PX P10 Inc

• Sales of $2.5 billion; EPS of $1.24; adjusted EPS of $1.28
• Operating cash flow 8% above prior-year quarter
• EBITDA and operating margins of 33.3% and 22.1%, respectively
• Completed six packaged gas acquisitions, primarily North America; annualized sales of approximately $50 million
• Return on capital 12.4%; return on equity 34.6%
• Second-quarter 2016 EPS guidance of $1.32 to $1.39; adjusted full-year $5.35 to $5.70

Praxair, Inc. (NYSE: PX) reported first-quarter net income and diluted earnings per share of $356 million and $1.24, respectively. These results include the impact of a $16 million charge to interest expense ($10 million after-tax) or 4 cents of diluted earnings per share, related to a bond redemption prior to maturity. Excluding this charge, adjusted net income and diluted earnings per share were $366 million and $1.28, respectively.

Praxair’s sales in the first quarter were $2,509 million, 9% below the prior-year quarter, primarily due to the impacts of negative currency translation and lower cost pass-through, which reduced sales by 7% and 1%, respectively. Organic sales were 1% below the prior-year quarter. Growth from higher pricing, new project start-ups, and healthcare and food and beverage end-markets, was more than offset by lower volumes to energy, metals and manufacturing end-markets, primarily in North America.

Operating profit in the first quarter was $554 million, 11% below the prior-year quarter. Excluding currency effects, operating profit was 4% below the prior-year period. The operating profit margin was 22.1% and the EBITDA margin grew to 33.3%.

First-quarter cash flow from operations was $547 million, 8% above the prior-year quarter. Capital expenditures were $323 million and the company invested $63 million in acquisitions for several packaged gas businesses, primarily in North America. The company paid $214 million of dividends. During the quarter, the company issued €550 million of 1.20% Euro-denominated notes due 2024 and $275 million of 3.20% notes due 2026. In addition, the company repaid $400 million of 0.75% notes that became due and redeemed $325 million of 5.20% notes due in 2017. After-tax return on capital and return on equity for the quarter were 12.4% and 34.6%, respectively.

Commenting on the financial results and business outlook, Chairman and Chief Executive Officer Steve Angel said, “Praxair’s strategy of optimizing the base business, growing resilient end-markets, executing the project backlog and capitalizing on acquisition and project opportunities reflected positively in our first-quarter results and continues to drive long-term value creation.

“While North America continues to face year-over-year volume headwinds primarily in the energy, metals and manufacturing end-markets, we grew sales to the healthcare, food and beverage end-markets globally, achieved higher pricing in many businesses, and grew volumes in Europe and Asia supplemented by project start-ups. In addition, we closed six packaged gas acquisitions located in North America and Europe.

“Praxair employees again delivered high-quality results with an operating margin of 22% and growth in operating cash flow of 8%, against a difficult macro-economic environment. Consistent high-quality results and strong cash flow affords us the long-term ability to invest in high-quality projects and acquisitions that align with our strategic objectives and meet our investment criteria as well as return value to our shareholders in the form of higher dividends and share repurchases.”

For the second quarter of 2016, Praxair expects diluted earnings per share in the range of $1.32 to $1.39.

For full-year 2016, Praxair expects adjusted diluted earnings per share to be in the range of $5.35 to $5.70, -2% to +4% ex-currency from 2015. Full-year capital expenditures are expected to be approximately $1.5 billion and the effective tax rate is forecasted to remain at approximately 28%.

Following is additional detail on first-quarter 2016 results by segment.

In North America, first-quarter sales were $1,353 million, down 4% from the prior-year quarter excluding lower cost-pass through, negative currency translation and net divestitures. Organic sales growth from higher pricing and food and beverage end-markets was more than offset by weaker volumes in energy, metals and manufacturing end-markets. Operating profit of $349 million was down 4% versus the prior-year quarter, excluding currency translation and net divestitures, due primarily to lower volumes partially offset by price and productivity.

In Europe, first-quarter sales were $320 million, 2% below the prior-year quarter. Excluding currency, organic sales grew 2% from the prior year due to higher volumes, including new project start-ups. Operating profit of $62 million grew 3% from the prior-year, excluding currency translation, from operating leverage on volume growth.

