Exhibit 99.1
 
 
Press release
 
Linde Reports First-Quarter 2021 Results
 
Financial Highlights
➢
Sales $7.2 billion, up 7% versus prior-year quarter
➢
Operating profit $1.2 billion; adjusted operating profit $1.7 billion, up 25%
➢
Operating profit margin 16.7%; adjusted operating profit margin 23.3%, up 320 basis points
➢
EPS $1.86; adjusted EPS $2.49, up 32%
➢
Strong operating cash flow $2.1 billion, up 57%
➢
Increased full-year 2021 adjusted EPS guidance to $9.60 - $9.80, represents 17% to 19% growth year-over-year
 
Guildford, UK, May 6, 2021 – Linde plc (NYSE: LIN; FWB: LIN) today reported first-quarter 2021 income from continuing operations of $979 million and diluted earnings per share of $1.86, an increase of 74% versus prior year. Excluding Linde AG purchase accounting impacts and other charges, adjusted income from continuing operations was $1,312 million, up 30% versus prior year and 8% sequentially. Adjusted earnings per share was $2.49, 32% above prior year and 8% higher sequentially.
 
Linde’s sales for the first quarter were $7,243 million, 7% above prior year and flat sequentially. Compared to prior year, underlying sales increased 5%, including 2% price attainment and 3% higher volumes, led by healthcare, electronics and a recovery in the cyclical end markets of manufacturing, metals, chemicals and refining. Sequentially, underlying sales increased 2% driven by higher volume and price.
 
First-quarter operating profit was $1,213 million. Adjusted operating profit of $1,688 million was up 25% versus prior year led by higher price and continued productivity initiatives across all segments. Adjusted operating margin of 23.3% expanded 320 basis points versus prior year and 110 basis points sequentially.
 
First-quarter operating cash flow of $2,109 million increased 57% versus prior year. After capital expenditures of $762 million, free cash flow was $1,347 million, up 148% versus prior year. During the quarter, the company returned $1,404 million to shareholders through dividends and stock repurchases, net of issuance.
 
Commenting on the financial results and business outlook, Chief Executive Officer Steve Angel said, ”Linde employees delivered another strong quarter of financial results with operating profit margins expanding over 320 basis points, ROC improving to 14.5% and operating cash flow increasing 57%. In addition, EPS grew 32%, reaching a new record high of $2.49. The resiliency of our business model coupled with the ability to leverage any economic recovery has allowed Linde to continue delivering stellar results.”
 
Angel continued, “Looking ahead, I have confidence the company will continue to create significant shareholder value for years to come.”
 
For the second quarter of 2021, Linde expects adjusted diluted earnings per share in the range of $2.50 to $2.55, up 37% to 39% versus the same quarter in 2019 and 32% to 34% versus prior-year quarter. This guidance assumes a year-over-year 4% currency tailwind and sequentially a negative currency impact of 1%.
 
 
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Press release
 
For the full year 2021, the company expects adjusted diluted earnings per share to be in the range of $9.60 to $9.80, up 31% to 34% versus 2019 and 17% to 19% versus prior year. This guidance assumes a 2% currency tailwind versus 2020. Full-year capital expenditures are expected to be in the range of $3.0 billion to $3.4 billion to support maintenance and growth requirements including the $3.5 billion contractual sale of gas project backlog.
 
First-Quarter 2021 Results by Segment
 
Americas sales of $2,840 million were 6% above prior year. Underlying sales increased 7% driven by 3% higher pricing and 4% higher volume, led by higher demand across all end markets. Sequentially, price increased 1% and volumes grew 3%, led by higher demand in healthcare, electronics and cyclical end markets. Operating profit of $795 million was 28.0% of sales, up 330 basis points versus prior year.
 
APAC (Asia Pacific) sales of $1,436 million were 7% above prior year. Underlying sales grew 11% driven by 1% price attainment and 10% volume growth, primarily in the electronics and cyclical end markets plus project start-ups. Sequentially, volume was flat as contribution from project start-ups was offset by weaker base volumes, mainly due to seasonality. Divestitures were driven by an accounting deconsolidation of a joint venture which reduced sales 11% versus prior year and 12% sequentially, but had no impact on earnings per share. Operating profit of $351 million was 24.4% of sales, up 340 basis points versus prior year.
 
