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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, ~~2022~~2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to


Commission file number			001-38730

LINDE PLC

(Exact name of registrant as specified in its charter)


Ireland						98-1448883
(State or other jurisdiction of incorporation)						(I.R.S. Employer Identification No.)

10 Riverview Drive,						Forge
Danbury, Connecticut						43 Church Street West
United States 06810						Woking, Surrey GU21 6HT
						United Kingdom

(Address of principal executive offices) (Zip Code)
(203) 837 - 2000						+44 14 83 242200
(Registrant's telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Ordinary shares (€0.001 nominal value per share)

LIN

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

At June 30, ~~2022, 498,365,588~~2023, 487,945,864 ordinary shares (€0.001 par value) of the Registrant were outstanding.

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INDEX

PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)

	Consolidated Statements of Income - Quarters Ended June 30,, 2023 and 2022 ~~and 2021~~	4

	Consolidated Statements of Income - Six Months Ended June 30, ~~2022~~2023 and ~~2021~~2022	5

	Consolidated Statements of Comprehensive Income - Quarters Ended June 30 , ~~2022~~2023 and ~~2021~~2022	6

	Consolidated Statements of Comprehensive Income - Six Months Ended June 30, ~~2022~~2023 and ~~2021~~2022	7

	Condensed Consolidated Balance Sheets - June 30 , ~~2022~~2023 and December 31, ~~2021~~2022	8

	Condensed Consolidated Statements of Cash Flows - SSix ix Months Ended June 30 3 0 , ~~2022~~2023 and ~~2021~~2022	9

	Notes to Condensed Consolidated Financial Statements	10

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2627

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	4546

Item 4.	Controls and Procedures	4546

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	4647

Item 1A.	Risk Factors	4647

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4647

Item 3.	Defaults Upon Senior Securities	4647

Item 4.	Mine Safety Disclosures	4647

Item 5.	Other Information	4647

Item 6.	Exhibits	4748

Signature		4849

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Forward-looking Statements

This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are identified by terms and phrases such as: anticipate, believe, intend, estimate, expect, continue, should, could, may, plan, project, predict, will, potential, forecast, and similar expressions. They are based on management’s reasonable expectations and assumptions as of the date the statements are made but involve risks and uncertainties. These risks and uncertainties include, without limitation: the performance of stock markets generally; developments in worldwide and national economies and other international events and circumstances, including trade conflicts and tariffs; changes in foreign currencies and in interest rates; the cost and availability of electric power, natural gas and other raw materials; the ability to achieve price increases to offset cost increases; catastrophic events including natural disasters, epidemics, pandemics such as COVID-19, and acts of war and terrorism; the ability to attract, hire, and retain qualified personnel; the impact of changes in financial accounting standards; the impact of changes in pension plan liabilities; the impact of tax, environmental, healthcare and other legislation and government regulation in jurisdictions in which the company operates; the cost and outcomes of investigations, litigation and regulatory proceedings; the impact of potential unusual or non-recurring items; continued timely development and market acceptance of new products and applications; the impact of competitive products and pricing; future financial and operating performance of major customers and industries served; the impact of information technology system failures, network disruptions and breaches in data security; and the effectiveness and speed of integrating new acquisitions into the business. These risks and uncertainties may cause future results or circumstances to differ materially from adjusted projections, estimates or other forward-looking statements.

Linde plc assumes no obligation to update or provide revisions to any forward-looking statement in response to changing circumstances. The above listed risks and uncertainties are further described in Item 1A. Risk Factors in Linde plc’s Form 10-K for the fiscal year ended December 31, ~~2021~~2022 filed with the SEC on February 28, ~~2022,~~2023, which should be reviewed carefully. Please consider Linde plc’s forward-looking statements in light of those risks.

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LINDE PLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Millions of dollars, except per share data)

(UNAUDITED)


		Quarter Ended June 30,					Quarter Ended June 30,
		2022		2021			2023		2022
Sales	Sales	$	8,457	$	7,584	Sales	$	8,204	$	8,457
Cost of sales, exclusive of depreciation and amortization	Cost of sales, exclusive of depreciation and amortization	4,940		4,194		Cost of sales, exclusive of depreciation and amortization	4,316		4,940
Selling, general and administrative	Selling, general and administrative	771		822		Selling, general and administrative	833		771
Depreciation and amortization	Depreciation and amortization	1,091		1,171		Depreciation and amortization	960		1,091
Research and development	Research and development	37		34		Research and development	35		37
Russia-Ukraine conflict and other charges		993		204
Other charges						Other charges	22		993

Other income (expense) - net	Other income (expense) - net	(36)		(17)		Other income (expense) - net	(27)		(36)
Operating Profit	Operating Profit	589		1,142		Operating Profit	2,011		589
Interest expense - net	Interest expense - net	5		18		Interest expense - net	52		5
Net pension and OPEB cost (benefit), excluding service cost	Net pension and OPEB cost (benefit), excluding service cost	(62)		(49)		Net pension and OPEB cost (benefit), excluding service cost	(45)		(62)
Income From Continuing Operations Before Income Taxes and Equity Investments		646		1,173
Income taxes on continuing operations		286		334
Income From Continuing Operations Before Equity Investments		360		839
Income Before Income Taxes and Equity Investments						Income Before Income Taxes and Equity Investments	2,004		646
Income taxes						Income taxes	438		286
Income Before Equity Investments						Income Before Equity Investments	1,566		360
Income from equity investments	Income from equity investments	50		37		Income from equity investments	46		50
Income From Continuing Operations (Including Noncontrolling Interests)		410		876
Income from discontinued operations, net of tax		—		1

Net Income (Including Noncontrolling Interests)	Net Income (Including Noncontrolling Interests)	410		877		Net Income (Including Noncontrolling Interests)	1,612		410
Less: noncontrolling interests from continuing operations		(38)		(36)
Less: noncontrolling interests						Less: noncontrolling interests	(37)		(38)
Net Income – Linde plc	Net Income – Linde plc	$	372	$	841	Net Income – Linde plc	$	1,575	$	372

Net Income – Linde plc
Income from continuing operations		$	372	$	840
Income from discontinued operations		$	—	$	1

Per Share Data – Linde plc Shareholders	Per Share Data – Linde plc Shareholders					Per Share Data – Linde plc Shareholders
Basic earnings per share from continuing operations		$	0.74	$	1.62
Basic earnings per share from discontinued operations		—		—

Basic earnings per share	Basic earnings per share	$	0.74	$	1.62	Basic earnings per share	$	3.22	$	0.74
Diluted earnings per share from continuing operations		$	0.74	$	1.60
Diluted earnings per share from discontinued operations		—		—

Diluted earnings per share	Diluted earnings per share	$	0.74	$	1.60	Diluted earnings per share	$	3.19	$	0.74

Weighted Average Shares Outstanding (000’s):	Weighted Average Shares Outstanding (000’s):					Weighted Average Shares Outstanding (000’s):
Basic shares outstanding	Basic shares outstanding	501,034		518,950		Basic shares outstanding	489,618		501,034
Diluted shares outstanding	Diluted shares outstanding	505,269		523,723		Diluted shares outstanding	493,549		505,269

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

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LINDE PLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Millions of dollars, except per share data)

(UNAUDITED)


		Six Months Ended June 30,					Six Months Ended June 30,
		2022		2021			2023		2022
Sales	Sales	$	16,668	$	14,827	Sales	$	16,397	$	16,668
Cost of sales, exclusive of depreciation and amortization	Cost of sales, exclusive of depreciation and amortization	9,738		8,248		Cost of sales, exclusive of depreciation and amortization	8,747		9,738
Selling, general and administrative	Selling, general and administrative	1,573		1,609		Selling, general and administrative	1,655		1,573
Depreciation and amortization	Depreciation and amortization	2,203		2,337		Depreciation and amortization	1,908		2,203
Research and development	Research and development	72		69		Research and development	71		72
Russia-Ukraine conflict and other charges		989		196
Other charges						Other charges	40		989

Other income (expense) - net	Other income (expense) - net	(24)		(13)		Other income (expense) - net	(32)		(24)
Operating Profit	Operating Profit	2,069		2,355		Operating Profit	3,944		2,069
Interest expense - net	Interest expense - net	14		38		Interest expense - net	89		14
Net pension and OPEB cost (benefit), excluding service cost	Net pension and OPEB cost (benefit), excluding service cost	(126)		(98)		Net pension and OPEB cost (benefit), excluding service cost	(90)		(126)
Income From Continuing Operations Before Income Taxes and Equity Investments		2,181		2,415
Income taxes on continuing operations		655		602
Income From Continuing Operations Before Equity Investments		1,526		1,813
Income Before Income Taxes and Equity Investments						Income Before Income Taxes and Equity Investments	3,945		2,181
Income taxes						Income taxes	868		655
Income Before Equity Investments						Income Before Equity Investments	3,077		1,526
Income from equity investments	Income from equity investments	94		80		Income from equity investments	87		94
Income From Continuing Operations (Including Noncontrolling Interests)		1,620		1,893
Income from discontinued operations, net of tax		—		2

Net Income (Including Noncontrolling Interests)	Net Income (Including Noncontrolling Interests)	1,620		1,895		Net Income (Including Noncontrolling Interests)	3,164		1,620
Less: noncontrolling interests from continuing operations		(74)		(74)
Less: noncontrolling interests						Less: noncontrolling interests	(73)		(74)
Net Income – Linde plc	Net Income – Linde plc	$	1,546	$	1,821	Net Income – Linde plc	$	3,091	$	1,546

Net Income – Linde plc
Income from continuing operations		$	1,546	$	1,819
Income from discontinued operations		$	—	$	2

Per Share Data – Linde plc Shareholders	Per Share Data – Linde plc Shareholders					Per Share Data – Linde plc Shareholders
Basic earnings per share from continuing operations		$	3.07	$	3.49
Basic earnings per share from discontinued operations		—		—

Basic earnings per share	Basic earnings per share	$	3.07	$	3.49	Basic earnings per share	$	6.30	$	3.07
Diluted earnings per share from continuing operations		$	3.04	$	3.46
Diluted earnings per share from discontinued operations		—		—

Diluted earnings per share	Diluted earnings per share	$	3.04	$	3.46	Diluted earnings per share	$	6.25	$	3.04

Weighted Average Shares Outstanding (000’s):	Weighted Average Shares Outstanding (000’s):					Weighted Average Shares Outstanding (000’s):
Basic shares outstanding	Basic shares outstanding	504,093		520,691		Basic shares outstanding	490,727		504,093
Diluted shares outstanding	Diluted shares outstanding	508,432		525,380		Diluted shares outstanding	494,685		508,432

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

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LINDE PLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Millions of dollars)

(UNAUDITED)


		Quarter Ended June 30,					Quarter Ended June 30,
		2022		2021			2023		2022
NET INCOME (INCLUDING NONCONTROLLING INTERESTS)	NET INCOME (INCLUDING NONCONTROLLING INTERESTS)	$	410	$	877	NET INCOME (INCLUDING NONCONTROLLING INTERESTS)	$	1,612	$	410

OTHER COMPREHENSIVE INCOME (LOSS)	OTHER COMPREHENSIVE INCOME (LOSS)					OTHER COMPREHENSIVE INCOME (LOSS)
Translation adjustments:	Translation adjustments:					Translation adjustments:
Foreign currency translation adjustments	Foreign currency translation adjustments	(1,570)		412		Foreign currency translation adjustments	(96)		(1,570)
Reclassification to net income	Reclassification to net income	(134)		—		Reclassification to net income	—		(134)
Income taxes	Income taxes	5		(2)		Income taxes	1		5
Translation adjustments	Translation adjustments	(1,699)		410		Translation adjustments	(95)		(1,699)
Funded status - retirement obligations (Note 8):	Funded status - retirement obligations (Note 8):					Funded status - retirement obligations (Note 8):
Retirement program remeasurements	Retirement program remeasurements	67		(19)		Retirement program remeasurements	(5)		67
Reclassifications to net income	Reclassifications to net income	19		44		Reclassifications to net income	(8)		19
Income taxes	Income taxes	(7)		(2)		Income taxes	2		(7)
Funded status - retirement obligations	Funded status - retirement obligations	79		23		Funded status - retirement obligations	(11)		79
Derivative instruments (Note 5):	Derivative instruments (Note 5):					Derivative instruments (Note 5):
Current unrealized gain (loss)	Current unrealized gain (loss)	92		19		Current unrealized gain (loss)	(9)		92
Reclassifications to net income	Reclassifications to net income	3		(3)		Reclassifications to net income	2		3
Income taxes	Income taxes	(20)		(3)		Income taxes	1		(20)
Derivative instruments	Derivative instruments	75		13		Derivative instruments	(6)		75

TOTAL OTHER COMPREHENSIVE INCOME (LOSS)	TOTAL OTHER COMPREHENSIVE INCOME (LOSS)	(1,545)		446		TOTAL OTHER COMPREHENSIVE INCOME (LOSS)	(112)		(1,545)

COMPREHENSIVE INCOME (LOSS) (INCLUDING NONCONTROLLING INTERESTS)	COMPREHENSIVE INCOME (LOSS) (INCLUDING NONCONTROLLING INTERESTS)	(1,135)		1,323		COMPREHENSIVE INCOME (LOSS) (INCLUDING NONCONTROLLING INTERESTS)	1,500		(1,135)
Less: noncontrolling interests	Less: noncontrolling interests	(21)		(45)		Less: noncontrolling interests	(14)		(21)
COMPREHENSIVE INCOME (LOSS) - LINDE PLC	COMPREHENSIVE INCOME (LOSS) - LINDE PLC	$	(1,156)	$	1,278	COMPREHENSIVE INCOME (LOSS) - LINDE PLC	$	1,486	$	(1,156)

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

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LINDE PLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Millions of dollars)

(UNAUDITED)


	Six Months Ended June 30,
	2023		2022
NET INCOME (INCLUDING NONCONTROLLING INTERESTS)	$	3,164	$	1,620

OTHER COMPREHENSIVE INCOME (LOSS)
Translation adjustments:
Foreign currency translation adjustments	133		(1,510)
Reclassification to net income	—		(134)
Income taxes	1		(7)
Translation adjustments	134		(1,651)
Funded status - retirement obligations (Note 8):
Retirement program remeasurements	(254)		122
Reclassifications to net income	(16)		38
Income taxes	65		(28)
Funded status - retirement obligations	(205)		132
Derivative instruments (Note 5):
Current unrealized gain (loss)	(84)		110
Reclassifications to net income	(4)		(20)
Income taxes	17		(18)
Derivative instruments	(71)		72





TOTAL OTHER COMPREHENSIVE INCOME (LOSS)	(142)		(1,447)

COMPREHENSIVE INCOME (LOSS) (INCLUDING NONCONTROLLING INTERESTS)	3,022		173
Less: noncontrolling interests	(48)		(45)
COMPREHENSIVE INCOME (LOSS) - LINDE PLC	$	2,974	$	128

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

~~Table of Contents~~

~~LINDE PLC AND SUBSIDIARIES~~

~~CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME~~

~~(Millions of dollars)~~

~~(UNAUDITED)~~

Six Months Ended June 30,
2022 2021
NET INCOME (INCLUDING NONCONTROLLING INTERESTS) $ 1,620 $ 1,895
OTHER COMPREHENSIVE INCOME (LOSS)
Translation adjustments:
Foreign currency translation adjustments (1,510) (245)
Reclassification to net income (134) (52)
Income taxes (7) (8)
Translation adjustments (1,651) (305)
Funded status - retirement obligations (Note 8):
Retirement program remeasurements 122 1
Reclassifications to net income 38 87
Income taxes (28) (25)
Funded status - retirement obligations 132 63
Derivative instruments (Note 5):
Current unrealized gain (loss) 110 40
Reclassifications to net income (20) (5)
Income taxes (18) (8)
Derivative instruments 72 27
TOTAL OTHER COMPREHENSIVE INCOME (LOSS) (1,447) (215)
COMPREHENSIVE INCOME (LOSS) (INCLUDING NONCONTROLLING INTERESTS) 173 1,680
Less: noncontrolling interests (45) (77)
COMPREHENSIVE INCOME (LOSS) - LINDE PLC $ 128 $ 1,603

~~The accompanying notes are an integral part of these financial statements.~~

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LINDE PLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Millions of dollars)

(UNAUDITED)


		June 30, 2022		December 31, 2021			June 30, 2023		December 31, 2022
Assets	Assets					Assets
Cash and cash equivalents	Cash and cash equivalents	$	3,655	$	2,823	Cash and cash equivalents	$	3,357	$	5,436
Accounts receivable - net	Accounts receivable - net	4,803		4,499		Accounts receivable - net	4,799		4,559
Contract assets	Contract assets	78		134		Contract assets	156		124
Inventories	Inventories	1,786		1,733		Inventories	2,079		1,978
Prepaid and other current assets	Prepaid and other current assets	950		970		Prepaid and other current assets	1,020		950
Total Current Assets	Total Current Assets	11,272		10,159		Total Current Assets	11,411		13,047
Property, plant and equipment - net	Property, plant and equipment - net	23,993		26,003		Property, plant and equipment - net	23,808		23,548

Goodwill	Goodwill	25,678		27,038		Goodwill	26,456		25,817
Other intangible assets - net	Other intangible assets - net	12,634		13,802		Other intangible assets - net	12,510		12,420
Other long-term assets	Other long-term assets	4,308		4,603		Other long-term assets	4,533		4,826
Total Assets	Total Assets	$	77,885	$	81,605	Total Assets	$	78,718	$	79,658
Liabilities and equity	Liabilities and equity					Liabilities and equity
Accounts payable	Accounts payable	$	3,360	$	3,503	Accounts payable	$	2,977	$	2,995
Short-term debt	Short-term debt	3,215		1,163		Short-term debt	3,018		4,117
Current portion of long-term debt	Current portion of long-term debt	1,651		1,709		Current portion of long-term debt	944		1,599
Contract liabilities	Contract liabilities	2,933		2,940		Contract liabilities	3,246		3,073

Other current liabilities	Other current liabilities	4,136		4,328		Other current liabilities	4,367		4,695
Total Current Liabilities	Total Current Liabilities	15,295		13,643		Total Current Liabilities	14,552		16,479
Long-term debt	Long-term debt	11,177		11,335		Long-term debt	13,528		12,198
Other long-term liabilities	Other long-term liabilities	10,373		11,186		Other long-term liabilities	9,390		9,594

Total Liabilities	Total Liabilities	36,845		36,164		Total Liabilities	37,470		38,271
Redeemable noncontrolling interests	Redeemable noncontrolling interests	13		13		Redeemable noncontrolling interests	13		13
Linde plc Shareholders’ Equity:
Ordinary shares,€0.001 par value, authorized 1,750,000,000 shares, 2022 and 2021 issued: 552,012,862 ordinary shares		1		1
Linde plc Shareholders’ Equity (Note 11):						Linde plc Shareholders’ Equity (Note 11):
Ordinary shares,€0.001 par value, authorized 1,750,000,000 shares, 2023 issued: 490,766,972 ordinary shares; 2022 issued: 552,012,862 ordinary shares						Ordinary shares,€0.001 par value, authorized 1,750,000,000 shares, 2023 issued: 490,766,972 ordinary shares; 2022 issued: 552,012,862 ordinary shares	—		1
Additional paid-in capital	Additional paid-in capital	39,978		40,180		Additional paid-in capital	39,797		40,005
Retained earnings	Retained earnings	19,159		18,710		Retained earnings	7,024		20,541
Accumulated other comprehensive income (loss) (Note 11)		(6,466)		(5,048)
Less: Treasury shares, at cost (2022 – 53,647,274 shares and 2021 – 43,331,983 shares)		(12,998)		(9,808)
Accumulated other comprehensive income (loss)						Accumulated other comprehensive income (loss)	(5,899)		(5,782)
Less: Treasury shares, at cost (2023 – 2,821,108 shares and 2022 – 59,555,235 shares)						Less: Treasury shares, at cost (2023 – 2,821,108 shares and 2022 – 59,555,235 shares)	(1,011)		(14,737)
Total Linde plc Shareholders’ Equity	Total Linde plc Shareholders’ Equity	39,674		44,035		Total Linde plc Shareholders’ Equity	39,911		40,028
Noncontrolling interests	Noncontrolling interests	1,353		1,393		Noncontrolling interests	1,324		1,346
Total Equity	Total Equity	41,027		45,428		Total Equity	41,235		41,374
Total Liabilities and Equity	Total Liabilities and Equity	$	77,885	$	81,605	Total Liabilities and Equity	$	78,718	$	79,658

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

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LINDE PLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Millions of dollars)

(UNAUDITED)


		Six Months Ended June 30,					Six Months Ended June 30,
		2022		2021			2023		2022
Increase (Decrease) in Cash and Cash Equivalents	Increase (Decrease) in Cash and Cash Equivalents					Increase (Decrease) in Cash and Cash Equivalents
Operations	Operations					Operations
Net income - Linde plc	Net income - Linde plc	$	1,546	$	1,821	Net income - Linde plc	$	3,091	$	1,546
Less: Income from discontinued operations, net of tax and noncontrolling interests		—		(2)
Add: Noncontrolling interests from continuing operations		74		74
Income from continuing operations (including noncontrolling interests)		1,620		1,893

Add: Noncontrolling interests						Add: Noncontrolling interests	73		74
Net Income (including noncontrolling interests)						Net Income (including noncontrolling interests)	3,164		1,620
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Russia-Ukraine conflict and other charges, net of payments		922		95
Other charges, net of payments						Other charges, net of payments	(61)		922

