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There are three types of derivatives 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.


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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, currency contracts are generally not designated as hedges for accounting purposes unless they are related to forecasted transactions. 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, then hedge accounting will be discontinued prospectively.


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Changes in the fair value of derivatives designated as fair-value hedges are recognized in earnings as an offset to the change in the fair values of the underlying exposures being hedged. The changes in fair value of derivatives that are designated as cash-flow hedges are deferred in accumulated other comprehensive income (loss) and are reclassified to earnings as the underlying hedged transaction affects earnings. Provided the hedge remains highly effective, any ineffectiveness is deferred in accumulated other comprehensive income (loss) and is reclassified to earnings as the underlying hedged transaction affects earnings. Hedges of net investments in foreign subsidiaries are recognized in the cumulative translation adjustment component of accumulated other comprehensive income (loss) on the consolidated balance sheets to offset translation gains and losses associated with the hedged net investment. Derivatives that are entered into for risk-management purposes and are not designated as hedges (primarily related to currency derivatives other than for firm commitments) are recorded at their fair market values and recognized in current earnings.


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See Note 12 for additional information relating to financial instruments.


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Goodwill – Acquisitions are accounted for using the acquisition method which requires allocation of the purchase price to assets acquired and liabilities assumed based on estimated fair values. Any excess of the purchase price over the fair value of the assets and liabilities acquired is recorded as goodwill. Allocations of the purchase price are based on preliminary estimates and assumptions at the date of acquisition and are subject to revision based on final information received, including appraisals and other analyses which support underlying estimates.


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The company performs a goodwill impairment test annually as of October 1 or more frequently if events or circumstances indicate that an impairment loss may have been incurred. The impairment test allows an entity to first assess qualitative factors to determine if it is more likely than not that the fair value of a reporting unit is less than carrying value. If it is determined that it is more likely than not that the fair value of a reporting unit is less than carrying value then the


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company will estimate and compare the fair value of its reporting units to their carrying value, including goodwill. Reporting units are determined based on one level below the operating segment level. The qualitative analysis of goodwill for the year ended December 31, 2023 showed the fair value of the reporting units substantially exceeded the carrying value, as such further analysis was not performed.


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See Note 9 for additional information relating to goodwill.


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Other Intangible Assets – Other intangible assets, primarily customer relationships, are amortized over the estimated period of benefit. The determination of the estimated period of benefit will be dependent upon the use and underlying characteristics of the intangible asset. Linde evaluates the recoverability of its intangible assets subject to amortization when facts and circumstances indicate that the carrying value of the asset may not be recoverable. If the carrying value is not recoverable, impairment is measured as the amount by which the carrying value exceeds its estimated fair value. Fair value is generally estimated based on either appraised value or other valuation techniques. Indefinite lived intangible assets related to the Linde brand are evaluated for impairment on an annual basis or more frequently if events or circumstances indicate an impairment loss may have occurred.


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See Note 10 for additional information relating to other intangible assets.


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Income Taxes – Deferred income taxes are recorded for the temporary differences between the financial statement and tax bases of assets and liabilities using currently enacted tax rates. Valuation allowances are established against deferred tax assets whenever circumstances indicate that it is more likely than not that such assets will not be realized in future periods.


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Under the guidance for accounting for uncertainty in income taxes, the company can recognize the benefit of an income tax position only if it is more likely than not (greater than 50%) that the tax position will be sustained upon tax examination, based solely on the technical merits of the tax position. Otherwise, no benefit can be recognized. The tax benefits recognized are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Additionally, the company accrues interest and related penalties, if applicable, on all tax exposures for which reserves have been established consistent with jurisdictional tax laws. Interest and penalties are classified as income tax expense in the financial statements.


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See Note 5 for additional information relating to income taxes.


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Retirement Benefits – Most Linde employees participate in a form of defined benefit or contribution retirement plan, and additionally certain employees are eligible to participate in various post-employment health care and life insurance benefit plans. The cost of contribution plans is recognized in the year earned while the cost of other plans is recognized over the employees’ expected service period to the company, all in accordance with the applicable accounting standards. The funded status of the plans is recorded as an asset or liability in the consolidated balance sheets. Funding of retirement benefits varies and is in accordance with local laws and practices.


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See Note 16 for additional information relating to retirement programs.


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Share-based Compensation– The company has historically granted share-based awards which consist of stock options, restricted stock and performance-based stock. Share-based compensation expense is generally recognized on a straight-line basis over the stated vesting period. For stock awards granted to full-retirement-eligible employees, compensation expense is recognized over the period from the grant date to the date retirement eligibility is achieved. For performance-based awards, compensation expense is recognized only if it is probable that the performance condition will be achieved.


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See Note 15 for additional disclosures relating to share-based compensation.


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


LIN Accounting Standards Implemented in 2023

There were no new accounting pronouncements implemented in 2023 that would materially impact the 2023 financial statements.


LIN Accounting Standards to be Implemented

Improvements to Reportable Segments Disclosures - In November 2023, the FASB issued guidance requiring enhanced disclosure related to reportable segments. The new standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The


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adoption of this standard will only impact disclosures within the company's consolidated financial statements and the company is evaluating the impact this guidance will have on those disclosures.


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Improvements to Income Tax Disclosures - In December 2023, the FASB issued guidance requiring enhanced disclosure related to income taxes. The standard requires additional or modified disclosures related to the income tax rate reconciliation, disaggregation of income taxes paid, and several other disclosures. The new standard is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The adoption of this standard will only impact disclosures within the company's consolidated financial statements and the company is evaluating the impact this guidance will have on those disclosures.


LIN Acquisitions

Acquisitions were $953 million, $110 million and $88 million for the years ended December 31, 2023, 2022 and 2021, respectively. Acquisitions in 2023 primarily related to the Americas. Acquisitions in 2022 and 2021 primarily related to the Americas and EMEA.


LIN 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 $866 million, or $811 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.


LIN Final 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 twelve months ended December 31, 2023 consolidated income statement includes sales of $408 million related to nexAir, LLC. Pro forma results for 2022 have not been included as the impact of the acquisition is not material to the consolidated statements of income.


LIN Final Allocation of Purchase Price

The company estimated the preliminary fair value of net assets acquired based on information currently available at the time of the acquisition and has continued to adjust those estimates as additional information has become available. Measurement period adjustments totaled approximately $27 million, and related to working capital adjustments and deferred taxes. The following table summarizes the fair value of identifiable assets acquired and liabilities assumed in the acquisition of nexAir, LLC as of the acquisition date. (Millions of dollars)####January 5, 2023 Assets:#### Cash and cash equivalents##$##55 Other current assets - net####49 Property, plant and equipment, net####241 Other intangible assets - net####245 Other long-term liabilities - net####(1) Deferred taxes####(25) Total identifiable net assets##$##564 Goodwill##$##485 Fair value of previously held equity interest##$##183 Total purchase price##$##866


LIN Final Allocation of Purchase Price

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.


LIN Final Allocation of Purchase Price

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 asset, based on the most advantageous market for the asset (i.e., its highest and best use). The cost approach, adjusted for the age and condition of the property, plant and equipment, was used to estimate fair value.


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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 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.


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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 $485 million of goodwill, the majority of which is expected to be deductible for tax purposes. The goodwill balance is primarily attributable to the assembled workforce and operating synergies expected to result from the acquisition. The goodwill recorded as a result of 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.


LIN Sale of GIST business

In the third quarter of 2022, the company completed the sale of its GIST business. Proceeds from the sale were $184 million, net of cash divested of $75 million, for net proceeds of $109 million. The sale resulted in a loss of $21 million (benefit of $3 million, after tax), recorded within the other charges in the consolidated statement of income (see Note 3).


LIN 2023 Charges

Other charges were $40 million for the year ended December 31, 2023. Costs primarily related to severance in the Engineering segment and expenses incurred due to the intercompany reorganization for the year ended December 31, 2023. Other charges for 2023 included an income tax benefit of $81 million primarily comprised of a benefit of $124 million related to the resolution of an 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.


LIN 2022 Charges

Other charges were $1 billion ($896 million, after tax and noncontrolling interests) for the year ended December 31, 2022, largely attributable to the Russia-Ukraine conflict.


LIN 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 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 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).


LIN Russia-Ukraine Conflict

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 Other charges in the consolidated statements of income.


LIN Russia-Ukraine Conflict

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.


LIN Russia-Ukraine Conflict

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


LIN Other Russia related charges

Other charges related specifically to the Russia-Ukraine conflict were $103 million ($73 million after tax) for the year ended December 31, 2022, and are primarily comprised of impairments of assets which are maintained by international entities in support of the Russian business.


LIN Merger-Related Costs and Other Charges

Merger-related costs and other charges were $139 million ($93 million, after tax) for the year ended December 31, 2022, primarily related to severance actions within the Engineering segment recorded during the fourth quarter, the impairment of an equity method investment in the EMEA segment, and the sale of the GIST business completed on September 30, 2022 (see Note 2).


