Air Products and Chemicals(APD) - 2025 Q1 - Quarterly Report

Financial Performance - Sales for the three months ended December 31, 2024, were $2,931.5 million, a decrease of 2.2% compared to$ 2,997.4 million in the same period of 2023[17] - Net income attributable to Air Products for the same period was $617.4 million, reflecting an increase of 1.3% from$ 609.3 million in 2023[17] - Basic earnings per share attributable to Air Products were $2.77, up from$ 2.74 in the prior year, indicating a 1.1% increase[17] - Operating income for the three months ended December 31, 2024, was $673.5 million, slightly higher than$ 666.9 million in the prior year[123] - Net income for the quarter was $649.8 million, reflecting a 5% increase compared to the previous year, with a net income margin of 22.2%[175] - Adjusted EPS for Q1 2025 was$ 2.86, an increase of 1% from $2.82 in Q1 2024[172] Cash Flow and Investments - Cash provided by operating activities for the three months ended December 31, 2024, was$ 811.7 million, compared to $626.6 million in 2023, representing a 29.5% increase[24] - Cash used for investing activities rose to$ 2,182.1 million, primarily due to additions to plant and equipment of $2,117.6 million[186] - Cash contributions to funded pension plans for the three months ended December 31, 2024, were$ 8.2 million, compared to $12.0 million in 2023[205] - Cash provided by financing activities for the first three months of fiscal year 2025 was$ 274.2 million, significantly lower than $1,362.8 million in the same period of fiscal year 2024[192][193] Assets and Liabilities - Total assets as of December 31, 2024, were$ 40,017.2 million, an increase from $39,574.6 million as of September 30, 2024[22] - Total liabilities increased to$ 21,278.5 million as of December 31, 2024, compared to $20,900.9 million at the end of September 2024[22] - The company’s total equity as of December 31, 2024, was$ 18,738.7 million, slightly up from $18,673.7 million at the end of September 2024[22] - Long-term debt as of December 31, 2024, was$ 3,499.4 million, up from $3,053.3 million as of September 30, 2024, indicating an increase of 14.6%[46] Shareholder Returns - Dividends on common stock for the quarter were$ 393.8 million, representing a per share dividend of $1.77, compared to$ 389.0 million or $1.75 per share in the same quarter last year[27] - The company expects to return approximately$ 1.6 billion to shareholders in 2025 through dividends[200] - A quarterly dividend of $1.77 per share was declared, payable on 10 February 2025, with a subsequent increase to$ 1.79 per share approved for payment on 12 May 2025[201] Comprehensive Income - The company experienced a comprehensive income of $194.4 million for the three months ended December 31, 2024, a significant decrease from$ 812.6 million in the same period of 2023[19] - Other comprehensive loss for the quarter was $(558.5) million, compared to a gain of$ 329.1 million in the prior year, indicating a significant shift in comprehensive income[27] - The company recorded a net current period other comprehensive loss of $455.4 million for the three months ended December 31, 2024[106] Segment Performance - Americas segment sales increased by 3% to$ 1,287.6 million, with operating income rising 10% to $388.2 million and an operating margin of 30.1%, up 180 basis points from the prior year[176] - Asia segment sales increased by 3% to$ 817.1 million, driven by a 2% increase in volume and a 2% energy cost pass-through to customers, partially offset by a 1% unfavorable currency impact[157] - Europe segment sales decreased by 5% to $697.2 million, primarily due to a 5% decline in volume and a 1% decrease in energy cost pass-through[161] - Middle East and India segment sales declined by 7% to$ 32.8 million, primarily due to lower demand for merchant products, resulting in an operating loss of $0.6 million[163] - Corporate and other segment sales plummeted by 48% to$ 96.8 million, primarily due to the divestiture of the LNG business[165] Joint Ventures and Projects - The NEOM Green Hydrogen Company joint venture is a multi-billion dollar project, with project financing of approximately $6.1 billion secured, expected to fund about 73% of the project[41] - Total current liabilities associated with the NEOM project were$ 419.5 million as of December 31, 2024, compared to $362.0 million as of September 30, 2024[46] - JIGPC joint venture with Saudi Aramco, ACWA Power, and Air Products has a total investment carrying value of$ 2,909.0 million as of December 31, 2024[48] Derivatives and Hedging - The company recorded a total amount recognized in other comprehensive income (OCI) of $194.7 million for net investment hedging relationships for the three months ended December 31, 2024, compared to a loss of$ 123.6 million in the same period of 2023[74] - The fair value of derivatives designated as hedging instruments increased to $311.5 million as of December 31, 2024, from$ 119.6 million as of September 30, 2024[73] - The company has entered into floating-to-fixed interest rate swaps to hedge long-term variable rate debt facilities for the NEOM Green Hydrogen Project[72] Research and Development - Research and development expense of $22.0 million decreased 14%, or$ 3.7 million, as a percentage of sales decreased to 0.8% from 0.9% in the prior year[138]