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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of the company’s financial condition and results of operations should be read together with its consolidated financial statements and notes to the consolidated financial statements included in Item 8 of this Form 10-K.

Page

Business Overview 20

Executive Summary – Financial Results & Outlook 21

Consolidated Results and Other Information 22

Segment Discussion 28

Liquidity, Capital Resources and Other Financial Data 34

Off-Balance Sheet Arrangements 36

Critical Accounting Estimates 36

New Accounting Standards 39

Fair Value Measurements 39

Non-GAAP Financial Measures 40

Supplemental Guarantee Information 44

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BUSINESS OVERVIEW

The company's primary products in its industrial gases business are atmospheric gases (oxygen, nitrogen, argon, rare gases) and process gases (carbon dioxide, helium, hydrogen, electronic gases, specialty gases, acetylene). The company also designs, engineers, and builds equipment that produces industrial gases and offers its customers a wide range of gas production and processing services such as olefin plants, natural gas plants, air separation plants, hydrogen and synthesis gas plants and other types of plants.

Linde’s industrial gas operations are managed on a geographical basis and in 2023 90% of sales were generated by Linde's three geographic segments (Americas, EMEA and APAC) and the remaining 10% are related largely to the Engineering segment, and to a lesser extent Other (see Note 18 to the consolidated financial statements for operating segment details).

Linde serves a diverse group of industries including healthcare, chemicals and energy, manufacturing, metals and mining, food and beverage, and electronics. The diversity of end-markets supports financial stability for Linde in varied business cycles.

Linde's industrial gas business generates most of its revenues and earnings in the following geographies where the company has its strongest market positions and where distribution and production operations allow the company to deliver the highest level of service to its customers at the lowest cost.

United States Germany China

Brazil United Kingdom Australia

Mexico Eastern Europe South Korea

Canada India

The company manufactures and distributes its industrial gas products through networks of thousands of production plants, pipeline complexes, distribution centers and delivery vehicles. Major pipeline complexes are primarily located in the United States and China. These networks are a competitive advantage, providing the foundation of reliable product supply to the company’s customer base. The majority of Linde’s business is conducted through long-term contracts which provide stability in cash flow and the ability to pass through changes in energy and feedstock costs to customers. The company has growth opportunities in all major geographies and in diverse end-markets such as healthcare, chemicals and energy, manufacturing, metals and mining, food and beverage, and electronics.

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EXECUTIVE SUMMARY – FINANCIAL RESULTS & OUTLOOK

2023 Year in review

•Sales of $32,854 million were 2% below 2022 sales of $33,364 million. Cost pass-through, representing the contractual billing of energy cost variances primarily to onsite customers, decreased sales by 3% with minimal impact on operating profit. Engineering decreased sales by 2%. Volumes decreased sales by 1%. Currency translation decreased sales by 1%, largely in APAC. Divestitures, net of acquisitions, decreased sales by 1% primarily due to the divestment of the GIST business, partially offset by the nexAir, LLC acquisition. The aforementioned drivers were partially offset by 6% higher price attainment across all geographic segments.

•Reported operating profit of $8,024 million was 49% above 2022. Adjusted operating profit of $9,070 million was 15% above 2022. The increase in the reported operating profit was primarily driven by the Russia-Ukraine conflict and other charges recorded in 2022 and included higher pricing, savings from productivity initiatives, and lower depreciation and amortization driven by merger related intangible assets. These increases more than offset the adverse impacts of cost inflation and lower volumes in the year. The adjusted operating profit increase was primarily due to higher pricing and productivity initiatives, which more than offset the effects of cost inflation and lower volumes during the year.*

•Net income - Linde plc of $6,199 million and diluted earnings per share of $12.59 increased from $4,147 million and $8.23, respectively in 2022. Adjusted net income - Linde plc of $6,989 million and adjusted diluted earnings per share of $14.20 were 13% and 16%, respectively above 2022 adjusted amounts.*

•Cash flow from operations of $9,305 million was $441 million above 2022. The increase was driven by higher net income partially offset by higher net working capital requirements, including lower inflows from contract liabilities from engineering customer advanced payments. Capital expenditures were $3,787 million; dividends paid were $2,482 million; net purchases of ordinary shares of $3,925 million; and debt borrowings, net were $1,060 million.

*A reconciliation of the adjusted amounts can be found in the "Non-GAAP Financial Measures" section in this MD&A.

2024 Outlook

Linde provides quarterly updates on operating results, material trends that may affect financial performance, and financial guidance via earnings releases and investor teleconferences. These materials are available on the company’s website, www.linde.com, but are not incorporated herein.

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CONSOLIDATED RESULTS AND OTHER INFORMATION

The discussion that follows includes a comparison of our results of operations and liquidity and capital resources for the years ended December 31, 2023 and 2022. For the discussion comparing the years ended December 31, 2022 and 2021, refer to Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Form 10-K for the year ended December 31, 2022.

The following table provides summary information for 2023 and 2022. The reported amounts are GAAP amounts from the Consolidated Statements of Income. The adjusted amounts are intended to supplement investors' understanding of the company's financial information and are not a substitute for GAAP measures.

Reported Amounts

As a percent of sales 53.2 % 58.3 %

Selling, general and administrative $ 3,295 $ 3,107 6 %

As a percent of sales 10.0 % 9.3 %

Depreciation and amortization $ 3,816 $ 4,204 (9) %

Other charges (a) $ 40 $ 1,029 —

Effective tax rate 22.7 % 25.9 %

Income from equity investments $ 167 $ 172 (3) %

Noncontrolling interests $ (142) $ (134) 6 %

Diluted earnings per share $ 12.59 $ 8.23 53 %

Adjusted Amounts (b)

Other Financial Data (b)

As percent of sales 36.5 % 29.2 %

As percent of sales 36.9 % 32.6 %

________________________

(a)See Note 3 to the consolidated financial statements.

(b)Adjusted amounts and Other Financial Data are non-GAAP performance measures. A reconciliation of reported amounts to adjusted amounts can be found in the "Non-GAAP Financial Measures" section of this MD&A.

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Results of Operations

The following table provides a summary of changes in consolidated sales:

% Change

Factors Contributing to Changes - Sales

Volume (1) %

Price/Mix 6 %

Cost pass-through (3) %

Currency (1) %

Acquisitions/divestitures (1) %

Engineering (2) %

2023 Compared With 2022

Sales

Linde sales decreased $510 million, or 2%, for the 2023year versus 2022. Higher pricing across all geographic segments contributed 6% to sales. Cost pass-through, representing the contractual billing of energy cost variances primarily to onsite customers, decreased sales by 3%, with minimal impact on operating profit. Volumes decreased sales by 1% primarily driven by the electronics and metals and mining end markets. The impact of divestitures, net of acquisitions decreased sales by 1%. Currency translation decreased sales by 1%, largely in APAC, driven by the weakening of the Chinese yuan and Australian dollar against the U.S. dollar, partially offset by EMEA, driven by the strengthening of the Euro and British pound.

Cost of sales, exclusive of depreciation and amortization

Cost of sales, exclusive of depreciation and amortization, decreased $1,958 million, or 10%, for the year primarily due to lower cost pass-through and volumes, the net impact of acquisitions and divestitures and productivity gains which more than offset cost inflation. Cost of sales, exclusive of depreciation and amortization, was 53.2% and 58.3% of sales, respectively, in 2023 compared to 2022. The decrease as a percentage of sales was primarily due to higher pricing and lower cost pass-through.

Selling, general and administrative expenses

Selling, general and administrative expense ("SG&A") increased $188 million, from $3,107 in 2022 to $3,295 million in 2023. SG&A was 10.0% of sales in 2023 versus 9.3% in 2022. Currency impacts decreased SG&A by approximately $3 million in 2023. Excluding currency impacts, underlying SG&A increased primarily due to higher costs including the acquisition of nexAir.

Depreciation and amortization

Reported depreciation and amortization expense decreased $388 million, or 9% versus 2022. The decrease is primarily due to lower depreciation and amortization of assets acquired in the merger.

On an adjusted basis, depreciation and amortization expense increased $102 million, or 4%, versus 2022. Currency impacts decreased depreciation and amortization by $29 million in 2023. Excluding currency, underlying depreciation and amortization increased due to the net impact of acquisitions and new project start ups.

