Exhibit 99.1
 
Press release
 
Linde Reports Second-Quarter 2020 Results
 
Financial Highlights
➢ Strong operating cash flow of $1.8 billion, up 76% versus prior year
➢ Operating profit margin flat versus prior year; adjusted operating profit margin up 230 basis points
➢ EPS of $0.87, down 7% versus prior year; adjusted EPS of $1.90, up 4%
➢ Full-year 2020 adjusted EPS guidance of $7.60 - $7.80, up 7% to 9% year-over-year, ex-FX*
 
Guildford, UK, July 30, 2020 – Linde plc (NYSE: LIN; FWB: LIN) today reported second-quarter 2020 income from continuing operations of $458 million and diluted earnings per share of $0.87. Excluding Linde AG purchase accounting impacts and other charges, adjusted income from continuing operations was $1,005 million, up 1% versus prior year and flat sequentially. Adjusted earnings per share were $1.90, 4% above prior year, or 8% higher when excluding negative currency translation effects. Sequentially, adjusted earnings per share increased 1%, or 3% when excluding negative currency translation effects.
 
Linde’s sales for the second quarter were $6,377 million, 5% below prior year excluding negative currency translation, cost pass-through and divestitures. Price improved 2% and was attained across all geographic segments. Volume decreased 7% as growth from project start-ups and engineering was more than offset by the global macroeconomic slowdown as a result of the COVID-19 pandemic.
 
Second-quarter operating profit was $591 million. Adjusted operating profit of $1,317 million was flat versus prior year, or 4% higher, when excluding unfavorable currency translation effects. Adjusted operating margin of 20.7% expanded 230 basis points versus prior year primarily due to price and cost actions underpinned by stable fixed payment revenues.
 
Second-quarter operating cash flow of $1,764 million increased $759 million or 76% over prior year primarily driven by higher cash earnings, lower merger-related cost and improved working capital. During the quarter, the company invested $783 million in capital expenditures and returned $506 million to shareholders through dividends.
 
Commenting on the financial results, Chief Executive Officer Steve Angel said, “I’m proud of how the Linde team came together to safely and reliably serve our customers and deliver high-quality financial results.  Despite volume reductions from the pandemic, EPS excluding currency increased 8%, operating margin expanded 230 basis points and operating cash flow grew 76% from prior-year levels.  These results demonstrate the resiliency of our integrated industrial gas supply model.”
 
 
 
 
 
Page 1/12
 
 
 
Press release
 
Angel continued, “Looking ahead, the full effects of COVID-19 and the rate of recovery are uncertain. However, the growth opportunities for Linde remain strong from our high-quality project backlog, defensive end markets and leading infrastructure and technology in support of the secular trend in clean energy.  Our resilient business model combined with our ability to continuously optimize business performance, while capitalizing on short and long-term growth opportunities, gives me the confidence that Linde can grow earnings in any environment.”
 
For the third quarter of 2020, Linde expects adjusted diluted earnings per share in the range of $1.90 to $1.95. This guidance assumes a negative currency impact of approximately 3% versus the prior-year quarter based on projected exchange rates.
 
For the full year, the company expects adjusted diluted earnings per share to be in the range of $7.60 to $7.80, up 4% to 6% versus prior year, or 7% to 9% excluding currency headwinds. Full-year capital expenditures are expected to between $3.0 billion to $3.4 billion to support maintenance and growth requirements including the $3.6 billion contractual sale of gas project backlog.
 
Second-Quarter 2020 Results by Segment
 
Americas sales of $2,417 million were 13% below prior-year quarter as 2% higher pricing was more than offset by 9% volume decline led mainly by manufacturing and metals end markets. Furthermore, currency was unfavorable by 4% and cost pass-through was down 1%. Operating profit of $622 million was 25.7% of sales, up 250 basis points versus prior year.
 
APAC (Asia Pacific) sales of $1,295 million were 13% below prior year. Price increased 1% versus prior year but was more than offset by negative 9% volumes driven by lower demand in the manufacturing end market and a prior-year sale of equipment. Additionally, currency was unfavorable by 4% and cost pass-through was down 1%. Operating profit of $294 million was 22.7% of sales, up 230 basis points versus prior year.
 
EMEA (Europe, Middle East & Africa) sales of $1,448 million were down 13% versus prior year as 1% higher pricing was more than offset by negative 7% volumes primarily due to lower demand in the manufacturing and metals end market. Currency was unfavorable by 5% and cost pass through was down 1%. Operating profit of $303 million was 20.9% of sales, up 110 basis points versus prior year.
 
Linde Engineering sales were $810 million and operating profit was $138 million or 17% of sales. Operating profit grew 39% versus prior year due primarily to strong project execution and productivity initiatives.
 
 
Page 2/12
 
 
 
Press release
 
Earnings Call
A teleconference on Linde’s second-quarter 2020 results is being held today at 10:00 am EDT.
 
Live conference call
US Toll-Free Dial-In Number: 1 855 758 5442
Germany Toll-Free Dial-In Number: 0800 181 5287
UK Toll-Free Dial-In Number: 0800 028 8438
Access code: 5368349
 
Live webcast (listen-only) & on-demand
 
https://investors.linde.com/events-presentations
Short URL: https://t1p.de/i2ho
 
Materials to be used in the teleconference are also available on the website.
 
About Linde
Linde is a leading global industrial gases and engineering company with 2019 sales of $28 billion (€25 billion). We live our mission of making our world more productive every day by providing high-quality solutions, technologies and services which are making our customers more successful and helping to sustain and protect our planet.
The company serves a variety of end markets including chemicals & refining, food & beverage, electronics, healthcare, manufacturing and primary metals. Linde’s industrial gases are used in countless applications, from life-saving oxygen for hospitals to high-purity & specialty gases for electronics manufacturing, hydrogen for clean fuels and much more. Linde also delivers state-of-the-art gas processing solutions to support customer expansion, efficiency improvements and emissions reductions.
 
For more information about the company and its products and services, please visit www.linde.com
 
See the attachments for a summary of non-GAAP reconciliations and calculations for adjusted amounts.
 
