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

Linde plc (NYSE:LIN)

Analysis of Operating Leases

Advanced level

An operating lease is treated like a rental contract. Neither the leased asset nor the associated liability is reported on the lessee balance sheet, but the rights may be very similar to the rights of an owner. The lessee only records the lease payments as a rental expense in income statement.

Present Value of Future Operating Lease Payments (before Adoption of FASB Topic 842)

Linde plc, future operating lease payments (before adoption of FASB Topic 842)

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Total undiscounted future operating lease payments — 1,300  583  529  476 
Discount rate1 — 2.12% 2.46% 2.37% 2.53%
 
Total present value of future operating lease payments — 1,206  538  488  442 

Based on: 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), 10-K (filing date: 2016-02-24).

1 Weighted-average interest rate for Linde plc’s debt

Year Future operating lease payments (as reported) Year Future operating lease payments (estimated) Present value at 2.12%
2019 305  2019 305  299 
2020 236  2020 236  226 
2021 186  2021 186  175 
2022 145  2022 145  133 
2023 102  2023 102  92 
2024 and thereafter 326  2024 102  90 
2025 102  88 
2026 102  86 
2027 20  17 
Total: 1,300  1,300  1,206 

Based on: 10-K (filing date: 2019-03-18).

Year Future operating lease payments (as reported) Year Future operating lease payments (estimated) Present value at 2.46%
2018 131  2018 131  128 
2019 114  2019 114  109 
2020 94  2020 94  87 
2021 76  2021 76  69 
2022 61  2022 61  54 
2023 and thereafter 107  2023 61  53 
2024 46  39 
Total: 583  583  538 

Based on: 10-K (filing date: 2018-02-28).

Year Future operating lease payments (as reported) Year Future operating lease payments (estimated) Present value at 2.37%
2017 117  2017 117  114 
2018 97  2018 97  93 
2019 79  2019 79  74 
2020 65  2020 65  59 
2021 54  2021 54  48 
2022 and thereafter 117  2022 54  47 
2023 54  46 
2024 9  7 
Total: 529  529  488 

Based on: 10-K (filing date: 2017-03-01).

Year Future operating lease payments (as reported) Year Future operating lease payments (estimated) Present value at 2.53%
2016 116  2016 116  113 
2017 100  2017 100  95 
2018 84  2018 84  78 
2019 67  2019 67  61 
2020 51  2020 51  45 
2021 and thereafter 58  2021 51  44 
2022 7  6 
Total: 476  476  442 

Based on: 10-K (filing date: 2016-02-24).

Adjustments to Financial Statements for Operating Leases

Linde plc, adjustments to financial statements

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Adjustment to Total Assets
Total assets (as reported) 86,612  93,386  20,436  19,332  18,319 
Add: Operating lease right-of-use asset (before adoption of FASB Topic 842)1 —  1,206  538  488  442 
Total assets (adjusted) 86,612  94,592  20,974  19,820  18,761 
Adjustment to Total Debt
Total debt (as reported) 13,956  15,296  9,000  9,515  9,231 
Add: Operating lease liability (before adoption of FASB Topic 842)2 —  1,206  538  488  442 
Add: Current operating lease liability 260  —  —  —  — 
Add: Long-term operating lease liability 716  —  —  —  — 
Total debt (adjusted) 14,932  16,502  9,538  10,003  9,673 

Based on: 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), 10-K (filing date: 2016-02-24).

1, 2 Equal to total present value of future operating lease payments.

Linde plc, Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios for Operating Leases (Summary)

Linde plc, adjusted financial ratios

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Total Asset Turnover1
Reported total asset turnover 0.33 0.16 0.56 0.54 0.59
Adjusted total asset turnover 0.33 0.16 0.55 0.53 0.57
Debt to Equity2
Reported debt to equity 0.28 0.30 1.50 1.90 2.10
Adjusted debt to equity 0.30 0.32 1.58 1.99 2.20
Return on Assets3 (ROA)
Reported ROA 2.64% 4.69% 6.10% 7.76% 8.44%
Adjusted ROA 2.64% 4.63% 5.95% 7.57% 8.25%

Based on: 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), 10-K (filing date: 2016-02-24).

1 See details »

2 See details »

3 See details »

Financial 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 deteriorated from 2017 to 2018 but then slightly improved from 2018 to 2019.
Adjusted debt to equity A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. Linde plc’s adjusted debt to equity ratio improved from 2017 to 2018 and from 2018 to 2019.
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Linde plc’s adjusted ROA deteriorated from 2017 to 2018 and from 2018 to 2019.

Linde plc, Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Sales 28,228  14,900  11,437  10,534  10,776 
Total assets 86,612  93,386  20,436  19,332  18,319 
Activity Ratio
Total asset turnover1 0.33 0.16 0.56 0.54 0.59
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Sales 28,228  14,900  11,437  10,534  10,776 
Adjusted total assets 86,612  94,592  20,974  19,820  18,761 
Activity Ratio
Adjusted total asset turnover2 0.33 0.16 0.55 0.53 0.57

Based on: 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), 10-K (filing date: 2016-02-24).

2019 Calculations

1 Total asset turnover = Sales ÷ Total assets
= 28,228 ÷ 86,612 = 0.33

2 Adjusted total asset turnover = Sales ÷ Adjusted total assets
= 28,228 ÷ 86,612 = 0.33

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 deteriorated from 2017 to 2018 but then slightly improved from 2018 to 2019.

Adjusted Debt to Equity

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Total debt 13,956  15,296  9,000  9,515  9,231 
Total Linde plc shareholders’ equity 49,074  51,596  6,018  5,021  4,389 
Solvency Ratio
Debt to equity1 0.28 0.30 1.50 1.90 2.10
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Adjusted total debt 14,932  16,502  9,538  10,003  9,673 
Total Linde plc shareholders’ equity 49,074  51,596  6,018  5,021  4,389 
Solvency Ratio
Adjusted debt to equity2 0.30 0.32 1.58 1.99 2.20

Based on: 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), 10-K (filing date: 2016-02-24).

2019 Calculations

1 Debt to equity = Total debt ÷ Total Linde plc shareholders’ equity
= 13,956 ÷ 49,074 = 0.28

2 Adjusted debt to equity = Adjusted total debt ÷ Total Linde plc shareholders’ equity
= 14,932 ÷ 49,074 = 0.30

Solvency ratio Description The company
Adjusted debt-to-equity A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. Linde plc’s adjusted debt-to-equity ratio improved from 2017 to 2018 and from 2018 to 2019.

Adjusted Return on Assets (ROA)

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Net income, Linde plc 2,285  4,381  1,247  1,500  1,547 
Total assets 86,612  93,386  20,436  19,332  18,319 
Profitability Ratio
ROA1 2.64% 4.69% 6.10% 7.76% 8.44%
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Net income, Linde plc 2,285  4,381  1,247  1,500  1,547 
Adjusted total assets 86,612  94,592  20,974  19,820  18,761 
Profitability Ratio
Adjusted ROA2 2.64% 4.63% 5.95% 7.57% 8.25%

Based on: 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), 10-K (filing date: 2016-02-24).

2019 Calculations

1 ROA = 100 × Net income, Linde plc ÷ Total assets
= 100 × 2,285 ÷ 86,612 = 2.64%

2 Adjusted ROA = 100 × Net income, Linde plc ÷ Adjusted total assets
= 100 × 2,285 ÷ 86,612 = 2.64%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Linde plc’s adjusted ROA deteriorated from 2017 to 2018 and from 2018 to 2019.