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þ
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ANNUAL 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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Praxair, Inc.
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10 Riverview Drive
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State of incorporation: Delaware
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Danbury, Connecticut 06810-5113
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IRS identification number: 06-124 9050
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Tel. (203) 837-2000
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Title of each class:
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Registered on:
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Common Stock ($0.01 par value)
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New York Stock Exchange
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1.50% Euro notes due 2020
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New York Stock Exchange
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1.20% Euro notes due 2024
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New York Stock Exchange
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1.625% Euro notes due 2025
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New York Stock Exchange
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Page
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Part I
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Item 1:
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Item 1A:
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Item 1B:
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Item 2:
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Item 3:
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Item 4:
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Part II
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Item 5:
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Item 6:
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Item 7:
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Item 7A:
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Item 8:
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Item 9:
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Item 9A:
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Item 9B:
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Part III
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Item 10:
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Item 11:
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Item 12:
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Item 13:
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Item 14:
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Part IV
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Item 15:
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•
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Environmental protection including climate change;
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•
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Domestic and international tax laws and currency controls;
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•
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Safety;
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•
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Securities laws (e.g., SEC and generally accepted accounting principles in the United States);
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•
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Trade and import/ export restrictions;
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•
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Antitrust matters;
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•
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Global anti-bribery laws, including the U.S. Foreign Corrupt Practices Act;
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•
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Healthcare regulations
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•
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The need to implement or remediate controls, procedures and policies appropriate for a larger public company at companies that prior to the acquisition lacked these controls, procedures and policies;
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•
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Diversion of management time and focus from operating existing business to acquisition integration challenges;
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•
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Cultural challenges associated with integrating employees from the acquired company into the existing organization;
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•
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The need to integrate each company’s accounting, management information, human resource and other administrative systems to permit effective management;
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•
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Difficulty with the assimilation of acquired operations and products;
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•
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Failure to achieve targeted synergies; and
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•
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Inability to retain key employees and business relationships of acquired companies.
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•
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the expected timing and likelihood of the entry into or the completion of the proposed business combination, including the timing, receipt and terms and conditions of any required governmental and regulatory approvals of the proposed business combination that could reduce anticipated benefits or cause the parties not to enter into, or to abandon the transaction;
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•
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if and when the parties enter into the proposed business combination agreement, the occurrence of any event, change or other circumstances that could give rise to the termination of the proposed business combination agreement;
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•
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the ability to successfully complete the proposed business combination and the exchange offer, including regulatory or other limitations imposed as a result of the proposed business combination;
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•
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the success of the combined company’s business following the proposed business combination, including the ability to successfully integrate the Praxair and Linde businesses;
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•
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the possibility that Praxair stockholders may not approve the proposed business combination agreement or that the requisite number of Linde shares may not be tendered in the public offer;
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•
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the risk that the parties may not be able to satisfy the conditions to closing of the proposed business combination in a timely manner or at all;
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•
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the risk that the announcement or consummation of the proposed business combination could have adverse effects on the market price of Linde’s or Praxair’s common stock or the ability of Linde and Praxair to retain customers, retain or hire key personnel, maintain relationships with their respective suppliers and customers, and on their operating results and businesses generally;
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•
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the risk that the combined company may be unable to achieve expected synergies or that it may take longer or be more costly than expected to achieve those synergies.
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ITEM 5.
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MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
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Market Price
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Trading
High
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Trading
Low
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Close
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Dividend
Per Share
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||||||||
2016
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||||||||
First Quarter
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$
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115.32
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$
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95.60
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$
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114.45
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$
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0.75
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Second Quarter
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$
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120.04
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$
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106.31
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$
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112.39
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$
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0.75
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Third Quarter
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$
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125.00
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$
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110.12
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$
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120.83
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$
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0.75
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Fourth Quarter
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$
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124.48
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$
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114.43
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$
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117.19
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$
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0.75
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2015
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First Quarter
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$
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130.38
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$
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119.69
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$
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120.74
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$
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0.715
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Second Quarter
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$
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124.99
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$
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117.19
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$
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119.55
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$
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0.715
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Third Quarter
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$
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120.51
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$
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98.55
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$
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101.86
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$
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0.715
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Fourth Quarter
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$
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118.58
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$
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99.59
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$
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102.40
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$
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0.715
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Period
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Total
Number of
Shares
Purchased
(Thousands)
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Average
Price Paid
Per Share
|
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Total Number of
Shares Purchased as
Part of Publicly
Announced
Program (1)
(Thousands)
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Approximate Dollar
Value of Shares that
May Yet be Purchased
Under the Program (2)
(Millions)
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||||||
October 2016
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25
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$
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117.44
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25
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$
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1,683
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November 2016
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369
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$
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116.23
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369
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$
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1,640
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December 2016
|
506
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$
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117.36
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506
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$
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1,581
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Fourth Quarter 2016
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900
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$
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116.90
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900
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$
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1,581
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(1)
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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.
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(2)
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As of
December 31, 2016
, the Company had purchased $
1,419 million
of its common stock pursuant to the 2014 program, leaving an additional $
81 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.
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2011
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2012
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2013
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2014
|
2015
|
2016
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PX
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$100
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$105
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$127
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$130
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$105
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$124
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SPX
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$100
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$116
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$153
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$175
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$176
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$197
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S5MATR
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$100
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$115
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$145
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$155
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$143
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$167
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Year Ended December 31,
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2016(a)
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2015(a)
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2014(a)
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2013(a)
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2012(a)
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||||||||||
From the Consolidated Statements of Income
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Sales
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$
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10,534
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$
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10,776
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$
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12,273
|
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$
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11,925
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$
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11,224
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Cost of sales, exclusive of depreciation and amortization
|
5,860
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5,960
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6,962
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6,744
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|
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6,396
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|||||
Selling, general and administrative
|
1,145
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1,152
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1,308
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1,349
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|
|
1,270
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|||||
Depreciation and amortization
|
1,122
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|
|
1,106
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|
1,170
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|
|
1,109
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|
|
1,001
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|||||
Research and development
|
92
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|
|
93
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|
|
96
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|
|
98
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|
|
98
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|
|||||
Cost reduction program and other charges – net
|
100
|
|
|
172
|
|
|
138
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|
|
32
|
|
|
65
|
|
|||||
Other income (expenses) – net
|
23
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|
|
28
|
|
|
9
|
|
|
32
|
|
|
43
|
|
|||||
Operating profit
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2,238
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|
2,321
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|
2,608
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|
2,625
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|
|
2,437
|
|
|||||
Interest expense – net
|
190
|
|
|
161
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|
|
213
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|
|
178
|
|
|
141
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|||||
Income before income taxes and equity investments
|
2,048
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|
2,160
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2,395
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|
2,447
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|
|
2,296
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|
|||||
Income taxes
|
551
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|
|
612
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|
|
691
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|
|
649
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|
|
586
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|||||
Income before equity investments
|
1,497
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|
|
1,548
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|
1,704
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|
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1,798
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|
|
1,710
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|
|||||
Income from equity investments
|
41
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|
|
43
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|
|
42
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|
|
38
|
|
|
34
|
|
|||||
Net income (including noncontrolling interests)
|
1,538
|
|
|
1,591
|
|
|
1,746
|
|
|
1,836
|
|
|
1,744
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|
|||||
Noncontrolling interests
|
(38
|
)
|
|
(44
|
)
|
|
(52
|
)
|
|
(81
|
)
|
|
(52
|
)
|
|||||
Net income – Praxair, Inc.
|
$
|
1,500
|
|
|
$
|
1,547
|
|
|
$
|
1,694
|
|
|
$
|
1,755
|
|
|
$
|
1,692
|
|
Per Share Data – Praxair, Inc. Shareholders
|
|
|
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|
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||||||||||
Basic earnings per share
|
$
|
5.25
|
|
|
$
|
5.39
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|
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$
|
5.79
|
|
|
$
|
5.94
|
|
|
$
|
5.67
|
|
Diluted earnings per share
|
$
|
5.21
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|
|
$
|
5.35
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|
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$
|
5.73
|
|
|
$
|
5.87
|
|
|
$
|
5.61
|
|
Cash dividends per share
|
$
|
3.00
|
|
|
$
|
2.86
|
|
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$
|
2.60
|
|
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$
|
2.40
|
|
|
$
|
2.20
|
|
Weighted Average Shares Outstanding (000’s)
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic shares outstanding
|
285,677
|
|
|
287,005
|
|
|
292,494
|
|
|
295,523
|
|
|
298,316
|
|
|||||
Diluted shares outstanding
|
287,757
|
|
|
289,055
|
|
|
295,608
|
|
|
298,965
|
|
|
301,845
|
|
|||||
Other Information and Ratios
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
19,332
|
|
|
$
|
18,319
|
|
|
$
|
19,769
|
|
|
$
|
20,223
|
|
|
$
|
18,062
|
|
Total debt
|
$
|
9,515
|
|
|
$
|
9,231
|
|
|
$
|
9,225
|
|
|
$
|
8,779
|
|
|
$
|
7,334
|
|
Net debt (b)
|
$
|
8,991
|
|
|
$
|
9,084
|
|
|
$
|
9,099
|
|
|
$
|
8,641
|
|
|
$
|
7,177
|
|
Cash flow from operations (c)
|
$
|
2,773
|
|
|
$
|
2,695
|
|
|
$
|
2,887
|
|
|
$
|
2,936
|
|
|
$
|
2,774
|
|
Net cash used for investing activities
|
$
|
(1,770
|
)
|
|
$
|
(1,303
|
)
|
|
$
|
(1,803
|
)
|
|
$
|
(3,237
|
)
|
|
$
|
(2,378
|
)
|
Net cash used for financing activities (c)
|
$
|
(643
|
)
|
|
$
|
(1,310
|
)
|
|
$
|
(1,027
|
)
|
|
$
|
309
|
|
|
$
|
(325
|
)
|
Adjusted EBITDA (b)
|
$
|
3,501
|
|
|
$
|
3,642
|
|
|
$
|
3,958
|
|
|
$
|
3,804
|
|
|
$
|
3,537
|
|
Capital expenditures
|
$
|
1,465
|
|
|
$
|
1,541
|
|
|
$
|
1,689
|
|
|
$
|
2,020
|
|
|
$
|
2,180
|
|
Acquisitions, net of cash acquired
|
$
|
363
|
|
|
$
|
82
|
|
|
$
|
206
|
|
|
$
|
1,323
|
|
|
$
|
280
|
|
After-tax return on capital (b)
|
12.0
|
%
|
|
12.6
|
%
|
|
12.7
|
%
|
|
12.8
|
%
|
|
13.9
|
%
|
|||||
Return on equity (b)
|
31.9
|
%
|
|
34.6
|
%
|
|
28.7
|
%
|
|
28.6
|
%
|
|
28.9
|
%
|
|||||
Debt-to-capital ratio (b)
|
62.3
|
%
|
|
64.9
|
%
|
|
59.5
|
%
|
|
54.2
|
%
|
|
51.8
|
%
|
|||||
Debt-to-adjusted EBITDA (b)
|
2.6
|
|
|
2.5
|
|
|
2.3
|
|
|
2.2
|
|
|
1.9
|
|
|||||
Shares outstanding (000’s)
|
284,901
|
|
|
284,879
|
|
|
289,262
|
|
|
294,134
|
|
|
296,229
|
|
|||||
Number of employees
|
26,498
|
|
|
26,657
|
|
|
27,780
|
|
|
27,560
|
|
|
26,539
|
|
(a)
|
Amounts for 2016 include: (i) a $16 million charge to interest expense ($10 million after–tax, or $0.04 per diluted share) related to the redemption of the $325 million 5.20% notes due 2017, (ii) a pre–tax pension settlement charge of $4 million ($3 million after–tax, or $0.01 per diluted share) related to lump sum benefit payments made from the U.S. supplemental pension plan, and (iii) pre–tax charges of $96 million ($63 million after–tax and non–controlling interests, or $0.22 per diluted share) primarily related to cost reduction actions.
|
(c)
|
During 2016, Praxair adopted the FASB's standard for Improvements to Employee Share-Based Payment Accounting. As a result of the standard, withholding tax payments related to stock compensation are required to be presented as financing versus operating cash flows on a retrospective basis (see Note 1 to the consolidated financial statements).
|
|
Page
|
Business Overview
|
|
Executive Summary – Financial Results & Outlook
|
|
Consolidated Results and Other Information
|
|
Segment Discussion
|
|
Liquidity, Capital Resources and Other Financial Data
|
|
Contractual Obligations
|
|
Off-Balance Sheet Arrangements
|
|
Critical Accounting Policies
|
|
New Accounting Standards
|
|
Fair Value Measurements
|
|
Non-GAAP Financial Measures
|
|
Forward-Looking Statements
|
North America
|
|
South America
|
|
Europe
|
|
Asia
|
United States
|
|
Brazil
|
|
Spain
|
|
China
|
Canada
|
|
|
|
Italy
|
|
India
|
Mexico
|
|
|
|
Germany/Benelux
|
|
Korea
|
|
|
|
|
Scandinavia
|
|
Thailand
|
•
|
Sales of
$10,534 million
were 2% below
2015
sales of
$10,776 million
. Excluding negative currency impacts which reduced sales by 3%, and lower cost pass-through, sales were 2% above the prior year due to growth from positive price, new project start-ups and acquisitions. These increases were partially offset by lower base volumes primarily in North America due to weaker upstream energy and manufacturing end-markets.
|
•
|
Reported operating profit of $
2,238 million
was 4% below
2015
. Adjusted operating profit of
$2,338 million
was 6% below adjusted operating profit in
2015
, and 3% below the prior year excluding negative currency translation. Benefits from project start-ups, acquisitions net of divestitures, higher price, and cost reduction programs were more than offset by the impact of lower base volumes.*
|
•
|
Reported net income – Praxair, Inc. of
$1,500 million
and diluted earnings per share of
$5.21
decreased from
$1,547 million
and
$5.35
, respectively, in
2015
. Adjusted net income – Praxair, Inc. of
$1,576 million
and adjusted diluted earnings per share of
$5.48
were both
6%
below
2015
adjusted amounts.*
|
•
|
Cash flow from operations was a strong $
2,773 million
, 26% of sales. Capital expenditures were $1,465 million and acquisitions, net of cash acquired were $363 million primarily for investments in growth and density; dividends paid were $856 million; and net common stock purchases were $89 million.
|
•
|
We announced a non-binding agreement in principle to merge with Linde AG.
|
•
|
Diluted earnings per share are forecasted to be in the range of $5.45 to $5.80. 2017 EPS guidance does not include transaction costs related to the potential Linde merger.
|
•
|
Effective tax rate of approximately 28%.
|
•
|
Capital expenditures of approximately $1.4 billion.
|
•
|
The company’s core business is to build, own, and operate industrial gas plants in order to supply atmospheric and process gases to customers. As such, Praxair believes that its project backlog is one indicator of future sales growth. At December 31,
2016
, Praxair’s backlog of 16 large projects under construction was $1.5 billion. This represents the total estimated capital cost of large plants under construction. North America represents about 80 percent of the backlog, with the majority located in the U.S. Gulf Coast. The remaining backlog resides in Asia, Europe, and South America. These plants will supply customers in the energy, chemical, manufacturing, electronics and metals markets.
|
|
|
|
|
|
|
|
Variance
|
||||||||||
(Dollar amounts in millions, except per share data)
Year Ended December 31,
|
2016
|
|
2015
|
|
2014
|
|
2016 vs. 2015
|
|
2015 vs. 2014
|
||||||||
Reported Amounts:
|
|
|
|
|
|
|
|
|
|
||||||||
Sales
|
$
|
10,534
|
|
|
$
|
10,776
|
|
|
$
|
12,273
|
|
|
(2
|
)%
|
|
(12
|
)%
|
Cost of sales, exclusive of depreciation and amortization
|
$
|
5,860
|
|
|
$
|
5,960
|
|
|
$
|
6,962
|
|
|
(2
|
)%
|
|
(14
|
)%
|
Gross margin (a)
|
$
|
4,674
|
|
|
$
|
4,816
|
|
|
$
|
5,311
|
|
|
(3
|
)%
|
|
(9
|
)%
|
As a percent of sales
|
44.4
|
%
|
|
44.7
|
%
|
|
43.3
|
%
|
|
|
|
|
|||||
Selling, general and administrative
|
$
|
1,145
|
|
|
$
|
1,152
|
|
|
$
|
1,308
|
|
|
(1
|
)%
|
|
(12
|
)%
|
As a percent of sales
|
10.9
|
%
|
|
10.7
|
%
|
|
10.7
|
%
|
|
|
|
|
|||||
Depreciation and amortization
|
$
|
1,122
|
|
|
$
|
1,106
|
|
|
$
|
1,170
|
|
|
1
|
%
|
|
(5
|
)%
|
Cost reduction program and other charges (b)
|
$
|
100
|
|
|
$
|
172
|
|
|
$
|
138
|
|
|
|
|
|
||
Other income (expense) – net
|
$
|
23
|
|
|
$
|
28
|
|
|
$
|
9
|
|
|
|
|
|
||
Operating profit
|
$
|
2,238
|
|
|
$
|
2,321
|
|
|
$
|
2,608
|
|
|
(4
|
)%
|
|
(11
|
)%
|
Operating margin
|
21.2
|
%
|
|
21.5
|
%
|
|
21.2
|
%
|
|
|
|
|
|||||
Interest expense – net
|
$
|
190
|
|
|
$
|
161
|
|
|
$
|
213
|
|
|
18
|
%
|
|
(24
|
)%
|
Effective tax rate
|
26.9
|
%
|
|
28.3
|
%
|
|
28.9
|
%
|
|
|
|
|
|||||
Income from equity investments
|
$
|
41
|
|
|
$
|
43
|
|
|
$
|
42
|
|
|
(5
|
)%
|
|
2
|
%
|
Noncontrolling interests
|
$
|
(38
|
)
|
|
$
|
(44
|
)
|
|
$
|
(52
|
)
|
|
(14
|
)%
|
|
(15
|
)%
|
Net income – Praxair, Inc.
|
$
|
1,500
|
|
|
$
|
1,547
|
|
|
$
|
1,694
|
|
|
(3
|
)%
|
|
(9
|
)%
|
Diluted earnings per share
|
$
|
5.21
|
|
|
$
|
5.35
|
|
|
$
|
5.73
|
|
|
(3
|
)%
|
|
(7
|
)%
|
Diluted shares outstanding
|
287,757
|
|
|
289,055
|
|
|
295,608
|
|
|
—
|
%
|
|
(2
|
)%
|
|||
Number of employees
|
26,498
|
|
|
26,657
|
|
|
27,780
|
|
|
|
|
|
|||||
Adjusted Amounts (c):
|
|
|
|
|
|
|
|
|
|
||||||||
Operating profit
|
$
|
2,338
|
|
|
$
|
2,493
|
|
|
$
|
2,746
|
|
|
(6
|
)%
|
|
(9
|
)%
|
Operating margin
|
22.2
|
%
|
|
23.1
|
%
|
|
22.4
|
%
|
|
|
|
|
|||||
Interest expense – net
|
$
|
174
|
|
|
$
|
161
|
|
|
$
|
177
|
|
|
8
|
%
|
|
(9
|
)%
|
Effective tax rate
|
27.1
|
%
|
|
28.0
|
%
|
|
27.5
|
%
|
|
|
|
|
|||||
Noncontrolling interests
|
$
|
(43
|
)
|
|
$
|
(45
|
)
|
|
$
|
(52
|
)
|
|
(4
|
)%
|
|
(13
|
)%
|
Net income – Praxair, Inc.
|
$
|
1,576
|
|
|
$
|
1,677
|
|
|
$
|
1,852
|
|
|
(6
|
)%
|
|
(9
|
)%
|
Diluted earnings per share
|
$
|
5.48
|
|
|
$
|
5.80
|
|
|
$
|
6.27
|
|
|
(6
|
)%
|
|
(7
|
)%
|
(a)
|
Gross margin excludes depreciation and amortization expense.
|
(b)
|
See Note 2 to the consolidated financial statements.
|
(c)
|
Adjusted amounts are non-GAAP measures. A reconciliation of reported amounts to adjusted amounts can be found in the “Non-GAAP Financial Measures” section of this MD&A. See Notes 2, 5, 11 and 16 to the consolidated financial statements.
