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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): August 2, 2024

 

Linde plc

(Exact name of registrant as specified in its charter)

 

Ireland

 

001-38730

 

98-1448883

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

 

10 Riverview Dr.

Danbury, Connecticut

United States 06810

 

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:

 

 

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)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

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

 

Trading symbol(s)

 

Name of each exchange on which registered

Ordinary shares (€0.001 nominal value per share)

 

LIN

 

Nasdaq 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 August 2, 2024, Linde plc issued a press release setting forth Linde plc’s results of operations for the quarter ended June 30, 2024. 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 9.01. Financial Statements and Exhibits.

 

 

(d)

Exhibits. The following exhibit is furnished herewith pursuant to Item 2.02 hereof:

 

Exhibit No.

Description

99.1

Press Release dated August 2, 2024

104

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

 

 

 

 

 

By:

/s/ Kelcey E. Hoyt

 

 

Name:

Kelcey E. Hoyt

 

 

Title:

Principal Accounting Officer

 

 

Date: August 2, 2024

 

 

3

 

EX-99.1 2 linde_ex991.htm PRESS RELEASE linde_ex991.htm

EXHIBIT 99.1

 

 

Linde Reports Second-Quarter 2024 Results

 

Second-Quarter Highlights

 

 

Sales $8.3 billion, up 1%, underlying sales up 3%

 

Operating profit $2.2 billion, adjusted operating profit $2.4 billion, up 6%

 

Operating profit margin 26.4%; adjusted operating profit margin 29.3%, up 140 basis points

 

EPS $3.44, up 8%; adjusted EPS $3.85, up 8% YoY

 

Full-year 2024 adjusted EPS guidance of $15.40 - $15.60 representing 9% to 11% growth year-over-year excluding FX

 

Woking, UK, August 2, 2024 – Linde plc (Nasdaq: LIN) today reported second-quarter 2024 net income of $1,663 million and diluted earnings per share of $3.44, up 6% and 8% respectively.  Excluding Linde AG purchase accounting impacts and other charges, adjusted net income was $1,859 million, up 6% versus prior year.  Adjusted earnings per share was $3.85, 8% above prior year.

 

Linde’s sales for the second quarter were $8,267 million, up 1% versus prior year.  Compared to prior year, underlying sales increased 3% from price attainment as volume growth was flat.

 

Second-quarter operating profit was $2,184 million.  Adjusted operating profit of $2,422 million was up 6% versus prior year led by higher price and continued productivity initiatives across all segments.  Adjusted operating profit margin of 29.3% was 140 basis points above prior year.

 

Second-quarter operating cash flow of $1,929 million decreased 10% versus prior year driven primarily by engineering project prepayment timing.  After capital expenditures of $1,133 million, free cash flow was $796 million.  During the quarter, the company returned $2,100 million to shareholders through dividends and stock repurchases, net of issuances.

 

Commenting on the financial results and business outlook, Chief Executive Officer Sanjiv Lamba said, “Despite the challenging macro, the Linde team again delivered high-quality results, growing EPS 8%, increasing ROC to 25.7% and expanding operating margins 140 basis points, reaching 29.3%. This exemplifies our ability to continuously grow the integrated industrial gas model while developing and winning high-quality growth opportunities.”

 

Lamba continued, “Looking ahead, the economic environment remains uncertain.  However, we are well positioned to win more than our fair share of high-quality projects and continue to create shareholder value.” 

 

For the third quarter of 2024, Linde expects adjusted diluted earnings per share in the range of $3.82 to $3.92, up 5% to 8% versus prior-year quarter or 6% to 9% when excluding 1% of estimated currency headwind.

 

For the full year 2024, the company expects adjusted diluted earnings per share to be in the range of $15.40 to $15.60, up 8% to 10% versus prior year or 9% to 11% when excluding 1% of estimated currency headwind.  Full-year capital expenditures are expected to be in the range of $4.0 billion to $4.5 billion to support growth and maintenance requirements including the $4.7 billion contractual sale of gas project backlog.

 

 
Page 1 of 10

 

 

 

Second-Quarter 2024 Results by Segment

 

Americas sales of $3,655 million increased 3% versus prior-year quarter.  Compared with second quarter 2023, underlying sales increased 4% driven by higher pricing as volumes were flat.  Operating profit of $1,159 million was 31.7% of sales, 150 basis points above prior year.

 

APAC (Asia Pacific) sales of $1,657 million were down 2% versus prior year driven by negative currency translation. Compared with second quarter 2023, underlying sales were stable as price and volume were flat versus prior year quarter.  Operating profit of $474 million was 28.6% of sales, 60 basis points above prior year.

 

EMEA (Europe, Middle East & Africa) sales of $2,091 million were down 3% versus prior year.  Compared with second quarter 2023, underlying sales grew 2% driven by 3% higher pricing partially offset by 1% lower volumes, primarily in the metals and mining end market.  Operating profit of $704 million was 33.7% of sales, 450 basis points above prior year. 

 

Linde Engineering sales were $544 million, increased 10% versus prior year, and operating profit was $96 million or 17.6% of sales.  Order intake for the quarter was $336 million and third-party sale of equipment backlog was $3.2 billion.

 

Earnings Call

A teleconference on Linde’s second-quarter 2024 results is being held today at 9:00 am EDT. 

 

Live conference call

US Toll-Free Dial-In Number: 1 888 770 7292

UK Toll-Free Dial-In Number: 0800 358 0970

Access code: 6877110

Live webcast (listen-only)

https://www.linde.com/investors/financial-reports

 

Materials to be used in the teleconference are also available on the website.

 

About Linde

Linde is a leading global industrial gases and engineering company with 2023 sales of $33 billion.  We live our mission of making our world more productive every day by providing high-quality solutions, technologies and services which are making our customers more successful and helping to sustain, decarbonize and protect our planet.

 

The company serves a variety of end markets such as chemicals & energy, food & beverage, electronics, healthcare, manufacturing, metals and mining. Linde's industrial gases and technologies are used in countless applications including production of clean hydrogen and carbon capture systems critical to the energy transition, life-saving medical oxygen and high-purity & specialty gases for electronics. Linde also delivers state-of-the-art gas processing solutions to support customer expansion, efficiency improvements and emissions reductions.

 

For more information about the company and its products and services, please visit www.linde.com

 

 
Page 2 of 10

 

 

 

Adjusted amounts, free cash flow and return on capital are non-GAAP measures.  See the attachments for a summary of non-GAAP reconciliations and calculations for adjusted amounts. 