In South America, first-quarter sales were $311 million, 22% below the prior-year quarter. Excluding negative currency translation and cost pass-through, sales grew 2% from acquisitions, higher price, and growth to food and beverage and healthcare end-markets, partially offset by lower volumes to the manufacturing end-market. Operating profit was $55 million.

Sales in Asia were $376 million in the quarter, 6% above the prior year excluding currency and cost pass-through. Volume growth included new plant start-ups in China and India. Operating profit was $63 million.

Praxair Surface Technologies had first-quarter sales of $149 million as compared to $160 million in the prior-year quarter. Excluding negative currency translation and cost pass-through, sales were 4% below the prior-year period. Favorable price was more than offset by lower volumes. Sales were primarily lower to the energy and manufacturing end-markets. Operating profit was $25 million.

Praxair, Inc., a Fortune 250 company with 2015 sales of $11 billion, is the largest industrial gases company in North and South America and one of the largest worldwide. The company produces, sells and distributes atmospheric, process and specialty gases, and high-performance surface coatings. Praxair products, services and technologies are making our planet more productive by bringing efficiency and environmental benefits to a wide variety of industries, including aerospace, chemicals, food and beverage, electronics, energy, healthcare, manufacturing, primary metals and many others. More information about Praxair, Inc. is available at www.praxair.com.

Adjusted amounts are non-GAAP measures. First-quarter 2016 results are adjusted to exclude the impact of a bond redemption charge. Additionally, measures such as EBITDA, free cash flow, after-tax return on capital, return on equity and debt-to-capital are also non-GAAP measures. See the attachments for a summary of non-GAAP Reconciliations and calculations of non-GAAP measures.

Attachments: Summary Non-GAAP Reconciliations, Statements of Income, Balance Sheets, Statements of Cash Flows, Segment Information, Quarterly Financial Summary and Appendix: Non-GAAP Measures.

A teleconference about Praxair’s first-quarter results is being held this morning, April 29, at 11:00am Eastern Daylight Time. The number is (631) 485-4849 – Conference ID: 85141182. The call is also available as a webcast live and on-demand at www.praxair.com/investors. Materials to be used in the teleconference are also available on the website.

This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management’s reasonable expectations and assumptions as of the date the statements are made but involve risks and uncertainties. These risks and uncertainties include, without limitation: the performance of stock markets generally; developments in worldwide and national economies and other international events and circumstances; changes in foreign currencies and in interest rates; the cost and availability of electric power, natural gas and other raw materials; the ability to achieve price increases to offset cost increases; catastrophic events including natural disasters, epidemics and acts of war and terrorism; the ability to attract, hire, and retain qualified personnel; the impact of changes in financial accounting standards; the impact of changes in pension plan liabilities; the impact of tax, environmental, healthcare and other legislation and government regulation in jurisdictions in which the company operates; the cost and outcomes of investigations, litigation and regulatory proceedings; continued timely development and market acceptance of new products and applications; the impact of competitive products and pricing; future financial and operating performance of major customers and industries served; the impact of information technology system failures, network disruptions and breaches in data security; and the effectiveness and speed of integrating new acquisitions into the business. These risks and uncertainties may cause actual future results or circumstances to differ materially from the projections or estimates contained in the forward-looking statements. Additionally, financial projections or estimates exclude the impact of special items which the company believes are not indicative of ongoing business performance. The company assumes no obligation to update or provide revisions to any forward-looking statement in response to changing circumstances. The above listed risks and uncertainties are further described in Item 1A (Risk Factors) in the company’s Form 10-K and 10-Q reports filed with the SEC which should be reviewed carefully. Please consider the company’s forward-looking statements in light of those risks.