Other charges

Other charges were $40 million and $1,029 million for 2023 and 2022, respectively. In 2023, the costs primarily related to severance in the Engineering segment and expenses incurred due to the intercompany reorganization. The charge for 2022 relates primarily to the deconsolidation and impairment of Russian subsidiaries resulting from the ongoing war in Ukraine and related sanctions recorded as of June 30, 2022.

On an adjusted basis, these charges have been excluded in both periods.

Operating profit

Reported operating profit increased $2,655 million in 2023, or 49%. On an adjusted basis, operating profit increased $1,166 million, or 15%, for 2023 versus 2022.

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On a reported basis, the increase was primarily driven by Russia-Ukraine conflict and other charges recorded in 2022 and included higher pricing, savings from productivity initiatives, and lower depreciation and amortization driven by merger related intangible assets. These increases more than offset the adverse impacts of inflation and currency in the year as well as other charges of $40 million.

On an adjusted basis, which excludes the impacts of purchase accounting as well as other charges, operating profit increased $1,166 million, or 15%. Operating profit growth was driven by higher pricing, and productivity initiatives, partially offset by cost inflation and lower volumes. A discussion of operating profit by segment is included in the segment discussion that follows.

Interest expense - net

Reported interest expense – net in 2023 increased $137 million, or 217%, versus 2022. On an adjusted basis interest expense increased $118 million, or 120% in 2023 as compared to 2022. The increase was driven primarily by higher interest rates on debt and included approximately $28 million of devaluation impacts from hyperinflationary countries.

Net pension and OPEB cost (benefit), excluding service cost

Reported net pension and OPEB cost (benefit), excluding service cost were benefits of $164 million and $237 million in 2023 and 2022, respectively. The decrease in benefit primarily relates to higher interest cost reflective of the higher discount rate environment year-over-year (see Note 16 to the consolidated financial statements).

Effective tax rate

The reported effective tax rate ("ETR") for 2023 was 22.7% versus 25.9% in 2022. The decrease in the rate is primarily related to a net decrease in the company's uncertain tax positions and the absence of the net unfavorable tax expense resulting from the Russia impairment and deconsolidation in 2022 (see Note 3 to the consolidated financial statements).

On an adjusted basis, the ETR for 2023 was 23.6% versus 24.2% in 2022. The decrease includes higher tax benefits from share based compensation.

Income from equity investments

Reported income from equity investments for 2023 was $167 million as compared to $172 million in 2022. On an adjusted basis, income from equity investments for 2023 was $239 million versus $247 million in 2022.

On an adjusted basis, the year-over-year decrease in income from equity investments was primarily driven by the overall performance of investments in APAC.

Noncontrolling interests

At December 31, 2023, noncontrolling interests from continuing operations consisted primarily of noncontrolling shareholders’ investments in APAC (primarily in China).

Reported noncontrolling interests from continuing operations increased $8 million, from $134 million in 2022 to $142 million in 2023.

Adjusted noncontrolling interests from continuing operations decreased $2 million in 2023 as compared to 2022.

Net Income - Linde plc

Reported net income - Linde plc increased $2,052 million, or 49%. On an adjusted basis, which excludes the impacts of purchase accounting and other charges, net income - Linde plc increased $794 million, or 13%, in 2023 versus 2022. On both a reported and adjusted basis, the increase was driven by higher operating profit.

Diluted earnings per share

Reported diluted earnings per share increased $4.36, or 53%, in 2023 as compared to 2022. On an adjusted basis, diluted EPS of $14.20 in 2023 increased 16% versus 2022. The increase on both a reported and adjusted basis is primarily due to higher net income - Linde plc and lower diluted shares outstanding.

Employees

The number of employees at December 31, 2023 was 66,323, an increase of 2%, or 1,313 employees from 2022, driven primarily by the acquisition of nexAir.

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Other Financial Data

EBITDA increased to $12,007 million in 2023 from $9,745 million in 2022. Adjusted EBITDA increased to $12,133 million for 2023 as compared to $10,873 million in 2022. The increase in both periods was driven by higher net income - Linde plc versus prior year.

See the "Non-GAAP Financial Measures" section for definitions and reconciliations of these non-GAAP measures to reported GAAP amounts.

Other Comprehensive Income (Loss)

Other comprehensive income (loss) for the year ended December 31, 2023 was a loss of $35 million resulted primarily from losses related to the change in funded status of retirement plans of $380 million and derivative losses of $55 million largely offset by currency translation adjustments of $400 million. The translation adjustments reflect the impact of translating local currency foreign subsidiary financial statements to U.S. dollars, and are largely driven by the movement of the U.S. dollar against major currencies including the Euro, British pound and the Chinese yuan. See the "Currency" section of the MD&A for exchange rates used for translation purposes and Note 7 to the consolidated financial statements for a summary of the currency translation adjustment component of accumulated other comprehensive income (loss) by segment.

Related Party Transactions

The company’s related parties are primarily unconsolidated equity affiliates. The company did not engage in any material transactions involving related parties that included terms or other aspects that differ from those which would be negotiated with independent parties.

Environmental Matters

Linde’s principal operations relate to the production and distribution of atmospheric and other industrial gases, many of which are used to help customers reduce their emissions. Worldwide costs relating to environmental protection may continue to grow due to increasingly stringent laws and regulations. In addition, Linde may face physical risks from climate change and extreme weather.

Climate Change

Linde operates in jurisdictions that have, or are developing, laws and/or regulations to reduce or mitigate the adverse effects of greenhouse gas ("GHG") emissions and therefore faces a highly uncertain regulatory environment in this area. For example, the U.S. Environmental Protection Agency ("EPA") has promulgated rules requiring reporting of GHG emissions to which Linde, its suppliers and customers are subject to. EPA has also promulgated regulations to restrict GHG emissions, including final rules regulating GHG emissions from light-duty vehicles and certain large manufacturing facilities, including some of Linde’s suppliers and customers. In addition to these developments in the United States, several other countries worldwide have implemented carbon taxation or trading systems which impact the company and its customers, including regulations in China, Singapore and the European Union. Among other impacts, such regulations are expected to raise the cost of energy, which is a significant cost for Linde. Nevertheless, Linde's long-term customer contracts routinely provide rights to recover increased electricity, natural gas, and other costs that are incurred by the company as a result of climate change regulation.

Linde anticipates continued growth in hydrogen sales due to increased focus on decarbonization projects. Traditionally, hydrogen production plants and a large number of other manufacturing and electricity-generating plants have been identified as sources of carbon dioxide emissions and these plants are subject to cap-and-trade regulations in jurisdictions including California and the European Union. Linde believes it will be able to mitigate the costs of these regulations through the terms of its product supply contracts. However, legislation that limits GHG emissions may impact growth by increasing capital, compliance, operating and maintenance costs and/or decreasing demand.

To manage business risks from current and potential GHG emission regulation as well as physical consequences of climate change, Linde actively monitors current developments, evaluates the direct and indirect business risks, and takes appropriate actions. Among others, actions include: increasing relevant resources and training; maintaining contingency plans; obtaining advice and counsel from expert vendors, insurance providers and industry experts; incorporating GHG provisions in commercial agreements; and conducting regular reviews of the business risks with management. Although there are considerable uncertainties, Linde believes that the business risk from potential regulations can be effectively managed through its commercial contracts. Additionally, Linde’s plant design, operations, and risk management teams are

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engaged to manage and mitigate losses from physical climate change, and the company does not anticipate any material effects regarding its plant operations or business arising from potential physical risks of climate change.

Linde continuously seeks opportunities to optimize energy use and GHG emissions through research and development in customer applications and rigorous operational energy efficiency, sourcing low-carbon source energy, and purchasing hydrogen as a chemical byproduct where feasible. Linde tracks GHG emission performance versus targets and reports regularly to business management and annually to Linde's Board of Directors. The Sustainability Committee is responsible for oversight of the Company's programs, policies and strategies related to environmental matters, including climate change, greenhouse gas reduction goals and decarbonization solutions, such as clean energy and carbon management.