The following table provides a summary of the pre-tax charges by reportable segment for the year ended December 31, 2022: Table of Contents ############Year Ended December 31, 2022######## (millions of dollars)####Russia deconsolidation charges####Other Russia related charges####Total Russia charges####Merger-related costs and other charges####Total Americas##$##—##$##—##$##—##$##4##$##4 EMEA####733####(7)####726####25####751 APAC####—####—####—####28####28 Engineering####54####110####164####41####205 Other####—####—####—####41####41 Total##$##787##$##103##$##890##$##139##$##1,029


LIN 2021 Charges

Other charges were $273 million ($279 million after tax) for the year ended December 31, 2021.


LIN 2021 Charges

Total cost reduction program related charges were $338 million ($253 million after tax), for the year ended December 31, 2021. These expenses consisted primarily of severance charges of $259 million and other charges of $79 million for the year ended December 31, 2021. Other charges related primarily to the execution of the company's synergistic actions including location consolidations and business rationalization projects, process harmonization, and associated non-recurring costs.


LIN 2021 Charges

Merger-related and other charges were benefits of $65 million (benefit of $26 million, after tax) for the year ended December 31, 2021. The 2021 pre-tax benefit was primarily due to a $52 million gain triggered by a joint venture deconsolidation in the APAC segment.


LIN 2021 Charges

The following table provides a summary of the pre-tax charges by reportable segment for the year ended December 31, 2021: ############Year Ended December 31, 2021######## (millions of dollars)####Severance costs####Other cost reduction charges####Total cost reduction program related charges####Merger related and other charges####Total Americas##$##4##$##2##$##6##$##(6)##$##— EMEA####204####33####237####1####238 APAC####16####12####28####(50)####(22) Engineering####20####6####26####—####26 Other####15####26####41####(10)####31 Total##$##259##$##79##$##338##$##(65)##$##273


LIN Cash Requirements

The total cash requirements of the other charges incurred for the year ended December 31, 2023 are expected to be immaterial. Remaining cash requirements are expected to be paid primarily through 2024. Other charges, net of payments in the consolidated statements of cash flows for the twelve months ended December 31, 2023 and 2022 also reflect the impact of cash payments of liabilities, including merger-related tax liabilities, accrued as of December 31, 2022 and 2021, respectively.


LIN Cash Requirements

The following table summarizes the activities related to the company's cost reduction programs and other charges during 2022 and 2023: Table of Contents (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####890####41####24####65####74####1,029 Less: Cash payments####—####(122)####(24)####(146)####19####(127) Less: Non-cash charges####(890)####—####(7)####(7)####(109)####(1,006) Foreign currency translation and other####—####(22)####(4)####(26)####(3)####(29) Balance, December 31, 2022##$##—##$##281##$##27##$##308##$##12##$##320 2023 Other Charges####—####26####—####26####14####40 Less: Cash payments####—####(134)####(1)####(135)####(23)####(158) Less: Non-cash charges####—####—####—####—####12####12 Foreign currency translation and other####—####(1)####—####(1)####1####— Balance, December 31, 2023##$##—##$##172##$##26##$##198##$##16##$##214


LIN Classification in the consolidated financial statements

The pre-tax charges for each year are shown within operating profit in a separate line item on the consolidated statements of income. In the consolidated balance sheets, reductions in assets are recorded against the carrying value of the related assets and unpaid amounts are recorded as other current or long-term liabilities (see Note 7). On the consolidated statements of cash flows, the pre-tax impact of these charges, net of cash payments, is shown as an adjustment to reconcile net income to net cash provided by operating activities. In Note 18 Segment Information, Linde excluded these charges 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.


LIN NOTE 4. LEASES

In the normal course of its business, Linde enters into various leases as the lessee, primarily involving manufacturing and distribution equipment and office space. Linde determines whether a contract is or contains a lease at contract inception. Total lease and rental expenses related to operating lease right of use assets for the twelve months ended December 31, 2023 and 2022 was $284 million. Operating lease costs are included in selling, general and administrative expenses and cost of sales, exclusive of depreciation and amortization. The related assets and obligations are included in other long-term assets and other current liabilities and other long-term liabilities, respectively. Total lease and rental expenses related to finance lease right of use assets for the twelve months ended December 31, 2023 and 2022 were $58 million and $57 million, respectively, and the costs are included in depreciation and amortization and interest. Related assets and obligations are included in other long-term assets and other current liabilities and other long-term liabilities, respectively. Linde includes renewal options that are reasonably certain to be exercised as part of the lease term. Operating and financing lease expenses above include short term and variable lease costs which are immaterial.


LIN NOTE 4. LEASES

As most leases do not provide an implicit rate, Linde uses the applicable incremental borrowing rate at lease commencement to measure lease liabilities and right-of-use assets. Linde determines incremental borrowing rates through market sources.


LIN NOTE 4. LEASES

The company has elected to apply the short-term lease exception for all underlying asset classes. Short-term leases are leases that, at the commencement date, have a lease term of twelve months or less and do not include a purchase option that the lessee is reasonably certain to exercise. Leases that meet the short-term lease definition are not recognized on the balance sheet, but rather expensed on a straight-line basis over the lease term.


LIN NOTE 4. LEASES

Some leasing arrangements require variable payments that are dependent on usage, output, or may vary for other reasons, such as insurance. The company does not have material variable lease payments.


LIN NOTE 4. LEASES

Gains and losses on sale and leaseback transactions were immaterial. Operating cash flows used for operating leases for the twelve months ended December 31, 2023 and 2022 were $249 million and $254 million, respectively. Cash flows used for finance leases for the same period were immaterial.


LIN NOTE 4. LEASES

Supplemental balance sheet information related to leases is as follows: (Millions of dollars)####December 31, 2023####December 31, 2022 Operating Leases######## Operating lease right-of-use assets##$##759##$##726 Other current liabilities####177####181 Other long-term liabilities####572####540 Total operating lease liabilities####749####721 Finance Leases######## Finance lease right-of-use assets####179####146 Other current liabilities####50####42 Other long-term liabilities####143####114 Total finance lease liabilities##$##193##$##156


LIN NOTE 4. LEASES

Supplemental operating lease information: ##December 31, 2023####December 31, 2022## Weighted average lease term (years)##8####8## Weighted average discount rate##4.19##%##3.26##%


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Future operating and finance lease payments as of December 31, 2023 are as follows (millions of dollars): Period####Operating Leases####Financing Leases 2024##$##209##$##58 2025####157####50 2026####121####40 2027####88####29 2028####60####16 Thereafter####268####55 Total future undiscounted lease payments####903####248 Less imputed interest####(154)####(55) Total reported lease liability##$##749##$##193


LIN NOTE 5. INCOME TAXES

Pre-tax income applicable to U.S. and non-U.S. operations is as follows: (Millions of dollars) Year Ended December 31,####2023####2022####2021 United States##$##2,859##$##2,502##$##2,020 Non-U.S.####5,129####3,041####3,079 Total income before income taxes##$##7,988##$##5,543##$##5,099


LIN Provision for Income Taxes

The following is an analysis of the provision for income taxes: (Millions of dollars) Year Ended December 31,####2023####2022####2021 Current tax expense (benefit)############ U.S. federal##$##291##$##486##$##287 State and local####116####92####87 Non-U.S.####1,491####1,239####1,142 ####1,898####1,817####1,516 Deferred tax expense (benefit)############ U.S. federal####57####(12)####63 State and local####5####7####8 Non-U.S.####(146)####(378)####(325) ####(84)####(383)####(254) Total income taxes##$##1,814##$##1,434##$##1,262


LIN Effective Tax Rate Reconciliation

For purposes of the effective tax rate reconciliation, the company utilizes the U.S. statutory income tax rate of 21%. An analysis of the difference between the provision for income taxes and the amount computed by applying the U.S. statutory income tax rate to pre-tax income follows: Table of Contents (Dollar amounts in millions) Year Ended December 31,######2023##########2022##########2021#### U.S. statutory income tax##$##1,677####21.0##%##$##1,164####21.0##%##$##1,071####21.0##% State and local taxes – net of federal benefit####105####1.3##%####84####1.5##%####83####1.6##% Tax on Non-U.S. activities (a)####169####2.1##%####176####3.2##%####219####4.3##% Share-Based compensation####(66)####(0.8)##%####(41)####(0.7)##%####(56)####(1.1)##% Russia/Ukraine Charges####—####—##%####108####1.9##%####—####—##% Other (b)####(71)####(0.9)##%####(57)####(1.0)##%####(55)####(1.1)##% Provision for income taxes##$##1,814####22.7##%##$##1,434####25.9##%##$##1,262####24.7##%


LIN ________________________

(a)Primarily related to differences between the U.S. tax rate and the statutory tax rate in the countries in which the company operates. It also includes the U.S. tax impact of the non-U.S. activities and other non-U.S. permanent items and tax rate changes. Excluding 2021, which included an $83 million deferred income tax charge related to a tax rate increase in the U.K., these other items were not material.


