LINDE PLC

Linde plc is the largest industrial gas company worldwide and a major technological innovator in the industrial gases industry. Its primary products are atmospheric gases (oxygen, nitrogen, argon, and rare gases) and process gases (hydrogen, helium, carbon dioxide, carbon monoxide, electronic gases, specialty gases, and acetylene). The company also designs and builds equipment that produces industrial gases and offers customers a wide range of gas production and processing services such as olefin plants, natural gas plants, air separation plants, hydrogen and synthesis gas plants, and other types of plants. Linde serves a diverse group of industries including healthcare, chemicals and energy, manufacturing, metals and mining, food and beverage, and electronics. The company has majority or wholly owned subsidiaries that operate in approximately 50 European, Middle Eastern and African countries; approximately 15 Asian and South Pacific countries; and approximately 20 countries in North and South America. Approximately 64% of its 2025 sales were outside of the United States.

Linde participates in highly competitive markets in industrial gases and engineering, characterized by a mixture of local, regional and global players. Competitors named in the filing include global and regional companies such as L'Air Liquide S.A., Air Products and Chemicals, Inc., Messer Group GmbH, Mitsubishi Chemical Holdings Corporation (through Taiyo Nippon Sanso Corporation) as well as an extensive number of small to medium size independent industrial gas companies. In locations where Linde has pipeline networks, which enable the company to provide reliable and economic supply of products to larger customers, Linde derives a competitive advantage. The company's networks of thousands of production plants, pipeline complexes, distribution centers and delivery vehicles are described as a competitive advantage, providing the foundation of reliable product supply to its customer base.

Linde generates revenue through the production, sale and distribution of atmospheric, process and specialty gases, as well as through its Engineering business which designs and builds equipment that produces industrial gases. The industrial gases business generates most of its revenues and earnings in geographies where the company has its strongest market positions. The majority of Linde's business is conducted through long-term contracts which provide stability in cash flow and the ability to pass through changes in energy and feedstock costs to customers. The company's industrial gas operations are managed on a geographical basis and in 2025 90% of sales were generated by Linde's three geographic segments (Americas, EMEA and APAC) and the remaining 10% were related largely to the Engineering segment, and to a lesser extent Other.

Linde's industrial gases product line centers on the manufacturing and distribution of atmospheric gases (oxygen, nitrogen, argon, rare gases) and process gases (hydrogen, helium, carbon dioxide, carbon monoxide, electronic gases, specialty gases, acetylene). These products are distributed through three basic distribution methods: on-site or tonnage, merchant or bulk, and packaged or cylinder gases. On-site product supply contracts generally are total requirement contracts with terms typically ranging from 10-20 years and containing minimum purchase requirements and price escalation provisions. The merchant business uses customer agreements that are usually three to seven-year requirement contracts. Packaged gases are generally sold under one to three-year supply contracts and through purchase orders. The Engineering business has a global presence, with its focus on market segments such as air separation, hydrogen, synthesis, olefin and natural gas plants, and either supplies plant components directly to the customer or to the industrial gas business of Linde which operates the plants under long-term gases supply contracts.

The Americas segment includes Linde's industrial gases operations in approximately 20 countries including the United States, Canada, Mexico and Brazil. The EMEA segment includes Linde's industrial gases operations in approximately 50 European, Middle Eastern, and African countries including Germany, the U.K., France, Sweden and the Republic of South Africa. 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. The Engineering segment designs and manufactures equipment for air separation and other industrial gas applications specifically for end customers and is managed on a worldwide basis operating in all geographic segments. Other consists of corporate costs and a few smaller businesses including Linde Advanced Materials Technology (LAMT) and global helium wholesale. For the year ended December 31, 2025, Americas segment sales were $15,208 million ¹, EMEA segment sales were $8,549 million ², APAC segment sales were $6,661 million ³, Engineering segment sales were $2,250 million ⁴, and Other sales were $1,318 million ⁵.

On October 23, 2023, the company's board of directors approved the repurchase of $15 billion ⁶ of its ordinary shares (the 2023 program). As of December 31, 2025, the company repurchased $7.7 billion ⁷ of its ordinary shares pursuant to the 2023 program, and $7.3 billion ⁸ of share repurchases remain authorized under the 2023 program. During the three months ended December 31, 2025, the company purchased 3,307 thousand ⁹ shares at an average price of $423.46 ¹⁰ per share. Net purchases of ordinary shares were $4,578 million ¹¹ in 2025 versus $4,451 million ¹² in 2024. Cash dividends increased to $2,811 million ¹³ in 2025 versus $2,655 million ¹⁴ in 2024 driven primarily by an 8% increase in dividends per share to $6.00 ¹⁵ per share from $5.56 ¹⁶ per share. Capital expenditures were $5,261 million ¹⁷ in 2025. Acquisitions, net of cash acquired were $412 million ¹⁸ in 2025. The company also recorded cost reduction program and other charges of $273 million ¹⁹ in 2025, including global severance charges of $308 million ²⁰ largely related to Engineering, and other benefits of $35 million ²¹ largely related to a divestiture.

