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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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1-11037
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06-1249050
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(Commission File Number)
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(IRS Employer Identification No.)
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10 Riverview Drive, DANBURY, CT
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06810-6268
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(Address of principal executive offices)
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(Zip Code)
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INDEX
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PART I - FINANCIAL INFORMATION
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Item 1.
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Consolidated Statements of Comprehensive Income - Praxair, Inc. and Subsidiaries Quarters Ended
March 31, 2018 and 2017 (Unaudited)
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Condensed Consolidated Balance Sheets - Praxair, Inc. and Subsidiaries
March 31, 2018 and December 31, 2017 (Unaudited)
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Condensed Consolidated Statements of Cash Flows - Praxair, Inc. and Subsidiaries
Three Months Ended March 31, 2018 and 2017 (Unaudited)
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Item 2.
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Item 3.
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Item 4.
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Item 1.
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Quarter Ended March 31,
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||||||
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2018
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|
2017
|
||||
SALES
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$
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2,999
|
|
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$
|
2,728
|
|
Cost of sales, exclusive of depreciation and amortization
|
1,677
|
|
|
1,549
|
|
||
Selling, general and administrative
|
310
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|
|
290
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|
||
Depreciation and amortization
|
311
|
|
|
287
|
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||
Research and development
|
24
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|
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23
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|
||
Transaction costs and other charges
|
19
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|
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6
|
|
||
Other income (expense) - net
|
(5
|
)
|
|
(6
|
)
|
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OPERATING PROFIT
|
653
|
|
|
567
|
|
||
Interest expense - net
|
46
|
|
|
41
|
|
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Net pension and OPEB cost (benefit), excluding service cost
|
2
|
|
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(15
|
)
|
||
INCOME BEFORE INCOME TAXES AND EQUITY INVESTMENTS
|
605
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|
|
541
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|
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Income taxes
|
148
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|
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149
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|
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INCOME BEFORE EQUITY INVESTMENTS
|
457
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|
|
392
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Income from equity investments
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15
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|
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12
|
|
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NET INCOME (INCLUDING NONCONTROLLING INTERESTS)
|
472
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|
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404
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Less: noncontrolling interests
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(10
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)
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(15
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)
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NET INCOME - PRAXAIR, INC.
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$
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462
|
|
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$
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389
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PER SHARE DATA - PRAXAIR, INC. SHAREHOLDERS
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Basic earnings per share
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$
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1.61
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$
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1.36
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Diluted earnings per share
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$
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1.59
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$
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1.35
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Cash dividends per share
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$
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0.825
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$
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0.7875
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WEIGHTED AVERAGE SHARES OUTSTANDING (000’s):
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Basic shares outstanding
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287,504
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285,509
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Diluted shares outstanding
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290,809
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287,384
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Quarter Ended March 31,
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||||||
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2018
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|
2017
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NET INCOME (INCLUDING NONCONTROLLING INTERESTS)
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$
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472
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$
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404
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|
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OTHER COMPREHENSIVE INCOME (LOSS)
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|
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Translation adjustments:
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Foreign currency translation adjustments
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106
|
|
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317
|
|
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Income taxes
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9
|
|
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3
|
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Translation adjustments
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115
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320
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|
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Funded status - retirement obligations (Note 11):
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Retirement program remeasurements
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1
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(3
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)
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Reclassifications to net income
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17
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4
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Income taxes
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(4
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)
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(1
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)
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Funded status - retirement obligations
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14
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—
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Derivative instruments (Note 6):
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Current quarter unrealized gain (loss)
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—
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(1
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)
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Reclassifications to net income
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—
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—
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Income taxes
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—
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1
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Derivative instruments
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—
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—
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TOTAL OTHER COMPREHENSIVE INCOME (LOSS)
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129
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320
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COMPREHENSIVE INCOME (LOSS) (INCLUDING NONCONTROLLING INTERESTS)
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601
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724
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Less: noncontrolling interests
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(21
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)
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(20
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)
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COMPREHENSIVE INCOME (LOSS) - PRAXAIR, INC.
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$
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580
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$
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704
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March 31, 2018
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December 31, 2017
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ASSETS
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Cash and cash equivalents
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$
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545
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$
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617
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Accounts receivable - net
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1,900
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1,804
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Inventories
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619
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614
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Prepaid and other current assets
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265
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250
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TOTAL CURRENT ASSETS
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3,329
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3,285
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Property, plant and equipment (less accumulated depreciation of $14,103 in 2018 and $13,819 in 2017)
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12,113
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12,057
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Goodwill
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3,274
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3,233
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Other intangible assets - net
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547
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553
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Other long-term assets
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1,329
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|
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1,308
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TOTAL ASSETS
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$
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20,592
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$
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20,436
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LIABILITIES AND EQUITY
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Accounts payable
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$
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988
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$
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972
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Short-term debt
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527
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238
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Current portion of long-term debt
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979
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979
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Other current liabilities
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1,040
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1,118
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TOTAL CURRENT LIABILITIES
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3,534
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3,307
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Long-term debt
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7,336
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7,783
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Other long-term liabilities
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2,825
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2,824
|
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TOTAL LIABILITIES
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13,695
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13,914
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|
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Commitments and contingencies (Note 12)
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Redeemable noncontrolling interests (Note 14)
|
13
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11
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Praxair, Inc. Shareholders’ Equity:
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Common stock $0.01 par value, authorized - 800,000,000 shares, issued 2018 and 2017 - 383,230,625 shares
|
4
|
|
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4
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Additional paid-in capital
|
4,049
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4,084
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Retained earnings
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13,447
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13,224
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Accumulated other comprehensive income (loss) (Note 14)
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(3,980
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)
|
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(4,098
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)
|
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Less: Treasury stock, at cost (2018 - 95,861,142 shares and 2017 - 96,453,634 shares)
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(7,152
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)
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(7,196
|
)
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Total Praxair, Inc. Shareholders’ Equity
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6,368
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|
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6,018
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Noncontrolling interests
|
516
|
|
|
493
|
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TOTAL EQUITY
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6,884
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|
|
6,511
|
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TOTAL LIABILITIES AND EQUITY
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$
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20,592
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|
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$
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20,436
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Three months ended March 31,
|
||||||
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2018
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|
2017
|
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OPERATIONS
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|
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|
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Net income - Praxair, Inc.
|
$
|
462
|
|
|
$
|
389
|
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Noncontrolling interests
|
10
|
|
|
15
|
|
||
Net income (including noncontrolling interests)
|
472
|
|
|
404
|
|
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Adjustments to reconcile net income to net cash provided by operating activities:
|
|
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|
||||
Transaction costs and other charges, net of payments
|
14
|
|
|
6
|
|
||
Depreciation and amortization
|
311
|
|
|
287
|
|
||
Deferred income taxes
|
11
|
|
|
22
|
|
||
Share-based compensation
|
4
|
|
|
12
|
|
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Working capital:
|
|
|
|
||||
Accounts receivable
|
(82
|
)
|
|
(49
|
)
|
||
Inventory
|
(2
|
)
|
|
(2
|
)
|
||
Prepaid and other current assets
|
(19
|
)
|
|
(13
|
)
|
||
Payables and accruals
|
(67
|
)
|
|
(42
|
)
|
||
Pension contributions
|
(4
|
)
|
|
(3
|
)
|
||
Long-term assets, liabilities and other
|
50
|
|
|
88
|
|
||
Net cash provided by operating activities
|
688
|
|
|
710
|
|
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INVESTING
|
|
|
|
||||
Capital expenditures
|
(325
|
)
|
|
(327
|
)
|
||
Acquisitions, net of cash acquired
|
—
|
|
|
(1
|
)
|
||
Divestitures and asset sales
|
7
|
|
|
4
|
|
||
Net cash used for investing activities
|
(318
|
)
|
|
(324
|
)
|
||
FINANCING
|
|
|
|
||||
Short-term debt borrowings (repayments) - net
|
288
|
|
|
(24
|
)
|
||
Long-term debt borrowings
|
—
|
|
|
7
|
|
||
Long-term debt repayments
|
(503
|
)
|
|
(156
|
)
|
||
Issuances of common stock
|
29
|
|
|
26
|
|
||
Purchases of common stock
|
—
|
|
|
(11
|
)
|
||
Cash dividends - Praxair, Inc. shareholders
|
(237
|
)
|
|
(225
|
)
|
||
Noncontrolling interest transactions and other
|
(6
|
)
|
|
(13
|
)
|
||
Net cash provided by (used for) financing activities
|
(429
|
)
|
|
(396
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(13
|
)
|
|
5
|
|
||
Change in cash and cash equivalents
|
(72
|
)
|
|
(5
|
)
|
||
Cash and cash equivalents, beginning-of-period
|
617
|
|
|
524
|
|
||
Cash and cash equivalents, end-of-period
|
$
|
545
|
|
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$
|
519
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|
•
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Revenue Recognition
– In May 2014, the FASB issued updated guidance on the reporting and disclosure of revenue. Effective January 1, 2018, Praxair has adopted this guidance using the modified retrospective transition method. No material differences in revenue recognition accounting were identified under the new guidance compared with the Company's historic revenue recognition accounting (see Note 15).
|
•
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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. The adoption of this guidance did not have a material impact on the financial statements.
|
•
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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. The adoption of this guidance did not have a material impact on the financial statements.
|
•
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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 was adopted in the first quarter 2018. Accordingly, non-service related components of net periodic pension and postretirement benefit costs were reclassified out of "Operating Profit" to "Net pension and OPEB cost (benefit), excluding service cost" using the practical expedient to use the amounts disclosed in the retirement benefits note for the prior comparative periods as the estimation basis for applying the retrospective presentation requirements (see Note 11).
|
•
|
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 process of implementing the new guidance and will provide updates on the expected impact to Praxair in future filings, as appropriate.
|
•
|
Credit Losses on Financial Instruments
–
In June 2016, the FASB issued an update on the measurement of credit losses. The guidance introduces a new accounting model for expected credit losses on financial instruments, including trade receivables, based on estimates of current expected credit losses. This guidance will be effective for Praxair beginning in the first quarter 2020, with early adoption permitted beginning in the first quarter 2019 and requires companies to apply the change in accounting on a prospective basis. We are currently evaluating the impact this update will have on our consolidated financial statements.
|
•
|
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. Praxair does not expect this guidance to have a material impact.
