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

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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 exclusive of certain items such as Cost reduction program and other charges, 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, 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."

Consolidated Results

The following table provides summary information for the quarters and six months ended June 30, 2025 and 2024. The reported amounts are GAAP amounts from the Consolidated Statement 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,
(Millions of dollars, except per share data)20252024Variance20252024Variance
Sales$8,495$8,2673%$16,607$16,3671%
Cost of sales, exclusive of depreciation and amortization$4,306$4,2511%$8,463$8,467—%
As a percent of sales50.7%51.4%51.0%51.7%
Selling, general and administrative$870$8404%$1,656$1,700(3)%
As a percent of sales10.2%10.2%10.0%10.4%
Depreciation and amortization$942$958(2)%$1,852$1,907(3)%
Cost reduction program and other charges$—$—NA$55$—NA
Other income (expense) - net$15$2650%$33$6045%
Operating profit$2,354$2,1848%$4,538$4,2796%
Operating margin27.7%26.4%27.3%26.1%
Interest expense - net$67$70(4)%$127$135(6)%
Net pension and OPEB cost (benefit), excluding service cost$(59)$(49)20%$(115)$(99)16%
Effective tax rate24.4%23.5%24.0%22.9%
Income from equity investments$33$45(27)%$71$93(24)%
Noncontrolling interests$(40)$(37)8%$(74)$(75)(1)%
Net Income – Linde plc$1,766$1,6636%$3,439$3,2905%
Diluted earnings per share$3.73$3.448%$7.24$6.797%
Diluted shares outstanding473,573483,177(2)%474,691484,366(2)%
Number of employees64,84265,987(2)%64,84265,987(2)%
Adjusted Amounts (a)
Operating profit$2,556$2,4226%$4,994$4,7635%
Operating margin30.1%29.3%30.1%29.1%
Effective tax rate24.3%23.5%23.9%23.1%
Net Income – Linde plc$1,937$1,8594%$3,817$3,6804%
Diluted earnings per share$4.09$3.856%$8.04$7.606%
Other Financial Data (a)
EBITDA$3,329$3,1874%$6,461$6,2793%
As percent of sales39.2%38.6%38.9%38.4%
Adjusted EBITDA$3,351$3,2065%$6,564$6,3224%
As percent of sales39.4%38.8%39.5%38.6%

(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.

Reported

In the second quarter of 2025, Linde's sales were $8,495 million, 3% above the prior year. Sales grew 2% from higher price attainment. Cost pass-through, representing the contractual billing of energy cost variances primarily to onsite customers, increased sales by 1% in the quarter, with minimal impact on operating profit. Acquisitions increased sales by 1% in the second quarter. Engineering sales and currency translation were flat in the quarter. Volumes decreased sales by 1% in the quarter versus the 2024 respective period, as base volume declines were partially offset by new project start-ups.

Reported operating profit for the second quarter of 2025 was $2,354 million, or 27.7% of sales, 8% above the prior year. The reported year-over-year increase was primarily driven by higher pricing and productivity initiatives, which more than offset adverse impacts from cost inflation and lower volumes. The reported effective tax rate ("ETR") was 24.4% in the second

quarter 2025 versus 23.5% in the second quarter 2024. Diluted earnings per share ("EPS") was $3.73, or 8% above EPS of $3.44 in the second quarter of 2024, primarily due to higher net income - Linde plc and lower diluted shares outstanding.

Adjusted

In the second quarter of 2025, adjusted operating profit of $2,556 million, or 30.1% of sales, was 6% higher as compared to 2024, driven by higher pricing and productivity initiatives partially offset by cost inflation and lower volumes. The adjusted ETR was 24.3% in the second quarter 2025 versus 23.5% in the respective 2024 quarter. On an adjusted basis, EPS was $4.09, 6% above the 2024 adjusted EPS of $3.85, driven by higher adjusted net income - 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.

