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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended 31 December 2022
or
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             
Commission File Number 001-04534
apd-20221231_g1.jpg
AIR PRODUCTS AND CHEMICALS, INC.
(Exact name of registrant as specified in its charter)
Delaware23-1274455
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
1940 Air Products Boulevard
Allentown, Pennsylvania 18106-5500
(Address of principal executive offices and Zip Code)
610-481-4911
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $1.00 per shareAPDNew York Stock Exchange
1.000% Euro Notes due 2025APD25New York Stock Exchange
0.500% Euro Notes due 2028APD28New York Stock Exchange
0.800% Euro Notes due 2032APD32New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer☒Accelerated filer☐Non-accelerated filer☐Smaller reporting company☐Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The number of shares of common stock, par value $1 per share, outstanding at 31 December 2022 was 222,082,851.

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AIR PRODUCTS AND CHEMICALS, INC. and Subsidiaries
QUARTERLY REPORT ON FORM 10-Q
For the quarterly period ended 31 December 2022

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FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that do not relate solely to historical or current facts and can generally be identified by words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” "future," “goal,” “intend,” “may,” “outlook,” “plan,” “positioned,” “possible,” “potential,” “project,” “should,” “target,” “will,” “would,” and similar expressions or variations thereof, or the negative thereof, but these terms are not the exclusive means of identifying such statements. Forward-looking statements are based on management’s expectations and assumptions as of the date of this report and are not guarantees of future performance. You are cautioned not to place undue reliance on our forward-looking statements.
Forward-looking statements may relate to a number of matters, including expectations regarding revenue, margins, expenses, earnings, tax provisions, cash flows, pension obligations, share repurchases or other statements regarding economic conditions or our business outlook; statements regarding plans, projects, strategies and objectives for our future operations, including our ability to win new projects and execute the projects in our backlog; and statements regarding our expectations with respect to pending legal claims or disputes. While forward-looking statements are made in good faith and based on assumptions, expectations and projections that management believes are reasonable based on currently available information, actual performance and financial results may differ materially from projections and estimates expressed in the forward-looking statements because of many factors, including, without limitation:
•the duration and impacts of the ongoing COVID-19 global pandemic and efforts to contain its transmission, including the effect of these factors on our business, our customers, economic conditions and markets generally;
•changes in global or regional economic conditions, inflation, and supply and demand dynamics in the market segments we serve, including demand for technologies and projects to limit the impact of global climate change;
•changes in the financial markets that may affect the availability and terms on which we may obtain financing;
•the ability to implement price increases to offset cost increases;
•disruptions to our supply chain and related distribution delays and cost increases;
•risks associated with having extensive international operations, including political risks, risks associated with unanticipated government actions and risks of investing in developing markets;
•project delays, contract terminations, customer cancellations, or postponement of projects and sales;
•our ability to safely develop, operate, and manage costs of large scale and technically complex projects;
•the future financial and operating performance of major customers, joint ventures, and equity affiliates;
•our ability to develop, implement, and operate new technologies and to market products produced utilizing new technologies;
•our ability to execute the projects in our backlog and refresh our pipeline of new projects;
•tariffs, economic sanctions and regulatory activities in jurisdictions in which we and our affiliates and joint ventures operate;
•the impact of environmental, tax, safety, or other legislation, as well as regulations and other public policy initiatives affecting our business and the business of our affiliates and related compliance requirements, including legislation, regulations, or policies intended to address global climate change;
•changes in tax rates and other changes in tax law;
•safety incidents relating to our operations;
•the timing, impact, and other uncertainties relating to acquisitions and divestitures, including our ability to integrate acquisitions and separate divested businesses, respectively;

