Air Products & Chemicals, Inc.APD
Air Products & Chemicals, Inc. Leases Disclosure
LEASES
Lessee Accounting
We are the lessee under various agreements for real estate, vehicles, aircraft, and other equipment that are accounted for as operating leases. Our finance leases principally relate to the right to use machinery and equipment and are not material.
Amounts associated with operating leases and their presentation on our consolidated balance sheets are as follows:
| 30 September | 2025 | 2024 | |||||||||
Operating lease right-of-use assets, net | $944.0 | $1,047.7 | |||||||||
| Operating lease liabilities | |||||||||||
| 91.8 | 100.3 | ||||||||||
| Noncurrent operating lease liabilities | 616.0 | 677.9 | |||||||||
| Total operating lease liabilities | $707.8 | $778.2 | |||||||||
| 30 September | 2025 | 2024 | |||||||||
Weighted-average remaining lease term in years(A) | 20.7 | 20.0 | |||||||||
Weighted-average discount rate(B) | 2.9 | % | 2.9 | % | |||||||
(A)Calculated on the basis of the remaining lease term and the lease liability balance for each lease as of the reporting date.
(B)Calculated on the basis of the discount rate used to calculate the lease liability for each lease and the remaining balance of the lease payments for each lease as of the reporting date.
The following maturity analysis of our operating lease liabilities as of 30 September 2025 presents the undiscounted cash flows for each of the next five years and thereafter with a reconciliation to the lease liability recognized on our balance sheet:
| Operating Leases | ||||||||
| 2026 | $109.0 | |||||||
| 2027 | 72.6 | |||||||
| 2028 | 62.0 | |||||||
| 2029 | 49.9 | |||||||
| 2030 | 48.5 | |||||||
| Thereafter | 647.9 | |||||||
| Total undiscounted lease payments | 989.9 | |||||||
| Imputed interest | (282.1) | |||||||
| Present value of lease liability recognized on balance sheet | $707.8 | |||||||
Operating lease expense was $124.0, $122.4, and $109.9 for fiscal years 2025, 2024, and 2023, respectively. These amounts do not include short-term and variable lease expenses, which were not material. The impacts associated with our operating leases on the consolidated statements of cash flows are reflected within "Other adjustments" within operating activities. This includes the noncash operating lease expense as well as a use of cash of $125.2, $154.6, and $337.8 for payments on amounts included in the measurement of the lease liability for fiscal years 2025, 2024, and 2023, respectively. Payments in fiscal year 2023 included a lump-sum payment of $209 for a land lease associated with the NGHC joint venture. Refer to Note 3, Variable Interest Entities, for additional information.
We recorded noncash right-of-use asset additions of approximately $65, $159, and $150 in fiscal years 2025, 2024, and 2023, respectively.
Lessor Accounting
Certain contracts associated with facilities that are built to provide product to a specific customer have been accounted for as containing embedded leases. Refer to Note 1, Basis of Presentation and Major Accounting Policies, for a description of our accounting policy for arrangements in which we are the lessor.
"Lease receivables, net" relate to sales-type leases on certain on-site assets for which payments are collected over the contract term. The table below details balances associated with our lease receivables:
| 30 September | 2025 | 2024 | ||||||
Current lease receivables, net(A) | $49.4 | $74.5 | ||||||
| Noncurrent lease receivables, net | 307.1 | 392.1 | ||||||
| Total lease receivables, net | $356.5 | $466.6 | ||||||
(A)Presented within "Other receivables and current assets" on our consolidated balance sheets.
The majority of our leases are of high credit quality and were originated prior to fiscal year 2017. As of 30 September 2025 and 2024, the credit quality of lease receivables did not require a material allowance for credit losses.
The table below summarizes lease payments collected in fiscal years 2025, 2024, and 2023:
| Fiscal Year Ended 30 September | 2025 | 2024 | 2023 | ||||||||
| Payments that reduced the lease receivable balance | $56.2 | $122.1 | $79.6 | ||||||||
| Payments recognized as interest income | 32.6 | 42.6 | 49.6 | ||||||||
| Total lease payments collected | $88.8 | $164.7 | $129.2 | ||||||||
As of 30 September 2025, minimum lease payments expected to be collected were as follows:
| 2026 | $78.0 | ||||
| 2027 | 72.6 | ||||
| 2028 | 69.6 | ||||
| 2029 | 66.5 | ||||
| 2030 | 63.6 | ||||
| Thereafter | 137.6 | ||||
| Total | 487.9 | ||||
| Unearned interest income | (131.4) | ||||
| Lease receivables, net | $356.5 | ||||
Our contracts generally do not have the option to extend or terminate the lease or provide the customer the right to purchase the asset at the end of the contract term. Instead, renewal of such contracts requires negotiation of mutually agreed terms by both parties. Unless the customer terminates within the required notice period, the contract will go into evergreen. Given the long-term duration of our contracts, there is no assumed residual value for the assets at the end of the lease term.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Nov 20, 2025 | Showing above |
| 2024 | Nov 21, 2024 | |
| 2023 | Nov 16, 2023 | |
| 2022 | Nov 22, 2022 | |
| 2021 | Nov 18, 2021 | |
| 2016 | Nov 21, 2016 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.