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What changed in Air Products's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Air Products's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+437 added−406 removedSource: 10-K (2025-11-20) vs 10-K (2024-11-21)

Top changes in Air Products's 2025 10-K

437 paragraphs added · 406 removed · 274 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

49 edited+24 added−37 removed18 unchanged
Biggest changeExpenditures for capital projects intended to control pollution from existing operating facilities as required under current environmental regulations were not material in fiscal years 2024, 2023, and 2022. We do not expect material expenditures for these projects in fiscal year 2025. For additional information regarding environmental matters, refer to Note 19, Commitments and Contingencies , to the consolidated financial statements.
Biggest changeWe continue to develop technologies to help our facilities and our customers lower energy consumption, improve efficiency, and lower emissions. Expenditures for capital projects intended to control pollution from existing operating facilities as required under current environmental regulations were not material in fiscal years 2025, 2024, and 2023.
Bols previously served as Vice President and General Manager, Merchant Gases-Asia from 2007 to 2011, Vice President and General Manager, Global Liquid Bulk, Generated Gases and Helium from 2011 to 2012, Vice President and General Manager, Merchant Gases–Europe, from 2012 to 2014, and President, EMEA from 2014 to 2016. Mr. Bols joined the Company in 1988.
Bols previously served as President, EMEA from 2014 to 2016, Vice President and General Manager, Merchant Gases–Europe from 2012 to 2014, General Manager, Global Liquid Bulk, Generated Gases and Helium from 2011 to 2012 and Vice President and General Manager, Merchant Gases-Asia from 2007 to 2011. Mr. Bols joined the Company in 1988.
Item 1. Business As used in this report, unless the context indicates otherwise, the terms “we,” “our,” “us,” the “Company,” "Air Products," or “registrant” include controlled subsidiaries and affiliates of Air Products. Additional information about Air Products is available on our website at www.airproducts.com. References to our website within this report are inactive textual references only.
Item 1. Business As used in this report, unless the context indicates otherwise, the terms “we,” “our,” “us,” the “Company,” "Air Products," or “registrant” include our controlled subsidiaries and affiliates. Additional information about Air Products is available on our website at www.airproducts.com. References to our website within this report are inactive textual references only.
We derive a competitive advantage in locations where we have pipeline networks, which enable us to provide a reliable and economic supply of products to our larger customers. 5 Table of Contents Production Industrial gases are generally produced at or near the point of use given the complexity and inefficiency of storing molecules at low temperatures.
We derive a competitive advantage in locations where we have pipeline networks, which enable us to provide a reliable and economic supply of products to our larger customers. 5 Table of Contents Production Industrial gases are generally produced at or near the point of use due to the complexity and inefficiency of storing molecules at low temperatures.
Overall regional industrial gases sales constituted over 90% of consolidated sales in fiscal years 2024, 2023, and 2022, approximately half of which were attributable to atmospheric gases. Each of the regional industrial gases segments competes against three global industrial gas companies: Air Liquide S.A., Linde plc, and Messer Group GmbH, as well as regional competitors.
Overall regional industrial gases sales constituted over 90% of consolidated sales in fiscal years 2025, 2024, and 2023, approximately half of which were attributable to atmospheric gases. Each of the regional industrial gases segments competes against three global industrial gas companies: Air Liquide S.A., Linde plc, and Messer Group GmbH, as well as regional competitors.
Air Products uses a multidisciplinary approach to safety and health, which includes a global Environment, Health and Safety ("EHS) policy; goals for employee, contractor, and transportation safety; a Global EHS Management System that supports the principles of ISO 45001; employee training based on job function; risk assessment processes for workers, operations, products, transportation, and regulatory requirements, including an escalation process for engaging our EHS Risk Council; compliance audits conducted by our EHS Assurance Team; review of performance by our Board of Directors, Sustainability Leadership Council, businesses and operations, and members of our Safety and Health Centers of Excellence at least annually; internal reporting of results on a monthly basis; and external reporting on safety performance through our annual Sustainability Report, public website, and responses to various stakeholders.
We use a multidisciplinary approach to safety and health, which includes a global Environment, Health and Safety ("EHS") policy; goals for employee, contractor, and transportation safety; a Global EHS Management System that supports the principles of ISO 45001; employee training based on job function; risk assessment processes for workers, operations, products, transportation, and regulatory requirements, including an escalation process for engaging our EHS Risk Council; compliance audits conducted by our EHS Assurance Team; review of performance by our Board of Directors, Sustainability Leadership Council, businesses and operations, and members of our Safety and Health Centers of Excellence at least annually; internal reporting of results on a monthly basis; and external reporting on safety performance through our annual Sustainability Report, public website, and responses to various stakeholders.
Furthermore, some jurisdictions have various mechanisms to target the power sector to achieve emission reductions, which often result in higher power costs. Increased public concern may result in more international, U.S. federal, and/or regional requirements to reduce or mitigate the effects of GHG emissions.
Furthermore, some jurisdictions have various mechanisms to target the power sector to achieve emission reductions, which often result in higher power costs. Increased public concern may result in more international and/or regional requirements to reduce or mitigate the effects of GHG emissions.
This produces cleaner transportation fuels that can be used with other equipment, particularly in the developing hydrogen-for-mobility markets, to significantly reduce emissions that contribute to climate change. Many other industries that already benefit from hydrogen’s unique properties to improve quality, optimize performance, and reduce costs are also looking to hydrogen as a fuel that can help decarbonize their manufacturing processes.
This produces cleaner transportation fuels that can be used with other equipment to significantly reduce emissions that contribute to climate change. Many other industries that already benefit from hydrogen’s unique properties to improve quality, optimize performance, and reduce costs are also looking to hydrogen as a fuel that can help decarbonize their manufacturing processes.
Our on-site supply mode generates approximately half our total company sales. • Merchant Gases— Supply mode for liquid bulk and packaged gas products.
Our on-site supply mode generates approximately half our total company sales. • Merchant Gases — This supply mode includes liquid bulk and packaged gas products.
The European Union has issued the Corporate Sustainability Reporting Directive as well as the Corporate Sustainability Due Diligence Directive, and California has enacted the Climate Corporate Data Accountability Act and the Climate Related Financial Risk Act that will require reporting and third-party assurance of GHG emissions information for certain entities.
The European Union has issued the Corporate Sustainability Reporting Directive as well as the Corporate Sustainability Due Diligence Directive, and California has enacted the Climate Corporate Data Accountability Act and the Climate Related Financial Risk Act that will require GHG emissions and climate-related financial risk reporting for certain entities.
Our Businesses Industrial Gases Business Our industrial gases business, which is organized and operated regionally in the Americas, Asia, Europe, and Middle East and India segments, produces and sells atmospheric gases such as oxygen, nitrogen, and argon; process gases such as hydrogen, helium, carbon dioxide ("CO 2 "), carbon monoxide, and syngas (a mixture of hydrogen and carbon monoxide); and specialty gases.
Our Businesses Regional Industrial Gases Our industrial gases business, which is organized and operated regionally in the Americas, Asia, Europe, and Middle East and India segments, produces and sells atmospheric gases such as oxygen, nitrogen, and argon (primarily recovered by the cryogenic distillation of air); process gases such as hydrogen, helium, carbon dioxide ("CO 2 "), carbon monoxide, and syngas (a mixture of hydrogen and carbon monoxide); and specialty gases.
As discussed under "Equity Affiliates" above, we also own non-controlling interests in entities operating in Africa, Asia, Europe, Latin America, and the Middle East. Financial information about our foreign operations and investments is included in Note 10, Equity Affiliates ; Note 24, Income Taxes ; and Note 26, Business Segment and Geographic Information , to the consolidated financial statements.
As discussed under "Equity Affiliates" above, we also own non-controlling interests in entities operating in Asia, Europe, Latin America, and the Middle East. Financial information related to our foreign operations and investments can be found in the consolidated financial statements under Note 10, Equity Affiliates ; Note 24, Income Taxes ; and Note 26, Business Segment and Geographic Information .
We manage our operations, assess performance, and report earnings under five reportable segments: Americas, Asia, Europe, Middle East and India, and Corporate and other. The discussion that follows is based on these operations. Refer to Note 26, Business Segment and Geographic Information , to the consolidated financial statements for additional information.
We manage our operations, assess performance, and report earnings under five reportable segments: Americas, Asia, Europe, Middle East and India, and Corporate and other. Refer to Note 26, Business Segment and Geographic Information , to the consolidated financial statements for additional information.
Lefevere previously served as Vice President, Northern Europe from 2015 until June 2024, Manager, Strategy Development and Performance Enhancement for the Company’s Global Merchant division from 2013 until 2014, and General Manager for the Packaged Gases division in Asia from 2011 until 2013. Mr. Lefevere joined the Company in 1994. Francesco Maione 55 President, Americas since December 2020. Mr.
Kurt Lefevere 55 President, Asia since June 2024. Mr. Lefevere previously served as Vice President, Northern Continent, Europe from 2015 to June 2024, Manager, Strategy Development and Performance Enhancement for the Company’s Global Merchant division from 2013 until 2014, and General Manager for the Packaged Gases division in Asia from 2011 until 2013. Mr. Lefevere joined the Company in 1994.
About Air Products Air Products and Chemicals, Inc., a Delaware corporation originally founded in 1940, 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.
About Air Products 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.
We also deliver smaller quantities of product through small on-site plants (cryogenic or non-cryogenic generators), typically via a 10- to 15-year sale of gas contract. The contracts within this supply mode generally contain fixed monthly charges and/or minimum purchase requirements with price escalation provisions that are typically based on external indices.
We also deliver smaller quantities of product through small on-site plants (cryogenic or non-cryogenic generators), generally under 10- to 15-year contracts. Contracts in this supply mode commonly include fixed monthly charges and/or minimum purchase requirements with price escalation provisions that are typically based on external indices.
Liquid bulk product is delivered in bulk in either liquid or gaseous form by tanker or tube trailer and stored, usually in its liquid state, in equipment that we typically design and install at the customer’s site for vaporizing into a gaseous state as needed. Liquid bulk sales are usually governed by three- to five-year contracts.
Liquid bulk gases are delivered in either liquid or gaseous form via tanker or tube trailer and stored, usually in its liquid state, in equipment that we typically design and install at the customer’s site for vaporizing into a gaseous state as needed.
Maione previously served as President, Atmospheric Gases, Americas during 2020, as Vice President and General Manager, South America from 2019 until early 2020, as Vice President, Northern Region Americas, from 2018 to 2019 and Vice President, Southern Region, Americas, from 2016 to 2018. Mr. Maione joined the Company in 1998. Wilbur Mok 63 President, Equipment Businesses since July 2024. Mr.
Maione previously served as President, Atmospheric Gases, Americas during 2020, as Vice President and General Manager, South America from 2019 until early 2020, as Vice President, Northern Region Americas, from 2018 to 2019 and Vice President, Southern Region, Americas, from 2016 to 2018. Mr. Maione joined the Company in 1998. 11 Table of Contents
Supply Modes We distribute gases to our industrial gas customers through different supply modes depending on various factors including the customer's volume requirements and location.
Supply Modes We distribute product to our industrial gas customers through either our on-site or merchant supply mode depending on various factors, including the customer's volume requirements and location.
Information about foreign currency translation is included under “Foreign Currency” in Note 1, Basis of Presentation and Major Accounting Policies , to the consolidated financial statements.
Details regarding foreign currency translation are provided in Note 1, Basis of Presentation and Major Accounting Policies , to the consolidated financial statements, under “Foreign Currency”.
In the Netherlands, a CO 2 emissions tax was enacted on 1 January 2021. In Canada, Alberta’s Technology Innovation and Emission Reduction System went into effect 1 January 2020. In Ontario, Environment & Climate Change Canada’s Output Based Pricing System was replaced by the GHG Emissions Performance Standards program beginning 1 January 2022.
In Canada, Alberta’s Technology Innovation and Emission Reduction System went into effect 1 January 2020. In Ontario, Environment & Climate Change Canada’s Output Based Pricing System was replaced by the GHG Emissions Performance Standards program beginning 1 January 2022. In Taiwan, enforcement of the Climate Change Response Act began in 2023.
During fiscal year 2024, we owned approximately 600 United States patents, approximately 3,200 foreign patents, and were a licensee under certain patents owned by others.
During fiscal year 2025, we owned approximately 560 United States patents, approximately 2,650 foreign patents, and were a licensee under certain patents owned by others.
Some of our operations are within jurisdictions that have or are developing regulatory regimes governing emissions of greenhouse gases (“GHG”), including CO 2 . These include existing coverage under the European Union Emission Trading System, the California Cap-and-Trade Program, China’s Emission Trading Scheme and its nation-wide expansion, and South Korea’s Emission Trading Scheme.
Some of our operations are within jurisdictions that have or are developing regulatory regimes governing emissions of greenhouse gases (“GHG”), including CO 2 . These include the European Union Emission Trading System, the California Cap-and-Trade Program, China’s Emission Trading Scheme, and South Korea’s Emission Trading Scheme. In the Netherlands, a CO 2 emissions tax was enacted on 1 January 2021.
International Operations Through our subsidiaries, affiliates, and joint ventures accounted for using the equity method, we conduct business in approximately 50 countries and regions outside the United States.
For additional information regarding these investments, refer to Note 10, Equity Affiliates , to the consolidated financial statements. International Operations Through our subsidiaries, affiliates, and joint ventures accounted for using the equity method, we conduct business in approximately 50 countries and regions outside the United States.
Schaeffer joined the Company in 2016 and most recently served as Vice President, Finance – GEMTE, Americas, Middle East, and India from 2020 to 2021 and previously served as Vice President, Chief Audit Executive from 2016 to 2020. Sean D. Major 60 Executive Vice President, General Counsel and Secretary since 2017. Previously, Mr.
Schaeffer joined the Company in 2016 and most recently served as Vice President, Finance – GEMTE, Americas, Middle East, and India from 2020 to 2021 and previously served as Vice President, Chief Audit Executive from 2016 to 2020. Before joining the Company, Ms.
