Attached files
| file | filename |
|---|---|
| 8-K - CURRENT REPORT - LINDE PLC | lin-20211231.htm |
Exhibit
99.1
Press release
Linde Reports First-Quarter 2021 Results
Financial Highlights
➢
Sales
$7.2 billion, up 7% versus prior-year quarter
➢
Operating
profit $1.2 billion; adjusted operating profit $1.7 billion, up
25%
➢
Operating
profit margin 16.7%; adjusted operating profit margin 23.3%, up 320
basis points
➢
EPS
$1.86; adjusted EPS $2.49, up 32%
➢
Strong
operating cash flow $2.1 billion, up 57%
➢
Increased full-year 2021 adjusted EPS guidance to
$9.60 - $9.80, represents
17% to 19% growth year-over-year
Guildford,
UK, May 6, 2021 – Linde plc (NYSE: LIN; FWB: LIN) today
reported first-quarter 2021 income from continuing operations of
$979 million and diluted
earnings per share of $1.86, an increase of 74% versus prior year.
Excluding Linde AG purchase accounting impacts and other charges,
adjusted income from continuing operations was $1,312 million, up
30% versus prior year and 8% sequentially. Adjusted earnings per
share was $2.49, 32% above prior year and 8% higher
sequentially.
Linde’s
sales for the first quarter were $7,243 million, 7% above prior
year and flat sequentially. Compared to prior year, underlying
sales increased 5%, including 2% price attainment and 3% higher
volumes, led by healthcare, electronics and a recovery in the
cyclical end markets of manufacturing, metals, chemicals and
refining. Sequentially, underlying sales increased 2% driven by
higher volume and price.
First-quarter
operating profit was $1,213 million. Adjusted operating profit of
$1,688 million was up 25% versus prior year led by higher price and
continued productivity initiatives across all segments. Adjusted
operating margin of 23.3% expanded 320 basis points versus prior
year and 110 basis points sequentially.
First-quarter
operating cash flow of $2,109 million increased 57% versus prior
year. After
capital expenditures of $762 million, free cash flow was $1,347
million, up 148% versus prior year. During the quarter, the company
returned $1,404 million to shareholders through dividends and stock
repurchases, net of issuance.
Commenting on the financial
results and business outlook, Chief Executive Officer Steve Angel
said, ”Linde employees delivered another strong quarter of
financial results with operating profit margins expanding over 320
basis points, ROC improving to 14.5% and operating cash flow
increasing 57%. In addition, EPS grew 32%, reaching a new record
high of $2.49. The resiliency of our business model coupled with
the ability to leverage any economic recovery has allowed Linde to
continue delivering stellar results.”
Angel
continued, “Looking ahead, I have confidence the company will
continue to create significant shareholder value for years to
come.”
For the
second quarter of 2021, Linde expects adjusted diluted earnings per
share in the range of $2.50 to $2.55, up 37% to 39% versus the same
quarter in 2019 and 32% to 34% versus prior-year quarter. This
guidance assumes a year-over-year 4% currency tailwind and
sequentially a negative currency impact of 1%.
Page
1/11
Press release
For the
full year 2021, the company expects adjusted diluted earnings per
share to be in the range of $9.60 to $9.80, up 31% to 34% versus
2019 and 17% to 19% versus prior year. This guidance assumes a 2%
currency tailwind versus 2020. Full-year capital expenditures are
expected to be in the range of $3.0 billion to $3.4 billion to
support maintenance and growth requirements including the $3.5
billion contractual sale of gas project backlog.
First-Quarter 2021 Results by Segment
Americas
sales of $2,840 million were 6% above prior year. Underlying sales
increased 7% driven by 3% higher pricing and 4% higher volume, led
by higher demand across all end markets. Sequentially, price
increased 1% and volumes grew 3%, led by higher demand in
healthcare, electronics and cyclical end markets. Operating profit
of $795 million was 28.0% of sales, up 330 basis points versus
prior year.
APAC
(Asia Pacific) sales of $1,436 million were 7% above prior year.
Underlying sales grew 11% driven by 1% price attainment and 10%
volume growth, primarily in the electronics and cyclical end
markets plus project start-ups. Sequentially, volume was flat as
contribution from project start-ups was offset by weaker base
volumes, mainly due to seasonality. Divestitures were driven by an
accounting deconsolidation of a joint venture which reduced sales
11% versus prior year and 12% sequentially, but had no impact on
earnings per share. Operating profit of $351 million was 24.4% of
sales, up 340 basis points versus prior year.
EMEA
(Europe, Middle East & Africa) sales of $1,799 million were up
10% versus prior year. Underlying sales grew 4%, primarily led by
3% higher pricing and increased demand from the healthcare end
market. Sequentially, underlying sales were flat, with 1% higher
pricing offset by slightly lower volumes. Operating profit of $451
million was 25.1% of sales, up 340 basis points versus prior
year.
Linde
Engineering sales were $674 million, 11% above prior year, and
operating profit was $109 million or 16.2% of sales. Order intake
for the quarter was $461 million, up 30% sequentially, and
third-party sale of equipment backlog was $4.3
billion.
Earnings
Call
A
teleconference on Linde’s first-quarter 2021 results is being
held today at 10:00 am EDT.
|
Live conference call
|
US
Toll-Free Dial-In Number: 1 855 758 5442
Germany
Toll-Free Dial-In Number: 0800 181 5287
UK
Toll-Free Dial-In Number: 0800 028 8438
Access
code: 8561159
|
|
Live webcast (listen-only)
|
https://investors.linde.com/events-presentations
Short
URL: https://t1p.de/i2ho
|
Materials
to be used in the teleconference are also available on the
website.
