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Linde plc

Linde plcLINEarnings & Financial Report

Nasdaq · Materials · Industrial Inorganic Chemicals

Linde is a global multinational chemical company and the world's largest industrial gas supplier by market share and revenue. Founded by German scientist and engineer Carl von Linde in 1879 in Wiesbaden, Germany, the company is now headquartered in Woking, United Kingdom, and registered in Ireland as Linde plc. Linde plc was formed in 2018 through the merger of Linde AG and Praxair, which was founded in 1907 in the United States as Linde Air Products Company.

What changed in Linde plc's 10-K — 2022 vs 2023

Top changes in Linde plc's 2023 10-K

209 paragraphs added · 211 removed · 183 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

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Raw Materials and Energy Costs – Energy is the single largest cost item in the production and distribution of industrial gases. Most of Linde’s energy requirements are in the form of electricity, natural gas and diesel fuel for distribution. The company mitigates electricity, natural gas, and hydrocarbon price fluctuations contractually through pricing formulas, surcharges, and cost pass–through and tolling arrangements.
Raw Materials and Energy Costs – Energy is the single largest cost item in the production and distribution of industrial gases. Most of Linde’s energy requirements are in the form of electricity, natural gas and diesel fuel for distribution. The company mitigates electricity, natural gas, and hydrocarbon price fluctuations contractually through pricing formulas, surcharges, cost pass–through and tolling arrangements.
Diversity and inclusion are line management responsibilities and Linde seeks competitive advantage through proactive management of its talent pipeline and recruiting processes. Linde provides equal employment opportunity, and recruits, hires, promotes and compensates people based solely on their performance and ability. Employees receive a competitive salary and variable compensation components based on performance and job level.
Diversity, equity and inclusion are line management responsibilities and Linde seeks competitive advantage through proactive management of its talent pipeline and recruiting processes. Linde provides equal employment opportunity, and recruits, hires, promotes and compensates people based solely on their performance and ability. Employees receive a competitive salary and variable compensation components based on performance and job level.
Engineering Linde’s Engineering business has a global presence, with its focus on market segments such as air separation, hydrogen, synthesis, olefin and natural gas plants. The company utilizes its extensive process engineering know-how in the planning, design and construction of highly efficient turnkey plants for the production and processing of gases.
Engineering Linde’s Engineering business has a global presence, with its focus on market segments such as air separation, hydrogen, synthesis, olefin and natural gas plants. The company utilizes its extensive process engineering know-how in the planning, design and construction of highly efficient plants for the production and processing of gases.
The global head of Human Resources reports to the Chief Executive Officer ("CEO"). A global leader of Diversity and Inclusion reports to the head of Human Resources. Linde has aligned diversity and inclusion with its business strategies and implemented diversity action planning into business process and performance management.
The global head of Human Resources reports to the Chief Executive Officer ("CEO"). A global leader of Diversity, Equity and Inclusion reports to the head of Human Resources. Linde has aligned diversity and inclusion with its business strategies and implemented diversity action planning into business process and performance management.
The supply of energy has not been a significant issue in the geographic areas where the company conducts business. However, energy availability and price is unpredictable and may pose unforeseen future risks. For carbon dioxide, carbon monoxide, helium, hydrogen and specialty gases, raw materials are largely purchased from outside sources.
The supply of energy has not typically been a significant issue in the geographic areas where the company conducts business. However, energy availability and price is unpredictable and may pose future risks. For carbon dioxide, carbon monoxide, helium, hydrogen and specialty gases, raw materials are largely purchased from outside sources.
Guillermo Bichara, 48, is Executive Vice President and Chief Legal Officer. He previously served as Praxair’s Vice President and General Counsel. Mr. Bichara joined the company in 2006, first as Director of Legal Affairs at Praxair Mexico before being promoted to Vice President and General Counsel of Praxair Asia.
Guillermo Bichara, 49, is Executive Vice President and Chief Legal Officer. He previously served as Praxair’s Vice President and General Counsel. Mr. Bichara joined the company in 2006, first as Director of Legal Affairs at Praxair Mexico before being promoted to Vice President and General Counsel of Praxair Asia.
The Human Capital Committee assists the Board in its oversight of Linde’s compensation policies and programs, particularly in regard to reviewing executive compensation for Linde’s executive officers. The Human Capital Committee also periodically reviews the company’s management development and succession programs, diversity policies and objectives, and the associated programs to achieve those objectives.
The Human Capital Committee assists the Board in its oversight of Linde’s compensation policies and programs, particularly in regard to reviewing executive compensation for Linde’s executive officers. The Human Capital Committee also annually reviews the company’s management development and succession programs, diversity policies and objectives, and the associated programs to achieve those objectives.
The company also has equity method investments operating in Europe, Asia, Africa, the Middle East, and North America. Linde’s non-U.S. business is subject to risks customarily encountered in non-U.S. operations, including fluctuations in foreign currency exchange rates, import and export controls, and other economic, political and regulatory policies of local governments. Also, see Item 1A. “Risk Factors” and Item 7A.
The company also has equity method investments operating in Europe, Asia, and the Middle East. Linde’s non-U.S. business is subject to risks customarily encountered in non-U.S. operations, including fluctuations in foreign currency exchange rates, import and export controls, and other economic, political and regulatory policies of local governments. Also, see Item 1A. “Risk Factors” and Item 7A.
Research and development is primarily conducted at Munich, Germany, Tonawanda, New York, Burr Ridge, Illinois and Shanghai, China. 5 Table of Contents Patents and Trademarks – Linde owns or licenses a large number of patents that relate to a wide variety of products and processes. Linde’s patents expire at various times over the next 20 years.
Research and development is primarily conducted in Pullach, Germany, Tonawanda, New York, Burr Ridge, Illinois and Shanghai, China. 5 Table of Contents Patents and Trademarks – Linde owns or licenses a large number of patents that relate to a wide variety of products and processes. Linde’s patents expire at various times over the next 20 years.
Inventory obsolescence is not material to Linde’s business. Customers – Linde is not dependent upon a single customer or a few customers. International – Linde is a global enterprise with approximately 68% of its 2022 sales outside of the United States.
In ventory obsolescence is not material to Linde’s business. Customers – Linde is not dependent upon a single customer or a few customers. International – Linde is a global enterprise with approximately 68% of its 2023 sales outside of the United States.
White, 50, became Executive Vice President and Chief Financial Officer of Linde in October 2018. He previously served as the Senior Vice President and Chief Financial Officer of Praxair, Inc. since January 1, 2014. Prior to 7 Table of Contents this, Mr. White was President of Praxair Canada from 2011 to 2014.
White, 51, became Executive Vice President and Chief Financial Officer of Linde in October 2018. He previously served as the Senior Vice President and Chief Financial Officer of Praxair, Inc. since January 1, 2014. Prior to this, Mr. White was President of Praxair Canada from 2011 to 2013.
Linde serves a diverse group of industries including healthcare, chemicals and energy, manufacturing, metals and mining, food and beverage, and electronics. Linde’s sales were $33,364 million, $30,793 million, and $27,243 million for 2022, 2021, and 2020, respectively.
Linde serves a diverse group of industries including healthcare, chemicals and energy, manufacturing, metals and mining, food and beverage, and electronics. Linde’s sales were $32,854 million, $33,364 million, and $30,793 million for 2023, 2022, and 2021, respectively.
In addition, the public may read and copy any materials filed with the SEC free of charge at the SEC’s website, www.sec.gov, that contains reports, proxy information statements and other information regarding issuers that file electronically. Executive Officers – The following Executive Officers have been elected by the Board of Directors and serve at the pleasure of the Board.
Information on the company’s website is not incorporated by reference herein. In addition, the public may read and copy any materials filed with the SEC free of charge at the SEC’s website, www.sec.gov, that contains reports, proxy information statements and other information regarding issuers that file electronically.
He subsequently had responsibility for Europe, Mexico and corporate transactions before being promoted to Associate General Counsel and Assistant Secretary. Mr. Bichara previously held roles at Cemex and various global law firms. Sean Durbin, 52, became Executive Vice President, EMEA in April 2021. Previously, he served as Senior Vice President, Global Functions beginning in July 2020.
He subsequently had responsibility for Europe, Mexico and corporate transactions before being promoted to Associate General Counsel and Assistant Secretary. Mr. Bichara previously held roles at Cemex and various global law firms. Sean Durbin, 53, became Executive Vice President, North America effective September 1, 2023.
She joined Praxair in 2002 and served as Director of Corporate Accounting and SEC Reporting through 2008, and later served as Controller for various divisions within Praxair’s North American Industrial Gas business. Previously, she was in audit at KPMG, LLP. Juergen Nowicki, 59, was appointed Executive Vice President and CEO, Linde Engineering in April 2020.
Prior to becoming Controller, she served as Praxair’s Director of Investor Relations since 2010. She joined Praxair in 2002 and served as Director of Corporate Accounting and SEC Reporting through 2008, and later served as Controller for various divisions within Praxair’s North American Industrial Gas business. Previously, she was in audit at KPMG, LLP.
Most carbon dioxide is purchased from by-product sources, including chemical plants, refineries and industrial processes or is recovered from carbon dioxide wells. Carbon dioxide is processed in Linde’s plants to produce commercial and food-grade carbon dioxide.
Most carbon dioxide is purchased from by-product sources, including chemical plants, refineries and industrial processes or is recovered from carbon dioxide wells. Carbon dioxide is processed in Linde’s plants to produce commercial and food-grade carbon dioxide. Helium is sourced from certain helium-rich natural gas streams in the United States, with additional supplies being acquired from outside the United States.
Carbon monoxide can be produced by either steam methane reforming or auto-thermal reforming of natural gas or other feed streams such as naphtha. Acetylene is primarily sourced as a chemical by-product, but may also be produced from calcium carbide and water.
Low carbon intensity, high-purity hydrogen is also produced by purifying and recovering by-product hydrogen sources from the chemical and petrochemical industries. Carbon monoxide can be produced by either steam methane reforming or auto-thermal reforming of natural gas or other feed streams such as naphtha.
Prior to this, he was Senior Vice President, Commercial, Linde Engineering. Mr. Nowicki joined Linde in 1991 as an Internal Auditor and held various positions in Finance and Controlling. In 2002, he was appointed CFO Linde Gas North America, USA, and was named Head of Finance and Control for The Linde Group in 2006.
Juergen Nowicki, 60, was appointed Executive Vice President and CEO, Linde Engineering in April 2020. Prior to this, he was Senior Vice President, Commercial, Linde Engineering. Mr. Nowicki joined Linde in 1991 as an Internal Auditor and held various positions in Finance and Controlling.
Strauss, 64, is Executive Vice President and Chief Human Resources Officer. He previously served as Praxair’s Chief Human Resources Officer. Mr. Strauss joined Linde in 1990 as an Applications Engineer before being promoted to lead the electronics materials business. He subsequently served as Vice President of Safety, Health and Environment. Matthew J.
Strauss, 65, has been Executive Vice President and Chief Human Resources Officer since 2022. From 2018 to 2021, he was Senior Vice President and Chief Human Resources Officer. Mr. Strauss joined Linde in 1990 as an Applications Engineer before being promoted to lead the electronics materials business.
Environment – Information required by this item is incorporated herein by reference to the section captioned “Management’s Discussion and Analysis – Environmental Matters” in Item 7 of this 10-K. 6 Table of Contents Available Information – The company makes its periodic and current reports available, free of charge, on or through its website, www.linde.com, as soon as practicable after such material is electronically filed with, or furnished to, the Securities and Exchange Commission ("SEC").
Available Information – The company makes its periodic and current reports available, free of charge, on or through its website, www.linde.com, as soon as practicable after such material is electronically filed with, or furnished to, the Securities and Exchange Commission ("SEC"). Investors may also access from the company website other investor information such as press releases and presentations.
It is expected that the Board will elect officers annually following each annual meeting of shareholders. Sanjiv Lamba, 58, was appointed Chief Executive Officer of Linde effective March 1, 2022. Prior to being appointed CEO, he was Chief Operating Officer starting in January 2021 and after serving as Executive Vice President, APAC, beginning in October 2018. Previously, Mr.
Prior to being appointed CEO, he was Chief Operating Officer starting in January 2021 and after serving as Executive Vice President, APAC, beginning in October 2018. Previously, Mr.
He began his career with Praxair in 1991 as an Applications Engineer. Over the years, Mr. Panikar held increasingly responsible positions including Manager of Site Services and Equipment, Business Development Director for Praxair Asia, Managing Director of Praxair India, VP, South Region, North American Industrial Gases and President, Praxair Distribution, Inc. David P.
Panikar held increasingly responsible positions including Manager of Site Services and Equipment, Business Development Director for Praxair Asia, Managing Director of Praxair India, VP, South Region, North American Industrial Gases and President, Praxair Distribution, Inc. Oliver Pfann, 55, was appointed Senior Vice President, EMEA effective September 1, 2023.