Results of operations

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

Quarter Ended June 30, 2025 vs. 2024Six months ended June 30, 2025 vs. 2024
% Change% Change
Factors Contributing to Changes - Sales
Volume(1)%(1)%
Price/Mix2%2%
Cost pass-through1%1%
Currency—%(1)%
Acquisitions/divestitures1%—%
Engineering—%—%
3%1%

Sales

Sales increased 3% for the second quarter of 2025 and increased 1% for the six months ended June 30, 2025 versus the respective 2024 periods. Higher price attainment increased 2% in the quarter and six months ended June 30, 2025. Acquisitions increased sales by 1% in the quarter and were flat for the six months ended June 30, 2025. Cost pass-through increased sales by 1% in both the quarter and six months ended June 30, 2025, with minimal impact on operating profit. Volumes decreased sales by 1% in the quarter and six months ended June 30, 2025, as base volume declines were partially offset by new project start-ups. Currency translation was flat in the quarter and decreased sales by 1% for the six months ended June 30, 2025, primarily driven by the weakening of Brazilian real and Mexican peso partially offset by the strengthening of the Euro against the U.S. dollar year to date. Engineering sales were flat in the quarter and six months ended June 30, 2025.

Cost of sales, exclusive of depreciation and amortization

Cost of sales, exclusive of depreciation and amortization, increased $55 million, or 1%, for the second quarter of 2025, primarily due to cost inflation partially offset by lower volumes and productivity gains and decreased $4 million, for the six months ended June 30, 2025. Cost of sales, exclusive of depreciation and amortization was 50.7% and 51.0% of sales for the second quarter and six months ended June 30, 2025, respectively, versus 51.4% and 51.7% for the respective 2024 periods. The decrease as a percentage of sales in the quarter and year to date was primarily due to higher pricing and productivity gains.

Selling, general and administrative expenses

Selling, general and administrative expense ("SG&A") increased $30 million, or 4%, for the second quarter of 2025 and decreased $44 million, or 3%, for the six months ended June 30, 2025. SG&A was 10.2% of second quarter sales and 10.0% of sales for the six months ended June 30, 2025 versus 10.2% and 10.4% of sales for the respective 2024 periods. Currency impacts decreased SG&A approximately $15 million for the six months ended June 30, 2025. SG&A increased during the

second quarter of 2025 due to higher costs and decreased for the six months ended June 30, 2025, excluding foreign currency impacts, due to lower costs, savings from cost reduction programs, and productivity initiatives.

Depreciation and amortization

Reported depreciation and amortization expense decreased $16 million, or 2%, for the second quarter of 2025 and decreased $55 million, or 3%, in the six months ended June 30, 2025, primarily due to lower depreciation and amortization of assets acquired in the merger, partially offset by the net impact of new project start-ups.

On an adjusted basis, depreciation and amortization increased $23 million, or 3%, for the second quarter of 2025 and increased $33 million, or 2%, for the six months ended June 30, 2025. Currency impacts decreased depreciation and amortization by $12 million for the six months ended June 30, 2025. Excluding currency, for the quarter and year-to-date periods, the underlying depreciation and amortization increase was driven largely by new project start-ups.

Cost reduction program and other charges

There were no cost reduction program and other charges for the second quarter of 2025. For the six months ended June 30, 2025, cost reduction program and other charges of $55 million primarily related to severance charges. On an adjusted basis, these costs have been excluded. There were no charges during the respective 2024 periods.

Other income (expense) - net

Reported other income (expense) - net was a benefit of $15 million for the second quarter of 2025 and $33 million for the year-to-date period. 2024 other income (expense) for the year-to-date period included a benefit of $43 million in insurance recoveries primarily within the Other segment.

Operating profit

On a reported basis, operating profit increased $170 million, or 8%, for the second quarter of 2025 and increased $259 million, or 6%, for the six months ended June 30, 2025. The increase in the quarter was primarily due to higher pricing and savings from productivity initiatives, which more than offset the adverse impacts of cost inflation and lower volumes.

On an adjusted basis, which excludes the impacts of merger-related purchase accounting as well as cost reduction programs and other charges, operating profit increased $134 million, or 6%, in the second quarter of 2025 and increased $231 million, or 5%, for the six months ended June 30, 2025. Operating profit growth was driven by higher pricing and productivity initiatives, which more than offset the effects of cost inflation and lower volumes during the quarter and year-to-date periods of 2025. A discussion of operating profit by segment is included in the segment discussion that follows.

