LINDE PLC 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Management’s Statement of Responsibility for Financial Statements 42 Management’s Report on Internal Control Over Financial Reporting 42 Report of Independent Registered Public Accounting Firm [PCAOB ID 238 ] 43 Audited Consolidated Financial Statements Consolidated Statements of Income for the Years Ended December 31, 2024, 2023 and 2022 45 Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2024, 2023 and 2022 46 Consolidated Balance Sheets as of December 31, 2024 and 2023 47 Consolidated Statements of Cash Flows for the Years Ended December 31, 2024, 2023 and 2022 48 Consolidated Statements of Equity for the Years Ended December 31, 2024, 2023 and 2022 49 Notes to Consolidated Financial Statements Note 1. Summary of Significant Accounting Policies 50 Note 2. Acquisitions and Divestitures 53 Note 3. Cost reduction program and other charges 54 Note 4. Leases 56 Note 5. Income Taxes 57 Note 6. Earnings Per Share – Linde plc Shareholders 60 Note 7. Supplemental Information 61 Note 8. Property, Plant and Equipment – Net 64 Note 9. Goodwill 65 Note 10. Other Intangible Assets 65 Note 11. Debt 66 Note 12. Financial Instruments 68 Note 13. Fair Value Disclosures 71 Note 14. Equity and Noncontrolling Interests 72 Note 15. Share-Based Compensation 73 Note 16. Retirement Programs 75 Note 17. Commitments and Contingencies 82 Note 18. Segment Information 84 Note 19. Revenue Recognition 86 Note 20. Subsequent Events 89 41 Table of Contents 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, 2024. 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, 2024 as stated in their report. /s/ S ANJIV L AMBA /s/ K ELCEY E . H OYT Sanjiv Lamba Chief Executive Officer Kelcey E. Hoyt Chief Accounting Officer /s/ M ATTHEW J. W HITE Matthew J. White Chief Financial Officer February 26, 2025 42 Table of Contents 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, 2024 and 2023, 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, 2024, 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, 2024, 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, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024 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, 2024, 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 the accompanying Management’s Report on Internal Control over Financial Reporting. 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. 43 Table of Contents 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 Matters 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, $ 2,322 million of the Company’s total revenues for the year ended December 31, 2024 was generated from sale of equipment contracts. Sales of equipment contracts are generally comprised of a single performance obligation. Revenue from 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. Changes to cost estimates and contract modifications are typically accounted for as part of the existing contract and are recognized as cumulative adjustments for the inception-to-date effect of such change. 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 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 sale of equipment contracts. These procedures also included, among others, evaluating and testing management’s process for developing the estimated costs at completion for 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 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 26, 2025 We have served as the Company’s or its predecessor’s auditor since 1992. 44 Table of Contents CONSOLIDATED STATEMENTS OF INCOME LINDE PLC AND SUBSIDIARIES (Dollar amounts in millions, except per share data) Year Ended December 31, 2024 2023 2022 Sales $ 33,005 $ 32,854 $ 33,364 Cost of sales, exclusive of depreciation and amortization 17,143 17,492 19,450 Selling, general and administrative 3,337 3,295 3,107 Depreciation and amortization 3,780 3,816 4,204 Research and development 150 146 143 Cost reduction program and other charges 145 40 1,029 Other income (expense) - net 185 ( 41 ) ( 62 ) Operating Profit 8,635 8,024 5,369 Interest expense - net 256 200 63 Net pension and OPEB cost (benefit), excluding service cost ( 190 ) ( 164 ) ( 237 ) Income Before Income Taxes and Equity Investments 8,569 7,988 5,543 Income taxes 2,002 1,814 1,434 Income Before Equity Investments 6,567 6,174 4,109 Income from equity investments 170 167 172 Net Income (Including Noncontrolling Interests) 6,737 6,341 4,281 Less: noncontrolling interests ( 172 ) ( 142 ) ( 134 ) Net Income – Linde plc $ 6,565 $ 6,199 $ 4,147 Per Share Data – Linde plc Shareholders Basic earnings per share $ 13.71 $ 12.70 $ 8.30 Diluted earnings per share $ 13.62 $ 12.59 $ 8.23 Weighted Average Shares Outstanding (000’s): Basic shares outstanding 478,773 488,191 499,736 Diluted shares outstanding 482,092 492,290 504,038 The accompanying Notes are an integral part of these financial statements. 45 Table of Contents CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME LINDE PLC AND SUBSIDIARIES (Dollar amounts in millions) Year Ended December 31, 2024 2023 2022 NET INCOME (INCLUDING NONCONTROLLING INTERESTS) $ 6,737 $ 6,341 $ 4,281 OTHER COMPREHENSIVE INCOME (LOSS) Translation adjustments: Foreign currency translation adjustments ( 1,638 ) 399 ( 1,725 ) Reclassifications to net income — — ( 110 ) Income taxes 6 1 — Translation adjustments ( 1,632 ) 400 ( 1,835 ) Funded status - retirement obligations (Note 16): Retirement program remeasurements 674 ( 480 ) 1,349 Reclassifications to net income — ( 14 ) 80 Income taxes ( 155 ) 114 ( 359 ) Funded status - retirement obligations 519 ( 380 ) 1,070 Derivative instruments (Note 12): Current year unrealized gain (loss) ( 38 ) ( 80 ) 107 Reclassifications to net income 22 13 ( 129 ) Income taxes 3 12 9 Derivative instruments ( 13 ) ( 55 ) ( 13 ) TOTAL OTHER COMPREHENSIVE INCOME (LOSS) ( 1,126 ) ( 35 ) ( 778 ) COMPREHENSIVE INCOME (INCLUDING NONCONTROLLING INTERESTS) 5,611 6,306 3,503 Less: noncontrolling interests ( 135 ) ( 130 ) ( 90 ) COMPREHENSIVE INCOME - LINDE PLC $ 5,476 $ 6,176 $ 3,413 The accompanying Notes are an integral part of these financial statements. 46 Table of Contents CONSOLIDATED BALANCE SHEETS LINDE PLC AND SUBSIDIARIES (Dollar amounts in millions) December 31, 2024 2023 Assets Cash and cash equivalents $ 4,850 $ 4,664 Accounts receivable - net 4,622 4,718 Contract assets 263 196 Inventories 1,946 2,115 Prepaid and other current assets 1,264 927 Total Current Assets 12,945 12,620 Property, plant and equipment - net 24,775 24,552 Equity investments 2,130 2,190 Goodwill 25,937 26,751 Other intangible assets – net 11,330 12,399 Other long-term assets 3,030 2,299 Total Assets $ 80,147 $ 80,811 Liabilities and Equity Accounts payable $ 2,507 $ 3,020 Short-term debt 4,223 4,713 Current portion of long-term debt 2,057 1,263 Contract liabilities 1,194 1,901 Accrued taxes 637 664 Other current liabilities 3,926 4,156 Total Current Liabilities 14,544 15,717 Long-term debt 15,343 13,397 Other long-term liabilities 4,015 3,804 Deferred credits 6,757 6,798 Total Liabilities 40,659 39,716 Commitments and contingencies (Note 17) Redeemable noncontrolling interests 13 13 Linde plc Shareholders’ Equity: Ordinary shares, € 0.001 par value, authorized 1,750,000,000 shares, 2024 and 2023 issued: 490,766,972 ordinary shares 1 1 Additional paid-in capital 39,603 39,812 Retained earnings 12,634 8,845 Accumulated other comprehensive income (loss) ( 6,894 ) ( 5,805 ) Less: Treasury shares, at cost (2024 – 17,530,240 shares and 2023 – 8,321,827 shares) ( 7,252 ) ( 3,133 ) Total Linde plc Shareholders’ Equity 38,092 39,720 Noncontrolling interests 1,383 1,362 Total Equity 39,475 41,082 Total Liabilities and Equity $ 80,147 $ 80,811 The accompanying Notes are an integral part of these financial statements. 47 Table of Contents CONSOLIDATED STATEMENTS OF CASH FLOWS LINDE PLC AND SUBSIDIARIES (Millions of dollars) Year Ended December 31, 2024 2023 2022 Increase (Decrease) in Cash and Cash Equivalents Operations Net income – Linde plc $ 6,565 $ 6,199 $ 4,147 Add: Noncontrolling interests 172 142 134 Net Income (including noncontrolling interests) $ 6,737 $ 6,341 $ 4,281 Adjustments to reconcile net income to net cash provided by operating activities: Cost reduction program and other charges 31 ( 118 ) 902 Depreciation and amortization 3,780 3,816 4,204 Deferred income taxes ( 142 ) ( 84 ) ( 383 ) Share-based compensation 160 141 107 Non-cash charges and other ( 72 ) 43 ( 49 ) Working capital Accounts receivable ( 160 ) ( 86 ) ( 423 ) Contract assets and liabilities, net ( 409 ) ( 168 ) 310 Inventory 56 ( 127 ) ( 347 ) Prepaid and other current assets ( 55 ) 66 ( 157 ) Payables and accruals ( 277 ) ( 168 ) 307 Pension contributions ( 35 ) ( 46 ) ( 51 ) Long-term assets, liabilities and other ( 191 ) ( 305 ) 163 Net cash provided by operating activities 9,423 9,305 8,864 Investing Capital expenditures ( 4,497 ) ( 3,787 ) ( 3,173 ) Acquisitions, net of cash acquired ( 317 ) ( 953 ) ( 110 ) Divestitures, net of cash divested and asset sales 170 70 195 Net cash used for investing activities ( 4,644 ) ( 4,670 ) ( 3,088 ) Financing Short-term debt borrowings (repayments) – net ( 372 ) 554 3,050 Long-term debt borrowings 4,844 2,188 3,210 Long-term debt repayments ( 1,305 ) ( 1,682 ) ( 1,785 ) Issuances of ordinary shares 31 33 36 Purchases of ordinary shares ( 4,482 ) ( 3,958 ) ( 5,168 ) Cash dividends - Linde plc shareholders ( 2,655 ) ( 2,482 ) ( 2,344 ) Noncontrolling interest transactions and other ( 420 ) ( 53 ) ( 88 ) Net cash used for financing activities ( 4,359 ) ( 5,400 ) ( 3,089 ) Effect of exchange rate changes on cash and cash equivalents ( 234 ) ( 7 ) ( 74 ) Change in cash and cash equivalents 186 ( 772 ) 2,613 Cash and cash equivalents, beginning-of-period 4,664 5,436 2,823 Cash and cash equivalents, end-of-period $ 4,850 $ 4,664 $ 5,436 Supplemental Data Income taxes paid $ 2,216 $ 1,955 $ 1,735 Interest paid, net of capitalized interest $ 443 $ 451 $ 170 The accompanying Notes are an integral part of these financial statements. 48 Table of Contents CONSOLIDATED STATEMENTS OF EQUITY LINDE PLC AND SUBSIDIARIES (Dollar amounts in millions, except per share data, shares in thousands) Linde plc Shareholders’ Equity Ordinary shares Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) (Note 7) Treasury Stock Linde plc Shareholders’ Equity Noncontrolling Interests Total Equity Activity Shares Amounts Shares Amounts Balance, December 31, 2021 552,013 $ 1 $ 40,180 $ 18,710 $ ( 5,048 ) 43,332 $ ( 9,808 ) $ 44,035 $ 1,393 $ 45,428 Net Income available for Linde plc shareholders 4,147 4,147 134 4,281 Other comprehensive income (loss) ( 734 ) ( 734 ) ( 44 ) ( 778 ) Noncontrolling interests: Dividends and other capital reductions — ( 81 ) ( 81 ) Additions (Reductions) (Note 14) — ( 56 ) ( 56 ) Dividends ($ 4.68 per ordinary share) ( 2,344 ) ( 2,344 ) ( 2,344 ) Issuances of ordinary shares: For employee savings and incentive plans ( 282 ) 28 ( 811 ) 198 ( 56 ) ( 56 ) Purchases of ordinary shares 17,034 ( 5,127 ) ( 5,127 ) ( 5,127 ) Share-based compensation 107 107 107 Balance, December 31, 2022 552,013 $ 1 $ 40,005 $ 20,541 $ ( 5,782 ) 59,555 $ ( 14,737 ) $ 40,028 $ 1,346 $ 41,374 Net Income available for Linde plc shareholders 6,199 6,199 142 6,341 Other comprehensive income (loss) ( 23 ) ( 23 ) ( 12 ) ( 35 ) Noncontrolling interests: Dividends and other capital reductions — ( 113 ) ( 113 ) Additions (Reductions) ( 12 ) ( 12 ) ( 1 ) ( 13 ) Dividends ($ 5.10 per ordinary share) ( 2,482 ) ( 2,482 ) ( 2,482 ) Issuances of ordinary shares: For employee savings and incentive plans ( 322 ) ( 113 ) ( 924 ) 307 ( 128 ) ( 128 ) Purchases of ordinary shares 10,937 ( 4,003 ) ( 4,003 ) ( 4,003 ) 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 Net Income available for Linde plc shareholders 6,565 6,565 172 6,737 Other comprehensive income (loss) ( 1,089 ) ( 1,089 ) ( 37 ) ( 1,126 ) Noncontrolling interests: Dividends and other capital reductions — ( 133 ) ( 133 ) Additions (Reductions) — 19 19 Dividends ($ 5.56 per ordinary share) ( 2,655 ) ( 2,655 ) ( 2,655 ) Issuances of ordinary shares: For employee savings and incentive plans ( 369 ) ( 121 ) ( 868 ) 340 ( 150 ) ( 150 ) Purchases of ordinary shares 10,076 ( 4,459 ) ( 4,459 ) ( 4,459 ) Share-based compensation 160 160 160 Balance, December 31, 2024 490,767 $ 1 $ 39,603 $ 12,634 $ ( 6,894 ) 17,530 $ ( 7,252 ) $ 38,092 $ 1,383 $ 39,475 The accompanying Notes are an integral part of these financial statements. 49 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS LINDE PLC AND SUBSIDIARIES NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Linde plc ("Linde" or "the company") is an incorporated public limited company formed under the laws of Ireland. Linde’s registered office is located at Ten Earlsfort Terrace, Dublin 2, D02 T380 Ireland. 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, 06810, United States. Linde trades on the Nasdaq under the symbol 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. GAAP") and include the accounts of all significant subsidiaries where control exists and, in limited situations, variable-interest entities where the company is the primary beneficiary. Intercompany transactions and balances are eliminated in consolidation and any significant related-party transactions have been disclosed. Equity investments generally consist of 20% to 50% owned operations where the company exercises significant influence, but does not have control. Income from equity investments in corporations is reported on an after-tax basis. Pre-tax income from equity investments that are partnerships or limited-liability corporations is included in other income (expenses) – net with related taxes included in Income taxes. Equity investments are reviewed for impairment whenever events or circumstances reflect that an impairment loss may have been incurred. Changes in ownership interest that result either in consolidation or deconsolidation of an investment are recorded at fair value through earnings, including the retained ownership interest, while changes that do not result in either consolidation or deconsolidation of a subsidiary are treated as equity transactions. Use of Estimates – The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. While actual results could differ, management believes such estimates to be reasonable. Operations – Linde is the largest industrial gases company globally. The company produces, sells and distributes atmospheric, process and specialty gases to a diverse group of industries including aerospace, chemicals, food and beverage, electronics, energy, healthcare, manufacturing, and metals. Linde’s Engineering business offers its customers an extensive range of gas production and processing services including supplying plant components and services directly to customers. Revenue Recognition – Revenue is recognized as control of goods or services are transferred to customers in an amount that reflects the consideration to which the company expects to be entitled to receive in exchange for the goods or services. See Note 19 for additional details regarding Linde's revenue recognition policies. Cash Equivalents – Cash equivalents are considered to be highly liquid securities with original maturities of three months or less. Inventories – Inventories are stated at the lower of cost or net realizable value. Cost is determined using the average-cost method. Property, Plant and Equipment – Net – Property, plant and equipment are carried at cost, net of accumulated depreciation. The company capitalizes labor, applicable overhead and interest as part of the cost of constructing major facilities. 