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Linde reports second-quarter 2021 results

PUBLISHED ON 2021-07-31 01:23:00 EST Hemanth


Linde plc [LIN] today reported second-quarter 2021 income from continuing operations of $840 million and diluted earnings per share of $1.60, an increase of 84% versus prior year. Excluding Linde AG purchase accounting impacts and other charges, adjusted income from continuing operations was $1,415 million, up 41% versus prior year and 8% sequentially. Adjusted earnings per share was $2.70, 42% above prior year and 8% higher sequentially.

Linde’s sales for the second quarter were $7,584 million, 19% above prior year and up 5% sequentially. Compared to prior year, underlying sales increased 18%, including 3% price attainment and 15% higher volumes. Volume growth was broad-based across all geographic segments and end markets. Sequentially, underlying sales increased 5% driven by higher volume and price.

Second-quarter operating profit was $1,142 million. Adjusted operating profit of $1,837 million was up 39% versus prior year led by higher price, strong volumes and continued productivity initiatives across all segments. Adjusted operating margin of 24.2% expanded 350 basis points versus prior year and 90 basis points sequentially.

Second-quarter operating cash flow of $1,827 million increased 4% versus prior year. After capital expenditures of $744 million, free cash flow was $1,083 million, up 10% versus prior year. During the quarter, the company returned $1,748 million to shareholders through dividends and stock repurchases, net of issuance.

In addition, the company ended the second quarter with a total backlog of approximately $7.5 billion which includes both sale of gas and sale of plant projects, all contractually secured with high-quality customers.

Commenting on the financial results and business outlook, Chief Executive Officer Steve Angel said, “Linde employees delivered another quarter of record breaking financial results with operating profit margins expanding 350 basis points, ROC improving to 15.7% and EPS growing 42%, reaching an all-time high of $2.70. Our team continues to execute well against our core strategy, producing industry leading performance.”


Financial Highlights:

➢ Sales $7.6 billion, up 19% versus prior-year quarter

➢ Operating profit $1.1 billion; adjusted operating profit $1.8 billion, up 39%

➢ Operating profit margin 15.1%; adjusted operating profit margin 24.2%, up 350 basis points

➢ EPS $1.60, up 84%; adjusted EPS $2.70, up 42%

➢ Increased full-year 2021 adjusted EPS guidance to $10.10 - $10.30, representing 23% to 25% growth year-over-year

EX-99 2 lin_ex991.htm PRESS RELEASE lin_ex991.htm

EXHIBIT 99.1

 

 

Press release

 

Linde Reports Second-Quarter 2021 Results

 

Financial Highlights

 

 

Sales $7.6 billion, up 19% versus prior-year quarter

 

 

 

 

 ➢

Operating profit $1.1 billion; adjusted operating profit $1.8 billion, up 39%

 

 

 

 

Operating profit margin 15.1%; adjusted operating profit margin 24.2%, up 350 basis points

 

 

 

 

EPS $1.60, up 84%; adjusted EPS $2.70, up 42%

 

 

 

 

Increased full-year 2021 adjusted EPS guidance to $10.10 - $10.30, representing 23% to 25% growth year-over-year

 

Guildford, UK, July 30, 2021 – Linde plc (NYSE: LIN; FWB: LIN) today reported second-quarter 2021 income from continuing operations of $840 million and diluted earnings per share of $1.60, an increase of 84% versus prior year. Excluding Linde AG purchase accounting impacts and other charges, adjusted income from continuing operations was $1,415 million, up 41% versus prior year and 8% sequentially. Adjusted earnings per share was $2.70, 42% above prior year and 8% higher sequentially.

 

Linde’s sales for the second quarter were $7,584 million, 19% above prior year and up 5% sequentially. Compared to prior year, underlying sales increased 18%, including 3% price attainment and 15% higher volumes. Volume growth was broad-based across all geographic segments and end markets. Sequentially, underlying sales increased 5% driven by higher volume and price.

 

Second-quarter operating profit was $1,142 million. Adjusted operating profit of $1,837 million was up 39% versus prior year led by higher price, strong volumes and continued productivity initiatives across all segments. Adjusted operating margin of 24.2% expanded 350 basis points versus prior year and 90 basis points sequentially.

 

Second-quarter operating cash flow of $1,827 million increased 4% versus prior year. After capital expenditures of $744 million, free cash flow was $1,083 million, up 10% versus prior year. During the quarter, the company returned $1,748 million to shareholders through dividends and stock repurchases, net of issuance.

 

In addition, the company ended the second quarter with a total backlog of approximately $7.5 billion which includes both sale of gas and sale of plant projects, all contractually secured with high-quality customers.

 

Commenting on the financial results and business outlook, Chief Executive Officer Steve Angel said, “Linde employees delivered another quarter of record breaking financial results with operating profit margins expanding 350 basis points, ROC improving to 15.7% and EPS growing 42%, reaching an all-time high of $2.70. Our team continues to execute well against our core strategy, producing industry leading performance.”

 

 
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Press release

  

Angel continued, “Looking ahead, I’m confident the company will deliver another outstanding year.”

 

For third quarter 2021, Linde expects adjusted diluted earnings per share in the range of $2.60 to $2.70, up 34% to 39% versus the same quarter in 2019 and 21% to 26% versus prior-year quarter. This guidance assumes 3% currency tailwind versus prior year and 1% headwind sequentially.

