What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-02-28 compared with 2023-02-28 · 244 added, 215 removed, 1519 unchanged (23% of the section changed)

7 unchanged sentences

Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2023, 2022 and 2021

Consolidated Balance Sheets as as of December 31, 202 2 and 20 21

Consolidated Balance Sheets as of December 31, 2023 and 2022

Consolidated Statements of Cash Flows for the Years Ended December 31, 2023, 2022 and 2021

2 unchanged sentences

Summary of Significant Accounting Policies

Acquisition and Divestitures

Russia-Ukraine Conflict and Other Charges

Acquisition s and Divestitures

Other Charges

Earnings Per Share – Linde plc Shareholders

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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/ K ELCEY E .

/s/ S ANJIV L AMBA

/s/ K ELCEY E .

Chief Executive Officer Kelcey E.

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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.

Sale of equipment contracts are generally comprised of a single performance obligation.

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.

23 unchanged sentences

Research and development 146 143 143

Russia-Ukraine conflict and other charges 1,029 273 506

Other charges 40 1,029 273

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

2 unchanged sentences

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

Income From Continuing Operations Before Income Taxes and Equity Investments 5,543 5,099 3,384

Income taxes on continuing operations 1,434 1,262 847

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

Income taxes 1,814 1,434 1,262

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

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Linde plc Shareholders’ Equity:

Ordinary shares (€ 0.001 par value, authorized 1,750,000,000 shares, 2022 and 2021 issued:

Ordinary shares (€ 0.001 par value, authorized 1,750,000,000 shares, 2023 issued:

490,766,972 ordinary shares;

552,012,862 ordinary shares)

Additional paid-in capital 39,812 40,005

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Adjustments to reconcile net income to net cash provided by operating activities:

Russia-Ukraine conflict and other charges, net of payments 902 98 258

Other charges, net of payments ( 118 ) 902 98

Depreciation and amortization 3,816 4,204 4,635

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Dividends and other capital reductions — ( 118 ) ( 118 )

Additions (Reductions) - (Note 14) — ( 193 ) ( 193 )

Redemption value adjustments 17 17 17

Additions (Reductions) — ( 876 ) ( 876 )

Dividends ($ 4.24 per ordinary share)

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Dividends and other capital reductions — ( 113 ) ( 113 )

Additions (Reductions) - (Note 14) — ( 56 ) ( 56 )

Dividends ($ 4.68 per ordinary share)

Additions (Reductions) ( 12 ) ( 12 ) ( 1 ) ( 13 )

Dividends ($ 5.10 per common share)

( 2,482 ) ( 2,482 ) ( 2,482 )

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Share-based compensation 141 141 141

Intercompany reorganization (Note 14) ( 61,246 ) ( 15,300 ) ( 61,246 ) 15,300 —

Balance, December 31, 2023 490,767 $ 1 $ 39,812 $ 8,845 $ ( 5,805 ) 8,322 $ ( 3,133 ) $ 39,720 $ 1,362 $ 41,082

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Linde’s principal executive offices are located at Forge, 43 Church Street West, Woking, Surrey GU21 6HT, United Kingdom and 10 Riverview Drive, Danbury, Connecticut, United States 06810.

Linde trades on the New York Stock Exchange and on the Frankfurt Stock Exchange under the symbol LIN.

On January 18, 2023, shareholders approved the company’s proposal for an intercompany reorganization that will result in the delisting of its ordinary shares from the Frankfurt Stock Exchange.

Following the completion of legal and regulatory approvals, Linde anticipates that the intercompany reorganization and delisting process will be completed, and its ordinary shares will be delisted from the Frankfurt Stock Exchange, on or about March 1, 2023.

In connection with the closing of the intercompany reorganization, Linde shareholders will automatically receive one share of the new holding company, to be listed on the New York Stock Exchange in exchange for each share of Linde plc they own.

The new holding company will also be named “Linde plc” and will trade under the existing ticker LIN.

Linde trades on the Nasdaq under the symbol LIN.

On January 18, 2023, shareholders approved the company’s proposal for an intercompany reorganization that resulted in the delisting of its ordinary shares from the Frankfurt Stock Exchange, on March 1, 2023, after the completion of legal and regulatory approvals.

In connection with the closing of the intercompany reorganization on March 1, 2023, Linde shareholders automatically received one share of the new holding company in exchange for each share of Linde plc that was previously owned.

The new holding company is also named “Linde plc” and trades under the existing ticker LIN.

Principles of Consolidation – The consolidated financial statements were prepared in conformity with accounting principles generally accepted in the United States of America ("U.S.

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Expenditures for additions and improvements that extend the lives or increase the capacity of plant assets are also capitalized.

Depreciation is calculated on the straight-line method based on the estimated useful lives of the assets, which

range from 3 years to 40 years (see Note 8).

Depreciation is calculated on the straight-line method based on the estimated useful lives of the assets, which range from 3 years to 40 years (see Note 8).

Linde uses accelerated depreciation methods for tax purposes where appropriate.

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The changes in fair value of derivatives that are designated as cash-flow hedges are deferred in accumulated other comprehensive income (loss) and are reclassified to earnings as the underlying hedged transaction affects earnings.

Provided the hedge remains highly effective, any ineffectiveness is deferred in accumulated other comprehensive income (loss) and are reclassified to earnings as the underlying hedged transaction affects earnings.

Provided the hedge remains highly effective, any ineffectiveness is deferred in accumulated other comprehensive income (loss) and is reclassified to earnings as the underlying hedged transaction affects earnings.

Hedges of net investments in foreign subsidiaries are recognized in the cumulative translation adjustment component of accumulated other comprehensive income (loss) on the consolidated balance sheets to offset translation gains and losses associated with the hedged net investment.

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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.

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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Accounting Standards Implemented in 2023

There were no new accounting pronouncements that would materially impact the 2022 financial statements.

There were no new accounting pronouncements implemented in 2023 that would materially impact the 2023 financial statements.

Accounting Standards to be Implemented

Improvements to Reportable Segments Disclosures - In November 2023, the FASB issued guidance requiring enhanced disclosure related to reportable segments.

The new standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

adoption of this standard will only impact disclosures within the company's consolidated financial statements and the company is evaluating the impact this guidance will have on those disclosures.

Improvements to Income Tax Disclosures - In December 2023, the FASB issued guidance requiring enhanced disclosure related to income taxes.

The standard requires additional or modified disclosures related to the income tax rate reconciliation, disaggregation of income taxes paid, and several other disclosures.

The new standard is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

The adoption of this standard will only impact disclosures within the company's consolidated financial statements and the company is evaluating the impact this guidance will have on those disclosures.

Acquisitions and Divestitures

Acquisitions were $ 953 million, $ 110 million and $ 88 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Acquisitions in 2022 and 2021 primarily related to the Americas and EMEA.

Acquisitions in 2023 primarily related to the Americas.

Acquisitions in 2022 and 2021 primarily related to the Americas and EMEA.

Acquisition of nexAir, LLC

On January 5, 2023, Linde completed the acquisition of nexAir, LLC, a gas distribution and welding supply company in the United States, in order to further expand the company’s geographic footprint into different regions.

Prior to completion of the acquisition, Linde held a 23 % interest in nexAir, LLC.

Pursuant to a signed purchase agreement between Linde and nexAir, LLC, Linde purchased the remaining 77 % ownership interest in an all cash transaction with a total purchase price of $ 866 million, or $ 811 million net of cash acquired.

The fair value of Linde’s equity interest in nexAir, LLC immediately preceding the acquisition date was $ 183 million, which resulted in a gain on remeasurement of the company’s previously held equity interest which was not material;

this gain is recorded within “Other income (expenses) – net” on the consolidated statements of income.