At the same time, external factors may provide Linde with future business opportunities. Examples include current legislation, such as the Inflation Reduction Act in the U.S., which provides for investments in production of clean hydrogen and decarbonization technologies. Other factors include governmental regulation of GHG and other emissions; uncertain costs of energy and certain natural resources; the development of renewable energy alternatives; and new technologies that help extract natural gas, improve air quality, increase energy efficiency and mitigate the impacts of climate change. Linde continues to develop new applications that can help customers lower emissions by reducing energy consumption and increasing product throughput. Stricter regulation of water quality in emerging economies such as China provide a growing market for a number of gases, e.g., oxygen for wastewater treatment. Increased concern about drought in areas such as California and Australia may create additional markets for carbon dioxide for desalination. Renewable fuel standards in the European Union and U.S. can create a market for second-generation biofuels which use industrial gases such as oxygen, carbon dioxide, and hydrogen.

Costs Relating to the Protection of the Environment

Environmental protection costs in 2023 were not significant. Linde anticipates that future annual environmental protection expenditures will be similar to 2023, subject to any significant changes in existing laws and regulations. Based on historical results and current estimates, management does not believe that environmental expenditures will have a material adverse effect on the consolidated financial position, the consolidated results of operations or cash flows in any given year.

Legal Proceedings

See Note 17 to the consolidated financial statements for information concerning legal proceedings.

Retirement Benefits

Pensions

The net periodic benefit cost (benefit) for the U.S. and non-U.S. pension plans was a benefit of $80 million, $110 million and $35 million in 2023, 2022 and 2021, respectively.

The funded status (pension benefit obligation ("PBO") less the fair value of plan assets) for the U.S. plans was a deficit of $137 million and $238 million at December 31, 2023 and 2022, respectively. The funded status for non-U.S. plans was a deficit of $207 million and surplus of $208 million at December 31, 2023 and 2022, respectively. The U.S. plan derived a benefit from the actual return on plan assets. Non-U.S. plans also experienced an increase in plan assets, offset by unfavorability generated from a higher PBO due to a decrease in discount rates.

Global pension contributions were $46 million in 2023, $51 million in 2022, and $42 million in 2021. At a minimum, Linde contributes to its pension plans to comply with local regulatory requirements (e.g., ERISA in the U.S.). Discretionary contributions in excess of the local minimum requirements are made based on many factors, including long-term projections of the plans' funded status, the economic environment, potential risk of overfunding, pension insurance costs and alternative uses of cash. Changes to these factors can impact the timing of discretionary contributions from year to year. Estimated required contributions for 2024 are currently expected to be in the range of $35 million to $45 million.

Linde assumes expected returns on plan assets for 2024 of 7.00% and5.83% for the U.S. and non-U.S. plans, respectively, which are consistent with the long-term expected returns on its investment portfolios.

Excluding the impact of any settlements, 2024 consolidated pension expense is expected to be a benefit of approximately $115 million. The benefit derived from the expected return on assets assumption for Linde's most significant plans is anticipated to more than offset the expense from service and interest cost accruals and the higher amortization of deferred losses.

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Refer to the Critical Accounting Estimates section and Note 16 to the consolidated financial statements for a more detailed discussion of the company’s retirement benefits, including a description of the various retirement plans and the assumptions used in the calculation of net periodic benefit cost (benefit) and funded status.

Insurance

Linde purchases insurance to limit a variety of property and casualty risks, including those related to property, business interruption, third-party liability and workers’ compensation. Currently, the company self retains up to $10 million per occurrence for vehicle liability in the United States, $5 million per occurrence for workers' compensation and general liability. In addition, the company self retains risk up to €5 to €7.5 million at its various properties worldwide for property damage resulting from fire, flood and other perils affecting its properties along with a separate €5 to €7.5 million deductible on business interruption resulting from a major peril loss. To mitigate its aggregate loss potential above these retentions, the company purchases catastrophic insurance coverage from highly rated insurance companies. The company does not currently operate or participate in any captive insurance companies or other non-traditional risk transfer alternatives.

At December 31, 2023 and 2022, the company had recorded a total of $75 million and $71 million, respectively, representing an estimate of the retained liability for the ultimate cost of claims incurred and unpaid as of the balance sheet dates. The estimated liability is established using statistical analysis and is based upon historical experience, actuarial assumptions and professional judgment. These estimates are subject to the effects of trends in loss severity and frequency and are subject to a significant degree of inherent variability. If actual claims differ from the company’s estimates, they will be adjusted at that time and financial results could be impacted.

Linde recognizes estimated insurance proceeds relating to damages at the time of loss only to the extent of incurred losses. Any insurance recoveries for business interruption and for property damages in excess of the net book value of the property are recognized only when realized or pending payments confirmed by its insurance companies.

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SEGMENT DISCUSSION

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 represents three of the company's 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 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 is 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 Chief Operating Decision Maker ("CODM") assesses performance and allocates resources.

The table below presents sales and operating profit information about reportable segments and Other for the years ended December 31, 2023 and 2022.

(Millions of dollars)Year Ended December 31, 2023 2022 Variance

Sales

Operating Profit

Reconciliation to reported operating profit :

Purchase accounting impacts - Linde AG (1,006) (1,506)

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Americas

(Dollar amounts in millions) Variance

As a percent of sales 29.7 % 26.9 %

% Change

Factors Contributing to Changes - Sales

Volume — %

Price/Mix 6 %

Cost pass-through (6) %

Currency — %

Acquisitions/Divestitures 3 %

The Americas segment includes Linde’s industrial gases operations in approximately 20 countries including the United States, Canada, Mexico and Brazil.

Sales

Sales for the Americas segment increased $430 million, or 3%, in 2023 versus 2022. Higher pricing contributed 6% to sales. The impact of net acquisitions increased sales by 3% primarily due to the acquisition of nexAir, LLC (See Note 2 to the consolidated financial statements). Cost past-through decreased sales by 6% with minimal impact on operating profit. Volumes and currency translation remained flat.

Operating Profit

Operating profit in the Americas segment increased $512 million, or 14%, in 2023 versus 2022 driven primarily by higher pricing, acquisitions and continued productivity initiatives which more than offset cost inflation the year.

EMEA

(Dollar amounts in millions) Variance

As a percent of sales 29.1 % 23.8 %

% Change

Factors Contributing to Changes - Sales

Volume (4) %

Price/Mix 9 %

Cost pass-through (3) %

Currency 1 %

Acquisitions/Divestitures (2) %

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The EMEA segment includes Linde's industrial gases operations in approximately 45 European, Middle Eastern and African countries including Germany, the U.K., France, Sweden and the Republic of South Africa.

Sales

EMEA segment sales increased by $99 million, or 1%, in 2023 versus 2022. Higher price attainment increased sales by 9%. Volumes decreased sales by 4% led by the chemicals and energy end market. Cost pass-through decreased sales by 3% with minimal impact on operating profit. Currency translation increased sales by 1% due largely to the strengthening of the Euro and British pound against the U.S. Dollar. The impact of net divestitures decreased sales by 2% primarily due to the deconsolidation of the Russian subsidiaries in June 2022.

Operating Profit

Operating Profit for the EMEA segment increased $473 million, or 23%, in 2023 versus 2022. The increase was driven primarily by higher pricing and continued productivity initiatives, partially offset by cost inflation, lower volumes and divestitures.

APAC

(Dollar amounts in millions) Variance

As a percent of sales 27.5 % 25.8 %

% Change

Factors Contributing to Changes - Sales

Volume/Equipment 2 %

Price/Mix 4 %

Cost pass-through (1) %

Currency (4) %

Acquisitions/Divestitures — %

The APAC segment includes Linde's industrial gases operations in approximately 20 Asian and South Pacific countries and regions including China, Australia, India and South Korea.

Sales

Sales for the APAC segment increased $79 million, or 1%, in 2023 versus 2022. Volume increased 2% including project start-ups in the electronics and chemicals and energy end markets. Higher price increased sales by 4%. Cost pass-through decreased sales by 1% with minimal impact on operating profit. Currency translation decreased sales by 4% driven primarily by the weakening of the Australian dollar, Indian rupee and Chinese Yuan against the U.S. Dollar.

Operating Profit

Operating profit in the APAC segment increased $136 million, or 8%, in 2023 versus 2022. The increase was primarily driven by higher pricing and continued productivity initiatives which more than offset the impact of currency and cost inflation.

