What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-11-22 compared with 2021-11-18 · 418 added, 427 removed, 1647 unchanged (34% of the section changed)

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Management's Report on Internal Control Over Financial Reporting

Report of Deloitte & Touche LLP, Independent Registered Public Accounting Firm

Report of Deloitte & Touche LLP, Independent Registered Public Accounting Firm (PCAOB ID No.

Consolidated Income Statements – Fiscal Years Ended 30 September 2022, 2021, and 2020

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(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

(ii) provide reasonable assurance that the transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S.

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S.

generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company;

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These arrangements may require greater judgment in determining when contractual requirements have been met, impacting the timing and amount of revenue to be recorded.

We identified revenue recognition for certain on-site industrial gas customer contracts with complex terms and provisions as a critical audit matter because of the judgments necessary for management to evaluate these contract terms, including amendments, when determining the amount of revenue to be recognized.

This required a high degree of auditor judgment when performing procedures to audit management’s identification and assessment of contract terms when determining the amount and timing of revenue recognition and evaluating the results of those procedures.

We identified revenue recognition for certain on-site industrial gas customer contracts with complex terms and provisions as a critical audit matter because of the judgments necessary for management to evaluate these contract terms, including amendments, in order to determine the amount of revenue to be recognized.

This required a high degree of auditor judgment when performing procedures to audit management’s determination of the amount and timing of revenue recognition and evaluating the results of those procedures.

How the Critical Audit Matter Was Addressed in the Audit

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• We evaluated the terms included within original customer contracts and related amendments to assess the accounting for provisions such as minimum payment requirements, pricing provisions, settlement terms, and variable components that require management to apply judgment in determining revenue recognition associated with the contract.

• We evaluated customer transactions and agreed the amount of revenue recognized to underlying contracts, customer invoices, and cash receipts.

• We tested the probability of collection of variable components, including penalties, which impacts the amount and timing of revenue which the Company expects to collect.

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• We considered the nature of transactions with related parties and any potential impact on revenue recognition.

• We evaluated customer transactions and agreed the amount of revenue recognized to underlying contracts, customer invoices, and cash receipts.

• We considered customer payment history, subsequent events, write-offs of customer receivables, collectability, modification of contract terms, and other factors that could impact the amount and timing of revenue recognition.

Revenue Recognition – Cost Incurred Input Method – Refer to Notes 1 and 4 to the Financial Statements

Investments in Joint Ventures – Consolidation Accounting – Refer to Notes 1, 7, and 22 to the Financial Statements

Critical Audit Matter Description

The Company enters into sale of equipment contracts with customers for which the promised goods or services contained within the contracts are integrated with or dependent upon other goods or services for a single output to the customer.

Revenue from the sale of equipment contracts is generally recognized over time as the Company has an enforceable right to payment for performance, as completed, and performance under the contract terms does not create an asset with an alternative use.

The Company uses a cost incurred input method to recognize revenue by which costs incurred to date relative to total estimated costs at completion are used to measure progress toward satisfying performance obligations.

Accounting for contracts using the cost incurred input method requires a high degree of judgment to estimate total costs used to recognize revenue.

Changes in estimated costs could have a significant impact on the timing of revenue recognition.

Auditing these estimates requires extensive audit effort due to the complexity around the cost estimation process which involves multiple inputs and variables for sale of equipment contracts and a high degree of auditor judgment when evaluating the results of those procedures.

In 2022, the Company entered into two significant joint ventures, the Jazan Integrated Gasification and Power Company ("JIGPC") joint venture and the NEOM Green Hydrogen Company (“NGHC”) joint venture, which required assessments to determine if the respective investments should be consolidated by the Company.

The consolidation assessments include an evaluation to determine whether the joint venture investments are variable interest entities (“VIE”).

Application of the VIE accounting model requires the Company to identify whether it is the primary beneficiary of a joint venture when voting interests may not indicate which party maintains a controlling financial interest in the joint venture.

We identified the VIE analysis and primary beneficiary assessment as a critical audit matter.

The application of the VIE accounting model requires a high degree of auditor judgment and additional effort when performing audit procedures to evaluate the reasonableness of management’s judgments related to the VIE analysis and control over the investment, including the need to use professionals in our firm with expertise in accounting for consolidations.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to complex contracts with customers for sales of equipment included the following, among others:

• We tested the effectiveness of the Company’s controls related to the amount and timing of revenue recognition for sale of equipment contracts, including controls over developing the estimated costs at completion and the evaluation of changes in estimated total costs for sale of equipment contracts.

• We evaluated the appropriateness and consistency of the methods and assumptions used by management to evaluate estimated total costs and changes in estimated costs to determine if the estimated total costs at completion for sale of equipment contracts were reasonable.

• With the assistance of our professionals having expertise in accounting for sale of equipment contracts, we performed the following:

◦ Evaluated management’s ability to estimate total costs at completion for each selected contract by performing corroborating inquiries with the Company’s project managers and personnel involved with the selected contracts, including inquiries related to the timeline for completion and estimates of future costs to complete the contract.

◦ Selected a sample of estimates of future costs to complete and evaluated management’s estimates of total costs at completion by performing one of the following:

▪ Comparing management’s estimates to documents such as work plans, customer purchase orders, third-party supplier invoices, and subcontractor agreements, or

▪ Developing independent estimates of total costs to completion and comparing our estimates to management’s estimates.

Our independent estimates were based on information such as work plans, customer purchase orders, third-party supplier invoices, subcontractor agreements, and similar historical project experience.

◦ We compared the gross margin on sale of equipment contracts to that of historical periods in order to evaluate the Company's ability to accurately estimate costs at completion.

Our audit procedures related to the application of the VIE accounting model for certain joint ventures included the following, among others:

• We tested the effectiveness of the Company’s controls over the initial accounting assessment of joint ventures, including controls over the accuracy and completeness of information the Company used to evaluate the VIE analysis and accounting control criteria.

• We read the joint ventures shareholders’ agreements and related contracts, which govern the formation and activities of the investment, and evaluated the appropriateness of the Company’s accounting conclusion related to the VIE analysis and control of the joint venture.

• We analyzed other qualitative factors, such as the nature of the other investors in the joint venture and relationships with lenders and other counterparties as well as the nature and relative significance of the activities conducted by the shareholders under the various arrangements, to identify factors that may suggest a different conclusion related to management’s assessment of the primary beneficiary.

• We used professionals in our firm having expertise in accounting for consolidations when evaluating the provisions of the joint venture shareholders’ agreement and related contracts.

/s/ Deloitte & Touche LLP

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CONSOLIDATED INCOME STATEMENTS

(Millions of dollars, except for share and per share data)

Fiscal Year Ended 30 September

2021 2020 2019

For the Fiscal Years Ended 30 September

(Millions of U.S.

Dollars, except for share and per share data) 2022 2021 2020

Sales $ 12,698.6 $ 10,323.0 $ 8,856.3

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Research and development 102.9 93.5 83.9

Cost reduction actions — — 25.5

Business and asset actions 73.7 — —

Gain on exchange with joint venture partner — 36.8 —

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CONSOLIDATED COMPREHENSIVE INCOME STATEMENTS

(Millions of dollars)

Fiscal Year Ended 30 September 2021 2020 2019

For the Fiscal Years Ended 30 September

(Millions of U.S.

Dollars) 2022 2021 2020

Net Income $ 2,266.5 $ 2,114.9 $ 1,931.1

Other Comprehensive Income (Loss), net of tax:

Other Comprehensive (Loss) Income, net of tax:

Translation adjustments, net of tax of $ 71.2 , $ 2.8 , and ($ 29.4 )

( 1,230.5 ) 267.3 233.4

Net gain (loss) on derivatives, net of tax of ($ 9.0 ), $ 23.7 , and ($ 1.5 )

Net (loss) gain on derivatives, net of tax of ($ 63.9 ), ($ 9.0 ), and $ 23.7

( 120.3 ) 3.3 43.5

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64.8 74.6 82.5

Total Other Comprehensive Income (Loss) 663.0 233.5 ( 653.6 )

Total Other Comprehensive (Loss) Income ( 1,299.5 ) 663.0 233.5

Comprehensive Income 967.0 2,777.9 2,164.6

Net Income Attributable to Noncontrolling Interests 10.4 15.8 44.4

Other Comprehensive Income (Loss) Attributable to Noncontrolling Interests 38.8 ( 2.0 ) ( 19.9 )

Other Comprehensive (Loss) Income Attributable to Noncontrolling Interests ( 29.3 ) 38.8 ( 2.0 )

Comprehensive Income Attributable to Air Products $ 985.9 $ 2,723.3 $ 2,122.2

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CONSOLIDATED BALANCE SHEETS

(Millions of dollars, except for share and per share data)

As of the Fiscal Years Ended 30 September

(Millions of U.S.

Dollars, except for share and per share data) 2022 2021

Current Assets

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CONSOLIDATED STATEMENTS OF CASH FLOWS

(Millions of dollars)

Fiscal Year Ended 30 September

2021 2020 2019

For the Fiscal Years Ended 30 September

(Millions of U.S.

Dollars) 2022 2021 2020

Operating Activities

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Net income attributable to Air Products 2,256.1 2,099.1 1,886.7

(Income) Loss from discontinued operations ( 70.3 ) 14.3 —

Income from continuing operations attributable to Air Products 2,028.8 1,901.0 1,760.0

Net (income) loss from discontinued operations ( 12.6 ) ( 70.3 ) 14.3

Net income from continuing operations attributable to Air Products 2,243.5 2,028.8 1,901.0

Adjustments to reconcile income to cash provided by operating activities:

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Deferred income taxes 32.3 94.0 165.0

Tax reform repatriation — — 49.4

Facility closure — 23.2 —

Business and asset actions 73.7 — —

Undistributed earnings of equity method investments ( 214.7 ) ( 138.2 ) ( 161.9 )

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CONSOLIDATED STATEMENTS OF EQUITY

(Millions of dollars, except for per share data)

Fiscal Year Ended 30 September Common

For the Fiscal Years Ended 30 September

(Millions of U.S.

Dollars, except for per share data) Common

Stock Capital

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Interests Total

Balance 30 September 2018 $ 249.4 $ 1,029.3 $ 13,409.9 ($ 1,741.9 ) ($ 2,089.2 ) $ 10,857.5 $ 318.8 $ 11,176.3

Balance as of 30 September 2019 $ 249.4 $ 1,070.9 $ 14,138.4 ($ 2,375.6 ) ($ 2,029.5 ) $ 11,053.6 $ 334.7 $ 11,388.3

Net income — — 1,886.7 — — 1,886.7 44.4 1,931.1

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Issuance of treasury shares for stock option and award plans — ( 14.1 ) — — 29.5 15.4 — 15.4

Cumulative change in accounting principle — — ( 17.1 ) — — ( 17.1 ) — ( 17.1 )

Investments by noncontrolling interest — — — — — — 17.1 17.1

Other equity transactions — ( 6.2 ) ( 5.3 ) — — ( 11.5 ) 0.9 ( 10.6 )

Balance 30 September 2019 $ 249.4 $ 1,070.9 $ 14,138.4 ($ 2,375.6 ) ($ 2,029.5 ) $ 11,053.6 $ 334.7 $ 11,388.3

Balance as of 30 September 2020 $ 249.4 $ 1,094.8 $ 14,875.7 ($ 2,140.1 ) ($ 2,000.0 ) $ 12,079.8 $ 363.3 $ 12,443.1

Net income — — 2,099.1 — — 2,099.1 15.8 2,114.9

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Investments by noncontrolling interests — — — — — — 139.8 139.8

Purchase of noncontrolling interests — ( 1.2 ) — — — ( 1.2 ) ( 4.1 ) ( 5.3 )

Other equity transactions — 0.2 ( 3.9 ) — — ( 3.7 ) — ( 3.7 )

Balance 30 September 2020 $ 249.4 $ 1,094.8 $ 14,875.7 ($ 2,140.1 ) ($ 2,000.0 ) $ 12,079.8 $ 363.3 $ 12,443.1

Balance as of 30 September 2021 $ 249.4 $ 1,115.8 $ 15,678.3 ($ 1,515.9 ) ($ 1,987.9 ) $ 13,539.7 $ 548.3 $ 14,088.0

Net income — — 2,256.1 — — 2,256.1 10.4 2,266.5

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Other equity transactions — 0.5 ( 3.5 ) — — ( 3.0 ) 2.7 ( 0.3 )

Balance 30 September 2021 $ 249.4 $ 1,115.8 $ 15,678.3 ($ 1,515.9 ) ($ 1,987.9 ) $ 13,539.7 $ 548.3 $ 14,088.0

Balance as of 30 September 2022 $ 249.4 $ 1,141.4 $ 16,520.3 ($ 2,786.1 ) ($ 1,981.0 ) $ 13,144.0 $ 558.4 $ 13,702.4

The accompanying notes are an integral part of these statements.

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and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Millions of dollars unless otherwise indicated, except for share and per share data)

Major Accounting Policies

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Millions of U.S.

Dollars unless otherwise indicated, except for share and per share data)

Basis of Presentation and Major Accounting Policies

New Accounting Guidance

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Discontinued Operations

Summarized Financial Information of Equity Affiliates

Equity Affiliates

Plant and Equipment, net

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Business Segment and Geographic Information

Subsequent Events

MAJOR ACCOUNTING POLICIES

Basis of Presentation and Consolidation Principles

The accompanying consolidated financial statements of Air Products and Chemicals, Inc.

were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of Air Products and Chemicals, Inc.

and those of its controlled subsidiaries (“we,” “our,” “us,” the “Company,” “Air Products,” or “registrant”), which are generally majority owned.

