Chemicals: Non-GAAP measures in MD&A

We reconcile each non‑GAAP performance measure to its most directly comparable GAAP measure in the table below, followed by descriptions of each non-GAAP adjustment. Margins are calculated by dividing the applicable line item by consolidated sales for the relevant period. In addition to our non-GAAP performance measures, we also present components used in calculating adjusted EPS to illustrate the per share effect of our non‑GAAP adjustments. All per share amounts are calculated on a diluted basis from continuing operations attributable to Air Products. Because margins and per share amounts are calculated independently, the individual components may not sum to the related totals due to rounding.

Three Months Ended 31 December
Q1 2026 vs. Q1 2025	Operating Income	Operating Margin	Other Non- Operating Inc/Exp, Net	Income Tax Expense	Net Income Attributable to Air Products	EPS
Q1 2026 GAAP Measures	$734.5	23.7%	($1.4)	$159.4	$678.2	$3.04
Q1 2025 GAAP Measures	643.6	22.0%	38.9	140.7	617.4	2.77
$ GAAP Change	$90.9	$0.27
%/bp GAAP Change	14%	170	bp	10%
Q1 2026 GAAP Measures	$734.5	23.7%	($1.4)	$159.4	$678.2	$3.04
Business and asset actions (A)	22.0	0.7%	6.3	3.1	24.6	0.11
Non-service pension cost, net	—	—%	3.4	0.9	2.5	0.01
Q1 2026 Adjusted Measures	$756.5	24.4%	$8.3	$163.4	$705.3	$3.16
Q1 2025 GAAP Measures	$643.6	22.0%	$38.9	$140.7	$617.4	$2.77
Shareholder activism-related costs	29.9	1.0%	—	8.0	21.9	0.10
Gain on de-designation of cash flow hedges (B)	—	—%	(38.8)	(3.3)	(10.3)	(0.05)
Non-service pension cost, net	—	—%	10.5	2.6	7.9	0.04
Q1 2025 Adjusted Measures	$673.5	23.0%	$10.6	$148.0	$636.9	$2.86
$ Adjusted Change	$83.0	$0.30
%/bp Adjusted Change	12%	140	bp	10%
(A) Charge attributable to noncontrolling interests was $0.6. (B) Gain attributable to noncontrolling interests was $25.2.

Business and Asset Actions

During the first quarter of fiscal year 2026, we recorded charges for business and asset actions totaling $28.3 ($24.6 after tax, or $0.11 per share) related to project exits announced in fiscal year 2025. Of these charges, $22.0 were recorded within operating income to reflect updated cost estimates as we settle project‑related commitments and sell associated assets. The remaining $6.3 was recorded to "Other non‑operating income (expense), net" and reflects losses on cross‑currency interest rate swaps terminated in connection with the early repayment of related intercompany loans for one of the affected gasification projects.