Air Products Chemicals Inc
For the period ended Mar 31, 2025. Filed May 1, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 1, 2025
APD$304.84-1.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-12-31; filed 2025-02-06.
0000002969-25-000013
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsFirst Quarter 2025 in SummaryFirst Quarter 2025 Results of OperationsReconciliations of Non-GAAP Financial MeasuresLiquidity and Capital ResourcesPension BenefitsCritical Accounting Policies and EstimatesCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-01.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsSecond Quarter 2025 in SummarySecond Quarter 2025 Results of OperationsFirst Six Months 2025 in SummaryFirst Six Months 2025 Results of OperationsReconciliations of Non-GAAP Financial MeasuresLiquidity and Capital ResourcesPension BenefitsCritical Accounting Policies and EstimatesThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 138 previous paragraphs and 241 current paragraphs.
58 unchanged; 42 reworded; 125 added; 38 removed; 0 previous and 16 current paragraphs rearranged.
Tables are not compared: 28 previous and 42 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (125)
Current report
SECOND QUARTER 2025 VS. SECOND QUARTER 2024
Current report
•Sales of $2.9 billion decreased $14.0. On a percentage basis, sales were flat as lower volumes of 3% and an unfavorable impact from currency of 2% were offset by higher energy cost pass-through to customers of 4% and higher pricing of 1%. The lower volumes were attributable to the divestiture of the LNG business in September 2024, which resulted in a headwind of approximately 2%, as well as lower global demand for helium. These items were partially offset by favorability in our on-site business, primarily in the Americas and Europe segments.
Current report
•Operating loss was $2.3 billion and operating margin was negative 79.8%, primarily due to materially higher charges for business and asset actions in fiscal year 2025. In the prior year, operating income was $637.2 and operating margin was 21.7%.
Current report
•Equity affiliates' income of $145.5 increased 2%, or $2.2, driven by affiliates in Europe and the Middle East.
Current report
•Net loss was $1.7 billion, primarily due to materially higher charges for business and asset actions in fiscal year 2025. In the prior year, net income was $580.9.
Current report
•Adjusted EBITDA of $1.2 billion decreased 3%, or $31.1, primarily due to lower volumes, higher costs, and unfavorable currency. These impacts were partially offset by productivity improvements, higher pricing, and higher equity affiliates' income.
Current report
•Loss per share of $7.77 was driven by an after-tax charge attributable to Air Products of $2.3 billion for business and asset actions recorded during the second quarter. On a non-GAAP basis, adjusted earnings per share was $2.69. In the prior year, earnings per share ("EPS") was $2.57 and adjusted EPS was $2.85. A summary table of changes to earnings (loss) per share is presented on page 44 below.
Current report
Summary of Changes in Earnings (Loss) Per Share
Current report
**Change versus prior period is not meaningful due to the $2.9 billion pre-tax charge for business and asset actions in fiscal year 2025. The per share impact of the charge is primarily reflected in the "Operating Items" section above.
Current report
(A)The per share impacts associated with charges for business and asset actions were calculated based on a total after-tax charge attributable to Air Products of $2.3 billion. The amount of the charges attributable to our noncontrolling partners was $3.5.
Current report
(A)The charge for business and asset actions in fiscal year 2025 was primarily recorded within operating loss. For additional information regarding this charge, Refer to Note 4, Business and Asset Actions, to the consolidated financial statements.
Current report
Discussion of Second Quarter Consolidated Results
Current report
**Change versus prior period is not meaningful due to the $2.9 billion pre-tax charge for business and asset actions in fiscal year 2025.
Current report
Sales of $2.9 billion decreased $14.0. On a percentage basis, sales were flat due to lower volumes of 3% and an unfavorable impact from currency of 2%, partially offset by higher energy cost pass-through to customers of 4% and higher pricing of 1%. Unfavorable volumes were attributable to the divestiture of the LNG business in September 2024, which resulted in a headwind of approximately 2%, as well as lower global demand for helium. These items were largely offset by favorability in our on-site business in the Americas and Europe segments. Currency was unfavorable as the U.S. Dollar strengthened against most major currencies. Volumes and currency were mostly offset by higher energy cost pass-through to customers driven by higher natural gas prices in the U.S. Gulf Coast and Europe. The 1% total company price improvement, which equates to a 3% improvement for the merchant business, was primarily attributable to non-helium pricing actions in the Americas and Europe segments.
Current report
Cost of sales of $2.1 billion increased 3%, or $62.4, primarily due to higher energy cost pass-through to customers of $95, higher other costs of $35, and higher power and fuel costs in our merchant business of $28. The other costs of $35 were driven by higher expense for maintenance, primarily in the Americas segment, depreciation, and fixed-cost inflation. These impacts were partially offset by lower costs of $62 attributable to sales volumes and a favorable currency impact of $33. Gross margin of 29.6% decreased 240 bp from 32.0% in the prior year due to the impact of higher costs and energy cost pass-through to customers.
Current report
Selling and administrative expense of $222.0 decreased 8%, or $18.6, as productivity improvements were partially offset by inflation. Selling and administrative expense as a percentage of sales decreased to 7.6% from 8.2% in the prior year.
Current report
Our consolidated income statements for the three months ended 31 March 2025 and 2024 include charges for strategic business and asset actions of $2,934.7 ($2,290.6 attributable to Air Products after tax, or $10.28 per share) and $57.0 ($43.8 after tax, or $0.20 per share), respectively, as further described below and in Note 4, Business and Asset Actions, to the consolidated financial statements. These charges were not allocated to our reportable segments.
Current report
During the second quarter of fiscal year 2025, our Board of Directors and Chief Executive Officer initiated a project review in an effort to streamline our backlog and allow us to focus resources on projects that we believe will enhance value for our shareholders. In connection with this review, we decided to exit various projects related to clean energy generation and distribution.
Current report
As a result of these decisions, we recorded charges for project exit costs of $2,861.8 and $6.8 through operating loss and equity affiliates' income, respectively. The charge reflected in operating loss primarily includes the write down of project assets to their estimated net realizable value as well as estimated costs required to terminate various contractual commitments. The $6.8 recorded to equity affiliates' income reflects an other-than-temporary impairment of a joint venture in China that had been formed to develop clean hydrogen infrastructure in the region. The amount of these charges attributable to our noncontrolling partners was $3.5.
Current report
Our estimates related to exiting these projects, including the net realizable value of assets to be disposed, reflect our best judgment based on information available at the time the project exit costs were recorded. Final settlement of these items may differ materially from our current estimates, which could impact our consolidated financial statements in future periods.
Current report
We initiated a global cost reduction plan in June 2023 that provides employees identified for involuntarily separation with severance and other postemployment benefits. Costs incurred in connection with the plan totaled $66.1 and $57.0 for the second quarter of fiscal years 2025 and 2024, respectively. Once all actions under the plan are fully executed, we expect to realize annual pre-tax savings of approximately $185 to $195, primarily through selling and administrative expense.
