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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 06810-6268
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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 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 to abandon the transaction;
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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 occurrence of any event, change or other circumstances that could give rise to the termination of the business combination agreement;
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•
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the ability to successfully complete the proposed business combination, 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 risk that events and publicity in connection with 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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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
|
Market Price
|
Trading
High
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|
Trading
Low
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|
Close
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Dividend
Per Share
|
||||||||
2017
|
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||||||||
First Quarter
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$
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121.00
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$
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115.00
|
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$
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118.60
|
|
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$
|
0.7875
|
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Second Quarter
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$
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138.69
|
|
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$
|
117.11
|
|
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$
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132.55
|
|
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$
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0.7875
|
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Third Quarter
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$
|
141.88
|
|
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$
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127.36
|
|
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$
|
139.74
|
|
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$
|
0.7875
|
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Fourth Quarter
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$
|
156.40
|
|
|
$
|
139.24
|
|
|
$
|
154.68
|
|
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$
|
0.7875
|
|
2016
|
|
|
|
|
|
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||||||||
First Quarter
|
$
|
115.32
|
|
|
$
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95.60
|
|
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$
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114.45
|
|
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$
|
0.75
|
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Second Quarter
|
$
|
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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$
|
0.75
|
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Third Quarter
|
$
|
125.00
|
|
|
$
|
110.12
|
|
|
$
|
120.83
|
|
|
$
|
0.75
|
|
Fourth Quarter
|
$
|
124.48
|
|
|
$
|
114.43
|
|
|
$
|
117.19
|
|
|
$
|
0.75
|
|
Period
|
Total
Number of
Shares
Purchased
(Thousands)
|
|
Average
Price Paid
Per Share
|
|
Total Number of
Shares Purchased as
Part of Publicly
Announced
Program (1)
(Thousands)
|
|
Approximate Dollar
Value of Shares that
May Yet be Purchased
Under the Program (2)
(Millions)
|
||||||
October 2017
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
1,581
|
|
November 2017
|
—
|
|
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$
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—
|
|
|
—
|
|
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$
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1,581
|
|
December 2017
|
9
|
|
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$
|
152.18
|
|
|
9
|
|
|
$
|
1,580
|
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Fourth Quarter 2017
|
9
|
|
|
|
|
|
9
|
|
|
$
|
1,580
|
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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)
|
As of
December 31, 2017
, the Company had purchased $
1,420 million
of its common stock pursuant to the 2014 program, leaving an additional $
80 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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|
2012
|
2013
|
2014
|
2015
|
2016
|
2017
|
PX
|
$100
|
$121
|
$123
|
$100
|
$118
|
$159
|
SPX
|
$100
|
$132
|
$150
|
$152
|
$170
|
$208
|
S5MATR
|
$100
|
$126
|
$135
|
$124
|
$145
|
$180
|
Year Ended December 31,
|
2017(a)
|
|
2016(a)
|
|
2015(a)
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|
2014(a)
|
|
2013(a)
|
|||||||||||
From the Consolidated Statements of Income
|
|
|
|
|
|
|
|
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|
|||||||||||
Sales
|
$
|
11,437
|
|
|
$
|
10,534
|
|
|
$
|
10,776
|
|
|
$
|
12,273
|
|
|
$
|
11,925
|
|
|
Cost of sales, exclusive of depreciation and amortization
|
6,455
|
|
|
5,860
|
|
|
5,960
|
|
|
6,962
|
|
|
6,744
|
|
||||||
Selling, general and administrative
|
1,207
|
|
|
1,145
|
|
|
1,152
|
|
|
1,308
|
|
|
1,349
|
|
||||||
Depreciation and amortization
|
1,184
|
|
|
1,122
|
|
|
1,106
|
|
|
1,170
|
|
|
1,109
|
|
||||||
Research and development
|
93
|
|
|
92
|
|
|
93
|
|
|
96
|
|
|
98
|
|
||||||
Transaction costs and other charges
|
54
|
|
|
100
|
|
|
172
|
|
|
138
|
|
|
32
|
|
||||||
Other income (expenses) – net
|
4
|
|
|
23
|
|
|
28
|
|
|
9
|
|
|
32
|
|
||||||
Operating profit
|
2,448
|
|
|
2,238
|
|
|
2,321
|
|
|
2,608
|
|
|
2,625
|
|
||||||
Interest expense – net
|
161
|
|
|
190
|
|
|
161
|
|
|
213
|
|
|
178
|
|
||||||
Income before income taxes and equity investments
|
2,287
|
|
|
2,048
|
|
|
2,160
|
|
|
2,395
|
|
|
2,447
|
|
||||||
Income taxes
|
1,026
|
|
|
551
|
|
|
612
|
|
|
691
|
|
|
649
|
|
||||||
Income before equity investments
|
1,261
|
|
|
1,497
|
|
|
1,548
|
|
|
1,704
|
|
|
1,798
|
|
||||||
Income from equity investments
|
47
|
|
|
41
|
|
|
43
|
|
|
42
|
|
|
38
|
|
||||||
Net income (including noncontrolling interests)
|
1,308
|
|
|
1,538
|
|
|
1,591
|
|
|
1,746
|
|
|
1,836
|
|
||||||
Noncontrolling interests
|
(61
|
)
|
|
(38
|
)
|
|
(44
|
)
|
|
(52
|
)
|
|
(81
|
)
|
||||||
Net income – Praxair, Inc.
|
$
|
1,247
|
|
|
$
|
1,500
|
|
|
$
|
1,547
|
|
|
$
|
1,694
|
|
|
$
|
1,755
|
|
|
Per Share Data – Praxair, Inc. Shareholders
|
|
|
|
|
|
|
|
|
|
|||||||||||
Basic earnings per share
|
$
|
4.36
|
|
|
$
|
5.25
|
|
|
$
|
5.39
|
|
|
$
|
5.79
|
|
|
$
|
5.94
|
|
|
Diluted earnings per share
|
$
|
4.32
|
|
|
$
|
5.21
|
|
|
$
|
5.35
|
|
|
$
|
5.73
|
|
|
$
|
5.87
|
|
|
Cash dividends per share
|
$
|
3.15
|
|
|
$
|
3.00
|
|
|
$
|
2.86
|
|
|
$
|
2.60
|
|
|
$
|
2.40
|
|
|
Weighted Average Shares Outstanding (000’s)
|
|
|
|
|
|
|
|
|
|
|||||||||||
Basic shares outstanding
|
286,261
|
|
|
285,677
|
|
|
287,005
|
|
|
292,494
|
|
|
295,523
|
|
||||||
Diluted shares outstanding
|
289,114
|
|
|
287,757
|
|
|
289,055
|
|
|
295,608
|
|
|
298,965
|
|
||||||
Other Information and Ratios
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total assets
|
$
|
20,436
|
|
|
$
|
19,332
|
|
|
$
|
18,319
|
|
|
$
|
19,769
|
|
|
$
|
20,223
|
|
|
Total debt
|
$
|
9,000
|
|
|
$
|
9,515
|
|
8,991
|
|
$
|
9,231
|
|
|
$
|
9,225
|
|
|
$
|
8,779
|
|
Net debt (b)
|
$
|
8,383
|
|
|
$
|
8,991
|
|
|
$
|
9,084
|
|
|
$
|
9,099
|
|
|
$
|
8,641
|
|
|
Cash flow from operations
|
$
|
3,041
|
|
|
$
|
2,773
|
|
|
$
|
2,695
|
|
|
$
|
2,887
|
|
|
$
|
2,936
|
|
|
Net cash used for investing activities
|
$
|
(1,314
|
)
|
|
$
|
(1,770
|
)
|
|
$
|
(1,303
|
)
|
|
$
|
(1,803
|
)
|
|
$
|
(3,237
|
)
|
|
Net cash used for financing activities
|
$
|
(1,656
|
)
|
|
$
|
(643
|
)
|
|
$
|
(1,310
|
)
|
|
$
|
(1,027
|
)
|
|
$
|
309
|
|
|
EBITDA (b)
|
$
|
3,679
|
|
|
$
|
3,401
|
|
|
$
|
3,470
|
|
|
$
|
3,820
|
|
|
$
|
3,772
|
|
|
Adjusted EBITDA (b)
|
$
|
3,733
|
|
|
$
|
3,501
|
|
|
$
|
3,642
|
|
|
$
|
3,958
|
|
|
$
|
3,804
|
|
|
Capital expenditures
|
$
|
1,311
|
|
|
$
|
1,465
|
|
|
$
|
1,541
|
|
|
$
|
1,689
|
|
|
$
|
2,020
|
|
|
Acquisitions, net of cash acquired
|
$
|
33
|
|
|
$
|
363
|
|
|
$
|
82
|
|
|
$
|
206
|
|
|
$
|
1,323
|
|
|
Debt-to-capital ratio (b)
|
56.2
|
%
|
|
62.3
|
%
|
|
64.9
|
%
|
|
59.5
|
%
|
|
54.2
|
%
|
||||||
Shares outstanding (000’s)
|
286,777
|
|
|
284,901
|
|
|
284,879
|
|
|
289,262
|
|
|
294,134
|
|
||||||
Number of employees
|
26,461
|
|
|
26,498
|
|
|
26,657
|
|
|
27,780
|
|
|
27,560
|
|
(a)
|
Amounts for 2017 include: (i) charges of $52 million ($48 million after-tax, or $0.17 per diluted share) for transaction costs related to the potential Linde merger, (ii) a pension settlement charge of $2 million ($1 million after-tax) related to lump sum benefit payments made from an international pension plan, and (iii) income tax charges, net of $394 million ($1.36 per diluted share) due to U.S. Tax Cuts and Jobs Act.
|
|
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
$11,437 million
were 9% above
2016
sales of
$10,534 million
. Excluding favorable currency impacts and higher cost pass-through, sales were 6% above the prior year due to volume growth in North America, Europe and Asia, including new project start-ups and higher price.
|
•
|
Reported operating profit of $
2,448 million
was 9% above
2016
. Adjusted operating profit of
$2,502 million
was 7% above adjusted operating profit in
2016
. Benefits from higher volumes and price were partially offset by cost inflation.*
|
•
|
Fourth-quarter 2017 provisional net income tax charge of $394 million related to the U.S. Tax Cuts and Jobs Act (Tax Act). Adjustments to the charge will be made as new information becomes available.
|
•
|
Reported net income – Praxair, Inc. of
$1,247 million
and diluted earnings per share of
$4.32
decreased from
$1,500 million
and
$5.21
, respectively in
2016
. Adjusted net income – Praxair, Inc. of
$1,690 million
and adjusted diluted earnings per share of
$5.85
were both
7%
above
2016
adjusted amounts.*
|
•
|
Cash flow from operations was a strong $
3,041 million
, 27% of sales. Capital expenditures were $1,311 million; dividends paid were $901 million; and net debt repayments were $771 million.
|
•
|
Continued progress on the merger with Linde AG.
|
◦
|
Required Praxair and Linde AG shareholder approvals obtained.
|
◦
|
Regulatory filings progressing as planned and divestiture process on track.
|
◦
|
Merger expected to close second-half 2018.
|
•
|
Diluted earnings per share are forecasted to be in the range of $1.53 to $1.58. Guidance includes an estimated $0.05 benefit related to the Tax Act and does not include transaction costs related to the potential Linde merger.
|
•
|
Effective tax rate in the range of 23% to 25%.
|
•
|
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,
2017
, Praxair’s backlog of 17 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 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,
|
2017
|
|
2016
|
|
2015
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||||||||
Reported Amounts
|
|
|
|
|
|
|
|
|
|
||||||||
Sales
|
$
|
11,437
|
|
|
$
|
10,534
|
|
|
$
|
10,776
|
|
|
9
|
%
|
|
(2
|
)%
|
Cost of sales, exclusive of depreciation and amortization
|
$
|
6,455
|
|
|
$
|
5,860
|
|
|
$
|
5,960
|
|
|
10
|
%
|
|
(2
|
)%
|
Gross margin (a)
|
$
|
4,982
|
|
|
$
|
4,674
|
|
|
$
|
4,816
|
|
|
7
|
%
|
|
(3
|
)%
|
As a percent of sales
|
43.6
|
%
|
|
44.4
|
%
|
|
44.7
|
%
|
|
|
|
|
|||||
Selling, general and administrative
|
$
|
1,207
|
|
|
$
|
1,145
|
|
|
$
|
1,152
|
|
|
5
|
%
|
|
(1
|
)%
|
As a percent of sales
|
10.6
|
%
|
|
10.9
|
%
|
|
10.7
|
%
|
|
|
|
|
|||||
Depreciation and amortization
|
$
|
1,184
|
|
|
$
|
1,122
|
|
|
$
|
1,106
|
|
|
6
|
%
|
|
1
|
%
|
Transaction costs and other charges (b)
|
$
|
54
|
|
|
$
|
100
|
|
|
$
|
172
|
|
|
|
|
|
||
Other income (expense) – net
|
$
|
4
|
|
|
$
|
23
|
|
|
$
|
28
|
|
|
|
|
|
||
Operating profit
|
$
|
2,448
|
|
|
$
|
2,238
|
|
|
$
|
2,321
|
|
|
9
|
%
|
|
(4
|
)%
|
Operating margin
|
21.4
|
%
|
|
21.2
|
%
|
|
21.5
|
%
|
|
|
|
|
|||||
Interest expense – net
|
$
|
161
|
|
|
$
|
190
|
|
|
$
|
161
|
|
|
(15
|
)%
|
|
18
|
%
|
Effective tax rate
|
44.9
|
%
|
|
26.9
|
%
|
|
28.3
|
%
|
|
|
|
|
|||||
Income from equity investments
|
$
|
47
|
|
|
$
|
41
|
|
|
$
|
43
|
|
|
15
|
%
|
|
(5
|
)%
|
Noncontrolling interests
|
$
|
(61
|
)
|
|
$
|
(38
|
)
|
|
$
|
(44
|
)
|
|
61
|
%
|
|
(14
|
)%
|
Net income – Praxair, Inc.
|
$
|
1,247
|
|
|
$
|
1,500
|
|
|
$
|
1,547
|
|
|
(17
|
)%
|
|
(3
|
)%
|
Diluted earnings per share
|
$
|
4.32
|
|
|
$
|
5.21
|
|
|
$
|
5.35
|
|
|
(17
|
)%
|
|
(3
|
)%
|
Diluted shares outstanding
|
289,114
|
|
|
287,757
|
|
|
289,055
|
|
|
—
|
%
|
|
—
|
%
|
|||
Number of employees
|
26,461
|
|
|
26,498
|
|
|
26,657
|
|
|
|
|
|
|||||
Adjusted Amounts (c)
|
|
|
|
|
|
|
|
|
|
||||||||
Operating profit
|
$
|
2,502
|
|
|
$
|
2,338
|
|
|
$
|
2,493
|
|
|
7
|
%
|
|
(6
|
)%
|
Operating margin
|
21.9
|
%
|
|
22.2
|
%
|
|
23.1
|
%
|
|
|
|
|
|||||
Interest expense – net
|
$
|
161
|
|
|
$
|
174
|
|
|
$
|
161
|
|
|
(7
|
)%
|
|
8
|
%
|
Effective tax rate
|
27.2
|
%
|
|
27.1
|
%
|
|
28.0
|
%
|
|
|
|
|
|||||
Noncontrolling interests
|
$
|
(61
|
)
|
|
$
|
(43
|
)
|
|
$
|
(45
|
)
|
|
42
|
%
|
|
(4
|
)%
|
Net income – Praxair, Inc.
|
$
|
1,690
|
|
|
$
|
1,576
|
|
|
$
|
1,677
|
|
|
7
|
%
|
|
(6
|
)%
|
Diluted earnings per share
|
$
|
5.85
|
|
|
$
|
5.48
|
|
|
$
|
5.80
|
|
|
7
|
%
|
|
(6
|
)%
|
Other Financial Data (c)
|
|
|
|
|
|
|
|
|
|
||||||||
EBITDA
|
$
|
3,679
|
|
|
$
|
3,401
|
|
|
$
|
3,470
|
|
|
8
|
%
|
|
(2
|
)%
|
EBITDA Margin
|
32.2
|
%
|
|
32.3
|
%
|
|
32.2
|
%
|
|
—
|
%
|
|
—
|
%
|
|||
Adjusted EBITDA
|
$
|
3,733
|
|
|
$
|
3,501
|
|
|
$
|
3,642
|
|
|
7
|
%
|
|
(4
|
)%
|
Adjusted EBITDA Margin
|
32.6
|
%
|
|
33.2
|
%
|
|
33.8
|
%
|
|
(2
|
)%
|
|
(2
|
)%
|
(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.
