XML 26 R12.htm IDEA: XBRL DOCUMENT v3.22.0.1
Cost Reduction Programs and Other Charges (Notes)
 12 Months Ended
Dec. 31, 2021
Restructuring and Related Activities [Abstract]  
Cost Reduction Programs and Other Charges COST REDUCTION PROGRAMS AND OTHER CHARGES
Cost reduction programs and other charges were $273 million, $506 million, and $567 million for the 12 months ended December 31, 2021, 2020, and 2019, respectively. After tax and noncontrolling interests, charges were $279 million, $372 million, and $444 million for the same respective periods.
The following tables provide a summary of the pre-tax charges by reportable segment for the years ended December 31, 2021, 2020, and 2019:
Year Ended December 31, 2021
(millions of dollars)Severance costsOther cost reduction chargesTotal cost reduction program related chargesMerger related and other chargesTotal
Americas$4 $2 6 (6)$— 
EMEA204 33 237 1 238 
APAC16 12 28 (50)(22)
Engineering20 6 26 — 26 
Other15 26 41 (10)31 
Total$259 $79 $338 $(65)$273 

Year Ended December 31, 2020
(millions of dollars)Severance costsOther cost reduction chargesTotal cost reduction program related chargesMerger related and other chargesTotal
Americas$35 $24 59 13 $72 
EMEA131 21 152 3 155 
APAC7 2 9 3 12 
Engineering38 28 66 4 70 
Other87 18 105 92 197 
Total$298 $93 $391 $115 $506 

Year Ended December 31, 2019
(millions of dollars)Severance costsOther cost reduction chargesTotal cost reduction program related chargesMerger related and other chargesTotal
Americas$36 $20 56 34 $90 
EMEA105 16 121 21 142 
APAC40 10 50 72 122 
Engineering1 12 13 (9)4 
Other22 42 64 145 209 
Total$204 $100 $304 $263 $567 

Cost Reduction Programs
In 2019, Linde initiated a cost reduction program, which represents charges of achieving synergies and cost efficiencies expected from the merger of Praxair and Linde AG (see Note 2). Total charges related to the cost reduction programs were $338 million ($253 million, after tax), $391 million ($277 million, after tax and noncontrolling interests), and $304 million ($233 million, after tax) for the years ended December 31, 2021, 2020, and 2019, respectively.
Severance costs
During the year ended December 31, 2021, severance costs of $259 million were recorded for the elimination of approximately 2,000 positions. Severance costs of $298 million and $204 million for the years ended December 31, 2020 and December 31, 2019 were recorded for the elimination of approximately 3,100 and 2,400 positions, respectively. As of December 31, 2021, the majority of the actions have been taken, with the remaining actions planned to be completed within the next 12 months.
Other cost reduction charges
Other cost reduction charges were $79 million, $93 million, and $100 million for the years ended December 31, 2021, 2020, and 2019, respectively. These amounts primarily represent charges related to the execution of the company's
synergistic actions including location consolidations and business rationalization projects, software and process harmonization, and associated non-recurring costs.
Merger-Related Costs and Other Charges
Merger-related costs and other charges were a benefit of $65 million ($26 million, after tax) and charges of $115 million ($95 million, after tax) and $263 million ($211 million, after tax and noncontrolling interests) for the years ended December 31, 2021, 2020, and 2019, respectively. The 2021 pretax benefit was primarily due to a $52 million gain triggered by a joint venture deconsolidation in the APAC segment in the first quarter (see Note 2). After-tax charges also include the impact of the below items.
2021 after-tax charges include a net income tax charge of $56 million, primarily related to (i) $83 million of expense due to the revaluation of a net deferred tax liability resulting from a tax rate increase in the United Kingdom which was enacted in the second quarter, and (ii) a tax settlement benefit of $33 million. 2021 also includes an impairment charge of $35 million ($35 million, after tax) related to a joint venture in the APAC segment. The charge is shown within income from equity investments in the consolidated statements of income.
2019 includes other charges for an asset impairment related to a joint venture in APAC of approximately $73 million ($42 million, after tax and noncontrolling interests) resulting from an unfavorable arbitration ruling.
Cash Requirements
Total cash requirements of the cost reduction program and other charges incurred during the twelve months ended December 31, 2021 are estimated to be approximately $259 million, of which $175 million was paid through December 31, 2021. Remaining cash requirements are expected to be paid through 2023. Total cost reduction programs and other charges, net of payments in the consolidated statements of cash flows for the twelve months ended December 31, 2021 and 2020 also reflect the impact of cash payments of liabilities, including merger-related tax liabilities, accrued as of December 31, 2020 and 2019, respectively.

The following table summarizes the activities related to the company's cost reduction programs and other charges during 2020 and 2021:
(millions of dollars)Severance costsOther cost reduction chargesTotal cost reduction program related chargesMerger related and other chargesTotal
Balance, December 31, 2019
$117 $16 $133 $67 $200 
2020 Cost Reduction Programs and Other Charges298 93 391 115 506 
Less: Cash payments(156)(20)(176)(45)(221)
Less: Non-cash charges— (68)(68)(82)(150)
Foreign currency translation and other24 1 25 9 34 
Balance, December 31, 2020
$283 $22 $305 $64 $369 
2021 Cost Reduction Programs and Other Charges259 79 338 (65)273 
Less: Cash payments(138)(15)(153)(22)(175)
Less: Non-cash charges— (41)(41)54 13 
Foreign currency translation and other(20)(7)(27)— (27)
Balance, December 31, 2021
$384 $38 $422 $31 $453 

Classification in the consolidated financial statements
The pre-tax charges for each year are shown within operating profit in a separate line item on the consolidated statements of income. In the consolidated balance sheets, reductions in assets are recorded against the carrying value of the related assets and unpaid amounts are recorded as other current or long-term liabilities (see Note 7). On the consolidated statements of cash flows, the pre-tax impact of these charges, net of cash payments, is shown as an adjustment to reconcile net income to net cash provided by operating activities. In Note 18 Segment Information, Linde excluded these charges from its management definition of segment operating profit; a reconciliation of segment operating profit to consolidated operating profit is shown within the segment operating profit table.