About
Linde
Linde
is a leading global industrial gases and engineering company with
2020 sales of $27 billion (€24 billion). We live our mission
of making our world more
productive every day by providing high-quality solutions,
technologies and services which are making our customers more
successful and helping to sustain and protect our
planet.
Page
2/11
Press release
The
company serves a variety of end markets including chemicals &
refining, food & beverage, electronics, healthcare,
manufacturing and primary metals. Linde’s industrial gases
are used in countless applications, from life-saving oxygen for
hospitals to high-purity & specialty gases for electronics
manufacturing, hydrogen for clean fuels and much more. Linde also
delivers state-of-the-art gas processing solutions to support
customer expansion, efficiency improvements and emissions
reductions.
For
more information about the company and its products and services,
please visit www.linde.com
Adjusted
amounts, free cash flow and return on capital are non-GAAP
measures. See the attachments for a summary of non-GAAP
reconciliations and calculations for adjusted amounts.
Attachments:
Summary Non-GAAP Reconciliations, Statements of Income, Balance
Sheets, Statements of Cash Flows, Segment Information and Appendix:
Non-GAAP Measures and Reconciliations.
*Note:
We are providing adjusted earnings per share (“EPS”)
guidance for 2021. This is a non-GAAP financial measure that
represents diluted earnings per share from continuing operations (a
GAAP measure) but excludes the impact of certain items that we
believe are not representative of our underlying business
performance, such as cost reduction and other charges, the impact
of potential divestitures or other potentially significant
items. Given the uncertainty of timing and magnitude of
such items, we cannot provide a reconciliation of the differences
between the non-GAAP adjusted EPS guidance and the corresponding
GAAP EPS measure without unreasonable effort.
Forward-looking
Statements
This
document contains “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of
1995. These forward-looking statements are identified by terms and
phrases such as: anticipate, believe, intend, estimate, expect,
continue, should, could, may, plan, project, predict, will,
potential, forecast, and similar expressions. They are based on
management’s reasonable expectations and assumptions as of
the date the statements are made but involve risks and
uncertainties. These risks and uncertainties include, without
limitation: the performance of stock markets generally;
developments in worldwide and national economies and other
international events and circumstances, includingtrade conflicts
and tariffs; changes in foreign currencies and in interest rates;
the cost and availability of electric power, natural gas and other
raw materials; the ability to achieve price increases to offset
cost increases; catastrophic events including natural disasters,
epidemics, pandemics such as
COVID-19 and acts of war and terrorism; the ability to attract,
hire, and retain qualified personnel; the impact of changes in
financial accounting standards; the impact of changes in pension
plan liabilities; the impact of tax, environmental, healthcare and
other legislation and government regulation in jurisdictions in
which the company operates; the cost and outcomes of
investigations, litigation and regulatory proceedings; the impact
of potential unusual or non-recurring items; continued timely
development and market acceptance of new products and applications;
the impact of competitive products and pricing; future financial
and operating performance of major customers and industries served;
the impact of information technology system failures, network
disruptions and breaches in data security; and the effectiveness
and speed of integrating new acquisitions into the business. These
risks and uncertainties may cause actual future results or
circumstances to differ materially from accounting principles
generally accepted in the United States of America, International
Financial Reporting Standards or adjusted projections, estimates or
other forward-looking statements.
Linde
plc assumes no obligation to update or provide revisions to any
forward-looking statement in response to changing circumstances.
The above listed risks and uncertainties are further described in
Item 1A. Risk Factors in Linde plc’s Form 10-K for the fiscal
year ended December 31, 2020 filed with the SEC on March 1,
2021 which should be reviewed carefully. Please consider Linde
plc’s forward-looking statements in light of those
risks.
Page
3/11
Press release
LINDE PLC AND SUBSIDIARIES
SUMMARY NON-GAAP RECONCILIATIONS
(UNAUDITED)
The following adjusted amounts are Non-GAAP measures and are
intended to supplement investors' understanding of the company's
financial statements by providing measures which investors,
financial analysts and management use to help evaluate the
company's operating performance. Items which the company does not
believe to be indicative of ongoing business trends are excluded
from these calculations so that investors can better evaluate and
analyze historical and future business trends on a consistent
basis. Definitions of these Non-GAAP measures may not be comparable
to similar definitions used by other companies and are not a
substitute for similar GAAP measures. See the "NON GAAP MEASURES AND
RECONCILIATIONS" starting on
page 9 for additional details relating to the
adjustments.
(Millions of dollars, except per share amounts)
|
|
Sales
|
Operating Profit
|
Income from Continuing Operations
|
Diluted EPS from Continuing Operations
|
||||
|
|
2021
|
2020
|
2021
|
2020
|
2021
|
2020
|
2021
|
2020
|
|
Quarter Ended March 31
|
|
|
|
|
|
|
|
|
|
Reported GAAP
Amounts
|
$7,243
|
$6,739
|
$1,213
|
$733
|
$979
|
$571
|
$1.86
|
$1.07
|
|
Cost reduction
program and other charges (a)
|
-
|
-
|
(8)
|
131
|
(28)
|
95
|
(0.05)
|
0.18
|
|
Purchase
accounting impacts - Linde AG (b)
|
-
|
-
|
483
|
488
|
361
|
343
|
0.68
|
0.64
|
|
Total
adjustments
|
-
|
-
|
475
|
619
|
333
|
438
|
0.63
|
0.82
|
|
Adjusted
amounts
|
$7,243
|
$6,739
|
$1,688
|
$1,352
|
$1,312
|
$1,009
|
$2.49
|
$1.89
|
(a) To adjust for cost reduction program and other charges; 2021
includes severance of $26 million for the quarter and other cost
reduction charges of $18 million more than offset by an other net
benefit of $52 million.
