Air Products & Chemicals, Inc.
For the period ended Jun 30, 2025. Filed Jul 31, 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.
Jun 30, 2025 · Filed Jul 31, 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 2025-03-31; filed 2025-05-01.
0000002969-25-000027
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 EstimatesCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-07-31.
0000002969-25-000044
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThird Quarter 2025 in SummaryThird Quarter 2025 Results of OperationsFirst Nine Months 2025 in SummaryFirst Nine 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 241 previous paragraphs and 252 current paragraphs.
90 unchanged; 80 reworded; 76 added; 58 removed; 13 previous and 6 current paragraphs rearranged.
Tables are not compared: 42 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 (76)
Current report
THIRD QUARTER 2025 VS. THIRD QUARTER 2024
Current report
•Sales of $3.0 billion increased 1%, or $37.2, as higher energy cost pass-through to customers of 3%, higher pricing of 1%, and a favorable impact from currency of 1% were partially offset by lower volumes of 4%. The lower volumes primarily reflect the September 2024 LNG business divestiture, lower global helium demand, and project exits, partially offset by higher on-sites.
Current report
•Operating income of $790.6 increased 7%, or $53.0, reflecting gains from the sale of a business and other assets, non-helium merchant pricing, and cost improvements. These benefits were partially offset by shareholder activism-related costs, a net charge for updated cost estimates related to previously announced business and asset actions, and the September 2024 LNG business divestiture. Operating margin of 26.2% increased 150 basis points ("bp") from 24.7% in the prior year.
Current report
•Equity affiliates' income of $167.6 decreased 1%, or $1.3.
Current report
•Net income of $723.2 increased 2%, or $14.3, as gains from the sale of a business and other assets, higher non-helium merchant pricing, and cost improvements were partially offset by lower volumes, shareholder activism-related costs, and a charge for business and asset actions.
Current report
•Adjusted EBITDA of $1.3 billion increased 3%, or $42.9, driven by favorable costs and higher pricing, partially offset by lower volumes.
Current report
•EPS of $3.24 increased 4%, or $0.11 per share. EPS major factors are summarized in the table presented on page 47.
Current report
•Adjusted EPS of $3.09 decreased 3%, or $0.11 per share. Adjusted EPS excludes a net gain of $0.15 per share driven by gains recognized on the sale of a business and other assets as well as other adjustments as summarized in the reconciliation on page 67.
Current report
(A)Reflected on the consolidated income statements within "Other income (expense), net."
Current report
Discussion of Third Quarter Consolidated Results
Current report
Cost of sales of $2.0 billion increased 2%, or $34.5, primarily due to higher energy cost pass-through to customers of $100, an unfavorable currency impact of $25, and higher power and fuel costs in our merchant business of $10, partially offset by lower costs of $102 attributable to lower sales volumes. Other costs were relatively flat as productivity improvements and lower planned maintenance were largely offset by higher depreciation expense and fixed-cost inflation. Gross margin of 32.5% decreased 30 bp from 32.8% in the prior year primarily due to higher energy cost pass-through to customers.
Current report
During the third quarter of fiscal year 2025, we recorded a charge of $24.1 ($15.4 after tax, or $0.07 per share) related to business and asset actions. This charge reflects updated cost estimates associated with our previously announced decision to exit certain clean energy generation and distribution projects. For additional information, refer to the discussion for the first nine months of fiscal year 2025 beginning on page 58 of this Management's Discussion and Analysis as well as Note 4, Business and Asset Actions, to the consolidated financial statements. The charge is not reflected in segment results.
Current report
During the third quarter of fiscal year 2025, we recorded shareholder activism-related costs of $25.0 ($18.8 after tax, or $0.08 per share). These costs primarily reflect a cash reimbursement to Mantle Ridge for expenses incurred during its proxy engagement with Air Products. Refer to Note 19, Supplemental Information, for additional information. Shareholder activism-related costs are not reflected in segment results.
Current report
During the third quarter of fiscal year 2025, we recognized a gain of $67.3 ($51.9 after tax, or $0.23 per share) on the sale of our 100% ownership interest in a consolidated subsidiary in Singapore. This gain is not reflected in the results of the Asia segment. Refer to Note 5, Acquisitions and Divestitures, to the consolidated financial statements for additional information. Prior to the divestiture, the subsidiary contributed annual sales of approximately $50 to our Asia segment, primarily through the merchant gas supply mode.