Depreciation and amortization	Depreciation and amortization	2,203		2,337		Depreciation and amortization	1,908		2,203
Deferred income taxes	Deferred income taxes	(221)		(78)		Deferred income taxes	(61)		(221)
Share-based compensation	Share-based compensation	51		63		Share-based compensation	66		51
Working capital:	Working capital:					Working capital:
Accounts receivable	Accounts receivable	(543)		(388)		Accounts receivable	(175)		(543)
Inventory	Inventory	(144)		(42)		Inventory	(85)		(144)
Prepaid and other current assets	Prepaid and other current assets	(123)		(20)		Prepaid and other current assets	(39)		(123)
Payables and accruals	Payables and accruals	70		39		Payables and accruals	(458)		70
Contract assets and liabilities, net	Contract assets and liabilities, net	243		51		Contract assets and liabilities, net	117		243
Pension contributions	Pension contributions	(19)		(28)		Pension contributions	(25)		(19)
Long-term assets, liabilities and other	Long-term assets, liabilities and other	74		14		Long-term assets, liabilities and other	(293)		74
Net cash provided by operating activities		4,133		3,936
Net cash provided by (used for) operating activities						Net cash provided by (used for) operating activities	4,058		4,133
Investing	Investing					Investing
Capital expenditures	Capital expenditures	(1,475)		(1,506)		Capital expenditures	(1,688)		(1,475)
Acquisitions, net of cash acquired	Acquisitions, net of cash acquired	(49)		(31)		Acquisitions, net of cash acquired	(834)		(49)
Divestitures and asset sales, net of cash divested		17		77
Divestitures, net of cash divested and asset sales						Divestitures, net of cash divested and asset sales	24		17
Net cash provided by (used for) investing activities	Net cash provided by (used for) investing activities	(1,507)		(1,460)		Net cash provided by (used for) investing activities	(2,498)		(1,507)
Financing	Financing					Financing
Short-term debt borrowings (repayments) - net	Short-term debt borrowings (repayments) - net	2,172		1,081		Short-term debt borrowings (repayments) - net	(1,116)		2,172
Long-term debt borrowings	Long-term debt borrowings	2,291		51		Long-term debt borrowings	2,115		2,291
Long-term debt repayments	Long-term debt repayments	(1,703)		(818)		Long-term debt repayments	(1,641)		(1,703)
Issuances of ordinary shares	Issuances of ordinary shares	22		32		Issuances of ordinary shares	21		22
Purchases of ordinary shares	Purchases of ordinary shares	(3,329)		(2,082)		Purchases of ordinary shares	(1,767)		(3,329)
Cash dividends - Linde plc shareholders	Cash dividends - Linde plc shareholders	(1,177)		(1,102)		Cash dividends - Linde plc shareholders	(1,246)		(1,177)

Noncontrolling interest transactions and other	Noncontrolling interest transactions and other	(35)		(277)		Noncontrolling interest transactions and other	(22)		(35)
Net cash provided by (used for) financing activities	Net cash provided by (used for) financing activities	(1,759)		(3,115)		Net cash provided by (used for) financing activities	(3,656)		(1,759)

Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	(35)		22		Effect of exchange rate changes on cash and cash equivalents	17		(35)
Change in cash and cash equivalents	Change in cash and cash equivalents	832		(617)		Change in cash and cash equivalents	(2,079)		832
Cash and cash equivalents, beginning-of-period	Cash and cash equivalents, beginning-of-period	2,823		3,754		Cash and cash equivalents, beginning-of-period	5,436		2,823

Cash and cash equivalents, end-of-period	Cash and cash equivalents, end-of-period	$	3,655	$	3,137	Cash and cash equivalents, end-of-period	$	3,357	$	3,655

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

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INDEX TO NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Notes to Condensed Consolidated Financial Statements - Linde plc and Subsidiaries (Unaudited)

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1. Summary of Significant Accounting Policies

Linde plc ("Linde" or "the company") is an incorporated public limited company formed under the laws of Ireland. Linde’s registered office is located at Ten Earlsfort Terrace, Dublin 2, D02 T380 Ireland. Linde’s principal executive offices are located at Forge, 43 Church Street West, Woking, Surrey GU21 6HT, United Kingdom and 10 Riverview Drive, Danbury, Connecticut, 06810, United States.

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

In connection with the closing of the intercompany reorganization on March 1, 2023, Linde shareholders automatically received one share of the new holding company, listed on the New York Stock Exchange, in exchange for each share of Linde plc that was previously owned. The new holding company is also named “Linde plc” and trades under the existing ticker LIN (see Note 11).

Presentation of Condensed Consolidated Financial Statements - In the opinion of Linde management, the accompanying condensed consolidated financial statements include all adjustments necessary for a fair ~~presentation~~statement of the results for the interim periods presented and such adjustments are of a normal recurring nature. The accompanying condensed consolidated financial statements should be read in conjunction with the notes to the consolidated financial statements of Linde plc and subsidiaries in Linde's ~~2021~~2022 Annual Report on Form 10-K. There have been no material changes to the company’s significant accounting policies during ~~2022.~~2023.

Reclassifications – Certain prior periods' amounts have been reclassified to conform to the current year’s presentation.

2. ~~Russia-Ukraine conflict and~~ Other Charges

~~2022~~2023 Other Charges

~~Russia-Ukraine conflict~~Other charges were $22 million for the quarter and ~~other charges were $993~~$40 million for the six months ended June 30, 2023, respectively. Costs primarily related to severance in the Engineering segment and ~~$989 million ($889 million and $888 million, after tax and noncontrolling interests)~~expenses incurred due to the intercompany reorganization for the quarter and six ~~months~~month period ended June 30, ~~2022,~~2023, respectively. Other charges for the quarter and year-to-date periods had an associated net income tax benefit of $34 million and $79 million, respectively, primarily comprised of a benefit of $124 million related to the resolution of a U.S. income tax audit, partially offset by an accrual of $85 million for the potential settlement of an international income tax matter, both recorded in the first quarter.

The following ~~tables summarize~~table summarizes the activities related to the company's pre-tax Other charges for the ~~quarter and~~ six months ended June 30, ~~2022:~~2023:


	Six Months Ended June 30, 2023
(millions of dollars)	Severance costs		Other cost reduction charges		Total cost reduction program related charges		Other charges		Total other charges




Balance, December 31, 2022	$	281	$	27	$	308	$	12	$	320
2023 Other charges	24		—		24		16		40
Less: Cash payments / receipts	(100)		(1)		(101)		—		(101)
Less: Non-cash charges	—		—		—		7		7
Foreign currency translation and other	(3)		—		(3)		—		(3)
Balance, June 30, 2023	$	202	$	26	$	228	$	35	$	263

Quarter Ended June 30, 2022
(millions of dollars) Russia deconsolidation charges Other Russia related charges Total Russia charges Merger-related and other charges Total
Americas $ — $ — $ — $ 3 $ 3
EMEA 733 2 735 49 784
APAC — — — 28 28
Engineering 54 112 166 0 166
Other 0 — — 12 12
Total $ 787 $ 114 $ 901 $ 92 $ 993

Six Months Ended June 30, 2022
(millions of dollars) Russia deconsolidation charges Other Russia related charges Total Russia charges Merger-related and other charges Total
Americas $ — $ — $ — $ 3 $ 3
EMEA 733 2 735 49 784
APAC — — — 24 24
Engineering 54 112 166 — 166
Other 0 — — 12 12
Total $ 787 $ 114 $ 901 $ 88 $ 989

~~Russia-Ukraine Conflict~~

~~Deconsolidation~~

Table of ~~Russian entities~~Contents

2022 Other Charges

Russia-Ukraine Conflict

In response to the Russian invasion of Ukraine, multiple jurisdictions, including Europe and the U.S., have imposed several tranches of economic sanctions on Russia. As a result, Linde has reassessed its ability to control its Russian subsidiaries and determined that as of June 30, 2022 it can no longer exercise control over these entities. As such, Linde has deconsolidated its Russian gas and engineering business entities as of June 30, 2022. The deconsolidation of the company's Russian gas and engineering business entities resulted in a loss of $787 million ($730 million after tax) for the quarter and six months ended June 30, 2022.

~~Table of Contents~~

The fair value of Linde’s Russian subsidiaries was determined using a probability weighted discounted cash flow model, which resulted in the recognition of a $407 million loss on deconsolidation when compared to the carrying value of the entities. This loss is recorded within ~~Russia-Ukraine conflict and~~ other charges in the consolidated statements of income.

Upon deconsolidation an investment was recorded, which represents the fair value of net assets. The company did not receive any consideration, cash or otherwise, as part of the deconsolidation. Linde will maintain its interest in its Russian subsidiaries and will continue to comply with sanctions and government restrictions. The investment will be monitored for impairment in future periods.

Receivables, primarily loans receivable, with newly deconsolidated entities were reassessed for collectability resulting in a write-off of approximately $380 million.

Other ~~Russia related charges~~

~~Other~~ charges related specifically to the Russia-Ukraine conflict were $114 million ($84 million after tax) for the quarter and six months ended June 30, 2022, and are primarily comprised of impairments of assets which are maintained by international entities in support of the Russian business.

~~Merger-related and other~~Other charges

~~Merger related and other~~Other charges were $92 million and $88 million ($75 million and $74 million, after tax) for the quarter and six months ended June 30, 2022, respectively, primarily related to the impairment of an equity method investment in the EMEA segment.

~~Cash Requirements~~

The total cash requirements of the Russia-Ukraine conflict and other charges incurred during the six months ended June 30, 2022 are expected to be immaterial. Liabilities accrued from prior periods are expected to be paid through 2023. Russia-Ukraine conflict and other charges, net of payments in the condensed consolidated statements of cash flows for the six months ended June 30, 2022 also reflects the impact of cash payments of liabilities accrued as of December 31, 2021.

~~The following table summarizes the activities related to the company's Russia-Ukraine conflict and other charges for the six months ended June 30, 2022:~~

(millions of dollars) Total Russia charges Severance costs Other cost reduction charges Total cost reduction program related charges Merger-related and other charges Total
Balance, December 31, 2021 $ — $ 384 $ 38 $ 422 $ 31 $ 453
2022 Russia-Ukraine conflict and other charges 901 24 14 38 50 989
Less: Cash payments / receipts — (64) (6) (70) 3 (67)
Less: Non-cash charges (901) — (7) (7) (54) (962)
Foreign currency translation and other — (25) (4) (29) (1) (30)
Balance, June 30, 2022 $ — $ 319 $ 35 $ 354 $ 29 $ 383

~~2021 Charges~~

~~Cost reduction programs and other charges were $204 million and $196 million for the quarter and six months ended June 30, 2021, respectively ($198 million and $170 million after tax).~~

Total cost reduction program related charges were $204 million and $248 million ($150 million and $184 million after tax), for the quarter and six months ended June 30, 2021, respectively, which consisted primarily of severance charges of $182 million and $208 million and other charges of $22 million and $40 million for the quarter and six months ended June 30, 2021, respectively, related to the execution of the company's synergistic actions including location consolidations and business rationalization projects, process harmonization, and associated non-recurring costs.

Merger-related and other charges were flat during the quarter ended June 30, 2021 and a benefit of $52 million for the six months ended June 30, 2021 (charge of $48 million and a benefit of $14 million, after tax). The pre-tax benefit was primarily due to a $52 million gain triggered by a joint venture deconsolidation in the APAC segment.

~~Table of Contents~~

In addition, the quarter and six months ended June 30, 2021 include net income tax charges of $48 million and $38 million, respectively, primarily related to (i) $81 million of expense due to the revaluation of a net deferred tax liability resulting from a tax rate increase in the United Kingdom enacted in the current quarter, and (ii) a tax settlement benefit of $33 million.

Classification in the condensed consolidated financial statements

The costs are shown within operating profit in a separate line item on the consolidated statements of income. On the condensed consolidated statements of cash flows, the impact of these costs, net of cash payments, is shown as an adjustment to reconcile net income to net cash provided by operating activities. In Note 10 Segments, Linde excluded these costs from its management definition of segment operating profit; a reconciliation of segment operating profit to consolidated operating profit is shown within the segment operating profit table.

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3. Supplemental Information

Receivables

Linde applies loss rates that are lifetime expected credit losses at initial recognition of the receivables. These expected loss rates are based on an analysis of the actual historical default rates for each business, taking regional circumstances into account. If necessary, these historical default rates are adjusted to reflect the impact of current changes in the macroeconomic environment using forward-looking information. The loss rates are also evaluated based on the expectations of the responsible management team regarding the collectability of the receivables. Gross trade receivables aged less than one year were ~~$4,809~~$4,700 million and ~~$4,425~~$4,498 million at June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively, and gross receivables aged greater than one year were ~~$283~~$368 million and ~~$329~~$321 million at June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively. Other receivables were ~~$107~~$157 million and ~~$150~~$145 million at June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively. Receivables aged greater than one year are generally fully reserved unless specific circumstances warrant exceptions, such as those backed by federal governments.

Accounts receivable net of reserves were ~~$4,803~~$4,799 million at June 30, ~~2022~~2023 and ~~$4,499~~$4,559 million at December 31, ~~2021.~~2022. Allowances for expected credit losses were ~~$396~~$426 million at June 30, ~~2022~~2023 and $405 million at December 31, ~~2021.~~2022. Provisions for expected credit losses were ~~$67~~$83 million and ~~$71~~$67 million for the six months ended June 30, ~~2022~~2023 and ~~2021,~~2022, respectively. The allowance activity in the six months ended June 30, ~~2022~~2023 and ~~2021~~2022 related to write-offs of uncollectible amounts, net of recoveries and currency movements is not material.

Inventories

The following is a summary of Linde's consolidated inventories:


(Millions of dollars)	(Millions of dollars)	June 30, 2022		December 31, 2021		(Millions of dollars)	June 30, 2023		December 31, 2022
Inventories	Inventories					Inventories
Raw materials and supplies	Raw materials and supplies	$	460	$	399	Raw materials and supplies	$	600	$	567
Work in process	Work in process	321		334		Work in process	401		368
Finished goods	Finished goods	1,005		1,000		Finished goods	1,078		1,043
Total inventories	Total inventories	$	1,786	$	1,733	Total inventories	$	2,079	$	1,978

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4. Debt

The following is a summary of Linde's outstanding debt at June 30, ~~2022~~2023 and December 31, ~~2021:~~2022:


(Millions of dollars)	(Millions of dollars)	June 30, 2022		December 31, 2021		(Millions of dollars)	June 30, 2023		December 31, 2022
SHORT-TERM	SHORT-TERM					SHORT-TERM
Commercial paper	Commercial paper	$	2,974	$	278	Commercial paper	$	2,765	$	3,926
Other bank borrowings (primarily non U.S.)	Other bank borrowings (primarily non U.S.)	241		885		Other bank borrowings (primarily non U.S.)	253		191
Total short-term debt	Total short-term debt	3,215		1,163		Total short-term debt	3,018		4,117
LONG-TERM (a)	LONG-TERM (a)					LONG-TERM (a)
(U.S. dollar denominated unless otherwise noted)	(U.S. dollar denominated unless otherwise noted)					(U.S. dollar denominated unless otherwise noted)
0.250% Euro denominated notes due 2022 (b) (c)		—		1,137
2.20% Notes due 2022 (e)		—		500
2.70% Notes due 2023		500		500
2.00% Euro denominated notes due 2023 (b)		691		759
5.875% GBP denominated notes due 2023 (b)		381		432
2.70% Notes due 2023 (c)						2.70% Notes due 2023 (c)	—		501
2.00% Euro denominated notes due 2023 (b) (d)						2.00% Euro denominated notes due 2023 (b) (d)	—		699
5.875% GBP denominated notes due 2023 (b) (d)						5.875% GBP denominated notes due 2023 (b) (d)	—		367
1.20% Euro denominated notes due 2024	1.20% Euro denominated notes due 2024	576		625		1.20% Euro denominated notes due 2024	600		588
1.875% Euro denominated notes due 2024 (b)	1.875% Euro denominated notes due 2024 (b)	322		356		1.875% Euro denominated notes due 2024 (b)	328		324
4.800% Notes due 2024						4.800% Notes due 2024	299		299
4.700% Notes due 2025						4.700% Notes due 2025	598		598
2.65% Notes due 2025	2.65% Notes due 2025	399		399		2.65% Notes due 2025	399		400
1.625% Euro denominated notes due 2025	1.625% Euro denominated notes due 2025	521		565		1.625% Euro denominated notes due 2025	543		533
3.625% Euro denominated notes due 2025 (e)						3.625% Euro denominated notes due 2025 (e)	544		—
0.00% Euro denominated notes due 2026	0.00% Euro denominated notes due 2026	736		799		0.00% Euro denominated notes due 2026	766		751
3.20% Notes due 2026	3.20% Notes due 2026	725		725		3.20% Notes due 2026	725		724
3.434% Notes due 2026	3.434% Notes due 2026	198		197		3.434% Notes due 2026	198		198
1.652% Euro denominated notes due 2027	1.652% Euro denominated notes due 2027	86		94		1.652% Euro denominated notes due 2027	89		88
0.250% Euro denominated notes due 2027		785		850
1.00% Euro denominated notes due 2027 (d)		522		—
0.25% Euro denominated notes due 2027						0.25% Euro denominated notes due 2027	817		802
1.00% Euro denominated notes due 2027						1.00% Euro denominated notes due 2027	546		536
1.00% Euro denominated notes due 2028 (b)	1.00% Euro denominated notes due 2028 (b)	761		879		1.00% Euro denominated notes due 2028 (b)	767		749
3.375% Euro denominated notes due 2029 (e)						3.375% Euro denominated notes due 2029 (e)	814		—
1.10% Notes due 2030	1.10% Notes due 2030	696		696		1.10% Notes due 2030	697		696
1.90% Euro denominated notes due 2030	1.90% Euro denominated notes due 2030	109		118		1.90% Euro denominated notes due 2030	113		111
1.375% Euro denominated notes due 2031 (d)		778		—
0.550% Euro denominated notes due 2032		781		847
1.375% Euro denominated notes due 2031						1.375% Euro denominated notes due 2031	819		803
0.55% Euro denominated notes due 2032						0.55% Euro denominated notes due 2032	813		798
0.375% Euro denominated notes due 2033	0.375% Euro denominated notes due 2033	521		565		0.375% Euro denominated notes due 2033	540		529
1.625% Euro denominated notes due 2035 (d)		828		—
3.625% Euro denominated notes due 2034 (e)						3.625% Euro denominated notes due 2034 (e)	705		—
1.625% Euro denominated notes due 2035						1.625% Euro denominated notes due 2035	865		849
3.55% Notes due 2042	3.55% Notes due 2042	664		664		3.55% Notes due 2042	665		665
2.00% Notes due 2050	2.00% Notes due 2050	296		296		2.00% Notes due 2050	296		296
1.00% Euro denominated notes due 2051	1.00% Euro denominated notes due 2051	726		788		1.00% Euro denominated notes due 2051	746		731
Non U.S borrowings		216		243
Non U.S. borrowings						Non U.S. borrowings	170		152
Other	Other	10		10		Other	10		10
		12,828		13,044			14,472		13,797
Less: current portion of long-term debt	Less: current portion of long-term debt	(1,651)		(1,709)		Less: current portion of long-term debt	(944)		(1,599)
Total long-term debt	Total long-term debt	11,177		11,335		Total long-term debt	13,528		12,198
Total debt	Total debt	$	16,043	$	14,207	Total debt	$	17,490	$	17,914

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

(b)June 30, ~~2022~~2023 and December 31, ~~2021~~2022 included a cumulative ~~$19~~$50 million and ~~$42~~$56 million adjustment to carrying value, respectively, related to hedge accounting of interest rate swaps. Refer to Note 5.

(c)In ~~January 2022,~~February 2023, Linde repaid ~~€1.0 billion~~$500 million of ~~0.250%~~2.70% notes that became due.

(d)In ~~March 2022,~~April 2023, Linde repaid €650 million of 2.00% notes and £300 million of 5.875% notes that became due.

(e)In June 2023, Linde issued €500 million of ~~1.000%~~3.625% notes due ~~2027,~~in 2025, €750 million of ~~1.375% notes due 2031, and €800 million of 1.625% notes due 2035.~~

~~(e)In May 2022, Linde repaid $500 million of 2.20%~~3.375% notes due in ~~August 2022. There was no impact to interest within the consolidated statements~~2029 and €650 million of ~~income.~~3.625% notes due in 2034.

The company maintains a $5 billion and a $1.5 billion unsecured revolving credit agreement with a syndicate of banking institutions that ~~expires March 26, 2024.~~expire December 7, 2027 and December 7, 2023, respectively. There are no financial maintenance covenants contained within the credit ~~agreement.~~agreements. No borrowings were outstanding under the credit ~~agreement~~agreements as of June 30, ~~2022.~~2023.

5. Financial Instruments

In its normal operations, Linde is exposed to market risks relating to fluctuations in interest rates, foreign currency exchange rates, ~~and~~ energy and commodity costs. The objective of financial risk management at Linde is to minimize the negative impact of such fluctuations on the company’s earnings and cash flows. To manage these risks, among other strategies, Linde routinely enters into various derivative financial instruments (“derivatives”) including interest-rate swap and treasury rate lock agreements, currency-swap agreements, forward contracts, currency options, and commodity-swap agreements. These instruments are not entered into for trading purposes and Linde only uses commonly traded and non-leveraged instruments.

There are 3three 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 ~~its~~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 June 30, ~~2022,~~2023, the impact of such collateral posting arrangements on the fair value of derivatives was insignificant. Management believes the risk of incurring losses on derivative contracts related to credit risk is remote and any losses would be immaterial.

