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The APAC segment includes Linde's industrial gases operations in approximately 20 Asian and South Pacific countries and regions including China, Australia, India and South Korea.
Sales
Sales for the APAC segment increased $73 million, or 1%, in 2024 versus 2023. Volumes increased 2% including project start-ups in the electronics end market. Currency translation decreased sales by 2% driven primarily by the weakening of the Korean won and Chinese yuan against the U.S. Dollar. Cost pass-through increased sales by 1% with minimal impact on operating profit. Pricing was flat.
Operating Profit
Operating profit in the APAC segment increased $112 million, or 6%, in 2024 versus 2023. The increase was primarily driven by volume including project start-ups and continued productivity initiatives which more than offset the impact of currency and cost inflation.
Engineering
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| (Dollar amounts in millions) | | | | Variance |
| Year Ended December 31, | | 2024 | | 2023 | | 2024 vs 2023 |
| Sales | | $ | 2,322 | | | $ | 2,160 | | | 8 | % |
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| Operating profit | | $ | 410 | | | $ | 491 | | | (16) | % |
| As a percent of sales | | 17.7 | % | | 22.7 | % | | |
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| | 2024 vs 2023 |
| | | % Change |
Factors Contributing to Changes - Sales | | |
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Other consists of corporate costs and a few smaller businesses including: Linde Advanced Materials Technology ("LAMT") and global helium wholesale; which individually do not meet the quantitative thresholds for separate presentation.
Sales
Sales for Other decreased $32 million, or 2%, in 2024 versus 2023. Underlying sales decreased 2% in 2024 versus 2023 primarily due to lower volumes in global helium and LAMT. The impact of currency translation was flat in 2024 versus 2023.
Operating profit
Operating profit in Other increased $19 million, or 44%, in 2024 versus 2023. The increase was driven by insurance recovery for LAMT partially offset by higher costs due to helium.
Currency
The results of Linde’s non-U.S. operations are translated to the company’s reporting currency, the U.S. dollar, from the functional currencies used in the countries in which the company operates. For most foreign operations, Linde uses the local currency as its functional currency. There is inherent variability and unpredictability in the relationship of these functional currencies to the U.S. dollar and such currency movements may materially impact Linde’s results of operations in any given period.
To help understand the reported results, the following is a summary of the significant currencies underlying Linde’s consolidated results and the exchange rates used to translate the financial statements (rates of exchange expressed in units of local currency per U.S. dollar):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Percentage of 2024 Consolidated Sales | | Exchange Rate for Statements of Income | | Exchange Rate for Balance Sheet |
| | Average Year Ended December 31, | | December 31, |
| Currency | | 2024 | | 2023 | | 2024 | | 2023 |
| Euro | 18 | % | | 0.92 | | | 0.92 | | | 0.97 | | | 0.92 | |
| Chinese yuan | 8 | % | | 7.20 | | | 7.08 | | | 7.30 | | | 7.10 | |
| British pound | 5 | % | | 0.78 | | | 0.80 | | | 0.80 | | | 0.79 | |
| Australian dollar | 4 | % | | 1.52 | | | 1.50 | | | 1.62 | | | 1.47 | |
| Brazilian real | 4 | % | | 5.37 | | | 4.99 | | | 6.18 | | | 4.86 | |
| Mexican peso | 3 | % | | 18.22 | | | 17.71 | | | 20.83 | | | 16.97 | |
| Canadian dollar | 3 | % | | 1.37 | | | 1.35 | | | 1.44 | | | 1.32 | |
| Korean won | 3 | % | | 1,363 | | | 1,306 | | | 1,472 | | | 1,288 | |
| Indian rupee | 2 | % | | 83.67 | | | 84.51 | | | 85.61 | | | 83.21 | |
| South African rand | 1 | % | | 18.32 | | | 18.43 | | | 18.84 | | | 18.36 | |
| Swedish krona | 1 | % | | 10.57 | | | 10.60 | | | 11.07 | | | 10.07 | |
| Thailand bhat | 1 | % | | 35.24 | | | 34.78 | | | 34.09 | | | 34.14 | |
LIQUIDITY, CAPITAL RESOURCES AND OTHER FINANCIAL DATA
| | | | | | | | | | | |
(Millions of dollars) Year Ended December 31, | 2024 | | 2023 |
| Net Cash Provided by (Used for) | | | |
| Operating Activities | | | |
| Net income (including noncontrolling interests) | $ | 6,737 | | | $ | 6,341 | |
| Non-cash charges (credits): | | | |
| Add: Cost reduction program and other charges, net of payments (a) | 31 | | | (118) | |
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| Add: Depreciation and amortization | 3,780 | | | 3,816 | |
| Add (Less): Deferred income taxes | (142) | | | (84) | |
| Add (Less): Non-cash charges and other | 88 | | | 184 | |
| Net income adjusted for non-cash charges and other | 10,494 | | | 10,139 | |
| Less: Pension contributions | (35) | | | (46) | |
| Add (Less): Working capital | (845) | | | (483) | |
| Add (Less): Other | (191) | | | (305) | |
| Net cash provided by (used for) operating activities | $ | 9,423 | | | $ | 9,305 | |
| Investing Activities | | | |
| Capital expenditures | $ | (4,497) | | | $ | (3,787) | |
| Acquisitions, net of cash acquired | (317) | | | (953) | |
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| Divestitures, net of cash divested and asset sales | 170 | | | 70 | |
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| Net cash provided by (used for) investing activities | $ | (4,644) | | | $ | (4,670) | |
| Financing Activities | | | |
| Debt increases (decreases) – net | $ | 3,167 | | | $ | 1,060 | |
| Issuances (purchases) of ordinary shares – net | (4,451) | | | (3,925) | |
| Cash dividends – Linde plc shareholders | (2,655) | | | (2,482) | |
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| Noncontrolling interest transactions and other | (420) | | | (53) | |
| Net cash provided by (used for) financing activities | $ | (4,359) | | | $ | (5,400) | |
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| Effect of exchange rate changes on cash | $ | (234) | | | $ | (7) | |
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| Cash and cash equivalents, end-of-period | $ | 4,850 | | | $ | 4,664 | |
____________________
(a)See Note 3 to the consolidated financial statements.
Cash increased $186 million in 2024 versus 2023. The primary sources of cash in 2024 were cash flows from operations of $9,423 million and net debt borrowings of $3,167 million. The primary uses of cash included capital expenditures of $4,497 million, net purchases of ordinary shares of $4,451 million, and cash dividends to shareholders of $2,655 million.
2024 compared with 2023
Cash Flows From Operations
Cash flows from operations was $9,423 million, an increase of $118 million from 2023. The increase was primarily attributable to higher net income, which was partially offset by higher net working capital requirements, including lower inflows for contract liabilities from engineering customer advance payments, and higher cash taxes.
Investing
Net cash used for investing activities was $4,644 million in 2024 compared to $4,670 million in 2023. The decrease was due to lower acquisition spend and higher proceeds from divestiture and asset sales, which more than offset higher capital expenditures.
Capital expenditures in 2024 were $4,497 million, an increase of $710 million from 2023. Capital expenditures during 2024 related primarily to investments in new plant and production equipment for backlog growth requirements.
Approximately 58% of the capital expenditures were in the Americas segment with 22% in the APAC segment and the rest largely in the EMEA segment.
At December 31, 2024, Linde's sale of gas backlog of large projects under construction was approximately $7.1 billion. This represents the total estimated capital cost of large plants under construction.
Acquisitions, net of cash acquired for 2024 were $317 million, a decrease of $636 million from 2023. In 2024, acquisitions were primarily related to packaged gas businesses in the Americas. Acquisitions in the prior year were $953 million related primarily to the acquisition of nexAir in the Americas (see Note 2 to the consolidated financial statements).
Divestitures, net of cash divested and asset sales in 2024 were $170 million compared with $70 million in 2023. Divestiture proceeds in 2024 include $69 million in net proceeds for a divestiture in APAC and a settlement with a supplier in the Americas.
Financing
Linde’s financing strategy is to secure long-term committed funding by issuing public notes and debentures and commercial paper backed by a long-term bank credit agreement. Linde’s international operations are funded through a combination of local borrowing and intercompany funding to minimize the total cost of funds and to manage and centralize currency exchange exposures. As deemed necessary, Linde manages its exposure to interest-rate changes through the use of financial derivatives (see Note 12 to the consolidated financial statements and Item 7A. Quantitative and Qualitative Disclosures About Market Risk).
Cash used for financing activities was $4,359 million in 2024 compared to $5,400 million in 2023. Cash provided by debt was $3,167 million in 2024 versus $1,060 million in 2023, driven primarily by higher net debt issuances partially offset by lower commercial paper issuances in 2024. In February 2024, Linde repaid €550 million of 1.20% notes that became due and 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. In May 2024, Linde repaid €300 million of 1.875% notes that became due. 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 3.75% notes due in 2044. In December 2024, Linde repaid $300 million of 4.800% notes that became due.
In February 2025, Linde issued €850 million of 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.
Net purchases of ordinary shares were $4,451 million in 2024 versus $3,925 million in 2023. For additional information related to share repurchase programs, see Part II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Cash dividends increased to $2,655 million in 2024 versus $2,482 million in 2023 driven primarily by a 9% increase in dividends per share to $5.56 per share from $5.10 per share, partially offset by lower shares outstanding. Cash used for Noncontrolling interest transactions and other was $420 million for the year ended December 31, 2024 versus cash used of $53 million for the respective 2023 period, primarily driven by financing related derivative outflows.
Linde’s total net debt outstanding at December 31, 2024 was $16,773 million, $2,064 million higher than $14,709 million at December 31, 2023. The December 31, 2024 net debt balance includes $21,140 million in public securities, and $483 million representing primarily worldwide bank borrowings, net of $4,850 million of cash. Linde’s global effective borrowing rate was approximately 2.5% for 2024.
The company believes that it has sufficient operating flexibility, cash reserves, and funding sources to maintain adequate amounts of liquidity to meet its business needs around the world. At December 31, 2024, Linde's credit ratings as reported by Standard & Poor’s and Moody’s were A-1 and P-1 for short-term debt, respectively, and A and A2 for long-term debt, respectively. The company maintains a $5 billion and a $1.5 billion unsecured and undrawn revolving credit agreements with no associated financial covenants. No borrowings were outstanding under the credit agreements as of December 31, 2024. The company does not anticipate any limitations on its ability to access the debt capital markets and/or other external funding sources and remains committed to its strong ratings from Moody’s and Standard & Poor’s.
Note 11 to the consolidated financial statements includes information with respect to the company’s debt activity, current debt position, debt covenants and the available credit facilities; and Note 12 includes information relating to derivative financial instruments. Linde's credit facilities are with major financial institutions and are non-cancelable until maturity. Therefore, the company believes the risk of the financial institutions being unable to make required loans under the credit facilities, if requested, to be low. Linde’s major bank credit and long-term debt agreements contain standard covenants. The company was in compliance with these covenants at December 31, 2024 and expects to remain in compliance for the foreseeable future.
OFF-BALANCE SHEET ARRANGEMENTS
As discussed in Note 17 to the consolidated financial statements, at December 31, 2024, Linde had undrawn outstanding letters of credit, bank guarantees and surety bonds entered into in connection with normal business operations and they are not reasonably likely to have a material impact on Linde’s consolidated financial condition, results of operations, or liquidity.