The Corporate and other segment also includes the results of our Rotoflow business, which manufactures turboexpanders and other precision rotating equipment, and our Gardner Cryogenics business, which fabricates helium and hydrogen transport and storage containers.
The Corporate and other segment also includes the results of our Rotoflow business, which manufactures turboexpanders and other precision rotating equipment, and our Gardner Cryogenics business, which fabricates helium and hydrogen transport and storage containers. Steel, aluminum, and capital equipment subcomponents such as compressors are the principal raw materials in the manufacturing of equipment.
The industrial gases business develops, builds, and operates equipment for the production or processing of gases. Atmospheric gases are produced through various air separation processes, of which cryogenic distillation is the most prevalent, while process gases are produced by methods other than air separation. To produce hydrogen, we purify byproduct sources obtained from the chemical and petrochemical industries.
The industrial gases business develops, builds, and operates equipment for the production and processing of gases. Atmospheric gases are produced through various air separation processes, with cryogenic distillation being the most prevalent, while process gases are produced by methods other than air separation.
We also fund and cooperate in research and development programs conducted by a number of major universities and undertake research work funded by others, including the United States government.
We conduct research and development principally in our laboratories located in the United States (Allentown, Pennsylvania), the United Kingdom (Basingstoke and Carrington), Spain (Barcelona), China (Shanghai), and Saudi Arabia (Dhahran). We also fund and cooperate in research and development programs conducted by a number of major universities and undertake research work funded by others, including the United States government.
We benchmark our compensation to ensure we keep pace with the market to provide competitive pay and benefits.
To support this, we benchmark our compensation to remain aligned with market conditions and provide competitive pay and benefits.
Gases are produced and supplied by large facilities we construct or acquire on or near the customers’ facilities or by pipeline systems from centrally located production facilities. These sale of gas contracts are generally governed by 15- to 20-year contracts.
Gases are produced and supplied through large facilities constructed or acquired on or near customer facilities, or by pipeline systems from centralized production locations. These sale of gas arrangements are generally governed by long-term contracts ranging from 15- to 20-years.
Information about our exposure to currency fluctuations is included in Note 15, Financial Instruments , to the consolidated financial statements, and in “Foreign Currency Exchange Rate Risk” included under Item 7A, Quantitative and Qualitative Disclosures About Market Risk , of this Annual Report on Form 10-K.
Our exposure to currency fluctuations is discussed in Note 15, Financial Instruments , to the consolidated financial statements and Item 7A, Quantitative and Qualitative Disclosures About Market Risk , under “Foreign Currency Exchange Rate Risk”. Technology Development We pursue a market-oriented approach to technology development through research and development, engineering, and commercial development processes.
Steel, aluminum, and capital equipment subcomponents such as compressors are the principal raw materials in the manufacturing of equipment. Raw materials for individual projects typically are acquired under firm purchase agreements. Equipment is produced at our manufacturing sites with certain components procured from subcontractors and vendors.
Raw materials for individual projects typically are acquired under firm purchase agreements. Equipment is produced at our manufacturing sites with certain components procured from subcontractors and vendors. Competition in the equipment business is based primarily on plant efficiency and technological performance, service, technical know-how, and price, as well as schedule and plant performance guarantees.
Helium is produced as a byproduct of gases extracted from underground reservoirs, primarily natural gas as well as CO 2 purified before resale.
During fiscal year 2025, we did not encounter significant difficulties in obtaining adequate supplies of power and natural gas. Helium is produced as a byproduct of gases extracted from underground reservoirs, primarily natural gas and CO 2 purified before resale.
Ghasemi is a member and Chairman of the Board of Directors and the Chairman of the Executive Committee of the Board of Directors. Melissa N. Schaeffer 45 Executive Vice President and Chief Financial Officer (became Senior Vice President and Chief Financial Officer in August 2021 and Executive Vice President in October 2024). Ms.
Schaeffer 46 Executive Vice President and Chief Financial Officer (became Senior Vice President and Chief Financial Officer in August 2021 and Executive Vice President in October 2024). Ms.
Electricity is the largest cost component in the production of atmospheric gases. To produce hydrogen, carbon monoxide, and syngas, steam methane reformers use natural gas as the primary raw material, while gasifiers use liquid and solid hydrocarbons as the primary raw material.
To produce hydrogen, carbon monoxide, and syngas, steam methane reformers use natural gas as the primary raw material, while gasifiers use liquid and solid hydrocarbons. We mitigate electricity, natural gas, and hydrocarbon price fluctuations contractually through pricing formulas, surcharges, cost pass-through provisions, and tolling arrangements.
Substantially all our equity method investments are in foreign industrial gas producers, the largest of which operate in Algeria, China, India, Italy, Mexico, Saudi Arabia, South Africa, and Thailand. For additional information regarding these investments, refer to Note 10, Equity Affiliates , to the consolidated financial statements.
The carrying value of our equity method investments is reflected as "Investment in net assets of and advances to equity affiliates" on our consolidated balance sheets. All of our equity method investments are in foreign industrial gas producers, the largest of which operate in Algeria, China, India, Italy, Mexico, and Saudi Arabia.
A negative trend affecting one of these industries, or the loss of one of these major customers, although not material to our consolidated sales, could have an adverse impact on our financial results. Seasonality Our businesses are not subject to seasonal fluctuations to any material extent.
We do have concentrations of customers in specific industries, primarily refining, chemicals, and electronics. Within each of these industries, we have several large-volume customers with long-term contracts. A negative trend affecting one of these industries, or the loss of one of these major customers, although not material to our consolidated sales, could have an adverse impact on our financial results.
We have hydrogen fueling stations that support commercial markets as well as demonstration projects across the globe. The chemicals industry uses hydrogen, oxygen, nitrogen, carbon monoxide, and syngas as feedstocks in the production of many basic chemicals. The energy production industry uses nitrogen injection for enhanced recovery of oil and natural gas and oxygen for gasification.
The chemicals industry uses hydrogen, oxygen, nitrogen, carbon monoxide, and syngas as feedstocks in the production of many basic chemicals. The energy production industry uses nitrogen injection for enhanced recovery of oil and natural gas and oxygen for gasification. Oxygen is used in combustion and industrial heating applications, including in the steel, certain nonferrous metals, glass, and cement industries.
Oxygen is used in combustion and industrial heating applications, including in the steel, certain nonferrous metals, glass, and cement industries. Nitrogen applications are used in food processing for freezing and preserving flavor, and nitrogen is used for inerting in various fields, including the metals, chemical, and semiconductor industries.
Nitrogen applications are used in food processing for freezing and preserving flavor, and nitrogen is used for inerting in various fields, including the metals, chemical, and semiconductor industries. Helium is used for its unique properties as an inert gas with an extremely low boiling point.
Our share of our investees' net earnings is primarily presented net of income taxes within “Equity affiliates’ income" on our consolidated income statements. The carrying value of our equity method investments is reflected as "Investment in net assets of and advances to equity affiliates" on our consolidated balance sheets.
Equity Affiliates Our reporting segments include our share of the results of joint ventures accounted for under the equity method. Our share of our investees' net earnings is primarily presented net of income taxes within “Equity affiliates’ income" on our consolidated income statements.
Additionally, through the end of fiscal year 2024, our Corporate and other segment included our liquefied natural gas ("LNG") process technology and equipment business, which was sold to Honeywell International Inc. on 30 September 2024. Refer to Note 4, Gain on Sale of Business , to the consolidated financial statements for additional information regarding the sale.
Our sale of equipment supply mode constituted less than 10% of consolidated sales in fiscal years 2025, 2024, and 2023. Our former liquefied natural gas ("LNG") process technology and equipment business was included in the Corporate and other segment until its sale to Honeywell International Inc. on 30 September 2024.
Governmental Contracts Our business is not subject to a government entity’s renegotiation of profits or termination of contracts that would be material to our business as a whole. 7 Table of Contents Equity Affiliates Our reporting segments include our share of the results of joint ventures accounted for under the equity method.
Seasonality While seasonality does not materially affect our long-term performance, it may result in variability in quarterly financial results. 7 Table of Contents Governmental Contracts Our business is not subject to a government entity’s renegotiation of profits or termination of contracts that would be material to our business as a whole.
Our supply modes are as follows: • On-Site Gases— Supply mode associated with customers, principally in the energy production and refining, chemical, metals, and electronics industries worldwide, that require large volumes of gases and have relatively constant demand.
Each sale of gas supply mode is described below: • On-site Gases — This supply mode serves customers primarily in the energy production and refining, chemical, metals, and electronics industries worldwide, where large and relatively consistent volumes of industrial gases are required.
Our compensation programs are generally comprised of base pay, annual variable pay (bonus), and long-term incentives (stock awards under the Air Products Long-Term Incentive Plan) for eligible employees. 10 Table of Contents Our Executive Officers In addition to our Chairman, President, and Chief Executive Officer, our Executive Vice President and Chief Financial Officer, and our Executive Vice President, General Counsel and Secretary, the executive officers' information below includes members of senior leadership who were named to the Management Board as announced on 22 July 2024.
Our compensation programs generally include base pay, annual variable pay (bonus), and long-term incentives (stock awards under the Air Products Long-Term Incentive Plan) for eligible employees. 10 Table of Contents Our Executive Officers The table below identifies each executive officer by name, age, and offices held as of 20 November 2025.
Packaged gas products are delivered in small quantities in either cylinders or dewars. We operate packaged gas businesses in Europe, Asia, and Latin America. We maintain inventory in locations that facilitate supply of products to customers on a reasonable delivery schedule.
These contracts contain stated terms that are generally five years or less. We maintain inventory in locations that facilitate supply of products to customers on a reasonable delivery schedule.
Helium is used in laboratories and healthcare for cooling and in other industries for pressurizing, purging, and lifting. Argon is used in the metals and other industries for its unique inerting, thermal conductivity, and other properties.
It is widely used in semiconductor and fiber optics manufacturing, MRI magnet cooling, and for purging and pressurizing rocket fuel systems in aerospace launches. Additional applications include use in laboratories, cryogenics, and as a shielding gas in arc welding. Argon is used in the metals and other industries for its unique inerting, thermal conductivity, and other properties.
Customers We do not have a homogeneous customer base or end market, and no single customer accounts for more than 10% of our consolidated sales. We do have concentrations of customers in specific industries, primarily refining, chemicals, and electronics. Within each of these industries, we have several large-volume customers with long-term contracts.
This gain was not recorded in the results of the Corporate and other segment. Refer to Note 4, Gain on Sale of Business , to the consolidated financial statements for additional information. Customers We do not have a homogeneous customer base or end market, and no single customer accounts for more than 10% of our consolidated sales.
We have collective bargaining agreements with unions and works councils at certain locations that expire on various dates over the next four years. Under 20% of our total workforce is covered by such agreements. Overall, we have a corporate strategy supported by our leaders and enabled by a positive organizational culture.
As of 30 September 2025, we had approximately 21,300 employees, with over 99% working full-time and approximately 75% based outside the United States. We maintain collective bargaining agreements with unions and works councils at certain locations, which expire at various times over the next four years. Approximately 15% of our global workforce is covered by these agreements.
A work environment where employees know they belong and matter includes fair and equitable pay. Our pay practices apply equally to all employees irrespective of gender, race, religion, disability, age, or any other form of personal difference. We pay competitively in local markets where we do business and compete for talent.
We are committed to ethical pay practices that align with our values of social responsibility, ensuring that all employees receive equitable compensation regardless of gender, race, religion, disability, age, or any other personal characteristic. We strive to offer competitive pay in the local markets where we operate, balancing financial sustainability with our ability to attract and retain talent.
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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.
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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.
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With sustainability at its core, our two-pillar growth strategy includes the optimization and growth of our core industrial gases business while developing, engineering, building, owning, and operating some of the world’s largest clean hydrogen projects that will advance the transition to low- and zero-carbon energy in the industrial and heavy-duty transportation sectors.
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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.
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Our regional 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. Through our sale of equipment businesses, we also provide turbomachinery, membrane systems, and cryogenic containers globally.
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Hydrogen is a process gas that is typically produced by purifying byproduct sources obtained from chemical and petrochemical industries without carbon capture, commonly referred to as “gray hydrogen.” We primarily produce gray hydrogen.
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We have historically produced hydrogen from hydrocarbons exclusively without carbon capture (known as "gray hydrogen"); however, we are also investing in projects that are intended to create a reliable and consistent world-scale source of low-carbon hydrogen produced from hydrocarbons with carbon capture (known as “blue hydrogen”) as well as carbon-free hydrogen produced from renewable energy (known as “green hydrogen”).
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In addition, we are advancing projects that produce low-carbon hydrogen from hydrocarbons with carbon capture (“blue hydrogen”) and carbon-free hydrogen from renewable energy (“green hydrogen”), such as the NEOM Green Hydrogen Project in Saudi Arabia. In fiscal year 2025, we exited certain clean energy projects as discussed in Note 5, Business and Asset Actions , to the consolidated financial statements.
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We mitigate electricity, natural gas, and hydrocarbon price fluctuations contractually through pricing formulas, surcharges, cost pass-through provisions, and tolling arrangements. During fiscal year 2024, no significant difficulties were encountered in obtaining adequate supplies of power and natural gas.
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Despite these actions, we continue to see opportunity in clean energy and are pursuing focused investments in scalable, economically viable solutions that support long-term shareholder value. Electricity is the largest cost component in the production of atmospheric gases.
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Competition in the equipment business is based primarily on plant efficiency and technological performance, service, technical know-how, and price, as well as schedule and plant performance guarantees. Our sale of equipment supply mode constituted less than 10% of consolidated sales in fiscal years 2024, 2023, and 2022.
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Packaged gases customers receive small quantities of product delivered in either cylinders or dewars, with operations in Europe, Asia, and Latin America. Sales of both liquid bulk and packaged gases do not include minimum purchase requirements, as they are governed by contracts and/or purchase orders that reflect the customer's specific needs.
