10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2017

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from             to

PRAXAIR, INC.

(Exact name of registrant as specified in its charter)

DELAWARE

(State or other jurisdiction of incorporation)

1-11037	06-1249050
(Commission File Number)	(IRS Employer Identification No.)
10 Riverview Drive, DANBURY, CT	06810-5113
(Address of principal executive offices)	(Zip Code)

(203) 837-2000

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class: Registered on:

Common Stock ($0.01 par value) New York Stock Exchange

1.50% Euro notes due 2020 New York Stock Exchange

1.20% Euro notes due 2024 New York Stock Exchange

1.625% Euro notes due 2025 New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    YesýNo¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YesýNo¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	ý	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	¨
		Emerging growth company	¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.			¨

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes¨Noý

At March 31, 2017, 285,353,938 shares of common stock ($0.01 par value) of the Registrant were outstanding.

INDEX
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Statements of Income - Praxair, Inc. and Subsidiaries Quarters Ended March 31, 2017 and 2016 (Unaudited)	3
	Consolidated Statements of Comprehensive Income - Praxair, Inc. and Subsidiaries Quarters Ended March 31, 2017 and 2016 (Unaudited)	4
	Condensed Consolidated Balance Sheets - Praxair, Inc. and Subsidiaries March 31, 2017 and December 31, 2016 (Unaudited)	5
	Condensed Consolidated Statements of Cash Flows - Praxair, Inc. and Subsidiaries Three Months Ended March 31, 2017 and 2016 (Unaudited)	6
	Notes to Condensed Consolidated Financial Statements - Praxair, Inc. and Subsidiaries (Unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	44
Item 4.	Controls and Procedures	44
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	45
Item 1A.	Risk Factors	45
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	45
Item 3.	Defaults Upon Senior Securities	45
Item 4.	Mine Safety Disclosures	45
Item 5.	Other Information	45
Item 6.	Exhibits	46
Signature		47

PRAXAIR, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Millions of dollars, except per share data)

(UNAUDITED)

	Quarter Ended March 31,
	2017			2016
SALES	$	2,728		$	2,509
Cost of sales, exclusive of depreciation and amortization	1,545			1,381
Selling, general and administrative	279			274
Depreciation and amortization	287			272
Research and development	23			23
Transaction costs and other charges	6			—
Other income (expense) - net	(6		)	(5		)
OPERATING PROFIT	582			554
Interest expense - net	41			65
INCOME BEFORE INCOME TAXES AND EQUITY INVESTMENTS	541			489
Income taxes	149			133
INCOME BEFORE EQUITY INVESTMENTS	392			356
Income from equity investments	12			10
NET INCOME (INCLUDING NONCONTROLLING INTERESTS)	404			366
Less: noncontrolling interests	(15		)	(10		)
NET INCOME - PRAXAIR, INC.	$	389		$	356
PER SHARE DATA - PRAXAIR, INC. SHAREHOLDERS
Basic earnings per share	$	1.36		$	1.25
Diluted earnings per share	$	1.35		$	1.24
Cash dividends per share	$	0.7875		$	0.75
WEIGHTED AVERAGE SHARES OUTSTANDING (000’s):
Basic shares outstanding	285,509			285,429
Diluted shares outstanding	287,384			286,665

The accompanying notes are an integral part of these financial statements.

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PRAXAIR, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Millions of dollars)

(UNAUDITED)

	Quarter Ended March 31,
	2017			2016
NET INCOME (INCLUDING NONCONTROLLING INTERESTS)	$	404		$	366
OTHER COMPREHENSIVE INCOME (LOSS)
Translation adjustments:
Foreign currency translation adjustments	317			342
Income taxes	3			16
Translation adjustments	320			358
Funded status - retirement obligations (Note 11):
Retirement program remeasurements	(3		)	(5		)
Reclassifications to net income	4			14
Income taxes	(1		)	(5		)
Funded status - retirement obligations	—			4
Derivative instruments (Note 6):
Current quarter unrealized gain (loss)	(1		)	—
Reclassifications to net income	—			—
Income taxes	1			—
Derivative instruments	—			—
TOTAL OTHER COMPREHENSIVE INCOME (LOSS)	320			362
COMPREHENSIVE INCOME (LOSS) (INCLUDING NONCONTROLLING INTERESTS)	724			728
Less: noncontrolling interests	(20		)	(26		)
COMPREHENSIVE INCOME (LOSS) - PRAXAIR, INC.	$	704		$	702

The accompanying notes are an integral part of these financial statements.

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PRAXAIR, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Millions of dollars)

(UNAUDITED)

	March 31, 2017			December 31, 2016
ASSETS
Cash and cash equivalents	$	519		$	524
Accounts receivable - net	1,730			1,641
Inventories	561			550
Prepaid and other current assets	204			165
TOTAL CURRENT ASSETS	3,014			2,880
Property, plant and equipment (less accumulated depreciation of $12,842 in 2017 and $12,444 in 2016)	11,692			11,477
Goodwill	3,141			3,117
Other intangible assets - net	574			583
Other long-term assets	1,244			1,275
TOTAL ASSETS	$	19,665		$	19,332
LIABILITIES AND EQUITY
Accounts payable	$	860		$	906
Short-term debt	411			434
Current portion of long-term debt	10			164
Other current liabilities	968			974
TOTAL CURRENT LIABILITIES	2,249			2,478
Long-term debt	8,947			8,917
Other long-term liabilities	2,494			2,485
TOTAL LIABILITIES	13,690			13,880
Commitments and contingencies (Note 12)
Redeemable noncontrolling interests (Note 14)	10			11
Praxair, Inc. Shareholders’ Equity:
Common stock $0.01 par value, authorized - 800,000,000 shares, issued 2017 and 2016 - 383,230,625 shares	4			4
Additional paid-in capital	4,071			4,074
Retained earnings	13,041			12,879
Accumulated other comprehensive income (loss) (Note 14)	(4,285		)	(4,600		)
Less: Treasury stock, at cost (2017 - 97,876,687 shares and 2016 - 98,329,849 shares)	(7,302		)	(7,336		)
Total Praxair, Inc. Shareholders’ Equity	5,529			5,021
Noncontrolling interests	436			420
TOTAL EQUITY	5,965			5,441
TOTAL LIABILITIES AND EQUITY	$	19,665		$	19,332

The accompanying notes are an integral part of these financial statements.

5

PRAXAIR, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Millions of dollars)

(UNAUDITED)

	Three months ended March 31,
	2017			2016
OPERATIONS
Net income - Praxair, Inc.	$	389		$	356
Noncontrolling interests	15			10
Net income (including noncontrolling interests)	404			366
Adjustments to reconcile net income to net cash provided by operating activities:
Transaction costs and other charges	6			—
Depreciation and amortization	287			272
Deferred income taxes	22			9
Share-based compensation	12			8
Working capital:
Accounts receivable	(49		)	(20		)
Inventory	(2		)	(7		)
Prepaid and other current assets	(13		)	1
Payables and accruals	(42		)	(77		)
Pension contributions	(3		)	(2		)
Long-term assets, liabilities and other	88			3
Net cash provided by operating activities	710			553
INVESTING
Capital expenditures	(327		)	(323		)
Acquisitions, net of cash acquired	(1		)	(63		)
Divestitures and asset sales	4			2
Net cash used for investing activities	(324		)	(384		)
FINANCING
Short-term debt borrowings (repayments) - net	(24		)	(77		)
Long-term debt borrowings	7			898
Long-term debt repayments	(156		)	(726		)
Issuances of common stock	26			34
Purchases of common stock	(11		)	(32		)
Cash dividends - Praxair, Inc. shareholders	(225		)	(214		)
Noncontrolling interest transactions and other	(13		)	(2		)
Net cash provided by (used for) financing activities	(396		)	(119		)
Effect of exchange rate changes on cash and cash equivalents	5			24
Change in cash and cash equivalents	(5		)	74
Cash and cash equivalents, beginning-of-period	524			147
Cash and cash equivalents, end-of-period	$	519		$	221

The accompanying notes are an integral part of these financial statements.

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INDEX TO NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Notes to Condensed Consolidated Financial Statements - Praxair, Inc. and Subsidiaries (Unaudited)

Note 1. Summary of Significant Accounting Policies	8
Note 2. Transaction Costs and Other Charges	9
Note 3. Acquisitions	10
Note 4. Supplemental Information	10
Note 5. Debt	11
Note 6. Financial Instruments	12
Note 7. Fair Value Disclosures	15
Note 8. Earnings Per Share – Praxair, Inc. Shareholders	15
Note 9. Goodwill and Other Intangible Assets	16
Note 10. Share-Based Compensation	17
Note 11. Retirement Programs	18
Note 12. Commitments and Contingencies	19
Note 13. Segments	20
Note 14. Equity and Noncontrolling Interests	21

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PRAXAIR, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. Summary of Significant Accounting Policies

Presentation of Condensed Consolidated Financial Statements- In the opinion of Praxair, Inc. (Praxair) management, the accompanying condensed consolidated financial statements include all adjustments necessary for a fair presentation of the results for the interim periods presented and such adjustments are of a normal recurring nature. The accompanying condensed consolidated financial statements should be read in conjunction with the notes to the consolidated financial statements of Praxair, Inc. and subsidiaries in Praxair’s 2016 Annual Report on Form 10-K. There have been no material changes to the company’s significant accounting policies during 2017.

Accounting Standards Implemented in 2017

Simplifying the Measurement of Inventory – In July 2015, the FASB issued updated guidance on the measurement of inventory. The new guidance requires that inventory be measured at the lower of cost or net realizable value, previously inventory was measured at the lower of cost or market. The adoption of this guidance resulted in no material impact.

Accounting Standards to be Implemented

• Revenue Recognition – In May 2014, the FASB issued updated guidance on the reporting and disclosure of revenue. The new guidance requires the evaluation of contracts with customers to determine the recognition of revenue when or as the entity satisfies a performance obligation, and requires expanded disclosures. Subsequently, the FASB has issued amendments to certain aspects of the guidance including the effective date. This guidance is required to be effective beginning in the first quarter 2018 (with early adoption beginning in 2017 optional) and includes several transition options.

The Company is currently in the process of evaluating and implementing this new guidance, as required, and at this time expects to use the modified retrospective basis starting in 2018. Praxair will provide additional updates in future filings, as appropriate.

• Leases – In February 2016, the FASB issued updated guidance on the accounting and financial statement presentation of leases. The new guidance requires lessees to recognize a right-of-use asset and lease liability for all leases, except those that meet certain scope exceptions, and would require expanded quantitative and qualitative disclosures. This guidance will be effective for Praxair beginning in the first quarter 2019, with early adoption optional, and requires companies to transition using a modified retrospective approach. Praxair is in the early stages of reviewing the new guidance and will provide updates on the expected impact to Praxair in future filings, as 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.

• Classification of Certain Cash Receipts and Cash Payments – In August 2016, the FASB issued updated guidance on the classification of certain cash receipts and cash payments within the statement of cash flows. The update provides accounting guidance for specific cash flow issues with the objective of reducing diversity in practice. This new guidance will be effective for Praxair beginning in the first quarter 2018 on a retrospective basis, with early adoption optional. Praxair does not expect this requirement to have a material impact.

• Intra-Entity Asset Transfers – In October 2016, the FASB issued updated guidance for income tax accounting of intra-entity transfers of assets other than inventory. The update requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory in the period when the transfer occurs. This new guidance will be effective for Praxair beginning in the first quarter 2018, with early adoption permitted, and should be applied on a modified retrospective basis. We are currently evaluating the impact this update will have on our consolidated financial statements.

• Simplifying the Test for Goodwill Impairment – In January 2017, the FASB issued updated guidance on the measurement of goodwill. The new guidance eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge. The guidance will be effective for Praxair beginning in the

8

first quarter 2020 with early adoption permitted. Praxair does not expect this guidance to have a material impact.

• Pension Costs - In March 2017, the FASB issued updated guidance on the presentation of net periodic pension cost and net periodic postretirement benefit cost. The new guidance requires the service cost component be reported in the same line item or items as other compensation costs arising from services rendered by employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and not included within operating profit. This guidance will be effective for Praxair beginning in the first quarter 2018, with early adoption optional, and requires companies to transition using a retrospective approach for the presentation of the service cost component and the other cost components and prospectively for the capitalization of the service cost component. Praxair is currently evaluating the impact this update will have on our consolidated financial statements.

Reclassifications – Certain prior years’ amounts have been reclassified to conform to the current year’s presentation, including reclassifications to the condensed consolidated statement of cash flows due to the adoption of the share-based payment accounting standard adopted in the second quarter of 2016.

2. Transaction Costs and Other Charges

2017 Transaction Costs

In the first quarter of 2017, Praxair incurred transaction costs in connection with the intended business combination with Linde AG ("Linde") totaling $6 million after-tax ($0.02 per diluted share).

Classification in the condensed consolidated financial statements

The costs are shown within operating profit in a separate line item on the consolidated statements of income. On the condensed consolidated statement of cash flows, the impact of these costs, net of cash payments, is shown as an adjustment to reconcile net income to net cash provided by operating activities. In Note 13 - Segments, Praxair excluded these costs from its management definition of segment operating profit; a reconciliation of segments operating profit to consolidated operating profit is shown within the segment operating profit table.

2016 and 2015 Cost Reduction Programs and Other Charges

In the third quarter of 2016, Praxair recorded pre-tax charges totaling $96 million ($63 million after-tax and noncontrolling interests or $0.22 per diluted share). In the second quarter of 2015, Praxair recorded pre-tax charges totaling $146 million ($112 million after-tax and noncontrolling interests, or $0.39 per diluted share) and in the third quarter recorded pre-tax charges totaling $19 million ($13 million after-tax or $0.04 per diluted share).

Reconciliation

The following table summarizes the activities related to the company's cost reduction programs for the three months ended March 31, 2017:

(millions of dollars)	Severance costs			Other Charges			Total
Balance, January 1, 2017	$	38		$	27		$	65
Less: Cash payments	(8		)	(1		)	(9		)
Less: Non-cash charges	—			—			—
Foreign currency translation	—			—			—
Balance, March 31, 2017	$	30		$	26		$	56

2016 Bond Redemption Charge

In February 2016, Praxair redeemed $325 million of 5.20% notes due March 2017 resulting in a $16 million interest charge ($10 million after-tax, or $0.04 per diluted share).

9

For further details regarding the cost reduction program and other charges, refer to Note 2 to the consolidated financial statements of Praxair's 2016 Annual Report on Form 10-K.

3. Acquisitions

2016 Acquisitions

During the three months ended March 31, 2016, Praxair had acquisitions totaling $63 million, primarily acquisitions of packaged gases businesses in North America and Europe. These transactions resulted in goodwill and other intangible assets of $34 million and $15 million, respectively.

4. Supplemental Information

Inventories

The following is a summary of Praxair’s consolidated inventories:

(Millions of dollars)	March 31, 2017		December 31, 2016
Inventories
Raw materials and supplies	$	196	$	197
Work in process	47		45
Finished goods	318		308
Total inventories	$	561	$	550

Long-term receivables

Long-term receivables are not material and are largely reserved. Such long-term receivables are included within other long-term assets in the condensed consolidated balance sheets and totaled $45 million and $46 million at March 31, 2017 and December 31, 2016, respectively. These amounts are net of reserves of $52 million and $50 million, respectively. The amounts in both periods relate primarily to government receivables in Brazil and other long-term notes receivable from customers. Collectability is reviewed regularly and uncollectible amounts are written off as appropriate.

10

5. Debt

The following is a summary of Praxair’s outstanding debt at March 31, 2017 and December 31, 2016:

(Millions of dollars)	March 31, 2017			December 31, 2016
SHORT-TERM
Commercial paper and U.S. bank borrowings	$	360		$	333
Other bank borrowings (primarily international)	51			101
Total short-term debt	411			434
LONG-TERM (a)
U.S. borrowings (U.S. dollar denominated unless otherwise noted)
Floating Rate Notes due 2017 (b)	—			150
1.05% Notes due 2017 (c)	400			400
1.20% Notes due 2018 (c)	499			499
1.25% Notes due 2018 (d)	477			478
4.50% Notes due 2019	598			598
1.90% Notes due 2019	499			499
1.50% Euro-denominated notes due 2020	635			627
2.25% Notes due 2020	299			299
4.05% Notes due 2021	498			497
3.00% Notes due 2021	497			496
2.45% Notes due 2022	597			597
2.20% Notes due 2022	498			498
2.70% Notes due 2023	497			497
1.20% Euro-denominated notes due 2024	583			575
2.65% Notes due 2025	397			397
1.625% Euro-denominated notes due 2025	525			519
3.20% Notes due 2026	725			725
3.55% Notes due 2042	662			662
Other	12			12
International bank borrowings	55			49
Obligations under capital leases	4			7
	8,957			9,081
Less: current portion of long-term debt (b)	(10		)	(164		)
Total long-term debt	8,947			8,917
Total debt	$	9,368		$	9,515

(a) Amounts are net of unamortized discounts, premiums and/or debt issuance costs as applicable.

(b) In February 2017, Praxair repaid $150 million of floating rate notes that became due.

(c) Classified as long-term because of the company’s intent to refinance this debt on a long-term basis and the availability of such financing under the terms of an existing $2.5 billion long-term credit facility.

(d) March 31, 2017 and December 31, 2016 include a $2 million and $4 million fair value increase, respectively, related to hedge accounting. See Note 6 for additional information.

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6. Financial Instruments

In its normal operations, Praxair is exposed to market risks relating to fluctuations in interest rates, foreign currency exchange rates, energy costs and to a lesser extent precious metal prices. The objective of financial risk management at Praxair is to minimize the negative impact of such fluctuations on the company’s earnings and cash flows. To manage these risks, among other strategies, Praxair routinely enters into various derivative financial instruments (“derivatives”) including interest-rate swap and treasury rate lock agreements, currency-swap agreements, forward contracts, currency options, and commodity-swap agreements. These instruments are not entered into for trading purposes and Praxair only uses commonly traded and non-leveraged instruments.

There are three types of derivatives that the company enters into: (i) those relating to fair-value exposures, (ii) those relating to cash-flow exposures, and (iii) those relating to foreign currency net investment exposures. Fair-value exposures relate to recognized assets or liabilities, and firm commitments; cash-flow exposures relate to the variability of future cash flows associated with recognized assets or liabilities, or forecasted transactions; and net investment exposures relate to the impact of foreign currency exchange rate changes on the carrying value of net assets denominated in foreign currencies.

When a derivative is executed and hedge accounting is appropriate, it is designated as either a fair-value hedge, cash-flow hedge, or a net investment hedge. Currently, Praxair designates all interest-rate and treasury-rate locks as hedges for accounting purposes; however, currency contracts are generally not designated as hedges for accounting purposes unless they are related to forecasted transactions. Whether designated as hedges for accounting purposes or not, all derivatives are linked to an appropriate underlying exposure. On an ongoing basis, the company assesses the hedge effectiveness of all derivatives designated as hedges for accounting purposes to determine if they continue to be highly effective in offsetting changes in fair values or cash flows of the underlying hedged items. If it is determined that the hedge is not highly effective, then hedge accounting will be discontinued prospectively.

Counterparties to Praxair’s derivatives are major banking institutions with credit ratings of investment grade or better and no collateral is required, and there are no significant risk concentrations. Management believes the risk of incurring losses on derivative contracts related to credit risk is remote and any losses would be immaterial.

The following table is a summary of the notional amount and fair value of derivatives outstanding at March 31, 2017 and December 31, 2016 for consolidated subsidiaries:

					Fair Value
	Notional Amounts				Assets				Liabilities
(Millions of dollars)	March 31, 2017		December 31, 2016		March 31, 2017		December 31, 2016		March 31, 2017		December 31, 2016
Derivatives Not Designated as Hedging Instruments:
Currency contracts:
Balance sheet items (a)	$	2,196	$	2,104	$	35	$	11	$	7	$	18
Derivatives Designated as Hedging Instruments:
Currency contracts:
Balance sheet items (a)	$	38	$	38	$	1	$	3	$	—	$	—
Forecasted purchases (a)	12		—		—		—		—		—
Interest rate contracts:
Interest rate swaps (b)	475		475		2		4		—		—
Total Hedges	$	525	$	513	$	3	$	7	$	—	$	—
Total Derivatives	$	2,721	$	2,617	$	38	$	18	$	7	$	18

(a) Assets are recorded in prepaid and other current assets, and liabilities are recorded in other current liabilities.

(b) Assets are recorded in other long term assets.

Currency Contracts

Balance Sheet Items

Foreign currency contracts related to balance sheet items consist of forward contracts entered into to manage the exposure to fluctuations in foreign-currency exchange rates on recorded balance sheet assets and liabilities denominated in currencies other than the functional currency of the related operating unit. Certain forward currency contracts are entered into to protect underlying monetary assets and liabilities denominated in foreign currencies from foreign exchange risk and are not designated

12

as hedging instruments. The fair value adjustments on these contracts are offset by the fair value adjustments recorded on the underlying monetary assets and liabilities. Praxair also enters into forward currency contracts, which are designated as hedging instruments, to limit the cash flow exposure on certain foreign-currency denominated intercompany loans. The fair value adjustments on these contracts are recorded to AOCI, with the effective portion immediately reclassified to earnings to offset the fair value adjustments on the underlying debt instrument.

Forecasted Purchases

Foreign currency contracts related to forecasted purchases consist of forward contracts entered into to manage the exposure to fluctuations in foreign-currency exchange rates on forecasted purchases of capital-related equipment and services denominated in currencies other than the functional currency of the related operating units. These forward contracts were designated and accounted for as cash flow hedges.

Net Investment Hedge

In 2014 Praxair designated the €600 million ($635 million as of March 31, 2017) 1.50% Euro-denominated notes due 2020 and the €500 million ($525 million as of March 31, 2017) 1.625% Euro-denominated notes due 2025, as a hedge of the net investment position in its European operations. In 2016 Praxair designated an incremental €550 million ($583 million as of March 31, 2017) 1.20% Euro-denominated notes due 2024 as an additional hedge of the net investment position in its European operations. These Euro-denominated debt instruments reduce the company's exposure to changes in the currency exchange rate on investments in foreign subsidiaries with Euro functional currencies. Since hedge inception, exchange rate movements have reduced long-term debt by $317 million (long-term debt increased by $22 million during the first quarter of 2017), with the offsetting gain shown within the cumulative translation component of AOCI in the condensed consolidated balance sheets and the consolidated statements of comprehensive income.

Interest Rate Contracts

Outstanding Interest Rate Swaps

At March 31, 2017, Praxair had one outstanding interest rate swap agreement with a $475 million notional amount related to the $475 million1.25% notes that mature in 2018. The interest rate swap effectively converts fixed-rate interest to variable-rate interest and is designated as a fair value hedge. Fair value adjustments are recognized in earnings along with an equally offsetting charge / benefit to earnings for the changes in the fair value of the underlying debt instrument. At March 31, 2017, $2 million was recognized as an increase in the fair value of these notes ($4 million at December 31, 2016).

Terminated Treasury Rate Locks

The following table summarizes the unrecognized gains (losses) related to terminated treasury rate lock contracts:

	Year Terminated	Original Gain / (Loss)			Unrecognized Gain / (Loss) (a)
(Millions of dollars)					March 31, 2017			December 31, 2016
Treasury Rate Locks
Underlying debt instrument:
$500 million 2.20% fixed-rate notes that mature in 2022 (b)	2012	$	(2	)	$	(1	)	$	(1	)
$500 million 3.00% fixed-rate notes that mature in 2021 (b)	2011	(11		)	(5		)	(5		)
$600 million 4.50% fixed-rate notes that mature in 2019 (b)	2009	16			4			4
Total - pre-tax					$	(2	)	$	(2	)
Less: income taxes					1			1
After- tax amounts					$	(1	)	$	(1	)

(a) The unrecognized gains / (losses) for the treasury rate locks are shown in accumulated other comprehensive income (“AOCI”) and are being recognized on a straight line basis to interest expense – net over the term of the underlying debt agreements. Refer to the table below summarizing the impact 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 million4.50% fixed-rate notes that mature in 2019. The notional amount of this contract was $500 million.

