Linde Reports First-Quarter 2019 Results
Financial Highlights
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Sales $6.9 billion, EPS $0.79, adjusted pro forma EPS $1.69
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Operating profit $0.6 billion, adjusted pro forma operating profit $1.2 billion
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Started up Samsung Tangjeong
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Returned $1.2 billion to shareholders through dividends and share repurchases
GUILDFORD, UK / ACCESSWIRE / May 10, 2019 / Linde plc (NYSE: LIN; FWB: LIN) today reported first-quarter income from continuing operations of $435 million and diluted earnings per share of $0.79. Adjusted pro forma earnings per share increased 12% to $1.69, compared with adjusted pro forma earnings per share in the prior-year quarter of $1.51. Adjusted earnings per share exclude merger related costs, other charges and the Linde AG purchase accounting impacts - primarily amortization and depreciation. Excluding these costs, adjusted pro forma income from continuing operations was $927 million, up 11% versus prior year adjusted pro forma.
Sales for the first quarter were $6,944 million. Pro forma sales were $6,914 million, in line with the prior-year quarter. Excluding unfavorable currency translation effects, sales were up 5%, driven by 2% higher pricing and 3% volume growth.
First quarter reported operating profit was $609 million, 7% below the prior-year quarter, primarily due to the impact of purchase accounting. On an adjusted pro forma basis, operating profit was $1,222 million, 7% above last year excluding currency impact. The reported operating profit margin was 8.8% and the adjusted pro forma operating profit margin was 17.7%, up 30 basis points versus the prior-year quarter on a pro forma basis. For the first quarter, EBITDA margin was 26.9% and adjusted pro forma EBITDA margin was 28.5%.
During the first quarter, the company paid $477 million of dividends and repurchased $697 million of stock, net of issuance.
Commenting on the financial results, Chief Executive Officer Steve Angel said, "This quarter marked the first time we could operate as one company since satisfying the regulatory requirements on March 1st. I'm pleased to see the combined organization off to a good start despite only one month of being fully integrated. Looking ahead, I expect to build from this momentum and continue to improve the business quality irrespective of the economic environment."
The company has adopted new segments which are in line with the management structure of the merged company. Prior periods have been recast to conform to the new segments. Following is additional detail on first-quarter 2019 pro forma results for each segment.
In the Americas, first-quarter sales were $2,702 million, 8% above the prior-year quarter excluding 3% negative currency. Volumes and price increased 3% and 2%, respectively. Higher cost pass-through increased sales by 1% and acquisitions in North America increased sales by 2%. Operating profit was $584 million.
Sales in APAC (Asia Pacific) were $1,427 million in the quarter, up 5% from the prior year excluding 6% negative currency. Pricing was 2% higher and volumes increased 5% from project start-ups and base business. Operating profit was $273 million.
EMEA (Europe, Middle East & Africa) sales for the first quarter were $1,682 million, 1% above the prior-year quarter excluding 8% unfavorable currency. Pricing was up 1%. First-quarter operating profit was $347 million.
Linde Engineering sales were $636 million and operating profit was $78 million, reflecting a 12.3% operating margin.
Linde is a leading industrial gases and engineering company with 2018 pro forma sales of USD 28 billion (EUR 24 billion). The company employs approximately 80,000 people globally and serves customers in more than 100 countries worldwide. Linde delivers innovative and sustainable solutions to its customers and creates long-term value for all stakeholders. The company is making our world more productive by providing products, technologies and services that help customers improve their economic and environmental performance in a connected world.
For more information about the company, please visit www.linde.com
Pro forma sales and adjusted operating profit and earnings per share are non-GAAP measures prepared on a basis consistent with Article 11 and includes certain non-GAAP adjustments. See pages 9 to 14 for reconciliations.
See the attachments (Earnings Release tables: http://n.eqs.com/c/fncls.ssp?u=ECTBBFMLGE) for a summary of pro forma, adjusted pro forma and non-GAAP reconciliations and calculations. Adjusted amounts, EBITDA, free cash flow and net debt are non-GAAP measures and reconciliations.
Attachments: Summary pro forma and adjusted pro forma reconciliations, Statements of Income, Balance Sheets, Statements of Cash Flows, Segment Information and Appendix: 2019 and 2018 pro forma income statement information and non-GAAP Measures.