(b) To adjust for purchase accounting impacts related to the
merger.
Page
4/11
Press release
LINDE PLC AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(Millions of dollars, except per share data)
(UNAUDITED)
|
|
Quarter Ended
|
|
|
|
March 31,
|
|
|
|
2021
|
2020
|
|
|
|
|
|
SALES
|
$7,243
|
$6,739
|
|
Cost of
sales
|
4,054
|
3,843
|
|
Selling,
general and administrative
|
787
|
861
|
|
Depreciation
and amortization
|
1,166
|
1,142
|
|
Research and
development
|
35
|
44
|
|
Cost reduction
programs and other charges
|
(8)
|
131
|
|
Other income
(expense) - net
|
4
|
15
|
|
OPERATING PROFIT
|
1,213
|
733
|
|
Interest
expense - net
|
20
|
24
|
|
Net pension
and OPEB cost (benefit), excluding service cost
|
(49)
|
(45)
|
|
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND EQUITY
INVESTMENTS
|
1,242
|
754
|
|
Income
taxes
|
268
|
165
|
|
INCOME FROM CONTINUING OPERATIONS BEFORE EQUITY
INVESTMENTS
|
974
|
589
|
|
Income from
equity investments
|
43
|
17
|
|
INCOME FROM CONTINUING OPERATIONS (INCLUDING NONCONTROLLING
INTERESTS)
|
1,017
|
606
|
|
Add: income
from discontinued operations, net of tax
|
1
|
2
|
|
INCOME (INCLUDING NONCONTROLLING INTERESTS)
|
1,018
|
608
|
|
Less:
noncontrolling interests from continuing
operations
|
(38)
|
(35)
|
|
Less:
noncontrolling interests from discontinued
operations
|
-
|
-
|
|
NET INCOME - LINDE PLC
|
$980
|
$573
|
|
|
|
|
|
NET INCOME - LINDE PLC
|
|
|
|
Income from
continuing operations
|
$979
|
$571
|
|
Income from
discontinued operations
|
$1
|
$2
|
|
|
|
|
|
PER SHARE DATA - LINDE PLC SHAREHOLDERS
|
|
|
|
|
|
|
|
Basic earnings
per share from continuing operations
|
$1.87
|
$1.07
|
|
Basic earnings
per share from discontinued operations
|
-
|
-
|
|
Basic earnings
per share
|
$1.87
|
$1.07
|
|
|
|
|
|
Diluted
earnings per share from continuing operations
|
1.86
|
1.07
|
|
Diluted
earnings per share from discontinued operations
|
-
|
-
|
|
Diluted
earnings per share
|
$1.86
|
$1.07
|
|
|
|
|
|
Cash
dividends
|
$1.060
|
$0.963
|
|
|
|
|
|
WEIGHTED AVERAGE SHARES OUTSTANDING
|
|
|
|
Basic shares
outstanding (000's)
|
522,459
|
531,215
|
|
Diluted shares
outstanding (000's)
|
526,927
|
534,956
|
Note: See page 9 for a reconciliation to adjusted amounts which are
Non-GAAP.
Page
5/11
Press release
LINDE PLC AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(Millions of dollars)
(UNAUDITED)
|
|
March 31,
|
December 31,
|
|
|
2021
|
2020
|
|
ASSETS
|
|
|
|
Cash and cash
equivalents
|
$4,096
|
$3,754
|
|
Accounts
receivable - net
|
4,139
|
4,167
|
|
Contract
assets
|
137
|
162
|
|
Inventories
|
1,695
|
1,729
|
|
Prepaid and
other current assets
|
1,065
|
1,112
|
|
TOTAL CURRENT ASSETS
|
11,132
|
10,924
|
|
Property,
plant and equipment - net
|
26,934
|
28,711
|
|
Goodwill
|
27,472
|
28,201
|
|
Other
intangibles - net
|
14,559
|
16,184
|
|
Other
long-term assets
|
4,896
|
4,209
|
|
TOTAL ASSETS
|
$84,993
|
$88,229
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
Accounts
payable
|
$2,945
|
$3,095
|
|
Short-term
debt
|
3,276
|
3,251
|
|
Current
portion of long-term debt
|
2,524
|
751
|
|
Contract
liabilities
|
1,863
|
1,769
|
|
Other current
liabilities
|
4,419
|
4,874
|
|
TOTAL CURRENT LIABILITIES
|
15,027
|
13,740
|
|
Long-term
debt
|
9,950
|
12,152
|
|
Other
long-term liabilities
|
12,383
|
12,755
|
|
TOTAL LIABILITIES
|
37,360
|
38,647
|
|
|
|
|
|
REDEEMABLE NONCONTROLLING INTERESTS
|
13
|
13
|
|
|
|
|
|
LINDE PLC SHAREHOLDERS' EQUITY:
|
|
|
|
Common
stock
|
1
|
1
|
|
Additional
paid-in capital
|
40,192
|
40,202
|
|
Retained
earnings
|
17,563
|
17,178
|
|
Accumulated
other comprehensive income (loss)
|
(5,345)
|
(4,690)
|
|
Less: Treasury
stock, at cost
|
(6,201)
|
(5,374)
|
|
Total Linde
plc shareholders' equity
|
46,210
|
47,317
