EX-99.1 2 lin_ex991.htm PRESS RELEASE lin_ex991.htm

 

 

 

Linde Reports Second-Quarter 2022 Results

 

Second-Quarter Highlights

 

➢

 Sales $8.5 billion, up 12% versus prior-year quarter

 

➢

 Operating profit $0.6 billion; adjusted operating profit $2.0 billion, up 8%

 

➢

 Operating profit margin 7.0%; adjusted operating profit margin 23.5%, up 100 basis points ex. cost pass-through

 

➢

 EPS $0.74; adjusted EPS $3.10, up 15%

 

➢

Operating cash flow of $2.1 billion, up 17% versus prior-year quarter

 

➢

 Increased full-year 2022 adjusted EPS guidance to $11.73 - $11.93,represents 10% to 12% growth year-over-year, 15% to 17% ex. FX

 

Woking, UK, July 28, 2022 – Linde plc (NYSE: LIN; FWB: LIN) today reported second-quarter 2022 income from continuing operations of $372 million and diluted earnings per share of $0.74. Excluding charges primarily from the deconsolidation and impairment of Russian subsidiaries and purchase accounting impacts from the Linde AG merger, adjusted income from continuing operations was $1,566 million, up 11% versus prior year. Adjusted earnings per share was $3.10, 15% above prior year and 6% higher sequentially.

 

Linde’s sales for the second quarter were $8,457 million, 12% above prior year. Compared to prior year, underlying sales increased 9%, including 7% price attainment and 2% higher volumes, driven by growth in all end markets except healthcare. Sequentially, underlying sales grew 4% driven by higher price and volume, each growing 2%.

 

Second-quarter operating profit was $589 million. Adjusted operating profit of $1,988 million was up 8% versus prior year led by higher price, strong volumes and continued productivity initiatives across all segments. Excluding the effects of cost pass-through, adjusted operating margins expanded 100 basis points versus prior year.

 

Second-quarter operating cash flow of $2,133 million more than covered capital expenditures of $826 million resulting in free cash flow of $1,307 million. During the quarter, the company returned $2,183 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 strong quarter with EPS increasing 15% versus prior year or 20% excluding currency translation. Furthermore, ROC reached a new record of 20% and operating margins expanded 100 basis points excluding cost-pass through. Despite the macroeconomic challenges, Linde once again demonstrated its resiliency and the ability to generate shareholder value in any environment.”

 

Lamba continued, “Looking ahead, the geopolitical and macro environment continues to be very uncertain. Regardless, I have confidence the company will continue to deliver on its commitments to shareholders.”

 

For the third quarter of 2022, Linde expects adjusted diluted earnings per share in the range of $2.85 to $2.95, up 4% to 8% versus prior-year quarter. This guidance assumes a currency headwind of 6% year-over-year and 3% sequentially.

 

For the full year 2022, the company expects adjusted diluted earnings per share to be in the range of $11.73 to $11.93, up 10% to 12% versus prior year or 15% to 17% excluding currency headwind. Note that all Russian earnings are excluded prospectively as of July 1, 2022. Full-year capital expenditures are expected to be in the range of $3.0 billion to $3.4 billion to support growth and maintenance requirements including the $3.6 billion contractual sale of gas project backlog.

 

 
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Second-Quarter 2022 Results by Segment

 

Americas sales of $3,518 million grew 16% versus prior-year quarter and 9% sequentially. Compared with second quarter 2021, underlying sales increased 9% driven by 6% higher pricing and 3% higher volume, primarily in the manufacturing, chemicals and energy end markets. Sequentially, underlying sales grew 4%, with pricing and volume each up 2%. Operating profit of $910 million was 25.9% of sales, 290 basis points below prior year or 90 basis points lower when excluding the effects of cost pass-through.

 

APAC (Asia Pacific) sales of $1,651 million were 7% above prior year and up 3% sequentially. Compared to prior year, underlying sales grew 8% driven by 5% price attainment and 3% volume growth, primarily from project start-ups in the electronics, chemicals and energy end markets. Sequentially, underlying sales grew 6% with pricing up 1% and volume growing 5%. Operating profit of $426 million was 25.8% of sales, 60 basis points above prior year or 160 basis points higher when excluding the effects of cost pass-through.

 

EMEA (Europe, Middle East & Africa) sales of $2,144 million were up 14% versus prior year and flat sequentially. Compared with second-quarter 2021, underlying sales grew 11%, led by 12% higher pricing. Sequentially, underlying sales grew 3% driven by pricing. Operating profit of $536 million was 25.0% of sales, 100 basis points below prior year or 220 basis points higher when excluding the effects of cost pass-through.

 

Linde Engineering sales were $644 million, flat versus prior year, and operating profit was $105 million or 16.3% of sales. Order intake for the quarter was $1,004 million and third-party sale of plant backlog increased to $2.9 billion.

 

Earnings Call

A teleconference on Linde’s second-quarter 2022 results is being held today at 09:00 am EDT.

 

Live conference call

US Toll-Free Dial-In Number: 1 800 289 0720

Germany Toll-Free Dial-In Number: 0800 724 5376

UK Toll-Free Dial-In Number: 0800 279 6877

Access code: 7250132

Live webcast (listen-only)

https://investors.linde.com/events-presentations

Short URL: https://t1p.de/i2ho

 

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 2021 sales of $31 billion (€26 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 and protect our planet.

 

The company serves a variety of end markets including chemicals & energy, food & beverage, electronics, healthcare, manufacturing, metals and mining. Linde’s industrial gases are used in countless applications, from life-saving oxygen for hospitals to high-purity & specialty gases for electronics manufacturing, hydrogen for clean fuels and much more. 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

 

 

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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 2022. 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 are enacted that 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.

 

Russia-Ukraine conflict and other charges

In response to the Russian invasion of Ukraine, multiple jurisdictions, including Europe and the U.S., have imposed several tranches of economic sanctions on Russia. As a result, Linde has reassessed its ability to control its Russian subsidiaries and determined that as of June 30, 2022 it can no longer exercise control over these entities. As such, Linde has deconsolidated its Russian gas and engineering business entities as of June 30, 2022. The impact of the deconsolidation and related impairments is reflected in the Russia-Ukraine conflict and other charges of $993 million for quarter ended June 30, 2022.

 

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, 2021 filed with the SEC on February 28, 2022 which should be reviewed carefully. Please consider Linde plc’s forward-looking statements in light of those risks.

 

 

Page 3/15

 

 

 

Page 4 of 15

 

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

 

 

Income from

Continuing

Operations

 

 

Diluted EPS from

Continuing Operations

 

Quarter Ended June 30

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Reported GAAP Amounts

 

 $ 8,457

 

 

 $ 7,584

 

 

 $ 589

 

 

 $ 1,142

 

 

 $ 372

 

 

 $ 840

 

 

 $ 0.74

 

 

 $ 1.60

 

Russia-Ukraine conflict and other charges (a)

 

 

 —

 

 

 

 —

 

 

 

 993

 

 

 

 204

 

 

 

 889

 

 

 

 198

 

 

 

 1.76

 

 

 

 0.38

 

Purchase accounting impacts - Linde AG (b)

 

 

 —

 

 

 

 —

 

 

 

 406

 

 

 

 491

 

 

 

 305

 

 

 

 377

 

 

 

 0.60

 

 

 

 0.72

 

Total adjustments

 

 

 —

 

 

 

 —

 

 

 

 1,399

 

 

 

 695

 

 

 

 1,194

 

 

 

 575

 

 

 

 2.36

 

 

 

 1.10

 

Adjusted amounts

 

 $ 8,457

 

 

 $ 7,584

 

 

 $ 1,988

 

 

 $ 1,837

 

 

 $ 1,566

 

 

 $ 1,415

 

 

 $ 3.10

 

 

 $ 2.70

 

 

(Millions of dollars, except per share amounts)

 

Sales

 

 

Operating Profit

 

 

Income from

Continuing

Operations

 

 

Diluted EPS from

Continuing Operations

 

Year to Date June 30

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Reported GAAP Amounts

 

 $ 16,668

 

 

 $ 14,827

 

 

 $ 2,069

 

 

 $ 2,355

 

 

 $ 1,546

 

 

 $ 1,819

 

 

 $ 3.04

 

 

 $ 3.46

 

Russia-Ukraine conflict and other charges (a)

 

 

 —

 

 

 

 —

 

 

 

 989

 

 

 

 196

 

 

 

 888

 

 

 

 170

 

 

 

 1.75

 

 

 

 0.32

 

Purchase accounting impacts - Linde AG (b)

 

 

 —

 

 

 

 —

 

 

 

 835

 

 

 

 974

 

 

 

 632

 

 

 

 738

 

 

 

 1.24

 

 

 

 1.41

 

Total adjustments

 

 

 —

 

 

 

 —

 

 

 

 1,824

 

 

 

 1,170

 

 

 

 1,520

 

 

 

 908

 

 

 

 2.99

 

 

 

 1.73

 

Adjusted amounts

 

 $ 16,668

 

 

 $ 14,827

 

 

 $ 3,893

 

 

 $ 3,525

 

 

 $ 3,066

 

 

 $ 2,727

 

 

 $ 6.03

 

 

 $ 5.19

 

 

(a) 2022 charges relate primarily to charges associated with the deconsolidation and impairment of Russian subsidiaries resulting from the ongoing war in Ukraine and related sanctions.2021 charges relate to cost reduction program and other charges, primarily severance.

 

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

 

 

 

 

 

 

Page 5 of 15

 

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)

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Sales

 

 $ 8,457

 

 

 $ 7,584

 

 

 $ 16,668

 

 

 $ 14,827

 

Cost of sales

 

 

 4,940

 

 

 

 4,194

 

 

 

 9,738

 

 

 

 8,248

 

Selling, general and administrative

 

 

 771

 

 

 

 822

 

 

 

 1,573

 

 

 

 1,609

 

Depreciation and amortization

 

 

 1,091

 

 

 

 1,171

 

 

 

 2,203

 

 

 

 2,337

 

Research and development

 

 

 37

 

 

 

 34

 

 

 

 72

 

 

 

 69

 

Russia-Ukraine conflict and other charges

 

 

 993

 

 

 

 204

 

 

 

 989

 

 

 

 196

 

Other income (expense) - net

 

 

 (36 )

 

 

 (17 )

 

 

 (24 )

 

 

 (13 )

Operating Profit

 

 

 589

 

 

 

 1,142

 

 

 

 2,069

 

 

 

 2,355

 

Interest expense - net

 

 

 5

 

 

 

 18

 

 

 

 14

 

 

 

 38

 

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

 

 

 (62 )

 

 

 (49 )

 

 

 (126 )

 

 

 (98 )

Income From Continuing Operations Before Income Taxes and Equity Investments

 

 

 646

 

 

 

 1,173

 

 

 

 2,181

 

 

 

 2,415

 

Income taxes

 

 

 286

 

 

 

 334

 

 

 

 655

 

 

 

 602

 

Income From Continuing Operations Before Equity Investments

 

 

 360

 

 

 

 839

 

 

 

 1,526

 

 

 

 1,813

 

Income from equity investments

 

 

 50

 

 

 

 37

 

 

 

 94

 

 

 

 80

 

Income From Continuing Operations (Including Noncontrolling Interests)

 

 

 410

 

 

 

 876

 

 

 

 1,620

 

 

 

 1,893

 

Add: income from discontinued operations, net of tax

 

 

 —

 

 

 

 1

 

 

 

 —

 

 

 

 2

 

Income (Including Noncontrolling Interests)

 

 

 410

 

 

 

 877

 

 

 

 1,620

 

 

 

 1,895

 

Less: noncontrolling interests from continuing operations

 

 

 (38 )

 

 

 (36 )

 

 

 (74 )

 

 

 (74 )

Net Income – Linde plc

 

 $ 372

 

 

 $ 841

 

 

 $ 1,546

 

 

 $ 1,821

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income – Linde plc

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

 $ 372

 

 

 $ 840

 

 

 $ 1,546

 

 

 $ 1,819

 

Income from discontinued operations

 

 $ —

 

 

 $ 1

 

 

 $ —

 

 

 $ 2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per Share Data – Linde plc Shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share from continuing operations

 

 $ 0.74

 