 

Attachments: Summary Non-GAAP Reconciliations, Statements of Income, Balance Sheets, Statements of Cash Flows, Segment Information and Appendix: Non-GAAP Measures and Reconciliations.

  

*Note: We are providing adjusted earnings per share (“EPS”) guidance for 2024. This is a non-GAAP financial measure that represents diluted earnings per share from continuing operations (a GAAP measure) but excludes the impact of certain items that we believe are not representative of our underlying business performance, such as cost reduction and other charges, the impact of potential divestitures or other potentially significant items. Given the uncertainty of timing and magnitude of such items, we cannot provide a reconciliation of the differences between the non-GAAP adjusted EPS guidance and the corresponding GAAP EPS measure without unreasonable effort.

 

Forward-looking Statements

This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  These forward-looking statements are identified by terms and phrases such as: anticipate, believe, intend, estimate, expect, continue, should, could, may, plan, project, predict, will, potential, forecast, and similar expressions.  They are based on management’s reasonable expectations and assumptions as of the date the statements are made but involve risks and uncertainties.  These risks and uncertainties include, without limitation: the performance of stock markets generally; developments in worldwide and national economies and other international events and circumstances, including trade conflicts and tariffs; changes in foreign currencies and in interest rates; the cost and availability of electric power, natural gas and other raw materials; the ability to achieve price increases to offset cost increases; catastrophic events including natural disasters, epidemics, pandemics such as COVID-19 and acts of war and terrorism; the ability to attract, hire, and retain qualified personnel; the impact of changes in financial accounting standards; the impact of changes in pension plan liabilities; the impact of tax, environmental, healthcare and other legislation and government regulation in jurisdictions in which the company operates; the cost and outcomes of investigations, litigation and regulatory proceedings; the impact of potential unusual or non-recurring items; continued timely development and market acceptance of new products and applications; the impact of competitive products and pricing; future financial and operating performance of major customers and industries served; the impact of information technology system failures, network disruptions and breaches in data security; and the effectiveness and speed of integrating new acquisitions into the business.  These risks and uncertainties may cause future results or circumstances to differ materially from adjusted projections, estimates or other forward-looking statements.

 

Linde plc assumes no obligation to update or provide revisions to any forward-looking statement in response to changing circumstances.  The above listed risks and uncertainties are further described in Item 1A.  Risk Factors in Linde plc’s Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC on February 28, 2024 which should be reviewed carefully. Please consider Linde plc’s forward-looking statements in light of those risks.

 

 
Page 3 of 10

 

 

 

LINDE PLC AND SUBSIDIARIES

SUMMARY NON-GAAP RECONCILIATIONS

(UNAUDITED)

 

The following adjusted amounts are Non-GAAP measures and are intended to supplement investors' understanding of the company's financial statements by providing measures which investors, financial analysts and management use to help evaluate the company's operating performance. Items which the company does not believe to be indicative of ongoing business trends are excluded from these calculations so that investors can better evaluate and analyze historical and future business trends on a consistent basis. Definitions of these Non-GAAP measures may not be comparable to similar definitions used by other companies and are not a substitute for similar GAAP measures. See the "NON GAAP MEASURES AND RECONCILIATIONS" starting on page 9 for additional details relating to the adjustments.

 

(Millions of dollars, except per share amounts)

 

Sales

 

 

Operating Profit

 

 

Net Income

 

 

Diluted EPS

 

Quarter Ended June 30

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Reported GAAP Amounts

 

$ 8,267

 

 

$ 8,204

 

 

$ 2,184

 

 

$ 2,011

 

 

$ 1,663

 

 

$ 1,575

 

 

$ 3.44

 

 

$ 3.19

 

Other charges (a)

 

 

 

 

 

 

 

 

 

 

 

22

 

 

 

 

 

 

(12 )

 

 

 

 

 

(0.02 )

Purchase accounting impacts - Linde AG (b)

 

 

 

 

 

 

 

 

238

 

 

 

253

 

 

 

196

 

 

 

197

 

 

 

0.41

 

 

 

0.40

 

Total adjustments

 

 

 

 

 

 

 

 

238

 

 

 

275

 

 

 

196

 

 

 

185

 

 

 

0.41

 

 

 

0.38

 

Adjusted amounts

 

$ 8,267

 

 

$ 8,204

 

 

$ 2,422

 

 

$ 2,286

 

 

$ 1,859

 

 

$ 1,760

 

 

$ 3.85

 

 

$ 3.57

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Millions of dollars, except per share amounts)

 

Sales

 

 

Operating Profit

 

 

 

Net Income

Diluted EPS

 

Year to Date June 30

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Reported GAAP Amounts

 

$ 16,367

 

 

$ 16,397

 

 

$ 4,279

 

 

$ 3,944

 

 

$ 3,290

 

 

$ 3,091

 

 

$ 6.79

 

 

$ 6.25

 

Other charges (a)

 

 

 

 

 

 

 

 

 

 

 

40

 

 

 

(5 )

 

 

(39 )

 

 

(0.01 )

 

 

(0.08 )

Purchase accounting impacts - Linde AG (b)

 

 

 

 

 

 

 

 

484

 

 

 

508

 

 

 

395

 

 

 

401

 

 

 

0.82

 

 

 

0.81

 

Total adjustments

 

 

 

 

 

 

 

 

484

 

 

 

548

 

 

 

390

 

 

 

362

 

 

 

0.81

 

 

 

0.73

 

Adjusted amounts

 

$ 16,367

 

 

$ 16,397

 

 

$ 4,763

 

 

$ 4,492

 

 

$ 3,680

 

 

$ 3,453

 

 

$ 7.60

 

 

$ 6.98

 

 

(a) 2023 year to date charges related primarily to severance and delist charges, which were offset by a tax settlement.

 

(b) To adjust for purchase accounting impacts related to the merger.