BASIS OF PRESENTATION AND MAJOR ACCOUNTING POLICIES

About Air Products

Air Products, a Delaware corporation originally founded in 1940, is a world-leading industrial gases company.

Focused on energy, environmental, and emerging markets, Air Products' core business provides a unique portfolio of products, services, and solutions that include atmospheric gases, process and specialty gases, equipment, and related services to customers in dozens of industries.

Air Products also develops, engineers, builds, owns, and operates some of the world's largest industrial gas and carbon-capture projects, supplying world-scale clean hydrogen for global transportation, industrial markets, and the broader energy transition.

Air Products trades on the New York Stock Exchange under the symbol "APD."

Air Products manages and reports its operating results through five reportable segments:

Americas, Asia, Europe, Middle East and India, and Corporate and other.

Refer to Note 23, Business Segment and Geographic Information , for additional information.

As used in this report, unless the context indicates otherwise, the terms “we,” “our,” “us,” the “Company,” "Air Products," or “registrant” include our controlled subsidiaries and affiliates.

Basis of Presentation

The accompanying consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of Air Products and Chemicals, Inc.

and those of its controlled subsidiaries.

The notes that follow are an integral part of our consolidated financial statements.

These notes, unless otherwise indicated, are presented on a continuing operations basis.

Intercompany transactions and balances are eliminated in consolidation.

We consolidate all entities that we control.

The general condition for control is ownership of a majority of the voting interests of an entity.

Control may also exist in arrangements where we are the primary beneficiary of a variable interest entity ("VIE").

An entity that has both the power to direct the activities that most significantly impact the economic performance of a VIE and the obligation to absorb losses or receive benefits significant to the VIE is considered the primary beneficiary of that entity.

We have determined that we are not a primary beneficiary of any material VIE.

The notes to the consolidated financial statements, unless otherwise indicated, are on a continuing operations basis.

Discontinued Operations

The results of operations and cash flows for our discontinued operations have been segregated from the results of continuing operations and segment results.

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Refer to Note 5, Discontinued Operations , for additional information.

Certain prior year information has been reclassified to conform to the fiscal year 2021 presentation.

Estimates and Assumptions

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes.

Preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in the consolidated financial statements and the accompanying notes.

Actual results could differ from those estimates.

COVID-19 Risks and Uncertainties

COVID-19, which was declared a global pandemic by the World Health Organization in March 2020, continues to impact our business operations and results.

There continue to be many unknowns regarding the pandemic, including the ongoing spread and severity of the virus and the pace of vaccine rollouts globally.

Given the dynamic nature of these circumstances, uncertainty remains related to how the pandemic may affect our business, results of operations, and overall financial performance.

Risks and Uncertainties

We are subject to various risks and uncertainties, including, but not limited to, those resulting from the COVID-19 pandemic as well as from increased inflationary pressures and Russia's invasion of Ukraine.

Due to the dynamic nature of these circumstances, uncertainty remains regarding how these events may affect our business, results of operations, and overall financial performance in future periods.

For example, future events could impact our ability to complete a suspended project in Ukraine and recover the carrying value of related assets, which totaled approximately $ 45 within "Plant and equipment, net" on our consolidated balance sheet as of 30 September 2022.

Reclassifications

Prior year segment information has been reclassified to conform to the fiscal year 2022 presentation, which reflects the reorganization of our reporting segments effective 1 October 2021.

Consolidation Principles

We consolidate all entities we control under either the voting interest model, which generally applies when we hold a majority of the voting interest of an entity, or the variable interest model, which applies to arrangements for which we are the primary beneficiary of a variable interest entity ("VIE").

For consolidated subsidiaries in which our ownership is less than 100%, the outside shareholders’ interests are reflected as non-controlling interests on our consolidated financial statements.

We are considered the primary beneficiary of a VIE when we have both the power to direct the activities that most significantly impact the economic performance of the VIE and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE.

During the third quarter of fiscal year 2022, we determined that we are the primary beneficiary of the NEOM Green Hydrogen Company and consolidated the joint venture within our Middle East and India segment.

For additional information, refer to Note 22, Supplemental Information .

We are not the primary beneficiary of any other material VIEs.

We account for a VIE for which we exercise significant influence but are not the primary beneficiary, such as the Jazan Integrated Gasification and Power Company joint venture, as an equity method investment.

For additional information on this joint venture, refer to Note 7, Equity Affiliates .

Revenue Recognition

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In these cases, we have elected to apply the practical expedient to account for shipping and handling as activities to fulfill the promise to transfer the goods.

For our sale of gas contracts, control generally transfers to the customer upon delivery.

Amounts billed for sales and use taxes, value-added taxes, and certain excise and other specific transactional taxes imposed on revenue-producing transactions are presented on a net basis and excluded from sales in the consolidated income statements.

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Excluded components were expenses of $ 23.2 , $ 31.0 , and $ 33.5 in fiscal years 2022, 2021, and 2020, respectively.

In 2019, excluded components were recorded in “Interest expense” and were not restated upon adoption of accounting guidance in fiscal year 2020 on hedging activities.

Environmental Expenditures

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Expense recognition is accelerated for retirement-eligible individuals who would meet the requirements for vesting of awards upon their retirement.

Refer to Note 18, Share-Based Compensation , for additional information regarding these awards and the models and assumptions used to determine the grant-date fair value of our awards.

Refer to Note 18, Share-Based Compensation , for additional information regarding our awards, including the models and assumptions used to determine their grant-date fair value.

We account for income taxes under the asset and liability method.

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When extending credit, we evaluate customer creditworthiness based on a combination of qualitative and quantitative factors that include, but are not limited to, the customer’s credit score from external providers, financial condition, and past payment experience.

We assess allowances for credit losses on our trade receivables and lease receivable portfolios.

We assess allowances for credit losses on our trade receivables, lease receivable, and notes receivable portfolios.

Allowances are evaluated by portfolio on a collective basis where similar characteristics exist.

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Balance at 30 September 2020 $ 23.9

Adoption of new credit losses standard 0.5

Provision for credit losses 2.7

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Balance at 30 September 2021 $ 25.1

Adoption of new credit losses standard 0.5

Provision for credit losses 7.5

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Balance at 30 September 2022 $ 24.1

In addition, our lease receivables are presented net of allowances for credit losses.

As of 30 September 2021 and 2020, the credit quality of lease receivables did not require a material allowance for credit losses.

In addition, our lease receivables and notes receivable are presented net of allowances for credit losses.

As of 30 September 2022 and 2021, the credit quality of lease receivables and notes receivable did not require a material allowance for credit losses.

For additional information on our lease arrangements, refer to Note 11, Leases .

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Equity Method Investments

The equity method of accounting is used when we exercise significant influence but do not have operating control, generally assumed to be 20% – 50% ownership.

Under the equity method, original investments are recorded at cost and adjusted by our share of undistributed earnings or losses of these companies.

We apply the equity method of accounting when we have the ability to exercise significant influence but do not control the operating and financial decisions of an investee, which generally applies when our ownership interest in common stock or in-substance common stock of the investee is between 20% and 50%.

Under the equity method, we initially record our investment at cost and subsequently adjust the investment to recognize our share of net earnings or losses, distributions received, and other-than-temporary impairments.

The carrying value of our equity method investments is reflected as "Investment in net assets of and advances to equity affiliates" on our consolidated balance sheets.

We use the cumulative earnings approach for determining cash flow presentation of cash distributions received from equity method investees.

Equity investments are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the investment may not be recoverable.

Our share of the investee's net earnings is primarily presented net of income taxes within “Equity affiliates’ income" on our consolidated income statements.

Profits or losses related to intra-entity sales with our equity method investees are eliminated consistent with our ownership percentage in the entity until realized by the investee through a transaction with a third party.

In addition, “Equity affiliates’ income” includes interest income from shareholder loans viewed as in-substance common stock.

Plant and Equipment, net

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Expenditures for additions and improvements that extend the lives or increase the capacity of plant assets are capitalized.

The costs of maintenance and repairs of plant and equipment are charged to expense as incurred.

The costs of maintenance and repairs of plant and equipment are expensed as incurred.

Fully depreciated assets are retained in the gross plant and equipment and accumulated depreciation accounts until they are removed from service.

In the case of disposals, assets and related depreciation are removed from the accounts, and the net amounts, less proceeds from disposal, are included in income.

In the case of disposals, assets and related accumulated depreciation are removed from the accounts, and the net amounts, less proceeds from disposal, are included in income.

Refer to Note 8, Plant and Equipment, net , for further detail.

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In addition, intangible assets are tested more frequently if a change in circumstances or the occurrence of events indicates that potential impairment exists.

Customer relationships are generally amortized over periods of five to twenty-five years .

Purchased patents and technology and other finite-lived intangibles are generally amortized over periods of five to fifteen years .

Other intangibles includes certain land use rights, which are generally amortized over a period of fifty years .

Customer relationships are generally amortized over periods of five to 25 years.

Purchased patents and technology and other finite-lived intangibles are generally amortized over periods of five to 15 years.

Other intangibles includes certain land use rights, which are generally amortized over a period of 50 years.

Amortizable lives are adjusted whenever there is a change in the estimated period of economic benefit.

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NEW ACCOUNTING GUIDANCE

Accounting Guidance Implemented in Fiscal Year 2021

Credit Losses on Financial Instruments

In June 2016, the FASB issued guidance on the measurement of credit losses, which requires measurement and recognition of expected credit losses for financial assets, including trade receivables and lease receivables, held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts.

The method to determine a loss is different from the previous guidance, which delayed recognition of a credit loss until it was probable that a loss had been incurred.

We adopted this guidance on 1 October 2020 using a modified retrospective approach with an after-tax cumulative-effect adjustment of $ 1.3 to retained earnings.

Refer to the “Major Accounting Polices – Credit Losses" section of Note 1, Major Accounting Policies , for a description of our accounting policy on credit losses.

Cloud Computing Implementation Costs

In August 2018, the FASB issued guidance which aligns the capitalization requirements for implementation costs incurred in a hosting arrangement that is a service contract with the existing capitalization requirements for implementation costs incurred to develop or obtain internal-use software.

We adopted this guidance prospectively at the beginning of fiscal year 2021.

Eligible implementation costs previously capitalized in "Plant and equipment, net" were reclassified to "Other noncurrent assets" on our consolidated balance sheets beginning in fiscal year 2021.

This guidance did not have a material impact on our consolidated financial statements upon adoption.

Simplifying the Accounting for Income Taxes

In December 2019, the FASB issued an update to simplify the accounting for income taxes and improve consistent application by clarifying or amending existing guidance.

We adopted this guidance at the beginning of fiscal year 2021.

This guidance did not have a material impact on our consolidated financial statements upon adoption.

New Accounting Guidance to be Implemented

Government Assistance

In November 2021, the Financial Accounting Standards Board ("FASB") issued disclosure guidance to increase the transparency of transactions an entity has with a government that are accounted for by applying a grant or contribution accounting model.

We are evaluating the impact this guidance will have on our annual disclosures within the consolidated financial statements.

We will adopt this guidance prospectively in fiscal year 2023.

Acquired Revenue Contracts in a Business Combination

In October 2021, the FASB issued an update for the recognition of contract assets and liabilities acquired in a business combination.

Rather than recognizing such items at fair value on the acquisition date, the acquirer would measure and recognize contract assets and liabilities in accordance with ASC 606, Revenue from Contracts with Customers , as if it had originated the contract.

This guidance is effective beginning in fiscal year 2024, with early adoption permitted.

The impact of the new standard on our consolidated financial statements and related disclosures will depend on future acquisitions.

Reference Rate Reform

In March 2020, the FASB issued an update to provide practical expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met.

This update is primarily applicable to our contracts and hedging relationships that reference LIBOR.

The amendments may be applied to impacted contracts and hedges prospectively through 31 December 2022.

We had no impacts on our hedging relationships related to reference rate reform in fiscal year 2021.

We will continue to evaluate the impact this guidance could have on our consolidated financial statements.

This update is primarily applicable to our contracts and hedging relationships that reference the London Inter-Bank Offered Rate ("LIBOR").

The amendments may be applied to impacted contracts and hedges through 31 December 2022.

We have had no reference rate reform modifications to date.

This update will be adopted on a prospective basis in the event of any such modifications.

Fiscal Year 2021

Gain on Exchange With Joint Venture Partner

As of 30 September 2020, we held a 50 % ownership interest in Tyczka Industrie-Gases GmbH ("TIG"), a joint venture in Germany with the Tyczka Group that is primarily a merchant gases business.

We accounted for this arrangement as an equity method investment in our Industrial Gases – EMEA segment.

Effective 23 February 2021 (the "acquisition date"), we agreed with our joint venture partner to separate TIG into two separate businesses.

On the acquisition date, we acquired a portion of the business on a 100 % basis, and our partner paid us $ 10.8 to acquire the rest of the business.

We previously held a 50 % ownership interest in Tyczka Industrie-Gases GmbH ("TIG"), a joint venture in Germany with the Tyczka Group that was primarily a merchant gases business.

We accounted for this arrangement as an equity method investment in our former Industrial Gases – EMEA segment.

Effective 23 February 2021 (the "acquisition date"), TIG was separated into two businesses, one of which we acquired on a 100 % basis.

Our partner paid us $ 10.8 to acquire the other business.

The exchange resulted in a gain of $ 36.8 ($ 27.3 after-tax), which is reflected as “Gain on exchange with joint venture partner” on our consolidated income statements for the fiscal year ended 30 September 2021.

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We estimated an acquisition date fair value of $ 15.4 for our previously held equity interest in the acquired portion of the business using a market approach, which considered historical earnings and the application of a market-based multiple derived from comparable transactions.

We accounted for the acquisition as a business combination within our Industrial Gases – EMEA segment.

