1. ~~Organization~~Summary of Significant Accounting Policies

Presentation of Condensed Consolidated Financial Statements- In the opinion of Linde management, the accompanying condensed consolidated financial statements include all adjustments necessary for a fair presentation of the results for the interim periods presented and ~~Basis~~such adjustments are of ~~Presentation~~

a normal recurring nature. The accompanying condensed consolidated financial statements should be read in conjunction with the notes to the consolidated financial statements of Linde plc ~~formerly known~~and subsidiaries in Linde's 2020 Annual Report on Form 10-K. There have been no material changes to the company’s significant accounting policies during 2021.

Accounting Standards Implemented in 2021

•Income Taxes - Simplifying the Accounting for Income Taxes - In December 2019, the FASB issued guidance which simplifies the accounting for income taxes by removing several exceptions in the current standard and adds guidance to reduce complexity in certain areas, such as ~~Zamalight plc("Linde plc"~~requiring that an entity reflect the effect of an enacted change in tax laws or rates in the ~~“Company”), was incorporated as~~annual effective tax rate computation in the interim period that includes the enactment date, evaluating whether a ~~public limited company under~~step-up in tax basis of goodwill relates to a business combination or a separate transaction and allocating taxes to members of a consolidated group. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The adoption of this standard did not materially impact the ~~laws of Ireland on April 18, 2017, by Enceladus Holding Limited~~company's consolidated financial statements.

Accounting Standards to be Implemented

•Reference Rate Reform - In March 2020, the FASB issued guidance related to reference rate reform which provides practical expedients and ~~Cumberland Corporate Services Limited, with an issued share capital of €25,000 ($26,827), comprised of 25,000 A ordinary shares with a nominal value of €1.00 each,~~exceptions for applying GAAP to contract modifications, hedging relationships and ~~additional paid in capital of €25,000 ($26,827).~~other transactions that the reference London Interbank Offered Rate (“LIBOR”) and other interbank offered rates. This update is applicable to our contracts and hedging relationships that reference LIBOR and other interbank offered rates. The ~~A ordinary shares of €1.00 each were initially issued on Linde plc’s incorporation as ordinary shares. These shares were subsequently re-designated as A ordinary shares on July 25, 2017.~~

~~The Company is registered in Ireland under the registration number 602527~~amendments may be applied to impacted contracts and with its registered office located at c/o Ten Earlsfort Terrace, Dublin 2, D02 T380 Ireland and principal executive offices at The Priestley Centre, 10 Priestley Road, The Surrey Research Park, Guildford, Surrey GU2 7XY, United Kingdom. The Company was formed on April 18, 2017; accordingly, the financial statements as of that date only comprise the balance sheet (“opening balance sheet”). The Company’s fiscal year ends onhedges prospectively through December 31, ~~2017.~~2022. We are currently evaluating the impact of this guidance on our consolidated financial statements.

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

2. Cost Reduction Programs and Other Charges

2021 Charges

Cost reduction programs and other charges were a benefit of $8 million for the three months ended March 31, 2021 (benefit of $28 million, after tax). The ~~Company was formed in accordance~~following table summarizes the activities related to the company's cost reduction charges for the three months ended March 31, 2021:


	Quarter Ended March 31, 2021
(millions of dollars)	Severance costs		Other cost reduction charges		Total cost reduction program related charges		Merger-related and other charges		Total
Americas	$	3	$	2	$	5	$	0	$	5
EMEA	13		7		20		0		20
APAC	2		2		4		(53)		(49)
Engineering	7		0		7		0		7
Other	1		7		8		1		9
Total	$	26	$	18	$	44	$	(52)	$	(8)

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Cost Reduction Programs

Total cost reduction program related charges were $44 million for the three months ended March 31, 2021 ($34 million, after tax).

Severance costs

Severance costs were $26 million for the three months ended March 31, 2021. As of March 31, 2021, the majority of the actions have been taken, with the remaining actions anticipated to be completed by the end of the fiscal year.

Other cost reduction charges

Other cost reduction charges of $18 million for the three months ended March 31, 2021 are primarily charges related to the execution of the company's synergistic actions including location consolidations and business rationalization projects, process harmonization, and associated non-recurring costs.

Merger-related Costs and Other Charges

Merger-related costs and other charges were a benefit of $52 million (benefit of $62 million, after tax) for the three months ended March 31, 2021, primarily due to a $52 million gain triggered by a joint venture deconsolidation in the APAC segment (see Note 13), and other tax adjustments.

Cash Requirements

The total cash requirements of the ~~Business Combination Agreement, dated~~cost reduction program and other charges during the three months ended March 31, 2021 are estimated to be approximately $24 million and are expected to be paid through 2022. Total cost reduction programs and other charges, net of payments in the condensed consolidated statements of cash flows for the three months ended March 31, 2021 also reflects the impact of cash payments of liabilities, including merger-related tax liabilities, accrued as of ~~June 1, 2017,~~December 31, 2020.

The following table summarizes the activities related to the company's cost reduction related charges for the three months ended March 31, 2021:


(millions of dollars)	Severance costs		Other cost reduction charges		Total cost reduction program related charges		Merger-related and other charges		Total




Balance, December 31, 2020	$	283	$	22	$	305	$	64	$	369
2021 Cost Reduction Programs and Other Charges	26		18		44		(52)		(8)
Less: Cash payments	(54)		(1)		(55)		(4)		(59)
Less: Non-cash charges / benefits	0		(13)		(13)		52		39
Foreign currency translation and other	(4)		0		(4)		(3)		(7)
Balance, March 31, 2021	$	251	$	26	$	277	$	57	$	334

2020 Charges

Cost reduction programs and other charges were $131 million for the three months ended March 31, 2020 ($95 million, after tax). Total cost reduction program related charges were $78 million ($56 million, after tax), which consisted primarily of severance charges of $58 million, largely in the EMEA and Engineering segments. Merger-related and other charges were $53 million ($39 million, after tax).

Classification in the condensed consolidated financial statements

The costs are shown within operating profit in a separate line item on the consolidated statements of income. On the condensed consolidated statements of cash flows, the impact of these costs, net of cash payments, is shown as ~~amended (the "Business Combination Agreement"), pursuant~~an adjustment to ~~which,~~reconcile net income to net cash provided by operating activities. In Note 10 Segments, Linde excluded these costs from its management definition of segment operating profit; a reconciliation of segment operating profit to consolidated operating profit is shown within the segment operating profit table.

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3. Supplemental Information

Receivables

Linde applies loss rates that are lifetime expected credit losses at initial recognition of the receivables. These expected loss rates are based on an analysis of the actual historical default rates for each business, taking regional circumstances into account. If necessary, these historical default rates are adjusted to reflect the impact of current changes in the macroeconomic environment using forward-looking information. The loss rates are also evaluated based on the expectations of the responsible management team regarding the collectability of the receivables. Gross trade receivables aged less than one year were $4,125 million and $4,169 million at March 31, 2021 and December 31, 2020 respectively and gross receivables aged greater than one year were $338 million and $358 million at March 31, 2021 and December 31, 2020 respectively. Other receivables were $122 million and $111 million at March 31, 2021 and December 31, 2020, respectively. Receivables aged greater than one year are generally fully reserved unless specific circumstances warrant exceptions, such as those backed by federal governments.

Accounts receivable net of reserves were $4,139 million at March 31, 2021 and $4,167 million at December 31, 2020. Allowances for expected credit losses were $446 million at March 31, 2021 and $471 million at December 31, 2020. Provisions for expected credit losses were $39 million and $46 million for the three months ended March 31, 2021 and 2020, respectively. The allowance activity in the three months ended March 31, 2021 related to write-offs of uncollectible amounts, net of recoveries and currency movements is not material.

Inventories

The following is a summary of Linde's consolidated inventories:


(Millions of dollars)	March 31, 2021		December 31, 2020
Inventories
Raw materials and supplies	$	364	$	411
Work in process	347		337
Finished goods	984		981
Total inventories	$	1,695	$	1,729

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4. Debt

The following is a summary of Linde's outstanding debt at March 31, 2021 and December 31, 2020:


(Millions of dollars)	March 31, 2021		December 31, 2020
SHORT-TERM
Commercial paper	$	1,979	$	2,527
Other borrowings (primarily non U.S.)	1,297		724
Total short-term debt	3,276		3,251
LONG-TERM (a)
(U.S. dollar denominated unless otherwise noted)
3.875% Euro denominated notes due 2021 (b)	709		748
0.250% Euro denominated notes due 2022 (b)	1,178		1,226
2.45% Notes due 2022	600		599
2.20% Notes due 2022	499		499
2.70% Notes due 2023	499		499
2.00% Euro denominated notes due 2023 (b)	795		832
5.875% GBP denominated notes due 2023 (b)	455		460
1.20% Euro denominated notes due 2024	644		671
1.875% Euro denominated notes due 2024 (b)	372		389
2.65% Notes due 2025	399		398
1.625% Euro denominated notes due 2025	583		607
3.20% Notes due 2026	725		725
3.434% Notes due 2026	196		196
1.652% Euro denominated notes due 2027	96		100
0.250% Euro denominated notes due 2027	877		914
1.00% Euro denominated notes due 2028 (b)	918		966
1.10% Notes due 2030	696		696
1.90% Euro denominated notes due 2030	122		127
0.550% Euro denominated notes due 2032	873		909
3.55% Notes due 2042	664		664
2.00% Notes due 2050	296		296
Non U.S. borrowings	268		372
Other	10		10
	12,474		12,903
Less: current portion of long-term debt	(2,524)		(751)
Total long-term debt	9,950		12,152
Total debt	$	15,750	$	16,154

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

(b)March 31, 2021 and December 31, 2020 included a cumulative $62 million and $79 million adjustment to carrying value, respectively, related to hedge accounting of interest rate swaps. Refer to Note 5 for additional information.

The company maintains a $5 billion unsecured revolving credit agreement with a syndicate of banking institutions that expires March 26, 2024. There are no financial maintenance covenants contained within the credit agreement. NaN borrowings were outstanding under the credit agreement as of March 31, 2021.

5. Financial Instruments

In its normal operations, Linde is exposed to market risks relating to fluctuations in interest rates, foreign currency exchange rates, energy and commodity costs. The objective of financial risk management at Linde is to minimize the negative impact of such fluctuations on the company’s earnings and cash flows. To manage these risks, among other ~~things, Praxair, Inc.~~strategies, Linde routinely enters into various derivative financial instruments (“derivatives”) including interest-rate swap and treasury rate lock agreements, currency-swap agreements, forward contracts, currency options, and commodity-swap agreements. These instruments are not entered into for trading purposes and Linde ~~AG agreed~~only uses commonly traded and non-leveraged instruments.

There are 3 types of derivatives that the company enters into: (i) those relating to ~~combine their respective businesses through~~fair-value exposures, (ii) those relating to cash-flow exposures, and (iii) those relating to foreign currency net investment exposures. Fair-value exposures relate to recognized assets or liabilities, and firm commitments; cash-flow exposures relate to the variability of future cash flows associated with recognized assets or liabilities, or forecasted transactions; and net investment exposures relate to the impact of foreign currency exchange rate changes on the carrying value of net assets denominated in foreign currencies.

When a derivative is executed and hedge accounting is appropriate, it is designated as either a fair-value hedge, cash-flow hedge, or a net investment hedge. Currently, Linde designates all interest-rate and treasury-rate locks as hedges for accounting purposes; however, cross-currency contracts are generally not designated as hedges for accounting purposes. Certain currency contracts related to forecasted transactions are designated as hedges for accounting purposes. Whether designated as hedges for accounting purposes or not, all derivatives are linked to an ~~all-stock transaction, and become subsidiaries~~appropriate underlying exposure. On an ongoing basis, the company assesses the hedge effectiveness of all derivatives designated as hedges for accounting purposes to determine if they continue to be highly effective in offsetting changes in fair values or cash flows of the ~~Company. Zamalight plc~~underlying hedged items. If it is determined that the hedge is not highly effective through the use of a qualitative assessment, then hedge accounting will be discontinued prospectively.

Counterparties to Linde's derivatives are major banking institutions with credit ratings of investment grade or better. The company has Credit Support Annexes ("CSAs") in place with its principal counterparties to minimize potential default risk and to mitigate counterparty risk. Under the CSAs, the fair values of derivatives for the purpose of interest rate and currency management are collateralized with cash on a regular basis. As of March 31, 2021, the impact of such collateral posting arrangements on the fair value of derivatives was ~~renamed "Linde plc"~~insignificant. Management believes the risk of incurring losses on ~~July 20, 2017. In connection with~~derivative contracts related to credit risk is remote and any losses would be immaterial.

The following table is a summary of the ~~proposed business combination, Linde plc filed a Registration Statement~~notional amount and fair value of derivatives outstanding at March 31, 2021 and December 31, 2020 for consolidated subsidiaries:


					Fair Value
	Notional Amounts				Assets (a)				Liabilities (a)
(Millions of dollars)	March 31, 2021		December 31, 2020		March 31, 2021		December 31, 2020		March 31, 2021		December 31, 2020
Derivatives Not Designated as Hedging Instruments:
Currency contracts:
Balance sheet items	$	6,002	$	6,470	$	26	$	72	$	32	$	48
Forecasted transactions	705		823		6		16		9		12
Cross-currency swaps	194		260		23		24		6		7
Commodity contracts	N/A		N/A		2		1		N/A		N/A
Total	$	6,901	$	7,553	$	57	$	113	$	47	$	67
Derivatives Designated as Hedging Instruments:


Currency contracts:

Forecasted transactions	309		355		5		20		6		14


Commodity contracts	N/A		N/A		29		3		N/A		N/A

Interest rate swaps	1,859		1,923		50		64		0		0
Total Hedges	$	2,168	$	2,278	$	84	$	87	$	6	$	14
Total Derivatives	$	9,069	$	9,831	$	141	$	200	$	53	$	81

(a)March 31, 2021 and December 31, 2020 included current assets of $67 million and $110 million which are recorded in prepaid and other current assets; long-term assets of $74 million and $90 million which are recorded in other long-term assets; current liabilities of $42 million and $70 million which are recorded in other current liabilities; and long-term liabilities of $11 million and $11 million which are recorded in other long-term liabilities.