Interest expense - net

Reported interest expense - net decreased $3 million, or 4%, for the second quarter of 2025 and decreased $8 million, or 6%, for the six months ended June 30, 2025.

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

Reported net pension and OPEB cost (benefit), excluding service cost, was a benefit of $59 million and $115 million for the quarter and six months ended June 30, 2025, respectively, versus $49 million and $99 million for the respective 2024 periods. The increase in the benefit primarily relates to lower interest cost due to lower benefit obligations and higher amortization of deferred gains year-over-year, partially offset by lower expected return on plan assets.

Effective tax rate

The reported effective tax rate ("ETR") for the quarter and six months ended June 30, 2025 was 24.4% and 24.0%, respectively, versus 23.5% and 22.9% for the respective 2024 periods. On an adjusted basis, the ETR for the quarter and six months ended June 30, 2025 was 24.3% and 23.9%, respectively, versus 23.5% and 23.1% for the respective 2024 periods.

On both a reported and adjusted basis, the increase in the quarter rate is primarily due to 2024 tax benefits from a repatriation. The increase in the year-to-date rate is primarily due to 2024 tax benefits from a repatriation and lower tax benefits from share-based compensation in 2025.

Income from equity investments

Reported income from equity investments for the second quarter and six months ended June 30, 2025 was $33 million and $71 million, respectively, versus $45 million and $93 million for the respective 2024 periods.

On an adjusted basis, income from equity investments for the second quarter and six months ended June 30, 2025 was $51 million and $107 million, respectively, versus $63 million and $129 million for the respective 2024 periods.

Noncontrolling interests

At June 30, 2025, noncontrolling interests consisted primarily of non-controlling shareholders' investments in APAC (primarily China). Reported noncontrolling interests income was $40 million and $74 million for the second quarter of 2025 and six months ended June 30, 2025, respectively. Noncontrolling interest was $37 million and $75 million for the respective 2024 periods.

Net Income – Linde plc

Reported net income - Linde plc increased $103 million, or 6%, for the second quarter of 2025 and increased $149 million, or 5%, for the six months ended June 30, 2025 versus the respective 2024 period.

On an adjusted basis, which excludes the impacts of merger-related purchase accounting and cost reduction program and other charges, net income - Linde plc increased $78 million, or 4%, for the second quarter of 2025 and increased $137 million, or 4%, for the six months ended June 30, 2025 versus the respective 2024 period.

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

Diluted earnings per share

Reported diluted earnings per share increased $0.29, or 8%, for the second quarter of 2025 versus the respective 2024 period. Reported diluted earnings per share increased $0.45, or 7%, for the six months ended June 30, 2025 versus the respective 2024 period.

On an adjusted basis, diluted EPS increased $0.24, or 6%, for the second quarter versus the respective 2024 period. On an adjusted basis, diluted EPS increased $0.44, or 6%, for the six months ended June 30, 2025, versus the respective 2024 period.

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

Employees

The number of employees at June 30, 2025 was 64,842, a decrease of 1,145 employees from June 30, 2024, primarily due to the ongoing impact of cost reduction programs.

Other Financial Data

EBITDA was $3,329 million for the second quarter of 2025 as compared to $3,187 million in the respective 2024 period. EBITDA was $6,461 million for the six months ended June 30, 2025 as compared to $6,279 million in the respective 2024 period.

Adjusted EBITDA increased to $3,351 million for the second quarter 2025 from $3,206 million in the respective 2024 period. Adjusted EBITDA increased to $6,564 million for the six months ended June 30, 2025 from $6,322 million in the respective 2024 period. The increase on both a reported and adjusted basis was driven by higher net income - Linde plc versus prior year.

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 income for the second quarter and six months ended June 30, 2025 was $541 million and $672 million, respectively. The income in the quarter and year-to-date periods resulted primarily from currency translation adjustments of $499 million and $633 million, respectively. 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 10 to the condensed consolidated financial statements for a summary of the currency translation adjustment component of accumulated other comprehensive income (loss) by segment.

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 Statement of Income.