Final Allocation of Purchase Price

The acquisition of nexAir, LLC was accounted for as a business combination.

Following the acquisition date, 100 % of nexAir, LLC's results were consolidated in the Americas business segment.

Linde's twelve months ended December 31, 2023 consolidated income statement includes sales of $ 408 million related to nexAir, LLC.

Pro forma results for 2022 have not been included as the impact of the acquisition is not material to the consolidated statements of income.

The company estimated the preliminary fair value of net assets acquired based on information currently available at the time of the acquisition and has continued to adjust those estimates as additional information has become available.

Measurement period adjustments totaled approximately $ 27 million, and related to working capital adjustments and deferred taxes.

The following table summarizes the fair value of identifiable assets acquired and liabilities assumed in the acquisition of nexAir, LLC as of the acquisition date.

(Millions of dollars) January 5, 2023

Cash and cash equivalents $ 55

Other current assets - net 49

Property, plant and equipment, net 241

Other intangible assets - net 245

Other long-term liabilities - net ( 1 )

Deferred taxes ( 25 )

Total identifiable net assets $ 564

Goodwill $ 485

Fair value of previously held equity interest $ 183

Total purchase price $ 866

nexAir, LLC’s assets and liabilities were measured at estimated fair values at January 5, 2023.

Estimates of fair value represent management's best estimate of assumptions about future events and uncertainties, including significant judgments related to future cash flows (sales, costs, customer attrition rates, and contributory asset charges), discount rates, competitive trends, and market comparables.

Inputs used were generally obtained from historical data supplemented by current and anticipated market conditions and growth rates.

The fair value of the previously held equity interest was based upon a purchase price valuation (excluding debt) multiplied by the company’s previously held ownership interest adjusted by a discount for lack of marketability.

The fair value of property, plant & equipment, net is based on assumptions that market participants would use in pricing an asset, based on the most advantageous market for the asset (i.e., its highest and best use).

The cost approach, adjusted for the age and condition of the property, plant and equipment, was used to estimate fair value.

Identifiable intangible assets primarily consist of customer relationships of approximately $ 245 million that will be amortized over their estimated useful life of 20 years.

The fair value of the customer relationships intangible asset was valued using a multi-period excess earnings method, a form of the income approach, which incorporates the estimated future cash flows to be generated from nexAir, LLC's existing customer base.

There were no indefinite-lived intangible assets identified in conjunction with the acquisition.

The excess of the consideration for the acquisition over the preliminary fair value of net assets acquired was recorded as goodwill.

The acquisition resulted in $ 485 million of goodwill, the majority of which is expected to be deductible for tax purposes.

The goodwill balance is primarily attributable to the assembled workforce and operating synergies expected to result from the acquisition.

The goodwill recorded as a result of the acquisition was allocated to the Americas reportable segment, which represents the reportable segment anticipated to experience operating synergies as a result of the acquisition.

Sale of GIST business

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Proceeds from the sale were $ 184 million, net of cash divested of $ 75 million, for net proceeds of $ 109 million.

The sale resulted in a loss of $ 21 million (benefit of $ 3 million, after tax), recorded within the Russia-Ukraine conflict and other charges in the consolidated statement of income (see Note 3).

Deconsolidation of Joint Venture in APAC

Effective January 1, 2021, Linde deconsolidated a joint venture with operations in APAC, due to the expiration of certain contractual rights that the parties mutually agreed not to renew.

From the effective date, the joint venture is reflected as an equity investment on Linde's consolidated balance sheet with the corresponding results reflected in income from equity investments on the consolidated statement of income.

The fair value of the joint venture at January 1, 2021 was determined using a discounted cash flow model and approximated the carrying amount of its net assets.

The net carrying value of $ 852 million was mainly comprised of assets of approximately $ 1.9 billion (primarily Other intangibles and Property plant and equipment - net), net of liabilities of approximately $ 1.0 billion.

Upon deconsolidation an equity investment was recorded representing Linde's share of the joint venture's net assets.

The deconsolidation resulted in a gain of $ 52 million recorded within 2021 charges (see Note 3) related to the release of the CTA balance recorded within AOCI.

The company did not receive any consideration, cash or otherwise, as part of the deconsolidation.

The joint venture contributed sales of approximately $ 600 million in 2020.

Russia-Ukraine Conflict and Other Charges

Russia-Ukraine conflict and other charges were $ 1 billion ($ 896 million, after tax and noncontrolling interests) for the year ended December 31, 2022, largely attributable to the Russia-Ukraine conflict.

The sale resulted in a loss of $ 21 million (benefit of $ 3 million, after tax), recorded within the other charges in the consolidated statement of income (see Note 3).

Other Charges

Other charges were $ 40 million for the year ended December 31, 2023.

Costs primarily related to severance in the Engineering segment and expenses incurred due to the intercompany reorganization for the year ended December 31, 2023.

Other charges for 2023 included an income tax benefit of $ 81 million primarily comprised of a benefit of $ 124 million related to the resolution of an income tax audit, partially offset by an accrual of $ 85 million for the potential settlement of an international income tax matter, both recorded in the first quarter.

Other charges were $ 1 billion ($ 896 million, after tax and noncontrolling interests) for the year ended December 31, 2022, largely attributable to the Russia-Ukraine conflict.

Russia-Ukraine Conflict

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As such, Linde deconsolidated its Russian gas and engineering business entities as of June 30, 2022 .

The deconsolidation of the company's Russian gas and engineering business entities resulted in a loss of $ 787 million ($ 730 million after tax) during the second quarter.

The deconsolidation of the company's Russian gas and engineering business entities resulted in a loss of $ 787 million ($ 730 million after tax).

The fair value of Linde’s Russian subsidiaries was determined using a probability weighted discounted cash flow model, which resulted in the recognition of a $ 407 million loss on deconsolidation when compared to the carrying value of the entities.

This loss is recorded within Russia-Ukraine conflict and other charges in the consolidated statements of income.

This loss is recorded within Other charges in the consolidated statements of income.

Upon deconsolidation an investment was recorded, which represents the fair value of net assets.

The company did not receive any consideration, cash or otherwise, as part of the deconsolidation.

Linde will maintain its interest in its Russian subsidiaries and will continue to comply with sanctions and government restrictions as it continues to develop divestiture options.

Linde will maintain its interest in its Russian subsidiaries and will continue to comply with sanctions and government restrictions.

The investment will be monitored for impairment in future periods.

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Total $ 787 $ 103 $ 890 $ 139 $ 1,029

Cost reduction programs and other charges were $ 273 million ($ 279 million after tax) for the year ended December 31, 2021.

Other charges were $ 273 million ($ 279 million after tax) for the year ended December 31, 2021.

Total cost reduction program related charges were $ 338 million ($ 253 million after tax), for the year ended December 31, 2021.

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The 2021 pre-tax benefit was primarily due to a $ 52 million gain triggered by a joint venture deconsolidation in the APAC segment.

Year Ended December 31, 2021

(millions of dollars) Severance costs Other cost reduction charges Total cost reduction program related charges Merger related and other charges Total

Americas $ 4 $ 2 $ 6 $ ( 6 ) $ —

EMEA 204 33 237 1 238

APAC 16 12 28 ( 50 ) ( 22 )

Engineering 20 6 26 — 26

Other 15 26 41 ( 10 ) 31

Total $ 259 $ 79 $ 338 $ ( 65 ) $ 273

Cost reduction programs and other charges were $ 506 million for the year ended December 31, 2020, ($ 372 million after tax).

Total cost reduction program related charges were $ 391 million ($ 277 million after tax) for the year ended December 31, 2020.

These expenses consisted primarily of severance costs of $ 298 million and other charges of $ 93 million for the year ended December 31, 2020.

