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Variable Interest Entities | 9 Months Ended
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Jun. 30, 2025
Consolidated Variable Interest Entities Disclosure [Abstract] |
Variable Interest Entities | VARIABLE INTEREST ENTITIES We are the primary beneficiary of the NEOM Green Hydrogen Company joint venture ("NGHC"), which is a variable interest entity ("VIE") that is consolidated in our Middle East and India segment. We are not the primary beneficiary of any other material VIEs. We account for a VIE for which we have an equity interest and exercise significant influence but are not the primary beneficiary, such as the Jazan Integrated Gasification and Power Company joint venture ("JIGPC"), as an equity method investment. Additionally, World Energy, LLC ("World Energy") is a VIE for which we have no equity interest and are not the primary beneficiary. Our variable interests in NGHC, JIGPC, and World Energy are further discussed below. NGHC Joint Venture The NEOM Green Hydrogen Project is a multi-billion dollar green hydrogen-based ammonia production facility that is being constructed in NEOM City, Saudi Arabia. Owned and operated by NGHC, the facility will be powered by renewable energy to produce green ammonia for Air Products as the exclusive offtaker under a long-term take-if-tendered agreement. Air Products is an equal owner in NGHC with our joint venture partners, ACWA Power and NEOM Company. While we only hold one-third of the voting interests in the joint venture, 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 VIE. 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 consolidate NGHC within the Middle East and India segment. Under the project financing discussed below, the assets of NGHC can only be used to settle obligations of the joint venture, and creditors of NGHC do not have recourse to the general credit of Air Products. A table summarizing balances associated with NGHC as reflected on our consolidated balance sheets is provided on page 15. Project Financing In May 2023, NGHC finalized the $6.7 billion engineering, procurement, and construction agreement with Air Products named as the main contractor and system integrator for the facility. NGHC secured project financing that is non-recourse to Air Products of approximately $6.1 billion, which is expected to fund about 73% of the project and will be drawn over the construction period. At the same time, NGHC secured additional credit facilities that are non-recourse to Air Products, which total approximately $500 and are primarily for NGHC's working capital needs. Total principal borrowings were $4.6 billion and $3.3 billion as of 30 June 2025 and 30 September 2024, respectively. These balances include short-term borrowings of $71.1 and $51.6, respectively, from a 6.30% variable rate Saudi Riyal facility. The remaining borrowings include long-term facilities that are reflected net of unamortized discounts and debt issuance costs within "Long-term debt" on our consolidated balance sheets. In May 2023, NGHC entered into floating-to-fixed interest rate swaps designed to hedge the long-term variable rate debt facilities available under the project financing during the construction period of the project. We discontinued cash flow hedge accounting for certain swaps during the third quarter of fiscal year 2024. As a result of the de-designation, unrealized gains and losses are recorded to "Other non-operating income (expense), net" on our consolidated income statements as summarized in the table below:
| Three Months Ended |  | Nine Months Ended
| 30 June |  | 30 June
| 2025 |  | 2024 |  | 2025 |  | 2024
Gain (loss) on de-designation of cash flow hedges | ($0.3) |  |  | $11.2 |  |  | $27.0 |  |  | $11.2 |
Amount attributable to noncontrolling partners in NGHC | (0.1) |  |  | 7.3 |  |  | 17.6 |  |  | 7.3 |
Amount attributable to Air Products after tax | (0.1) |  |  | 3.0 |  |  | 7.2 |  |  | 3.0 |
NGHC Balance Sheet The table below summarizes balances associated with NGHC as reflected on our consolidated balance sheets:
|  | 30 June |  | 30 September
|  | 2025 |  | 2024
Assets |  |  |  |
Cash and cash items |  | $38.4 |  |  | $34.5 |
Trade receivables, net |  | 12.7 |  |  | 6.7 |
Prepaid expenses |  | 18.9 |  |  | 31.2 |
Other receivables and current assets |  | 143.4 |  |  | 120.6 |
Total Current Assets |  | $213.4 |  |  | $193.0 |
Plant and equipment, net |  | 6,154.8 |  |  | 3,929.9 |
Operating lease right-of-use assets, net |  | 220.3 |  |  | 233.9 |
Other noncurrent assets |  | 170.6 |  |  | 37.1 |
Total Noncurrent Assets |  | $6,545.7 |  |  | $4,200.9 |
Total Assets |  | $6,759.1 |  |  | $4,393.9 |
Liabilities |  |  |  |
Payables and accrued liabilities |  | $295.8 |  |  | $308.4 |
Accrued income taxes |  | 0.3 |  |  | 2.0 |
Short-term borrowings |  | 71.0 |  |  | 51.6 |
Total Current Liabilities |  | $367.1 |  |  | $362.0 |
Long-term debt |  | 4,284.3 |  |  | 3,053.3 |
Noncurrent operating lease liabilities |  | 18.1 |  |  | 24.5 |
Other noncurrent liabilities |  | 9.4 |  |  | 30.4 |
Deferred income taxes |  | 15.0 |  |  | 3.2 |
Total Noncurrent Liabilities |  | $4,326.8 |  |  | $3,111.4 |
Total Liabilities |  | $4,693.9 |  |  | $3,473.4 |