Quarter Ended June 30,Six Months Ended June 30,
(Millions of dollars)20252024Variance20252024Variance
SALES
Americas$3,812$3,6554%$7,478$7,2154%
EMEA2,1622,0913%4,1934,182—%
APAC1,6551,657—%3,1943,248(2)%
Engineering5515441%1,1161,0833%
Other315320(2)%626639(2)%
Total sales$8,495$8,2673%$16,607$16,3671%
SEGMENT OPERATING PROFIT
Americas$1,209$1,1594%$2,346$2,2474%
EMEA78070411%1,5021,3918%
APAC4904743%9419212%
Engineering9096(6)%2041964%
Other(13)(11)(18)%18(88)%
Segment operating profit$2,556$2,4226%$4,994$4,7635%
Reconciliation to reported operating profit:
Cost reduction program and other charges——(55)—
Purchase accounting impacts - Linde AG (a)(202)(238)(401)(484)
Total operating profit$2,354$2,184$4,538$4,279

(a)To adjust for purchase accounting impacts related to the merger.

Americas

Quarter Ended June 30,Six Months Ended June 30,
(Millions of dollars)20252024Variance20252024Variance
Sales$3,812$3,6554%$7,478$7,2154%
Operating profit$1,209$1,1594%$2,346$2,2474%
As a percent of sales31.7%31.7%31.4%31.1%
Quarter Ended June 30, 2025 vs. 2024Six Months Ended June 30, 2025 vs. 2024
% Change% Change
Factors Contributing to Changes - Sales
Volume1%1%
Price/Mix3%3%
Cost pass-through1%2%
Currency(2)%(3)%
Acquisitions/divestitures1%1%
4%4%

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 $157 million, or 4%, in the second quarter and increased $263 million, or 4%, for the six months ended June 30, 2025 versus the respective 2024 periods. Higher pricing contributed 3% to sales in both the quarter and year-to-date periods. Cost pass-through increased sales by 1% in the second quarter and increased sales by 2% year to date, with minimal impact on operating profit. Acquisitions increased sales by 1% in both the quarter and year-to-date periods. Volumes increased sales by 1% in both the quarter and year-to-date periods, primarily driven by chemicals & energy end markets including project start-ups. Currency translation decreased sales by 2% in the second quarter and decreased sales by 3% year to date, driven primarily by the weakening of the Brazilian real and Mexican peso against the U.S. dollar.

Operating profit

Operating profit in the Americas segment increased $50 million, or 4%, in the second quarter and increased $99 million, or 4%, for the six months ended June 30, 2025 versus the respective 2024 period, driven primarily by higher pricing and continued productivity initiatives, which more than offset cost inflation and currency translation.

EMEA

Quarter Ended June 30,Six Months Ended June 30,
(Millions of dollars)20252024Variance20252024Variance
Sales$2,162$2,0913%$4,193$4,182—%
Operating profit$780$70411%$1,502$1,3918%
As a percent of sales36.1%33.7%35.8%33.3%
Quarter Ended June 30, 2025 vs. 2024Six Months Ended June 30, 2025 vs. 2024
% Change% Change
Factors Contributing to Changes - Sales
Volume(4)%(3)%
Price/Mix3%2%
Cost pass-through—%—%
Currency4%1%
Acquisitions/divestitures—%—%
3%—%

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

Sales

EMEA segment sales increased $71 million, or 3%, in the second quarter and were flat for the six months ended June 30, 2025 compared to the respective 2024 periods. Higher price attainment increased sales by 3% in the quarter and increased 2% year to date. Currency translation increased sales by 4% in the second quarter and increased sales by 1% year to date, driven primarily by the strengthening of the Euro and British pound against the U.S. dollar. Volumes decreased sales by 4% in the quarter and 3% in the year-to-date period, primarily driven by the metals & mining and manufacturing end markets. Cost pass-through was flat in both the quarter and year-to-date periods with minimal impact on operating profit.

Operating Profit

Operating profit for the EMEA segment increased by $76 million, or 11%, in the second quarter and increased $111 million, or 8%, for the six months ended June 30, 2025 compared to the respective 2024 periods. The increase in the second quarter and year to date was driven primarily by higher pricing, currency translation, and continued productivity initiatives, partially offset by cost inflation and lower volumes.