From time to time, Linde may introduce special compensation schemes to recognize or reward specific individuals such as the one implemented in 2020 for global front-line employees. Linde also invests in professional development of its employees through formal and on-the-job training.
In addition, annually managers have the ability to grant leadership awards under the Long Term Incentive Plan to certain eligible employees. From time to time, Linde may introduce special compensation schemes to recognize or reward specific individuals such as the one implemented in 2020 for global front-line employees.
Industrial Gases Distribution There are three basic distribution methods for industrial gases: (i) on-site or tonnage; (ii) merchant or bulk liquid; and (iii) packaged or cylinder gases. These distribution methods are often integrated, with products from all three supply modes coming from the same plant.
These distribution methods are often integrated, with products from all three supply modes coming from the same plant.
Hoyt, 53, became the Chief Accounting Officer of Linde in October 2018. Prior to this, she served as Vice President and Controller of Praxair, Inc. beginning in August 2016. Prior to becoming Controller, she served as Praxair’s Director of Investor Relations since 2010.
In recent years, he has held leadership positions including Business President, Region Europe South from 2019 to 2020, and President, Praxair Canada Inc. from 2013 to 2019. Kelcey E. Hoyt, 54, became the Chief Accounting Officer of Linde in October 2018. Prior to this, she served as Vice President and Controller of Praxair, Inc. beginning in August 2016.
As of December 31, 2022, Linde had 65,010 employees worldwide comprised of approximately 28 percent women and 72 percent men.
Linde also invests in professional development of its employees through formal and on-the-job training. As of December 31, 2023, Linde had 66,323 employees worldwide comprised of approximately 28 percent women and 72 percent men.
Nowicki assumed the role of Managing Director, Linde Engineering in 2011. John Panikar, 55, was appointed Executive Vice President, APAC of Linde effective in January 2021. Previously, he served as President UK & Africa of Linde since October 2018. From 2014 to 2018, Mr. Panikar was President of Praxair Asia.
Previously, he served as President UK & Africa of Linde since October 2018. From 2014 to 2018, Mr. Panikar was President of Praxair Asia. He began his career with Praxair in 1991 as an Applications Engineer. Over the years, Mr.
Durbin joined Praxair, Inc. in 1993 and served in various roles across operations, engineering, project management, business development and sales. In recent years, he has held leadership positions including Business President, Region Europe South from 2019 to 2020, and President, Praxair Canada Inc. from 2013 to 2019. Kelcey E.
Previously, he served as Executive Vice President, EMEA from April 2021 to September 2023 and Senior Vice President, Global Functions from July 2020. Durbin joined Praxair, Inc. in 1993 and served in various roles across operations, engineering, project management, business development and sales.
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Low carbon intensity, high-purity hydrogen is also produced by purifying and recovering by-product hydrogen sources from the chemical and petrochemical industries. Helium is sourced from certain helium-rich natural gas streams in the United States, with additional supplies being acquired from outside the United States.
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Acetylene is primarily sourced as a chemical by-product, but may also be produced from calcium carbide and water. Industrial Gases Distribution There are three basic distribution methods for industrial gases: (i) on-site or tonnage; (ii) merchant or bulk liquid; and (iii) packaged or cylinder gases.
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Investors may also access from the company website other investor information such as press releases and presentations. Information on the company’s website is not incorporated by reference herein.
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The total professional workforce is comprised of approximately 29 percent women and 71 percent men. 6 Table of Contents Environment – Information required by this item is incorporated herein by reference to the section captioned “Management’s Discussion and Analysis – Environmental Matters” in Item 7 of this 10-K.
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Executive Officers – The following Executive Officers have been elected by the Board of Directors and serve at the pleasure of the Board. It is expected that the Board will elect officers annually following each annual meeting of shareholders. Sanjiv Lamba, 59, was appointed Chief Executive Officer of Linde effective March 1, 2022.
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In 2002, he was appointed CFO Linde Gas North America, USA, and was named Head of Finance and Control for The Linde Group in 2006. Nowicki assumed the role of Managing Director, Linde Engineering in 2011. John Panikar, 56, was appointed Executive Vice President, APAC of Linde effective in January 2021.
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Since 1995, Oliver Pfann has served in a range of roles at Linde. He began his career in Product Development and then as Sales Manager in Romania. He transitioned to Global Key Accounts and was named General Manager of Linde Italy in 2004.
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Since 2007, Pfann led a 7 Table of Contents regional cluster in Eastern Europe with an increasing number of countries. In 2017, he was promoted to lead the Region UK, Ireland and Africa before assuming his assignment as Business President for Region Europe East in 2019. David P.
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From 2000 to 2013, he served as the General Manager for Linde Advanced Material Technologies Inc. (formerly “Praxair Surface Technologies, Inc.”). In 2013, he became Vice President of Safety, Health and Environment before being named Chief Human Resources Officer of Praxair, Inc., a position he held from 2016 until 2018. Matthew J.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Linde is subject to regulations in the following areas, among others: • environmental protection, including climate change and energy efficiency laws and policies; • U.S. and non-U.S. tax laws and currency controls; • safety; • securities laws applicable in the United States, the European Union, Germany, Ireland, and other jurisdictions; • trade and import/export restrictions, as well as economic sanctions laws; • antitrust matters; • data protection; • global anti-bribery laws, including the U.S.
Linde is subject to regulations in the following areas, among others: • environmental protection, including climate change and energy efficiency laws and policies; • U.S. and non-U.S. tax laws and currency controls; • safety; • securities laws applicable in the United States, the European Union, and other jurisdictions; • trade and import/export restrictions, as well as economic sanctions laws; • antitrust matters; • data protection; • global anti-bribery laws, including the U.S.
These systems are susceptible to outages due to fire, flood, power loss, telecommunications failures, viruses, break-ins and similar events, or breaches of security. Linde has taken steps to address these risks and concerns by implementing advanced security technologies, internal controls, network and data center resiliency and recovery process.
These systems are susceptible to outages due to fire, flood, power loss, telecommunications failures, viruses, break-ins and similar events, or breaches of security. Linde has taken steps to address these risks and concerns by implementing advanced security technologies, internal controls, network and data center resiliency and recovery processes.
An impairment of goodwill or intangible assets could negatively impact the company's financial results. As of December 31, 2022, the net carrying value of goodwill and other indefinite-lived intangible assets was $26 billion and $2 billion, respectively, primarily as a result of the business combination and the related acquisition method of accounting applied to Linde AG.
An impairment of goodwill or intangible assets could negatively impact the company's financial results. As of December 31, 2023, the net carrying value of goodwill and other indefinite-lived intangible assets was $27 billion and $2 billion, respectively, primarily as a result of the business combination and the related acquisition method of accounting applied to Linde AG.
Because a significant portion of Linde's revenue is denominated in currencies other than its reporting currency, the U.S. dollar, changes in exchange rates will produce fluctuations in revenue, costs and earnings and may also affect the book 9 Table of Contents value of assets and liabilities and related equity.
Currency exchange rate fluctuations and other related risks may adversely affect Linde's results. Because a significant portion of Linde's revenue is denominated in currencies other than its reporting currency, the U.S. dollar, changes in exchange rates will produce fluctuations in revenue, costs and earnings and may also affect the book value of assets and liabilities and related equity.
Although the company from time to time utilizes foreign exchange forward contracts to hedge these exposures, its efforts to minimize currency exposure through such hedging transactions may not be successful depending on market and business conditions. As a result, fluctuations in foreign currency exchange rates could adversely affect Linde’s financial condition, results of operations or cash flows.
Although the company from time to time utilizes foreign exchange 9 Table of Contents forward contracts to hedge these exposures, its efforts to minimize currency exposure through such hedging transactions may not be successful depending on market and business conditions.
Macroeconomic factors may impact Linde’s ability to obtain financing or increase the cost of obtaining financing which may adversely impact Linde’s financial results and/or cash flows.
As a result, fluctuations in foreign currency exchange rates could adversely affect Linde’s financial condition, results of operations or cash flows. Macroeconomic factors may impact Linde’s ability to obtain financing or increase the cost of obtaining financing which may adversely impact Linde’s financial results and/or cash flows.
If Linde ceases to be resident in the U.K. and becomes resident in another jurisdiction, it may be subject to U.K. exit charges, and/or could become liable for additional tax charges in the other jurisdiction. If Linde were to be treated as resident in more than one jurisdiction, it could be subject to duplicative taxation.
A change in Linde’s tax residency could have a negative effect on the company’s future profitability and may trigger taxes on dividends or exit charges. If Linde ceases to be resident in the U.K. and becomes resident in another jurisdiction, it may be subject to U.K. exit charges, and/or could become liable for additional tax charges in the other jurisdiction.
Linde and its subsidiaries are subject to audits by taxing authorities in various jurisdictions or other review actions by the relevant financial or tax authorities. The ultimate tax outcome may differ from the amounts recorded in Linde’s or its subsidiaries’ financial statements and may materially affect their respective financial results for the period when such determination is made.
The ultimate tax outcome may differ from the amounts recorded in Linde’s or its subsidiaries’ financial statements and may materially affect their respective financial results for the period when such determination is made. 14 Table of Contents ITEM 1B. UNRESOLVED STAFF COMMENTS Not applicable.
In particular, since Linde is currently treated as U.K. tax resident, any potential changes in the tax rules applying to U.K. tax-resident companies would directly affect Linde. A change in Linde’s tax residency could have a negative effect on the company’s future profitability and may trigger taxes on dividends or exit charges.
In particular, since Linde is currently treated as U.K. tax resident, any potential changes in the tax rules applying to U.K. tax-resident companies would directly affect Linde. This includes the Organization for Economic Cooperation & Development's (“OECD”) framework for a 15% global minimum tax rate (“Pillar Two”).
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Currency exchange rate fluctuations and other related risks may adversely affect Linde's results.
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The U.K. and a majority of EU member states implemented Pillar Two effective January 1, 2024. The OECD continues to issue additional guidance as countries adopt legislation. Linde continues to monitor and evaluate enacted and pending legislation in the jurisdictions in which it operates, as such changes could result in an increase in our effective tax rate.
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Following the Reorganization, New Linde will seek Irish High Court approval for the creation of distributable reserves. New Linde expects this will be forthcoming, but cannot guarantee this, and until distributable reserves of New Linde are created, New Linde will be unable to make distributions by way of dividends, share repurchases or otherwise under Irish law.
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If Linde were to be treated as resident in more than one jurisdiction, it could be subject to duplicative taxation.
Removed
Under Irish law, dividends may only be paid and share repurchases and redemptions must generally be funded only out of “distributable reserves,” which New Linde will not have immediately following the Reorganization. The creation of distributable reserves of New Linde involves a reduction in New Linde’s undenominated share capital which requires the approval of the Irish High Court.
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Linde and its subsidiaries are subject to audits by taxing authorities in various jurisdictions or other review actions by the relevant financial or tax authorities.
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The approval of the Irish High Court is expected within eight weeks following the Reorganization becoming effective. This approval is the same process successfully followed by Linde immediately after the Linde AG – Praxair, Inc. merger in 2018.
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New Linde is not aware of any reason why the Irish High Court would not approve the creation of distributable reserves in this manner; however, the issuance of the required order is a matter for the discretion of the Irish High Court.
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In the event that distributable reserves of New Linde are not created, no distributions by way of dividends, share repurchases or otherwise will be permitted under Irish law until such time as New Linde has created sufficient distributable reserves from its business activities, except that New Linde will be able to pay any dividends declared by the company prior to the Reorganization becoming effective. 14 Table of Contents ITEM 1B.
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UNRESOLVED STAFF COMMENTS Linde has received no written SEC staff comments regarding any of its Exchange Act reports which remain unresolved.

Item 2. Properties

Properties — owned and leased real estate

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Due to the nature of Linde’s industrial gas products, it is generally uneconomical to transport them distances greater than a few hundred miles from the production facility. As a result, Linde operates a significant number of production facilities spread globally throughout a number of geographic regions. The following is a description of production facilities for Linde by segment.
Due to the nature of Linde’s industrial gas products, it is generally uneconomical to transport most products distances greater than a few hundred miles from the production facility. As a result, Linde operates a significant number of production facilities spread globally throughout a number of geographic regions. The following is a description of production facilities for Linde by segment.
EMEA The EMEA segment has production facilities primarily in Germany, France, Sweden, the Republic of South Africa, and the U.K. which include approximately 275 cryogenic air separation plants and carbon dioxide plants. Also located throughout Europe are noncryogenic air separation plants, pipelines, hydrogen, packaged gas facilities and other smaller plant facilities.
Also located throughout the Americas are noncryogenic air separation plants, packaged gas facilities and other smaller plant facilities. EMEA The EMEA segment has production facilities primarily in Germany, the U.K., Eastern Europe, France, Sweden and the Republic of South Africa which include approximately 275 cryogenic air separation plants and carbon dioxide plants.