|
|
|
2016 vs. 2015
|
|
2015 vs. 2014
|
||||||||
|
|
% Change
|
|
% Change
|
||||||||
|
|
Sales
|
|
Operating Profit
|
|
Sales
|
|
Operating Profit
|
||||
Factors Contributing to Changes
|
|
|
|
|
|
|
|
|
||||
Volume
|
|
—
|
%
|
|
(5
|
)%
|
|
(2
|
)%
|
|
(5
|
)%
|
Price/Mix
|
|
1
|
%
|
|
3
|
%
|
|
1
|
%
|
|
6
|
%
|
Cost pass-through
|
|
(1
|
)%
|
|
—
|
%
|
|
(2
|
)%
|
|
—
|
%
|
Currency
|
|
(3
|
)%
|
|
(3
|
)%
|
|
(10
|
)%
|
|
(10
|
)%
|
Acquisitions/Divestitures
|
|
1
|
%
|
|
—
|
%
|
|
1
|
%
|
|
—
|
%
|
Other
|
|
—
|
%
|
|
1
|
%
|
|
—
|
%
|
|
(2
|
)%
|
Reported
|
|
(2
|
)%
|
|
(4
|
)%
|
|
(12
|
)%
|
|
(11
|
)%
|
Add: Cost reduction program and other charges and pension settlement
|
|
—
|
%
|
|
(2
|
)%
|
|
—
|
%
|
|
2
|
%
|
Adjusted
|
|
(2
|
)%
|
|
(6
|
)%
|
|
(12
|
)%
|
|
(9
|
)%
|
|
|
|
|
|
|||||||||||
|
|
% of Sales
|
|
% Change*
|
|||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
2016 vs. 2015
|
|
2015 vs. 2014
|
|||||
Sales by End-Markets
|
|
|
|
|
|
|
|
|
|
|
|||||
Manufacturing
|
|
23
|
%
|
|
24
|
%
|
|
24
|
%
|
|
(5
|
)%
|
|
(4
|
)%
|
Metals
|
|
17
|
%
|
|
17
|
%
|
|
17
|
%
|
|
4
|
%
|
|
(2
|
)%
|
Energy
|
|
12
|
%
|
|
13
|
%
|
|
14
|
%
|
|
(6
|
)%
|
|
(2
|
)%
|
Chemicals
|
|
10
|
%
|
|
10
|
%
|
|
10
|
%
|
|
—
|
%
|
|
(3
|
)%
|
Electronics
|
|
8
|
%
|
|
8
|
%
|
|
7
|
%
|
|
2
|
%
|
|
5
|
%
|
Healthcare
|
|
8
|
%
|
|
8
|
%
|
|
8
|
%
|
|
6
|
%
|
|
4
|
%
|
Food & Beverage
|
|
9
|
%
|
|
9
|
%
|
|
8
|
%
|
|
7
|
%
|
|
7
|
%
|
Aerospace
|
|
3
|
%
|
|
3
|
%
|
|
3
|
%
|
|
2
|
%
|
|
3
|
%
|
Other
|
|
10
|
%
|
|
8
|
%
|
|
9
|
%
|
|
1
|
%
|
|
(8
|
)%
|
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
|
% of Sales
|
|||||||
|
|
2016
|
|
2015
|
|
2014
|
|||
Sales by Distribution Method
|
|
|
|
|
|
|
|||
On-Site
|
|
29
|
%
|
|
29
|
%
|
|
29
|
%
|
Merchant
|
|
35
|
%
|
|
34
|
%
|
|
34
|
%
|
Packaged Gas
|
|
28
|
%
|
|
28
|
%
|
|
28
|
%
|
Other
|
|
8
|
%
|
|
9
|
%
|
|
9
|
%
|
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
(Dollar amounts in millions)
Year Ended December 31,
|
|
|
Variance*
|
||||||||||||||
2016
|
|
2015
|
|
2014
|
|
2016 vs. 2015
|
|
2015 vs. 2014
|
|||||||||
Sales
|
|
|
|
|
|
|
|
|
|
||||||||
North America
|
$
|
5,592
|
|
|
$
|
5,865
|
|
|
$
|
6,436
|
|
|
(5
|
)%
|
|
(9
|
)%
|
Europe
|
1,392
|
|
|
1,320
|
|
|
1,546
|
|
|
5
|
%
|
|
(15
|
)%
|
|||
South America
|
1,399
|
|
|
1,431
|
|
|
1,993
|
|
|
(2
|
)%
|
|
(28
|
)%
|
|||
Asia
|
1,555
|
|
|
1,551
|
|
|
1,619
|
|
|
—
|
%
|
|
(4
|
)%
|
|||
Surface Technologies
|
596
|
|
|
609
|
|
|
679
|
|
|
(2
|
)%
|
|
(10
|
)%
|
|||
|
$
|
10,534
|
|
|
$
|
10,776
|
|
|
$
|
12,273
|
|
|
(2
|
)%
|
|
(12
|
)%
|
Operating Profit
|
|
|
|
|
|
|
|
|
|
||||||||
North America
|
$
|
1,430
|
|
|
$
|
1,558
|
|
|
$
|
1,580
|
|
|
(8
|
)%
|
|
(1
|
)%
|
Europe
|
273
|
|
|
250
|
|
|
291
|
|
|
9
|
%
|
|
(14
|
)%
|
|||
South America
|
257
|
|
|
291
|
|
|
449
|
|
|
(12
|
)%
|
|
(35
|
)%
|
|||
Asia
|
276
|
|
|
289
|
|
|
303
|
|
|
(4
|
)%
|
|
(5
|
)%
|
|||
Surface Technologies
|
102
|
|
|
105
|
|
|
123
|
|
|
(3
|
)%
|
|
(15
|
)%
|
|||
Segment operating profit
|
2,338
|
|
|
2,493
|
|
|
2,746
|
|
|
(6
|
)%
|
|
(9
|
)%
|
|||
Cost reduction program and other charges
|
(100
|
)
|
|
(172
|
)
|
|
(138
|
)
|
|
|
|
|
|||||
Consolidated operating profit
|
$
|
2,238
|
|
|
$
|
2,321
|
|
|
$
|
2,608
|
|
|
|
|
|
(Dollar amounts in millions)
Year Ended December 31,
|
|
|
Variance
|
||||||||||||||
2016
|
|
2015
|
|
2014
|
|
2016 vs. 2015
|
|
2015 vs. 2014
|
|||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Sales
|
$
|
5,592
|
|
|
$
|
5,865
|
|
|
$
|
6,436
|
|
|
(5
|
)%
|
|
(9
|
)%
|
Cost of sales, exclusive of depreciation and amortization
|
2,872
|
|
|
3,028
|
|
|
3,514
|
|
|
|
|
|
|||||
Gross margin
|
2,720
|
|
|
2,837
|
|
|
2,922
|
|
|
|
|
|
|||||
Operating expenses
|
676
|
|
|
670
|
|
|
731
|
|
|
|
|
|
|||||
Depreciation and amortization
|
614
|
|
|
609
|
|
|
611
|
|
|
|
|
|
|||||
Operating profit
|
$
|
1,430
|
|
|
$
|
1,558
|
|
|
$
|
1,580
|
|
|
(8
|
)%
|
|
(1
|
)%
|
Operating margin
|
25.6
|
%
|
|
26.6
|
%
|
|
24.5
|
%
|
|
|
|
|
|
|
2016 vs. 2015
|
|
2015 vs. 2014
|
||||||||
|
|
% Change
|
|
% Change
|
||||||||
|
|
Sales
|
|
Operating Profit
|
|
Sales
|
|
Operating Profit
|
||||
Factors Contributing to Changes
|
|
|
|
|
|
|
|
|
||||
Volume
|
|
(3
|
)%
|
|
(6
|
)%
|
|
(3
|
)%
|
|
(4
|
)%
|
Price/Mix
|
|
1
|
%
|
|
3
|
%
|
|
1
|
%
|
|
3
|
%
|
Cost pass-through
|
|
(1
|
)%
|
|
—
|
%
|
|
(4
|
)%
|
|
—
|
%
|
Currency
|
|
(2
|
)%
|
|
(2
|
)%
|
|
(3
|
)%
|
|
(4
|
)%
|
Acquisitions/Divestitures
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Other
|
|
—
|
%
|
|
(3
|
)%
|
|
—
|
%
|
|
4
|
%
|
|
|
(5
|
)%
|
|
(8
|
)%
|
|
(9
|
)%
|
|
(1
|
)%
|
|
|
|
|
|
|||||||||||
|
|
% of Sales
|
|
% Change*
|
|||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
2016 vs. 2015
|
|
2015 vs. 2014
|
|||||
Sales by End-Markets
|
|
|
|
|
|
|
|
|
|
|
|||||
Manufacturing
|
|
29
|
%
|
|
30
|
%
|
|
30
|
%
|
|
(5
|
)%
|
|
(4
|
)%
|
Metals
|
|
12
|
%
|
|
11
|
%
|
|
12
|
%
|
|
(1
|
)%
|
|
(11
|
)%
|
Energy
|
|
17
|
%
|
|
18
|
%
|
|
20
|
%
|
|
(6
|
)%
|
|
—
|
%
|
Chemicals
|
|
9
|
%
|
|
10
|
%
|
|
10
|
%
|
|
(8
|
)%
|
|
(6
|
)%
|
Electronics
|
|
5
|
%
|
|
5
|
%
|
|
4
|
%
|
|
(4
|
)%
|
|
15
|
%
|
Healthcare
|
|
7
|
%
|
|
7
|
%
|
|
7
|
%
|
|
2
|
%
|
|
4
|
%
|
Food & Beverage
|
|
10
|
%
|
|
9
|
%
|
|
8
|
%
|
|
6
|
%
|
|
6
|
%
|
Aerospace
|
|
2
|
%
|
|
2
|
%
|
|
1
|
%
|
|
(1
|
)%
|
|
3
|
%
|
Other
|
|
9
|
%
|
|
8
|
%
|
|
8
|
%
|
|
5
|
%
|
|
(4
|
)%
|
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
|
% of Sales
|
|||||||
|
|
2016
|
|
2015
|
|
2014
|
|||
Sales by Distribution Method
|
|
|
|
|
|
|
|||
On-Site
|
|
28
|
%
|
|
28
|
%
|
|
30
|
%
|
Merchant
|
|
38
|
%
|
|
38
|
%
|
|
36
|
%
|
Packaged Gas
|
|
31
|
%
|
|
32
|
%
|
|
32
|
%
|
Other
|
|
3
|
%
|
|
2
|
%
|
|
2
|
%
|
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
(Dollar amounts in millions)
Year Ended December 31,
|
|
|
Variance
|
||||||||||||||
2016
|
|
2015
|
|
2014
|
|
2016 vs. 2015
|
|
2015 vs. 2014
|
|||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Sales
|
$
|
1,392
|
|
|
$
|
1,320
|
|
|
$
|
1,546
|
|
|
5
|
%
|
|
(15
|
)%
|
Cost of sales, exclusive of depreciation and amortization
|
775
|
|
|
749
|
|
|
868
|
|
|
|
|
|
|||||
Gross margin
|
617
|
|
|
571
|
|
|
678
|
|
|
|
|
|
|||||
Operating expenses
|
189
|
|
|
176
|
|
|
219
|
|
|
|
|
|
|||||
Depreciation and amortization
|
155
|
|
|
145
|
|
|
168
|
|
|
|
|
|
|||||
Operating profit
|
$
|
273
|
|
|
$
|
250
|
|
|
$
|
291
|
|
|
9
|
%
|
|
(14
|
)%
|
Operating margin
|
19.6
|
%
|
|
18.9
|
%
|
|
18.8
|
%
|
|
|
|
|
|
|
2016 vs. 2015
|
|
2015 vs. 2014
|
||||||||
|
|
% Change
|
|
% Change
|
||||||||
|
|
Sales
|
|
Operating Profit
|
|
Sales
|
|
Operating Profit
|
||||
Factors Contributing to Changes
|
|
|
|
|
|
|
|
|
||||
Volume
|
|
1
|
%
|
|
—
|
%
|
|
1
|
%
|
|
1
|
%
|
Price/Mix
|
|
—
|
%
|
|
1
|
%
|
|
1
|
%
|
|
3
|
%
|
Cost pass-through
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Currency
|
|
(1
|
)%
|
|
(1
|
)%
|
|
(17
|
)%
|
|
(17
|
)%
|
Acquisitions/Divestitures
|
|
5
|
%
|
|
3
|
%
|
|
—
|
%
|
|
—
|
%
|
Other
|
|
—
|
%
|
|
6
|
%
|
|
—
|
%
|
|
(1
|
)%
|
|
|
5
|
%
|
|
9
|
%
|
|
(15
|
)%
|
|
(14
|
)%
|
|
|
|
|
|
|||||||||||
|
|
% of Sales
|
|
% Change*
|
|||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
2016 vs. 2015
|
|
2015 vs. 2014
|
|||||
Sales by End-Markets
|
|
|
|
|
|
|
|
|
|
|
|||||
Manufacturing
|
|
21
|
%
|
|
22
|
%
|
|
22
|
%
|
|
(2
|
)%
|
|
4
|
%
|
Metals
|
|
16
|
%
|
|
17
|
%
|
|
16
|
%
|
|
—
|
%
|
|
9
|
%
|
Energy
|
|
5
|
%
|
|
6
|
%
|
|
7
|
%
|
|
(9
|
)%
|
|
(17
|
)%
|
Chemicals
|
|
14
|
%
|
|
14
|
%
|
|
15
|
%
|
|
1
|
%
|
|
(2
|
)%
|
Electronics
|
|
7
|
%
|
|
7
|
%
|
|
7
|
%
|
|
6
|
%
|
|
4
|
%
|
Healthcare
|
|
11
|
%
|
|
11
|
%
|
|
11
|
%
|
|
4
|
%
|
|
—
|
%
|
Food & Beverage
|
|
12
|
%
|
|
10
|
%
|
|
9
|
%
|
|
5
|
%
|
|
8
|
%
|
Aerospace
|
|
1
|
%
|
|
1
|
%
|
|
—
|
%
|
|
5
|
%
|
|
35
|
%
|
Other
|
|
13
|
%
|
|
12
|
%
|
|
13
|
%
|
|
6
|
%
|
|
(1
|
)%
|
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
|
% of Sales
|
|||||||
|
|
2016
|
|
2015
|
|
2014
|
|||
Sales by Distribution Method
|
|
|
|
|
|
|
|||
On-Site
|
|
19
|
%
|
|
20
|
%
|
|
19
|
%
|
Merchant
|
|
35
|
%
|
|
34
|
%
|
|
35
|
%
|
Packaged Gas
|
|
42
|
%
|
|
42
|
%
|
|
43
|
%
|
Other
|
|
4
|
%
|
|
4
|
%
|
|
3
|
%
|
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
(Dollar amounts in millions)
Year Ended December 31,
|
|
|
Variance
|
||||||||||||||
2016
|
|
2015
|
|
2014
|
|
2016 vs. 2015
|
|
2015 vs. 2014
|
|||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Sales
|
$
|
1,399
|
|
|
$
|
1,431
|
|
|
$
|
1,993
|
|
|
(2
|
)%
|
|
(28
|
)%
|
Cost of sales, exclusive of depreciation and amortization
|
828
|
|
|
809
|
|
|
1,101
|
|
|
|
|
|
|||||
Gross margin
|
571
|
|
|
622
|
|
|
892
|
|
|
|
|
|
|||||
Operating expenses
|
181
|
|
|
196
|
|
|
266
|
|
|
|
|
|
|||||
Depreciation and amortization
|
133
|
|
|
135
|
|
|
177
|
|
|
|
|
|
|||||
Operating profit
|
$
|
257
|
|
|
$
|
291
|
|
|
$
|
449
|
|
|
(12
|
)%
|
|
(35
|
)%
|
Operating margin
|
18.4
|
%
|
|
20.3
|
%
|
|
22.5
|
%
|
|
|
|
|
|
|
2016 vs. 2015
|
|
2015 vs. 2014
|
||||||||
|
|
% Change
|
|
% Change
|
||||||||
|
|
Sales
|
|
Operating Profit
|
|
Sales
|
|
Operating Profit
|
||||
Factors Contributing to Changes
|
|
|
|
|
|
|
|
|
||||
Volume
|
|
2
|
%
|
|
(2
|
)%
|
|
(4
|
)%
|
|
(10
|
)%
|
Price/Mix
|
|
4
|
%
|
|
17
|
%
|
|
5
|
%
|
|
22
|
%
|
Cost pass-through
|
|
—
|
%
|
|
—
|
%
|
|
1
|
%
|
|
—
|
%
|
Currency
|
|
(8
|
)%
|
|
(9
|
)%
|
|
(30
|
)%
|
|
(31
|
)%
|
Acquisitions/Divestitures
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Other
|
|
—
|
%
|
|
(18
|
)%
|
|
—
|
%
|
|
(16
|
)%
|
|
|
(2
|
)%
|
|
(12
|
)%
|
|
(28
|
)%
|
|
(35
|
)%
|
|
|
|
|
|
|||||||||||
|
|
% of Sales
|
|
% Change*
|
|||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
2016 vs. 2015
|
|
2015 vs. 2014
|
|||||
Sales by End-Markets
|
|
|
|
|
|
|
|
|
|
|
|||||
Manufacturing
|
|
18
|
%
|
|
21
|
%
|
|
21
|
%
|
|
(10
|
)%
|
|
(3
|
)%
|
Metals
|
|
31
|
%
|
|
28
|
%
|
|
27
|
%
|
|
14
|
%
|
|
2
|
%
|
Energy
|
|
2
|
%
|
|
2
|
%
|
|
2
|
%
|
|
16
|
%
|
|
6
|
%
|
Chemicals
|
|
9
|
%
|
|
9
|
%
|
|
9
|
%
|
|
1
|
%
|
|
1
|
%
|
Electronics
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Healthcare
|
|
19
|
%
|
|
18
|
%
|
|
18
|
%
|
|
13
|
%
|
|
7
|
%
|
Food & Beverage
|
|
13
|
%
|
|
13
|
%
|
|
13
|
%
|
|
12
|
%
|
|
6
|
%
|
Aerospace
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Other
|
|
8
|
%
|
|
9
|
%
|
|
10
|
%
|
|
(5
|
)%
|
|
(8
|
)%
|
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
|
% of Sales
|
|||||||
|
|
2016
|
|
2015
|
|
2014
|
|||
Sales by Distribution Method
|
|
|
|
|
|
|
|||
On-Site
|
|
31
|
%
|
|
28
|
%
|
|
26
|
%
|
Merchant
|
|
40
|
%
|
|
41
|
%
|
|
43
|
%
|
Packaged Gas
|
|
27
|
%
|
|
29
|
%
|
|
29
|
%
|
Other
|
|
2
|
%
|
|
2
|
%
|
|
2
|
%
|
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
(Dollar amounts in millions)
Year Ended December 31,
|
|
|
Variance
|
||||||||||||||
2016
|
|
2015
|
|
2014
|
|
2016 vs. 2015
|
|
2015 vs. 2014
|
|||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Sales
|
$
|
1,555
|
|
|
$
|
1,551
|
|
|
$
|
1,619
|
|
|
—
|
%
|
|
(4
|
)%
|
Cost of sales, exclusive of depreciation and amortization
|
998
|
|
|
977
|
|
|
1,041
|
|
|
|
|
|
|||||
Gross margin
|
557
|
|
|
574
|
|
|
578
|
|
|
|
|
|
|||||
Operating expenses
|
102
|
|
|
109
|
|
|
105
|
|
|
|
|
|
|||||
Depreciation and amortization
|
179
|
|
|
176
|
|
|
170
|
|
|
|
|
|
|||||
Operating profit
|
$
|
276
|
|
|
$
|
289
|
|
|
$
|
303
|
|
|
(4
|
)%
|
|
(5
|
)%
|
Operating margin
|
17.7
|
%
|
|
18.6
|
%
|
|
18.7
|
%
|
|
|
|
|
|
|
2016 vs. 2015
|
|
2015 vs. 2014
|
||||||||
|
|
% Change
|
|
% Change
|
||||||||
|
|
Sales
|
|
Operating Profit
|
|
Sales
|
|
Operating Profit
|
||||
Factors Contributing to Changes
|
|
|
|
|
|
|
|
|
||||
Volume / Equipment
|
|
5
|
%
|
|
2
|
%
|
|
(1
|
)%
|
|
(4
|
)%
|
Price/Mix
|
|
(1
|
)%
|
|
(6
|
)%
|
|
—
|
%
|
|
1
|
%
|
Cost pass-through
|
|
1
|
%
|
|
—
|
%
|
|
(2
|
)%
|
|
—
|
%
|
Currency
|
|
(4
|
)%
|
|
(4
|
)%
|
|
(3
|
)%
|
|
(4
|
)%
|
Acquisitions / Divestitures
|
|
(1
|
)%
|
|
—
|
%
|
|
2
|
%
|
|
1
|
%
|
Other
|
|
—
|
%
|
|
4
|
%
|
|
—
|
%
|
|
1
|
%
|
|
|
—
|
%
|
|
(4
|
)%
|
|
(4
|
)%
|
|
(5
|
)%
|
|
|
|
|
|
|||||||||||
|
|
% of Sales
|
|
% Change*
|
|||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
2016 vs. 2015
|
|
2015 vs. 2014
|
|||||
Sales by End-Markets
|
|
|
|
|
|
|
|
|
|
|
|||||
Manufacturing
|
|
9
|
%
|
|
9
|
%
|
|
10
|
%
|
|
(8
|
)%
|
|
(10
|
)%
|
Metals
|
|
28
|
%
|
|
29
|
%
|
|
28
|
%
|
|
5
|
%
|
|
3
|
%
|
Energy
|
|
3
|
%
|
|
3
|
%
|
|
3
|
%
|
|
(3
|
)%
|
|
9
|
%
|
Chemicals
|
|
14
|
%
|
|
13
|
%
|
|
12
|
%
|
|
19
|
%
|
|
5
|
%
|
Electronics
|
|
33
|
%
|
|
32
|
%
|
|
31
|
%
|
|
4
|
%
|
|
1
|
%
|
Healthcare
|
|
1
|
%
|
|
1
|
%
|
|
1
|
%
|
|
8
|
%
|
|
(9
|
)%
|
Food & Beverage
|
|
2
|
%
|
|
2
|
%
|
|
2
|
%
|
|
6
|
%
|
|
6
|
%
|
Aerospace
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Other
|
|
10
|
%
|
|
11
|
%
|
|
13
|
%
|
|
(2
|
)%
|
|
(21
|
)%
|
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
|
% of Sales
|
|||||||
|
|
2016
|
|
2015
|
|
2014
|
|||
Sales by Distribution Method
|
|
|
|
|
|
|
|||
On-Site
|
|
50
|
%
|
|
50
|
%
|
|
51
|
%
|
Merchant
|
|
29
|
%
|
|
30
|
%
|
|
29
|
%
|
Packaged Gas
|
|
14
|
%
|
|
13
|
%
|
|
12
|
%
|
Other
|
|
7
|
%
|
|
7
|
%
|
|
8
|
%
|
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
(Dollar amounts in millions)
Year Ended December 31,
|
|
|
Variance
|
||||||||||||||
2016
|
|
2015
|
|
2014
|
|
2016 vs. 2015
|
|
2015 vs. 2014
|
|||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Sales
|
$
|
596
|
|
|
$
|
609
|
|
|
$
|
679
|
|
|
(2
|
)%
|
|
(10
|
)%
|
Cost of sales, exclusive of depreciation and amortization
|
388
|
|
|
397
|
|
|
438
|
|
|
|
|
|
|||||
Gross margin
|
208
|
|
|
212
|
|
|
241
|
|
|
|
|
|
|||||
Operating expenses
|
66
|
|
|
66
|
|
|
75
|
|
|
|
|
|
|||||
Depreciation and amortization
|
40
|
|
|
41
|
|
|
43
|
|
|
|
|
|
|||||
Operating profit
|
$
|
102
|
|
|
$
|
105
|
|
|
$
|
123
|
|
|
(3
|
)%
|
|
(15
|
)%
|
Operating margin
|
17.1
|
%
|
|
17.2
|
%
|
|
18.1
|
%
|
|
|
|
|
|
|
2016 vs. 2015
|
|
2015 vs. 2014
|
||||||||
|
|
% Change
|
|
% Change
|
||||||||
|
|
Sales
|
|
Operating Profit
|
|
Sales
|
|
Operating Profit
|
||||
Factors Contributing to Changes
|
|
|
|
|
|
|
|
|
||||
Volume/Price
|
|
(2
|
)%
|
|
(8
|
)%
|
|
(3
|
)%
|
|
(13
|
)%
|
Cost pass-through
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Currency
|
|
(1
|
)%
|
|
(1
|
)%
|
|
(7
|
)%
|
|
(6
|
)%
|
Acquisitions/Divestitures
|
|
1
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Other
|
|
—
|
%
|
|
6
|
%
|
|
—
|
%
|
|
4
|
%
|
|
|
(2
|
)%
|
|
(3
|
)%
|
|
(10
|
)%
|
|
(15
|
)%
|
|
|
|
|
|
|||||||||||
|
|
% of Sales
|
|
% Change*
|
|||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
2016 vs. 2015
|
|
2015 vs. 2014
|
|||||
Sales by End-Markets
|
|
|
|
|
|
|
|
|
|
|
|||||
Manufacturing
|
|
11
|
%
|
|
12
|
%
|
|
13
|
%
|
|
(5
|
)%
|
|
(13
|
)%
|
Metals
|
|
9
|
%
|
|
8
|
%
|
|
8
|
%
|
|
11
|
%
|
|
(3
|
)%
|
Energy
|
|
23
|
%
|
|
25
|
%
|
|
28
|
%
|
|
(10
|
)%
|
|
(12
|
)%
|
Chemicals
|
|
2
|
%
|
|
2
|
%
|
|
2
|
%
|
|
(4
|
)%
|
|
6
|
%
|
Electronics
|
|
1
|
%
|
|
1
|
%
|
|
1
|
%
|
|
17
|
%
|
|
13
|
%
|
Healthcare
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Food & Beverage
|
|
4
|
%
|
|
4
|
%
|
|
3
|
%
|
|
2
|
%
|
|
48
|
%
|
Aerospace
|
|
40
|
%
|
|
37
|
%
|
|
34
|
%
|
|
3
|
%
|
|
3
|
%
|
Other
|
|
10
|
%
|
|
11
|
%
|
|
11
|
%
|
|
(12
|
)%
|
|
(8
|
)%
|
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
Percent of
2016
Consolidated
Sales
|
|
Statements of Income
|
|
Balance Sheets
|
||||||||||||
|
Average Year Ended December 31,
|
|
December 31,
|
||||||||||||||
Currency
|
2016
|
|
2015
|
|
2014
|
|
2016
|
|
2015
|
||||||||
Brazilian real
|
11
|
%
|
|
3.47
|
|
|
3.28
|
|
|
2.35
|
|
|
3.26
|
|
|
3.90
|
|
Euro
|
10
|
%
|
|
0.90
|
|
|
0.90
|
|
|
0.75
|
|
|
0.95
|
|
|
0.92
|
|
Canadian dollar
|
7
|
%
|
|
1.32
|
|
|
1.28
|
|
|
1.10
|
|
|
1.34
|
|
|
1.38
|
|
Chinese yuan
|
6
|
%
|
|
6.64
|
|
|
6.28
|
|
|
6.16
|
|
|
6.95
|
|
|
6.49
|
|
Mexican peso
|
5
|
%
|
|
18.65
|
|
|
15.83
|
|
|
13.30
|
|
|
20.73
|
|
|
17.21
|
|
Korean won
|
4
|
%
|
|
1,160
|
|
|
1,130
|
|
|
1,053
|
|
|
1,206
|
|
|
1,175
|
|
Indian rupee
|
3
|
%
|
|
67.18
|
|
|
64.11
|
|
|
61.03
|
|
|
67.92
|
|
|
66.15
|
|
Argentine peso
|
1
|
%
|
|
14.74
|
|
|
9.22
|
|
|
8.10
|
|
|
15.89
|
|
|
13.04
|
|
British pound
|
1
|
%
|
|
0.74
|
|
|
0.65
|
|
|
0.61
|
|
|
0.81
|
|
|
0.68
|
|
Norwegian krone
|
1
|
%
|
|
8.39
|
|
|
8.05
|
|
|
6.28
|
|
|
8.64
|
|
|
8.84
|
|
(a)
|
See Note 2 to the consolidated financial statements.