 

PRAXAIR, INC. AND SUBSIDIARIES SUMMARY NON-GAAP RECONCILIATIONS (UNAUDITED)   The following adjusted amounts are non-GAAP measures and are intended to supplement investors' understanding of the company's financial statements by providing measures which investors, financial analysts and management use to help evaluate the company's operating performance. Items which the company does not believe to be indicative of on-going business trends are excluded from these calculations so that investors can better evaluate and analyze historical and future business trends on a consistent basis. Definitions of these non-GAAP measures may not be comparable to similar definitions used by other companies and are not a substitute for similar GAAP measures. See the Non-GAAP reconciliations starting on page 10 for additional details relating to the Non-GAAP adjustments.   (Millions of dollars, except per share amounts)             Sales     Operating Profit     Net Income - Praxair, Inc.     Diluted EPS 2016     2015 2016     2015 2016     2015 2016     2015 Quarter Ended March 31   Reported GAAP Amounts $ 2,509 $ 2,757 $ 554 $ 623 $ 356 $ 416 $ 1.24 $ 1.43 Bond redemption (a)   -       -       -       -       10       -           0.04       - Total adjustments   -       -       -       -       10       -           0.04       - Adjusted amounts $ 2,509     $ 2,757     $ 554     $ 623     $ 366     $ 416         $ 1.28     $ 1.43  

(a) $16 million charge to interest expense ($10 million after-tax or $0.04 per diluted share) in the 2016 first quarter related to a bond redemption.

 

PRAXAIR, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Millions of dollars, except per share data) (UNAUDITED)           Quarter Ended March 31, 2016       2015   SALES $ 2,509 $ 2,757 Cost of sales 1,381 1,530 Selling, general and administrative 274 299 Depreciation and amortization 272 277 Research and development 23 24 Other income (expense) - net   (5 )   (4 ) OPERATING PROFIT 554 623 Interest expense - net   65     44   INCOME BEFORE INCOME TAXES AND EQUITY INVESTMENTS 489 579 Income taxes   133     162   INCOME BEFORE EQUITY INVESTMENTS 356 417 Income from equity investments   10     11   NET INCOME (INCLUDING NONCONTROLLING INTERESTS) 366 428 Less: noncontrolling interests   (10 )   (12 ) NET INCOME - PRAXAIR, INC. $ 356   $ 416     PER SHARE DATA - PRAXAIR, INC. SHAREHOLDERS   Basic earnings per share $ 1.25 $ 1.44   Diluted earnings per share $ 1.24 $ 1.43   Cash dividends $ 0.75 $ 0.715   WEIGHTED AVERAGE SHARES OUTSTANDING Basic shares outstanding (000's) 285,429 289,143 Diluted shares outstanding (000's) 286,665 291,652  

Note: See page 4 for a reconciliation to 2016 adjusted amounts which are non-GAAP.