A teleconference about Linde's first-quarter results is being held this morning, May 10, 2019 at 9:00 am Eastern Time. The US Toll-Free Dial-In Number is 1 855 758 5442 and the access code is 8849393. The call is also available as a webcast live and on-demand at www.linde.com/investors. Materials to be used in the teleconference are also available on the website.
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 ability to successfully integrate the Praxair and Linde AG businesses; regulatory or other limitations and requirements imposed as a result of the business combination of Praxair and Linde AG that could reduce anticipated benefits of the transaction; the risk that Linde plc may be unable to achieve expected synergies or that it may take longer or be more costly than expected to achieve those synergies; 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 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, including the impact of the U.S. Tax Cuts and Jobs Act of 2017; 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 GAAP, IFRS 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, 2018 filed with the SEC on March 18, 2019 which should be reviewed carefully. Please consider Linde plc's forward-looking statements in light of those risks.
Additional features:
Document: http://n.eqs.com/c/fncls.ssp?u=ECTBBFMLGE
Document title: Earnings Release Tables
10.05.2019 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases.
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SOURCE: Linde plc
LINDE PLC AND SUBSIDIARIES
SUMMARY PRO FORMA AND ADJUSTED PRO FORMA RECONCILIATIONS (UNAUDITED)
On October 31, 2018, Praxair, Inc. and Linde AG, combined under Linde plc, as contemplated by the business combination agreement, dated June 1, 2017, as amended on August 10, 2017. Praxair, Inc. was the accounting acquirer and as a result historical periods prior to the merger date solely reflect the results of Praxair, Inc.
The followingadjusted pro forma 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 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. See the "PRO FORMA INCOME STATEMENT INFORMATION" and "NON GAAP MEASURES AND RECONCILIATIONS" starting on page 9 for additional details relating to the adjustments.
(Millions of dollars, except per share amounts)
| | | | Income from Continuing Operations | Diluted EPS from Continuing Operations |
| | | | | | | | | |
| Quarter Ended March 31 | | | | | | | | |
| Reported GAAP Amounts | $6,944 | $2,983 | $609 | $653 | $435 | $462 | $0.79 | $1.59 |
| Pro forma adjustments | (30) | 3,958 | 59 | 46 | 96 | 47 | 0.18 | (0.67) |
| Non-GAAP adjustments | — | — | 554 | 507 | 396 | 328 | 0.72 | 0.59 |
| Adjusted pro forma amounts | $6,914 | $6,941 | $1,222 | $1,206 | $927 | $837 | $1.69 | $1.51 |
LINDE PLC AND SUBSIDIARIES |
CONSOLIDATED STATEMENT OF INCOME |
(Millions of dollars, except per share data) |
|
| | | |
| | |
| | |
| | | |
| | | |
| SALES | $6,944 | $2,983 |
| Cost of sales | 4,116 | 1,661 |
| Selling, general and administrative | 879 | 310 |
| Depreciation and amortization | 1,223 | 311 |
| Research and development | 46 | 24 |
| Transaction costs and other charges | 89 | 19 |
| Other income (expense) - net | 18 | (5) |
| OPERATING PROFIT | 609 | 653 |
| Interest expense - net | 23 | 46 |
| Net pension and OPEB cost (benefit), excluding service cost | 15 | 2 |
| INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND EQUITY INVESTMENTS | 571 | 605 |
| Income taxes | 140 | 148 |
| INCOME FROM CONTINUING OPERATIONS BEFORE EQUITY INVESTMENTS | 431 | 457 |
| Income from equity investments | 34 | 15 |
| INCOME FROM CONTINUING OPERATIONS (INCLUDING NONCONTROLLING INTERESTS) | 465 | 472 |
| Add: income from discontinued operations, net of tax | 89 | — |
