Adjustments for Non-Cash Items (USD, millions)

Stock-Based Compensation (USD, millions)

Changes in Working Capital (USD, millions)

Capital Expenditures (CapEx) (USD, millions)

Proceeds from Debt (USD, millions)

Repayments of Debt (USD, millions)

Dividend Payments (USD, millions)

Net Change in Cash (USD, millions)

93bea4dd9820f4ce3fe9635c4a81fca5766feaa04abcd3a839438a991b44a2b3

Air Products and Chemicals, Inc. (APD) is a global leader in the industrial gases sector, focusing on energy, environmental, and emerging markets. The company produces essential industrial gases such as oxygen, nitrogen, argon, hydrogen, and helium, serving industries like refining, chemicals, metals, electronics, manufacturing, medical, and food **[0001193125-24-151111_d828202dex101.htm:1]** **[0000002969-24-000056_apd-20240930.htm:41]** **[0000002969-24-000056_apd-20240930.htm:6]**. APD also designs and manufactures equipment for air separation, hydrocarbon recovery, and purification, as well as liquid helium and hydrogen transport and storage **[0000002969-24-000056_apd-20240930.htm:9]** **[0000002969-24-000056_apd-20240930.htm:100]**. A significant portion of its revenue is generated through long-term on-site supply contracts, and the company is a major player in the clean hydrogen market, supporting the transition to low- and zero-carbon energy **[0000002969-24-000056_apd-20240930.htm:41]** **[0000002969-24-000056_apd-20240930.htm:6]** **[0001193125-24-270810_d899717ddefa14a.htm:12]**.

1. **Industrial Gases** - Produces and supplies essential industrial gases such as oxygen, nitrogen, argon, hydrogen, and helium to various industries including refining, chemicals, metals, electronics, manufacturing, medical, and food **[0001193125-24-151111_d828202dex101.htm:1]** **[0000002969-24-000056_apd-20240930.htm:41]** **[0000002969-24-000056_apd-20240930.htm:6]**.
2. **Clean Hydrogen** - Develops and operates large-scale projects in the clean hydrogen market, focusing on low- and zero-carbon energy solutions for industrial and heavy-duty transportation sectors **[0000002969-24-000056_apd-20240930.htm:41]** **[0000002969-24-000056_apd-20240930.htm:6]** **[0001193125-24-270810_d899717ddefa14a.htm:12]**.
3. **Equipment Products** - Designs and manufactures equipment for air separation, hydrocarbon recovery, and purification, as well as liquid helium and hydrogen transport and storage, including turbomachinery and cryogenic containers **[0000002969-24-000056_apd-20240930.htm:9]** **[0000002969-24-000056_apd-20240930.htm:100]**.

6296bd05bce5a6631b4418a3790e3c29f7d809050545436281f64bbbbb82e385

Remaining Performance Obligations

1b0963ae9549b3dbfc9cb35d0e0f5340fda01829bd82562f479f01d95c89b20b

| Metric (USD Billion)                  | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 |
|---------------------------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| Remaining Performance Obligations     | **23**  **[0000002969-23-000014_apd-20221231.htm:11]**  | **24**  **[0000002969-23-000023_apd-20230331.htm:13]**  | **24**  **[0000002969-23-000037_apd-20230630.htm:14]**  | **25**  **[0000002969-23-000047_apd-20230930.htm:94]**  | **27**  **[0000002969-24-000010_apd-20231231.htm:13]**  | **27**  **[0000002969-24-000026_apd-20240331.htm:15]**  | **27**  **[0000002969-24-000043_apd-20240630.htm:16]**  | **26**  **[0000002969-24-000056_apd-20240930.htm:101]**  |

b987855dd6ec221758f8e71bfceccc256709f19d04ed14612917a598d11588a9

34300ff52791763a5482df27e2ac716dc26e46df7b5b06106738df188050c54f

1. Given that only **35%** of the production capacity at the NEOM green hydrogen project has been contracted on a take-or-pay basis so far, how confident are you in securing offtake agreements for the remaining capacity before the project's completion at the end of **2026**?  **[APD_3406571_7]** 

2. With **permits for the Louisiana blue hydrogen project expected to be issued in 2025 and 2026**, and considering that your net cash flow projections starting in **2027** do not include project financing or equity partnerships, what are the risks of potential delays or cost overruns impacting these financial targets?  **[APD_3406571_27]** **[APD_3406571_7]** 

3. The **Middle East and India segment** has shown declines due to reduced merchant demand and pricing pressures, particularly in the **United Arab Emirates**. What strategies are you implementing to address these challenges and improve performance in this region?  **[APD_3406571_34]** 

4. After exiting the proposed **$4.5 billion** green hydrogen joint venture in Northern Texas, how does this decision affect your overall clean hydrogen strategy, and are there concerns about meeting internal return targets for future clean energy projects?  **[APD_3406571_7]** 

5. With the **LNG business contributing about 4%** of earnings (approximately **$0.49** per share) and now being discontinued, how do you plan to offset this **4% headwind** in FY2025 to maintain your growth trajectory?  **[APD_3406571_14]** 

f14a367fb0a3d6a4b8d30310a84fe35d94b04da62ac2a67a63e1a72a1122a2ed

18d0fb0d4274516ab839f2e8275346e6eaafde14f1d79d34da28a66d3b6bc9b7

4b6d40ada0e06fc549cea056a681b4170d4e29527a22d552504a48f704d371d0

### Q4 2024 Earnings Call
- **Issued Period:** Q4 2024
- **Guided Period:** FY 2025 and Q1 2025
- **Guidance:**
  - **Fiscal Year 2025 Adjusted EPS:** $12.70 to $13.00, an improvement of 6% to 9% over the previous year  **[APD_3406571_1]** .
  - **First Quarter 2025 Adjusted EPS:** $2.75 to $2.85, flat to up to 4% considering the LNG divestiture  **[APD_3406571_1]** .
  - **Price Increase Expectation for 2025:** 1% to 2%  **[APD_3406571_9]** .
  - **Volume Growth Expectation:** 2% to 3% depending on the region  **[APD_3406571_9]** .
  - **Dividend Payments:** $1.6 billion to shareholders  **[APD_3406571_2]** .

