Supplemental Information

12 Months Ended

Dec. 31, 2020

SUPPLEMENTAL INFORMATION

The years ended December 31, 2020 and 2019 reflect the combined business. December 31, 2018 reflects Praxair for the entire year and the Linde AG for the period beginning after October 31, 2018 (the merger date), including the impacts of purchase accounting.

Income Statement


(Millions of dollars) Year Ended December 31,	2020		2019		2018
Selling, General and Administrative
Selling	$	1,303	$	1,600	$	757
General and administrative	1,890		1,857		872
	$	3,193	$	3,457	$	1,629


Year Ended December 31,	2020		2019		2018
Depreciation and Amortization (a)
Depreciation	$	3,861	$	3,940	$	1,615
Amortization of intangibles (Note 10)	765		735		215
Depreciation and Amortization	$	4,626	$	4,675	$	1,830


Year Ended December 31,	2020		2019		2018
Other Income (Expenses) – Net
Currency related net gains (losses)	$	(28)	$	(11)	$	4
Partnership income	10		8		8

Severance expense	(5)		(7)		(7)
Asset divestiture gains (losses) – net	(78)		10		6
Other – net	40		68		7
	$	(61)	$	68	$	18


Year Ended December 31,	2020		2019		2018
Interest Expense – Net
Interest incurred on debt and other	$	277	$	284	$	297
Interest income	(55)		(112)		(80)
Amortization on acquired debt	(85)		(96)		(21)
Interest capitalized	(38)		(38)		(20)
Bond redemption (b)	16		—		26
	$	115	$	38	$	202


Year Ended December 31,	2020		2019		2018
Income Attributable to Noncontrolling Interests
Noncontrolling interests' operations (c)	$	125	$	87	$	12

Redeemable noncontrolling interests' operations (Note 14)	—		2		3
Noncontrolling interests from continuing operations	$	125	$	89	$	15
Noncontrolling interests from discontinued operations	—		$	7	$	9

Balance Sheet


(Millions of dollars) December 31,	2020		2019
Accounts Receivable


Trade and Other receivables	$	4,638	$	4,628
Less: allowance for expected credit losses	(471)		(306)
	$	4,167	$	4,322

Receivables

For trade receivables an expected credit loss approach was adopted as of January 1, 2020. Linde applies loss rates that are lifetime expected credit losses at initial recognition of the receivables. These expected loss rates are based on an analysis of the actual historical default rates for each business, taking regional circumstances into account. If necessary, these historical default rates are adjusted to reflect the impact of current changes in the macroeconomic environment using forward-looking information. The loss rates are also evaluated based on the expectations of the responsible management team regarding the collectability of the receivables. Gross trade receivables aged less than one year were $4,169 million and $4,075 million at December 31, 2020 and December 31, 2019, respectively, and gross receivables aged greater than one year were $358 million and $249 million at December 31, 2020 and December 31, 2019, respectively. Gross other receivables were $111 million and $304 million at December 31, 2020 and December 31, 2019, respectively. Receivables aged greater than one year are generally fully reserved unless specific circumstances warrant exceptions, such as those backed by federal governments.

Provisions for expected credit losses were $182 million, $170 million and $25 million for the twelve months ended December 31, 2020, 2019 and 2018, respectively. The allowance activity in the twelve months ended December 31, 2020 related to write-offs of uncollectible amounts, net of recoveries and currency movements is not material.