 

 
Page 4 of 10

 

 

LINDE PLC AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF INCOME

(UNAUDITED)

 

 

 

 Quarter Ended June 30,  

 

 

      Year To Date June 30,

 

(Millions of dollars, except per share data)

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Sales

 

$ 8,267

 

 

$ 8,204

 

 

$ 16,367

 

 

$ 16,397

 

Cost of sales

 

 

4,251

 

 

 

4,316

 

 

 

8,467

 

 

 

8,747

 

Selling, general and administrative

 

 

840

 

 

 

833

 

 

 

1,700

 

 

 

1,655

 

Depreciation and amortization

 

 

958

 

 

 

960

 

 

 

1,907

 

 

 

1,908

 

Research and development

 

 

36

 

 

 

35

 

 

 

74

 

 

 

71

 

Other charges

 

 

 

 

 

22

 

 

 

 

 

 

40

 

Other income (expense) - net

 

 

2

 

 

 

(27 )

 

 

60

 

 

 

(32 )

Operating Profit

 

 

2,184

 

 

 

2,011

 

 

 

4,279

 

 

 

3,944

 

Interest expense - net

 

 

70

 

 

 

52

 

 

 

135

 

 

 

89

 

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

 

 

(49 )

 

 

(45 )

 

 

(99 )

 

 

(90 )

Income Before Income Taxes and Equity Investments

 

 

2,163

 

 

 

2,004

 

 

 

4,243

 

 

 

3,945

 

Income taxes

 

 

508

 

 

 

438

 

 

 

971

 

 

 

868

 

Income Before Equity Investments

 

 

1,655

 

 

 

1,566

 

 

 

3,272

 

 

 

3,077

 

Income from equity investments

 

 

45

 

 

 

46

 

 

 

93

 

 

 

87

 

Income (Including Noncontrolling Interests)

 

 

1,700

 

 

 

1,612

 

 

 

3,365

 

 

 

3,164

 

Less: noncontrolling interests

 

 

(37 )

 

 

(37 )

 

 

(75 )

 

 

(73 )

Net Income – Linde plc

 

$ 1,663

 

 

$ 1,575

 

 

$ 3,290

 

 

$ 3,091

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per Share Data – Linde plc Shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

$ 3.46

 

 

$ 3.22

 

 

$ 6.84

 

 

$ 6.30

 

Diluted Earnings per share

 

$ 3.44

 

 

$ 3.19

 

 

$ 6.79

 

 

$ 6.25

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends per share

 

$ 1.39

 

 

$ 1.275

 

 

$ 2.78

 

 

$ 2.55

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Shares Outstanding (000’s):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic shares outstanding (000's)

 

 

479,973

 

 

 

489,618

 

 

 

480,943

 

 

 

490,727

 

Diluted shares outstanding (000's)

 

 

483,177

 

 

 

493,549

 

 

 

484,366

 

 

 

494,685

 

 

Note: See page 9 for a reconciliation to adjusted amounts which are Non-GAAP.

 

 
Page 5 of 10

 

 

 

LINDE PLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET

(UNAUDITED)

 

 

 

June 30,     

 

 

 December 31,

 

 (Millions of dollars)   

 

 2024    

 

 

  2023

 

Assets

 

 

 

 

 

 

Cash and cash equivalents

 

$ 4,626

 

 

$ 4,664

 

Accounts receivable - net

 

 

5,001

 

 

 

4,718

 

Contract assets

 

 

226

 

 

 

196

 

Inventories

 

 

2,094

 

 

 

2,115

 

Prepaid and other current assets

 

 

896

 

 

 

927

 

Total Current Assets

 

 

12,843

 

 

 

12,620

 

Property, plant and equipment - net

 

 

24,575

 

 

 

24,552

 

Goodwill

 

 

26,365

 

 

 

26,751

 

Other intangibles - net

 

 

11,851

 

 

 

12,399

 

Other long-term assets

 

 

4,581

 

 

 

4,489

 

Total Assets

 

$ 80,215

 

 

$ 80,811

 

Liabilities and Equity

 

 

 

 

 

 

 

 

Accounts payable

 

$ 2,859

 

 

$ 3,020

 

Short-term debt

 

 

3,326

 

 

 

4,713

 

Current portion of long-term debt

 

 

1,261

 

 

 

1,263

 

Contract liabilities

 

 

1,767

 

 

 

1,901

 

Other current liabilities

 

 

4,291

 

 

 

4,820

 

Total Current Liabilities

 

 

13,504

 

 

 

15,717

 

Long-term debt

 

 

16,931

 

 

 

13,397

 

Other long-term liabilities

 

 

10,229

 

 

 

10,602

 

Total Liabilities

 

$ 40,664

 

 

$ 39,716

 

Redeemable noncontrolling interests

 

 

13

 

 

 

13

 

Linde plc Shareholders’ Equity

 

 

 

 

 

 

 

 

Ordinary shares

 

 

1

 

 

 

1

 

Additional paid-in capital

 

 

39,560

 

 

 

39,812

 

Retained earnings

 

 

10,721

 

 

 

8,845

 

Accumulated other comprehensive income (loss)

 

 

(6,794 )

 

 

(5,805 )

Less: Treasury shares, at cost

 

 

(5,309 )

 

 

(3,133 )

Total Linde plc Shareholders' Equity

 

 

38,179

 

 

 

39,720

 

Noncontrolling interests

 

 

1,359

 

 

 

1,362

 

Total Equity

 

$ 39,538

 

 

$ 41,082

 

Total Liabilities and Equity

 

$ 80,215

 

 

$ 80,811

 

 

 
Page 6 of 10

 

 

LINDE PLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(UNAUDITED)

 

          

 

 

Quarter Ended June 30,

 

 

Year to Date June 30,

 

(Millions of dollars)

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Operations

 

 

 

 

 

 

 

 

 

 

 

 

Net income - Linde plc

 

$ 1,663

 

 

$ 1,575

 

 

$ 3,290

 

 

$ 3,091

 

Add: noncontrolling interests

 

 

37

 

 

 

37

 

 

 

75

 

 

 

73

 

Net income (including noncontrolling interests)

 

 

1,700

 

 

 

1,612

 

 

 

3,365

 

 

 

3,164

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other charges, net of payments (a)

 

 

(20 )

 

 

 

 

 

(75 )

 

 

(61 )

Depreciation and amortization

 

 

958

 

 

 

960

 

 

 

1,907

 

 

 

1,908

 

Accounts receivable

 

 

(61 )

 

 

(44 )

 

 

(422 )

 

 

(175 )

Contract assets and liabilities, net

 

 

(139 )

 

 

183

 

 

 

(189 )

 

 

117

 

Inventory

 

 

4

 

 

 

(26 )

 

 

(23 )

 

 

(85 )

Payables and accruals

 

 

(328 )

 

 

(394 )

 

 

(393 )

 

 

(458 )

Pension contributions

 

 

(13 )

 

 

(15 )

 

 

(24 )

 

 

(25 )

Deferred income taxes and other

 

 

(172 )

 

 

(126 )

 

 

(263 )

 

 