The following table is a summary of the notional amount and fair value of derivatives outstanding at June 30, ~~2022~~2023 and December 31, ~~2021~~2022 for consolidated subsidiaries:

Fair Value
Notional Amounts Assets (a) Liabilities (a)
(Millions of dollars) June 30,
2022 December 31,
2021 June 30,
2022 December 31,
2021 June 30,
2022 December 31,
2021
Derivatives Not Designated as Hedging Instruments:
Currency contracts:
Balance sheet items $ 3,237 $ 4,427 $ 12 $ 22 $ 15 $ 17
Forecasted transactions 829 537 11 6 23 11
Cross-currency swaps 66 148 — 21 2 4
Total $ 4,132 $ 5,112 $ 23 $ 49 $ 40 $ 32
Derivatives Designated as Hedging Instruments:
Currency contracts:
Forecasted transactions 335 758 6 14 3 3
Commodity contracts N/A N/A 43 49 — —
Interest rate swaps 839 1,251 — 24 36 —
Total Hedges $ 1,174 $ 2,009 $ 49 $ 87 $ 39 $ 3
Total Derivatives $ 5,306 $ 7,121 $ 72 $ 136 $ 79 $ 35


					Fair Value
	Notional Amounts				Assets (a)				Liabilities (a)
(Millions of dollars)	June 30, 2023		December 31, 2022		June 30, 2023		December 31, 2022		June 30, 2023		December 31, 2022
Derivatives Not Designated as Hedging Instruments:
Currency contracts:
Balance sheet items	$	3,477	$	3,056	$	26	$	13	$	8	$	7
Forecasted transactions	395		449		13		9		11		9
Cross-currency swaps	4		42		—		—		—		1
Total	$	3,876	$	3,547	$	39	$	22	$	19	$	17
Derivatives Designated as Hedging Instruments:


Currency contracts:

Forecasted transactions	$	292	$	323	$	5	$	6	$	1	$	5


Commodity contracts	N/A		N/A		10		—		7		4

Interest rate swaps	600		856		1		—		67		70
Total Hedges	$	892	$	1,179	$	16	$	6	$	75	$	79
Total Derivatives	$	4,768	$	4,726	$	55	$	28	$	94	$	96

(a)Amounts as atof June 30, ~~2022~~2023 and December 31, ~~2021~~2022 included current assets of ~~$69~~$45 million and ~~$101~~$24 million which are recorded in prepaid and other current assets; long-term assets of $3$10 million and ~~$35~~$4 million which are recorded in other long-term assets; current liabilities of ~~$32~~$30 million and ~~$27~~$23 million which are recorded in other current liabilities; and long-term liabilities of ~~$47~~$64 million and $8$73 million which are recorded in other long-term liabilities.

Balance Sheet Items

Foreign currency contracts related to balance sheet items consist of forward contracts entered into to manage the exposure to fluctuations in foreign-currency exchange rates on recorded balance sheet assets and liabilities denominated in currencies other than the functional currency of the related operating unit. Certain forward currency contracts are entered into to protect underlying monetary assets and liabilities denominated in foreign currencies from foreign exchange risk and are not designated as hedging instruments. For balance sheet items that are not designated as hedging instruments, the fair value adjustments on these contracts are offset by the fair value adjustments recorded on the underlying monetary assets and liabilities.

Forecasted Transactions

Foreign currency contracts related to forecasted transactions consist of forward contracts entered into to manage the exposure to fluctuations in foreign-currency exchange rates on (1) forecasted purchases of capital-related equipment and services, (2) forecasted sales, or (3) other forecasted cash flows denominated in currencies other than the functional currency of the related operating units. For forecasted transactions that are designated as cash flow hedges, fair value adjustments are recorded to accumulated other comprehensive income ~~("AOCI")~~(loss) with deferred amounts reclassified to earnings over the same time period as the income statement impact of the associated ~~forecasted transaction.~~purchase. For forecasted transactions that do not qualify for cash flow hedging relationships, fair value adjustments are recorded directly to earnings.

Cross-Currency Swaps

Cross-currency interest rate swaps are entered into to limit the foreign currency risk of future principal and interest cash flows associated with intercompany loans, and to a more limited extent bonds, denominated in non-functional currencies. The fair value adjustments on the cross-currency swaps are recorded to earnings, where they are offset by fair value adjustments on the underlying intercompany loan or bond.

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. ~~Commodity price fluctuations are largely covered through contractual pass through to customers.~~ To reduce the extent of ~~the remaining~~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 ~~("AOCI")~~(loss) with deferred amounts reclassified to earnings over the same time period as the income statement impact of the associated purchase.

Net Investment Hedges

As of June 30, ~~2022,~~2023, Linde has ~~€7.5~~€10.4 billion ($~~8.0~~11.2 billion) Euro-denominated notes and intercompany loans and ¥3.6 billion ($0.5 billion) CNY-denominated intercompany loans that are designated as hedges of the net investment positions in certain foreign operations. Since hedge inception, the deferred gain recorded within ~~the~~ cumulative translation adjustment component of ~~AOCI~~accumulated other comprehensive income (loss) in the ~~condensed~~ consolidated balance ~~sheets~~sheet and the consolidated ~~statements~~statement of comprehensive income is ~~$679~~$199 million (deferred ~~gain~~loss of ~~$415~~$66 million and ~~$539~~$151 million ~~recorded~~ for the quarter and six months ended June 30, ~~2022)~~2023, respectively).

As of June 30, ~~2022, Linde has~~2023, exchange rate movements relating to previously designated hedges that remain in ~~AOCI~~accumulated other comprehensive income (loss) is at a ~~loss~~gain of ~~$42~~$56 million. These movements will remain in ~~AOCI,~~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 ~~statement~~statements of income.

Interest Rate Swaps

Linde uses interest rate swaps to hedge the exposure to changes in the fair value of financial assets and financial liabilities as a result of interest rate changes. These interest rate swaps effectively convert fixed-rate interest exposures to variable rates; fair value adjustments are recognized in earnings along with an equally offsetting charge/benefit to earnings for the changes in the fair value of the underlying financial asset or financial liability (See Note 4).

Derivatives' Impact on Consolidated Statements of Income

The following table summarizes the impact of the company’s derivatives on the consolidated statements of income:


		Amount of Pre-Tax Gain (Loss) Recognized in Earnings *									Amount of Pre-Tax Gain (Loss) Recognized in Earnings *
		Quarter Ended June 30,				Six Months Ended June 30,					Quarter Ended June 30,				Six Months Ended June 30,
(Millions of dollars)	(Millions of dollars)	2022		2021		2022		2021		(Millions of dollars)	2023		2022		2023		2022
Derivatives Not Designated as Hedging Instruments	Derivatives Not Designated as Hedging Instruments									Derivatives Not Designated as Hedging Instruments
Currency contracts:	Currency contracts:									Currency contracts:
Balance sheet items	Balance sheet items									Balance sheet items
Debt-related	Debt-related	$	(41)	$	10	$	10	$	29	Debt-related	$	(44)	$	(41)	$	(83)	$	10
Other balance sheet items	Other balance sheet items	4		3		(8)		7		Other balance sheet items	(1)		4		(2)		(8)

Total	Total	$	(37)	$	13	$	2	$	36	Total	$	(45)	$	(37)	$	(85)	$	2

* 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 generally recorded in the consolidated statements of income as other income (expenses)-net.

The amounts of gain or loss recognized in ~~AOCI~~accumulated other comprehensive income (loss) and reclassified to the consolidated statement of income was not material for the ~~quarter and~~ six months ended June 30, ~~2022~~2023 and ~~2021,~~2022, respectively. Net impacts expected to be reclassified to earnings during the next twelve months are also not material.

6. Fair Value Disclosures

The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels as follows:

Level 1 – quoted prices in active markets for identical assets or liabilities

Level 2 – quoted prices for similar assets and liabilities in active markets or inputs that are observable

Level 3 – inputs that are unobservable (for example cash flow modeling inputs based on assumptions)

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table summarizes assets and liabilities measured at fair value on a recurring basis:

Fair Value Measurements Using
Level 1 Level 2 Level 3
(Millions of dollars) June 30,
2022 December 31,
2021 June 30,
2022 December 31,
2021 June 30,
2022 December 31,
2021
Assets
Derivative assets $ — $ — $ 72 $ 136 $ — $ —
Investments and securities* 26 42 — — 15 20
Total
$ 26 $ 42 $ 72 $ 136 15 $ 20
Liabilities
Derivative liabilities $ — $ — $ 79 $ 35 $ — $ —

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	Fair Value Measurements Using
	Level 1				Level 2				Level 3
(Millions of dollars)	June 30, 2023		December 31, 2022		June 30, 2023		December 31, 2022		June 30, 2023		December 31, 2022
Assets
Derivative assets	$	—	$	—	$	55	$	28	$	—	$	—
Investments and securities*	21		20		—		—		13		13
Total	$	21	$	20	$	55	$	28	13		$	13

Liabilities
Derivative liabilities	$	—	$	—	$	94	$	96	$	—	$	—

* Investments and securities are recorded in prepaid and other current assets and other long-term assets in the company's condensed consolidated balance sheets.

Level 1 investments and securities are marketable securities traded on an exchange. Level 2 investments are based on market prices obtained from independent brokers or determined using quantitative models that use as their basis readily observable market parameters that are actively quoted and can be validated through external sources, including third-party pricing services, brokers and market transactions. Level 3 investments and securities consist of a venture fund. For the valuation, Linde uses the net asset value received as part of the fund's quarterly reporting, which for the most part is not based on quoted prices in active markets. In order to reflect current market conditions, Linde proportionally adjusts ~~these~~ by observable market data (stock exchange prices) or current transaction prices.

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Changes in level 3 investments and securities were immaterial.

The fair value of cash and cash equivalents, short-term debt, accounts receivable-net, and accounts payable approximate carrying value because of the short-term maturities of these instruments.

The fair value of long-term debt is estimated based on the quoted market prices for the same or similar issues. Long-term debt is categorized within ~~either Level 1 or~~ Level 2 of the fair value ~~hierarchy depending on the trading volume of the issues and whether or not they are actively quoted in the market as opposed to traded through over-the-counter transactions.~~hierarchy. At June 30, 2023, the estimated fair value of Linde’s long-term debt portfolio was $12,689 million versus a carrying value of $14,472 million. At December 31, 2022, the estimated fair value of Linde’s long-term debt portfolio was ~~$11,344~~$11,994 million versus a carrying value of ~~$12,828 million. At December 31, 2021, the estimated fair value of Linde’s long-term debt portfolio was $13,219 million versus a carrying value of $13,044~~$13,797 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.

7. Earnings Per Share – Linde plc Shareholders

Basic and diluted earnings per share is computed by dividing ~~Income from continuing operations, Income from discontinued operations and~~ Net income – Linde plc for the period by the weighted average number of either basic or diluted shares outstanding, as follows:


		Quarter Ended June 30,				Six Months Ended June 30,					Quarter Ended June 30,				Six Months Ended June 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Numerator (Millions of dollars)	Numerator (Millions of dollars)									Numerator (Millions of dollars)
Income from continuing operations		$	372	$	840	$	1,546	$	1,819
Income from discontinued operations		—		1		$	—	2

Net Income – Linde plc	Net Income – Linde plc	$	372	$	841	$	1,546	$	1,821	Net Income – Linde plc	$	1,575	$	372	$	3,091	$	1,546
Denominator (Thousands of shares)	Denominator (Thousands of shares)									Denominator (Thousands of shares)
Weighted average shares outstanding	Weighted average shares outstanding	500,535		518,552		503,626		520,314		Weighted average shares outstanding	489,061		500,535		490,201		503,626
Shares earned and issuable under compensation plans	Shares earned and issuable under compensation plans	499		398		467		377		Shares earned and issuable under compensation plans	557		499		526		467
Weighted average shares used in basic earnings per share	Weighted average shares used in basic earnings per share	501,034		518,950		504,093		520,691		Weighted average shares used in basic earnings per share	489,618		501,034		490,727		504,093
Effect of dilutive securities	Effect of dilutive securities									Effect of dilutive securities
Stock options and awards	Stock options and awards	4,235		4,773		4,339		4,689		Stock options and awards	3,931		4,235		3,958		4,339
Weighted average shares used in diluted earnings per share	Weighted average shares used in diluted earnings per share	505,269		523,723		508,432		525,380		Weighted average shares used in diluted earnings per share	493,549		505,269		494,685		508,432
Basic earnings per share from continuing operations		$	0.74	$	1.62	$	3.07	$	3.49
Basic earnings per share from discontinued operations		—		—		$	—	$	—

Basic Earnings Per Share	Basic Earnings Per Share	$	0.74	$	1.62	$	3.07	$	3.49	Basic Earnings Per Share	$	3.22	$	0.74	$	6.30	$	3.07
Diluted earnings per share from continuing operations		$	0.74	$	1.60	$	3.04	$	3.46
Diluted earnings per share from discontinued operations		—		—		$	—	$	—

Diluted Earnings Per Share	Diluted Earnings Per Share	$	0.74	$	1.60	$	3.04	$	3.46	Diluted Earnings Per Share	$	3.19	$	0.74	$	6.25	$	3.04

There were no antidilutive shares for any period presented.

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8. Retirement Programs

The components of net pension and postretirement benefits other than pensions (“OPEB”) costs for the quarter and six months ended June 30, ~~2022~~2023 and ~~2021~~2022 are shown below:


		Quarter Ended June 30,				Six Months Ended June 30,					Quarter Ended June 30,				Six Months Ended June 30,

(Millions of dollars)	(Millions of dollars)	2022		2021		2022		2021		(Millions of dollars)	2023		2022		2023		2022
Amount recognized in Operating Profit	Amount recognized in Operating Profit									Amount recognized in Operating Profit
Service cost	Service cost	$	32	$	39	$	65	$	79	Service cost	$	21	$	32	$	42	$	65
Amount recognized in Net pension and OPEB cost (benefit), excluding service cost	Amount recognized in Net pension and OPEB cost (benefit), excluding service cost									Amount recognized in Net pension and OPEB cost (benefit), excluding service cost
Interest cost	Interest cost	51		38		104		77		Interest cost	94		51		186		104
Expected return on plan assets	Expected return on plan assets	(132)		(131)		(268)		(262)		Expected return on plan assets	(131)		(132)		(260)		(268)
Net amortization and deferral	Net amortization and deferral	19		44		38		87		Net amortization and deferral	(8)		19		(16)		38

		(62)		(49)		(126)		(98)			(45)		(62)		(90)		(126)

Net periodic benefit cost (benefit)	Net periodic benefit cost (benefit)	$	(30)	$	(10)	$	(61)	$	(19)	Net periodic benefit cost (benefit)	$	(24)	$	(30)	$	(48)	$	(61)

Components of net periodic benefit expense for other post-retirement plans for the quarter and six months ended June 30, ~~2022~~2023 and ~~2021~~2022 were not material.

Linde estimates that ~~2022~~2023 required contributions to its pension plans will be in the range of ~~$40~~approximately $40 million to ~~$50~~$50 million, of which ~~$19~~$25 million have been made through June 30, ~~2022.~~2023.

9. Commitments and Contingencies

Contingent Liabilities

Linde is subject to various lawsuits and government investigations that arise from time to time in the ordinary course of business. These actions are based upon alleged environmental, tax, antitrust and personal injury claims, among others. Linde has strong defenses in these cases and intends to defend itself vigorously. It is possible that the company may incur losses in connection with some of these actions in excess of accrued liabilities. Management does not anticipate that in the aggregate such losses would have a material adverse effect on the company’s consolidated financial position or liquidity; however, it is possible that the final outcomes could have a significant impact on the company’s reported results of operations in any given period (see Note 17 to the consolidated financial statements of Linde's ~~2021~~2022 Annual Report on Form 10-K).

Significant matters are:

•During 2009, the Brazilian government published Law 11941/2009 instituting a new voluntary amnesty program (“Refis Program”) which allowed Brazilian companies to settle certain federal tax disputes at reduced amounts. During 2009, the company decided that it was economically beneficial to settle many of its outstanding federal tax disputes and such disputes were enrolled in the Refis Program, subject to final calculation and review by the Brazilian federal government. The company recorded estimated liabilities based on the terms of the Refis Program. Since 2009, Linde has been unable to reach final agreement on the calculations and initiated litigation against the government in an attempt to resolve certain items. Open issues relate to the following matters: (i) application of cash deposits and net operating loss carryforwards to satisfy obligations and (ii) the amount of tax reductions available under the Refis Program. It is difficult to estimate the timing of resolution of legal matters in Brazil.

•At June 30, ~~2022~~2023, the most significant non-income ~~and income~~ tax claims in Brazil, after enrollment in the Refis Program, relate to state VAT tax ~~matters and a federal income tax matter where the taxing authorities are challenging the tax rate that should be applied to income generated by a subsidiary company.~~matters. The total estimated exposure relating to such claims, including interest and penalties, as appropriate, is approximately ~~$215~~$120 million. Linde has not recorded any liabilities related to such claims based on management ~~judgments, after considering judgments~~judgment and opinions of outside counsel.

During the first quarter of 2023, the Brazilian Supreme Court issued a decision related to a federal tax matter that the company previously disclosed as a contingency in Note 17 to the consolidated financial statements of Linde’s 2022 Annual report on Form 10-K. As a result of this decision, the company recorded a reserve based on its best estimate of potential settlement (see Note 2). Because litigation in Brazil historically takes many years to resolve, it is very difficult to estimate the timing of resolution of these matters; however, it is possible that certain of these matters may be resolved within the near term. The company is vigorously defending against the proceedings.

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•On September 1, 2010, CADE (Brazilian Administrative Council for Economic Defense) announced alleged anticompetitive activity on the part of 5five industrial gas companies in Brazil and imposed fines. Originally, CADE imposed a civil fine of ~~$2.2~~R$2.2 billion Brazilian reais ($~~419~~460 million) on White Martins, the Brazil-based subsidiary of Linde Inc. The fine was reduced to ~~$1.7~~R$1.7 billion Brazilian reais ($~~323~~355 million) due to a calculation error made by CADE.

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The fine against White Martins was overturned by the Ninth Federal Court of Brasilia. CADE appealed this decision, and the Federal Court of Appeals rejected CADE's appeal and confirmed the decision of the Ninth Federal Court of Brasilia. CADE has filed an appeal with the Superior Court of Justice and a decision is pending.

Similarly, on September 1, 2010, CADE imposed a civil fine of ~~$237~~R$237 million Brazilian reais ($4550 million) on Linde Gases Ltda., the former Brazil-based subsidiary of Linde AG, which was divested to MG Industries GmbH on March 1, 2019 and with respect to which Linde provided a contractual indemnity. The fine was reduced to ~~$188~~R$188 million Brazilian reais ($3639 million) due to a calculation error made by CADE. The fine against Linde Gases Ltda. was overturned by the Seventh Federal Court in Brasilia. CADE appealed this decision, and the Federal Court of Appeals rejected CADE's appeal and confirmed the decision of the Seventh Federal Court of Brasilia. CADE filed an appeal with the Superior Court of Justice which was denied. In parallel, CADE filed (i) an appeal with the Supreme Court of Justice, which was denied, and (ii) a subsequent appeal to a panel of the Supreme Court of Justice where a final decision is pending.

Linde has strong defenses and is confident that it will prevail on appeal and have the fines overturned. Linde strongly believes that the allegations of anticompetitive activity against our current and former Brazilian subsidiaries are not supported by valid and sufficient evidence. Linde believes that this decision will not stand up to judicial review and deems the possibility of cash outflows to be extremely unlikely. As a result, no reserves have been recorded as management does not believe that a loss from this case is probable.

•On and after April 23, 2019 former shareholders of Linde AG filed appraisal proceedings at the District Court (Landgericht) Munich I (Germany), seeking an increase of the cash consideration paid in connection with the previously completed cash merger squeeze-out of all of Linde AG’s minority shareholders for €189.46 per share. Any such increase would apply to all 14,763,113 Linde AG shares that were outstanding on April 8, 2019, when the cash merger squeeze-out was completed. The period for plaintiffs to file claims expired on July 9, 2019. The company believes the consideration paid was fair and that the claims lack merit, and no reserve has been established. We cannot estimate the timing of resolution.

•On December 30, 2022, the Russian Arbitration Court of the St. Petersburg and Leningrad Region issued an injunction preventing (i) the sale of any shares in Linde’s subsidiaries and joint ventures in Russia, and (ii) the disposal of any of assets in those entities exceeding 5% of the relevant company’s overall asset value. The injunction is not expected to have any impact on the operations of Linde’s Russian businesses. The injunction was requested by RusChemAlliance (RCA) as a preliminary measure to secure payment of an eventual award under an arbitration proceeding RCA intended to file against Linde Engineering for alleged breach of contract under the agreement to build a gas processing plant in Ust Luga, Russia entered into between a consortium of Linde Engineering and Renaissance Heavy Industries LLC, and RCA on July 7, 2021. Performance of the agreement was lawfully suspended by Linde Engineering on May 27, 2022 in compliance with applicable sanctions and in accordance with a decision by the sanctions authority in Germany. On March 1, 2023, RCA filed a claim in St. Petersburg against Linde GmbH for recovery of advance payments under the agreement ("Russian Claim"). On March 4, 2023, in accordance with the dispute resolution provisions of the agreement, Linde GmbH filed a notice of arbitration with the Hong Kong International Arbitration Centre ("HKIAC") against RCA to claim that (i) RCA has no entitlement to payment, (ii) RCA’s Russian claim is in breach of the arbitration agreement, and (iii) RCA must compensate Linde for the losses and damages caused by the injunction. Additionally, Linde GmbH filed for and on March 17, 2023 obtained an anti-suit injunction from a Hong Kong court against RCA directing RCA to seek a stay of the Russian Claim and ordering it to resolve any disputes in accordance with HKIAC arbitration. Despite the anti-suit injunction obtained by Linde, the proceeding in St. Petersburg has not been stayed and RCA is continuing to pursue its claim in Russia. We cannot estimate timing of resolution of the parallel proceedings in Russia and Hong Kong.