Attachments: Summary Non-GAAP Reconciliations, Statements of Income, Balance Sheets, Statements of Cash Flows, Segment Information and Appendix: Non-GAAP Measures and Reconciliations.
 
*Note: We are providing adjusted earnings per share (“EPS”) guidance for 2020. This is a non-GAAP financial measure that represents diluted earnings per share from continuing operations (a GAAP measure) but excludes the impact of certain items that we believe are not representative of our underlying business performance, such as cost reduction and other charges, the impact of potential divestitures or other potentially significant items.  Given the uncertainty of timing and magnitude of such items, we cannot provide a reconciliation of the differences between the non-GAAP adjusted EPS guidance and the corresponding GAAP EPS measure without unreasonable effort. 
 
 
Page 3/12
 
 
 
Press release
 
Forward-looking Statements
 
This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are identified by terms and phrases such as: anticipate, believe, intend, estimate, expect, continue, should, could, may, plan, project, predict, will, potential, forecast, and similar expressions. They are based on management’s reasonable expectations and assumptions as of the date the statements are made but involve risks and uncertainties. These risks and uncertainties include, without limitation: the performance of stock markets generally; developments in worldwide and national economies and other international events and circumstances, including trade conflicts and tariffs; changes in foreign currencies and in interest rates; the cost and availability of electric power, natural gas and other raw materials; the ability to achieve price increases to offset cost increases; catastrophic events including natural disasters, epidemics, pandemics such as COVID-19 and acts of war and terrorism; the ability to attract, hire, and retain qualified personnel; the impact of changes in financial accounting standards; the impact of changes in pension plan liabilities; the impact of tax, environmental, healthcare and other legislation and government regulation in jurisdictions in which the company operates; the cost and outcomes of investigations, litigation and regulatory proceedings; the impact of potential unusual or non-recurring items; continued timely development and market acceptance of new products and applications; the impact of competitive products and pricing; future financial and operating performance of major customers and industries served; the impact of information technology system failures, network disruptions and breaches in data security; and the effectiveness and speed of integrating new acquisitions into the business. These risks and uncertainties may cause actual future results or circumstances to differ materially from accounting principles generally accepted in the United States of America, International Financial Reporting Standards or adjusted projections, estimates or other forward-looking statements.
 
Linde plc assumes no obligation to update or provide revisions to any forward-looking statement in response to changing circumstances. The above listed risks and uncertainties are further described in Item 1A. Risk Factors in Linde plc’s Form 10-K for the fiscal year ended December 31, 2019 filed with the SEC on March 2, 2020 and in Item 1A. of Linde plc's Form 10-Q for the period ending March 31, 2020 filed with the SEC on May 7, 2020, which should be reviewed carefully. Please consider Linde plc’s forward-looking statements in light of those risks.
 
 
Page 4/12
 
 
 
Press release
 
LINDE PLC AND SUBSIDIARIES
SUMMARY NON-GAAP RECONCILIATIONS
(UNAUDITED)
 
The following adjusted amounts are Non-GAAP measures and are intended to supplement investors' understanding of the company's financial statements by providing measures which investors, financial analysts and management use to help evaluate the company's operating performance. Items which the company does not believe to be indicative of ongoing business trends are excluded from these calculations so that investors can better evaluate and analyze historical and future business trends on a consistent basis. Definitions of these Non-GAAP measures may not be comparable to similar definitions used by other companies and are not a substitute for similar GAAP measures. See the "NON-GAAP MEASURES AND RECONCILIATIONS" starting on page 10 for additional details relating to the adjustments.
 
(Millions of dollars, except per share amounts)
 
 
 
Sales
 
 
Operating Profit
 
 
Income from Continuing Operations
 
 
Diluted EPS from Continuing Operations
 
 
 
2020
 
 
2019
 
 
2020
 
 
2019
 
 
2020
 
 
2019
 
 
2020
 
 
2019
 
Quarter Ended June 30
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reported GAAP Amounts
 $6,377 
 $7,204 
 $591 
 $669 
 $458 
 $513 
 $0.87 
 $0.94 
Cost reduction program and other charges (a)
  - 
  - 
  249 
  141 
  187 
  115 
  0.35 
  0.22 
Pension settlement charges (b)
  - 
  - 
  - 
  - 
  - 
  8 
  - 
  0.01 
Merger-related divestitures (c)
  - 
  (25)
  - 
  (6)
  - 
  (4)
  - 
  (0.01)
Purchase accounting impacts - Linde AG (d)
  - 
  - 
  477 
  515 
  360 
  368 
  0.68 
  0.67 
Total adjustments
  - 
  (25)
  726 
  650 
  547 
  487 
  1.03 
  0.89 
Adjusted amounts
 $6,377 
 $7,179 
 $1,317 
 $1,319 
 $1,005 
 $1,000 
 $1.90 
 $1.83 
 
 
 
Sales
 
 
Operating Profit
 
 
Income from Continuing Operations
 
 
Diluted EPS from Continuing Operations
 
 
 
2020
 
 
2019
 
 
2020
 
 
2019
 
 
2020
 
 
2019
 
 
2020
 
 
2019
 
Year to Date June 30
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reported GAAP Amounts
 $13,116 
 $14,148 
 $1,324 
 $1,278 
 $1,029 
 $948 
 $1.93 
 $1.73 
Cost reduction program and other charges (a)
  - 
  - 
  380 
  230 
  282 
  198 
  0.53 
  0.37 
Pension settlement charges (b)
  - 
  - 
  - 
  - 
  - 
  46 
  - 
  0.08 
Merger-related divestitures (c)
  - 
  (55)
  - 
  (13)
  - 
  (9)
  - 
  (0.02)
Purchase accounting impacts - Linde AG (d)
  - 
  - 
  965 
  1,046 
  703 
  744 
  1.32 
  1.36 
Total adjustments
  - 
  (55)
  1,345 
  1,263 
  985 
  979 
  1.85 
  1.79 
Adjusted amounts
 $13,116 
 $14,093 
 $2,669 
 $2,541 
 $2,014 
 $1,927 
 $3.78 
 $3.52 
 
(a) To adjust for cost reduction program and other charges; 2020 includes severance of $192 million and $250 million for the quarter and year-to-date periods, other cost reduction charges of $21 million and $41 million for the quarter and year-to-date periods, and other charges of $36 million and $89 million for the quarter and year-to-date periods.
(b) To adjust for pension settlement charges relates to the merger.
(c) To adjust for the results of Praxair's merger-related divestitures.
(d) To adjust for purchase accounting impacts related to the merger.
 