Other charges related to the execution of the company's synergistic actions including location consolidations and business rationalization projects, process harmonization, and associated non-recurring costs.

Merger-related and other charges were $ 115 million ($ 95 million, after tax).

for the year ended December 31, 2020.

The following table provides a summary of the pre-tax charges by reportable segment for the year ended December 31, 2021:

Year Ended December 31, 2021

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Cash Requirements

The total cash requirements of the Russia-Ukraine conflict and other charges incurred for the year ended December 31, 2022 are expected to be immaterial.

Remaining cash requirements are expected to be paid through 2023.

Russia-Ukraine conflict and other charges, net of payments in the consolidated statements of cash flows for the twelve months ended December 31, 2022 and 2021 also reflect the impact of cash payments of liabilities, including merger-related tax liabilities, accrued as of December 31, 2021 and 2020, respectively.

The following table summarizes the activities related to the Russia-Ukraine conflict and the company's cost reduction programs and other charges during 2021 and 2022:

The total cash requirements of the other charges incurred for the year ended December 31, 2023 are expected to be immaterial.

Remaining cash requirements are expected to be paid primarily through 2024.

Other charges, net of payments in the consolidated statements of cash flows for the twelve months ended December 31, 2023 and 2022 also reflect the impact of cash payments of liabilities, including merger-related tax liabilities, accrued as of December 31, 2022 and 2021, respectively.

The following table summarizes the activities related to the company's cost reduction programs and other charges during 2022 and 2023:

(millions of dollars) Total Russia charges Severance costs Other cost reduction charges Total cost reduction program related charges Merger related and other charges Total

Balance, December 31, 2021 $ — $ 384 $ 38 $ 422 $ 31 $ 453

2021 Cost Reduction Programs and Other Charges — 259 79 338 ( 65 ) 273

2022 Russia-Ukraine conflict and other charges 890 41 24 65 74 1,029

Cash payments — ( 122 ) ( 24 ) ( 146 ) 19 ( 127 )

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Balance, December 31, 2022 $ — $ 281 $ 27 $ 308 $ 12 $ 320

2022 Russia-Ukraine conflict and other charges 890 41 24 65 74 1,029

2023 Other Charges — 26 — 26 14 40

Cash payments — ( 134 ) ( 1 ) ( 135 ) ( 23 ) ( 158 )

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Linde determines whether a contract is or contains a lease at contract inception.

Total lease and rental expenses related to operating lease right of use assets for the twelve months ended December 31, 2022 and 2021 was $ 284 million and $ 317 million, respectively.

Operating leases costs are included in selling, general and administrative expenses and cost of sales, exclusive of depreciation and amortization.

Total lease and rental expenses related to operating lease right of use assets for the twelve months ended December 31, 2023 and 2022 was $ 284 million.

Operating lease costs are included in selling, general and administrative expenses and cost of sales, exclusive of depreciation and amortization.

The related assets and obligations are included in other long-term assets and other current liabilities and other long-term liabilities, respectively.

Total lease and rental expenses related to finance lease right of use assets for the twelve months ended December 31, 2022 and 2021 was $ 57 million and $ 51 million, respectively, and the costs are included in depreciation and amortization and interest.

Total lease and rental expenses related to finance lease right of use assets for the twelve months ended December 31, 2023 and 2022 were $ 58 million and $ 57 million, respectively, and the costs are included in depreciation and amortization and interest.

Related assets and obligations are included in other long-term assets and other current liabilities and other long-term liabilities, respectively .

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Total income taxes $ 1,814 $ 1,434 $ 1,262

Tax Cuts and Jobs Act (Tax Act) 2018

As of December 31, 2022 and 2021, the tax payable related to the deemed repatriation tax is $ 178 million and $ 178 million, respectively, of which $ 139 million and $ 178 million is classified as other long-term liabilities on the consolidated balance sheet (See Note 7), respectively.

The company is required to fund the balance in annual installments through 2025.

Effective Tax Rate Reconciliation

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State and local taxes – net of federal benefit 105 1.3 % 84 1.5 % 83 1.6 %

tax credits and deductions (a) ( 16 ) ( 0.3 ) % ( 23 ) ( 0.5 ) % ( 8 ) ( 0.2 ) %

tax differentials (b) 176 3.2 % 219 4.3 % 167 4.9 %

Tax on Non-U.S.

activities (a) 169 2.1 % 176 3.2 % 219 4.3 %

Share-Based compensation ( 66 ) ( 0.8 ) % ( 41 ) ( 0.7 ) % ( 56 ) ( 1.1 ) %

Russia/Ukraine Charges — — % 108 1.9 % — — %

Other – net (c) ( 41 ) ( 0.7 ) % ( 32 ) ( 0.6 ) % 9 0.3 %

Other (b) ( 71 ) ( 0.9 ) % ( 57 ) ( 1.0 ) % ( 55 ) ( 1.1 ) %

Provision for income taxes $ 1,814 22.7 % $ 1,434 25.9 % $ 1,262 24.7 %

________________________

tax credits and deductions relate to non-U.S.

derived intangible income and the research and experimentation tax credit in 2022, 2021 and 2020.

(b) Primarily related to differences between the U.S.

tax rate and the statutory tax rate in the countries where the company operates.

Excluding 2021, which included an $ 83 million deferred income tax charge related to a tax rate increase in the U.K, other permanent items and tax rate changes were not significant.

(c) Other - net includes net tax benefits related to the settlement of tax audits of $ 71 million in 2022 , and $ 47 million in 2021.

(a) Primarily related to differences between the U.S.

tax rate and the statutory tax rate in the countries in which the company operates.

It also includes the U.S.

tax impact of the non-U.S.

activities and other non-U.S.

permanent items and tax rate changes.

Excluding 2021, which included an $ 83 million deferred income tax charge related to a tax rate increase in the U.K., these other items were not material.

(b) Includes net tax benefits related to tax audit settlements of $ 54 million in 2023, of $ 71 million in 2022, and $ 47 million in 2021.

Net Deferred Tax Liabilities

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Deferred tax liabilities

Fixed assets (a) $ 2,775 $ 3,177

Fixed assets $ 2,686 $ 2,775

Goodwill 215 173

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Subsidiary/equity investments 586 545

Other (b) 471 634

Other (a) 456 471

$ 6,815 $ 6,903

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Carryforwards $ 285 $ 289

Benefit plans and related (c)(d) 165 607

Benefit plans and related (b)(c) 243 165

Inventory 82 68

Accruals and other (e) 1,001 1,042

Accruals and other (d) 858 1,001

$ 1,468 $ 1,523

Valuation allowances (f) ( 276 ) ( 235 )

Valuation allowances (e) ( 176 ) ( 276 )

$ 1,292 $ 1,247

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________________________

(a) Excludes $ 39 million and $ 19 million of fixed assets in 2022 related to the deconsolidation of Russia and the sale of GIST, respectively (see Notes 3 and 2).

(b) Includes $ 206 million in 2022 and $ 236 million in 2021 related to right-of-use lease assets.

(c) Includes deferred tax liabilities of $ 54 million and deferred tax assets of $ 305 million in 2022 and 2021, respectively, related to pension / OPEB funded status (see Notes 7 and 16).

(d) The amounts are net of non-US deferred tax liabilities of $ 315 million in 2022 and $ 71 million in 2021.

(e) Includes $ 212 million in 2022 and $ 246 million in 2021 related to lease liabilities and $ 25 million and $ 42 million in 2022 and 2021, respectively, related to research and development costs.

(f) Summary of changes in valuation allowances relating to deferred tax assets follows (millions of dollars):

(a) Includes $ 221 million in 2023 and $ 206 million in 2022 related to right-of-use lease assets.