 

For full year 2021, the company has updated its adjusted diluted earnings per share guidance to be in the range of $10.10 to $10.30, up 38% to 40% versus 2019 and 23% to 25% versus prior year. This guidance assumes 3% 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 contractual project backlog.

 

Second-Quarter 2021 Results by Segment

 

Americas sales of $3,020 million were 25% above prior year. Underlying sales increased 21% driven by 3% higher pricing and 18% higher volume, led by stronger demand across all end markets and project start-ups. Sequentially, price increased 1% and volumes grew 5%, led primarily by higher demand in the cyclical end markets. Operating profit of $871 million was 28.8% of sales, up 310 basis points versus prior year.

 

APAC (Asia Pacific) sales of $1,544 million were 19% above prior year. Underlying sales grew 21% driven by 2% price attainment and 19% volume growth, led by higher demand across all end markets, plus project start-ups. Sequentially, price increased 1% and volume grew 7%, led by electronics and cyclical end markets. Divestitures were driven by an accounting deconsolidation of a joint venture which reduced sales 12% versus prior year, but had no impact on earnings per share. Operating profit of $389 million was 25.2% of sales, up 250 basis points versus prior year.

 

EMEA (Europe, Middle East & Africa) sales of $1,875 million were up 29% versus prior year. Underlying sales grew 16% from 4% higher pricing and 12% higher volumes across all end markets. Sequentially, underlying sales were up 3% from 1% pricing and 2% volumes. Operating profit of $487 million was 26.0% of sales, up 510 basis points versus prior year.

 

Linde Engineering sales were $646 million, 20% below prior year largely due to the timing of plant completion and operating profit was $108 million or 16.7% of sales. Order intake for the quarter was $355 million and third-party sale of plant backlog was $4.1 billion.

 

 
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Press release

 

Earnings Call

A teleconference on Linde’s second-quarter 2021 results is being held today at 9:00 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: 2925099

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.

 

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.

 

 
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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, 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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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

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Quarter Ended June 30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported GAAP Amounts

 

$ 7,584

 

 

$ 6,377

 

 

$ 1,142

 

 

$ 591

 

 

$ 840

 

 

$ 458

 

 

$ 1.60

 

 

$ 0.87

 

Cost reduction program and other charges (a)

 

 

-

 

 

 

-

 

 

 

204

 

 

 

249

 

 

 

198

 

 

 

187

 

 

 

0.38

 

 

 

0.35

 

Purchase accounting impacts - Linde AG (b)

 

 

-

 

 

 

-

 

 

 

491

 

 

 

477

 

 

 

377

 

 

 

360

 

 

 

0.72

 

 

 

0.68

 

Total adjustments

 

 

-

 

 

 

-

 

 

 

695

 

 

 

726

 

 

 

575

 

 

 

547

 

 

 

1.10

 

 

 

1.03

 

Adjusted amounts

 

$ 7,584

 

 

$ 6,377

 

 

$ 1,837

 

 

$ 1,317

 

 

$ 1,415

 

 

$ 1,005

 

 

$ 2.70

 

 

$ 1.90

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

 

Operating Profit

 

 

Income from Continuing Operations

 

 

Diluted EPS from Continuing Operations

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Year to Date June 30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported GAAP Amounts

 

$ 14,827

 

 

$ 13,116

 

 

$ 2,355

 

 

$ 1,324

 

 

$ 1,819

 

 

$ 1,029

 

 

$ 3.46

 

 

$ 1.93

 

Cost reduction program and other charges (a)

 

 

-

 

 

 

-

 

 

 

196

 

 

 

380

 

 

 

170

 

 

 

282

 

 

 

0.32

 

 

 

0.53

 

Purchase accounting impacts - Linde AG (b)

 

 

-

 

 

 

-

 

 

 

974

 

 

 

965

 

 

 

738

 

 

 

703

 

 

 

1.41

 

 

 

1.32

 

Total adjustments

 

 

-

 

 

 

-

 

 

 

1,170

 

 

 

1,345

 

 

 

908

 

 

 

985

 

 

 

1.73

 

 

 

1.85

 

Adjusted amounts

 

$ 14,827

 

 

$ 13,116

 

 

$ 3,525

 

 

$ 2,669

 

 

$ 2,727

 

 

$ 2,014

 

 

$ 5.19

 

 

$ 3.78

 

 

(a)  

To adjust for cost reduction program and other charges; 2021 includes severance of $182 million and $208 million for the quarter and year-to-date periods, other cost reduction charges of $22 million and $40 million for the quarter and year-to-date periods and other charges of $0 million for the quarter and an other net benefit of $52 million for the year-to-date period.

(b)  

To adjust for purchase accounting impacts related to the merger.