 
Page 5/12
 
 
 
Press release
 
LINDE PLC AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(Millions of dollars, except per share data)
(UNAUDITED)
 
 
 
Quarter Ended
 
 
Year To Date
 
 
 
June 30,
 
 
June 30,
 
 
 
2020
 
 
2019
 
 
2020
 
 
2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SALES
 $6,377 
 $7,204 
 $13,116 
 $14,148 
Cost of sales
  3,619 
  4,280 
  7,462 
  8,396 
Selling, general and administrative
  760 
  884 
  1,621 
  1,763 
Depreciation and amortization
  1,124 
  1,195 
  2,266 
  2,418 
Research and development
  34 
  45 
  78 
  91 
Cost reduction programs and other charges
  249 
  141 
  380 
  230 
Other income (expense) - net
  - 
  10 
  15 
  28 
OPERATING PROFIT
  591 
  669 
  1,324 
  1,278 
Interest expense - net
  18 
  10 
  42 
  33 
Net pension and OPEB cost (benefit), excluding service cost
  (45)
  (24)
  (90)
  (9)
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND EQUITY INVESTMENTS
  618 
  683 
  1,372 
  1,254 
Income taxes
  164 
  169 
  329 
  309 
INCOME FROM CONTINUING OPERATIONS BEFORE EQUITY INVESTMENTS
  454 
  514 
  1,043 
  945 
Income from equity investments
  29 
  28 
  46 
  62 
INCOME FROM CONTINUING OPERATIONS (INCLUDING NONCONTROLLING INTERESTS)
  483 
  542 
  1,089 
  1,007 
Add: income from discontinued operations, net of tax
  - 
  9 
  2 
  98 
INCOME (INCLUDING NONCONTROLLING INTERESTS)
  483 
  551 
  1,091 
  1,105 
Less: noncontrolling interests from continuing operations
  (25)
  (29)
  (60)
  (59)
Less: noncontrolling interests from discontinued operations
  - 
  - 
  - 
  (7)
NET INCOME - LINDE PLC
 $458 
 $522 
 $1,031 
 $1,039 
 
    
    
    
    
NET INCOME - LINDE PLC
    
    
    
    
Income from continuing operations
 $458 
 $513 
 $1,029 
 $948 
Income from discontinued operations
 $- 
 $9 
 $2 
 $91 
 
    
    
    
    
PER SHARE DATA - LINDE PLC SHAREHOLDERS
    
    
    
    
 
    
    
    
    
Basic earnings per share from continuing operations
 $0.87 
 $0.95 
 $1.95 
 $1.74 
Basic earnings per share from discontinued operations
  - 
  0.02 
  - 
  0.17 
Basic earnings per share
 $0.87 
 $0.97 
 $1.95 
 $1.91 
 
    
    
    
    
Diluted earnings per share from continuing operations
  0.87 
  0.94 
  1.93 
  1.73 
Diluted earnings per share from discontinued operations
  - 
  0.02 
  - 
  0.17 
Diluted earnings per share
 $0.87 
 $0.96 
 $1.93 
 $1.90 
 
    
    
    
    
Cash dividends
 $0.963 
 $0.875 
 $1.926 
 $1.75 
 
    
    
    
    
WEIGHTED AVERAGE SHARES OUTSTANDING
    
    
    
    
Basic shares outstanding (000's)
  525,510 
  542,561 
  528,385 
  544,033 
Diluted shares outstanding (000's)
  529,054 
  546,488 
  532,112 
  547,771 
 
Note: See page 10 for a reconciliation to adjusted amounts which are Non-GAAP.
 
 
Page 6/12
 
 
 
Press release
 
LINDE PLC AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(Millions of dollars)
(UNAUDITED)
 
 
 
June 30,
 
 
December 31,
 
 
 
2020
 
 
2019
 
ASSETS
 
 
 
 
 
 
Cash and cash equivalents
 $4,941 
 $2,700 
Accounts receivable - net
  3,994 
  4,322 
Contract assets
  226 
  368 
Inventories
  1,715 
  1,697 
Assets held for sale
  3 
  125 
Prepaid and other current assets
  1,194 
  1,140 
TOTAL CURRENT ASSETS
  12,073 
  10,352 
Property, plant and equipment - net
  27,693 
  29,064 
Goodwill
  26,580 
  27,019 
Other intangibles - net
  15,504 
  16,137 
Other long-term assets
  4,006 
  4,040 
TOTAL ASSETS
 $85,856 
 $86,612 
 
    
    
LIABILITIES AND EQUITY
    
    
Accounts payable
 $2,816 
 $3,266 
Short-term debt
  3,679 
  1,732 
Current portion of long-term debt
  2,723 
  1,531 
Contract liabilities
  1,693 
  1,758 
Liabilities of assets held for sale
  1 
  2 
Other current liabilities
  4,183 
  3,871 
TOTAL CURRENT LIABILITIES
  15,095 
  12,160 
Long-term debt
  11,078 
  10,693 
Other long-term liabilities
  11,746 
  12,124 
TOTAL LIABILITIES
  37,919 
  34,977 
 
    
    
REDEEMABLE NONCONTROLLING INTERESTS
  13 
  113 
 
    
    
LINDE PLC SHAREHOLDERS' EQUITY:
    
    
Common stock
  1 
  1 
Additional paid-in capital
  40,211 
  40,201 
Retained earnings
  16,782 
  16,842 
Accumulated other comprehensive income (loss)
  (6,621)
  (4,814)
Less: Treasury stock, at cost
  (4,836)
  (3,156)
Total Linde plc shareholders' equity
  45,537 
  49,074 
Noncontrolling interests
  2,387 
  2,448 
TOTAL EQUITY
  47,924 
  51,522 
TOTAL LIABILITIES AND EQUITY
 $85,856 
 $86,612 
 
