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Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.

Economic Profit
Net Operating Profit after Taxes (NOPAT)
Cash Operating Taxes
Invested Capital
Cost of Capital
Economic Spread Ratio
Economic Profit Margin

Linde plc, economic profit calculation

US$ in millions

12 months ended:	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Net operating profit after taxes (NOPAT)¹	6,814)	6,386)	3,833)	3,800)	2,699)
Cost of capital²	13.19%	13.30%	13.15%	13.05%	12.72%
Invested capital³	74,884)	73,409)	72,341)	72,560)	78,771)

Economic profit⁴	(3,062)	(3,379)	(5,678)	(5,672)	(7,317)

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2024 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 6,814 – 13.19% × 74,884 = -3,062

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Item	Description	The company
Economic profit	Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital.	Linde plc economic profit increased from 2022 to 2023 and from 2023 to 2024.

Linde plc, NOPAT calculation

US$ in millions

12 months ended:	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Net income, Linde plc	6,565)	6,199)	4,147)	3,826)	2,501)
Deferred income tax expense (benefit)¹	(142)	(84)	(383)	(254)	(368)
Increase (decrease) in allowance for expected credit losses²	(36)	52)	—)	(66)	165)
Increase (decrease) in cost reduction programs³	27)	(106)	(133)	84)	169)
Increase (decrease) in equity equivalents⁴	(151)	(138)	(516)	(236)	(34)
Interest expense	484)	397)	180)	117)	170)
Interest expense, operating lease liability⁵	33)	31)	24)	24)	26)
Adjusted interest expense	517)	428)	204)	141)	196)
Tax benefit of interest expense⁶	(108)	(90)	(43)	(30)	(41)
Adjusted interest expense, after taxes⁷	408)	338)	161)	112)	155)
Interest income	(228)	(197)	(117)	(40)	(55)
Investment income, before taxes	(228)	(197)	(117)	(40)	(55)
Tax expense (benefit) of investment income⁸	48)	41)	25)	8)	12)
Investment income, after taxes⁹	(180)	(156)	(92)	(32)	(43)
(Income) loss from discontinued operations, net of tax¹⁰	—)	—)	—)	(5)	(4)
Net income (loss) attributable to noncontrolling interest	172)	142)	134)	135)	125)
Net operating profit after taxes (NOPAT)	6,814)	6,386)	3,833)	3,800)	2,699)

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in allowance for expected credit losses.

³ Addition of increase (decrease) in cost reduction programs.

⁴ Addition of increase (decrease) in equity equivalents to net income, Linde plc.

⁵ 2024 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 782 × 4.17% = 33

⁶ 2024 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 517 × 21.00% = 108

⁷ Addition of after taxes interest expense to net income, Linde plc.

⁸ 2024 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 228 × 21.00% = 48

⁹ Elimination of after taxes investment income.

¹⁰ Elimination of discontinued operations.

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Item	Description	The company
NOPAT	Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income.	Linde plc NOPAT increased from 2022 to 2023 and from 2023 to 2024.

Linde plc, cash operating taxes calculation

US$ in millions

12 months ended:	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Provision for income taxes	2,002)	1,814)	1,434)	1,262)	847)
Less: Deferred income tax expense (benefit)	(142)	(84)	(383)	(254)	(368)
Add: Tax savings from interest expense	108)	90)	43)	30)	41)
Less: Tax imposed on investment income	48)	41)	25)	8)	12)
Cash operating taxes	2,205)	1,947)	1,835)	1,537)	1,245)

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

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Item	Description	The company
Cash operating taxes	Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction.	Linde plc cash operating taxes increased from 2022 to 2023 and from 2023 to 2024.

Linde plc, invested capital calculation (financing approach)

US$ in millions

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Short-term debt	4,223)	4,713)	4,117)	1,163)	3,251)
Current portion of long-term debt	2,057)	1,263)	1,599)	1,709)	751)
Current finance lease liabilities	54)	50)	42)	47)	38)
Long-term debt, excluding current portion	15,343)	13,397)	12,198)	11,335)	12,152)
Long-term finance lease liabilities	150)	143)	114)	129)	125)
Operating lease liability¹	782)	749)	721)	833)	906)
Total reported debt & leases	22,609)	20,315)	18,791)	15,216)	17,223)
Total Linde plc shareholders’ equity	38,092)	39,720)	40,028)	44,035)	47,317)
Net deferred tax (assets) liabilities²	5,231)	5,523)	5,656)	5,997)	6,436)
Allowance for expected credit losses³	421)	457)	405)	405)	471)
Cost reduction programs⁴	241)	214)	320)	453)	369)
Equity equivalents⁵	5,893)	6,194)	6,381)	6,855)	7,276)
Accumulated other comprehensive (income) loss, net of tax⁶	6,894)	5,805)	5,782)	5,048)	4,690)
Redeemable noncontrolling interests	13)	13)	13)	13)	13)
Noncontrolling interests	1,383)	1,362)	1,346)	1,393)	2,252)
Adjusted total Linde plc shareholders’ equity	52,275)	53,094)	53,550)	57,344)	61,548)
Invested capital	74,884)	73,409)	72,341)	72,560)	78,771)

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

¹ Addition of capitalized operating leases.

² Elimination of deferred taxes from assets and liabilities. See details »

³ Addition of allowance for doubtful accounts receivable.

⁴ Addition of cost reduction programs.

⁵ Addition of equity equivalents to total Linde plc shareholders’ equity.

