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Item 7. Management’s Discussion and Analysis

2025-11-20 compared with 2024-11-21 · 504 added, 367 removed, 461 unchanged (65% of the section changed)

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This discussion should be read in conjunction with the consolidated financial statements and the accompanying notes contained in this Annual Report on Form 10-K.

Unless otherwise stated, financial information is presented in millions of U.S.

Dollars, except for per share data.

Except for net income, which includes the results of discontinued operations, financial information is presented on a continuing operations basis.

Financial information is presented on a continuing operations basis.

Unless otherwise stated, amounts discussed are in millions of U.S.

Dollars, except for per share data, which is calculated and presented on a diluted basis in U.S.

Dollars per weighted average common share.

The financial measures discussed below are presented in accordance with U.S.

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We present certain financial measures on an "adjusted", or "non-GAAP", basis because we believe such measures, when viewed together with financial results computed in accordance with GAAP, provide a more complete understanding of the factors and trends affecting our historical financial performance.

For each non-GAAP financial measure, including adjusted diluted earnings per share ("EPS"), adjusted EBITDA, adjusted EBITDA margin, adjusted effective tax rate, and capital expenditures, we present a reconciliation to the most directly comparable financial measure calculated in accordance with GAAP.

These reconciliations and explanations regarding the use of non-GAAP measures are presented under the “ Reconciliations of Non-GAAP Financial Measures ” section beginning on page 37 .

For each non-GAAP financial measure, including adjusted operating income, adjusted operating margin, adjusted earnings per share ("EPS"), adjusted EBITDA, adjusted effective tax rate, and capital expenditures, we present a reconciliation to the most directly comparable financial measure calculated in accordance with GAAP.

These reconciliations and explanations regarding the use of non-GAAP financial measures are presented under the “ Reconciliations of Non-GAAP Financial Measures ” section beginning on page 42 .

Comparisons included in the discussion that follows are for fiscal year 2025 versus ("vs.") fiscal year 2024.

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BUSINESS OVERVIEW

Founded in 1940, Air Products and Chemicals, Inc.

is a world-leading industrial gases company that has built a reputation for its innovative culture, operational excellence, and commitment to safety and the environment.

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.

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.

Air Products and Chemicals, Inc., a Delaware corporation founded in 1940, is a world-leading industrial gases company that has built a reputation for its innovation, operational excellence, and commitment to safety and environmental stewardship.

Focused on serving energy, environmental, and emerging markets and generating a cleaner future, we offer products and services that improve our customers’ operations and sustainability.

We serve a broad range of industries, including refining, chemicals, metals, electronics, manufacturing, medical, and food, providing essential industrial gases, related equipment, and applications expertise.

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

Additionally, our sale of equipment businesses provide specialized products such as turbomachinery, membrane systems, and cryogenic containers to customers worldwide.

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.

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Our Corporate and other segment includes the results of our sale of equipment businesses, costs for corporate support functions and global management activities, and other income and expenses not directly associated with the regional segments, such as foreign exchange gains and losses.

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.

In fiscal year 2024, this segment also included 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.

2025 IN SUMMARY

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.

Fiscal year 2025 was a transitional year for Air Products, marked by a renewed focus on our core industrial gas business under the leadership of our new Chief Executive Officer, who joined the Company in February 2025.

We took decisive actions to reshape our portfolio, including the cancellation and descoping of several large energy transition projects, and enhance operations through targeted productivity initiatives.

We also sharpened our approach to capital deployment, emphasizing strict return thresholds, appropriate risk-sharing, and alignment with long-term customer relationships.

These efforts are helping to improve execution and support reductions in capital expenditures and debt over time.

Key results versus the prior year include:

• Sales of $12.0 billion decreased 1%, or $63.3, as 4% lower volumes were partially offset by 2% higher energy cost pass-through to customers and 1% higher pricing driven by non-helium merchant products across all regions.

Lower volumes primarily reflect the September 2024 LNG sale, lower global helium demand, and previously announced project exits, partially offset by higher on-sites and favorable non-helium merchant.

• Operating loss was $877.0 compared to operating income of $4.5 billion in fiscal year 2024.

The operating loss in fiscal year 2025 included approximately $3.7 billion in pre-tax charges related to business and asset actions ($3.0 billion after tax, or $13.68 per share).

Operating income in fiscal year 2024 included a $1.6 billion pre-tax gain on the September 2024 sale of the LNG business ($1.2 billion after tax, or $5.38 per share).

• Adjusted operating income of $2.9 billion decreased 3%, or $89.8, due to lower volumes and higher costs, partially offset by higher non-helium pricing.

The higher costs were driven by fixed-cost inflation and depreciation, partially offset by productivity improvements across all segments.

• Equity affiliates' income of $647.7 was flat.

Increased contributions from affiliates in the Europe and Asia segments were offset by lower income from affiliates in the Corporate and other, Middle East and India, and Americas segments.

• Net loss was $354.4 compared to net income of $3.9 billion in fiscal year 2024.

The decrease was primarily due to higher charges for business and asset actions in fiscal year 2025 and the prior year gain from the sale of the LNG business.

• Adjusted EBITDA of $5.1 billion increased 1%, or $30.1.

• Loss per share of $1.74 was driven by an after-tax charge attributable to Air Products of $3.0 billion for business and asset actions recorded during fiscal year 2025.

On a non-GAAP basis, adjusted earnings per share ("EPS") was $12.03.

In the prior year, EPS was $17.24 and adjusted EPS was $12.43.

A summary table of changes in EPS is presented on page 31 .

• 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

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.

• Diluted EPS of $17.24 increased 67%, or $6.94 per share, and adjusted diluted EPS of $12.43 increased 8%, or $0.92 per share.

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

During fiscal year 2025, we marked our 43 rd consecutive year of increasing our dividends and returned approximately $1.6 billion to our shareholders through dividend payments.

Changes in Diluted EPS Attributable to Air Products

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

Diluted EPS From Continuing Operations $17.24 $10.30 $6.94

Fiscal Year Ended 30 September 2025 2024 Change vs.

Earnings (Loss) per share ($1.77) $17.18 ($18.95)

Loss per share from discontinued operations (0.04) (0.06) 0.02

Earnings (Loss) per share from continuing operations ($1.74) $17.24 ($18.98)

% Change from prior year **

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Underlying business:

Volume ($0.45)

Price, net of variable costs 0.20

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Currency 0.03

Business and asset actions (A)

Shareholder activism-related costs (0.32)

Gain on sale of business (5.15)

Business and asset actions 0.72

Gain on sale of other assets (B)

Total Operating Items ($19.15)

Other Impacts

Equity affiliates' income $0.03

Equity method investment impairment associated with business and asset actions (A)

Interest expense 0.02

Other non-operating income/expense, net:

Loss on de-designation of cash flow hedges

Gain on de-designation of cash flow hedges (C)

Non-service pension cost, net 0.19

Change in effective tax rate 0.17

Noncontrolling interests (0.01)

Change in effective tax rate, excluding discrete items below (0.07)

Tax reform adjustment related to deemed foreign dividends 0.16

Tax on repatriation of foreign earnings (0.14)

Noncontrolling interests (A)(C)

Weighted average diluted shares (0.01)

Total Other Items $0.17

Total Change in Diluted EPS From Continuing Operations $6.94

Total Change ($18.98)

% Change from prior year **

**Change versus prior period is not meaningful due to materially higher charges for business and asset actions in fiscal year 2025.

The per share impact of these charges is primarily reflected in the "Operating Items" section in the table above.

(A) The per share impacts associated with charges for business and asset actions were calculated based on a total after-tax charge attributable to Air Products of approximately $3.0 billion ($13.68 per share).

The amount of the charges attributable to our noncontrolling partners was $10.7.

(B) Gain on the sale of a regional office in Hersham, England, is reflected on the consolidated income statements within "Other income (expense), net."

(C) The per share impact reflected within "Gain on de-designation of cash flow hedges" was calculated based on an after-tax gain attributable to Air Products of $7.2 ($0.03 per share) compared to a loss of $4.3 ($0.02 per share) in the prior year.

Amounts attributable to our noncontrolling partners were a gain of $17.6 and a loss of $10.6, respectively.

The table below summarizes the diluted per share impact of our non-GAAP adjustments in fiscal years 2025 and 2024.

Fiscal Year Ended 30 September 2024 2023 Increase (Decrease)

Diluted EPS From Continuing Operations $17.24 $10.30 $6.94

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

These impacts were calculated independently and may not sum to totals due to rounding.

Fiscal Year Ended 30 September 2025 2024 Change vs.

