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. During the first quarter of fiscal year 2024, we determined that 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.

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. We intend to transport the green ammonia around the world to be dissociated to produce green hydrogen for transportation and industrial markets.

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.

In May 2023, NGHC finalized the $6.7 billion engineering, procurement, and construction ("EPC") agreement with Air Products named as the main contractor and system integrator for the facility. NGHC secured non-recourse project financing 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 non-recourse credit facilities totaling approximately $500 primarily for working capital needs. Under the financing, 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 78.

NGHC completed its first drawdown on the project financing in July 2023. As of 30 September 2024 and 2023, total principal borrowings were $3,323.4 and $1,364.8, respectively. The balance as of 30 September 2024 includes short-term borrowings of $51.6 from a 6.21% variable rate Saudi Riyal facility. The remaining borrowings include the long-term facilities below, which are reflected net of unamortized discounts and debt issuance costs within "Long-term debt" on our consolidated balance sheets.


30 September	Fiscal Year Maturities	2024	2023
Payable in U.S. Dollars
U.S. Dollar variable-rate facilities 6.17%(A)	2027 to 2053	$1,945.2	$1,094.9
U.S. Dollar variable-rate facility 5.82%(A)	2027 to 2041	345.5	—
U.S. Dollar stated-rate facility 5.00%	2027 to 2053	245.9	138.5
Total Payable in U.S. Dollars		$2,536.6	$1,233.4
Payable in Other Currencies
Saudi Riyal Loan Facility variable-rate 6.69%(B)	2025 to 2027	—	131.4
Saudi Riyal Loan Facility stated-rate facility 2.00%	2028 to 2041	735.2	—
Total Principal Amount		$3,271.8	$1,364.8
Less: Unamortized discount and debt issuance costs(C)		218.5	90.4
Total NGHC Long-term Debt		$3,053.3	$1,274.4

(A)Reflects a daily compounded SOFR as of 30 September 2024 plus an annual margin of 1.31% and 0.96%, respectively. These rates do not include the impact of our floating-to-fixed interest rate swaps, which result in an overall lower interest rate for the borrowings. Additional information is provided below.

(C)Our consolidated balance sheets as of 30 September 2024 and 2023 also included $4.6 and $58.8, respectively, for remaining project financing fees that were eligible for deferral as a noncurrent asset. Once additional borrowings are drawn, the unamortized balance is reclassified as an offset to the outstanding debt.

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. For the fiscal year ended 30 September 2024, unrealized losses were $16.3 ($4.3 attributable to Air Products after tax). Unrealized losses attributable to our noncontrolling partners were $10.6. Refer to Note 15, Financial Instruments, for additional information.

The green hydrogen-based ammonia production facility is being constructed on land owned by our joint venture partner, NEOM Company, for which NGHC signed a 50-year lease agreement. The land lease commenced during the third quarter of fiscal year 2023. Accordingly, we recorded an operating lease with a right-of-use asset and corresponding liability of $223, of which $209 was paid as a lump-sum in August 2023. Additional payments under the lease will occur after the first 30 years of the lease term.



30 September	2024	2023
Assets
Cash and cash items	$34.5	$78.2

Trade receivables, net	6.7	—

Prepaid expenses	31.2	21.4
Other receivables and current assets	120.6	181.6
Total current assets	$193.0	$281.2



Plant and equipment, net	3,929.9	1,396.1


Operating lease right-of-use assets, net	233.9	228.9


Other noncurrent assets	37.1	350.6
Total noncurrent assets	$4,200.9	$1,975.6
Total assets	$4,393.9	$2,256.8
Liabilities
Payables and accrued liabilities	$308.4	$141.0
Accrued income taxes	2.0	0.6
Short-term borrowings	51.6	—

Total current liabilities	$362.0	$141.6
Long-term debt	3,053.3	1,274.4

Noncurrent operating lease liabilities	24.5	18.9
Other noncurrent liabilities	30.4	2.1
Deferred income taxes	3.2	24.1
Total noncurrent liabilities	$3,111.4	$1,319.5
Total liabilities	$3,473.4	$1,461.1
Equity
Accumulated other comprehensive income	$13.8	$77.7
Noncontrolling interests	937.6	723.6

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. The carrying value of our investment, including amounts attributable to noncontrolling interests, totaled $2,871.2 and $2,862.2 as of 30 September 2024 and 30 September 2023, respectively. Our loss exposure is limited to our investment in the joint venture.

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.

In November 2023, we finalized an agreement to purchase a sustainable aviation fuel (“SAF”) facility in Paramount, California from World Energy. We determined the acquisition contains an embedded sales-type lease. As a result, we are accounting for the transaction as a financing arrangement and recorded a financing receivable, which had a carrying value of approximately $300 as of 30 September 2024.

At the time of acquisition, we entered into a Master Project Agreement (“MPA”) containing 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 includes a tolling arrangement whereby we will receive feedstock from and produce renewable fuels for World Energy over a term that will conclude 15 years after onstream of the expansion project with the option to renew for two five-year terms. The SAF expansion project is currently on hold pending receipt of permits.

During the first quarter of fiscal year 2024, we determined that World Energy is a VIE and our financing receivable represents 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. As of 30 September 2024, our maximum exposure to loss is approximately $2 billion. This includes project-related spending of approximately $1.5 billion, of which $1.2 billion is capitalized within “Plant and equipment, net” and $330 is deferred within "Other noncurrent assets", and approximately $215 for open purchase commitments, all of which relate to the SAF expansion project. Our exposure also includes the financing receivable of $300 discussed above, which we begin to collect at the onstream of the expansion project, as well as related accrued interest, which accrues monthly. Accrued interest was not material as of 30 September 2024.