Current report
Other income of $36.5 increased 82%, or $16.4. The increase was driven by a $31.3 gain ($23.8 after tax, or $0.11 per share) on the sale of a regional office in Hersham, England, which was not reflected in the results of the Europe segment. In the prior-year quarter, other income benefited from a favorable legal settlement in our Americas segment related to energy management charges in connection with an extreme weather event in 2021.
Current report
Operating Income and Operating Margin
Current report
Operating income of $790.6 increased 7%, or $53.0. In fiscal year 2025, we recognized pre-tax gains totaling approximately $99 in connection with the sale of a consolidated subsidiary and a regional office, as described above. Compared to the prior year, higher pricing, net of power and fuel costs, favorably impacted operating results by $15, driven by non-helium merchant products. Costs were $9 favorable as productivity improvements and lower planned maintenance were partially offset by higher depreciation expense, fixed-cost inflation, and a favorable legal settlement recorded in the prior year. These items were partially offset by shareholder activism-related costs of $25 and charges for business and asset actions of $24. Additionally, volumes were unfavorable by $23, reflecting the September 2024 divestiture of the LNG business, lower global helium demand, and previously announced project exits. In the prior year, the LNG business contributed approximately $35 in operating income. These headwinds were partially offset by higher on-site volumes.
Current report
Operating margin of 26.2% increased 150 bp compared to 24.7% in the prior year, primarily reflecting the margin impact of gains from the sale of a subsidiary and a regional office, partially offset by charges for business and asset actions and shareholder activism-related costs.
Current report
Equity affiliates' income of $167.6 decreased 1%, or $1.3.
Current report
Interest expense of $61.4 increased 10%, or $5.7, driven by the impact of project exits and a higher debt balance, partially offset by a higher carrying value of ongoing projects under construction.
Current report
During the third quarter of fiscal year 2025, we recorded a pre-tax loss from discontinued operations of $10.6 ($8.0 after tax) primarily to increase our existing liability for retained environmental remediation obligations associated with production facilities in the atmospheric emulsions and global pressure sensitive adhesives businesses sold in 2008. Refer to the "Piedmont" discussion under Note 14, Commitments and Contingencies, for additional information. The loss did not have an impact on our statement of cash flows for the first nine months of fiscal year 2025.
Current report
Net income of $723.2 increased 2%, or $14.3. Fiscal year 2025 benefited from gains recognized in connection with the sale of a consolidated subsidiary and a regional office, higher non-helium merchant pricing, and lower non-service pension costs. Costs were also favorable, as productivity improvements and lower planned maintenance were partially offset by higher depreciation expense, fixed-cost inflation, and a prior year legal settlement. These items were partially offset by lower volumes, shareholder activism-related costs, and charges for business and asset actions. The lower volumes were primarily associated with the divestiture of the LNG business in September 2024. Additionally, fiscal year 2025 includes an after-tax loss from discontinued operations, primarily reflecting an increase to an existing liability for retained environmental remediation obligations associated with a previously divested business.
Current report
Adjusted EBITDA of $1.3 billion increased 3%, or $42.9, driven by favorable costs and higher pricing, partially offset by lower volumes.
Current report
On 4 July 2025, H.R.1, commonly referred to as the One Big Beautiful Bill Act (OBBBA), was enacted in the United States. OBBBA includes a broad range of tax reform provisions, including extending and modifying certain key Tax Cuts and Jobs Act provisions (both domestic and international), expanding certain Inflation Reduction Act incentives, and accelerating the phase-out of other provisions. We are evaluating the impacts of this legislation on our consolidated financial statements.
Current report
Despite the OBBBA’s revisions to the Inflation Reduction Act incentives, we still anticipate future benefits from tax incentives for certain carbon sequestration and clean hydrogen production projects.
Current report
Sales of $1.3 billion increased 2%, or $26.3, as higher energy cost pass-through to customers of 7% and favorable pricing of 1% were partially offset by lower volumes of 6%. Higher energy cost pass-through to customers was primarily attributable to higher natural gas prices in the U.S. Gulf Coast and California. The total segment price increase of 1% equates to a 3% improvement in our merchant business, primarily in non-helium product lines. Volumes were unfavorable primarily due to lower on-sites, including previously announced project exits, and lower helium demand.
