UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (Date of earliest event reported): October 26, 2023
Linde plc |
(Exact name of registrant as specified in its charter) |
Ireland |
001-38730 |
98-1448883 |
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(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
10 Riverview Dr. Danbury, Connecticut United States 06810 |
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Forge 43 Church Street West Woking, Surrey GU21 6HT United Kingdom |
(Address of principal executive offices) (Zip Code)
+44 1483 242200
(Registrant’s telephone numbers, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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☐ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading symbol(s) |
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Name of each exchange on which registered |
Ordinary shares (€0.001 nominal value per share) |
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LIN |
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New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
ITEM 2.02 Results of Operations and Financial Condition
On October 26, 2023, Linde plc (the “Company”) issued a press release setting forth Linde plc’s results of operations for the quarter ended September 30, 2023. A copy of Linde plc’s press release is furnished herewith as Exhibit 99.1 and is hereby incorporated by reference in this Item 2.02.
ITEM 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.
On October 26, 2023, the Company, acting pursuant to authorization from its Board of Directors, notified the New York Stock Exchange (the “NYSE”) of the Company’s intention to voluntarily withdraw the listing of its Ordinary Shares (€0.001 nominal value per share) (the “Ordinary Shares”) from the NYSE and transfer the listing to The Nasdaq Stock Market LLC (“Nasdaq”), effective November 7, 2023. The Company expects that the listing and trading of its Ordinary Shares on the NYSE will end at market close on November 6, 2023, and that trading will begin on Nasdaq at market open on November 7, 2023. The Ordinary Shares have been approved for listing on Nasdaq, where they will continue to trade under the symbol “LIN.”
ITEM 7.01 Regulation FD Disclosure
The Company’s press release, furnished herewith as Exhibit 99.1, sets forth information about the transfer of the listing of the Ordinary Shares to Nasdaq.
The information in Item 7.01 of this Current Report on Form 8-K is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be deemed incorporated by reference into any filing made under the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise expressly stated in such filing.
ITEM 9.01. Financial Statements and Exhibits.
(d) Exhibits. The following exhibit is furnished herewith pursuant to Item 2.02 and Item 7.01 hereof:
Exhibit No. |
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Description |
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104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
2 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
LINDE PLC |
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By: |
/s/ Kelcey E. Hoyt |
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Name: |
Kelcey E. Hoyt |
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Title: |
Principal Accounting Officer |
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Date: October 26, 2023
3 |
EXHIBIT 99.1
Making our world more productive |
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Linde Reports Third Quarter 2023 Results
Third Quarter Highlights
| ➢ | Sales $8.2 billion, down 7% YoY, underlying sales up 3% |
| ➢ | Operating profit $2.1 billion; adjusted operating profit $2.3 billion, up 15% |
| ➢ | Operating profit margin 25.2%; adjusted operating profit margin 28.3%, up 550 basis points |
| ➢ | EPS $3.19 up 26%; adjusted EPS $3.63, up 17% YoY |
| ➢ | Increased full-year 2023 adjusted EPS guidance to $14.00 - $14.10, representing 14% to 15% growth year-over-year |
Woking, UK, October 26, 2023 – Linde plc (NYSE: LIN) today reported third-quarter 2023 net income of $1,565 million and diluted earnings per share of $3.19, up 23% and 26% respectively. Excluding Linde AG purchase accounting impacts and other charges, adjusted net income was $1,783 million, up 15% versus prior year. Adjusted earnings per share was $3.63, 17% above prior year.
Linde’s sales for the third quarter were $8,155 million, 7% below prior year but underlying sales increased 3% from 5% price attainment partially offset by 2% lower volumes.
Third quarter operating profit was $2,052 million. Adjusted operating profit of $2,306 million was up 15% versus prior year led by higher price and continued productivity initiatives across all segments. Adjusted operating profit margin of 28.3% was 550 basis points above prior year and 400 basis points higher when excluding the effects of cost pass-through.
Third-quarter operating cash flow of $2,520 million decreased 4% versus prior year driven primarily by lower engineering payments. After capital expenditures of $948 million, free cash flow was $1,572 million. During the quarter, the company returned $1,774 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, “Linde employees delivered another quarter of strong results, with EPS growth of 17%, ROC of 25.6%, OCF of $2.5 billion and operating margin expansion of 550 basis points to 28.3%. This performance is driven by our relentless culture to optimize the base business while increasing network density and deploying capital to high-quality growth initiatives.”
Lamba continued, “We have a proven track record of creating long-term, compounding shareholder value despite macro challenges.”
For the fourth quarter of 2023, Linde expects adjusted diluted earnings per share in the range of $3.38 to $3.48, up 7% to 10% versus prior-year quarter. This guidance assumes a currency tailwind of 1% year-over-year and a 2% headwind sequentially.
For the full year 2023, the company expects adjusted diluted earnings per share to be in the range of $14.00 to $14.10, up 14% to 15% versus prior year and assumes no currency impact. Full-year capital expenditures are expected to be in the range of $3.5 billion to $4.0 billion to support growth and maintenance requirements including the $4.5 billion contractual sale of gas project backlog.
Page 1 of 14 |
Making our world more productive |
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Third-Quarter 2023 Results by Segment
Americas sales of $3,629 million were 2% lower versus prior year. Compared with third quarter 2022, underlying sales increased 3% driven by 5% higher pricing, partially offset by 2% lower volumes. Underlying sales growth was primarily in the healthcare, food & beverage and chemicals & energy end markets. Operating profit of $1,074 million was 29.6% of sales, 320 basis points above prior year and 90 basis points higher when excluding the effects of cost pass-through.
APAC (Asia Pacific) sales of $1,639 million were 1% lower versus prior year. Compared with third quarter 2022, underlying sales grew 3% driven by 3% price attainment and stable volumes. Underlying sales growth was primarily in the chemicals & energy end markets, including project start-ups, and to a lesser extent the healthcare and manufacturing end markets. Operating profit of $459 million was 28.0% of sales, 220 basis points above prior year. Year over year cost pass-through was immaterial.
EMEA (Europe, Middle East & Africa) sales of $2,105 million were down 1% versus prior year. Compared with third quarter 2022, underlying sales grew 2%, driven by 6% higher pricing partially offset by 4% lower volumes. Operating profit of $634 million was 30.1% of sales, 820 basis points above prior year and 600 basis points higher when excluding the effects of cost pass-through.
Linde Engineering sales were $467 million, 44% below prior year, and operating profit was $116 million or 24.8% of sales. Order intake for the quarter was $633 million and third-party sale of equipment backlog was $3.6 billion.
Earnings Call
A teleconference on Linde’s third quarter 2023 results is being held today at 9:00 am EDT.
Live conference call | US Toll-Free Dial-In Number: 1 888 770 7292 Germany Toll-Free Dial-In Number: 0800 000 0105 UK Toll-Free Dial-In Number: 0800 358 0970 Access code: 6877110 |
Live webcast (listen-only) | https://investors.linde.com/events-presentations |
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 2022 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 14 |
Making our world more productive |
NON-GAAP Financial Measures
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 2023. 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, any impairment or other charges related to scaling back operations in Russia as actions are defined and executed and as sanctions impact the Company’s operations, 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.
