AIRGAS, INC.

FORM 10-Q

June 30, 2006

INDEX

PART I. FINANCIAL INFORMATION

AIRGAS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)

(In thousands, except per share amounts)

See accompanying notes to consolidated financial statements.

AIRGAS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)

See accompanying notes to consolidated financial statements.

AIRGAS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

See accompanying notes to consolidated financial statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

      The consolidated financial statements include the accounts of Airgas, Inc. and its subsidiaries (the “Company”), as well as the Company’s consolidated affiliate, National Welders. Intercompany accounts and transactions, including those between the Company and National Welders, are eliminated in consolidation. The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. These statements do not include all disclosures required for annual financial statements. These financial statements should be read in conjunction with the more complete disclosures contained in the Company’s audited consolidated financial statements for the fiscal year ended March 31, 2006.

      The preparation of financial statements requires the use of estimates. The consolidated financial statements reflect, in the opinion of management, reasonable estimates and all adjustments necessary to present fairly the Company’s financial position, results of operations and cash flows for the periods presented. The interim operating results are not necessarily indicative of the results to be expected for an entire year.

      As described in Note 3, the Company divested its subsidiary, Rutland Tool & Supply Co. (“Rutland Tool”), in December 2005. As a result, Rutland Tool has been reclassified in the Consolidated Statement of Earnings for the three months ended June 30, 2005 as discontinued operations. The Consolidated Statement of Cash Flows for the three months ended June 30, 2005 was not reclassified because the cash flows of Rutland Tool were not significant.

      In November 2004, the Financial Accounting Standards Board (“FASB”) issued SFAS 151, Inventory Costs, as an amendment to the guidance provided on Inventory Pricing in FASB Accounting Research Bulletin 43. SFAS 151 clarifies the accounting for abnormal amounts of idle facility expense, freight, handling costs and wasted material. This statement requires that if the costs associated with the actual level of spoilage or production defects are greater than the normal range of spoilage or defects, the excess costs should be charged to current period expense. The Company adopted SFAS 151 effective April 1, 2006, as required. Since the Company performs limited manufacturing, the adoption of SFAS 151 did not have a material impact on its results of operations, financial position or liquidity.

      In December 2004, the FASB issued SFAS 153, Exchanges of Nonmonetary Assets, as an amendment to APB Opinion 29, Accounting for Nonmonetary Transactions. SFAS 153 requires nonmonetary exchanges to be accounted for at fair value, recognizing any gains or losses, if the fair value is determinable within reasonable limits and the transaction has commercial substance. The Company adopted SFAS 153 effective April 1, 2006, as required. The adoption of SFAS 153 did not have a material impact on its results of operations, financial position or liquidity.

      On June 1, 2005, the FASB issued SFAS 154, Accounting Changes and Error Corrections, which requires retrospective application to prior periods’ financial statements of voluntary changes in accounting principle, unless it is impractical to do so. The Company adopted SFAS 154 effective April 1, 2006, as required.

AIRGAS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

      Effective April 1, 2006, the Company adopted Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment, (“SFAS 123R”), which superseded Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, (“APB 25). SFAS 123R requires that grants of employee stock options, including options to purchase shares under employee stock purchase plans, be recognized as compensation expense based on their fair values. The Company adopted SFAS 123R using the “modified prospective” method in which compensation cost is recognized from the date of adoption forward for both new awards and the portion of any previously granted awards that vest after the date of adoption. Prior periods are not restated under the modified prospective method of adoption. Prior to April 1, 2006, the Company accounted for its stock-based compensation using the intrinsic value method outlined in APB 25, which provides that compensation expense is recorded on the date of grant only if the current market price of the underlying stock exceeds the exercise price. Accordingly, since the Company does not grant options with exercise prices lower than the market price on the date of grant, no stock-based employee compensation expense was reflected in net earnings prior to the date of adoption. See Note 12 for additional disclosures associated with the adoption of SFAS 123R.