Current report
Operating income of $374.1 decreased 4%, or $17.0, primarily due to unfavorable costs of $21 and lower volumes of $4, partially offset by higher pricing, net of power and fuel costs in our merchant business, of $9. The unfavorable costs were driven by maintenance-related depreciation and a favorable prior year legal settlement. Operating margin of 29.7% decreased 200 bp from 31.7% in the prior year, primarily due to higher energy cost pass-through to customers.
Current report
Equity affiliates’ income of $37.8 increased 1%, or $0.3.
Current report
Operating income of $216.8 increased 8%, or $16.7. Favorable costs of $25, primarily due to productivity improvements and lower maintenance, were partially offset by $10 of lower pricing, net of power and fuel costs, which was primarily attributable to helium. Operating margin of 26.8% increased 150 bp from 25.3% in the prior year, as the cost improvement was partially offset by lower helium pricing.
Current report
Equity affiliates’ income of $9.5 increased 9%, or $0.8.
Current report
Sales of $770.5 increased 11%, or $77.1, due to favorable currency of 5%, higher volumes of 3%, higher pricing of 2%, and higher energy cost pass-through to customers of 1%. Favorable currency was primarily attributable to weakening of the U.S. Dollar against the British Pound Sterling and the Euro. The higher volumes were driven by on-sites, partially offset by lower helium demand. The total segment price increase of 2% equates to a 4% improvement in our merchant business, driven by non-helium product lines.
Current report
Operating income of $225.2 increased 10%, or $20.5, due to higher pricing of $14, net of power and fuel costs, favorable currency of $8, and higher volumes of $4, partially offset by higher costs of $5. The higher costs were driven by depreciation and fixed-cost inflation, partially offset by productivity improvements. Operating margin of 29.2% decreased 30 bp from 29.5% in the prior year as the higher costs and unfavorable business mix were partially offset by pricing.
Current report
Equity affiliates’ income of $29.7 increased 13%, or $3.4, driven by an affiliate in Italy.
Current report
Sales of $38.3 increased 17%, or $5.5, primarily due to higher volumes. Operating income was $8.1 compared to a loss of $1.4 in the prior year, which reflects the impact of lower costs and favorable volumes.
Current report
Equity affiliates' income of $86.0 decreased 4%, or $3.2, driven by JIGPC.
Current report
Sales of $142.9 decreased 39%, or $92.1, and operating loss of $83.1 increased 46%, or $26.2, primarily due to the divestiture of the LNG business in September 2024. Operating income generated by LNG in the prior year was approximately $35. The headwind from the LNG divestiture was partially offset by lower costs related to sale of equipment and productivity improvements.
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Removed paragraphs (58)
Previous report
SECOND QUARTER 2025 VS. SECOND QUARTER 2024
Previous report
•Equity affiliates' income of $145.5 increased 2%, or $2.2, driven by affiliates in Europe and the Middle East.
Previous 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.
Previous report
Discussion of Second Quarter Consolidated Results
Previous 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.
Previous 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.
Previous 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.
Previous 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.
Previous 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.
Previous 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.
Previous 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.
Previous 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.
Previous 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.
Previous report
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 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.
Previous 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.
Previous 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.
Previous 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.
Previous report
Sales of $1.3 billion increased 3%, or $41.4, as higher energy cost pass-through to customers of 4% and favorable pricing of 2% were partially offset by lower volumes of 2% and an unfavorable currency impact of 1%. The increase attributable to energy cost pass-through reflects higher natural gas rates in the U.S. Gulf Coast. The total segment price increase of 2% equates to a 4% improvement in our merchant business, which reflects favorable pricing across most non-helium product lines. Volumes declined due to lower demand for helium, which was partially offset by growth in our on-site hydrogen business and a favorable one-time customer contract amendment.
Previous report
Operating income of $365.7 decreased 2%, or $6.2, as higher costs of $31 and unfavorable currency of $4 were partially offset by favorable business mix of $18 and higher pricing, net of higher power and fuel costs in our merchant business, of $11. Higher costs of $31 reflect higher maintenance and depreciation, project development, and inflation, which were partially offset by productivity improvements. Operating margin of 28.4% decreased 150 bp from 29.9% in the prior year, of which approximately 100 bp was attributable to energy cost pass-through to customers.
Previous report
Operating income of $191.4 decreased 6%, or $12.2, due to lower pricing, net of power and fuel costs, of $9 and unfavorable currency of $6, partially offset by lower costs of $3. Operating margin of 24.7% decreased 140 bp from 26.1% in the prior year primarily due to the impact of lower pricing.
