useful life is increased, the adjustment to the useful life decreases depreciation expense per year on a prospective basis.

Our regional segments have numerous long-term customer supply contracts for which we construct an on-site plant adjacent to or near the customer’s facility.

Our regional industrial gas segments have numerous long-term customer supply contracts for which we construct an on-site plant on or near the customer’s facility.

These contracts typically have initial contract terms of 10 to 20 years.

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As contract terms are extended, the depreciable life of the associated production assets is adjusted to match the new contract term, as long as it does not exceed the remaining physical life of the asset.

Our regional segments also have contracts for liquid or gaseous bulk supply and, for smaller customers, packaged gases.

Our regional industrial gas segments also have contracts for liquid or gaseous bulk supply and, for smaller customers, packaged gases.

The depreciable lives of production facilities associated with these contracts are generally 15 years.

These depreciable lives have been determined based on historical experience combined with judgment on future assumptions such as technological advances, potential obsolescence, competitors’ actions, etc.

In addition, we may purchase assets through transactions accounted for as either an asset acquisition or a business combination.

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• changes in the expected useful life of the long-lived assets.

If such circumstances are determined to exist, an estimate of undiscounted future cash flows produced by that asset group is compared to the carrying value to determine whether impairment exists.

If such circumstances are determined to exist, an estimate of undiscounted future cash flows produced by the asset group is compared to the carrying value to determine whether impairment exists.

If an asset group is determined to be impaired, the loss is measured based on the difference between the asset group’s fair value and its carrying value.

An estimate of the asset group’s fair value is based on the discounted value of its estimated cash flows.

Table of Conte n t s

The assumptions underlying the undiscounted future cash flow projections require significant management judgment.

Factors that management must estimate include industry and market conditions, sales volume and prices, costs to produce, inflation, etc.

Factors that management must estimate include but are not limited to industry and market conditions, sales volume and prices, costs to produce, and inflation.

The assumptions underlying the cash flow projections represent management’s best estimates at the time of the impairment review and could include probability weighting of cash flow projections associated with multiple potential future scenarios.

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Goodwill represents the excess of the aggregate purchase price, plus the fair value of any noncontrolling interest and previously held equity interest in the acquiree, over the fair value of identifiable net assets of an acquired entity.

Goodwill was $861.7 as of 30 September 2023.

Goodwill, net was $905.1 as of 30 September 2024.

Disclosures related to goodwill are included in Note 12, Goodwill , to the consolidated financial statements.

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The tests are done at the reporting unit level, which is defined as being equal to or one level below the operating segment for which discrete financial information is available and whose operating results are reviewed by segment managers regularly.

We have five reportable business segments, seven operating segments and 11 reporting units, eight of which include a goodwill balance.

At the time of our fiscal year 2024 testing, we had five reportable business segments, seven operating segments and 11 reporting units, eight of which included a goodwill balance.

Refer to Note 26, Business Segment and Geographic Information , for additional information.

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The majority of our goodwill is assigned to reporting units within our regional industrial gases segments.

As part of the goodwill impairment testing, we have the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value.

However, we choose to bypass the qualitative assessment and conduct quantitative testing to determine if the carrying value of the reporting unit exceeds its fair value.

An impairment loss will be recognized for the amount by which the carrying value of the reporting unit exceeds its fair value, not to exceed the total amount of goodwill allocated to that reporting unit.

To determine the fair value of a reporting unit, we initially use an income approach valuation model, representing the present value of estimated future cash flows.

Our valuation model uses a discrete growth period and an estimated exit trading multiple.

The income approach is an appropriate valuation method due to our capital-intensive nature, the long-term contractual nature of our business, and the relatively consistent cash flows generated by our reporting units.

The principal assumptions utilized in our income approach valuation model include revenue growth rates, operating profit and/or adjusted EBITDA margins, discount rate, and exit multiple.

Projected revenue growth rates and operating profit and/or adjusted EBITDA assumptions are consistent with those utilized in our operating plan and/or revised forecasts and long-term financial planning process.

The discount rate assumption is calculated based on an estimated market-participant risk-adjusted weighted-average cost of capital, which includes factors such as the risk-free rate of return, cost of debt, and expected equity premiums.

The exit multiple is determined from comparable industry transactions and where appropriate, reflects expected long-term growth rates.

If our initial review under the income approach indicates there may be impairment, we incorporate results under the market approach to further evaluate the existence of impairment.

When the market approach is utilized, fair value is estimated based on market multiples of revenue and earnings derived from comparable publicly-traded industrial gases companies and/or regional manufacturing companies engaged in the same or similar lines of business as the reporting unit, adjusted to reflect differences in size and growth prospects.

When both the income and market approach are utilized, we review relevant facts and circumstances and make a qualitative assessment to determine the proper weighting.

Management judgment is required in the determination of each assumption utilized in the valuation model, and actual results could differ from the estimates.

In the fourth quarter of fiscal year 2023, we conducted our annual goodwill impairment test, noting no indications of impairment.

The fair value of all our reporting units substantially exceeded their carrying value.

Table of Conte n t s

Future events that could have a negative impact on the level of excess fair value over carrying value of the reporting units include, but are not limited to:

long-term economic weakness, decline in market share, pricing pressures, inability to successfully implement cost improvement measures, increases to our cost of capital, changes in the strategy of the reporting unit, and changes to the structure of our business as a result of future reorganizations or divestitures of assets or businesses.

Negative changes in one or more of these factors, among others, could result in impairment charges.

As part of annual goodwill impairment testing, we have the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value.

Our evaluation of qualitative factors includes an assessment of relevant facts, events, and circumstances of a reporting unit including but not limited to:

business performance, strategy, and outlook;

macroeconomic conditions;

local market dynamics;

cost management;

and significant changes in key personnel, customers, operating assets, or product mix.