LIN ________________________

(b)Includes net tax benefits related to tax audit settlements of $54 million in 2023, of $71 million in 2022, and $47 million in 2021.


LIN Net Deferred Tax Liabilities

Net deferred tax liabilities included in the consolidated balance sheets are comprised of the following: (Millions of dollars) December 31,####2023####2022 Deferred tax liabilities######## Fixed assets##$##2,686##$##2,775 Goodwill####215####173 Other intangible assets####2,872####2,939 Subsidiary/equity investments####586####545 Other (a)####456####471 ##$##6,815##$##6,903 Deferred tax assets######## Carryforwards##$##285##$##289 Benefit plans and related (b)(c)####243####165 Inventory####82####68 Accruals and other (d)####858####1,001 ##$##1,468##$##1,523 Less: Valuation allowances (e)####(176)####(276) ##$##1,292##$##1,247 Net deferred tax liabilities##$##5,523##$##5,656 Recorded in the consolidated balance sheets as (Note 7):######## Other long-term assets####226####230 Deferred credits####5,749####5,886 ##$##5,523##$##5,656


LIN ________________________

(a)Includes $221 million in 2023 and $206 million in 2022 related to right-of-use lease assets.


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(b)Includes deferred tax asset of $60 million and deferred tax liability of $54 million in 2023 and 2022, respectively, related to pension / OPEB funded status (see Notes 7 and 16).


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(c)The amounts are net of non-US deferred tax liabilities of $187 million in 2023 and $315 million in 2022.


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(d)Includes $228 million in 2023 and $212 million in 2022 related to lease liabilities.


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(e)Summary of changes in valuation allowances relating to deferred tax assets follows (millions of dollars): ####2023####2022####2021 Balance, January 1,##$##(276)##$##(235)##$##(243) Income tax (charge) benefit####65####(44)####8 Other, including write-offs####34####—####— Translation adjustments####1####3####— Balance, December 31,##$##(176)##$##(276)##$##(235)


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The company evaluates deferred tax assets quarterly to ensure that estimated future taxable income will be sufficient in character (e.g., capital gain versus ordinary income treatment), amount and timing to result in their recovery. After considering the positive and negative evidence, a valuation allowance is established to reduce the assets to their realizable value when management determines that it is more likely than not (i.e., greater than 50% likelihood) that a deferred tax asset will not be realized. Considerable judgment is required in establishing deferred tax valuation allowances.


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As of December 31, 2023, the company had $285 million of deferred tax assets relating to net operating losses (“NOLs”) and tax credits and $176 million of valuation allowances. These deferred tax assets include $235 million relating to NOLs of which $82 million expire within 5 years, $24 million expire after 5 years and $129 million have no expiration. The deferred tax assets also include $50 million related to credits of which $3 million expire within 5 years, $40 million expire after 5 years, and $7 million have no expiration. The valuation allowances of $176 million primarily relate to NOLs. Management has determined, based on financial projections and available tax strategies, that it is unlikely that the benefit of these losses will be realized. If events or circumstances change, valuation allowances are adjusted at that time resulting in an income tax benefit or charge.


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The company has $586 million of non-U.S income and withholding taxes accrued related to its investment in non-U.S. subsidiaries and equity investments. A provision has not been made for any additional non-U.S. income or withholding taxes at December 31, 2023 on approximately $4 billion of unremitted non-U.S. earnings on which the company intends to remain indefinitely reinvested or on other outside basis differences in its investments unrelated to unremitted earnings. A determination of these deferred taxes related to these amounts is not practicable.


LIN Uncertain Tax Positions

Unrecognized income tax benefits represent income tax positions taken on income tax returns but not yet recognized in the consolidated financial statements. The company has unrecognized income tax benefits totaling $304 million, $325 million and $387 million as of December 31, 2023, 2022 and 2021, respectively. If recognized, the majority of the unrecognized tax benefits and related interest and penalties would be recorded as a benefit to income tax expense on the consolidated statements of income.


LIN Uncertain Tax Positions

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: (Millions of dollars)####2023####2022####2021 Unrecognized income tax benefits, January 1##$##325##$##387##$##452 Additions for tax positions of prior years####108####26####11 Reductions for tax positions of prior years (a)####(121)####(45)####(11) Additions for current year tax positions####—####—####19 Reductions for settlements with taxing authorities (a)(b)####(1)####(23)####(60) Other (c)####(7)####(20)####(24) Unrecognized income tax benefits, December 31##$##304##$##325##$##387


LIN ________________________

(a)2023 and 2022 amounts are primarily related to the settlement of tax audits.


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(b)Settlements are uncertain tax positions that were effectively settled with the taxing authorities, including positions where the company has agreed to amend its tax returns to eliminate the uncertainty.


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(c)Other includes reductions for statute of limitation lapses and foreign currency translation.


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The company classifies interest income and expense related to income taxes as tax expense in the consolidated statements of income. The company recognized net interest benefit of $17 million and $3 million and expense of $15 million for the years ended December 31, 2023, 2022 and 2021, respectively. The company had $14 million and $35 million of accrued interest and penalties as of December 31, 2023 and 2022, respectively, which were recorded in other long-term liabilities in the consolidated balance sheets (See Note 7).


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As of December 31, 2023, the company remained subject to examination in the following major tax jurisdictions for the tax years as indicated below: Major tax jurisdictions##Open Years North and South America## United States##2020 through 2023 Canada##2014 through 2023 Mexico##2014 through 2023 Brazil##2008 through 2023 Europe and Africa## France##2019 through 2023 Germany##2018 through 2023 Spain##2010 through 2023 United Kingdom##2021 through 2023 Asia and Australia## Australia##2019 through 2023 China##2018 through 2023 India##2006 through 2023 South Korea##2020 through 2023


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The company is currently under audit in a number of jurisdictions. As a result, it is reasonably possible that some of these matters will conclude or reach the stage where a change in unrecognized income tax benefits may occur within the next twelve months. At the time new information becomes available, the company will record any adjustment to income tax expense as required. Final determinations, if any, are not expected to be material to the consolidated financial statements. The company is also subject to income taxes in many hundreds of state and local taxing jurisdictions that are open to tax examinations.


LIN NOTE 6. EARNINGS PER SHARE – LINDE PLC SHAREHOLDERS

Basic and Diluted earnings per share - Linde plc shareholders is computed by dividing Income from continuing operations, Income from discontinued operations, net of tax, and Net income – Linde plc for the period by the weighted average number of either basic or diluted shares outstanding, as follows: ####2023####2022####2021 Numerator (Millions of dollars)############ Income from continuing operations##$##6,199##$##4,147##$##3,821 Income from discontinued operations, net of tax####—####—####5 Net Income – Linde plc##$##6,199##$##4,147##$##3,826 Denominator (Thousands of shares)############ Weighted average shares outstanding####487,656####499,254####516,507 Shares earned and issuable under compensation plans####535####482####389 Weighted average shares used in basic earnings per share####488,191####499,736####516,896 Effect of dilutive securities############ Stock options and awards####4,099####4,302####4,979 Weighted average shares used in diluted earnings per share####492,290####504,038####521,875 Basic earnings per share from continuing operations##$##12.70##$##8.30##$##7.39 Basic earnings per share from discontinued operations####—####—####0.01 Basic Earnings Per Share##$##12.70##$##8.30##$##7.40 Diluted earnings per share from continuing operations##$##12.59##$##8.23##$##7.32 Diluted earnings per share from discontinued operations####—####—####0.01 Diluted Earnings Per Share##$##12.59##$##8.23##$##7.33


There were no antidilutive shares for the years ended December 31, 2023, 2022 and 2021.


LIN Income Statement

(Millions of dollars) Year Ended December 31,####2023####2022####2021 Selling, General and Administrative############ Selling##$##1,330##$##1,295##$##1,342 General and administrative####1,965####1,812####1,847 ##$##3,295##$##3,107##$##3,189 Year Ended December 31,####2023####2022####2021 Depreciation and Amortization (a)############ Depreciation##$##3,266##$##3,633##$##3,912 Amortization of intangibles (Note 10)####550####571####723 Depreciation and Amortization##$##3,816##$##4,204##$##4,635


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Year Ended December 31,####2023####2022####2021 Other Income (Expenses) – Net############ Currency related net gains (losses)##$##(47)##$##(18)##$##(29) Partnership income####2####18####13 Severance expense####(12)####(13)####(5) Asset divestiture gains (losses) – net####6####(9)####(31) Other – net gains (losses)####10####(40)####26 ##$##(41)##$##(62)##$##(26) Year Ended December 31,####2023####2022####2021 Interest Expense – Net############ Interest incurred on debt and other##$##480##$##277##$##227 Interest income####(197)####(117)####(40) Amortization on acquired debt####(16)####(35)####(53) Interest capitalized####(67)####(62)####(57) ##$##200##$##63##$##77


LIN Balance Sheet

(Millions of dollars) December 31,####2023####2022 Accounts Receivable######## Trade and Other receivables##$##5,175##$##4,964 Less: allowance for expected credit losses####(457)####(405) ##$##4,718##$##4,559


LIN 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 $4,667 million and $4,498 million at December 31, 2023 and December 31, 2022, respectively, and gross receivables aged greater than one year were $354 million and $321 million at December 31, 2023 and December 31, 2022, respectively. Gross other receivables were $154 million and $145 million at December 31, 2023 and December 31, 2022, respectively. Receivables aged greater than one year are generally fully reserved unless specific circumstances warrant exceptions, such as those backed by federal governments.


