Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

Linde plc (NYSE:LIN)

Analysis of Income Taxes

Advanced level

Income Tax Expense (Benefit)

Linde plc, income tax expense (benefit), continuing operations

US$ in millions

Microsoft Excel LibreOffice Calc
12 months ended: Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
U.S. federal 185  64  390  565  266 
State and local 17  39  (7) 84  32 
Foreign 1,013  969  620  374  266 
Current tax expense 1,215  1,072  1,003  1,023  564 
U.S. federal 20  85  (221)
State and local —  15  19 
Foreign (395) (388) (209) 205  (23)
Deferred tax expense (benefit) (368) (303) (186) (13)
Provision for income taxes 847  769  817  1,026  551 

Based on: 10-K (filing date: 2021-03-01), 10-K (filing date: 2020-03-02), 10-K (filing date: 2019-03-18), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-03-01).

Item Description The company
Current tax expense Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. Linde plc’s current tax expense increased from 2018 to 2019 and from 2019 to 2020.
Deferred tax expense (benefit) Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. Linde plc’s deferred tax expense (benefit) decreased from 2018 to 2019 and from 2019 to 2020.
Provision for income taxes Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Linde plc’s provision for income taxes decreased from 2018 to 2019 but then increased from 2019 to 2020 exceeding 2018 level.

Effective Income Tax Rate (EITR)

Linde plc, effective income tax rate (EITR) reconciliation

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
U.S. statutory income tax rate 21.00% 21.00% 21.00% 35.00% 35.00%
State and local taxes, net of federal benefit 0.60% 1.10% 0.60% 1.40% 1.40%
U.S. tax credits and deductions -0.20% -1.10% -0.20% -1.20% -1.60%
Foreign tax differentials 4.90% 3.90% 1.10% -6.30% -6.80%
Share-Based compensation -1.60% -1.40% -0.40% -1.50% -1.00%
Divestitures 0.00% 1.20% -6.40% 0.00% 0.00%
Other, net 0.30% 1.60% 1.70% 0.30% -0.10%
Effective tax rate, before Tax Act 25.00% 26.30% 17.40% 27.70% 26.90%
Tax Act 0.00% 0.00% -1.20% 17.20% 0.00%
Effective tax rate 25.00% 26.30% 16.20% 44.90% 26.90%

Based on: 10-K (filing date: 2021-03-01), 10-K (filing date: 2020-03-02), 10-K (filing date: 2019-03-18), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-03-01).

Item Description The company
Effective tax rate, before Tax Act Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Linde plc’s effective tax rate, before Tax Act increased from 2018 to 2019 but then slightly decreased from 2019 to 2020.

Components of Deferred Tax Assets and Liabilities

Linde plc, components of deferred tax assets and liabilities

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Carryforwards 386  441  526  209  284 
Benefit plans and related 814  721  575  257  404 
Inventory 70  72  63  16  26 
Accruals and other 1,243  1,167  1,112  261  410 
Deferred tax assets, before valuation allowances 2,513  2,401  2,276  743  1,124 
Valuation allowances (243) (222) (237) (76) (132)
Deferred tax assets 2,270  2,179  2,039  667  992 
Fixed assets (3,430) (3,539) (3,935) (1,128) (1,522)
Goodwill (173) (145) (124) (143) (178)
Other intangible assets (3,703) (3,688) (3,684) (72) (115)
Subsidiary/equity investments (609) (664) (570) (200) — 
Other (791) (789) (648) (93) (201)
Deferred tax liabilities (8,706) (8,825) (8,961) (1,636) (2,016)
Net deferred tax assets (liabilities) (6,436) (6,646) (6,922) (969) (1,024)

Based on: 10-K (filing date: 2021-03-01), 10-K (filing date: 2020-03-02), 10-K (filing date: 2019-03-18), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-03-01).

Item Description The company
Deferred tax assets, before valuation allowances Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Linde plc’s deferred tax assets, before valuation allowances increased from 2018 to 2019 and from 2019 to 2020.
Deferred tax assets Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Linde plc’s deferred tax assets increased from 2018 to 2019 and from 2019 to 2020.
Net deferred tax assets (liabilities) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting. Linde plc’s net deferred tax assets (liabilities) increased from 2018 to 2019 and from 2019 to 2020.

Deferred Tax Assets and Liabilities, Classification

Linde plc, deferred tax assets and liabilities, classification

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Deferred tax assets (included in Other long-term assets) 268  243  510  198  185 
Deferred tax liabilities (included in Deferred credits) 6,704  6,889  7,432  1,167  1,209 

Based on: 10-K (filing date: 2021-03-01), 10-K (filing date: 2020-03-02), 10-K (filing date: 2019-03-18), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-03-01).