    PRAXAIR, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Millions of dollars) (UNAUDITED)             March 31,     December 31, 2016 2015 ASSETS Cash and cash equivalents $ 221 $ 147 Accounts receivable - net 1,685 1,601 Inventories 553 531 Prepaid and other current assets   411     347   TOTAL CURRENT ASSETS 2,870 2,626 Property, plant and equipment - net 11,314 10,998 Goodwill 3,071 2,986 Other intangibles - net 576 568 Other long-term assets   1,194     1,141   TOTAL ASSETS $ 19,025   $ 18,319     LIABILITIES AND EQUITY Accounts payable $ 796 $ 791 Short-term debt 174 250 Current portion of long-term debt 8 6 Other current liabilities   821     846   TOTAL CURRENT LIABILITIES 1,799 1,893 Long-term debt 9,222 8,975 Other long-term liabilities   2,580     2,545   TOTAL LIABILITIES 13,601 13,413   REDEEMABLE NONCONTROLLING INTERESTS 119 113   PRAXAIR, INC. SHAREHOLDERS' EQUITY: Common stock 4 4 Additional paid-in capital 3,998 4,005 Retained earnings 12,371 12,229 Accumulated other comprehensive income (loss) (4,250 ) (4,596 ) Less: Treasury stock, at cost   (7,235 )   (7,253 ) Total Praxair, Inc. Shareholders' Equity 4,888 4,389 Noncontrolling interests   417     404   TOTAL EQUITY   5,305     4,793   TOTAL LIABILITIES AND EQUITY $ 19,025   $ 18,319       PRAXAIR, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Millions of dollars) (UNAUDITED)           Quarter Ended March 31, 2016       2015 OPERATIONS Net income - Praxair, Inc. $ 356 $ 416 Noncontrolling interests   10     12   Net income (including noncontrolling interests) 366 428   Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 272 277 Accounts receivable (20 ) (50 ) Inventory (7 ) (6 ) Payables and accruals (77 ) (66 ) Pension contributions (2 ) (11 ) Deferred income taxes and other   15     (64 ) Net cash provided by operating activities   547     508     INVESTING Capital expenditures (323 ) (397 ) Acquisitions, net of cash acquired (63 ) (5 ) Divestitures and asset sales   2     2   Net cash used for investing activities   (384 )   (400 )   FINANCING Debt increase (decrease) - net 95 290 Issuances of common stock 34 44 Purchases of common stock (32 ) (235 ) Cash dividends - Praxair, Inc. shareholders (214 ) (207 ) Excess tax benefit on stock option exercises 6 14 Noncontrolling interest transactions and other   (2 )   (6 ) Net cash provided by (used for) financing activities (113 ) (100 )   Effect of exchange rate changes on cash and cash equivalents   24     (17 )   Change in cash and cash equivalents 74 (9 ) Cash and cash equivalents, beginning-of-period   147     126     Cash and cash equivalents, end-of-period $ 221   $ 117       PRAXAIR, INC. AND SUBSIDIARIES SEGMENT INFORMATION (Millions of dollars) (UNAUDITED)               Quarter Ended March 31, 2016       2015 SALES North America $ 1,353 $ 1,499 Europe 320 326 South America 311 401 Asia 376 371 Surface Technologies   149   160 Consolidated sales $ 2,509 $ 2,757   OPERATING PROFIT North America $ 349 $ 379 Europe 62 62 South America 55 85 Asia 63 69 Surface Technologies   25   28 Segment operating profit $ 554 $ 623     PRAXAIR, INC. AND SUBSIDIARIES QUARTERLY FINANCIAL SUMMARY (Millions of dollars, except per share data) (UNAUDITED)             2016 (b)     2015 (c) Q1 Q4     Q3     Q2     Q1 FROM THE INCOME STATEMENT Sales $ 2,509 $ 2,595 $ 2,686 $ 2,738 $ 2,757 Cost of sales 1,381 1,426 1,488 1,516 1,530 Selling, general and administrative 274 275 281 297 299 Depreciation and amortization 272 275 276 278 277 Research and development 23 23 23 23 24 Cost reduction program and other charges - - 26 146 - Other income (expense) - net   (5 )   28         2         2         (4 ) Operating profit 554 624 594 480 623 Interest expense - net 65 42 35 40 44 Income taxes 133 163 156 131 162 Income from equity investments   10     12         10         10         11   Net income (including noncontrolling interests) 366 431 413 319 428 Less: noncontrolling interests   (10 )   (9 )       (12 )       (11 )       (12 ) Net income - Praxair, Inc. $ 356   $ 422       $ 401       $ 308       $ 416     PER SHARE DATA - PRAXAIR, INC. SHAREHOLDERS Diluted earnings per share $ 1.24 $ 1.47 $ 1.40 $ 1.06 $ 1.43 Cash dividends per share $ 0.75 $ 0.715 $ 0.715 $ 0.715 $ 0.715 Diluted weighted average shares outstanding (000's) 286,665 286,856 287,311 290,102 291,652   ADJUSTED AMOUNTS (a) Operating profit $ 554 $ 624 $ 620 $ 626 $ 623 Operating margin 22.1 % 24.0 % 23.1 % 22.9 % 22.6 % Net Income $ 366 $ 422 $ 419 $ 420 $ 416 Diluted earnings per share $ 1.28 $ 1.47 $ 1.46 $ 1.45 $ 1.43   FROM THE BALANCE SHEET Net debt (a) $ 9,183 $ 9,084 $ 9,344 $ 9,177 $ 9,243 Capital (a) $ 14,607 $ 13,990 $ 14,157 $ 14,696 $ 14,806 Debt-to-capital ratio (a) 62.9 % 64.9 % 66.0 % 62.4 % 62.4 %   FROM THE STATEMENT OF CASH FLOWS Cash flow from operations $ 547 $ 791 $ 676 $ 707 $ 508 Cash flow used for investing activities 384 351 400 152 400 Cash flow used for financing activities 113 410 260 527 100 Capital expenditures 323 387 405 352 397 Acquisitions 63 39 - 38 5 Cash dividends 214 204 203 205 207   OTHER INFORMATION After-tax return on capital (ROC) (a) 12.4 % 12.6 % 12.5 % 12.6 % 12.7 % Return on Praxair, Inc. shareholders' equity (ROE) (a) 34.6 % 34.6 % 32.5 % 30.5 % 29.6 % Adjusted EBITDA (a) $ 836 $ 911 $ 906 $ 914 $ 911 Adjusted EBITDA margin (a) 33.3 % 35.1 % 33.7 % 33.4 % 33.0 % Debt-to-adjusted EBITDA ratio (a) 2.6 2.5 2.5 2.4 2.3 Number of employees 26,558 26,657 26,989 27,302 27,680   SEGMENT DATA SALES North America $ 1,353 $ 1,421 $ 1,463 $ 1,482 $ 1,499 Europe 320 325 338 331 326 South America 311 299 343 388 401 Asia 376 398 395 387 371 Surface Technologies   149     152         147         150         160   Total sales $ 2,509   $ 2,595       $ 2,686       $ 2,738       $ 2,757   OPERATING PROFIT North America $ 349 $ 406 $ 385 $ 388 $ 379 Europe 62 62 63 63 62 South America 55 55 70 81 85 Asia 63 74 77 69 69 Surface Technologies   25     27         25         25         28   Segment operating profit 554 624 620 626 623 Cost reduction program and other charges   -     -         (26 )       (146 )       -   Total operating profit $ 554   $ 624       $ 594       $ 480       $ 623     (a)   Non-GAAP measure, see Appendix.   (b) 2016 includes a $16 million charge to interest expense ($10 million after-tax, or $0.04 per diluted share) related to the redemption of the $325 million 5.20% notes due in 2017.   (c) 2015 includes (i) a pre-tax pension settlement charge of $7 million ($5 million after-tax, or $0.02 per diluted share) in the third quarter related to lump sum benefit payments made from the U.S. supplemental pension plan, and (ii) pre-tax charges of $19 million ($13 million after-tax, or $0.04 per diluted share) in the third quarter and $146 million ($112 million after-tax and non-controlling interests, or $0.39 per diluted share) in the second quarter, primarily related to cost reduction actions taken in response to lower volumes resulting from economic slowdown in emerging markets and energy related end-markets. The cost reduction charges by segment are as follows: $67 million in South America; $34 million in North America; $25 million in Asia; $20 million in Europe; and $19 million in Surface Technologies.   PRAXAIR, INC. AND SUBSIDIARIES APPENDIX NON-GAAP MEASURES (Millions of dollars, except per share data) (UNAUDITED)   The following non-GAAP measures are intended to supplement investors’ understanding of the company’s financial information by providing measures which investors, financial analysts and management use to help evaluate the company’s financial leverage, return on capital and operating performance. Items which the company does not believe to be indicative of on-going business trends are excluded from these calculations so that investors can better evaluate and analyze historical and future business trends on a consistent basis. Definitions of these non-GAAP measures may not be comparable to similar definitions used by other companies and are not a substitute for similar GAAP measures. Adjusted amounts exclude the impacts of the 2016 first quarter bond redemption, 2015 third quarter cost reduction program and pension settlement, 2015 second quarter cost reduction program and other charges, and 2014 fourth quarter pension settlement, bond redemption and loss on Venezuela currency devaluation.    

