Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2019

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 fair value of derivatives outstanding at March 31, 2019 and December 31, 2018 for consolidated subsidiaries:

					Fair Value
	Notional Amounts				Assets (a)				Liabilities (a)
(Millions of dollars)	March 31, 2019		December 31, 2018		March 31, 2019		December 31, 2018		March 31, 2019		December 31, 2018
Derivatives Not Designated as Hedging Instruments:
Currency contracts:
Balance sheet items	$	6,813	$	6,357	$	68	$	24	$	25	$	42
Forecasted transactions	739		945		13		15		10		17
Interest Rate/Cross-currency interest rate swaps	1,564		2,110		57		112		42		40
Commodity contracts	—		—		—		27		—		9
Total	$	9,116	$	9,412	$	138	$	178	$	77	$	108
Derivatives Designated as Hedging Instruments:
Currency contracts:
Forecasted transactions	$	618	$	158	$	11	$	2	$	8	$	3
Interest Rate/Cross-currency interest rate swaps	301		—		2		—		9		—
Commodity contracts	—		—		14		—		3		—
Forward exchange transactions	58		—		—		—		1		—
Interest rate swaps	2,130		2,164		26		13		—		10
Total Hedges	$	3,107	$	2,322	$	53	$	15	$	21	$	13
Total Derivatives	$	12,223	$	11,734	$	191	$	193	$	98	$	121

(a) Current assets of $108 million are recorded in prepaid and other current assets; long-term assets of $83 million are recorded in other long-term assets; current liabilities of $50 million are recorded in other current liabilities; and long-term liabilities of $48 million are recorded in other long-term liabilities.

Interest Rate Swaps

The following table summarizes the outstanding interest rate swaps for Linde as of March 31, 2019:

	March 31, 2019					December 31, 2018
(Millions of dollars)	US$ Derivative Notional		Change in Fair Value (a)			US$ Derivative Notional		Change in Fair Value (a)
Underlying debt instrument:
1.00% Euro denominated notes due 2028	$	505	$	24		$	516	$	8
0.250% Euro denominated notes due 2022	337		2			344		2
2.00% Euro denominated notes due 2023	280		4			287		2
3.875% Euro denominated notes due 2021	281		1			287		1
5.875% GBP denominated notes due 2023	261		3			254		1
1.75% Euro denominated notes due 2019	225		(2		)	229		(1		)
1.75% Euro denominated notes due 2020	129		—			132		—
1.875% Euro denominated notes due 2024	112		2			115		1
	$	2,130	$	34		$	2,164	$	14

(a) 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:

	Year Terminated	Original Gain / (Loss)			Unrecognized Gain / (Loss) (a)
(Millions of dollars)					March 31, 2019			December 31, 2018
Treasury Rate Locks
Underlying debt instrument:
$500 million 3.00% fixed-rate notes that mature in 2021 (b)	2011	$	(11	)	$	(3	)	$	(3	)
Total - pre-tax					$	(3	)	$	(3	)
Less: income taxes					1			1
After- tax amounts					$	(2	)	$	(2	)

(a) The unrecognized gains / (losses) for the treasury rate locks are shown in 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 on the company’s consolidated statements of income and AOCI for current period gain (loss) recognition.

(b) The notional amount of the treasury rate lock contract is equal to the underlying debt instrument.

Schedule of Derivative Instruments Not Designated as Hedging Instruments Table

The following table summarizes the impact of the company’s derivatives on the consolidated statements of income:

	Amount of Pre-Tax Gain (Loss) Recognized in Earnings *
	Quarter Ended March 31,
(Millions of dollars)	2019			2018
Derivatives Not Designated as Hedging Instruments
Currency contracts:
Balance sheet items
Debt-related	$	194		$	36
Other balance sheet items	(2		)	2
Total	$	192		$	38

* 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. Other balance sheet items and anticipated net income gains (losses) are recorded in the consolidated statements of income as other income (expenses)-net.

Schedule of Derivative Instruments Designated As Hedging Instruments Table

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

Derivatives Designated as Hedging Instruments **

	Quarter Ended
	Amount of Gain  (Loss) Recognized in AOCI					Amount of Gain  (Loss) Reclassified from AOCI to the Consolidated Statement of Income
(Millions of dollars)	March 31, 2019			March 31, 2018		March 31, 2019		March 31, 2018
Currency contracts:
Balance sheet items	$	—		$	—	$	—	$	—
Forecasted purchases	(17		)	—		—		—
Interest rate contracts:
Treasury rate lock contracts	—			—		—		—
Total - pre tax	$	(17	)	$	—	$	—	$	—
Less: income taxes	3			—		—		—
Total - Net of Taxes	$	(14	)	$	—	$	—	$	—

**The gains (losses) on net investment hedges are recorded as a component of AOCI within foreign currency translation adjustments in the condensed consolidated balance sheets and the condensed consolidated statements of comprehensive income. The gains (losses) on treasury rate locks are recorded as a component of AOCI within derivative instruments in the condensed consolidated balance sheets and the condensed consolidated statements of comprehensive income. There was no ineffectiveness for these instruments during 2019 or 2018. 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 the next twelve months.