ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
1-11037 | 06-1249050 | |
(Commission File Number) | (IRS Employer Identification No.) | |
10 Riverview Drive, DANBURY, CT | 06810-6268 | |
(Address of principal executive offices) | (Zip Code) |
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. | ¨ |
INDEX | ||
PART I - FINANCIAL INFORMATION | ||
Item 1. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 5. | ||
Item 6. | ||
Quarter Ended June 30, | |||||||
2018 | 2017 | ||||||
SALES | $ | 3,061 | $ | 2,834 | |||
Cost of sales, exclusive of depreciation and amortization | 1,723 | 1,599 | |||||
Selling, general and administrative | 307 | 305 | |||||
Depreciation and amortization | 311 | 292 | |||||
Research and development | 24 | 23 | |||||
Transaction costs and other charges | 24 | 15 | |||||
Other income (expense) - net | 17 | 6 | |||||
OPERATING PROFIT | 689 | 606 | |||||
Interest expense - net | 44 | 38 | |||||
Net pension and OPEB cost (benefit), excluding service cost | 2 | 2 | |||||
INCOME BEFORE INCOME TAXES AND EQUITY INVESTMENTS | 643 | 566 | |||||
Income taxes | 158 | 157 | |||||
INCOME BEFORE EQUITY INVESTMENTS | 485 | 409 | |||||
Income from equity investments | 14 | 11 | |||||
NET INCOME (INCLUDING NONCONTROLLING INTERESTS) | 499 | 420 | |||||
Less: noncontrolling interests | (19 | ) | (14 | ) | |||
NET INCOME - PRAXAIR, INC. | $ | 480 | $ | 406 | |||
PER SHARE DATA - PRAXAIR, INC. SHAREHOLDERS | |||||||
Basic earnings per share | $ | 1.67 | $ | 1.42 | |||
Diluted earnings per share | $ | 1.65 | $ | 1.41 | |||
Cash dividends per share | $ | 0.825 | $ | 0.7875 | |||
WEIGHTED AVERAGE SHARES OUTSTANDING (000’s): | |||||||
Basic shares outstanding | 287,803 | 286,090 | |||||
Diluted shares outstanding | 290,908 | 288,535 |
Six months ended June 30, | |||||||
2018 | 2017 | ||||||
SALES | $ | 6,060 | $ | 5,562 | |||
Cost of sales, exclusive of depreciation and amortization | 3,400 | 3,148 | |||||
Selling, general and administrative | 617 | 595 | |||||
Depreciation and amortization | 622 | 579 | |||||
Research and development | 48 | 46 | |||||
Transaction costs and other charges | 43 | 21 | |||||
Other income (expense) - net | 12 | — | |||||
OPERATING PROFIT | 1,342 | 1,173 | |||||
Interest expense - net | 90 | 79 | |||||
Net pension and OPEB cost (benefit), excluding service cost | 4 | (13 | ) | ||||
INCOME BEFORE INCOME TAXES AND EQUITY INVESTMENTS | 1,248 | 1,107 | |||||
Income taxes | 306 | 306 | |||||
INCOME BEFORE EQUITY INVESTMENTS | 942 | 801 | |||||
Income from equity investments | 29 | 23 | |||||
NET INCOME (INCLUDING NONCONTROLLING INTERESTS) | 971 | 824 | |||||
Less: noncontrolling interests | (29 | ) | (29 | ) | |||
NET INCOME - PRAXAIR, INC. | $ | 942 | $ | 795 | |||
PER SHARE DATA - PRAXAIR, INC. SHAREHOLDERS | |||||||
Basic earnings per share | $ | 3.27 | $ | 2.78 | |||
Diluted earnings per share | $ | 3.24 | $ | 2.76 | |||
Cash dividends per share | $ | 1.65 | $ | 1.575 | |||
WEIGHTED AVERAGE SHARES OUTSTANDING (000’s): | |||||||
Basic shares outstanding | 287,654 | 285,799 | |||||
Diluted shares outstanding | 290,926 | 288,067 |
Quarter Ended June 30, | |||||||
2018 | 2017 | ||||||
NET INCOME (INCLUDING NONCONTROLLING INTERESTS) | $ | 499 | $ | 420 | |||
OTHER COMPREHENSIVE INCOME (LOSS) | |||||||
Translation adjustments: | |||||||
Foreign currency translation adjustments | (640 | ) | (1 | ) | |||
Income taxes | (3 | ) | 55 | ||||
Translation adjustments | (643 | ) | 54 | ||||
Funded status - retirement obligations (Note 11): | |||||||
Retirement program remeasurements | (9 | ) | (17 | ) | |||
Reclassifications to net income | 17 | 16 | |||||
Income taxes | (2 | ) | 1 | ||||
Funded status - retirement obligations | 6 | — | |||||
Derivative instruments (Note 6): | |||||||
Current quarter unrealized gain (loss) | — | 1 | |||||
Reclassifications to net income | — | — | |||||
Income taxes | — | (1 | ) | ||||
Derivative instruments | — | — | |||||
TOTAL OTHER COMPREHENSIVE INCOME (LOSS) | (637 | ) | 54 | ||||
COMPREHENSIVE INCOME (LOSS) (INCLUDING NONCONTROLLING INTERESTS) | (138 | ) | 474 | ||||
Less: noncontrolling interests | 2 | (27 | ) | ||||
COMPREHENSIVE INCOME (LOSS) - PRAXAIR, INC. | $ | (136 | ) | $ | 447 |
Six months ended June 30, | |||||||
2018 | 2017 | ||||||
NET INCOME (INCLUDING NONCONTROLLING INTERESTS) | $ | 971 | $ | 824 | |||
OTHER COMPREHENSIVE INCOME (LOSS) | |||||||
Translation adjustments: | |||||||
Foreign currency translation adjustments | (534 | ) | 316 | ||||
Income taxes | 6 | 58 | |||||
Translation adjustments | (528 | ) | 374 | ||||
Funded status - retirement obligations (Note 11): | |||||||
Retirement program remeasurements | (8 | ) | (20 | ) | |||
Reclassifications to net income | 34 | 20 | |||||
Income taxes | (6 | ) | — | ||||
Funded status - retirement obligations | 20 | — | |||||
Derivative instruments (Note 6): | |||||||
Current period unrealized gain (loss) | — | — | |||||
Reclassifications to net income | — | — | |||||
Income taxes | — | — | |||||
Derivative instruments | — | — | |||||
TOTAL OTHER COMPREHENSIVE INCOME (LOSS) | (508 | ) | 374 | ||||
COMPREHENSIVE INCOME (INCLUDING NONCONTROLLING INTERESTS) | 463 | 1,198 | |||||
Less: noncontrolling interests | (19 | ) | (47 | ) | |||
COMPREHENSIVE INCOME - PRAXAIR, INC. | $ | 444 | $ | 1,151 |
June 30, 2018 | December 31, 2017 | ||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 479 | $ | 617 | |||
Accounts receivable - net | 1,877 | 1,804 | |||||
Inventories | 606 | 614 | |||||
Prepaid and other current assets | 202 | 250 | |||||
TOTAL CURRENT ASSETS | 3,164 | 3,285 | |||||
Property, plant and equipment (less accumulated depreciation of $13,821 in 2018 and $13,819 in 2017) | 11,701 | 12,057 | |||||
