Segment Information

12 Months Ended

Dec. 31, 2019

SEGMENT INFORMATION

Effective October 31, 2018, Praxair and Linde AG completed the previously announced merger, resulting in the formation of Linde plc (see Note 1 for additional information on the merger). As a result of the merger and effective with the lifting of the hold separate order effective on March 1, 2019, new operating segments were created which are used by the company's Chief Operating Decision Maker ("CODM") to allocate company resources and assess performance. Linde’s operations consist of two major product lines: industrial gases and engineering. As further described in the following paragraph, Linde’s industrial gases operations are managed on a geographic basis, which represent three of the company's new reportable segments - Americas, EMEA (Europe/Middle East/Africa), and APAC (Asia/South Pacific); a fourth reportable segment which represents the company's Engineering business, designs and manufactures equipment for air separation and other industrial gas applications specifically for end customers and is managed on a worldwide basis operating in all three geographic segments. Other consists of corporate costs and a few smaller businesses which individually do not meet the quantitative thresholds for separate presentation.

The industrial gases product line centers on the manufacturing and distribution of atmospheric gases (oxygen, nitrogen, argon, rare gases) and process gases (carbon dioxide, helium, hydrogen, electronic gases, specialty gases, acetylene). Many of these products are co-products of the same manufacturing process. Linde manufactures and distributes nearly all of its products and manages its customer relationships on a regional basis. Linde’s industrial gases are distributed to various end-markets within a regional segment through one of three basic distribution methods: on-site or tonnage; merchant or bulk; and packaged or cylinder gases. The distribution methods are generally integrated in order to best meet the customer’s needs and very few of its products can be economically transported outside of a region. Therefore, the distribution economics are specific to the various geographies in which the company operates and are consistent with how management assesses performance.

The company’s measure of profit/loss for segment reporting purposes remains unchanged - Segment operating profit. Segment operating profit is defined as operating profit excluding purchase accounting impacts of the Linde AG merger, intercompany royalties, and items not indicative of ongoing business trends. This is the manner in which the company’s CODM assesses performance and allocates resources. Similarly, total assets have not been included as this is not provided to the CODM for their assessment. For a description of Linde's previous operating segments, refer to Note 20 to the consolidated financial statements of Linde's 2018 Annual Report on Form 10-K.

The table below presents information about reportable segments for the years ended December 31, 2019, 2018 and 2017. The year ended December 31, 2019 reflects the results of both Praxair and Linde AG for the entire year. The year ended December 31, 2018 reflects the results of Praxair for the entire year and the results of Linde AG for the period beginning after October 31, 2018 (the merger date), including the impacts of purchase accounting (See Notes 1, 3 and 4 to the consolidated financial statements). The historical periods prior to 2018 reflect the results of Praxair. Prior periods presented have been recast to be consistent with the new segment structure:



(Millions of dollars)	2019		2018		2017
Sales (a)
Americas	$	10,993	$	8,017	$	7,204
EMEA	6,643		2,644		1,520
APAC	5,839		2,446		1,571
Engineering	2,799		459		N/A
Other	1,954		1,270		1,063
Total Sales	$	28,228	$	14,836	$	11,358



	2019			2018			2017
Operating Profit
Americas	$	2,578		$	2,053		$	1,854
EMEA	1,367			481			317
APAC	1,198			465			329
Engineering	390			14			N/A
Other	(245		)	(37		)	(4		)
Segment operating profit	5,288			2,976			2,496
Cost reduction programs and other charges	(567		)	(309		)	(52		)
Net gain on sale of business	164			3,294			N/A
Purchase accounting impacts - Linde AG	(1,952		)	(714		)	N/A
Total operating profit	$	2,933		$	5,247		$	2,444



	2019		2018		2017
Depreciation and Amortization
Americas	$	1,195	$	860	$	778
EMEA	749		269		168
APAC	613		271		178
Engineering	35		5		N/A
Other	143		79		60
Segment depreciation and amortization	2,735		1,484		1,184
Purchase accounting impacts - Linde AG	1,940		346		N/A
Total depreciation and amortization	$	4,675	$	1,830	$	1,184



	2019		2018		2017
Capital Expenditures and Acquisitions
Americas	$	1,814	$	1,068	$	921
EMEA	738		329		141
APAC	1,231		372		207
Engineering	79		27		N/A
Other	45		112		75
Total Capital Expenditures and Acquisitions	$	3,907	$	1,908	$	1,344



	2019		2018		2017
Sales by Major Country
United States	$	8,604	$	5,942	$	4,973
Germany	3,630		868		401
China	2,005		1,032		735
United Kingdom	1,653		398		131
Australia	1,127		183		N/A
Brazil	994		1,003		1,100
Other – foreign	10,215		5,410		4,018
Total Sales by Major Country	$	28,228	$	14,836	$	11,358



	2019		2018		2017
Long-lived Assets by Major Country (b)
United States	$	7,498	$	7,189	$	4,979
Germany	2,429		2,411		413
China	2,254		2,237		1,060
United Kingdom	1,479		1,582		55
Australia	1,214		1,476		N/A
Brazil	956		1,012		1,204
Other – foreign	13,234		13,810		4,114
Total long-lived assets	$	29,064	$	29,717	$	11,825

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(a)	Sales reflect external sales only and include Linde AG sales from the merger date of October 31, 2018 forward. Intersegment sales, primarily from Engineering to the industrial gases segments, were not material.

(b)

Long-lived assets include property, plant and equipment - net and reflect the impact of the merger with Linde AG (refer to Note 3).