APAC The APAC segment has production facilities located primarily in China, Australia, India, South Korea and Thailand, approximately 230 of which are cryogenic air separation plants and carbon dioxide plants. Also located throughout Asia are noncryogenic air separation plants, pipelines, hydrogen, packaged gas and other production facilities.
Also located throughout Europe are noncryogenic air separation plants, pipelines, hydrogen, packaged gas facilities and other smaller plant facilities. APAC The APAC segment has production facilities located primarily in China, Australia, India, South Korea and Thailand, approximately 230 of which are cryogenic air separation plants and carbon dioxide plants.
Engineering The Engineering business designs and constructs turnkey process plants for third-party customers as well as for the gases businesses in many locations worldwide, such as air separation, hydrogen, synthesis, olefin and natural gas plants. Plant components are produced in owned factories in Tacherting, Germany; Hesinque, France; New York and Oklahoma, United States; and Dalian, China.
Also located throughout Asia are noncryogenic air separation plants, pipelines, hydrogen, packaged gas and other production facilities. Engineering The Engineering business designs and constructs turnkey process plants for third-party customers as well as for the gases businesses in many locations worldwide, such as air separation, hydrogen, synthesis, olefin and natural gas plants.
There are five major pipeline complexes in North America located in northern Indiana, Houston, along the Gulf Coast of Texas, Detroit and Louisiana. Also located throughout the Americas are noncryogenic air separation plants, packaged gas facilities and other smaller plant facilities.
Americas 15 Table of Contents The Americas segment operates production facilities primarily in the U.S., Canada, Mexico and Brazil, approximately 350 of which are mainly cryogenic air separation plants, hydrogen plants and carbon dioxide plants. There are five major pipeline complexes in North America located in northern Indiana, Houston, along the Gulf Coast of Texas, Detroit and Louisiana.
No significant portion of these assets was leased at December 31, 2022. Generally, these facilities are utilized and are sufficient to meet the company's manufacturing needs. Americas The Americas segment operates production facilities primarily in the U.S., Canada, Mexico and Brazil, approximately 350 of which are mainly cryogenic air separation plants, hydrogen plants and carbon dioxide plants.
No significant portion of these assets was leased at December 31, 2023. Generally, these facilities are utilized and are sufficient to meet the company's manufacturing needs.
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Plant components are produced in owned factories in Tacherting, Germany; Hesingue, France; New York and Oklahoma, United States; and Dalian, China.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Purchases of Equity Securities – Certain information rega rding purchases made by or on behalf of the company or any affiliated purchaser (as defined in Rule 10b-18(a)(3) under the Securities Exchange Act of 1934, as amended) of its ordinary shares during the three months ended December 31, 2022 is provided below: Period Total Number of Shares Purchased (Thousands) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Program (1) (Thousands) Approximate Dollar Value of Shares that May Yet be Purchased Under the Program (2) (Millions) October 2022 677 $ 287.57 677 $ 5,832 November 2022 1,323 $ 316.05 1,323 $ 5,414 December 2022 138 $ 333.88 138 $ 5,368 Fourth Quarter 2022 2,138 $ 308.18 2,138 5,368 (1) On February 28, 2022 the company's board of directors approved the repurchase of $10.0 billion of its ordinary shares ("2022 program") which could take place from time to time on the open market (and could include the use of 10b5-1 trading plans), subject to market and business conditions.
Purchases of Equity Securities – Certain information rega rding purchases made by or on behalf of the company or any affiliated purchaser (as defined in Rule 10b-18(a)(3) under the Securities Exchange Act of 1934, as amended) of its ordinary shares during the three months ended December 31, 2023 is provided below: Period Total Number of Shares Purchased (Thousands) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Programs (1) (Thousands) Approximate Dollar Value of Shares that May Yet be Purchased Under the Programs (2) (Millions) October 2023 852 $ 373.13 852 $ 17,051 November 2023 657 $ 400.45 657 $ 16,788 December 2023 1,042 $ 405.41 1,042 $ 16,366 Fourth Quarter 2023 2,551 $ 393.35 2,551 $ 16,366 (1) On February 28, 2022 the company's board of directors approved the repurchase of $10.0 billion of its ordinary shares ("2022 program") which could take place from time to time on the open market (and could include the use of 10b5-1 trading plans), subject to market and business conditions.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Linde plc shares trade on the New York Stock Exchange (“NYSE”) and the Frankfurt Stock Exchange (“FSE”) under the ticker symbol “LIN”. At December 31, 2022 there were 7,319 shareholders of record.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Linde plc shares trade on the Nasdaq Stock Market LLC (“Nasdaq”) under the ticker symbol “LIN”. At December 31, 2023 there were 6,596 shareholders of record.
As of December 31, 2022, $5.4 billion of share repurchases remain authorized under the 2022 program. 16 Table of Contents Peer Performance Table – The graph below compares the most recent five-year cumulative returns of the common stock of Praxair, the company's predecessor, through October 31, 2018 and Linde's ordinary shares for periods subsequent to October 31, 2018 with those of the Standard & Poor’s 500 Index ("SPX") and the S5 Materials Index ("S5MATR") which covers 29 companies, including Linde.
As of December 31, 2023, $1.4 billion and $15 billion of share repurchases remain authorized under the 2022 and 2023 programs, respectively. 17 Table of Contents Peer Performance Table – The graph below compares the most recent five-year cumulative returns of Linde's ordinary shares with those of the Standard & Poor’s 500 Index ("SPX") and the S5 Materials Index ("S5MATR") which covers 28 companies, including Linde.
The 2022 program has a maximum repurchase amount of 15% of outstanding shares, beginning on March 1, 2022 and expires on July 31, 2024. (2) As of December 31, 2022, the company repurchased $4.6 billion of its ordinary shares pursuant to the 2022 ` program.
The 2022 program has a maximum repurchase amount of 15% of outstanding shares, beginning on March 1, 2022 and expires on July 31, 2024.
The figures assume an initial investment of $100 on December 31, 2017 and that all dividends have been reinvested. 2017 2018 2019 2020 2021 2022 LIN $100 $103 $143 $180 $240 $230 SPX $100 $96 $126 $149 $192 $157 S5MATR $100 $85 $106 $128 $163 $143
The figures assume an initial investment of $100 on December 31, 2018 and that all dividends have been reinvested. 2018 2019 2020 2021 2022 2023 LIN $100 $139 $175 $234 $223 $285 SPX $100 $131 $156 $200 $164 $207 S5MATR $100 $125 $150 $191 $168 $189
Removed
On January 18, 2023, shareholders approved the company’s proposal for an intercompany reorganization that will result in the delisting of its ordinary shares from the Frankfurt Stock Exchange.
Added
From January 1, 2023 through November 6, 2023, Linde’s shares were traded on the New York Stock Exchange (“NYSE”), but effective November 7, 2023, Linde delisted its shares from the NYSE and began listing and trading its shares on the Nasdaq.
Removed
Following the completion of legal and regulatory approvals, Linde anticipates that the intercompany reorganization and delisting process will be completed, and its ordinary shares will be delisted from the Frankfurt Stock Exchange, on or about March 1, 2023.
Added
On October 23, 2023, the company's board of directors approved the repurchase of $15.0 billion of its ordinary shares ("2023 program") which could take place from time to time on the open market (and could include the use of 10b5-1 trading plans), subject to market and business conditions.
Added
The 2023 program began on October 23, 2023 and will terminate on the earlier of the date as the maximum authority under the 2023 program is reached or the board terminates the 2023 program. (2) As of December 31, 2023, the company repurchased $8.6 billion of its ordinary shares pursuant to the 2022 program.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

127 edited+11 added−15 removed65 unchanged
The translation adjustments reflect the impact of translating local currency foreign subsidiary financial statements to U.S. dollars, and are largely driven by the movement of the U.S. dollar against major currencies including the Euro, the Chinese yuan and the British pound.
The translation adjustments reflect the impact of translating local currency foreign subsidiary financial statements to U.S. dollars, and are largely driven by the movement of the U.S. dollar against major currencies including the Euro, British pound and the Chinese yuan.
In addition to these developments in the United States, several other countries worldwide have already implemented carbon taxation or trading systems which impact the company and its customers, including regulations in China, Singapore and the European Union. Among other impacts, such regulations are expected to raise the cost of energy, which is a significant cost for Linde.
In addition to these developments in the United States, several other countries worldwide have implemented carbon taxation or trading systems which impact the company and its customers, including regulations in China, Singapore and the European Union. Among other impacts, such regulations are expected to raise the cost of energy, which is a significant cost for Linde.
The Committee is responsible for oversight of the Company's programs, policies and strategies related to environmental matters, including climate change, greenhouse gas reduction goals and decarbonization solutions, such as clean energy and carbon management. At the same time, external factors may provide Linde with future business opportunities.
The Sustainability Committee is responsible for oversight of the Company's programs, policies and strategies related to environmental matters, including climate change, greenhouse gas reduction goals and decarbonization solutions, such as clean energy and carbon management. At the same time, external factors may provide Linde with future business opportunities.
See the "Currency" section of the MD&A for exchange rates used for translation purposes and Note 7 to the consolidated financial statements for a summary of the currency translation adjustment component of accumulated other comprehensive income by segment. Related Party Transactions The company’s related parties are primarily unconsolidated equity affiliates.
See the "Currency" section of the MD&A for exchange rates used for translation purposes and Note 7 to the consolidated financial statements for a summary of the currency translation adjustment component of accumulated other comprehensive income (loss) by segment. Related Party Transactions The company’s related parties are primarily unconsolidated equity affiliates.
Linde plc will guarantee debt securities of Linde Finance offered under the Registration Statement. Linde GmbH and Linde Inc. may guarantee Linde plc’s obligations under its downstream guarantee. Linde GmbH is a wholly owned subsidiary of Linde plc.
Linde Finance may offer debt securities under the Registration Statement. Linde plc will guarantee debt securities of Linde Finance offered under the Registration Statement. Linde GmbH and Linde Inc. may guarantee Linde plc’s obligations under its downstream guarantee. Linde GmbH is a wholly owned subsidiary of Linde plc.
OFF-BALANCE SHEET ARRANGEMENTS As discussed in Note 17 to the consolidated financial statements, at December 31, 2022, Linde had undrawn outstanding letters of credit, bank guarantees and surety bonds entered into in connection with normal business operations and they are not reasonably likely to have a material impact on Linde’s consolidated financial condition, results of operations, or liquidity.
OFF-BALANCE SHEET ARRANGEMENTS As discussed in Note 17 to the consolidated financial statements, at December 31, 2023, Linde had undrawn outstanding letters of credit, bank guarantees and surety bonds entered into in connection with normal business operations and they are not reasonably likely to have a material impact on Linde’s consolidated financial condition, results of operations, or liquidity.
The company believes that it has sufficient operating flexibility, cash reserves, and funding sources to maintain adequate amounts of liquidity to meet its business needs around the world. At December 31, 2022, Linde's credit ratings as reported by Standard & Poor’s and Moody’s were A-1 and P-1 for short-term debt, respectively, and A and A2 for long-term debt, respectively.
The company believes that it has sufficient operating flexibility, cash reserves, and funding sources to maintain adequate amounts of liquidity to meet its business needs around the world. At December 31, 2023, Linde's credit ratings as reported by Standard & Poor’s and Moody’s were A-1 and P-1 for short-term debt, respectively, and A and A2 for long-term debt, respectively.
At December 31, 2022 and 2021, the company had recorded a total of $71 million and $75 million, respectively, representing an estimate of the retained liability for the ultimate cost of claims incurred and unpaid as of the balance sheet dates. The estimated liability is established using statistical analysis and is based upon historical experience, actuarial assumptions and professional judgment.
At December 31, 2023 and 2022, the company had recorded a total of $75 million and $71 million, respectively, representing an estimate of the retained liability for the ultimate cost of claims incurred and unpaid as of the balance sheet dates. The estimated liability is established using statistical analysis and is based upon historical experience, actuarial assumptions and professional judgment.
Although the 2022 assessment indicated that it is more likely than not that the fair value of each reporting unit exceeded its carrying value, changes in circumstances or conditions affecting this analysis could have a significant impact on the fair value determination, which could then result in a material impairment charge to the company's results of operations.
Although the 2023 assessment indicated that it is more likely than not that the fair value of each reporting unit exceeded its carrying value, changes in circumstances or conditions affecting this analysis could have a significant impact on the fair value determination, which could then result in a material impairment charge to the company's results of operations.
A 0.50% change in these expected long-term rates of return, with all other variables held constant, would change Linde’s pension expense by approximately $44 million. The company has consistently used a market-related value of assets rather than the fair value at the measurement date to determine annual pension expense.
A 0.50% change in these expected long-term rates of return, with all other assumptions held constant, would change Linde’s pension expense by approximately $44 million. The company has consistently used a market-related value of assets rather than the fair value at the measurement date to determine annual pension expense.
Any insurance recoveries for business interruption and for property damages in excess of the net book value of the property are recognized only when realized or pending payments confirmed by its insurance companies. 26 Table of Contents SEGMENT DISCUSSION Linde’s operations consist of two major product lines: industrial gases and engineering.