|
|
Noncontrolling
interests
|
1,410
|
2,252
|
|
TOTAL EQUITY
|
47,620
|
49,569
|
|
TOTAL LIABILITIES AND EQUITY
|
$84,993
|
$88,229
|
Page
6/11
Press release
LINDE PLC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Millions of dollars)
(UNAUDITED)
|
|
Quarter Ended
|
|
|
|
March 31,
|
|
|
|
2021
|
2020
|
|
OPERATIONS
|
|
|
|
Net income -
Linde plc
|
$980
|
$573
|
|
Less: income
from discontinued operations, net of tax and noncontrolling
interests
|
(1)
|
(2)
|
|
Add:
noncontrolling interests
|
38
|
35
|
|
Net income
(including noncontrolling interests)
|
1,017
|
606
|
|
|
|
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Cost reduction
programs and other charges, net of payments (a)
|
(76)
|
40
|
|
Depreciation
and amortization
|
1,166
|
1,142
|
|
Accounts
receivable
|
(178)
|
(109)
|
|
Contract
assets and liabilities, net
|
191
|
176
|
|
Inventory
|
(60)
|
(62)
|
|
Payables and
accruals
|
69
|
(183)
|
|
Pension
contributions
|
(12)
|
(17)
|
|
Deferred
income taxes and other
|
(8)
|
(246)
|
|
Net cash
provided by operating activities
|
2,109
|
1,347
|
|
|
|
|
|
INVESTING
|
|
|
|
Capital
expenditures
|
(762)
|
(803)
|
|
Acquisitions,
net of cash acquired
|
(10)
|
(41)
|
|
Divestitures
and asset sales
|
21
|
231
|
|
Net cash
provided by (used for) investing activities
|
(751)
|
(613)
|
|
|
|
|
|
FINANCING
|
|
|
|
Debt increase
(decrease) - net
|
681
|
3,112
|
|
Issuances of
ordinary shares
|
17
|
13
|
|
Purchases of
ordinary shares
|
(868)
|
(1,828)
|
|
Cash dividends
- Linde plc shareholders
|
(553)
|
(511)
|
|
Noncontrolling
interest transactions and other
|
(247)
|
(27)
|
|
Net cash
provided by (used for) financing activities
|
(970)
|
759
|
|
|
|
|
|
Effect of
exchange rate changes on cash and cash
equivalents
|
(46)
|
(179)
|
|
|
|
|
|
Change in cash
and cash equivalents
|
342
|
1,314
|
|
Cash and cash
equivalents, beginning-of-period
|
3,754
|
2,700
|
|
Cash and cash
equivalents, end-of-period
|
$4,096
|
$4,014
|
(a)
Cost reduction programs and other charges was a net benefit of $8
million and a charge of $131 million for the quarters ended March
31, 2021 and 2020, respectively. Related cash outflows were $68
million and $91 million for the same respective
periods.
Page
7/11
Press release
LINDE PLC AND SUBSIDIARIES
SEGMENT INFORMATION
(Millions of dollars)
(UNAUDITED)
|
|
Quarter Ended March 31,
|
|
|
|
2021
|
2020
|
|
SALES
|
|
|
|
Americas
|
$2,840
|
$2,677
|
|
EMEA
|
1,799
|
1,633
|
|
APAC
|
1,436
|
1,336
|
|
Engineering
|
674
|
608
|
|
Other
|
494
|
485
|
|
Total segment
sales
|
$7,243
|
$6,739
|
|
|
|
|
|
|
|
|
|
OPERATING PROFIT
|
|
|
|
Americas
|
$795
|
$661
|
|
EMEA
|
451
|
355
|
|
APAC
|
351
|
281
|
|
Engineering
|
109
|
91
|
|
Other
|
(18)
|
(36)
|
|
Segment
operating profit
|
$1,688
|
$1,352
|
|
Cost reduction
programs and other charges
|
8
|
(131)
|
|
Purchase
accounting impacts - Linde AG
|
(483)
|
(488)
|
|
Total
operating profit
|
$1,213
|
$733
|
Page
8/11
Press release
LINDE PLC AND SUBSIDIARIES
APPENDIX
NON-GAAP MEASURES AND RECONCILIATIONS
(Millions of dollars, except per share data)
(UNAUDITED)
The following Non-GAAP measures are intended to supplement
investors’ understanding of the company’s financial
information by providing measures which investors, financial
analysts and management use to help evaluate the company’s
operating performance and liquidity. Items which the company does
not believe to be indicative of on-going business trends are
excluded from these calculations so that investors can better
evaluate and analyze historical and future business trends on a
consistent basis. Definitions of these Non-GAAP measures may not be
comparable to similar definitions used by other companies and are
not a substitute for similar GAAP measures.
