Air Products

“Our supply of crude helium for purification and resale is largely dependent upon natural gas production by crude helium suppliers. Lower or higher natural gas production resulting from natural gas pricing dynamics, supplier operating or transportation issues, or other changes to the global supply of crude helium can affect pricing for helium for our customers, which can adversely affect our results of operations.”

Annual report 2025A · The company itself

“Table of Contents DISCUSSION OF RESULTS BY BUSINESS SEGMENT Americas GAAP Measures Sales $5,125.9 $5,040.1 $85.8 2% Operating income 1,519.6 1,565.1 (45.5) (3%) Operating margin 29.6 % 31.1 % (150 bp) Equity affiliates’ income $157.0 $158.8 ($1.8) (1%) Non-GAAP Measure Adjusted EBITDA 2,408.7 2,423.2 (14.5) (1%) The table below summarizes the major factors that impacted sales in the Americas segment for the periods presented: Volume (3 %) Price 2 % Energy cost pass-through to customers 4 % Currency (1 %) Total Americas Sales Change 2 % 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%.”

Annual report 2025A · The company itself

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

Annual report 2025A · The company itself

“Hydrocarbons, including natural gas, are the primary feedstock for the production of hydrogen, carbon monoxide, and syngas. Energy, including electricity, natural gas, and diesel fuel for delivery trucks, is the largest cost component of our business.”

Annual report 2025A · The company itself

“Cost of Sales and Gross Margin 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.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“We typically contract to pass-through cost increases in energy and raw materials to customers, but such cost pass-through results in declining margins, and cost variability can negatively impact our other operating results. For example, we may be unable to raise prices as quickly as costs rise, or competitive pressures may prevent full recovery of such costs. In addition, increases in energy or raw material costs that cannot be passed on to customers for competitive or other reasons may negatively impact our revenues and earnings.”

Annual report 2025A · The company itself

“Hydrocarbons, including natural gas, are the primary feedstock for the production of hydrogen, carbon monoxide, and syngas. Energy, including electricity, natural gas, and diesel fuel for delivery trucks, is the largest cost component of our business.”

Annual report 2025A · The company itself

“Cost of Sales and Gross Margin 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.”

Annual report 2025A · The company itself

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

Annual report 2025A · The company itself

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

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“We typically contract to pass-through cost increases in energy and raw materials to customers, but such cost pass-through results in declining margins, and cost variability can negatively impact our other operating results. For example, we may be unable to raise prices as quickly as costs rise, or competitive pressures may prevent full recovery of such costs. In addition, increases in energy or raw material costs that cannot be passed on to customers for competitive or other reasons may negatively impact our revenues and earnings.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

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

Annual report 2025A · The company itself

“In addition, our large-scale clean hydrogen projects are being built before finalization of offtake agreements for a substantial percentage of expected production, which may create uncertainty regarding future demand, pricing, and other commercial terms. If we are unable to enter into favorable commercial agreements with prospective customers, our projected returns could be adversely impacted, which may harm our business and financial performance.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

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

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“Changes in global and regional economic conditions may impact our ability to obtain financing or increase the cost of obtaining financing which may adversely impact our operations and financial results. Volatility and disruption in the U.S., European and global credit, capital, and money markets could increase the costs for or make it more difficult for us to obtain financing for our operations, potentially impacting our cash flows or creating financial risks.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“In addition, certain of our green and blue hydrogen projects are largely based on expected demand for technologies and projects to limit the impact of global climate change. Demand for our solutions could be negatively impacted if the public and private sectors reduce their focus on reducing carbon emissions.”

Annual report 2025A · The company itself

“Increased public concern and governmental action may result in more international, U.S. federal and/or regional requirements to reduce or mitigate the effects of GHG emissions or increased demand for technologies and projects to limit the impact of global climate change. Although uncertain, these developments could increase our costs related to consumption of electric power, hydrogen (including clean hydrogen) production, and application of our gasification technology. We believe we will be able to mitigate some of the increased costs through contractual terms, but the lack of definitive legislation or regulatory requirements prevents an accurate estimate of the long-term impact these measures will have on our operations.”

