Full-year 2024 adjusted EPS guidance of $15.40 - $15.60 representing 9% to 11% growth year-over-year excluding FX
Woking, UK, August 2, 2024 – Linde plc (Nasdaq: LIN) today reported second-quarter 2024 net income of $1,663 million and diluted earnings per share of $3.44, up 6% and 8% respectively. Excluding Linde AG purchase accounting impacts and other charges, adjusted net income was $1,859 million, up 6% versus prior year. Adjusted earnings per share was $3.85, 8% above prior year.
Linde’s sales for the second quarter were $8,267 million, up 1% versus prior year. Compared to prior year, underlying sales increased 3% from price attainment as volume growth was flat.
Second-quarter operating profit was $2,184 million. Adjusted operating profit of $2,422 million was up 6% versus prior year led by higher price and continued productivity initiatives across all segments. Adjusted operating profit margin of 29.3% was 140 basis points above prior year.
Second-quarter operating cash flow of $1,929 million decreased 10% versus prior year driven primarily by engineering project prepayment timing. After capital expenditures of $1,133 million, free cash flow was $796 million. During the quarter, the company returned $2,100 million to shareholders through dividends and stock repurchases, net of issuances.
Commenting on the financial results and business outlook, Chief Executive Officer Sanjiv Lamba said, “Despite the challenging macro, the Linde team again delivered high-quality results, growing EPS 8%, increasing ROC to 25.7% and expanding operating margins 140 basis points, reaching 29.3%. This exemplifies our ability to continuously grow the integrated industrial gas model while developing and winning high-quality growth opportunities.”
Lamba continued, “Looking ahead, the economic environment remains uncertain. However, we are well positioned to win more than our fair share of high-quality projects and continue to create shareholder value.”
For the third quarter of 2024, Linde expects adjusted diluted earnings per share in the range of $3.82 to $3.92, up 5% to 8% versus prior-year quarter or 6% to 9% when excluding 1% of estimated currency headwind.
For the full year 2024, the company expects adjusted diluted earnings per share to be in the range of $15.40 to $15.60, up 8% to 10% versus prior year or 9% to 11% when excluding 1% of estimated currency headwind. Full-year capital expenditures are expected to be in the range of $4.0 billion to $4.5 billion to support growth and maintenance requirements including the $4.7 billion contractual sale of gas project backlog.
Page 1 of 10
Second-Quarter 2024 Results by Segment
Americas sales of $3,655 million increased 3% versus prior-year quarter. Compared with second quarter 2023, underlying sales increased 4% driven by higher pricing as volumes were flat. Operating profit of $1,159 million was 31.7% of sales, 150 basis points above prior year.
APAC (Asia Pacific) sales of $1,657 million were down 2% versus prior year driven by negative currency translation. Compared with second quarter 2023, underlying sales were stable as price and volume were flat versus prior year quarter. Operating profit of $474 million was 28.6% of sales, 60 basis points above prior year.
EMEA (Europe, Middle East & Africa) sales of $2,091 million were down 3% versus prior year. Compared with second quarter 2023, underlying sales grew 2% driven by 3% higher pricing partially offset by 1% lower volumes, primarily in the metals and mining end market. Operating profit of $704 million was 33.7% of sales, 450 basis points above prior year.
Linde Engineering sales were $544 million, increased 10% versus prior year, and operating profit was $96 million or 17.6% of sales. Order intake for the quarter was $336 million and third-party sale of equipment backlog was $3.2 billion.
Earnings Call
A teleconference on Linde’s second-quarter 2024 results is being held today at 9:00 am EDT.
Live conference call
US Toll-Free Dial-In Number: 1 888 770 7292
UK Toll-Free Dial-In Number: 0800 358 0970
Access code: 6877110
Live webcast (listen-only)
https://www.linde.com/investors/financial-reports
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 2023 sales of $33 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, decarbonize and protect our planet.
The company serves a variety of end markets such as chemicals & energy, food & beverage, electronics, healthcare, manufacturing, metals and mining. Linde's industrial gases and technologies are used in countless applications including production of clean hydrogen and carbon capture systems critical to the energy transition, life-saving medical oxygen and high-purity & specialty gases for electronics. 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
Page 2 of 10
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 2024. 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, 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 future results or circumstances to differ materially from 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, 2023 filed with the SEC on February 28, 2024 which should be reviewed carefully. Please consider Linde plc’s forward-looking statements in light of those risks.