Current report
During the second quarter of fiscal year 2025, we recorded costs of $31.4 ($31.0 after tax, or $0.14 per share) in connection with a proxy contest led by an activist shareholder that concluded in January upon certification of the election of directors following our 2025 Annual Meeting of Shareholders. Following the election, the Board of Directors appointed a new Chief Executive Officer ("CEO"). The costs incurred during the second quarter primarily reflect executive separation costs for our former CEO, which included a noncash expense of $22.4 to accelerate vesting of share-based awards and $7.3 for severance and other cash benefits that were paid during the quarter.
Current report
Other income of $13.9 decreased 35%, or $7.6, primarily due to higher income from non-recurring asset sales in the prior year.
Current report
Operating Income (Loss) and Operating Margin
Current report
Operating loss was $2.3 billion during the second quarter of fiscal year 2025 compared to income of $637.2 in the prior year. The loss in fiscal year 2025 was driven by materially higher charges for business and asset actions of $2,927.9 compared to $57.0 in the prior year. Volumes were unfavorable by $34 driven by the divestment of the LNG business in September 2024 as well as weaker global helium demand, partially offset by higher volumes in our on-site business. Operating income contributed by the LNG business in the prior year was approximately $35. Fiscal year 2025 also reflects shareholder activism-related costs of $31, higher other costs of $29, and unfavorable currency of $10. The higher other costs of $29 were driven by inflation and higher expense for maintenance and depreciation. Additionally, the prior year included higher income from non-recurring asset sales. These impacts were partially mitigated by productivity improvements. Compared to the prior year, higher pricing driven by non-helium merchant products favorably impacted operating results by $10, which is net of higher power and fuel costs in our merchant business.
Current report
Operating margin was negative 79.8% compared to 21.7% in the prior year, which was primarily attributable to the charge for business and asset actions, shareholder activism-related costs, higher other costs, and higher energy cost pass-through to customers.
Current report
Equity affiliates' income of $145.5 increased 2%, or $2.2. Higher income from affiliates in Italy and Saudi Arabia was primarily offset by a prior year asset sale in an Americas affiliate. Additionally, as discussed under Project Exit Costs beginning on page 46, fiscal year 2025 includes an impairment charge of $6.8 related to a joint venture in China.
Current report
Net loss was $1.7 billion during the second quarter of fiscal year 2025 compared to income of $580.9 in the prior year. The loss in fiscal year 2025 was driven by materially higher charges for business and asset actions, which had an after-tax impact attributable to Air Products of $2.3 billion in fiscal year 2025 compared to $43.8 in the prior year. Fiscal year 2025 also reflects the impact of shareholder activism-related costs, unfavorable volumes, and higher costs. The higher costs were driven by inflation and higher expense for maintenance and depreciation. Additionally, the prior year included higher income from non-recurring asset sales. These impacts were partially mitigated by productivity improvements and higher pricing as well as lower non-service pension costs in fiscal year 2025.
Current report
Adjusted EBITDA of $1.2 billion decreased 3%, or $31.1. The decrease was driven by lower volumes, higher costs, and unfavorable currency, partially offset by productivity improvements, higher pricing, and higher equity affiliates' income.
Current report
For the three months ended 31 March 2025, our consolidated income statement includes an income tax benefit of $505.8 compared to an income tax expense of $130.5 in the prior year period. The tax benefit in fiscal year 2025 represents an effective tax rate of 22.5% on the pre-tax loss of $2.2 billion reported for the three months ended 31 March 2025. The tax expense in fiscal year 2024 represented an effective rate of 18.3% on the pre-tax income of $711.4 reported for the three months ended 31 March 2024. The current year rate was primarily impacted by the $2.9 billion pre-tax charge for business and asset actions and other items as further discussed below. Our estimates related to many of these items reflect our best judgment based on information available at the time the items were recorded. The amount and timing of final settlement of these items may differ from our current estimates, which could impact our tax provision in future periods.
Current report
For additional information, refer to Note 16, Income Taxes, to the consolidated financial statements.
Current report
Tax Impact of Business and Asset Actions
Current report
During the second quarter of fiscal year 2025, we recorded a pre-tax charge of $2.9 billion for the business and asset actions discussed in Note 4, Business and Asset Actions, to the consolidated financial statements. This charge had a related net income tax benefit of $640.6.
Current report
During the second quarter of fiscal year 2025, we recorded a net income tax benefit of $34.9 related to our intent to file a refund claim after a review of several U.S. Tax Court cases regarding the U.S. taxation of deemed foreign dividends in the transition year of the U.S. Tax Cuts and Jobs Act (our fiscal year 2018).
Current report
During the second quarter of fiscal year 2025, we recorded an income tax expense of $31.4 related to estimated withholding taxes on foreign earnings that we no longer intend to indefinitely reinvest. There were no other changes to our assumptions regarding the reinvestment of foreign earnings during the second quarter of fiscal year 2025.
Current report
During the second quarter of fiscal year 2025, we incurred costs of $31.4 related to a proxy contest as further discussed in Note 17, Supplemental Information. We recognized a $0.4 income tax benefit related to these costs in the second quarter.
Showing the first 40 of 125 passages. Open the source sections for the rest.
Removed paragraphs (38)
Previous report
FIRST QUARTER 2025 VS. FIRST QUARTER 2024
Previous report
•Operating income of $643.6 decreased 3%, or $23.3, as higher costs and lower volumes were partially offset by higher pricing, net of power and fuel costs, and favorable currency. The recently divested LNG business contributed operating income of approximately $25 in the prior year. Operating margin of 22.0% decreased 20 basis points ("bp").
Previous report
•Equity affiliates' income of $150.6 decreased 5%, or $7.8, driven by lower income from JIGPC in the Middle East & India segment.
Previous report
•Net income of $649.8 increased 5%, or $28.2, as higher pricing, net of power and fuel costs, lower non-service pension costs, and a gain on de-designated cash flow hedges were partially offset by higher costs. Net income margin of 22.2% increased 150 bp.
Previous report
•Adjusted EBITDA of $1,190.9 increased 1%, or $16.4, as higher pricing, net of power and fuel costs, was partially offset by higher costs and lower equity affiliates' income. Adjusted EBITDA margin of 40.6% increased 140 bp.
Previous report
•EPS of $2.77 increased 1%, or $0.04 per share. On a non-GAAP basis, adjusted EPS of $2.86 increased 1%, or $0.04 per share. A summary table of changes to EPS is presented below.
Previous report
Discussion of First Quarter Consolidated Results
Previous report
Cost of sales of $2,016.5 decreased 2%, or $50.7, primarily due to lower costs of $61 attributable to sales volumes and a favorable currency impact of $13, partially offset by higher costs of $26 that were driven by inflation and incentive compensation. Gross margin of 31.2% increased 20 bp from 31.0% in the prior year as pricing and favorable business mix more than offset the impact of higher costs.
