Air Products Chemicals Inc

26. BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION

During the fiscal year ended 30 September 2024, we managed our operations, assessed performance, and reported earnings under the following reportable segments:

•Americas;

•Asia;

•Europe;

•Middle East and India; and

•Corporate and other.

Our reportable segments reflect the manner in which our chief operating decision maker reviews results and allocates resources. We evaluate the performance of our segments based upon segment operating income. Except for the Corporate and other segment, each reportable segment meets the definition of an operating segment and does not include the aggregation of multiple operating segments. Our Corporate and other segment includes the aggregation of two operating segments that meet the aggregation criteria under GAAP.

Industrial Gases – Regional

Our industrial gases business is organized and operated regionally in the Americas, Asia, Europe, and Middle East and India segments. This business produces and sells gases to diversified customers in dozens of industries, including those in refining, chemicals, metals, electronics, manufacturing, medical, and food. Our industrial gas portfolio includes atmospheric gases such as oxygen, nitrogen, and argon; process gases such as hydrogen, helium, carbon dioxide, carbon monoxide, and syngas (a mixture of hydrogen and carbon monoxide), and specialty gases. We offer our industrial gas products through either the on-site gases supply mode or the merchant gases supply mode, both of which are described in Note 7, Revenue Recognition.

The industrial gases business develops, builds, and operates equipment for the production or processing of gases. Electricity is the largest cost component in the production of atmospheric gases. To produce hydrogen, carbon monoxide, and syngas, steam methane reformers use natural gas as the primary raw material, while gasifiers use liquid and solid hydrocarbons as the primary raw material. We mitigate electricity, natural gas, and hydrocarbon price fluctuations contractually through pricing formulas, surcharges, cost pass-through provisions, and tolling arrangements.

Each of the regional industrial gases segments competes against global industrial gas companies as well as regional competitors. Competition in industrial gases 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 our larger customers.

The Corporate and other segment includes sales of cryogenic and gas processing equipment for air separation that 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. Our Corporate and other segment also includes the results of our turbo machinery and distribution sale of equipment businesses. Through 30 September 2024, this segment also included the results of the LNG process technology and equipment business that was divested during the fourth quarter of fiscal year 2024. Refer to Note 4, Gain on Sale of Business, for additional information. Competition for our sale of equipment businesses is based primarily on plant efficiency and technological performance, service, technical know-how, and price, as well as schedule and plant performance guarantees.

Our Corporate and other segment also incurs costs to provide corporate support functions and global management activities that benefit all segments. These costs include those for product development, research and development, and administrative support. The results of our Corporate and other segment also include income and expense not directly associated with the regional segments, such as foreign exchange gains and losses.

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

Equity Affiliates

Our reporting segments include our share of the results of several joint ventures accounted for under the equity method. The largest of these joint ventures operate in Algeria, China, India, Italy, Mexico, Saudi Arabia, South Africa, and Thailand.

Customers

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

Business Segment Information

(A)Sales relate to external customers only. All intersegment sales are eliminated in consolidation.

(B)Refer to the Reconciliations to Consolidated Results section below.

Reconciliations to Consolidated Results

Operating Income

The table below reconciles total operating income disclosed in the table above to consolidated operating income as reflected on our consolidated income statements:

Equity Affiliates' Income

The table below reconciles total equity affiliates' income disclosed in the table above to consolidated equity affiliates' income as reflected on our consolidated income statements:

Geographic Information

The geographic information presented below is based on country of origin.

Sales to External Customers

(A)"Long-lived assets" represents plant and equipment, net.