 

 
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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,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SALES

 

$ 7,584

 

 

$ 6,377

 

 

$ 14,827

 

 

$ 13,116

 

Cost of sales

 

 

4,194

 

 

 

3,619

 

 

 

8,248

 

 

 

7,462

 

Selling, general and administrative

 

 

822

 

 

 

760

 

 

 

1,609

 

 

 

1,621

 

Depreciation and amortization

 

 

1,171

 

 

 

1,124

 

 

 

2,337

 

 

 

2,266

 

Research and development

 

 

34

 

 

 

34

 

 

 

69

 

 

 

78

 

Cost reduction programs and other charges

 

 

204

 

 

 

249

 

 

 

196

 

 

 

380

 

Other income (expense) - net

 

 

(17 )

 

 

-

 

 

 

(13 )

 

 

15

 

OPERATING PROFIT

 

 

1,142

 

 

 

591

 

 

 

2,355

 

 

 

1,324

 

Interest expense - net

 

 

18

 

 

 

18

 

 

 

38

 

 

 

42

 

Net pension and OPEB cost (benefit), excluding service cost

 

 

(49 )

 

 

(45 )

 

 

(98 )

 

 

(90 )

INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND EQUITY INVESTMENTS

 

 

1,173

 

 

 

618

 

 

 

2,415

 

 

 

1,372

 

Income taxes

 

 

334

 

 

 

164

 

 

 

602

 

 

 

329

 

INCOME FROM CONTINUING OPERATIONS BEFORE EQUITY INVESTMENTS

 

 

839

 

 

 

454

 

 

 

1,813

 

 

 

1,043

 

Income from equity investments

 

 

37

 

 

 

29

 

 

 

80

 

 

 

46

 

INCOME FROM CONTINUING OPERATIONS (INCLUDING NONCONTROLLING INTERESTS)

 

 

876

 

 

 

483

 

 

 

1,893

 

 

 

1,089

 

Add:  income from discontinued operations, net of tax

 

 

1

 

 

 

-

 

 

 

2

 

 

 

2

 

INCOME (INCLUDING NONCONTROLLING INTERESTS)

 

 

877

 

 

 

483

 

 

 

1,895

 

 

 

1,091

 

Less: noncontrolling interests from continuing operations

 

 

(36 )

 

 

(25 )

 

 

(74 )

 

 

(60 )

Less: noncontrolling interests from discontinued operations

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

NET INCOME - LINDE PLC

 

$ 841

 

 

$ 458

 

 

$ 1,821

 

 

$ 1,031

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME - LINDE PLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$ 840

 

 

$ 458

 

 

$ 1,819

 

 

$ 1,029

 

Income from discontinued operations

 

$ 1

 

 

$ -

 

 

$ 2

 

 

$ 2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PER SHARE DATA - LINDE PLC SHAREHOLDERS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share from continuing operations

 

$ 1.62

 

 

$ 0.87

 

 

$ 3.49

 

 

$ 1.95

 

Basic earnings per share from discontinued operations

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Basic earnings per share

 

$ 1.62

 

 

$ 0.87

 

 

$ 3.49

 

 

$ 1.95

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share from continuing operations

 

$ 1.60

 

 

$ 0.87

 

 

$ 3.46

 

 

$ 1.93

 

Diluted earnings per share from discontinued operations

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Diluted earnings per share

 

$ 1.60

 

 

$ 0.87

 

 

$ 3.46

 

 

$ 1.93

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends

 

$ 1.06

 

 

$ 0.963

 

 

$ 2.12

 

 

$ 1.926

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE SHARES OUTSTANDING

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic shares outstanding (000's)

 

 

518,950

 

 

 

525,510

 

 

 

520,691

 

 

 

528,385

 

Diluted shares outstanding (000's)

 

 

523,723

 

 

 

529,054

 

 

 

525,380

 

 

 

532,112

 

 

Note:  See page 10 for a reconciliation to adjusted amounts which are Non-GAAP.                                             

 

 
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LINDE PLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET

(Millions of dollars)

(UNAUDITED)

 

 

 

June 30,

 

 

December 31,

 

 

 

2021

 

 

2020

 

ASSETS

 

 

 

 

 

 

Cash and cash equivalents

 

$ 3,137

 

 

$ 3,754

 

Accounts receivable - net

 

 

4,342

 

 

 

4,167

 

Contract assets

 

 

173

 

 

 

162

 

Inventories

 

 

1,692

 

 

 

1,729

 

Prepaid and other current assets

 

 

1,102

 

 

 

1,112

 

TOTAL CURRENT ASSETS

 

 

10,446

 

 

 

10,924

 

Property, plant and equipment - net

 

 

26,917

 

 

 

28,711

 

Goodwill

 

 

27,621

 

 

 

28,201

 

Other intangibles - net

 

 

14,493

 

 

 

16,184

 

Other long-term assets

 

 

4,868

 

 

 

4,209

 

TOTAL ASSETS

 

$ 84,345

 

 

$ 88,229

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

Accounts payable

 

$ 3,143

 

 

$ 3,095

 

Short-term debt

 

 

3,681

 

 

 

3,251

 

Current portion of long-term debt

 

 

1,827

 

 

 

751

 

Contract liabilities

 

 

1,787

 

 

 

1,769

 

Other current liabilities

 

 

4,238

 

 

 

4,874

 

TOTAL CURRENT LIABILITIES

 

 

14,676

 

 

 

13,740

 

Long-term debt

 

 

9,984

 

 

 

12,152

 

Other long-term liabilities

 

 

12,457

 

 

 

12,755

 

TOTAL LIABILITIES

 