Transfer of Stock Exchange Listing
Linde (NYSE: LIN) intends to transfer the listing of its ordinary shares from the New York Stock Exchange (NYSE) to the Nasdaq Stock Market (Nasdaq) on November 6,2023 after market close. Linde expects to commence trading as a Nasdaq-listed company upon market open on November 7, 2023 and will continue trading under the ticker symbol "LIN". The transfer to Nasdaq provides Linde with Nasdaq index inclusion opportunities in addition to certain cost savings.
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, 2022 filed with the SEC on February 28, 2023 which should be reviewed carefully. Please consider Linde plc’s forward-looking statements in light of those risks.
Page 3 of 14 |
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 |
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| Operating Profit |
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| Net Income |
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| Diluted EPS |
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Quarter Ended September 30 |
| 2023 |
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| 2022 |
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| 2023 |
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| 2022 |
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| 2023 |
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| 2022 |
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| 2023 |
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| 2022 |
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Reported GAAP Amounts |
| $ | 8,155 |
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| $ | 8,797 |
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| $ | 2,052 |
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| $ | 1,613 |
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| $ | 1,565 |
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| $ | 1,273 |
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| $ | 3.19 |
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| $ | 2.54 |
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Other charges (a) |
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| — |
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| — |
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| 2 |
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| 15 |
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| 2 |
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| (11 | ) |
|
| — |
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|
| (0.02 | ) |
Pension settlement charges (b) |
|
| — |
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| — |
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|
| — |
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|
| — |
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|
| 10 |
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| 5 |
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|
| 0.02 |
|
|
| 0.01 |
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Purchase accounting impacts - Linde AG (c) |
|
| — |
|
|
| — |
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|
| 252 |
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|
| 382 |
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|
| 206 |
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|
| 288 |
|
|
| 0.42 |
|
|
| 0.57 |
|
Total adjustments |
|
| — |
|
|
| — |
|
|
| 254 |
|
|
| 397 |
|
|
| 218 |
|
|
| 282 |
|
|
| 0.44 |
|
|
| 0.56 |
|
Adjusted amounts |
| $ | 8,155 |
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| $ | 8,797 |
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| $ | 2,306 |
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| $ | 2,010 |
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| $ | 1,783 |
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| $ | 1,555 |
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| $ | 3.63 |
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| $ | 3.10 |
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(Millions of dollars, except per share amounts) |
| Sales |
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| Operating Profit |
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| Net Income |
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| Diluted EPS |
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Year to Date September 30 |
| 2023 |
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| 2022 |
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| 2023 |
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| 2022 |
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| 2023 |
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| 2022 |
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| 2023 |
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| 2022 |
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Reported GAAP Amounts |
| $ | 24,552 |
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| $ | 25,465 |
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| $ | 5,996 |
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| $ | 3,682 |
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| $ | 4,656 |
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| $ | 2,819 |
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| $ | 9.43 |
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| $ | 5.57 |
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Other charges (a) |
|
| — |
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| — |
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| 42 |
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| 1,004 |
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| (37 | ) |
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| 877 |
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| (0.07 | ) |
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| 1.73 |
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Pension settlement charges (b) |
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| — |
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| — |
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| — |
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| — |
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|
| 10 |
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| 5 |
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| 0.02 |
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| 0.01 |
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Purchase accounting impacts - Linde AG (c) |
|
| — |
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| — |
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|
| 760 |
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| 1,217 |
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| 607 |
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| 920 |
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| 1.23 |
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| 1.82 |
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Total adjustments |
|
| — |
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| — |
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|
| 802 |
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| 2,221 |
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| 580 |
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| 1,802 |
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| 1.18 |
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| 3.56 |
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Adjusted amounts |
| $ | 24,552 |
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| $ | 25,465 |
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| $ | 6,798 |
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| $ | 5,903 |
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| $ | 5,236 |
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| $ | 4,621 |
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| $ | 10.61 |
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| $ | 9.13 |
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(a) 2023 year to date charges related primarily to severance and delist charges, which were offset by a tax settlement. 2022 year to date charges related primarily to charges associated with the deconsolidation and impairment of Russian subsidiaries resulting from the ongoing war in Ukraine and related sanctions.
(b) To adjust for pension settlement charges.
(c) To adjust for purchase accounting impacts related to the merger.
Page 4 of 14 |
LINDE PLC AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
|
| Quarter Ended September 30, |
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| Year To Date September 30, |
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(Millions of dollars, except per share data) |
| 2023 |
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| 2022 |
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| 2023 |
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| 2022 |
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Sales |
| $ | 8,155 |
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| $ | 8,797 |
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| $ | 24,552 |
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| $ | 25,465 |
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Cost of sales |
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| 4,314 |
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| 5,285 |
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| 13,061 |
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| 15,023 |
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Selling, general and administrative |
|
| 808 |
|
|
| 770 |
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| 2,463 |
|
|
| 2,343 |
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Depreciation and amortization |
|
| 959 |
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|
| 1,045 |
|
|
| 2,867 |
|
|
| 3,248 |