Previous report
Equity affiliates’ income of $10.5 increased 27%, or $2.2, driven by affiliates in Thailand.
Previous report
Sales of $727.4 increased 9%, or $59.5, due to higher energy cost pass-through to customers of 5%, higher pricing of 4%, and higher volumes of 2%, partially offset by unfavorable currency of 2%. The 5% increase attributable to energy cost pass-through reflects higher natural gas rates across the region. The total segment price increase of 4% equates to a 5% improvement in our merchant business, which reflects favorable pricing across most non-helium product lines. Higher volumes were driven by our on-site business and were partially offset by lower demand for most merchant products, including helium. Unfavorable currency was primarily attributable to strengthening of the U.S. Dollar against the Euro.
Previous report
Operating income of $195.5 decreased 3%, or $5.5, due to higher costs of $9, unfavorable business mix of $4, and unfavorable currency of $3, partially offset by higher pricing, net of higher power and fuel costs in our merchant business, of $11. The prior year included higher income from non-recurring asset sales, which contributed to the higher costs in fiscal year 2025. Additionally, higher costs reflect higher depreciation and inflation, which were partially offset by productivity improvements. Operating margin of 26.9% decreased 320 bp from 30.1% in the prior year, of which approximately 150 bp was attributable to energy cost pass-through to customers.
Previous report
Equity affiliates’ income of $27.7 increased $16.0 primarily due to prior year non-recurring items at an affiliate in Italy.
Previous report
Sales of $32.8 decreased 8%, or $2.9, primarily due to lower pricing. Operating loss was $2.9 compared to income of $5.6 in the prior year, which reflects the impact of lower pricing as well higher costs.
Previous report
Equity affiliates' income of $78.2 increased 6%, or $4.3, driven by JIGPC.
Previous report
Sales of $94.7 decreased 53%, or $106.4, primarily due to the divestiture of the LNG business in September 2024.
Previous report
Operating loss of $118.4 increased 35%, or $30.5, primarily due to the divestiture of the LNG business, which generated operating income of approximately $35 in the prior year. Additionally, operating results in fiscal year 2025 were negatively impacted by changes to project cost estimates on certain sale of equipment projects. These impacts were partially mitigated by productivity improvements and lower incentive compensation.
Previous report
Equity affiliates' income of $4.7 decreased 10%, or $0.5.
Previous report
•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 report
•Operating loss was $1.7 billion and operating margin was negative 28.8%, primarily due to materially higher charges for business and asset actions in fiscal year 2025. In the prior year, operating income was $1.3 billion and operating margin was 22.0%.
Previous report
•Net loss was $1.1 billion, primarily due to materially higher charges for business and asset actions in fiscal year 2025. In the prior year, net income was $1.2 billion.
Previous report
•Loss per share of $5.00 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 $5.54. In the prior year, earnings per share ("EPS") was $5.30 and adjusted EPS was $5.67. A summary table of changes to earnings (loss) per share is presented on page 55 below.
Previous 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.
Previous report
Our consolidated income statements for the six 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.
Previous 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.
Previous 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.
Previous 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.
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Reworded paragraphs (80)
Previous 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.
Current wording
Comparisons included in the discussion that follows are for the third quarter and first nine months of fiscal year 2025 versus ("vs.") the third quarter and first nine 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
Summary of Changes in Earnings (Loss) Per Share
Current wording
Summary of Changes in Earnings Per Share
Previous wording
(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 wording
(B)The per share impact reflected within "Gain/Loss on de-designation of cash flow hedges" was calculated based on an after-tax loss attributable to Air Products of $0.1 during the third quarter of fiscal year 2025 compared to a gain of $3.0 in the prior year period. The loss/gain attributable to noncontrolling interests was $0.1 and $7.3 for the three months ended 30 June 2025 and 2024, respectively.
Previous 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:
Current wording
The table below summarizes the diluted per share impact of our non-GAAP adjustments for the third quarter of fiscal years 2025 and 2024:
Previous wording
SECOND QUARTER 2025 RESULTS OF OPERATIONS
Current wording
THIRD QUARTER 2025 RESULTS OF OPERATIONS
Previous wording
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 wording
Sales of $3.0 billion increased 1%, or $37.2, as higher energy cost pass-through to customers of 3%, higher pricing of 1%, and a favorable impact from currency of 1% were partially offset by lower volumes of 4%. The increase in energy cost pass-through to customers was primarily due to higher natural gas prices in the U.S. Gulf Coast and California. The 1% total company price improvement, which equates to a 2% improvement for the merchant business, was driven by non-helium pricing actions primarily in the Europe and Americas segments. Currency was favorable as the U.S. Dollar weakened primarily against the British Pound Sterling and the Euro. Unfavorable volumes were driven by the divestiture of the LNG business in September 2024, which resulted in a headwind of approximately 2%, lower global helium demand, and previously announced project exits, partially offset by higher on-sites.
Previous wording
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 wording
Selling and administrative expense of $222.6 decreased 5%, or $12.8, as productivity improvements were partially offset by fixed-cost inflation. Selling and administrative expense as a percentage of sales decreased to 7.4% from 7.9% in the prior year.
Previous 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.
Current wording
Research and development expense of $24.1 decreased 11%, or $2.9. Research and development expense as a percentage of sales decreased to 0.8% from 0.9% in the prior year.
Previous wording
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 wording
Our estimates related to exiting these projects reflect our best judgment based on information available as of 30 June 2025. Final settlement of these items may differ materially from our current estimates, which could impact our consolidated financial statements in future periods. Additionally, our Board of Directors continues to review the business, which may lead to decisions that could result in additional charges in future periods.
Previous 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.
Current wording
Other non-operating expense of $6.0 increased $4.7 from the prior year. De-designated interest rate swaps related to financing for the NEOM Green Hydrogen Project resulted in an immaterial unrealized loss in the third quarter of fiscal year 2025, compared to a gain of $11.2 ($3.0 after tax, or $0.01 per share) in the prior year. Refer to Note 3, Variable Interest Entities, and Note 10, Financial Instruments, to the consolidated financial statements for additional information. Additionally, we recognized lower interest income on short-term investments in fiscal year 2025. These items were partially offset by a decrease in non-service pension costs, which were $10.9 ($8.1 after tax, or $0.04 per share) for the third quarter of fiscal year 2025 versus $25.3 ($19.1 after tax, or $0.09 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 65, was 19.1% and 18.9% for the three months ended 31 March 2025 and 2024, 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 66, was 18.1% and 16.9% for the three months ended 30 June 2025 and 2024, respectively.
Previous wording
Discussion of Second Quarter Results by Business Segment
Current wording
Discussion of Third Quarter Results by Business Segment
Previous wording
Sales of $774.1 decreased 1%, or $5.6, as an unfavorable currency impact of 3% and lower pricing of 1% were partially offset by higher energy cost pass-through to customers of 2% and higher volumes of 1%. Currency was unfavorable due to strengthening of the U.S. Dollar against most major currencies in the region. The total segment pricing decline of 1% equates to a 2% decline in our merchant business, which was primarily attributable to helium. New assets contributed to the volume improvement across the region and were partially offset by weaker demand for helium.
Current wording
Sales of $810.0 increased 3%, or $20.4, as higher volumes of 2%, higher energy cost pass-through to customers of 1%, and a favorable currency impact of 1%, were partially offset by lower pricing of 1%. The higher volumes were driven by on-sites, partially offset by lower helium demand. The total segment pricing decline of 1% equates to a 4% decline in our merchant business, which was primarily attributable to helium.
Previous wording
FIRST SIX MONTHS 2025 VS. FIRST SIX MONTHS 2024
Current wording
FIRST NINE MONTHS 2025 VS. FIRST NINE MONTHS 2024
Previous wording
•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 wording
•Sales of $8.9 billion decreased $42.7. On a percentage basis, sales were flat as higher energy cost pass-through to customers of 2% and higher pricing of 1% were offset by lower volumes of 3%. Unfavorable volumes were driven by the September 2024 LNG divestiture, lower global helium demand, and previously announced project exits, partially offset by higher on-sites and favorable non-recurring items in the Americas segment.
Previous wording
•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 wording
•Operating loss was $893.8 and operating margin was negative 10.1%, primarily due to project exit costs in fiscal year 2025. In the prior year, operating income was $2.0 billion and operating margin was 22.9%.
Previous wording
•Equity affiliates' income of $296.1 decreased 2%, or $5.6, primarily due to a prior year asset sale in an Americas affiliate and an impairment charge of $6.8 related to a joint venture in China that was recorded during the second quarter of fiscal year 2025. These impacts were partially offset by higher income from an affiliate in Italy.