|
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||||||||
|
|
% Change
|
|
% Change
|
||||||||
|
|
Sales
|
|
Operating Profit
|
|
Sales
|
|
Operating Profit
|
||||
Factors Contributing to Changes
|
|
|
|
|
|
|
|
|
||||
Volume
|
|
5
|
%
|
|
8
|
%
|
|
—
|
%
|
|
(5
|
)%
|
Price/Mix
|
|
1
|
%
|
|
5
|
%
|
|
1
|
%
|
|
3
|
%
|
Cost pass-through
|
|
2
|
%
|
|
—
|
%
|
|
(1
|
)%
|
|
—
|
%
|
Currency
|
|
1
|
%
|
|
1
|
%
|
|
(3
|
)%
|
|
(3
|
)%
|
Acquisitions/Divestitures
|
|
—
|
%
|
|
—
|
%
|
|
1
|
%
|
|
—
|
%
|
Other
|
|
—
|
%
|
|
(5
|
)%
|
|
—
|
%
|
|
1
|
%
|
Reported
|
|
9
|
%
|
|
9
|
%
|
|
(2
|
)%
|
|
(4
|
)%
|
Less: Transaction costs and other charges
|
|
—
|
%
|
|
(2
|
)%
|
|
—
|
%
|
|
(2
|
)%
|
Adjusted
|
|
9
|
%
|
|
7
|
%
|
|
(2
|
)%
|
|
(6
|
)%
|
|
|
|
|
|
|||||||||||
|
|
% of Sales
|
|
% Change*
|
|||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
|||||
Sales by End-Markets
|
|
|
|
|
|
|
|
|
|
|
|||||
Manufacturing
|
|
22
|
%
|
|
23
|
%
|
|
24
|
%
|
|
4
|
%
|
|
(5
|
)%
|
Metals
|
|
17
|
%
|
|
17
|
%
|
|
17
|
%
|
|
7
|
%
|
|
4
|
%
|
Energy
|
|
12
|
%
|
|
12
|
%
|
|
13
|
%
|
|
5
|
%
|
|
(6
|
)%
|
Chemicals
|
|
10
|
%
|
|
10
|
%
|
|
10
|
%
|
|
9
|
%
|
|
—
|
%
|
Electronics
|
|
9
|
%
|
|
8
|
%
|
|
8
|
%
|
|
13
|
%
|
|
2
|
%
|
Healthcare
|
|
8
|
%
|
|
8
|
%
|
|
8
|
%
|
|
4
|
%
|
|
6
|
%
|
Food & Beverage
|
|
9
|
%
|
|
9
|
%
|
|
9
|
%
|
|
5
|
%
|
|
7
|
%
|
Aerospace
|
|
3
|
%
|
|
3
|
%
|
|
3
|
%
|
|
11
|
%
|
|
2
|
%
|
Other
|
|
10
|
%
|
|
10
|
%
|
|
8
|
%
|
|
3
|
%
|
|
1
|
%
|
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
|
% of Sales
|
|||||||
|
|
2017
|
|
2016
|
|
2015
|
|||
Sales by Distribution Method
|
|
|
|
|
|
|
|||
On-Site
|
|
30
|
%
|
|
29
|
%
|
|
29
|
%
|
Merchant
|
|
34
|
%
|
|
35
|
%
|
|
34
|
%
|
Packaged Gas
|
|
27
|
%
|
|
28
|
%
|
|
28
|
%
|
Other
|
|
9
|
%
|
|
8
|
%
|
|
9
|
%
|
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
(Dollar amounts in millions)
Year Ended December 31,
|
|
|
Variance
|
||||||||||||||
2017
|
|
2016
|
|
2015
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
|||||||||
Sales
|
|
|
|
|
|
|
|
|
|
||||||||
North America
|
$
|
6,023
|
|
|
$
|
5,592
|
|
|
$
|
5,865
|
|
|
8
|
%
|
|
(5
|
)%
|
Europe
|
1,558
|
|
|
1,392
|
|
|
1,320
|
|
|
12
|
%
|
|
5
|
%
|
|||
South America
|
1,501
|
|
|
1,399
|
|
|
1,431
|
|
|
7
|
%
|
|
(2
|
)%
|
|||
Asia
|
1,738
|
|
|
1,555
|
|
|
1,551
|
|
|
12
|
%
|
|
—
|
%
|
|||
Surface Technologies
|
617
|
|
|
596
|
|
|
609
|
|
|
4
|
%
|
|
(2
|
)%
|
|||
|
$
|
11,437
|
|
|
$
|
10,534
|
|
|
$
|
10,776
|
|
|
9
|
%
|
|
(2
|
)%
|
Operating Profit
|
|
|
|
|
|
|
|
|
|
||||||||
North America
|
$
|
1,517
|
|
|
$
|
1,430
|
|
|
$
|
1,558
|
|
|
6
|
%
|
|
(8
|
)%
|
Europe
|
297
|
|
|
273
|
|
|
250
|
|
|
9
|
%
|
|
9
|
%
|
|||
South America
|
250
|
|
|
257
|
|
|
291
|
|
|
(3
|
)%
|
|
(12
|
)%
|
|||
Asia
|
333
|
|
|
276
|
|
|
289
|
|
|
21
|
%
|
|
(4
|
)%
|
|||
Surface Technologies
|
105
|
|
|
102
|
|
|
105
|
|
|
3
|
%
|
|
(3
|
)%
|
|||
Segment operating profit
|
2,502
|
|
|
2,338
|
|
|
2,493
|
|
|
7
|
%
|
|
(6
|
)%
|
|||
Transaction costs and other charges
|
(54
|
)
|
|
(100
|
)
|
|
(172
|
)
|
|
|
|
|
|||||
Consolidated operating profit
|
$
|
2,448
|
|
|
$
|
2,238
|
|
|
$
|
2,321
|
|
|
|
|
|
(Dollar amounts in millions)
Year Ended December 31,
|
|
|
Variance
|
||||||||||||||
2017
|
|
2016
|
|
2015
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
|||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Sales
|
$
|
6,023
|
|
|
$
|
5,592
|
|
|
$
|
5,865
|
|
|
8
|
%
|
|
(5
|
)%
|
Cost of sales, exclusive of depreciation and amortization
|
3,167
|
|
|
2,872
|
|
|
3,028
|
|
|
|
|
|
|||||
Gross margin
|
2,856
|
|
|
2,720
|
|
|
2,837
|
|
|
|
|
|
|||||
Operating expenses
|
708
|
|
|
676
|
|
|
670
|
|
|
|
|
|
|||||
Depreciation and amortization
|
631
|
|
|
614
|
|
|
609
|
|
|
|
|
|
|||||
Operating profit
|
$
|
1,517
|
|
|
$
|
1,430
|
|
|
$
|
1,558
|
|
|
6
|
%
|
|
(8
|
)%
|
Operating margin
|
25.2
|
%
|
|
25.6
|
%
|
|
26.6
|
%
|
|
|
|
|
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||||||||
|
|
% Change
|
|
% Change
|
||||||||
|
|
Sales
|
|
Operating Profit
|
|
Sales
|
|
Operating Profit
|
||||
Factors Contributing to Changes
|
|
|
|
|
|
|
|
|
||||
Volume
|
|
4
|
%
|
|
8
|
%
|
|
(3
|
)%
|
|
(6
|
)%
|
Price/Mix
|
|
2
|
%
|
|
5
|
%
|
|
1
|
%
|
|
3
|
%
|
Cost pass-through
|
|
2
|
%
|
|
—
|
%
|
|
(1
|
)%
|
|
—
|
%
|
Currency
|
|
—
|
%
|
|
—
|
%
|
|
(2
|
)%
|
|
(2
|
)%
|
Acquisitions/Divestitures
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Other
|
|
—
|
%
|
|
(7
|
)%
|
|
—
|
%
|
|
(3
|
)%
|
|
|
8
|
%
|
|
6
|
%
|
|
(5
|
)%
|
|
(8
|
)%
|
|
|
|
|
|
|||||||||||
|
|
% of Sales
|
|
% Change*
|
|||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
|||||
Sales by End-Markets
|
|
|
|
|
|
|
|
|
|
|
|||||
Manufacturing
|
|
29
|
%
|
|
29
|
%
|
|
30
|
%
|
|
4
|
%
|
|
(5
|
)%
|
Metals
|
|
12
|
%
|
|
12
|
%
|
|
11
|
%
|
|
7
|
%
|
|
(1
|
)%
|
Energy
|
|
18
|
%
|
|
17
|
%
|
|
18
|
%
|
|
7
|
%
|
|
(6
|
)%
|
Chemicals
|
|
9
|
%
|
|
9
|
%
|
|
10
|
%
|
|
5
|
%
|
|
(8
|
)%
|
Electronics
|
|
5
|
%
|
|
5
|
%
|
|
5
|
%
|
|
17
|
%
|
|
(4
|
)%
|
Healthcare
|
|
7
|
%
|
|
7
|
%
|
|
7
|
%
|
|
5
|
%
|
|
2
|
%
|
Food & Beverage
|
|
10
|
%
|
|
10
|
%
|
|
9
|
%
|
|
5
|
%
|
|
6
|
%
|
Aerospace
|
|
2
|
%
|
|
2
|
%
|
|
2
|
%
|
|
14
|
%
|
|
(1
|
)%
|
Other
|
|
8
|
%
|
|
9
|
%
|
|
8
|
%
|
|
1
|
%
|
|
5
|
%
|
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
|
% of Sales
|
|||||||
|
|
2017
|
|
2016
|
|
2015
|
|||
Sales by Distribution Method
|
|
|
|
|
|
|
|||
On-Site
|
|
30
|
%
|
|
28
|
%
|
|
28
|
%
|
Merchant
|
|
37
|
%
|
|
38
|
%
|
|
38
|
%
|
Packaged Gas
|
|
31
|
%
|
|
31
|
%
|
|
32
|
%
|
Other
|
|
2
|
%
|
|
3
|
%
|
|
2
|
%
|
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
(Dollar amounts in millions)
Year Ended December 31,
|
|
|
Variance
|
||||||||||||||
2017
|
|
2016
|
|
2015
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
|||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Sales
|
$
|
1,558
|
|
|
$
|
1,392
|
|
|
$
|
1,320
|
|
|
12
|
%
|
|
5
|
%
|
Cost of sales, exclusive of depreciation and amortization
|
893
|
|
|
775
|
|
|
749
|
|
|
|
|
|
|||||
Gross margin
|
665
|
|
|
617
|
|
|
571
|
|
|
|
|
|
|||||
Operating expenses
|
199
|
|
|
189
|
|
|
176
|
|
|
|
|
|
|||||
Depreciation and amortization
|
169
|
|
|
155
|
|
|
145
|
|
|
|
|
|
|||||
Operating profit
|
$
|
297
|
|
|
$
|
273
|
|
|
$
|
250
|
|
|
9
|
%
|
|
9
|
%
|
Operating margin
|
19.1
|
%
|
|
19.6
|
%
|
|
18.9
|
%
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
% of Sales
|
|
% Change*
|
|||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
|||||
Sales by End-Markets
|
|
|
|
|
|
|
|
|
|
|
|||||
Manufacturing
|
|
20
|
%
|
|
21
|
%
|
|
22
|
%
|
|
4
|
%
|
|
(2
|
)%
|
Metals
|
|
16
|
%
|
|
16
|
%
|
|
17
|
%
|
|
9
|
%
|
|
—
|
%
|
Energy
|
|
5
|
%
|
|
5
|
%
|
|
6
|
%
|
|
1
|
%
|
|
(9
|
)%
|
Chemicals
|
|
12
|
%
|
|
14
|
%
|
|
14
|
%
|
|
7
|
%
|
|
1
|
%
|
Electronics
|
|
7
|
%
|
|
7
|
%
|
|
7
|
%
|
|
7
|
%
|
|
6
|
%
|
Healthcare
|
|
12
|
%
|
|
11
|
%
|
|
11
|
%
|
|
4
|
%
|
|
4
|
%
|
Food & Beverage
|
|
14
|
%
|
|
12
|
%
|
|
10
|
%
|
|
8
|
%
|
|
5
|
%
|
Aerospace
|
|
1
|
%
|
|
1
|
%
|
|
1
|
%
|
|
3
|
%
|
|
5
|
%
|
Other
|
|
13
|
%
|
|
13
|
%
|
|
12
|
%
|
|
8
|
%
|
|
6
|
%
|
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
|
% of Sales
|
|||||||
|
|
2017
|
|
2016
|
|
2015
|
|||
Sales by Distribution Method
|
|
|
|
|
|
|
|||
On-Site
|
|
18
|
%
|
|
19
|
%
|
|
20
|
%
|
Merchant
|
|
35
|
%
|
|
35
|
%
|
|
34
|
%
|
Packaged Gas
|
|
42
|
%
|
|
42
|
%
|
|
42
|
%
|
Other
|
|
5
|
%
|
|
4
|
%
|
|
4
|
%
|
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
(Dollar amounts in millions)
Year Ended December 31,
|
|
|
Variance
|
||||||||||||||
2017
|
|
2016
|
|
2015
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
|||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Sales
|
$
|
1,501
|
|
|
$
|
1,399
|
|
|
$
|
1,431
|
|
|
7
|
%
|
|
(2
|
)%
|
Cost of sales, exclusive of depreciation and amortization
|
894
|
|
|
828
|
|
|
809
|
|
|
|
|
|
|||||
Gross margin
|
607
|
|
|
571
|
|
|
622
|
|
|
|
|
|
|||||
Operating expenses
|
198
|
|
|
181
|
|
|
196
|
|
|
|
|
|
|||||
Depreciation and amortization
|
159
|
|
|
133
|
|
|
135
|
|
|
|
|
|
|||||
Operating profit
|
$
|
250
|
|
|
$
|
257
|
|
|
$
|
291
|
|
|
(3
|
)%
|
|
(12
|
)%
|
Operating margin
|
16.7
|
%
|
|
18.4
|
%
|
|
20.3
|
%
|
|
|
|
|
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||||||||
|
|
% Change
|
|
% Change
|
||||||||
|
|
Sales
|
|
Operating Profit
|
|
Sales
|
|
Operating Profit
|
||||
Factors Contributing to Changes
|
|
|
|
|
|
|
|
|
||||
Volume
|
|
—
|
%
|
|
(2
|
)%
|
|
2
|
%
|
|
(2
|
)%
|
Price/Mix
|
|
1
|
%
|
|
3
|
%
|
|
4
|
%
|
|
17
|
%
|
Cost pass-through
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Currency
|
|
6
|
%
|
|
4
|
%
|
|
(8
|
)%
|
|
(9
|
)%
|
Acquisitions/Divestitures
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Other
|
|
—
|
%
|
|
(8
|
)%
|
|
—
|
%
|
|
(18
|
)%
|
|
|
7
|
%
|
|
(3
|
)%
|
|
(2
|
)%
|
|
(12
|
)%
|
|
|
|
|
|
|||||||||||
|
|
% of Sales
|
|
% Change*
|
|||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
|||||
Sales by End-Markets
|
|
|
|
|
|
|
|
|
|
|
|||||
Manufacturing
|
|
17
|
%
|
|
18
|
%
|
|
21
|
%
|
|
(2
|
)%
|
|
(10
|
)%
|
Metals
|
|
31
|
%
|
|
31
|
%
|
|
28
|
%
|
|
1
|
%
|
|
14
|
%
|
Energy
|
|
2
|
%
|
|
2
|
%
|
|
2
|
%
|
|
23
|
%
|
|
16
|
%
|
Chemicals
|
|
10
|
%
|
|
9
|
%
|
|
9
|
%
|
|
8
|
%
|
|
1
|
%
|
Electronics
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Healthcare
|
|
19
|
%
|
|
19
|
%
|
|
18
|
%
|
|
3
|
%
|
|
13
|
%
|
Food & Beverage
|
|
13
|
%
|
|
13
|
%
|
|
13
|
%
|
|
2
|
%
|
|
12
|
%
|
Aerospace
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Other
|
|
8
|
%
|
|
8
|
%
|
|
9
|
%
|
|
(7
|
)%
|
|
(5
|
)%
|
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
|
% of Sales
|
|||||||
|
|
2017
|
|
2016
|
|
2015
|
|||
Sales by Distribution Method
|
|
|
|
|
|
|
|||
On-Site
|
|
33
|
%
|
|
31
|
%
|
|
28
|
%
|
Merchant
|
|
38
|
%
|
|
40
|
%
|
|
41
|
%
|
Packaged Gas
|
|
27
|
%
|
|
27
|
%
|
|
29
|
%
|
Other
|
|
2
|
%
|
|
2
|
%
|
|
2
|
%
|
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
(Dollar amounts in millions)
Year Ended December 31,
|
|
|
Variance
|
||||||||||||||
2017
|
|
2016
|
|
2015
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
|||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Sales
|
$
|
1,738
|
|
|
$
|
1,555
|
|
|
$
|
1,551
|
|
|
12
|
%
|
|
—
|
%
|
Cost of sales, exclusive of depreciation and amortization
|
1,098
|
|
|
998
|
|
|
977
|
|
|
|
|
|
|||||
Gross margin
|
640
|
|
|
557
|
|
|
574
|
|
|
|
|
|
|||||
Operating expenses
|
122
|
|
|
102
|
|
|
109
|
|
|
|
|
|
|||||
Depreciation and amortization
|
185
|
|
|
179
|
|
|
176
|
|
|
|
|
|
|||||
Operating profit
|
$
|
333
|
|
|
$
|
276
|
|
|
$
|
289
|
|
|
21
|
%
|
|
(4
|
)%
|
Operating margin
|
19.2
|
%
|
|
17.7
|
%
|
|
18.6
|
%
|
|
|
|
|
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||||||||
|
|
% Change
|
|
% Change
|
||||||||
|
|
Sales
|
|
Operating Profit
|
|
Sales
|
|
Operating Profit
|
||||
Factors Contributing to Changes
|
|
|
|
|
|
|
|
|
||||
Volume / Equipment
|
|
11
|
%
|
|
19
|
%
|
|
5
|
%
|
|
2
|
%
|
Price/Mix
|
|
1
|
%
|
|
8
|
%
|
|
(1
|
)%
|
|
(6
|
)%
|
Cost pass-through
|
|
1
|
%
|
|
—
|
%
|
|
1
|
%
|
|
—
|
%
|
Currency
|
|
1
|
%
|
|
1
|
%
|
|
(4
|
)%
|
|
(4
|
)%
|
Acquisitions / Divestitures
|
|
(2
|
)%
|
|
—
|
%
|
|
(1
|
)%
|
|
—
|
%
|
Other
|
|
—
|
%
|
|
(7
|
)%
|
|
—
|
%
|
|
4
|
%
|
|
|
12
|
%
|
|
21
|
%
|
|
—
|
%
|
|
(4
|
)%
|
|
|
|
|
|
|||||||||||
|
|
% of Sales
|
|
% Change*
|
|||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
|||||
Sales by End-Markets
|
|
|
|
|
|
|
|
|
|
|
|||||
Manufacturing
|
|
9
|
%
|
|
9
|
%
|
|
9
|
%
|
|
13
|
%
|
|
(8
|
)%
|
Metals
|
|
27
|
%
|
|
28
|
%
|
|
29
|
%
|
|
15
|
%
|
|
5
|
%
|
Energy
|
|
3
|
%
|
|
3
|
%
|
|
3
|
%
|
|
14
|
%
|
|
(3
|
)%
|
Chemicals
|
|
15
|
%
|
|
14
|
%
|
|
13
|
%
|
|
20
|
%
|
|
19
|
%
|
Electronics
|
|
33
|
%
|
|
33
|
%
|
|
32
|
%
|
|
12
|
%
|
|
4
|
%
|
Healthcare
|
|
1
|
%
|
|
1
|
%
|
|
1
|
%
|
|
(1
|
)%
|
|
8
|
%
|
Food & Beverage
|
|
2
|
%
|
|
2
|
%
|
|
2
|
%
|
|
(1
|
)%
|
|
6
|
%
|
Aerospace
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Other
|
|
10
|
%
|
|
10
|
%
|
|
11
|
%
|
|
10
|
%
|
|
(2
|
)%
|
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
|
% of Sales
|
|||||||
|
|
2017
|
|
2016
|
|
2015
|
|||
Sales by Distribution Method
|
|
|
|
|
|
|
|||
On-Site
|
|
50
|
%
|
|
50
|
%
|
|
50
|
%
|
Merchant
|
|
30
|
%
|
|
29
|
%
|
|
30
|
%
|
Packaged Gas
|
|
13
|
%
|
|
14
|
%
|
|
13
|
%
|
Other
|
|
7
|
%
|
|
7
|
%
|
|
7
|
%
|
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
(Dollar amounts in millions)
Year Ended December 31,
|
|
|
Variance
|
||||||||||||||
2017
|
|
2016
|
|
2015
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
|||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Sales
|
$
|
617
|
|
|
$
|
596
|
|
|
$
|
609
|
|
|
4
|
%
|
|
(2
|
)%
|
Cost of sales, exclusive of depreciation and amortization
|
403
|
|
|
388
|
|
|
397
|
|
|
|
|
|
|||||
Gross margin
|
214
|
|
|
208
|
|
|
212
|
|
|
|
|
|
|||||
Operating expenses
|
69
|
|
|
66
|
|
|
66
|
|
|
|
|
|
|||||
Depreciation and amortization
|
40
|
|
|
40
|
|
|
41
|
|
|
|
|
|
|||||
Operating profit
|
$
|
105
|
|
|
$
|
102
|
|
|
$
|
105
|
|
|
3
|
%
|
|
(3
|
)%
|
Operating margin
|
17.0
|
%
|
|
17.1
|
%
|
|
17.2
|
%
|
|
|
|
|
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||||||||
|
|
% Change
|
|
% Change
|
||||||||
|
|
Sales
|
|
Operating Profit
|
|
Sales
|
|
Operating Profit
|
||||
Factors Contributing to Changes
|
|
|
|
|
|
|
|
|
||||
Volume/Price
|
|
2
|
%
|
|
4
|
%
|
|
(2
|
)%
|
|
(8
|
)%
|
Cost pass-through
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Currency
|
|
—
|
%
|
|
—
|
%
|
|
(1
|
)%
|
|
(1
|
)%
|
Acquisitions/Divestitures
|
|
2
|
%
|
|
1
|
%
|
|
1
|
%
|
|
—
|
%
|
Other
|
|
—
|
%
|
|
(2
|
)%
|
|
—
|
%
|
|
6
|
%
|
|
|
4
|
%
|
|
3
|
%
|
|
(2
|
)%
|
|
(3
|
)%
|
|
|
|
|
|
|||||||||||
|
|
% of Sales
|
|
% Change*
|
|||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
|||||
Sales by End-Markets
|
|
|
|
|
|
|
|
|
|
|
|||||
Manufacturing
|
|
11
|
%
|
|
11
|
%
|
|
12
|
%
|
|
2
|
%
|
|
(5
|
)%
|
Metals
|
|
9
|
%
|
|
9
|
%
|
|
8
|
%
|
|
—
|
%
|
|
11
|
%
|
Energy
|
|
19
|
%
|
|
23
|
%
|
|
25
|
%
|
|
(12
|
)%
|
|
(10
|
)%
|
Chemicals
|
|
2
|
%
|
|
2
|
%
|
|
2
|
%
|
|
(7
|
)%
|
|
(4
|
)%
|
Electronics
|
|
1
|
%
|
|
1
|
%
|
|
1
|
%
|
|
32
|
%
|
|
17
|
%
|
Healthcare
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Food & Beverage
|
|
3
|
%
|
|
4
|
%
|
|
4
|
%
|
|
(4
|
)%
|
|
2
|
%
|
Aerospace
|
|
44
|
%
|
|
40
|
%
|
|
37
|
%
|
|
11
|
%
|
|
3
|
%
|
Other
|
|
11
|
%
|
|
10
|
%
|
|
11
|
%
|
|
2
|
%
|
|
(12
|
)%
|
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
Percent of
2017
Consolidated
Sales
|
|
Statements of Income
|
|
Balance Sheets
|
||||||||||||
|
Average Year Ended December 31,
|
|
December 31,
|
||||||||||||||
Currency
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
||||||||
Euro
|
13
|
%
|
|
0.89
|
|
|
0.90
|
|
|
0.90
|
|
|
0.83
|
|
|
0.95
|
|
Brazilian real
|
10
|
%
|
|
3.19
|
|
|
3.47
|
|
|
3.28
|
|
|
3.31
|
|
|
3.26
|
|
Canadian dollar
|
7
|
%
|
|
1.30
|
|
|
1.32
|
|
|
1.28
|
|
|
1.26
|
|
|
1.34
|
|
Chinese yuan
|
7
|
%
|
|
6.76
|
|
|
6.64
|
|
|
6.28
|
|
|
6.51
|
|
|
6.95
|
|
Mexican peso
|
5
|
%
|
|
18.86
|
|
|
18.65
|
|
|
15.83
|
|
|
19.66
|
|
|
20.73
|
|
Korean won
|
4
|
%
|
|
1,131
|
|
|
1,160
|
|
|
1,130
|
|
|
1,067
|
|
|
1,206
|
|
Indian rupee
|
3
|
%
|
|
65.09
|
|
|
67.18
|
|
|
64.11
|
|
|
63.87
|
|
|
67.92
|
|
Argentine peso
|
1
|
%
|
|
16.51
|
|
|
14.74
|
|
|
9.22
|
|
|
18.65
|
|
|
15.89
|
|
British pound
|
1
|
%
|
|
0.78
|
|
|
0.74
|
|
|
0.65
|
|
|
0.74
|
|
|
0.81
|
|
Norwegian krone
|
1
|
%
|
|
8.26
|
|
|
8.39
|
|
|
8.05
|
|
|
8.20
|
|
|
8.64
|
|
(a)
|
See Note 2 to the consolidated financial statements.