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). Linde uses accelerated depreciation methods for tax purposes where appropriate. Maintenance of property, plant and equipment is generally expensed as incurred. The company performs a test for impairment whenever events or changes in circumstances indicate that the carrying amount of an individual asset or asset group may not be recoverable. Should projected undiscounted future cash flows be less than the carrying amount of the asset or asset group, an impairment charge reducing the carrying amount to fair value may be required. Fair value is determined based on the most appropriate valuation technique, including discounted cash flows. Asset-Retirement Obligations – An asset-retirement obligation is recognized in the period in which sufficient information exists to determine the fair value of the liability with a corresponding increase to the carrying amount of the related property, plant and equipment which is then depreciated over its useful life. The liability is initially measured at fair 50 Table of Contents value and then accretion expense is recorded in each subsequent period. The company’s asset-retirement obligations are primarily associated with its on-site long-term supply arrangements where the company has built a facility on land leased from the customer and is obligated to remove the facility at the end of the contract term. The company's asset-retirement obligations are not material to its consolidated financial statements. Foreign Currency Translation – For most foreign operations, the local currency is the functional currency and translation gains and losses are reported as part of the accumulated other comprehensive income (loss) component of equity as a cumulative translation adjustment (see Note 7). Financial Instruments – Linde enters into various derivative financial instruments to manage its exposure to fluctuating interest rates, currency exchange rates, commodity pricing and energy costs. Such instruments primarily include interest-rate swap and treasury rate lock agreements; currency-swap agreements; forward contracts; currency options; and commodity-swap agreements. These instruments are not entered into for trading purposes. Linde only uses commonly traded and non-leveraged instruments. There are three types of derivatives the company enters into: (i) those relating to fair-value exposures, (ii) those relating to cash-flow exposures, and (iii) those relating to foreign currency net investment exposures. Fair-value exposures relate to recognized assets or liabilities, and firm commitments; cash-flow exposures relate to the variability of future cash flows associated with recognized assets or liabilities, or forecasted transactions; and net investment exposures relate to the impact of foreign currency exchange rate changes on the carrying value of net assets denominated in foreign currencies. When a derivative is executed and hedge accounting is appropriate, it is designated as either a fair-value hedge, cash-flow hedge, or a net investment hedge. Currently, Linde designates all interest-rate and treasury rate locks as hedges for accounting purposes; however, currency contracts are generally not designated as hedges for accounting purposes unless they are related to forecasted transactions. Whether designated as hedges for accounting purposes or not, all derivatives are linked to an appropriate underlying exposure. On an ongoing basis, the company assesses the hedge effectiveness of all derivatives designated as hedges for accounting purposes to determine if they continue to be highly effective in offsetting changes in fair values or cash flows of the underlying hedged items. If it is determined that the hedge is not highly effective, then hedge accounting will be discontinued prospectively. Changes in the fair value of derivatives designated as fair-value hedges are recognized in earnings as an offset to the change in the fair values of the underlying exposures being hedged. 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 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. Derivatives that are entered into for risk-management purposes and are not designated as hedges (primarily related to currency derivatives other than for firm commitments) are recorded at their fair market values and recognized in current earnings. See Note 12 for additional information relating to financial instruments. Goodwill – Acquisitions are accounted for using the acquisition method which requires allocation of the purchase price to assets acquired and liabilities assumed based on estimated fair values. Any excess of the purchase price over the fair value of the assets and liabilities acquired is recorded as goodwill. Allocations of the purchase price are based on preliminary estimates and assumptions at the date of acquisition and are subject to revision based on final information received, including appraisals and other analyses which support underlying estimates. 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 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. The qualitative analysis of goodwill for the year ended December 31, 2024 showed the fair value of the reporting units substantially exceeded the carrying value, as such further analysis was not performed. See Note 9 for additional information relating to goodwill. Other Intangible Assets – Other intangible assets, primarily customer relationships, are amortized over the estimated period of benefit. The determination of the estimated period of benefit will be dependent upon the use and underlying 51 Table of Contents characteristics of the intangible asset. Linde evaluates the recoverability of its intangible assets subject to amortization when facts and circumstances indicate that the carrying value of the asset may not be recoverable. If the carrying value is not recoverable, impairment is measured as the amount by which the carrying value exceeds its estimated fair value. Fair value is generally estimated based on either appraised value or other valuation techniques. Indefinite lived intangible assets related to the Linde brand are evaluated for impairment on an annual basis or more frequently if events or circumstances indicate an impairment loss may have occurred. See Note 10 for additional information relating to other intangible assets. Income Taxes – Deferred income taxes are recorded for the temporary differences between the financial statement and tax bases of assets and liabilities using currently enacted tax rates. Valuation allowances are established against deferred tax assets whenever circumstances indicate that it is more likely than not that such assets will not be realized in future periods. Under the guidance for accounting for uncertainty in income taxes, the company can recognize the benefit of an income tax position only if it is more likely than not (greater than 50%) that the tax position will be sustained upon tax examination, based solely on the technical merits of the tax position. Otherwise, no benefit can be recognized. The tax benefits recognized are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Additionally, the company accrues interest and related penalties, if applicable, on all tax exposures for which reserves have been established consistent with jurisdictional tax laws. Interest and penalties are classified as income tax expense in the financial statements. See Note 5 for additional information relating to income taxes. Retirement Benefits – Most Linde employees participate in a form of defined benefit or contribution retirement plan, and additionally certain employees are eligible to participate in various post-employment health care and life insurance benefit plans. The cost of contribution plans is recognized in the year earned while the cost of other plans is recognized over the employees’ expected service period to the company, all in accordance with the applicable accounting standards. The funded status of the plans is recorded as an asset or liability in the consolidated balance sheets. Funding of retirement benefits varies and is in accordance with local laws and practices. See Note 16 for additional information relating to retirement programs. Share-based Compensation – The company has historically granted share-based awards which consist of stock options, restricted stock and performance-based stock. Share-based compensation expense is generally recognized on a straight-line basis over the stated vesting period. For stock awards granted to full-retirement-eligible employees, compensation expense is recognized over the period from the grant date to the date retirement eligibility is achieved. For performance-based awards, compensation expense is recognized only if it is probable that the performance condition will be achieved. See Note 15 for additional disclosures relating to share-based compensation. Reclassifications – Certain prior years’ amounts have been reclassified to conform to the current year’s presentation. Recently Issued Accounting Standards Accounting Standards Implemented in 2024 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. The adoption of this standard includes enhanced disclosure of the company's segment reporting as it relates to the CODM's title and position, how the CODM uses the reported measure of segment's profit or loss, and the inclusion of significant expense categories and amounts that are regularly provided to the CODM and included in reported segment profit or loss (See Note 18). Accounting Standards to be Implemented 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. 52 Table of Contents Disaggregation of Income Statement Expenses - In November 2024, the FASB issued guidance requiring disaggregated disclosure of income statement expenses. The new standard is effective for fiscal years beginning after December 15, 2026, and interim periods with fiscal years after December 15, 2027, 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. NOTE 2. ACQUISITIONS AND DIVESTITURES Acquisitions Acquisitions were $ 317 million, $ 953 million and $ 110 million for the years ended December 31, 2024, 2023 and 2022, respectively. Acquisitions in 2024 and 2023 primarily related to the Americas. Acquisitions in 2022 primarily related to the Americas and EMEA. 2023 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 available at the time of the acquisition and adjusted and finalized those estimates as additional information became 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 Assets: 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 fair value at January 5, 2023. Fair value represents 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. 53 Table of Contents 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 was 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 consisted 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. Divestitures Divestitures, net of cash divested and asset sales were $ 170 million, $ 70 million, and $ 195 million for the years ended December 31, 2024, 2023 and 2022, respectively. Divestiture proceeds in 2024 include $ 69 million in net proceeds for a divestiture in APAC and a settlement with a supplier in the Americas. 2022 Sale of GIST business In the third quarter of 2022, the company completed the sale of its GIST business. 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 cost reduction program and other charges in the consolidated statement of income (see Note 3). NOTE 3. COST REDUCTION PROGRAM AND OTHER CHARGES 2024 Charges Cost reduction program and other charges were $ 145 million for the year ended December 31, 2024. Costs include severance of $ 165 million, other cost reduction charges of $ 23 million, and a benefit of $ 43 million related to a divestiture in APAC. Cost reduction program and other charges for 2024 included an income tax benefit of $ 35 million. 2023 Charges Cost reduction program and 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. Cost reduction program and 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. 2022 Charges Cost reduction program 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. Russia-Ukraine Conflict In response to the Russian invasion of Ukraine, multiple jurisdictions, including Europe and the U.S., have imposed several tranches of economic sanctions on Russia. As a result, Linde reassessed its ability to control its Russian subsidiaries and determined that as of June 30, 2022 it can no longer exercise control over these entities. 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). 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 c ost reduction program and other charges in the consolidated statements of income. 54 Table of Contents 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. The investment will be monitored for impairment in future periods. Receivables, primarily loans receivable, with newly deconsolidated entities were reassessed for collectability resulting in a write-off of approximately $ 380 million. Other Russia related charges Cost reduction program and other charges related specifically to the Russia-Ukraine conflict were $ 103 million ($ 73 million after tax) for the year ended December 31, 2022, and are primarily comprised of impairments of assets which are maintained by international entities in support of the Russian business. Merger-Related Costs and Other Charges Merger-related costs and other charges were $ 139 million ($ 93 million, after tax) for the year ended December 31, 2022 , primarily related to severance actions within the Engineering segment recorded during the fourth quarter, the impairment of an equity method investment in the EMEA segment, and the sale of the GIST business completed on September 30, 2022 (see Note 2). The following table provides a summary of the pre-tax charges by reportable segment for the year ended December 31, 2022: Year Ended December 31, 2022 (millions of dollars) Russia deconsolidation charges Other Russia related charges Total Russia charges Merger-related costs and other charges Total Americas $ — $ — $ — $ 4 $ 4 EMEA 733 ( 7 ) 726 25 751 APAC — — — 28 28 Engineering 54 110 164 41 205 Other — — — 41 41 Total $ 787 $ 103 $ 890 $ 139 $ 1,029 Cash Requirements The total cash requirements of the c ost reduction program and other charges incurred for the year ended December 31, 2024 are expected to be immaterial. Remaining cash requirements are expected to be paid primarily through 2025. Cost reduction program and other charge s, net of payments in the consolidated statements of cash flows for the twelve months ended December 31, 2024 and 2023 also reflect the impact of cash payments of liabilities accrued as of December 31, 2023 and 2022, respectively. Classification in the consolidated financial statements The pre-tax charges for each year are shown within operating profit in a separate line item on the consolidated statements of income. In the consolidated balance sheets, reductions in assets are recorded against the carrying value of the related assets and unpaid amounts are recorded as other current or long-term liabilities (see Note 7). On the consolidated statements of cash flows, the pre-tax impact of these charges, net of cash payments, is shown as an adjustment to reconcile net income to net cash provided by operating activities. In Note 18 Segment Information, Linde excluded these charges from its management definition of segment operating profit; a reconciliation of segment operating profit to consolidated income before income taxes and equity investments is shown within the operating profit table. 55 Table of Contents NOTE 4. LEASES In the normal course of its business, Linde enters into various leases as the lessee, primarily involving manufacturing and distribution equipment and office space. 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, 2024 and 2023 were $ 303 million and $ 284 million, respectively. 