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The following table summarizes the impact of the company’s derivatives on the consolidated statements of income:

	Amount of Pre-Tax Gain (Loss) Recognized in Earnings *
	Quarter Ended March 31,
(Millions of dollars)	2017		2016
Derivatives Not Designated as Hedging Instruments
Currency contracts:
Balance sheet items
Debt-related	$	79	$	67
Other balance sheet items	1		2
Total	$	80	$	69

* The gains (losses) on balance sheet items are offset by gains (losses) recorded on the underlying hedged assets and liabilities. Accordingly, the gains (losses) for the derivatives and the underlying hedged assets and liabilities related to debt items are recorded in the consolidated statements of income as interest expense-net. Other balance sheet items and anticipated net income gains (losses) are recorded in the consolidated statements of income as other income (expenses)-net.

The following tables summarize the impacts of the company's derivatives designated as hedging instruments that impact AOCI:

Derivatives Designated as Hedging Instruments **

	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, 2017			March 31, 2016			March 31, 2017		March 31, 2016
Currency contracts:
Balance sheet items	$	(1	)	$	—		$	—	$	—
Net Investment Hedge	—			(4		)	—		—
Interest rate contracts:
Treasury rate lock contracts	—			—			—		—
Total - pre tax	$	(1	)	$	(4	)	$	—	$	—
Less: income taxes	1			1			—		—
Total - Net of Taxes	$	—		$	(3	)	$	—	$	—

**The gains (losses) on net investment hedges are recorded as a component of AOCI within foreign currency translation adjustments in the condensed consolidated balance sheets and the condensed consolidated statements of comprehensive income. The gains (losses) on treasury rate locks are recorded as a component of AOCI within derivative instruments in the condensed consolidated balance sheets and the condensed consolidated statements of comprehensive income. There was no ineffectiveness for these instruments during 2017 or 2016. The gains (losses) on net investment hedges are reclassified to earnings only when the related currency translation adjustments are required to be reclassified, usually upon sale or liquidation of the investment. The gains (losses) for interest rate contracts are reclassified to earnings as interest expense –net on a straight-line basis over the remaining maturity of the underlying debt. Net losses of approximately $1 million are expected to be reclassified to earnings during the next twelve months.

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7. Fair Value Disclosures

The fair value hierarchy prioritizes the input to valuation techniques used to measure fair value into three broad levels as follows:

Level 1 – quoted prices in active markets for identical assets or liabilities

Level 2 – quoted prices for similar assets and liabilities in active markets or inputs that are observable

Level 3 – inputs that are unobservable (for example cash flow modeling inputs based on assumptions)

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table summarizes assets and liabilities measured at fair value on a recurring basis:

	Fair Value Measurements Using
	Level 1		Level 2				Level 3
(Millions of dollars)	March 31, 2017	December 31, 2016	March 31, 2017		December 31, 2016		March 31, 2017	December 31, 2016
Assets
Derivatives	—	—	$	38	$	18	—	—
Liabilities
Derivatives	—	—	$	7	$	18	—	—

The fair values of the derivative assets and liabilities are based on market prices obtained from independent brokers or determined using quantitative models that use as their basis readily observable market parameters that are actively quoted and can be validated through external sources, including third-party pricing services, brokers and market transactions. Investments are marketable securities traded on an exchange.

The fair values of cash and cash equivalents, short-term debt, accounts receivable-net, and accounts payable approximate carrying amounts because of the short maturities of these instruments. The fair value of long-term debt is estimated based on the quoted market prices for similar issues, which is deemed a level 2 measurement. At March 31, 2017, the estimated fair value of Praxair’s long-term debt portfolio was $9,133 million versus a carrying value of $8,957 million. At December 31, 2016, the estimated fair value of Praxair’s long-term debt portfolio was $9,218 million versus a carrying value of $9,081 million. Differences from carrying amounts are attributable to interest-rate changes subsequent to when the debt was issued.

8. Earnings Per Share – Praxair, Inc. Shareholders

Basic earnings per share is computed by dividing Net income – Praxair, Inc. for the period by the weighted average number of Praxair common shares outstanding. Diluted earnings per share is computed by dividing Net income – Praxair, Inc. for the period by the weighted average number of Praxair common shares outstanding and dilutive common stock equivalents, as follows:

	Quarter Ended March 31,
	2017		2016
Numerator (Millions of dollars)
Net income - Praxair, Inc.	$	389	$	356
Denominator (Thousands of shares)
Weighted average shares outstanding	285,140		285,049
Shares earned and issuable under compensation plans	369		380
Weighted average shares used in basic earnings per share	285,509		285,429
Effect of dilutive securities
Stock options and awards	1,875		1,236
Weighted average shares used in diluted earnings per share	287,384		286,665
Basic Earnings Per Share	$	1.36	$	1.25
Diluted Earnings Per Share	$	1.35	$	1.24

Stock options of 4,673,805 and 5,236,570 were antidilutive and therefore excluded in the computation of diluted earnings per share for the quarters ended March 31, 2017 and 2016, respectively.

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9. Goodwill and Other Intangible Assets

Changes in the carrying amount of goodwill for the three months ended March 31, 2017 were as follows:

(Millions of dollars)	North America		South America		Europe		Asia		Surface Technologies		Total
Balance, December 31, 2016	$	2,165	$	132	$	629	$	58	$	133	$	3,117
Acquisitions	—		—		—		—		—		—
Purchase adjustments & other	—		—		—		—		—		—
Foreign currency translation	9		5		7		1		2		24
Balance, March 31, 2017	$	2,174	$	137	$	636	$	59	$	135	$	3,141

Praxair has performed its goodwill impairment tests annually during the second quarter of each year, and historically has determined that the fair value of each of its reporting units was substantially in excess of its carrying value (refer to Note 1 to the consolidated financial statements of Praxair's 2016 Annual Report on Form 10-K). As a result, no impairment was recorded. There were no indicators of impairment through March 31, 2017.

Changes in the carrying amounts of other intangibles for the three months ended March 31, 2017 were as follows:

(Millions of dollars)	Customer & License/Use Agreements			Non-compete Agreements			Patents & Other			Total
Cost:
Balance, December 31, 2016	$	751		$	34		$	51		$	836
Additions	1			—			—			1
Foreign currency translation	6			—			—			6
Other*	—			(8		)	—			(8		)
Balance, March 31, 2017	$	758		$	26		$	51		$	835
Less: Accumulated amortization
Balance, December 31, 2016	$	(214	)	$	(22	)	$	(17	)	$	(253	)
Amortization expense	(10		)	(1		)	(1		)	(12		)
Foreign currency translation	(3		)	—			—			(3		)
Other*	(1		)	8			—			7
Balance, March 31, 2017	$	(228	)	$	(15	)	$	(18	)	$	(261	)
Net balance at March 31, 2017	$	530		$	11		$	33		$	574

* Other primarily relates to write-off of fully amortized assets.

There are no expected residual values related to these intangible assets. The remaining weighted-average amortization period for intangible assets is approximately 17 years.

Total estimated annual amortization expense is as follows:

(Millions of dollars)
Remaining 2017	$	33
2018	44
2019	41
2020	40
2021	38
Thereafter	378
	$	574

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10. Share-Based Compensation

Share-based compensation of $12 million ($4 million after-tax) and $8 million ($6 million after-tax) was recognized during the quarters ended March 31, 2017 and 2016, respectively. Expense amounts reflect current estimates of achieving performance targets relating to performance-based compensation. The expense was recorded primarily in selling, general and administrative expenses. There was no share-based compensation cost that was capitalized. For further details regarding Praxair’s share-based compensation arrangements and prior-year grants, refer to Note 15 to the consolidated financial statements of Praxair’s 2016 Annual Report on Form 10-K.

Stock Options

The weighted-average fair value of options granted during the three months ended March 31, 2017 was $12.40 ($8.91 in 2016) based on the Black-Scholes Options-Pricing model. The increase in grant date fair value year-over-year was primarily attributable to an increase in the company's stock price.

The following weighted-average assumptions were used to value the grants in 2017 and 2016:

	Three months ended March 31,
	2017		2016
Dividend yield	2.7	%	2.9	%
Volatility	14.0	%	14.4	%
Risk-free interest rate	2.13	%	1.41	%
Expected term years	6		6

The following table summarizes option activity under the plans as of March 31, 2017 and changes during the three-month period then ended (averages are calculated on a weighted basis; life in years; intrinsic value expressed in millions):

	Number of Options  (000’s)		Average Exercise Price		Average Remaining Life	Aggregate Intrinsic Value
Outstanding at January 1, 2017	11,708		$	101.58
Granted	2,090		118.71
Exercised	(414	)	73.94
Cancelled or Expired	(47	)	110.58
Outstanding at March 31, 2017	13,337		105.09		6.1	$	206
Exercisable at March 31, 2017	9,224		$	101.31	4.8	$	181

The aggregate intrinsic value represents the difference between the company’s closing stock price of $118.60 as of March 31, 2017 and the exercise price multiplied by the number of in the money options outstanding as of that date. The total intrinsic value of stock options exercised during the quarter ended March 31, 2017 was $18 million ($23 million during the same period in 2016).

Cash received from option exercises under all share-based payment arrangements for the quarter ended March 31, 2017 was $19 million ($31 million for the same period in 2016). The cash tax benefit realized from share-based compensation totaled $8 million for the quarter ended March 31, 2017 ($13 million for the same period in 2016 ).

As of March 31, 2017, $36 million of unrecognized compensation cost related to non-vested stock options is expected to be recognized over a weighted-average period of approximately 1 year.

Performance-Based and Restricted Stock Awards

During the three months endedMarch 31, 2017, the company granted performance-based stock awards to employees of223,630 shares that vest, subject to the attainment of pre-established minimum performance criteria, principally on the third anniversary of their date of grant. These awards are tied to either return on capital ("ROC") performance or relative total shareholder return ("TSR") performance versus that of the S&P 500. The actual number of shares issued in settlement of a vested award can range from zero to 200 percent of the target number of shares granted based upon the company’s attainment of specified performance targets at the end of a three-year period. Compensation expense related to these awards is recognized over the three-year performance period based on the fair value of the closing market price of the company’s common stock on the date of the grant and the estimated performance that will be achieved. Compensation expense for ROC awards will be

17

adjusted during the three-year performance period based upon the estimated performance levels that will be achieved. TSR awards are measured at their grant date fair value and not subsequently re-measured.

During the three months endedMarch 31, 2017, the company also granted restricted stock units to employees of 70,884 shares. The majority of the restricted stock units vest at the end of a three-year service period. Compensation expense related to the restricted stock units is recognized on a straight line basis over the vesting period.

The weighted-average fair value of ROC performance-based stock awards and restricted stock units granted during the three months endedMarch 31, 2017 was $109.68 and $109.64, respectively ($93.46 and $93.50 for the same period in 2016). These fair values are based on the closing market price of Praxair’s common stock on the grant date adjusted for dividends that will not be paid during the vesting period.

The weighted-average fair value of performance-based stock tied to relative TSR performance granted during the three months ended March 31, 2017 was $124.12 ($124.18 in 2016), and was estimated using a Monte Carlo simulation performed as of the grant date.

The following table summarizes non-vested performance-based and restricted stock award activity as of March 31, 2017 and changes during the three months then ended (shares based on target amounts, averages are calculated on a weighted basis):

	Performance-Based				Restricted Stock
	Number  of Shares (000’s)		Average Grant  Date Fair Value		Number  of Shares (000’s)		Average Grant  Date Fair Value
Non-vested at January 1, 2017	714		$	115.72	274		$	109.49
Granted	224		114.82		71		109.64
Vested	(76	)	121.16		(62	)	121.15
Cancelled and Forfeited	(56	)	115.66		(3	)	109.50
Non-vested at March 31, 2017	806		$	114.62	280		$	106.96

There are approximately 11 thousand performance-based shares and 6 thousand restricted stock shares that are non-vested at March 31, 2017 which will be settled in cash due to foreign regulatory limitations. The liability related to these grants reflects the current estimate of performance that will be achieved and the current common stock price.

As of March 31, 2017, based on current estimates of future performance, $37 million of unrecognized compensation cost related to performance-based awards is expected to be recognized through the first quarter of 2020 and $16 million of unrecognized compensation cost related to the restricted stock awards is expected to be recognized primarily through the first quarter of 2020.

11. Retirement Programs

The components of net pension and postretirement benefits other than pensions (“OPEB”) costs for the quarters ended March 31, 2017 and 2016 are shown below:

	Quarter Ended March 31,
	Pensions						OPEB
(Millions of dollars)	2017			2016			2017			2016
Service cost	$	11		$	12		$	1		$	1
Interest cost	26			24			1			1
Expected return on plan assets	(40		)	(39		)	—			—
Net amortization and deferral	17			15			(1		)	(1		)
Curtailment gain (1)	—			—			(18		)	—
Net periodic benefit cost	$	14		$	12		$	(17	)	$	1

(1) The curtailment gain recorded in the first quarter of 2017 resulted from the termination of an OPEB plan in South America.

Praxair estimates that 2017 required contributions to its pension plans will be in the range of $10 million to $15 million, of which $3 million have been made through March 31, 2017.

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12. Commitments and Contingencies

Contingent Liabilities

Praxair is subject to various lawsuits and government investigations that arise from time to time in the ordinary course of business. These actions are based upon alleged environmental, tax, antitrust and personal injury claims, among others. Praxair has strong defenses in these cases and intends to defend itself vigorously. It is possible that the company may incur losses in connection with some of these actions in excess of accrued liabilities. Management does not anticipate that in the aggregate such losses would have a material adverse effect on the company’s consolidated financial position or liquidity; however, it is possible that the final outcomes could have a significant impact on the company’s reported results of operations in any given period (see Note 17 to the consolidated financial statements of Praxair’s 2016 Annual Report on Form 10-K).

Significant matters are:

• During May 2009, the Brazilian government published Law 11941/2009 instituting a new voluntary amnesty program (“Refis Program”) which allowed Brazilian companies to settle certain federal tax disputes at reduced amounts. During the 2009 third quarter, Praxair decided that it was economically beneficial to settle many of its outstanding federal tax disputes and such disputes were enrolled in the Refis Program, subject to final calculation and review by the Brazilian federal government. The Company recorded estimated liabilities based on the terms of the Refis Program. Since 2009, Praxair has been unable to reach final agreement on the calculations and recently initiated litigation against the government in an attempt to resolve certain items. Open issues relate to the following matters: (i) application of cash deposits and net operating loss carryforwards to satisfy obligations, and (ii) the amount of tax reductions available under the Refis Program. It is difficult to estimate the timing of resolution of legal matters in Brazil.

• At March 31, 2017 the most significant non-income and income tax claims in Brazil, after enrollment in the Refis Program, relate to state VAT tax matters and a federal income tax matter where the taxing authorities are challenging the tax rate that should be applied to income generated by a subsidiary company. The total estimated exposure relating to such claims, including interest and penalties, as appropriate, is approximately $235 million. Praxair has not recorded any liabilities related to such claims based on management judgments, after considering judgments and opinions of outside counsel. Because litigation in Brazil historically takes many years to resolve, it is very difficult to estimate the timing of resolution of these matters; however, it is possible that certain of these matters may be resolved within the near term. The company is vigorously defending against the proceedings.

• On September 1, 2010, CADE (Brazilian Administrative Council for Economic Defense) announced alleged anticompetitive activity on the part of five industrial gas companies in Brazil and imposed fines on all five companies. Originally, CADE imposed a civil fine of R$2.2 billion Brazilian reais (US$694 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$537 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.

On October 19, 2010, White Martins filed an annulment petition (“appeal”) with the Federal Court in Brasilia seeking to have the fine against White Martins entirely overturned. In order to suspend payment of the fine pending the completion of the appeal process, Brazilian law required that the company tender a form of guarantee in the amount of the fine as security. Initially, 50% of the guarantee was satisfied by letters of credit with a financial institution and 50% by equity of a Brazilian subsidiary. On April 15, 2016, the Ninth Federal Court in Brasilia allowed White Martins to withdraw and cancel the letters of credit. Accordingly, the guarantee is currently satisfied solely by equity of a Brazilian subsidiary.

On September 14, 2015, the Ninth Federal Court of Brasilia overturned the fine against White Martins and declared the original CADE administrative proceeding to be null and void. On June 30, 2016, CADE filed an appeal against this decision with the Federal Circuit Court in Brasilia.

Praxair strongly believes that the allegations are without merit and that the fine will be entirely overturned during the appeal process. The company further believes that it has strong defenses and will vigorously defend against the allegations and related fine up to such levels of the Federal Courts in Brazil as may be necessary. Because appeals in Brazil historically take many years to resolve, it is very difficult to estimate when the appeal will be finally decided. Based on management judgments, after considering judgments and opinions of outside counsel, no reserve has been recorded for this proceeding as management does not believe that a loss is probable.

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13. Segments

Sales and operating profit by segment for the quarters ended March 31, 2017 and 2016 are shown below. For a description of Praxair’s operating segments, refer to Note 18 to the consolidated financial statements of Praxair’s 2016 Annual Report on Form 10-K.

	Quarter Ended March 31,
(Millions of dollars)	2017		2016
SALES(a)
North America	$	1,458	$	1,353
Europe	356		320
South America	369		311
Asia	395		376
Surface Technologies	150		149
Total sales	$	2,728	$	2,509

	Quarter Ended March 31,
(Millions of dollars)	2017			2016
OPERATING PROFIT
North America	$	357		$	349
Europe	66			62
South America	64			55
Asia	75			63
Surface Technologies	26			25
Segment operating profit	588			554
Transaction costs and other charges (Note 2)	(6		)	—
Total operating profit	$	582		$	554

(a) Sales reflect external sales only. Intersegment sales, primarily from North America to other segments, were not material.

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14. Equity and Redeemable Noncontrolling Interests

Equity

A summary of the changes in total equity for the quarters ended March 31, 2017 and 2016 is provided below:

	Quarter Ended March 31,
(Millions of dollars)	2017									2016
Activity	Praxair, Inc. Shareholders’ Equity			Noncontrolling Interests			Total Equity			Praxair, Inc. Shareholders’ Equity			Noncontrolling Interests			Total Equity
Balance, beginning of period	$	5,021		$	420		$	5,441		$	4,389		$	404		$	4,793
Net income (a)	389			15			404			356			8			364
Other comprehensive income (loss)	315			5			320			346			10			356
Noncontrolling interests:
Additions (reductions)	—			—			—			—			—			—
Dividends and other capital changes	—			(4		)	(4		)	—			(5		)	(5		)
Redemption value adjustments	—			—			—			—			—			—
Dividends to Praxair, Inc. common stock holders ($0.7875 per share in 2017 and $0.75 per share in 2016)	(225		)	—			(225		)	(214		)	—			(214		)
Issuances of common stock:
For the dividend reinvestment and stock purchase plan	2			—			2			2			—			2
For employee savings and incentive plans	15			—			15			27			—			27
Purchases of common stock	—			—			—			(32		)	—			(32		)
Tax benefit from share-based compensation	—			—			—			6			—			6
Share-based compensation	12			—			12			8			—			8
Balance, end of period	$	5,529		$	436		$	5,965		$	4,888		$	417		$	5,305

(a) Net income for noncontrolling interests excludes Net income related to redeemable noncontrolling interests, which is not part of total equity (see redeemable noncontrolling interests section below). For the quarter ended March 31,2017 net income was insignificant ($2 million for the same time period in 2016).

The components of AOCI are as follows:

	March 31,			December 31,
(Millions of dollars)	2017			2016
Cumulative translation adjustment - net of taxes:
North America	$	(926	)	$	(1,038	)
South America	(1,904		)	(1,969		)
Europe	(474		)	(504		)
Asia	(281		)	(383		)
Surface Technologies	(46		)	(52		)
	(3,631		)	(3,946		)
Derivatives - net of taxes	(1		)	(1		)
Pension / OPEB funded status obligation (net of $351 million and $352 million tax benefit at March 31, 2017 and December 31, 2016, respectively)	(653		)	(653		)
	$	(4,285	)	$	(4,600	)

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Redeemable Noncontrolling Interests

Noncontrolling interests with redemption features, such as put/sell options, that are not solely within the Company’s control (“redeemable noncontrolling interests”) are reported separately in the consolidated balance sheets at the greater of carrying value or redemption value. For redeemable noncontrolling interests that are not yet exercisable, Praxair calculates the redemption value by accreting the carrying value to the redemption value over the period until exercisable. If the redemption value is greater than the carrying value, any increase is adjusted directly to equity and does not impact net income.

At March 31, 2017, redeemable noncontrolling interests includes one packaged gas distributor in the United States where the noncontrolling shareholder has a put option. At March 31, 2016, redeemable noncontrolling interests also included Yara Praxair Holding AS, a 66%-owned joint venture in Scandinavia. On June 1, 2016, Praxair acquired the remaining 34% stake in this joint venture for $104 million.

The following is a summary of the changes in redeemable noncontrolling interests for the three months ended March 31, 2017 and 2016:

(Millions of dollars)	2017			2016
Balance, January 1	$	11		$	113
Net income	—			2
Distributions to noncontrolling interest and other	(1		)	(2		)
Redemption value adjustments/accretion	—			—
Foreign currency translation	—			6
Purchase of noncontrolling interest	—			—
Balance, March 31	$	10		$	119

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following table provides summary data for the three months ended March 31, 2017 and 2016:

	Quarter Ended March 31,
(Dollar amounts in millions, except per share data)	2017			2016			Variance
Reported Amounts
Sales	$	2,728		$	2,509		9	%
Cost of sales, exclusive of depreciation and amortization	$	1,545		$	1,381		12	%
Gross margin (a)	$	1,183		$	1,128		5	%
As a percent of sales	43.4		%	45.0		%
Selling, general and administrative	$	279		$	274		2	%
As a percent of sales	10.2		%	10.9		%
Depreciation and amortization	$	287		$	272		6	%
Transaction costs and other charges (b)	$	6		$	—
Other income (expense) - net	$	(6	)	$	(5	)
Operating profit	$	582		$	554		5	%
Operating margin	21.3		%	22.1		%
Interest expense - net	$	41		$	65		(37	)%
Effective tax rate	27.5		%	27.2		%
Income from equity investments	$	12		$	10		20	%
Noncontrolling interests	$	(15	)	$	(10	)	50	%
Net income - Praxair, Inc.	$	389		$	356		9	%
Diluted earnings per share	$	1.35		$	1.24		9	%
Diluted shares outstanding	287,384			286,665			—	%
Number of employees	26,420			26,558
Adjusted Amounts (b)
Operating profit	$	588		$	554		6	%
Operating margin	21.6		%	22.1		%
Interest expense - net	$	41		$	49		(16	)%
Effective tax rate	27.2		%	27.5		%
Net income - Praxair, Inc.	$	395		$	366		8	%
Diluted earnings per share	$	1.37		$	1.28		7	%

(a) Gross margin excludes depreciation and amortization expense.

(b) Adjusted amounts are non-GAAP measures which exclude the impact of the transaction costs in the first quarter of 2017 related to the potential Linde merger and the bond redemption charge in the first quarter of 2016 (see Note 2 to the condensed consolidated financial statements). A reconciliation of reported amounts to adjusted amounts can be found in the "Non-GAAP Financial Measures" section of this MD&A.

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Consolidated Results

In the first quarter, Praxair’s sales were $2,728 million, 9% above the prior–year quarter largely driven by volume growth in North America, Asia and Europe of 4%. Positive currency translation and cost pass-through increased sales by 1% and 2%, respectively. Higher overall pricing increased sales by 1% and and acquisitions contributed 1%, primarily the acquisition of a European carbon dioxide business completed in the second quarter of 2016. Reported operating profit of $582 million, 21.3% of sales, was 5% above $554 million in the prior-year quarter. Operating profit included transaction costs of $6 million related to the potential Linde merger. Excluding these costs, adjusted operating profit was $588 million, 21.6% of sales and 6% above the 2016 adjusted first quarter driven by higher volumes and price. The company's adjusted EBITDA margin was 32.5%. Diluted earnings per share ("EPS") was $1.35, 9% above reported EPS of $1.24 in the first quarter of 2016. On an adjusted basis, EPS was $1.37, 7% above the 2016 adjusted EPS of $1.28, driven by higher net income.