EMEA (Europe, Middle East & Africa) sales of $1,799 million were up 10% versus prior year. Underlying sales grew 4%, primarily led by 3% higher pricing and increased demand from the healthcare end market. Sequentially, underlying sales were flat, with 1% higher pricing offset by slightly lower volumes. Operating profit of $451 million was 25.1% of sales, up 340 basis points versus prior year.
 
Linde Engineering sales were $674 million, 11% above prior year, and operating profit was $109 million or 16.2% of sales. Order intake for the quarter was $461 million, up 30% sequentially, and third-party sale of equipment backlog was $4.3 billion.
 
Earnings Call
A teleconference on Linde’s first-quarter 2021 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: 8561159
Live webcast (listen-only)
 
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 2020 sales of $27 billion (€24 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.
 
 
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Press release
 
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
 
Adjusted amounts, free cash flow and return on capital are non-GAAP measures. 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 2021. 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. 
 
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, includingtrade 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, 2020 filed with the SEC on March 1, 2021 which should be reviewed carefully. Please consider Linde plc’s forward-looking statements in light of those risks.
 
 
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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 9 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
 
 
 
2021
 
 
2020
 
 
2021
 
 
2020
 
 
2021
 
 
2020
 
 
2021
 
 
2020
 
Quarter Ended March 31
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reported GAAP Amounts
 $7,243 
 $6,739 
 $1,213 
 $733 
 $979 
 $571 
 $1.86 
 $1.07 
Cost reduction program and other charges (a)
  - 
  - 
  (8)
  131 
  (28)
  95 
  (0.05)
  0.18 
Purchase accounting impacts - Linde AG (b)
  - 
  - 
  483 
  488 
  361 
  343 
  0.68 
  0.64 
Total adjustments
  - 
  - 
  475 
  619 
  333 
  438 
  0.63 
  0.82 
Adjusted amounts
 $7,243 
 $6,739 
 $1,688 
 $1,352 
 $1,312 
 $1,009 
 $2.49 
 $1.89 
 
(a) To adjust for cost reduction program and other charges; 2021 includes severance of $26 million for the quarter and other cost reduction charges of $18 million more than offset by an other net benefit of $52 million.
(b) To adjust for purchase accounting impacts related to the merger.
 
 
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Press release
 
LINDE PLC AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(Millions of dollars, except per share data)
(UNAUDITED)
 
 
 
Quarter Ended
 
 
 
March 31,
 
 
 
2021
 
 
2020
 
 
 
 
 
 
 
 
SALES
 $7,243 
 $6,739 
Cost of sales
  4,054 
  3,843 
Selling, general and administrative
  787 
  861 
Depreciation and amortization
  1,166 
  1,142 
Research and development
  35 
  44 
Cost reduction programs and other charges
  (8)
  131 
Other income (expense) - net
  4 
  15 
OPERATING PROFIT
  1,213 
  733 
Interest expense - net
  20 
  24 
Net pension and OPEB cost (benefit), excluding service cost
  (49)
  (45)
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND EQUITY INVESTMENTS
  1,242 
  754 
Income taxes
  268 
  165 
INCOME FROM CONTINUING OPERATIONS BEFORE EQUITY INVESTMENTS
  974 
  589 
Income from equity investments
  43 
  17 
INCOME FROM CONTINUING OPERATIONS (INCLUDING NONCONTROLLING INTERESTS)
  1,017 
  606 
Add: income from discontinued operations, net of tax
  1 
  2 
INCOME (INCLUDING NONCONTROLLING INTERESTS)
  1,018 
  608 
Less: noncontrolling interests from continuing operations
  (38)
  (35)
Less: noncontrolling interests from discontinued operations
  - 
  - 
NET INCOME - LINDE PLC
 $980 
 $573 
 
    
    
