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ITEM 1.	BUSINESS.

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•	Manufacturing & Metal Fabrication (29%)

•	Non-Residential (Energy & Infrastructure) Construction (15%)

•	Life Sciences & Healthcare (14%)

•	Food, Beverage & Retail (13%)

•	Energy & Chemical Production & Distribution (12%)

•	Basic Materials & Services (11%)

•	Government & Other (6%).

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•	alignment of the sales and marketing organization with key customer segments, particularly within the strategic accounts program, to provide leadership and support throughout all sales channels in tailoring the Company’s broad product and service offerings to the unique needs of each customer segment;

•	leveraging all sales channels, including branch-based sales representatives, product and industry specialists, retail stores, the strategic accounts program, telesales, catalogs, e-Business and independent distributors;

•	fully leveraging the new District Manager structure to drive local sales and branch operations accountability, enhance depth of customer relationships, continuously improve transaction accuracy, and increase speed to deliver exceptional customer service through the Districts;

•	enhancing the effectiveness of the field-based sales organization through improved sales management disciplines at the District and branch levels;

•	driving customer adoption of the Company’s new Airgas.com e-Business platform;

•	strategic products, which have strong growth profiles due to favorable customer segments, application development, increasing environmental regulation, strong cross-selling opportunities, or a combination thereof (e.g., bulk gases, specialty gases, medical products, carbon dioxide/dry ice and safety products);

•	leveraging the Company’s enterprise information system (“SAP”) by capturing strategic pricing benefits, expanding the Airgas Total Access™ telesales platform, developing key metrics, analytics and tools for continuous improvement, optimizing sales channels and maximizing hardgoods and packaged gas distribution efficiencies;

•	effective utilization of the Company’s divisional operating structure and Business Support Centers (“BSCs”) to leverage the full benefits of the SAP platform, maximize back-office efficiencies, ensure data integrity, and streamline customer relationship management;

•	reducing costs associated with gaseous production, cylinder filling, gas asset utilization and maintenance and distribution logistics; and

•	adding density through organic growth, acquisitions and growing share to complement and expand its business and to leverage its significant national platform.

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ITEM 1A.	RISK FACTORS.

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•	acquired companies may not have internal control structures appropriate for a larger public company, resulting in a need for significant revisions;

•	acquired operations, information systems and products may be difficult to integrate;

•	acquired operations may not achieve targeted synergies;

•	we may not be able to retain key employees, customers and business relationships of acquired companies; and

•	our management team may have its attention and resources diverted from ongoing operations.

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•	If the Merger is not completed, and there are no other parties willing and able to acquire the Company for consideration that is equivalent or more attractive than that in the Merger Agreement, on terms acceptable to us, our stock price may decline.

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We have incurred, and will continue to incur, significant costs, expenses and fees for professional services and other transaction costs in connection with the proposed Merger, for which we will have received little or no benefit if the Merger is not completed. Many of these fees and costs will be payable by us even if the Merger is not completed and may relate to activities that we would not have undertaken other than to complete the Merger.

•	the diversion of significant management time and resources towards the completion of the Merger;

•	the impairment of our ability to retain and hire key personnel, including our senior management;

•	difficulties maintaining relationships with customers, suppliers and others with whom we conduct business;

•	the impairment of our ability to execute on our strategy of growth through acquisitions; and

•	potential litigation relating to the Merger and the costs related thereto.

ITEM 1B.	UNRESOLVED STAFF COMMENTS.

ITEM 2.	PROPERTIES.

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ITEM 3.	LEGAL PROCEEDINGS.

ITEM 4.	MINE SAFETY DISCLOSURES.

ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

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(1)

Consists of shares that were attested to upon the exercise of stock options by participants of the Company’s Second Amended and Restated 2006 Equity Incentive Plan (“Equity Incentive Plan”) in satisfaction of the payment of the exercise of stock options under the plan. During the three months ended March 31, 2016, the Company acquired 7,248 shares of its common stock with an average fair market value per share of $141.81 for the exercise of 12,000 stock options.

(2)

On May 28, 2015, the Company announced plans to purchase up to $500 million of Airgas, Inc. common stock under a stock repurchase program approved by the Company’s Board of Directors. Airgas may repurchase shares from time to time for cash in open market transactions or in privately-negotiated transactions in accordance with applicable federal securities laws. The Company will determine the timing and the amount of any repurchases based on its evaluation of market conditions, share price, and other factors. The stock repurchase program has no pre-established closing date. However, stock repurchases are currently suspended in accordance with the Merger Agreement.