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, 2024 and 2023 were $ 70 million and $ 58 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 . Linde includes renewal options that are reasonably certain to be exercised as part of the lease term. Operating and financing lease expenses above include short term and variable lease costs which are immaterial. As most leases do not provide an implicit rate, Linde uses the applicable incremental borrowing rate at lease commencement to measure lease liabilities and right-of-use assets. Linde determines incremental borrowing rates through market sources. The company has elected to apply the short-term lease exception for all underlying asset classes. Short-term leases are leases that, at the commencement date, have a lease term of twelve months or less and do not include a purchase option that the lessee is reasonably certain to exercise. Leases that meet the short-term lease definition are not recognized on the balance sheet, but rather expensed on a straight-line basis over the lease term. Some leasing arrangements require variable payments that are dependent on usage, output, or may vary for other reasons, such as insurance. The company does not have material variable lease payments. Gains and losses on sale and leaseback transactions were immaterial. Operating cash flows used for operating leases for the twelve months ended December 31, 2024 and 2023 were $ 249 million. Cash flows used for finance leases for the same period were immaterial. Supplemental balance sheet information related to leases is as follows: (Millions of dollars) December 31, 2024 2023 Operating Leases Operating lease right-of-use assets $ 800 $ 759 Other current liabilities 176 177 Other long-term liabilities 606 572 Total operating lease liabilities 782 749 Finance Leases Finance lease right-of-use assets 189 179 Other current liabilities 54 50 Other long-term liabilities 150 143 Total finance lease liabilities $ 204 $ 193 Supplemental operating lease information: (Millions of dollars) December 31, 2024 2023 Weighted average lease term (years) 8 8 Weighted average discount rate 4.17 % 4.19 % Future operating and finance lease payments as of December 31, 2024 are as follows (millions of dollars): 56 Table of Contents Period Operating Leases Financing Leases 2025 $ 202 $ 65 2026 164 53 2027 129 42 2028 96 28 2029 68 15 Thereafter 260 44 Total future undiscounted lease payments 919 247 Less imputed interest ( 137 ) ( 43 ) Total reported lease liability $ 782 $ 204 NOTE 5. INCOME TAXES Pre-tax income applicable to U.S. and non-U.S. operations is as follows: (Millions of dollars) Year Ended December 31, 2024 2023 2022 United States $ 2,717 $ 2,859 $ 2,502 Non-U.S. 5,852 5,129 3,041 Total income before income taxes $ 8,569 $ 7,988 $ 5,543 Provision for Income Taxes The following is an analysis of the provision for income taxes: (Millions of dollars) Year Ended December 31, 2024 2023 2022 Current tax expense (benefit) U.S. federal $ 504 $ 291 $ 486 State and local 106 116 92 Non-U.S. 1,534 1,491 1,239 2,144 1,898 1,817 Deferred tax expense (benefit) U.S. federal 3 57 ( 12 ) State and local 11 5 7 Non-U.S. ( 156 ) ( 146 ) ( 378 ) ( 142 ) ( 84 ) ( 383 ) Total income taxes $ 2,002 $ 1,814 $ 1,434 Effective Tax Rate Reconciliation Linde plc is not subject to tax in Ireland, its country of domicile. For purposes of the effective tax rate reconciliation, the company utilizes the U.S. statutory income tax rate of 21%. An analysis of the difference between the provision for income taxes and the amount computed by applying the U.S. statutory income tax rate to pre-tax income follows: 57 Table of Contents (Dollar amounts in millions) Year Ended December 31, 2024 2023 2022 U.S. statutory income tax $ 1,800 21.0 % $ 1,677 21.0 % $ 1,164 21.0 % State and local taxes – net of federal benefit 102 1.2 % 105 1.3 % 84 1.5 % Tax on Non-U.S. activities (a)(b) 186 2.2 % 169 2.1 % 176 3.2 % Share-Based compensation ( 66 ) ( 0.8 ) % ( 66 ) ( 0.8 ) % ( 41 ) ( 0.7 ) % Russia charges (Note 3) — — % — — % 108 1.9 % Other (c) ( 20 ) ( 0.2 ) % ( 71 ) ( 0.9 ) % ( 57 ) ( 1.0 ) % Provision for income taxes $ 2,002 23.4 % $ 1,814 22.7 % $ 1,434 25.9 % (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. These other items were not material. (b) 2024 includes the tax effect of Pillar II, the 15 % global minimum tax rate provisions of the OECD's framework for Pillar Two, which was not material. (c) Includes net tax benefits related to tax audit settlements of $ 54 million in 2023 and $ 71 million in 2022. In 2024, the tax effect of these items was not material. Net Deferred Tax Liabilities Net deferred tax liabilities included in the consolidated balance sheets are comprised of the following: (Millions of dollars) December 31, 2024 2023 Deferred tax liabilities Fixed assets $ 2,378 $ 2,686 Goodwill 233 215 Other intangible assets 2,638 2,872 Subsidiary/equity investments 535 586 Other (a) 736 456 $ 6,520 $ 6,815 Deferred tax assets Carryforwards $ 505 $ 285 Benefit plans and related (b)(c) 16 243 Inventory 87 82 Accruals and other (d) 827 858 $ 1,435 $ 1,468 Less: Valuation allowances (e) ( 146 ) ( 176 ) $ 1,289 $ 1,292 Net deferred tax liabilities $ 5,231 $ 5,523 Recorded in the consolidated balance sheets as (Note 7): Other long-term assets 428 226 Deferred credits 5,659 5,749 $ 5,231 $ 5,523 (a) Includes $ 235 million in 2024 and $ 221 million in 2023 related to right-of-use lease assets and includes $ 335 million in 2024 and $ 170 million in 2023 related to timing differences regarding certain engineering projects accounted for on the cost incurred input method. (b) Includes deferred tax liabilities of $ 95 million and deferred tax assets of $ 60 million in 2024 and 2023, respectively, related to pension / OPEB funded status (see Notes 7 and 16). 58 Table of Contents (c) The amounts are net of non-US deferred tax liabilities of $ 290 million in 2024 and $ 187 million in 2023. (d) Includes $ 244 million in 2024 and $ 228 million in 2023 related to lease liabilities. (e) Summary of changes in valuation allowances relating to deferred tax assets follows (millions of dollars): 2024 2023 2022 Balance, January 1, $ ( 176 ) $ ( 276 ) $ ( 235 ) Income tax (charge) benefit 26 65 ( 44 ) Other, including write-offs — 34 — Translation adjustments 4 1 3 Balance, December 31, $ ( 146 ) $ ( 176 ) $ ( 276 ) The company evaluates deferred tax assets quarterly 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. After considering the positive and negative evidence, a valuation allowance is established to reduce the assets to their realizable value when management determines that it is more likely than not (i.e., greater than 50% likelihood) that a deferred tax asset will not be realized. Considerable judgment is required in establishing deferred tax valuation allowances. As of December 31, 2024, the company had $ 505 million of deferred tax assets relating to net operating losses (“NOLs”) and tax credits and $ 146 million of valuation allowances. These deferred tax assets include $ 461 million relating to NOLs, of which $ 57 million expire within 5 years, $ 18 million expire after 5 years, and $ 386 million have no expiration. The deferred tax assets also include $ 44 million related to credits of which $ 3 million expire within 5 years, $ 38 million expire after 5 years, and $ 3 million have no expiration. The valuation allowances of $ 146 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 $ 535 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 or withholding taxes at December 31, 2024 on approximately $ 5 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 Unrecognized income tax benefits represent income tax positions taken on income tax returns but not yet recognized in the consolidated financial statements. The company has unrecognized income tax benefits totaling $ 292 million, $ 304 million and $ 325 million as of December 31, 2024, 2023, and 2022, respectively. 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: (Millions of dollars) 2024 2023 2022 Unrecognized income tax benefits, January 1 $ 304 $ 325 $ 387 Additions for tax positions of prior years 19 108 26 Reductions for tax positions of prior years (a) ( 9 ) ( 121 ) ( 45 ) Additions for current year tax positions 11 — — Reductions for settlements with taxing authorities ( 12 ) ( 1 ) ( 23 ) Other (b) ( 21 ) ( 7 ) ( 20 ) Unrecognized income tax benefits, December 31 $ 292 $ 304 $ 325 (a) 2023 and 2022 amounts are primarily related to the closure of tax audits. (b) Other includes reductions for statute of limitation lapses and foreign currency translation. The company classifies interest income and expense related to income taxes as tax expense in the consolidated statements of income. The company recognized net interest expense of $ 3 million and net interest benefit of $ 17 million and of $ 3 million for the years ended December 31, 2024, 2023, and 2022, respectively. The company had $ 16 million and $ 14 59 Table of Contents million of accrued interest and penalties as of December 31, 2024 and 2023, respectively, which were recorded in other long-term liabilities in the consolidated balance sheets (See Note 7). As of December 31, 2024, the company remained subject to examination in the following major tax jurisdictions for the tax years as indicated below: Major tax jurisdictions Open Years Americas United States 2021 through 2024 Canada 2014 through 2024 Mexico 2014 through 2024 Brazil 2008 through 2024 EMEA France 2020 through 2024 Germany 2018 through 2024 United Kingdom 2022 through 2024 APAC Australia 2020 through 2024 China 2019 through 2024 India 2006 through 2024 South Korea 2020 through 2024 The company is currently under audit in a number of jurisdictions. As a result, it is reasonably possible that some of these matters will conclude or reach the stage where a change in unrecognized income tax benefits may occur within the next twelve months. At the time new information becomes available, the company will record any adjustment to income tax expense as required. Final determinations, if any, are not expected to be material to the consolidated financial statements. The company is also subject to income taxes in many hundreds of state and local taxing jurisdictions that are open to tax examinations. NOTE 6. EARNINGS PER SHARE – LINDE PLC SHAREHOLDERS Basic and Diluted earnings per share - Linde plc shareholders is computed by dividing Net income – Linde plc for the period by the weighted average number of either basic or diluted shares outstanding, as follows: 2024 2023 2022 Numerator (Millions of dollars) Net Income – Linde plc $ 6,565 $ 6,199 $ 4,147 Denominator (Thousands of shares) Weighted average shares outstanding 477,998 487,656 499,254 Shares earned and issuable under compensation plans 775 535 482 Weighted average shares used in basic earnings per share 478,773 488,191 499,736 Effect of dilutive securities Stock options and awards 3,319 4,099 4,302 Weighted average shares used in diluted earnings per share 482,092 492,290 504,038 Basic Earnings Per Share $ 13.71 $ 12.70 $ 8.30 Diluted Earnings Per Share $ 13.62 $ 12.59 $ 8.23 The weighted-average of antidilutive securities excluded from the calculation of diluted earnings per share was 268 thousand for the twelve months ended December 31, 2024. There were no antidilutive securities in the respective 2023 and 2022 periods. 60 Table of Contents NOTE 7. SUPPLEMENTAL INFORMATION Income Statement (Millions of dollars) Year Ended December 31, 2024 2023 2022 Selling, General and Administrative Selling $ 1,333 $ 1,330 $ 1,295 General and administrative 2,004 1,965 1,812 $ 3,337 $ 3,295 $ 3,107 Year Ended December 31, 2024 2023 2022 Depreciation and Amortization (a) Depreciation $ 3,226 $ 3,266 $ 3,633 Amortization of intangibles (Note 10) 554 550 571 Depreciation and Amortization $ 3,780 $ 3,816 $ 4,204 Year Ended December 31, 2024 2023 2022 Other Income (Expenses) – Net Currency related net gains (losses) $ ( 11 ) $ ( 47 ) $ ( 18 ) Partnership income 3 2 18 Severance expense ( 16 ) ( 12 ) ( 13 ) Asset divestiture gains (losses) – net 60 6 ( 9 ) Insurance recoveries 45 10 2 Other – net gains (losses) 104 — ( 42 ) $ 185 $ ( 41 ) $ ( 62 ) Year Ended December 31, 2024 2023 2022 Interest Expense – Net Interest incurred on debt and other $ 555 $ 480 $ 277 Interest income ( 228 ) ( 197 ) ( 117 ) Amortization on acquired debt ( 3 ) ( 16 ) ( 35 ) Interest capitalized ( 68 ) ( 67 ) ( 62 ) $ 256 $ 200 $ 63 Balance Sheet (Millions of dollars) December 31, 2024 2023 Accounts Receivable Trade and Other receivables $ 5,043 $ 5,175 Less: allowance for expected credit losses ( 421 ) ( 457 ) $ 4,622 $ 4,718 Receivables Linde applies loss rates that are lifetime expected credit losses at initial recognition of the receivables. These expected loss rates are based on an analysis of the actual historical default rates for each business, taking regional circumstances into account. If necessary, these historical default rates are adjusted to reflect the impact of current changes in the macroeconomic environment using forward-looking information. The loss rates are also evaluated based on the expectations of the responsible management team regarding the collectability of the receivables. Gross trade receivables aged less than one year were $ 4,573 million and $ 4,667 million at December 31, 2024 and December 31, 2023, 61 Table of Contents respectively, and gross receivables aged greater than one year were $ 322 million and $ 354 million at December 31, 2024 and December 31, 2023, respectively. Gross other receivables were $ 148 million and $ 154 million at December 31, 2024 and December 31, 2023, respectively. Receivables aged greater than one year are generally fully reserved unless specific circumstances warrant exceptions, such as those backed by federal governments. Provisions for expected credit losses were $ 180 million, $ 175 million and $ 163 million for the twelve months ended December 31, 2024, 2023 and 2022, respectively. The allowance activity in the twelve months ended December 31, 2024 related to write-offs of uncollectible amounts, net of recoveries and currency movements is not material. December 31, 2024 2023 Inventories Raw materials and supplies $ 529 $ 614 Work in process 371 390 Finished goods 1,046 1,111 $ 1,946 $ 2,115 December 31, 2024 2023 Prepaid and Other Current Assets Prepaid and other deferred charges (b) $ 579 $ 583 VAT recoverable 177 178 Unrealized gains on derivatives (Note 12) 302 73 Other (c) 206 93 $ 1,264 $ 927 December 31, 2024 2023 Other Long-term Assets Pension assets (Note 16) $ 1,106 $ 380 Insurance contracts (d) 32 38 Long-term receivables, net (e) 28 163 Lease assets (Note 4) 989 938 Deposits 73 76 Investments carried at cost (f) (Note 17) 106 187 Deferred charges 58 60 Deferred income taxes (Note 5) 428 226 Unrealized gains on derivatives (Note 12) 4 8 Other 206 223 $ 3,030 $ 2,299 62 Table of Contents December 31, 2024 2023 Other Current Liabilities Accrued expenses $ 1,321 $ 1,494 Payroll 618 678 VAT payable 256 253 Pension and postretirement (Note 16) 37 31 Interest payable 227 129 Lease liability (Note 4) 230 227 Insurance reserves 20 21 Unrealized losses on derivatives (Note 12) 92 41 Cost reduction programs and other charges (Note 3) 175 146 Other 950 1,136 $ 3,926 $ 4,156 Payables Linde has agreements to provide supplier finance programs which facilitate participating suppliers' ability to finance payment obligations of the company with designated third-party financial institutions. The outstanding payment obligations under the company’s supplier finance programs are included in the consolidated balance sheets and were not material as of December 31, 2024 or 2023. December 31, 2024 2023 Other Long-term Liabilities Pension and postretirement (Note 16) $ 519 $ 693 Tax liabilities for uncertain tax positions (Note 5) 210 216 Tax Act liabilities (g) — 80 Lease liability (Note 4) 756 715 Interest and penalties for uncertain tax positions (Note 5) 16 14 Insurance reserves 60 54 Asset retirement obligation 305 305 Unrealized losses on derivatives (Note 12) 9 6 Cost reduction programs and other charges (Note 3) 66 68 Contingent liabilities (Note 17) 1,646 1,148 Other 428 505 $ 4,015 $ 3,804 December 31, 2024 2023 Deferred Credits Deferred income taxes (Note 5) $ 5,659 $ 5,749 Contract liabilities (Note 19) 1,098 1,049 $ 6,757 $ 6,798 63 Table of Contents December 31, 2024 2023 Accumulated Other Comprehensive Income (Loss) Cumulative translation adjustment - net of taxes: Americas (h) $ ( 4,422 ) $ ( 3,618 ) EMEA (h) ( 1,235 ) ( 737 ) APAC (h) ( 1,736 ) ( 1,037 ) Engineering ( 432 ) ( 93 ) Other 858 113 ( 6,967 ) ( 5,372 ) Derivatives – net of taxes ( 6 ) 7 Pension/OPEB funded status obligation (net of $ 95 million tax obligation in 2024 and $ 60 million tax benefit in 2023) (Note 16) 79 ( 440 ) $ ( 6,894 ) $ ( 5,805 ) (a) Depreciation and amortization expense in 2024 include $ 467 million and $ 456 million, respectively, of Linde AG purchase accounting impacts. In 2023, depreciation and amortization expense include $ 529 million and $ 462 million, respectively, of Linde AG purchase accounting impacts. (b) Includes estimated income tax payments of $ 221 million in 2024 and $ 173 million in 2023. (c) In 2024, the amounts relate primarily to current notes receivables from the sale of GIST. (d) Consists primarily of insurance contracts and other investments to be utilized for non-qualified pension and OPEB obligations. (e) The balances at December 31, 2024 and 2023 are net of reserves of $ 36 million and $ 42 million, respectively. In 2023, the amounts relate primarily to long-term notes receivable from customers in APAC, government receivables in Brazil and receivables from the sale of GIST. (f) Includes investments from the deconsolidation of Russian subsidiaries. (g) 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. In 2024, the final annual installment was reclassified to accrued taxes. (h) Americas consists of currency translation adjustments primarily in Canada, Mexico, and Brazil. EMEA relates primarily to Germany, the U.K., the Netherlands, Norway and Sweden. APAC relates primarily to China, South Korea, India, and Australia. NOTE 8. PROPERTY, PLANT AND EQUIPMENT – NET Significant classes of property, plant and equipment are as follows: (Millions of dollars) December 31, Depreciable Lives (Yrs) 2024 2023 Production plants (primarily 15-year life) (a) 10 - 20 $ 35,364 $ 33,071 Storage tanks 15 - 20 5,689 5,445 Transportation equipment and other 3 - 15 4,210 4,050 Cylinders 10 - 30 4,970 4,993 Buildings 25 - 40 3,355 3,275 Land and improvements (b) 0 - 20 1,045 1,087 Construction in progress 4,086 3,404 58,719 55,325 Less: accumulated depreciation ( 33,944 ) ( 30,773 ) $ 24,775 $ 24,552 (a) Depreciable lives of production plants related to long-term customer supply contracts are generally consistent with the contract lives. 