|
(b)
|
Non-GAAP measures. See the “Non-GAAP Financial Measures” section for definitions and reconciliations to reported amounts.
|
(c)
|
During 2016, Praxair adopted the FASB's Improvements to Employee Share-Based Payment Accounting standard. As a result of the standard, withholding tax payments related to stock compensation are required to be presented as financing versus operating cash flows on a retrospective basis (see Note 1 to the consolidated financial statements).
|
(Millions of dollars)
|
Due or expiring by December 31,
|
||||||||||||||||||||||||||
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Thereafter
|
|
Total
|
||||||||||||||
Long-term debt obligations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Debt and capitalized lease maturities (Note 11)*
|
$
|
164
|
|
|
$
|
985
|
|
|
$
|
1,503
|
|
|
$
|
938
|
|
|
$
|
1,006
|
|
|
$
|
4,485
|
|
|
$
|
9,081
|
|
Contractual interest
|
220
|
|
|
210
|
|
|
185
|
|
|
156
|
|
|
128
|
|
|
701
|
|
|
1,600
|
|
|||||||
Operating leases (Note 4)*
|
117
|
|
|
97
|
|
|
79
|
|
|
65
|
|
|
54
|
|
|
117
|
|
|
529
|
|
|||||||
Retirement obligations
|
38
|
|
|
31
|
|
|
35
|
|
|
32
|
|
|
31
|
|
|
140
|
|
|
307
|
|
|||||||
Unconditional purchase obligations (Note 17)*
|
585
|
|
|
534
|
|
|
476
|
|
|
422
|
|
|
434
|
|
|
2,645
|
|
|
5,096
|
|
|||||||
Construction commitments
(Note 17)*
|
836
|
|
|
271
|
|
|
125
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,232
|
|
|||||||
Total Contractual Obligations
|
$
|
1,960
|
|
|
$
|
2,128
|
|
|
$
|
2,403
|
|
|
$
|
1,613
|
|
|
$
|
1,653
|
|
|
$
|
8,088
|
|
|
$
|
17,845
|
|
(Dollar amounts in millions, except for per share data)
Year ended December 31,
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Performance Measures:
|
|
|
|
|
|
|
|
|
|
||||||||||
After-tax return on capital ("ROC")
|
12.0
|
%
|
|
12.6
|
%
|
|
12.7
|
%
|
|
12.8
|
%
|
|
13.9
|
%
|
|||||
Return on equity ("ROE")
|
31.9
|
%
|
|
34.6
|
%
|
|
28.7
|
%
|
|
28.6
|
%
|
|
28.9
|
%
|
|||||
Debt-to-capital
|
62.3
|
%
|
|
64.9
|
%
|
|
59.5
|
%
|
|
54.2
|
%
|
|
51.8
|
%
|
|||||
Debt-to-adjusted EBITDA
|
2.6
|
|
|
2.5
|
|
|
2.3
|
|
|
2.2
|
|
|
1.9
|
|
|||||
Adjusted Amounts:
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating profit
|
$
|
2,338
|
|
|
$
|
2,493
|
|
|
$
|
2,746
|
|
|
$
|
2,657
|
|
|
$
|
2,502
|
|
Operating margin
|
22.2
|
%
|
|
23.1
|
%
|
|
22.4
|
%
|
|
22.3
|
%
|
|
22.3
|
%
|
|||||
EBITDA
|
$
|
3,501
|
|
|
$
|
3,642
|
|
|
$
|
3,958
|
|
|
$
|
3,804
|
|
|
$
|
3,537
|
|
EBITDA margin
|
33.2
|
%
|
|
33.8
|
%
|
|
32.2
|
%
|
|
31.9
|
%
|
|
31.5
|
%
|
|||||
Interest expense - net
|
$
|
174
|
|
|
$
|
161
|
|
|
$
|
177
|
|
|
$
|
160
|
|
|
$
|
141
|
|
Effective tax rate
|
27.1
|
%
|
|
28.0
|
%
|
|
27.5
|
%
|
|
28.0
|
%
|
|
28.0
|
%
|
|||||
Noncontrolling interests
|
$
|
(43
|
)
|
|
$
|
(45
|
)
|
|
$
|
(52
|
)
|
|
$
|
(65
|
)
|
|
$
|
(54
|
)
|
Net income – Praxair, Inc.
|
$
|
1,576
|
|
|
$
|
1,677
|
|
|
$
|
1,852
|
|
|
$
|
1,772
|
|
|
$
|
1,681
|
|
Diluted earnings per share
|
$
|
5.48
|
|
|
$
|
5.80
|
|
|
$
|
6.27
|
|
|
$
|
5.93
|
|
|
$
|
5.57
|
|
(a)
|
Tax benefit on adjusted interest expense is computed using the effective rate adjusted for non-recurring income tax benefits and charges. The effective tax rates used for all periods was approximately
28%
.
|
(Dollar amounts in millions)
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Year Ended December 31,
|
|
|
|
|
|||||||||||||||
Total debt
|
$
|
9,515
|
|
|
$
|
9,231
|
|
|
$
|
9,225
|
|
|
$
|
8,779
|
|
|
$
|
7,334
|
|
Less: cash and cash equivalents
|
(524
|
)
|
|
(147
|
)
|
|
(126
|
)
|
|
(138
|
)
|
|
(157
|
)
|
|||||
Net debt
|
8,991
|
|
|
9,084
|
|
|
9,099
|
|
|
8,641
|
|
|
7,177
|
|
|||||
Equity and redeemable noncontrolling interests
|
|
|
|
|
|
|
|
|
|
||||||||||
Redeemable noncontrolling interests
|
11
|
|
|
113
|
|
|
176
|
|
|
307
|
|
|
252
|
|
|||||
Praxair, Inc. shareholders’ equity
|
5,021
|
|
|
4,389
|
|
|
5,623
|
|
|
6,609
|
|
|
6,064
|
|
|||||
Noncontrolling interests
|
420
|
|
|
404
|
|
|
387
|
|
|
394
|
|
|
357
|
|
|||||
Total equity and redeemable noncontrolling interests
|
5,452
|
|
|
4,906
|
|
|
6,186
|
|
|
7,310
|
|
|
6,673
|
|
|||||
Total capital
|
$
|
14,443
|
|
|
$
|
13,990
|
|
|
$
|
15,285
|
|
|
$
|
15,951
|
|
|
$
|
13,850
|
|
Debt-to-capital ratio
|
62.3
|
%
|
|
64.9
|
%
|
|
59.5
|
%
|
|
54.2
|
%
|
|
51.8
|
%
|
(Dollar amounts in millions)
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Year Ended December 31,
|
|
|
|
|
|||||||||||||||
Adjusted net income - Praxair, Inc. (see below)
|
$
|
1,576
|
|
|
$
|
1,677
|
|
|
$
|
1,852
|
|
|
$
|
1,772
|
|
|
$
|
1,681
|
|
Add: adjusted noncontrolling interests (see below)
|
43
|
|
|
45
|
|
|
52
|
|
|
65
|
|
|
54
|
|
|||||
Add: adjusted interest expense - net (see below)
|
174
|
|
|
161
|
|
|
177
|
|
|
160
|
|
|
141
|
|
|||||
Add: adjusted income taxes (see below)
|
586
|
|
|
653
|
|
|
707
|
|
|
698
|
|
|
660
|
|
|||||
Add: depreciation and amortization
|
1,122
|
|
|
1,106
|
|
|
1,170
|
|
|
1,109
|
|
|
1,001
|
|
|||||
Adjusted EBITDA
|
$
|
3,501
|
|
|
$
|
3,642
|
|
|
$
|
3,958
|
|
|
$
|
3,804
|
|
|
$
|
3,537
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reported Sales
|
$
|
10,534
|
|
|
$
|
10,776
|
|
|
$
|
12,273
|
|
|
$
|
11,925
|
|
|
$
|
11,224
|
|
Adjusted EBITDA Margin
|
33.2
|
%
|
|
33.8
|
%
|
|
32.2
|
%
|
|
31.9
|
%
|
|
31.5
|
%
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Beginning Praxair, Inc. net debt
|
$
|
9,084
|
|
|
$
|
9,099
|
|
|
$
|
8,641
|
|
|
$
|
7,177
|
|
|
$
|
6,449
|
|
First quarter ending Praxair, Inc. net debt
|
$
|
9,183
|
|
|
$
|
9,243
|
|
|
$
|
9,092
|
|
|
$
|
8,531
|
|
|
$
|
6,724
|
|
Second quarter ending Praxair, Inc. net debt
|
$
|
9,389
|
|
|
$
|
9,177
|
|
|
$
|
8,959
|
|
|
$
|
8,970
|
|
|
$
|
6,868
|
|
Third quarter ending Praxair, Inc. net debt
|
$
|
9,215
|
|
|
$
|
9,344
|
|
|
$
|
8,922
|
|
|
$
|
8,860
|
|
|
$
|
7,003
|
|
Year-End ending Praxair, Inc. net debt
|
$
|
8,991
|
|
|
$
|
9,084
|
|
|
$
|
9,099
|
|
|
$
|
8,641
|
|
|
$
|
7,177
|
|
Five-quarter average Praxair, Inc. net debt
|
$
|
9,172
|
|
|
$
|
9,189
|
|
|
$
|
8,943
|
|
|
$
|
8,436
|
|
|
$
|
6,844
|
|
Debt-to- adjusted EBITDA ratio
|
2.6
|
|
|
2.5
|
|
|
2.3
|
|
|
2.2
|
|
|
1.9
|
|
(Dollar amounts in millions, except per share data)
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Year Ended December 31,
|
|
|
|
|
|||||||||||||||
Adjusted Operating Profit and Margin
|
|
|
|
|
|
|
|
|
|
||||||||||
Reported operating profit
|
$
|
2,238
|
|
|
$
|
2,321
|
|
|
$
|
2,608
|
|
|
$
|
2,625
|
|
|
$
|
2,437
|
|
Add: Pension settlement charge
|
4
|
|
|
7
|
|
|
7
|
|
|
9
|
|
|
9
|
|
|||||
Add: Venezuela currency devaluation
|
—
|
|
|
—
|
|
|
131
|
|
|
23
|
|
|
—
|
|
|||||
Add: Cost reduction program
|
96
|
|
|
165
|
|
|
—
|
|
|
—
|
|
|
56
|
|
|||||
Total adjustments
|
100
|
|
|
172
|
|
|
138
|
|
|
32
|
|
|
65
|
|
|||||
Adjusted operating profit
|
$
|
2,338
|
|
|
$
|
2,493
|
|
|
$
|
2,746
|
|
|
$
|
2,657
|
|
|
$
|
2,502
|
|
Reported percent change
|
(4
|
)%
|
|
(11
|
)%
|
|
(1
|
)%
|
|
8
|
%
|
|
(1
|
)%
|
|||||
Adjusted percent change
|
(6
|
)%
|
|
(9
|
)%
|
|
3
|
%
|
|
6
|
%
|
|
1
|
%
|
|||||
Reported sales
|
$
|
10,534
|
|
|
$
|
10,776
|
|
|
$
|
12,273
|
|
|
$
|
11,925
|
|
|
$
|
11,224
|
|
Reported operating margin
|
21.2
|
%
|
|
21.5
|
%
|
|
21.2
|
%
|
|
22.0
|
%
|
|
21.7
|
%
|
|||||
Adjusted operating margin
|
22.2
|
%
|
|
23.1
|
%
|
|
22.4
|
%
|
|
22.3
|
%
|
|
22.3
|
%
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted Interest Expense - Net
|
|
|
|
|
|
|
|
|
|
||||||||||
Reported interest expense
|
190
|
|
|
161
|
|
|
213
|
|
|
178
|
|
|
141
|
|
|||||
Less: Bond redemption
|
(16
|
)
|
|
—
|
|
|
(36
|
)
|
|
(18
|
)
|
|
—
|
|
|||||
Adjusted interest expense - net
|
$
|
174
|
|
|
$
|
161
|
|
|
$
|
177
|
|
|
$
|
160
|
|
|
$
|
141
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted Income Taxes and Effective Tax Rate
|
|
|
|
|
|
|
|
|
|
||||||||||
Reported income taxes
|
$
|
551
|
|
|
$
|
612
|
|
|
$
|
691
|
|
|
$
|
649
|
|
|
$
|
586
|
|
Add: Bond redemption
|
6
|
|
|
—
|
|
|
14
|
|
|
6
|
|
|
—
|
|
|||||
Add: Income tax benefits
|
—
|
|
|
—
|
|
|
—
|
|
|
40
|
|
|
55
|
|
|||||
Add: Pension settlement charge
|
1
|
|
|
2
|
|
|
2
|
|
|
3
|
|
|
3
|
|
|||||
Add: Cost reduction program
|
28
|
|
|
39
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|||||
Total adjustments
|
35
|
|
|
41
|
|
|
16
|
|
|
49
|
|
|
74
|
|
|||||
Adjusted income taxes
|
$
|
586
|
|
|
$
|
653
|
|
|
$
|
707
|
|
|
$
|
698
|
|
|
$
|
660
|
|
Reported income before income taxes and equity investments
|
$
|
2,048
|
|
|
$
|
2,160
|
|
|
$
|
2,395
|
|
|
$
|
2,447
|
|
|
$
|
2,296
|
|
Add: Bond redemption
|
16
|
|
|
—
|
|
|
36
|
|
|
18
|
|
|
—
|
|
|||||
Add: Pension settlement charge
|
4
|
|
|
7
|
|
|
7
|
|
|
9
|
|
|
9
|
|
|||||
Add: Venezuela currency devaluation
|
—
|
|
|
—
|
|
|
131
|
|
|
23
|
|
|
—
|
|
|||||
Add: Cost reduction program
|
96
|
|
|
165
|
|
|
—
|
|
|
—
|
|
|
56
|
|
|||||
Total adjustments
|
116
|
|
|
172
|
|
|
174
|
|
|
50
|
|
|
65
|
|
|||||
Adjusted income before income taxes and equity investments
|
$
|
2,164
|
|
|
$
|
2,332
|
|
|
$
|
2,569
|
|
|
$
|
2,497
|
|
|
$
|
2,361
|
|
Reported effective tax rate
|
26.9
|
%
|
|
28.3
|
%
|
|
28.9
|
%
|
|
26.5
|
%
|
|
25.5
|
%
|
|||||
Adjusted effective tax rate
|
27.1
|
%
|
|
28.0
|
%
|
|
27.5
|
%
|
|
28.0
|
%
|
|
28.0
|
%
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted Noncontrolling Interests
|
|
|
|
|
|
|
|
|
|
||||||||||
Reported noncontrolling interests
|
$
|
38
|
|
|
$
|
44
|
|
|
$
|
52
|
|
|
$
|
81
|
|
|
$
|
52
|
|
Less: Income tax benefits
|
—
|
|
|
—
|
|
|
—
|
|
|
(16
|
)
|
|
—
|
|
|||||
Add: Cost reduction program
|
5
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|||||
Total adjustments
|
5
|
|
|
1
|
|
|
—
|
|
|
(16
|
)
|
|
2
|
|
|||||
Adjusted noncontrolling interests
|
$
|
43
|
|
|
$
|
45
|
|
|
$
|
52
|
|
|
$
|
65
|
|
|
$
|
54
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
(Dollar amounts in millions, except per share data)
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Year Ended December 31,
|
|
|
|
|
|||||||||||||||
Adjusted Net Income – Praxair, Inc.
|
|
|
|
|
|
|
|
|
|
||||||||||
Reported net income – Praxair, Inc.
|
$
|
1,500
|
|
|
$
|
1,547
|
|
|
$
|
1,694
|
|
|
$
|
1,755
|
|
|
$
|
1,692
|
|
Add: Bond redemption
|
10
|
|
|
—
|
|
|
22
|
|
|
12
|
|
|
—
|
|
|||||
Less: Income tax benefits
|
—
|
|
|
—
|
|
|
—
|
|
|
(24
|
)
|
|
(55
|
)
|
|||||
Add: Pension settlement charge
|
3
|
|
|
5
|
|
|
5
|
|
|
6
|
|
|
6
|
|
|||||
Add: Venezuela currency devaluation
|
—
|
|
|
—
|
|
|
131
|
|
|
23
|
|
|
—
|
|
|||||
Add: Cost reduction program
|
63
|
|
|
125
|
|
|
—
|
|
|
—
|
|
|
38
|
|
|||||
Total adjustments
|
76
|
|
|
130
|
|
|
158
|
|
|
17
|
|
|
(11
|
)
|
|||||
Adjusted net income – Praxair, Inc.
|
$
|
1,576
|
|
|
$
|
1,677
|
|
|
$
|
1,852
|
|
|
$
|
1,772
|
|
|
$
|
1,681
|
|
Reported percent change
|
(3
|
)%
|
|
(9
|
)%
|
|
(3
|
)%
|
|
4
|
%
|
|
1
|
%
|
|||||
Adjusted percent change
|
(6
|
)%
|
|
(9
|
)%
|
|
5
|
%
|
|
5
|
%
|
|
1
|
%
|
(Dollar amounts in millions, except per share data)
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Year Ended December 31,
|
|
|
|
|
|||||||||||||||
Adjusted Diluted Earnings Per Share
|
|
|
|
|
|
|
|
|
|
||||||||||
Reported diluted earnings per share
|
$
|
5.21
|
|
|
$
|
5.35
|
|
|
$
|
5.73
|
|
|
$
|
5.87
|
|
|
$
|
5.61
|
|
Add: Bond redemption
|
0.04
|
|
|
—
|
|
|
0.07
|
|
|
0.04
|
|
|
—
|
|
|||||
Less: Income tax benefits
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.08
|
)
|
|
(0.18
|
)
|
|||||
Add: Pension settlement charge
|
0.01
|
|
|
0.02
|
|
|
0.02
|
|
|
0.02
|
|
|
0.02
|
|
|||||
Add: Venezuela currency devaluation
|
—
|
|
|
—
|
|
|
0.45
|
|
|
0.08
|
|
|
—
|
|
|||||
Add: Cost reduction program
|
0.22
|
|
|
0.43
|
|
|
—
|
|
|
—
|
|
|
0.12
|
|
|||||
Total adjustments
|
0.27
|
|
|
0.45
|
|
|
0.54
|
|
|
0.06
|
|
|
(0.04
|
)
|
|||||
Adjusted diluted earnings per share
|
$
|
5.48
|
|
|
$
|
5.80
|
|
|
$
|
6.27
|
|
|
$
|
5.93
|
|
|
$
|
5.57
|
|
Reported percent change
|
(3
|
)%
|
|
(7
|
)%
|
|
(2
|
)%
|
|
5
|
%
|
|
3
|
%
|
|||||
Adjusted percent change
|
(6
|
)%
|
|
(7
|
)%
|
|
6
|
%
|
|
6
|
%
|
|
3
|
%
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
2017 Diluted Earnings Per Share Guidance
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Low
End
|
|
High
End
|
|
|
|
|
|
|
||||||||||
2017 diluted EPS guidance
|
$5.45
|
|
$5.80
|
|
|
|
|
|
|
||||||||||
2016 adjusted diluted EPS (see above)
|
$5.48
|
|
$5.48
|
|
|
|
|
|
|
||||||||||
Adjusted percentage change
|
(1
|
)%
|
|
6
|
%
|
|
|
|
|
|
|
|
|
|
Page
|
|
|
Audited Consolidated Financial Statements
|
|
|
|
Notes to Consolidated Financial Statements
|
|
Note 2. Cost Reduction Prog
ram and Other Charges
|
|
/s/ S
TEPHEN
F. A
NGEL
|
|
/s/
K
ELCEY
E
.