|
•
|
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)
|
March 31,
2018 |
|
December 31,
2017 |
||||
Inventories
|
|
|
|
||||
Raw materials and supplies
|
$
|
223
|
|
|
$
|
224
|
|
Work in process
|
54
|
|
|
57
|
|
||
Finished goods
|
342
|
|
|
333
|
|
||
Total inventories
|
$
|
619
|
|
|
$
|
614
|
|
(Millions of dollars)
|
March 31,
2018 |
|
December 31,
2017 |
||||
SHORT-TERM
|
|
|
|
||||
Commercial paper and U.S. bank borrowings
|
$
|
492
|
|
|
$
|
202
|
|
Other bank borrowings (primarily international)
|
35
|
|
|
36
|
|
||
Total short-term debt
|
527
|
|
|
238
|
|
||
LONG-TERM (a)
|
|
|
|
||||
U.S. borrowings (U.S. dollar denominated unless otherwise noted)
|
|
|
|
||||
1.20% Notes due 2018 (b)
|
—
|
|
|
498
|
|
||
1.25% Notes due 2018 (c)
|
474
|
|
|
475
|
|
||
4.50% Notes due 2019
|
599
|
|
|
599
|
|
||
1.90% Notes due 2019
|
500
|
|
|
500
|
|
||
1.50% Euro-denominated notes due 2020
|
737
|
|
|
717
|
|
||
2.25% Notes due 2020
|
299
|
|
|
299
|
|
||
4.05% Notes due 2021
|
498
|
|
|
498
|
|
||
3.00% Notes due 2021
|
497
|
|
|
497
|
|
||
2.45% Notes due 2022
|
598
|
|
|
598
|
|
||
2.20% Notes due 2022
|
498
|
|
|
498
|
|
||
2.70% Notes due 2023
|
498
|
|
|
498
|
|
||
1.20% Euro-denominated notes due 2024
|
675
|
|
|
658
|
|
||
2.65% Notes due 2025
|
397
|
|
|
397
|
|
||
1.625% Euro-denominated notes due 2025
|
610
|
|
|
594
|
|
||
3.20% Notes due 2026
|
725
|
|
|
725
|
|
||
3.55% Notes due 2042
|
662
|
|
|
662
|
|
||
Other
|
9
|
|
|
12
|
|
||
International bank borrowings
|
35
|
|
|
33
|
|
||
Obligations under capital leases
|
4
|
|
|
4
|
|
||
|
8,315
|
|
|
8,762
|
|
||
Less: current portion of long-term debt
|
(979
|
)
|
|
(979
|
)
|
||
Total long-term debt
|
7,336
|
|
|
7,783
|
|
||
Total debt
|
$
|
8,842
|
|
|
$
|
9,000
|
|
(a)
|
Amounts are net of unamortized discounts, premiums and/or debt issuance costs as applicable.
|
(b)
|
In March 2018, Praxair repaid
$500 million
of 1.20% notes that became due.
|
(c)
|
March 31, 2018
and
December 31, 2017
include a
$1 million
fair value decrease and a less than
$1 million
increase, respectively, related to hedge accounting. See Note 6 for additional information.
|
|
|
|
|
|
Fair Value
|
||||||||||||||||||
|
Notional Amounts
|
|
Assets
|
|
Liabilities
|
||||||||||||||||||
(Millions of dollars)
|
March 31,
2018 |
|
December 31,
2017 |
|
March 31,
2018 |
|
December 31,
2017 |
|
March 31,
2018 |
|
December 31,
2017 |
||||||||||||
Derivatives Not Designated as Hedging Instruments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Currency contracts:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance sheet items (a)
|
$
|
2,288
|
|
|
$
|
2,693
|
|
|
$
|
12
|
|
|
$
|
16
|
|
|
$
|
5
|
|
|
$
|
16
|
|
Derivatives Designated as Hedging Instruments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Currency contracts:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance sheet items (a)
|
$
|
—
|
|
|
$
|
38
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2
|
|
Forecasted purchases (a)
|
5
|
|
|
4
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||||
Interest rate contracts:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate swaps (a)
|
475
|
|
|
475
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||||
Total Hedges
|
$
|
480
|
|
|
$
|
517
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
2
|
|
Total Derivatives
|
$
|
2,768
|
|
|
$
|
3,210
|
|
|
$
|
12
|
|
|
$
|
17
|
|
|
$
|
6
|
|
|
$
|
18
|
|
(a)
|
Assets are recorded in prepaid and other current assets, and liabilities are recorded in other current liabilities.
|
|
Year
Terminated
|
|
Original
Gain /
(Loss)
|
|
Unrecognized Gain / (Loss) (a)
|
||||||||
(Millions of dollars)
|
March 31,
2018 |
|
December 31,
2017 |
||||||||||
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
|
)
|
|
(4
|
)
|
|||
$600 million 4.50% fixed-rate notes that mature in 2019 (b)
|
2009
|
|
16
|
|
|
3
|
|
|
3
|
|
|||
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 on the company’s consolidated statements of income and AOCI for current period gain (loss) recognition.
|
(b)
|
The notional amount of the treasury rate lock contracts are equal to the underlying debt instrument with the exception of the treasury rate lock contract entered into to hedge the
$600 million
4.50%
fixed-rate notes that mature in 2019. The notional amount of this contract was
$500 million
.
|
|
Amount of Pre-Tax Gain (Loss)
Recognized in Earnings *
|
|||||||
|
Quarter Ended March 31,
|
|
||||||
(Millions of dollars)
|
2018
|
|
2017
|
|
||||
Derivatives Not Designated as Hedging Instruments
|
|
|
|
|
||||
Currency contracts:
|
|
|
|
|
||||
Balance sheet items
|
|
|
|
|
||||
Debt-related
|
$
|
36
|
|
|
$
|
79
|
|
|
Other balance sheet items
|
2
|
|
|
1
|
|
|
||
Total
|
$
|
38
|
|
|
$
|
80
|
|
|
|
Quarter Ended
|
||||||||||||||
|
Amount of Gain (Loss)
Recognized in AOCI |
|
Amount of Gain (Loss)
Reclassified from AOCI to the Consolidated Statement of Income |
||||||||||||
(Millions of dollars)
|
March 31,
2018 |
|
March 31,
2017 |
|
March 31,
2018 |
|
March 31,
2017 |
||||||||
Currency contracts:
|
|
|
|
|
|
|
|
||||||||
Balance sheet items
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Net investment hedge
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Forecasted purchases
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Interest rate contracts:
|
|
|
|
|
|
|
|
||||||||
Treasury rate lock contracts
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total - pre tax
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Less: income taxes
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||
Total - Net of Taxes
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Fair Value Measurements Using
|
||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||||
(Millions of dollars)
|
March 31,
2018 |
|
December 31,
2017 |
|
March 31,
2018 |
|
December 31,
2017 |
|
March 31,
2018 |
|
December 31,
2017 |
||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivatives
|
—
|
|
|
—
|
|
|
$
|
12
|
|
|
$
|
17
|
|
|
—
|
|
|
—
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivatives
|
—
|
|
|
—
|
|
|
$
|
6
|
|
|
$
|
18
|
|
|
—
|
|
|
—
|
|
|
Quarter Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Numerator (Millions of dollars)
|
|
|
|
||||
Net income - Praxair, Inc.
|
$
|
462
|
|
|
$
|
389
|
|
Denominator (Thousands of shares)
|
|
|
|
||||
Weighted average shares outstanding
|
287,175
|
|
|
285,140
|
|
||
Shares earned and issuable under compensation plans
|
329
|
|
|
369
|
|
||
Weighted average shares used in basic earnings per share
|
287,504
|
|
|
285,509
|
|
||
Effect of dilutive securities
|
|
|
|
||||
Stock options and awards
|
3,305
|
|
|
1,875
|
|
||
Weighted average shares used in diluted earnings per share
|
290,809
|
|
|
287,384
|
|
||
Basic Earnings Per Share
|
$
|
1.61
|
|
|
$
|
1.36
|
|
Diluted Earnings Per Share
|
$
|
1.59
|
|
|
$
|
1.35
|
|
(Millions of dollars)
|
North
America
|
|
South
America
|
|
Europe
|
|
Asia
|
|
Surface
Technologies
|
|
Total
|
||||||||||||
Balance, December 31, 2017
|
$
|
2,202
|
|
|
$
|
129
|
|
|
$
|
698
|
|
|
$
|
61
|
|
|
$
|
143
|
|
|
$
|
3,233
|
|
Acquisitions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Purchase adjustments & other
|
12
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
||||||
Foreign currency translation
|
3
|
|
|
(1
|
)
|
|
23
|
|
|
2
|
|
|
2
|
|
|
29
|
|
||||||
Balance, March 31, 2018
|
$
|
2,217
|
|
|
$
|
128
|
|
|
$
|
721
|
|
|
$
|
63
|
|
|
$
|
145
|
|
|
$
|
3,274
|
|
(Millions of dollars)
|
Customer &
License/Use
Agreements
|
|
Non-compete
Agreements
|
|
Patents &
Other
|
|
Total
|
||||||||
Cost:
|
|
|
|
|
|
|
|
||||||||
Balance, December 31, 2017
|
$
|
772
|
|
|
$
|
28
|
|
|
$
|
52
|
|
|
$
|
852
|
|
Additions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Foreign currency translation
|
8
|
|
|
—
|
|
|
—
|
|
|
8
|
|
||||
Other*
|
(19
|
)
|
|
(5
|
)
|
|
—
|
|
|
(24
|
)
|
||||
Balance, March 31, 2018
|
$
|
761
|
|
|
$
|
23
|
|
|
$
|
52
|
|
|
$
|
836
|
|
Less: Accumulated amortization
|
|
|
|
|
|
|
|
||||||||
Balance, December 31, 2017
|
$
|
(260
|
)
|
|
$
|
(18
|
)
|
|
$
|
(21
|
)
|
|
$
|
(299
|
)
|
Amortization expense
|
(9
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(11
|
)
|
||||
Foreign currency translation
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
||||
Other*
|
19
|
|
|
5
|
|
|
—
|
|
|
24
|
|
||||
Balance, March 31, 2018
|
$
|
(253
|
)
|
|
$
|
(14
|
)
|
|
$
|
(22
|
)
|
|
$
|
(289
|
)
|
Net balance at March 31, 2018
|
$
|
508
|
|
|
$
|
9
|
|
|
$
|
30
|
|
|
$
|
547
|
|
|
Three months ended March 31,
|
||||
|
2018
|
|
2017
|
||
Dividend yield
|
2.1
|
%
|
|
2.7
|
%
|
Volatility
|
14.4
|
%
|
|
14.0
|
%
|
Risk-free interest rate
|
2.67
|
%
|
|
2.13
|
%
|
Expected term years
|
5
|
|
|
6
|
|
|
Number of
Options (000’s)
|
|
Average
Exercise Price
|
|
Average
Remaining
Life
|
|
Aggregate
Intrinsic
Value
|
|||||
Outstanding at January 1, 2018
|
10,787
|
|
|
$
|
108.70
|
|
|
|
|
|
||
Granted
|
1,625
|
|
|
154.00
|
|
|
|
|
|
|||
Exercised
|
(901
|
)
|
|
90.70
|
|
|
|
|
|
|||
Cancelled or Expired
|
(16
|
)
|
|
115.09
|
|
|
|
|
|
|||
Outstanding at March 31, 2018
|
11,495
|
|
|
116.50
|
|
|
6.7
|
|
$
|
335
|
|
|
Exercisable at March 31, 2018
|
7,755
|
|
|
$
|
109.67
|
|
|
5.5
|
|
$
|
269
|
|
|
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, 2018
|
665
|
|
|
$
|
113.40
|
|
|
264
|
|
|
$
|
107.56
|
|
Granted
|
—
|
|
|
—
|
|
|
269
|
|
|
144.79
|
|
||
Vested
|
(78
|
)
|
|
120.04
|
|
|
(65
|
)
|
|
119.87
|
|
||
Cancelled and Forfeited
|
(147
|
)
|
|
111.63
|
|
|
(1
|
)
|
|
116.19
|
|
||
Non-vested at March 31, 2018
|
440
|
|
|
$
|
110.02
|
|
|
467
|
|
|
$
|
127.32
|
|
|
Quarter Ended March 31,
|
||||||||||||||
|
Pensions
|
|
OPEB
|
||||||||||||
(Millions of dollars)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Amount recognized in Operating Profit
|
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
12
|
|
|
$
|
11
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Amount recognized in Net pension and OPEB cost (benefit), excluding service cost
|
|
|
|
|
|
|
|
||||||||
Interest cost
|
26
|
|
|
26
|
|
|
1
|
|
|
1
|
|
||||
Expected return on plan assets
|
(42
|
)
|
|
(40
|
)
|
|
—
|
|
|
—
|
|
||||
Net amortization and deferral
|
18
|
|
|
17
|
|
|
(1
|
)
|
|
(1
|
)
|
||||
Curtailment gain (a)
|
—
|
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
||||
|
$
|
2
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
(18
|
)
|
Net periodic benefit cost (benefit)
|
$
|
14
|
|
|
$
|
14
|
|
|
$
|
—
|
|
|
$
|
(17
|
)
|
•
|
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
March 31, 2018
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
$240 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$662 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$511 million
) due to a calculation error made by CADE. The amount of the fine is subject to indexation using SELIC. On September 2, 2010, Praxair issued a press release and filed a report on Form 8-K rejecting all claims and stating that the fine represents a gross and arbitrary disregard of Brazilian law.