As a result of the acquisition, we recognized intangible assets of $ 16.7 for customer relationships, goodwill of $ 14.5 , and plant and equipment of $ 10.3 .

The customer relationships have a weighted-average useful life of approximately 15 years.

The acquired assets were recorded at their estimated fair values based primarily on a preliminary purchase price allocation.

We may record adjustments to these assets during the preliminary purchase price allocation period, which could be up to one year from the acquisition date.

We expect the acquisition to allow us to have more control over the business we retained and to serve customers more effectively.

The results of this business did not materially impact our consolidated income statements for the periods presented.

We accounted for the acquisition as a business combination.

The results of this business are consolidated within our Europe segment.

Fiscal Year 2020

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("PBF") and commenced contractual long-term supply of hydrogen from those plants to PBF's refineries.

We accounted for the transaction as an asset acquisition and recorded the aggregate purchase price of $ 580 to plant and equipment on our consolidated balance sheets.

We accounted for the transaction as an asset acquisition in the Americas segment.

The aggregate purchase price of $ 580 is reflected in "Additions to plant and equipment, including long-term deposits" on our consolidated statement of cash flows for the fiscal year ended 30 September 2020.

Business Combinations

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The largest of these acquisitions was the purchase of Oxygen & Argon Works Ltd., the leading manufacturer and marketer of industrial gases in Israel, primarily offering merchant gas products.

The results of this business are consolidated within our Industrial Gases – EMEA segment.

Fiscal Year 2019

As further discussed below, we completed three business combinations in fiscal year 2019.

Exchange of Equity Affiliate Investments

We previously held 50 % ownership interests in High-Tech Gases (Beijing) Co., Ltd.

("High-Tech Gases") and WuXi Hi-Tech Gas Co., Ltd.

("WuXi"), both of which were joint ventures with another industrial gas company in China.

We accounted for these arrangements as equity method investments in our Industrial Gases – Asia segment through 30 April 2019.

On 1 May 2019, we acquired our partner's 50 % interest in WuXi in exchange for our 50 % interest in High-Tech Gases.

The exchange resulted in a net gain of $ 29.1 , of which $ 15.0 resulted from the revaluation of our previously held equity interest in WuXi to its acquisition date fair value and $ 14.1 resulted from the disposition of our interest in High-Tech Gases.

The net gain is reflected as "Gain on exchange with joint venture partner" on our consolidated income statements in fiscal year 2019 and was not recorded in results of the Industrial Gases – Asia segment.

We revalued our previously held 50 % equity interest in WuXi based on an estimated acquisition date fair value of $ 27.0 .

We calculated this fair value using a discounted cash flow analysis under the income approach, which required estimates and assumptions regarding projected revenue growth, customer attrition rates, profit margin, and discount rate.

The acquisition of the remaining interest in WuXi was accounted for as a business combination.

The results of this business are consolidated within our Industrial Gases – Asia segment.

Other Fiscal Year 2019 Business Combinations

The remaining business combinations completed in fiscal year 2019 had total consideration, net of cash acquired, of $ 126.6 .

The largest of these business combinations was the acquisition of ACP Europe SA ("ACP"), the largest independent carbon dioxide business in Continental Europe.

The results of this business are consolidated within our Industrial Gases – EMEA segment.

The results of this business are consolidated within our Europe segment.

REVENUE RECOGNITION

Nature of Goods and Services

The principal activities from which we generate sales from our contracts with customers, separated between our regional industrial gases businesses and industrial gases equipment businesses, are described below with their respective revenue recognition policies.

For an overall summary of these policies and discussion on payment terms and presentation, refer to Note 1, Major Accounting Policies .

Industrial Gases – Regional

The principal activities from which we generate sales from our contracts with customers are described below with their respective revenue recognition policies.

For an overall summary of these policies and discussion on payment terms and presentation, refer to Note 1, Basis of Presentation and Major Accounting Policies .

Regional Industrial Gases

Our regional industrial gases businesses produce and sell atmospheric gases such as oxygen, nitrogen, and argon (primarily recovered by the cryogenic distillation of air) and process gases such as hydrogen, helium, carbon dioxide, carbon monoxide, syngas, and specialty gases.

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Packaged gases customers receive small quantities of product delivered in either cylinders or dewars.

Both liquid bulk and packaged gases sales do not contain minimum purchase requirements as they are governed by contracts and/or purchase orders based on the customer's requirements.

These contracts contain stated terms that are generally 5 years or less.

Both liquid bulk and packaged gases sales do not contain minimum purchase requirements as they are governed by contracts and/or purchase orders that are based on the customer's requirements.

These contracts contain stated terms that are generally five years or less.

Performance obligations associated with this supply mode are satisfied at a point in time when the customer receives and obtains control of the product, which generally occurs upon delivery.

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We mitigate energy and natural gas price risk contractually through pricing formulas, surcharges, and cost pass-through arrangements.

Industrial Gases – Equipment

We design and manufacture equipment for air separation, hydrocarbon recovery and purification, natural gas liquefaction, and liquid helium and liquid hydrogen transport and storage.

The Industrial Gases – Global and the Corporate and other segments serve our sale of equipment customers.

The Corporate and other segment serves our sale of equipment customers.

Our sale of equipment contracts are generally comprised of a single performance obligation as the individual promised goods or services contained within the contracts are integrated with or dependent upon other goods or services in the contract for a single output to the customer.

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For contracts recognized over time, we primarily recognize revenue using a cost incurred input method by which costs incurred to date relative to total estimated costs at completion are used to measure progress toward satisfying performance obligations.

Costs incurred include material, labor, and overhead costs and represent work contributing and proportionate to the transfer of control to the customer.

Costs incurred include those for materials, labor, and overhead and represent work contributing and proportionate to the transfer of control to the customer.

Since our contracts are generally comprised of a single performance obligation, contract modifications are typically accounted for as part of the existing contract and are recognized as a cumulative adjustment for the inception-to-date effect of such change.

In addition, changes in estimates on projects accounted for under the cost incurred input method are recognized as a cumulative adjustment for the inception-to-date effect of such change.

Changes in estimates unfavorably impacted operating income by approximately $ 19 in fiscal year 2021.

Changes in estimates favorably impacted operating income by approximately $ 7 and $ 37 in fiscal years 2020 and 2019, respectively.

We recorded changes to project estimates that unfavorably impacted operating income by approximately $ 30 and $ 19 in fiscal years 2022 and 2021, respectively.

Changes in estimates favorably impacted operating income by approximately $ 7 in fiscal year 2020.

Our changes in estimates would not have significantly impacted amounts recorded in prior years.

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We believe this presentation best depicts the nature, timing, type of customer, and contract terms for our sales.

Americas Industrial

EMEA Industrial

Asia Industrial

Global Corporate

Americas Asia Europe Middle East

and India Corporate

and other Total %

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We estimate that approximately half of this revenue will be recognized over approximately the next five years and the balance thereafter.

Expected revenue associated with new on-site plants that are not yet on stream is excluded from this amount.

In addition, this amount excludes consideration associated with contracts having an expected duration of less than one year, and variable consideration for which we recognize revenue at the amount to which we have the right to invoice, including pass-through costs related to energy and natural gas.

Our remaining performance obligations do not include (1) expected revenue associated with new on-site plants that are not yet on-stream;

(2) consideration associated with contracts that have an expected duration of less than one year;

and (3) variable consideration for which we recognize revenue at the amount to which we have the right to invoice, including energy cost pass-through to customers.

In the future, actual amounts will differ due to events outside of our control, including, but not limited to, inflationary price escalations;

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Our contract acquisition costs capitalized as of 30 September 2022 and 2021 were not material.

Contract liabilities include advance payments or right to consideration prior to performance under the contract.

Contract liabilities are recognized as revenue when or as we perform under the contract.

The increase in our contract liabilities – current balance primarily relates to new sale of equipment projects as balances associated with our sale of gas contracts are generally related to fixed charges and are relatively consistent period over period.

During the fiscal year ended 30 September 2021, we recognized approximately $ 240 in revenue associated with sale of equipment contracts that was included within our contract liabilities as of 30 September 2020.

Contract liabilities include advanced payments or right to consideration prior to performance under the contract and are recognized as revenue when or as we perform.

Increases to our current contract liabilities primarily relate to new sale of equipment projects as balances associated with our sale of gas contracts are generally related to fixed charges and are relatively consistent period over period.

During the fiscal year ended 30 September 2022, we recognized sales of approximately $ 242 associated with sale of equipment contracts that were included within our contract liabilities balance as of 30 September 2021.

Advanced payments from our customers do not represent a significant financing component as these payments are intended for purposes other than financing, such as to meet working capital demands or to protect us from our customer failing to meet its obligations under the terms of the contract.

Changes in contract asset and liability balances during the fiscal year ended 30 September 2021 were not materially impacted by any other factors.

DISCONTINUED OPERATIONS

In fiscal year 2022, income from discontinued operations, net of tax, was $ 12.6 .

This primarily resulted from a net tax benefit recorded in the fourth quarter upon release of tax liabilities for uncertain tax positions associated with our former Performance Materials Division ("PMD") for which the statute of limitations expired.

Our consolidated statement of cash flows for the fiscal year ended 30 September 2022 reflects cash provided by operating activities of discontinued operations of $ 59.6 primarily from income tax refunds associated with the sale of PMD in 2017.

In fiscal year 2021, income from discontinued operations, net of tax, was $ 70.3 .

This included net tax benefits of $ 60.0 recorded upon release of tax liabilities related to uncertain tax positions for which the statute of limitations expired.

Of this benefit, we recorded $ 51.8 in the fourth quarter for liabilities associated with our former Performance Materials Division ("PMD") and $ 8.2 in the third quarter for liabilities associated with our former Energy-from-Waste ("EfW") business.

Of this benefit, we recorded $ 51.8 in the fourth quarter for liabilities associated with PMD and $ 8.2 in the third quarter for liabilities associated with our former Energy-from-Waste ("EfW") business.

Additionally, we recorded a tax benefit of $ 10.3 in the first quarter of fiscal year 2021 primarily from the settlement of a state tax appeal related to the gain on the sale of PMD in fiscal year 2017.

Our consolidated statement of cash flows for the fiscal year ended 30 September 2021 includes $ 6.7 received as part of the settlement.

Our consolidated statement of cash flows for the fiscal year ended 30 September 2021 reflects cash provided by operating activities of discontinued operations of $ 6.7 from cash received as part of the settlement.

In fiscal year 2020, loss from discontinued operations, net of tax, was $ 14.3 .

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Refer to the Pace discussion within Note 16, Commitments and Contingencies , for additional information.

The loss did not have an impact on our cash flows for the fiscal year ended 30 September 2020 .

The loss did not have an impact on our consolidated statement of cash flows for the fiscal year ended 30 September 2020.

The components of inventories are as follows:

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Inventories $ 514.2 $ 453.9

SUMMARIZED FINANCIAL INFORMATION OF EQUITY AFFILIATES

The summarized financial information below is on a combined 100% basis and has been compiled based on financial statements of the companies accounted for by the equity method.

The amounts presented include the accounts of the following equity affiliates:

EQUITY AFFILIATES

"Investment in net assets of and advances to equity affiliates" on our consolidated balance sheets were $ 3,353.8 and $ 1,649.3 as of 30 September 2022 and 2021, respectively.

Substantially all our equity method investments are in foreign affiliates.

In fiscal year 2022, we made an initial investment in the Jazan Integrated Gasification and Power Company ("JIGPC") joint venture as further discussed below.

As of 30 September 2022, our equity affiliates were as follows:

Abdullah Hashim Industrial Gases & Equipment Co., Ltd.

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Bangkok Cogeneration Company Limited ( 49 %);

Jazan Gas Projects Company ( 26 %);

Jazan Integrated Gasification and Power Company ( 51 %);

Bangkok Industrial Gases Co., Ltd.

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and principally, other industrial gas producers.

Dividends and other distributions received from equity affiliates were $ 285.1 , $ 157.3 , and $ 107.0 in fiscal years 2022, 2021, and 2020, respectively.

As of 30 September 2022 and 2021, the amount of investment in companies accounted for by the equity method included equity method goodwill of $ 44.6 and $ 55.3 , respectively.

Summarized Financial Information

The summarized financial information presented below is on a combined 100% basis and has been compiled based on financial statements of our equity affiliates.

30 September 2022 2021

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Fiscal Year Ended 30 September 2022 2021 2020

Net sales $ 3,338.1 $ 2,809.1 $ 2,885.6

Net sales (A)

$ 4,124.4 $ 3,338.1 $ 2,809.1

Gross profit 1,894.0 1,492.9 1,212.5

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Net income 895.1 646.0 567.8

Dividends received from equity affiliates were $ 157.3 , $ 107.0 , and $ 144.3 in fiscal years 2021, 2020, and 2019, respectively.

The investment in net assets of and advances to equity affiliates as of 30 September 2021 and 2020 included investment in foreign affiliates of $ 1,648.0 and $ 1,431.3 , respectively.

As of 30 September 2021 and 2020, the amount of investment in companies accounted for by the equity method included equity method goodwill of $ 55.3 and $ 50.0 , respectively.

(A) Includes financing revenue of $ 674.6 , $ 134.9 , and $ 137.7 in fiscal years 2022, 2021, and 2020, respectively.

Financing revenue in fiscal year 2022 primarily relates to the JIGPC joint venture discussed below.

Investment in Jazan Integrated Gasification and Power Company (“JIGPC”)

On 27 October 2021, we made an initial investment of $ 1.6 billion in JIGPC, a joint venture with Saudi Aramco Power Company (a subsidiary of Aramco), ACWA Power, and Air Products Qudra in the Jazan Economic City, Saudi Arabia.

Our investment represents a 55 % interest in the joint venture, of which 4 % is attributable to the non-controlling partner of Air Products Qudra.