H
OYT
|
Stephen F. Angel
Chairman, President and
Chief Executive Officer
|
|
Kelcey E. Hoyt
Vice President and Controller
|
/s/ M
ATTHEW
J. W
HITE
|
|
|
Matthew J. White
Senior Vice President and
Chief Financial Officer
|
|
Danbury, Connecticut
March 1, 2017
|
Year Ended December 31,
|
2016
|
|
2015
|
|
2014
|
||||||
Sales
|
$
|
10,534
|
|
|
$
|
10,776
|
|
|
$
|
12,273
|
|
Cost of sales, exclusive of depreciation and amortization
|
5,860
|
|
|
5,960
|
|
|
6,962
|
|
|||
Selling, general and administrative
|
1,145
|
|
|
1,152
|
|
|
1,308
|
|
|||
Depreciation and amortization
|
1,122
|
|
|
1,106
|
|
|
1,170
|
|
|||
Research and development
|
92
|
|
|
93
|
|
|
96
|
|
|||
Cost reduction program and other charges
|
100
|
|
|
172
|
|
|
138
|
|
|||
Other income (expenses) – net
|
23
|
|
|
28
|
|
|
9
|
|
|||
Operating Profit
|
2,238
|
|
|
2,321
|
|
|
2,608
|
|
|||
Interest expense – net
|
190
|
|
|
161
|
|
|
213
|
|
|||
Income Before Income Taxes and Equity Investments
|
2,048
|
|
|
2,160
|
|
|
2,395
|
|
|||
Income taxes
|
551
|
|
|
612
|
|
|
691
|
|
|||
Income Before Equity Investments
|
1,497
|
|
|
1,548
|
|
|
1,704
|
|
|||
Income from equity investments
|
41
|
|
|
43
|
|
|
42
|
|
|||
Net Income (Including Noncontrolling Interests)
|
1,538
|
|
|
1,591
|
|
|
1,746
|
|
|||
Less: noncontrolling interests
|
(38
|
)
|
|
(44
|
)
|
|
(52
|
)
|
|||
Net Income – Praxair, Inc.
|
$
|
1,500
|
|
|
$
|
1,547
|
|
|
$
|
1,694
|
|
|
|
|
|
|
|
||||||
Per Share Data – Praxair, Inc. Shareholders
|
|
|
|
|
|
||||||
Basic earnings per share
|
$
|
5.25
|
|
|
$
|
5.39
|
|
|
$
|
5.79
|
|
Diluted earnings per share
|
$
|
5.21
|
|
|
$
|
5.35
|
|
|
$
|
5.73
|
|
|
|
|
|
|
|
||||||
Weighted Average Shares Outstanding (000’s):
|
|
|
|
|
|
||||||
Basic shares outstanding
|
285,677
|
|
|
287,005
|
|
|
292,494
|
|
|||
Diluted shares outstanding
|
287,757
|
|
|
289,055
|
|
|
295,608
|
|
Year Ended December 31,
|
2016
|
|
2015
|
|
2014
|
||||||
NET INCOME (INCLUDING NONCONTROLLING INTERESTS)
|
$
|
1,538
|
|
|
$
|
1,591
|
|
|
$
|
1,746
|
|
|
|
|
|
|
|
||||||
OTHER COMPREHENSIVE INCOME (LOSS)
|
|
|
|
|
|
||||||
Translation adjustments:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
116
|
|
|
(1,517
|
)
|
|
(1,087
|
)
|
|||
Reclassifications to net income
|
—
|
|
|
—
|
|
|
(5
|
)
|
|||
Income taxes
|
(48
|
)
|
|
3
|
|
|
(4
|
)
|
|||
Translation adjustments
|
68
|
|
|
(1,514
|
)
|
|
(1,096
|
)
|
|||
Funded status - retirement obligations (Note 16):
|
|
|
|
|
|
||||||
Retirement program remeasurements
|
(163
|
)
|
|
(11
|
)
|
|
(318
|
)
|
|||
Reclassifications to net income
|
60
|
|
|
84
|
|
|
59
|
|
|||
Income taxes
|
27
|
|
|
(17
|
)
|
|
95
|
|
|||
Funded status - retirement obligations
|
(76
|
)
|
|
56
|
|
|
(164
|
)
|
|||
Derivative instruments (Note 12):
|
|
|
|
|
|
||||||
Current year unrealized gain (loss)
|
1
|
|
|
1
|
|
|
4
|
|
|||
Reclassifications to net income
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|||
Income taxes
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||
Derivative instruments
|
—
|
|
|
—
|
|
|
3
|
|
|||
TOTAL OTHER COMPREHENSIVE LOSS
|
(8
|
)
|
|
(1,458
|
)
|
|
(1,257
|
)
|
|||
|
|
|
|
|
|
||||||
COMPREHENSIVE INCOME (INCLUDING NONCONTROLLING INTERESTS)
|
1,530
|
|
|
133
|
|
|
489
|
|
|||
Less: noncontrolling interests
|
(34
|
)
|
|
3
|
|
|
1
|
|
|||
COMPREHENSIVE INCOME - PRAXAIR, INC.
|
$
|
1,496
|
|
|
$
|
136
|
|
|
$
|
490
|
|
December 31,
|
2016
|
|
2015
|
||||
Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
524
|
|
|
$
|
147
|
|
Accounts receivable – net
|
1,641
|
|
|
1,601
|
|
||
Inventories
|
550
|
|
|
531
|
|
||
Prepaid and other current assets
|
165
|
|
|
347
|
|
||
Total Current Assets
|
2,880
|
|
|
2,626
|
|
||
Property, plant and equipment – net
|
11,477
|
|
|
10,998
|
|
||
Equity investments
|
717
|
|
|
665
|
|
||
Goodwill
|
3,117
|
|
|
2,986
|
|
||
Other intangible assets – net
|
583
|
|
|
568
|
|
||
Other long-term assets
|
558
|
|
|
476
|
|
||
Total Assets
|
$
|
19,332
|
|
|
$
|
18,319
|
|
Liabilities and Equity
|
|
|
|
||||
Accounts payable
|
$
|
906
|
|
|
$
|
791
|
|
Short-term debt
|
434
|
|
|
250
|
|
||
Current portion of long-term debt
|
164
|
|
|
6
|
|
||
Accrued taxes
|
133
|
|
|
144
|
|
||
Other current liabilities
|
841
|
|
|
702
|
|
||
Total Current Liabilities
|
2,478
|
|
|
1,893
|
|
||
Long-term debt
|
8,917
|
|
|
8,975
|
|
||
Other long-term liabilities
|
1,213
|
|
|
1,155
|
|
||
Deferred credits
|
1,272
|
|
|
1,390
|
|
||
Total Liabilities
|
13,880
|
|
|
13,413
|
|
||
Commitments and contingencies (Note 17)
|
|
|
|
||||
Redeemable noncontrolling interests
|
11
|
|
|
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
|
4,074
|
|
|
4,005
|
|
||
Retained earnings
|
12,879
|
|
|
12,229
|
|
||
Accumulated other comprehensive income (loss)
|
(4,600
|
)
|
|
(4,596
|
)
|
||
Less: Treasury stock, at cost (2016 – 98,329,849 shares and
2015 – 98,351,546 shares)
|
(7,336
|
)
|
|
(7,253
|
)
|
||
Total Praxair, Inc. Shareholders’ Equity
|
5,021
|
|
|
4,389
|
|
||
Noncontrolling interests
|
420
|
|
|
404
|
|
||
Total Equity
|
5,441
|
|
|
4,793
|
|
||
Total Liabilities and Equity
|
$
|
19,332
|
|
|
$
|
18,319
|
|
Year Ended December 31,
|
2016
|
|
2015
|
|
2014
|
||||||
Increase (Decrease) in Cash and Cash Equivalents
|
|
|
|
|
|
||||||
Operations
|
|
|
|
|
|
||||||
Net income – Praxair, Inc.
|
$
|
1,500
|
|
|
$
|
1,547
|
|
|
$
|
1,694
|
|
Noncontrolling interests
|
38
|
|
|
44
|
|
|
52
|
|
|||
Net income (including noncontrolling interests)
|
$
|
1,538
|
|
|
$
|
1,591
|
|
|
$
|
1,746
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Cost reduction program and other charges, net of payments
|
83
|
|
|
121
|
|
|
138
|
|
|||
Depreciation and amortization
|
1,122
|
|
|
1,106
|
|
|
1,170
|
|
|||
Deferred income taxes
|
(13
|
)
|
|
99
|
|
|
55
|
|
|||
Share-based compensation
|
39
|
|
|
30
|
|
|
51
|
|
|||
Non-cash charges and other
|
(43
|
)
|
|
(79
|
)
|
|
(116
|
)
|
|||
Working capital
|
|
|
|
|
|
||||||
Accounts receivable
|
(33
|
)
|
|
1
|
|
|
(80
|
)
|
|||
Inventory
|
(13
|
)
|
|
(23
|
)
|
|
(42
|
)
|
|||
Prepaid and other current assets
|
6
|
|
|
(22
|
)
|
|
(20
|
)
|
|||
Payables and accruals
|
92
|
|
|
(40
|
)
|
|
13
|
|
|||
Pension contributions
|
(11
|
)
|
|
(15
|
)
|
|
(18
|
)
|
|||
Long-term assets, liabilities and other
|
6
|
|
|
(74
|
)
|
|
(10
|
)
|
|||
Net cash provided by operating activities
|
2,773
|
|
|
2,695
|
|
|
2,887
|
|
|||
Investing
|
|
|
|
|
|
||||||
Capital expenditures
|
(1,465
|
)
|
|
(1,541
|
)
|
|
(1,689
|
)
|
|||
Acquisitions, net of cash acquired
|
(363
|
)
|
|
(82
|
)
|
|
(206
|
)
|
|||
Divestitures and asset sales
|
58
|
|
|
320
|
|
|
92
|
|
|||
Net cash used for investing activities
|
(1,770
|
)
|
|
(1,303
|
)
|
|
(1,803
|
)
|
|||
Financing
|
|
|
|
|
|
||||||
Short-term debt borrowings (repayments) – net
|
191
|
|
|
(329
|
)
|
|
(193
|
)
|
|||
Long-term debt borrowings
|
936
|
|
|
1,497
|
|
|
1,546
|
|
|||
Long-term debt repayments
|
(770
|
)
|
|
(1,000
|
)
|
|
(764
|
)
|
|||
Issuances of common stock
|
139
|
|
|
88
|
|
|
103
|
|
|||
Purchases of common stock
|
(228
|
)
|
|
(725
|
)
|
|
(862
|
)
|
|||
Cash dividends – Praxair, Inc. shareholders
|
(856
|
)
|
|
(819
|
)
|
|
(759
|
)
|
|||
Excess tax benefit on stock based compensation
|
—
|
|
|
19
|
|
|
31
|
|
|||
Noncontrolling interest transactions and other
|
(55
|
)
|
|
(41
|
)
|
|
(129
|
)
|
|||
Net cash provided (used ) for financing activities
|
(643
|
)
|
|
(1,310
|
)
|
|
(1,027
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
17
|
|
|
(61
|
)
|
|
(69
|
)
|
|||
Change in cash and cash equivalents
|
377
|
|
|
21
|
|
|
(12
|
)
|
|||
Cash and cash equivalents, beginning-of-period
|
147
|
|
|
126
|
|
|
138
|
|
|||
Cash and cash equivalents, end-of-period
|
$
|
524
|
|
|
$
|
147
|
|
|
$
|
126
|
|
Supplemental Data
|
|
|
|
|
|
||||||
Income taxes paid
|
$
|
585
|
|
|
$
|
420
|
|
|
$
|
606
|
|
Interest paid, net of capitalized interest (Note 7)
|
$
|
189
|
|
|
$
|
174
|
|
|
$
|
210
|
|
|
Praxair, Inc. Shareholders’ Equity
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Accumulated Other
Comprehensive
Income (Loss)
(Note 7)
|
|
Treasury Stock
|
|
Praxair, Inc.
Shareholders’
Equity
|
|
Noncontrolling
Interests
|
|
Total Equity
|
||||||||||||||||||||||
Activity
|
Shares
|
|
Amounts
|
|
Shares
|
|
Amounts
|
|
|||||||||||||||||||||||||||||
Balance, December 31, 2013
|
383,231
|
|
|
$
|
4
|
|
|
$
|
3,970
|
|
|
$
|
10,528
|
|
|
$
|
(1,981
|
)
|
|
89,097
|
|
|
$
|
(5,912
|
)
|
|
$
|
6,609
|
|
|
$
|
394
|
|
|
$
|
7,003
|
|
Net Income
|
|
|
|
|
|
|
1,694
|
|
|
|
|
|
|
|
|
1,694
|
|
|
40
|
|
|
1,734
|
|
||||||||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
(1,204
|
)
|
|
|
|
|
|
(1,204
|
)
|
|
(29
|
)
|
|
(1,233
|
)
|
||||||||||||||
Noncontrolling interests:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Dividends and other capital reductions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(28
|
)
|
|
(28
|
)
|
||||||||||||||||
Purchases of noncontrolling interests
|
|
|
|
|
(24
|
)
|
|
|
|
|
|
|
|
|
|
(24
|
)
|
|
2
|
|
|
(22
|
)
|
||||||||||||||
Additions (Reductions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8
|
|
|
8
|
|
||||||||||||||||
Redemption value adjustments (Note 14)
|
|
|
|
|
|
|
(2
|
)
|
|
|
|
|
|
|
|
(2
|
)
|
|
|
|
(2
|
)
|
|||||||||||||||
Dividends to Praxair, Inc. common stock ($2.60 per share)
|
|
|
|
|
|
|
(759
|
)
|
|
|
|
|
|
|
|
(759
|
)
|
|
|
|
(759
|
)
|
|||||||||||||||
Issuances of common stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
For the dividend reinvestment and stock purchase plan
|
|
|
|
|
|
|
|
|
|
|
(56
|
)
|
|
7
|
|
|
7
|
|
|
|
|
7
|
|
||||||||||||||
For employee savings and incentive plans
|
|
|
|
|
(36
|
)
|
|
|
|
|
|
(1,830
|
)
|
|
122
|
|
|
86
|
|
|
|
|
86
|
|
|||||||||||||
Purchases of common stock
|
|
|
|
|
|
|
|
|
|
|
6,758
|
|
|
(868
|
)
|
|
(868
|
)
|
|
|
|
(868
|
)
|
||||||||||||||
Tax benefit from stock options
|
|
|
|
|
33
|
|
|
|
|
|
|
|
|
|
|
33
|
|
|
|
|
33
|
|
|||||||||||||||
Share-based compensation
|
|
|
|
|
51
|
|
|
|
|
|
|
|
|
|
|
51
|
|
|
|
|
51
|
|
|||||||||||||||
Balance, December 31, 2014
|
383,231
|
|
|
$
|
4
|
|
|
$
|
3,994
|
|
|
$
|
11,461
|
|
|
$
|
(3,185
|
)
|
|
93,969
|
|
|
$
|
(6,651
|
)
|
|
$
|
5,623
|
|
|
$
|
387
|
|
|
$
|
6,010
|
|
Net Income
|
|
|
|
|
|
|
1,547
|
|
|
|
|
|
|
|
|
1,547
|
|
|
34
|
|
|
1,581
|
|
||||||||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
(1,411
|
)
|
|
|
|
|
|
(1,411
|
)
|
|
(30
|
)
|
|
(1,441
|
)
|
||||||||||||||
Noncontrolling interests:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Dividends and other capital reductions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(16
|
)
|
|
(16
|
)
|
||||||||||||||||
Additions (Reductions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29
|
|
|
29
|
|
||||||||||||||||
Redemption value adjustments (Note 14)
|
|
|
|
|
|
|
40
|
|
|
|
|
|
|
|
|
40
|
|
|
|
|
40
|
|
|||||||||||||||
Dividends to Praxair, Inc. common stock ($2.86 per share)
|
|
|
|
|
|
|
(819
|
)
|
|
|
|
|
|
|
|
(819
|
)
|
|
|
|
(819
|
)
|
|
Praxair, Inc. Shareholders’ Equity
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Accumulated Other
Comprehensive
Income (Loss)
(Note 7)
|
|
Treasury Stock
|
|
Praxair, Inc.
Shareholders’
Equity
|
|
Noncontrolling
Interests
|
|
Total Equity
|
||||||||||||||||||||||
Activity
|
Shares
|
|
Amounts
|
|
Shares
|
|
Amounts
|
|
|||||||||||||||||||||||||||||
Issuances of common stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
For the dividend reinvestment and stock purchase plan
|
|
|
|
|
|
|
|
|
|
|
(64
|
)
|
|
7
|
|
|
7
|
|
|
|
|
7
|
|
||||||||||||||
For employee savings and incentive plans
|
|
|
|
|
(38
|
)
|
|
|
|
|
|
(1,562
|
)
|
|
110
|
|
|
72
|
|
|
|
|
72
|
|
|||||||||||||
Purchases of common stock
|
|
|
|
|
|
|
|
|
|
|
6,009
|
|
|
(719
|
)
|
|
(719
|
)
|
|
|
|
(719
|
)
|
||||||||||||||
Tax benefit from stock options
|
|
|
|
|
19
|
|
|
|
|
|
|
|
|
|
|
19
|
|
|
|
|
19
|
|
|||||||||||||||
Share-based compensation
|
|
|
|
|
30
|
|
|
|
|
|
|
|
|
|
|
30
|
|
|
|
|
30
|
|
|||||||||||||||
Balance, December 31, 2015
|
383,231
|
|
|
$
|
4
|
|
|
$
|
4,005
|
|
|
$
|
12,229
|
|
|
$
|
(4,596
|
)
|
|
98,352
|
|
|
$
|
(7,253
|
)
|
|
$
|
4,389
|
|
|
$
|
404
|
|
|
$
|
4,793
|
|
Net Income
|
|
|
|
|
|
|
1,500
|
|
|
|
|
|
|
|
|
1,500
|
|
|
35
|
|
|
1,535
|
|
||||||||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
|
(4
|
)
|
|
|
|
|
|
(4
|
)
|
|
(11
|
)
|
|
(15
|
)
|
||||||||||||||
Noncontrolling interests:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Dividends and other capital reductions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(28
|
)
|
|
(28
|
)
|
||||||||||||||||
Additions (Reductions) - (Note 14)
|
|
|
|
|
50
|
|
|
|
|
|
|
|
|
|
|
50
|
|
|
20
|
|
|
70
|
|
||||||||||||||
Redemption value adjustments (Note 14)
|
|
|
|
|
|
|
6
|
|
|
|
|
|
|
|
|
6
|
|
|
|
|
6
|
|
|||||||||||||||
Dividends to Praxair, Inc. common stock ($3.00 per share)
|
|
|
|
|
|
|
(856
|
)
|
|
|
|
|
|
|
|
(856
|
)
|
|
|
|
(856
|
)
|
|||||||||||||||
Issuances of common stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
For the dividend reinvestment and stock purchase plan
|
|
|
|
|
|
|
|
|
|
|
(60
|
)
|
|
7
|
|
|
7
|
|
|
|
|
7
|
|
||||||||||||||
For employee savings and incentive plans
|
|
|
|
|
(20
|
)
|
|
|
|
|
|
(2,044
|
)
|
|
143
|
|
|
123
|
|
|
|
|
123
|
|
|||||||||||||
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
5
|
|
|
5
|
|
|
|
|
5
|
|
|||||||||||||||
Purchases of common stock
|
|
|
|
|
|
|
|
|
|
|
2,082
|
|
|
(238
|
)
|
|
(238
|
)
|
|
|
|
(238
|
)
|
||||||||||||||
Share-based compensation
|
|
|
|
|
39
|
|
|
|
|
|
|
|
|
|
|
39
|
|
|
|
|
39
|
|
|||||||||||||||
Balance, December 31, 2016
|
383,231
|
|
|
$
|
4
|
|
|
$
|
4,074
|
|
|
$
|
12,879
|
|
|
$
|
(4,600
|
)
|
|
98,330
|
|
|
$
|
(7,336
|
)
|
|
$
|
5,021
|
|
|
$
|
420
|
|
|
$
|
5,441
|
|
•
|
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.
|
•
|
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, among other changes, requires that all excess tax benefits and deficiencies associated with share-based payment awards be recorded in Income taxes in the statement of income in the period in which they occur, and within operating cash flows. Previously, such excess tax benefits were recorded as direct credits to equity (not via the statement of income), and as financing cash flows.
|
•
|
Balance Sheet Classification of Deferred Taxes -
In November 2015, the FASB issued updated guidance on the balance sheet classification of deferred taxes. Prior to the adoption of this guidance, deferred income tax liabilities and assets were 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. Praxair has elected to early adopt this guidance beginning in the fourth quarter 2016 on a prospective basis, prior periods were not retrospectively adjusted (see Note 7).
|
•
|
Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent) -
In May 2015, the FASB issued updated guidance removing the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. The adoption of this guidance resulted in the removal of certain pensions assets from within the fair value hierarchy (see Note 16).
|
•
|
Revenue Recognition
– In May 2014, the FASB issued updated guidance on the reporting and disclosure of revenue. The new guidance requires the evaluation of contracts with customers to determine the recognition of revenue when or as the entity satisfies a performance obligation, and requires expanded disclosures. Subsequently, the FASB has issued amendments to certain aspects of the guidance including the effective date. This guidance is required to be effective beginning in the first quarter 2018 (with early adoption beginning in 2017 optional) and includes several transition options.
|
•
|
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.
|
•
|
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.
|
•
|
Credit Losses on Financial Instruments
–
In June 2016, the FASB issued an update on the measurement of credit losses. The guidance introduces a new accounting model for expected credit losses on financial instruments, including trade receivables, based on estimates of current expected credit losses. This guidance will be effective for Praxair beginning in the first quarter 2020, with early adoption permitted beginning in the first quarter 2019 and requires companies to apply the change in accounting on a prospective basis. We are currently evaluating the impact this update will have on our consolidated financial statements.
|
•
|
Classification of Certain Cash Receipts and Cash Payments
– In August 2016, the FASB issued updated guidance on the classification of certain cash receipts and cash payments within the statement of cash flows. The update provides accounting guidance for specific cash flow issues with the objective of reducing diversity in practice. This new guidance will be effective for Praxair beginning in the first quarter 2018 on a retrospective basis, with early adoption optional. Praxair does not expect this requirement to have a material impact.
|
•
|
Intra-Entity Asset Transfers
– In October 2016, the FASB issued updated guidance for income tax accounting of intra-entity transfers of assets other than inventory. The update requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory in the period when the transfer occurs. This new guidance will be effective for Praxair beginning in the first quarter 2018, with early adoption permitted, and should be applied on a modified retrospective basis. We are currently evaluating the impact this update will have on our consolidated financial statements.
|
•
|
Simplifying the Test for Goodwill Impairment
– In January 2017, the FASB issued updated guidance on the measurement of goodwill. The new guidance eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge. The guidance will be effective for Praxair beginning in the first quarter 2020 with early adoption permitted. Praxair does not expect this guidance to have a material impact.
|
(millions of dollars)
|
Severance costs
|
|
Other Charges
|
|
Total
|
||||||
North America
|
$
|
14
|
|
|
$
|
29
|
|
|
$
|
43
|
|
Europe
|
12
|
|
|
3
|
|
|
15
|
|
|||
South America
|
5
|
|
|
7
|
|
|
12
|
|
|||
Asia
|
6
|
|
|
13
|
|
|
19
|
|
|||
Surface Technologies
|
3
|
|
|
4
|
|
|
7
|
|
|||
Total
|
$
|
40
|
|
|
$
|
56
|
|
|
$
|
96
|
|
(millions of dollars)
|
Severance costs
|
|
Other Charges
|
|
Total
|
||||||
North America
|
$
|
14
|
|
|
$
|
20
|
|
|
$
|
34
|
|
Europe
|
11
|
|
|
9
|
|
|
20
|
|
|||
South America
|
18
|
|
|
49
|
|
|
67
|
|
|||
Asia
|
11
|
|
|
14
|
|
|
25
|
|
|||
Surface Technologies
|
9
|
|
|
10
|
|
|
19
|
|
|||
Total
|
$
|
63
|
|
|
$
|
102
|
|
|
$
|
165
|
|
i.
|
The North America charges of
$20 million
relate primarily to the decision to consolidate certain manufacturing and distribution locations for efficiencies and cost reduction.
|
ii.
|
The Europe charges of
$9 million
are primarily for the restructuring of operations in Russia and energy-related businesses in Northern Europe.
|
iii.
|
The South America charges of
$49 million
include costs primarily associated with a decision to exit a non-core business and other operations in South America.
|
iv.
|
The Asia charges of
$14 million
include costs primarily related to an asset disposal in China.
|
v.
|
The Surface Technologies charges of
$10 million
relate to the realignment of sales and manufacturing operations in Europe and the United States for efficiencies and cost reduction.
|
(millions of dollars)
|
Severance costs
|
|
Other Charges
|
|
Total
|
||||||
Q2/Q3 2015 Cost Reduction Program and Other Charges
|
$
|
63
|
|
|
$
|
102
|
|
|
$
|
165
|
|
Less: Cash payments
|
(31
|
)
|
|
(13
|
)
|
|
(44
|
)
|
|||
Less: Non-cash asset write-offs
|
—
|
|
|
(68
|
)
|
|
(68
|
)
|
|||
Foreign currency translation and other
|
(2
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|||
Balance, December 31, 2015
|
$
|
30
|
|
|
$
|
20
|
|
|
$
|
50
|
|
2016 Cost Reduction Program and Other Charges
|
40
|
|
|
56
|
|
|
96
|
|
|||
Less: Cash payments
|
(33
|
)
|
|
(9
|
)
|
|
(42
|
)
|
|||
Less: Non-cash asset write-offs
|
—
|
|
|
(39
|
)
|
|
(39
|
)
|
|||
Foreign currency translation and other
|
1
|
|
|
(1
|
)
|
|
—
|
|
|||
Balance, December 31, 2016
|
$
|
38
|
|
|
$
|
27
|
|
|
$
|
65
|
|
(Millions of dollars)
|
|
||
2017
|
$
|
117
|
|
2018
|
97
|
|
|
2019
|
79
|
|
|
2020
|
65
|
|
|
2021
|
54
|
|
|
Thereafter
|
117
|
|
|
|
$
|
529
|
|
(Millions of dollars)
Year Ended December 31,
|
2016
|
|
2015
|
|
2014
|
||||||
United States
|
$
|
954
|
|
|
$
|
980
|
|
|
$
|
1,004
|
|
Foreign
|
1,094
|
|
|
1,180
|
|
|
1,391
|
|
|||
Total income before income taxes
|
$
|
2,048
|
|
|
$
|
2,160
|
|
|
$
|
2,395
|
|
(a)
|
U.S. tax credits and deductions relate to manufacturing deductions and to the research and experimentation tax credit.