CRITICAL ACCOUNTING ESTIMATES
The policies discussed below are considered by management to be critical to understanding Linde’s financial statements and accompanying notes prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). Their application places significant importance on management’s judgment as a result of the need to make estimates of matters that are inherently uncertain. Linde’s financial position, results of operations and cash flows could be materially affected if actual results differ from estimates made. These policies are determined by management and have been reviewed by Linde’s Audit Committee.
Revenue Recognition
Long-Term Construction Contracts
The company designs and manufactures equipment for air separation and other varied gas production and processing plants manufactured specifically for end customers. Revenues for sale of equipment contracts are generally recognized over time as Linde has an enforceable right to payment for performance completed to date and performance does not create an asset with alternative use. For contracts recognized over time, revenue is recognized primarily using a cost incurred input method. Costs incurred to date relative to total estimated costs at completion are used to measure progress toward satisfying performance obligations. The result is applied to total expected revenue and results in financial statement recognition of revenue in addition to costs incurred to date. Any expected loss on a contract is recognized as an expense immediately. Contract modifications are typically accounted for as part of the existing contract and are recognized as a cumulative adjustment for the inception-to-date effect of such change. We assess performance as progress towards completion is achieved on specific projects, earnings will be impacted by changes to our forecast of revenues and costs on these projects.
The cost incurred input method places considerable importance on accurate estimates of the extent of progress towards completion and may involve estimates on the scope of deliveries and services required to fulfill the contractually defined obligations. The key source of estimation uncertainty is the total estimated costs at completion including material, labor and overhead costs and the resultant state of completion of the contracts. There are inherent uncertainties associated with the estimation process, including technical complexity, duration of construction cycle, potential cost inflation (whether equipment or manpower), and scope considerations all of which may affect the total estimation process. Changes in these estimates may lead to a significant impact on future financial statements.
Pension Benefits
Pension benefits represent financial obligations that will be ultimately settled in the future with employees who meet eligibility requirements. Because of the uncertainties involved in estimating the timing and amount of future payments, significant estimates are required to calculate pension expense and liabilities related to the company’s plans. The company utilizes the services of independent actuaries, whose models are used to facilitate these calculations.
Several key assumptions are used in actuarial models to calculate pension expense and liability amounts recorded in the financial statements. Management believes the three most significant variables in the models are the expected long-term rate of return on plan assets, the discount rate, and the expected rate of compensation increase. The actuarial models also use assumptions for various other factors, including long-term inflation rates, employee turnover, retirement age, and mortality. Linde management believes the assumptions used in the actuarial calculations are reasonable, reflect the company’s experience and expectations for the future and are within accepted practices in each of the respective geographic locations in which it operates. Actual results in any given year will often differ from actuarial assumptions because of economic and other factors. The sensitivities to each of the key assumptions presented below exclude the impact of special items that occurred during the year.
The weighted-average expected long-term rates of return on pension plan assets were 7.00% for U.S. plans and 6.02% for non-U.S. plans at December 31, 2024 (7.00% and 5.64%, respectively at December 31, 2023). The expected long-term rate of return on the U.S. and Non-U.S. plan assets is estimated based on the plans' investment strategy and asset allocation, historical capital market performance and, to a lesser extent, historical plan performance. A 0.50% change in these expected long-term rates of return, with all other assumptions held constant, would change Linde’s pension expense by approximately $44 million.
The company has consistently used a market-related value of assets rather than the fair value at the measurement date to determine annual pension expense. The market-related value recognizes investment gains or losses over a five-year period. As a result, changes in the fair value of assets from year to year are not immediately reflected in the company’s annual pension expense. Instead, annual pension expense in future periods will be impacted as deferred investment gains or losses are recognized in the market-related value of assets over the five-year period. The consolidated market-related value of assets was $8,839 million, or $713 million higher than the fair value of assets of $8,126 million at December 31, 2024. These net deferred investment losses of $713 million will be recognized in the calculation of the market-related value of assets ratably over the next four years and will impact future pension expense. Future actual investment gains or losses will impact the market-related value of assets and, therefore, will impact future annual pension expense in a similar manner.
Discount rates are used to calculate the present value of plan liabilities and pension costs and are determined annually by management. The company measures the service and interest cost components of pension and OPEB expense for significant U.S. and non-U.S. plans using the spot rate approach. U.S. plans that do not use the spot rate approach continue to determine discount rates by using a cash flow matching model provided by the company's independent actuaries. The model includes a portfolio of corporate bonds graded AA or better by at least half of the ratings agencies and matches the U.S. plans' projected cash flows to the calculated spot rates. Discount rates for the remaining Non-U.S. plans are based on market yields for high-quality fixed income investments representing the approximate duration of the pension liabilities on the measurement date. Refer to Note 16 to the consolidated financial statements for a summary of the discount rates used to calculate plan liabilities and benefit costs, and to the Retirement Benefits section of the Consolidated Results and Other Information section of this MD&A for a further discussion of 2024 benefit costs. A 0.50% reduction in discount rates, with all other variables held constant, would increase Linde’s pension expense by approximately $1 million whereas a 0.50% increase in discount rates would result in a decrease of $5 million. A 0.50% reduction in discount rates would increase the PBO by approximately $429 million whereas a 0.50% increase in discount rates would have a favorable impact to the PBO of approximately $392 million.
The weighted-average expected rate of compensation increase was 3.50% for U.S. plans and 2.55% for non-U.S. plans at December 31, 2024 (3.50% and 2.58%, respectively, at December 31, 2023). The estimated annual compensation increase is determined by management every year and is based on historical trends and market indices. A 0.50% change in the expected rate of compensation increase, with all other variables held constant, would change Linde’s pension expense by approximately $4 million and would impact the PBO by approximately $33 million.
Asset Impairments
Goodwill and Other Indefinite-Lived Intangibles Assets
At December 31, 2024, the company had goodwill of $25,937 million and $1,650 million of other indefinite-lived intangible assets. Goodwill represents the aggregate of the excess consideration paid for acquired businesses over the fair value of the net assets acquired. Indefinite-lived other intangibles relate to the Linde name.
The company performs a goodwill impairment test annually as of October 1 or more frequently if events or circumstances indicate that an impairment loss may have been incurred. The impairment test performed during the fourth quarter of 2024 indicated no impairment. At December 31, 2024, Linde’s enterprise value was approximately $215 billion (outstanding shares multiplied by the year-end stock price plus net debt, and without any control premium) while its total capital was approximately $56 billion.
The impairment test allows an entity to first assess qualitative factors to determine if it is more likely than not that the fair value of a reporting unit is less than carrying value. If it is determined that it is more likely than not that the fair value of a reporting unit is less than carrying value then the company will estimate and compare the fair value of its reporting units to their carrying value, including goodwill. Reporting units are determined based on one level below the operating segment level.
Management believes that the quantitative and qualitative factors used to perform its annual goodwill impairment assessment are appropriate and reasonable. Although the 2024 assessment indicated that it is more likely than not that the fair value of each reporting unit exceeded its carrying value, changes in circumstances or conditions affecting this analysis could have a significant impact on the fair value determination, which could then result in a material impairment charge to the company's results of operations.
Other indefinite-lived intangible assets are evaluated for impairment on an annual basis or more frequently if events and circumstances indicate that an impairment loss may have been incurred, and no impairments were indicated.
See Notes 9 and 10 to the consolidated financial statements.
Long-Lived Assets
Long-lived assets, including property, plant and equipment and finite-lived other intangible assets, are tested for impairment whenever events or changes in circumstances indicate that the carrying amount of an individual asset or asset group may not be recoverable. For purposes of this test, asset groups are determined based upon the lowest level for which there are independent and identifiable cash flows. Based upon Linde's business model an asset group may be a single plant and related assets used to support on-site, merchant and packaged gas customers. Alternatively, the asset group may be a collection of distribution related assets (cylinders, distribution centers, and stores) or be a pipeline complex which includes multiple interdependent plants and related assets connected by pipelines within a geographic area used to support the same distribution methods. As a result of the Russia-Ukraine conflict, Linde deconsolidated its Russian gas and engineering business entities as of June 30, 2022. See Note 3 to the consolidated financial statements.
Income Taxes
At December 31, 2024, Linde had deferred tax assets of $1,289 million (net of valuation allowances of $146 million), and deferred tax liabilities of $6,520 million. At December 31, 2024, uncertain tax positions totaled $292 million (see Note 1 and Note 5 to the consolidated financial statements). Income tax expense was $2,002 million for the year ended December 31, 2024, or about 23.4% of pre-tax income (see Note 5 to the consolidated financial statements for additional information related to taxes).
In the preparation of consolidated financial statements, Linde estimates income taxes based on diverse legislative and regulatory structures that exist in various jurisdictions where the company conducts business. Deferred income tax assets and liabilities represent tax benefits or obligations that arise from temporary differences due to differing treatment of certain items for accounting and income tax purposes. Linde evaluates deferred tax assets each period to ensure that estimated future taxable income will be sufficient in character (e.g. capital gain versus ordinary income treatment), amount and timing to result in their recovery. A valuation allowance is established when management determines that it is more likely than not that a deferred tax asset will not be realized to reduce the assets to their realizable value. Considerable judgments are required in establishing deferred tax valuation allowances and in assessing exposures related to tax matters. As events and circumstances change, related reserves and valuation allowances are adjusted to income at that time. Linde’s tax returns are subject to audit and local taxing authorities could challenge the company’s tax positions. The company’s practice is to review tax filing positions by jurisdiction and to record provisions for uncertain income tax positions, including interest and penalties when applicable. Linde believes it records and/or discloses such potential tax liabilities as appropriate and has reasonably estimated its income tax liabilities and recoverable tax assets. If new information becomes available, adjustments are charged or credited against income at that time. Management does not anticipate that such adjustments would have a material adverse effect on the company’s consolidated financial position or liquidity; however, it is possible that the final outcomes could have a material impact on the company’s reported results of operations.
Contingencies
The company accrues liabilities for non-income tax contingencies when management believes that a loss is probable and the amounts can be reasonably estimated, while contingent gains are recognized only when realized or realizable. If new information becomes available or losses are sustained in excess of recorded amounts, adjustments are charged against income at that time. Management does not anticipate that in the aggregate such losses would have a material adverse effect on the company’s consolidated financial position or liquidity; however, it is possible that the final outcomes could have a material impact on the company’s reported results of operations.
Linde is subject to various claims, legal proceedings and government investigations that arise from time to time in the ordinary course of business. These actions are based upon alleged environmental, tax, antitrust and personal injury claims, among others (see Note 17 to the consolidated financial statements). Such contingencies are significant and the accounting requires considerable management judgments in analyzing each matter to assess the likely outcome and the need for establishing appropriate liabilities and providing adequate disclosures. Linde believes it records and/or discloses such contingencies as appropriate and has reasonably estimated its liabilities.
NEW ACCOUNTING STANDARDS
See Note 1 to the consolidated financial statements for information concerning new accounting standards and the impact of the implementation of these standards on the company’s financial statements.
FAIR VALUE MEASUREMENTS
Linde does not expect changes in the aggregate fair value of its financial assets and liabilities to have a material impact on the consolidated financial statements. See Note 13 to the consolidated financial statements.
NON-GAAP FINANCIAL MEASURES
The following non-GAAP measures are intended to supplement investors’ understanding of the company’s financial information by providing measures which investors, financial analysts and management use to help evaluate the company’s financial leverage and operating performance. Special items which the company does not believe to be indicative of on-going business performance are excluded from these calculations so that investors can better evaluate and analyze historical and future business trends on a consistent basis. Definitions of these non-GAAP measures may not be comparable to similar definitions used by other companies and are not a substitute for similar GAAP measures.
