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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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1-11037
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06-1249050
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(Commission File Number)
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(IRS Employer Identification No.)
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39 OLD RIDGEBURY ROAD, DANBURY, CT
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06810-5113
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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ý
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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Smaller reporting company
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¨
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INDEX
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PART I - FINANCIAL INFORMATION
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|
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Item 1.
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Consolidated Statements of Comprehensive Income - Praxair, Inc. and Subsidiaries Quarters Ended
March 31, 2016 and 2015 (Unaudited)
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Consolidated Balance Sheets - Praxair, Inc. and Subsidiaries
March 31, 2016 and December 31, 2015 (Unaudited)
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Consolidated Statements of Cash Flows - Praxair, Inc. and Subsidiaries
Three Months Ended March 31, 2016 and 2015 (Unaudited)
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|
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Item 2.
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||
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Item 3.
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||
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Item 4.
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Item 1.
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||
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Item 1A.
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||
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Item 2.
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||
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Item 3.
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||
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Item 4.
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||
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Item 5.
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||
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Item 6.
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||
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Quarter Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
SALES
|
$
|
2,509
|
|
|
$
|
2,757
|
|
Cost of sales, exclusive of depreciation and amortization
|
1,381
|
|
|
1,530
|
|
||
Selling, general and administrative
|
274
|
|
|
299
|
|
||
Depreciation and amortization
|
272
|
|
|
277
|
|
||
Research and development
|
23
|
|
|
24
|
|
||
Other income (expense) - net
|
(5
|
)
|
|
(4
|
)
|
||
OPERATING PROFIT
|
554
|
|
|
623
|
|
||
Interest expense - net
|
65
|
|
|
44
|
|
||
INCOME BEFORE INCOME TAXES AND EQUITY INVESTMENTS
|
489
|
|
|
579
|
|
||
Income taxes
|
133
|
|
|
162
|
|
||
INCOME BEFORE EQUITY INVESTMENTS
|
356
|
|
|
417
|
|
||
Income from equity investments
|
10
|
|
|
11
|
|
||
NET INCOME (INCLUDING NONCONTROLLING INTERESTS)
|
366
|
|
|
428
|
|
||
Less: noncontrolling interests
|
(10
|
)
|
|
(12
|
)
|
||
NET INCOME - PRAXAIR, INC.
|
$
|
356
|
|
|
$
|
416
|
|
PER SHARE DATA - PRAXAIR, INC. SHAREHOLDERS
|
|
|
|
||||
Basic earnings per share
|
$
|
1.25
|
|
|
$
|
1.44
|
|
Diluted earnings per share
|
$
|
1.24
|
|
|
$
|
1.43
|
|
Cash dividends per share
|
$
|
0.75
|
|
|
$
|
0.715
|
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WEIGHTED AVERAGE SHARES OUTSTANDING (000’s):
|
|
|
|
||||
Basic shares outstanding
|
285,429
|
|
|
289,143
|
|
||
Diluted shares outstanding
|
286,665
|
|
|
291,652
|
|
|
Quarter Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
NET INCOME (INCLUDING NONCONTROLLING INTERESTS)
|
$
|
366
|
|
|
$
|
428
|
|
|
|
|
|
||||
OTHER COMPREHENSIVE INCOME (LOSS)
|
|
|
|
||||
Translation adjustments:
|
|
|
|
||||
Foreign currency translation adjustments
|
342
|
|
|
(644
|
)
|
||
Income taxes
|
16
|
|
|
(34
|
)
|
||
Translation adjustments
|
358
|
|
|
(678
|
)
|
||
Funded status - retirement obligations (Note 11):
|
|
|
|
||||
Retirement program remeasurements
|
(5
|
)
|
|
9
|
|
||
Reclassifications to net income
|
14
|
|
|
19
|
|
||
Income taxes
|
(5
|
)
|
|
(10
|
)
|
||
Funded status - retirement obligations
|
4
|
|
|
18
|
|
||
Derivative instruments (Note 6):
|
|
|
|
||||
Current quarter unrealized gain (loss)
|
—
|
|
|
—
|
|
||
Reclassifications to net income
|
—
|
|
|
—
|
|
||
Income taxes
|
—
|
|
|
—
|
|
||
Derivative instruments
|
—
|
|
|
—
|
|
||
TOTAL OTHER COMPREHENSIVE INCOME (LOSS)
|
362
|
|
|
(660
|
)
|
||
|
|
|
|
||||
COMPREHENSIVE INCOME (LOSS) (INCLUDING NONCONTROLLING INTERESTS)
|
728
|
|
|
(232
|
)
|
||
Less: noncontrolling interests
|
(26
|
)
|
|
18
|
|
||
COMPREHENSIVE INCOME (LOSS) - PRAXAIR, INC.
|
$
|
702
|
|
|
$
|
(214
|
)
|
|
March 31, 2016
|
|
December 31, 2015
|
||||
ASSETS
|
|
|
|
||||
Cash and cash equivalents
|
$
|
221
|
|
|
$
|
147
|
|
Accounts receivable - net
|
1,685
|
|
|
1,601
|
|
||
Inventories
|
553
|
|
|
531
|
|
||
Prepaid and other current assets
|
411
|
|
|
347
|
|
||
TOTAL CURRENT ASSETS
|
2,870
|
|
|
2,626
|
|
||
Property, plant and equipment (less accumulated depreciation of $12,189 in 2016 and $11,696 in 2015)
|
11,314
|
|
|
10,998
|
|
||
Goodwill
|
3,071
|
|
|
2,986
|
|
||
Other intangible assets - net
|
576
|
|
|
568
|
|
||
Other long-term assets
|
1,194
|
|
|
1,141
|
|
||
TOTAL ASSETS
|
$
|
19,025
|
|
|
$
|
18,319
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Accounts payable
|
$
|
796
|
|
|
$
|
791
|
|
Short-term debt
|
174
|
|
|
250
|
|
||
Current portion of long-term debt
|
8
|
|
|
6
|
|
||
Other current liabilities
|
821
|
|
|
846
|
|
||
TOTAL CURRENT LIABILITIES
|
1,799
|
|
|
1,893
|
|
||
Long-term debt
|
9,222
|
|
|
8,975
|
|
||
Other long-term liabilities
|
2,580
|
|
|
2,545
|
|
||
TOTAL LIABILITIES
|
13,601
|
|
|
13,413
|
|
||
Commitments and contingencies (Note 12)
|
|
|
|
||||
Redeemable noncontrolling interests (Note 14)
|
119
|
|
|
113
|
|
||
Praxair, Inc. Shareholders’ Equity:
|
|
|
|
||||
Common stock $0.01 par value, authorized - 800,000,000 shares, issued 2016 and 2015 - 383,230,625 shares
|
4
|
|
|
4
|
|
||
Additional paid-in capital
|
3,998
|
|
|
4,005
|
|
||
Retained earnings
|
12,371
|
|
|
12,229
|
|
||
Accumulated other comprehensive income (loss) (Note 14)
|
(4,250
|
)
|
|
(4,596
|
)
|
||
Less: Treasury stock, at cost (2016 - 97,965,723 shares and 2015 - 98,351,546 shares)
|
(7,235
|
)
|
|
(7,253
|
)
|
||
Total Praxair, Inc. Shareholders’ Equity
|
4,888
|
|
|
4,389
|
|
||
Noncontrolling interests
|
417
|
|
|
404
|
|
||
TOTAL EQUITY
|
5,305
|
|
|
4,793
|
|
||
TOTAL LIABILITIES AND EQUITY
|
$
|
19,025
|
|
|
$
|
18,319
|
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
OPERATIONS
|
|
|
|
||||
Net income - Praxair, Inc.
|
$
|
356
|
|
|
$
|
416
|
|
Noncontrolling interests
|
10
|
|
|
12
|
|
||
Net income (including noncontrolling interests)
|
366
|
|
|
428
|
|
||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
272
|
|
|
277
|
|
||
Deferred income taxes
|
9
|
|
|
14
|
|
||
Share-based compensation
|
8
|
|
|
7
|
|
||
Working capital:
|
|
|
|
||||
Accounts receivable
|
(20
|
)
|
|
(50
|
)
|
||
Inventory
|
(7
|
)
|
|
(6
|
)
|
||
Prepaid and other current assets
|
1
|
|
|
2
|
|
||
Payables and accruals
|
(77
|
)
|
|
(66
|
)
|
||
Pension contributions
|
(2
|
)
|
|
(11
|
)
|
||
Long-term assets, liabilities and other
|
(3
|
)
|
|
(87
|
)
|
||
Net cash provided by operating activities
|
547
|
|
|
508
|
|
||
INVESTING
|
|
|
|
||||
Capital expenditures
|
(323
|
)
|
|
(397
|
)
|
||
Acquisitions, net of cash acquired
|
(63
|
)
|
|
(5
|
)
|
||
Divestitures and asset sales
|
2
|
|
|
2
|
|
||
Net cash used for investing activities
|
(384
|
)
|
|
(400
|
)
|
||
FINANCING
|
|
|
|
||||
Short-term debt borrowings (repayments) - net
|
(77
|
)
|
|
38
|
|
||
Long-term debt borrowings
|
898
|
|
|
753
|
|
||
Long-term debt repayments
|
(726
|
)
|
|
(501
|
)
|
||
Issuances of common stock
|
34
|
|
|
44
|
|
||
Purchases of common stock
|
(32
|
)
|
|
(235
|
)
|
||
Cash dividends - Praxair, Inc. shareholders
|
(214
|
)
|
|
(207
|
)
|
||
Excess tax benefit on share-based compensation
|
6
|
|
|
14
|
|
||
Noncontrolling interest transactions and other
|
(2
|
)
|
|
(6
|
)
|
||
Net cash (used for) provided by financing activities
|
(113
|
)
|
|
(100
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
24
|
|
|
(17
|
)
|
||
Change in cash and cash equivalents
|
74
|
|
|
(9
|
)
|
||
Cash and cash equivalents, beginning-of-period
|
147
|
|
|
126
|
|
||
Cash and cash equivalents, end-of-period
|
$
|
221
|
|
|
$
|
117
|
|
•
|
Accounting for Share-based Compensation
- In June 2014, the FASB issued updated guidance on the accounting for share-based payments when the terms of an award provide that a performance target could be achieved after the requisite service period. The adoption of this guidance did not have a significant impact on the condensed consolidated financial statements.
|
•
|
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 would require 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 (with early adoption beginning in 2017 optional) and includes several transition options. Praxair is currently in the process of reviewing the new guidance and will provide updates on the expected impact to Praxair in future filings, as determined.