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ITEM 6.	SELECTED FINANCIAL DATA.

(1)

The results for fiscal 2016 include the following: $29.0 million ($18.0 million after tax) or $0.24 per diluted share for costs associated with the Air Liquide merger and $7.0 million (non-tax-deductible) or $0.09 per diluted share for costs accrued related to a Plea Agreement by Airgas Doral, Inc. (“Airgas Doral”), a wholly-owned subsidiary of Airgas, Inc., with the U.S. Attorney’s Office for the Southern District of Florida. See Note 18, “Commitments and Contingencies,” to the Company’s consolidated financial statements under Item 8, “Financial Statements and Supplementary Data” for additional information. During the fiscal year, long term debt increased primarily related to the issuance of the $400 million 3.05% senior notes maturing on August 1, 2020, partially offset by the repayment of the $250 million 3.25% senior notes on September 14, 2015 which were originally due to mature on October 1, 2015.

(2)

The results for fiscal 2014 include the following: $9.1 million ($5.6 million after tax) or $0.08 per diluted share recorded for a loss on the early extinguishment of the Company’s $215 million of 7.125% senior subordinated notes, which were originally due to mature in October 2018 but were redeemed in full on October 2, 2013, as well as $3.3 million or $0.04 per diluted share of state income tax benefits recognized for changes to enacted state income tax rates and a change in a state income tax law. The proceeds from the Company’s commercial paper program were used in part for the early redemption of the senior subordinated notes and repayment of the Company’s $300 million 2.85% senior notes upon their maturity in October 2013, causing the $388 million increase to short-term debt. In addition, the Company reclassified its $400 million 4.5% senior notes maturing in September 2014 to the “Current portion of long-term debt” line item of the Company’s consolidated balance sheet based on the maturity date.

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(3)

The results for fiscal 2013 include the following: $8.1 million ($5.1 million after tax) or $0.07 per diluted share of net restructuring and other special charges and $6.8 million ($5.5 million after tax) or a benefit of $0.07 per diluted share of a gain on the sale of five branch locations in western Canada. The $6.8 million gain on sale of businesses was recorded in the “Other income, net” line item of the Company’s consolidated statement of earnings. Also during fiscal 2013, the Company’s $300 million 2.85% senior notes were reclassified to the “Current portion of long-term debt” line item of the Company’s consolidated balance sheet based on the maturity date. Additionally, during the three months ended March 31, 2013, proceeds from the issuance of an aggregate $600 million of senior notes in February 2013 were used to pay down the balance on the commercial paper program and, as a result, there were no outstanding borrowings under the program at March 31, 2013, resulting in a decrease to short-term debt and an increase in working capital in the table above.

(4)

The results for fiscal 2012 include the following: $24.4 million ($15.6 million after tax) or $0.19 per diluted share of net restructuring and other special charges, $7.9 million ($5.0 million after tax) or $0.06 per diluted share in benefits from lower than previously estimated net costs related to a prior year unsolicited takeover attempt, $4.3 million ($2.7 million after tax) or $0.04 per diluted share in multi-employer pension plan withdrawal charges, and $4.9 million or $0.06 per diluted share of income tax benefits related to the LLC reorganization as well as a true-up of the Company’s foreign tax liabilities. Additionally, during fiscal 2012, the Company commenced a $750 million commercial paper program supported by its revolving credit facility. The Company has used proceeds under the commercial paper program to pay down amounts outstanding under its revolving credit facility and for general corporate purposes. Borrowings under the commercial paper program are classified as short-term debt on the Company’s consolidated balance sheet, which led to a $388 million decrease in both working capital and long-term debt in the table above.

(5)	The Company’s quarterly cash dividends declared and paid to stockholders for the years presented above are disclosed in the following table:

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ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

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(1)	Includes depreciation, amortization, deferred income taxes, gains on sales of plant and equipment, stock-based compensation expense, and losses on the extinguishment of debt.

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(a)	The “Less Than 1 Year” column relates to obligations due in the fiscal year ending March 31, 2017. The “1 to 3 Years” column relates to obligations due in fiscal years ending March 31, 2018 and 2019. The “4 to 5 Years” column relates to obligations due in fiscal years ending March 31, 2020 and 2021. The “More than 5 Years” column relates to obligations due beyond March 31, 2021.