LIN Receivables

Provisions for expected credit losses were $175 million, $163 million and $129 million for the twelve months ended December 31, 2023, 2022 and 2021, respectively. The allowance activity in the twelve months ended December 31, 2023 related to write-offs of uncollectible amounts, net of recoveries and currency movements is not material. December 31,####2023####2022 Inventories######## Raw materials and supplies##$##614##$##567 Work in process####390####368 Finished goods####1,111####1,043 ##$##2,115##$##1,978


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December 31,####2023####2022 Prepaid and Other Current Assets######## Prepaid and other deferred charges (b)##$##583##$##597 VAT recoverable####178####225 Unrealized gains on derivatives (Note 12)####73####24 Other####93####104 ##$##927##$##950 December 31,####2023####2022 Other Long-term Assets######## Pension assets (Note 16)##$##380##$##661 Insurance contracts (c)####38####39 Long-term receivables, net (d)####163####164 Lease assets (Note 4)####938####872 Deposits####76####52 Investments carried at cost (e)####187####184 Deferred charges####60####66 Deferred income taxes (Note 5)####226####230 Unrealized gains on derivatives (Note 12)####8####4 Other####223####204 ##$##2,299##$##2,476 December 31,####2023####2022 Other Current Liabilities######## Accrued expenses##$##1,494##$##1,533 Payroll####678####614 VAT payable####253####259 Pension and postretirement (Note 16)####31####51 Interest payable####129####118 Lease liability (Note 4)####227####223 Insurance reserves####21####19 Unrealized losses on derivatives (Note 12)####41####23 Cost reduction programs and other charges (Note 3)####146####187 Other####1,136####1,055 ##$##4,156##$##4,082


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December 31,####2023####2022 Other Long-term Liabilities######## Pension and postretirement (Note 16)##$##693##$##640 Tax liabilities for uncertain tax positions (Note 5)####216####248 Tax Act liabilities (f)####80####139 Lease liability (Note 4)####715####654 Interest and penalties for uncertain tax positions (Note 5)####14####35 Insurance reserves####54####52 Asset retirement obligation####305####305 Unrealized losses on derivatives (Note 12)####6####73 Cost reduction programs and other charges (Note 3)####68####133 Contingent liabilities (Note 17)####1,148####29 Other####505####487 ##$##3,804##$##2,795 December 31,####2023####2022 Deferred Credits######## Deferred income taxes (Note 5)##$##5,749##$##5,886 Contract liabilities (Note 19)####1,049####913 ##$##6,798##$##6,799 December 31,####2023####2022 Accumulated Other Comprehensive Income (Loss)######## Cumulative translation adjustment - net of taxes:######## Americas (g)##$##(3,618)##$##(3,942) EMEA (g)####(737)####(1,249) APAC (g)####(1,037)####(835) Engineering####(93)####(241) Other####113####483 ####(5,372)####(5,784) Derivatives – net of taxes####7####62 Pension/OPEB funded status obligation (net of $60 million tax benefit in 2023 and $(54) million tax obligation in 2022) (Note 16)####(440)####(60) ##$##(5,805)##$##(5,782)


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(a)Depreciation and amortization expense in 2023 include $529 million and $462 million, respectively, of Linde AG purchase accounting impacts. In 2022, depreciation and amortization expense include $1,006 million and $474 million, respectively, of Linde AG purchase accounting impacts.


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(b) Includes estimated income tax payments of $173 million in 2023 and $164 million in 2022.


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(c) Consists primarily of insurance contracts and other investments to be utilized for non-qualified pension and OPEB obligations.


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(d) The balances at December 31, 2023 and 2022 are net of reserves of $42 million and $36 million, respectively. The amounts relate primarily to long-term notes receivable from customers in APAC, government receivables in Brazil and receivables from the sale of GIST.


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(e) Includes investments from the deconsolidation of Russian subsidiaries.


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(f) Represents tax payable related to the deemed repatriation tax pursuant to the U.S. Tax Cuts and Jobs Act of 2018. The company is required to fund the balance in annual installments through 2025.


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(g) Americas consists of currency translation adjustments primarily in Canada, Mexico, and Brazil. EMEA relates primarily to Germany, the U.K., the Netherlands, Hungary, Norway and Sweden. APAC relates primarily to China, South Korea, India and Australia.


LIN NOTE 8. PROPERTY, PLANT AND EQUIPMENT – NET

Significant classes of property, plant and equipment are as follows: (Millions of dollars) December 31,##Depreciable Lives (Yrs)####2023####2022 Production plants (primarily 15-year life) (a)##10-20##$##33,071##$##30,554 Storage tanks##15-20####5,445####4,807 Transportation equipment and other##3-15####4,050####3,434 Cylinders##10-30####4,993####4,604 Buildings##25-40####3,275####3,002 Land and improvements (b)##0-20####1,087####1,047 Construction in progress######3,404####3,239 ######55,325####50,687 Less: accumulated depreciation######(30,773)####(27,139) ####$##24,552##$##23,548


(a) Depreciable lives of production plants related to long-term customer supply contracts are generally consistent with the contract lives.


(b) Land is not depreciated.


LIN NOTE 9. GOODWILL

Changes in the carrying amount of goodwill for the years ended December 31, 2023 and 2022 were as follows: (Millions of dollars)####Americas####EMEA####APAC####Engineering####Other####Total Balance, December 31, 2021##$##9,087##$##10,278##$##4,854##$##2,496##$##323##$##27,038 Acquisitions####44####28####—####—####—####72 Foreign currency translation and other####5####(773)####(304)####(146)####(13)####(1,231) Disposals (Note 2 & Note 3)####—####(41)####—####(1)####(20)####(62) Balance, December 31, 2022####9,136####9,492####4,550####2,349####290####25,817 Acquisitions (Note 2)####550####—####3####—####—####553 Foreign currency translation and other####17####347####(54)####73####3####386 Disposals####—####(5)####—####—####—####(5) Balance, December 31, 2023##$##9,703##$##9,834##$##4,499##$##2,422##$##293##$##26,751


LIN NOTE 9. GOODWILL

Linde performs its goodwill impairment tests annually as of October 1 or more frequently if events or circumstances indicate that an impairment loss may have been incurred. For the fourth quarter 2023 test, the company applied the FASB's accounting guidance which allows the company to first assess qualitative factors to determine the extent of additional quantitative analysis, if any, that may be required to test goodwill for impairment. Based on the qualitative assessments performed, the company concluded that it was more likely than not that the fair value of each reporting unit substantially exceeded its carrying value and therefore, further quantitative analysis was not required. As a result, no impairment was recorded. There were no indicators of impairment since the annual goodwill impairment test was performed through December 31, 2023.


LIN NOTE 10. OTHER INTANGIBLE ASSETS

The following is a summary of Linde’s other intangible assets at December 31, 2023 and 2022: (Millions of dollars) For the year ended December 31, 2023####Customer Relationships####Brands/Tradenames####Other Intangible Assets####Total Cost:################ Balance, December 31, 2022##$##11,062##$##2,565##$##1,697##$##15,324 Additions####258####6####50####314 Foreign currency translation####185####38####41####264 Disposals####(3)####—####(20)####(23) Other *####(23)####—####145####122 Balance, December 31, 2023####11,479####2,609####1,913####16,001 Less: accumulated amortization:################ Balance, December 31, 2022####(1,841)####(196)####(867)####(2,904) Amortization expense (Note 7)####(423)####(36)####(91)####(550) Foreign currency translation####(36)####(1)####(24)####(61) Disposals####—####—####21####21 Other *####30####—####(138)####(108) Balance, December 31, 2023####(2,270)####(233)####(1,099)####(3,602) Net balance at December 31, 2023##$##9,209##$##2,376##$##814##$##12,399 (Millions of dollars) For the year ended December 31, 2022####Customer Relationships####Brands/Tradenames####Other Intangible Assets####Total Cost:################ Balance, December 31, 2021##$##11,859##$##2,685##$##1,629##$##16,173 Additions####19####—####53####72 Foreign currency translation####(660)####(120)####(56)####(836) Disposals (Note 2)####(140)####—####(45)####(185) Other *####(16)####—####116####100 Balance, December 31, 2022####11,062####2,565####1,697####15,324 Less: accumulated amortization:################ Balance, December 31, 2021####(1,541)####(159)####(671)####(2,371) Amortization expense (Note 7)####(419)####(42)####(110)####(571) Foreign currency translation####80####5####13####98 Disposals (Note 2)####34####—####16####50 Other *####5####—####(115)####(110) Balance, December 31, 2022####(1,841)####(196)####(867)####(2,904) Net balance at December 31, 2022##$##9,221##$##2,369##$##830##$##12,420


LIN NOTE 10. OTHER INTANGIBLE ASSETS

*Other primarily relates to the write-off of fully amortized assets and reclassifications.