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Engineering

(Dollar amounts in millions) Variance

As a percent of sales 22.7 % 20.1 %

% Change

Factors Contributing to Changes - Sales

Currency 1 %

Other (23) %

Sales

Engineering segment sales decreased $602 million, or 22%, in 2023 versus 2022 . The decrease was driven by project timing.

Projects for Russia that were sanctioned, and therefore terminated or suspended, have been lawfully wound down and represented approximately $238 million and $894 million of the Engineering segment sales during 2023 and 2022, respectively.

Operating profit

Engineering segment operating profit decreased $64 million, or 12%, in 2023 versus 2022. The decline from lower sales was partially offset by higher margin on wind down of terminated or suspended projects sanctioned in Russia.

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Other

(Dollar amounts in millions) Variance

As a percent of sales 3.3 % (3.7) %

% Change

Factors Contributing to Changes - Sales

Volume/Price 2 %

Currency — %

Acquisitions/Divestitures (31) %

Other consists of corporate costs and a few smaller businesses including: Linde Advanced Materials Technology and global helium wholesale; which individually do not meet the quantitative thresholds for separate presentation.

Sales

Sales for Other decreased $516 million, or 29%, in 2023 versus 2022. Divestitures decreased sales by 31% primarily due to sale of GIST business in third quarter of 2022. Volume/Price increased sales by 2% driven primarily by price in the coatings and global helium businesses, partially offset by lower coatings volumes.

Operating profit

Operating profit in Other increased $109 million, or 165%, in 2023 versus 2022 driven primarily by higher pricing in global helium and coatings and lower corporate costs which more than offset the impact of divestitures and lower volumes.

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Currency

The results of Linde’s non-U.S. operations are translated to the company’s reporting currency, the U.S. dollar, from the functional currencies used in the countries in which the company operates. For most foreign operations, Linde uses the local currency as its functional currency. There is inherent variability and unpredictability in the relationship of these functional currencies to the U.S. dollar and such currency movements may materially impact Linde’s results of operations in any given period.

To help understand the reported results, the following is a summary of the significant currencies underlying Linde’s consolidated results and the exchange rates used to translate the financial statements (rates of exchange expressed in units of local currency per U.S. dollar):

Percent of 2023 Statements of Income Balance Sheets

Consolidated Average Year Ended December 31, December 31,

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LIQUIDITY, CAPITAL RESOURCES AND OTHER FINANCIAL DATA

(Millions of dollars) Year Ended December 31, 2023 2022

Net Cash Provided by (Used for)

Operating Activities

Non-cash charges (credits):

Add: Other charges, net of payments (a) (118) 902

Add: Depreciation and amortization 3,816 4,204

Add (Less): Deferred income taxes (84) (383)

Add (Less): Non-cash charges and other 184 58

Less: Pension contributions (46) (51)

Add (Less): Working capital (483) (310)

Net cash provided by (used for) operating activities $ 9,305 $ 8,864

Investing Activities

Acquisitions, net of cash acquired (953) (110)

Divestitures and asset sales, net of cash divested 70 195

Net cash provided by (used for) investing activities $ (4,670) $ (3,088)

Financing Activities

Debt increases (decreases) – net $ 1,060 $ 4,475

Issuances (purchases) of ordinary shares – net (3,925) (5,132)

Cash dividends – Linde plc shareholders (2,482) (2,344)

Noncontrolling interest transactions and other (53) (88)

Net cash provided by (used for) financing activities $ (5,400) $ (3,089)

Effect of exchange rate changes on cash $ (7) $ (74)

Cash and cash equivalents, end-of-period $ 4,664 $ 5,436

____________________

(a)See Note 3 to the consolidated financial statements.

Cash decreased $772 million in 2023 versus 2022. The primary sources of cash in 2023 were cash flows from operations of $9,305 million and debt borrowings, net of $1,060 million. The primary uses of cash included capital expenditures of $3,787 million, net purchases of ordinary shares of $3,925 million, cash dividends to shareholders of $2,482 million.

2023 compared with 2022

Cash Flows From Operations

Cash flows from operations was $9,305 million, an increase of $441 million from 2022. The increase was driven primarily by higher net income adjusted for non-cash charges, partially offset by higher working capital requirements, including lower inflows from contract liabilities from engineering customer advanced payments and higher cash tax payments. Other charges were $40 million and $1,029 million, for the years ended December 31, 2023 and 2022, respectively. 2022 charges related primarily to the deconsolidation and impairment of Russian subsidiaries resulting from the ongoing war in Ukraine and related sanctions. Related Other charges cash outflows were $158 million and $127 million for the years ended December 31, 2023 and 2022, respectively.

As of December 31, 2023, Linde has approximately $418 million recorded in contract liabilities within the consolidated balance sheet related to suspended engineering projects in Russia.

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Investing

Net cash used for investing activities was $4,670 million in 2023 compared to $3,088 million in 2022 due to higher acquisitions, net of cash acquired and higher capital expenditures.

Capital expenditures in 2023 were $3,787 million, an increase of $614 million from 2022. Capital expenditures during 2023 related primarily to investments in new plant and production equipment for operating and growth requirements. Approximately 63% of the capital expenditures were in the Americas segment with 21% in the APAC segment and the rest primarily in the EMEA segment.

At December 31, 2023 , Linde's sale of gas backlog of large projects under construction was approximately $4.9 billion. This represents the total estimated capital cost of large plants under construction.

Acquisitions, net of cash acquired for 2023 were $953 million, an increase of $843 million from 2022, and related primarily to the acquisition of nexAir in the Americas (see Note 2 to the consolidated financial statements). Acquisitions, net of cash acquired for the year ended December 31, 2022 were $110 million related primarily to the Americas and EMEA segments.

Divestitures and asset sales, net of cash divested in 2023 were $70 million as compared to $195 million in 2022. Divestiture proceeds in 2022 include cash received from the sale of the company's GIST business of $184 million, net of cash divested of $75 million, for net proceeds of $109 million (see Note 2 to the consolidated financial statements).

Financing

Linde’s financing strategy is to secure long-term committed funding by issuing public notes and debentures and commercial paper backed by a long-term bank credit agreement. Linde’s international operations are funded through a combination of local borrowing and intercompany funding to minimize the total cost of funds and to manage and centralize currency exchange exposures. As deemed necessary, Linde manages its exposure to interest-rate changes through the use of financial derivatives (see Note 12 to the consolidated financial statements and Item 7A. Quantitative and Qualitative Disclosures About Market Risk).

Cash used for financing activities was $5,400 million in 2023 compared to $3,089 million in 2022. Cash provided by debt was $1,060 million in 2023 versus $4,475 million in 2022, driven primarily by lower inflows from commercial paper borrowings and lower net debt issuances in 2023. In February 2023, Linde repaid $500 million of 2.70% notes that became due. In April 2023, Linde repaid €650 million of 2.00% notes and £300 million of 5.875% notes that became due. In June 2023, Linde issued €500 million of 3.625% notes due in 2025, €750 million of 3.375% notes due in 2029 and €650 million of 3.625% notes due in 2034.

In February 2024, Linde issued €700 million of 3.00% notes due in 2028, €850 million of 3.20% notes due in 2031 and €700 million of 3.40% notes due in 2036.

Net purchases of ordinary shares were $3,925 million in 2023 versus $5,132 million in 2022. On October 23, 2023, the company's board of directors approved a new share repurchase program for up to $15 billion of Linde's ordinary shares. For additional information related to share repurchase programs, see Part II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Cash dividends increased to $2,482 million in 2023 versus $2,344 million in 2022 driven primarily by a 9% increase in dividends per share to $5.10 per share from $4.68 per share, partially offset by lower shares outstanding. Cash used for Noncontrolling interest transactions and other was $53 million for the year ended December 31, 2023 versus cash used of $88 million for the respective 2022 period.

Linde’s total net debt outstanding at December 31, 2023 was $14,709 million, $2,231 million higher than $12,478 million at December 31, 2022. The December 31, 2023 net debt balance includes $18,907 million in public securities, and $466 million representing primarily worldwide bank borrowings, net of $4,664 million of cash. Linde’s global effective borrowing rate was approximately 2.6% for 2023.