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Research and development |
|
| 36 |
|
|
| 35 |
|
|
| 107 |
|
|
| 107 |
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Other charges |
|
| 2 |
|
|
| 15 |
|
|
| 42 |
|
|
| 1,004 |
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Other income (expense) - net |
|
| 16 |
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| (34 | ) |
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| (16 | ) |
|
| (58 | ) |
Operating Profit |
|
| 2,052 |
|
|
| 1,613 |
|
|
| 5,996 |
|
|
| 3,682 |
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Interest expense - net |
|
| 40 |
|
|
| 18 |
|
|
| 129 |
|
|
| 32 |
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Net pension and OPEB cost (benefit), excluding service cost |
|
| (35 | ) |
|
| (53 | ) |
|
| (125 | ) |
|
| (179 | ) |
Income Before Income Taxes and Equity Investments |
|
| 2,047 |
|
|
| 1,648 |
|
|
| 5,992 |
|
|
| 3,829 |
|
Income taxes |
|
| 487 |
|
|
| 391 |
|
|
| 1,355 |
|
|
| 1,046 |
|
Income Before Equity Investments |
|
| 1,560 |
|
|
| 1,257 |
|
|
| 4,637 |
|
|
| 2,783 |
|
Income from equity investments |
|
| 41 |
|
|
| 43 |
|
|
| 128 |
|
|
| 137 |
|
Income (Including Noncontrolling Interests) |
|
| 1,601 |
|
|
| 1,300 |
|
|
| 4,765 |
|
|
| 2,920 |
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Less: noncontrolling interests |
|
| (36 | ) |
|
| (27 | ) |
|
| (109 | ) |
|
| (101 | ) |
Net Income – Linde plc |
| $ | 1,565 |
|
| $ | 1,273 |
|
| $ | 4,656 |
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| $ | 2,819 |
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|
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|
|
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|
|
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|
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|
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Per Share Data – Linde plc Shareholders |
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Basic earnings per share |
| $ | 3.21 |
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| $ | 2.56 |
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| $ | 9.51 |
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| $ | 5.62 |
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Diluted Earnings per share |
| $ | 3.19 |
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| $ | 2.54 |
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| $ | 9.43 |
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| $ | 5.57 |
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|
|
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|
|
|
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|
|
|
|
|
|
|
|
|
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Cash dividends per share |
| $ | 1.275 |
|
| $ | 1.17 |
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| $ | 3.83 |
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| $ | 3.51 |
|
|
|
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|
|
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|
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|
|
|
|
|
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Weighted Average Shares Outstanding (000’s): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Basic shares outstanding (000's) |
|
| 487,122 |
|
|
| 497,186 |
|
|
| 489,518 |
|
|
| 501,743 |
|
Diluted shares outstanding (000's) |
|
| 491,076 |
|
|
| 501,151 |
|
|
| 493,567 |
|
|
| 506,012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Note: See page 9 for a reconciliation to adjusted amounts which are Non-GAAP. |
Page 5 of 14 |
LINDE PLC AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
|
| September 30, |
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| December 31, |
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(Millions of dollars) |
| 2023 |
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| 2022 |
|
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Assets |
|
|
|
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|
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Cash and cash equivalents |
| $ | 3,894 |
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| $ | 5,436 |
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Accounts receivable - net |
|
| 4,692 |
|
|
| 4,559 |
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Contract assets |
|
| 151 |
|
|
| 124 |
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Inventories |
|
| 2,078 |
|
|
| 1,978 |
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Prepaid and other current assets |
|
| 922 |
|
|
| 950 |
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Total Current Assets |
|
| 11,737 |
|
|
| 13,047 |
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Property, plant and equipment - net |
|
| 23,624 |
|
|
| 23,548 |
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Goodwill |
|
| 25,955 |
|
|
| 25,817 |
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Other intangibles - net |
|
| 12,092 |
|
|
| 12,420 |
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Other long-term assets |
|
| 4,419 |
|
|
| 4,826 |
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Total Assets |
| $ | 77,827 |
|
| $ | 79,658 |
|
Liabilities and Equity |
|
|
|
|
|
|
|
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Accounts payable |
| $ | 2,750 |
|
| $ | 2,995 |
|
Short-term debt |
|
| 3,849 |
|
|
| 4,117 |
|
Current portion of long-term debt |
|
| 922 |
|
|
| 1,599 |
|
Contract liabilities |
|
| 1,985 |
|
|
| 3,073 |
|
Other current liabilities |
|
| 4,656 |
|
|
| 4,695 |
|
Total Current Liabilities |
|
| 14,162 |
|
|
| 16,479 |
|
Long-term debt |
|
| 13,232 |
|
|
| 12,198 |
|
Other long-term liabilities |
|
| 10,195 |
|
|
| 9,594 |
|
Total Liabilities |
| $ | 37,589 |
|
| $ | 38,271 |
|
Redeemable noncontrolling interests |
|
| 13 |
|
|
| 13 |
|
Linde plc Shareholders’ Equity |
|
|
|
|
|
|
|
|
Ordinary shares |
|
| — |
|
|
| 1 |
|
Additional paid-in capital |
|
| 39,803 |
|
|
| 40,005 |
|
Retained earnings (a) |
|
| 7,940 |
|
|
| 20,541 |
|
Accumulated other comprehensive income (loss) |
|
| (6,676 | ) |
|
| (5,782 | ) |
Less: Treasury shares, at cost (a) |
|
| (2,169 | ) |
|
| (14,737 | ) |
Total Linde plc Shareholders' Equity |
|
| 38,898 |
|
|
| 40,028 |
|
Noncontrolling interests |
|
| 1,327 |
|
|
| 1,346 |
|
Total Equity |
| $ | 40,225 |
|
| $ | 41,374 |
|
Total Liabilities and Equity |
| $ | 77,827 |
|
| $ | 79,658 |
|
|
|
|
|
|
|
|
|
|
(a) As a result of delisting from the Frankfurt Stock Exchange during March of 2023, Linde plc's historical treasury shares were immediately canceled which resulted in an approximately $15 billion decrease in treasury shares and retained earnings in Shareholders' Equity. |
Page 6 of 14 |
LINDE PLC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
|
| Quarter Ended September 30, |
|
| Year to Date September 30, |
|
||||||||||
(Millions of dollars) |
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
|
||||
Operations |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income - Linde plc |
| $ | 1,565 |
|
| $ | 1,273 |
|
| $ | 4,656 |
|
| $ | 2,819 |
|
Add: noncontrolling interests |
|
| 36 |
|
|
| 27 |
|
|
| 109 |
|
|
| 101 |
|
Net income (including noncontrolling interests) |
|
| 1,601 |
|
|
| 1,300 |
|
|
| 4,765 |
|
|
| 2,920 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other charges, net of payments (a) |
|
| (30 | ) |
|
| (13 | ) |
|
| (91 | ) |
|
| 909 |
|
Depreciation and amortization |
|
| 959 |
|
|
| 1,045 |
|
|
| 2,867 |
|
|
| 3,248 |
|
Accounts receivable |
|
| 6 |
|
|
| (29 | ) |
|
| (169 | ) |
|
| (572 | ) |
Contract assets and liabilities, net |
|
| (121 | ) |
|
| 126 |
|
|
| (4 | ) |
|
| 369 |
|
Inventory |
|
| (40 | ) |
|
| (156 | ) |
|
| (125 | ) |
|
| (300 | ) |
Payables and accruals |
|
| 190 |
|
|
| 306 |
|
|
| (268 | ) |
|
| 376 |
|
Pension contributions |
|
| (10 | ) |
|
| (25 | ) |
|
| (35 | ) |
|
| (44 | ) |
Deferred income taxes and other |
|
| (35 | ) |
|
| 82 |
|
|
| (362 | ) |
|
| (137 | ) |
Net cash provided by (used for) operating activities |
|
| 2,520 |
|
|
| 2,636 |
|
|
| 6,578 |
|
|
| 6,769 |
|
Investing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures |
|
| (948 | ) |
|
| (762 | ) |
|
| (2,636 | ) |
|
| (2,237 | ) |
Acquisitions, net of cash acquired |
|
| (8 | ) |
|
| (61 | ) |
|
| (842 | ) |
|
| (110 | ) |
Divestitures, net of cash divested and asset sales |
|
| 10 |
|
|
| 123 |
|
|
| 34 |
|
|
| 140 |
|
Net cash provided by (used for) investing activities |
|
| (946 | ) |
|
| (700 | ) |
|
| (3,444 | ) |
|
| (2,207 | ) |
Financing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt increase (decrease) - net |
|
| 869 |
|
|
| 35 |
|
|
| 227 |
|
|
| 2,795 |
|
Issuances of ordinary shares |
|
| 4 |
|
|
| 2 |
|
|
| 25 |
|
|
| 24 |
|
Purchases of ordinary shares |
|
| (1,158 | ) |
|
| (1,149 | ) |
|
| (2,925 | ) |
|
| (4,478 | ) |
Cash dividends - Linde plc shareholders |
|
| (620 | ) |
|
| (581 | ) |
|
| (1,866 | ) |
|
| (1,758 | ) |
Noncontrolling interest transactions and other |
|
| (59 | ) |
|
| (27 | ) |
|
| (81 | ) |
|
| (62 | ) |
Net cash provided by (used for) financing activities |
|
| (964 | ) |
|
| (1,720 | ) |
|
| (4,620 | ) |
|
| (3,479 | ) |
Effect of exchange rate changes on cash and cash equivalents |
|
| (73 | ) |
|
| (115 | ) |
|
| (56 | ) |
|
| (150 | ) |
Change in cash and cash equivalents |
|
| 537 |
|
|
| 101 |
|
|
| (1,542 | ) |
|
| 933 |
|
Cash and cash equivalents, beginning-of-period |
|
| 3,357 |
|
|
| 3,655 |
|
|
| 5,436 |
|
|
| 2,823 |
|
Cash and cash equivalents, end-of-period |
| $ | 3,894 |
|
| $ | 3,756 |
|
| $ | 3,894 |
|
| $ | 3,756 |
|
(a) Other charges were $2 million and $15 million for the quarter ended September 30, 2023 and 2022, respectively, and $42 million and $1,004 million for the nine months ended September 30, 2023 and 2022, respectively. Related cash outflows were $32 million and $28 million for the quarters ended September 30, 2023 and 2022, respectively, and $133 million and $95 million for the nine months ended September 30, 2023 and 2022, respectively.