Sales for the year ended December 31, 2025 were $33,986 million ²², a 3% increase from $33,005 million ²³ in 2024. Reported operating profit was $8,923 million ²⁴ in 2025, a 3% increase from $8,635 million ²⁵ in 2024. Adjusted operating profit was $10,137 million ²⁶ in 2025, a 4% increase from $9,720 million ²⁷ in 2024. Net income - Linde plc was $6,898 million ²⁸ in 2025, up from $6,565 million ²⁹ in 2024. Diluted earnings per share were $14.61 ³⁰ in 2025, up from $13.62 ³¹ in 2024. Adjusted diluted earnings per share were $16.46 ³² in 2025, a 6% increase from $15.51 ³³ in 2024. Cash flow from operations was $10,350 million ³⁴ in 2025, an increase of $927 million ³⁵ from 2024.

Linde provides quarterly updates on operating results, material trends that may affect financial performance, and financial guidance via earnings releases and investor teleconferences. These materials are available on the company's website but are not incorporated herein.Linde has growth opportunities in all major geographies and in diverse end-markets such as healthcare, chemicals and energy, manufacturing, metals and mining, food and beverage, and electronics. The company anticipates continued growth in clean hydrogen sales due to increased focus on decarbonization projects. External factors that may provide future business opportunities 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, such as oxyfuel combustion technology. At December 31, 2025, Linde's sale of gas backlog of large projects under construction was approximately $7.3 billion ³⁶, representing the total estimated capital cost of large plants under construction.

Linde's research and development is directed toward development of gas processing, separation and liquefaction technologies, and clean energy technologies; improving distribution of industrial gases and the development of new markets and applications for these gases. This results in the development of new advanced air separation, hydrogen, synthesis gas, natural gas, adsorption and chemical process technologies; novel clean energy and carbon management solutions; as well as the frequent introduction of new industrial gas applications. Research and development is primarily conducted in Pullach, Germany, Tonawanda, New York, Burr Ridge, Illinois and Shanghai, China. The company has a range of technologies to produce low-carbon hydrogen from fossil feedstocks, or renewable hydrogen from renewable energy (non-fossil feedstock), both considered sources of clean energy. Linde's technology portfolio covers the entire value chain for production, liquefaction, storage, distribution and application of hydrogen which supports the transition to clean energy.

On an adjusted basis, operating margin was 29.8% ³⁷ in 2025 compared to 29.5% ³⁸ in 2024. Adjusted EBITDA as a percent of sales was 39.3% ³⁹ in 2025 compared to 38.8% ⁴⁰ in 2024. The increase in reported and adjusted operating profit was primarily driven by higher pricing and savings from productivity initiatives in 2025, which more than offset the adverse impacts of cost inflation. Cost of sales, exclusive of depreciation and amortization, was 51.2% ⁴¹ of sales in 2025 compared to 51.9% ⁴² in 2024, with the decrease as a percentage of sales primarily due to higher pricing and productivity gains. The company expects to mitigate the costs of GHG emission regulations through the terms of its product supply contracts.

The company's operations are exposed to physical risks associated with the occurrence of natural disasters linked to climate change, such as extreme weather events including hurricanes and floods, as well as catastrophic events such as health epidemics, pandemics, and acts of war or terrorism. Linde evaluates the direct and indirect business risks, consults with vendors, insurance providers and industry experts, makes investments in suitably resilient design and technology, and conducts regular reviews of the business risks with management. The company'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. 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.

Capital expenditures were $5,261 million ⁴³ in 2025, an increase of $764 million ⁴⁴ from 2024. Capital expenditures during 2025 related primarily to investments in new plant and production equipment for backlog growth requirements. Approximately 60% of the capital expenditures were in the Americas segment with 21% in the APAC segment and the rest largely in the EMEA segment. Net purchases of ordinary shares were $4,578 million ⁴⁵ in 2025. Cash dividends to shareholders were $2,811 million ⁴⁶ in 2025. The company maintains a $5 billion ⁴⁷ and a $1.5 billion ⁴⁸ unsecured and undrawn revolving credit agreement with no associated financial covenants. No borrowings were outstanding under the credit agreements as of December 31, 2025. Estimated required cash contributions for pension plans for 2026 are currently expected to be in the range of $25 million ⁴⁹ to $35 million ⁵⁰. Excluding the impact of any settlements, 2026 consolidated pension expense is expected to be a benefit of approximately $136 million ⁵¹.

