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Equity Affiliates
12 Months Ended
Sep. 30, 2023
Equity Method Investments and Joint Ventures [Abstract]  
Equity Affiliates EQUITY AFFILIATES
"Investment in net assets of and advances to equity affiliates" on our consolidated balance sheets were $4,617.8 and $3,353.8 as of 30 September 2023 and 2022, respectively. Substantially all our equity method investments are foreign affiliates.
As of 30 September 2023, our equity affiliates were as follows:
Abdullah Hashim Industrial Gases & Equipment Co., Ltd. (25%);
INFRA Group (40%);
Air Products South Africa (Proprietary) Limited (50%);
INOX Air Products Private Limited (50%);
Bangkok Cogeneration Company Limited (49%);
Jazan Integrated Gasification and Power Company (51%);
Bangkok Industrial Gases Co., Ltd. (49%);
Kulim Industrial Gases Sdn. Bhd. (50%);
Chengdu Air & Gas Products Ltd. (50%);
Sapio Produzione Idrogeno Ossigeno S.r.l. (49%);
Helios S.p.A. (49%);
and principally, other industrial gas producers.
Dividends and other distributions received from equity affiliates were $344.3, $285.1, and $157.3 in fiscal years 2023, 2022, and 2021, respectively.
As of 30 September 2023 and 2022, the amount of investment in companies accounted for by the equity method included equity method goodwill of $41.3 and $44.6, respectively.
Summarized Financial Information
The summarized financial information presented below is on a combined 100% basis and has been compiled based on the financial statements of our equity affiliates.
30 September  20232022
Current assets$3,097.1 $2,454.6 
Noncurrent assets14,468.2 9,805.6 
Current liabilities1,145.7 939.0 
Noncurrent liabilities 11,934.0 7,713.5 
Fiscal Year Ended 30 September202320222021
Net sales(A)
$5,192.9 $4,124.4 $3,338.1 
Gross profit2,465.5 1,894.0 1,492.9 
Operating income1,847.4 1,320.1 962.2 
Net income1,062.9 895.1 646.0 
(A)Includes financing revenue of $1,011.3, $674.6, and $134.9 in fiscal years 2023, 2022, and 2021, respectively. Financing revenue in fiscal years 2023 and 2022 primarily relates to the JIGPC joint venture discussed below.
Investment in Jazan Integrated Gasification and Power Company (“JIGPC”)
During the first quarter of fiscal year 2022, we made an initial investment of $1.6 billion to acquire a 55% ownership interest in the Jazan Integrated Gasification and Power Company ("JIGPC") joint venture of which 4% is attributable to the noncontrolling partner of Air Products Qudra ("APQ"). During the second quarter of fiscal year 2023, we completed a second investment of $908, which did not change our ownership interest. Additional information on the JIGPC joint venture is provided below.
Our investments were made primarily in the form of shareholder loans that qualify as in-substance common stock in the joint venture and were executed to align with the timing of the joint venture's purchase of project assets. The amounts invested included approximately $130 and $73 received from the noncontrolling partner of APQ for the first and second investment, respectively. As of 30 September 2023, the carrying value of our investment in JIGPC, including amounts attributable to noncontrolling interests, totaled $2,862.2. We expect to complete a remaining investment of approximately $115 for additional assets to be purchased by 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 beginning in the first quarter of fiscal year 2022. Our loss exposure is limited to our investment 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.
JIGPC Joint Venture
JIGPC is a joint venture with Saudi Aramco Power Company (a subsidiary of Aramco), ACWA Power, and APQ in the Jazan Economic City, Saudi Arabia. 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 multiple phases. The first phase was completed on 27 October 2021 for $7.39 billion, and the second phase was completed for $4.15 billion on 19 January 2023. We expect JIGPC to acquire additional assets totaling approximately $525. 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 recognizes financing income over the supply term.
Jazan Gas Project Company
Jazan Gas Project Company (“JGPC”), a previous joint venture between Air Products and ACWA Holding, had a 20-year agreement to supply oxygen and nitrogen to Aramco’s oil refinery and power plant in Jazan. The parties terminated the supply agreement in October 2021, and JGPC sold its air separation units to Aramco. We initially sold these assets to JGPC and deferred profit proportionate to our 26% 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. Additionally, our consolidated statement of cash flows for fiscal year 2022 includes a noncash adjustment of $94.4 to reduce the carrying value of our investment in JGPC to zero and remove an obligation to make equity contributions to JGPC under an equity bridge loan that was no longer required.
Equity Method Investment Impairment
During the fourth quarter of fiscal year 2022, we determined there was an other-than-temporary impairment in two small equity affiliates in the Asia segment. As a result, we recorded a noncash charge of $14.8 to write down the full carrying value of the investments. This charge is reflected on our consolidated income statements within “Equity affiliates' income” and was not recorded in segment results.