(b) Includes deferred tax asset of $ 60 million and deferred tax liability of $ 54 million in 2023 and 2022, respectively, related to pension / OPEB funded status (see Notes 7 and 16).

(d) Includes $ 228 million in 2023 and $ 212 million in 2022 related to lease liabilities.

(e) Summary of changes in valuation allowances relating to deferred tax assets follows (millions of dollars):

2023 2022 2021

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These deferred tax assets include $ 235 million relating to NOLs of which $ 82 million expire within 5 years, $ 24 million expire after 5 years and $ 129 million have no expiration.

deferred tax assets also include $ 74 million related to credits of which $ 5 million expire within 5 years, $ 66 million expire after 5 years, and $ 3 million have no expiration.

The valuation allowances of $ 276 million primarily relate to NOLs and foreign currency loss related to the revaluation of deferred tax liabilities associated with future repatriations.

The deferred tax assets also include $ 50 million related to credits of which $ 3 million expire within 5 years, $ 40 million expire after 5 years, and $ 7 million have no expiration.

The valuation allowances of $ 176 million primarily relate to NOLs.

Management has determined, based on financial projections and available tax strategies, that it is unlikely that the benefit of these losses will be realized.

If events or circumstances change, valuation allowances are adjusted at that time resulting in an income tax benefit or charge.

The company has $ 545 million of non-U.S.

income taxes accrued related to its investments in subsidiaries and equity investments as of December 31, 2022.

The company has $ 586 million of non-U.S income and withholding taxes accrued related to its investment in non-U.S.

subsidiaries and equity investments.

A provision has not been made for any additional non-U.S.

income tax at December 31, 2022 on approximately $ 33 billion related to its investments in subsidiaries because the company intends to remain indefinitely reinvested.

While the $ 33 billion could become subject to additional non-U.S.

income tax if there is a sale of a subsidiary, or earnings are remitted as dividends, it is not practicable to estimate the unrecognized deferred tax liability.

income or withholding taxes at December 31, 2023 on approximately $ 4 billion of unremitted non-U.S.

earnings on which the company intends to remain indefinitely reinvested or on other outside basis differences in its investments unrelated to unremitted earnings.

A determination of these deferred taxes related to these amounts is not practicable.

Uncertain Tax Positions

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The company has unrecognized income tax benefits totaling $ 304 million, $ 325 million and $ 387 million as of December 31, 2023, 2022 and 2021, respectively.

If recognized, essentially all of the unrecognized tax benefits and related interest and penalties would be recorded as a benefit to income tax expense on the consolidated statements of income.

If recognized, the majority of the unrecognized tax benefits and related interest and penalties would be recorded as a benefit to income tax expense on the consolidated statements of income.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

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Reductions for settlements with taxing authorities (a)(b) ( 1 ) ( 23 ) ( 60 )

Foreign currency translation and other ( 20 ) ( 24 ) 7

Other (c) ( 7 ) ( 20 ) ( 24 )

Unrecognized income tax benefits, December 31 $ 304 $ 325 $ 387

________________________

(a) 2022 amounts are primarily related to the settlement of tax audits.

(a) 2023 and 2022 amounts are primarily related to the settlement of tax audits.

(b) Settlements are uncertain tax positions that were effectively settled with the taxing authorities, including positions where the company has agreed to amend its tax returns to eliminate the uncertainty.

The company classifies interest income and expense related to income taxes as tax expense in the consolidated statements of income.

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Asset divestiture gains (losses) – net 6 ( 9 ) ( 31 )

Other – net ( 40 ) 26 40

Other – net gains (losses) 10 ( 40 ) 26

$ ( 41 ) $ ( 62 ) $ ( 26 )

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Interest capitalized ( 67 ) ( 62 ) ( 57 )

Bond redemption (b) — — 16

$ 200 $ 63 $ 77

Year Ended December 31, 2022 2021 2020

Income Attributable to Noncontrolling Interests

Noncontrolling interests' operations (c) $ 134 $ 135 $ 125

Balance Sheet

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Prepaid and Other Current Assets

Prepaid and other deferred charges (d) $ 597 $ 527

Prepaid and other deferred charges (b) $ 583 $ 597

VAT recoverable 178 225

Unrealized gains on derivatives (Note 12) 73 24

Other 104 146

December 31, 2023 2022

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Pension assets (Note 16) $ 380 $ 661

Insurance contracts (e) 39 46

Long-term receivables, net (f) 164 105

Insurance contracts (c) 38 39

Long-term receivables, net (d) 163 164

Lease assets (Note 4) 938 872

Deposits 76 52

Investments carried at cost (h) 184 18

Investments carried at cost (e) 187 184

Deferred charges 60 66

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Unrealized losses on derivatives (Note 12) 41 23

Cost reduction programs (Note 3) 187 200

Cost reduction programs and other charges (Note 3) 146 187

Other 1,136 1,055

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Tax liabilities for uncertain tax positions (Note 5) 216 248

Tax Act liabilities for deemed repatriation (Note 5) 139 178

Tax Act liabilities (f) 80 139

Lease liability (Note 4) 715 654

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Unrealized losses on derivatives (Note 12) 6 73

Cost reduction programs (Note 3) 133 253

Cost reduction programs and other charges (Note 3) 68 133

Contingent liabilities (Note 17) 1,148 29

Other 505 487

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Deferred income taxes (Note 5) $ 5,749 $ 5,886

Other 913 759

Contract liabilities (Note 19) 1,049 913

$ 6,798 $ 6,799

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Derivatives – net of taxes 7 62

Pension/OPEB funded status obligation (net of $ 54 million tax obligation in 2022 and $ 305 million tax benefit in 2021) (Note 16)

Pension/OPEB funded status obligation (net of $ 60 million tax benefit in 2023 and $( 54 ) million tax obligation in 2022) (Note 16)

( 440 ) ( 60 )

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In 2022, depreciation and amortization expense include $ 1,006 million and $ 474 million, respectively, of Linde AG purchase accounting impacts.

(b) In December 2020, the company repaid $ 500 million of 4.05 % notes and $ 500 million of 3.00 % notes that were due in 2021 resulting in a $ 16 million interest charge.

(c) In 2022, 2021 and 2020 noncontrolling interests from continuing operations includes $ 22 million, $ 15 million and $ 57 million, respectively, of Linde AG purchase accounting impacts.

The decrease in 2021 is primarily related to the deconsolidation of a joint venture with operations in APAC (see Note 2) and the buyout of minority interests in the Republic of South Africa (see Note 14).

(d) Includes estimated income tax payments of $ 164 million in 2022 and $ 122 million in 2021.

(e) Consists primarily of insurance contracts and other investments to be utilized for non-qualified pension and OPEB obligations.

(f) The balances at December 31, 2022 and 2021 are net of reserves of $ 36 million and $ 33 million, respectively.

The amounts in both years relate primarily to long-term notes receivable from customers in APAC and government receivables in Brazil.

The amount in 2022 also includes receivables from the sale of GIST.

(b) Includes estimated income tax payments of $ 173 million in 2023 and $ 164 million in 2022.

(c) Consists primarily of insurance contracts and other investments to be utilized for non-qualified pension and OPEB obligations.

(d) The balances at December 31, 2023 and 2022 are net of reserves of $ 42 million and $ 36 million, respectively.

The amounts relate primarily to long-term notes receivable from customers in APAC, government receivables in Brazil and receivables from the sale of GIST.

(e) Includes investments from the deconsolidation of Russian subsidiaries.

(f) Represents tax payable related to the deemed repatriation tax pursuant to the U.S.

Tax Cuts and Jobs Act of 2018.

The company is required to fund the balance in annual installments through 2025.

(g) Americas consists of currency translation adjustments primarily in Canada, Mexico, and Brazil.

EMEA relates primarily to Germany, the U.K.