Goodwill | 3,200 | 3,233 | |||||
Other intangible assets - net | 525 | 553 | |||||
Other long-term assets | 1,246 | 1,308 | |||||
TOTAL ASSETS | $ | 19,836 | $ | 20,436 | |||
LIABILITIES AND EQUITY | |||||||
Accounts payable | $ | 967 | $ | 972 | |||
Short-term debt | 250 | 238 | |||||
Current portion of long-term debt | 979 | 979 | |||||
Other current liabilities | 1,083 | 1,118 | |||||
TOTAL CURRENT LIABILITIES | 3,279 | 3,307 | |||||
Long-term debt | 7,229 | 7,783 | |||||
Other long-term liabilities | 2,786 | 2,824 | |||||
TOTAL LIABILITIES | 13,294 | 13,914 | |||||
Commitments and contingencies (Note 12) | |||||||
Redeemable noncontrolling interests (Note 14) | 14 | 11 | |||||
Praxair, Inc. Shareholders’ Equity: | |||||||
Common stock $0.01 par value, authorized - 800,000,000 shares, issued 2018 and 2017 - 383,230,625 shares | 4 | 4 | |||||
Additional paid-in capital | 4,066 | 4,084 | |||||
Retained earnings | 13,690 | 13,224 | |||||
Accumulated other comprehensive income (loss) (Note 14) | (4,596 | ) | (4,098 | ) | |||
Less: Treasury stock, at cost (2018 - 95,654,841 shares and 2017 - 96,453,634 shares) | (7,137 | ) | (7,196 | ) | |||
Total Praxair, Inc. Shareholders’ Equity | 6,027 | 6,018 | |||||
Noncontrolling interests | 501 | 493 | |||||
TOTAL EQUITY | 6,528 | 6,511 | |||||
TOTAL LIABILITIES AND EQUITY | $ | 19,836 | $ | 20,436 |
Six months ended June 30, | |||||||
2018 | 2017 | ||||||
OPERATIONS | |||||||
Net income - Praxair, Inc. | $ | 942 | $ | 795 | |||
Noncontrolling interests | 29 | 29 | |||||
Net income (including noncontrolling interests) | 971 | 824 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Transaction costs and other charges, net of payments | 15 | 17 | |||||
Depreciation and amortization | 622 | 579 | |||||
Deferred income taxes | 10 | 48 | |||||
Share-based compensation | 21 | 28 | |||||
Working capital: | |||||||
Accounts receivable | (147 | ) | (95 | ) | |||
Inventory | (10 | ) | (5 | ) | |||
Prepaid and other current assets | 25 | (40 | ) | ||||
Payables and accruals | (6 | ) | (24 | ) | |||
Pension contributions | (10 | ) | (6 | ) | |||
Long-term assets, liabilities and other | (13 | ) | 85 | ||||
Net cash provided by operating activities | 1,478 | 1,411 | |||||
INVESTING | |||||||
Capital expenditures | (676 | ) | (652 | ) | |||
Acquisitions, net of cash acquired | — | (2 | ) | ||||
Divestitures and asset sales | 69 | 17 | |||||
Net cash used for investing activities | (607 | ) | (637 | ) | |||
FINANCING | |||||||
Short-term debt borrowings (repayments) - net | 13 | (157 | ) | ||||
Long-term debt borrowings | — | 10 | |||||
Long-term debt repayments | (505 | ) | (158 | ) | |||
Issuances of common stock | 44 | 70 | |||||
Purchases of common stock | (1 | ) | (11 | ) | |||
Cash dividends - Praxair, Inc. shareholders | (474 | ) | (450 | ) | |||
Noncontrolling interest transactions and other | (22 | ) | (84 | ) | |||
Net cash provided by (used for) financing activities | (945 | ) | (780 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | (64 | ) | 17 | ||||
Change in cash and cash equivalents | (138 | ) | 11 | ||||
Cash and cash equivalents, beginning-of-period | 617 | 524 | |||||
Cash and cash equivalents, end-of-period | $ | 479 | $ | 535 |
• | Revenue Recognition – In May 2014, the FASB issued updated guidance on the reporting and disclosure of revenue. Effective January 1, 2018, Praxair has adopted this guidance using the modified retrospective transition method. No material differences in revenue recognition accounting were identified under the new guidance compared with the Company's historic revenue recognition accounting (see Note 15). |
• | Classification of Certain Cash Receipts and Cash Payments – In August 2016, the FASB issued updated guidance on the classification of certain cash receipts and cash payments within the statement of cash flows. The update provides accounting guidance for specific cash flow issues with the objective of reducing diversity in practice. The adoption of this guidance did not have a material impact on the financial statements. |
• | Intra-Entity Asset Transfers – In October 2016, the FASB issued updated guidance for income tax accounting of intra-entity transfers of assets other than inventory. The update requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory in the period when the transfer occurs. The adoption of this guidance did not have a material impact on the financial statements. |
• | Pension Costs - In March 2017, the FASB issued updated guidance on the presentation of net periodic pension cost and net periodic postretirement benefit cost. The new guidance requires the service cost component be reported in the same line item or items as other compensation costs arising from services rendered by employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and not included within operating profit. This guidance was adopted in the first quarter 2018. Accordingly, non-service related components of net periodic pension and postretirement benefit costs were reclassified out of "Operating Profit" to "Net pension and OPEB cost (benefit), excluding service cost" using the practical expedient to use the amounts disclosed in the retirement benefits note for the prior comparative periods as the estimation basis for applying the retrospective presentation requirements (see Note 11). |
• | Leases – In February 2016, the FASB issued updated guidance on the accounting and financial statement presentation of leases. The new guidance requires lessees to recognize a right-of-use asset and lease liability for all leases, except those that meet certain scope exceptions, and would require expanded quantitative and qualitative disclosures. This guidance will be effective for Praxair beginning in the first quarter 2019 and requires companies to transition using a modified retrospective approach. Praxair is in the process of implementing the new guidance and will provide updates on the expected impact to Praxair in future filings, as appropriate. |