LIN NOTE 10. OTHER INTANGIBLE ASSETS

There are no expected residual values related to these intangible assets. Amortization expense for the years ended December 31, 2023, 2022 and 2021 was $550 million, $571 million and $723 million, respectively. The remaining weighted-average amortization period for intangible assets is approximately 24 years.


LIN NOTE 10. OTHER INTANGIBLE ASSETS

Total estimated annual amortization expense related to finite-lived intangibles is as follows: (Millions of dollars)#### 2024##$##578 2025####528 2026####516 2027####505 2028####492 Thereafter####8,035 Total amortization related to finite-lived intangible assets####10,654 Indefinite-lived intangible assets at December 31, 2023####1,745 Net intangible assets at December 31, 2023##$##12,399


LIN NOTE 11. DEBT

The following is a summary of Linde’s outstanding debt at December 31, 2023 and 2022: (Millions of dollars)####December 31, 2023####December 31, 2022 SHORT-TERM######## Commercial paper##$##4,483##$##3,926 Other borrowings (primarily non U.S.)####230####191 Total short-term debt####4,713####4,117 LONG-TERM (a)######## (U.S. dollar denominated unless otherwise noted)######## 2.70% Notes due 2023 (c)####—####501 2.00% Euro denominated notes due 2023 (d)####—####699 5.875% GBP denominated notes due 2023 (d)####—####367 1.20% Euro denominated notes due 2024####607####588 1.875% Euro denominated notes due 2024 (b)####332####324 4.800% Notes due 2024####300####299 4.700% Notes due 2025####599####598 2.65% Notes due 2025####399####400 1.625% Euro denominated notes due 2025####550####533 3.625% Euro denominated notes due 2025 (e)####551####— 0.00% Euro denominated notes due 2026####774####751 3.20% Notes due 2026####724####724 3.434% Notes due 2026####198####198 1.652% Euro denominated notes due 2027####90####88 0.250% Euro denominated notes due 2027####827####802 1.00% Euro denominated notes due 2027####553####536 1.00% Euro denominated notes due 2028 (b)####780####749 3.375% Euro denominated notes due 2029 (e)####824####— 1.10% Notes due 2030####697####696 1.90% Euro denominated notes due 2030####114####111 1.375% Euro denominated notes due 2031####829####803 0.550% Euro denominated notes due 2032####823####798 0.375% Euro denominated notes due 2033####546####529 3.625% Euro denominated notes due 2034 (e)####714####— 1.625% Euro denominated notes due 2035####876####849 3.55% Notes due 2042####666####665 2.00% Notes due 2050####296####296 1.00% Euro denominated notes due 2051####755####731 Non U.S. borrowings####226####152 Other####10####10 ####14,660####13,797 Less: current portion of long-term debt####(1,263)####(1,599) Total long-term debt####13,397####12,198 Total debt##$##19,373##$##17,914


LIN ________________________

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


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(b)December 31, 2023 and December 31, 2022 included a cumulative $46 million and $56 million adjustment to carrying value, respectively, related to hedge accounting of interest rate swaps, including related terminations. Refer to Note 12.


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(c)In February 2023, Linde repaid $500 million of 2.70% notes that became due.


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


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(e)In June 2023, Linde issued €500 million of 3.625% notes due in 2025, €750 million of 3.375% notes due in 2029 and €650 million of 3.625% notes due in 2034.


LIN Credit Facilities

On December 7, 2022, the company and certain of its subsidiaries entered into an amended and restated unsecured revolving credit agreement (the “Five Year Credit Agreement”) with a syndicate of banking institutions. The Five Year Credit Agreement provides for total commitments of $5.0 billion, which may be increased up to $6.5 billion, subject to receipt of additional commitments and satisfaction of customary conditions. There are no financial maintenance covenants contained within the Credit Agreement. The revolving credit facility expires on December 7, 2027 with the option to request two one-year extensions of the expiration date.


LIN Credit Facilities

In addition, on December 6, 2023, the company and certain of its subsidiaries entered into an unsecured 364-day revolving credit agreement (the “364-Day Credit Agreement” and, together with the Five Year Credit Agreement, the “Credit Agreements”) with a syndicate of banking institutions. The 364-Day Credit Agreement provides for total commitments of $1.5 billion. There are no financial maintenance covenants contained within the Credit Agreement. The 364-Day Credit Agreement expires on December 4, 2024 with the option to elect to have the entire principal balances outstanding under the Credit Agreement converted into non-revolving term loans, which will be due and payable one year after the commitment termination date.


LIN Credit Facilities

No borrowings were outstanding under the Credit Agreements as of December 31, 2023.


LIN Other Debt Information

The weighted-average interest rates of short-term borrowings outstanding were 4.8% and 3.2% as of December 31, 2023 and 2022, respectively.


LIN Other Debt Information

Expected maturities of long-term debt are as follows: (Millions of dollars)#### 2024##$##1,263 2025####2,113 2026####1,733 2027####1,500 2028####835 Thereafter####7,216 ##$##14,660


LIN Other Debt Information

As of December 31, 2023, the amount of Linde's assets pledged as collateral was immaterial.


LIN Other Debt Information

See Note 13 for the fair value information related to debt.


LIN NOTE 12. FINANCIAL INSTRUMENTS

In its normal operations, Linde is exposed to market risks relating to fluctuations in interest rates, foreign currency exchange rates, 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.


LIN NOTE 12. FINANCIAL INSTRUMENTS

There are three 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.


LIN NOTE 12. FINANCIAL INSTRUMENTS

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.


LIN NOTE 12. FINANCIAL INSTRUMENTS

Counterparties to Linde’s derivatives are major banking institutions with credit ratings of investment grade or better. The company has Credit Support Annexes ("CSAs") in place for certain entities with their principal counterparties to minimize potential default risk and to mitigate counterparty risk. Under the CSAs, the fair values of derivatives for the purpose of interest rate and currency management are collateralized with cash on a regular basis. As of December 31, 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.


LIN NOTE 12. FINANCIAL INSTRUMENTS

The following table is a summary of the notional amount and fair value of derivatives outstanding at December 31, 2023 and 2022 for consolidated subsidiaries: ######################Fair Value########## (Millions of dollars)######Notional Amounts##########Assets (a)############Liabilities (a)#### December 31,####2023######2022####2023######2022######2023######2022 Derivatives Not Designated as Hedging Instruments:################################ Currency contracts:################################ Balance sheet items##$##4,567####$##3,056##$##46####$##13####$##26####$##7 Forecasted transactions####335######449####11######9######6######9 Cross-currency swaps####—######42####—######—######—######1 Commodity contracts####N/A######N/A####—######—######—######— Total##$##4,902####$##3,547##$##57####$##22####$##32####$##17 Derivatives Designated as Hedging Instruments:################################ Currency contracts:################################ Forecasted transactions##$##749####$##323##$##20####$##6####$##4####$##5 Commodity contracts####N/A######N/A####3######—######7######4 Interest rate swaps####1,214######856####1######—######4######70 Total Hedges##$##1,963####$##1,179##$##24####$##6####$##15####$##79 Total Derivatives##$##6,865####$##4,726##$##81####$##28####$##47####$##96


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(a) Amounts at December 31, 2023 and 2022 included current assets of $73 million and $24 million, which are recorded in prepaid and other current assets; long-term assets of $8 million and $4 million, which are recorded in other long-term assets; current liabilities of $41 million and $23 million, which are recorded in other current liabilities; and long-term liabilities of $6 million and $73 million, which are recorded in other long-term liabilities.


LIN 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.


LIN 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 (loss) with deferred amounts reclassified to earnings over the same time period as the income statement impact of the associated purchase. For forecasted transactions that do not qualify for cash flow hedging relationships, fair value adjustments are recorded directly to earnings. Linde is hedging forecasted transactions for a maximum period of three years.


LIN 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.


LIN Commodity Contracts

Commodity contracts are entered into to manage the exposure to fluctuations in commodity prices, which arise in the normal course of business from its procurement transactions. To reduce the extent of this risk, Linde enters into a limited number of electricity, natural gas, and propane gas derivatives. For forecasted transactions that are designated as cash flow hedges, fair value adjustments are recorded to accumulated other comprehensive income (loss) with deferred amounts reclassified to earnings over the same time period as the income statement impact of the associated purchase. Linde is hedging commodity contracts for a maximum period of three years.