The non-GAAP measures in the following reconciliations are presented in this MD&A.
Adjusted Amounts
| | | | | | | | |
| (Dollar amounts in millions, except per share data) | | |
| Year Ended December 31, | 2024 | 2023 |
| Adjusted Operating Profit and Operating Margin | | |
| Reported operating profit | $ | 8,635 | | $ | 8,024 | |
| Add: Cost reduction program and other charges | 145 | | 40 | |
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| Add: Purchase accounting impacts - Linde AG (c) | 940 | | 1,006 | |
| Total adjustments | 1,085 | | 1,046 | |
| Adjusted operating profit | $ | 9,720 | | $ | 9,070 | |
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| Reported percentage change | 8 | % | |
| Adjusted percentage change | 7 | % | |
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| Reported sales | $ | 33,005 | | $ | 32,854 | |
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| Reported operating margin | 26.2 | % | 24.4 | % |
| Adjusted operating margin | 29.5 | % | 27.6 | % |
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| Adjusted Depreciation and amortization | | |
| Reported depreciation and amortization | $ | 3,780 | | $ | 3,816 | |
| Less: Purchase accounting impacts - Linde AG (c) | (923) | | (991) | |
| Adjusted depreciation and amortization | $ | 2,857 | | $ | 2,825 | |
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| Adjusted Other Income (Expense) - net | | |
| Reported Other Income (Expense) - net | $ | 185 | | $ | (41) | |
| Add: Purchase accounting impacts - Linde AG (c) | (17) | | (15) | |
| Adjusted Other Income (Expense) - net | $ | 202 | | $ | (26) | |
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| Adjusted Net Pension and OPEB Cost (Benefit), Excluding Service Cost | | |
| Reported net pension and OPEB cost (benefit), excluding service cost | $ | (190) | | $ | (164) | |
| Add: Pension settlement charges | (10) | | (16) | |
| Adjusted Net Pension and OPEB cost (benefit), excluding service costs | $ | (200) | | $ | (180) | |
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| Adjusted Interest Expense - Net | | |
| Reported interest expense - net | $ | 256 | | $ | 200 | |
| Add: Purchase accounting impacts - Linde AG (c) | 3 | | 16 | |
| Adjusted interest expense - net | $ | 259 | | $ | 216 | |
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| (Dollar amounts in millions, except per share data) | | |
| Year Ended December 31, | 2024 | 2023 |
| Adjusted Income Taxes (a) | | |
| Reported income taxes | $ | 2,002 | $ | 1,814 |
| Add: Purchase accounting impacts - Linde AG (c) | 220 | 232 |
| Add: Pension settlement charges | 2 | 3 |
| Add: Cost reduction program and other charges | 36 | 81 |
| Total adjustments | 258 | 316 |
| Adjusted income taxes | $ | 2,260 | $ | 2,130 |
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| Adjusted Effective Tax Rate (a) | | |
| Reported income before income taxes and equity investments | $ | 8,569 | $ | 7,988 |
| Add: Pension settlement charge | 10 | 16 |
| Add: Purchase accounting impacts - Linde AG (c) | 937 | 990 |
| Add: Cost reduction program and other charges | 145 | 40 |
| Total adjustments | 1,092 | 1,046 |
| Adjusted income before income taxes and equity investments | $ | 9,661 | $ | 9,034 |
| | |
| Reported Income taxes | $ | 2,002 | $ | 1,814 |
| Reported effective tax rate | 23.4% | 22.7% |
| | |
| Adjusted income taxes | $ | 2,260 | $ | 2,130 |
| Adjusted effective tax rate | 23.4% | 23.6% |
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| Income from Equity Investments | | |
| Reported income from equity investments | $ | 170 | $ | 167 |
| Add: Purchase accounting impacts - Linde AG (c) | 72 | 72 |
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| Adjusted income from equity investments | $ | 242 | $ | 239 |
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| Adjusted Noncontrolling Interests | | |
| Reported noncontrolling interests | $ | (172) | $ | (142) |
| Add: Purchase accounting impacts - Linde AG (c) | (12) | (12) |
| Add: Cost reduction program and other charges | 16 | — |
| Total adjustments | 4 | (12) |
| Adjusted noncontrolling interests | $ | (168) | $ | (154) |
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| Adjusted Net Income - Linde plc (b) | | |
| Reported net income | $ | 6,565 | | $ | 6,199 | |
| Add: Pension settlement charge | 8 | | 13 | |
| Add: Cost reduction program and other charges | 125 | | (41) | |
| Add: Purchase accounting impacts - Linde AG (c) | 777 | | 818 | |
| Total adjustments | 910 | | 790 | |
| Adjusted net income - Linde plc | $ | 7,475 | | $ | 6,989 | |
| | |
| Adjusted Diluted EPS (b) | | |
| Reported diluted EPS | $ | 13.62 | | $ | 12.59 | |
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| (Dollar amounts in millions, except per share data) | | |
| Year Ended December 31, | 2024 | 2023 |
| Add: Pension settlement charge | 0.02 | | 0.03 | |
| Add: Cost reduction program and other charges | 0.26 | | (0.08) | |
| Add: Purchase accounting impacts - Linde AG (c) | 1.61 | | 1.66 | |
| Total adjustments | 1.89 | | 1.61 | |
| Adjusted diluted EPS | $ | 15.51 | | $ | 14.20 | |
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| Reported percentage change | 8 | % | |
| Adjusted percentage change | 9 | % | |
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| Adjusted EBITDA and % of Sales | | |
| Net Income - Linde plc | $ | 6,565 | | $ | 6,199 | |
| Add: Noncontrolling interests | 172 | | 142 | |
| Add: Net pension and OPEB cost (benefit), excluding service cost | (190) | | (164) | |
| Add: Interest expense | 256 | | 200 | |
| Add: Income taxes | 2,002 | | 1,814 | |
| Add: Depreciation and amortization | 3,780 | | 3,816 | |
| EBITDA | 12,585 | | 12,007 | |
| Add: Cost reduction program and other charges | 145 | | 40 | |
| Add: Purchase accounting impacts - Linde AG (c) | 89 | | 86 | |
| Total adjustments | 234 | | 126 | |
| Adjusted EBITDA | $ | 12,819 | | $ | 12,133 | |
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| Reported sales | $ | 33,005 | | $ | 32,854 | |
| % of sales | | |
| EBITDA | 38.1 | % | 36.5 | % |
| Adjusted EBITDA as a % of Sales | 38.8 | % | 36.9 | % |
(a)The income tax expense (benefit) on the non-GAAP pre-tax adjustments was determined using the applicable tax rates for the jurisdictions that were utilized in calculating the GAAP income tax expense (benefit) and included both current and deferred income tax amounts.
(b) Net of income taxes which are shown separately in “Adjusted Income Taxes and Effective Tax Rate”.
(c)The company believes that its non-GAAP measures excluding Purchase accounting impacts - Linde AG are useful to investors because: (i) the 2018 business combination was a merger of equals in an all-stock merger transaction, with no cash consideration, (ii) the company is managed on a geographic basis and the results of certain geographies are more heavily impacted by purchase accounting than others, causing results that are not comparable at the reportable segment level, therefore, the impacts of purchasing accounting adjustments to each segment vary and are not comparable within the company and when compared to other companies in similar regions, (iii) business management is evaluated and variable compensation is determined based on results excluding purchase accounting impacts, and; (iv) it is important to investors and analysts to understand the purchase accounting impacts to the financial statements.
A summary of each of the adjustments made for Purchase accounting impacts - Linde AG are as follows:
Adjusted Operating Profit and Margin: The purchase accounting adjustments for the periods presented relate primarily to depreciation and amortization related to the fair value step up of fixed assets and intangible assets (primarily customer related) acquired in the merger and the allocation of fair value step-up for ongoing Linde AG asset disposals (reflected in Other Income/(Expense)).
Adjusted Interest Expense - Net: Relates to the amortization of the fair value of debt acquired in the merger.
Adjusted Income Taxes and Effective Tax Rate: Relates to the current and deferred income tax impact on the adjustments discussed above. The income tax expense (benefit) on the non-GAAP pre-tax adjustments was
determined using the applicable tax rates for the jurisdictions that were utilized in calculating the GAAP income tax expense (benefit) and included both current and deferred income tax amounts.
Adjusted Income from Equity Investments: Represents the amortization of increased fair value on equity investments related to depreciable and amortizable assets.
Adjusted Noncontrolling Interests: Represents the noncontrolling interests’ ownership portion of the adjustments described above determined on an entity by entity basis.
Net Debt and Adjusted Net Debt
Net debt is a financial liquidity measure used by investors, financial analysts and management to evaluate the ability of a company to repay its debt. Purchase accounting impacts have been excluded as they are non-cash and do not have an impact on liquidity.
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| (Millions of dollars) | | | |
December 31, | 2024 | | 2023 |
| Debt | $ | 21,623 | | | $ | 19,373 | |
| Less: cash and cash equivalents | (4,850) | | | (4,664) | |
| Net debt | 16,773 | | | 14,709 | |
| Less: purchase accounting impacts - Linde AG | (4) | | | (7) | |
| Adjusted net debt | $ | 16,769 | | | $ | 14,702 | |
SUPPLEMENTAL GUARANTEE INFORMATION
On May 3, 2023, the company filed a Form S-3 Registration Statement with the SEC ("the Registration Statement").
Linde plc may offer debt securities, preferred shares, depositary shares and ordinary shares under the Registration Statement, and debt securities exchangeable for or convertible into preferred shares, ordinary shares or other debt securities. Debt securities of Linde plc may be guaranteed by Linde Inc and/or Linde GmbH. Linde plc may provide guarantees of debt securities offered by its wholly owned subsidiaries Linde Inc. or Linde Finance under the Registration Statement.
Linde Inc. is a wholly owned subsidiary of Linde plc. Linde Inc. may offer debt securities under the Registration Statement. Debt securities of Linde Inc. will be guaranteed by Linde plc, and such guarantees by Linde plc may be guaranteed by Linde GmbH. Linde Inc. may also provide (i) guarantees of debt securities offered by Linde plc under the Registration Statement and (ii) upstream guarantees of downstream guarantees provided by Linde plc of debt securities of Linde Finance offered under the Registration Statement.
Linde Finance B.V. is a wholly owned subsidiary of Linde plc. Linde Finance may offer debt securities under the Registration Statement. Linde plc will guarantee debt securities of Linde Finance offered under the Registration Statement. Linde GmbH and Linde Inc. may guarantee Linde plc’s obligations under its downstream guarantee.
Linde GmbH is a wholly owned subsidiary of Linde plc. Linde GmbH may provide (i) guarantees of debt securities offered by Linde plc under the Registration Statement and (ii) upstream guarantees of downstream guarantees provided by Linde plc of debt securities of Linde Inc. or Linde Finance offered under the Registration Statement.
In September 2019, Linde plc provided downstream guarantees of all pre-existing Linde Inc. and Linde Finance notes, and Linde GmbH and Linde Inc., respectively, provided upstream guarantees of Linde plc’s downstream guarantees.
Linde plc has filed a base prospectus with the Luxembourg Stock Exchange, as supplemented, for a €15.0 billion debt issuance program, under which Linde plc may offer debt securities. Linde Inc. and Linde GmbH have provided to Linde plc upstream guarantees in relation to debt securities of Linde plc offered under the European debt program.