APAC

Quarter Ended June 30,Six Months Ended June 30,
(Millions of dollars)20252024Variance20252024Variance
Sales$1,655$1,657—%$3,194$3,248(2)%
Operating profit$490$4743%$941$9212%
As a percent of sales29.6%28.6%29.5%28.4%
Quarter Ended June 30, 2025 vs. 2024Six Months Ended June 30, 2025 vs. 2024
% Change% Change
Factors Contributing to Changes - Sales
Volume/Equipment(1)%(1)%
Price/Mix—%—%
Cost pass-through(1)%(1)%
Currency—%(1)%
Acquisitions/divestitures2%1%
—%(2)%

The APAC segment includes Linde's industrial gases operations in approximately 15 Asian and South Pacific countries and regions including China, Australia, India, and South Korea.

Sales

Sales for the APAC segment were flat in the second quarter and decreased $54 million, or 2%, for the six months ended June 30, 2025 versus the respective 2024 periods. Acquisitions increased sales by 2% in the quarter and increased 1% in the year-to-

date period. Price was flat in the quarter and year-to-date periods. Volumes decreased sales by 1% in the quarter and year-to-date periods as base volume declines primarily in the manufacturing end market were partially offset by new project start-ups. Currency translation was flat in the quarter and decreased sales by 1% year to date, primarily due to the weakening of the Korean won and Australian dollar against the U.S. dollar. Cost pass-through decreased sales by 1% in both the second quarter and year-to-date periods with minimal impact on operating profit.

Operating profit

Operating profit in the APAC segment increased $16 million, or 3%, in the second quarter and increased $20 million, or 2%, for the six months ended June 30, 2025, driven primarily by productivity initiatives, which more than offset cost inflation and lower volumes.

Engineering

Quarter Ended June 30,Six Months Ended June 30,
(Millions of dollars)20252024Variance20252024Variance
Sales$551$5441%$1,116$1,0833%
Operating profit$90$96(6)%$204$1964%
As a percent of sales16.3%17.6%18.3%18.1%
Quarter Ended June 30, 2025 vs. 2024Six Months Ended June 30, 2025 vs. 2024
% Change% Change
Factors Contributing to Changes - Sales
Currency3%—%
Other(2)%3%
1%3%

Sales

Engineering segment sales increased $7 million, or 1%, in the second quarter and increased $33 million, or 3%, for the six months ended June 30, 2025, as compared to the respective 2024 periods. The increase in the quarter was primarily driven by currency translation, which increased sales by 3% in the quarter due to the strengthening of the Euro against the U.S. dollar and was flat year to date. The increase in the year-to-date period was primarily driven by project timing.

Operating profit

Engineering segment operating profit decreased $6 million, or 6%, in the second quarter and increased $8 million, or 4%, for the six months ended June 30, 2025 as compared to the respective 2024 periods primarily driven by project timing.

Other

Quarter Ended June 30,Six Months Ended June 30,
(Millions of dollars)20252024Variance20252024Variance
Sales$315$320(2)%$626$639(2)%
Operating profit (loss)$(13)$(11)(18)%$1$8(88)%
As a percent of sales(4.1)%(3.4)%0.2%1.3%
Quarter Ended June 30, 2025 vs. 2024Six Months Ended June 30, 2025 vs. 2024
% Change% Change
Factors Contributing to Changes - Sales
Volume/price(3)%(2)%
Cost pass-through—%—%
Currency1%—%
Acquisitions/divestitures—%—%
(2)%(2)%

Other consists of corporate costs and a few smaller businesses including Linde Advanced Material Technologies (LAMT) and global helium wholesale, which individually do not meet the quantitative thresholds for separate presentation.

Sales

Sales for Other decreased $5 million, or 2%, for the second quarter and decreased $13 million, or 2% for the six months ended June 30, 2025, versus the respective 2024 periods. Underlying sales decreased by 3% in the quarter and decreased 2% in the year-to-date period primarily due to lower volumes in LAMT. Currency translation increased sales by 1% in the quarter and was flat year to date.

Operating profit

Operating profit in Other decreased $2 million in the second quarter and decreased $7 million for the six months ended June 30, 2025 versus the respective 2024 periods. The decrease in the year to date period was driven by higher costs due to helium and an insurance recovery in 2024, partially offset by lower corporate costs and continued productivity initiatives.