Outlook

Diluted EPS for the second quarter of 2017 is expected to be in the range of $1.38 to $1.43. Second quarter EPS guidance does not include transaction costs related to the potential Linde merger.

Reported GAAP diluted EPS for the full year of 2017 is expected to be in the range of $5.53 to $5.78 and (i) includes $0.02 per diluted share for first quarter transaction costs and (ii) excludes future transaction costs related to the potential merger.

Adjusted diluted EPS for the full year of 2017 is expected to be in the range of $5.55 to $5.80 and excludes (i) $0.02 per diluted share for first quarter transaction costs and (ii) future transaction costs related to the potential merger. See Note 2 to the condensed consolidated financial statements.

Full-year capital expenditures are expected to be about $1.4 billion.

The company’s core business is to build, own, and operate industrial gas plants in order to supply atmospheric and process gases to customers. As such, Praxair believes that its backlog is one indicator of future sales growth. At March 31, 2017, Praxair’s backlog of 16 large projects under construction was $1.5 billion. This represents the total estimated capital cost of large plants under construction. These plants will supply customers in the energy, chemical, manufacturing, and electronics markets.

Praxair provides quarterly updates on operating results, material trends that may affect financial performance, and financial earnings guidance via quarterly earnings releases and investor teleconferences. These updates are available on the company’s website, www.praxair.com, but are not incorporated herein.

24

Results of Operations

The changes in consolidated sales and operating profit compared to the prior year are attributable to the following:

	Quarter Ended March 31, 2017 vs. 2016
	% Change
	Sales		Operating Profit
Factors Contributing to Changes
Volume	4	%	6	%
Price/Mix	1	%	3	%
Cost pass-through	2	%	—	%
Currency	1	%	—	%
Acquisitions/divestitures	1	%	1	%
Other	—	%	(5	)%
Reported	9	%	5	%
Add: Transaction costs	—	%	1	%
Adjusted	9	%	6	%

The following tables provide sales by end-market and distribution method:

	Quarter Ended March 31,
	% of Sales				% Change*
	2017		2016
Sales by End Markets
Manufacturing	23	%	24	%	—	%
Metals	17	%	17	%	7	%
Energy	12	%	11	%	4	%
Chemicals	10	%	10	%	8	%
Electronics	9	%	9	%	8	%
Healthcare	8	%	8	%	5	%
Food & Beverage	9	%	9	%	7	%
Aerospace	3	%	3	%	12	%
Other	9	%	9	%	5	%
	100	%	100	%

 * Excludes impact of currency, natural gas/precious metals cost pass-through and acquisitions/divestitures.

	Quarter Ended March 31,
	% of Sales
	2017		2016
Sales by Distribution Method
On-Site	30	%	28	%
Merchant	34	%	34	%
Packaged Gas	27	%	28	%
Other	9	%	10	%
	100	%	100	%

Sales increased $219 million, or 9%, for the first quarter versus the respective 2016 period driven by 4% volume growth in North America, Europe and Asia partially offset by lower volumes in South America, primarily due to weaker manufacturing activity in Brazil. Positive currency impacts increased sales by 1%. Higher overall pricing, primarily in North America, contributed 1% to sales, and acquisitions, largely in Europe, added an incremental 1% to sales. Higher cost pass-through, primarily higher natural gas prices passed through to hydrogen customers, increased sales by 2% with minimal impact on operating profit.

25

Gross margin increased $55 million, or 5%, for the three months ended March 31, 2017 versus the respective 2016 period, primarily due to volume growth and increased price. Gross margin as percentage of sales declined to 43.4% from 45.0% for the three months ended March 31, 2017 versus the respective 2016 period largely driven by the contractual pass-through of higher natural gas costs to customers.

Selling, general and administrative expense ("SG&A") increased$5 million, or 2%, for the three months ended March 31, 2017 versus the respective 2016 period. Currency impacts increased SG&A expense by $4 million for the quarter. Excluding currency effects, SG&A increased $1 million for the three months ended March 31, 2017 versus the respective 2016 period as increases from acquisitions and incentive compensation were partially offset by cost reduction actions.

Depreciation and amortization expense increased$15 million, or 6%, for the three months ended March 31, 2017 versus the respective 2016 period primarily driven by large project start-ups and acquisitions. Currency effects increased depreciation and amortization expense by $3 million.

During the first quarter of 2017, Praxair recorded transaction costs of $6 million related to the potential merger (refer to Note 2 to the condensed consolidated financial statements).

Other income (expense) – net was $(6) million expense for the three months ended March 31, 2017 compared to a $(5) million expense for the respective 2016 period.

Reported operating profit increased$28 million, or 5%, for the first quarter versus 2016. The first quarter of 2017 includes transaction charges of $6 million related to the potential merger. Excluding these charges, adjusted operating profit increased $34 million, or 6%, for the first quarter versus 2016 driven by higher volumes and price.

Interest expense-net decreased$24 million, or 37%, for the three months ended March 31, 2017 versus the respective 2016 period. Included within interest expense-net for the three months ended March 31, 2016 was a $16 million charge relating to a bond redemption (see Note 2 to the condensed consolidated financial statements). Excluding this charge, adjusted interest expense-net decreased $8 million, or 16% for the three months ended March 31, 2017 versus the respective 2016 period. This decrease was primarily attributable to overall lower net debt and effective interest rates.

The reported effective tax rate ("ETR") for the three months ended March 31, 2017 and 2016 was 27.5% and 27.2%, respectively. The reported ETR for the 2017 quarter includes $6 million of non-deductible transaction costs related to the potential Linde merger. The 2016 quarter includes a $6 million tax benefit related to a bond redemption (see Note 2 to the condensed consolidated financial statements). Excluding these impacts, on an adjusted basis the ETR for the three months ended March 31, 2017 and 2016 was 27.2% and 27.5%, respectively.

Income from equity investments for the three months ended March 31, 2017 and 2016 was $12 million and $10 million, respectively, driven by growth in Italy and China.

At March 31, 2017, non-controlling interests consisted primarily of non-controlling shareholders' investments in Asia (primarily China), Europe (primarily Italy) and surface technologies. Non-controlling interests increased $5 million for the three months ended March 31, 2017 versus the respective 2016 period driven by PG Technologies, LLC ("PGT"), a surface technologies joint venture with GE Aviation formed in the fourth quarter of 2016.

Reported Net income-Praxair, Inc. increased$33 million, or 9%, for the first quarter versus the respective period in 2016. Included within the three months ended March 31, 2017 were transaction costs of $6 million after-tax related to the potential Linde merger. The three months ended March 31, 2016 included a $10 million after-tax charge from a bond redemption (see Note 2 to the condensed consolidated financial statements). Excluding these charges, adjusted Net income-Praxair, Inc increased $29 million, or 8%, for the three months ended March 31, 2017 versus the respective period in 2016 primarily due to higher adjusted operating profit and lower adjusted interest expense-net.

Reported Earnings per share of $1.35increased$0.11, or 9%, for the first quarter versus the comparable period in 2016. Included within the first quarter 2017 were charges of $0.02 for transaction costs related to the potential Linde merger. In addition, the first quarter 2016 included a $0.04 charge from a bond redemption (see Note 2 to the condensed consolidated financial statements). Excluding these charges, adjusted earnings per share increased $0.09, or 7%, primarily due to higher adjusted net income.

26

The number of employees at March 31, 2017 was 26,420, a decrease of 138 employees from March 31, 2016. This decrease primarily reflects the impact of cost reduction programs implemented during the previous year and was partially offset by increases due to acquisitions.

Other Comprehensive Income (Loss)

Other comprehensive income (loss) for the three months ended March 31, 2017 of $320 million, resulted from currency translation adjustments. The translation adjustments reflect the impact of translating local currency foreign subsidiary financial statements to U.S. dollars. Generally, positive translation adjustments result from the weakening of the U.S. dollar against most major currencies, while negative translation adjustments result from a strengthening of the U.S. dollar. See "Currency" section of the MD&A for exchange rates used for translation purposes and Note 14 to the condensed consolidated financial statements for a summary of the currency translation adjustment component of accumulated other comprehensive income by segment.

Retirement Benefits

The net periodic cost for pension and OPEB plans for the three months ended March 31, 2017 was a $3 million benefit versus a $13 million cost in the respective 2016 period. The decrease in net periodic cost for pension and OPEB is related to a curtailment gain recorded on a South American OPEB plan for $18 million. The curtailment gain more than offsets slightly higher net periodic pension cost.

Segment Discussion

The following summary of sales and operating profit by segment provides a basis for the discussion that follows.

	Quarter Ended March 31,
(Dollar amounts in millions)	2017			2016		Variance
SALES
North America	$	1,458		$	1,353	8	%
Europe	356			320		11	%
South America	369			311		19	%
Asia	395			376		5	%
Surface Technologies	150			149		1	%
	$	2,728		$	2,509	9	%
OPERATING PROFIT
North America	$	357		$	349	2	%
Europe	66			62		6	%
South America	64			55		16	%
Asia	75			63		19	%
Surface Technologies	26			25		4	%
Segment operating profit	588			554		6	%
Transaction costs and other charges	(6		)	—
Total operating profit	$	582		$	554	5	%

27

North America

	Quarter Ended March 31,
	2017			2016			Variance
Sales	$	1,458		$	1,353		8	%
Cost of sales, exclusive of depreciation and amortization	774			682
Gross margin	684			671
Operating expenses	173			171
Depreciation and amortization	154			151
Operating profit	$	357		$	349		2	%
Margin %	24.5		%	25.8		%

	Quarter Ended March 31, 2017 vs. 2016
	% Change
	Sales		Operating Profit
Factors Contributing to Changes
Volume	3	%	5	%
Price/Mix	1	%	5	%
Cost pass-through	3	%	—	%
Currency	—	%	—	%
Acquisitions/divestitures	1	%	—	%
Other	—	%	(8	)%
	8	%	2	%

The following tables provide sales by end-market and distribution method:

	Quarter Ended March 31,
	% of Sales				% Change*
	2017		2016
Sales by End Markets
Manufacturing	29	%	31	%	2	%
Metals	12	%	12	%	9	%
Energy	18	%	16	%	7	%
Chemicals	9	%	9	%	3	%
Electronics	5	%	5	%	2	%
Healthcare	7	%	7	%	8	%
Food & Beverage	10	%	10	%	5	%
Aerospace	2	%	2	%	8	%
Other	8	%	8	%	8	%
	100	%	100	%

* Excludes impact of currency, natural gas/precious metals cost pass-through and acquisitions/divestitures.

	Quarter Ended March 31,
	% of Sales
	2017		2016
Sales by Distribution Method
On- Site	30	%	27	%
Merchant	37	%	39	%
Packaged Gas	30	%	32	%
Other	3	%	2	%
	100	%	100	%

28

North America segment sales increased $105 million, or 8% in the first quarter. Higher cost pass-through, primarily higher natural gas prices passed through to hydrogen customers, increased sales by 3% with minimal impact on operating profit. Excluding cost pass-through, sales were 5% above the prior-year quarter primarily due to 3% higher volumes with growth across all end-markets and 1% higher pricing. Acquisitions, primarily packaged gas distributors in the United States, contributed 1% to sales growth.

North America segment operating profit increased $8 million, or 2% in the first quarter as compared to the prior-year due to higher volumes and pricing which were partially offset by higher costs, primarily energy and purchased products.

Europe

	Quarter Ended March 31,
	2017			2016			Variance %
Sales	$	356		$	320		11	%
Cost of sales, exclusive of depreciation and amortization	201			178
Gross margin	155			142
Operating expenses	49			44
Depreciation and amortization	40			36
Operating profit	$	66		$	62		6	%
Margin %	18.5		%	19.4		%

	Quarter Ended March 31, 2017 vs. 2016
	% Change		% Change
	Sales		Operating Profit
Factors Contributing to Changes
Volume	6	%	9	%
Price/Mix	—	%	—	%
Cost pass-through	1	%	—	%
Currency	(3	)%	(4	)%
Acquisitions/divestitures	7	%	4	%
Other	—	%	(3	)%
	11	%	6	%

The following tables provide sales by end-market and distribution method:

	Quarter Ended March 31,
	% of Sales				% Change*
	2017		2016
Sales by End Markets
Manufacturing	21	%	22	%	4	%
Metals	17	%	18	%	5	%
Energy	4	%	5	%	—	%
Chemicals	13	%	14	%	12	%
Electronics	7	%	8	%	3	%
Healthcare	12	%	11	%	3	%
Food & Beverage	13	%	9	%	11	%
Aerospace	1	%	1	%	25	%
Other	12	%	12	%	17	%
	100	%	100	%

* Excludes impact of currency, natural gas/precious metals cost pass-through and acquisitions/divestitures

29

	Quarter Ended March 31,
	% of Sales
	2017		2016
Sales by Distribution Method
On- Site	19	%	20	%
Merchant	35	%	34	%
Packaged Gas	41	%	42	%
Other	5	%	4	%
	100	%	100	%

Europe segment sales increased by $36 million, or 11% in the first quarter as compared to the prior year largely driven by the acquisition of a carbon dioxide business in the prior year largely serving the food and beverage market and an increase in overall volumes including new project start-ups.

Europe segment operating profit increased by $4 million, or 6% in the first quarter as compared to the prior year. The increase in operating profit was primarily driven by higher volumes and the acquisition of the carbon dioxide business in the prior year.

South America

	Quarter Ended March 31,
	2017			2016			Variance
Sales	$	369		$	311		19	%
Cost of sales, exclusive of depreciation and amortization	224			183
Gross margin	145			128
Operating expenses	42			43
Depreciation and amortization	39			30
Operating profit	$	64		$	55		16	%
Margin %	17.3		%	17.7		%

	Quarter Ended March 31, 2017 vs. 2016
	% Change		% Change
	Sales		Operating Profit
Factors Contributing to Changes
Volume	—	%	(6	)%
Price/Mix	1	%	3	%
Cost pass-through	—	%	—	%
Currency	18	%	13	%
Acquisitions/divestitures	—	%	—	%
Other	—	%	6	%
	19	%	16	%

30

The following tables provide sales by end-market and distribution method:

	Quarter Ended March 31,
	% of Sales				% Change*
	2017		2016
Sales by End Markets
Manufacturing	18	%	20	%	(8	)%
Metals	29	%	29	%	(1	)%
Energy	2	%	1	%	—	%
Chemicals	10	%	9	%	10	%
Electronics	—	%	—	%	—	%
Healthcare	19	%	18	%	3	%
Food & Beverage	14	%	14	%	7	%
Aerospace	—	%	—	%	—	%
Other	8	%	9	%	(8	)%
	100	%	100	%

* - Excludes impact of currency, natural gas/precious metals cost pass-through and acquisitions/divestitures.

	Quarter Ended March 31,
	% of Sales
	2017		2016
Sales by Distribution Method
On- Site	31	%	30	%
Merchant	39	%	41	%
Packaged Gas	28	%	28	%
Other	2	%	1	%
	100	%	100	%

South America segment sales in the first quarterincreased$58 million, or 19%, versus the prior-year quarter. Favorable currency impacts increased sales by 18% driven by the strengthening of the Brazilian real against the U.S. dollar, partially offset by the continued devaluation of the Argentine Peso. Excluding currency, sales grew 1% due to higher price. Volumes were flat year over year as new project contribution was offset by negative underlying base volumes in Brazil, primarily in the manufacturing end-market due to weak industrial production.

South America segment operating profit increased $9 million, or 16%, versus the prior-year quarter. Excluding currency translation, operating profit increased 3% versus the prior-year quarter driven by higher price and an OPEB benefit plan curtailment partially offset by the impacts of lower operating profit due to product sales mix and cost inflation.

Asia

	Quarter Ended March 31,
	2017			2016			Variance
Sales	$	395		$	376		5	%
Cost of sales, exclusive of depreciation and amortization	249			241
Gross margin	146			135
Operating expenses	27			27
Depreciation and amortization	44			45
Operating profit	$	75		$	63		19	%
Margin %	19.0		%	16.8		%

31

	Quarter Ended March 31, 2017 vs. 2016
	% Change		% Change
	Sales		Operating Profit
Factors Contributing to Changes
Volume	9	%	21	%
Price/Mix	(1	)%	(5	)%
Cost pass-through	1	%	—	%
Currency	(1	)%	(1	)%
Acquisitions/divestitures	(3	)%	—	%
Other	—	%	4	%
	5	%	19	%

The following tables provide sales by end-market and distribution method:

	Quarter Ended March 31,
	% of Sales				% Change*
	2017		2016
Sales by End Markets
Manufacturing	8	%	9	%	(8	)%
Metals	26	%	28	%	13	%
Energy	3	%	3	%	13	%
Chemicals	15	%	14	%	14	%
Electronics	35	%	32	%	12	%
Healthcare	1	%	1	%	4	%
Food & Beverage	2	%	2	%	6	%
Aerospace	—	%	—	%	—	%
Other	10	%	11	%	2	%
	100	%	100	%

* Excludes impact of currency, natural gas/precious metals cost pass-through and acquisitions/divestitures

	Quarter Ended March 31,
	% of Sales
	2017		2016
Sales by Distribution Method
On- Site	51	%	51	%
Merchant	29	%	28	%
Packaged Gas	14	%	14	%
Other	6	%	7	%
	100	%	100	%

Asia segment sales increased$19 million, or 5% in the first quarter as compared to the prior year. Currency translation reduced sales by 1% primarily due to the Chinese Yuan. Cost pass-through increased sales by 1%. Divestitures decreased sales by 3% due to the sale of an ownership interest in a majority-owned joint venture. Volume growth of 9% was primarily attributable to base volume growth in China and India and new project start-ups in Korea. Lower pricing reduced sales by 1% versus the prior year. Sales growth was strongest to the electronics, metals and chemicals end-markets.

Asia segment operating profit increased$12 million, or 19% in the first quarter as compared to the prior year. This increase was primarily attributable to higher volumes and benefits from cost reduction actions, partially offset by lower price.

32

Surface Technologies

	Quarter Ended March 31,
	2017			2016			Variance
Sales	$	150		$	149		1	%
Cost of sales, exclusive of depreciation and amortization	97			97
Gross margin	53			52
Operating expenses	17			17
Depreciation and amortization	10			10
Operating profit	$	26		$	25		4	%
Margin %	17.3		%	16.8		%

	Quarter Ended March 31, 2017 vs. 2016
	% Change		% Change
	Sales		Operating Profit
Factors Contributing to Changes
Volume/Price	1	%	2	%
Cost pass-through	—	%	—	%
Currency	(2	)%	(2	)%
Acquisitions/divestitures	2	%	2	%
Other	—	%	2	%
	1	%	4	%

The following table provides sales by end-market:

	Quarter Ended March 31,
	% of Sales				% Change*
	2017		2016
Sales by End Markets
Manufacturing	11	%	11	%	—	%
Metals	8	%	9	%	—	%
Energy	19	%	24	%	(20	)%
Chemicals	2	%	2	%	1	%
Electronics	1	%	1	%	3	%
Healthcare	—	%	—	%	—	%
Food & Beverage	4	%	3	%	17	%
Aerospace	44	%	38	%	13	%
Other	11	%	12	%	(5	)%
	100	%	100	%

* Excludes impact of currency, natural gas/precious metals cost pass-through and acquisitions/divestitures

Surface Technologies segment sales increased $1 million, or 1% in the quarter versus the prior year. Unfavorable currency translation impacts reduced sales by 2%, primarily driven by the devaluation of the British pound and the Euro. Excluding currency impacts, sales increased 3% due to higher volumes, primarily to the aerospace end-market and acquisitions, driven by a majority-owned joint venture with GE aviation.

Surface Technologies segment operating profit increased $1 million or 4% in the quarter versus the prior year. Excluding negative currency impacts, operating profit increased 6% due to increased volume and price, acquisitions and lower costs driven by cost reduction efforts.

33

Currency

The results of Praxair’s non-U.S. operations are translated to the company’s reporting currency, the U.S. dollar, from the functional currencies. For most foreign operations, Praxair uses the local currency as its functional currency. There is inherent variability and unpredictability in the relationship of these functional currencies to the U.S. dollar and such currency movements may materially impact Praxair’s results of operations in any given period.

To help understand the reported results, the following is a summary of the significant currencies underlying Praxair’s consolidated results and the exchange rates used to translate the financial statements (rates of exchange expressed in units of local currency per U.S. dollar):

	Percentage of YTD 2017 Consolidated Sales		Exchange Rate for Income Statement		Exchange Rate for Balance Sheet
			Year-To-Date Average		March 31,	December 31,
Currency			2017	2016	2017	2016
Euro	12	%	0.94	0.91	0.94	0.95
Brazilian real	11	%	3.14	3.89	3.17	3.26
Canadian dollar	7	%	1.32	1.37	1.33	1.34
Chinese yuan	6	%	6.89	6.54	6.89	6.95
Mexican peso	4	%	20.26	18.03	18.72	20.73
Korean won	4	%	1,153	1,201	1,118	1,206
India rupee	3	%	67.00	67.47	64.85	67.92
Argentine peso	1	%	15.66	14.42	15.39	15.89
British pound	1	%	0.81	0.70	0.80	0.81
Norwegian krone	1	%	8.43	8.62	8.60	8.64

34

Liquidity, Capital Resources and Other Financial Data

The following selected cash flow information provides a basis for the discussion that follows:

(Millions of dollars)	Three months ended March 31,
	2017			2016
NET CASH PROVIDED BY (USED FOR):
OPERATING ACTIVITIES
Net income (including noncontrolling interests)	$	404		$	366
Non-cash charges (credits):
Add: Depreciation and amortization	287			272
Add: Deferred income taxes	22			9
Add: Share-based compensation	12			8
Add: Transaction costs and other charges (a)	6			—
Net income adjusted for non-cash charges	731			655
Less: Working capital	(106		)	(103		)
Less: Pension contributions	(3		)	(2		)
Other	88			3
Net cash provided by operating activities	$	710		$	553
INVESTING ACTIVITIES
Capital expenditures	(327		)	(323		)
Acquisitions, net of cash acquired	(1		)	(63		)
Divestitures and asset sales	4			2
Net cash used for investing activities	$	(324	)	$	(384	)
FINANCING ACTIVITIES
Debt increase (decrease) - net	(173		)	95
Issuances (purchases) of common stock - net	15			2
Cash dividends - Praxair, Inc. shareholders	(225		)	(214		)
Noncontrolling interest transactions and other	(13		)	(2		)
Net cash provided by (used for) financing activities	$	(396	)	$	(119	)
Effect of exchange rate changes on cash and cash equivalents	$	5		$	24
Cash and cash equivalents, end-of-period	$	519		$	221
OTHER FINANCIAL DATA (b)
Debt-to-capital ratio	59.7		%	62.9		%
After-tax return on capital ("ROC")	12.0		%	12.4		%
Return on Praxair, Inc. shareholder's equity ("ROE")	31.1		%	34.6		%
Adjusted EBITDA	$	887		$	836
Adjusted EBITDA Margin	32.5		%	33.3		%
Debt-to-adjusted EBITDA	2.6			2.6

(a) See Note 2 to the consolidated financial statements.

(b) Non-GAAP measures. See the "Non-GAAP Financial Measures" section for definitions and reconciliations to reported amounts.

Cash Flow from Operations

Cash provided by operations of $710 million for the three months ended March 31, 2017increased$157 million, or 28%, versus 2016. The increase was primarily attributable to higher net income adjusted for non-cash charges and a $65 million dividend from an equity investment in China.

35

Praxair estimates that total 2017 required contributions to its pension plans will be in the range of $10 million to $15 million, of which $3 million has been made through March 31, 2017. At a minimum, Praxair contributes to its pension plans to comply with local regulatory requirements (e.g., ERISA in the United States). Discretionary contributions in excess of the local minimum requirements are made based on many factors, including long-term projections of the plans' funded status, the economic environment, potential risk of overfunding, pension insurance costs and alternative uses of the cash. Changes to these factors can impact the amount and timing of discretionary contributions from year to year.