For further information about the guarantees of the debt securities registered under the Registration Statement (including the ranking of such guarantees, limitations on enforceability of such guarantees and the circumstances under which such guarantees may be released), see “Description of Debt Securities – Guarantees” and “Description of Debt Securities – Ranking” in the Registration Statement, which subsections are incorporated herein by reference.
The following tables present summarized financial information for Linde plc, Linde Inc., Linde GmbH and Linde Finance on a combined basis, after eliminating intercompany transactions and balances between them and excluding investments in and equity in earnings from non-guarantor subsidiaries.
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| (Millions of dollars) | | | |
| Statement of Income Data | Twelve Months Ended December 31, 2024 | | Twelve Months Ended December 31, 2023 |
| Sales | $ | 7,995 | | | $ | 8,143 | |
| Operating profit | 1,526 | | | 1,656 | |
| Net income | 3,553 | | | 735 | |
| Transactions with non-guarantor subsidiaries | 7,177 | | | 3,004 | |
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| Balance Sheet Data (at period end) | | | |
| Current assets (a) | 7,827 | | | 4,423 | |
| Long-term assets (b) | 14,481 | | | 13,833 | |
| Current liabilities (c) | 10,309 | | | 10,882 | |
| Long-term liabilities (d) | 64,848 | | | 56,546 | |
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(a) From current assets above, amount due from non-guarantor subsidiaries | 4,425 | | | 1,753 | |
| (b) From long-term assets above, amount due from non-guarantor subsidiaries | 1,031 | | | 816 | |
| (c) From current liabilities above, amount due to non-guarantor subsidiaries | 1,841 | | | 1,684 | |
| (d) From long-term liabilities above, amount due to non-guarantor subsidiaries | $ | 45,378 | | | $ | 39,458 | |
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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Linde is exposed to market risks relating to fluctuations in interest rates and currency exchange rates. The objective of financial risk management at Linde is to minimize the negative impact of interest rate and foreign exchange rate fluctuations on the company’s earnings, cash flows and equity.
To manage these risks, Linde uses various derivative financial instruments, including interest-rate swaps, treasury rate locks, currency swaps, forward contracts, and commodity contracts. Linde only uses commonly traded and non-leveraged instruments. These contracts are entered into primarily with major banking institutions thereby minimizing the risk of credit loss. Also, see Note 1 and Note 12 to the consolidated financial statements for a more complete description of Linde’s accounting policies and use of such instruments.
The following discussion presents the sensitivity of the market value, earnings and cash flows of Linde’s financial instruments to hypothetical changes in interest and exchange rates assuming these changes occurred at December 31, 2024. The range of changes chosen for these discussions reflects Linde’s view of changes which are reasonably possible over a one-year period. Market values represent the present values of projected future cash flows based on interest rate and exchange rate assumptions.
Interest Rate Risk
At December 31, 2024, Linde had debt totaling $21,623 million ($19,373 million at December 31, 2023). For fixed-rate instruments, interest rate changes affect the fair market value but do not impact earnings or cash flows. Conversely, for floating-rate instruments, interest rate changes generally do not affect the fair market value of the instrument but impact future earnings and cash flows, assuming that other factors are held constant. At December 31, 2024, including the impact of derivatives, Linde had fixed-rate debt of $17,584 million and floating-rate debt of $4,039 million, representing 81% and 19%, respectively, of total debt. At December 31, 2023, including the impact of derivatives, Linde had fixed-rate debt of $14,345 million and floating-rate debt of $5,028 million, representing 74% and 26%, respectively, of total debt.
Fixed Rate Debt
This sensitivity analysis assumes that, holding all other variables constant (such as foreign exchange rates, swaps and debt levels), a one hundred basis point increase in interest rates would decrease the unrealized fair market value of the fixed-rate debt portfolio by approximately $918 million ($742 million in 2023). Linde has historically used interest rate swaps and as a result carried derivative assets subject to interest rate risk. All active swaps have been unwound or matured as of December 31, 2024; therefore, the effect of a one hundred basis point increase in interest rates would be $0 as of December 31, 2024 ($65 million increase to derivative assets recorded as of December 31, 2023).
Variable Rate Debt
At December 31, 2024, the after-tax earnings and cash flows impact of a one hundred basis point increase in interest rates, including offsetting impact of derivatives, on the variable-rate debt portfolio would be approximately $40 million ($50 million in 2023). Any such increase would be partially mitigated by higher interest earned on deposits of cash.
Foreign Currency Risk
Linde’s exchange-rate exposures result primarily from its investments and ongoing operations in Latin America (primarily Brazil and Mexico), Europe (primarily Germany, Scandinavia, and the U.K.), Canada, Asia Pacific (primarily Australia and China) and other business transactions such as the procurement of equipment from foreign sources. Linde frequently utilizes currency contracts to hedge these exposures. At December 31, 2024, Linde had a notional amount outstanding of $11,942 million ($5,651 million at December 31, 2023) related to foreign exchange contracts. The majority of these were to hedge recorded balance sheet exposures, primarily intercompany loans denominated in non-functional currencies. See Note 12 to the consolidated financial statements.
Holding all other variables constant, if there were a 10% increase in foreign-currency exchange rates for the portfolio, the fair market value of foreign-currency contracts outstanding at December 31, 2024 would increase by approximately $115 million and at December 31, 2023 would decrease by approximately $58 million, which would be largely offset by an offsetting loss or gain on the foreign-currency fluctuation of the underlying exposure being hedged.
Holding all other variables constant, if there were a 10% increase in foreign-currency exchange rates on the external debt portfolio, the fair market value of foreign-currency denominated debt outstanding at December 31, 2024 would decrease by approximately $1,334 million and $970 million at December 31, 2024 and 2023, respectively, which would be largely offset by an offsetting loss or gain on the underlying foreign net investment being hedged.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
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MANAGEMENT’S STATEMENT OF RESPONSIBILITY FOR FINANCIAL STATEMENTS
Linde’s consolidated financial statements are prepared by management, which is responsible for their fairness, integrity and objectivity. The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America applied on a consistent basis, except for accounting changes as disclosed, and include amounts that are estimates and judgments. All historical financial information in this annual report is consistent with the accompanying financial statements.
Linde maintains accounting systems, including internal accounting controls, monitored by a staff of internal auditors, that are designed to provide reasonable assurance of the reliability of financial records and the protection of assets. The concept of reasonable assurance is based on recognition that the cost of a system should not exceed the related benefits. The effectiveness of those systems depends primarily upon the careful selection of financial and other managers, clear delegation of authority and assignment of accountability, inculcation of high business ethics and conflict-of-interest standards, policies and procedures for coordinating the management of corporate resources, and the leadership and commitment of top management. In compliance with Section 404 of the Sarbanes-Oxley Act of 2002, Linde assessed its internal control over financial reporting and issued a report (see below).
The Audit Committee of the Board of Directors, which consists solely of non-employee directors, is responsible for overseeing the functioning of the accounting system and related controls and the preparation of annual financial statements. The Audit Committee periodically meets with management, internal auditors and the independent registered public accounting firm to review and evaluate their accounting, auditing and financial reporting activities and responsibilities, including management’s assessment of internal control over financial reporting. The independent registered public accounting firm and internal auditors have full and free access to the Audit Committee and meet with the committee, with and without management present.
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Linde’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of management, including the company’s principal executive officer and principal financial officer, the company conducted an evaluation of the effectiveness of its internal control over financial reporting based on the framework in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (often referred to as COSO). Based on this evaluation, management concluded that the company’s internal control over financial reporting was effective as of December 31, 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/ SANJIV LAMBA | | /s/ KELCEY E. HOYT |
Sanjiv Lamba
Chief Executive Officer | | Kelcey E. Hoyt
Chief Accounting Officer |
/s/ MATTHEW J. WHITE | |
Matthew J. White
Chief Financial Officer | |
February 26, 2025 |
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.
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, $ 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/
, Connecticut
February 26, 2025
We have served as the Company’s or its predecessor’s auditor since 1992.
CONSOLIDATED STATEMENTS OF INCOME
LINDE PLC AND SUBSIDIARIES
(Dollar amounts in millions, except per share data)
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| Year Ended December 31, | 2024 | | 2023 | | 2022 |
| Sales | $ | | | | $ | | | | $ | | |
| Cost of sales, exclusive of depreciation and amortization | | | | | | | | |
| Selling, general and administrative | | | | | | | | |
| Depreciation and amortization | | | | | | | | |
| Research and development | | | | | | | | |
| Cost reduction program and other charges | | | | | | | | |
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| Other income (expense) - net | | | | () | | | () | |
| Operating Profit | | | | | | | | |
| Interest expense - net | | | | | | | | |
| Net pension and OPEB cost (benefit), excluding service cost | () | | | () | | | () | |
| Income Before Income Taxes and Equity Investments | | | | | | | | |
| Income taxes | | | | | | | | |
| Income Before Equity Investments | | | | | | | | |
| Income from equity investments | | | | | | | | |
| Net Income (Including Noncontrolling Interests) | | | | | | | | |
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| Less: noncontrolling interests | () | | | () | | | () | |
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| Net Income – Linde plc | $ | | | | $ | | | | $ | | |
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| Per Share Data – Linde plc Shareholders | | | | | |
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| Basic earnings per share | $ | | | | $ | | | | $ | | |
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| Diluted earnings per share | $ | | | | $ | | | | $ | | |
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| Weighted Average Shares Outstanding (000’s): | | | | | |
| Basic shares outstanding | | | | | | | | |
| Diluted shares outstanding | | | | | | | | |
The accompanying Notes are an integral part of these financial statements.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
LINDE PLC AND SUBSIDIARIES
(Dollar amounts in millions)
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| Year Ended December 31, | 2024 | | 2023 | | 2022 |
| NET INCOME (INCLUDING NONCONTROLLING INTERESTS) | $ | | | | $ | | | | $ | | |
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| OTHER COMPREHENSIVE INCOME (LOSS) | | | | | |
| Translation adjustments: | | | | | |
| Foreign currency translation adjustments | () | | | | | | () | |
| Reclassifications to net income | | | | | | | () | |
| Income taxes | | | | | | | | |
| Translation adjustments | () | | | | | | () | |
| Funded status - retirement obligations (Note 16): | | | | | |
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| Retirement program remeasurements | | | | () | | | | |
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| Reclassifications to net income | | | | () | | | | |
| Income taxes | () | | | | | | () | |
| Funded status - retirement obligations | | | | () | | | | |
| Derivative instruments (Note 12): | | | | | |
| Current year unrealized gain (loss) | () | | | () | | | | |
| Reclassifications to net income | | | | | | | () | |
| Income taxes | | | | | | | | |
| Derivative instruments | () | | | () | | | () | |
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| TOTAL OTHER COMPREHENSIVE INCOME (LOSS) | () | | | () | | | () | |
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| COMPREHENSIVE INCOME (INCLUDING NONCONTROLLING INTERESTS) | | | | | | | | |
| Less: noncontrolling interests | () | | | () | | | () | |
| COMPREHENSIVE INCOME - LINDE PLC | $ | | | | $ | | | | $ | | |
The accompanying Notes are an integral part of these financial statements.