| INCOME (INCLUDING NONCONTROLLING INTERESTS) | 554 | 472 |
| Less: noncontrolling interests from continuing operations | (30) | (10) |
| Less: noncontrolling interests from discontinued operations | (7) | — |
| NET INCOME - LINDE PLC | $517 | $462 |
| | | |
| NET INCOME - LINDE PLC | | |
| Income from continuing operations | $435 | $462 |
| Income from discontinued operations | $82 | $— |
| | | |
| PER SHARE DATA - LINDE PLC SHAREHOLDERS | | |
| | | |
| Basic earnings per share from continuing operations | $0.80 | $1.61 |
| Basic earnings per share from discontinued operations | 0.15 | — |
| Basic earnings per share | $0.95 | $1.61 |
| | | |
| Diluted earnings per share from continuing operations | 0.79 | 1.59 |
| Diluted earnings per share from discontinued operations | 0.15 | — |
| Diluted earnings per share | $0.94 | $1.59 |
| | | |
| Cash dividends | $0.875 | $0.825 |
| | | |
| WEIGHTED AVERAGE SHARES OUTSTANDING | | |
| Basic shares outstanding (000's) | 545,554 | 287,504 |
| Diluted shares outstanding (000's) | 549,147 | 290,809 |
| | | |
Note: See pages 9-14 for a reconciliation to adjusted amounts which are Non-GAAP. |
LINDE PLC AND SUBSIDIARIES |
CONDENSED CONSOLIDATED BALANCE SHEET |
|
|
| | | |
| | | |
| | | |
| ASSETS | | |
| Cash and cash equivalents | $5,791 | $4,466 |
| Accounts receivable - net | 4,390 | 4,297 |
| Contract assets | 305 | 283 |
| Inventories | 1,667 | 1,651 |
| Assets classified as held for sale | 1,732 | 5,498 |
| Prepaid and other current assets | 1,203 | 1,077 |
| TOTAL CURRENT ASSETS | 15,088 | 17,272 |
| Property, plant and equipment - net | 29,418 | 29,717 |
| Goodwill | 26,820 | 26,874 |
| Other intangibles - net | 15,944 | 16,223 |
| Other long-term assets | 4,371 | 3,300 |
| TOTAL ASSETS | $91,641 | $93,386 |
| | | |
| LIABILITIES AND EQUITY | | |
| Accounts payable | $3,166 | $3,219 |
| Short-term debt | 939 | 1,485 |
| Current portion of long-term debt | 1,017 | 1,523 |
| Contract liabilities | 1,719 | 1,546 |
| Liabilities of assets classified as held for sale | 103 | 768 |
| Other current liabilities | 4,196 | 4,415 |
| TOTAL CURRENT LIABILITIES | 11,140 | 12,956 |
| Long-term debt | 12,190 | 12,288 |
| Other long-term liabilities | 11,664 | 11,046 |
| TOTAL LIABILITIES | 34,994 | 36,290 |
| | | |
| REDEEMABLE NONCONTROLLING INTERESTS | 15 | 16 |
| | | |
| LINDE PLC SHAREHOLDERS' EQUITY: | | |
| Common stock | 1 | 1 |
| Additional paid-in capital | 40,173 | 40,151 |
| Retained earnings | 16,569 | 16,529 |
| Accumulated other comprehensive income (loss) | (4,235) | (4,456) |
| Less: Treasury stock, at cost | (1,333) | (629) |
| Total Linde plc Shareholders' Equity | 51,175 | 51,596 |
| Noncontrolling interests | 5,457 | 5,484 |
| TOTAL EQUITY | 56,632 | 57,080 |
| TOTAL LIABILITIES AND EQUITY | $91,641 | $93,386 |
LINDE PLC AND SUBSIDIARIES |
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS |
|
|
| | | |
| | |
| | |
| | | |
| OPERATIONS | | |
| Net income - Linde plc | $517 | $462 |
| Less: income from discontinued operations, net of tax and noncontrolling interests | (82) | — |
| Add: noncontrolling interests | 30 | 10 |
| Net income (including noncontrolling interests) | 465 | 472 |
| | | |
| Adjustments to reconcile net income to net cash provided by operating activities: | | |
| Transaction costs and other charges, net of payments (a) | (167) | 14 |
| Depreciation and amortization | 1,223 | 311 |
| Accounts receivable | (56) | (82) |
| Contract assets and liabilities, net | (84) | — |
| Inventory | (32) | (2) |
| Payables and accruals | (31) | (67) |
| Pension contributions | (18) | (4) |
| Deferred income taxes and other | (232) | 46 |
| Net cash provided by operating activities | 1,068 | 688 |
| | | |
| INVESTING | | |