Any insurance recoveries for business interruption and for property damages in excess of the net book value of the property are recognized only when realized or pending payments confirmed by its insurance companies. 27 Table of Contents SEGMENT DISCUSSION Linde’s operations consist of two major product lines: industrial gases and engineering.
In addition, the company self retains risk up to €5 million at its various properties worldwide for property damage resulting from fire, flood and other perils affecting its properties along with a separate €5 million deductible on all business interruption resulting from a major peril loss.
In addition, the company self retains risk up to €5 to €7.5 million at its various properties worldwide for property damage resulting from fire, flood and other perils affecting its properties along with a separate €5 to €7.5 million deductible on business interruption resulting from a major peril loss.
See Note 13 to the consolidated financial statements. 38 Table of Contents NON-GAAP FINANCIAL MEASURES The following non-GAAP measures are intended to supplement investors’ understanding of the company’s financial information by providing measures which investors, financial analysts and management use to help evaluate the company’s financial leverage and operating performance.
See Note 13 to the consolidated financial statements. 39 Table of Contents NON-GAAP FINANCIAL MEASURES The following non-GAAP measures are intended to supplement investors’ understanding of the company’s financial information by providing measures which investors, financial analysts and management use to help evaluate the company’s financial leverage and operating performance.
For the discussion comparing the years ended December 31, 2021 and 2020, refer to Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Form 10-K for the year ended December 31, 2021. The following table provides summary information for 2022 and 2021.
For the discussion comparing the years ended December 31, 2022 and 2021, refer to Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Form 10-K for the year ended December 31, 2022. The following table provides summary information for 2023 and 2022.
Refer to Note 16 to the consolidated financial stat ements for a summary of the discount rates used to calculate plan liabilities and benefit costs, and to the Retirement Benefits section of the Consolidated Results and Other Information section of this MD&A for a further discussion of 2022 benefit costs.
Refer to Note 16 to the consolidated financial stat ements for a summary of the discount rates used to calculate plan liabilities and benefit costs, and to the Retirement Benefits section of the Consolidated Results and Other Information section of this MD&A for a further discussion of 2023 benefit costs.
Costs Relating to the Protection of the Environment Environmental protection costs in 2022 were not significant. Linde anticipates that future annual environmental protection expenditures will be similar to 2022, subject to any significant changes in existing laws and regulations.
Costs Relating to the Protection of the Environment Environmental protection costs in 2023 were not significant. Linde anticipates that future annual environmental protection expenditures will be similar to 2023, subject to any significant changes in existing laws and regulations.
The company maintains a $5 billion and a $1.5 billion unsecured and undrawn revolving credit agreements with no associated financial covenants. No borrowings were outstanding under the credit agreements as of December 31, 2022.
The company maintains a $5 billion and a $1.5 billion unsecured and undrawn revolving credit agreements with no associated financial covenants. No borrowings were outstanding under the credit agreements as of December 31, 2023.
The company did not engage in any material transactions involving related parties that included terms or other aspects that differ from those which would be negotiated with independent parties. Environmental Matters Linde’s principal operations relate to the production and distribution of atmospheric and other industrial gases, which for the most part are used to help customers reduce their emissions.
The company did not engage in any material transactions involving related parties that included terms or other aspects that differ from those which would be negotiated with independent parties. Environmental Matters Linde’s principal operations relate to the production and distribution of atmospheric and other industrial gases, many of which are used to help customers reduce their emissions.
These materials are available on the company’s website, www.linde.com, but are not incorporated herein. 20 Table of Contents CONSOLIDATED RESULTS AND OTHER INFORMATION The discussion that follows includes a comparison of our results of operations and liquidity and capital resources for the years ended December 31, 2022 and 2021.
These materials are available on the company’s website, www.linde.com, but are not incorporated herein. 21 Table of Contents CONSOLIDATED RESULTS AND OTHER INFORMATION The discussion that follows includes a comparison of our results of operations and liquidity and capital resources for the years ended December 31, 2023 and 2022.
The table below presents sales and operating profit information about reportable segments and Other for the years ended December 31, 2022 and 2021.
The table below presents sales and operating profit information about reportable segments and Other for the years ended December 31, 2023 and 2022.
Such contingencies are significant and the accounting requires considerable management judgments in analyzing each matter to assess the likely outcome and the need for establishing appropriate liabilities and providing adequate disclosures. Linde believes it records and/or discloses such contingencies as appropriate and has reasonably estimated its liabilities.
Such contingencies are significant and the accounting requires considerable management judgments in analyzing each matter to assess the likely outcome and the need for 38 Table of Contents establishing appropriate liabilities and providing adequate disclosures. Linde believes it records and/or discloses such contingencies as appropriate and has reasonably estimated its liabilities.
Linde Inc. may also provide (i) guarantees of debt securities offered by Linde plc under the Registration Statement and (ii) guarantees of the guarantees provided by Linde plc of debt securities of Linde Finance offered under the Registration Statement. Linde Finance B.V. is a wholly owned subsidiary of Linde plc. Linde Finance may offer debt securities under the Registration Statement.
Linde Inc. may also provide (i) guarantees of debt securities offered by Linde plc under the Registration Statement and (ii) upstream guarantees of downstream guarantees provided by Linde plc of debt securities of Linde Finance offered under the Registration Statement. Linde Finance B.V. is a wholly owned subsidiary of Linde plc.
These net deferred investment gains of $1,213 million wil l be recognized in the calculation of the market-related value of assets ratably over the next four years and will impact future pension expense. Future actual investment gains or losses will impact the market-related value of assets and, therefore, will impact future annual pension expense in a similar manner.
These net deferred investment lo of $952 million wil l be recognized in the calculation of the market-related value of assets ratably over the next four years and will impact future pension expense. Future actual investment gains or losses will impact the market-related value of assets and, therefore, will impact future annual pension expense in a similar manner.
A 0.50% change in the expected rate of compensation increase, with all other variables held constant, would change Linde’s pension expense by approximately $6 million and would impact the PBO by approximately $28 million.
A 0.50% change in the expected rate of compensation increase, with all other variables held constant, would change Linde’s pension expense by approximately $5 million and would impact the PBO by approximately $50 million.
Linde plc may offer debt securities, preferred shares, depositary shares and ordinary shares under the Registration Statement, and debt securities exchangeable for or convertible into preferred shares, ordinary shares or other debt securities. Debt securities of Linde plc may be guaranteed by Linde Inc. (previously Praxair, Inc.) and/or Linde GmbH (previously Linde AG).
Linde plc may offer debt securities, preferred shares, depositary shares and ordinary shares under the Registration Statement, and debt securities exchangeable for or convertible into preferred shares, ordinary shares or other debt securities. Debt securities of Linde plc may be guaranteed by Linde Inc and/or Linde GmbH.
Environmental Protection Agency ("EPA") has promulgated rules requiring reporting of GHG emissions to which Linde, its suppliers and customers are subject to. EPA has also promulgated regulations to restrict GHG emissions, including final rules regulating GHG emissions from light-duty vehicles and certain large manufacturing facilities, many of which are Linde suppliers or customers.
Environmental Protection Agency ("EPA") has promulgated rules requiring reporting of GHG emissions to which Linde, its suppliers and customers are subject to. EPA has also promulgated regulations to restrict GHG emissions, including final rules regulating GHG emissions from light-duty vehicles and certain large manufacturing facilities, including some of Linde’s suppliers and customers.
The weighted-average expected rate of compensation increase was 3.25% for U.S. plans and 2.59% for non-U.S. plans at December 31, 2022 (3.25% and 2.55%, respectively, at December 31, 2021). The estimated annual compensation increase is determined by management every year and is based on historical trends and market indices.
The weighted-average expected rate of compensation increase was 3.50% for U.S. plans and 2.58% for non-U.S. plans at December 31, 2023 (3.25% and 2.59%, respectively, at December 31, 2022). The estimated annual compensation increase is determined by management every year and is based on historical trends and market indices.
As deemed necessary, Linde manages its exposure to interest-rate changes through the use of financial derivatives (see Note 12 to the consolidated financial statements and Item 7A. Quantitative and Qualitative Disclosures About Market Risk). Cash used for financing activities was $3,089 million in 2022 compared to $7,588 million in 2021.
As deemed necessary, Linde manages its exposure to interest-rate changes through the use of financial derivatives (see Note 12 to the consolidated financial statements and Item 7A. Quantitative and Qualitative Disclosures About Market Risk). Cash used for financing activities was $5,400 million in 2023 compared to $3,089 million in 2022.
Linde’s industrial gas operations are managed on a geographical basis and in 2022 86% of sales were generated by Linde's three geographic segments (Americas, EMEA and APAC) and the remaining 14% are related largely to the Engineering segment, and to a lesser extent Other (see Note 18 to the consolidated financial statements for operating segment details).
Linde’s industrial gas operations are managed on a geographical basis and in 2023 90% of sales were generated by Linde's three geographic segments (Americas, EMEA and APAC) and the remaining 10% are related largely to the Engineering segment, and to a lesser extent Other (see Note 18 to the consolidated financial statements for operating segment details).
The decrease was driven primarily by higher working capital requirements, including lower inflows from contract liabilities from engineering customer advanced payments, partially offset by higher net income adjusted for non cash charges.
The increase was driven primarily by higher net income adjusted for non-cash charges, partially offset by higher working capital requirements, including lower inflows from contract liabilities from engineering customer advanced payments and higher cash tax payments.
Retirement Benefits Pensions The net periodic benefit cost (benefit) for the U.S. and non-U.S. pension plans was a benefit of $110 million, $35 million and $25 million in 2022, 2021 and 2020, respectively.
Retirement Benefits Pensions The net periodic benefit cost (benefit) for the U.S. and non-U.S. pension plans was a benefit of $80 million, $110 million and $35 million in 2023, 2022 and 2021, respectively.
A 0.50% reduction in discount rates, with all other variables held constant, would increase Linde’s pension expense by approximately $22 million whereas a 0.50% increase in discount rates would result in a decrease of $96 million.
A 0.50% reduction in discount rates, with all other variables held constant, would increase Linde’s pension expense by approximately $4 million whereas a 0.50% increase in discount rates would result in a decrease of $3 million.
APAC (Dollar amounts in millions) Variance Year Ended December 31, 2022 2021 2022 vs. 2021 Sales $ 6,480 $ 6,133 6 % Operating profit $ 1,670 $ 1,502 11 % As a percent of sales 25.8 % 24.5 % 2022 vs. 2021 % Change Factors Contributing to Changes - Sales Volume/Equipment 5 % Price/Mix 5 % Cost pass-through 2 % Currency (6) % Acquisitions/Divestitures — % 6 % The APAC segment includes Linde's industrial gases operations in approximately 20 Asian and South Pacific countries and regions including China, Australia, India and South Korea.
APAC (Dollar amounts in millions) Variance Year Ended December 31, 2023 2022 2023 vs. 2022 Sales $ 6,559 $ 6,480 1 % Operating profit $ 1,806 $ 1,670 8 % As a percent of sales 27.5 % 25.8 % 2023 vs. 2022 % Change Factors Contributing to Changes - Sales Volume/Equipment 2 % Price/Mix 4 % Cost pass-through (1) % Currency (4) % Acquisitions/Divestitures — % 1 % The APAC segment includes Linde's industrial gases operations in approximately 20 Asian and South Pacific countries and regions including China, Australia, India and South Korea.
As a result of the Russia-Ukraine conflict, Linde deconsolidated its Russian gas and engineering business entities as of June 30, 2022. See Note 3 to the consolidated financial statements. Income Taxes At December 31, 2022, Linde had deferred tax assets of $1,247 million (net of valuation allowances of $276 million), and deferred tax liabilities of $6,903 million.
As a result of the Russia-Ukraine conflict, Linde deconsolidated its Russian gas and engineering business entities as of June 30, 2022. See Note 3 to the consolidated financial statements. Income Taxes At December 31, 2023, Linde had deferred tax assets of $1,292 million (net of valuation allowances of $176 million), and deferred tax liabilities of $6,815 million.
Linde generates most of its revenues and earnings in the following geographies where the company has its strongest market positions and where distribution and production operations allow the company to deliver the highest level of service to its customers at the lowest cost.
Linde's industrial gas business generates most of its revenues and earnings in the following geographies where the company has its strongest market positions and where distribution and production operations allow the company to deliver the highest level of service to its customers at the lowest cost.
Page Business Overview 19 Executive Summary – Financial Results & Outlook 20 Consolidated Results and Other Information 21 Segment Discussion 27 Liquidity, Capital Resources and Other Financial Data 33 Off-Balance Sheet Arrangements 35 Critical Accounting Estimates 35 New Accounting Standards 38 Fair Value Measurements 38 Non-GAAP Financial Measures 39 Supplemental Guarantee Information 43 18 Table of Contents BUSINESS OVERVIEW The company's primary products in its industrial gases business are atmospheric gases (oxygen, nitrogen, argon, rare gases) and process gases (carbon dioxide, helium, hydrogen, electronic gases, specialty gases, acetylene).