CONSOLIDATED BALANCE SHEETS
LINDE PLC AND SUBSIDIARIES
(Dollar amounts in millions)
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| December 31, | 2024 | | 2023 |
| Assets | | | |
| Cash and cash equivalents | $ | | | | $ | | |
| Accounts receivable - net | | | | | |
| Contract assets | | | | | |
| Inventories | | | | | |
| Prepaid and other current assets | | | | | |
| Total Current Assets | | | | | |
| Property, plant and equipment - net | | | | | |
| Equity investments | | | | | |
| Goodwill | | | | | |
| Other intangible assets – net | | | | | |
| Other long-term assets | | | | | |
| Total Assets | $ | | | | $ | | |
| Liabilities and Equity | | | |
| Accounts payable | $ | | | | $ | | |
| Short-term debt | | | | | |
| Current portion of long-term debt | | | | | |
| Contract liabilities | | | | | |
| Accrued taxes | | | | | |
| Other current liabilities | | | | | |
| Total Current Liabilities | | | | | |
| Long-term debt | | | | | |
| Other long-term liabilities | | | | | |
| Deferred credits | | | | | |
| Total Liabilities | | | | | |
| Commitments and contingencies (Note 17) | | | |
| Redeemable noncontrolling interests | | | | | |
| Linde plc Shareholders’ Equity: | | | |
Ordinary shares, € par value, authorized shares, 2024 and 2023 issued: ordinary shares | | | | | |
| Additional paid-in capital | | | | | |
| Retained earnings | | | | | |
| Accumulated other comprehensive income (loss) | () | | | () | |
Less: Treasury shares, at cost (2024 – shares and 2023 – shares) | () | | | () | |
| Total Linde plc Shareholders’ Equity | | | | | |
| Noncontrolling interests | | | | | |
| Total Equity | | | | | |
| Total Liabilities and Equity | $ | | | | $ | | |
The accompanying Notes are an integral part of these financial statements.
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 | $ | | | | $ | | | | $ | | |
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| Add: Noncontrolling interests | | | | | | | | |
| Net Income (including noncontrolling interests) | $ | | | | $ | | | | $ | | |
| Adjustments to reconcile net income to net cash provided by operating activities: | | | | | |
| Cost reduction program and other charges | | | | () | | | | |
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| Depreciation and amortization | | | | | | | | |
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| Deferred income taxes | () | | | () | | | () | |
| Share-based compensation | | | | | | | | |
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| Non-cash charges and other | () | | | | | | () | |
| Working capital | | | | | |
| Accounts receivable | () | | | () | | | () | |
| Contract assets and liabilities, net | () | | | () | | | | |
| Inventory | | | | () | | | () | |
| Prepaid and other current assets | () | | | | | | () | |
| Payables and accruals | () | | | () | | | | |
| Pension contributions | () | | | () | | | () | |
| Long-term assets, liabilities and other | () | | | () | | | | |
| Net cash provided by operating activities | | | | | | | | |
| | |
| | |
| Investing | | | | | |
| Capital expenditures | () | | | () | | | () | |
| Acquisitions, net of cash acquired | () | | | () | | | () | |
| | |
| Divestitures, net of cash divested and asset sales | | | | | | | | |
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| Net cash used for investing activities | () | | | () | | | () | |
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| Financing | | | | | |
| Short-term debt borrowings (repayments) – net | () | | | | | | | |
| Long-term debt borrowings | | | | | | | | |
| Long-term debt repayments | () | | | () | | | () | |
| Issuances of ordinary shares | | | | | | | | |
| Purchases of ordinary shares | () | | | () | | | () | |
| Cash dividends - Linde plc shareholders | () | | | () | | | () | |
| | |
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| Noncontrolling interest transactions and other | () | | | () | | | () | |
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| Net cash used for financing activities | () | | | () | | | () | |
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| Effect of exchange rate changes on cash and cash equivalents | () | | | () | | | () | |
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| Change in cash and cash equivalents | | | | () | | | | |
| Cash and cash equivalents, beginning-of-period | | | | | | | | |
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| Cash and cash equivalents, end-of-period | $ | | | | $ | | | | $ | | |
| | | | | |
| Supplemental Data | | | | | |
| Income taxes paid | $ | | | | $ | | | | $ | | |
| Interest paid, net of capitalized interest | $ | | | | $ | | | | $ | | |
The accompanying Notes are an integral part of these financial statements.
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 | | | | | | | | | | | | | | | | | |
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Balance, December 31, 2021 | | | | $ | | | | $ | | | | $ | | | | $ | () | | | | | | $ | () | | | $ | | | | $ | | | | $ | | | | | | | | | | | | | | | | | | |
| Net Income available for Linde plc shareholders | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Other comprehensive income (loss) | | | | | | | | | () | | | | | | | () | | | () | | | () | | | | | | | | | | | | | | | | | |
| Noncontrolling interests: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Dividends and other capital reductions | | | | | | | | | | | | | | | — | | | () | | | () | | | | | | | | | | | | | | | | | |
| Additions (Reductions) (Note 14) | | | | | | | | | | | | | | | — | | | () | | | () | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends ($ per ordinary share) | | | | | | | () | | | | | | | | | () | | | | | () | | | | | | | | | | | | | | | | | |
| Issuances of ordinary shares: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| For employee savings and incentive plans | | | | | () | | | | | | | | () | | | | | | () | | | | | () | | | | | | | | | | | | | | | | | |
| Purchases of ordinary shares | | | | | | | | | | | | | | () | | | () | | | | | () | | | | | | | | | | | | | | | | | |
| Share-based compensation | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance, December 31, 2022 | | | | $ | | | | $ | | | | $ | | | | $ | () | | | | | | $ | () | | | $ | | | | $ | | | | $ | | | | | | | | | | | | | | | | | | |
| Net Income available for Linde plc shareholders | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Other comprehensive income (loss) | | | | | | | | | () | | | | | | | () | | | () | | | () | | | | | | | | | | | | | | | | | |
| Noncontrolling interests: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Dividends and other capital reductions | | | | | | | | | | | | | | | — | | | () | | | () | | | | | | | | | | | | | | | | | |
| Additions (Reductions) | | | | | () | | | | | | | | | | | () | | | () | | | () | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends ($ per ordinary share) | | | | | | | () | | | | | | | | | () | | | | | () | | | | | | | | | | | | | | | | | |
| Issuances of ordinary shares: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| For employee savings and incentive plans | | | | | () | | | () | | | | | () | | | | | | () | | | | | () | | | | | | | | | | | | | | | | | |
| Purchases of ordinary shares | | | | | | | | | | | | | | () | | | () | | | | | () | | | | | | | | | | | | | | | | | |
| Share-based compensation | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Intercompany reorganization (Note 14) | () | | | | | | | () | | | | | () | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance, December 31, 2023 | | | | $ | | | | $ | | | | $ | | | | $ | () | | | | | | $ | () | | | $ | | | | $ | | | | $ | | | | | | | | | | | | | | | | | | |
| Net Income available for Linde plc shareholders | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Other comprehensive income (loss) | | | | | | | | | () | | | | | | | () | | | () | | | () | | | | | | | | | | | | | | | | | |
| Noncontrolling interests: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Dividends and other capital reductions | | | | | | | | | | | | | | | — | | | () | | | () | | | | | | | | | | | | | | | | | |
| Additions (Reductions) | | | | | | | | | | | | | | | — | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends ($ per ordinary share) | | | | | | | () | | | | | | | | | () | | | | | () | | | | | | | | | | | | | | | | | |
| Issuances of ordinary shares: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| For employee savings and incentive plans | | | | | () | | | () | | | | | () | | | | | | () | | | | | () | | | | | | | | | | | | | | | | | |
| Purchases of ordinary shares | | | | | | | | | | | | | | () | | | () | | | | | () | | | | | | | | | | | | | | | | | |
| Share-based compensation | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Balance, December 31, 2024 | | | | $ | | | | $ | | | | $ | | | | $ | () | | | | | | $ | () | | | $ | | | | $ | | | | $ | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 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.
| | $ | | | | $ | | | | Denominator (Thousands of shares) | | | | | |
| Weighted average shares outstanding | | | | | | | | |
| Shares earned and issuable under compensation plans | | | | | | | | |
| Weighted average shares used in basic earnings per share | | | | | | | | |
| Effect of dilutive securities | | | | | |
| Stock options and awards | | | | | | | | |
| Weighted average shares used in diluted earnings per share | | | | | | | | |
| | | | | |
| Basic Earnings Per Share | $ | | | | $ | | | | $ | | |
| Diluted Earnings Per Share | $ | | | | $ | | | | $ | | |
The weighted-average of antidilutive securities excluded from the calculation of diluted earnings per share was thousand for the twelve months ended December 31, 2024. There were antidilutive securities in the respective 2023 and 2022 periods.
NOTE 7.
| | $ | | | | $ | | | | General and administrative | | | | | | | | |
| $ | | | | $ | | | | $ | | |
| | $ | | | | $ | | | Amortization of intangibles (Note 10) | | | | | | | | |
| Depreciation and Amortization | $ | | | | $ | | | | $ | | |
) | | $ | () | | | $ | () | | | Partnership income | | | | | | | | |
| | |
| Severance expense | () | | | () | | | () | |
| Asset divestiture gains (losses) – net | | | | | | | () | |
| Insurance recoveries | | | | | | | | |
| Other – net gains (losses) | | | | — | | | () | |
| $ | | | | $ | () | | | $ | () | |
| | $ | | | | $ | | | | Interest income | () | | | () | | | () | |
| Amortization on acquired debt | () | | | () | | | () | |
| Interest capitalized | () | | | () | | | () | |
| $ | | | | $ | | | | $ | | |
Balance Sheet
| | $ | | | | Less: allowance for expected credit losses | () | | | () | |
| $ | | | | $ | | |
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 $ million and $ million at December 31, 2024 and December 31, 2023,
million and $ million at December 31, 2024 and December 31, 2023, respectively. Gross other receivables were $ million and $ 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 $ million, $ million and $ 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.
| | $ | | | | Work in process | | | | | |
| Finished goods | | | | | |
| $ | | | | $ | | |
| | $ | | | | VAT recoverable | | | | | |
Unrealized gains on derivatives (Note 12) | | | | | |
| Other (c) | | | | | |
| $ | | | | $ | | |
| | $ | | | | Insurance contracts (d) | | | | | |
| Long-term receivables, net (e) | | | | | |
Lease assets (Note 4) | | | | | |
| Deposits | | | | | |
| Investments carried at cost (f) (Note 17) | | | | | |
| Deferred charges | | | | | |
Deferred income taxes (Note 5) | | | | | |
Unrealized gains on derivatives (Note 12) | | | | | |
| Other | | | | | |
| $ | | | | $ | | |
| | $ | | | | Payroll | | | | | |
| VAT payable | | | | | |
Pension and postretirement (Note 16) | | | | | |
| Interest payable | | | | | |
Lease liability (Note 4) | | | | | |
| Insurance reserves | | | | | |
Unrealized losses on derivatives (Note 12) | | | | | |
|
Cost reduction programs and other charges (Note 3) | | | | | |
| Other | | | | | |
| $ | | | | $ | | |
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.
| | $ | | | Tax liabilities for uncertain tax positions (Note 5) | | | | | |
| Tax Act liabilities (g) | | | | | |
|
Lease liability (Note 4) | | | | | |
Interest and penalties for uncertain tax positions (Note 5) | | | | | |
| Insurance reserves | | | | | |
| Asset retirement obligation | | | | | |
Unrealized losses on derivatives (Note 12) | | | | | |
Cost reduction programs and other charges (Note 3) | | | | | |
Contingent liabilities (Note 17) | | | | | |
| Other | | | | | |
| $ | | | | $ | | |
| | $ | | | Contract liabilities (Note 19) | | | | | |
| $ | | | | $ | | |
) | | $ | () | | | EMEA (h) | () | | | () | |
| APAC (h) | () | | | () | |
| Engineering | () | | | () | |
| Other | | | | | |
| () | | | () | |
| Derivatives – net of taxes | () | | | | |
|
|
|
|
|
|
|
|
|
|
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.