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 periods.

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 2025 Consolidated SalesExchange Rate for Income StatementExchange Rate for Balance Sheet
Year-To-Date AverageJune 30,December 31,
Currency2025202420252024
Euro17%0.910.930.850.97
Chinese yuan7%7.257.227.167.30
British pound5%0.770.790.730.80
Brazilian real4%5.765.085.436.18
Australian dollar4%1.581.521.521.62
Mexican peso3%19.9417.1018.7520.83
Korean won3%1,4251,3501,3541,472
Canadian dollar3%1.411.361.361.44
Indian rupee2%86.0983.2385.7585.61
Swedish krona1%10.1410.549.4611.07
South African rand1%18.3918.7317.7118.84
Swiss franc1%0.860.890.790.91

Liquidity, Capital Resources and Other Financial Data

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

(Millions of dollars)Six Months Ended June 30,
20252024
NET CASH PROVIDED BY (USED FOR):
OPERATING ACTIVITIES
Net income (including noncontrolling interests)$3,513$3,365
Non-cash charges (credits):
Add: Depreciation and amortization1,8521,907
Add: Deferred income taxes(13)(184)
Add: Share-based compensation8878
Add: Cost reduction program and other charges, net of payments(14)(75)
Net income adjusted for non-cash charges5,4265,091
Less: Working capital(947)(1,089)
Less: Pension contributions(15)(24)
Other(92)(95)
Net cash provided by (used for) operating activities$4,372$3,883
INVESTING ACTIVITIES
Capital expenditures(2,527)(2,181)
Acquisitions, net of cash acquired(270)(152)
Divestitures, net of cash divested and asset sales2422
Other investing, net(53)—
Net cash provided by (used for) investing activities$(2,826)$(2,311)
FINANCING ACTIVITIES
Debt increase (decrease) - net1,8392,535
Issuances (purchases) of common stock - net(2,207)(2,460)
Cash dividends - Linde plc shareholders(1,412)(1,334)
Noncontrolling interest transactions and other26(217)
Net cash provided by (used for) financing activities$(1,754)$(1,476)
Effect of exchange rate changes on cash and cash equivalents$144$(134)
Cash and cash equivalents, end-of-period$4,786$4,626

Cash Flow from Operations

Cash provided by operations of $4,372 million for the six months ended June 30, 2025 increased $489 million, or 13%, versus 2024. The increase was driven primarily by higher net income adjusted for non-cash charges and lower net working capital requirements.

Linde estimates that total 2025 required contributions to its pension plans will be in the range of approximately $25 million to $35 million, of which $15 million has been made through June 30, 2025.

Investing

Net cash used for investing activities of $2,826 million for the six months ended June 30, 2025 increased $515 million, or 22% versus 2024, due to higher capital expenditures and acquisition spend, net of cash acquired.

Capital expenditures for the six months ended June 30, 2025 were $2,527 million, $346 million higher than the prior year primarily due to investments in new plant and production equipment for backlog growth requirements.

At June 30, 2025, Linde's sale of gas backlog of large projects under construction was approximately $7.1 billion. This represents the total estimated capital cost of large plants under construction.

Acquisitions, net of cash acquired, were $270 million for the six months ended June 30, 2025, and relate primarily to businesses in the Americas and APAC.

Divestitures, net of cash divested and asset sales for the six months ended June 30, 2025 were $24 million. 2024 divestitures, net of cash divested and asset sales were $22 million.

Other investing, net for the six months ended June 30, 2025 was outflows of $53 million and relate to the cash settlement of foreign exchange contracts designated in a net investment hedging relationship.

Financing

Cash used for financing activities was $1,754 million for the six months ended June 30, 2025 as compared to $1,476 million for the six months ended June 30, 2024. Cash provided by debt was $1,839 million in 2025 versus $2,535 million in 2024, driven primarily by higher commercial paper issuances partially offset by lower net debt issuances in 2025. For the six months ended June 30, 2025, Linde issued €2,250 million Euro-denominated notes and CHF500 million Swiss-franc denominated notes and redeemed or repaid $1,000 million U.S. dollar-denominated notes and €500 million Euro denominated notes.