 
Page 7/12
 
 
 
Press release
 
LINDE PLC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Millions of dollars)
(UNAUDITED)
 
 
 
Quarter Ended
 
 
Year to Date
 
 
 
June 30,
 
 
June 30,
 
 
 
2020
 
 
2019
 
 
2020
 
 
2019
 
OPERATIONS
 
 
 
 
 
 
 
 
 
 
 
 
Net income - Linde plc
 $458 
 $522 
 $1,031 
 $1,039 
Less: income from discontinued operations, net of tax and noncontrolling interests
  - 
  (9)
  (2)
  (91)
Add: noncontrolling interests
  25 
  29 
  60 
  59 
Net income (including noncontrolling interests)
  483 
  542 
  1,089 
  1,007 
 
    
    
    
    
Adjustments to reconcile net income to net cash provided by operating activities:
    
    
    
    
Cost reduction programs and other charges, net of payments (a)
  199 
  (119)
  239 
  (286)
Depreciation and amortization
  1,124 
  1,195 
  2,266 
  2,418 
Accounts receivable
  (9)
  (132)
  (118)
  (188)
Contract assets and liabilities, net
  (105)
  (19)
  71 
  (103)
Inventory
  (20)
  (41)
  (82)
  (73)
Payables and accruals
  156 
  (216)
  (27)
  (247)
Pension contributions
  (24)
  (25)
  (41)
  (43)
Deferred income taxes and other
  (40)
  (180)
  (286)
  (412)
Net cash provided by operating activities
  1,764 
  1,005 
  3,111 
  2,073 
 
    
    
    
    
INVESTING
    
    
    
    
Capital expenditures
  (783)
  (865)
  (1,586)
  (1,708)
Acquisitions, net of cash acquired
  - 
  12 
  (41)
  (140)
Divestitures and asset sales
  149 
  1,234 
  380 
  4,689 
Net cash provided by (used for) investing activities
  (634)
  381 
  (1,247)
  2,841 
 
    
    
    
    
FINANCING
    
    
    
    
Debt increase (decrease) - net
  411 
  (250)
  3,523 
  (1,277)
Issuances of ordinary shares
  12 
  27 
  25 
  55 
Purchases of ordinary shares
  - 
  (525)
  (1,828)
  (1,250)
Cash dividends - Linde plc shareholders
  (506)
  (474)
  (1,017)
  (951)
Noncontrolling interest transactions and other
  (121)
  (3,212)
  (148)
  (3,222)
Net cash provided by (used for) financing activities
  (204)
  (4,434)
  555 
  (6,645)
 
    
    
    
    
DISCONTINUED OPERATIONS
    
    
    
    
Cash provided by operating activities
  - 
  7 
  - 
  70 
Cash provided by investing activities
  - 
  (1)
  - 
  (59)
Cash provided by financing activities
  - 
  - 
  - 
  5 
  Net cash provided by (used for) discontinued operations
  - 
  6 
  - 
  16 
 
    
    
    
    
Effect of exchange rate changes on cash and cash equivalents
  1 
  (57)
  (178)
  (49)
 
    
    
    
    
Change in cash and cash equivalents
  927 
  (3,099)
  2,241 
  (1,764)
Cash and cash equivalents, beginning-of-period
  4,014 
  5,791 
  2,700 
  4,466 
Cash and cash equivalents, including discontinued operations
  4,941 
  2,692 
  4,941 
  2,702 
Cash and cash equivalents of discontinued operations
  - 
  (6)
  - 
  (16)
Cash and cash equivalents, end-of-period
 $4,941 
 $2,686 
 $4,941 
 $2,686 

(a) Cost reduction programs and other charges cash outflows were $50 million and $260 million for the quarters ended June 30, 2020 and 2019, respectively, and $141 million and $516 million for the six months ended June 30, 2020 and 2019, respectively.
 
 
Page 8/12
 
 
 
 
Press release
 
LINDE PLC AND SUBSIDIARIES
SEGMENT INFORMATION
(Millions of dollars)
(UNAUDITED)
 
 
 
 Quarter Ended June 30,
 
 
Year to Date June 30,
 
 
 
2020
 
 
2019
 
 
2020
 
 
2019
 
SALES
 
 
 
 
 
 
 
 
 
 
 
 
Americas
 $2,417 
 $2,779 
 $5,094 
 $5,481 
EMEA
  1,448 
  1,673 
  3,081 
  3,355 
APAC
  1,295 
  1,488 
  2,631 
  2,915 
Engineering
  810 
  752 
  1,418 
  1,388 
Other
  407 
  487 
  892 
  954 
Segment sales
 $6,377 
 $7,179 
 $13,116 
 $14,093 
Merger-related divestitures (a)
  - 
  25 
  - 
  55 
  Total sales
 $6,377 
 $7,204 
 $13,116 
 $14,148 
 
    
    
    
    
 
    
    
    
    
OPERATING PROFIT
    
    
    
    
Americas
 $622 
 $646 
 $1,283 
 $1,230 
EMEA
  303 
  332 
  658 
  679 
APAC
  294 
  304 
  575 
  577 
Engineering
  138 
  99 
  229 
  177 
Other
  (40)
  (62)
  (76)
  (122)
Segment operating profit
 $1,317 
 $1,319 
 $2,669 
 $2,541 
Cost reduction programs and other charges
  (249)
  (141)
  (380)
  (230)
Merger-related divestitures (a)
  - 
  6 
  - 
  13 
Purchase accounting impacts - Linde AG
  (477)
  (515)
  (965)
  (1,046)
Total operating profit
 $591 
 $669 
 $1,324 
 $1,278 
 
(a) To adjust for the results of Praxair's merger-related divestitures.
 