As of June 30, 2023, Linde had approximately $1.2 billion of advance payments recorded in contract liabilities related to engineering projects with RCA which are subject to sanctions and have been suspended accordingly as of May 27, 2022. Contract liabilities are typically recognized as revenue as performance obligations are satisfied under contract terms. Linde deconsolidated its Russian gas and engineering business entities as of June 30, 2022, and the remaining investment value of its Russia subsidiaries is immaterial. As such, the obligation to satisfy any residual contract liabilities is not expected to have an adverse impact on earnings, but may result in net cash outflows.

It is difficult to estimate the timing of resolution of this matter. The company intends to vigorously defend its interests in both the injunction and arbitration proceedings.

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10. Segments

For a description of Linde plc's operating segments, refer to Note 18 to the consolidated financial statements on Linde plc's ~~2021~~2022 Annual Report on Form 10-K.

The table below presents sales and operating profit information about reportable segments and Other for the quarter and six months ended June 30, ~~2022~~2023 and ~~2021.~~2022.


		Quarter Ended June 30,				Six Months Ended June 30,					Quarter Ended June 30,				Six Months Ended June 30,
(Millions of dollars)	(Millions of dollars)	2022		2021		2022		2021		(Millions of dollars)	2023		2022		2023		2022
SALES(a)	SALES(a)									SALES(a)
Americas	Americas	$	3,518	$	3,020	$	6,759	$	5,860	Americas	$	3,541	$	3,518	$	7,092	$	6,759
EMEA	EMEA	2,144		1,875		4,292		3,674		EMEA	2,160		2,144		4,337		4,292
APAC	APAC	1,651		1,544		3,253		2,980		APAC	1,683		1,651		3,281		3,253
Engineering	Engineering	644		646		1,372		1,320		Engineering	495		644		1,035		1,372
Other	Other	500		499		992		993		Other	325		500		652		992

Total sales	Total sales	$	8,457	$	7,584	$	16,668	$	14,827	Total sales	$	8,204	$	8,457	$	16,397	$	16,668

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		Quarter Ended June 30,				Six Months Ended June 30,					Quarter Ended June 30,				Six Months Ended June 30,
(Millions of dollars)	(Millions of dollars)	2022		2021		2022		2021		(Millions of dollars)	2023		2022		2023		2022
SEGMENT OPERATING PROFIT	SEGMENT OPERATING PROFIT									SEGMENT OPERATING PROFIT
Americas	Americas	$	910	$	871	$	1,814	$	1,666	Americas	$	1,070	$	910	$	2,095	$	1,814
EMEA	EMEA	536		487		1,039		938		EMEA	630		536		1,237		1,039
APAC	APAC	426		389		825		740		APAC	472		426		895		825
Engineering	Engineering	105		108		248		217		Engineering	107		105		256		248
Other	Other	11		(18)		(33)		(36)		Other	7		11		9		(33)
Segment operating profit	Segment operating profit	1,988		1,837		3,893		3,525		Segment operating profit	2,286		1,988		4,492		3,893
Russia-Ukraine conflict and other charges (Note 2)		(993)		(204)		(989)		(196)
Other charges (Note 2)										Other charges (Note 2)	(22)		(993)		(40)		(989)

Purchase accounting impacts - Linde AG	Purchase accounting impacts - Linde AG	(406)		(491)		(835)		(974)		Purchase accounting impacts - Linde AG	(253)		(406)		(508)		(835)
Total operating profit	Total operating profit	$	589	$	1,142	$	2,069	$	2,355	Total operating profit	$	2,011	$	589	$	3,944	$	2,069

(a)Sales reflect external sales only. Intersegment sales, primarily from Engineering to the industrial gases segments, were ~~$246~~$335 million and ~~$477~~$629 million for the quarter and six months ended June 30, ~~2022,~~2023, respectively, and ~~$234~~$246 million and ~~$423~~$477 million for the respective ~~2021~~2022 periods.

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11. Equity

Equity

On March 1, 2023, in connection with the shareholder approved intercompany reorganization that resulted in the delisting of old Linde plc from the New York Stock Exchange (NYSE) and the Frankfurt Stock Exchange (FSE), and the subsequent relisting of new Linde plc to the NYSE, Linde shareholders automatically received one share of the new holding company, listed on the NYSE in exchange for each share of Linde plc that was previously owned. The company issued 490,766,972 new Linde shares. Linde plc's historical treasury shares were immediately canceled which resulted in an approximately $15 billion decrease in treasury shares and retained earnings in Shareholders' Equity.

A summary of the changes in total equity for the quarter and six months ended June 30, ~~2022~~2023 and ~~2021~~2022 is provided below:

Quarter Ended June 30,
(Millions of dollars) 2022 2021
Activity Linde plc
Shareholders’
Equity Noncontrolling
Interests Total
Equity Linde plc
Shareholders’
Equity Noncontrolling
Interests Total
Equity
Balance, beginning of period $ 42,963 $ 1,414 $ 44,377 $ 46,210 $ 1,410 $ 47,620
Net income (a) 372 38 410 841 36 877
Other comprehensive income (loss) (1,528) (17) (1,545) 437 9 446
Noncontrolling interests:
Additions (reductions) (b) — (53) (53) — 7 7
Dividends and other capital changes — (29) (29) — (24) (24)
Dividends to Linde plc ordinary share holders ($1.17 per share in 2022 and $1.06 per share in 2021) (585) — (585) (549) — (549)
Issuances of ordinary shares:
For employee savings and incentive plans 7 — 7 (9) — (9)
Purchases of ordinary shares (1,572) — (1,572) (1,187) — (1,187)
Share-based compensation 17 — 17 34 — 34
Balance, end of period $ 39,674 $ 1,353 $ 41,027 $ 45,777 $ 1,438 $ 47,215

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	Quarter Ended June 30,
(Millions of dollars)	2023						2022
Activity	Linde plc Shareholders’ Equity		Noncontrolling Interests		Total Equity		Linde plc Shareholders’ Equity		Noncontrolling Interests		Total Equity
Balance, beginning of period	$	39,970	$	1,353	$	41,323	$	42,963	$	1,414	$	44,377
Net income (a)	1,575		37		1,612		372		38		410
Other comprehensive income (loss)	(89)		(23)		(112)		(1,528)		(17)		(1,545)
Noncontrolling interests:
Additions (reductions)	(11)		(7)		(18)		—		(53)		(53)
Dividends and other capital changes	—		(36)		(36)		—		(29)		(29)

Dividends to Linde plc ordinary share holders ($1.275 per share in 2023 and $1.17 per share in 2022)	(623)		—		(623)		(585)		—		(585)
Issuances of ordinary shares:

For employee savings and incentive plans	(35)		—		(35)		7		—		7

Purchases of ordinary shares	(912)		—		(912)		(1,572)		—		(1,572)

Share-based compensation	36		—		36		17		—		17
Balance, end of period	$	39,911	$	1,324	$	41,235	$	39,674	$	1,353	$	41,027


		Six Months Ended June 30,													Six Months Ended June 30,
(Millions of dollars)	(Millions of dollars)	2022						2021						(Millions of dollars)	2023						2022
Activity	Activity	Linde plc Shareholders’ Equity		Noncontrolling Interests		Total Equity		Linde plc Shareholders’ Equity		Noncontrolling Interests		Total Equity		Activity	Linde plc Shareholders’ Equity		Noncontrolling Interests		Total Equity		Linde plc Shareholders’ Equity		Noncontrolling Interests		Total Equity
Balance, beginning of period	Balance, beginning of period	$	44,035	$	1,393	$	45,428	$	47,317	$	2,252	$	49,569	Balance, beginning of period	$	40,028	$	1,346	$	41,374	$	44,035	$	1,393	$	45,428
Net income (a)	Net income (a)	1,546		74		1,620		1,821		74		1,895		Net income (a)	3,091		73		3,164		1,546		74		1,620
Other comprehensive income (loss)	Other comprehensive income (loss)	(1,418)		(29)		(1,447)		(218)		3		(215)		Other comprehensive income (loss)	(117)		(25)		(142)		(1,418)		(29)		(1,447)
Noncontrolling interests:	Noncontrolling interests:													Noncontrolling interests:
Additions (reductions) ~~(b)~~	Additions (reductions) ~~(b)~~	—		(49)		(49)		—		(846)		(846)		Additions (reductions) ~~(b)~~	(11)		(5)		(16)		—		(49)		(49)
Dividends and other capital changes	Dividends and other capital changes	—		(36)		(36)		—		(45)		(45)		Dividends and other capital changes	—		(65)		(65)		—		(36)		(36)

Dividends to Linde plc ordinary share holders ($2.34 per share in 2022 and $2.12 per share in 2021)		(1,177)		—		(1,177)		(1,102)		—		(1,102)
Dividends to Linde plc ordinary share holders ($2.55 per share in 2023 and $2.34 per share in 2022)														Dividends to Linde plc ordinary share holders ($2.55 per share in 2023 and $2.34 per share in 2022)	(1,246)		—		(1,246)		(1,177)		—		(1,177)
Issuances of ordinary shares:	Issuances of ordinary shares:													Issuances of ordinary shares:

For employee savings and incentive plans	For employee savings and incentive plans	(39)		—		(39)		(11)		—		(11)		For employee savings and incentive plans	(98)		—		(98)		(39)		—		(39)

Purchases of ordinary shares	Purchases of ordinary shares	(3,324)		—		(3,324)		(2,093)		—		(2,093)		Purchases of ordinary shares	(1,802)		—		(1,802)		(3,324)		—		(3,324)

Share-based compensation	Share-based compensation	51		—		51		63		—		63		Share-based compensation	66		—		66		51		—		51
Balance, end of period	Balance, end of period	$	39,674	$	1,353	$	41,027	$	45,777	$	1,438	$	47,215	Balance, end of period	$	39,911	$	1,324	$	41,235	$	39,674	$	1,353	$	41,027

(a) Net income for noncontrolling interests excludes net income related to redeemable noncontrolling interests which is not significant for the quarter and six months ended June 30, ~~2022~~2023 and ~~2021~~2022 and which is not part of total equity.

(b) Additions (reductions) for noncontrolling interests for the quarter and six months ended June 30, 2022 includes the impact of deconsolidating the company's Russian gas and engineering business entities (refer to Note 2). Additions (reductions) for noncontrolling interests for the six months ended June 30, 2021 includes the impact from the deconsolidation of a joint venture with operations in APAC.

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The components of ~~AOCI~~Accumulated other comprehensive income (loss) are as follows:


		June 30,		December 31,			June 30,		December 31,
(Millions of dollars)	(Millions of dollars)	2022		2021		(Millions of dollars)	2023		2022
Cumulative translation adjustment - net of taxes:	Cumulative translation adjustment - net of taxes:					Cumulative translation adjustment - net of taxes:
Americas	Americas	$	(3,928)	$	(3,985)	Americas	$	(3,572)	$	(3,942)
EMEA	EMEA	(1,384)		94		EMEA	(881)		(1,249)
APAC	APAC	(683)		154		APAC	(1,238)		(835)
Engineering	Engineering	(338)		24		Engineering	(165)		(241)
Other	Other	718		(280)		Other	231		483
		(5,615)		(3,993)			(5,625)		(5,784)
Derivatives - net of taxes	Derivatives - net of taxes	147		75		Derivatives - net of taxes	(9)		62

Pension / OPEB (net of $276 million and $305 million tax benefit in June 30, 2022 and December 31, 2021, respectively)		(998)		(1,130)
Pension / OPEB (net of $11 million tax benefit and $54 million tax obligation at June 30, 2023 and December 31, 2022, respectively)						Pension / OPEB (net of $11 million tax benefit and $54 million tax obligation at June 30, 2023 and December 31, 2022, respectively)	(265)		(60)
		$	(6,466)	$	(5,048)		$	(5,899)	$	(5,782)

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12. Revenue Recognition

Revenue is accounted for in accordance with ASC 606. Revenue is recognized as control of goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled to receive in exchange for the goods or services.

Contracts with Customers

Linde serves a diverse group of industries including healthcare, chemicals and energy, manufacturing, metals and mining, food and beverage, and electronics.

Industrial Gases

Within each of the company’s geographic segments for industrial gases, there are three basic distribution methods: (i) on-site or tonnage; (ii) merchant or bulk liquid; and (iii) packaged or cylinder gases. The distribution method used by Linde to supply a customer is determined by many factors, including the customer’s volume requirements and location. The distribution method generally determines the contract terms with the customer and, accordingly, the revenue recognition accounting practices. Linde's primary products in its industrial gases business are atmospheric gases (oxygen, nitrogen, argon, rare gases) and process gases (carbon dioxide, helium, hydrogen, electronic gases, specialty gases, acetylene). These products are generally sold through one of the three distribution methods.

Following is a description of each of the three industrial gases distribution methods and the respective revenue recognition policies:

On-site. Customers that require the largest volumes of product and that have a relatively constant demand pattern are supplied by cryogenic and process gas on-site plants. Linde constructs plants on or adjacent to these customers’ sites and supplies the product directly to customers by pipeline. Where there are large concentrations of customers, a single pipeline may be connected to several plants and customers. On-site product supply contracts generally are total requirement contracts with terms typically ranging from 10-20 years and contain minimum purchase requirements and price escalation provisions. Many of the cryogenic on-site plants also produce liquid products for the merchant market. Therefore, plants are typically not dedicated to a single customer. Additionally, Linde is responsible for the design, construction, operations and maintenance of the plants and our customers typically have no involvement in these activities. Advanced air separation processes also allow on-site delivery to customers with smaller volume requirements.

The company’s performance obligations related to on-site customers are satisfied over time as customers receive and obtain control of the product. Linde has elected to apply the practical expedient for measuring progress towards the completion of a performance obligation and recognizes revenue as the company has the right to invoice each customer, which generally corresponds with product delivery. Accordingly, revenue is recognized when product is delivered to the customer and the company has the right to invoice the customer in accordance with the contract terms. Consideration in these contracts is generally based on pricing which fluctuates with various price indices. Variable components of consideration exist within on-site contracts but are considered constrained.

Merchant. Merchant deliveries generally are made from Linde's plants by tanker trucks to storage containers at the customer's site. Due to the relatively high distribution cost, merchant oxygen and nitrogen generally have a relatively small distribution

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radius from the plants at which they are produced. Merchant argon, hydrogen and helium can be shipped much longer distances. The customer agreements used in the merchant business are usually three-to ~~seven-year~~seven-year supply agreements based on the requirements of the customer. These contracts generally do not contain minimum purchase requirements or volume commitments.

The company’s performance obligations related to merchant customers are generally satisfied at a point in time as the customers receive and obtain control of the product. Revenue is recognized when product is delivered to the customer and the company has the right to invoice the customer in accordance with the contract terms. Any variable components of consideration within merchant contracts are constrained; however, this consideration is not significant.

Packaged Gases. Customers requiring small volumes are supplied products in containers called cylinders, under medium to high pressure. Linde distributes merchant gases from its production plants to company-owned cylinder filling plants where cylinders are then filled for distribution to customers. Cylinders may be delivered to the customer’s site or picked up by the customer at a packaging facility or retail store. Linde invoices the customer for the industrial gases and the use of the cylinder container(s). The company also sells hardgoods and welding equipment purchased from independent manufacturers. Packaged gases are generally sold under one to ~~three-year~~three-year supply contracts and purchase orders and do not contain minimum purchase requirements or volume commitments.

The company’s performance obligations related to packaged gases are satisfied at a point in time. Accordingly, revenue is recognized when product is delivered to the customer or when the customer picks up product from a packaged gas facility or

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retail store and the company has the right to payment from the customer in accordance with the contract terms. Any variable consideration is constrained and will be recognized when the uncertainty related to the consideration is resolved.

~~Linde~~ 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. Revenue from sale of equipment is generally recognized over time as Linde has an enforceable right to payment for performance completed to date and performance does not create an asset with alternative use. For contracts recognized over time, revenue is recognized primarily using a cost incurred input method. Costs incurred to date relative to total estimated costs at completion are used to measure progress toward satisfying performance obligations. Costs incurred include material, labor, and overhead costs and represent work contributing and proportionate to the transfer of control to the customer. ~~Contract~~Changes to cost estimates and contract modifications are typically accounted for as part of the existing contract and are recognized as a cumulative ~~adjustment~~adjustments for the inception-to-date effect of such change.

Contract Assets and Liabilities

Contract assets and liabilities result from differences in timing of revenue recognition and customer invoicing. Contract assets primarily relate to sale of equipment contracts for which revenue is recognized over time. The balance represents unbilled revenue which occurs when revenue recognized under the measure of progress exceeds amounts invoiced to customers. Customer invoices may be based on the passage of time, the achievement of certain contractual milestones or a combination of both criteria. Contract liabilities include advance payments or right to consideration prior to performance under the contract. Contract liabilities are recognized as revenue as performance obligations are satisfied under contract terms. Linde has contract assets of ~~$78~~$156 million and ~~$134~~$124 million at June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively. Total contract liabilities are ~~$3,806~~$4,196 million at June 30, ~~2022~~2023 (current of ~~$2,933~~$3,246 million and ~~$873~~$950 million within other long-term liabilities in the condensed consolidated balance sheets). As of June 30, ~~2022~~2023, Linde has approximately ~~$1.9~~$1.7 billion recorded in contract liabilities related to engineering projects in Russia subject to ~~sanctions in Russia.~~sanctions. Total contract liabilities were ~~$3,699~~$3,986 million at December 31, ~~2021~~2022 (current contract liabilities of ~~$2,940~~$3,073 million and ~~$759~~$913 million inwithin other long-term liabilities in the condensed consolidated balance sheets). Revenue recognized for the six months ended June 30, ~~2022~~2023 that was included in the contract liability at December 31, ~~2021~~2022 was ~~$913~~$568 million. Contract assets and liabilities primarily relate to the ~~Linde~~ Engineering business.

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 1819 to Linde plc's ~~2021~~2022 Annual Report on Form 10-K, the company manages its industrial gases business on a geographic basis, while the Engineering and Other businesses are generally managed on a global basis.

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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.

The following tables show sales by distribution method at the consolidated level and for each reportable segment and Other for the quarter and six months ended June 30, ~~2022~~2023 and June 30, ~~2021.~~2022.


(Millions of dollars)	Quarter Ended June 30, 2023
Sales	Americas		EMEA		APAC		Engineering		Other		Total		%

Merchant	$	1,094	$	704	$	570	$	—	$	53	$	2,421	30	%
On-Site	756		493		677		—		—		1,926		23	%
Packaged Gas	1,638		946		366		—		12		2,962		36	%
Other	53		17		70		495		260		895		11	%
Total	$	3,541	$	2,160	$	1,683	$	495	$	325	$	8,204	100	%

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(Millions of dollars)	Quarter Ended June 30, 2022
Sales	Americas		EMEA		APAC		Engineering		Other		Total		%

Merchant	$	941	$	634	$	562	$	—	$	40	$	2,177	26	%
On-Site	1,049		610		631		—		—		2,290		27	%
Packaged Gas	1,473		884		389		—		9		2,755		33	%
Other	55		16		69		644		451		1,235		15	%
Total	$	3,518	$	2,144	$	1,651	$	644	$	500	$	8,457	100	%

(Millions of dollars) Quarter Ended June 30, 2021
Sales Americas EMEA APAC Engineering Other Total %
Merchant $ 821 $ 556 $ 551 $ — $ 43 $ 1,971 26 %
On-Site 774 396 582 — — 1,752 23 %
Packaged Gas 1,369 912 392 — 6 2,679 35 %
Other 56 11 19 646 450 1,182 16 %
Total $ 3,020 $ 1,875 $ 1,544 $ 646 $ 499 $ 7,584 100 %


(Millions of dollars)	(Millions of dollars)	Six Months Ended June 30, 2022														(Millions of dollars)	Six Months Ended June 30, 2023
Sales	Sales	Americas		EMEA		APAC		Engineering		Other		Total		%		Sales	Americas		EMEA		APAC		Engineering		Other		Total		%

Merchant	Merchant	$	1,815	$	1,248	$	1,078	$	—	$	79	$	4,220	25	%	Merchant	$	2,137	$	1,404	$	1,122	$	—	$	108	$	4,771	29	%
On-Site	On-Site	1,931		1,241		1,286		—		—		4,458		27	%	On-Site	1,560		1,031		1,321		—		—		3,912		24	%
Packaged Gas	Packaged Gas	2,906		1,775		750		—		16		5,447		33	%	Packaged Gas	3,276		1,874		721		—		32		5,903		36	%
Other	Other	107		28		139		1,372		897		2,543		15	%	Other	119		28		117		1,035		512		1,811		11	%
Total	Total	$	6,759	$	4,292	$	3,253	$	1,372	$	992	$	16,668	100	%	Total	$	7,092	$	4,337	$	3,281	$	1,035	$	652	$	16,397	100	%

(Millions of dollars)	(Millions of dollars)	Six Months Ended June 30, 2021														(Millions of dollars)	Six Months Ended June 30, 2022
Sales	Sales	Americas		EMEA		APAC		Engineering		Other		Total		%		Sales	Americas		EMEA		APAC		Engineering		Other		Total		%

Merchant	Merchant	$	1,592	$	1,087	$	1,035	$	—	$	95	$	3,809	26	%	Merchant	$	1,815	$	1,248	$	1,078	$	—	$	79	$	4,220	25	%
On-Site	On-Site	1,463		788		1,134		—		—		3,385		23	%	On-Site	1,931		1,241		1,286		—		—		4,458		27	%
Packaged Gas	Packaged Gas	2,701		1,772		753		—		12		5,238		35	%	Packaged Gas	2,906		1,775		750		—		16		5,447		33	%
Other	Other	104		27		58		1,320		886		2,395		16	%	Other	107		28		139		1,372		897		2,543		15	%
Total	Total	$	5,860	$	3,674	$	2,980	$	1,320	$	993	$	14,827	100	%	Total	$	6,759	$	4,292	$	3,253	$	1,372	$	992	$	16,668	100	%

Remaining Performance Obligations

As described above, Linde's contracts with on-site customers are under long-term supply arrangements which generally require the customer to purchase their requirements from Linde and also have minimum purchase requirements. Additionally, plant sales from the Linde Engineering business are primarily contracted on a fixed price basis. The company estimates the consideration related to future minimum purchase requirements and plant sales was approximately ~~$51~~$47 billion (excludes Russian projects which are impacted by ~~sanctions, refer to footnote 2)~~sanctions). This amount excludes all on-site sales above minimum purchase requirements, which can be significant depending on customer needs. In the future, actual amounts will be different due to impacts from several factors, many of which are beyond the company’s control including, but not limited to, timing of newly signed, terminated and renewed contracts, inflationary price escalations, currency exchange rates, and pass-through costs related to natural gas and electricity. The actual duration of long-term supply contracts ranges up to twenty years. The company estimates that approximately half of the revenue related to minimum purchase requirements will be earned in the next five years and the remaining thereafter.