Page Business Overview 20 Executive Summary – Financial Results & Outlook 21 Consolidated Results and Other Information 22 Segment Discussion 28 Liquidity, Capital Resources and Other Financial Data 34 Off-Balance Sheet Arrangements 36 Critical Accounting Estimates 36 New Accounting Standards 39 Fair Value Measurements 39 Non-GAAP Financial Measures 40 Supplemental Guarantee Information 44 19 Table of Contents BUSINESS OVERVIEW The company's primary products in its industrial gases business are atmospheric gases (oxygen, nitrogen, argon, rare gases) and process gases (carbon dioxide, helium, hydrogen, electronic gases, specialty gases, acetylene).
A 0.50% reduction in discount rates would increase the PBO by approximately $462 million whereas a 0.50% increase in discount rates would have a favorable impact to the PBO of approximately $417 million.
A 0.50% reduction in discount rates would increase the PBO by approximately $521 million whereas a 0.50% increase in discount rates would have a favorable impact to the PBO of approximately $477 million.
At December 31, 2022, Linde’s enterprise value was approximately $173 billion (outstanding shares multiplied by the year-end stock price plus net debt, and without any control premium) while its total capital was approximately $54 billion.
At December 31, 2023, Linde’s enterprise value was approximately $213 billion (outstanding shares multiplied by the year-end stock price plus net debt, and without any control premium) while its total capital was approximately $56 billion.
A reconciliation of reported amounts to adjusted amounts can be found in the "Non-GAAP Financial Measures" section of this MD&A. 21 Table of Contents Results of Operations The following table provides a summary of changes in consolidated sales: 2022 vs. 2021 % Change Factors Contributing to Changes - Sales Volume 1 % Price/Mix 7 % Cost pass-through 6 % Currency (5) % Acquisitions/divestitures (1) % Engineering — % 8 % 2022 Compared With 2021 Sales Linde sales increased $2,571 million, or 8%, for the 2022 year versus 2021.
A reconciliation of reported amounts to adjusted amounts can be found in the "Non-GAAP Financial Measures" section of this MD&A. 22 Table of Contents Results of Operations The following table provides a summary of changes in consolidated sales: 2023 vs. 2022 % Change Factors Contributing to Changes - Sales Volume (1) % Price/Mix 6 % Cost pass-through (3) % Currency (1) % Acquisitions/divestitures (1) % Engineering (2) % (2) % 2023 Compared With 2022 Sales Linde sales decreased $510 million, or 2%, for the 2023 year versus 2022.
Currency translation decreased sales by 5%, largely in EMEA and APAC, driven by the weakening of the Euro, Chinese yuan, British pound and Australian dollar against the U.S. dollar. The impact of divestitures decreased sales by 1%.
The impact of divestitures, net of acquisitions decreased sales by 1%. Currency translation decreased sales by 1%, largely in APAC, driven by the weakening of the Chinese yuan and Australian dollar against the U.S. dollar, partially offset by EMEA, driven by the strengthening of the Euro and British pound.
The funded status (pension benefit obligation ("PBO") less the fair value of plan assets) for the U.S. plans was a deficit of $238 million and $271 million at December 31, 2022 and 2021, respectively. The funded status for non-U.S. plans was a surplus of $208 million and deficit of $1,430 million at December 31, 2022 and 2021, respectively.
The funded status (pension benefit obligation ("PBO") less the fair value of plan assets) for the U.S. plans was a deficit of $137 million and $238 million at December 31, 2023 and 2022, respectively. The funded status for non-U.S. plans was a deficit of $207 million and surplus of $208 million at December 31, 2023 and 2022, respectively.
EMEA (Dollar amounts in millions) Variance Year Ended December 31, 2022 2021 2022 vs. 2021 Sales $ 8,443 $ 7,643 10 % Operating profit $ 2,013 $ 1,889 7 % As a percent of sales 23.8 % 24.7 % 2022 vs. 2021 % Change Factors Contributing to Changes - Sales Volume (3) % Price/Mix 13 % Cost pass-through 13 % Currency (11) % Acquisitions/Divestitures (2) % 10 % 28 Table of Contents The EMEA segment includes Linde's industrial gases operations in approximately 45 European, Middle Eastern and African countries including Germany, the U.K., France, Sweden and the Republic of South Africa.
EMEA (Dollar amounts in millions) Variance Year Ended December 31, 2023 2022 2023 vs. 2022 Sales $ 8,542 $ 8,443 1 % Operating profit $ 2,486 $ 2,013 23 % As a percent of sales 29.1 % 23.8 % 2023 vs. 2022 % Change Factors Contributing to Changes - Sales Volume (4) % Price/Mix 9 % Cost pass-through (3) % Currency 1 % Acquisitions/Divestitures (2) % 1 % 29 Table of Contents The EMEA segment includes Linde's industrial gases operations in approximately 45 European, Middle Eastern and African countries including Germany, the U.K., France, Sweden and the Republic of South Africa.
Capital expenditures were $3,173 million; dividends paid were $2,344 million; net purchases of ordinary shares of $5,132 million; and debt borrowings, net were $4,475 million. *A reconciliation of the adjusted amounts can be found in the "Non-GAAP Financial Measures" section in this MD&A. 2023 Outlook Linde provides quarterly updates on operating results, material trends that may affect financial performance, and financial guidance via earnings releases and investor teleconferences.
Capital expenditures were $3,787 million; dividends paid were $2,482 million; net purchases of ordinary shares of $3,925 million; and debt borrowings, net were $1,060 million. *A reconciliation of the adjusted amounts can be found in the "Non-GAAP Financial Measures" section in this MD&A. 2024 Outlook Linde provides quarterly updates on operating results, material trends that may affect financial performance, and financial guidance via earnings releases and investor teleconferences.
Sales Sales for the APAC segment increased $347 million, or 6%, in 2022 versus 2021. Volume increased 5% including project start-ups in the electronics and chemicals and energy end markets. Higher price increased sales by 5%. Cost pass-through increased sales by 2% with minimal impact on operating profit.
Sales Sales for the APAC segment increased $79 million, or 1%, in 2023 versus 2022. Volume increased 2% including project start-ups in the electronics and chemicals and energy end markets. Higher price increased sales by 4%. Cost pass-through decreased sales by 1% with minimal impact on operating profit.
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 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.
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 company will estimate and compare the fair value of its reporting units to their carrying value, including goodwill.
Cash dividends increased to $2,344 million in 2022 versus $2,189 million in 2021 driven primarily by a 10% increase in dividends per share to $4.68 per share from $4.24 per share, partially offset by lower shares outstanding.
Cash dividends increased to $2,482 million in 2023 versus $2,344 million in 2022 driven primarily by a 9% increase in dividends per share to $5.10 per share from $4.68 per share, partially offset by lower shares outstanding.
Instead, annual pension expense in future periods will be impacted as deferred investment gains or losses are r ecognized in the market-related value of assets over the five-year period. The consolidated market-related value of assets was $8,898 million, or $1,213 million higher than the fair value of assets of $7,685 million at December 31, 2022.
Instead, annual pension expense in future periods will be impacted as deferred investment gains or losses are r ecognized in the market-related value of assets over the five-year period. The consolidated market-related value of assets was $9,180 million, or $952 million higher than the fair value of assets of $8,228 million at December 31, 2023.
The company has growth opportunities in all major geographies and in diverse end-markets such as healthcare, chemicals and energy, manufacturing, metals and mining, food and beverage, and electronics. 19 Table of Contents EXECUTIVE SUMMARY – FINANCIAL RESULTS & OUTLOOK 2022 Year in review • Sales of $33,364 million were 8% above 2021 sales of $30,793 million.
The company has growth opportunities in all major geographies and in diverse end-markets such as healthcare, chemicals and energy, manufacturing, metals and mining, food and beverage, and electronics. 20 Table of Contents EXECUTIVE SUMMARY – FINANCIAL RESULTS & OUTLOOK 2023 Year in review • Sales of $32,854 million were 2% below 2022 sales of $33,364 million.
At December 31, 2022, uncertain tax positions totaled $325 million (see Note 1 and Note 5 to the consolidated financial statements). Income tax expense was $1,434 million for the year ended December 31, 2022, or about 25.9% of pre-tax income (see Note 5 to the consolidated financial statements for additional information related to taxes).
At December 31, 2023, uncertain tax positions totaled $304 million (see Note 1 and Note 5 to the consolidated financial statements). Income tax expense was $1,814 million for the year ended December 31, 2023, or about 22.7% of pre-tax income (see Note 5 to the consolidated financial statements for additional information related to taxes).
The decrease was driven by higher working capital requirements, including lower inflows from contract liabilities from engineering customer advanced payments, partially offset by higher net income adjusted for non cash charges.
The increase was driven by higher net income partially offset by higher net working capital requirements, including lower inflows from contract liabilities from engineering customer advanced payments.
To help understand the reported results, the following is a summary of the significant currencies underlying Linde’s consolidated results and the exchange rates used to translate the financial statements (rates of exchange expressed in units of local currency per U.S. dollar): Percent of 2022 Statements of Income Balance Sheets Consolidated Average Year Ended December 31, December 31, Currency Sales 2022 2021 2022 2021 Euro 21 % 0.95 0.85 0.93 0.88 Chinese yuan 8 % 6.72 6.45 6.90 6.36 British pound 6 % 0.81 0.73 0.83 0.74 Australian dollar 4 % 1.44 1.33 1.47 1.38 Brazilian real 4 % 5.16 5.39 5.28 5.58 Korean won 3 % 1,286 1,144 1,266 1,189 Canadian dollar 3 % 1.36 1.25 1.36 1.26 Mexican peso 2 % 20.10 20.28 19.50 20.53 Indian rupee 2 % 78.49 73.91 82.73 74.34 Republic of South African rand 1 % 16.30 14.77 17.04 15.94 Swedish krona 1 % 10.08 8.58 10.43 9.05 Thailand bhat 1 % 34.96 31.93 34.61 33.40 32 Table of Contents LIQUIDITY, CAPITAL RESOURCES AND OTHER FINANCIAL DATA (Millions of dollars) Year Ended December 31, 2022 2021 Net Cash Provided by (Used for) Operating Activities Income from continuing operations (including noncontrolling interests) $ 4,281 $ 3,956 Non-cash charges (credits): Add: Russia-Ukraine and other charges, net of payments (a) 902 98 Add: Depreciation and amortization 4,204 4,635 Add (Less): Deferred income taxes (383) (254) Add (Less): Non-cash charges and other 58 109 Income from continuing operations adjusted for non-cash charges and other 9,062 8,544 Less: Pension contributions (51) (42) Add (Less): Working capital (310) 1,148 Add (Less): Other 163 75 Net cash provided by (used for) operating activities $ 8,864 $ 9,725 Investing Activities Capital expenditures $ (3,173) $ (3,086) Acquisitions, net of cash acquired (110) (88) Divestitures and asset sales, net of cash divested 195 167 Net cash provided by (used for) investing activities $ (3,088) $ (3,007) Financing Activities Debt increases (decreases) – net $ 4,475 $ (514) Issuances (purchases) of ordinary shares – net (5,132) (4,562) Cash dividends – Linde plc shareholders (2,344) (2,189) Noncontrolling interest transactions and other (88) (323) Net cash provided by (used for) financing activities $ (3,089) $ (7,588) Effect of exchange rate changes on cash $ (74) $ (61) Cash and cash equivalents, end-of-period $ 5,436 $ 2,823 ____________________ (a) See Note 3 to the consolidated financial statements.