(327 )

Net cash provided by (used for) operating activities

 

 

1,929

 

 

 

2,150

 

 

 

3,883

 

 

 

4,058

 

Investing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(1,133 )

 

 

(859 )

 

 

(2,181 )

 

 

(1,688 )

Acquisitions, net of cash acquired

 

 

(152 )

 

 

(26 )

 

 

(152 )

 

 

(834 )

Divestitures, net of cash divested and asset sales

 

 

15

 

 

 

21

 

 

 

22

 

 

 

24

 

Net cash provided by (used for) investing activities

 

 

(1,270 )

 

 

(864 )

 

 

(2,311 )

 

 

(2,498 )

Financing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt increase (decrease) - net

 

 

1,320

 

 

 

(1,359 )

 

 

2,535

 

 

 

(642 )

Issuances of ordinary shares

 

 

5

 

 

 

8

 

 

 

21

 

 

 

21

 

Purchases of ordinary shares

 

 

(1,440 )

 

 

(908 )

 

 

(2,481 )

 

 

(1,767 )

Cash dividends - Linde plc shareholders

 

 

(665 )

 

 

(623 )

 

 

(1,334 )

 

 

(1,246 )

Noncontrolling interest transactions and other

 

 

(28 )

 

 

(10 )

 

 

(217 )

 

 

(22 )

Net cash provided by (used for) financing activities

 

 

(808 )

 

 

(2,892 )

 

 

(1,476 )

 

 

(3,656 )

Effect of exchange rate changes on cash and cash equivalents

 

 

(73 )

 

 

1

 

 

 

(134 )

 

 

17

 

Change in cash and cash equivalents

 

 

(222 )

 

 

(1,605 )

 

 

(38 )

 

 

(2,079 )

Cash and cash equivalents, beginning-of-period

 

 

4,848

 

 

 

4,962

 

 

 

4,664

 

 

 

5,436

 

Cash and cash equivalents, end-of-period

 

$ 4,626

 

 

$ 3,357

 

 

$ 4,626

 

 

$ 3,357

 

 

(a) There were no other charges for the quarter and six months ended June 30, 2024 and other charges of $22 million and $40 million for the respective 2023 periods. Related cash outflows were $20 million and $22 million for the quarters ended June 30, 2024 and 2023, respectively, and $75 million and $101 million for the six months ended June 30, 2024 and 2023, respectively.

 

 
Page 7 of 10

 

 

LINDE PLC AND SUBSIDIARIES

SEGMENT INFORMATION

(UNAUDITED)

 

 

 

Quarter Ended June 30,

 

 

Year to Date June 30,

 

(Millions of dollars)

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Sales

 

 

 

 

 

 

 

 

 

 

 

 

Americas

 

$ 3,655

 

 

$ 3,541

 

 

$ 7,215

 

 

$ 7,092

 

EMEA

 

 

2,091

 

 

 

2,160

 

 

 

4,182

 

 

 

4,337

 

APAC

 

 

1,657

 

 

 

1,683

 

 

 

3,248

 

 

 

3,281

 

Engineering

 

 

544

 

 

 

495

 

 

 

1,083

 

 

 

1,035

 

Other

 

 

320

 

 

 

325

 

 

 

639

 

 

 

652

 

Total segment sales

 

$ 8,267

 

 

$ 8,204

 

 

$ 16,367

 

 

$ 16,397

 

 

Operating Profit

 

 

 

 

 

 

 

 

 

 

 

 

Americas

 

$ 1,159

 

 

$ 1,070

 

 

$ 2,247

 

 

$ 2,095

 

EMEA

 

 

704

 

 

 

630

 

 

 

1,391

 

 

 

1,237

 

APAC

 

 

474

 

 

 

472

 

 

 

921

 

 

 

895

 

Engineering

 

 

96

 

 

 

107

 

 

 

196

 

 

 

256

 

Other

 

 

(11 )

 

 

7

 

 

 

8

 

 

 

9

 

Segment operating profit

 

 

2,422

 

 

 

2,286

 

 

 

4,763

 

 

 

4,492

 

Other charges

 

 

 

 

 

(22 )

 

 

 

 

 

(40 )

Purchase accounting impacts - Linde AG

 

 

(238 )

 

 

(253 )

 

 

(484 )

 

 

(508 )

Total operating profit

 

$ 2,184

 

 

$ 2,011

 

 

$ 4,279

 

 

$ 3,944

 

 

 
Page 8 of 10

 

 

LINDE PLC AND SUBSIDIARIES

APPENDIX

NON-GAAP MEASURES AND RECONCILIATIONS

(UNAUDITED)

 

The following Non-GAAP measures are intended to supplement investors’ understanding of the company’s financial information by providing measures which investors, financial analysts and management use to help evaluate the company’s operating performance and liquidity. Items which the company does not believe to be indicative of on-going business trends are excluded from these calculations so that investors can better evaluate and analyze historical and future business trends on a consistent basis. Definitions of these Non-GAAP measures may not be comparable to similar definitions used by other companies and are not a substitute for similar GAAP measures.

 

2024

 

 

2023

 

(Millions of dollars)

 

Year to Date

June 30,

 

 

Q2

 

 

Q1

 

 

Year to Date

June 30,

 

 

Q4

 

 

Q3

 

 

Q2

 

 

Q1

 

Adjusted Operating Profit and Operating Margin

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported operating profit

 

$ 4,279

 

 

$ 2,184

 

 

$ 2,095

 

 

$ 3,944

 

 

$ 2,028

 

 

$ 2,052

 

 

$ 2,011

 

 

$ 1,933

 

Add: Other charges (a)

 

 

 

 

 

 

 

 

 

 

 

40

 

 

 

(2 )

 

 

2

 

 

 

22

 

 

 

18

 

Add: Purchase accounting impacts - Linde AG (c)

 

 

484

 

 

 

238

 

 

 

246

 

 

 

508

 

 

 

246

 

 

 

252

 

 

 

253

 

 

 

255

 

Total adjustments

 

 

484

 

 

 

238

 

 

 

246

 

 

 

548

 

 

 

244

 

 

 

254

 

 

 

275

 

 

 

273

 

Adjusted operating profit

 

$ 4,763

 

 

$ 2,422

 

 

$ 2,341

 

 

$ 4,492

 

 

$ 2,272

 

 

$ 2,306

 

 

$ 2,286

 

 

$ 2,206

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported percentage change

 

 

8 %

 

 

9 %

 

 

8 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted percentage change

 