Page 7 of 14 |
LINDE PLC AND SUBSIDIARIES
SEGMENT INFORMATION
(UNAUDITED)
|
| Quarter Ended September 30, |
|
| Year to Date September 30, |
|
||||||||||
(Millions of dollars) |
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
|
||||
Sales |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Americas |
| $ | 3,629 |
|
| $ | 3,694 |
|
| $ | 10,721 |
|
| $ | 10,453 |
|
EMEA |
|
| 2,105 |
|
|
| 2,125 |
|
|
| 6,442 |
|
|
| 6,417 |
|
APAC |
|
| 1,639 |
|
|
| 1,660 |
|
|
| 4,920 |
|
|
| 4,913 |
|
Engineering |
|
| 467 |
|
|
| 828 |
|
|
| 1,502 |
|
|
| 2,200 |
|
Other |
|
| 315 |
|
|
| 490 |
|
|
| 967 |
|
|
| 1,482 |
|
Total segment sales |
| $ | 8,155 |
|
| $ | 8,797 |
|
| $ | 24,552 |
|
| $ | 25,465 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Profit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas |
| $ | 1,074 |
|
| $ | 974 |
|
| $ | 3,169 |
|
| $ | 2,788 |
|
EMEA |
|
| 634 |
|
|
| 465 |
|
|
| 1,871 |
|
|
| 1,504 |
|
APAC |
|
| 459 |
|
|
| 429 |
|
|
| 1,354 |
|
|
| 1,254 |
|
Engineering |
|
| 116 |
|
|
| 150 |
|
|
| 372 |
|
|
| 398 |
|
Other |
|
| 23 |
|
|
| (8 | ) |
|
| 32 |
|
|
| (41 | ) |
Segment operating profit |
|
| 2,306 |
|
|
| 2,010 |
|
|
| 6,798 |
|
|
| 5,903 |
|
Other charges |
|
| (2 | ) |
|
| (15 | ) |
|
| (42 | ) |
|
| (1,004 | ) |
Purchase accounting impacts - Linde AG |
|
| (252 | ) |
|
| (382 | ) |
|
| (760 | ) |
|
| (1,217 | ) |
Total operating profit |
| $ | 2,052 |
|
| $ | 1,613 |
|
| $ | 5,996 |
|
| $ | 3,682 |
|
Page 8 of 14 |
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.
|
| 2023 |
|
| 2022 |
|
||||||||||||||||||||||||||||||
(Millions of dollars) |
| Year to Date September 30, |
|
| Q3 |
|
| Q2 |
|
| Q1 |
|
| Year to Date September 30, |
|
| Q4 |
|
| Q3 |
|
| Q2 |
|
| Q1 |
|
|||||||||
Adjusted Operating Profit and Operating Margin |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Reported operating profit |
| $ | 5,996 |
|
| $ | 20522,052 |
|
| $ | 2,011 |
|
| $ | 1,933 |
|
| $ | 3,682 |
|
| $ | 1,687 |
|
| $ | 1,613 |
|
| $ | 589 |
|
| $ | 1,480 |
|
Add: Other charges (a) |
|
| 42 |
|
|
| 2 |
|
|
| 22 |
|
|
| 18 |
|
|
| 1,004 |
|
|
| 25 |
|
|
| 15 |
|
|
| 993 |
|
|
| (4 | ) |
Add: Purchase accounting impacts - Linde AG (c) |
|
| 760 |
|
|
| 252 |
|
|
| 253 |
|
|
| 255 |
|
|
| 1,217 |
|
|
| 289 |
|
|
| 382 |
|
|
| 406 |
|
|
| 429 |
|
Total adjustments |
| $ | 802 |
|
| $ | 254 |
|
| $ | 275 |
|
| $ | 273 |
|
| $ | 2,221 |
|
| $ | 314 |
|
| $ | 397 |
|
| $ | 1,399 |
|
| $ | 425 |
|
Adjusted operating profit |
| $ | 6,798 |
|
| $ | 2,3062,306 |
|
| $ | 2,286 |
|
| $ | 2,206 |
|
| $ | 5,903 |
|
| $ | 2,001 |
|
| $ | 2,010 |
|
| $ | 1,988 |
|
| $ | 1,905 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported percentage change |
|
| 63 | % |
|
| 27 | % |
|
| 241 | % |
|
| 31 | % |
|
| 1 | % |
|
| 26 | % |
|
| 25 | % |
|
| (48 | )% |
|
| 22 | % |
Adjusted percentage change |
|
| 15 | % |
|
| 15 | % |
|
| 15 | % |
|
| 16 | % |
|
| 11 | % |
|
| 9 | % |
|
| 11 | % |
|
| 8 | % |
|
| 13 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported sales |
| $ | 24,552 |
|
| $ | 8,155 |
|
| $ | 8,204 |
|
| $ | 8,193 |
|
| $ | 25,465 |
|
| $ | 7,899 |
|
| $ | 8,797 |
|
| $ | 8,457 |
|
| $ | 8,211 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported operating margin |
|
| 24.4 | % |
|
| 25.2 | % |
|
| 24.5 | % |
|
| 23.6 | % |
|
| 14.5 | % |
|
| 21.4 | % |
|
| 18.3 | % |
|
| 7.0 | % |
|
| 18.0 | % |
Adjusted operating margin |
|
| 27.7 | % |
|
| 28.3 | % |
|
| 27.9 | % |
|
| 26.9 | % |
|
| 23.2 | % |
|
| 25.3 | % |
|
| 22.8 | % |
|
| 23.5 | % |
|
| 23.2 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported depreciation and amortization |
| $ | 2,867 |
|
| $ | 959 |
|
| $ | 960 |
|
| $ | 948 |
|
| $ | 3,248 |
|
| $ | 956 |
|
| $ | 1,045 |
|
| $ | 1,091 |
|
| $ | 1,112 |
|
Less: Purchase accounting impacts - Linde AG (c) |
|
| (750 | ) |
|
| (249 | ) |
|
| (251 | ) |
|
| (250 | ) |
|
| (1,196 | ) |
|
| (285 | ) |
|
| (377 | ) |
|
| (401 | ) |
|
| (418 | ) |
Adjusted depreciation and amortization |
| $ | 2,117 |
|
| $ | 710 |
|
| $ | 709 |
|
| $ | 698 |
|
| $ | 2,052 |
|
| $ | 671 |
|
| $ | 668 |
|
| $ | 690 |
|
| $ | 694 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Other Income (Expense) - net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported Other Income (Expense) - net |
| $ | (16 | ) |
| $ | 16 |
|
| $ | (27 | ) |
| $ | (5 | ) |
| $ | (58 | ) |
| $ | (4 | ) |
| $ | (34 | ) |
| $ | (36 | ) |
| $ | 12 |
|
Add: Purchase accounting impacts - Linde AG (c) |
|
| (10 | ) |
|
| (3 | ) |
|
| (2 | ) |
|
| (5 | ) |
|
| (21 | ) |
|
| (4 | ) |
|
| (5 | ) |
|
| (5 | ) |
|
| (11 | ) |
Adjusted Other Income (Expense) - net |
| $ | (6 | ) |
| $ | 19 |
|
| $ | (25 | ) |
