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Business Segment and Geographic Information
 12 Months Ended
Sep. 30, 2015
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract]  
Business Segment and Geographic Information

26.  Business Segment and Geographic Information

The Company began operating under a new structure effective 1 October 2014. Our new reporting segments reflect the manner in which our chief operating decision maker reviews results and allocates resources. Except in the Corporate and other segment, each reporting segment meets the definition of an operating segment and does not include the aggregation of multiple operating segments. Our liquefied natural gas (LNG) and helium storage and distribution sale of equipment businesses are aggregated within the Corporate and other segment. The prior year information presented has been restated to conform with the fiscal year 2015 presentation.

The new reporting segments are:

  • Industrial Gases – Americas
  • Industrial Gases – EMEA (Europe, Middle East, and Africa)
  • Industrial Gases – Asia
  • Industrial Gases – Global
  • Materials Technologies
  • Energy-from-Waste
  • Corporate and other

Industrial Gases – Regional

The regional Industrial Gases (Americas, EMEA, Asia) segments include the results of our regional industrial gas businesses, which produce and sell atmospheric gases such as oxygen, nitrogen, and argon (primarily recovered by the cryogenic distillation of air) and process gases such as hydrogen, carbon monoxide, helium, syngas, and specialty gases. We supply gases to customers in many industries, including those in metals, glass, chemical processing, energy production and refining, food processing, metallurgical industries, medical, and general manufacturing. We distribute gases to our customers through a variety of supply modes including liquid or gaseous bulk supply delivered by tanker or tube trailer and, for smaller customers, packaged gases delivered in cylinders and dewars or small on-sites (cryogenic or non-cryogenic generators). For large-volume customers, we construct an on-site plant adjacent to or near the customer’s facility or deliver product from one of our pipelines. We are the world’s largest provider of hydrogen, which is used by refiners to facilitate the conversion of heavy crude feedstock and lower the sulfur content of gasoline and diesel fuels.

Electricity is the largest cost component in the production of atmospheric gases, and natural gas is the principal raw material for hydrogen, carbon monoxide, and syngas production. We mitigate energy and natural gas prices contractually through pricing formulas, surcharges, and cost pass-through arrangements. The regional Industrial Gases segments also include our share of the results of several joint ventures accounted for by the equity method. The largest of these joint ventures operate in Mexico, Italy, South Africa, India, Saudi Arabia, and Thailand. Each of the regional Industrial Gases segments competes against global industrial gas companies as well as regional competitors. Competition is based primarily on price, reliability of supply, and the development of industrial gas applications. We derive a competitive advantage in locations where we have pipeline networks, which enable us to provide reliable and economic supply of products to larger customers.

Industrial Gases – Global

The Industrial Gases – Global segment includes cryogenic and gas processing equipment sales for air separation. The equipment is sold worldwide to customers in a variety of industries, including chemical and petrochemical manufacturing, oil and gas recovery and processing, and steel and primary metals processing. The Industrial Gases – Global segment also includes centralized global costs associated with management of all the Industrial Gases segments. These costs include Industrial Gases global administrative costs, product development costs, and research and development costs. We compete with a large number of firms for all the offerings included in the Industrial Gases – Global segment. Competition in the equipment businesses is based primarily on technological performance, service, technical know-how, price, and performance guarantees.

Materials Technologies

The Materials Technologies segment employs applications technology to provide solutions to a broad range of global industries through chemical synthesis, analytical technology, process engineering, and surface science. This segment provides specialty gases, specialty chemicals, services, and equipment to the electronics industry primarily for the manufacture of silicon and compound semiconductors and thin film transistor liquid crystal (LCD) displays. The Materials Technologies segment also provides performance chemical solutions for the coatings, inks, adhesives, construction and civil engineering, personal care, institutional and industrial cleaning, mining, oil refining, and polyurethanes industries. We compete in the businesses included in the Materials Technologies segment on a product-by-product basis against competitors ranging from niche suppliers with a single product to larger and more vertically integrated companies. Competition is principally conducted on the basis of price, quality, product performance, reliability of product supply, technical innovation, service, and global infrastructure.

On 16 September 2015, the Company announced that it intends to separate this segment via a spin-off. Refer to Note 3, Materials Technologies Separation, for additional information.

Energy-from-Waste

The Energy-from-Waste segment consists of two projects that are under construction in Tees Valley, United Kingdom. These projects are designed to process municipal solid waste to generate renewable power for customers under long-term contracts.

In 2015, due to continued technical challenges, on-stream delays, and additional capital commitments for these projects, we performed an evaluation to determine whether impairment for this asset group exists. Factors specific to this asset group include estimating long term efficiency, output and on-stream reliability of the projects. The evaluation indicated that the probability weighted undiscounted cash flows of the asset group exceed the carrying value; therefore, no impairment was indicated. In November 2015, the Company suspended construction of the second project until certain design issues of the first project are understood, remediated, and can be efficiently integrated into the design of the second project. It is reasonably possible that key assumptions or actual conditions may change and result in a future impairment charge.