Annual report 2025A · The company itself

“Table of Contents In addition, certain of our projects are partially dependent on a regulatory environment that favors technologies focused on limiting the impact of climate change, in particular toward the production and distribution of clean hydrogen. For example, we anticipate benefits from tax incentives created by the U.S. Inflation Reduction Act of 2022 for carbon sequestration and clean hydrogen production in future years once our projects in these areas come on-stream in the U.S.”

Annual report 2025A · The company itself

“If there is a reversal in the regulatory environment or a discontinuation or reduction of incentives or benefits for the development of technologies limiting the impact of climate change, particularly those focused on low- and zero-carbon hydrogen production, or significant uncertainty regarding such efforts, certain of our projects may be threatened and for completed projects demand for our products may be less than we anticipate and certain projects could be adversely affected. For example, in fiscal year 2025, we cancelled a project to build a green liquid hydrogen project in the U.S., based in part on a regulatory development that rendered existing hydroelectric power supply ineligible for the Clean Hydrogen Production Tax Credit (45V) and incurred a significant impairment charge for the amount that we had invested in the project. Further negative regulatory developments could adversely affect our projected returns, which could lead us to re-evaluate certain projects and may harm our business and financial performance.”

Annual report 2025A · The company itself

“Our success depends on our ability to attract, develop, engage, and retain employees with the skills necessary to our business. Competitive labor market conditions have resulted in increased demand for qualified personnel, which makes it difficult to attract, hire, and retain employees with specialized technical experience. In addition, the increasing number of experienced employees becoming retirement-eligible amplifies this challenge.”

Annual report 2025A · The company itself

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

Annual report 2025A · The company itself

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

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“The majority of our sales are denominated in foreign currencies as they are derived outside the United States. Therefore, financial results will be affected by changes in foreign currency rates.”

Annual report 2025A · The company itself

“Currency was flat versus the prior year.”

Annual report 2025A · The company itself

“Table of Contents DISCUSSION OF RESULTS BY BUSINESS SEGMENT Americas GAAP Measures Sales $5,125.9 $5,040.1 $85.8 2% Operating income 1,519.6 1,565.1 (45.5) (3%) Operating margin 29.6 % 31.1 % (150 bp) Equity affiliates’ income $157.0 $158.8 ($1.8) (1%) Non-GAAP Measure Adjusted EBITDA 2,408.7 2,423.2 (14.5) (1%) The table below summarizes the major factors that impacted sales in the Americas segment for the periods presented: Volume (3 %) Price 2 % Energy cost pass-through to customers 4 % Currency (1 %) Total Americas Sales Change 2 % 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%.”

Annual report 2025A · The company itself

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

Annual report 2025A · The company itself

“The majority of our sales are denominated in foreign currencies as they are derived outside the United States. Therefore, financial results will be affected by changes in foreign currency rates.”

Annual report 2025A · The company itself

“The Chinese Renminbi and the Euro represent the largest exposures in terms of our foreign earnings.”

Annual report 2025A · The company itself

“We estimate that a 10% reduction in either the Chinese Renminbi or the Euro versus the U.S. Dollar would lower our annual operating income by approximately $50 and $34, respectively.”

Annual report 2025A · The company itself

“Table of Contents In addition, certain of our projects are partially dependent on a regulatory environment that favors technologies focused on limiting the impact of climate change, in particular toward the production and distribution of clean hydrogen. For example, we anticipate benefits from tax incentives created by the U.S. Inflation Reduction Act of 2022 for carbon sequestration and clean hydrogen production in future years once our projects in these areas come on-stream in the U.S.”

Annual report 2025A · The company itself

“If there is a reversal in the regulatory environment or a discontinuation or reduction of incentives or benefits for the development of technologies limiting the impact of climate change, particularly those focused on low- and zero-carbon hydrogen production, or significant uncertainty regarding such efforts, certain of our projects may be threatened and for completed projects demand for our products may be less than we anticipate and certain projects could be adversely affected. For example, in fiscal year 2025, we cancelled a project to build a green liquid hydrogen project in the U.S., based in part on a regulatory development that rendered existing hydroelectric power supply ineligible for the Clean Hydrogen Production Tax Credit (45V) and incurred a significant impairment charge for the amount that we had invested in the project. Further negative regulatory developments could adversely affect our projected returns, which could lead us to re-evaluate certain projects and may harm our business and financial performance.”