|
(Millions of dollars)
|
Due or expiring by December 31,
|
||||||||||||||||||||||||||
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
Thereafter
|
|
Total
|
||||||||||||||
Long-term debt obligations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Debt and capitalized lease maturities (Note 11)*
|
$
|
979
|
|
|
$
|
1,100
|
|
|
$
|
1,024
|
|
|
$
|
1,003
|
|
|
$
|
1,105
|
|
|
$
|
3,551
|
|
|
$
|
8,762
|
|
Contractual interest
|
212
|
|
|
187
|
|
|
158
|
|
|
130
|
|
|
98
|
|
|
609
|
|
|
1,394
|
|
|||||||
Operating leases (Note 4)*
|
131
|
|
|
114
|
|
|
94
|
|
|
76
|
|
|
61
|
|
|
107
|
|
|
583
|
|
|||||||
Retirement obligations
|
49
|
|
|
36
|
|
|
34
|
|
|
33
|
|
|
31
|
|
|
146
|
|
|
329
|
|
|||||||
Unconditional purchase obligations (Note 17)*
|
575
|
|
|
517
|
|
|
451
|
|
|
468
|
|
|
437
|
|
|
2,511
|
|
|
4,959
|
|
|||||||
Construction commitments
(Note 17)*
|
842
|
|
|
212
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,065
|
|
|||||||
Total Contractual Obligations
|
$
|
2,788
|
|
|
$
|
2,166
|
|
|
$
|
1,772
|
|
|
$
|
1,710
|
|
|
$
|
1,732
|
|
|
$
|
6,924
|
|
|
$
|
17,092
|
|
(Dollar amounts in millions, except per share data)
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Year Ended December 31,
|
|
|
|
|
|||||||||||||||
Adjusted Operating Profit and Margin
|
|
|
|
|
|
|
|
|
|
||||||||||
Reported operating profit
|
$
|
2,448
|
|
|
$
|
2,238
|
|
|
$
|
2,321
|
|
|
$
|
2,608
|
|
|
$
|
2,625
|
|
Add: Bond redemption
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Add: Pension settlement charge
|
2
|
|
|
4
|
|
|
7
|
|
|
7
|
|
|
9
|
|
|||||
Add: Venezuela currency devaluation
|
—
|
|
|
—
|
|
|
—
|
|
|
131
|
|
|
23
|
|
|||||
Add: Transaction costs
|
52
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Add: Cost reduction program
|
—
|
|
|
96
|
|
|
165
|
|
|
—
|
|
|
—
|
|
|||||
Total adjustments
|
54
|
|
|
100
|
|
|
172
|
|
|
138
|
|
|
32
|
|
|||||
Adjusted operating profit
|
$
|
2,502
|
|
|
$
|
2,338
|
|
|
$
|
2,493
|
|
|
$
|
2,746
|
|
|
$
|
2,657
|
|
Reported percent change
|
9
|
%
|
|
(4
|
)%
|
|
(11
|
)%
|
|
(1
|
)%
|
|
8
|
%
|
|||||
Adjusted percent change
|
7
|
%
|
|
(6
|
)%
|
|
(9
|
)%
|
|
3
|
%
|
|
6
|
%
|
|||||
Reported sales
|
$
|
11,437
|
|
|
$
|
10,534
|
|
|
$
|
10,776
|
|
|
$
|
12,273
|
|
|
$
|
11,925
|
|
Reported operating margin
|
21.4
|
%
|
|
21.2
|
%
|
|
21.5
|
%
|
|
21.2
|
%
|
|
22.0
|
%
|
|||||
Adjusted operating margin
|
21.9
|
%
|
|
22.2
|
%
|
|
23.1
|
%
|
|
22.4
|
%
|
|
22.3
|
%
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted Interest Expense - Net
|
|
|
|
|
|
|
|
|
|
||||||||||
Reported interest expense
|
161
|
|
|
190
|
|
|
161
|
|
|
213
|
|
|
178
|
|
|||||
Less: Bond redemption
|
—
|
|
|
(16
|
)
|
|
—
|
|
|
(36
|
)
|
|
(18
|
)
|
|||||
Adjusted interest expense - net
|
$
|
161
|
|
|
$
|
174
|
|
|
$
|
161
|
|
|
$
|
177
|
|
|
$
|
160
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted Income Taxes and Effective Tax Rate
|
|
|
|
|
|
|
|
|
|
||||||||||
Reported income taxes
|
$
|
1,026
|
|
|
$
|
551
|
|
|
$
|
612
|
|
|
$
|
691
|
|
|
$
|
649
|
|
Add: Bond redemption
|
—
|
|
|
6
|
|
|
—
|
|
|
14
|
|
|
6
|
|
|||||
Add: Income tax benefits
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
40
|
|
|||||
Add: Pension settlement charge
|
1
|
|
|
1
|
|
|
2
|
|
|
2
|
|
|
3
|
|
|||||
Add: Venezuela currency devaluation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Add: Cost reduction program
|
—
|
|
|
28
|
|
|
39
|
|
|
—
|
|
|
—
|
|
|||||
Less: Tax Act
|
(394
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Add: Transaction costs
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total adjustments
|
(389
|
)
|
|
35
|
|
|
41
|
|
|
16
|
|
|
49
|
|
|||||
Adjusted income taxes
|
$
|
637
|
|
|
$
|
586
|
|
|
$
|
653
|
|
|
$
|
707
|
|
|
$
|
698
|
|
(Dollar amounts in millions, except per share data)
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Year Ended December 31,
|
|
|
|
|
|||||||||||||||
Adjusted Diluted Earnings Per Share
|
|
|
|
|
|
|
|
|
|
||||||||||
Reported diluted earnings per share
|
$
|
4.32
|
|
|
$
|
5.21
|
|
|
$
|
5.35
|
|
|
$
|
5.73
|
|
|
$
|
5.87
|
|
Add: Bond redemption
|
—
|
|
|
0.04
|
|
|
—
|
|
|
0.07
|
|
|
0.04
|
|
|||||
Less: Income tax benefits
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.08
|
)
|
|||||
Add: Pension settlement charge
|
—
|
|
|
0.01
|
|
|
0.02
|
|
|
0.02
|
|
|
0.02
|
|
|||||
Add: Venezuela currency devaluation
|
—
|
|
|
—
|
|
|
—
|
|
|
0.45
|
|
|
0.08
|
|
|||||
Add: Cost reduction program
|
—
|
|
|
0.22
|
|
|
0.43
|
|
|
—
|
|
|
—
|
|
|||||
Add: Tax Act
|
1.36
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Add: Transaction costs
|
0.17
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total adjustments
|
1.53
|
|
|
0.27
|
|
|
0.45
|
|
|
0.54
|
|
|
0.06
|
|
|||||
Adjusted diluted earnings per share
|
$
|
5.85
|
|
|
$
|
5.48
|
|
|
$
|
5.80
|
|
|
$
|
6.27
|
|
|
$
|
5.93
|
|
Reported percent change
|
(17
|
)%
|
|
(3
|
)%
|
|
(7
|
)%
|
|
(2
|
)%
|
|
5
|
%
|
|||||
Adjusted percent change
|
7
|
%
|
|
(6
|
)%
|
|
(7
|
)%
|
|
6
|
%
|
|
6
|
%
|
|||||
|
|
|
|
|
|
|
|
|
|
(Dollar amounts in millions)
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Year Ended December 31,
|
|
|
|
|
|||||||||||||||
Total debt
|
$
|
9,000
|
|
|
$
|
9,515
|
|
|
$
|
9,231
|
|
|
$
|
9,225
|
|
|
$
|
8,779
|
|
Less: cash and cash equivalents
|
(617
|
)
|
|
(524
|
)
|
|
(147
|
)
|
|
(126
|
)
|
|
(138
|
)
|
|||||
Net debt
|
8,383
|
|
|
8,991
|
|
|
9,084
|
|
|
9,099
|
|
|
8,641
|
|
|||||
Equity and redeemable noncontrolling interests
|
|
|
|
|
|
|
|
|
|
||||||||||
Redeemable noncontrolling interests
|
11
|
|
|
11
|
|
|
113
|
|
|
176
|
|
|
307
|
|
|||||
Praxair, Inc. shareholders’ equity
|
6,018
|
|
|
5,021
|
|
|
4,389
|
|
|
5,623
|
|
|
6,609
|
|
|||||
Noncontrolling interests
|
493
|
|
|
420
|
|
|
404
|
|
|
387
|
|
|
394
|
|
|||||
Total equity and redeemable noncontrolling interests
|
6,522
|
|
|
5,452
|
|
|
4,906
|
|
|
6,186
|
|
|
7,310
|
|
|||||
Total capital
|
$
|
14,905
|
|
|
$
|
14,443
|
|
|
$
|
13,990
|
|
|
$
|
15,285
|
|
|
$
|
15,951
|
|
Debt-to-capital ratio
|
56.2
|
%
|
|
62.3
|
%
|
|
64.9
|
%
|
|
59.5
|
%
|
|
54.2
|
%
|
|
|
|
Page
|
|
|
Audited Consolidated Financial Statements
|
|
|
|
Notes to Consolidated Financial Statements
|
|
|
/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
February 28, 2018
|
Year Ended December 31,
|
2017
|
|
2016
|
|
2015
|
||||||
Sales
|
$
|
11,437
|
|
|
$
|
10,534
|
|
|
$
|
10,776
|
|
Cost of sales, exclusive of depreciation and amortization
|
6,455
|
|
|
5,860
|
|
|
5,960
|
|
|||
Selling, general and administrative
|
1,207
|
|
|
1,145
|
|
|
1,152
|
|
|||
Depreciation and amortization
|
1,184
|
|
|
1,122
|
|
|
1,106
|
|
|||
Research and development
|
93
|
|
|
92
|
|
|
93
|
|
|||
Transaction costs and other charges
|
54
|
|
|
100
|
|
|
172
|
|
|||
Other income (expenses) – net
|
4
|
|
|
23
|
|
|
28
|
|
|||
Operating Profit
|
2,448
|
|
|
2,238
|
|
|
2,321
|
|
|||
Interest expense – net
|
161
|
|
|
190
|
|
|
161
|
|
|||
Income Before Income Taxes and Equity Investments
|
2,287
|
|
|
2,048
|
|
|
2,160
|
|
|||
Income taxes
|
1,026
|
|
|
551
|
|
|
612
|
|
|||
Income Before Equity Investments
|
1,261
|
|
|
1,497
|
|
|
1,548
|
|
|||
Income from equity investments
|
47
|
|
|
41
|
|
|
43
|
|
|||
Net Income (Including Noncontrolling Interests)
|
1,308
|
|
|
1,538
|
|
|
1,591
|
|
|||
Less: noncontrolling interests
|
(61
|
)
|
|
(38
|
)
|
|
(44
|
)
|
|||
Net Income – Praxair, Inc.
|
$
|
1,247
|
|
|
$
|
1,500
|
|
|
$
|
1,547
|
|
|
|
|
|
|
|
||||||
Per Share Data – Praxair, Inc. Shareholders
|
|
|
|
|
|
||||||
Basic earnings per share
|
$
|
4.36
|
|
|
$
|
5.25
|
|
|
$
|
5.39
|
|
Diluted earnings per share
|
$
|
4.32
|
|
|
$
|
5.21
|
|
|
$
|
5.35
|
|
|
|
|
|
|
|
||||||
Weighted Average Shares Outstanding (000’s):
|
|
|
|
|
|
||||||
Basic shares outstanding
|
286,261
|
|
|
285,677
|
|
|
287,005
|
|
|||
Diluted shares outstanding
|
289,114
|
|
|
287,757
|
|
|
289,055
|
|
Year Ended December 31,
|
2017
|
|
2016
|
|
2015
|
||||||
NET INCOME (INCLUDING NONCONTROLLING INTERESTS)
|
$
|
1,308
|
|
|
$
|
1,538
|
|
|
$
|
1,591
|
|
|
|
|
|
|
|
||||||
OTHER COMPREHENSIVE INCOME (LOSS)
|
|
|
|
|
|
||||||
Translation adjustments:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
433
|
|
|
116
|
|
|
(1,517
|
)
|
|||
Reclassifications to net income
|
—
|
|
|
—
|
|
|
—
|
|
|||
Income taxes
|
92
|
|
|
(48
|
)
|
|
3
|
|
|||
Translation adjustments
|
525
|
|
|
68
|
|
|
(1,514
|
)
|
|||
Funded status - retirement obligations (Note 16):
|
|
|
|
|
|
||||||
Retirement program remeasurements
|
(39
|
)
|
|
(163
|
)
|
|
(11
|
)
|
|||
Reclassifications to net income
|
55
|
|
|
60
|
|
|
84
|
|
|||
Income taxes
|
(5
|
)
|
|
27
|
|
|
(17
|
)
|
|||
Funded status - retirement obligations
|
11
|
|
|
(76
|
)
|
|
56
|
|
|||
Derivative instruments (Note 12):
|
|
|
|
|
|
||||||
Current year unrealized gain (loss)
|
—
|
|
|
1
|
|
|
1
|
|
|||
Reclassifications to net income
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|||
Income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|||
Derivative instruments
|
—
|
|
|
—
|
|
|
—
|
|
|||
TOTAL OTHER COMPREHENSIVE INCOME (LOSS)
|
536
|
|
|
(8
|
)
|
|
(1,458
|
)
|
|||
|
|
|
|
|
|
||||||
COMPREHENSIVE INCOME (INCLUDING NONCONTROLLING INTERESTS)
|
1,844
|
|
|
1,530
|
|
|
133
|
|
|||
Less: noncontrolling interests
|
(95
|
)
|
|
(34
|
)
|
|
3
|
|
|||
COMPREHENSIVE INCOME - PRAXAIR, INC.
|
$
|
1,749
|
|
|
$
|
1,496
|
|
|
$
|
136
|
|
December 31,
|
2017
|
|
2016
|
||||
Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
617
|
|
|
$
|
524
|
|
Accounts receivable – net
|
1,804
|
|
|
1,641
|
|
||
Inventories
|
614
|
|
|
550
|
|
||
Prepaid and other current assets
|
250
|
|
|
165
|
|
||
Total Current Assets
|
3,285
|
|
|
2,880
|
|
||
Property, plant and equipment – net
|
12,057
|
|
|
11,477
|
|
||
Equity investments
|
727
|
|
|
717
|
|
||
Goodwill
|
3,233
|
|
|
3,117
|
|
||
Other intangible assets – net
|
553
|
|
|
583
|
|
||
Other long-term assets
|
581
|
|
|
558
|
|
||
Total Assets
|
$
|
20,436
|
|
|
$
|
19,332
|
|
Liabilities and Equity
|
|
|
|
||||
Accounts payable
|
$
|
972
|
|
|
$
|
906
|
|
Short-term debt
|
238
|
|
|
434
|
|
||
Current portion of long-term debt
|
979
|
|
|
164
|
|
||
Accrued taxes
|
242
|
|
|
133
|
|
||
Other current liabilities
|
876
|
|
|
841
|
|
||
Total Current Liabilities
|
3,307
|
|
|
2,478
|
|
||
Long-term debt
|
7,783
|
|
|
8,917
|
|
||
Other long-term liabilities
|
1,588
|
|
|
1,213
|
|
||
Deferred credits
|
1,236
|
|
|
1,272
|
|
||
Total Liabilities
|
13,914
|
|
|
13,880
|
|
||
Commitments and contingencies (Note 17)
|
|
|
|
||||
Redeemable noncontrolling interests
|
11
|
|
|
11
|
|
||
Praxair, Inc. Shareholders’ Equity:
|
|
|
|
||||
Common stock $0.01 par value, authorized – 800,000,000 shares, issued
2017 and 2016 – 383,230,625 shares
|
4
|
|
|
4
|
|
||
Additional paid-in capital
|
4,084
|
|
|
4,074
|
|
||
Retained earnings
|
13,224
|
|
|
12,879
|
|
||
Accumulated other comprehensive income (loss)
|
(4,098
|
)
|
|
(4,600
|
)
|
||
Less: Treasury stock, at cost (2017– 96,453,634 shares and
2016 – 98,329,849 shares)
|
(7,196
|
)
|
|
(7,336
|
)
|
||
Total Praxair, Inc. Shareholders’ Equity
|
6,018
|
|
|
5,021
|
|
||
Noncontrolling interests
|
493
|
|
|
420
|
|
||
Total Equity
|
6,511
|
|
|
5,441
|
|
||
Total Liabilities and Equity
|
$
|
20,436
|
|
|
$
|
19,332
|
|
Year Ended December 31,
|
2017
|
|
2016
|
|
2015
|
||||||
Increase (Decrease) in Cash and Cash Equivalents
|
|
|
|
|
|
||||||
Operations
|
|
|
|
|
|
||||||
Net income – Praxair, Inc.
|
$
|
1,247
|
|
|
$
|
1,500
|
|
|
$
|
1,547
|
|
Noncontrolling interests
|
61
|
|
|
38
|
|
|
44
|
|
|||
Net income (including noncontrolling interests)
|
$
|
1,308
|
|
|
$
|
1,538
|
|
|
$
|
1,591
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Transaction costs and other charges, net of payments
|
26
|
|
|
83
|
|
|
121
|
|
|||
Tax Act income tax charge, net
|
394
|
|
|
—
|
|
|
—
|
|
|||
Depreciation and amortization
|
1,184
|
|
|
1,122
|
|
|
1,106
|
|
|||
Deferred income taxes, excluding Tax Act
|
136
|
|
|
(13
|
)
|
|
99
|
|
|||
Share-based compensation
|
59
|
|
|
39
|
|
|
30
|
|
|||
Non-cash charges and other
|
43
|
|
|
(43
|
)
|
|
(79
|
)
|
|||
Working capital
|
|
|
|
|
|
||||||
Accounts receivable
|
(92
|
)
|
|
(33
|
)
|
|
1
|
|
|||
Inventory
|
(22
|
)
|
|
(13
|
)
|
|
(23
|
)
|
|||
Prepaid and other current assets
|
(66
|
)
|
|
6
|
|
|
(22
|
)
|
|||
Payables and accruals
|
22
|
|
|
92
|
|
|
(40
|
)
|
|||
Pension contributions
|
(19
|
)
|
|
(11
|
)
|
|
(15
|
)
|
|||
Long-term assets, liabilities and other
|
68
|
|
|
6
|
|
|
(74
|
)
|
|||
Net cash provided by operating activities
|
3,041
|
|
|
2,773
|
|
|
2,695
|
|
|||
Investing
|
|
|
|
|
|
||||||
Capital expenditures
|
(1,311
|
)
|
|
(1,465
|
)
|
|
(1,541
|
)
|
|||
Acquisitions, net of cash acquired
|
(33
|
)
|
|
(363
|
)
|
|
(82
|
)
|
|||
Divestitures and asset sales
|
30
|
|
|
58
|
|
|
320
|
|
|||
Net cash used for investing activities
|
(1,314
|
)
|
|
(1,770
|
)
|
|
(1,303
|
)
|
|||
Financing
|
|
|
|
|
|
||||||
Short-term debt borrowings (repayments) – net
|
(199
|
)
|
|
191
|
|
|
(329
|
)
|
|||
Long-term debt borrowings
|
11
|
|
|
936
|
|
|
1,497
|
|
|||
Long-term debt repayments
|
(583
|
)
|
|
(770
|
)
|
|
(1,000
|
)
|
|||
Issuances of common stock
|
120
|
|
|
139
|
|
|
88
|
|
|||
Purchases of common stock
|
(12
|
)
|
|
(228
|
)
|
|
(725
|
)
|
|||
Cash dividends – Praxair, Inc. shareholders
|
(901
|
)
|
|
(856
|
)
|
|
(819
|
)
|
|||
Excess tax benefit on stock based compensation
|
—
|
|
|
—
|
|
|
19
|
|
|||
Noncontrolling interest transactions and other
|
(92
|
)
|
|
(55
|
)
|
|
(41
|
)
|
|||
Net cash provided (used ) for financing activities
|
(1,656
|
)
|
|
(643
|
)
|
|
(1,310
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
22
|
|
|
17
|
|
|
(61
|
)
|
|||
Change in cash and cash equivalents
|
93
|
|
|
377
|
|
|
21
|
|
|||
Cash and cash equivalents, beginning-of-period
|
524
|
|
|
147
|
|
|
126
|
|
|||
Cash and cash equivalents, end-of-period
|
$
|
617
|
|
|
$
|
524
|
|
|
$
|
147
|
|
Supplemental Data
|
|
|
|
|
|
||||||
Income taxes paid
|
$
|
565
|
|
|
$
|
585
|
|
|
$
|
420
|
|
Interest paid, net of capitalized interest (Note 7)
|
$
|
184
|
|
|
$
|
189
|
|
|
$
|
174
|
|
|
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, 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
|
)
|
|||||||||||||||
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 income (loss)
|
|
|
|
|
|
|
|
|
(4
|
)
|
|
|
|
|
|
(4
|
)
|
|
(11
|
)
|
|
(15
|
)
|
||||||||||||||
Noncontrolling interests:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Dividends and other capital reductions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(28
|
)
|
|
(28
|
)
|
||||||||||||||||
Additions (Reductions)
|
|
|
|
|
50
|
|
|
|
|
|
|
|
|
|
|
50
|
|
|
20
|
|
|
70
|
|
||||||||||||||
Redemption value adjustments (Note 14)
|
|
|
|
|
|
|
6
|
|
|
|
|
|
|
|
|
6
|
|
|
|
|
6
|
|
|||||||||||||||
Dividends to Praxair, Inc. common stock ($3 per share)
|
|
|
|
|
|
|
(856
|
)
|
|
|
|
|
|
|
|
(856
|
)
|
|
|
|
(856
|
)
|
|
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
|
|
|
|
|
|
|
|
|
|
|
(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
|
|
Net Income
|
|
|
|
|
|
|
1,247
|
|
|
|
|
|
|
|
|
1,247
|
|
|
59
|
|
|
1,306
|
|
||||||||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
|
502
|
|
|
|
|
|
|
502
|
|
|
34
|
|
|
536
|
|
||||||||||||||
Noncontrolling interests:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Dividends and other capital reductions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(35
|
)
|
|
(35
|
)
|
||||||||||||||||
Additions (Reductions) - (Note 14)
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
15
|
|
|
15
|
|
||||||||||||||
Redemption value adjustments (Note 14)
|
|
|
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
(1
|
)
|
|
|
|
(1
|
)
|
|||||||||||||||
Dividends to Praxair, Inc. common stock ($3.15 per share)
|
|
|
|
|
|
|
(901
|
)
|
|
|
|
|
|
|
|
(901
|
)
|
|
|
|
(901
|
)
|
|||||||||||||||
Issuances of common stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
For the dividend reinvestment and stock purchase plan
|
|
|
|
|
|
|
|
|
|
|
(50
|
)
|
|
7
|
|
|
7
|
|
|
|
|
7
|
|
||||||||||||||
For employee savings and incentive plans
|
|
|
|
|
(49
|
)
|
|
|
|
|
|
(1,835
|
)
|
|
134
|
|
|
85
|
|
|
|
|
85
|
|
|||||||||||||
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|||||||||||||||
Purchases of common stock
|
|
|
|
|
|
|
|
|
|
|
9
|
|
|
(1
|
)
|
|
(1
|
)
|
|
|
|
(1
|
)
|
||||||||||||||
Share-based compensation
|
|
|
|
|
59
|
|
|
|
|
|
|
|
|
|
|
59
|
|
|
|
|
59
|
|
|||||||||||||||
Balance, December 31, 2017
|
383,231
|
|
|
$
|
4
|
|
|
$
|
4,084
|
|
|
$
|
13,224
|
|
|
$
|
(4,098
|
)
|
|
96,454
|
|
|
$
|
(7,196
|
)
|
|
$
|
6,018
|
|
|
$
|
493
|
|
|
$
|
6,511
|
|
•
|
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, previously inventory was measured at the lower of cost or market. The adoption of this guidance resulted in no material impact.
|
•
|
Revenue Recognition
– In May 2014, the FASB issued updated guidance on the reporting and disclosure of revenue. The new guidance requires the evaluation of contracts with customers to determine the recognition of revenue when or as the entity satisfies a performance obligation, and requires expanded disclosures. Subsequently, the FASB has issued amendments to certain aspects of the guidance including the effective date. This guidance is required to be effective beginning in the first quarter 2018 and includes several transition options.
|
•
|
Leases
– In February 2016, the FASB issued updated guidance on the accounting and financial statement presentation of leases. The new guidance requires lessees to recognize a right-of-use asset and lease liability for all leases, except those that meet certain scope exceptions, and would require expanded quantitative and qualitative disclosures. This guidance will be effective for Praxair beginning in the first quarter 2019 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. Praxair is 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 update 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. Praxair is 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.
|
•
|
Pension Costs
- In March 2017, the FASB issued updated guidance on the presentation of net periodic pension cost and net periodic postretirement benefit cost. The new guidance requires the service cost component be reported in the same line item or items as other compensation costs arising from services rendered by employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and not included within operating profit. This guidance will be effective for Praxair beginning in the first quarter 2018 and requires companies to transition using a retrospective approach for the presentation of the service cost component and the other cost components and prospectively for the capitalization of the service cost component.
|
•
|
Derivatives and Hedging
- In August 2017, the FASB issued updated guidance on accounting for hedging activities. The new guidance changes both the designation and measurement for qualifying hedging relationships and the presentation of hedge results. This guidance will be effective for Praxair beginning in the first quarter 2019, with early adoption optional. Praxair is currently evaluating the impact this update will have on our consolidated financial statements.
|
•
|
Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income
– In February 2018, the FASB issued updated guidance which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. This new guidance will be effective for Praxair beginning in the first quarter 2019 on a retrospective basis, with early adoption optional. Praxair is currently assessing the impact and timing of adoption.
|
(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
|
||||||
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
|
|
Less: Cash payments
|
(33
|
)
|
|
(5
|
)
|
|
(38
|
)
|
|||
Foreign currency translation and other
|
11
|
|
|
(17
|
)
|
|
(6
|
)
|
|||
Balance, December 31, 2017
|
$
|
16
|
|
|
$
|
5
|
|
|
$
|
21
|
|
(Millions of dollars)
|
|
||
2018
|
$
|
131
|
|
2019
|
114
|
|
|
2020
|
94
|
|
|
2021
|
76
|
|
|
2022
|
61
|
|
|
Thereafter
|
107
|
|
|
|
$
|
583
|
|
(Millions of dollars)
Year Ended December 31,
|
2017
|
|
2016
|
|
2015
|
||||||
United States
|
$
|
1,003
|
|
|
$
|
954
|
|
|
$
|
980
|
|
Foreign
|
1,284
|
|
|
1,094
|
|
|
1,180
|
|
|||
Total income before income taxes
|
$
|
2,287
|
|
|
$
|
2,048
|
|
|
$
|
2,160
|
|
(a)
|
Includes the following amounts related to the Tax Act:
|
|
Current
|
|
Deferred
|
|
Total
|
||||||
U.S. federal
|
$
|
414
|
|
|
$
|
(333
|
)
|
|
$
|
81
|
|
State and local
|
53
|
|
|
—
|
|
|
53
|
|
|||
Foreign
|
60
|
|
|
200
|
|
|
260
|
|
|||
Total tax act
|
$
|
527
|
|
|
$
|
(133
|
)
|
|
$
|
394
|
|
(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. Other permanent items and tax rate changes were not significant.
|
(a)
|
Includes deferred taxes of $
217 million
and $
352 million
in
2017
and
2016
, respectively, related to pension / OPEB funded status (see Notes 7 and 16).
|
(b)
|
Includes $
130 million
and $
233 million
in
2017
and
2016
, respectively, related to research and development costs
and
$42 million
and $
45 million
in
2017
and
2016
, respectively, related to goodwill.
|
(c)
|
Summary of valuation allowances relating to deferred tax assets follows (millions of dollars):
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
Balance, January 1,
|
$
|
(132
|
)
|
|
$
|
(123
|
)
|
|
$
|
(106
|
)
|
|
Income tax (charge) benefit (i)
|
59
|
|
|
(13
|
)
|
|
(20
|
)
|
|||
|
Translation adjustments
|
(3
|
)
|
|
(2
|
)
|
|
4
|
|
|||
|
Other, including write-offs
|
—
|
|
|
6
|
|
|
(1
|
)
|
|||
|
Balance, December 31,
|
$
|
(76
|
)
|
|
$
|
(132
|
)
|
|
$
|
(123
|
)
|
(i)
|
2017 includes a
$59 million
benefit related to the utilization of foreign tax credits under the Tax Act.
|
(Millions of dollars)
|
2017
|
|
2016
|
|
2015
|
||||||
Unrecognized income tax benefits, January 1
|
$
|
56
|
|
|
$
|
68
|
|
|
$
|
71
|
|
Additions for tax positions of prior years
|
48
|
|
|
6
|
|
|
21
|
|
|||
Reductions for tax positions of prior years
|
(26
|
)
|
|
(15
|
)
|
|
(13
|
)
|
|||
Reductions for settlements with taxing authorities (a)
|
(26
|
)
|
|
(2
|
)
|
|
(3
|
)
|
|||
Foreign currency translation and other
|
2
|
|
|
(1
|
)
|
|
(8
|
)
|
|||
Unrecognized income tax benefits, December 31
|
$
|
54
|
|
|
$
|
56
|
|
|
$
|
68
|
|
(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.
|
|
2017
|
|
2016
|
|
2015
|
||||||
Numerator (Millions of dollars)
|
|
|
|
|
|
||||||
Net income – Praxair, Inc.
|
$
|
1,247
|
|
|
$
|
1,500
|
|
|
$
|
1,547
|
|
Denominator (Thousands of shares)
|
|
|
|
|
|
||||||
Weighted average shares outstanding
|
285,893
|
|
|
285,289
|
|
|
286,606
|
|
|||
Shares earned and issuable under compensation plans
|
368
|
|
|
388
|
|
|
399
|
|
|||
Weighted average shares used in basic earnings per share
|
286,261
|
|
|
285,677
|
|
|
287,005
|
|
|||
Effect of dilutive securities
|
|
|
|
|
|
||||||
Stock options and awards
|
2,853
|
|
|
2,080
|
|
|
2,050
|
|
|||
Weighted average shares used in diluted earnings per share
|
289,114
|
|
|
287,757
|
|
|
289,055
|
|
|||
Basic Earnings Per Common Share
|
$
|
4.36
|
|
|
$
|
5.25
|
|
|
$
|
5.39
|
|
Diluted Earnings Per Common Share
|
$
|
4.32
|
|
|
$
|
5.21
|
|
|
$
|
5.35
|
|
(Millions of dollars)
Year Ended December 31,
|
2017
|
|
2016
|
|
2015
|
||||||
Selling, General and Administrative
|
|
|
|
|
|
||||||
Selling
|
$
|
511
|
|
|
$
|
493
|
|
|
$
|
507
|
|
General and administrative
|
696
|
|
|
652
|
|
|
645
|
|
|||
|
$
|
1,207
|
|
|
$
|
1,145
|
|
|
$
|
1,152
|
|
Year Ended December 31,
|
2017
|
|
2016
|
|
2015
|
||||||
Depreciation and Amortization
|
|
|
|
|
|
||||||
Depreciation
|
$
|
1,136
|
|
|
$
|
1,071
|
|
|
$
|
1,059
|
|
Amortization of other intangibles (Note 10)
|
48
|
|
|
51
|
|
|
47
|
|
|||
|
$
|
1,184
|
|
|
$
|
1,122
|
|
|
$
|
1,106
|
|
Year Ended December 31,
|
2017
|
|
2016
|
|
2015
|
||||||
Other Income (Expenses) – Net
|
|
|
|
|
|
||||||
Currency related net gains (losses)
|
$
|
(3
|
)
|
|
$
|
1
|
|
|
$
|
(2
|
)
|
Partnership income
|
6
|
|
|
5
|
|
|
4
|
|
|||
Severance expense
|
(6
|
)
|
|
(7
|
)
|
|
(5
|
)
|
|||
Business divestitures and asset gains (losses) – net
|
4
|
|
|
16
|
|
|
34
|
|
|||
Other – net
|
3
|
|
|
8
|
|
|
(3
|
)
|
|||
|
$
|
4
|
|
|
$
|
23
|
|
|
$
|
28
|
|
Year Ended December 31,
|
2017
|
|
2016
|
|
2015
|
||||||
Interest Expense – Net
|
|
|
|
|
|
||||||
Interest incurred on debt
|
$
|
189
|
|
|
$
|
208
|
|
|
$
|
194
|
|
Interest capitalized
|
(28
|
)
|
|
(34
|
)
|
|
(33
|
)
|
|||
Bond redemption (a)
|
—
|
|
|
16
|
|
|
—
|
|
|||
|
$
|
161
|
|
|
$
|
190
|
|
|
$
|
161
|
|
Year Ended December 31,
|
2017
|
|
2016
|
|
2015
|
||||||
Income Attributable to Noncontrolling Interests
|
|
|
|
|
|
||||||
Noncontrolling interests' operations
|
$
|
59
|
|
|
$
|
35
|
|
|
$
|
34
|
|
Redeemable noncontrolling interests' operations (Note 14)
|
2
|
|
|
3
|
|
|
10
|
|
|||
|
$
|
61
|
|
|
$
|
38
|
|
|
$
|
44
|
|
(Millions of dollars)
December 31,
|
2017
|
|
2016
|
||||
Accounts Receivable
|
|
|
|
||||
Trade
|
$
|
1,814
|
|
|
$
|
1,640
|
|
Other
|
128
|
|
|
122
|
|
||
|
1,942
|
|
|
1,762
|
|
||
Less: allowance for doubtful accounts (b)
|
(138
|
)
|
|
(121
|
)
|
||
|
$
|
1,804
|
|
|
$
|
1,641
|
|
December 31,
|
2017
|
|
2016
|
||||
Inventories
|
|
|
|
||||
Raw materials and supplies
|
$
|
224
|
|
|
$
|
197
|
|
Work in process
|
57
|
|
|
45
|
|
||
Finished goods
|
333
|
|
|
308
|
|
||
|
$
|
614
|
|
|
$
|
550
|
|
December 31,
|
2017
|
|
2016
|
||||
Prepaid and Other Current Assets
|
|
|
|
||||
Prepaid (c)
|
185
|
|
|
108
|
|
||
Other
|
65
|
|
|
57
|
|
||
|
$
|
250
|
|
|
$
|
165
|
|
December 31,
|
2017
|
|
2016
|
||||
Other Long-term Assets
|
|
|
|
||||
Pension assets (Note 16)
|
$
|
17
|
|
|
$
|
13
|
|
Insurance contracts (d)
|
74
|
|
|
74
|
|
||
Long-term receivables, net (e)
|
54
|
|
|
46
|
|
||
Deposits
|
70
|
|
|
56
|
|
||
Investments carried at cost
|
12
|
|
|
14
|
|
||
Deferred charges
|
47
|
|
|
51
|
|
||
Deferred income taxes (Note 5)
|
198
|
|
|
185
|
|
||
Other
|
109
|
|
|
119
|
|
||
|
$
|
581
|
|
|
$
|
558
|
|
December 31,
|
2017
|
|
2016
|
||||
Other Current Liabilities
|
|
|
|
||||
Accrued expenses
|
$
|
319
|
|
|
$
|
285
|
|
Payroll
|
170
|
|
|
141
|
|
||
Cost reduction program (Note 2)
|
19
|
|
|
59
|
|
||
Pension and postretirement (Note 16)
|
30
|
|
|
24
|
|
||
Interest payable
|
81
|
|
|
78
|
|
||
Employee benefit accrual
|
23
|
|
|
23
|
|
||
Insurance reserves
|
12
|
|
|
8
|
|
||
Other
|
222
|
|
|
223
|
|
||
|
$
|
876
|
|
|
$
|
841
|
|
December 31,
|
2017
|
|
2016
|
||||
Other Long-term Liabilities
|
|
|
|
||||
Pension and postretirement (Note 16)
|
$
|
851
|
|
|
$
|
863
|
|
Tax liabilities for uncertain tax positions
|
35
|
|
|
44
|
|
||
Tax Act liabilities for deemed repatriation (Note 5)
|
388
|
|
|
—
|
|
||
Cost reduction program (Note 2)
|
2
|
|
|
6
|
|
||
Interest and penalties for uncertain tax positions (Note 5)
|
8
|
|
|
6
|
|
||
Insurance reserves
|
23
|
|
|
25
|
|
||
Other
|
281
|
|
|
269
|
|
||
|
$
|
1,588
|
|
|
$
|
1,213
|
|
December 31,
|
2017
|
|
2016
|
||||
Deferred Credits
|
|
|
|
||||
Deferred income taxes (Note 5)
|
$
|
1,167
|
|
|
$
|
1,209
|
|
Other
|
69
|
|
|
63
|
|
||
|
$
|
1,236
|
|
|
$
|
1,272
|
|
December 31,
|
2017
|
|
2016
|
||||
Accumulated Other Comprehensive Income (Loss)
|
|
|
|
||||
Cumulative translation adjustment - net of taxes:
|
|
|
|
||||
North America (f)
|
$
|
(885
|
)
|
|
$
|
(1,038
|
)
|
South America (f)
|
(2,004
|
)
|
|
(1,969
|
)
|
||
Europe (f)
|
(398
|
)
|
|
(504
|
)
|
||
Asia (f)
|
(151
|
)
|
|
(383
|
)
|
||
Surface Technologies
|
(17
|
)
|
|
(52
|
)
|
||
|
(3,455
|
)
|
|
(3,946
|
)
|
||
Derivatives – net of taxes
|
(1
|
)
|
|
(1
|
)
|
||
Pension/OPEB funded status obligation (net of $347 million and $352 million tax benefit in 2017 and 2016, respectively) (Note 16)
|
(642
|
)
|
|
(653
|
)
|
||
|
$
|
(4,098
|
)
|
|
$
|
(4,600
|
)
|
(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).