|
•
|
Simplifying the Measurement of Inventory
– In July 2015, the FASB issued updated guidance on the measurement of inventory. The new guidance requires that inventory be measured at the lower of cost or net realizable value. Currently inventory is measured at the lower of cost or market. This new guidance will be effective for Praxair beginning in the first quarter 2017 on a prospective basis, with early adoption optional. Praxair does not expect this requirement to have a material impact.
|
•
|
Balance Sheet Classification of Deferred Taxes
- In November 2015, the FASB issued updated guidance on the balance sheet classification of deferred taxes. Currently deferred income tax liabilities and assets are required to be separated and classified as current or non-current in a classified balance sheet. The amendments in this update require that deferred tax liabilities and assets be classified as non-current in a classified balance sheet. This new guidance will be effective for Praxair beginning in the first quarter 2017, with early adoption optional. The new guidance may be applied either prospectively or retrospectively. Praxair does not expect this requirement to have a material impact.
|
•
|
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 for Praxair beginning in the first quarter 2019, with early adoption optional, and requires companies to transition using a modified retrospective approach. Praxair is in the early stages of reviewing the new guidance and will provide updates on the expected impact to Praxair in future filings, as determined.
|
•
|
Improvements to Employee Share-Based Payment Accounting
– In March 2016, the FASB issued updated guidance on the accounting for employee share-based payments. The new guidance requires that all excess tax benefits and deficiencies associated with share-based payment awards be recorded through the statement of income in the period in which they occur, and within operating cash flows in the statement of cash flows. Currently such excess tax benefits are recorded as direct credits to equity (not via the statement of income) and within financing cash flows. The new update also provides guidance relating to the accounting for forfeitures, statutory tax withholding requirements, and earnings per share calculations. This guidance will be effective for Praxair beginning in the first quarter 2017, with early adoption optional. We are currently evaluating the impact of this guidance on our financial statements and the timing of adoption.
|
(millions of dollars)
|
Severance costs
|
|
Other Charges
|
|
Total
|
||||||
Balance, January 1, 2016
|
$
|
30
|
|
|
$
|
20
|
|
|
$
|
50
|
|
Less: Cash payments
|
(11
|
)
|
|
(2
|
)
|
|
(13
|
)
|
|||
Less: Non-cash asset write-offs
|
—
|
|
|
—
|
|
|
—
|
|
|||
Foreign currency translation
|
1
|
|
|
—
|
|
|
1
|
|
|||
Balance, March 31, 2016
|
$
|
20
|
|
|
$
|
18
|
|
|
$
|
38
|
|
(Millions of dollars)
|
March 31,
2016 |
|
December 31,
2015 |
||||
Inventories
|
|
|
|
||||
Raw materials and supplies
|
$
|
204
|
|
|
$
|
202
|
|
Work in process
|
49
|
|
|
48
|
|
||
Finished goods
|
300
|
|
|
281
|
|
||
Total inventories
|
$
|
553
|
|
|
$
|
531
|
|
(Millions of dollars)
|
March 31,
2016 |
|
December 31,
2015 |
||||
SHORT-TERM
|
|
|
|
||||
Commercial paper and U.S. bank borrowings
|
$
|
6
|
|
|
$
|
87
|
|
Other bank borrowings (primarily international)
|
168
|
|
|
163
|
|
||
Total short-term debt
|
174
|
|
|
250
|
|
||
LONG-TERM (a)
|
|
|
|
||||
U.S. borrowings (U.S. dollar denominated unless otherwise noted)
|
|
|
|
||||
0.75% Notes due 2016 (b)
|
—
|
|
|
400
|
|
||
5.20% Notes due 2017 (b)
|
—
|
|
|
325
|
|
||
Floating Rate Notes due 2017 (c)
|
150
|
|
|
150
|
|
||
1.05% Notes due 2017
|
399
|
|
|
399
|
|
||
1.20% Notes due 2018
|
499
|
|
|
499
|
|
||
1.25% Notes due 2018 (d)
|
485
|
|
|
480
|
|
||
4.50% Notes due 2019
|
597
|
|
|
597
|
|
||
1.90% Notes due 2019
|
499
|
|
|
499
|
|
||
1.50% Euro-denominated notes due 2020
|
677
|
|
|
646
|
|
||
2.25% Notes due 2020
|
298
|
|
|
298
|
|
||
4.05% Notes due 2021
|
497
|
|
|
497
|
|
||
3.00% Notes due 2021
|
496
|
|
|
496
|
|
||
2.45% Notes due 2022
|
597
|
|
|
596
|
|
||
2.20% Notes due 2022
|
498
|
|
|
497
|
|
||
2.70% Notes due 2023
|
497
|
|
|
497
|
|
||
1.20% Euro-denominated notes due 2024 (e)
|
622
|
|
|
—
|
|
||
2.65% Notes due 2025
|
397
|
|
|
396
|
|
||
1.625% Euro-denominated notes due 2025
|
561
|
|
|
535
|
|
||
3.20% Notes due 2026 (e)
|
725
|
|
|
446
|
|
||
3.55% Notes due 2042
|
661
|
|
|
661
|
|
||
Other
|
2
|
|
|
3
|
|
||
International bank borrowings
|
65
|
|
|
57
|
|
||
Obligations under capital leases
|
8
|
|
|
7
|
|
||
|
9,230
|
|
|
8,981
|
|
||
Less: current portion of long-term debt
|
(8
|
)
|
|
(6
|
)
|
||
Total long-term debt
|
9,222
|
|
|
8,975
|
|
||
Total debt
|
$
|
9,404
|
|
|
$
|
9,231
|
|
(a)
|
Amounts are net of unamortized discounts, premiums and/or debt issuance costs as applicable.
|
(b)
|
In February 2016, Praxair repaid
$400 million
of
0.75%
notes that became due. Also in February 2016, Praxair redeemed
$325 million
of
5.20%
notes due March 2017 resulting in a
$16 million
interest charge (
$10 million
after-tax, or
$0.04
per diluted share).
|
(c)
|
Classified as long-term because of the company’s intent to refinance this debt on a long-term basis and the availability of such financing under the terms of an existing
$2.5 billion
long-term credit facility.
|
(d)
|
March 31, 2016
and
December 31, 2015
include a
$11 million
and
$6 million
fair value increase, respectively, related to hedge accounting. See Note 6 for additional information.
|
(e)
|
In February 2016, Praxair issued
€550 million
of
1.20%
Euro-denominated notes due
2024
. In addition, Praxair issued
$275 million
of
3.20%
notes due
2026
. The proceeds of these debt issuances were used for general corporate purposes, including acquisitions, repayment of debt and share repurchases under the company's share repurchase program.
|
|
|
|
|
|
Fair Value
|
||||||||||||||||||
|
Notional Amounts
|
|
Assets
|
|
Liabilities
|
||||||||||||||||||
(Millions of dollars)
|
March 31,
2016 |
|
December 31,
2015 |
|
March 31,
2016 |
|
December 31,
2015 |
|
March 31,
2016 |
|
December 31,
2015 |
||||||||||||
Derivatives Not Designated as Hedging Instruments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Currency contracts:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance sheet items (a)
|
$
|
2,573
|
|
|
$
|
2,548
|
|
|
$
|
76
|
|
|
$
|
15
|
|
|
$
|
11
|
|
|
$
|
11
|
|
Derivatives Designated as Hedging Instruments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Currency contracts:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance sheet items (a)
|
$
|
38
|
|
|
$
|
38
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest rate contracts:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate swaps (b)
|
475
|
|
|
475
|
|
|
11
|
|
|
6
|
|
|
—
|
|
|
—
|
|
||||||
Total Hedges
|
$
|
513
|
|
|
$
|
513
|
|
|
$
|
11
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total Derivatives
|
$
|
3,086
|
|
|
$
|
3,061
|
|
|
$
|
87
|
|
|
$
|
22
|
|
|
$
|
11
|
|
|
$
|
11
|
|
(a)
|
Assets are recorded in prepaid and other current assets, and liabilities are recorded in other current liabilities.
|
(b)
|
Assets are recorded in other long term assets
|
|
Year
Terminated
|
|
Original
Gain /
(Loss)
|
|
Unrecognized Gain / (Loss) (a)
|
||||||||
(Millions of dollars)
|
March 31,
2016 |
|
December 31,
2015 |
||||||||||
Treasury Rate Locks
|
|
|
|
|
|
|
|
||||||
Underlying debt instrument:
|
|
|
|
|
|
|
|
||||||
$500 million 2.20% fixed-rate notes that mature in 2022 (b)
|
2012
|
|
$
|
(2
|
)
|
|
$
|
(1
|
)
|
|
$
|
(1
|
)
|
$500 million 3.00% fixed-rate notes that mature in 2021 (b)
|
2011
|
|
(11
|
)
|
|
(6
|
)
|
|
(6
|
)
|
|||
$600 million 4.50% fixed-rate notes that mature in 2019 (b)
|
2009
|
|
16
|
|
|
6
|
|
|
6
|
|
|||
Total - pre-tax
|
|
|
|
|
$
|
(1
|
)
|
|
$
|
(1
|
)
|
||
Less: income taxes
|
|
|
|
|
—
|
|
|
—
|
|
||||
After- tax amounts
|
|
|
|
|
$
|
(1
|
)
|
|
$
|
(1
|
)
|
(a)
|
The unrecognized gains / (losses) for the treasury rate locks are shown in accumulated other comprehensive income (“AOCI”) and are being recognized on a straight line basis to interest expense – net over the term of the underlying debt agreements. Refer to the table below summarizing the impact on the company’s consolidated statements of income and AOCI for current period gain (loss) recognition.
|
(b)
|
The notional amount of the treasury rate lock contracts are equal to the underlying debt instrument with the exception of the treasury rate lock contract entered into to hedge the
$600 million
4.50%
fixed-rate notes that mature in 2019. The notional amount of this contract was
$500 million
.