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FORWARD-LOOKING STATEMENTS (CONTINUED)
•risks relating to cybersecurity incidents, including risks from the interruption, failure or compromise of our information systems;
•catastrophic events, such as natural disasters and extreme weather events, public health crises, acts of war, including Russia’s invasion of Ukraine and the ongoing civil war in Yemen, or terrorism;
•the impact on our business and customers of price fluctuations in oil and natural gas and disruptions in markets and the economy due to oil and natural gas price volatility;
•costs and outcomes of legal or regulatory proceedings and investigations;
•asset impairments due to economic conditions or specific events;
•significant fluctuations in inflation, interest rates and foreign currency exchange rates from those currently anticipated;
•damage to facilities, pipelines or delivery systems, including those we own or operate for third parties;
•availability and cost of electric power, natural gas, and other raw materials; and
•the success of productivity and operational improvement programs.
In addition to the foregoing factors, forward-looking statements contained herein are qualified with respect to the risks disclosed elsewhere in this document, including in Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations, and Item 3, Quantitative and Qualitative Disclosures About Market Risk, as well as with respect to the risks described in Item 1A, Risk Factors, to our Annual Report on Form 10-K for the fiscal year ended 30 September 2022. Any of these factors, as well as those not currently anticipated by management, could cause our results of operations, financial condition or liquidity to differ materially from what is expressed or implied by any forward-looking statement. Except as required by law, we disclaim any obligation or undertaking to update or revise any forward-looking statements contained herein to reflect any change in assumptions, beliefs, or expectations or any change in events, conditions, or circumstances upon which any such forward-looking statements are based.

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PART I—FINANCIAL INFORMATION
Item 1. Financial Statements

Air Products and Chemicals, Inc. and Subsidiaries
CONSOLIDATED INCOME STATEMENTS
(Unaudited)
Three Months Ended
31 December
(Millions of U.S. Dollars, except for share and per share data)20222021
Sales$3,174.7 $2,994.2 
Cost of sales2,272.3 2,223.6 
Selling and administrative expense234.4 232.8 
Research and development expense24.4 23.3 
Other income (expense), net8.4 8.5 
Operating Income652.0 523.0 
Equity affiliates' income110.0 147.8 
Interest expense41.2 30.5 
Other non-operating income (expense), net(0.6)22.6 
Income Before Taxes720.2 662.9 
Income tax provision136.4 113.3 
Net Income583.8 549.6 
Net income (loss) attributable to noncontrolling interests11.6 (10.8)
Net Income Attributable to Air Products$572.2 $560.4 
Per Share Data (U.S. Dollars per share)
Basic earnings per share attributable to Air Products$2.58 $2.53 
Diluted earnings per share attributable to Air Products$2.57 $2.52 
Weighted Average Common Shares (in millions)
Basic222.2 221.9 
Diluted
222.6 222.6 
The accompanying notes are an integral part of these statements.
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Air Products and Chemicals, Inc. and Subsidiaries
CONSOLIDATED COMPREHENSIVE INCOME STATEMENTS
(Unaudited)
Three Months Ended
31 December
(Millions of U.S. Dollars)20222021
Net Income$583.8 $549.6 
Other Comprehensive Income, net of tax:
Translation adjustments, net of tax of ($38.0) and $7.6
509.6 40.6 
Net gain (loss) on derivatives, net of tax of $38.2 and ($11.1)
121.0 (0.5)
Pension and postretirement benefits, net of tax of $2.4 and $—
6.7 — 
Reclassification adjustments:
Derivatives, net of tax of ($21.7) and $6.1
(68.7)18.7 
Pension and postretirement benefits, net of tax of $3.7 and $5.4
11.9 16.0 
Total Other Comprehensive Income580.5 74.8 
Comprehensive Income1,164.3 624.4 
Net Income (Loss) Attributable to Noncontrolling Interests11.6 (10.8)
Other Comprehensive Income Attributable to Noncontrolling Interests12.7 11.2 
Comprehensive Income Attributable to Air Products$1,140.0 $624.0 
The accompanying notes are an integral part of these statements.