We perform a quantitative test when qualitative factors alone are not sufficient to conclude whether it is more likely than not that the fair value of the reporting unit is less than its carrying value.

If we perform a quantitative test, an impairment loss will only be recognized for the amount by which the carrying value of the reporting unit exceeds its fair value, not to exceed the total amount of goodwill allocated to that reporting unit.

In the fourth quarter of fiscal year 2024, we conducted our annual assessment and concluded that it was more likely than not that the fair value of each reporting unit was greater than its carrying value.

Impairment of Assets:

Intangible Assets

Intangible assets, net with determinable lives at 30 September 2023 totaled $297.5 and consisted primarily of customer relationships, purchased patents and technology, and land use rights.

Disclosures related to intangible assets other than goodwill are included in Note 13, Intangible Assets , to the consolidated financial statements.

Intangible assets, net with determinable lives as of 30 September 2024 totaled $275.3 and consisted primarily of customer relationships, purchased patents and technology, and land use rights.

These intangible assets are tested for impairment as part of the long-lived asset grouping impairment tests.

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See the impairment discussion above under " Impairment of Assets – Plant and Equipment " for a description of how impairment losses are determined.

Indefinite-lived intangible assets at 30 September 2023 totaled $37.1 and consisted of trade names and trademarks.

Indefinite-lived intangible assets as of 30 September 2024 totaled $36.3 and consisted of trade names and trademarks.

Indefinite-lived intangibles are subject to impairment testing at least annually or more frequently if events or changes in circumstances indicate that potential impairment exists.

The impairment test for indefinite-lived intangible assets involves calculating the fair value of the indefinite-lived intangible assets and comparing the fair value to their carrying value.

If the fair value is less than the carrying value, the difference is recorded as an impairment loss.

To determine fair value, we utilize the royalty savings method, a form of the income approach.

This method values an intangible asset by estimating the royalties avoided through ownership of the asset.

Disclosures related to intangible assets other than goodwill are included in Note 12, Intangible Assets , to the consolidated financial statements.

In the fourth quarter of fiscal year 2023, we conducted our annual impairment test of indefinite-lived intangibles, noting no indications of impairment.

As part of annual indefinite-lived intangible asset impairment testing, we have the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of the intangible asset is less than its carrying value.

Our evaluation of qualitative factors includes an assessment of relevant facts, events, and circumstances including but not limited to:

business performance, strategy and outlook;

macroeconomic conditions;

local market dynamics;

cost management;

and significant changes in key personnel, customers, operating assets, or product mix.

We perform a quantitative test when qualitative factors alone are not sufficient to conclude whether it is more likely than not that the fair value of the intangible asset is less than its carrying value.

If we perform a quantitative test, an impairment loss will only be recognized for the amount by which the carrying value of the indefinite-lived intangible asset exceeds its fair value, not to exceed the total carrying value of the asset.

In the fourth quarter of fiscal year 2024, we conducted our annual assessment and concluded that it was more likely than not that the fair value of each asset was greater than its carrying value.

Impairment of Assets:

Equity Method Investments

Investments in and advances to equity affiliates totaled $4,617.8 at 30 September 2023.

Investments in and advances to equity affiliates totaled $4,792.5 as of 30 September 2024.

The majority of our equity method investments are ventures with other industrial gas companies.

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Changes in key assumptions about the financial condition of an investee or actual conditions that differ from estimates could result in an impairment charge.

In fiscal year 2023, there was no need to test any of our equity affiliate investments for impairment as no events or changes in circumstances indicated that the carrying amount of the investments may not be recoverable.

In fiscal year 2024, there was no need to test any of our equity method investments for impairment as no events or changes in circumstances indicated that the carrying amount of the investments may not be recoverable.

Revenue Recognition:

Cost Incurred Input Method

Revenue from equipment sale contracts is generally recognized over time as we have an enforceable right to payment for performance completed to date and our performance under the contract terms does not create an asset with alternative use.

Revenue from sale of equipment contracts is generally recognized over time as we have an enforceable right to payment for performance completed to date and our performance under the contract terms does not create an asset with alternative use.

We use a cost incurred input method to recognize revenue by which costs incurred to date relative to total estimated costs at completion are used to measure progress toward satisfying performance obligations.

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When estimates of total costs to be incurred on a contract exceed estimates of total revenues to be earned, a provision for the entire estimated loss on the contract is recorded in the period in which the loss is determined.

Table of Conte n t s

In addition to the typical risks associated with underlying performance of engineering, project procurement, and construction activities, our sale of equipment projects within our Corporate and other segment require monitoring of risks associated with schedule, geography, and other aspects of the contract and their effects on our estimates of total revenues and total costs to complete the contract.

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Under this method, deferred tax assets and liabilities are recognized for the tax effects of temporary differences between the financial reporting and tax basis of assets and liabilities measured using enacted tax rates in effect for the year in which the differences are expected to be recovered or settled.

As of 30 September 2023, accrued income taxes, including the amount recorded as noncurrent, was $240.6, and net deferred tax liabilities were $1,106.4.

As of 30 September 2024, accrued income taxes, including the amount recorded as noncurrent, were $619.3, and our net deferred income tax liability was $1,032.1.

Tax liabilities related to uncertain tax positions as of 30 September 2024 were $101.0, excluding interest and penalties.

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Disclosures related to income taxes are included in Note 24, Income Taxes , to the consolidated financial statements.

Table of Conte n t s

Pension and Other Postretirement Benefits

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A 50 bp increase or decrease in the expected rate of compensation may result in an increase or decrease to pension expense, respectively, of approximately $4 per year.

Table of Conte n t s

Loss Contingencies

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis