Air Products & Chemicals, Inc.

We believe we have sufficient cash, cash flows from operations, and access to funding sources to meet our liquidity needs. As further discussed in the "Cash Flows From Financing Activities" section below, we are able to raise capital through a variety of financing activities, including accessing capital or commercial paper markets or drawing upon our credit facilities.

As of 31 December 2025, we held cash and cash items of $1.0 billion, substantially all of which was held outside the U.S. We do not expect a significant portion of the earnings from our foreign subsidiaries and affiliates to be subject to U.S. income tax upon repatriation. Depending on the country in which these entities operate, repatriation of earnings may be subject to foreign withholding and other taxes. However, we intend to indefinitely reinvest the majority of our foreign cash and cash items that would be subject to additional taxes outside the U.S.

Cash Flows From Operations

For the first three months of fiscal year 2026, cash provided by operating activities was $900.7. The working capital accounts were a net use of cash of $215.1, primarily driven by a $191.3 use related to payables and accrued liabilities. This use included payments for incentive compensation under the fiscal year 2025 plan, contract terminations tied to our business and asset actions, and previously accrued severance actions under our global cost reduction plan.

For the first three months of fiscal year 2025, cash provided by operating activities was $811.7. Other adjustments of $122.6 primarily reflected non‑cash currency impacts on intercompany balances. The working capital accounts were a net use of cash of $16.5. A $47.8 use of cash for trade receivables, driven by the timing of cash collections, was partially offset by a $30.5 source of cash within payables and accrued liabilities. The source of cash for payables and accrued liabilities primarily resulted from higher accrued utilities and changes in the fair value of derivative contracts that hedge intercompany loans, partially offset by payments for incentive compensation.

Cash Flows From Investing Activities

For the first three months of fiscal year 2026, cash used for investing activities of $1.2 billion was primarily driven by additions to plant and equipment, including long-term deposits, as discussed in the "Capital Expenditures" section below.

For the first three months of fiscal year 2025, cash used for investing activities was $2.2 billion. The use of cash primarily resulted from additions to plant and equipment, including long-term deposits, of $2.1 billion as discussed in the "Capital Expenditures" section below. Purchases of investments of $117.6 consisted of time deposits with maturities between three months and one year.

Capital Expenditures(Non-GAAP Financial Measure)

The components of our capital expenditures are detailed in the table below. Refer to page 51 for a definition of this non-GAAP financial measure as well as a reconciliation to cash used for investing activities.

(A)Reflects the portion of "Additions to plant and equipment, including long-term deposits" that is associated with NGHC, less our approximate cash investment in the joint venture. Substantially all the funding we provide to NGHC is limited for use by the joint venture for its capital expenditures. For additional information regarding this adjustment, refer to page 51.

Capital expenditures for the first three months of fiscal year 2026 totaled $910.7 compared to $1.2 billion in the prior year. Additions to plant and equipment in both periods primarily reflect cash deployed to support our clean energy initiatives, including the NEOM Green Hydrogen Project, and clean energy complexes in Louisiana, United States, and Alberta, Canada. Spending for the NEOM Green Hydrogen Project is lower in fiscal year 2026 as we near completion of the project.

Outlook for Investing Activities

It is not possible, without unreasonable efforts, to reconcile our forecasted capital expenditures to future cash used for investing activities because management is unable to identify the timing or occurrence of our future investment activity, which is driven by our assessment of competing opportunities at the time we enter into transactions. These decisions, either individually or in the aggregate, could have a significant effect on our cash used for investing activities. Accordingly, management is unable to fully reconcile, without unreasonable efforts, our forecasted capital expenditures to future cash used for investing activities.

We expect capital expenditures for fiscal year 2026 to be approximately $4.0 billion, reflecting continued investment in our energy transition projects, traditional industrial gas projects, and maintenance within our core business. Approximately $1 billion is expected to be dedicated to traditional industrial gas projects. We anticipate funding these expenditures through our existing cash balance and cash generated from continuing operations. We also have access to capital and money market financing as well as other sources of funding as discussed in the "Financing and Capital Structure" section below.