(b)

At March 31, 2016, the Company had $24 million related to unrecognized income tax benefits, including accrued interest and penalties. These liabilities are not included in the above table, as the Company cannot make reasonable estimates with respect to the timing of their ultimate resolution. See Note 6 to the Company’s consolidated financial statements under Item 8, “Financial Statements and Supplementary Data,” for further information on the Company’s unrecognized income tax benefits.

(1)	Aggregate long-term debt instruments are reflected in the consolidated balance sheet as of March 31, 2016. The Senior Notes are presented at their maturity values rather than their carrying values, which are net of aggregate discounts of $1.7 million at March 31, 2016. Long-term debt includes capital lease obligations, which were not material and therefore, did not warrant separate disclosure.

(2)	The future interest payments on the Company’s long-term debt obligations were estimated based on the current outstanding principal reduced by scheduled maturities in each period presented and interest rates as of March 31, 2016.

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(3)	Non-compete agreements are obligations of the Company to make scheduled future payments, generally to former owners of acquired businesses, contingent upon their compliance with the covenants of the non-compete agreements.

(4)	Letters of credit are guarantees of payment to third parties. The Company’s letters of credit principally back obligations associated with the Company’s deductible on workers’ compensation, business automobile and general liability claims. The letters of credit are supported by the Company’s Credit Facility.

(5)	The Company’s operating leases at March 31, 2016 include approximately $330 million in fleet vehicles under long-term operating leases. The Company guarantees a residual value of $32 million related to its leased vehicles.

(6)

In addition to the gas volumes produced internally, the Company purchases industrial, medical and specialty gases pursuant to requirements under contracts from national and regional producers of industrial gases. The Company is a party to take-or-pay supply agreements under which Air Products will supply the Company with bulk nitrogen, oxygen, argon, hydrogen and helium. The Company is committed to purchase a minimum of approximately $61 million in bulk gases within the next fiscal year under the Air Products supply agreements. The agreements expire at various dates through 2020. The Company also has take-or-pay supply agreements with Linde to purchase oxygen, nitrogen, argon and helium. The agreements expire at various dates through 2025 and represent approximately $95 million in minimum bulk gas purchases for the next fiscal year. Additionally, the Company has take-or-pay supply agreements to purchase oxygen, nitrogen, argon, helium and ammonia from other major producers. Minimum purchases under these contracts for the next fiscal year are approximately $36 million and they expire at various dates through 2026. The level of annual purchase commitments under the Company’s supply agreements beyond the next fiscal year vary based on the expiration of agreements at different dates in the future, among other factors.

(7)

The Company is a party to take-or-pay supply agreements for the purchase of liquid carbon dioxide with twelve suppliers that expire at various dates through 2044 and represent minimum purchases of approximately $20 million for the next fiscal year. The purchase commitments for future periods contained in the table above reflect estimates based on fiscal 2016 purchases. The Company believes the minimum product purchases under the agreements are within the Company’s normal product purchases. Actual purchases in future periods under the liquid carbon dioxide supply agreements could differ materially from those presented in the table due to fluctuations in demand requirements related to varying sales levels as well as changes in economic conditions. Certain of the liquid carbon dioxide supply agreements contain market pricing subject to certain economic indices.

(8)	Construction commitments represent long-term agreements with two customers to construct on-site air separation units. The units are located in Calvert City, KY and Tuscaloosa, AL.

(9)	Other purchase commitments represent agreements to purchase property, plant and equipment.

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ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

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(a)	The interest rate on the revolving credit facilities is the weighted average of the variable interest rates on the multi-currency revolving credit line. The variable interest rates on the multi-currency revolving credit line are based on a spread over the Euro currency rate applicable to each foreign currency borrowing under the multi-currency credit line.

(b)	The variable interest rates on the French revolving credit borrowings are based on a spread over the Euro currency rate.

ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

ITEM 9A.	CONTROLS AND PROCEDURES.

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ITEM 9B.	OTHER INFORMATION.

ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

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ITEM 11.	EXECUTIVE COMPENSATION.

(1)	Consists of the aggregate amount of all fees earned or paid in cash for services as a director, consisting of annual Board and committee chair retainers and Board and committee meeting fees earned by non-employee directors, as described above. During the 2016 fiscal year, Mr. Clancey chose to defer his cash compensation as a director under the Deferred Compensation Plan II.