13. Business Acquisition

Acquisition of nexAir, LLC

On January 5, 2023, Linde completed the acquisition of nexAir, LLC, a gas distribution and welding supply company in the United States, in order to further expand the company’s geographic footprint into different regions. Prior to completion of the acquisition, Linde held a 23% interest in nexAir, LLC. Pursuant to a signed purchase agreement between Linde and nexAir, LLC, Linde purchased the remaining 77% ownership interest in an all cash transaction with a total purchase price of $859 million, or $804 million net of cash acquired. The fair value of Linde’s equity interest in nexAir, LLC immediately preceding the acquisition date was $183 million, which resulted in a gain on remeasurement of the company’s previously held equity interest which was not material; this gain is recorded within “Other income (expenses) – net” on the consolidated statements of income.

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Preliminary Allocation of Purchase Price

The acquisition of nexAir, LLC was accounted for as a business combination. Following the acquisition date, 100% of nexAir, LLC's results were consolidated in the Americas business segment. Linde's three and six months ended June 30, 2023 consolidated income statement includes sales of $101 million and $204 million, respectively, related to nexAir, LLC. Pro forma results for 2022 have not been included as the ~~remaining thereafter.~~impact of the acquisition is not material to the consolidated statements of income.

The company has estimated the preliminary fair value of net assets acquired based on information currently available and will continue to adjust those estimates as additional information becomes available. The following table summarizes the fair value of identifiable assets acquired and liabilities assumed in the acquisition of nexAir, LLC as of the acquisition date.


(Millions of dollars)	January 5, 2023

Assets:
Cash and cash equivalents	$	55
Other current assets - net	48
Property, plant and equipment, net	241
Other intangible assets - net	245
Other long-term liabilities - net	(5)
Total identifiable net assets	$	584

Goodwill	$	458
Fair value of previously held equity interest	$	183
Total purchase price	$	859

~~13. Subsequent Events~~nexAir, LLC’s assets and liabilities were measured at estimated fair values at January 5, 2023. Estimates of fair value represent management's best estimate of assumptions about future events and uncertainties, including significant judgments related to future cash flows (sales, costs, customer attrition rates, and contributory asset charges), discount rates, competitive trends, and market comparables. Inputs used were generally obtained from historical data supplemented by current and anticipated market conditions and growth rates.

~~In July 2022 Linde signed~~The fair value of the previously held equity interest was based upon a purchase price valuation (excluding debt) multiplied by the company’s previously held ownership interest adjusted by a discount for lack of marketability. The fair value of property, plant & equipment, net is based on assumptions that market participants would use in pricing an ~~agreement~~asset, based on the most advantageous market for the ~~sale of~~asset (i.e., its ~~GIST business. Under~~highest and best use). The cost approach, adjusted for the ~~terms~~age and condition of the ~~agreement,~~property, plant and equipment, was used to estimate fair value.

Identifiable intangible assets primarily consist of customer relationships of approximately $245 million that will be amortized over their estimated useful life of 20 years. The fair value of the ~~agreed sale price is approximately $275~~customer relationships intangible asset was valued using a multi-period excess earnings method, a form of the income approach, which incorporates the estimated future cash flows to be generated from nexAir, LLC's existing customer base. There were no indefinite-lived intangible assets identified in conjunction with the acquisition.

The excess of the consideration for the acquisition over the preliminary fair value of net assets acquired was recorded as goodwill. The acquisition resulted in $458 million ~~plus potential additional earnouts. The divestment~~ of ~~this non-core business~~goodwill, the majority of which is expected to be ~~completed in~~deductible for tax purposes. The goodwill balance is primarily attributable to the ~~second half~~assembled workforce and operating synergies expected to result from the acquisition. The goodwill recorded as a result of ~~2022, pending regulatory approvals.~~

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

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations ("MD&A")

Non-GAAP Measures

Throughout MD&A, the company provides adjusted operating results ~~from continuing operations~~ exclusive of certain items such as ~~cost reduction programs and other~~Other charges, net gains or losses on sale of businesses, purchase accounting impacts of the Linde AG merger and pension settlement charges. Adjusted amounts are non-GAAP measures which are intended to supplement investors’ understanding of the company’s financial information by providing measures which investors, financial analysts and management find useful in evaluating the company’s operating performance. 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. In addition, operating results, ~~from continuing operations,~~ excluding these items, is important to management's development of annual and long-term employee incentive compensation plans. 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 and reconciliations are separately included in a later section in the MD&A titled "Non-GAAP Measures and Reconciliations."

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Consolidated Results

The following table provides summary information for the quarters and six months ended June 30, ~~2022~~2023 and ~~2021.~~2022. The reported amounts are GAAP amounts from the Consolidated Statements of Income. The adjusted amounts are intended to supplement investors' understanding of the company's financial information and are not a substitute for GAAP measures:


		Quarter Ended June 30,								Six Months Ended June 30,								Quarter Ended June 30,					Six Months Ended June 30,
(Millions of dollars, except per share data)	(Millions of dollars, except per share data)	2022			2021			Variance		2022			2021			Variance			(Millions of dollars, except per share data)	2023			2022			Variance		2023			2022			Variance
Sales	Sales	$	8,457		$	7,584		12	%	$	16,668		$	14,827		12	%		Sales	$	8,204		$	8,457		(3)	%	$	16,397		$	16,668		(2)	%
Cost of sales, exclusive of depreciation and amortization	Cost of sales, exclusive of depreciation and amortization	$	4,940		$	4,194		18	%	$	9,738		$	8,248		18	%		Cost of sales, exclusive of depreciation and amortization	$	4,316		$	4,940		(13)	%	$	8,747		$	9,738		(10)	%
As a percent of sales	As a percent of sales	58.4		%	55.3		%			58.4		%	55.6		%				As a percent of sales	52.6		%	58.4		%			53.3		%	58.4		%
Selling, general and administrative	Selling, general and administrative	$	771		$	822		(6)	%	$	1,573		$	1,609		(2)	%		Selling, general and administrative	$	833		$	771		8	%	$	1,655		$	1,573		5	%
As a percent of sales	As a percent of sales	9.1		%	10.8		%			9.4		%	10.9		%				As a percent of sales	10.2		%	9.1		%			10.1		%	9.4		%
Depreciation and amortization	Depreciation and amortization	$	1,091		$	1,171		(7)	%	$	2,203		$	2,337		(6)	%		Depreciation and amortization	$	960		$	1,091		(12)	%	$	1,908		$	2,203		(13)	%
Russia-Ukraine conflict and other charges (b)		$	993		$	204		387	%	$	989		$	196		405	%

Other charges (b)																			Other charges (b)	$	22		$	993		(98)	%	$	40		$	989		(96)	%
Other income (expense) - net	Other income (expense) - net	$	(36)		$	(17)		(112)	%	$	(24)		$	(13)		(85)	%		Other income (expense) - net	$	(27)		$	(36)		25	%	$	(32)		$	(24)		(33)	%
Operating profit	Operating profit	$	589		$	1,142		(48)	%	$	2,069		$	2,355		(12)	%		Operating profit	$	2,011		$	589		241	%	$	3,944		$	2,069		91	%
Operating margin	Operating margin	7.0		%	15.1		%			12.4		%	15.9		%				Operating margin	24.5		%	7.0		%			24.1		%	12.4		%
Interest expense - net	Interest expense - net	$	5		$	18		(72)	%	$	14		$	38		(63)	%		Interest expense - net	$	52		$	5		940	%	$	89		$	14		536	%
Net pension and OPEB cost (benefit), excluding service cost	Net pension and OPEB cost (benefit), excluding service cost	$	(62)		$	(49)		27	%	$	(126)		$	(98)		29	%		Net pension and OPEB cost (benefit), excluding service cost	$	(45)		$	(62)		(27)	%	$	(90)		$	(126)		(29)	%
Effective tax rate	Effective tax rate	44.3		%	28.5		%			30.0		%	24.9		%				Effective tax rate	21.9		%	44.3		%			22.0		%	30.0		%
Income from equity investments	Income from equity investments	$	50		$	37		35	%	$	94		$	80		18	%		Income from equity investments	$	46		$	50		(8)	%	$	87		$	94		(7)	%
Noncontrolling interests from continuing operations		$	(38)		$	(36)		6	%	$	(74)		$	(74)		—	%
Income from continuing operations		$	372		$	840		(56)	%	$	1,546		$	1,819		(15)	%
Diluted earnings per share from continuing operations		$	0.74		$	1.60		(54)	%	$	3.04		$	3.46		(12)	%
Noncontrolling interests																			Noncontrolling interests	$	(37)		$	(38)		(3)	%	$	(73)		$	(74)		(1)	%
Net Income – Linde plc																			Net Income – Linde plc	$	1,575		$	372		323	%	$	3,091		$	1,546		100	%
Diluted earnings per share																			Diluted earnings per share	$	3.19		$	0.74		331	%	$	6.25		$	3.04		106	%
Diluted shares outstanding	Diluted shares outstanding	505,269			523,723			(4)	%	508,432			525,380			(3)	%		Diluted shares outstanding	493,549			505,269			(2)	%	494,685			508,432			(3)	%
Number of employees	Number of employees	72,438			71,736			1	%	72,438			71,736			1	%		Number of employees	66,270			72,438			(9)	%	66,270			72,438			(9)	%
Adjusted Amounts (a)	Adjusted Amounts (a)																		Adjusted Amounts (a)
Operating profit	Operating profit	$	1,988		$	1,837		8	%	$	3,893		$	3,525		10	%		Operating profit	$	2,286		$	1,988		15	%	$	4,492		$	3,893		15	%
Operating margin	Operating margin	23.5		%	24.2		%			23.4		%	23.8		%				Operating margin	27.9		%	23.5		%			27.4		%	23.4		%
Effective tax rate	Effective tax rate	24.5		%	24.6		%			24.4		%	24.3		%				Effective tax rate	23.7		%	24.5		%			23.9		%	24.4		%
Income from continuing operations		$	1,566		$	1,415		11	%	$	3,066		$	2,727		12	%
Diluted earnings per share from continuing operations		$	3.10		$	2.70		15	%	$	6.03		$	5.19		16	%
Net Income – Linde plc																			Net Income – Linde plc	$	1,760		$	1,566		12	%	$	3,453		$	3,066		13	%
Diluted earnings per share																			Diluted earnings per share	$	3.57		$	3.10		15	%	$	6.98		$	6.03		16	%
Other Financial Data (a)	Other Financial Data (a)																		Other Financial Data (a)
EBITDA from continuing operations		$	1,730		$	2,350		(26)	%	$	4,366		$	4,772		(9)	%
EBITDA																			EBITDA	$	3,017		$	1,730		74	%	$	5,939		$	4,366		36	%
As percent of sales	As percent of sales	20.5		%	31.0		%			26.2		%	32.2		%				As percent of sales	36.8		%	20.5		%			36.2		%	26.2		%
Adjusted EBITDA from continuing operations		$	2,746		$	2,585		6	%	$	5,409		$	5,023		8	%
Adjusted EBITDA																			Adjusted EBITDA	$	3,059		$	2,746		11	%	$	6,022		$	5,409
As percent of sales	As percent of sales	32.5		%	34.1		%			32.5		%	33.9		%				As percent of sales	37.3		%	32.5		%			36.7		%	32.5		%

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

(b) See Note 2 to the condensed consolidated financial statements.

Reported

In the second quarter of ~~2022,~~2023, Linde's sales were ~~$8,457~~$8,204 million, ~~12% above~~$253 million below prior ~~year, primarily driven by 7% price attainment and 2% higher volumes.~~year. Cost pass-through, representing the contractual billing of energy cost variances primarily to onsite customers, ~~increased~~decreased sales by 7%4% in the quarter, with minimal impact on operating profit. Divestitures, net of acquisitions, decreased sales by 2% in the quarter, primarily due to the divestment of the GIST business, partially offset by the nexAir, LLC acquisition. Engineering decreased sales by 2% in the quarter. Currency translation decreased sales by 5%1% in the ~~second~~quarter. Volumes decreased sales by 1% in the quarter ofversus the 2022 ~~as compared to 2021.~~respective period. Higher price attainment increased sales by 7% in the quarter.

Reported operating profit for the second quarter of ~~2022~~2023 of ~~$589~~$2,011 million, or ~~7.0%~~24.5% of sales, was ~~48% below~~241% above prior year. The reported year-over-year ~~decrease~~increase was primarily due to charges recorded in second quarter 2022 relating to the deconsolidation and impairment of Russian subsidiaries resulting from the ongoing war in Ukraine and related ~~sanctions (see Note 2 to~~sanctions. In addition, the ~~condensed consolidated financial statements) partially offset~~increase in the quarter was also driven by higher ~~price~~pricing, productivity initiatives and ~~productivity initiatives.~~lower depreciation and amortization driven by merger related intangible assets, which more than offset adverse impacts from cost inflation and currency. The reported effective tax rate ("ETR") ~~was 44.3%~~of 21.9% in the second quarter ~~2022 versus 28.5% in the second quarter 2021, driven primarily by the non-deductibility of the~~2023 related to higher tax benefits from share based compensation

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and a tax refund relating to a prior period versus 44.3% in the second quarter 2022. Second quarter 2022 ETR was impacted by the non-deductibility of the charges related to the deconsolidation and impairment of Linde's Russian subsidiaries which were partially offset by the reversal of a related deferred tax liability. Diluted earnings per share ~~from continuing operations~~ ("EPS") was ~~$0.74,~~$3.19, or ~~54% below~~331% above EPS of ~~$1.60~~$0.74 in the second quarter of ~~2021~~2022, primarily due to ~~lower~~higher net income ~~from continuing operations, partially offset by~~- Linde plc and lower diluted shares outstanding.

Adjusted

In the second quarter of ~~2022,~~2023, adjusted operating profit of ~~$1,988~~$2,286 million, or ~~23.5%~~27.9% of sales, was 8%15% higher as compared to ~~2021~~the respective 2022 period, driven by higher ~~price~~pricing and productivity initiatives, partially offset by cost inflation. The adjusted ETR was ~~24.5%~~23.7% in the second quarter ~~2022~~2023 versus ~~24.6%~~24.5% in the ~~2021~~2022 quarter. On an adjusted basis, EPS was ~~$3.10,~~$3.57, 15% above the ~~2021~~2022 adjusted EPS of ~~$2.70,~~$3.10, driven by higher adjusted net income ~~from continuing operations~~- Linde plc and lower diluted shares outstanding.

Outlook

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

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Results of operations

The changes in consolidated sales compared to the prior year are attributable to the following:


		Quarter Ended June 30, 2022 vs. 2021		Six Months Ended June 30, 2022 vs. 2021			Quarter Ended June 30, 2023 vs. 2022		Six Months Ended June 30, 2023 vs. 2022
		% Change		% Change			% Change		% Change

Factors Contributing to Changes - Sales	Factors Contributing to Changes - Sales					Factors Contributing to Changes - Sales
Volume	Volume	2	%	2	%	Volume	(1)	%	(1)	%
Price/Mix	Price/Mix	7	%	6	%	Price/Mix	7	%	7	%
Cost pass-through	Cost pass-through	7	%	7	%	Cost pass-through	(4)	%	(2)	%
Currency	Currency	(5)	%	(4)	%	Currency	(1)	%	(2)	%
Acquisitions/divestitures	Acquisitions/divestitures	—	%	—	%	Acquisitions/divestitures	(2)	%	(2)	%
Engineering	Engineering	1	%	1	%	Engineering	(2)	%	(2)	%
		12	%	12	%		(3)	%	(2)	%

Sales

Sales ~~increased $873~~decreased $253 million or ~~12%,~~3% for the second quarter of ~~2022~~2023 and ~~increased $1,841~~decreased $271 million or ~~12%~~2% for ~~the~~ six months ended June 30, ~~2022~~2023 versus the respective ~~2021~~2022 periods. ~~Volume growth~~Cost pass-through decreased sales by 4% in ~~all end markets except healthcare~~the quarter and ~~project startups increased~~2% in the year-to-date period, with minimal impact on operating profit. The impact of divestitures, net of acquisitions decreased sales by 2% in the quarter and year-to-date period. Engineering decreased sales by 2% in the quarter and year-to-date period. Currency translation decreased sales by 1% in the quarter, driven by the weakening of the Chinese yuan and Australian dollar, and 2% in the year-to-date period, driven by the weakening of the Euro, Chinese yuan, British pound and Australian dollar against the U.S. dollar. Volumes decreased sales by 1% in the quarter and year-to-date period versus the respective 2022 periods. Higher pricing across all geographic segments contributed 7% to sales in the quarter and ~~6% in the~~ year-to-date period. Currency translation decreased sales by 5% in the quarter and 4% in the year-to-date period, largely in EMEA and APAC, driven by the weakening of the Euro, Australian dollar and British pound against the U.S. dollar. Cost pass-through increased sales by 7% in the quarter and 7% in the year-to-date period with minimal impact on operating profit.

Cost of sales, exclusive of depreciation and amortization

Cost of sales, exclusive of depreciation and amortization ~~increased $746~~decreased $624 million, or ~~18%~~13%, for the second quarter of ~~2022~~2023 and ~~increased $1,490~~decreased $991 million, or ~~18%~~10% for the six months ended June 30, ~~2022~~2023 primarily due to ~~inflation~~currency, lower cost pass-through, the net impact of acquisitions and ~~higher volumes, partially~~divestitures and productivity gains which more than offset ~~by productivity initiatives and currency impacts.~~cost inflation. Cost of sales, exclusive of depreciation and amortization was ~~58.4%~~52.6% and ~~58.4%~~53.3% of sales, respectively, for the second quarter and six months ended June 30, ~~2022~~2023 versus ~~55.3% and 55.6% of sales~~58.4% for the respective ~~2021~~2022 periods. The ~~increase~~decrease as a percentage of sales in the quarter and for the six months ended June 30, ~~2022~~2023 was primarily due ~~primarily~~ to higher pricing and lower cost pass-through.

Selling, general and administrative expenses

Selling, general and administrative expense ("SG&A") ~~decreased $51~~increased $62 million, or 6%8%, for the second quarter of ~~2022~~2023 and ~~decreased $36~~increased $82 million or ~~2%,~~5% for the six months ended June 30, ~~2022.~~2023. SG&A was ~~9.1%~~10.2% of second quarter sales and ~~9.4%~~10.1% of the sales for the six months ended June 30, ~~2022~~2023 versus ~~10.8%~~9.1% and ~~10.9%~~9.4% for the respective ~~2021~~2022 periods. Currency impacts decreased SG&A by approximately ~~$32~~$5 million and ~~$50~~$24 million for the quarter and six months ended June 30, ~~2022, respectively.~~2023. Excluding currency impacts, underlying SG&A ~~decreased~~increased in the second quarter ~~of 2022 driven primarily by lower incentive compensation~~ and ~~increased for~~ the six months ended June 30, ~~2022~~2023 primarily due ~~primarily~~ to higher ~~costs.~~compensation and higher costs related to the acquisition of nexAir.

Depreciation and amortization

Reported depreciation and amortization expense decreased ~~$80~~$131 million, or 7%12%, for the second quarter of ~~2022~~2023 and decreased ~~$134~~$295 million, or 6%13%, for the six months ended June 30, ~~2022.~~2023. The decrease is related primarily to lower depreciation and amortization of intangible assets acquired in the merger and currency impacts.

On an adjusted basis, depreciation and amortization ~~decreased $2~~increased $19 million, for the second quarter of ~~2022~~2023 and increased $4$23 million for the year-to-date period. Currency impacts decreased depreciation and amortization by ~~$29~~$7 million and ~~$45~~$28 million for the quarter and six months ended June 30, ~~2022,~~2023, respectively. Excluding currency, underlying depreciation and amortization increased ~~primarily~~ due to the net impact of acquisitions and new project start ups.