To help understand the reported results, the following is a summary of the significant currencies underlying Linde’s consolidated results and the exchange rates used to translate the financial statements (rates of exchange expressed in units of local currency per U.S. dollar): Percent of 2023 Statements of Income Balance Sheets Consolidated Average Year Ended December 31, December 31, Currency Sales 2023 2022 2023 2022 Euro 19 % 0.92 0.95 0.92 0.93 Chinese yuan 8 % 7.08 6.72 7.10 6.90 British pound 5 % 0.80 0.81 0.79 0.83 Australian dollar 4 % 1.50 1.44 1.47 1.47 Brazilian real 4 % 4.99 5.16 4.86 5.28 Korean won 3 % 1,306 1,286 1,288 1,266 Canadian dollar 3 % 1.35 1.36 1.32 1.36 Mexican peso 3 % 17.71 20.10 16.97 19.50 Indian rupee 2 % 84.51 78.49 83.21 82.73 Republic of South African rand 1 % 18.43 16.30 18.36 17.04 Swedish krona 1 % 10.60 10.08 10.07 10.43 Thailand bhat 1 % 34.78 34.96 34.14 34.61 33 Table of Contents LIQUIDITY, CAPITAL RESOURCES AND OTHER FINANCIAL DATA (Millions of dollars) Year Ended December 31, 2023 2022 Net Cash Provided by (Used for) Operating Activities Income from continuing operations (including noncontrolling interests) $ 6,341 $ 4,281 Non-cash charges (credits): Add: Other charges, net of payments (a) (118) 902 Add: Depreciation and amortization 3,816 4,204 Add (Less): Deferred income taxes (84) (383) Add (Less): Non-cash charges and other 184 58 Income from continuing operations adjusted for non-cash charges and other 10,139 9,062 Less: Pension contributions (46) (51) Add (Less): Working capital (483) (310) Add (Less): Other (305) 163 Net cash provided by (used for) operating activities $ 9,305 $ 8,864 Investing Activities Capital expenditures $ (3,787) $ (3,173) Acquisitions, net of cash acquired (953) (110) Divestitures and asset sales, net of cash divested 70 195 Net cash provided by (used for) investing activities $ (4,670) $ (3,088) Financing Activities Debt increases (decreases) – net $ 1,060 $ 4,475 Issuances (purchases) of ordinary shares – net (3,925) (5,132) Cash dividends – Linde plc shareholders (2,482) (2,344) Noncontrolling interest transactions and other (53) (88) Net cash provided by (used for) financing activities $ (5,400) $ (3,089) Effect of exchange rate changes on cash $ (7) $ (74) Cash and cash equivalents, end-of-period $ 4,664 $ 5,436 ____________________ (a) See Note 3 to the consolidated financial statements.
The following tables present summarized financial information for Linde plc, Linde Inc., Linde GmbH and Linde Finance on a combined basis, after eliminating intercompany transactions and balances between them and excluding investments in and equity in earnings from non-guarantor subsidiaries. 43 Table of Contents (Millions of dollars) Statement of Income Data Twelve Months Ended December 31, 2022 Twelve Months Ended December 31, 2021 Sales $ 8,850 $ 7,767 Operating profit 1,337 973 Net income 675 721 Transactions with non-guarantor subsidiaries 2,241 2,067 Balance Sheet Data (at period end) Current assets (a) $ 11,478 $ 5,826 Long-term assets (b) 13,949 15,928 Current liabilities (c) 11,767 8,853 Long-term liabilities (d) 48,210 42,860 (a) From current assets above, amount due from non-guarantor subsidiaries $ 7,260 $ 4,209 (b) From long-term assets above, amount due from non-guarantor subsidiaries 1,982 3,257 (c) From current liabilities above, amount due to non-guarantor subsidiaries 1,334 1,304 (d) From long-term liabilities above, amount due to non-guarantor subsidiaries 33,268 28,142 44 Table of Contents
The following tables present summarized financial information for Linde plc, Linde Inc., Linde GmbH and Linde Finance on a combined basis, after eliminating intercompany transactions and balances between them and excluding investments in and equity in earnings from non-guarantor subsidiaries. 44 Table of Contents (Millions of dollars) Statement of Income Data Twelve Months Ended December 31, 2023 Twelve Months Ended December 31, 2022 Sales $ 8,143 $ 8,850 Operating profit 1,656 1,337 Net income 735 675 Transactions with non-guarantor subsidiaries 3,004 2,241 Balance Sheet Data (at period end) Current assets (a) $ 4,423 $ 11,478 Long-term assets (b) 13,833 13,949 Current liabilities (c) 10,882 11,767 Long-term liabilities (d) 56,546 48,210 (a) From current assets above, amount due from non-guarantor subsidiaries $ 1,753 $ 7,260 (b) From long-term assets above, amount due from non-guarantor subsidiaries 816 1,982 (c) From current liabilities above, amount due to non-guarantor subsidiaries 1,684 1,334 (d) From long-term liabilities above, amount due to non-guarantor subsidiaries 39,458 33,268 45 Table of Contents
Asset Impairments Goodwill and Other Indefinite-Lived Intangibles Assets At December 31, 2022, the company had goodwill of $25,817 million and $1,706 million of other indefinite-lived intangible assets. Goodwill represents the aggregate of the excess consideration paid for acquired businesses over the fair value of the net assets acquired.
Asset Impairments Goodwill and Other Indefinite-Lived Intangibles Assets At December 31, 2023, the company had goodwill of $26,751 million and $1,745 million of other indefinite-lived intangible assets. Goodwill represents the aggregate of the excess consideration paid for acquired businesses over the fair value of the net assets acquired. Indefinite-lived other intangibles relate to the Linde name.
Indefinite-lived other intangibles relate to the Linde name. 36 Table of Contents 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 performed during the fourth quarter of 2022 indicated no impairment.
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 performed during the fourth quarter of 2023 indicated no impairment.
The increase was primarily driven by higher volumes and pricing and continued productivity initiatives which more than offset the impact of currency and inflation. 29 Table of Contents Engineering (Dollar amounts in millions) Variance Year Ended December 31, 2022 2021 2022 vs. 2021 Sales $ 2,762 $ 2,867 (4) % Operating profit $ 555 $ 473 17 % As a percent of sales 20.1 % 16.5 % 2022 vs. 2021 % Change Factors Contributing to Changes - Sales Volume 5 % Currency (9) % (4) % Sales Engineering segment sales decreased $105 million, or 4%, in 2022 versus 2021 .
The increase was primarily driven by higher pricing and continued productivity initiatives which more than offset the impact of currency and cost inflation. 30 Table of Contents Engineering (Dollar amounts in millions) Variance Year Ended December 31, 2023 2022 2023 vs. 2022 Sales $ 2,160 $ 2,762 (22) % Operating profit $ 491 $ 555 (12) % As a percent of sales 22.7 % 20.1 % 2023 vs. 2022 % Change Factors Contributing to Changes - Sales Currency 1 % Other (23) % (22) % Sales Engineering segment sales decreased $602 million, or 22%, in 2023 versus 2022 .
There are inherent uncertainties associated with the estimation process, including technical complexity, duration of construction cycle, potential cost inflation (whether equipment or manpower), and scope considerations all of which may affect the total estimation process.
There are inherent uncertainties associated with the estimation process, including technical complexity, duration of construction cycle, potential cost inflation (whether equipment or manpower), and scope considerations all of which may affect the total estimation process. Changes in these estimates may lead to a significant impact on future financial statements.
Currency translation decreased sales by 6% driven primarily by the weakening of the Australian dollar, Korean won and Chinese Yuan against the U.S. Dollar. Operating Profit Operating profit in the APAC segment increased $168 million, or 11%, in 2022 versus 2021.
Currency translation decreased sales by 4% driven primarily by the weakening of the Australian dollar, Indian rupee and Chinese Yuan against the U.S. Dollar. Operating Profit Operating profit in the APAC segment increased $136 million, or 8%, in 2023 versus 2022.
Higher pricing across all geographic segments contributed 7% to sales. Cost pass-through, representing the contractual billing of energy cost variances primarily to onsite customers, increased sales by 6%, with minimal impact on operating profit. Volume growth in all end markets, except healthcare, and startups increased sales by 1%.
Higher pricing across all geographic segments contributed 6% to sales. Cost pass-through, representing the contractual billing of energy cost variances primarily to onsite customers, decreased sales by 3%, with minimal impact on operating profit. Volumes decreased sales by 1% primarily driven by the electronics and metals and mining end markets.
Operating profit Operating profit in Other decreased $10 million, or 18%, in 2022 versus 2021 due primarily to higher sourcing costs in the global helium business and the impact of divestitures, partially offset by lower corporate costs . 31 Table of Contents Currency The results of Linde’s non-U.S. operations are translated to the company’s reporting currency, the U.S. dollar, from the functional currencies used in the countries in which the company operates.
Operating profit Operating profit in Other increased $109 million, or 165%, in 2023 versus 2022 d riven primarily by higher pricing in global helium and coatings and lower corporate costs which more than offset the impact of divestitures and lower volumes. 32 Table of Contents Currency The results of Linde’s non-U.S. operations are translated to the company’s reporting currency, the U.S. dollar, from the functional currencies used in the countries in which the company operates.
(Millions of dollars) Year Ended December 31, 2022 2021 Variance Sales Americas $ 13,874 $ 12,103 15 % EMEA 8,443 7,643 10 % APAC 6,480 6,133 6 % Engineering 2,762 2,867 (4) % Other 1,805 2,047 (12) % Total sales $ 33,364 $ 30,793 8 % Operating Profit Americas $ 3,732 $ 3,368 11 % EMEA 2,013 1,889 7 % APAC 1,670 1,502 11 % Engineering 555 473 17 % Other (66) (56) (18) % Segment operating profit 7,904 7,176 10 % Reconciliation to reported operating profit : Russia-Ukraine conflict and other charges (Note 3) (1,029) (273) Purchase accounting impacts - Linde AG (1,506) (1,919) Total operating profit $ 5,369 $ 4,984 27 Table of Contents Americas (Dollar amounts in millions) Variance Year Ended December 31, 2022 2021 2022 vs. 2021 Sales $ 13,874 $ 12,103 15 % Operating profit $ 3,732 $ 3,368 11 % As a percent of sales 26.9 % 27.8 % 2022 vs. 2021 % Change Factors Contributing to Changes - Sales Volume 4 % Price/Mix 6 % Cost pass-through 5 % Currency — % Acquisitions/Divestitures — % 15 % The Americas segment includes Linde’s industrial gases operations in approximately 20 countries including the United States, Canada, Mexico and Brazil.
(Millions of dollars) Year Ended December 31, 2023 2022 Variance Sales Americas $ 14,304 $ 13,874 3 % EMEA 8,542 8,443 1 % APAC 6,559 6,480 1 % Engineering 2,160 2,762 (22) % Other 1,289 1,805 (29) % Total sales $ 32,854 $ 33,364 (2) % Operating Profit Americas $ 4,244 $ 3,732 14 % EMEA 2,486 2,013 23 % APAC 1,806 1,670 8 % Engineering 491 555 (12) % Other 43 (66) 165 % Segment operating profit 9,070 7,904 15 % Reconciliation to reported operating profit : Other charges (Note 3) (40) (1,029) Purchase accounting impacts - Linde AG (1,006) (1,506) Total operating profit $ 8,024 $ 5,369 28 Table of Contents Americas (Dollar amounts in millions) Variance Year Ended December 31, 2023 2022 2023 vs. 2022 Sales $ 14,304 $ 13,874 3 % Operating profit $ 4,244 $ 3,732 14 % As a percent of sales 29.7 % 26.9 % 2023 vs. 2022 % Change Factors Contributing to Changes - Sales Volume — % Price/Mix 6 % Cost pass-through (6) % Currency — % Acquisitions/Divestitures 3 % 3 % The Americas segment includes Linde’s industrial gases operations in approximately 20 countries including the United States, Canada, Mexico and Brazil.
Operating Profit Operating profit in the Americas segment increased $364 million, or 11%, in 2022 versus 2021 driven primarily by higher pricing, volumes and continued productivity initiatives which more than offset inflation.
Volumes and currency translation remained flat. Operating Profit Operating profit in the Americas segment increased $512 million, or 14%, in 2023 versus 2022 driven primarily by higher pricing, acquisitions and continued productivity initiatives which more than offset cost inflation the year.
Divestiture proceeds for the year include cash received from the sale of the company's GIST business of $184 million, net of cash divested of $75 million, for net proceeds of $109 million (See Note 2 to the consolidated financial statements).
Divestitures and asset sales, net of cash divested in 2023 were $70 million as compared to $195 million in 2022. Divestiture proceeds in 2022 include cash received from the sale of the company's GIST business of $184 million, net of cash divested of $75 million, for net proceeds of $109 million (see Note 2 to the consolidated financial statements).
December 31, 2022 December 31, 2021 (Millions of dollars) Debt $ 17,914 $ 14,207 Less: cash and cash equivalents (5,436) (2,823) Net debt 12,478 11,384 Less: purchase accounting impacts - Linde AG (22) (61) Adjusted net debt $ 12,456 $ 11,323 42 Table of Contents SUPPLEMENTAL GUARANTEE INFORMATION On June 6, 2020, the company filed a Form S-3 Registration Statement with the SEC (the "Registration Statement").
December 31, 2023 December 31, 2022 (Millions of dollars) Debt $ 19,373 $ 17,914 Less: cash and cash equivalents (4,664) (5,436) Net debt 14,709 12,478 Less: purchase accounting impacts - Linde AG (7) (22) Adjusted net debt $ 14,702 $ 12,456 43 Table of Contents SUPPLEMENTAL GUARANTEE INFORMATION On May 3, 2023, the company filed a Form S-3 Registration Statement with the SEC ("the Registration Statement").
The increase was primarily due to higher pricing, volumes, savings from productivity initiatives, and lower depreciation and amortization driven by merger related 22 Table of Contents assets. These increases more than offset the adverse impacts of inflation and currency in the year as well as the Russia-Ukraine conflict and other charges of $1,029 million.