The company believes that it has sufficient operating flexibility, cash reserves, and funding sources to maintain adequate amounts of liquidity to meet its business needs around the world. At December 31, 2023, Linde's credit ratings as reported by Standard & Poor’s and Moody’s were A-1 and P-1 for short-term debt, respectively, and A and A2 for long-term debt, respectively. The company maintains a $5 billion and a $1.5 billion unsecured and undrawn revolving credit agreements with no associated financial covenants. No borrowings were outstanding under the credit agreements as of December 31, 2023. The company does not anticipate any limitations on its ability to access the debt capital markets and/or other external funding sources and remains committed to its strong ratings from Moody’s and Standard & Poor’s.

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Note 11 to the consolidated financial statements includes information with respect to the company’s debt activity, current debt position, debt covenants and the available credit facilities; and Note 12 includes information relating to derivative financial instruments. Linde's credit facilities are with major financial institutions and are non-cancelable until maturity. Therefore, the company believes the risk of the financial institutions being unable to make required loans under the credit facilities, if requested, to be low. Linde’s major bank credit and long-term debt agreements contain standard covenants. The company was in compliance with these covenants at December 31, 2023 and expects to remain in compliance for the foreseeable future.

OFF-BALANCE SHEET ARRANGEMENTS

As discussed in Note 17 to the consolidated financial statements, at December 31, 2023, Linde had undrawn outstanding letters of credit, bank guarantees and surety bonds entered into in connection with normal business operations and they are not reasonably likely to have a material impact on Linde’s consolidated financial condition, results of operations, or liquidity.

CRITICAL ACCOUNTING ESTIMATES

The policies discussed below are considered by management to be critical to understanding Linde’s financial statements and accompanying notes prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). Their application places significant importance on management’s judgment as a result of the need to make estimates of matters that are inherently uncertain. Linde’s financial position, results of operations and cash flows could be materially affected if actual results differ from estimates made. These policies are determined by management and have been reviewed by Linde’s Audit Committee.

Revenue Recognition

Long-Term Construction Contracts

The company designs and manufactures equipment for air separation and other varied gas production and processing plants manufactured specifically for end customers. Revenues for sale of equipment contracts are generally recognized over time as Linde has an enforceable right to payment for performance completed to date and performance does not create an asset with alternative use. For contracts recognized over time, revenue is recognized primarily using a cost incurred input method. Costs incurred to date relative to total estimated costs at completion are used to measure progress toward satisfying performance obligations. The result is applied to total expected revenue and results in financial statement recognition of revenue in addition to costs incurred to date. Any expected loss on a contract is recognized as an expense immediately. Contract modifications are typically accounted for as part of the existing contract and are recognized as a cumulative adjustment for the inception-to-date effect of such change. We assess performance as progress towards completion is achieved on specific projects, earnings will be impacted by changes to our forecast of revenues and costs on these projects.

The cost incurred input method places considerable importance on accurate estimates of the extent of progress towards completion and may involve estimates on the scope of deliveries and services required to fulfill the contractually defined obligations. The key source of estimation uncertainty is the total estimated costs at completion including material, labor and overhead costs and the resultant state of completion of the contracts. There are inherent uncertainties associated with the estimation process, including technical complexity, duration of construction cycle, potential cost inflation (whether equipment or manpower), and scope considerations all of which may affect the total estimation process. Changes in these estimates may lead to a significant impact on future financial statements.

Pension Benefits

Pension benefits represent financial obligations that will be ultimately settled in the future with employees who meet eligibility requirements. Because of the uncertainties involved in estimating the timing and amount of future payments, significant estimates are required to calculate pension expense and liabilities related to the company’s plans. The company utilizes the services of independent actuaries, whose models are used to facilitate these calculations.

Several key assumptions are used in actuarial models to calculate pension expense and liability amounts recorded in the financial statements. Management believes the three most significant variables in the models are the expected long-term rate of return on plan assets, the discount rate, and the expected rate of compensation increase. The actuarial models also use assumptions for various other factors, including long-term inflation rates, employee turnover, retirement age, and mortality. Linde management believes the assumptions used in the actuarial calculations are reasonable, reflect the company’s experience and expectations for the future and are within accepted practices in each of the respective

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geographic locations in which it operates. Actual results in any given year will often differ from actuarial assumptions because of economic and other factors. The sensitivities to each of the key assumptions presented below exclude the impact of special items that occurred during the year.

The weighted-average expected long-term rates of return on pension plan assets were 7.00% for U.S. plans and 5.64% for non-U.S. plans at December 31, 2023 (7.00% and 5.60%, respectively at December 31, 2022). The expected long-term rate of return on the U.S. and Non-U.S. plan assets is estimated based on the plans' investment strategy and asset allocation, historical capital market performance and, to a lesser extent, historical plan performance. A 0.50% change in these expected long-term rates of return, with all other assumptions held constant, would change Linde’s pension expense by approximately $44 million.

The company has consistently used a market-related value of assets rather than the fair value at the measurement date to determine annual pension expense. The market-related value recognizes investment gains or losses over a five-year period. As a result, changes in the fair value of assets from year to year are not immediately reflected in the company’s annual pension expense. Instead, annual pension expense in future periods will be impacted as deferred investment gains or losses are recognized in the market-related value of assets over the five-year period. The consolidated market-related value of assets was $9,180 million, or $952 million higher than the fair value of assets of $8,228 million at December 31, 2023. These net deferred investment lo of $952 million will be recognized in the calculation of the market-related value of assets ratably over the next four years and will impact future pension expense. Future actual investment gains or losses will impact the market-related value of assets and, therefore, will impact future annual pension expense in a similar manner.

Discount rates are used to calculate the present value of plan liabilities and pension costs and are determined annually by management. The company measures the service and interest cost components of pension and OPEB expense for significant U.S. and non-U.S. plans using the spot rate approach. U.S. plans that do not use the spot rate approach continue to determine discount rates by using a cash flow matching model provided by the company's independent actuaries. The model includes a portfolio of corporate bonds graded AA or better by at least half of the ratings agencies and matches the U.S. plans' projected cash flows to the calculated spot rates. Discount rates for the remaining Non-U.S. plans are based on market yields for high-quality fixed income investments representing the approximate duration of the pension liabilities on the measurement date. Refer to Note 16 to the consolidated financial statements for a summary of the discount rates used to calculate plan liabilities and benefit costs, and to the Retirement Benefits section of the Consolidated Results and Other Information section of this MD&A for a further discussion of 2023 benefit costs. A 0.50% reduction in discount rates, with all other variables held constant, would increase Linde’s pension expense by approximately $4 million whereas a 0.50% increase in discount rates would result in a decrease of $3 million. A 0.50% reduction in discount rates would increase the PBO by approximately $521 million whereas a 0.50% increase in discount rates would have a favorable impact to the PBO of approximately $477 million.

The weighted-average expected rate of compensation increase was 3.50% for U.S. plans and 2.58% for non-U.S. plans at December 31, 2023 (3.25% and 2.59%, respectively, at December 31, 2022). The estimated annual compensation increase is determined by management every year and is based on historical trends and market indices. A 0.50% change in the expected rate of compensation increase, with all other variables held constant, would change Linde’s pension expense by approximately $5 million and would impact the PBO by approximately $50 million.

Asset Impairments

Goodwill and Other Indefinite-Lived Intangibles Assets

At December 31, 2023, the company had goodwill of $26,751 million and $1,745 million of other indefinite-lived intangible assets. Goodwill represents the aggregate of the excess consideration paid for acquired businesses over the fair value of the net assets acquired. Indefinite-lived other intangibles relate to the Linde name.

The company performs a goodwill impairment test annually as of October 1 or more frequently if events or circumstances indicate that an impairment loss may have been incurred. The impairment test performed during the fourth quarter of 2023 indicated no impairment. At December 31, 2023, Linde’s enterprise value was approximately $213 billion (outstanding shares multiplied by the year-end stock price plus net debt, and without any control premium) while its total capital was approximately $56 billion.