Earnings (Loss) per Share ($1.74) $17.24 ($18.98)

Business and asset actions 13.68 0.20 13.48

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

Shareholder activism-related costs 0.32 — 0.32

Gain on sale of business (0.23) (5.38) 5.15

Gain on sale of other assets (0.11) — (0.11)

(Gain) Loss on de-designation of cash flow hedges (0.03) 0.02 (0.05)

Non-service pension cost, net 0.15 0.34 (0.19)

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

Tax reform adjustment related to deemed foreign dividends (0.16) — (0.16)

Tax on repatriation of foreign earnings 0.14 — 0.14

Adjusted Earnings per Share $12.03 $12.43 ($0.40)

% Change from prior year (3 %)

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.

As we look ahead, we believe Air Products is well-positioned to deliver sustainable growth through a renewed focus on our core industrial gas business.

Decisive actions taken in fiscal year 2025, including the cancellation and descoping of several large energy transition projects and other targeted productivity initiatives, reflect our commitment to disciplined capital allocation and operational excellence.

These actions allow us to concentrate resources on opportunities that will deliver the greatest value to our shareholders.

While clean energy markets have not developed as previously anticipated, we remain confident in the long-term demand fundamentals for industrial gases and clean energy solutions.

We continue to pursue opportunities in both traditional industrial gas and energy transition projects that meet our projected return requirements.

Additionally, we have made significant progress on the construction of several energy transition projects, including the NEOM Green Hydrogen Project, which we expect to come onstream and deliver green ammonia in 2027.

In fiscal year 2026, we expect to achieve earnings growth from new plant onstreams, continued pricing discipline, and productivity improvements.

We remain committed to cost control, a reduction in capital expenditures, and other measures aimed at unlocking value and generating cash.

Cost discipline remains a top priority as we seek to mitigate the impact of ongoing inflationary pressures and continued helium headwinds, while continuing to reward shareholders through increased dividends, as we have done for the past 43 consecutive years.

RESULTS OF OPERATIONS

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Sales $12,037.3 $12,100.6 ($63.3) (1 %)

Operating income 4,466.1 2,494.6 1,971.5 79 %

Operating margin 36.9 % 19.8 % 1,710 bp

Operating income (loss) (877.0) 4,466.1 (5,343.1) **

Operating margin (7.3 %) 36.9 % **

Equity affiliates’ income $647.7 $647.7 $— — %

Net income 3,862.4 2,338.6 1,523.8 65 %

Net income margin 31.9 % 18.6 % 1,330 bp

Net income (loss) (354.4) 3,862.4 (4,216.8) **

Non-GAAP Measures

Adjusted operating income

$2,857.7 $2,947.5 ($89.8) (3 %)

Adjusted operating margin

23.7 % 24.4 % (70 bp)

Adjusted EBITDA $5,076.4 $5,046.3 $30.1 1 %

Adjusted EBITDA margin 41.7 % 37.3 % 440 bp

** Change versus prior period is not meaningful due to charges for business and asset actions recorded in fiscal year 2025.

The table below summarizes the major factors that impacted consolidated sales for the periods presented:

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Total Consolidated Sales Change (1 %)

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.

Sales of $12.0 billion decreased 1%, or $63.3, as lower volumes of 4% were partially offset by higher energy cost pass-through to customers of 2% and favorable pricing of 1%.

Lower volumes primarily reflect the September 2024 LNG sale, lower global helium demand, and the previously announced project exits, partially offset by higher on-sites and favorable non-helium merchant.

The overall pricing improvement reflects a 2% increase in our merchant business, which was driven by non-helium product lines in our Europe and Americas segments.

Currency was flat versus the prior year.

Cost of Sales and Gross Margin

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.

Cost of sales of $8.3 billion increased 1%, or $87.3, due to higher energy cost pass-through to customers of $278, higher costs of $73, higher power and fuel costs in our merchant business of $49, and an unfavorable currency impact of $12.

The higher costs of $73 were driven by fixed-cost inflation and depreciation, partially offset by productivity improvements.

These impacts were partially offset by lower costs of $325 attributable to lower sales volumes.

Gross margin of 31.4% decreased 110 bp from 32.5% in the prior year primarily due to higher costs and increased energy cost pass-through to customers.

Selling and Administrative Expense

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.

Selling and administrative expense of $906.1 decreased 4%, or $36.3, as our productivity actions were partially offset by labor inflation.

Selling and administrative expense as a percentage of sales decreased to 7.5% from 7.8% in the prior year.

Research and Development Expense

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

Business and Asset Actions

The charges we record for business and asset actions are not recorded in segment results.

Additional information regarding these actions can be found in Note 5, Business and Asset Actions , to the consolidated financial statements.

In fiscal year 2025, total pre-tax charges related to business and asset actions were approximately $3.7 billion ($3.0 billion attributable to Air Products after tax, or $13.68 per share) compared to $57.0 ($43.8 after tax, or $0.20 per share) in fiscal year 2024.

During the second quarter of fiscal year 2025, our Board of Directors and Chief Executive Officer initiated a project review to focus resources on projects we believe will deliver the greatest value to our shareholders.

As a result of this review, we made the decision to exit various projects, primarily related to clean energy generation and distribution.

The review remains ongoing and may result in additional costs in future periods.

In connection with this review, we recognized project exit costs totaling approximately $3.6 billion, primarily consisting of noncash asset write-downs and estimated costs to terminate contractual commitments.

Costs attributable to our noncontrolling partners totaled $10.7.

The remaining charge of $123.7 in fiscal year 2025 related to severance and other employee benefits under a global cost reduction program initiated in June 2023.

Fiscal year 2024 costs under the plan totaled $57.0.

Once all actions under the plan are fully executed, we expect to realize annual pre-tax savings of approximately $240 to $260, primarily through selling and administrative expense.

Our estimates related to the actions discussed above reflect our best judgment based on information available as of 30 September 2025.

Final settlement of these items may differ materially from our current estimates, which could impact our consolidated financial statements in future periods.

Shareholder Activism-Related Costs

Shareholder activism-related costs totaling $86.3 ($71.7 after tax, or $0.32 per share) were reflected in our consolidated income statements during the first three quarters of fiscal year 2025.

These costs were recorded in connection with a proxy contest that concluded in January 2025 following certification of the election of directors at the 2025 Annual Meeting of Shareholders.

These costs were not allocated to our reportable segments.

No shareholder activism-related charges were recorded during the fourth quarter.

Of the total $86.3 reflected on our fiscal year 2025 income statement, $31.9 related to legal and professional service fees and proxy solicitation expenses incurred directly by Air Products, primarily during the first quarter.

In the second quarter, $29.7 was recorded for executive separation costs following the Board of Directors’ appointment of a new Chief Executive Officer in February 2025, which included a noncash expense of $22.4 to accelerate vesting of share-based awards and $7.3 in severance and other cash benefits.

The remaining $24.7 was authorized and paid during the third quarter as a reimbursement to Mantle Ridge LP and its affiliated entities (collectively, “Mantle Ridge”) for expenses incurred in connection with the proxy contest.

The reimbursement was unanimously approved by our Board of Directors, with one director abstaining from the vote due to his role as founder and Chief Executive Officer of Mantle Ridge.

Refer to Note 25, Supplemental Information , for additional information.

Gain on Sale of Business

In April 2025, we completed the sale of our 100% ownership interest in a consolidated subsidiary in Singapore for cash proceeds of $104.3.

We recognized a gain of $67.3 ($51.9 after tax, or $0.23 per share) in connection with the transaction during the third quarter of fiscal year 2025.

Prior to the divestiture, the subsidiary contributed annual sales of approximately $50 to our Asia segment.

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.

As a result of the transaction, we recorded a gain of $1.6 billion ($1.2 billion after tax, or $5.38 per share) during the fourth quarter of fiscal year 2024.

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

The gains from the sale of the businesses discussed above were not recorded in segment results.

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

Business and Asset Actions

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 $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 $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.

Other income of $110.1 increased 89%, or $51.9.

The increase was primarily driven by a $31.3 gain ($23.8 after tax, or $0.11 per share) on the sale of a regional office in Hersham, England, during the third quarter of fiscal year 2025.

This gain is not reflected in the results of the Europe segment.

Operating Income (Loss) and Operating Margin

Operating loss was $877.0 in fiscal year 2025 compared to income of $4.5 billion in the prior year.

The loss in fiscal year 2025 was primarily attributable to higher pre-tax charges for business and asset actions, which totaled $3.7 billion in fiscal year 2025 compared to $57 in fiscal year 2024.

Additionally, the prior year included a $1.6 billion pre-tax gain on the sale of the LNG business.

Unfavorable volumes lowered operating income by $122, primarily due to the divestiture of the LNG business in September 2024.

Operating income contributed by the LNG business in the prior year was approximately $135.

Fiscal year 2025 also included shareholder activism-related costs of $86.

In addition, other costs were unfavorable by $31, primarily reflecting fixed-cost inflation and higher depreciation, partially offset by productivity improvements.

We also recorded pre-tax gains totaling approximately $99 in connection with the sale of a consolidated subsidiary and the sale of a regional office during the third quarter of fiscal year 2025.