2016

 

2015

  2014 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1  

Free Cash Flow (FCF) - Free cash flow is a measure used by investors, financial analysts and management to evaluate the ability of a company to pursue opportunities that enhance shareholder value. FCF equals cash flow from operations less capital expenditures.

  Operating cash flow   $ 547 $ 791 $ 676 $ 707 $ 508 $ 772 $ 713 $ 847 $ 536 Less: capital expenditures   (323 )   (387 )   (405 )   (352 )   (397 )   (482 )   (430 )   (384 )   (393 ) Free Cash Flow $ 224 $ 404 $ 271 $ 355 $ 111 $ 290 $ 283 $ 463 $ 143  

Debt-to-Capital Ratio - The debt-to-capital ratio is a measure used by investors, financial analysts and management to provide a measure of financial leverage and insights into how the company is financing its operations.

  Debt $ 9,404 $ 9,231 $ 9,480 $ 9,313 $ 9,360 $ 9,225 $ 9,090 $ 9,132 $ 9,236 Less: cash and cash equivalents   (221 )   (147 )   (136 )   (136 )   (117 )   (126 )   (168 )   (173 )   (144 ) Net debt 9,183 9,084 9,344 9,177 9,243 9,099 8,922 8,959 9,092 Equity and redeemable noncontrolling interests: Redeemable noncontrolling interests 119 113 169 175 170 176 190 194 195 Praxair, Inc. shareholders' equity 4,888 4,389 4,264 4,964 5,018 5,623 6,552 6,911 6,600 Noncontrolling interests   417     404     380     380     375     387     388     395     398   Total equity and redeemable noncontrolling interests   5,424     4,906     4,813     5,519     5,563     6,186     7,130     7,500     7,193   Capital $ 14,607 $ 13,990 $ 14,157 $ 14,696 $ 14,806 $ 15,285 $ 16,052 $ 16,459 $ 16,285   Debt-to-capital   62.9 %   64.9 %   66.0 %   62.4 %   62.4 %   59.5 %   55.6 %   54.4 %   55.8 %  

After-tax Return on Capital (ROC) - After-tax return on capital is a measure used by investors, financial analysts and management to evaluate the return on net assets employed in the business. ROC measures the after-tax operating profit that the company was able to generate with the investments made by all parties in the business (debt, noncontrolling interests and Praxair, Inc. shareholders’ equity).

  Adjusted operating profit (a) $ 554 $ 624 $ 620 $ 626 $ 623 $ 663 $ 711 $ 697 $ 675 Less: adjusted income taxes (a) (139 ) (163 ) (164 ) (164 ) (162 ) (161 ) (187 ) (183 ) (176 ) Less: tax benefit on adjusted interest expense (a) (14 ) (12 ) (10 ) (11 ) (12 ) (12 ) (13 ) (12 ) (13 ) Add: income from equity investments   10     12     10     10     11     12     11     10     9   Adjusted net operating profit after-tax (NOPAT) $ 411 $ 461 $ 456 $ 461 $ 460 $ 502 $ 522 $ 512 $ 495 4-quarter trailing adjusted NOPAT $ 1,789 $ 1,838 $ 1,879 $ 1,945 $ 1,996 $ 2,031 $ 2,035 $ 2,011 $ 1,990   Ending capital (see above) $ 14,607 $ 13,990 $ 14,157 $ 14,696 $ 14,806 $ 15,285 $ 16,052 $ 16,459 $ 16,285 5-quarter average ending capital $ 14,451 $ 14,587 $ 14,999 $ 15,460 $ 15,777 $ 16,007 $ 16,094 $ 15,987 $ 15,757   After-tax ROC (4-quarter trailing NOPAT / 5-quarter average capital)   12.4 %   12.6 %   12.5 %   12.6 %   12.7 %   12.7 %   12.6 %   12.6 %   12.6 %  

Return on Praxair, Inc. Shareholders' Equity (ROE) - Return on Praxair, Inc. shareholders' equity is a measure used by investors, financial analysts and management to evaluate operating performance from a Praxair shareholder perspective. ROE measures the net income attributable to Praxair, Inc. that the company was able to generate with the money shareholders have invested.