|
|
Quarter Ended March 31,
|
||||||
(Millions of dollars)
|
2018
|
|
2017
|
||||
SALES
(a)
|
|
|
|
||||
North America
|
$
|
1,563
|
|
|
$
|
1,458
|
|
Europe
|
428
|
|
|
356
|
|
||
South America
|
365
|
|
|
369
|
|
||
Asia
|
476
|
|
|
395
|
|
||
Surface Technologies
|
167
|
|
|
150
|
|
||
Total sales
|
$
|
2,999
|
|
|
$
|
2,728
|
|
|
Quarter Ended March 31,
|
||||||
(Millions of dollars)
|
2018
|
|
2017
|
||||
OPERATING PROFIT
|
|
|
|
||||
North America
|
$
|
406
|
|
|
$
|
357
|
|
Europe
|
80
|
|
|
67
|
|
||
South America
|
54
|
|
|
48
|
|
||
Asia
|
104
|
|
|
75
|
|
||
Surface Technologies
|
28
|
|
|
26
|
|
||
Segment operating profit
|
672
|
|
|
573
|
|
||
Transaction costs and other charges (Note 2)
|
(19
|
)
|
|
(6
|
)
|
||
Total operating profit
|
$
|
653
|
|
|
$
|
567
|
|
(a)
|
Sales reflect external sales only. Intersegment sales, primarily from North America to other segments, were not material.
|
|
Quarter Ended March 31,
|
||||||||||||||||||||||
(Millions of dollars)
|
2018
|
|
2017
|
||||||||||||||||||||
Activity
|
Praxair, Inc.
Shareholders’
Equity
|
|
Noncontrolling
Interests
|
|
Total
Equity
|
|
Praxair, Inc.
Shareholders’
Equity
|
|
Noncontrolling
Interests
|
|
Total
Equity
|
||||||||||||
Balance, beginning of period
|
$
|
6,018
|
|
|
$
|
493
|
|
|
$
|
6,511
|
|
|
$
|
5,021
|
|
|
$
|
420
|
|
|
$
|
5,441
|
|
Net income (a)
|
462
|
|
|
9
|
|
|
471
|
|
|
389
|
|
|
15
|
|
|
404
|
|
||||||
Other comprehensive income (loss)
|
118
|
|
|
11
|
|
|
129
|
|
|
315
|
|
|
5
|
|
|
320
|
|
||||||
Noncontrolling interests:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Additions (reductions)
|
—
|
|
|
6
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Dividends and other capital changes
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
|
—
|
|
|
(4
|
)
|
|
(4
|
)
|
||||||
Redemption value adjustments
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Dividends to Praxair, Inc. common stock holders ($0.825 per share in 2018 and $0.7875 per share in 2017)
|
(237
|
)
|
|
—
|
|
|
(237
|
)
|
|
(225
|
)
|
|
—
|
|
|
(225
|
)
|
||||||
Issuances of common stock:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
For the dividend reinvestment and stock purchase plan
|
2
|
|
|
—
|
|
|
2
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||||
For employee savings and incentive plans
|
3
|
|
|
—
|
|
|
3
|
|
|
15
|
|
|
—
|
|
|
15
|
|
||||||
Purchases of common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Share-based compensation
|
4
|
|
|
—
|
|
|
4
|
|
|
12
|
|
|
—
|
|
|
12
|
|
||||||
Balance, end of period
|
$
|
6,368
|
|
|
$
|
516
|
|
|
$
|
6,884
|
|
|
$
|
5,529
|
|
|
$
|
436
|
|
|
$
|
5,965
|
|
(a)
|
Net income for noncontrolling interests excludes Net income related to redeemable noncontrolling interests of
$1 million
for three months ended March 31,2018 (net income was insignificant for the same time period in 2017) which is not part of total equity (see redeemable noncontrolling interests section below).
|
|
March 31,
|
|
December 31,
|
||||
(Millions of dollars)
|
2018
|
|
2017
|
||||
Cumulative translation adjustment - net of taxes:
|
|
|
|
||||
North America
|
$
|
(853
|
)
|
|
$
|
(885
|
)
|
South America
|
(2,011
|
)
|
|
(2,004
|
)
|
||
Europe
|
(384
|
)
|
|
(398
|
)
|
||
Asia
|
(95
|
)
|
|
(151
|
)
|
||
Surface Technologies
|
(8
|
)
|
|
(17
|
)
|
||
|
(3,351
|
)
|
|
(3,455
|
)
|
||
Derivatives - net of taxes
|
(1
|
)
|
|
(1
|
)
|
||
Pension / OPEB funded status obligation (net of $343 million and $347 million tax benefit in March 31, 2018 and December 31, 2017, respectively)
|
(628
|
)
|
|
(642
|
)
|
||
|
$
|
(3,980
|
)
|
|
$
|
(4,098
|
)
|
(Millions of dollars)
|
2018
|
|
2017
|
||||
Balance, January 1
|
$
|
11
|
|
|
$
|
11
|
|
Net income
|
1
|
|
|
—
|
|
||
Distributions to noncontrolling interest and other
|
(1
|
)
|
|
(1
|
)
|
||
Redemption value adjustments/accretion
|
2
|
|
|
—
|
|
||
Balance, March 31
|
$
|
13
|
|
|
$
|
10
|
|
(Dollars in Millions)
|
Industrial Gases
|
|
|
||||||||||||||||||
Sales
|
North America
|
Europe
|
South America
|
Asia
|
Surface Technologies
|
Total
|
%
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||
Merchant
|
$
|
573
|
|
$
|
148
|
|
$
|
143
|
|
$
|
147
|
|
$
|
—
|
|
$
|
1,011
|
|
34
|
%
|
|
On-Site
|
460
|
|
80
|
|
114
|
|
246
|
|
—
|
|
900
|
|
30
|
%
|
|||||||
Packaged Gas
|
493
|
|
181
|
|
98
|
|
54
|
|
—
|
|
826
|
|
27
|
%
|
|||||||
Other
|
37
|
|
19
|
|
10
|
|
29
|
|
167
|
|
262
|
|
9
|
%
|
|||||||
|
$
|
1,563
|
|
$
|
428
|
|
$
|
365
|
|
$
|
476
|
|
$
|
167
|
|
$
|
2,999
|
|
100
|
%
|
|
Quarter Ended March 31,
|
|
|||||||||
(Dollar amounts in millions, except per share data)
|
2018
|
|
2017 (c)
|
|
Variance
|
|
|||||
Reported Amounts
|
|
|
|
|
|
|
|||||
Sales
|
$
|
2,999
|
|
|
$
|
2,728
|
|
|
10
|
%
|
|
Cost of sales, exclusive of depreciation and amortization
|
$
|
1,677
|
|
|
$
|
1,549
|
|
|
8
|
%
|
|
Gross margin (a)
|
$
|
1,322
|
|
|
$
|
1,179
|
|
|
12
|
%
|
|
As a percent of sales
|
44.1
|
%
|
|
43.2
|
%
|
|
|
|
|||
Selling, general and administrative
|
$
|
310
|
|
|
$
|
290
|
|
|
7
|
%
|
|
As a percent of sales
|
10.3
|
%
|
|
10.6
|
%
|
|
|
|
|||
Depreciation and amortization
|
$
|
311
|
|
|
$
|
287
|
|
|
8
|
%
|
|
Transaction costs and other charges (b)
|
$
|
19
|
|
|
$
|
6
|
|
|
|
|
|
Other income (expense) - net
|
$
|
(5
|
)
|
|
$
|
(6
|
)
|
|
|
|
|
Operating profit
|
$
|
653
|
|
|
$
|
567
|
|
|
15
|
%
|
|
Operating margin
|
21.8
|
%
|
|
20.8
|
%
|
|
|
|
|||
Interest expense - net
|
$
|
46
|
|
|
$
|
41
|
|
|
12
|
%
|
|
Net pension and OPEB cost (benefit), excluding service cost
|
$
|
2
|
|
|
$
|
(15
|
)
|
|
|
|
|
Effective tax rate
|
24.5
|
%
|
|
27.5
|
%
|
|
|
|
|||
Income from equity investments
|
$
|
15
|
|
|
$
|
12
|
|
|
25
|
%
|
|
Noncontrolling interests
|
$
|
(10
|
)
|
|
$
|
(15
|
)
|
|
(33
|
)%
|
|
Net income - Praxair, Inc.