 
Page 9/12
 
 
 
LINDE PLC AND SUBSIDIARIES
APPENDIX
NON-GAAP MEASURES AND RECONCILIATIONS
(Millions of dollars, except per share data)
(UNAUDITED)
 
The following Non-GAAP measures are intended to supplement investors’ understanding of the company’s financial information by providing measures which investors, financial analysts and management use to help evaluate the company’s operating performance and liquidity. Items which the company does not believe to be indicative of on-going business trends are excluded from these calculations so that investors can better evaluate and analyze historical and future business trends on a consistent basis. Definitions of these Non-GAAP measures may not be comparable to similar definitions used by other companies and are not a substitute for similar GAAP measures.
 
 
 
 2020
 
 
 2019
 
 
 
Year to Date
June 30,
 
 
Q2
 
 
Q1
 
 
Year to Date
June 30,
 
 
Q4
 
 
Q3
 
 
Q2
 
 
Q1
 
Adjusted Sales
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reported Sales
 $13,116 
 $6,377 
 $6,739 
 $14,148 
 $7,080 
 $7,000 
 $7,204 
 $6,944 
Less: Merger-related divestitures (d)
  - 
  - 
  - 
  (55)
  (3)
  (7)
  (25)
  (30)
Adjusted Sales
 $13,116 
 $6,377 
 $6,739 
 $14,093 
 $7,077 
 $6,993 
 $7,179 
 $6,914 
 
    
    
    
    
    
    
    
    
Adjusted Operating Profit and Operating Margin
    
    
    
    
    
    
    
    
Reported operating profit
 $1,324 
 $591 
 $733 
 $1,278 
 $655 
 $1,000 
 $669 
 $609 
Less: Merger-related divestitures (d)
  - 
  - 
  - 
  (13)
  (1)
  (2)
  (6)
  (7)
Add: Cost reduction programs and other charges
  380 
  249 
  131 
  230 
  212 
  125 
  141 
  89 
Less: Net gain on sale of businesses
  - 
  - 
  - 
  - 
  - 
  (164)
  - 
  - 
Add: Purchase accounting impacts - Linde AG (c)
  965 
  477 
  488 
  1,046 
  481 
  425 
  515 
  531 
Total adjustments
  1,345 
  726 
  619 
  1,263 
  692 
  384 
  650 
  613 
Adjusted operating profit
 $2,669 
 $1,317 
 $1,352 
 $2,541 
 $1,347 
 $1,384 
 $1,319 
 $1,222 
 
    
    
    
    
    
    
    
    
Reported percentage change
  4%
  (12)%
  20%
    
    
    
    
    
Adjusted percentage change
  5%
  (0)%
  11%
    
    
    
    
    
 
    
    
    
    
    
    
    
    
Reported sales
 $13,116 
 $6,377 
 $6,739 
 $14,148 
 $7,080 
 $7,000 
 $7,204 
 $6,944 
Adjusted sales
 $13,116 
 $6,377 
 $6,739 
 $14,093 
 $7,077 
 $6,993 
 $7,179 
 $6,914 
 
    
    
    
    
    
    
    
    
Reported operating margin
  10.1%
  9.3%
  10.9%
  9.0%
  9.3%
  14.3%
  9.3%
  8.8%
Adjusted operating margin
  20.3%
  20.7%
  20.1%
  18.0%
  19.0%
  19.8%
  18.4%
  17.7%
 
    
    
    
    
    
    
    
    
Adjusted Depreciation and amortization
    
    
    
    
    
    
    
    
Reported depreciation and amortization
 $2,266 
 $1,124 
 $1,142 
 $2,418 
 $1,162 
 $1,095 
 $1,195 
 $1,223 
Less: Purchase accounting impacts - Linde AG (c)
  (944)
  (468)
  (476)
  (1,036)
  (481)
  (423)
  (515)
  (521)
Adjusted depreciation and amortization
 $1,322 
 $656 
 $666 
 $1,382 
 $681 
 $672 
 $680 
 $702 
 
    
    
    
    
    
    
    
    
 
    
    
    
    
    
    
    
    
Adjusted Net Pension and OPEB Cost (Benefit), Excluding Service Cost
    
    
    
    
    
    
    
    
Reported net pension and OPEB cost (benefit), excluding service cost
 $(90)
 $(45)
 $(45)
 $(9)
 $(25)
 $2 
 $(24)
 $15 
Add: Pension settlement charges
  - 
  - 
  - 
  (61)
  (6)
  (40)
  (10)
  (51)
Adjusted Net Pension and OPEB cost (benefit), excluding service costs
 $(90)
 $(45)
 $(45)
 $(70)
 $(31)
 $(38)
 $(34)
 $(36)
 
    
    
    
    
    
    
    
    
Adjusted Interest Expense - Net
    
    
    
    
    
    
    
    
Reported interest expense - net
 $42 
 $18 
 $24 
 $33 
 $8 
 $(3)
 $10 
 $23 
Add: Purchase accounting impacts - Linde AG (c)
  44 
  22 
  22 
  52 
  22 
  22 
  25 
  27 
Adjusted interest expense - net
 $86 
 $40 
 $46 
 $85 
 $30 
 $19 
 $35 
 $50 
 
    
    
    
    
    
    
    
    
Adjusted Income Taxes (a)
    
    
    
    
    
    
    
    
Reported income taxes
 $329 
 $164 
 $165 
 $309 
 $162 
 $298 
 $169 
 $140 
Add: Purchase accounting impacts - Linde AG (c)
  217 
  95 
  122 
  246 
  105 
  99 
  119 
  127 
Add: Pension settlement charges
  - 
  - 
  - 
  15 
  1 
  10 
  2 
  13 
Add: Cost reduction programs and other charges
  98 
  62 
  36 
  32 
  53 
  (2)
  26 
  6 
Less: Merger-related divestitures (d)
  - 
  - 
  - 
  (4)
  - 
  (1)
  (2)
  (2)
Less: Net gain on sale of businesses
  - 
  - 
  - 
  - 
  - 
  (56)
  - 
  - 
Total adjustments
  315 
  157 
  158 
  289 
  159 
  50 
  145 
  144 
Adjusted income taxes
 $644 
 $321 
 $323 
 $598 
 $321 
 $348 
 $314 
 $284 
 
    
    
    
    
    
    
    
    
 
    
    
    
    
    
    
    
