Air Products & Chemicals, Inc.
For the period ended Jun 30, 2026. Filed Jul 30, 2026.
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, 2026 · Filed Jul 30, 2026
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 2026-03-31; filed 2026-04-30.
0000002969-26-000020
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsSecond Quarter 2026 in SummarySecond Quarter 2026 Results of OperationsFirst Six Months 2026 in SummaryFirst Six Months 2026 Results of OperationsReconciliations of Non-GAAP Financial MeasuresLiquidity and Capital ResourcesPension BenefitsCritical Accounting Policies and EstimatesCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-07-30.
0000002969-26-000036
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThird Quarter 2026 in SummaryThird Quarter 2026 Results of OperationsFirst Nine Months 2026 in SummaryFirst Nine Months 2026 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 223 previous paragraphs and 236 current paragraphs.
89 unchanged; 71 reworded; 75 added; 58 removed; 5 previous and 1 current paragraphs rearranged.
Tables are not compared: 37 previous and 39 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 (75)
Current report
THIRD QUARTER 2026 VS. THIRD QUARTER 2025
Current report
•Sales of $3.2 billion increased 5%, or $138.3, due to higher volumes of 3%, higher pricing of 1%, and favorable currency of 1%.
Current report
•Operating loss was $2.1 billion and operating margin was negative 66.3%. Third quarter 2026 GAAP results include pre-tax charges of approximately $2.9 billion associated with project exit decisions announced on 30 June 2026. In the prior-year quarter, operating income was $790.6 and operating margin was 26.2%.
Current report
•Equity affiliates' income of $205.2 increased 22%, or $37.6, driven primarily by affiliates in the Americas and Middle East and India segments.
Current report
•Loss per share of $6.47 decreased 300%, or $9.71, from earnings per share ("EPS") of $3.24, driven by after-tax charges attributable to Air Products of $2.2 billion ($9.92 per share) associated with project exit decisions announced on 30 June 2026. Excluding these charges and other items, adjusted EPS of $3.47 increased 12%, or $0.38. A summary table of changes in earnings (loss) per share is presented below.
Current report
Summary of Changes in Earnings (Loss) Per Share
Current report
(A)Reflected on the consolidated income statements within "Other income (expense), net."
Current report
Discussion of Third Quarter Consolidated Results
Current report
Sales of $3.2 billion increased 5%, or $138.3, due to higher volumes of 3%, higher pricing of 1%, and favorable currency of 1%. Volume growth was driven by new on-site assets and HyCO facilities. Favorable currency reflected a weaker U.S. Dollar across multiple currencies.
Current report
Cost of sales of $2.1 billion increased 4%, or $84.9. Unfavorable costs of $36 were driven by fixed-cost inflation and higher incentive compensation, partially offset by lower depreciation expense. Unfavorable currency increased costs by $28, while higher sales volumes and energy cost pass-through to customers increased costs by an additional $12 and $6, respectively. Gross margin of 32.8% increased 30 bp from 32.5%.
Current report
Selling and administrative expense of $219.1 decreased 2%, or $3.5, driven by productivity improvements related to our global cost reduction plan, partially offset by higher incentive compensation, fixed-cost inflation, and unfavorable currency. Selling and administrative expense as a percentage of sales improved to 6.9% from 7.4%, down 50 bp from the prior year.
Current report
Business and Asset Actions (Project Exit Costs)
Current report
During the third quarter of fiscal year 2026, we recognized project exit charges of $2.9 billion ($2.2 billion after-tax, or $9.92 per share) as a result of our decision to cancel a clean energy complex under construction in Louisiana, a green hydrogen production facility under construction in Casa Grande, Arizona, and certain other smaller-scale projects supporting clean energy distribution. In the prior-year quarter, we recognized project exit charges of $24.1 pre-tax ($15.4 after-tax, or $0.07 per share), primarily reflecting revisions to cost estimates associated with project exit actions approved in the second quarter of fiscal year 2025. These charges were not reflected in the results of our reportable segments. For additional information, refer to Note 4, Business and Asset Actions, to the consolidated financial statements.
Current report
We recorded shareholder activism-related costs in fiscal year 2025 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. Costs recorded during the third quarter of fiscal year 2025 were $25.0 pre-tax ($18.8 after-tax, or $0.08 per share), primarily related to the reimbursement of proxy-related expenses incurred by Mantle Ridge LP and its affiliated entities. These costs were not reflected in the results of our reportable segments. For additional information, refer to Note 17, Supplemental Information, to the consolidated financial statements.
Current report
During the third quarter of fiscal year 2025, we recognized a gain of $67.3 pre-tax ($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 was not reflected in the results of the Asia segment. Refer to Note 17, Supplemental Information, to the consolidated financial statements for additional information.
Current report
Other income of $14.9 decreased 59%, or $21.6. The decrease was primarily driven by a prior-year gain of $31.3 pre-tax ($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, as well as favorable foreign exchange impacts.
Current report
Operating loss was $2.1 billion during the third quarter of fiscal year 2026 compared to operating income of $790.6 in the prior-year quarter. The current-year loss was driven by pre-tax charges of $2.9 billion associated with project exit decisions announced on 30 June 2026, compared to pre-tax project exit-related charges of $24.1 in the prior-year quarter. Additionally, the prior year included pre-tax gains totaling approximately $99 million in connection with the sale of a consolidated subsidiary and a regional office as discussed above, partially offset by shareholder activism-related costs of $25.