|
$
|
462
|
|
|
$
|
389
|
|
|
19
|
%
|
|
Diluted earnings per share
|
$
|
1.59
|
|
|
$
|
1.35
|
|
|
18
|
%
|
|
Diluted shares outstanding
|
290,809
|
|
|
287,384
|
|
|
1
|
%
|
|
||
Number of employees
|
26,550
|
|
|
26,420
|
|
|
|
|
|||
Adjusted Amounts (b)
|
|
|
|
|
|
|
|||||
Operating profit
|
$
|
672
|
|
|
$
|
573
|
|
|
17
|
%
|
|
Operating margin
|
22.4
|
%
|
|
21.0
|
%
|
|
|
|
|||
Effective tax rate
|
24.0
|
%
|
|
27.2
|
%
|
|
|
|
|||
Noncontrolling interests
|
$
|
(9
|
)
|
|
$
|
(15
|
)
|
|
(40
|
)%
|
|
Net income - Praxair, Inc.
|
$
|
480
|
|
|
$
|
395
|
|
|
22
|
%
|
|
Diluted earnings per share
|
$
|
1.65
|
|
|
$
|
1.37
|
|
|
20
|
%
|
|
Other Financial Data (b)
|
|
|
|
|
|
|
|||||
EBITDA
|
$
|
979
|
|
|
$
|
866
|
|
|
|
|
|
EBITDA Margin
|
32.6
|
%
|
|
31.7
|
%
|
|
|
|
|||
Adjusted EBITDA
|
$
|
998
|
|
|
$
|
872
|
|
|
|
|
|
Adjusted EBITDA Margin
|
33.3
|
%
|
|
32.0
|
%
|
|
|
|
(a)
|
Gross margin excludes depreciation and amortization expense.
|
(b)
|
Adjusted amounts and other financial data are non-GAAP performance measures. A reconciliation of reported amounts to adjusted amounts and other financial data can be found in the "Non-GAAP Financial Measures" section of this MD&A. See Note 2 to the condensed consolidated financial statements.
|
(c)
|
Prior period information has been reclassified to conform with current year presentation as a result of the adoption of new accounting guidance on the presentation of net periodic pension and postretirement benefit costs. See Note 1 to the condensed consolidation financial statements.
|
|
Quarter Ended March 31, 2018 vs. 2017
|
|
||||
|
% Change
|
|
||||
|
Sales
|
|
Operating Profit
|
|
||
Factors Contributing to Changes
|
|
|
|
|
||
Volume
|
5
|
%
|
|
10
|
%
|
|
Price/Mix
|
2
|
%
|
|
8
|
%
|
|
Cost pass-through
|
—
|
%
|
|
—
|
%
|
|
Currency
|
3
|
%
|
|
3
|
%
|
|
Acquisitions/divestitures
|
—
|
%
|
|
—
|
%
|
|
Other
|
—
|
%
|
|
(6
|
)%
|
|
Reported
|
10
|
%
|
|
15
|
%
|
|
Add: Transaction costs and other charges
|
—
|
%
|
|
2
|
%
|
|
Adjusted
|
10
|
%
|
|
17
|
%
|
|
|
Quarter Ended March 31,
|
|||||||
|
% of Sales
|
|
% Change*
|
|||||
|
2018
|
|
2017
|
|
||||
Sales by End Markets
|
|
|
|
|
|
|||
Manufacturing
|
23
|
%
|
|
23
|
%
|
|
6
|
%
|
Metals
|
17
|
%
|
|
17
|
%
|
|
9
|
%
|
Energy
|
11
|
%
|
|
12
|
%
|
|
1
|
%
|
Chemicals
|
11
|
%
|
|
10
|
%
|
|
14
|
%
|
Electronics
|
9
|
%
|
|
9
|
%
|
|
10
|
%
|
Healthcare
|
8
|
%
|
|
8
|
%
|
|
6
|
%
|
Food & Beverage
|
9
|
%
|
|
9
|
%
|
|
6
|
%
|
Aerospace
|
3
|
%
|
|
3
|
%
|
|
8
|
%
|
Other
|
9
|
%
|
|
9
|
%
|
|
—
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
Quarter Ended March 31,
|
|
||||
|
% of Sales
|
|
||||
|
2018
|
|
2017
|
|
||
Sales by Distribution Method
|
|
|
|
|
||
On-Site
|
30
|
%
|
|
30
|
%
|
|
Merchant
|
34
|
%
|
|
34
|
%
|
|
Packaged Gas
|
27
|
%
|
|
27
|
%
|
|
Other
|
9
|
%
|
|
9
|
%
|
|
|
100
|
%
|
|
100
|
%
|
|
|
Quarter Ended March 31,
|
|||||||||
(Dollar amounts in millions)
|
2018
|
|
2017*
|
|
Variance
|
|||||
SALES
|
|
|
|
|
|
|||||
North America
|
$
|
1,563
|
|
|
$
|
1,458
|
|
|
7
|
%
|
Europe
|
428
|
|
|
356
|
|
|
20
|
%
|
||
South America
|
365
|
|
|
369
|
|
|
(1
|
)%
|
||
Asia
|
476
|
|
|
395
|
|
|
21
|
%
|
||
Surface Technologies
|
167
|
|
|
150
|
|
|
11
|
%
|
||
|
$
|
2,999
|
|
|
$
|
2,728
|
|
|
10
|
%
|
OPERATING PROFIT
|
|
|
|
|
|
|||||
North America
|
$
|
406
|
|
|
$
|
357
|
|
|
14
|
%
|
Europe
|
80
|
|
|
67
|
|
|
19
|
%
|
||
South America
|
54
|
|
|
48
|
|
|
13
|
%
|
||
Asia
|
104
|
|
|
75
|
|
|
39
|
%
|
||
Surface Technologies
|
28
|
|
|
26
|
|
|
8
|
%
|
||
Segment operating profit
|
672
|
|
|
573
|
|
|
17
|
%
|
||
Transaction costs and other charges
|
(19
|
)
|
|
(6
|
)
|
|
|
|||
Total operating profit
|
$
|
653
|
|
|
$
|
567
|
|
|
15
|
%
|
|
Quarter Ended March 31,
|
|||||||||
|
2018
|
|
2017
|
|
Variance
|
|||||
Sales
|
$
|
1,563
|
|
|
$
|
1,458
|
|
|
7
|
%
|
Cost of sales, exclusive of depreciation and amortization
|
806
|
|
|
775
|
|
|
|
|||
Gross margin
|
757
|
|
|
683
|
|
|
|
|||
Operating expenses
|
189
|
|
|
172
|
|
|
|
|||
Depreciation and amortization
|
162
|
|
|
154
|
|
|
|
|||
Operating profit
|
$
|
406
|
|
|
$
|
357
|
|
|
14
|
%
|
Margin %
|
26.0
|
%
|
|
24.5
|
%
|
|
|
|
Quarter Ended March 31, 2018 vs. 2017
|
||||
|
% Change
|
||||
|
Sales
|
|
Operating Profit
|
||
Factors Contributing to Changes
|
|
|
|
||
Volume
|
4
|
%
|
|
11
|
%
|
Price/Mix
|
2
|
%
|
|
7
|
%
|
Cost pass-through
|
—
|
%
|
|
—
|
%
|
Currency
|
1
|
%
|
|
1
|
%
|
Acquisitions/divestitures
|
—
|
%
|
|
—
|
%
|
Other
|
—
|
%
|
|
(5
|
)%
|
|
7
|
%
|
|
14
|
%
|
|
Quarter Ended March 31,
|
|||||||
|
% of Sales
|
|
% Change*
|
|||||
|
2018
|
|
2017
|
|
||||
Sales by End Markets
|
|
|
|
|
|
|||
Manufacturing
|
30
|
%
|
|
29
|
%
|
|
6
|
%
|
Metals
|
12
|
%
|
|
12
|
%
|
|
8
|
%
|
Energy
|
17
|
%
|
|
18
|
%
|
|
(2
|
)%
|
Chemicals
|
10
|
%
|
|
9
|
%
|
|
22
|
%
|
Electronics
|
5
|
%
|
|
5
|
%
|
|
20
|
%
|
Healthcare
|
7
|
%
|
|
7
|
%
|
|
8
|
%
|
Food & Beverage
|
10
|
%
|
|
10
|
%
|
|
8
|
%
|
Aerospace
|
2
|
%
|
|
2
|
%
|
|
9
|
%
|
Other
|
7
|
%
|
|
8
|
%
|
|
(5
|
)%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
Quarter Ended March 31,
|
||||
|
% of Sales
|
||||
|
2018
|
|
2017
|
||
Sales by Distribution Method
|
|
|
|
||
On- Site
|
29
|
%
|
|
30
|
%
|
Merchant
|
37
|
%
|
|
37
|
%
|
Packaged Gas
|
32
|
%
|
|
30
|
%
|
Other
|
2
|
%
|
|
3
|
%
|
|
100
|
%
|
|
100
|
%
|
|
Quarter Ended March 31,
|
|||||||||
|
2018
|
|
2017
|
|
Variance %
|
|||||
Sales
|
$
|
428
|
|
|
$
|
356
|
|
|
20
|
%
|
Cost of sales, exclusive of depreciation and amortization
|
248
|
|
|
201
|
|
|
|
|||
Gross margin
|
180
|
|
|
155
|
|
|
|
|||
Operating expenses
|
54
|
|
|
48
|
|
|
|
|||
Depreciation and amortization
|
46
|
|
|
40
|
|
|
|
|||
Operating profit
|
$
|
80
|
|
|
$
|
67
|
|
|
19
|
%
|
Margin %
|
18.7
|
%
|
|
18.8
|
%
|
|
|
|
Quarter Ended March 31, 2018 vs. 2017
|
||||
|
% Change
|
|
% Change
|
||
|
Sales
|
|
Operating Profit
|
||
Factors Contributing to Changes
|
|
|
|
||
Volume
|
2
|
%
|
|
5
|
%
|
Price/Mix
|
1
|
%
|
|
7
|
%
|
Cost pass-through
|
2
|
%
|
|
—
|
%
|
Currency
|
15
|
%
|
|
16
|
%
|
Acquisitions/divestitures
|
—
|
%
|
|
—
|
%
|
Other
|
—
|
%
|
|
(9
|
)%
|
|
20
|
%
|
|
19
|
%
|
|
Quarter Ended March 31,
|
|||||||
|
% of Sales
|
|
% Change*
|
|||||
|
2018
|
|
2017
|
|
||||
Sales by End Markets
|
|
|
|
|
|
|||
Manufacturing
|
21
|
%
|
|
21
|
%
|
|
6
|
%
|
Metals
|
17
|
%
|
|
17
|
%
|
|
9
|
%
|
Energy
|
4
|
%
|
|
4
|
%
|
|
(6
|
)%
|
Chemicals
|
12
|
%
|
|
13
|
%
|
|
4
|
%
|
Electronics
|
8
|
%
|
|
7
|
%
|
|
9
|
%
|
Healthcare
|
12
|
%
|
|
12
|
%
|
|
6
|
%
|
Food & Beverage
|
13
|
%
|
|
13
|
%
|
|
8
|
%
|
Aerospace
|
1
|
%
|
|
1
|
%
|
|
—
|
|
Other
|
12
|
%
|
|
12
|
%
|
|
(1
|
)%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
Quarter Ended March 31,
|
||||
|
% of Sales
|
||||
|
2018
|
|
2017
|
||
Sales by Distribution Method
|
|
|
|
||
On- Site
|
19
|
%
|
|
19
|
%
|
Merchant
|
35
|
%
|
|
35
|
%
|
Packaged Gas
|
42
|
%
|
|
41
|
%
|
Other
|
4
|
%
|
|
5
|
%
|
|
100
|
%
|
|
100
|
%
|
|
Quarter Ended March 31,
|
|||||||||
|
2018
|
|
2017
|
|
Variance
|
|||||
Sales
|
$
|
365
|
|
|
$
|
369
|
|
|
(1
|
)%
|
Cost of sales, exclusive of depreciation and amortization
|
219
|
|
|
228
|
|
|
|
|||
Gross margin
|
146
|
|
|
141
|
|
|
|
|||
Operating expenses
|
51
|
|
|
54
|
|
|
|
|||
Depreciation and amortization
|
41
|
|
|
39
|
|
|
|
|||
Operating profit
|
$
|
54
|
|
|
$
|
48
|
|
|
13
|
%
|
Margin %
|
14.8
|
%
|
|
13.0
|
%
|
|
|
|
Quarter Ended March 31, 2018 vs. 2017
|
||||
|
% Change
|
|
% Change
|
||
|
Sales
|
|
Operating Profit
|
||
Factors Contributing to Changes
|
|
|
|
||
Volume
|
1
|
%
|
|