EMEA relates primarily to Germany, the U.K., the Netherlands, Hungary, Norway and Sweden.

APAC relates primarily to China, South Korea, India and Australia.

(h) In 2022 includes investments from the deconsolidation of Russian subsidiaries.

PROPERTY, PLANT AND EQUIPMENT – NET

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Foreign currency translation and other 5 ( 773 ) ( 304 ) ( 146 ) ( 13 ) ( 1,231 )

Disposals (Note 2) — ( 8 ) ( 235 ) — — ( 243 )

Disposals (Note 2 & Note 3) — ( 41 ) — ( 1 ) ( 20 ) ( 62 )

Balance, December 31, 2022 9,136 9,492 4,550 2,349 290 25,817

Acquisitions 44 28 — — — 72

Acquisitions (Note 2) 550 — 3 — — 553

Foreign currency translation and other 17 347 ( 54 ) 73 3 386

Disposals (Note 2 & Note 3) — ( 41 ) — ( 1 ) ( 20 ) ( 62 )

Disposals — ( 5 ) — — — ( 5 )

Balance, December 31, 2023 $ 9,703 $ 9,834 $ 4,499 $ 2,422 $ 293 $ 26,751

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Foreign currency translation 185 38 41 264

Disposals (Note 2) ( 140 ) — ( 45 ) ( 185 )

Disposals ( 3 ) — ( 20 ) ( 23 )

Other * ( 23 ) — 145 122

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Foreign currency translation ( 36 ) ( 1 ) ( 24 ) ( 61 )

Disposals (Note 2) 34 — 16 50

Disposals — — 21 21

Other * 30 — ( 138 ) ( 108 )

Balance, December 31, 2023 ( 2,270 ) ( 233 ) ( 1,099 ) ( 3,602 )

Net intangible asset balance at December 31, 2022 $ 9,221 $ 2,369 $ 830 $ 12,420

Net balance at December 31, 2023 $ 9,209 $ 2,376 $ 814 $ 12,399

(Millions of dollars) For the year ended December 31, 2022 Customer Relationships Brands/Tradenames Other Intangible Assets Total

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Foreign currency translation ( 660 ) ( 120 ) ( 56 ) ( 836 )

Disposals ( 1,085 ) ( 94 ) ( 46 ) ( 1,225 )

Disposals (Note 2) ( 140 ) — ( 45 ) ( 185 )

Other * ( 16 ) — 116 100

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*Other primarily relates to the write-off of fully amortized assets and reclassifications.

2021 Other is primarily due to merger related customer lists in the Americas.

There are no expected residual values related to these intangible assets.

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dollar denominated unless otherwise noted)

0.250 % Euro denominated notes due 2022 (b) (c)

2.20 % Notes due 2022 (e)

2.70 % Notes due 2023

2.00 % Euro denominated notes due 2023 (b)

5.875 % GBP denominated notes due 2023 (b)

2.70 % Notes due 2023 (c)

2.00 % Euro denominated notes due 2023 (d)

5.875 % GBP denominated notes due 2023 (d)

1.20 % Euro denominated notes due 2024

1.875 % Euro denominated notes due 2024 (b)

4.800 % Notes due 2024 (f)

4.700 % Notes due 2025 (f)

4.800 % Notes due 2024

4.700 % Notes due 2025

2.65 % Notes due 2025

1.625 % Euro denominated notes due 2025

3.625 % Euro denominated notes due 2025 (e)

0.00 % Euro denominated notes due 2026

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0.250 % Euro denominated notes due 2027

1.00 % Euro denominated notes due 2027 (d)

1.00 % Euro denominated notes due 2027

1.00 % Euro denominated notes due 2028 (b)

3.375 % Euro denominated notes due 2029 (e)

1.10 % Notes due 2030

1.90 % Euro denominated notes due 2030

1.375 % Euro denominated notes due 2031 (d)

1.375 % Euro denominated notes due 2031

0.550 % Euro denominated notes due 2032

1.625 % Euro denominated notes due 2035 (d)

0.375 % Euro denominated notes due 2033

3.625 % Euro denominated notes due 2034 (e)

1.625 % Euro denominated notes due 2035

3.55 % Notes due 2042

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(a) Amounts are net of unamortized discounts, premiums and/or debt issuance costs as applicable.

(b) December 31, 2022 and 2021 included a cumulative $ 56 million and $ 42 million adjustment to carrying value, respectively, related to hedge accounting of interest rate swaps.

(d) In March, 2022, Linde issued € 500 million of 1.000 % notes due 2027, € 750 million of 1.375 % notes due 2031, and € 800 million of 1.625 % notes due 2035.

(e) In May 2022, Linde repaid $ 500 million of 2.20 % notes that were due in August 2022.

There was no impact to interest within the consolidated statements of income.

(f) In November 2022, Linde issued $ 300 million of 4.800 % notes due in 2024 and $ 600 million of 4.700 % notes due in 2025.

(b) December 31, 2023 and December 31, 2022 included a cumulative $ 46 million and $ 56 million adjustment to carrying value, respectively, related to hedge accounting of interest rate swaps, including related terminations.

Refer to Note 12.

(d) In April 2023, Linde repaid € 650 million of 2.00 % notes and £ 300 million of 5.875 % notes that became due.

(e) 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.

Credit Facilities

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There are no financial maintenance covenants contained within the Credit Agreement.

The revolving credit facility expires on December 7, 2023 with the option to elect to have the entire principal balance outstanding under the Credit Agreement converted into non-revolving term loans, which will be due and payable one year after the commitment termination date.

The 364 -Day Credit Agreement expires on December 4, 2024 with the option to elect to have the entire principal balances outstanding under the Credit Agreement converted into non-revolving term loans, which will be due and payable one year after the commitment termination date.

No borrowings were outstanding under the Credit Agreements as of December 31, 2023.

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Cross-currency swaps

42 148 — 21 1 4

Commodity contracts N/A N/A — — — —

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Currency contracts:

Balance sheet items $ — $ — $ — $ — $ — $ —

Forecasted transactions $ 749 $ 323 $ 20 $ 6 $ 4 $ 5

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For forecasted transactions that do not qualify for cash flow hedging relationships, fair value adjustments are recorded directly to earnings.

Linde is hedging forecasted transactions for a maximum period of three years .

Cross-Currency Swaps

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For forecasted transactions that are designated as cash flow hedges, fair value adjustments are recorded to accumulated other comprehensive income (loss) with deferred amounts reclassified to earnings over the same time period as the income statement impact of the associated purchase.

Linde is hedging commodity contracts for a maximum period of three years .

Net Investment Hedges

As of December 31, 2023, Linde has € 10.7 billion ($ 11.7 billion) Euro-denominated notes and intercompany loans and ¥ 4.7 billion ($ 0.7 billion) CNY-denominated intercompany loans that are designated as hedges of the net investment positions in certain foreign operations.

Since hedge inception, the deferred gain recorded within cumulative translation adjustment component of accumulated other comprehensive income (loss) in the consolidated balance sheet and the consolidated statement of comprehensive income is $ 473 million (deferred gain of $ 333 million for the year ended December 31, 2022).

As of December 31, 2022, exchange rate movements relating to previously designated hedges that remain in accumulated other comprehensive income (loss) is a loss of $ 42 million.

Since hedge inception, the deferred gain recorded within cumulative translation adjustment component of accumulated other comprehensive income (loss) in the consolidated balance sheet is $ 45 million (deferred loss of $ 305 million in the consolidated statement of comprehensive income for the year ended December 31, 2023).

As of December 31, 2023, exchange rate movements relating to previously designated hedges that remain in accumulated other comprehensive income (loss) is a gain of $ 56 million.

