Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

The following table is a summary of the notional amount and gross fair values of derivatives outstanding at December 31, 2018 and 2017 for consolidated subsidiaries:

					Fair Value
(Millions of dollars)	Notional Amounts				Assets (a)				Liabilities (a)
December 31,	2018		2017		2018		2017		2018		2017
Derivatives Not Designated as Hedging Instruments:
Currency contracts:
Balance sheet items	$	6,357	$	2,693	$	24	$	16	$	42	$	16
Forecasted transactions	945		—		15		—		17		—
Interest rate/Cross-currency interest rate swaps	2,110		—		112		—		40		—
Commodity contracts	—		—		27		—		9		—
Derivatives Designated as Hedging Instruments:
Currency contracts:
Balance sheet items	$	—	$	38	$	—	$	—	$	—	$	2
Forecasted transactions	158		4		2		1		3		—
Interest rate contracts:
Interest rate swaps	2,164		475		13		—		10		—
Total Hedges	$	2,322	$	517	$	15	$	1	$	13	$	2
Total Derivatives	$	11,734	$	3,210	$	193	$	17	$	121	$	18

(a) Current assets of $67 million are recorded in prepaid and other current assets; long-term assets of $126 million are recorded in other long-term assets; current liabilities of $78 million are recorded in other current liabilities; and long-term liabilities of $43 million are recorded in other long-term liabilities.

Derivative Instruments Fair Value and Notional Amounts

The following table summarizes the outstanding interest rate swaps for Linde as of December 31, 2018:

	2018					2017
(Millions of dollars)	US$ Derivative Notional		Change in Fair Value (b)			US$ Derivative Notional		Change in Fair Value
Underlying debt instrument:
1.00% Euro denominated notes due 2028	$	516	$	8		$	—	$	—
1.25% Notes due 2018 (a)	—		—			475		—
0.250% Euro denominated notes due 2022	344		2			—		—
2.00% Euro denominated notes due 2023	287		2			—		—
3.875% Euro denominated notes due 2021	287		1			—		—
5.875% GBP denominated notes due 2023	254		1			—		—
1.75% Euro denominated notes due 2019	229		(1		)	—		—
1.75% Euro denominated notes due 2020	132		—			—		—
1.875% Euro denominated notes due 2024	115		1			—		—
	$	2,164	$	14		$	475	$	—

________________________

(a) At December 31, 2017, Praxair had one outstanding interest rate swap agreement with a $475 million notional amount related to the $475 million1.25% notes maturing in November 2018. The increase in the fair value of this note was less than $1 million. In November 2018 the notes were repaid and the associated fixed-to-variable interest rate swap was settled.

(b) In connection with the merger, Linde AG's assets and liabilities were measured at estimated fair value as of October 31, 2018.

Schedule Of Treasury Rate Lock Contracts

The following table summarizes the unrecognized gains (losses) related to terminated treasury rate lock contracts:

					Unrecognized Gain / (Loss) (a)
(Millions of dollars)	Year Terminated	Original Gain / (Loss)			12/31/2018			12/31/2017
Treasury Rate Locks
Underlying debt instrument:
$500 million 2.20% fixed-rate notes that mature in 2022 (b)	2012	$	(2	)	$	—		$	(1	)
$500 million 3.00% fixed-rate notes that mature in 2021 (b)	2011	(11		)	(3		)	(4		)
$600 million 4.50% fixed-rate notes that mature in 2019 (b,c)	2009	16			—			3
Total – pre-tax					$	(3	)	$	(2	)
Less: income taxes					1			1
After- tax amounts					$	(2	)	$	(1	)

________________________

(a) The unrecognized gains / (losses) for the treasury rate locks are shown in accumulated other comprehensive income ("AOCI") and are being recognized on a straight line basis to interest expense – net over the term of the underlying debt agreements. Refer to the table below summarizing the impact of the company’s consolidated statements of income and AOCI for current period gain (loss) recognition.

(b) The notional amount of the treasury rate lock contracts are equal to the underlying debt instrument with the exception of the treasury rate lock contract entered into to hedge the $600 million4.50% fixed-rate notes that mature in 2019. The notional amount of this contract was $500 million.

(c) In December 2018, Linde repaid $600 million of 4.50% notes that mature in 2019. The unrecognized gain on the associated treasury rate lock was reclassified from other comprehensive income to interest expense.

Schedule of Derivative Instruments Not Designated as Hedging Instruments

The following table summarizes the impact of the company's derivatives not designated as hedging instruments on the consolidated statements of income:

(Millions of dollars)	Amount of Pre-Tax Gain (Loss)     Recognized in Earnings *
December 31,	2018			2017		2016
Derivatives Not Designated as Hedging Instruments
Currency contracts:
Balance sheet items:
Debt-related	$	(118	)	$	121	$	21
Other balance sheet items	3			—		4
Total	$	(115	)	$	121	$	25

* The gains (losses) on balance sheet items are offset by gains (losses) recorded on the underlying hedged assets and liabilities. Accordingly, the gains (losses) for the derivatives and the underlying hedged assets and liabilities related to debt items are recorded in the consolidated statements of income as interest expense-net. The gains (losses) on other balance sheet items are recorded in the consolidated statements of income as other income (expenses)-net.

Schedule of Derivative Instruments Designated As Hedging Instruments

The following table summarizes the impact of the company's derivatives designated as hedging instruments that impact AOCI:

(Millions of dollars)	Amount of Gain (Loss) Recognized in AOCI								Amount of Gain (Loss) Reclassified from AOCI to the Consolidated Statement of Income
December 31,	2018		2017			2016			2018			2017		2016
Derivatives Designated as Hedging Instruments**
Currency contracts:
Net investment hedge	$	—	$	—		$	(4	)	$	—		$	—	$	—
Forecasted transactions	—		1			—			—			—		—
Balance sheet items	—		(1		)	1			—			—		—
Interest rate contracts:
Treasury rate locks	—		—			—			(1		)	—		(1		)
Total – Pre tax	$	—	$	—		$	(3	)	$	(1	)	$	—	$	(1	)
Less: income taxes	—		—			—			—			—		1
Total - Net of Taxes	$	—	$	—		$	(3	)	$	(1	)	$	—	$	—

** The gains (losses) on net investment hedges are recorded as a component of AOCI within foreign currency translation adjustments in the consolidated balance sheets and consolidated statements of comprehensive income. The gains (losses) on forecasted purchases, balance sheet items, and treasury rate locks are recorded as a component of AOCI within derivative instruments in the consolidated balance sheets and the consolidated statements of comprehensive income. There was no ineffectiveness for these instruments during 2018 or 2017. The gains (losses) on net investment hedges are reclassified to earnings only when the related currency translation adjustments are required to be reclassified, usually upon sale or liquidation of the investment. The gains (losses) for interest rate contracts are reclassified to earnings as interest expense –net on a straight-line basis over the remaining maturity of the underlying debt. Net losses of less than $1 million are expected to be reclassified to earnings during 2019.