Air Products and Chemicals(APD) - 2026 Q1 - Quarterly Report

Financial Performance - Sales for the three months ended December 31, 2025, increased to $3,102.5 million, up from $2,931.5 million in the same period of 2024, representing a growth of 5.8%[16] - Operating income rose to $734.5 million, compared to $643.6 million in the prior year, reflecting an increase of 14.1%[16] - Net income attributable to Air Products for the quarter was $678.2 million, up from $617.4 million, marking a year-over-year increase of 9.8%[16] - Basic and diluted earnings per share attributable to Air Products were both $3.04, compared to $2.77 in the previous year, indicating a 9.8% increase[16] - The company reported a comprehensive income of $826.3 million for the quarter, significantly higher than $194.4 million in the same period last year[19] - Total consolidated income for the three months ended December 31, 2025, was $3,102.5 million, compared to $2,931.5 million in 2024, reflecting an increase of 5.8%[92] - Cost of sales for the same period was $2,107.5 million in 2025, up from $2,016.5 million in 2024, representing a 4.5% increase[92] - Interest expense for the three months ended December 31, 2025, was $54.5 million, compared to $42.6 million in 2024, indicating a rise of 28.3%[92] Cash Flow and Assets - Cash provided by operating activities was $900.7 million, an increase from $811.7 million in the same quarter of the previous year[24] - Total assets as of December 31, 2025, were $41,240.7 million, slightly up from $41,059.5 million at the end of September 2025[21] - The company’s cash and cash items at the end of the period were $1,026.4 million, down from $1,856.0 million at the beginning of the year[24] - Total current liabilities decreased to $3,497.9 million as of December 31, 2025, from $4,218.6 million as of September 30, 2025, a reduction of 17.0%[22] - Long-term debt increased to $17,114.6 million as of December 31, 2025, compared to $16,769.9 million on September 30, 2025, marking a rise of 2.1%[22] - Total liabilities decreased to $23,403.6 million from $23,709.7 million, showing a reduction of 1.3%[21] - Total equity as of December 31, 2025, was $17,837.1 million, up from $18,738.7 million as of December 31, 2024, indicating a decrease of 4.8%[26] Research and Development - Research and development expenses were $20.4 million, down from $22.0 million, reflecting a decrease of 7.3%[16] - The company reported segment operating income of $756.5 million for the three months ended December 31, 2025, compared to $673.5 million in 2024, indicating a year-over-year increase of about 12.3%[146] Environmental and Project Costs - The company has environmental accruals of $85.1 million, primarily as part of other noncurrent liabilities, with an estimated exposure for environmental loss contingencies ranging from $85 million to a possible upper exposure of $98 million[112] - The environmental accrual related to the Pace facility in Florida is $53.4 million, with ongoing remediation efforts required by the Florida Department of Environmental Protection and the United States Environmental Protection Agency[114][115] - Cumulative project exit charges related to business and asset actions totaled approximately $3.6 billion through 31 December 2025, primarily recognized in the second quarter of fiscal year 2025[66] - The company recorded business and asset action charges of $28.3 million ($24.6 million after tax) in the first quarter of fiscal year 2026, primarily related to project exits announced in fiscal year 2025[64] Dividends and Shareholder Returns - Dividends on common stock for the quarter were $398.6 million, with a dividend per share of $1.79, compared to $393.8 million and $1.77 per share in the same quarter of 2024[26] - The company paid dividends of $398.4 million during the quarter, with a dividend per share of $1.79[26] Joint Ventures and Projects - The NEOM Green Hydrogen Project, a joint venture, has secured project financing of approximately $6.1 billion, which is expected to fund about 73% of the project costs[51] - The company has an equity interest of $3.1 billion in the Jazan Integrated Gasification and Power Company joint venture as of December 31, 2025[58] - Total principal borrowings for the NEOM Green Hydrogen Company were $5.3 billion as of December 31, 2025, compared to $4.9 billion as of September 30, 2025[51] Accounting and Compliance - The company is evaluating the impact of new accounting guidance on its disclosures, including updates related to climate-related disclosures and income tax disclosures[39][40] - The FASB issued ASU 2023-09 to expand income tax disclosures, effective for the fiscal year ending September 30, 2026[39] Other Financial Metrics - The effective tax rate for the company was 18.7% for the three months ended December 31, 2025, compared to 17.8% for the same period in 2024[138] - Cash paid for taxes, net of refunds, was $109.1 million for the three months ended December 31, 2025, down from $123.6 million in 2024[139] - Related party sales totaled approximately $85 million for the three months ended December 31, 2025, compared to $80 million in 2024[135]