 

 $ 1.62

 

 

 $ 3.07

 

 

 $ 3.49

 

Basic earnings per share from discontinued operations

 

 

 —

 

 

 

 —

 

 

 

 —

 

 

 

 —

 

Basic earnings per share

 

 $ 0.74

 

 

 $ 1.62

 

 

 $ 3.07

 

 

 $ 3.49

 

Diluted earnings per share from continuing operations

 

 $ 0.74

 

 

 $ 1.60

 

 

 $ 3.04

 

 

 $ 3.46

 

Diluted earnings per share from discontinued operations

 

 

 —

 

 

 

 —

 

 

 

 —

 

 

 

 —

 

Diluted earnings per share

 

 $ 0.74

 

 

 $ 1.60

 

 

 $ 3.04

 

 

 $ 3.46

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends

 

 $ 1.17

 

 

 $ 1.06

 

 

 $ 2.34

 

 

 $ 2.12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Shares Outstanding (000’s):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic shares outstanding (000’s)

 

 

 501,034

 

 

 

 518,950

 

 

 

 504,093

 

 

 

 520,691

 

Diluted shares outstanding (000’s)

 

 

 505,269

 

 

 

 523,723

 

 

 

 508,432

 

 

 

 525,380

 

 

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

 

 

 

 

 

 

Page 6 of 15

 

LINDE PLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET

(UNAUDITED)

 

 

 

June 30,

 

 

December 31,

 

(Millions of dollars)

 

2022

 

 

2021

 

Assets

 

 

 

 

 

 

Cash and cash equivalents

 

 $ 3,655

 

 

 $ 2,823

 

Accounts receivable - net

 

 

 4,803

 

 

 

 4,499

 

Contract assets

 

 

 78

 

 

 

 134

 

Inventories

 

 

 1,786

 

 

 

 1,733

 

Prepaid and other current assets

 

 

 950

 

 

 

 970

 

Total Current Assets

 

 

 11,272

 

 

 

 10,159

 

Property, plant and equipment - net

 

 

 23,993

 

 

 

 26,003

 

Goodwill

 

 

 25,678

 

 

 

 27,038

 

Other intangibles - net

 

 

 12,634

 

 

 

 13,802

 

Other long-term assets

 

 

 4,308

 

 

 

 4,603

 

Total Assets

 

 $ 77,885

 

 

 $ 81,605

 

Liabilities and equity

 

 

 

 

 

 

 

 

Accounts payable

 

 $ 3,360

 

 

 $ 3,503

 

Short-term debt

 

 

 3,215

 

 

 

 1,163

 

Current portion of long-term debt

 

 

 1,651

 

 

 

 1,709

 

Contract liabilities

 

 

 2,933

 

 

 

 2,940

 

Other current liabilities

 

 

 4,136

 

 

 

 4,328

 

Total Current Liabilities

 

 

 15,295

 

 

 

 13,643

 

Long-term debt

 

 

 11,177

 

 

 

 11,335

 

Other long-term liabilities

 

 

 10,373

 

 

 

 11,186

 

Total Liabilities

 

 $ 36,845

 

 

 $ 36,164

 

Redeemable noncontrolling interests

 

 

 13

 

 

 

 13

 

Linde plc Shareholders’ Equity

 

 

 

 

 

 

 

 

Ordinary shares

 

 

 1

 

 

 

 1

 

Additional paid-in capital

 

 

 39,978

 

 

 

 40,180

 

Retained earnings

 

 

 19,159

 

 

 

 18,710

 

Accumulated other comprehensive income (loss)

 

 

 (6,466 )

 

 

 (5,048 )

Less: Treasury shares, at cost

 

 

 (12,998 )

 

 

 (9,808 )

Total Linde plc shareholders’ equity

 

 

 39,674

 

 

 

 44,035

 

Noncontrolling interests

 

 

 1,353

 

 

 

 1,393

 

Total Equity

 

 $ 41,027

 

 

 $ 45,428

 

Total Liabilities and Equity

 

 $ 77,885

 

 

 $ 81,605

 

 

 

 

 

 

 

Page 7 of 15

 

LINDE PLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(UNAUDITED)

 

 

 

Quarter Ended June 30,

 

 

Year to Date June 30,

 

(Millions of dollars)

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Operations

 

 

 

 

 

 

 

 

 

 

 

 

Net income - Linde plc

 

 $ 372

 

 

 $ 841

 

 

 $ 1,546

 

 

 $ 1,821

 

Less: income from discontinued operations, net of tax and noncontrolling interests

 

 

 —

 

 

 

 (1 )

 

 

 —

 

 

 

 (2 )

Add: noncontrolling interests

 

 

 38

 

 

 

 36

 

 

 

 74

 

 

 

 74

 

Net income (including noncontrolling interests)

 

 

 410

 

 

 

 876

 

 

 

 1,620

 

 

 

 1,893

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Russia-Ukraine conflict and other charges, net of payments (a)

 

 

 956

 

 

 

 171

 

 

 

 922

 

 

 

 95

 

Depreciation and amortization

 

 

 1,091

 

 

 

 1,171

 

 

 

 2,203

 

 

 

 2,337

 

Accounts receivable

 

 

 (203 )

 

 

 (210 )

 

 

 (543 )

 

 

 (388 )

Contract assets and liabilities, net

 

 

 51

 

 

 

 (140 )

 

 

 243

 

 

 

 51

 

Inventory

 

 

 (109 )

 

 

 18

 

 

 

 (144 )

 

 

 (42 )

Payables and accruals

 

 

 19

 

 

 

 (30 )

 

 

 70

 

 

 

 39

 

Pension contributions

 

 

 (6 )

 

 

 (16 )

 

 

 (19 )

 

 

 (28 )

Deferred income taxes and other

 

 

 (76 )

 

 

 (13 )

 

 

 (219 )

 

 

 (21 )

Net cash provided by operating activities

 

 

 2,133

 

 

 

 1,827

 

 

 

 4,133

 

 

 

 3,936

 

Investing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

 

 (826 )

 

 

 (744 )

 

 

 (1,475 )

 

 

 (1,506 )

Acquisitions, net of cash acquired

 

 

 (6 )

 

 

 (21 )

 

 

 (49 )

 

 

 (31 )

Divestitures and asset sales

 

 

 (10 )

 

 

 56

 

 

 

 17

 

 

 

 77

 

Net cash provided by (used for) investing activities

 

 

 (842 )

 

 

 (709 )

 

 

 (1,507 )

 

 

 (1,460 )

Financing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt increase (decrease) - net

 

 

 214

 

 

 

 (367 )

 

 

 2,760

 

 

 

 314

 

Issuances of ordinary shares

 

 

 12

 

 

 

 15

 

 

 

 22

 

 

 

 32

 

Purchases of ordinary shares

 

 

 (1,610 )

 

 

 (1,214 )

 

 

 (3,329 )

 

 

 (2,082 )

Cash dividends - Linde plc shareholders

 

 

 (585 )

 

 

 (549 )

 

 

 (1,177 )

 

 

 (1,102 )

Noncontrolling interest transactions and other

 

 

 (34 )

 

 

 (30 )

 

 

 (35 )

 

 

 (277 )

Net cash provided by (used for) financing activities

 

 

 (2,003 )

 

 

 (2,145 )

 

 

 (1,759 )

 

 

 (3,115 )

Effect of exchange rate changes on cash and cash equivalents

 

 

 (97 )

 

 

 68

 

 

 

 (35 )

 

 

 22

 

Change in cash and cash equivalents

 

 

 (809 )

 

 

 (959 )

 

 

 832

 

 

 

 (617 )

Cash and cash equivalents, beginning-of-period

 

 

 4,464

 

 

 

 4,096

 

 

 

 2,823

 

 

 

 3,754

 

Cash and cash equivalents, end-of-period

 

 $ 3,655

 

 

 $ 3,137

 

 

 $ 3,655

 

 

 $ 3,137

 

 

(a) Russia-Ukraine conflict and other charges were $993 million and $204 million for the quarters ended June 30, 2022 and 2021, respectively, and $989 million and $196 million for the six months ended June 30, 2022 and 2021, respectively. Related cash outflows were $37 million and $33 million for the quarters ended June 30, 2022 and 2021, respectively, and $67 million and $101 million for the six months ended June 30, 2022 and 2021, respectively.

 

 

 

 

 

 

Page 8 of 15

 

LINDE PLC AND SUBSIDIARIES

SEGMENT INFORMATION

(UNAUDITED)

 

 

 

Quarter Ended June 30,

 

 

Year to Date June 30,

 

(Millions of dollars)

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Sales

 

 

 

 

 

 

 

 

 

 

 

 

Americas

 

 $ 3,518

 

 

 $ 3,020

 

 

 $ 6,759

 

 

 $ 5,860

 

EMEA

 

 

 2,144

 

 

 

 1,875

 

 

 

 4,292

 

 

 

 3,674

 

APAC

 

 

 1,651

 

 

 

 1,544

 

 

 

 3,253

 

 

 

 2,980

 

Engineering

 

 

 644

 

 

 

 646

 

 

 

 1,372

 

 

 

 1,320

 

Other

 

 

 500

 

 

 

 499

 

 

 

 992

 

 

 

 993

 

Total segment sales

 

 $ 8,457

 

 

 $ 7,584

 

 

 $ 16,668

 

 

 $ 14,827

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Profit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Americas

 

 $ 910

 

 

 $ 871

 

 

 $ 1,814

 

 

 $ 1,666

 

EMEA

 

 

 536

 

 

 

 487

 

 

 

 1,039

 

 

 

 938

 

APAC

 

 

 426

 

 

 

 389

 

 

 

 825

 

 

 

 740

 

Engineering

 

 

 105

 

 

 

 108

 

 

 

 248

 

 

 

 217

 

Other

 

 

 11

 

 

 

 (18 )

 

 

 (33 )

 

 

 (36 )

Segment operating profit

 

 

 1,988

 

 

 

 1,837

 

 

 

 3,893

 

 

 

 3,525

 

Russia-Ukraine conflict and other charges

 

 

 (993 )

 

 

 (204 )

 

 

 (989 )

 

 

 (196 )

Purchase accounting impacts - Linde AG

 

 

 (406 )

 

 

 (491 )

 

 

 (835 )

 

 

 (974 )

Total operating profit

 

 $ 589

 

 

 $ 1,142

 

 

 $ 2,069

 

 

 $ 2,355

 

 

 

 

 

 

 

Page 9 of 15

 

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.

 

 

 

2022

 

 

2021

 

(Millions of dollars, except per share data)

 

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

 

 $ 2,069

 

 

 $ 589

 

 

 $ 1,480

 

 

 $ 2,355

 

 

 $ 1,337

 

 

 $ 1,292

 

 

 $ 1,142

 

 

 $ 1,213

 

Add: Russia-Ukraine conflict and other charges

 

 

 989

 

 

 

 993

 

 

 

 (4 )

 

 

 196

 

 

 

 51

 

 

 

 26

 

 

 

 204

 

 

 

 (8 )

Add: Purchase accounting impacts - Linde AG (c)

 

 

 835

 

 

 

 406

 

 

 

 429

 

 

 

 974

 

 

 

 453

 

 

 

 492

 

 

 

 491

 

 

 

 483

 

Total adjustments

 

 

 1,824

 

 

 

 1,399

 

 

 

 425

 

 

 

 1,170

 

 

 

 504

 

 

 

 518

 

 

 

 695

 

 

 

 475

 

Adjusted operating profit

 

 $ 3,893

 

 

 $ 1,988

 

 

 $ 1,905

 

 

 $ 3,525

 

 

 $ 1,841

 

 

 $ 1,810

 

 

 $ 1,837

 

 

 $ 1,688

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported percentage change

 

 

 (12 )%

 

 

 (48 )%

 

 

 22 %

 

 

 78 %

 

 

 30 %

 

 

 33 %

 

 

 93 %

 

 

 65 %

Adjusted percentage change

 

 

 10 %

 

 

 8 %

 

 

 13 %

 

 

 32 %

 

 

 14 %

 

 

 19 %

 

 

 39 %

 

 

 25 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported sales

 

 $ 16,668

 

 

 $ 8,457

 

 

 $ 8,211

 

 