NET INCOME - LINDE PLC
    
    
Income from continuing operations
 $979 
 $571 
Income from discontinued operations
 $1 
 $2 
 
    
    
PER SHARE DATA - LINDE PLC SHAREHOLDERS
    
    
 
    
    
Basic earnings per share from continuing operations
 $1.87 
 $1.07 
Basic earnings per share from discontinued operations
  - 
  - 
Basic earnings per share
 $1.87 
 $1.07 
 
    
    
Diluted earnings per share from continuing operations
  1.86 
  1.07 
Diluted earnings per share from discontinued operations
  - 
  - 
Diluted earnings per share
 $1.86 
 $1.07 
 
    
    
Cash dividends
 $1.060 
 $0.963 
 
    
    
WEIGHTED AVERAGE SHARES OUTSTANDING
    
    
Basic shares outstanding (000's)
  522,459 
  531,215 
Diluted shares outstanding (000's)
  526,927 
  534,956 
 
Note: See page 9 for a reconciliation to adjusted amounts which are Non-GAAP.
 
 
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Press release
 
LINDE PLC AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(Millions of dollars)
(UNAUDITED)
 
 
 
March 31,
 
 
December 31,
 
 
 
2021
 
 
2020
 
ASSETS
 
 
 
 
 
 
Cash and cash equivalents
 $4,096 
 $3,754 
Accounts receivable - net
  4,139 
  4,167 
Contract assets
  137 
  162 
Inventories
  1,695 
  1,729 
Prepaid and other current assets
  1,065 
  1,112 
TOTAL CURRENT ASSETS
  11,132 
  10,924 
Property, plant and equipment - net
  26,934 
  28,711 
Goodwill
  27,472 
  28,201 
Other intangibles - net
  14,559 
  16,184 
Other long-term assets
  4,896 
  4,209 
TOTAL ASSETS
 $84,993 
 $88,229 
 
    
    
LIABILITIES AND EQUITY
    
    
Accounts payable
 $2,945 
 $3,095 
Short-term debt
  3,276 
  3,251 
Current portion of long-term debt
  2,524 
  751 
Contract liabilities
  1,863 
  1,769 
Other current liabilities
  4,419 
  4,874 
TOTAL CURRENT LIABILITIES
  15,027 
  13,740 
Long-term debt
  9,950 
  12,152 
Other long-term liabilities
  12,383 
  12,755 
TOTAL LIABILITIES
  37,360 
  38,647 
 
    
    
REDEEMABLE NONCONTROLLING INTERESTS
  13 
  13 
 
    
    
LINDE PLC SHAREHOLDERS' EQUITY:
    
    
Common stock
  1 
  1 
Additional paid-in capital
  40,192 
  40,202 
Retained earnings
  17,563 
  17,178 
Accumulated other comprehensive income (loss)
  (5,345)
  (4,690)
Less: Treasury stock, at cost
  (6,201)
  (5,374)
Total Linde plc shareholders' equity
  46,210 
  47,317 
Noncontrolling interests
  1,410 
  2,252 
TOTAL EQUITY
  47,620 
  49,569 
TOTAL LIABILITIES AND EQUITY
 $84,993 
 $88,229 
 
 
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Press release
 
LINDE PLC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Millions of dollars)
(UNAUDITED)
 
 
 
Quarter Ended
 
 
 
March 31,
 
 
 
2021
 
 
2020
 
OPERATIONS
 
 
 
 
 
 
Net income - Linde plc
 $980 
 $573 
Less: income from discontinued operations, net of tax and noncontrolling interests
  (1)
  (2)
Add: noncontrolling interests
  38 
  35 
Net income (including noncontrolling interests)
  1,017 
  606 
 
    
    
Adjustments to reconcile net income to net cash provided by operating activities:
    
    
Cost reduction programs and other charges, net of payments (a)
  (76)
  40 
Depreciation and amortization
  1,166 
  1,142 
Accounts receivable
  (178)
  (109)
Contract assets and liabilities, net
  191 
  176 
Inventory
  (60)
  (62)
Payables and accruals
  69 
  (183)
Pension contributions
  (12)
  (17)
Deferred income taxes and other
  (8)
  (246)
Net cash provided by operating activities
  2,109 
  1,347 
 