• | Credit Losses on Financial Instruments – In June 2016, the FASB issued an update on the measurement of credit losses. The guidance introduces a new accounting model for expected credit losses on financial instruments, including trade receivables, based on estimates of current expected credit losses. This guidance will be effective for Praxair beginning in the first quarter 2020, with early adoption permitted beginning in the first quarter 2019 and requires companies to apply the change in accounting on a prospective basis. We are currently evaluating the impact this update will have on our consolidated financial statements. |
• | Simplifying the Test for Goodwill Impairment – In January 2017, the FASB issued updated guidance on the measurement of goodwill. The new guidance eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge. The guidance will be effective for Praxair beginning in the first quarter 2020. Praxair does not expect this guidance to have a material impact. |
• | Derivatives and Hedging - In August 2017, the FASB issued updated guidance on accounting for hedging activities. The new guidance changes both the designation and measurement for qualifying hedging relationships and the presentation of hedge results. This guidance will be effective for Praxair beginning in the first quarter 2019, with early adoption optional. Praxair is currently evaluating the impact this update will have on our consolidated financial statements. |
• | Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income – In February 2018, the FASB issued updated guidance which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. This new guidance will be effective for Praxair beginning in the first quarter 2019 on a retrospective basis, with early adoption optional. Praxair is currently assessing the impact and timing of adoption. |
(Millions of dollars) | June 30, 2018 | December 31, 2017 | |||||
Inventories | |||||||
Raw materials and supplies | $ | 222 | $ | 224 | |||
Work in process | 54 | 57 | |||||
Finished goods | 330 | 333 | |||||
Total inventories | $ | 606 | $ | 614 |
(Millions of dollars) | June 30, 2018 | December 31, 2017 | |||||
SHORT-TERM | |||||||
Commercial paper and U.S. bank borrowings | $ | 214 | $ | 202 | |||
Other bank borrowings (primarily international) | 36 | 36 | |||||
Total short-term debt | 250 | 238 | |||||
LONG-TERM (a) | |||||||
U.S. borrowings (U.S. dollar denominated unless otherwise noted) | |||||||
1.20% Notes due 2018 (b) | — | 498 | |||||
1.25% Notes due 2018 (c) | 474 | 475 | |||||
1.90% Notes due 2019 | 500 | 500 | |||||
4.50% Notes due 2019 | 599 | 599 | |||||
1.50% Euro-denominated notes due 2020 | 699 | 717 | |||||
2.25% Notes due 2020 | 299 | 299 | |||||
4.05% Notes due 2021 | 498 | 498 | |||||
3.00% Notes due 2021 | 498 | 497 | |||||
2.45% Notes due 2022 | 598 | 598 | |||||
2.20% Notes due 2022 | 498 | 498 | |||||
2.70% Notes due 2023 | 498 | 498 | |||||
1.20% Euro-denominated notes due 2024 | 640 | 658 | |||||
2.65% Notes due 2025 | 398 | 397 | |||||
1.625% Euro-denominated notes due 2025 | 578 | 594 | |||||
3.20% Notes due 2026 | 725 | 725 | |||||
3.55% Notes due 2042 | 662 | 662 | |||||
Other | 10 | 12 | |||||
International bank borrowings | 30 | 33 | |||||
Obligations under capital leases | 4 | 4 | |||||
8,208 | 8,762 | ||||||
Less: current portion of long-term debt | (979 | ) | (979 | ) | |||
Total long-term debt | 7,229 | 7,783 | |||||
Total debt | $ | 8,458 | $ | 9,000 |
(a) | Amounts are net of unamortized discounts, premiums and/or debt issuance costs as applicable. |
(b) | In March 2018, Praxair repaid $500 million of 1.20% notes that became due. |
(c) | June 30, 2018 and December 31, 2017 include a $1 million fair value decrease and a less than $1 million increase, respectively, related to hedge accounting. See Note 6 for additional information. |
Fair Value | |||||||||||||||||||||||
Notional Amounts | Assets | Liabilities | |||||||||||||||||||||
(Millions of dollars) | June 30, 2018 | December 31, 2017 | June 30, 2018 | December 31, 2017 | June 30, 2018 | December 31, 2017 | |||||||||||||||||
Derivatives Not Designated as Hedging Instruments: | |||||||||||||||||||||||
Currency contracts: | |||||||||||||||||||||||
Balance sheet items (a) | $ | 2,266 | $ | 2,693 | $ | 6 | $ | 16 | $ | 25 | $ | 16 | |||||||||||
Derivatives Designated as Hedging Instruments: | |||||||||||||||||||||||
Currency contracts: | |||||||||||||||||||||||
Balance sheet items (a) | $ | — | $ | 38 | $ | — | $ | — | $ | — | $ | 2 | |||||||||||
Forecasted purchases (a) | 2 | 4 | — | 1 | — | — | |||||||||||||||||
Interest rate contracts: | |||||||||||||||||||||||
Interest rate swaps (a) | 475 | 475 | — | — | 1 | — | |||||||||||||||||
Total Hedges | $ | 477 | $ | 517 | $ | — | $ | 1 | $ | 1 | $ | 2 | |||||||||||
Total Derivatives | $ | 2,743 | $ | 3,210 | $ | 6 | $ | 17 | $ | 26 | $ | 18 |
(a) | Assets are recorded in prepaid and other current assets, and liabilities are recorded in other current liabilities. |
Year Terminated | Original Gain / (Loss) | Unrecognized Gain / (Loss) (a) | |||||||||||
(Millions of dollars) | June 30, 2018 | December 31, 2017 | |||||||||||
Treasury Rate Locks | |||||||||||||
Underlying debt instrument: | |||||||||||||
$500 million 2.20% fixed-rate notes that mature in 2022 (b) | 2012 | $ | (2 | ) | $ | (1 | ) | $ | (1 | ) | |||
$500 million 3.00% fixed-rate notes that mature in 2021 (b) | 2011 | (11 | ) | (3 | ) | (4 | ) | ||||||