Investing

Net cash used for investing of $324 million for the three months ended March 31, 2017 decreased $60 million versus 2016 primarily due to lower acquisition spend.

Capital expenditures for the three months ended March 31, 2017 were $327 million, $4 million higher than the prior year. Capital expenditures related primarily to investments in new plant and production equipment for growth and density. Approximately 50% of the capital expenditures were in North America.

Acquisitions for the three months ended March 31, 2017 and 2016 were $1 million and $63 million, respectively. Acquisitions in the prior year primarily relate to acquisitions of packaged gases businesses in North America and Europe (see Note 3 to the condensed consolidated financial statements).

Divestitures and asset sales for the three months ended March 31, 2017 and 2016 were $4 million and $2 million, respectively.

Financing

Cash used by financing activities was $396 million for the three months ended March 31, 2017. Cash dividends of $225 million were higher than the prior year due to a 5% increase in quarterly dividends per share from 75 cents to 78.75 cents. Net issuances of common stock increased $13 million due primarily to fewer share repurchases. Noncontrolling interest transactions and other for the three months ended March 31, 2017 and 2016 were $13 million and $2 million, respectively.

In February 2017, Praxair repaid $150 million of floating rate notes that became due.

Debt Covenants

Praxair’s $2.5 billion senior unsecured credit facility and long-term debt agreements contain various covenants (refer to Note 11 to the consolidated financial statements of Praxair’s 2016 Annual Report on Form 10-K). The only financial covenant requires Praxair not to exceed a maximum 70% leverage ratio, as defined in the agreements. For purposes of the leverage ratio calculation, consolidated shareholders' equity excludes changes in the cumulative foreign currency translation adjustments after June 30, 2011. At March 31, 2017 and December 31, 2016, the actual leverage ratio calculated in accordance with the agreements was 51% and 52%, respectively.

Other Financial Data

Praxair's debt-to-capital ratio was 59.7% at March 31, 2017 versus 62.9% at March 31, 2016. This decrease was primarily attributable to a reduction in net debt of $334 million and an increase in equity due to earnings net of dividends declared.

After-tax return on capital ("ROC") was 12.0% for the four-quarter trailing period ended March 31, 2017 versus 12.4% for the 2016 period. This decrease is because net operating profit after tax ("NOPAT") decreased while capital has increased largely due to the impact of capital projects and investments.

Return on equity ("ROE") for the four-quarter trailing period ended March 31, 2017 was at 31.1% and was 350 basis-points lower the prior year. The decrease was attributable to a 1% decrease in NOPAT and and increase in equity due to earnings net of dividends declared.

Adjusted EBITDA increased $51 million to $887 million for the three month ended March 31, 2017 from $836 million for the three months ended March 31, 2016. The increase in adjusted EBITDA is primarily due to higher adjusted net income adjusted for depreciation and amortization versus the prior year.

Debt-to-Adjusted EBITDA was 2.6 for the four-quarter trailing periods ended March 31, 2017 and 2016.

See the "Non-GAAP Financial Measures" section below for definitions and reconciliations of these non-GAAP measures to reported GAAP amounts.

36

Legal Proceedings

See Note 12 to the condensed consolidated financial statements.

Non-GAAP Financial Measures

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 net assets employed and operating performance. Special 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.

The following are the non-GAAP measures presented in the MD&A:

	March 31,
(Dollar amounts in millions, except per share data)	2017			2016
Debt-to-capital	59.7		%	62.9		%
After-tax return on capital	12.0		%	12.4		%
Return on equity	31.1		%	34.6		%
Adjusted EBITDA for the quarter ended	$	887		$	836
Debt-to-adjusted EBITDA	2.6			2.6

	Three Months Ended March 31,
2017 Adjusted amounts:*	2017			2016
Operating profit	$	588		$	554
Operating margin	21.6		%	22.1		%
EBITDA	$	887		$	836
EBITDA margin	32.5		%	33.3		%
Interest expense - net	$	41		$	49
Effective tax rate	27.2		%	27.5		%
Net income - Praxair, Inc.	$	395		$	366
Diluted earnings per share	$	1.37		$	1.28

* See the Non-GAAP reconciliations that follow for additional details relating to the Non-GAAP adjustments.

37

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.

	Three months ended March 31,
	2017			2016
(Dollar amounts in millions)
Debt	$	9,368		$	9,404
Less: cash and cash equivalents	(519		)	(221		)
Net debt	8,849			9,183
Equity and redeemable noncontrolling interests
Redeemable noncontrolling interests	10			119
Praxair, Inc. shareholders’ equity	5,529			4,888
Noncontrolling interests	436			417
Total equity and redeemable noncontrolling interests	5,975			5,424
Capital	$	14,824		$	14,607
DEBT-TO-CAPITAL RATIO	59.7		%	62.9		%

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).

	2017									2016
	Four Quarter Trailing			Three Months Ended			Nine Months Ended			Four Quarter Trailing			Three Months Ended			Nine Months Ended
				March 31, 2017			December 31, 2016						March 31, 2016			December 31, 2015
(Dollar amounts in millions)
Adjusted operating profit (see below)	$	2,372		$	588		$	1,784		$	2,424		$	554		$	1,870
Less: adjusted income taxes (see below)	(596		)	(149		)	(447		)	(630		)	(139		)	(491		)
Less: tax benefit on interest expense*	(46		)	(12		)	(34		)	(47		)	(14		)	(33		)
Add: equity income	43			12			31			42			10			32
Net operating profit after-tax (NOPAT)	$	1,773		$	439		$	1,334		$	1,789		$	411		$	1,378
Capital:
March 31st, 2017 & 2016	$	14,824								$	14,607
December 31st, 2016 & 2015	$	14,443								$	13,990
September 30th, 2016 & 2015	$	14,864								$	14,157
June 30th, 2016 & 2015	$	14,948								$	14,696
March 31st, 2016 & 2015	$	14,607								$	14,806
Five-quarter average	$	14,737								$	14,451
AFTER-TAX ROC	12.0		%							12.4		%

*  Tax benefit on interest expense is computed using the effective rate.

38

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.

	2017							2016
	Four Quarter Trailing			Three Months Ended		Nine Months Ended		Four Quarter Trailing			Three Months Ended		Nine Months Ended
				March 31, 2017		December 31, 2016					March 31, 2016		December 31, 2015
(Dollar amounts in millions)
Adjusted Net income - Praxair, Inc. (see below)	$	1,605		$	395	$	1,210	$	1,627		$	366	$	1,261
Praxair, Inc. shareholders’ equity
March 31st, 2017 & 2016	$	5,529						$	4,888
December 31st, 2016 & 2015	$	5,021						$	4,389
September 30th, 2016 & 2015	$	5,245						$	4,264
June 30th, 2016 & 2015	$	5,140						$	4,964
March 31st, 2016 & 2015	$	4,888						$	5,018
Five-quarter average	$	5,165						$	4,705
ROE	31.1		%					34.6		%

39

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 profitability.

	2017							2016
	Four Quarter Trailing		Three Months Ended			Nine Months Ended		Four Quarter Trailing		Three Months Ended			Nine Months Ended
			March 31, 2017			December 31, 2016				March 31, 2016			December 31, 2015
(Dollar amounts in millions)
Adjusted net income - Praxair, Inc. (see below)	$	1,605	$	395		$	1,210	$	1,627	$	366		$	1,261
Add: adjusted noncontrolling interest (see below)	48		15			33		43		10			33
Add: adjusted interest expense - net (see below)	166		41			125		166		49			117
Add: adjusted income taxes (see below)	596		149			447		630		139			491
Add: depreciation and amortization	1,137		287			850		1,101		272			829
ADJUSTED EBITDA	$	3,552	$	887		$	2,665	$	3,567	$	836		$	2,731
Reported Sales			2,728							2,509
Adjusted EBITDA Margin			32.5		%					33.3		%
Net Debt:
March 31st, 2017 & 2016	$	8,849						$	9,183
December 31st, 2016 & 2015	$	8,991						$	9,084
September 30th, 2016 &2015	$	9,215						$	9,344
June 30th 2016 & 2015	$	9,389						$	9,177
March 31st, 2016 & 2015	$	9,183						$	9,243
Five-quarter average	$	9,125						$	9,206
DEBT-TO-ADJUSTED EBITDA RATIO	2.6							2.6

40

Adjusted Amounts

The adjusted amounts for the three months ended March 31, 2017 exclude the impact of transaction costs of $6 million ($6 million net of tax) related to the potential Linde merger (see Note 2 to the condensed consolidated financial statements). The adjusted amounts for the three months ended March 31, 2016 exclude a $16 million charge to interest expense ($10 million net of tax) for a bond redemption. The adjusted amounts for the nine months ended December 31, 2016 exclude the impact of the third quarter cost reduction program of $96 million ($63 million net of tax and non-controlling interests) and the third quarter pension settlement charge of $4 million ($3 million net of tax). Adjusted amounts for the nine months ended December 31, 2015 exclude the impact of the second quarter cost reduction program and other charges of $146 million ($112 million net of tax and noncontrolling interests), the third quarter cost reduction program of $19 million ($13 million net of tax) and a pension settlement charge of $7 million ($5 million net of tax). The company does not believe these items are indicative of on-going business trends and, accordingly, the impact is excluded from the reported amounts so that investors can better evaluate and analyze historical and future business trends on a consistent basis. For a description of these items, refer to Notes 2, 5, 11 & 16 to the consolidated financial statements of Praxair’s 2016 Annual Report on Form 10-K.

Certain amounts for 2016 and 2015 have been included for reference purposes and to facilitate the calculations contained herein.

	Three Months Ended March 31,						Nine Months Ended December 31,
(Dollar amounts in millions, except per share data)	2017			2016			2016			2015
Adjusted Operating Profit
Reported operating profit	$	582		$	554		$	1,684		$	1,698
Add: Transaction costs	6			—			—			—
Add: Pension settlement charge	—			—			4			7
Add: Cost reduction program	—			—			96			165
Total adjustments	6			—			100			172
Adjusted operating profit	$	588		$	554		$	1,784		$	1,870
Reported percent change	5		%				(1		)%
Adjusted percent change	6		%				(5		)%
Adjusted Interest Expense
Reported interest expense	$	41		$	65		$	125		$	117
Less: Bond redemption	—			(16		)	—			—
Total adjustments	—			(16		)	—			—
Adjusted interest expense	$	41		$	49		$	125		$	117
Adjusted Income Taxes and Effective Tax Rate
Reported income taxes	$	149		$	133		$	418		$	450
Add: Bond redemption	—			6			—			—
Add: Pension settlement charge	—			—			1			2
Add: Cost reduction program	—			—			28			39
Total adjustments	—			6			29			41
Adjusted income taxes	$	149		$	139		$	447		$	491

41

	Three Months Ended March 31,						Nine Months Ended December 31,
(Dollar amounts in millions, except per share data)	2017			2016			2016			2015
Adjusted Effective Tax Rate
Reported income before income taxes and equity investments	$	541		$	489		$	1,559		$	1,581
Add: Bond redemption	—			16			—			—
Add: Pension settlement charge	—			—			4			7
Add: Transaction costs	6			—			—			—
Add: Cost reduction program	—			—			96			165
Total adjustments	6			16			100			172
Adjusted income before income taxes and equity investments	$	547		$	505		$	1,659		$	1,753
Reported effective tax rate	27.5		%	27.2		%	26.8		%	28.5		%
Adjusted effective tax rate	27.2		%	27.5		%	26.9		%	28.0		%
Adjusted Noncontrolling Interests
Reported noncontrolling interests	$	15		$	10		$	28		$	32
Add: Cost reduction program	—			—			5			1
Total adjustments	—			—			5			1
Adjusted Noncontrolling Interests	$	15		$	10		$	33		$	33
Adjusted Net Income - Praxair, Inc.
Reported net income - Praxair, Inc.	$	389		$	356		$	1,144		$	1,131
Add: Bond redemption	—			10			—			—
Add: Pension settlement charge	—			—			3			5
Add: Transaction costs	6			—			—			—
Add: Cost reduction program	—			—			63			125
Total adjustments	6			10			66			130
Adjusted net income - Praxair, Inc.	$	395		$	366		$	1,210		$	1,261
Reported percent change	9		%				1		%
Adjusted percent change	8		%				(4		)%

Adjusted Diluted Earnings Per Share
Reported diluted EPS	$	1.35		$	1.24	$	3.97		$	3.93
Add: Bond redemption	—			0.04		—			—
Add: Pension settlement charge	—			—		0.01			0.02
Add: Transaction Costs	0.02			—		—			—
Add: Cost reduction program	—			—		0.22			0.43
Total adjustments	$	0.02		$	0.04	$	0.23		$	0.45
Adjusted diluted EPS	$	1.37		$	1.28	$	4.20		$	4.38
Reported percent change	9		%			1		%
Adjusted percent change	7		%			(4		)%

New Accounting Standards

Refer to Note 1 of the condensed consolidated financial statements.

42

Forward-looking Statements

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 expected timing and likelihood of the entry into or the completion of the contemplated business combination with Linde AG, including the timing, receipt and terms and conditions of any required governmental and regulatory approvals that could reduce anticipated benefits or cause the parties not to enter into, or to abandon the transaction; the occurrence of any event, change or other circumstances that could give rise to the termination of the proposed business combination agreement; the ability to successfully complete the proposed business combination and the exchange offer, including satisfying closing conditions; the success of the business following the proposed business combination; the ability to successfully integrate the Praxair and Linde businesses; the possibility that Praxair stockholders may not approve the proposed business combination agreement or that the requisite number of Linde shares may not be tendered in the public offer; the risk that the combined company may be unable to achieve expected synergies or that it may take longer or be more costly than expected to achieve those synergies; 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; the impact of potential unusual or non-recurring items; 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 GAAP or adjusted projections or estimates contained in the forward-looking statements. 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 latest Annual Report on Form 10-K filed with the SEC which should be reviewed carefully. Please consider the company’s forward-looking statements in light of those risks.

43

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Refer to Item 7A. to Part II of Praxair’s 2016 Annual Report on Form 10-K for discussion.

Item 4. Controls and Procedures

(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.

44

PART II - OTHER INFORMATION

Praxair, Inc. and Subsidiaries

Item 1. Legal Proceedings

See Note 12 to the condensed consolidated financial statements for a description of current legal proceedings.

Item 1A. Risk Factors

There have been no material changes to the risk factors disclosed in Item 1a to Part I of Praxair’s 2016 Annual Report on Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Purchases of Equity Securities- Certain information regarding purchases made by or on behalf of the company or any affiliated purchaser (as defined in Rule 10b-18(a)(3) under the Securities Exchange Act of 1934, as amended) of its common stock during the quarter ended March 31, 2017 is provided below:

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 2017	—	$	—	—	$	1,581
February 2017	—	$	—	—	$	1,581
March 2017	—	$	—	—	$	1,581
First Quarter 2017	—	$	—	—	$	1,581

(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, 2017, the Company purchased $1,419 million of its common stock pursuant to the 2014 program, leaving an additional $81 million remaining authorized under the 2014 program. The 2014 program does not have any stated expiration date. In addition, on July 28, 2015, the Company’s board of directors approved the repurchase of $1.5 billion of its common stock (“2015 program”) which could take place from time to time on the open market (which could include the use of 10b5-1 trade plans) or through negotiated transactions, subject to market and business conditions. The 2015 program does not have any stated expiration date. The 2015 program is in addition to the 2014 program.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

45

Item 6. Exhibits

(a)	Exhibits
	10.01*	First Amendment to the Amended and Restated 2009 Praxair, Inc. Long Term Incentive Plan effective April 25, 2017 is filed herewith.
	12.01	Computation of Ratio of Earnings to Fixed Charges.
	31.01	Rule 13a-14(a) Certification
	31.02	Rule 13a-14(a) Certification
	32.01	Section 1350 Certification (such certifications are furnished for the information of the Commission and shall not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act).
	32.02	Section 1350 Certification (such certifications are furnished for the information of the Commission and shall not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act).
	101.INS	XBRL Instance Document
	101.SCH	XBRL Taxonomy Extension Schema
	101.CAL	XBRL Taxonomy Extension Calculation Linkbase
	101.LAB	XBRL Taxonomy Extension Label Linkbase
	101.PRE	XBRL Taxonomy Extension Presentation Linkbase
	101.DEF	XBRL Taxonomy Extension Definition Linkbase

*    Indicates a management contract or compensatory plan or arrangement.

46

SIGNATURE

Praxair, Inc. and Subsidiaries

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	PRAXAIR, INC.
	(Registrant)
Date: April 27, 2017	By: /s/ Kelcey E. Hoyt
	Kelcey E. Hoyt
	Vice President and Controller
	(On behalf of the Registrant
	and as Chief Accounting Officer)

47

EX-10.01

Praxair, Inc. and Subsidiaries

EXHIBIT 10.01

FIRST AMENDMENT TO THE

AMENDED AND RESTATED

2009 PRAXAIR, INC. LONG TERM INCENTIVE PLAN

This First Amendment to the Amended and Restated 2009 Praxair, Inc. Long Term Incentive Plan (the “Plan”) was adopted by the Board of Directors of Praxair, Inc. on January 24, 2017, and shall become effective upon shareholder approval on April 25, 2017. The Plan is hereby amended as follows:

1. Section 4.1 of the Plan is hereby amended in its entirety as follows:

“4.1Number of Shares Available for Awards. Subject to adjustment as provided in Section 4.5, the total number of Shares that may be issued pursuant to Awards under this Plan on or after April 25, 2017 (the “Amendment Effective Date”) is 8,000,000 Shares, plus the number of authorized Shares remaining available from the 8,000,000 Shares authorized for grant under the terms of this Plan immediately prior to the Amendment Effective Date and any additional Shares that become available for issuance under the Plan in accordance with Section 4.2 (including, for the avoidance of doubt, under Awards granted under this Plan prior to the Amendment Effective Date) (the “Share Authorization”). The Shares available for issuance under this Plan may be authorized and unissued Shares or treasury Shares. The maximum number of Shares of the Share Authorization that may be issued pursuant to ISOs under this Plan following the Amendment Effective Date shall be 8,000,000 Shares. The maximum number of Shares of the Share Authorization that may be issued under this Plan pursuant to Awards other than Options or SARs following the Amendment Effective Date shall be 2,600,000 Shares.

2. Section 4.2 of the Plan is amended to add the following sentence to the end thereof:

“Notwithstanding the foregoing, in no event shall Shares underlying any underwater Option that is voluntarily surrendered by a Participant become available for grant under the Plan pursuant hereto.”

3.Section 4.4 of the Plan is hereby amended in its entirety as follows:

“4.4Director Awards. In order to retain and compensate Directors for their services, and to strengthen the alignment of their interests with those of the shareholders of the Company, the Plan permits the grant of stock-based awards to Directors. Aggregate compensation (including Awards) to any one Director in respect of any calendar year, solely with respect to his or her service as a Director, may not exceed $750,000, with the value of any Awards hereunder based on the Fair Market Value of stock-based Awards, determined as of the Grant Date.”

EX-12.01

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)	2017			2016			2015			2014			2013
Pre-tax income from continuing operations before adjustment for
noncontrolling interests in consolidated subsidiaries or income or
loss from equity investees	$	541		$	2,048		$	2,160		$	2,395		$	2,447
Capitalized interest	(9		)	(34		)	(33		)	(38		)	(69		)
Depreciation of capitalized interest	3			19			22			27			20
Dividends from less than 50%-owned companies carried at equity	68			8			11			6			10
Adjusted pre-tax income from continuing operations before adjustment
for noncontrolling interests in consolidated subsidiaries or income
or loss from equity investees	$	603		$	2,041		$	2,160		$	2,390		$	2,408
Fixed charges
Interest on long-term and short-term debt	$	41		$	190		$	161		$	213		$	178
Capitalized interest	9			34			33			38			69
Rental expenses representative of an interest factor	11			47			47			52			43
Total fixed charges	$	61		$	271		$	241		$	303		$	290
Adjusted pre-tax income from continuing operations before adjustment
for noncontrolling interests in consolidated subsidiaries or income or
loss from equity investees plus total fixed charges	$	664		$	2,312		$	2,401		$	2,693		$	2,698
RATIO OF EARNINGS TO FIXED CHARGES	10.9			8.5			10.0			8.9			9.3

EX-31.01

RULE 13a-14(a) CERTIFICATIONS

Praxair, Inc. and Subsidiaries

EXHIBIT 31.01

I, Stephen F. Angel, certify that:

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 27, 2017	By: /s/ Stephen F. Angel
	Stephen F. Angel
	Chairman, President
	Chief Executive Officer
	(principal executive officer)

EX-31.02

RULE 13a-14(a) CERTIFICATIONS

Praxair, Inc. and Subsidiaries

EXHIBIT 31.02

I, Matthew J. White, certify that:

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 27, 2017	By: /s/ Matthew J. White
	Matthew J. White
	Senior Vice President and
	Chief Financial Officer
	(principal financial officer)

EX-32.01

SECTION 1350 CERTIFICATION

Praxair, Inc. and Subsidiaries

EXHIBIT 32.01

Pursuant to 18 U.S.C. § 1350, the undersigned officer of Praxair, Inc. (the “Company”), hereby certifies that the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2017 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

April 27, 2017	By: /s/ Stephen F. Angel
	Stephen F. Angel
	Chairman, President
	Chief Executive Officer
	(principal executive officer)

The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document.

A signed original of this written statement required by 18 U.S.C. § 1350 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.02

SECTION 1350 CERTIFICATION

Praxair, Inc. and Subsidiaries

EXHIBIT 32.02

Pursuant to 18 U.S.C. § 1350, the undersigned officer of Praxair, Inc. (the “Company”), hereby certifies that the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2017 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

April 27, 2017	By: /s/ Matthew J. White
	Matthew J. White
	Senior Vice President and
	Chief Financial Officer
	(principal financial officer)

The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document.