Previous report
Selling and administrative expense of $242.4 increased 2%, or $4.0, primarily due to incentive compensation and inflation, partially offset by productivity improvements. Selling and administrative expense as a percentage of sales increased to 8.3% from 8.0% in the prior year.
Previous report
Operating Income and Operating Margin
Previous report
Operating income of $643.6 decreased 3%, or $23.3, as shareholder activism costs of $30, higher costs of $20, and lower volumes of $2 were partially offset by positive pricing, net of power and fuel costs, of $26 and favorable currency of $3. Higher costs related to incentive compensation and inflation were partially offset by productivity improvements as well as the sale of a U.S. equity method investment. The recently divested LNG business contributed operating income of approximately $25 in the prior year. Operating margin of 22.0% decreased 20 bp from 22.2% in the prior year primarily due to the impact of higher costs, which was partially offset by higher pricing and business mix.
Previous report
Equity affiliates' income of $150.6 decreased 5%, or $7.8, driven by lower income from JIGPC in the Middle East & India segment.
Previous report
Net Income and Net Income Margin
Previous report
Net income of $649.8 increased 5%, or $28.2. Higher pricing, net of power and fuel costs, was partially offset by higher costs related to shareholder activism, incentive compensation, and inflation. These costs were partially mitigated by productivity improvements. We also recognized lower non-service pension costs as well as a gain on de-designated cash flow hedges during the first quarter of fiscal year 2025. Net income margin of 22.2% increased 150 bp from 20.7% in the prior year due to these factors as well as favorable business mix.
Previous report
In December 2024, the Internal Revenue Service and U.S. Department of the Treasury published final regulations that clarified certain investment tax credit eligibility requirements for Section 48 energy investment tax credits that were enacted as part of the U.S. Inflation Reduction Act of 2022. We are in the process of evaluating the impact of these regulations and expect to realize significant benefits from the tax incentives once qualifying projects come onstream in the U.S. We have not included any forecasted benefits in the calculation of our annual effective tax rate for the period ending 31 December 2024 due to uncertainty in the timing and amount of such benefits.
Previous report
Adjusted EBITDA and Adjusted EBITDA Margin
Previous report
Adjusted EBITDA of $1,190.9 increased 1%, or $16.4, as higher pricing, net of power and fuel costs, was partially offset by higher costs and lower equity affiliates' income. Adjusted EBITDA margin of 40.6% increased 140 bp from 39.2% in the prior year primarily due to favorable business mix and higher pricing.
Previous report
Our effective tax rate was 17.8% and 17.9% for the three months ended 31 December 2024 and 2023, respectively. The current quarter effective tax rate was lower due to earning a greater share of income in jurisdictions with lower tax rates and a benefit from a U.S. state tax law change in the current period, which were mostly offset by higher net costs on foreign-related income taxed in the U.S., lower U.S. tax benefits for foreign-derived income, and the release of certain previously unrecognized tax benefits in the prior year.
Previous report
Operating income of $388.2 increased 10%, or $33.8, as higher volumes of $35 and positive pricing, net of power and fuel costs, of $18 were partially offset by higher costs of $15 and unfavorable currency of $4. Higher costs for inflation, planned maintenance expense, depreciation expense, and incentive compensation were partially offset by income recognized on the sale of an equity method investment. Operating margin of 30.1% increased 180 bp from 28.3% in the prior year.
Previous report
Equity affiliates’ income of $35.1 decreased 5%, or $2.0.
Previous report
Sales of $817.1 increased 3%, or $23.3, as higher volumes of 2% driven by new on-site assets and higher energy cost pass-through to customers of 2% were partially offset by an unfavorable currency impact of 1%. Pricing was flat versus the prior year.
Previous report
Sales of $697.2 decreased 5%, or $34.0, due to lower volumes of 5% and lower energy cost pass-through to customers of 1%, partially offset by higher pricing of 1%. The unfavorable volumes were driven by a lower contribution from our on-site business and lower helium in our merchant business. Currency remained flat versus the prior year.
Previous report
Operating income of $186.5 decreased 6%, or $11.1, due to lower volumes of $23, partially offset by higher pricing, net of power and fuel costs, of $10 and favorable costs of $2. The lower costs were driven by productivity improvements and lower costs for planned maintenance outages, which were partially offset by inflation and higher depreciation expense. Operating margin of 26.7% decreased 30 bp from 27.0% in the prior year.
Previous report
Equity affiliates’ income of $18.2 decreased 12%, or $2.5.
Previous report
Sales of $32.8 decreased 7%, or $2.6, primarily due to lower demand for merchant products. Operating loss was $0.6 compared to income of $3.9 in the prior year, which also reflects the impact of higher costs.
Previous report
Equity affiliates' income of $85.0 decreased 9%, or $7.9, as a higher portion of income from the JIGPC joint venture was allocated to shareholders entitled to preferred distributions. Refer to Note 3, Variable Interest Entities, to the consolidated financial statements for additional information.
Previous report
Sales of $96.8 decreased 48%, or $88.1, primarily due to the divestiture of the LNG business in September 2024.
Previous report
Operating loss of $117.0 increased 17%, or $16.8. The increase was driven by the divestiture of the LNG business, which generated operating income of approximately $25 for the first quarter of fiscal year 2024, as well as higher costs for incentive compensation.
Previous report
Equity affiliates' income of $2.0 decreased 43%, or $1.5.
Previous report
(A) Unrealized gain attributable to noncontrolling partners was $25.2.
Previous report
ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN
Previous report
For the first three months of fiscal year 2025, cash provided by operating activities was $811.7. Other adjustments of $122.6 primarily included adjustments for noncash currency impacts of intercompany balances. The working capital accounts were a use of cash of $16.5. A use of cash of $47.8 within "Trade receivables" due to the timing of cash collections was partially offset by a source of cash of $30.5 within "Payables and accrued liabilities". The source of cash within "Payables and accrued liabilities" primarily resulted from an increase in accrued utilities and changes in the fair value of derivative contracts that hedge intercompany loans, partially offset by payments for incentive compensation under the fiscal year 2024 plan.
Previous report
In January 2025, we made U.S. Federal and State income tax payments of approximately $395 that primarily related to the gain on the sale of the LNG business in September 2024.
Previous report
For the first three months of fiscal year 2024, cash provided by financing activities was $1,362.8. The source of cash was primarily driven by a net increase in commercial paper and short-term borrowings of $1,020.9 and long-term debt proceeds of $810.4. The long-term debt proceeds primarily related to capital spending by NGHC. These sources of cash were partially offset by dividend payments to shareholders of $388.9 and payments on long-term debt of $54.8.
Reworded paragraphs (42)
Previous wording
The financial measures discussed below are presented in accordance with U.S. generally accepted accounting principles ("GAAP"), except as noted. We present certain financial measures on an "adjusted", or "non-GAAP", basis because we believe such measures, when viewed together with financial results computed in accordance with GAAP, provide a more complete understanding of the factors and trends affecting our historical financial performance. For each non-GAAP financial measure, including adjusted earnings per share ("EPS"), adjusted EBITDA, adjusted EBITDA margin, adjusted effective tax rate, and capital expenditures, we present a reconciliation to the most directly comparable financial measure calculated in accordance with GAAP. These reconciliations and explanations regarding the use of non-GAAP financial measures are presented under the “Reconciliations of Non-GAAP Financial Measures” section beginning on page 41.