      In November 2005, the FASB issued FSP No. FAS 123(R)-3, Transition Election Related to Accounting for the Tax Effects of Share-Based Payment Awards. This FAS provides an elective alternative simplified method for calculating the pool of excess tax benefits available to absorb tax deficiencies recognized subsequent to the adoption of SFAS 123R and reported in the Consolidated Statements of Cash Flows. Companies may take up to one year from the effective date of the FSP to evaluate the available transition alternatives and make a one-time election as to which method to adopt. Based on the FSP effective date, the Company must decide on its method of adoption no later than the third quarter of fiscal 2007. The Company is currently in the process of evaluating the alternative methods of adoption.

(a) Acquisition

      During the three months ended June 30, 2006, the Company completed one acquisition with annual sales of approximately $13 million. Costs in excess of net assets acquired (“goodwill”) related to the acquisition totaled approximately $260 thousand.

(b) Divestiture

      On December 1, 2005, the Company sold its Rutland Tool & Supply Co. (“Rutland Tool”) subsidiary. Rutland Tool distributed metalworking tools, machine tools and MRO supplies from seven locations and had approximately 180 employees. The results of Rutland Tool for the three months ended June 30, 2005 have been reclassified in the Consolidated Statement of Earnings as “discontinued operations.” The consolidated Statement of Cash Flows was not reclassified to reflect discontinued operations because the cash flows of Rutland Tool were not significant.

      The net sales and operating income for the three months ended June 30, 2005, which were segregated and reported as discontinued operations, were $13 million and $304 thousand, respectively.

AIRGAS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

      Basic earnings per share is calculated by dividing net earnings by the weighted average number of shares of the Company’s common stock outstanding during the period. Outstanding shares consist of issued shares less treasury stock and common stock held by the Employee Benefits Trust. Diluted earnings per share is calculated by dividing net earnings by the weighted average common shares outstanding adjusted for the dilutive effect of common stock equivalents related to stock options and the Company’s Employee Stock Purchase plan. The calculation of diluted earnings per share also assumes the conversion of National Welders’ preferred stock to Airgas common stock.

      The table below presents the computation of basic and diluted earnings per share for the three months ended June 30, 2006 and 2005:

AIRGAS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

AIRGAS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

      The Company participates in a securitization agreement with two commercial banks to sell up to $250 million of qualifying trade receivables. The agreement will expire in May 2009, but may be renewed subject to renewal provisions contained in the agreement. During the three months ended June 30, 2006, the Company sold, net of its retained interest, $598 million of trade receivables and remitted to bank conduits, pursuant to a servicing agreement, $608 million in collections on those receivables. The amount of outstanding receivables under the agreement was $234 million at June 30, 2006 and $244 million at March 31, 2006.

      The transaction has been accounted for as a sale under the provisions of Statement of Financial Accounting Standards No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. Under the securitization agreement, eligible trade receivables are sold to bank conduits through a bankruptcy-remote special purpose entity, which is consolidated for financial reporting purposes. The difference between the proceeds from the sale and the carrying value of the receivables is recognized as “Discount on securitization of trade receivables” in the accompanying Consolidated Statements of Earnings and varies on a monthly basis depending on the amount of receivables sold and market rates. The Company retains a subordinated interest in the receivables sold, which is recorded at the receivables’ previous carrying value. Subordinated retained interests of approximately $70 million and $63 million are included in “Trade receivables” in the accompanying Consolidated Balance Sheets at June 30, 2006 and March 31, 2006, respectively. The Company’s retained interest is generally collected within 60 days. On a monthly basis, management measures the fair value of the retained interest at management’s best estimate of the undiscounted expected future cash collections on the transferred receivables. Changes in the fair value are recognized as bad debt expense. Actual cash collections may differ from these estimates and would directly affect the fair value of the retained interest. In accordance with a servicing agreement, the Company continues to service, administer and collect the trade receivables on behalf of the bank conduits. The servicing fees charged to the bank conduits approximate the costs of collections.