 

6 %

 

 

6 %

 

 

6 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported sales

 

$ 16,367

 

 

$ 8,267

 

 

$ 8,100

 

 

$ 16,397

 

 

$ 8,302

 

 

$ 8,155

 

 

$ 8,204

 

 

$ 8,193

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported operating margin

 

 

26.1 %

 

 

26.4 %

 

 

25.9 %

 

 

24.1 %

 

 

24.4 %

 

 

25.2 %

 

 

24.5 %

 

 

23.6 %

Adjusted operating margin

 

 

29.1 %

 

 

29.3 %

 

 

28.9 %

 

 

27.4 %

 

 

27.4 %

 

 

28.3 %

 

 

27.9 %

 

 

26.9 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported depreciation and amortization

 

$ 1,907

 

 

$ 958

 

 

$ 949

 

 

$ 1,908

 

 

$ 949

 

 

$ 959

 

 

$ 960

 

 

$ 948

 

Less: Purchase accounting impacts - Linde AG (c)

 

 

(477 )

 

 

(237 )

 

 

(240 )

 

 

(501 )

 

 

(241 )

 

 

(249 )

 

 

(251 )

 

 

(250 )

Adjusted depreciation and amortization

 

$ 1,430

 

 

$ 721

 

 

$ 709

 

 

$ 1,407

 

 

$ 708

 

 

$ 710

 

 

$ 709

 

 

$ 698

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Other Income (Expense) - net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported Other Income (Expense) - net

 

$ 60

 

 

$ 2

 

 

$ 58

 

 

$ (32 )

 

$ (25 )

 

$ 16

 

 

$ (27 )

 

$ (5 )

Add: Purchase accounting impacts - Linde AG (c)

 

 

(7 )

 

 

(1 )

 

 

(6 )

 

 

(7 )

 

 

(5 )

 

 

(3 )

 

 

(2 )

 

 

(5 )

Adjusted Other Income (Expense) - net

 

$ 67

 

 

$ 3

 

 

$ 64

 

 

$ (25 )

 

$ (20 )

 

$ 19

 

 

$ (25 )

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$ (99 )

 

$ (49 )

 

$ (50 )

 

$ (90 )

 

$ (39 )

 

$ (35 )

 

$ (45 )

 

$ (45 )

Add: Pension settlement charges

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4 )

 

 

(12 )

 

 

 

 

 

 

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

 

$ (99 )

 

$ (49 )

 

$ (50 )

 

$ (90 )

 

$ (43 )

 

$ (47 )

 

$ (45 )

 

$ (45 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Interest Expense - Net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported interest expense - net

 

$ 135

 

 

$ 70

 

 

$ 65

 

 

$ 89

 

 

$ 71

 

 

$ 40

 

 

$ 52

 

 

$ 37

 

Add: Purchase accounting impacts - Linde AG (c)

 

 

3

 

 

 

1

 

 

 

2

 

 

 

13

 

 

 

1

 

 

 

2

 

 

 

4

 

 

 

9

 

Adjusted interest expense - net

 

$ 138

 

 

$ 71

 

 

$ 67

 

 

$ 102

 

 

$ 72

 

 

$ 42

 

 

$ 56

 

 

$ 46

 

 

 
Page 9 of 10

 

 

2024

 

 

2023

 

(Millions of dollars)

 

Year to Date

June 30,

 

 

Q2

 

 

Q1

 

 

Year to Date

June 30,

 

 

Q4

 

 

Q3

 

 

Q2

 

 

Q1

 

Adjusted Income Taxes (a)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported income taxes

 

$ 971

 

 

$ 508

 

 

$ 463

 

 

$ 868

 

 

$ 459

 

 

$ 487

 

 

$ 438

 

 

$ 430

 

Add: Purchase accounting impacts - Linde AG (c)

 

 

116

 

 

 

56

 

 

 

60

 

 

 

124

 

 

 

49

 

 

 

59

 

 

 

67

 

 

 

57

 

Add: Pension settlement charges

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

 

 

 

2

 

 

 

 

 

 

 

Add: Other charges (a)

 

 

5

 

 

 

 

 

 

5

 

 

 

79

 

 

 

2

 

 

 

 

 

 

34

 

 

 

45

 

Total adjustments

 

 

121

 

 

 

56

 

 

 

65

 

 

 

203

 

 

 

52

 

 

 

61

 

 

 

101

 

 

 

102

 

Adjusted income taxes

 

$ 1,092

 

 

$ 564

 

 

$ 528

 

 

$ 1,071

 

 

$ 511

 

 

$ 548

 

 

$ 539

 

 

$ 532

 

 

Adjusted Effective Tax Rate (a)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported income before income taxes and equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

investments

 

$ 4,243

 

 

$ 2,163

 

 

$ 2,080

 

 

$ 3,945

 

 

$ 1,996

 

 

$ 2,047

 

 

$ 2,004

 

 

$ 1,941

 

Add: Pension settlement charge

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4

 

 

 

12

 

 

 

 

 

 

 

Add: Purchase accounting impacts - Linde AG (c)

 

 

481

 

 

 

237

 

 

 

244

 

 

 

495

 

 

 

245

 

 

 

250

 

 

 

249

 

 

 

246

 

Add: Other charges (a)

 

 

 

 

 

 

 

 

 

 

 

40

 

 

 

(2 )

 

 

2

 

 

 

22

 

 

 

18

 

Total adjustments

 

 

481

 

 

 

237

 

 

 

244

 

 

 

535

 

 

 

247

 

 

 

264

 

 

 

271

 

 

 

264

 

Adjusted income before income taxes and equity investments

 

$ 4,724

 

 

$ 2,400

 

 

$ 2,324

 

 

$ 4,480

 

 

$ 2,243

 

 

$ 2,311

 

 

$ 2,275

 

 

$ 2,205

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported Income taxes

 

$ 971

 

 

$ 508

 

 

$ 463

 

 

$ 868

 

 

$ 459

 

 

$ 487

 

 

$ 438

 

 

$ 430

 

Reported effective tax rate

 

 

22.9 %

 

 

23.5 %

 

 

22.3 %

 

 

22.0 %

 

 

23.0 %

 

 

23.8 %

 

 

21.9 %

 

 

22.2 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted income taxes

 

$ 1,092

 

 

$ 564

 

 

$ 528

 

 

$ 1,071

 

 

$ 511

 

 

$ 548

 

 

$ 539

 

 

$ 532

 

Adjusted effective tax rate

 