Current wording
•Equity affiliates' income of $463.7 decreased 1%, or $6.9, primarily due to lower income from JIGPC, a prior year asset sale in an Americas affiliate, and an impairment charge related to a joint venture in China that was recorded during the second quarter of fiscal year 2025. These impacts were partially offset by higher income from an affiliate in Italy.
Previous wording
•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 wording
•Net loss was $364.5, primarily due to materially higher charges for business and asset actions in fiscal year 2025. In the prior year, net income was $1.9 billion.
Previous wording
•Adjusted EBITDA of $2.4 billion decreased 1%, or $14.7, as higher costs, lower volumes, and unfavorable currency were partially offset by productivity improvements and higher pricing.
Current wording
•Adjusted EBITDA of $3.7 billion increased 1%, or $28.2, as higher pricing and productivity improvements were partially offset by higher costs, lower volumes, and unfavorable currency.
Previous wording
•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 wording
•Loss per share of $1.76 was driven by an after-tax charge attributable to Air Products of $2.3 billion for business and asset actions that was primarily recorded during the second quarter. In the prior year, earnings per share ("EPS") was $8.43. Major factors impacting earnings (loss) per share are summarized in the table presented on page 56.
Previous wording
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 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
**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 wording
**Change versus prior period is not meaningful due to materially higher charges for business and asset actions in fiscal year 2025. The per share impact of these charges is primarily reflected in the "Operating Items" section in the table above.
Previous wording
(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 wording
(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 ($10.35 per share). The amount of the charges attributable to our noncontrolling partners was $3.5.
Previous 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.
Current wording
(C)The per share impact reflected within "Gain on de-designation of cash flow hedges" was calculated based on an after-tax gain attributable to Air Products of $7.2 ($0.03 per share) compared to $3.0 ($0.01 per share) in the prior year. Amounts attributable to our noncontrolling partners were $17.6 and $7.3, respectively.
Previous wording
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 wording
The table below summarizes the diluted per share impact of our non-GAAP adjustments for the first nine months of fiscal years 2025 and 2024:
Previous wording
(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 wording
(A)The charge for business and asset actions in fiscal year 2025 was primarily recorded within operating results. For additional information regarding this charge, Refer to Note 4, Business and Asset Actions, to the consolidated financial statements.
Previous wording
FIRST SIX MONTHS 2025 RESULTS OF OPERATIONS
Current wording
FIRST NINE MONTHS 2025 RESULTS OF OPERATIONS
Previous wording
Discussion of First Six Months Consolidated Results
Current wording
Discussion of First Nine Months Consolidated Results
Previous 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.
Current wording
Sales of $8.9 billion decreased $42.7 versus the prior year. On a percentage basis, sales were flat as lower volumes of 3% were partially offset by higher energy cost pass-through to customers of 2% and higher pricing of 1%. Unfavorable volumes were driven by the divestiture of the LNG business in September 2024, which resulted in a headwind of approximately 2%, lower global helium demand, and previously announced project exits within the Americas segment. These items were partially offset by higher on-sites and favorable non-recurring items in the Americas segment during the fiscal half of fiscal year 2025, which included a significant sale of helium to an existing merchant customer and a one-time customer contract amendment. The 1% total company price improvement, which equates to a 2% improvement for the merchant business, was primarily driven by non-helium pricing actions in the Americas and Europe segments.
Previous wording
Cost of sales of $4.1 billion increased $11.7 due to higher energy cost pass-through to customers of $90, higher other costs of $62, and higher power and fuel costs in our merchant business of $30. The other costs of $62 were driven by fixed-cost inflation, depreciation, and incentive compensation. These impacts were partially offset by lower costs of $124 attributable to sales volumes and a favorable currency impact of $46. Gross margin of 30.4% decreased 110 bp from 31.5% in the prior year primarily due to the impact of higher costs.
Current wording
Cost of sales of $6.1 billion increased 1%, or $46.2, due to higher energy cost pass-through to customers of $191, higher costs of $60, and higher power and fuel costs in our merchant business of $40. The higher costs of $60 were driven by depreciation, fixed-cost inflation, and incentive compensation partially offset by productivity improvements. These impacts were partially offset by lower costs of $223 attributable to sales volumes and a favorable currency impact of $22. Gross margin of 31.1% decreased 90 bp from 32.0% in the prior year.