Furthermore, higher pricing primarily from non-helium merchant products favorably impacted operating results by $55, net of power and fuel costs.

Due to these factors, operating margin was negative 7.3% compared to 36.9% in the prior year.

Adjusted Operating Income and Adjusted Operating Margin

Adjusted operating income of $2.9 billion decreased 3%, or $89.8, due to lower volumes and higher costs, partially offset by higher non-helium pricing.

The higher costs were driven by fixed-cost inflation and depreciation, partially offset by productivity improvements.

Adjusted operating margin of 23.7% decreased 70bp from 24.4% in the prior year.

Approximately 50bp of the decline was attributable to increased energy cost pass-through to customers.

Equity Affiliates’ Income

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.

Equity affiliates' income of $647.7 was flat compared to the prior year.

Increased contributions from affiliates in the Europe and Asia segments were offset by lower income from affiliates in the Corporate and other, Middle East and India, and Americas segments.

Interest Expense

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Interest expense $214.0 $218.8

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.

Interest expense decreased 2%, or $4.8, driven by a higher carrying value of ongoing projects under construction despite our decision to exit various projects in fiscal year 2025.

This decrease was partially offset by higher interest incurred on principal borrowings from Euro- and U.S.

Dollar-denominated senior fixed-rate notes issued in February and June 2025.

Other Non-Operating Income (Expense), Net

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.

Other non-operating income of $2.6 increased $76.4 from an expense of $73.8 in the prior year.

The increase was primarily driven by lower non-service pension costs, which totaled $45.0 ($33.7 after tax, or $0.15 per share) in fiscal year 2025, compared to $102.0 ($76.8 after tax, or $0.34 per share) in the prior year.

Additionally, de-designated interest rate swaps related to financing for the NEOM Green Hydrogen Project resulted in an unrealized gain of $27.0 ($7.2 attributable to Air Products after tax, or $0.03 per share), compared to an unrealized loss of $16.3 ($4.3 after tax, or $0.02 per share) in the prior year.

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.

These benefits were partially offset by lower interest income on short-term investments.

Discontinued Operations

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 $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 $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.

We recorded net losses from discontinued operations of $8.0 and $13.9 in fiscal years 2025 and 2024, respectively.

In fiscal year 2025, a pre-tax loss from discontinued operations of $10.6 ($8.0 after tax, or $0.04 per share) was recorded in the third quarter primarily to increase our existing liability for retained environmental remediation obligations related to production facilities in the atmospheric emulsions and global pressure-sensitive adhesives businesses, which were sold in 2008.

Refer to the "Piedmont" discussion under Note 19, Commitments and Contingencies , for additional information.

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

Refer to the "Pace" discussion under Note 19, Commitments and Contingencies , for additional information.

Net Income (Loss)

Net loss was $354.4 for fiscal year 2025 compared to net income of $3.9 billion in the prior year.

The loss in fiscal year 2025 was primarily attributable to after-tax charges for business and asset actions, which totaled $3.0 billion in fiscal year 2025 compared to $44 in the prior year.

Additionally, fiscal year 2024 included a $1.2 billion after-tax gain recognized from the sale of the LNG business in September 2024.

Adjusted EBITDA

Adjusted EBITDA of $5.1 billion increased 1%, or $30.1, as higher pricing and productivity improvements were partially offset by lower volumes and fixed-cost inflation.

Effective Tax Rate

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

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.

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.

The effective tax rate equals the income tax expense (benefit) divided by income or loss before taxes.

Equity affiliates' income is primarily included net of income taxes within income before taxes on our consolidated income statements.

For the fiscal year ended 30 September 2025, our consolidated income statements include an income tax benefit of $94.3 compared to an income tax expense of $944.9 for the comparative prior-year period.

The tax benefit in fiscal year 2025 represents an effective tax rate of 21.4% on the pre-tax loss reported for the fiscal year ended 30 September 2025 compared to an effective rate of 19.6% for tax expense on the pre-tax income reported for the fiscal year ended 30 September 2024.

The current year rate was primarily impacted by charges for business and asset actions and other items as further discussed below.

Our estimates related to these items reflect our best judgment based on information available as of 30 September 2025.

The amount and timing of final settlement of these items may differ from our current estimates, which could impact our tax provision in future periods.

Our prior year effective tax rate included impacts from the $1.6 billion gain on the sale of the 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.

For additional information, refer to Note 24, Income Taxes , to the consolidated financial statements.

Business and Asset Actions

In fiscal year 2025, we recorded charges for project exits and other cost reduction measures as described in Note 5, Business and Asset Actions , to the consolidated financial statements.

These actions resulted in a pre-tax charge of approximately $3.7 billion.

The related net tax benefit of these actions totaled $695.2, which includes an $11.3 cost for reserves established for uncertain tax positions related to the deductibility of the amount of the charges incurred in foreign subsidiaries.

We also recorded a net tax cost of $197.4 resulting from a $364.9 increase in our valuation allowance net of $167.5 of deferred tax assets related to the future disposal of certain foreign subsidiaries.

Tax Reform Adjustment Related to Deemed Foreign Dividends

During the second quarter of fiscal year 2025, we recorded a net income tax benefit of $34.9 related to our intent to file a refund claim after a review of several U.S.

Tax Court cases regarding the U.S.

taxation of deemed foreign dividends in the transition year of the U.S.

Tax Cuts and Jobs Act (our fiscal year 2018).

Tax on Repatriation of Foreign Earnings

During the second quarter of fiscal year 2025, we recorded an income tax expense of $31.4 related to estimated withholding taxes on foreign earnings that we no longer intend to indefinitely reinvest.

There were no other significant changes to our assumptions regarding the reinvestment of foreign earnings during fiscal year 2025.

Shareholder Activism-Related Costs

During fiscal year 2025, we recorded costs of $86.3 related to a proxy contest as further discussed in Note 25, Supplemental Information , to the consolidated financial statements.

We recognized an income tax benefit of $14.6 primarily related to costs for legal and other professional service fees as well as incremental proxy solicitation costs related to the 2025 Annual Meeting of Shareholders.

In addition to the items discussed above, our effective tax rate was higher in fiscal year 2025 due to lower tax benefits on U.S.

export income in fiscal year 2025, higher net costs on foreign-related income taxed in the U.S, and an income tax benefit for a tax election related to a non-U.S.

subsidiary that occurred in our prior fiscal year but did not recur in fiscal year 2025.

These increases were partially offset by larger benefits in fiscal year 2025 for the release of unrecognized tax benefits upon expiration of the applicable statute of limitations.

Adjusted Effective Tax Rate

Our adjusted effective tax rate, which excludes the impact of the business and asset actions described above as well as other adjustments in the "Reconciliations of Non-GAAP Financial Measures" section beginning on page 42 , was 18.2% and 17.8% for the fiscal years ended 30 September 2025 and 2024, respectively.

On 4 July 2025, H.R.1, commonly referred to as the One Big Beautiful Bill Act ("OBBBA"), was enacted in the United States.

OBBBA includes a broad range of tax reform provisions, including extending and modifying certain key U.S.

Tax Cuts and Jobs Act provisions (both domestic and international), expanding certain Inflation Reduction Act incentives, and accelerating the phase-out of others.

OBBBA did not have a material impact on our fiscal year 2025 results and is expected to primarily affect future fiscal years.

While OBBBA revised certain Inflation Reduction Act incentives, we continue to anticipate future benefits from tax credits related to certain clean hydrogen production projects, where construction has begun or is expected to begin prior to the applicable phase-out dates.

DISCUSSION OF RESULTS BY BUSINESS SEGMENT

Fiscal Year Ended 30 September 2025 2024 $ %/bp

GAAP Measures

Sales $5,125.9 $5,040.1 $85.8 2%

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Equity affiliates’ income $157.0 $158.8 ($1.8) (1%)

Non-GAAP Measure

Adjusted EBITDA 2,408.7 2,423.2 (14.5) (1%)

Adjusted EBITDA margin 48.1 % 40.9 % 720 bp

The table below summarizes the major factors that impacted sales in the Americas segment for the periods presented:

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Total Americas Sales Change 2 %

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.

Sales of $5.1 billion increased 2%, or $85.8, as higher energy cost pass-through to customers of 4% and higher pricing of 2% were partially offset by lower volumes of 3% and an unfavorable currency impact of 1%.

Higher energy cost pass-through to customers was primarily attributable to higher natural gas prices.

The overall pricing improvement reflects a 3% increase in our merchant business, which was driven by non-helium product lines.

Volumes were unfavorable primarily due to lower on-sites, driven by previously announced project exits and the impact of a one-time asset sale in the prior year related to a customer-initiated early contract termination.

Lower helium demand also contributed to the volume decline, despite a significant, non-recurring helium sale to an existing merchant customer in the first quarter.