64 Table of Contents (b) Land is not depreciated. NOTE 9. GOODWILL Changes in the carrying amount of goodwill for the years ended December 31, 2024 and 2023 were as follows: (Millions of dollars) Americas EMEA APAC Engineering Other Total Balance, December 31, 2022 $ 9,136 $ 9,492 $ 4,550 $ 2,349 $ 290 $ 25,817 Acquisitions (Note 2) 550 — 3 — — 553 Foreign currency translation and other 17 347 ( 54 ) 73 3 386 Disposals — ( 5 ) — — — ( 5 ) Balance, December 31, 2023 9,703 9,834 4,499 2,422 293 26,751 Acquisitions (Note 2) 191 — 17 — — 208 Foreign currency translation and other ( 56 ) ( 538 ) ( 253 ) ( 150 ) ( 21 ) ( 1,018 ) Disposals (Note 2) — — ( 4 ) — — ( 4 ) Balance, December 31, 2024 $ 9,838 $ 9,296 $ 4,259 $ 2,272 $ 272 $ 25,937 Linde performs its goodwill impairment tests annually as of October 1 or more frequently if events or circumstances indicate that an impairment loss may have been incurred. For the fourth quarter 2024 test, the company applied the FASB's accounting guidance which allows the company to first assess qualitative factors to determine the extent of additional quantitative analysis, if any, that may be required to test goodwill for impairment. Based on the qualitative assessments performed, the company concluded that it was more likely than not that the fair value of each reporting unit substantially exceeded its carrying value and therefore, further quantitative analysis was not required. As a result, no impairment was recorded. There were no indicators of impairment since the annual goodwill impairment test was performed through December 31, 2024. NOTE 10. OTHER INTANGIBLE ASSETS The following is a summary of Linde’s other intangible assets at December 31, 2024 and 2023: (Millions of dollars) For the year ended December 31, 2024 Customer Relationships Brands/Tradenames Other Intangible Assets Total Cost: Balance, December 31, 2023 $ 11,479 $ 2,609 $ 1,913 $ 16,001 Additions 22 — 28 50 Foreign currency translation ( 530 ) ( 107 ) ( 113 ) ( 750 ) Disposals ( 10 ) ( 2 ) ( 48 ) ( 60 ) Other * 11 4 154 169 Balance, December 31, 2024 10,972 2,504 1,934 15,410 Less: accumulated amortization: Balance, December 31, 2023 ( 2,270 ) ( 233 ) ( 1,099 ) ( 3,602 ) Amortization expense (Note 7) ( 416 ) ( 36 ) ( 102 ) ( 554 ) Foreign currency translation 116 5 66 187 Disposals 2 — 42 44 Other * ( 3 ) ( 1 ) ( 151 ) ( 155 ) Balance, December 31, 2024 ( 2,571 ) ( 265 ) ( 1,244 ) ( 4,080 ) Net Balance, December 31, 2024 $ 8,401 $ 2,239 $ 690 $ 11,330 65 (Millions of dollars) For the year ended December 31, 2023 Customer Relationships Brands/Tradenames Other Intangible Assets Total Cost: Balance, December 31, 2022 $ 11,062 $ 2,565 $ 1,697 $ 15,324 Additions 258 6 50 314 Foreign currency translation 185 38 41 264 Disposals ( 3 ) — ( 20 ) ( 23 ) Other * ( 23 ) — 145 122 Balance, December 31, 2023 11,479 2,609 1,913 16,001 Less: accumulated amortization: Balance, December 31, 2022 ( 1,841 ) ( 196 ) ( 867 ) ( 2,904 ) Amortization expense (Note 7) ( 423 ) ( 36 ) ( 91 ) ( 550 ) Foreign currency translation ( 36 ) ( 1 ) ( 24 ) ( 61 ) Disposals — — 21 21 Other * 30 — ( 138 ) ( 108 ) Balance, December 31, 2023 ( 2,270 ) ( 233 ) ( 1,099 ) ( 3,602 ) Net balance at December 31, 2023 $ 9,209 $ 2,376 $ 814 $ 12,399 *Other primarily relates to the write-off of fully amortized assets and reclassifications. There are no expected residual values related to these intangible assets. Amortization expense for the years ended December 31, 2024, 2023 and 2022 was $ 554 million, $ 550 million and $ 571 million, respectively. The remaining weighted-average amortization period for intangible assets is approximately 23 years. Total estimated annual amortization expense related to finite-lived intangibles is as follows: (Millions of dollars) 2025 $ 570 2026 554 2027 545 2028 528 2029 525 Thereafter 6,958 Total amortization related to finite-lived intangible assets 9,680 Indefinite-lived intangible assets at December 31, 2024 1,650 Net intangible assets at December 31, 2024 $ 11,330 NOTE 11. DEBT The following is a summary of Linde’s outstanding debt at December 31, 2024 and 2023 : 66 Table of Contents (Millions of dollars) December 31, 2024 2023 SHORT-TERM Commercial paper $ 3,964 $ 4,483 Other bank borrowings (primarily non U.S.) 259 230 Total short-term debt 4,223 4,713 LONG-TERM (a) (U.S. dollar denominated unless otherwise noted) 1.20 % Euro denominated notes due 2024 (c) — 607 1.875 % Euro denominated notes due 2024 (b,e) — 332 4.800 % Notes due 2024 (g) — 300 4.700 % Notes due 2025 599 599 2.65 % Notes due 2025 400 399 1.625 % Euro denominated notes due 2025 517 550 3.625 % Euro denominated notes due 2025 517 551 0.00 % Euro denominated notes due 2026 726 774 3.20 % Notes due 2026 725 724 3.434 % Notes due 2026 199 198 1.652 % Euro denominated notes due 2027 84 90 0.250 % Euro denominated notes due 2027 776 827 1.00 % Euro denominated notes due 2027 519 553 1.00 % Euro denominated notes due 2028 (b) 742 780 3.00 % Euro denominated notes due 2028 (d) 722 — 3.375 % Euro denominated notes due 2029 773 824 1.10 % Notes due 2030 697 697 1.90 % Euro denominated notes due 2030 106 114 3.375 % Euro denominated notes due 2030 (f) 772 — 1.375 % Euro denominated notes due 2031 779 829 3.20 % Euro denominated notes due 2031 (d) 878 — 0.550 % Euro denominated notes due 2032 772 823 0.375 % Euro denominated notes due 2033 512 546 3.625 % Euro denominated notes due 2034 670 714 3.50 % Euro denominated notes due 2034 (f) 769 — 1.625 % Euro denominated notes due 2035 822 876 3.40 % Euro denominated notes due 2036 (d) 718 — 3.55 % Notes due 2042 666 666 3.75 % Euro denominated notes due 2044 (f) 712 — 2.00 % Notes due 2050 297 296 1.00 % Euro denominated notes due 2051 707 755 Other 10 10 Non U.S. borrowings 214 226 17,400 14,660 Less: current portion of long-term debt ( 2,057 ) ( 1,263 ) Total long-term debt 15,343 13,397 Total debt $ 21,623 $ 19,373 67 Table of Contents (a) Amounts are net of unamortized discounts, premiums and/or debt issuance costs as applicable. (b) December 31, 2024 and December 31, 2023 included a cumulative $ 32 million and $ 46 million adjustment to carrying value, respectively, related to hedge accounting of interest rate swaps, including related terminations. Refer to Note 12. (c) In February 2024, Linde repaid € 550 million of 1.20 % notes that became due. (d) 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. (e) In May 2024, Linde repaid € 300 million of 1.875 % notes that became due. (f) In June 2024, Linde issued € 750 million of 3.375 % notes due in 2030, € 750 million of 3.500 % notes due in 2034 and € 700 million of 3.750 % notes due in 2044. (g) In December 2024, Linde repaid $ 300 million of 4.800 % notes that became due. Credit Facilities On December 7, 2022, the company and certain of its subsidiaries entered into an amended and restated unsecured revolving credit agreement (the “ Five Year Credit Agreement”) with a syndicate of banking institutions. The Five Year Credit Agreement provides for total commitments of $ 5.0 billion, which may be increased up to $ 6.5 billion, subject to receipt of additional commitments and satisfaction of customary conditions. There are no financial maintenance covenants contained within the Credit Agreement. The revolving credit facility expires on December 7, 2027 with the option to request two one-year extensions of the expiration date. In addition, on December 4, 2024, the company and certain of its subsidiaries entered into an unsecured 364 -day revolving credit agreement (the “ 364 -Day Credit Agreement” and, together with the Five Year Credit Agreement, the “Credit Agreements”) with a syndicate of banking institutions. The 364 -Day Credit Agreement provides for total commitments of $ 1.5 billion. There are no financial maintenance covenants contained within the Credit Agreement. The 364 -Day Credit Agreement expires on December 3, 2025 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, 2024. Other Debt Information The weighted-average interest rates of short-term borrowings outstanding were 3.8 % and 4.8 % as of December 31, 2024 and 2023, respectively. Expected maturities of long-term debt are as follows: (Millions of dollars) 2025 $ 2,057 2026 1,670 2027 1,391 2028 1,547 2029 785 Thereafter 9,950 $ 17,400 As of December 31, 2024, the amount of Linde's assets pledged as collateral was immaterial. See Note 13 for the fair value information related to debt. NOTE 12. FINANCIAL INSTRUMENTS In its normal operations, Linde is exposed to market risks relating to fluctuations in interest rates, foreign currency exchange rates, energy and commodity costs. The objective of financial risk management at Linde is to minimize the negative impact of such fluctuations on the company’s earnings and cash flows. To manage these risks, among other strategies, Linde routinely enters into various derivative financial instruments (“derivatives”) including interest-rate swap and treasury rate lock agreements, currency-swap agreements, forward contracts, currency options, and commodity-swap 68 Table of Contents agreements. These instruments are not entered into for trading purposes and Linde only uses commonly traded and non-leveraged instruments. There are three types of derivatives that the company enters into: (i) those relating to fair-value exposures, (ii) those relating to cash-flow exposures, and (iii) those relating to foreign currency net investment exposures. Fair-value exposures relate to recognized assets or liabilities, and firm commitments; cash-flow exposures relate to the variability of future cash flows associated with recognized assets or liabilities, or forecasted transactions; and net investment exposures relate to the impact of foreign currency exchange rate changes on the carrying value of net assets denominated in foreign currencies. When a derivative is executed and hedge accounting is appropriate, it is designated as either a fair-value hedge, cash-flow hedge, or a net investment hedge. Currently, Linde designates all interest-rate and treasury rate locks as hedges for accounting purposes; however, cross-currency contracts are generally not designated as hedges for accounting purposes. Certain currency contracts related to forecasted transactions are designated as hedges for accounting purposes. Whether designated as hedges for accounting purposes or not, all derivatives are linked to an appropriate underlying exposure. On an ongoing basis, the company assesses the hedge effectiveness of all derivatives designated as hedges for accounting purposes to determine if they continue to be highly effective in offsetting changes in fair values or cash flows of the underlying hedged items. If it is determined that the hedge is not highly effective, through the use of a qualitative assessment, then hedge accounting will be discontinued prospectively. Counterparties to Linde’s derivatives are major banking institutions with credit ratings of investment grade or better. The company has Credit Support Annexes ("CSAs") in place for certain entities with their principal counterparties to minimize potential default risk and to mitigate counterparty risk. Under the CSAs, the fair values of derivatives for the purpose of interest rate and currency management are collateralized with cash on a regular basis. As of December 31, 2024, the impact of such collateral posting arrangements on the fair value of derivatives was insignificant. Management believes the risk of incurring losses on derivative contracts related to credit risk is remote and any losses would be immaterial. The following table is a summary of the notional amount and fair value of derivatives outstanding at December 31, 2024 and 2023 for consolidated subsidiaries: Fair Value (Millions of dollars) Notional Amounts Assets (a) Liabilities (a) December 31, 2024 2023 2024 2023 2024 2023 Derivatives Not Designated as Hedging Instruments: Currency contracts: Balance sheet items $ 9,935 $ 4,567 $ 256 $ 46 $ 64 $ 26 Forecasted transactions 168 335 2 11 6 6 Total $ 10,103 $ 4,902 $ 258 $ 57 $ 70 $ 32 Derivatives Designated as Hedging Instruments: Currency contracts: Forecasted transactions $ 780 $ 749 $ 7 $ 20 $ 11 $ 4 Forward exchange contracts 1,059 — 30 — — — Commodity contracts N/A N/A 11 3 20 7 Interest rate swaps — 1,214 — 1 — 4 Total Hedges $ 1,839 $ 1,963 $ 48 $ 24 $ 31 $ 15 Total Derivatives $ 11,942 $ 6,865 $ 306 $ 81 $ 101 $ 47 (a) Amounts at December 31, 2024 and 2023, respectively, included current assets of $ 302 million and $ 73 million, which are recorded in prepaid and other current assets; long-term assets of $ 4 million and $ 8 million, which are recorded in other long-term assets; current liabilities of $ 92 million and $ 41 million, which are recorded in other current liabilities; and long-term liabilities of $ 9 million and $ 6 million, which are recorded in other long-term liabilities. In addition, during 2024, Linde issued credit default swaps (“CDS”) to third-party financial institutions. The CDS relate to secured borrowings provided by the financial institutions to a government customer in Mexico, that were utilized to pay certain of Linde’s outstanding receivables. The notional amount of the CDS, which was $ 198 million and $ 60 million for the two programs as of December 31, 2024, will reduce on a monthly basis over their respective 24 -month and 22 -month terms. As of December 31, 2024, the fair value of both derivative liabilities were not material. 69 Table of Contents Balance Sheet Items Foreign currency contracts related to balance sheet items consist of forward contracts entered into to manage the exposure to fluctuations in foreign-currency exchange rates on recorded balance sheet assets and liabilities denominated in currencies other than the functional currency of the related operating unit. Certain forward currency contracts are entered into to protect underlying monetary assets and liabilities denominated in foreign currencies from foreign exchange risk and are not designated as hedging instruments. For balance sheet items that are not designated as hedging instruments, the fair value adjustments on these contracts are offset by the fair value adjustments recorded on the underlying monetary assets and liabilities. Forecasted Transactions Foreign currency contracts related to forecasted transactions consist of forward contracts entered into to manage the exposure to fluctuations in foreign-currency exchange rates on (1) forecasted purchases of capital-related equipment and services, (2) forecasted sales, or (3) other forecasted cash flows denominated in currencies other than the functional currency of the related operating units. 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 associat ed purchase. 