Supplemental Information

3 Months Ended

Dec. 31, 2024

Disclosure Text Block Supplement [Abstract]

Supplemental Information

SUPPLEMENTAL INFORMATION

Related Party Transactions

We have related party sales to certain of our equity affiliates and joint venture partners as well as other income primarily from fees charged for use of Air Products' patents and technology. Sales to and other income from related parties totaled approximately $80 and $95 for the three months ended 31 December 2024 and 2023, respectively. Sales agreements with related parties include terms that are consistent with those that we believe would have been negotiated at an arm’s length with an independent party. As of 31 December 2024 and 30 September 2024, our consolidated balance sheets included related party trade receivables of approximately $185 and $120, respectively.

Total debt owed to related parties was $292.7 and $304.4 as of 31 December 2024 and 30 September 2024, respectively, of which $192.3 and $200.0, respectively, was reflected within "Current portion of long-term debt" on our consolidated balance sheets. Our related party debt primarily includes a loan with our joint venture partner, Lu’An Clean Energy Company.

Shareholder Activism Costs

During the first quarter of fiscal year 2025, we incurred costs of $29.9 ($21.9 after tax) in connection with our response to a proxy contest. These costs, which are reflected on our consolidated income statement as “Shareholder activism costs”, include legal and other professional service fees as well as incremental proxy solicitation costs related to the 2025 Annual Meeting of Shareholders. As of 31 December 2024, $15.4 remained accrued within “Payables and accrued liabilities” on our consolidated balance sheet.

Uzbekistan Asset Purchase

On 25 May 2023, we entered into an investment agreement with the Government of the Republic of Uzbekistan and Uzbekneftegaz JSC (“UNG”) to purchase a natural gas-to-syngas processing facility in Qashqadaryo Province, Uzbekistan, for $1 billion. Under the agreement, Air Products will acquire, own, and operate the facility and supply all offtake products to UNG under a 15-year on-site contract, with UNG supplying the feedstock natural gas and utilities. Throughout this term, we receive a fixed monthly fee (regardless of whether UNG requires the output) comprised of two components: a plant capacity fee and an operating and maintenance fee.

We are accounting for the transaction as a financing arrangement as we did not obtain accounting control of the facility due to UNG having the unilateral right to reacquire the facility at the end of the contract term. The repurchase price on a discounted basis, which consists of the total monthly plant capacity fees received over the term of the arrangement plus the repurchase option price, exceeds our purchase price. Accordingly, our progress payments are reflected within "Financing receivables" on our consolidated balance sheets. Financing receivables associated with the Uzbekistan transaction were approximately $945 and $920 as of 31 December 2024 and 30 September 2024, respectively.

Accrual for Business and Asset Actions

We initiated a global cost reduction plan in 2023 that provides involuntarily separated employees with severance and other postemployment benefits per our ongoing benefit arrangements. Costs incurred in connection with the plan totaled $84.0 through fiscal year 2024 for approximately 1,100 eligible employees globally. These costs, which were not recorded in segment results, were reflected within “Business and asset actions” on our consolidated income statements in fiscal years 2023 and 2024. We did not record any costs related to the plan during the first quarter of fiscal year 2025.

As of 30 September 2024, the liability for unpaid benefits reflected within "Payables and accrued liabilities" on our consolidated balance sheet was $34.0 and primarily related to employees identified in 2024. The table below reconciles this balance to the remaining liability as of 31 December 2024, the majority of which we expect to pay during the second quarter of fiscal year 2025.

Amount accrued as of 30 September 2024	$34.0
Cash payments	(10.4)
Currency translation adjustment	(1.3)
Amount accrued as of 31 December 2024	$22.3

Changes in Estimates

Changes in estimates on sale of equipment projects accounted for under the cost incurred input method are recognized as a cumulative adjustment for the inception-to-date effect of such change. We recorded changes to project revenue and cost estimates that unfavorably impacted operating income by approximately $28 and $30 during the first quarter of fiscal years 2025 and 2024, respectively.

Income Taxes

Our effective tax rate was 17.8% and 17.9% for the three months ended 31 December 2024 and 2023, respectively.

Income tax payments, net of refunds, were $123.6 and $90.1 for the three months ended 31 December 2024 and 2023, respectively.