Current wording
The financial measures discussed below are presented in accordance with U.S. generally accepted accounting principles ("GAAP"), except as noted. We present certain financial measures on an "adjusted", or "non-GAAP", basis because we believe such measures, when viewed together with financial results computed in accordance with GAAP, provide a more complete understanding of the factors and trends affecting our historical financial performance. For each non-GAAP financial measure, including adjusted earnings per share ("EPS"), adjusted EBITDA, adjusted effective tax rate, and capital expenditures, we present a reconciliation to the most directly comparable financial measure calculated in accordance with GAAP. These reconciliations and explanations regarding the use of non-GAAP financial measures are presented under the “Reconciliations of Non-GAAP Financial Measures” section beginning on page 65.
Previous wording
Comparisons included in the discussion that follows are for the first quarter of fiscal year 2025 versus ("vs.") the first quarter of fiscal year 2024. The disclosures provided in this Quarterly Report on Form 10-Q are complementary to those made in our 2024 Form 10-K.
Current wording
Comparisons included in the discussion that follows are for the second quarter and first six months of fiscal year 2025 versus ("vs.") the second quarter and first six months of fiscal year 2024. The disclosures provided in this Quarterly Report on Form 10-Q are complementary to those made in our 2024 Form 10-K.
Previous wording
The diluted per share impacts presented in the tables below were calculated independently and do not sum to the total change in EPS due to rounding.
Current wording
The diluted per share impacts presented in the tables below were calculated independently and do not sum to the total change due to rounding.
Previous wording
The table below summarizes the diluted per share impact of our non-GAAP adjustments for the first quarter of fiscal years 2025 and 2024:
Current wording
The table below summarizes the diluted per share impact of our non-GAAP adjustments for the second quarter of fiscal years 2025 and 2024:
Previous wording
FIRST QUARTER 2025 RESULTS OF OPERATIONS
Current wording
SECOND QUARTER 2025 RESULTS OF OPERATIONS
Previous wording
Research and development expense of $22.0 decreased 14%, or $3.7. Research and development expense as a percentage of sales decreased to 0.8% from 0.9% in the prior year.
Current wording
Research and development expense of $22.9 decreased 10%, or $2.5. Research and development expense as a percentage of sales decreased to 0.8% from 0.9% in the prior year.
Previous wording
Interest incurred increased 29%, or $31.3, primarily due to a higher debt balance from senior notes issued in February 2024 as well as borrowings on financing available for the NEOM Green Hydrogen Project. Capitalized interest increased 77%, or $42.2, due to a higher carrying value of projects under construction, including the NEOM Green Hydrogen Project.
Current wording
Interest incurred increased 16%, or $20.3, primarily due to a higher debt balance. Capitalized interest increased 58%, or $38.0, due to a higher carrying value of projects under construction, including the NEOM Green Hydrogen Project.
Previous wording
Other non-operating income of $38.9 increased $53.7 from an expense of $14.8 in the prior year. The increase was driven by an unrealized gain of $38.8 ($10.3 attributable to Air Products after tax, or $0.05 per share) that was recorded for certain de-designated interest rate swaps associated with the financing for the NEOM Green Hydrogen Project. Refer to Note 3, Variable Interest Entities, and Note 7, Financial Instruments, to the consolidated financial statements for additional information. Additionally, non-service pension costs were $10.5 ($7.9 after tax, or $0.04 per share) for the first quarter of fiscal year 2025 compared to $24.9 ($18.7 after tax, or $0.08 per share) in the prior year. This decrease was driven by a higher expected return on plan assets, lower interest cost, and a decrease in actuarial loss amortization.
Current wording
Other non-operating expense of $18.6 increased $9.4 from the prior year. The increase was driven by lower interest income on short-term investments, which was primarily due to interest rate fluctuations and a lower investment balance. Additionally, during the second quarter of fiscal year 2025, we recorded an unrealized loss of $11.5 ($3.0 attributable to Air Products after tax, or $0.01 per share) related to certain de-designated interest rate swaps associated with the financing for the NEOM Green Hydrogen Project. Refer to Note 3, Variable Interest Entities, and Note 8, Financial Instruments, to the consolidated financial statements for additional information. These items were partially offset by lower non-service pension costs, which were $10.7 ($8.0 after tax, or $0.04 per share) for the second quarter of fiscal year 2025 compared to $25.1 ($18.9 after tax, or $0.08 per share) in the prior year.
Previous wording
Our adjusted effective tax rate, which excludes the impact of adjustments presented in the "Reconciliations of Non-GAAP Financial Measures" section beginning on page 41, was 18.7% and 18.1% for the three months ended 31 December 2024 and 2023, respectively.
Current wording
Our adjusted effective tax rate, which excludes the impact of adjustments presented in the "Reconciliations of Non-GAAP Financial Measures" section beginning on page 65, was 19.1% and 18.9% for the three months ended 31 March 2025 and 2024, respectively.
Previous wording
Discussion of First Quarter Results by Business Segment
Current wording
Discussion of Second Quarter Results by Business Segment
Previous wording
•Sales of $2,931.5 decreased 2%, or $65.9, due to lower volumes of 2% and an unfavorable impact from currency of 1%, which were partially offset by favorable pricing of 1%. Lower volumes driven by the LNG business divestiture in September 2024, which resulted in a headwind of approximately 2%, and a lower contribution from on-sites and merchant in the Europe segment were partially offset by a significant, non-recurring sale of helium to an existing merchant customer in the Americas segment. Energy cost pass-through to customers was flat versus the prior year.
Current wording
•Sales of $5.8 billion decreased 1%, or $79.9, due to lower volumes of 3% and unfavorable currency of 1%, partially offset by higher energy cost pass-through to customers of 2% and higher pricing of 1%. The lower volumes were attributable to the divestiture of the LNG business in September 2024, which resulted in a headwind of approximately 2%, as well as lower global demand for helium. These items were partially offset by a significant, non-recurring sale of helium to an existing merchant customer in the Americas segment during the first quarter as well as higher volumes in our on-site business, primarily in the Americas segment.
Previous wording
(A)EPS impact reflected within "Gain on de-designation of cash flow hedges" was calculated based on an after-tax gain attributable to Air Products of $10.3. The gain attributable to our noncontrolling partners was $25.2.
Current wording
(B)The per share impact reflected within "Gain on de-designation of cash flow hedges" was calculated based on an after-tax gain attributable to Air Products of $7.3. The gain attributable to our noncontrolling partners was $17.7.