A signed original of this written statement required by 18 U.S.C. § 1350 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information	3 Months Ended
	Mar. 31, 2017 shares
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q1
Trading Symbol	PX
Entity Registrant Name	PRAXAIR INC
Entity Central Index Key	0000884905
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding	285,353,938

XML

Consolidated Statements of Income - USD ($) shares in Thousands, $ in Millions		3 Months Ended
		Mar. 31, 2017	Mar. 31, 2016
SALES	[1]	$ 2,728	$ 2,509
Cost of sales, exclusive of depreciation and amortization		1,545	1,381
Selling, general and administrative		279	274
Depreciation and amortization		287	272
Research and development		23	23
Transaction costs and other charges		6
Other income (expense) - net		(6)	(5)
OPERATING PROFIT		582	554
Interest expense - net		41	65
INCOME BEFORE INCOME TAXES AND EQUITY INVESTMENTS		541	489
Income taxes		149	133
INCOME BEFORE EQUITY INVESTMENTS		392	356
Income from equity investments		12	10
NET INCOME (INCLUDING NONCONTROLLING INTERESTS)		404	366
Less: noncontrolling interests		(15)	(10)
NET INCOME - PRAXAIR, INC.		$ 389	$ 356
PER SHARE DATA - PRAXAIR, INC. SHAREHOLDERS
Basic earnings per share (usd per share)		$ 1.36	$ 1.25
Diluted earnings per share (usd per share)		1.35	1.24
Cash dividends per share (usd per share)		$ 0.7875	$ 0.750
WEIGHTED AVERAGE SHARES OUTSTANDING (000’s):
Basic shares outstanding (in shares)		285,509	285,429
Diluted shares outstanding (in shares)		287,384	286,665

[1] Sales reflect external sales only. Intersegment sales, primarily from North America to other segments, were not material

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Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
NET INCOME (INCLUDING NONCONTROLLING INTERESTS)	$ 404	$ 366
Translation adjustments:
Foreign currency translation adjustments	317	342
Income taxes	3	16
Translation adjustments	320	358
Funded status - retirement obligations (Note 11):
Retirement program remeasurements	(3)	(5)
Reclassifications to net income	4	14
Income taxes	(1)	(5)
Funded status - retirement obligations		4
Derivative instruments (Note 6):
Current quarter unrealized gain (loss)	(1)
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Tax	1
TOTAL OTHER COMPREHENSIVE INCOME (LOSS)	320	362
COMPREHENSIVE INCOME (LOSS) (INCLUDING NONCONTROLLING INTERESTS)	724	728
Less: noncontrolling interests	(20)	(26)
COMPREHENSIVE INCOME (LOSS) - PRAXAIR, INC.	$ 704	$ 702

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
ASSETS
Cash and cash equivalents	$ 519	$ 524
Accounts receivable - net	1,730	1,641
Inventories	561	550
Prepaid and other current assets	204	165
TOTAL CURRENT ASSETS	3,014	2,880
Property, plant and equipment (less accumulated depreciation of $12,842 in 2017 and $12,444 in 2016)	11,692	11,477
Goodwill	3,141	3,117
Other intangible assets - net	574	583
Other long-term assets	1,244	1,275
TOTAL ASSETS	19,665	19,332
LIABILITIES AND EQUITY
Accounts payable	860	906
Short-term debt	411	434
Current portion of long-term debt	10	164
Other current liabilities	968	974
TOTAL CURRENT LIABILITIES	2,249	2,478
Long-term debt	8,947	8,917
Other long-term liabilities	2,494	2,485
TOTAL LIABILITIES	13,690	13,880
Commitments and contingencies (Note 12)
Redeemable noncontrolling interests (Note 14)	10	11
Praxair, Inc. Shareholders’ Equity:
Common stock $0.01 par value, authorized - 800,000,000 shares, issued 2017 and 2016 - 383,230,625 shares	4	4
Additional paid-in capital	4,071	4,074
Retained earnings	13,041	12,879
Accumulated other comprehensive income (loss) (Note 14)	(4,285)	(4,600)
Less: Treasury stock, at cost (2017 - 97,876,687 shares and 2016 - 98,329,849 shares)	(7,302)	(7,336)
Total Praxair, Inc. Shareholders’ Equity	5,529	5,021
Noncontrolling interests	436	420
TOTAL EQUITY	5,965	5,441
TOTAL LIABILITIES AND EQUITY	$ 19,665	$ 19,332

XML

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Property, plant and equipment, accumulated depreciation	$ 12,842	$ 12,444
Common stock, par value (usd per share)	$ 0.01	$ 0.01
Common stock, authorized (in shares)	800,000,000	800,000,000
Common stock, issued (in shares)	383,230,625	383,230,625
Treasury stock, shares (in shares)	97,876,687.290	98,329,849

XML

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
OPERATIONS
Net income - Praxair, Inc.	$ 389	$ 356
Income (Loss) Attributable to Noncontrolling Interest	(15)	(10)
Net income (including noncontrolling interests)	404	366
Adjustments to reconcile net income to net cash provided by operating activities:
Transaction costs and other charges	6
Depreciation and amortization	287	272
Deferred income taxes	22	9
Share-based compensation	12	8
Accounts receivable	(49)	(20)
Inventory	(2)	(7)
Prepaid and other current assets	(13)	1
Payables and accruals	(42)	(77)
Pension contributions	(3)	(2)
Long-term assets, liabilities and other	88	3
Net Cash Provided by (Used in) Operating Activities, Continuing Operations	710	553
INVESTING
Capital expenditures	(327)	(323)
Acquisitions, net of cash acquired	(1)	(63)
Divestitures and Asset Sales	4	2
Net Cash Provided by (Used in) Investing Activities, Continuing Operations	(324)	(384)
FINANCING
Short-term debt borrowings (repayments) - net	(24)	(77)
Long-term debt borrowings	7	898
Long-term debt repayments	(156)	(726)
Issuances of common stock	26	34
Purchases of common stock	(11)	(32)
Cash dividends - Praxair, Inc. shareholders	(225)	(214)
Noncontrolling interest transactions and other	(13)	(2)
Net Cash Provided by (Used in) Financing Activities, Continuing Operations	(396)	(119)
Effect of exchange rate changes on cash and cash equivalents	5	24
Change in cash and cash equivalents	(5)	74
Cash and cash equivalents, beginning-of-period	524	147
Cash and cash equivalents, end-of-period	$ 519	$ 221

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2017

Accounting Policies [Abstract]

Summary Of Significant Accounting Policies

Summary of Significant Accounting Policies

Presentation of Condensed Consolidated Financial Statements- In the opinion of Praxair, Inc. (Praxair) management, the accompanying condensed consolidated financial statements include all adjustments necessary for a fair presentation of the results for the interim periods presented and such adjustments are of a normal recurring nature. The accompanying condensed consolidated financial statements should be read in conjunction with the notes to the consolidated financial statements of Praxair, Inc. and subsidiaries in Praxair’s 2016 Annual Report on Form 10-K. There have been no material changes to the company’s significant accounting policies during 2017.

Accounting Standards Implemented in 2017

Simplifying the Measurement of Inventory – In July 2015, the FASB issued updated guidance on the measurement of inventory. The new guidance requires that inventory be measured at the lower of cost or net realizable value, previously inventory was measured at the lower of cost or market. The adoption of this guidance resulted in no material impact.

Accounting Standards to be Implemented

• Revenue Recognition – In May 2014, the FASB issued updated guidance on the reporting and disclosure of revenue. The new guidance requires the evaluation of contracts with customers to determine the recognition of revenue when or as the entity satisfies a performance obligation, and requires expanded disclosures. Subsequently, the FASB has issued amendments to certain aspects of the guidance including the effective date. This guidance is required to be effective beginning in the first quarter 2018 (with early adoption beginning in 2017 optional) and includes several transition options.

The Company is currently in the process of evaluating and implementing this new guidance, as required, and at this time expects to use the modified retrospective basis starting in 2018. Praxair will provide additional updates in future filings, as appropriate.

• Leases – In February 2016, the FASB issued updated guidance on the accounting and financial statement presentation of leases. The new guidance requires lessees to recognize a right-of-use asset and lease liability for all leases, except those that meet certain scope exceptions, and would require expanded quantitative and qualitative disclosures. This guidance will be effective for Praxair beginning in the first quarter 2019, with early adoption optional, and requires companies to transition using a modified retrospective approach. Praxair is in the early stages of reviewing the new guidance and will provide updates on the expected impact to Praxair in future filings, as 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.

• Classification of Certain Cash Receipts and Cash Payments – In August 2016, the FASB issued updated guidance on the classification of certain cash receipts and cash payments within the statement of cash flows. The update provides accounting guidance for specific cash flow issues with the objective of reducing diversity in practice. This new guidance will be effective for Praxair beginning in the first quarter 2018 on a retrospective basis, with early adoption optional. Praxair does not expect this requirement to have a material impact.

• Intra-Entity Asset Transfers – In October 2016, the FASB issued updated guidance for income tax accounting of intra-entity transfers of assets other than inventory. The update requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory in the period when the transfer occurs. This new guidance will be effective for Praxair beginning in the first quarter 2018, with early adoption permitted, and should be applied on a modified retrospective basis. We are currently evaluating the impact this update will have on our consolidated financial statements.

• Simplifying the Test for Goodwill Impairment – In January 2017, the FASB issued updated guidance on the measurement of goodwill. The new guidance eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge. The guidance will be effective for Praxair beginning in the first quarter 2020 with early adoption permitted. Praxair does not expect this guidance to have a material impact.

• Pension Costs - In March 2017, the FASB issued updated guidance on the presentation of net periodic pension cost and net periodic postretirement benefit cost. The new guidance requires the service cost component be reported in the same line item or items as other compensation costs arising from services rendered by employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and not included within operating profit. This guidance will be effective for Praxair beginning in the first quarter 2018, with early adoption optional, and requires companies to transition using a retrospective approach for the presentation of the service cost component and the other cost components and prospectively for the capitalization of the service cost component. Praxair is currently evaluating the impact this update will have on our consolidated financial statements.

Reclassifications – Certain prior years’ amounts have been reclassified to conform to the current year’s presentation, including reclassifications to the condensed consolidated statement of cash flows due to the adoption of the share-based payment accounting standard adopted in the second quarter of 2016.

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Transaction Costs and Other Charges

3 Months Ended

Mar. 31, 2017

Unusual or Infrequent Items, or Both [Abstract]

Transaction Costs and Other Charges

Transaction Costs and Other Charges

2017 Transaction Costs

In the first quarter of 2017, Praxair incurred transaction costs in connection with the intended business combination with Linde AG ("Linde") totaling $6 million after-tax ($0.02 per diluted share).

Classification in the condensed consolidated financial statements

The costs are shown within operating profit in a separate line item on the consolidated statements of income. On the condensed consolidated statement of cash flows, the impact of these costs, net of cash payments, is shown as an adjustment to reconcile net income to net cash provided by operating activities. In Note 13 - Segments, Praxair excluded these costs from its management definition of segment operating profit; a reconciliation of segments operating profit to consolidated operating profit is shown within the segment operating profit table.

2016 and 2015 Cost Reduction Programs and Other Charges

In the third quarter of 2016, Praxair recorded pre-tax charges totaling $96 million ($63 million after-tax and noncontrolling interests or $0.22 per diluted share). In the second quarter of 2015, Praxair recorded pre-tax charges totaling $146 million ($112 million after-tax and noncontrolling interests, or $0.39 per diluted share) and in the third quarter recorded pre-tax charges totaling $19 million ($13 million after-tax or $0.04 per diluted share).

Reconciliation

The following table summarizes the activities related to the company's cost reduction programs for the three months ended March 31, 2017:

(millions of dollars)	Severance costs			Other Charges			Total
Balance, January 1, 2017	$	38		$	27		$	65
Less: Cash payments	(8		)	(1		)	(9		)
Less: Non-cash charges	—			—			—
Foreign currency translation	—			—			—
Balance, March 31, 2017	$	30		$	26		$	56

2016 Bond Redemption Charge

In February 2016, Praxair redeemed $325 million of 5.20% notes due March 2017 resulting in a $16 million interest charge ($10 million after-tax, or $0.04 per diluted share).

For further details regarding the cost reduction program and other charges, refer to Note 2 to the consolidated financial statements of Praxair's 2016 Annual Report on Form 10-K.

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Acquisitions

3 Months Ended

Mar. 31, 2017

Business Combinations [Abstract]

Acquisitions

Acquisitions

2016 Acquisitions

During the three months ended March 31, 2016, Praxair had acquisitions totaling $63 million, primarily acquisitions of packaged gases businesses in North America and Europe. These transactions resulted in goodwill and other intangible assets of $34 million and $15 million, respectively.

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Supplemental Information

3 Months Ended

Mar. 31, 2017

Supplemental Information [Abstract]

Supplemental Information

Supplemental Information

Inventories

The following is a summary of Praxair’s consolidated inventories:

(Millions of dollars)	March 31, 2017		December 31, 2016
Inventories
Raw materials and supplies	$	196	$	197
Work in process	47		45
Finished goods	318		308
Total inventories	$	561	$	550

Long-term receivables

Long-term receivables are not material and are largely reserved. Such long-term receivables are included within other long-term assets in the condensed consolidated balance sheets and totaled $45 million and $46 million at March 31, 2017 and December 31, 2016, respectively. These amounts are net of reserves of $52 million and $50 million, respectively. The amounts in both periods relate primarily to government receivables in Brazil and other long-term notes receivable from customers. Collectability is reviewed regularly and uncollectible amounts are written off as appropriate.

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Debt

3 Months Ended

Mar. 31, 2017

Debt Disclosure [Abstract]

Debt

Debt

The following is a summary of Praxair’s outstanding debt at March 31, 2017 and December 31, 2016:

(Millions of dollars)	March 31, 2017			December 31, 2016
SHORT-TERM
Commercial paper and U.S. bank borrowings	$	360		$	333
Other bank borrowings (primarily international)	51			101
Total short-term debt	411			434
LONG-TERM (a)
U.S. borrowings (U.S. dollar denominated unless otherwise noted)
Floating Rate Notes due 2017 (b)	—			150
1.05% Notes due 2017 (c)	400			400
1.20% Notes due 2018 (c)	499			499
1.25% Notes due 2018 (d)	477			478
4.50% Notes due 2019	598			598
1.90% Notes due 2019	499			499
1.50% Euro-denominated notes due 2020	635			627
2.25% Notes due 2020	299			299
4.05% Notes due 2021	498			497
3.00% Notes due 2021	497			496
2.45% Notes due 2022	597			597
2.20% Notes due 2022	498			498
2.70% Notes due 2023	497			497
1.20% Euro-denominated notes due 2024	583			575
2.65% Notes due 2025	397			397
1.625% Euro-denominated notes due 2025	525			519
3.20% Notes due 2026	725			725
3.55% Notes due 2042	662			662
Other	12			12
International bank borrowings	55			49
Obligations under capital leases	4			7
	8,957			9,081
Less: current portion of long-term debt (b)	(10		)	(164		)
Total long-term debt	8,947			8,917
Total debt	$	9,368		$	9,515

(a) Amounts are net of unamortized discounts, premiums and/or debt issuance costs as applicable.

(b) In February 2017, Praxair repaid $150 million of floating rate notes that became due.

(c) Classified as long-term because of the company’s intent to refinance this debt on a long-term basis and the availability of such financing under the terms of an existing $2.5 billion long-term credit facility.

(d) March 31, 2017 and December 31, 2016 include a $2 million and $4 million fair value increase, respectively, related to hedge accounting. See Note 6 for additional information.

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Financial Instruments

3 Months Ended

Mar. 31, 2017

Derivative Instruments and Hedges, Assets [Abstract]

Financial Instruments

Financial Instruments

In its normal operations, Praxair is exposed to market risks relating to fluctuations in interest rates, foreign currency exchange rates, energy costs and to a lesser extent precious metal prices. The objective of financial risk management at Praxair is to minimize the negative impact of such fluctuations on the company’s earnings and cash flows. To manage these risks, among other strategies, Praxair routinely enters into various derivative financial instruments (“derivatives”) including interest-rate swap and treasury rate lock agreements, currency-swap agreements, forward contracts, currency options, and commodity-swap agreements. These instruments are not entered into for trading purposes and Praxair only uses commonly traded and non-leveraged instruments.

There are three types of derivatives that the company enters into: (i) those relating to fair-value exposures, (ii) those relating to cash-flow exposures, and (iii) those relating to foreign currency net investment exposures. Fair-value exposures relate to recognized assets or liabilities, and firm commitments; cash-flow exposures relate to the variability of future cash flows associated with recognized assets or liabilities, or forecasted transactions; and net investment exposures relate to the impact of foreign currency exchange rate changes on the carrying value of net assets denominated in foreign currencies.

When a derivative is executed and hedge accounting is appropriate, it is designated as either a fair-value hedge, cash-flow hedge, or a net investment hedge. Currently, Praxair designates all interest-rate and treasury-rate locks as hedges for accounting purposes; however, currency contracts are generally not designated as hedges for accounting purposes unless they are related to forecasted transactions. Whether designated as hedges for accounting purposes or not, all derivatives are linked to an appropriate underlying exposure. On an ongoing basis, the company assesses the hedge effectiveness of all derivatives designated as hedges for accounting purposes to determine if they continue to be highly effective in offsetting changes in fair values or cash flows of the underlying hedged items. If it is determined that the hedge is not highly effective, then hedge accounting will be discontinued prospectively.

Counterparties to Praxair’s derivatives are major banking institutions with credit ratings of investment grade or better and no collateral is required, and there are no significant risk concentrations. Management believes the risk of incurring losses on derivative contracts related to credit risk is remote and any losses would be immaterial.

The following table is a summary of the notional amount and fair value of derivatives outstanding at March 31, 2017 and December 31, 2016 for consolidated subsidiaries:

					Fair Value
	Notional Amounts				Assets				Liabilities
(Millions of dollars)	March 31, 2017		December 31, 2016		March 31, 2017		December 31, 2016		March 31, 2017		December 31, 2016
Derivatives Not Designated as Hedging Instruments:
Currency contracts:
Balance sheet items (a)	$	2,196	$	2,104	$	35	$	11	$	7	$	18
Derivatives Designated as Hedging Instruments:
Currency contracts:
Balance sheet items (a)	$	38	$	38	$	1	$	3	$	—	$	—
Forecasted purchases (a)	12		—		—		—		—		—
Interest rate contracts:
Interest rate swaps (b)	475		475		2		4		—		—
Total Hedges	$	525	$	513	$	3	$	7	$	—	$	—
Total Derivatives	$	2,721	$	2,617	$	38	$	18	$	7	$	18

(a) Assets are recorded in prepaid and other current assets, and liabilities are recorded in other current liabilities.

(b) Assets are recorded in other long term assets.

Currency Contracts

Balance Sheet Items

Foreign currency contracts related to balance sheet items consist of forward contracts entered into to manage the exposure to fluctuations in foreign-currency exchange rates on recorded balance sheet assets and liabilities denominated in currencies other than the functional currency of the related operating unit. Certain forward currency contracts are entered into to protect underlying monetary assets and liabilities denominated in foreign currencies from foreign exchange risk and are not designated as hedging instruments. The fair value adjustments on these contracts are offset by the fair value adjustments recorded on the underlying monetary assets and liabilities. Praxair also enters into forward currency contracts, which are designated as hedging instruments, to limit the cash flow exposure on certain foreign-currency denominated intercompany loans. The fair value adjustments on these contracts are recorded to AOCI, with the effective portion immediately reclassified to earnings to offset the fair value adjustments on the underlying debt instrument.

Forecasted Purchases

Foreign currency contracts related to forecasted purchases consist of forward contracts entered into to manage the exposure to fluctuations in foreign-currency exchange rates on forecasted purchases of capital-related equipment and services denominated in currencies other than the functional currency of the related operating units. These forward contracts were designated and accounted for as cash flow hedges.

Net Investment Hedge

In 2014 Praxair designated the €600 million ($635 million as of March 31, 2017) 1.50% Euro-denominated notes due 2020 and the €500 million ($525 million as of March 31, 2017) 1.625% Euro-denominated notes due 2025, as a hedge of the net investment position in its European operations. In 2016 Praxair designated an incremental €550 million ($583 million as of March 31, 2017) 1.20% Euro-denominated notes due 2024 as an additional hedge of the net investment position in its European operations. These Euro-denominated debt instruments reduce the company's exposure to changes in the currency exchange rate on investments in foreign subsidiaries with Euro functional currencies. Since hedge inception, exchange rate movements have reduced long-term debt by $317 million (long-term debt increased by $22 million during the first quarter of 2017), with the offsetting gain shown within the cumulative translation component of AOCI in the condensed consolidated balance sheets and the consolidated statements of comprehensive income.

Interest Rate Contracts

Outstanding Interest Rate Swaps

At March 31, 2017, Praxair had one outstanding interest rate swap agreement with a $475 million notional amount related to the $475 million1.25% notes that mature in 2018. The interest rate swap effectively converts fixed-rate interest to variable-rate interest and is designated as a fair value hedge. Fair value adjustments are recognized in earnings along with an equally offsetting charge / benefit to earnings for the changes in the fair value of the underlying debt instrument. At March 31, 2017, $2 million was recognized as an increase in the fair value of these notes ($4 million at December 31, 2016).

Terminated Treasury Rate Locks

The following table summarizes the unrecognized gains (losses) related to terminated treasury rate lock contracts:

	Year Terminated	Original Gain / (Loss)			Unrecognized Gain / (Loss) (a)
(Millions of dollars)					March 31, 2017			December 31, 2016
Treasury Rate Locks
Underlying debt instrument:
$500 million 2.20% fixed-rate notes that mature in 2022 (b)	2012	$	(2	)	$	(1	)	$	(1	)
$500 million 3.00% fixed-rate notes that mature in 2021 (b)	2011	(11		)	(5		)	(5		)
$600 million 4.50% fixed-rate notes that mature in 2019 (b)	2009	16			4			4
Total - pre-tax					$	(2	)	$	(2	)
Less: income taxes					1			1
After- tax amounts					$	(1	)	$	(1	)

(a) The unrecognized gains / (losses) for the treasury rate locks are shown in accumulated other comprehensive income (“AOCI”) and are being recognized on a straight line basis to interest expense – net over the term of the underlying debt agreements. Refer to the table below summarizing the impact 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 million4.50% fixed-rate notes that mature in 2019. The notional amount of this contract was $500 million.

The following table summarizes the impact of the company’s derivatives on the consolidated statements of income:

	Amount of Pre-Tax Gain (Loss) Recognized in Earnings *
	Quarter Ended March 31,
(Millions of dollars)	2017		2016
Derivatives Not Designated as Hedging Instruments
Currency contracts:
Balance sheet items
Debt-related	$	79	$	67
Other balance sheet items	1		2
Total	$	80	$	69

* The gains (losses) on balance sheet items are offset by gains (losses) recorded on the underlying hedged assets and liabilities. Accordingly, the gains (losses) for the derivatives and the underlying hedged assets and liabilities related to debt items are recorded in the consolidated statements of income as interest expense-net. Other balance sheet items and anticipated net income gains (losses) are recorded in the consolidated statements of income as other income (expenses)-net.

The following tables summarize the impacts of the company's derivatives designated as hedging instruments that impact AOCI:

Derivatives Designated as Hedging Instruments **

	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, 2017			March 31, 2016			March 31, 2017		March 31, 2016
Currency contracts:
Balance sheet items	$	(1	)	$	—		$	—	$	—
Net Investment Hedge	—			(4		)	—		—
Interest rate contracts:
Treasury rate lock contracts	—			—			—		—
Total - pre tax	$	(1	)	$	(4	)	$	—	$	—
Less: income taxes	1			1			—		—
Total - Net of Taxes	$	—		$	(3	)	$	—	$	—

**The gains (losses) on net investment hedges are recorded as a component of AOCI within foreign currency translation adjustments in the condensed consolidated balance sheets and the condensed consolidated statements of comprehensive income. The gains (losses) on treasury rate locks are recorded as a component of AOCI within derivative instruments in the condensed consolidated balance sheets and the condensed consolidated statements of comprehensive income. There was no ineffectiveness for these instruments during 2017 or 2016. The gains (losses) on net investment hedges are reclassified to earnings only when the related currency translation adjustments are required to be reclassified, usually upon sale or liquidation of the investment. The gains (losses) for interest rate contracts are reclassified to earnings as interest expense –net on a straight-line basis over the remaining maturity of the underlying debt. Net losses of approximately $1 million are expected to be reclassified to earnings during the next twelve months.

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Fair Value Disclosures

3 Months Ended

Mar. 31, 2017

Fair Value Disclosures [Abstract]

Fair Value Disclosures

Fair Value Disclosures

The fair value hierarchy prioritizes the input to valuation techniques used to measure fair value into three broad levels as follows:

Level 1 – quoted prices in active markets for identical assets or liabilities

Level 2 – quoted prices for similar assets and liabilities in active markets or inputs that are observable

Level 3 – inputs that are unobservable (for example cash flow modeling inputs based on assumptions)

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table summarizes assets and liabilities measured at fair value on a recurring basis:

	Fair Value Measurements Using
	Level 1		Level 2				Level 3
(Millions of dollars)	March 31, 2017	December 31, 2016	March 31, 2017		December 31, 2016		March 31, 2017	December 31, 2016
Assets
Derivatives	—	—	$	38	$	18	—	—
Liabilities
Derivatives	—	—	$	7	$	18	—	—

The fair values of the derivative assets and liabilities are based on market prices obtained from independent brokers or determined using quantitative models that use as their basis readily observable market parameters that are actively quoted and can be validated through external sources, including third-party pricing services, brokers and market transactions. Investments are marketable securities traded on an exchange.