 $ 14,827

 

 

 $ 8,298

 

 

 $ 7,668

 

 

 $ 7,584

 

 

 $ 7,243

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported operating margin

 

 

 12.4 %

 

 

 7.0 %

 

 

 18.0 %

 

 

 15.9 %

 

 

 16.1 %

 

 

 16.8 %

 

 

 15.1 %

 

 

 16.7 %

Adjusted operating margin

 

 

 23.4 %

 

 

 23.5 %

 

 

 23.2 %

 

 

 23.8 %

 

 

 22.2 %

 

 

 23.6 %

 

 

 24.2 %

 

 

 23.3 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported depreciation and amortization

 

 $ 2,203

 

 

 $ 1,091

 

 

 $ 1,112

 

 

 $ 2,337

 

 

 $ 1,135

 

 

 $ 1,163

 

 

 $ 1,171

 

 

 $ 1,166

 

Less: Purchase accounting impacts - Linde AG (c)

 

 

 (819 )

 

 

 (401 )

 

 

 (418 )

 

 

 (957 )

 

 

 (437 )

 

 

 (469 )

 

 

 (479 )

 

 

 (478 )

Adjusted depreciation and amortization

 

 $ 1,384

 

 

 $ 690

 

 

 $ 694

 

 

 $ 1,380

 

 

 $ 698

 

 

 $ 694

 

 

 $ 692

 

 

 $ 688

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Other Income (Expense) - net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported Other Income (Expense) - net

 

 $ (24 )

 

 $ (36 )

 

 $ 12

 

 

 $ (13 )

 

 $ (23 )

 

 $ 10

 

 

 $ (17 )

 

 $ 4

 

Add: Purchase accounting impacts - Linde AG (c)

 

 

 (16 )

 

 

 (5 )

 

 

 (11 )

 

 

 (17 )

 

 

 (16 )

 

 

 (23 )

 

 

 (12 )

 

 

 (5 )

Adjusted Other Income (Expense) - net

 

 $ (8 )

 

 $ (31 )

 

 $ 23

 

 

 $ 4

 

 

 $ (7 )

 

 $ 33

 

 

 $ (5 )

 

 $ 9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 $ (126 )

 

 $ (62 )

 

 $ (64 )

 

 $ (98 )

 

 $ (49 )

 

 $ (45 )

 

 $ (49 )

 

 $ (49 )

Add: Pension settlement charges

 

 

 —

 

 

 

 —

 

 

 

 —

 

 

 

 —

 

 

 

 —

 

 

 

 (4 )

 

 

 —

 

 

 

 —

 

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

 

 $ (126 )

 

 $ (62 )

 

 $ (64 )

 

 $ (98 )

 

 $ (49 )

 

 $ (49 )

 

 $ (49 )

 

 $ (49 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Interest Expense - Net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported interest expense - net

 

 $ 14

 

 

 $ 5

 

 

 $ 9

 

 

 $ 38

 

 

 $ 31

 

 

 $ 8

 

 

 $ 18

 

 

 $ 20

 

Add: Purchase accounting impacts - Linde AG (c)

 

 

 19

 

 

 

 9

 

 

 

 10

 

 

 

 33

 

 

 

 10

 

 

 

 10

 

 

 

 15

 

 

 

 18

 

Adjusted interest expense - net

 

 $ 33

 

 

 $ 14

 

 

 $ 19

 

 

 $ 71

 

 

 $ 41

 

 

 $ 18

 

 

 $ 33

 

 

 $ 38

 

 

 

 

 

 

 

Page 10 of 15

 

 

 

2022

 

 

2021

 

(Millions of dollars, except per share data)

 

Year to Date

June 30,

 

 

Q2

 

 

Q1

 

 

Year to Date

June 30,

 

 

Q4

 

 

Q3

 

 

Q2

 

 

Q1

 

Adjusted Income Taxes (a)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported income taxes

 

 $ 655

 

 

 $ 286

 

 

 $ 369

 

 

 $ 602

 

 

 $ 339

 

 

 $ 321

 

 

 $ 334

 

 

 $ 268

 

Add: Purchase accounting impacts - Linde AG (c)

 

 

 216

 

 

 

 108

 

 

 

 108

 

 

 

 234

 

 

 

 103

 

 

 

 115

 

 

 

 116

 

 

 

 118

 

Add: Pension settlement charges

 

 

 —

 

 

 

 —

 

 

 

 —

 

 

 

 —

 

 

 

 —

 

 

 

 1

 

 

 

 —

 

 

 

 —

 

Add: Russia-Ukraine conflict and other charges

 

 

 101

 

 

 

 104

 

 

 

 (3 )

 

 

 26

 

 

 

 —

 

 

 

 3

 

 

 

 6

 

 

 

 20

 

Total adjustments

 

 

 317

 

 

 

 212

 

 

 

 105

 

 

 

 260

 

 

 

 103

 

 

 

 119

 

 

 

 122

 

 

 

 138

 

Adjusted income taxes

 

 $ 972

 

 

 $ 498

 

 

 $ 474

 

 

 $ 862

 

 

 $ 442

 

 

 $ 440

 

 

 $ 456

 

 

 $ 406

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Effective Tax Rate (a)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported income before income taxes and equity investments

 

 $ 2,181

 

 

 $ 646

 

 

 $ 1,535

 

 

 $ 2,415

 

 

 $ 1,355

 

 

 $ 1,329

 

 

 $ 1,173

 

 

 $ 1,242

 

Add: Pension settlement charge

 

 

 —

 

 

 

 —

 

 

 

 —

 

 

 

 —

 

 

 

 —

 

 

 

 4

 

 

 

 —

 

 

 

 —

 

Add: Purchase accounting impacts - Linde AG (c)

 

 

 816

 

 

 

 397

 

 

 

 419

 

 

 

 941

 

 

 

 443

 

 

 

 482

 

 

 

 476

 

 

 

 465

 

Add: Russia-Ukraine conflict and other charges

 

 

 989

 

 

 

 993

 

 

 

 (4 )

 

 

 196

 

 

 

 51

 

 

 

 26

 

 

 

 204

 

 

 

 (8 )

Total adjustments

 

 

 1,805

 

 

 