LIN Net Investment Hedges

As of December 31, 2023, Linde has €10.7 billion ($11.7 billion) Euro-denominated notes and intercompany loans and ¥4.7 billion ($0.7 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 cumulative translation adjustment component of accumulated other comprehensive income (loss) in the consolidated balance sheet is $45 million (deferred loss of $305 million in the consolidated statement of comprehensive income for the year ended December 31, 2023).


LIN Net Investment Hedges

As of December 31, 2023, exchange rate movements relating to previously designated hedges that remain in accumulated other comprehensive income (loss) is a gain of $56 million. These movements will remain in accumulated other comprehensive income (loss), until appropriate, such as upon sale or liquidation of the related foreign operations at which time amounts will be reclassified to the consolidated statements of income.


LIN 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 11). Certain interest rate swaps in a designated fair value hedge relationship were terminated during 2023. Upon termination, adjustments are no longer recorded to the hedged items for changes in respective fair values attributable to the risk being hedged. The unrecognized


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loss on the terminated interest rate swaps is shown as a discount to long-term debt of $56 million, and will be amortized to interest expense over the remaining life of the debt, which extends through April 2028.


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In addition, as of December 31, 2023, Linde is using interest rate swaps with a notional value of €1 billion to hedge the variability of future cash flows of forecasted transactions due to interest rate risk and has designated this as a cash flow hedge.


LIN Derivatives Impact on Consolidated Statements of Income

The following table summarizes the impact of the company's derivatives on the consolidated statements of income: (Millions of dollars)########Amount of Pre-Tax Gain (Loss) Recognized in Earnings *#### December 31,####2023####2022####2021 Derivatives Not Designated as Hedging Instruments############ Currency contracts:############ Balance sheet items:############ Debt-related##$##91##$##12##$##42 Other balance sheet items####(1)####8####(5) Total##$##90##$##20##$##38


* The gains (losses) on balance sheet items are offset by gains (losses) recorded on the underlying hedged assets and liabilities. Accordingly, the gains (losses) for the derivatives and the underlying hedged assets and liabilities related to debt items are recorded in the consolidated statements of income as interest expense-net. Other balance sheet items and anticipated net income gains (losses) are recorded in the consolidated statements of income as other income (expenses)-net.


The amounts of gain or loss recognized in accumulated other comprehensive income (loss) and reclassified to the consolidated statement of income was not material for the years ended December 31, 2023, 2022, and 2021. Net impacts expected to be reclassified to earnings during the next twelve months are also not material.


LIN NOTE 13. FAIR VALUE DISCLOSURES

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


LIN NOTE 13. FAIR VALUE DISCLOSURES

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


LIN NOTE 13. FAIR VALUE DISCLOSURES

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


LIN NOTE 13. FAIR VALUE DISCLOSURES

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


LIN NOTE 13. FAIR VALUE DISCLOSURES

Assets and Liabilities Measured at Fair Value on a Recurring Basis


LIN NOTE 13. FAIR VALUE DISCLOSURES

The following table summarizes assets and liabilities measured at fair value on a recurring basis at December 31, 2023 and 2022: ################Fair Value Measurements Using############## (Millions of dollars)######Level 1##########Level 2##########Level 3#### ####2023######2022####2023######2022####2023######2022 Assets############################## Derivative assets##$##—####$##—##$##81####$##28##$##—####$##— Investments and securities *####16######20####—######—####12######13 Total##$##16####$##20##$##81####$##28##$##12####$##13 Liabilities############################## Derivative liabilities##$##—####$##—##$##47####$##96##$##—####$##—


LIN NOTE 13. FAIR VALUE DISCLOSURES

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


LIN NOTE 13. FAIR VALUE DISCLOSURES

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


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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.


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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.


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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 Level 2 of the fair value hierarchy. At December 31, 2023, the estimated fair value of Linde’s long-term debt portfolio was $13,337 million versus a carrying value of $14,660 million. At December 31, 2022 the estimated fair value of Linde’s long-term debt portfolio was $11,994 million versus a carrying value of $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.


LIN Linde plc Shareholders’ 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 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 approximate $15 billion decrease in treasury shares and retained earnings in Shareholders' Equity. On November 7, 2023, Linde plc transferred the listing of its ordinary shares from the NYSE to the Nasdaq, and continued trading under the ticker symbol "LIN".


LIN Linde plc Shareholders’ Equity

At December 31, 2023 and 2022, Linde has total authorized share capital of €1,825,000 divided into 1,750,000,000 ordinary shares of €0.001 each, 25,000 A ordinary shares of €1.00 each, 25,000 deferred shares of €1.00 each and 25,000,000 preferred shares of €0.001 each.


LIN Linde plc Shareholders’ Equity

At December 31, 2023 there were 490,766,972 and 482,445,145 of Linde plc ordinary shares issued and outstanding, respectively. At December 31, 2023 there were no shares of A ordinary shares, deferred shares or preferred shares issued or outstanding.


LIN Linde plc Shareholders’ Equity

At December 31, 2022 there were 552,012,862 and 492,457,627 of Linde plc ordinary shares issued and outstanding, respectively. At December 31, 2022, there were no shares of A ordinary shares, deferred shares or preferred shares issued or outstanding.


LIN Linde plc Shareholders’ Equity

Linde’s Board of Directors may from time to time authorize the issuance of one or more series of preferred stock and, in connection with the creation of such series, determine the characteristics of each such series including, without limitation, the preference and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions of the series.


LIN Other Linde plc Ordinary Share and Treasury Share Transactions

Linde may issue new ordinary shares for dividend reinvestment and stock purchase plans and employee savings and incentive plans. No new ordinary shares were issued in 2023, 2022 and 2021.


On January 22, 2019 the company’s board of directors approved the additional repurchase of $6.0 billion of its ordinary shares under which Linde had repurchased 24,847,354 shares through December 31, 2021. Linde completed the repurchases under this program in the first quarter of 2021.


On January 25, 2021 the company's board of directors approved the additional repurchase of $5.0 billion of its ordinary shares under which Linde had repurchased 16,662,678 shares through December 31, 2022. Linde completed the repurchases under this program in the first quarter of 2022.


On February 28, 2022, the company's board of directors authorized a new share repurchase program for up to $10.0 billion of its ordinary shares ("2022 program") under which Linde had repurchased 26,411,514 shares through December 31, 2023. This program expires on July 31, 2024.


On October 23, 2023, the company's board of directors approved a new share repurchase program for up to $15.0 billion of its ordinary shares ("2023 program") under which Linde has no repurchases as of December 31, 2023. This program will


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terminate on the earlier of the date as the maximum authority under the 2023 program is reached or the board terminates the 2023 program.


LIN Noncontrolling Interests

Noncontrolling interest ownership changes are presented within the consolidated statements of equity. 2022 includes the impact of deconsolidating the company's Russian gas and engineering business entities (see Note 3).


LIN Redeemable Noncontrolling Interests

Noncontrolling interests with redemption features, such as put/sell options, that are not solely within the company’s control (“redeemable noncontrolling interests”) are reported separately in the consolidated balance sheets at the greater of carrying value or redemption value. For redeemable noncontrolling interests that are not yet exercisable, Linde calculates the redemption value by accreting the carrying value to the redemption value over the period until exercisable. If the redemption value is greater than the carrying value, any increase is adjusted directly to retained earnings and does not impact net income. At December 31, 2023 and 2022, the redeemable noncontrolling interest balance includes an industrial gas business in EMEA where the noncontrolling shareholders have put options.


LIN NOTE 15. SHARE-BASED COMPENSATION

Share-based compensation expense was $141 million in 2023 ($107 million and $128 million in 2022 and 2021, respectively). The related income tax benefit recognized was $88 million in 2023 ($64 million and $64 million in 2022 and 2021, respectively). The expense was primarily recorded in selling, general and administrative expenses and no share-based compensation expense was capitalized.


LIN Summary of Plans

The 2021 Linde plc Long Term Incentive Plan (the “2021 Plan") was adopted by the Board of Directors and shareholders of Linde plc on July 26, 2021. The 2021 Plan permits awards of stock options, stock appreciation rights, restricted stock and restricted stock units, performance-based stock units and other equity awards to eligible officer and non-officer employees and non-employee directors of the company and its affiliates. As of December 31, 2023, 7,661,431 shares remained available for equity grants under the 2021 Plan, of which 2,452,443 shares may be granted as awards other than options or stock appreciation rights.


LIN Summary of Plans

Exercise prices for options granted under the 2021 Plan may not be less than the closing market price of the company’s ordinary shares on the date of grant and granted options may not be re-priced or exchanged without shareholder approval. Options granted under the 2021 Plan subject only to time vesting requirements may become partially exercisable after a minimum of one year after the date of grant but may not become fully exercisable until at least three years have elapsed from the date of grant, and all options have a maximum duration of ten years.