    
Adjusted Effective Tax Rate (a)
    
    
    
    
    
    
    
    
Reported income before income taxes and equity investments
 $1,372 
 $618 
 $754 
 $1,254 
 $672 
 $1,001 
 $683 
 $571 
Less: Merger-related divestitures (d)
  - 
  - 
  - 
  (13)
  (1)
  (2)
  (6)
  (7)
Add: Pension settlement charge
  - 
  - 
  - 
  61 
  6 
  40 
  10 
  51 
Add: Purchase accounting impacts - Linde AG (c)
  921 
  455 
  466 
  994 
  459 
  403 
  490 
  504 
Add: Cost reduction programs and other charges
  380 
  249 
  131 
  230 
  212 
  125 
  141 
  89 
Less: Net gain on sale of businesses
  - 
  - 
  - 
  - 
  - 
  (164)
  - 
  - 
Total adjustments
  1,301 
  704 
  597 
  1,272 
  676 
  402 
  635 
  637 
Adjusted income before income taxes and equity investments
 $2,673 
 $1,322 
 $1,351 
 $2,526 
 $1,348 
 $1,403 
 $1,318 
 $1,208 
 
    
    
    
    
    
    
    
    
Reported Income taxes
 $329 
 $164 
 $165 
 $309 
 $162 
 $298 
 $169 
 $140 
Reported effective tax rate
  24.0%
  26.5%
  21.9%
  24.6%
  24.1%
  29.8%
  24.7%
  24.5%
 
    
    
    
    
    
    
    
    
Adjusted income taxes
 $644 
 $321 
 $323 
 $598 
 $321 
 $348 
 $314 
 $284 
Adjusted effective tax rate
  24.1%
  24.3%
  23.9%
  23.7%
  23.8%
  24.8%
  23.8%
  23.5%
 
    
    
    
    
    
    
    
    
Income from Equity Investments
    
    
    
    
    
    
    
    
Reported income from equity investments
 $46 
 $29 
 $17 
 $62 
 $24 
 $28 
 $28 
 $34 
Add: Purchase accounting impacts - Linde AG (c)
  28 
  14 
  14 
  28 
  14 
  15 
  14 
  14 
Adjusted income from equity investments
 $74 
 $43 
 $31 
 $90 
 $38 
 $43 
 $42 
 $48 
 
    
    
    
    
    
    
    
    
Adjusted Noncontrolling Interests from Continuing Operations
    
    
    
    
    
    
    
    
Reported noncontrolling interests from continuing operations
 $(60)
 $(25)
 $(35)
 $(59)
 $(27)
 $(3)
 $(29)
 $(30)
Add: Cost reduction programs and other charges
  - 
  - 
  - 
  - 
  - 
  (35)
  - 
  - 
Add: Purchase accounting impacts - Linde AG (c)
  (29)
  (14)
  (15)
  (32)
  (14)
  (8)
  (17)
  (15)
Total adjustments
  (29)
  (14)
  (15)
  (32)
  (14)
  (43)
  (17)
  (15)
Adjusted noncontrolling interests from continuing operations
 $(89)
 $(39)
 $(50)
 $(91)
 $(41)
 $(46)
 $(46)
 $(45)
 
 
Page 10/12
 
 
LINDE PLC AND SUBSIDIARIES
APPENDIX
NON-GAAP MEASURES AND RECONCILIATIONS
(Millions of dollars, except per share data)
(UNAUDITED)
 
Adjusted Income from Continuing Operations (b)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reported income from continuing operations
 $1,029 
 $458 
 $571 
 $948 
 $507 
 $728 
 $513 
 $435 
Add: Pension settlement charge
  - 
  - 
  - 
  46 
  5 
  30 
  8 
  38 
Less: Merger-related divestitures (d)
  - 
  - 
  - 
  (9)
  (1)
  (2)
  (4)
  (5)
Add: Cost reduction programs and other charges
  282 
  187 
  95 
  198 
  159 
  92 
  115 
  83 
Less: Net gain on sale of business
  - 
  - 
  - 
  - 
  - 
  (108)
  - 
  - 
Add: Purchase accounting impacts - Linde AG (c)
  703 
  360 
  343 
  744 
  354 
  312 
  368 
  376 
Total adjustments
  985 
  547 
  438 
  979 
  517 
  324 
  487 
  492 
Adjusted income from continuing operations
 $2,014 
 $1,005 
 $1,009 
 $1,927 
 $1,024 
 $1,052 
 $1,000 
 $927 
 
    
    
    
    
    
    
    
    
Adjusted Diluted EPS from Continuing Operations (b)
    
    
    
    
    
    
    
    
Reported diluted EPS from continuing operations
 $1.93 
 $0.87 
 $1.07 
 $1.73 
 $0.94 
 $1.34 
 $0.94 
 $0.79 
Add: Pension settlement charge
  - 
  - 
  - 
  0.08 
  0.01 
  0.07 
  0.01 
  0.07 
Add: Cost reduction programs and other charges
  0.53 
  0.35 
  0.18 
  0.37 
  0.29 
  0.17 
  0.22 
  0.15 
Less: Merger-related divestitures (d)
  - 
  - 
  - 
  (0.02)
  - 
  (0.01)
  (0.01)
  (0.01)
Less: Net gain on sale of business
  - 
  - 
  - 
  - 
  - 
  (0.21)
  - 
  - 
Add: Purchase accounting impacts - Linde AG
  1.32 
  0.68 
  0.64 
  1.36 
  0.65 
  0.58 
  0.67 
  0.69 
Total adjustments
  1.85 
  1.03 
  0.82 
  1.79 
  0.95 
  0.60 
  0.89 
  0.90 
Adjusted diluted EPS from continuing operations
 $3.78 
 $1.90 
 $1.89 
 $3.52 
 $1.89 
 $1.94 
 $1.83 
 $1.69 
 
    
    
    
    
    
    
    
    
 
    
    
    
    
    
    
    
    
Reported percentage change
  12%
  (8)%
  35%
    
 $7.34 
 
Full Year 2019 Adjusted diluted EPS
 
Adjusted percentage change
  7%
  4%
  12%
    
    
    