(2
|
)%
|
Price/Mix
|
1
|
%
|
|
10
|
%
|
Cost pass-through
|
—
|
%
|
|
—
|
%
|
Currency
|
(3
|
)%
|
|
(5
|
)%
|
Acquisitions/divestitures
|
—
|
%
|
|
—
|
%
|
Other
|
—
|
%
|
|
10
|
%
|
|
(1
|
)%
|
|
13
|
%
|
|
Quarter Ended March 31,
|
|
|||||||
|
% of Sales
|
|
% Change*
|
|
|||||
|
2018
|
|
2017
|
|
|||||
Sales by End Markets
|
|
|
|
|
|
|
|||
Manufacturing
|
17
|
%
|
|
18
|
%
|
|
(1
|
)%
|
|
Metals
|
31
|
%
|
|
29
|
%
|
|
4
|
%
|
|
Energy
|
2
|
%
|
|
2
|
%
|
|
(4
|
)%
|
|
Chemicals
|
9
|
%
|
|
10
|
%
|
|
—
|
%
|
|
Electronics
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
Healthcare
|
18
|
%
|
|
19
|
%
|
|
3
|
%
|
|
Food & Beverage
|
13
|
%
|
|
14
|
%
|
|
1
|
%
|
|
Aerospace
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
Other
|
10
|
%
|
|
8
|
%
|
|
11
|
%
|
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
Quarter Ended March 31,
|
||||
|
% of Sales
|
||||
|
2018
|
|
2017
|
||
Sales by Distribution Method
|
|
|
|
||
On- Site
|
31
|
%
|
|
31
|
%
|
Merchant
|
39
|
%
|
|
39
|
%
|
Packaged Gas
|
27
|
%
|
|
28
|
%
|
Other
|
3
|
%
|
|
2
|
%
|
|
100
|
%
|
|
100
|
%
|
|
Quarter Ended March 31,
|
|||||||||
|
2018
|
|
2017
|
|
Variance
|
|||||
Sales
|
$
|
476
|
|
|
$
|
395
|
|
|
21
|
%
|
Cost of sales, exclusive of depreciation and amortization
|
294
|
|
|
249
|
|
|
|
|||
Gross margin
|
182
|
|
|
146
|
|
|
|
|||
Operating expenses
|
26
|
|
|
27
|
|
|
|
|||
Depreciation and amortization
|
52
|
|
|
44
|
|
|
|
|||
Operating profit
|
$
|
104
|
|
|
$
|
75
|
|
|
39
|
%
|
Margin %
|
21.8
|
%
|
|
19.0
|
%
|
|
|
|
Quarter Ended March 31, 2018 vs. 2017
|
||||
|
% Change
|
|
% Change
|
||
|
Sales
|
|
Operating Profit
|
||
Factors Contributing to Changes
|
|
|
|
||
Volume
|
11
|
%
|
|
18
|
%
|
Price/Mix
|
3
|
%
|
|
14
|
%
|
Cost pass-through
|
—
|
%
|
|
—
|
%
|
Currency
|
7
|
%
|
|
7
|
%
|
Acquisitions/divestitures
|
—
|
%
|
|
—
|
%
|
Other
|
—
|
%
|
|
—
|
%
|
|
21
|
%
|
|
39
|
%
|
|
Quarter Ended March 31,
|
|||||||
|
% of Sales
|
|
% Change*
|
|||||
|
2018
|
|
2017
|
|
||||
Sales by End Markets
|
|
|
|
|
|
|||
Manufacturing
|
9
|
%
|
|
8
|
%
|
|
28
|
%
|
Metals
|
27
|
%
|
|
26
|
%
|
|
18
|
%
|
Energy
|
5
|
%
|
|
3
|
%
|
|
95
|
%
|
Chemicals
|
15
|
%
|
|
15
|
%
|
|
11
|
%
|
Electronics
|
33
|
%
|
|
35
|
%
|
|
6
|
%
|
Healthcare
|
1
|
%
|
|
1
|
%
|
|
(4
|
)%
|
Food & Beverage
|
2
|
%
|
|
2
|
%
|
|
(10
|
)%
|
Aerospace
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Other
|
8
|
%
|
|
10
|
%
|
|
5
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
Quarter Ended March 31,
|
||||
|
% of Sales
|
||||
|
2018
|
|
2017
|
||
Sales by Distribution Method
|
|
|
|
||
On- Site
|
52
|
%
|
|
51
|
%
|
Merchant
|
31
|
%
|
|
29
|
%
|
Packaged Gas
|
11
|
%
|
|
14
|
%
|
Other
|
6
|
%
|
|
6
|
%
|
|
100
|
%
|
|
100
|
%
|
|
Quarter Ended March 31,
|
|||||||||
|
2018
|
|
2017
|
|
Variance
|
|||||
Sales
|
$
|
167
|
|
|
$
|
150
|
|
|
11
|
%
|
Cost of sales, exclusive of depreciation and amortization
|
110
|
|
|
96
|
|
|
|
|||
Gross margin
|
57
|
|
|
54
|
|
|
|
|||
Operating expenses
|
19
|
|
|
18
|
|
|
|
|||
Depreciation and amortization
|
10
|
|
|
10
|
|
|
|
|||
Operating profit
|
$
|
28
|
|
|
$
|
26
|
|
|
8
|
%
|
Margin %
|
16.8
|
%
|
|
17.3
|
%
|
|
|
|
Quarter Ended March 31, 2018 vs. 2017
|
||||
|
% Change
|
|
% Change
|
||
|
Sales
|
|
Operating Profit
|
||
Factors Contributing to Changes
|
|
|
|
||
Volume/Price
|
6
|
%
|
|
12
|
%
|
Cost pass-through
|
—
|
%
|
|
—
|
%
|
Currency
|
5
|
%
|
|
4
|
%
|
Acquisitions/divestitures
|
—
|
%
|
|
—
|
%
|
Other
|
—
|
%
|
|
(8
|
)%
|
|
11
|
%
|
|
8
|
%
|
|
Quarter Ended March 31,
|
|||||||
|
% of Sales
|
|
% Change*
|
|||||
|
2018
|
|
2017
|
|
||||
Sales by End Markets
|
|
|
|
|
|
|||
Manufacturing
|
12
|
%
|
|
11
|
%
|
|
11
|
%
|
Metals
|
8
|
%
|
|
8
|
%
|
|
1
|
%
|
Energy
|
19
|
%
|
|
19
|
%
|
|
3
|
%
|
Chemicals
|
2
|
%
|
|
2
|
%
|
|
12
|
%
|
Electronics
|
1
|
%
|
|
1
|
%
|
|
—
|
%
|
Healthcare
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Food & Beverage
|
3
|
%
|
|
4
|
%
|
|
(9
|
)%
|
Aerospace
|
44
|
%
|
|
44
|
%
|
|
8
|
%
|
Other
|
11
|
%
|
|
11
|
%
|
|
5
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
Percentage of YTD 2018 Consolidated Sales
|
|
Exchange Rate for
Income Statement
|
|
Exchange Rate for
Balance Sheet
|
|||||||||
|
Year-To-Date Average
|
|
March 31,
|
|
December 31,
|
|||||||||
Currency
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|||||||
Euro
|
14
|
%
|
|
0.81
|
|
|
0.94
|
|
|
0.81
|
|
|
0.83
|
|
Brazilian real
|
10
|
%
|
|
3.25
|
|
|
3.14
|
|
|
3.32
|
|
|
3.31
|
|
Canadian dollar
|
7
|
%
|
|
1.26
|
|
|
1.32
|
|
|
1.29
|
|
|
1.26
|
|
Chinese yuan
|
7
|
%
|
|
6.36
|
|
|
6.89
|
|
|
6.28
|
|
|
6.51
|
|
Mexican peso
|
5
|
%
|
|
18.71
|
|
|
20.26
|
|
|
18.18
|
|
|
19.66
|
|
Korean won
|
4
|
%
|
|
1,072
|
|
|
1,153
|
|
|
1,064
|
|
|
1,067
|
|
India rupee
|
3
|
%
|
|
64.37
|
|
|
67.00
|
|
|
65.18
|
|
|
63.87
|
|
Argentine peso
|
1
|
%
|
|
19.68
|
|
|
15.66
|
|
|
20.15
|
|
|
18.65
|
|
British pound
|
1
|
%
|
|
0.72
|
|
|
0.81
|
|
|
0.71
|
|
|
0.74
|
|
Norwegian krone
|
1
|
%
|
|
7.84
|
|
|
8.43
|
|
|
7.84
|
|
|
8.20
|
|
(Millions of dollars)
|
Three months ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
NET CASH PROVIDED BY (USED FOR):
|
|
|
|
||||
OPERATING ACTIVITIES
|
|
|
|
||||
Net income (including noncontrolling interests)
|
$
|
472
|
|
|
$
|
404
|
|
Non-cash charges (credits):
|
|
|
|
||||
Add: Depreciation and amortization
|
311
|
|
|
287
|
|
||
Add: Deferred income taxes
|
11
|
|
|
22
|
|
||
Add: Share-based compensation
|
4
|
|
|
12
|
|
||
Add: Transaction costs and other charges, net of payments (a)
|
14
|
|
|
6
|
|
||
Net income adjusted for non-cash charges
|
812
|
|
|
731
|
|
||
Less: Working capital
|
(170
|
)
|
|
(106
|
)
|
||
Less: Pension contributions
|
(4
|
)
|
|
(3
|
)
|
||
Other
|
50
|
|
|
88
|
|
||
Net cash provided by operating activities
|
$
|
688
|
|
|
$
|
710
|
|
INVESTING ACTIVITIES
|
|
|
|
||||
Capital expenditures
|
(325
|
)
|
|
(327
|
)
|
||
Acquisitions, net of cash acquired
|
—
|
|
|
(1
|
)
|
||
Divestitures and asset sales
|
7
|
|
|
4
|
|
||
Net cash used for investing activities
|
$
|
(318
|
)
|
|
$
|
(324
|
)
|
FINANCING ACTIVITIES
|
|
|
|
||||
Debt increase (decrease) - net
|
(215
|
)
|
|
(173
|
)
|
||
Issuances (purchases) of common stock - net
|
29
|
|
|
15
|
|
||
Cash dividends - Praxair, Inc. shareholders
|
(237
|
)
|
|
(225
|
)
|
||
Noncontrolling interest transactions and other
|
(6
|
)
|
|
(13
|
)
|
||
Net cash provided by (used for) financing activities
|
$
|
(429
|
)
|
|
$
|
(396
|
)
|
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
$
|
(13
|
)
|
|
$
|
5
|
|
Cash and cash equivalents, end-of-period
|
$
|
545
|
|
|
$
|
519
|
|
|
Quarter Ended March 31,
|
||||||
(Dollar amounts in millions, except per share data)
|
2018
|
|
2017
|
||||
Adjusted Operating Profit
|
|
|
|
||||
Reported operating profit
|
$
|
653
|
|
|
$
|
567
|
|
Add: Transaction costs and other charges
|
19
|
|
|
6
|
|
||
Total adjustments
|
19
|
|
|
6
|
|
||
Adjusted operating profit
|
$
|
672
|
|
|
$
|
573
|
|
Reported percent change
|
15
|
%
|
|
|
|||
Adjusted percent change
|
17
|
%
|
|
|
|||
Adjusted Income Taxes and Effective Tax Rate
|
|
|
|
||||
Reported income taxes
|
$
|
148
|
|
|
$
|
149
|
|
Add: Transaction costs and other charges
|
2
|
|
|
—
|
|
||
Total adjustments
|
2
|
|
|
—
|
|
||
Adjusted income taxes
|
$
|
150
|
|
|
$
|
149
|
|
Adjusted Effective Tax Rate
|
|
|
|
||||
Reported income before income taxes and equity investments
|
$
|
605
|
|
|
$
|
541
|
|
Add: Transaction costs and other charges
|
19
|
|
|
6
|
|
||
Total adjustments
|
19
|
|
|
6
|
|
||
Adjusted income before income taxes and equity investments
