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Summarized Financial Information of Equity Affiliates
 12 Months Ended
Sep. 30, 2019
Equity Method Investments and Joint Ventures [Abstract]  
Summarized Financial Information of Equity Affiliates 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:
Abdullah Hashim Industrial Gases & Equipment Co., Ltd. (25%);
 
INOX Air Products Private Limited (50%);
Air Products South Africa (Proprietary) Limited (50%);
 
Jazan Gas Projects Company (26%);
Bangkok Cogeneration Company Limited (49%);
 
Kulim Industrial Gases Sdn. Bhd. (50%);
Bangkok Industrial Gases Co., Ltd. (49%);
 
Sapio Produzione Idrogeno Ossigeno S.r.l. (49%);
Chengdu Air & Gas Products Ltd. (50%);
 
Tecnologia en Nitrogeno S. de R.L. de C.V. (50%);
Helios S.p.A. (49%);
 
Tyczka Industrie-Gases GmbH (50%);
INFRA Group (40%);
 
and principally, other industrial gas producers.

30 September
 
  
 
2019

 
2018

Current assets
 
 
 

$1,660.6

 

$1,556.9

Noncurrent assets
 
 
 
4,400.4

 
4,340.8

Current liabilities
 
 
 
725.1

 
635.7

Noncurrent liabilities
 
 
 
2,853.6

 
2,652.5

 
 
 
 
 
 
 
Year Ended 30 September
 
2019

 
2018

 
2017

Net sales
 

$2,885.6

 

$2,663.1

 

$2,343.3

Sales less cost of sales
 
1,193.4

 
1,050.6

 
878.6

Operating income
 
763.4

 
635.3

 
509.5

Net income
 
492.4

 
388.0

 
343.5


Dividends received from equity affiliates were $144.3, $122.5, and $99.5 in fiscal years 2019, 2018, and 2017, respectively.
The investment in net assets of and advances to equity affiliates as of 30 September 2019 and 2018 included investment in foreign affiliates of $1,275.4 and $1,276.0, respectively.
As of 30 September 2019 and 2018, the amount of investment in companies accounted for by the equity method included equity method goodwill of $42.8 and $42.4, respectively.
Exchange of Equity Affiliate Investments
As of 30 September 2018, we 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. Subsequent to the acquisition date, we own 100% of WuXi and no longer have an equity interest in High-Tech Gases. The results and financial position of this business have been consolidated within our Industrial Gases – Asia segment as of the acquisition date.
Refer to Note 7, Acquisitions, to the consolidated financial statements for additional information.
U.S. Tax Cuts and Jobs Act
For the year ended 30 September 2018, equity affiliates' income includes an expense of $28.5 for our proportionate share of the impact of the U.S. Tax Cuts and Jobs Act primarily recorded during the first quarter of fiscal year 2018. This expense is included in the fiscal year 2018 net income on a 100% basis in the table above. Refer to Note 23, Income Taxes, for additional information.
Equity Affiliate Impairment Charge
During the third quarter of fiscal year 2017, we recorded an other-than-temporary impairment charge of $79.5 on our investment in Abdullah Hashim Industrial Gases & Equipment Co., Ltd. (AHG), a 25%-owned equity affiliate in our Industrial Gases – EMEA segment. The impairment charge is reflected on our consolidated income statements within “Equity affiliates' income." This charge was not deductible for tax purposes and has been excluded from segment results.
The decline in value resulted from expectations for lower future cash flows to be generated by AHG, primarily due to challenging economic conditions in Saudi Arabia, including the impacts of lower prices in the oil and gas industry, increased competition, and capital project growth opportunities not materializing as anticipated.
The AHG investment was valued based on the results of the income and market valuation approaches. The income approach utilized a discount rate based on a market-participant, risk-adjusted weighted average cost of capital, which considers industry required rates of return on debt and equity capital for a target industry capital structure adjusted for risks associated with size and geography. Other significant estimates and assumptions that drove our updated valuation of AHG included revenue growth rates and profit margins that were lower than those upon acquisition and our assessment of AHG's business improvement plan effectiveness. Under the market approach, we estimated fair value based on market multiples of revenue and earnings derived from publicly-traded industrial gases companies engaged in similar lines of business, adjusted to reflect differences in size and growth prospects.
Jazan
On 19 April 2015, a joint venture between Air Products and ACWA Holding entered into a 20-year oxygen and nitrogen supply agreement to supply Saudi Aramco’s oil refinery and power plant being built in Jazan, Saudi Arabia. Air Products owns 26% of the joint venture and guarantees the repayment of its 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 2018, other noncurrent liabilities included $94.4 for our obligation to make future equity contributions in 2020 based on our proportionate share of the advances received by the joint venture under the loan. During 2019, this balance was reclassified from other noncurrent liabilities to payables and accrued liabilities on our consolidated balance sheets as the obligation is required to be funded within the next twelve months. This noncash transaction has been excluded from the consolidated statement of cash flows for the year ended 30 September 2019.