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Air Products and Chemicals, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Unaudited)
31 December30 September
(Millions of U.S. Dollars, except for share and per share data)20222022
Assets
Current Assets
Cash and cash items$3,131.0 $2,711.0 
Short-term investments19.6 590.7 
Trade receivables, net1,827.2 1,794.4 
Inventories635.3 514.2 
Prepaid expenses165.1 156.8 
Other receivables and current assets542.9 515.8 
Total Current Assets6,321.1 6,282.9 
Investment in net assets of and advances to equity affiliates3,391.5 3,353.8 
Plant and equipment, at cost29,772.3 28,160.1 
Less: accumulated depreciation14,733.1 13,999.6 
Plant and equipment, net15,039.2 14,160.5 
Goodwill, net876.3 823.0 
Intangible assets, net363.1 347.5 
Operating lease right-of-use assets, net754.8 694.8 
Noncurrent lease receivables579.3 583.1 
Other noncurrent assets953.0 947.0 
Total Noncurrent Assets21,957.2 20,909.7 
Total Assets$28,278.3 $27,192.6 
Liabilities and Equity  
Current Liabilities
Payables and accrued liabilities$2,552.0 $2,771.6 
Accrued income taxes159.9 135.2 
Short-term borrowings2.2 10.7 
Current portion of long-term debt562.8 548.3 
Total Current Liabilities3,276.9 3,465.8 
Long-term debt6,834.4 6,433.8 
Long-term debt – related party658.4 652.0 
Noncurrent operating lease liabilities627.4 592.1 
Other noncurrent liabilities1,117.7 1,099.1 
Deferred income taxes1,246.1 1,247.4 
Total Noncurrent Liabilities10,484.0 10,024.4 
Total Liabilities$13,760.9 $13,490.2 
Commitments and Contingencies - See Note 11
Air Products Shareholders’ Equity
Common stock (par value $1 per share; issued 2023 and 2022 - 249,455,584 shares)
249.4 249.4 
Capital in excess of par value1,148.4 1,141.4 
Retained earnings16,731.4 16,520.3 
Accumulated other comprehensive loss(2,218.3)(2,786.1)
Treasury stock, at cost (2023 - 27,372,733 shares; 2022 - 27,616,888 shares)
(1,975.2)(1,981.0)
Total Air Products Shareholders’ Equity13,935.7 13,144.0 
Noncontrolling Interests581.7 558.4 
Total Equity$14,517.4 $13,702.4 
Total Liabilities and Equity$28,278.3 $27,192.6 
The accompanying notes are an integral part of these statements.
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Air Products and Chemicals, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
 31 December
(Millions of U.S. Dollars)20222021
Operating Activities
Net income$583.8 $549.6 
Less: Net income (loss) attributable to noncontrolling interests11.6 (10.8)
Net income attributable to Air Products572.2 560.4 
Adjustments to reconcile income to cash provided by operating activities:
Depreciation and amortization321.5 332.3 
Deferred income taxes13.8 15.7 
Distributed (Undistributed) earnings of equity method investments17.2 (117.3)
Gain on sale of assets and investments(2.3)(0.8)
Share-based compensation16.1 15.8 
Noncurrent lease receivables19.4 21.8 
Other adjustments99.0 (49.4)
Working capital changes that provided (used) cash, excluding effects of acquisitions:
Trade receivables40.4 (132.7)
Inventories(102.8)(33.7)
Other receivables(6.7)14.0 
Payables and accrued liabilities(257.6)167.6 
Other working capital(10.9)(8.5)
Cash Provided by Operating Activities719.3 785.2 
Investing Activities
Additions to plant and equipment, including long-term deposits(834.2)(663.8)
Acquisitions, less cash acquired— (34.6)
Investment in and advances to unconsolidated affiliates— (1,632.7)
Proceeds from sale of assets and investments4.0 1.1 
Purchases of investments(19.2)(727.4)
Proceeds from investments591.5 1,331.9 
Other investing activities1.7 6.4 
Cash Used for Investing Activities(256.2)(1,719.1)
Financing Activities
Long-term debt proceeds476.3 51.6 
Payments on long-term debt(195.9)(400.0)
Net (decrease) increase in commercial paper and short-term borrowings(4.1)113.1 
Dividends paid to shareholders(359.4)(332.1)
Proceeds from stock option exercises 14.0 13.3 
Other financing activities(16.5)(31.0)
Cash Used for Financing Activities(85.6)(585.1)
Effect of Exchange Rate Changes on Cash42.5 3.8 
Increase (Decrease) in cash and cash items420.0 (1,515.2)
Cash and Cash items – Beginning of year2,711.0 4,468.9 
Cash and Cash Items – End of Period$3,131.0 $2,953.7 
The accompanying notes are an integral part of these statements.
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Air Products and Chemicals, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited)