The impairment test allows an entity to first assess qualitative factors to determine if it is more likely than not that the fair value of a reporting unit is less than carrying value. If it is determined that it is more likely than not that the fair value of a reporting unit is less than carrying value then the company will estimate and compare the fair value of its reporting units to their carrying value, including goodwill. Reporting units are determined based on one level below the operating segment level.

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Management believes that the quantitative and qualitative factors used to perform its annual goodwill impairment assessment are appropriate and reasonable. Although the 2023 assessment indicated that it is more likely than not that the fair value of each reporting unit exceeded its carrying value, changes in circumstances or conditions affecting this analysis could have a significant impact on the fair value determination, which could then result in a material impairment charge to the company's results of operations.

Other indefinite-lived intangible assets are evaluated for impairment on an annual basis or more frequently if events and circumstances indicate that an impairment loss may have been incurred, and no impairments were indicated.

See Notes 9 and 10 to the consolidated financial statements.

Long-Lived Assets

Long-lived assets, including property, plant and equipment and finite-lived other intangible assets, are tested for impairment whenever events or changes in circumstances indicate that the carrying amount of an individual asset or asset group may not be recoverable. For purposes of this test, asset groups are determined based upon the lowest level for which there are independent and identifiable cash flows. Based upon Linde's business model an asset group may be a single plant and related assets used to support on-site, merchant and packaged gas customers. Alternatively, the asset group may be a collection of distribution related assets (cylinders, distribution centers, and stores) or be a pipeline complex which includes multiple interdependent plants and related assets connected by pipelines within a geographic area used to support the same distribution methods. As a result of the Russia-Ukraine conflict, Linde deconsolidated its Russian gas and engineering business entities as of June 30, 2022. See Note 3 to the consolidated financial statements.

Income Taxes

At December 31, 2023, Linde had deferred tax assets of $1,292 million (net of valuation allowances of $176 million), and deferred tax liabilities of $6,815 million. At December 31, 2023, uncertain tax positions totaled $304 million (see Note 1 and Note 5 to the consolidated financial statements). Income tax expense was $1,814 million for the year ended December 31, 2023, or about 22.7% of pre-tax income (see Note 5 to the consolidated financial statements for additional information related to taxes).

In the preparation of consolidated financial statements, Linde estimates income taxes based on diverse legislative and regulatory structures that exist in various jurisdictions where the company conducts business. Deferred income tax assets and liabilities represent tax benefits or obligations that arise from temporary differences due to differing treatment of certain items for accounting and income tax purposes. Linde evaluates deferred tax assets each period to ensure that estimated future taxable income will be sufficient in character (e.g. capital gain versus ordinary income treatment), amount and timing to result in their recovery. A valuation allowance is established when management determines that it is more likely than not that a deferred tax asset will not be realized to reduce the assets to their realizable value. Considerable judgments are required in establishing deferred tax valuation allowances and in assessing exposures related to tax matters. As events and circumstances change, related reserves and valuation allowances are adjusted to income at that time. Linde’s tax returns are subject to audit and local taxing authorities could challenge the company’s tax positions. The company’s practice is to review tax filing positions by jurisdiction and to record provisions for uncertain income tax positions, including interest and penalties when applicable. Linde believes it records and/or discloses such potential tax liabilities as appropriate and has reasonably estimated its income tax liabilities and recoverable tax assets. If new information becomes available, adjustments are charged or credited against income at that time. Management does not anticipate that such adjustments would have a material adverse effect on the company’s consolidated financial position or liquidity; however, it is possible that the final outcomes could have a material impact on the company’s reported results of operations.

Contingencies

The company accrues liabilities for non-income tax contingencies when management believes that a loss is probable and the amounts can be reasonably estimated, while contingent gains are recognized only when realized or realizable. If new information becomes available or losses are sustained in excess of recorded amounts, adjustments are charged against income at that time. Management does not anticipate that in the aggregate such losses would have a material adverse effect on the company’s consolidated financial position or liquidity; however, it is possible that the final outcomes could have a material impact on the company’s reported results of operations.

Linde is subject to various claims, legal proceedings and government investigations that arise from time to time in the ordinary course of business. These actions are based upon alleged environmental, tax, antitrust and personal injury claims, among others (see Note 17 to the consolidated financial statements). Such contingencies are significant and the accounting requires considerable management judgments in analyzing each matter to assess the likely outcome and the need for

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establishing appropriate liabilities and providing adequate disclosures. Linde believes it records and/or discloses such contingencies as appropriate and has reasonably estimated its liabilities.

NEW ACCOUNTING STANDARDS

See Note 1 to the consolidated financial statements for information concerning new accounting standards and the impact of the implementation of these standards on the company’s financial statements.

FAIR VALUE MEASUREMENTS

Linde does not expect changes in the aggregate fair value of its financial assets and liabilities to have a material impact on the consolidated financial statements. See Note 13 to the consolidated financial statements.

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NON-GAAP FINANCIAL MEASURES

The following non-GAAP measures are intended to supplement investors’ understanding of the company’s financial information by providing measures which investors, financial analysts and management use to help evaluate the company’s financial leverage and operating performance. Special items which the company does not believe to be indicative of on-going business performance are excluded from these calculations so that investors can better evaluate and analyze historical and future business trends on a consistent basis. Definitions of these non-GAAP measures may not be comparable to similar definitions used by other companies and are not a substitute for similar GAAP measures.

The non-GAAP measures in the following reconciliations are presented in this MD&A.

Adjusted Amounts

(Dollar amounts in millions, except per share data)

Adjusted Operating Profit and Operating Margin

Reported operating profit $ 8,024 $ 5,369

Add: Other charges (a) 40 1,029

Add: Purchase accounting impacts - Linde AG (c) 1,006 1,506

Adjusted operating profit $ 9,070 $ 7,904

Reported percentage change 49 %

Adjusted percentage change 15 %

Reported operating margin 24.4 % 16.1 %

Adjusted operating margin 27.6 % 23.7 %

Adjusted Depreciation and amortization

Reported depreciation and amortization $ 3,816 $ 4,204

Less: Purchase accounting impacts - Linde AG (c) (991) (1,481)

Adjusted depreciation and amortization $ 2,825 $ 2,723

Adjusted Other Income (Expense) - net

Reported Other Income (Expense) - net $ (41) $ (62)

Add: Purchase accounting impacts - Linde AG (c) (15) (25)

Adjusted Other Income (Expense) - net $ (26) $ (37)

Adjusted Net Pension and OPEB Cost (Benefit), Excluding Service Cost

Add: Pension settlement charges (16) (6)

Adjusted Interest Expense - Net

Reported interest expense - net $ 200 $ 63

Add: Purchase accounting impacts - Linde AG (c) 16 35

Adjusted interest expense - net $ 216 $ 98

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Adjusted Income Taxes (a)

Add: Purchase accounting impacts - Linde AG (c) 232 374

Add: Pension settlement charges 3 1

Add: Other charges (a) 81 136

Adjusted Effective Tax Rate (a)

Reported income before income taxes and equity investments $ 7,988 $ 5,543

Add: Pension settlement charge 16 6

Add: Purchase accounting impacts - Linde AG (c) 990 1,471

Add: Other charges (a) 40 1,029

Adjusted income before income taxes and equity investments $ 9,034 $ 8,049

Reported effective tax rate 22.7% 25.9%

Adjusted effective tax rate 23.6% 24.2%

Income from Equity Investments

Reported income from equity investments $ 167 $ 172

Add: Purchase accounting impacts - Linde AG (c) 72 75

Total adjustments 72 75

Adjusted income from equity investments $ 239 $ 247

Adjusted Noncontrolling Interests

Reported noncontrolling interests $ (142) $ (134)

Add: Purchase accounting impacts - Linde AG (c) (12) (22)

Adjusted noncontrolling interests $ (154) $ (156)

Adjusted Net Income - Linde plc (b)

Add: Pension settlement charge 13 5

Add: Other charges (a) (41) 893

Add: Purchase accounting impacts - Linde AG (c) 818 1,150

Adjusted net income - Linde plc $ 6,989 $ 6,195

Adjusted Diluted EPS (b)

Add: Pension settlement charge 0.03 0.01

Add: Other charges (a) (0.08) 1.77

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Add: Purchase accounting impacts - Linde AG (c) 1.66 2.28

Reported percentage change 53 %

Adjusted percentage change 16 %

Adjusted EBITDA and % of Sales

Add: Noncontrolling interests 142 134

Add: Net pension and OPEB cost (benefit), excluding service cost (164) (237)

Add: Interest expense 200 63

Add: Depreciation and amortization 3,816 4,204

Add: Other charges (a) 40 1,029

Add: Purchase accounting impacts - Linde AG (c) 86 99

% of sales

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Net Debt and Adjusted Net Debt

Net debt is a financial liquidity measure used by investors, financial analysts and management to evaluate the ability of a company to repay its debt. Purchase accounting impacts have been excluded as they are non-cash and do not have an impact on liquidity.