$600 million 4.50% fixed-rate notes that mature in 2019 (b) | 2009 | 16 | 2 | 3 | |||||||||
Total - pre-tax | $ | (2 | ) | $ | (2 | ) | |||||||
Less: income taxes | 1 | 1 | |||||||||||
After- tax amounts | $ | (1 | ) | $ | (1 | ) |
(a) | The unrecognized gains / (losses) for the treasury rate locks are shown in accumulated other comprehensive income (“AOCI”) and are being recognized on a straight line basis to interest expense – net over the term of the underlying debt agreements. Refer to the table below summarizing the impact on the company’s consolidated statements of income and AOCI for current period gain (loss) recognition. |
(b) | The notional amount of the treasury rate lock contracts are equal to the underlying debt instrument with the exception of the treasury rate lock contract entered into to hedge the $600 million 4.50% fixed-rate notes that mature in 2019. The notional amount of this contract was $500 million. |
Amount of Pre-Tax Gain (Loss) Recognized in Earnings * | |||||||||||||||
Quarter Ended June 30, | Six Months Ended June 30, | ||||||||||||||
(Millions of dollars) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Derivatives Not Designated as Hedging Instruments | |||||||||||||||
Currency contracts: | |||||||||||||||
Balance sheet items | |||||||||||||||
Debt-related | $ | (68 | ) | $ | 30 | $ | (32 | ) | $ | 109 | |||||
Other balance sheet items | (1 | ) | 1 | 1 | 2 | ||||||||||
Total | $ | (69 | ) | $ | 31 | $ | (31 | ) | $ | 111 |
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) | June 30, 2018 | June 30, 2017 | June 30, 2018 | June 30, 2017 | |||||||||||
Currency contracts: | |||||||||||||||
Balance sheet items | $ | — | $ | — | $ | — | $ | — | |||||||
Forecasted purchases | — | 1 | — | — | |||||||||||
Interest rate contracts: | |||||||||||||||
Treasury rate lock contracts | — | — | — | — | |||||||||||
Total - pre tax | $ | — | $ | 1 | $ | — | $ | — | |||||||
Less: income taxes | — | (1 | ) | — | — | ||||||||||
Total - Net of Taxes | $ | — | $ | — | $ | — | $ | — |
Six Months Ended | |||||||||||||||
Amount of Gain (Loss) Recognized in AOCI | Amount of Gain (Loss) Reclassified from AOCI to the Consolidated Statement of Income | ||||||||||||||
(Millions of dollars) | June 30, 2018 | June 30, 2017 | June 30, 2018 | June 30, 2017 | |||||||||||
Currency contracts: | |||||||||||||||
Balance sheet items | $ | — | $ | (1 | ) | $ | — | $ | — | ||||||
Forecasted purchases | — | 1 | — | — | |||||||||||
Interest rate contracts: | |||||||||||||||
Treasury rate lock contracts | — | — | — | — | |||||||||||
Total - pre tax | $ | — | $ | — | $ | — | $ | — | |||||||
Less: income taxes | — | — | — | — | |||||||||||
Total - Net of Taxes | $ | — | $ | — | $ | — | $ | — |
Fair Value Measurements Using | |||||||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||||||
(Millions of dollars) | June 30, 2018 | December 31, 2017 | June 30, 2018 | December 31, 2017 | June 30, 2018 | December 31, 2017 | |||||||||||||
Assets | |||||||||||||||||||
Derivatives | — | — | $ | 6 | $ | 17 | — | — | |||||||||||
Liabilities | |||||||||||||||||||
Derivatives | — | — | $ | 26 | $ | 18 | — | — |
Quarter Ended June 30, | Six Months Ended June 30, | |||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||
Numerator (Millions of dollars) | ||||||||||||||
Net income - Praxair, Inc. | $ | 480 | $ | 406 | $ | 942 | $ | 795 | ||||||
Denominator (Thousands of shares) | ||||||||||||||
Weighted average shares outstanding | 287,467 | 285,719 | 287,321 | 285,429 | ||||||||||
Shares earned and issuable under compensation plans | 336 | 371 | 333 | 370 | ||||||||||
Weighted average shares used in basic earnings per share | 287,803 | 286,090 | 287,654 | 285,799 | ||||||||||
Effect of dilutive securities | ||||||||||||||
Stock options and awards | 3,105 | 2,445 | 3,272 | 2,268 | ||||||||||
Weighted average shares used in diluted earnings per share | 290,908 | 288,535 | 290,926 | 288,067 | ||||||||||
Basic Earnings Per Share | $ | 1.67 | $ | 1.42 | $ | 3.27 | $ | 2.78 | ||||||
Diluted Earnings Per Share | $ | 1.65 | $ | 1.41 | $ | 3.24 | $ | 2.76 |
(Millions of dollars) | North America | South America | Europe | Asia | Surface Technologies | Total | |||||||||||||||||
Balance, December 31, 2017 | $ | 2,202 | $ | 129 | $ | 698 | $ | 61 | $ | 143 | $ | 3,233 | |||||||||||
Acquisitions | — | — | — | — | — | — | |||||||||||||||||
Purchase adjustments & other | 12 | — | — | — | — | 12 | |||||||||||||||||
Foreign currency translation | (7 | ) | (22 | ) | (12 | ) | (1 | ) | (3 | ) | (45 | ) | |||||||||||
Balance, June 30, 2018 | $ | 2,207 | $ | 107 | $ | 686 | $ | 60 | $ | 140 | $ | 3,200 |
(Millions of dollars) | Customer & License/Use Agreements | Non-compete Agreements | Patents & Other | Total | |||||||||||
Cost: | |||||||||||||||
Balance, December 31, 2017 | $ | 772 | $ | 28 | $ | 52 | $ | 852 | |||||||
Additions | — | — | — | — | |||||||||||
Foreign currency translation | (6 | ) | — | — | (6 | ) | |||||||||
Other* | (20 | ) | (5 | ) | — | (25 | ) | ||||||||
Balance, June 30, 2018 | $ | 746 | $ | 23 | $ | 52 | $ | 821 | |||||||
Less: Accumulated amortization | |||||||||||||||
Balance, December 31, 2017 | $ | (260 | ) | $ | (18 | ) | $ | (21 | ) | $ | (299 | ) | |||
Amortization expense | (19 | ) | (2 | ) | (2 | ) | (23 | ) | |||||||
Foreign currency translation | 2 | — | — | 2 | |||||||||||
Other* | 19 | 5 | — | 24 | |||||||||||
Balance, June 30, 2018 | $ | (258 | ) | $ | (15 | ) | $ | (23 | ) | $ | (296 | ) | |||
Net balance at June 30, 2018 | $ | 488 | $ | 8 | $ | 29 | $ | 525 |
(Millions of dollars) | |||
Remaining 2018 | $ | 22 | |
2019 | 43 | ||
2020 | 41 | ||
2021 | 39 | ||
2022 | 38 | ||
Thereafter | 342 | ||
$ | 525 |
Six months ended June 30, | |||||