Previous wording
Sales of $2,931.5 decreased 2%, or $65.9, due to lower volumes of 2% and an unfavorable impact from currency of 1%, partially offset by favorable pricing of 1%. Unfavorable volumes were driven by the divestiture of the LNG business in September 2024 and a lower contribution from on-sites and merchant in the Europe segment, which were partially offset by a significant, non-recurring sale of helium to an existing merchant customer in the Americas segment. The impact attributable to the LNG divestiture was approximately 2%. The modest 1% total company price improvement, which equates to a 2% improvement for the merchant business, was driven by pricing in the Americas and Europe segments. The unfavorable currency impact was primarily attributable to the strengthening of the U.S. Dollar against currencies in South America and Asia. Energy cost pass-through to customers was flat versus the prior year.
Current wording
Sales of $5.8 billion decreased 1%, or $79.9, due to lower volumes of 3% and unfavorable currency of 1%, partially offset by higher energy cost pass-through to customers of 2% and higher pricing of 1%. Unfavorable volumes were attributable to the divestiture of the LNG business in September 2024, which resulted in a headwind of approximately 2%, as well as lower global demand for helium. These items were largely offset by a significant, non-recurring sale of helium to an existing merchant customer in the Americas segment in the first quarter as well as higher volumes in our on-site business, primarily in the Americas segment. The 1% total company price improvement, which equates to a 3% improvement for the merchant business, was attributable to non-helium pricing actions in the Americas and Europe segments.
Previous wording
Other income of $22.9 increased $22.1 primarily due to the sale of a U.S. equity method investment and a prior year unfavorable foreign exchange impact from the devaluation of the Argentine peso.
Current wording
Other income of $36.8 increased 65%, or $14.5, primarily due to the sale of an equity method investment during the first quarter of fiscal year 2025 and a prior year unfavorable foreign exchange impact related to the devaluation of the Argentine peso. These items were partially offset by higher income from non-recurring asset sales in the prior year.
Previous wording
During the first quarter of fiscal year 2025, we incurred costs of $29.9 ($21.9 after tax, or $0.10 per share) in connection with our response to a proxy contest. These costs, which are reflected on our consolidated income statements as “Shareholder activism costs”, include legal and other professional service fees as well as incremental proxy solicitation costs related to the 2025 Annual Meeting of Shareholders.
Current wording
During the first half of fiscal year 2025, we incurred costs of $61.3 related to a proxy contest as further discussed in Note 17, Supplemental Information, to the consolidated financial statements. We recognized an income tax benefit of $8.4 primarily related to costs incurred during the first quarter for legal and other professional service fees as well as incremental proxy solicitation costs related to the 2025 Annual Meeting of Shareholders.
Previous wording
Sales of $1,287.6 increased 3%, or $35.5, as higher volumes of 3% and higher pricing of 2% were partially offset by lower energy cost pass-through to customers of 1% and an unfavorable currency impact of 1%. The volume improvement was primarily due to a significant, non-recurring sale of helium to an existing merchant customer. The total segment pricing increase of 2% equates to a 4% improvement in our merchant business, where pricing was favorable across most product lines.
Current wording
Sales of $2.6 billion increased 3%, or $76.9, as higher pricing of 2%, higher volumes of 1%, and higher energy cost pass-through to customers of 1% were partially offset by an unfavorable currency impact of 1%. The total segment pricing increase of 2% equates to a 4% improvement in our merchant business, which reflects favorable pricing across most non-helium product lines. The volume improvement reflects a significant, non-recurring sale of helium to an existing merchant customer during the first quarter of fiscal year 2025, growth in our on-site hydrogen business, and a favorable one-time customer contract amendment in the second quarter of fiscal year 2025, which were mostly offset by lower demand for helium.
Previous wording
Operating income of $216.4 increased 2%, or $5.2, due to lower costs of $6 and favorable volumes of $3, partially offset by lower pricing, net of power and fuel costs, of $2 and unfavorable currency of $2. The cost improvement was primarily attributable to productivity improvements, which were partially offset by higher costs related to incentive compensation and inflation. Operating margin of 26.5% decreased 10 bp from 26.6% in the prior year.
Current wording
Operating income of $407.8 decreased 2%, or $7.0, primarily due to lower pricing, net of power and fuel costs, of $11 and unfavorable currency of $8, partially offset by lower costs of $10. The cost improvement was primarily attributable to productivity, which was partially offset by higher costs related to incentive compensation and inflation. Operating margin of 25.6% decreased 80 bp from 26.4% in the prior year.
Previous wording
Equity affiliates’ income of $10.3 increased 145%, or $6.1, driven by prior year maintenance expense at an affiliate in China.
Current wording
Equity affiliates’ income of $20.8 increased 66%, or $8.3, driven by prior year maintenance expense at an affiliate in China as well as higher income from affiliates in Thailand.
Previous wording
We present certain financial measures, other than in accordance with U.S. generally accepted accounting principles ("GAAP"), on an "adjusted" or "non-GAAP" basis. On a consolidated basis, these measures include adjusted earnings per share ("EPS"), adjusted EBITDA, adjusted EBITDA margin, the adjusted effective tax rate, and capital expenditures. On a segment basis, these measures include adjusted EBITDA and adjusted EBITDA margin. In addition to these measures, we also present certain supplemental non-GAAP financial measures to help the reader understand the impact that certain disclosed items, or "non-GAAP adjustments," have on the calculation of our adjusted EPS. For each non-GAAP financial measure, we present a reconciliation to the most directly comparable financial measure calculated in accordance with GAAP.
Current wording
We present certain financial measures, other than in accordance with U.S. generally accepted accounting principles ("GAAP"), on an "adjusted" or "non-GAAP" basis. On a consolidated basis, these measures include adjusted earnings per share ("EPS"), adjusted EBITDA, the adjusted effective tax rate, and capital expenditures, while 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. For each non-GAAP financial measure, we present a reconciliation to the most directly comparable financial measure calculated in accordance with GAAP.
Previous wording
In many cases, non-GAAP financial measures are determined by adjusting the most directly comparable GAAP measure to exclude non-GAAP adjustments that we believe are not representative of our underlying business performance. For example, we exclude the impact of the non-service components of net periodic benefit/cost for our defined benefit pension plans. Non-service related components are recurring, non-operating items that include interest cost, expected returns on plan assets, prior service cost amortization, actuarial loss amortization, as well as special termination benefits, curtailments, and settlements. The net impact of non-service related components is reflected within “Other non-operating income (expense), net” on our consolidated income statements. Adjusting for the impact of non-service pension components provides management and users of our financial statements with a more accurate representation of our underlying business performance because these components are driven by factors that are unrelated to our operations, such as volatility in equity and debt markets. Further, non-service related components are not indicative of our defined benefit plans’ future contribution needs due to the funded status of the plans. Additionally, during the first quarter of fiscal year 2025, we excluded costs associated with our response to actions of activist shareholders, which are not associated with the ongoing operation of our business and are difficult to predict in future periods. We may also exclude certain expenses associated with cost reduction actions and impairment charges as well as gains on disclosed transactions. The reader should be aware that we may recognize similar losses or gains in the future.