(2)

The amounts shown reflect the grant date fair value of stock options granted during the 2016 fiscal year, computed in accordance with FASB ASC Topic 718. These dollar amounts do not correspond to the actual value that may be realized by the non-employee directors. For information on the valuation assumptions made in the calculation of these amounts, refer to Note 14 to Airgas’ consolidated financial statements for the fiscal year ended March 31, 2016, included in this report. Each non-employee director on the Board at the time was granted an option under the 2006 Equity Plan to purchase 6,300 shares on August 4, 2015 with an exercise price of $102.70 per share. As of March 31, 2016, the following non-employee directors held options to purchase the following number of shares:

a.	Mr. Clancey held 31,682

b.	Mr. Hovey held 45,182

c.	Mr. Ill held 15,800

d.	Mr. Miller held 31,682

e.	Ms. Sneed held 45,182

f.	Mr. Stout held 45,182

g.	Mr. Thomas held 38,682

h.	Mr. van Roden held 45,182

i.	Ms. Wolf held 20,400

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•	the balance between short-term and long-term incentives;

•	accounting standards and testing;

•	the relatively low ratio of incentive pay to the associated financial achievement;

•	separation of duties regarding authority over sales decisions; and

•	incentive compensation limits.

•	Andrew R. Cichocki, Senior Vice President; President-Airgas USA, LLC;

•	Robert A. Dougherty, Senior Vice President and Chief Information Officer;

•	Peter McCausland, Executive Chairman;

•	Robert M. McLaughlin, Senior Vice President and Chief Financial Officer;

•	Michael L. Molinini, President and Chief Executive Officer; and

•	Robert H. Young, Jr., Senior Vice President and General Counsel.

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•	base salary;

•	annual cash incentive awards; and

•	long-term incentive compensation.

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•	Actual cash incentive compensation ranged from 12% to 15% of total compensation.

•	Actual non-cash incentive compensation ranged from 29% to 56%.

•	the executive’s level of responsibilities;

•	the executive’s experience and breadth of knowledge;

•	the executive’s individual performance as assessed through annual performance reviews;

•	the executive’s role in management continuity and development plans;

•	internal equity factors, meaning relative pay differences for different jobs; and

•	on a periodic basis, benchmark data on the compensation practices of peer companies, from available salary survey data and as reported in public company proxy statements.

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•	the Management Bonus Plan for Corporate Management, in which Messrs. Cichocki, Dougherty, McCausland, McLaughlin, Molinini and Young participated during the 2016 fiscal year, is available to all management-level employees who have corporate-wide responsibility.

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Mr. Cichocki’s goals: deliver improvement in personal safety and preventable vehicle accident rates and enhance the Company’s safety and compliance culture; drive gases and rental growth across all modes and all segments; continue multi-year initiative to optimize the four primary Airgas sales channels, consisting of strategic accounts, field sales, telesales, and e-commerce; effectively plan and execute business process improvement initiatives to improve cost and quality of transactional processes; drive acquisitions in the core business; and effectively plan and manage organizational succession changes.

•	Mr. Dougherty’s goals: execute the Security Framework Roadmap to improve the company’s information systems security capabilities; support ongoing SAP and e-commerce platform enhancements; effectively plan and manage organizational succession changes.

•

Mr. McCausland’s goals: deliver improvement in personal safety and preventable vehicle accident rates and enhance the Company’s safety and compliance culture; work with the CEO and President of Airgas USA, LLC to facilitate gases and rental growth; drive business process improvement initiatives; support acquisitions in the core business; and execute on plans for preparing for the senior management succession plan.

•	Mr. McLaughlin’s goals: continue to drive improvement in order-to-cash processes and the effectiveness of the credit and collection functions at the BSCs; deliver SAP enabled benefits; provide leadership to continue to leverage best practices and drive standardization in all areas of financial processing and reporting; and effectively plan and manage organizational succession changes.

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Mr. Molinini’s goals: deliver improvement in personal safety and preventable vehicle accident rates and enhance the Company’s safety and compliance culture; drive gases and rental growth across all modes and all segments; execute plans to generate benefits from business process improvement initiatives; drive acquisitions in the core business; and effectively plan and manage organizational succession changes.

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Mr. Young’s goals: continue to develop and expand the risk management efforts, assuring proper evaluation and reporting of risks; assure compliance with antitrust, foreign corrupt practices, US Department of Transportation and US Food and Drug Administration laws and regulations; assure Airgas is well positioned to remain compliant with federal, state, and local laws and regulations governing Airgas operations; support company efforts to explore growth opportunities through acquisitions; and effectively plan and manage organizational succession changes.