The increase in the reported operating profit was primarily driven by the Russia-Ukraine conflict and other charges recorded in 2022 and included higher pricing, savings from productivity initiatives, and lower depreciation and amortization driven by merger related intangible assets. These increases more than offset the adverse impacts of cost inflation and lower volumes in the year.
Traditionally, hydrogen production plants and a large number of other manufacturing and electricity-generating plants have been identified in California and the European Union as a source of carbon dioxide emissions and these plants are subject to cap-and-trade regulations in those jurisdictions.
Traditionally, hydrogen production plants and a large number of other manufacturing and electricity-generating plants have been identified as sources of carbon dioxide emissions and these plants are subject to cap-and-trade regulations in jurisdictions including California and the European Union. Linde believes it will be able to mitigate the costs of these regulations through the terms of its product supply contracts.
Therefore, the company believes the risk of the financial institutions being unable to make required loans under the credit facilities, if requested, to be low. Linde’s major bank credit and long-term debt agreements contain standard covenants. The company was in compliance with these covenants at December 31, 2022 and expects to remain in compliance for the foreseeable future.
Linde's credit facilities are with major financial institutions and are non-cancelable until maturity. Therefore, the company believes the risk of the financial institutions being unable to make required loans under the credit facilities, if requested, to be low. Linde’s major bank credit and long-term debt agreements contain standard covenants.
Income from continuing operations Reported income from continuing operations increased $326 million, or 9%. On an adjusted basis, which excludes the impacts of purchase accounting and Russia-Ukraine conflict and other charges, income from continuing operations increased $616 million, or 11%, in 2022 versus 2021. On both a reported and adjusted basis, the increase was driven by higher operating profit.
On an adjusted basis, which excludes the impacts of purchase accounting and other charges, net income - Linde plc increased $794 million, or 13%, in 2023 versus 2022. On both a reported and adjusted basis, the increase was driven by higher operating profit.
Operating profit growth was driven by higher pricing, volumes and productivity initiatives, which more than offset the effects of inflation and currency during the period. A discussion of operating profit by segment is included in the segment discussion that follows. Interest expense - net Reported interest expense – net in 2022 decreased $14 million, or 18%, versus 2021.
Operating profit growth was driven by higher pricing, and productivity initiatives, partially offset by cost inflation and lower volumes. A discussion of operating profit by segment is included in the segment discussion that follows. Interest expense - net Reported interest expense – net in 2023 increased $137 million, or 217%, versus 2022.
(Millions of dollars, except per share data) Year Ended December 31, 2022 2021 Variance Reported Amounts Sales $ 33,364 $ 30,793 8 % Cost of sales, exclusive of depreciation and amortization $ 19,450 $ 17,543 11 % As a percent of sales 58.3 % 57.0 % Selling, general and administrative $ 3,107 $ 3,189 (3) % As a percent of sales 9.3 % 10.4 % Depreciation and amortization $ 4,204 $ 4,635 (9) % Russia-Ukraine conflict and other charges (a) $ 1,029 $ 273 — Operating Profit $ 5,369 $ 4,984 8 % Operating margin 16.1 % 16.2 % Interest expense – net $ 63 $ 77 (18) % Net pension and OPEB cost (benefit), excluding service cost $ (237) $ (192) 23 % Effective tax rate 25.9 % 24.7 % Income from equity investments $ 172 $ 119 45 % Noncontrolling interests from continuing operations $ (134) $ (135) (1) % Income from continuing operations $ 4,147 $ 3,821 9 % Diluted earnings per share from continuing operations $ 8.23 $ 7.32 12 % Diluted shares outstanding 504,038 521,875 (3) % Number of employees 65,010 72,327 (10) % Adjusted Amounts (b) Operating profit $ 7,904 $ 7,176 10 % Operating margin 23.7 % 23.3 % Income from continuing operations $ 6,195 $ 5,579 11 % Diluted earnings per share from continuing operations $ 12.29 $ 10.69 15 % Other Financial Data (b) EBITDA from continuing operations $ 9,745 $ 9,738 — % As percent of sales 29.2 % 31.6 % Adjusted EBITDA from continuing operations $ 10,873 $ 10,179 7 % As percent of sales 32.6 % 33.1 % ________________________ (a) See Note 3 to the consolidated financial statements.
(Millions of dollars, except per share data) Year Ended December 31, 2023 2022 Variance Reported Amounts Sales $ 32,854 $ 33,364 (2) % Cost of sales, exclusive of depreciation and amortization $ 17,492 $ 19,450 (10) % As a percent of sales 53.2 % 58.3 % Selling, general and administrative $ 3,295 $ 3,107 6 % As a percent of sales 10.0 % 9.3 % Depreciation and amortization $ 3,816 $ 4,204 (9) % Other charges (a) $ 40 $ 1,029 — Operating Profit $ 8,024 $ 5,369 49 % Operating margin 24.4 % 16.1 % Interest expense – net $ 200 $ 63 217 % Net pension and OPEB cost (benefit), excluding service cost $ (164) $ (237) (31) % Effective tax rate 22.7 % 25.9 % Income from equity investments $ 167 $ 172 (3) % Noncontrolling interests $ (142) $ (134) 6 % Net Income - Linde plc $ 6,199 $ 4,147 49 % Diluted earnings per share $ 12.59 $ 8.23 53 % Diluted shares outstanding 492,290 504,038 (2) % Number of employees 66,323 65,010 2 % Adjusted Amounts (b) Operating profit $ 9,070 $ 7,904 15 % Operating margin 27.6 % 23.7 % Net Income - Linde plc $ 6,989 $ 6,195 13 % Diluted earnings per share $ 14.20 $ 12.29 16 % Other Financial Data (b) EBITDA $ 12,007 $ 9,745 23 % As percent of sales 36.5 % 29.2 % Adjusted EBITDA $ 12,133 $ 10,873 12 % As percent of sales 36.9 % 32.6 % ________________________ (a) See Note 3 to the consolidated financial statements.
Adjusted Amounts (Dollar amounts in millions, except per share data) Year Ended December 31, 2022 2021 Adjusted Operating Profit and Operating Margin Reported operating profit $ 5,369 $ 4,984 Add: Russia-Ukraine conflict and other charges (a) 1,029 273 Add: Purchase accounting impacts - Linde AG (c) 1,506 1,919 Total adjustments 2,535 2,192 Adjusted operating profit $ 7,904 $ 7,176 Reported percentage change 8 % Adjusted percentage change 10 % Reported sales $ 33,364 $ 30,793 Reported operating margin 16.1 % 16.2 % Adjusted operating margin 23.7 % 23.3 % Adjusted Depreciation and amortization Reported depreciation and amortization $ 4,204 $ 4,635 Less: Purchase accounting impacts - Linde AG (c) (1,481) (1,863) Adjusted depreciation and amortization $ 2,723 $ 2,772 Adjusted Other Income (Expense) - net Reported Other Income (Expense) - net $ (62) $ (26) Add: Purchase accounting impacts - Linde AG (c) (25) (56) Adjusted Other Income (Expense) - net $ (37) $ 30 Adjusted Net Pension and OPEB Cost (Benefit), Excluding Service Cost Reported net pension and OPEB cost (benefit), excluding service cost $ (237) $ (192) Add: Pension settlement charges (6) (4) Adjusted Net Pension and OPEB cost (benefit), excluding service costs $ (243) $ (196) Adjusted Interest Expense - Net Reported interest expense - net $ 63 $ 77 Add: Purchase accounting impacts - Linde AG (c) 35 53 Adjusted interest expense - net $ 98 $ 130 39 Table of Contents Adjusted Income Taxes (a) Reported income taxes $ 1,434 $ 1,262 Add: Purchase accounting impacts - Linde AG (c) 374 452 Add: Pension settlement charges 1 1 Add: Russia-Ukraine conflict and other charges (a) 136 29 Total adjustments 511 482 Adjusted income taxes $ 1,945 $ 1,744 Adjusted Effective Tax Rate (a) Reported income before income taxes and equity investments $ 5,543 $ 5,099 Add: Pension settlement charge 6 4 Add: Purchase accounting impacts - Linde AG (c) 1,471 1,866 Add: Russia-Ukraine conflict and other charges (a) 1,029 273 Total adjustments 2,506 2,143 Adjusted income before income taxes and equity investments $ 8,049 $ 7,242 Reported Income taxes $ 1,434 $ 1,262 Reported effective tax rate 25.9% 24.7% Adjusted income taxes $ 1,945 $ 1,744 Adjusted effective tax rate 24.2% 24.1% Income from Equity Investments Reported income from equity investments $ 172 $ 119 Add: Russia-Ukraine conflict and other charges (d) — 35 Add: Purchase accounting impacts - Linde AG (c) 75 77 Total adjustments 75 112 Adjusted income from equity investments $ 247 $ 231 Adjusted Noncontrolling Interests from Continuing Operations Reported noncontrolling interests from continuing operations $ (134) $ (135) Add: Purchase accounting impacts - Linde AG (c) (22) (15) Adjusted noncontrolling interests from continuing operations $ (156) $ (150) Adjusted Income from Continuing Operations (b) Reported income from continuing operations $ 4,147 $ 3,821 Add: Pension settlement charge 5 3 Add: Russia-Ukraine conflict and other charges (a) 893 279 Add: Purchase accounting impacts - Linde AG (c) 1,150 1,476 Total adjustments 2,048 1,758 Adjusted income from continuing operations $ 6,195 $ 5,579 Adjusted Diluted EPS from Continuing Operations (b) Reported diluted EPS from continuing operations $ 8.23 $ 7.32 Add: Pension settlement charge 0.01 0.01 Add: Russia-Ukraine conflict and other charges (a) 1.77 0.53 Add: Purchase accounting impacts - Linde AG (c) 2.28 2.83 Total adjustments 4.06 3.37 Adjusted diluted EPS from continuing operations $ 12.29 $ 10.69 40 Table of Contents Reported percentage change 12 % Adjusted percentage change 15 % Adjusted EBITDA and % of Sales Income from continuing operations $ 4,147 $ 3,821 Add: Noncontrolling interests related to continuing operations 134 135 Add: Net pension and OPEB cost (benefit), excluding service cost (237) (192) Add: Interest expense 63 77 Add: Income taxes 1,434 1,262 Add: Depreciation and amortization 4,204 4,635 EBITDA from continuing operations 9,745 9,738 Add: Russia-Ukraine conflict and other charges (a) 1,029 308 Add: Purchase accounting impacts - Linde AG (c) 99 133 Total adjustments 1,128 441 Adjusted EBITDA from continuing operations $ 10,873 $ 10,179 Reported sales $ 33,364 $ 30,793 % of sales EBITDA from continuing operations 29.2 % 31.6 % Adjusted EBITDA from continuing operations 32.6 % 33.1 % (a) The income tax expense (benefit) on the non-GAAP pre-tax adjustments was determined using the applicable tax rates for the jurisdictions that were utilized in calculating the GAAP income tax expense (benefit) and included both current and deferred income tax amounts.