Annual report 2025A · The company itself

“Unfavorable conditions in the global economy or regional economies, the markets we serve, or financial markets may decrease the demand for our goods and services and adversely impact our revenues, operating results, and cash flows. Demand for our products and services depends in part on the general economic conditions affecting the regions and markets in which we do business. Weak economic conditions and changing supply and demand balances in the markets we serve have negatively impacted demand for our products and services in the past and may do so in the future.”

Annual report 2025A · The company itself

“Hydrocarbons, including natural gas, are the primary feedstock for the production of hydrogen, carbon monoxide, and syngas. Energy, including electricity, natural gas, and diesel fuel for delivery trucks, is the largest cost component of our business.”

Annual report 2025A · The company itself

“Changes in global and regional economic conditions may impact our ability to obtain financing or increase the cost of obtaining financing which may adversely impact our operations and financial results. Volatility and disruption in the U.S., European and global credit, capital, and money markets could increase the costs for or make it more difficult for us to obtain financing for our operations, potentially impacting our cash flows or creating financial risks.”

Annual report 2025A · The company itself

“Interest Expense Interest incurred $615.8 $507.9 Less: Capitalized interest 401.8 289.1 Interest expense $214.0 $218.8 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.”

Annual report 2025A · The company itself

“These rates change from year to year based on market conditions that affect corporate bond yields. A higher discount rate decreases the present value of the benefit obligations and results in lower pension expense.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“Based on the variable-rate debt included in our debt portfolio, including the interest rate swap agreements, a 100 bp increase in interest rates would result in an additional $16 and $19 of interest incurred per year at 30 September 2025 and 2024, respectively.”

Annual report 2025A · The company itself

“Because our industrial gas facilities use substantial amounts of electricity, inflation and energy price fluctuations have impacted our revenues and earnings and may continue to do so in the future.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

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

Annual report 2025A · The company itself

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

Annual report 2025A · The company itself

“Changing economic and political conditions within foreign jurisdictions, strained relations between countries, or the imposition, extension, or expansion of tariffs or international sanctions can cause fluctuations in demand, price volatility, supply disruptions, or loss of property.”

Annual report 2025A · The company itself

“Our operations could be impacted by catastrophic events outside our control, including severe weather conditions such as hurricanes, floods, earthquakes, storms, epidemics, pandemics, acts of war, and terrorism. Any such event could cause a serious business disruption that could affect our ability to produce and distribute products and possibly expose us to third-party liability claims.”

Annual report 2025A · The company itself

“Increased public concern and governmental action may result in more international, U.S. federal and/or regional requirements to reduce or mitigate the effects of GHG emissions or increased demand for technologies and projects to limit the impact of global climate change. Although uncertain, these developments could increase our costs related to consumption of electric power, hydrogen (including clean hydrogen) production, and application of our gasification technology. We believe we will be able to mitigate some of the increased costs through contractual terms, but the lack of definitive legislation or regulatory requirements prevents an accurate estimate of the long-term impact these measures will have on our operations.”

Annual report 2025A · The company itself

“Our operations could be impacted by catastrophic events outside our control, including severe weather conditions such as hurricanes, floods, earthquakes, storms, epidemics, pandemics, acts of war, and terrorism. Any such event could cause a serious business disruption that could affect our ability to produce and distribute products and possibly expose us to third-party liability claims.”

Annual report 2025A · The company itself

“Our operations could be impacted by catastrophic events outside our control, including severe weather conditions such as hurricanes, floods, earthquakes, storms, epidemics, pandemics, acts of war, and terrorism. Any such event could cause a serious business disruption that could affect our ability to produce and distribute products and possibly expose us to third-party liability claims.”

Annual report 2025A · The company itself

“Changing economic and political conditions within foreign jurisdictions, strained relations between countries, or the imposition, extension, or expansion of tariffs or international sanctions can cause fluctuations in demand, price volatility, supply disruptions, or loss of property.”

Annual report 2025A · The company itself

“In fiscal year 2025, approximately 60% of our sales were derived from customers outside the United States and many of our operations, suppliers, customers, and employees are located outside the United States.”