Balance Sheet Items

Foreign currency contracts related to balance sheet items consist of forward contracts entered into to manage the exposure to fluctuations in foreign-currency exchange rates on ~~Form S-4 which was declared effective~~recorded balance sheet assets and liabilities denominated in currencies other than the functional currency of the related operating unit. Certain forward currency contracts are entered into to protect underlying monetary assets and liabilities denominated in foreign currencies from foreign exchange risk and are not designated as hedging instruments. For balance sheet items that are not designated as hedging instruments, the fair value adjustments on these contracts are offset by the ~~U. S. Securities~~fair value adjustments recorded on the underlying monetary assets and ~~Exchange Commission~~liabilities.

Forecasted Transactions

Foreign currency contracts related to forecasted transactions consist of forward contracts entered into to manage the exposure to fluctuations in foreign-currency exchange rates on (1) forecasted purchases of capital-related equipment and services, (2) forecasted sales, or (3) other forecasted cash flows denominated in currencies other than the functional currency of the related operating units. For forecasted transactions that are designated as cash flow hedges, fair value adjustments are recorded to accumulated other comprehensive income ("~~SEC"~~AOCI") with deferred amounts reclassified to earnings over the same time period as the income statement impact of the associated forecasted transaction. For forecasted transactions that do not qualify for cash flow hedging relationships, fair value adjustments are recorded directly to earnings.

Cross-Currency Swaps

Cross-currency interest rate swaps are entered into to limit the foreign currency risk of future principal and interest cash flows associated with intercompany loans, and to a more limited extent bonds, denominated in non-functional currencies. The fair value adjustments on ~~August 14, 2017.~~the cross-currency swaps are recorded to earnings, where they are offset by fair value adjustments on the underlying intercompany loan or bond.

Commodity Contracts

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

Net Investment Hedge

As of March 31, 2021, Linde has ~~also filed an offer document with~~€2.3 billion ($2.7 billion) intercompany Euro-denominated credit facility loans and intercompany loans which are designated as hedges of the ~~German Federal Financial Supervisory Authority (Bundesanstalt fuer Finanzdienstleistungsaufsicht) (“BaFin”)~~net investment positions in foreign operations. Since hedge inception, the deferred loss recorded within the cumulative translation adjustment component of AOCI in the condensed consolidated balance sheets and the consolidated statements of comprehensive income is $137 million (deferred gain of $75 million recorded during the three months ended March 31, 2021).

As of March 31, 2021, exchange rate movements relating to previously designated hedges that remain in AOCI is a gain of $73 million. These movements will remain in AOCI, until appropriate, such as upon sale or liquidation of the related foreign operations at which was approved for publication by BaFin on August 14, 2017 and published by Linde plc on August 15, 2017. The offer is to exchange each issued and outstanding no-par value bearer share of Linde AG for 1.540 ordinary shares of Linde plc (the “Exchange Offer”). In addition, Zamalight Subco, Inc., an indirect wholly-owned Delaware subsidiary of Linde plc, will merge with and into Praxair, Inc., with Praxair, Inc. surviving the merger (the “Merger”, and together with the Exchange Offer, the “Business Combination” ). In the Merger, each share of Praxair, Inc. common stocktime amounts will be ~~converted into~~reclassified to the ~~right~~consolidated statement of income.

Interest Rate Swaps

Linde uses interest rate swaps to ~~receive one Linde plc ordinary share. Upon completion of~~hedge the ~~Business Combination, and assuming that all of the outstanding Linde AG shares are exchanged~~exposure to changes in the ~~Exchange Offer, former Praxair shareholders~~fair value of financial assets and former Linde AG shareholders will each own approximately 50% of the outstanding Linde plc shares. Linde plc will apply to list its ordinary shares on the New York Stock Exchange and the Frankfurt Stock Exchange, and will seek inclusion in the S&P 500 and DAX 30 indices. Praxair, Inc.’s stockholders approved the Merger at Praxair, Inc.’s special meeting held on September 27, 2017. On October 23, 2017, the Company amended the Exchange Offer to reduce the minimum acceptance threshold from 75% to 60% of all Linde AG shares entitled to voting rights, following the consent by both Linde AG and Praxair, Inc. Due to the amendment, the acceptance period of the Exchange Offer, which was originally scheduled to expire on October 24, 2017 at 24:00 hours (CEST), was extended by two weeks and will now expire on November 7, 2017 at 24:00 hours (CET). As of October 26, 2017, approximately 67.95% of all Linde AG shares entitled to voting rights had been tendered into the Exchange Offer. The parties currently expect the Business Combination to be completed in the second half of 2018.

Completion of the Business Combination remains subject to the satisfaction or waiver of conditions, including (a) at least 60% of the Linde AG shares entitled to voting rights are tendered and not withdrawn on November 7, 2017 at 24:00 hours (CET), (b) approval by requisite governmental regulators and authorities, including approvals under applicable competition laws, (c) absence of any law, regulation or injunction or order by any governmental entity in Ireland, the United Kingdom, Germany or the United States that prohibits or makes illegal the completion of the Business Combination and (d) that there has been no material adverse effect on and no material compliance violation by either Praxair, Inc. or Linde AG, as determined by a third-party independent expert.

~~The Business Combination may be terminated for, or may terminate~~financial liabilities as a result of ~~certain reasons, including, among others, (a)~~interest rate changes. These interest rate swaps effectively convert fixed-rate interest exposures to variable rates; fair value adjustments are recognized in earnings along with an equally offsetting charge/benefit to earnings for the ~~mutual consent~~changes in the fair value of ~~Praxair, Inc.~~the underlying financial asset or financial liability. The notional value of outstanding interest rate swaps of Linde with maturity dates from 2021 through 2028 was $1,859 million at March 31, 2021 and ~~Linde AG~~$1,923 million at December 31, 2020 (see Note 4 for further information).

Terminated Treasury Rate Locks

The unrecognized aggregated losses related to ~~termination, (b)~~terminated treasury rate lock contracts on the underlying $500 million 2.20% fixed-rate notes that mature in 2022 at March 31, 2021 and December 31, 2020 were immaterial in both periods. The unrecognized gains / (losses) for the treasury rate locks are shown in AOCI and are being recognized on a ~~change~~straight line basis to interest expense – net over the term of the underlying debt agreements.

Derivatives' Impact on Consolidated Statements of Income

The following table summarizes the impact of the company’s derivatives on the consolidated statements of income:


	Amount of Pre-Tax Gain (Loss) Recognized in Earnings *
	Quarter Ended March 31,
(Millions of dollars)	2021		2020
Derivatives Not Designated as Hedging Instruments
Currency contracts:
Balance sheet items
Debt-related	$	19	$	(5)
Other balance sheet items	4		(41)


Total	$	23	$	(46)

* The gains (losses) on balance sheet items are offset by gains (losses) recorded on the underlying hedged assets and liabilities. Accordingly, the gains (losses) for the derivatives and the underlying hedged assets and liabilities related to debt items are recorded in ~~recommendation regarding~~ the ~~Business Combination from~~consolidated statements of income as interest expense-net. Other balance sheet items and anticipated net income gains (losses) are generally recorded in the ~~Linde AG executive board~~consolidated statements of income as other income (expenses)-net.

The amounts of gain or ~~the Linde AG supervisory board (provided that, with respect~~loss recognized in AOCI and reclassified to the ~~Linde AG supervisory board, such change involves recommending~~consolidated statement of income was immaterial for the three months ended March 31, 2021. Net losses expected to be reclassified to earnings during the next twelve months are also not material.

6. Fair Value Disclosures

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

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

Level 2 – quoted prices for similar assets and liabilities in active markets or inputs that ~~Linde AG shareholders not accept the Exchange Offer ), (c) the occurrence of an “adverse tax event” (as defined~~are observable

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

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table summarizes assets and liabilities measured at fair value on a recurring basis:


	Fair Value Measurements Using
	Level 1				Level 2				Level 3
(Millions of dollars)	March 31, 2021		December 31, 2020		March 31, 2021		December 31, 2020		March 31, 2021		December 31, 2020
Assets
Derivative assets	$	0	$	0	$	141	$	200	$	0	$	0
Investments and securities*	20		21		0		0		45		47
Total	$	20	$	21	$	141	$	200	45		$	47

Liabilities
Derivative liabilities	$	0	$	0	$	53	$	81	$	0	$	0

* Investments and securities are recorded in prepaid and other current assets and other long-term assets in the ~~Business Combination Agreement), (d)~~company's condensed consolidated balance sheets.

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Level 1 investments and securities are marketable securities traded on an exchange. Level 2 investments are based on market prices obtained from independent brokers or determined using quantitative models that use as their basis readily observable market parameters that are actively quoted and can be validated through external sources, including third-party pricing services, brokers and market transactions. Level 3 investments and securities consist of a ~~permanent injunction or order by any governmental entity in Ireland,~~venture fund within the ~~United Kingdom, Germany or~~Americas. For the ~~United States that prohibits or makes illegal~~valuation, Linde uses the ~~completion~~net asset value received as part of the ~~Business Combination, (e)~~fund's quarterly reporting, which for the ~~occurrence of a change, event, occurrence~~most part is not based on quoted prices in active markets. In order to reflect current market conditions, Linde proportionally adjusts these by observable market data (stock exchange prices) or ~~effect that has had or is reasonably expected~~current transaction prices.

The below summarizes the changes in level 3 investments and securities for the three months ended March 31, 2021. Gains (losses) recognized in earnings are recorded to ~~have a “material adverse change” (as defined~~interest expense - net in the ~~Business Combination Agreement) on Linde AG or Praxair, Inc. or (f)~~company's consolidated statements of income.

The level 3 investments and securities as of December 31, 2020 was $47 million. During the ~~failure~~quarter period the balance decreased $2 million related to ~~satisfy any~~foreign currency movements. The balance as of March 31, 2021 was $45 million.

The fair value of cash and cash equivalents, short-term debt, accounts receivable-net, and accounts payable approximate carrying value because of the ~~conditions described~~short-term maturities of these instruments.

The fair value of long-term debt is estimated based on the quoted market prices for the same or similar issues. Long-term debt is categorized within either Level 1 or Level 2 of the fair value hierarchy depending on the trading volume of the issues and whether or not they are actively quoted in the ~~preceding paragraph.~~ market as opposed to traded through over-the-counter transactions. At March 31, 2021, the estimated fair value of Linde’s long-term debt portfolio was $12,746 million versus a carrying value of $12,474 million. At December 31, 2020, the estimated fair value of Linde’s long-term debt portfolio was $13,611 million versus a carrying value of $12,903 million. Differences between the carrying value and the fair value are attributable to fluctuations in interest rates subsequent to when the debt was issued and relative to stated coupon rates.

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7. Earnings Per Share – Linde plc Shareholders

Basic and diluted earnings per share is computed by dividing Income from continuing operations, Income from discontinued operations and Net income – Linde plc for the period by the weighted average number of either basic or diluted shares outstanding, as follows:


	Quarter Ended March 31,
	2021		2020
Numerator (Millions of dollars)
Income from continuing operations	$	979	$	571
Income from discontinued operations	1		2
Net Income – Linde plc	$	980	$	573
Denominator (Thousands of shares)
Weighted average shares outstanding	522,103		530,952
Shares earned and issuable under compensation plans	356		263
Weighted average shares used in basic earnings per share	522,459		531,215
Effect of dilutive securities
Stock options and awards	4,468		3,741
Weighted average shares used in diluted earnings per share	526,927		534,956
Basic earnings per share from continuing operations	$	1.87	$	1.07
Basic earnings per share from discontinued operations	0		0
Basic Earnings Per Share	$	1.87	$	1.07
Diluted earnings per share from continuing operations	$	1.86	$	1.07
Diluted earnings per share from discontinued operations	0		0
Diluted Earnings Per Share	$	1.86	$	1.07

There were 0 antidilutive shares for any period presented.

8. Retirement Programs

The ~~Business Combination Agreement further provides~~components of net pension and postretirement benefits other than pensions (“OPEB”) costs for the quarters ended March 31, 2021 and 2020 are shown below:


	Quarter Ended March 31,
	Pensions				OPEB
(Millions of dollars)	2021		2020		2021		2020
Amount recognized in Operating Profit
Service cost	$	40	$	37	$	0	$	1
Amount recognized in Net pension and OPEB cost (benefit), excluding service cost
Interest cost	38		52		1		1
Expected return on plan assets	(131)		(120)		0		0
Net amortization and deferral	44		23		(1)		(1)


	(49)		(45)		0		0


Net periodic benefit cost (benefit)	$	(9)	$	(8)	$	0	$	1

Linde estimates that ~~upon termination of the Business Combination under certain specified circumstances, Praxair, Inc.~~2021 required contributions to its pension plans will be ~~required~~in the range of $70 million to ~~pay~~ $80 million, of which $12 million have been made through March 31, 2021.

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9. Commitments and Contingencies

Contingent Liabilities

Linde ~~AG a termination fee~~is subject to various lawsuits and government investigations that arise from time to time in the ordinary course of ~~€250 million or~~business. These actions are based upon alleged environmental, tax, antitrust and personal injury claims, among others. Linde ~~AG will be required~~has strong defenses in these cases and intends to ~~pay Praxair, Inc. such termination fee, as applicable.~~

To date, the Company has not conducted any material activities other than those incidental to its formation and the matters contemplated by the Business Combination Agreement such as the incurrence of SEC registration fees and other transaction-related costs (see Note 3 - Subsidiaries). For additional information related to the Business Combination Agreement, please refer to the Linde plc Registration Statement on Form S-4, which was declared effective by the SEC on August 14, 2017.