|
|
Amount of Pre-Tax Gain (Loss)
Recognized in Earnings *
|
||||||
|
Quarter Ended March 31,
|
||||||
(Millions of dollars)
|
2016
|
|
2015
|
||||
Derivatives Not Designated as Hedging Instruments
|
|
|
|
||||
Currency contracts:
|
|
|
|
||||
Balance sheet items
|
|
|
|
||||
Debt-related
|
$
|
67
|
|
|
$
|
(79
|
)
|
Other balance sheet items
|
2
|
|
|
(6
|
)
|
||
Total
|
$
|
69
|
|
|
$
|
(85
|
)
|
|
Quarter Ended
|
||||||||||||||
|
Amount of Gain (Loss)
Recognized in AOCI
|
|
Amount of Gain (Loss)
Reclassified from AOCI to the Consolidated Statement of
Income
|
||||||||||||
(Millions of dollars)
|
March 31,
2016 |
|
March 31,
2015 |
|
March 31,
2016 |
|
March 31,
2015 |
||||||||
Currency contracts:
|
|
|
|
|
|
|
|
||||||||
Balance sheet items
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Net Investment Hedge
|
$
|
(4
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest rate contracts:
|
|
|
|
|
|
|
|
||||||||
Treasury rate lock contracts
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total - pre tax
|
$
|
(4
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Less: income taxes
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total - Net of Taxes
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Fair Value Measurements Using
|
||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||||
(Millions of dollars)
|
March 31,
2016 |
|
December 31,
2015 |
|
March 31,
2016 |
|
December 31,
2015 |
|
March 31,
2016 |
|
December 31,
2015 |
||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivatives
|
—
|
|
|
—
|
|
|
$
|
87
|
|
|
$
|
22
|
|
|
—
|
|
|
—
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivatives
|
—
|
|
|
—
|
|
|
$
|
11
|
|
|
$
|
11
|
|
|
—
|
|
|
—
|
|
|
Quarter Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
Numerator (Millions of dollars)
|
|
|
|
||||
Net income - Praxair, Inc.
|
$
|
356
|
|
|
$
|
416
|
|
Denominator (Thousands of shares)
|
|
|
|
||||
Weighted average shares outstanding
|
285,049
|
|
|
288,748
|
|
||
Shares earned and issuable under compensation plans
|
380
|
|
|
395
|
|
||
Weighted average shares used in basic earnings per share
|
285,429
|
|
|
289,143
|
|
||
Effect of dilutive securities
|
|
|
|
||||
Stock options and awards
|
1,236
|
|
|
2,509
|
|
||
Weighted average shares used in diluted earnings per share
|
286,665
|
|
|
291,652
|
|
||
Basic Earnings Per Share
|
$
|
1.25
|
|
|
$
|
1.44
|
|
Diluted Earnings Per Share
|
$
|
1.24
|
|
|
$
|
1.43
|
|
(Millions of dollars)
|
North
America
|
|
South
America
|
|
Europe
|
|
Asia
|
|
Surface
Technologies
|
|
Total
|
||||||||||||
Balance, December 31, 2015
|
$
|
2,111
|
|
|
$
|
98
|
|
|
$
|
582
|
|
|
$
|
59
|
|
|
$
|
136
|
|
|
$
|
2,986
|
|
Acquisitions (Note 3)
|
34
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
34
|
|
||||||
Purchase adjustments & other
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||||
Foreign currency translation
|
7
|
|
|
12
|
|
|
25
|
|
|
1
|
|
|
2
|
|
|
47
|
|
||||||
Balance, March 31, 2016
|
$
|
2,156
|
|
|
$
|
110
|
|
|
$
|
607
|
|
|
$
|
60
|
|
|
$
|
138
|
|
|
$
|
3,071
|
|
(Millions of dollars)
|
Customer &
License/Use
Agreements
|
|
Non-compete
Agreements
|
|
Patents &
Other
|
|
Total
|
||||||||
Cost:
|
|
|
|
|
|
|
|
||||||||
Balance, December 31, 2015
|
$
|
698
|
|
|
$
|
38
|
|
|
$
|
47
|
|
|
$
|
783
|
|
Additions (Note 3)
|
9
|
|
|
2
|
|
|
4
|
|
|
15
|
|
||||
Foreign currency translation
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
||||
Other
|
2
|
|
|
(7
|
)
|
|
—
|
|
|
(5
|
)
|
||||
Balance, March 31, 2016
|
$
|
714
|
|
|
$
|
33
|
|
|
$
|
51
|
|
|
$
|
798
|
|
Less: Accumulated amortization
|
|
|
|
|
|
|
|
||||||||
Balance, December 31, 2015
|
$
|
(179
|
)
|
|
$
|
(23
|
)
|
|
$
|
(13
|
)
|
|
$
|
(215
|
)
|
Amortization expense
|
(10
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(12
|
)
|
||||
Foreign currency translation
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||
Other
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
||||
Balance, March 31, 2016
|
$
|
(191
|
)
|
|
$
|
(17
|
)
|
|
$
|
(14
|
)
|
|
$
|
(222
|
)
|
Net balance at March 31, 2016
|
$
|
523
|
|
|
$
|
16
|
|
|
$
|
37
|
|
|
$
|
576
|
|
|
Three Months Ended March 31,
|
||||
|
2016
|
|
2015
|
||
Dividend yield
|
2.9
|
%
|
|
2.2
|
%
|
Volatility
|
14.4
|
%
|
|
13.5
|
%
|
Risk-free interest rate
|
1.41
|
%
|
|
1.51
|
%
|
Expected term years
|
6
|
|
|
5
|
|
|
Number of
Options (000’s)
|
|
Average
Exercise Price
|
|
Average
Remaining
Life
|
|
Aggregate
Intrinsic
Value
|
|||||
Outstanding at January 1, 2016
|
11,273
|
|
|
$
|
96.58
|
|
|
|
|
|
||
Granted
|
2,468
|
|
|
102.22
|
|
|
|
|
|
|||
Exercised
|
(509
|
)
|
|
60.50
|
|
|
|
|
|
|||
Cancelled or Expired
|
(52
|
)
|
|
105.04
|
|
|
|
|
|
|||
Outstanding at March 31, 2016
|
13,180
|
|
|
98.96
|
|
|
6.0
|
|
$
|
242
|
|
|
Exercisable at March 31, 2016
|
9,344
|
|
|
$
|
93.75
|
|
|
4.5
|
|
$
|
212
|
|
|
Performance-Based
|
|
Restricted Stock
|
||||||||||
|
Number of
Shares
(000’s)
|
|
Average
Grant Date
Fair Value
|
|
Number of
Shares
(000’s)
|
|
Average
Grant Date
Fair Value
|
||||||
Non-vested at January 1, 2016
|
802
|
|
|
$
|
114.41
|
|
|
286
|
|
|
$
|
112.48
|
|
Granted
|
241
|
|
|
105.34
|
|
|
76
|
|
|
93.50
|
|
||
Vested
|
(106
|
)
|
|
103.46
|
|
|
(80
|
)
|
|
103.92
|
|
||
Cancelled and Forfeited*
|
(195
|
)
|
|
103.70
|
|
|
(2
|
)
|
|
114.53
|
|
||
Non-vested at March 31, 2016
|
742
|
|
|
$
|
115.76
|
|
|
280
|
|
|
$
|
109.76
|
|
|
Quarter Ended March 31,
|
||||||||||||||
|
Pensions
|
|
OPEB
|
||||||||||||
(Millions of dollars)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Service cost
|
$
|
12
|
|
|
$
|
14
|
|
|
$
|
1
|
|
|
$
|
1
|
|
Interest cost
|
24
|
|
|
28
|
|
|
1
|
|
|
2
|
|
||||
Expected return on plan assets
|
(39
|
)
|
|
(39
|
)
|
|
—
|
|
|
—
|
|
||||
Net amortization and deferral
|
15
|
|
|
20
|
|
|
(1
|
)
|
|
(1
|
)
|
||||
Net periodic benefit cost before pension settlement charge
|
$
|
12
|
|
|
$
|
23
|
|
|
$
|
1
|
|
|
$
|
2
|
|
•
|
During May 2009, the Brazilian government published Law 11941/2009 instituting a new voluntary amnesty program (“Refis Program”) which allowed Brazilian companies to settle certain federal tax disputes at reduced amounts. During the 2009 third quarter, Praxair decided that it was economically beneficial to settle many of its outstanding federal tax disputes and such disputes were enrolled in the Refis Program, subject to final calculation and review by the Brazilian federal government. The Company recorded estimated liabilities based on the terms of the Refis Program. Since 2009, Praxair has been unable to reach final agreement on the calculations and recently 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. Although it is difficult to estimate the timing of resolution of legal matters in Brazil, it is possible that individual disputed matters may be resolved during the next year.
|
•
|
At
March 31, 2016
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 that should be applied to income generated by a subsidiary company. The total estimated exposure relating to such claims, including interest and penalties, as appropriate, is approximately
$190 million
. Praxair has not recorded any liabilities related to such claims based on management judgments, after considering judgments and opinions of outside counsel. Because litigation in Brazil historically takes many years to resolve, it is very difficult to estimate the timing of resolution of these matters; however, it is possible that certain of these matters may be 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 five industrial gas companies in Brazil and imposed fines on all five companies. Originally, CADE imposed a civil fine of
R$2.2 billion
Brazilian reais (
US$618 million
) against White Martins, the Brazil-based subsidiary of Praxair, Inc. In response to a motion for clarification, the fine was reduced to
R$1.7 billion
Brazilian reais (
US$478 million
) due to a calculation error made by CADE. The amount of the fine is subject to indexation using SELIC. On September 2, 2010, Praxair issued a press release and filed a report on Form 8-K rejecting all claims and stating that the fine represents a gross and arbitrary disregard of Brazilian law.
|
|
Quarter Ended March 31,
|
||||||
(Millions of dollars)
|
2016
|
|
2015
|
||||
SALES
(a)
|
|
|
|
||||
North America
|
$
|
1,353
|
|
|
$
|
1,499
|
|
Europe
|
320
|
|
|
326
|
|
||
South America
|
311
|
|
|
401
|
|
||
Asia
|
376
|
|
|
371
|
|
||
Surface Technologies
|
149
|
|
|
160
|
|
||
Total sales
|
$
|
2,509
|
|
|
$
|
2,757
|
|
|
Quarter Ended March 31,
|
||||||
(Millions of dollars)
|
2016
|
|
2015
|
||||
OPERATING PROFIT
|
|
|
|
||||
North America
|
$
|
349
|
|
|
$
|
379
|
|
Europe
|
62
|
|
|
62
|
|
||
South America
|
55
|
|
|
85
|
|
||
Asia
|
63
|
|
|
69
|
|
||
Surface Technologies
|
25
|
|
|
28
|
|
||
Segment operating profit
|
$
|
554
|
|
|
$
|
623
|
|
(a)
|
Sales reflect external sales only. Intersegment sales, primarily from North America to other segments, were not material.
|
|
Quarter Ended March 31,
|
||||||||||||||||||||||
(Millions of dollars)
|
2016
|
|
2015
|
||||||||||||||||||||
Activity
|
Praxair, Inc.
Shareholders’
Equity
|
|
Noncontrolling
Interests
|
|
Total
Equity
|
|
Praxair, Inc.