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.
| | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
Forecasted transactions | | | | | | | | | | | | | | | | | |
| Total | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
| Derivatives Designated as Hedging Instruments: | | | | | | | | | | | |
| Currency contracts: | | | | | | | | | | | |
| Forecasted transactions | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
| Forward exchange contracts | | | | | | | | | | | | | | | | | |
| Commodity contracts | N/A | | N/A | | | | | | | | | | | | |
| Interest rate swaps | | | | | | | | | | | | | | | | | |
| Total Hedges | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
| Total Derivatives | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
million and $ million, which are recorded in prepaid and other current assets; long-term assets of $ million and $ million, which are recorded in other long-term assets; current liabilities of $ million and $ million, which are recorded in other current liabilities; and long-term liabilities of $ million and $ 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 $ million and $ million for the two programs as of December 31, 2024, will reduce on a monthly basis over their respective -month and -month terms. As of December 31, 2024, the fair value of both derivative liabilities were not material.
. 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 .
Net Investment Hedges
Foreign Currency-Denominated Debt Designations
As of December 31, 2024, Linde has € billion ($ billion) Euro-denominated notes and intercompany loans, ¥ billion ($ billion) CNY-denominated intercompany loans, and C$ billion ($ 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 $ million (deferred gain of $ 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 $ 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 $ 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
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 .Derivatives Impact on Consolidated Statements of Income
| | $ | | | | $ | | | | Other balance sheet items | | | | () | | | | |
| Total | $ | | | | $ | | | | $ | | |
* 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.
| | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | Investments and securities * | | | | | | | | | | | | | | | | | |
| Total | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
| Liabilities | | | | | | | | | | | |
| Derivative liabilities | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
*Investments and securities are recorded in prepaid and other current assets and other long-term assets in the company's consolidated balance sheets.
million versus a carrying value of $ million. At December 31, 2023, the estimated fair value of Linde’s long-term debt portfolio was $ million versus a carrying value of $ 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.
share of the new holding company in exchange for each share of Linde plc that was previously owned. The company issued new Linde shares. Linde plc's historical treasury shares were immediately canceled which resulted in an approximate $ 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 € divided into ordinary shares of € each, A ordinary shares of € each, deferred shares of € each and preferred shares of € each.
At December 31, 2024 there were and of Linde plc ordinary shares issued and outstanding, respectively. At December 31, 2024 there were shares of A ordinary shares, deferred shares or preferred shares issued or outstanding.
At December 31, 2023 there were and of Linde plc ordinary shares issued and outstanding, respectively. At December 31, 2023, there were 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. 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 $ billion of its ordinary shares under which Linde had repurchased 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 $ billion of its ordinary shares ("2022 program") under which Linde had repurchased 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 $ billion of its ordinary shares ("2023 program") under which Linde has repurchased $ billion as of December 31, 2024. This
NOTE 15.
million in 2024 ($ million and $ million in 2023 and 2022, respectively). The related income tax benefit recognized was $ million in 2024 ($ million and $ 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, shares remained available for equity grants under the 2021 Plan, of which 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 $ ($ in 2023 and $ 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.
% | | | % | | | % | | Volatility | | % | | | % | | | % |
| Risk-free interest rate | | % | | | % | | | % |
| Expected term years | | | | | |
| | | | | $ | | | | | | |
| Granted | | | | | | | | | |
| Exercised | () | | | | | | | | |
| Cancelled or expired | () | | | | | | | | |
| Outstanding at December 31, 2024 | | | | $ | | | | | | $ | | |
| Exercisable at December 31, 2024 | | | | $ | | | | | | $ | | |
The aggregate intrinsic value represents the difference between the company’s closing stock price of $ 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 $ million ($ million and $ million in 2023 and 2022, respectively).
Cash received from option exercises under all share-based payment arrangements for 2024 was $ million ($ million and $ million in 2023 and 2022, respectively). The cash tax benefit realized from share-based compensation totaled $ million for 2024 ($ million and $ million cash tax benefit in 2023 and 2022, respectively).
As of December 31, 2024, $ million of unrecognized compensation cost related to non-vested stock options is expected to be recognized over a weighted-average period of approximately year.
Performance-Based and Restricted Stock Unit Awards
In 2024, the company granted 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 to percent of the target number of shares granted based upon the company’s attainment of specified performance targets at the end of a period. Compensation expense related to these awards is recognized over the 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 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 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 performance period.
The weighted-average fair value of ROC awards granted in 2024 was $ ($ in 2023 and $ 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 $ ($ in 2023 and $ in 2022) and was estimated using a Monte Carlo simulation performed as of the grant date.
There were restricted stock units granted to employees by Linde during 2024. The weighted-average fair value of restricted stock units granted during 2024 was $ ($ in 2023 and $ 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.
| | $ | | | | | | | $ | | | | Granted | | | | | | | | | | | |
| Vested | () | | | | | | () | | | | |
| Cancelled and Forfeited | () | | | | | | () | | | | |
| Non-vested at December 31, 2024 | | | | $ | | | | | | | $ | | |
There are approximately thousand performance-based stock units and 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, $ million of unrecognized compensation cost related to performance-based awards and $ 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.
% 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 multi-employer defined benefit pension plans ("MEPs"), pursuant to the terms of collective bargaining agreements, that cover approximately 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
% 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 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 Linde 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 $ million in 2024, $ million in 2023 and $ 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 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 $ million in 2024, $ million in 2023 and $ 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
| | $ | | | | $ | | | | Amount recognized in Net pension and OPEB cost (benefit), excluding service cost | | | | | |
| Interest cost | | | | | | | | |
| Expected return on plan assets | () | | | () | | | () | |
| Net amortization and deferral | () | | | () | | | | |
| | |
| Settlement charges (a) | | | | | | | | |
| $ | () | | | $ | () | | | $ | () | |
| | |
| Net periodic benefit cost (benefit) | $ | () | | | $ | () | | | $ | () | |
(a) Settlement charges were triggered by lump sum benefit payments.
Funded Status
| | $ | | | | $ | | | | $ | | | | Service cost | | | | | | | | | | | |
| Interest cost | | | | | | | | | | | |
| | | | |
| Participant contributions | | | | | | | | | | | |
| | | | |
| Actuarial loss (gain) | () | | | () | | | | | | | |
| Benefits paid | () | | | () | | | () | | | () | |
| Plan settlement | () | | | () | | | () | | | () | |
| | | | |
| Foreign currency translation and other changes | | | | () | | | | | | | |
| Benefit obligation, December 31 | $ | | | | $ | | | | $ | | | | $ | | |
| Accumulated benefit obligation ("ABO") | $ | | | | $ | | | | $ | | | | $ | | |
| Change in Plan Assets | | | | | | | |
| Fair value of plan assets, January 1 | $ | | | | $ | | | | $ | | | | $ | | |
| Actual return on plan assets | | | | | | | | | | | |
| Company contributions | | | | | | | | | | | |
| Participant contributions | | | | | | | | | | | |
| Benefits paid from plan assets | () | | | () | | | () | | | () | |
| | | | |
| Foreign currency translation and other changes | | | | () | | | | | | | |
| Fair value of plan assets, December 31 | $ | | | | $ | | | | $ | | | | $ | | |
| Funded Status, End of Year | $ | | | | $ | | | | $ | () | | | $ | () | |
Recorded in the Balance Sheet (Note 7) | | | | | | | |
| Other long-term assets | $ | | | | $ | | | | $ | | | | $ | | |
| Other current liabilities | () | | | () | | | () | | | () | |
| Other long-term liabilities | () | | | () | | | () | | | () | |
| Net amount recognized, December 31 | $ | | | | $ | | | | $ | () | | | $ | () | |
| Amounts recognized in accumulated other comprehensive income (loss) consist of: | | | | | | | |
| Net actuarial loss (gain) | $ | | | | $ | () | | | $ | | | | $ | | |
| Prior service cost (credit) | () | | | — | | | () | | | | |
Deferred tax obligation (benefit) (Note 7) | () | | | | | | () | | | | |
Amount recognized in accumulated other comprehensive income (loss) (Note 7) | $ | | | | $ | () | | | $ | | | | $ | | |
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:
| | $ | | | | $ | | | | $ | | | | Fair value of plan assets, December 31 | | | | | | | | | | | |
| Funded Status, End of Year | $ | | | | $ | () | | | $ | () | | | $ | | |
| | | | | | | |
| | United Kingdom | | Germany | | Other Non-U.S. | | Total Non-U.S. |
| (Millions of dollars) | 2023 | | 2023 | | 2023 | | 2023 |
| Benefit obligation, December 31 | $ | | | | $ | | | | $ | | | | $ | | |
| Fair value of plan assets, December 31 | | | | | | | | | | | |
| Funded Status, End of Year | $ | | | | $ | () | | | $ | () | | | $ | () | |
) | | $ | | | | Amortization of net actuarial gains (losses) | | | | | |
|
|
| Amortization of prior service credits (costs) | | | | | |
| Pension settlements | () | | | () | |
|
| Foreign currency translation and other changes | | | | — | |
| Total recognized in other comprehensive income | $ | () | | | $ | | |
* 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.
| | $ | | | | $ | | | | $ | | | | Fair value of plan assets | $ | | | | $ | | | | $ | | | | $ | | |
| | $ | | | | $ | | | | $ | | | | Fair value of plan assets | $ | | | | $ | | | | $ | | | | $ | | |
% | | | % | | | % | | | % | | Interest crediting rate | | % | | | % | | | % | | | % |
| Rate of increase in compensation levels | | % | | | % | | | % | | | % |
| Weighted average assumptions used to determine net periodic benefit cost for years ended December 31, | | | | | | | |
| Discount rate | | % | | | % | | | % | | | % |
| Interest crediting rate | | % | | | % | | | % | | | % |
| Rate of increase in compensation levels | | % | | | % | | | % | | | % |
| Expected long-term rate of return on plan assets (1) | | % | | | % | | | % | | | % |
(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 performance.
For the U.S. plans, the expected rate of return of % was derived based on the target asset allocation of %-% equity securities (approximately % expected return), %-% fixed income securities (approximately % expected return) and %-% alternative investments (approximately % 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 %-% equity securities (approximately % expected return), %-% fixed income securities (approximately % expected return), and %-% alternative investments (approximately % expected return).
For the U.S. plan assets, the actual annualized total return for the most recent -year period ended December 31, 2024 was approximately %. For the non-U.S. plan assets, the actual annualized total return for the same period was approximately %. 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 % for the U.S. plans and % 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.
