Business Segment and Geographic Information

12 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

Business Segment and Geographic Information

BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION

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

•Americas;

•Asia;

•Europe;

•Middle East and India; and

•Corporate and other

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 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 (CO2), 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. Steam methane reformers utilize natural gas as the primary raw material, and gasifiers use liquid and solid hydrocarbons as the principal raw material for the production of hydrogen, carbon monoxide, and syngas. We mitigate energy, natural gas, and hydrocarbon price fluctuations contractually through pricing formulas, surcharges, and cost pass-through and tolling arrangements.

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.

Each of the regional industrial gases segments competes against global industrial gas companies as well as regional competitors. Competition is based primarily on price, reliability of supply, and the development of industrial gas applications. 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.

Corporate and other

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.

Customers

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	Asia	Europe	Middle East  and India	Corporate and other	Total
2022
Sales	$5,368.9	$3,143.3	$3,086.1	$129.5	$970.8	$12,698.6	(A)
Operating income (loss)	1,174.4	898.3	503.4	21.1	(184.7)	2,412.5	(B)
Depreciation and amortization	629.5	436.5	195.2	26.9	50.1	1,338.2
Equity affiliates' income	98.2	22.1	78.2	293.9	3.9	496.3	(B)
Expenditures for long-lived assets	1,353.1	779.2	312.6	271.6	210.0	2,926.5
Investments in net assets of and advances to equity affiliates	434.4	268.9	435.0	2,143.3	72.2	3,353.8
Total assets	8,237.7	6,968.7	3,645.1	2,980.7	5,360.4	27,192.6
2021(C)
Sales	$4,167.6	$2,920.8	$2,345.6	$99.3	$789.7	$10,323.0	(A)
Operating income (loss)	1,065.5	838.3	529.4	28.0	(193.4)	2,267.8	(B)
Depreciation and amortization	611.9	444.4	204.5	25.3	35.2	1,321.3
Equity affiliates' income	112.5	35.9	62.8	76.4	6.5	294.1	(B)
Expenditures for long-lived assets	909.6	792.3	300.3	71.0	391.0	2,464.2
Investments in net assets of and advances to equity affiliates	383.8	330.4	455.4	409.7	70.0	1,649.3
Total assets	7,092.5	7,349.4	3,830.3	800.6	7,786.4	26,859.2
2020(C)
Sales	$3,630.7	$2,716.5	$1,847.0	$79.3	$582.8	$8,856.3	(A)
Operating income (loss)	1,012.4	870.3	454.8	18.5	(152.2)	2,203.8	(B)
Depreciation and amortization	559.5	399.4	175.9	20.0	30.2	1,185.0
Equity affiliates' income	84.3	32.1	51.8	51.9	10.9	231.0	(B)
Expenditures for long-lived assets	1,264.7	690.3	295.9	31.7	226.4	2,509.0

(A)Sales relate to external customers only. All intersegment sales are eliminated in consolidation.

(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

Operating Income

The table below reconciles total operating income disclosed in the table above to consolidated operating income as reflected on our consolidated income statements:

Fiscal Year Ended 30 September	2022	2021	2020
Total	$2,412.5	$2,267.8	$2,203.8
Facility closure	—	(23.2)	—
Business and asset actions	(73.7)	—	—
Gain on exchange with joint venture partner	—	36.8	—
Company headquarters relocation income (expense)	—	—	33.8
Consolidated Operating Income	$2,338.8	$2,281.4	$2,237.6

Equity Affiliates' Income

The table below reconciles total equity affiliates' income disclosed in the table above to consolidated equity affiliates' income as reflected on our consolidated income statements:

Fiscal Year Ended 30 September	2022	2021	2020
Total	$496.3	$294.1	$231.0
Equity method investment impairment charge	(14.8)	—	—
India Finance Act 2020	—	—	33.8
Consolidated Equity Affiliates' Income	$481.5	$294.1	$264.8

Geographic Information

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

Sales to External Customers

Fiscal Year Ended 30 September	2022	2021	2020
United States	$5,230.2	$3,895.8	$3,359.6
China	1,989.8	1,828.0	1,719.7
Other foreign operations	5,478.6	4,599.2	3,777.0
Total	$12,698.6	$10,323.0	$8,856.3
Long-Lived Assets(A)
30 September	2022	2021	2020
United States	$6,022.0	$5,187.8	$4,633.9
China	3,886.0	4,137.7	3,719.4
Other foreign operations	4,252.5	3,929.1	3,611.4
Total	$14,160.5	$13,254.6	$11,964.7

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