      Inventories, net, consist of:

      Net inventories determined by the LIFO inventory method totaled $36 million at June 30, 2006 and $37 million at March 31, 2006. If the FIFO inventory method had been used for these inventories, the carrying value would have been approximately $6 million higher at both June 30, 2006 and March 31, 2006. Substantially all of the inventories are finished goods.

AIRGAS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

      Accrued expenses and other current liabilities include:

      The Company manages its exposure to changes in market interest rates. The Company’s involvement with derivative instruments is limited to highly effective fixed interest rate swap agreements used to manage well-defined interest rate risk exposures. The Company monitors its positions and credit ratings of its counterparties and does not anticipate non-performance by the counterparties. Interest rate swap agreements are not entered into for trading purposes.

      At June 30, 2006, the Company had six fixed interest rate swap agreements with a notional amount of $150 million. Two of the swaps effectively convert $50 million of variable interest rate debt associated with the Company’s credit facilities to fixed rate debt. The remaining four swaps hedge $100 million of variable cash flow associated with the sale of trade receivables under the Company’s trade receivable securitization. At June 30, 2006, these swap agreements required the Company to make fixed interest payments based on a weighted average effective rate of 4.98% and receive variable interest payments from its counterparties based on a weighted average variable rate of 5.08%. The remaining terms of each of these swap agreements are between 2 and 3 years.

      National Welders entered into a swap agreement with a major financial institution with a notional principal amount of $27 million. The swap agreement is for 3 years and requires National Welders to make fixed interest payments of 5.36% and receive variable interest payments from its counterparty based on one month LIBOR, which was 5.27% at June 30, 2006.

      During the three months ended June 30, 2006, the Company and National Welders recorded a net increase in the fair value of the fixed interest rate swap agreements and a corresponding increase to “Accumulated Other Comprehensive Income” of approximately $473k. Including the effect of the interest rate swap agreements and the trade receivables securitization, the Company’s ratio of fixed to variable interest rates was approximately 65% fixed to 35% variable at June 30, 2006.

AIRGAS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

      The valuations of goodwill and other intangible assets of recent acquisitions are based on preliminary estimates of fair value and are subject to revision as the Company finalizes appraisals and other analyses. Changes in the net carrying amount of goodwill for the three months ended June 30, 2006 were as follows:

      Other intangible assets amounted to $27.7 million and $26.2 million (net of accumulated amortization of $45.4 million and $43.8 million) at June 30, 2006 and March 31, 2006, respectively. These intangible assets primarily consist of acquired customer lists amortized over 7 to 11 years and non-compete agreements entered into in connection with business combinations amortized over the term of the agreements, principally five years. There are no expected residual values related to these intangible assets. Intangible assets also include a trade name with an indefinite useful life valued at $1 million acquired in the BOC acquisition. Estimated remaining fiscal year amortization expense in millions is as follows: remainder of 2007 — $4.7 million; 2008 — $4.2 million; 2009 — $3.6 million; 2010 — $3.3 million; 2011 — $3.0 million; and $7.9 million thereafter.

      In June 2005, National Welders entered into an agreement with its preferred stockholders under which the preferred stockholders prepaid their $21 million note receivable owed to National Welders. National Welders used the proceeds from the prepayment of the preferred stockholders’ note to repay its $21 million Term Loan B, which had been collateralized by the preferred stockholders’ note.

AIRGAS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

      Changes in stockholders’ equity were as follows:

AIRGAS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

      The Company adopted SFAS 123R effective April 1, 2006 using the modified prospective method. Under the modified prospective method, stock-based compensation recognized since the date of adoption includes: (a) any share-based payments granted subsequent to the date of adoption; and (b) any portion of share-based payments granted prior to the date of adoption that vests subsequent to the date of adoption. Prior periods have not been restated.

      The Company recorded stock-based compensation in the three months ended June 30, 2006 of $2.7 million ($2 million after tax), or $0.02 per diluted share. The pre-tax compensation expense was included in Selling, Distribution and Administrative expenses in the Consolidated Statement of Earnings. The stock-based compensation expense related to stock options and options to purchase common stock under the Employee Stock Purchase Plan.