These headwinds were partially offset by a favorable one-time customer contract amendment in the second quarter of fiscal year 2025.

Operating income of $1.5 billion decreased 3%, or $45.5, due to higher costs of $92 and unfavorable currency of $10, partially offset by positive pricing, net of power and fuel costs, of $41 and favorable business mix of $15.

The increase in costs was mainly driven by higher depreciation, maintenance, and fixed-cost inflation, partially offset by productivity improvements.

Additionally, income recognized from the sale of an equity method investment in the first quarter of fiscal year 2025 was largely offset by a favorable legal settlement recorded in the prior year.

Operating margin of 29.6% decreased 150 bp from 31.1% in the prior year as the margin impacts of higher costs and higher energy cost pass-through to customers were partially offset by favorable business mix.

Approximately 100 bp of the decline was attributable to higher energy cost pass-through.

Equity affiliates’ income of $157.0 decreased 1%, or $1.8, driven by our share of income from an asset sale in the prior year, partially offset by higher income from an affiliate in Mexico.

Fiscal Year Ended 30 September 2025 2024 $ %/bp

GAAP Measures

Sales $3,271.0 $3,224.3 $46.7 1%

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Equity affiliates’ income $42.3 $32.9 $9.4 29%

Non-GAAP Measure

Adjusted EBITDA 1,412.3 1,363.1 49.2 4%

Adjusted EBITDA margin 42.3 % 42.6 % (30 bp)

The table below summarizes the major factors that impacted sales in the Asia segment for the periods presented:

Energy cost pass-through to customers 2 %

Currency (2 %)

Total Asia Sales Change 1 %

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.

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.

Sales of $3.3 billion increased 1%, or $46.7, as higher energy cost pass-through to customers of 2% was partially offset by lower pricing of 1%.

The overall pricing decrease reflects a 2% decline in our merchant business, primarily driven by lower helium pricing.

Volumes were flat, with growth in on-sites offset by lower demand for helium.

Operating income of $851.1 decreased 1%, or $8.1, primarily due to lower pricing, net of power and fuel costs, of $30 and unfavorable business mix of $23, partially offset by lower costs of $48.

The cost improvement was primarily attributable to productivity and lower maintenance costs, which was partially offset by higher costs related to incentive compensation and fixed-cost inflation.

Due to these factors, operating margin of 26.0% decreased 60 bp from 26.6% in the prior year.

Equity affiliates’ income of $42.3 increased 29%, or $9.4, driven by prior year maintenance expense at an affiliate in China as well as higher income from affiliates in Thailand in fiscal year 2025.

Fiscal Year Ended 30 September 2025 2024 $ %/bp

GAAP Measures

Sales $2,984.5 $2,823.4 $161.1 6%

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Equity affiliates’ income $101.9 $88.1 $13.8 16%

Non-GAAP Measure

Adjusted EBITDA 1,194.0 1,105.2 88.8 8%

Adjusted EBITDA margin 39.1 % 32.5 % 660 bp

The table below summarizes the major factors that impacted sales in the Europe segment for the periods presented:

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Total Europe Sales Change 6 %

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.

Sales of $3.0 billion increased 6%, or $161.1, due to higher pricing of 2%, a favorable currency impact of 2%, higher volumes of 1%, and higher energy cost pass-through to customers of 1%.

The overall pricing improvement reflects a 3% increase in our merchant business, which was driven by non-helium product lines.

The 1% volume growth was supported by higher on-site activity, partially offset by lower helium demand.

Operating income of $844.7 increased 4%, or $34.7, due to favorable pricing, net of power and fuel costs, of $42 and favorable currency of $14, partially offset by an unfavorable business mix of $13 and higher costs of $8.

Higher costs for depreciation and fixed-cost inflation were partially offset by productivity improvements.

Due to these factors, operating margin of 28.3% decreased 40 bp from 28.7% in the prior year.

Equity affiliates’ income of $101.9 increased 16%, or $13.8, driven by higher income from affiliates in Italy and South Africa.

Middle East and India

Fiscal Year Ended 30 September 2025 2024 $ %

GAAP Measures

Sales $135.9 $134.4 $1.5 1 %

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Equity affiliates’ income 340.9 347.5 (6.6) (2 %)

Non-GAAP Measure

Adjusted EBITDA 376.4 380.0 (3.6) (1 %)

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.

Sales of $135.9 increased 1%, or $1.5, primarily due to higher volumes.

Operating income of $9.6 increased 63%, or $3.7, primarily due to lower costs following the deconsolidation of Blue Hydrogen Industrial Gases Company ("BHIG") in the second quarter of fiscal year 2025, as well as productivity improvements.

Equity affiliates' income of $340.9 decreased 2%, or $6.6, driven by JIGPC.

Corporate and other

Fiscal Year Ended 30 September 2025 2024 $ %

GAAP Measures

Sales $520.0 $878.4 ($358.4) (41 %)

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Equity affiliates' income 12.4 20.4 (8.0) (39 %)

Non-GAAP Measure

Adjusted EBITDA (315.0) (225.2) (89.8) (40 %)

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.

Sales of $520.0 decreased 41%, or $358.4, and operating loss of $367.3 increased 25%, or $74.6, primarily due to the divestiture of the LNG business in September 2024.

Operating income generated by the LNG business in the prior year was approximately $135.

This headwind was partially offset by lower changes to sale of equipment project estimates and productivity improvements, net of fixed-cost inflation.

Equity affiliates' income of $12.4 decreased 39%, or $8.0, driven by lower contributions from an affiliate in Algeria.

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES

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generally accepted accounting principles ("GAAP"), on an "adjusted" or "non-GAAP" basis.

On a consolidated basis, these measures include adjusted diluted earnings per share ("EPS"), adjusted EBITDA, adjusted EBITDA margin, the adjusted effective tax rate, and capital expenditures.

On a segment basis, these measures include adjusted EBITDA and adjusted EBITDA margin.

In addition to these measures, we also present certain supplemental non-GAAP financial measures to help the reader understand the impact that certain disclosed items, or "non-GAAP adjustments," have on the calculation of our adjusted diluted EPS.

On a consolidated basis, these measures include adjusted operating income, adjusted operating margin, adjusted earnings per share ("EPS"), adjusted EBITDA, the adjusted effective tax rate, and capital expenditures.

On a segment basis, we present adjusted EBITDA.

For each non-GAAP financial measure, we present a reconciliation to the most directly comparable financial measure calculated in accordance with GAAP.

We provide these non-GAAP financial measures to allow investors, potential investors, securities analysts, and others to evaluate the performance of our business in the same manner as our management.

We believe these measures, when viewed together with financial results computed in accordance with GAAP, provide a more complete understanding of the factors and trends affecting our historical financial performance and projected future results.

However, we caution readers not to consider these measures in isolation or as a substitute for the most directly comparable measures calculated in accordance with GAAP.

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.

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.

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These tax impacts are primarily driven by the statutory tax rate of the various relevant jurisdictions and the taxability of the adjustments in those jurisdictions.

We provide these non-GAAP financial measures to allow investors, potential investors, securities analysts, and others to evaluate the performance of our business in the same manner as our management.

However, we caution readers not to consider these measures in isolation or as a substitute for the most directly comparable measures calculated in accordance with GAAP.

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.

ADJUSTED DILUTED EPS

The table below provides a reconciliation to the most directly comparable GAAP measure for each of the major components used to calculate adjusted diluted EPS from continuing operations, which we view as a key performance metric.

In periods that we have non-GAAP adjustments, we believe it is important for the reader to understand the per share impact of each such adjustment because management does not consider these impacts when evaluating underlying business performance.

Per share impacts are calculated independently and may not sum to total diluted EPS and total adjusted diluted EPS due to rounding.

2023 Operating Income Equity Affiliates' Income Other Non-Operating Income/Expense, Net Income Tax Provision Net Income Attributable to Air Products Diluted EPS

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

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

$ Change GAAP $6.94

% Change GAAP 67 %

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

ADJUSTED OPERATING INCOME AND ADJUSTED EPS

In addition to adjusted EPS, adjusted operating income is an important measure to evaluate our business performance following the appointment of our new Chief Executive Officer in February 2025.

The table below presents a reconciliation of adjusted operating income to the most directly comparable GAAP measure, along with reconciliations for each major component used in the calculation of adjusted EPS.

In periods that we have non-GAAP adjustments, we believe it is important for readers to understand the impact of each adjustment as management excludes these items when assessing the Company's underlying performance.

Per share amounts are calculated and presented on a diluted basis from continuing operations attributable to Air Products.

These amounts are computed independently and may not sum to totals due to rounding.

Because we reported a loss from operations for fiscal year 2025, GAAP loss per share is calculated using the basic weighted average share count of 222.7 million, which does not consider outstanding share-based awards due to their anti-dilutive effect.