The $ 1.6 billion investment, which includes approximately $ 130 from the non-controlling partner, is primarily in the form of shareholder loans that qualify as in-substance common stock in the joint venture.

We expect to make an additional investment in JIGPC of approximately $ 1 billion in 2023.

We determined JIGPC is a variable interest entity for which we are not the primary beneficiary as we do not have the power to direct the activities that are most significant to the economic performance of the joint venture.

Instead, these activities, including plant dispatch, operating and maintenance decisions, budgeting, capital expenditures, and financing, require unanimous approval of the owners or are controlled by the customer.

Since we have the ability to exercise significant influence in the joint venture, we accounted for our investment in JIGPC under the equity method within the Middle East and India segment.

Certain shareholders receive a preferred cash distribution pursuant to the joint venture agreement, which specifies each shareholder’s share of income after considering the amount of cash available for distribution.

As such, the earnings attributable to Air Products may not be proportionate to our ownership interest in the venture.

As of 30 September 2022, the carrying value of our investment totaled $ 1,780.0 and is presented as “Investments in and advances to equity affiliates” on our consolidated balance sheet.

Our loss exposure is limited to our investment in the joint venture.

JIGPC Joint Venture

On 27 September 2021, JIGPC signed definitive agreements for the acquisition of project assets from Aramco for $ 12 billion and entered into related project financing for the purchase.

JIGPC will complete the acquisition of the project assets, which include power blocks, gasifiers, air separation units, syngas cleanup assets, and utilities, in two phases.

The first phase was completed on 27 October 2021 for $ 7 billion.

The second phase is expected to be completed in 2023.

JIGPC will commission, operate, and maintain the project assets to supply electricity, steam, hydrogen, and utilities to Aramco’s refinery and terminal complex under a 25 -year agreement, which commenced in the first quarter of fiscal year 2022.

JIGPC accounted for the asset transfer as a financing.

Accordingly, the joint venture recorded a financing receivable upon acquisition and will recognize financing income over the supply term.

Jazan Gas Project Company

Jazan Gas Project Company (“JGPC”), a joint venture between Air Products and ACWA Holding, entered into a 20 -year oxygen and nitrogen supply agreement in 2015 to supply Aramco’s oil refinery and power plant in Jazan, Saudi Arabia.

In October 2021, the supply agreement between JGPC and Aramco was terminated, and JGPC sold its air separation units to Aramco.

We initially sold these assets to JGPC and deferred profit proportionate to our 26 % ownership in the joint venture.

With the termination of the supply agreement and sale of the air separation units complete, we recognized the remaining deferred profit, net of other project finalization costs, in equity affiliates’ income in the first quarter of fiscal year 2022.

As of 30 September 2021, our consolidated balance sheets included $ 94.4 reflected within "Payables and accrued liabilities" for our obligation to make equity contributions based on our proportionate share of advances received by the joint venture under an equity bridge loan.

The joint venture utilized a portion of the proceeds from the sale of the air separation units to repay its outstanding debt, including the equity bridge loan.

Accordingly, we recorded a noncash adjustment of $ 94.4 in the first quarter of fiscal year 2022 to reduce our obligation to zero with a corresponding reduction to the carrying value of our investment in the joint venture.

As of 30 September 2022, we no longer have an investment balance in the JGPC joint venture.

Equity Method Investment Impairment

During the fourth quarter of fiscal year 2022, we determined there was an other-than-temporary impairment in two small equity affiliates in the Asia segment.

As a result, we recorded a noncash charge of $ 14.8 to write down the full carrying value of the investments.

This charge is reflected on our consolidated income statements within “Equity affiliates' income” and was not recorded in segment results.

India Finance Act 2020

Our consolidated income statements in fiscal year 2020 include a benefit of $ 33.8 reflected in equity affiliates' income for our share of accumulated dividend distribution taxes released with respect to INOX Air Products Private Limited, an equity affiliate investment in our Industrial Gases – Asia segment.

This benefit, which related to tax legislation passed by the Indian government, was not recorded in segment results.

Refer to Note 21, Income Taxes , for additional information.

The benefit is included in fiscal year 2020 net income in the table above on a 100% basis.

Jazan Gas Project Company

On 19 April 2015, Jazan Gas Project Company, a joint venture between Air Products and ACWA Holding, entered into a 20-year oxygen and nitrogen supply agreement to supply Aramco’s oil refinery and power plant being built in Jazan, Saudi Arabia.

We own 26 % of the joint venture and guarantee repayment of our share of an equity bridge loan.

ACWA also guarantees their share of the loan.

We determined that the joint venture is a variable interest entity for which we are not the primary beneficiary.

As of 30 September 2021, our consolidated balance sheets included $ 94.4 reflected within "Payables and accrued liabilities" for our obligation to make equity contributions based on our proportionate share of the advances received by the joint venture under the loan.

Subsequent Event

As part of the Jazan Integrated Gasification and Power Company transaction discussed in Note 24, Subsequent Events , Jazan Gas Project Company sold its air separation units to Aramco in October 2021 and repaid its outstanding debt, including the equity bridge loan.

The benefit is included in fiscal year 2020 net income in the summarized financial information table above on a 100% basis.

PLANT AND EQUIPMENT, NET

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30 September Useful life 2022 2021

in years 2021 2020

Land $ 266.7 $ 312.1

Buildings 30 1,083.1 997.8

Buildings 30 years 1,431.3 1,083.1

Production facilities (A)

10 to 20 18,236.9 17,289.7

10 - 20 years

18,000.5 18,236.9

Distribution and other machinery and equipment (B)

5 to 25 5,111.6 4,807.7

4,784.9 5,111.6

Construction in progress 3,676.7 2,745.1

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Changes to the carrying amount of consolidated goodwill by segment are as follows:

Americas Industrial

EMEA Industrial

Asia Industrial

Global Corporate

Americas Asia Europe Middle East

and India Corporate

and other Total

Goodwill, net at 30 September 2020 $ 152.6 $ 180.4 $ 516.3 $ 7.8 $ 34.4 $ 891.5

Acquisitions — 66.6 — — 4.5 71.1

Acquisitions (A)

— — 21.0 — — 21.0

Currency translation and other ( 1.6 ) 3.9 ( 3.8 ) 0.2 0.3 ( 1.0 )

Goodwill, net at 30 September 2021 $ 151.0 $ 184.3 $ 533.5 $ 8.0 $ 34.7 $ 911.5

Acquisitions — 21.0 — — — 21.0

Acquisitions (A)

— — 17.0 7.5 — 24.5

Currency translation and other ( 7.8 ) ( 11.6 ) ( 93.0 ) 0.3 ( 0.9 ) ( 113.0 )

Goodwill, net at 30 September 2022 $ 143.2 $ 172.7 $ 457.5 $ 15.8 $ 33.8 $ 823.0

In fiscal year 2021, goodwill acquired is primarily attributable to expected cost synergies and growth opportunities related to a business combination completed in the second quarter.

This goodwill is no t deductible for tax purposes.

(A) Goodwill acquired in fiscal year 2021 was primarily attributable to a business combination completed in the second quarter.

Refer to Note 3, Acquisitions , for additional information.

In fiscal year 2022, goodwill acquired is primarily attributable to expected cost synergies associated with small business combinations, of which $ 3.2 is deductible for tax purposes.

30 September 2022 2021 2020

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(A) Accumulated impairment losses include the impacts of currency translation.

These losses are attributable to our Latin America reporting unit ("LASA") within the Industrial Gases – Americas segment.

These losses are attributable to our Latin America reporting unit ("LASA") within the Americas segment.

We review goodwill for impairment annually in the fourth quarter of the fiscal year and whenever events or changes in circumstances indicate that the carrying value of goodwill might not be recoverable.

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Total intangible assets $ 636.2 ($ 288.7 ) $ 347.5 $ 720.5 ($ 299.8 ) $ 420.7

The decrease in net intangible assets in fiscal year 2021 was primarily attributable to amortization, partially offset by intangible assets acquired through business combinations.

The decrease in net intangible assets in fiscal year 2022 was primarily attributable to currency impacts due to the strengthening of the U.S Dollar as well as amortization.

Amortization expense for intangible assets was $ 35.5 , $ 37.2 , and $ 34.5 in fiscal years 2022, 2021, and 2020, respectively.

Refer to Note 1, Major Accounting Policies , for the amortization periods for each major class of intangible assets.

Refer to Note 1, Basis of Presentation and Major Accounting Policies , for the amortization periods for each major class of intangible assets.

The table below details the amount of amortization expense expected to be recorded for our finite-lived intangible assets in each of the next five years and thereafter:

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Operating lease expense was $ 105.3 , $ 89.5 , and $ 80.1 for fiscal years 2022, 2021, and 2020, respectively.

These amounts exclude short-term and variable lease expenses, which were not material.

These amounts do not include short-term and variable lease expenses, which were not material.

Amounts associated with operating leases and their presentation on our consolidated balance sheets are as follows:

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As we generally control the operations and maintenance of the assets that provide the supply of gas to our customers, there have been no new arrangements that qualified as a lease in fiscal year 2022.

In cases where operating lease treatment is appropriate, there is no difference in revenue recognition over the life of the contract as compared to accounting for the contract under a sale of gas agreement.

In cases for which operating lease treatment is appropriate, there is no difference in revenue recognition over the life of the contract as compared to accounting for the contract under a sale of gas agreement.

These contracts qualify for a practical expedient available to lessors to combine the lease and non-lease components and account for the combined component in accordance with the accounting treatment for the predominant component.

We elected to apply this practical expedient and have accounted for the combined component as product sales under the revenue standard as we control the operations and maintenance of the assets that provide the supply of gas to our customers.

In cases where sales-type lease treatment is appropriate, revenue and expense are recognized up front for the sale of equipment component of the contract as compared to revenue recognition over the life of the arrangement under contracts not qualifying as sales-type leases.

In cases for which sales-type lease treatment is appropriate, revenue and expense are recognized up front for the sale of equipment component of the contract as compared to revenue recognition over the life of the arrangement under contracts not qualifying as sales-type leases.

Additionally, a portion of the revenue representing interest income from the financing component of the lease receivable is reflected as sales over the life of the contract.

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Given the long-term duration of our contracts, there is no assumed residual value for the assets at the end of the lease term.

Lease receivables, net, primarily relate to sales-type leases on certain on-site assets which are collected over the contract term.

As of 30 September 2021 and 2020, our lease receivables, net were $ 824.7 and $ 903.0 , respectively.

Lease receivables, net are primarily included within "Noncurrent lease receivables" on our consolidated balance sheets, with the remaining balance in "Other receivables and current assets." The majority of our leases are of high credit quality and were originated prior to fiscal year 2017.

"Lease receivables, net" primarily relate to sales-type leases on certain on-site assets for which payments are collected over the contract term.

As of 30 September 2022 and 2021, our lease receivables, net were $ 660.9 and $ 824.7 , respectively, and are primarily included within "Noncurrent lease receivables" on our consolidated balance sheets, with the remaining balance in "Other receivables and current assets." The majority of our leases are of high credit quality and were originated prior to fiscal year 2017.

As of 30 September 2022 and 2021, the credit quality of lease receivables did not require a material allowance for credit losses.

Lease payments collected in fiscal years 2022, 2021, and 2020 were $ 153.1 , $ 166.2 , and $ 162.8 , respectively.

These payments reduced the lease receivable balance by $ 98.8 , $ 91.6 , and $ 94.6 in fiscal years 2021, 2020, and 2019, respectively.

These payments reduced the noncurrent lease receivable balance by $ 94.0 , $ 98.8 , and $ 91.6 in fiscal years 2022, 2021, and 2020, respectively.

As of 30 September 2022, minimum lease payments expected to be collected, which reconciles to lease receivables, net, were as follows:

Thereafter 363.6

Total 1,187.6

Unearned interest income ( 270.1 )

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Total Forward Exchange Contracts $ 5,601.5 0.8 $ 4,795.8 0.8

The decrease in the notional value of forward exchange contracts that are not designated is primarily due to maturities.

The increase in the notional value of cash flow hedges in fiscal year 2022 is primarily due to the origination of forward exchange contracts that hedge forecasted foreign currency costs for capital projects.

We also use foreign currency-denominated debt to hedge the foreign currency exposures of our net investment in certain foreign subsidiaries.

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It is our policy to identify, on a continuing basis, the need for debt capital and to evaluate the financial risks inherent in funding the Company with debt capital.

Reflecting the result of this ongoing review, our debt portfolio and hedging program are managed with the intent to (1) reduce funding risk with respect to borrowings made by us to preserve our access to debt capital and provide debt capital as required for funding and liquidity purposes, and (2) manage the aggregate interest rate risk and the debt portfolio in accordance with certain debt management parameters.

Reflecting the result of this ongoing review, we manage our debt portfolio and hedging program with the intent to (1) reduce funding risk with respect to our borrowings to preserve our access to debt capital and provide debt capital as required for funding and liquidity purposes, and (2) manage the aggregate interest rate risk and the debt portfolio in accordance with certain debt management parameters.

Interest Rate Management Contracts

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The contracts are used to hedge either certain net investments in foreign operations or non-functional currency cash flows related to intercompany loans.

The current cross currency interest rate swap portfolio consists of fixed-to-fixed swaps primarily between U.S.

Dollars and Chinese Renminbi, U.S.

Dollars and Indian Rupee, and U.S.

Dollars and Chilean Pesos.

The current cross currency interest rate swap portfolio consists of fixed-to-fixed swaps primarily between the U.S.

Dollar and each of the Chinese Renminbi, Indian Rupee, and Chilean Peso.