|
(b)
|
Primarily related to differences between the U.S. tax rate of
35%
and the statutory tax rate in the countries where Praxair operates. 2014 includes $
56 million
of tax benefits related to a reduction of uncertain tax positions as a result of a lapse of statute of limitations. Other permanent items and tax rate changes were not significant.
|
(c)
|
Impact related to non-deductible Venezuela currency devaluations in 2014 (see Note 2).
|
(d)
|
See Note 1 related to adoption of the FASB's standard for Improvements to Employee Share-Based Payment Accounting in 2016.
|
(a)
|
Includes deferred taxes of $
352 million
and $
325 million
in
2016
and
2015
, respectively, related to pension / OPEB funded status (see Notes 7 and 16).
|
(b)
|
Includes $
233 million
and $
194 million
in
2016
and
2015
, respectively, related to research and development costs
and
$45 million
and $
45 million
in
2016
and
2015
, respectively, related to goodwill.
|
(c)
|
Summary of valuation allowances relating to deferred tax assets follows (millions of dollars):
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
Balance, January 1,
|
$
|
(123
|
)
|
|
$
|
(106
|
)
|
|
$
|
(85
|
)
|
|
Income tax (charge) benefit
|
(13
|
)
|
|
(20
|
)
|
|
(20
|
)
|
|||
|
Translation adjustments
|
(2
|
)
|
|
4
|
|
|
6
|
|
|||
|
Other, including write-offs
|
6
|
|
|
(1
|
)
|
|
(7
|
)
|
|||
|
Balance, December 31,
|
$
|
(132
|
)
|
|
$
|
(123
|
)
|
|
$
|
(106
|
)
|
(d)
|
2016 amounts reflect the adoption of the FASB's standard regarding the Balance Sheet Classification of Deferred Taxes which requires all current deferred income tax assets and liabilities to be classified as non-current on the balance sheet (see Note 1).
|
(Millions of dollars)
|
2016
|
|
2015
|
|
2014
|
||||||
Unrecognized income tax benefits, January 1
|
$
|
68
|
|
|
$
|
71
|
|
|
$
|
121
|
|
Additions for tax positions of prior years
|
6
|
|
|
21
|
|
|
13
|
|
|||
Reductions for tax positions of prior years
|
(15
|
)
|
|
(13
|
)
|
|
(2
|
)
|
|||
Additions for current year tax positions
|
—
|
|
|
—
|
|
|
3
|
|
|||
Reductions for settlements with taxing authorities (a)
|
(2
|
)
|
|
(3
|
)
|
|
(3
|
)
|
|||
Reductions as a result of a lapse of an applicable statute of limitations (b)
|
—
|
|
|
—
|
|
|
(56
|
)
|
|||
Foreign currency translation and other
|
(1
|
)
|
|
(8
|
)
|
|
(5
|
)
|
|||
Unrecognized income tax benefits, December 31
|
$
|
56
|
|
|
$
|
68
|
|
|
$
|
71
|
|
(a)
|
Settlements are uncertain tax positions that were effectively settled with the taxing authorities, including positions where the company has agreed to amend its tax returns to eliminate the uncertainty.
|
(b)
|
See note (b) to the effective tax rate reconciliation.
|
|
2016
|
|
2015
|
|
2014
|
||||||
Numerator (Millions of dollars)
|
|
|
|
|
|
||||||
Net income – Praxair, Inc.
|
$
|
1,500
|
|
|
$
|
1,547
|
|
|
$
|
1,694
|
|
Denominator (Thousands of shares)
|
|
|
|
|
|
||||||
Weighted average shares outstanding
|
285,289
|
|
|
286,606
|
|
|
291,987
|
|
|||
Shares earned and issuable under compensation plans
|
388
|
|
|
399
|
|
|
507
|
|
|||
Weighted average shares used in basic earnings per share
|
285,677
|
|
|
287,005
|
|
|
292,494
|
|
|||
Effect of dilutive securities
|
|
|
|
|
|
||||||
Stock options and awards
|
2,080
|
|
|
2,050
|
|
|
3,114
|
|
|||
Weighted average shares used in diluted earnings per share
|
287,757
|
|
|
289,055
|
|
|
295,608
|
|
|||
Basic Earnings Per Common Share
|
$
|
5.25
|
|
|
$
|
5.39
|
|
|
$
|
5.79
|
|
Diluted Earnings Per Common Share
|
$
|
5.21
|
|
|
$
|
5.35
|
|
|
$
|
5.73
|
|
(Millions of dollars)
Year Ended December 31,
|
2016
|
|
2015
|
|
2014
|
||||||
Selling, General and Administrative
|
|
|
|
|
|
||||||
Selling
|
$
|
493
|
|
|
$
|
507
|
|
|
$
|
572
|
|
General and administrative
|
652
|
|
|
645
|
|
|
736
|
|
|||
|
$
|
1,145
|
|
|
$
|
1,152
|
|
|
$
|
1,308
|
|
Year Ended December 31,
|
2016
|
|
2015
|
|
2014
|
||||||
Depreciation and Amortization
|
|
|
|
|
|
||||||
Depreciation
|
$
|
1,071
|
|
|
$
|
1,059
|
|
|
$
|
1,123
|
|
Amortization of other intangibles (Note 10)
|
51
|
|
|
47
|
|
|
47
|
|
|||
|
$
|
1,122
|
|
|
$
|
1,106
|
|
|
$
|
1,170
|
|
Year Ended December 31,
|
2016
|
|
2015
|
|
2014
|
||||||
Other Income (Expenses) – Net
|
|
|
|
|
|
||||||
Currency related net gains (losses)
|
$
|
1
|
|
|
$
|
(2
|
)
|
|
$
|
1
|
|
Partnership income
|
5
|
|
|
4
|
|
|
16
|
|
|||
Severance expense
|
(7
|
)
|
|
(5
|
)
|
|
(22
|
)
|
|||
Business divestitures and asset gains (losses) – net
|
16
|
|
|
34
|
|
|
36
|
|
|||
Other – net
|
8
|
|
|
(3
|
)
|
|
(22
|
)
|
|||
|
$
|
23
|
|
|
$
|
28
|
|
|
$
|
9
|
|
Year Ended December 31,
|
2016
|
|
2015
|
|
2014
|
||||||
Interest Expense – Net
|
|
|
|
|
|
||||||
Interest incurred on debt
|
$
|
208
|
|
|
$
|
194
|
|
|
$
|
215
|
|
Interest capitalized
|
(34
|
)
|
|
(33
|
)
|
|
(38
|
)
|
|||
Bond redemption (a)
|
16
|
|
|
—
|
|
|
36
|
|
|||
|
$
|
190
|
|
|
$
|
161
|
|
|
$
|
213
|
|
Year Ended December 31,
|
2016
|
|
2015
|
|
2014
|
||||||
Income Attributable to Noncontrolling Interests
|
|
|
|
|
|
||||||
Noncontrolling interests' operations
|
$
|
35
|
|
|
$
|
34
|
|
|
$
|
40
|
|
Redeemable noncontrolling interests' operations (Note 14)
|
3
|
|
|
10
|
|
|
12
|
|
|||
|
$
|
38
|
|
|
$
|
44
|
|
|
$
|
52
|
|
(Millions of dollars)
December 31,
|
2016
|
|
2015
|
||||
Accounts Receivable
|
|
|
|
||||
Trade
|
$
|
1,640
|
|
|
$
|
1,601
|
|
Other
|
122
|
|
|
101
|
|
||
|
1,762
|
|
|
1,702
|
|
||
Less: allowance for doubtful accounts (b)
|
(121
|
)
|
|
(101
|
)
|
||
|
$
|
1,641
|
|
|
$
|
1,601
|
|
December 31,
|
2016
|
|
2015
|
||||
Inventories
|
|
|
|
||||
Raw materials and supplies
|
$
|
197
|
|
|
$
|
202
|
|
Work in process
|
45
|
|
|
48
|
|
||
Finished goods
|
308
|
|
|
281
|
|
||
|
$
|
550
|
|
|
$
|
531
|
|
December 31,
|
2016
|
|
2015
|
||||
Prepaid and Other Current Assets
|
|
|
|
||||
Deferred income taxes (Note 5) (c)
|
$
|
—
|
|
|
$
|
184
|
|
Prepaid (d)
|
108
|
|
|
110
|
|
||
Other
|
57
|
|
|
53
|
|
||
|
$
|
165
|
|
|
$
|
347
|
|
December 31,
|
2016
|
|
2015
|
||||
Other Long-term Assets
|
|
|
|
||||
Pension assets (Note 16)
|
$
|
13
|
|
|
$
|
41
|
|
Insurance contracts (e)
|
74
|
|
|
74
|
|
||
Long-term receivables, net (f)
|
46
|
|
|
33
|
|
||
Deposits
|
56
|
|
|
48
|
|
||
Investments carried at cost
|
14
|
|
|
12
|
|
||
Deferred charges
|
51
|
|
|
50
|
|
||
Deferred income taxes (Note 5) (c)
|
185
|
|
|
118
|
|
||
Other
|
119
|
|
|
100
|
|
||
|
$
|
558
|
|
|
$
|
476
|
|
December 31,
|
2016
|
|
2015
|
||||
Other Current Liabilities
|
|
|
|
||||
Accrued expenses
|
$
|
285
|
|
|
$
|
247
|
|
Payroll
|
141
|
|
|
114
|
|
||
Cost reduction program (Note 2)
|
59
|
|
|
44
|
|
||
Pension and postretirement (Note 16)
|
24
|
|
|
29
|
|
||
Interest payable
|
78
|
|
|
71
|
|
||
Employee benefit accrual
|
23
|
|
|
22
|
|
||
Insurance reserves
|
8
|
|
|
8
|
|
||
Other
|
223
|
|
|
167
|
|
||
|
$
|
841
|
|
|
$
|
702
|
|
December 31,
|
2016
|
|
2015
|
||||
Other Long-term Liabilities
|
|
|
|
||||
Pension and postretirement (Note 16)
|
$
|
863
|
|
|
$
|
760
|
|
Tax liabilities for uncertain tax positions
|
44
|
|
|
56
|
|
||
Cost reduction program (Note 2)
|
6
|
|
|
6
|
|
||
Interest and penalties for uncertain tax positions (Note 5)
|
6
|
|
|
8
|
|
||
Insurance reserves
|
25
|
|
|
24
|
|
||
Other
|
269
|
|
|
301
|
|
||
|
$
|
1,213
|
|
|
$
|
1,155
|
|
December 31,
|
2016
|
|
2015
|
||||
Deferred Credits
|
|
|
|
||||
Deferred income taxes (Note 5) (c)
|
$
|
1,209
|
|
|
$
|
1,328
|
|
Other
|
63
|
|
|
62
|
|
||
|
$
|
1,272
|
|
|
$
|
1,390
|
|
December 31,
|
2016
|
|
2015
|
||||
Accumulated Other Comprehensive Income (Loss)
|
|
|
|
||||
Cumulative translation adjustment - net of taxes:
|
|
|
|
||||
North America (g)
|
$
|
(1,038
|
)
|
|
$
|
(899
|
)
|
South America (g)
|
(1,969
|
)
|
|
(2,272
|
)
|
||
Europe (g)
|
(504
|
)
|
|
(526
|
)
|
||
Asia (g)
|
(383
|
)
|
|
(285
|
)
|
||
Surface Technologies
|
(52
|
)
|
|
(36
|
)
|
||
|
(3,946
|
)
|
|
(4,018
|
)
|
||
Derivatives – net of taxes
|
(1
|
)
|
|
(1
|
)
|
||
Pension/OPEB funded status obligation (net of $352 million and $325 million tax benefit in 2016 and 2015, respectively) (Note 16)
|
(653
|
)
|
|
(577
|
)
|
||
|
$
|
(4,600
|
)
|
|
$
|
(4,596
|
)
|
(a)
|
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). In December 2014, Praxair redeemed
$400
|
(b)
|
Provisions to the allowance for doubtful accounts were $
41 million
, $
35 million
, and $
39 million
in
2016
,
2015
, and
2014
, respectively. The allowance activity in each period related primarily to write-offs of uncollectible amounts, net of recoveries and currency movements.
|
(c)
|
2016 amounts reflect the adoption of the FASB's standard regarding Balance Sheet Classification of Deferred Taxes which requires all current deferred income tax assets and liabilities to be classified as non-current on the balance sheet (see Note 1).
|
(d)
|
Includes estimated income tax payments of
$39 million
and
$42 million
in 2016 and 2015, respectively.
|
(e)
|
Consists primarily of insurance contracts and other investments to be utilized for non-qualified pension and OPEB obligations.
|
(f)
|
Long-term receivables are not material and are largely reserved. The balances at
December 31, 2016
and
2015
are net of reserves of $
50 million
and $
35 million
, respectively. The amounts in both periods relate primarily to government receivables in Brazil and other long-term notes receivable from customers. Collectability is reviewed regularly and uncollectible amounts are written-off as appropriate. The account balance changes during 2016 were primarily due to additional government receivables in Brazil and foreign exchange rate movements.
|
(g)
|
North America consists of currency translation adjustments in Canada and Mexico. South America relates primarily to Brazil and Argentina. Europe relates primarily to Spain, Italy and Germany. Asia relates primarily to Korea and India.
|
(Millions of dollars)
December 31,
|
|
Depreciable Lives (Yrs)
|
|
2016
|
|
2015
|
||||
Production plants (primarily 15-year life) (a)
|
|
10-20
|
|
$
|
14,588
|
|
|
$
|
13,778
|
|
Storage tanks
|
|
15-20
|
|
2,360
|
|
|
2,196
|
|
||
Transportation equipment and other
|
|
3-15
|
|
2,038
|
|
|
1,925
|
|
||
Cylinders (primarily 30-year life)
|
|
10-30
|
|
1,722
|
|
|
1,654
|
|
||
Buildings
|
|
25-40
|
|
1,096
|
|
|
1,085
|
|
||
Land and improvements (b)
|
|
0-20
|
|
559
|
|
|
517
|
|
||
Construction in progress
|
|
|
|
1,558
|
|
|
1,539
|
|
||
|
|
|
|
23,921
|
|
|
22,694
|
|
||
Less: accumulated depreciation
|
|
|
|
(12,444
|
)
|
|
(11,696
|
)
|
||
|
|
|
|
$
|
11,477
|
|
|
$
|
10,998
|
|
(Millions of dollars)
|
North
America
|
|
South
America
|
|
Europe
|
|
Asia
|
|
Surface
Technologies
|
|
Total
|
||||||||||||
Balance, December 31, 2014
|
$
|
2,139
|
|
|
$
|
147
|
|
|
$
|
654
|
|
|
$
|
38
|
|
|
$
|
143
|
|
|
$
|
3,121
|
|
Acquisitions (Note 3)
|
21
|
|
|
9
|
|
|
—
|
|
|
23
|
|
|
3
|
|
|
56
|
|
||||||
Purchase adjustments & other *
|
(12
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12
|
)
|
||||||
Foreign currency translation
|
(37
|
)
|
|
(58
|
)
|
|
(72
|
)
|
|
(2
|
)
|
|
(10
|
)
|
|
(179
|
)
|
||||||
Balance, December 31, 2015
|
$
|
2,111
|
|
|
$
|
98
|
|
|
$
|
582
|
|
|
$
|
59
|
|
|
$
|
136
|
|
|
$
|
2,986
|
|
Acquisitions (Note 3)
|
61
|
|
|
9
|
|
|
71
|
|
|
—
|
|
|
—
|
|
|
141
|
|
||||||
Purchase adjustments & other
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
8
|
|
||||||
Foreign currency translation
|
(13
|
)
|
|
25
|
|
|
(24
|
)
|
|
(1
|
)
|
|
(5
|
)
|
|
(18
|
)
|
||||||
Balance, December 31, 2016
|
$
|
2,165
|
|
|
$
|
132
|
|
|
$
|
629
|
|
|
$
|
58
|
|
|
$
|
133
|
|
|
$
|
3,117
|
|
(Millions of dollars)
For the year ended December 31, 2016
|
Customer &
License/Use Agreements |
|
Non-compete
Agreements |
|
Patents
& Other |
|
Total
|
||||||||
Cost:
|
|
|
|
|
|
|
|
||||||||
Balance, December 31, 2015
|
$
|
698
|
|
|
$
|
38
|
|
|
$
|
47
|
|
|
$
|
783
|
|
Additions (primarily acquisitions)
|
72
|
|
|
4
|
|
|
6
|
|
|
82
|
|
||||
Foreign currency translation
|
(16
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|
(19
|
)
|
||||
Other *
|
(3
|
)
|
|
(7
|
)
|
|
—
|
|
|
(10
|
)
|
||||
Balance, December 31, 2016
|
751
|
|
|
34
|
|
|
51
|
|
|
836
|
|
||||
Less: accumulated amortization:
|
|
|
|
|
|
|
|
||||||||
Balance, December 31, 2015
|
(179
|
)
|
|
(23
|
)
|
|
(13
|
)
|
|
(215
|
)
|
||||
Amortization expense
|
(41
|
)
|
|
(6
|
)
|
|
(4
|
)
|
|
(51
|
)
|
||||
Foreign currency translation
|
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
||||
Other *
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
||||
Balance, December 31, 2016
|
(214
|
)
|
|
(22
|
)
|
|
(17
|
)
|
|
(253
|
)
|
||||
Net balance at December 31, 2016
|
$
|
537
|
|
|
$
|
12
|
|
|
$
|
34
|
|
|
$
|
583
|
|
(Millions of dollars)
For the year ended December 31, 2015 |
Customer &
License/Use Agreements |
|
Non-compete
Agreements |
|
Patents
& Other |
|
Total
|
||||||||
Cost:
|
|
|
|
|
|
|
|
||||||||
Balance, December 31, 2014
|
$
|
693
|
|
|
$
|
37
|
|
|
$
|
47
|
|
|
$
|
777
|
|
Additions (primarily acquisitions)
|
23
|
|
|
2
|
|
|
1
|
|
|
26
|
|
||||
Foreign currency translation
|
(21
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(23
|
)
|
||||
Other *
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Balance, December 31, 2015
|
698
|
|
|
38
|
|
|
47
|
|
|
783
|
|
||||
Less: accumulated amortization:
|
|
|
|
|
|
|
|
||||||||
Balance, December 31, 2014
|
(147
|
)
|
|
(18
|
)
|
|
(9
|
)
|
|
(174
|
)
|
||||
Amortization expense
|
(37
|
)
|
|
(6
|
)
|
|
(4
|
)
|
|
(47
|
)
|
||||
Foreign currency translation
|
7
|
|
|
1
|
|
|
—
|
|
|
8
|
|
||||
Other *
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||
Balance, December 31, 2015
|
(179
|
)
|
|
(23
|
)
|
|
(13
|
)
|
|
(215
|
)
|
||||
Net balance at December 31, 2015
|
$
|
519
|
|
|
$
|
15
|
|
|
$
|
34
|
|
|
$
|
568
|
|
*
|
Other primarily relates to the write-off of fully amortized assets, purchase accounting adjustments and reclassifications.
|
(Millions of dollars)
|
2016
|
|
2015
|
||||
Short-term
|
|
|
|
||||
Commercial paper and U.S. bank borrowings
|
$
|
333
|
|
|
$
|
87
|
|
Other bank borrowings (primarily international)
|
101
|
|
|
163
|
|
||
Total short-term debt
|
434
|
|
|
250
|
|
||
Long-term (a)
|
|
|
|
||||
U.S. borrowings
|
|
|
|
||||
0.75% Notes due 2016 (b)
|
—
|
|
|
400
|
|
||
Floating Rate Notes due 2017
|
150
|
|
|
150
|
|
||
5.20% Notes due 2017 (b)
|
—
|
|
|
325
|
|
||
1.05% Notes due 2017 (c)
|
400
|
|
|
399
|
|
||
1.20% Notes due 2018
|
499
|
|
|
499
|
|
||
1.25% Notes due 2018 (d)
|
478
|
|
|
480
|
|
||
4.50% Notes due 2019
|
598
|
|
|
597
|
|
||
1.90% Notes due 2019
|
499
|
|
|
499
|
|
||
1.50% Euro denominated notes due 2020
|
627
|
|
|
646
|
|
||
2.25% Notes due 2020
|
299
|
|
|
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)
|
575
|
|
|
—
|
|
||
2.65% Notes due 2025
|
397
|
|
|
396
|
|
||
1.625% Euro denominated notes due 2025
|
519
|
|
|
535
|
|
||
3.20% Notes due 2026 (e)
|
725
|
|
|
446
|
|
||
3.55% Notes due 2042
|
662
|
|
|
661
|
|
||
Other
|
12
|
|
|
3
|
|
||
International bank borrowings
|
49
|
|
|
57
|
|
||
Obligations under capital lease
|
7
|
|
|
7
|
|
||
|
9,081
|
|
|
8,981
|
|
||
Less: current portion of long-term debt
|
(164
|
)
|
|
(6
|
)
|
||
Total long-term debt
|
8,917
|
|
|
8,975
|
|
||
Total debt
|
$
|
9,515
|
|
|
$
|
9,231
|
|
(a)
|
Amounts are net of unamortized discounts, premiums and/or debt issuance cost 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)
|
December 31, 2016
and
2015
include a
$4 million
and
$6 million
fair value increase, respectively, related to hedge accounting. See Note 12 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.
|
Millions of dollars
|
Total
Facility
|
|
Borrowings
Outstanding
|
|
Available for
Borrowing
|
|
Expires
|
||||||
Senior Unsecured
|
$
|
2,500
|
|
|
$
|
—
|
|
|
$
|
2,500
|
|
|
December 2019
|
|
|
|
|
|
Fair Value
|
||||||||||||||||||
(Millions of dollars)
|
Notional Amounts
|
|
Assets
|
|
Liabilities
|
||||||||||||||||||
December 31,
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||||||
Derivatives Not Designated as Hedging Instruments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Currency contracts:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance sheet items (a)
|
$
|
2,104
|
|
|
$
|
2,548
|
|
|
$
|
11
|
|
|
$
|
15
|
|
|
$
|
18
|
|
|
$
|
11
|
|
Derivatives Designated as Hedging Instruments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Currency contracts:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance sheet items (a)
|
$
|
38
|
|
|
$
|
38
|
|
|
$
|
3
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest rate contracts:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate swaps (b)
|
475
|
|
|
475
|
|
|
4
|
|
|
6
|
|
|
—
|
|
|
—
|
|
||||||
Total Hedges
|
$
|
513
|
|
|
$
|
513
|
|
|
$
|
7
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total Derivatives
|
$
|
2,617
|
|
|
$
|
3,061
|
|
|
$
|
18
|
|
|
$
|
22
|
|
|
$
|
18
|
|
|
$
|
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.