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Technology Development We pursue a market-oriented approach to technology development through research and development, engineering, and commercial development processes. We conduct research and development principally in our laboratories located in the United States (Allentown, Pennsylvania), the United Kingdom (Basingstoke and Carrington), Spain (Barcelona), China (Shanghai), and Saudi Arabia (Dhahran).
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The LNG business generated operating income of approximately $135 million in fiscal year 2024 and $120 million in fiscal year 2023. As a result of the sale, we recognized a pre-tax gain of approximately $1.6 billion during the fourth quarter of fiscal year 2024, reported within "Gain on sale of business" on our consolidated income statements.
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In Singapore, the Carbon Pricing Tax Act was implemented effective 1 January 2019. In Taiwan, enforcement of the Climate Change Response Act began in 2023 and a carbon fee was implemented effective 29 August 2024. In addition, the U.S.
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A carbon fee framework pursuant to that law has also been announced, with collections thereunder first scheduled for 2026, covering emissions generated in 2025. In September 2025, the U.S.
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Environmental Protection Agency requires mandatory reporting of GHG emissions and is regulating GHG emissions for new construction and major modifications to existing facilities.
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Environmental Protection Agency (“EPA”) issued a proposed rule to end federal mandatory GHG reporting for almost all sectors (including Subpart P that we are subject to); however, the rule is not yet final and timing is uncertain.
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In March 2024, the SEC issued final rules for "The Enhancement and Standardization of Climate-Related Disclosures for Investors,” which would have required certain climate-related disclosures in our Annual Report on Form 10-K. In April 2024, the SEC stayed the effectiveness of the final rules pending the outcome of certain legal challenges.
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Additionally, in August 2025, the EPA issued a proposed rule to reconsider its 2009 Endangerment Finding rule (and a 2016 agency affirmation of that rule) that was the basis for subsequent actions to regulate certain GHGs under the federal Clean Air Act, including for new constructions and major modifications to existing facilities, as well as new motor vehicles.
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We continue to develop technologies to help our facilities and our customers lower energy consumption, improve efficiency, and lower emissions. We see significant opportunities for hydrogen for mobility, low carbon intensity hydrogen production supporting the global energy transition, utilization of carbon capture technologies, including subsequent CO 2 product use or sequestration, and gasification.
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We do not expect material expenditures for these projects in fiscal year 2026. For additional information regarding environmental matters, refer to Note 19, Commitments and Contingencies , to the consolidated financial statements. 9 Table of Contents Sustainability We pursue opportunities to improve energy efficiency and lower emissions across our operations.
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Sustainability Sustainability is at the core of our higher purpose to bring people together to collaborate and innovate solutions to the world’s most significant energy and environmental sustainability challenges.
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Additionally, our customers rely on our expertise to enhance their operations, boost efficiency, improve yields, and reduce their environmental footprint. Our offerings include gases, equipment, technologies, and applications that enable our customers, and their customers, to improve their sustainability performance by avoiding GHG emissions, improving efficiency, allowing the use of by-product gases, and recycling resources between facilities.
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Our low- and zero-carbon hydrogen and other first mover projects demonstrate our commitment to making investments that will make a meaningful difference on climate issues, allowing us to support our customers’ sustainability journeys, conserve resources, and care for our employees and communities. Our Sustainability Report details our strategy and the role our employees play in achieving our goals.
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Our latest Sustainability Report is available at www.airproducts.com/company/sustainability/sustainability-report. Human Capital Management We are focused on attracting, developing, and retaining a highly-skilled workforce that will deliver excellent service to our customers. We strive to create a workforce that reflects our customers and the communities where we do business.
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Our latest Sustainability Report is available at www.airproducts.com/company/sustainability/sustainability-report. 9 Table of Contents Human Capital Management As of 30 September 2024, we had approximately 23,000 employees, of which over 95% were working full-time and approximately 75% were located outside the United States.
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By embracing the experiences and perspectives within our talent pool and nurturing a culture grounded in respect and collaboration, we empower employees to confidently share ideas. This approach is central to our corporate strategy, which is supported by our leaders and enabled by a positive organizational culture.
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We believe our employees are our most valuable asset and are critical to our organization's success. Our goal is to be the safest, most diverse, and most profitable industrial gas company in the world, providing excellent service to our customers.
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We offer a variety of opportunities for employees to develop their capabilities, talents, and careers. Employees choose learning and development goals aligned to roles and responsibilities that support current and expected future business needs. We continue to invest in new learning platforms and learner-centric experiences that encourage employee development and skills retention.
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Integral to our success is the continued development of our 4S culture (Safety, Speed, Simplicity and Self-Confidence) and the creation of a work environment where our employees feel that they belong and matter.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeA decline in the industries served by our customers or adverse events or circumstances affecting individual customers can reduce demand for our products and services and impair the ability of such customers to satisfy their obligations to us, resulting in uncollected receivables, unanticipated contract terminations, project delays or the inability to recover plant investments, any of which may negatively impact our financial results. 12 Table of Contents Weak overall demand or specific customer conditions may also cause customer shutdowns or defaults or otherwise make us unable to operate facilities profitably and may force sale or abandonment of facilities and equipment or prevent projects from coming on-stream when expected.
Biggest changeA decline in the industries served by our customers or adverse events or circumstances affecting individual customers can reduce demand for our products and services and impair the ability of such customers to satisfy their obligations to us, resulting in uncollected receivables, unanticipated contract terminations, project delays or the inability to recover plant investments, any of which may negatively impact our financial results.
Any of the attacks, breaches or other disruptions or damage described above could: interrupt our operations at one or more sites; delay production and shipments; result in the theft of our and our customers’ intellectual property and trade secrets; damage customer and business partner relationships and our reputation; result in defective products or services, physical damage to facilities, pipelines or delivery systems, including those we own or operate for third parties, legal claims and proceedings, liability and penalties under privacy laws, or increased costs for security and remediation; or raise concerns regarding our internal control environment and internal control over financial reporting.
Any of the attacks, breaches or other disruptions or damage described above could: interrupt our operations at one or more sites; delay production and shipments; result in the theft of our and our customers’ intellectual property and trade secrets; damage customer and business partner relationships and our reputation; result in defective products or services, physical damage to facilities, pipelines or delivery systems, including those we own or operate for third parties; result in legal claims and proceedings, including liability and penalties under applicable privacy laws; lead to increased costs for security and remediation; or raise concerns regarding our internal control environment and internal control over financial reporting.
Our operations in foreign jurisdictions may be subject to risks including exchange control regulations, import and trade restrictions, trade policy and other potentially detrimental domestic and foreign governmental practices or policies affecting U.S. companies doing business abroad.
Our operations in foreign jurisdictions may be subject to risks including exchange control regulations, import and trade restrictions, tariffs, trade policy and other potentially detrimental domestic and foreign governmental practices or policies affecting U.S. companies doing business abroad.
These or other events associated with weak economic conditions or specific market, industry, product, or customer events may require us to record an impairment on tangible assets, such as facilities and equipment, or intangible assets, such as intellectual property or goodwill.
These or other events associated with weak economic conditions or specific market, industry, product, or customer events may require us to record an impairment on tangible assets, such as facilities and equipment, or intangible assets, such as customer relationships, intellectual property, or goodwill.
Item 1A. Risk Factors Our operations are affected by various risks, many of which are beyond our control. In evaluating investment in the Company and the forward-looking information contained in this Annual Report on Form 10-K or presented elsewhere from time to time, you should carefully consider the risk factors discussed below.
Item 1A. Risk Factors Our operations are affected by various risks, many of which are beyond our control. In evaluating investment in the Company and the forward-looking information contained in this Annual Report on Form 10-K or presented elsewhere from time to time, readers should carefully consider the risk factors discussed below.
If these efforts are unsuccessful, our growth may be limited and we may suffer financial or reputational harm that could have a material adverse effect on our business, financial condition, or results of operations. 18 Table of Contents Our financial results may be affected by various legal and regulatory proceedings, including antitrust, tax, environmental, or other matters.
If these efforts are unsuccessful, our growth may be limited and we may suffer financial or reputational harm that could have a material adverse effect on our business, financial condition, or results of operations. 19 Table of Contents Our financial results may be affected by various legal and regulatory proceedings, including antitrust, tax, environmental, or other matters.
In addition, we are subject to laws and sanctions imposed by the U.S. and other jurisdictions where we do business that may prohibit us, or certain of our affiliates, from doing business in certain countries, or restricting the kind of business that we may conduct.
In addition, we are subject to laws and sanctions imposed by the U.S. and other jurisdictions where we do business that may prohibit us, or certain of our affiliates, from doing business in certain countries or with certain customers or restricting the kind of business that we may conduct.
Any charges relating to such impairments could be significant and could have a material adverse impact on our financial condition and results of operations. Our extensive international operations can be adversely impacted by operational, economic, political, security, legal, and currency translation risks that could decrease profitability.
Any charges relating to such impairments could be significant and could have a material adverse impact on our financial condition and results of operations. 12 Table of Contents Our extensive international operations can be adversely impacted by operational, economic, political, security, legal, and currency translation risks that could decrease profitability.
In addition, our operating results are dependent on the continued operation of our production facilities and our ability to meet customer requirements, which depend, in part, on our ability to properly maintain and replace aging assets. We are subject to extensive government regulation in the jurisdictions in which we do business.
In addition, our operating results are dependent on the continued operation of our production facilities and our ability to meet customer requirements, which depend, in part, on our ability to properly maintain and replace aging assets. 14 Table of Contents We are subject to extensive government regulation in the jurisdictions in which we do business.
In fiscal year 2024, 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.
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.
These events could also damage our reputation or otherwise harm our business. Interruption in ordinary sources of raw material or energy supply or an inability to recover increases in energy and raw material costs from customers could result in lost sales or reduced profitability.
These events could also damage our reputation or otherwise harm our business. 16 Table of Contents Interruption in ordinary sources of raw material or energy supply or an inability to recover increases in energy and raw material costs from customers could result in lost sales or reduced profitability.
Our financial results could be impacted adversely by claims under these indemnification provisions. 15 Table of Contents The security of our information technology systems could be compromised, which could adversely affect our ability to operate.
Our financial results could be impacted adversely by claims under these indemnification provisions. The security of our information technology systems could be compromised, which could adversely affect our ability to operate.
In addition, the increasing number of experienced employees becoming retirement-eligible and our company headcount growth further amplify this challenge. The number of our employees has grown both internationally and in the United States, with our total headcount increasing from approximately 16,300 at the end of fiscal 2018 to approximately 23,000 at the end of fiscal 2024.
In addition, the increasing number of experienced employees becoming retirement-eligible amplifies this challenge. The number of our employees has grown both internationally and in the United States, with our total headcount increasing from approximately 16,300 at the end of fiscal 2018 to as high as approximately 23,000 in fiscal 2024.
Our results of operations have been and in the future could be adversely affected by increased costs due to increased competition for skilled talent in the market. In addition, increased turnover and decreased tenure of employees may impact productivity, costs, and organizational culture.
Our results of operations have been and in the future could be adversely affected by increased costs due to increased competition for skilled talent in the market as well as by actions we have taken to manage the size of our workforce. In addition, increased turnover and decreased tenure of employees may impact productivity, costs, and organizational culture.
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, demand for our products may be less than we anticipate and certain projects and our long-term growth strategy could be adversely affected.
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.
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. Even where costs are passed through, price increases can cause lower sales volume. New technologies create performance risks that could impact our financial results or reputation.
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. Even where costs are passed through, price increases can cause lower sales volume.
These financing arrangements may require that we comply with certain performance requirements which, if not met, could result in default and restructuring costs or other losses.
These financing arrangements may require that we comply with certain performance requirements which, if not met, could result in default and restructuring costs or other losses, as well as potential acceleration of cash outflows.
Such restrictions may provide a competitive advantage to competitors who are not subject to comparable restrictions or prevent us from taking advantage of growth opportunities. 14 Table of Contents Further, we cannot guarantee that our internal controls and compliance systems will always protect us from acts committed by employees, agents, business partners or that businesses that we acquire would not violate U.S. and/or non-U.S. laws, including the laws governing payments to government officials, bribery, fraud, kickbacks and false claims, pricing, sales and marketing practices, conflicts of interest, competition, export and import compliance, money laundering, and data privacy.
Further, we cannot guarantee that our internal controls and compliance systems will always protect us from acts committed by employees, agents, business partners or that businesses that we acquire would not violate U.S. and/or non-U.S. laws, including the laws governing payments to government officials, bribery, fraud, kickbacks and false claims, pricing, sales and marketing practices, conflicts of interest, competition, export and import compliance, money laundering, and data privacy.
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.
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.
Delays in receiving required approvals or related to litigation have required us and could in the future require us to delay or abandon certain projects, which may result in higher costs, lower returns, the loss of invested proceeds, and reputational damage. 13 Table of Contents We have in the past and may in the future encounter difficulties related to the development of projects that may result in delays, scope changes and additional costs.
Delays in receiving required approvals, litigation and execution difficulties have required us and could in the future require us to delay or abandon certain projects, which may result in higher costs, lower returns, the loss of invested proceeds, and reputational damage.
For example, when we decide to sell or otherwise dispose of a business or assets, we may be unable to do so on satisfactory terms within our anticipated time frame or at all.
These transactions pose risks and challenges that could negatively impact our business and financial statements. For example, when we decide to sell or otherwise dispose of a business or assets, we may be unable to do so on satisfactory terms within our anticipated time frame or at all.
As we develop new technologies there is a risk that our patent applications may not be granted, or we may not receive sufficient protection of our proprietary interests. We may also expend considerable resources in defending our patents against third-party infringement. It is critical that we protect our proprietary interests to prevent competitive harm.
We own a number of patents and other forms of intellectual property related to our products and services. As we develop new technologies there is a risk that our patent applications may not be granted, or we may not receive sufficient protection of our proprietary interests. We may also expend considerable resources in defending our patents against third-party infringement.