These movements will remain in accumulated other comprehensive income (loss), until appropriate, such as upon sale or liquidation of the related foreign operations at which time amounts will be reclassified to the consolidated statements of income.

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fair value adjustments are recognized in earnings along with an equally offsetting charge/benefit to earnings for the changes in the fair value of the underlying financial asset or financial liability (see Note 11).

Certain interest rate swaps in a designated fair value hedge relationship were terminated during 2023.

Upon termination, adjustments are no longer recorded to the hedged items for changes in respective fair values attributable to the risk being hedged.

The unrecognized

loss on the terminated interest rate swaps is shown as a discount to long-term debt of $ 56 million, and will be amortized to interest expense over the remaining life of the debt, which extends through April 2028.

In addition, as of December 31, 2023, Linde is using interest rate swaps with a notional value of € 1 billion to hedge the variability of future cash flows of forecasted transactions due to interest rate risk and has designated this as a cash flow hedge.

Derivatives Impact on Consolidated Statements of Income

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Other balance sheet items and anticipated net income gains (losses) are recorded in the consolidated statements of income as other income (expenses)-net.

The amounts of gain or loss recognized in accumulated other comprehensive income (loss) and reclassified to the consolidated statement of income was not material for the years ended December 31, 2022, December 31, 2021, and December 31, 2020.

Net impacts expected to be reclassified to earnings during the next twelve months are also not material.

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Level 3 investments and securities consist of a venture fund.

For the valuation, Linde uses the net asset value received as part of the fund's quarterly reporting, which for the most part is not based on quoted prices in active markets.

valuation, Linde uses the net asset value received as part of the fund's quarterly reporting, which for the most part is not based on quoted prices in active markets.

In order to reflect current market conditions, Linde proportionally adjusts these by observable market data (stock exchange prices) or current transaction prices.

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The fair value of long-term debt is estimated based on the quoted market prices for the same or similar issues.

Long-term debt is categorized within either Level 1 or Level 2 of the fair value hierarchy depending on the trading volume of the issues and whether or not they are actively quoted in the market as opposed to traded through over-the-counter transactions.

Long-term debt is categorized within Level 2 of the fair value hierarchy.

At December 31, 2023, the estimated fair value of Linde’s long-term debt portfolio was $ 13,337 million versus a carrying value of $ 14,660 million.

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Linde plc Shareholders’ Equity

On March 1, 2023, in connection with the shareholder approved intercompany reorganization that resulted in the delisting of old Linde plc from the New York Stock Exchange (NYSE) and the Frankfurt Stock Exchange (FSE), and the subsequent relisting of new Linde plc to the NYSE, Linde shareholders automatically received one share of the new holding company in exchange for each share of Linde plc that was previously owned.

The company issued 490,766,972 new Linde shares.

Linde plc's historical treasury shares were immediately canceled which resulted in an approximate $ 15 billion decrease in treasury shares and retained earnings in Shareholders' Equity.

On November 7, 2023, Linde plc transferred the listing of its ordinary shares from the NYSE to the Nasdaq, and continued trading under the ticker symbol "LIN".

At December 31, 2023 and 2022, Linde has total authorized share capital of € 1,825,000 divided into 1,750,000,000 ordinary shares of € 0.001 each, 25,000 A ordinary shares of € 1.00 each, 25,000 deferred shares of € 1.00 each and 25,000,000 preferred shares of € 0.001 each.

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Linde completed the repurchases under this program in the first quarter of 2021.

On January 25, 2021 the company's board of directors approved the additional repurchase of $ 5.0 billion of its ordinary shares ("2021 program") under which Linde had repurchased 16,662,678 shares through December 31, 2022.

This program is set to expire on July 31, 2023.

On January 25, 2021 the company's board of directors approved the additional repurchase of $ 5.0 billion of its ordinary shares under which Linde had repurchased 16,662,678 shares through December 31, 2022.

Linde completed the repurchases under this program in the first quarter of 2022.

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This program expires on July 31, 2024.

On October 23, 2023, the company's board of directors approved a new share repurchase program for up to $ 15.0 billion of its ordinary shares ("2023 program") under which Linde has no repurchases as of December 31, 2023.

This program will

terminate on the earlier of the date as the maximum authority under the 2023 program is reached or the board terminates the 2023 program.

Noncontrolling Interests

Noncontrolling interest ownership changes are presented within the consolidated statements of equity.

2022 includes the impact of deconsolidating the company's Russian gas and engineering business entities (see to Note 3).

The decrease during 2021 is primarily related to the deconsolidation of a joint venture with operations in APAC (see to Note 2).

The decrease during 2020 primarily relates to the initiated buyout of minority interests in the Republic of South Africa.

As of December 31, 2020, the conditions of the buyout were met obligating the company to execute in January 2021.

Therefore, the company reclassified $ 196 million from non-controlling interest to other current liabilities reflecting the transaction price.

An additional $ 35 million of dividends declared to the minority owners, reflected on the Dividends and other capital reductions line, was also reclassified to other current liabilities at December 31, 2020 and was paid in 2021.

2022 includes the impact of deconsolidating the company's Russian gas and engineering business entities (see Note 3).

Redeemable Noncontrolling Interests

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The 2021 Linde plc Long Term Incentive Plan (the “2021 Plan") was adopted by the Board of Directors and shareholders of Linde plc on July 26, 2021.

Upon adoption of the 2021 Plan, any authorized shares that remained available for grant for new awards under the Amended and Restated 2009 Linde Long Term Incentive Plan (the "2009 Plan") were cancelled.

The 2021 Plan permits awards of stock options, stock appreciation rights, restricted stock and restricted stock units, performance-based stock units and other equity awards to eligible officer and non-officer employees and non-employee directors of the company and its affiliates.

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In 2023, the company granted 341,915 performance-based stock unit awards under the 2021 Plan to senior management that vest, subject to the attainment of pre-established minimum performance criteria, principally on the third anniversary of their date of grant.

These awards are tied to either after tax return on capital ("ROC") performance or relative total shareholder return ("TSR") performance versus that of the S&P 500 (weighted 67%) and Eurofirst 300 (weighted 33%).

These awards are tied to either after tax return on capital ("ROC") performance or relative total shareholder return ("TSR") performance versus that of a blended group of companies that is comprised of the S&P 500, excluding the Financial sector, and Eurofirst 300.

The actual number of shares issued in settlement of a vested award can range from zero to 200 percent of the target number of shares granted based upon the company’s attainment of specified performance targets at the end of a three-year period.

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Linde has obtained the most recently available Pension Protection Act ("PPA") annual funding notices from the Trustees of the MEPs.

As of December 31, 2022, there were three Red Zone plans, deemed to be in "critical" or "critical and declining" status that have implemented financial improvement or rehabilitation plans.

Linde does not currently anticipate significant future obligations due to the funding status of these plans and such obligation would be immaterial.

As of December 31, 2023, there were two Red Zone plans, deemed to be in "critical" or "critical and declining" status that have implemented financial improvement or rehabilitation plans.

Linde does not currently anticipate significant future obligations due to the funding status of these plans and any such obligation would be immaterial.

If Li nde determined it was probable that it would withdraw from an MEP, the company would record a liability for its portion of the MEP’s unfunded pension obligations, as calculated at that time.

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employees are eligible to participate in defined contribution savings plans offered by their applicable business.

Employee contribution percentages vary by plan and are subject to the maximum allowable by IRS regulations.The cost for these defined contribution plans was $ 56 million in 2022, $ 51 million in 2021 and $ 46 million in 2020 (these costs are not included in the tables that follow).

Employee contribution percentages vary by plan and are subject to the maximum allowable by IRS regulations.

The cost for these defined contribution plans was $ 59 million in 2023, $ 56 million in 2022 and $ 51 million in 2021 (these costs are not included in the tables that follow).