Corporate and other

The Corporate and other segment includes two ongoing global businesses (our LNG sale of equipment business and our liquid helium and liquid hydrogen transport and storage container businesses), the polyurethane intermediates (PUI) business that was exited in early fiscal year 2014, and corporate support functions that benefit all the segments. Competition for the two sale of equipment businesses is based primarily on technological performance, service, technical know-how, price, and performance guarantees. Corporate and other also includes income and expense that cannot be directly associated with the business segments, including foreign exchange gains and losses and stranded costs resulting from discontinued operations. Also included are LIFO inventory adjustments, as the business segments use FIFO, and the LIFO pool adjustments are not allocated to the business segments.

In addition to assets of the global businesses included in this segment, other assets include cash, deferred tax assets, and financial instruments.

Customers

We do not have a homogeneous customer base or end market, and no single customer accounts for more than 10% of our consolidated revenues.

Accounting Policies

The accounting policies of the segments are the same as those described in Note 1, Major Accounting Policies. We evaluate the performance of segments based upon reported segment operating income.

Business Segment
IndustrialIndustrialIndustrialIndustrialEnergy-
Gases–Gases–Gases–Gases–Materialsfrom-CorporateSegment
AmericasEMEAAsiaGlobalTechnologiesWasteand otherTotal
2015
Sales to external customers$3,693.9$1,864.9$1,637.5$286.8$2,087.1$-$324.7$9,894.9
Operating income (loss)808.4330.7380.5(51.6)476.7(10.1)(50.6)1,884.0
Depreciation and amortization416.9194.3202.916.592.8-13.0936.4
Equity affiliates' income (loss)64.642.446.1(.8)2.2--154.5
Expenditures for long-lived assets414.5215.6402.594.8102.5349.235.71,614.8
Investments in net assets of and
advances to equity affiliates249.7564.1421.714.315.9--1,265.7
Total assets5,774.93,323.94,154.0370.51,741.9894.41,178.517,438.1
2014
Sales to external customers$4,078.5$2,150.7$1,527.0$296.0$2,064.6$-$322.2$10,439.0
Operating income (loss)762.6351.2310.4(57.3)379.0(12.4)(77.0)1,656.5
Depreciation and amortization414.4220.2205.37.199.1-10.8956.9
Equity affiliates' income60.944.138.05.82.6--151.4
Expenditures for long-lived assets484.2239.1430.377.764.2321.567.21,684.2
Investments in net assets of and
advances to equity affiliates234.3552.9434.118.817.8--1,257.9
Total assets6,240.73,521.04,045.6389.41,835.7591.91,154.817,779.1
2013
Sales to external customers$3,866.1$2,102.8$1,613.9$309.0$1,870.3$-$418.3$10,180.4
Operating income (loss)776.7331.2329.3(56.5)279.5(9.8)(84.3)1,566.1
Depreciation and amortization409.8202.6174.95.5107.7-6.5907.0
Equity affiliates' income70.947.745.01.42.8--167.8
Expenditures for long-lived assets438.2216.4389.570.358.1290.960.81,524.2
Investments in net assets of and
advances to equity affiliates195.9545.8418.717.517.6--1,195.5
Total assets6,666.53,694.73,766.6365.51,864.6297.51,192.217,847.6

Below is a reconciliation of segment total operating income to consolidated operating income:
Operating Income201520142013
Segment total$1,884.0$1,656.5$1,566.1
Business restructuring and cost reduction actions(207.7)(12.7)(231.6)
Pension settlement loss(21.2)(5.5)-
Goodwill and intangible asset impairment charge-(310.1)-
Business separation costs(7.5)--
Gain on previously held equity interest17.9--
Advisory costs--(10.1)
Gain on land sales(A)33.6--
Consolidated Total$1,699.1$1,328.2$1,324.4
(A)Reflected on the consolidated income statements in "Other income (expense), net."

The sales information noted above relates to external customers only. All intersegment sales are eliminated in consolidation. The Industrial Gases – Global segment had intersegment sales of $242.8 in 2015, $192.4 in 2014, and $183.9 in 2013. These sales are generally transacted at market pricing. For all other segments, intersegment sales are not material for all periods presented. Equipment manufactured for our regional industrial gases segments are generally transferred at cost and not reflected as an intersegment sale.

Geographic Information
Sales to External Customers201520142013
United States$4,280.1$4,507.6$4,258.4
Canada247.1311.4275.5
Europe2,315.42,628.02,602.1
Asia, excluding China1,395.21,389.41,320.1
China1,129.1981.01,008.3
Latin America528.0621.6716.0
$9,894.9$10,439.0$10,180.4
Long-Lived Assets (A)201520142013
United States$3,776.7$3,756.0$3,632.1
Canada577.4518.0522.3
Europe, excluding United Kingdom1,102.31,319.31,456.2
United Kingdom1,196.3926.1612.6
Asia, excluding China914.2989.9962.3
China1,732.71,582.71,281.7
Latin America337.3440.1506.8
$9,636.9$9,532.1$8,974.0
(A) Long-lived assets include plant and equipment, net.

Geographic information is based on country of origin. Included in United States revenues are export sales to third-party customers of $398.8 in 2015, $378.7 in 2014, and $410.3 in 2013. The Europe region operates principally in France, Germany, the Netherlands, Poland, Spain, and the United Kingdom. The Asia region operates principally in China, Singapore, South Korea, and Taiwan. The Latin America region operates principally in Brazil and Chile.