### Q3 2024 Earnings Call
- **Issued Period:** Q3 2024
- **Guided Period:** FY 2024
- **Guidance:**
  - **Full Year Adjusted EPS:** $12.20 to $12.50  **[APD_3395644_2]** .
  - **Capital Expenditures (CapEx):** $5 billion to $5.5 billion  **[APD_3395644_2]** .
  - **Effective Tax Rate:** About 18%  **[APD_3395644_11]** .

### Q2 2024 Earnings Call
- **Issued Period:** Q2 2024
- **Guided Period:** Q3 2024 and FY 2024
- **Guidance:**
  - **Third Quarter 2024 Adjusted EPS:** $3 to $3.05 per share  **[APD_3381478_1]** .
  - **Full Fiscal Year 2024 Adjusted EPS:** $12.20 to $12.50 per share  **[APD_3381478_1]** .
  - **Capital Expenditures (CapEx):** $5 billion to $5.5 billion  **[APD_3381478_1]** .
  - **Dividends:** $1.6 billion to shareholders  **[APD_3381478_1]** .

### Q1 2024 Earnings Call
- **Issued Period:** Q1 2024
- **Guided Period:** FY 2024 and Q2 2024
- **Guidance:**
  - **Full Year Adjusted EPS:** $12.20 to $12.50  **[APD_3371869_1]** .
  - **Second Quarter Adjusted EPS:** $2.60 to $2.75  **[APD_3371869_1]** .
  - **Capital Expenditures (CapEx):** $5 billion to $5.5 billion  **[APD_3371869_1]** .
  - **Dividend:** $1.6 billion to shareholders  **[APD_3371869_1]** .

ef046457b4d26d0de579cf5184d24a31e0a468c3579a31e028d8f81f37b27d52

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

| Name               | Position                                           | Start Date          | Short Bio                                                                                                                                                                                                                                                                                                                                                     |
|--------------------|----------------------------------------------------|---------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Seifi Ghasemi      | Chairman, President, and Chief Executive Officer   | July 2014           | Seifi Ghasemi has been serving as the Chairman, President, and CEO of Air Products since July 2014. He has extensive management experience in the industrial gases and specialty chemicals industries, previously serving as Chairman and CEO of Rockwood Holdings, Inc.  **[0001193125-24-270810_d899717ddefa14a.htm:31]** **[0001308179-23-001066_apd4236421-def14a.htm:15]** **[0001308179-24-000777_apd4362551-prec14a.htm:33]** **[0001308179-24-000784_apd4362551-prer14a.htm:33]** **[0001308179-24-000792_apd4362551-defc14a.htm:33]** **[0000002969-24-000056_apd-20240930.htm:16]** .                                                                 |
| Melissa N. Schaeffer| Executive Vice President and Chief Financial Officer| October 2024        | Melissa N. Schaeffer became the Executive Vice President and CFO in October 2024. She joined Air Products in 2016 and has held various roles, including Vice President, Finance – GEMTE, Americas, Middle East, and India  **[0000002969-24-000056_apd-20240930.htm:16]** .                                                                                                                               |
| Sean D. Major      | Executive Vice President, General Counsel and Secretary | 2017               | Sean D. Major has been serving as the Executive Vice President, General Counsel, and Secretary since 2017. He previously held the same position at Joy Global Inc.  **[0000002969-24-000056_apd-20240930.htm:16]** **[0000002969-23-000047_apd-20230930.htm:14]** .                                                                                                                                                                                   |
| Ivo Bols           | President, Europe and Africa                       | 2017                | Ivo Bols has been the President, Europe and Africa since 2017. He joined Air Products in 1988 and has served in various roles, including Vice President and General Manager for different regions and product lines  **[0000002969-24-000056_apd-20240930.htm:16]** .                                                                                                                                        |
| Wolfgang Brand     | President, Project Delivery and Technical          | July 2024           | Wolfgang Brand assumed the role of President, Project Delivery and Technical in July 2024. He joined Air Products in May 2020 and previously served as Vice President, NEOM Green Hydrogen  **[0000002969-24-000056_apd-20240930.htm:16]** .                                                                                                                                                               |
| Victoria Brifo     | Executive Vice President, Chief Human Resources Officer | October 2024       | Victoria Brifo became the Executive Vice President and Chief Human Resources Officer in October 2024. She joined Air Products in 2001 and has held various leadership roles, including Global Diversity Director  **[0000002969-24-000056_apd-20240930.htm:16]** .                                                                                                                                         |
| Brian Galovich     | Executive Vice President, Chief Information Officer | October 2024        | Brian Galovich became the Executive Vice President and CIO in October 2024. He joined Air Products in December 2020 and previously worked at United Technologies Corporation for 24 years  **[0000002969-24-000056_apd-20240930.htm:16]** .                                                                                                                                                                |
| Ahmed Hababou      | President, Middle East and India                   | February 2023       | Ahmed Hababou has been the President, Middle East and India since February 2023. He joined Air Products in 2002 and has held various roles, including Vice President, Green Hydrogen  **[0000002969-24-000056_apd-20240930.htm:16]** .                                                                                                                                                                     |
| Kurt Lefevere      | President, Asia                                    | June 2024           | Kurt Lefevere has been serving as the President, Asia since June 2024. He joined Air Products in 1994 and previously served as Vice President, Northern Europe  **[0000002969-24-000056_apd-20240930.htm:17]** **[0001308179-24-000792_apd4362551-defc14a.htm:71]** .                                                                                                                                                                                         |
| Francesco Maione   | President, Americas                                | December 2020       | Francesco Maione has been the President, Americas since December 2020. He joined Air Products in 1998 and has held various roles, including President of Atmospheric Gases, Americas  **[0000002969-24-000056_apd-20240930.htm:17]** .                                                                                                                                                                     |
| Wilbur Mok         | President, Equipment Businesses                    | July 2024           | Wilbur Mok has been the President of Equipment Businesses since July 2024. He joined Air Products in 1986 and previously served as President, Asia  **[0000002969-24-000056_apd-20240930.htm:17]** .                                                                                                                                                                                                       |
| Walter L. Nelson   | Senior Vice President, Global Helium and Rare Gases| August 2024         | Walter L. Nelson became the Senior Vice President, Global Helium and Rare Gases in August 2024. He joined Air Products in 1990 and has been involved in the company's helium business in various positions  **[0000002969-24-000056_apd-20240930.htm:17]** .                                                                                                                                               |
| Bob Patel          | Director Candidate                                 | N/A                 | Bob Patel is a seasoned executive with 35 years of experience in the global chemicals and materials industry. He has held significant leadership roles, including former CEO of W.R. Grace and LyondellBasell  **[0001308179-24-000777_apd4362551-prec14a.htm:36]** **[0001308179-24-000792_apd4362551-defc14a.htm:36]** **[0001193125-24-260403_d719958ddefa14a.htm:3]** **[0001193125-24-260402_d719958dex991.htm:2]** .                                                                                                                                |
| Alfred Stern       | Director Candidate                                 | N/A                 | Alfred Stern is the Chairman of the Executive Board and CEO of OMV Aktiengesellschaft since September 2021. He has extensive international business management experience and expertise in chemicals innovation  **[0001308179-24-000777_apd4362551-prec14a.htm:38]** **[0001308179-24-000784_apd4362551-prer14a.htm:38]** **[0001308179-24-000792_apd4362551-defc14a.htm:38]** **[0001193125-24-260402_d719958dex991.htm:1]** **[0001193125-24-260403_d719958ddefa14a.htm:3]** **[0001193125-24-270810_d899717ddefa14a.htm:46]** **[0001308179-24-000777_apd4362551-prec14a.htm:43]** **[0001308179-24-000792_apd4362551-defc14a.htm:43]** **[0001308179-24-000784_apd4362551-prer14a.htm:43]** **[0001193125-24-270810_d899717ddefa14a.htm:6]** **[0001193125-24-260402_d719958dex991.htm:2]** **[0001193125-24-260403_d719958ddefa14a.htm:4]** **[0001193125-24-260402_d719958dex992.htm:0]** **[0001193125-24-260403_d719958ddefa14a.htm:8]** **[0001193125-24-270810_d899717ddefa14a.htm:18]** **[0001193125-24-260403_d719958ddefa14a.htm:1]** .                                                                             |