|
|
|
|
|
|
Unrecognized Gain / (Loss) (a)
|
||||||||
(Millions of dollars)
|
Year
Terminated
|
|
Original
Gain / (Loss)
|
|
December 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
|
)
|
|
(5
|
)
|
|
(6
|
)
|
|||
$600 million 4.50% fixed-rate notes that mature in 2019 (b)
|
2009
|
|
16
|
|
|
4
|
|
|
6
|
|
|||
Total – pre-tax
|
|
|
|
|
$
|
(2
|
)
|
|
$
|
(1
|
)
|
||
Less: income taxes
|
|
|
|
|
1
|
|
|
—
|
|
||||
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 of 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
.
|
(Millions of dollars)
|
Amount of Pre-Tax Gain (Loss)
Recognized in Earnings *
|
||||||||||
December 31,
|
2016
|
|
2015
|
|
2014
|
||||||
Derivatives Not Designated as Hedging Instruments
|
|
|
|
|
|
||||||
Currency contracts:
|
|
|
|
|
|
||||||
Balance sheet items:
|
|
|
|
|
|
||||||
Debt-related
|
$
|
21
|
|
|
$
|
(162
|
)
|
|
$
|
(69
|
)
|
Other balance sheet items
|
4
|
|
|
(8
|
)
|
|
(2
|
)
|
|||
Total
|
$
|
25
|
|
|
$
|
(170
|
)
|
|
$
|
(71
|
)
|
(Millions of dollars)
|
Amount of Gain (Loss)
Recognized in AOCI
|
|
Amount of Gain (Loss) Reclassified from AOCI to the Consolidated Statement of Income
|
||||||||||||||||||
December 31,
|
2016
|
|
2015
|
|
2014
|
|
2016
|
2015
|
2014
|
||||||||||||
Derivatives Designated as Hedging Instruments**
|
|
|
|
|
|
|
|
|
|
||||||||||||
Currency contracts:
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net Investment hedge
|
$
|
(4
|
)
|
|
$
|
—
|
|
|
$
|
(6
|
)
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Forecasted purchases
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Balance sheet items
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
(1
|
)
|
—
|
|
||||||
Interest rate contracts:
|
|
|
|
|
|
|
|
|
|
||||||||||||
Treasury rate locks
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
—
|
|
—
|
|
||||||
Total – Pre tax
|
$
|
(3
|
)
|
|
$
|
1
|
|
|
$
|
(5
|
)
|
|
$
|
(1
|
)
|
$
|
(1
|
)
|
$
|
—
|
|
Less: income taxes
|
—
|
|
|
—
|
|
|
2
|
|
|
1
|
|
—
|
|
—
|
|
||||||
Total - Net of Taxes
|
$
|
(3
|
)
|
|
$
|
1
|
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
$
|
(1
|
)
|
$
|
—
|
|
|
Fair Value Measurements Using
|
||||||||||||||||||||||
(Millions of dollars)
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative assets
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18
|
|
|
$
|
22
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18
|
|
|
$
|
11
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(Millions of dollars)
|
2016
|
|
2015
|
|
2014
|
||||||
Beginning Balance
|
$
|
113
|
|
|
$
|
176
|
|
|
$
|
307
|
|
Net income
|
3
|
|
|
10
|
|
|
12
|
|
|||
Distributions to noncontrolling interest
|
(2
|
)
|
|
(7
|
)
|
|
(9
|
)
|
|||
Redemption value adjustment/accretion *
|
(6
|
)
|
|
(40
|
)
|
|
2
|
|
|||
Foreign currency translation and other
|
7
|
|
|
(17
|
)
|
|
(24
|
)
|
|||
Purchase/divestiture of noncontrolling interest **
|
(104
|
)
|
|
(9
|
)
|
|
(112
|
)
|
|||
Ending Balance
|
$
|
11
|
|
|
$
|
113
|
|
|
$
|
176
|
|
Year Ended December 31,
|
2016
|
|
2015
|
|
2014
|
|||
Dividend yield
|
2.9
|
%
|
|
2.2
|
%
|
|
2.0
|
%
|
Volatility
|
14.4
|
%
|
|
13.5
|
%
|
|
15.2
|
%
|
Risk-free interest rate
|
1.41
|
%
|
|
1.51
|
%
|
|
1.57
|
%
|
Expected term years
|
6
|
|
|
5
|
|
|
5
|
|
Activity
|
Number of
Options
(000’s)
|
|
Average
Exercise
Price
|
|
Average
Remaining
Life
|
|
Aggregate
Intrinsic
Value
|
|||||
Outstanding at January 1, 2016
|
11,273
|
|
|
$
|
96.58
|
|
|
|
|
|
||
Granted
|
2,473
|
|
|
102.23
|
|
|
|
|
|
|||
Exercised
|
(1,821
|
)
|
|
70.17
|
|
|
|
|
|
|||
Cancelled or expired
|
(217
|
)
|
|
111.25
|
|
|
|
|
|
|||
Outstanding at December 31, 2016
|
11,708
|
|
|
$
|
101.58
|
|
|
5.6
|
|
$
|
212
|
|
Exercisable at December 31, 2016
|
8,018
|
|
|
$
|
96.90
|
|
|
4.2
|
|
$
|
177
|
|
|
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
|
|
|
98
|
|
|
98.18
|
|
||
Vested
|
(109
|
)
|
|
103.79
|
|
|
(93
|
)
|
|
105.92
|
|
||
Cancelled and Forfeited
|
(220
|
)
|
|
105.63
|
|
|
(17
|
)
|
|
113.91
|
|
||
Non-vested at December 31, 2016
|
714
|
|
|
$
|
115.72
|
|
|
274
|
|
|
$
|
109.49
|
|
(Millions of dollars)
Year Ended December 31,
|
Pensions
|
|
OPEB
|
||||||||||||||||||||
2016
|
|
2015
|
|
2014
|
|
2016
|
|
2015
|
|
2014
|
|||||||||||||
Service cost
|
$
|
45
|
|
|
$
|
54
|
|
|
$
|
49
|
|
|
$
|
2
|
|
|
$
|
3
|
|
|
$
|
4
|
|
Interest cost
|
100
|
|
|
112
|
|
|
121
|
|
|
6
|
|
|
7
|
|
|
11
|
|
||||||
Expected return on plan assets
|
(157
|
)
|
|
(154
|
)
|
|
(155
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net amortization and deferral
|
59
|
|
|
79
|
|
|
60
|
|
|
(3
|
)
|
|
(2
|
)
|
|
(8
|
)
|
||||||
Net periodic benefit cost before pension settlement charges
|
$
|
47
|
|
|
$
|
91
|
|
|
$
|
75
|
|
|
$
|
5
|
|
|
$
|
8
|
|
|
$
|
7
|
|
Pension settlement charges *
|
4
|
|
|
7
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net periodic benefit cost
|
$
|
51
|
|
|
$
|
98
|
|
|
$
|
82
|
|
|
$
|
5
|
|
|
$
|
8
|
|
|
$
|
7
|
|
(Millions of dollars)
Year Ended December 31,
|
Pensions
|
|
|
||||||||||||||||||||
2016
|
|
2015
|
|
OPEB
|
|||||||||||||||||||
U.S.
|
|
International
|
|
U.S.
|
|
International
|
|
2016
|
|
2015
|
|||||||||||||
Change in Benefit Obligation ("PBO")
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Benefit obligation January 1
|
$
|
1,992
|
|
|
$
|
580
|
|
|
$
|
2,050
|
|
|
$
|
719
|
|
|
$
|
160
|
|
|
$
|
180
|
|
Service cost
|
31
|
|
|
14
|
|
|
36
|
|
|
18
|
|
|
2
|
|
|
3
|
|
||||||
Interest cost
|
70
|
|
|
30
|
|
|
80
|
|
|
32
|
|
|
6
|
|
|
7
|
|
||||||
Participant contributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
10
|
|
||||||
Plan amendment
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
2
|
|
|
(7
|
)
|
|
—
|
|
||||||
Actuarial loss (gain)
|
104
|
|
|
76
|
|
|
(68
|
)
|
|
(41
|
)
|
|
4
|
|
|
(9
|
)
|
||||||
Benefits paid
|
(131
|
)
|
|
(33
|
)
|
|
(106
|
)
|
|
(32
|
)
|
|
(20
|
)
|
|
(24
|
)
|
||||||
Foreign currency translation
|
—
|
|
|
1
|
|
|
—
|
|
|
(118
|
)
|
|
1
|
|
|
(7
|
)
|
||||||
Benefit obligation, December 31
|
$
|
2,066
|
|
|
$
|
666
|
|
|
$
|
1,992
|
|
|
$
|
580
|
|
|
$
|
156
|
|
|
$
|
160
|
|
Accumulated benefit obligation ("ABO")
|
$
|
1,970
|
|
|
$
|
639
|
|
|
$
|
1,900
|
|
|
$
|
551
|
|
|
|
|
|
||||
Change in Plan Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fair value of plan assets, January 1
|
$
|
1,509
|
|
|
$
|
475
|
|
|
$
|
1,607
|
|
|
$
|
561
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Actual return on plan assets
|
117
|
|
|
47
|
|
|
(11
|
)
|
|
18
|
|
|
—
|
|
|
—
|
|
||||||
Company contributions
|
—
|
|
|
11
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
—
|
|
||||||
Benefits paid from plan assets
|
(119
|
)
|
|
(26
|
)
|
|
(87
|
)
|
|
(28
|
)
|
|
—
|
|
|
—
|
|
||||||
Foreign currency translation
|
—
|
|
|
—
|
|
|
—
|
|
|
(91
|
)
|
|
—
|
|
|
—
|
|
||||||
Fair value of plan assets, December 31
|
$
|
1,507
|
|
|
$
|
507
|
|
|
$
|
1,509
|
|
|
$
|
475
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Funded Status, End of Year
|
$
|
(559
|
)
|
|
$
|
(159
|
)
|
|
$
|
(483
|
)
|
|
$
|
(105
|
)
|
|
$
|
(156
|
)
|
|
$
|
(160
|
)
|
Recorded in the Balance Sheet
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other long-term assets
|
$
|
—
|
|
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
41
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other current liabilities
|
(7
|
)
|
|
(5
|
)
|
|
(12
|
)
|
|
(4
|
)
|
|
(12
|
)
|
|
(13
|
)
|
||||||
Other long-term liabilities
|
(552
|
)
|
|
(167
|
)
|
|
(471
|
)
|
|
(142
|
)
|
|
(144
|
)
|
|
(147
|
)
|
||||||
Net amount recognized, December 31
|
$
|
(559
|
)
|
|
$
|
(159
|
)
|
|
$
|
(483
|
)
|
|
$
|
(105
|
)
|
|
$
|
(156
|
)
|
|
$
|
(160
|
)
|
Amounts recognized in accumulated other comprehensive income (loss) consist of:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net actuarial loss (gain)
|
$
|
832
|
|
|
$
|
189
|
|
|
$
|
782
|
|
|
$
|
135
|
|
|
$
|
(20
|
)
|
|
$
|
(25
|
)
|
Prior service cost (credit)
|
—
|
|
|
12
|
|
|
—
|
|
|
11
|
|
|
(8
|
)
|
|
(1
|
)
|
||||||
Deferred tax benefit (Note 5)
|
(318
|
)
|
|
(46
|
)
|
|
(299
|
)
|
|
(37
|
)
|
|
12
|
|
|
11
|
|
||||||
Amount recognized in accumulated other comprehensive income (loss) (Note 7)
|
$
|
514
|
|
|
$
|
155
|
|
|
$
|
483
|
|
|
$
|
109
|
|
|
$
|
(16
|
)
|
|
$
|
(15
|
)
|
|
Pensions
|
|
OPEB
|
||||||||||||
(Millions of dollars)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Current year net actuarial losses (gains)*
|
$
|
172
|
|
|
$
|
38
|
|
|
$
|
4
|
|
|
$
|
(9
|
)
|
Amortization of net actuarial gains (losses)
|
(60
|
)
|
|
(78
|
)
|
|
3
|
|
|
2
|
|
||||
Plan amendment
|
(2
|
)
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
||||
Amortization of prior service credits (costs)
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
||||
Pension settlements (Note 2)
|
(4
|
)
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
||||
Foreign currency translation and other
|
(2
|
)
|
|
(24
|
)
|
|
(2
|
)
|
|
6
|
|
||||
Total recognized in other comprehensive income
|
$
|
105
|
|
|
$
|
(72
|
)
|
|
$
|
(2
|
)
|
|
$
|
(1
|
)
|
*
|
Pension net actuarial losses in
2016
are primarily driven by liability experience as well as lower U.S. discount rates. Pension net actuarial losses in
2015
relate primarily to lower actual returns on plan assets when compared with 2014 offset by higher U.S. discount rates. OPEB net actuarial losses in
2016
are largely due to unfavorable plan experience whereas gains in
2015
relate primarily to higher discount rates and favorable plan experience.
|
(Millions of dollars)
|
Pension
|
|
OPEB
|
||||
Net actuarial loss (gain)
|
$
|
65
|
|
|
$
|
2
|
|
Prior service cost (credit)
|
2
|
|
|
1
|
|
||
|
$
|
67
|
|
|
$
|
3
|
|
(Millions of dollars)
Year Ended December 31,
|
Pensions
|
||||||||||||||
2016
|
|
2015
|
|||||||||||||
U.S.
|
|
International
|
|
U.S.
|
|
International
|
|||||||||
Projected benefit obligation ("PBO")
|
$
|
2,066
|
|
|
$
|
372
|
|
|
$
|
1,992
|
|
|
$
|
336
|
|
Accumulated benefit obligation ("ABO")
|
$
|
1,970
|
|
|
$
|
365
|
|
|
$
|
1,900
|
|
|
$
|
324
|
|
Fair value of plan assets
|
$
|
1,507
|
|
|
$
|
199
|
|
|
$
|
1,509
|
|
|
$
|
188
|
|
|
Pensions
|
|
|
|
|
||||||||||||
|
U.S.
|
|
International
|
|
OPEB
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||
Weighted average assumptions used to determine benefit obligations at December 31,
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Discount rate
|
4.05
|
%
|
|
4.32
|
%
|
|
5.09
|
%
|
|
5.32
|
%
|
|
4.21
|
%
|
|
4.24
|
%
|
Rate of increase in compensation levels
|
3.25
|
%
|
|
3.25
|
%
|
|
3.73
|
%
|
|
3.57
|
%
|
|
N/A
|
|
|
N/A
|
|
Weighted average assumptions used to determine net periodic benefit cost for years ended December 31,
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Discount rate (1)
|
4.32
|
%
|
|
3.95
|
%
|
|
5.32
|
%
|
|
5.36
|
%
|
|
4.24
|
%
|
|
4.48
|
%
|
Rate of increase in compensation levels
|
3.25
|
%
|
|
3.25
|
%
|
|
3.57
|
%
|
|
3.72
|
%
|
|
N/A
|
|
|
N/A
|
|
Expected long-term rate of return on plan assets (2)
|
8.00
|
%
|
|
8.00
|
%
|
|
7.92
|
%
|
|
7.71
|
%
|
|
N/A
|
|
|
N/A
|
|
(1)
|
At the end of 2015, the Company changed the approach used to measure service and interest costs for significant pension and OPEB plans. Through 2015, Praxair measured service and interest costs utilizing a single weighted-average discount rate for each plan derived from the yield curve used to measure the respective plan obligations. Effective in 2016, the Company elected to measure service and interest costs for significant plans by applying the specific spot rates along that yield curve to the plan's expected cash flows ("spot rate approach"). The Company believes the new spot rate approach provides a more precise measurement of service and interest costs by aligning the timing of the plans' expected cash flows to the corresponding spot rates on the yield curve. This change does not affect the measurement of plan obligations nor the funded status of the plans. The Company has accounted for this change as a change in accounting estimate and, accordingly has accounted for it on a prospective basis.
|
(2)
|
The expected long term rate of return on the U.S. and international plan assets is estimated based on the plans' investment strategy and asset allocation, historical capital market performance and, to a lesser extent, historical plan performance. For the U.S. plans, the expected rate of return of
8.00%
was derived based on the target asset allocation of
50%-70%
equity securities (approximately
9.5%
expected return),
20%-40%
fixed income securities (approximately
5.5%
expected return) and
2% - 10%
real estate funds (approximately
7%
expected return). For the international plans, the expected rate of return was derived based on the weighted average target asset allocation of
30%-50%
equity securities (approximately
10%
expected return),
40%-60%
fixed income securities (approximately
7.5%
expected return), and
0%-10%
alternative investments (approximately
7.5%
expected return). For the U.S. plan assets, the actual annualized total returns for the most recent 10-year and 20-year periods ended December 31, 2016 were approximately
4.9%
and
6.7%
, respectively. For the international plan assets, the actual annualized total returns for the same two periods were approximately
6.9%
and
8.6%
, respectively. Changes to plan asset allocations and investment strategy over this time period limit the value of historical plan performance as factor in estimating the expected long term rate of return. For 2017, the expected long-term rate of return on plan assets will be
8.00%
for the U.S. plans. Expected weighted average returns for international plans will vary.
|
|
OPEB
|
||||
Assumed healthcare cost trend rates
|
2016
|
|
2015
|
||
Healthcare cost trend assumed
|
7.00
|
%
|
|
7.00
|
%
|
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)
|
5.00
|
%
|
|
5.00
|
%
|
Year that the rate reaches the ultimate trend rate
|
2020
|
|
|
2020
|
|
|
One-Percentage Point
|
||||||
(Millions of dollars)
|
Increase
|
|
Decrease
|
||||
Effect on the total of service and interest cost components of net OPEB benefit cost
|
$
|
—
|
|
|
$
|
—
|
|
Effect on OPEB benefit obligation
|
$
|
4
|
|
|
$
|
(3
|
)
|
|
U.S.
|
|
International
|
||||||||||||
Asset Category
|
Target
|
|
2016
|
|
2015
|
|
Target
|
|
2016
|
|
2015
|
||||
Equity securities
|
50%-70%
|
|
59
|
%
|
|
62
|
%
|
|
30%-50%
|
|
35
|
%
|
|
50
|
%
|
Fixed income securities
|
20%-40%
|
|
32
|
%
|
|
30
|
%
|
|
40%-60%
|
|
56
|
%
|
|
41
|
%
|
Other
|
2% - 10%
|
|
9
|
%
|
|
8
|
%
|
|
0%-10%
|
|
9
|
%
|
|
9
|
%
|
|
Fair Value Measurements Using
|
|
|
|
|
||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3 **
|
|
Total
|
||||||||||||||||||||||||
(Millions of dollars)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||||||||||
Cash and cash equivalents
|
$
|
3
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
1
|
|
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. equities
|
344
|
|
|
302
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
344
|
|
|
302
|
|
||||||||
International equities
|
37
|
|
|
62
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37
|
|
|
62
|
|
||||||||
Mutual funds
|
2
|
|
|
236
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
236
|
|
||||||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. government bonds
|
—
|
|
|
—
|
|
|
51
|
|
|
50
|
|
|
—
|
|
|
—
|
|
|
51
|
|
|
50
|
|
||||||||
International government bonds
|
—
|
|
|
—
|
|
|
159
|
|
|
89
|
|
|
—
|
|
|
—
|
|
|
159
|
|
|
89
|
|
||||||||
Mutual funds
|
104
|
|
|
91
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
104
|
|
|
91
|
|
||||||||
Corporate bonds
|
—
|
|
|
—
|
|
|
194
|
|
|
163
|
|
|
—
|
|
|
—
|
|
|
194
|
|
|
163
|
|
||||||||
Other:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Insurance contracts
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45
|
|
|
43
|
|
|
45
|
|
|
43
|
|
||||||||
Real Estate Funds
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
135
|
|
|
123
|
|
|
135
|
|
|
123
|
|
||||||||
Total plan assets at fair value,
December 31,
|
$
|
490
|
|
|
$
|
692
|
|
|
$
|
404
|
|
|
$
|
302
|
|
|
$
|
180
|
|
|
$
|
166
|
|
|
$
|
1,074
|
|
|
$
|
1,160
|
|
Pooled funds *
|
|
|
|
|
|
|
|
|
|
|
|
|
940
|
|
|
824
|
|
||||||||||||||
Total fair value plan assets
December 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2,014
|
|
|
$
|
1,984
|
|
(Millions of dollars)
|
Insurance
Contracts
|
|
Real Estate Funds
|
|
Total
|
||||||
Balance, December 31, 2014
|
$
|
53
|
|
|
$
|
110
|
|
|
$
|
163
|
|
Gain/(Loss) for the period
|
(4
|
)
|
|
13
|
|
|
9
|
|
|||
Acquisitions
|
—
|
|
|
—
|
|
|
—
|
|
|||
Foreign currency translation
|
(6
|
)
|
|
—
|
|
|
(6
|
)
|
|||
Balance, December 31, 2015
|
43
|
|
|
123
|
|
|
166
|
|
|||
Gain/(Loss) for the period
|
3
|
|
|
12
|
|
|
15
|
|
|||
Acquisitions
|
—
|
|
|
—
|
|
|
—
|
|
|||
Foreign currency translation
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||
Balance, December 31, 2016
|
$
|
45
|
|
|
$
|
135
|
|
|
$
|
180
|
|
(Millions of dollars)
|
Pensions
|
|
|
||||||||
Year Ended December 31,
|
U.S.
|
|
International
|
|
OPEB
|
||||||
2017
|
$
|
105
|
|
|
$
|
32
|
|
|
$
|
13
|
|
2018
|
115
|
|
|
32
|
|
|
12
|
|
|||
2019
|
122
|
|
|
35
|
|
|
12
|
|
|||
2020
|
123
|
|
|
37
|
|
|
11
|
|
|||
2021
|
126
|
|
|
38
|
|
|
11
|
|
|||
2022-2026
|
661
|
|
|
210
|
|
|
47
|
|
•
|
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. It is difficult to estimate the timing of resolution of legal matters in Brazil.
|
•
|
At
December 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
$225 million
. Praxair has not recorded any liabilities related to such claims based on management judgments, after considering judgments and opinions of outside counsel. Because litigation in Brazil historically takes many years to resolve, it is very difficult to estimate the timing of resolution of these matters; however, it is possible that certain of these matters may be resolved within the near term. The company is vigorously defending against the proceedings.
|
•
|
On September 1, 2010, CADE ("Brazilian Administrative Council for Economic Defense") announced alleged anticompetitive activity on the part of five industrial gas companies in Brazil and imposed fines on all five companies. Originally, CADE imposed a civil fine of R$
2.2 billion
Brazilian reais (US$
675 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$
522 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.