 1,390

 

 

 

 415

 

 

 

 1,137

 

 

 

 494

 

 

 

 512

 

 

 

 680

 

 

 

 457

 

Adjusted income before income taxes and equity investments

 

 $ 3,986

 

 

 $ 2,036

 

 

 $ 1,950

 

 

 $ 3,552

 

 

 $ 1,849

 

 

 $ 1,841

 

 

 $ 1,853

 

 

 $ 1,699

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported Income taxes

 

 $ 655

 

 

 $ 286

 

 

 $ 369

 

 

 $ 602

 

 

 $ 339

 

 

 $ 321

 

 

 $ 334

 

 

 $ 268

 

Reported effective tax rate

 

 

 30.0 %

 

 

 44.3 %

 

 

 24.0 %

 

 

 24.9 %

 

 

 25.0 %

 

 

 24.2 %

 

 

 28.5 %

 

 

 21.6 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted income taxes

 

 $ 972

 

 

 $ 498

 

 

 $ 474

 

 

 $ 862

 

 

 $ 442

 

 

 $ 440

 

 

 $ 456

 

 

 $ 406

 

Adjusted effective tax rate

 

 

 24.4 %

 

 

 24.5 %

 

 

 24.3 %

 

 

 24.3 %

 

 

 23.9 %

 

 

 23.9 %

 

 

 24.6 %

 

 

 23.9 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from Equity Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported income from equity investments

 

 $ 94

 

 

 $ 50

 

 

 $ 44

 

 

 $ 80

 

 

 $ 38

 

 

 $ 1

 

 

 $ 37

 

 

 $ 43

 

Add: Russia-Ukraine conflict and other charges (e)

 

 

 —

 

 

 

 —

 

 

 

 —

 

 

 

 —

 

 

 

 —

 

 

 

 35

 

 

 

 —

 

 

 

 —

 

Add: Purchase accounting impacts - Linde AG (c)

 

 

 39

 

 

 

 19

 

 

 

 20

 

 

 

 38

 

 

 

 20

 

 

 

 19

 

 

 

 19

 

 

 

 19

 

Total adjustments

 

 

 39

 

 

 

 19

 

 

 

 20

 

 

 

 38

 

 

 

 20

 

 

 

 54

 

 

 

 19

 

 

 

 19

 

Adjusted income from equity investments

 

 $ 133

 

 

 $ 69

 

 

 $ 64

 

 

 $ 118

 

 

 $ 58

 

 

 $ 55

 

 

 $ 56

 

 

 $ 62

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Noncontrolling Interests from Continuing Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported noncontrolling interests from continuing operations

 

 $ (74 )

 

 $ (38 )

 

 $ (36 )

 

 $ (74 )

 

 $ (30 )

 

 $ (31 )

 

 $ (36 )

 

 $ (38 )

Add: Purchase accounting impacts - Linde AG (c)

 

 

 (7 )

 

 

 (3 )

 

 

 (4 )

 

 

 (7 )

 

 

 (4 )

 

 

 (4 )

 

 

 (2 )

 

 

 (5 )

Adjusted noncontrolling interests from continuing operations

 

 $ (81 )

 

 $ (41 )

 

 $ (40 )

 

 $ (81 )

 

 $ (34 )

 

 $ (35 )

 

 $ (38 )

 

 $ (43 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Income from Continuing Operations (b)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported income from continuing operations

 

 $ 1,546

 

 

 $ 372

 

 

 $ 1,174

 

 

 $ 1,819

 

 

 $ 1,024

 

 

 $ 978

 

 

 $ 840

 

 

 $ 979

 

Add: Pension settlement charge

 

 

 —

 

 

 

 —

 

 

 

 —

 

 

 

 —

 

 

 

 —

 

 

 

 3

 

 

 

 —

 

 

 

 —

 

Add: Russia-Ukraine conflict and other charges

 

 

 888

 

 

 

 889

 

 

 

 (1 )

 

 

 170

 

 

 

 51

 

 

 

 58

 

 

 

 198

 

 

 

 (28 )

Add: Purchase accounting impacts - Linde AG (c)

 

 

 632

 

 

 

 305

 

 

 

 327

 

 

 

 738

 

 

 

 356

 

 

 

 382

 

 

 

 377

 

 

 

 361

 

Total adjustments

 

 

 1,520

 

 

 

 1,194

 

 

 

 326

 

 

 

 908

 

 

 

 407

 

 

 

 443

 

 

 

 575

 

 

 

 333

 

Adjusted income from continuing operations

 

 $ 3,066

 

 

 $ 1,566

 

 

 $ 1,500

 

 

 $ 2,727

 

 

 $ 1,431

 

 

 $ 1,421

 

 

 $ 1,415

 

 

 $ 1,312

 

 

 

 

 

 

 

Page 11 of 15

 

 

 

2022

 

 

2021

 

(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 from Continuing Operations (b)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported diluted EPS from continuing operations

 

 $ 3.04

 

 

 $ 0.74

 

 

 $ 2.30

 

 

 $ 3.46

 

 

 $ 1.98

 

 

 $ 1.88

 

 

 $ 1.60

 

 

 $ 1.86

 

Add: Pension settlement charge

 

 

 —

 

 

 

 —

 

 

 

 —

 

 

 

 —

 

 

 

 —

 

 

 

 0.01

 

 

 

 —

 

 

 

 —

 

Add: Russia-Ukraine conflict and other charges

 

 

 1.75

 

 

 

 1.76

 

 

 

 —

 

 

 

 0.32

 

 

 

 0.10

 

 

 

 0.11

 

 

 

 0.38

 

 

 

 (0.05 )

Add: Purchase accounting impacts - Linde AG (c)

 

 

 1.24

 

 

 

 0.60

 

 

 

 0.63

 

 

 

 1.41

 

 

 

 0.69

 

 

 

 0.73

 

 

 

 0.72

 

 

 

 0.68

 

Total adjustments

 

 

 2.99

 

 

 

 2.36

 

 

 

 0.63

 

 

 

 1.73

 

 

 

 0.79

 

 

 

 0.85

 

 

 

 1.10

 

 

 

 0.63

 

Adjusted diluted EPS from continuing operations

 

 $ 6.03

 

