Analysis of Debt
Total Debt (Carrying Amount)
Linde plc, balance sheet: debt
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 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).
Total debt and finance lease liabilities, measured at carrying amount, exhibited a consistent upward trend over the five-year period. The composition of this debt shifted notably, with a significant increase in long-term obligations. A detailed examination of the components reveals specific patterns within short-term and long-term debt categories.
- Short-Term Debt
- Short-term debt experienced a substantial increase from US$1,163 million in 2021 to US$4,117 million in 2022. While it decreased to US$4,223 million in 2024, it remained considerably higher than the 2021 level, concluding the period at US$4,510 million in 2025. This volatility suggests active management of short-term financing needs or potentially changes in working capital requirements.
- Current Portion of Long-Term Debt
- The current portion of long-term debt decreased from US$1,709 million in 2021 to US$1,263 million in 2023, before increasing to US$2,057 million in 2024 and settling at US$1,796 million in 2025. This fluctuation indicates adjustments in the company’s long-term debt maturity schedule and refinancing activities.
- Finance Lease Liabilities
- Both current and long-term finance lease liabilities demonstrated a gradual increase throughout the period. Current finance lease liabilities rose from US$47 million in 2021 to US$62 million in 2025, while long-term finance lease liabilities increased from US$129 million to US$152 million. These increases, though modest in comparison to overall debt, suggest a growing reliance on lease financing.
- Long-Term Debt (Excluding Current Portion)
- Long-term debt, excluding the current portion, showed a consistent and substantial increase, rising from US$11,335 million in 2021 to US$20,683 million in 2025. This represents the most significant driver of the overall increase in total debt, indicating a strategic decision to fund operations or expansion through long-term borrowing.
- Total Debt Trend
- The aggregate effect of these components resulted in total debt and finance lease liabilities increasing from US$14,383 million in 2021 to US$27,203 million in 2025, representing an approximately 89% increase over the five-year period. The most pronounced increase occurred between 2024 and 2025, suggesting accelerated debt accumulation during that timeframe.
The observed trends suggest a deliberate strategy of increasing leverage, particularly through long-term debt. Further investigation into the uses of these funds and associated financial covenants would be necessary to fully assess the implications of this debt profile.
Total Debt (Fair Value)
| Dec 31, 2025 | |
|---|---|
| Selected Financial Data (US$ in millions) | |
| Short-term debt | 4,510) |
| Long-term debt, including current portion | 21,064) |
| Finance lease liabilities | 214) |
| Total debt and finance lease liabilities (fair value) | 25,788) |
| Financial Ratio | |
| Debt, fair value to carrying amount ratio | 0.95 |
Based on: 10-K (reporting date: 2025-12-31).
Weighted-average Interest Rate on Debt
Weighted-average interest rate on debt and finance lease liabilities: 2.42%
| Interest rate | Debt amount1 | Interest rate × Debt amount | Weighted-average interest rate2 |
|---|---|---|---|
| 3.00% | 4,510) | 135) | |
| 0.00% | 822) | —) | |
| 3.20% | 725) | 23) | |
| 3.43% | 200) | 7) | |
| 1.65% | 95) | 2) | |
| 0.25% | 880) | 2) | |
| 1.00% | 589) | 6) | |
| 2.27% | 705) | 16) | |
| 1.00% | 854) | 9) | |
| 3.00% | 820) | 25) | |
| 3.38% | 878) | 30) | |
| 2.63% | 994) | 26) | |
| 0.62% | 283) | 2) | |
| 1.10% | 698) | 8) | |
| 1.90% | 120) | 2) | |
| 3.38% | 877) | 30) | |
| 1.38% | 884) | 12) | |
| 3.20% | 997) | 32) | |
| 0.55% | 877) | 5) | |
| 3.13% | 759) | 24) | |
| 0.38% | 582) | 2) | |
| 3.00% | 877) | 26) | |
| 1.06% | 346) | 4) | |
| 3.62% | 760) | 28) | |
| 3.50% | 874) | 31) | |
| 1.63% | 934) | 15) | |
| 3.40% | 816) | 28) | |
| 3.25% | 756) | 25) | |
| 3.75% | 582) | 22) | |
| 3.55% | 666) | 24) | |
| 3.75% | 810) | 30) | |
| 2.00% | 297) | 6) | |
| 1.00% | 805) | 8) | |
| 3.86% | 214) | 8) | |
| Total | 26,886) | 650) | |
| 2.42% | |||
Based on: 10-K (reporting date: 2025-12-31).