|
(Millions of dollars)
Expiring through December 31,
|
Unconditional
Purchase
Obligations
|
|
Construction
Commitments
|
||||
2017
|
$
|
585
|
|
|
$
|
836
|
|
2018
|
534
|
|
|
271
|
|
||
2019
|
476
|
|
|
125
|
|
||
2020
|
422
|
|
|
—
|
|
||
2021
|
434
|
|
|
—
|
|
||
Thereafter
|
2,645
|
|
|
—
|
|
||
|
$
|
5,096
|
|
|
$
|
1,232
|
|
(Millions of dollars)
|
2016
|
|
2015
|
|
2014
|
||||||
Sales (a)
|
|
|
|
|
|
||||||
North America
|
$
|
5,592
|
|
|
$
|
5,865
|
|
|
$
|
6,436
|
|
Europe
|
1,392
|
|
|
1,320
|
|
|
1,546
|
|
|||
South America
|
1,399
|
|
|
1,431
|
|
|
1,993
|
|
|||
Asia
|
1,555
|
|
|
1,551
|
|
|
1,619
|
|
|||
Surface Technologies
|
596
|
|
|
609
|
|
|
679
|
|
|||
|
$
|
10,534
|
|
|
$
|
10,776
|
|
|
$
|
12,273
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Operating Profit
|
|
|
|
|
|
||||||
North America
|
$
|
1,430
|
|
|
$
|
1,558
|
|
|
$
|
1,580
|
|
Europe
|
273
|
|
|
250
|
|
|
291
|
|
|||
South America
|
257
|
|
|
291
|
|
|
449
|
|
|||
Asia
|
276
|
|
|
289
|
|
|
303
|
|
|||
Surface Technologies
|
102
|
|
|
105
|
|
|
123
|
|
|||
Segment operating profit
|
2,338
|
|
|
2,493
|
|
|
2,746
|
|
|||
Cost reduction program and other charges (Note 2)
|
(100
|
)
|
|
(172
|
)
|
|
(138
|
)
|
|||
Total operating profit
|
$
|
2,238
|
|
|
$
|
2,321
|
|
|
$
|
2,608
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Total Assets (b)
|
|
|
|
|
|
||||||
North America
|
$
|
10,019
|
|
|
$
|
9,748
|
|
|
$
|
10,187
|
|
Europe
|
2,928
|
|
|
2,704
|
|
|
2,996
|
|
|||
South America
|
2,748
|
|
|
2,124
|
|
|
2,718
|
|
|||
Asia
|
2,984
|
|
|
3,113
|
|
|
3,194
|
|
|||
Surface Technologies
|
653
|
|
|
630
|
|
|
674
|
|
|||
|
$
|
19,332
|
|
|
$
|
18,319
|
|
|
$
|
19,769
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Depreciation and Amortization
|
|
|
|
|
|
||||||
North America
|
$
|
614
|
|
|
$
|
609
|
|
|
$
|
611
|
|
Europe
|
155
|
|
|
145
|
|
|
168
|
|
|||
South America
|
133
|
|
|
135
|
|
|
177
|
|
|||
Asia
|
179
|
|
|
176
|
|
|
170
|
|
|||
Surface Technologies
|
41
|
|
|
41
|
|
|
44
|
|
|||
|
$
|
1,122
|
|
|
$
|
1,106
|
|
|
$
|
1,170
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Capital Expenditures and Acquisitions
|
|
|
|
|
|
||||||
North America
|
$
|
989
|
|
|
$
|
869
|
|
|
$
|
837
|
|
Europe
|
402
|
|
|
227
|
|
|
319
|
|
|||
South America
|
232
|
|
|
285
|
|
|
373
|
|
|||
Asia
|
165
|
|
|
208
|
|
|
310
|
|
|||
Surface Technologies
|
40
|
|
|
34
|
|
|
56
|
|
|||
|
$
|
1,828
|
|
|
$
|
1,623
|
|
|
$
|
1,895
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Sales by Product Group
|
|
|
|
|
|
||||||
Atmospheric gases and related
|
$
|
7,329
|
|
|
$
|
7,595
|
|
|
$
|
8,623
|
|
Process gases and other
|
2,609
|
|
|
2,572
|
|
|
2,971
|
|
|||
Surface technologies
|
596
|
|
|
609
|
|
|
679
|
|
|||
|
$
|
10,534
|
|
|
$
|
10,776
|
|
|
$
|
12,273
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Sales by Major Country
|
|
|
|
|
|
||||||
United States
|
$
|
4,623
|
|
|
$
|
4,771
|
|
|
$
|
5,171
|
|
Brazil
|
1,091
|
|
|
1,107
|
|
|
1,511
|
|
|||
Other – foreign
|
4,820
|
|
|
4,898
|
|
|
5,591
|
|
|||
|
$
|
10,534
|
|
|
$
|
10,776
|
|
|
$
|
12,273
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Long-lived Assets by Major Country (c)
|
|
|
|
|
|
||||||
United States
|
$
|
4,922
|
|
|
$
|
4,825
|
|
|
$
|
4,817
|
|
Brazil
|
1,262
|
|
|
986
|
|
|
1,344
|
|
|||
Other – foreign
|
5,293
|
|
|
5,187
|
|
|
5,836
|
|
|||
|
$
|
11,477
|
|
|
$
|
10,998
|
|
|
$
|
11,997
|
|
(a)
|
Sales reflect external sales only. Intersegment sales, primarily from North America to other segments, were not material.
|
(b)
|
Includes equity investments as of December 31, as follows:
|
(Millions of dollars)
|
2016
|
|
2015
|
|
2014
|
||||||
North America
|
$
|
121
|
|
|
$
|
127
|
|
|
$
|
132
|
|
Europe
|
243
|
|
|
195
|
|
|
207
|
|
|||
Asia
|
353
|
|
|
343
|
|
|
354
|
|
|||
|
$
|
717
|
|
|
$
|
665
|
|
|
$
|
693
|
|
(c)
|
Long-lived assets include property, plant and equipment – net.
|
2016
|
1Q (a)
|
|
2Q
|
|
3Q (a)
|
|
4Q
|
|
YEAR (a)
|
||||||||||
Sales
|
$
|
2,509
|
|
|
$
|
2,665
|
|
|
$
|
2,716
|
|
|
$
|
2,644
|
|
|
$
|
10,534
|
|
Cost of sales, exclusive of depreciation and amortization
|
$
|
1,381
|
|
|
$
|
1,468
|
|
|
$
|
1,533
|
|
|
$
|
1,478
|
|
|
$
|
5,860
|
|
Depreciation and amortization
|
$
|
272
|
|
|
$
|
281
|
|
|
$
|
284
|
|
|
$
|
285
|
|
|
$
|
1,122
|
|
Operating profit
|
$
|
554
|
|
|
$
|
588
|
|
|
$
|
497
|
|
|
$
|
599
|
|
|
$
|
2,238
|
|
Net income – Praxair, Inc.
|
$
|
356
|
|
|
$
|
399
|
|
|
$
|
339
|
|
|
$
|
406
|
|
|
$
|
1,500
|
|
Basic Per Share Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
$
|
1.25
|
|
|
$
|
1.40
|
|
|
$
|
1.19
|
|
|
$
|
1.42
|
|
|
$
|
5.25
|
|
Weighted average shares (000’s)
|
285,429
|
|
|
285,702
|
|
|
285,858
|
|
|
285,720
|
|
|
285,677
|
|
|||||
Diluted Per Share Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
$
|
1.24
|
|
|
$
|
1.39
|
|
|
$
|
1.18
|
|
|
$
|
1.41
|
|
|
$
|
5.21
|
|
Weighted average shares (000’s)
|
286,665
|
|
|
287,727
|
|
|
288,195
|
|
|
287,956
|
|
|
287,757
|
|
2015
|
1Q
|
|
2Q (a)
|
|
3Q (a)
|
|
4Q
|
|
YEAR (a)
|
||||||||||
Sales
|
$
|
2,757
|
|
|
$
|
2,738
|
|
|
$
|
2,686
|
|
|
$
|
2,595
|
|
|
$
|
10,776
|
|
Cost of sales, exclusive of depreciation and amortization
|
$
|
1,530
|
|
|
$
|
1,516
|
|
|
$
|
1,488
|
|
|
$
|
1,426
|
|
|
$
|
5,960
|
|
Depreciation and amortization
|
$
|
277
|
|
|
$
|
278
|
|
|
$
|
276
|
|
|
$
|
275
|
|
|
$
|
1,106
|
|
Operating profit
|
$
|
623
|
|
|
$
|
480
|
|
|
$
|
594
|
|
|
$
|
624
|
|
|
$
|
2,321
|
|
Net income – Praxair, Inc.
|
$
|
416
|
|
|
$
|
308
|
|
|
$
|
401
|
|
|
$
|
422
|
|
|
$
|
1,547
|
|
Basic Per Share Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
$
|
1.44
|
|
|
$
|
1.07
|
|
|
$
|
1.40
|
|
|
$
|
1.48
|
|
|
$
|
5.39
|
|
Weighted average shares (000’s)
|
289,143
|
|
|
287,939
|
|
|
285,651
|
|
|
285,288
|
|
|
287,005
|
|
|||||
Diluted Per Share Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
$
|
1.43
|
|
|
$
|
1.06
|
|
|
$
|
1.40
|
|
|
$
|
1.47
|
|
|
$
|
5.35
|
|
Weighted average shares (000’s)
|
291,652
|
|
|
290,102
|
|
|
287,311
|
|
|
286,856
|
|
|
289,055
|
|
(a)
|
2016
and
2015
include the impact of the following charges (see Notes 2, 11 & 16):
|
(Millions of dollars)
|
Operating
Profit/
(Loss)
|
|
Net
Income/
(Loss)
|
|
Diluted Earnings Per Share
|
||||||
Bond Redemption -Q1
|
$
|
—
|
|
|
$
|
(10
|
)
|
|
$
|
(0.04
|
)
|
Cost reduction program and other charges - Q3
|
(96
|
)
|
|
(63
|
)
|
|
(0.22
|
)
|
|||
Pension settlement charge - Q3
|
(4
|
)
|
|
(3
|
)
|
|
(0.01
|
)
|
|||
Year 2016
|
$
|
(100
|
)
|
|
$
|
(76
|
)
|
|
$
|
(0.27
|
)
|
|
|
|
|
|
|
||||||
Cost reduction program and other charges - Q2
|
$
|
(146
|
)
|
|
$
|
(112
|
)
|
|
$
|
(0.39
|
)
|
Cost reduction program and other charges - Q3
|
(19
|
)
|
|
(13
|
)
|
|
(0.04
|
)
|
|||
Pension settlement charge - Q3
|
(7
|
)
|
|
(5
|
)
|
|
(0.02
|
)
|
|||
Year 2015
|
$
|
(172
|
)
|
|
$
|
(130
|
)
|
|
$
|
(0.45
|
)
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
Plan Category
|
Number of securities to
be issued upon exercise
of outstanding options,
warrants and rights (a)
|
|
Weighted-average
exercise price of
outstanding options,
warrants and rights (b)
|
|
Number of securities
remaining available for
future issuance under
equity compensation plans
(excluding securities
reflected in column (a)) (c)
|
||||
Equity compensation plans approved by shareholders
|
12,695,921
|
|
(1)
|
$
|
93.67
|
|
|
3,993,818
|
|
Equity compensation plans not approved by shareholders
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
12,695,921
|
|
|
$
|
93.67
|
|
|
3,993,818
|
|
(1)
|
This amount includes 274,422 restricted shares and 713,620 performance shares. Up to an additional 713,620 performance shares could be issued if performance goals are achieved at the maximum specified targets. See Note 15 to the consolidated financial statements.
|
(a)
|
The following documents are filed as part of this report:
|
(1)
|
The company’s
2016
Consolidated Financial Statements and the Report of the Independent Registered Public Accounting Firm are included in Part II, Item 8. Financial Statements and Supplementary Data.
|
(2)
|
Financial Statement Schedules – All financial statement schedules have been omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.
|
(3)
|
Exhibits – The exhibits filed as part of this Annual Report on Form 10-K are listed in the accompanying index.
|
|
|
PRAXAIR, INC.
|
||||
|
|
(Registrant)
|
||||
Date: March 1, 2017
|
By:
|
/s/
K
ELCEY
E
.
H
OYT
|
||||
|
|
Kelcey E. Hoyt
Vice President and Controller
(On behalf of the Registrant and
as Chief Accounting Officer)
|
/s/ S
TEPHEN
F. A
NGEL
|
|
/s/ M
ATTHEW
J. W
HITE
|
|
/s/ O
SCAR
DE
P
AULA
B
ERNARDES
|
Stephen F. Angel
Chairman, President,
Chief Executive Officer and
Director
|
|
Matthew J. White
Senior Vice President and Chief Financial Officer
|
|
Oscar de Paula Bernardes
Director
|
|
|
|
||
/s/ N
ANCE
K. D
ICCIANI
|
|
/s/ E
DWARD
G. G
ALANTE
|
|
/s/ I
RA
D. H
ALL
|
Nance K. Dicciani
Director
|
|
Edward G. Galante
Director
|
|
Ira D. Hall
Director
|
|
|
|
||
/s/ R
AYMOND
W. L
E
B
OEUF
|
|
/s/ L
ARRY
D. M
C
V
AY
|
|
/s/
MARTIN H. RICHENHAGEN
|
Raymond W. LeBoeuf
Director
|
|
Larry D. McVay
Director
|
|
Martin H. Richenhagen
Director
|
|
|
|
||
/s/ W
AYNE
T. S
MITH
|
|
/s/ R
OBERT
L. W
OOD
|
|
|
Wayne T. Smith
Director
|
|
Robert L. Wood
Director
|
|
|
Exhibit No.
|
|
Description
|
|
|
|
3.01
|
|
Restated Certificate of Incorporation of Praxair, Inc. as filed with the Secretary of State of the State of Delaware on April 27, 2012 (Filed as Exhibit 3.01 to the Company’s Current Report on Form 8-K dated April 30, 2012, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
3.02
|
|
Amended and Restated By-Laws of Praxair, Inc. (Filed as Exhibit 3.02 to the Company’s Current Report on Form 8-K dated January 29, 2016, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
3.03
|
|
Certificate of Designations for the 7.48% Cumulative Preferred Stock, Series A (Filed on February 13, 1997 as Exhibit 3.3 to Amendment #1 to the Company’s Registration Statement on Form S-3, Registration No. 333-18141).
|
|
|
|
3.04
|
|
Certificate of Designations for the 6.75% Cumulative Preferred Stock, Series B (Filed on February 13, 1997 as Exhibit 3.4 to Amendment #1 to the Company’s Registration Statement on Form S-3, Registration No. 333-18141).
|
|
|
|
4.01
|
|
Common Stock Certificate (Filed as Exhibit 4.01 to the Company’s Registration Statement on Form 10, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
4.02a
|
|
Indenture, dated as of July 15, 1992, between Praxair, Inc. and U.S. Bank National Association, as the ultimate successor trustee to Bank of America, Illinois, formerly Continental Bank, National Association (Filed as Exhibit 4 to the Company’s Current Report on Form 8-K dated March 19, 2007, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
4.02b
|
|
Form of Subordinated Indenture was filed as Exhibit 4.3 to the Company’s Form S-3 filed on May 12, 2015, and is incorporated herein by reference.
|
|
|
|
4.03
|
|
Copies of the agreements relating to long-term debt which are not required to be filed as exhibits to this Annual Report on Form 10-K will be furnished to the Securities and Exchange Commission upon request.
|
|
|
|
4.04
|
|
Series A Preferred Stock Certificate (Filed on February 7, 1997 as Exhibit 4.3 to Amendment #1 to the Company’s Registration Statement on Form S-3, Registration No. 333-18141).
|
|
|
|
4.05
|
|
Series B Preferred Stock Certificate (Filed on February 7, 1997 as Exhibit 4.4 to Amendment #1 to the Company’s Registration Statement on Form S-3, Registration No. 333-18141).
|
|
|
|
*10.01
|
|
Restated 2002 Praxair, Inc. Long Term Incentive Plan (Filed as Exhibit 10.01 to the Company’s 2003 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
*10.01a
|
|
Amendment, dated as of October 24, 2006, to the Amended and Restated 2002 Praxair, Inc. Long Term Incentive Plan (Filed as Exhibit 10.01a to the Company’s 2006 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
*10.01b
|
|
Amendment, dated as of January 23, 2007, to the Amended and Restated 2002 Praxair, Inc. Long Term Incentive Plan (Filed as Exhibit 10.01b to the Company’s 2006 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
*10.01c
|
|
Form of Standard Option Award under the 2002 Praxair, Inc. Long Term Incentive Plan (Filed as Exhibit 10.01c to the Company’s 2007 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
*10.01d
|
|
Form of Transferable Option Award under the 2002 Praxair, Inc. Long Term Incentive Plan (Filed as Exhibit 10.01d to the Company’s 2007 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
|
Exhibit No.
|
|
Description
|
|
|
|
*10.02
|
|
Form of Executive Severance Compensation Agreement effective January 1, 2009 (Filed as Exhibit 10.02 to the Company’s 2008 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
*10.02a
|
|
Form of Amendment, effective December 31, 2012, to Executive Severance Compensation Agreements that were effective January 1, 2009 (Filed as Exhibit 10.1 to the Company's Current Report on Form 8-K dated December 14, 2012, Filing No. 1-11037, and incorporated herein by reference.
|
|
|
|
*10.02b
|
|
Form of Executive Severance Compensation Agreement effective January 1, 2010 (Filed as Exhibit 10.02 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2010, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
*10.02c
|
|
Form of Amendment, effective December 31, 2012, to Executive Severance Compensation Agreements that were effective January 1, 2010 (Filed as Exhibit 10.02c to the Company’s 2012 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
*10.02d
|
|
Form of Executive Severance Compensation Agreement effective January 1, 2013 (Filed as Exhibit 10.02d to the Company’s 2012 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
*10.03
|
|
Praxair, Inc. Variable Compensation Plan amended and restated effective April 24, 2012 (Filed as Exhibit 10.01 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
*10.04
|
|
Amended and Restated 1995 Stock Option Plan for Non-Employee Directors (Filed as Exhibit 10.04 to the Company’s 2003 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
*10.04a
|
|
First Amendment, dated as of October 24, 2006, to the Amended and Restated 1995 Stock Option Plan for Non-Employee Directors (Filed as Exhibit 10.04a to the Company’s 2006 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
*10.04b
|
|
2005 Equity Compensation Plan for Non-Employee Directors of Praxair, Inc. amended and restated effective January 26, 2010 (Filed as Exhibit 10.04b to the Company’s 2009 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
*10.04c
|
|
Form of Option Award under the 2005 Equity Compensation Plan for Non-Employee Directors of Praxair, Inc (Filed as Exhibit 10.04a to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2005, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
*10.05a
|
|
Praxair, Inc. Supplemental Retirement Income Plan A effective January 1, 2008 (Filed as Exhibit 10.05a to the Company’s 2008 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
*10.05b
|
|
First amendment to the Praxair, Inc. Supplemental Retirement Income Plan A effective January 1, 2010 (Filed as Exhibit 10.05b to the Company’s 2009 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
*10.05c
|
|
Second Amendment to Praxair, Inc. Supplemental Retirement Income Plan A effective February 28, 2017 is filed herewith.
|
|
|
|
*10.05d
|
|
Praxair, Inc. Supplemental Retirement Income Plan B amended and restated effective December 31, 2007 (Filed as Exhibit 10.05b to the Company’s 2008 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
*10.05e
|
|
First amendment to the Praxair, Inc. Supplemental Retirement Income Plan B effective January 1, 2010 (Filed as Exhibit 10.05d to the Company’s 2009 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
*10.05f
|
|
Second Amendment to Praxair, Inc. Supplemental Retirement Income Plan B effective July 1, 2012 (Filed as Exhibit 10.05e to the Company’s 2012 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
*10.05g
|
|
Third Amendment to Praxair, Inc. Supplemental Retirement Income Plan B effective February 28, 2017 is filed herewith.
|
|
|
Exhibit No.
|
|
Description
|
|
|
|
*10.05h
|
|
Praxair, Inc. Equalization Benefit Plan amended and restated effective December 31, 2007 (Filed as Exhibit 10.05c to the Company’s 2008 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
*10.05i
|
|
First amendment to the Praxair, Inc. Equalization Benefit Plan effective January 1, 2010 (Filed as Exhibit 10.05f to the Company’s 2009 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
*10.05j
|
|
Second Amendment to the Praxair, Inc. Equalization Benefit Plan effective February 28, 2017 is filed herewith.
|
|
|
|
*10.06
|
|
Praxair, Inc. Director’s Fees Deferral Plan amended and restated effective January 26, 2010 (Filed as Exhibit 10.06 to the Company’s 2009 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
*10.07
|
|
Praxair, Inc. Compensation Deferral Program Amended and Restated as of July 15, 2014 (Filed as Exhibit 10.01 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
*10.07a
|
|
First Amendment to the Praxair Compensation Deferral Program effective February 28, 2017 is filed herewith.
|
|
|
|
10.08
|
|
Transfer Agreement dated January 1, 1989, between Union Carbide Corporation and the registrant (Filed as Exhibit 10.06 to the Company’s Registration Statement on Form 10, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
10.08a
|
|
Amendment No. 1 dated as of December 31, 1989, to the Transfer Agreement (Filed as Exhibit 10.07 to the Company’s Registration Statement on Form 10, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
10.08b
|
|
Amendment No. 2 dated as of July 2, 1990, to the Transfer Agreement (Filed as Exhibit 10.08 to the Company’s Registration Statement on Form 10, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
10.08c
|
|
Amendment No. 3 dated as of January 2, 1991, to the Transfer Agreement (Filed as Exhibit 10.09 to the Company’s Registration Statement on Form 10, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
10.09
|
|
Transfer Agreement dated January 1, 1989, between Union Carbide Corporation and Union Carbide Coatings Service Corporation (Filed as Exhibit 10.14 to the Company’s Registration Statement on Form 10, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
10.09a
|
|
Amendment No. 1 dated as of December 31, 1989, to the Transfer Agreement (Filed as Exhibit 10.15 to the Company’s Registration Statement on Form 10, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
10.09b
|
|
Amendment No. 2 dated as of July 2, 1990, to the Transfer Agreement (Filed as Exhibit 10.16 to the Company’s Registration Statement on Form 10, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
10.10
|
|
Additional Provisions Agreement dated as of June 4, 1992 (Filed as Exhibit 10.21 to the Company’s Registration Statement on Form 10, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
10.11
|
|
Amended and Restated Realignment Indemnification Agreement dated as of June 4, 1992 (Filed as Exhibit 10.23 to the Company’s Registration Statement on Form 10, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
10.12
|
|
Environmental Management, Services and Liabilities Allocation Agreement dated as of January 1, 1990 (Filed as Exhibit 10.13 to the Company’s Registration Statement on Form 10, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
10.12a
|
|
Amendment No. 1 to the Environmental Management, Services and Liabilities Allocation Agreement dated as of June 4, 1992 (Filed as Exhibit 10.22 to the Company’s Registration Statement on Form 10, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
Exhibit No.
|
|
Description
|
|
|
|
10.13
|
|
Danbury Lease-Related Services Agreement dated as of June 4, 1992 (Filed as Exhibit 10.24 to the Company’s Registration Statement on Form 10, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
10.13a
|
|
First Amendment to Danbury Lease-Related Services Agreement (Filed as Exhibit 10.13a to the Company’s 1994 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
10.14
|
|
Danbury Lease Agreements, as amended (Filed as Exhibit 10.26 to the Company’s Registration Statement on Form 10, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
10.14a
|
|
Second Amendment to Linde Data Center Lease (Danbury) (Filed as Exhibit 10.14a to the Company’s 1993 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
10.14b
|
|
Fourth Amendment to Carbide Center Lease (Filed as Exhibit 10.14b to the Company’s 1993 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
10.14c
|
|
Third Amendment to Linde Data Center Lease (Filed as Exhibit 10.14c to the Company’s 1994 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
10.14d
|
|
Fifth Amendment to Carbide Center Lease (Filed as Exhibit 10.14d to the Company’s 1994 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
10.14e
|
|
Sixth Amendment to Carbide Center Lease (Filed as Exhibit 10.14e to the Company’s 2004 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
10.15
|
|
Employee Benefits Agreement dated as of June 4, 1992 (Filed as Exhibit 10.25 to the Company’s Registration Statement on Form 10, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
10.15a
|
|
First Amendatory Agreement to the Employee Benefits Agreement (Filed as Exhibit 10.15a to the Company’s 1994 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
10.16
|
|
Tax Disaffiliation Agreement dated as of June 4, 1992 (Filed as Exhibit 10.20 to the Company’s Registration Statement on Form 10, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
10.17
|
|
Credit Agreement dated as of December 19, 2014 among Praxair, Inc. and the Eligible Subsidiaries Referred to therein, the Lenders listed therein, and Bank of America, N.A., as Administrative Agent, Citibank N.A., Deutsche Bank Securities Inc. and HSBC Securities (USA) Inc., as Syndication Agents was filed as Exhibit 10.1 to the Company’s current report on Form 8-K, dated December 22, 2014, Filing No. 1-11037, and is incorporated herein by reference.