⁶ Removal of accumulated other comprehensive income.

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Item	Description	The company
Invested capital	Capital is an approximation of the economic book value of all cash invested in going-concern business activities.	Linde plc invested capital increased from 2022 to 2023 and from 2023 to 2024.

Linde plc, cost of capital calculations

Dec 31, 2024

	Capital (fair value)¹	Weights					Cost of capital
Equity²	218,272)	218,272)	÷	239,715)	=	0.91	0.91	×	14.28%	=	13.00%
Debt and finance lease liabilities³	20,661)	20,661)	÷	239,715)	=	0.09	0.09	×	2.62% × (1 – 21.00%)	=	0.18%
Operating lease liability⁴	782)	782)	÷	239,715)	=	0.00	0.00	×	4.17% × (1 – 21.00%)	=	0.01%
Total:	239,715)					1.00					13.19%

Based on: 10-K (reporting date: 2024-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt and finance lease liabilities. See details »

⁴ Operating lease liability. See details »

Dec 31, 2023

	Capital (fair value)¹	Weights					Cost of capital
Equity²	217,287)	217,287)	÷	236,279)	=	0.92	0.92	×	14.28%	=	13.13%
Debt and finance lease liabilities³	18,243)	18,243)	÷	236,279)	=	0.08	0.08	×	2.67% × (1 – 21.00%)	=	0.16%
Operating lease liability⁴	749)	749)	÷	236,279)	=	0.00	0.00	×	4.19% × (1 – 21.00%)	=	0.01%
Total:	236,279)					1.00					13.30%

Based on: 10-K (reporting date: 2023-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt and finance lease liabilities. See details »

⁴ Operating lease liability. See details »

Dec 31, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	171,454)	171,454)	÷	188,442)	=	0.91	0.91	×	14.28%	=	12.99%
Debt and finance lease liabilities³	16,267)	16,267)	÷	188,442)	=	0.09	0.09	×	2.18% × (1 – 21.00%)	=	0.15%
Operating lease liability⁴	721)	721)	÷	188,442)	=	0.00	0.00	×	3.26% × (1 – 21.00%)	=	0.01%
Total:	188,442)					1.00					13.15%

Based on: 10-K (reporting date: 2022-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt and finance lease liabilities. See details »

⁴ Operating lease liability. See details »

Dec 31, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	148,891)	148,891)	÷	164,282)	=	0.91	0.91	×	14.28%	=	12.94%
Debt and finance lease liabilities³	14,558)	14,558)	÷	164,282)	=	0.09	0.09	×	1.48% × (1 – 21.00%)	=	0.10%
Operating lease liability⁴	833)	833)	÷	164,282)	=	0.01	0.01	×	2.91% × (1 – 21.00%)	=	0.01%
Total:	164,282)					1.00					13.05%

Based on: 10-K (reporting date: 2021-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt and finance lease liabilities. See details »

⁴ Operating lease liability. See details »

Dec 31, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	131,488)	131,488)	÷	149,419)	=	0.88	0.88	×	14.28%	=	12.56%
Debt and finance lease liabilities³	17,025)	17,025)	÷	149,419)	=	0.11	0.11	×	1.55% × (1 – 21.00%)	=	0.14%
Operating lease liability⁴	906)	906)	÷	149,419)	=	0.01	0.01	×	2.83% × (1 – 21.00%)	=	0.01%
Total:	149,419)					1.00					12.72%

Based on: 10-K (reporting date: 2020-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt and finance lease liabilities. See details »

⁴ Operating lease liability. See details »

Linde plc, economic spread ratio calculation, comparison to benchmarks

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Selected Financial Data (US$ in millions)
Economic profit¹	(3,062)	(3,379)	(5,678)	(5,672)	(7,317)
Invested capital²	74,884)	73,409)	72,341)	72,560)	78,771)
Performance Ratio
Economic spread ratio³	-4.09%	-4.60%	-7.85%	-7.82%	-9.29%
Benchmarks
Economic Spread Ratio, Competitors⁴
Sherwin-Williams Co.	2.19%	-0.10%	-0.49%	0.00%	-0.80%

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2024 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -3,062 ÷ 74,884 = -4.09%

⁴ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic spread ratio	The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital.	Linde plc economic spread ratio improved from 2022 to 2023 and from 2023 to 2024.

Linde plc, economic profit margin calculation, comparison to benchmarks

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Selected Financial Data (US$ in millions)
Economic profit¹	(3,062)	(3,379)	(5,678)	(5,672)	(7,317)
Sales	33,005)	32,854)	33,364)	30,793)	27,243)
Performance Ratio
Economic profit margin²	-9.28%	-10.29%	-17.02%	-18.42%	-26.86%
Benchmarks
Economic Profit Margin, Competitors³
Sherwin-Williams Co.	1.58%	-0.07%	-0.38%	0.00%	-0.68%

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

¹ Economic profit. See details »

² 2024 Calculation
Economic profit margin = 100 × Economic profit ÷ Sales
= 100 × -3,062 ÷ 33,005 = -9.28%

³ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic profit margin	The ratio of economic profit to sales. It is the company profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin.	Linde plc economic profit margin improved from 2022 to 2023 and from 2023 to 2024.

Linde plc (NASDAQ:LIN)

Economic Value Added (EVA)

Economic Profit

Net Operating Profit after Taxes (NOPAT)

Cash Operating Taxes

Invested Capital

Cost of Capital

Economic Spread Ratio

Economic Profit Margin