 

37,117

 

 

 

38,647

 

 

 

 

 

 

 

 

 

 

REDEEMABLE NONCONTROLLING INTERESTS

 

 

13

 

 

 

13

 

 

 

 

 

 

 

 

 

 

LINDE PLC SHAREHOLDERS' EQUITY:

 

 

 

 

 

 

 

 

Common stock

 

 

1

 

 

 

1

 

Additional paid-in capital

 

 

40,200

 

 

 

40,202

 

Retained earnings

 

 

17,820

 

 

 

17,178

 

Accumulated other comprehensive income (loss)

 

 

(4,908 )

 

 

(4,690 )

Less: Treasury stock, at cost

 

 

(7,336 )

 

 

(5,374 )

Total Linde plc shareholders' equity

 

 

45,777

 

 

 

47,317

 

Noncontrolling interests

 

 

1,438

 

 

 

2,252

 

TOTAL EQUITY

 

 

47,215

 

 

 

49,569

 

TOTAL LIABILITIES AND EQUITY

 

$ 84,345

 

 

$ 88,229

 

 

 
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LINDE PLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(Millions of dollars)

(UNAUDITED)

 

 

 

Quarter Ended

 

 

Year to Date

 

 

 

June 30,

 

 

June 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

 

Net income - Linde plc

 

$ 841

 

 

$ 458

 

 

$ 1,821

 

 

$ 1,031

 

Less: income from discontinued operations, net of tax and noncontrolling interests

 

 

(1 )

 

 

-

 

 

 

(2 )

 

 

(2 )

Add:  noncontrolling interests

 

 

36

 

 

 

25

 

 

 

74

 

 

 

60

 

Net income (including noncontrolling interests)

 

 

876

 

 

 

483

 

 

 

1,893

 

 

 

1,089

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost reduction programs and other charges, net of payments (a)

 

 

171

 

 

 

199

 

 

 

95

 

 

 

239

 

Depreciation and amortization

 

 

1,171

 

 

 

1,124

 

 

 

2,337

 

 

 

2,266

 

Accounts receivable

 

 

(210 )

 

 

(9 )

 

 

(388 )

 

 

(118 )

Contract assets and liabilities, net

 

 

(140 )

 

 

(105 )

 

 

51

 

 

 

71

 

Inventory

 

 

18

 

 

 

(20 )

 

 

(42 )

 

 

(82 )

Payables and accruals

 

 

(30 )

 

 

156

 

 

 

39

 

 

 

(27 )

Pension contributions

 

 

(16 )

 

 

(24 )

 

 

(28 )

 

 

(41 )

Deferred income taxes and other

 

 

(13 )

 

 

(40 )

 

 

(21 )

 

 

(286 )

Net cash provided by operating activities

 

 

1,827

 

 

 

1,764

 

 

 

3,936

 

 

 

3,111

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INVESTING

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(744 )

 

 

(783 )

 

 

(1,506 )

 

 

(1,586 )

Acquisitions, net of cash acquired

 

 

(21 )

 

 

-

 

 

 

(31 )

 

 

(41 )

Divestitures and asset sales

 

 

56

 

 

 

149

 

 

 

77

 

 

 

380

 

Net cash provided by (used for) investing activities

 

 

(709 )

 

 

(634 )

 

 

(1,460 )

 

 

(1,247 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FINANCING

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt increase (decrease) - net

 

 

(367 )

 

 

411

 

 

 

314

 

 

 

3,523

 

Issuances of ordinary shares

 

 

15

 

 

 

12

 

 

 

32

 

 

 

25

 

Purchases of ordinary shares

 

 

(1,214 )

 

 

-

 

 

 

(2,082 )

 

 

(1,828 )

Cash dividends - Linde plc shareholders

 

 

(549 )

 

 

(506 )

 

 

(1,102 )

 

 

(1,017 )

Noncontrolling interest transactions and other

 

 

(30 )

 

 

(121 )

 

 

(277 )

 

 

(148 )

Net cash provided by (used for) financing activities

 

 

(2,145 )

 

 

(204 )

 

 

(3,115 )

 

 

555

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

 

68

 

 

 

1

 

 

 

22

 

 

 

(178 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in cash and cash equivalents

 

 

(959 )

 

 

927

 

 

 

(617 )

 

 

2,241

 

Cash and cash equivalents, beginning-of-period

 

 

4,096

 

 

 

4,014

 

 

 

3,754

 

 

 

2,700

 

Cash and cash equivalents, end-of-period

 

$ 3,137

 

 

$ 4,941

 

 

$ 3,137

 

 

$ 4,941

 

 

(a) 

Cost reduction programs and other charges were $204 million and $249 million for the quarters ended June 30, 2021 and 2020, respectively, and $196 million and $380 million for the six months ended June 30, 2021 and 2020, respectively.  Related cash outflows were $33 million and $50 million for the quarters ended June 30, 2021 and 2020, respectively, and $101 million and $141 million for the six months ended June 30, 2021 and 2020, respectively.