Current report
Volume improved $60, driven primarily by on-site, including new assets and HyCO facilities. Favorable currency impacts contributed $21. Higher pricing, net of power costs, added $16. These factors were partially offset by higher costs of $28, primarily reflecting fixed-cost inflation and higher incentive compensation.
Current report
Operating margin was negative 66.3% compared to 26.2% in the prior-year quarter, which was primarily attributable to the charges for business and asset actions in fiscal year 2026.
Current report
Equity affiliates' income of $205.2 increased 22%, or $37.6, primarily driven by affiliates in the Americas and Middle East and India segments.
Current report
Interest expense decreased 20%, or $12.0, primarily driven by an increase in capitalized interest due to a higher carrying value of 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, or $0.04 per share) primarily to increase existing liabilities for retained environmental remediation obligations associated with businesses sold in 2008. Refer to the "Piedmont" discussion under Note 12, Commitments and Contingencies, for additional information. The loss did not result in cash flows from discontinued operations.
Current report
The current-year rate was significantly impacted by net tax benefits of $695.4 associated with project exit decisions, as discussed in Note 4, Business and Asset Actions, to the consolidated financial statements. These benefits primarily reflect tax benefits recognized at local statutory income tax rates in the U.S. based on information available when the project exit charges were recorded. Changes in the amount or timing of the final settlement of these matters could affect our income tax provision in future periods.
Current report
Also impacting the effective tax rate were higher net costs on foreign-related income taxed in the U.S. in the current fiscal year and higher releases of certain unrecognized tax benefits upon expiration of the statute of limitations in the prior year. These costs were partially offset by higher foreign and domestic tax credit and incentives and higher equity affiliates' income.
Current report
Sales of $1.3 billion increased 5%, or $60.4, due to higher volumes of 7%, partially offset by lower energy cost pass-through to customers of 2%. Volume growth was driven by on-site, including HyCO facilities and a new asset contribution. Lower energy cost pass-through to customers primarily reflected decreased natural gas rates.
Current report
Operating income of $395.4 increased 6%, or $21.3, primarily driven by higher volumes of $30 and higher pricing, net of lower power costs, of $6. These benefits were partially offset by higher costs of $16, which included fixed-cost inflation, increased product distribution and dislocation costs, and project development costs, partially offset by lower depreciation expense. Operating margin of 29.9% increased 20 bp from 29.7% in the prior year, including an approximate 50 bp favorable impact from lower energy cost pass-through to customers.
Current report
Equity affiliates’ income of $56.2 increased 49%, or $18.4, driven primarily by an affiliate in Mexico.
Current report
Sales of $886.0 increased 9%, or $76.0, due to higher volumes of 6%, favorable currency of 2%, and higher energy cost pass-through to customers of 1%. Volume growth was driven by higher on-site, including new assets, as well as improved helium volumes. Favorable currency was primarily attributable to the weakening of the U.S. Dollar against the Chinese Renminbi.
Current report
Operating income of $256.4 increased 18%, or $39.6, driven by higher volumes of $45 and favorable currency impacts of $4. These benefits were partially offset by higher costs of $9, including increased incentive compensation. Depreciation expense was lower in fiscal year 2026, primarily due to the classification of certain gasification assets as held for sale. Operating margin of 28.9% increased 210 bp from 26.8% in the prior year, as the benefits of higher volumes more than offset higher costs.
Current report
Equity affiliates’ income of $12.9 increased 36%, or $3.4, driven primarily by an affiliate in Thailand.
Current report
Sales of $815.7 increased 6%, or $45.2, as higher energy cost pass-through to customers of 3%, favorable currency of 3%, and higher pricing of 2% were partially offset by lower volumes of 2%. The increase in energy cost pass-through reflected higher natural gas rates across the region, while favorable currency impacts were primarily attributable to the weakening of the U.S. Dollar against the Euro. Volumes declined primarily due to lower on-site volumes.
Current report
Operating income of $230.7 increased 2%, or $5.5, driven by higher pricing, net of higher power costs, of $8 and favorable currency of $5. Favorable business mix contributed an additional $2, driven by higher-margin on-site volumes. These benefits were partially offset by higher costs of $10, including fixed-cost inflation. Operating margin of 28.3% decreased 90 bp from 29.2% in the prior year, including an approximate 50 bp headwind from higher energy cost pass-through to customers.
Current report
Equity affiliates’ income of $32.6 increased 10%, or $2.9, driven primarily by an affiliate in Italy.
Current report
Sales of $34.8 decreased 9%, or $3.5, as lower volumes were partially offset by higher pricing. Operating income of $8.0 was flat.
Current report
Equity affiliates' income of $101.1 increased 18%, or $15.1, driven primarily by affiliates in Saudi Arabia.
Current report
Sales of $103.1 decreased 28%, or $39.8, primarily driven by lower equipment sales volumes. Operating loss of $80.2 improved 3%, or $2.9, primarily reflecting productivity and favorable foreign exchange impacts.
Current report
Equity affiliates' income of $2.4 decreased 48%, or $2.2, driven primarily by an affiliate in Algeria.
Current report
•Sales of $9.4 billion increased 6%, or $564.9, due to a favorable currency impact of 3%, higher volumes of 2%, and higher energy cost pass-through to customers of 1%.
Current report
•Operating loss of $609.9 improved $283.9, or 32%, from an operating loss of $893.8 in the prior year, while operating margin improved to negative 6.5% from negative 10.1%. The operating loss improvement was primarily due to higher on-site volumes, favorable currency, higher pricing, as well as lower charges for business and asset actions.
Showing the first 40 of 75 passages. Open the source sections for the rest.