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•	the executive officers to receive awards;

•	the number of shares in each grant to an executive officer;

•	the aggregate number of shares available for Mr. McCausland to grant in stock options to non-executive officers pursuant to his delegated authority; and

•	the terms and conditions of each award.

•	motivate and reward superior performance on the part of executives and key employees;

•	enhance the link between the creation of stockholder value and long-term executive incentive compensation;

•	encourage increased stock ownership in Airgas by executives; and

•	maintain competitive levels of total compensation.

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•	the Airgas, Inc. 401(k) Plan, referred to as the 401(k) Plan;

•	the Deferred Compensation Plan I; and

•	the Deferred Compensation Plan II.

•	the Airgas, Inc. Amended and Restated 2003 Employee Stock Purchase Plan, referred to as the Employee Stock Purchase Plan.

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(1)	Each of the named executive officers contributed a portion of his salary to our 401(k) Plan.

(2)

The amounts shown reflect the aggregate grant date fair value of stock options granted during the 2014, 2015 and 2016 fiscal years, computed in accordance with FASB ASC Topic 718. These dollar amounts do not correspond to the actual value that may be realized by the named executive officers. For information on the valuation assumptions made in the calculation of these amounts, refer to Note 14 to Airgas’ consolidated financial statements for the fiscal

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(3)

The amounts shown reflect cash incentive awards earned by our named executive officers under the stockholder-approved Executive Bonus Plan for performance in fiscal years 2014, 2015 and 2016, based on performance criteria established at the beginning of the 2014, 2015 and 2016 fiscal years by the Governance and Compensation Committee. For officers with corporate-wide responsibilities, including Messrs. Cichocki, Dougherty, McCausland, McLaughlin, Molinini and Young, the Committee established two formulaic performance criteria for the fiscal year - earnings before interest, taxes, depreciation, amortization and special charges (Adjusted EBITDA), and return on capital (ROC). In addition to the awards earned under the stockholder-approved Executive Bonus Plan, a portion of each of their awards is based on achievement of individual performance goals set at the beginning of each fiscal year, and does not rely on formulas for determining the attainment levels. The individual performance goals are related to significant projects or strategic milestones and achievement is assessed following the end of the fiscal year. The amounts shown reflect cash incentive awards earned for the performance period commencing on April 1, 2015 and ending on December 31, 2015, referred to as the 2015 bonus year. Our named executive officers are also eligible to earn a cash incentive award for a performance period commencing on January 1, 2016 and ending on December 31, 2016, the amount of which is not calculable as of the date of this report and is expected to be determined in early 2017 following completion of the applicable performance period.

(4)

Airgas offers its executive officers an opportunity to defer earnings pursuant to the Deferred Compensation Plan II. Until May 31, 2004, Airgas offered its executive officers an opportunity to defer earnings pursuant to the Deferred Compensation Plan I. Under each plan, earnings are calculated in the same manner and at the same rate as earnings on externally-managed, publicly-available mutual funds or on an externally-managed fund tracking Airgas’ common stock. We believe earnings in the deferred compensation plans are not considered above-market or preferential earnings for the purposes of this Summary Compensation Table. Airgas does not offer its executive officers a defined benefit pension plan. See the table under “Nonqualified Deferred Compensation for the 2016 Fiscal Year” later in this report for additional information.

(5)	The amounts shown consist of the following items detailed in the table under “All Other Compensation for the 2016 Fiscal Year”:

(6)	Mr. Cichocki was named Senior Vice President effective August 2014 and has served as President of Airgas USA, LLC since April 2014. Prior to that he served as Senior Vice President of Operations and Business Process Improvement.

(1)

Mr. McCausland reimbursed Airgas $5,808 for incremental costs associated with his personal use of the corporate aircraft. The amount reimbursed reflects the aggregate incremental cost to Airgas as recognized under SEC Regulation S-K. In determining the incremental costs for personal use, we considered fuel, supplies, contracted pilot fees, hangar and landing/ramp fees, excise tax and travel expenses for the flight crew. This amount does not include

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(1)

These columns show the potential value of the payouts for each named executive officer under the Management Bonus Plan for the 2016 fiscal year if the threshold, target or maximum goals had been satisfied for all performance goals. The potential payouts are performance-driven and therefore completely at risk. The performance criteria, performance goals and salary and incentive award percentages for determining the payouts are described under “Compensation Discussion and Analysis - Components of Executive Compensation for the 2016 Fiscal Year - Annual Cash Incentive Awards - Management Bonus Plans” earlier in this report.