Shareholders’
Equity
|
|
Noncontrolling
Interests
|
|
Total
Equity
|
||||||||||||
Balance, beginning of period
|
$
|
4,389
|
|
|
$
|
404
|
|
|
$
|
4,793
|
|
|
$
|
5,623
|
|
|
$
|
387
|
|
|
$
|
6,010
|
|
Net income (a)
|
356
|
|
|
8
|
|
|
364
|
|
|
416
|
|
|
9
|
|
|
425
|
|
||||||
Other comprehensive income (loss)
|
346
|
|
|
10
|
|
|
356
|
|
|
(630
|
)
|
|
(21
|
)
|
|
(651
|
)
|
||||||
Noncontrolling interests:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Additions (reductions) (b)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
||||||
Dividends and other capital changes
|
—
|
|
|
(5
|
)
|
|
(5
|
)
|
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
||||||
Redemption value adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
||||||
Dividends to Praxair, Inc. common stock holders ($0.75 per share in 2016 and $0.715 per share in 2015)
|
(214
|
)
|
|
—
|
|
|
(214
|
)
|
|
(207
|
)
|
|
—
|
|
|
(207
|
)
|
||||||
Issuances of common stock:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
For the dividend reinvestment and stock purchase plan
|
2
|
|
|
—
|
|
|
2
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||||
For employee savings and incentive plans
|
27
|
|
|
—
|
|
|
27
|
|
|
30
|
|
|
—
|
|
|
30
|
|
||||||
Purchases of common stock
|
(32
|
)
|
|
—
|
|
|
(32
|
)
|
|
(234
|
)
|
|
—
|
|
|
(234
|
)
|
||||||
Tax benefit from share-based compensation
|
6
|
|
|
—
|
|
|
6
|
|
|
14
|
|
|
—
|
|
|
14
|
|
||||||
Share-based compensation
|
8
|
|
|
—
|
|
|
8
|
|
|
7
|
|
|
—
|
|
|
7
|
|
||||||
Balance, end of period
|
$
|
4,888
|
|
|
$
|
417
|
|
|
$
|
5,305
|
|
|
$
|
5,018
|
|
|
$
|
375
|
|
|
$
|
5,393
|
|
(a)
|
Net income for noncontrolling interests excludes Net income related to redeemable noncontrolling interests of $
2 million
for the
three
months ended
March 31,
2016
($
3 million
for the same time period in
2015
), which is not part of total equity (see redeemable noncontrolling interests section below).
|
(b)
|
Praxair increased its ownership in certain consolidated subsidiaries. The difference between the purchase price and the related noncontrolling interests was recorded as a decrease in Praxair's additional paid-in-capital.
|
|
March 31,
|
|
December 31,
|
||||
(Millions of dollars)
|
2016
|
|
2015
|
||||
Cumulative translation adjustment - net of taxes:
|
|
|
|
||||
North America
|
$
|
(817
|
)
|
|
$
|
(899
|
)
|
South America
|
(2,120
|
)
|
|
(2,272
|
)
|
||
Europe
|
(468
|
)
|
|
(526
|
)
|
||
Asia
|
(245
|
)
|
|
(285
|
)
|
||
Surface Technologies
|
(26
|
)
|
|
(36
|
)
|
||
|
(3,676
|
)
|
|
(4,018
|
)
|
||
Derivatives - net of taxes
|
(1
|
)
|
|
(1
|
)
|
||
Pension / OPEB funded status obligation (net of $320 million and $325 million tax benefit in March 31, 2016 and December 31, 2015, respectively)
|
(573
|
)
|
|
(577
|
)
|
||
|
$
|
(4,250
|
)
|
|
$
|
(4,596
|
)
|
(Millions of dollars)
|
2016
|
|
2015
|
||||
Balance, January 1
|
$
|
113
|
|
|
$
|
176
|
|
Net income
|
2
|
|
|
3
|
|
||
Distributions to noncontrolling interest
|
(2
|
)
|
|
(3
|
)
|
||
Redemption value adjustments/accretion
|
—
|
|
|
3
|
|
||
Foreign currency translation and other
|
6
|
|
|
(9
|
)
|
||
Purchase of noncontrolling interest
|
—
|
|
|
—
|
|
||
Balance, March 31
|
$
|
119
|
|
|
$
|
170
|
|
|
Quarter Ended March 31,
|
|||||||||
(Dollar amounts in millions, except per share data)
|
2016
|
|
2015
|
|
Variance
|
|||||
Reported Amounts
|
|
|
|
|
|
|||||
Sales
|
$
|
2,509
|
|
|
$
|
2,757
|
|
|
(9
|
)%
|
Cost of sales, exclusive of depreciation and amortization
|
$
|
1,381
|
|
|
$
|
1,530
|
|
|
(10
|
)%
|
Gross margin (a)
|
$
|
1,128
|
|
|
$
|
1,227
|
|
|
(8
|
)%
|
As a percent of sales
|
45.0
|
%
|
|
44.5
|
%
|
|
|
|||
Selling, general and administrative
|
$
|
274
|
|
|
$
|
299
|
|
|
(8
|
)%
|
As a percent of sales
|
10.9
|
%
|
|
10.8
|
%
|
|
|
|||
Depreciation and amortization
|
$
|
272
|
|
|
$
|
277
|
|
|
(2
|
)%
|
Other income (expense) - net
|
$
|
(5
|
)
|
|
$
|
(4
|
)
|
|
|
|
Operating profit
|
$
|
554
|
|
|
$
|
623
|
|
|
(11
|
)%
|
Operating margin
|
22.1
|
%
|
|
22.6
|
%
|
|
|
|||
Interest expense - net
|
$
|
65
|
|
|
$
|
44
|
|
|
48
|
%
|
Effective tax rate
|
27.2
|
%
|
|
28.0
|
%
|
|
|
|||
Income from equity investments
|
$
|
10
|
|
|
$
|
11
|
|
|
(9
|
)%
|
Noncontrolling interests
|
$
|
(10
|
)
|
|
$
|
(12
|
)
|
|
(17
|
)%
|
Net income - Praxair, Inc.
|
$
|
356
|
|
|
$
|
416
|
|
|
(14
|
)%
|
Diluted earnings per share
|
$
|
1.24
|
|
|
$
|
1.43
|
|
|
(13
|
)%
|
Diluted shares outstanding
|
286,665
|
|
|
291,652
|
|
|
(2
|
)%
|
||
Number of employees
|
26,558
|
|
|
27,680
|
|
|
|
|||
2016 Adjusted Amounts (b)
|
|
|
|
|
|
|||||
Interest expense - net
|
$
|
49
|
|
|
$
|
44
|
|
|
11
|
%
|
Effective tax rate
|
27.5
|
%
|
|
28.0
|
%
|
|
|
|||
Net income - Praxair, Inc.
|
$
|
366
|
|
|
$
|
416
|
|
|
(12
|
)%
|
Diluted earnings per share
|
$
|
1.28
|
|
|
$
|
1.43
|
|
|
(10
|
)%
|
(a)
|
Gross margin excludes depreciation and amortization expense.
|
(b)
|
Adjusted amounts are non-GAAP measures which exclude the impact of the bond redemption charge (see Note 5 to the condensed consolidated financial statements). A reconciliation of reported amounts to adjusted amounts can be found in the "Non-GAAP Financial Measures" section of this MD&A.
|
|
Quarter Ended March 31, 2016 vs. 2015
|
||||
|
% Change
|
||||
|
Sales
|
|
Operating Profit
|
||
Factors Contributing to Changes
|
|
|
|
||
Volume
|
(2
|
)%
|
|
(7
|
)%
|
Price
|
1
|
%
|
|
4
|
%
|
Cost pass-through
|
(1
|
)%
|
|
—
|
%
|
Currency
|
(7
|
)%
|
|
(7
|
)%
|
Acquisitions/divestitures
|
—
|
%
|
|
—
|
%
|
Other
|
—
|
%
|
|
(1
|
)%
|
Reported
|
(9
|
)%
|
|
(11
|
)%
|
|
Quarter Ended March 31,
|
|||||||
|
% of Sales
|
|
% Change*
|
|||||
|
2016
|
|
2015
|
|
||||
Sales by End Markets
|
|
|
|
|
|
|||
Manufacturing
|
24
|
%
|
|
25
|
%
|
|
(5
|
)%
|
Metals
|
17
|
%
|
|
17
|
%
|
|
—
|
%
|
Energy
|
11
|
%
|
|
13
|
%
|
|
(12
|
)%
|
Chemicals
|
10
|
%
|
|
10
|
%
|
|
(3
|
)%
|
Electronics
|
9
|
%
|
|
7
|
%
|
|
6
|
%
|
Healthcare
|
8
|
%
|
|
8
|
%
|
|
3
|
%
|
Food & Beverage
|
9
|
%
|
|
8
|
%
|
|
7
|
%
|
Aerospace
|
3
|
%
|
|
3
|
%
|
|
—
|
%
|
Other
|
9
|
%
|
|
9
|
%
|
|
—
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
Quarter Ended March 31,
|
||||
|
% of Sales
|
||||
|
2016
|
|
2015
|
||
Sales by Distribution Method
|
|
|
|
||
On-Site
|
28
|
%
|
|
28
|
%
|
Merchant
|
34
|
%
|
|
34
|
%
|
Packaged Gas
|
28
|
%
|
|
29
|
%
|
Other
|
10
|
%
|
|
9
|
%
|
|
100
|
%
|
|
100
|
%
|
|
Quarter Ended March 31,
|
|||||||||
(Dollar amounts in millions)
|
2016
|
|
2015
|
|
Variance
|
|||||
SALES
|
|
|
|
|
|
|||||
North America
|
$
|
1,353
|
|
|
$
|
1,499
|
|
|
(10
|
)%
|
Europe
|
320
|
|
|
326
|
|
|
(2
|
)%
|
||
South America
|
311
|
|
|
401
|
|
|
(22
|
)%
|
||
Asia
|
376
|
|
|
371
|
|
|
1
|
%
|
||
Surface Technologies
|
149
|
|
|
160
|
|
|
(7
|
)%
|
||
|
$
|
2,509
|
|
|
$
|
2,757
|
|
|
(9
|
)%
|
OPERATING PROFIT
|
|
|
|
|
|
|||||
North America
|
$
|
349
|
|
|
$
|
379
|
|
|
(8
|
)%
|
Europe
|
62
|
|
|
62
|
|
|
—
|
%
|
||
South America
|
55
|
|
|
85
|
|
|
(35
|
)%
|
||
Asia
|
63
|
|
|