 

23.1 %

 

 

23.5 %

 

 

22.7 %

 

 

23.9 %

 

 

22.8 %

 

 

23.7 %

 

 

23.7 %

 

 

24.1 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from Equity Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported income from equity investments

 

$ 93

 

 

$ 45

 

 

$ 48

 

 

$ 87

 

 

$ 39

 

 

$ 41

 

 

$ 46

 

 

$ 41

 

Add: Purchase accounting impacts - Linde AG (c)

 

 

36

 

 

 

18

 

 

 

18

 

 

 

36

 

 

 

18

 

 

 

18

 

 

 

18

 

 

 

18

 

Adjusted income from equity investments

 

$ 129

 

 

$ 63

 

 

$ 66

 

 

$ 123

 

 

$ 57

 

 

$ 59

 

 

$ 64

 

 

$ 59

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Noncontrolling Interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported noncontrolling interests

 

$ (75 )

 

$ (37 )

 

$ (38 )

 

$ (73 )

 

$ (33 )

 

$ (36 )

 

$ (37 )

 

$ (36 )

Add: Purchase accounting impacts - Linde AG (c)

 

 

(6 )

 

 

(3 )

 

 

(3 )

 

 

(6 )

 

 

(3 )

 

 

(3 )

 

 

(3 )

 

 

(3 )

Adjusted noncontrolling interests

 

$ (81 )

 

$ (40 )

 

$ (41 )

 

$ (79 )

 

$ (36 )

 

$ (39 )

 

$ (40 )

 

$ (39 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Net Income - Linde plc (b)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported net income

 

$ 3,290

 

 

$ 1,663

 

 

$ 1,627

 

 

$ 3,091

 

 

$ 1,543

 

 

$ 1,565

 

 

$ 1,575

 

 

$ 1,516

 

Add: Pension settlement charge

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3

 

 

 

10

 

 

 

 

 

 

 

Add: Other charges (a)

 

 

(5 )

 

 

 

 

 

(5 )

 

 

(39 )

 

 

(4 )

 

 

2

 

 

 

(12 )

 

 

(27 )

Add: Purchase accounting impacts - Linde AG (c)

 

 

395

 

 

 

196

 

 

 

199

 

 

 

401

 

 

 

211

 

 

 

206

 

 

 

197

 

 

 

204

 

Total adjustments

 

 

390

 

 

 

196

 

 

 

194

 

 

 

362

 

 

 

210

 

 

 

218

 

 

 

185

 

 

 

177

 

Adjusted net income - Linde plc

 

$ 3,680

 

 

$ 1,859

 

 

$ 1,821

 

 

$ 3,453

 

 

$ 1,753

 

 

$ 1,783

 

 

$ 1,760

 

 

$ 1,693

 

 

 
Page 9 of 10 cont'd

 

 

 

 

2024

 

 

2023

 

(Millions of dollars, except per share data)

 

Year to Date

June 30,

 

 

Q2

 

 

Q1

 

 

Year to Date

June 30,

 

 

Q4

 

 

Q3

 

 

Q2

 

 

Q1

 

Adjusted Diluted EPS (b)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported diluted EPS

 

$ 6.79

 

 

$ 3.44

 

 

$ 3.35

 

 

$ 6.25

 

 

$ 3.16

 

 

$ 3.19

 

 

$ 3.19

 

 

$ 3.06

 

Add: Pension settlement charge

 

 

 

 

 

 

 

 

 

 

 

 

 

 

0.01

 

 

 

0.02

 

 

 

 

 

 

 

Add: Other charges (a)

 

 

(0.01 )

 

 

 

 

 

(0.01 )

 

 

(0.08 )

 

 

(0.01 )

 

 

 

 

 

(0.02 )

 

 

(0.05 )

Add: Purchase accounting impacts - Linde AG (c)

 

 

0.82

 

 

 

0.41

 

 

 

0.41

 

 

 

0.81

 

 

 

0.43

 

 

 

0.42

 

 

 

0.40

 

 

 

0.41

 

Total adjustments

 

 

0.81

 

 

 

0.41

 

 

 

0.40

 

 

 

0.73

 

 

 

0.43

 

 

 

0.44

 

 

 

0.38

 

 

 

0.36

 

Adjusted diluted EPS

 

$ 7.60

 

 

$ 3.85

 

 

$ 3.75

 

 

$ 6.98

 

 

$ 3.59

 

 

$ 3.63

 

 

$ 3.57

 

 

$ 3.42

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported percentage change

 

 

9 %

 

 

8 %

 

 

9 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted percentage change

 

 

9 %

 

 

8 %

 

 

10 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Third Quarter 2024

Full Year 2024

 

Adjusted Diluted EPS Guidance (d)

 

Low End High End

Low End High End

 

2024 Adjusted Guidance

 

$ 3.82

 

 

$ 3.92

 

 

$ 15.40

 

 

$ 15.60

 

Adjusted percentage changes versus 2023 adjusted diluted EPS

 

 

5 %

 

 

8 %

 

 

8 %

 

 

10 %

Add: Estimated currency headwind/(tailwind)

 

 

1 %

 

 

1 %

 

 

1 %

 

 

1 %

Adjusted percentage change excluding currency

 

 

6 %

 

 

9 %

 

 

9 %

 

 

11 %

 

Adjusted EBITDA and % of Sales

 

 

 

 

 

 

 

 

 

 

Net Income - Linde plc

 

$ 3,290

 

 

$ 1,663

 

 

$ 1,627

 

 

$ 3,091

 

 

$ 1,543

 

 

$ 1,565

 

 

$ 1,575

 

 

$ 1,516

 

Add: Noncontrolling interests

 

 

75

 

 

 

37

 

 

 

38

 

 

 

73

 

 

 

33

 

 

 

36

 

 

 

37

 

 

 

36

 

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

 

 

(99 )

 

 

(49 )

 

 

(50 )

 

 

(90 )

 

 

(39 )

 

 

(35 )

 

 

(45 )

 

 

(45 )

Add: Interest expense

 

 

135

 

 

 

70

 

 

 

65

 

 

 

89

 

 

 

71

 

 

 

40

 

 

 

52

 

 

 

37

 

Add: Income taxes

 

 

971

 

 

 

508

 

 

 

463

 

 

 

868

 

 

 

459

 

 

 

487

 

 

 

438

 

 

 

430

 

Add: Depreciation and amortization

 

 

1,907

 

 

 

958

 

 

 

949

 

 

 