296bfaabaf21c9381e186a2bcb219c45d20964fc369a0bc6741070c37bbd6b41

| Program Details          | Program 1          |
|--------------------------|--------------------|
| Approval Date            | **15 September 2011**  **[0000002969-24-000056_apd-20240930.htm:126]** **[0000002969-24-000056_apd-20240930.htm:39]**  |
| End Date/Duration        | No expiration date  **[0000002969-24-000056_apd-20240930.htm:126]** **[0000002969-24-000056_apd-20240930.htm:39]**  |
| Total additional amount  | **$1.0 billion**  **[0000002969-24-000056_apd-20240930.htm:126]** **[0000002969-24-000056_apd-20240930.htm:39]**  |
| Remaining authorization  | **$485.3 million**  **[0000002969-24-000056_apd-20240930.htm:126]** **[0000002969-24-000056_apd-20240930.htm:39]**  |
| Details                  | No shares purchased since fiscal year 2013. Focus on high-return projects over buybacks  **[0000002969-24-000056_apd-20240930.htm:126]** **[APD_1179927_8]**  |

e32249860cc5e743a70c4758156d8d5335d58c003bb22b7cac2aba0c6010a65f

a2a230f91d7775bbf46e31428e03cd3d8c26f1c32056813e015fbada95975ae1

31d7a6de0b3515cece57317ef45fcd7583d6b57fc41c2870ea161b9e787e10c3

**Quarterly guidance for Q1 2025:**
- **Adjusted EPS**: $2.75 to $2.85  **[APD_3406571_1]**  (no change from prior guidance $2.75 to $2.85  **[APD_3406571_9]** )

**Annual guidance for FY 2025:**
- **Adjusted EPS**: $12.70 to $13.00  **[APD_3406571_1]**  (no change from prior guidance $12.70 to $13.00  **[APD_3406571_9]** )
- **Price Growth**: 1% to 2%  **[APD_3406571_1]**  (no change from prior guidance 1% to 2%  **[APD_3406571_9]** )
- **Volume Growth**: 2% to 3%  **[APD_3406571_1]**  (no change from prior guidance 2% to 3%  **[APD_3406571_9]** )
- **Impact of LNG Business Divestiture**: $0.49 per share  **[APD_3406571_1]**  (no change from prior guidance $0.49 per share  **[APD_3406571_9]** )
- **China Economic Activity**: No significant growth  **[APD_3406571_1]**  (no prior guidance)