~~To the extent~~defend itself vigorously. It is possible that the ~~Company does not have sufficient funds available to satisfy its obligations, Praxair, Inc. will finance any out of pocket expenses incurred by the Company~~company may incur losses in connection with the Business Combination Agreement and the transactions contemplated by the Business Combination Agreement. If the Business Combination is not completed, any expenses incurred by the Company and/or its affiliates will be shared equally by Praxair, Inc. and Linde AG, to the extent not prohibited by applicable law and as otherwise provided in the Business Combination Agreement.

~~These financial statements have been prepared in compliance with US GAAP.~~

The following new accounting standards in the United States issued by the Financial Accounting Standards Board (“FASB”) have not yet been implemented by the Company. The Company will evaluate, when applicable, the impactssome of ~~adopting the below standards on future periods:~~

~~Revenue Recognition -~~ In May 2014, the FASB issued updated guidance on the reporting and disclosure of revenue. The new guidance requires the evaluation of contracts with customers to determine the recognition of revenue when or as the entity satisfies a performance obligation, and requires expanded disclosures. Subsequently, the FASB has issued amendments to certain aspects of the guidance including the effective date. This guidance is required to be effective beginning in the first quarter 2018 and includes several transition options.

~~Leases -~~ In February 2016, the FASB issued updated guidance on the accounting and financial statement presentation of leases. The new guidance requires lessees to recognize a right-of-use asset and lease liability for all leases, except those that meet certain scope exceptions, and would require expanded quantitative and qualitative disclosures. This guidance will be effective beginning in the first quarter 2019 and requires companies to transition using a modified retrospective approach.

~~Credit Losses on Financial Instruments -~~ In June 2016, the FASB issued an update on the measurement of credit losses. The guidance introduces a new accounting model for expected credit losses on financial instruments, including trade receivables, based on estimates of current expected credit losses. This guidance will be effective beginning in the first quarter 2020, with early adoption permitted beginning in the first quarter 2019 and requires companies to apply the change in accounting on a prospective basis.

~~Classification of Certain Cash Receipts and Cash Payments -~~ In August 2016, the FASB issued updated guidance on the classification of certain cash receipts and cash payments within the statement of cash flows. The update provides accounting guidance for specific cash flow issues with the objective of reducing diversity in practice. This new guidance will be effective beginning in the first quarter 2018 on a retrospective basis, with early adoption optional.

~~Intra-Entity Asset Transfers -~~ In October 2016, the FASB issued updated guidance for income tax accounting of intra-entity transfers of assets other than inventory. The update requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory in the period when the transfer occurs. This new guidance will be effective beginning in the first quarter 2018, with early adoption permitted, and should be applied on a modified retrospective basis.

~~Simplifying the Test for Goodwill Impairment -~~ In January 2017, the FASB issued updated guidance on the measurement of goodwill. The new guidance eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge. The guidance will be effective beginning in the first quarter 2020 with early adoption permitted.

~~Pension Costs~~ - In March 2017, the FASB issued updated guidance on the presentation of net periodic pension cost and net periodic postretirement benefit cost. The new guidance requires the service cost component be reported in the same line item or items as other compensation costs arising from services rendered by employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and not included within operating profit. This guidance will be effective beginning in the first quarter 2018, with early adoption optional, and requires companies to transition using a retrospective approach for the presentation of the service cost component and the other cost components and prospectively for the capitalization of the service cost component.

~~Derivatives and Hedging~~ - In August 2017, the FASB issued updated guidance on accounting for hedging activities. The new guidance changes both the designation and measurement for qualifying hedging relationships and the presentation of hedge results. This guidance will be effective beginning in the first quarter 2019, with early adoption optional.

~~2. Accounting Policies~~

~~Basis of Preparation~~

The financial statements present the consolidated results and financial position of the Company and its subsidiaries for the period from incorporation (being April 18, 2017 to September 30, 2017) and the quarter ended September 30, 2017.

~~Going Concern~~

~~The financial statements have been prepared on a going concern basis, taking account of the facilities available under the cash management agreement (see Note 7).~~

~~Currency~~

~~Items included in~~ these consolidated financial statements are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The financial information is presented in USD. The US Dollar/Euro exchange rate at April 18, 2017 was 0.9319 and at September 30, 2017 was 0.8465.

~~Consolidation and Subsidiaries~~

Subsidiaries are all entities (including structured entities) over which the Company and its group has control. The group controls an entity when the group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the group. They are deconsolidated from the date that control ceases.

~~The acquisition method of accounting is used to account for business combinations by the group.~~

Intercompany transactions, balances and unrealized gains on transactions between group companies are eliminated. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset.

~~Cash and Cash Equivalents~~

~~Cash and cash equivalents consist of cash at banks or other highly liquid securities with original maturities of three months or less.~~

~~Other Receivables~~

Other receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Other receivables are stated at the lower of amortized cost or recoverable amount. If collection of the amounts is expected in one year or less they are classified as current assets.

~~Other Provisions~~

The Company accrues liabilities for non-income tax contingencies when management believes that a loss is probable and the amounts can be reasonably estimated, while contingent gains are recognized only when realized. If new information becomes available or losses are sustainedactions in excess of ~~recorded amounts, adjustments are charged against income at that time.~~accrued liabilities. Management does not anticipate that in the aggregate such losses would have a material adverse effect on the ~~Company’s opening balance sheet~~company’s consolidated financial position or ~~liquidity.~~liquidity; however, it is possible that the final outcomes could have a significant impact on the company’s reported results of operations in any given period (see Note 17 to the consolidated financial statements of Linde's 2020 Annual Report on Form 10-K).

~~Share Capital~~Significant matters are:

~~According~~•During 2009, the Brazilian government published Law 11941/2009 instituting a new voluntary amnesty program (“Refis Program”) which allowed Brazilian companies to ~~article 3~~settle certain federal tax disputes at reduced amounts. During 2009, the company decided that it was economically beneficial to settle many of its outstanding federal tax disputes and such disputes were enrolled in the ~~Amended~~Refis Program, subject to final calculation and Restated Memorandum of Association and Articles of Association, the authorized share capital of the Company is €1,775,000 divided into 1,750,000,000 ordinary shares of €0.001 each and 25,000 A ordinary shares of €1.00 each.

As of the opening balance sheet date and as of September 30, 2017, 25,000 A ordinary shares had been issued and 12,500 shares were held by Enceladus Holding Limited wholly owned by Praxair, Inc.’s Irish legal counsel Arthur Cox, and 12,500

shares were held by Cumberland Corporate Services Limited wholly owned by Linde AG´s Irish legal counsel William Fry, the Company’s shareholders. Furthermore, an additional €25,000 ($26,827) was committed to be paidreview by the ~~two shareholders.~~

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are capitalized and upon the closing of the associated equity transaction are reclassified to equity as a deduction, net of tax, from the proceeds.

~~As at September 30, 2017, the Company was not subject to any capital requirements.~~

~~Income Taxes~~

Brazilian federal government. The ~~income tax expense or credit for the period is the tax payable on the current period’s taxable income~~company recorded estimated liabilities based on the ~~applicable~~terms of the Refis Program. Since 2009, Linde has been unable to reach final agreement on the calculations and initiated litigation against the government in an attempt to resolve certain items. Open issues relate to the following matters: (i) application of cash deposits and net operating loss carryforwards to satisfy obligations and (ii) the amount of tax reductions available under the Refis Program. It is difficult to estimate the timing of resolution of legal matters in Brazil.

•At March 31, 2021 the most significant non-income and income tax claims in Brazil, after enrollment in the Refis Program, relate to state VAT tax matters and a federal income tax matter where the taxing authorities are challenging the tax rate ~~for each jurisdiction adjusted~~that should be applied to income generated by ~~changes~~a subsidiary company. The total estimated exposure relating to such claims, including interest and penalties, as appropriate, is approximately $190 million. Linde has not recorded any liabilities related to such claims based on management judgments, after considering judgments and opinions of outside counsel. Because litigation in ~~deferred tax assets and liabilities attributable~~Brazil historically takes many years to ~~temporary differences and to unused tax losses.~~

~~Deferred tax assets are recognized only if~~resolve, it is ~~probable~~very difficult to estimate the timing of resolution of these matters; however, it is possible that ~~future taxable amounts will~~certain of these matters may be ~~available~~resolved within the near term. The company is vigorously defending against the proceedings.

•On September 1, 2010, CADE (Brazilian Administrative Council for Economic Defense) announced alleged anticompetitive activity on the part of 5 industrial gas companies in Brazil and imposed fines. Originally, CADE imposed a civil fine of R$2.2 billion Brazilian reais ($386 million) on White Martins, the Brazil-based subsidiary of Praxair, Inc. The fine was reduced to ~~utilize those temporary differences~~R$1.7 billion Brazilian reais ($298 million) due to a calculation error made by CADE. The fine against White Martins was overturned by the Ninth Federal Court of Brasilia. CADE appealed this decision, and ~~losses. No deferred tax has been recognized as at September 30, 2017, as~~ the ~~Company has recently been incorporated~~Federal Court of Appeals rejected CADE's appeal and ~~therefore does not have any history of income.~~

~~3. Subsidiaries~~

~~The principal subsidiaries~~confirmed the decision of the ~~Company, all~~Ninth Federal Court of ~~which have been included in these consolidated financial statements, are as follows:~~Brasilia. CADE has filed an appeal with the Superior Court of Justice and a decision is pending.



~~Name~~	~~Country of Incorporation and Principal Place of Business~~	~~Proportion of Ownership Interest at~~
		~~September 30, 2017~~		~~April 18, 2017~~
~~Zamalight Holdco LLC~~	~~USA~~	~~100~~	%	—	%
~~Zamalight Subco, Inc.~~	~~USA~~	~~100~~	%	—	%
~~Linde Holding GmbH~~	~~Germany~~	~~100~~	%	—	%
~~Linde Intermediate Holding AG~~	~~Germany~~	~~100~~	%	—	%

~~On May 26, 2017,~~Similarly, on September 1, 2010, CADE imposed a civil fine of R$237 million Brazilian reais ($42 million) on Linde Gases Ltda., the Company formed Zamalight Holdco LLC, a Delaware limited liability company. Immediately following its formation, Zamalight Holdco LLC formed Zamalight Subco, Inc., a Delaware corporation, as a wholly owned U.S.former Brazil-based subsidiary of ~~Zamalight Holdco LLC. Upon effectiveness of the Merger, Zamalight Subco, Inc. will merge with~~Linde AG, which was divested to MG Industries GmbH on March 1, 2019 and ~~into Praxair, Inc., with Praxair, Inc. surviving the Merger as an indirect wholly-owned subsidiary of the Company.~~

On July 26, 2017, the Company formed Linde Holding GmbH, a German limited liability company (GmbH), which on July 28, 2017 in turn formed Linde Intermediate Holding AG, a German stock corporation (AG), to facilitate the settlement of the Exchange Offer and a post-completion reorganization with respect to which Linde ~~AG.~~

~~4. Receivables from Shareholders~~

~~This relates~~provided a contractual indemnity. The fine was reduced to R$188 million Brazilian reais ($33 million) due to a ~~receivable from~~calculation error made by CADE. The fine against Linde Gases Ltda. was overturned by the ~~two shareholders~~Seventh Federal Court in Brasilia. CADE appealed this decision, and ~~comprises two checks~~the Federal Court of ~~€25,000 each which are being held on behalf~~Appeals rejected CADE's appeal and confirmed the decision of the ~~Company~~Seventh Federal Court of Brasilia. CADE filed an appeal with the Superior Court of Justice, and a final decision is pending.

Linde has strong defenses and is confident that it will prevail on appeal and have the fines overturned. Linde strongly believes that the allegations of anticompetitive activity against our current and former Brazilian subsidiaries are not supported by ~~Praxair, Inc.’s Irish legal counsel Arthur Cox. Due~~valid and sufficient evidence. Linde believes that this decision will not stand up to judicial review and deems the ~~short-term nature~~possibility of cash outflows to be extremely unlikely. As a result, no reserves have been recorded as management does not believe that a loss from this case is probable.

•On and after April 23, 2019 former shareholders of Linde AG filed appraisal proceedings at the District Court (Landgericht) Munich I (Germany), seeking an increase of the ~~current receivables, their carrying amount is considered to be the same as their fair value.~~

~~5. Other Assets~~

Other assets at September 30, 2017 of $8,984,310 relate to the costs to issue equity securities (primarily SEC registration fee). These costs, in case the Business Combination is not completed, will be recognized as an expense.

~~6. Accrued Liabilities~~

~~Accrued liabilities for the amount of $622,059 consist of expenses incurred~~cash consideration paid in connection with the ~~Business Combination~~previously completed cash merger squeeze-out of all of Linde AG’s minority shareholders for €189.46 per share. Any such increase would apply to all 14,763,113 Linde AG shares that were outstanding on April 8, 2019, when the cash merger squeeze-out was completed. The period for plaintiffs to file claims expired on July 9, 2019. The company believes the consideration paid was fair and ~~mainly~~that the claims lack merit, and no reserve has been established. We cannot estimate the timing of resolution.

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10. Segments

For a description of Linde plc's operating segments, refer to Note 18 to the consolidated financial statements on Linde plc's 2020 Annual Report on Form 10-K.

The table below presents sales and operating profit information about reportable segments and Other for the quarters ended March 31, 2021 and 2020.