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 . Commodity Contracts Commodity contracts are entered into to manage the exposure to fluctuations in commodity prices, which arise in the normal course of business from its procurement transactions. To reduce the extent of this risk, Linde enters into a limited number of electricity, natural gas, and propane gas derivatives. 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 Foreign Currency-Denominated Debt Designations As of December 31, 2024, Linde has € 17.9 billion ($ 19.0 billion) Euro-denominated notes and intercompany loans, ¥ 3.7 billion ($ 0.5 billion) CNY-denominated intercompany loans, and C$ 1.4 billion ($ 1.0 billion) CAD-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 the cumulative translation adjustment component of accumulated other comprehensive income (loss) in the consolidated balance sheet is $ 1,220 million (deferred gain of $ 1,175 million in the consolidated statement of comprehensive income for the year ended December 31, 2024), which is largely offset by an offsetting loss or gain on the underlying foreign net investment being hedged. Foreign Currency Forward Exchange Contract Designations In 2024, the Company entered into forward exchange contracts to partially hedge its net investment in certain foreign-denominated subsidiaries. The Company assesses the forward exchange contracts used as net investment hedges under the spot method. This results in the difference between the spot rate and the forward rate of the forward exchange contract being excluded from the assessment of hedge effectiveness and recorded as incurred as a reduction in interest expense - net in the consolidated statements of income. Since hedge inception and for the year ended December 31, 2024, the deferred gain recorded within the cumulative translation adjustment component of accumulated other comprehensive income (loss) in the consolidated balance sheet is $ 30 million, which is largely offset by an offsetting loss or gain on the underlying foreign net investment being hedged. The amount of net interest income recorded in 2024 for all forward exchange contracts was immaterial. Effects of Previous Hedge Designations As of December 31, 2024, 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. Interest Rate Swaps 70 Table of Contents Linde has historically used interest rate swaps to hedge the exposure to changes in the fair value of financial assets and financial liabilities as a result of interest rate changes. When used, these interest rate swaps would effectively convert fixed-rate interest exposures to variable rates; fair value adjustments were 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). In addition, as of December 31, 2023, Linde was 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 had designated this as a cash flow hedge. The interest rate swaps were terminated during the first quarter of 2024 with the February debt issuance and the settlement values were immaterial . Derivatives Impact on Consolidated Statements of Income The following table summarizes the impact of the company's derivatives on the consolidated statements of income: (Millions of dollars) Amount of Pre-Tax Gain (Loss) Recognized in Earnings * Year Ended December 31, 2024 2023 2022 Derivatives Not Designated as Hedging Instruments Currency contracts: Balance sheet items: Debt-related $ 88 $ 91 $ 12 Other balance sheet items — ( 1 ) 8 Total $ 88 $ 90 $ 20 * The gains (losses) on balance sheet items are offset by gains (losses) recorded on the underlying hedged assets and liabilities. Accordingly, the gains (losses) for the derivatives and the underlying hedged assets and liabilities related to debt items are recorded in the consolidated statements of income as interest expense-net. 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 statements of income were not material for the years ended December 31, 2024, 2023, and 2022. Net impacts expected to be reclassified to earnings during the next twelve months are also not material. NOTE 13. FAIR VALUE DISCLOSURES The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels as follows: Level 1 – quoted prices in active markets for identical assets or liabilities Level 2 – quoted prices for similar assets and liabilities in active markets or inputs that are observable Level 3 – inputs that are unobservable (for example, cash flow modeling inputs based on assumptions) Assets and Liabilities Measured at Fair Value on a Recurring Basis The following table summarizes assets and liabilities measured at fair value on a recurring basis at December 31, 2024 and 2023: Fair Value Measurements Using (Millions of dollars) Level 1 Level 2 Level 3 2024 2023 2024 2023 2024 2023 Assets Derivative assets $ — $ — $ 306 $ 81 $ — $ — Investments and securities * 16 16 — — 12 12 Total $ 16 $ 16 $ 306 $ 81 $ 12 $ 12 Liabilities Derivative liabilities $ — $ — $ 101 $ 47 $ — $ — * Investments and securities are recorded in prepaid and other current assets and other long-term assets in the company's consolidated balance sheets. 71 Table of Contents Level 1 investments and securities are marketable securities traded on an exchange. Level 2 investments are based on market prices obtained from independent brokers or determined using quantitative models that use as their basis readily observable market parameters that are actively quoted and can be validated through external sources, including third-party pricing services, brokers and market transactions. 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. In order to reflect current market conditions, Linde proportionally adjusts these by observable market data (stock exchange prices) or current transaction prices. Changes in level 3 investments and securities were immaterial. The fair value of cash and cash equivalents, short-term debt, accounts receivable-net, and accounts payable approximate carrying value because of the short-term maturities of these instruments. 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 Level 2 of the fair value hierarchy. At December 31, 2024, the estimated fair value of Linde’s long-term debt portfolio was $ 16,234 million versus a carrying value of $ 17,400 million. 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. Differences between the carrying value and the fair value are attributable to fluctuations in interest rates subsequent to when the debt was issued and relative to stated coupon rates. NOTE 14. EQUITY AND NONCONTROLLING INTERESTS 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, 2024 and 2023, 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. At December 31, 2024 there were 490,766,972 and 473,236,732 of Linde plc ordinary shares issued and outstanding, respectively. At December 31, 2024 there were no shares of A ordinary shares, deferred shares or preferred shares issued or outstanding. At December 31, 2023 there were 490,766,972 and 482,445,145 of Linde plc ordinary shares issued and outstanding, respectively. At December 31, 2023, there were no shares of A ordinary shares, deferred shares or preferred shares issued or outstanding. Linde’s Board of Directors may from time to time authorize the issuance of one or more series of preferred stock and, in connection with the creation of such series, determine the characteristics of each such series including, without limitation, the preference and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions of the series. Other Linde plc Ordinary Share and Treasury Share Transactions Linde may issue new ordinary shares for dividend reinvestment and stock purchase plans and employee savings and incentive plans. No new ordinary shares were issued in 2024, 2023 and 2022. 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. On February 28, 2022, the company's board of directors authorized a new share repurchase program for up to $ 10.0 billion of its ordinary shares ("2022 program") under which Linde had repurchased 29,552,394 shares through December 31, 2024. Linde completed the repurchases under this program in the second quarter of 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 repurchased $ 3.1 billion as of December 31, 2024. This 72 Table of Contents 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 Note 3). Redeemable Noncontrolling Interests Noncontrolling interests with redemption features, such as put/sell options, that are not solely within the company’s control (“redeemable noncontrolling interests”) are reported separately in the consolidated balance sheets at the greater of carrying value or redemption value. For redeemable noncontrolling interests that are not yet exercisable, Linde calculates the redemption value by accreting the carrying value to the redemption value over the period until exercisable. If the redemption value is greater than the carrying value, any increase is adjusted directly to retained earnings and does not impact net income. At December 31, 2024 and 2023, the redeemable noncontrolling interest balance includes an industrial gas business in EMEA where the noncontrolling shareholders have put options. NOTE 15. SHARE-BASED COMPENSATION Share-based compensation expense was $ 160 million in 2024 ($ 141 million and $ 107 million in 2023 and 2022, respectively). The related income tax benefit recognized was $ 88 million in 2024 ($ 88 million and $ 64 million in 2023 and 2022, respectively). The expense was primarily recorded in selling, general and administrative expenses and no share-based compensation expense was capitalized. Summary of Plans 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. 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. As of December 31, 2024, 7,149,967 shares remained available for equity grants under the 2021 Plan, of which 2,226,852 shares may be granted as awards other than options or stock appreciation rights. Exercise prices for options granted under the 2021 Plan may not be less than the closing market price of the company’s ordinary shares on the date of grant and granted options may not be re-priced or exchanged without shareholder approval. Options granted under the 2021 Plan subject only to time vesting requirements may become partially exercisable after a minimum of one year after the date of grant but may not become fully exercisable until at least three years have elapsed from the date of grant, and all options have a maximum duration of ten years. In order to satisfy option exercises and other equity grants, the company may issue authorized but previously unissued shares or it may issue treasury shares. Stock Option Fair Value The company utilizes the Black-Scholes Options-Pricing Model to determine the fair value of stock options consistent with that used in prior years. Management is required to make certain assumptions with respect to selected model inputs, including anticipated changes in the underlying stock price (i.e., expected volatility) and option exercise activity (i.e., expected life). Expected volatility is based on the historical volatility of the company’s stock over the most recent period commensurate with the estimated expected life of the company’s stock options and other factors. The expected life of options granted, which represents the period of time that the options are expected to be outstanding, is based primarily on historical exercise experience. The expected dividend yield is based on the company’s most recent history and expectation of dividend payouts. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for a period commensurate with the estimated expected life. If factors change and result in different assumptions in future periods, the stock option expense that the company records for future grants may differ significantly from what the company has recorded in the current period. The weighted-average fair value of options granted during 2024 was $ 112.63 ($ 83.69 in 2023 and $ 45.07 in 2022) based on the Black-Scholes Options-Pricing model. The increase in the grant date fair value year-over-year is primarily attributable to the increase in the stock price. The following weighted-average assumptions were used to value the grants in 2024, 2023 and 2022: 73 Table of Contents Year Ended December 31, 2024 2023 2022 Dividend yield 1.2 % 1.4 % 1.7 % Volatility 22.5 % 22.0 % 20.6 % Risk-free interest rate 4.01 % 4.23 % 1.70 % Expected term years 5 5 5 The following table summarizes option activity under the plans as of December 31, 2024 and changes during the period then ended (averages are calculated on a weighted basis; life in years; intrinsic value expressed in millions): Activity Number of Options (000’s) Average Exercise Price Average Remaining Life Aggregate Intrinsic Value Outstanding at January 1, 2024 5,825 $ 180.58 Granted 310 465.27 Exercised ( 1,085 ) 146.21 Cancelled or expired ( 27 ) 397.03 Outstanding at December 31, 2024 5,023 $ 204.50 4.6 $ 1,090 Exercisable at December 31, 2024 4,356 $ 176.78 4.0 $ 1,054 The aggregate intrinsic value represents the difference between the company’s closing stock price of $ 418.67 as of December 31, 2024 and the exercise price multiplied by the number of in the money options outstanding as of that date. The total intrinsic value of stock options exercised during 2024 was $ 327 million ($ 283 million and $ 176 million in 2023 and 2022, respectively). Cash received from option exercises under all share-based payment arrangements for 2024 was $ 31 million ($ 33 million and $ 36 million in 2023 and 2022, respectively). The cash tax benefit realized from share-based compensation totaled $ 89 million for 2024 ($ 86 million and $ 61 million cash tax benefit in 2023 and 2022, respectively). As of December 31, 2024, $ 21 million of unrecognized compensation cost related to non-vested stock options is expected to be recognized over a weighted-average period of approximately 1 year. Performance-Based and Restricted Stock Unit Awards In 2024, the company granted 301,358 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 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. Compensation expense related to these awards is recognized over the three-year performance period based on the fair value of the closing market price of the company’s ordinary shares on the date of the grant and the estimated performance that will be achieved. Compensation expense for ROC awards will be adjusted during the three-year performance period based upon the estimated performance levels that will be achieved. TSR awards are measured at their grant date fair value and not subsequently re-measured. The number of performance-based stock unit awards granted in 2024 includes an increase of 177,383 stock units to the target number of performance-based awards originally granted in 2021, as these awards achieved a higher payout factor upon completion of the three-year performance period. The weighted-average fair value of ROC awards granted in 2024 was $ 450.53 ($ 340.80 in 2023 and $ 257.63 in 2022). These fair values are based on the closing market price of Linde's ordinary shares on the grant date adjusted for dividends that will not be paid during the vesting period. The weighted-average fair value of TSR awards granted in 2024 was $ 664.77 ($ 489.33 in 2023 and $ 301.42 in 2022) and was estimated using a Monte Carlo simulation performed as of the grant date. There were 124,471 restricted stock units granted to employees by Linde during 2024. The weighted-average fair value of restricted stock units granted during 2024 was $ 449.10 ($ 332.69 in 2023 and $ 260.27 in 2022). These fair values are based on the closing market price of Linde's ordinary shares on the grant date adjusted for dividends that will not be paid during the vesting period. Compensation expense related to the restricted stock units is recognized over the vesting period. 