To Our Shareholders,

In fiscal year 2015, Airgas cleared the decks and directed our full and complete focus on our customers.

For the past several years, we took on and completed a myriad of initiatives and improvements to Airgas' infrastructure and capabilities. From the SAP implementation, to a new regional structure, to deploying enhanced telesales and eBusiness sales channels, these initiatives are going to make us a better gases and hardgoods provider to our customers. However, they also required Airgas associates to split their time and energies between business-building efforts and taking care of customers. When you are multi-tasking, you might be moving forward, but definitely not as fast or as effectively as you can when you have a clear, singular mission.

Today, we have a simple directive and message for everyone at Airgas: Control what you can, watch your nickels and dimes, and—most importantly—do everything in your power to help make your customers successful. That's it. No laundry list of priorities and sub-priorities, just a simple mission with a laser focus on our customers.

When we took this message to Airgas associates in the field, you could almost sense them waiting for the next shoe to drop. But when we made it clear that there was a period at the end of the statement—not a comma followed by a list of new programs—you could definitely sense their excitement.

Finding new and better ways to serve our customers is the sweet spot where Airgas associates really excel. In fiscal year 2015, they proved this once again.

Almost two years ago, we embarked on a mission to reduce the size of our largest regions and areas. We also introduced an even smaller geographic zone—districts—that allowed us to put local management in very close proximity to customers. After completing training in fiscal year 2015, our 200-plus district managers immediately began making connections with their customers and have continued to enhance and deepen the customer relationships that have been a hallmark of our company throughout our history.

We're getting very positive early feedback from our customers as our district managers visit customer sites and work with their local teams of Airgas associates to move with the speed, responsiveness and creativity that customers want and expect from Airgas. The same thing is happening with our move to smaller regions. We split some of our biggest regions to enable our regional presidents to be tremendously successful in a more manageable geography, especially in regions that had expanded exponentially due to our company's growth through the years.

Our business has always been an amalgamation of many, mostly small details, and when our associates have the proper time to pay attention to these details, they do a magnificent job taking care of their customers. Having smaller, collaborative teams covering tighter geographies is one of the keys to our success as it affords us the intimacy to understand and resolve the customer's issues by utilizing our unmatched product and service portfolio.

With our SAP information platform now firmly in place, customers of all sizes and types can interact with Airgas through any number of our sales channels—branches, eBusiness, telesales, field sales, strategic accounts—to access real-time data about their accounts, orders, products and much more. Whether a customer operates from a single location or from hundreds or even thousands of locations, with SAP providing a consistent platform and data from across Airgas' multiple sales channels, we can effectively meet their needs.

At Airgas, when it comes to serving our customers, there are no tough calls. If it's right for the customer, Airgas is going to do it as long as it can be done safely. That's how we've been able to build long-lasting, collaborative and trusting relationships with our customers—and will continue to do so going forward.

For example, we recently made a multi-million dollar investment in new MicroBulk trucks. In terms of the size of delivery mode, MicroBulk falls between cylinders and small bulk tanks. Even though we did not have customers already lined up to load these new trucks, we recognized that there are many customer locations where MicroBulk would better fit their needs than their current supply mode. We more than doubled our new MicroBulk installations in fiscal year 2015.

We have also been making a big push to "bullet-proof" our supply chain. Over the past several years, because of market instabilities and product shortages, we have not always had the quantities of certain gas products our customers required. We have been investing in new gas production plants to take more direct control of the reliability of supply, as well as diversifying our purchases of certain gases by expanding the number of providers we rely on. We take our responsibility to have what our customers need, when and where they need it, very seriously and are committed to being the most reliable supplier in the industry.

Many times when our welding process or specialty gas specialists visit customer sites, their recommendations will include ways to conserve gases and save the customer money. We love selling gas, but it's even more important to us to serve as trusted partners and continually find ways to help make our customer's business better.

We're proud of how far and fast we've grown as a company during the past three-plus decades and our ability to increase sales and earnings in fiscal year 2015 while facing sharp, unpredictable swings in the economy. Despite the poor economic climate, we stayed focused on our customers in fiscal year 2015. We work hard to help our customers win in their markets and, only then, can we win
in ours.

Michael L. Molinini
President and Chief Executive Officer
July 2015