| $ | — |
|
| $ | (37 | ) |
| $ | — |
|
| $ | (29 | ) |
| $ | (31 | ) |
| $ | 23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Pension and OPEB Cost (Benefit), Excluding Service Cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported net pension and OPEB cost (benefit), excluding service cost |
| $ | (125 | ) |
| $ | (35 | ) |
| $ | (45 | ) |
| $ | (45 | ) |
| $ | (179 | ) |
| $ | (58 | ) |
| $ | (53 | ) |
| $ | (62 | ) |
| $ | (64 | ) |
Add: Pension settlement charges |
|
| (12 | ) |
|
| (12 | ) |
|
| — |
|
|
| — |
|
|
| (6 | ) |
|
| — |
|
|
| (6 | ) |
|
| — |
|
|
| — |
|
Adjusted Net Pension and OPEB cost (benefit), excluding service costs |
| $ | (137 | ) |
| $ | (47 | ) |
| $ | (45 | ) |
| $ | (45 | ) |
| $ | (185 | ) |
| $ | (58 | ) |
| $ | (59 | ) |
| $ | (62 | ) |
| $ | (64 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Interest Expense - Net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported interest expense - net |
| $ | 129 |
|
| $ | 40 |
|
| $ | 52 |
|
| $ | 37 |
|
| $ | 32 |
|
| $ | 31 |
|
| $ | 18 |
|
| $ | 5 |
|
| $ | 9 |
|
Add: Purchase accounting impacts - Linde AG (c) |
|
| 15 |
|
|
| 2 |
|
|
| 4 |
|
|
| 9 |
|
|
| 27 |
|
|
| 8 |
|
|
| 8 |
|
|
| 9 |
|
|
| 10 |
|
Adjusted interest expense - net |
| $ | 144 |
|
| $ | 42 |
|
| $ | 56 |
|
| $ | 46 |
|
| $ | 59 |
|
| $ | 39 |
|
| $ | 26 |
|
| $ | 14 |
|
| $ | 19 |
|
Page 9 of 14 |
|
| 2023 |
|
| 2022 |
|
||||||||||||||||||||||||||||||
(Millions of dollars) |
| Year to Date September 30, |
|
| Q3 |
|
| Q2 |
|
| Q1 |
|
| Year to Date September 30, |
|
| Q4 |
|
| Q3 |
|
| Q2 |
|
| Q1 |
|
|||||||||
Adjusted Income Taxes (a) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Reported income taxes |
| $ | 1,355 |
|
| $ | 487 |
|
| $ | 438 |
|
| $ | 430 |
|
| $ | 1,046 |
|
| $ | 388 |
|
| $ | 391 |
|
| $ | 286 |
|
| $ | 369 |
|
Add: Purchase accounting impacts - Linde AG (c) |
|
| 183 |
|
|
| 59 |
|
|
| 67 |
|
|
| 57 |
|
|
| 308 |
|
|
| 66 |
|
|
| 92 |
|
|
| 108 |
|
|
| 108 |
|
Add: Pension settlement charges |
|
| 2 |
|
|
| 2 |
|
|
| — |
|
|
| — |
|
|
| 1 |
|
|
| — |
|
|
| 1 |
|
|
| — |
|
|
| — |
|
Add: Other charges (a) |
|
| 79 |
|
|
| — |
|
|
| 34 |
|
|
| 45 |
|
|
| 127 |
|
|
| 9 |
|
|
| 26 |
|
|
| 104 |
|
|
| (3 | ) |
Total adjustments |
|
| 264 |
|
|
| 61 |
|
|
| 101 |
|
|
| 102 |
|
|
| 436 |
|
|
| 75 |
|
|
| 119 |
|
|
| 212 |
|
|
| 105 |
|
Adjusted income taxes |
| $ | 1,619 |
|
| $ | 548 |
|
| $ | 539 |
|
| $ | 532 |
|
| $ | 1,482 |
|
| $ | 463 |
|
| $ | 510 |
|
| $ | 498 |
|
| $ | 474 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Effective Tax Rate (a) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported income before income taxes and equity investments |
| $ | 5,992 |
|
| $ | 2,047 |
|
| $ | 2,004 |
|
| $ | 1,941 |
|
| $ | 3,829 |
|
| $ | 1,714 |
|
| $ | 1,648 |
|
| $ | 646 |
|
| $ | 1,535 |
|
Add: Pension settlement charge |
|
| 12 |
|
|
| 12 |
|
|
| — |
|
|
| — |
|
|
| 6 |
|
|
| — |
|
|
| 6 |
|
|
| — |
|
|
| — |
|
Add: Purchase accounting impacts - Linde AG (c) |
|
| 745 |
|
|
| 250 |
|
|
| 249 |
|
|
| 246 |
|
|
| 1,190 |
|
|
| 281 |
|
|
| 374 |
|
|
| 397 |
|
|
| 419 |
|
Add: Other charges (a) |
|
| 42 |
|
|
| 2 |
|
|
| 22 |
|
|
| 18 |
|
|
| 1,004 |
|
|
| 25 |
|
|
| 15 |
|
|
| 993 |
|
|
| (4 | ) |
Total adjustments |
|
| 799 |
|
|
| 264 |
|
|
| 271 |
|
|
| 264 |
|
|
| 2,200 |
|
|
| 306 |
|
|
| 395 |
|
|
| 1,390 |
|
|
| 415 |
|
Adjusted income before income taxes and equity investments |
| $ | 6,791 |
|
| $ | 2,311 |
|
| $ | 2,275 |
|
| $ | 2,205 |
|
| $ | 6,029 |
|
| $ | 2,020 |
|
| $ | 2,043 |
|
| $ | 2,036 |
|
| $ | 1,950 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported Income taxes |
| $ | 1,355 |
|
| $ | 487 |
|
| $ | 438 |
|
| $ | 430 |
|
| $ | 1,046 |
|
| $ | 388 |
|
| $ | 391 |
|
| $ | 286 |
|
| $ | 369 |
|
Reported effective tax rate |
|
| 22.6 | % |
|
| 23.8 | % |
|
| 21.9 | % |
|
| 22.2 | % |
|
| 27.3 | % |
|
| 22.6 | % |
|
| 23.7 | % |
|
| 44.3 | % |
|
| 24.0 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted income taxes |
| $ | 1,619 |
|
| $ | 548 |
|
| $ | 539 |
|
| $ | 532 |
|
| $ | 1,482 |
|
| $ | 463 |
|
| $ | 510 |
|
| $ | 498 |
|
| $ | 474 |
|
Adjusted effective tax rate |
|
| 23.8 | % |
|
| 23.7 | % |
|
| 23.7 | % |
|
| 24.1 | % |
|
| 24.6 | % |
|
| 22.9 | % |
|
| 25.0 | % |
|
| 24.5 | % |
|
| 24.3 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from Equity Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported income from equity investments |
| $ | 128 |
|
| $ | 41 |
|
| $ | 46 |
|
| $ | 41 |
|
| $ | 137 |
|
| $ | 35 |
|
| $ | 43 |
|
| $ | 50 |
|
| $ | 44 |
|
Add: Purchase accounting impacts - Linde AG (c) |
|
| 54 |
|
|
| 18 |
|
|
| 18 |
|
|
| 18 |
|
|
| 57 |
|
|
| 18 |
|
|