74 Table of Contents The following table summarizes non-vested performance-based and restricted stock unit award activity as of December 31, 2024 and changes during the period then ended (shares based on target amounts, averages are calculated on a weighted basis): Performance-Based Restricted Stock Number of Shares (000’s) Average Grant Date Fair Value Number of Shares (000’s) Average Grant Date Fair Value Non-vested at January 1, 2024 572 $ 281.11 638 $ 232.15 Granted 301 534.58 124 449.10 Vested ( 305 ) 264.41 ( 160 ) 244.23 Cancelled and Forfeited ( 10 ) 480.93 ( 11 ) 358.22 Non-vested at December 31, 2024 558 $ 339.50 591 $ 271.59 There are approximately 9 thousand performance-based stock units and 15 thousand restricted stock units that are non-vested at December 31, 2024 which will be settled in cash due to foreign regulatory limitations. The liability related to these grants reflects the current estimate of performance that will be achieved and the current share price. As of December 31, 2024, $ 62 million of unrecognized compensation cost related to performance-based awards and $ 50 million of unrecognized compensation cost related to the restricted stock unit awards is expected to be recognized primarily through the first quarter of 2027. NOTE 16. RETIREMENT PROGRAMS Defined Benefit Pension Plans - U.S. The Linde retirement plans are non-contributory defined benefit plans covering eligible employees and its participating affiliates. Effective July 1, 2002, the Linde U.S. Pension Plan was amended to give participating employees a one-time irrevocable choice between a traditional benefit (the “Traditional Design”) and an account-based benefit (the “Account-Based Design”). The Traditional Design pays a monthly benefit based on years of service and average pay during the last years of the participant’s career with Linde. The Account-Based Design gives participants annual pay credits equal to 4 % of eligible compensation, plus interest credits based on long-term treasury rates on the accumulated account balance. This new formula applies to all new employees hired after April 30, 2002 into businesses adopting this plan. The U.S. pension plan assets are comprised of a diversified mix of investments, including corporate equities, government securities and corporate debt securities. Linde has several plans that provide supplementary retirement benefits primarily to higher level employees that are unfunded and are nonqualified for federal tax purposes. Pension coverage for employees of certain of Linde’s non-U.S. subsidiaries generally is provided by those companies through separate plans. Obligations under such plans are primarily provided for through diversified investment portfolios, with some smaller plans provided for under insurance policies or by book reserves. Defined Benefit Pension Plans - Non-U.S. Linde has Non-U.S., defined benefit commitments primarily in Germany and the U.K that include pension plan assets comprised of a diversified mix of investments. The defined benefit commitments in Germany relate to old age pensions, invalidity pensions and surviving dependents pensions. These commitments also take into account vested rights for periods of service prior to January 1, 2002 based on earlier final-salary pension plan rules. In addition, there are direct commitments in respect of the salary conversion scheme for the form of cash balance plans. The resulting pension payments are calculated on the basis of an interest guarantee and the performance of the corresponding investment. There are no minimum funding requirements. The pension obligations in Germany are partly funded by a Contractual Trust Agreement. Defined benefit commitments in the U.K. prior to July 1, 2003 are earnings-related and dependent on the period of service. Such commitments relate to old age pensions, invalidity pensions and surviving dependents pensions. Beginning in April 1, 2011, the amount of future increases in inflation-linked pensions and of increases in pensionable emoluments was restricted. Multi-employer Pension Plans In the United States Linde participates in eight multi-employer defined benefit pension plans ("MEPs"), pursuant to the terms of collective bargaining agreements, that cover approximately 200 union-represented employees. The collective bargaining agreements expire on different dates through 2029. In connection with such agreements, the company is required to make periodic contributions to the MEPs in accordance with the terms of the respective collective bargaining 75 Table of Contents agreements. Linde’s participation in these plans is not material either at the plan level or in the aggregate. For all MEPs, Linde’s contributions were less than 1 % of the total contributions to each plan for 2024, 2023 and 2022 . Linde has obtained the most recently available Pension Protection Act ("PPA") annual funding notices from the Trustees of the MEPs. As of December 31, 2024 , there were four 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. Historically, such withdrawal payments have not been significant. Defined Contribution Plans Linde’s U.S. 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 $ 69 million in 2024 , $ 59 million in 2023 and $ 56 million in 2022 (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. The collective number of shares of Linde ordinary shares in the ESOP totaled 1,578,863 at December 31, 2024 . Certain non-U.S. subsidiaries of the company also sponsor defined contribution plans where contributions are determined under various formulas. The expense for these plans was $ 62 million in 2024 , $ 60 million in 2023 and $ 80 million in 2022 (these expenses are not included in the tables that follow). Postretirement Benefits Other Than Pensions (OPEB) Linde provides health care and life insurance benefits to certain eligible retired employees. These benefits are provided through various insurance companies and healthcare providers. The company does not currently fund its postretirement benefits obligations. Linde’s retiree plans may be changed or terminated by Linde at any time for any reason with no liability to current or future retirees. Linde uses a measurement date of December 31 for its pension and other post-retirement benefit plans. Pension and Postretirement Benefit Costs The components of net pension and postretirement benefits other than pension ("OPEB") costs for 2024, 2023 and 2022 are shown in the table below: (Millions of dollars) Year Ended December 31, 2024 2023 2022 Amount recognized in Operating Profit Service cost $ 84 $ 84 $ 127 Amount recognized in Net pension and OPEB cost (benefit), excluding service cost Interest cost 362 373 201 Expected return on plan assets ( 552 ) ( 523 ) ( 518 ) Net amortization and deferral ( 10 ) ( 30 ) 74 Settlement charges (a) 10 16 6 $ ( 190 ) $ ( 164 ) $ ( 237 ) Net periodic benefit cost (benefit) $ ( 106 ) $ ( 80 ) $ ( 110 ) (a) Settlement charges were triggered by lump sum benefit payments. Funded Status Changes in the benefit obligation and plan assets for Linde’s pension and OPEB programs, including reconciliation of the funded status of the plans to amounts recorded in the consolidated balance sheet, as of December 31, 2024 and 2023 are shown below. 76 Table of Contents (Millions of dollars) Year Ended December 31, 2024 2023 U.S. Non-U.S. U.S. Non-U.S. Change in Benefit Obligation ("PBO") Benefit obligation, January 1 $ 2,187 $ 6,385 $ 2,129 $ 5,586 Service cost 28 56 25 59 Interest cost 103 259 105 268 Participant contributions 11 18 11 18 Actuarial loss (gain) ( 73 ) ( 622 ) 100 532 Benefits paid ( 155 ) ( 348 ) ( 162 ) ( 324 ) Plan settlement ( 11 ) ( 14 ) ( 21 ) ( 14 ) Foreign currency translation and other changes — ( 248 ) — 260 Benefit obligation, December 31 $ 2,090 $ 5,486 $ 2,187 $ 6,385 Accumulated benefit obligation ("ABO") $ 1,964 $ 5,405 $ 2,037 $ 6,300 Change in Plan Assets Fair value of plan assets, January 1 $ 2,050 $ 6,178 $ 1,891 $ 5,794 Actual return on plan assets 267 271 300 365 Company contributions — 35 — 46 Participant contributions — 18 — 18 Benefits paid from plan assets ( 141 ) ( 321 ) ( 141 ) ( 320 ) Foreign currency translation and other changes — ( 231 ) — 275 Fair value of plan assets, December 31 $ 2,176 $ 5,950 $ 2,050 $ 6,178 Funded Status, End of Year $ 86 $ 464 $ ( 137 ) $ ( 207 ) Recorded in the Balance Sheet (Note 7) Other long-term assets $ 212 $ 894 $ 19 $ 361 Other current liabilities ( 16 ) ( 21 ) ( 17 ) ( 14 ) Other long-term liabilities ( 110 ) ( 409 ) ( 139 ) ( 554 ) Net amount recognized, December 31 $ 86 $ 464 $ ( 137 ) $ ( 207 ) Amounts recognized in accumulated other comprehensive income (loss) consist of: Net actuarial loss (gain) $ 91 $ ( 256 ) $ 290 $ 219 Prior service cost (credit) ( 9 ) — ( 10 ) 1 Deferred tax obligation (benefit) (Note 7) ( 21 ) 116 ( 67 ) 7 Amount recognized in accumulated other comprehensive income (loss) (Note 7) $ 61 $ ( 140 ) $ 213 $ 227 Comparative funded status information as of December 31, 2024 and 2023 for select non-U.S. pension plans is presented in the table below as the benefit obligations of these plans are considered to be significant relative to the total benefit obligation: 77 Table of Contents United Kingdom Germany Other Non-U.S. Total Non-U.S. (Millions of dollars) 2024 2024 2024 2024 Benefit obligation, December 31 $ 2,883 $ 1,594 $ 1,009 $ 5,486 Fair value of plan assets, December 31 3,640 1,418 892 5,950 Funded Status, End of Year $ 757 $ ( 176 ) $ ( 117 ) $ 464 United Kingdom Germany Other Non-U.S. Total Non-U.S. (Millions of dollars) 2023 2023 2023 2023 Benefit obligation, December 31 $ 3,616 $ 1,684 $ 1,085 $ 6,385 Fair value of plan assets, December 31 3,858 1,370 950 6,178 Funded Status, End of Year $ 242 $ ( 314 ) $ ( 135 ) $ ( 207 ) The changes in plan assets and benefit obligations recognized in other comprehensive income in 2024 and 2023 are as follows: Pensions (Millions of dollars) 2024 2023 Current year net actuarial losses (gains)* $ ( 681 ) $ 480 Amortization of net actuarial gains (losses) 9 29 Amortization of prior service credits (costs) 1 1 Pension settlements ( 10 ) ( 16 ) Foreign currency translation and other changes 7 — Total recognized in other comprehensive income $ ( 674 ) $ 494 * Pension net actuarial gains in 2024 are largely driven by continued increase in the discount rate environment in U.S. and non-U.S. plans resulting in actuarial gains from a lower PBO as well as favorable plan asset experience for the U.S. plans . In 2023, the actuarial losses were largely driven by the decrease in the discount rate environment resulting from a higher PBO, which was partially offset by favorable plan asset experience for non-U.S plans. The U.S. plan derived a benefit from the actual return on plan assets. The following table provides information only for those individual pension plans where the accumulated benefit obligation exceeds the fair value of plan assets: (Millions of dollars) Year Ended December 31, Pensions 2024 2023 U.S. Non-U.S. U.S. Non-U.S. Accumulated benefit obligation ("ABO") $ 44 $ 1,746 $ 1,952 $ 1,880 Fair value of plan assets $ — $ 1,384 $ 1,945 $ 1,385 The following table provides information only for those individual pension plans where the projected benefit obligation exceeds the fair value of plan assets: (Millions of dollars) Year Ended December 31, Pensions 2024 2023 U.S. Non-U.S. U.S. Non-U.S. Projected benefit obligation ("PBO") $ 47 $ 1,796 $ 2,012 $ 1,932 Fair value of plan assets $ — $ 1,391 $ 1,945 $ 1,390 78 Table of Contents Assumptions The assumptions used to determine benefit obligations are as of the respective balance sheet dates and the assumptions used to determine net benefit cost are as of the previous year-end, as shown below: Pensions U.S. Non-U.S. 2024 2023 2024 2023 Weighted average assumptions used to determine benefit obligations at December 31, Discount rate 5.55 % 5.03 % 4.76 % 4.27 % Interest crediting rate 4.68 % 4.03 % 1.11 % 1.70 % Rate of increase in compensation levels 3.50 % 3.50 % 2.55 % 2.58 % Weighted average assumptions used to determine net periodic benefit cost for years ended December 31, Discount rate 5.03 % 5.35 % 4.27 % 4.58 % Interest crediting rate 4.03 % 4.02 % 1.70 % 2.13 % Rate of increase in compensation levels 3.50 % 3.25 % 2.58 % 2.59 % Expected long-term rate of return on plan assets (1) 7.00 % 7.00 % 6.02 % 5.64 % (1) 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 per formance. For the U.S. plans, the expected rate of return of 7.00 % was derived based on the target asset allocation of 50 %- 70 % equity securities (approximately 7.20 % expected return), 20 %- 50 % fixed income securities (approximately 4.70 % expected return) and 2 %- 8 % alternative investments (approximately 4.30 % expected return). For the main non-U.S. plans, the expected rate of return was derived based on the weighted average target asset allocation of 15 %- 25 % equity securities (approximately 5.30 % expected return), 30 %- 50 % fixed income securities (approximately 5.80 % expected return), and 30 %- 50 % alternative investments (approximately 5.60 % expected return). For the U.S. plan assets, the actual annualized total return for the most recent 10 -year period ended December 31, 2024 was approximately 7.20 %. For the non-U.S. plan assets, the actual annualized total return for the same period was approximately 4.00 %. Changes to plan asset allocations and investment strategy over this time period limit the value of historical plan performance as a factor in estimating the expected long term rate of return. For 2025, the expected long-term rate of return on plan assets will be 7.00 % for the U.S. plans and 6.02 % for non-U.S. plans. Pension Plan Assets The investments of the U.S. pension plan are managed to meet the future expected benefit liabilities of the plan over the long term by investing in diversified portfolios consistent with prudent diversification and historical and expected capital market returns. Investment strategies are reviewed by management and investment performance is tracked against appropriate benchmarks. There are no concentrations of risk as it relates to the assets within the plans. The non-U.S. pension plans are managed individually based on diversified investment portfolios, with different target asset allocations that vary for each plan. Weighted-average asset allocations at December 31, 2024 and 2023 for Linde’s U.S. and non-U.S. pension plans, as well as respective asset allocation ranges by major asset category, are generally as follows: U.S. Non-U.S. Asset Category Target 2024 Target 2023 2024 2023 Target 2024 Target 2023 2024 2023 Equity securities 50 % - 70 % 50 % - 70 % 62 % 59 % 15 % - 25 % 15 % - 25 % 24 % 22 % Fixed income securities 20 % - 50 % 20 % - 50 % 31 % 31 % 30 % - 50 % 30 % - 50 % 29 % 30 % Other 2 % - 8 % 2 % - 8 % 7 % 10 % 30 % - 50 % 30 % - 50 % 47 % 48 % 79 Table of Contents The following table summarizes pension assets measured at fair value by asset category at December 31, 2024 and 2023 . Transfers of assets were not material for the year ended December 31, 2024 and 2023 . See Note 13 for the definition of levels within the fair value hierarchy: Fair Value Measurements Using Level 1 Level 2 Level 3 ** Total (Millions of dollars) 2024 2023 2024 2023 2024 2023 2024 2023 Cash and cash equivalents $ 407 $ 368 $ — $ — $ — $ — $ 407 $ 368 Equity securities: Global equities 1,149 926 — — — — 1,149 926 Mutual funds 344 298 — — — — 344 298 Fixed income securities: Government bonds — — 1,304 1,486 — — 1,304 1,486 Emerging market debt — — 294 283 — — 294 283 Mutual funds 130 119 61 60 — — 191 179 Corporate bonds — — 401 324 — — 401 324 Bank loans — — 25 27 — — 25 27 Alternative investments: Real estate funds — — — — 314 324 314 324 Private debt — — — — 1,048 1,345 1,048 1,345 Insurance contracts — — — — 54 51 54 51 Liquid alternatives — — 1,087 1,022 — — 1,087 1,022 Other investments 2 1 23 22 — — 25 23 Total plan assets at fair value, December 31, $ 2,032 $ 1,712 $ 3,195 $ 3,224 $ 1,416 $ 1,720 $ 6,643 $ 6,656 Pooled funds * 1,483 1,572 Total fair value plan assets December 31, $ 8,126 $ 8,228 * Pooled funds are measured using the net asset value ("NAV") as a practical expedient for fair value as permissible under the accounting standard for fair value measurements and have not been categorized in the fair value hierarchy. ** The following table summarizes changes in fair value of the pension plan assets classified as level 3 for the periods ended December 31, 2024 and 2023: (Millions of dollars) Insurance Contracts Real Estate Funds Private Debt Total Balance, December 31, 2022 $ 46 $ 353 $ 1,360 $ 1,759 Gain/(Loss) for the period — ( 27 ) ( 38 ) ( 65 ) Purchases 1 3 1 5 Sales — ( 15 ) ( 44 ) ( 59 ) Transfer into/ (out of) Level 3 — — — — Foreign currency translation 4 10 66 80 Balance, December 