The fair values of cash and cash equivalents, short-term debt, accounts receivable-net, and accounts payable approximate carrying amounts because of the short maturities of these instruments. The fair value of long-term debt is estimated based on the quoted market prices for similar issues, which is deemed a level 2 measurement. At March 31, 2017, the estimated fair value of Praxair’s long-term debt portfolio was $9,133 million versus a carrying value of $8,957 million. At December 31, 2016, the estimated fair value of Praxair’s long-term debt portfolio was $9,218 million versus a carrying value of $9,081 million. Differences from carrying amounts are attributable to interest-rate changes subsequent to when the debt was issued.

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Earnings Per Share - Praxair, Inc. Shareholders

3 Months Ended

Mar. 31, 2017

Earnings Per Share [Abstract]

Earnings Per Share - Praxair, Inc. Shareholders

Earnings Per Share – Praxair, Inc. Shareholders

Basic earnings per share is computed by dividing Net income – Praxair, Inc. for the period by the weighted average number of Praxair common shares outstanding. Diluted earnings per share is computed by dividing Net income – Praxair, Inc. for the period by the weighted average number of Praxair common shares outstanding and dilutive common stock equivalents, as follows:

	Quarter Ended March 31,
	2017		2016
Numerator (Millions of dollars)
Net income - Praxair, Inc.	$	389	$	356
Denominator (Thousands of shares)
Weighted average shares outstanding	285,140		285,049
Shares earned and issuable under compensation plans	369		380
Weighted average shares used in basic earnings per share	285,509		285,429
Effect of dilutive securities
Stock options and awards	1,875		1,236
Weighted average shares used in diluted earnings per share	287,384		286,665
Basic Earnings Per Share	$	1.36	$	1.25
Diluted Earnings Per Share	$	1.35	$	1.24

Stock options of 4,673,805 and 5,236,570 were antidilutive and therefore excluded in the computation of diluted earnings per share for the quarters ended March 31, 2017 and 2016, respectively.

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Goodwill and Other Intangible Assets (Notes)

3 Months Ended

Mar. 31, 2017

Goodwill [Abstract]

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

Changes in the carrying amount of goodwill for the three months ended March 31, 2017 were as follows:

(Millions of dollars)	North America		South America		Europe		Asia		Surface Technologies		Total
Balance, December 31, 2016	$	2,165	$	132	$	629	$	58	$	133	$	3,117
Acquisitions	—		—		—		—		—		—
Purchase adjustments & other	—		—		—		—		—		—
Foreign currency translation	9		5		7		1		2		24
Balance, March 31, 2017	$	2,174	$	137	$	636	$	59	$	135	$	3,141

Praxair has performed its goodwill impairment tests annually during the second quarter of each year, and historically has determined that the fair value of each of its reporting units was substantially in excess of its carrying value (refer to Note 1 to the consolidated financial statements of Praxair's 2016 Annual Report on Form 10-K). As a result, no impairment was recorded. There were no indicators of impairment through March 31, 2017.

Changes in the carrying amounts of other intangibles for the three months ended March 31, 2017 were as follows:

(Millions of dollars)	Customer & License/Use Agreements			Non-compete Agreements			Patents & Other			Total
Cost:
Balance, December 31, 2016	$	751		$	34		$	51		$	836
Additions	1			—			—			1
Foreign currency translation	6			—			—			6
Other*	—			(8		)	—			(8		)
Balance, March 31, 2017	$	758		$	26		$	51		$	835
Less: Accumulated amortization
Balance, December 31, 2016	$	(214	)	$	(22	)	$	(17	)	$	(253	)
Amortization expense	(10		)	(1		)	(1		)	(12		)
Foreign currency translation	(3		)	—			—			(3		)
Other*	(1		)	8			—			7
Balance, March 31, 2017	$	(228	)	$	(15	)	$	(18	)	$	(261	)
Net balance at March 31, 2017	$	530		$	11		$	33		$	574

* Other primarily relates to write-off of fully amortized assets.

There are no expected residual values related to these intangible assets. The remaining weighted-average amortization period for intangible assets is approximately 17 years.

Total estimated annual amortization expense is as follows:

(Millions of dollars)
Remaining 2017	$	33
2018	44
2019	41
2020	40
2021	38
Thereafter	378
	$	574

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Share-Based Compensation

3 Months Ended

Mar. 31, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-Based Compensation

Share-Based Compensation

Share-based compensation of $12 million ($4 million after-tax) and $8 million ($6 million after-tax) was recognized during the quarters ended March 31, 2017 and 2016, respectively. Expense amounts reflect current estimates of achieving performance targets relating to performance-based compensation. The expense was recorded primarily in selling, general and administrative expenses. There was no share-based compensation cost that was capitalized. For further details regarding Praxair’s share-based compensation arrangements and prior-year grants, refer to Note 15 to the consolidated financial statements of Praxair’s 2016 Annual Report on Form 10-K.

Stock Options

The weighted-average fair value of options granted during the three months ended March 31, 2017 was $12.40 ($8.91 in 2016) based on the Black-Scholes Options-Pricing model. The increase in grant date fair value year-over-year was primarily attributable to an increase in the company's stock price.

The following weighted-average assumptions were used to value the grants in 2017 and 2016:

	Three months ended March 31,
	2017		2016
Dividend yield	2.7	%	2.9	%
Volatility	14.0	%	14.4	%
Risk-free interest rate	2.13	%	1.41	%
Expected term years	6		6

The following table summarizes option activity under the plans as of March 31, 2017 and changes during the three-month period then ended (averages are calculated on a weighted basis; life in years; intrinsic value expressed in millions):

	Number of Options  (000’s)		Average Exercise Price		Average Remaining Life	Aggregate Intrinsic Value
Outstanding at January 1, 2017	11,708		$	101.58
Granted	2,090		118.71
Exercised	(414	)	73.94
Cancelled or Expired	(47	)	110.58
Outstanding at March 31, 2017	13,337		105.09		6.1	$	206
Exercisable at March 31, 2017	9,224		$	101.31	4.8	$	181

The aggregate intrinsic value represents the difference between the company’s closing stock price of $118.60 as of March 31, 2017 and the exercise price multiplied by the number of in the money options outstanding as of that date. The total intrinsic value of stock options exercised during the quarter ended March 31, 2017 was $18 million ($23 million during the same period in 2016).

Cash received from option exercises under all share-based payment arrangements for the quarter ended March 31, 2017 was $19 million ($31 million for the same period in 2016). The cash tax benefit realized from share-based compensation totaled $8 million for the quarter ended March 31, 2017 ($13 million for the same period in 2016 ).

As of March 31, 2017, $36 million of unrecognized compensation cost related to non-vested stock options is expected to be recognized over a weighted-average period of approximately 1 year.

Performance-Based and Restricted Stock Awards

During the three months endedMarch 31, 2017, the company granted performance-based stock awards to employees of223,630 shares that vest, subject to the attainment of pre-established minimum performance criteria, principally on the third anniversary of their date of grant. These awards are tied to either return on capital ("ROC") performance or relative total shareholder return ("TSR") performance versus that of the S&P 500. The actual number of shares issued in settlement of a vested award can range from zero to 200 percent of the target number of shares granted based upon the company’s attainment of specified performance targets at the end of a three-year period. Compensation expense related to these awards is recognized over the three-year performance period based on the fair value of the closing market price of the company’s common stock on the date of the grant and the estimated performance that will be achieved. Compensation expense for ROC awards will be adjusted during the three-year performance period based upon the estimated performance levels that will be achieved. TSR awards are measured at their grant date fair value and not subsequently re-measured.

During the three months endedMarch 31, 2017, the company also granted restricted stock units to employees of 70,884 shares. The majority of the restricted stock units vest at the end of a three-year service period. Compensation expense related to the restricted stock units is recognized on a straight line basis over the vesting period.

The weighted-average fair value of ROC performance-based stock awards and restricted stock units granted during the three months endedMarch 31, 2017 was $109.68 and $109.64, respectively ($93.46 and $93.50 for the same period in 2016). These fair values are based on the closing market price of Praxair’s common stock on the grant date adjusted for dividends that will not be paid during the vesting period.

The weighted-average fair value of performance-based stock tied to relative TSR performance granted during the three months ended March 31, 2017 was $124.12 ($124.18 in 2016), and was estimated using a Monte Carlo simulation performed as of the grant date.

The following table summarizes non-vested performance-based and restricted stock award activity as of March 31, 2017 and changes during the three months then ended (shares based on target amounts, averages are calculated on a weighted basis):

	Performance-Based				Restricted Stock
	Number  of Shares (000’s)		Average Grant  Date Fair Value		Number  of Shares (000’s)		Average Grant  Date Fair Value
Non-vested at January 1, 2017	714		$	115.72	274		$	109.49
Granted	224		114.82		71		109.64
Vested	(76	)	121.16		(62	)	121.15
Cancelled and Forfeited	(56	)	115.66		(3	)	109.50
Non-vested at March 31, 2017	806		$	114.62	280		$	106.96

There are approximately 11 thousand performance-based shares and 6 thousand restricted stock shares that are non-vested at March 31, 2017 which will be settled in cash due to foreign regulatory limitations. The liability related to these grants reflects the current estimate of performance that will be achieved and the current common stock price.

As of March 31, 2017, based on current estimates of future performance, $37 million of unrecognized compensation cost related to performance-based awards is expected to be recognized through the first quarter of 2020 and $16 million of unrecognized compensation cost related to the restricted stock awards is expected to be recognized primarily through the first quarter of 2020.

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Retirement Programs

3 Months Ended

Mar. 31, 2017

General Discussion of Pension and Other Postretirement Benefits [Abstract]

Retirement Programs

Retirement Programs

The components of net pension and postretirement benefits other than pensions (“OPEB”) costs for the quarters ended March 31, 2017 and 2016 are shown below:

	Quarter Ended March 31,
	Pensions						OPEB
(Millions of dollars)	2017			2016			2017			2016
Service cost	$	11		$	12		$	1		$	1
Interest cost	26			24			1			1
Expected return on plan assets	(40		)	(39		)	—			—
Net amortization and deferral	17			15			(1		)	(1		)
Curtailment gain (1)	—			—			(18		)	—
Net periodic benefit cost	$	14		$	12		$	(17	)	$	1

(1) The curtailment gain recorded in the first quarter of 2017 resulted from the termination of an OPEB plan in South America.

Praxair estimates that 2017 required contributions to its pension plans will be in the range of $10 million to $15 million, of which $3 million have been made through March 31, 2017.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2017

Commitments and Contingencies Disclosure [Abstract]

Commitments And Contingencies

Commitments and Contingencies

Contingent Liabilities

Praxair is subject to various lawsuits and government investigations that arise from time to time in the ordinary course of business. These actions are based upon alleged environmental, tax, antitrust and personal injury claims, among others. Praxair has strong defenses in these cases and intends to defend itself vigorously. It is possible that the company may incur losses in connection with some of these actions in excess of accrued liabilities. Management does not anticipate that in the aggregate such losses would have a material adverse effect on the company’s consolidated financial position or liquidity; however, it is possible that the final outcomes could have a significant impact on the company’s reported results of operations in any given period (see Note 17 to the consolidated financial statements of Praxair’s 2016 Annual Report on Form 10-K).

Significant matters are:

• During May 2009, the Brazilian government published Law 11941/2009 instituting a new voluntary amnesty program (“Refis Program”) which allowed Brazilian companies to settle certain federal tax disputes at reduced amounts. During the 2009 third quarter, Praxair decided that it was economically beneficial to settle many of its outstanding federal tax disputes and such disputes were enrolled in the Refis Program, subject to final calculation and review by the Brazilian federal government. The Company recorded estimated liabilities based on the terms of the Refis Program. Since 2009, Praxair has been unable to reach final agreement on the calculations and recently initiated litigation against the government in an attempt to resolve certain items. Open issues relate to the following matters: (i) application of cash deposits and net operating loss carryforwards to satisfy obligations, and (ii) the amount of tax reductions available under the Refis Program. It is difficult to estimate the timing of resolution of legal matters in Brazil.

• At March 31, 2017 the most significant non-income and income tax claims in Brazil, after enrollment in the Refis Program, relate to state VAT tax matters and a federal income tax matter where the taxing authorities are challenging the tax rate that should be applied to income generated by a subsidiary company. The total estimated exposure relating to such claims, including interest and penalties, as appropriate, is approximately $235 million. Praxair has not recorded any liabilities related to such claims based on management judgments, after considering judgments and opinions of outside counsel. Because litigation in Brazil historically takes many years to resolve, it is very difficult to estimate the timing of resolution of these matters; however, it is possible that certain of these matters may be resolved within the near term. The company is vigorously defending against the proceedings.

• On September 1, 2010, CADE (Brazilian Administrative Council for Economic Defense) announced alleged anticompetitive activity on the part of five industrial gas companies in Brazil and imposed fines on all five companies. Originally, CADE imposed a civil fine of R$2.2 billion Brazilian reais (US$694 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$537 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.

On October 19, 2010, White Martins filed an annulment petition (“appeal”) with the Federal Court in Brasilia seeking to have the fine against White Martins entirely overturned. In order to suspend payment of the fine pending the completion of the appeal process, Brazilian law required that the company tender a form of guarantee in the amount of the fine as security. Initially, 50% of the guarantee was satisfied by letters of credit with a financial institution and 50% by equity of a Brazilian subsidiary. On April 15, 2016, the Ninth Federal Court in Brasilia allowed White Martins to withdraw and cancel the letters of credit. Accordingly, the guarantee is currently satisfied solely by equity of a Brazilian subsidiary.

On September 14, 2015, the Ninth Federal Court of Brasilia overturned the fine against White Martins and declared the original CADE administrative proceeding to be null and void. On June 30, 2016, CADE filed an appeal against this decision with the Federal Circuit Court in Brasilia.

Praxair strongly believes that the allegations are without merit and that the fine will be entirely overturned during the appeal process. The company further believes that it has strong defenses and will vigorously defend against the allegations and related fine up to such levels of the Federal Courts in Brazil as may be necessary. Because appeals in Brazil historically take many years to resolve, it is very difficult to estimate when the appeal will be finally decided. Based on management judgments, after considering judgments and opinions of outside counsel, no reserve has been recorded for this proceeding as management does not believe that a loss is probable.

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Segments

3 Months Ended

Mar. 31, 2017

Segment Reporting [Abstract]

Segments

Segments

Sales and operating profit by segment for the quarters ended March 31, 2017 and 2016 are shown below. For a description of Praxair’s operating segments, refer to Note 18 to the consolidated financial statements of Praxair’s 2016 Annual Report on Form 10-K.

	Quarter Ended March 31,
(Millions of dollars)	2017		2016
SALES(a)
North America	$	1,458	$	1,353
Europe	356		320
South America	369		311
Asia	395		376
Surface Technologies	150		149
Total sales	$	2,728	$	2,509

	Quarter Ended March 31,
(Millions of dollars)	2017			2016
OPERATING PROFIT
North America	$	357		$	349
Europe	66			62
South America	64			55
Asia	75			63
Surface Technologies	26			25
Segment operating profit	588			554
Transaction costs and other charges (Note 2)	(6		)	—
Total operating profit	$	582		$	554

(a) Sales reflect external sales only. Intersegment sales, primarily from North America to other segments, were not material.

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Equity and Redeemable Noncontrolling Interests

3 Months Ended

Mar. 31, 2017

Equity And Noncontrolling Interests Disclosure [Abstract]

Equity and Redeemable Noncontrolling Interests

Equity and Redeemable Noncontrolling Interests

Equity

A summary of the changes in total equity for the quarters ended March 31, 2017 and 2016 is provided below:

	Quarter Ended March 31,
(Millions of dollars)	2017									2016
Activity	Praxair, Inc. Shareholders’ Equity			Noncontrolling Interests			Total Equity			Praxair, Inc. Shareholders’ Equity			Noncontrolling Interests			Total Equity
Balance, beginning of period	$	5,021		$	420		$	5,441		$	4,389		$	404		$	4,793
Net income (a)	389			15			404			356			8			364
Other comprehensive income (loss)	315			5			320			346			10			356
Noncontrolling interests:
Additions (reductions)	—			—			—			—			—			—
Dividends and other capital changes	—			(4		)	(4		)	—			(5		)	(5		)
Redemption value adjustments	—			—			—			—			—			—
Dividends to Praxair, Inc. common stock holders ($0.7875 per share in 2017 and $0.75 per share in 2016)	(225		)	—			(225		)	(214		)	—			(214		)
Issuances of common stock:
For the dividend reinvestment and stock purchase plan	2			—			2			2			—			2
For employee savings and incentive plans	15			—			15			27			—			27
Purchases of common stock	—			—			—			(32		)	—			(32		)
Tax benefit from share-based compensation	—			—			—			6			—			6
Share-based compensation	12			—			12			8			—			8
Balance, end of period	$	5,529		$	436		$	5,965		$	4,888		$	417		$	5,305

(a) Net income for noncontrolling interests excludes Net income related to redeemable noncontrolling interests, which is not part of total equity (see redeemable noncontrolling interests section below). For the quarter ended March 31,2017 net income was insignificant ($2 million for the same time period in 2016).

The components of AOCI are as follows:

	March 31,			December 31,
(Millions of dollars)	2017			2016
Cumulative translation adjustment - net of taxes:
North America	$	(926	)	$	(1,038	)
South America	(1,904		)	(1,969		)
Europe	(474		)	(504		)
Asia	(281		)	(383		)
Surface Technologies	(46		)	(52		)
	(3,631		)	(3,946		)
Derivatives - net of taxes	(1		)	(1		)
Pension / OPEB funded status obligation (net of $351 million and $352 million tax benefit at March 31, 2017 and December 31, 2016, respectively)	(653		)	(653		)
	$	(4,285	)	$	(4,600	)

Redeemable Noncontrolling Interests

Noncontrolling interests with redemption features, such as put/sell options, that are not solely within the Company’s control (“redeemable noncontrolling interests”) are reported separately in the consolidated balance sheets at the greater of carrying value or redemption value. For redeemable noncontrolling interests that are not yet exercisable, Praxair calculates the redemption value by accreting the carrying value to the redemption value over the period until exercisable. If the redemption value is greater than the carrying value, any increase is adjusted directly to equity and does not impact net income.

At March 31, 2017, redeemable noncontrolling interests includes one packaged gas distributor in the United States where the noncontrolling shareholder has a put option. At March 31, 2016, redeemable noncontrolling interests also included Yara Praxair Holding AS, a 66%-owned joint venture in Scandinavia. On June 1, 2016, Praxair acquired the remaining 34% stake in this joint venture for $104 million.

The following is a summary of the changes in redeemable noncontrolling interests for the three months ended March 31, 2017 and 2016:

(Millions of dollars)	2017			2016
Balance, January 1	$	11		$	113
Net income	—			2
Distributions to noncontrolling interest and other	(1		)	(2		)
Redemption value adjustments/accretion	—			—
Foreign currency translation	—			6
Purchase of noncontrolling interest	—			—
Balance, March 31	$	10		$	119

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2017

Accounting Policies [Abstract]

Accounting Standards Implemented in 2017

Accounting Standards Implemented in 2017

Simplifying the Measurement of Inventory – In July 2015, the FASB issued updated guidance on the measurement of inventory. The new guidance requires that inventory be measured at the lower of cost or net realizable value, previously inventory was measured at the lower of cost or market. The adoption of this guidance resulted in no material impact.

Accounting Standards to be Implemented

Accounting Standards to be Implemented

• Revenue Recognition – In May 2014, the FASB issued updated guidance on the reporting and disclosure of revenue. The new guidance requires the evaluation of contracts with customers to determine the recognition of revenue when or as the entity satisfies a performance obligation, and requires expanded disclosures. Subsequently, the FASB has issued amendments to certain aspects of the guidance including the effective date. This guidance is required to be effective beginning in the first quarter 2018 (with early adoption beginning in 2017 optional) and includes several transition options.

The Company is currently in the process of evaluating and implementing this new guidance, as required, and at this time expects to use the modified retrospective basis starting in 2018. Praxair will provide additional updates in future filings, as appropriate.

• Leases – In February 2016, the FASB issued updated guidance on the accounting and financial statement presentation of leases. The new guidance requires lessees to recognize a right-of-use asset and lease liability for all leases, except those that meet certain scope exceptions, and would require expanded quantitative and qualitative disclosures. This guidance will be effective for Praxair beginning in the first quarter 2019, with early adoption optional, and requires companies to transition using a modified retrospective approach. Praxair is in the early stages of reviewing the new guidance and will provide updates on the expected impact to Praxair in future filings, as 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.

• Classification of Certain Cash Receipts and Cash Payments – In August 2016, the FASB issued updated guidance on the classification of certain cash receipts and cash payments within the statement of cash flows. The update provides accounting guidance for specific cash flow issues with the objective of reducing diversity in practice. This new guidance will be effective for Praxair beginning in the first quarter 2018 on a retrospective basis, with early adoption optional. Praxair does not expect this requirement to have a material impact.

• Intra-Entity Asset Transfers – In October 2016, the FASB issued updated guidance for income tax accounting of intra-entity transfers of assets other than inventory. The update requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory in the period when the transfer occurs. This new guidance will be effective for Praxair beginning in the first quarter 2018, with early adoption permitted, and should be applied on a modified retrospective basis. We are currently evaluating the impact this update will have on our consolidated financial statements.

• Simplifying the Test for Goodwill Impairment – In January 2017, the FASB issued updated guidance on the measurement of goodwill. The new guidance eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge. The guidance will be effective for Praxair beginning in the first quarter 2020 with early adoption permitted. Praxair does not expect this guidance to have a material impact.

• Pension Costs - In March 2017, the FASB issued updated guidance on the presentation of net periodic pension cost and net periodic postretirement benefit cost. The new guidance requires the service cost component be reported in the same line item or items as other compensation costs arising from services rendered by employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and not included within operating profit. This guidance will be effective for Praxair beginning in the first quarter 2018, with early adoption optional, and requires companies to transition using a retrospective approach for the presentation of the service cost component and the other cost components and prospectively for the capitalization of the service cost component. Praxair is currently evaluating the impact this update will have on our consolidated financial statements.

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Transaction Costs and Other Charges (Tables)

3 Months Ended

Mar. 31, 2017

Unusual or Infrequent Items, or Both [Abstract]

2016 Cost Reduction Program Activity Table

The following table summarizes the activities related to the company's cost reduction programs for the three months ended March 31, 2017:

(millions of dollars)	Severance costs			Other Charges			Total
Balance, January 1, 2017	$	38		$	27		$	65
Less: Cash payments	(8		)	(1		)	(9		)
Less: Non-cash charges	—			—			—
Foreign currency translation	—			—			—
Balance, March 31, 2017	$	30		$	26		$	56

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Supplemental Information (Tables)

3 Months Ended

Mar. 31, 2017

Supplemental Information [Abstract]

Schedule Of Inventories Table

The following is a summary of Praxair’s consolidated inventories:

(Millions of dollars)	March 31, 2017		December 31, 2016
Inventories
Raw materials and supplies	$	196	$	197
Work in process	47		45
Finished goods	318		308
Total inventories	$	561	$	550

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Debt (Tables)

3 Months Ended

Mar. 31, 2017

Debt Disclosure [Abstract]

Long-term And Short-term Debt Table

The following is a summary of Praxair’s outstanding debt at March 31, 2017 and December 31, 2016:

(Millions of dollars)	March 31, 2017			December 31, 2016
SHORT-TERM
Commercial paper and U.S. bank borrowings	$	360		$	333
Other bank borrowings (primarily international)	51			101
Total short-term debt	411			434
LONG-TERM (a)
U.S. borrowings (U.S. dollar denominated unless otherwise noted)
Floating Rate Notes due 2017 (b)	—			150
1.05% Notes due 2017 (c)	400			400
1.20% Notes due 2018 (c)	499			499
1.25% Notes due 2018 (d)	477			478
4.50% Notes due 2019	598			598
1.90% Notes due 2019	499			499
1.50% Euro-denominated notes due 2020	635			627
2.25% Notes due 2020	299			299
4.05% Notes due 2021	498			497
3.00% Notes due 2021	497			496
2.45% Notes due 2022	597			597
2.20% Notes due 2022	498			498
2.70% Notes due 2023	497			497
1.20% Euro-denominated notes due 2024	583			575
2.65% Notes due 2025	397			397
1.625% Euro-denominated notes due 2025	525			519
3.20% Notes due 2026	725			725
3.55% Notes due 2042	662			662
Other	12			12
International bank borrowings	55			49
Obligations under capital leases	4			7
	8,957			9,081
Less: current portion of long-term debt (b)	(10		)	(164		)
Total long-term debt	8,947			8,917
Total debt	$	9,368		$	9,515

(a) Amounts are net of unamortized discounts, premiums and/or debt issuance costs as applicable.