 

 
Page 8/11

 

 

LINDE PLC AND SUBSIDIARIES

SEGMENT INFORMATION

(Millions of dollars)

(UNAUDITED)

 

 

 

 Quarter Ended June 30,

 

 

Year to Date June 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

SALES

 

 

 

 

 

 

 

 

 

 

 

 

Americas

 

$ 3,020

 

 

$ 2,417

 

 

$ 5,860

 

 

$ 5,094

 

EMEA

 

 

1,875

 

 

 

1,448

 

 

 

3,674

 

 

 

3,081

 

APAC

 

 

1,544

 

 

 

1,295

 

 

 

2,980

 

 

 

2,631

 

Engineering

 

 

646

 

 

 

810

 

 

 

1,320

 

 

 

1,418

 

Other

 

 

499

 

 

 

407

 

 

 

993

 

 

 

892

 

Total segment sales

 

$ 7,584

 

 

$ 6,377

 

 

$ 14,827

 

 

$ 13,116

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING PROFIT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Americas

 

$ 871

 

 

$ 622

 

 

$ 1,666

 

 

$ 1,283

 

EMEA

 

 

487

 

 

 

303

 

 

 

938

 

 

 

658

 

APAC

 

 

389

 

 

 

294

 

 

 

740

 

 

 

575

 

Engineering

 

 

108

 

 

 

138

 

 

 

217

 

 

 

229

 

Other

 

 

(18 )

 

 

(40 )

 

 

(36 )

 

 

(76 )

Segment operating profit

 

$ 1,837

 

 

$ 1,317

 

 

$ 3,525

 

 

$ 2,669

 

Cost reduction programs and other charges

 

 

(204 )

 

 

(249 )

 

 

(196 )

 

 

(380 )

Purchase accounting impacts - Linde AG

 

 

(491 )

 

 

(477 )

 

 

(974 )

 

 

(965 )

Total operating profit

 

$ 1,142

 

 

$ 591

 

 

$ 2,355

 

 

$ 1,324

 

 

 
Page 9/11

 

 

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

 

 

 

Year to Date June 30,

 

 

Q2

 

 

Q1

 

 

Year to Date June 30,

 

 

Q4

 

 

Q3

 

 

Q2

 

 

Q1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Operating Profit and Operating Margin

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported operating profit

 

$ 2,355

 

 

$ 1,142

 

 

$ 1,213

 

 

$ 1,324

 

 

$ 1,029

 

 

$ 969

 

 

$ 591

 

 

$ 733

 

Add: Cost reduction programs and other charges

 

 

196

 

 

 

204

 

 

 

(8 )

 

 

380

 

 

 

78

 

 

 

48

 

 

 

249

 

 

 

131

 

Add: Purchase accounting impacts - Linde AG (c)

 

 

974

 

 

 

491

 

 

 

483

 

 

 

965

 

 

 

506

 

 

 

498

 

 

 

477

 

 

 

488

 

Total adjustments

 

 

1,170

 

 

 

695

 

 

 

475

 

 

 

1,345

 

 

 

584

 

 

 

546

 

 

 

726

 

 

 

619

 

Adjusted operating profit

 

$ 3,525

 

 

$ 1,837

 

 

$ 1,688

 

 

$ 2,669

 

 

$ 1,613

 

 

$ 1,515

 

 

$ 1,317

 

 

$ 1,352

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported percentage change

 

 

78 %

 

 

93 %

 

 

65 %

 

 

4 %

 

 

 

 

 

 

 

 

 

 

(12 )%

 

 

20 %

Adjusted percentage change

 

 

32 %

 

 

39 %

 

 

25 %

 

 

5 %

 

 

 

 

 

 

 

 

 

- %

 

 

 

11 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported sales

 

$ 14,827

 

 

$ 7,584

 

 

$ 7,243

 

 

$ 13,116

 

 

$ 7,272

 

 

$ 6,855

 

 

$ 6,377

 

 

$ 6,739

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported operating margin

 

 

15.9 %

 

 

15.1 %

 

 

16.7 %

 

 

10.1 %

 

 

14.2 %

 

 

14.1 %

 

 

9.3 %

 

 

10.9 %

Adjusted operating margin

 

 

23.8 %

 

 

24.2 %

 

 

23.3 %

 

 

20.3 %

 

 

22.2 %

 

 

22.1 %

 

 

20.7 %

 

 

20.1 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported depreciation and amortization

 

$ 2,337

 

 

$ 1,171

 

 

$ 1,166

 

 

$ 2,266

 

 

$ 1,192

 

 

$ 1,168

 

 

$ 1,124

 

 

$ 1,142

 

Less: Purchase accounting impacts - Linde AG (c)

 

 

(957 )

 

 

(479 )

 

 

(478 )

 

 

(944 )

 

 

(489 )

 

 

(487 )

 

 

(468 )

 

 

(476 )

Adjusted depreciation and amortization

 

$ 1,380

 

 

$ 692

 

 

$ 688

 

 

$ 1,322

 

 

$ 703

 

 

$ 681

 

 

$ 656

 

 

$ 666

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Other Income (Expense) - net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported Other Income (Expense) - net

 

$ (13 )

 

$ (17 )

 

$ 4

 

 

$ 15

 

 

$ (47 )

 

$ (29 )

 

$ -

 

 

$ 15

 

Add: Purchase accounting impacts - Linde AG (c)

 

 

(17 )

 

 

(12 )

 

 

(5 )

 

 