(Millions of dollars)

Less: cash and cash equivalents (4,664) (5,436)

Less: purchase accounting impacts - Linde AG (7) (22)

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SUPPLEMENTAL GUARANTEE INFORMATION

On May 3, 2023, the company filed a Form S-3 Registration Statement with the SEC ("the Registration Statement").

Linde plc may offer debt securities, preferred shares, depositary shares and ordinary shares under the Registration Statement, and debt securities exchangeable for or convertible into preferred shares, ordinary shares or other debt securities. Debt securities of Linde plc may be guaranteed by Linde Inc and/or Linde GmbH. Linde plc may provide guarantees of debt securities offered by its wholly owned subsidiaries Linde Inc. or Linde Finance under the Registration Statement.

Linde Inc. is a wholly owned subsidiary of Linde plc. Linde Inc. may offer debt securities under the Registration Statement. Debt securities of Linde Inc. will be guaranteed by Linde plc, and such guarantees by Linde plc may be guaranteed by Linde GmbH. Linde Inc. may also provide (i) guarantees of debt securities offered by Linde plc under the Registration Statement and (ii) upstream guarantees of downstream guarantees provided by Linde plc of debt securities of Linde Finance offered under the Registration Statement.

Linde Finance B.V. is a wholly owned subsidiary of Linde plc. Linde Finance may offer debt securities under the Registration Statement. Linde plc will guarantee debt securities of Linde Finance offered under the Registration Statement. Linde GmbH and Linde Inc. may guarantee Linde plc’s obligations under its downstream guarantee.

Linde GmbH is a wholly owned subsidiary of Linde plc. Linde GmbH may provide (i) guarantees of debt securities offered by Linde plc under the Registration Statement and (ii) upstream guarantees of downstream guarantees provided by Linde plc of debt securities of Linde Inc. or Linde Finance offered under the Registration Statement.

In September 2019, Linde plc provided downstream guarantees of all pre-existing Linde Inc. and Linde Finance notes, and Linde GmbH and Linde Inc., respectively, provided upstream guarantees of Linde plc’s downstream guarantees.

Linde plc has filed a base prospectus with the Luxembourg Stock Exchange for a €10.0 billion debt issuance program, under which Linde plc may offer debt securities. Linde Inc. and Linde GmbH have provided to Linde plc upstream guarantees in relation to debt securities of Linde plc offered under the European debt program.

For further information about the guarantees of the debt securities registered under the Registration Statement (including the ranking of such guarantees, limitations on enforceability of such guarantees and the circumstances under which such guarantees may be released), see “Description of Debt Securities – Guarantees” and “Description of Debt Securities – Ranking” in the Registration Statement, which subsections are incorporated herein by reference.

The following tables present summarized financial information for Linde plc, Linde Inc., Linde GmbH and Linde Finance on a combined basis, after eliminating intercompany transactions and balances between them and excluding investments in and equity in earnings from non-guarantor subsidiaries.

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(Millions of dollars)

Transactions with non-guarantor subsidiaries 3,004 2,241

Balance Sheet Data (at period end)

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Linde is exposed to market risks relating to fluctuations in interest rates and currency exchange rates. The objective of financial risk management at Linde is to minimize the negative impact of interest rate and foreign exchange rate fluctuations on the company’s earnings, cash flows and equity.

To manage these risks, Linde uses various derivative financial instruments, including interest-rate swaps, treasury rate locks, currency swaps, forward contracts, and commodity contracts. Linde only uses commonly traded and non-leveraged instruments. These contracts are entered into primarily with major banking institutions thereby minimizing the risk of credit loss. Also, see Note 1 and Note 12 to the consolidated financial statements for a more complete description of Linde’s accounting policies and use of such instruments.

The following discussion presents the sensitivity of the market value, earnings and cash flows of Linde’s financial instruments to hypothetical changes in interest and exchange rates assuming these changes occurred at December 31, 2023. The range of changes chosen for these discussions reflects Linde’s view of changes which are reasonably possible over a one-year period. Market values represent the present values of projected future cash flows based on interest rate and exchange rate assumptions.

Interest Rate Risk

At December 31, 2023, Linde had debt totaling $19,373 million ($17,914 million at December 31, 2022). For fixed-rate instruments, interest rate changes affect the fair market value but do not impact earnings or cash flows. Conversely, for floating-rate instruments, interest rate changes generally do not affect the fair market value of the instrument but impact future earnings and cash flows, assuming that other factors are held constant. At December 31, 2023, including the impact of derivatives, Linde had fixed-rate debt of $14,345 million and floating-rate debt of $5,028 million, representing 74% and 26%, respectively, of total debt. At December 31, 2022, including the impact of derivatives, Linde had fixed-rate debt of $13,000 million and floating-rate debt of $4,914 million, representing 73% and 27%, respectively, of total debt.

Fixed Rate Debt

This sensitivity analysis assumes that, holding all other variables constant (such as foreign exchange rates, swaps and debt levels), a one hundred basis point increase in interest rates would decrease the unrealized fair market value of the fixed-rate debt portfolio by approximately $742 million ($666 million in 2022). A one hundred basis point increase in interest rates would result in an approximate $65 million increase to derivative assets recorded.

Variable Rate Debt

At December 31, 2023, the after-tax earnings and cash flows impact of a one hundred basis point increase in interest rates, including offsetting impact of derivatives, on the variable-rate debt portfolio would be approximately $50 million ($25 million in 2022).

Foreign Currency Risk

Linde’s exchange-rate exposures result primarily from its investments and ongoing operations in Latin America (primarily Brazil and Mexico), Europe (primarily Germany, Scandinavia, and the U.K.), Canada, Asia Pacific (primarily Australia and China) and other business transactions such as the procurement of equipment from foreign sources. Linde frequently utilizes currency contracts to hedge these exposures. At December 31, 2023, Linde had a notional amount outstanding of $5,651 million ($3,870 million at December 31, 2022) related to foreign exchange contracts. The majority of these were to hedge recorded balance sheet exposures, primarily intercompany loans denominated in non-functional currencies. See Note 12 to the consolidated financial statements.

Holding all other variables constant, if there were a 10% increase in foreign-currency exchange rates for the portfolio, the fair market value of foreign-currency contracts outstanding at December 31, 2023 would decrease by approximately $58 million and at December 31, 2022 would increase by approximately $83 million, which would be largely offset by an offsetting loss or gain on the foreign-currency fluctuation of the underlying exposure being hedged.

Holding all other variables constant, if there were a 10% increase in foreign-currency exchange rates on the external debt portfolio, the fair market value of foreign-currency denominated debt outstanding at December 31, 2023 would decrease by approximately $970 million and at December 31, 2022 would decrease by approximately $803 million, which would be largely offset by an offsetting loss or gain on the underlying exposure being hedged.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Page

Management’s Statement of Responsibility for Financial Statements 48

Management’s Report on Internal Control Over Financial Reporting 48

Report of Independent Registered Public Accounting Firm [PCAOB ID 238] 49

Audited Consolidated Financial Statements

Consolidated Balance Sheets as of December 31, 2023 and 2022 53

Notes to Consolidated Financial Statements

Note 1. Summary of Significant Accounting Policies 56

Note 2. Acquisitions and Divestitures 60

Note 3. Other Charges 62

Note 4. Leases 65

Note 5. Income Taxes 66

Note 6. Earnings Per Share – Linde plc Shareholders 71

Note 7. Supplemental Information 71

Note 8. Property, Plant and Equipment – Net 75

Note 9. Goodwill 75

Note 10. Other Intangible Assets 76

Note 12. Financial Instruments 80

Note 13. Fair Value Disclosures 82

Note 14. Equity and Noncontrolling Interests 83

Note 15. Share-Based Compensation 85

Note 16. Retirement Programs 87

Note 17. Commitments and Contingencies 95

Note 18. Segment Information 97

Note 19. Revenue Recognition 100

Note 20. Subsequent Events 102

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MANAGEMENT’S STATEMENT OF RESPONSIBILITY FOR FINANCIAL STATEMENTS

Linde’s consolidated financial statements are prepared by management, which is responsible for their fairness, integrity and objectivity. The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America applied on a consistent basis, except for accounting changes as disclosed, and include amounts that are estimates and judgments. All historical financial information in this annual report is consistent with the accompanying financial statements.