|
|
2021
|
2020
|
|||
|
|
Q1
|
Q4
|
Q3
|
Q2
|
Q1
|
|
Adjusted Operating Profit and Operating Margin
|
|
|
|
|
|
|
Reported
operating profit
|
$1,213
|
$1,029
|
$969
|
$591
|
$733
|
|
Add: Cost
reduction programs and other charges
|
(8)
|
78
|
48
|
249
|
131
|
|
Less: Net gain
on sale of businesses
|
-
|
-
|
-
|
-
|
-
|
|
Add: Purchase
accounting impacts - Linde AG (c)
|
483
|
506
|
498
|
477
|
488
|
|
Total
adjustments
|
475
|
584
|
546
|
726
|
619
|
|
Adjusted
operating profit
|
$1,688
|
$1,613
|
$1,515
|
$1,317
|
$1,352
|
|
|
|
|
|
|
|
|
Reported
percentage change
|
65%
|
|
|
|
20%
|
|
Adjusted
percentage change
|
25%
|
|
|
|
11%
|
|
|
|
|
|
|
|
|
Reported
sales
|
$7,243
|
$7,272
|
$6,855
|
$6,377
|
$6,739
|
|
|
|
|
|
|
|
|
Reported
operating margin
|
16.7%
|
14.2%
|
14.1%
|
9.3%
|
10.9%
|
|
Adjusted
operating margin
|
23.3%
|
22.2%
|
22.1%
|
20.7%
|
20.1%
|
|
|
|
|
|
|
|
|
Adjusted Depreciation and amortization
|
|
|
|
|
|
|
Reported
depreciation and amortization
|
$1,166
|
$1,192
|
$1,168
|
$1,124
|
$1,142
|
|
Less: Purchase
accounting impacts - Linde AG (c)
|
(478)
|
(489)
|
(487)
|
(468)
|
(476)
|
|
Adjusted
depreciation and amortization
|
$688
|
$703
|
$681
|
$656
|
$666
|
|
|
|
|
|
|
|
|
Adjusted Other Income (Expense) - net
|
|
|
|
|
|
|
Reported Other
Income (Expense) - net
|
$4
|
$(47)
|
$(29)
|
$-
|
$15
|
|
Add: Purchase
accounting impacts - Linde AG (c)
|
(5)
|
(17)
|
(11)
|
(9)
|
(12)
|
|
Adjusted Other
Income (Expense) - net
|
$9
|
$(30)
|
$(18)
|
$9
|
$27
|
|
|
|
|
|
|
|
|
Adjusted Net Pension and OPEB Cost (Benefit), Excluding Service
Cost
|
|
|
|
|
|
|
Reported net
pension and OPEB cost (benefit), excluding service
cost
|
$(49)
|
$(46)
|
$(41)
|
$(45)
|
$(45)
|
|
Add: Pension
settlement charges
|
-
|
-
|
(6)
|
-
|
-
|
|
Adjusted Net
Pension and OPEB cost (benefit), excluding service
costs
|
$(49)
|
$(46)
|
$(47)
|
$(45)
|
$(45)
|
|
|
|
|
|
|
|
|
Adjusted Interest Expense - Net
|
|
|
|
|
|
|
Reported
interest expense - net
|
$20
|
$35
|
$38
|
$18
|
$24
|
|
Add: Purchase
accounting impacts - Linde AG (c)
|
18
|
18
|
23
|
22
|
22
|
|
Less: Bond
Redemption
|
-
|
(16)
|
-
|
-
|
-
|
|
Total
adjustments
|
18
|
2
|
23
|
22
|
22
|
|
Adjusted
interest expense - net
|
$38
|
$37
|
$61
|
$40
|
$46
|
|
|
|
|
|
|
|
|
Adjusted Income Taxes (a)
|
|
|
|
|
|
|
Reported
income taxes
|
$268
|
$253
|
$265
|
$164
|
$165
|
|
Add: Purchase
accounting impacts - Linde AG (c)
|
118
|
107
|
75
|
95
|
122
|
|
Add: Pension
settlement charges
|
-
|
-
|
1
|
-
|
-
|
|
Add: Cost
reduction programs and other charges
|
20
|
20
|
12
|
62
|
36
|
|
Less: Bond
Redemption
|
-
|
4
|
-
|
-
|
-
|
|
Total
adjustments
|
138
|
131
|
88
|
157
|
158
|
|
Adjusted
income taxes
|
$406
|
$384
|
$353
|
$321
|
$323
|
|
|
|
|
|
|
|
|
Adjusted Effective Tax Rate (a)
|
|
|
|
|
|
|
Reported
income before income taxes and equity
investments
|
$1,242
|
$1,040
|
$972
|
$618
|
$754
|
|
Add: Pension
settlement charge
|
-
|
-
|
6
|
-
|
-
|
|
Add: Purchase
accounting impacts - Linde AG (c)
|
465
|
488
|
475
|
455
|
466
|
|
Add: Cost
reduction programs and other charges
|
(8)
|
78
|
48
|
249
|
131
|
|
Less: Bond
Redemption
|
-
|
16
|
-
|
-
|
-
|
|
Total
adjustments
|
457
|
582
|
529
|
704
|
597
|
|
Adjusted
income before income taxes and equity
investments
|
$1,699
|
$1,622
|
$1,501
|
$1,322
|
$1,351
|
|
|
|
|
|
|
|
|
Reported
Income taxes
|
$268
|
$253
|
$265
|
$164
|
$165
|
|
Reported
effective tax rate
|
21.6%
|
24.3%
|
27.3%
|
26.5%
|
21.9%
|
|
|
|
|
|
|
|
|
Adjusted
income taxes
|
$406
|
$384
|
$353
|
$321
|
$323
|
|
Adjusted
effective tax rate
|
23.9%
|
23.7%
|
23.5%
|
24.3%
|
23.9%
|
|
|
|
|
|
|
|
|
Income from Equity Investments
|
|
|
|
|
|
|
Reported
income from equity investments
|
$43
|
$16
|
$23
|
$29
|
$17
|
|
Add: Purchase
accounting impacts - Linde AG (c)
|
19
|
15
|
14
|
14
|
14
|
|
Adjusted
income from equity investments
|
$62
|
$31
|
$37
|
$43