Additionally, there is also a risk that our new technologies may become obsolete and be replaced by other market alternatives. Performance difficulties on these larger projects may have a material adverse effect on our operations and financial results. In addition, performance challenges may adversely affect our reputation and our ability to obtain future contracts.
Additionally, there is also a risk that our new technologies may become obsolete and be replaced by other market alternatives, or that new technologies may not become commercially accepted. Performance difficulties on these larger projects may have a material adverse effect on our operations and financial results.
A disruption in the supply of energy, components, or raw materials, whether due to market conditions, legislative or regulatory actions, natural disasters, public health crises and pandemics, or other disruption, could prevent us from meeting our contractual commitments and harm our business and financial results. 16 Table of Contents Our supply of crude helium for purification and resale is largely dependent upon natural gas production by crude helium suppliers.
A disruption in raw material sources or the supply of energy or components, whether due to market conditions, legislative or regulatory actions, natural disasters, public health crises and pandemics, or other disruption, could prevent us from meeting our contractual commitments and harm our business and financial results.
Excess capacity in our manufacturing facilities or those of our competitors could decrease our ability to maintain pricing and generate profits. In addition, our operating results in one or more segments have in the past, and may in the future, be affected by uncertain or deteriorating economic conditions for particular customer markets within a segment.
In addition, our operating results in one or more segments have in the past, and may in the future, be affected by uncertain or deteriorating economic conditions for particular customer markets within a segment.
A significant and growing portion of our business involves clean hydrogen, carbon capture, gasification, and other large-scale projects that involve challenging engineering, permitting, procurement, and construction phases that may last several years and involve the investment of billions of dollars.
A significant portion of our business involves clean hydrogen, carbon capture, gasification, and other large-scale projects that involve challenging engineering, permitting, procurement, and construction phases that may last several years and involve the investment of billions of dollars. These projects are technically complex, often reliant on significant interaction with government authorities, and face significant financing, development, operational, and reputational risks.
Although uncertain, these developments could increase our costs related to consumption of electric power, hydrogen production, and application of our gasification technology, although these developments may be mitigated by our growth strategy focused on world-scale clean hydrogen projects.
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.
Any such occurrence could adversely affect our projected returns, which may harm our business and financial performance. Our operations may present a safety risk to our employees and others.
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. Our operations may present a safety risk to our employees and others.
These risks may be augmented when the joint venture is operating outside the United States due to differences in language, culture, and regulation, as well as the factors listed above that are relevant to our international operations.
These risks may be augmented when the joint venture is operating outside the United States due to differences in language, culture, and regulation, as well as the factors listed above that are relevant to our international operations. 15 Table of Contents We continually assess the strategic fit of our existing businesses and may divest businesses that are deemed not to fit with our strategic plan or are not achieving the desired return on investment.
Protecting our intellectual property is critical to our technological development, and we may suffer competitive harm from infringement on such rights. As we develop new technologies, it is critical that we protect our intellectual property assets against third-party infringement. We own a number of patents and other forms of intellectual property related to our products and services.
In addition, performance challenges may adversely affect our reputation and our ability to obtain future contracts. Protecting our intellectual property is critical to our technological development, and we may suffer competitive harm from infringement on such rights. As we develop new technologies, it is critical that we protect our intellectual property assets against third-party infringement.
Legal and Regulatory Risks Legislative, regulatory, societal, and market efforts to address global climate change may impact our business and create financial risk. We are the world’s leading supplier of hydrogen, the primary use of which is the production of ultra-low sulfur transportation fuels that have significantly reduced transportation emissions and helped improve human health.
We are the world’s leading supplier of hydrogen, the primary use of which is the production of ultra-low sulfur transportation fuels that have significantly reduced transportation emissions and helped improve human health.
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. In addition, our growth strategy is largely based on expected demand for technologies and projects to limit the impact of global climate change.
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.
Further changes in tax laws in the U.S. or foreign jurisdictions where we operate could have a material adverse effect on our business, results of operations, or financial condition. 19 Table of Contents Actions of activist shareholders may be disruptive and costly.
Further changes in tax laws in the U.S. or foreign jurisdictions where we operate could have a material adverse effect on our business, results of operations, or financial condition. 20 Table of Contents General Risk Factors Catastrophic events could disrupt our operations or the operations of our suppliers or customers, having a negative impact on our business, financial results, and cash flows.
If our GHG emissions-related data, processes, and reporting are incomplete or inaccurate, or if we fail to comply with relevant reporting frameworks from newly emerging regulations, we may incur monetary penalties and reputational harm, and we could become subject to litigation or government investigations, which may also adversely affect our reputation and business. 17 Table of Contents 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.
If our GHG emissions-related data, processes, and reporting are incomplete or inaccurate, or if we fail to comply with relevant reporting frameworks from newly emerging regulations, we may incur monetary penalties and reputational harm, and we could become subject to litigation or government investigations, which may also adversely affect our reputation and business.
Demand for our solutions could be negatively impacted if the public and private sectors reduce their focus on reducing carbon emissions. Reduced demand for our products and services would have a negative impact on our revenues and earnings and could decrease our margins, constrain our operating flexibility, reduce efficient utilization of our manufacturing capacity, or result in unexpected charges.
Reduced demand for our products and services would have a negative impact on our revenues and earnings and could decrease our margins, constrain our operating flexibility, reduce efficient utilization of our manufacturing capacity, or result in unexpected charges. Excess capacity in our manufacturing facilities or those of our competitors could decrease our ability to maintain pricing and generate profits.
These projects are technically complex, often reliant on significant interaction with government authorities, and face significant financing, development, operational, and reputational risks. These projects may also be subject to complex government approvals, as well as legal or regulatory challenges by government authorities or third parties.
These projects may also be subject to complex government approvals, as well as legal or regulatory challenges by government authorities or third parties.
Our growth strategies depend in part on our ability to further penetrate markets outside the United States, such as China, India, the Middle East, and Uzbekistan, and involve significantly larger and more complex projects, including gasification and large-scale hydrogen projects, some in regions where there is the potential for significant economic and political disruptions.
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.
Failure of the technologies to work as predicted, or unintended consequences of new designs or uses, could lead to cost overruns, project delays, financial penalties, or damage to our reputation. We may face difficulties marketing products produced using new technologies including, but not limited to, green hydrogen, which may adversely impact our sales and financial results.
We may face difficulties marketing products produced using new technologies including, but not limited to, green hydrogen, which may adversely impact our sales and financial results.
Risks Related to Our Business Risks related to the approval, execution, and operation of our projects, particularly with respect to our largest projects, may adversely affect our operations or financial results.
A decrease in these debt ratings could increase the cost of borrowing or make it more difficult to obtain financing. 13 Table of Contents Risks Related to Our Business Risks related to the approval, execution, and operation of our projects, particularly with respect to our largest projects, may adversely affect our operations or financial results.
Lower natural gas production resulting from natural gas pricing dynamics, supplier operating or transportation issues, or other interruptions in sales from crude helium suppliers, can reduce our supplies of crude helium available for processing and resale to customers.
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.
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.
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.
Any legislation or governmental action that limits or taxes GHG emissions could negatively impact our growth, increase our operating costs, or reduce demand for certain of our products, particularly for our core industrial gases business.
Any legislation or governmental action that limits or taxes GHG emissions could negatively impact our growth, increase our operating costs, or reduce demand for certain of our products, particularly for our core industrial gases business. 18 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.
We are continually developing and implementing new technologies and product offerings. Existing technologies are being implemented in products and designs or at scales beyond our experience base. These technological expansions can create nontraditional performance risks to our operations.
New technologies create performance risks that could impact our financial results or reputation, and failure to develop new technologies may harm our competitive position. We are continually developing and implementing new technologies and product offerings. Existing technologies, including those procured exclusively from third-party suppliers, are being implemented in products and designs or at scales beyond our experience base.
In addition, gasification enables the conversion of lower value feedstocks into cleaner energy and value-added products; however, our gasification projects also produce CO 2 .
In addition, gasification enables the conversion of lower value feedstocks into cleaner energy and value-added products; however, our gasification projects also produce CO 2 . Some of our operations are within jurisdictions that have or are developing regulatory regimes governing disclosure of GHG emissions, including CO 2, which may lead to direct and indirect costs on our operations.
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We continually assess the strategic fit of our existing businesses and may divest businesses that are deemed not to fit with our strategic plan or are not achieving the desired return on investment. These transactions pose risks and challenges that could negatively impact our business and financial statements.
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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.
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Some of our operations are within jurisdictions that have or are developing regulatory regimes governing disclosure of GHG emissions, including CO 2 , such as the European Union's CSRD, California’s Climate Corporate Data Accountability Act and Climate Related Financial Risk Act, and similar regulations under consideration by the SEC, which may lead to direct and indirect costs on our operations.
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Weak overall demand or specific customer conditions may also cause customer shutdowns or defaults or otherwise make us unable to operate facilities profitably and may force sale or abandonment of facilities and equipment or prevent projects from coming on-stream when expected.
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In addition, our growth strategy is 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.
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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.
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While we value constructive feedback from our investors and regularly engage in dialogue with them on various matters, the Company may nonetheless be subject to actions or proposals from activist shareholders that may not align with our business strategies or the interests of our other shareholders.
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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. In addition, our borrowing costs can be affected by short and long-term debt ratings assigned by independent rating agencies.
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An activist investor, Mantle Ridge L.P. and certain of its affiliates (together, "Mantle Ridge") recently nominated a slate of nine director candidates to stand for election at the Company’s 2025 Annual Meeting of Shareholders and on 19 November 2024, Mantle Ridge filed a preliminary proxy statement with the SEC indicating its intention to solicit proxies on behalf of its nominees.
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We have in the past and may in the future encounter difficulties related to the development of projects that may result in delays, scope changes and additional costs, or project cancellations.
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Because Mantle Ridge nominated a full slate of nine directors, if all or a majority of Mantle Ridge's nominees are elected, Mantle Ridge would gain control of the Company without paying a premium to shareholders. The Board of Directors accordingly concluded that Mantle Ridge's proposal should be decided by the shareholders of the Company and not by the Board.
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Such restrictions may provide a competitive advantage to competitors who are not subject to comparable restrictions or prevent us from taking advantage of growth opportunities.
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The resulting proxy contest could be costly and time consuming for the Company and may divert management’s and our Board’s attention and resources from our business.
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Our supply of crude helium for purification and resale is largely dependent upon natural gas production by crude helium suppliers.
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In addition, if nominees advanced by Mantle Ridge are elected to our Board with a specific agenda, it may adversely affect our ability to effectively and timely implement our growth strategy, which could have an adverse effect on our business and our results of operations and financial condition.
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These technological expansions can create nontraditional performance risks to our operations. Failure of the technologies to work as predicted, or unintended consequences of new designs or uses, could lead to cost overruns, project delays, financial penalties, or damage to our reputation.
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If a sufficient number of Mantle Ridge's nominees are elected, it may be deemed to constitute a change in control under certain of our material contracts and agreements.
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Further, if we are unsuccessful in developing new technologies, including development and application of artificial intelligence, our development activities do not keep pace with those of our competitors, or if we do not create new technologies that benefit customers, our competitive position and operating results may be negatively affected.
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As a result of these factors, the proxy contest may cause significant fluctuation in our stock price based on temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals and prospects of our business. Even if we are successful in this proxy contest, we may incur significant expenses.
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It is critical that we protect our proprietary interests to prevent competitive harm. 17 Table of Contents Risks related to pension benefit plans may adversely impact our results of operations and cash flows. Pension benefits represent significant financial obligations that will be ultimately settled in the future with employees who meet eligibility requirements.
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In addition, perceived uncertainties as to our future direction, strategy, or leadership created by the proxy contest may result in the loss of business opportunities and make it more difficult to attract and retain investors, customers, employees, and other business partners.
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Because of the uncertainties involved in estimating the timing and amount of future payments and asset returns, significant estimates are required to calculate pension expense and liabilities related to our plans. We utilize the services of third-party actuaries, whose models support these calculations.
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We cannot predict the outcome or timing of any matters relating to the anticipated proxy contest or the ultimate impact that such matters may have on our business, liquidity, financial condition, or results of operations.
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In addition to complying with local regulatory requirements for recognizing pension expense, liabilities, and cash flows, several key assumptions are used in the actuarial models to calculate pension expense and liability amounts recorded in the consolidated financial statements as well as the amounts that we contribute to such plans.
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General Risk Factors Catastrophic events could disrupt our operations or the operations of our suppliers or customers, having a negative impact on our business, financial results, and cash flows. 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.
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These assumptions include, but are not limited to, discount rates, expected long-term rates of return on plan assets, and demographic factors. Changes in actuarial assumptions, interest and inflation rates, and volatility in capital markets may adversely impact the valuation of pension liabilities and the performance of asset portfolios.
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Additionally, significant changes in actual investment returns on pension assets, discount rates, or regulatory developments could impact future results of operations and required pension contributions. Legal and Regulatory Risks Legislative, regulatory, societal, and market efforts to address global climate change may impact our business and create financial risk.
Added
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.
Added
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.
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However, we have been taking actions since that time to reduce the size of our workforce and currently expect headcount to stabilize at approximately 20,000 at the end of fiscal 2026 as we complete certain projects and complete actions to right-size the organization.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

10 edited+4 added−2 removed5 unchanged
Biggest changeThe Company regularly assesses industry best practices, frameworks, and standards, and leverages them to advance its cybersecurity risk management maturity. These frameworks include the International Society of Automation and the International Electrotechnical Commission standards for industrial automation, as well as the National Institute of Standards and Technology.
Biggest changeThis program involves relevant employees as well as third-party subject matter experts who collaborate to identify and proactively address risks. The Company regularly assesses industry best practices, frameworks, and standards, and leverages them to advance its cybersecurity risk management maturity.