2b8cabf585d39bc24e10b82fe6c1043bd4da10b3666a6df120e568a680ac10e0

| Name               | Start Date   | End Date       | Reason for Change                                                                 |
|--------------------|--------------|----------------|-----------------------------------------------------------------------------------|
| Deloitte & Touche LLP | July 24, 2018  **[0001193125-18-227823_d542468d8k.htm:1]**  | Present     | Current auditor.                                                             |
| KPMG LLP           | 2002  **[0000002969-18-000044_apd-10xkx30sep2018.htm:76]**  | September 30, 2018  **[0001193125-18-227823_d542468d8k.htm:1]**  | The Audit and Finance Committee conducted a competitive process.  **[0001193125-18-227823_d542468d8k.htm:1]**  |

396bd68e4a0dd567fa0ed756a074eea647066f448303c8a18c65258224a9209a

d8e880b976f7c29af5787502d684223b484ed7a417c42c4ae3773734e2d807a7

| Year  | Amount Due (in millions) | Debt Type                                      | Interest Rate (%) | % of Total Debt Calculation |
|-------|---------------------------|-----------------------------------------------|-------------------|-----------------------------|
| 2025  | $611.6 **[0000002969-24-000056_apd-20240930.htm:114]**            | Other variable-rate, Eurobonds, Chinese Renminbi, Foreign finance lease obligations **[0000002969-24-000056_apd-20240930.htm:114]** | 7.11, 1.000, 5.5, 10.8 **[0000002969-24-000056_apd-20240930.htm:114]** | 4.2% = (611.6 / 14,485.5) * 100 **[0000002969-24-000056_apd-20240930.htm:114]** |
| 2026  | $716.3 **[0000002969-24-000056_apd-20240930.htm:114]**            | Series E, Note, Saudi Riyal Loan Facility, New Taiwan Dollar Loan Facility **[0000002969-24-000056_apd-20240930.htm:114]** | 7.6, 1.50, 2.00, 2.66, 2.72 **[0000002969-24-000056_apd-20240930.htm:114]** | 4.9% = (716.3 / 14,485.5) * 100 **[0000002969-24-000056_apd-20240930.htm:114]** |
| 2027  | $1,292.5 **[0000002969-24-000056_apd-20240930.htm:114]**          | Note, Saudi Riyal Loan Facility, Chinese Renminbi, Non-Recourse Debt **[0000002969-24-000056_apd-20240930.htm:114]** | 1.85, 7.35, 5.5 **[0000002969-24-000056_apd-20240930.htm:114]** | 8.9% = (1,292.5 / 14,485.5) * 100 **[0000002969-24-000056_apd-20240930.htm:114]** |
| 2028  | $760.5 **[0000002969-24-000056_apd-20240930.htm:114]**            | Eurobonds, New Taiwan Dollar Loan Facility **[0000002969-24-000056_apd-20240930.htm:114]** | 0.500, 1.86 **[0000002969-24-000056_apd-20240930.htm:114]** | 5.3% = (760.5 / 14,485.5) * 100 **[0000002969-24-000056_apd-20240930.htm:114]** |
| 2029  | $977.7 **[0000002969-24-000056_apd-20240930.htm:114]**            | Note **[0000002969-24-000056_apd-20240930.htm:114]**                                  | 4.60 **[0000002969-24-000056_apd-20240930.htm:114]**      | 6.7% = (977.7 / 14,485.5) * 100 **[0000002969-24-000056_apd-20240930.htm:114]** |
| Thereafter | $10,126.9 **[0000002969-24-000056_apd-20240930.htm:114]**    | Various (e.g., Eurobonds, Notes, Industrial Revenue Bonds) **[0000002969-24-000056_apd-20240930.htm:114]** | 0.800 to 5.7 **[0000002969-24-000056_apd-20240930.htm:114]** | 69.9% = (10,126.9 / 14,485.5) * 100 **[0000002969-24-000056_apd-20240930.htm:114]** |

ac44a924a3020a29cdf9af35c76c334d20db2e1c55d2b6bc4458f67cec76d3d3

c9c45396cfb64ec05cad20feeb1c36dafc0424563b11ebe55a419a703084c931

1. **Reduced Guidance**  
   **Q:** Do markets need to improve to meet second-half expectations?  
   **A:** Management does not expect any improvement in market conditions and hopes things don't get worse. They are not factoring in any significant improvement in the world economy for the second half.  **[APD_3371869_17]** 

2. **Helium Demand Weakness**  
   **Q:** Why is helium demand lower, and what's the impact on profits?  
   **A:** Helium demand is down, especially in electronics across China and Asia. This weakness affected profits, and management lowered guidance to account for potential continued softness.  **[APD_3371869_7]** **[APD_3371869_15]** 

3. **CapEx Projects Timeline**  
   **Q:** Can you update us on major project start-up expectations?  
   **A:** The Alberta blue hydrogen project is expected onstream in fiscal **2025**. The NEOM green hydrogen project is anticipated by **December 31, 2026**. The Louisiana blue hydrogen project is expected in fiscal year **2027**, and the sustainable aviation fuel (SAF) facility is anticipated around fiscal **2027**, depending on permits.  **[APD_3371869_20]** **[APD_3371869_32]** **[APD_3371869_33]** 

4. **SAF Project Delay**  
   **Q:** Why is the SAF project start-up delayed to 2027?  
   **A:** The delay is due to longer-than-expected permitting processes in California. The start-up date depends on the final ruling on construction permits.  **[APD_3371869_34]** 

5. **Cash Flow Concerns**  
   **Q:** Will operating cash flow grow with EPS this year?  
   **A:** Operating cash flow is influenced by timing issues, including distributions from a large equity affiliate and building helium inventory. However, EBITDA is up, and cash conversion remains stable.  **[APD_3371869_24]** 