    
    
INVESTING
    
    
Capital expenditures
  (762)
  (803)
Acquisitions, net of cash acquired
  (10)
  (41)
Divestitures and asset sales
  21 
  231 
Net cash provided by (used for) investing activities
  (751)
  (613)
 
    
    
FINANCING
    
    
Debt increase (decrease) - net
  681 
  3,112 
Issuances of ordinary shares
  17 
  13 
Purchases of ordinary shares
  (868)
  (1,828)
Cash dividends - Linde plc shareholders
  (553)
  (511)
Noncontrolling interest transactions and other
  (247)
  (27)
Net cash provided by (used for) financing activities
  (970)
  759 
 
    
    
Effect of exchange rate changes on cash and cash equivalents
  (46)
  (179)
 
    
    
Change in cash and cash equivalents
  342 
  1,314 
Cash and cash equivalents, beginning-of-period
  3,754 
  2,700 
Cash and cash equivalents, end-of-period
 $4,096 
 $4,014 
 
(a) Cost reduction programs and other charges was a net benefit of $8 million and a charge of $131 million for the quarters ended March 31, 2021 and 2020, respectively. Related cash outflows were $68 million and $91 million for the same respective periods.
 
 
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Press release
 
LINDE PLC AND SUBSIDIARIES
SEGMENT INFORMATION
(Millions of dollars)
(UNAUDITED)
 
 
 
 Quarter Ended March 31,
 
 
 
2021
 
 
2020
 
SALES
 
 
 
 
 
 
Americas
 $2,840 
 $2,677 
EMEA
  1,799 
  1,633 
APAC
  1,436 
  1,336 
Engineering
  674 
  608 
Other
  494 
  485 
Total segment sales
 $7,243 
 $6,739 
 
    
    
 
    
    
OPERATING PROFIT
    
    
Americas
 $795 
 $661 
EMEA
  451 
  355 
APAC
  351 
  281 
Engineering
  109 
  91 
Other
  (18)
  (36)
Segment operating profit
 $1,688 
 $1,352 
Cost reduction programs and other charges
  8 
  (131)
Purchase accounting impacts - Linde AG
  (483)
  (488)
Total operating profit
 $1,213 
 $733 
 
 
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Press release
 
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.
 
 
 
 2021
 
 
 2020
 
 
 
Q1
 
 
Q4
 
 
Q3
 
 
Q2
 
 
Q1
 
Adjusted Operating Profit and Operating Margin
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reported operating profit
 $1,213 
 $1,029 
 $969 
 $591 
 $733 
Add: Cost reduction programs and other charges
  (8)
  78 
  48 
  249 
  131 
Less: Net gain on sale of businesses
  - 
  - 
  - 
  - 
  - 
Add: Purchase accounting impacts - Linde AG (c)
  483 
  506 
  498 
  477 
  488 
Total adjustments
  475 
  584 
  546 
  726 
  619 
Adjusted operating profit
 $1,688 
 $1,613 
 $1,515 
 $1,317 
 $1,352 
 
    
    
    
    
    
Reported percentage change
  65%
    
    
    
  20%
Adjusted percentage change
  25%
    
    
    
  11%
 
    
    
    
    
    
Reported sales
 $7,243 
 $7,272 
 $6,855 
 $6,377 
 $6,739 
 
    
    
    
    
    
Reported operating margin
  16.7%
  14.2%
  14.1%
  9.3%
  10.9%
Adjusted operating margin
  23.3%
  22.2%
  22.1%
  20.7%
  20.1%
 
    
    
    
    
    
Adjusted Depreciation and amortization
    
    
    
    
    
Reported depreciation and amortization
 $1,166 
 $1,192 
 $1,168 
 $1,124 
 $1,142 
Less: Purchase accounting impacts - Linde AG (c)
  (478)
  (489)
  (487)
  (468)
  (476)
Adjusted depreciation and amortization
 $688 
 $703 
 $681 
 $656 
 $666 
 
    
    