The table below summarizes our outstanding interest rate management contracts and cross currency interest rate swaps:

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Notional Average Pay % Average

Interest rate swaps (fair value hedge) $ 200.0 LIBOR 2.76 % 0.1 $ 200.0 LIBOR 2.76 % 1.1

Interest rate swaps (fair value hedge) $ 800.0 Various 1.64 % 5.0 $ 200.0 LIBOR 2.76 % 0.1

Cross currency interest rate swaps (net investment hedge) $ 176.7 4.12 % 3.07 % 1.2 $ 210.2 4.32 % 3.14 % 2.2

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Interest rate management contracts Other receivables and current assets 36.7 16.0 Payables and accrued liabilities — 5.2

Forward exchange contracts Other noncurrent assets 5.5 0.8 Other noncurrent

liabilities 25.2 33.0

Interest rate management contracts Other noncurrent assets 18.1 44.3 Other noncurrent

liabilities 27.5 1.7

Forward exchange contracts Other noncurrent assets 60.8 5.5 Other noncurrent liabilities 46.9 25.2

Interest rate management contracts Other noncurrent assets 12.5 18.1 Other noncurrent liabilities 91.2 27.5

Total Derivatives Designated as Hedging Instruments $ 181.6 $ 74.7 $ 364.3 $ 115.1

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Forward exchange contracts Other receivables and current assets $ 6.1 $ 8.7 Payables and accrued liabilities $ 2.1 $ 6.4

Interest rate management contracts Other noncurrent assets — 0.7 Other noncurrent

liabilities — —

Forward exchange contracts Other noncurrent assets 0.1 — Other noncurrent liabilities 0.1 —

Interest rate management contracts Other noncurrent assets 1.3 — Other noncurrent liabilities — —

Total Derivatives Not Designated as Hedging Instruments $ 7.5 $ 8.7 $ 2.2 $ 6.4

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The collateral that the counterparties would be required to post was $ 62.8 and $ 38.1 as of 30 September 2022 and 2021, respectively.

No financial institution is required to post collateral at this time, as all have credit ratings at or above threshold.

No financial institution is required to post collateral at this time, as all have credit ratings at or above the applicable threshold.

FAIR VALUE MEASUREMENTS

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Short-term borrowings (A)

Current portion of long-term debt (B)

Current portion of long-term debt 548.3 484.5

Long-term debt 6,433.8 6,875.7

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(A) Includes bank obligations with weighted average interest rates of 4.2 % and 0.6 % as of 30 September 2022 and 2021, respectively.

(B) Includes current portion of long-term debt owed to a related party of $ 83.8 and $ 41.3 as of 30 September 2021 and 2020, respectively.

Total related party debt, including the current portion, was $ 358.4 and $ 338.5 as of 30 September 2021 and 30 September 2020, respectively.

This debt primarily relates to a loan with our joint venture partner, Lu’An Clean Energy Company, which partially funded the acquisition of their assets by a consolidated joint venture in 2018.

Related Party Debt

Total debt owed to related parties was $ 781.0 and $ 358.4 as of 30 September 2022 and 30 September 2021, respectively.

"Current portion of long-term debt" includes amounts owed to related parties of $ 129.0 and $ 83.8 as of 30 September 2022 and 2021, respectively.

Our related party debt includes loans with joint venture partners, including Lu’An Clean Energy Company, as well as shareholder loans associated with the NEOM project.

Refer to Note 22, Supplemental Information , for additional information.

Summary of Debt Instruments

The table below summarizes the coupon interest rates, fiscal year maturities, and carrying amounts of our long-term debt, including current portion and amounts owed to related parties:

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Payable in U.S.

8.75 % 2021 $ — $ 18.4

Medium-term Notes (weighted average rate)

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Variable-rate industrial revenue bonds 1.59 % 2035 to 2050 618.9 618.9

Other 1.57 % 2024 to 2032 14.4 —

Other variable-rate 3.42 % 2024 to 2032 41.4 14.4

Payable in Other Currencies

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Eurobonds 0.80 % 2032 490.1 579.1

Eurobonds 0.80 % 2032 579.1 586.2

New Taiwan Dollar 1.86 % 2023 to 2028 161.8 —

Saudi Riyal Loan Facility variable-rate 4.10 % 2023 195.6 —

New Taiwan Dollar Loan Facility 1.86 % 2023 to 2028 189.0 161.8

New Taiwan Dollar Loan Facility 2.66 % 2026 to 2029 31.5 —

Other 2023 0.1 0.3

Related Party

Related Party Debt

Chinese Renminbi 5.5 % 2023 to 2027 321.5 355.0

Chinese Renminbi 5.7 % 2033 12.2 3.4

Capital Lease Obligations (weighted average rate)

Finance Lease Obligations (weighted average rate)

Foreign 11.3 % 2023 to 2036 7.6 8.1

Total Principal Amount $ 7,309.3 $ 7,684.7

Related party shareholder loans to NGHC 447.3 —

Unamortized discount and debt issuance costs ( 45.4 ) ( 50.4 )

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Long-term Debt $ 6,433.8 $ 6,875.7

(A) We entered into LIBOR-based interest rate swaps with various financial institutions to hedge a portion of the 3.0 % Senior Note maturing in fiscal year 2022.

These interest rate swaps have been designated as fair value hedges of the Note.

Refer to Note 12, Financial Instruments , for additional information.

(A) Refer to Note 12, Financial Instruments , for additional information.

Principal maturities of long-term debt, including current portion and amounts owed to related parties, in each of the next five years and thereafter are as follows:

1 unchanged sentence

Total $ 7,309.3

(A) Principal maturities in fiscal year 2023 include the 4.10 % Saudi Riyal Loan Facility of $ 195.6 , which is presented within long-term debt on our consolidated balance sheet as of 30 September 2022 as we entered into a Saudi Riyal Loan Facility in October 2022 and utilized the proceeds to repay the outstanding balance.

The new facility is due in 2027.

Cash paid for interest, net of amounts capitalized, was $ 128.5 , $ 150.4 , and $ 67.2 in fiscal years 2022, 2021, and 2020, respectively.

Subsequent Event

In November 2021, we repaid the 3.0 % Senior Note of $ 400 , plus interest, on its maturity date.

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Credit Facilities

2021 Credit Agreement

On 31 March 2021, we entered into a five-year $ 2,500 revolving credit agreement with a syndicate of banks (the “2021 Credit Agreement”), under which senior unsecured debt is available to us and certain of our subsidiaries.

On 31 March 2022, we amended the 2021 Credit Agreement to exercise our option to increase the maximum borrowing capacity to $ 2,750 and transition the benchmark rate from LIBOR to the Secured Overnight Financing Rate ("SOFR").

All other terms remain unchanged from the original agreement.

The 2021 Credit Agreement provides a source of liquidity and supports our commercial paper program.

1 unchanged sentence

No borrowings were outstanding under the 2021 Credit Agreement as of 30 September 2022.

The 2021 Credit Agreement replaced our previous five-year $ 2,300 revolving credit agreement, which was to have matured on 31 March 2022.

No borrowings were outstanding under the previous agreement as of 30 September 2020 or at the time of its termination.

No early termination penalties were incurred.

We have credit facilities available to certain of our foreign subsidiaries totaling $ 749.0 , of which $ 457.5 was borrowed and outstanding as of 30 September 2022.

The amount borrowed and outstanding as of 30 September 2021 was $ 176.2 .

2020 Debt Issuance

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The components of net periodic (benefit) cost for our defined benefit pension plans for fiscal years 2022, 2021, and 2020 were as follows:

Fiscal Year Ended 30 September

2022 2021 2020

Fiscal Year Ended 30 September U.S.

International U.S.

International

national Total U.S.

national Total

Service cost $ 18.3 $ 21.5 $ 39.8 $ 21.3 $ 23.4 $ 44.7 $ 23.4 $ 23.3 $ 46.7

Non-service (benefit) cost:

Interest cost 73.9 28.9 102.8 68.9 25.2 94.1 91.2 24.8 116.0

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Settlements 6.0 0.2 6.2 1.3 0.5 1.8 5.0 0.2 5.2

Special termination benefits — — — — 0.7 0.1

Other — 1.3 1.3 — 1.0 1.0 — 0.8 0.8

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Settlements ( 19.2 ) ( 0.9 ) ( 3.0 ) ( 1.8 )

Special termination benefits — — — —

Participant contributions — 1.2 — 1.3

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The net actuarial gains and losses represent the actual changes in the estimated obligation and plan assets that have not yet been recognized in the consolidated income statements and are included in accumulated other comprehensive loss.

Actuarial gains arising during fiscal year 2021 are primarily attributable to higher than expected return on plan assets and higher discount rates.

Actuarial losses arising during fiscal year 2022 are primarily attributable to lower than expected returns on plan assets that were partially offset by higher discount rates.

Accumulated actuarial gains and losses that exceed a corridor are amortized over the average remaining service period of active U.S.

participants, which was approximately seven years as of 30 September 2022.

participants, accumulated actuarial gains and losses that exceed a corridor are amortized over the average remaining life expectancy, which was approximately twenty-four years as of 30 September 2021.

participants, accumulated actuarial gains and losses that exceed a corridor are amortized over the average remaining life expectancy, which was approximately 23 years as of 30 September 2022.

The components recognized in accumulated other comprehensive loss on a pretax basis at 30 September consisted of the following:

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As of 30 September 2022, the U.S.

salaried and U.K.

pension plans had plan assets in excess of both PBO and ABO resulting in a decrease to the U.S.

and International balances presented above.

As of 30 September 2020, the PBO of these plans exceeded the fair value of plan assets.

salaried pension plan had a PBO in excess of plan assets, which resulted in an increase to the U.S.

balances presented above.

As of 30 September 2021, the U.S.

salaried pension plan had plan assets in excess of both PBO and ABO.

Pension Plan Assets

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Fixed income investments include sovereign, corporate and asset-backed securities generally denominated in the currency of the plan.

plans' investment managers are authorized to utilize derivatives to manage interest and inflation exposure.

Asset allocation targets are established based on the long-term return, volatility and correlation characteristics of the asset classes, the profiles of the plans’ liabilities, and acceptable levels of risk.

As of 30 September 2022, the U.S pension plan was at target with respect to the fixed income securities portfolio.

The company continues to monitor the investment portfolio and various investment markets and will take action accordingly.

Assets are routinely rebalanced through contributions, benefit payments, and otherwise as deemed appropriate.

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17 % 31 % 30 % 36 %

Debt securities 61 - 76 %

Fixed income securities 66 - 80 %

73 % 68 % 64 % 63 %

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plan assets was based on a weighted average of estimated long-term returns of major asset classes and the historical performance of plan assets.

In determining asset class returns, we take into account historical long-term returns and the value of active management, as well as other economic and market factors.

In determining the estimated long-term asset class returns, we take into account historical long-term returns and the value of active management, as well as other economic and market factors, and input from our actuaries and investment advisors.

In fiscal year 2022, the 4.0 % expected rate of return for international plan assets was based on a weighted average return for plans outside the U.S., which vary significantly in size, asset structure and expected returns.

The expected asset return for the U.K.

plan, which represents over 80 % of the assets of our International plans, is 5.30 % and was derived from expected equity and debt security returns.

plan, which represents approximately 80 % of the assets of our International plans, was 4.3 % and was derived from expected equity and debt security returns.

The table below summarizes pension plan assets measured at fair value by asset class (see Note 13, Fair Value Measurements , for definition of the levels):

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Equity pooled funds 188.4 — 188.4 — 448.7 — 448.7 —

Fixed income:

Bonds (government

and corporate)

2,125.6 — 2,125.6 — 1,312.7 — 1,312.7 —

Fixed income securities 1,759.1 — 1,759.1 — 2,125.6 — 2,125.6 —

Qualified Pension Plans at Fair Value $ 2,173.4 $ 225.9 $ 1,947.5 $ — $ 3,157.8 $ 583.5 $ 2,574.3 $ —

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Interests in these funds are valued using the net asset value ("NAV") per share practical expedient and are not classified in the fair value hierarchy.

The table below summarizes changes in fair value of the pension plan assets classified as Level 3, which is comprised of investments in insurance contracts:

The table below summarizes changes in fair value of the pension plan assets classified as Level 3:

Insurance Contracts Fixed Income Pooled Funds Total Level 3

Balance at 30 September 2020 $ 256.5 $ — $ 256.5

Actual return on plan assets:

Assets held at end of year 2.4

Purchases, sales, and settlements, net ( 2.0 ) — ( 2.0 )

Actual return on plan assets held at end of year ( 7.9 ) — ( 7.9 )

Balance at 30 September 2021 $ 246.6 $ — $ 246.6

Actual return on plan assets:

Assets held at end of year ( 7.9 )

Purchases, sales, and settlements, net — 80.3 80.3

Actual return on plan assets held at end of year ( 91.1 ) ( 26.8 ) ( 117.9 )

Balance at 30 September 2022 $ 155.5 $ 53.5 $ 209.0

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Units of pooled funds are valued at the per unit NAV determined by the fund manager based on the value of the underlying traded holdings and are classified as Level 2 assets.

Corporate and Government Bonds

Corporate and government bonds are classified as Level 2 assets, as they are either valued at quoted market prices from observable pricing sources at the reporting date or valued based upon comparable securities with similar yields and credit ratings.

Fixed Income Securities

Corporate and government bonds, and related fixed income securities, are classified as Level 2 assets, as they are either valued at quoted market prices from observable pricing sources at the reporting date or valued based upon comparable securities with similar yields and credit ratings.

plan fixed income investments primarily include U.S.

corporate bonds, U.S.

treasury investments, interest rate swaps, total return swaps, and U.S.

treasury future contracts.

Fixed Income Pooled Funds

Fixed income pooled funds are classified as Level 2 assets, as they are valued at the NAV of the shares held at year end, which is determined by the fund manager based on quoted market pricing from observable pricing sources at the reporting date or valued based upon comparable securities with similar yields, credit ratings, or factors.