31, 2023 51 324 1,345 1,720 Gain/(Loss) for the period 3 10 ( 12 ) 1 Purchases 4 28 — 32 Sales — ( 37 ) ( 255 ) ( 292 ) Transfer into / (out of) Level 3 — — — — Foreign currency translation ( 4 ) ( 11 ) ( 30 ) ( 45 ) Balance, December 31, 2024 $ 54 $ 314 $ 1,048 $ 1,416 The descriptions and fair value methodologies for the company's pension plan assets are as follows: 80 Table of Contents Cash and Cash Equivalents – This category includes cash and short-term interest bearing investments with maturities of three months or less. Investments are valued at cost plus accrued interest. Cash and cash equivalents are classified within level 1 of the valuation hierarchy. Equity Securities – This category is comprised of shares of common stock in U.S. and non-U.S. companies from a diverse set of industries and size. Common stock is valued at the closing market price reported on a U.S. or non-U.S. exchange where the security is actively traded. Equity securities are classified within level 1 of the valuation hierarchy. Mutual Funds – These categories consist of publicly and privately managed funds that invest primarily in marketable equity and fixed income securities. The fair value of these investments is determined by reference to the net asset value of the underlying securities of the fund. Shares of publicly traded mutual funds are valued at the net asset value quoted on the exchange where the fund is traded and are primarily classified as level 1 within the valuation hierarchy. Emerging Market Debt - This category includes fixed income debt issued by countries with developing economies as well as by corporations within those nations. They typically have higher yields but lower credit ratings relative to developed country corporate and government bonds. The fair values for these investments are classified as level 2 within the valuation hierarchy. U.S. and Non-U.S. Government Bonds – This category includes U.S. treasuries, U.S. federal agency obligations and non-U.S. government debt. The majority of these investments do not have quoted market prices available for a specific government security and so the fair value is determined using quoted prices of similar securities in active markets and is classified as level 2 within the valuation hierarchy. Corporate Bonds – This category is comprised of corporate bonds of U.S. and non-U.S. companies from a diverse set of industries and size. The fair values for U.S. and non-U.S. corporate bonds are determined using quoted prices of similar securities in active markets and observable data or broker or dealer quotations. The fair values for these investments are classified as level 2 within the valuation hierarchy. Pooled Funds - Pooled fund NAVs are provided by the trustee and are determined by reference to the fair value of the underlying securities of the trust, less its liabilities, which are valued primarily through the use of directly or indirectly observable inputs. Depending on the pooled fund, underlying securities may include marketable equity securities or fixed income securities. Bank Loans - This category is comprised of traded syndicated loans of larger corporate borrowers. Such loans are issued by sub-investment grade rated companies both in the U.S. and internationally and are syndicated by investment banks to institutional investors. They are regularly traded in an active dealer market comprised of large investment banks, which supply bid and offer quotes and are therefore classified within level 2 of the valuation hierarchy. Liquid Alternative Investments - This category is comprised of investments in alternative mutual funds whose holdings include liquid securities, cash, and derivatives. Such funds focus on diversification and employ a variety of investing strategies including long/short equity, multi-strategy, and global macro. The fair value of these investments is determined by reference to the net asset value of the underlying holdings of the fund, which can be determined using observable data (e.g., indices, yield curves, quoted prices of similar securities), and is classified within level 2 of the valuation hierarchy. Insurance Contracts – This category is comprised of purchased annuity insurance contracts (annuity contract buy-ins) and is intended to mitigate the Company's exposure to certain risks, such as longevity risk. The fair value is calculated based on the cash surrender value of the purchased annuity insurance contract, which is determined based on such factors as the fair value of the underlying assets and discounted cash flows. These contracts are with highly rated insurance companies. Insurance contracts are classified within level 3 of the valuation hierarchy. Real Estate Funds – This category includes real estate properties, partnership equities and investments in operating companies. The fair value of the assets is determined using discounted cash flows by estimating an income stream for the property plus a reversion into a present value at a risk adjusted rate. Yield rates and growth assumptions utilized are derived from market transactions as well as other financial and industry data. The fair value for these investments are classified within level 3 of the valuation hierarchy. Private Debt - This category includes non-traded, privately-arranged loans between one or a small group of private debt investment managers and corporate borrowers, which are typically too small to access the syndicated market and have no credit rating. This category also includes similar loans to real estate companies or individual properties. Loans included in this category are valued at par value, are held to maturity or to call, and are classified within level 3 of the valuation hierarchy. 81 Table of Contents Contributions At a minimum, Linde contributes to its pension plans to comply with local regulatory requirements (e.g., ERISA in the United States). 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 the cash. Changes to these factors can impact the timing of discretionary contributions from year to year. Pension contributions were $ 35 million in 2024, $ 46 million in 2023 and $ 51 million in 2022. Estimated required contributions for 2025 are currently expected to be in the range of $ 25 million to $ 35 million. Estimated Future Benefit Payments The following table presents estimated future benefit payments, net of participant contributions: (Millions of dollars) Pensions Year Ended December 31, U.S. Non-U.S. 2025 $ 212 $ 371 2026 162 364 2027 166 370 2028 165 384 2029 165 392 Thereafter 833 2,093 NOTE 17. COMMITMENTS AND CONTINGENCIES The company accrues non income-tax liabilities for 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. In the event any losses are sustained in excess of accruals, they will be charged against income at that time. Attorney fees are recorded as incurred. Commitments represent obligations, such as those for future purchases of goods or services, that are not yet recorded on the company’s balance sheet as liabilities. The company records liabilities for commitments when incurred (i.e., when the goods or services are received). Contingent Liabilities Linde is subject to various lawsuits 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. Linde has strong defenses in these cases and intends to defend itself vigorously. 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 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. Significant matters are: • During 2009, the Brazilian government published Law 11941/2009 instituting a new voluntary amnesty program (“Refis Program”) which allowed Brazilian companies to settle certain federal tax disputes at reduced amounts. During 2009, the company decided that it was economically beneficial to settle many of its outstanding federal tax disputes and such disputes were enrolled in the Refis Program, subject to final calculation and review by the Brazilian federal government. The company recorded estimated liabilities based on the terms of the Refis Program. Since 2009, Linde has been unable to reach final agreement on the calculations and initiated litigation against the government in an attempt to resolve certain items. Open issues relate to the following matters: (i) application of cash deposits and net operating loss carryforwards to satisfy obligations and (ii) the amount of tax reductions available under the Refis Program. It is difficult to estimate the timing of resolution of legal matters in Brazil. • 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. The period for plaintiffs to file claims expired on July 9, 2019. In 82 Table of Contents 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 have appealed 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 May 27, 2022, performance of all Linde Engineering agreements in Russia were lawfully suspended in compliance with applicable sanctions. In December 2022, at RusChemAlliance’s (RCA) request a Russian St. Petersburg court (“St. Petersburg Court”) issued an injunction preventing sale of Linde Russia subsidiaries and assets. During 2023 and 2024, in accordance with the dispute resolution provisions of the related engineering agreements Linde secured judgements reenforcing jurisdiction of the agreements with RCA outside of Russia and ordering the St. Petersburg proceedings stayed and injunctions lifted. However, RCA has continued to pursue its claims in Russia and during the fourth quarter of 2024 two Linde Russian joint ventures were sold locally pursuant to a St. Petersburg court order and the proceeds provided to RCA. Linde does not expect a material adverse impact on earnings given the $ 1.7 billion liabilities recorded as of December 31, 2024 and the immaterial investment value of its remaining deconsolidated Russia subsidiaries. Please see further detail on the Russia legal cases below. RCA LNG and GPP In December 2022, the 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. RusChemAlliance is owned 50 % by PJSC Gazprom. The injunction was requested by RCA to secure payment of a possible 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 Russia entered into in July 2021. In March 2023, RCA filed a claim in St. Petersburg against Linde GmbH for recovery of advance payments under the agreement ("GPP Claim"), and subsequently (i) added Linde and other Linde subsidiaries as defendants, and (ii) is seeking payment of alleged damages from Linde and guarantor banks. In March 2024, RCA filed a similar claim for repayment and damages against Linde for alleged breach of contract under the agreement to build a liquefied natural gas plant in Russia entered into in September 2021 (“LNG Claim”, and together with the GPP Claim, the “Russian Claims”). Dispute resolution provisions In accordance with the dispute resolution provisions of the agreements, in 2023, Linde 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 Claims are 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. During 2024, Linde secured awards on exclusive jurisdiction with HKIAC. In January 2024, the Hong Kong court issued a final judgment in Linde’s favor (i) granting a permanent anti-suit injunction against RCA to seek a stay of the GPP claim and not start an LNG claim, (ii) granting a permanent, global anti-enforcement injunction against RCA for the GPP claim, and (iii) ordering that the injunction issued by the St. Petersburg Court be lifted (“HK Court Judgement”). Despite the judgments of the Hong Kong court and similar orders issued by the HKIAC arbitration tribunals, RCA is continuing to pursue its claims in Russia and neither the St. Petersburg injunction affecting Linde’s shares and assets has been lifted, nor the proceeding in St. Petersburg been stayed. Local seizures In February 2024, the St. Petersburg Court decided the GPP Claim in favor of RCA (the “GPP Decision”) and in October 2024, decided the LNG Claim in favor of RCA (the “LNG Decision”). Linde unsuccessfully appealed the GPP Decision in March and September 2024. During the fourth quarter of 2024, RCA executed enforcement actions related to the GPP Decision within Russia for Linde’s shares in two Linde Russian joint ventures and locally RCA received payment from the purchase of these shares by Linde’s joint venture partners. RCA previously initiated the enforcement process for the GPP Decision within Russia for the remainder of Linde’s local assets, and these proceedings are currently pending a court appointed local valuation of Linde’s assets. Additionally, during November 2024, RCA seized the ruble equivalent of approximately € 238 million from one of the guarantor bank’s accounts in Russia. Linde intends to claim all damages related to or rising from RCA's enforcement of the GPP and LNG Decisions in the HKIAC arbitration proceedings. Linde subsidiaries affected by the GPP Decision have also filed claims for damages against RCA in the Southern District of New York, the Netherlands and Germany. 83 Table of Contents As of December 31, 2024, Linde has a contingent liability of $ 1.0 billion, which represents advance payments previously recorded in contract liabilities related to terminated engineering projects with RCA. As a result of the contract terminations, Linde no longer has future performance obligations for these projects. It is difficult to estimate the timing of resolution of these matters. The company intends to vigorously defend its interests in the Russian Claims, Hong Kong arbitration proceedings and other jurisdictions. Amur GPP In July 2015, Gazprom Pererabotka Blagoveshchensk LLC ("Gazprom") entered into an engineering, procurement and construction contract with OJSC NIPIgazpererabotka ("Nipigas") for the construction of a gas processing plant and other components located in the Amur Region, Russia (“Amur GPP”). Subsequently, in December 2015, Nipigas and Linde Engineering, executed a subcontract for engineering, procurement, and site services for licensed production units for the Amur GPP project. Additionally, Linde also entered into (i) a license agreement with Gazprom in 2017 for the operation of the plants, and (ii) a direct owner agreement with Gazprom and Nipigas which included limitation of liability provisions. Performance of the Amur GPP agreements were lawfully suspended in compliance with applicable sanctions on May 27, 2022. On October 8, 2021 and January 5, 2022, fires occurred at the Amur GPP facility. Following the initial fire in 2021, Linde undertook a comprehensive review of the incident, including a detailed local inspection conducted by Linde employees. The Linde report concluded that the fire was attributable to the quality of construction and assembly work, responsibilities falling under the scope of Nipigas. On October 29, 2024, Gazprom submitted a claim to the Arbitration State Court in the Amur Region, Russia (“Amur Court”) against Linde claiming damages and lost profits arising from the fire incidents. As of December 31, 2024, Linde has a contingent liability of $ 0.7 billion for this and other Amur GPP contract matters. It is difficult to estimate the timing of resolution of this matter. The company intends to vigorously defend its interests in this case. Commitments At December 31, 2024, Linde had undrawn outstanding letters of credit, bank guarantees and surety bonds valued at approximately $ 3,377 million from financial institutions. These relate primarily to customer contract performance guarantees (including plant construction in connection with certain on-site contracts), self-insurance claims and other commercial and governmental requirements, including non-U.S. litigation matters. Other commitments related to leases, tax liabilities for uncertain tax positions, long-term debt, other post retirement and pension obligations are summarized elsewhere in the financial statements (see Notes 4, 5, 11, and 16). NOTE 18. SEGMENT INFORMATION 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 represent three of the company's reportable segments - Americas, EMEA (Europe/Middle East/Africa), and APAC (Asia/South Pacific); a four th 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 three 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 (hydrogen, helium, carbon dioxide, carbon monoxide, 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 CODM consists of the CEO, CFO and senior or executive vice