The defined contribution plans include a non-leveraged employee stock ownership plan ("ESOP") which covers all employees participating in this plan.

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Net periodic benefit cost (benefit) $ ( 80 ) $ ( 110 ) $ ( 35 )

(a) Settlement charges were triggered by lump sum benefit payments made from a U.S.

non-qualified plan.

(a) Settlement charges were triggered by lump sum benefit payments.

Funded Status

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Interest cost 105 268 60 141

Divestitures — — — ( 13 )

Participant contributions 11 18 11 17

Plan amendment — — — —

Actuarial loss (gain) 100 532 ( 528 ) ( 2,972 )

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Benefits paid from plan assets ( 141 ) ( 320 ) ( 136 ) ( 248 )

Divestitures — — — ( 14 )

Foreign currency translation and other changes — 275 — ( 692 )

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________________________

* Pension net actuarial gains in 2022 are largely driven by the continued increase in the discount rate environment resulting in actuarial gains from a lower PBO, which is partially offset by unfavorable plan asset experience for both non-U.S.

In 2021, the actuarial gains were attributable to an increase in actual return on assets and favorability generated from a lower PBO due the initial increase in discount rates.

* Pension net actuarial losses in 2023 are largely driven by the decrease in the discount rate environment resulting in actuarial losses from a higher PBO, which is partially offset by favorable plan asset experience for non-U.S plans.

plan derived a benefit from the actual return on plan assets.

In 2022, the actuarial gains were largely driven by the significant increase in the discount rate environment resulting in actuarial gains from a lower PBO, which is partially offset by unfavorable plan asset experience for both non-U.S.

The following table provides information for pension plans where the accumulated benefit obligation exceeds the fair value of plan assets:

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For 2024, the expected long-term rate of return on plan assets will be 7.00 % for the U.S.

For 2023, the expected weighted average long-term rate of return for non-U.S.

plans will be 5.60 %.

plans and 5.83 %.

Pension Plan Assets

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It is possible that the company may incur losses in connection with some of these actions in excess of accrued liabilities.

Management does not anticipate individually or in the aggregate such losses would have a material adverse effect on the company’s consolidated financial position or liquidity;

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 significant impact on the company’s reported results of operations in any given period.

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It is difficult to estimate the timing of resolution of legal matters in Brazil.

• At December 31, 2022 the most significant non-income and income tax claims in Brazil, after enrollment in the Refis Program, relate to state VAT tax matters and a federal income tax matter where the taxing authorities are challenging the tax rate that should be applied to income generated by a subsidiary company that previously received favorable rulings.

• At December 31, 2023, the most significant non-income tax claims in Brazil, after enrollment in the Refis Program, relate to state VAT tax matters.

The total estimated exposure relating to such claims, including interest and penalties, as appropriate, is approximately $ 115 million.

Linde has not recorded any liabilities related to such claims based on management judgments, after considering judgments and opinions of outside counsel.

Linde has not recorded any liabilities related to such claims based on management judgment and opinions of outside counsel.

During the first quarter of 2023, the Brazilian Supreme Court issued a decision confirming the constitutionality of a specific federal income tax, with retroactive effect.

As a result of this decision, the company recorded a reserve based on its best estimate of potential settlement (see Note 3).

This decision has not yet been finalized and is subject to ongoing motions for clarification.

Because litigation in Brazil historically takes many years to resolve, it is very difficult to estimate the timing of resolution of these matters;

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The company is vigorously defending against the proceedings.

On February 8, 2023, the Brazilian Supreme Court issued a decision confirming the constitutionality of a specific federal income tax, with retroactive effect.

This decision has not yet been finalized and is subject to ongoing motions for clarification.

The timing of when this decision will be final and the potential impact on the company’s tax liability remain uncertain at this time.

• On September 1, 2010, CADE (Brazilian Administrative Council for Economic Defense) announced alleged anticompetitive activity on the part of five industrial gas companies in Brazil and imposed fines.

Originally, CADE imposed a civil fine of R$ 2.2 billion Brazilian reais ($ 417 million) on White Martins, the Brazil-based subsidiary of Linde Inc.

The fine was reduced to R$ 1.7 billion Brazilian reais ($ 322 million) due to a calculation error made by CADE.

The fine against White Martins was overturned by the Ninth Federal Court of Brasilia.

CADE appealed this decision, and the Federal Court of Appeals rejected CADE's appeal and confirmed the decision of the Ninth Federal Court of Brasilia.

CADE has filed an appeal with the Superior Court of Justice and a decision is pending.

Similarly, on September 1, 2010, CADE imposed a civil fine of R$ 237 million Brazilian reais ($ 45 million) on Linde Gases Ltda., the former Brazil-based subsidiary of Linde AG, which was divested to MG Industries GmbH on March 1, 2019 and with respect to which Linde provided a contractual indemnity.

The fine was reduced to R$ 188 million Brazilian reais ($ 36 million) due to a calculation error made by CADE.

The fine against Linde Gases Ltda.

was overturned by the Seventh Federal Court in Brasilia.

CADE appealed this decision, and the Federal Court of Appeals rejected CADE's appeal and confirmed the decision of the Seventh

Federal Court of Brasilia.

CADE filed an appeal with the Superior Court of Justice, and a final decision is pending.

Linde has strong defenses and is confident that it will prevail on appeal and have the fines overturned.

Linde strongly believes that the allegations of anticompetitive activity against our current and former Brazilian subsidiaries are not supported by valid and sufficient evidence.

Linde believes that this decision will not stand up to judicial review and deems the possibility of cash outflows to be extremely unlikely.

As a result, no reserves have been recorded as management does not believe that a loss from this case is probable.

CADE imposed a civil fine of R$ 1.7 billion Brazilian reais ($ 350 million) on White Martins, the Brazil-based subsidiary of Linde Inc., and R$ 0.2 billion Brazilian reais ($ 41 million) on Linde Gases Ltda., the former Brazil-based subsidiary of Linde AG, which was divested to MG Industries GmbH on March 1, 2019 and with respect to which Linde provided a contractual indemnity.

The fine against White Martins and Linde Gases Ltda.

was overturned by the Ninth and Seventh Federal Courts of Brasilia, respectively.

CADE appealed these decisions, and the Federal Court of Appeals rejected CADE's appeals and confirmed the decision of the Ninth and Seventh Federal Courts of Brasilia.

CADE had filed appeals for both subsidiaries with the Superior Court of Justice which were denied.

CADE filed subsequent appeals to a panel of the Supreme Court of Justice and final and binding decisions were issued by the Supreme Court of Justice annulling the fine imposed against Linde Gases Ltda and White Martins in September 2023 and January 2024, respectively.

• On and after April 23, 2019 former shareholders of Linde AG filed appraisal proceedings at the District Court ( Landgericht ) Munich I (Germany), seeking an increase of the cash consideration paid in connection with the previously completed cash merger squeeze-out of all of Linde AG’s minority shareholders for € 189.46 per share.

Any such increase would apply to all 14,763,113 Linde AG shares that were outstanding on April 8, 2019, when the cash merger squeeze-out was completed.

Any such increase would apply to all 14,763,113 Linde AG shares that were outstanding on April 8, 2019, when

the cash merger squeeze-out was completed.

The period for plaintiffs to file claims expired on July 9, 2019.

The company believes the consideration paid was fair and that the claims lack merit, and no reserve has been established.

In November 2023, the court issued a decision rejecting the plaintiffs’ claims in their entirety and determining that the cash merger squeeze-out consideration was appropriate.

The plaintiffs are entitled to appeal this decision.

The company believes the consideration paid was fair and that the claims are not supported by sufficient evidence, and no reserve has been established.

We cannot estimate the timing of resolution.

• On December 30, 2022, the Russian Arbitration Court of the St.

