LINDE PLC

The discussion that follows includes a comparison of our results of operations and liquidity and capital resources for the years ended December 31, 2025 and 2024. For the discussion comparing the years ended December 31, 2024 and 2023, refer to Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Form 10-K for the year ended December 31, 2024.

The following table provides summary information for 2025 and 2024. 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.

(a)See Note 3 to the consolidated financial statements.

(b)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 Financial Measures" section of this MD&A.

The following table provides a summary of changes in consolidated sales:

2025 Compared With 2024

Sales

Linde sales increased $981 million, or 3%, for the 2025 year versus 2024. Sales grew 2% from higher price attainment. Acquisitions increased sales by 1% during the year. Volumes were flat, as new project start-ups were largely offset by base volume declines. Currency translation and cost pass-through, representing the contractual billing of energy cost variances primarily to onsite customers, were flat.

Cost of sales, exclusive of depreciation and amortization

Cost of sales, exclusive of depreciation and amortization, increased $246 million, or 1%, for the year primarily due to cost inflation partially offset by productivity gains. Cost of sales, exclusive of depreciation and amortization, was 51.2% and 51.9% of sales, in 2025 and 2024, respectively. The decrease as a percentage of sales was primarily due to higher pricing and productivity gains.

Selling, general and administrative expenses

Selling, general and administrative expense ("SG&A") increased $96 million, or 3%, from $3,337 million in 2024 to $3,433 million in 2025. SG&A was 10.1% of sales in 2025 and 2024. SG&A increased in 2025 due to acquisitions and cost inflation, partially offset by savings from cost reduction programs and productivity initiatives.

Depreciation and amortization

Reported depreciation and amortization expense decreased $17 million versus 2024. The decrease was 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 expense increased $129 million, or 5%, versus 2024, driven largely by new project start-ups.

Cost reduction program and other charges

Cost reduction program and other charges include global severance charges of $308 million largely related to Engineering, and other benefits of $35 million largely related to a divestiture. 2024 includes severance charges of $165 million, other charges of $23 million and other benefit of $43 million related to a divestiture.

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

Other income (expense) - net

Reported other income (expense) - net was an expense of $58 million in 2025 and a benefit of $185 million in 2024. In 2025, other expense included a charge of $164 million for merger-related purchase accounting impacts. In 2024, other income included a benefit of $41 million related to a settlement with a supplier in the Americas and $45 million in insurance recoveries primarily within the Other segment (Note 7).

On an adjusted basis, which excludes merger-related purchase accounting impacts, other income (expense) - net decreased $96 million from income of $202 million in 2024 to income of $106 million in 2025.

On a reported basis, operating profit increased $288 million in 2025, or 3%. The increase was primarily driven by higher pricing and savings from productivity initiatives which more than offset the adverse impacts of cost inflation, and higher cost reduction program and other charges.

On an adjusted basis, which excludes the merger-related purchase accounting impacts as well as cost reduction program and other charges, operating profit increased $417 million, or 4%, for 2025 versus 2024. Operating profit growth was driven by higher pricing and productivity initiatives, which more than offset the effects of cost inflation during 2025. A discussion of operating profit by segment is included in the segment discussion that follows.

Interest expense - net

Reported interest expense – net was an expense of $255 in 2025 and $256 in 2024.

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

Reported net pension and OPEB cost (benefit), excluding service cost were benefits of $229 million and $190 million in 2025 and 2024, respectively. The increase primarily relates to lower interest cost due to lower benefit obligations and higher amortization of deferred gains year-over-year. (see Note 16 to the consolidated financial statements).

Effective tax rate

The reported effective tax rate ("ETR") for 2025 was 22.4% versus 23.4% in 2024. The decrease in the rate was primarily due to a tax rate decrease in Germany including merger-related purchase accounting impacts, partially offset by tax benefits in 2024 from a repatriation that did not recur in 2025. The benefit related to the tax rate decrease in Germany was $158 million.

On an adjusted basis, the ETR for 2025 was 23.7% versus 23.4% in 2024. The increase in the rate is largely due to tax benefits from a repatriation in 2024 that did not recur in 2025, partially offset by a tax rate decrease in Germany excluding merger-related purchase accounting impacts.

On July 4, 2025, H.R.1 - One Big Beautiful Bill Act was enacted into law (OBBBA). The Bill makes permanent key elements of the 2017 Tax Cuts and Jobs Act, including 100% bonus depreciation and domestic research cost expensing. These changes provide current and future cash tax benefits to the company. OBBBA did not have a material impact to 2025 results.