    
    
 
Adjusted Diluted EPS from Continuing Operations Guidance (e)
 
Third Quarter 2020
 
 
Full Year 2020
 
 
 
Low End
 
 
High End
 
 
Low End
 
 
High End
 
2020 Adjusted Guidance
 $1.90 
 $1.95 
 $7.60 
 $7.80 
Adjusted percentage change versus 2019 adjusted diluted EPS
  (2)%
  1%
  4%
  6%
Add: Estimated currency headwind
  3%
  3%
  3%
  3%
Adjusted percentage change excluding currency
  1%
  4%
  7%
  9%
 
Adjusted EBITDA and % of Sales
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income from continuing operations
 $1,029 
 $458 
 $571 
 $948 
 $507 
 $728 
 $513 
 $435 
Add: Noncontrolling interests related to continuing operations
  60 
  25 
  35 
  59 
  27 
  3 
  29 
  30 
Add: Net pension and OPEB cost (benefit), excluding service cost
  (90)
  (45)
  (45)
  (9)
  (25)
  2 
  (24)
  15 
Add: Interest expense
  42 
  18 
  24 
  33 
  8 
  (3)
  10 
  23 
Add: Income taxes
  329 
  164 
  165 
  309 
  162 
  298 
  169 
  140 
Add: Depreciation and amortization
  2,266 
  1,124 
  1,142 
  2,418 
  1,162 
  1,095 
  1,195 
  1,223 
EBITDA from continuing operations
  3,636 
  1,744 
  1,892 
  3,758 
  1,841 
  2,123 
  1,892 
  1,866 
Less: Merger-related divestitures (d)
  - 
  - 
  - 
  (13)
  (1)
  (2)
  (6)
  (7)
Less: Net gain on sale of business
  - 
  - 
  - 
  - 
  - 
  (164)
  - 
  - 
Add: Cost reduction programs and other charges
  380 
  249 
  131 
  230 
  212 
  125 
  141 
  89 
Add: Purchase accounting impacts - Linde AG
  49 
  23 
  26 
  38 
  14 
  17 
  14 
  24 
Total adjustments
  429 
  272 
  157 
  255 
  225 
  (24)
  149 
  106 
Adjusted EBITDA from continuing operations
 $4,065 
 $2,016 
 $2,049 
 $4,013 
 $2,066 
 $2,099 
 $2,041 
 $1,972 
 
    
    
    
    
    
    
    
    
 
    
    
    
    
    
    
    
    
Reported sales
 $13,116 
 $6,377 
 $6,739 
 $14,148 
 $7,080 
 $7,000 
 $7,204 
 $6,944 
Adjusted sales
 $13,116 
 $6,377 
 $6,739 
 $14,093 
 $7,077 
 $6,993 
 $7,179 
 $6,914 
% of sales
    
    
    
    
    
    
    
    
EBITDA from continuing operations
  27.7%
  27.3%
  28.1%
  26.6%
  26.0%
  30.3%
  26.3%
  26.9%
Adjusted EBITDA from continuing operations
  31.0%
  31.6%
  30.4%
  28.5%
  29.2%
  30.0%
  28.4%
  28.5%
 
    
    
    
    
    
    
    
    
 
 
(a) The income tax expense (benefit) on the non-GAAP pre-tax adjustments was determined using the applicable tax rates for the jurisdictions that were utilized in calculating the GAAP income tax expense (benefit) and included both current and deferred income tax amounts.
 
(b) Net of income taxes which are shown separately in “Adjusted Income Taxes and Effective Tax Rate”.
 
(c) The company believes that its non-GAAP measures excluding Purchase accounting impacts - Linde AG are useful to investors because: (i) the business combination was a merger of equals in an all-stock merger transaction, with no cash consideration, (ii) the company is managed on a geographic basis and the results of certain geographies are more heavily impacted by purchase accounting than others, causing results that are not comparable at the reportable segment level, therefore, the impacts of purchasing accounting adjustments to each segment vary and are not comparable within the company and when compared to other companies in similar regions,(iii) business management is evaluated and variable compensation is determined based on results excluding purchase accounting impacts, and; (iv) it is important to investors and analysts to understand the purchase accounting impacts to the financial statements.A summary of each of the adjustments made for Purchase accounting impacts - Linde AG are as follows: Adjusted Operating Profit and Margin: The purchase accounting adjustments for the periods presented relate primarily to depreciation and amortization related to the fair value step up of fixed assets and intangible assets (primarily customer related) acquired in the merger. Adjusted Interest Expense - Net: Relates to the amortization of the fair value of debt acquired in the merger. Adjusted Income Taxes and Effective Tax Rate: Relates to the current and deferred income tax impact on the adjustments discussed above. The income tax expense (benefit) on the non-GAAP pre-tax adjustments was determined using the applicable tax rates for the jurisdictions that were utilized in calculating the GAAP income tax expense (benefit) and included both current and deferred income tax amounts. Adjusted Income from Equity Investments: Represents the amortization of increased fair value on equity investments related to depreciable and amortizable assets. Adjusted Noncontrolling Interests from Continuing Operations: Represents the noncontrolling interests’ ownership portion of the adjustments described above determined on an entity by entity basis.
 
(d) To adjust for the results of Praxair's merger-related divestitures.
 
(e) We are providing adjusted earnings per share ("EPS") guidance for 2020. This is a non-GAAP financial measure that represents diluted earnings per share from continuing operations (a GAAP measure) but excludes the impact of certain items that we believe are not representative of our underlying business performance, such as cost reduction and other charges, the impact of potential divestitures or other potentially significant items. Given the uncertainty of timing and magnitude of such items, we cannot provide a reconciliation of the differences between the non-GAAP adjusted EPS guidance and the corresponding GAAP EPS measure without unreasonable effort.
 