Page 3 of 10
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
Net Income
Diluted EPS
Quarter Ended June 30
2024
2023
2024
2023
2024
2023
2024
2023
Reported GAAP Amounts
$
8,267
$
8,204
$
2,184
$
2,011
$
1,663
$
1,575
$
3.44
$
3.19
Other charges (a)
—
—
—
22
—
(12
)
—
(0.02
)
Purchase accounting impacts - Linde AG (b)
—
—
238
253
196
197
0.41
0.40
Total adjustments
—
—
238
275
196
185
0.41
0.38
Adjusted amounts
$
8,267
$
8,204
$
2,422
$
2,286
$
1,859
$
1,760
$
3.85
$
3.57
(Millions of dollars, except per share amounts)
Sales
Operating Profit
Net Income
Diluted EPS
Year to Date June 30
2024
2023
2024
2023
2024
2023
2024
2023
Reported GAAP Amounts
$
16,367
$
16,397
$
4,279
$
3,944
$
3,290
$
3,091
$
6.79
$
6.25
Other charges (a)
—
—
—
40
(5
)
(39
)
(0.01
)
(0.08
)
Purchase accounting impacts - Linde AG (b)
—
—
484
508
395
401
0.82
0.81
Total adjustments
—
—
484
548
390
362
0.81
0.73
Adjusted amounts
$
16,367
$
16,397
$
4,763
$
4,492
$
3,680
$
3,453
$
7.60
$
6.98
(a) 2023 year to date charges related primarily to severance and delist charges, which were offset by a tax settlement.
(b) To adjust for purchase accounting impacts related to the merger.
Page 4 of 10
LINDE PLC AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
Quarter Ended June 30,
Year To Date June 30,
(Millions of dollars, except per share data)
2024
2023
2024
2023
Sales
$
8,267
$
8,204
$
16,367
$
16,397
Cost of sales
4,251
4,316
8,467
8,747
Selling, general and administrative
840
833
1,700
1,655
Depreciation and amortization
958
960
1,907
1,908
Research and development
36
35
74
71
Other charges
—
22
—
40
Other income (expense) - net
2
(27
)
60
(32
)
Operating Profit
2,184
2,011
4,279
3,944
Interest expense - net
70
52
135
89
Net pension and OPEB cost (benefit), excluding service cost
(49
)
(45
)
(99
)
(90
)
Income Before Income Taxes and Equity Investments
2,163
2,004
4,243
3,945
Income taxes
508
438
971
868
Income Before Equity Investments
1,655
1,566
3,272
3,077
Income from equity investments
45
46
93
87
Income (Including Noncontrolling Interests)
1,700
1,612
3,365
3,164
Less: noncontrolling interests
(37
)
(37
)
(75
)
(73
)
Net Income – Linde plc
$
1,663
$
1,575
$
3,290
$
3,091
Per Share Data – Linde plc Shareholders
Basic earnings per share
$
3.46
$
3.22
$
6.84
$
6.30
Diluted Earnings per share
$
3.44
$
3.19
$
6.79
$
6.25
Cash dividends per share
$
1.39
$
1.275
$
2.78
$
2.55
Weighted Average Shares Outstanding (000’s):
Basic shares outstanding (000's)
479,973
489,618
480,943
490,727
Diluted shares outstanding (000's)
483,177
493,549
484,366
494,685
Note: See page 9 for a reconciliation to adjusted amounts which are Non-GAAP.