LIN Summary of Plans

In order to satisfy option exercises and other equity grants, the company may issue authorized but previously unissued shares or it may issue treasury shares.


LIN Stock Option Fair Value

The company utilizes the Black-Scholes Options-Pricing Model to determine the fair value of stock options consistent with that used in prior years. Management is required to make certain assumptions with respect to selected model inputs, including anticipated changes in the underlying stock price (i.e., expected volatility) and option exercise activity (i.e., expected life). Expected volatility is based on the historical volatility of the company’s stock over the most recent period commensurate with the estimated expected life of the company’s stock options and other factors. The expected life of options granted, which represents the period of time that the options are expected to be outstanding, is based primarily on historical exercise experience. The expected dividend yield is based on the company’s most recent history and expectation of dividend payouts. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for a period commensurate with the estimated expected life. If factors change and result in different assumptions in future periods, the stock option expense that the company records for future grants may differ significantly from what the company has recorded in the current period.


LIN Stock Option Fair Value

The weighted-average fair value of options granted during 2023 was $83.69 ($45.07 in 2022 and $37.80 in 2021) based on the Black-Scholes Options-Pricing model. The increase in the grant date fair value year-over-year is primarily attributable to the increase in the stock price.


LIN Stock Option Fair Value

The following weighted-average assumptions were used to value the grants in 2023, 2022 and 2021: Year Ended December 31,##2023####2022####2021## Dividend yield##1.4##%##1.7##%##1.7##% Volatility##22.0##%##20.6##%##18.4##% Risk-free interest rate##4.23##%##1.70##%##1.10##% Expected term years##5####5####6##


LIN Stock Option Fair Value

The following table summarizes option activity under the plans as of December 31, 2023 and changes during the period then ended (averages are calculated on a weighted basis; life in years; intrinsic value expressed in millions): Table of Contents Activity##Number of Options (000’s)####Average Exercise Price##Average Remaining Life####Aggregate Intrinsic Value Outstanding at January 1, 2023##6,720##$##164.03###### Granted##361####354.16###### Exercised##(1,225)####137.78###### Cancelled or expired##(31)####311.86###### Outstanding at December 31, 2023##5,825##$##180.58##5.0##$##1,341 Exercisable at December 31, 2023##4,926##$##159.18##4.4##$##1,239


LIN Stock Option Fair Value

The aggregate intrinsic value represents the difference between the company’s closing stock price of $410.71 as of December 31, 2023 and the exercise price multiplied by the number of in the money options outstanding as of that date. The total intrinsic value of stock options exercised during 2023 was $283 million ($176 million and $294 million in 2022 and 2021, respectively).


LIN Stock Option Fair Value

Cash received from option exercises under all share-based payment arrangements for 2023 was $33 million ($36 million and $50 million in 2022 and 2021, respectively). The cash tax benefit realized from share-based compensation totaled $86 million for 2023 ($61 million and $64 million cash tax benefit in 2022 and 2021, respectively).


LIN Stock Option Fair Value

As of December 31, 2023, $17 million of unrecognized compensation cost related to non-vested stock options is expected to be recognized over a weighted-average period of approximately 1 year.


LIN Performance-Based and Restricted Stock Unit Awards

In 2023, the company granted 341,915 performance-based stock unit awards under the 2021 Plan to senior management that vest, subject to the attainment of pre-established minimum performance criteria, principally on the third anniversary of their date of grant. These awards are tied to either after tax return on capital ("ROC") performance or relative total shareholder return ("TSR") performance versus that of a blended group of companies that is comprised of the S&P 500, excluding the Financial sector, and Eurofirst 300. The actual number of shares issued in settlement of a vested award can range from zero to 200 percent of the target number of shares granted based upon the company’s attainment of specified performance targets at the end of a three-year period. Compensation expense related to these awards is recognized over the three-year performance period based on the fair value of the closing market price of the company’s ordinary shares on the date of the grant and the estimated performance that will be achieved. Compensation expense for ROC awards will be adjusted during the three-year performance period based upon the estimated performance levels that will be achieved. TSR awards are measured at their grant date fair value and not subsequently re-measured. The number of performance-based stock unit awards granted in 2023 includes an increase of 201,120 stock units to the target number of performance-based awards originally granted in 2020, as these awards achieved a higher payout factor upon completion of the three-year performance period.


The weighted-average fair value of ROC awards granted in 2023 was $340.80 ($257.63 in 2022 and $241.10 in 2021). These fair values are based on the closing market price of Linde's ordinary shares on the grant date adjusted for dividends that will not be paid during the vesting period.


The weighted-average fair value of TSR awards granted in 2023 was $489.33 ($301.42 in 2022 and $301.04 in 2021) and was estimated using a Monte Carlo simulation performed as of the grant date.


There were 160,839 restricted stock units granted to employees by Linde during 2023. The weighted-average fair value of restricted stock units granted during 2023 was $332.69 ($260.27 in 2022 and $242.60 in 2021). These fair values are based on the closing market price of Linde's ordinary shares on the grant date adjusted for dividends that will not be paid during the vesting period. Compensation expense related to the restricted stock units is recognized over the vesting period.


The following table summarizes non-vested performance-based and restricted stock unit award activity as of December 31, 2023 and changes during the period then ended (shares based on target amounts, averages are calculated on a weighted basis): Table of Contents ####Performance-Based########Restricted Stock#### ##Number of Shares (000’s)######Average Grant Date Fair Value##Number of Shares (000’s)######Average Grant Date Fair Value Non-vested at January 1, 2023##583####$##226.04##646####$##190.33 Granted##342######385.10##161######332.69 Vested##(340)######174.99##(154)######176.06 Cancelled and Forfeited##(13)######156.14##(15)######163.12 Non-vested at December 31, 2023##572####$##281.11##638####$##232.15


There are approximately 11 thousand performance-based stock units and 17 thousand restricted stock units that are non-vested at December 31, 2023 which will be settled in cash due to foreign regulatory limitations. The liability related to these grants reflects the current estimate of performance that will be achieved and the current share price.


As of December 31, 2023, $48 million of unrecognized compensation cost related to performance-based awards and $42 million of unrecognized compensation cost related to the restricted stock unit awards is expected to be recognized primarily through the first quarter of 2026.


LIN NOTE 16. RETIREMENT PROGRAMS

Defined Benefit Pension Plans - U.S.


LIN NOTE 16. RETIREMENT PROGRAMS

The Linde retirement plans are non-contributory defined benefit plans covering eligible employees and its participating affiliates. Effective July 1, 2002, the Linde U.S. Pension Plan was amended to give participating employees a one-time irrevocable choice between a traditional benefit (the “Traditional Design”) and an account-based benefit (the “Account-Based Design”). The Traditional Design pays a monthly benefit based on years of service and average pay during the last years of the participant’s career with Linde. The Account-Based Design gives participants annual pay credits equal to 4% of eligible compensation, plus interest credits based on long-term treasury rates on the accumulated account balance. This new formula applies to all new employees hired after April 30, 2002 into businesses adopting this plan. The U.S. pension plan assets are comprised of a diversified mix of investments, including corporate equities, government securities and corporate debt securities. Linde has several plans that provide supplementary retirement benefits primarily to higher level employees that are unfunded and are nonqualified for federal tax purposes. Pension coverage for employees of certain of Linde’s non-U.S. subsidiaries generally is provided by those companies through separate plans. Obligations under such plans are primarily provided for through diversified investment portfolios, with some smaller plans provided for under insurance policies or by book reserves.


LIN NOTE 16. RETIREMENT PROGRAMS

Defined Benefit Pension Plans - Non-U.S.


LIN NOTE 16. RETIREMENT PROGRAMS

Linde has Non-U.S., defined benefit commitments primarily in Germany and the U.K that include pension plan assets comprised of a diversified mix of investments. The defined benefit commitments in Germany relate to old age pensions, invalidity pensions and surviving dependents pensions. These commitments also take into account vested rights for periods of service prior to January 1, 2002 based on earlier final-salary pension plan rules. In addition, there are direct commitments in respect of the salary conversion scheme for the form of cash balance plans. The resulting pension payments are calculated on the basis of an interest guarantee and the performance of the corresponding investment. There are no minimum funding requirements. The pension obligations in Germany are partly funded by a Contractual Trust Agreement (CTA). Defined benefit commitments in the U.K. prior to July 1, 2003 are earnings-related and dependent on the period of service. Such commitments relate to old age pensions, invalidity pensions and surviving dependents pensions. Beginning in April 1, 2011, the amount of future increases in inflation-linked pensions and of increases in pensionable emoluments was restricted.


LIN Multi-employer Pension Plans

In the United States Linde participates in eight multi-employer defined benefit pension plans ("MEPs"), pursuant to the terms of collective bargaining agreements, that cover approximately 200 union-represented employees. The collective bargaining agreements expire on different dates through 2028. In connection with such agreements, the company is required to make periodic contributions to the MEPs in accordance with the terms of the respective collective bargaining agreements. Linde’s participation in these plans is not material either at the plan level or in the aggregate. For all MEPs, Linde’s contributions were significantly less than 1% of the total contributions to each plan for 2022 and 2021. Total 2023 contributions were not yet available from the MEPs.