Incidents that are elevated based on their potential severity, including any event that is potentially material, are promptly escalated and analyzed for potential external reporting requirements. As part of the Company’s information security training program, all employees participate in various cybersecurity awareness activities, including an annual Information Security Awareness training module and monthly simulated phishing events.
Incidents that are elevated based on their potential severity, including any event that is potentially material, are promptly escalated and analyzed for potential external reporting requirements. As part of the Company’s information security training program, all employees participate in various cybersecurity awareness activities, including an annual Information Security Awareness training module and monthly simulated email phishing events.
The Company has implemented a thorough cybersecurity program for assessing, identifying, and managing material risks from cybersecurity threats as a fully integrated component of the Company's overall Enterprise Risk Management ("ERM"). In fiscal year 2024, we achieved our primary cybersecurity risk management objective of having no material cybersecurity incidents.
The Company has implemented a thorough cybersecurity program for assessing, identifying, and managing material risks from cybersecurity threats as a fully integrated component of the Company's overall Enterprise Risk Management ("ERM") process. In fiscal year 2025, we achieved our primary cybersecurity risk management objective of having no material cybersecurity incidents.
We leverage third-party service partners to expand the capabilities of our cybersecurity program. This may include testing of the program’s protection measures as well as services for incident detection, investigation, and recovery. We also leverage third-party service providers to conduct tabletop exercises and perform assessments against cybersecurity frameworks. Our suppliers and third-party service providers are subject to cybersecurity obligations.
In addition to our internal resources, we leverage third-party service partners to expand the capabilities of our cybersecurity program. This may include testing the program’s protection measures as well as services for incident detection, investigation, and recovery. We also leverage third-party service providers to conduct tabletop exercises and perform assessments against cybersecurity frameworks.
Our cybersecurity program includes procedures for the detection, analysis, and mitigation of cybersecurity incidents. Our cybersecurity incident response includes criteria for prioritization and escalation based on severity under an established incident prioritization framework. Incidents are reported internally to senior management, the Board or the Board's Audit and Finance Committee, as appropriate based on the potential severity of the incident.
Our cybersecurity incident response includes criteria for prioritization and escalation based on severity under an established incident prioritization framework. Incidents are reported internally to senior management, the Board or the Board's Audit and Finance Committee, as appropriate based on this framework.
Our CIO is a member of the Company’s Management Board and is responsible for the administration of the cybersecurity risk management program.
Our CIO is a member of the Company’s senior executive leadership team and is responsible for the administration of the cybersecurity risk management program.
For a discussion of risks related to potential cybersecurity incidents, please refer to Item 1A, Risk Factors , of this Annual Report on Form 10-K. 21 Table of Contents Cybersecurity Governance Our Board of Directors recognizes the importance of cybersecurity and has oversight responsibility for cybersecurity risks.
For a discussion of risks related to potential cybersecurity incidents, please refer to Item 1A, Risk Factors - Risks Related to Our Business - Risks related to the approval, execution, and operation of our projects, particularly with respect to our largest projects, may adversely affect our operations or results of operations , of this Annual Report on Form 10-K. 22 Table of Contents Cybersecurity Governance Our Board of Directors recognizes the importance of cybersecurity and has oversight responsibility for cybersecurity risks.
In addition, we maintain relevant business continuity and disaster recovery plans as part of our overall cybersecurity risk management strategy.
The Company maintains policies and procedures for preventive controls for enterprise applications including, but not limited to, access controls and change management. In addition, we maintain relevant business continuity and disaster recovery plans as part of our overall cybersecurity risk management strategy.
Our CISO has experience in leading global enterprise and operational technology cybersecurity programs, maintains a Certified Information Systems Security Professional certification, and has completed CISO executive education at Carnegie Mellon University. The Information Security leadership team that reports to the CISO is composed of four security leaders with over 80 years of combined experience and multiple professional certifications.
The Information Security leadership team that reports to the CISO is composed of four security leaders with over 80 years of combined experience and multiple professional certifications. 23 Table of Contents
Prior to engagement, we assess the cybersecurity posture of third-party service providers who store, process, or transmit Air Products' information. The Company maintains policies and procedures for preventive controls for enterprise applications including, but not limited to, access controls and change management.
Prior to engagement, we assess the cybersecurity posture of third-party service providers who store, process, or transmit Air Products' information. In many cases, our agreements include requirements for suppliers and other service providers to notify us if they suffer a cybersecurity incident that may affect us.
Removed
Under the direction of our CIO, our CISO leads the execution of the cybersecurity risk management program for our enterprise and operational technology systems. Our CISO is a seasoned cybersecurity executive with over 30 years of broad digital technology experience at Air Products.
Added
These frameworks include the International Society of Automation and the International Electrotechnical Commission standards for industrial automation (ISA 62443) and information security (ISO 27001), as well as the National Institute of Standards and Technology Cybersecurity Framework (NIST CSF). Our cybersecurity program includes risk-based procedures for the detection, analysis, and mitigation of cybersecurity incidents.
Removed
Our CISO has announced his intention to retire at the end of December 2024. The Company expects to appoint a successor in the near future.
Added
In fiscal year 2025, Air Products conducted a comprehensive internal audit of its cybersecurity program to evaluate the effectiveness of controls across enterprise information technology, operational technology, and pipeline environments. Our suppliers and third-party service providers are subject to cybersecurity obligations.
Added
Under the direction of our CIO, our CISO oversees the development and implementation of our enterprise-wide cybersecurity risk management program, ensuring the protection of both enterprise and operational technology systems. Our CISO joined the Company in 2025 with an extensive background in cybersecurity strategy, governance, risk, compliance, and data protection.
Added
Prior to joining Air Products, our CISO spent over 25 years in executive security and operations management across the industrial manufacturing, software, and financial services industries. Our CISO maintains professional certifications in cybersecurity and information management, including as a Certified Chief Information Security Officer, Certified Information Systems Security Professional, and Certified Information Systems Manager.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe Rotoflow business operates manufacturing and service facilities in Texas and Pennsylvania in the United States with management, engineering, and sales support based in the Allentown offices referred to above and a nearby leased office.
Biggest changeThe Rotoflow business operates manufacturing and service facilities in Texas and Pennsylvania in the United States with management, engineering, and sales support based in the Allentown offices referred to above and a nearby leased office. Research and development activities are primarily conducted at owned locations in the United States, the United Kingdom, and Saudi Arabia.
We lease administrative offices in the United States, Canada, Spain, Malaysia, and China, primarily for our Finance and Business Services organization. Descriptions of the properties used by our five business segments are provided below. We believe that our facilities are suitable and adequate for our current and anticipated future levels of operation.
We lease administrative offices in the United States, Canada, England, Spain, Malaysia, and China, primarily for our Finance and Business Services organization. Descriptions of the properties used by our five business segments are provided below. We believe that our facilities are suitable and adequate for our current and anticipated future levels of operation.
Europe Our Europe segment operates from approximately 245 production and distribution facilities in Europe, of which approximately 35% are on owned property. We have sufficient property rights and permits for the ongoing operation of our pipeline systems in the Netherlands, the United Kingdom, Belgium, France, and Germany.
Europe Our Europe segment operates from approximately 245 production and distribution facilities in Europe, of which approximately 35% are on owned property. We have sufficient property rights and permits for the ongoing operation of our pipeline systems in the Netherlands, the United Kingdom, Belgium, and France.
Management and sales support is based in our Allentown, Medellin, and Santiago offices referred to above, and at approximately 20 leased properties located throughout North and South America. Asia Our Asia segment operates from approximately 300 production and distribution facilities within the region, of which approximately 35% are on owned property or long-duration term grants.
Management and sales support is based in our Allentown, Medellin, and Santiago offices referred to above, and at approximately 30 leased properties located throughout North and South America. Asia Our Asia segment operates from approximately 300 production and distribution facilities within the region, of which approximately 35% are on owned property or long-duration term grants.
Item 2. Properties Air Products and Chemicals, Inc. owns its principal administrative offices located at the Company's global headquarters and co-located research and development facility in Allentown, Pennsylvania, as well as regional offices in Hersham, England; Medellin, Colombia; and Santiago, Chile. We lease the principal administrative offices in Shanghai, China; Pune, India; Vadodara, India; and Dhahran, Saudi Arabia.
Item 2. Properties Air Products and Chemicals, Inc. owns its principal administrative offices located at the Company's global headquarters and co-located research and development facility in Allentown, Pennsylvania, as well as regional offices in Medellin, Colombia; and Santiago, Chile. We lease the principal administrative offices in Shanghai, China; Pune, India; Vadodara, India; and Dhahran, Saudi Arabia.
We have sufficient property rights and permits for the ongoing operation of our pipeline systems in China, South Korea, Taiwan, Malaysia, Singapore, and Indonesia. Management and sales support for this business segment is based in Shanghai, China, and Kuala Lumpur, Malaysia, and in approximately 35 leased office locations throughout the region.
We have sufficient property rights and permits for the ongoing operation of our pipeline systems in China, South Korea, Taiwan, Malaysia, and Indonesia. Management and sales support for this business segment is based in Shanghai, China, and Kuala Lumpur, Malaysia, and in approximately 30 leased office locations throughout the region.
Americas Our Americas segment operates from approximately 465 production and distribution facilities in North and South America. Of these facilities, approximately 25% are located on owned property. We have sufficient property rights and permits for the ongoing operation of our pipeline systems in the Gulf Coast, California, and Arizona in the United States and Alberta and Ontario in Canada.
Americas Our Americas segment operates from approximately 445 production and distribution facilities in North and South America. Of these facilities, approximately 20% are located on owned property. We have sufficient property rights and permits for the ongoing operation of our pipeline systems in the Gulf Coast, California, and Arizona in the United States and Alberta and Ontario in Canada.
Management and sales support for this business segment is based in Hersham, England; and Barcelona, Spain; and at approximately 15 leased regional office sites and 15 leased local office sites throughout the region. 22 Table of Contents Middle East and India Our Middle East and India segment operates from approximately 15 production and distribution facilities throughout the region, all of which are leasehold properties.
Management and sales support for this business segment is based in Chertsey, England; and Barcelona, Spain; and at approximately 20 leased regional office sites and 15 leased local office sites throughout the region. Middle East and India Our Middle East and India segment operates from approximately 20 production and distribution facilities throughout the region, all of which are leasehold properties.
Helium is processed at multiple sites in the United States and then distributed to and from transfill sites globally. Our Corporate and other segment also has management, sales, engineering support, and corporate administrative functions that are based in our administrative offices referred to above.
Helium is processed at multiple sites in the United States, Algeria, and Qatar, and distributed globally through a network of transfill sites. Our Corporate and other segment also has management, sales, engineering support, and corporate administrative functions that are based in our administrative offices referred to above. 24 Table of Contents
Removed
Prior to its sale on 30 September 2024, the LNG business operated a manufacturing facility in Florida in the United States with management, engineering, and sales support based in the Allentown offices referred to above. Research and development activities are primarily conducted at owned locations in the United States, the United Kingdom, and Saudi Arabia.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe fines are based on a percentage of our total revenue in Brazil in 2003. 23 Table of Contents We have denied the allegations made by the authorities and filed an appeal in October 2010 with the Brazilian courts. On 6 May 2014, our appeal was granted and the fine against Air Products Brasil Ltda. was dismissed.
Biggest changeCADE imposed a civil fine of R$179.2 million (approximately $34 as of 30 September 2025) on Air Products Brasil Ltda., which was based on a percentage of our total revenue in Brazil in 2003. In May 2014, our appeal was granted and the fine was dismissed.
Other than the matters discussed above, we do not currently believe there are any legal proceedings, individually or in the aggregate, that are reasonably possible to have a material impact on our financial condition, results of operations, or cash flows.
We do not currently believe there are any legal proceedings, individually or in the aggregate, that are reasonably possible to have a material impact on our financial condition, results of operations, or cash flows.
Presently there are 26 sites on which a final settlement has not been reached where we, usually along with others, have been designated a potentially responsible party by the Environmental Protection Agency or are otherwise engaged in investigation or remediation, including cleanup activity at certain of our current and former manufacturing sites.
Presently there are 26 sites on which a final settlement or remediation has not been achieved where we, usually along with others, have been designated as a potentially responsible party by environmental authorities or are otherwise engaged in investigation or remediation, including cleanup activity at certain of our former and current manufacturing sites.
In September 2010, the Brazilian Administrative Council for Economic Defense ("CADE") issued a decision against our Brazilian subsidiary, Air Products Brasil Ltda., and several other Brazilian industrial gas companies for alleged anticompetitive activities. CADE imposed a civil fine of R$179.2 million (approximately $33 million at 30 September 2024) on Air Products Brasil Ltda.
In September 2010, the Brazilian Administrative Council for Economic Defense ("CADE") issued a decision against our Brazilian subsidiary, Air Products Brasil Ltda., and several other Brazilian industrial gas companies for alleged anticompetitive activities.
However, a future charge for regulatory fines or damage awards could have a significant impact on our net income in the period in which it is recorded.
However, a future charge for regulatory fines or damage awards could have a significant impact on our net income in the period in which it is recorded. Item 4. Mine Safety Disclosures Not applicable. 25 Table of Contents PART II
Removed
This fine was based on a recommendation by a unit of the Brazilian Ministry of Justice, following an investigation beginning in 2003, which alleged violation of competition laws with respect to the sale of industrial and medical gases.
Added
CADE appealed that ruling and in October 2025 the Supreme Court of Brazil rendered a judgment confirming the appellate ruling, which annulled the administrative proceeding and the fine imposed by CADE. Under applicable law, no further remedies are available and the judgment is final.
Removed
CADE has appealed that ruling and the matter remains pending. We, with advice of our outside legal counsel, have assessed the status of this matter and have concluded that, although an adverse final judgment after exhausting all appeals is possible, such a judgment is not probable. As a result, no provision has been made in the consolidated financial statements.