Annual report 2025A · The company itself

“Certain of our larger and more complex projects are located in markets outside the United States, such as China, India, the Middle East, and Uzbekistan, including in locations where there is the potential for significant economic and political disruptions. We are actively investing large amounts of capital and other resources, in some cases through joint ventures, in developing markets, which we believe to have high growth potential. Our operations in these markets may be subject to greater risks than those faced by our operations in mature economies, including political and economic instability, project delay or abandonment due to unanticipated government actions, inadequate investment in infrastructure, undeveloped property rights and legal systems, unfamiliar regulatory environments, relationships with local partners, language and cultural differences and increased difficulty recruiting, training and retaining qualified employees.”

Annual report 2025A · The company itself

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

Annual report 2025A · The company itself

“Table of Contents Asia GAAP Measures Sales $3,271.0 $3,224.3 $46.7 1% Operating income 851.1 859.2 (8.1) (1%) Operating margin 26.0 % 26.6 % (60 bp) Equity affiliates’ income $42.3 $32.9 $9.4 29% Non-GAAP Measure Adjusted EBITDA 1,412.3 1,363.1 49.2 4% The table below summarizes the major factors that impacted sales in the Asia segment for the periods presented: Volume — % Price (1 %) Energy cost pass-through to customers 2 % Currency — % Total Asia Sales Change 1 % 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%.”

Annual report 2025A · The company itself

“GAAP Measures Sales $135.9 $134.4 $1.5 1 % Operating income 9.6 5.9 3.7 63 % Equity affiliates’ income 340.9 347.5 (6.6) (2 %) Non-GAAP Measure Adjusted EBITDA 376.4 380.0 (3.6) (1 %) Sales of $135.9 increased 1%, or $1.5, primarily due to higher volumes.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“In fiscal year 2025, approximately 60% of our sales were derived from customers outside the United States and many of our operations, suppliers, customers, and employees are located outside the United States.”

Annual report 2025A · The company itself

“Table of Contents Europe GAAP Measures Sales $2,984.5 $2,823.4 $161.1 6% Operating income 844.7 810.0 34.7 4% Operating margin 28.3 % 28.7 % (40 bp) Equity affiliates’ income $101.9 $88.1 $13.8 16% Non-GAAP Measure Adjusted EBITDA 1,194.0 1,105.2 88.8 8% The table below summarizes the major factors that impacted sales in the Europe segment for the periods presented: Volume 1 % Price 2 % Energy cost pass-through to customers 1 % Currency 2 % Total Europe Sales Change 6 % 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%.”

Annual report 2025A · The company itself

“In fiscal year 2025, approximately 60% of our sales were derived from customers outside the United States and many of our operations, suppliers, customers, and employees are located outside the United States.”

Annual report 2025A · The company itself

“Table of Contents DISCUSSION OF RESULTS BY BUSINESS SEGMENT Americas GAAP Measures Sales $5,125.9 $5,040.1 $85.8 2% Operating income 1,519.6 1,565.1 (45.5) (3%) Operating margin 29.6 % 31.1 % (150 bp) Equity affiliates’ income $157.0 $158.8 ($1.8) (1%) Non-GAAP Measure Adjusted EBITDA 2,408.7 2,423.2 (14.5) (1%) The table below summarizes the major factors that impacted sales in the Americas segment for the periods presented: Volume (3 %) Price 2 % Energy cost pass-through to customers 4 % Currency (1 %) Total Americas Sales Change 2 % 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%.”

Annual report 2025A · The company itself

“Certain of our larger and more complex projects are located in markets outside the United States, such as China, India, the Middle East, and Uzbekistan, including in locations where there is the potential for significant economic and political disruptions. We are actively investing large amounts of capital and other resources, in some cases through joint ventures, in developing markets, which we believe to have high growth potential. Our operations in these markets may be subject to greater risks than those faced by our operations in mature economies, including political and economic instability, project delay or abandonment due to unanticipated government actions, inadequate investment in infrastructure, undeveloped property rights and legal systems, unfamiliar regulatory environments, relationships with local partners, language and cultural differences and increased difficulty recruiting, training and retaining qualified employees.”

Annual report 2025A · The company itself