Item Description The company
Deferred tax assets (included in Other long-term assets) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent. Linde plc’s deferred tax assets (included in Other long-term assets) decreased from 2018 to 2019 but then slightly increased from 2019 to 2020.
Deferred tax liabilities (included in Deferred credits) Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent. Linde plc’s deferred tax liabilities (included in Deferred credits) decreased from 2018 to 2019 and from 2019 to 2020.

Adjustments to Financial Statements: Removal of Deferred Taxes

Linde plc, adjustments to financial statements

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Adjustment to Total Assets
Total assets (as reported) 88,229  86,612  93,386  20,436  19,332 
Less: Noncurrent deferred tax assets, net 268  243  510  198  185 
Total assets (adjusted) 87,961  86,369  92,876  20,238  19,147 
Adjustment to Total Liabilities
Total liabilities (as reported) 38,647  34,977  36,290  13,914  13,880 
Less: Noncurrent deferred tax liabilities, net 6,704  6,889  7,432  1,167  1,209 
Total liabilities (adjusted) 31,943  28,088  28,858  12,747  12,671 
Adjustment to Total Linde Plc Shareholders’ Equity
Total Linde plc shareholders’ equity (as reported) 47,317  49,074  51,596  6,018  5,021 
Less: Net deferred tax assets (liabilities) (6,436) (6,646) (6,922) (969) (1,024)
Total Linde plc shareholders’ equity (adjusted) 53,753  55,720  58,518  6,987  6,045 
Adjustment to Net Income, Linde Plc
Net income, Linde plc (as reported) 2,501  2,285  4,381  1,247  1,500 
Add: Deferred income tax expense (benefit) (368) (303) (186) (13)
Net income, Linde plc (adjusted) 2,133  1,982  4,195  1,250  1,487 

Based on: 10-K (filing date: 2021-03-01), 10-K (filing date: 2020-03-02), 10-K (filing date: 2019-03-18), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-03-01).


Linde plc, Financial Data: Reported vs. Adjusted


Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Linde plc, adjusted financial ratios

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Net Profit Margin
Reported net profit margin 9.18% 8.09% 29.40% 10.90% 14.24%
Adjusted net profit margin 7.83% 7.02% 28.15% 10.93% 14.12%
Total Asset Turnover
Reported total asset turnover 0.31 0.33 0.16 0.56 0.54
Adjusted total asset turnover 0.31 0.33 0.16 0.57 0.55
Financial Leverage
Reported financial leverage 1.86 1.76 1.81 3.40 3.85
Adjusted financial leverage 1.64 1.55 1.59 2.90 3.17
Return on Equity (ROE)
Reported ROE 5.29% 4.66% 8.49% 20.72% 29.87%
Adjusted ROE 3.97% 3.56% 7.17% 17.89% 24.60%
Return on Assets (ROA)
Reported ROA 2.83% 2.64% 4.69% 6.10% 7.76%
Adjusted ROA 2.42% 2.29% 4.52% 6.18% 7.77%

Based on: 10-K (filing date: 2021-03-01), 10-K (filing date: 2020-03-02), 10-K (filing date: 2019-03-18), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-03-01).

Financial ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Linde plc’s adjusted net profit margin ratio deteriorated from 2018 to 2019 but then slightly improved from 2019 to 2020.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Linde plc’s adjusted total asset turnover ratio improved from 2018 to 2019 but then slightly deteriorated from 2019 to 2020.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
Linde plc’s adjusted financial leverage ratio decreased from 2018 to 2019 but then increased from 2019 to 2020 exceeding 2018 level.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Linde plc’s adjusted ROE deteriorated from 2018 to 2019 but then slightly improved from 2019 to 2020.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Linde plc’s adjusted ROA deteriorated from 2018 to 2019 but then slightly improved from 2019 to 2020.

Linde plc, Financial Ratios: Reported vs. Adjusted


Adjusted Net Profit Margin

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Net income, Linde plc 2,501  2,285  4,381  1,247  1,500 
Sales 27,243  28,228  14,900  11,437  10,534 
Profitability Ratio
Net profit margin1 9.18% 8.09% 29.40% 10.90% 14.24%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income, Linde plc 2,133  1,982  4,195  1,250  1,487 
Sales 27,243  28,228  14,900  11,437  10,534 
Profitability Ratio
Adjusted net profit margin2 7.83% 7.02% 28.15% 10.93% 14.12%

Based on: 10-K (filing date: 2021-03-01), 10-K (filing date: 2020-03-02), 10-K (filing date: 2019-03-18), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-03-01).

2020 Calculations

1 Net profit margin = 100 × Net income, Linde plc ÷ Sales
= 100 × 2,501 ÷ 27,243 = 9.18%

2 Adjusted net profit margin = 100 × Adjusted net income, Linde plc ÷ Sales
= 100 × 2,133 ÷ 27,243 = 7.83%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Linde plc’s adjusted net profit margin ratio deteriorated from 2018 to 2019 but then slightly improved from 2019 to 2020.