2018 | 2017 | ||||
Dividend yield | 2.1 | % | 2.7 | % | |
Volatility | 14.4 | % | 14.0 | % | |
Risk-free interest rate | 2.67 | % | 2.13 | % | |
Expected term years | 5 | 6 |
Number of Options (000’s) | Average Exercise Price | Average Remaining Life | Aggregate Intrinsic Value | |||||||||
Outstanding at January 1, 2018 | 10,787 | $ | 108.70 | |||||||||
Granted | 1,625 | 154.00 | ||||||||||
Exercised | (1,136 | ) | 92.29 | |||||||||
Cancelled or Expired | (35 | ) | 126.27 | |||||||||
Outstanding at June 30, 2018 | 11,241 | 116.86 | 6.3 | $ | 464 | |||||||
Exercisable at June 30, 2018 | 7,521 | $ | 110.02 | 5.2 | $ | 362 |
Performance-Based | Restricted Stock | ||||||||||||
Number of Shares (000’s) | Average Grant Date Fair Value | Number of Shares (000’s) | Average Grant Date Fair Value | ||||||||||
Non-vested at January 1, 2018 | 665 | $ | 113.40 | 264 | $ | 107.56 | |||||||
Granted | — | — | 269 | 144.79 | |||||||||
Vested | (78 | ) | 119.98 | (89 | ) | 116.29 | |||||||
Cancelled and Forfeited | (150 | ) | 110.12 | (14 | ) | 92.93 | |||||||
Non-vested at June 30, 2018 | 437 | $ | 110.02 | 430 | $ | 129.49 |
Quarter Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||
Pensions | OPEB | Pensions | OPEB | |||||||||||||||||||||||||||||
(Millions of dollars) | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||||
Amount recognized in Operating Profit | ||||||||||||||||||||||||||||||||
Service cost | $ | 12 | $ | 12 | $ | 1 | $ | 1 | $ | 24 | $ | 23 | $ | 1 | $ | 2 | ||||||||||||||||
Amount recognized in Net pension and OPEB cost (benefit), excluding service cost | ||||||||||||||||||||||||||||||||
Interest cost | 25 | 25 | 1 | 1 | 51 | 51 | 2 | 2 | ||||||||||||||||||||||||
Expected return on plan assets | (41 | ) | (40 | ) | — | — | (83 | ) | (80 | ) | — | — | ||||||||||||||||||||
Net amortization and deferral | 18 | 17 | (1 | ) | (1 | ) | 36 | 34 | (2 | ) | (2 | ) | ||||||||||||||||||||
Curtailment gain (a) | — | — | — | — | — | — | — | (18 | ) | |||||||||||||||||||||||
$ | 2 | $ | 2 | $ | — | $ | — | $ | 4 | $ | 5 | $ | — | $ | (18 | ) | ||||||||||||||||
Net periodic benefit cost (benefit) | $ | 14 | $ | 14 | $ | 1 | $ | 1 | $ | 28 | $ | 28 | $ | 1 | $ | (16 | ) |
• | During May 2009, the Brazilian government published Law 11941/2009 instituting a new voluntary amnesty program (“Refis Program”) which allowed Brazilian companies to settle certain federal tax disputes at reduced amounts. During the 2009 third quarter, Praxair decided that it was economically beneficial to settle many of its outstanding federal tax disputes and such disputes were enrolled in the Refis Program, subject to final calculation and review by the Brazilian federal government. The Company recorded estimated liabilities based on the terms of the Refis Program. Since 2009, Praxair has been unable to reach final agreement on the calculations and initiated litigation against the government in an attempt to resolve certain items. Open issues relate to the following matters: (i) application of cash deposits and net operating loss carryforwards to satisfy obligations, and (ii) the amount of tax reductions available under the Refis Program. It is difficult to estimate the timing of resolution of legal matters in Brazil. |
• | At June 30, 2018 the most significant non-income and income tax claims in Brazil, after enrollment in the Refis Program, relate to state VAT tax matters and a federal income tax matter where the taxing authorities are challenging the tax rate that should be applied to income generated by a subsidiary company. The total estimated exposure relating to such claims, including interest and penalties, as appropriate, is approximately $210 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$570 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$440 million) due to a calculation error made by CADE. The amount of the fine is subject to indexation using SELIC. On September 2, 2010, Praxair issued a press release and filed a report on Form 8-K rejecting all claims and stating that the fine represents a gross and arbitrary disregard of Brazilian law. |
Quarter Ended June 30, | Six Months Ended June 30, | ||||||||||||||
(Millions of dollars) | 2018 | 2017 | 2018 | 2017 | |||||||||||
SALES(a) | |||||||||||||||
North America | $ | 1,594 | $ | 1,505 | $ | 3,157 | $ | 2,963 | |||||||
Europe | 444 | 383 | 872 | 739 | |||||||||||
South America | 349 | 373 | 714 | 742 | |||||||||||
Asia | 502 | 422 | 978 | 817 | |||||||||||
Surface Technologies | 172 | 151 | 339 | 301 | |||||||||||
Total sales | $ | 3,061 | $ | 2,834 | $ | 6,060 | $ | 5,562 |
Quarter Ended June 30, | Six Months Ended June 30, | ||||||||||||||
(Millions of dollars) | 2018 | 2017 | 2018 | 2017 | |||||||||||
OPERATING PROFIT | |||||||||||||||
North America | $ | 432 | $ | 378 | $ | 838 | $ | 735 | |||||||
Europe | 87 | 74 | 167 | 141 | |||||||||||
South America | 56 | 64 | 110 | 112 | |||||||||||
Asia | 107 | 80 | 211 | 155 | |||||||||||
Surface Technologies | 31 | 25 | 59 | 51 | |||||||||||
Segment operating profit | 713 | 621 | 1,385 | 1,194 | |||||||||||
Transaction costs and other charges (Note 2) | (24 | ) | (15 | ) | (43 | ) | (21 | ) | |||||||
Total operating profit | $ | 689 | $ | 606 | $ | 1,342 | $ | 1,173 |
(a) | Sales reflect external sales only. Intersegment sales, primarily from North America to other segments, were not material. |
Quarter Ended June 30, | |||||||||||||||||||||||
(Millions of dollars) | 2018 | 2017 | |||||||||||||||||||||
Activity | Praxair, Inc. Shareholders’ Equity | Noncontrolling Interests | Total Equity | Praxair, Inc. Shareholders’ Equity | Noncontrolling Interests | Total Equity | |||||||||||||||||
Balance, beginning of period | $ | 6,368 | $ | 516 | $ | 6,884 | $ | 5,529 | $ | 436 | $ | 5,965 | |||||||||||