Linde maintains accounting systems, including internal accounting controls, monitored by a staff of internal auditors, that are designed to provide reasonable assurance of the reliability of financial records and the protection of assets. The concept of reasonable assurance is based on recognition that the cost of a system should not exceed the related benefits. The effectiveness of those systems depends primarily upon the careful selection of financial and other managers, clear delegation of authority and assignment of accountability, inculcation of high business ethics and conflict-of-interest standards, policies and procedures for coordinating the management of corporate resources, and the leadership and commitment of top management. In compliance with Section 404 of the Sarbanes-Oxley Act of 2002, Linde assessed its internal control over financial reporting and issued a report (see below).

The Audit Committee of the Board of Directors, which consists solely of non-employee directors, is responsible for overseeing the functioning of the accounting system and related controls and the preparation of annual financial statements. The Audit Committee periodically meets with management, internal auditors and the independent registered public accounting firm to review and evaluate their accounting, auditing and financial reporting activities and responsibilities, including management’s assessment of internal control over financial reporting. The independent registered public accounting firm and internal auditors have full and free access to the Audit Committee and meet with the committee, with and without management present.

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Linde’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of management, including the company’s principal executive officer and principal financial officer, the company conducted an evaluation of the effectiveness of its internal control over financial reporting based on the framework in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (often referred to as COSO). Based on this evaluation, management concluded that the company’s internal control over financial reporting was effective as of December 31, 2023.

PricewaterhouseCoopers LLP, an independent registered public accounting firm, has audited and issued their opinion on the effectiveness of the company’s internal control over financial reporting as of December 31, 2023 as stated in their report.

/s/ SANJIV LAMBA /s/ KELCEY E. HOYT

Sanjiv LambaChief Executive Officer Kelcey E. HoytChief Accounting Officer

/s/ MATTHEW J. WHITE

Matthew J. WhiteChief Financial Officer February 28, 2024

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Linde plc

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Linde plc and its subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of income, of comprehensive income, of equity and of cash flows for each of the three years in the period ended December 31, 2023, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue Recognition - Estimated Costs at Completion

As described in Note 19 to the consolidated financial statements, $2,160 million of the Company’s total revenues for the year ended December 31, 2023 was generated from the sale of equipment contracts. Sales of equipment contracts are generally comprised of a single performance obligation. Revenue from the sale of equipment is generally recognized over time as the Company has an enforceable right to payment for performance completed to date and performance does not create an asset with alternative use. For contracts recognized over time, revenue is recognized primarily using a cost incurred input method. Costs incurred to date relative to total estimated costs at completion are used to measure progress toward satisfying performance obligations. Costs incurred include material, labor, and overhead costs and represent work contributing and proportionate to the transfer of control to the customer.

The principal considerations for our determination that performing procedures relating to revenue recognition - estimated costs at completion is a critical audit matter are (i) the significant judgment by management when developing the estimated costs at completion for the sale of equipment contracts; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating audit evidence related to the estimated costs at completion and management’s significant assumptions related to the total estimated material and labor costs; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the revenue recognition process, including controls over developing the estimated costs at completion for the sale of equipment contracts. These procedures also included, among others, evaluating and testing management’s process for developing the estimated costs at completion for the sale of equipment contracts, which included evaluating the reasonableness of management’s significant assumptions related to the total estimated material and labor costs. Evaluating the reasonableness of management’s significant assumptions involved evaluating management’s ability to reasonably estimate costs at completion for the sale of equipment contracts on a sample basis by (i) performing a comparison of the originally estimated and actual costs incurred on similar completed equipment contracts, and (ii) evaluating the timely identification of circumstances that may warrant a modification to estimated costs at completion, including actual costs in excess of estimates. Professionals with specialized skill and knowledge were used to assist in evaluating the reasonableness of management’s estimates and significant assumptions related to the total estimated material and labor costs.

/s/ PricewaterhouseCoopers LLP

Stamford, Connecticut

February 28, 2024

We have served as the Company’s or its predecessor’s auditor since 1992.

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CONSOLIDATED STATEMENTS OF INCOME

LINDE PLC AND SUBSIDIARIES

(Dollar amounts in millions, except per share data)

Cost of sales, exclusive of depreciation and amortization 17,492 19,450 17,543

Other income (expenses) – net (41) (62) (26)

Net pension and OPEB cost (benefit), excluding service cost (164) (237) (192)

Income Before Income Taxes and Equity Investments 7,988 5,543 5,099

Income From Continuing Operations Before Equity Investments 6,174 4,109 3,837

Income from discontinued operations, net of tax — — 5

Net Income (Including Noncontrolling Interests) 6,341 4,281 3,961

Less: noncontrolling interests from continuing operations (142) (134) (135)

Net Income – Linde plc

Income from discontinued operations $ — $ — $ 5

Per Share Data – Linde plc Shareholders

Basic earnings per share from continuing operations $ 12.70 $ 8.30 $ 7.39

Basic earnings per share from discontinued operations — — 0.01

Diluted earnings per share from continuing operations $ 12.59 $ 8.23 $ 7.32

Diluted earnings per share from discontinued operations — — 0.01

Weighted Average Shares Outstanding (000’s):

The accompanying Notes are an integral part of these financial statements.

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

LINDE PLC AND SUBSIDIARIES

(Dollar amounts in millions)

NET INCOME (INCLUDING NONCONTROLLING INTERESTS) $ 6,341 $ 4,281 $ 3,961

OTHER COMPREHENSIVE INCOME (LOSS)

Translation adjustments:

Foreign currency translation adjustments 399 (1,725) (1,116)

Reclassifications to net income — (110) (52)

Income taxes 1 — (7)

Funded status - retirement obligations (Note 16):

Reclassifications to net income (14) 80 175

Funded status - retirement obligations (380) 1,070 746

Derivative instruments (Note 12):

Current year unrealized gain (loss) (80) 107 140

Reclassifications to net income 13 (129) (49)

Derivative instruments (55) (13) 71

TOTAL OTHER COMPREHENSIVE INCOME (LOSS) (35) (778) (358)

COMPREHENSIVE INCOME (INCLUDING NONCONTROLLING INTERESTS) 6,306 3,503 3,603

Less: noncontrolling interests (130) (90) (135)

The accompanying Notes are an integral part of these financial statements.

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CONSOLIDATED BALANCE SHEETS

LINDE PLC AND SUBSIDIARIES

(Dollar amounts in millions)

Assets

Cash and cash equivalents $ 4,664 $ 5,436

Prepaid and other current assets 927 950

Liabilities and Equity

Current portion of long-term debt 1,263 1,599

Commitments and contingencies (Note 17)

Redeemable noncontrolling interests 13 13

Linde plc Shareholders’ Equity:

Accumulated other comprehensive income (loss) (5,805) (5,782)

The accompanying Notes are an integral part of these financial statements.

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CONSOLIDATED STATEMENTS OF CASH FLOWS

LINDE PLC AND SUBSIDIARIES

(Millions of dollars)

Increase (Decrease) in Cash and Cash Equivalents

Operations

Add: Noncontrolling interests from continuing operations 142 134 135

Other charges, net of payments (118) 902 98

Non-cash charges and other 43 (49) (19)

Working capital

Contract assets and liabilities, net (168) 310 1,307

Prepaid and other current assets 66 (157) 76

Pension contributions (46) (51) (42)

Long-term assets, liabilities and other (305) 163 75

Investing

Acquisitions, net of cash acquired (953) (110) (88)

Divestitures and asset sales, net of cash divested 70 195 167