president of each respective segment. The company’s measure of profit/loss for segment reporting is segment operating profit. Segment operating profit is defined as operating profit excluding purchase accounting impacts of the Linde AG merger, cost reduction and other charges, and items not indicative of ongoing business trends. The CODM uses operating profit to assess overall segment performance, which 84 Table of Contents includes monitoring opportunities for growth and to make capital decisions across the respective segments, while assessing both industry and macroeconomic conditions. Total assets have not been included as this is not provided to the CODM for their assessment. The table below presents information about reportable segments for the years ended December 31, 2024, 2023 and 2022. (Millions of dollars) Americas EMEA APAC Engineering Other Total 2024 Sales (a) $ 14,442 $ 8,352 $ 6,632 $ 2,322 $ 1,257 $ 33,005 Variable Costs (b) 5,375 3,129 3,304 920 408 13,136 Fixed Costs and other (c) 3,067 1,803 769 959 694 7,292 Depreciation and amortization (d) 1,450 640 641 33 93 2,857 Operating Profit (e) 4,550 2,780 1,918 410 62 9,720 Expenditures for long-lived assets $ 2,805 $ 702 $ 1,059 $ 25 $ 223 $ 4,814 2023 Sales (a) $ 14,304 $ 8,542 $ 6,559 $ 2,160 $ 1,289 $ 32,854 Variable Costs (b) 5,524 3,614 3,317 676 433 13,564 Fixed Costs and other (c) 3,113 1,802 803 960 717 7,395 Depreciation and amortization (d) 1,423 640 633 33 96 2,825 Operating Profit (e) 4,244 2,486 1,806 491 43 9,070 Expenditures for long-lived assets $ 2,999 $ 635 $ 975 $ 24 $ 107 $ 4,740 2022 Sales (a) $ 13,874 $ 8,443 $ 6,480 $ 2,762 $ 1,805 $ 33,364 Variable Costs (b) 6,002 4,034 3,423 1,263 892 15,614 Fixed Costs and other (c) 2,820 1,735 794 911 863 7,123 Depreciation and amortization (d) 1,320 661 593 33 116 2,723 Operating Profit (e) 3,732 2,013 1,670 555 ( 66 ) 7,904 Expenditures for long-lived assets $ 1,698 $ 550 $ 889 $ 28 $ 118 $ 3,283 (a) Sales reflect external sales only. Intersegment sales from Engineering to the industrial gases segments, were $ 1,958 million, $ 1,479 million and $ 1,035 million for the year ended December 31, 2024, 2023 and 2022, respectively. Intersegment sales from Helium, were $ 477 million, $ 509 million, $ 442 million for the year ended December 31, 2024, 2023 and 2022, respectively. (b) Variable costs represents the variable portion of cost of sales, exclusive of depreciation and amortization. (c) Fixed costs and other represents the fixed portion of cost of sales, exclusive of depreciation and amortization, selling, general and administrative, research and development and other income (expenses) - net. (d) Refer to reconciliation of depreciation and amortization to consolidated results below. (e) Refer to reconciliation of operating profit to consolidated results below. Reconciliations to Consolidated Results Depreciation and Amortization The table below reconciles total depreciation and amortization disclosed in the table above to consolidated depreciation and amortization as reflected on our consolidated statements of income: (Millions of dollars) 2024 2023 2022 Total segment depreciation and amortization $ 2,857 $ 2,825 $ 2,723 Purchase accounting impacts - Linde AG 923 991 1,481 Total depreciation and amortization $ 3,780 $ 3,816 $ 4,204 85 Table of Contents Income Before Income Taxes and Equity Investments The table below reconciles total operating profit disclosed in the table above to consolidated income before income taxes and equity investments as reflected on our consolidated statements of income: (Millions of dollars) 2024 2023 2022 Total segment operating profit $ 9,720 $ 9,070 $ 7,904 Cost reduction program and other charges 145 40 1,029 Purchase accounting impacts - Linde AG 940 1,006 1,506 Interest expense - net 256 200 63 Net pension and OPEB cost (benefit), excluding service cost ( 190 ) ( 164 ) ( 237 ) Total consolidated income before income taxes and equity investments $ 8,569 $ 7,988 $ 5,543 Geographic Information The geographic information presented below is based on country of origin. Sales by Major Country (Millions of dollars) 2024 2023 2022 United States $ 11,497 $ 10,566 $ 10,553 China 2,649 2,585 2,643 Germany (a) 2,509 2,827 3,662 United Kingdom 1,540 1,507 1,954 Australia 1,354 1,303 1,372 Mexico 1,346 1,292 1,044 Brazil 1,263 1,302 1,158 Other – non-U.S. 10,847 11,472 10,978 Total Sales $ 33,005 $ 32,854 $ 33,364 (a) Sales in Germany include Engineering sales to third parties, locally and internationally, which represent 28 %, 35 % and 44 % of Germany sales in 2024, 2023 and 2022, respectively. Long-lived Assets (Millions of dollars) 2024 2023 2022 United States $ 9,663 $ 8,490 $ 7,663 China 2,022 2,063 2,176 Germany 1,386 1,584 1,678 Brazil 738 836 720 Mexico 704 768 707 United Kingdom 668 684 704 Australia 573 654 688 Other – non-U.S. 9,021 9,473 9,212 Total long-lived assets (a) $ 24,775 $ 24,552 $ 23,548 (a) Long-lived assets include property, plant and equipment - net. NOTE 19. REVENUE RECOGNITION Revenue is accounted for in accordance with ASC 606. Revenue is recognized as control of goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled to receive in exchange for the goods or services. 86 Table of Contents Contracts with Customers Linde serves a diverse group of industries including healthcare, chemicals and energy, manufacturing, metals and mining, food and beverage, and electronics. Industrial Gases Within each of the company’s geographic segments for industrial gases, there are three basic distribution methods: (i) on-site or tonnage; (ii) merchant or bulk liquid; and (iii) packaged or cylinder gases. The distribution method used by Linde to supply a customer is determined by many factors, including the customer’s volume requirements and location. The distribution method generally determines the contract terms with the customer and, accordingly, the revenue recognition accounting practices. Linde's primary products in its industrial gases business are atmospheric gases (oxygen, nitrogen, argon, rare gases) and process gases (hydrogen, helium, carbon dioxide, carbon monoxide, electronic gases, specialty gases, acetylene). These products are generally sold through one of the three distribution methods. Following is a description of each of the three industrial gases distribution methods and the respective revenue recognition policies : On-site. Customers that require the largest volumes of product and that have a relatively constant demand pattern are supplied by cryogenic and process gas on-site plants. Linde constructs plants on or adjacent to these customers’ sites and supplies the product directly to customers by pipeline. Where there are large concentrations of customers, a single pipeline may be connected to several plants and customers. On-site product supply contracts generally are total requirement contracts with terms typically ranging from 10 - 20 years and contain minimum purchase requirements and price escalation provisions. Many of the cryogenic on-site plants also produce liquid products for the merchant market. Therefore, plants are typically not dedicated to a single customer. Additionally, Linde is responsible for the design, construction, operations and maintenance of the plants and our customers typically have no involvement in these activities. Advanced air separation processes also allow on-site delivery to customers with smaller volume requirements. The company’s performance obligations related to on-site customers are satisfied over time as customers receive and obtain control of the product. Linde has elected to apply the practical expedient for measuring progress towards the completion of a performance obligation and recognizes revenue as the company has the right to invoice each customer, which generally corresponds with product delivery. Accordingly, revenue is recognized when product is delivered to the customer and the company has the right to invoice the customer in accordance with the contract terms. Consideration in these contracts is generally based on pricing which fluctuates with various price indices. Variable components of consideration exist within on-site contracts but are considered constrained. Merchant. Merchant deliveries generally are made from Linde's plants by tanker trucks to storage containers at the customer's site. Due to the relatively high distribution cost, merchant oxygen and nitrogen generally have a relatively small distribution radius from the plants at which they are produced. Merchant argon, hydrogen and helium can be shipped much longer distances. The customer agreements used in the merchant business are usually three to seven year supply agreements based on the requirements of the customer. These contracts generally do not contain minimum purchase requirements or volume commitments. The company’s performance obligations related to merchant customers are generally satisfied at a point in time as the customers receive and obtain control of the product. Revenue is recognized when product is delivered to the customer and the company has the right to invoice the customer in accordance with the contract terms. Packaged Gases. Customers requiring small volumes are supplied products in containers called cylinders, under medium to high pressure. Linde distributes merchant gases from its production plants to company-owned cylinder filling plants where cylinders are then filled for distribution to customers. Cylinders may be delivered to the customer’s site or picked up by the customer at a packaging facility or retail store. Linde invoices the customer for the industrial gases and the use of the cylinder container(s). The company also sells hardgoods and welding equipment purchased from independent manufacturers. Packaged gases are generally sold under one to three-year supply contracts and purchase orders and do not contain minimum purchase requirements or volume commitments. The company’s performance obligations related to packaged gases are satisfied at a point in time. Accordingly, revenue is recognized when product is delivered to the customer or when the customer picks up product from a packaged gas facility or retail store, and the company has the right to payment from the customer in accordance with the contract terms. Engineering The company designs and manufactures equipment for air separation and other industrial gas applications manufactured specifically for end customers. Sale of equipment contracts are generally comprised of a single performance obligation. 87 Table of Contents Revenue from sale of equipment is 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. Costs incurred include material, labor, and overhead costs and represent work contributing and proportionate to the transfer of control to the customer. Changes to cost estimates and contract modifications are typically accounted for as part of the existing contract and are recognized as cumulative adjustments for the inception-to-date effect of such change. Contract Assets and Liabilities Contract assets and liabilities result from differences in timing of revenue recognition and customer invoicing. Contract assets primarily relate to sale of equipment contracts for which revenue is recognized over time. The balance represents unbilled revenue which occurs when revenue recognized under the measure of progress exceeds amounts invoiced to customers. Customer invoices may be based on the passage of time, the achievement of certain contractual milestones or a combination of both criteria. Contract liabilities include advance payments or right to consideration prior to performance under the contract. Contract liabilities are recognized as revenue as performance obligations are satisfied under contract terms. Linde has contract assets of $ 263 million at December 31, 2024 and $ 196 million at December 31, 2023, respectively. Total contract liabilities are $ 2,292 million at December 31, 2024 (current contract liabilities of $ 1,194 million and $ 1,098 million within deferred credits in the consolidated balance sheets). Total contract liabilities were $ 2,950 million at December 31, 2023 (current contract liabilities of $ 1,901 million and $ 1,049 million within deferred credits in the consolidated balance sheets). Revenue recognized for the twelve months ended December 31, 2024 that was included in the contract liability at December 31, 2023 was $ 993 million. Contract assets and liabilities primarily relate to the Engineering business and customer repayments for certain on-site supply agreements. Payment Terms and Other Linde generally receives payment after performance obligations are satisfied, and customer prepayments are not typical for the industrial gases business. Payment terms vary based on the country where sales originate and local customary payment practices. Linde does not offer extended financing outside of customary payment terms. Amounts billed for sales and use taxes, value-added taxes, and certain excise and other specific transactional taxes imposed on revenue producing transactions are presented on a net basis and are not included in sales within the consolidated statement of income. Additionally, sales returns and allowances are not a normal practice in the industry and are not significant. Disaggregated Revenue Information As described above and in Note 18, the company manages its industrial gases business on a geographic basis, while the Engineering and Other businesses are generally managed on a global basis. Furthermore, the company believes that reporting sales by distribution method by reportable geographic segment best illustrates the nature, timing, type of customer, and contract terms for its revenues, including terms and pricing. 88 Table of Contents The following tables show sales by distribution method at the consolidated level and for each reportable segment and Other for the years ended December 31, 2024, 2023 and 2022. (Millions of dollars) Year Ended December 31, 2024 Sales Americas EMEA APAC Engineering Other Total % Merchant $ 4,572 $ 2,765 $ 2,233 $ — $ 208 $ 9,778 30 % On-Site 3,239 1,722 2,695 — — 7,656 23 % Packaged Gas 6,414 3,805 1,376 — 28 11,623 35 % Other 217 60 328 2,322 1,021 3,948 12 % $ 14,442 $ 8,352 $ 6,632 $ 2,322 $ 1,257 $ 33,005 100 % (Millions of dollars) Year Ended December 31, 2023 Sales Americas EMEA APAC Engineering Other Total % Merchant $ 4,370 $ 2,773 $ 2,242 $ — $ 218 $ 9,603 29 % On-Site 3,246 1,980 2,599 — — 7,825 24 % Packaged Gas 6,457 3,735 1,416 — 46 11,654 35 % Other 231 54 302 2,160 1,025 3,772 12 % $ 14,304 $ 8,542 $ 6,559 $ 2,160 $ 1,289 $ 32,854 100 % (Millions of dollars) Year Ended December 31, 2022 Sales Americas EMEA APAC Engineering Other Total % Merchant $ 3,786 $ 2,509 $ 2,220 $ — $ 176 $ 8,691 26 % On-Site 4,048 2,415 2,471 — — 8,934 27 % Packaged Gas 5,831 3,466 1,523 — 51 10,871 33 % Other 209 53 266 2,762 1,578 4,868 14 % $ 13,874 $ 8,443 $ 6,480 $ 2,762 $ 1,805 $ 33,364 100 % Remaining Performance Obligations As described above, Linde's contracts with on-site customers are under long-term supply arrangements which generally require the customer to purchase their requirements from Linde and also have minimum purchase requirements. 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 $ 58 billion. This amount excludes all on-site sales above minimum purchase requirements, which can be significant depending on customer needs. In the future, actual amounts will be different due to impacts from several factors, many of which are beyond the company’s control including, but not limited to, timing of newly signed, terminated and renewed contracts, inflationary price escalations, currency exchange rates, and pass-through costs related to natural gas and electricity. The actual duration of long-term supply contracts ranges up to twenty years . The company estimates that approximately half of the revenue related to minimum purchase requirements will be earned in the next six years and the remaining thereafter. NOTE 20. SUBSEQUENT EVENTS In February 2025, Linde issued € 850 million o f 2.625 % notes due in 2029, € 750 million of 3.00 % notes due in 2033 and € 650 million of 3.25 % notes due in 2037. Linde redeemed $ 600 million of 4.70 % notes that were due in 2025. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. 89 Table of Contents