Previous wording
Selling and administrative expense of $464.4 decreased 3%, or $14.6, as productivity improvements were partially offset by inflation and incentive compensation. Selling and administrative expense as a percentage of sales decreased to 7.9% from 8.1% in the prior year.
Current wording
Selling and administrative expense of $687.0 decreased 4%, or $27.4, as productivity improvements were partially offset by fixed-cost inflation and incentive compensation. Selling and administrative expense as a percentage of sales decreased to 7.7% from 8.0% in the prior year.
Previous wording
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 wording
Research and development expense of $69.0 decreased 12%, or $9.1. Research and development expense as a percentage of sales decreased to 0.8% from 0.9% in the prior year.
Previous wording
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 wording
Our consolidated income statements include charges of $3.0 billion ($2.3 billion after tax attributable to Air Products, or $10.35 per share) and $57.0 ($43.8 after tax, or $0.20 per share) for the nine months ended 30 June 2025 and 2024, respectively, for the initiatives discussed below. Charges for business and asset actions are not reflected in segment results.
Previous wording
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 wording
The charge also included $66.1 for involuntary termination benefits for additional actions identified under our existing global cost reduction plan. The charge related to this plan in the prior year was $57.0 ($43.8 after tax, or $0.20 per share). 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.
Previous wording
During the first half of fiscal year 2025, we recorded costs 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. These costs totaled $61.3 ($52.9 after tax, or $0.24 per share) for the six months ended 31 March 2025.
Current wording
In fiscal year 2025, we incurred shareholder activism-related costs of $86.3 ($71.7 after tax, or $0.32 per share) in connection with a proxy contest that concluded in January 2025 following certification of the election of directors at the 2025 Annual Meeting of Shareholders. Shareholder activism-related costs are not reflected in segment results.
Previous wording
The costs incurred during the second quarter were primarily related to 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. On a year-to-date basis, shareholder activism-related costs also include those incurred for legal and other professional service fees as well as incremental proxy solicitation costs related to the 2025 Annual Meeting of Shareholders, most of which were incurred during the first quarter.
Current wording
Shareholder activism-related costs recorded in fiscal year 2025 included $31.9 for legal and other professional service fees as well as incremental proxy solicitation costs related to the 2025 Annual Meeting of Shareholders; $29.7 for 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; and $24.7 for a cash reimbursement to Mantle Ridge for expenses incurred during its proxy engagement. Refer to Note 19, Supplemental Information, for additional information.
Previous wording
Operating loss was $1.7 billion during the first six months of fiscal year 2025 compared to income of $1.3 billion in the prior year. The loss in fiscal year 2025 was driven by materially higher pre-tax charges for business and asset actions of $2,927.9 compared to $57.0 in the prior year. Volumes were unfavorable by $37 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 $60. Fiscal year 2025 also reflects shareholder activism-related costs of $61, higher other costs of $49, and unfavorable currency of $7. The higher other costs were driven by inflation, depreciation, and incentive compensation. Additionally, the prior year included higher income from non-recurring asset sales. These impacts were partially mitigated by productivity improvements and the sale of a U.S. equity method investment during the first quarter of fiscal year 2025. Compared to the prior year, higher pricing favorably impacted operating results by $37, which is net of higher power and fuel costs in our merchant business. The higher pricing was primarily attributable to non-helium merchant products.
Current wording
Operating loss was $893.8 during the first nine months of fiscal year 2025 compared to income of $2.0 billion in the prior year. The loss in fiscal year 2025 was primarily attributable to significantly higher pre-tax charges for business and asset actions, which totaled $3 billion in fiscal year 2025 versus $57 in the prior year. Volumes were lower by $59 driven by the divestment of the LNG business in September 2024. Operating income contributed by the LNG business in the prior year was approximately $95. Fiscal year 2025 also included shareholder activism-related costs of $86. Additionally, other costs were unfavorable by $40 as fixed-cost inflation, higher depreciation, and incentive compensation were partially offset by productivity improvements. We also recorded pre-tax gains totaling approximately $99 in connection with the sale of a consolidated subsidiary and the sale of a regional office during the third quarter of fiscal year 2025. Additionally, higher pricing driven by non-helium merchant products favorably impacted operating results by $51, net of power and fuel costs.