Page 5 of 10
LINDE PLC AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
June 30,
December 31,
(Millions of dollars)
2024
2023
Assets
Cash and cash equivalents
$
4,626
$
4,664
Accounts receivable - net
5,001
4,718
Contract assets
226
196
Inventories
2,094
2,115
Prepaid and other current assets
896
927
Total Current Assets
12,843
12,620
Property, plant and equipment - net
24,575
24,552
Goodwill
26,365
26,751
Other intangibles - net
11,851
12,399
Other long-term assets
4,581
4,489
Total Assets
$
80,215
$
80,811
Liabilities and Equity
Accounts payable
$
2,859
$
3,020
Short-term debt
3,326
4,713
Current portion of long-term debt
1,261
1,263
Contract liabilities
1,767
1,901
Other current liabilities
4,291
4,820
Total Current Liabilities
13,504
15,717
Long-term debt
16,931
13,397
Other long-term liabilities
10,229
10,602
Total Liabilities
$
40,664
$
39,716
Redeemable noncontrolling interests
13
13
Linde plc Shareholders’ Equity
Ordinary shares
1
1
Additional paid-in capital
39,560
39,812
Retained earnings
10,721
8,845
Accumulated other comprehensive income (loss)
(6,794
)
(5,805
)
Less: Treasury shares, at cost
(5,309
)
(3,133
)
Total Linde plc Shareholders' Equity
38,179
39,720
Noncontrolling interests
1,359
1,362
Total Equity
$
39,538
$
41,082
Total Liabilities and Equity
$
80,215
$
80,811
Page 6 of 10
LINDE PLC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
Quarter Ended June 30,
Year to Date June 30,
(Millions of dollars)
2024
2023
2024
2023
Operations
Net income - Linde plc
$
1,663
$
1,575
$
3,290
$
3,091
Add: noncontrolling interests
37
37
75
73
Net income (including noncontrolling interests)
1,700
1,612
3,365
3,164
Adjustments to reconcile net income to net cash provided by operating activities:
Other charges, net of payments (a)
(20
)
—
(75
)
(61
)
Depreciation and amortization
958
960
1,907
1,908
Accounts receivable
(61
)
(44
)
(422
)
(175
)
Contract assets and liabilities, net
(139
)
183
(189
)
117
Inventory
4
(26
)
(23
)
(85
)
Payables and accruals
(328
)
(394
)
(393
)
(458
)
Pension contributions
(13
)
(15
)
(24
)
(25
)
Deferred income taxes and other
(172
)
(126
)
(263
)
(327
)
Net cash provided by (used for) operating activities
1,929
2,150
3,883
4,058
Investing
Capital expenditures
(1,133
)
(859
)
(2,181
)
(1,688
)
Acquisitions, net of cash acquired
(152
)
(26
)
(152
)
(834
)
Divestitures, net of cash divested and asset sales
15
21
22
24
Net cash provided by (used for) investing activities
(1,270
)
(864
)
(2,311
)
(2,498
)
Financing
Debt increase (decrease) - net
1,320
(1,359
)
2,535
(642
)
Issuances of ordinary shares
5
8
21
21
Purchases of ordinary shares
(1,440
)
(908
)
(2,481
)
(1,767
)
Cash dividends - Linde plc shareholders
(665
)
(623
)
(1,334
)
(1,246
)
Noncontrolling interest transactions and other
(28
)
(10
)
(217
)
(22
)
Net cash provided by (used for) financing activities
(808
)
(2,892
)
(1,476
)
(3,656
)
Effect of exchange rate changes on cash and cash equivalents
(73
)
1
(134
)
17
Change in cash and cash equivalents
(222
)
(1,605
)
(38
)
(2,079
)
Cash and cash equivalents, beginning-of-period
4,848
4,962
4,664
5,436
Cash and cash equivalents, end-of-period
$
4,626
$
3,357
$
4,626
$
3,357
(a) There were no other charges for the quarter and six months ended June 30, 2024 and other charges of $22 million and $40 million for the respective 2023 periods. Related cash outflows were $20 million and $22 million for the quarters ended June 30, 2024 and 2023, respectively, and $75 million and $101 million for the six months ended June 30, 2024 and 2023, respectively.
Page 7 of 10
LINDE PLC AND SUBSIDIARIES
SEGMENT INFORMATION
(UNAUDITED)
Quarter Ended June 30,
Year to Date June 30,
(Millions of dollars)
2024
2023
2024
2023
Sales
Americas
$
3,655
$
3,541
$
7,215
$
7,092
EMEA
2,091
2,160
4,182
4,337
APAC
1,657
1,683
3,248
3,281
Engineering
544
495
1,083
1,035
Other
320
325
639
652
Total segment sales
$
8,267
$
8,204
$
16,367
$
16,397
Operating Profit
Americas
$
1,159
$
1,070
$
2,247
$
2,095
EMEA
704
630
1,391
1,237
APAC
474
472
921
895
Engineering
96
107
196
256
Other
(11
)
7
8
9
Segment operating profit
2,422
2,286
4,763
4,492
Other charges
—
(22
)
—
(40
)
Purchase accounting impacts - Linde AG
(238
)
(253
)
(484
)
(508
)
Total operating profit
$
2,184
$
2,011
$
4,279
$
3,944
Page 8 of 10
LINDE PLC AND SUBSIDIARIES
APPENDIX
NON-GAAP MEASURES AND RECONCILIATIONS
(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.