(b) In February 2017, Praxair repaid $150 million of floating rate notes that became due.

(c) Classified as long-term because of the company’s intent to refinance this debt on a long-term basis and the availability of such financing under the terms of an existing $2.5 billion long-term credit facility.

(d) March 31, 2017 and December 31, 2016 include a $2 million and $4 million fair value increase, respectively, related to hedge accounting. See Note 6 for additional information.

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Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2017

Financial Instruments (Tables) [Abstract]

Derivative Instruments Fair Value and Notional Amounts Table

The following table is a summary of the notional amount and fair value of derivatives outstanding at March 31, 2017 and December 31, 2016 for consolidated subsidiaries:

					Fair Value
	Notional Amounts				Assets				Liabilities
(Millions of dollars)	March 31, 2017		December 31, 2016		March 31, 2017		December 31, 2016		March 31, 2017		December 31, 2016
Derivatives Not Designated as Hedging Instruments:
Currency contracts:
Balance sheet items (a)	$	2,196	$	2,104	$	35	$	11	$	7	$	18
Derivatives Designated as Hedging Instruments:
Currency contracts:
Balance sheet items (a)	$	38	$	38	$	1	$	3	$	—	$	—
Forecasted purchases (a)	12		—		—		—		—		—
Interest rate contracts:
Interest rate swaps (b)	475		475		2		4		—		—
Total Hedges	$	525	$	513	$	3	$	7	$	—	$	—
Total Derivatives	$	2,721	$	2,617	$	38	$	18	$	7	$	18

(a) Assets are recorded in prepaid and other current assets, and liabilities are recorded in other current liabilities.

(b) Assets are recorded in other long term assets

Schedule Of Treasury Rate Lock Contracts Table Text Block

The following table summarizes the unrecognized gains (losses) related to terminated treasury rate lock contracts:

	Year Terminated	Original Gain / (Loss)			Unrecognized Gain / (Loss) (a)
(Millions of dollars)					March 31, 2017			December 31, 2016
Treasury Rate Locks
Underlying debt instrument:
$500 million 2.20% fixed-rate notes that mature in 2022 (b)	2012	$	(2	)	$	(1	)	$	(1	)
$500 million 3.00% fixed-rate notes that mature in 2021 (b)	2011	(11		)	(5		)	(5		)
$600 million 4.50% fixed-rate notes that mature in 2019 (b)	2009	16			4			4
Total - pre-tax					$	(2	)	$	(2	)
Less: income taxes					1			1
After- tax amounts					$	(1	)	$	(1	)

(a) The unrecognized gains / (losses) for the treasury rate locks are shown in accumulated other comprehensive income (“AOCI”) and are being recognized on a straight line basis to interest expense – net over the term of the underlying debt agreements. Refer to the table below summarizing the impact 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 million4.50% fixed-rate notes that mature in 2019. The notional amount of this contract was $500 million.

Schedule of Derivative Instruments Not Designated as Hedging Instruments Table

The following table summarizes the impact of the company’s derivatives on the consolidated statements of income:

	Amount of Pre-Tax Gain (Loss) Recognized in Earnings *
	Quarter Ended March 31,
(Millions of dollars)	2017		2016
Derivatives Not Designated as Hedging Instruments
Currency contracts:
Balance sheet items
Debt-related	$	79	$	67
Other balance sheet items	1		2
Total	$	80	$	69

* The gains (losses) on balance sheet items are offset by gains (losses) recorded on the underlying hedged assets and liabilities. Accordingly, the gains (losses) for the derivatives and the underlying hedged assets and liabilities related to debt items are recorded in the consolidated statements of income as interest expense-net. Other balance sheet items and anticipated net income gains (losses) are recorded in the consolidated statements of income as other income (expenses)-net.

Schedule of Derivative Instruments Designated As Hedging Instruments Table

The following tables summarize the impacts of the company's derivatives designated as hedging instruments that impact AOCI:

Derivatives Designated as Hedging Instruments **

	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, 2017			March 31, 2016			March 31, 2017		March 31, 2016
Currency contracts:
Balance sheet items	$	(1	)	$	—		$	—	$	—
Net Investment Hedge	—			(4		)	—		—
Interest rate contracts:
Treasury rate lock contracts	—			—			—		—
Total - pre tax	$	(1	)	$	(4	)	$	—	$	—
Less: income taxes	1			1			—		—
Total - Net of Taxes	$	—		$	(3	)	$	—	$	—

**The gains (losses) on net investment hedges are recorded as a component of AOCI within foreign currency translation adjustments in the condensed consolidated balance sheets and the condensed consolidated statements of comprehensive income. The gains (losses) on treasury rate locks are recorded as a component of AOCI within derivative instruments in the condensed consolidated balance sheets and the condensed consolidated statements of comprehensive income. There was no ineffectiveness for these instruments during 2017 or 2016. The gains (losses) on net investment hedges are reclassified to earnings only when the related currency translation adjustments are required to be reclassified, usually upon sale or liquidation of the investment. The gains (losses) for interest rate contracts are reclassified to earnings as interest expense –net on a straight-line basis over the remaining maturity of the underlying debt. Net losses of approximately $1 million are expected to be reclassified to earnings during the next twelve months.

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Fair Value Disclosures (Tables)

3 Months Ended

Mar. 31, 2017

Fair Value Measurements [Abstract]

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis Table

The following table summarizes assets and liabilities measured at fair value on a recurring basis:

	Fair Value Measurements Using
	Level 1		Level 2				Level 3
(Millions of dollars)	March 31, 2017	December 31, 2016	March 31, 2017		December 31, 2016		March 31, 2017	December 31, 2016
Assets
Derivatives	—	—	$	38	$	18	—	—
Liabilities
Derivatives	—	—	$	7	$	18	—	—

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Earnings Per Share - Praxair, Inc. Shareholders (Tables)

3 Months Ended

Mar. 31, 2017

Earnings Per Share [Abstract]

Earnings Per Share Table - Praxair, Inc. Shareholders - Table

Basic earnings per share is computed by dividing Net income – Praxair, Inc. for the period by the weighted average number of Praxair common shares outstanding. Diluted earnings per share is computed by dividing Net income – Praxair, Inc. for the period by the weighted average number of Praxair common shares outstanding and dilutive common stock equivalents, as follows:

	Quarter Ended March 31,
	2017		2016
Numerator (Millions of dollars)
Net income - Praxair, Inc.	$	389	$	356
Denominator (Thousands of shares)
Weighted average shares outstanding	285,140		285,049
Shares earned and issuable under compensation plans	369		380
Weighted average shares used in basic earnings per share	285,509		285,429
Effect of dilutive securities
Stock options and awards	1,875		1,236
Weighted average shares used in diluted earnings per share	287,384		286,665
Basic Earnings Per Share	$	1.36	$	1.25
Diluted Earnings Per Share	$	1.35	$	1.24

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Goodwill and Other Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2017

Schedule of Goodwill [Abstract]

Schedule of Goodwill Table

Changes in the carrying amount of goodwill for the three months ended March 31, 2017 were as follows:

(Millions of dollars)	North America		South America		Europe		Asia		Surface Technologies		Total
Balance, December 31, 2016	$	2,165	$	132	$	629	$	58	$	133	$	3,117
Acquisitions	—		—		—		—		—		—
Purchase adjustments & other	—		—		—		—		—		—
Foreign currency translation	9		5		7		1		2		24
Balance, March 31, 2017	$	2,174	$	137	$	636	$	59	$	135	$	3,141

Schedule of Other Intangible Assets Table

Changes in the carrying amounts of other intangibles for the three months ended March 31, 2017 were as follows:

(Millions of dollars)	Customer & License/Use Agreements			Non-compete Agreements			Patents & Other			Total
Cost:
Balance, December 31, 2016	$	751		$	34		$	51		$	836
Additions	1			—			—			1
Foreign currency translation	6			—			—			6
Other*	—			(8		)	—			(8		)
Balance, March 31, 2017	$	758		$	26		$	51		$	835
Less: Accumulated amortization
Balance, December 31, 2016	$	(214	)	$	(22	)	$	(17	)	$	(253	)
Amortization expense	(10		)	(1		)	(1		)	(12		)
Foreign currency translation	(3		)	—			—			(3		)
Other*	(1		)	8			—			7
Balance, March 31, 2017	$	(228	)	$	(15	)	$	(18	)	$	(261	)
Net balance at March 31, 2017	$	530		$	11		$	33		$	574

* Other primarily relates to write-off of fully amortized assets.

Schedule of Estimated Future Amortization Expense Table

Total estimated annual amortization expense is as follows:

(Millions of dollars)
Remaining 2017	$	33
2018	44
2019	41
2020	40
2021	38
Thereafter	378
	$	574

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Share-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions

The following weighted-average assumptions were used to value the grants in 2017 and 2016:

	Three months ended March 31,
	2017		2016
Dividend yield	2.7	%	2.9	%
Volatility	14.0	%	14.4	%
Risk-free interest rate	2.13	%	1.41	%
Expected term years	6		6

Schedule of Share-based Compensation, Stock Options, Activity

The following table summarizes option activity under the plans as of March 31, 2017 and changes during the three-month period then ended (averages are calculated on a weighted basis; life in years; intrinsic value expressed in millions):

	Number of Options  (000’s)		Average Exercise Price		Average Remaining Life	Aggregate Intrinsic Value
Outstanding at January 1, 2017	11,708		$	101.58
Granted	2,090		118.71
Exercised	(414	)	73.94
Cancelled or Expired	(47	)	110.58
Outstanding at March 31, 2017	13,337		105.09		6.1	$	206
Exercisable at March 31, 2017	9,224		$	101.31	4.8	$	181

Performance Based and Restricted Stock Activity

The following table summarizes non-vested performance-based and restricted stock award activity as of March 31, 2017 and changes during the three months then ended (shares based on target amounts, averages are calculated on a weighted basis):

	Performance-Based				Restricted Stock
	Number  of Shares (000’s)		Average Grant  Date Fair Value		Number  of Shares (000’s)		Average Grant  Date Fair Value
Non-vested at January 1, 2017	714		$	115.72	274		$	109.49
Granted	224		114.82		71		109.64
Vested	(76	)	121.16		(62	)	121.15
Cancelled and Forfeited	(56	)	115.66		(3	)	109.50
Non-vested at March 31, 2017	806		$	114.62	280		$	106.96

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Retirement Programs (Tables)

3 Months Ended

Mar. 31, 2017

Pension And Other Postretirement Benefits (Tables) [Abstract]

Schedule of Pension and OPEB Net Periodic Benefit Costs Table

The components of net pension and postretirement benefits other than pensions (“OPEB”) costs for the quarters ended March 31, 2017 and 2016 are shown below:

	Quarter Ended March 31,
	Pensions						OPEB
(Millions of dollars)	2017			2016			2017			2016
Service cost	$	11		$	12		$	1		$	1
Interest cost	26			24			1			1
Expected return on plan assets	(40		)	(39		)	—			—
Net amortization and deferral	17			15			(1		)	(1		)
Curtailment gain (1)	—			—			(18		)	—
Net periodic benefit cost	$	14		$	12		$	(17	)	$	1

(1) The curtailment gain recorded in the first quarter of 2017 resulted from the termination of an OPEB plan in South America.

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Segments (Tables)

3 Months Ended

Mar. 31, 2017

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, Sales Table

(a) Sales reflect external sales only. Intersegment sales, primarily from North America to other segments, were not material

Sales and operating profit by segment for the quarters ended March 31, 2017 and 2016 are shown below. For a description of Praxair’s operating segments, refer to Note 18 to the consolidated financial statements of Praxair’s 2016 Annual Report on Form 10-K.

	Quarter Ended March 31,
(Millions of dollars)	2017		2016
SALES(a)
North America	$	1,458	$	1,353
Europe	356		320
South America	369		311
Asia	395		376
Surface Technologies	150		149
Total sales	$	2,728	$	2,509

Schedule Of Segment Reporting Information, Operating Profit

	Quarter Ended March 31,
(Millions of dollars)	2017			2016
OPERATING PROFIT
North America	$	357		$	349
Europe	66			62
South America	64			55
Asia	75			63
Surface Technologies	26			25
Segment operating profit	588			554
Transaction costs and other charges (Note 2)	(6		)	—
Total operating profit	$	582		$	554

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Equity and Redeemable Noncontrolling Interests (Tables)

3 Months Ended

Mar. 31, 2017

Equity and Redeemable Noncontrolling Interests Table Abstract

Schedule of Stockholders Equity

A summary of the changes in total equity for the quarters ended March 31, 2017 and 2016 is provided below:

	Quarter Ended March 31,
(Millions of dollars)	2017									2016
Activity	Praxair, Inc. Shareholders’ Equity			Noncontrolling Interests			Total Equity			Praxair, Inc. Shareholders’ Equity			Noncontrolling Interests			Total Equity
Balance, beginning of period	$	5,021		$	420		$	5,441		$	4,389		$	404		$	4,793
Net income (a)	389			15			404			356			8			364
Other comprehensive income (loss)	315			5			320			346			10			356
Noncontrolling interests:
Additions (reductions)	—			—			—			—			—			—
Dividends and other capital changes	—			(4		)	(4		)	—			(5		)	(5		)
Redemption value adjustments	—			—			—			—			—			—
Dividends to Praxair, Inc. common stock holders ($0.7875 per share in 2017 and $0.75 per share in 2016)	(225		)	—			(225		)	(214		)	—			(214		)
Issuances of common stock:
For the dividend reinvestment and stock purchase plan	2			—			2			2			—			2
For employee savings and incentive plans	15			—			15			27			—			27
Purchases of common stock	—			—			—			(32		)	—			(32		)
Tax benefit from share-based compensation	—			—			—			6			—			6
Share-based compensation	12			—			12			8			—			8
Balance, end of period	$	5,529		$	436		$	5,965		$	4,888		$	417		$	5,305

(a) Net income for noncontrolling interests excludes Net income related to redeemable noncontrolling interests, which is not part of total equity (see redeemable noncontrolling interests section below). For the quarter ended March 31,2017 net income was insignificant ($2 million for the same time period in 2016).

Schedule of Accumulated Other Comprehensive Income (Loss)

The components of AOCI are as follows:

	March 31,			December 31,
(Millions of dollars)	2017			2016
Cumulative translation adjustment - net of taxes:
North America	$	(926	)	$	(1,038	)
South America	(1,904		)	(1,969		)
Europe	(474		)	(504		)
Asia	(281		)	(383		)
Surface Technologies	(46		)	(52		)
	(3,631		)	(3,946		)
Derivatives - net of taxes	(1		)	(1		)
Pension / OPEB funded status obligation (net of $351 million and $352 million tax benefit at March 31, 2017 and December 31, 2016, respectively)	(653		)	(653		)
	$	(4,285	)	$	(4,600	)

Redeemable Noncontrolling Interest

The following is a summary of the changes in redeemable noncontrolling interests for the three months ended March 31, 2017 and 2016:

(Millions of dollars)	2017			2016
Balance, January 1	$	11		$	113
Net income	—			2
Distributions to noncontrolling interest and other	(1		)	(2		)
Redemption value adjustments/accretion	—			—
Foreign currency translation	—			6
Purchase of noncontrolling interest	—			—
Balance, March 31	$	10		$	119

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Transaction Costs and Other Charges (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2017	Sep. 30, 2016	Mar. 31, 2016	Sep. 30, 2015	Jun. 30, 2015	Dec. 31, 2016
Unusual or Infrequent Item, or Both [Line Items]
Repayments of Long-term Debt	$ 156		$ 726
Income Tax Expense (Benefit)	149		133
Net (Income) Loss Attributable to Noncontrolling Interest	(15)		(10)
Net Income (Loss) Attributable to Parent	389		356
Total Cost Reduction Program [Member]
Unusual or Infrequent Item, or Both [Line Items]
Restructuring Reserve	56					$ 65
Payments for Restructuring	(9)
Net Income (Loss) Attributable to Parent		$ (63)		$ (13)	$ (112)
Income (Loss) from Continuing Operations, Per Diluted Share		$ (0.22)		$ (0.04)	$ (0.39)
Restructuring Charges		$ 96		$ 19	$ 146
Other Restructuring [Member]
Unusual or Infrequent Item, or Both [Line Items]
Restructuring Reserve	26					27
Payments for Restructuring	(1)
Employee Severance [Member]
Unusual or Infrequent Item, or Both [Line Items]
Restructuring Reserve	30					$ 38
Payments for Restructuring	(8)
Transaction Costs [Member]
Unusual or Infrequent Item, or Both [Line Items]
Transaction Costs	$ 6
Income (Loss) from Continuing Operations, Per Diluted Share	$ (0.02)
US Long-term 5.20% Notes due 2017 [Member]
Unusual or Infrequent Item, or Both [Line Items]
Repayments of Long-term Debt			$ 325
Debt Instrument, Interest Rate, Stated Percentage			5.20%
Gain (Loss) on Extinguishment of Debt			$ (16)
Extinguishment of Debt, Gain (Loss), Net of Tax			$ (10)
Extinguishment of Debt, Gain (Loss), Per Share, Net of Tax			$ (0.04)

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Acquisitions (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Business Acquisition Line Items
Payments to Acquire Businesses and Interest in Affiliates	$ 1	$ 63
Goodwill, Acquired During Period		34
Finite-lived Intangible Assets Acquired	$ 1	$ 15

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Supplemental Information (Details) - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Prepaid Expense and Other Assets, Noncurrent [Abstract]
Long-term receivables, net	$ 45	$ 46
Long-term receivables reserve	52	50
Inventory, Finished Goods and Work in Process, Gross [Abstract]
Raw materials and supplies	196	197
Work in process	47	45
Finished goods	318	308
Total inventories	$ 561	$ 550

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Debt (ST and LT Debt) (Details) $ / shares in Units, € in Millions		3 Months Ended
		Mar. 31, 2017 USD ($)	Mar. 31, 2016 USD ($) $ / shares Rate	Mar. 31, 2017 EUR (€)	Mar. 31, 2017 USD ($)	Dec. 31, 2016 USD ($) Rate
Debt Instrument Line Items
Repayments of Long-term Debt		$ 156,000,000	$ 726,000,000
Fair Value Of Debt Instrument Increase Or Decrease					$ 2,000,000	$ 4,000,000
Long-term Debt, Current and Noncurrent [Abstract]
Commercial Paper and U.S. bank borrowings					360,000,000	333,000,000
Other bank borrowings (primarily international)					51,000,000	101,000,000
Total short-term debt					411,000,000	434,000,000
Obligations under capital lease					4,000,000	7,000,000
Carrying value of long-term debt including current portion					8,957,000,000	9,081,000,000
Less: current portion of long-term debt					10,000,000	164,000,000
Total long-term debt					8,947,000,000	8,917,000,000
Total debt					$ 9,368,000,000	9,515,000,000
UsLongTermFloatingRateNoteDue2017 [Member]
Debt Instrument Line Items
Repayments of Long-term Debt	[1],[2]	$ 150,000,000
Senior Notes	[1],[2]					$ 150,000,000
US Long-term 5.20% Notes due 2017
Debt Instrument Line Items
Repayments of Long-term Debt			$ 325,000,000
Debt Instrument, Interest Rate, Stated Percentage | Rate			5.20%
Gains (Losses) on Extinguishment of Debt			$ (16,000,000)
Extinguishment of Debt, Gain (Loss), Net of Tax			$ (10,000,000)
Extinguishment of Debt, Gain (Loss), Per Share, Net of Tax | $ / shares			$ (0.04)
US Long-term 1.05% Notes due 2017
Debt Instrument Line Items
Debt Instrument, Interest Rate, Stated Percentage				1.05%	1.05%	1.05%
Senior Notes	[1],[3]				$ 400,000,000	$ 400,000,000
US Long-term 1.20% Notes Due 2018
Debt Instrument Line Items
Debt Instrument, Interest Rate, Stated Percentage				1.20%	1.20%	1.20%
Senior Notes	[1],[3]				$ 499,000,000	$ 499,000,000
US Long-term 1.25% Notes due 2018
Debt Instrument Line Items
Debt Instrument, Interest Rate, Stated Percentage				1.25%	1.25%	1.25%
Senior Notes	[1],[4]				$ 477,000,000	$ 478,000,000
US Long-term 4.50% Notes due 2019
Debt Instrument Line Items
Debt Instrument, Interest Rate, Stated Percentage				4.50%	4.50%	4.50%
Senior Notes	[1]				$ 598,000,000	$ 598,000,000
US Long-term 1.90% Notes Due 2019
Debt Instrument Line Items
Debt Instrument, Interest Rate, Stated Percentage				1.90%	1.90%	1.90%
Senior Notes	[1]				$ 499,000,000	$ 499,000,000
Euro Denominated Long-term 1.50% Notes Due 2020
Debt Instrument Line Items
Debt Instrument, Interest Rate, Stated Percentage				1.50%	1.50%	1.50%
Senior Notes	[1]				$ 635,000,000	$ 627,000,000
US Long-term 2.25% notes due 2020 [Member]
Debt Instrument Line Items
Debt Instrument, Interest Rate, Stated Percentage				2.25%	2.25%	2.25%
Senior Notes	[1]				$ 299,000,000	$ 299,000,000
US Long-term 4.05% Notes due 2021
Debt Instrument Line Items
Debt Instrument, Interest Rate, Stated Percentage				4.05%	4.05%	4.05%
Senior Notes	[1]				$ 498,000,000	$ 497,000,000
US Long-term 3.00% Notes due 2021
Debt Instrument Line Items
Debt Instrument, Interest Rate, Stated Percentage				3.00%	3.00%	3.00%
Senior Notes	[1]				$ 497,000,000	$ 496,000,000
US Long-term 2.45% Notes due 2022
Debt Instrument Line Items
Debt Instrument, Interest Rate, Stated Percentage				2.45%	2.45%	2.45%
Senior Notes	[1]				$ 597,000,000	$ 597,000,000
US Long-term 2.20% Notes due 2022
Debt Instrument Line Items
Debt Instrument, Interest Rate, Stated Percentage				2.20%	2.20%	2.20%
Senior Notes	[1]				$ 498,000,000	$ 498,000,000
US Long-term 2.70% Notes due 2023
Debt Instrument Line Items
Debt Instrument, Interest Rate, Stated Percentage				2.70%	2.70%	2.70%
Senior Notes	[1]				$ 497,000,000	$ 497,000,000
Euro Denominated 1.20% Due 2024 [Member]
Debt Instrument Line Items
Debt Instrument, Interest Rate, Stated Percentage				1.20%	1.20%	1.20%
Senior Notes	[1]				$ 583,000,000	$ 575,000,000
US Long-term 2.65% Notes due 2025 [Member]
Debt Instrument Line Items
Debt Instrument, Interest Rate, Stated Percentage				2.65%	2.65%	2.65%
Senior Notes	[1]				$ 397,000,000	$ 397,000,000
Euro Denominated Long-term 1.625% Notes Due 2025 [Member] [Member]
Debt Instrument Line Items
Debt Instrument, Interest Rate, Stated Percentage				1.625%	1.625%	1.625%
Senior Notes	[1]				$ 525,000,000	$ 519,000,000
US Long-term 3.20% notes due 2026 [Member]
Debt Instrument Line Items
Debt Instrument, Interest Rate, Stated Percentage				3.20%	3.20%	3.20%
Senior Notes	[1]				$ 725,000,000	$ 725,000,000
US Long-term 3.55% Notes due 2042
Debt Instrument Line Items
Debt Instrument, Interest Rate, Stated Percentage				3.55%	3.55%	3.55%
Senior Notes	[1]				$ 662,000,000	$ 662,000,000
US Long-term other
Debt Instrument Line Items
Other debt - carrying amount					12,000,000	12,000,000
Other International Bank Borrowings
Debt Instrument Line Items
Other debt - carrying amount					55,000,000	$ 49,000,000
Line of Credit [Member]
Debt Instrument Line Items
Line of credit facility, maximum borrowing capacity					$ 2,500,000,000
Net Investment Hedging [Member] | Euro Denominated Long-term 1.50% Notes Due 2020
Debt Instrument Line Items
Debt Instrument, Interest Rate, Stated Percentage				1.50%	1.50%
Senior Notes					$ 635,000,000
Debt instrument, face value | €				€ 600
Net Investment Hedging [Member] | Euro Denominated 1.20% Due 2024 [Member]
Debt Instrument Line Items
Debt Instrument, Interest Rate, Stated Percentage				1.20%	1.20%
Senior Notes					$ 583,000,000
Debt instrument, face value | €				€ 550
Net Investment Hedging [Member] | Euro Denominated Long-term 1.625% Notes Due 2025 [Member] [Member]
Debt Instrument Line Items
Debt Instrument, Interest Rate, Stated Percentage				1.625%	1.625%
Senior Notes					$ 525,000,000
Debt instrument, face value | €				€ 500

[1] Amounts are net of unamortized discounts, premiums and/or debt issuance costs as applicable.