	Quarter Ended March 31,
(Millions of dollars)	2021		2020
SALES(a)
Americas	$	2,840	$	2,677
EMEA	1,799		1,633
APAC	1,436		1,336
Engineering	674		608
Other	494		485


Total sales	$	7,243	$	6,739


	Quarter Ended March 31,
(Millions of dollars)	2021		2020
SEGMENT OPERATING PROFIT
Americas	$	795	$	661
EMEA	451		355
APAC	351		281
Engineering	109		91
Other	(18)		(36)
Segment operating profit	1,688		1,352
Cost reduction programs and other charges (Note 2)	8		(131)


Purchase accounting impacts - Linde AG	(483)		(488)
Total operating profit	$	1,213	$	733

(a)Sales reflect external sales only. Intersegment sales, primarily from Engineering to the industrial gases segments, were not material.

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11. Equity

Equity

A summary of the changes in total equity for the quarters ended March 31, 2021 and 2020 is provided below:


	Quarter Ended March 31,
(Millions of dollars)	2021						2020
Activity	Linde plc Shareholders’ Equity		Noncontrolling Interests		Total Equity		Linde plc Shareholders’ Equity		Noncontrolling Interests		Total Equity
Balance, beginning of period	$	47,317	$	2,252	$	49,569	$	49,074	$	2,448	$	51,522
Net income (a)	980		38		1,018		573		35		608
Other comprehensive income (loss)	(655)		(6)		(661)		(2,574)		(106)		(2,680)
Noncontrolling interests:
Additions (reductions) (b)	0		(853)		(853)		0		2		2
Dividends and other capital changes	0		(21)		(21)		0		(4)		(4)

Dividends to Linde plc ordinary share holders ($1.060 per share in 2021 and $0.963 per share in 2020)	(553)		0		(553)		(511)		0		(511)
Issuances of ordinary shares:

For employee savings and incentive plans	(2)		0		(2)		(18)		0		(18)

Purchases of ordinary shares	(906)		0		(906)		(1,811)		0		(1,811)

Share-based compensation	29		0		29		43		0		43
Balance, end of period	$	46,210	$	1,410	$	47,620	$	44,776	$	2,375	$	47,151

(a) Net income for noncontrolling interests excludes net income related to redeemable noncontrolling interests which is not significant for both the three months ended March 31, 2021 and 2020which is not part of total equity.

(b) Additions (reductions) for noncontrolling interests as of the three months period ended March 31, 2021, includes the impact from the deconsolidation of a joint venture with operations in APAC (see Note 13).

The components of AOCI are as follows:


	March 31,		December 31,
(Millions of dollars)	2021		2020
Cumulative translation adjustment - net of taxes:
Americas	$	(3,938)	$	(3,788)
EMEA	620		1,020
APAC	327		616
Engineering	164		354
Other	(700)		(1,020)
	(3,527)		(2,818)
Derivatives - net of taxes	18		4

Pension / OPEB (net of $537 million and $560 million tax benefit in March 31, 2021 and December 31, 2020, respectively)	(1,836)		(1,876)
	$	(5,345)	$	(4,690)

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12. Revenue Recognition

Revenue is accounted for in accordance with ASC 606. Revenue is recognized as control of goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled to receive in exchange for the goods or services.

Contracts with Customers

Linde serves a diverse group of industries including healthcare, petroleum refining, energy, manufacturing, food, beverage carbonation, fiber-optics, steel making, aerospace, chemicals and water treatment.

Industrial Gases

Within each of the company’s geographic segments for industrial gases, there are three basic distribution methods: (i) on-site or tonnage; (ii) merchant or bulk liquid; and (iii) packaged or cylinder gases. The distribution method used by Linde to supply a customer is determined by many factors, including the customer’s volume requirements and location. The distribution method generally determines the contract terms with the customer and, accordingly, the revenue recognition accounting practices. Linde'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). These products are generally sold through one of the three distribution methods.

Following is a description of each of the three industrial gases distribution methods and the respective revenue recognition policies:

On-site. Customers that require the largest volumes of product and that have a relatively constant demand pattern are supplied by cryogenic and process gas on-site plants. Linde constructs plants on or adjacent to these customers’ sites and supplies the product directly to customers by pipeline. Where there are large concentrations of customers, a single pipeline may be connected to several plants and customers. On-site product supply contracts generally are total requirement contracts with terms typically ranging from 10-20 years and contain minimum purchase requirements and price escalation provisions. Many of the cryogenic on-site plants also produce liquid products for the merchant market. Therefore, plants are typically not dedicated to a single customer. Additionally, Linde is responsible for the design, construction, operations and maintenance of the plants and our customers typically have no involvement in these activities. Advanced air separation processes also allow on-site delivery to customers with smaller volume requirements.

The company’s performance obligations related to on-site customers are satisfied over time as customers receive and obtain control of the product. Linde has elected to apply the practical expedient for measuring progress towards the completion of a performance obligation and recognizes revenue as the company has the right to invoice each customer, which generally corresponds with product delivery. Accordingly, revenue is recognized when product is delivered to the customer and the company has the right to invoice the customer in accordance with the contract terms. Consideration in these contracts is generally based on pricing which fluctuates with various price indices. Variable components of consideration exist within on-site contracts but are considered constrained.

Merchant. Merchant deliveries generally are made from Linde's plants by tanker trucks to storage containers at the customer's site. Due to the relatively high distribution cost, merchant oxygen and nitrogen generally have a relatively small distribution radius from the plants at which they are produced. Merchant argon, hydrogen and helium can be shipped much longer distances. The customer agreements used in the merchant business are usually three-to seven-year supply agreements based on the requirements of the customer. These contracts generally do not contain minimum purchase requirements or volume commitments.

The company’s performance obligations related to merchant customers are generally satisfied at a point in time as the customers receive and obtain control of the product. Revenue is recognized when product is delivered to the customer and the company has the right to invoice the customer in accordance with the contract terms. Any variable components of consideration within merchant contracts are constrained however this consideration is not significant.

Packaged Gases. Customers requiring small volumes are supplied products in containers called cylinders, under medium to high pressure. Linde distributes merchant gases from its production plants to company-owned cylinder filling plants where cylinders are then filled for distribution to customers. Cylinders may be delivered to the customer’s site or picked up by the customer at a packaging facility or retail store. Linde invoices the customer for the industrial gases and the use of the cylinder container(s). The company also sells hardgoods and welding equipment purchased from independent manufacturers. Packaged gases are generally sold under one to three-year supply contracts and purchase orders and do not contain minimum purchase requirements or volume commitments.

The company’s performance obligations related to packaged gases are satisfied at a point in time. Accordingly, revenue is

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recognized when product is delivered to the customer or when the customer picks up product from a packaged gas facility or retail store, and the company has the right to payment from the customer in accordance with the contract terms. Any variable consideration is constrained and will be recognized when the uncertainty related to the consideration is resolved.

Linde Engineering

The company designs and manufactures equipment for air separation and other industrial gas applications manufactured specifically for end customers. Sale of equipment contracts are generally comprised of a single performance obligation. Revenue from sale of equipment is generally recognized over time as Linde has an enforceable right to payment for performance completed to date and performance does not create an asset with alternative use. For contracts recognized over time, revenue is recognized primarily using a cost incurred input method. Costs incurred to date relative to total estimated costs at completion are used to measure progress toward satisfying performance obligations. Costs incurred include material, labor, and overhead costs and represent work contributing and proportionate to the transfer of control to the customer. Contract modifications are typically accounted for as part of the existing contract and are recognized as a cumulative adjustment for the inception-to-date effect of such change.

Contract Assets and Liabilities

Contract assets and liabilities result from differences in timing of revenue recognition and customer invoicing. Contract assets primarily relate to ~~fees~~sale of equipment contracts for ~~accounting~~which revenue is recognized over time. The balance represents unbilled revenue which occurs when revenue recognized under the measure of progress exceeds amounts invoiced to customers. Customer invoices may be based on the passage of time, the achievement of certain contractual milestones or a combination of both criteria. Contract liabilities include advance payments or right to consideration prior to performance under the contract. Contract liabilities are recognized as revenue as performance obligations are satisfied under contract terms. Linde has contract assets of $137 million and ~~advisory services.~~$162 million at March 31, 2021 and December 31, 2020, respectively. Total contract liabilities are $2,511 million at March 31, 2021 (current of $1,863 million and $648 million within other long-term liabilities in the condensed consolidated balance sheets). Total contract liabilities were $2,301 million at December 31, 2020 (current contract liabilities of $1,769 million and $532 million in other long-term liabilities in the condensed consolidated balance sheets). Revenue recognized for the three months ended March 31, 2021 that was included in the contract liability at December 31, 2020 was $446 million. Contract assets and liabilities primarily relate to the Linde Engineering business.

Payment Terms and Other

~~7. Related Parties~~Linde generally receives payment after performance obligations are satisfied, and customer prepayments are not typical for the industrial gases business. Payment terms vary based on the country where sales originate and local customary payment practices. Linde does not offer extended financing outside of customary payment terms. Amounts billed for sales and use taxes, value-added taxes, and certain excise and other specific transactional taxes imposed on revenue producing transactions are presented on a net basis and are not included in sales within the consolidated statement of income. Additionally, sales returns and allowances are not a normal practice in the industry and are not significant.

~~Related parties~~Disaggregated Revenue Information

As described above and in Note 18 to Linde's 2020 Form 10-K, the company manages its industrial gases business on a geographic basis, while the Engineering and Other businesses are generally managed on a global basis. Furthermore, the ~~members~~company believes that reporting sales by distribution method by reportable geographic segment best illustrates the nature, timing, type of customer, and contract terms for its revenues, including terms and pricing.

The following tables show sales by distribution method at the consolidated level and for each reportable segment and Other for the three months ended March 31, 2021 and March 31, 2020.


(Millions of dollars)	Quarter Ended March 31, 2021
Sales	Americas		EMEA		APAC		Engineering		Other		Total		%

Merchant	$	771	$	531	$	484	$	0	$	53	$	1,839	25	%
On-Site	689		392		553		0		0		1,634		23	%
Packaged Gas	1,332		861		361		0		6		2,560		35	%
Other	48		15		38		674		435		1,210		17	%
Total	$	2,840	$	1,799	$	1,436	$	674	$	494	$	7,243	100	%

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(Millions of dollars)	Quarter Ended March 31, 2020
Sales	Americas		EMEA		APAC		Engineering		Other		Total		%

Merchant	$	726	$	470	$	459	$	0	$	47	$	1,702	25	%
On-Site	650		343		492		0		0		1,485		22	%
Packaged Gas	1,275		811		360		0		5		2,451		36	%
Other	26		9		25		608		433		1,101		17	%
Total	$	2,677	$	1,633	$	1,336	$	608	$	485	$	6,739	100	%

Remaining Performance Obligations

As described above, Linde's contracts with on-site customers are under long-term supply arrangements which generally require the customer to purchase their requirements from Linde and also have minimum purchase requirements. The company estimates the consideration related to minimum purchase requirements is approximately $45 billion. This amount excludes all sales above minimum purchase requirements, which can be significant depending on customer needs. In the future, actual amounts will be different due to impacts from several factors, many of which are beyond the company’s control including, but not limited to, timing of newly signed, terminated and renewed contracts, inflationary price escalations, currency exchange rates, and pass-through costs related to natural gas and electricity. The actual duration of long-term supply contracts ranges up to twenty years. The company estimates that approximately half of the ~~executive bodies of~~revenue related to minimum purchase requirements will be earned in the ~~Company~~next five years and ~~those companies as described~~the remaining thereafter.

13. Divestitures

Effective January 1, 2021, Linde deconsolidated a joint venture with operations in ~~Note 1.~~

On July 24, 2017 the Company entered into a cash management agreement with Praxair International Finance UC to finance the Company´s working capital obligations. The total available amount under the facility is €30,000,000. The cash management agreement is Euro denominated and has a variable interest rate of one month EUR LIBOR plus a 0% spread. The cash management agreement terminates after 1 year and is automatically renewable for successive one-year terms thereafter unless either party shall give written notice to the other party not less than 30 days priorAPAC, due to the expiration of ~~any term.~~certain contractual rights that the parties mutually agreed not to renew. From the effective date, the joint venture is reflected as an equity investment on Linde's consolidated balance sheet with the corresponding results reflected in income from equity investments on the consolidated statement of income.

~~At September 30, 2017, $9,220,590~~

The fair value of the joint venture at January 1, 2021 was ~~outstanding under this facility as follows:~~

September 30, 2017

SEC registration fee* $ 8,984,310
Incorporation of Linde Intermediate Holding AG 59,070
Incorporation of Linde Holding GmbH 59,070
BaFin registration fee* 118,140
$ 9,220,590

* Paid directlydetermined using a discounted cash flow model and approximated the carrying amount of its net assets. The net carrying value of $852 million was mainly comprised of assets of approximately $1.9 billion (primarily Other intangibles and Property plant and equipment - net), net of liabilities of approximately $1.0 billion. Upon deconsolidation an equity investment was recorded representing Linde's share of the joint venture's net assets. The deconsolidation resulted in a gain of $52 million recorded within cost reduction programs and other charges (see Note 2) related to the ~~SEC and BaFin by Praxair International Finance UC on behalf of Linde plc and treated as a non-cash transaction in the Consolidated Statement of Cash Flows.~~

~~8. Loss per share~~

Quarter Ended September 30, 2017 April 18, 2017 to September 30, 2017
Loss from continuing operations attributable to the owners of the company $ (290,825 ) $ (753,465 )
Weighted average number of ordinary shares in issue 25,000
25,000
Loss per share - basic and diluted $ (11.63 ) $ (30.14 )

~~9. Events After the Balance Sheet Date~~

In the Business Combination, Praxair, Inc.’s business will be brought indirectly under the Company through the Merger and Linde AG’s business will be brought indirectly under the Company through the Exchange Offer. Following settlementrelease of the ~~Exchange Offer,~~CTA balance recorded within AOCI. The company did not receive any consideration, cash or otherwise, as part of the ~~Company intends to pursue a post-completion reorganization with respect to Linde AG if~~deconsolidation.