Removed paragraphs (58)
Previous report
SECOND QUARTER 2026 VS. SECOND QUARTER 2025
Previous report
•Sales of $3.2 billion increased 9%, or $255.6, due to higher volumes of 4%, a favorable impact from currency of 4%, and higher energy cost pass-through to customers of 2%, partially offset by lower pricing of 1% driven by lower helium pricing.
Previous report
•Operating income of $752.7 increased 132%, or $3.1 billion, from an operating loss of $2.3 billion in the prior year, and operating margin improved to 23.7% from negative 79.8%, primarily due to prior-year charges for business and asset actions related to project exit decisions reached in the second quarter of fiscal year 2025.
Previous report
•Equity affiliates' income of $179.4 increased 23%, or $33.9, driven primarily by an affiliate in Mexico within the Americas segment.
Previous report
Discussion of Second Quarter Consolidated Results
Previous report
Sales of $3.2 billion increased 9%, or $255.6, due to higher volumes of 4%, a favorable currency impact of 4%, and higher energy cost pass-through to customers of 2%, partially offset by lower pricing of 1%. Volume growth was driven by on-sites, primarily HyCO in the Americas segment. The favorable currency impact reflected a weaker U.S. Dollar, most notably against the Euro, Chinese Renminbi, and British Pound Sterling. Lower pricing was primarily attributable to helium, partially offset by pricing improvements across non-helium product lines.
Previous report
Cost of sales of $2.2 billion increased 6%, or $130.5, due to an unfavorable currency impact of $81, higher energy cost pass-through to customers of $45, and higher costs of $19 related to sales volumes. These increases were partially offset by $8 of lower costs driven by productivity improvements and lower depreciation, which more than offset fixed-cost inflation and higher Americas maintenance costs, as well as $6 of lower product sourcing costs in our merchant business. Gross margin of 31.1% increased 150 bp from 29.6% in the prior year, driven by higher volumes.
Previous report
Selling and administrative expense of $227.2 increased 2%, or $5.2, as unfavorable currency and labor inflation were partially offset by productivity improvements. Selling and administrative expense as a percentage of sales improved to 7.2% from 7.6% in the prior year.
Previous report
We did not record any charges related to business and asset actions in the second quarter of fiscal year 2026.
Previous report
Our consolidated prior year income statement for the three months ended 31 March 2025 included charges of $2.9 billion ($2.3 billion attributable to Air Products after tax, or $10.28 per share), consisting of initial charges related to project exit decisions as well as costs incurred in connection with our global cost reduction plan. These charges were not reflected in the results of our reportable segments. For additional information, refer to Note 4, Business and Asset Actions, to the consolidated financial statements.
Previous report
We recorded shareholder activism-related costs in fiscal year 2025 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. Costs of $31.4 ($31.0 after tax, or $0.14 per share) incurred during the second quarter were primarily for executive separation costs for our former chief executive officer. These costs were not reflected in the results of our reportable segments. For additional information, refer to Note 17, Supplemental Information, to the consolidated financial statements.
Previous report
Other income of $14.1 increased 1%, or $0.2.
Previous report
Operating income of $752.7 increased 132%, or $3.1 billion, from an operating loss of $2.3 billion in the prior year. The fiscal year 2025 loss was driven by $2.9 billion of charges for business and asset actions, largely related to project exit decisions reached in the second quarter of fiscal year 2025, and also included $31 of shareholder activism‑related costs. Volume impacts were favorable by $94, driven by on-sites. Currency was favorable by $25, and costs were lower by $13, as productivity improvements and lower depreciation more than offset fixed-cost inflation and higher Americas maintenance costs. These factors were partially offset by lower pricing, net of power costs, of $11, driven by lower helium pricing. Lower helium pricing was partially mitigated by pricing improvements across non-helium product lines. Operating margin was 23.7% compared to negative 79.8% in the prior year, which was primarily attributable to the charges for business and asset actions in fiscal year 2025.
Previous report
Equity affiliates' income of $179.4 increased 23%, or $33.9, primarily driven by an affiliate in Mexico within the Americas segment. Additionally, the prior year included a project exit-related impairment charge of $6.8 related to a joint venture in China.
Previous report
Other non-operating income of $0.9 increased $19.5 compared to an expense of $18.6 in the prior year. The prior year included an expense of $11.5 ($3.0 attributable to Air Products after tax, or $0.01 per share) on certain interest rate swaps held by the NEOM Green Hydrogen Company joint venture. As of 1 January 2026, all swaps were re‑designated as cash flow hedges. Refer to Note 3, Variable Interest Entities, and Note 8, Financial Instruments, to the consolidated financial statements for additional information.
Previous report
For the three months ended 31 March 2026, our consolidated income statement includes an income tax expense of $158.7 compared to an income tax benefit of $505.8 in the prior year period. The tax expense in fiscal year 2026 represents an effective tax rate of 18.0% on the pre-tax income of $883.5 reported for the three months ended 31 March 2026. The tax benefit in fiscal year 2025 represented an effective rate of 22.5% on the pre-tax loss of $2.2 billion reported for the three months ended 31 March 2025.
Previous report
The prior-year rate was primarily impacted by $2.9 billion of pre-tax charges for business and asset actions and other items as further discussed in Note 16, Income Taxes. Also contributing to a lower rate for the current fiscal year were higher foreign and domestic tax credits and incentives and higher equity affiliates' income. These items were partially offset by a higher cost of U.S. tax on foreign earnings and withholding taxes on foreign earnings we no longer intend to indefinitely reinvest.