(2)	The Governance and Compensation Committee met and approved the grants of stock options under our 2006 Equity Plan to our named executive officers on May 19, 2015. Each of the grants has an exercise price equal to the closing price of our common stock on such date. All of the stock options detailed in the table have a term of eight years.

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(1)	The stock options listed above vest in 25% increments per year over four years. Stock options granted to the named executive officers have eight-year terms, subject to earlier termination or expiration in the event of termination of service or as otherwise set forth in the 2006 Equity Plan.

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(1)

The Employee Stock Purchase Plan, which was approved by our stockholders at the 2003 Annual Meeting of Stockholders and as amended and restated was approved at our 2006 Annual Meeting of Stockholders and as further amended and restated was approved at our 2010 Annual Meeting of Stockholders, encourages and assists employees in acquiring an equity interest in Airgas by allowing eligible employees to purchase common stock at a discount. The Employee Stock Purchase Plan was suspended in fiscal year 2016 in accordance with the terms of the Merger Agreement.

(2)	The 2006 Equity Plan, which was approved by our stockholders at our 2006 Annual Meeting of Stockholders and as amended and restated was approved at our 2009 Annual Meeting of Stockholders, and as further amended and restated was approved at our 2012 Annual Meeting. As of March 31, 2016, only stock options have been granted under the 2006 Equity Plan.

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(1)	Reflects earnings (loss) on balances in the Deferred Compensation Plan I and the Deferred Compensation Plan II. Earnings are from tracking the results of mutual funds and a fund tracking Airgas common stock as selected by the named executive officer from the fund choices offered in each plan.

(1)	Represents a lump-sum payment equal to two times Mr. McCausland’s annual salary.

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(2)	The value of accelerated vesting of stock options is estimated using the in-the-money value as of March 31, 2016, based on a stock price of $141.64.

(3)	The estimated total cost (using COBRA as an example) to Airgas of medical and dental benefits continued for 36 months, including the cost for dependents if covered under the plans at the time of separation. Actual cost may vary.

(1)	Represents the estimated amount of the named executive officer’s prorated bonus for the 2016 calendar year payable in early 2017. Estimate is based on target as actual bonus amount is not calculable as of the date of this report.

(2)	The value of accelerating the vesting of the next tranche of each stock option is estimated using the in-the-money value as of March 31, 2016, based on a stock price of $141.64. If the termination is due to the death of an executive officer, this amount would only be payable if the executive were eligible for retirement at the time of death.

(1)	The value of accelerating the vesting of the next tranche of each stock option is estimated using the in-the-money value as of March 31, 2016, based on a stock price of $141.64.

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(1)	Mr. McCausland would have received the severance payment under his severance agreement (two times his annual base salary) in addition to the severance payment under his change of control agreement (two times his annual base salary plus two times his annual cash incentive bonus last paid to him prior to the change of control).

(2)	The value of accelerated vesting of stock options is estimated using the in-the-money value as of March 31, 2016, based on a stock price of $141.64.

(3)	The estimated total cost (using COBRA as an example) to Airgas of medical and dental benefits continued for 36 months, including the cost for dependents if covered under the plans at the time of separation. Actual costs may vary.

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ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

(1)	The address for all of the directors and executive officers set forth above and Mrs. McCausland is c/o Airgas, Inc., 259 North Radnor-Chester Road, Suite 100, Radnor, Pennsylvania 19087.

(2)	Includes all options and other rights to acquire shares exercisable on or within 60 days of March 31, 2016.

(3)	Includes the following number of shares of our common stock which may be acquired by certain directors, executive officers and 5% stockholders through the exercise of options that were exercisable as of March 31, 2016 or became

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(4)	Investment and/or voting power with respect to 4,629,535 of such shares are shared with, or under the control of, Mr. McCausland’s spouse, Bonnie McCausland, 1,276,249 shares are held by a charitable foundation of which Mr. McCausland is an officer and director, and 15,700 shares are held in Mr. McCausland’s individual IRA account.

(5)	Includes the following shares of our common stock held under our 401(k) Plan as of March 31, 2016: Mr. McCausland, 52,270 shares; Mr. Dougherty, 1,225 shares; Mr. McLaughlin, 769 shares; and all executive officers as a group, 67,052 shares.

(6)	2,118,045 of such shares, together with other non-Airgas marketable securities, having an approximate aggregate value of  $300 million as of March 31, 2016, are pledged as collateral for a $150 million line of credit (which had, on March 31, 2016, an approximate principal balance of approximately $118 million) with a brokerage firm.