2024
2023
(Millions of dollars)
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
$
4,279
$
2,184
$
2,095
$
3,944
$
2,028
$
2,052
$
2,011
$
1,933
Add: Other charges (a)
—
—
—
40
(2
)
2
22
18
Add: Purchase accounting impacts - Linde AG (c)
484
238
246
508
246
252
253
255
Total adjustments
484
238
246
548
244
254
275
273
Adjusted operating profit
$
4,763
$
2,422
$
2,341
$
4,492
$
2,272
$
2,306
$
2,286
$
2,206
Reported percentage change
8
%
9
%
8
%
Adjusted percentage change
6
%
6
%
6
%
Reported sales
$
16,367
$
8,267
$
8,100
$
16,397
$
8,302
$
8,155
$
8,204
$
8,193
Reported operating margin
26.1
%
26.4
%
25.9
%
24.1
%
24.4
%
25.2
%
24.5
%
23.6
%
Adjusted operating margin
29.1
%
29.3
%
28.9
%
27.4
%
27.4
%
28.3
%
27.9
%
26.9
%
Adjusted Depreciation and amortization
Reported depreciation and amortization
$
1,907
$
958
$
949
$
1,908
$
949
$
959
$
960
$
948
Less: Purchase accounting impacts - Linde AG (c)
(477
)
(237
)
(240
)
(501
)
(241
)
(249
)
(251
)
(250
)
Adjusted depreciation and amortization
$
1,430
$
721
$
709
$
1,407
$
708
$
710
$
709
$
698
Adjusted Other Income (Expense) - net
Reported Other Income (Expense) - net
$
60
$
2
$
58
$
(32
)
$
(25
)
$
16
$
(27
)
$
(5
)
Add: Purchase accounting impacts - Linde AG (c)
(7
)
(1
)
(6
)
(7
)
(5
)
(3
)
(2
)
(5
)
Adjusted Other Income (Expense) - net
$
67
$
3
$
64
$
(25
)
$
(20
)
$
19
$
(25
)
$
—
Adjusted Net Pension and OPEB Cost (Benefit), Excluding Service Cost
Reported net pension and OPEB cost (benefit), excluding service cost
$
(99
)
$
(49
)
$
(50
)
$
(90
)
$
(39
)
$
(35
)
$
(45
)
$
(45
)
Add: Pension settlement charges
—
—
—
—
(4
)
(12
)
—
—
Adjusted Net Pension and OPEB cost (benefit), excluding service costs
$
(99
)
$
(49
)
$
(50
)
$
(90
)
$
(43
)
$
(47
)
$
(45
)
$
(45
)
Adjusted Interest Expense - Net
Reported interest expense - net
$
135
$
70
$
65
$
89
$
71
$
40
$
52
$
37
Add: Purchase accounting impacts - Linde AG (c)
3
1
2
13
1
2
4
9
Adjusted interest expense - net
$
138
$
71
$
67
$
102
$
72
$
42
$
56
$
46
Page 9 of 10
2024
2023
(Millions of dollars)
Year to Date
June 30,
Q2
Q1
Year to Date
June 30,
Q4
Q3
Q2
Q1
Adjusted Income Taxes (a)
Reported income taxes
$
971
$
508
$
463
$
868
$
459
$
487
$
438
$
430
Add: Purchase accounting impacts - Linde AG (c)
116
56
60
124
49
59
67
57
Add: Pension settlement charges
—
—
—
—
1
2
—
—
Add: Other charges (a)
5
—
5
79
2
—
34
45
Total adjustments
121
56
65
203
52
61
101
102
Adjusted income taxes
$
1,092
$
564
$
528
$
1,071
$
511
$
548
$
539
$
532
Adjusted Effective Tax Rate (a)
Reported income before income taxes and equity
investments
$
4,243
$
2,163
$
2,080
$
3,945
$
1,996
$
2,047
$
2,004
$
1,941
Add: Pension settlement charge
—
—
—
—
4
12
—
—
Add: Purchase accounting impacts - Linde AG (c)
481
237
244
495
245
250
249
246
Add: Other charges (a)
—
—
—
40
(2
)
2
22
18
Total adjustments
481
237
244
535
247
264
271
264
Adjusted income before income taxes and equity investments
$
4,724
$
2,400
$
2,324
$
4,480
$
2,243
$
2,311
$
2,275
$
2,205
Reported Income taxes
$
971
$
508
$
463
$
868
$
459
$
487
$
438
$
430
Reported effective tax rate
22.9
%
23.5
%
22.3
%
22.0
%
23.0
%
23.8
%
21.9
%
22.2
%
Adjusted income taxes
$
1,092
$
564
$
528
$
1,071
$
511
$
548
$
539
$
532
Adjusted effective tax rate
23.1
%
23.5
%
22.7
%
23.9
%
22.8
%
23.7
%
23.7
%
24.1
%
Income from Equity Investments
Reported income from equity investments