Three Months Ended 31 December 2022
(Millions of U.S. Dollars, except for per share data)Common
 Stock		Capital in
 Excess of
 Par Value		Retained
 Earnings		Accumulated
Other
Comprehensive
Income (Loss)		Treasury
 Stock		Air
Products
Shareholders'
Equity		Non-
controlling
Interests		Total
Equity
Balance at 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 
Net income— — 572.2 — — 572.2 11.6 583.8 
Other comprehensive income— — — 567.8 — 567.8 12.7 580.5 
Dividends on common stock (per share $1.62)
— — (359.8)— — (359.8)— (359.8)
Dividends to noncontrolling interests— — — — — — (0.8)(0.8)
Share-based compensation— 14.2 — — — 14.2 — 14.2 
Issuance of treasury shares for stock option and award plans— (7.4)— — 5.8 (1.6)— (1.6)
Other equity transactions— 0.2 (1.3)— — (1.1)(0.2)(1.3)
Balance at 31 December 2022$249.4 $1,148.4 $16,731.4 ($2,218.3)($1,975.2)$13,935.7 $581.7 $14,517.4 

Three Months Ended 31 December 2021
(Millions of U.S. Dollars, except for per share data)Common
 Stock		Capital in
 Excess of
 Par Value		Retained
 Earnings		Accumulated
Other
Comprehensive
Income (Loss)		Treasury
 Stock		Air
Products
Shareholders'
Equity		Non-
controlling
Interests		Total
Equity
Balance at 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— — 560.4 — — 560.4 (10.8)549.6 
Other comprehensive income— — — 63.6 — 63.6 11.2 74.8 
Dividends on common stock (per share $1.50)
— — (332.6)— — (332.6)— (332.6)
Share-based compensation— 14.1 — — — 14.1 — 14.1 
Issuance of treasury shares for stock option and award plans— (18.1)— — (1.3)(19.4)— (19.4)
Investments by noncontrolling interests— — — — — — 3.6 3.6 
Purchase of noncontrolling interests— — — — — — (1.9)(1.9)
Other equity transactions— 0.2 (0.9)— — (0.7)0.1 (0.6)
Balance at 31 December 2021$249.4 $1,112.0 $15,905.2 ($1,452.3)($1,989.2)$13,825.1 $550.5 $14,375.6 
The accompanying notes are an integral part of these statements.

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Air Products and Chemicals, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Millions of U.S. Dollars, unless otherwise indicated

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1. BASIS OF PRESENTATION AND MAJOR ACCOUNTING POLICIES
Basis of Presentation
The interim consolidated financial statements of Air Products and Chemicals, Inc. and its subsidiaries (“we,” “our,” “us,” the “Company,” “Air Products,” or “registrant”) included herein have been prepared by us, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP") have been condensed or omitted pursuant to such rules and regulations. In our opinion, the accompanying statements reflect adjustments necessary to fairly present the financial position, results of operations, and cash flows for those periods indicated and contain adequate disclosures to make the information presented not misleading. Adjustments included herein are of a normal, recurring nature unless otherwise disclosed in the notes to the interim consolidated financial statements.
To fully understand the basis of presentation, the interim consolidated financial statements and related notes included herein should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended 30 September 2022 (the "2022 Form 10-K"), which was filed with the SEC on 22 November 2022. Results of operations for interim periods are not necessarily indicative of the results of operations for a full year.
Major Accounting Policies
Refer to our 2022 Form 10-K for a description of major accounting policies. There have been no significant changes to these accounting policies during the first three months of fiscal year 2023.
Risks and Uncertainties
We are subject to various risks and uncertainties, including, but not limited to, those resulting from the COVID-19 pandemic, increased inflationary pressures, and Russia's invasion of Ukraine. Our results of operations for the periods covered by this report were not materially impacted by these events; however, there is uncertainty regarding how these events and others may affect our business, results of operations, and overall financial performance in future periods, including our ability to complete suspended projects.
Reclassifications
Beginning in the first quarter of fiscal year 2023, we present "Operating lease right-of-use assets, net" and "Noncurrent operating lease liabilities" in separate captions on our consolidated balance sheets. These balances were previously presented within "Other noncurrent assets" and "Other noncurrent liabilities," respectively. Our balance sheet as of 30 September 2022 has been reclassified to conform to the fiscal year 2023 presentation.