Both adjusted earnings per share and the individual adjustments used in its calculation are based on a diluted weighted average share count of 222.9 million.

Income Other Non-

Inc/Exp, Net Income Tax

Expense Net Income/Loss Attributable to Air Products Earnings/

Loss per Share

($877.0) $647.7 $2.6 ($94.3) ($386.5) ($1.74)

4,466.1 647.7 (73.8) 944.9 3,842.1 17.24

$ GAAP Change ($5,343.1) ($18.98)

% GAAP Change ** **

FY2025 GAAP Measures

($877.0) $647.7 $2.6 ($94.3) ($386.5) ($1.74)

Business and asset actions (A)

3,747.0 6.8 — 695.2 3,047.9 13.68

Shareholder activism-related costs 86.3 — — 14.6 71.7 0.32

Gain on sale of business (67.3) — — (15.4) (51.9) (0.23)

Business and asset actions 57.0 — — 13.2 43.8 0.20

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

Gain on sale of other assets (B)

(31.3) — — (7.5) (23.8) (0.11)

Gain on de-designation of cash flow hedges (c)

— — (27.0) (2.2) (7.2) (0.03)

Non-service pension cost, net — — 45.0 11.3 33.7 0.15

2024 Non-GAAP ("Adjusted")

Tax reform adjustment related to deemed foreign dividends — — — 34.9 (34.9) (0.16)

Tax on repatriation of foreign earnings — — — (31.4) 31.4 0.14

FY2025 Adjusted Measures

$2,857.7 $654.5 $20.6 $605.2 $2,680.4 $12.03

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

Business and asset actions (B)

FY2024 GAAP Measures

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

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 (C)

— — 16.3 1.4 4.3 0.02

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

2023 Non-GAAP ("Adjusted")

FY2024 Adjusted Measures

$2,947.5 $647.7 $44.5 $607.5 $2,768.6 $12.43

$ Change Non-GAAP ("Adjusted") $0.92

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

(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 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.

Margins are calculated independently for each period by dividing each line item by consolidated sales for the respective period and may not sum to total margin due to rounding.

The tables below present consolidated sales and a reconciliation of net income on a GAAP basis to adjusted EBITDA and net income margin on a GAAP basis to adjusted EBITDA margin:

$ Margin $ Margin

Sales $12,100.6 $12,600.0

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

(Loss) Income from discontinued operations, net of tax

$ Adjusted Change ($89.8) ($0.40)

% Adjusted Change (3%) (3%)

(A) Charge attributable to noncontrolling interests was $10.7.

(B) Reflected on the fiscal year 2025 consolidated income statement in "Other income (expense), net."

Loss attributable to noncontrolling interests was $10.6 in fiscal year 2024.

** Change versus prior period is not meaningful due to charges for business and asset actions recorded in fiscal year 2025.

ADJUSTED OPERATING MARGIN

The table below reconciles GAAP operating margin to adjusted operating margin, illustrating the impact of non-GAAP adjustments on our reported margins.

Margins are calculated independently for each period by dividing each line item by consolidated sales for the respective period.

As a result, individual components may not sum to totals due to rounding.

Operating Income/Loss Operating Margin

($877.0) (7.3 %)

4,466.1 36.9 %

$ GAAP Change ($5,343.1)

%/bp GAAP Change ** **

FY2025 GAAP Measures

($877.0) (7.3 %)

Business and asset actions

3,747.0 31.1 %

Shareholder activism-related costs 86.3 0.7 %

Gain on sale of business (67.3) (0.6 %)

Gain on sale of other assets

(31.3) (0.3 %)

FY2025 Adjusted Measures

$2,857.7 23.7 %

FY2024 GAAP Measures

$4,466.1 36.9 %

Gain on sale of business (1,575.6) (13.0 %)

Business and asset actions 57.0 0.5 %

FY2024 Adjusted Measures

$2,947.5 24.4 %

$ Adjusted Change ($89.8)

%/bp Adjusted Change (3 %) (70 bp)

** Change versus prior period is not meaningful due to charges for business and asset actions recorded in fiscal year 2025.

ADJUSTED EBITDA

We define adjusted EBITDA as net income or loss 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 expense (benefit), and depreciation and amortization expense.

Adjusted EBITDA provides a useful metric for management to assess operating performance on both a consolidated and a segment basis.

The tables below present a reconciliation of consolidated net income on a GAAP basis to consolidated adjusted EBITDA:

Net income (loss) ($354.4) $3,862.4

Loss from discontinued operations, net of tax (8.0) (13.9)

Interest expense 214.0 218.8

Other non-operating income (expense), net 2.6 (73.8)

Income tax provision 944.9 7.8 % 551.2 4.4 %

Income tax expense (benefit) (94.3) 944.9

Depreciation and amortization 1,564.2 1,451.1

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

Business and asset actions 3,747.0 57.0

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

Shareholder activism-related costs 86.3 —

Gain on sale of business 67.3 1,575.6

Gain on sale of other assets 31.3 —

Equity method investment impairment associated with business and asset actions 6.8 —

Adjusted EBITDA $5,076.4 $5,046.3

Net income $ change ($4,216.8)

Net income % change **

Net income margin change 1,330 bp

Change Non-GAAP

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Adjusted EBITDA % change 1%

Adjusted EBITDA margin change 440 bp

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:

** Change versus prior period is not meaningful due to charges for business and asset actions recorded in fiscal year 2025.

The tables below present a reconciliation of operating income (loss) by segment to adjusted EBITDA by segment for the fiscal years ended 30 September 2025 and 2024:

Fiscal Year Ended 30 September 2025 2024 $ %/bp

Sales $5,040.1 $5,369.3 ($329.2) (6 %)

Operating income $1,519.6 $1,565.1 (45.5) (3 %)

Operating margin 31.1 % 26.8 % 430 bp

Reconciliation of GAAP to Non-GAAP:

Operating income $1,565.1 $1,439.7

Depreciation and amortization 732.1 699.3

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Adjusted EBITDA $2,408.7 $2,423.2 ($14.5) (1 %)

Adjusted EBITDA margin 48.1 % 40.9 % 720 bp

Fiscal Year Ended 30 September 2025 2024 $ %/bp

Sales $3,224.3 $3,216.1 $8.2 — %

Operating income $851.1 $859.2 (8.1) (1 %)

Operating margin 26.6 % 28.2 % (160) bp

Reconciliation of GAAP to Non-GAAP:

Operating income $859.2 $906.5

Depreciation and amortization 518.9 471.0

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Adjusted EBITDA $1,412.3 $1,363.1 $49.2 4 %

Adjusted EBITDA margin 42.3 % 42.6 % (30) bp

Fiscal Year Ended 30 September 2025 2024 $ %/bp

Sales $2,823.4 $2,963.1 ($139.7) (5 %)

Operating income $844.7 $810.0 34.7 4 %

Operating margin 28.7 % 22.4 % 630 bp

Reconciliation of GAAP to Non-GAAP:

Operating income $810.0 $663.4

Depreciation and amortization 247.4 207.1

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Adjusted EBITDA $1,194.0 $1,105.2 $88.8 8 %

Adjusted EBITDA margin 39.1 % 32.5 % 660 bp

Middle East and India

Fiscal Year Ended 30 September 2025 2024 $ %/bp

Sales $134.4 $162.5 ($28.1) (17 %)

Operating income $9.6 $5.9 3.7 63 %

Reconciliation of GAAP to Non-GAAP:

Operating income $5.9 $16.9

Depreciation and amortization 25.9 26.6

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Fiscal Year Ended 30 September 2025 2024 $ %/bp

Sales $878.4 $889.0 ($10.6) (1 %)

Operating loss ($367.3) ($292.7) (74.6) (25 %)

Reconciliation of GAAP to Non-GAAP:

Operating loss ($292.7) ($287.3)

Depreciation and amortization 39.9 47.1

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ADJUSTED EFFECTIVE TAX RATE

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

The effective tax rate equals the income tax expense (benefit) divided by income or loss from continuing operations before taxes.

We calculate our adjusted effective tax rate by adjusting the numerator and denominator to exclude the tax and before tax impacts of our non-GAAP adjustments, respectively.