| Capital expenditures | (843) | (325) |
| Acquisitions, net of cash acquired | (152) | — |
| Divestitures and asset sales | 3,455 | 7 |
| Net cash used for investing activities | 2,460 | (318) |
| | | |
| FINANCING | | |
| Debt increase (decrease) - net | (1,027) | (215) |
| Issuances of ordinary shares | 28 | 29 |
| Purchases of ordinary shares | (725) | — |
| Cash dividends - Linde plc shareholders | (477) | (237) |
| Noncontrolling interest transactions and other | (10) | (6) |
| Net cash provided by (used for) financing activities | (2,211) | (429) |
| | | |
| DISCONTINUED OPERATIONS | | |
| Cash provided by operating activities | 63 | — |
| Cash provided by investing activities | (58) | — |
| Cash provided by financing activities | 5 | — |
| Net cash provided by (used for) discontinued operations | 10 | — |
| | | |
| Effect of exchange rate changes on cash and cash equivalents | 8 | (13) |
| | | |
| Change in cash and cash equivalents | 1,335 | (72) |
| Cash and cash equivalents, beginning-of-period | 4,466 | 617 |
| Cash and cash equivalents, including discontinued operations | 5,801 | 545 |
| Cash and cash equivalents of discontinued operations | (10) | — |
| Cash and cash equivalents, end-of-period | $5,791 | $545 |
| | | |
| (a) Merger-related cash outflows for the 2019 quarter were $256 million, reflected in the condensed consolidated statement of cash flows as follows: $89 million included within "Net income - Linde plc", and $167 million included within "Adjustments to reconcile net income to net cash provided by operating activities". |
LINDE PLC AND SUBSIDIARIES |
|
|
|
| | | | | |
| | | |
| | | |
| | | | | |
| SALES | | | | |
| Americas | $2,706 | $1,850 | $2,702 | $2,568 |
| EMEA | 1,682 | 415 | 1,682 | 1,814 |
| APAC | 1,452 | 435 | 1,427 | 1,447 |
| Engineering | 636 | — | 636 | 663 |
| Other | 468 | 283 | 467 | 449 |
| Segment sales | $6,944 | $2,983 | $6,914 | $6,941 |
| | | | | |
| OPERATING PROFIT | | | | |
| Americas | $585 | $483 | $584 | $572 |
| EMEA | 347 | 87 | 347 | 387 |
| APAC | 278 | 106 | 273 | 256 |
| Engineering | 78 | — | 78 | 61 |
| Other | (59) | (4) | (60) | (70) |
| Segment operating profit | $1,229 | $672 | $1,222 | $1,206 |
| Transaction costs and other charges | (89) | (19) | | |
| Purchase accounting impacts - Linde AG | (531) | — | | |
| Total operating profit | $609 | $653 | | |
| (a) As a result of the merger and effective with the lifting of the hold separate order, effective March 1, 2019, new reportable segments were created. All prior periods presented were recast to conform to the new segment structure. |
| | | | | | | | |
| (b) See pro forma income statement information on pages 9-10. |
| LINDE PLC AND SUBSIDIARIES |
| APPENDIX |
| 2019 PRO FORMA INCOME STATEMENT INFORMATION |
| (Millions of dollars, except per share data) |
| (UNAUDITED) |
| |
| To assist with a discussion of the 2019 and 2018 results on a comparable basis, certain supplemental unaudited pro forma income statement information is provided on both a consolidated and segment basis. The pro forma information has been prepared on a basis consistent with Article 11 of Regulation S-X, assuming the Merger and merger-related divestitures had been consummated on January 1, 2017. In preparing this pro forma information, the historical financial information has been adjusted to give effect to pro forma Adjustments that are (i) directly attributable to the Business Combination and other transactions presented herein, such as the merger-related divestitures, (ii) factually supportable, and (iii) expected to have a continuing impact on the combined entity’s consolidated results. The pro forma information is based on management's assumptions and is presented for illustrative purposes