Cash Flows From Financing Activities

For the first three months of fiscal year 2026, cash used for financing activities was $490.1. The use of cash was driven by long-term debt repayments of $569.6, which included the repayment of $550.0 aggregate principal amount of our 1.50% senior notes due October 2025. Additionally, cash dividends paid to shareholders totaled $398.4. These uses of cash were partially offset by $382.5 of long-term debt proceeds driven by incremental borrowings under the project financing arrangement available to NGHC for the NEOM Green Hydrogen Project.

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.

Financing and Capital Structure

Debt

Total debt decreased to $17.5 billion as of 31 December 2025 from $17.7 billion as of 30 September 2025. As noted above, we repaid at maturity $550.0 aggregate principal amount of our 1.50% senior notes due October 2025, plus accumulated and unpaid interest through the maturity date. This repayment was partially offset by approximately $365 in incremental long-term principal borrowings under a project financing arrangement related to the NEOM Green Hydrogen Project, which is non-recourse to Air Products, as further discussed below. Total debt included related party debt of $240.7 and $236.5 as of 31 December 2025 and 30 September 2025, respectively.

Various debt agreements to which we are a party include financial covenants and other restrictions, including restrictions pertaining to the ability to create property liens and enter into certain sale and leaseback transactions. As of 31 December 2025, we were in compliance with all the financial and other covenants under our debt agreements.

Committed Credit Facilities

During the second quarter of fiscal year 2025, we refinanced our existing 364-day $500 revolving credit agreement to extend its maturity date from 27 March 2025 to 26 March 2026 (the “364-Day Credit Agreement”). All other terms remain consistent with the original 364-Day Credit Agreement, including our ability to convert the facility into a term loan maturing 26 March 2027. Fees incurred in connection with the refinancing were not material.

We also maintain a five-year $3.0 billion revolving credit agreement that matures on 31 March 2029 (the “Five-Year Credit Agreement”). Both the 364-Day Credit Agreement and the Five-Year Credit Agreement are syndicated committed facilities that provide a source of liquidity and support our commercial paper program through the availability of senior unsecured debt to us and certain of our subsidiaries. No borrowings were outstanding under either of the agreements as of 31 December 2025 or 30 September 2025.

Separately, certain of our foreign subsidiaries maintain access to committed credit facilities with a combined maximum borrowing capacity of $363.3, all of which was borrowed and outstanding as of 31 December 2025. The amount available and borrowed as of 30 September 2025 was $394.0.

NEOM Green Hydrogen Project Financing

To support the NEOM Green Hydrogen Project, NGHC has access to project financing of approximately $6.1 billion, which is expected to fund about 73% of the project and is being drawn over the construction period, as well as additional credit facilities totaling approximately $500 primarily for NGHC's working capital needs. Creditors of NGHC do not have recourse to the general credit of Air Products. As of 31 December 2025, the joint venture had borrowed short- and long-term principal amounts totaling $5.3 billion compared to $4.9 billion as of 30 September 2025. Refer to Note 3, Variable Interest Entities, to the consolidated financial statements for additional information.

Dividends

We believe that providing a consistent dividend plays a critical role in creating shareholder value. The Board of Directors determines whether to declare cash dividends on our common stock, and the timing and amount of those dividends, based on our financial condition and other factors it deems relevant. Dividends are paid quarterly, typically during the sixth week following the close of the fiscal quarter.

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

In January 2026, the Board of Directors approved a $0.02 per share increase to our quarterly dividend, raising it to $1.81 per share and marking our 44 th consecutive year of dividend increases. The first dividend at this increased rate was declared on 27 January 2026 and is payable on 11 May 2026 to shareholders of record at close of business on 1 April 2026.

In total, we expect to return approximately $1.6 billion to shareholders in 2026.