The joint venture contributed sales of approximately $600 million in 2020. Future earnings per share will not be affected as the ~~relevant~~ ownership ~~threshold for such a post-completion reorganization has been reached as a result~~percent remains the same.

Table of ~~or following the Exchange Offer. Also refer to Note 1.~~Contents

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

~~To date,~~Non-GAAP Measures

Throughout MD&A, the company provides adjusted operating results from continuing operations exclusive of certain items such as cost reduction programs and other charges, net gains on sale of businesses, purchase accounting impacts of the Linde ~~plc has~~AG merger and pension settlement charges. Adjusted amounts are non-GAAP measures which are intended to supplement investors’ understanding of the company’s financial information by providing measures which investors, financial analysts and management find useful in evaluating the company’s operating performance. Items which the company does not ~~conducted any~~believe to be indicative of on-going business performance are excluded from these calculations so that investors can better evaluate and analyze historical and future business trends on a consistent basis. In addition, operating results from continuing operations, excluding these items, is important to management's development of annual and long-term employee incentive compensation plans. Definitions of these non-GAAP measures may not be comparable to similar definitions used by other companies and are not a substitute for similar GAAP measures.

The non-GAAP measures and reconciliations are separately included in a later section in the MD&A titled "Non-GAAP Measures and Reconciliations."

Consolidated Results

The following table provides summary information for the three months ended March 31, 2021 and 2020. The reported amounts are GAAP amounts from the Consolidated Statements of Income. The adjusted amounts are intended to supplement investors' understanding of the company's financial information and are not a substitute for GAAP measures:


	Quarter Ended March 31,
(Millions of dollars, except per share data)	2021			2020			Variance
Sales	$	7,243		$	6,739		7	%
Cost of sales, exclusive of depreciation and amortization	$	4,054		$	3,843		5	%
As a percent of sales	56.0		%	57.0		%
Selling, general and administrative	$	787		$	861		(9)	%
As a percent of sales	10.9		%	12.8		%
Depreciation and amortization	$	1,166		$	1,142		2	%
Cost reduction programs and other charges (b)	$	(8)		$	131		(106)	%

Other income (expense) - net	$	4		$	15		(73)	%
Operating profit	$	1,213		$	733		65	%
Operating margin	16.7		%	10.9		%
Interest expense - net	$	20		$	24		(17)	%
Net pension and OPEB cost (benefit), excluding service cost	$	(49)		$	(45)		9	%
Effective tax rate	21.6		%	21.9		%
Income from equity investments	$	43		$	17		153	%
Noncontrolling interests from continuing operations	$	(38)		$	(35)		9	%
Income from continuing operations	$	979		$	571		71	%
Diluted earnings per share from continuing operations	$	1.86		$	1.07		74	%
Diluted shares outstanding	526,927			534,956			(2)	%
Number of employees	71,699			79,008			(9)	%
Adjusted Amounts (a)
Operating profit	$	1,688		$	1,352		25	%
Operating margin	23.3		%	20.1		%
Effective tax rate	23.9		%	23.9		%
Income from continuing operations	$	1,312		$	1,009		30	%
Diluted earnings per share from continuing operations	$	2.49		$	1.89		32	%
Other Financial Data (a)
EBITDA from continuing operations	$	2,422		$	1,892		28	%
As percent of sales	33.4		%	28.1		%
Adjusted EBITDA from continuing operations	$	2,438		$	2,049		19	%
As percent of sales	33.7		%	30.4		%

(a) Adjusted Amounts and Other Financial Data are non-GAAP performance measures. A reconciliation of reported amounts to adjusted amounts can be found in the "Non-GAAP Measures and Reconciliations" sections of this MD&A.

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(b) See Note 2 to the condensed consolidated financial statements.

Reported

In the first quarter of 2021, Linde's sales were $7,243 million, 7% above prior year, primarily driven by 2% price attainment and 3% higher volumes. Currency translation increased sales by 4% in the first quarter of 2021 as compared to 2020.

Reported operating profit for the first quarter of 2021 of $1,213 million, or 16.7% of sales, was 65% above prior year. The reported year-over-year increase was primarily due to higher price and volumes and lower cost reduction programs and other charges. The reported effective tax rate ("ETR") was 21.6% in the first quarter 2021 versus 21.9% in the first quarter 2020. Diluted earnings per share from continuing operations ("EPS") was $1.86, or 74% above EPS of $1.07 in the first quarter of 2020 primarily due to higher income from continuing operations and lower diluted shares outstanding.

Adjusted

In the first quarter of 2021, adjusted operating profit of $1,688 million, or 23.3% of sales, was 25% higher as compared to 2020 driven by higher price and volumes and continued productivity initiatives across all segments. The adjusted ETR was 23.9% in the first quarter 2021, flat versus the 2020 quarter. On an adjusted basis, EPS was $2.49, 32% above the 2020 adjusted EPS of $1.89, driven by higher adjusted income from continuing operations and lower diluted shares outstanding.

Outlook

Linde provides quarterly updates on operating results, material ~~activities other than those incidental~~trends that may affect financial performance, and financial guidance via quarterly earnings releases and investor teleconferences. These updates are available on the company’s website, www.linde.com, but are not incorporated herein.

Results of operations

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


	Quarter Ended March 31, 2021 vs. 2020
	% Change

Factors Contributing to Changes - Sales
Volume	3	%
Price/Mix	2	%
Cost pass-through	1	%
Currency	4	%
Acquisitions/divestitures	(3)	%
Engineering	—	%
	7	%

Sales

Sales increased $504 million, or 7%, for the first quarter of 2021 versus the respective 2020 period. Volume increased sales by 3% in the quarter primarily driven by healthcare, electronics and a recovery in the ~~matters contemplated~~cyclical end markets of manufacturing, metals, chemicals and refining. Higher pricing across all geographic segments contributed 2% to sales in the quarter. Currency translation increased sales by 4% in the quarter, largely in EMEA and APAC, driven by the ~~Business Combination Agreement. Linde plc does not have any material assets~~strengthening of the Euro, Australian dollar, Chinese yuan and British pound against the ~~management~~U.S. dollar. Cost pass-through increased sales by 1% in the quarter with minimal impact on operating profit. The deconsolidation of ~~Linde plc has not resolved to make any future investments other than~~a joint venture with operations in ~~relation~~APAC decreased sales by 3% (see Note 13 to the ~~Business Combination. In connection with~~condensed consolidated financial statements).

Cost of sales, exclusive of depreciation and amortization

Cost of sales, exclusive of depreciation and amortization increased $211 million, or 5%, for the ~~proposed Business Combination, Linde plc filed~~first quarter of 2021 primarily due to higher volumes and currency impacts, partially offset by productivity initiatives. Cost of sales, exclusive of depreciation and amortization was 56.0% of sales for the first quarter of 2021 versus 57.0% of sales for the respective 2020 period. The decrease as a ~~Registration Statement on Form S-4~~percentage of sales in the quarter was due primarily to cost reduction and productivity initiatives.

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Selling, general and administrative expenses

Selling, general and administrative expense ("SG&A") decreased $74 million, or 9%, for the first quarter of 2021. SG&A was 10.9% of first quarter sales versus 12.8% for the respective 2020 period. Currency impacts increased SG&A by approximately $25 million in the quarter. Excluding currency impacts, underlying SG&A decreased driven by lower incentive compensation and continued cost reduction and productivity initiatives.

Depreciation and amortization

Reported depreciation and amortization expense increased $24 million, or 2%, for the first quarter of 2021 primarily due to currency translation impacts.

On an adjusted basis depreciation and amortization increased $22 million, or 3%, for the first quarter of 2021, primarily due to currency translation impacts which increased depreciation and amortization by $20 million. Excluding currency impacts, underlying depreciation was ~~declared effective~~relatively flat as the impact of new project start ups was largely offset by the ~~SEC on August 14, 2017.~~

~~On July 24, 2017 the Company entered into~~deconsolidation of a ~~cash management agreement~~joint venture with Praxair International Finance UC to finance the Company´s working capital obligations. The total available amount under the facility is €30,000,000. The cash management agreement is Euro denominated and has a variable interest rate of one month EUR LIBOR plus a 0% spread. The cash management agreement terminates after 1 year and is automatically renewable for successive one-year terms thereafter unless either party shall give written noticeoperations in APAC (see Note 13 to the condensed consolidated financial statements).

Cost reduction programs and other ~~party not less than 30 days prior to the expiration~~charges

Cost reduction programs and other charges was a benefit of ~~any term. As~~$8 million and a charge of ~~September 30, 2017, $9,220,590 was outstanding under this facility primarily related to SEC registration fees paid by Praxair International Finance UC on behalf of Linde plc.~~

~~In addition, Linde plc has incurred expenses of $290,825 and $753,465 during the quarter, and~~$131 million for the ~~period from inception to September 30, 2017,~~first quarter 2021 and 2020, respectively, primarily related to merger and synergy-related costs (see Note 2 to the condensed consolidated financial statements).

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

Operating profit

On a reported basis, operating profit increased $480 million, or 65%, for 2021. The increase was primarily due to higher volumes and price, partially offset by the deconsolidation of a joint venture with operations in APAC. Cost reduction programs and other charges was a benefit of $8 million for the first quarter, versus a charge of $131 million for the respective 2020 period.

On an adjusted basis, which excludes the impacts of purchase accounting and ~~advisory services incurred~~cost reduction programs and other charges, operating profit increased $336 million, or 25% in ~~connection~~the 2021 quarter. Operating profit growth was driven by higher volume and price and the benefit of cost reduction programs and productivity initiatives, partially offset by the deconsolidation of a joint venture with operations in APAC. A discussion of operating profit by segment is included in the segment discussion that follows.

Interest expense - net

Reported interest expense - net decreased $4 million for the first quarter of 2021. On an adjusted basis interest expense decreased $8 million for the first quarter versus the respective 2020 period.

On both a reported and adjusted basis, the decrease was driven primarily by the impact of unfavorable foreign currency revaluation on an unhedged intercompany loan in the prior year period.

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

Reported net pension and OPEB cost (benefit), excluding service cost was a benefit of $49 million for the 2021 quarter, versus a benefit of $45 million for the respective 2020 period. The increase in benefit of $4 million largely relates to a higher expected return on assets and lower interest costs driven by the low discount rate environment offset by higher amortization of deferred losses.

Effective tax rate

The reported effective tax rate ("ETR") for the 2021 quarter was 21.6%, versus 21.9% for the respective 2020 period.

On an adjusted basis, the ETR for the first quarter 2021 was 23.9%, flat with the ~~Business Combination.~~respective 2020 period.

~~Forward-looking Statements~~Income from equity investments

~~Certain~~Reported income from equity investments for the first quarter 2021 was $43 million, versus $17 million for the respective 2020 period. On an adjusted basis, income from equity investments for the first quarter of 2021 was $62 million, versus $31 million, in the prior respective period. The increase in both the reported and adjusted income from equity investments was driven by the deconsolidation of a joint venture with operations in APAC which is reflected in equity income effective January 1, 2021 (see Note 13 to the condensed consolidated financial statements), and the impact of unfavorable foreign currency revaluation on an unhedged loan of an investment in EMEA in the prior year period.

Noncontrolling interests from continuing operations

At March 31, 2021, noncontrolling interests from continuing operations consisted primarily of non-controlling shareholders' investments in APAC (primarily China) and surface technologies.

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Reported noncontrolling interests from continuing operations increased $3 million for the first quarter of 2021 versus the respective 2020 period. Adjusted noncontrolling interests from continuing operations decreased $7 million for the first quarter of 2021 versus the respective 2020 period, primarily driven by the deconsolidation of a joint venture with operations in APAC (see Note 13 to the condensed consolidated financial statements) and the buyout of minority shareholders in the Republic of South Africa.

Income from continuing operations

Reported income from continuing operations increased $408 million, or 71%, for the first quarter of 2021 primarily due to higher operating profit versus the respective 2020 period.

On an adjusted basis, which excludes the impacts of purchase accounting and other non-GAAP adjustments, income from continuing operations increased $303 million, or 30%, for 2021 versus the respective 2020 period. The increase in the quarter was driven by higher overall adjusted operating profit.

Diluted earnings per share from continuing operations

Reported diluted EPS from continuing operations increased $0.79, or 74%, for 2021 versus the comparable 2020 period. On an adjusted basis, diluted EPS of $2.49 for the first quarter increased $0.60, or 32% versus the respective 2020 period. The increase in both reported and adjusted diluted EPS is driven by higher income from continuing operations and lower diluted shares outstanding.

Employees

The number of employees at March 31, 2021 was 71,699, a decrease of 7,309 employees from March 31, 2020 primarily driven by cost reduction actions and divestitures.

Other Financial Data

EBITDA from continuing operations was $2,422 million for the first quarter 2021 as compared to $1,892 million in the respective 2020 period. Adjusted EBITDA from continuing operations increased to $2,438 million for the first quarter 2021 from $2,049 million in the respective 2020 period.

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

Other Comprehensive Income (Loss)

Other comprehensive income (loss) for the first quarter 2021 was a loss of $661 million and resulted primarily from currency translation adjustments of $715 million during the quarter. The translation adjustments reflect the impact of translating local currency foreign subsidiary financial statements to U.S. dollars, and ~~assumptions in this document contain or~~ are largely driven by the movement of the U.S. dollar against major currencies including the Euro, British pound and the Chinese yuan. See the "Currency" section of the MD&A for exchange rates used for translation purposes and Note 11 to the condensed consolidated financial statements for a summary of the currency translation adjustment component of accumulated other comprehensive income by segment.

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Segment Discussion

The following summary of sales and operating profit by segment provides a basis for the discussion that follows. Linde plc evaluates the performance of its reportable segments based on ~~“forward-looking” information. Forward-looking~~operating profit, excluding items not indicative of ongoing business trends.The reported amounts are GAAP amounts from the Condensed Consolidated Statements of Income.