    
    
    
Adjusted Other Income (Expense) - net
    
    
    
    
    
Reported Other Income (Expense) - net
 $4 
 $(47)
 $(29)
 $- 
 $15 
Add: Purchase accounting impacts - Linde AG (c)
  (5)
  (17)
  (11)
  (9)
  (12)
Adjusted Other Income (Expense) - net
 $9 
 $(30)
 $(18)
 $9 
 $27 
 
    
    
    
    
    
Adjusted Net Pension and OPEB Cost (Benefit), Excluding Service Cost
    
    
    
    
    
Reported net pension and OPEB cost (benefit), excluding service cost
 $(49)
 $(46)
 $(41)
 $(45)
 $(45)
Add: Pension settlement charges
  - 
  - 
  (6)
  - 
  - 
Adjusted Net Pension and OPEB cost (benefit), excluding service costs
 $(49)
 $(46)
 $(47)
 $(45)
 $(45)
 
    
    
    
    
    
Adjusted Interest Expense - Net
    
    
    
    
    
Reported interest expense - net
 $20 
 $35 
 $38 
 $18 
 $24 
Add: Purchase accounting impacts - Linde AG (c)
  18 
  18 
  23 
  22 
  22 
Less: Bond Redemption
  - 
  (16)
  - 
  - 
  - 
Total adjustments
  18 
  2 
  23 
  22 
  22 
Adjusted interest expense - net
 $38 
 $37 
 $61 
 $40 
 $46 
 
    
    
    
    
    
Adjusted Income Taxes (a)
    
    
    
    
    
Reported income taxes
 $268 
 $253 
 $265 
 $164 
 $165 
Add: Purchase accounting impacts - Linde AG (c)
  118 
  107 
  75 
  95 
  122 
Add: Pension settlement charges
  - 
  - 
  1 
  - 
  - 
Add: Cost reduction programs and other charges
  20 
  20 
  12 
  62 
  36 
Less: Bond Redemption
  - 
  4 
  - 
  - 
  - 
Total adjustments
  138 
  131 
  88 
  157 
  158 
Adjusted income taxes
 $406 
 $384 
 $353 
 $321 
 $323 
 
    
    
    
    
    
Adjusted Effective Tax Rate (a)
    
    
    
    
    
Reported income before income taxes and equity investments
 $1,242 
 $1,040 
 $972 
 $618 
 $754 
Add: Pension settlement charge
  - 
  - 
  6 
  - 
  - 
Add: Purchase accounting impacts - Linde AG (c)
  465 
  488 
  475 
  455 
  466 
Add: Cost reduction programs and other charges
  (8)
  78 
  48 
  249 
  131 
Less: Bond Redemption
  - 
  16 
  - 
  - 
  - 
Total adjustments
  457 
  582 
  529 
  704 
  597 
Adjusted income before income taxes and equity investments
 $1,699 
 $1,622 
 $1,501 
 $1,322 
 $1,351 
 
    
    
    
    
    
Reported Income taxes
 $268 
 $253 
 $265 
 $164 
 $165 
Reported effective tax rate
  21.6%
  24.3%
  27.3%
  26.5%
  21.9%
 
    
    
    
    
    
Adjusted income taxes
 $406 
 $384 
 $353 
 $321 
 $323 
Adjusted effective tax rate
  23.9%
  23.7%
  23.5%
  24.3%
  23.9%
 
    
    
    
    
    
Income from Equity Investments
    
    
    
    
    
Reported income from equity investments
 $43 
 $16 
 $23 
 $29 
 $17 
Add: Purchase accounting impacts - Linde AG (c)
  19 
  15 
  14 
  14 
  14 
Adjusted income from equity investments
 $62 
 $31 
 $37 
 $43 
 $31 
 
 
Page 9/11
 
 
 
Press release
 
LINDE PLC AND SUBSIDIARIES
APPENDIX
NON-GAAP MEASURES AND RECONCILIATIONS
(Millions of dollars, except per share data)
(UNAUDITED)
 
 
 
 2021
 
 
 2020
 
 
 