and does not purport to represent what the results of operations would actually have been if the Business Combination and merger-related divestitures had occurred as of the dates indicated or what the results would be for any future periods. Also, the pro forma information does not include the impact of any revenue, cost or other operating synergies that may result from the Business Combination or any related restructuring costs. The unaudited pro forma income statement has been presented for informational purposes only and is not necessarily indicative of what Linde plc's results of operations actually would have been had the Merger been completed on January 1, 2017. In addition, the unaudited pro forma income statement does not purport to project the future operating results of the company. |
| | Pro forma Income Statement Information |
| | | | |
| | | | | | | |
| Sales | $6,944 | (30) | | | (30) | $6,914 |
| Cost of sales, exclusive of depreciation | 4,116 | (22) | (10) | (b) | (32) | 4,084 |
| Gross margin | 2,828 | (8) | 10 | | 2 | 2,830 |
| As a % of Sales | 40.7% | | | | — | 40.9% |
| Selling, general and administrative | 879 | (1) | | | (1) | 878 |
| As a % of Sales | 12.7% | | | | —% | 12.7% |
| Depreciation and amortization | 1,223 | | | | — | 1,223 |
| Research and development | 46 | | | | — | 46 |
| Transaction costs and other charges | 89 | | (56) | (c) | (56) | 33 |
| Other income (expense) - net | 18 | | | | — | 18 |
| Operating profit | 609 | (7) | 66 | | 59 | 668 |
| Operating margin | 8.8% | | | | | 9.7% |
| | | | | | | |
| Net pension and OPEB cost (benefit), excluding service costs | 15 | | (51) | (d) | (51) | (36) |
| Interest expense - net | 23 | | | | — | 23 |
| Income taxes | 140 | (2) | 16 | (e) | 14 | 154 |
| Effective Tax Rate | 24.5% | | | | | 22.7% |
| Income from equity investments | 34 | | | | — | 34 |
| Noncontrolling interests from continuing operations | (30) | | | | — | (30) |
| Income from continuing operations | 435 | (5) | 101 | | 96 | 531 |
| Diluted shares outstanding | 549,147 | | | | 549,147 | 549,147 |
| Diluted EPS from continuing operations | $0.79 | | | | $0.18 | $0.97 |
| | | | | | | |
| | | | | | | |
| SEGMENT SALES | | | | | | |
| Americas | $2,706 | (4) | | | (4) | $2,702 |
| EMEA | 1,682 | | | | — | 1,682 |
| APAC | 1,452 | (25) | | | (25) | 1,427 |
| Engineering | 636 | | | | — | 636 |
| Other | 468 | (1) | | | (1) | 467 |
| Segment sales | $6,944 | $(30) | $— | | $(30) | $6,914 |
| | | | | | | |
| SEGMENT OPERATING PROFIT | | | | | | |
| Americas | $585 | $(1) | | | $(1) | $584 |
| EMEA | 347 | | | | — | 347 |
| APAC | 278 | (5) | | | (5) | 273 |
| Engineering | 78 | | | | — | 78 |
| Other | (59) | (1) | | | (1) | (60) |
| Segment operating profit | $1,229 | $(7) | $— | | $(7) | $1,222 |
| Transaction costs and other charges | (89) | | | | — | (89) |
| Purchase accounting impacts - Linde AG | (531) | | | | — | (531) |
| Total operating profit | $609 | $(7) | $— | | $(7) | $602 |
| Pro Forma Adjustments: | | | | | | |
| (a) To eliminate the results of Praxair's merger-related divestitures which are expected to be completed later in 2019. |
| (b) To eliminate the impact of the inventory step-up recorded in purchase accounting for the merger. This item is nonrecurring in nature, directly attributable to the Merger and occurred within one year of the transaction. |
| (c) To eliminate the transaction costs and other charges related to the Merger. |
| (d) To eliminate pension settlement charges related to the Merger. | | | | | | |
| (e) To eliminate the income tax impacts of the Other adjustments. | | | | | | |
| LINDE PLC AND SUBSIDIARIES |
| APPENDIX |
| 2018 PRO FORMA INCOME STATEMENT INFORMATION |
| (Millions of dollars, except per share data) |