 
Page 11/12
 
 
LINDE PLC AND SUBSIDIARIES
APPENDIX
NON-GAAP MEASURES AND RECONCILIATIONS
(Millions of dollars)
(UNAUDITED)
 
 
 
2020
 
 
2019
 
 
2018
 
 
 
Q2
 
 
Q1
 
 
Q4
 
 
Q3
 
 
Q2
 
 
Q1
 
 
Q4
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Debt - Net debt is a financial liquidity metric used by investors, financial analysts and management to evaluate the ability of a company to repay its debt and is calculated as total debt (excluding purchase accounting impacts) less liquid assets.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt
 $17,480 
 $16,875 
 $13,956 
 $13,201 
 $13,957 
 $14,146 
 $15,296 
Less: Cash and cash equivalents
  (4,941)
  (4,014)
  (2,700)
  (2,120)
  (2,686)
  (5,791)
  (4,466)
Net debt
  12,539 
  12,861 
  11,256 
  11,081 
  11,271 
  8,355 
  10,830 
Less: Purchase accounting impacts - Linde AG
  (150)
  (170)
  (195)
  (211)
  (243)
  (262)
  (291)
Adjusted net debt
 $12,389 
 $12,691 
 $11,061 
 $10,870 
 $11,028 
 $8,093 
 $10,539 
Less: Net assets held for sale
  (2)
  (115)
  (123)
  (223)
  (272)
  (1,629)
  (4,730)
Adjusted net debt less net assets held for sale
 $12,387 
 $12,576 
 $10,938 
 $10,647 
 $10,756 
 $6,464 
 $5,809 
 
    
    
    
    
    
    
    
After-tax Return on Capital and Adjusted After-tax Return on Capital (ROC) - After-tax return on capital is a measure used by investors, financial analysts and management to evaluate the return on net assets employed in the business. ROC measures the after-tax operating profit that the company was able to generate with the investments made by all parties in the business (debt, noncontrolling interests and Linde plc shareholders’ equity).
 
    
    
    
    
    
    
    
Reported income from continuing operations
 $458 
 $571 
 $507 
 $728 
 $513 
 $435 
 $2,870 
Add: noncontrolling interests from continuing operations
  25 
  35 
  27 
  3 
  29 
  30 
  (33)
Add: interest expense - net
  18 
  24 
  8 
  (3)
  10 
  23 
  72 
Less: tax benefit on interest expense - net *
  (5)
  (6)
  (2)
  1 
  (3)
  (6)
  (18)
Reported NOPAT
 $496 
 $624 
 $540 
 $729 
 $549 
 $482 
 $2,891 
 
    
    
    
    
    
    
    
Adjusted income from continuing operations
 $1,005 
 $1,009 
 $1,024 
 $1,052 
 $1,000 
 $927 
 $841 
Add: adjusted noncontrolling interests from continuing operations
  39 
  50 
  41 
  46 
  46 
  45 
  40 
Add: adjusted interest expense - net
  40 
  46 
  30 
  19 
  35 
  50 
  50 
Less: tax benefit on interest expense - net *
  (10)
  (12)
  (7)
  (5)
  (9)
  (13)
  (13)
Adjusted NOPAT
 $1,074 
 $1,093 
 $1,088 
 $1,112 
 $1,072 
 $1,009 
 $919 
 
    
    
    
    
    
    
    
 
    
    
    
    
    
    
    
4-quarter trailing reported NOPAT
 $2,389 
 $2,442 
 $2,300 
    
    
    
    
4-quarter trailing adjusted NOPAT
 $4,367 
 $4,365 
 $4,281 
    
    
    
    
 
    
    
    
    
    
    
    
Equity and redeemable noncontrolling interests:
    
    
    
    
    
    
    
Redeemable noncontrolling interests
 $13 
 $92 
 $113 
 $14 
 $15 
 $15 
 $16 
Linde plc shareholders' equity
  45,537 
  44,776 
  49,074 
  48,953 
  50,564 
  51,175 
  51,596 
Noncontrolling interests
  2,387 
  2,375 
  2,448 
  2,341 
  2,315 
  5,457 
  5,484 
Total equity and redeemable noncontrolling interests
 $47,937 
 $47,243 
 $51,635 
 $51,308 
 $52,894 
 $56,647 
 $57,096 
 
    
    
    
    
    
    
    
Reported capital
 $60,474 
 $59,989 
 $62,768 
 $62,166 
 $63,893 
 $63,373 
 $63,196 
 
    
    
    
    
    
    
    
Total equity and redeemable noncontrolling interests
 $47,937 
 $47,243 
 $51,635 
 $51,308 
 $52,894 
 $56,647 
 $57,096 
Add: Adjusted net debt less net assets held for sale
  12,387 
  12,576 
  10,938 
  10,647 
  10,756 
  6,464 
  5,809 
Less: Linde AG Goodwill (a)
  24,256 
  24,256 
  24,256 
  24,197 
  24,197 
  24,197 
  24,146 
Less: Linde AG Indefinite lived intangibles (a)
  1,868 
  1,868 
  1,868 
  1,868 
  1,868 
  1,868 
  1,648 
Adjusted capital
 $34,200 
 $33,695 
 $36,449 
 $35,890 
 $37,585 
 $37,046 
 $37,111 
 
    
    
    
    
    
    
    
(a) Represent balance sheet purchase accounting impacts of non-amortizing assets related to the Linde AG merger.
 
    
    
    
    
    
    
    
Ending capital (see above)
 $60,474 
 $59,989 
 $62,768 
    
    
    
    
5-quarter average ending capital
 $61,858 
 $62,438 
 $63,079 
    
    
    
    
 
    
    
    
    
    
    
    
Ending adjusted capital (see above)
 $34,200 
 $33,695 
 $36,449 
    
    
    
    
5-quarter average ending adjusted capital
 $35,564 
 $36,133 
 $36,816 
    
    
    
    
 
    
    
    
    
    
    
    
After-tax ROC (4 quarter reported NOPAT / 5-quarter average ending capital)
  3.9%
  3.9%
  3.6%
    
    
    
    
Adjusted after-tax ROC (4 quarter trailing adjusted NOPAT / 5-quarter average ending adjusted capital)
  12.3%
  12.1%
  11.6%
    
    
    
    
 
    
    
    
    
    
    
    
* Tax benefit on interest expense - net is generally presented using the reported effective rate.
 
 
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