Income from equity investments

Reported income from equity investments for 2025 was $150 million as compared to $170 million in 2024. On an adjusted basis, income from equity investments for 2025 was $228 million versus $242 million in 2024.

Noncontrolling interests

At December 31, 2025, noncontrolling interests consisted primarily of noncontrolling shareholders’ investments in APAC (primarily in China). Reported noncontrolling interests decreased $12 million, from $172 million in 2024 to $160 million in 2025. 2024 noncontrolling interests income included the impact of a divestiture in the APAC segment.

Adjusted noncontrolling interests increased $3 million in 2025 as compared to 2024.

Net Income - Linde plc

Reported net income - Linde plc increased $333 million, or 5%. On an adjusted basis, which excludes merger-related purchase accounting impacts and cost reduction program and other charges, net income - Linde plc increased $297 million, or 4%, in 2025 versus 2024. 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 $0.99, or 7%, in 2025 as compared to 2024. On an adjusted basis, diluted EPS of $16.46 in 2025 increased $0.95 versus 2024. 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 December 31, 2025 was 65,177, a decrease of 112 employees from 2024, primarily driven by the impact of ongoing cost reduction programs partially offset by acquisitions.

Other Financial Data

EBITDA increased to $12,836 million in 2025 from $12,585 million in 2024. Adjusted EBITDA increased to $13,351 million for 2025 as compared to $12,819 million in 2024. The increase on both a reported and adjusted basis was driven by higher net income - Linde plc versus prior year.

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

Other Comprehensive Income (Loss)

Other comprehensive income (loss) for the year ended December 31, 2025 was income of $693 million that resulted primarily from currency translation adjustments of $646 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 and British pound. See the "Currency" section of the MD&A for exchange rates used for translation purposes and Note 7 to the consolidated financial statements for a summary of the currency translation adjustment component of accumulated other comprehensive income (loss) by segment.

Related Party Transactions

The company’s related parties are primarily unconsolidated equity affiliates. The company did not engage in any material transactions involving related parties that included terms or other aspects that differ from those which would be negotiated with independent parties.

Environmental Matters

Linde’s principal operations relate to the production and distribution of atmospheric and other industrial gases, many of which are used to help customers reduce their emissions. The production and distribution of industrial gases, however, is energy intensive resulting in significant greenhouse gas ("GHG") emissions. Given its own carbon footprint, and the opportunities its gases provide for carbon productivity and energy transition, climate change is an area of significant impact for Linde.

Linde operates in jurisdictions that have, or are developing, laws and/or regulations to reduce or mitigate the adverse effects of GHG emissions and therefore faces a highly uncertain regulatory environment in this area. Linde continues to evaluate emerging regulatory changes and assess appropriate responses. For example, hydrogen production plants and other manufacturing and electricity-generating plants have been identified as sources of carbon dioxide emissions and are subject to carbon taxation or cap-and-trade regulations in jurisdictions including California, China, Singapore and the European Union impacting both Linde and its customers. Linde believes it will be able to mitigate the costs of these regulations through the terms of its product supply contracts. However, legislation that limits GHG emissions may impact growth by increasing capital, compliance, operating and maintenance costs and/or decreasing demand.

To manage business risks from current and potential GHG emission regulation as well as physical risks associated with climate change, Linde actively monitors emerging developments, evaluates the direct and indirect business risks, and takes appropriate actions. Among others, actions include: increasing relevant resources and training; maintaining contingency plans; obtaining advice and counsel from expert vendors, insurance providers and industry experts; incorporating GHG provisions in commercial agreements; and conducting regular reviews of the business risks with management. Although there are considerable uncertainties, Linde believes that the business risk from potential regulations can be effectively managed through its commercial contracts. Additionally, Linde’s plant design, operations, and risk management teams are engaged to manage and mitigate losses from physical climate change, and the company does not anticipate material effects regarding its plant operations or business arising from potential physical risks of climate change.

At the same time, external factors may provide Linde with future business opportunities. Linde anticipates continued growth in clean hydrogen sales due to increased focus on decarbonization projects. Other factors include governmental regulation of GHG and other emissions; uncertain costs of energy and certain natural resources; the development of renewable energy alternatives; and new technologies that help extract natural gas, improve air quality, increase energy efficiency and mitigate the impacts of climate change. Linde continues to develop new applications that can help customers lower emissions by reducing energy consumption and increasing product throughput. Linde’s oxyfuel combustion technology is a significant advancement in industrial combustion processes offering enhanced efficiency, higher productivity, reduced emissions and effective carbon capture solutions across various industries including metals, glass, refining and chemicals processes. Stricter regulation of water quality in emerging economies such as China provide a growing market for a number of gases, e.g., oxygen for wastewater treatment. Increased concern about drought in areas such as California and Australia may create additional markets for carbon dioxide for desalination. Renewable fuel standards in the European Union and U.S. can create a market for second-generation biofuels which use industrial gases such as oxygen, carbon dioxide, and hydrogen.