Current wording
In many cases, non-GAAP financial measures are determined by adjusting the most directly comparable GAAP measure to exclude gains or losses that we believe are not representative of our underlying business performance. For example, we exclude the impact of the non-service components of net periodic benefit/cost for our defined benefit pension plans. Non-service related components are recurring, non-operating items that include interest cost, expected returns on plan assets, prior service cost amortization, actuarial loss amortization, as well as special termination benefits, curtailments, and settlements. The net impact of non-service related components is reflected within “Other non-operating income (expense), net” on our consolidated income statements. Adjusting for the impact of non-service pension components provides management and users of our financial statements with a more accurate representation of our underlying business performance because these components are driven by factors that are unrelated to our operations, such as volatility in equity and debt markets. Further, non-service related components are not indicative of our defined benefit plans’ future contribution needs due to the funded status of the plans. Additionally, our adjustments this quarter include other gains and losses that are not associated with the ongoing operation of our business. These items are oftentimes difficult to predict; however, the reader should be aware that we may recognize similar gains or losses in the future.
Previous wording
When applicable, the tax impact of our pre-tax non-GAAP adjustments reflects the expected current and deferred income tax impact of our non-GAAP adjustments. These tax impacts are primarily driven by the statutory tax rate of the various relevant jurisdictions and the taxability of the adjustments in those jurisdictions.
Current wording
When applicable, the tax impact of our pre-tax non-GAAP adjustments reflects the expected current and deferred income tax impact of our non-GAAP adjustments. These tax impacts are primarily driven by the statutory tax rate of the various relevant jurisdictions and the taxability of the adjustments in those jurisdictions. Additionally, in some cases, we may adjust for tax-only items, such as the income tax benefit related to U.S. tax reform and additional withholding taxes related to the repatriation of foreign earnings.
Previous wording
The table below provides a reconciliation to the most directly comparable GAAP measure for each of the major components used to calculate adjusted EPS, which we view as a key performance metric. In periods that we have non-GAAP adjustments, we believe it is important for the reader to understand the per share impact of each such adjustment because management does not consider these impacts when evaluating underlying business performance. Per share impacts are calculated independently and may not sum to total GAAP EPS and total adjusted EPS due to rounding.
Current wording
The table below provides a reconciliation to the most directly comparable GAAP measure for each of the major components used to calculate adjusted EPS, which we view as a key performance metric, for the second quarter of fiscal years 2025 and 2024. In periods that we have non-GAAP adjustments, we believe it is important for the reader to understand the per share impact of each such adjustment because management does not consider these impacts when evaluating underlying business performance. Per share impacts are calculated independently and may not sum to total GAAP EPS and total adjusted EPS due to rounding.
Previous wording
We define adjusted EBITDA as net income less income from discontinued operations, net of tax, and excluding non-GAAP adjustments, which we do not believe to be indicative of underlying business trends, before interest expense, other non-operating income (expense), net, income tax provision, and depreciation and amortization expense. Adjusted EBITDA and adjusted EBITDA margin provide useful metrics for management to assess operating performance. Margins are calculated independently for each period by dividing each line item by consolidated sales for the respective period and may not sum to total margin due to rounding.
Current wording
We define adjusted EBITDA as net income or loss less income or loss from discontinued operations, net of tax, and excluding non-GAAP adjustments, which we do not believe to be indicative of underlying business trends, before interest expense, other non-operating income (expense), net, income tax expense (benefit), and depreciation and amortization expense. Adjusted EBITDA provides a useful metric for management to assess operating performance on both a consolidated and a segment basis.
Previous wording
The table below presents 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:
Current wording
The table below presents a reconciliation of net income (loss) on a GAAP basis to adjusted EBITDA:
Previous wording
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 three months ended 31 December 2024 and 2023:
Current wording
The tables below present a reconciliation of operating income (loss) by segment to adjusted EBITDA by segment for the three and six months ended 31 March 2025 and 2024:
Previous wording
As of 31 December 2024, we had $1,474.2 of foreign cash and cash items compared to total cash and cash items of $1,845.5. We do not expect that a significant portion of the earnings of our foreign subsidiaries and affiliates will be subject to U.S. income tax upon repatriation to the U.S. Depending on the country in which the subsidiaries and affiliates reside, the repatriation of these earnings may be subject to foreign withholding and other taxes. However, since we have significant current investment plans outside the U.S., it is our intent to permanently reinvest the majority of our foreign cash and cash items that would be subject to additional taxes outside the U.S.
Current wording
As of 31 March 2025, we had $1,423.1 of foreign cash and cash items compared to total cash and cash items of $1,491.4. We do not expect that a significant portion of the earnings of our foreign subsidiaries and affiliates will be subject to U.S. income tax upon repatriation to the U.S. Depending on the country in which the subsidiaries and affiliates reside, the repatriation of these earnings may be subject to foreign withholding and other taxes. However, since we have significant current investment plans outside the U.S., it is our intent to permanently reinvest the majority of our foreign cash and cash items that would be subject to additional taxes outside the U.S.
Previous wording
For the first three months of fiscal year 2024, cash provided by operating activities was $626.6. The working capital accounts were a use of cash of $369.6, primarily driven by $268.5 from payables and accrued liabilities, $64.5 from other receivables, and $48.6 from inventories. The use of cash within "Payables and Accrued Liabilities" primarily resulted from payments for incentive compensation, a reduction of customer advances for sale of equipment projects as we recognized revenue, and a reduction of liabilities associated with accrued utilities. The use of cash within "Other receivables" primarily related to the payment of value added taxes incurred in the construction of our larger projects, for which we claimed a refund. The use of cash within "Inventories" primarily related to purchases of helium.
Current wording
For the first six months of fiscal year 2024, cash provided by operating activities was $1,428.3. We recorded a charge of $57.0 for the accrual of severance and other post-employment benefits. The working capital accounts were a use of cash of $486.1. A use of cash of $301.0 within "Payables and accrued liabilities" primarily resulted from payments for incentive compensation under the fiscal year 2023 plan, a reduction of customer advances for sale of equipment projects as we recognized revenue, and a reduction of liabilities associated with accrued utilities. The use of cash of $111.7 within "Other working capital" primarily related to the timing of tax payments. The use of cash of $72.7 within "Inventories" primarily related to purchases of helium. The use of cash of $31.6 within "Other receivables" primarily related to the payment of value added taxes incurred in the construction of our larger projects for which we will claim a refund in the near term.
Previous wording
For the first three months of fiscal year 2025, cash used for investing activities was $2,182.1. The use of cash primarily resulted from additions to plant and equipment, including long-term deposits, of $2,117.6. Refer to the "Capital Expenditures" section below for further detail. Purchases of investments of $117.6 included purchases of time deposits, which have terms greater than three months but less than one year, and exceeded proceeds from investments of $5.0.