6. **Dividend Hike Size**  
   **Q:** Why was the dividend increase smaller than in the past?  
   **A:** The dividend is set as a percentage of the stock price, aiming for about **2.5%** yield. With the stock price higher, there's less need to increase the dividend to maintain this yield.  **[APD_3371869_11]** 

7. **European Margins**  
   **Q:** Are European margins sustainable given current pricing?  
   **A:** Margins in Europe are up **1,000 basis points** due to maintaining pricing while energy costs declined. Management is proud of the performance but cannot predict future pricing dynamics.  **[APD_3371869_28]** 

8. **Sale of Equipment Costs**  
   **Q:** Are higher sale-of-equipment costs a risk for future contracts?  
   **A:** Cost overruns were due to inflation and execution delays. For LNG projects under execution, the risk is considered low.  **[APD_3371869_6]** **[APD_3371869_18]** 

9. **China Demand Slowdown**  
   **Q:** How is the economic situation in China affecting business?  
   **A:** There is a weakness in demand, particularly in helium and merchant gases, linked to lower economic activity and electronics demand in China and Asia.  **[APD_3371869_7]** **[APD_3371869_13]** 

10. **Natural Hydrogen Stance**  
    **Q:** What's your view on natural hydrogen opportunities?  
    **A:** Management is not involved in natural hydrogen projects and considers them unrealistic, describing them as "a little bit of a pie in the sky."  **[APD_3371869_21]** 

94325b2083ec4a25246879bbadd4ac4226ea3daf3e6a67a9d11bfc8253a1d302

1. **Earnings Guidance and Q4 Ramp**  
   **Q:** What drives the steep earnings ramp in Q4?  
   **A:** The lower guidance for Q3 is due to major turnarounds increasing maintenance costs in Europe and the U.S..  **[APD_3381478_6]** **[APD_3381478_22]**  For Q4, we expect contributions from bringing a significant number of smaller plants online—we've already brought about **20** in the first half—and anticipate new clients coming on stream.  **[APD_3381478_6]**  We've also implemented productivity actions that should improve numbers, and since our business is seasonal, Q4 is typically our strongest quarter. Additionally, our LNG business is performing strongly and will ramp up in Q4.  **[APD_3381478_6]** 

2. **Louisiana Project Demand and Offtake Agreements**  
   **Q:** Is there demand for all the blue ammonia from the Louisiana project?  
   **A:** Not all hydrogen will be converted to ammonia; some will supply our Gulf Coast pipeline due to significant demand for blue hydrogen.  **[APD_3381478_8]**  We're confident in strong demand for our **real blue ammonia**, mainly for decarbonizing power plants in Japan and Korea, and as fuel for ships facing new European carbon taxes starting January 2025.  **[APD_3381478_8]** 

3. **Delay in Signing Offtake Agreements**  
   **Q:** Have you signed any offtake agreements for NEOM or Louisiana projects?  
   **A:** No, we haven't signed contracts yet by design.  **[APD_3381478_10]**  We're waiting to secure higher prices that reflect the value of being first movers in green and blue hydrogen. We won't commit until we can extract the right price to deserve returns beyond a typical project.  **[APD_3381478_10]** **[APD_3381478_21]** 

4. **Productivity Measures and Cost Reduction**  
   **Q:** What cost reduction actions are impacting margins?  
   **A:** Company-wide, we're increasing efficiency by simplifying operations and reducing costs—essentially doing more with less.  **[APD_3381478_7]**  These actions include severance costs reflected in a **$0.20** charge, with an expected annual savings run rate of about **$75 million**.  **[APD_3381478_13]** 

5. **Maintenance Costs Impacting Q3 Earnings**  
   **Q:** How will turnarounds affect Q3 volumes and margins?  
   **A:** Major planned maintenance outages in Europe and the Americas will significantly increase maintenance expenses in Q3.  **[APD_3381478_6]** **[APD_3381478_22]**  This includes extensive work on hydrogen plants and facilities in Rotterdam, contributing to higher costs and impacting volumes.  **[APD_3381478_22]** 

6. **Jazan JV Earnings Contribution**  
   **Q:** Is the decline in equity affiliates' income from Jazan a one-time event?  
   **A:** Yes, it's primarily due to timing—a higher interest expense this quarter and a prior-year one-time item.  **[APD_3381478_8]**  Jazan continues to deliver about **$1.35** in earnings per share annually, and we expect consistent performance moving forward.  **[APD_3381478_8]** 

7. **Market Demand for Blue and Green Hydrogen**  
   **Q:** How confident are you in demand for your hydrogen projects?  
   **A:** We're confident there's demand driven by regulations in Europe, California, Japan, and Korea.  **[APD_3381478_21]**  Our projects are real and will produce green and blue hydrogen when others might not have product available. We believe in extracting maximum value due to our unique position.  **[APD_3381478_8]** **[APD_3381478_21]** 

8. **Alberta Blue Hydrogen Project Update**  
   **Q:** Is the Alberta project on track, and how much volume is committed?  
   **A:** Yes, it's still expected to start up in late 2025, and just about all the volume is committed.  **[APD_3381478_11]**  We have contracts in place and are confident in the project's success.  **[APD_3381478_11]** 

9. **Potential Spin-off of Hydrogen Business**  
   **Q:** Would you consider establishing market value for the hydrogen business through an IPO or spin-off?  
   **A:** We're currently focused on executing **$20 billion** in projects and believe it's not the time for financial structuring that could distract management.  **[APD_3381478_20]**  Once we've secured long-term contracts and our hydrogen business generates substantial EBITDA and returns, we might consider such options.  **[APD_3381478_20]** 

10. **Helium Market Adjustments in Asia**  
    **Q:** Was the unfavorable business mix in Asia due to helium?  
    **A:** Yes, we're adjusting to helium market conditions in China impacted by Russian supply.  **[APD_3381478_10]**  The situation has stabilized, and we expect stability for the remainder of the year.  **[APD_3381478_10]** 