  Adjusted net income - Praxair, Inc. (a) $ 366 $ 422 $ 419 $ 420 $ 416 $ 460 $ 477 $ 467 $ 448 4-quarter trailing adjusted net income - Praxair, Inc. $ 1,627 $ 1,677 $ 1,715 $ 1,773 $ 1,820 $ 1,852 $ 1,854 $ 1,828 $ 1,806   Ending Praxair, Inc. shareholders' equity $ 4,888 $ 4,389 $ 4,264 $ 4,964 $ 5,018 $ 5,623 $ 6,552 $ 6,911 $ 6,600 5-quarter average Praxair shareholders' equity $ 4,705 $ 4,852 $ 5,284 $ 5,814 $ 6,141 $ 6,459 $ 6,576 $ 6,452 $ 6,303   ROE (4-quarter trailing adjusted net income - Praxair, Inc. / 5-quarter average Praxair shareholders' equity)   34.6 %   34.6 %   32.5 %   30.5 %   29.6 %   28.7 %   28.2 %   28.3 %   28.7 %  

Adjusted EBITDA, Adjusted EBITDA Margin and Debt-to-Adjusted EBITDA Ratio- These measures are used by investors, financial analysts and management to assess a company's ability to meet its financial obligations.

  Adjusted net income - Praxair, Inc. (a) $ 366 $ 422 $ 419 $ 420 $ 416 $ 460 $ 477 $ 467 $ 448 Add: adjusted noncontrolling interests (a) 10 9 12 12 12 11 13 14 14 Add: adjusted interest expense - net (a) 49 42 35 40 44 43 45 43 46 Add: adjusted income taxes (a) 139 163 164 164 162 161 187 183 176 Add: depreciation and amortization   272     275     276     278     277     291     301     293     285   Adjusted EBITDA $ 836 $ 911 $ 906 $ 914 $ 911 $ 966 $ 1,023 $ 1,000 $ 969   Reported sales $ 2,509 $ 2,595 $ 2,686 $ 2,738 $ 2,757 $ 2,990 $ 3,144 $ 3,113 $ 3,026 Adjusted EBITDA margin 33.3 % 35.1 % 33.7 % 33.4 % 33.0 % 32.3 % 32.5 % 32.1 % 32.0 %     Ending net debt (see above) $ 9,183 $ 9,084 $ 9,344 $ 9,177 $ 9,243 $ 9,099 $ 8,922 $ 8,959 $ 9,092 5-quarter average net debt $ 9,206 $ 9,189 $ 9,157 $ 9,080 $ 9,063 $ 8,943 $ 8,895 $ 8,904 $ 8,819 4-quarter trailing adjusted EBITDA $ 3,567 $ 3,642 $ 3,697 $ 3,814 $ 3,900 $ 3,958 $ 3,978 $ 3,923 $ 3,874   Debt-to-adjusted EBITDA ratio (5-quarter average net debt / 4-quarter trailing adjusted EBITDA)   2.6     2.5     2.5     2.4     2.3     2.3     2.2     2.3     2.3     (a)   The following table presents adjusted amounts for Operating Profit and Operating Profit Margin, Interest Expense - net, Income Taxes, Effective Tax Rate, Noncontrolling Interests, Net income - Praxair, Inc., and Diluted EPS for the periods presented. Additionally, this table presents cash income taxes and cash interest, net of interest capitalized and excluding the bond redemption costs for 2016 and 2014; and presents the percentage changes in Diluted EPS Guidance for the full year 2016 as compared to 2015 Diluted EPS on both a GAAP and adjusted basis. The adjusted percentages are based on Adjusted diluted EPS amounts, excluding estimated currency impacts.             First Quarter     Year     Third Quarter    

Second Quarter

    Year     Fourth Quarter 2016 2015 2015 2015 2014 2014

Adjusted Operating Profit and Operating Profit Margin

Reported operating profit $ 554 $ 2,321 $ 594 $ 480 $ 2,608 $ 525 Add: Cost reduction program and other charges - 165 19 146 - - Add: Pension settlement charge - 7 7 - 7 7 Add: Venezuela currency devaluation   -     -     -     -     131     131   Total adjustments   -     172     26     146     138     138   Adjusted operating profit $ 554   $ 2,493   $ 620   $ 626   $ 2,746   $ 663     Reported percentage change -11 % Adjusted percentage change -11 %   Reported sales $ 2,509 $ 10,776 $ 2,686 $ 2,738 $ 12,273 $ 2,990 Adjusted operating profit margin 22.1 % 23.1 % 23.1 % 22.9 % 22.4 % 22.2 %  