(21 )

 

 

(17 )

 

 

(11 )

 

 

(9 )

 

 

(12 )

Adjusted Other Income (Expense) - net

 

$ 4

 

 

$ (5 )

 

$ 9

 

 

$ 36

 

 

$ (30 )

 

$ (18 )

 

$ 9

 

 

$ 27

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Net Pension and OPEB Cost (Benefit), Excluding Service Cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported net pension and OPEB cost (benefit), excluding service cost

 

$ (98 )

 

$ (49 )

 

$ (49 )

 

$ (90 )

 

$ (46 )

 

$ (41 )

 

$ (45 )

 

$ (45 )

Add: Pension settlement charges

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(6 )

 

 

-

 

 

 

-

 

Adjusted Net Pension and OPEB cost (benefit), excluding service costs

 

$ (98 )

 

$ (49 )

 

$ (49 )

 

$ (90 )

 

$ (46 )

 

$ (47 )

 

$ (45 )

 

$ (45 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Interest Expense - Net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported interest expense - net

 

$ 38

 

 

$ 18

 

 

$ 20

 

 

$ 42

 

 

$ 35

 

 

$ 38

 

 

$ 18

 

 

$ 24

 

Add: Purchase accounting impacts - Linde AG (c)

 

 

33

 

 

 

15

 

 

 

18

 

 

 

44

 

 

 

18

 

 

 

23

 

 

 

22

 

 

 

22

 

Less: Bond Redemption

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(16 )

 

 

-

 

 

 

-

 

 

 

-

 

Total adjustments

 

 

33

 

 

 

15

 

 

 

18

 

 

 

44

 

 

 

2

 

 

 

23

 

 

 

22

 

 

 

22

 

Adjusted interest expense - net

 

$ 71

 

 

$ 33

 

 

$ 38

 

 

$ 86

 

 

$ 37

 

 

$ 61

 

 

$ 40

 

 

$ 46

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Income Taxes (a)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported income taxes

 

$ 602

 

 

$ 334

 

 

$ 268

 

 

$ 329

 

 

$ 253

 

 

$ 265

 

 

$ 164

 

 

$ 165

 

Add: Purchase accounting impacts - Linde AG (c)

 

 

234

 

 

 

116

 

 

 

118

 

 

 

217

 

 

 

107

 

 

 

75

 

 

 

95

 

 

 

122

 

Add: Pension settlement charges

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1

 

 

 

-

 

 

 

-

 

Add: Cost reduction programs and other charges

 

 

26

 

 

 

6

 

 

 

20

 

 

 

98

 

 

 

20

 

 

 

12

 

 

 

62

 

 

 

36

 

Less: Bond Redemption

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

4

 

 

 

-

 

 

 

-

 

 

 

-

 

Total adjustments

 

 

260

 

 

 

122

 

 

 

138

 

 

 

315

 

 

 

131

 

 

 

88

 

 

 

157

 

 

 

158

 

Adjusted income taxes

 

$ 862

 

 

$ 456

 

 

$ 406

 

 

$ 644

 

 

$ 384

 

 

$ 353

 

 

$ 321

 

 

$ 323

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Effective Tax Rate (a)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported income before income taxes and equity investments

 

$ 2,415

 

 

$ 1,173

 

 

$ 1,242

 

 

$ 1,372

 

 

$ 1,040

 

 

$ 972

 

 

$ 618

 

 

$ 754

 

Add: Pension settlement charge

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

6

 

 

 

-

 

 

 

-

 

Add: Purchase accounting impacts - Linde AG (c)

 

 

941

 

 

 

476

 

 

 

465

 

 

 

921

 

 

 

488

 

 

 

475

 

 

 

455

 

 

 

466

 

Add: Cost reduction programs and other charges

 

 

196

 

 

 

204

 

 

 

(8 )

 

 

380

 

 

 

78

 

 

 

48

 

 

 

249

 

 

 

131

 

Less: Bond Redemption

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

16

 

 

 

-

 

 

 

-

 

 

 

-

 

Total adjustments

 

 

1,137

 

 

 

680

 

 

 

457

 

 

 

1,301

 

 

 

582

 

 

 

529

 

 

 

704

 

 

 

597

 

Adjusted income before income taxes and equity investments

 

$ 3,552

 

 

$ 1,853

 

 

$ 1,699

 

 

$ 2,673

 

 

$ 1,622

 

 

$ 1,501

 

 

$ 1,322

 

 

$ 1,351

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported Income taxes

 

$ 602

 

 

$ 334

 

 

$ 268

 

 

$ 329

 

 

$ 253

 

 

$ 265

 

 

$ 164

 

 

$ 165

 

Reported effective tax rate

 

 

24.9 %

 

 

28.5 %

 

 

21.6 %

 

 

24.0 %

 

 

24.3 %

 

 

27.3 %

 

 

26.5 %

 

 

21.9 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted income taxes

 

$ 862

 

 

$ 456

 

 

$ 406

 

 

$ 644

 

 

$ 384

 

 

$ 353

 

 

$ 321

 

 

$ 323

 

Adjusted effective tax rate

 

 

24.3 %

 

 

24.6 %

 

 

23.9 %

 

 

24.1 %

 

 

23.7 %

 

 