(7)	Investment and/or voting power with respect to 4,629,535 of such shares are shared with, or under the control of, Mrs. McCausland’s spouse, Peter McCausland, 1,276,249 shares are held by a charitable foundation of which Mrs. McCausland is an officer and director, and 1,500 shares are held in Mrs. McCausland’s individual IRA account.

(8)	Includes 69,240 shares held by an irrevocable defective grantor trust under which he holds voting and dispositive power and 10 shares held in two accounts under the Pennsylvania Uniform Transfer to Minors Act, for which Mr. Hovey is the custodian.

(9)	Includes 16,250 shares held by a charitable foundation of which Mr. Thomas and his spouse are directors/trustees and over which Mr. Thomas and his spouse share investment and voting power.

(10)	Includes 3,000 shares owned by a general partnership of which Mr. van Roden is a 0.5% owner and a general partner.

(11)	Includes 813,020 shares held in two trusts of which Mr. van Roden is a co-trustee; 500,000 shares held by a grantor retained annuity trust of which Mr. McCausland is the settlor and of which Mr. van Roden is a co-trustee; and 500,000 shares held by a grantor retained annuity trust of which Mrs. McCausland is the settlor and of which Mr. van Roden is a co-trustee.

(12)	Investment and/or voting power with respect to 70,369 of such shares are shared with, or under the control of, Mr. Cichocki’s spouse.

(13)	49,159 of such shares are pledged as collateral for a $2,578,000 line of credit in a loan management account (for which, on March 31, 2016, there was no outstanding balance) with a brokerage firm.

(14)

On December 21, 2015, Air Liquide filed a Schedule 13D/A in connection with entering into the amended and restated voting and support agreement, dated December 17, 2015, with Peter McCausland, Bonnie McCausland and certain other Airgas stockholders identified in the agreement (the “Stockholders”). As a result of entering into the agreement, Air Liquide may be deemed to have acquired beneficial ownership of 6,735,975 shares of our common stock, which are either owned directly by the Stockholders or over which they have the power to vote or dispose. Air Liquide disclaims that it constitutes a “group” (within the meaning of Section 13(d)(3) of the Exchange Act) with any of the Stockholders and, pursuant to Rule 13d-4 under the Exchange Act, disclaims beneficial ownership of any shares of our common stock beneficially owned by the Stockholders or any of their affiliates including, without limitation, the shares of common stock subject to the amended and restated voting and support agreement.

(15)

Vanguard Fiduciary Trust Company, a wholly-owned subsidiary of The Vanguard Group, Inc. (“VFTC”), Vanguard Investments Australia, Ltd. a wholly-owned subsidiary of The Vanguard Group, Inc. (“VIA”) and The Vanguard Group, Inc. jointly filed a Schedule 13G/A on February 10, 2016. Airgas has relied upon the beneficial ownership disclosed therein in making this disclosure. VFTC is the beneficial owner of 101,147 shares of Airgas common stock as a result of its serving as an investment manager of Vanguard-related collective trust accounts and VIA is the beneficial owner of 47,800 shares of Airgas common stock as a result of its serving as investment manager of Vanguard-related Australian investment offerings. The Vanguard Group, Inc. has sole voting power as to 121,647 shares, shared voting power as to 6,100 shares, sole dispositive power as to 5,952,174 shares and shared dispositive power as to 128,447 shares.

(16)	In addition to shares pledged by named executive officers and beneficial owners of more than 5% of our common stock, 21,022 of such shares are pledged as collateral for outstanding loans under cash management (margin) accounts with brokerage firms.

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ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

•	the nature of the related person’s interest in the transaction;

•	the material terms of the transaction, including, without limitation, the amount and type of transaction;

•	the importance of the transaction to the related person;

•	the importance of the transaction to Airgas;

•	whether the transaction would impair the judgment of a director or executive officer to act in the best interest of Airgas; and

•	any other matters the Committee deems appropriate.

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•	the director is a current partner or employee of the Company’s independent auditor;

•	an immediate family member of the director is a current partner of the Company’s independent auditor; or

•	an immediate family member of the director is a current employee of the Company’s independent auditor and participates in the firm’s audit, assurance or tax compliance (but not tax planning) practice.