Current wording
For the first six months of fiscal year 2025, cash used for investing activities was $4,419.4. The use of cash primarily resulted from additions to plant and equipment, including long-term deposits, of $4,009.1. Refer to the "Capital Expenditures" section below for further detail. Investments in and advances to unconsolidated affiliates resulted in a use of cash of $365.4. Purchases of investments of $117.6 included purchases of time deposits, which have terms greater than three months but less than one year, and exceeded proceeds from investments of $11.1.
Previous wording
For the first three months of fiscal year 2024, cash used for investing activities was $1,665.6. The use of cash primarily resulted from additions to plant and equipment, including long-term deposits, of $1,445.5 and an investment in financing receivables of $301.8. Refer to the Capital Expenditures section below for further detail. Proceeds from investments of $120.1 resulted from maturities of time deposits and treasury securities with terms greater than three months but less than one year and exceeded purchases of investments of $55.5.
Current wording
For the first six months of fiscal year 2024, cash used for investing activities was $3,226.0. The use of cash primarily resulted from additions to plant and equipment, including long-term deposits, of $3,114.9 and an investment in financing receivables of $392.4. Proceeds from investments of $367.4 resulted from maturities of time deposits and treasury securities with terms greater than three months but less than one year and exceeded purchases of investments of $136.4.
Previous wording
Capital expenditures for the first three months of fiscal year 2025 totaled $1,209.8 compared to $1,385.7 for the first three months of fiscal year 2024. Spending for plant and equipment primarily included project spending for our clean energy projects such as the NEOM Green Hydrogen Project in NEOM City, Saudi Arabia, as well as our clean energy complexes in Louisiana, United States, and Alberta, Canada. Additionally, we continue to invest capital in our core industrial gas business for new industrial gas plants as well as maintaining and replacing existing facilities. The investment in financing receivables of $15.3 during the first quarter of fiscal year 2025 relates to remaining payments associated with the purchase of a natural gas-to-syngas processing facility in Uzbekistan. The prior year investment in financing receivables of $301.8 included a payment of $100 related to this facility as well as payments associated with the purchase of renewable fuel assets from World Energy. Refer to Note 14, Supplemental Information, and Note 3, Variable Interest Entities, to the consolidated financial statements, respectively, for additional information.
Current wording
Capital expenditures for the first six months of fiscal year 2025 totaled $2,939.4 compared to $2,671.1 for the first six months of fiscal year 2024. Spending for plant and equipment primarily included project spending for our clean energy projects such as the NEOM Green Hydrogen Project in NEOM City, Saudi Arabia, as well as our clean energy complexes in Louisiana, United States, and Alberta, Canada. Additionally, we continue to invest capital in our core industrial gas business for new industrial gas plants as well as maintaining and replacing existing facilities. The investment in and advances to unconsolidated affiliates of $365.4 includes approximately $212 associated with Blue Hydrogen Industrial Gases, and approximately $115 associated with our final investment in JIGPC joint venture. The investment in financing receivables of $35.8 relates to remaining payments associated with the purchase of a natural gas-to-syngas processing facility in Uzbekistan. The prior year investment in financing receivables of $392.4 primarily reflects payments associated with the purchase of renewable fuel assets from World Energy as well as the purchase of a natural gas-to-syngas processing facility in Uzbekistan. Refer to Note 3, Variable Interest Entities, and Note 17, Supplemental Information, to the consolidated financial statements for additional information.
Previous wording
We expect capital expenditures for fiscal year 2025 in the range of $4.5 billion to $5.0 billion. We anticipate capital expenditures to be funded with our current cash balance, cash generated from continuing operations, and additional financing activities.
Current wording
We expect capital expenditures for fiscal year 2025 to be approximately $5 billion. We anticipate capital expenditures to be funded with our current cash balance, cash generated from continuing operations, and additional financing activities.
Previous wording
For the first three months of fiscal year 2025, cash provided by financing activities was $274.2. The source of cash was driven by long-term debt proceeds of $459.2 and investments by noncontrolling interests of $280.9, both of which primarily relate to capital spending by NGHC. These sources of cash were partially offset by dividend payments to shareholders of $393.6.
Current wording
For the first six months of fiscal year 2025, cash provided by financing activities was $1,825.1. The source of cash was driven by long-term debt proceeds of $2.0 billion, which included approximately $1 billion from Eurobonds issued in February 2025. We used the proceeds from the offering to repay commercial paper obligations, including those incurred prior to the closing of our 2025 Eurobond offering for repayment of €300 million aggregate principal amount outstanding of our 1.000% Eurobonds at maturity, plus accrued interest. The remaining $1 billion was borrowed by the NGHC joint venture as further discussed below. Additionally, we received proceeds of $645.6 from commercial paper and short-term borrowings, and $355.7 from investments by noncontrolling interests. These sources of cash were partially offset by dividend payments to shareholders of $787.4.
Previous wording
Total debt increased to $14.5 billion as of 31 December 2024 from $14.2 billion as of 30 September 2024 due to additional borrowings under project financing associated with the NEOM Green Hydrogen Project as further discussed below. Total debt includes related party debt of $292.7 and $304.4 as of 31 December 2024 and 30 September 2024, respectively.
Current wording
Total debt increased to $15.9 billion as of 31 March 2025 from $14.2 billion as of 30 September 2024 due to Eurobond and commercial paper issuances, and project financing associated with the NEOM Green Hydrogen Project as further discussed below. Total debt includes related party debt of $294.4 and $304.4 as of 31 March 2025 and 30 September 2024, respectively.
Previous wording
We have a five-year $3.0 billion revolving credit agreement maturing 31 March 2029 (the “2024 Five-Year Credit Agreement”) as well as a 364-day $500 revolving credit agreement maturing 27 March 2025 that we have the ability to convert into a term loan maturing 27 March 2026 (the "2024 364-Day Credit Agreement" and, together with the 2024 Five-Year Credit Agreement, the "2024 Credit Agreements"). Both of the 2024 Credit Agreements are syndicated facilities that provide a source of liquidity and support our commercial paper program through availability of senior unsecured debt to us and certain of our subsidiaries. No borrowings were outstanding under either of the 2024 Credit Agreements as of 31 December 2024.
Current wording
During the second quarter of fiscal year 2025, we refinanced our existing 364-day $500 revolving credit agreement to extend its maturity date from 27 March 2025 to 26 March 2026. All other terms remain consistent with the original agreement, including our ability to convert the facility into a term loan maturing 26 March 2027. Separately, we also have a five-year $3.0 billion revolving credit agreement that matures on 31 March 2029. Both the five-year agreement and the 364-day agreement 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. No borrowings were outstanding under either of the agreements as of 31 March 2025.
Previous wording
We also have credit facilities available to certain of our foreign subsidiaries totaling $1,196.9, of which $1,102.0 was borrowed and outstanding as of 31 December 2024. The amount borrowed and outstanding as of 30 September 2024 was $1,129.0.