|
$
|
624
|
|
|
$
|
547
|
|
Reported effective tax rate
|
24.5
|
%
|
|
27.5
|
%
|
||
Adjusted effective tax rate
|
24.0
|
%
|
|
27.2
|
%
|
||
Adjusted Noncontrolling Interests
|
|
|
|
||||
Reported noncontrolling interests
|
$
|
10
|
|
|
$
|
15
|
|
Add: Cost reduction program
|
(1
|
)
|
|
—
|
|
||
Total adjustments
|
(1
|
)
|
|
—
|
|
||
Adjusted Noncontrolling Interests
|
$
|
9
|
|
|
$
|
15
|
|
Adjusted Net Income - Praxair, Inc.
|
|
|
|
||||
Reported net income - Praxair, Inc.
|
$
|
462
|
|
|
$
|
389
|
|
Add: Transaction costs and other charges
|
17
|
|
|
6
|
|
||
Add: Cost reduction program
|
1
|
|
|
—
|
|
||
Total adjustments
|
18
|
|
|
6
|
|
||
Adjusted net income - Praxair, Inc.
|
$
|
480
|
|
|
$
|
395
|
|
Reported percent change
|
19
|
%
|
|
|
|||
Adjusted percent change
|
22
|
%
|
|
|
Adjusted Diluted Earnings Per Share
|
|
|
|
||||
Reported diluted EPS
|
$
|
1.59
|
|
|
$
|
1.35
|
|
Add: Transaction costs and other charges
|
0.06
|
|
|
0.02
|
|
||
Total adjustments
|
$
|
0.06
|
|
|
$
|
0.02
|
|
Adjusted diluted EPS
|
$
|
1.65
|
|
|
$
|
1.37
|
|
Reported percent change
|
18
|
%
|
|
|
|
||
Adjusted percent change
|
20
|
%
|
|
|
|
|
|
|
|
||||
|
Quarter Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
(Dollar amounts in millions)
|
|
|
|
||||
Reported net income - Praxair, Inc.
|
$
|
462
|
|
|
$
|
389
|
|
Add: noncontrolling interest
|
10
|
|
|
15
|
|
||
Add: interest expense - net
|
46
|
|
|
41
|
|
||
Add: net pension and OPEB cost (benefit), excluding service cost
|
2
|
|
|
(15
|
)
|
||
Add: income taxes
|
148
|
|
|
149
|
|
||
Add: depreciation and amortization
|
311
|
|
|
287
|
|
||
EBITDA
|
$
|
979
|
|
|
$
|
866
|
|
|
|
|
|
||||
Adjustments:
|
|
|
|
||||
Add: Transaction costs
|
$
|
19
|
|
|
$
|
6
|
|
ADJUSTED EBITDA
|
$
|
998
|
|
|
$
|
872
|
|
|
|
|
|
||||
Reported Sales
|
$
|
2,999
|
|
|
$
|
2,728
|
|
EBITDA Margin
|
32.6
|
%
|
|
31.7
|
%
|
||
Adjusted EBITDA Margin
|
33.3
|
%
|
|
32.0
|
%
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
(Dollar amounts in millions)
|
|
|
|
||||
Debt
|
$
|
8,842
|
|
|
$
|
9,368
|
|
Less: cash and cash equivalents
|
(545
|
)
|
|
(519
|
)
|
||
Net debt
|
8,297
|
|
|
8,849
|
|
||
Equity and redeemable noncontrolling interests
|
|
|
|
||||
Redeemable noncontrolling interests
|
13
|
|
|
10
|
|
||
Praxair, Inc. shareholders’ equity
|
6,368
|
|
|
5,529
|
|
||
Noncontrolling interests
|
516
|
|
|
436
|
|
||
Total equity and redeemable noncontrolling interests
|
6,897
|
|
|
5,975
|
|
||
Capital
|
$
|
15,194
|
|
|
$
|
14,824
|
|
DEBT-TO-CAPITAL RATIO
|
54.6
|
%
|
|
59.7
|
%
|
(a)
|
Based on an evaluation of the effectiveness of Praxair’s disclosure controls and procedures, which was made under the supervision and with the participation of management, including Praxair’s principal executive officer and principal financial officer, the principal executive officer and principal financial officer have each concluded that, as of the end of the quarterly period covered by this report, such disclosure controls and procedures are effective in ensuring that information required to be disclosed by Praxair in reports that it files under the Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and accumulated and communicated to management including Praxair’s principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.
|
(b)
|
There were no changes in Praxair’s internal control over financial reporting that occurred during the quarterly period covered by this report that have materially affected, or are reasonably likely to materially affect, Praxair’s internal control over financial reporting.
|
|
Period
|
Total Number
of Shares
Purchased
(Thousands)
|
|
Average
Price Paid
Per Share
|
|
Total Numbers of Shares
Purchased as Part of
Publicly Announced
Program (1)
(Thousands)
|
|
Approximate Dollar
Value of Shares that
May Yet be Purchased
Under the Program (2)
(Millions)
|
||||||
January 2018
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
1,580
|
|
February 2018
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
1,580
|
|
March 2018
|
3
|
|
|
$
|
158.56
|
|
|
3
|
|
|
$
|
1,580
|
|
First Quarter 2018
|
3
|
|
|
$
|
158.56
|
|
|
3
|
|
|
$
|
1,580
|
|
(1)
|
On January 28, 2014, the Company's board of directors approved the repurchase of $1.5 billion of its common stock ("2014 program") which could take place from time to time on the open market (which could include the use of 10b5-1 trading plans) or through negotiated transactions, subject to market and business conditions.
|
(2)
|
As of March 31, 2018, the Company 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.
|
|
|
|
PRAXAIR, INC.
|
|
|
|
|
|
|
|
(Registrant)
|
|
|
|
|
|
Date: April 26, 2018
|
|
By: /s/ Kelcey E. Hoyt
|
|
|
|
|
|
|
|
Kelcey E. Hoyt
|
|
|
|
Vice President and Controller
|
|
|
|
(On behalf of the Registrant
|
|
|
|
and as Chief Accounting Officer)
|
|
|
1.
|
Definitions
. As used in this Agreement, any reference to “Praxair” shall include its predecessors and successors and, in their capacities as such, all of its present, past, and future directors, officers, employees, representatives, attorneys, insurers, reinsurers, agents and assigns, as well as its parents, affiliates, divisions and subsidiaries, and any reference to Employee shall include, in their capacities as such, his heirs, administrators, representatives, attorneys, agents, and assigns.
|
2.
|
Termination of Employment Relationship
. Employee and Praxair will end their employment relationship on May 1, 2018 (the “Termination Date”). Upon the Termination Date, Employee’s employment with Praxair will terminate and Employee shall no longer be authorized to represent, act as an agent for, transact business or incur any expenses, obligations and liabilities on behalf of Praxair; provided, however, that Praxair may determine at any time prior to the Termination Date to terminate the Employee’s employment provided Praxair pay the Employee through the original Termination Date. Except as otherwise provided herein, Employee will return all Praxair computers, phones, credit cards, keys and other property by no later than the Termination Date. Employee acknowledges (i) Employee has received all compensation due him as a result of services performed for Praxair through the date he signed this Agreement; (ii) Employee has reported to Praxair any and all work-related injuries incurred during employment; (iii) Praxair properly provided any leave of absence because of Employee’s or a family member’s health condition and Employee has not been subjected to any improper treatment, conduct or actions due to a request for or taking such leave; and (iv) Employee has provided Praxair with written notice of
|
3.
|
Consideration
. Subject to (i) Employee signing and not revoking the General Release attached hereto as Exhibit A (the “General Release”), and (ii) Employee’s on-going compliance with all of the terms and conditions set forth herein, as consideration for entering into this Agreement and the General Release, and in lieu of any and all severance benefits under the Severance Program, the Severance Agreement and any other plan, program, policy or agreement:
|
a.
|
Praxair shall pay Employee within the timeframe require under applicable law, his full base salary and vacation pay accrued through the Termination Date.
|
b.
|
Praxair shall pay Employee, not later than 30 days following the Termination Date, a lump sum payment of $179,071.71, representing, and in lieu of, the target variable compensation award that he would have been eligible to receive for the portion of 2018 prior to the Termination Date.
|
c.