2. NEW ACCOUNTING GUIDANCE
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 to our consolidated financial statements. We will adopt this guidance prospectively in our Annual Report for fiscal year 2023.
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 the London Inter-Bank Offered Rate ("LIBOR"). In December 2022, the FASB extended the date through which the amendments may be applied to impacted contracts and hedges to 31 December 2024. We have had no reference rate reform modifications to date. We will adopt this update on a prospective basis in the event of any such modifications.
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3. REVENUE RECOGNITION
The majority of our revenue is generated from our sale of gas customers within the regional industrial gases segments. We distribute gases through either our on-site or merchant supply mode depending on various factors, including the customer's volume requirements and location. We also design and manufacture equipment for air separation, hydrocarbon recovery and purification, natural gas liquefaction, and liquid helium and liquid hydrogen transport and storage. The Corporate and other segment serves our sale of equipment customers.
Disaggregation of Revenue
The table below presents our consolidated sales disaggregated by supply mode for each of our reportable segments for the first quarter of fiscal years 2023 and 2022. We believe this presentation best depicts the nature, timing, type of customer, and contract terms for our sales.
Three Months Ended 31 December 2022
AmericasAsiaEuropeMiddle East
 and India		Corporate
and other		Total%
On-site$845.8 $457.7 $328.1 $18.8 $— $1,650.4 52 %
Merchant538.4 320.1 463.8 22.6 — 1,344.9 42 %
Sale of Equipment— — — — 179.4 179.4 6 %
Total $1,384.2 $777.8 $791.9 $41.4 $179.4 $3,174.7 100 %
Three Months Ended 31 December 2021
AmericasAsiaEuropeMiddle East
 and India		Corporate
and other		Total%
On-site$797.6 $451.6 $325.6 $16.3 $— $1,591.1 53 %
Merchant426.5 328.8 418.6 7.4 — 1,181.3 40 %
Sale of Equipment— — — — 221.8 221.8 7 %
Total $1,224.1 $780.4 $744.2 $23.7 $221.8 $2,994.2 100 %
Remaining Performance Obligations
As of 31 December 2022, the transaction price allocated to remaining performance obligations is estimated to be approximately $23 billion. This amount includes fixed-charge contract provisions associated with our on-site and sale of equipment supply modes. We estimate that approximately half of this revenue will be recognized over the next five years and the balance thereafter.
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; currency exchange rates; and amended, terminated, or renewed contracts.
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Contract Balances
The table below details balances arising from contracts with customers:
31 December30 September
Balance Sheet Location20222022
Assets
Contract assets – currentOther receivables and current assets$81.9 $69.0 
Contract fulfillment costs – currentOther receivables and current assets103.5 84.1 
Liabilities
Contract liabilities – currentPayables and accrued liabilities$424.6 $439.1 
Contract liabilities – noncurrentOther noncurrent liabilities97.4 67.2 
Changes to our contract balances primarily relate to our sale of equipment contracts. During the three months ended 31 December 2022, we recognized sales of approximately $80 associated with sale of equipment contracts that were included within our contract liabilities as of 30 September 2022.
4. INVENTORIES
The components of inventories are as follows:
31 December30 September
20222022
Finished goods$244.7 $162.0 
Work in process25.1 22.0 
Raw materials, supplies, and other365.5 330.2 
Inventories$635.3 $514.2 