| 18 |
|
|
| 19 |
|
|
| 20 |
|
Adjusted income from equity investments |
| $ | 182 |
|
| $ | 59 |
|
| $ | 64 |
|
| $ | 59 |
|
| $ | 194 |
|
| $ | 53 |
|
| $ | 61 |
|
| $ | 69 |
|
| $ | 64 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Noncontrolling Interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported noncontrolling interests |
| $ | (109 | ) |
| $ | (36 | ) |
| $ | (37 | ) |
| $ | (36 | ) |
| $ | (101 | ) |
| $ | (33 | ) |
| $ | (27 | ) |
| $ | (38 | ) |
| $ | (36 | ) |
Add: Purchase accounting impacts - Linde AG (c) |
|
| (9 | ) |
|
| (3 | ) |
|
| (3 | ) |
|
| (3 | ) |
|
| (19 | ) |
|
| (3 | ) |
|
| (12 | ) |
|
| (3 | ) |
|
| (4 | ) |
Adjusted noncontrolling interests |
| $ | (118 | ) |
| $ | (39 | ) |
| $ | (40 | ) |
| $ | (39 | ) |
| $ | (120 | ) |
| $ | (36 | ) |
| $ | (39 | ) |
| $ | (41 | ) |
| $ | (40 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income - Linde plc (b) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported net income |
| $ | 4,656 |
|
| $ | 1,565 |
|
| $ | 1,575 |
|
| $ | 1,516 |
|
| $ | 2,819 |
|
| $ | 1,328 |
|
| $ | 1,273 |
|
| $ | 372 |
|
| $ | 1,174 |
|
Add: Pension settlement charge |
|
| 10 |
|
|
| 10 |
|
|
| — |
|
|
| — |
|
|
| 5 |
|
|
| — |
|
|
| 5 |
|
|
| — |
|
|
| — |
|
Add: Other charges (a) |
|
| (37 | ) |
|
| 2 |
|
|
| (12 | ) |
|
| (27 | ) |
|
| 877 |
|
|
| 16 |
|
|
| (11 | ) |
|
| 889 |
|
|
| (1 | ) |
Add: Purchase accounting impacts - Linde AG (c) |
|
| 607 |
|
|
| 206 |
|
|
| 197 |
|
|
| 204 |
|
|
| 920 |
|
|
| 230 |
|
|
| 288 |
|
|
| 305 |
|
|
| 327 |
|
Total adjustments |
|
| 580 |
|
|
| 218 |
|
|
| 185 |
|
|
| 177 |
|
|
| 1,802 |
|
|
| 246 |
|
|
| 282 |
|
|
| 1,194 |
|
|
| 326 |
|
Adjusted net income - Linde plc |
| $ | 5,236 |
|
| $ | 1,783 |
|
| $ | 1,760 |
|
| $ | 1,693 |
|
| $ | 4,621 |
|
| $ | 1,574 |
|
| $ | 1,555 |
|
| $ | 1,566 |
|
| $ | 1,500 |
|
Page 10 of 14 |
|
| 2023 |
|
| 2022 |
|
||||||||||||||||||||||||||||||
(Millions of dollars, except per share data) |
| Year to Date September 30, |
|
| Q3 |
|
| Q2 |
|
| Q1 |
|
| Year to Date September 30, |
|
| Q4 |
|
| Q3 |
|
| Q2 |
|
| Q1 |
|
|||||||||
Adjusted Diluted EPS (b) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Reported diluted EPS |
| $ | 9.43 |
|
| $ | 3.19 |
|
| $ | 3.19 |
|
| $ | 3.06 |
|
| $ | 5.57 |
|
| $ | 2.67 |
|
| $ | 2.54 |
|
| $ | 0.74 |
|
| $ | 2.30 |
|
Add: Pension settlement charge |
|
| 0.02 |
|
|
| 0.02 |
|
|
| — |
|
|
| — |
|
|
| 0.01 |
|
|
| — |
|
|
| 0.01 |
|
|
| — |
|
|
| — |
|
Add: Other charges (a) |
|
| (0.07 | ) |
|
| — |
|
|
| (0.02 | ) |
|
| (0.05 | ) |
|
| 1.73 |
|
|
| 0.03 |
|
|
| (0.02 | ) |
|
| 1.76 |
|
|
| — |
|
Add: Purchase accounting impacts - Linde AG (c) |
|
| 1.23 |
|
|
| 0.42 |
|
|
| 0.40 |
|
|
| 0.41 |
|
|
| 1.82 |
|
|
| 0.46 |
|
|
| 0.57 |
|
|
| 0.60 |
|
|
| 0.63 |
|
Total adjustments |
|
| 1.18 |
|
|
| 0.44 |
|
|
| 0.38 |
|
|
| 0.36 |
|
|
| 3.56 |
|
|
| 0.49 |
|
|
| 0.56 |
|
|
| 2.36 |
|
|
| 0.63 |
|
Adjusted diluted EPS |
| $ | 10.61 |
|
| $ | 3.63 |
|
| $ | 3.57 |
|
| $ | 3.42 |
|
| $ | 9.13 |
|
| $ | 3.16 |
|
| $ | 3.10 |
|
| $ | 3.10 |
|
| $ | 2.93 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported percentage change |
|
| 69 | % |
|
| 26 | % |
|
| 331 | % |
|
| 33 | % |
|
| 4 | % |
|
| 35 | % |
|
| 35 | % |
|
| (54 | )% |
|
| 24 | % |
Adjusted percentage change |
|
| 16 | % |
|
| 17 | % |
|
| 15 | % |
|
| 17 | % |
|
| 15 | % |
|
| 14 | % |
|
| 14 | % |
|
| 15 | % |
|
| 18 | % |
|
|
|
|
|
| Fourth Quarter 2023 |
|
| Full Year 2023 |
|
|
|
|
|
|
|
||||||||||||||||||||
Adjusted Diluted EPS Guidance (d) |
|
|
| Low End |
|
| High End |
|
| Low End |
|
| High End |
|
|
|
|
|
|
|
||||||||||||||||
2023 Adjusted Guidance |
|
|
|
|
|
|
| $ | 3.38 |
|
| $ | 3.48 |
|
| $ | 14.00 |
|
| $ | 14.10 |
|
|
|
|
|
|
|
|
|
|
|||||
Adjusted percentage changes versus 2022 adjusted diluted EPS |
|
|
|
|
|
|
|
| 7 | % |
|
| 10 | % |
|
| 14 | % |
|
| 15 | % |
|
|
|
|
|
|
|
|
|
|||||
Add: Estimated currency headwind/(tailwind) |
|
|
|
|
|
|
|
| 1 | % |
|
| 1 | % |
| — % |
|
| — % |
|
|
|
|
|
|
|
|
|
|
|||||||
Adjusted percentage change excluding currency |
|
|
|
|
|
|
|
| 8 | % |
|
| 11 | % |
|
| 14 | % |
|
| 15 | % |
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Adjusted EBITDA and % of Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net Income - Linde plc |
| $ | 4,656 |
|
| $ | 1,5651,565 |
|
| $ | 1,575 |
|
| $ | 1,516 |
|
| $ | 2,819 |
|
| $ | 1,328 |
|
| $ | 1,273 |
|
| $ | 372 |
|
| $ | 1,174 |
|
Add: Noncontrolling interests |
|
| 109 |
|
|
| 36 |
|
|
| 37 |
|
|
| 36 |
|
|
| 101 |
|
|
| 33 |
|
|
| 27 |
|
|
| 38 |
|
|
| 36 |
|
Add: Net pension and OPEB cost (benefit), excluding service cost |
|
| (125 | ) |
|
| (35 | ) |
|
| (45 | ) |
|