69
|
|
|
(9
|
)%
|
||
Surface Technologies
|
25
|
|
|
28
|
|
|
(11
|
)%
|
||
Segment operating profit
|
$
|
554
|
|
|
$
|
623
|
|
|
(11
|
)%
|
|
Quarter Ended March 31,
|
|||||||||
|
2016
|
|
2015
|
|
Variance
|
|||||
Sales
|
$
|
1,353
|
|
|
$
|
1,499
|
|
|
(10
|
)%
|
Cost of sales, exclusive of depreciation and amortization
|
682
|
|
|
791
|
|
|
|
|||
Gross margin
|
671
|
|
|
708
|
|
|
|
|||
Operating expenses
|
171
|
|
|
179
|
|
|
|
|||
Depreciation and amortization
|
151
|
|
|
150
|
|
|
|
|||
Operating profit
|
$
|
349
|
|
|
$
|
379
|
|
|
(8
|
)%
|
Margin %
|
25.8
|
%
|
|
25.3
|
%
|
|
|
|
Quarter Ended March 31, 2016 vs. 2015
|
||||
|
% Change
|
||||
|
Sales
|
|
Operating Profit
|
||
Factors Contributing to Changes
|
|
|
|
||
Volume
|
(5
|
)%
|
|
(9
|
)%
|
Price
|
1
|
%
|
|
3
|
%
|
Cost pass-through
|
(2
|
)%
|
|
—
|
%
|
Currency
|
(3
|
)%
|
|
(3
|
)%
|
Acquisitions/divestitures
|
(1
|
)%
|
|
(1
|
)%
|
Other
|
—
|
%
|
|
2
|
%
|
|
(10
|
)%
|
|
(8
|
)%
|
|
Quarter Ended March 31,
|
|||||||
|
% of Sales
|
|
% Change*
|
|||||
|
2016
|
|
2015
|
|
||||
Sales by End Markets
|
|
|
|
|
|
|||
Manufacturing
|
31
|
%
|
|
31
|
%
|
|
(5
|
)%
|
Metals
|
12
|
%
|
|
12
|
%
|
|
(6
|
)%
|
Energy
|
16
|
%
|
|
18
|
%
|
|
(12
|
)%
|
Chemicals
|
9
|
%
|
|
10
|
%
|
|
(13
|
)%
|
Electronics
|
5
|
%
|
|
4
|
%
|
|
1
|
%
|
Healthcare
|
7
|
%
|
|
7
|
%
|
|
(4
|
)%
|
Food & Beverage
|
10
|
%
|
|
9
|
%
|
|
6
|
%
|
Aerospace
|
2
|
%
|
|
1
|
%
|
|
6
|
%
|
Other
|
8
|
%
|
|
8
|
%
|
|
1
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
Quarter Ended March 31,
|
||||
|
% of Sales
|
||||
|
2016
|
|
2015
|
||
Sales by Distribution Method
|
|
|
|
||
On- Site
|
27
|
%
|
|
28
|
%
|
Merchant
|
39
|
%
|
|
37
|
%
|
Packaged Gas
|
32
|
%
|
|
33
|
%
|
Other
|
2
|
%
|
|
2
|
%
|
|
100
|
%
|
|
100
|
%
|
|
Quarter Ended March 31,
|
|||||||||
|
2016
|
|
2015
|
|
Variance %
|
|||||
Sales
|
$
|
320
|
|
|
$
|
326
|
|
|
(2
|
)%
|
Cost of sales, exclusive of depreciation and amortization
|
178
|
|
|
182
|
|
|
|
|||
Gross margin
|
142
|
|
|
144
|
|
|
|
|||
Operating expenses
|
44
|
|
|
46
|
|
|
|
|||
Depreciation and amortization
|
36
|
|
|
36
|
|
|
|
|||
Operating profit
|
$
|
62
|
|
|
$
|
62
|
|
|
—
|
%
|
Margin %
|
19.4
|
%
|
|
19.0
|
%
|
|
|
|
Quarter Ended March 31, 2016 vs. 2015
|
||||
|
% Change
|
|
% Change
|
||
|
Sales
|
|
Operating Profit
|
||
Factors Contributing to Changes
|
|
|
|
||
Volume
|
2
|
%
|
|
3
|
%
|
Price
|
—
|
%
|
|
—
|
%
|
Cost pass-through
|
—
|
%
|
|
—
|
%
|
Currency
|
(4
|
)%
|
|
(3
|
)%
|
Acquisitions/divestitures
|
—
|
%
|
|
—
|
%
|
Other
|
—
|
%
|
|
—
|
%
|
|
(2
|
)%
|
|
—
|
%
|
|
Quarter Ended March 31,
|
|||||||
|
% of Sales
|
|
% Change*
|
|||||
|
2016
|
|
2015
|
|
||||
Sales by End Markets
|
|
|
|
|
|
|||
Manufacturing
|
22
|
%
|
|
22
|
%
|
|
1
|
%
|
Metals
|
18
|
%
|
|
17
|
%
|
|
7
|
%
|
Energy
|
5
|
%
|
|
6
|
%
|
|
(15
|
)%
|
Chemicals
|
14
|
%
|
|
14
|
%
|
|
(1
|
)%
|
Electronics
|
8
|
%
|
|
8
|
%
|
|
8
|
%
|
Healthcare
|
11
|
%
|
|
11
|
%
|
|
2
|
%
|
Food & Beverage
|
9
|
%
|
|
9
|
%
|
|
4
|
%
|
Aerospace
|
1
|
%
|
|
1
|
%
|
|
(18
|
)%
|
Other
|
12
|
%
|
|
12
|
%
|
|
2
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
Quarter Ended March 31,
|
||||
|
% of Sales
|
||||
|
2016
|
|
2015
|
||
Sales by Distribution Method
|
|
|
|
||
On- Site
|
20
|
%
|
|
19
|
%
|
Merchant
|
34
|
%
|
|
34
|
%
|
Packaged Gas
|
42
|
%
|
|
43
|
%
|
Other
|
4
|
%
|
|
4
|
%
|
|
100
|
%
|
|
100
|
%
|
|
Quarter Ended March 31,
|
|||||||||
|
2016
|
|
2015
|
|
Variance
|
|||||
Sales
|
$
|
311
|
|
|
$
|
401
|
|
|
(22
|
)%
|
Cost of sales, exclusive of depreciation and amortization
|
183
|
|
|
221
|
|
|
|
|||
Gross margin
|
128
|
|
|
180
|
|
|
|
|||
Operating expenses
|
43
|
|
|
57
|
|
|
|
|||
Depreciation and amortization
|
30
|
|
|
38
|
|
|
|
|||
Operating profit
|
$
|
55
|
|
|
$
|
85
|
|
|
(35
|
)%
|
Margin %
|
17.7
|
%
|
|
21.2
|
%
|
|
|
|
Quarter Ended March 31, 2016 vs. 2015
|
||||
|
% Change
|
|
% Change
|
||
|
Sales
|
|
Operating Profit
|
||
Factors Contributing to Changes
|
|
|
|
||
Volume
|
(2
|
)%
|
|
(4
|
)%
|
Price
|
3
|
%
|
|
15
|
%
|
Cost pass-through
|
1
|
%
|
|
—
|
%
|
Currency
|
(25
|
)%
|
|
(26
|
)%
|
Acquisitions/divestitures
|
1
|
%
|
|
—
|
%
|
Other
|
—
|
%
|
|
(20
|
)%
|
|
(22
|
)%
|
|
(35
|
)%
|
|
Quarter Ended March 31,
|
|||||||
|
% of Sales
|
|
% Change*
|
|||||
|
2016
|
|
2015
|
|
||||
Sales by End Markets
|
|
|
|
|
|
|||
Manufacturing
|
20
|
%
|
|
22
|
%
|
|
(10
|
)%
|
Metals
|
29
|
%
|
|
28
|
%
|
|
4
|
%
|
Energy
|
1
|
%
|
|
2
|
%
|
|
(16
|
)%
|
Chemicals
|
9
|
%
|
|
9
|
%
|
|
(3
|
)%
|
Electronics
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Healthcare
|
18
|
%
|
|
17
|
%
|
|
14
|
%
|
Food & Beverage
|
14
|
%
|
|
13
|
%
|
|
10
|
%
|
Aerospace
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Other
|
9
|
%
|
|
9
|
%
|
|
3
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
Quarter Ended March 31,
|
||||
|
% of Sales
|
||||
|
2016
|
|
2015
|
||
Sales by Distribution Method
|
|
|
|
||
On- Site
|
30
|
%
|
|
27
|
%
|
Merchant
|
41
|
%
|
|
41
|
%
|
Packaged Gas
|
28
|
%
|
|
30
|
%
|
Other
|
1
|
%
|
|
2
|
%
|
|
100
|
%
|
|
100
|
%
|
|
Quarter Ended March 31,
|
|||||||||
|
2016
|
|
2015
|
|
Variance
|
|||||
Sales
|
$
|
376
|
|
|
$
|
371
|
|
|
1
|
%
|
Cost of sales, exclusive of depreciation and amortization
|
241
|
|
|
233
|
|
|
|
|||
Gross margin
|
135
|
|
|
138
|
|
|
|
|||
Operating expenses
|
27
|
|
|
26
|
|
|
|
|||
Depreciation and amortization
|
45
|
|
|
43
|
|
|
|
|||
Operating profit
|
$
|
63
|
|
|
$
|
69
|
|
|
(9
|
)%
|
Margin %
|
16.8
|
%
|
|
18.6
|
%
|
|
|
|
Quarter Ended March 31, 2016 vs. 2015
|
||||
|
% Change
|
|
% Change
|
||
|
Sales
|
|
Operating Profit
|
||
Factors Contributing to Changes
|
|
|
|
||
Volume / Sale of Equipment
|
6
|
%
|
|
1
|
%
|
Price
|
(1
|
)%
|
|
(4
|
)%
|
Cost pass-through
|
1
|
%
|
|
—
|
%
|
Currency
|
(6
|
)%
|
|
(7
|
)%
|
Acquisitions/divestitures
|
1
|
%
|
|
1
|
%
|
Other
|
—
|
%
|
|
—
|
%
|
|
1
|
%
|
|
(9
|
)%
|
|
Quarter Ended March 31,
|
|||||||
|
% of Sales
|
|
% Change*
|
|||||
|
2016
|
|
2015
|
|
||||
Sales by End Markets
|
|
|
|
|
|
|||
Manufacturing
|
9
|
%
|
|
10
|
%
|
|
—
|
%
|
Metals
|
28
|
%
|
|
30
|
%
|
|
(1
|
)%
|
Energy
|
3
|
%
|
|
3
|
%
|
|
(3
|
)%
|
Chemicals
|
14
|
%
|
|
12
|
%
|
|
26
|
%
|
Electronics
|
32
|
%
|
|
32
|
%
|
|
9
|
%
|
Healthcare
|
1
|
%
|
|
1
|
%
|
|
14
|
%
|
Food & Beverage
|
2
|
%
|
|
2
|
%
|
|
14
|
%
|
Aerospace
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Other
|
11
|
%
|
|
10
|
%
|
|
1
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
Quarter Ended March 31,
|
||||
|
% of Sales
|
||||
|
2016
|
|
2015
|
||
Sales by Distribution Method
|
|
|
|
||
On- Site
|
51
|
%
|
|
50
|
%
|
Merchant
|
28
|
%
|
|
31
|
%
|
Packaged Gas
|
14
|
%
|
|
12
|
%
|
Other
|
7
|
%
|
|
7
|
%
|
|
100
|
%
|
|
100
|
%
|
|
Quarter Ended March 31,
|
|||||||||
|
2016
|
|
2015
|
|
Variance
|
|||||
Sales
|
$
|
149
|
|
|
$
|
160
|
|
|
(7
|
)%
|
Cost of sales, exclusive of depreciation and amortization
|
97
|
|
|
103
|
|
|
|
|||
Gross margin
|
52
|
|
|