~~Russia-Ukraine conflict and other~~Other charges

~~Russia-Ukraine conflict and other~~Other charges were ~~$993~~$22 million and ~~$989~~$40 million for the second quarter and six months ended June 30, ~~2022,~~2023, respectively, and ~~$204~~$993 million and ~~$196~~$989 million for the respective ~~2021~~2022 periods. The charge for the quarter relates primarily to severance in the Engineering segment. The charge for the six months ended June 30, 2023 includes charges associated with the intercompany reorganization that occurred in the first quarter of 2023. 2022 charges relate primarily to the deconsolidation and impairment of Russian subsidiaries resulting from the ongoing war in Ukraine and related ~~sanctions. 2021 charges relate to cost reduction program and other charges, primarily severance~~sanctions (see Note 2 to the condensed consolidated financial statements).

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

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On an adjusted basis, these benefits and costs have been excluded in both periods.

Operating profit

On a reported basis, operating profit ~~decreased $553~~increased $1,422 million, or ~~48%~~241%, for the second quarter of ~~2022~~2023 and ~~decreased $286~~increased $1,875 million, or ~~12%~~91%, for the six months ended June 30, ~~2022.~~2023. The ~~decrease~~increase was primarily due to Russia-Ukraine conflict and other charges ~~which more than offset growth from~~recorded in the second quarter of 2022 and higher pricing, ~~and~~savings from productivity initiatives, and lower depreciation and amortization driven by merger related intangible ~~assets.~~assets in 2023. These increases more than offset the adverse impacts of cost inflation and currency in the second quarter and year-to-date period of 2023.

On an adjusted basis, which excludes the impacts of merger-related purchase accounting ~~and Russia-Ukraine conflict and~~as well as other charges, operating profit increased ~~$151~~$298 million, or 8%15% in the ~~2022~~second quarter of 2023 and increased ~~$368~~$599 million, or ~~10%,~~15% for the six months ended June 30, ~~2022.~~2023. Operating profit growth was driven by higher pricing and productivity initiatives, which more than offset the effects of cost inflation and currency during the ~~period.~~periods. A discussion of operating profit by segment is included in the segment discussion that follows.

Interest expense - net

Reported interest expense - net ~~decreased $13~~increased $47 million for the second quarter of ~~2022~~2023 and ~~decreased $24~~increased $75 million for the six months ended June 30, ~~2022.~~2023. On an adjusted basis, interest expense ~~decreased $19~~increased $42 million for the second quarter of ~~2022~~2023 and ~~decreased $38~~increased $69 million for the six months ended June 30, ~~2022~~2023 versus the respective ~~2021~~2022 periods. The ~~decrease~~increase in both periods was driven primarily by ~~a lower effective borrowing rate and~~ higher interest ~~income~~rates on ~~cash deposits.~~short-term debt.

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

Reported net pension and OPEB cost (benefit), excluding service cost ~~was a benefit~~were benefits of ~~$62~~$45 million and ~~$126~~$90 million for the quarter and six months ended June 30, ~~2022,~~2023, respectively, versus ~~a benefit of $49~~$62 million and ~~$98~~$126 million for the respective ~~2021~~2022 periods. The ~~increase~~decrease in benefit primarily relates to ~~lower amortization of deferred losses, partially offset by~~ higher interest cost reflective of the higher discount rate environment year-over-year.

Effective tax rate

The reported effective tax rate ("ETR") for the quarter and six months ended June 30, ~~2022~~2023 was 21.9% and 22.0%, respectively, versus 44.3% and 30.0%~~, respectively, versus 28.5% and 24.9%~~ for the respective ~~2021~~2022 periods. The ~~increase~~decrease in the quarter rate is primarily related to a higher tax benefit from share based compensation, a tax refund relating to a prior period and the absence of the net unfavorable tax expense resulting from the Russia deconsolidation ~~and impairment of the company’s business~~ in Russia, driven predominantly by the non-deductibility of the impairment charges partially offset by the reversal of a related deferred tax liability. For the quarter and six months ended June 30, 2021, the ETR included net tax charges of $38 million primarily related to $81 million of expense due to a tax rate increase in the United Kingdom partially offset by a tax settlement benefit of $33 million2022 (see Note 2 to the condensed consolidated financial statements). The decrease in the year to date rate is primarily related to a net decrease in the company's uncertain tax positions, partially offset by additional accruals in several non-U.S. jurisdictions, a tax refund related to a period period and the absence of the net unfavorable tax expense resulting from the Russia deconsolidation in 2022.

On an adjusted basis, the ETR for the quarter and six months ended June 30, ~~2022~~2023 was 23.7% and 23.9%, respectively, versus 24.5% and 24.4%~~, respectively, versus 24.6% and 24.3%~~ for the respective ~~2021~~2022 periods. The decrease in both periods is primarily due to higher tax benefits from share based compensation.

Income from equity investments

Reported income from equity investments for the second quarter of ~~2022~~2023 and six months ended June 30, ~~2022~~2023 was $46 million and $87 million, respectively, versus $50 million and $94 million ~~respectively, versus $37 million and $80 million~~ for the respective ~~2021~~2022 periods.

On an adjusted basis, income from equity investments for the second quarter and six months ended June 30, ~~2022~~2023 was $64 million and $123 million, respectively, versus $69 million and $133 million ~~respectively, versus $56 million and $118 million~~ in the ~~prior year~~ respective 2022 periods. ~~The increase on both basis was primarily driven by the overall performance of investments in APAC.~~

Noncontrolling interests ~~from continuing operations~~

At June 30, ~~2022,~~2023, noncontrolling interests ~~from continuing operations~~ consisted primarily of non-controlling shareholders' investments in APAC (primarily China). Reported noncontrolling interest was flat for the quarter and six months ended June 30, 2023 versus the respective 2022 periods.

Net Income – Linde plc

Reported ~~noncontrolling interests from continuing operations~~net income - Linde plc increased $2$1,203 million, or 323%, for the second quarter of ~~2022~~2023 and ~~was flat~~increased $1,545 million, or 100% for the six months ended June 30, ~~2022,~~2023 versus the respective ~~2021~~2022 periods.

~~Income from continuing operations~~

Reported income from continuing operations decreased $468 million, or 56%, for the second quarter of 2022 and decreased $273 million, or 15%, for the six months ended June 30, 2022 versus the respective 2021 periods, primarily due to lower overall operating profit.

On an adjusted basis, which excludes the impacts of purchase accounting and ~~Russia-Ukraine conflict and~~ other charges, net income ~~from continuing operations~~- Linde plc increased ~~$151~~$194 million, or ~~11%~~12%, for the quarter and increased ~~$339~~$387 million, or ~~12%~~13%, for the six months ended June 30, ~~2022~~2023 versus the respective ~~2021~~2022 periods. ~~The~~

On both a reported and adjusted basis, the increase was driven by higher ~~overall adjusted~~ operating profit.

~~Diluted earnings per share from continuing operations~~

Reported diluted earnings per share from continuing operations decreased $0.86, or 54%, for the second quarter of 2022 and decreased $0.42, or 12%, for the six months ended June 30, 2022 versus the comparable 2021 periods. The decrease was primarily due to lower income from continuing operations, partially offset by lower diluted shares outstanding.

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~~On an adjusted basis,~~Diluted earnings per share

Reported diluted ~~EPS~~earnings per share increased $2.45, or 331%, for the second quarter of ~~2022 increased $0.40, or 15%,~~2023 and increased ~~$0.84,~~$3.21, or ~~16%~~106%, for the six months ended June 30, 2023 versus the comparable 2022 periods.

On an adjusted basis, diluted EPS increased $0.47, or 15%, for the second quarter of 2023 and increased $0.95, or 16% versus the respective ~~2021~~2022 periods.

The increase ~~was~~on both a reported and adjusted basis is primarily due to higher ~~adjusted~~net income ~~from continuing operations~~- Linde plc and lower diluted shares outstanding.

Employees

The number of employees at June 30, ~~2022~~2023 was ~~72,438, an increase~~66,270, a decrease of ~~702~~6,168 employees from June 30, ~~2021,~~2022, driven primarily by the ~~Americas.~~sale of the GIST business, cost reduction initiatives and the deconsolidation of Russian subsidiaries in the EMEA and Engineering segments, partially offset by the acquisition of nexAir.

Other Financial Data

EBITDA was ~~$1,730~~$3,017 million for the second quarter of ~~2022~~2023 as compared to ~~$2,350~~$1,730 million in the respective ~~2021~~2022 period. EBITDA was ~~$4,366~~$5,939 million for the six months ended June 30, ~~2022~~2023 as compared to ~~$4,772~~$4,366 million in the respective ~~2021~~2022 period. The ~~decrease~~increase in both periods was driven by ~~lower~~higher net income ~~from continuing operations plus depreciation and amortization~~- Linde plc versus ~~the~~ prior ~~periods.~~year.

Adjusted EBITDA ~~from continuing operations~~ increased to ~~$2,746~~$3,059 million for the second quarter ~~2022~~2023 from ~~$2,585~~$2,746 million in the respective ~~2021~~2022 period. Adjusted EBITDA ~~from continuing operations increased to $5,409 million from $5,023~~was $6,022 million for the six months ended June 30, ~~2022~~2023 as compared to $5,409 million in the respective ~~2021 period~~2022 period. The higher EBITDA was primarily due to higher ~~adjusted~~net income ~~from continuing operations plus depreciation and amortization~~- Linde plc versus the respective prior period.

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

Other Comprehensive Income (Loss)

Other comprehensive losses for the second quarter ~~of 2022~~ and six months ended June 30, ~~2022~~2023 were ~~$1,545~~$112 million and ~~$1,447~~$142 million, ~~respectively, resulting~~respectively. The loss in the quarter resulted primarily from currency translation adjustments of ~~$1,699 million and $1,651 million~~$95 million. The loss during the ~~quarter~~six months ended June 30, 2023 resulted from $205 million associated with retirement programs and ~~year-to-date periods, respectively.~~$71 million relating to current unrealized loss on derivatives instruments, partially offset by favorable currency translation adjustments of $134 million. The translation adjustments reflect the impact of translating local currency foreign subsidiary financial statements to U.S. dollars, and are largely driven by the movement of the U.S. dollar against major currencies including the Euro, British pound and the Chinese yuan. See the "Currency" section of the MD&A for exchange rates used for translation purposes and Note 11 to the condensed consolidated financial statements for a summary of the currency translation adjustment component of accumulated other comprehensive income (loss) by segment.

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Segment Discussion

The following summary of sales and operating profit by segment provides a basis for the discussion that follows. Linde plc evaluates the performance of its reportable segments based on operating profit, excluding items not indicative of ongoing business trends. The reported amounts are GAAP amounts from the Consolidated Statements of Income.


		Quarter Ended June 30,						Six Months Ended June 30,							Quarter Ended June 30,						Six Months Ended June 30,
(Millions of dollars)	(Millions of dollars)	2022		2021		Variance		2022		2021		Variance		(Millions of dollars)	2023		2022		Variance		2023		2022		Variance
SALES	SALES													SALES
Americas	Americas	$	3,518	$	3,020	16	%	$	6,759	$	5,860	15	%	Americas	$	3,541	$	3,518	1	%	$	7,092	$	6,759	5	%
EMEA	EMEA	2,144		1,875		14	%	4,292		3,674		17	%	EMEA	2,160		2,144		1	%	4,337		4,292		1	%
APAC	APAC	1,651		1,544		7	%	3,253		2,980		9	%	APAC	1,683		1,651		2	%	3,281		3,253		1	%
Engineering	Engineering	644		646		—	%	1,372		1,320		4	%	Engineering	495		644		(23)	%	1,035		1,372		(25)	%
Other	Other	500		499		—	%	992		993		—	%	Other	325		500		(35)	%	652		992		(34)	%
Total sales	Total sales	$	8,457	$	7,584	12	%	$	16,668	$	14,827	12	%	Total sales	$	8,204	$	8,457	(3)	%	$	16,397	$	16,668	(2)	%

SEGMENT OPERATING PROFIT	SEGMENT OPERATING PROFIT													SEGMENT OPERATING PROFIT
Americas	Americas	$	910	$	871	4	%	$	1,814	$	1,666	9	%	Americas	$	1,070	$	910	18	%	$	2,095	$	1,814	15	%
EMEA	EMEA	536		487		10	%	1,039		938		11	%	EMEA	630		536		18	%	1,237		1,039		19	%
APAC	APAC	426		389		10	%	825		740		11	%	APAC	472		426		11	%	895		825		8	%
Engineering	Engineering	105		108		(3)	%	248		217		14	%	Engineering	107		105		2	%	256		248		3	%
Other	Other	11		(18)		161	%	(33)		(36)		8	%	Other	7		11		(36)	%	9		(33)		127	%
Segment operating profit	Segment operating profit	$	1,988	$	1,837	8	%	$	3,893	$	3,525	10	%	Segment operating profit	$	2,286	$	1,988	15	%	$	4,492	$	3,893	15	%
Reconciliation to reported operating profit:	Reconciliation to reported operating profit:													Reconciliation to reported operating profit:
Russia-Ukraine conflict and other charges (Note 2)		(993)		(204)				(989)		(196)
Other charges (Note 2)														Other charges (Note 2)	(22)		(993)				(40)		(989)
Purchase accounting impacts - Linde AG	Purchase accounting impacts - Linde AG	(406)		(491)				(835)		(974)				Purchase accounting impacts - Linde AG	(253)		(406)				(508)		(835)
Total operating profit	Total operating profit	$	589	$	1,142			$	2,069	$	2,355			Total operating profit	$	2,011	$	589			$	3,944	$	2,069

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Americas


		Quarter Ended June 30,								Six Months Ended June 30,									Quarter Ended June 30,								Six Months Ended June 30,
(Millions of dollars)	(Millions of dollars)	2022			2021			Variance		2022			2021			Variance		(Millions of dollars)	2023			2022			Variance		2023			2022			Variance
Sales	Sales	$	3,518		$	3,020		16	%	$	6,759		$	5,860		15	%	Sales	$	3,541		$	3,518		1	%	$	7,092		$	6,759		5	%

Operating profit	Operating profit	$	910		$	871		4	%	$	1,814		$	1,666		9	%	Operating profit	$	1,070		$	910		18	%	$	2,095		$	1,814		15	%
As a percent of sales	As a percent of sales	25.9		%	28.8		%			26.8		%	28.4		%			As a percent of sales	30.2		%	25.9		%			29.5		%	26.8		%


		Quarter Ended June 30, 2022 vs. 2021		Six Months Ended June 30, 2021 vs. 2020			Quarter Ended June 30, 2023 vs. 2022		Six Months Ended June 30, 2023 vs. 2022
		% Change		% Change			% Change		% Change
Factors Contributing to Changes - Sales	Factors Contributing to Changes - Sales					Factors Contributing to Changes - Sales
Volume	Volume	3	%	4	%	Volume	(1)	%	—	%
Price/Mix	Price/Mix	6	%	5	%	Price/Mix	6	%	7	%
Cost pass-through	Cost pass-through	7	%	6	%	Cost pass-through	(7)	%	(5)	%
Currency	Currency	—	%	—	%	Currency	—	%	—	%
Acquisitions/divestitures	Acquisitions/divestitures	—	%	—	%	Acquisitions/divestitures	3	%	3	%

		16	%	15	%		1	%	5	%

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

Sales

Sales for the Americas segment increased ~~$498~~$23 million, or ~~16%~~1%, ~~for~~in the second quarter and increased ~~$899~~$333 million, or ~~15%,~~5% for the six months ended June 30, ~~2022~~2023 versus the respective ~~2021~~2022 periods. Higher pricing contributed 6% to sales in the quarter and 5%7% in the year-to-date period. ~~Higher volumes~~The impact of net acquisitions increased sales by 3% ~~for~~in the second quarter and ~~increased 4% for the~~ six months ended June 30, ~~2022, driven by higher demand across all end markets except healthcare, led by chemicals and energy and manufacturing.~~2023, primarily due to the acquisition of nexAir, LLC (See Note 13 to the condensed consolidated financial statements). Cost pass-through ~~increased~~decreased sales by 7% for the second quarter and ~~increased 6%~~5% for the six months ended June 30, ~~2022~~2023 with minimal impact on operating profit. ~~The impact of currency translation~~Volumes decreased sales by 1% for the second quarter and remained flat for the six months ended June 30, 2023 driven primarily by customer outages in the ~~quarter~~chemicals and ~~year-to-date period was not significant.~~energy end market.

Operating profit

Operating profit in the Americas segment increased ~~$39~~$160 million, or 4%18%, in the second quarter and increased ~~$148~~$281 million, or ~~9%,~~15% for the six months ended June 30, ~~2022~~2023 versus the respective ~~2021~~2022 periods, driven primarily by higher pricing, acquisitions and continued productivity initiatives which more than offset cost inflation during the quarter and year-to-date period. ~~The 2022 second quarter includes a one-time charge that is negatively impacting operating margin by approximately 100 basis points.~~

EMEA


		Quarter Ended June 30,								Six Months Ended June 30,									Quarter Ended June 30,								Six Months Ended June 30,
(Millions of dollars)	(Millions of dollars)	2022			2021			Variance		2022			2021			Variance		(Millions of dollars)	2023			2022			Variance		2023			2022			Variance
Sales	Sales	$	2,144		$	1,875		14	%	$	4,292		$	3,674		17	%	Sales	$	2,160		$	2,144		1	%	$	4,337		$	4,292		1	%

Operating profit	Operating profit	$	536		$	487		10	%	$	1,039		$	938		11	%	Operating profit	$	630		$	536		18	%	$	1,237		$	1,039		19	%
As a percent of sales	As a percent of sales	25.0		%	26.0		%			24.2		%	25.5		%			As a percent of sales	29.2		%	25.0		%			28.5		%	24.2		%

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		Quarter Ended June 30, 2022 vs. 2021		Six Months Ended June 30, 2022 vs. 2021			Quarter Ended June 30, 2023 vs. 2022		Six Months Ended June 30, 2023 vs. 2022
		% Change		% Change			% Change		% Change
Factors Contributing to Changes - Sales	Factors Contributing to Changes - Sales					Factors Contributing to Changes - Sales
Volume	Volume	(1)	%	(1)	%	Volume	(4)	%	(4)	%
Price/Mix	Price/Mix	12	%	11	%	Price/Mix	11	%	12	%
Cost pass-through	Cost pass-through	14	%	15	%	Cost pass-through	(3)	%	(1)	%
Currency	Currency	(11)	%	(8)	%	Currency	—	%	(3)	%
Acquisitions/divestitures	Acquisitions/divestitures	—	%	—	%	Acquisitions/divestitures	(3)	%	(3)	%

		14	%	17	%		1	%	1	%

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

Sales

EMEA segment sales increased by ~~$269~~$16 million, or ~~14%~~1%, in the second quarter and increased ~~$618~~$45 million ~~or 17%,~~ for the six months ended June 30, ~~2022~~2023 as compared to the respective ~~2021~~2022 periods. ~~Cost pass-through contributed 14% to~~Higher price attainment increased sales by 11% in the quarter and ~~15%~~12% in the year-to-date period. Volumes decreased sales by 4% in the quarter and year-to-date period led by the manufacturing and chemicals and energy end markets. Cost pass-through decreased sales by 3% in the quarter and 1% in the year-to-date period, with minimal impact on operating ~~profit, while higher price attainment increased~~profit. The impact of currency translation on sales ~~by 12%~~was flat in the quarter and ~~11% in the year-to-date period. Volumes decreased 1% in both quarter and year to date period. Currency translation decreased sales by 11% in the quarter and 8%~~3% in the year-to-date period, due largely to the weakening of the Euro and British pound against the U.S. Dollar.

~~Linde has deconsolidated its Russian gas business as~~ The impact of ~~June 30, 2022 which contributed $70 million and $128 million to~~net divestitures decreased sales by 3% in the ~~second~~ quarter and ~~six months ended June 30, 2022, respectively (see Note 2~~year-to-date period, primarily due to the ~~condensed consolidated financial statements). Sales~~deconsolidation of the Russian subsidiaries in ~~Ukraine are immaterial.~~June 2022.

Operating Profit

Operating profit for the EMEA segment increased by ~~$49~~$94 million, or ~~10%~~18%, in the second quarter and increased ~~$101~~by $198 million, or ~~11%,~~19% for the six months ended June 30, ~~2022~~2023, as compared to the respective ~~2021 periods,~~2022 periods. The increase in operating profit in the quarter and year-to-date period was driven ~~largely~~primarily by higher pricing and continued productivity initiatives, ~~which more than~~partially offset by cost inflation, ~~during the quarter~~lower volumes and ~~year-to-date period.~~

divestitures.

APAC


		Quarter Ended June 30,								Six Months Ended June 30,									Quarter Ended June 30,								Six Months Ended June 30,
(Millions of dollars)	(Millions of dollars)	2022			2021			Variance		2022			2021			Variance		(Millions of dollars)	2023			2022			Variance		2023			2022			Variance
Sales	Sales	$	1,651		$	1,544		7	%	$	3,253		$	2,980		9	%	Sales	$	1,683		$	1,651		2	%	$	3,281		$	3,253		1	%

Operating profit	Operating profit	$	426		$	389		10	%	$	825		$	740		11	%	Operating profit	$	472		$	426		11	%	$	895		$	825		8	%
As a percent of sales	As a percent of sales	25.8		%	25.2		%			25.4		%	24.8		%			As a percent of sales	28.0		%	25.8		%			27.3		%	25.4		%


		Quarter Ended June 30, 2022 vs. 2021		Six Months Ended June 30,			Quarter Ended June 30, 2023 vs. 2022		Six Months Ended June 30, 2023 vs. 2022
		% Change		% Change			% Change		% Change
Factors Contributing to Changes - Sales	Factors Contributing to Changes - Sales					Factors Contributing to Changes - Sales
Volume/Equipment	Volume/Equipment	3	%	5	%	Volume/Equipment	3	%	2	%
Price/Mix	Price/Mix	5	%	4	%	Price/Mix	5	%	5	%
Cost pass-through	Cost pass-through	4	%	4	%	Cost pass-through	(1)	%	(1)	%
Currency	Currency	(5)	%	(4)	%	Currency	(5)	%	(5)	%
Acquisitions/divestitures	Acquisitions/divestitures	—	%	—	%	Acquisitions/divestitures	—	%	—	%

		7	%	9	%		2	%	1	%

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.