Fixed income pooled funds may hold government bonds, index linked bonds, corporate bonds, cash and derivative instruments.

Fixed income pooled funds are classified as either Level 2 or Level 3 assets depending on the underlying investments of the fund.

Fixed income pooled funds classified as Level 2 assets may hold government bonds, index linked bonds, corporate bonds, cash, and derivative instruments.

The NAV of these assets is based on quoted market pricing from observable pricing sources or valued based upon comparable securities with similar yields, credit ratings, or factors as of the reporting date.

Fixed income pooled funds classified as Level 3 may hold high yield bonds, emerging market debt, loans, structured credit, and other instruments.

Due to the limited market activity of the underlying securities, the NAV of these assets is based on the fund manager's estimate of the fair value of the shares held as of the reporting date.

Other Pooled Funds

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We recognize changes in other postretirement benefit plan obligations in other comprehensive income on a pretax basis.

In fiscal years 2021 and 2020, we recognized gains that arose during the period of $ 5.4 and $ 1.3 , respectively.

There was $ 1.8 net actuarial gain amortization in fiscal year 2021 and no actuarial gain amortization in 2020 as the corridor for the plan was not exceeded.

During fiscal years 2022 and 2021 we recognized a loss of $ 0.5 and a gain of $ 5.4 , respectively, that arose during the period, and $ 1.6 and $ 1.8 of net actuarial gain amortization, respectively.

The net actuarial gain recognized in accumulated other comprehensive loss on a pretax basis was $ 4.5 and $ 6.6 as of 30 September 2022 and 2021, respectively.

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Gulf Coast in February 2021, disrupted our operations and caused power and natural gas prices to spike significantly in Texas.

We are currently in the early stages of litigation of a dispute regarding energy management services related to the impact of this unusual event, and other disputes may arise from such power price increases.

We remain in litigation of a dispute regarding energy management services related to the impact of this event, and other disputes may arise from such power price increases.

In addition, legislative action may affect power supply and energy management charges.

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In the normal course of business, we are involved in legal proceedings under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA," the federal Superfund law), Resource Conservation and Recovery Act ("RCRA"), and similar state and foreign environmental laws relating to the designation of certain sites for investigation or remediation.

Presently, there are 31 sites on which a final settlement has not been reached where we, along with others, have been designated a potentially responsible party by environmental authorities or are otherwise engaged in investigation or remediation, including cleanup activity at certain of our current and former manufacturing sites.

Presently, there are 30 sites on which a final settlement or remediation has not been achieved where we, along with others in some cases, have been designated a potentially responsible party by environmental authorities or are otherwise engaged in investigation or remediation, including cleanup activity at certain of our current and former manufacturing sites.

We continually monitor these sites for which we have environmental exposure.

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As a result of these changes, we increased our environmental accrual for this site by $ 19 in continuing operations on the consolidated balance sheets and recognized a before-tax expense of $ 19 in results from discontinued operations in the second quarter of fiscal year 2020.

There has been no change to the estimated exposure range related to the Pace facility in fiscal year 2021.

There have been no significant changes to the estimated exposure range related to the Pace facility since the second quarter of fiscal year 2020.

We have implemented many of the remedial corrective measures at the Pace facility required under 1995 Consent Orders issued by the FDEP and the USEPA.

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Based on assessment results, we completed a focused feasibility study that has identified alternative approaches that may more effectively remove contaminants.

We continue to review alternative remedial approaches with the FDEP and have started additional field work to support the design of an improved groundwater recovery network with the objective of targeting areas of higher contaminant concentration and avoiding areas of high groundwater iron which has proven to be a significant operability issue for the project.

In the first quarter of 2015, we entered into a new Consent Order with the FDEP requiring us to continue our remediation efforts at the Pace facility, along with the completion of a cost review every 5 years.

In the second quarter of fiscal year 2020, we completed an updated cost review which resulted in a change in assumptions regarding future operating costs as discussed above.

We continue to review alternative remedial approaches with the FDEP and completed additional field work during 2021 to support the design of an improved groundwater recovery network with the objective of targeting areas of higher contaminant concentration and avoiding areas of high groundwater iron which has proven to be a significant operability issue for the project.

The design of the optimized recovery system will likely be finalized in fiscal year 2023 with construction to begin thereafter.

At 30 September 2022, $ 7.4 of the environmental accrual was related to the Piedmont site.

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The SCDHEC issued its final approval to the site-wide feasibility study on 13 June 2017 and the Record of Decision for the site on 27 June 2018, after which we signed a Consent Agreement Amendment memorializing our obligations to complete the cleanup of the site.

Remediation has started in accordance with the design, which includes in-situ chemical oxidation treatment, as well as the installation of a soil vapor extraction system to remove volatile organic compounds from the unsaturated soils beneath the impacted areas of the plant.

Remediation is ongoing in accordance with the design, which includes in-situ chemical oxidation treatment, as well as the operation of a soil vapor extraction system to remove volatile organic compounds from the unsaturated soils beneath the impacted areas of the plant.

We estimate that source area remediation and groundwater recovery and treatment will continue through 2029.

5 unchanged sentences

In shutting down and dismantling the facility, we have undertaken certain obligations related to soil and groundwater contaminants.

We have been pumping and treating groundwater to control off-site contaminant migration in compliance with regulatory requirements and under the approval of the Texas Commission on Environmental Quality ("TCEQ").

We estimate that the pump and treat system will continue to operate until 2042.

We plan to perform additional work to address other environmental obligations at the site.

This additional work includes remediating, as required, impacted soils, investigating groundwater west of the former PUI facility, performing post closure care for two closed RCRA surface impoundment units, establishing engineering controls, and performing a pilot study to treat impacted soils.

We continue to progress on additional work to address other environmental obligations at the site.

This additional work includes remediating, as required, impacted soils, investigating groundwater west of the former PUI facility, continuing post closure care for two closed RCRA surface impoundment units, and maintaining engineering controls.

Additionally, a chemical reduction pilot test to evaluate treating source material was conducted, and is currently undergoing performance monitoring.

In 2012, we estimated the total exposure at this site to be $ 13 .

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Exposures under the guarantees decline over time and will be completely extinguished by 2024.

We guaranteed the repayment of our 25 % share of an equity bridge loan that has been provided to fund equity commitments to the Jazan Gas Project Company joint venture with ACWA Holding in Saudi Arabia.

ACWA also guarantees their share of the loan.

As of 30 September 2021, our maximum exposure under the guarantee was approximately $ 100 , and payables and accrued liabilities on our consolidated balance sheets included $ 94.4 for our obligation to make equity contributions.

We also have a long-term sale of equipment contract with the joint venture to engineer, procure, and construct the industrial gas facilities that will supply gases to Aramco.

We also have a long-term sale of equipment contract with the JIGPC joint venture to engineer, procure, and construct the industrial gas facilities that will supply gases to Aramco.

We provided bank guarantees to the joint venture to support our performance under the contract.

As of 30 September 2022, our maximum potential payments were $ 244.5 .

Subsequent Event

Our bank guarantees that support performance under the sale of equipment contract remain in place.

Unconditional Purchase Obligations

3 unchanged sentences

Approximately $ 6.6 billion of our unconditional purchase obligations relate to helium and rare gases.

The majority of these obligations occur after fiscal year 2026.

The majority of our obligations occur after fiscal year 2027.

Helium purchases include crude feedstock supply to helium refining plants in North America as well as refined helium purchases from sources around the world.

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Authorized common stock consists of 300 million shares with a par value of $ 1 per share.

As of 30 September 2021, 249 million shares were issued, with 221 million outstanding.

As of 30 September 2022, 249 million shares were issued, with 222 million issued and outstanding.

On 15 September 2011, the Board of Directors authorized the repurchase of up to $ 1.0 billion of our outstanding common stock.

1 unchanged sentence

We did no t purchase any of our outstanding shares during fiscal year 2022.

At 30 September 2021, $ 485.3 in share repurchase authorization remains.

A summary of the changes in common shares in fiscal year 2021 is presented below:

At 30 September 2022, $ 485.3 in share repurchase authorization remained available.

A summary of the changes in common shares issued and outstanding in fiscal year 2022 is presented below:

Fiscal Year Ended 30 September 2022 2021 2020

Number of common shares outstanding, beginning of year 221,017,459 220,415,262 219,515,245

Number of common shares, beginning of year 221,396,755 221,017,459 220,415,262

Issuance of treasury shares for stock option and award plans 441,941 379,296 602,197

Number of common shares outstanding, end of year 221,396,755 221,017,459 220,415,262

Number of common shares, end of year 221,838,696 221,396,755 221,017,459

Preferred Stock

7 unchanged sentences

We issue shares from treasury stock upon payout of deferred stock units and exercise of stock options.

At the annual shareholders meeting held on 28 January 2021, the shareholders approved a new Long-Term Incentive Plan ("LTIP"), which has an authorized pool of 1,500,000 shares available for future grant, plus additional shares underlying awards outstanding on the date the LTIP was adopted but that are not issued.

As of 30 September 2021, there were 1,566,433 shares available for future grant under our LTIP.

As of 30 September 2022, there were 1.5 million shares available for future grant under our Long-Term Incentive Plan ("LTIP"), which is shareholder approved.

Share-based compensation cost recognized on the consolidated income statements is summarized below:

8 unchanged sentences

These deferred stock units entitle the recipient to one share of common stock upon vesting, which is conditioned, for employee recipients, on continued employment during the deferral period and may be conditioned on achieving certain performance targets.

We grant deferred stock unit awards with a two - to five-year deferral period that is subject to payout upon death, disability, or retirement.

We grant deferred stock unit awards with a two - to five-year deferral period that are subject to payout upon death, disability, or retirement.

Deferred stock units issued to outside directors are paid after service on the Board of Directors ends at the time elected by the director (not to exceed 10 years after service ends).

4 unchanged sentences

Market-based deferred stock units vest as long as the employee continues to be employed by the Company and upon the achievement of the performance target.

The performance target, which is approved by the Compensation Committee, is our share price appreciation and dividends paid, or "total shareholder return," in relation to a defined peer group over a three-year performance period beginning 1 October of the fiscal year of grant.

The performance target, which is approved by the Compensation Committee, is our share price appreciation and dividends paid, or "total shareholder return," in relation to the S&P 500 Index (for fiscal year 2022 awards) or a defined peer group (for awards granted prior to fiscal year 2022) over a three-year performance period beginning 1 October of the fiscal year of grant.

We granted 74,364 , 77,251 , and 80,215 market-based deferred stock units in fiscal years 2022, 2021, and 2020, respectively.

8 unchanged sentences

Expected dividend yield 2.1 % 2.1 % 2.4 %

In addition, we granted 110,555 time-based deferred stock units at a weighted average grant-date fair value of $ 282.48 .

In addition, in fiscal year 2022, we granted 120,996 time-based deferred stock units at a weighted average grant-date fair value of $ 278.67 .

In fiscal years 2021 and 2020, we granted 110,555 and 123,448 time-based deferred stock units at a weighted average grant-date fair value of $ 282.48 and $ 230.92 , respectively.

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The exercise price of stock options equals the market price of our stock on the date of the grant.

Options generally vest incrementally over three years and remain exercisable for ten years from the date of grant.

As of 30 September 2022, there was no unrecognized compensation cost as all stock option awards were fully vested.

19 unchanged sentences

Balance at 30 September 2019 ($ 61.4 ) ($ 1,356.9 ) ($ 957.3 ) ($ 2,375.6 )

Other comprehensive loss before reclassifications ( 44.1 ) ( 356.2 ) ( 326.2 ) ( 726.5 )

Other comprehensive income (loss) before reclassifications 43.5 233.4 ( 68.2 ) 208.7

Amounts reclassified from AOCL ( 57.7 ) — 82.5 24.8

Net current period other comprehensive loss ($ 31.8 ) ($ 358.8 ) ($ 263.0 ) ($ 653.6 )

Net current period other comprehensive (loss) income ($ 14.2 ) $ 233.4 $ 14.3 $ 233.5

Amount attributable to noncontrolling interests ( 21.1 ) 19.3 ( 0.2 ) ( 2.0 )

Balance at 30 September 2020 ($ 54.5 ) ($ 1,142.8 ) ($ 942.8 ) ($ 2,140.1 )

Other comprehensive income (loss) before reclassifications 43.5 233.4 ( 68.2 ) 208.7

Other comprehensive income before reclassifications 3.3 267.3 274.3 544.9

Amounts reclassified from AOCL 43.5 — 74.6 118.1

Net current period other comprehensive income (loss) ($ 14.2 ) $ 233.4 $ 14.3 $ 233.5

Net current period other comprehensive income $ 46.8 $ 267.3 $ 348.9 $ 663.0

Amount attributable to noncontrolling interest 20.6 18.3 ( 0.1 ) 38.8

Balance at 30 September 2021 ($ 28.3 ) ($ 893.8 ) ($ 593.8 ) ($ 1,515.9 )

Other comprehensive income before reclassifications 3.3 267.3 274.3 544.9

Other comprehensive loss before reclassifications ( 120.3 ) ( 1,230.5 ) ( 112.2 ) ( 1,463.0 )

Amounts reclassified from AOCL 91.4 7.3 64.8 163.5

Net current period other comprehensive income $ 46.8 $ 267.3 $ 348.9 $ 663.0

Net current period other comprehensive loss ($ 28.9 ) ($ 1,223.2 ) ($ 47.4 ) ($ 1,299.5 )

Amount attributable to noncontrolling interest 14.7 ( 44.6 ) 0.6 ( 29.3 )

3 unchanged sentences

2022 2021 2020

(Gain) Loss on Cash Flow Hedges, net of tax

Loss (Gain) on Cash Flow Hedges, net of tax

Sales $ 0.5 ($ 0.6 ) ($ 0.2 )

Cost of sales ( 0.4 ) ( 0.3 ) ( 0.8 )

Other income (expense), net — — ( 3.0 )

Interest expense 3.6 3.5 2.8

Other non-operating income (expense), net (A)

40.9 ( 59.5 ) —

Total (Gain) Loss on Cash Flow Hedges, net of tax $ 43.5 ($ 57.7 ) $ 12.3

Currency Translation Adjustment (B)

$ — $ — ($ 2.6 )

Pension and Postretirement Benefits, net of tax (C)

Other non-operating income (expense), net 87.7 40.9 ( 59.5 )

Total Loss (Gain) on Cash Flow Hedges, net of tax $ 91.4 $ 43.5 ($ 57.7 )

Currency Translation Adjustment

Business and asset actions $ 5.1 $ — $ —

Income from discontinued operations, net of tax 2.2 — —

Currency Translation Adjustment $ 7.3 $ — $ —

Pension and Postretirement Benefits, net of tax (A)

$ 64.8 $ 74.6 $ 82.5

(A) The fiscal years 2021 and 2020 impacts include amortization of the excluded component and the effective portion of the related hedges.