Removed
In the event of an adverse final judgment, we estimate the maximum possible loss to be the full amount of the fine of R$179.2 million (approximately $33 million at 30 September 2024) plus interest accrued thereon until final disposition of the proceedings.
Removed
During the third quarter of fiscal year 2024, we settled a dispute regarding energy management charges related to a severe winter weather storm that impacted the U.S. Gulf Coast in February 2021.
Removed
As a result of the settlement, we recognized a gain of $7.7 million that is reflected within "Other income (expense), net" on our consolidated income statements for the fiscal year ended 30 September 2024. We collected the settlement in full in July 2024.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe figures assume an initial investment of $100 and the reinvestment of all dividends. Sept 2019 Sept 2020 Sept 2021 Sept 2022 Sept 2023 Sept 2024 Air Products & Chemicals, Inc. 100 137 120 112 140 150 S&P 500 Index 100 115 150 126 154 210 S&P 500 Materials Index 100 112 142 125 147 184
Biggest changeSept 2020 Sept 2021 Sept 2022 Sept 2023 Sept 2024 Sept 2025 Air Products & Chemicals, Inc. 100 120 112 140 150 141 S&P 500 Index 100 150 126 154 210 247 S&P 500 Materials Index 100 142 125 147 184 176 Item 6. [Reserved] Not applicable. 27 Table of Contents
Any future purchases will be completed at our discretion while maintaining sufficient funds for investing in our business and pursuing growth opportunities. 25 Table of Contents Performance Graph The performance graph below compares the five-year cumulative returns of our common stock with those of the Standard & Poor’s 500 Index ("S&P 500 Index") and the Standard & Poor’s 500 Materials Index ("S&P 500 Materials Index").
Any future purchases will be completed at our discretion while maintaining sufficient funds for investing in our business and pursuing growth opportunities. 26 Table of Contents Performance Graph The performance graph below compares the five-year cumulative returns of our common stock with those of the Standard & Poor’s 500 Index ("S&P 500 Index") and the Standard & Poor’s 500 Materials Index ("S&P 500 Materials Index").
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. Dividends are paid quarterly, usually during the sixth week after the close of the fiscal quarter. We have increased our quarterly dividend for 42 consecutive years.
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. Dividends are paid quarterly, usually during the sixth week after the close of the fiscal quarter. We have increased our quarterly dividend for 43 consecutive years.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities Our common stock is listed on the New York Stock Exchange under the symbol "APD". As of 31 October 2024, there were 4,238 record holders of our common stock.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities Our common stock is listed on the New York Stock Exchange under the symbol "APD". As of 31 October 2025, there were 4,036 record holders of our common stock.
As of 30 September 2024, $485.3 million in share repurchase authorization remained available.
As of 30 September 2025, $485.3 million in share repurchase authorization remained available.
Dividend information for each quarter of fiscal years 2024 and 2023 is summarized below: 2024 2023 Fourth quarter $1.77 $1.75 Third quarter 1.77 1.75 Second quarter 1.77 1.75 First quarter 1.75 1.62 Total $7.06 $6.87 Purchases of Equity Securities by the Issuer On 15 September 2011, the Board of Directors authorized the repurchase of up to $1.0 billion of our outstanding common stock.
Dividend information for each quarter of fiscal years 2025 and 2024 is summarized below: 2025 2024 Fourth quarter $1.79 $1.77 Third quarter 1.79 1.77 Second quarter 1.79 1.77 First quarter 1.77 1.75 Total $7.14 $7.06 Purchases of Equity Securities by the Issuer On 15 September 2011, the Board of Directors authorized the repurchase of up to $1.0 billion of our outstanding common stock.
Added
The figures assume an initial investment of $100 and the reinvestment of all dividends.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

138 edited+113 added−73 removed63 unchanged
Biggest changePer share impacts are calculated independently and may not sum to total diluted EPS and total adjusted diluted EPS due to rounding. 2024 vs. 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 Gain on sale of business (1,575.6) — — (377.2) (1,198.4) (5.38) Business and asset actions 57.0 — — 13.2 43.8 0.20 Loss on de-designation of cash flow hedges (A) — — 16.3 1.4 4.3 0.02 Non-service pension cost, net — — 102.0 25.2 76.8 0.34 2024 Non-GAAP ("Adjusted") $2,947.5 $647.7 $44.5 $607.5 $2,768.6 $12.43 2023 GAAP $2,494.6 $604.3 ($39.0) $551.2 $2,292.8 $10.30 Business and asset actions (B) 244.6 — — 34.7 204.9 0.92 Non-service pension cost, net — — 86.8 21.6 65.2 0.29 2023 Non-GAAP ("Adjusted") $2,739.2 $604.3 $47.8 $607.5 $2,562.9 $11.51 $ Change Non-GAAP ("Adjusted") $0.92 % Change Non-GAAP ("Adjusted") 8 % (A ) Includes $10.6 attributable to noncontrolling interests.
Biggest changeFY2024 Operating Income/ Loss Equity Affiliates' Income Other Non- Operating Inc/Exp, Net Income Tax Benefit/ Expense Net Income/Loss Attributable to Air Products Earnings/ Loss per Share FY2025 GAAP ($877.0) $647.7 $2.6 ($94.3) ($386.5) ($1.74) FY2024 GAAP 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) 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 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 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 FY2024 Adjusted Measures $2,947.5 $647.7 $44.5 $607.5 $2,768.6 $12.43 $ Adjusted Change ($89.8) ($0.40) % Adjusted Change (3%) (3%) (A) Charge attributable to noncontrolling interests was $10.7.
Actual future contributions will depend on future funding legislation, discount rates, investment performance, plan design, and various other factors. 48 Table of Contents CRITICAL ACCOUNTING POLICIES AND ESTIMATES Refer to Note 1, Basis of Presentation and Major Accounting Policies , and Note 2, New Accounting Guidance , to the consolidated financial statements for a description of our major accounting policies and information concerning implementation and impact of new accounting guidance.
Actual future contributions will depend on future funding legislation, discount rates, investment performance, plan design, and various other factors. 55 Table of Contents CRITICAL ACCOUNTING POLICIES AND ESTIMATES Refer to Note 1, Basis of Presentation and Major Accounting Policies , and Note 2, New Accounting Guidance , to the consolidated financial statements for a description of our major accounting policies and information concerning implementation and impact of new accounting guidance.
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.
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 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.
Substantially all the funding we provide to NGHC is limited for use by the venture for capital expenditures.
Substantially all the funding we provide to NGHC is limited for use by the venture for its capital expenditures.
A 1% increase or decrease in our effective tax rate may result in a decrease or increase to net income, respectively, of approximately $48. Disclosures related to income taxes are included in Note 24, Income Taxes , to the consolidated financial statements.
A 1% increase or decrease in our effective tax rate may result in a decrease or increase to net income, respectively, of approximately $4. Disclosures related to income taxes are included in Note 24, Income Taxes , to the consolidated financial statements.
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.
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.
Certain of these on-site contracts contain complex terms and provisions regarding tolling arrangements, minimum payment requirements, variable components, pricing provisions, and amendments, which require significant judgment to determine the amount and timing of revenue recognition. Income Taxes We account for income taxes under the asset and liability method.
Certain of these on-site contracts contain complex terms and provisions regarding tolling arrangements, minimum payment requirements, variable components, pricing provisions, and amendments, which require significant judgment to determine the amount and timing of revenue recognition. 60 Table of Contents Income Taxes We account for income taxes under the asset and liability method.
Future changes in the discount rate and actual returns on plan assets could impact the actuarial gain or loss and resulting amortization in years beyond fiscal year 2025. 47 Table of Contents Pension Funding Funded Status The projected benefit obligation represents the actuarial present value of benefits attributable to employee service rendered to date, including the effects of estimated future salary increases.
Future changes in the discount rate and actual returns on plan assets could impact the actuarial gain or loss and resulting amortization in years beyond fiscal year 2026. 54 Table of Contents Pension Funding Funded Status The projected benefit obligation represents the actuarial present value of benefits attributable to employee service rendered to date, including the effects of estimated future salary increases.
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.
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.
A discussion of changes from fiscal year 2022 to fiscal year 2023 and other financial information related to fiscal year 2022 is available in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations , of our Annual Report on Form 10-K for the fiscal year ended 30 September 2023, which was filed with the SEC on 16 November 2023.
A discussion of changes from fiscal year 2023 to fiscal year 2024 and other financial information related to fiscal year 2023 is available in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations , of our Annual Report on Form 10-K for the fiscal year ended 30 September 2024, which was filed with the SEC on 21 November 2024.
In the fourth quarter of fiscal year 2024, we conducted our annual assessment and concluded that it was more likely than not that the fair value of each asset was greater than its carrying value. Impairment of Assets: Equity Method Investments Investments in and advances to equity affiliates totaled $4,792.5 as of 30 September 2024.
In the fourth quarter of fiscal year 2025, we conducted our annual assessment and concluded that it was more likely than not that the fair value of each asset was greater than its carrying value. Impairment of Assets: Equity Method Investments Investments in and advances to equity affiliates totaled approximately $5.4 billion as of 30 September 2025.
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 . Comparisons included in the discussion that follows are for fiscal year 2024 versus ("vs.") fiscal year 2023.
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.
A 50 bp increase or decrease in the estimated rate of return on plan assets may result in a decrease or increase, respectively, to pension expense of approximately $16 per year. We use a market-related valuation method for recognizing certain investment gains or losses for our significant pension plans.
Lower returns on the plan assets result in higher pension expense. A 50 bp increase or decrease in the estimated rate of return on plan assets may result in a decrease or increase, respectively, to pension expense of approximately $18 per year. We use a market-related valuation method for recognizing certain investment gains or losses for our significant pension plans.
The amount of service costs capitalized in fiscal years 2024 and 2023 was not material.
The amount of service costs capitalized in fiscal years 2025 and 2024 was not material.
Similarly, a future charge for regulatory fines or damage awards associated with litigation could have a significant impact on our net income in the period in which it is recorded.
Similarly, a future charge for regulatory fines or damage awards associated with litigation could have a significant impact on our net income in the period in which it is recorded. 62 Table of Contents
Goodwill represents the excess of the aggregate purchase price, plus the fair value of any noncontrolling interest and previously held equity interest in the acquiree, over the fair value of identifiable net assets of an acquired entity. Goodwill, net was $905.1 as of 30 September 2024.
Goodwill represents the excess of the aggregate purchase price, plus the fair value of any noncontrolling interest and previously held equity interest in the acquiree, over the fair value of identifiable net assets of an acquired entity. Goodwill, net was $963.9 as of 30 September 2025.
See the impairment discussion above under " Impairment of Assets – Plant and Equipment " for a description of how impairment losses are determined. Indefinite-lived intangible assets as of 30 September 2024 totaled $36.3 and consisted of trade names and trademarks.
See the impairment discussion above under " Impairment of Assets – Plant and Equipment " for a description of how impairment losses are determined. Indefinite-lived intangible assets as of 30 September 2025 totaled $35.1 and consisted of trade names and trademarks.
For information concerning activity with our related parties, refer to Note 25, Supplemental Information , to the consolidated financial statements. 27 Table of Contents 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.
For information concerning activity with our related parties, refer to Note 25, Supplemental Information , to the consolidated financial statements. 28 Table of Contents BUSINESS OVERVIEW 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.
A reconciliation of cash used for investing activities to our reported capital expenditures is provided below: Fiscal Year Ended 30 September 2024 2023 Cash used for investing activities $4,919.2 $5,916.4 Proceeds from sale of assets and investments 1,878.8 25.4 Purchases of investments (141.4) (640.1) Proceeds from investments 470.7 897.0 Other investing activities 72.4 4.8 NGHC expenditures not funded by Air Products' equity (A) (2,047.7) (979.1) Capital expenditures $5,152.0 $5,224.4 (A) Reflects the portion of "Additions to plant and equipment, including long-term deposits" that is associated with NGHC, less our approximate cash investment in the joint venture. 42 Table of Contents LIQUIDITY AND CAPITAL RESOURCES We believe we have sufficient cash, cash flows from operations, and funding sources to meet our liquidity needs.
A reconciliation of cash used for investing activities to our reported capital expenditures is provided below: Fiscal Year Ended 30 September 2025 2024 Cash used for investing activities $7,168.7 $4,919.2 Proceeds from sale of assets and investments 245.8 1,878.8 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) (2,470.7) (2,047.7) Capital expenditures $5,064.1 $5,152.0 (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. 48 Table of Contents LIQUIDITY AND CAPITAL RESOURCES We believe we have sufficient cash, cash flows from operations, and access to funding sources to meet our liquidity needs.
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. 51 Table of Contents Revenue Recognition: Cost Incurred Input Method Revenue from sale of equipment contracts is generally recognized over time as we have an enforceable right to payment for performance completed to date and our performance under the contract terms does not create an asset with alternative use.
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. 59 Table of Contents Revenue Recognition: Cost Incurred Input Method Revenue from sale of equipment contracts is generally recognized over time as we have an enforceable right to payment for performance completed to date and our performance under the contract terms does not create an asset with alternative use.
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.
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, totaling $89.1. 49 Table of Contents Working capital changes in fiscal year 2024 resulted in a net use of cash of $183.0.
Net Periodic Cost The table below summarizes the components of net periodic cost for our U.S. and international defined benefit pension plans for the fiscal years ended 30 September: 2024 2023 Service cost $20.9 $23.2 Non-service related costs 102.0 86.8 Other 0.9 0.9 Net Periodic Cost $123.8 $110.9 Net periodic cost was $123.8 and $110.9 in fiscal years 2024 and 2023, respectively.
Net Periodic Cost The table below summarizes the components of net periodic cost for our U.S. and international defined benefit pension plans for the fiscal years ended 30 September: 2025 2024 Service cost $20.7 $20.9 Non-service related costs 45.0 102.0 Other 0.3 0.9 Net Periodic Cost $66.0 $123.8 Net periodic cost was $66.0 and $123.8 in fiscal years 2025 and 2024, respectively.
