XML 41 R26.htm IDEA: XBRL DOCUMENT v3.25.1
Supplemental Information
 6 Months Ended
Mar. 31, 2025
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 $70 and $150 for the three and six months ended 31 March 2025, respectively, and $75 and $170 for the three and six months ended 31 March 2024, 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 March 2025 and 30 September 2024, our consolidated balance sheets included related party trade receivables of approximately $155 and $120, respectively.
Total debt owed to related parties was $294.4 and $304.4 as of 31 March 2025 and 30 September 2024, respectively, of which $193.5 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-Related Costs
During the first half of fiscal year 2025, we recorded costs in connection with a proxy contest led by an activist shareholder that concluded in January upon certification of the election of directors following our 2025 Annual Meeting of Shareholders. These costs, which are reflected as "Shareholder activism-related costs" on our consolidated income statements, totaled $31.4 ($31.0 after tax) and $61.3 ($52.9 after tax) for the three and six months ended 31 March 2025, respectively.
The costs incurred during the second quarter primarily reflect executive separation costs for our former CEO following the appointment of our new CEO by the Board of Directors. These costs included a noncash expense of $22.4 to accelerate vesting of share-based awards and $7.3 for severance and other cash benefits that were paid during the quarter.
On a year-to-date basis, shareholder activism-related costs also include legal and other professional service fees as well as incremental proxy solicitation costs related to the 2025 Annual Meeting of Shareholders, which were mostly incurred during the first quarter. We paid all remaining liabilities for these items during the second quarter of fiscal year 2025.
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 owns and operates the acquired facility and is supplying 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 payments related to the facility are reflected within "Financing receivables" on our consolidated balance sheets. Financing receivables associated with the Uzbekistan transaction were approximately $965 and $920 as of 31 March 2025 and 30 September 2024, respectively.
Divestitures
Blue Hydrogen Industrial Gases Company
In January 2025, our 51%-owned consolidated subsidiary, Air Products Qudra ("APQ"), issued equity in its wholly-owned subsidiary, Blue Hydrogen Industrial Gases Company ("BHIG"), to form a 50/50 joint venture with Saudi Aramco Development Company (a subsidiary of Aramco). BHIG is currently constructing plants and pipelines to distribute hydrogen, nitrogen and oxygen in Saudi Arabia’s Jubail Industrial City.
As a result of the transaction, we determined that APQ no longer holds a controlling financial interest in BHIG. Accordingly, the assets and liabilities associated with the entity were derecognized from our consolidated balance sheet during the second quarter of fiscal year 2025. Amounts derecognized primarily included plant and equipment of approximately $600 and long-term debt, net of deferred financing costs, of approximately $655.
While we no longer control BHIG, we maintain the ability to exercise significant influence regarding key decisions. Accordingly, we recorded an equity method investment for APQ's 50% interest in the entity. This investment is reflected within "Investment in net assets of and advances to equity affiliates" on our consolidated balance sheet and totaled $149.8 as of 31 March 2025.
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 loss by approximately $15 and $45 for the second quarter and first six months of fiscal year 2025, respectively, and operating income by approximately $35 and $65 for the second quarter and first six months of fiscal year 2024, respectively.