Adjusted Interest Expense - net

Reported interest expense - net $ 65 $ 161 $ 35 $ 40 $ 213 $ 79 Less: Bond redemption   (16 )   -     -     -     (36 )   (36 ) Adjusted interest expense - net $ 49   $ 161   $ 35   $ 40   $ 177   $ 43    

Adjusted Income Taxes

Reported income taxes $ 133 $ 612 $ 156 $ 131 $ 691 $ 145 Add: Cost reduction program and other charges - 39 6 33 - - Add: Bond redemption 6 - - - 14 14 Add: Income tax benefit - - - - - - Add: Pension settlement charge   -     2     2     -     2     2   Total adjustments   6     41     8     33     16     16   Adjusted income taxes $ 139   $ 653   $ 164   $ 164   $ 707   $ 161    

Adjusted Effective Tax Rate

Reported income before income taxes and equity investments $ 489 $ 2,160 $ 559 $ 440 $ 2,395 $ 446 Add: Cost reduction program and other charges - 165 19 146 - - Add: Bond redemption 16 - - - 36 36 Add: Pension settlement charge - 7 7 - 7 7 Add: Venezuela currency devaluation   -     -     -     -     131     131   Total adjustments   16     172     26     146     174     174   Adjusted income before income taxes and equity investments $ 505   $ 2,332   $ 585   $ 586   $ 2,569   $ 620     Adjusted income taxes (above) $ 139 $ 653 $ 164 $ 164 $ 707 $ 161 Adjusted effective tax rate 28 % 28 % 28 % 28 % 28 % 26 %  

Adjusted Noncontrolling Interests

Reported noncontrolling interests $ 10 $ 44 $ 12 $ 11 $ 52 $ 11 Add: Cost reduction program and other charges - 1 - 1 - - Less: Income tax benefit   -     -     -     -     -     -   Total adjustments   -     1     -     1     -     -   Adjusted noncontrolling interests $ 10   $ 45   $ 12   $ 12   $ 52   $ 11    

Adjusted Net Income - Praxair, Inc.

Reported net income - Praxair, Inc. $ 356 $ 1,547 $ 401 $ 308 $ 1,694 $ 302 Add: Cost reduction program and other charges - 125 13 112 - - Add: Bond redemption 10 - - - 22 22 Add: Pension settlement charge - 5 5 - 5 5 Add: Venezuela currency devaluation   -     -     -     -     131     131   Total adjustments   10     130     18     112     158     158   Adjusted net income - Praxair, Inc. $ 366   $ 1,677   $ 419   $ 420   $ 1,852   $ 460     Reported percentage change -14 % Adjusted percentage change -12 %  

Adjusted Diluted EPS

Reported diluted EPS $ 1.24 $ 5.35 $ 1.40 $ 1.06 $ 5.73 $ 1.03 Add: Cost reduction program and other charges - 0.43 0.04 0.39 - - Add: Bond redemption 0.04 - - - 0.07 0.07 Add: Pension settlement charge - 0.02 0.02 - 0.02 0.02 Add: Venezuela currency devaluation   -     -     -     -     0.45     0.45   Total adjustments   0.04     0.45     0.06     0.39     0.54     0.54   Adjusted diluted EPS $ 1.28   $ 5.80   $ 1.46   $ 1.45   $ 6.27   $ 1.57    

Cash Income Taxes and Interest

Income taxes paid $ 420 $ 606 Interest paid, net of interest capitalized and excluding bond redemption $ 174 $ 174  

Full-Year 2016 Diluted EPS Guidance*

Full Year 2016 Low End     High End   2016 adjusted diluted EPS guidance $ 5.35 $ 5.70 2015 adjusted diluted EPS (see above for full year amounts) $ 5.80 $ 5.80   Adjusted percentage change -8 % -2 % Adjusted percentage changes, excluding estimated currency impact -2 % 4 %   * Excludes a bond redemption charge recorded in the first quarter and the impact of a pension settlement charge expected to be recorded in the third quarter.  

View source version on businesswire.com: http://www.businesswire.com/news/home/20160429005134/en/

Praxair, Inc.InvestorsKelcey Hoyt, 203-837-2118kelcey_hoyt@praxair.comorMediaJason Stewart, 203-837-2448jason_stewart@praxair.com