Q1
 
 
Q4
 
 
Q3
 
 
Q2
 
 
Q1
 
Adjusted Noncontrolling Interests from Continuing Operations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reported noncontrolling interests from continuing operations
 $(38)
 $(34)
 $(31)
 $(25)
 $(35)
Add: Cost reduction programs and other charges
  - 
  (4)
  - 
  - 
  - 
Add: Purchase accounting impacts - Linde AG (c)
  (5)
  (14)
  (14)
  (14)
  (15)
Total adjustments
  (5)
  (18)
  (14)
  (14)
  (15)
Adjusted noncontrolling interests from continuing operations
 $(43)
 $(52)
 $(45)
 $(39)
 $(50)
 
    
    
    
    
    
Adjusted Income from Continuing Operations (b)
    
    
    
    
    
Reported income from continuing operations
 $979 
 $769 
 $699 
 $458 
 $571 
Add: Pension settlement charge
  - 
  - 
  5 
  - 
  - 
Add: Cost reduction programs and other charges
  (28)
  54 
  36 
  187 
  95 
Less: Bond redemption
  - 
  12 
  - 
  - 
  - 
Add: Purchase accounting impacts - Linde AG (c)
  361 
  382 
  400 
  360 
  343 
Total adjustments
  333 
  448 
  441 
  547 
  438 
Adjusted income from continuing operations
 $1,312 
 $1,217 
 $1,140 
 $1,005 
 $1,009 
 
    
    
    
    
    
Adjusted Diluted EPS from Continuing Operations (b)
    
    
    
    
    
Reported diluted EPS from continuing operations
 $1.86 
 $1.45 
 $1.32 
 $0.87 
 $1.07 
Add: Pension settlement charge
  - 
  - 
  0.01 
  - 
  - 
Add: Cost reduction programs and other charges
  (0.05)
  0.10 
  0.07 
  0.35 
  0.18 
Less: Bond Redemption
  - 
  0.02 
  - 
  - 
  - 
Add: Purchase accounting impacts - Linde AG
  0.68 
  0.73 
  0.75 
  0.68 
  0.64 
Total adjustments
  0.63 
  0.85 
  0.83 
  1.03 
  0.82 
Adjusted diluted EPS from continuing operations
 $2.49 
 $2.30 
 $2.15 
 $1.90 
 $1.89 
 
    
    
    
    
    
Reported percentage change
  74%
  54%
  (1)%
  (7)%
  35%
Adjusted percentage change
  32%
  22%
  11%
  4%
  12%
 
Adjusted Diluted EPS from Continuing Operations Guidance (d)
 
Second Quarter 2021
 
 
Full Year 2021
 
 
 
 
Low End
 
 
High End
 
 
Low End
 
 
High End
 
 
2021 Adjusted Guidance
 $2.50 
 $2.55 
 $9.60 
 $9.80 
 
Adjusted percentage changes versus 2020 adjusted diluted EPS
  32%
  34%
  17%
  19%
 
Add: Estimated currency headwind/(tailwind)
  (4)%
  (4)%
  (2)%
  (2)%
 
Adjusted percentage change excluding currency
  28%
  30%
  15%
  17%
 
 
Adjusted EBITDA and % of Sales
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income from continuing operations
 $979 
 $769 
 $699 
 $458 
 $571 
Add: Noncontrolling interests related to continuing operations
  38 
  34 
  31 
  25 
  35 
Add: Net pension and OPEB cost (benefit), excluding service cost
  (49)
  (46)
  (41)
  (45)
  (45)
Add: Interest expense
  20 
  35 
  38 
  18 
  24 
Add: Income taxes
  268 
  253 
  265 
  164 
  165 
Add: Depreciation and amortization
  1,166 
  1,192 
  1,168 
  1,124 
  1,142 
EBITDA from continuing operations
  2,422 
  2,237 
  2,160 
  1,744 
  1,892 
Add: Cost reduction programs and other charges
  (8)
  78 
  48 
  249 
  131 
Add: Purchase accounting impacts - Linde AG
  24 
  32 
  25 
  23 
  26 
Total adjustments
  16 
  110 
  73 
  272 
  157 
Adjusted EBITDA from continuing operations
 $2,438 
 $2,347 
 $2,233 
 $2,016 
 $2,049 
 