Table of Contents

Sales

Sales for the APAC segment increased ~~$107~~$32 million, or 7%2%, ~~for~~in the second quarter and increased ~~$273~~$28 million, or ~~9%,~~1% for the six months ended June 30, ~~2022~~2023 versus the respective ~~2021~~2022 periods. Higher pricing contributed 5% to sales in the quarter and year-to-date period. Volumes increased 3% in the quarter and 5%2% in the year-to-date period ~~driven by~~including project start-ups in the electronics and chemicals and energy end markets. Higher pricing contributed 5% to sales in the quarter and 4% to sales in the year-to-date period. Cost pass-through contributed 4% to sales in the quarter and year-to-date period with minimal impact on operating profit. Currency translation decreased sales by 5% in quarter and ~~4% in the~~ year-to-date period, driven primarily by the weakening of the Australian dollar, ~~Korean won~~Indian rupee and Chinese ~~Yuan~~yuan against the U.S. ~~Dollar.~~dollar. Cost pass-through decreased sales by 1% in the quarter and year-to-date period.

Operating profit

Operating profit in the APAC segment increased ~~$37~~$46 million, or ~~10%~~11%, in the second quarter and increased ~~$85~~$70 million, , or ~~11%, for~~8% in the six months ended June 30, ~~2022~~2023 versus the respective ~~2021~~2022 periods, driven by higher pricing, volumes ~~and pricing~~ and continued productivity initiatives which more than offset the impact of currency and cost inflation during the quarter and year-to-date period.

Engineering


		Quarter Ended June 30,								Six Months Ended June 30,									Quarter Ended June 30,								Six Months Ended June 30,
(Millions of dollars)	(Millions of dollars)	2022			2021			Variance		2022			2021			Variance		(Millions of dollars)	2023			2022			Variance		2023			2022			Variance
Sales	Sales	$	644		$	646		—	%	$	1,372		$	1,320		4	%	Sales	$	495		$	644		(23)	%	$	1,035		$	1,372		(25)	%

Operating profit	Operating profit	$	105		$	108		(3)	%	$	248		$	217		14	%	Operating profit	$	107		$	105		2	%	$	256		$	248		3	%
As a percent of sales	As a percent of sales	16.3		%	16.7		%			18.1		%	16.4		%			As a percent of sales	21.6		%	16.3		%			24.7		%	18.1		%


		Quarter Ended June 30, 2022 vs. 2021		Six Months Ended June 30, 2022 vs. 2021			Quarter Ended June 30, 2023 vs. 2022		Six Months Ended June 30, 2023 vs. 2022
		% Change		% Change			% Change		% Change
Factors Contributing to Changes - Sales	Factors Contributing to Changes - Sales					Factors Contributing to Changes - Sales
Volume		10	%	11	%

Currency	Currency	(10)	%	(7)	%	Currency	2	%	(2)	%

Other						Other	(25)	%	(23)	%
							(23)	%	(25)	%
		—	%	4	%

Sales

Engineering segment sales decreased $2$149 million in the second quarter and ~~increased $52~~decreased $337 million ~~or 4%,~~ in the six months ended June 30, ~~2022~~2023 as compared to the respective ~~2021~~2022 periods. The decrease in both periods were driven primarily by project ~~timing, offset by currency impacts which decreased sales by 10% in the quarter and 7% in the year-to-date period.~~timing.

Projects for Russia that ~~are currently~~were sanctioned ~~represent approximately $300~~and have been wound down represented $26 million and ~~$650~~$87 million of the Engineering segment sales during the second quarter and six months ended June 30, ~~2022.~~2023, respectively, and $300 million and $650 million during the respective 2022 periods.

Operating profit

Engineering segment operating profit ~~decreased, $3~~increased, $2 million ~~or 3%,~~ in the second quarter and increased ~~$31~~$8 million ~~or 14%, for~~in the six months ended June 30, ~~2022~~2023 as compared to the respective ~~2021 periods driven primarily~~2022 periods. The decline from lower sales was more than offset by ~~project timing.~~higher margin on wind down of projects subject to sanctions in Russia in both the quarter and year-to-date period.

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Other


		Quarter Ended June 30,								Six Months Ended June 30,									Quarter Ended June 30,								Six Months Ended June 30,
(Millions of dollars)	(Millions of dollars)	2022			2021			Variance		2022			2021			Variance		(Millions of dollars)	2023			2022			Variance		2023			2022			Variance
Sales	Sales	$	500		$	499		—	%	$	992		$	993		—	%	Sales	$	325		$	500		(35)	%	$	652		$	992		(34)	%

Operating profit (loss)	Operating profit (loss)	$	11		$	(18)		161	%	$	(33)		$	(36)		8	%	Operating profit (loss)	$	7		$	11		(36)	%	$	9		$	(33)		127	%
As a percent of sales	As a percent of sales	2.2		%	(3.6)		%			(3.3)		%	(3.6)		%			As a percent of sales	2.2		%	2.2		%			1.4		%	(3.3)		%

Quarter Ended June 30, 2022 vs. 2021 Six Months Ended June 30, 2022 vs. 2021
% Change % Change
Factors Contributing to Changes - Sales
Volume/price 6 % 3 %
Cost pass-through — % 1 %
Currency (6) % (4) %
Acquisitions/divestitures — % — %
— % — %


	Quarter Ended June 30, 2023 vs. 2022		Six Months Ended June 30, 2023 vs. 2022
	% Change		% Change
Factors Contributing to Changes - Sales
Volume/price	4	%	5	%

Currency	—	%	—	%
Acquisitions/divestitures	(39)	%	(39)	%

	(35)	%	(34)	%

Other consists of corporate costs and a few smaller businesses ~~including:~~including Surface Technologies ~~GIST~~ and global helium ~~wholesale;~~wholesale, which individually do not meet the quantitative thresholds for separate presentation.

Sales

Sales for Other ~~increased $1~~decreased $175 million for the second quarter and decreased $1$340 million for the six months ended June 30, ~~2022~~2023 versus the respective ~~2021~~2022 periods. ~~Currency translation~~The impact of net divestitures decreased sales by 6%39% in the quarter and ~~decreased 4%~~year-to-date period versus the respective 2022 periods, primarily due to sale of GIST business in ~~the year-to-date period.~~third quarter of 2022. Underlying sales increased 6%4% in the quarter and ~~3% for~~5% in the year-to-date period, driven primarily by ~~higher aviation and electronic sales~~price in the coatings ~~business. Cost pass-through increased sales by 1%~~and global helium businesses. Currency translation impacts were flat in the quarter and year-to-date period.

Operating profit

Operating profit in Other ~~increased $29~~decreased $4 million, or ~~161%~~36% in the second quarter and increased $3$42 million, or ~~8%,~~127% in the six months ended June 30, ~~2022~~2023 versus the respective ~~2021 periods, due primarily to~~2022 periods. The decrease in the quarter was driven by divestitures, partially offset by higher pricing. In the year-to-date period, higher pricing and lower corporate costs inmore than offset the ~~quarter which were largely offset by higher sourcing costs in the global helium business in the year-to-date period.~~impact of divestitures.

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Currency

The results of Linde's non-U.S. operations are translated to the company’s reporting currency, the U.S. dollar, from the functional currencies. For most 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 YTD 2022 Consolidated Sales		Exchange Rate for Income Statement		Exchange Rate for Balance Sheet			Percentage of YTD 2023 Consolidated Sales		Exchange Rate for Income Statement		Exchange Rate for Balance Sheet
				Year-To-Date Average		June 30,	December 31,				Year-To-Date Average		June 30,	December 31,
Currency	Currency			2022	2021	2022	2021	Currency			2023	2022	2023	2022
Euro	Euro	22	%	0.91	0.83	0.95	0.88	Euro	19	%	0.93	0.91	0.92	0.93
Chinese yuan	Chinese yuan	8	%	6.47	6.47	6.70	6.36	Chinese yuan	8	%	6.93	6.47	7.25	6.90
British pound	British pound	7	%	0.77	0.72	0.82	0.74	British pound	5	%	0.81	0.77	0.79	0.83
Australian dollar	Australian dollar	4	%	1.39	1.30	1.45	1.38	Australian dollar	4	%	1.48	1.39	1.50	1.47
Brazilian real	Brazilian real	4	%	5.06	5.38	5.26	5.58	Brazilian real	4	%	5.07	5.06	4.79	5.28
Canadian dollar	Canadian dollar	3	%	1.27	1.25	1.29	1.26	Canadian dollar	3	%	1.35	1.27	1.32	1.36
Korean won	Korean won	3	%	1,231	1,117	1,299	1,189	Korean won	3	%	1,295	1,231	1,318	1,266
Mexican peso	Mexican peso	2	%	20.26	20.18	20.12	20.53	Mexican peso	3	%	18.15	20.26	17.12	19.50
Indian rupee	Indian rupee	2	%	76.17	73.32	78.98	74.34	Indian rupee	2	%	82.21	76.17	82.04	82.73
South African rand	South African rand	2	%	15.39	14.53	16.28	15.94	South African rand	1	%	18.19	15.39	18.85	17.04
Swedish krona	Swedish krona	1	%	9.58	8.41	10.22	9.05	Swedish krona	1	%	10.49	9.58	10.80	10.43
Thailand bhat	Thailand bhat	1	%	33.69	30.80	35.30	33.40	Thailand bhat	1	%	34.19	33.69	35.45	34.61

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Liquidity, Capital Resources and Other Financial Data

The following selected cash flow information provides a basis for the discussion that follows:


(Millions of dollars)	(Millions of dollars)	Six months ended June 30,				(Millions of dollars)	Six months ended June 30,
		2022		2021			2023		2022
NET CASH PROVIDED BY (USED FOR):	NET CASH PROVIDED BY (USED FOR):					NET CASH PROVIDED BY (USED FOR):
OPERATING ACTIVITIES	OPERATING ACTIVITIES					OPERATING ACTIVITIES
Net income (including noncontrolling interests)	Net income (including noncontrolling interests)	$	1,620	$	1,893	Net income (including noncontrolling interests)	$	3,164	$	1,620
Non-cash charges (credits):	Non-cash charges (credits):					Non-cash charges (credits):
Add: Depreciation and amortization	Add: Depreciation and amortization	2,203		2,337		Add: Depreciation and amortization	1,908		2,203
Add: Deferred income taxes	Add: Deferred income taxes	(221)		(78)		Add: Deferred income taxes	(61)		(221)
Add: Share-based compensation	Add: Share-based compensation	51		63		Add: Share-based compensation	66		51
Add: Russia-Ukraine conflict and other charges, net of payments (a)		922		95
Add: Other charges, net of payments (a)						Add: Other charges, net of payments (a)	(61)		922
Net income adjusted for non-cash charges	Net income adjusted for non-cash charges	4,575		4,310		Net income adjusted for non-cash charges	5,016		4,575
Less: Working capital	Less: Working capital	(497)		(360)		Less: Working capital	(640)		(497)

Less: Pension contributions	Less: Pension contributions	(19)		(28)		Less: Pension contributions	(25)		(19)
Other	Other	74		14		Other	(293)		74
Net cash provided by operating activities		$	4,133	$	3,936
Net cash provided by (used for) operating activities						Net cash provided by (used for) operating activities	$	4,058	$	4,133
INVESTING ACTIVITIES	INVESTING ACTIVITIES					INVESTING ACTIVITIES
Capital expenditures	Capital expenditures	(1,475)		(1,506)		Capital expenditures	(1,688)		(1,475)
Acquisitions, net of cash acquired	Acquisitions, net of cash acquired	(49)		(31)		Acquisitions, net of cash acquired	(834)		(49)
Divestitures and asset sales		17		77
Divestitures, net of cash divested and asset sales						Divestitures, net of cash divested and asset sales	24		17
Net cash provided by (used for) investing activities	Net cash provided by (used for) investing activities	$	(1,507)	$	(1,460)	Net cash provided by (used for) investing activities	$	(2,498)	$	(1,507)
FINANCING ACTIVITIES	FINANCING ACTIVITIES					FINANCING ACTIVITIES
Debt increase (decrease) - net	Debt increase (decrease) - net	2,760		314		Debt increase (decrease) - net	(642)		2,760
Issuances (purchases) of common stock - net	Issuances (purchases) of common stock - net	(3,307)		(2,050)		Issuances (purchases) of common stock - net	(1,746)		(3,307)
Cash dividends - Linde plc shareholders	Cash dividends - Linde plc shareholders	(1,177)		(1,102)		Cash dividends - Linde plc shareholders	(1,246)		(1,177)
Noncontrolling interest transactions and other	Noncontrolling interest transactions and other	(35)		(277)		Noncontrolling interest transactions and other	(22)		(35)
Net cash provided by (used for) financing activities	Net cash provided by (used for) financing activities	$	(1,759)	$	(3,115)	Net cash provided by (used for) financing activities	$	(3,656)	$	(1,759)

Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	$	(35)	$	22	Effect of exchange rate changes on cash and cash equivalents	$	17	$	(35)
Cash and cash equivalents, end-of-period	Cash and cash equivalents, end-of-period	$	3,655	$	3,137	Cash and cash equivalents, end-of-period	$	3,357	$	3,655

(a) See Note 2 to the condensed consolidated financial statements.

Cash Flow from Operations

Cash provided by operations of ~~$4,133~~$4,058 million for the six months ended June 30, ~~2022 increased $197~~2023 decreased $75 million, or 5%2%, versus ~~2021.~~2022. The ~~increase~~decrease was driven primarily by higher ~~net income adjusted for non-cash charges, partially offset by higher~~ working capital ~~requirements. Russia-Ukraine conflict~~requirements, including lower inflows from contract liabilities from engineering customer advanced payments and ~~other~~higher cash tax payments. Other charges were ~~$989~~$40 million and ~~$196~~$989 million, ~~respectively,~~ for the six months ended June 30, 2023 and 2022, respectively. 2022 charges related primarily to the deconsolidation and ~~2021.~~impairment of Russian subsidiaries resulting from the ongoing war in Ukraine and related sanctions. Related cash outflows were ~~$67~~$101 million and ~~$101~~$67 million for the ~~same respective periods.~~six months ended June 30, 2023 and 2022, respectively.

Linde estimates that total ~~2022~~2023 required contributions to its pension plans will be in the range of approximately $40 million to ~~$50~~$50 million, of which ~~$19~~$25 million has been made through June 30, ~~2022.~~

2023.

As of June 30, ~~2022,~~2023, Linde has approximately ~~$1.9~~$1.7 billion recorded in contract liabilities within the condensed consolidated balance sheet related to engineering projects in Russia. Any obligation to satisfy the related residual contract liabilities may have an adverse effect on Linde’s cash flows.

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Investing

Net cash used for investing of ~~$1,507~~$2,498 million for the six months ended June 30, ~~2022~~2023 increased ~~$47~~$991 million versus ~~2021, as~~2022, due to higher ~~acquisition spend~~acquisitions, net of cash acquired and ~~lower proceeds from asset disposals and divestitures were largely offset by lower~~higher capital expenditures.

Capital expenditures for the six months ended June 30, ~~2022~~2023 were ~~$1,475~~$1,688 million, ~~$31~~$213 million ~~lower~~higher than the prior ~~year.~~year due primarily to investments in new plant and production equipment for operating and growth requirements.

At June 30, ~~2022,~~2023, Linde's sale of gas backlog of large projects under construction was approximately ~~$3.6~~$4.4 billion. This represents the total estimated capital cost of large plants under construction.

Acquisitions, net of cash acquired for the six months ended June 30, 2023 and 2022 ~~and 2021~~ were ~~$49~~$834 million and ~~$31~~$49 million, respectively, and related primarily to ~~acquisitions~~the acquisition of nexAir in ~~EMEA.~~ the Americas (see Note 13 to the condensed consolidated financial statements).

Divestitures, net of cash divested and asset sales for the six months ended June 30, 2023 and 2022 ~~and 2021~~ were ~~$17~~$24 million and ~~$77~~$17 million, respectively.

Financing

Cash used byfor financing activities was $3,656 million for the six months ended June 30, 2023 as compared to $1,759 million for the six months ended June 30, ~~2022 as compared to cash~~2022. Cash used for ~~financing activities of $3,115~~debt was $642 million ~~for the six months ended June 30, 2021. Cash~~in 2023 versus cash provided by debt ~~was~~of $2,760 million ~~versus $314 million~~ in ~~2021~~2022, driven primarily by ~~higher~~lower commercial paper borrowings and lower net debt issuances in ~~2022.~~2023. In ~~January 2022,~~February 2023, Linde repaid ~~€1.0 billion~~$500 million of ~~0.250%~~2.70% notes that became due. In ~~March 2022,~~April 2023, Linde repaid €650 million of 2.00% notes and £300 million of 5.875% notes that became due. In June 2023, Linde issued €500 million of ~~1.000%~~3.625% notes due ~~2027,~~in 2025, €750 million of ~~1.375% notes due 2031, and €800 million of 1.625% notes due 2035. In May 2022, Linde repaid $500 million of 2.20%~~3.375% notes due in ~~August 2022.~~2029 and €650 million of 3.625% notes due in 2034.

Net purchases of ordinary shares were $1,746 million in 2023 versus $3,307 million in ~~2022 versus $2,050 million in 2021.~~2022. On February 28, 2022, the company’s Board of Directors approved the additional repurchase of $10.0 billion of its ordinary shares. For additional information related to the share repurchase programs, see Part II Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Cash dividends of ~~$1,177~~$1,246 million increased ~~$75~~$69 million from ~~2021~~2022 driven primarily by a ~~10%~~9% increase in quarterly dividends per share from ~~$1.06~~$1.17 per share to ~~$1.17~~$1.275 per share, partially offset by lower shares outstanding. Cash used for Noncontrolling interest transactions and other was ~~$35~~$22 million for the six months ended June 30, ~~2022~~2023 versus cash used of ~~$277~~$35 million for the respective ~~2021 period due to the settlement of the buyout of minority interests in the Republic of South Africa in January of 2021.~~2022 period.

The company continues to believe it has sufficient operating flexibility, cash, and funding sources to meet its business needs around the world. The company had ~~$3.7~~$3.4 billion of cash as of June 30, ~~2022,~~2023, and has a $5 billion and a $1.5 billion unsecured and undrawn revolving credit agreement with no associated financial covenants. No borrowings were outstanding under the credit ~~agreement~~agreements as of June 30, ~~2022.~~2023. The company does not anticipate any limitations on its ability to access the debt capital markets and/or other external funding sources and remains committed to its strong ratings from Moody’s and Standard & Poor’s.

Legal Proceedings

See Note 9 to the condensed consolidated financial statements.

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NON-GAAP MEASURES AND RECONCILIATIONS

(Millions of dollars, except per share data)

(UNAUDITED)

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 operating performance and liquidity. Items which the company does not believe to be indicative of on-going business trends 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.