5. EQUITY AFFILIATES
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 represents a 55% interest in the joint venture, of which 4% is attributable to the noncontrolling 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 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 31 December 2022, the carrying value of our investment totaled $1,776.5 and is presented as “Investments in net assets of and advances to equity affiliates” on our consolidated balance sheet. Our loss exposure is limited to our investment in the joint venture.
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Subsequent Event
On 19 January 2023, we made an additional investment of $908 toward the second phase of the project as further discussed below. This investment included $73 received from the noncontrolling partner of Air Products Qudra. We expect to complete a remaining investment of approximately $115, including approximately $9 from the non-controlling partner of Air Products Qudra, later this calendar year.
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 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, and the second phase was completed for $4.15 billion on 19 January 2023. We expect final commissioning items to be completed later this calendar year. 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 recorded financing receivables upon acquisition of the assets and is recognizing 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 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.
6. GOODWILL
Changes to the carrying amount of consolidated goodwill by segment for the three months ended 31 December 2022 are as follows:
AmericasAsiaEuropeMiddle East
 and India		Corporate
and other		Total
Goodwill, net at 30 September 2022$143.2 $172.7 $457.5 $15.8 $33.8 $823.0 
Currency translation and other5.6 4.2 43.1 — 0.4 53.3 
Goodwill, net at 31 December 2022$148.8 $176.9 $500.6 $15.8 $34.2 $876.3 