(B) The fiscal year 2019 impact relates to a net gain on the exchange of two equity affiliates with a joint venture partner.

Refer to Note 3, Acquisitions , for additional information.

(C) The components of net periodic benefit cost reclassified out of AOCL include items such as prior service cost amortization, actuarial loss amortization, and settlements and are included in “Other non-operating income (expense), net” on the consolidated income statements.

(A) The components of net periodic benefit cost reclassified out of AOCL include items such as prior service cost amortization, actuarial loss amortization, and settlements and are included in “Other non-operating income (expense), net” on the consolidated income statements.

Refer to Note 15, Retirement Benefits , for additional information.

44 unchanged sentences

Income tax payments, net of refunds, were $ 369.2 , $ 383.8 , and $ 379.9 in fiscal years 2022, 2021, and 2020, respectively.

Fiscal year 2021 reflects an income tax refund of $ 6.7 that is related to cash provided by discontinued operations.

Fiscal year 2022 and 2021 reflect income tax refunds associated with discontinued operations of $ 59.6 and $ 6.7 , respectively.

India Finance Act 2020

2 unchanged sentences

Instead, any non-resident recipient is subject to a withholding tax.

Our income tax provision for the fiscal year ended 30 September 2020 reflected an expense of $ 20.3 for estimated withholding taxes that we may incur on future dividends related to INOX Air Products Private Limited ("INOX"), an equity affiliate investment in our Industrial Gases – Asia segment.

Additionally, we recorded a benefit of $ 33.8 within "Equity affiliates' income" for our share of accumulated dividend distribution taxes released with respect to INOX.

3 unchanged sentences

tax laws, including a reduction in the federal corporate income tax rate to 21 %, a deemed repatriation tax on unremitted foreign earnings, as well as other changes.

Our consolidated income statements reflect a discrete net income tax expense of $ 43.8 in fiscal year 2019 related to impacts of the Tax Act.

The net expense included the reversal of a non-recurring $ 56.2 benefit initially recorded in fiscal year 2018 related to the U.S.

taxation of deemed foreign dividends, which was eliminated by regulations issued in fiscal year 2019.

The reversal in 2019 was partially offset by a benefit of $ 12.4 to reduce the total expected costs of the deemed repatriation tax.

As of 30 September 2021, the remaining liability for the deemed repatriation tax is $ 177.7 , $ 157.1 of which is presented within noncurrent liabilities on our consolidated balance sheets.

We are paying this obligation in installments over five remaining years.

As of 30 September 2022, our outstanding liability for the deemed repatriation tax was $ 155.2 , of which $ 134.6 is presented within noncurrent liabilities on our consolidated balance sheets.

We are paying this obligation in installments over four remaining years.

Inflation Reduction Act and CHIPS and Science Act of 2022

In August 2022, the U.S.

Inflation Reduction Act of 2022 and the CHIPS and Science Act of 2022 were signed into law.

These acts include, among other provisions, a corporate alternative minimum tax of 15%, an excise tax on the repurchase of corporate stock, various climate and energy provisions, and incentives for investment in semiconductor manufacturing.

We are evaluating the impact these acts could have on our financial statements, including the impact of tax incentives for carbon sequestration and clean hydrogen production once our new projects in these areas come on-stream in the U.S.

Effective Tax Rate

8 unchanged sentences

Share-based compensation ( 0.7 ) ( 0.7 ) ( 0.8 )

Tax reform repatriation — — 1.9

Other ( 0.9 ) ( 1.4 ) 0.2

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We have elected as an accounting policy to account for GILTI as a period cost when incurred.

Equity affiliates’ income, which is primarily presented net of income taxes on our consolidated income statements, favorably impacts our effective tax rate.

The increase in the impact for fiscal year 2022 is primarily due to the results of the new JIGPC joint venture as well as recognition of the remaining deferred profit associated with air separation units previously sold to Jazan Gas Project Company, net of other project finalization costs.

Share-based compensation reflects the impact from recognition of $ 18.3 , $ 17.0 , and $ 20.0 of excess tax benefits in our provision for income taxes during fiscal years 2022, 2021, and 2020, respectively.

15 unchanged sentences

Plant and equipment 1,187.6 1,171.8

Currency gains 22.5 —

Unremitted earnings of foreign entities 72.9 69.1

10 unchanged sentences

Net Deferred Income Tax Liability $ 1,111.7 $ 1,080.7

Deferred tax assets for "Reserves and accruals" and "Other" were impacted by changes in tax deferred deductions related to the timing of recognizing accruals for local tax and accounting purposes as well as foreign currency movement.

The deferred tax component for currency transactions moved into an overall deferred tax liability position due primarily to currency movements on hedging transactions as several foreign based currencies weakened against the U.S.

dollar in fiscal year 2022.

Deferred tax liabilities related to plant and equipment increased due to the impact of accelerated tax depreciation deductions in excess of book depreciation primarily in the United States.

Deferred tax assets related to retirement benefits and compensation accruals are impacted by changes in plan assets and benefit obligations that have been recognized in other comprehensive income.

This balance decreased primarily due to higher than expected asset returns and higher discount rates.

Deferred tax assets related to tax credits and other tax carryforwards decreased primarily due to the utilization of tax credits against our income tax liabilities.

Deferred tax liabilities related to Intangible assets decreased primarily due to amortization deductions for book purposes being in excess of that for tax purposes as well as foreign currency movement.

As of 30 September 2022, we had the following deferred tax assets for certain tax credits:

2 unchanged sentences

Federal 15.7 2028 - 2032

Foreign 27.5 2022 - 2041;

Of the $ 27.5 foreign tax credits, $ 14.2 have indefinite carryforward periods.

Credits in Foreign Jurisdictions 18.5 2025 - 2041;

Of the $ 18.5 credits in foreign jurisdictions, $ 12.2 have indefinite carryforward periods.

As of 30 September 2022, we had the following loss carryforwards:

1 unchanged sentence

State Net Operating Loss $ 279.5 2023 - 2040

State Capital Loss 36.3 2023 - 2027

Federal Capital Loss 88.8 2025 - 2027

3 unchanged sentences

The valuation allowance was $ 100.1 and $ 97.6 as of 30 September 2022 and 2021, respectively.

As of 30 September 2021, the balance primarily related to $ 35.1 of foreign credits and loss carryforwards as well as $ 55.4 related to foreign capital losses that were generated from the loss recorded on the exit from the Energy-from-Waste project in 2016.

As of 30 September 2022, the balance primarily related to $ 26.8 of foreign credits and loss carryforwards, $ 14.0 of U.S.

federal foreign income tax credits, and $ 45.3 related to foreign capital losses that were generated from the loss recorded on the exit from the Energy-from-Waste project in 2016.

If events warrant the reversal of the valuation allowance, it would result in a reduction of tax expense.

We believe it is more likely than not that future earnings and reversal of deferred tax liabilities will be sufficient to utilize our deferred tax assets, net of existing valuation allowance, as of 30 September 2022.

federal and U.S.

state capital losses primarily related to a loss realized upon the divestiture of our Russian subsidiary in fiscal year 2022.

We believe it is more likely than not that we will recognize sufficient U.S.

capital gain income in the future to utilize our capital losses before expiration.

We record income taxes on the undistributed earnings of our foreign subsidiaries and corporate joint ventures unless those earnings are indefinitely reinvested.

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In fiscal year 2022, reserves for unrecognized tax benefits decreased $ 25.5 due to statute of limitation expirations.

We released reserves of $ 65.6 related to the sale of our former Performance Materials Division (“PMD”), $ 8.2 associated with our former Energy-from-Waste business (“EfW”), and $ 27.5 for other reserves, including those associated with a tax election benefit related to a non-U.S.

We released reserves of $ 17.2 related to the sale of PMD.

Upon release of the reserves, we recorded income tax benefits of $ 14.8 as a component of discontinued operations.

The PMD reserve was net of related deferred tax assets of $ 2.4 .

Fiscal year 2022 also reflects a $ 15.4 reduction for tax positions of prior years.

This was primarily due to a $ 10.6 reduction caused by changes to income tax rates.

In fiscal year 2021, reserves for unrecognized tax benefits decreased $ 104.6 due to statute of limitation expirations.

We released reserves of $ 65.6 related to the sale of PMD, $ 8.2 associated with our former Energy-from-Waste business (“EfW”), and $ 27.5 for other reserves, including those associated with a tax election benefit related to a non-U.S.

subsidiary in 2017.

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Interest and penalties related to unrecognized tax benefits are recorded as a component of income tax expense and totaled $ 1.2 , ($ 0.2 ), and $ 6.1 in fiscal years 2022, 2021, and 2020, respectively.

Our 2021 expense reflects a benefit from the reversal of accrued interest on reserves released during the period.

Our 2022 and 2021 expense reflects a benefit from the reversal of accrued interest on reserves released during the period.

Our accrued balance for interest and penalties was $ 22.6 and $ 24.9 as of 30 September 2022 and 2021, respectively.

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SUPPLEMENTAL INFORMATION

NEOM Green Hydrogen Project

In the fourth quarter of fiscal year 2020, we announced the NEOM Green Hydrogen Project (the "NEOM project”), a multi-billion dollar green hydrogen-based ammonia production facility powered by renewable energy located in the NEOM city of the Kingdom of Saudi Arabia.

We, along with our joint venture partners, ACWA Power and NEOM Company, are equal owners in the newly formed NEOM Green Hydrogen Company joint venture (“NGHC”) that will develop, construct, own, operate, and finance the NEOM project.

The NEOM project is expected to be financed through non-recourse project financing and the partners’ investments.

During the third quarter of fiscal year 2022, we entered into an agreement with NGHC under which we commenced construction of the NEOM project.

In addition, we executed an agreement with NGHC under which we will be the exclusive offtaker of green ammonia produced by the NEOM project under a long-term take-if-tendered agreement.

The NEOM project is expected to be on-stream in 2026.

We intend to transport green ammonia around the world to be dissociated to produce green hydrogen, primarily for the transportation market.

Air Products has one-third of the voting interests in the NGHC joint venture;

however, substantially all the activities of the joint venture involve or are conducted on behalf of Air Products.

Since we have disproportionately few voting rights relative to our economic interests in the joint venture, we determined that NGHC is a variable interest entity.

In addition, we determined that we are the primary beneficiary of NGHC since we have the power to unilaterally direct certain significant activities, including key design and construction decisions, and we share power with our joint venture partners related to other activities that are significant to the economic performance of NGHC.

Therefore, we consolidated NGHC within the Middle East and India segment beginning in the third quarter of fiscal year 2022.

As of 30 September 2022, our consolidated balance sheet includes the following balances attributable to NGHC:

$ 275 in "Cash and cash items," $ 23 in "Other receivables and current assets," $ 219 in "Plant and equipment, net," $ 58 in "Payables and accrued liabilities," $ 447 in "Long-term debt – related party," and $ 30 in "Noncontrolling interests."

Business and Asset Actions

During the fourth quarter of fiscal year 2022, we divested our small industrial gas business in Russia due to Russia's invasion of Ukraine.

As a result, we recorded a noncash charge of $ 73.7 , which included transaction costs and cumulative currency translation losses.

This charge is reflected as "Business and asset actions" on our consolidated income statements and was not recorded in the results of our Europe segment.

Related Party Transactions

We have related party sales to some of our equity affiliates and joint venture partners as well as other income primarily from fees charged for use of Air Products' patents and technology.

Sales to and other income from related parties totaled approximately $ 300 , $ 225 , and $ 335 for the fiscal years ended 30 September 2022, 2021, and 2020, respectively.

Sales agreements with related parties include terms that are consistent with those that we believe would have been negotiated at an arm’s length with an independent party.

As of 30 September 2022 and 2021, our consolidated balance sheets included related party trade receivables of approximately $ 55 and $ 90 , respectively.

In addition, refer to Note 14, Debt , for information concerning debt owed to related parties.

Facility Closure

During the second quarter of fiscal year 2021, we recorded a charge of $ 23.2 primarily for a noncash write-down of assets associated with a contract termination in the Americas segment.

This charge is reflected as "Facility closure" on our consolidated income statements for the fiscal year ended 30 September 2021 and was not recorded in the results of the Americas segment.

Company Headquarters Relocation Income (Expense)

During the second quarter of fiscal year 2020, we sold property at our former corporate headquarters located in Trexlertown, Pennsylvania.

We received net proceeds of $ 44.1 and recorded a gain of $ 33.8 , which is reflected on our consolidated income statements as "Company headquarters relocation income (expense)" for the fiscal year ended 30 September 2020.