Previous report
Sales of $1.4 billion increased 8%, or $96.7, due to higher energy cost pass-through to customers of 4%, higher volumes of 3%, and favorable currency of 1%. The higher energy cost pass-through reflects increased natural gas rates in the U.S. Gulf Coast. Volumes were favorable in both on-sites and merchant, including helium, partially offset by income from a favorable one-time customer contract amendment in the prior year.
Previous report
Operating income of $373.9 increased 2%, or $8.2, as higher volumes of $15 and favorable currency of $3 were partially offset by higher costs of $6 and lower pricing, net of power costs, of $4. The lower pricing reflected lower helium pricing and higher power costs in our merchant business, which were partially mitigated by favorable pricing actions across non-helium product lines. The increase in costs was primarily due to maintenance turnarounds and fixed-cost inflation, partially offset by lower depreciation. Operating margin of 27.0% decreased 140 bp from 28.4% in the prior year driven by a headwind of approximately 100 bp from higher energy cost pass-through to our on-site customers.
Previous report
Equity affiliates’ income of $55.8 increased 79%, or $24.6, driven primarily by an affiliate in Mexico.
Previous report
Sales of $832.6 increased 8%, or $58.5, due to higher volumes of 4% primarily related to on-site activity, including new assets, and improved helium, as well as favorable currency of 4% driven by the weakening of the U.S. Dollar against the Chinese Renminbi. Higher energy cost pass-through to customers contributed 1%, offset by lower pricing of 1%. The 1% total segment price decrease equates to a 5% decline in our merchant business, driven by lower helium pricing.
Previous report
Equity affiliates’ income of $11.7 increased 11%, or $1.2, driven primarily by an affiliate in Thailand.
Previous report
Sales of $789.0 increased 8%, or $61.6, as favorable currency of 9% and higher volumes of 2% were partially offset by lower energy cost pass-through to customers of 2% and lower pricing of 1%. Favorable currency primarily reflected the weakening of the U.S. Dollar against the Euro and British Pound Sterling. Higher volumes were driven by on-sites, including the impact of a prior-year turnaround, partially offset by lower helium. Energy cost pass-through declined due to lower natural gas rates. Lower helium pricing was partially mitigated by favorable pricing actions across non-helium product lines.
Previous report
Operating income of $211.6 increased 8%, or $16.1, due to higher volumes of $16, favorable currency of $16, and higher pricing, net of lower power costs, of $4, partially offset by higher costs of $20. The increase in costs was primarily due to higher depreciation and fixed-cost inflation. Operating margin of 26.8% decreased 10 bp from 26.9% in the prior year.
Previous report
Equity affiliates’ income of $31.9 increased 15%, or $4.2, driven primarily by an affiliate in Italy.
Previous report
Equity affiliates' income of $79.2 increased 1%, or $1.0.
Previous report
Equity affiliates' income of $0.8 decreased 83%, or $3.9, driven by an affiliate in Algeria.
Previous report
•Sales of $6.3 billion increased 7%, or $426.6, due to a favorable currency impact of 3%, higher volumes of 2%, and higher energy cost pass-through to customers of 2%.
Previous report
•Operating income of $1.5 billion increased 188%, or $3.2 billion, from an operating loss of $1.7 billion in the prior year, and operating margin improved to 23.7% from a negative 28.8%, primarily due to prior-year charges for business and asset actions related to project exit decisions reached in the second quarter of fiscal year 2025.
Previous report
•Equity affiliates' income of $351.6 increased 19%, or $55.5, primarily driven by an affiliate in Mexico within the Americas segment.
Previous report
•EPS of $6.23 increased $11.23 from a loss per share of $5.00 in the prior year. On a non-GAAP basis, adjusted EPS of $6.37 increased $0.83 compared to $5.54 in the prior year. A summary table of changes in EPS is presented on page 54.
Previous 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.
Previous report
Cost of sales of $4.3 billion increased 5%, or $221.5, due to an unfavorable currency impact of $128 and higher energy cost pass-through to customers of $124. These increases were partially offset by $16 of lower costs driven by productivity improvements and reduced depreciation, which more than offset fixed-cost inflation, lower product sourcing costs of $9, and lower costs of $5 related to sales volumes. Gross margin of 31.6% increased 120 bp from 30.4% in the prior year as the benefits from higher volumes were partially offset by higher energy cost pass-through to customers.
Previous report
Our consolidated income statement for the six months ended 31 March 2026 included charges of $28.3 ($24.6 attributable to Air Products after tax, or $0.11 per share), related to project exit decisions reached in fiscal year 2025. Our consolidated prior-year income statement for the six months ended 31 March 2025 included charges of $2.9 billion ($2.3 billion attributable to Air Products after tax, or $10.28 per share), consisting of initial charges related to these decisions as well as costs incurred in connection with our global cost reduction plan. These charges were not reflected in results of our reportable segments. For additional information, refer to Note 4, Business and Asset Actions, to the consolidated financial statements.
Previous report
We recorded shareholder activism-related costs in fiscal year 2025 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. Costs of $61.3 ($52.9 after tax, or $0.24 per share) incurred during the first six months of fiscal year 2025 included executive separation costs for our former chief executive officer, professional service fees, and incremental proxy solicitation costs related to the 2025 Annual Meeting of Shareholders. These costs were not reflected in the results of our reportable segments. For additional information, refer to Note 17, Supplemental Information, to the consolidated financial statements.
Previous report
Other income of $24.7 decreased 33%, or $12.1, primarily due to the prior year sale of a U.S. equity method investment.