$
93
$
45
$
48
$
87
$
39
$
41
$
46
$
41
Add: Purchase accounting impacts - Linde AG (c)
36
18
18
36
18
18
18
18
Adjusted income from equity investments
$
129
$
63
$
66
$
123
$
57
$
59
$
64
$
59
Adjusted Noncontrolling Interests
Reported noncontrolling interests
$
(75
)
$
(37
)
$
(38
)
$
(73
)
$
(33
)
$
(36
)
$
(37
)
$
(36
)
Add: Purchase accounting impacts - Linde AG (c)
(6
)
(3
)
(3
)
(6
)
(3
)
(3
)
(3
)
(3
)
Adjusted noncontrolling interests
$
(81
)
$
(40
)
$
(41
)
$
(79
)
$
(36
)
$
(39
)
$
(40
)
$
(39
)
Adjusted Net Income - Linde plc (b)
Reported net income
$
3,290
$
1,663
$
1,627
$
3,091
$
1,543
$
1,565
$
1,575
$
1,516
Add: Pension settlement charge
—
—
—
—
3
10
—
—
Add: Other charges (a)
(5
)
—
(5
)
(39
)
(4
)
2
(12
)
(27
)
Add: Purchase accounting impacts - Linde AG (c)
395
196
199
401
211
206
197
204
Total adjustments
390
196
194
362
210
218
185
177
Adjusted net income - Linde plc
$
3,680
$
1,859
$
1,821
$
3,453
$
1,753
$
1,783
$
1,760
$
1,693
Page 9 of 10 cont'd
2024
2023
(Millions of dollars, except per share data)
Year to Date
June 30,
Q2
Q1
Year to Date
June 30,
Q4
Q3
Q2
Q1
Adjusted Diluted EPS (b)
Reported diluted EPS
$
6.79
$
3.44
$
3.35
$
6.25
$
3.16
$
3.19
$
3.19
$
3.06
Add: Pension settlement charge
—
—
—
—
0.01
0.02
—
—
Add: Other charges (a)
(0.01
)
—
(0.01
)
(0.08
)
(0.01
)
—
(0.02
)
(0.05
)
Add: Purchase accounting impacts - Linde AG (c)
0.82
0.41
0.41
0.81
0.43
0.42
0.40
0.41
Total adjustments
0.81
0.41
0.40
0.73
0.43
0.44
0.38
0.36
Adjusted diluted EPS
$
7.60
$
3.85
$
3.75
$
6.98
$
3.59
$
3.63
$
3.57
$
3.42
Reported percentage change
9
%
8
%
9
%
Adjusted percentage change
9
%
8
%
10
%
Third Quarter 2024
Full Year 2024
Adjusted Diluted EPS Guidance (d)
Low End High End
Low End High End
2024 Adjusted Guidance
$
3.82
$
3.92
$
15.40
$
15.60
Adjusted percentage changes versus 2023 adjusted diluted EPS
5
%
8
%
8
%
10
%
Add: Estimated currency headwind/(tailwind)
1
%
1
%
1
%
1
%
Adjusted percentage change excluding currency
6
%
9
%
9
%
11
%
Adjusted EBITDA and % of Sales
Net Income - Linde plc
$
3,290
$
1,663
$
1,627
$
3,091
$
1,543
$
1,565
$
1,575
$
1,516
Add: Noncontrolling interests
75
37
38
73
33
36
37
36
Add: Net pension and OPEB cost (benefit), excluding service cost
(99
)
(49
)
(50
)
(90
)
(39
)
(35
)
(45
)
(45
)
Add: Interest expense
135
70
65
89
71
40
52
37
Add: Income taxes
971
508
463
868
459
487
438
430
Add: Depreciation and amortization
1,907
958
949
1,908
949
959
960
948
EBITDA
6,279
3,187
3,092
5,939
3,016
3,052
3,017
2,922
Add: Other charges (a)
—
—
—
40
(2
)
2
22
18
Add: Purchase accounting impacts - Linde AG (c)
43
19
24
43
23
20
20
23
Total adjustments
43
19
24
83
21
22
42
41
Adjusted EBITDA
$
6,322
$
3,206
$
3,116
$
6,022
$
3,037
$
3,074
$
3,059
$
2,963
Reported sales
$
16,367
$
8,267
$
8,100
$
16,397
$
8,302
$
8,155
$
8,204
$
8,193
% of sales
EBITDA
38.4
%
38.6
%
38.2
%
36.2
%
36.3
%
37.4
%
36.8
%
35.7
%
Adjusted EBITDA as a % of Sales
38.6
%
38.8
%
38.5
%
36.7
%
36.6
%
37.7
%
37.3
%
36.2
%
(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 2018 business combination was a merger of equals in an all-stock merger transaction, with no cash consideration, (ii)
Page 9 of 10 cont'd
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 and the allocation of fair value step-up for ongoing Linde AG asset disposals (reflected in Other Income/ (Expense)).
