Third Quarter 2026 vs. Third Quarter 2025

Third Quarter 2026 in Summary • 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%. • 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%. • 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. • Equity affiliates’ income of $205.2 increased 22%, or $37.6, driven primarily by affiliates in the Americas and Middle East and India segments. • 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.

Third Quarter 2026 Results of Operations

Discussion of Third Quarter Consolidated Results

Sales 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.

Cost of Sales and Gross Margin 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%.

Selling and Administrative Expense 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.

Research and Development Expense 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.

Business and Asset Actions (Project Exit Costs) 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.

Shareholder Activism-Related Costs 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).

Gain on Sale of Business 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.

Other Income (Expense), Net 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.

Operating Income (Loss) and Operating Margin 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.

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, 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.

Equity Affiliates’ Income Equity affiliates’ income of $205.2 increased 22%, or $37.6, primarily driven by affiliates in the Americas and Middle East and India segments.

Interest Expense 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.

Other Non-Operating Income (Expense), Net 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.

Effective Tax Rate The current-year rate was significantly impacted by net tax benefits of $695.4 associated with project exit decisions. Our adjusted effective tax rate, which excludes the impact of project exit costs and other adjustments, was 18.6% and 18.1% for the three months ended 30 June 2026 and 2025, respectively.

Discussion of Third Quarter Results by Business Segment

Americas 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%. Operating income of $395.4 increased 6%, or $21.3, primarily driven by higher volumes and higher pricing, net of lower power costs, partially offset by higher costs.

Asia 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%. Operating income of $256.4 increased 18%, or $39.6, driven by higher volumes and favorable currency impacts, partially offset by higher costs.

Europe 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%. Operating income of $230.7 increased 2%, or $5.5, driven by higher pricing, net of higher power costs, and favorable currency, partially offset by higher costs.

Middle East and India 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. Equity affiliates’ income of $101.1 increased 18%, or $15.1, driven primarily by affiliates in Saudi Arabia.

Corporate and other 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.

First Nine Months 2026 vs. First Nine Months 2025

First Nine Months 2026 in Summary • 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%. • 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. • 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. • Equity affiliates’ income of $556.8 increased 20%, or $93.1, driven primarily by affiliates in the Americas and Middle East and India segments. • 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.

First Nine Months 2026 Results of Operations

Sales 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%. Volume growth was driven by on-site, primarily from new assets and HyCO facilities.

Cost of Sales and Gross Margin Cost of sales of $6.4 billion increased 5%, or $306.4, driven by an unfavorable currency impact of $156 and higher energy cost pass-through to customers of $130. Gross margin of 32.0% increased 90 bp from 31.1% in the prior year, driven by higher volumes.

Selling and Administrative Expense 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.

Business and Asset Actions During fiscal year 2026, the Company recognized project exit charges of $2.9 billion pre-tax ($2.2 billion after-tax, or $10.03 per share), which was primarily due to actions announced on 30 June 2026.

Shareholder Activism-Related Costs During the first nine months of fiscal year 2025, costs of $86.3 pre-tax ($71.7 after tax, or $0.32 per share) were recorded in connection with a proxy contest.

Gain on Sale of Business 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.

Other Income (Expense), Net Other income of $39.6 decreased 46%, or $33.7, primarily due to 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.

Operating Income (Loss) and Operating Margin Operating loss of $609.9 improved 32%, or $283.9, from an operating loss of $893.8 in the prior year. The improvement primarily reflects lower charges for business and asset actions as well as higher volumes, favorable currency impacts, and higher pricing.

On a non-GAAP basis, adjusted operating income of $2.3 billion increased 13%, or $273.6, due to higher volumes, favorable currency impacts, and higher pricing.

Equity Affiliates’ Income Equity affiliates’ income of $556.8 increased 20%, or $93.1, primarily driven by affiliates in the Americas and Middle East and India segments.

Effective Tax Rate The current-year rate was significantly impacted by net tax benefits of $698.5 associated with project exit decisions. Our adjusted effective tax rate was 18.4% and 18.6% for the nine months ended 30 June 2026 and 2025, respectively.

Outlook We expect capital expenditures for fiscal year 2026 to be approximately $3.5 billion, with continued investment in our energy transition projects, traditional industrial gas projects, and maintenance within our core business. We anticipate funding these expenditures through our existing cash balance and cash generated from continuing operations, as well as access to capital and money market financing and other sources of funding.