•	the director was employed by the Company;

•	an immediate family member of the director was employed by the Company as an executive officer;

•	the director, or an immediate family member of the director, received more than $100,000 per year in direct compensation from the Company (other than director’s fees and pension or other forms of deferred compensation for prior service with the Company);

•	the director was (but is not currently) a partner with or employed by the Company’s independent auditor and worked on the Company’s audit within such three years;

•	an immediate family member of the director was (but is not currently) a partner with or employed by the Company’s independent auditor and worked on the Company’s audit within such three years; or

•	an executive officer of the Company was on the compensation committee of the board of directors of a company that employed either the director or an immediate family member of the director as an executive officer.

•	a director is a current employee, or a director’s immediate family member is a current executive officer, of another company that has made payments to, or received payments from, the Company for property or services in an amount

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•	a director or a director’s immediate family member is an executive officer of another company in which the Company owns a common stock interest, and the amount of the common stock interest is less than 5% of the total shareholders’ equity of the company for which the director serves as an executive officer; or

•	a director or a director’s immediate family member serves as an officer, director or trustee of a tax exempt organization, and the Company’s contributions to the organization in any single fiscal year are less than the greater of (a) $1,000,000 or (b) 2% of that organization’s gross revenues.

ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES.

ITEM 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

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*	Indicates a management contract or compensatory plan.

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(a)	Includes cash paid, net of cash acquired, for current year acquisitions as well as payments for the settlement of holdback liabilities and contingent consideration arrangements associated with prior year acquisitions.

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(a)	Includes cash paid, net of cash acquired, for current year acquisitions as well as payments for the settlement of holdback liabilities and contingent consideration arrangements associated with prior year acquisitions.

(b)	Represents 41,060 shares of Airgas, Inc. common stock issued in connection with a single acquisition. The fair value of the shares issued as part of the consideration for the acquisition was determined based on the closing sales price of Airgas, Inc. common stock on the acquisition date.

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(a)	Includes cash paid, net of cash acquired, for current year acquisitions as well as payments for the settlement of holdback liabilities and contingent consideration arrangements associated with prior year acquisitions.

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(a)	Includes acquisitions completed during the respective year and adjustments made to prior year acquisitions.

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(a)

With respect to the business insurance reserves above, the Company had corresponding insurance receivables of $9.9 million at March 31, 2016 and $11.6 million at March 31, 2015, which are included within the “Prepaid expenses and other current assets” line item on the Company’s consolidated balance sheets. The insurance receivables represent the balance of probable claim losses in excess of the Company’s deductible for which the Company is fully insured.

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(a)	On September 14, 2015, the Company redeemed in full its 2015 Notes senior notes originally due to mature on October 1, 2015.

(b)	On August 11, 2015, the Company issued the 2020 B Notes. The net proceeds from the sale of the 2020 Notes were used for general corporate purposes, including to fund acquisitions, to repay indebtedness and to repurchase shares pursuant to the Company’s stock repurchase program. Interest payments on the 2020 Notes commenced on February 1, 2016.

(c)	The 2016 Notes are included within the “Current portion of long-term debt” line item on the Company’s consolidated balance sheet based on the maturity date.

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(a)	Outstanding borrowings under the Securitization Agreement at March 31, 2016 are reflected as maturing at the agreement’s expiration in December 2018.

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•	Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities at the measurement date.

•	Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable, directly or indirectly through corroboration with observable market data at the measurement date.

•	Level 3 inputs are unobservable inputs that reflect management’s best estimate of the assumptions (including assumptions about risk) that market participants would use in pricing the asset or liability at the measurement date.

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(a)

The reclassifications out of AOCI were associated with a loss on a treasury rate lock agreement from July 2010 related to the issuance of the Company’s 2015 Notes, which was being reclassified into earnings (interest expense) over the term of the 2015 Notes until their redemption in September 2015. The effects on the respective line items of the consolidated statements of earnings impacted by the reclassifications were not material for the twelve months ended March 31, 2016, 2015 and 2014.

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(a)	Includes cash paid, net of cash acquired, for current year acquisitions as well as payments for the settlement of holdback liabilities and contingent consideration arrangements associated with prior year acquisitions.

(b)	Represents shares of Airgas, Inc. common stock issued in connection with a single prior year acquisition.

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(a)	Amounts in the “Eliminations and Other” column represent the elimination of intercompany sales and associated gross profit on sales from the Company’s All Other Operations business segment to its Distribution business segment.

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(a)	Earnings per share calculations for each of the quarters are based on the weighted average number of shares outstanding in each quarter. Therefore, the sum of the quarterly earnings per share does not necessarily equal the full year earnings per share disclosed on the consolidated statements of earnings.

(b)	Operating income includes the following items:

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