23.5 %

 

 

24.3 %

 

 

23.9 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from Equity Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported income from equity investments

 

$ 80

 

 

$ 37

 

 

$ 43

 

 

$ 46

 

 

$ 16

 

 

$ 23

 

 

$ 29

 

 

$ 17

 

Add: Purchase accounting impacts - Linde AG (c)

 

 

38

 

 

 

19

 

 

 

19

 

 

 

28

 

 

 

15

 

 

 

14

 

 

 

14

 

 

 

14

 

Adjusted income from equity investments

 

$ 118

 

 

$ 56

 

 

$ 62

 

 

$ 74

 

 

$ 31

 

 

$ 37

 

 

$ 43

 

 

$ 31

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Noncontrolling Interests from Continuing Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported noncontrolling interests from continuing operations

 

$ (74 )

 

$ (36 )

 

$ (38 )

 

$ (60 )

 

$ (34 )

 

$ (31 )

 

$ (25 )

 

$ (35 )

Add: Cost reduction programs and other charges

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(4 )

 

 

-

 

 

 

-

 

 

 

-

 

Add: Purchase accounting impacts - Linde AG (c)

 

 

(7 )

 

 

(2 )

 

 

(5 )

 

 

(29 )

 

 

(14 )

 

 

(14 )

 

 

(14 )

 

 

(15 )

Total adjustments

 

 

(7 )

 

 

(2 )

 

 

(5 )

 

 

(29 )

 

 

(18 )

 

 

(14 )

 

 

(14 )

 

 

(15 )

Adjusted noncontrolling interests from continuing operations

 

$ (81 )

 

$ (38 )

 

$ (43 )

 

$ (89 )

 

$ (52 )

 

$ (45 )

 

$ (39 )

 

$ (50 )

 

Page 10 of 10 (cont'd)

 

 

 

 

LINDE PLC AND SUBSIDIARIES

APPENDIX

NON-GAAP MEASURES AND RECONCILIATIONS

(Millions of dollars, except per share data)

(UNAUDITED)

 

 

 

 2021

 

 

 2020

 

 

 

Year to Date June 30,

 

 

Q2

 

 

Q1

 

 

Year to Date June 30,

 

 

Q4

 

 

Q3

 

 

Q2

 

 

Q1

 

Adjusted Income from Continuing Operations (b)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported income from continuing operations

 

$ 1,819

 

 

$ 840

 

 

$ 979

 

 

$ 1,029

 

 

$ 769

 

 

$ 699

 

 

$ 458

 

 

$ 571

 

Add: Pension settlement charge

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

5

 

 

 

-

 

 

 

-

 

Add: Cost reduction programs and other charges

 

 

170

 

 

 

198

 

 

 

(28 )

 

 

282

 

 

 

54

 

 

 

36

 

 

 

187

 

 

 

95

 

Less: Bond redemption

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

12

 

 

 

-

 

 

 

-

 

 

 

-

 

Add: Purchase accounting impacts - Linde AG (c)

 

 

738

 

 

 

377

 

 

 

361

 

 

 

703

 

 

 

382

 

 

 

400

 

 

 

360

 

 

 

343

 

Total adjustments

 

 

908

 

 

 

575

 

 

 

333

 

 

 

985

 

 

 

448

 

 

 

441

 

 

 

547

 

 

 

438

 

Adjusted income from continuing operations

 

$ 2,727

 

 

$ 1,415

 

 

$ 1,312

 

 

$ 2,014

 

 

$ 1,217

 

 

$ 1,140

 

 

$ 1,005

 

 

$ 1,009

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Diluted EPS from Continuing Operations (b)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported diluted EPS from continuing operations

 

$ 3.46

 

 

$ 1.60

 

 

$ 1.86

 

 

$ 1.93

 

 

$ 1.45

 

 

$ 1.32

 

 

$ 0.87

 

 

$ 1.07

 

Add: Pension settlement charge

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

0.01

 

 

 

-

 

 

 

-

 

Add:  Cost reduction programs and other charges

 

 

0.32

 

 

 

0.38

 

 

 

(0.05 )

 

 

0.53

 

 

 

0.10

 

 

 

0.07

 

 

 

0.35

 

 

 

0.18

 

Less: Bond Redemption

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

0.02

 

 

 

-

 

 

 

-

 

 

 

-

 

Add:  Purchase accounting impacts - Linde AG

 

 

1.41

 

 

 

0.72

 

 

 

0.68

 

 

 

1.32

 

 

 

0.73

 

 

 

0.75

 

 

 

0.68

 

 

 

0.64

 

Total adjustments

 

 

1.73

 

 

 

1.10

 

 

 

0.63

 

 

 

1.85

 

 

 

0.85

 

 

 

0.83

 

 

 

1.03

 

 

 

0.82

 

Adjusted diluted EPS from continuing operations

 

$ 5.19

 

 

$ 2.70

 

 

$ 2.49

 

 

$ 3.78

 

 

$ 2.30

 

 

$ 2.15

 

 

$ 1.90

 

 

$ 1.89

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported percentage change

 

 

79 %

 

 

84 %

 

 

74 %

 

 

12 %

 

 

54 %

 

 

(1 )%

 

 

(7 )%

 

 