	Quarter Ended March 31,
(Millions of dollars)	2021		2020		Variance
SALES
Americas	$	2,840	$	2,677	6	%
EMEA	1,799		1,633		10	%
APAC	1,436		1,336		7	%
Engineering	674		608		11	%
Other	494		485		2	%
Total sales	$	7,243	$	6,739	7	%

SEGMENT OPERATING PROFIT
Americas	$	795	$	661	20	%
EMEA	451		355		27	%
APAC	351		281		25	%
Engineering	109		91		20	%
Other	(18)		(36)		50	%
Segment operating profit	$	1,688	$	1,352	25	%
Reconciliation to reported operating profit:
Cost reduction programs and other charges (Note 2)	8		(131)
Purchase accounting impacts - Linde AG	(483)		(488)
Total operating profit	$	1,213	$	733

Americas


	Quarter Ended March 31,
(Millions of dollars)	2021			2020			Variance
Sales	$	2,840		$	2,677		6	%

Operating profit	$	795		$	661		20	%
As a percent of sales	28.0		%	24.7		%


	Quarter Ended March 31, 2021 vs. 2020
	% Change
	Sales
Factors Contributing to Changes - Sales
Volume	4	%
Price/Mix	3	%
Cost pass-through	1	%
Currency	(2)	%
Acquisitions/divestitures	—	%

	6	%

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The Americas segment includes Linde's industrial gases operations in approximately 20 countries including the United States, Canada, Mexico and Brazil.

Sales

Sales for the Americas segment increased $163 million, or 6%, for the first quarter of 2021 versus the respective 2020 period. Higher pricing contributed 3% to sales in the quarter. Higher volumes increased sales by 4% led by higher demand from the healthcare and chemical and refining end markets. Currency translation decreased sales by 2% in the quarter primarily driven by the weakening of the Brazilian real and Mexican peso against the U.S. Dollar. Cost pass-through contributed 1% to sales in the quarter with minimal impact on operating profit.

Operating profit

Operating profit in the Americas segment increased $134 million, or 20%, in 2021 versus the respective 2020 period. Operating profit increased due primarily to higher pricing and higher volumes, which were partially offset by unfavorable impacts of currency translation.

EMEA


	Quarter Ended March 31,
(Millions of dollars)	2021			2020			Variance
Sales	$	1,799		$	1,633		10	%

Operating profit	$	451		$	355		27	%
As a percent of sales	25.1		%	21.7		%


	Quarter Ended March 31, 2021 vs. 2020
	% Change
	Sales
Factors Contributing to Changes - Sales
Volume	1	%
Price/Mix	3	%
Cost pass-through	1	%
Currency	7	%
Acquisitions/divestitures	(2)	%

	10	%

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

Sales

EMEA segment sales increased by $166 million, or 10%, for the first quarter 2021 as compared to the respective 2020 period. Volumes increased 1% in the quarter driven by increased demand from the healthcare end market. Higher price increased sales by 3% in the quarter. Currency translation increased sales by 7% in the quarter due to the strengthening of the Euro, British pound and Swedish krona against the U.S. Dollar. Sales decreased 2% in the quarter related to the 2020 divestiture of a non-core business in Scandinavia. Cost pass-through contributed 1% to sales in the quarter with minimal impact on operating profit.

Operating profit

Operating profit for the EMEA segment increased by $96 million, or 27%, in the first quarter 2021 as compared to the respective 2020 period, driven largely by higher price, continued cost reduction and productivity initiatives and favorable currency translation.

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APAC


	Quarter Ended March 31,
(Millions of dollars)	2021			2020			Variance
Sales	$	1,436		$	1,336		7	%

Operating profit	$	351		$	281		25	%
As a percent of sales	24.4		%	21.0		%


	Quarter Ended March 31, 2021 vs. 2020
	% Change
	Sales
Factors Contributing to Changes - Sales
Volume/Equipment	10	%
Price/Mix	1	%
Cost pass-through	1	%
Currency	6	%
Acquisitions/divestitures	(11)	%

	7	%

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.

Sales

Sales for the APAC segment increased $100 million, or 7%, for the first quarter 2021 versus the respective 2020 period. Volumes increased 10% in the quarter primarily in the cyclical end markets and project start-ups. Higher price contributed 1% to sales. Currency translation increased sales by 6% in quarter driven primarily by the strengthening of the Chinese yuan and Australian dollar against the U.S. Dollar in the period. Sales decreased $143 million, or 11%, in the first quarter of 2021 due to the deconsolidation of a joint venture with operations in Taiwan (see Note 13 to the condensed consolidated financial statements).

Operating profit

Operating profit in the APAC segment increased $70 million, or 25%, in the first quarter 2021 versus the respective 2020 period driven by higher volumes, continued cost reduction and productivity initiatives and favorable currency translation, partially offset by a $28 million reduction due to the deconsolidation of a joint venture.

Engineering


	Quarter Ended March 31,
(Millions of dollars)	2021			2020			Variance
Sales	$	674		$	608		11	%

Operating profit	$	109		$	91		20	%
As a percent of sales	16.2		%	15.0		%

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	Quarter Ended March 31, 2021 vs. 2020
	% Change
	Sales
Factors Contributing to Changes - Sales
Volume	4	%


Currency	7	%


	11	%

Sales

Engineering segment sales increased $66 million, or 11%, in the first quarter 2021 as compared to the respective 2020 period driven primarily by favorable currency impacts of 7%. Volumes increased sales by 4% driven by project timing.

Operating profit

Engineering segment operating profit increased $18 million, or 20%, in the first quarter 2021 as compared to the respective 2020 period driven by productivity initiatives and favorable currency impacts.

Other


	Quarter Ended March 31,
(Millions of dollars)	2021			2020			Variance
Sales	$	494		$	485		2	%

Operating profit (loss)	$	(18)		$	(36)		50	%
As a percent of sales	(3.6)		%	(7.4)		%


	Quarter Ended March 31, 2021 vs. 2020
	% Change
	Sales
Factors Contributing to Changes - Sales
Volume/price	(4)	%
Cost pass-through	1	%
Currency	5	%
Acquisitions/divestitures	—	%

	2	%

Other consists of corporate costs and a few smaller businesses including: Surface Technologies, GIST, global helium wholesale, and Electronic Materials; which individually do not meet the quantitative thresholds for separate presentation.

Sales

Sales for Other increased $9 million, or 2%, for the first quarter 2021 versus the respective 2020 period. Currency translation increased sales by 5% in the period. Lower volumes decreased sales by 4% largely due to Surface Technologies. Cost pass-through increased sales by 1%.

Operating profit

Operating profit in Other increased $18 million, or 50% in the first quarter 2021 versus the respective 2020 period, due primarily to continued cost reduction and productivity initiatives.

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Currency

The results of Linde's non-U.S. operations are translated to the company’s reporting currency, the U.S. dollar, from the functional currencies. For most operations, Linde uses the local currency as its functional currency. There is inherent variability and unpredictability in the relationship of these functional currencies to the U.S. dollar and such currency movements may materially impact Linde's results of operations in any given period.

To help understand the reported results, the following is a summary of the significant currencies underlying Linde's consolidated results and the exchange rates used to translate the financial statements (rates of exchange expressed in units of local currency per U.S. dollar):


	Percentage of YTD 2021 Consolidated Sales		Exchange Rate for Income Statement		Exchange Rate for Balance Sheet
			Year-To-Date Average		March 31,	December 31,
Currency			2021	2020	2021	2020
Euro	21	%	0.83	0.91	0.85	0.82
Chinese yuan	8	%	6.48	6.98	6.55	6.53
British pound	6	%	0.73	0.78	0.73	0.73
Australian dollar	4	%	1.29	1.52	1.32	1.30
Brazilian real	4	%	5.46	4.43	5.70	5.20
Canadian dollar	3	%	1.27	1.34	1.26	1.27
Korean won	2	%	1,114	1,193	1,132	1,087
Mexican peso	2	%	20.34	19.84	20.43	19.91
Indian rupee	2	%	72.90	72.38	73.11	73.07
South African rand	1	%	14.96	15.32	14.78	14.69
Swedish krona	1	%	8.39	9.67	8.73	8.23
Thailand bhat	1	%	30.28	31.27	31.24	29.96

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Liquidity, Capital Resources and Other Financial Data

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


(Millions of dollars)	Three months ended March 31,
	2021		2020
NET CASH PROVIDED BY (USED FOR):
OPERATING ACTIVITIES
Net income (including noncontrolling interests)	$	1,017	$	606
Non-cash charges (credits):
Add: Depreciation and amortization	1,166		1,142
Add: Deferred income taxes	(65)		(107)
Add: Share-based compensation	29		43
Add: Cost reduction programs and other charges, net of payments (a)	(76)		40
Net income adjusted for non-cash charges	2,071		1,724
Less: Working capital	(42)		(270)






Less: Pension contributions	(12)		(17)
Other	92		(90)
Net cash provided by operating activities	$	2,109	$	1,347
INVESTING ACTIVITIES
Capital expenditures	(762)		(803)
Acquisitions, net of cash acquired	(10)		(41)
Divestitures and asset sales	21		231
Net cash provided by (used for) investing activities	$	(751)	$	(613)
FINANCING ACTIVITIES
Debt increase (decrease) - net	681		3,112
Issuances (purchases) of common stock - net	(851)		(1,815)
Cash dividends - Linde plc shareholders	(553)		(511)

Noncontrolling interest transactions and other	(247)		(27)
Net cash provided by (used for) financing activities	$	(970)	$	759

Effect of exchange rate changes on cash and cash equivalents	$	(46)	$	(179)
Cash and cash equivalents, end-of-period	$	4,096	$	4,014

(a) See Note 2 to the condensed consolidated financial statements.

Cash Flow from Operations

Cash provided by operations of $2,109 million for the three months ended March 31, 2021 increased $762 million, or 57%, versus 2020. The increase was driven by higher net income adjusted for non-cash charges, lower working capital requirements, lower merger and synergy related cash outflows and favorable changes in other long-term assets and liabilities. Cost reduction programs and other charges was a benefit of $8 million and a charge of $131 million for the quarters ended March 31, 2021 and 2020, respectively. Related cash outflows were $68 million and $91 million for the same respective periods.

Linde estimates that total 2021 required contributions to its pension plans will be in the range of $70 million to $80 million, of which $12 million has been made through March 31, 2021. At a minimum, Linde contributes to its pension plans to comply with local regulatory requirements (e.g., ERISA in the United States). Discretionary contributions in excess of the local minimum requirements are made based on ~~Praxair, Inc.’s,~~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 the cash. Changes to these factors can impact the amount and timing of discretionary contributions from year to year.

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Investing

Net cash used for investing of $751 million for the three months ended March 31, 2021 increased $138 million versus 2020, primarily driven by the proceeds from divestitures in 2020, partially offset by lower capital expenditures and acquisitions.

Capital expenditures for the three months ended March 31, 2021 were $762 million, $41 million lower than the prior year.

At March 31, 2021, Linde's sale of gas backlog of large projects under construction was approximately $3.5 billion. This represents the total estimated capital cost of large plants under construction.

Acquisitions for the three months ended March 31, 2021 were $10 million and related primarily to acquisitions in EMEA. Acquisitions for the three months ended March 31, 2020 were $41 million and related to acquisitions in the Americas.

Divestitures and asset sales for the three months ended March 31, 2021 and 2020 were $21 million and $231 million, respectively. The 2020 period includes net proceeds from merger-related divestitures of $98 million from the sale of selected assets of Linde ~~AG’s~~ China and proceeds of approximately $130 million related to the divestiture of a non-core business in Scandinavia.

Financing

Cash used for financing activities was $970 million for the three months ended March 31, 2021 as compared to cash provided by financing activities of $759 million for the three months ended March 31, 2020. Cash provided by debt was $681 million versus cash provided by debt of $3,112 million in 2020 primarily due to lower short-term debt borrowings net of repayments. Net purchases of ordinary shares were $851 million in 2021 versus $1,815 million in 2020. Cash dividends of $553 million increased $42 million from 2020 driven primarily by a 10% increase in quarterly dividends per share from 96.3 cents per share to 106 cents per share. Cash used for Noncontrolling interest transactions and other was $247 million for the three months ended March 31, 2021 versus cash used of $27 million for the respective 2020 period due to the settlement of the buyout of minority interests in the Republic of South Africa in January of 2021.

The company continues to believe it has sufficient operating flexibility, cash, and funding sources to meet its business needs around the world. The company had $4.1 billion of cash as of March 31, 2021, and has a $5 billion unsecured and undrawn revolving credit agreement with no associated financial covenants. No borrowings were outstanding under the credit agreement as of March 31, 2021. The company does not anticipate any limitations on its ability to access the debt capital markets and/or ~~Linde plc’s beliefs~~other external funding sources and ~~assumptions~~remains committed to its strong ratings from Moody’s and Standard & Poor’s.

On January 25, 2021, the company's board of directors approved the repurchase of $5.0 billion of its ordinary shares ("2021 program") which could take place from time to time on the ~~basis~~open market (and could include the use of ~~factors currently known~~10b5-1 trading plans), subject to ~~them. These forward-looking statements include terms~~market and ~~phrases such as: “anticipate,” “expect,” “continue,” “should,” “could,” “may,” “plan,” “project,” “predict,” “will,” “potential,” “forecast,”~~business conditions. The 2021 program has a maximum repurchase amount of 15% of outstanding shares, began on February 1, 2021 and ~~similar expressions. These forward-looking statements include statements regarding benefits~~expires on July 31, 2023.

Legal Proceedings

See Note 9 to the condensed consolidated financial statements.