1 unchanged sentence

Fiscal Year Ended 30 September 2025 2024

Income tax provision $944.9 $551.2

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

Income tax expense (benefit) ($94.3) $944.9

Income (loss) from continuing operations before taxes (440.7) 4,821.2

Effective tax rate 21.4 % 19.6 %

Income tax provision $944.9 $551.2

Adjustments for tax impacts on disclosed items:

Gain on sale of business

Reconciliation of GAAP to Non-GAAP:

Income tax expense (benefit) ($94.3) $944.9

Business and asset actions tax impact 695.2 13.2

Shareholder activism-related costs tax impact 14.6 —

Gain on sale of business tax impact (15.4) (377.2)

Gain on sale of other assets tax impact (7.5) —

(Gain) Loss on de-designation of cash flow hedges tax impact (2.2) 1.4

Non-service pension cost, net tax impact 11.3 25.2

Tax reform adjustment related to deemed foreign dividends 34.9 —

Tax on repatriation of foreign earnings (31.4) —

Adjusted income tax expense $605.2 $607.5

Income (loss) from continuing operations before taxes ($440.7) $4,821.2

Business and asset actions 3,747.0 57.0

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

Adjustments for pre-tax impacts of disclosed items:

Shareholder activism-related costs 86.3 —

Gain on sale of business (67.3) (1,575.6)

Business and asset actions 57.0 244.6

Loss on de-designation of cash flow hedges 16.3 —

Gain on sale of other assets (31.3) —

(Gain) Loss on de-designation of cash flow hedges (27.0) 16.3

Non-service pension cost, net 45.0 102.0

Business and asset actions-equity method investment 6.8 —

Adjusted income from continuing operations before taxes $3,318.8 $3,420.9

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Capital expenditures is a non-GAAP financial measure that we define as the sum of cash flows for additions to plant and equipment, including long-term deposits, acquisitions (less cash acquired), investment in and advances to unconsolidated affiliates, and investment in financing receivables on our consolidated statements of cash flows.

Additionally, we adjust additions to plant and equipment to exclude NEOM Green Hydrogen Company (“NGHC”) expenditures funded by the joint venture's non-recourse project financing as well as our partners’ equity contributions to arrive at a measure that we believe is more representative of our investment activities.

Substantially all the funding we provide to NGHC is limited for use by the venture for capital expenditures.

Additionally, we adjust additions to plant and equipment to exclude NEOM Green Hydrogen Company (“NGHC”) expenditures funded by the joint venture's project financing, which is non-recourse to Air Products, as well as our partners’ equity contributions to arrive at a measure that we believe is more representative of our investment activities.

Substantially all the funding we provide to NGHC is limited for use by the venture for its capital expenditures.

A reconciliation of cash used for investing activities to our reported capital expenditures is provided below:

2 unchanged sentences

Proceeds from sale of assets and investments 245.8 1,878.8

Purchases of investments (141.4) (640.1)

Proceeds from investments 470.7 897.0

Other investing activities 72.4 4.8

Purchases of short-term investments (117.6) (141.4)

Proceeds from short-term investments 122.5 470.7

Proceeds from other investing activities 115.4 72.4

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

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LIQUIDITY AND CAPITAL RESOURCES

We believe we have sufficient cash, cash flows from operations, and funding sources to meet our liquidity needs.

As further discussed in the "Cash Flows From Financing Activities" section below, we have the ability to raise capital through a variety of financing activities, including accessing capital or commercial paper markets or drawing upon our credit facilities.

As of 30 September 2024, we had $1,571.3 of foreign cash and cash items compared to total cash and cash items of $2,979.7.

We do not expect that a significant portion of the earnings of our foreign subsidiaries and affiliates will be subject to U.S.

income tax upon repatriation to the U.S.

Depending on the country in which the subsidiaries and affiliates reside, the repatriation of these earnings may be subject to foreign withholding and other taxes.

However, since we have significant current investment plans outside the U.S., it is our intent to permanently reinvest the majority of our foreign cash and cash items that would be subject to additional taxes outside the U.S.

We believe we have sufficient cash, cash flows from operations, and access to funding sources to meet our liquidity needs.

As further discussed in the "Cash Flows From Financing Activities" section on page 52 , we are able to raise capital through a variety of financing activities, including accessing capital or commercial paper markets or drawing upon our credit facilities.

As of 30 September 2025, we had $1.4 billion of foreign cash and cash items, compared to total cash and cash items of $1.9 billion.

We do not expect a significant portion of the earnings from our foreign subsidiaries and affiliates to be subject to U.S.

income tax upon repatriation.

Depending on the country in which these entities operate, repatriation of earnings may be subject to foreign withholding and other taxes.

However, we intend to indefinitely reinvest the majority of our foreign cash and cash items that would be subject to additional taxes outside the U.S.

Cash Flows From Operations

Fiscal Year Ended 30 September 2025 2024

Net income from continuing operations attributable to Air Products $3,842.1 $2,292.8

Adjustments to reconcile income to cash provided by operating activities:

Net income (loss) from continuing operations attributable to Air Products ($386.5) $3,842.1

Adjustments to reconcile net income (loss) to cash provided by operating activities:

Depreciation and amortization 1,564.2 1,451.1

Deferred income taxes (554.8) (69.3)

Gain on sale of business (1,575.6) —

Tax reform repatriation (34.9) —

Business and asset actions 3,747.0 57.0

Gain on sale of business (67.3) (1,575.6)

Undistributed earnings of equity method investments (269.8) (206.0)

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Other adjustments 48.0 183.8

Working capital changes that provided (used) cash, excluding effects of acquisitions:

Trade receivables (111.0) 130.7

Inventories (137.8) (129.4)

Other receivables 34.4 (93.8)

Payables and accrued liabilities (338.7) (213.3)

Other working capital 370.1 (119.0)

Changes in working capital accounts (851.6) (183.0)

Cash Provided by Operating Activities $3,256.8 $3,646.7

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.

In fiscal year 2025, cash provided by operating activities was $3.3 billion.

Charges for business and asset actions totaled $3.7 billion, primarily driven by project exit costs as described in Note 5, Business and Asset Actions , to the consolidated financial statements.

The adjustment for deferred income taxes of $554.8 was largely attributable to tax impacts associated with these costs.

Working capital accounts in fiscal year 2025 resulted in a net use of cash of $851.6, including $562.6 of other working capital driven by accrued income taxes.

In fiscal year 2025, we made approximately $395 in tax payments related to the prior year sale of the LNG business.

Payables and accrued liabilities were a use of cash of $224.0, primarily due to payments for contract terminations associated with our business and asset actions and previously accrued severance actions under our global cost reduction plan.

In fiscal year 2024, cash provided by operating activities totaled $3.6 billion.

This included a $1.6 billion gain related to the sale of the LNG business as discussed in Note 4, Gain on Sale of Business , to the consolidated financial statements.

Business and asset actions of $57.0 reflected expenses recognized for severance and other benefits associated with our global cost reduction plan.

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

The impacts associated with our operating leases are reflected within "Other adjustments," which included a lump-sum payment of $209 for a land lease associated with the NGHC joint venture.

Working capital accounts resulted in a net use of cash of $424.8.

The use of cash of $213.3 within payables and accrued liabilities primarily resulted from lower prices for the purchase of natural gas, a decrease in value of derivatives that hedge intercompany loans, and payments for incentive compensation under the fiscal year 2022 plan.

Inventories resulted in a use of cash of $129.4 primarily due to additional packaged gases inventory, including helium.

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.

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

Working capital changes in fiscal year 2024 resulted in a net use of cash of $183.0.

A use of cash of $338.7 within payables and accrued liabilities primarily resulted from a reduction in customer advances for sale of equipment projects as revenue was recognized, along with payments related to previously accrued severance actions and incentive compensation under the fiscal year 2023 plan.

An inventory-related cash use of $137.8 was largely attributable to helium purchases.

A use of cash of $111.0 from trade receivables was primarily due to the timing of collections.

Offsetting these uses, other working capital provided a source of cash of $370.1, largely driven by the timing of income tax payments related to the LNG business sale.

As noted above, tax payments associated with the LNG sale were remitted in fiscal year 2025.

Cash Flows From Investing Activities

1 unchanged sentence

Additions to plant and equipment, including long-term deposits ($7,022.6) ($6,796.7)

Acquisitions, less cash acquired (59.9) —

Investment in and advances to unconsolidated affiliates (390.4) —

1 unchanged sentence

Proceeds from sale of assets and investments 245.8 1,878.8

Purchases of investments (141.4) (640.1)

Proceeds from investments 470.7 897.0

Other investing activities 72.4 4.8

Purchases of short-term investments (117.6) (141.4)

Proceeds from short-term investments 122.5 470.7

Proceeds from other investing activities 115.4 72.4

Cash Used for Investing Activities ($7,168.7) ($4,919.2)

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.

In fiscal year 2025, cash used for investing activities was $7.2 billion.

The primary use of cash was $7.0 billion for additions to plant and equipment, including long-term deposits, of which approximately $3 billion related to the NEOM Green Hydrogen Project.

Additional uses included investments in and advances to unconsolidated affiliates of $390.4, investments in financing receivables of $61.9, and cash paid for acquisitions, net of cash acquired, of $59.9.

These activities are further detailed in the "Capital Expenditures" section on page 51 .

Cash proceeds of $245.8 from sales of assets and investments primarily included $104.3 from the sale of a subsidiary in Singapore and $37.7 for the sale of a regional office in Hersham, England, as further described in Note 6, Acquisitions and Divestitures , to the consolidated financial statements.