Previous report
Operating income of $1.5 billion increased 188%, or $3.2 billion, from an operating loss of $1.7 billion in the prior year. The fiscal year 2025 loss was driven by $2.9 billion of charges for business and asset actions, largely related to project exit decisions reached in the second quarter of fiscal year 2025, and also included $61 of shareholder activism‑related costs. Volume impacts were favorable by $121 driven by on-sites, partially offset by lower helium. Currency was favorable by $38, and costs were lower by $35, as productivity improvements and lower depreciation were partially offset by fixed-cost inflation. Pricing, net of power costs, improved by $11 driven by non-helium merchant products. Operating margin was 23.7% compared to negative 28.8% in the prior year, which was primarily attributable to the charge for business and asset actions in fiscal year 2025.
Showing the first 40 of 58 passages. Open the source sections for the rest.
Reworded paragraphs (71)
Previous wording
Comparisons included in the discussion that follows are for the second quarter and first six months of fiscal year 2026 versus ("vs.") the second quarter and first six months of fiscal year 2025. The disclosures provided in this Quarterly Report on Form 10-Q are complementary to those made in our 2025 Form 10-K.
Current wording
Comparisons included in the discussion that follows are for the third quarter and first nine months of fiscal year 2026 versus ("vs.") the third quarter and first nine months of fiscal year 2025. The disclosures provided in this Quarterly Report on Form 10-Q are complementary to those made in our 2025 Form 10-K.
Previous wording
•Adjusted operating income of $752.7 increased 19%, or $121.4, reflecting higher on-site volumes, favorable currency, and lower costs, partially offset by lower helium pricing. Adjusted operating margin improved to 23.7% from 21.6% in the prior year, primarily due to higher volumes and productivity, partially offset by energy cost pass-through to customers and pricing. These non-GAAP results exclude losses resulting from charges for business and asset actions as well as prior-year shareholder activism-related costs, as discussed below.
Current wording
•Adjusted operating income of $810.3 increased 9%, or $69.2, and adjusted operating margin of 25.6% improved 110 basis points ("bp"), primarily due to higher on-site volumes, favorable currency, and higher pricing, partially offset by higher costs. These non-GAAP results exclude losses resulting from charges for business and asset actions discussed in Note 4 to the consolidated financial statements, as well as other items, as described in the "Reconciliations of Non-GAAP Financial Measures" section below.
Previous wording
The per share impacts for the items presented in the table below were calculated independently and do not sum to the total change in EPS due to rounding.
Current wording
The per share impacts for the items presented in the table below were calculated independently and do not sum to the total change in earnings (loss) per share due to rounding.
Previous wording
The table below summarizes the per share impact of our non-GAAP adjustments for the second quarter of fiscal years 2026 and 2025. These impacts were calculated independently and may not sum to totals due to rounding.
Current wording
The table below summarizes the per share impact of non-GAAP adjustments for the third quarter of fiscal years 2026 and 2025. These impacts were calculated independently and may not sum to totals due to rounding.
Previous wording
SECOND QUARTER 2026 RESULTS OF OPERATIONS
Current wording
THIRD QUARTER 2026 RESULTS OF OPERATIONS
Previous wording
Research and development expense of $42.0 decreased 6%, or $2.9. Research and development expense as a percentage of sales decreased to 0.7% from 0.8% in the prior year.
Current wording
Research and development expense of $21.5 decreased 11%, or $2.6. Research and development expense as a percentage of sales improved to 0.7% from 0.8% in the prior year.
Previous wording
On a non-GAAP basis, which excludes the charges for business and asset actions and prior-year shareholder activism-related costs discussed above, adjusted operating income of $752.7 increased 19%, or $121.4, due to higher volumes, favorable currency, and lower costs, partially offset by lower pricing. Adjusted operating margin improved to 23.7% from 21.6% in the prior year, primarily due to higher volumes and productivity, partially offset by energy cost pass-through to customers and pricing.
Current wording
On a non-GAAP basis, which excludes the charges for business and asset actions, sales of businesses and other assets, and prior year-shareholder activism-related costs discussed above, adjusted operating income of $810.3 increased 9%, or $69.2, primarily driven by higher on-site volumes, favorable currency, and higher pricing, partially offset by higher costs. Adjusted operating margin improved 110 bp to 25.6% from 24.5% in the prior year.
Previous wording
The increase also reflects income from excluded components from the assessment of effectiveness of our derivatives and lower non-service pension costs, partially offset by lower interest income on short-term investments.
Current wording
Other non-operating income of $3.6 increased $9.6 compared to an expense of $6.0 in the prior year. The increase was primarily attributable to lower non-service pension costs as well as income from excluded components from the assessment of effectiveness of our derivatives, partially offset by lower interest income on cash equivalents and short-term investments.
Previous wording
The effective tax rate equals the income tax expense (benefit) divided by income or loss before taxes. Equity affiliates' income is primarily included net of income taxes within income or loss before taxes on our consolidated income statements.
Current wording
The effective tax rate equals the income tax expense (benefit) divided by income or loss before taxes. Equity affiliates' income is primarily included net of income taxes within income or loss before taxes on our consolidated income statements. The table below outlines the calculation of the effective tax rate for the third quarter of fiscal years 2026 and 2025:
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 62, was 18.0% and 19.1% for the three months ended 31 March 2026 and 2025, respectively.
Current wording
Our adjusted effective tax rate, which excludes the impact of project exit costs and other adjustments described in the "Reconciliations of Non-GAAP Financial Measures" section, was 18.6% and 18.1% for the three months ended 30 June 2026 and 2025, respectively. A reconciliation of the adjusted measures to the effective tax rate calculated in accordance with GAAP is provided on page 71.