A broad decline in general economic or business conditions in the industries served by its customers could adversely affect the demand for Linde's products and impair the ability of its customers to satisfy their obligations to Linde, resulting in uncollected receivables and/or unanticipated contract terminations or project delays. Global political and economic uncertainty could reduce investment activities of Linde's customers, which could adversely affect Linde's business. Many of Linde's customers are in businesses that are cyclical in nature, such as the chemicals and energy, and metals and mining end markets. Energy is the single largest cost item in the production and distribution of industrial gases, and the supply of energy has not been a significant issue in the geographic areas where the company conducts business; however, regional energy conditions are unpredictable and may pose future risk. For hydrogen, helium, carbon dioxide, carbon monoxide, and specialty gases, raw materials are largely purchased from outside sources, and their long-term availability and prices are subject to market conditions.

Linde has substantial international operations which are subject to risks including devaluations in currency exchange rates, transportation delays and interruptions, political and economic instability and disruptions, restrictions on the transfer of funds, trade conflicts and the imposition of duties and tariffs, import and export controls, changes in governmental policies, labor unrest, possible nationalization and/or expropriation of assets, changes in U.S. and non-U.S. tax policies and compliance with governmental regulations. Because a significant portion of Linde's revenue is denominated in currencies other than its reporting currency, the U.S. dollar, changes in exchange rates will produce fluctuations in revenue, costs and earnings and may also affect the book value of assets and liabilities and related equity. As of December 31, 2025, the net carrying value of goodwill and other indefinite-lived intangible assets was approximately $28 billion ⁵² and $2 billion ⁵³, respectively, primarily as a result of the business combination and the related acquisition method of accounting applied to the 2018 merger.

As of December 31, 2025, the net carrying value of goodwill and other indefinite-lived intangible assets was approximately $28 billion ⁵⁴ and $2 billion ⁵⁵, respectively, primarily from the 2018 merger, and significant negative industry or economic trends could result in impairment charges that materially impact results. Energy is the single largest cost item in production and distribution, and although the company uses contractual pass-through mechanisms, regional energy conditions are unpredictable and may pose future risk. Linde's international operations in over 80 countries expose it to currency fluctuations, trade conflicts, tariffs, and political instability, with approximately 64% of 2025 sales outside the U.S. The company faces risks from information technology system failures and cybersecurity breaches, which have in the past been and will likely be subject to increasingly sophisticated cyber attacks, though to date such attempts have not had any significant impact on operations or financial results. Changes in tax laws or policy, including potential changes to U.K. tax residency rules or U.S. federal income tax treatment, could result in significant adverse tax consequences, and the company is subject to audits in major jurisdictions including the U.S. (2022 through 2025), Germany (2018 through 2025), and China (2020 through 2025).

Management's message emphasizes that Linde is the largest industrial gas company worldwide and a major technological innovator in the industrial gases industry. The company's sales were $33,986 million ⁵⁶ for 2025, a 3% increase from 2024 sales of $33,005 million ⁵⁷. Reported operating profit of $8,923 million ⁵⁸ was 3% above 2024 reported operating profit of $8,635 million ⁵⁹. Adjusted operating profit of $10,137 million ⁶⁰ was 4% above 2024 adjusted operating profit of $9,720 million ⁶¹. Net income - Linde plc of $6,898 million ⁶² and diluted earnings per share of $14.61 ⁶³ increased from $6,565 million ⁶⁴ and $13.62 ⁶⁵, respectively, in 2024. Adjusted net income - Linde plc of $7,772 million ⁶⁶ and adjusted diluted earnings per share of $16.46 ⁶⁷ were 4% and 6%, respectively, above 2024 adjusted amounts. Cash flow from operations of $10,350 million ⁶⁸ was $927 million ⁶⁹ above 2024. The strategic priorities emphasized include higher price attainment, savings from productivity initiatives, and new project start-ups. The company notes that the diversity of end-markets supports financial stability for Linde in varied business cycles, and that the majority of Linde's business is conducted through long-term contracts which provide stability in cash flow and the ability to pass through changes in energy and feedstock costs to customers.