| (UNAUDITED) |
| | Pro Forma Income Statement Information |
| | |
| | | | | | | | | |
| Sales | $2,983 | 5,010 | (1,027) | | (25) | (d) | $3,958 | $6,941 |
| Cost of sales, exclusive of depreciation | 1,661 | 3,105 | (609) | | (25) | (d) | 2,471 | 4,132 |
| Gross margin | 1,322 | 1,905 | (418) | | | | 1,487 | 2,809 |
| As a % of Sales | 44.3% | | | | | | | 40.5% |
| Selling, general and administrative | 310 | 704 | (110) | | | | 594 | 904 |
| As a % of Sales | 10.4% | | | | | | | 13.0% |
| Depreciation and amortization | 311 | 471 | (102) | 558 | | | 927 | 1,238 |
| Research and development | 24 | 26 | | | | | 26 | 50 |
| Transaction costs and other charges | 19 | 41 | | | (60) | (e) | (19) | — |
| Other income (expense) - net | (5) | 87 | | | | | 87 | 82 |
| Operating profit | 653 | 750 | (206) | (558) | 60 | | 46 | 699 |
| Operating margin | 21.9% | | | | | | | 10.1% |
| | | | | | | | | |
| Net pension and OPEB cost (benefit), excluding service costs | 2 | (39) | (1) | | | | (40) | (38) |
| Interest expense - net | 46 | 69 | (18) | (25) | | | 26 | 72 |
| Income taxes | 148 | 171 | (24) | (129) | 5 | (f) | 23 | 171 |
| Effective Tax Rate | 24.5% | | | | | | — | 25.7% |
| Income from equity investments | 15 | 24 | (9) | (16) | | | (1) | 14 |
| Noncontrolling interests from continuing operations | (10) | (37) | 6 | 42 | | | 11 | 1 |
| Income from continuing operations | $462 | $536 | $(166) | $(378) | $55 | | $47 | $509 |
| Diluted shares outstanding | 290,809 | | | | 264,342 | (g) | 264,342 | 555,151 |
| Diluted EPS from continuing operations | $1.59 | | | | $(0.67) | (g) | $(0.67) | $0.92 |
| | | | | | | | �� | |
| | | | | | | | | |
| SEGMENT SALES | | | | | | | | |
| Americas | $1,850 | 1,267 | (533) | | (16) | (d) | 718 | $2,568 |
| EMEA | 415 | 1,791 | (393) | | 1 | (d) | 1,399 | 1,814 |
| APAC | 435 | 1,111 | (92) | | (7) | (d) | 1,012 | 1,447 |
| Engineering | | 663 | — | | — | | 663 | 663 |
| Other | 283 | 178 | (9) | | (3) | (d) | 166 | 449 |
| Segment sales | $2,983 | $5,010 | $(1,027) | $— | $(25) | | $3,958 | $6,941 |
| | | | | | | | | |
| SEGMENT OPERATING PROFIT | | | | | | | | |
| Americas | $483 | 192 | (97) | | (6) | (h) | 89 | 572 |
| EMEA | 87 | 438 | (82) | | (56) | (h) | 300 | 387 |
| APAC | 106 | 182 | (25) | | (7) | (h) | 150 | 256 |
| Engineering | — | 63 | — | | (2) | (h) | 61 | 61 |
| Other | (4) | (84) | (2) | | 20 | (h) | (66) | (70) |
| Segment operating profit | $672 | $791 | $(206) | $— | $(51) | | $534 | $1,206 |
| Transaction costs and other charges | (19) | (41) | | | 60 | | 19 | — |
| Total operating profit | $653 | $750 | $(206) | $— | $9 | | $553 | $1,206 |
| Pro Forma Adjustments: | | | | | | | | |
| (a) To include Linde AG consolidated results for the period January 1, 2018 to March 31, 2018 (prior to the Merger). The adjustment reflects reclassifications to conform to Linde plc's reporting format and adjustments from IFRS to U.S. GAAP. Linde AG's results for the period effective with the Merger date are included in Linde plc's reported amounts. |
| (b) To eliminate the results of merger-related divestitures required by regulatory authorities to secure approval for the Merger. These divestitures include the majority of Praxair's European industrial gases business (completed December 3, 2018), a significant portion of Linde AG's America's industrial gases business (completed on March 1, 2019), as well as certain divestitures of other Praxair and Linde AG businesses in Asia that are currently expected to be sold in 2019. |