|
(b)
|
Provisions to the allowance for doubtful accounts were $
33 million
, $
41 million
, and $
35 million
in
2017
,
2016
, and
2015
, respectively. The allowance activity in each period related primarily to write-offs of uncollectible amounts, net of recoveries and currency movements.
|
(c)
|
Includes estimated income tax payments of
$58 million
and
$39 million
in 2017 and 2016, respectively. 2017 also includes an energy prepayment of
$58 million
made in the third quarter.
|
(d)
|
Consists primarily of insurance contracts and other investments to be utilized for non-qualified pension and OPEB obligations.
|
(e)
|
Long-term receivables are not material and are largely reserved. The balances at
December 31, 2017
and
2016
are net of reserves of $
51 million
and $
50 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.
|
(f)
|
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 China, India and Korea.
|
(Millions of dollars)
December 31,
|
|
Depreciable Lives (Yrs)
|
|
2017
|
|
2016
|
||||
Production plants (primarily 15-year life) (a)
|
|
10-20
|
|
$
|
16,258
|
|
|
$
|
14,588
|
|
Storage tanks
|
|
15-20
|
|
2,620
|
|
|
2,360
|
|
||
Transportation equipment and other
|
|
3-15
|
|
2,173
|
|
|
2,038
|
|
||
Cylinders (primarily 30-year life)
|
|
10-30
|
|
1,875
|
|
|
1,722
|
|
||
Buildings
|
|
25-40
|
|
1,202
|
|
|
1,096
|
|
||
Land and improvements (b)
|
|
0-20
|
|
589
|
|
|
559
|
|
||
Construction in progress
|
|
|
|
1,159
|
|
|
1,558
|
|
||
|
|
|
|
25,876
|
|
|
23,921
|
|
||
Less: accumulated depreciation
|
|
|
|
(13,819
|
)
|
|
(12,444
|
)
|
||
|
|
|
|
$
|
12,057
|
|
|
$
|
11,477
|
|
(Millions of dollars)
|
North
America
|
|
South
America
|
|
Europe
|
|
Asia
|
|
Surface
Technologies
|
|
Total
|
||||||||||||
Balance, December 31, 2015
|
$
|
2,111
|
|
|
$
|
98
|
|
|
$
|
582
|
|
|
$
|
59
|
|
|
$
|
136
|
|
|
$
|
2,986
|
|
Acquisitions (Note 3)
|
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
|
|
Acquisitions (Note 3)
|
24
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24
|
|
||||||
Purchase adjustments & other
|
—
|
|
|
(1
|
)
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Foreign currency translation
|
13
|
|
|
(2
|
)
|
|
68
|
|
|
3
|
|
|
10
|
|
|
92
|
|
||||||
Balance, December 31, 2017
|
$
|
2,202
|
|
|
$
|
129
|
|
|
$
|
698
|
|
|
$
|
61
|
|
|
$
|
143
|
|
|
$
|
3,233
|
|
(Millions of dollars)
For the year ended December 31, 2017
|
Customer &
License/Use Agreements |
|
Non-compete
Agreements |
|
Patents
& Other |
|
Total
|
||||||||
Cost:
|
|
|
|
|
|
|
|
||||||||
Balance, December 31, 2016
|
$
|
751
|
|
|
$
|
34
|
|
|
$
|
51
|
|
|
$
|
836
|
|
Additions (Note 3)
|
1
|
|
|
2
|
|
|
—
|
|
|
3
|
|
||||
Foreign currency translation
|
22
|
|
|
—
|
|
|
1
|
|
|
23
|
|
||||
Other *
|
(2
|
)
|
|
(8
|
)
|
|
—
|
|
|
(10
|
)
|
||||
Balance, December 31, 2017
|
772
|
|
|
28
|
|
|
52
|
|
|
852
|
|
||||
Less: accumulated amortization:
|
|
|
|
|
|
|
|
||||||||
Balance, December 31, 2016
|
(214
|
)
|
|
(22
|
)
|
|
(17
|
)
|
|
(253
|
)
|
||||
Amortization expense
|
(40
|
)
|
|
(4
|
)
|
|
(4
|
)
|
|
(48
|
)
|
||||
Foreign currency translation
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
||||
Other *
|
2
|
|
|
8
|
|
|
—
|
|
|
10
|
|
||||
Balance, December 31, 2017
|
(260
|
)
|
|
(18
|
)
|
|
(21
|
)
|
|
(299
|
)
|
||||
Net balance at December 31, 2017
|
$
|
512
|
|
|
$
|
10
|
|
|
$
|
31
|
|
|
$
|
553
|
|
(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
|
|
*
|
Other primarily relates to the write-off of fully amortized assets, purchase accounting adjustments and reclassifications.
|
(Millions of dollars)
|
2017
|
|
2016
|
||||
Short-term
|
|
|
|
||||
Commercial paper and U.S. bank borrowings
|
$
|
202
|
|
|
$
|
333
|
|
Other bank borrowings (primarily international)
|
36
|
|
|
101
|
|
||
Total short-term debt
|
238
|
|
|
434
|
|
||
Long-term (a)
|
|
|
|
||||
U.S. borrowings
|
|
|
|
||||
Floating Rate Notes due 2017 (c)
|
—
|
|
|
150
|
|
||
1.05% Notes due 2017 (c)
|
—
|
|
|
400
|
|
||
1.20% Notes due 2018
|
498
|
|
|
499
|
|
||
1.25% Notes due 2018 (b)
|
475
|
|
|
478
|
|
||
4.50% Notes due 2019
|
599
|
|
|
598
|
|
||
1.90% Notes due 2019
|
500
|
|
|
499
|
|
||
1.50% Euro denominated notes due 2020
|
717
|
|
|
627
|
|
||
2.25% Notes due 2020
|
299
|
|
|
299
|
|
||
4.05% Notes due 2021
|
498
|
|
|
497
|
|
||
3.00% Notes due 2021
|
497
|
|
|
496
|
|
||
2.45% Notes due 2022
|
598
|
|
|
597
|
|
||
2.20% Notes due 2022
|
498
|
|
|
498
|
|
||
2.70% Notes due 2023
|
498
|
|
|
497
|
|
||
1.20% Euro denominated notes due 2024
|
658
|
|
|
575
|
|
||
2.65% Notes due 2025
|
397
|
|
|
397
|
|
||
1.625% Euro denominated notes due 2025
|
594
|
|
|
519
|
|
||
3.20% Notes due 2026
|
725
|
|
|
725
|
|
||
3.55% Notes due 2042
|
662
|
|
|
662
|
|
||
Other
|
12
|
|
|
12
|
|
||
International bank borrowings
|
33
|
|
|
49
|
|
||
Obligations under capital lease
|
4
|
|
|
7
|
|
||
|
8,762
|
|
|
9,081
|
|
||
Less: current portion of long-term debt
|
(979
|
)
|
|
(164
|
)
|
||
Total long-term debt
|
7,783
|
|
|
8,917
|
|
||
Total debt
|
$
|
9,000
|
|
|
$
|
9,515
|
|
(a)
|
Amounts are net of unamortized discounts, premiums and/or debt issuance cost as applicable.
|
(b)
|
The fair value increase related to hedge accounting for the year ended
December 31, 2017
was not significant. 2016 includes a
$4 million
fair value increase. See Note 12 for additional information.
|
(c)
|
In February and November 2017, Praxair repaid
$150 million
of floating rate notes and
$400 million
of
1.05%
notes, respectively, that became due.
|
Millions of dollars
|
Total
Facility
|
|
Borrowings
Outstanding
|
|
Available for
Borrowing
|
|
Expires
|
||||||
Senior Unsecured
|
$
|
2,500
|
|
|
$
|
—
|
|
|
$
|
2,500
|
|
|
December 2019
|
Revolving Credit Facility
|
$
|
500
|
|
|
$
|
—
|
|
|
$
|
500
|
|
|
June 2018
|
|
|
|
|
|
Fair Value
|
||||||||||||||||||
(Millions of dollars)
|
Notional Amounts
|
|
Assets
|
|
Liabilities
|
||||||||||||||||||
December 31,
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||
Derivatives Not Designated as Hedging Instruments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Currency contracts:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance sheet items (a)
|
$
|
2,693
|
|
|
$
|
2,104
|
|
|
$
|
16
|
|
|
$
|
11
|
|
|
$
|
16
|
|
|
$
|
18
|
|
Derivatives Designated as Hedging Instruments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Currency contracts:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance sheet items (a)
|
$
|
38
|
|
|
$
|
38
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
2
|
|
|
$
|
—
|
|
Forecasted purchase (a)
|
4
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Interest rate contracts:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate swaps (a)
|
475
|
|
|
475
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
||||||
Total Hedges
|
$
|
517
|
|
|
$
|
513
|
|
|
$
|
1
|
|
|
$
|
7
|
|
|
$
|
2
|
|
|
$
|
—
|
|
Total Derivatives
|
$
|
3,210
|
|
|
$
|
2,617
|
|
|
$
|
17
|
|
|
$
|
18
|
|
|
$
|
18
|
|
|
$
|
18
|
|
(a)
|
Assets are recorded in prepaid and other current assets, and liabilities are recorded in other current liabilities.
|
|
|
|
|
|
Unrecognized Gain / (Loss) (a)
|
||||||||
(Millions of dollars)
|
Year
Terminated
|
|
Original
Gain / (Loss)
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||
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
|
)
|
|
(4
|
)
|
|
(5
|
)
|
|||
$600 million 4.50% fixed-rate notes that mature in 2019 (b)
|
2009
|
|
16
|
|
|
3
|
|
|
4
|
|
|||
Total – pre-tax
|
|
|
|
|
$
|
(2
|
)
|
|
$
|
(2
|
)
|
||
Less: income taxes
|
|
|
|
|
1
|
|
|
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,
|
2017
|
|
2016
|
|
2015
|
||||||
Derivatives Not Designated as Hedging Instruments
|
|
|
|
|
|
||||||
Currency contracts:
|
|
|
|
|
|
||||||
Balance sheet items:
|
|
|
|
|
|
||||||
Debt-related
|
$
|
121
|
|
|
$
|
21
|
|
|
$
|
(162
|
)
|
Other balance sheet items
|
—
|
|
|
4
|
|
|
(8
|
)
|
|||
Total
|
$
|
121
|
|
|
$
|
25
|
|
|
$
|
(170
|
)
|
(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,
|
2017
|
|
2016
|
|
2015
|
|
2017
|
2016
|
2015
|
||||||||||||
Derivatives Designated as Hedging Instruments**
|
|
|
|
|
|
|
|
|
|
||||||||||||
Currency contracts:
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net Investment hedge
|
$
|
—
|
|
|
$
|
(4
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
—
|
|
—
|
|
|
Forecasted purchases
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Balance sheet items
|
(1
|
)
|
|
1
|
|
|
1
|
|
|
—
|
|
—
|
|
(1
|
)
|
||||||
Interest rate contracts:
|
|
|
|
|
|
|
|
|
|
||||||||||||
Treasury rate locks
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
(1
|
)
|
—
|
|
||||||
Total – Pre tax
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
$
|
1
|
|
|
$
|
—
|
|
$
|
(1
|
)
|
$
|
(1
|
)
|
Less: income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
1
|
|
—
|
|
||||||
Total - Net of Taxes
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
$
|
1
|
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(1
|
)
|
|
Fair Value Measurements Using
|
||||||||||||||||||||||
(Millions of dollars)
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative assets
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17
|
|
|
$
|
18
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18
|
|
|
$
|
18
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(Millions of dollars)
|
2017
|
|
2016
|
|
2015
|
||||||
Beginning Balance
|
$
|
11
|
|
|
$
|
113
|
|
|
$
|
176
|
|
Net income
|
2
|
|
|
3
|
|
|
10
|
|
|||
Distributions to noncontrolling interest
|
(3
|
)
|
|
(2
|
)
|
|
(7
|
)
|
|||
Redemption value adjustment/accretion *
|
1
|
|
|
(6
|
)
|
|
(40
|
)
|
|||
Foreign currency translation and other
|
—
|
|
|
7
|
|
|
(17
|
)
|
|||
Purchase/divestiture of noncontrolling interest **
|
—
|
|
|
(104
|
)
|
|
(9
|
)
|
|||
Ending Balance
|
$
|
11
|
|
|
$
|
11
|
|
|
$
|
113
|
|
Year Ended December 31,
|
2017
|
|
2016
|
|
2015
|
|||
Dividend yield
|
2.7
|
%
|
|
2.9
|
%
|
|
2.2
|
%
|
Volatility
|
14.0
|
%
|
|
14.4
|
%
|
|
13.5
|
%
|
Risk-free interest rate
|
2.13
|
%
|
|
1.41
|
%
|
|
1.51
|
%
|
Expected term years
|
6
|
|
|
6
|
|
|
5
|
|
Activity
|
Number of
Options
(000’s)
|
|
Average
Exercise
Price
|
|
Average
Remaining
Life
|
|
Aggregate
Intrinsic
Value
|
|||||
Outstanding at January 1, 2017
|
11,708
|
|
|
$
|
101.58
|
|
|
|
|
|
||
Granted
|
2,091
|
|
|
118.71
|
|
|
|
|
|
|||
Exercised
|
(2,877
|
)
|
|
86.82
|
|
|
|
|
|
|||
Cancelled or expired
|
(135
|
)
|
|
113.37
|
|
|
|
|
|
|||
Outstanding at December 31, 2017
|
10,787
|
|
|
$
|
108.70
|
|
|
6.1
|
|
$
|
496
|
|
Exercisable at December 31, 2017
|
6,757
|
|
|
$
|
105.80
|
|
|
4.7
|
|
$
|
330
|
|
|
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, 2017
|
714
|
|
|
$
|
115.72
|
|
|
274
|
|
|
$
|
109.49
|
|
Granted
|
224
|
|
|
114.82
|
|
|
83
|
|
|
111.95
|
|
||
Vested
|
(77
|
)
|
|
121.16
|
|
|
(83
|
)
|
|
118.24
|
|
||
Cancelled and Forfeited
|
(196
|
)
|
|
113.66
|
|
|
(10
|
)
|
|
108.44
|
|
||
Non-vested at December 31, 2017
|
665
|
|
|
$
|
113.40
|
|
|
264
|
|
|
$
|
107.56
|
|
(Millions of dollars)
Year Ended December 31,
|
Pensions
|
|
OPEB
|
||||||||||||||||||||
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
|||||||||||||
Service cost
|
$
|
46
|
|
|
$
|
45
|
|
|
$
|
54
|
|
|
$
|
3
|
|
|
$
|
2
|
|
|
$
|
3
|
|
Interest cost
|
103
|
|
|
100
|
|
|
112
|
|
|
5
|
|
|
6
|
|
|
7
|
|
||||||
Expected return on plan assets
|
(161
|
)
|
|
(157
|
)
|
|
(154
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net amortization and deferral
|
68
|
|
|
59
|
|
|
79
|
|
|
(3
|
)
|
|
(3
|
)
|
|
(2
|
)
|
||||||
Curtailment gain *
|
—
|
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
|
—
|
|
|
—
|
|
||||||
Net periodic benefit cost before pension settlement charges
|
$
|
56
|
|
|
$
|
47
|
|
|
$
|
91
|
|
|
$
|
(13
|
)
|
|
$
|
5
|
|
|
$
|
8
|
|
Pension settlement charges **
|
2
|
|
|
4
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net periodic benefit cost
|
$
|
58
|
|
|
$
|
51
|
|
|
$
|
98
|
|
|
$
|
(13
|
)
|
|
$
|
5
|
|
|
$
|
8
|
|
(Millions of dollars)
Year Ended December 31,
|
Pensions
|
|
|
||||||||||||||||||||
2017
|
|
2016
|
|
OPEB
|
|||||||||||||||||||
U.S.
|
|
International
|
|
U.S.