Petersburg and Leningrad Region issued an injunction preventing (i) the sale of any shares in Linde’s subsidiaries and joint ventures in Russia, and (ii) the disposal of any of assets in those entities exceeding 5 % of the relevant company’s overall asset value.

The injunction is not expected to have any impact on the operations of Linde’s Russian businesses.

The injunction was requested by RusChemAlliance (RCA) as a preliminary measure to secure payment of an eventual award under an arbitration proceeding RCA intends to file against Linde Engineering for alleged breach of contract under the agreement to build a gas processing plant in Ust Luga, Russia entered into between a consortium of Linde Engineering and Renaissance Heavy Industries LLC, and RCA on July 7, 2021.

Petersburg and Leningrad Region ("St.

Petersburg Court") issued an injunction preventing (i) the sale of any shares in Linde’s subsidiaries and joint ventures in Russia, and (ii) the disposal of any of the assets in those entities exceeding 5 % of the relevant company’s overall asset value.

The injunction was requested by RusChemAlliance (RCA) as a preliminary measure to secure payment of a possible eventual award under an arbitration proceeding RCA intended to file against Linde Engineering for alleged breach of contract under the agreement to build a gas processing plant in Ust Luga, Russia entered into between a consortium of Linde Engineering, Renaissance Heavy Industries LLC, and RCA on July 7, 2021.

Performance of the agreement was lawfully suspended by Linde Engineering on May 27, 2022 in compliance with applicable sanctions and in accordance with a decision by the sanctions authority in Germany.

As of December 31, 2022, Linde had approximately $ 1.2 billion of advance payments recorded in contract liabilities related to engineering projects with RCA which are subject to sanctions and have been suspended accordingly as of May 27, 2022.

Contract liabilities are typically recognized as revenue as performance obligations are satisfied under contract terms.

Linde deconsolidated its Russian gas and engineering business entities as of June 30, 2022 (see Note 3), and the remaining investment value of its Russia subsidiaries is immaterial.

As such, the obligation to satisfy any residual contract liabilities is not expected to have an adverse impact on earnings, but may result in net cash outflows.

On March 1, 2023, RCA filed a claim in St.

Petersburg against Linde GmbH for recovery of advance payments under the agreement ("Russian Claim"), and subsequently (i) added Linde and other Linde subsidiaries as defendants, and (ii) is seeking payment of alleged damages from Linde (pursuant to corporate guarantees) and guarantor banks.

On March 4, 2023, in accordance with the dispute resolution provisions of the agreement, Linde GmbH filed a notice of arbitration with the Hong Kong International Arbitration Centre ("HKIAC") against RCA to claim that (i) RCA has no entitlement to payment, (ii) RCA’s Russian claim is in breach of the arbitration agreement which requires HKIAC arbitration, and (iii) RCA must compensate Linde for the losses and damages caused by the injunction.

Additionally, Linde GmbH filed for and on March 17, 2023 obtained an anti-suit injunction from a Hong Kong court against RCA directing RCA to seek a stay of the Russian Claim and ordering it to resolve any disputes in accordance with HKIAC arbitration.

On September 27, 2023, the anti-suit injunction was confirmed by the same Hong Kong court.

On January 4, 2024, the Hong Kong court issued a final judgment in Linde’s favor (i) granting a permanent anti-suit injunction against RCA, (ii) granting a permanent, global anti-enforcement injunction against RCA, and (iii) ordering that the injunction issued by the St.

Petersburg Court be lifted.

As of December 31, 2023, Linde has a contingent liability of $ 1.1 billion recorded in Other long-term liabilities, which represents advance payments previously recorded in contract liabilities as of December 31, 2022 related to terminated engineering projects with RCA.

As a result of the contract terminations, Linde no longer has future performance obligations for these projects.

Linde deconsolidated its Russian gas and engineering business entities as of June 30, 2022, and the remaining investment value of its Russia subsidiaries is immaterial.

Despite the January 4, 2024 decision of the Hong Kong court, the injunction affecting Linde’s shares and assets has not been lifted, the proceeding in St.

Petersburg has not been stayed and RCA is continuing to pursue its claim in Russia.

On February 20, 2024, the St.

Petersburg Court issued its decision and granted the Russian Claim in RCA’s favor.

Linde has 30 days to appeal this decision and expects to do so prior to the expiration of that deadline.

If Linde appeals, RCA cannot enforce the decision (including foreclosing on the shares of the Russian entities) until after the appeal is decided.

Linde does not expect an adverse impact on earnings from this decision given the contingent liability recorded as of December 31, 2023 and the immaterial remaining investment value of its deconsolidated Russia subsidiaries.

It is difficult to estimate the timing of resolution of this matter.

The company intends to vigorously defend its interests in both the injunction and arbitration proceedings.

The company intends to vigorously defend its interests in both the Russian Claim and arbitration proceedings.

At December 31, 2023, Linde had undrawn outstanding letters of credit, bank guarantees and surety bonds valued at approximately $ 3,344 million from financial institutions.

37 unchanged sentences

Reported Segment operating profit 9,070 7,904 7,176

Russia-Ukraine conflict and other charges (Note 3) ( 1,029 ) ( 273 ) ( 506 )

Other charges (Note 3) ( 40 ) ( 1,029 ) ( 273 )

Purchase accounting impacts - Linde AG ( 1,006 ) ( 1,506 ) ( 1,919 )

44 unchanged sentences

(b) Long-lived assets include property, plant and equipment - net.

(c) Sales in Germany include Engineering sales to third parties, locally and internationally, and represents 44 % , 53 % and 62 % of Germany sales in 2022 , 2021 and 2020, respectively.

(c) Sales in Germany include Engineering sales to third parties, locally and internationally, which represent 35 %, 44 % and 53 % of Germany sales in 2023, 2022 and 2021, respectively.

REVENUE RECOGNITION

60 unchanged sentences

Total contract liabilities are $ 2,950 million at December 31, 2023 (current of $ 1,901 million and $ 1,049 million within deferred credits in the consolidated balance sheets).

As of December 31, 2022 Linde has approximately $ 1.7 billion recorded in contract liabilities related to engineering projects in Russia subject to sanctions.

As of December 31, 2023, Linde has $ 418 million recorded in contract liabilities related to engineering projects in Russia subject to sanctions and therefore suspended and lawfully wound down.

Total contract liabilities were $ 3,986 million at December 31, 2022 (current contract liabilities of $ 3,073 million and $ 913 million within deferred credits in the consolidated balance sheets).

The decrease in contract liabilities is primarily related to a reclassification of contract liabilities to a contingent liability in other long-term liabilities associated with an engineering project in Russia (see Note 17).

Revenue recognized for the twelve months ended December 31, 2023 that was included in the contract liability at December 31, 2022 was $ 1,017 million.

Contract assets and liabilities primarily relate to the Linde Engineering business.

Contract assets and liabilities primarily relate to the Engineering business.

Payment Terms and Other

32 unchanged sentences

Additionally, plant sales from the Linde Engineering business are primarily contracted on a fixed price basis.

The company estimates the consideration related to future minimum purchase requirements and plant sales was approximately $ 51 billion (excludes Russian projects which are impacted by sanctions, refer to Note 3).

The company estimates the consideration related to future minimum purchase requirements and plant sales was approximately $ 48 billion (excludes Russian projects which are impacted by sanctions).

This amount excludes all on-site sales above minimum purchase requirements, which can be significant depending on customer needs.

3 unchanged sentences

SUBSEQUENT EVENTS

On January 6, 2023, Linde purchased the remaining 77.2 % ownership interest in nexAir, LLC.

nexAir, LLC is one of the largest independent packaged gas distributors in the United States with annual sales of approximately $ 400 million in 2022.

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.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data