    
    
    
    
    
Reported sales
 $7,243 
 $7,272 
 $6,855 
 $6,377 
 $6,739 
% of sales
    
    
    
    
    
EBITDA from continuing operations
  33.4%
  30.8%
  31.5%
  27.3%
  28.1%
Adjusted EBITDA from continuing operations
  33.7%
  32.3%
  32.6%
  31.6%
  30.4%
 
(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) We are providing adjusted earnings per share ("EPS") guidance for 2021. 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.
 
 
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LINDE PLC AND SUBSIDIARIES
APPENDIX
NON-GAAP MEASURES AND RECONCILIATIONS
(Millions of dollars)
(UNAUDITED)
 
 
 
2021
 
 
2020
 
 
2019
 

 
Q1
 
 
Q4
 
 
Q3
 
 
Q2
 
 
Q1
 
 
Q4
 
 
Q3
 
 
Q2
 
 
Q1
 










 
Free Cash Flow (FCF) - Free cash flow is a measure used by investors, financial analysts and management to evaluate the ability of a company to pursue opportunities that enhance shareholder value. FCF equals cash flow from operations less capital expenditures.
 
Operating Cash Flow
 $2,109 
 $2,434 
 $1,884 
 $1,764 
 $1,347 
 $2,174 
 $1,872 
 $1,005 
 $1,068 
Less: Capital Expenditures
  (762)
  (1,027)
  (787)
  (783)
  (803)
  (1,015)
  (959)
  (865)
  (843)
Free Cash Flow
 $1,347 
 $1,407 
 $1,097 
 $981 
 $544 
 $1,159 
 $913 
 $140 
 $225 
 
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
 $15,750 
 $16,154 
 $17,803 
 $17,480 
 $16,875 
 $13,956 
 $13,201 
 $13,957 
 $14,146 
Less: Cash and cash equivalents
  (4,096)
  (3,754)
  (5,199)
  (4,941)
  (4,014)
  (2,700)
  (2,120)
  (2,686)
  (5,791)
Net debt
  11,654 
  12,400 
  12,604 
  12,539 
  12,861 
  11,256 
  11,081 
  11,271 
  8,355 
Less: Purchase accounting impacts - Linde AG
  (98)
  (121)
  (133)
  (150)
  (170)
  (195)
  (211)
  (243)
  (262)
Adjusted net debt
 $11,556 
 $12,279 
 $12,471 
 $12,389 
 $12,691 
 $11,061 
 $10,870 
 $11,028 
 $8,093 
Less: Net assets held for sale
  (4)
  (3)
  (2)
  (2)
  (115)
  (123)
  (223)
  (272)
  (1,629)
Adjusted net debt less net assets held for sale
 $11,552 
 $12,276 
 $12,469 
 $12,387 
 $12,576 
 $10,938 
 $10,647 
 $10,756 
 $6,464 
 
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
 $979 
 $769 
 $699 
 $458 
 $571 
 $507 
 $728 
 $513 
 $435 
Add: noncontrolling interests from continuing operations
  38 
  34 
  31 
  25 
  35 
  27 
  3 
  29 
  30 
Add: interest expense - net
  20 
  35 
  38 
  18 
  24 
  8 
  (3)
  10 
  23 
Less: tax benefit on interest expense - net *
  (5)
  (9)
  (10)
  (5)
  (6)
  (2)
  1 
  (3)
  (6)
Reported NOPAT
 $1,032 
 $829 
 $758 
 $496 
 $624 
 $540 
 $729 
 $549 
 $482 
 
    
    
    
    
    
    
    
    