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: 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 2024. This is a non-GAAP financial measure that represents diluted earnings per share (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 and 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 9 of 10 cont'd
LINDE PLC AND SUBSIDIARIES
APPENDIX
NON-GAAP MEASURES AND RECONCILIATIONS
(UNAUDITED)
2024
2023
(Millions of dollars)
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
$
1,929
$
1,954
$
2,727
$
2,520
$
2,150
$
1,908
Less: Capital Expenditures
(1,133
)
(1,048
)
(1,151
)
(948
)
(859
)
(829
)
Free Cash Flow
$
796
$
906
$
1,576
$
1,572
$
1,291
$
1,079
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
$
21,518
$
20,319
$
19,373
$
18,003
$
17,490
$
18,777
Less: Cash and cash equivalents
(4,626
)
(4,848
)
(4,664
)
(3,894
)
(3,357
)
(4,962
)
Net debt
16,892
15,471
14,709
14,109
14,133
13,815
Less: Purchase accounting impacts - Linde AG
(4
)
(5
)
(7
)
(8
)
(10
)
(13
)
Adjusted net debt
$
16,888
$
15,466
$
14,702
$
14,101
$
14,123
$
13,802
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 net income - Linde plc
$
1,663
$
1,627
$
1,543
$
1,565
$
1,575
$
1,516
Add: noncontrolling interests
37
38
33
36
37
36
Add: interest expense - net
70
65
71
40
52
37
Less: tax benefit on interest expense - net *
(17
)
(16
)
(16
)
(12
)
(12
)
(9
)
Reported NOPAT
$
1,753
$
1,714
$
1,631
$
1,629
$
1,652
$
1,580
Adjusted net income - Linde plc
$
1,859
$
1,821
$
1,753
$
1,783
$
1,760
$
1,693
Add: adjusted noncontrolling interests
40
41
36
39
40
39
Add: adjusted interest expense - net
71
67
72
42
56
46
Less: tax benefit on interest expense - net *
(17
)
(17
)
(17
)
(13
)
(13
)
(11
)
Adjusted NOPAT
$
1,953
$
1,912
$
1,844
$
1,851
$
1,843
$
1,767
*Tax benefit on interest expense - net is generally presented using the reported effective rate.
4-quarter trailing reported NOPAT
$
6,727
$
6,626
$
6,492
$
6,246
$
5,930
$
4,692
4-quarter trailing adjusted NOPAT
$
7,560
$
7,450
$
7,305
$
7,101
$
6,863
$
6,638
Page 10 of 10
2024
2023
(Millions of dollars)
Q2
Q1
Q4
Q3
Q2
Q1
Equity and redeemable noncontrolling interests:
Redeemable noncontrolling interests
$
13
$
13
$
13
$
13
$
13
$
13
Linde plc shareholders' equity
38,179
38,829
39,720
38,898
39,911
39,970
Noncontrolling interests
1,359
1,387
1,362
1,327
1,324
1,353
Total equity and redeemable noncontrolling interests
$
39,551
$
40,229
$
41,095
$
40,238
$
41,248
$
41,336
Reported capital
$
56,443
$
55,700
$
55,804
$
54,347
$
55,381
$
55,151
Total equity and redeemable noncontrolling interests
$
39,551
$
40,229
$
41,095
$
40,238
$
41,248
$
41,336
Add: Adjusted net debt
16,888
15,466
14,702
14,101
14,123
13,802
Less: Linde AG Goodwill (a)
24,256
24,256
24,256
24,256
24,256
24,256
Less: Linde AG Indefinite lived intangibles (a)
1,868
1,868
1,868
1,868
1,868
1,868
Adjusted capital
$
30,315
$
29,571
$
29,673
$
28,215
$
29,247
$
29,014
(a) Represent opening balance sheet purchase accounting impacts of non-amortizing assets related to the Linde AG merger.
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