57
|
|
|
|
|||
Operating expenses
|
17
|
|
|
19
|
|
|
|
|||
Depreciation and amortization
|
10
|
|
|
10
|
|
|
|
|||
Operating profit
|
$
|
25
|
|
|
$
|
28
|
|
|
(11
|
)%
|
Margin %
|
16.8
|
%
|
|
17.5
|
%
|
|
|
|
Quarter Ended March 31, 2016 vs. 2015
|
||||
|
% Change
|
|
% Change
|
||
|
Sales
|
|
Operating Profit
|
||
Factors Contributing to Changes
|
|
|
|
||
Volume/Price
|
(5
|
)%
|
|
(21
|
)%
|
Cost pass-through
|
(1
|
)%
|
|
—
|
%
|
Currency
|
(2
|
)%
|
|
(1
|
)%
|
Acquisitions/divestitures
|
1
|
%
|
|
—
|
%
|
Other
|
—
|
%
|
|
11
|
%
|
|
(7
|
)%
|
|
(11
|
)%
|
|
Quarter Ended March 31,
|
|||||||
|
% of Sales
|
|
% Change*
|
|||||
|
2016
|
|
2015
|
|
||||
Sales by End Markets
|
|
|
|
|
|
|||
Manufacturing
|
11
|
%
|
|
12
|
%
|
|
(9
|
)%
|
Metals
|
9
|
%
|
|
7
|
%
|
|
19
|
%
|
Energy
|
24
|
%
|
|
26
|
%
|
|
(10
|
)%
|
Chemicals
|
2
|
%
|
|
2
|
%
|
|
(3
|
)%
|
Electronics
|
1
|
%
|
|
1
|
%
|
|
23
|
%
|
Healthcare
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Food & Beverage
|
3
|
%
|
|
3
|
%
|
|
(4
|
)%
|
Aerospace
|
38
|
%
|
|
36
|
%
|
|
(2
|
)%
|
Other
|
12
|
%
|
|
13
|
%
|
|
(21
|
)%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
Percentage of YTD 2016 Consolidated Sales
|
|
Exchange Rate for
Income Statement
|
|
Exchange Rate for
Balance Sheet
|
|||||||||
|
Year-To-Date Average
|
|
March 31,
|
|
December 31,
|
|||||||||
Currency
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||||
Euro
|
13
|
%
|
|
0.91
|
|
|
0.89
|
|
|
0.88
|
|
|
0.92
|
|
Brazilian real
|
10
|
%
|
|
3.89
|
|
|
2.85
|
|
|
3.56
|
|
|
3.90
|
|
Canadian dollar
|
7
|
%
|
|
1.37
|
|
|
1.24
|
|
|
1.30
|
|
|
1.38
|
|
Mexican peso
|
5
|
%
|
|
18.03
|
|
|
14.95
|
|
|
17.28
|
|
|
17.21
|
|
Chinese yuan
|
6
|
%
|
|
6.54
|
|
|
6.24
|
|
|
6.45
|
|
|
6.49
|
|
Korean won
|
4
|
%
|
|
1,201
|
|
|
1,100
|
|
|
1,143
|
|
|
1,175
|
|
India rupee
|
3
|
%
|
|
67.47
|
|
|
62.26
|
|
|
66.25
|
|
|
66.15
|
|
Argentine peso
|
1
|
%
|
|
14.42
|
|
|
8.69
|
|
|
14.70
|
|
|
13.04
|
|
Norwegian krone
|
1
|
%
|
|
8.62
|
|
|
7.75
|
|
|
8.27
|
|
|
8.84
|
|
(Millions of dollars)
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
NET CASH PROVIDED BY (USED FOR):
|
|
|
|
||||
OPERATING ACTIVITIES
|
|
|
|
||||
Net income (including noncontrolling interest)
|
$
|
366
|
|
|
$
|
428
|
|
Non-cash charges (credits):
|
|
|
|
||||
Add: Depreciation and amortization
|
272
|
|
|
277
|
|
||
Add: Deferred income taxes
|
9
|
|
|
14
|
|
||
Add: Share-based compensation
|
8
|
|
|
7
|
|
||
Net income adjusted for non-cash charges
|
655
|
|
|
726
|
|
||
Less: Working capital
|
(103
|
)
|
|
(120
|
)
|
||
Less: Pension contributions
|
(2
|
)
|
|
(11
|
)
|
||
Other
|
(3
|
)
|
|
(87
|
)
|
||
Net cash provided by operating activities
|
$
|
547
|
|
|
$
|
508
|
|
INVESTING ACTIVITIES
|
|
|
|
||||
Capital expenditures
|
(323
|
)
|
|
(397
|
)
|
||
Acquisitions, net of cash acquired
|
(63
|
)
|
|
(5
|
)
|
||
Divestitures and asset sales
|
2
|
|
|
2
|
|
||
Net cash used for investing activities
|
$
|
(384
|
)
|
|
$
|
(400
|
)
|
FINANCING ACTIVITIES
|
|
|
|
||||
Debt increases - net
|
95
|
|
|
290
|
|
||
Issuances (purchases) of common stock - net
|
2
|
|
|
(191
|
)
|
||
Cash dividends - Praxair, Inc. shareholders
|
(214
|
)
|
|
(207
|
)
|
||
Excess tax benefit on share-based compensation
|
6
|
|
|
14
|
|
||
Noncontrolling interest transactions and other
|
(2
|
)
|
|
(6
|
)
|
||
Net cash (used for) provided by financing activities
|
$
|
(113
|
)
|
|
$
|
(100
|
)
|
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
$
|
24
|
|
|
$
|
(17
|
)
|
Cash and cash equivalents, end-of-period
|
$
|
221
|
|
|
$
|
117
|
|
|
|
|
|
||||
OTHER FINANCIAL DATA (a)
|
|
|
|
||||
Debt-to-capital ratio
|
62.9
|
%
|
|
62.4
|
%
|
||
After-tax return on capital ("ROC")
|
12.4
|
%
|
|
12.7
|
%
|
||
Return on Praxair, Inc. shareholder's equity ("ROE")
|
34.6
|
%
|
|
29.6
|
%
|
||
Adjusted EBITDA
|
$
|
836
|
|
|
$
|
911
|
|
Adjusted EBITDA Margin
|
33.3
|
%
|
|
33.0
|
%
|
||
Debt-to-adjusted EBITDA
|
2.6
|
|
|
2.3
|
|
|
March 31,
|
||||||
(Dollar amounts in millions, except per share data)
|
2016
|
|
2015
|
||||
Debt-to-capital
|
62.9
|
%
|
|
62.4
|
%
|
||
After-tax return on capital
|
12.4
|
%
|
|
12.7
|
%
|
||
Return on equity
|
34.6
|
%
|
|
29.6
|
%
|
||
Adjusted EBITDA for the quarter ended
|
$
|
836
|
|
|
$
|
911
|
|
Debt-to-adjusted EBITDA
|
2.6
|
|
|
2.3
|
|
|
Three Months Ended March 31,
|
||||||
2016 Adjusted amounts:*
|
2016
|
|
2015
|
||||
Operating profit
|
$
|
554
|
|
|
$
|
623
|
|
As a percent of sales
|
22.1
|
%
|
|
22.6
|
%
|
||
EBITDA
|
$
|
836
|
|
|
$
|
911
|
|
EBITDA margin
|
33.3
|
%
|
|
33.0
|
%
|
||
Effective tax rate
|
27.5
|
%
|
|
28.0
|
%
|
||
Net income - Praxair, Inc.
|
$
|
366
|
|
|
$
|
416
|
|
Diluted earnings per share
|
1.28
|
|
|
1.43
|
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
(Dollar amounts in millions)
|
|
|
|
||||
Debt
|
$
|
9,404
|
|
|
$
|
9,360
|
|
Less: cash and cash equivalents
|
(221
|
)
|
|
(117
|
)
|
||
Net debt
|
9,183
|
|
|
9,243
|
|
||
Equity and redeemable noncontrolling interests
|
|
|
|
||||
Redeemable noncontrolling interests
|
119
|
|
|
170
|
|
||
Praxair, Inc. shareholders’ equity
|
4,888
|
|
|
5,018
|
|
||
Noncontrolling interests
|
417
|
|
|
375
|
|
||
Total equity and redeemable noncontrolling interests
|
5,424
|
|
|
5,563
|
|
||
Capital
|
$
|
14,607
|
|
|
$
|
14,806
|
|
DEBT-TO-CAPITAL RATIO
|
62.9
|
%
|
|
62.4
|
%
|
|
2016
|
|
2015
|
||||||||||||||||||||
|
Four
Quarter
Trailing
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
Four
Quarter
Trailing
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
March 31, 2016
|
|
December 31, 2015
|
|
|
March 31, 2015
|
|
December 31, 2014
|
||||||||||||||
(Dollar amounts in millions)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Adjusted operating profit (see below)
|
$
|
2,424
|
|
|
$
|
554
|
|
|
$
|
1,870
|
|
|
$
|
2,694
|
|
|
$
|
623
|
|
|
$
|
2,071
|
|
Less: adjusted income taxes (see below)
|
(630
|
)
|
|
(139
|
)
|
|
(491
|
)
|
|
(693
|
)
|
|
(162
|
)
|
|
(531
|
)
|
||||||
Less: tax benefit on interest expense*
|
(47
|
)
|
|
(14
|
)
|
|
(33
|
)
|
|
(49
|
)
|
|
(12
|
)
|
|
(37
|
)
|
||||||
Add: equity income
|
42
|
|
|
10
|
|
|
32
|
|
|
44
|
|
|
11
|
|
|
33
|
|
||||||
Net operating profit after-tax (NOPAT)
|
$
|
1,789
|
|
|
$
|
411
|
|
|
$
|
1,378
|
|
|
$
|
1,996
|
|
|
$
|
460
|
|
|
$
|
1,536
|
|
Capital:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
March 31st, 2016 & 2015
|
$
|
14,607
|
|
|
|
|
|
|
$
|
14,806
|
|
|
|
|
|
||||||||
December 31st, 2015 & 2014
|
$
|
13,990
|
|
|
|
|
|
|
$
|
15,285
|
|
|
|
|
|
||||||||
September 30th, 2015 & 2014
|
$
|
14,157
|
|
|
|
|
|
|
$
|
16,052
|
|
|
|
|
|
||||||||
June 30th, 2015 & 2014
|
$
|
14,696
|
|
|
|
|
|
|
$
|
16,459
|
|
|
|
|
|
||||||||
March 31st, 2015 & 2014
|
$
|
14,806
|
|
|
|
|
|
|
$
|
16,285
|
|
|
|
|
|
||||||||
Five-quarter average
|
$
|
14,451
|
|
|
|
|
|
|
$
|
15,777
|
|
|
|
|
|
||||||||
AFTER-TAX ROC
|
12.4
|
%
|
|
|
|
|
|
12.7
|
%
|
|
|
|
|
*
|
Tax benefit on interest expense is computed using the effective rate.