%- | % | | % | - | % | | % | | % | | % | - | % | | % | - | % | | % | | % | | Fixed income securities | % | - | % | | % | - | % | | % | | % | | % | - | % | | % | - | % | | % | | % |
| Other | % | - | % | | % | - | % | | % | | % | | % | - | % | | % | - | % | | % | | % |
| | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | Equity securities: | | | | | | | | | | | | | | | |
| Global equities | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | |
| Mutual funds | | | | | | | | | | | | | | | | | | | | | | | |
| Fixed income securities: | | | | | | | | | | | | | | | |
| Government bonds | | | | | | | | | | | | | | | | | | | | | | | |
| Emerging market debt | | | | | | | | | | | | | | | | | | | | | | | |
| Mutual funds | | | | | | | | | | | | | | | | | | | | | | | |
| Corporate bonds | | | | | | | | | | | | | | | | | | | | | | | |
| Bank loans | | | | | | | | | | | | | | | | | | | | | | | |
| Alternative investments: | | | | | | | | | | | | | | | |
| Real estate funds | | | | | | | | | | | | | | | | | | | | | | | |
| Private debt | | | | | | | | | | | | | | | | | | | | | | | |
| Insurance contracts | | | | | | | | | | | | | | | | | | | | | | | |
| Liquid alternatives | | | | | | | | | | | | | | | | | | | | | | | |
| Other investments | | | | | | | | | | | | | | | | | | | | | | | |
Total plan assets at fair value,
December 31, | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
| Pooled funds * | | | | | | | | | | | | | | | | | |
Total fair value plan assets
December 31, | | | | | | | | | | | | | $ | | | | $ | | |
| | $ | | | | $ | | | | $ | | | | Gain/(Loss) for the period | | | | () | | | () | | | () | |
| | | | |
| Purchases | | | | | | | | | | | |
| Sales | | | | () | | | () | | | () | |
| Transfer into/ (out of) Level 3 | | | | | | | | | | | |
| Foreign currency translation | | | | | | | | | | | |
Balance, December 31, 2023 | | | | | | | | | | | |
| Gain/(Loss) for the period | | | | | | | () | | | | |
| | | | |
| Purchases | | | | | | | | | | | |
| Sales | | | | () | | | () | | | () | |
| Transfer into / (out of) Level 3 | | | | | | | | | | | |
| Foreign currency translation | () | | | () | | | () | | | () | |
Balance, December 31, 2024 | $ | | | | $ | | | | $ | | | | $ | | |
The descriptions and fair value methodologies for the company's pension plan assets are as follows:
million in 2024, $ million in 2023 and $ million in 2022. Estimated required contributions for 2025 are currently expected to be in the range of $ million to $ million. Estimated Future Benefit Payments
| | $ | | | | 2026 | | | | | |
| 2027 | | | | | |
| 2028 | | | | | |
| 2029 | | | | | |
| Thereafter | | | | | |
NOTE 17.
per share. Any such increase would apply to all 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
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 % of the relevant company’s overall asset value. RusChemAlliance is owned % 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 € 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.
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 $ 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 $ 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.
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 of the company's reportable segments - Americas, EMEA (Europe/Middle East/Africa), and APAC (Asia/South Pacific); a 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 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 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
| | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | Variable Costs (b) | | | | | | | | | | | | | | | | | | |
| Fixed Costs and other (c) | | | | | | | | | | | | | | | | | | |
| Depreciation and amortization (d) | | | | | | | | | | | | | | | | | | |
| Operating Profit (e) | | | | | | | | | | | | | | | | | | |
| Expenditures for long-lived assets | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
| 2023 | | | | | | | | | | | | |
| Sales (a) | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
| Variable Costs (b) | | | | | | | | | | | | | | | | | | |
| Fixed Costs and other (c) | | | | | | | | | | | | | | | | | | |
| Depreciation and amortization (d) | | | | | | | | | | | | | | | | | | |
| Operating Profit (e) | | | | | | | | | | | | | | | | | | |
| Expenditures for long-lived assets | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
| 2022 | | | | | | | | | | | | |
| Sales (a) | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
| Variable Costs (b) | | | | | | | | | | | | | | | | | | |
| Fixed Costs and other (c) | | | | | | | | | | | | | | | | | | |
| Depreciation and amortization (d) | | | | | | | | | | | | | | | | | | |
| Operating Profit (e) | | | | | | | | | | | | | | () | | | | |
| Expenditures for long-lived assets | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
(a)Sales reflect external sales only. Intersegment sales from Engineering to the industrial gases segments, were $ million, $ million and $ million for the year ended December 31, 2024, 2023 and 2022, respectively. Intersegment sales from Helium, were $ million, $ million, $ 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
| | $ | | | | $ | | | | Purchase accounting impacts - Linde AG | | | | | | | | | |
| Total depreciation and amortization | | $ | | | | $ | | | | $ | | |
| | $ | | | | $ | | | | Cost reduction program and other charges | | | | | | | | | |
| Purchase accounting impacts - Linde AG | | | | | | | | | |
| Interest expense - net | | | | | | | | | |
| Net pension and OPEB cost (benefit), excluding service cost | | () | | | () | | | () | |
| Total consolidated income before income taxes and equity investments | | $ | | | | $ | | | | $ | | |
Geographic Information
The geographic information presented below is based on country of origin.
| | $ | | | | $ | | | | China | | | | | | | | | |
| Germany (a) | | | | | | | | | |
| United Kingdom | | | | | | | | | |
| Australia | | | | | | | | | |
| Mexico | | | | | | | | | |
| Brazil | | | | | | | | | |
| Other – non-U.S. | | | | | | | | | |
| Total Sales | | $ | | | | $ | | | | $ | | |
(a)Sales in Germany include Engineering sales to third parties, locally and internationally, which represent %, % and % of Germany sales in 2024, 2023 and 2022, respectively.
| | $ | | | | $ | | | | China | | | | | | | | | |
| Germany | | | | | | | | | |
| Brazil | | | | | | | | | |
| Mexico | | | | | | | | | |
| United Kingdom | | | | | | | | | |
| Australia | | | | | | | | | |
| Other – non-U.S. | | | | | | | | | |
| Total long-lived assets (a) | | $ | | | | $ | | | | $ | | |
NOTE 19.
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 distribution methods.Following is a description of each of the 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 - 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 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 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.
million at December 31, 2024 and $ million at December 31, 2023, respectively. Total contract liabilities are $ million at December 31, 2024 (current contract liabilities of $ million and $ million within deferred credits in the consolidated balance sheets). Total contract liabilities were $ million at December 31, 2023 (current contract liabilities of $ million and $ 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 $ 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.
| $ | | | $ | | | $ | | | $ | | | $ | | | | % | | On-Site | | | | | | | | | | | | | | % |
| Packaged Gas | | | | | | | | | | | | | | % |
| Other | | | | | | | | | | | | | | % |
| $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | | % |
|
| (Millions of dollars) | Year Ended December 31, 2023 |
| Sales | Americas | EMEA | APAC | Engineering | Other | Total | % |
| | | | |
| Merchant | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | | % |
| On-Site | | | | | | | | | | | | | | % |
| Packaged Gas | | | | | | | | | | | | | | % |
| Other | | | | | | | | | | | | | | % |
| $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | | % |
| | | | | | | |
| (Millions of dollars) | Year Ended December 31, 2022 |
| Sales | Americas | EMEA | APAC | Engineering | Other | Total | % |
| | | | |
| Merchant | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | | % |
| On-Site | | | | | | | | | | | | | | % |
| Packaged Gas | | | | | | | | | | | | | | % |
| Other | | | | | | | | | | | | | | % |
| $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | | % |
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 $ 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 . The company estimates that approximately half of the revenue related to minimum purchase requirements will be earned in the next and the remaining thereafter.
NOTE 20.
million of % notes due in 2029, € million of % notes due in 2033 and € million of % notes due in 2037. Linde redeemed $ million of % notes that were due in 2025.ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
Based on an evaluation of the effectiveness of Linde’s disclosure controls and procedures, which was made under the supervision and with the participation of management, including Linde’s principal executive officer and principal financial officer, the principal executive officer and principal financial officer have each concluded that, as of December 31, 2024, such disclosure controls and procedures are effective in ensuring that information required to be disclosed by Linde in reports that it files or submits under the Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and accumulated and communicated to management including Linde’s principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.
Management’s Report on Internal Control Over Financial Reporting
Refer to Item 8 for Management’s Report on Internal Control Over Financial Reporting as of December 31, 2024.
Changes in Internal Control over Financial Reporting
There were no changes in Linde’s internal control over financial reporting that occurred during the quarter ended December 31, 2024 that have materially affected, or are reasonably likely to materially affect, Linde’s internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
None.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Certain information required by this item is incorporated herein by reference to the sections captioned “Corporate Governance and Board Matters - Director Nominees," "Corporate Governance And Board Matters - Insider Trading Policy," and "Corporate Governance and Board Matters - "Delinquent Section 16 (a) Reports" in Linde’s Proxy Statement.
Identification of the Audit Committee
Linde has a separately-designated standing Audit Committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934 as amended (the “Exchange Act”). The members of that audit committee are Alberto Weisser (chairman), Dr. Thomas Enders, Dr. Victoria Ossadnik and Paula Reynolds and each member is independent within the meaning of the independence standards adopted by the Board of Directors and those of the Nasdaq.
Audit Committee Financial Expert
The Linde Board of Directors has determined that Alberto Weisser satisfies the criteria by the SEC to serve as an “audit committee financial expert” as defined by Item 407(d)(5)(ii) of Regulation S-K of the Exchange Act and is independent within the meaning of the independence standards adopted by the Board of Directors and those of the Nasdaq.
Code of Ethics
Linde has adopted a code of ethics that applies to the company’s directors and all employees, including its Chief Executive Officer, Chief Financial Officer, and Chief Accounting Officer. This code of ethics, including specific standards for implementing certain provisions of the code, has been approved by the Linde Board of Directors and is named the “Code of Business Integrity”. This document is posted on the company’s public website, www.linde.com but is not incorporated herein.
ITEM 11. EXECUTIVE COMPENSATION
Information required by this item is incorporated herein by reference to the sections captioned “Executive Compensation Matters” and “Corporate Governance and Board Matters - Director Compensation” in Linde’s Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Equity Compensation Plans Information - The table below provides information as of December 31, 2024 about company shares that may be issued upon the exercise of options, warrants and rights granted to employees or members of Linde’s Board of Directors under equity compensation plans with awards outstanding as of December 31, 2024.
EQUITY COMPENSATION PLANS TABLE
| | | | | | | | | | | | | | | | | | | | |
| Plan Category | Number of securities to
be issued upon exercise
of outstanding options,
warrants and rights (a) | | Weighted-average
exercise price of
outstanding options,
warrants and rights (b) | | Number of securities
remaining available for
future issuance under
equity compensation plans
(excluding securities
reflected in column (a)) (c) | |
| Equity compensation plans approved by shareholders | 6,172,294 | | (1) | $ | 204.50 | | | 7,149,967 | | (2) |
| Equity compensation plans not approved by shareholders | — | | | — | | | — | | |
| Total | 6,172,294 | | | $ | 204.50 | | | 7,149,967 | | |
________________________
(1)This amount includes 591,549 restricted shares and 557,813 performance shares.
(2)This amount reflects shares available for future issuances pursuant to the 2021 Linde plc Long Term Incentive Plan that was approved by shareholders on July 26, 2021.
Certain information required by this item regarding the beneficial ownership of the company’s ordinary shares is incorporated herein by reference to the section captioned “Information on Share Ownership” in Linde’s Proxy Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
Information required by this item is incorporated herein by reference to the sections captioned “Corporate Governance And Board Matters – Review, Approval or Ratification of Transactions with Related Persons,” “Corporate Governance And Board Matters – Certain Relationships and Transactions,” and “Corporate Governance And Board Matters – Director Independence” in Linde’s Proxy Statement.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Information required by this item is incorporated herein by reference to the section captioned “Audit Matters” in Linde’s Proxy Statement.
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a)The following documents are filed as part of this report:
(i)The company’s 2024 Consolidated Financial Statements and the Report of the Independent Registered Public Accounting Firm are included in Part II, Item 8. Financial Statements and Supplementary Data.
(ii)Financial Statement Schedules – All financial statement schedules have been omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.