| (c) To include preliminary purchase accounting adjustments for the period January 1, 2018 to March 31, 2018 (prior to the Merger). This relates to (i) additional depreciation and amortization related to the increased value of of property, plant and equipment and increased basis of intangible assets, (ii) interest expense impacts related to the fair value of debt, (iii) the tax impacts related to the non-GAAP adjustments above, (iv) income from equity investments equity related to the fair value of equity investments, and (v) noncontrolling interests adjustments related to the fair value adjustments above. Purchase accounting impacts are not included in the definition of segment operating profit; therefore, no pro forma adjustment is required for segment reporting. |
| (d) To eliminate sales between Praxair and Linde AG for the period prior to the Merger date at October 31, 2018 (January 1, 2018 to March 31, 2018). |
| (e) To eliminate the transaction costs and other charges related to the Merger. |
| (f) To reflect the income tax impact of the above pro forma adjustments. |
| (g) To reflect the Impact on diluted shares outstanding and diluted EPS related to ordinary shares issues to Linde AG shareholders in connection with the Merger. |
| (h) To eliminate other (income) charges not included in segment operating profit, primarily related to a gain on a sale of a business in EMEA. |
| 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. |
| | | |
| | | |
| Adjusted Pro Forma Operating Profit and Operating Margin | | |
| Reported operating profit | $609 | $653 |
| Pro forma adjustments (a) | 59 | 46 |
| Pro forma | 668 | 699 |
| Non-GAAP Adjustments: | | |
| Add: Transaction costs and other charges | 33 | - |
| Less: Gain on sale of businesses | - | (51) |
| Add: Purchase accounting impacts - Linde AG | 521 | 558 |
| Total adjustments | 554 | 507 |
| Adjusted pro forma operating profit | $1,222 | $1,206 |
| | | |
| Reported percentage change | (6.7)% | |
| Adjusted pro forma percentage change | 1.3% | |
| | | |
| Reported sales | $6,944 | $2,983 |
| Pro forma Sales (a) | $6,914 | $6,941 |
| | | |
| Reported operating margin | 8.8% | 21.9% |
| Pro forma operating margin | 9.7% | 10.1% |
| Adjusted pro forma operating margin | 17.7% | 17.4% |
| | | |
| Adjusted Pro Forma Net Pension and OPEB cost (benefit), excluding service cost | | |
| Reported net pension and OPEB cost (benefit), excluding service cost | $15 | $2 |
| Pro forma adjustments (a) | (51) | (40) |
| Pro forma | $(36) | $(38) |
| Non-GAAP Adjustments: | | |
| Total adjustments | — | — |
| Adjusted pro forma Net Pension and OPEB cost (benefit), excluding service costs | $(36) | $(38) |
| | | |
| Adjusted Pro Forma Interest Expense - net | | |
| Reported interest expense - net | $23 | $46 |
| Pro forma adjustments (a) | — | 26 |
| Pro forma | 23 | 72 |
| Non-GAAP Adjustments: | | |
| Add: Purchase accounting impacts - Linde AG | 27 | 25 |
| Total adjustments | 27 | 25 |
| Adjusted pro forma interest expense - net | $50 | $97 |
| Adjusted Pro Forma Income Taxes | | |
| Reported income taxes | $140 | $148 |
| Pro forma adjustments (a) | 14 | 23 |
| Pro forma | $154 | $171 |
| Non-GAAP Adjustments: | | |
| Add: Purchase accounting impacts - Linde AG | $125 | $129 |
| Add: Transaction costs and other charges | 5 | (1) |
| Total adjustments | 130 | 128 |
| Adjusted pro forma income taxes | $284 | $299 |
| | | |
| | | |
| Adjusted Pro Forma Effective Tax Rate | | |
| Reported income before income taxes and equity investments | $571 | $605 |
| Pro forma adjustments (a) | 110 | 60 |
| Pro forma | $681 | $665 |
| Non-GAAP Adjustments: | | |
| Add: Purchase accounting impacts - Linde AG | 494 | 533 |
| Add: Transaction costs and other charges | 33 | (51) |
| Total adjustments | 527 | 482 |
| Adjusted pro forma income before income taxes and equity investments | $1,208 | $1,147 |
| | | |
| Reported Income taxes | 140 | 148 |
| Reported effective tax rate | 24.5% | 24.5% |