|
|
International
|
|
2017
|
|
2016
|
|||||||||||||
Change in Benefit Obligation ("PBO")
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Benefit obligation January 1
|
$
|
2,066
|
|
|
$
|
666
|
|
|
$
|
1,992
|
|
|
$
|
580
|
|
|
$
|
156
|
|
|
$
|
160
|
|
Service cost
|
32
|
|
|
14
|
|
|
31
|
|
|
14
|
|
|
3
|
|
|
2
|
|
||||||
Interest cost
|
70
|
|
|
33
|
|
|
70
|
|
|
30
|
|
|
5
|
|
|
6
|
|
||||||
Participant contributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
10
|
|
||||||
Plan amendment
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(7
|
)
|
||||||
Actuarial loss (gain)
|
153
|
|
|
8
|
|
|
104
|
|
|
76
|
|
|
(6
|
)
|
|
4
|
|
||||||
Benefits paid
|
(106
|
)
|
|
(43
|
)
|
|
(131
|
)
|
|
(33
|
)
|
|
(13
|
)
|
|
(20
|
)
|
||||||
Plan curtailment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
||||||
Foreign currency translation and other
|
—
|
|
|
47
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
1
|
|
||||||
Benefit obligation, December 31
|
$
|
2,215
|
|
|
$
|
725
|
|
|
$
|
2,066
|
|
|
$
|
666
|
|
|
$
|
146
|
|
|
$
|
156
|
|
Accumulated benefit obligation ("ABO")
|
$
|
2,113
|
|
|
$
|
691
|
|
|
$
|
1,970
|
|
|
$
|
639
|
|
|
|
|
|
||||
Change in Plan Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fair value of plan assets, January 1
|
$
|
1,507
|
|
|
$
|
507
|
|
|
$
|
1,509
|
|
|
$
|
475
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Actual return on plan assets
|
243
|
|
|
44
|
|
|
117
|
|
|
47
|
|
|
—
|
|
|
—
|
|
||||||
Company contributions
|
4
|
|
|
15
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
—
|
|
||||||
Benefits paid from plan assets
|
(99
|
)
|
|
(32
|
)
|
|
(119
|
)
|
|
(26
|
)
|
|
—
|
|
|
—
|
|
||||||
Foreign currency translation
|
—
|
|
|
33
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Fair value of plan assets, December 31
|
$
|
1,655
|
|
|
$
|
567
|
|
|
$
|
1,507
|
|
|
$
|
507
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Funded Status, End of Year
|
$
|
(560
|
)
|
|
$
|
(158
|
)
|
|
$
|
(559
|
)
|
|
$
|
(159
|
)
|
|
$
|
(146
|
)
|
|
$
|
(156
|
)
|
Recorded in the Balance Sheet
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other long-term assets
|
$
|
—
|
|
|
$
|
17
|
|
|
$
|
—
|
|
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other current liabilities
|
(13
|
)
|
|
(7
|
)
|
|
(7
|
)
|
|
(5
|
)
|
|
(10
|
)
|
|
(12
|
)
|
||||||
Other long-term liabilities
|
(547
|
)
|
|
(168
|
)
|
|
(552
|
)
|
|
(167
|
)
|
|
(136
|
)
|
|
(144
|
)
|
||||||
Net amount recognized, December 31
|
$
|
(560
|
)
|
|
$
|
(158
|
)
|
|
$
|
(559
|
)
|
|
$
|
(159
|
)
|
|
$
|
(146
|
)
|
|
$
|
(156
|
)
|
Amounts recognized in accumulated other comprehensive income (loss) consist of:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net actuarial loss (gain)
|
$
|
807
|
|
|
$
|
192
|
|
|
$
|
832
|
|
|
$
|
189
|
|
|
$
|
(15
|
)
|
|
$
|
(20
|
)
|
Prior service cost (credit)
|
—
|
|
|
11
|
|
|
—
|
|
|
12
|
|
|
(6
|
)
|
|
(8
|
)
|
||||||
Deferred tax benefit (Note 5)
|
(309
|
)
|
|
(47
|
)
|
|
(318
|
)
|
|
(46
|
)
|
|
9
|
|
|
12
|
|
||||||
Amount recognized in accumulated other comprehensive income (loss) (Note 7)
|
$
|
498
|
|
|
$
|
156
|
|
|
$
|
514
|
|
|
$
|
155
|
|
|
$
|
(12
|
)
|
|
$
|
(16
|
)
|
|
Pensions
|
|
OPEB
|
||||||||||||
(Millions of dollars)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Current year net actuarial losses (gains)*
|
$
|
34
|
|
|
$
|
172
|
|
|
$
|
(6
|
)
|
|
$
|
4
|
|
Amortization of net actuarial gains (losses)
|
(67
|
)
|
|
(60
|
)
|
|
1
|
|
|
3
|
|
||||
Plan amendment
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(7
|
)
|
||||
Amortization of prior service credits (costs)
|
(1
|
)
|
|
1
|
|
|
2
|
|
|
—
|
|
||||
Pension settlements (Note 2)
|
(2
|
)
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
||||
Curtailments
|
—
|
|
|
—
|
|
|
12
|
|
|
—
|
|
||||
Foreign currency translation and other
|
13
|
|
|
(2
|
)
|
|
(2
|
)
|
|
(2
|
)
|
||||
Total recognized in other comprehensive income
|
$
|
(23
|
)
|
|
$
|
105
|
|
|
$
|
7
|
|
|
$
|
(2
|
)
|
*
|
Pension net actuarial losses in
2017
are driven by lower U.S. discount rates, which more than offset favorable plan asset experience. Pension net actuarial losses in
2016
are primarily driven by liability experience as well as lower U.S. discount rates. OPEB net actuarial gains in
2017
relate primarily to favorable liability experience whereas losses in
2016
are largely due to unfavorable plan experience.
|
(Millions of dollars)
|
Pension
|
|
OPEB
|
||||
Net actuarial loss (gain)
|
$
|
70
|
|
|
$
|
(2
|
)
|
Prior service cost (credit)
|
2
|
|
|
—
|
|
||
|
$
|
72
|
|
|
$
|
(2
|
)
|
(Millions of dollars)
Year Ended December 31,
|
Pensions
|
||||||||||||||
2017
|
|
2016
|
|||||||||||||
U.S.
|
|
International
|
|
U.S.
|
|
International
|
|||||||||
Projected benefit obligation ("PBO")
|
$
|
2,215
|
|
|
$
|
391
|
|
|
$
|
2,066
|
|
|
$
|
372
|
|
Accumulated benefit obligation ("ABO")
|
$
|
2,113
|
|
|
$
|
383
|
|
|
$
|
1,970
|
|
|
$
|
365
|
|
Fair value of plan assets
|
$
|
1,655
|
|
|
$
|
215
|
|
|
$
|
1,507
|
|
|
$
|
199
|
|
|
Pensions
|
|
|
|
|
||||||||||||
|
U.S.
|
|
International
|
|
OPEB
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||
Weighted average assumptions used to determine benefit obligations at December 31,
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Discount rate
|
3.61
|
%
|
|
4.05
|
%
|
|
4.46
|
%
|
|
5.09
|
%
|
|
3.58
|
%
|
|
4.21
|
%
|
Rate of increase in compensation levels
|
3.25
|
%
|
|
3.25
|
%
|
|
3.35
|
%
|
|
3.73
|
%
|
|
N/A
|
|
|
N/A
|
|
Weighted average assumptions used to determine net periodic benefit cost for years ended 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
|
|
Expected long-term rate of return on plan assets (1)
|
8.00
|
%
|
|
8.00
|
%
|
|
7.91
|
%
|
|
7.92
|
%
|
|
N/A
|
|
|
N/A
|
|
(1)
|
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, 2017 were approximately
5.8%
and
6.7%
, respectively. For the international plan assets, the actual annualized total returns for the same two periods were approximately
7.5%
and
8.3%
, 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 2018, 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
|
2017
|
|
2016
|
||
Healthcare cost trend assumed
|
6.50
|
%
|
|
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
|
2023
|
|
|
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
|
$
|
3
|
|
|
$
|
(2
|
)
|
|
U.S.
|
|
International
|
||||||||||||
Asset Category
|
Target
|
|
2017
|
|
2016
|
|
Target
|
|
2017
|
|
2016
|
||||
Equity securities
|
50%-70%
|
|
61
|
%
|
|
59
|
%
|
|
30%-50%
|
|
38
|
%
|
|
35
|
%
|
Fixed income securities
|
20%-40%
|
|
30
|
%
|
|
32
|
%
|
|
40%-60%
|
|
53
|
%
|
|
56
|
%
|
Other
|
2% - 10%
|
|
9
|
%
|
|
9
|
%
|
|
0%-10%
|
|
9
|
%
|
|
9
|
%
|
|
Fair Value Measurements Using
|
|
|
|
|
||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3 **
|
|
Total
|
||||||||||||||||||||||||
(Millions of dollars)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||||||
Cash and cash equivalents
|
$
|
7
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
3
|
|
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. equities
|
257
|
|
|
344
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
257
|
|
|
344
|
|
||||||||
International equities
|
45
|
|
|
37
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45
|
|
|
37
|
|
||||||||
Mutual funds
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. government bonds
|
—
|
|
|
—
|
|
|
54
|
|
|
51
|
|
|
—
|
|
|
—
|
|
|
54
|
|
|
51
|
|
||||||||
International government bonds
|
—
|
|
|
—
|
|
|
192
|
|
|
159
|
|
|
—
|
|
|
—
|
|
|
192
|
|
|
159
|
|
||||||||
Mutual funds
|
118
|
|
|
104
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
118
|
|
|
104
|
|
||||||||
Corporate bonds
|
—
|
|
|
—
|
|
|
181
|
|
|
194
|
|
|
—
|
|
|
—
|
|
|
181
|
|
|
194
|
|
||||||||
Other:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Insurance contracts
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
50
|
|
|
45
|
|
|
50
|
|
|
45
|
|
||||||||
Real estate funds
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
158
|
|
|
135
|
|
|
158
|
|
|
135
|
|
||||||||
Total plan assets at fair value,
December 31,
|
$
|
427
|
|
|
$
|
490
|
|
|
$
|
427
|
|
|
$
|
404
|
|
|
$
|
208
|
|
|
$
|
180
|
|
|
$
|
1,062
|
|
|
$
|
1,074
|
|
Pooled funds *
|
|
|
|
|
|
|
|
|
|
|
|
|
1,160
|
|
|
940
|
|
||||||||||||||
Total fair value plan assets
December 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2,222
|
|
|
$
|
2,014
|
|
(Millions of dollars)
|
Insurance
Contracts
|
|
Real Estate Funds
|
|
Total
|
||||||
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
|
|
|||
Gain/(Loss) for the period
|
(1
|
)
|
|
12
|
|
|
11
|
|
|||
Acquisitions
|
—
|
|
|
11
|
|
|
11
|
|
|||
Foreign currency translation
|
6
|
|
|
—
|
|
|
6
|
|
|||
Balance, December 31, 2017
|
$
|
50
|
|
|
$
|
158
|
|
|
$
|
208
|
|
(Millions of dollars)
|
Pensions
|
|
|
||||||||
Year Ended December 31,
|
U.S.
|
|
International
|
|
OPEB
|
||||||
2018
|
$
|
117
|
|
|
$
|
35
|
|
|
$
|
11
|
|
2019
|
124
|
|
|
36
|
|
|
11
|
|
|||
2020
|
125
|
|
|
38
|
|
|
11
|
|
|||
2021
|
127
|
|
|
38
|
|
|
11
|
|
|||
2022
|
129
|
|
|
38
|
|
|
10
|
|
|||
2023-2027
|
680
|
|
|
199
|
|
|
44
|
|
•
|
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 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, 2017
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
$235 million
. Praxair has not recorded any liabilities related to such claims based on management judgments, after considering judgments and opinions of outside counsel. Because litigation in Brazil historically takes many years to resolve, it is very difficult to estimate the timing of resolution of these matters; however, it is possible that certain of these matters may be resolved within the near term. The company is vigorously defending against the proceedings.
|
•
|
On September 1, 2010, CADE ("Brazilian Administrative Council for Economic Defense") announced alleged anticompetitive activity on the part of five industrial gas companies in Brazil and imposed fines on all five companies. Originally, CADE imposed a civil fine of R$
2.2 billion
Brazilian reais (US$
665 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$
514 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
|
||||
2018
|
$
|
575
|
|
|
$
|
842
|
|
2019
|
517
|
|
|
212
|
|
||
2020
|
451
|
|
|
11
|
|
||
2021
|
468
|
|
|
—
|
|
||
2022
|
437
|
|
|
—
|
|
||
Thereafter
|
2,511
|
|
|
—
|
|
||
|
$
|
4,959
|
|
|
$
|
1,065
|
|
(Millions of dollars)
|
2017
|
|
2016
|
|
2015
|
||||||
Sales (a)
|
|
|
|
|
|
||||||
North America
|
$
|
6,023
|
|
|
$
|
5,592
|
|
|
$
|
5,865
|
|
Europe
|
1,558
|
|
|
1,392
|
|
|
1,320
|
|
|||
South America
|
1,501
|
|
|
1,399
|
|
|
1,431
|
|
|||
Asia
|
1,738
|
|
|
1,555
|
|
|
1,551
|
|
|||
Surface Technologies
|
617
|
|
|
596
|
|
|
609
|
|
|||
|
$
|
11,437
|
|
|
$
|
10,534
|
|
|
$
|
10,776
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Operating Profit
|
|
|
|
|
|
||||||
North America
|
$
|
1,517
|
|
|
$
|
1,430
|
|
|
$
|
1,558
|
|
Europe
|
297
|
|
|
273
|
|
|
250
|
|
|||
South America
|
250
|
|
|
257
|
|
|
291
|
|
|||
Asia
|
333
|
|
|
276
|
|
|
289
|
|
|||
Surface Technologies
|
105
|
|
|
102
|
|
|
105
|
|
|||
Segment operating profit
|
2,502
|
|
|
2,338
|
|
|
2,493
|
|
|||
Transaction costs and other charges (Note 2)
|
(54
|
)
|
|
(100
|
)
|
|
(172
|
)
|
|||
Total operating profit
|
$
|
2,448
|
|
|
$
|
2,238
|
|
|
$
|
2,321
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Total Assets (b)
|
|
|
|
|
|
||||||
North America
|
$
|
10,419
|
|
|
$
|
10,019
|
|
|
$
|
9,748
|
|
Europe
|
3,282
|
|
|
2,928
|
|
|
2,704
|
|
|||
South America
|
2,738
|
|
|
2,748
|
|
|
2,124
|
|
|||
Asia
|
3,252
|
|
|
2,984
|
|
|
3,113
|
|
|||
Surface Technologies
|
745
|
|
|
653
|
|
|
630
|
|
|||
|
$
|
20,436
|
|
|
$
|
19,332
|
|
|
$
|
18,319
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Depreciation and Amortization
|
|
|
|
|
|
||||||
North America
|
$
|
631
|
|
|
$
|
614
|
|
|
$
|
609
|
|
Europe
|
169
|
|
|
155
|
|
|
145
|
|
|||
South America
|
159
|
|
|
133
|
|
|
135
|
|
|||
Asia
|
185
|
|
|
179
|
|
|
176
|
|
|||
Surface Technologies
|
40
|
|
|
41
|
|
|
41
|
|
|||
|
$
|
1,184
|
|
|
$
|
1,122
|
|
|
$
|
1,106
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Capital Expenditures and Acquisitions
|
|
|
|
|
|
||||||
North America
|
$
|
779
|
|
|
$
|
989
|
|
|
$
|
869
|
|
Europe
|
141
|
|
|
402
|
|
|
227
|
|
|||
South America
|
129
|
|
|
232
|
|
|
285
|
|
|||
Asia
|
209
|
|
|
165
|
|
|
208
|
|
|||
Surface Technologies
|
86
|
|
|
40
|
|
|
34
|
|
|||
|
$
|
1,344
|
|
|
$
|
1,828
|
|
|
$
|
1,623
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Sales by Product Group
|
|
|
|
|
|
||||||
Atmospheric gases and related
|
$
|
7,938
|
|
|
$
|
7,329
|
|
|
$
|
7,595
|
|
Process gases and other
|
2,882
|
|
|
2,609
|
|
|
2,572
|
|
|||
Surface technologies
|
617
|
|
|
596
|
|
|
609
|
|
|||
|
$
|
11,437
|
|
|
$
|
10,534
|
|
|
$
|
10,776
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Sales by Major Country
|
|
|
|
|
|
||||||
United States
|
$
|
4,973
|
|
|
$
|
4,623
|
|
|
$
|
4,771
|
|
Brazil
|
1,179
|
|
|
1,091
|
|
|
1,107
|
|
|||
Other – foreign
|
5,285
|
|
|
4,820
|
|
|
4,898
|
|
|||
|
$
|
11,437
|
|
|
$
|
10,534
|
|
|
$
|
10,776
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Long-lived Assets by Major Country (c)
|
|
|
|
|
|
||||||
United States
|
$
|
5,122
|
|
|
$
|
4,922
|
|
|
$
|
4,825
|
|
Brazil
|
1,225
|
|
|
1,262
|
|
|
986
|
|
|||
Other – foreign
|
5,710
|
|
|
5,293
|
|
|
5,187
|
|
|||
|
$
|
12,057
|
|
|
$
|
11,477
|
|
|
$
|
10,998
|
|
(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)
|
2017
|
|
2016
|
|
2015
|
||||||
North America
|
$
|
115
|
|
|
$
|
121
|
|
|
$
|
127
|
|
Europe
|
287
|
|
|
243
|
|
|
195
|
|
|||
Asia
|
325
|
|
|
353
|
|
|
343
|
|
|||
|
$
|
727
|
|
|
$
|
717
|
|
|
$
|
665
|
|
(c)
|
Long-lived assets include property, plant and equipment – net.
|
2017
|
1Q (a)
|
|
2Q (a)
|
|
3Q (a)
|
|
4Q (a)
|
|
YEAR (a)
|
||||||||||
Sales
|
$
|
2,728
|
|
|
$
|
2,834
|
|
|
$
|
2,922
|
|
|
$
|
2,953
|
|
|
$
|
11,437
|
|
Cost of sales, exclusive of depreciation and amortization
|
$
|
1,545
|
|
|
$
|
1,598
|
|
|
$
|
1,652
|
|
|
$
|
1,660
|
|
|
$
|
6,455
|
|
Depreciation and amortization
|
$
|
287
|
|
|
$
|
292
|
|
|
$
|
298
|
|
|
$
|
307
|
|
|
$
|
1,184
|
|
Operating profit
|
$
|
582
|
|
|
$
|
604
|
|
|
$
|
626
|
|
|
$
|
636
|
|
|
$
|
2,448
|
|
Net income – Praxair, Inc.
|
$
|
389
|
|
|
$
|
406
|
|
|
$
|
419
|
|
|
$
|
33
|
|
|
$
|
1,247
|
|
Basic Per Share Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
$
|
1.36
|
|
|
$
|
1.42
|
|
|
$
|
1.46
|
|
|
$
|
0.11
|
|
|
$
|
4.36
|
|
Weighted average shares (000’s)
|
285,509
|
|
|
286,090
|
|
|
286,467
|
|
|
286,976
|
|
|
286,261
|
|
|||||
Diluted Per Share Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
$
|
1.35
|
|
|
$
|
1.41
|
|
|
$
|
1.45
|
|
|
$
|
0.11
|
|
|
$
|
4.32
|
|
Weighted average shares (000’s)
|
287,384
|
|
|
288,535
|
|
|
289,216
|
|
|
290,456
|
|
|
289,114
|
|
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
|
|
(a)
|
2017
and
2016
include the impact of the following charges (see Notes 2, 5, 11 & 16):
|
(Millions of dollars)
|
Operating
Profit/
(Loss)
|
|
Net
Income/
(Loss)
|
|
Diluted Earnings Per Share
|
||||||
Transaction costs - Q1
|
$
|
(6
|
)
|
|
$
|
(6
|
)
|
|
$
|
(0.02
|
)
|
Transaction costs - Q2
|
(15
|
)
|
|
(15
|
)
|
|
(0.05
|
)
|
|||
Transaction costs - Q3
|
(14
|
)
|
|
(13
|
)
|
|
(0.05
|
)
|
|||
Pension settlement charge - Q3
|
(2
|
)
|
|
(1
|
)
|
|
—
|
|
|||
Transaction costs - Q4
|
(17
|
)
|
|
(14
|
)
|
|
(0.05
|
)
|
|||
Tax Act - Q4
|
—
|
|
|
(394
|
)
|
|
(1.36
|
)
|
|||
Year 2017
|
$
|
(54
|
)
|
|
$
|
(443
|
)
|
|
$
|
(1.53
|
)
|
|
|
|
|
|
|
||||||
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
|
)
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
STEPHEN F. ANGEL
|
|||
Chief Executive Officer and Chairman of Praxair
|
|||
Age
Director Since
Other Public Company Directorships
|
|
62
2006
PPG Industries, Inc.
|
Qualification Highlights
·
Industry
·
Praxair End-Markets
·
Praxair Foreign Markets
·
Operations
·
International business
·
Technology
·
Risk Management
·
Public company board
|
NANCE K. DICCIANI
|
|||
Former President & Chief Executive Officer of Honeywell Specialty Materials
|
|||
Age
Director Since
Other Public Company Directorships
|
|
70
2008
AgroFresh Solutions, Inc. Halliburton Company
LyondellBasell Industries
|
Qualification Highlights
·
Industry
·
Praxair End-Markets
·
Praxair Foreign Markets
·
Operations
·
International business
·
Technology
·
Risk Management
·
Public company board
|
EDWARD G. GALANTE
|
|||
Former Senior Vice President of ExxonMobil Corporation
|
|||
Age
Director Since
Other Public Company Directorships
|
|
67
2007
Celanese Corporation
Clean Harbors, Inc.