1,908

 

 

 

949

 

 

 

959

 

 

 

960

 

 

 

948

 

EBITDA

 

 

6,279

 

 

 

3,187

 

 

 

3,092

 

 

 

5,939

 

 

 

3,016

 

 

 

3,052

 

 

 

3,017

 

 

 

2,922

 

Add: Other charges (a)

 

 

 

 

 

 

 

 

 

 

 

40

 

 

 

(2 )

 

 

2

 

 

 

22

 

 

 

18

 

Add: Purchase accounting impacts - Linde AG (c)

 

 

43

 

 

 

19

 

 

 

24

 

 

 

43

 

 

 

23

 

 

 

20

 

 

 

20

 

 

 

23

 

Total adjustments

 

 

43

 

 

 

19

 

 

 

24

 

 

 

83

 

 

 

21

 

 

 

22

 

 

 

42

 

 

 

41

 

Adjusted EBITDA

 

$ 6,322

 

 

$ 3,206

 

 

$ 3,116

 

 

$ 6,022

 

 

$ 3,037

 

 

$ 3,074

 

 

$ 3,059

 

 

$ 2,963

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported sales

 

$ 16,367

 

 

$ 8,267

 

 

$ 8,100

 

 

$ 16,397

 

 

$ 8,302

 

 

$ 8,155

 

 

$ 8,204

 

 

$ 8,193

 

% of sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

 

38.4 %

 

 

38.6 %

 

 

38.2 %

 

 

36.2 %

 

 

36.3 %

 

 

37.4 %

 

 

36.8 %

 

 

35.7 %

Adjusted EBITDA as a % of Sales

 

 

38.6 %

 

 

38.8 %

 

 

38.5 %

 

 

36.7 %

 

 

36.6 %

 

 

37.7 %

 

 

37.3 %

 

 

36.2 %

 

(a) The income tax expense (benefit) on the non-GAAP pre-tax adjustments was determined using the applicable tax rates for the jurisdictions that were utilized in calculating the GAAP income tax expense (benefit) and included both current and deferred income tax amounts.

 

(b) Net of income taxes which are shown separately in “Adjusted Income Taxes and Effective Tax Rate”.

 

(c) The company believes that its non-GAAP measures excluding Purchase accounting impacts - Linde AG are useful to investors because: (i) the 2018 business combination was a merger of equals in an all-stock merger transaction, with no cash consideration, (ii)

 

 
Page 9 of 10 cont'd

 

 

the company is managed on a geographic basis and the results of certain geographies are more heavily impacted by purchase accounting than others, causing results that are not comparable at the reportable segment level, therefore, the impacts of purchasing accounting adjustments to each segment vary and are not comparable within the company and when compared to other companies in similar regions, (iii) business management is evaluated and variable compensation is determined based on results excluding purchase accounting impacts, and; (iv) it is important to investors and analysts to understand the purchase accounting impacts to the financial statements.

 

A summary of each of the adjustments made for Purchase accounting impacts - Linde AG are as follows:

 

Adjusted Operating Profit and Margin: The purchase accounting adjustments for the periods presented relate primarily to depreciation and amortization related to the fair value step up of fixed assets and intangible assets (primarily customer related) acquired in the merger and the allocation of fair value step-up for ongoing Linde AG asset disposals (reflected in Other Income/ (Expense)).

 

Adjusted Interest Expense - Net: Relates to the amortization of the fair value of debt acquired in the merger.

 

Adjusted Income Taxes and Effective Tax Rate: Relates to the current and deferred income tax impact on the adjustments discussed above. The income tax expense (benefit) on the non-GAAP pre-tax adjustments was determined using the applicable tax rates for the jurisdictions that were utilized in calculating the GAAP income tax expense (benefit) and included both current and deferred income tax amounts.

 

Adjusted Income from Equity Investments: Represents the amortization of increased fair value on equity investments related to depreciable and amortizable assets.

 

Adjusted Noncontrolling Interests: Represents the noncontrolling interests’ ownership portion of the adjustments described above determined on an entity by entity basis.

 

(d) We are providing adjusted earnings per share (“EPS”) guidance for 2024. This is a non-GAAP financial measure that represents diluted earnings per share (a GAAP measure) but excludes the impact of certain items that we believe are not representative of our underlying business performance, such as cost reduction and other charges and the impact of potential divestitures or other potentially significant items. Given the uncertainty of timing and magnitude of such items, we cannot provide a reconciliation of the differences between the non-GAAP adjusted EPS guidance and the corresponding GAAP EPS measure without unreasonable effort.

 

 
Page 9 of 10 cont'd

 

 

LINDE PLC AND SUBSIDIARIES

APPENDIX

NON-GAAP MEASURES AND RECONCILIATIONS

(UNAUDITED)

 

 

 

2024

 

 

2023

 

(Millions of dollars)

 

Q2

 

 

Q1

 

 

Q4

 

 

Q3

 

Q2

 

Q1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Free Cash Flow (FCF) - Free cash flow is a measure used by investors, financial analysts and management to evaluate the ability of a company to pursue opportunities that enhance shareholder value. FCF equals cash flow from operations less capital expenditures.

 

Operating Cash Flow

 

$ 1,929

 

 

$ 1,954

 

 

$ 2,727

 

 

$ 2,520

 

 

$ 2,150

 

 

$ 1,908

 

Less: Capital Expenditures

 

 

(1,133 )

 

 

(1,048 )

 

 

(1,151 )

 

 

(948 )

 

 

(859 )

 

 

(829 )

Free Cash Flow

 

$ 796

 

 

$ 906

 

 

$ 1,576

 

 

$ 1,572

 

 

$ 1,291

 

 

$ 1,079

 

 

Net Debt - Net debt is a financial liquidity metric used by investors, financial analysts and management to evaluate the ability of a company to repay its debt and is calculated as total debt (excluding purchase accounting impacts) less liquid assets.