Previous wording
Discussion of Second Quarter Results by Business Segment
Current wording
Discussion of Third Quarter Results by Business Segment
Previous wording
FIRST SIX MONTHS 2026 VS. FIRST SIX MONTHS 2025
Current wording
FIRST NINE MONTHS 2026 VS. FIRST NINE MONTHS 2025
Previous wording
•Adjusted operating income of $1.5 billion increased 16%, or $204.4, and adjusted operating margin improved to 24.1% from 22.3% in the prior year, driven by higher volumes. These non-GAAP results exclude losses resulting from charges for business and asset actions as well as prior-year shareholder activism-related costs, as discussed below.
Current wording
•Adjusted operating income of $2.3 billion increased 13%, or $273.6, and adjusted operating margin improved to 24.6% from 23.1% in the prior year. The adjusted operating income improvement was driven primarily by higher on-site volumes, favorable currency, and higher pricing. These non-GAAP results exclude losses resulting from charges for business and asset actions, as well as other items, as described in the "Reconciliations of Non-GAAP Financial Measures" section below.
Previous wording
•Earnings per share ("EPS") of $3.19 increased $10.96 from a loss per share of $7.77 in the prior year. On a non-GAAP basis, adjusted EPS of $3.20 increased $0.51 compared to $2.69 in the prior year. A summary table of changes in EPS is presented on page 45.
Current wording
•Loss per share of $0.23 improved 87%, or $1.53, from a loss per share of $1.76 in the prior year. On a non-GAAP basis, adjusted EPS of $9.84 increased 14%, or $1.21, compared to $8.63 in the prior year. A summary table of changes in earnings (loss) per share is presented below.
Previous wording
The per share impacts for the line items presented in the table below were calculated independently and may not sum to the total change in EPS due to rounding.
Current wording
The per share impacts for the items presented in the table below were calculated independently and do not sum to the total change in earnings (loss) per share due to rounding.
Previous wording
(A)Per share impacts were calculated based on total after-tax charges for business and asset actions attributable to Air Products of $24.6 million and $2.3 billion for the first six months of fiscal years 2026 and 2025, respectively, with $0.6 million and $3.5 million attributable to noncontrolling partners.
Current wording
(A)Per share impacts were calculated based on total after-tax charges for business and asset actions attributable to Air Products of $2.2 billion and $2.3 billion for the first nine months of fiscal years 2026 and 2025, respectively, with $0.6 and $3.5 attributable to noncontrolling partners.
Previous wording
(B)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 in fiscal year 2025. The gain attributable to our noncontrolling partners was $17.7.
Current wording
(C)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 in fiscal year 2025. The gain attributable to our noncontrolling partners was $17.6.
Previous wording
The table below summarizes the per share impact of our non-GAAP adjustments for the first six months of fiscal years 2026 and 2025. These impacts were calculated independently and may not sum to totals due to rounding:
Current wording
The table below summarizes the per share impact of our non-GAAP adjustments for the first nine months of fiscal years 2026 and 2025. These impacts were calculated independently and may not sum to totals due to rounding.
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 charges for business and asset actions were primarily recorded within operating results. For additional information regarding these charges, refer to Note 4, Business and Asset Actions, to the consolidated financial statements.
Previous wording
FIRST SIX MONTHS 2026 RESULTS OF OPERATIONS
Current wording
FIRST NINE MONTHS 2026 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 $6.3 billion increased 7%, or $426.6, due to a favorable currency impact of 3%, higher volumes of 2%, and higher energy cost pass-through to customers of 2%. Currency was favorable as the U.S. Dollar weakened, most notably against the Euro. Volume growth was driven by on-sites, primarily from new assets and Americas HyCO facilities, partially offset by lower helium demand and a significant, non-recurring helium sale to an existing merchant customer in the Americas segment in the prior year. Pricing was flat as improvement across non-helium product lines was offset by lower helium pricing.
Current wording
Sales of $9.4 billion increased 6%, or $564.9, due to a favorable currency impact of 3%, higher volumes of 2%, and higher energy cost pass-through to customers of 1%. Currency was favorable as the U.S. Dollar weakened, most notably against the Chinese Renminbi and Euro. Volume growth was driven by on-site, primarily from new assets and HyCO facilities, partially offset by favorable non-recurring items in the prior year, including a significant helium sale to an existing merchant customer and a one-time customer contract amendment in the Americas segment. Pricing was flat as improvement across non-helium product lines was offset by lower helium pricing.
Previous wording
Selling and administrative expense of $455.9 decreased 2%, or $8.5, as productivity improvements were partially offset by unfavorable currency and fixed-cost inflation. Selling and administrative expense as a percentage of sales improved to 7.3% from 7.9% in the prior year.
Current wording
Selling and administrative expense of $675.0 decreased 2%, or $12.0, as productivity improvements were partially offset by fixed-cost inflation and unfavorable currency. Selling and administrative expense as a percentage of sales improved to 7.2% from 7.7%, down 50 bp from the prior year.
Previous wording
Research and development expense of $21.6 decreased 6%, or $1.3. Research and development expense as a percentage of sales decreased to 0.7% from 0.8% in the prior year.
Current wording
Research and development expense of $63.5 decreased 8%, or $5.5. Research and development expense as a percentage of sales decreased to 0.7% from 0.8% in the prior year.
Previous wording
On a non-GAAP basis, which excludes the charges for business and asset actions and prior year-shareholder activism-related costs discussed above, adjusted operating income of $1.5 billion increased 16%, or $204.4 due to higher volumes, favorable currency, lower costs, and higher pricing, net of power costs. Adjusted operating margin improved to 24.1% from 22.3% in the prior year, primarily due to higher volumes and productivity, partially offset by energy cost pass-through to customers.