 

 $ 3.10

 

 

 $ 2.93

 

 

 $ 5.19

 

 

 $ 2.77

 

 

 $ 2.73

 

 

 $ 2.70

 

 

 $ 2.49

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported percentage change

 

 

 (12 )%

 

 

 (54 )%

 

 

 24 %

 

 

 79 %

 

 

 37 %

 

 

 42 %

 

 

 84 %

 

 

 74 %

Adjusted percentage change

 

 

 16 %

 

 

 15 %

 

 

 18 %

 

 

 37 %

 

 

 20 %

 

 

 27 %

 

 

 42 %

 

 

 32 %

 

 

 

 

 

 

Page 12 of 15

 

 

 

 

 

Third Quarter 2022

 

 

Full Year 2022

 

 

 

 

 

Adjusted Diluted EPS from Continuing

Operations Guidance (d)

 

 

 

Low End

 

 

High End

 

 

Low End

 

 

High End

 

 

 

 

 

 

 

2022 Adjusted Guidance

 

 

 

 

 $ 2.85

 

 

 $ 2.95

 

 

 $ 11.73

 

 

 $ 11.93

 

 

 

 

 

 

 

 

 

 

Adjusted percentage changes versus 2021 adjusted diluted EPS

 

 

 

 

 

 4 %

 

 

 8 %

 

 

 10 %

 

 

 12 %

 

 

 

 

 

 

 

 

 

Add: Estimated currency headwind/(tailwind)

 

 

 

 

 

 6 %

 

 

 6 %

 

 

 5 %

 

 

 5 %

 

 

 

 

 

 

 

 

 

Adjusted percentage change excluding currency

 

 

 

 

 

 10 %

 

 

 14 %

 

 

 15 %

 

 

 17 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA and % of Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

 $ 1,546

 

 

 $ 372

 

 

 $ 1,174

 

 

 $ 1,819

 

 

 $ 1,024

 

 

 $ 978

 

 

 $ 840

 

 

 $ 979

 

Add: Noncontrolling interests related to continuing operations

 

 

 74

 

 

 

 38

 

 

 

 36

 

 

 

 74

 

 

 

 30

 

 

 

 31

 

 

 

 36

 

 

 

 38

 

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

 

 

 (126 )

 

 

 (62 )

 

 

 (64 )

 

 

 (98 )

 

 

 (49 )

 

 

 (45 )

 

 

 (49 )

 

 

 (49 )

Add: Interest expense

 

 

 14

 

 

 

 5

 

 

 

 9

 

 

 

 38

 

 

 

 31

 

 

 

 8

 

 

 

 18

 

 

 

 20

 

Add: Income taxes

 

 

 655

 

 

 

 286

 

 

 

 369

 

 

 

 602

 

 

 

 339

 

 

 

 321

 

 

 

 334

 

 

 

 268

 

Add: Depreciation and amortization

 

 

 2,203

 

 

 

 1,091

 

 

 

 1,112

 

 

 

 2,337

 

 

 

 1,135

 

 

 

 1,163

 

 

 

 1,171

 

 

 

 1,166

 

EBITDA from continuing operations

 

 

 4,366

 

 

 

 1,730

 

 

 

 2,636

 

 

 

 4,772

 

 

 

 2,510

 

 

 

 2,456

 

 

 

 2,350

 

 

 

 2,422

 

Add: Russia-Ukraine conflict and other charges

 

 

 989

 

 

 

 993

 

 

 

 (4 )

 

 

 196

 

 

 

 51

 

 

 

 61

 

 

 

 204

 

 

 

 (8 )

Add: Purchase accounting impacts - Linde AG (c)

 

 

 54

 

 

 

 23

 

 

 

 31

 

 

 

 55

 

 

 

 36

 

 

 

 42

 

 

 

 31

 

 

 

 24

 

Total adjustments

 

 

 1,043

 

 

 

 1,016

 

 

 

 27

 

 

 

 251

 

 

 

 87

 

 

 

 103

 

 

 

 235

 

 

 

 16

 

Adjusted EBITDA from continuing operations

 

 $ 5,409

 

 

 $ 2,746

 

 

 $ 2,663

 

 

 $ 5,023

 

 

 $ 2,597

 

 

 $ 2,559

 

 

 $ 2,585

 

 

 $ 2,438

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported sales

 

 $ 16,668

 

 

 $ 8,457

 

 

 $ 8,211

 

 

 $ 14,827

 

 

 $ 8,298

 

 

 $ 7,668

 

 

 $ 7,584

 

 

 $ 7,243

 

% of sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA from continuing operations

 

 

 26.2 %

 

 

 20.5 %

 

 

 32.1 %

 

 

 32.2 %

 

 

 30.2 %

 

 

 32.0 %

 

 

 31.0 %

 

 

 33.4 %

Adjusted EBITDA from continuing operations

 

 

 32.5 %

 

 

 32.5 %

 

 

 32.4 %

 

 

 33.9 %

 

 

 31.3 %

 

 

 33.4 %

 

 

 34.1 %

 

 

 33.7 %

 

(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.

 

 

 

 

 

 

Page 13 of 15

 

(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 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 from Continuing Operations: 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 2022. 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 are enacted that 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.

 

(e) Impairment charge related to a joint venture in the APAC segment.

 

 

 

 

 

 

Page 14 of 15

 

LINDE PLC AND SUBSIDIARIES

APPENDIX

NON-GAAP MEASURES AND RECONCILIATIONS

(UNAUDITED)

 

 

 

2022

 

 

2021

 

(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

 

 $ 2,133

 

 

 $ 2,000

 

 

 $ 3,233

 

 

 $ 2,556

 

 

 $ 1,827

 

 

 $ 2,109

 

Less: Capital Expenditures

 

 

 (826 )

 

 

 (649 )

 

 

 (839 )

 

 

 (741 )

 

 

 (744 )

 

 

 (762 )

Free Cash Flow

 

 $ 1,307

 

 

 $ 1,351

 

 

 $ 2,394

 

 

 $ 1,815

 

 

 $ 1,083

 

 

 $ 1,347

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 $ 16,043

 

 

 $ 16,456

 

 

 $ 14,207

 

 

 $ 16,727

 