|
To provide benefits to Employee which are equivalent to the benefits that he would have received under the “Account-Based” design component of the Praxair defined benefit pension program for one year following the Termination Date, Praxair shall pay Employee $47,027.00, representing four percent of his annual pension program eligible compensation as in effect immediately prior to the Termination Date. Such amount shall be paid to Employee no later than the 30
th
day following the Termination Date.
|
d.
|
To provide benefits to Employee which are equivalent to the Praxair matching contributions that he would have received under the Praxair Retirement Savings Plan and the notional company contributions that he would have received under the Praxair Compensation Deferral Program for one year following the Termination Date, Praxair shall pay Employee $31,775.00, representing five percent of his annual eligible base salary as in effect immediately prior to the Termination Date. Such amount shall be paid to Employee no later than the 30
th
day following the Termination Date.
|
e.
|
Following the Termination Date, Praxair shall pay Employee a severance allowance of $1,288,175.00, payable in a lump sum within thirty (30) days following the later of the Termination Date or the Effective Date (as defined in Section 8 below).
|
f.
|
For purposes of all outstanding long-term incentive awards previously granted to Employee under Praxair, Inc.’s long term incentive plans, Employee’s separation from employment on the Termination Date shall be treated as a termination by action of Praxair other than for cause, with the resulting treatment determined in accordance with the applicable terms of each such plan and award. Notwithstanding the foregoing, Praxair hereby amends Section 2.c. of the Restricted Stock Unit Award agreement, dated as of July 24, 2012 and attached hereto as Exhibit B (the “2012 RSU Award Agreement”), to provide for the accelerated vesting of a total of 10,000 restricted stock units
|
g.
|
Praxair shall make available to Employee at no cost, financial planning services through the Ayco Company (or such other provider as may be selected by Praxair to provide financial planning services to its executives) for a period of one year following the Termination Date.
|
h.
|
Upon the Termination Date, Praxair shall transfer to Employee ownership of the cell phone, iPad and laptop computer provided to him in connection with his employment. As a condition to such transfer, Employee shall, prior to the Termination Date, provide Praxair physical access to such devices to permanently erase all Praxair confidential and other information and intellectual property.
|
i.
|
Except as otherwise provided herein, following the Termination Date, Employee’s entitlements under Praxair’s benefit plans, programs, policies or arrangements shall be governed by the terms of each such plan, program, policy or arrangement.
|
j.
|
Praxair shall provide Employee with its standard outplacement services for an employee of his salary level through Right Associates at no cost to Employee.
|
4.
|
Taxes
.
|
a.
|
All benefits and payments hereunder will be subject to applicable federal, state and local tax withholdings as determined by Praxair in its sole discretion, and will be reflected on Forms W-2 issued to Employee in the normal course.
|
b.
|
Employee acknowledges and agrees that Praxair has not made any representation to him or anyone representing him regarding the tax consequences of payments and benefits to be provided pursuant to this Agreement. Employee further agrees that the tax consequences of this Agreement shall have no effect whatsoever on the enforceability of this Agreement. In addition, Employee understands and agrees that Praxair would be obligated to respond truthfully to any inquiry or request for further information by the Internal Revenue Service (“IRS”) or any state taxing authority or to any lawfully issued subpoena concerning the payments to be provided under this Agreement. Employee further understands and agrees that the determination of the tax treatment, if any, of the payments and benefits provided pursuant to this Agreement will be exclusively within the province of the IRS, and any appropriate taxing or judicial authority, pursuant to law. Employee further agrees that he will have no action or claim whatsoever against Praxair relating to the tax treatment of the payments and benefits under this Agreement or information or documents provided to the IRS or any appropriate taxing authority.
|
5.
|
Other Agreements
.
|
a.
|
Employee expressly acknowledges and reaffirms his continuing obligations (including but not limited to those regarding confidential or proprietary information, trade secrets, and other intellectual property of Praxair) under the Nondisclosure, Nonsolicitation and Noncompetition Agreement, dated as of April 27, 2010 and attached hereto as Exhibit C (the “Restrictive Covenant Agreement”), as amended by Section 5(b) of this Agreement, and under any other agreement he has signed, and under any applicable law.
|
b.
|
Section 4.1 of the Restrictive Covenant Agreement is hereby amended by the addition of the following after the last sentence of such Section: “However, nothing in this provision shall prohibit Employee from communicating with, evaluating, hiring or assisting in the hiring of any Praxair employee who, without prior direct or indirect contact by or on behalf of Employee, has responded to a general public solicitation of employment including but not limited to any such general solicitation via the internet, newspaper advertisements and the like.”
|
c.
|
Section 4.3 of the Restrictive Covenant Agreement is hereby amended to reduce the duration of the Restriction on Unfair Competition to a period of one year following the Termination Date. Except as explicitly amended by this Agreement, the terms and provisions of the Restrictive Covenant Agreement shall remain unchanged.
|
6.
|
Nondisparagement
. Employee will not make any statements that are professionally or personally disparaging about, or adverse to, Praxair, including, but not limited to, any statements that disparage Praxair or any product, service, finances, financial condition, capability of Praxair or any other aspect of the business of Praxair. In addition, Employee will not engage in any conduct that is intended to harm, professionally or personally, Praxair’s reputation. Likewise, Praxair will not make any statements that are professionally or personally disparaging about, or adverse to, Employee. In addition, Praxair will not engage in any conduct that is intended to harm, professionally or personally, Employee’s reputation.
|
7.
|
Cooperation
. Employee agrees to cooperate reasonably with Praxair following the Termination Date regarding any pending or subsequently filed litigation, claims or other disputes involving Praxair that relate to matters within the knowledge or responsibility of Employee. Without limiting the foregoing, Employee agrees (i) to meet with Praxair’s representatives, counsel or other designees at mutually convenient times and places with respect to any items within the scope of this provision; (ii) to provide truthful testimony regarding same to any court, agency, or other adjudicatory body; and (iii) to provide Praxair with notice of contact by any adverse party or such adverse party’s representative, except as may be required by law. Praxair will reimburse Employee for reasonable expenses, including attorney’s fees to the extent permitted under Praxair’s By-Laws, in connection with the cooperation described in this Section.
|
8.
|
Advice of Counsel, Consideration and Revocation Periods, Other Information
. Praxair advises Employee to consult with an attorney prior to signing this Agreement. Employee has twenty-one (21) days to consider whether to sign this Agreement, including the General Release, from the date Employee receives this Agreement and any attached information (the “Consideration Period”). Employee must return this signed Agreement, including the signed General Release, to
|
9.
|
Full Satisfaction
. The parties understand, agree, and intend that, (i) upon execution of this Agreement and the General Release, Employee will have received full and complete satisfaction of any and all claims, whether known, suspected, or unknown, that he may have or has had against Praxair arising from events, acts or omissions that occurred at any time up to and including the date of the execution of this Agreement and the General Release.
|
10.
|
Employee Breach
. In addition to any other remedies available to Praxair for breach of any provision or obligation under this Agreement, should Employee or any person or entity acting in concert with Employee ever materially breach any provision or obligation under this Agreement, including Section 5, Employee explicitly agrees that: (a) in the event that the act or acts constituting such breach occur prior to the date(s) by which Praxair must pay the consideration described in Sections 3.b., c., d., and/or e., Praxair shall have no obligation to make the respective payment(s); (b) in the event that the act or acts constituting such breach occur on or prior to May 1, 2019, Employee will be required to immediately pay to Praxair liquidated damages in the amount of $500,000; and (c) in the event that the act or acts constituting such breach occur after May 1, 2019 but prior to May 1, 2020, Employee will be required to immediately pay to Praxair liquidated damages in the amount of $250,000. Although Employee is releasing claims under the Age Discrimination in Employment Act (ADEA), the cessation or forfeiture of benefits provisions in this Section do not apply to any challenge he may make to the knowing and voluntary nature of this Agreement under the ADEA and Older Workers’ Benefit Protection Act. Nothing in this Agreement shall affect the remedies available to Praxair under Section 7 of the Restrictive Covenant Agreement.
|
11.
|
No Interference with Rights
. Nothing in this Agreement (including but not limited to Section 5 (Other Agreements), Section 6 (Nondisparagement), and Exhibit A (General Release)) (i) limits or affects Employee’s right to enforce or challenge the validity of this Agreement or (ii) prevents Employee from filing a charge or complaint with or from participating in an investigation or proceeding conducted by the Equal Employment Opportunity Commission, National Labor Relations Board, the Securities and Exchange Commission, or any other any federal, state or local agency charged with the enforcement of any laws, or from exercising rights under Section 7 of the National Labor Relations Act to engage
|
12.
|
Construction
. This Agreement shall be construed according to its plain language, and not strictly for or against any party hereto. Captions herein are inserted for convenience, do not constitute a part of this Agreement, and shall not be admissible for the purpose of proving the intent of the parties.
|
13.
|
Entire Agreement
. This Agreement and the attached exhibits contain and constitute the entire understanding and agreement between the parties and supersede and cancel all previous negotiations, representations, agreements, commitments, and writings in connection herewith, except as expressly contemplated by this Agreement.
|
14.
|
No Oral Representations
. Employee represents and acknowledges that, in executing this Agreement, he does not rely on and has not relied on any representation or statement made by Praxair or any of Praxair’s agents, representatives or attorneys with regard to the subject matter, basis or effect of this Agreement or otherwise.
|
15.
|
Severability
. Should any provision of this Agreement be declared or determined by any court to be illegal or invalid, the remaining provisions shall nevertheless be binding upon the parties and remain in full force and effect.
|
16.
|
No Oral Modifications
. This Agreement may not be modified in any way except by a signed writing specifically referring to this Agreement and executed by a duly authorized representative of Praxair (excluding Employee).
|
17.
|
No Admission of Liability
. This Agreement shall not be construed as an admission by Praxair of any liability or acts of wrongdoing or unlawful discrimination, nor shall it be considered to be evidence of such liability, wrongdoing, or unlawful discrimination. The Employee will make no inconsistent statement with respect to liability or acts of wrongdoing or unlawful discrimination to anyone for any purpose.
|
18.
|
Governing Law and Choice of Forum
. This Agreement shall be governed by, construed and enforced in accordance with the laws of the state of Connecticut, and any action related to this Agreement must be brought in a court of competent jurisdiction in the state or federal courts of Connecticut. Employee hereby irrevocably consents to personal jurisdiction and venue in said courts.
|
19.
|
Execution of Agreement
. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall constitute one in the same Agreement.
|
1.