1 US$ in millions
2 Weighted-average interest rate = 100 × 650 ÷ 26,886 = 2.42%
Interest Costs Incurred
Linde plc, interest costs incurred
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 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).
Interest expense exhibited a notable increasing trend over the observed period. While initially relatively stable, interest incurred on debt demonstrated significant growth, particularly between 2021 and 2023. Interest capitalization also increased, though at a more moderate pace, before experiencing a more substantial rise in the final year presented.
- Overall Interest Expense
- Interest expense increased from US$117 million in 2021 to US$180 million in 2022, representing a 53.8% increase. This growth continued, reaching US$397 million in 2023, before further increasing to US$484 million in 2024. A slight decrease was observed in 2025, with interest expense reported at US$464 million.
- Interest Capitalization
- Interest capitalization showed a consistent, albeit gradual, increase from US$57 million in 2021 to US$67 million in 2023. The rate of increase accelerated in 2025, reaching US$111 million, suggesting a potential shift in capital expenditure or accounting practices related to qualifying assets.
- Interest Incurred on Debt
- Interest incurred on debt mirrored the trend of overall interest expense, rising from US$174 million in 2021 to US$242 million in 2022, a 39.1% increase. The most substantial increase occurred between 2022 and 2023, reaching US$464 million. Further increases were observed in 2024 (US$552 million) and 2025 (US$575 million), though the rate of growth slowed in these later years.
The consistent rise in interest incurred on debt, coupled with increasing interest capitalization, suggests a growing level of debt financing or a change in the composition of debt. The slight decrease in overall interest expense in 2025, despite continued growth in interest incurred on debt, could be attributable to various factors, including debt refinancing at more favorable rates or changes in the overall debt structure.
Adjusted Interest Coverage Ratio
Based on: 10-K (reporting date: 2025-12-31), 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).
2025 Calculations
1 Interest coverage ratio (without capitalized interest) = EBIT ÷ Interest expense
= 9,511 ÷ 464 = 20.50
2 Adjusted interest coverage ratio (with capitalized interest) = EBIT ÷ Interest incurred on debt
= 9,511 ÷ 575 = 16.54
The interest coverage ratios demonstrate a declining trend over the five-year period. Both the standard interest coverage ratio and the adjusted interest coverage ratio, which incorporates capitalized interest, exhibit decreases from 2021 to 2023, followed by a stabilization and slight recovery in the later years.
- Interest Coverage Ratio (without capitalized interest)
- The interest coverage ratio, excluding capitalized interest, decreased significantly from 45.60 in 2021 to 21.54 in 2023, representing a substantial reduction in the company’s ability to cover its interest expense with earnings before interest and taxes. A modest increase is then observed, rising to 19.06 in 2024 and 20.50 in 2025, indicating a potential stabilization, though remaining below the 2021 level.
- Adjusted Interest Coverage Ratio (with capitalized interest)
- The adjusted interest coverage ratio, which includes the effect of capitalized interest, follows a similar pattern. It declined from 30.66 in 2021 to 18.43 in 2023. Like the standard ratio, it shows a slight recovery in 2024 to 16.71 and further to 16.54 in 2025. The adjusted ratio consistently reports a lower coverage level than the ratio excluding capitalized interest, as expected.
- Overall Trend
- The consistent decline in both ratios from 2021 to 2023 suggests a weakening in the company’s capacity to meet its interest obligations from operating income. The subsequent stabilization in 2024 and 2025 indicates that the decline may have been arrested, but the ratios remain considerably lower than their 2021 values. This suggests a potential increase in financial risk during the period, followed by a period of relative stability at a lower coverage level.
The convergence of both ratios suggests that the impact of capitalized interest is a consistent factor and does not significantly alter the overall trend of decreasing coverage. Continued monitoring of these ratios is recommended to assess the sustainability of the recent stabilization.