Current wording
We also have credit facilities available to certain of our foreign subsidiaries totaling $415.7, all of which was borrowed and outstanding as of 31 March 2025. The amount borrowed and outstanding as of 30 September 2024 was $1,129.0, which included long-term borrowings of approximately $675 that we derecognized upon deconsolidation of the Blue Hydrogen Industrial Gases Company ("BHIG") subsidiary during the second quarter. Refer to Note 17, Supplemental Information, to the consolidated financial statements for additional information.
Previous wording
NGHC has access to project financing of approximately $6.1 billion, which is expected to fund approximately 73% of the NEOM Green Hydrogen Project and is being drawn over the construction period, as well as additional credit facilities totaling approximately $500 primarily for NGHC's working capital needs. Creditors of NGHC do not have recourse to the general credit of Air Products. As of 31 December 2024, the joint venture had borrowed short- and long-term principal amounts totaling $3.8 billion compared to $3.3 billion as of 30 September 2024. Refer to Note 3, Variable Interest Entities, to the consolidated financial statements for additional information.
Current wording
NGHC has access to project financing of approximately $6.1 billion, which is expected to fund approximately 73% of the NEOM Green Hydrogen Project and is being drawn over the construction period, as well as additional credit facilities totaling approximately $500 primarily for NGHC's working capital needs. Creditors of NGHC do not have recourse to the general credit of Air Products. As of 31 March 2025, the joint venture had borrowed short- and long-term principal amounts totaling $4.3 billion compared to $3.3 billion as of 30 September 2024. Refer to Note 3, Variable Interest Entities, to the consolidated financial statements for additional information.
Previous wording
Dividends are paid quarterly, usually during the sixth week after the close of the fiscal quarter. 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. Additionally, on 22 January 2025, the Board of Directors approved a $0.02 per share increase to our quarterly dividend, marking the 43 rd consecutive year of dividend increases. The dividend declared in January is payable on 12 May 2025 to shareholders of record at the close of business on 1 April 2025. We expect to continue our history of increasing our quarterly dividend.
Current wording
Dividends are paid quarterly, usually during the sixth week after the close of the fiscal quarter. On 21 November 2024, the Board of Directors declared a quarterly dividend of $1.77 per share that was payable on 10 February 2025 to shareholders of record at the close of business on 2 January 2025. Additionally, on 22 January 2025, the Board of Directors approved a $0.02 per share increase to our quarterly dividend, marking the 43 rd consecutive year of dividend increases. The $1.79 per share dividend declared in January is payable on 12 May 2025 to shareholders of record at the close of business on 1 April 2025. We expect to continue our history of increasing our quarterly dividend.
Previous wording
Net periodic cost was $15.8 and $30.2 for the three months ended 31 December 2024 and 2023, respectively. The decrease in costs versus the prior year were 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. Non-service related components of net periodic cost are reflected within "Other non-operating income (expense), net" on our consolidated income statements.
Current wording
Net periodic cost was $15.7 and $31.5 for the three and six months ended 31 March 2025, respectively. Net periodic cost was $30.4 and $60.6 for the three and six months ended 31 March 2024, respectively. The decrease in costs versus the prior year were 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. Non-service related components of net periodic cost are reflected within "Other non-operating income (expense), net" on our consolidated income statements.
Previous wording
Service costs result from benefits earned by active employees and are reflected as operating expenses primarily within "Cost of sales" and "Selling and administrative expense" on our consolidated income statements. The amount of service costs capitalized in the first three months of fiscal years 2025 and 2024 was not material.
Current wording
Service costs result from benefits earned by active employees and are reflected as operating expenses primarily within "Cost of sales" and "Selling and administrative expense" on our consolidated income statements. The amount of service costs capitalized in the first six months of fiscal years 2025 and 2024 was not material.
Previous wording
Management considers various factors when making pension funding decisions, including tax, cash flow, and regulatory implications. For the three months ended 31 December 2024 and 2023, our cash contributions to funded pension plans and benefit payments for unfunded pension plans were $8.2 and $12.0, respectively.
Current wording
Management considers various factors when making pension funding decisions, including tax, cash flow, and regulatory implications. For the six months ended 31 March 2025 and 2024, our cash contributions to funded pension plans and benefit payments for unfunded pension plans were $14.3 and $19.2, respectively.
Showing the first 40 of 42 pairs. Open the source sections for the rest.
Rearranged current paragraphs (16)
Current report — wording carried from elsewhere
(B)The per share impact reflected within "Loss on de-designation of cash flow hedges" was calculated based on an after-tax loss attributable to Air Products of $3.0. The loss attributable to our noncontrolling partners was $7.5.
Current report — wording carried from elsewhere
The diluted per share impacts presented in the tables below were calculated independently and may not sum to the total change due to rounding.
Current report — wording carried from elsewhere
The table below summarizes the diluted per share impact of our non-GAAP adjustments for the first six months of fiscal years 2025 and 2024:
Current report — wording carried from elsewhere
The table below summarizes the major factors that impacted consolidated sales for the periods presented:
Current report — wording carried from elsewhere
Cost of Sales and Gross Margin
Current report — wording carried from elsewhere
Research and development expense of $44.9 decreased 12%, or $6.2. Research and development expense as a percentage of sales decreased to 0.8% from 0.9% in the prior year.
Current report — wording carried from elsewhere
Interest incurred increased 22%, or $51.6, primarily due to a higher debt balance. Capitalized interest increased 66%, or $80.2, due to a higher carrying value of projects under construction, including the NEOM Green Hydrogen Project.
Current report — wording carried from elsewhere
Other Non-Operating Income (Expense), net
Current report — wording carried from elsewhere
The effective tax rate equals the income tax provision divided by income before taxes. Equity affiliates' income is primarily included net of income taxes within income before taxes on our consolidated income statements.
Current report — wording carried from elsewhere
Our adjusted effective tax rate, which excludes the impact of adjustments presented in the "Reconciliations of Non-GAAP Financial Measures" section beginning on page 65, was 18.9% and 18.5% for the six months ended 31 March 2025 and 2024, respectively.
Current report — wording carried from elsewhere
Discussion of First Six Months Results by Business Segment
Current report — wording carried from elsewhere
The table below summarizes the major factors that impacted sales in the Americas segment for the periods presented:
Current report — wording carried from elsewhere
The table below summarizes the major factors that impacted sales in the Asia segment for the periods presented:
Current report — wording carried from elsewhere
The table below summarizes the major factors that impacted sales in the Europe segment for the periods presented:
Current report — wording carried from elsewhere
Additionally, during the first six months of fiscal year 2025, we recorded changes to project revenue and cost estimates on certain sale of equipment projects that are accounted for under the cost incurred input method. Accordingly, we recorded cumulative effect adjustments that unfavorably impacted operating loss by approximately $15 and $45 for the three and six months ended 31 March 2025, respectively.
Current report — wording carried from elsewhere
There were no other changes to our estimates during the first six months of fiscal year 2025 that had a significant impact on our financial condition, change in financial condition, liquidity, or results of operations.