11. **Electronics Market Outlook**  
    **Q:** What's the outlook for the electronics business?  
    **A:** We see signs of the electronics business picking up, especially in Asia, with increased volumes in nitrogen, argon, and helium.  **[APD_3381478_18]**  However, we're not factoring this potential upside into our second-half outlook to remain conservative.  **[APD_3381478_18]** 

12. **Impact of Lower Natural Gas Prices**  
    **Q:** How do lower natural gas prices affect efficiency improvements?  
    **A:** Lower natural gas prices reduce the benefits from efficiency improvements.  **[APD_3381478_31]**  The bonuses we receive from efficiencies are smaller when gas prices are low, affecting our margins modestly.  **[APD_3381478_31]** 

13. **European Volume Decline**  
    **Q:** What caused the volume decline in Europe?  
    **A:** Planned maintenance outages and weaker merchant volumes decreased European volumes.  **[APD_3381478_8]** **[APD_3381478_12]**  However, the ramp-up of the Uzbekistan project contributed positively and is expected to generate around **$0.35** per share annually.  **[APD_3381478_12]** 

14. **Cash Flow from Jazan JV**  
    **Q:** Do you receive cash commensurate with Jazan JV earnings?  
    **A:** Yes, we receive regular dividends aligned with the earnings, though there may be timing differences in cash flow statements.  **[APD_3381478_16]** 

15. **NEOM and Louisiana Project Timelines**  
    **Q:** When do you expect to finalize agreements for hydrogen projects?  
    **A:** The timeline is fluid; we'll sign contracts when we can secure the right price, whether in a few months or longer.  **[APD_3381478_21]**  Our plants are slated to come onstream in 2027-2028, and we're focused on maximizing long-term value.  **[APD_3381478_21]** 

905a6fb7a2ba2b043c7f2810c695fa786e8d15b85c9b468f05b6f926cba6d121

- **Weak performance in Asia due to challenging economic conditions in China and lower demand for merchant products.** The company acknowledges that China has been weak in the first half and they have not included any improvement in their forecast.  **[APD_3381478_23]**
- **Pressure on helium pricing in Asia, requiring the company to lower prices to stabilize the situation.** They are adjusting to increased competition from Russian-sourced helium and have lowered prices, impacting margins.  **[APD_3381478_10]** **[APD_3381478_26]**
- **Record high maintenance expenses impacting earnings due to significant turnaround activities in major facilities.** The company indicates that this year is a heavier maintenance year, with significant expenses, especially in the U.S. and Europe.  **[APD_3381478_25]**

4b0d1cef819632ae7fad7d06fb93b949c0bc9af24c49862ec5cb134a7e629aa9

1. **Earnings Growth Outlook**  
   **Q:** What is the expected earnings growth in coming years?  
   **A:** Seifollah Ghasemi expects Air Products to deliver about **9% to 10%** earnings growth in fiscal years 2025 and 2026, with growth in 2027 and 2028 potentially significantly higher due to new projects coming on stream. He is confident that over the next 10 years, Air Products will deliver at least **10% growth in EPS** as they go forward.  **[APD_3406571_24]** 

2. **NEOM Project Status and Financing**  
   **Q:** Can you provide an update on the NEOM project and its offtake agreements?  
   **A:** Air Products expects to fully load NEOM by **2027** and is working towards that goal. There are other customers beyond Total, but they cannot announce them yet. The capital investment in downstream infrastructure may be less than the initial **$2 billion** estimate, depending on actual customers. The initial **$1.7 billion** investment in production is now **$800 million** due to successful project financing.  **[APD_3406571_13]** **[APD_3406571_16]** **[APD_3406571_22]** 

3. **Louisiana Project Financing and Development**  
   **Q:** What is the plan for financing the Louisiana blue hydrogen project?  
   **A:** The major risk of CO₂ sequestration has been secured with extensive studies and permits underway. Air Products plans to bring in equity partners and is evaluating optimal financing strategies. The project is expected to come on stream around **2028**, with a capital investment of about **$7 billion**. They are executing prudently and not rushing investments.  **[APD_3406571_21]** 

4. **Project Strategy and Anchor Customers**  
   **Q:** Will you announce new clean hydrogen projects without anchor customers?  
   **A:** Moving forward, Air Products will not take a final investment decision on any clean hydrogen project until they have an anchor customer and have loaded 75% of existing facilities. They won't announce projects without a clear view of long-term offtake agreements for **50–60%** of the product.  **[APD_3406571_18]** **[APD_3406571_23]** 

5. **World Energy Project Delay**  
   **Q:** What is the status of the World Energy project?  
   **A:** The project is on hold due to permitting challenges from environmental objections. Air Products wants to secure all permits before proceeding to avoid risks. The relationship with World Energy is excellent, and they are exploring other opportunities, including potential buyout offers for their stake in the project.  **[APD_3406571_15]** **[APD_3406571_30]** 

6. **Management Succession Planning**  
   **Q:** When do you expect to name a new President?  
   **A:** Air Products does not expect to name a President until **March, April, or May**. They have identified highly qualified candidates who are being interviewed by the Board. The criteria are individuals who have been CEOs of public companies. The process is underway, and no announcement is expected before early to mid-2025.  **[APD_3406571_20]** 

7. **Headcount Increase and Cost Impact**  
   **Q:** How has the headcount increase affected costs, and are there plans to reduce it?  
   **A:** The headcount increase was primarily to engineer NEOM and other projects, with costs capitalized and not affecting EPS. As engineering completes, headcount will decrease. SG&A expenses are lower than the previous year. Over the last two years, they've reduced headcount by almost **1,000** through productivity actions.  **[APD_3406571_18]** **[APD_3406571_32]** 