| (45 | ) |
|
| (179 | ) |
|
| (58 | ) |
|
| (53 | ) |
|
| (62 | ) |
|
| (64 | ) |
Add: Interest expense |
|
| 129 |
|
|
| 40 |
|
|
| 52 |
|
|
| 37 |
|
|
| 32 |
|
|
| 31 |
|
|
| 18 |
|
|
| 5 |
|
|
| 9 |
|
Add: Income taxes |
|
| 1,355 |
|
|
| 487 |
|
|
| 438 |
|
|
| 430 |
|
|
| 1,046 |
|
|
| 388 |
|
|
| 391 |
|
|
| 286 |
|
|
| 369 |
|
Add: Depreciation and amortization |
|
| 2,867 |
|
|
| 959 |
|
|
| 960 |
|
|
| 948 |
|
|
| 3,248 |
|
|
| 956 |
|
|
| 1,045 |
|
|
| 1,091 |
|
|
| 1,112 |
|
EBITDA |
|
| 8,991 |
|
|
| 3,052 |
|
|
| 3,017 |
|
|
| 2,922 |
|
|
| 7,067 |
|
|
| 2,678 |
|
|
| 2,701 |
|
|
| 1,730 |
|
|
| 2,636 |
|
Add: Other charges (a) |
|
| 42 |
|
|
| 2 |
|
|
| 22 |
|
|
| 18 |
|
|
| 1,004 |
|
|
| 25 |
|
|
| 15 |
|
|
| 993 |
|
|
| (4 | ) |
Add: Purchase accounting impacts - Linde AG (c) |
|
| 63 |
|
|
| 20 |
|
|
| 20 |
|
|
| 23 |
|
|
| 77 |
|
|
| 22 |
|
|
| 23 |
|
|
| 23 |
|
|
| 31 |
|
Total adjustments |
|
| 105 |
|
|
| 22 |
|
|
| 42 |
|
|
| 41 |
|
|
| 1,081 |
|
|
| 47 |
|
|
| 38 |
|
|
| 1,016 |
|
|
| 27 |
|
Adjusted EBITDA |
| $ | 9,096 |
|
| $ | 3,0743,074 |
|
| $ | 3,059 |
|
| $ | 2,963 |
|
| $ | 8,148 |
|
| $ | 2,725 |
|
| $ | 2,739 |
|
| $ | 2,746 |
|
| $ | 2,663 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported sales |
| $ | 24,552 |
|
| $ | 8,1558,155 |
|
| $ | 8,204 |
|
| $ | 8,193 |
|
| $ | 25,465 |
|
| $ | 7,899 |
|
| $ | 8,797 |
|
| $ | 8,457 |
|
| $ | 8,211 |
|
% of sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
|
| 36.6 | % |
|
| 37.4 | % |
|
| 36.8 | % |
|
| 35.7 | % |
|
| 27.8 | % |
|
| 33.9 | % |
|
| 30.7 | % |
|
| 20.5 | % |
|
| 32.1 | % |
Adjusted EBITDA as a % of Sales |
|
| 37.0 | % |
|
| 37.7 | % |
|
| 37.3 | % |
|
| 36.2 | % |
|
| 32.0 | % |
|
| 34.5 | % |
|
| 31.1 | % |
|
| 32.5 | % |
|
| 32.4 | % |
(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”.
Page 11 of 14 |
(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) 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 2023. 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, any impairment or other charges related to scaling back operations in Russia as actions are defined and executed and as sanctions impact the Company’s operations, 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 12 of 14 |
LINDE PLC AND SUBSIDIARIES
APPENDIX
NON-GAAP MEASURES AND RECONCILIATIONS
(UNAUDITED)
|
| 2023 |
|
| 2022 |
|
||||||||||||||||||||||
(Millions of dollars) |
| Q3 |
|
| Q2 |
|
| Q1 |
|
| Q4 |
|
| Q3 |
|
| Q2 |
|
| Q1 |
|
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|
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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. |
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|||||||
Operating Cash Flow |
| $ | 2,520 |
|
| $ | 2,150 |
|
| $ | 1,908 |
|
| $ | 2,095 |
|
| $ | 2,636 |
|
| $ | 2,133 |
|
| $ | 2,000 |
|
Less: Capital Expenditures |
|
| (948 | ) |
|
| (859 | ) |
| $ | (829 | ) |
|
| (936 | ) |
|
| (762 | ) |
|
| (826 | ) |
|
| (649 | ) |
Free Cash Flow |
| $ | 1,572 |
|
| $ | 1,291 |
|
| $ | 1,079 |
|
| $ | 1,159 |
|
| $ | 1,874 |
|
| $ | 1,307 |
|
| $ | 1,351 |
|
|
|
|
|
|
|
|
|
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|
|
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|
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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. |
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|
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|
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Debt |
| $ | 18,003 |
|
| $ | 17,490 |
|
| $ | 18,777 |
|
| $ | 17,914 |
|
| $ | 15,338 |
|
| $ | 16,043 |
|
| $ | 16,456 |
|
Less: Cash and cash equivalents |
|
| (3,894 | ) |
|
| (3,357 | ) |
|
| (4,962 | ) |
|
| (5,436 | ) |
|
| (3,756 | ) |
|
| (3,655 | ) |
|
| (4,464 | ) |
Net debt |
|
| 14,109 |
|
|
| 14,133 |
|
|
| 13,815 |
|
|
| 12,478 |
|
|
| 11,582 |
|
|
| 12,388 |
|
|
| 11,992 |
|
Less: Purchase accounting impacts - Linde AG |
|
| (8 | ) |
|
| (10 | ) |
|
| (13 | ) |
|
| (22 | ) |
|
| (28 | ) |
|
| (38 | ) |
|
| (50 | ) |
Adjusted net debt |
| $ | 14,101 |
|
| $ | 14,123 |
|
| $ | 13,802 |
|
| $ | 12,456 |
|
| $ | 11,554 |
|
| $ | 12,350 |
|
| $ | 11,942 |
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
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|
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). |
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|
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Reported net income - Linde plc |
| $ | 1,565 |
|
| $ | 1,575 |
|
| $ | 1,516 |
|
| $ | 1,328 |
|
| $ | 1,273 |
|
| $ | 372 |
|
| $ | 1,174 |
|
Add: noncontrolling interests |
|
| 36 |
|
|
| 37 |
|
|
| 36 |
|
|
| 33 |
|
|
| 27 |
|
|
| 38 |
|
|
| 36 |
|
Add: interest expense - net |