35 %

Adjusted percentage change

 

 

37 %

 

 

42 %

 

 

32 %

 

 

7 %

 

 

22 %

 

 

11 %

 

 

4 %

 

 

12 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Diluted EPS from Continuing Operations Guidance (d)

 

 

 

 

 

 

Third Quarter 2021

 

 

Full Year 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Low End

 

 

High End

 

 

Low End

 

 

High End

 

 

 

 

 

 

 

 

 

 

 

 

 

2021 Adjusted Guidance

 

 

 

 

 

$ 2.60

 

 

$ 2.70

 

 

$ 10.10

 

 

$ 10.30

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted percentage changes versus 2020 adjusted diluted EPS

 

 

 

 

 

 

21 %

 

 

26 %

 

 

23 %

 

 

25 %

 

 

 

 

 

 

 

 

 

 

 

 

Add: Estimated currency headwind/(tailwind)

 

 

 

 

 

 

(3 )%

 

 

(3 )%

 

 

(3 )%

 

 

(3 )%

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted percentage change excluding currency

 

 

 

 

 

 

18 %

 

 

23 %

 

 

20 %

 

 

22 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA and % of Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$ 1,819

 

 

$ 840

 

 

$ 979

 

 

$ 1,029

 

 

$ 769

 

 

$ 699

 

 

$ 458

 

 

$ 571

 

Add: Noncontrolling interests related to continuing operations

 

 

74

 

 

 

36

 

 

 

38

 

 

 

60

 

 

 

34

 

 

 

31

 

 

 

25

 

 

 

35

 

Add: Net pension and OPEB cost (benefit), excluding service cost

 

 

(98 )

 

 

(49 )

 

 

(49 )

 

 

(90 )

 

 

(46 )

 

 

(41 )

 

 

(45 )

 

 

(45 )

Add: Interest expense

 

 

38

 

 

 

18

 

 

 

20

 

 

 

42

 

 

 

35

 

 

 

38

 

 

 

18

 

 

 

24

 

Add: Income taxes

 

 

602

 

 

 

334

 

 

 

268

 

 

 

329

 

 

 

253

 

 

 

265

 

 

 

164

 

 

 

165

 

Add: Depreciation and amortization

 

 

2,337

 

 

 

1,171

 

 

 

1,166

 

 

 

2,266

 

 

 

1,192

 

 

 

1,168

 

 

 

1,124

 

 

 

1,142

 

EBITDA from continuing operations

 

 

4,772

 

 

 

2,350

 

 

 

2,422

 

 

 

3,636

 

 

 

2,237

 

 

 

2,160

 

 

 

1,744

 

 

 

1,892

 

Add: Cost reduction programs and other charges

 

 

196

 

 

 

204

 

 

 

(8 )

 

 

380

 

 

 

78

 

 

 

48

 

 

 

249

 

 

 

131

 

Add: Purchase accounting impacts - Linde AG

 

 

55

 

 

 

31

 

 

 

24

 

 

 

49

 

 

 

32

 

 

 

25

 

 

 

23

 

 

 

26

 

Total adjustments

 

 

251

 

 

 

235

 

 

 

16

 

 

 

429

 

 

 

110

 

 

 

73

 

 

 

272

 

 

 

157

 

Adjusted EBITDA from continuing operations

 

$ 5,023

 

 

$ 2,585

 

 

$ 2,438

 

 

$ 4,065

 

 

$ 2,347

 

 

$ 2,233

 

 

$ 2,016

 

 

$ 2,049

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported sales

 

$ 14,827

 

 

$ 7,584

 

 

$ 7,243

 

 

$ 13,116

 

 

$ 7,272

 

 

$ 6,855

 

 

$ 6,377

 

 

$ 6,739

 

% of sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA from continuing operations

 

 

32.2 %

 

 

31.0 %

 

 

33.4 %

 

 

27.7 %

 

 

30.8 %

 

 

31.5 %

 

 

27.3 %

 

 

28.1 %

Adjusted EBITDA from continuing operations

 

 

33.9 %

 

 

34.1 %

 

 

33.7 %

 

 

31.0 %

 

 

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 purchase 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.

 

 
Page 10/11

 

 

LINDE PLC AND SUBSIDIARIES

APPENDIX

NON-GAAP MEASURES AND RECONCILIATIONS

(Millions of dollars)

(UNAUDITED)

 

 

 

2021

 

 

2020

 

 

2019

 

 

 

Q2

 

 

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

 

$ 1,827

 

 

$ 2,109

 

 

$ 2,434

 

 

$ 1,884

 

 

$ 1,764

 

 

$ 1,347

 

 

$ 2,174

 

 

$ 1,872

 

 

$ 1,005

 

 

$ 1,068

 

Less: Capital Expenditures

 

 

(744 )

 

 

(762 )

 

 

(1,027 )

 

 

(787 )

 

 

(783 )

 

 

(803 )

 

 

(1,015 )

 

 

(959 )

 

 

(865 )

 

 

(843 )

Free Cash Flow

 

$ 1,083

 

 

$ 1,347

 

 

$ 1,407

 

 

$ 1,097

 

 

$ 981

 

 

$ 544

 

 

$ 1,159

 

 

$ 913

 

 

$ 140

 

 

$ 225