Maturities of short-term investments provided cash of $122.5, which exceeded purchases of $117.6.

In fiscal year 2024, cash used for investing activities was $4.9 billion.

The primary use of cash was $6.8 billion for additions to plant and equipment, including long-term deposits, and investments in financing receivables of $403.0.

Additional information regarding the investments in financing receivables is provided in the "Capital Expenditures" section on page 51 .

Proceeds from the sale of assets and investments totaled $1.9 billion and primarily related to the sale of the LNG business in September 2024.

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.

Refer to the " Capital Expenditures " section below for further detail.

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

Capital Expenditures

Maturities of short-term investments provided cash of $470.7, which exceeded purchases of $141.4.

Capital Expenditures (Non-GAAP Financial Measure)

The components of our capital expenditures are detailed in the table below.

Refer to page 42 for a definition of this non-GAAP measure as well as a reconciliation to cash used for investing activities.

Refer to page 48 for a definition of this non-GAAP financial measure as well as a reconciliation to cash used for investing activities.

Fiscal Year Ended 30 September 2025 2024

Additions to plant and equipment, including long-term deposits $7,022.6 $6,796.7

Investment in and advances to unconsolidated affiliates (A)

Acquisitions, less cash acquired 59.9 —

Investment in and advances to unconsolidated affiliates 390.4 —

Investment in financing receivables 61.9 403.0

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

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

(2,470.7) (2,047.7)

Capital Expenditures $5,064.1 $5,152.0

(A) Includes contributions from noncontrolling partners in consolidated subsidiaries as discussed below.

(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.

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

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.

(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.

Capital expenditures totaled $5.1 billion in fiscal year 2025, a 2% decrease from capital expenditures of $5.2 billion in fiscal year 2024.

Spending in fiscal year 2025 was driven by $7.0 billion in additions to plant and equipment, primarily supporting our clean energy initiatives, including the NEOM Green Hydrogen Project in NEOM City, Saudi Arabia, and clean energy complexes in Louisiana, United States, and Alberta, Canada.

We also continued to invest in our core industrial gases business, funding the development of new plants and the maintenance and replacement of existing facilities.

The $390.4 investment in and advances to unconsolidated affiliates in fiscal year 2025 included approximately $238 related to BHIG and approximately $115 for our final investment in the JIGPC joint venture.

Additional information regarding these affiliates is provided in Note 6, Acquisitions and Divestitures , and Note 10, Equity Affiliates , to the consolidated financial statements.

The $61.9 investment in financing receivables related to the financing arrangement for the natural gas-to-syngas processing facility in Uzbekistan.

Additional details regarding this arrangement are provided in Note 6, Acquisitions and Divestitures , to the consolidated financial statements.

In the prior year, the $403.0 investment in financing receivables included approximately $120 associated with the Uzbekistan arrangement, with the remaining amount related to the purchase of renewable fuel assets from World Energy.

As discussed in Note 3, Variable Interest Entities , to the consolidated financial statements, we exited the World Energy sustainable aviation fuel project in fiscal year 2025.

Cash paid for acquisitions, net of cash acquired, totaled $59.9 in fiscal year 2025 and was paid at the closing of our acquisition of an independent industrial gases company in Belgium.

Outlook for Investing Activities

It is not possible, without unreasonable efforts, to reconcile our forecasted capital expenditures to future cash used for investing activities because we are unable to identify the timing or occurrence of our future investment activity, which is driven by our assessment of competing opportunities at the time we enter into transactions.

It is not possible, without unreasonable efforts, to reconcile our forecasted capital expenditures to future cash used for investing activities because management is unable to identify the timing or occurrence of our future investment activity, which is driven by our assessment of competing opportunities at the time we enter into transactions.

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 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.

Accordingly, management is unable to fully reconcile, without unreasonable efforts, our forecasted capital expenditures to future cash used for investing activities.

We expect capital expenditures for fiscal year 2026 to be approximately $4 billion, reflecting continued investment in our energy transition projects, traditional industrial gas projects, and maintenance within our core business.

Approximately $1 billion is expected to be dedicated to traditional industrial gas projects.

We anticipate funding these expenditures through our existing cash balance and cash generated from continuing operations.

We also have access to capital and money market financing as well as other sources of funding as discussed in the "Financing and Capital Structure" section on page 52 .

Cash Flows From Financing Activities

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Payments on long-term debt (429.9) (486.2)

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

Net decrease in commercial paper and short-term borrowings

(74.7) (289.9)

Dividends paid to shareholders (1,584.1) (1,564.9)

4 unchanged sentences

Cash Provided by Financing Activities $2,795.2 $2,615.4

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

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.

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

These proceeds were partially offset by financing fees of approximately $112.0, which are reflected within "Other financing activities".

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

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.

In fiscal year 2025, cash provided by financing activities was $2.8 billion .

The primary source of cash was long-term debt proceeds of $4.4 billion , which included $ 2.7 billion from Euro- and U.S.

Dollar-denominated senior fixed-rate notes issued in February and June 2025.

Net proceeds from the notes were used to repay commercial paper obligations, including those incurred prior to the closing of the February 2025 O ffering that were used to repay €300 million (approximately $311) aggregate principal amount outstanding of our 1.000% Euro-denominated senior fixed-rate notes at maturity, plus accrued interest, and for general corporate purposes.

An additional $1.6 billion in long-term debt proceeds was provided through project financing available to the NGHC joint venture, as further discussed on page 53 .

Separately, we received $594.6 in contributions from noncontrolling interests, primarily related to NGHC.

These sources of cash were partially offset by dividend payments to shareholders of $1.6 billion.

In fiscal year 2024, cash provided by financing activities was $2.6 billion.

The primary source of cash was long-term debt proceeds of $4.7 billion, which included $2.5 billion from green senior notes issued during the second quarter of fiscal year 2024 through U.S.

Dollar-denominated fixed-rate offerings.

In line with our Green Finance Framework, we allocated the net proceeds to finance or refinance, in whole or in part, projects expected to deliver environmental benefits, such as pollution prevention and control, renewable energy generation and procurement, and sustainable aviation fuel.

Additionally, the NGHC joint venture borrowed approximately $2.0 billion from project financing in fiscal year 2024.

These proceeds were partially offset by financing fees of approximately $112.0, which were reflected within "Other financing activities." W e also received $ 428.5 in contributions from noncontrolling interests.

Cash proceeds from financing activities in fiscal year 2024 were partially offset by dividend payments to shareholders of $1.6 billion, payments on long-term debt of $486.2, and net decreases in commercial paper and short-term borrowings of $289.9.

Financing and Capital Structure

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.

Total debt increased to $17.7 billion as of 30 September 2025 from $14.2 billion as of 30 September 2024.

We issued Euro- and U.S.

Dollar-denominated senior fixed-rate notes in February and June 2025, which together had a combined carrying value of $2.9 billion as of 30 September 2025.

Total debt also increased due to approximately $1.6 billion in incremental borrowings under the project financing arrangement related to the NEOM Green Hydrogen Project, which is nonrecourse to Air Products, as further discussed on page 53 .

Total debt included related party debt of $236.5 and $304.4 as of 30 September 2025 and 2024, respectively.

Subsequent to the balance sheet date, we repaid at maturity $550.0 aggregate principal amount of our 1.50% senior notes due October 2025, plus accumulated and unpaid interest through the maturity date.

Various debt agreements to which we are a party include financial covenants and other restrictions, including restrictions pertaining to the ability to create property liens and enter into certain sale and leaseback transactions.

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

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

We also have credit facilities available to certain of our foreign subsidiaries totaling $1,223.9, of which $1,129.0 was borrowed and outstanding as of 30 September 2024.

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

As of 30 September 2025, we were in compliance with all the financial and other covenants under our debt agreements.

Committed Credit Facilities

During the second quarter of fiscal year 2025, we refinanced our existing 364-day $500 revolving credit agreement to extend its maturity date from 27 March 2025 to 26 March 2026 (the “364-Day Credit Agreement”).

All other terms remain consistent with the original 364-Day Credit Agreement, including our ability to convert the facility into a term loan maturing 26 March 2027.

Fees incurred in connection with the refinancing were not material.

We also maintain a five-year $3.0 billion revolving credit agreement that matures on 31 March 2029 (the “Five-Year Credit Agreement”).

Both the 364-Day Credit Agreement and the Five-Year Credit Agreement are syndicated committed facilities that provide a source of liquidity and support our commercial paper program through the availability of senior unsecured debt to us and certain of our subsidiaries.

No borrowings were outstanding under either of the 364-Day Credit Agreement or the Five-Year Credit Agreement as of 30 September 2025 or 30 September 2024.

Separately, certain of our foreign subsidiaries maintain access to committed credit facilities with a combined maximum borrowing capacity of $394.0, all of which was borrowed and outstanding as of 30 September 2025.