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NON-GAAP MEASURES AND RECONCILIATIONS

(Millions of dollars, except per share data)

(UNAUDITED)

The following non-GAAP measures are intended to supplement investors’ understanding of the ~~proposed Business Combination, integration plans~~company’s financial information by providing measures which investors, financial analysts and ~~expected synergies and cost reductions, anticipated future growth, financial and~~management use to help evaluate the company’s operating performance and ~~results. Forward-looking statements involve significant risks and uncertainties that may cause actual results~~liquidity. Items which the company does not believe to be ~~materially different~~indicative of on-going business trends are excluded from these calculations so that investors can better evaluate and analyze historical and future business trends on a consistent basis. Definitions of these non-GAAP measures may not be comparable to similar definitions used by other companies and are not a substitute for similar GAAP measures.


	Quarter Ended March 31,
	2021			2020




Adjusted Operating Profit and Operating Margin
Reported operating profit	$	1,213		$	733
Add: Cost reduction programs and other charges	(8)			131

Add: Purchase accounting impacts - Linde AG (c)	483			488
Total adjustments	475			619
Adjusted operating profit	$	1,688		$	1,352

Reported percentage change	65		%	20		%
Adjusted percentage change	25		%	11		%

Reported sales	$	7,243		$	6,739

Reported operating margin	16.7		%	10.9		%
Adjusted operating margin	23.3		%	20.1		%

Adjusted Depreciation and amortization
Reported depreciation and amortization	$	1,166		$	1,142
Less: Purchase accounting impacts - Linde AG (c)	(478)			(476)
Adjusted depreciation and amortization	$	688		$	666

Adjusted Other Income (Expense) - net
Reported Other Income (Expense) - net	$	4		$	15
Less: Purchase accounting impacts - Linde AG (c)	(5)			(12)
Adjusted Other Income (Expense) - net	$	9		$	27

Adjusted Net Pension and OPEB Cost (Benefit), Excluding Service Cost
Reported net pension and OPEB cost (benefit), excluding service cost	$	(49)		$	(45)
Add: Pension settlement charges	—			—
Adjusted Net Pension and OPEB cost (benefit), excluding service costs	$	(49)		$	(45)

Adjusted Interest Expense - Net
Reported interest expense - net	$	20		$	24
Add: Purchase accounting impacts - Linde AG (c)	18			22


Adjusted interest expense - net	$	38		$	46

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Adjusted Income Taxes (a)
Reported income taxes	$	268		$	165
Add: Purchase accounting impacts - Linde AG (c)	118			122

Add: Cost reduction programs and other charges	20			36

Total adjustments	138			158
Adjusted income taxes	$	406		$	323

Adjusted Effective Tax Rate (a)
Reported income before income taxes and equity investments	$	1,242		$	754

Add: Purchase accounting impacts - Linde AG (c)	465			466
Add: Cost reduction programs and other charges	(8)			131

Total adjustments	457			597
Adjusted income before income taxes and equity investments	$	1,699		$	1,351

Reported Income taxes	$	268		$	165
Reported effective tax rate	21.6		%	21.9		%

Adjusted income taxes	$	406		$	323
Adjusted effective tax rate	23.9		%	23.9		%

Income from Equity Investments
Reported income from equity investments	$	43		$	17
Add: Purchase accounting impacts - Linde AG (c)	19			14
Adjusted income from equity investments	$	62		$	31

Adjusted Noncontrolling Interests from Continuing Operations
Reported noncontrolling interests from continuing operations	$	(38)		$	(35)

Add: Purchase accounting impacts - Linde AG (c)	(5)			(15)

Adjusted noncontrolling interests from continuing operations	$	(43)		$	(50)

Adjusted Income from Continuing Operations (b)
Reported income from continuing operations	$	979		$	571

Add: Cost reduction programs and other charges	(28)			95

Add: Purchase accounting impacts - Linde AG (c)	361			343
Total adjustments	333			438
Adjusted income from continuing operations	$	1,312		$	1,009

Adjusted Diluted EPS from Continuing Operations (b)
Reported diluted EPS from continuing operations	$	1.86		$	1.07

Add: Cost reduction programs and other charges	(0.05)			0.18

Add: Purchase accounting impacts - Linde AG (c)	0.68			0.64
Total adjustments	0.63			0.82
Adjusted diluted EPS from continuing operations	$	2.49		$	1.89

Reported percentage change	74		%	35		%
Adjusted percentage change	32		%	12		%

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Adjusted EBITDA and % of Sales
Income from continuing operations	$	979		$	571
Add: Noncontrolling interests related to continuing operations	38			35
Add: Net pension and OPEB cost (benefit), excluding service cost	(49)			(45)
Add: Interest expense	20			24
Add: Income taxes	268			165
Add: Depreciation and amortization	1,166			1,142
EBITDA from continuing operations	$	2,422		$	1,892
Add: Cost reduction programs and other charges	(8)			131
Add: Purchase accounting impacts - Linde AG (c)	24			26
Total adjustments	16			157
Adjusted EBITDA from continuing operations	$	2,438		$	2,049

Reported sales	$	7,243		$	6,739
% of sales
EBITDA from continuing operations	33.4		%	28.1		%
Adjusted EBITDA from continuing operations	33.7		%	30.4		%

(a) The income tax expense (benefit) on the non-GAAP pre-tax adjustments was determined using the applicable tax rates for the jurisdictions that were utilized in calculating the GAAP income tax expense (benefit) and included both current and deferred income tax amounts.

(b) Net of income taxes which are shown separately in “Adjusted Income Taxes and Adjusted Effective Tax Rate”.

(c) The company believes that its non-GAAP measures excluding Purchase accounting impacts - Linde AG are useful to investors because: (i) the business combination was a merger of equals in an all-stock merger transaction, with no cash consideration, (ii) the company is managed on a geographic basis and the results of certain geographies are more heavily impacted by purchase accounting than others, causing results that are not comparable at the reportable segment level, therefore, the impacts of purchasing accounting adjustments to each segment vary and are not comparable within the company and when compared to other companies in similar regions, (iii) business management is evaluated and variable compensation is determined based on results excluding purchase accounting impacts, and; (iv) it is important to investors and analysts to understand the purchase accounting impacts to the financial statements.

A summary of each of the adjustments made for Purchase accounting impacts - Linde AG are as follows:

Adjusted Operating Profit and Margin: The purchase accounting adjustments for the periods presented relate primarily to depreciation and amortization related to the fair value step up of fixed assets and intangible assets (primarily customer related) acquired in the merger and the allocation of fair value step-up for ongoing Linde AG asset disposals (reflected in Other Income/(Expense)).

Adjusted Interest Expense - Net: Relates to the amortization of the fair value of debt acquired in the merger.

Adjusted Income Taxes and Effective Tax Rate: Relates to the current and deferred income tax impact on the adjustments discussed above. The income tax expense (benefit) on the non-GAAP pre-tax adjustments was determined using the applicable tax rates for the jurisdictions that were utilized in calculating the GAAP income tax expense (benefit) and included both current and deferred income tax amounts.

Adjusted Income from Equity Investments: Represents the amortization of increased fair value on equity investments related to depreciable and amortizable assets.

Adjusted Noncontrolling Interests from Continuing Operations: Represents the noncontrolling interests’ ownership portion of the adjustments described above determined on an entity by entity basis.

Net Debt and Adjusted Net Debt

Net debt is a financial liquidity measure used by investors, financial analysts and management to evaluate the ~~results predicted~~ability of a company to repay its debt. Purchase accounting impacts have been excluded as they are non-cash and do not have an impact on liquidity.


	March 31, 2021		December 31, 2020
(Millions of dollars)
Debt	$	15,750	$	16,154
Less: cash and cash equivalents	(4,096)		(3,754)
Net debt	11,654		12,400
Less: purchase accounting impacts - Linde AG	(98)		(121)
Adjusted net debt	$	11,556	$	12,279

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Supplemental Guarantee Information

On June 6, 2020, the company filed a Form S-3 Registration Statement with the SEC ("the Registration Statement").

Linde plc may offer debt securities, preferred shares, depositary shares and ordinary shares under the Registration Statement, and debt securities exchangeable for or ~~expected. No assurance can~~convertible into preferred shares, ordinary shares or other debt securities. Debt securities of Linde plc may be ~~given that these forward-looking statements will prove accurate and correct,~~ guaranteed by Linde, Inc (previously Praxair) and/or ~~that projected~~Linde GmbH (previously Linde AG). Linde plc may provide guarantees of debt securities offered by its wholly owned subsidiaries Linde, Inc. or ~~anticipated future results~~Linde Finance under the Registration Statement.

Linde, Inc. (previously Praxair, Inc.) is a wholly owned subsidiary of Linde plc. Linde, Inc. may offer debt securities under the Registration Statement. Debt securities of Linde, Inc. will be ~~achieved. All forward-looking statements included in this document are based upon information available to Praxair,~~guaranteed by Linde plc, and such guarantees by Linde plc may be guaranteed by Linde GmbH. Linde, Inc., may also provide (i) guarantees of debt securities offered by Linde AGplc 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 plc will guarantee debt securities of Linde Finance offered under the Registration Statement. Linde GmbH and Linde, ~~plc on the date hereof, and each~~Inc. may guarantee Linde plc’s obligations under its downstream guarantee.

Linde GmbH is a wholly owned subsidiary of ~~Praxair, Inc.,~~ Linde ~~AG and~~plc. Linde GmbH may provide (i) guarantees of debt securities offered by Linde plc ~~disclaims~~under the Registration Statement and ~~does not undertake any obligation to update~~(ii) upstream guarantees of downstream guarantees provided by Linde plc of debt securities of Linde, Inc. or ~~revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.~~Linde Finance offered under the Registration Statement.

In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than Praxair, Inc., Linde AG orSeptember 2019, Linde plc ~~has described. All such factors are difficult to predict and beyond Praxair, Inc.’s, Linde AG’s or Linde plc’s control. These factors include:~~

failure to obtain applicable governmental or regulatory approvals in a timely manner or otherwise, or being required to accept conditions, including divestitures, that could reduce the anticipated benefitsprovided downstream guarantees of all of the ~~proposed Business Combination as a condition to obtaining regulatory approvals;~~

~~the ability to implement the Business Combination and to satisfy applicable closing conditions;~~

~~the ability to integrate the operations of Praxair,~~pre-business combination Linde, Inc. and Linde ~~AG,~~Finance notes, and Linde GmbH and Linde, Inc., respectively, provided upstream guarantees of Linde plc’s downstream guarantees.

For further information about the ~~ultimate outcome~~guarantees of the ~~combined group’s commercial~~debt securities registered under the Registration Statement (including the ranking of such guarantees, limitations on enforceability of such guarantees and ~~operating strategy, including~~ the ~~ultimate ability to realize synergies~~circumstances under which such guarantees may be released), see “Description of Debt Securities – Guarantees” and ~~cost reductions;~~“Description of Debt Securities – Ranking” in the Registration Statement, which subsections are incorporated herein by reference.

~~operating costs, customer loss or business disruption being greater than expected in anticipation of, or, if consummated,~~

The following ~~the Business Combination;~~

~~the effects of a combination of Praxair,~~tables present summarized financial information for Linde plc, Linde, Inc., Linde GmbH and Linde ~~AG, including the~~Finance on a combined ~~group’s future financial position, operating results, strategy~~basis, after eliminating intercompany transactions and ~~plans;~~balances between them and excluding investments in and equity in earnings from non-guarantor subsidiaries.

~~the combined group’s, Praxair, Inc.’s and Linde AG’s ability to maintain effective internal controls;~~

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unanticipated litigation, claims or assessments, as well as the outcome/impact of any current/pending litigation, claims or assessments, including in connection with a potential post-completion reorganization;


(Millions of dollars)
Statement of Income Data	Three Months Ended March 31, 2021		Twelve Months Ended December 31, 2020
Sales	$	1,720	$	6,772
Operating profit	179		760
Net income	87		660
Transactions with non-guarantor subsidiaries	424		2,082

Balance Sheet Data (at period end)
Current assets (a)	$	3,227	$	3,117
Long-term assets (b)	17,420		17,892
Current liabilities (c)	10,595		8,265
Long-term liabilities (d)	36,727		38,188

(a) From current assets above, amount due from non-guarantor subsidiaries	$	949	$	937
(b) From long-term assets above, amount due from non-guarantor subsidiaries	4,336		4,553
(c) From current liabilities above, amount due to non-guarantor subsidiaries	1,078		1,053
(d) From long-term liabilities above, amount due to non-guarantor subsidiaries	22,834		22,419

~~potential security violations to the combined group’s, Praxair, Inc.’s and Linde AG’s information technology systems;~~

~~the investment performance of Praxair, Inc.’s and Linde AG’s pension plan assets, which could require Praxair, Inc. and Linde AG to increase their pension contributions;~~

changes in legislation or governmental regulations affecting the combined group, Praxair, Inc. and Linde AG; international, national or local economic, social or political conditions or other factors such as currency exchange rates, inflation rates, recessionary or expansive trends, taxes and regulations and laws that could adversely affect Praxair, Inc. and Linde AG or their clients; and

~~other factors discussed elsewhere in this document and in the section "Risk Factors" beginning on page 36 of the proxy statement/prospectus included in Linde plc's Registration Statement on Form S-4.~~

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Refer to Item 7A. to Part II of Linde's 2020 Annual Report on Form 10-K for discussion.

During the period covered by this report, Linde plc did not conduct any material activities and therefore did not incur any significant interest rate risk, foreign currency exchange rate risk, commodity price risk or other relevant market risks.

Item 4. Controls and Procedures

(a)Based on an evaluation of the effectiveness of ~~Linde plc’s~~Linde's disclosure controls and procedures, which was made under the supervision and with the participation of management, including ~~Linde plc’s~~Linde's principal executive officer and principal financial officer, the principal executive officer and principal financial officer ~~has~~have each concluded that, as of the end of the quarterly period covered by this report, such disclosure controls and procedures are effective in ensuring that information required to be disclosed by Linde ~~plc~~ in reports that it files under the Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and accumulated and communicated to management including ~~Linde plc’s~~Linde's principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.