|
|
|
|
*10.18
|
|
Praxair, Inc. Plan for Determining Performance-Based Awards Under Section 162(m) (Filed as Exhibit 10.01 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
*10.19
|
|
Service Credit Arrangement for Stephen F. Angel dated May 23, 2007 was filed as Exhibit 10.20 to the Company’s Form 8-K filed on May 24, 2007 and is incorporated herein by reference.
|
|
|
|
*10.20
|
|
2009 Praxair, Inc. Long Term Incentive Plan as amended on April 27, 2010, January 25, 2011 and October 23, 2012 was filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K dated December 14, 2012 Filing No. 1-11037, and incorporated herein by reference.
|
|
|
|
*10.21
|
|
Form of Standard Option Award under the 2009 Praxair, Inc. Long Term Incentive Plan (Filed as Exhibit 10.22 to the Company’s 2009 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
*10.22
|
|
Form of Transferable Option Award under the 2009 Praxair, Inc. Long Term Incentive Plan (Filed as Exhibit 10.23 to the Company’s 2009 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
Exhibit No.
|
|
Description
|
|
|
|
*10.23
|
|
Form of Restricted Stock Unit Award under the 2009 Praxair, Inc. Long Term Incentive Plan (Filed as Exhibit 10.24 to the Company’s 2009 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
*10.24a
|
|
Form of Performance Share Unit Award under the 2009 Praxair, Inc. Long Term Incentive Plan for grants made from 2010-2013 (Filed as Exhibit 10.25 to the Company’s 2009 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
*10.24b
|
|
Form of Performance Share Unit Award under the 2009 Praxair, Inc. Long Term Incentive Plan for grants made in 2013-2014 with Earnings Per Share performance metrics (Filed as Exhibit 10.24b to the Company’s 2012 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
*10.24c
|
|
Form of Performance Share Unit Award under the 2009 Praxair, Inc. Long Term Incentive Plan for grants made in 2013-2014 with Return on Capital performance metrics (Filed as Exhibit 10.24c to the Company’s 2012 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
*10.25
|
|
Amended and Restated 2009 Praxair, Inc. Long Term Incentive Plan (Filed as Exhibit 10.01 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
*10.26
|
|
Form of Transferable Option Award under the Amended and Restated 2009 Praxair, Inc. Long Term Incentive Plan for grants made in 2015 and thereafter (Filed as Exhibit 10.26 to the Company’s 2014 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
*10.27
|
|
Form of Restricted Stock Unit Award under the Amended and Restated 2009 Praxair, Inc. Long Term Incentive Plan for grants made in 2015 and thereafter (Filed as Exhibit 10.27 to the Company’s 2014 Annual Report on Form 10-K, Filing No. 1-11037, and
incorporated herein by reference).
|
|
|
|
*10.28a
|
|
Form of Performance Share Unit Award under the Amended and Restated 2009 Praxair, Inc. Long Term Incentive Plan for grants made in 2015 and thereafter with Earnings Per Share performance metrics (Filed as Exhibit 10.28A to the Company’s 2014 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
*10.28b
|
|
Form of Performance Share Unit Award under the Amended and Restated 2009 Praxair, Inc. Long Term Incentive Plan for grants made in 2015 and thereafter with Return on Capital performance metrics (Filed as Exhibit 10.28B to the Company’s 2014 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
*10.28c
|
|
Form of Performance Share Unit Award under the Amended and Restated 2009 Praxair, Inc. Long Term Incentive Plan for grants made in 2016 and thereafter with Total Shareholder Return performance metrics (Filed as Exhibit 10.28C to the Company’s 2015 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
|
|
|
|
*10.28d
|
|
Form of Non-Employee Director Restricted Stock Unit Award under the Amended and Restated 2009 Praxair, Inc. Long Term Incentive Plan (Filed as Exhibit 10.01 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, Filing No. 1-11037, and incorporated herein by reference.
|
|
|
|
10.29
|
|
Form of Standard Underwriting Provisions was filed as Exhibit 1.1 to the Company’s Registration Statement on Form S-3 filed on May 12, 2015, and is incorporated herein by reference.
|
|
|
|
10.30
|
|
Terms Agreement dated March 4, 2014 among the Company and Credit Suisse Securities (Europe) Limited, Deutsche Bank AG, London Branch and HSBC Bank plc, acting on behalf of the several underwriters for the issuance and sale of €600,000,000 1.500% Notes due 2020, was filed as Exhibit 1 to the Company’s current report on Form 8-K dated March 5, 2014, Filing No. 1-11037, and incorporated herein by reference.
|
|
|
|
Exhibit No.
|
|
Description
|
|
|
|
10.31
|
|
Terms Agreement dated November 21, 2014 among the Company and Citigroup Global Markets Limited, Deutsche Bank AG, London Branch, HSBC Bank plc and Merrill Lynch International, acting on behalf of the several underwriters for the issuance and sale of €500,000,000 1.625% Notes due 2025, was filed as Exhibit 1 to the Company’s current report on Form 8-K dated November 24, 2014, Filing No. 1-11037, and incorporated herein by reference.
|
|
|
|
10.32
|
|
Terms Agreement dated September 21, 2015 among the Company and Citigroup Global Markets Inc., Deutsche Bank Securities Inc., HSBC Securities (USA) Inc. and Mitsubishi UFJ Securities (USA), acting on behalf of the several underwriters for the issuance and sale of $300,000,000 2.250% Notes due 2020 and $450,000,000 3.200% Notes due 2026, was filed as Exhibit 1 to the Company’s current report on Form 8-K dated September 24, 2015, Filing No. 1-11037, and incorporated herein by reference.
|
|
|
|
10.33
|
|
Terms Agreement dated February 4, 2016 among the Company and Credit Suisse Securities (Europe) Limited, Deutsche Bank AG, London Branch and Merrill Lynch International, acting on behalf of the several underwriters for the issuance and sale of €550,000,000 1.200% Notes due 2024, was filed as Exhibit 1.1 to the Company’s current report on Form 8-K dated February 8, 2016, Filing No. 1-11037, and incorporated herein by reference.
|
|
|
|
10.34
|
|
Terms Agreement dated February 4, 2016 among the Company and J.P. Morgan Securities LLC, Mizuho Securities USA Inc. and Wells Fargo Securities, LLC, acting on behalf of the several underwriters for the issuance and sale of $275,000,000 3.200% Notes due 2026, was filed as Exhibit 1.2 to the Company’s current report on Form 8-K dated February 8, 2016, Filing No. 1-11037, and incorporated herein by reference.
|
|
|
|
12.01
|
|
Computation of Ratio of Earnings to Fixed Charges.
|
|
|
|
21.01
|
|
Subsidiaries of Praxair, Inc.
|
|
|
|
23.01
|
|
Consent of Independent Registered Public Accounting Firm.
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
RATIO OF EARNINGS TO FIXED CHARGES
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
Praxair, Inc. and Subsidiaries
|
|
|||||||||||||||
|
|
|
|
|
|
|
Exhibit 12.01
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
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
|
$
|
2,048
|
|
|
$
|
2,160
|
|
|
$
|
2,395
|
|
|
$
|
2,447
|
|
|
$
|
2,296
|
|
Capitalized interest
|
(34
|
)
|
|
(33
|
)
|
|
(38
|
)
|
|
(69
|
)
|
|
(70
|
)
|
|||||
Depreciation of capitalized interest
|
19
|
|
|
22
|
|
|
27
|
|
|
20
|
|
|
20
|
|
|||||
Dividends from less than 50%-owned companies carried at equity
|
8
|
|
|
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
|
$
|
2,041
|
|
|
$
|
2,160
|
|
|
$
|
2,390
|
|
|
$
|
2,408
|
|
|
$
|
2,253
|
|
Fixed charges
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest on long-term and short-term debt
|
$
|
190
|
|
|
$
|
161
|
|
|
$
|
213
|
|
|
$
|
178
|
|
|
$
|
141
|
|
Capitalized interest
|
34
|
|
|
33
|
|
|
38
|
|
|
69
|
|
|
70
|
|
|||||
Rental expenses representative of an interest factor
|
47
|
|
|
47
|
|
|
52
|
|
|
43
|
|
|
39
|
|
|||||
Total fixed charges
|
$
|
271
|
|
|
$
|
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
|
$
|
2,312
|
|
|
$
|
2,401
|
|
|
$
|
2,693
|
|
|
$
|
2,698
|
|
|
$
|
2,503
|
|
RATIO OF EARNINGS TO FIXED CHARGES
|
8.5
|
|
|
10.0
|
|
|
8.9
|
|
|
9.3
|
|
|
10.0
|
|
|
Place of Incorporation
|
10 Riverview Drive LLC
|
Delaware
|
Acetylene Oxygen Company
|
Texas
|
Almacenes Geneva S.A.
|
Panama
|
Almacenes Geneva-David, S.A.
|
Panama
|
Antwerpse Chemische Bedrijven (LCB) N. V.
|
Belgium
|
Argon (Isotank) Limited
|
Scotland
|
Beijing Praxair Huashi Carbon Dioxide Co., Ltd.
|
China
|
Beijing Praxair, Inc.
|
China
|
Coatec Gesellschaft für Oberflächenveredelung mbH
|
Germany
|
Consultora Rynuter S.A.
|
Uruguay
|
Dablioeme Participacoes Ltda
|
Brazil
|
Distribuciones Invegas SCA
|
Venezuela
|
Dominion Gas Asia Pacific Pte Limited
|
Singapore
|
Dominion Gas Asia Pte Limited
|
Singapore
|
Dominion Oilfield Services Limited
|
Scotland
|
Dominion Oilfield Services Limited
|
Ghana
|
Dominion Technology Gases Holdings Limited
|
Scotland
|
Dominion Technology Gases Investment Limited
|
Scotland
|
Dominion Technology Gases Limited
|
Scotland
|
Domolife S.r.l.
|
Italy
|
Dryce S.r.l.
|
Italy
|
Empresas Geneva, S.A.
|
Panama
|
Famex Comercio Atacadista de Gas Carbonico Ltda.
|
Brazil
|
Famex Rio Comercio de Gas Carbonico e Equipamentos de Combate a Incendio Ltda.
|
Brazil
|
Gama Gases Especials Ltda.
|
Brazil
|
Garland Welding Supply Company
|
Texas
|
Gases de Ensenada S.A.
|
Argentina
|
Gases Industriales, S.A.
|
Panama
|
Gases Tachira S.A.
|
Venezuela
|
GemGas S.r.l.
|
Italy
|
Global Gas Supplies (Aberdeen) Limited
|
Scotland
|
Global Gas Supplies Limited
|
Scotland
|
GNC Matco Compressco de Gus Natural Ltda.
|
Brazil
|
GNL Gemini Comercializacao e Logistica de Gas Ltda.
|
Brazil
|
Grenslandgas G.m.b.H.
|
Germany
|
Great Lakes Street, Inc.
|
Delaware
|
Helium Centre Pte. Ltd.
|
Singapore
|
Industria Paraguaya de Gases S.r l
|
Paraguay
|
Industria Venezoelana de Gas INVEGAS, S.C.A.
|
Venezuela
|
Inmobiliaria Radial, S.A.
|
Panama
|
Inversionista Metropolitana, S.A.
|
Panama
|
Joint Stock Company “Volgograd Oxygen Plant”
|
Russia
|
Kelvin Finance Company Limited
|
Ireland
|
Kosmoid Finance UC
|
Ireland
|
Kunshan Praxair Co., Ltd.
|
China
|
Limited Liability Company Praxair Azot Togliatti
|
Russia
|
Limited Liability Company Praxair Titanium Valley
|
Russia
|
Limited Liability Company Praxair Rus
|
Russia
|
Limited Liability Company Praxair Volgograd
|
Russia
|
Liquid Carbonic Corporation
|
Delaware
|
Liquid Carbonic del Paraguay S.A.
|
Paraguay
|
Liquid Carbonic of Oklahoma, Inc.
|
Oklahoma
|
Liquido Carbonico Colombiana S.A.
|
Colombia
|
Madison Gas LLC
|
Delaware
|
Malaysian Industrial Gas Company Sdn. Bhd.
|
Malaysia
|
Medical Gases S.r.l.
|
Argentina
|
Nanjing Praxair Nanlian Industrial Gases Co., Ltd.
|
China
|
Nitropet, S.A. de C.V.
|
Mexico
|
NOxBOX Ltd.
|
United Kingdom
|
NuCO2 Inc.
|
Delaware
|
NuCO2 Management LLC
|
Delaware
|
NuCO2 LLC
|
Delaware
|
NuCO2 Supply LLC
|
Delaware
|
Nuova Pescarito S.r.l.
|
Italy
|
Old Danford S.A.
|
Uruguay
|
Oxigenos de Colombia Ltda.
|
Colombia
|
Oximesa S.L.
|
Spain
|
PG Technologies, LLC
|
Delaware
|
PG Technologies Pte. Ltd.
|
Singapore
|
Praxair & M.I. Services, S.r.l.
|
Italy
|
Praxair (Anhui) Industrial Gases Co., Ltd.
|
China
|
Praxair (Beijing) Industrial Gases Co., Ltd.
|
China
|
Praxair (Beijing) Semiconductor Gases Co., Ltd.
|
China
|
Praxair (China) Investment Co., Ltd.
|
China
|
Praxair (Guangzhou) Industrial Gases Co., Ltd.
|
China
|
Praxair (Hainan) Indusrial Gases Co., Ltd.
|
China
|
Praxair (Hefei) Industrial Gases Co., Ltd.
|
China
|
Praxair (Huizhou) Industrial Gases Limited
|
China
|
Praxair (Jiaxing) Industrial Gases Co., Ltd.
|
China
|
Praxair (Jining) Industrial Gases Co., Ltd.
|
China
|
Praxair (Nanjing) Carbon Dioxide Co., Ltd.
|
China
|
Praxair (Shanghai) Co., Ltd.
|
China
|
Praxair (Shanghai) Industrial Gases Co., Ltd.
|
China
|
Praxair (Shanghai) Semiconductor Gases Co., Ltd.
|
China
|
Praxair (Thailand) Company Limited
|
Thailand
|
Praxair (Wuhan), Inc.
|
China
|
Praxair (Yangzhou) Application Technology Co., Ltd.
|
China
|
Praxair (Yangzhou) Industrial Gases Co., Ltd.
|
China
|
Praxair (Zhengjing) Industrial Gas Co. Ltd.
|
China
|
Praxair Alberta Ltd.
|
Alberta
|
Praxair Argentina S.R.L.
|
Argentina
|
Praxair Asia, Inc.
|
Delaware
|
Praxair Bahrain B.S.C.
|
Kingdom of Bahrain
|
Praxair B.V.
|
Netherlands
|
Praxair Bolivia Srl
|
Luxembourg
|
Praxair Canada Inc.
|
Canada
|
Praxair Chemax Semiconductor Materials Co. Ltd.
|
Taiwan
|
Praxair Chile Ltda.
|
Chile
|
Praxair Colonia Limitada
|
Uruguay
|
Praxair Consultoria y Administracion S de RL de CV
|
Mexico
|
Praxair Costa Rica, S.A.
|
Costa Rica
|
Praxair Danmark A/S
|
Denmark
|
Praxair Deutschland GmbH
|
Germany
|
Praxair Deutschland Holding GmbH & Co. KG
|
Germany
|
Praxair Distribution, Inc.
|
Delaware
|
Praxair do Brasil Ltda.
|
Brazil
|
Praxair Espana, S.L.
|
Spain
|
Praxair Euroholding, S.L.
|
Spain
|
Praxair Fray Bentos S.C.A.
|
Uruguay
|
Praxair Gas B.V.
|
Netherlands
|
Praxair Gases Industriales Ltda
|
Columbia
|
Praxair Gases France SAS
|
France
|
Praxair Gases Ireland Limited
|
Ireland
|
Praxair Gases UK Ltd.
|
United Kingdom
|
Praxair Gulf Industrial Gases LLC
|
Abu Dhabi
|
Praxair Holding Latinoamerica (Sarl)
|
Luxembourg
|
Praxair Holdings International, Inc.
|
Delaware
|
Praxair Huayi (Chongqing) Industrial Gases Co. Ltd.
|
China
|
Praxair Hydrogen Supply, Inc.
|
Delaware
|
Praxair India Private Limited
|
India
|
Praxair International Finance UC
|
Ireland
|
Praxair Inversiones SRL
|
Peru
|
Praxair Investments B.V.
|
Netherlands
|
Praxair Italia S.R.L.
|
Italy
|
Praxair K.K.
|
Japan
|
Praxair Korea Company, Limited
|
Korea
|
Praxair Latin America Holdings LLC
|
Delaware
|
Praxair Luxembourg S.a.r.L.
|
Luxembourg
|
Praxair Meishan (Nanjin) Industrial Gases Co., Ltd.
|
China
|
Praxair Mexico, S. de R.L. de C.V.
|
Mexico
|
Praxair MRC S.A.S.
|
France
|
Praxair Norge AS
|
Norway
|
Praxair N.V.
|
Belgium
|
Praxair Offshore Services Ltd.
|
United Kingdom
|
Praxair Pacific Ltd.
|
Mauritius
|
Praxair Panama, S.A.
|
Panama
|
Praxair Partnership
|
Delaware
|
Praxair PC Partnership
|
Canada
|
Praxair Peru S.R.L.
|
Peru
|
Praxair PHP S.A.S.
|
France
|
Praxair Plainfield, Inc.
|
Delaware
|
Praxair Portugal Gases S.A.
|
Portugal
|
Praxair Puerto Rico B. V.
|
Netherlands
|
Praxair Puerto Rico LLC
|
Delaware
|
Praxair Qingdao Industrial Gases Co., Ltd.
|
China
|
Praxair Republica Dominicana, SRL
|
Dominican Republic
|
Praxair Samara LLC
|
Russia
|
Praxair Scandinavia Holding AS
|
Norway
|
Praxair Ship AS
|
Norway
|
Praxair S.r.l.
|
Italy
|
Praxair S.T. Technology, Inc.
|
Delaware
|
Praxair Services Canada Inc.
|
Ontario
|
Praxair Services, Inc.
|
Texas
|
Praxair Shanghai Meishan Inc.
|
China
|
Praxair Shaogang Co., Ltd.
|
China
|
Praxair Sp. Zo. o.
|
Poland
|
Praxair Surface Technologies (Changzhou) Co. Ltd.
|
China
|
Praxair Surface Technologies (Europe) S.A.
|
Switzerland
|
Praxair Surface Technologies Co., Ltd.
|
Korea
|
Praxair Surface Technologies do Brasil Ltda.
|
Brazil
|
Praxair Surface Technologies G.m.b.H.
|
Germany
|
Praxair Surface Technologies K.K.
|
Japan
|
Praxair Surface Technologies Limited
|
United Kingdom
|
Praxair Surface Technologies Montreal L.P.
|
New Brunswick
|
Praxair Surface Technologies Pte. Ltd.
|
Singapore
|
Praxair Surface Technologies S.A.S.
|
France
|
Praxair Surface Technologies, Inc.
|
Delaware
|
Praxair Sverige AB
|
Sweden
|
Praxair Switzerland GmbH
|
Switzerland
|
Praxair Taiwan Co., Ltd.
|
Taiwan
|
Praxair Technology, Inc.
|
Delaware
|
Praxair Uruguay Ltda.
|
Uruguay
|
Praxair Vertwaltungs GmbH
|
Germany
|
Production Praxair Canada Inc.
|
Canada
|
Remtechgaz t.o.v.
|
Ukraine
|
Rivoira Gas S.r.l.
|
Italy
|
Rivoira Operations S.r.l.
|
Italy
|
Rivoira Pharma S.r.l.
|
Italy
|
Rivoira Refrigerants S.r.l.
|
Italy
|
Rivoira S.p.A.
|
Italy
|
Rivoira Siad Servizi S. Con S.A.R.L.
|
Italy
|
Rivoira SUD S.R.L.
|
Italy
|
Sermatech International Canada Corp.
|
Delaware
|
Sermatech International Canada GP LLC
|
Delaware
|
Sermatech Korea Ltd.
|
Korea
|
Shanghai Praxair Baoshan Inc.
|
China
|
Shanghai Praxair-Yidian Inc.
|
China
|
Sierra Gas Metal Arc, Inc.
|
Delaware
|
Technical Gas S.A.
|
Venezuela
|
Tecnogas S/A
|
Peru
|
Technogas sp. Z o.o.
|
Poland
|
Thai Carbonic Company, Ltd.
|
Thailand
|
The Welding Center, Inc.
|
Illinois
|
Tianjin Praxair, Inc.
|
China
|
Tongling Praxair Co., Ltd.
|
China
|
Topaz Consultora S.A.
|
Uruguay
|
TWC Cryogenics, Inc.
|
Illinois
|
Vision Energy Group LLC
|
Oklahoma
|
Welder Services of Fort Wayne, Inc.
|
Indiana
|
Westair Cryogenics Company
|
Delaware
|
Westair Gas and Equipment, L.P.
|
Texas
|
White Martins e White Martins Comercio e Servicos SARL
|
Luxembourg
|
White Martins Gases Industriais do Nordeste S.A.
|
Brazil
|
White Martins Gases Industriais do Norte S.A.
|
Brazil
|
White Martins Gases Industriais Ltda.
|
Brazil
|
White Martins Pecem Gases Inudstriais Ltda
|
Brazil
|
White Martins Steel Gases Industrials Ltda.
|
Brazil
|
WM Steel Gases Industriais Ltda.
|
Brazil
|
WM Transporte de Gases Ltda
|
Brazil
|
Wyandotte Welding Supply, Inc.
|
Michigan
|
Yateem Oxygen W.L.L.
|
Bahrain
|
|
1.
|
I have reviewed this Annual Report on Form 10-K 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.
|
March 1, 2017
|
|
By: /s/ Stephen F. Angel
|
|
|
|
|
|
|
|
Stephen F. Angel
|
|
|
|
Chairman, President
|
|
|
|
Chief Executive Officer
|
|
|
|
(principal executive officer)
|
|
|
1.
|
I have reviewed this Annual Report on Form 10-K 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.
|
March 1, 2017
|
|
By: /s/ Matthew J. White
|
|
|
|
|
|
|
|
Matthew J. White
|
|
|
|
Senior Vice President and
|
|
|
|
Chief Financial Officer
|
|
|
|
(principal financial officer)
|
|
|
March 1, 2017
|
|
By: /s/ Stephen F. Angel
|
|
|
|
|
|
|
|
Stephen F. Angel
|
|
|
|
Chairman, President
|
|
|
|
Chief Executive Officer
|
|
|
|
(principal executive officer)
|
|
|
March 1, 2017
|
|
By: /s/ Matthew J. White
|
|
|
|
|
|
|
|
Matthew J. White
|
|
|
|
Senior Vice President and
|
|
|
|
Chief Financial Officer
|
|
|
|
(principal financial officer)
|
|