8. **LNG Business Exit Impact**  
   **Q:** What is the impact of exiting the LNG business on 2025 earnings?  
   **A:** LNG was about a **4%** contributor, or about **$0.49** per share. There is a **4% headwind** going into fiscal year 2025 due to the exit. Air Products plans to offset this through productivity actions and growth from smaller projects.  **[APD_3406571_14]** 

9. **Activist Investors and Company Strategy**  
   **Q:** How are you responding to activist investors' suggestions?  
   **A:** Air Products listens to all investors and values their input equally. Investors consistently suggest focusing on the base industrial gases business and responsibly investing in clean hydrogen, which Air Products is doing. They are also diligent about succession planning.  **[APD_3406571_12]** 

10. **Asia Business Performance**  
    **Q:** What is affecting prices in the Asia business?  
    **A:** The price decline is due to both supply-demand imbalance and the impact of lower helium prices, partly because of helium coming from Russia.  **[APD_3406571_31]** 

11. **Return to Positive Net Cash Flow**  
    **Q:** What are the assumptions behind returning to positive net cash flow by 2027?  
    **A:** The assumption does not include project financing or equity partnerships. It's based purely on the timing of projects coming onstream and their ramp-up.  **[APD_3406571_27]** 

12. **Project Returns and Leverage**  
    **Q:** How do you approach project returns when using leverage?  
    **A:** Air Products evaluates projects based on unlevered IRR. If they are able to project finance a project, the return on equity will be higher than the IRR. They do not approve projects based on leverage.  **[APD_3406571_26]** 

13. **First Mover Advantage in Green Hydrogen**  
    **Q:** How does being a first mover benefit Air Products in green hydrogen?  
    **A:** Being the first mover with actual projects like NEOM allows Air Products to engage with real customers and negotiate better contracts. They have better visibility on demand and can meet regulatory timelines ahead of competitors, providing a significant advantage.  **[APD_3406571_28]** **[APD_3406571_33]** 

14. **Middle East and India Performance**  
    **Q:** Why was the Middle East and India performance below expectations?  
    **A:** The decline is due to lower merchant demand and slightly reduced pricing, largely in the United Arab Emirates. The Jazan joint venture is performing as expected, flat year-over-year, with very good results.  **[APD_3406571_34]** 

15. **NEOM Offtake Contract Details**  
    **Q:** Are there any conditions affecting the NEOM offtake agreement?  
    **A:** Air Products is comfortable with the NEOM offtake contract, which is consistent with similar agreements. They are fully confident it will be operational as per terms. Some details are still being negotiated, but no significant qualifying events are expected.  **[APD_3406571_25]** 

c2f68a35adee2174325d710bb7550694d460084bc29530056a5c9f0681d9aacf

1. **Total Green Hydrogen Agreement**  
   **Q:** What's the return hurdle on the Total green hydrogen agreement?  
   **A:** Management confirmed they are achieving higher returns on the Total Energies green hydrogen agreement due to being a first mover. They expect returns materially above traditional project hurdles.  **[APD_3395644_19]** 

2. **Major Project Updates**  
   **Q:** Can you provide updates on major projects and their earnings impact?  
   **A:** The **Neom** project is on schedule to be mechanically complete by **December 2026**, with product for sale in early 2027. The **Louisiana blue hydrogen** project is moving forward, targeting an onstream date in **2028**, with Class 6 permits filed. The **Alberta** project is expected to come onstream sometime in **2025**, but contributions to fiscal year earnings are uncertain due to potential winter construction delays. The **Texas green hydrogen** project is on hold pending clarity on IRA rules.  **[APD_3395644_8]** **[APD_3395644_9]** **[APD_3395644_12]** **[APD_3395644_24]** 

3. **Future Clean Energy Projects**  
   **Q:** Should we expect further clean energy project announcements in the next 12 months?  
   **A:** Management will only commit to announcing new projects like Neom 2 after selling **80%** of current production capacity. They are cautious not to get ahead of themselves and want to fully demonstrate demand before making further investments.  **[APD_3395644_20]** **[APD_3395644_24]** 

4. **Pricing of Green and Blue Hydrogen**  
   **Q:** Are there wide ranges in price discussions on clean hydrogen across projects?  
   **A:** Prices for blue hydrogen are generally **twice** that of gray hydrogen, and green hydrogen prices are **double** that of blue. This pricing applies at the customer receipt level, with variations based on delivery distance and customer proximity.  **[APD_3395644_21]** **[APD_3395644_22]** 

5. **Impact of IRA Rules and Election**  
   **Q:** What impact might the election have on IRA rules and your business pillars?  
   **A:** The uncertainty around IRA guidance, particularly the $3 subsidy for green hydrogen under **45V**, is causing delays in project decisions. Management is waiting for finalized rules, which may not come until after the election, to commit to billion-dollar facilities. A change in administration could influence these rules.  **[APD_3395644_25]** 

6. **Q4 Guidance Range**  
   **Q:** Why is the Q4 guidance range so wide?  
   **A:** The wide guidance range reflects geopolitical uncertainties, including an unstable global situation, upcoming elections, and undecided Federal Reserve actions. Management aims to maintain annual guidance without misinterpretation.  **[APD_3395644_13]** 

7. **Economics of Hydrogen Fueling Stations**  
   **Q:** What are the economics of the hydrogen fueling stations in Europe and California?  
   **A:** Air Products intends to own the entire supply chain, including production, transportation, and fueling stations—possibly in joint ventures but with control. Capital deployment depends on the number of stations, which will develop gradually based on market demand and product availability.  **[APD_3395644_14]** 