|
$31
|
Page
9/11
Press release
LINDE PLC AND SUBSIDIARIES
APPENDIX
NON-GAAP MEASURES AND RECONCILIATIONS
(Millions of dollars, except per share data)
(UNAUDITED)
|
|
2021
|
2020
|
|||
|
|
Q1
|
Q4
|
Q3
|
Q2
|
Q1
|
|
Adjusted Noncontrolling Interests from Continuing
Operations
|
|
|
|
|
|
|
Reported
noncontrolling interests from continuing
operations
|
$(38)
|
$(34)
|
$(31)
|
$(25)
|
$(35)
|
|
Add: Cost
reduction programs and other charges
|
-
|
(4)
|
-
|
-
|
-
|
|
Add: Purchase
accounting impacts - Linde AG (c)
|
(5)
|
(14)
|
(14)
|
(14)
|
(15)
|
|
Total
adjustments
|
(5)
|
(18)
|
(14)
|
(14)
|
(15)
|
|
Adjusted
noncontrolling interests from continuing
operations
|
$(43)
|
$(52)
|
$(45)
|
$(39)
|
$(50)
|
|
|
|
|
|
|
|
|
Adjusted Income from Continuing Operations (b)
|
|
|
|
|
|
|
Reported
income from continuing operations
|
$979
|
$769
|
$699
|
$458
|
$571
|
|
Add: Pension
settlement charge
|
-
|
-
|
5
|
-
|
-
|
|
Add: Cost
reduction programs and other charges
|
(28)
|
54
|
36
|
187
|
95
|
|
Less: Bond
redemption
|
-
|
12
|
-
|
-
|
-
|
|
Add: Purchase
accounting impacts - Linde AG (c)
|
361
|
382
|
400
|
360
|
343
|
|
Total
adjustments
|
333
|
448
|
441
|
547
|
438
|
|
Adjusted
income from continuing operations
|
$1,312
|
$1,217
|
$1,140
|
$1,005
|
$1,009
|
|
|
|
|
|
|
|
|
Adjusted Diluted EPS from Continuing Operations
(b)
|
|
|
|
|
|
|
Reported
diluted EPS from continuing operations
|
$1.86
|
$1.45
|
$1.32
|
$0.87
|
$1.07
|
|
Add: Pension
settlement charge
|
-
|
-
|
0.01
|
-
|
-
|
|
Add: Cost
reduction programs and other charges
|
(0.05)
|
0.10
|
0.07
|
0.35
|
0.18
|
|
Less: Bond
Redemption
|
-
|
0.02
|
-
|
-
|
-
|
|
Add: Purchase
accounting impacts - Linde AG
|
0.68
|
0.73
|
0.75
|
0.68
|
0.64
|
|
Total
adjustments
|
0.63
|
0.85
|
0.83
|
1.03
|
0.82
|
|
Adjusted
diluted EPS from continuing operations
|
$2.49
|
$2.30
|
$2.15
|
$1.90
|
$1.89
|
|
|
|
|
|
|
|
|
Reported
percentage change
|
74%
|
54%
|
(1)%
|
(7)%
|
35%
|
|
Adjusted
percentage change
|
32%
|
22%
|
11%
|
4%
|
12%
|
|
Adjusted Diluted EPS from Continuing Operations Guidance
(d)
|
Second Quarter 2021
|
Full Year 2021
|
|
||
|
|
Low End
|
High End
|
Low End
|
High End
|
|
|
2021 Adjusted
Guidance
|
$2.50
|
$2.55
|
$9.60
|
$9.80
|
|
|
Adjusted
percentage changes versus 2020 adjusted diluted
EPS
|
32%
|
34%
|
17%
|
19%
|
|
|
Add: Estimated
currency headwind/(tailwind)
|
(4)%
|
(4)%
|
(2)%
|
(2)%
|
|
|
Adjusted
percentage change excluding currency
|
28%
|
30%
|
15%
|
17%
|
|
|
Adjusted EBITDA and % of Sales
|
|
|
|
|
|
|
Income from
continuing operations
|
$979
|
$769
|
$699
|
$458
|
$571
|
|
Add:
Noncontrolling interests related to continuing
operations
|
38
|
34
|
31
|
25
|
35
|
|
Add: Net
pension and OPEB cost (benefit), excluding service
cost
|
(49)
|
(46)
|
(41)
|
(45)
|
(45)
|
|
Add: Interest
expense
|
20
|
35
|
38
|
18
|
24
|
|
Add: Income
taxes
|
268
|
253
|
265
|
164
|
165
|
|
Add:
Depreciation and amortization
|
1,166
|
1,192
|
1,168
|
1,124
|
1,142
|
|
EBITDA from
continuing operations
|
2,422
|
2,237
|
2,160
|
1,744
|
1,892
|
|
Add: Cost
reduction programs and other charges
|
(8)
|
78
|
48
|
249
|
131
|
|
Add: Purchase
accounting impacts - Linde AG
|
24
|
32
|
25
|
23
|
26
|
|
Total
adjustments
|
16
|
110
|
73
|
272
|
157
|
|
Adjusted
EBITDA from continuing operations
|
$2,438
|
$2,347
|
$2,233
|
$2,016
|
$2,049
|
|
|
|
|
|
|
|
|
Reported
sales
|
$7,243
|
$7,272
|
$6,855
|
$6,377
|
$6,739
|
|
% of
sales
|
|
|
|
|
|
|
EBITDA from
continuing operations
|
33.4%
|
30.8%
|
31.5%
|
27.3%
|
28.1%
|
|
Adjusted
EBITDA from continuing operations
|
33.7%
|
32.3%
|
32.6%
|
31.6%
|
30.4%
|
(a) The income tax expense (benefit) on the non-GAAP pre-tax
adjustments was determined using the applicable tax rates for the
jurisdictions that were utilized in calculating the GAAP income tax
expense (benefit) and included both current and deferred income tax
amounts.