(iii)Exhibits – The exhibits filed as part of this Annual Report on Form 10-K are listed in the accompanying index.
INDEX TO EXHIBITS
Linde plc and Subsidiaries
| | | | | | | | |
| Exhibit No. | | Description |
| |
| 2.1 | | Business Combination Agreement by and among Linde Aktiengesellschaft, Praxair, Inc., Zamalight PLC, Zamalight Holdco LLC and Zamalight Subco, Inc. dated as of June 1, 2017 (Filed as Exhibit 2.1 to Praxair, Inc.'s Current Report on Form 8-K dated June 1, 2017, Filing No. 1-11037, and is incorporated herein by reference.) |
| | |
| 2.1a | | Amendment No. 1, dated August 10, 2017, to the Business Combination Agreement, by and among Praxair, Inc., Linde Aktiengesellschaft, Linde plc, Zamalight Holdco LLC and Zamalight Subco, Inc. (Filed as Exhibit 2.1 to Praxair, Inc.'s Current Report on Form 8-K dated August 10, 2017, Filing No. 1-11037, and is incorporated hereby by reference.) |
| | |
| **2.2 | | |
| |
| **2.3 | | Sale and Purchase Agreement, dated July 16, 2018, by and among Linde AG, Praxair, Inc., MG Industries GmbH, Messer Canada Inc., MG Industries USA, Inc. (the MG entities and Messer Canada, Inc. being collectively referred to as “Messer”), and Linde plc with respect to the sale of certain assets of Linde AG in the Americas and certain assets of Praxair, Inc. to Messer in connection with the Business Combination Agreement (Filed as Exhibit 2.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2018, File No. 1-38730, and is incorporated hereby by reference). |
| |
| **2.3a | | First Amendment dated September 21, 2018 to the Sale and Purchase Agreement, dated July 16, 2018, by and among Linde AG, Praxair, Inc., Messer, and Linde plc with respect to the sale of certain additional assets of Linde AG in the Americas to Messer in connection with the Business Combination Agreement (Filed as Exhibit 2.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2018, File No. 1-38730, and is incorporated hereby by reference). |
| |
| **2.3b | | Second Amendment dated October 19, 2018 to the Sale and Purchase Agreement, dated July 16, 2018, as amended by the First Amendment thereto, by and among Linde AG, Praxair, Inc., Messer, and Linde plc, with respect to the sale of certain additional assets of Linde AG in the Americas to Messer in connection with the Business Combination Agreement (Filed as Exhibit 2.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2018, File No. 1-11037, and is incorporated hereby by reference). |
| | |
| **2.3c | | Third Amendment dated February 20, 2019 to the Sale and Purchase Agreement, dated July 16, 2018, as amended by the First and Second Amendment thereto, by and among Linde AG, Praxair, Inc., Messer, and Linde plc, with respect to the sale of certain additional assets of Linde AG in the Americas to Messer in connection with the Business Combination Agreement dated as of June 1, 2017, as amended, to effect a combination of the businesses of Linde AG and Praxair, Inc. (Filed as Exhibit 2.4 to the Company’s Current Report on Form 8-K, filed on March 7, 2019, File No. 1-11037, and is incorporated hereby by reference). |
| |
| 3.01 | | |
| |
| 4.01 | | |
| | |
| | | | | | | | |
| Exhibit No. | | Description |
| |
| 4.02 | | Indenture, dated as of July 15, 1992, between Praxair, Inc. and U.S. Bank National Association, as the ultimate successor trustee to Bank of America, Illinois, formerly Continental Bank, National Association (Filed as Exhibit 4 to Praxair, Inc.'s Current Report on Form 8-K dated March 19, 2007, Filing No. 1-11037, and incorporated herein by reference). |
| | |
| 4.03 | | |
| |
| 4.04 | | |
| |
| 4.05 | | |
| | |
| 4.06 | | |
| | |
| 4.07 | | Supplemental Indenture, dated as of March 1, 2023, by and among the Company, Linde Inc., Linde GmbH and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), as trustee, to that certain indenture, dated as of July 15, 1992, by and among Linde Inc. and U.S. Bank National Association, as trustee (Filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed on March 1, 2023, File No. 001-38730, and incorporated herein by reference). |
| | |
| 4.08 | | Supplemental Indenture, dated as of March 1, 2023, by and among the Company, Linde Inc., Linde GmbH and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), as trustee, to that certain indenture, dated as of August 10, 2020, by and among Linde Inc., the Predecessor and U.S. Bank National Association, as trustee(Filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K, filed on March 1, 2023, File No. 001-38730, and incorporated herein by reference). |
| | |
| 4.09 | | Supplemental Indenture, dated as of September 3, 2019, among Linde plc, Praxair, Inc., Linde AG and U.S. Bank National Association, as trustee (Filed as Exhibit 4.2 to the Linde plc Form 8-K dated September 6, 2019, Filing No. 1-38730, and incorporated herein by reference). |
| | |
| 4.10 | | |
| 4.11 | | |
| | |
| 4.12 | | |
| | |
| 4.13 | | Amended and Restated Fiscal Agency Agreement, dated May 4, 2023, among Linde plc, as Issuer, and Deutsche Bank Aktiengesellschaft, as Fiscal Agent and Paying Agent (Filed as Exhibit 4.6 to the Linde plc Form 8-K, dated June 12, 2023, Filing No. 1-38730, and incorporated herein by reference.) |
| | |
| 4.14 | | Fiscal Agency Agreement, dated May 11, 2020, among Linde plc, as Issuer and as Guarantor, Linde Finance B.V., as Issuer, and Deutsche Bank Aktiengesellschaft, as Fiscal Agent and Paying Agent (Filed as Exhibit 4.6 to the Linde plc Form 8-K dated May 26. 2020, Filing No 1-37830, and incorporated herein by reference). |
| | |
| 4.15 | | |
| | |
| 4.16 | | Amended and Restated Fiscal Agency Agreement, dated August 3, 2021, among Linde plc, as Issuer and as Guarantor, Linde Finance B.V., as Issuer, and Deutsche Bank Aktiengesellschaft, as Fiscal Agent and Paying Agent (Filed as Exhibit 4.6 to Linde plc 's current report on Form 8-K, dated September 30, 2021, Filing No. 1-38730, and incorporated herein by reference). |
| | |
| 4.17 | | Amended and Restated Fiscal Agency Agreement, dated May 8, 2024, among Linde plc, as Issuer, and Deutsche Bank Aktiengesellschaft, as Fiscal Agent and Paying Agent (Filed as Exhibit 4.6 to the Linde plc Form 8-K, dated June 4, 2024, Filing No. 1-38730, and incorporated herein by reference.) |
| | |
| | | | | | | | |
| Exhibit No. | | Description |
| |
| 4.18 | | |
| | |
| 4.19 | | |
| | |
| 4.20 | | Copies of the agreements related to long-term debt which are not required to be filed as exhibits to this Annual Report on Form 10-K will be furnished to the Securities and Exchange Commission upon request. |
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| *10 | | |
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| 10.01 | | Amended and Restated Five Year Credit Agreement, dated as of December 7, 2022, among Linde plc, certain of its subsidiaries parties thereto as borrowers, the lenders party thereto and Bank of America, N.A., as Administrative Agent.(Filed as Exhibit 10.1 to Linde plc's current report on Form 8-K, dated December 8, 2022, Filing No. 1-38730, and incorporated herein by reference) |
| |
| 10.02 | | 364-Day Credit Agreement, dated as of December 4, 2024, among Linde plc, the Subsidiary Borrowers, certain Subsidiary Guarantors, the lenders party thereto and Bank of America, N.A., as Administrative Agent (Filed as Exhibit 10.1 to Linde's current report on Form 8-K, dated December 4, 2024, Filing No. 1-38730, and incorporated herein by reference). |
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| *10.03 | | |
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| *10.03a | | |
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| *10.03b | | |
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| *10.03c | | |
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| *10.03d | | |
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| *10.03e | | |
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| *10.04 | | |
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| *10.05 | | |
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| *10.05a | | |
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| *10.05b | | |
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| *10.05c | | |
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| *10.05d | | |
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| Exhibit No. | | Description |
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| *10.05e | | |
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| *10.05f | | |
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| *10.05g | | |
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| *10.05h | | |
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| *10.06 | | |
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| *10.06a | | |
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| *10.06b | | |
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| *10.06c | | |
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| *10.06d | | |
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| *10.06e | | |
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| *10.06f | | |
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| *10.07 | | |
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| *10.08 | | |
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| *10.08b | | |
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| *10.09 | | |
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| *10.10 | | |
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| *10.10a | | |
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| *10.10b | | |
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| *10.10c | | |
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| Exhibit No. | | Description |
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| *10.10d | | |
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| *10.10e | | |
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| *10.10f | | |
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| *10.10g | | |
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| *10.10h | | |
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| *10.10i | | |
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| *10.10j | | |
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| *10.10k | | |
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| *10.10l | | |
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| *10.10m | | |
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| *10.11 | | |
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| 10.12 | | |
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| 10.13 | | |
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| *10.14 | | |
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| *10.15 | | |
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| *10.16 | | |
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| 19.01 | | |
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| 21.01 | | |
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| 23.01 | | |
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| 31.01 | | |
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| Exhibit No. | | Description |
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| 31.02 | | |
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| 32.01 | | |
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| 32.02 | | |
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| 97.1 | | |
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| 101.INS | | XBRL Instance Document: The XBRL Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
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| 101.SCH | | XBRL Taxonomy Extension Schema |
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| 101.CAL | | XBRL Taxonomy Extension Calculation Linkbase |
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| 101.LAB | | XBRL Taxonomy Extension Label Linkbase |
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| 101.PRE | | XBRL Taxonomy Extension Presentation Linkbase |
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| 101.DEF | | XBRL Taxonomy Extension Definition Linkbase |
Copies of exhibits incorporated by reference can be obtained from the SEC and are located in SEC File No. 1-11037.
| | | | | |
| * | Indicates a management contract or compensatory plan or arrangement. |
| ** | Certain schedules or similar attachments have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Registrant agrees to furnish supplemental copies of any of the omitted schedules or attachments upon request by the SEC. |
ITEM 16. FORM 10-K SUMMARY
None.
SIGNATURES
Linde plc and Subsidiaries
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| | | | | | | | | | | | | | | | | | | | |
| | Linde plc |
| | (Registrant) |
| Date: February 26, 2025 | By: | /s/ KELCEY E. HOYT |
| | Kelcey E. Hoyt Chief Accounting Officer |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on February 26, 2025.
| | | | | | | | | | | | | | |
| /s/ STEPHEN F. ANGEL | | /s/ SANJIV LAMBA | | /s/ MATTHEW J. WHITE |
Stephen F. Angel Chairman | | Sanjiv Lamba Chief Executive Officer and Director | | Matthew J. White Chief Financial Officer |
| | |
| /s/ PROF. DDR. ANN-KRISTIN ACHLIETNER | | /s/ ROBERT L. WOOD | | /s/ DR. THOMAS ENDERS |
Ann-Kristin Achleitner Director | | Robert L. Wood Director | | Thomas Enders Director |
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| /s/ JOSEF KAESER | | /s/ DR. VICTORIA OSSADNIK | | /s/ ALBERTO WEISSER |
Josef Kaeser Director | | Victoria Ossadnik Director | | Alberto Weisser Director |
| | | | |
| /s/ PAULA REYNOLDS | | /s/ HUGH GRANT | | |
Paula Reynolds Director | | Hugh Grant Director | | |
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