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.
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. 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.
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 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.
Management's Discussion and Analysis of Financial Condition and Results of Operations Business Overview 28 2024 in Summary 29 Outlook 31 Results of Operations 31 Reconciliations of Non-GAAP Financial Measures 37 Liquidity and Capital Resources 43 Pension Benefits 47 Critical Accounting Policies and Estimates 49 This Management’s Discussion and Analysis contains “forward-looking statements” within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements about business outlook.
Management's Discussion and Analysis of Financial Condition and Results of Operations Business Overview 29 2025 in Summary 30 Outlook 32 Results of Operations 33 Reconciliations of Non-GAAP Financial Measures 42 Liquidity and Capital Resources 49 Pension Benefits 54 Critical Accounting Policies and Estimates 56 This Management’s Discussion and Analysis contains “forward-looking statements” within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements about business outlook.
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.
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.
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.
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.
However, when we do not expect sufficient sources of future taxable income to realize the benefit of the operating losses or tax credit carryforwards, these deferred tax assets are reduced by a valuation allowance.
We believe that our recorded tax liabilities adequately provide for these assessments. Deferred tax assets are recorded for operating losses and tax credit carryforwards. However, when we do not expect sufficient sources of future taxable income to realize the benefit of the operating losses or tax credit carryforwards, these deferred tax assets are reduced by a valuation allowance.
Our management has reviewed these critical accounting policies and estimates and related disclosures with the Audit and Finance Committee of our Board of Directors. 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.
Our management has reviewed these critical accounting policies and estimates and related disclosures with the Audit and Finance Committee of our Board of Directors. Depreciable Lives of Plant and Equipment 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.
This is a calculated value that recognizes investment gains and losses on equities over a five-year period from the year in which they occur and reduces year-to-year volatility. The market-related value for non-equity investments equals the actual fair value.
This is a calculated value that recognizes investment gains and losses on equities over a five-year period from the year in which they occur and reduces year-to-year volatility. The market-related value for non-equity investments equals the actual fair value. Expense in future periods will be impacted as gains or losses are recognized in the market-related value of assets.
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.
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.
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.
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.
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.
During fiscal years 2024 and 2023, our cash contributions to funded pension plans and benefit payments for unfunded pension plans were $34.7 and $32.6, respectively. For fiscal year 2025, cash contributions to defined benefit plans are estimated to be $30 to $40.
During fiscal years 2025 and 2024, our cash contributions to funded pension plans and benefit payments for unfunded pension plans were $29.9 and $34.7, respectively. For fiscal year 2026, cash contributions to defined benefit plans are estimated to be $25 to $35.
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.
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.
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.
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.
The table below presents a reconciliation of the GAAP effective tax rate to our adjusted effective tax rate: Fiscal Year Ended 30 September 2024 2023 Income tax provision $944.9 $551.2 Income from continuing operations before taxes 4,821.2 2,882.4 Effective tax rate 19.6 % 19.1 % Income tax provision $944.9 $551.2 Adjustments for tax impacts on disclosed items: Gain on sale of business (377.2) — Business and asset actions 13.2 34.7 Loss on de-designation of cash flow hedges 1.4 — Non-service pension cost, net 25.2 21.6 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: Gain on sale of business (1,575.6) — Business and asset actions 57.0 244.6 Loss on de-designation of cash flow hedges 16.3 — Non-service pension cost, net 102.0 86.8 Adjusted income from continuing operations before taxes $3,420.9 $3,213.8 Adjusted effective tax rate 17.8 % 18.9 % CAPITAL EXPENDITURES 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.
The table below presents a reconciliation of the GAAP effective tax rate to our adjusted effective tax rate: Fiscal Year Ended 30 September 2025 2024 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 % 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 Shareholder activism-related costs 86.3 — Gain on sale of business (67.3) (1,575.6) 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 Adjusted effective tax rate 18.2 % 17.8 % 47 Table of Contents CAPITAL EXPENDITURES 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.
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 "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.
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. For each non-GAAP financial measure, we present a reconciliation to the most directly comparable financial measure calculated in accordance with GAAP.
On a segment basis, we present adjusted EBITDA. 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 EPS.
Prior Year Fiscal Year Ended 30 September 2024 2023 $ %/bp Sales $5,040.1 $5,369.3 ($329.2) (6%) Operating income 1,565.1 1,439.7 125.4 9% Operating margin 31.1 % 26.8 % 430 bp Equity affiliates’ income $158.8 $109.2 $49.6 45% Adjusted EBITDA 2,423.2 2,198.2 225.0 10% 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: Volume 1 % Price 3 % Energy cost pass-through to customers (9 %) Currency (1 %) Total Americas Sales Change (6 %) 34 Table of Contents 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%.
Prior Year Fiscal Year Ended 30 September 2025 2024 $ %/bp 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%.
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.
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.
Cash Flows From Investing Activities Fiscal Year Ended 30 September 2024 2023 Additions to plant and equipment, including long-term deposits ($6,796.7) ($4,626.4) Investment in and advances to unconsolidated affiliates — (912.0) Investment in financing receivables (403.0) (665.1) Proceeds from sale of assets and investments 1,878.8 25.4 Purchases of investments (141.4) (640.1) Proceeds from investments 470.7 897.0 Other investing activities 72.4 4.8 Cash Used for Investing Activities ($4,919.2) ($5,916.4) In fiscal year 2024, cash used for investing activities was $4,919.2.
Cash Flows From Investing Activities Fiscal Year Ended 30 September 2025 2024 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) — Investment in financing receivables (61.9) (403.0) Proceeds from sale of assets and investments 245.8 1,878.8 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 2025, cash used for investing activities was $7.2 billion.
Our earnings could be positively or negatively impacted by changes to our contractual revenues and cost forecasts on these projects. Revenue Recognition: On-site Customer Contracts For customers who require large volumes of gases on a long-term basis, we produce and supply gases under long-term contracts from large facilities that we build, own, and operate on or near the customer’s facilities.
Revenue Recognition: On-site Customer Contracts For customers who require large volumes of gases on a long-term basis, we produce and supply gases under long-term contracts from large facilities that we build, own, and operate on or near the customer’s facilities.
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.
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.
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.
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.
Non-service related components are recurring, non-operating items that include interest cost, expected returns on plan assets, prior service cost amortization, actuarial loss amortization, as well as special termination benefits, curtailments, and settlements. The net impact of non-service related components is reflected within “Other non-operating income (expense), net” on our consolidated income statements.
For example, we exclude the impact of the non-service components of net periodic benefit/cost for our defined benefit pension plans. Non-service related components are recurring, non-operating items that include interest cost, expected returns on plan assets, prior service cost amortization, actuarial loss amortization, as well as special termination benefits, curtailments, and settlements.
These 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.
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.
The table below summarizes the assumptions used in the calculation of net periodic cost for the fiscal years ended 30 September: 2024 2023 Weighted average discount rate – Service cost 5.6 % 5.1 % Weighted average discount rate – Interest cost 5.7 % 5.3 % Weighted average expected rate of return on plan assets 5.3 % 5.3 % Weighted average expected rate of compensation increase 3.5 % 3.5 % 2025 Outlook 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.
The table below summarizes the assumptions used in the calculation of net periodic cost for the fiscal years ended 30 September: 2025 2024 Weighted average discount rate – Service cost 4.9 % 5.6 % Weighted average discount rate – Interest cost 4.6 % 5.7 % Weighted average expected rate of return on plan assets 5.4 % 5.3 % Weighted average expected rate of compensation increase 3.5 % 3.5 % 2026 Outlook 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 table below summarizes the projected benefit obligation, the fair value of plan assets, and the funded status for our U.S. and international plans as of 30 September: 2024 2023 Projected benefit obligation $3,951.8 $3,511.2 Fair value of plan assets at end of year 3,907.5 3,433.0 Plan Funded Status ($44.3) ($78.2) 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 table below summarizes the projected benefit obligation, the fair value of plan assets, and the funded status for our U.S. and international plans as of 30 September: 2025 2024 Projected benefit obligation $3,795.3 $3,951.8 Fair value of plan assets at end of year 3,727.6 3,907.5 Plan Funded Status ($67.7) ($44.3) 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.
Our results of operations for the periods presented in this Annual Report on Form 10-K include the results of our former liquefied natural gas ("LNG") process technology and equipment business, which we sold to Honeywell International Inc. on 30 September 2024.
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.
Prior Year Fiscal Year Ended 30 September 2024 2023 $ %/bp Sales $3,224.3 $3,216.1 $8.2 —% Operating income 859.2 906.5 (47.3) (5%) Operating margin 26.6 % 28.2 % (160 bp) Equity affiliates’ income $32.9 $29.7 $3.2 11% Adjusted EBITDA 1,363.1 1,369.7 (6.6) —% 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: Volume 1 % Price — % Energy cost pass-through to customers 1 % Currency (2 %) Total Asia Sales Change — % 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%.
Prior Year Fiscal Year Ended 30 September 2025 2024 $ %/bp 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%.
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. Reporting units are primarily based on products and subregions within each reportable segment.
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.
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.
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.
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 held for use is grouped for impairment testing at the lowest level for which there is identifiable cash flows.
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.
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.
NEOM Green Hydrogen Project 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.
When only a range of possible loss can be established, the most probable amount in the range is accrued. If no amount within this range is a better estimate than any other amount within the range, the minimum amount in the range is accrued.
If no amount within this range is a better estimate than any other amount within the range, the minimum amount in the range is accrued.
Prior Year Fiscal Year Ended 30 September 2024 2023 $ %/bp Sales $2,823.4 $2,963.1 ($139.7) (5%) Operating income 810.0 663.4 146.6 22% Operating margin 28.7 % 22.4 % 630 bp Equity affiliates’ income $88.1 $102.5 ($14.4) (14%) Adjusted EBITDA 1,105.2 962.1 143.1 15% 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: Volume 1 % Price — % Energy cost pass-through to customers (8 %) Currency 2 % Total Europe Sales Change (5 %) 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%.
Prior Year Fiscal Year Ended 30 September 2025 2024 $ %/bp 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%.
Assumptions on the following factors, among others, affect the determination of estimated economic useful life: wear and tear, obsolescence, technical standards, contract life, market demand, competitive position, raw material availability, and geographic location. The estimated economic useful life of an asset is monitored to determine its appropriateness, especially when business circumstances change.
Economic useful life is the duration of time an asset is expected to be productively employed by us, which may be less than its physical life. Assumptions on the following factors, among others, affect the determination of estimated economic useful life: wear and tear, obsolescence, technical standards, contract life, market demand, competitive position, raw material availability, and geographic location.
In fiscal year 2024, we recognized net actuarial gains of $44.6 in other comprehensive income. Actuarial gains and losses are amortized into pension expense over prospective periods to the extent they are not offset by future gains or losses.
Actuarial gains and losses are amortized into pension expense over prospective periods to the extent they are not offset by future gains or losses.
Dividends 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.
Dividends 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.
Prior Year Fiscal Year Ended 30 September 2024 2023 $ %/bp Sales $878.4 $889.0 ($10.6) (1 %) Operating loss (292.7) (287.3) (5.4) (2 %) Reconciliation of GAAP to Non-GAAP: Operating loss ($292.7) ($287.3) Add: Depreciation and amortization 47.1 51.8 Add: Equity affiliates' income 20.4 13.1 Adjusted EBITDA ($225.2) ($222.4) ($2.8) (1 %) 41 Table of Contents ADJUSTED EFFECTIVE TAX RATE The effective tax rate equals the income tax provision divided by income from continuing operations before taxes.
Prior Year Fiscal Year Ended 30 September 2025 2024 $ %/bp Operating loss ($367.3) ($292.7) (74.6) (25 %) Add: Depreciation and amortization 39.9 47.1 Add: Equity affiliates' income 12.4 20.4 Adjusted EBITDA ($315.0) ($225.2) ($89.8) (40 %) 46 Table of Contents ADJUSTED EFFECTIVE TAX RATE The effective tax rate equals the income tax expense (benefit) divided by income or loss from continuing operations before taxes.
Depreciable lives are assigned to acquired assets based on the age and condition of the assets, the remaining duration of long-term supply contracts served by the assets, and our historical experience with similar assets.
In addition, we may purchase assets through transactions accounted for as either an asset acquisition or a business combination. Depreciable lives are assigned to acquired assets based on the age and condition of the assets, the remaining duration of long-term supply contracts served by the assets, and our historical experience with similar assets.
The majority of our goodwill is assigned to reporting units within our regional industrial gases segments. 50 Table of Contents 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.
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.
Cash Flows From Operations Fiscal Year Ended 30 September 2024 2023 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: Depreciation and amortization 1,451.1 1,358.3 Deferred income taxes (69.3) (24.7) Gain on sale of business (1,575.6) — Business and asset actions 57.0 244.6 Undistributed earnings of equity method investments (206.0) (261.2) Gain on sale of assets and investments (31.4) (15.8) Share-based compensation 61.8 59.9 Noncurrent lease receivables 116.2 79.6 Other adjustments 183.8 (103.0) 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) Cash Provided by Operating Activities $3,646.7 $3,205.7 In fiscal year 2024, cash provided by operating activities was $3,646.7.
Cash Flows From Operations Fiscal Year Ended 30 September 2025 2024 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) 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) Gain on sale of assets and investments (66.4) (31.4) Share-based compensation 76.4 61.8 Noncurrent lease receivables 52.5 116.2 Other adjustments 48.0 183.8 Changes in working capital accounts (851.6) (183.0) Cash Provided by Operating Activities $3,256.8 $3,646.7 In fiscal year 2025, cash provided by operating activities was $3.3 billion.
Likewise, if the estimated useful life is increased, the adjustment to the useful life decreases depreciation expense per year on a prospective basis. Our regional industrial gas segments have numerous long-term customer supply contracts for which we construct an on-site plant on or near the customer’s facility. These contracts typically have initial contract terms of 10 to 20 years.