|
|
2016
|
|
2015
|
||||||||||||||||||||
|
Four
Quarter
Trailing
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
Four
Quarter
Trailing
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
March 31, 2016
|
|
December 31, 2015
|
|
|
March 31, 2015
|
|
December 31, 2014
|
||||||||||||||
(Dollar amounts in millions)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Adjusted Net income - Praxair, Inc. (see below)
|
$
|
1,627
|
|
|
$
|
366
|
|
|
$
|
1,261
|
|
|
$
|
1,820
|
|
|
$
|
416
|
|
|
$
|
1,404
|
|
Praxair, Inc. shareholders’ equity
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
March 31st, 2016 & 2015
|
$
|
4,888
|
|
|
|
|
|
|
$
|
5,018
|
|
|
|
|
|
||||||||
December 31st, 2015 & 2014
|
$
|
4,389
|
|
|
|
|
|
|
$
|
5,623
|
|
|
|
|
|
||||||||
September 30th, 2015 & 2014
|
$
|
4,264
|
|
|
|
|
|
|
$
|
6,552
|
|
|
|
|
|
||||||||
June 30th, 2015 & 2014
|
$
|
4,964
|
|
|
|
|
|
|
$
|
6,911
|
|
|
|
|
|
||||||||
March 31st, 2015 & 2014
|
$
|
5,018
|
|
|
|
|
|
|
$
|
6,600
|
|
|
|
|
|
||||||||
Five-quarter average
|
$
|
4,705
|
|
|
|
|
|
|
$
|
6,141
|
|
|
|
|
|
||||||||
ROE
|
34.6
|
%
|
|
|
|
|
|
29.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
2016
|
|
2015
|
||||||||||||||||||||
|
Four
Quarter
Trailing
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
Four
Quarter
Trailing
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
March 31, 2016
|
|
December 31, 2015
|
|
|
March 31, 2015
|
|
December 31, 2014
|
||||||||||||||
(Dollar amounts in millions)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Adjusted net income - Praxair, Inc. (see below)
|
$
|
1,627
|
|
|
$
|
366
|
|
|
$
|
1,261
|
|
|
$
|
1,820
|
|
|
$
|
416
|
|
|
$
|
1,404
|
|
Add: adjusted noncontrolling interest (see below)
|
43
|
|
|
10
|
|
|
33
|
|
|
50
|
|
|
12
|
|
|
38
|
|
||||||
Add: adjusted interest expense - net (see below)
|
166
|
|
|
49
|
|
|
117
|
|
|
175
|
|
|
44
|
|
|
131
|
|
||||||
Add: adjusted income taxes (see below)
|
630
|
|
|
139
|
|
|
491
|
|
|
693
|
|
|
162
|
|
|
531
|
|
||||||
Add: depreciation and amortization
|
1,101
|
|
|
272
|
|
|
829
|
|
|
1,162
|
|
|
277
|
|
|
885
|
|
||||||
ADJUSTED EBITDA
|
$
|
3,567
|
|
|
$
|
836
|
|
|
$
|
2,731
|
|
|
$
|
3,900
|
|
|
$
|
911
|
|
|
$
|
2,989
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Reported Sales
|
|
|
2,509
|
|
|
|
|
|
|
2,757
|
|
|
|
||||||||||
Adjusted EBITDA Margin
|
|
|
33.3
|
%
|
|
|
|
|
|
33.0
|
%
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net Debt:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
March 31st, 2016 & 2015
|
$
|
9,183
|
|
|
|
|
|
|
$
|
9,243
|
|
|
|
|
|
||||||||
December 31st, 2015 & 2014
|
$
|
9,084
|
|
|
|
|
|
|
$
|
9,099
|
|
|
|
|
|
||||||||
September 30th, 2015 & 2014
|
$
|
9,344
|
|
|
|
|
|
|
$
|
8,922
|
|
|
|
|
|
||||||||
June 30th, 2015 & 2014
|
$
|
9,177
|
|
|
|
|
|
|
$
|
8,959
|
|
|
|
|
|
||||||||
March 31st, 2015 & 2014
|
$
|
9,243
|
|
|
|
|
|
|
$
|
9,092
|
|
|
|
|
|
||||||||
Five-quarter average
|
$
|
9,206
|
|
|
|
|
|
|
$
|
9,063
|
|
|
|
|
|
||||||||
DEBT-TO-ADJUSTED EBITDA RATIO
|
2.6
|
|
|
|
|
|
|
2.3
|
|
|
|
|
|
|
Quarter Ended March 31,
|
|
Nine Months Ended December 31,
|
||||||||||||
(Dollar amounts in millions, except per share data)
|
2016
|
|
2015
|
|
2015
|
|
2014
|
||||||||
Adjusted Operating Profit
|
|
|
|
|
|
|
|
||||||||
Reported operating profit
|
$
|
554
|
|
|
$
|
623
|
|
|
$
|
1,698
|
|
|
$
|
1,933
|
|
Add: Venezuela currency devaluation
|
—
|
|
|
—
|
|
|
—
|
|
|
131
|
|
||||
Add: Pension settlement charge
|
—
|
|
|
—
|
|
|
7
|
|
|
7
|
|
||||
Add: Cost reduction program
|
—
|
|
|
—
|
|
|
165
|
|
|
—
|
|
||||
Total adjustments
|
—
|
|
|
—
|
|
|
172
|
|
|
138
|
|
||||
Adjusted operating profit
|
$
|
554
|
|
|
$
|
623
|
|
|
$
|
1,870
|
|
|
$
|
2,071
|
|
Reported percent change
|
(11
|
)%
|
|
|
|
(12
|
)%
|
|
|
||||||
Adjusted percent change
|
(11
|
)%
|
|
|
|
(10
|
)%
|
|
|
||||||
Adjusted Interest Expense
|
|
|
|
|
|
|
|
||||||||
Reported interest expense
|
$
|
65
|
|
|
$
|
44
|
|
|
$
|
117
|
|
|
$
|
167
|
|
Less: Bond redemption
|
(16
|
)
|
|
—
|
|
|
—
|
|
|
(36
|
)
|
||||
Total adjustments
|
(16
|
)
|
|
—
|
|
|
—
|
|
|
(36
|
)
|
||||
Adjusted interest expense
|
$
|
49
|
|
|
$
|
44
|
|
|
$
|
117
|
|
|
$
|
131
|
|
Adjusted Income Taxes and Effective Tax Rate
|
|
|
|
|
|
|
|
||||||||
Reported income taxes
|
$
|
133
|
|
|
$
|
162
|
|
|
$
|
450
|
|
|
$
|
515
|
|
Add: Bond redemption
|
6
|
|
|
—
|
|
|
—
|
|
|
14
|
|
||||
Add: Pension settlement charge
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
||||
Add: Cost reduction program
|
—
|
|
|
—
|
|
|
39
|
|
|
—
|
|
||||
Total adjustments
|
6
|
|
|
—
|
|
|
41
|
|
|
16
|
|
||||
Adjusted income taxes
|
$
|
139
|
|
|
$
|
162
|
|
|
$
|
491
|
|
|
$
|
531
|
|
|
Quarter Ended March 31,
|
|
Nine Months Ended December 31,
|
||||||||||||
(Dollar amounts in millions, except per share data)
|
2016
|
|
2015
|
|
2015
|
|
2014
|
||||||||
Adjusted Effective Tax Rate
|
|
|
|
|
|
|
|
||||||||
Reported income before income taxes and equity investments
|
$
|
489
|
|
|
$
|
579
|
|
|
$
|
1,581
|
|
|
$
|
1,766
|
|
Add: Bond redemption
|
16
|
|
|
—
|
|
|
—
|
|
|
36
|
|
||||
Add: Pension settlement charge
|
—
|
|
|
—
|
|
|
7
|
|
|
7
|
|
||||
Add: Venezuela currency devaluation
|
—
|
|
|
—
|
|
|
—
|
|
|
131
|
|
||||
Add: Cost reduction program
|
—
|
|
|
—
|
|
|
165
|
|
|
—
|
|
||||
Total adjustments
|
16
|
|
|
—
|
|
|
172
|
|
|
174
|
|
||||
Adjusted income before income taxes and equity investments
|
$
|
505
|
|
|
$
|
579
|
|
|
$
|
1,753
|
|
|
$
|
1,940
|
|
Adjusted effective tax rate
|
27.5
|
%
|
|
28.0
|
%
|
|
28.0
|
%
|
|
27.4
|
%
|
||||
Adjusted Noncontrolling Interests
|
|
|
|
|
|
|
|
||||||||
Reported noncontrolling interests
|
$
|
10
|
|
|
$
|
12
|
|
|
$
|
32
|
|
|
$
|
38
|
|
Add: Cost reduction program
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Total adjustments
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Adjusted Noncontrolling Interests
|
$
|
10
|
|
|
$
|
12
|
|
|
$
|
33
|
|
|
$
|
38
|
|
Adjusted Net Income - Praxair, Inc.
|
|
|
|
|
|
|
|
||||||||
Reported net income - Praxair, Inc.