|
| 40 |
|
|
| 52 |
|
|
| 37 |
|
|
| 31 |
|
|
| 18 |
|
|
| 5 |
|
|
| 9 |
|
Less: tax benefit on interest expense - net * |
|
| (12 | ) |
|
| (12 | ) |
|
| (9 | ) |
|
| (7 | ) |
|
| (5 | ) |
|
| (1 | ) |
|
| (2 | ) |
Reported NOPAT |
| $ | 1,629 |
|
| $ | 1,652 |
|
| $ | 1,580 |
|
| $ | 1,385 |
|
| $ | 1,313 |
|
| $ | 414 |
|
| $ | 1,217 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income - Linde plc |
| $ | 1,783 |
|
| $ | 1,760 |
|
| $ | 1,693 |
|
| $ | 1,574 |
|
| $ | 1,555 |
|
| $ | 1,566 |
|
| $ | 1,500 |
|
Add: adjusted noncontrolling interests |
|
| 39 |
|
|
| 40 |
|
|
| 39 |
|
|
| 36 |
|
|
| 39 |
|
|
| 41 |
|
|
| 40 |
|
Add: adjusted interest expense - net |
|
| 42 |
|
|
| 56 |
|
|
| 46 |
|
|
| 39 |
|
|
| 26 |
|
|
| 14 |
|
|
| 19 |
|
Less: tax benefit on interest expense - net * |
|
| (13 | ) |
|
| (13 | ) |
|
| (11 | ) |
|
| (9 | ) |
|
| (7 | ) |
|
| (3 | ) |
|
| (5 | ) |
Adjusted NOPAT |
| $ | 1,851 |
|
| $ | 1,843 |
|
| $ | 1,767 |
|
| $ | 1,640 |
|
| $ | 1,613 |
|
| $ | 1,618 |
|
| $ | 1,554 |
|
*Tax benefit on interest expense - net is generally presented using the reported effective rate. |
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|
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4-quarter trailing reported NOPAT |
| $ | 6,246 |
|
| $ | 5,930 |
|
| $ | 4,692 |
|
| $ | 4,329 |
|
| $ | 4,021 |
|
| $ | 3,723 |
|
| $ | 4,198 |
|
4-quarter trailing adjusted NOPAT |
| $ | 7,101 |
|
| $ | 6,863 |
|
| $ | 6,638 |
|
| $ | 6,425 |
|
| $ | 6,281 |
|
| $ | 6,137 |
|
| $ | 5,997 |
|
Page 13 of 14 |
|
| 2023 |
| 2022 |
|
|||||||||||||||||||||||
(Millions of dollars) |
| Q3 |
|
| Q2 |
|
| Q1 |
|
| Q4 |
|
| Q3 |
|
| Q2 |
|
| Q1 |
|
|||||||
Equity and redeemable noncontrolling interests: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable noncontrolling interests |
| $ | 13 |
|
| $ | 13 |
|
| $ | 13 |
|
| $ | 13 |
|
| $ | 13 |
|
| $ | 13 |
|
| $ | 13 |
|
Linde plc shareholders' equity |
|
| 38,898 |
|
|
| 39,911 |
|
|
| 39,970 |
|
|
| 40,028 |
|
|
| 37,628 |
|
|
| 39,674 |
|
|
| 42,963 |
|
Noncontrolling interests |
|
| 1,327 |
|
|
| 1,324 |
|
|
| 1,353 |
|
|
| 1,346 |
|
|
| 1,298 |
|
|
| 1,353 |
|
|
| 1,414 |
|
Total equity and redeemable noncontrolling interests |
| $ | 40,238 |
|
| $ | 41,248 |
|
| $ | 41,336 |
|
| $ | 41,387 |
|
| $ | 38,939 |
|
| $ | 41,040 |
|
| $ | 44,390 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported capital |
| $ | 54,347 |
|
| $ | 55,381 |
|
| $ | 55,151 |
|
| $ | 53,865 |
|
| $ | 50,521 |
|
| $ | 53,428 |
|
| $ | 56,382 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity and redeemable noncontrolling interests |
| $ | 40,238 |
|
| $ | 41,248 |
|
| $ | 41,336 |
|
| $ | 41,387 |
|
| $ | 38,939 |
|
| $ | 41,040 |
|
| $ | 44,390 |
|
Add: Adjusted net debt |
|
| 14,101 |
|
|
| 14,123 |
|
|
| 13,802 |
|
|
| 12,456 |
|
|
| 11,554 |
|
|
| 12,350 |
|
|
| 11,942 |
|
Less: Linde AG Goodwill (a) |
|
| 24,256 |
|
|
| 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 |
|
|
| 1,868 |
|
Adjusted capital |
| $ | 28,215 |
|
| $ | 29,247 |
|
| $ | 29,014 |
|
| $ | 27,719 |
|
| $ | 24,369 |
|
| $ | 27,266 |
|
| $ | 30,208 |
|
(a) Represent opening balance sheet purchase accounting impacts of non-amortizing assets related to the Linde AG merger. |
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|
|
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|
|
|
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|
|
|
|
|
|
|
|
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|
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|
|
|
|
|
|
|
|
|
|
|
Ending capital (see above) |
| $ | 54,347 |
|
| $ | 55,381 |
|
| $ | 55,151 |
|
| $ | 53,865 |
|
| $ | 50,521 |
|
| $ | 53,428 |
|
| $ | 56,382 |
|
5-quarter average ending capital |
| $ | 53,853 |
|
| $ | 53,669 |
|
| $ | 53,869 |
|
| $ | 54,204 |
|
| $ | 54,984 |
|
| $ | 56,796 |
|
| $ | 57,967 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending adjusted capital (see above) |
| $ | 28,215 |
|
| $ | 29,247 |
|
| $ | 29,014 |
|
| $ | 27,719 |
|
| $ | 24,369 |
|
| $ | 27,266 |
|
| $ | 30,208 |
|
5-quarter average ending adjusted capital |
| $ | 27,713 |
|
| $ | 27,523 |
|
| $ | 27,715 |
|
| $ | 28,040 |
|
| $ | 28,810 |
|
| $ | 30,611 |
|
| $ | 31,770 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
After-tax ROC (4 quarter reported NOPAT / 5-quarter average ending capital) |
|
| 11.6 | % |
|
| 11.0 | % |
|
| 8.7 | % |
|
| 8.0 | % |
|
| 7.3 | % |
|
| 6.6 | % |
|
| 7.2 | % |
Adjusted after-tax ROC (4 quarter trailing adjusted NOPAT / 5-quarter average ending adjusted capital) |
|
| 25.6 | % |
|
| 24.9 | % |
|
| 24.0 | % |
|
| 22.9 | % |
|
| 21.8 | % |
|
| 20.0 | % |
|
| 18.9 | % |
Page 14 of 14 |