Net income (a) | 480 | 18 | 498 | 406 | 13 | 419 | |||||||||||||||||
Other comprehensive income (loss) | (616 | ) | (21 | ) | (637 | ) | 41 | 13 | 54 | ||||||||||||||
Noncontrolling interests: | |||||||||||||||||||||||
Additions (reductions) | — | 1 | 1 | — | 7 | 7 | |||||||||||||||||
Dividends and other capital changes | — | (13 | ) | (13 | ) | — | (16 | ) | (16 | ) | |||||||||||||
Redemption value adjustments | — | — | — | — | — | — | |||||||||||||||||
Dividends to Praxair, Inc. common stock holders ($0.825 per share in 2018 and $0.7875 per share in 2017) | (237 | ) | — | (237 | ) | (225 | ) | — | (225 | ) | |||||||||||||
Issuances of common stock: | |||||||||||||||||||||||
For the dividend reinvestment and stock purchase plan | 1 | — | 1 | 1 | — | 1 | |||||||||||||||||
For employee savings and incentive plans | 15 | — | 15 | 39 | — | 39 | |||||||||||||||||
Purchases of common stock | (1 | ) | — | (1 | ) | — | — | — | |||||||||||||||
Share-based compensation | 17 | — | 17 | 16 | — | 16 | |||||||||||||||||
Balance, end of period | $ | 6,027 | $ | 501 | $ | 6,528 | $ | 5,807 | $ | 453 | $ | 6,260 |
Six Months Ended June 30, | |||||||||||||||||||||||
(Millions of dollars) | 2018 | 2017 | |||||||||||||||||||||
Activity | Praxair, Inc. Shareholders’ Equity | Noncontrolling Interests | Total Equity | Praxair, Inc. Shareholders’ Equity | Noncontrolling Interests | Total Equity | |||||||||||||||||
Balance, beginning of period | $ | 6,018 | $ | 493 | $ | 6,511 | $ | 5,021 | $ | 420 | $ | 5,441 | |||||||||||
Net income (a) | 942 | 27 | 969 | 795 | 28 | 823 | |||||||||||||||||
Other comprehensive income (loss) | (498 | ) | (10 | ) | (508 | ) | 356 | 18 | 374 | ||||||||||||||
Noncontrolling interests: | |||||||||||||||||||||||
Additions (reductions) | — | 7 | 7 | — | 7 | 7 | |||||||||||||||||
Dividends and other capital changes | — | (16 | ) | (16 | ) | — | (20 | ) | (20 | ) | |||||||||||||
Redemption value adjustments | (2 | ) | — | (2 | ) | — | — | — | |||||||||||||||
Dividends to Praxair, Inc. common stock holders ($1.65 per share in 2018 and $1.575 per share in 2017) | (474 | ) | — | (474 | ) | (450 | ) | — | (450 | ) | |||||||||||||
Issuances of common stock: | |||||||||||||||||||||||
For the dividend reinvestment and stock purchase plan | 3 | — | 3 | 3 | — | 3 | |||||||||||||||||
For employee savings and incentive plans | 18 | — | 18 | 54 | — | 54 | |||||||||||||||||
Other | — | — | — | — | — | — | |||||||||||||||||
Purchases of common stock | (1 | ) | — | (1 | ) | — | — | — | |||||||||||||||
Share-based compensation | 21 | — | 21 | 28 | — | 28 | |||||||||||||||||
Balance, end of period | $ | 6,027 | $ | 501 | $ | 6,528 | $ | 5,807 | $ | 453 | $ | 6,260 |
(a) | Net income for noncontrolling interests excludes Net income related to redeemable noncontrolling interests of $2 million for the six months ended June 30, 2018 ($1 million for the same time period in 2017) which is not part of total equity (see redeemable noncontrolling interests section below). |
June 30, | December 31, | ||||||
(Millions of dollars) | 2018 | 2017 | |||||
Cumulative translation adjustment - net of taxes: | |||||||
North America | $ | (940 | ) | $ | (885 | ) | |
South America | (2,319 | ) | (2,004 | ) | |||
Europe | (433 | ) | (398 | ) | |||
Asia | (254 | ) | (151 | ) | |||
Surface Technologies | (27 | ) | (17 | ) | |||
(3,973 | ) | (3,455 | ) | ||||
Derivatives - net of taxes | (1 | ) | (1 | ) | |||
Pension / OPEB funded status obligation (net of $341 million and $347 million tax benefit in June 30, 2018 and December 31, 2017, respectively) | (622 | ) | (642 | ) | |||
$ | (4,596 | ) | $ | (4,098 | ) |
(Millions of dollars) | 2018 | 2017 | |||||
Balance, January 1 | $ | 11 | $ | 11 | |||
Net income | 2 | 1 | |||||
Distributions to noncontrolling interest and other | (1 | ) | (2 | ) | |||
Redemption value adjustments/accretion | 2 | — | |||||
Balance, June 30 | $ | 14 | $ | 10 |
Quarter Ended June 30, | |||||||||||||||||||||
(Dollars in Millions) | Industrial Gases | ||||||||||||||||||||
Sales | North America | Europe | South America | Asia | Surface Technologies | Total | % | ||||||||||||||
Merchant | $ | 591 | $ | 152 | $ | 131 | $ | 164 | $ | — | $ | 1,038 | 34 | % | |||||||
On-Site | 458 | 77 | 117 | 250 | — | 902 | 29 | % | |||||||||||||
Packaged Gas | 508 | 199 | 93 | 57 | — | 857 | 28 | % | |||||||||||||
Other | 37 | 16 | 8 | 31 | 172 | 264 | 9 | % | |||||||||||||
$ | 1,594 | $ | 444 | $ | 349 | $ | 502 | $ | 172 | $ | 3,061 | 100 | % |
Six Months Ended June 30, | |||||||||||||||||||||
(Dollars in Millions) | Industrial Gases | ||||||||||||||||||||
Sales | North America | Europe | South America | Asia | Surface Technologies | Total | % | ||||||||||||||
Merchant | $ | 1,164 | $ | 300 | $ | 274 | $ | 311 | $ | — | $ | 2,049 | 34 | % | |||||||
On-Site | 918 | 157 | 231 | 496 | — | 1,802 | 30 | % | |||||||||||||
Packaged Gas | 1,001 | 380 | 191 | 111 | — | 1,683 | 28 | % | |||||||||||||
Other | 74 | 35 | 18 | 60 | 339 | 526 | 8 | % | |||||||||||||
$ | 3,157 | $ | 872 | $ | 714 | $ | 978 | $ | 339 | $ | 6,060 | 100 | % |
Quarter Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||
(Dollar amounts in millions, except per share data) | 2018 | 2017 (c) | Variance | 2018 | 2017 (c) | Variance | |||||||||||||||
Reported Amounts | |||||||||||||||||||||
Sales | $ | 3,061 | $ | 2,834 | 8 | % | $ | 6,060 | $ | 5,562 | 9 | % | |||||||||
Cost of sales, exclusive of depreciation and amortization | $ | 1,723 | $ | 1,599 | 8 | % | $ | 3,400 | $ | 3,148 | 8 | % | |||||||||
Gross margin (a) | $ | 1,338 | $ | 1,235 | 8 | % | $ | 2,660 | $ | 2,414 | 10 | % | |||||||||
As a percent of sales | 43.7 | % | 43.6 | % | 43.9 | % | 43.4 | % | |||||||||||||