Current wording
On a non-GAAP basis, which excludes the charges for business and asset actions, sales of businesses and other assets, and prior year-shareholder activism-related costs discussed above, adjusted operating income of $2.3 billion increased 13%, or $273.6, due to higher volumes, favorable currency impacts, and higher pricing. Adjusted operating margin improved to 24.6% from 23.1% in the prior year, primarily due to higher volumes.
Previous wording
Interest expense increased 17%, or $7.3, driven by higher interest on principal borrowings from Euro- and U.S. Dollar-denominated senior fixed-rate notes issued in fiscal year 2025.
Current wording
Interest expense increased 5%, or $7.2, driven by higher interest on principal borrowings from Euro- and U.S. Dollar-denominated senior fixed-rate notes issued in fiscal year 2025, partially offset by an increase in capitalized interest due to a higher carrying value of projects under construction.
Previous wording
Other non-operating expense of $0.5 decreased $20.8 from income of $20.3 in the prior year. The prior year included a gain of $27.3 ($7.3 attributable to Air Products after tax, or $0.03 per share) on certain interest rate swaps held by the NEOM Green Hydrogen Company joint venture. As of 1 January 2026, all swaps were re‑designated as cash flow hedges. Refer to Note 3, Variable Interest Entities, and Note 8, Financial Instruments, to the consolidated financial statements for additional information. We also recognized lower interest income on short-term investments in fiscal year 2026.
Current wording
Other non-operating income of $3.1 decreased $11.2 from the prior year. The prior year included a gain on certain interest rate swaps held by the NEOM Green Hydrogen Company joint venture as discussed in Note 3, Variable Interest Entities, and Note 8, Financial Instruments, to the consolidated financial statements. As of 1 January 2026, all swaps were re‑designated as cash flow hedges. We also recognized lower interest income on cash equivalents and short-term investments in fiscal year 2026. These impacts were partially offset by income from excluded components from the assessment of effectiveness of our derivatives and lower non-service pension costs.
Previous wording
The effective tax rate equals the income tax expense (benefit) divided by income or loss before taxes. Equity affiliates' income is primarily included net of income taxes within income or loss before taxes on our consolidated income statements.
Current wording
The effective tax rate equals the income tax benefit divided by loss before taxes. Equity affiliates' income is primarily included net of income taxes within loss before taxes on our consolidated income statements. The table below outlines the calculation of the effective tax rate for the first nine months of fiscal years 2026 and 2025:
Previous wording
The prior-year rate was primarily impacted by $2.9 billion of pre-tax charges for business and asset actions and other items as further discussed in Note 16, Income Taxes. Also contributing to a lower rate for the current fiscal year were higher foreign and domestic tax credits and incentives and higher equity affiliates' income. These items were partially offset by a higher cost of U.S. tax on foreign earnings, larger excess tax benefits on share-based compensation in the prior year, and a benefit from a U.S. state tax law change in the prior period.
Current wording
The current-year rate was also affected by higher foreign and domestic tax credits and incentives and increased income from equity affiliates, partially offset by a higher cost of U.S. tax on foreign earnings. The prior-year rate benefited from larger excess tax benefits on share-based compensation and a U.S. state tax law change. The prior year also included several discrete tax items that affected the effective tax rate, including costs related to withholding taxes on certain foreign earnings that were no longer considered indefinitely reinvested and shareholder activism-related costs. These items were partially offset by a tax benefit for a Tax Cuts and Jobs Act refund claim.
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 62, was 18.3% and 18.9% for the six months ended 31 March 2026 and 2025, respectively.
Current wording
Our adjusted effective tax rate, which excludes the impact of project exit costs and other adjustments described in the "Reconciliations of Non-GAAP Financial Measures" section, was 18.4% and 18.6% for the nine months ended 30 June 2026 and 2025, respectively. A reconciliation of the adjusted measures to the effective tax rate calculated in accordance with GAAP is provided on page 71.
Previous wording
Discussion of First Six Months Results by Business Segment
Current wording
Discussion of First Nine Months Results by Business Segment
Previous wording
Sales of $2.7 billion increased 6%, or $150.8, due to higher energy cost pass-through to customers of 5%, higher pricing of 1%, and a favorable currency impact of 1%, partially offset by lower volumes of 1%. Higher energy cost pass-through reflects increased natural gas rates in the U.S. Gulf Coast. The 1% total segment price increase equates to a 2% improvement in our merchant business, driven by non-helium product lines. The modest volume decline was primarily due to favorable non‑recurring items in the prior year, including a significant helium sale to an existing merchant customer and a one‑time customer contract amendment, partially offset by higher on‑site volumes in fiscal year 2026.
Current wording
Sales of $4.0 billion increased 6%, or $211.2, due to higher volumes of 2%, higher energy cost pass-through to customers of 2%, higher pricing of 1%, and favorable currency of 1%. Volume growth was driven by on-site, including HyCO facilities and a new asset contribution. This benefit was partially offset by favorable non-recurring items in the prior year, including a significant helium sale to an existing merchant customer and a one-time customer contract amendment. Higher energy cost pass-through to customers reflects higher natural gas rates compared to fiscal year 2025.
Previous wording
Sales of $1.7 billion increased 5%, or $72.9, as a favorable currency impact of 3%, higher volumes of 2%, and higher energy cost pass-through to customers of 2% were partially offset by lower pricing of 2%. Favorable currency reflected the weakening of the U.S. dollar against the Chinese Renminbi, while higher volumes were attributable to on‑sites, including contributions from new assets. The total segment pricing decline of 2% equates to a 4% decline in our merchant business, driven by lower helium pricing.