Linde continuously seeks opportunities to optimize energy use and reduce GHG emissions through research and development in customer applications and operational energy efficiency, sourcing low-carbon energy, and purchasing hydrogen as a chemical byproduct where feasible. Linde tracks GHG emission performance versus targets and reports regularly to business management and the Sustainability Committee of Linde's Board of Directors. The Sustainability

Committee is responsible for oversight of the company's programs and policies related to environmental matters, including climate change, greenhouse gas reduction goals and decarbonization and clean energy efforts.

Costs Relating to the Protection of the Environment

The environmental protection costs incurred in 2025 were not significant. Linde anticipates that future annual environmental protection expenditures will be similar to 2025, subject to any significant changes in existing laws and regulations.

See Note 17 to the consolidated financial statements for information concerning legal proceedings.

Retirement Benefits

Pensions

The net periodic benefit cost (benefit) was a benefit of $147 million, $106 million and $80 million in 2025, 2024 and 2023, respectively.

The funded status (pension benefit obligation ("PBO") less the fair value of plan assets) for the U.S. plans was a surplus of $169 million and $86 million at December 31, 2025 and 2024, respectively. The funded status for non-U.S. plans was a surplus of $615 million and $464 million at December 31, 2025 and 2024, respectively. During 2025, the U.S. and non-U.S. plans derived a benefit from plan asset performance and currency translation impacts, partially offset by actuarial losses due to discount rate environment.

Global pension contributions were $25 million in 2025, $35 million in 2024, and $46 million in 2023. At a minimum, Linde contributes to its pension plans to comply with local regulatory requirements (e.g., ERISA in the U.S.). Discretionary contributions in excess of the local minimum requirements are made based on many factors, including long-term projections of the plans' funded status, the economic environment, potential risk of overfunding, pension insurance costs and alternative uses of cash. Changes to these factors can impact the timing of discretionary contributions from year to year. Estimated required cash contributions for 2026 are currently expected to be in the range of $25 million to $35 million.

Linde assumes expected returns on plan assets for 2026 of 7.00% and 6.01% for the U.S. and non-U.S. plans, respectively, which are consistent with the long-term expected returns on its investment portfolios.

Excluding the impact of any settlements, 2026 consolidated pension expense is expected to be a benefit of approximately $136 million. The benefit derived from the expected return on assets assumption for Linde's most significant plans is anticipated to more than offset the expense from service and interest cost accruals and the higher amortization of deferred losses.

Refer to the Critical Accounting Estimates section and Note 16 to the consolidated financial statements for a more detailed discussion of the company’s retirement benefits, including a description of the various retirement plans and the assumptions used in the calculation of net periodic benefit cost (benefit) and funded status.

Insurance

Linde purchases insurance to limit a variety of property and casualty risks, including those related to property, business interruption, third-party liability and workers’ compensation. Currently, the company self retains up to $10 million per occurrence for vehicle liability and $5 million per occurrence for workers' compensation and general liability in the United States. Linde has a captive insurance company that provides coverage for property damage resulting from fire, flood and other perils and business interruption up to $50 million per event, and $100 million, in the annual aggregate, of losses above local deductibles (ranging from $5 to $7.5 million per event) at the group's sites globally. To mitigate the risk of losses above these self retention levels, the company purchases catastrophic insurance coverage from highly rated insurance companies.

At December 31, 2025 and 2024, the company had recorded a total of $84 million and $80 million, respectively, representing an estimate of the retained liability for the ultimate cost of claims incurred and unpaid as of the balance sheet dates. The estimated liability is established using statistical analysis and is based upon historical experience, actuarial assumptions and professional judgment. These estimates are subject to the effects of trends in loss severity and frequency and are subject to a significant degree of inherent variability. If actual claims differ from the company’s estimates, they will be adjusted at that time and financial results could be impacted.

Linde recognizes estimated insurance proceeds relating to damages at the time of loss only to the extent of incurred losses. Any insurance recoveries for business interruption and for property damages in excess of the net book value of the property are recognized only when realized or pending payments confirmed by its insurance companies.