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Linde has obtained the most recently available Pension Protection Act ("PPA") annual funding notices from the Trustees of the MEPs. As of December 31, 2023, there were two Red Zone plans, deemed to be in "critical" or "critical and declining" status that have implemented financial improvement or rehabilitation plans. Linde does not currently anticipate significant future obligations due to the funding status of these plans and any such obligation would be immaterial. If Linde determined it was probable that it would withdraw from an MEP, the company would record a liability for its portion of the MEP’s unfunded pension obligations, as calculated at that time. Historically, such withdrawal payments have not been significant.


LIN Defined Contribution Plans

Linde’s U.S. employees are eligible to participate in defined contribution savings plans offered by their applicable business. Employee contribution percentages vary by plan and are subject to the maximum allowable by IRS regulations. The cost for these defined contribution plans was $59 million in 2023, $56 million in 2022 and $51 million in 2021 (these costs are not included in the tables that follow).


LIN Defined Contribution Plans

The defined contribution plans include a non-leveraged employee stock ownership plan ("ESOP") which covers all employees participating in this plan. The collective number of shares of Linde ordinary shares in the ESOP totaled 1,660,694 at December 31, 2023.


LIN Defined Contribution Plans

Certain non-U.S. subsidiaries of the company also sponsor defined contribution plans where contributions are determined under various formulas. The expense for these plans was $60 million in 2023, $80 million in 2022 and $101 million in 2021 (these expenses are not included in the tables that follow).


LIN Postretirement Benefits Other Than Pensions (OPEB)

Linde provides health care and life insurance benefits to certain eligible retired employees. These benefits are provided through various insurance companies and healthcare providers. The company does not currently fund its postretirement benefits obligations. Linde’s retiree plans may be changed or terminated by Linde at any time for any reason with no liability to current or future retirees.


Linde uses a measurement date of December 31 for its pension and other post-retirement benefit plans.


LIN Pension and Postretirement Benefit Costs

The components of net pension and postretirement benefits other than pension ("OPEB") costs for 2023, 2022 and 2021 are shown in the table below: (Millions of dollars)########Year Ended December 31,#### ####2023####2022####2021 Amount recognized in Operating Profit############ Service cost##$##84##$##127##$##157 Amount recognized in Net pension and OPEB cost (benefit), excluding service cost############ Interest cost####373####201####154 Expected return on plan assets####(523)####(518)####(521) Net amortization and deferral####(30)####74####171 Settlement charges (a)####16####6####4 ##$##(164)##$##(237)##$##(192) Net periodic benefit cost (benefit)##$##(80)##$##(110)##$##(35)


(a) Settlement charges were triggered by lump sum benefit payments.


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Changes in the benefit obligation and plan assets for Linde’s pension and OPEB programs, including reconciliation of the funded status of the plans to amounts recorded in the consolidated balance sheet, as of December 31, 2023 and 2022 are shown below. (Millions of dollars)############Year Ended December 31,########## ######2023############2022#### ####U.S.######Non-U.S.######U.S.######Non-U.S. Change in Benefit Obligation ("PBO")###################### Benefit obligation, January 1##$##2,129####$##5,586####$##2,719####$##9,398 Service cost####25######59######34######93 Interest cost####105######268######60######141 Participant contributions####11######18######11######17 Actuarial loss (gain)####100######532######(528)######(2,972) Benefits paid####(162)######(324)######(158)######(296) Plan settlement####(21)######(14)######(9)######(8) Foreign currency translation and other changes####—######260######—######(787) Benefit obligation, December 31##$##2,187####$##6,385####$##2,129####$##5,586 Accumulated benefit obligation ("ABO")##$##2,037####$##6,300####$##1,982####$##5,508 Change in Plan Assets###################### Fair value of plan assets, January 1##$##1,891####$##5,794####$##2,448####$##7,968 Actual return on plan assets####300######365######(421)######(1,302) Company contributions####—######46######—######51 Participant contributions####—######18######—######17 Benefits paid from plan assets####(141)######(320)######(136)######(248) Foreign currency translation and other changes####—######275######—######(692) Fair value of plan assets, December 31##$##2,050####$##6,178####$##1,891####$##5,794 Funded Status, End of Year##$##(137)####$##(207)####$##(238)####$##208 Recorded in the Balance Sheet (Note 7)###################### Other long-term assets##$##19####$##361####$##13####$##648 Other current liabilities####(17)######(14)######(38)######(13) Other long-term liabilities####(139)######(554)######(213)######(427) Net amount recognized, December 31##$##(137)####$##(207)####$##(238)####$##208 Amounts recognized in accumulated other comprehensive income (loss) consist of:###################### Net actuarial loss (gain)##$##290####$##219####$##357####$##(343) Prior service cost (credit)####(10)######1######(12)######4 Deferred tax obligation (benefit) (Note 7)####(67)######7######(85)######139 Amount recognized in accumulated other comprehensive income (loss) (Note 7)##$##213####$##227####$##260####$##(200)


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Comparative funded status information as of December 31, 2023 and 2022 for select non-U.S. pension plans is presented in the table below as the benefit obligations of these plans are considered to be significant relative to the total benefit obligation: ####United Kingdom####Germany####Other Non-U.S.####Total Non-U.S. (Millions of dollars)####2023####2023####2023####2023 Benefit obligation, December 31##$##3,616##$##1,684##$##1,085##$##6,385 Fair value of plan assets, December 31####3,858####1,370####950####6,178 Funded Status, End of Year##$##242##$##(314)##$##(135)##$##(207) ####United Kingdom####Germany####Other Non-U.S.####Total Non-U.S. (Millions of dollars)####2022####2022####2022####2022 Benefit obligation, December 31##$##3,100##$##1,485##$##1,001##$##5,586 Fair value of plan assets, December 31####3,625####1,285####884####5,794 Funded Status, End of Year##$##525##$##(200)##$##(117)##$##208


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The changes in plan assets and benefit obligations recognized in other comprehensive income in 2023 and 2022 are as follows: ######Pensions#### (Millions of dollars)####2023######2022 Current year net actuarial losses (gains)*##$##480####$##(1,259) Amortization of net actuarial gains (losses)####29######(75) Amortization of prior service credits (costs)####1######1 Pension settlements####(16)######(6) Foreign currency translation and other changes####—######(90) Total recognized in other comprehensive income##$##494####$##(1,429)


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* Pension net actuarial losses in 2023 are largely driven by the decrease in the discount rate environment resulting in actuarial losses from a higher PBO, which is partially offset by favorable plan asset experience for non-U.S plans. The U.S. plan derived a benefit from the actual return on plan assets. In 2022, the actuarial gains were largely driven by the significant increase in the discount rate environment resulting in actuarial gains from a lower PBO, which is partially offset by unfavorable plan asset experience for both non-U.S. and U.S. plans.


LIN ________________________

The following table provides information for pension plans where the accumulated benefit obligation exceeds the fair value of plan assets: (Millions of dollars) Year Ended December 31,############Pensions########## ######2023############2022#### ####U.S.######Non-U.S.######U.S.######Non-U.S. Accumulated benefit obligation ("ABO")##$##1,952####$##1,880####$##1,895####$##1,848 Fair value of plan assets##$##1,945####$##1,385####$##1,791####$##1,472


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The following table provides information for pension plans where the projected benefit obligation exceeds the fair value of plan assets: (Millions of dollars) Year Ended December 31,############Pensions########## ######2023############2022#### ####U.S.######Non-U.S.######U.S.######Non-U.S. Projected benefit obligation ("PBO")##$##2,012####$##1,932####$##1,948####$##1,901 Fair value of plan assets##$##1,945####$##1,390####$##1,791####$##1,478


LIN Assumptions

The assumptions used to determine benefit obligations are as of the respective balance sheet dates and the assumptions used to determine net benefit cost are as of the previous year-end, as shown below: ############Pensions########## ######U.S.############Non-U.S.#### ##2023######2022######2023######2022## Weighted average assumptions used to determine benefit obligations at December 31,###################### Discount rate##5.03##%####5.35##%####4.27##%####4.58##% Interest crediting rate##4.03##%####4.02##%####1.70##%####2.13##% Rate of increase in compensation levels##3.50##%####3.25##%####2.58##%####2.59##% Weighted average assumptions used to determine net periodic benefit cost for years ended December 31,###################### Discount rate##5.35##%####2.78##%####4.58##%####1.82##% Interest crediting rate##4.02##%####2.06##%####2.13##%####1.03##% Rate of increase in compensation levels##3.25##%####3.25##%####2.59##%####2.55##% Expected long-term rate of return on plan assets (1)##7.00##%####7.00##%####5.64##%####5.60##%