Net purchases of ordinary shares were $2,207 million in 2025 versus $2,460 million in 2024. 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 $1,412 million increased $78 million from 2024 driven primarily by an 8% increase in quarterly dividends per share from $1.39 per share to $1.50 per share, partially offset by lower shares outstanding. Cash provided by Noncontrolling interest transactions and other was $26 million for the six months ended June 30, 2025 versus cash used of $217 million for the respective 2024 period. Higher cash inflows from financing related derivatives more than offset outflows for withholding taxes related to share-based compensation arrangements.

The company continues to believe it has sufficient operating flexibility, cash, and funding sources to maintain adequate amounts of liquidity to meet its business needs around the world. The company maintains 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 agreements as of June 30, 2025. 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 8 to the condensed consolidated financial statements.

NON-GAAP MEASURES AND RECONCILIATIONS

(Millions of dollars, except per share data)

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,
2025202420252024
Adjusted Operating Profit and Operating Margin
Reported operating profit$2,354$2,184$4,538$4,279
Add: Cost reduction program and other charges——55—
Add: Purchase accounting impacts - Linde AG (c)202238401484
Total adjustments202238456484
Adjusted operating profit$2,556$2,422$4,994$4,763
Reported percentage change8%6%
Adjusted percentage change6%5%
Reported sales$8,495$8,267$16,607$16,367
Reported operating margin27.7%26.4%27.3%26.1%
Adjusted operating margin30.1%29.3%30.1%29.1%
Adjusted Depreciation and amortization
Reported depreciation and amortization$942$958$1,852$1,907
Less: Purchase accounting impacts - Linde AG (c)(198)(237)(389)(477)
Adjusted depreciation and amortization$744$721$1,463$1,430
Adjusted Other Income (Expense) - net
Reported Other Income (Expense) - net$15$2$33$60
Add: Purchase accounting impacts - Linde AG (c)(4)(1)(12)(7)
Adjusted Other Income (Expense) - net$19$3$45$67
Adjusted Interest Expense - Net
Reported interest expense - net$67$70$127$135
Add: Purchase accounting impacts - Linde AG (c)—1—3
Adjusted interest expense - net$67$71$127$138
Adjusted Income Taxes (a)
Reported income taxes$573$508$1,084$971
Add: Purchase accounting impacts - Linde AG (c)465690116
Quarter Ended June 30,Six Months Ended June 30,
2025202420252024
Add: Cost reduction program and other charges——185
Total adjustments4656108121
Adjusted income taxes$619$564$1,192$1,092
Adjusted Effective Tax Rate (a)
Reported income before income taxes and equity investments$2,346$2,163$4,526$4,243
Add: Purchase accounting impacts - Linde AG (c)202237401481
Add: Cost reduction program and other charges——55—
Total adjustments202237456481
Adjusted income before income taxes and equity investments$2,548$2,400$4,982$4,724
Reported Income taxes$573$508$1,084$971
Reported effective tax rate24.4%23.5%24.0%22.9%
Adjusted income taxes$619$564$1,192$1,092
Adjusted effective tax rate24.3%23.5%23.9%23.1%
Income from Equity Investments
Reported income from equity investments$33$45$71$93
Add: Purchase accounting impacts - Linde AG (c)18183636
Adjusted income from equity investments$51$63$107$129
Adjusted Noncontrolling Interests
Reported noncontrolling interests$(40)$(37)$(74)$(75)
Add: Purchase accounting impacts - Linde AG (c)(3)(3)(6)(6)
Adjusted noncontrolling interests$(43)$(40)$(80)$(81)
Adjusted Net Income - Linde plc (b)
Reported net income$1,766$1,663$3,439$3,290
Add: Cost reduction program and other charges——37(5)
Add: Purchase accounting impacts - Linde AG (c)171196341395
Total adjustments171196378390
Adjusted net income - Linde plc$1,937$1,859$3,817$3,680
Quarter Ended June 30,Six Months Ended June 30,
2025202420252024
Adjusted Diluted EPS (b)
Reported diluted EPS$3.73$3.44$7.24$6.79
Add: Cost reduction program and other charges——0.08(0.01)
Add: Purchase accounting impacts - Linde AG (c)0.360.410.720.82
Total adjustments0.360.410.800.81
Adjusted diluted EPS$4.09$3.85$8.04$7.60
Reported percentage change8%7%
Adjusted percentage change6%6%
Adjusted EBITDA and % of Sales
Net Income - Linde plc$1,766$1,663$3,439$3,290
Add: Noncontrolling interests40377475
Add: Net pension and OPEB cost (benefit), excluding service cost(59)(49)(115)(99)
Add: Interest expense6770127135
Add: Income taxes5735081,084971
Add: Depreciation and amortization9429581,8521,907
EBITDA$3,329$3,187$6,461$6,279
Add: Cost reduction program and other charges——55—
Add: Purchase accounting impacts - Linde AG (c)22194843
Total adjustments221910343
Adjusted EBITDA$3,351$3,206$6,564$6,322
Reported sales$8,495$8,267$16,607$16,367
% of sales
EBITDA39.2%38.6%38.9%38.4%
Adjusted EBITDA as a % of Sales39.4%38.8%39.5%38.6%
(a) The income tax expense (benefit) on the non-GAAP pre-tax adjustments was determined using the applicable tax rates for the jurisdictions that were utilized in calculating the GAAP income tax expense (benefit) and included both current and deferred income tax amounts.
(b) Net of income taxes which are shown separately in “Adjusted Income Taxes and Effective Tax Rate”.
(c) The company believes that its non-GAAP measures excluding merger 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 merger purchase accounting than others, causing results that are not comparable at the reportable segment level, therefore, the impacts of merger 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 merger purchase accounting impacts, and; (iv) it is important to investors and analysts to understand the purchase accounting impacts to the financial statements. A summary of each of the adjustments made for Purchase accounting impacts - Linde AG are as follows: Adjusted Operating Profit and Margin: The purchase accounting adjustments for the periods presented relate primarily to depreciation and amortization related to the fair value step up of fixed assets and intangible assets (primarily customer related) acquired in the merger and the allocation of fair value step-up for ongoing Linde AG asset disposals (reflected in Other Income/(Expense)). Adjusted Interest Expense - Net: Relates to the amortization of the fair value of debt acquired in the merger. Adjusted Income Taxes and Effective Tax Rate: Relates to the current and deferred income tax impact on the adjustments discussed above. The income tax expense (benefit) on the non-GAAP pre-tax adjustments was determined using the applicable tax rates for the jurisdictions that were utilized in calculating the GAAP income tax expense (benefit) and included both current and deferred income tax amounts. Adjusted Income from Equity Investments: Represents the amortization of increased fair value on equity investments related to depreciable and amortizable assets. Adjusted Noncontrolling Interests: Represents the noncontrolling interests’ ownership portion of the adjustments described above determined on an entity by entity basis.