Selling, general and administrative | $ | 307 | $ | 305 | 1 | % | $ | 617 | $ | 595 | 4 | % | |||||||||
As a percent of sales | 10.0 | % | 10.8 | % | 10.2 | % | 10.7 | % | |||||||||||||
Depreciation and amortization | $ | 311 | $ | 292 | 7 | % | $ | 622 | $ | 579 | 7 | % | |||||||||
Transaction costs and other charges (b) | $ | 24 | $ | 15 | $ | 43 | $ | 21 | |||||||||||||
Other income (expense) - net | $ | 17 | $ | 6 | $ | 12 | $ | — | |||||||||||||
Operating profit | $ | 689 | $ | 606 | 14 | % | $ | 1,342 | $ | 1,173 | 14 | % | |||||||||
Operating margin | 22.5 | % | 21.4 | % | 22.1 | % | 21.1 | % | |||||||||||||
Interest expense - net | $ | 44 | $ | 38 | 16 | % | $ | 90 | $ | 79 | 14 | % | |||||||||
Net pension and OPEB cost (benefit), excluding service cost | $ | 2 | $ | 2 | $ | 4 | $ | (13 | ) | ||||||||||||
Effective tax rate | 24.6 | % | 27.7 | % | 24.5 | % | 27.6 | % | |||||||||||||
Income from equity investments | $ | 14 | $ | 11 | 27 | % | $ | 29 | $ | 23 | 26 | % | |||||||||
Noncontrolling interests | $ | (19 | ) | $ | (14 | ) | 36 | % | $ | (29 | ) | $ | (29 | ) | — | % | |||||
Net income - Praxair, Inc. | $ | 480 | $ | 406 | 18 | % | $ | 942 | $ | 795 | 18 | % | |||||||||
Diluted earnings per share | $ | 1.65 | $ | 1.41 | 17 | % | $ | 3.24 | $ | 2.76 | 17 | % | |||||||||
Diluted shares outstanding | 290,908 | 288,535 | 1 | % | 290,926 | 288,067 | 1 | % | |||||||||||||
Number of employees | 26,658 | 26,487 | 26,658 | 26,487 | |||||||||||||||||
Adjusted Amounts (b) | |||||||||||||||||||||
Operating profit | $ | 713 | $ | 621 | 15 | % | $ | 1,385 | $ | 1,194 | 16 | % | |||||||||
Operating margin | 23.3 | % | 21.9 | % | 22.9 | % | 21.5 | % | |||||||||||||
Effective tax rate | 24.1 | % | 27.0 | % | 24.1 | % | 27.1 | % | |||||||||||||
Noncontrolling interests | $ | (19 | ) | $ | (14 | ) | 36 | % | $ | (28 | ) | $ | (29 | ) | (3 | )% | |||||
Net income - Praxair, Inc. | $ | 501 | $ | 421 | 19 | % | $ | 981 | $ | 816 | 20 | % | |||||||||
Diluted earnings per share | $ | 1.72 | $ | 1.46 | 18 | % | $ | 3.37 | $ | 2.83 | 19 | % | |||||||||
Other Financial Data (b) | |||||||||||||||||||||
EBITDA | $ | 1,014 | $ | 909 | $ | 1,993 | $ | 1,775 | |||||||||||||
EBITDA Margin | 33.1 | % | 32.1 | % | 32.9 | % | 31.9 | % | |||||||||||||
Adjusted EBITDA | $ | 1,038 | $ | 924 | $ | 2,036 | $ | 1,796 | |||||||||||||
Adjusted EBITDA Margin | 33.9 | % | 32.6 | % | 33.6 | % | 32.3 | % |
(a) | Gross margin excludes depreciation and amortization expense. |
(b) | Adjusted amounts and other financial data are non-GAAP performance measures. A reconciliation of reported amounts to adjusted amounts and other financial data can be found in the "Non-GAAP Financial Measures" section of this MD&A. See Note 2 to the condensed consolidated financial statements. |
(c) | Prior period information has been reclassified to conform with current year presentation as a result of the adoption of new accounting guidance on the presentation of net periodic pension and postretirement benefit costs. See Note 1 to the condensed consolidation financial statements. |
Quarter Ended June 30, 2018 vs. 2017 | Six Months Ended June 30, 2018 vs. 2017 | ||||||||||
% Change | % Change | ||||||||||
Sales | Operating Profit | Sales | Operating Profit | ||||||||
Factors Contributing to Changes | |||||||||||
Volume | 5 | % | 9 | % | 5 | % | 9 | % | |||
Price/Mix | 2 | % | 8 | % | 2 | % | 8 | % | |||
Cost pass-through | 1 | % | — | % | — | % | — | % | |||
Currency | — | % | — | % | 2 | % | 2 | % | |||
Acquisitions/divestitures | — | % | — | % | — | % | — | % | |||
Other | — | % | (3 | )% | — | % | (5 | )% | |||
Reported | 8 | % | 14 | % | 9 | % | 14 | % | |||
Add: Transaction costs and other charges | — | % | 1 | % | — | % | 2 | % | |||
Adjusted | 8 | % | 15 | % | 9 | % | 16 | % |
Quarter Ended June 30, | Six Months Ended June 30, | ||||||||||||||||
% of Sales | % Change* | % of Sales | % Change* | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||
Sales by End Markets | |||||||||||||||||
Manufacturing | 22 | % | 22 | % | 7 | % | 22 | % | 22 | % | 7 | % | |||||
Metals | 17 | % | 17 | % | 11 | % | 17 | % | 17 | % | 10 | % | |||||
Energy | 11 | % | 12 | % | 2 | % | 11 | % | 12 | % | 2 | % | |||||
Chemicals | 11 | % | 10 | % | 13 | % | 11 | % | 10 | % | 13 | % | |||||
Electronics | 9 | % | 9 | % | 7 | % | 9 | % | 9 | % | 8 | % | |||||
Healthcare | 8 | % | 8 | % | 7 | % | 8 | % | 8 | % | 6 | % | |||||
Food & Beverage | 9 | % | 10 | % | 4 | % | 9 | % | 9 | % | 5 | % | |||||
Aerospace | 4 | % | 3 | % | 16 | % | 4 | % | 3 | % | 12 | % | |||||
Other | 9 | % | 9 | % | 5 | % | 9 | % | 10 | % | 2 | % | |||||
100 | % | 100 | % | 100 | % | 100 | % |
Quarter Ended June 30, | Six Months Ended June 30, | ||||||||||
% of Sales | % of Sales | ||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||
Sales by Distribution Method | |||||||||||
On-Site | 29 | % | 30 | % | 30 | % | 30 | % | |||
Merchant | 34 | % | 34 | % | 34 | % | 34 | % | |||
Packaged Gas | 28 | % | 28 | % | 28 | % | 28 | % | |||
Other | 9 | % | 8 | % | 8 | % | 8 | % | |||
100 | % | 100 | % | 100 | % | 100 | % |
Quarter Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||
(Dollar amounts in millions) | 2018 | 2017* | Variance | 2018 | 2017* | Variance | |||||||||||||||
SALES | |||||||||||||||||||||
North America | $ | 1,594 | $ | 1,505 | 6 | % | $ | 3,157 | $ | 2,963 | 7 | % | |||||||||
Europe | 444 | 383 | 16 | % | 872 | 739 | 18 | % | |||||||||||||
South America | 349 | 373 | (6 | )% | 714 | 742 | (4 | )% | |||||||||||||
Asia | 502 | 422 | 19 | % | 978 | 817 | 20 | % | |||||||||||||
Surface Technologies | 172 | 151 | 14 | % | 339 | 301 | 13 | % | |||||||||||||
$ | 3,061 | $ | 2,834 | 8 | % | $ | 6,060 | $ | 5,562 | 9 | % | ||||||||||