| | | |
| Adjusted Income taxes | 284 | 299 |
| Adjusted effective tax rate | 23.5% | 26.1% |
| | | |
| Income from Equity Investments | | |
| Reported income from equity investments | $34 | $15 |
| Pro forma adjustments (a) | — | (1) |
| Pro forma | $34 | $14 |
| Non-GAAP Adjustments: | | |
| Add: Purchase accounting impacts - Linde AG | 14 | 16 |
| Total adjustments | 14 | 16 |
| Adjusted pro forma income from equity investments | $48 | $30 |
| Adjusted Pro Forma Noncontrolling Interests from Continuing Operations | | |
| Reported noncontrolling interests from continuing operations | $(30) | $(10) |
| Pro forma adjustments (a) | — | 11 |
| Pro forma | $(30) | $1 |
| Non-GAAP adjustments: | | |
| Add: Purchase accounting impacts - Linde AG | $(15) | $(42) |
| Total adjustments | (15) | (42) |
| Adjusted pro forma noncontrolling interests from continuing operations | $(45) | $(41) |
| | | |
| Adjusted Pro Forma Income from Continuing Operations | | |
| Reported income from continuing operations | $435 | $462 |
| Pro forma adjustments (a) | 96 | 47 |
| Pro forma | $531 | $509 |
| Non-GAAP adjustments: | | |
| Add: Transaction costs and other charges | $28 | $— |
| Less: Gain on sale of business | — | (50) |
| Add: Purchase accounting impacts - Linde AG | 368 | 378 |
| Total adjustments | 396 | 328 |
| Adjusted pro forma Income from Continuing Operations | $927 | $837 |
| Adjusted Pro Forma Diluted EPS from Continuing Operations | | |
| Reported diluted EPS from continuing operations | $0.79 | $1.59 |
| Pro forma adjustments (a) | 0.18 | (0.67) |
| Pro forma | $0.97 | $0.92 |
| Non-GAAP adjustments: | | |
| Add: Transaction costs and other charges | $0.05 | $— |
| Less: Gain on sale of business | — | (0.09) |
| Add: Purchase accounting impacts - Linde AG | 0.67 | 0.68 |
| Total adjustments | 0.72 | 0.59 |
| Adjusted pro forma diluted EPS from continuing operations | $1.69 | $1.51 |
| | | |
| | | |
| Adjusted Pro Forma EBITDA and % of sales | | |
| Income from continuing operations | $435 | $462 |
| Add: NCI related to continuing operations | 30 | 10 |
| Add: Net pension & OPEB | 15 | 2 |
| Add: Interest | 23 | 46 |
| Add: Taxes | 140 | 148 |
| Add: D&A | 1,223 | 311 |
| EBITDA from continuing operations | $1,866 | $979 |
| Pro forma adjustments: | | |
| Add: Linde AG consolidated results | — | 1,245 |
| Add: Purchase accounting impacts - Linde AG | 10 | (16) |
| Add: Transaction costs and other charges | 56 | 60 |
| Less: Divestitures | (7) | (317) |
| Pro forma adjustments | 59 | 972 |
| Pro forma EBITDA from continuing operations | $1,925 | $1,951 |
| Non-GAAP adjustments: | | |
| Less: Gain on sale of business | — | (51) |
| Add: Transaction costs | 33 | — |
| Add: Purchase accounting impacts - Linde AG | 14 | 16 |
| Adjusted pro forma EBITDA from continuing operations | $1,972 | $1,916 |
| | | |
| | | |
| Reported sales | $6,944 | $2,983 |
| Pro forma sales | $6,914 | $6,941 |
| % of sales | | |
| EBITDA from continuing operations | 26.9% | 32.8% |
| Pro forma EBITDA from continuing operations | 27.8% | 28.1% |
| Adjusted pro forma EBITDA from continuing operations | 28.5% | 27.6% |
| | | |
| (a) See pro forma Income Statement Information in the preceding section. | | |
LINDE PLC AND SUBSIDIARIES |
|
NON-GAAP MEASURES AND RECONCILIATIONS |
|
|
| | | |
| | | |
| | Q1 | Q4 |
| | | |
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 | $1,068 | |
| Less: capital expenditures | (843) | |
| Free Cash Flow | $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 | $14,146 | $15,296 |
| Less: cash and cash equivalents | (5,791) | (4,466) |
| Net debt | 8,355 | 10,830 |
| Less: Purchase accounting impacts - Linde AG | (262) | (291) |
| Adjusted net debt | $8,093 | $10,539 |