31 December30 September
20222022
Goodwill, gross$1,188.1 $1,096.0 
Accumulated impairment losses(A)
(311.8)(273.0)
Goodwill, net$876.3 $823.0 
(A)Accumulated impairment losses include the impacts of currency translation. 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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7. FINANCIAL INSTRUMENTS
Currency Price Risk Management
Our earnings, cash flows, and financial position are exposed to foreign currency risk from foreign currency-denominated transactions and net investments in foreign operations. It is our policy to seek to minimize our cash flow volatility from changes in currency exchange rates. This is accomplished by identifying and evaluating the risk that our cash flows will change in value due to changes in exchange rates and by executing strategies necessary to manage such exposures. Our objective is to maintain economically balanced currency risk management strategies that provide adequate downside protection.
Forward Exchange Contracts
We enter into forward exchange contracts to reduce the cash flow exposure to foreign currency fluctuations associated with highly anticipated cash flows and certain firm commitments, such as the purchase of plant and equipment. We also enter into forward exchange contracts to hedge the cash flow exposure on intercompany loans and third-party debt. This portfolio of forward exchange contracts consists primarily of Euros and U.S. Dollars. The maximum remaining term of any forward exchange contract currently outstanding and designated as a cash flow hedge at 31 December 2022 is 3.5 years.
Forward exchange contracts are also used to hedge the value of investments in certain foreign subsidiaries and affiliates by creating a liability in a currency in which we have a net equity position. The primary currency pair in this portfolio of forward exchange contracts is Euros and U.S. Dollars.
We also utilize forward exchange contracts that are not designated as hedges. These contracts are used to economically hedge foreign currency-denominated monetary assets and liabilities, primarily working capital. The primary objective of these forward exchange contracts is to protect the value of foreign currency-denominated monetary assets and liabilities from the effects of volatility in foreign exchange rates that might occur prior to their receipt or settlement. This portfolio of forward exchange contracts consists of many different foreign currency pairs, with a profile that changes from time to time depending on our business activity and sourcing decisions.
The table below summarizes our outstanding currency price risk management instruments:
31 December 202230 September 2022
US$
Notional		Years
Average
Maturity		US$
Notional		Years
Average
Maturity
Forward Exchange Contracts:
Cash flow hedges$4,877.6 0.6$4,525.0 0.7
Net investment hedges616.5 1.9542.2 2.2
Not designated408.2 0.2534.3 0.3
Total Forward Exchange Contracts$5,902.3 0.7$5,601.5 0.8
We also use foreign currency-denominated debt to hedge the foreign currency exposures of our net investment in certain foreign subsidiaries. The designated foreign currency-denominated debt and related accrued interest was €1,280.5 million ($1,370.7) at 31 December 2022 and €1,265.4 million ($1,240.4) at 30 September 2022. The designated foreign currency-denominated debt is presented within "Long-term debt" on the consolidated balance sheets.
Debt Portfolio Management
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, we manage our debt portfolio and hedging program 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.
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Interest Rate Management Contracts
We enter into interest rate swaps to change the fixed/variable interest rate mix of our debt portfolio in order to maintain the percentage of fixed- and variable-rate debt within the parameters set by management. In accordance with these parameters, the agreements are used to manage interest rate risks and costs inherent in our debt portfolio. Our interest rate management portfolio generally consists of fixed-to-floating interest rate swaps (which are designated as fair value hedges), pre-issuance interest rate swaps and treasury locks (which hedge the interest rate risk associated with anticipated fixed-rate debt issuances and are designated as cash flow hedges), and floating-to-fixed interest rate swaps (which are designated as cash flow hedges). As of 31 December 2022, the outstanding interest rate swaps were denominated in U.S. Dollars. The notional amount of the interest rate swap agreements is equal to or less than the designated debt being hedged. When interest rate swaps are used to hedge variable-rate debt, the indices of the swaps and the debt to which they are designated are the same. It is our policy not to enter into any interest rate management contracts which lever a move in interest rates on a greater than one-to-one basis.
Cross Currency Interest Rate Swap Contracts
We enter into cross currency interest rate swap contracts when our risk management function deems necessary. These contracts may entail both the exchange of fixed- and floating-rate interest payments periodically over the life of the agreement and the exchange of one currency for another currency at inception and at a specified future date. 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 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:
31 December 202230 September 2022
US$
Notional		Average
Pay %		Average
Receive
%		Years
Average
Maturity		US$
Notional		Average
Pay %		Average
Receive
%		Years
Average
Maturity
Interest rate swaps
(fair value hedge)		$800.0 Various1.64 %4.8$800.0 Various1.64 %5.0
Cross currency interest rate swaps
(net investment hedge)		$131.0 3.67 %2.93 %1.3$176.7 4.12 %3.07 %1.2
Cross currency interest rate swaps
(cash flow hedge)		$741.9 4.82 %2.92 %2.2$785.7 4.78 %3.05 %2.3
Cross currency interest rate swaps
(not designated)		$39.4 5.39 %3.54 %0.9$37.7 5.39 %3.54 %1.2
The table below provides the amounts recorded on the consolidated balance sheet related to cumulative basis adjustments for fair value hedges:
Carrying amounts of hedged itemCumulative hedging adjustment, included in carrying amount
31 December30 September31 December30 September
Balance Sheet Location2022202220222022
Long-term debt$2,017.8 $2,012.9 ($72.7)($77.1)
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The table below summarizes the fair value and balance sheet location of our outstanding derivatives:
Balance Sheet31 December30 SeptemberBalance Sheet31 December30 September
Location20222022Location20222022
Derivatives Designated as Hedging Instruments:
Forward exchange contractsOther receivables and current assets$85.0 $71.6 Payables and accrued liabilities$79.5 $226.2 
Interest rate management contractsOther receivables and current assets16.8 36.7 Payables and accrued liabilities1.5 — 
Forward exchange contractsOther noncurrent assets26.8 60.8 Other noncurrent liabilities6.6 46.9 
Interest rate management contractsOther noncurrent assets8.8 12.5 Other noncurrent liabilities99.0 91.2 
Total Derivatives Designated as Hedging Instruments$137.4 $181.6 $186.6 $364.3 
Derivatives Not Designated as Hedging Instruments:
Forward exchange contractsOther receivables and current assets3.1 6.1 Payables and accrued liabilities2.2 2.1 
Interest rate management contractsOther receivables and current assets0.5 — Payables and accrued liabilities— — 
Forward exchange contractsOther noncurrent assets— 0.1 Other noncurrent liabilities— 0.1 
Interest rate management contractsOther noncurrent assets— 1.3 Other noncurrent liabilities— — 
Total Derivatives Not Designated as Hedging Instruments$3.6 $7.5 $2.2 $2.2 
Total Derivatives$141.0 $189.1 $188.8 $366.5 
Refer to Note 8, Fair Value Measurements, which defines fair value, describes the method for measuring fair value, and provides additional disclosures regarding fair value measurements.
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Table of Contents
The tables below summarize gains (losses) recognized in other comprehensive income during the period related to our net investment and cash flow hedging relationships:
Three Months Ended
31 December
20222021
Net Investment Hedging Relationships
Forward exchange contracts($47.1)$14.5 
Foreign currency debt(115.3)27.6 
Cross currency interest rate swaps(10.6)(2.3)
Total Amount Recognized in OCI(173.0)39.8 
Tax effects42.5 (9.8)
Net Amount Recognized in OCI($130.5)$30.0 
Three Months Ended
31 December
20222021
Derivatives in Cash Flow Hedging Relationships
Forward exchange contracts$188.8