We are the primary beneficiary of the NEOM Green Hydrogen Company joint venture ("NGHC"), 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.

Our other material VIEs are those in which we hold variable interests but are not the primary beneficiary. We have an equity interest and exercise significant influence in the Jazan Integrated Gasification and Power Company joint venture ("JIGPC"), which we account for as an equity method investment in our Middle East and India segment. We have no equity interest in World Energy, LLC ("World Energy"), but hold a variable interest through a financing receivable that was fully reserved in connection with our exit from the sustainable aviation fuel expansion project during the second quarter of fiscal year 2025.

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.

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.

Under the project financing discussed below, 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 14.

In May 2023, NGHC finalized the $6.7 billion engineering, procurement, and construction agreement, naming Air Products as the main contractor and system integrator for the facility. To support the project, NGHC secured project financing that is non-recourse to Air Products of approximately $6.1 billion, which is expected to fund about 73% of the project and is being drawn over the construction period. At the same time, NGHC secured additional credit facilities totaling approximately $500, primarily for NGHC's working capital needs. These facilities are also non-recourse to Air Products. Total principal borrowings were $5.3 billion and $4.9 billion as of 31 December 2025 and 30 September 2025, respectively. Long-term principal borrowings of approximately $365 during the first quarter of fiscal year 2026 were primarily drawn under a 2.00% stated-rate Saudi Riyal facility.

The borrowings discussed above are primarily from long-term facilities that are presented net of unamortized discounts and debt issuance costs within "Long-term debt" on our consolidated balance sheets. Short-term borrowings were $36.7 and $24.0 as of 31 December 2025 and 30 September 2025, respectively, under a variable-rate Saudi Riyal facility that carried an interest rate of 5.00% as of 31 December 2025.

In May 2023, NGHC entered into floating-to-fixed interest rate swaps designed to hedge long-term variable-rate debt facilities available under the project financing during the construction period. In fiscal year 2024, we discontinued cash flow hedge accounting for certain swaps due to changes in the anticipated drawdown timeline for the hedged borrowings. As a result, unrealized gains and losses for the de-designated swaps were recorded to "Other non-operating income (expense), net" on our consolidated income statements. During the first quarter of fiscal year 2025, we recorded an unrealized gain of $38.8 ($10.3 attributable to Air Products after tax), with $25.2 attributable to our noncontrolling partners.

We re-designated the affected swaps as outstanding borrowings under the available project financing became commensurate with the swaps’ notional values. The unrealized gain on swaps that remained de-designated during the first quarter of fiscal year 2026 was not material. As of 1 January 2026, all swaps have been re-designated as cash flow hedges.


	31 December	30 September
	2025	2025
Assets
Cash and cash items	$128.7	$40.3

Trade receivables, net	1.4	1.1

Prepaid expenses	18.0	20.7
Other receivables and current assets	133.5	107.2
Total Current Assets	$281.6	$169.3



Plant and equipment, net	6,995.2	6,593.9


Operating lease right-of-use assets, net	213.5	218.0


Other noncurrent assets	194.3	153.5
Total Noncurrent Assets	$7,403.0	$6,965.4
Total Assets	$7,684.6	$7,134.7
Liabilities
Payables and accrued liabilities	$201.1	$201.7
Accrued income taxes	3.0	1.2
Short-term borrowings	36.7	24.0

Total Current Liabilities	$240.8	$226.9
Long-term debt	5,027.1	4,677.6

Noncurrent operating lease liabilities	17.9	17.8
Other noncurrent liabilities	2.0	1.6
Deferred income taxes	17.0	13.8
Total Noncurrent Liabilities	$5,064.0	$4,710.8
Total Liabilities	$5,304.8	$4,937.7
Equity
Accumulated other comprehensive income	$48.8	$38.3
Noncontrolling interests	1,580.2	1,493.6

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.

Our loss exposure is limited to the carrying value of our investment in the joint venture which, including amounts attributable to noncontrolling interests, totaled $3.1 billion as of both 31 December 2025 and 30 September 2025.

Our total investment in JIGPC 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 purchased a sustainable aviation fuel (“SAF”) facility in Paramount, California, from World Energy and accounted for the transaction as a financing arrangement because the agreement contained an embedded sales-type lease. Additionally, we entered into a Master Project Agreement ("MPA") that included 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. We determined that World Energy is a VIE, and our financing receivable represented a variable interest in World Energy. We are not the primary beneficiary as we did not control key operating decisions.

In February 2025, we terminated the MPA and announced our decision to exit the project. Cumulative project exit charges recorded in connection with this decision totaled approximately $1.9 billion through 31 December 2025, the majority of which were recognized in the second quarter of fiscal year 2025 and primarily related to the write-down of plant and equipment. These project exit charges were recorded with other business and asset actions discussed in Note 4, Business and Asset Actions.

We have no further loss exposure related to our variable interest in World Energy as of 31 December 2025; however, future impacts to earnings may occur as we finalize our exit from the project. Estimates used to calculate the charges reflect our best judgment based on information available as of 31 December 2025.