 

 $ 15,492

 

 

 $ 15,750

 

Less: Cash and cash equivalents

 

 

 (3,655 )

 

 

 (4,464 )

 

 

 (2,823 )

 

 

 (4,700 )

 

 

 (3,137 )

 

 

 (4,096 )

Net debt

 

 

 12,388

 

 

 

 11,992

 

 

 

 11,384

 

 

 

 12,027

 

 

 

 12,355

 

 

 

 11,654

 

Less: Purchase accounting impacts - Linde AG

 

 

 (38 )

 

 

 (50 )

 

 

 (61 )

 

 

 (72 )

 

 

 (84 )

 

 

 (98 )

Adjusted net debt

 

 

 12,350

 

 

 

 11,942

 

 

 

 11,323

 

 

 

 11,955

 

 

 

 12,271

 

 

 

 11,556

 

Less: Net assets held for sale

 

 

 —

 

 

 

 —

 

 

 

 —

 

 

 

 (1 )

 

 

 (1 )

 

 

 (4 )

Adjusted net debt less net assets held for sale

 

 $ 12,350

 

 

 $ 11,942

 

 

 $ 11,323

 

 

 $ 11,954

 

 

 $ 12,270

 

 

 $ 11,552

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 income from continuing operations

 

 $ 372

 

 

 $ 1,174

 

 

 $ 1,024

 

 

 $ 978

 

 

 $ 840

 

 

 $ 979

 

Add: noncontrolling interests from continuing operations

 

 

 38

 

 

 

 36

 

 

 

 30

 

 

 

 31

 

 

 

 36

 

 

 

 38

 

Add: interest expense - net

 

 

 5

 

 

 

 9

 

 

 

 31

 

 

 

 8

 

 

 

 18

 

 

 

 20

 

Less: tax benefit on interest expense - net *

 

 

 (1 )

 

 

 (2 )

 

 

 (8 )

 

 

 (2 )

 

 

 (5 )

 

 

 (5 )

Reported NOPAT

 

 $ 414

 

 

 $ 1,217

 

 

 $ 1,077

 

 

 $ 1,015

 

 

 $ 889

 

 

 $ 1,032

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted income from continuing operations

 

 $ 1,566

 

 

 $ 1,500

 

 

 $ 1,431

 

 

 $ 1,421

 

 

 $ 1,415

 

 

 $ 1,312

 

Add: adjusted noncontrolling interests from continuing operations

 

 

 41

 

 

 

 40

 

 

 

 34

 

 

 

 35

 

 

 

 38

 

 

 

 43

 

Add: adjusted interest expense - net

 

 

 14

 

 

 

 19

 

 

 

 41

 

 

 

 18

 

 

 

 33

 

 

 

 38

 

Less: tax benefit on interest expense - net *

 

 

 (3 )

 

 

 (5 )

 

 

 (10 )

 

 

 (5 )

 

 

 (8 )

 

 

 (10 )

Adjusted NOPAT

 

 $ 1,618

 

 

 $ 1,554

 

 

 $ 1,496

 

 

 $ 1,469

 

 

 $ 1,478

 

 

 $ 1,383

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4-quarter trailing reported NOPAT

 

 $ 3,723

 

 

 $ 4,198

 

 

 $ 4,013

 

 

 $ 3,765

 

 

 $ 3,508

 

 

 $ 3,115

 

4-quarter trailing adjusted NOPAT

 

 $ 6,137

 

 

 $ 5,997

 

 

 $ 5,826

 

 

 $ 5,627

 

 

 $ 5,389

 

 

 $ 4,985

 

 

 

 

 

 

 

Page 15 of 15

 

 

 

2022

 

 

2021

(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

 

 

 39,674

 

 

 

 42,963

 

 

 

 44,035

 

 

 

 44,323

 

 

 

 45,777

 

 

 

 46,210

 

Noncontrolling interests

 

 

 1,353

 

 

 

 1,414

 

 

 

 1,393

 

 

 

 1,401

 

 

 

 1,438

 

 

 

 1,410

 

Total equity and redeemable noncontrolling interests

 

 $ 41,040

 

 

 $ 44,390

 

 

 $ 45,441

 

 

 $ 45,737

 

 

 $ 47,228

 

 

 $ 47,633

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported capital

 

 $ 53,428

 

 

 $ 56,382

 

 

 $ 56,825

 

 

 $ 57,763

 

 

 $ 59,582

 

 

 $ 59,283

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total equity and redeemable noncontrolling interests

 

 $ 41,040

 

 

 $ 44,390

 

 

 $ 45,441

 

 

 $ 45,737

 

 

 $ 47,228

 

 

 $ 47,633

 

Add: Adjusted net debt less net assets held for sale

 

 

 12,350

 

 

 

 11,942

 

 

 

 11,323

 

 

 

 11,954

 

 

 

 12,270

 

 

 

 11,552

 

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

 

 $ 27,266

 

 

 $ 30,208

 

 

 $ 30,640

 

 

 $ 31,567

 

 

 $ 33,374

 

 

 $ 33,061

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending capital (see above)

 

 $ 53,428

 

 

 $ 56,382

 

 

 $ 56,825

 

 

 $ 57,763

 

 

 $ 59,582

 

 

 $ 59,283

 

5-quarter average ending capital

 

 $ 56,796

 

 

 $ 57,967

 

 

 $ 59,086

 

 

 $ 59,960

 

 

 $ 60,502

 

 

 $ 60,584

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending adjusted capital (see above)

 

 $ 27,266

 

 

 $ 30,208

 

 

 $ 30,640

 

 

 $ 31,567

 

 

 $ 33,374

 

 

 $ 33,061

 

5-quarter average ending adjusted capital

 

 $ 30,611

 

 

 $ 31,770

 

 

 $ 32,875

 

 

 $ 33,735

 

 

 $ 34,261

 

 

 $ 34,325

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 6.6 %

 

 

 7.2 %

 

 

 6.8 %

 

 

 6.3 %

 

 

 5.8 %

 

 

 5.1 %

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

 

 

 20.0 %

 

 

 18.9 %

 

 

 17.7 %

 

 

 16.7 %

 

 

 15.7 %

 

 

 14.5 %

 

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