Equity |  |  |  |
Accumulated other comprehensive income |  | $42.3 |  |  | $13.8 |
Noncontrolling interests |  | 1,397.1 |  |  | 937.6 |
JIGPC Joint Venture JIGPC is a joint venture with Saudi Aramco Power Company (a subsidiary of Aramco), ACWA Power, and Air Products Qudra (“APQ”). JIGPC entered into project financing to purchase power blocks, gasifiers, air separation units, syngas cleanup assets, and utilities 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 recorded financing receivables upon acquisition of the assets and recognizes financing income over the supply term. We determined JIGPC is a VIE for which we exercise significant influence but are not the primary beneficiary as we do not have the power to direct the activities that are most significant to its economic performance. 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. Accordingly, we account for our 55% investment, which includes 4% that is attributable to the noncontrolling partner of APQ, under the equity method within the Middle East and India segment. Our loss exposure is limited to our investment in the joint venture. The carrying value of our investment, including amounts attributable to noncontrolling interests, totaled $3.0 billion and $2.9 billion as of 30 June 2025 and 30 September 2024, respectively. The balance as of 30 June 2025 reflects a final investment of approximately $115 that we completed during the second quarter of fiscal year 2025. This investment was made in the form of a shareholder loan, which the joint venture used to purchase the remaining project assets. Our investment primarily consists of shareholder loans that qualify as in-substance common stock in the joint venture. 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. World Energy In November 2023, we purchased a sustainable aviation fuel (“SAF”) facility in Paramount, California, from World Energy and accounted for the transaction as a financing arrangement because the agreement contained an embedded sales-type lease. As of 30 September 2024, the related financing receivable had a carrying value of approximately $300. Additionally, we entered into a Master Project Agreement ("MPA") that included terms for operation of the acquired facility as well as amended terms for the construction and operation of an SAF expansion project subject to construction at the same location. The MPA also included a tolling arrangement whereby we would receive feedstock from and produce renewable fuels for World Energy over a term to conclude 15 years after onstream of the expansion project with the option to renew for two five-year terms. Subsequently, the expansion project was put on hold pending receipt of permits. We determined that World Energy is a VIE, and our financing receivable represented a variable interest in World Energy. We are not the primary beneficiary as we do not have control over their key operating decisions, including feedstock supply, production of renewable fuels, and negotiating and executing supply agreements with customers. During the second quarter of fiscal year 2025, we terminated the MPA and announced our decision to exit the project. In connection with this decision, we recorded project exit charges totaling approximately $1.8 billion, the majority of which were recognized at the time of the announcement. The charges included approximately $1.4 billion to write down assets that had primarily been reflected within "Plant and equipment, net" and $300 to establish an allowance for credit loss equal to the value of the financing receivable, which had previously been placed on non-accrual status. The remaining charge primarily reflects estimated costs to terminate contractual commitments and satisfy other obligations associated with exiting the site. We have no further loss exposur e related to our variable interest in World Energy as of 30 June 2025; however, there could be future impacts to ea rnings as we finalize our exit from the project. The ch arges discussed above were recorded in aggregate with those related to other actions as described in Note 4, Business and Asset Actions. Estimates used to calculate the charges reflect our best judgment based on information available as of 30 June 2025. The amount and timing of final settlement of these items may differ materially from our current estimates, which could materially impact our consolidated financial statements in future periods.

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- Definition Consolidated Variable Interest Entities Disclosure + References No definition available. + Details
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- Definition The entire disclosure for a variable interest entity (VIE), including but not limited to, judgments and assumptions in determining whether to consolidate and in identifying the primary beneficiary, gain (loss) recognized on the initial consolidation of the VIE, terms of arrangements, amounts and classification of the VIE's assets and liabilities, and the entity's maximum exposure to loss. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 810 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/810/tableOfContent + Details
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