The gain was not recorded in the results of the Corporate and other segment.

Supplemental Balance Sheet Information

Other Receivables and Current Assets

30 September 2022 2021

Contract assets $ 119.4 $ 55.9

Contract fulfillment costs 125.5 109.9

Derivative instruments $ 114.4 $ 59.8

Contract fulfillment costs 84.1 125.5

Contract assets 69.0 119.4

Current lease receivables 77.8 84.4

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Postretirement benefits 15.0 22.1

Derivative instruments 138.2 52.7

Long-term accrued income taxes related to U.S.

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Contingencies related to uncertain tax positions 95.6 111.8

Environmental liabilities 68.5 73.6

Contract liabilities 67.2 58.4

Derivative instruments 52.7 34.7

Environmental liabilities 61.8 68.5

Other 131.7 153.6

Other noncurrent liabilities $ 1,691.2 $ 1,640.9

Related Party Transactions

Our consolidated income statements include sales to some of our equity affiliates and joint venture partners as well as other income primarily from fees charged for use of Air Products' patents and technology.

Sales to and other income from related parties totaled approximately $ 225 , $ 335 , and $ 410 for the fiscal years ended 30 September 2021, 2020, and 2019, respectively.

Sales agreements with related parties include terms that are consistent with those that we believe would have been negotiated at an arm’s length with an independent party.

As of 30 September 2021 and 2020, our consolidated balance sheets included related party trade receivables of approximately $ 90 and $ 95 , respectively.

In addition, refer to Note 14, Debt , for information concerning debt owed to related parties.

Facility Closures

During the second quarter of fiscal year 2021, we recorded a charge of $ 23.2 primarily for a noncash write-down of assets associated with a contract termination in the Industrial Gases – Americas segment.

This charge is reflected as "Facility closure" on our consolidated income statements for the fiscal year ended 30 September 2021 and was not recorded in segment results.

In December 2018, one of our customers was subject to a government enforced shutdown due to environmental reasons.

As a result, we recognized a charge of $ 29.0 during the first quarter of fiscal year 2019 primarily related to the write-off of onsite assets.

This charge was reflected as “Facility closure” on our consolidated income statements for the fiscal year ended 30 September 2019 and was not recorded in segment results.

Company Headquarters Relocation Income (Expense)

During the second quarter of fiscal year 2020, we sold property at our former corporate headquarters located in Trexlertown, Pennsylvania, in anticipation of relocating our U.S.

headquarters.

The gain was not recorded in the results of the Corporate and other segment.

Cost Reduction Actions

In fiscal year 2019, we recognized an expense of $ 25.5 for severance and other benefits associated with position eliminations.

These actions were taken to drive cost synergies primarily within the Industrial Gases – EMEA and the Industrial Gases – Americas segments.

The charge is reflected on our consolidated income statements as "Cost reduction actions" for the fiscal year ended 30 September 2019 and was not recorded in segment results .

BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION

Our reporting segments reflect the manner in which our chief operating decision maker reviews results and allocates resources.

Except in the Industrial Gases – EMEA and Corporate and other segments, each reporting segment meets the definition of an operating segment and does not include the aggregation of multiple operating segments.

Our Industrial Gases – EMEA and Corporate and other segments each include the aggregation of two operating segments that meet the aggregation criteria under GAAP.

As of 30 September 2021, our reporting segments are:

• Industrial Gases – Americas;

• Industrial Gases – EMEA (Europe, Middle East, and Africa);

• Industrial Gases – Asia;

• Industrial Gases – Global;

During the fiscal year ended 30 September 2022, we managed our operations, assessed performance, and reported earnings under the following reporting segments:

• Middle East and India;

• Corporate and other

On 4 November 2021, we announced the reorganization of our industrial gases segments effective 1 October 2021.

Refer to Note 24, Subsequent Events , for additional information.

Our reporting segments reflect the manner in which our chief operating decision maker reviews results and allocates resources.

We evaluate the performance of our segments based upon reported segment operating income.

Except for the Corporate and other segment, each reporting segment meets the definition of an operating segment and does not include the aggregation of multiple operating segments.

Our Corporate and other segment includes the aggregation of three operating segments that meet the aggregation criteria under GAAP.

Industrial Gases – Regional

The regional Industrial Gases segments (Americas, EMEA, and Asia) include the results of our regional industrial gas businesses, which produce and sell atmospheric gases, such as oxygen, nitrogen, and argon;

process gases, such as hydrogen, helium, carbon dioxide (CO 2 ), carbon monoxide, and syngas (a mixture of hydrogen and carbon monoxide);

and specialty gases.

The industrial gases business also develops, builds, and operates equipment for the production or processing of gases, such as air separation units and non-cryogenic generators.

We supply gases to diversified customers in many industries, including those in refining, chemical, gasification, metals, electronics, manufacturing, and food and beverage, through a variety of supply modes.

For additional information, refer to Note 4, Revenue Recognition .

The results of our regional industrial gas businesses are reflected in the Americas, Asia, Europe, and Middle East and India segments.

These businesses produce and sell gases to diversified customers in dozens of industries, including those in refining, chemicals, metals, electronics, manufacturing, medical, and food.

Our industrial gas portfolio includes atmospheric gases such as oxygen, nitrogen, and argon;

process gases such as hydrogen, helium, carbon dioxide (CO 2 ), and carbon monoxide, as well as a mixture of hydrogen and carbon monoxide, or "syngas;" and specialty gases.

Our regional industrial gas businesses also develop, build, and operate equipment such as air separation units and non-cryogenic generators for the production or processing of gases.

We offer our industrial gas products through a variety of supply modes as described in Note 4, Revenue Recognition .

Electricity is the largest cost component in the production of atmospheric gases.

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We mitigate energy, natural gas, and hydrocarbon price fluctuations contractually through pricing formulas, surcharges, and cost pass-through and tolling arrangements.

The regional Industrial Gases segments also include our share of the results of several joint ventures accounted for by the equity method.

Our regional industrial gas segments also include our share of the results of several joint ventures accounted for by the equity method.

The largest of these joint ventures operate in China, India, Italy, Mexico, Saudi Arabia, South Africa, and Thailand.

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We derive a competitive advantage in locations where we have pipeline networks, which enable us to provide reliable and economic supply of products to larger customers.

Industrial Gases – Global

The Industrial Gases – Global segment includes activity related to the sale of cryogenic and gas processing equipment for air separation.

The equipment is sold worldwide to customers in a variety of industries, including chemical and petrochemical manufacturing, oil and gas recovery and processing, and steel and primary metals processing.

The Industrial Gases – Global segment also includes centralized global costs associated with management of all the Industrial Gases segments.

These costs include Industrial Gases global administrative costs, product development costs, and research and development costs.

We compete with a large number of firms for all the offerings included in the Industrial Gases – Global segment.

Competition in the equipment business is based primarily on technological performance, service, technical know-how, price, and performance guarantees.

Corporate and other

The Corporate and other segment includes our liquefied natural gas, turbo machinery equipment and services, and distribution sale of equipment businesses as well as our corporate support functions that benefit all segments.

Competition for the sale of equipment businesses is based primarily on technological performance, service, technical know-how, price, and performance guarantees.

The results of the Corporate and other segment also include income and expense that is not directly associated with the other segments, such as foreign exchange gains and losses.

The Corporate and other segment includes sales of cryogenic and gas processing equipment for air separation that is sold worldwide to customers in a variety of industries, including chemical and petrochemical manufacturing, oil and gas recovery and processing, and steel and primary metals processing.

Our Corporate and other segment also includes the results of our liquefied natural gas ("LNG"), turbo machinery equipment and services, and distribution sale of equipment businesses.

Competition for our sale of equipment businesses is based primarily on technological performance, service, technical know-how, price, and performance guarantees.

Our Corporate and other segment also incurs costs to provide corporate support functions and global management activities that benefit all segments.

These costs include those for product development, research and development, and administrative support.

The results of our Corporate and other segment also include income and expense not directly associated with the regional segments, such as foreign exchange gains and losses.

In addition to assets of the global businesses included in this segment, other assets include cash and cash items, short-term investments, deferred tax assets, and financial instruments.

We do not have a homogeneous customer base or end market, and no single customer accounts for more than 10% of our consolidated revenues.

Accounting Policies

The accounting policies of the segments are the same as those described in Note 1, Major Accounting Policies .

We evaluate the performance of segments based upon reported segment operating income.

We do not have a homogeneous customer base or end market, and no single customer accounts for more than 10% of our consolidated sales.

Business Segment Information

Americas Industrial

EMEA Industrial

Asia Industrial

Global Corporate

Americas Asia Europe Middle East

and India Corporate

and other Total

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Expenditures for long-lived assets 1,264.7 690.3 295.9 31.7 226.4 2,509.0

(A) The sales information noted above relates to external customers only.

(A) Sales relate to external customers only.

All intersegment sales are eliminated in consolidation.

Intersegment sales are generally transacted at market pricing.

We generally do not have intersegment sales from our regional industrial gases businesses.

Equipment manufactured for our regional industrial gases segments are generally transferred at cost and are not reflected as an intersegment sale.

(B) Refer to the Reconciliations to Consolidated Results section below.

(C) Segment information presented for fiscal years 2021 and 2020 has been updated to reflect the reorganization of our reporting segments effective 1 October 2021.

The reorganization included the separation of our former Industrial Gases – EMEA (Europe, Middle East, and Africa) segment into two separate reporting segments:

(1) Europe and (2) Middle East and India.

The results of an affiliate formerly reflected in the Asia segment are now reported in the Middle East and India segment.

Additionally, the results of our Industrial Gases – Global operating segment are reflected in the Corporate and other segment.

The reorganization did not impact the Americas segment.

Reconciliations to Consolidated Results

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Facility closure — ( 23.2 ) —

Cost reduction actions — — ( 25.5 )

Business and asset actions ( 73.7 ) — —

Gain on exchange with joint venture partner — 36.8 —

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Total $ 496.3 $ 294.1 $ 231.0

Equity method investment impairment charge ( 14.8 ) — —

India Finance Act 2020 — — 33.8

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Geographic Information

The geographic information presented below is based on country of origin.

Sales to External Customers

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(A) "Long-lived assets" represents plant and equipment, net.

Geographic information is based on country of origin.

SUBSEQUENT EVENTS

Equity Affiliate Investment in Jazan Integrated Gasification and Power Company (“JIGPC”)

On 27 October 2021, we made an initial investment of $ 1.6 billion in Jazan Integrated Gasification and Power Company ("JIGPC").

JIGPC is a joint venture with Saudi Aramco Power Company (a subsidiary of Aramco), ACWA Power, and Air Products Qudra in the Jazan Economic City, Saudi Arabia.

Our investment, which was made primarily in the form of shareholder loans, represents a 55 % interest in the joint venture, of which 4 % is attributable to the non-controlling partner of Air Products Qudra.

Our $ 1.6 billion investment includes approximately $ 130 received from the non-controlling partner in September 2021.

This cash receipt is reflected within “Investments by noncontrolling interests” on our consolidated statements of equity and cash flows for the fiscal year ended 30 September 2021.

We expect to make an additional investment in JIGPC of approximately $ 1 billion in 2023.

We determined JIGPC is a variable interest entity for which we are not the primary beneficiary.

Therefore, we will account for our investment in JIGPC under the equity method within the Industrial Gases – Middle East segment, a new reporting segment in fiscal year 2022 as discussed below.

JIGPC Joint Venture

On 27 September 2021, JIGPC signed definitive agreements for the acquisition of $ 12 billion of assets from Aramco and related project financing for the purchase.

JIGPC will complete the acquisition of the project assets, which include power blocks, gasifiers, air separation units, syngas cleanup assets, and utilities, in two phases.

JIGPC will commission, operate, and maintain the project assets to supply electricity, steam, hydrogen and utilities to Aramco’s refinery and terminal complex under a 25 -year agreement.

The first phase was completed on 27 October 2021 and included $ 7 billion of the assets.

The second phase is expected to be funded and completed in 2023.

JIGPC will account for the asset transfer as a financing, recording a financing receivable upon acquisition and recognizing financing income over the supply term.

Jazan Gas Project Company

Air Products owns 26 % of the joint venture.

In October 2021, the supply agreement between JGPC and Aramco was terminated, and JGPC sold its air separation units to Aramco.

We initially sold these assets to JGPC and deferred revenue and profit equal to our ownership percentage in the joint venture.

With the termination of the supply agreement and sale of the air separation units complete, we will recognize the remaining deferred profit in equity affiliates’ income in the first quarter of fiscal year 2022.

Segment Reorganization

On 4 November 2021, we announced the reorganization of our industrial gases segments.

Beginning in the first quarter of fiscal year 2022, we will report our results under the following five reporting segments:

• Industrial Gases – Americas;

• Industrial Gases – Asia;

• Industrial Gases – Europe;

• Industrial Gases – Middle East;

• Corporate and other

The reorganization reflects the separation of our former Industrial Gases – EMEA segment into two separate reporting segments:

Industrial Gases – Europe and Industrial Gases – Middle East.

The results of an affiliate formerly reflected in the Industrial Gases – Asia segment will now be reported in the Industrial Gases – Middle East segment.

Additionally, the results of our Industrial Gases – Global operating segment will be reflected in the Corporate and other segment.

Except for the Corporate and other segment, each reporting segment will meet the definition of an operating segment and will not include the aggregation of multiple operating segments.

Our Corporate and other segment will include the aggregation of three operating segments that meet the aggregation criteria under GAAP.

Beginning with our Quarterly Report on Form 10-Q for the first quarter of fiscal year 2022, segment results will be presented on a retrospective basis to reflect the reorganization.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data