Tesoro Corporation
|
Qualification Highlights
·
Praxair End-Markets
·
Praxair Foreign Markets
·
Operations
·
International business
·
Technology
·
Risk Management
·
Public company board
|
RAYMOND W. LEBOEUF
|
|||
Former Chairman & Chief Executive Officer of PPG Industries, Inc.
|
|||
Age
Director Since
Other Public Company Directorships
|
|
71
1997
MassMutual Financial Group
|
Qualification Highlights
·
Industry
·
Praxair End-Markets
·
Praxair Foreign Markets
·
Operations
·
International business
·
Financial Expert
·
Risk Management
·
Public company board
|
LARRY D. MCVAY
|
|||
Principal of Edgewater Energy, LLC
|
|||
Age
Director Since
Other Public Company Directorships
|
|
70
2008
Callon Petroleum
Company
Chicago Bridge and
Iron Company
|
Qualification Highlights
·
Praxair End-Markets
·
Praxair Foreign Markets
·
Operations
·
International business
·
Technology
·
Risk Management
·
Public company board
|
MARTIN H. RICHENHAGEN
|
|||
Chairman, President and Chief Executive Officer of AGCO Corporation
|
|||
Age
Director Since
Other Public Company Directorships
|
|
65
2015
AGCO Corporation
PPG Industries, Inc.
|
Qualification Highlights
·
Praxair Foreign Markets
·
Operations
·
International business
·
Risk Management
·
Public company board
|
WAYNE T. SMITH
|
|||
Chairman, President & Chief Executive Officer of Community Health Systems, Inc.
|
|||
Age
Director Since
Other Public Company Directorships
|
|
72
2001
Community Health
Systems, Inc.
|
Qualification Highlights
·
Praxair End-Markets
·
Operations
·
Risk Management
·
Public company board
|
ROBERT L. WOOD
|
|||
Former Chairman, President & Chief Executive Officer of Chemtura Corporation
|
|||
Age
Director Since
Other Public Company Directorships
|
|
63
2004
MRC Global Inc.
Univar Inc.
|
Qualification Highlights
·
Industry
·
Praxair End-Markets
·
Operations
·
Risk Management
·
Public company board
|
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
|
11,716,499
|
|
(1)
|
$
|
100.07
|
|
|
9,933,618
|
|
Equity compensation plans not approved by shareholders
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
11,716,499
|
|
|
$
|
100.07
|
|
|
9,933,618
|
|
(1)
|
This amount includes 264,357 restricted shares and 665,440 performance shares. Up to an additional 665,440 performance shares could be issued if performance goals are achieved at the maximum specified targets. See Note 15 to the consolidated financial statements.
|
Name and Address of Beneficial Owner
|
Number of Shares
Beneficially Owned(a)
|
Percent of Shares
Outstanding(b)
|
|||||
The Vanguard Group, 100 Vanguard Blvd., Malvern, PA 19355
|
|
21,606,823
|
|
|
7.5
|
%
|
|
Capital World Investors, 333 S. Hope Street, Los Angeles, CA 90071
|
|
20,061,192
|
|
|
6.9
|
%
|
|
BlackRock, Inc., 55 East 52nd Street, New York, NY 10055
|
|
17,780,636
|
|
|
6.2
|
%
|
|
(a)
|
Holdings as of December 31, 2017 as reported in SEC Schedules 13G filed by the Vanguard Group, Capital World Investors, and Blackrock, Inc. According to its Schedule 13G, Vanguard and certain of its affiliates had sole voting power as to 407,094 shares, shared voting power as to 69,828 shares, shared dispositive power as to 469,290 shares, and sole dispositive power as to 21,137,533 shares. According to its Schedule 13G, Capital World and certain of its affiliates had sole voting power as to 18,575,563 shares, and sole dispositive power as to all of the reported shares. According to its Schedule 13G, BlackRock and certain of its subsidiaries had sole voting power as to 15,389,271 shares, and sole dispositive power as to 17,780,636 shares.
|
(b)
|
Based on
287,162,287
total shares outstanding on February 15, 2018 excluding shares held for the account of Praxair.
|
Name
|
|
Position
|
|
Common
Stock
|
|
Stock
Units(1)
|
|
Total
|
|
Stock
Options(2)
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||
Stephen F. Angel
|
|
Chairman, President & Chief Executive Officer
|
|
435,401
|
|
|
67,018
|
|
|
502,419
|
|
|
1,529,558
|
|
|
Matthew J. White
|
|
Senior Vice President & Chief Financial Officer
|
|
18,058
|
|
|
605
|
|
|
18,663
|
|
|
235,288
|
|
|
Scott E. Telesz
|
|
Executive Vice President
|
|
28,719
|
|
|
20,965
|
|
|
49,684
|
|
|
245,209
|
|
|
Eduardo F. Menezes
|
|
Executive Vice President
|
|
60,846
|
|
|
843
|
|
|
61,689
|
|
|
246,085
|
|
|
Anne K. Roby
|
|
Senior Vice President
|
|
22,701
|
|
|
4,261
|
|
|
26,962
|
|
|
139,936
|
|
|
Oscar Bernardes
|
|
Director
|
|
7,960
|
|
|
1,380
|
|
|
9,340
|
|
|
—
|
|
|
Nance K. Dicciani
|
|
Director
|
|
15,447
|
|
|
13,134
|
|
|
28,581
|
|
|
—
|
|
|
Edward G. Galante
|
|
Director
|
|
10,362
|
|
|
18,437
|
|
|
28,799
|
|
|
4,600
|
|
|
Raymond W. LeBoeuf
|
|
Director
|
|
14,128
|
|
|
51,405
|
|
|
65,533
|
|
|
—
|
|
|
Larry D. McVay
|
|
Director
|
|
9,213
|
|
|
5,912
|
|
|
15,125
|
|
|
—
|
|
|
Martin H. Richenhagen
|
|
Director
|
|
2,145
|
|
|
1,380
|
|
|
3,525
|
|
|
—
|
|
|
Wayne T. Smith
|
|
Director
|
|
19,034
|
|
|
34,909
|
|
|
53,943
|
|
|
—
|
|
|
Robert L. Wood
|
|
Director
|
|
14,222
|
|
|
2,915
|
|
|
17,137
|
|
|
—
|
|
|
Total
|
|
|
|
658,236
|
|
|
223,164
|
|
|
881,400
|
|
|
2,400,676
|
|
|
Directors, Nominees and Executive Officers as a group
|
|
16 persons
|
|
674,041
|
|
|
223,359
|
|
|
897,400
|
|
|
2,547,336
|
|
|
(1)
|
Includes Deferred Stock Units and/or Restricted Stock Units held. Deferred Stock Units are stock price-based units into which deferred compensation has been invested pursuant to the deferred compensation plans for management and for non-employee directors. Restricted Stock Units are stock price-based units granted as long term incentive awards to management and as equity compensation to non-employee directors. Holders have no voting rights with respect to either Deferred Stock Units or Restricted Stock Units. The value of Deferred Stock Units and Restricted Stock Units varies with the price of Praxair’s common stock and, at the end of the deferral period or the restriction period, the units are payable in Praxair common stock on a one-for-one basis.
|
(2)
|
Represent shares that may be acquired upon exercise of options exercisable within 60 days of February 15, 2018.
|
|
Types of Fees
|
|||||||||||
|
Audit
|
Audit - Related
|
Tax
|
All Other
|
Total
|
Non-Audit Fees
% of Total Audit
Fees
|
||||||
2017
|
7,620,000
|
|
303,000
|
|
17,000
|
|
14,000
|
|
7,954,000
|
|
4.4
|
%
|
2016
|
6,206,000
|
|
28,000
|
|
94,000
|
|
39,000
|
|
6,367,000
|
|
2.6
|
%
|
(a)
|
The following documents are filed as part of this report:
|
(1)
|
The company’s
2017
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: February 28, 2018
|
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/ R
AYMOND
W. L
E
B
OEUF
|
Nance K. Dicciani
Director
|
|
Edward G. Galante
Director
|
|
Raymond W. LeBoeuf
Director
|
|
|
|
||
/s/ L
ARRY
D. M
C
V
AY
|
|
/s/
MARTIN H. RICHENHAGEN
|
|
/s/ W
AYNE
T. S
MITH
|
Larry D. McVay
Director
|
|
Martin H. Richenhagen
Director
|
|
Wayne T. Smith
Director
|
|
|
|
||
/s/ R
OBERT
L. W
OOD
|
|
|
|
|
Robert L. Wood
Director
|
|
|
|
|
Exhibit No.
|
|
Description
|
|
|
|
2.1
|
|
|
|
|
|
2.1a
|
|
|
|
|
|
3.01
|
|
|
|
|
|
3.02
|
|
|
|
|
|
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
|
|
|
|
|
|
4.02b
|
|
|
|
|
|
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
|
|
|
|
|
|
*10.01b
|
|
|
|
|
|
*10.01c
|
|
|
|
|
|
*10.01d
|
|
Exhibit No.
|
|
Description
|
|
|
|
*10.02
|
|
|
|
|
|
*10.02a
|
|
|
|
|
|
*10.02b
|
|
|
|
|
|
*10.02c
|
|
|
|
|
|
*10.02d
|
|
|
|
|
|
*10.03
|
|
|
|
|
|
*10.04
|
|
|
|
|
|
*10.04a
|
|
|
|
|
|
*10.04b
|
|
|
|
|
|
*10.04c
|
|
|
|
|
|
*10.05a
|
|
|
|
|
|
*10.05b
|
|
|
|
|
|
*10.05c
|
|
|
|
|
|
*10.05d
|
|
|
|
|
|
*10.05e
|
|
|
|
|
|
*10.05f
|
|
|
|
|
|
*10.05g
|
|
|
Exhibit No.
|
|
Description
|
|
|
|
*10.05h
|
|
|
|
|
|
*10.05i
|
|
|
|
|
|
*10.05j
|
|
|
|
|
|
*10.05k
|
|
|
|
|
|
*10.05l
|
|
|
|
|
|
*10.05m
|
|
|
|
|
|
*10.06
|
|
|
|
|
|
*10.07
|
|
|
|
|
|
*10.07a
|
|
|
|
|
|
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).
|
Exhibit No.
|
|
Description
|
|
|
|
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).
|
|
|
|
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
|
|
|
|
|
|
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
|
|
|
|
|
|
10.17a
|
|
|
|
|
|
*10.18
|
|
|
|
|
|
*10.19
|
|
|
|
|
|
*10.20
|
|
|
|
|
|
*10.21
|
|
Exhibit No.
|
|
Description
|
|
|
|
*10.22
|
|
|
|
|
|
*10.23
|
|
|
|
|
|
*10.24a
|
|
|
|
|
|
*10.24b
|
|
|
|
|
|
*10.24c
|
|
|
|
|
|
*10.25
|
|
|
|
|
|
*10.25a
|
|
|
|
|
|
*10.26
|
|
|
|
|
|
*10.26a
|
|
|
|
|
|
*10.27
|
|
|
|
|
|
*10.27a
|
|
|
|
|
|
*10.28a
|
|
|
|
|
|
*10.28b
|
|
|
|
|
|
*10.28c
|
|
|
|
|
|
*10.28d
|
|
|
|
|
|
10.29
|
|
|
Exhibit No.
|
|
Description
|
|
|
|
12.01
|
|
|
|
|
|
21.01
|
|
|
|
|
|
23.01
|
|
|
|
|
|
31.01
|
|
|
|
|
|
31.02
|
|
|
|
|
|
32.01
|
|
|
|
|
|
32.02
|
|
|
|
|
|
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
|
|
|
|
|
1.
|
Grant of Option
. The Company hereby grants to Participant, as of the Grant Date, a Nonqualified Stock Option to purchase all or any part of the aggregate of
[___]
Shares (the “Option Shares”) at the Option Price of
[$___]
per Share. This Award will be exercisable only as hereinafter provided.
|
2.
|
Expiration Date
. Except as otherwise provided herein, this Award shall expire on the tenth anniversary of the Grant Date and in no event may this Award be exercised on or after such date.
|
3.
|
Exercisability; Treatment upon Termination of Service
.
|
a.
|
Exercisability Generally
. Except as otherwise provided in either the Plan or this Section 3, this Award shall become exercisable as to [_____] of the Option Shares on each of the [_____] anniversaries of the Grant Date. Once this Award has become exercisable, it shall continue to be exercisable until the earlier of its expiration date or the termination of the Participant’s rights hereunder pursuant to either the Plan or this Award. In the event that the number of Option Shares is not evenly divisible by [_____], the remaining amount shall be added to the last vesting period. Notwithstanding the foregoing, this Award shall become immediately vested and exercisable as to all of the Option Shares upon the occurrence of the Participant’s death while the Participant remains actively employed by Praxair and shall become vested and exercisable in the event of a Change in Control in accordance with Section 3.b.v. below.
|
b.
|
Termination of Employment
. This Award is exercisable by the Participant only while the Participant is in active employment with Praxair and will be immediately forfeited upon the effective date of the Participant’s termination of employment with Praxair (an individual who is employed by a Subsidiary shall be deemed to have terminated
|
i.
|
Death
. In the event the Participant’s employment terminates by reason of his or her death, this Award shall continue to be exercisable by the Participant’s executor, administrator, or legal representative at any time prior to the earlier of the third anniversary of the Participant’s death or the Award’s expiration date and thereafter shall be forfeited.
|
ii.
|
Total and Permanent Disability
. In the event the Participant becomes Totally and Permanently Disabled while employed by Praxair, this Award shall continue to be exercisable at any time prior to its expiration date;
provided, however,
that following the determination of the Participant’s Total and Permanent Disability, this Award shall only become exercisable in accordance with Section 3.a. For purposes of this Award, the Participant shall be “Totally and Permanently Disabled” if the Participant is determined to be unable to engage in any substantial gainful activity because of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months.
|
iii.
|
Termination After Satisfying Age/Service Requirement
. In the case of the Participant’s termination of employment with Praxair for any reason other than for cause, and not due to the Participant’s death or Total and Permanent Disability, after: (A) attaining age 65; (B) attaining age 62 and completing at least 10 years of employment with Praxair; or (C) having accumulated 85 points, where each year of the Participant’s age and each year of employment with Praxair, count for one point (collectively, the “Age/Service Requirement”), this Award shall continue to be exercisable at any time prior to its expiration date;
provided, however,
that following the Participant’s satisfaction of the Age/Service Requirement, this Award shall only become exercisable in accordance with Section 3.a.; and
provided further,
that in the event of the Participant’s termination of employment with Praxair prior to the first anniversary of the Grant Date, regardless of satisfying the Age/Service Requirement, this Award shall never become vested and exercisable and shall be immediately forfeited upon the effective date of the Participant’s termination of employment with Praxair.
|
iv.
|
Termination by Action of Praxair Other than for Cause
. In the event of the Participant’s termination of employment by action of Praxair other than for cause prior to the Participant’s satisfaction of the Age/Service Requirement and not due to the Participant’s death or Total and Permanent Disability, this Award shall continue to be exercisable by the Participant at any time prior to the earlier of the third anniversary of the effective date of the Participant’s termination or the Award’s expiration date and thereafter shall be forfeited;
provided, however,
that following such termination of the Participant’s employment, this Award shall only become exercisable in accordance with Section 3.a.; and
provided further,
that in the event such termination of the Participant’s employment by Praxair occurs prior to the first anniversary of the Grant Date, this Award shall never become exercisable and shall be immediately forfeited upon the effective date of such termination of the Participant’s employment. For purposes of this Award only, the Participant’s termination by action of Praxair for cause, shall include, but not be limited to, the Participant’s termination by action of Praxair for violation of Praxair’s Standards of Business Integrity (or any superseding integrity policy) or poor performance.
|
v.
|
Termination following a Change in Control
. Notwithstanding any other provision of this Award to the contrary, in the event the Participant’s employment with Praxair or any successor thereto is terminated (a) by action of Praxair other than for Cause or (b) by the Participant with Good Reason, in each case, within two (2) years following the Change in Control, this Award shall become immediately vested and exercisable (y) if the effective date of such termination is prior to the first anniversary of the Grant Date, as to one-third of the Option Shares (rounded down in the event not evenly divisible by three), and the remaining Option Shares shall be immediately forfeited at such time, or (z) if the effective date of such termination is on or after the first anniversary of the Grant Date, as to all of the unvested Option Shares, and in either case, such vested Option Shares shall continue to be exercisable by the Participant at any time prior to the earlier of the first anniversary of the effective date of the Participant’s termination or the Award’s expiration date and thereafter shall be forfeited.
|
(A)
|
For purposes of this Section 3.b.v., “Cause” shall have the meaning set forth in the Participant’s employment agreement or severance compensation agreement, in either case, as in effect immediately before the Change in Control, provided, however, that in the absence of any such agreement or in the event that such agreement does not contain a definition of “Cause,” Cause shall include, but not be limited to, violation of Praxair’s Standards of Business Integrity (or any superseding integrity policy) or poor performance.