December 31,	2020		2019
Inventories
Raw materials and supplies	$	411	$	396
Work in process	337		331
Finished goods	981		970
	$	1,729	$	1,697


December 31,	2020		2019
Prepaid and Other Current Assets

Prepaid and other deferred charges (d)	$	516	$	516
VAT recoverable	261		275
Unrealized gains on derivatives (Note 12)	110		85
Assets held for sale (Note 2)	4		125
Other	221		264
	$	1,112	$	1,265


December 31,	2020		2019
Other Long-term Assets
Pension assets (Note 16)	$	55	$	78
Insurance contracts (e)	61		75
Long-term receivables, net (f)	201		150
Lease assets (Note 4)	1,090		1,025
Deposits	47		56
Investments carried at cost	23		40
Deferred charges	96		90
Deferred income taxes (Note 5)	268		243
Unrealized gains on derivatives (Note 12)	90		82
Other	217		174
	$	2,148	$	2,013


December 31,	2020		2019
Other Current Liabilities
Accrued expenses	$	1,226	$	1,079
Payroll	653		619
VAT payable	336		268
Pension and postretirement (Note 16)	34		27
Interest payable	135		127
Lease liability (Note 4)	275		260
Insurance reserves	38		38
Unrealized losses on derivatives (Note 12)	70		54
Noncontrolling interest redemption and dividend (Note 14)	231		—
Synergy cost accruals (Note 3)	199		140
Other	1,135		891
	$	4,332	$	3,503


December 31,	2020		2019
Other Long-term Liabilities
Pension and postretirement (Note 16)	$	2,963	$	2,548
Tax liabilities for uncertain tax positions (Note 5)	355		342
Tax Act liabilities for deemed repatriation (Note 5)	204		235

Lease liability (Note 4)	794		716
Interest and penalties for uncertain tax positions (Note 5)	99		65
Insurance reserves	33		28
Asset retirement obligation	302		293
Unrealized losses on derivatives (Note 12)	11		45
Synergy cost accruals (Note 3)	170		60
Other	588		556
	$	5,519	$	4,888


December 31,	2020		2019
Deferred Credits
Deferred income taxes (Note 5)	$	6,704	$	6,889
Other	532		347
	$	7,236	$	7,236


December 31,	2020		2019
Accumulated Other Comprehensive Income (Loss)
Cumulative translation adjustment - net of taxes:
Americas (g)	$	(3,788)	$	(3,357)
EMEA (g)	1,020		(136)
APAC (g)	616		(140)
Engineering	354		(29)
Other	(1,020)		282
	(2,818)		(3,380)
Derivatives – net of taxes	4		(27)


Pension/OPEB funded status obligation (net of $560 million and $446 million tax benefit in 2020 and 2019) (Note 16)	(1,876)		(1,407)
	$	(4,690)	$	(4,814)

(a)Depreciation and amortization expense in 2020 include $1,267 million and $653 million, respectively, of Linde AG purchase accounting impacts. In 2019, depreciation and amortization expense include $1,298 million and $642 million, respectively, of Linde AG purchase accounting impacts.

(b)In December 2018, Linde repaid $600 million of 4.50% notes due 2019 and €600 million of 1.50% notes due 2020 resulting in a $26 million interest charge. In December 2020, the company repaid $500 million of 4.05% notes and $500 million of 3.00% notes that were due in 2021 resulting in a $16 million interest charge.

(c)Noncontrolling interests from continuing operations includes a $1 million benefit in 2019 and a $35 million charge in 2018 related to the 8% of Linde AG Shares which were not tendered in the Exchange Offer. Linde AG completed the cash merger squeeze-out of all its minority shares on April 8, 2019 (see Note 2).

In addition, 2020, 2019 and 2018 noncontrolling interests from continuing operations includes $57 million, $54 million and $24 million, respectively, of Linde AG purchase accounting impacts.

(d) Includes estimated income tax payments of $115 million in both 2020 and 2019.

(e) Consists primarily of insurance contracts and other investments to be utilized for non-qualified pension and OPEB obligations.

(f) The balances at December 31, 2020 and 2019 are net of reserves of $34 million and $44 million, respectively. The amounts in both years relate primarily to long-term notes receivable from customers in APAC and EMEA and government receivables in Brazil.

(g) Americas consists of currency translation adjustments primarily in Canada, Mexico, and Brazil. EMEA relates primarily to Germany, the U.K. and Sweden. APAC relates primarily to China, South Korea, India and Australia.