(b) Net of income taxes which are shown separately in
“Adjusted Income Taxes and Effective Tax
Rate”.
(c) The company believes that its non-GAAP measures excluding
Purchase accounting impacts - Linde AG are useful to investors
because: (i) the business combination was a merger of equals in an
all-stock merger transaction, with no cash consideration, (ii) the
company is managed on a geographic basis and the results of certain
geographies are more heavily impacted by purchase accounting than
others, causing results that are not comparable at the reportable
segment level, therefore, the impacts of purchasing accounting
adjustments to each segment vary and are not comparable within the
company and when compared to other companies in similar regions,
(iii) business management is evaluated and variable compensation is
determined based on results excluding purchase accounting impacts,
and; (iv) it is important to investors and analysts to understand
the purchase accounting impacts to the financial
statements.
A summary of each of the adjustments made for Purchase accounting
impacts - Linde AG are as follows:
Adjusted Operating Profit and Margin: The purchase accounting adjustments for the
periods presented relate primarily to depreciation and amortization
related to the fair value step up of fixed assets and intangible
assets (primarily customer related) acquired in the
merger.
Adjusted Interest Expense - Net: Relates to the amortization of the fair value of
debt acquired in the merger.
Adjusted Income Taxes and Effective Tax Rate: Relates to the current and deferred income tax
impact on the adjustments discussed above. The income tax expense
(benefit) on the non-GAAP pre-tax adjustments was determined using
the applicable tax rates for the jurisdictions that were utilized
in calculating the GAAP income tax expense (benefit) and included
both current and deferred income tax amounts.
Adjusted Income from Equity Investments: Represents the amortization of increased fair
value on equity investments related to depreciable and amortizable
assets.
Adjusted Noncontrolling Interests from Continuing
Operations: Represents the
noncontrolling interests’ ownership portion of the
adjustments described above determined on an entity by entity
basis.
(d) We are providing adjusted earnings per share ("EPS") guidance
for 2021. This is a non-GAAP financial measure that represents
diluted earnings per share from continuing operations (a GAAP
measure) but excludes the impact of certain items that we believe
are not representative of our underlying business performance, such
as cost reduction and other charges, the impact of potential
divestitures or other potentially significant items. Given the
uncertainty of timing and magnitude of such items, we cannot
provide a reconciliation of the differences between the non-GAAP
adjusted EPS guidance and the corresponding GAAP EPS measure
without unreasonable effort.
Page
10/11
LINDE PLC AND SUBSIDIARIES
APPENDIX
NON-GAAP MEASURES AND RECONCILIATIONS
(Millions of dollars)
(UNAUDITED)
|
|
2021
|
2020
|
2019
|
||||||
|
Q1
|
Q4
|
Q3
|
Q2
|
Q1
|
Q4
|
Q3
|
Q2
|
Q1
|
|
|
|
|||||||||
Free Cash Flow (FCF) - Free
cash flow is a measure used by investors, financial analysts and
management to evaluate the ability of a company to pursue
opportunities that enhance shareholder value. FCF equals cash flow
from operations less capital expenditures.
|
Operating Cash
Flow
|
$2,109
|
$2,434
|
$1,884
|
$1,764
|
$1,347
|
$2,174
|
$1,872
|
$1,005
|
$1,068
|
|
Less: Capital
Expenditures
|
(762)
|
(1,027)
|
(787)
|
(783)
|
(803)
|
(1,015)
|
(959)
|
(865)
|
(843)
|
|
Free Cash Flow
|
$1,347
|
$1,407
|
$1,097
|
$981
|
$544
|
$1,159
|
$913
|
$140
|
$225
|
Net Debt - Net debt is a
financial liquidity metric used by investors, financial analysts
and management to evaluate the ability of a company to repay its
debt and is calculated as total debt (excluding purchase accounting
impacts) less liquid assets.
|
Debt
|
$15,750
|
$16,154
|
$17,803
|
$17,480
|
$16,875
|
$13,956
|
$13,201
|
$13,957
|
$14,146
|
|
Less: Cash and
cash equivalents
|
(4,096)
|
(3,754)
|
(5,199)
|
(4,941)
|
(4,014)
|
(2,700)
|
(2,120)
|
(2,686)
|
(5,791)
|
|
Net
debt
|
11,654
|
12,400
|
12,604
|
12,539
|
12,861
|
11,256
|
11,081
|
11,271
|
8,355
|
|
Less: Purchase
accounting impacts - Linde AG
|
(98)
|
(121)
|
(133)
|
(150)
|
(170)
|
(195)
|
(211)
|
(243)
|
(262)
|
|
Adjusted net
debt
|
$11,556
|
$12,279
|
$12,471
|
$12,389
|
$12,691
|
$11,061
|
$10,870
|
$11,028
|
$8,093
|
|
Less: Net
assets held for sale
|
(4)
|
(3)
|
(2)
|
(2)
|
(115)
|
(123)
|
(223)
|
(272)
|
(1,629)
|
|
Adjusted net
debt less net assets held for sale
|
$11,552
|
$12,276
|
$12,469
|
$12,387
|
$12,576
|
$10,938
|
$10,647
|
$10,756
|
$6,464
|
After-tax Return on Capital and Adjusted After-tax Return on
Capital (ROC) - After-tax
return on capital is a measure used by investors, financial
analysts and management to evaluate the return on net assets
employed in the business. ROC measures the after-tax operating
profit that the company was able to generate with the investments
made by all parties in the business (debt, noncontrolling interests
and Linde plc shareholders’ equity).