Our regional industrial gas segments have numerous long-term customer supply contracts for which we construct an on-site plant on or near the customer’s facility. These contracts typically have initial contract terms of 10 to 20 years. Depreciable lives of the production assets related to long-term supply contracts are generally matched to the contract lives.
Gain on Sale of Business On 30 September 2024, we completed the sale of our LNG business to Honeywell International Inc.
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.
In the fourth quarter of fiscal year 2024, we conducted our annual assessment and concluded that it was more likely than not that the fair value of each reporting unit was greater than its carrying value.
In the fourth quarter of fiscal year 2025, we conducted our annual assessment and concluded that it was more likely than not that the fair value of each reporting unit was greater than its carrying value. 58 Table of Contents Impairment of Assets: Intangible Assets Disclosures related to intangible assets other than goodwill are included in Note 13, Intangible Assets , to the consolidated financial statements.
We determine this rate based on review of the underlying long-term salary increase trend characteristic of labor markets and historical experience, as well as comparison to peer companies. A 50 bp increase or decrease in the expected rate of compensation may result in an increase or decrease to pension expense, respectively, of approximately $4 per year.
The expected rate of compensation increase is another key assumption. We determine this rate based on review of the underlying long-term salary increase trend characteristic of labor markets and historical experience, as well as comparison to peer companies.
These decisions, either individually or in the aggregate, could have a significant effect on our cash used for investing activities.
These decisions, either individually or in the aggregate, could have a significant effect on our cash used for investing activities. Accordingly, management is unable to fully reconcile, without unreasonable efforts, our forecasted capital expenditures to future cash used for investing activities.
Cash Flows From Financing Activities Fiscal Year Ended 30 September 2024 2023 Long-term debt proceeds $4,678.3 $3,516.2 Payments on long-term debt (486.2) (615.4) Net (decrease) increase in commercial paper and short-term borrowings (289.9) 268.2 Dividends paid to shareholders (1,564.9) (1,496.6) Proceeds from stock option exercises 7.9 24.0 Investments by noncontrolling interests 428.5 234.9 Distributions to noncontrolling interests (25.8) (115.9) Other financing activities (132.5) (205.8) Cash Provided by Financing Activities $2,615.4 $1,609.6 In fiscal year 2024, cash provided by financing activities was $2,615.4.
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 . 51 Table of Contents Cash Flows From Financing Activities Fiscal Year Ended 30 September 2025 2024 Long-term debt proceeds $4,386.7 $4,678.3 Payments on long-term debt (429.9) (486.2) Net decrease in commercial paper and short-term borrowings (74.7) (289.9) Dividends paid to shareholders (1,584.1) (1,564.9) Proceeds from stock option exercises 1.1 7.9 Investments by noncontrolling interests 594.6 428.5 Distributions to noncontrolling interests (7.2) (25.8) Other financing activities (91.3) (132.5) Cash Provided by Financing Activities $2,795.2 $2,615.4 In fiscal year 2025, cash provided by financing activities was $2.8 billion .
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.
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.
Impairment testing of the asset group occurs whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable.
Plant and equipment held for use is grouped for impairment testing at the lowest level for which there is identifiable cash flows. Impairment testing of the asset group occurs whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable.
As of 30 September 2024, accrued income taxes, including the amount recorded as noncurrent, were $619.3, and our net deferred income tax liability was $1,032.1. Tax liabilities related to uncertain tax positions as of 30 September 2024 were $101.0, excluding interest and penalties. Income tax expense for the fiscal year ended 30 September 2024 was $944.9.
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 benefit for the fiscal year ended 30 September 2025 was $94.3.
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. Economic useful life is the duration of time an asset is expected to be productively employed by us, which may be less than its physical life.
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.
The depreciable lives of production facilities associated with these contracts are generally 15 years. These depreciable lives have been determined based on historical experience combined with judgment on future assumptions such as technological advances, potential obsolescence, and competitors’ actions. In addition, we may purchase assets through transactions accounted for as either an asset acquisition or a business combination.
Our regional industrial gas segments also have contracts for liquid or gaseous bulk supply and, for smaller customers, packaged gases. The depreciable lives of production facilities associated with these contracts are generally 15 years. These depreciable lives have been determined based on historical experience combined with judgment on future assumptions such as technological advances, potential obsolescence, and competitors’ actions.
Prior Year Fiscal Year Ended 30 September 2024 2023 $ %/bp Sales $3,224.3 $3,216.1 $8.2 — % Operating income 859.2 906.5 (47.3) (5 %) Operating margin 26.6 % 28.2 % (160) bp Reconciliation of GAAP to Non-GAAP: Operating income $859.2 $906.5 Add: Depreciation and amortization 471.0 433.5 Add: Equity affiliates' income 32.9 29.7 Adjusted EBITDA $1,363.1 $1,369.7 ($6.6) — % Adjusted EBITDA margin 42.3 % 42.6 % (30) bp Europe Change vs.
Prior Year Fiscal Year Ended 30 September 2025 2024 $ %/bp Operating income $851.1 $859.2 (8.1) (1 %) Add: Depreciation and amortization 518.9 471.0 Add: Equity affiliates' income 42.3 32.9 Adjusted EBITDA $1,412.3 $1,363.1 $49.2 4 % Europe Change vs.
With respect to impacts on pension benefit obligations, a 50 bp increase or decrease in the discount rate may result in a decrease or increase, respectively, to pension expense of approximately $13 per year.
With respect to impacts on pension benefit obligations, a 50 bp increase or decrease in the discount rate may result in a decrease or increase, respectively, to pension expense of approximately $14 per year. 61 Table of Contents The expected rate of return on plan assets represents an estimate of the long-term average rate of return to be earned by plan assets reflecting current asset allocations.
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: 2024 2023 $ 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 % Less: (Loss) Income from discontinued operations, net of tax (13.9) (0.1 %) 7.4 0.1 % Add: Interest expense 218.8 1.8 % 177.5 1.4 % Less: Other non-operating income (expense), net (73.8) (0.6 %) (39.0) (0.3 %) Add: Income tax provision 944.9 7.8 % 551.2 4.4 % Add: Depreciation and amortization 1,451.1 12.0 % 1,358.3 10.8 % Less: Gain on sale of business 1,575.6 13.0 % — — % Add: Business and asset actions 57.0 0.5 % 244.6 1.9 % Adjusted EBITDA and adjusted EBITDA margin $5,046.3 41.7 % $4,701.8 37.3 % 2024 vs. 2023 Change GAAP Net income $ change $1,523.8 Net income % change 65% Net income margin change 1,330 bp Change Non-GAAP Adjusted EBITDA $ change $344.5 Adjusted EBITDA % change 7% Adjusted EBITDA margin change 440 bp 39 Table of Contents 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: Americas Change vs.
The tables below present a reconciliation of consolidated net income on a GAAP basis to consolidated adjusted EBITDA: 2025 2024 Net income (loss) ($354.4) $3,862.4 Less: Loss from discontinued operations, net of tax (8.0) (13.9) Add: Interest expense 214.0 218.8 Less: Other non-operating income (expense), net 2.6 (73.8) Add: Income tax expense (benefit) (94.3) 944.9 Add: Depreciation and amortization 1,564.2 1,451.1 Add: Business and asset actions 3,747.0 57.0 Add: Shareholder activism-related costs 86.3 — Less: Gain on sale of business 67.3 1,575.6 Less: Gain on sale of other assets 31.3 — Add: Equity method investment impairment associated with business and asset actions 6.8 — Adjusted EBITDA $5,076.4 $5,046.3 2025 vs. 2024 Change GAAP Net income $ change ($4,216.8) Net income % change ** Change Non-GAAP Adjusted EBITDA $ change $30.1 Adjusted EBITDA % change 1% ** Change versus prior period is not meaningful due to charges for business and asset actions recorded in fiscal year 2025. 45 Table of Contents 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: Americas Change vs.
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.
A summary table of changes in diluted EPS is presented below. 29 Table of Contents 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.
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. 30 Table of Contents 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.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

13 edited+3 added−1 removed8 unchanged
Biggest changeThe market values for interest rate risk and foreign currency risk are calculated by us using a third-party software model that utilizes standard pricing models to determine the present value of the instruments based on market conditions as of the valuation date, such as interest rates, spot and forward exchange rates, and implied volatility. 54 Table of Contents Interest Rate Risk Our debt portfolio as of 30 September 2024, including the effect of currency and interest rate swap agreements, was composed of 87% fixed-rate debt and 13% variable-rate debt.
Biggest changeThe market values for interest rate risk and foreign currency risk are calculated by us using a third-party software model that utilizes standard pricing models to determine the present value of the instruments based on market conditions as of the valuation date, such as interest rates, spot and forward exchange rates, and implied volatility.
The sensitivity analysis related to the interest rate risk on the fixed portion of our debt portfolio assumes an instantaneous 100 bp parallel move in interest rates from the level at 30 September 2024, with all other variables held constant.
The sensitivity analysis related to the interest rate risk on the fixed portion of our debt portfolio assumes an instantaneous 100 bp parallel move in interest rates from the level at 30 September 2025, with all other variables held constant.
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 $19 and $21 of interest incurred per year at 30 September 2024 and 2023, respectively.
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.
A 10% strengthening or weakening of the functional currency of an entity versus all other currencies would result in a decrease or increase, respectively, of $408 and $308 in the net liability position of financial instruments at 30 September 2024 and 2023, respectively.
A 10% strengthening or weakening of the functional currency of an entity versus all other currencies would result in a decrease or increase, respectively, of $565 and $408 in the net liability position of financial instruments at 30 September 2025 and 2024, respectively.
A 100 bp decrease in market interest rates would result in an increase of $1,197 and $845 in the net liability position of financial instruments at 30 September 2024 and 2023, respectively.
A 100 bp decrease in market interest rates would result in an increase of $1,290 and $1,197 in the net liability position of financial instruments at 30 September 2025 and 2024, respectively.
A 100 bp increase in market interest rates would result in a decrease of $1,035 and $728 in the net liability position of financial instruments at 30 September 2024 and 2023, respectively.
A 100 bp increase in market interest rates would result in a decrease of $1,128 and $1,035 in the net liability position of financial instruments at 30 September 2025 and 2024, respectively.
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 $55 and $25, respectively. 55 Table of Contents
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. 64 Table of Contents
Our debt portfolio as of 30 September 2023, including the effect of currency and interest rate swap agreements, was composed of 80% fixed-rate debt and 20% variable-rate debt.
Interest Rate Risk Our debt portfolio as of 30 September 2025, including the effect of currency and interest rate swap agreements, was composed of 91% fixed-rate debt and 9% variable-rate debt. Our debt portfolio as of 30 September 2024, including the effect of currency and interest rate swap agreements, was composed of 87% fixed-rate debt and 13% variable-rate debt.
The net market value of these financial instruments combined is referred to below as the "net financial instrument position" and is disclosed in Note 16, Fair Value Measurements , to the consolidated financial statements. Our net financial instrument position increased from a liability of $8,990.8 at 30 September 2023 to a liability of $13,855.3 at 30 September 2024.
The net market value of these financial instruments combined is referred to below as the "net financial instrument position" and is disclosed in Note 16, Fair Value Measurements , to the consolidated financial statements.
Foreign Currency Exchange Rate Risk The sensitivity analysis related to foreign currency exchange rates assumes an instantaneous 10% change in the foreign currency exchange rates from their levels at 30 September 2024 and 2023, with all other variables held constant.
A 100 bp decline in interest rates would lower interest incurred by $16 and $19 per year at 30 September 2025 and 2024, respectively. 63 Table of Contents Foreign Currency Exchange Rate Risk The sensitivity analysis related to foreign currency exchange rates assumes an instantaneous 10% change in the foreign currency exchange rates from their levels at 30 September 2025 and 2024, with all other variables held constant.
The increase in sensitivity is primarily due to additional borrowings under the project financing associated with the NEOM Green Hydrogen Project. The primary currency pairs for which we have exchange rate exposure are the Euro and U.S. Dollar and Chinese Renminbi and U.S. Dollar.
The increase in sensitivity is primarily due to the issuance of the Euro-denominated senior fixed-rate notes noted above. The primary currency pairs for which we have exchange rate exposure are the Chinese Renminbi and U.S. Dollar and Euro and U.S. Dollar.
The analysis below presents the sensitivity of the market value of our financial instruments to selected changes in market rates and prices. Market values are the present values of projected future cash flows based on the market rates and prices chosen.
Market values are the present values of projected future cash flows based on the market rates and prices chosen.
The increase was primarily due to the issuance of green senior notes as well as additional borrowings under the project financing associated with the NEOM Green Hydrogen Project as discussed in Note 3, Variable Interest Entities , to the consolidated financial statements.
Dollar-denominated senior fixed-rate notes during the second and third quarters of fiscal year 2025, as well as additional borrowings under the project financing associated with the NEOM Green Hydrogen Project as discussed in Note 3, Variable Interest Entities , to the consolidated financial statements. Aggregate principal amounts of Euro- and U.S.
Removed
A 100 bp decline in interest rates would lower interest incurred by $19 and $21 per year at 30 September 2024 and 2023, respectively.
Added
Our net financial instrument position increased from a liability of approximately $13.9 billion at 30 September 2024 to a liability of approximately $17.2 billion at 30 September 2025. The increase was primarily due to the issuance of Euro- and U.S.
Added
Dollar-denominated senior fixed-rate notes issued were €1.5 billion (approximately $1.6 billion) and $1.1 billion, respectively. These increases were partially offset by the derecognition of long-term debt associated with the deconsolidation of BHIG and the repayment of €300 million (approximately $311) aggregate principal amount outstanding of our 1.000% Euro-denominated senior fixed-rate notes at maturity in February 2025.
Added
For additional information regarding deconsolidation of BHIG, refer to Note 6, Acquisitions and Divestitures , to the consolidated financial statements. The analysis below presents the sensitivity of the market value of our financial instruments to selected changes in market rates and prices.