Quarter Ended June 30, Six Months Ended June 30,
2022 2021 2022 2021
Adjusted Operating Profit and Operating Margin
Reported operating profit $ 589 $ 1,142 $ 2,069 $ 2,355
Add: Russia-Ukraine conflict and other charges 993 204 989 196
Add: Purchase accounting impacts - Linde AG (c) 406 491 835 974
Total adjustments 1,399 695 1,824 1,170
Adjusted operating profit $ 1,988 $ 1,837 $ 3,893 $ 3,525
Reported percentage change (48) % 93 % (12) % 78 %
Adjusted percentage change 8 % 39 % 10 % 32 %
Reported sales $ 8,457 $ 7,584 $ 16,668 $ 14,827
Reported operating margin 7.0 % 15.1 % 12.4 % 15.9 %
Adjusted operating margin 23.5 % 24.2 % 23.4 % 23.8 %
Adjusted Depreciation and amortization
Reported depreciation and amortization $ 1,091 $ 1,171 $ 2,203 $ 2,337
Less: Purchase accounting impacts - Linde AG (c) (401) (479) (819) (957)
Adjusted depreciation and amortization $ 690 $ 692 $ 1,384 $ 1,380
Adjusted Other Income (Expense) - net
Reported Other Income (Expense) - net $ (36) $ (17) $ (24) $ (13)
Less: Purchase accounting impacts - Linde AG (c) (5) (12) (16) (17)
Adjusted Other Income (Expense) - net $ (31) $ (5) $ (8) $ 4
Adjusted Net Pension and OPEB Cost (Benefit), Excluding Service Cost
Reported net pension and OPEB cost (benefit), excluding service cost $ (62) $ (49) $ (126) $ (98)
Add: Pension settlement charges — — — —
Adjusted Net Pension and OPEB cost (benefit), excluding service costs $ (62) $ (49) $ (126) $ (98)
Adjusted Interest Expense - Net
Reported interest expense - net $ 5 $ 18 $ 14 $ 38
Add: Purchase accounting impacts - Linde AG (c) 9 15 19 33
Adjusted interest expense - net $ 14 $ 33 $ 33 $ 71

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Adjusted Income Taxes (a)
Reported income taxes $ 286 $ 334 $ 655 $ 602
Add: Purchase accounting impacts - Linde AG (c) 108 116 216 234
Add: Pension settlement charges — — — —
Add: Russia-Ukraine conflict and other charges 104 6 101 26
Total adjustments 212 122 317 260
Adjusted income taxes $ 498 $ 456 $ 972 $ 862
Adjusted Effective Tax Rate (a)
Reported income before income taxes and equity investments $ 646 $ 1,173 $ 2,181 $ 2,415
Add: Pension settlement charge — — — —
Add: Purchase accounting impacts - Linde AG (c) 397 476 816 941
Add: Russia-Ukraine conflict and other charges 993 204 989 196
Total adjustments 1,390 680 1,805 1,137
Adjusted income before income taxes and equity investments $ 2,036 $ 1,853 $ 3,986 $ 3,552
Reported Income taxes $ 286 $ 334 $ 655 $ 602
Reported effective tax rate 44.3 % 28.5 % 30.0 % 24.9 %
Adjusted income taxes $ 498 $ 456 $ 972 $ 862
Adjusted effective tax rate 24.5 % 24.6 % 24.4 % 24.3 %
Income from Equity Investments
Reported income from equity investments $ 50 $ 37 $ 94 $ 80
Add: Purchase accounting impacts - Linde AG (c) — — — —
Add: Russia-Ukraine conflict and other charges (e) 19 19 39 38
Adjusted income from equity investments $ 69 $ 56 $ 133 $ 118
Adjusted Noncontrolling Interests from Continuing Operations
Reported noncontrolling interests from continuing operations $ (38) $ (36) $ (74) $ (74)
Add: Purchase accounting impacts - Linde AG (c) (3) (2) (7) (7)
Adjusted noncontrolling interests from continuing operations $ (41) $ (38) $ (81) $ (81)
Adjusted Income from Continuing Operations (b)
Reported income from continuing operations $ 372 $ 840 $ 1,546 $ 1,819
Add: Pension settlement charge — — — —
Add: Russia-Ukraine conflict and other charges 889 198 888 170
Add: Purchase accounting impacts - Linde AG (c) 305 377 632 738
Total adjustments 1,194 575 1,520 908
Adjusted income from continuing operations $ 1,566 $ 1,415 $ 3,066 $ 2,727


	Quarter Ended June 30,			Six Months Ended June 30,
	2023			2022			2023			2022




Adjusted Operating Profit and Operating Margin
Reported operating profit	$	2,011		$	589		$	3,944		$	2,069
Add: Other charges	22			993			40			989

Add: Purchase accounting impacts - Linde AG (c)	253			406			508			835
Total adjustments	275			1,399			548			1,824
Adjusted operating profit	$	2,286		$	1,988		$	4,492		$	3,893

Reported percentage change	241		%	(48)		%	91		%	(12)		%
Adjusted percentage change	15		%	8		%	15		%	10		%

Reported sales	$	8,204		$	8,457		$	16,397		$	16,668

Reported operating margin	24.5		%	7.0		%	24.1		%	12.4		%
Adjusted operating margin	27.9		%	23.5		%	27.4		%	23.4		%

Adjusted Depreciation and amortization
Reported depreciation and amortization	$	960		$	1,091		$	1,908		$	2,203
Less: Purchase accounting impacts - Linde AG (c)	(251)			(401)			(501)			(819)
Adjusted depreciation and amortization	$	709		$	690		$	1,407		$	1,384

Adjusted Other Income (Expense) - net
Reported Other Income (Expense) - net	$	(27)		$	(36)		$	(32)		$	(24)
Less: Purchase accounting impacts - Linde AG (c)	(2)			(5)			(7)			(16)
Adjusted Other Income (Expense) - net	$	(25)		$	(31)		$	(25)		$	(8)






Adjusted Interest Expense - Net
Reported interest expense - net	$	52		$	5		$	89		$	14
Add: Purchase accounting impacts - Linde AG (c)	4			9			13			19
Adjusted interest expense - net	$	56		$	14		$	102		$	33

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Adjusted Diluted EPS from Continuing Operations (b)
Reported diluted EPS from continuing operations $ 0.74 $ 1.60 $ 3.04 $ 3.46
Add: Pension settlement charge — — — —
Add: Russia-Ukraine conflict and other charges 1.76 0.38 1.75 0.32
Add: Purchase accounting impacts - Linde AG (c) 0.60 0.72 1.24 1.41
Total adjustments 2.36 1.10 2.99 1.73
Adjusted diluted EPS from continuing operations $ 3.10 $ 2.70 $ 6.03 $ 5.19
Reported percentage change (54) % 84 % (12) % 79 %
Adjusted percentage change 15 % 42 % 16 % 37 %
Adjusted EBITDA and % of Sales
Income from continuing operations $ 372 $ 840 $ 1,546 $ 1,819
Add: Noncontrolling interests related to continuing operations 38 36 74 74
Add: Net pension and OPEB cost (benefit), excluding service cost (62) (49) (126) (98)
Add: Interest expense 5 18 14 38
Add: Income taxes 286 334 655 602
Add: Depreciation and amortization 1,091 1,171 2,203 2,337
EBITDA from continuing operations $ 1,730 $ 2,350 $ 4,366 $ 4,772
Add: Russia-Ukraine conflict and other charges 993 204 989 196
Add: Purchase accounting impacts - Linde AG (c) 23 31 54 55
Total adjustments 1,016 235 1,043 251
Adjusted EBITDA from continuing operations $ 2,746 $ 2,585 $ 5,409 $ 5,023
Reported sales $ 8,457 $ 7,584 $ 16,668 $ 14,827
% of sales
EBITDA from continuing operations 20.5 % 31.0 % 26.2 % 32.2 %
Adjusted EBITDA from continuing operations 32.5 % 34.1 % 32.5 % 33.9 %


Adjusted Income Taxes (a)
Reported income taxes	$	438		$	286		$	868		$	655
Add: Purchase accounting impacts - Linde AG (c)	67			108			124			216

Add: Other charges	34			104			79			101
Total adjustments	101			212			203			317
Adjusted income taxes	$	539		$	498		$	1,071		$	972

Adjusted Effective Tax Rate (a)
Reported income before income taxes and equity investments	$	2,004		$	646		$	3,945		$	2,181

Add: Purchase accounting impacts - Linde AG (c)	249			397			495			816
Add: Other charges	22			993			40			989
Total adjustments	271			1,390			535			1,805
Adjusted income before income taxes and equity investments	$	2,275		$	2,036		$	4,480		$	3,986

Reported Income taxes	$	438		$	286		$	868		$	655
Reported effective tax rate	21.9		%	44.3		%	22.0		%	30.0		%

Adjusted income taxes	$	539		$	498		$	1,071		$	972
Adjusted effective tax rate	23.7		%	24.5		%	23.9		%	24.4		%

Income from Equity Investments
Reported income from equity investments	$	46		$	50		$	87		$	94
Add: Purchase accounting impacts - Linde AG (c)	18			19			36			39
Adjusted income from equity investments	$	64		$	69		$	123		$	133

Adjusted Noncontrolling Interests
Reported noncontrolling interests	$	(37)		$	(38)		$	(73)		$	(74)
Add: Purchase accounting impacts - Linde AG (c)	(3)			(3)			(6)			(7)
Adjusted noncontrolling interests	$	(40)		$	(41)		$	(79)		$	(81)

Adjusted Net Income - Linde plc (b)
Reported net income - Linde plc	$	1,575		$	372		$	3,091		$	1,546

Add: Other charges	(12)			889			(39)			888
Add: Purchase accounting impacts - Linde AG (c)	197			305			401			632
Total adjustments	185			1,194			362			1,520
Adjusted net income - Linde plc	$	1,760		$	1,566		$	3,453		$	3,066

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Adjusted Diluted EPS (b)
Reported diluted EPS	$	3.19		$	0.74		$	6.25		$	3.04

Add: Other charges	(0.02)			1.76			(0.08)			1.75
Add: Purchase accounting impacts - Linde AG (c)	0.40			0.60			0.81			1.24
Total adjustments	0.38			2.36			0.73			2.99
Adjusted diluted EPS	$	3.57		$	3.10		$	6.98		$	6.03

Reported percentage change	331		%	(54)		%	106		%	(12)		%
Adjusted percentage change	15		%	15		%	16		%	16		%

Adjusted EBITDA and % of Sales
Net Income - Linde plc	$	1,575		$	372		$	3,091		$	1,546
Add: Noncontrolling interests	37			38			73			74
Add: Net pension and OPEB cost (benefit), excluding service cost	(45)			(62)			(90)			(126)
Add: Interest expense	52			5			89			14
Add: Income taxes	438			286			868			655
Add: Depreciation and amortization	960			1,091			1,908			2,203
EBITDA	$	3,017		$	1,730		$	5,939		$	4,366
Add: Other charges	22			993			40			989
Add: Purchase accounting impacts - Linde AG (c)	20			23			43			54
Total adjustments	42			1,016			83			1,043
Adjusted EBITDA	$	3,059		$	2,746		$	6,022		$	5,409

Reported sales	$	8,204		$	8,457		$	16,397		$	16,668
% of sales
EBITDA	36.8		%	20.5		%	36.2		%	26.2		%
Adjusted EBITDA	37.3		%	32.5		%	36.7		%	32.5		%

(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 Adjusted 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 purchase 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 from Continuing Operations:~~Interests: Represents the noncontrolling interests’ ownership portion of the adjustments described above determined on an entity by entity basis.

~~(e) Impairment charge related to a joint venture in the APAC segment.~~

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Net Debt and Adjusted Net Debt

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


		June 30, 2022		December 31, 2021			June 30, 2023		December 31, 2022
(Millions of dollars)	(Millions of dollars)					(Millions of dollars)
Debt	Debt	$	16,043	$	14,207	Debt	$	17,490	$	17,914
Less: cash and cash equivalents	Less: cash and cash equivalents	(3,655)		(2,823)		Less: cash and cash equivalents	(3,357)		(5,436)
Net debt	Net debt	12,388		11,384		Net debt	14,133		12,478
Less: purchase accounting impacts - Linde AG	Less: purchase accounting impacts - Linde AG	(38)		(61)		Less: purchase accounting impacts - Linde AG	(10)		(22)
Adjusted net debt	Adjusted net debt	$	12,350	$	11,323	Adjusted net debt	$	14,123	$	12,456

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Supplemental Guarantee Information

On ~~June 6, 2020,~~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) guarantees of the 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 ~~of the pre-business combination~~pre-existing Linde Inc. and Linde Finance notes, and Linde GmbH and Linde Inc., respectively, provided upstream guarantees of Linde plc’s downstream guarantees.

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

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

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

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(Millions of dollars)	(Millions of dollars)					(Millions of dollars)
Statement of Income Data	Statement of Income Data	Six Months Ended June 30, 2022		Twelve Months Ended December 31, 2021		Statement of Income Data	Six Months Ended June 30, 2023		Twelve Months Ended December 31, 2022
Sales	Sales	$	4,373	$	7,767	Sales	$	4,026	$	8,850
Operating profit	Operating profit	300		973		Operating profit	775		1,337
Net income	Net income	75		721		Net income	300		675
Transactions with non-guarantor subsidiaries	Transactions with non-guarantor subsidiaries	721		2,067		Transactions with non-guarantor subsidiaries	1,208		2,241

Balance Sheet Data (at period end)	Balance Sheet Data (at period end)					Balance Sheet Data (at period end)
Current assets (a)	Current assets (a)	$	7,607	$	5,826	Current assets (a)	$	4,896	$	11,478
Long-term assets (b)	Long-term assets (b)	13,849		15,928		Long-term assets (b)	13,264		13,949
Current liabilities (c)	Current liabilities (c)	10,846		8,853		Current liabilities (c)	9,647		11,767
Long-term liabilities (d)	Long-term liabilities (d)	43,887		42,860		Long-term liabilities (d)	50,170		48,210

(a) From current assets above, amount due from non-guarantor subsidiaries	(a) From current assets above, amount due from non-guarantor subsidiaries	$	4,974	$	4,209	(a) From current assets above, amount due from non-guarantor subsidiaries	$	3,034	$	7,260
(b) From long-term assets above, amount due from non-guarantor subsidiaries	(b) From long-term assets above, amount due from non-guarantor subsidiaries	1,872		3,257		(b) From long-term assets above, amount due from non-guarantor subsidiaries	495		1,982
(c) From current liabilities above, amount due to non-guarantor subsidiaries	(c) From current liabilities above, amount due to non-guarantor subsidiaries	1,498		1,304		(c) From current liabilities above, amount due to non-guarantor subsidiaries	1,363		1,334
(d) From long-term liabilities above, amount due to non-guarantor subsidiaries	(d) From long-term liabilities above, amount due to non-guarantor subsidiaries	29,453		28,142		(d) From long-term liabilities above, amount due to non-guarantor subsidiaries	34,087		33,268

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Refer to Item 7A. to Part II of Linde's ~~2021~~2022 Annual Report on Form 10-K for discussion.

Item 4. Controls and Procedures

(a)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 the end of the quarterly period covered by this report, such disclosure controls and procedures are effective in ensuring that information required to be disclosed by Linde in reports that it files 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.

(b)There were no changes in Linde's internal control over financial reporting that occurred during the quarterly period covered by this report that have materially affected, or are reasonably likely to materially affect, Linde's internal control over financial reporting.

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PART II - OTHER INFORMATION

Linde plc and Subsidiaries

Item 1. Legal Proceedings

See Note 9 to the condensed consolidated financial statements for a description of current legal proceedings.

Item 1A. Risk Factors

Through the quarterly period covered by this report, there have been no material changes to the risk factors disclosed in Item 1A to Part I of Linde's Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Purchases of Equity Securities- Certain information regarding purchases made by or on behalf of the company or any affiliated purchaser (as defined in Rule 10b-18(a)(3) under the Securities Exchange Act of 1934, as amended) of its ordinary shares during the quarter ended June 30, ~~2022~~2023 is provided below:

Period
Total Number
of Shares
Purchased
(Thousands)
Average
Price Paid
Per Share
Total Numbers of Shares
Purchased as Part of
Publicly Announced
Program (1,2)
(Thousands)
Approximate Dollar
Value of Shares that
May Yet be Purchased
Under the Program (1)
(Millions)
April 2022 1,535 $ 316.40 1,535 $ 8,257
May 2022 2,196 $ 310.10 2,196 $ 7,576
June 2022 1,323 $ 305.97 1,323 $ 7,171
Second Quarter 2022 5,054 $ 310.93 5,054 $ 7,171


Period	Total Number of Shares Purchased (Thousands)	Average Price Paid Per Share		Total Numbers of Shares Purchased as Part of Publicly Announced Program (1,2) (Thousands)	Approximate Dollar Value of Shares that May Yet be Purchased Under the Program (1) (Millions)
April 2023	830	$	361.66	830	$	4,179
May 2023	997	$	361.52	997	$	3,818
June 2023	682	$	368.70	682	$	3,567
Second Quarter 2023	2,509	$	363.52	2,509	$	3,567

(1) On February 28, 2022, the company's board of directors approved the repurchase of $10.0 billion of its ordinary shares ("2022 program") which could take place from time to time on the open market (and could include the use of 10b5-1 trading plans), subject to market and business conditions. The 2022 program has a maximum repurchase amount of 15% of outstanding shares, began on March 1, 2022 and expires on July 31, 2024.

As of June 30, ~~2022,~~2023, the company repurchased ~~$2.8~~$6.4 billion of its ordinary shares pursuant to the 2022 program. As of June 30, ~~2022, $7.2~~2023, $3.6 billion of share repurchases remain authorized under the 2022 program.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

On June 15, 2023, Sean Durbin, Executive Vice President, EMEA, adopted a written plan for certain transactions in the Ordinary Shares of Linde plc that is intended to satisfy the affirmative defense conditions of SEC Rule 10b5–1(c) (the “Plan”). The Plan will terminate on May 31, 2024, or earlier if, among other things, all the Ordinary Share transactions have been completed before such date. Under the Plan, Ordinary Shares may be sold if specified minimum market limit sale prices are achieved as follows: (1) 1,810 Ordinary Shares if such shares are acquired pursuant to the vesting and payout of previously granted restricted stock units, (2) 4,200 Ordinary Shares if such shares are acquired pursuant to the vesting and payout of previously granted performance share units, assuming a payout at the target number of units granted (the actual payout, if any, may be more or less than the 4,200 share target payout); and (3) 4,000 Ordinary Shares upon the exercise of a previously granted stock option.

~~None.~~

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Item 6. Exhibits

(a)

Exhibits

4.1

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 Linde plc’s Current Report on Form 8-K dated June 12, 2033, File No. 001-38730, and is incorporated by reference)

4.2

Form of Indenture for Debt Securities between Linde plc, as issuer, and The Bank of New York Mellon Trust Company, N.A., as trustee ,including form of debt securities and related guarantees (filed as Exhibit 4.2 to Linde plc’s Registration Statement on Form S-3 dated May 3, 2023, and is incorporated by reference)

4.3

Form of Indenture for Debt Securities between Linde Inc., as issuer, and The Bank of New York Mellon Trust Company, N.A., as trustee ,including form of debt securities and related guarantees, (filed as Exhibit 4.3 to Linde plc’s Registration Statement on Form S-3 dated May 3, 2023, and is incorporated by reference)

4.4

Form of Indenture for Debt Securities between Linde Finance B.V., as issuer, and The Bank of New York Mellon Trust Company, N.A., as trustee, including form of debt securities and related guarantees, (filed as Exhibit 4.4 to Linde plc’s Registration Statement on Form S-3 dated May 3, 2023, and is incorporated by reference)

31.01

Rule 13a-14(a) Certification

31.02

Rule 13a-14(a) Certification

32.01

Section 1350 Certification (such certifications are furnished for the information of the Commission and shall not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act).

32.02

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.

101.SCH

XBRL Taxonomy Extension Schema

101.CAL

XBRL Taxonomy Extension Calculation Linkbase

101.LAB

XBRL Taxonomy Extension Label Linkbase

101.PRE

XBRL Taxonomy Extension Presentation Linkbase

101.DEF

XBRL Taxonomy Extension Definition Linkbase

*Indicates a management contract or compensatory plan or arrangement.

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SIGNATURE

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: July ~~28, 2022~~27, 2023						By: /s/ Kelcey E. Hoyt

						Kelcey E. Hoyt
						Chief Accounting Officer

4849



Note 1. Summary of Significant Accounting Policies			11

Note 2. ~~Russia-Ukraine Conflict and~~ Other Charges			11

Note 3. Supplemental Information			13

Note 4. Debt			14

Note 5. Financial Instruments			14

Note 6. Fair Value Disclosures			16

Note 7. Earnings Per Share – Linde plc Shareholders			17

Note 8. Retirement Programs			18

Note 9. Commitments and Contingencies			18

Note 10. Segments			1920

Note 11. Equity			2120

Note 12. Revenue Recognition			2223

Note 13. ~~Subsequent Events~~Business Acquisition			25


	Quarter Ended June 30, 2022
(millions of dollars)	Russia deconsolidation charges		Other Russia related charges		Total Russia charges		Merger-related and other charges		Total
Americas	$	—	$	—	$	—	$	3	$	3
EMEA	733		2		735		49		784
APAC	—		—		—		28		28
Engineering	54		112		166		0		166
Other	0		—		—		12		12
Total	$	787	$	114	$	901	$	92	$	993


(Millions of dollars)	Quarter Ended June 30, 2021
Sales	Americas		EMEA		APAC		Engineering		Other		Total		%

Merchant	$	821	$	556	$	551	$	—	$	43	$	1,971	26	%
On-Site	774		396		582		—		—		1,752		23	%
Packaged Gas	1,369		912		392		—		6		2,679		35	%
Other	56		11		19		646		450		1,182		16	%
Total	$	3,020	$	1,875	$	1,544	$	646	$	499	$	7,584	100	%


Adjusted Diluted EPS from Continuing Operations (b)
Reported diluted EPS from continuing operations	$	0.74		$	1.60		$	3.04		$	3.46
Add: Pension settlement charge	—			—			—			—
Add: Russia-Ukraine conflict and other charges	1.76			0.38			1.75			0.32

Add: Purchase accounting impacts - Linde AG (c)	0.60			0.72			1.24			1.41
Total adjustments	2.36			1.10			2.99			1.73
Adjusted diluted EPS from continuing operations	$	3.10		$	2.70		$	6.03		$	5.19

Reported percentage change	(54)		%	84		%	(12)		%	79		%
Adjusted percentage change	15		%	42		%	16		%	37		%

Adjusted EBITDA and % of Sales
Income from continuing operations	$	372		$	840		$	1,546		$	1,819
Add: Noncontrolling interests related to continuing operations	38			36			74			74
Add: Net pension and OPEB cost (benefit), excluding service cost	(62)			(49)			(126)			(98)
Add: Interest expense	5			18			14			38
Add: Income taxes	286			334			655			602
Add: Depreciation and amortization	1,091			1,171			2,203			2,337
EBITDA from continuing operations	$	1,730		$	2,350		$	4,366		$	4,772
Add: Russia-Ukraine conflict and other charges	993			204			989			196
Add: Purchase accounting impacts - Linde AG (c)	23			31			54			55
Total adjustments	1,016			235			1,043			251
Adjusted EBITDA from continuing operations	$	2,746		$	2,585		$	5,409		$	5,023

Reported sales	$	8,457		$	7,584		$	16,668		$	14,827
% of sales
EBITDA from continuing operations	20.5		%	31.0		%	26.2		%	32.2		%
Adjusted EBITDA from continuing operations	32.5		%	34.1		%	32.5		%	33.9		%