|
In consideration of the promises and benefits set forth in the attached Agreement, I, Scott Telesz, for myself and on behalf of my heirs, assigns, successors, executors and administrators, hereby fully and irrevocably release and discharge Praxair, its predecessors, successors, parents, affiliates, divisions and subsidiaries and, in their capacities as such, all of their present past, and future directors, officers, employees, representatives, attorneys, insurers, reinsurers, agents and assigns, from any and all manner of suits, actions, allegations, charges, claims, complaints, causes of action, grievances, liabilities, demands, entitlements, obligations, promises, damages, agreements, rights, debts and expenses (including attorneys’ fees and costs), of every kind (collectively, “Claims”), either at law or in equity, whether known, unknown or unforeseen, vested or contingent by reason of any matter, cause or thing occurring at any time before and including the date of this release, including all claims arising under or in connection with my employment or separation from employment with Praxair. This includes any Claims under any federal, state, local or municipal law, regulation or decision, including, but not limited to, claims arising under the Age Discrimination in Employment Act of 1967 (ADEA), the Older Worker Benefit Protection Act (OWBPA), Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Americans With Disabilities Act, the Employee Retirement Income Security Act of 1974 (ERISA), the Worker Adjustment and Retraining Notification Act or similar state or local law, or any other federal, state, or local law, statute, regulation, ordinance, or legal decision. It is expressly agreed and understood that this release is a GENERAL RELEASE and that I hereby waive any and all rights under the laws of any jurisdiction in the United States, or any other country, that limit a general release to those Claims that are known or suspected to exist in my favor as of the effective date of this release, except that I am not waiving any Claims related to the attached Agreement, any Claim for employee benefits under plans covered by ERISA to the extent any such Claim may not lawfully be waived or for any payments or benefits under any Praxair plans that have vested according to the terms of those plans, or any Claims that the controlling law clearly states may not be released by private agreement. This General Release shall not waive Claims that may arise for actions or omissions after the date of its execution, including claims arising from breach of the attached Agreement, nor shall it apply to: (a) any rights of indemnification, contribution, or to be held harmless, or to the coverage afforded by any policies of directors’ and officers’ liability insurance, which rights exist as of the date of the attached Agreement; or (b) any claim for unemployment benefits in connection with the termination of my employment with Praxair pursuant to the attached Agreement.
|
2.
|
I acknowledge that:
|
(a)
|
I have read this document, and I understand its legal and binding effect. I am acting voluntarily and of my own free will in executing this release.
|
(b)
|
The consideration for this release is in addition to anything of value to which I already am entitled.
|
(c)
|
I have been advised, and am being advised by this General Release, to consult with an attorney before executing this release, and I have had the opportunity to seek and have consulted with legal counsel prior to signing this release.
|
(d)
|
I have been given at least 21 days to consider the terms of this release before signing it. In the event that I sign this release before the expiration of the 21-day period, I acknowledge that I have freely chosen to waive the 21-day period.
|
3.
|
I understand that if I sign this release, I can change my mind and revoke it within seven days after signing it by sending a written revocation notice by both overnight and certified mail to:
|
1.
|
Award of Restricted Stock Units. The Participant is hereby granted an award of 20,000
notional RSUs (the “Award”). Each RSU represents a bookkeeping entry which is intended to be 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 either the Plan or this Section 2., this Award shall vest as to 10,000 RSUs on each of August 31, 2022 and August 31, 2027, if, and only if, the Participant has remained continuously employed by Praxair at all times from the Grant Date through the respective August 31 vesting date.
|
b.
|
Death, Disability. Notwithstanding Section 2.a., in the event the Participant’s employment by Praxair terminates by reason of his death, or the Participant becomes Totally and Permanently Disabled (as defined below) while employed by Praxair, in either case, after the Grant Date and prior to August 31, 2027, 10,000 RSUs shall become immediately vested, and any unvested portion of the Award thereafter remaining shall be immediately forfeited. For purposes of this Award, the Participant shall be “Totally and Permanently Disabled” if he is determined by Praxair to be unable to engage in any substantial gainful activity by reason 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.
|
c.
|
Termination by Action of Praxair Other than for Cause. Notwithstanding Section 2.a., in the event the Participant’s employment is terminated by action of Praxair other than for cause after the Grant Date and prior to August 31, 2027, 5,000 RSUs shall become vested immediately following the effective date of such termination of employment, and any unvested portion of the Award thereafter remaining shall be immediately forfeited. For purposes of this Award 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 poor performance.
|
d.
|
Change in Control. Notwithstanding Section 2.a., the provisions of Article 16 of the Plan shall apply in the event of a Change in Control occurring prior to August 31, 2027.
|
e.
|
Forfeiture of Award. Except as otherwise provided under Article 16 of the Plan in connection with a Change in Control, in the event the Participant’s employment with Praxair terminates for any reason other than those specifically set forth in Sections 2.b., or 2.c. prior to August 31, 2027, any unvested portion of this Award shall be immediately forfeited. In the event any portion of this Award is forfeited for any reason, no payment shall be made in settlement of such portion.
|
3.
|
Payment of Vested Award. As soon as practicable following the date any portion of this Award becomes vested, such portion shall be settled by payment to the Participant of a number of Shares equal to the number of RSUs then first becoming vested or, in connection with a Change in Control, such other form of payment having an equivalent value as may be authorized by the Committee in its sole discretion. In no event shall any payment in
|
4.
|
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 4.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 any portion of this Award, the Participant shall have none of the rights of a stockholder of the Company with respect to such portion of the Award, including, but not limited to, voting rights and the right to receive or accrue dividends or dividend equivalents.
|
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 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 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 pursuant to the beneficiary designation then on file with the Company, or, in the absence of such a beneficiary designation, 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.
|
5.
|
Tax Withholding. Upon the date of payment of the Award, Praxair will deduct from the number of Shares otherwise due the Participant, Shares having a Market Price sufficient to discharge all applicable federal, state, city, local or foreign taxes of any kind required to be withheld with respect to such payment. 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.
|
6.
|
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.
|
7.
|
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.
|
•
|
keep secret and confidential and neither use nor disclose, by any means, either during or subsequent to his or her employment, any Confidential Information except as provided below or required in his or her employment with, or authorized in writing by, Praxair;
|
•
|
assign to Praxair or its designee (and Employee hereby does assign), all right, title and interest in and to all Subject Developments;
|
•
|
promptly disclose to Praxair all Subject Developments, in writing and in reasonable detail, and to assist in the preparation of and to execute all appropriate papers or documents and otherwise provide proper assistance to enable Praxair to secure, maintain, enforce and defend its patents, copyrights and any other legal protection available for such Subject Developments in any and all countries;
|
•
|
not disclose to Praxair nor to utilize in Employee’s work for Praxair any confidential information or trade secrets of others known to Employee (including prior employers);
|
•
|
keep confidential and not disclose or use, either during or subsequent to Employee’s employment, any confidential information or trade secrets of others which Employee receives during the course of his or her employment with Praxair for so long as and to the same extent as Praxair is obligated to retain such information or trade secrets in confidence; and
|
•
|
deliver to Praxair promptly upon the end of Employee’s employment all written and other materials which constitute or contain Confidential Information or Subject Developments or which are the property of Praxair, and to not remove or take any such written and other materials.
|
EMPLOYEE:
/s/ Scott Telesz
______________________
(signature)
|
PRAXAIR, INC.
By:
/s/Stephen F. Angel
__________________
Stephen F. Angel
|
Printed Name:
Scott Telesz
.
|
Its:
Chairman and Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
||||||||||
RATIO OF EARNINGS TO FIXED CHARGES
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
Praxair, Inc. and Subsidiaries
|
|
|||||||||||||||
|
|
|
|
|
|
|
Exhibit 12.01
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Three Months Ended March 31,
|
|
Year Ended December 31,
|
||||||||||||||||
(Dollar amounts in millions, except ratios)
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Pre-tax income from continuing operations before adjustment for
|
|
|
|
|
|
|
|
|
|
||||||||||
noncontrolling interests in consolidated subsidiaries or income or
|
|
|
|
|
|
|
|
|
|
||||||||||
loss from equity investees
|
$
|
605
|
|
|
$
|
2,287
|
|
|
$
|
2,048
|
|
|
$
|
2,160
|
|
|
$
|
2,395
|
|
Capitalized interest
|
(4
|
)
|
|
(28
|
)
|
|
(34
|
)
|
|
(33
|
)
|
|
(38
|
)
|
|||||
Depreciation of capitalized interest
|
6
|
|
|
17
|
|
|
19
|
|
|
22
|
|
|
27
|
|
|||||
Dividends from less than 50%-owned companies carried at equity
|
19
|
|
|
111
|
|
|
8
|
|
|
11
|
|
|
6
|
|
|||||
Adjusted pre-tax income from continuing operations before adjustment
|
|
|
|
|
|
|
|
|
|
||||||||||
for noncontrolling interests in consolidated subsidiaries or income
|
|
|
|
|
|
|
|
|
|
||||||||||
or loss from equity investees
|
$
|
626
|
|
|
$
|
2,387
|
|
|
$
|
2,041
|
|
|
$
|
2,160
|
|
|
$
|
2,390
|
|
Fixed charges
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest on long-term and short-term debt
|
$
|
46
|
|
|
$
|
161
|
|
|
$
|
190
|
|
|
$
|
161
|
|
|
$
|
213
|
|
Capitalized interest
|
4
|
|
|
28
|
|
|
34
|
|
|
33
|
|
|
38
|
|
|||||
Rental expenses representative of an interest factor
|
12
|
|
|
49
|
|
|
47
|
|
|
47
|
|
|
52
|
|
|||||
Total fixed charges
|
$
|
62
|
|
|
$
|
238
|
|
|
$
|
271
|
|
|
$
|
241
|
|
|
$
|
303
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
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
|
$
|
688
|
|
|
$
|
2,625
|
|
|
$
|
2,312
|
|
|
$
|
2,401
|
|
|
$
|
2,693
|
|
RATIO OF EARNINGS TO FIXED CHARGES
|
11.1
|
|
|
11.0
|
|
|
8.5
|
|
|
10.0
|
|
|
8.9
|
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Praxair, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing equivalent function):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
April 26, 2018
|
|
By: /s/ Stephen F. Angel
|
|
|
|
|
|
|
|
Stephen F. Angel
|
|
|
|
Chairman, President
|
|
|
|
Chief Executive Officer
|
|
|
|
(principal executive officer)
|
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Praxair, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing equivalent function):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
April 26, 2018
|
|
By: /s/ Matthew J. White
|
|
|
|
|
|
|
|
Matthew J. White
|
|
|
|
Senior Vice President and
|
|
|
|
Chief Financial Officer
|
|
|
|
(principal financial officer)
|
|
|
April 26, 2018
|
|
By: /s/ Stephen F. Angel
|
|
|
|
|
|
|
|
Stephen F. Angel
|
|
|
|
Chairman, President
|
|
|
|
Chief Executive Officer
|
|
|
|
(principal executive officer)
|
|
|
April 26, 2018
|
|
By: /s/ Matthew J. White
|
|
|
|
|
|
|
|
Matthew J. White
|
|
|
|
Senior Vice President and
|
|
|
|
Chief Financial Officer
|
|
|
|
(principal financial officer)
|
|