8. **Regional Performance and 2025 Outlook**  
   **Q:** What are the key regional trends and outlook for 2025?  
   **A:** Management is optimistic about the U.S. economy, with strong on-site volumes and a stable merchant business. Europe is holding up with successful price increases. China remains weak but has stabilized. Overall, they aim for at least **10%** EPS growth in 2025.  **[APD_3395644_15]** **[APD_3395644_21]** 

9. **Sustainable Aviation Fuel Project**  
   **Q:** Can you update us on the sustainable aviation fuel project in Los Angeles?  
   **A:** The project is currently on hold until permits are obtained, which may take about a **year**. Air Products maintains a good relationship with World Energy and sees strong demand but will wait for secure permits before making a final investment decision.  **[APD_3395644_10]** **[APD_3395644_17]** 

10. **Tax Rate Outlook**  
    **Q:** Should we assume the same lower tax rate in Q4?  
    **A:** Despite a lower tax rate this quarter due to one-time items like significant stock option exercises and foreign restructuring, the full-year tax rate is expected to be **18%**.  **[APD_3395644_11]** 

7d2885203a602ff24bd6d3d23899f81fe03c8ff2994c1c79deeeb820426cf4b2

- *• Air Products lowered its full-year guidance due to weaker-than-expected helium demand, especially in the electronics industry and in Asia, which may continue throughout the fiscal year.**  **[APD_3371869_7]** **[APD_3371869_15]**
- *• The company is experiencing significant volume headwinds from weak economic growth in China and does not expect market conditions to improve, expressing concerns about potential worsening due to geopolitical developments.**  **[APD_3371869_17]**
- *• There are uncertainties and potential delays in finalizing offtake agreements for major clean hydrogen and ammonia projects, with management acknowledging they are not in a hurry to commit, possibly impacting future returns.**  **[APD_3371869_35]** **[APD_3371869_34]**

14869c31b0a3bdcec328f14279330f6b450cdb749defdac6ef8f81757e54a2e7

- **Air Products is committed to delivering at least 10% growth in earnings per share next year and for the next ten years**, driven by strong performance in the U.S. and new projects coming online.  **[APD_3395644_13]** **[APD_3395644_20]**
- **The CEO is very optimistic about the U.S. market**, stating that the economy is stronger than expected with **strong on-site volumes, especially hydrogen**, and the merchant business performing well.  **[APD_3395644_13]**
- **The company has secured a significant green hydrogen supply agreement with Total Energies**, expected to yield higher returns due to the risks taken, validating their long-term strategy in clean hydrogen.  **[APD_3395644_18]**

73dc69cf373ac749f3ec80ed6d8c338d4bb69f81602e4b26be4788a7a99f7914

- **Delays and uncertainties in major projects, particularly the World Energy project, which has been put on hold due to permit challenges and potential sale of Air Products' interest.**  **[APD_3406571_15]** **[APD_3406571_30]**
- **Negative net cash flow expected until 2027, indicating potential cash flow constraints over the next few years without reliance on project financing or equity partnerships.**  **[APD_3406571_27]**
- **Loss of LNG business contributing a 4% headwind to FY2025 earnings (about $0.49 per share), leading to near-term earnings pressure.**  **[APD_3406571_14]**

62232a55c0dbee98c94cead7e6be5674c64f64d30936af80ddb06ced8043da0c

- **Stronger than expected performance in the US and Europe**, with **US merchant pricing up 6%**, demonstrating **pricing power in an inflationary environment**.  **[APD_3381478_23]** ,  **[APD_3381478_19]**
- **Unique positioning with real green hydrogen projects**, such as the **Saudi Arabia project**, making APD the **only company with real products being made** to meet future demand in 2027-2028.  **[APD_3381478_21]**
- **Significant demand expected for blue ammonia and blue hydrogen**, including use of **ammonia as fuel for ships starting January 2025** due to regulatory changes in Europe, and APD is ready to meet this demand with their **Louisiana project**.  **[APD_3381478_8]**

6a16d968cd1b0c137a008f8bffa5718a461042d205c10eff6a412b8f9824903a

- **Key projects are facing delays and uncertainties**, such as the green hydrogen project in Upstate New York, which is **expected to come online in 2027 or 2028**, indicating a long timeline before contributing to earnings.  **[APD_3395644_26]**
- **Weakness in China is impacting volumes negatively**, with lower demand in the region and limited ability to increase prices further without causing demand destruction. The CEO stated that **"we are not seeing much growth in that part of the world"**.  **[APD_3395644_9]** **[APD_3395644_13]**
- **Geopolitical instability and economic uncertainties** are causing a wider guidance range for Q4, with concerns about interest rates and global instability affecting the company's outlook. The CEO mentioned **"good reason for the wide range... There is a lot of unknowns"**.  **[APD_3395644_12]**

962444cc431c399e8b900896e68abe5c3287e9f700af123d64e02c9f8a506c2d

- **Air Products is a first mover in the clean hydrogen market**, positioning itself to become the world's largest clean hydrogen supplier, benefiting from significant demand and favorable supply-demand dynamics.  **[APD_3406571_28]** **[APD_3406571_6]**
- **The company expects to deliver at least 10% EPS growth over the next 10 years**, driven by their clean hydrogen projects which are anticipated to achieve **higher returns than the core industrial gas business**.  **[APD_3406571_8]** **[APD_3406571_24]**
- **Air Products maintains a disciplined financial approach**, evaluating projects on an unlevered IRR basis, and expects to return to **positive net cash flow starting in 2027** without assuming project financing or equity partnerships.  **[APD_3406571_26]** **[APD_3406571_27]**

b45684b3ba788d4319ea6c41d6b8f4cf0eae7b0eb727d91fa8da61644e81b5e8

Air Products and Chemicals Inc (APD)

Financials