Adjusted Amounts (Dollar amounts in millions, except per share data) Year Ended December 31, 2023 2022 Adjusted Operating Profit and Operating Margin Reported operating profit $ 8,024 $ 5,369 Add: Other charges (a) 40 1,029 Add: Purchase accounting impacts - Linde AG (c) 1,006 1,506 Total adjustments 1,046 2,535 Adjusted operating profit $ 9,070 $ 7,904 Reported percentage change 49 % Adjusted percentage change 15 % Reported sales $ 32,854 $ 33,364 Reported operating margin 24.4 % 16.1 % Adjusted operating margin 27.6 % 23.7 % Adjusted Depreciation and amortization Reported depreciation and amortization $ 3,816 $ 4,204 Less: Purchase accounting impacts - Linde AG (c) (991) (1,481) Adjusted depreciation and amortization $ 2,825 $ 2,723 Adjusted Other Income (Expense) - net Reported Other Income (Expense) - net $ (41) $ (62) Add: Purchase accounting impacts - Linde AG (c) (15) (25) Adjusted Other Income (Expense) - net $ (26) $ (37) Adjusted Net Pension and OPEB Cost (Benefit), Excluding Service Cost Reported net pension and OPEB cost (benefit), excluding service cost $ (164) $ (237) Add: Pension settlement charges (16) (6) Adjusted Net Pension and OPEB cost (benefit), excluding service costs $ (180) $ (243) Adjusted Interest Expense - Net Reported interest expense - net $ 200 $ 63 Add: Purchase accounting impacts - Linde AG (c) 16 35 Adjusted interest expense - net $ 216 $ 98 40 Table of Contents Adjusted Income Taxes (a) Reported income taxes $ 1,814 $ 1,434 Add: Purchase accounting impacts - Linde AG (c) 232 374 Add: Pension settlement charges 3 1 Add: Other charges (a) 81 136 Total adjustments 316 511 Adjusted income taxes $ 2,130 $ 1,945 Adjusted Effective Tax Rate (a) Reported income before income taxes and equity investments $ 7,988 $ 5,543 Add: Pension settlement charge 16 6 Add: Purchase accounting impacts - Linde AG (c) 990 1,471 Add: Other charges (a) 40 1,029 Total adjustments 1,046 2,506 Adjusted income before income taxes and equity investments $ 9,034 $ 8,049 Reported Income taxes $ 1,814 $ 1,434 Reported effective tax rate 22.7% 25.9% Adjusted income taxes $ 2,130 $ 1,945 Adjusted effective tax rate 23.6% 24.2% Income from Equity Investments Reported income from equity investments $ 167 $ 172 Add: Purchase accounting impacts - Linde AG (c) 72 75 Total adjustments 72 75 Adjusted income from equity investments $ 239 $ 247 Adjusted Noncontrolling Interests Reported noncontrolling interests $ (142) $ (134) Add: Purchase accounting impacts - Linde AG (c) (12) (22) Adjusted noncontrolling interests $ (154) $ (156) Adjusted Net Income - Linde plc (b) Reported net income $ 6,199 $ 4,147 Add: Pension settlement charge 13 5 Add: Other charges (a) (41) 893 Add: Purchase accounting impacts - Linde AG (c) 818 1,150 Total adjustments 790 2,048 Adjusted net income - Linde plc $ 6,989 $ 6,195 Adjusted Diluted EPS (b) Reported diluted EPS $ 12.59 $ 8.23 Add: Pension settlement charge 0.03 0.01 Add: Other charges (a) (0.08) 1.77 41 Table of Contents Add: Purchase accounting impacts - Linde AG (c) 1.66 2.28 Total adjustments 1.61 4.06 Adjusted diluted EPS $ 14.20 $ 12.29 Reported percentage change 53 % Adjusted percentage change 16 % Adjusted EBITDA and % of Sales Net Income - Linde plc $ 6,199 $ 4,147 Add: Noncontrolling interests 142 134 Add: Net pension and OPEB cost (benefit), excluding service cost (164) (237) Add: Interest expense 200 63 Add: Income taxes 1,814 1,434 Add: Depreciation and amortization 3,816 4,204 EBITDA 12,007 9,745 Add: Other charges (a) 40 1,029 Add: Purchase accounting impacts - Linde AG (c) 86 99 Total adjustments 126 1,128 Adjusted EBITDA $ 12,133 $ 10,873 Reported sales $ 32,854 $ 33,364 % of sales EBITDA 36.5 % 29.2 % Adjusted EBITDA 36.9 % 32.6 % (a) The income tax expense (benefit) on the non-GAAP pre-tax adjustments was determined using the applicable tax rates for the jurisdictions that were utilized in calculating the GAAP income tax expense (benefit) and included both current and deferred income tax amounts.
Discretionary contributions in excess of the local minimum requirements are made based on many factors, including long-term projections of the plans' funded status, the economic environment, potential risk of overfunding, pension insurance costs and alternative uses of cash. Changes to these factors can impact the timing of discretionary contributions from year to year.
At a minimum, Linde contributes to its pension plans to comply with local regulatory requirements (e.g., ERISA in the U.S.). Discretionary contributions in excess of the local minimum requirements are made based on many factors, including long-term projections of the plans' funded status, the economic environment, potential risk of overfunding, pension insurance costs and alternative uses of cash.
To manage business risks from current and potential GHG emission regulation as well as physical consequences of climate change, Linde actively monitors current developments, evaluates the direct and indirect business risks, and takes appropriate actions.
However, legislation that limits GHG emissions may impact growth by increasing capital, compliance, operating and maintenance costs and/or decreasing demand. To manage business risks from current and potential GHG emission regulation as well as physical consequences of climate change, Linde actively monitors current developments, evaluates the direct and indirect business risks, and takes appropriate actions.
The weighted-average expected long-term rates of return on pension plan assets were 7.00% for U.S. plans and 5.60% for non-U.S. plans for the year ended December 31, 2022 (7.00% and 5.28%, respectively at December 31, 2021).
The sensitivities to each of the key assumptions presented below exclude the impact of special items that occurred during the year. The weighted-average expected long-term rates of return on pension plan assets were 7.00% for U.S. plans and 5.64% for non-U.S. plans at December 31, 2023 (7.00% and 5.60%, respectively at December 31, 2022).
The increase in adjusted operating profit increase was primarily due to higher pricing and productivity initiatives, which more than offset the adverse impacts of inflation and currency in the year.* • Income from continuing operations of $4,147 million and diluted earnings per share from continuing operations of $8.23 increased from $3,821 million and $7.32, respectively in 2021.
The adjusted operating profit increase was primarily due to higher pricing and productivity initiatives, which more than offset the effects of cost inflation and lower volumes during the year.* • Net income - Linde plc of $6,199 million and diluted earnings per share of $12.59 increased from $4,147 million and $8.23, respectively in 2022.
Excluding currency impacts, underlying SG&A increased primarily due to higher costs. Depreciation and amortization Reported depreciation and amortization expense decreased $431 million, or 9% versus 2021. The decrease is primarily due to lower depreciation and amortization of assets acquired in the merger and currency impacts. On an adjusted basis, depreciation and amortization expense decreased $49 million, or 2%, versus 2021.
The decrease is primarily due to lower depreciation and amortization of assets acquired in the merger. On an adjusted basis, depreciation and amortization expense increased $102 million, or 4%, versus 2022. Currency impacts decreased depreciation and amortization by $29 million in 2023.
Acquisitions, net of cash acquired for 2022 were $110 million, an increase of $22 million from 2021. Acquisitions, net of cash acquired for the year ended December 31, 2021 were $88 million. Acquisitions in each period related primarily to the Americas and EMEA.
Acquisitions, net of cash acquired for 2023 were $953 million, an increase of $843 million from 2022, and related primarily to the acquisition of nexAir in the Americas (see Note 2 to the consolidated financial statements). Acquisitions, net of cash acquired for the year ended December 31, 2022 were $110 million related primarily to the Americas and EMEA segments.
Estimated required contributions for 2023 are currently expected to be in the range of $40 million to $50 million. Linde assumes expected returns on plan assets for 2023 of 7.00% and 5.60% f or the U.S. and non-U.S. plans, respectively, which are consistent with the long-term expected returns on its investment portfolios.
Linde assumes expected returns on plan assets for 2024 of 7.00% and 5.83% f or the U.S. and non-U.S. plans, respectively, which are consistent with the long-term expected returns on its investment portfolios. Excluding the impact of any settlements, 2024 consolidated pension expense is expected to be a benefit of approximately $115 million .
Management believes that the quantitative and qualitative factors used to perform its annual goodwill impairment assessment are appropriate and reasonable.
Reporting units are determined based on one level below the operating segment level. 37 Table of Contents Management believes that the quantitative and qualitative factors used to perform its annual goodwill impairment assessment are appropriate and reasonable.
The primary uses of cash included capital expenditures of $3,173 million, net purchases of ordinary shares of $5,132 million, cash dividends to shareholders of $2,344 million. 2022 compared with 2021 Cash Flows From Operations Cash flows from operations was $8,864 million, a decrease of $861 million from 2021.
The primary uses of cash included capital expenditures of $3,787 million, net purchases of ordinary shares of $3,925 million, cash dividends to shareholders of $2,482 million. 2023 compared with 2022 Cash Flows From Operations Cash flows from operations was $9,305 million, an increase of $441 million from 2022.
Currently, the company self retains up to $10 million per occurrence for vehicle liability in the United States, $5 million per occurrence for workers' compensation and general liability.
Insurance Linde purchases insurance to limit a variety of property and casualty risks, including those related to property, business interruption, third-party liability and workers’ compensation. Currently, the company self retains up to $10 million per occurrence for vehicle liability in the United States, $5 million per occurrence for workers' compensation and general liability.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

8 edited+1 added−2 removed4 unchanged
Also, see Note 1 and Note 12 to the consolidated financial statements for a more complete description of Linde’s accounting policies and use of such instruments. The following discussion presents the sensitivity of the market value, earnings and cash flows of Linde’s financial instruments to hypothetical changes in interest and exchange rates assuming these changes occurred at December 31, 2022.
Also, see Note 1 and Note 12 to the consolidated financial statements for a more complete description of Linde’s accounting policies and use of such instruments. The following discussion presents the sensitivity of the market value, earnings and cash flows of Linde’s financial instruments to hypothetical changes in interest and exchange rates assuming these changes occurred at December 31, 2023.
At December 31, 2022, Linde had a notional amount outstanding of $3,870 million ($5,870 million at December 31, 2021) related to foreign exchange contracts. The majority of these were to hedge recorded balance sheet exposures, primarily intercompany loans denominated in non-functional currencies. See Note 12 to the consolidated financial statements.
At December 31, 2023, Linde had a notional amount outstanding of $5,651 million ($3,870 million at December 31, 2022) related to foreign exchange contracts. The majority of these were to hedge recorded balance sheet exposures, primarily intercompany loans denominated in non-functional currencies. See Note 12 to the consolidated financial statements.
This sensitivity analysis assumes that, holding all other variables constant (such as foreign exchange rates, swaps and debt levels), a one hundred basis point increase in interest rates would decrease the unrealized fair market value of the fixed-rate debt portfolio by approximately $666 million ($834 million in 2021).
Fixed Rate Debt This sensitivity analysis assumes that, holding all other variables constant (such as foreign exchange rates, swaps and debt levels), a one hundred basis point increase in interest rates would decrease the unrealized fair market value of the fixed-rate debt portfolio by approximately $742 million ($666 million in 2022).
Variable Rate Debt At December 31, 2022, the after-tax earnings and cash flows impact of a one hundred basis point increase in interest rates, including offsetting impact of derivatives, on the variable-rate debt portfolio would be approximately $25 million ($33 million in 2021).
Variable Rate Debt At December 31, 2023, the after-tax earnings and cash flows impact of a one hundred basis point increase in interest rates, including offsetting impact of derivatives, on the variable-rate debt portfolio would be approximately $50 million ($25 million in 2022).
The range of changes chosen for these discussions reflects Linde’s view of changes which are reasonably possible over a one-year period. Market values represent the present values of projected future cash flows based on interest rate and exchange rate assumptions. Interest Rate Risk At December 31, 2022, Linde had debt totaling $17,914 million ($14,207 million at December 31, 2021).
The range of changes chosen for these discussions reflects Linde’s view of changes which are reasonably possible over a one-year period. Market values represent the present values of projected future cash flows based on interest rate and exchange rate assumptions. Interest Rate Risk At December 31, 2023, Linde had debt totaling $19,373 million ($17,914 million at December 31, 2022).
Holding all other variables constant, if there were a 10% increase in foreign-currency exchange rates for the portfolio, the fair market value of foreign-currency contracts outstanding at December 31, 2022 would increase by approximately $83 million and at December 31, 2021 would decrease by approximately $28 million, which would be largely offset by an offsetting loss or gain on the foreign-currency fluctuation of the underlying exposure being hedged. 45 Table of Contents
Holding all other variables constant, if there were a 10% increase in foreign-currency exchange rates for the portfolio, the fair market value of foreign-currency contracts outstanding at December 31, 2023 would decrease by approximately $58 million and at December 31, 2022 would increase by approximately $83 million, which would be largely offset by an offsetting loss or gain on the foreign-currency fluctuation of the underlying exposure being hedged.
A one hundred basis point increase in interest rates would result in an approximate $21 million decrease to derivative assets recorded.
A one hundred basis point increase in interest rates would result in an approximate $65 million increase to derivative assets recorded.
At December 31, 2022, including the impact of derivatives, Linde had fixed-rate debt of $13,000 million and floating-rate debt of $4,914 million, representing 73% and 27%, respectively, of total debt. At December 31, 2021, Linde had fixed-rate debt of $12,492 million and floating-rate debt of $1,715 million, representing 88% and 12%, respectively, of total debt.
At December 31, 2023, including the impact of derivatives, Linde had fixed-rate debt of $14,345 million and floating-rate debt of $5,028 million, representing 74% and 26%, respectively, of total debt. At December 31, 2022, including the impact of derivatives, Linde had fixed-rate debt of $13,000 million and floating-rate debt of $4,914 million, representing 73% and 27%, respectively, of total debt.
Removed
Fixed Rate Debt In order to mitigate interest rate risk, when considered appropriate, interest-rate swaps are entered into as hedges of underlying financial instruments to effectively change the characteristics of the interest rate without actually changing the underlying financial instrument.
Added
Holding all other variables constant, if there were a 10% increase in foreign-currency exchange rates on the external debt portfolio, the fair market value of foreign-currency denominated debt outstanding at December 31, 2023 would decrease by approximately $970 million and at December 31, 2022 would decrease by approximately $803 million, which would be largely offset by an offsetting loss or gain on the underlying exposure being hedged. 46 Table of Contents
Removed
At December 31, 2022, Linde had fixed-to-floating interest rate swaps outstanding that were designated as hedging instruments of the underlying debt issuances - refer to Note 12 to the consolidated financial statements for additional information.

Other LIN 10-K year-over-year comparisons