Current wording
Sales of $2.6 billion increased 6%, or $148.9, as higher volumes of 3%, favorable currency of 2%, and higher energy cost pass-through to customers of 2% were partially offset by lower pricing of 1%. Volume growth was driven by higher on-site, including contributions from new assets, as well as helium. Favorable currency was primarily attributable to the weakening of the U.S. Dollar against the Chinese Renminbi. The decline in pricing was driven by lower helium pricing.
Previous wording
Operating income of $240.0 increased 25%, or $48.6, due to higher volumes of $34, lower costs of $16 driven by productivity, and favorable currency of $8, partially offset by lower pricing, net of power costs, of $10. Depreciation was lower in fiscal year 2026 primarily due to certain gasification assets being classified as held for sale. Operating margin of 28.8% increased 410 bp from 24.7% in the prior year, primarily due to the impact of higher volumes and favorable costs, partially offset by lower pricing.
Current wording
Operating income of $728.7 increased 17%, or $104.1, driven by higher volumes of $87, lower costs of $22, and a favorable currency impact of $16, partially offset by lower pricing, net of power costs, of $21. Depreciation expense was lower in fiscal year 2026, primarily due to the classification of certain gasification assets as held for sale. Operating margin of 28.6% increased 260 bp from 26.0% in the prior year, as the benefits of higher volumes and favorable costs more than offset lower pricing and higher energy cost pass-through to customers.
Previous wording
Equity affiliates’ income of $25.5 increased 23%, or $4.7, driven by affiliates in China and Thailand.
Current wording
Equity affiliates’ income of $38.4 increased 27%, or $8.1, driven primarily by affiliates in China and Thailand.
Previous wording
Sales of $1.6 billion increased 10%, or $146.4, due to a favorable impact from currency of 9% and higher volumes of 3%, partially offset by lower energy cost pass-through to customers of 2%, primarily due to lower natural gas rates. Favorable currency primarily reflected the weakening of the U.S. Dollar against the Euro. The higher volumes were driven by on-sites, including the impact of a prior-year turnaround, partially offset by lower helium. Pricing was flat as improvement across non-helium product lines was offset by lower helium pricing.
Current wording
Sales of $2.4 billion increased 9%, or $191.6, due to a favorable impact from currency of 7%, higher volumes of 1%, and higher pricing of 1%. Favorable currency primarily reflected the weakening of the U.S. Dollar against the Euro. The higher volumes were driven by non-helium merchant and on-site, including the impact of a prior-year turnaround, partially offset by lower helium. Pricing improvements across non-helium product lines were partially offset by lower helium pricing.
Previous wording
Operating income of $435.1 increased 14%, or $53.1, due to higher volumes of $37, favorable currency of $27, higher pricing, net of lower power costs, of $19, partially offset by higher costs of $30. The increase in costs was primarily due to higher depreciation and fixed-cost inflation. Operating margin of 27.7% increased 90 bp from 26.8% in the prior year as the benefits from higher volumes and pricing were partially offset by higher costs.
Current wording
Operating income of $665.8 increased 10%, or $58.6, due to higher volumes of $39, favorable currency of $32, and higher pricing, net of lower power costs, of $27. These benefits were partially offset by higher costs of $40 driven by fixed-cost inflation and higher depreciation expense. Operating margin of 27.9% increased 20 bp from 27.7% in the prior year as the benefits from higher volumes and pricing were partially offset by higher costs.
Previous wording
Sales of $29.2 decreased 11%, or $3.6, primarily due to lower volumes. Operating income was $4.6 compared to a loss of $2.9 in the prior year, reflecting lower costs, including productivity improvements and the impact of the deconsolidation of Blue Hydrogen Industrial Gases Company ("BHIG") in the second quarter of fiscal year 2025.
Current wording
Sales of $94.3 decreased 9%, or $9.6, primarily due to lower volumes. Operating income of $18.4 improved from $4.6 in the prior year, driven by lower costs, including productivity improvements and the impact of the deconsolidation of the Blue Hydrogen Industrial Gases Company joint venture in Saudi Arabia in the second quarter of fiscal year 2025.
Previous wording
Sales of $137.1 increased 45%, or $42.4. Operating loss of $77.4 improved 35%, or $41.0, primarily due to lower changes to sale of equipment project estimates and productivity improvements.
Current wording
Sales of $357.2 increased 7%, or $22.8. Operating loss of $266.5 improved 16%, or $52.0, primarily reflecting productivity improvements and lower changes to sale of equipment project estimates.
Showing the first 40 of 71 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
For additional information, refer to Note 4, Business and Asset Actions, to the consolidated financial statements.
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
(A)Per share impacts were calculated based on total after-tax charges for business and asset actions attributable to Air Products of $2.3 billion. Charges attributable to noncontrolling partners was $3.5.
Previous report — wording carried elsewhere
Prior Year Shareholder Activism-Related Costs
Previous report — wording carried elsewhere
Interest expense increased 23%, or $19.2, driven by higher interest on principal borrowings from Euro- and U.S. Dollar-denominated senior fixed-rate notes issued in fiscal year 2025.
Previous report — wording carried elsewhere
These impacts were partially offset by income from excluded components from the assessment of effectiveness of our derivatives and lower non-service pension costs.
Previous report — wording carried elsewhere
(B)Charge attributable to noncontrolling interests was $3.5.