Adjusted Total Asset Turnover

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Sales 27,243  28,228  14,900  11,437  10,534 
Total assets 88,229  86,612  93,386  20,436  19,332 
Activity Ratio
Total asset turnover1 0.31 0.33 0.16 0.56 0.54
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Sales 27,243  28,228  14,900  11,437  10,534 
Adjusted total assets 87,961  86,369  92,876  20,238  19,147 
Activity Ratio
Adjusted total asset turnover2 0.31 0.33 0.16 0.57 0.55

Based on: 10-K (filing date: 2021-03-01), 10-K (filing date: 2020-03-02), 10-K (filing date: 2019-03-18), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-03-01).

2020 Calculations

1 Total asset turnover = Sales ÷ Total assets
= 27,243 ÷ 88,229 = 0.31

2 Adjusted total asset turnover = Sales ÷ Adjusted total assets
= 27,243 ÷ 87,961 = 0.31

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Linde plc’s adjusted total asset turnover ratio improved from 2018 to 2019 but then slightly deteriorated from 2019 to 2020.

Adjusted Financial Leverage

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Total assets 88,229  86,612  93,386  20,436  19,332 
Total Linde plc shareholders’ equity 47,317  49,074  51,596  6,018  5,021 
Solvency Ratio
Financial leverage1 1.86 1.76 1.81 3.40 3.85
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets 87,961  86,369  92,876  20,238  19,147 
Adjusted total Linde plc shareholders’ equity 53,753  55,720  58,518  6,987  6,045 
Solvency Ratio
Adjusted financial leverage2 1.64 1.55 1.59 2.90 3.17

Based on: 10-K (filing date: 2021-03-01), 10-K (filing date: 2020-03-02), 10-K (filing date: 2019-03-18), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-03-01).

2020 Calculations

1 Financial leverage = Total assets ÷ Total Linde plc shareholders’ equity
= 88,229 ÷ 47,317 = 1.86

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Linde plc shareholders’ equity
= 87,961 ÷ 53,753 = 1.64

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
Linde plc’s adjusted financial leverage ratio decreased from 2018 to 2019 but then increased from 2019 to 2020 exceeding 2018 level.

Adjusted Return on Equity (ROE)

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Net income, Linde plc 2,501  2,285  4,381  1,247  1,500 
Total Linde plc shareholders’ equity 47,317  49,074  51,596  6,018  5,021 
Profitability Ratio
ROE1 5.29% 4.66% 8.49% 20.72% 29.87%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income, Linde plc 2,133  1,982  4,195  1,250  1,487 
Adjusted total Linde plc shareholders’ equity 53,753  55,720  58,518  6,987  6,045 
Profitability Ratio
Adjusted ROE2 3.97% 3.56% 7.17% 17.89% 24.60%

Based on: 10-K (filing date: 2021-03-01), 10-K (filing date: 2020-03-02), 10-K (filing date: 2019-03-18), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-03-01).

2020 Calculations

1 ROE = 100 × Net income, Linde plc ÷ Total Linde plc shareholders’ equity
= 100 × 2,501 ÷ 47,317 = 5.29%

2 Adjusted ROE = 100 × Adjusted net income, Linde plc ÷ Adjusted total Linde plc shareholders’ equity
= 100 × 2,133 ÷ 53,753 = 3.97%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Linde plc’s adjusted ROE deteriorated from 2018 to 2019 but then slightly improved from 2019 to 2020.

Adjusted Return on Assets (ROA)

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Net income, Linde plc 2,501  2,285  4,381  1,247  1,500 
Total assets 88,229  86,612  93,386  20,436  19,332 
Profitability Ratio
ROA1 2.83% 2.64% 4.69% 6.10% 7.76%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income, Linde plc 2,133  1,982  4,195  1,250  1,487 
Adjusted total assets 87,961  86,369  92,876  20,238  19,147 
Profitability Ratio
Adjusted ROA2 2.42% 2.29% 4.52% 6.18% 7.77%

Based on: 10-K (filing date: 2021-03-01), 10-K (filing date: 2020-03-02), 10-K (filing date: 2019-03-18), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-03-01).

2020 Calculations

1 ROA = 100 × Net income, Linde plc ÷ Total assets
= 100 × 2,501 ÷ 88,229 = 2.83%

2 Adjusted ROA = 100 × Adjusted net income, Linde plc ÷ Adjusted total assets
= 100 × 2,133 ÷ 87,961 = 2.42%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Linde plc’s adjusted ROA deteriorated from 2018 to 2019 but then slightly improved from 2019 to 2020.