|
(B)
|
For purposes of this Section 3.b.v., “Good Reason” shall have the meaning set forth in the Participant’s employment agreement or severance compensation agreement, in either case, as in effect immediately before the Change in Control, provided, however, that in the absence of such any such agreement or in the event that such agreement does not contain a definition of “Good Reason,” Good Reason shall mean, without the Participant’s express written consent, (a) a reduction in the annual rate of base salary as in effect immediately prior to the date of the Change in Control or as the same may be increased from time to time thereafter, unless such reduction is part of a policy, program or arrangement that is applicable on a nondiscriminatory basis to the Participant and other similarly situated executives employed by Praxair or its successors or (b) the assignment of any duties or responsibilities or diminution of duties or responsibilities which in the Participant’s reasonable judgment are inconsistent with the Participant’s status or position with Praxair in effect immediately prior to the Change in Control, provided, however, that Good Reason shall not exist unless the Participant provides Praxair with a notice of termination not later than 60 days after the occurrence of the event giving rise to Good Reason and Praxair fails to remedy such condition to the Participant’s reasonable satisfaction within 30 days of such notice.
|
4.
|
Transferability
.
|
a.
|
This Award is not transferable other than:
|
i.
|
in the event of the Participant’s death, in which case this Award shall be transferred to the Participant’s executor, administrator, or legal representative, or
|
ii.
|
if the Participant has met the Company’s stock ownership guidelines applicable to him/her at the time of such proposed transfer, by the Participant, as a gift and without consideration, in whole or in parts to;
|
(A)
|
the Participant’s spouse, children (including by adoption), stepchildren or grandchildren (“immediate family members”),
|
(B)
|
a partnership in which such immediate family members are the only partners, or
|
(C)
|
a trust for the exclusive benefit of such immediate family members; or
|
iii.
|
in the case of a transferee’s or distributee’s death, to his/her estate, in which case this Award may be exercised only by the executor or administrator of such estate and shall not be subject to further transfer; or
|
iv.
|
pursuant to a domestic relations order.
|
b.
|
Any transfer of this Award, in whole or in part, is subject to acceptance by the Company in its sole discretion and shall be affected according to such procedures as the Company’s Chief Human Resources Officer may establish.
|
c.
|
The provisions of this Award, relating to the Participant, shall apply to this Award notwithstanding any transfer to a third party.
|
5.
|
Exercise of Option.
|
a.
|
Notice of Exercise
. This Award may be exercised by the delivery of a notice of exercise to the Company or an agent designated by the Company in a form specified or accepted by the Committee, or by complying with any alternative procedures which may be authorized by the Committee, setting forth the number of Option Shares with respect to which the Award is to be exercised, accompanied by full payment for the Option Shares. The Award may be exercised only in a whole number of Shares.
|
b.
|
Exercise Price Payment
. A condition of the issuance of the Shares as to which this Award is exercised shall be the payment of the Option Price. The Option Price shall be payable to the Company in full either: (i) in cash or its equivalent; (ii) by tendering (either by actual delivery or attestation) previously acquired Shares having an aggregate Market Price at the time of exercise equal to the Option Price (provided that the Shares that are tendered may be subject to a minimum holding period, as determined by the Committee in its discretion, prior to their tender to satisfy the Option Price if acquired under this Plan or any other compensation plan maintained by the Company or have been purchased on the open market); (iii) by having the Company withhold Shares that otherwise would be delivered to the exerciser pursuant to the exercise of the Option having a value equaling the aggregate Option Price due; (iv) by a combination of (i), (ii), and/or (iii) ; or (v) any other method approved or accepted by the Committee in its sole discretion. Unless otherwise determined by the Committee, all payments under all of the methods indicated above shall be paid in United States dollars.
|
c.
|
Taxes
. To enable Praxair to meet any applicable federal, state, city, local or foreign withholding tax requirements arising as a result of the exercise of the Award, the exerciser shall pay Praxair the amount of tax to be withheld, if any, in cash or by having Praxair withhold Shares that would otherwise be delivered pursuant to the exercise of the Award, provided that, if Shares are so withheld, they shall be withheld only up to the minimum required tax withholding rates or such other rate that will not trigger a negative accounting impact on Praxair. The value of any Shares so withheld shall be the Share price at the time of exercise. Praxair reserves the right to (i) disapprove an exerciser’s election to utilize any of the alternatives under this Section, and (ii) to delay the completion of any exercise of this Award until the applicable withholding tax has been paid.
|
d.
|
Delivery of Shares
. Upon the exercise of an Award with respect to a part or all of the Option Shares in the manner and within the time herein provided, the Company shall issue and deliver to the exerciser, the number of Shares with respect to which the Award was
|
6.
|
Other Terms and Conditions
. It is understood and agreed that the Award evidenced hereby is subject to the following terms and conditions:
|
a.
|
No Right to Continued Employment
. This Award shall not confer upon the Participant any right with respect to continuance of employment by Praxair nor shall this Award interfere with the right of Praxair to terminate the Participant’s employment.
|
b.
|
No Right to Future Awards
. The selection of recipients of Awards under the Plan is determined annually on the basis of several factors, including job responsibilities and anticipated future job performance. The Participant’s selection to receive this Award shall in no way entitle him/her to receive, or otherwise obligate the Company to provide the Participant, any future option Award or other award under the Plan or otherwise.
|
c.
|
Cancellation of Award
. Notwithstanding any other provision of this Award, the Committee may, in its sole discretion, cancel, rescind, suspend, withhold, or otherwise limit or restrict this Award, and/or recover any gains realized by the Participant in connection with this Award, in the event of any actions by the Participant are determined by the Committee to (a) constitute a conflict of interest with Praxair, (b) be prejudicial to Praxair’s interests, or (c) violate any non-compete agreement or obligation of the Participant to Praxair, any confidentiality agreement or obligation of the Participant to Praxair, Praxair’s applicable policies, or the Participant’s terms and conditions of employment.
|
d.
|
Clawback
. This Award shall be subject to the clawback or recapture policy, if any, that Praxair may adopt from time to time to the extent provided in such policy and, in accordance with such policy, may be subject to the requirement that this Award be repaid to Praxair after it has been distributed or paid to the Participant.
|
e.
|
Governing Law
. This Award shall be governed by and construed in accordance with the laws of Connecticut, without giving effect to principles of conflict of laws.
|
f.
|
No Third Party Beneficiaries
. Except as expressly provided in the Plan or herein, neither the Plan nor this Award will confer on any person other than Praxair and the Participant any rights or remedies under the Plan or hereunder.
|
|
1.
|
Award of Restricted Stock Units.
The Participant is hereby granted an award of [_____] notional RSUs (the “Award”). Each RSU represents a bookkeeping entry which is equal in value to a single Share.
|
2.
|
Vesting of Award; Treatment upon Termination of Service or Change in Control.
|
a.
|
Vesting Generally
. Except as otherwise provided in this Section 2, this Award shall vest on the [____] anniversary of the Grant Date, if the Participant has remained continuously employed by Praxair at all times from the Grant Date through the [___] anniversary of the Grant Date (a Participant who is employed by a Subsidiary shall be deemed to have terminated employment by action of Praxair other than for cause for purposes of this Award at such time as the employing entity ceases to be a Subsidiary), and as soon as practicable thereafter, shall be settled by payment to the Participant of a number of Shares equal to the number of RSUs subject to this Award.
|
b.
|
Death or Disability
. Notwithstanding any provision of this Section 2 to the contrary, if after the Grant Date but prior to the [____] anniversary of the Grant date:
|
(i)
|
the Participant’s employment with Praxair terminates by reason of the Participant’s death; or
|
(ii)
|
the Participant becomes Totally and Permanently Disabled while employed by Praxair,
|
c.
|
Termination by Action of Praxair Other than for Cause, or Termination After Attaining Certain Age and Service Requirements
. Notwithstanding any provision of this Section 2 to the contrary, in the event the Participant’s employment with Praxair terminates on or after the first anniversary of the Grant Date, but prior to the [____] anniversary of the Grant Date, by reason of the Participant’s:
|
(i)
|
termination of employment by action of Praxair other than for cause and not due to the Participant’s Total and Permanent Disability; or
|
(ii)
|
termination of employment with Praxair other than for cause and not due to the Participant’s Death or Total and Permanent Disability, after: (a) attaining age 65; (b) attaining age 62 and completing at least ten (10) years of employment with Praxair; or (c) having accumulated 85 points, where each year of the Participant’s age and each year of employment with Praxair count for one point,
|
d.
|
Change in Control
. Notwithstanding any provision of this Section 2 to the contrary, in the event the Participant’s employment with Praxair or any successor thereto is terminated (a) by action of Praxair other than for Cause or (b) by the Participant with Good Reason, in each case, within two (2) years following the Change in Control but prior to the [____] anniversary of the Grant Date, this Award shall become immediately vested (y) if the effective date of such termination is prior to the first anniversary of the Grant Date, as to [____] of the RSUs subject to this Award (rounded down in the event of fractional Shares), and the remaining RSUs shall be immediately forfeited, or (z) if the effective date of such termination is on or after the first anniversary of the Grant Date, as to all of the RSUs subject to this Award, and as soon as practicable thereafter, shall be settled by payment to the Participant of a number of Shares (or such other form of payment having an equivalent value as may be authorized by the Committee in its sole discretion) equal to the number of RSUs vesting under this Award.
|
(i)
|
For purposes of this Section 2.d., “Cause” shall have the meaning set forth in the Participant’s employment agreement or severance compensation agreement, in either case, as in effect immediately before the Change in Control, provided, however, that in the absence of any such agreement or in the event that such agreement does not contain a definition of “Cause,” Cause shall include, but not be limited to, violation of Praxair’s Standards of Business Integrity (or any superseding integrity policy) or poor performance.
|
(ii)
|
For purposes of this Section 2.d., “Good Reason” shall have the meaning set forth in the Participant’s employment agreement or severance compensation agreement, in either case, as in effect immediately before the Change in Control, provided, however, that in the absence of such any such agreement or in the event that such agreement does not contain a definition of “Good Reason,” Good Reason shall mean, without the Participant’s express written consent, (a) a reduction in the annual rate of base salary as in effect immediately prior to the date of the Change in
|
e.
|
Forfeiture of Award
. In the event the Participant’s employment with Praxair terminates for any reason other than those specifically set forth in Sections 2.b., c. or d. prior to the [____] anniversary of the Grant Date, this Award shall be immediately forfeited. In the event this Award is forfeited for any reason, no payment shall be made in settlement of the Award.
|
3.
|
Other Terms and Conditions.
It is understood and agreed that the Award of RSUs evidenced hereby is subject to the following terms and conditions:
|
a.
|
Rights of Participant
. Except as provided in Section 3.d., the Participant shall have no right to transfer, pledge, hypothecate or otherwise encumber the Award. Prior to the payment of Shares in satisfaction of this Award, the Participant shall have none of the rights of a stockholder of the Company with respect to the Award, including, but not limited to, voting rights and the right to receive or accrue dividends or dividend equivalents. Notwithstanding any provision of the Plan or this Award to the contrary, Shares delivered in satisfaction of this Award shall be subject to applicable Praxair policies as from time to time in effect, including but not limited to, Praxair’s insider trading and Executive Stock Ownership policies.
|
b.
|
No Right to Continued Employment
. This Award shall not confer upon the Participant any right with respect to continuance of employment by Praxair nor shall this Award interfere with the right of Praxair to terminate the Participant’s employment.
|
c.
|
No Right to Future Awards
. The selection of recipients of RSUs and other Awards under the Plan is determined annually on the basis of several factors, including job responsibilities and anticipated future job performance. The Participant’s selection to receive this Award shall in no way entitle him/her to receive, or otherwise obligate Praxair to provide the Participant, any future RSUs or other awards under the Plan or otherwise.
|
d.
|
Transferability
. This Award is not transferable other than:
|
(i)
|
in the event of the Participant’s death, in which case this Award shall be transferred to the Participant’s executor, administrator, or legal representative; or
|
(ii)
|
pursuant to a domestic relations order.
|
e.
|
Cancellation of Award
. Notwithstanding any other provision of this Award, the Committee may, in its sole discretion, cancel, rescind, suspend, withhold, or otherwise limit or restrict this Award, and/or recover any gains realized by the Participant in connection with this Award, in the event any actions by the Participant are determined by the Committee to (i) constitute a conflict of interest with Praxair, (ii) be prejudicial to Praxair’s interests, or (iii) violate any non-compete agreement or obligation of the Participant to Praxair, any confidentiality agreement or obligation of the Participant to Praxair, Praxair’s applicable policies, or the Participant’s terms and conditions of employment.
|
f.
|
Clawback
. This Award shall be subject to the clawback or recapture policy, if any, that Praxair may adopt from time to time to the extent provided in such policy and, in accordance with such policy, may be subject to the requirement that this Award be repaid to Praxair after it has been distributed or paid to the Participant.
|
4.
|
Tax Withholding.
Upon the date of payment of the Award, Praxair will deduct from the number of Shares (or other form of payment, if applicable) otherwise due the Participant, Shares (or other form of payment, if applicable) having a Fair Market Value (or fair market value in the event of payment other than in Shares) sufficient to discharge all applicable federal, state, city, local or foreign taxes of any kind required to be withheld with respect to such payment, provided that, if Shares are so withheld, they shall be withheld only up to the minimum required tax withholding rates or such other rate that will not trigger a negative accounting impact on Praxair. In the alternative, Praxair shall have the right to require the Participant to pay cash to satisfy any applicable withholding taxes as a condition to the payment of the Award. Notwithstanding the foregoing, to the extent any employment or other taxes are due in respect of the Award prior to the payment of the Award, Praxair shall have the right to require the value of such taxes to either be withheld by deducting Shares underlying the Award (as described above) or by requiring the Participant to pay cash to satisfy such applicable withholding.
|
5.
|
References.
References herein to rights and obligations of the Participant shall apply, where appropriate, to the Participant’s legal representative or estate without regard to whether specific reference to such legal representative or estate is contained in a particular provision of this Award.
|
6.
|
Governing Law.
This Award shall be governed by and construed in accordance with the laws of Connecticut, without giving effect to principles of conflict of laws.
|
7.
|
No Third Party Beneficiaries.
Except as expressly provided in the Plan or herein, neither the Plan nor this Award will confer on any person other than Praxair and the Participant any rights or remedies under the Plan or hereunder
|
|
|
|
|
|
|
|
|
|
|
||||||||||
RATIO OF EARNINGS TO FIXED CHARGES
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
Praxair, Inc. and Subsidiaries
|
|
|||||||||||||||
|
|
|
|
|
|
|
Exhibit 12.01
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Year Ended December 31,
|
||||||||||||||||||
(Dollar amounts in millions, except ratios)
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Pre-tax income from continuing operations before adjustment for
|
|
|
|
|
|
|
|
|
|
||||||||||
noncontrolling interests in consolidated subsidiaries or income or
|
|
|
|
|
|
|
|
|
|
||||||||||
loss from equity investees
|
$
|
2,287
|
|
|
$
|
2,048
|
|
|
$
|
2,160
|
|
|
$
|
2,395
|
|
|
$
|
2,447
|
|
Capitalized interest
|
(28
|
)
|
|
(34
|
)
|
|
(33
|
)
|
|
(38
|
)
|
|
(69
|
)
|
|||||
Depreciation of capitalized interest
|
17
|
|
|
19
|
|
|
22
|
|
|
27
|
|
|
20
|
|
|||||
Dividends from less than 50%-owned companies carried at equity
|
111
|
|
|
8
|
|
|
11
|
|
|
6
|
|
|
10
|
|
|||||
Adjusted pre-tax income from continuing operations before adjustment
|
|
|
|
|
|
|
|
|
|
||||||||||
for noncontrolling interests in consolidated subsidiaries or income
|
|
|
|
|
|
|
|
|
|
||||||||||
or loss from equity investees
|
$
|
2,387
|
|
|
$
|
2,041
|
|
|
$
|
2,160
|
|
|
$
|
2,390
|
|
|
$
|
2,408
|
|
Fixed charges
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest on long-term and short-term debt
|
$
|
161
|
|
|
$
|
190
|
|
|
$
|
161
|
|
|
$
|
213
|
|
|
$
|
178
|
|
Capitalized interest
|
28
|
|
|
34
|
|
|
33
|
|
|
38
|
|
|
69
|
|
|||||
Rental expenses representative of an interest factor
|
49
|
|
|
47
|
|
|
47
|
|
|
52
|
|
|
43
|
|
|||||
Total fixed charges
|
$
|
238
|
|
|
$
|
271
|
|
|
$
|
241
|
|
|
$
|
303
|
|
|
$
|
290
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
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
|
$
|
2,625
|
|
|
$
|
2,312
|
|
|
$
|
2,401
|
|
|
$
|
2,693
|
|
|
$
|
2,698
|
|
RATIO OF EARNINGS TO FIXED CHARGES
|
11.0
|
|
|
8.5
|
|
|
10.0
|
|
|
8.9
|
|
|
9.3
|
|
|
Place of Incorporation
|
10 Riverview Drive LLC
|
Delaware
|
Acetylene Oxygen Company
|
Texas
|
Almacenes Geneva S.A.
|
Panama
|
Antwerpse Chemische Bedrijven (LCB) N. V.
|
Belgium
|
Argon (Isotank) Limited
|
Scotland
|
Argyle Welding Supply Company, Inc.
|
New Mexico
|
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 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
|
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
|
Gases de Ensenada S.A.
|
Argentina
|
Gases Industriales, S.A.
|
Panama
|
Gases Tachira S.A.
|
Venezuela
|
GemGas S.r.l.
|
Italy
|
GNC Matco Compressco de Gus Natural Ltda.
|
Brazil
|
GNL Gemini Comercializacao e Logistica de Gas Ltda.
|
Brazil
|
Great Lakes Street, Inc.
|
Delaware
|
Helium Centre Pte. Ltd.
|
Singapore
|
Industria Paraguaya de Gases S.r l (Inpagas)
|
Paraguay
|
Industria Venezoelana de Gas INVEGAS, S.C.A.
|
Venezuela
|
Ipes Industria de Produtos e Equipamentos de Solda Ltda.
|
Brazil
|
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
|
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 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 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
|
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
|
Tongling Praxair Co., Ltd.
|
China
|
Topaz Consultora S.A.
|
Uruguay
|
Vision Energy Group LLC
|
Oklahoma
|
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
|
|
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.
|
February 28, 2018
|
|
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.
|
February 28, 2018
|
|
By: /s/ Matthew J. White
|
|
|
|
|
|
|
|
Matthew J. White
|
|
|
|
Senior Vice President and
|
|
|
|
Chief Financial Officer
|
|
|
|
(principal financial officer)
|
|
|
February 28, 2018
|
|
By: /s/ Stephen F. Angel
|
|
|
|
|
|
|
|
Stephen F. Angel
|
|
|
|
Chairman, President
|
|
|
|
Chief Executive Officer
|
|
|
|
(principal executive officer)
|
|
|
February 28, 2018
|
|
By: /s/ Matthew J. White
|
|
|
|
|
|
|
|
Matthew J. White
|
|
|
|
Senior Vice President and
|
|
|
|
Chief Financial Officer
|
|
|
|
(principal financial officer)
|
|