|
$
|
356
|
|
|
$
|
416
|
|
|
$
|
1,131
|
|
|
$
|
1,246
|
|
Add: Bond redemption
|
10
|
|
|
—
|
|
|
—
|
|
|
22
|
|
||||
Add: Pension settlement charge
|
—
|
|
|
—
|
|
|
5
|
|
|
5
|
|
||||
Add: Venezuela currency devaluation
|
—
|
|
|
—
|
|
|
—
|
|
|
131
|
|
||||
Add: Cost reduction program
|
—
|
|
|
—
|
|
|
125
|
|
|
—
|
|
||||
Total adjustments
|
10
|
|
|
—
|
|
|
130
|
|
|
158
|
|
||||
Adjusted net income - Praxair, Inc.
|
$
|
366
|
|
|
$
|
416
|
|
|
$
|
1,261
|
|
|
$
|
1,404
|
|
Reported percent change
|
(14
|
)%
|
|
|
|
(9
|
)%
|
|
|
||||||
Adjusted percent change
|
(12
|
)%
|
|
|
|
(10
|
)%
|
|
|
Adjusted Diluted Earnings Per Share
|
|
|
|
|
|
|
|
||||||||
Reported diluted EPS
|
$
|
1.24
|
|
|
$
|
1.43
|
|
|
$
|
3.93
|
|
|
$
|
4.23
|
|
Add: Bond redemption
|
0.04
|
|
|
—
|
|
|
—
|
|
|
0.07
|
|
||||
Add: Pension settlement charge
|
—
|
|
|
—
|
|
|
0.02
|
|
|
0.02
|
|
||||
Add: Venezuela currency devaluation
|
—
|
|
|
—
|
|
|
—
|
|
|
0.45
|
|
||||
Add: Cost reduction program
|
—
|
|
|
—
|
|
|
0.43
|
|
|
—
|
|
||||
Total adjustments
|
$
|
0.04
|
|
|
$
|
—
|
|
|
$
|
0.45
|
|
|
$
|
0.54
|
|
Adjusted diluted EPS
|
$
|
1.28
|
|
|
$
|
1.43
|
|
|
$
|
4.38
|
|
|
$
|
4.77
|
|
Reported percent change
|
(13
|
)%
|
|
|
|
|
(7
|
)%
|
|
|
|||||
Adjusted percent change
|
(10
|
)%
|
|
|
|
|
(8
|
)%
|
|
|
(a)
|
Based on an evaluation of the effectiveness of Praxair’s disclosure controls and procedures, which was made under the supervision and with the participation of management, including Praxair’s principal executive officer and principal financial officer, the principal executive officer and principal financial officer 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 Praxair 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 Praxair’s principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.
|
(b)
|
There were no changes in Praxair’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, Praxair’s internal control over financial reporting.
|
|
Period
|
Total Number
of Shares
Purchased
(Thousands)
|
|
Average
Price Paid
Per Share
|
|
Total Numbers of Shares
Purchased as Part of
Publicly Announced
Program (1)
(Thousands)
|
|
Approximate Dollar
Value of Shares that
May Yet be Purchased
Under the Program (2)
(Millions)
|
||||||
January 2016
|
119
|
|
|
$
|
98.64
|
|
|
119
|
|
|
$
|
1,807
|
|
February 2016
|
6
|
|
|
$
|
103.01
|
|
|
6
|
|
|
$
|
1,806
|
|
March 2016
|
180
|
|
|
$
|
112.45
|
|
|
180
|
|
|
$
|
1,786
|
|
First Quarter 2016
|
305
|
|
|
$
|
106.87
|
|
|
305
|
|
|
$
|
1,786
|
|
(1)
|
On January 28, 2014, the Company's board of directors approved the repurchase of $1.5 billion of its common stock (2014 program) which could take place from time to time on the open market (which could include the use of 10b5-1 trading plans) or through negotiated transactions, subject to market and business conditions.
|
(2)
|
As of March 31, 2016, the Company purchased $1,214 million of its common stock pursuant to the 2014 program, leaving an additional $286 million remaining authorized under the 2014 program. The 2014 program does not have any stated expiration date. In addition, on July 28, 2015, the Company’s board of directors approved the repurchase of $1.5 billion of its common stock (“2015 program”) which could take place from time to time on the open market (which could include the use of 10b5-1 trade plans) or through negotiated transactions, subject to market and business conditions. The 2015 program does not have any stated expiration date. The 2015 program is in addition to the 2014 program.
|
(a)
|
Exhibits
|
|
|
|
|
|
|
|
10.01*
|
|
Praxair, Inc. Plan for Determining Performance-Based Awards Under Section 162(m) effective as of January 1, 2016 is filed herewith.
|
|
|
|
|
|
12.01
|
|
Computation of Ratio of Earnings to Fixed Charges.
|
|
|
|
|
|
31.01
|
|
Rule 13a-14(a) Certification
|
|
|
|
|
|
31.02
|
|
Rule 13a-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).
|
|
|
|
|
|
32.02
|
|
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
|
|
XBRL Instance 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
|
|
|
|
PRAXAIR, INC.
|
|
|
|
|
|
|
|
(Registrant)
|
|
|
|
|
|
Date: April 29, 2016
|
|
By: /s/ Elizabeth T. Hirsch
|
|
|
|
|
|
|
|
Elizabeth T. Hirsch
|
|
|
|
Vice President and Controller
|
|
|
|
(On behalf of the Registrant
|
|
|
|
and as Chief Accounting Officer)
|
|
|
a.
|
Net earnings or net income (before or after taxes);
|
b.
|
Earnings per share (basic or diluted);
|
c.
|
Net sales;
|
d.
|
Revenue growth;
|
e.
|
Operating profit;
|
f.
|
Return measures (including, but not limited to, return on assets, capital, invested capital, equity, sales, or revenue);
|
g.
|
Cash flow (including, but not limited to, operating cash flow, free cash flow, cash flow return on equity, and cash flow return on investment);
|
h.
|
Earnings before or after taxes, interest, depreciation, and/or amortization;
|
i.
|
Gross or operating margins;
|
j.
|
Productivity ratios;
|
k.
|
Share price (including, but not limited to, growth measures and total shareholder return);
|
l.
|
Expense targets;
|
m.
|
Margins;
|
n.
|
Operating efficiency;
|
o.
|
Market share;
|
p.
|
Working capital targets;
|
q.
|
Economic value added or EVA (net operating profit after tax minus the sum of capital multiplied by the cost of capital); and
|
r.
|
Objective safety measures.
|
|
|
|
|
|
|
|
|
|
|
||||||||||
RATIO OF EARNINGS TO FIXED CHARGES
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
Praxair, Inc. and Subsidiaries
|
|
|||||||||||||||
|
|
|
|
|
|
|
Exhibit 12.01
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Three Months Ended March 31,
|
|
Year Ended December 31,
|
||||||||||||||||
(Dollar amounts in millions, except ratios)
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Pre-tax income from continuing operations before adjustment for
|
|
|
|
|
|
|
|
|
|
||||||||||
noncontrolling interests in consolidated subsidiaries or income or
|
|
|
|
|
|
|
|
|
|
||||||||||
loss from equity investees
|
$
|
489
|
|
|
$
|
2,160
|
|
|
$
|
2,395
|
|
|
$
|
2,447
|
|
|
$
|
2,296
|
|
Capitalized interest
|
(7
|
)
|
|
(33
|
)
|
|
(38
|
)
|
|
(69
|
)
|
|
(70
|
)
|
|||||
Depreciation of capitalized interest
|
5
|
|
|
22
|
|
|
27
|
|
|
20
|
|
|
20
|
|
|||||
Dividends from less than 50%-owned companies carried at equity
|
2
|
|
|
11
|
|
|
6
|
|
|
10
|
|
|
7
|
|
|||||
Adjusted pre-tax income from continuing operations before adjustment
|
|
|
|
|
|
|
|
|
|
||||||||||
for noncontrolling interests in consolidated subsidiaries or income
|
|
|
|
|
|
|
|
|
|
||||||||||
or loss from equity investees
|
$
|
489
|
|
|
$
|
2,160
|
|
|
$
|
2,390
|
|
|
$
|
2,408
|
|
|
$
|
2,253
|
|
Fixed charges
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest on long-term and short-term debt
|
$
|
65
|
|
|
$
|
161
|
|
|
$
|
213
|
|
|
$
|
178
|
|
|
$
|
141
|
|
Capitalized interest
|
7
|
|
|
33
|
|
|
38
|
|
|
69
|
|
|
70
|
|
|||||
Rental expenses representative of an interest factor
|
11
|
|
|
47
|
|
|
52
|
|
|
43
|
|
|
39
|
|
|||||
Total fixed charges
|
$
|
83
|
|
|
$
|
241
|
|
|
$
|
303
|
|
|
$
|
290
|
|
|
$
|
250
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted pre-tax income from continuing operations before adjustment
|
|
|
|
|
|
|
|
|
|
||||||||||
for noncontrolling interests in consolidated subsidiaries or income or
|
|
|
|
|
|
|
|
|
|
||||||||||
loss from equity investees plus total fixed charges
|
$
|
572
|
|
|
$
|
2,401
|
|
|
$
|
2,693
|
|
|
$
|
2,698
|
|
|
$
|
2,503
|
|
RATIO OF EARNINGS TO FIXED CHARGES
|
6.9
|
|
|
10.0
|
|
|
8.9
|
|
|
9.3
|
|
|
10.0
|
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Praxair, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing equivalent function):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
April 29, 2016
|
|
By: /s/ Stephen F. Angel
|
|
|
|
|
|
|
|
Stephen F. Angel
|
|
|
|
Chairman, President
|
|
|
|
Chief Executive Officer
|
|
|
|
(principal executive officer)
|
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Praxair, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing equivalent function):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
April 29, 2016
|
|
By: /s/ Matthew J. White
|
|
|
|
|
|
|
|
Matthew J. White
|
|
|
|
Senior Vice President and
|
|
|
|
Chief Financial Officer
|
|
|
|
(principal financial officer)
|
|
|
April 29, 2016
|
|
By: /s/ Stephen F. Angel
|
|
|
|
|
|
|
|
Stephen F. Angel
|
|
|
|
Chairman, President
|
|
|
|
Chief Executive Officer
|
|
|
|
(principal executive officer)
|
|
|
April 29, 2016
|
|
By: /s/ Matthew J. White
|
|
|
|
|
|
|
|
Matthew J. White
|
|
|
|
Senior Vice President and
|
|
|
|
Chief Financial Officer
|
|
|
|
(principal financial officer)
|
|