Prior Period Pro Forma Earnings

      The following table presents the effect on net earnings and earnings per share if the Company had applied the fair value recognition provisions of SFAS 123R in the prior year period:

Stock Option Plans

      The Company’s 1997 Stock Option Plan (the “Employee Plan”) provides for the granting of stock options to key employees. Stock options granted under the Employee Plan are granted with an exercise price equal to the closing market price on the date of grant and vest 25% annually on the anniversary of the grant date. Stock options granted prior to April 1, 2006 under the Employee Plan have a maximum term of ten years, while stock options granted subsequent to April 1, 2006 have a maximum term of eight years. Stock options under the Employee Plan are generally granted in May of each year. A total of 927 thousand options were granted during the three months ended June 30, 2006. A total of 11.2 million shares of common stock are reserved for issuance under the Employee Plan upon the exercise of stock options and the issuance of restricted stock, of which 1.1 million remained available at June 30, 2006.

AIRGAS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

      The Company’s 1997 Directors’ Stock Option Plan (the “Directors’ Plan”) provides for the granting of stock options to non-employee directors of the Company. Stock options granted under the Directors’ Plan vest on the date of grant. Stock options granted prior to April 1, 2006 under the Directors’ Plan have a maximum term of ten years, while stock options to be granted subsequent to April 1, 2006 will have a maximum term of eight years. No stock options were granted under the Directors’ Plan in the three months ended June 30, 2006. A total of 800 thousand shares of common stock are reserved for issuance under the Directors’ Plan upon the exercise of stock options, of which 222 thousand remained available at June 30, 2006.

      The Company either issues new shares of its common stock to satisfy stock option exercises or issues shares from treasury stock. During the three months ended June 30, 2006, all of the stock option exercises were satisfied with the issuance of new shares of Company common stock.

2006 Equity Incentive Plan

      The Company is seeking approval from its stockholders of the 2006 Equity Incentive Plan (the “Equity Plan”) at the 2006 Annual Meeting of Stockholders. If approved, the Equity Plan shall succeed both the Company’s existing Employee Plan and Directors’ Plan. Outstanding stock options and stock options available for grant under the existing stock option plans will be incorporated into the Equity Plan. Future grants of stock options to employees and directors will then be issued from the Equity Plan. In addition, the number of shares of common stock reserved for issuance under the Equity Plan will be increased by 3.2 million shares.

Fair Value

      The Company utilizes the Black-Scholes option pricing model to determine the fair value of stock options under SFAS 123R, which is consistent with that used for pro forma disclosures in prior periods. The weighted-average grant date fair value of stock options granted during the three months ended June 30, 2006 and 2005 was $13.74 and $9.34, respectively. In the three months ended June 30, 2006, the Company recognized stock-based compensation expense associated with stock options of approximately $1.9 million. The following assumptions were used by the Company in valuing the stock option grants issued in the periods presented:

      The expected volatility was determined based on anticipated changes in the underlying stock price over the expected term using a weighting of historical and implied volatility. The expected dividend yield was based on the Company’s history and expectation of future dividend payouts. The expected term represents the period of time that the options are expected to be outstanding prior to exercise or forfeiture. The expected term was determined based on historical exercise patterns. The risk-free interest rate was based on U.S. Treasury rates in effect at the time of grant commensurate with the expected term.

AIRGAS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Summary of Stock Option Activity

Employee Plan

      The following table summarizes the activity of the Employee Plan during the three months ended June 30, 2006:

      The aggregate intrinsic value represents the difference between the Company’s closing stock price on June 30, 2006 of $37.25 and the weighted-average exercise price multiplied by the number of stock options outstanding as of that date. The total intrinsic value of stock options exercised during the three months ended June 30, 2006 was $4.5 million.

      As of June 30, 2006, $24.7 million of total unrecognized compensation expense related to non-vested stock options is expected to be recognized over a weighted-average period of 3 years.