|
Reported
income from continuing operations
|
$979
|
$769
|
$699
|
$458
|
$571
|
$507
|
$728
|
$513
|
$435
|
|
Add:
noncontrolling interests from continuing
operations
|
38
|
34
|
31
|
25
|
35
|
27
|
3
|
29
|
30
|
|
Add: interest
expense - net
|
20
|
35
|
38
|
18
|
24
|
8
|
(3)
|
10
|
23
|
|
Less: tax
benefit on interest expense - net *
|
(5)
|
(9)
|
(10)
|
(5)
|
(6)
|
(2)
|
1
|
(3)
|
(6)
|
|
Reported NOPAT
|
$1,032
|
$829
|
$758
|
$496
|
$624
|
$540
|
$729
|
$549
|
$482
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
income from continuing operations
|
$1,312
|
$1,217
|
$1,140
|
$1,005
|
$1,009
|
$1,024
|
$1,052
|
$1,000
|
$927
|
|
Add: adjusted
noncontrolling interests from continuing
operations
|
43
|
52
|
45
|
39
|
50
|
41
|
46
|
46
|
45
|
|
Add: adjusted
interest expense - net
|
38
|
37
|
61
|
40
|
46
|
30
|
19
|
35
|
50
|
|
Less: tax
benefit on interest expense - net *
|
(10)
|
(9)
|
(15)
|
(10)
|
(12)
|
(7)
|
(5)
|
(9)
|
(13)
|
|
Adjusted NOPAT
|
$1,383
|
$1,297
|
$1,231
|
$1,074
|
$1,093
|
$1,088
|
$1,112
|
$1,072
|
$1,009
|
|
4-quarter
trailing reported NOPAT
|
$3,115
|
$2,707
|
$2,418
|
$2,389
|
$2,442
|
$2,300
|
|
|
|
|
4-quarter
trailing adjusted NOPAT
|
$4,985
|
$4,695
|
$4,486
|
$4,367
|
$4,365
|
$4,281
|
|
|
|
|
Equity and
redeemable noncontrolling interests:
|
|
|
|
|
|
|
|
|
|
|
Redeemable
noncontrolling interests
|
$13
|
$13
|
$13
|
$13
|
$92
|
$113
|
$14
|
$15
|
$15
|
|
Linde plc
shareholders' equity
|
46,210
|
47,317
|
46,175
|
45,537
|
44,776
|
49,074
|
48,953
|
50,564
|
51,175
|
|
Noncontrolling
interests
|
1,410
|
2,252
|
2,404
|
2,387
|
2,375
|
2,448
|
2,341
|
2,315
|
5,457
|
|
Total equity
and redeemable noncontrolling interests
|
$47,633
|
$49,582
|
$48,592
|
$47,937
|
$47,243
|
$51,635
|
$51,308
|
$52,894
|
$56,647
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
capital
|
$59,283
|
$61,979
|
$61,194
|
$60,474
|
$59,989
|
$62,768
|
$62,166
|
$63,893
|
$63,373
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity
and redeemable noncontrolling interests
|
$47,633
|
$49,582
|
$48,592
|
$47,937
|
$47,243
|
$51,635
|
$51,308
|
$52,894
|
$56,647
|
|
Add: Adjusted
net debt less net assets held for sale
|
11,552
|
12,276
|
12,469
|
12,387
|
12,576
|
10,938
|
10,647
|
10,756
|
6,464
|
|
Less: Linde AG
Goodwill (a)
|
24,256
|
24,256
|
24,256
|
24,256
|
24,256
|
24,256
|
24,197
|
24,197
|
24,197
|
|
Less: Linde AG
Indefinite lived intangibles (a)
|
1,868
|
1,868
|
1,868
|
1,868
|
1,868
|
1,868
|
1,868
|
1,868
|
1,868
|
|
Adjusted
capital
|
$33,061
|
$35,734
|
$34,937
|
$34,200
|
$33,695
|
$36,449
|
$35,890
|
$37,585
|
$37,046
|
(a)
Represent opening balance sheet purchase accounting impacts of
non-amortizing assets related to the Linde AG merger.
|
Ending capital
(see above)
|
$59,283
|
$61,979
|
$61,194
|
$60,474
|
$59,989
|
|
|
|
|
|
5-quarter
average ending capital
|
$60,584
|
$61,281
|
$61,318
|
$61,858
|
$62,438
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending
adjusted capital (see above)
|
$33,061
|
$35,734
|
$34,937
|
$34,200
|
$33,695
|
|
|
|
|
|
5-quarter
average ending adjusted capital
|
$34,325
|
$35,003
|
$35,034
|
$35,564
|
$36,133
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
After-tax ROC (4 quarter reported NOPAT / 5-quarter average ending
capital)
|
5.1%
|
4.4%
|
3.9%
|
3.9%
|
3.9%
|
|
|
|
|
|
Adjusted after-tax ROC (4 quarter trailing adjusted NOPAT /
5-quarter average ending adjusted capital)
|
14.5%
|
13.4%
|
12.8%
|
12.3%
|
12.1%
|
|
|
|
|
*
Tax
benefit on interest expense - net is generally presented using the
reported effective rate.
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