(b)There were no changes in Linde's internal control over financial reporting that occurred during the quarterly period covered by this report that have materially affected, or are reasonably likely to materially affect, Linde's internal control over financial reporting.

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PART II - OTHER INFORMATION

Linde plc and Subsidiaries

Item 1. Legal Proceedings

~~None.~~See Note 9 to the condensed consolidated financial statements for a description of current legal proceedings.

Item 1A. Risk Factors

~~To date, Linde plc has not conducted any~~

Through the quarterly period covered by this report, there have been no material ~~activities other than those incidental~~changes to ~~its formation and the matters contemplated by the Business Combination Agreement.For information regarding risks related to the Business Combination and risks related to Linde plc after completion of the Business Combination and other risks, please see~~ the risk factors ~~set forth~~disclosed in ~~the section “Risk Factors” beginning on page 36~~Item 1A to Part I of ~~the proxy statement/prospectus included in Linde plc's Registration Statement~~Linde's Annual Report on Form ~~S-4.~~10-K for the year ended December 31, 2020.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

~~None.~~Purchases of Equity Securities- Certain information regarding 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 quarter ended March 31, 2021 is provided below:


Period	Total Number of Shares Purchased (Thousands)	Average Price Paid Per Share		Total Numbers of Shares Purchased as Part of Publicly Announced Program (1,2) (Thousands)	Approximate Dollar Value of Shares that May Yet be Purchased Under the Program (2) (Millions)
January 2021	537	$	257.37	537	$	1,138
February 2021	1,240	$	251.63	1,240	$	4,688
March 2021	1,719	$	265.40	1,719	$	4,232
First Quarter 2021	3,496	$	259.28	3,496	$	4,232

(1) On January 22, 2019 the company’s board of directors approved the repurchase of $6.0 billion of its ordinary shares ("2019 program") which could take place from time to time on the open market (which could include the use of 10b5-1 trading plans), subject to market and business conditions. The 2019 program had a maximum repurchase amount of 15% of outstanding shares and expired on February 1, 2021.

(2) On January 25, 2021 the company's board of directors approved the repurchase of $5.0 billion of its ordinary shares ("2021 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.The 2021 program has a maximum repurchase amount of 15% of outstanding shares, began on February 1, 2021 and expires on July 31, 2023.

As of March 31, 2021, the company repurchased $768 million and $4.9 billion of its ordinary shares pursuant to the 2021 and 2019 programs, respectively. Under the 2021 program, $4.2 billion shares remain authorized. The 2019 program expired on February 1, 2021.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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Item 6. Exhibits

(a)

Exhibits

10.01

First Amendment to the Linde Compensation Deferral Program effective April 1, 2021.

31.01

Rule 13a-14(a) Certification

~~(a)~~

~~Exhibits~~31.02

~~2.01~~

Business Combination Agreement, dated June 1, 2017, by and among Praxair, Inc., Linde Aktiengesellschaft, Linde Plc (formerly known as Zamalight plc), Zamalight Holdco LLC and Zamalight Subco, Inc. was filed as Annex A to the proxy statement/prospectus forming a part of the Registration Statement on Form S-4 of Linde Plc filed on June 5, 2017, as amended (file no. 333-218485) and is incorporated herein by reference.

~~2.01(i)~~

Amendment No. 1, dated August 10, 2017, to the Business Combination Agreement, by and among Praxair, Inc., Linde Aktiengesellschaft, Linde plc (formerly known as Zamalight plc), Zamalight Holdco LLC and Zamalight Subco, Inc. was filed as Annex A to the proxy statement/prospectus forming a part of the Registration Statement on Form S-4 of Linde Plc, filed on June 5, 2017, as amended (file no. 333-218485) and is incorporated herein by reference.

~~3.01~~

Public Limited Company Constitution of Linde Plc was filed as Exhibit 3.01 to Amendment No. 2 to the Registration Statement on Form S-4 of Linde Plc filed on July 28, 2017 (file no. 333-218485) and is incorporated herein by reference.

~~31.01~~

Rule 13a-14(a) ~~and 15d-14(a)~~ Certification

32.01

Section 1350 Certification (such certifications are furnished for the information of the Commission and shall not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act).

~~101.INS~~32.02

101.INS

XBRL Instance Document: The XBRL Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH

XBRL Taxonomy Extension Schema

101.CAL

XBRL Taxonomy Extension Calculation Linkbase

101.LAB

XBRL Taxonomy Extension Label Linkbase

101.PRE

XBRL Taxonomy Extension Presentation Linkbase

101.DEF

XBRL Taxonomy Extension Definition Linkbase

*Indicates a management contract or compensatory plan or arrangement.

Table of Contents

SIGNATURE

Linde ~~Plc~~plc and Subsidiaries

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



						Linde plc

						(Registrant)

Date: ~~October 30, 2017~~May 6, 2021						By: /s/ ~~Christopher Cossins~~Kelcey E. Hoyt

						~~Christopher Cossins~~Kelcey E. Hoyt
						~~Principal Executive Officer, Principal Finance Officer, and Principal~~Chief Accounting Officer

1742


INDEX

PART I - FINANCIAL INFORMATION

Item 1.			Financial Statements (unaudited)

~~INDEX~~

~~PART I - FINANCIAL INFORMATION~~

~~Item 1.~~	~~Financial Statement~~s

	~~Consolidated Balance Sheets at September 30, 2017 and April 18, 2017 (Unaudited)~~	3

	~~Consolidated Statement of Income and Other Comprehensive Income Quarter Ended September 30, 2017 and the Period from April 18, 2017 to September 30, 2017 (Unaudited)~~	4

	~~Consolidated Statement of Cash Flow for the Period from April 18, 2017 to September 30, 2017 (Unaudited)~~	5

	Consolidated Statements of ~~Equity at September 30, 2017 (Unaudited)~~Income - Quarters Ended March 31, 2021 and 2020	64



			Consolidated Statements of Comprehensive Income - Quarters Ended March 31, 2021 and 2020	5


			Condensed Consolidated Balance Sheets - March 31, 2021 and December 31, 2020	6

			Condensed Consolidated Statements of Cash Flows - Three Months Ended March 31, 2021 and 2020	7

			Notes to Condensed Consolidated Financial Statements ~~(Unaudited)~~	78

Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations	1324

Item 3.			Quantitative and Qualitative Disclosures about Market Risk	1439

Item 4.			Controls and Procedures	1439

PART II - OTHER INFORMATION

Item 1.			Legal Proceedings	1540

Item 1A.			Risk Factors	1540

Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds	1540

Item 3.			Defaults Upon Senior Securities	1540

Item 4.			Mine Safety Disclosures	1540

Item 5.			Other Information	1540

Item 6.			Exhibits	1641

Signature				1742



	September 30, 2017			Opening Balance April 18, 2017
ASSETS
CURRENT ASSETS
Cash at banks	$	83,342		$	—
Other assets	8,984,310			—
NON-CURRENT ASSETS	—			—
TOTAL ASSETS	$	9,067,652		$	—

SHAREHOLDER'S EQUITY AND LIABILITIES
CURRENT LIABILITIES
Accrued liabilities	$	622,059		$	—
Related party debt (Note 7)	9,220,590			—
NON CURRENT LIABILITIES
CAPITAL AND RESERVES
Share Capital (A ordinary shares of €1.00 each, authorized and issued shares - 25,000 shares)	26,827			26,827
Additional paid-in capital	26,827			26,827
Accumulated other comprehensive income	(16,116		)	—

Receivable from shareholders	(59,070		)	(53,654		)
Retained earnings	(753,465		)	—
TOTAL SHAREHOLDER'S EQUITY	(774,997		)	—
EQUITY AND LIABILITIES	$	9,067,652		$	—


	Quarter Ended March 31,
	2021		2020
NET INCOME (INCLUDING NONCONTROLLING INTERESTS)	$	1,018	$	608

OTHER COMPREHENSIVE INCOME (LOSS)
Translation adjustments:
Foreign currency translation adjustments	(657)		(2,740)
Reclassification to net income (Note 13)	(52)		0
Income taxes	(6)		25
Translation adjustments	(715)		(2,715)
Funded status - retirement obligations (Note 8):
Retirement program remeasurements	20		58
Reclassifications to net income	43		22
Income taxes	(23)		(15)
Funded status - retirement obligations	40		65
Derivative instruments (Note 5):
Current unrealized gain (loss)	21		(65)
Reclassifications to net income	(2)		24
Income taxes	(5)		11
Derivative instruments	14		(30)





TOTAL OTHER COMPREHENSIVE INCOME (LOSS)	(661)		(2,680)

COMPREHENSIVE INCOME (LOSS) (INCLUDING NONCONTROLLING INTERESTS)	357		(2,072)
Less: noncontrolling interests	(32)		71
COMPREHENSIVE INCOME (LOSS) - LINDE PLC	$	325	$	(2,001)


	March 31, 2021		December 31, 2020
Assets
Cash and cash equivalents	$	4,096	$	3,754
Accounts receivable - net	4,139		4,167
Contract assets	137		162
Inventories	1,695		1,729
Prepaid and other current assets	1,065		1,112
Total Current Assets	11,132		10,924
Property, plant and equipment - net	26,934		28,711

Goodwill	27,472		28,201
Other intangible assets - net	14,559		16,184
Other long-term assets	4,896		4,209
Total Assets	$	84,993	$	88,229
Liabilities and equity
Accounts payable	$	2,945	$	3,095
Short-term debt	3,276		3,251
Current portion of long-term debt	2,524		751
Contract liabilities	1,863		1,769

Other current liabilities	4,419		4,874
Total Current Liabilities	15,027		13,740
Long-term debt	9,950		12,152
Other long-term liabilities	12,383		12,755

Total Liabilities	37,360		38,647
Redeemable noncontrolling interests	13		13
Linde plc Shareholders’ Equity:
Ordinary shares,€0.001 par value, authorized 1,750,000,000 shares, 2021 issued: 552,012,862 ordinary shares; 2020 issued: 552,012,862 ordinary shares	1		1
Additional paid-in capital	40,192		40,202
Retained earnings	17,563		17,178
Accumulated other comprehensive income (loss) (Note 11)	(5,345)		(4,690)
Less: Treasury shares, at cost (2021 – 31,804,369 shares and 2020 – 28,718,333 shares)	(6,201)		(5,374)
Total Linde plc Shareholders’ Equity	46,210		47,317
Noncontrolling interests	1,410		2,252
Total Equity	47,620		49,569
Total Liabilities and Equity	$	84,993	$	88,229



Note 1. ~~Organization and Basis~~Summary of ~~Presentation~~Significant Accounting Policies			89

Note 2. ~~Accounting Policies~~Cost Reduction Programs and Other Charges			109

Note 3. ~~Subsidiaries~~Supplemental Information			11

Note 4. ~~Receivables from Shareholders~~Debt			1112

Note 5. ~~Other Assets~~Financial Instruments			1113

Note 6. ~~Accrued Liabilities~~Fair Value Disclosures			1215

Note 7. ~~Related Parties~~Earnings Per Share – Linde plc Shareholders			1217


Note 8. ~~Loss Per Share~~Retirement Programs			1217

Note 9. ~~Events After the Balance Sheet Date~~Commitments and Contingencies			1218

Note 10. Segments			19

Note 11. Equity			20

Note 12. Revenue Recognition			21

Note 13. Divestitures			23



ý☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



¨ ☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



	Quarter ended September 30, 2017			April 18, 2017 - September 30, 2017
Other expenses	$	290,825		$	753,465
Operating loss	(290,825		)	(753,465		)
Net finance costs	—			—
Loss before tax	(290,825		)	(753,465		)
Income tax	—			—
Loss for the period	(290,825		)	(753,465		)
Other comprehensive income
Other comprehensive income (loss) for the period, net of tax	(18,622		)	(16,116		)
Total comprehensive loss for the period	$	(309,447	)	$	(769,581	)
Loss per share - basic and diluted	$	(11.63	)	$	(30.14	)



	April 18, 2017 - September 30, 2017
OPERATIONS
Net loss	$	(753,465	)
Working capital:
Other assets	119,140
Accrued liabilities	599,527
Net cash provided by operating activities	(34,798		)

INVESTING
Net cash used for investing activities	—

FINANCING
Related party debt	118,140
Net cash provided by (used for) financing	118,140

Cash and cash equivalents, beginning-of-period	—

Cash and cash equivalents, end-of-period	$	83,342



	Share capital		Additional Paid in Capital		Accumulated other comprehensive income			Accumulated deficit			Receivables from shareholders			Total equity

Issue of share capital on incorporation - April 18, 2017	$	26,827	$	26,827	$	—		$	—		$	(53,654	)	$	—
Loss for the period	—		—		—			(462,640		)	—			(462,640		)
Total comprehensive loss for the period	—		—		2,506			—			(2,506		)	—
June 30, 2017	26,827		26,827		2,506			(462,640		)	(56,160		)	(462,640		)

Loss for the period	—		—		—			(290,825		)	—			(290,825		)
Total comprehensive loss for the period	—		—		(18,622		)	—			(2,910		)	(21,532		)
September 30, 2017	$	26,827	$	26,827	$	(16,116	)	$	(753,465	)	$	(59,070	)	$	(774,997	)



	September 30, 2017

SEC registration fee*	$	8,984,310
Incorporation of Linde Intermediate Holding AG	59,070
Incorporation of Linde Holding GmbH	59,070
BaFin registration fee*	118,140
	$	9,220,590



	Quarter Ended September 30, 2017			April 18, 2017 to September 30, 2017
Loss from continuing operations attributable to the owners of the company	$	(290,825	)	$	(753,465	)
Weighted average number of ordinary shares in issue	25,000			25,000
Loss per share - basic and diluted	$	(11.63	)	$	(30.14	)