Supplemental Guarantee Information

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

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

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

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

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

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

Linde plc established a European debt issuance program on May 11, 2020, as subsequently updated with a base prospectus filed with the Luxembourg Stock Exchange on May 8, 2025, for a €20.0 billion debt issuance program (or the equivalent in other currencies), 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 issuance program, as confirmed to the current program amount. Under the European debt issuance program, Linde plc may issue unsecured notes with such terms, including currency, interest rate and maturity, as agreed by Linde plc and the purchasers of such notes at the time of sale and as set out in the final terms for the relevant issue of notes. The current European debt issuance program will be valid for a period of one year from May 8, 2025 after which it will require updating prior to any further issuance of notes.

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.

(Millions of dollars)
Statement of Income DataSix Months Ended June 30, 2025Twelve Months Ended December 31, 2024
Sales$4,249$7,995
Operating profit7851,526
Net income(102)3,553
Transactions with non-guarantor subsidiaries1,7157,177
Balance Sheet Data (at period end)
Current assets (a)$5,427$7,827
Long-term assets (b)16,05714,481
Current liabilities (c)10,48610,309
Long-term liabilities (d)71,10464,848
(a) From current assets above, amount due from non-guarantor subsidiaries$1,912$4,425
(b) From long-term assets above, amount due from non-guarantor subsidiaries9271,031
(c) From current liabilities above, amount due to non-guarantor subsidiaries2,2021,841
(d) From long-term liabilities above, amount due to non-guarantor subsidiaries46,74945,378

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