[2] In February 2017, Praxair repaid $150 million of floating rate notes that became due.

[3] Classified as long-term because of the company’s intent to refinance this debt on a long-term basis and the availability of such financing under the terms of an existing $2.5 billion long-term credit facility.

[4] March 31, 2017 and December 31, 2016 include a $2 million and $4 million fair value increase, respectively, related to hedge accounting. See Note 6 for additional information.

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Financial Instruments (Details) € in Millions, $ in Millions		3 Months Ended		12 Months Ended
		Mar. 31, 2017 USD ($)	Mar. 31, 2016 USD ($)	Dec. 31, 2016 USD ($) Rate	Dec. 31, 2012 USD ($)	Dec. 31, 2011 USD ($)	Dec. 31, 2009 USD ($)	Mar. 31, 2017 EUR (€)	Mar. 31, 2017 USD ($)	Jul. 31, 2012 USD ($)	Aug. 31, 2011 USD ($)	Dec. 31, 2008 USD ($)
Derivative [Line Items]
Notional Amount of Derivatives				$ 2,617					$ 2,721
Derivatives Assets				18					38
Derivative Liabilities				18					7
Amount of Gain (Loss) Recognized in AOCI, Before Tax		$ (1)
Derivative Instruments, Tax Impact of Net Change in AOCI		1
Net gains (losses) to be recognized over next 12 months (less than $1 million)									(1)
Jul 2012 Treasury Lock [Member]
Derivative [Line Items]
Debt instrument, face value	[1]									$ 500
Debt Instrument, Interest Rate, Stated Percentage										2.20%
Aug 2011Treasury Lock [Member]
Derivative [Line Items]
Debt instrument, face value	[1]										$ 500
Debt Instrument, Interest Rate, Stated Percentage											3.00%
December 2008 Treasury Lock [Member]
Derivative [Line Items]
Debt instrument, face value	[1]											$ 600
Notional Amount of Derivatives												$ 500
Debt Instrument, Interest Rate, Stated Percentage												4.50%
Not Designated as Hedging Instrument [Member]
Derivative [Line Items]
Amount of Pre-Tax Gain (Loss) Recognized in Earnings	[2]	80	$ 69
Not Designated as Hedging Instrument [Member] | Foreign Exchange Contract [Member]
Derivative [Line Items]
Notional Amount of Derivatives	[3]			2,104					2,196
Derivatives Assets	[3]			11					35
Derivative Liabilities	[3]			18					7
Not Designated as Hedging Instrument [Member] | Debt-Related [Member]
Derivative [Line Items]
Amount of Pre-Tax Gain (Loss) Recognized in Earnings	[2]	79	67
Not Designated as Hedging Instrument [Member] | Other Balance Sheet Items [Member]
Derivative [Line Items]
Amount of Pre-Tax Gain (Loss) Recognized in Earnings	[2]	1	2
Cash Flow Hedging [Member] | Interest Rate Lock Commitments [Member]
Derivative [Line Items]
Original deferred loss on settlement of derivative instruments - gross					$ (2)	$ (11)
Original deferred gain on settlement of derivative instruments - gross							$ 16
Cash Flow Hedging [Member] | Treasury Lock [Member]
Derivative [Line Items]
Deferred Gain (Loss) on Hedge, Gross	[4]			(2)					(2)
Derivative Instruments, Tax Impact of Net Change in AOCI	[4]	1		1
Derivative Instrument Gain Loss Recognized In Other Comprehensive Income Effective Portion Net Of Tax	[4]			(1)					(1)
Cash Flow Hedging [Member] | Jul 2012 Treasury Lock [Member]
Derivative [Line Items]
Deferred Gain (Loss) on Hedge, Gross	[4]			(1)					(1)
Cash Flow Hedging [Member] | Aug 2011Treasury Lock [Member]
Derivative [Line Items]
Deferred Gain (Loss) on Hedge, Gross	[4]			(5)					(5)
Cash Flow Hedging [Member] | December 2008 Treasury Lock [Member]
Derivative [Line Items]
Deferred Gain (Loss) on Hedge, Gross	[4]			4					4
Net Investment Hedging [Member]
Derivative [Line Items]
Derivatives used in Net Investment Hedge, Increase (Decrease), Gross of Tax		(22)
Derivatives used in Net Investment Hedge Increase (Decrease) since inception, Gross of Tax		317
Derivatives Designated as Hedging Instruments - Fair Value | Interest Rate Swap
Derivative [Line Items]
Debt instrument, face value									475
Notional Amount of Derivatives	[5]			475					475
Derivatives Assets	[5]			4					$ 2
Debt Instrument, Interest Rate, Stated Percentage								1.25%	1.25%
Designated as Hedging Instrument
Derivative [Line Items]
Notional Amount of Derivatives				513					$ 525
Derivatives Assets				7					3
Amount of Gain (Loss) Recognized in AOCI, Before Tax	[6]	(1)	(4)
Amount of Gain (Loss) Recognized in AOCI, Net of Taxes	[6]		(3)
Derivative Instruments, Tax Impact of Net Change in AOCI	[6]	1	1
Designated as Hedging Instrument | Foreign Exchange Contract [Member]
Derivative [Line Items]
Notional Amount of Derivatives	[3]			38					38
Derivatives Assets	[3]			3					1
Designated as Hedging Instrument | Net Investment Hedging [Member]
Derivative [Line Items]
Amount of Gain (Loss) Recognized in AOCI, Before Tax	[6]		$ (4)
Designated as Hedging Instrument | Balance Sheet Items [Member]
Derivative [Line Items]
Amount of Gain (Loss) Recognized in AOCI, Before Tax	[6]	$ (1)
Designated as Hedging Instrument | Forecasted Purchases
Derivative [Line Items]
Notional Amount of Derivatives	[3]								12
Level 2 Member | Fair Value, Measurements, Recurring
Derivative [Line Items]
Derivatives Assets				18					38
Derivative Liabilities				18					7
Euro Denominated Long-term 1.50% Notes Due 2020
Derivative [Line Items]
Senior Notes	[7]			$ 627					$ 635
Debt Instrument, Interest Rate, Stated Percentage				1.50%				1.50%	1.50%
Euro Denominated Long-term 1.50% Notes Due 2020 | Net Investment Hedging [Member]
Derivative [Line Items]
Debt instrument, face value | €								€ 600
Senior Notes									$ 635
Debt Instrument, Interest Rate, Stated Percentage								1.50%	1.50%
Euro Denominated Long-term 1.625% Notes Due 2025 [Member] [Member]
Derivative [Line Items]
Senior Notes	[7]			$ 519					$ 525
Debt Instrument, Interest Rate, Stated Percentage				1.625%				1.625%	1.625%
Euro Denominated Long-term 1.625% Notes Due 2025 [Member] [Member] | Net Investment Hedging [Member]
Derivative [Line Items]
Debt instrument, face value | €								€ 500
Senior Notes									$ 525
Debt Instrument, Interest Rate, Stated Percentage								1.625%	1.625%
Euro Denominated 1.20% Due 2024 [Member]
Derivative [Line Items]
Senior Notes	[7]			$ 575					$ 583
Debt Instrument, Interest Rate, Stated Percentage				1.20%				1.20%	1.20%
Euro Denominated 1.20% Due 2024 [Member] | Net Investment Hedging [Member]
Derivative [Line Items]
Debt instrument, face value | €								€ 550
Senior Notes									$ 583
Debt Instrument, Interest Rate, Stated Percentage								1.20%	1.20%

[1] 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.

[2] The gains (losses) on balance sheet items are offset by gains (losses) recorded on the underlying hedged assets and liabilities. Accordingly, the gains (losses) for the derivatives and the underlying hedged assets and liabilities related to debt items are recorded in the consolidated statements of income as interest expense-net. Other balance sheet items and anticipated net income gains (losses) are recorded in the consolidated statements of income as other income (expenses)-net.

[3] Assets are recorded in prepaid and other current assets, and liabilities are recorded in other current liabilities.

[4] 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.

[5] Assets are recorded in other long term assets

[6] The gains (losses) on net investment hedges are recorded as a component of AOCI within foreign currency translation adjustments in the condensed consolidated balance sheets and the condensed consolidated statements of comprehensive income. The gains (losses) on treasury rate locks are recorded as a component of AOCI within derivative instruments in the condensed consolidated balance sheets and the condensed consolidated statements of comprehensive income. There was no ineffectiveness for these instruments during 2017 or 2016. The gains (losses) on net investment hedges are reclassified to earnings only when the related currency translation adjustments are required to be reclassified, usually upon sale or liquidation of the investment. The gains (losses) for interest rate contracts are reclassified to earnings as interest expense –net on a straight-line basis over the remaining maturity of the underlying debt. Net losses of approximately $1 million are expected to be reclassified to earnings during the next twelve months.

[7] Amounts are net of unamortized discounts, premiums and/or debt issuance costs as applicable.

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Fair Value Disclosures (Details) - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Assets and Liabilities Measured on a Recurring Basis
Derivative assets	$ 38	$ 18
Derivative liabilities	7	18
Fair Value Additional Information [Abstract]
Carrying value of long-term debt including current portion	8,957	9,081
Level 2 Member
Fair Value Additional Information [Abstract]
Fair value of long-term debt	9,133	9,218
Level 2 Member | Fair Value, Measurements, Recurring
Assets and Liabilities Measured on a Recurring Basis
Derivative assets	38	18
Derivative liabilities	$ 7	$ 18

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Earnings Per Share - Praxair, Inc. Shareholders (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Net Income (Loss) Attributable to Parent [Abstract]
Net income – Praxair, Inc.	$ 389	$ 356
Denominator (Details) [Abstract]
Weighted average shares outstanding	285,140,000	285,049,000
Shares earned and issuable under compensation plans	369,000	380,000
Weighted average shares used in basic earnings per share	285,509,000	285,429,000
Stock options and awards	1,875,000	1,236,000
Weighted average shares used in diluted earnings per share	287,384,000	286,665,000
Basic Earnings Per Common Share	$ 1.36	$ 1.25
Diluted earnings per share (usd per share)	$ 1.35	$ 1.24
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive excluded from the computation of Earnings Per Share	4,673,805	5,236,570

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Goodwill and Other Intangible Assets - Goodwill (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Goodwill [Roll Forward]
Goodwill, Beginning Balance	$ 3,117
Goodwill, Acquired During Period		$ 34
Foreign currency translation	24
Goodwill, Ending Balance	3,141
North America Segment
Goodwill [Roll Forward]
Goodwill, Beginning Balance	2,165
Foreign currency translation	9
Goodwill, Ending Balance	2,174
South America Segment
Goodwill [Roll Forward]
Goodwill, Beginning Balance	132
Foreign currency translation	5
Goodwill, Ending Balance	137
Europe Segment
Goodwill [Roll Forward]
Goodwill, Beginning Balance	629
Foreign currency translation	7
Goodwill, Ending Balance	636
Asia Segment
Goodwill [Roll Forward]
Goodwill, Beginning Balance	58
Foreign currency translation	1
Goodwill, Ending Balance	59
Surface Technologies Segment
Goodwill [Roll Forward]
Goodwill, Beginning Balance	133
Foreign currency translation	2
Goodwill, Ending Balance	$ 135

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Goodwill and Other Intangible Assets - Other Intangible Assets (Details) - USD ($) $ in Millions		3 Months Ended
		Mar. 31, 2017	Mar. 31, 2016
Finite-lived Intangible Assets [Roll Forward]
Beginning Period Cost		$ 836
Additions (primarily acquisitions)		1	$ 15
Foreign currency translation		6
Other	[1]	(8)
Ending Period Cost		835
Beginning Accumulated Amortization		(253)
Amortization expense		(12)
Foreign currency translation		(3)
Other	[1]	7
Ending Accumulated Amortization		(261)
Net balance finite lived intangibles		$ 574
Additional Finite Lived Intangible Asset Information (Details) [Abstract]
Finite-lived intangible asset, useful life		17 years
Remaining 2017		$ 33
2018		44
2019		41
2020		40
2021		38
Thereafter		378
Customer & License/Use Agreements
Finite-lived Intangible Assets [Roll Forward]
Beginning Period Cost		751
Additions (primarily acquisitions)		1
Foreign currency translation		6
Ending Period Cost		758
Beginning Accumulated Amortization		(214)
Amortization expense		(10)
Foreign currency translation		(3)
Other	[1]	(1)
Ending Accumulated Amortization		(228)
Net balance finite lived intangibles		530
Non-compete Agreements
Finite-lived Intangible Assets [Roll Forward]
Beginning Period Cost		34
Other	[1]	(8)
Ending Period Cost		26
Beginning Accumulated Amortization		(22)
Amortization expense		(1)
Other	[1]	8
Ending Accumulated Amortization		(15)
Net balance finite lived intangibles		11
Patents & Other
Finite-lived Intangible Assets [Roll Forward]
Beginning Period Cost		51
Ending Period Cost		51
Beginning Accumulated Amortization		(17)
Amortization expense		(1)
Ending Accumulated Amortization		(18)
Net balance finite lived intangibles		$ 33

[1] Other primarily relates to write-off of fully amortized assets.

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Share-Based Compensation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Closing Share Price	$ 118.60
Additional Company Information [Abstract]
Share-based Compensation Expense	$ 12	$ 8
Share-based Compensation Expense, Net of Tax	$ 4	$ 6
Stock Options
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term	6 years 1 month
Unrecognized compensation expense	$ 36
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Dividend yield	2.70%	2.90%
Volatility	14.00%	14.40%
Risk-free interest rate	2.13%	1.41%
Expected term years	6 years	6 years
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Stock Options Outstanding at January 1, 2017	11,708
Stock Options Granted	2,090
Stock Options Exercised	(414)
Stock Options Cancelled or Expired	(47)
Stock Options Outstanding at March 31, 2017	13,337
Stock Options Exercisable at March 31, 2017	9,224
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Outstanding at January 1, 2017 - average exercise price	$ 101.58
Granted - average exercise price	118.71
Exercised - average exercise price	73.94
Cancelled or Expired - average exercise price	110.58
Outstanding at March 31, 2017 - average exercise price	105.09
Exercisable at March 31, 2017 - average exercise price	$ 101.31
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term	4 years 9 months
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures [Abstract]
Weighted-average fair values of options granted	$ 12.40	$ 8.91
Total intrinsic value of stock options exercised	$ 18	$ 23
Cash received from option exercises	19	31
Total cash tax benefit	$ 8	$ 13
Total compensation cost not yet recognized, period for recognition	1 year
Aggregate Intrinsic Value [Abstract]
Outstanding at March 31, 2017 - intrinsic value	$ 206
Exercisable at March 31, 2017 - intrinsic value	$ 181

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Share-Based Compensation (PSU and RSU) (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
PX Performance Based Awards
Additional Company Information [Abstract]
Performance based awards vesting, as a percentage of the target, low end of range	0.00%
Performance based awards vesting, as a percentage of the target, high end of range	200.00%
Total compensation cost not yet recognized, period for recognition	3 years
Cash-based Liability awards	11,000
Unrecognized compensation expense	$ 37
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Non-vested at January 1, 2017	714,000
Granted	223,630
Vested	(76,000)
Cancelled	(56,000)
Non-vested at March 31, 2017	806,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
Non-vested at January 1, 2017, grant date fair value	$ 115.72
Granted - average grant date fair value	114.82	$ 93.46
Vested - average grant date fair value	121.16
Cancelled - average grant date fair value	115.66
Non-vested at March 31, 2017, grant date fair value	$ 114.62
Restricted Stock
Additional Company Information [Abstract]
Total compensation cost not yet recognized, period for recognition	3 years
Cash-based Liability awards	6,000
Unrecognized compensation expense	$ 16
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Non-vested at January 1, 2017	274,000
Granted	70,884
Vested	(62,000)
Cancelled	(3,000)
Non-vested at March 31, 2017	280,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
Non-vested at January 1, 2017, grant date fair value	$ 109.49
Granted - average grant date fair value	109.64	93.50
Vested - average grant date fair value	121.15
Cancelled - average grant date fair value	109.50
Non-vested at March 31, 2017, grant date fair value	106.96
Performance Shares TSR [Member] [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
Granted - average grant date fair value	124.12	$ 124.18
Performance Shares ROC [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
Granted - average grant date fair value	$ 109.68
Maximum | PX Performance Based Awards
Additional Company Information [Abstract]
Award vesting period	3 years
Maximum | Restricted Stock
Additional Company Information [Abstract]
Award vesting period	3 years

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Retirement Programs (Net Pension and OPEB costs) (Details) - USD ($) $ in Millions		3 Months Ended
		Mar. 31, 2017	Mar. 31, 2016
Pension Plans Defined Benefit Member
Defined Benefit Plan Disclosure [Line Items]
Service cost		$ 11	$ 12
Interest cost		26	24
Expected return on plan assets		(40)	(39)
Net amortization and deferral		17	15
Defined Benefit Plan Net Periodic Benefit Cost		14	12
Other Postretirement Benefit Plans Defined Benefit
Defined Benefit Plan Disclosure [Line Items]
Service cost		1	1
Interest cost		1	1
Net amortization and deferral		(1)	(1)
Defined Benefit Plan, Recognized Net (Gain) Loss Due to Curtailments	[1]	(18)
Defined Benefit Plan Net Periodic Benefit Cost		$ (17)	$ 1

[1] The curtailment gain recorded in the first quarter of 2017 resulted from the termination of an OPEB plan in South America.

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Retirement Programs (Contributions and Future Estimated Payments) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Defined Benefit Plan Disclosure [Line Items]
Pension contributions	$ 3	$ 2
Minimum [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Estimated Future Employer Contributions in Current Fiscal Year	10
Maximum [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Estimated Future Employer Contributions in Current Fiscal Year	$ 15

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Commitments and Contingencies (Lawsuits and Goverment Investigations) (Details) - 3 months ended Mar. 31, 2017 $ in Millions, BRL in Billions	USD ($)	BRL
Gain And Loss Contingencies [Abstract]
Brazil tax matters estimated exposure	$ 235
Initial CADE civil fine imposed	694	BRL 2.2
Revised CADE civil fine	$ 537	BRL 1.7
Percentage of guarantees to Brazilian Court initially satisfied by letters of credit	50.00%
Percentage of guarantees to Brazilian Court initially satisfied by equity	50.00%

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Segments (Details) - USD ($) $ in Millions		3 Months Ended
		Mar. 31, 2017	Mar. 31, 2016
Segment Reporting Information [Line Items]
Sales	[1]	$ 2,728	$ 2,509
Operating profit (loss)		582	554
Transaction costs and other charges (Note 2)		(6)
North America Segment
Segment Reporting Information [Line Items]
Sales	[1]	1,458	1,353
Operating profit (loss)		357	349
Europe Segment
Segment Reporting Information [Line Items]
Sales	[1]	356	320
Operating profit (loss)		66	62
South America Segment
Segment Reporting Information [Line Items]
Sales	[1]	369	311
Operating profit (loss)		64	55
Asia Segment
Segment Reporting Information [Line Items]
Sales	[1]	395	376
Operating profit (loss)		75	63
Surface Technologies Segment
Segment Reporting Information [Line Items]
Sales	[1]	150	149
Operating profit (loss)		26	25
Total Segments
Segment Reporting Information [Line Items]
Operating profit (loss)		588	$ 554
Transaction costs and other charges (Note 2)		$ (6)

[1] Sales reflect external sales only. Intersegment sales, primarily from North America to other segments, were not material

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Equity and Redeemable Noncontrolling Interests Equity (Details) - USD ($) $ / shares in Units, $ in Millions		3 Months Ended		12 Months Ended
		Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016	Dec. 31, 2015
Funded Status Obligations, Taxes		$ 351		$ 352
Cash dividends per share (usd per share)		$ 0.7875	$ 0.750
Net Income (Loss) Attributable to Redeemable Noncontrolling Interest			$ 2
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax		$ (3,631)		(3,946)
Derivatives - net of taxes		(1)		(1)
Accumulated Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Net of Tax		(653)		(653)
Accumulated other comprehensive income (loss)		(4,285)		(4,600)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Total Praxair, Inc. Shareholders’ Equity		5,529		5,021
Noncontrolling interests		436		420
Total Equity		5,965		5,441
Other comprehensive income (loss)		320	362
Praxair, Inc. Shareholders' Equity
Accumulated other comprehensive income (loss)		(4,285)		(4,600)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Total Praxair, Inc. Shareholders’ Equity		5,529	4,888	5,021	$ 4,389
Net income	[1]	389	356
Other comprehensive income (loss)		315	346
Dividends to Praxair, Inc. common stock holders		(225)	(214)
For the dividend reinvestment and stock purchase plan		2	2
For employee savings and incentive plans		15	27
Purchases of common stock			(32)
Tax benefit from share-based compensation			6
Share-based compensation		12	8
Noncontrolling Interests
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Noncontrolling interests		436	417	420	404
Net income	[1]	15	8
Other comprehensive income (loss)		5	10
Dividends and Other Capital Changes to Noncontrolling Interests		(4)	(5)
Total Equity
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Total Equity		5,965	5,305	5,441	$ 4,793
Net income	[1]	404	364
Other comprehensive income (loss)		320	356
Dividends and Other Capital Changes to Noncontrolling Interests		(4)	(5)
Dividends to Praxair, Inc. common stock holders		(225)	(214)
For the dividend reinvestment and stock purchase plan		2	2
For employee savings and incentive plans		15	27
Purchases of common stock			(32)
Tax benefit from share-based compensation			6
Share-based compensation		12	$ 8
North America Segment
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax		(926)		(1,038)
South America Segment
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax		(1,904)		(1,969)
Europe Segment
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax		(474)		(504)
Asia Segment
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax		(281)		(383)
Surface Technologies Segment
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax		$ (46)		$ (52)

[1] Net income for noncontrolling interests excludes Net income related to redeemable noncontrolling interests, which is not part of total equity (see redeemable noncontrolling interests section below). For the quarter ended March 31, 2017 net income was insignificant ($2 million for the same time period in 2016)

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Equity and Redeemable Noncontrolling Interests (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Jun. 30, 2016	Mar. 31, 2016
Redeemable Noncontrolling Interest, Equity, Carrying Amount [Abstract]
Redeemable Noncontrolling Interest - percent owned prior to acquisition			66.00%
Purchase of redeemable noncontrolling interest - percent acquired		34.00%
Increase (Decrease) in Temporary Equity [Roll Forward]
Balance, January 1	$ 11	$ 119	$ 113
Net income			2
Distributions to noncontrolling interest and other	(1)		(2)
Foreign Exchange And Other Changes In Redeemable Noncontrolling Interests			6
Payments for Repurchase of Redeemable Noncontrolling Interest		$ (104)
Balance, March 31	$ 10		$ 119