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Cost Reduction Programs and Other Charges (Notes)
 12 Months Ended
Dec. 31, 2019
Restructuring and Related Activities [Abstract]  
Cost reduction programs and other charges COST REDUCTION PROGRAMS AND OTHER CHARGES
2019 Charges
Cost reduction programs and other charges were $567 million for the year ended December 31, 2019 ($444 million, after-tax and noncontrolling interests). The following is a summary of the pre-tax charges by reportable segment for the year
ended December 31, 2019.
 
Year Ended December 31, 2019
(millions of dollars)
Severance costs
 
Other cost reduction charges
 
Total cost reduction program related charges
 
Transaction related and other charges
 
Total
Americas
$
36

 
$
20

 
56

 
34

 
$
90

EMEA
105

 
16

 
121

 
21

 
142

APAC
40

 
10

 
50

 
72

 
122

Engineering
1

 
12

 
13

 
(9
)
 
4

Other
22

 
42

 
64

 
145

 
209

Total
$
204

 
$
100

 
$
304

 
$
263

 
$
567



Cost Reduction Programs
Total cost reduction program related charges were $304 million for the year ended December 31, 2019 ($233 million after-tax).
Severance costs
Severance costs of $204 million for the year ended December 31, 2019 are for the elimination of approximately 2,400 positions, largely in EMEA, APAC, and the Americas, of which approximately 1,500 have terminated employment at December 31, 2019. The majority of these actions are anticipated to be completed within the next 12 months.
Other cost reduction charges
Other cost reduction charges of $100 million for the year ended December 31, 2019 are primarily 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.


Transaction Related and Other Charges
On October 31, 2018, Praxair and Linde AG combined under Linde plc, as contemplated by the business combination agreement (see Note 1). Linde incurred merger-related costs and other charges which totaled $263 million ($211 million, after tax and noncontrolling interests) for the year ended December 31, 2019. 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
The total cash requirements of the cost reduction program and other charges during the twelve months ended December 31, 2019 are estimated to be approximately $460 million, of which $260 million was paid through December 31, 2019. Total cost reduction programs and other charges, net of payments in the consolidated statements of cash flows for the twelve months ended December 31, 2019 also reflects the impact of cash payments of liabilities, included merger-related tax liabilities, accrued as of December 31, 2018.

The following table summarizes the activities related to the company's cost reduction related charges for the twelve months ended December 31, 2019:
(millions of dollars)
Severance costs
 
Other cost reduction charges
 
Total cost reduction program related charges
 
Transaction related and other charges
 
Total
2019 Cost Reduction Programs and Other Charges
$
204

 
$
100

 
$
304

 
$
263

 
$
567

Less: Cash payments
(91
)
 
(57
)
 
(148
)
 
(112
)
 
(260
)
Less: Non-cash charges
—

 
(21
)
 
(21
)
 
(78
)
 
(99
)
Foreign currency translation and other
4

 
(6
)
 
(2
)
 
(6
)
 
(8
)
Balance, December 31, 2019
$
117

 
$
16

 
$
133

 
$
67

 
$
200



2018 Charges
Cost reduction programs and other charges were $309 million for the year ended December 31, 2018 ($306 million, after-tax and non-controlling interest).
Transaction Related and Other Charges
On October 31, 2018, Praxair and Linde AG combined under Linde plc, as contemplated by the business combination agreement (see Note 1). In connection with the business combination, Linde incurred transaction costs which totaled $236 million for the year ended December 31, 2018 ($236 million after-tax).
Also included in Cost Reduction Programs and Other Charges are other charges of $73 million for the year ended December 31, 2018 ($70 million after-tax) comprised of the following; (i) a $40 million charge ($40 million after-tax) related to an unfavorable development related to a supplier contract in China, (ii) restructuring charges of $21 million ($18 million after-tax) and (iii) a $12 million charge ($12 million after-tax) associated with the transition to hyper-inflationary accounting in Argentina.

2017 Charges
Transaction Related and Other Charges
In connection with the intended business combination, Linde incurred transaction costs which totaled $52 million for the year ended December 31, 2017 ($48 million after-tax).
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 primarily as short-term liabilities. 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 20 - 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.