Previous wording
Equity affiliates' income of $296.1 decreased 2%, or $5.6, primarily due to a prior year asset sale in an Americas affiliate and an impairment charge of $6.8 related to a joint venture in China that was recorded during the second quarter of fiscal year 2025. The impairment charge was related to the business and asset actions discussed under Project Exit Costs beginning on page 57. These impacts were partially offset by higher income from an affiliate in Italy.
Current wording
Equity affiliates' income of $463.7 decreased 1%, or $6.9, primarily due to lower income from JIGPC, a prior year asset sale in an Americas affiliate, and an impairment charge related to a joint venture in China that was recorded as part of our business and asset actions during the second quarter of fiscal year 2025. These impacts were partially offset by higher income from an affiliate in Italy.
Previous wording
Other non-operating income of $20.3 increased $44.3 from an expense of $24.0 in the prior year. The increase was driven by lower non-service pension costs, which were $21.2 ($15.9 after tax, or $0.07 per share) for the first six months of fiscal year 2025 compared to $50.0 ($37.6 after tax, or $0.17 per share) for the first six months of fiscal year 2024. Additionally, during the first six months of fiscal year 2025, we recorded an unrealized gain of $27.3 ($7.3 attributable to Air Products after tax, or $0.03 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 interest income on short-term investments, which was primarily due to interest rate fluctuations and a lower investment balance.
Current wording
Other non-operating income of $14.3 increased $39.6 from an expense of $25.3 in the prior year. The increase was driven by lower non-service pension costs, which were $32.1 ($24.0 after tax, or $0.11 per share) for the first nine months of fiscal year 2025 compared to $75.3 ($56.7 after tax, or $0.25 per share) in the prior year. Additionally, de-designated interest rate swaps related to financing for the NEOM Green Hydrogen Project resulted in an unrealized gain of $27.0 ($7.2 attributable to Air Products after tax, or $0.03 per share), compared to $11.2 ($3.0 after tax, or $0.01 per share) in the prior year. Refer to Note 3, Variable Interest Entities, and Note 10, Financial Instruments, to the consolidated financial statements for additional information. These items were partially offset by lower interest income on short-term investments.
Showing the first 40 of 80 pairs. Open the source sections for the rest.
Rearranged current paragraphs (6)
Current report — wording carried from elsewhere
Our effective tax rate was 17.9% and 16.6% for the three months ended 30 June 2025 and 2024, respectively. Our effective rate was higher in fiscal year 2025 due to lower tax benefits on both U.S. export income and excess tax benefits on share-based compensation, and higher net costs on foreign-related income taxed in the U.S. These increases were partially offset by larger benefits in fiscal year 2025 for the release of certain unrecognized tax benefits upon expiration of the statute of limitations.
Current report — wording carried from elsewhere
** Change versus prior period is not meaningful.
Current report — wording carried from elsewhere
For additional information, refer to Note 4, Business and Asset Actions, to the consolidated financial statements.
Current report — wording carried from elsewhere
** Change versus prior period is not meaningful.
Current report — wording carried from elsewhere
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. Fees incurred in connection with the refinancing were not material.
Current report — wording carried from elsewhere
Dividends are paid quarterly, usually during the sixth week after the close of the fiscal quarter. In fiscal year 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. We expect to continue our history of increasing our quarterly dividend.
Rearranged previous paragraphs (13)
Previous report — wording carried elsewhere
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.
Previous report — wording carried elsewhere
In addition to the items discussed above, our effective tax rate was higher in fiscal year 2025 due to higher net costs on foreign-related income taxed in the U.S., which was partially offset by greater tax benefits for foreign investments.
Previous report — wording carried elsewhere
**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.
Previous report — wording carried elsewhere
(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.
Previous report — wording carried elsewhere
(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.
Previous report — wording carried elsewhere
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 first six months 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.
Previous report — wording carried elsewhere
Operating Income (Loss) and Operating Margin
Previous report — wording carried elsewhere
For additional information, refer to Note 16, Income Taxes, to the consolidated financial statements.
Previous report — wording carried elsewhere
Tax Impact of Business and Asset Actions
Previous report — wording carried elsewhere
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.
Previous report — wording carried elsewhere
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).
Previous report — wording carried elsewhere
Equity affiliates’ income of $66.3 decreased 18%, or $15.0, driven by our share of income from an asset sale in the prior year as well as lower income from an affiliate in Mexico.
Previous report — wording carried elsewhere
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.