 

Debt

 

$ 21,518

 

 

$ 20,319

 

 

$ 19,373

 

 

$ 18,003

 

 

$ 17,490

 

 

$ 18,777

 

Less: Cash and cash equivalents

 

 

(4,626 )

 

 

(4,848 )

 

 

(4,664 )

 

 

(3,894 )

 

 

(3,357 )

 

 

(4,962 )

Net debt

 

 

16,892

 

 

 

15,471

 

 

 

14,709

 

 

 

14,109

 

 

 

14,133

 

 

 

13,815

 

Less: Purchase accounting impacts - Linde AG

 

 

(4 )

 

 

(5 )

 

 

(7 )

 

 

(8 )

 

 

(10 )

 

 

(13 )

Adjusted net debt

 

$ 16,888

 

 

$ 15,466

 

 

$ 14,702

 

 

$ 14,101

 

 

$ 14,123

 

 

$ 13,802

 

 

After-tax Return on Capital and Adjusted After-tax Return on Capital (ROC) - After-tax return on capital is a measure used by investors, financial analysts and management to evaluate the return on net assets employed in the business. ROC measures the after- tax operating profit that the company was able to generate with the investments made by all parties in the business (debt, noncontrolling interests and Linde plc Shareholders’ Equity).

 

Reported net income - Linde plc

 

$ 1,663

 

 

$ 1,627

 

 

$ 1,543

 

 

$ 1,565

 

 

$ 1,575

 

 

$ 1,516

 

Add: noncontrolling interests

 

 

37

 

 

 

38

 

 

 

33

 

 

 

36

 

 

 

37

 

 

 

36

 

Add: interest expense - net

 

 

70

 

 

 

65

 

 

 

71

 

 

 

40

 

 

 

52

 

 

 

37

 

Less: tax benefit on interest expense - net *

 

 

(17 )

 

 

(16 )

 

 

(16 )

 

 

(12 )

 

 

(12 )

 

 

(9 )

Reported NOPAT

 

$ 1,753

 

 

$ 1,714

 

 

$ 1,631

 

 

$ 1,629

 

 

$ 1,652

 

 

$ 1,580

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income - Linde plc

 

$ 1,859

 

 

$ 1,821

 

 

$ 1,753

 

 

$ 1,783

 

 

$ 1,760

 

 

$ 1,693

 

Add: adjusted noncontrolling interests

 

 

40

 

 

 

41

 

 

 

36

 

 

 

39

 

 

 

40

 

 

 

39

 

Add: adjusted interest expense - net

 

 

71

 

 

 

67

 

 

 

72

 

 

 

42

 

 

 

56

 

 

 

46

 

Less: tax benefit on interest expense - net *

 

 

(17 )

 

 

(17 )

 

 

(17 )

 

 

(13 )

 

 

(13 )

 

 

(11 )

Adjusted NOPAT

 

$ 1,953

 

 

$ 1,912

 

 

$ 1,844

 

 

$ 1,851

 

 

$ 1,843

 

 

$ 1,767

 

 

*Tax benefit on interest expense - net is generally presented using the reported effective rate.

 

4-quarter trailing reported NOPAT

 

$ 6,727

 

 

$ 6,626

 

 

$ 6,492

 

 

$ 6,246

 

 

$ 5,930

 

 

$ 4,692

 

4-quarter trailing adjusted NOPAT

 

$ 7,560

 

 

$ 7,450

 

 

$ 7,305

 

 

$ 7,101

 

 

$ 6,863

 

 

$ 6,638

 

 

 
Page 10 of 10

 

                      

 

 

2024

 

 

2023

 

(Millions of dollars)

 

Q2

 

 

Q1

 

 

Q4

 

 

Q3

 

 

Q2

 

 

Q1

 

Equity and redeemable noncontrolling interests:

 

Redeemable noncontrolling interests

 

$ 13

 

 

$ 13

 

 

$ 13

 

 

$ 13

 

 

$ 13

 

 

$ 13

 

Linde plc shareholders' equity

 

 

38,179

 

 

 

38,829

 

 

 

39,720

 

 

 

38,898

 

 

 

39,911

 

 

 

39,970

 

Noncontrolling interests

 

 

1,359

 

 

 

1,387

 

 

 

1,362

 

 

 

1,327

 

 

 

1,324

 

 

 

1,353

 

Total equity and redeemable noncontrolling interests

 

$ 39,551

 

 

$ 40,229

 

 

$ 41,095

 

 

$ 40,238

 

 

$ 41,248

 

 

$ 41,336

 

Reported capital

 

$ 56,443

 

 

$ 55,700

 

 

$ 55,804

 

 

$ 54,347

 

 

$ 55,381

 

 

$ 55,151

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total equity and redeemable noncontrolling interests

 

$ 39,551

 

 

$ 40,229

 

 

$ 41,095

 

 

$ 40,238

 

 

$ 41,248

 

 

$ 41,336

 

Add: Adjusted net debt

 

 

16,888

 

 

 

15,466

 

 

 

14,702

 

 

 

14,101

 

 

 

14,123

 

 

 

13,802

 

Less: Linde AG Goodwill (a)

 

 

24,256

 

 

 

24,256

 

 

 

24,256

 

 

 

24,256

 

 

 

24,256

 

 

 

24,256

 

Less: Linde AG Indefinite lived intangibles (a)

 

 

1,868

 

 

 

1,868

 

 

 

1,868

 

 

 

1,868

 

 

 

1,868

 

 

 

1,868

 

Adjusted capital

 

$ 30,315

 

 

$ 29,571

 

 

$ 29,673

 

 

$ 28,215

 

 

$ 29,247

 

 

$ 29,014

 

(a) Represent opening balance sheet purchase accounting impacts of non-amortizing assets related to the Linde AG merger.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending capital (see above)

 

$ 56,443

 

 

$ 55,700

 

 

$ 55,804

 

 

$ 54,347

 

 

$ 55,381

 

 

$ 55,151

 

5-quarter average ending capital

 

$ 55,535

 

 

$ 55,277

 

 

$ 54,910

 

 

$ 53,853

 

 

$ 53,669

 

 

$ 53,869

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending adjusted capital (see above)

 

$ 30,315

 

 

$ 29,571

 

 

$ 29,673

 

 

$ 28,215

 

 

$ 29,247

 

 

$ 29,014

 

5-quarter average ending adjusted capital

 

$ 29,404

 

 

$ 29,144

 

 

$ 28,774

 

 

$ 27,713

 

 

$ 27,523

 

 

$ 27,715

 

 

After-tax ROC (4 quarter reported NOPAT / 5-quarter average ending capital)

 

 

12.1 %

 

 

12.0 %

 

 

11.8 %

 

 

11.6 %

 

 

11.0 %

 

 

8.7 %

Adjusted after-tax ROC (4 quarter trailing adjusted NOPAT / 5-quarter average ending adjusted capital)

 

 

25.7 %

 

 

25.6 %

 

 

25.4 %

 

 

25.6 %

 

 

24.9 %

 

 

24.0 %

  

 
Page 10 of 10 cont'd