    
Adjusted income from continuing operations
 $1,312 
 $1,217 
 $1,140 
 $1,005 
 $1,009 
 $1,024 
 $1,052 
 $1,000 
 $927 
Add: adjusted noncontrolling interests from continuing operations
  43 
  52 
  45 
  39 
  50 
  41 
  46 
  46 
  45 
Add: adjusted interest expense - net
  38 
  37 
  61 
  40 
  46 
  30 
  19 
  35 
  50 
Less: tax benefit on interest expense - net *
  (10)
  (9)
  (15)
  (10)
  (12)
  (7)
  (5)
  (9)
  (13)
Adjusted NOPAT
 $1,383 
 $1,297 
 $1,231 
 $1,074 
 $1,093 
 $1,088 
 $1,112 
 $1,072 
 $1,009 
 
4-quarter trailing reported NOPAT
 $3,115 
 $2,707 
 $2,418 
 $2,389 
 $2,442 
 $2,300 
 
 
 
4-quarter trailing adjusted NOPAT
 $4,985 
 $4,695 
 $4,486 
 $4,367 
 $4,365 
 $4,281 
 
 
 
 
Equity and redeemable noncontrolling interests:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Redeemable noncontrolling interests
 $13 
 $13 
 $13 
 $13 
 $92 
 $113 
 $14 
 $15 
 $15 
Linde plc shareholders' equity
  46,210 
  47,317 
  46,175 
  45,537 
  44,776 
  49,074 
  48,953 
  50,564 
  51,175 
Noncontrolling interests
  1,410 
  2,252 
  2,404 
  2,387 
  2,375 
  2,448 
  2,341 
  2,315 
  5,457 
Total equity and redeemable noncontrolling interests
 $47,633 
 $49,582 
 $48,592 
 $47,937 
 $47,243 
 $51,635 
 $51,308 
 $52,894 
 $56,647 
 
    
    
    
    
    
    
    
    
    
Reported capital
 $59,283 
 $61,979 
 $61,194 
 $60,474 
 $59,989 
 $62,768 
 $62,166 
 $63,893 
 $63,373 
 
    
    
    
    
    
    
    
    
    
Total equity and redeemable noncontrolling interests
 $47,633 
 $49,582 
 $48,592 
 $47,937 
 $47,243 
 $51,635 
 $51,308 
 $52,894 
 $56,647 
Add: Adjusted net debt less net assets held for sale
  11,552 
  12,276 
  12,469 
  12,387 
  12,576 
  10,938 
  10,647 
  10,756 
  6,464 
Less: Linde AG Goodwill (a)
  24,256 
  24,256 
  24,256 
  24,256 
  24,256 
  24,256 
  24,197 
  24,197 
  24,197 
Less: Linde AG Indefinite lived intangibles (a)
  1,868 
  1,868 
  1,868 
  1,868 
  1,868 
  1,868 
  1,868 
  1,868 
  1,868 
Adjusted capital
 $33,061 
 $35,734 
 $34,937 
 $34,200 
 $33,695 
 $36,449 
 $35,890 
 $37,585 
 $37,046 
 
(a) Represent opening balance sheet purchase accounting impacts of non-amortizing assets related to the Linde AG merger.
 
Ending capital (see above)
 $59,283 
 $61,979 
 $61,194 
 $60,474 
 $59,989 
 
 
 
 
5-quarter average ending capital
 $60,584 
 $61,281 
 $61,318 
 $61,858 
 $62,438 
 
 
 
 
 
    
    
    
    
    
 
 
 
 
Ending adjusted capital (see above)
 $33,061 
 $35,734 
 $34,937 
 $34,200 
 $33,695 
 
 
 
 
5-quarter average ending adjusted capital
 $34,325 
 $35,003 
 $35,034 
 $35,564 
 $36,133 
 
 
 
 
 
    
    
    
    
    
 
 
 
 
After-tax ROC (4 quarter reported NOPAT / 5-quarter average ending capital)
  5.1%
  4.4%
  3.9%
  3.9%
  3.9%
 
 
 
 
Adjusted after-tax ROC (4 quarter trailing adjusted NOPAT / 5-quarter average ending adjusted capital)
  14.5%
  13.4%
  12.8%
  12.3%
  12.1%
 
 
 
 
 
*     
Tax benefit on interest expense - net is generally presented using the reported effective rate.
 
 
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