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Cost Reduction Programs and Other Charges
 3 Months Ended
Mar. 31, 2020
Restructuring and Related Activities [Abstract]  
Cost Reduction Programs and Other Charges Cost Reduction Programs and Other Charges

2020 Charges

Cost reduction programs and other charges were $131 million for the three months ended March 31, 2020 ($95 million after tax). The following table summarizes the activities related to the company's cost reduction charges for the three months ended March 31, 2020:
 
Quarter Ended March 31, 2020
(millions of dollars)
Severance costs
 
Other cost reduction charges
 
Total cost reduction program related charges
 
Merger-related and other charges
 
Total
Americas
$
6

 
$
15

 
$
21

 
$
—

 
$
21

EMEA
26

 
—

 
26

 
3

 
29

APAC
2

 
2

 
4

 
8

 
12

Engineering
14

 
—

 
14

 
1

 
15

Other
10

 
3

 
13

 
41

 
54

Total
$
58

 
$
20

 
$
78

 
$
53

 
$
131


Cost Reduction Programs

Total cost reduction program related charges were $78 million for the three months ended March 31, 2020 ($56 million after tax).

Severance costs

Severance costs of $58 million for the three months ended March 31, 2020 are for the elimination of approximately 600 positions, largely in the EMEA and Engineering segments, of which approximately 450 have terminated employment. The majority of these actions are anticipated to be completed by 2021.

Other cost reduction charges

Other cost reduction charges of $20 million for the three months ended March 31, 2020 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.

Merger-related Costs and Other Charges

Linde incurred merger-related costs and other charges which totaled $53 million ($39 million after tax) for the three months ended March 31, 2020.

Cash Requirements

The total cash requirements of the cost reduction program and other charges during the three months ended March 31, 2020 are estimated to be approximately $74 million. Total cost reduction programs and other charges, net of payments in the condensed consolidated statements of cash flows for the three months ended March 31, 2020 also reflects the impact of cash payments of liabilities, including merger-related tax liabilities, accrued as of December 31, 2019.

The following table summarizes the activities related to the company's cost reduction related charges for the three months ended March 31, 2020:
(millions of dollars)
Severance costs
 
Other cost reduction charges
 
Total cost reduction program related charges
 
Merger-related and other charges
 
Total
Balance, December 31, 2019
$
117

 
$
16

 
$
133

 
$
67

 
$
200

2020 Cost Reduction Programs and Other Charges
58

 
20

 
78

 
53

 
131

Less: Cash payments
(24
)
 
(4
)
 
(28
)
 
(36
)
 
(64
)
Less: Non-cash charges
—

 
(15
)
 
(15
)
 
(39
)
 
(54
)
Foreign currency translation and other
(1
)
 
—

 
(1
)
 
(2
)
 
(3
)
Balance, March 31, 2020
$
150

 
$
17

 
$
167

 
$
43

 
$
210




2019 Charges

Cost reduction programs and other charges were $89 million for the quarter ended March 31, 2019 ($81 million after tax and noncontrolling interests), including merger-related costs of $56 million ($53 million after-tax) and synergy-related charges, primarily severance, of $33 million ($28 million after-tax).

Classification in the condensed consolidated financial statements

The costs are shown within operating profit in a separate line item on the consolidated statements of income. On the condensed consolidated statement of cash flows, the impact of these costs, net of cash payments, is shown as an adjustment to reconcile net income to net cash provided by operating activities. In Note 10 - Segments, Linde excluded these costs 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.