      The following table summarizes the activity of the Directors’ Plan during the three months ended June 30, 2006:

      The total intrinsic value of stock options exercised during the three months ended June 30, 2006 was $205 thousand.

      Since the stock options granted under the Directors’ Plan vest immediately upon grant, there were no non-vested stock options and no unrecognized compensation expense at June 30, 2006.

AIRGAS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Employee Stock Purchase Plan

      The Company has an Employee Stock Purchase Plan (the “ESPP”) to encourage and assist employees in acquiring an equity interest in the Company. The ESPP is authorized to issue up to 1.5 million shares of Company common stock, of which 106 thousand was available for issuance at June 30, 2006. Based on the limited number of shares remaining under the ESPP, the Company is seeking approval from its stockholders at the 2006 Annual Meeting of Stockholders for an amended and restated ESPP. If the amended and restated ESPP is approved, the ESPP will be authorized to issue up to 3.5 million shares of Company common stock.

      Under the terms of the ESPP, eligible employees may elect to have up to 15% of their annual gross earnings withheld to purchase common stock at 85% of the market value. Employee purchases are limited in any calendar year to an aggregate market value of $25,000. Market value under the ESPP is defined as either the closing share price on the New York Stock Exchange as of an employee’s enrollment date or the closing price on the first business day of a fiscal quarter when the shares are purchased, whichever is lower. An employee may lock-in a purchase price for up to 12 months. The ESPP effectively resets at the beginning of each fiscal year at which time employees are re-enrolled in the plan and a new 12-month purchase price is established. The ESPP is designed to comply with the requirements of Sections 421 and 423 of the Internal Revenue Code. During the three months ended June 30, 2006 and 2005, the Company granted 94 thousand and 533 thousand options to purchase common stock under the ESPP, respectively. Should the stockholders approve the amended and restated ESPP, employees will receive a new enrollment date and a new purchase price.

      Compensation expense under SFAS 123 is measured based on the fair value of the employees’ option to purchase shares of common stock at the grant date and is recognized over the future periods in which the related employee service is rendered. The fair value per share of options granted under the ESPP was $8.36 and $5.57 for the three months ended June 30, 2006 and 2005, respectively. In the three months ended June 30, 2006, the Company recognized stock-based compensation expense associated with the ESPP of $785 thousand. The fair value of the employees’ option to purchase shares of common stock was estimated using the Black-Scholes model. The following assumptions were used by the Company in valuing the employees’ option to purchase shares of common stock under the ESPP:

AIRGAS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

      The following table summarizes the activity of the ESPP during the three months ended June 30, 2006:

Litigation

      The Company is involved in various legal and regulatory proceedings that have arisen in the ordinary course of its business and have not been fully adjudicated. These actions, when ultimately concluded and determined, will not, in the opinion of management, have a material adverse effect upon the Company’s consolidated financial position, results of operations or liquidity.

AIRGAS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

      As disclosed in Note (1) Basis of Presentation and Note (3) Acquisition and Divestiture, the Company sold its subsidiary Rutland Tool, which was previously reported in the Distribution segment in December 2005. For the three months ended June 30, 2005, the operating results of Rutland Tool have been reclassified in the Consolidating Statement of Earnings as discontinued operations. Information related to the Company’s continuing operations by business segment for the three months ended June 30, 2006 and 2005 is as follows:

      Cash paid for interest and income taxes was as follows:

AIRGAS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

      Cash flows, in excess of a management fee, associated with the Company’s consolidated affiliate, National Welders, are not available for the general use of the Company. Rather these cash flows are used by National Welders for operations, capital expenditures, acquisitions, and to satisfy financial obligations, which are non-recourse to the Company. The following reflects the sources and uses of cash associated with National Welders for each period presented:

Debt Refinancing

      Effective July 25, 2006, the Company amended and restated its senior credit facility with a syndicate of lenders dated January 15, 2005, (the “2005 Agreement”), which would have matured on January 14, 2010 and permitted the Company to borrow up to $430 million. The new $1.6 billion unsecured senior credit facility (the “Credit Agreement”) consists of a US$966 million and a C$40 million (US$34 million) revolving credit lines and two deferred draw term loans totaling $600 million. The Company intends to use borrowings under the revolving credit lines for working capital, acquisitions and general corporate purposes. A $100 million term loan may only be used to refinance the Company’s 7.75% medium-term notes due on September 15, 2006. A $500 million term loan may only be used to finance certain contemplated acquisitions. If the contemplated acquisitions are not completed, the outstanding commitment for the unused portion of the $500 million term loan will expire in May 2007. The revolving credit line matures on July 25, 2011. The term loans will be payable in periodic installments from the dates they are executed through July 25, 2011. The Company’s initial borrowings under the Credit Agreement totaled $191 million. The current interest rate on borrowings under the Credit Agreement is LIBOR plus 75 basis points, which is down from LIBOR plus 95 basis points under the 2005 Agreement. The interest rate under the Credit Agreement may increase or decrease based on the Company’s credit rating.

      The covenants under the Credit Agreement are generally similar to those in the 2005 Agreement and include certain leverage ratios, which could potentially restrict additional borrowings. Additional borrowing capacity under the Credit Agreement consists of the $100 million term loan restricted to refinancing the Company’s medium term notes, the $500 million term loan restricted to financing certain contemplated acquisitions, and the US and Canadian revolving credit lines limited by certain leverage ratios to approximately $550 million of additional borrowing capacity. The Credit Agreement also contains customary events of default, including nonpayment and breach of covenants. In the event of default, repayment of borrowings under the Credit Agreement may be accelerated.

AIRGAS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

      Subsidiary guarantees under the Credit Agreement are identical to the guarantees under the 2005 Credit Agreement. The Company’s domestic subsidiaries, exclusive of a bankruptcy remote special purpose entity (the “domestic guarantors”), guarantee the U.S. and Canadian borrowings. The Canadian borrowings are also guaranteed by the Company’s foreign subsidiaries. The guarantees are full and unconditional and are made on a joint and several basis. The Company has pledged 100% of the stock of its domestic subsidiaries and 65% of the stock of its foreign subsidiaries as surety for its obligations under the Credit Agreement. The Credit Agreement provides for the release of the guarantees and collateral if the Company attains an investment grade credit rating and a similar release on all other debt.

Acquisition Agreement

     On August 7, 2006, the Company announced that it reached an agreement to acquire the assets and operations of Aeriform Corporation. Aeriform Corporation is an independent distributor of packaged gases and related hardgoods products with 29 locations along the Gulf Coast and Mid South regions of the United States. The operations to be acquired have about 240 employees and generate annual sales of approximately $65 million. The transaction is expected to close by September 1, 2006, subject to due diligence, customary closing conditions, and regulatory approvals.

      The obligations of the Company under its senior subordinated notes (“the Notes”) are guaranteed by the Company’s domestic subsidiaries (the “Guarantors”). The guarantees are made fully and unconditionally on a joint and several basis. The Company’s consolidated affiliate, foreign holdings and bankruptcy remote special purpose entity (the “Non-guarantors”) are not guarantors of the Notes. The claims of the creditors of the Non-guarantors have priority over the rights of the Company to receive dividends or distributions from the Non-guarantors.

      Presented below is supplementary condensed consolidating financial information for the Company, the Guarantors and the Non-guarantors as of June 30, 2006 and March 31, 2006 and for the three months ended June 30, 2006 and 2005. As disclosed in Note (3) Acquisition and Divestiture, the Company sold its subsidiary Rutland Tool in December 2005. Accordingly, the operating results of Rutland Tool, which was a guarantor of the Company’s senior subordinated notes, have been reclassified in the Consolidating Statements of Earnings as discontinued operations for the three months ended June 30, 2005.

AIRGAS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Condensed Consolidating Balance Sheet

June 30, 2006

AIRGAS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Condensed Consolidating Balance Sheet

March 31, 2006

AIRGAS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Consolidating Statement of Earnings

Three Months Ended

June 30, 2006