The amount borrowed from available facilities as of 30 September 2024 was $1.1 billion, which included long-term borrowings of approximately $675 that were derecognized upon deconsolidation of BHIG during the second quarter of fiscal year 2025.

Refer to Note 6, Acquisitions and Divestitures , to the consolidated financial statements for additional information.

NEOM Green Hydrogen Project Financing

In May 2023, NGHC secured non-recourse project financing of approximately $6.1 billion, which is expected to fund approximately 73% of the NEOM Green Hydrogen Project and will be drawn over the construction period.

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

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.

To support the NEOM Green Hydrogen Project, NGHC has access to project financing of approximately $6.1 billion, which is expected to fund about 73% of the project and is being drawn over the construction period, as well as additional credit facilities totaling approximately $500 primarily for NGHC's working capital needs.

Creditors of NGHC do not have recourse to the general credit of Air Products.

As of 30 September 2025, the joint venture had borrowed short- and long-term principal amounts totaling $4.9 billion compared to $3.3 billion as of 30 September 2024.

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 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.

We believe that providing a consistent dividend plays a critical role in creating shareholder value.

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

We returned approximately $1.6 billion to shareholders in fiscal year 2025, an increase of 1% compared to the prior year, and we remain committed to continuing our history of dividend growth as part of our long-term capital allocation strategy.

Dividends are paid quarterly, usually during the sixth week after the close of the fiscal quarter.

On 18 July 2025, the Board of Directors declared a quarterly dividend of $1.79 per share that was payable on 10 November 2025 to shareholders of record at the close of business on 1 October 2025.

On 21 November 2024, the Board of Directors declared a quarterly dividend of $1.77 per share that is payable on 10 February 2025 to shareholders of record at the close of business on 2 January 2025.

Discontinued Operations

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

Additionally, on 19 November 2025, the Board of Directors declared a quarterly dividend of $1.79 per share that is payable on 9 February 2026 to shareholders of record at the close of business on 2 January 2026.

PENSION BENEFITS

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Net periodic cost was $66.0 and $123.8 in fiscal years 2025 and 2024, 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 decrease in costs versus the prior year was primarily attributable to non-service costs, which were driven by a 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.

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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Weighted average expected rate of compensation increase 3.5 % 3.5 %

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.

In fiscal year 2026, we expect to recognize pension expense of approximately $30 to $40, which includes approximately $10 to $20 of non-service related costs.

The lower non-service related costs are the result of higher expected return on plan assets from increases in the return assumption and a decrease in actuarial loss amortization.

In fiscal year 2025, we recognized net actuarial losses of $39.4 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.

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($67.7) ($44.3)

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.

The net unfunded liability of $67.7 as of 30 September 2025 increased $23.4 from $44.3 as of 30 September 2024, as the interest cost component of the net periodic pension cost was greater than decreases to the projected benefit obligation from actuarial gains due to higher discount rates.

Company Contributions

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Depreciable Lives of Plant and Equipment

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, net as of 30 September 2025 totaled approximately $25.3 billion, and depreciation expense totaled approximately $1.5 billion during fiscal year 2025.

Disclosures related to plant and equipment are included in Note 11, Plant and Equipment, net , to the consolidated financial statements.

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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Management monitors its assumptions and may potentially need to adjust depreciable life as circumstances change.

We continue to depreciate assets that are temporarily idle.

Depreciation is discontinued when assets meet the criteria for classification as held for sale.

Impairment of Assets

There were no triggering events in fiscal year 2024 that would require impairment testing for any of our asset groups, reporting units that contain goodwill, or indefinite-lived intangibles assets.

We completed our annual impairment tests for goodwill and other indefinite-lived intangible assets and concluded there were no indications of impairment.

Refer to the “ Impairment of Assets ” subsections below for additional detail.

As part of a project review initiated by our Board of Directors and Chief Executive Officer in fiscal year 2025, we made the decision to exit various projects, primarily related to clean energy generation and distribution.

As a result, we assessed the carrying values of the affected project assets against their estimated fair values.

Where carrying values exceeded fair values, we recorded impairment charges as described under “ Impairment of Assets:

Plant and Equipment ”.

The review also led to the recognition of an other-than-temporary impairment in one of our joint ventures, as discussed under " Impairment of Assets:

Equity Method Investments ".

No triggering events were identified in fiscal year 2025 that would require impairment testing for any of our reporting units containing goodwill or indefinite-lived intangible assets.

We completed our annual impairment tests for these assets and concluded there were no indications of impairment.

Refer to “ Impairment of Assets:

Goodwill ” and “ Impairment of Assets:

Intangible Assets ” for additional detail.

Impairment of Assets:

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Plant and equipment meeting the held for sale criteria are reported at the lower of carrying amount or fair value less cost to sell.

Plant and equipment to be disposed of other than by sale may be reviewed for impairment upon the occurrence of certain triggering events, such as unexpected contract terminations or unexpected foreign government-imposed restrictions or expropriations.

Plant and equipment to be disposed of other than by sale may be reviewed for impairment upon the occurrence of certain triggering events, such as decisions to discontinue or exit projects, unexpected contract terminations, or unforeseen foreign government-imposed restrictions or expropriations.

Plant and equipment held for use is grouped for impairment testing at the lowest level for which there is identifiable cash flows.

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We use reasonable and supportable assumptions when performing impairment reviews and cannot predict the occurrence of future events and circumstances that could result in impairment charges.

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

Accordingly, we assessed the recoverability of project assets and recorded a total impairment charge of approximately $2.5 billion in fiscal year 2025 to write down long-lived assets to their estimated value, depending on the intended manner of disposal.

For assets that met the held-for-sale criteria and are actively being marketed, observable market prices were not available.

As a result, fair value less cost to sell was estimated using various data points, including an offer to purchase the facility, amounts due from the customer if the customer was contractually required to repurchase the asset, and an internally-developed discounted cash flow analysis.

An impairment loss of $350.6 was recognized to reduce the long-lived assets held for sale to their estimated fair value, net of estimated selling costs, of $418.3 as of 30 September 2025.

We expect the sale of these assets to be completed during fiscal year 2026.

For plant and equipment that did not meet the held-for-sale criteria but is capable of being sold through secondary equipment markets, recoverability was evaluated using an orderly liquidation valuation approach.

An impairment loss of approximately $2.1 billion was recognized as the difference between the estimated liquidation value of $22.5 and the net book value of the assets as of 31 March 2025.

There have been no significant changes in the estimated net realizable value for the remaining assets as of 30 September 2025.

These estimates are considered critical because they involve significant assumptions regarding future cash flows, asset disposition strategies, and market conditions, all of which are subject to change and could materially affect the amount and timing of impairment charges.

Additionally, because the project review is ongoing, we may make further project-related decisions that could impact the intended use or recoverability of certain assets, potentially resulting in the recognition of additional impairment charges in future periods.

Other than the impairment charges recorded as discussed above, no additional asset groupings required impairment testing, as no other events or changes in circumstances indicated that their carrying amounts may not be recoverable.

Impairment of Assets:

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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.

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.

At the time of our fiscal year 2025 testing, we had five reportable business segments, six operating segments and 10 reporting units, eight of which included a goodwill balance.

Reporting units are primarily based on products and subregions within each reportable segment.

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

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

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.

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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.

Intangible assets, net with determinable lives as of 30 September 2025 totaled $258.4 and consisted primarily of customer relationships.

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

Impairment testing of the asset group occurs whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable.

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Equity Method Investments

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

Investments in and advances to equity affiliates totaled approximately $5.4 billion as of 30 September 2025.

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 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.

In fiscal year 2025, we determined there was an other-than-temporary impairment of a joint venture in China that had been established to develop clean hydrogen infrastructure in the region.

As a result, we recorded a charge of $6.8 to write down the full carrying value of the investment.

There were no other events or changes in circumstances that indicated the carrying amount of our equity method investments may not be recoverable, and therefore, no further impairment testing was required.

Revenue Recognition:

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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.

Changes in estimates on projects accounted for under the cost incurred input method unfavorably impacted operating income by approximately $175 in fiscal year 2024 and $115 in fiscal year 2023.

We assess the performance of our sale of equipment projects as they progress.

Our earnings could be positively or negatively impacted by changes to our contractual revenues and cost forecasts on these projects.

Changes to project revenue and cost estimates unfavorably impacted operating results by approximately $85 in fiscal year 2025.

Revenue Recognition:

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

As of 30 September 2025, accrued income taxes were $179.4, and our net deferred income tax liability was $451.7.

Tax liabilities related to uncertain tax positions as of 30 September 2025 were $194.8, excluding interest and penalties.

Income tax expense for the fiscal year ended 30 September 2024 was $944.9.

Income tax benefit for the fiscal year ended 30 September 2025 was $94.3.

Management judgment is required concerning the ultimate outcome of tax contingencies and the realization of deferred tax assets.

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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