OPERATING PROFIT | |||||||||||||||||||||
North America | $ | 432 | $ | 378 | 14 | % | $ | 838 | $ | 735 | 14 | % | |||||||||
Europe | 87 | 74 | 18 | % | 167 | 141 | 18 | % | |||||||||||||
South America | 56 | 64 | (13 | )% | 110 | 112 | (2 | )% | |||||||||||||
Asia | 107 | 80 | 34 | % | 211 | 155 | 36 | % | |||||||||||||
Surface Technologies | 31 | 25 | 24 | % | 59 | 51 | 16 | % | |||||||||||||
Segment operating profit | 713 | 621 | 15 | % | 1,385 | 1,194 | 16 | % | |||||||||||||
Transaction costs and other charges | (24 | ) | (15 | ) | (43 | ) | (21 | ) | |||||||||||||
Total operating profit | $ | 689 | $ | 606 | 14 | % | $ | 1,342 | $ | 1,173 | 14 | % |
Quarter Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||
2018 | 2017 | Variance | 2018 | 2017 | Variance | |||||||||||||||||
Sales | $ | 1,594 | $ | 1,505 | 6 | % | $ | 3,157 | $ | 2,963 | 7 | % | ||||||||||
Cost of sales, exclusive of depreciation and amortization | 830 | 793 | 1,636 | 1,567 | ||||||||||||||||||
Gross margin | 764 | 712 | 1,521 | 1,396 | ||||||||||||||||||
Operating expenses | 165 | 177 | 354 | 350 | ||||||||||||||||||
Depreciation and amortization | 167 | 157 | 329 | 311 | ||||||||||||||||||
Operating profit | $ | 432 | $ | 378 | 14 | % | $ | 838 | $ | 735 | 14 | % | ||||||||||
Margin % | 27.1 | % | 25.1 | % | 26.5 | % | 24.8 | % |
Quarter Ended June 30, 2018 vs. 2017 | Six Months Ended June 30, 2018 vs. 2017 | ||||||||||
% Change | % Change | ||||||||||
Sales | Operating Profit | Sales | Operating Profit | ||||||||
Factors Contributing to Changes | |||||||||||
Volume | 4 | % | 8 | % | 4 | % | 9 | % | |||
Price/Mix | 2 | % | 7 | % | 2 | % | 7 | % | |||
Cost pass-through | — | % | — | % | — | % | — | % | |||
Currency | — | % | — | % | 1 | % | 1 | % | |||
Acquisitions/divestitures | — | % | — | % | — | % | — | % | |||
Other | — | % | (1 | )% | — | % | (3 | )% | |||
6 | % | 14 | % | 7 | % | 14 | % |
Quarter Ended June 30, | Six Months Ended June 30, | ||||||||||||||||
% of Sales | % Change* | % of Sales | % Change* | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||
Sales by End Markets | |||||||||||||||||
Manufacturing | 29 | % | 28 | % | 7 | % | 29 | % | 29 | % | 6 | % | |||||
Metals | 11 | % | 11 | % | 5 | % | 12 | % | 12 | % | 6 | % | |||||
Energy | 17 | % | 18 | % | (2 | )% | 17 | % | 18 | % | (2 | )% | |||||
Chemicals | 10 | % | 9 | % | 20 | % | 10 | % | 9 | % | 21 | % | |||||
Electronics | 5 | % | 5 | % | 4 | % | 5 | % | 5 | % | 9 | % | |||||
Healthcare | 7 | % | 7 | % | 7 | % | 7 | % | 7 | % | 8 | % | |||||
Food & Beverage | 10 | % | 10 | % | 8 | % | 10 | % | 10 | % | 8 | % | |||||
Aerospace | 2 | % | 2 | % | 31 | % | 2 | % | 2 | % | 20 | % | |||||
Other | 9 | % | 10 | % | — | % | 8 | % | 8 | % | (2 | )% | |||||
100 | % | 100 | % | 100 | % | 100 | % |
Quarter Ended June 30, | Six Months Ended June 30, | ||||||||||
% of Sales | % of Sales | ||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||
Sales by Distribution Method | |||||||||||
On- Site | 29 | % | 30 | % | 29 | % | 30 | % | |||
Merchant | 37 | % | 37 | % | 37 | % | 37 | % | |||
Packaged Gas | 32 | % | 31 | % | 32 | % | 31 | % | |||
Other | 2 | % | 2 | % | 2 | % | 2 | % | |||
100 | % | 100 | % | 100 | % | 100 | % |
Quarter Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||
2018 | 2017 | Variance % | 2018 | 2017 | Variance % | |||||||||||||||||
Sales | $ | 444 | $ | 383 | 16 | % | $ | 872 | $ | 739 | 18 | % | ||||||||||
Cost of sales, exclusive of depreciation and amortization | 261 | 219 | 509 | 420 | ||||||||||||||||||
Gross margin | 183 | 164 | 363 | 319 | ||||||||||||||||||
Operating expenses | 52 | 49 | 106 | 97 | ||||||||||||||||||
Depreciation and amortization | 44 | 41 | 90 | 81 | ||||||||||||||||||
Operating profit | $ | 87 | $ | 74 | 18 | % | $ | 167 | $ | 141 | 18 | % | ||||||||||
Margin % | 19.6 | % | 19.3 | % | 19.2 | % | 19.1 | % |
Quarter Ended June 30, 2018 vs. 2017 | Six Months Ended June 30, 2018 vs. 2017 | ||||||||||
% Change | % Change | % Change | % Change | ||||||||
Sales | Operating Profit | Sales | Operating Profit | ||||||||
Factors Contributing to Changes | |||||||||||
Volume | 2 | % | 2 | % | 2 | % | 3 | % | |||
Price/Mix | 3 | % | 13 | % | 2 | % | 10 | % | |||
Cost pass-through | 4 | % | — | % | 3 | % | — | % | |||
Currency | 7 | % | 8 | % | 11 | % | 12 | % | |||
Acquisitions/divestitures | — | % | — | % | — | % | — | % | |||
Other | — | % | (5 | )% | — | % | (7 | )% | |||
16 | % | 18 | % | 18 | % | 18 | % |
Quarter Ended June 30, | Six Months Ended June 30, | ||||||||||||||||
% of Sales | % Change* | % of Sales | % Change* | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||
Sales by End Markets | |||||||||||||||||
Manufacturing | 21 | % | 20 | % | 14 | % | 21 | % | 21 | % | 10 | % | |||||
Metals | 16 | % | 16 | % | 14 | % | 17 | % | 16 | % | 12 | % | |||||
Energy | 4 | % | 5 | % | — | % | 4 | % | 4 | % | (3 | )% | |||||
Chemicals | 12 | % | 12 | % | 10 | % | 12 | % | 12 | % | 7 | % | |||||
Electronics | 7 | % | 8 | % | (7 | )% | 7 | % | 8 | % | — | % | |||||
Healthcare | 12 | % | 12 | % | 12 | % | 12 | % | 12 | % | 10 | % | |||||
Food & Beverage | 14 | % | 15 | % | 1 | % | 14 | % | 14 | % | 4 | % | |||||
Aerospace | 1 | % | 1 | % | 8 | % | 1 | % | 1 | % | (8 | )% | |||||
Other | 13 | % | 11 | % | 7 | % | 12 | % | 12 | % | 3 | % | |||||
100 | % | 100 | % | 100 | % | 100 | % |
Quarter Ended June 30, | Six Months Ended June 30, | ||||||||||
% of Sales | % of Sales | ||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||
Sales by Distribution Method | |||||||||||
On- Site | 17 | % | 18 | % | 18 | % | 19 | % | |||
Merchant | 34 | % | 35 | % | 34 | % | 35 | % | |||
Packaged Gas | 45 | % | 43 | % | 44 | % | 42 | % | |||
Other | 4 | % | 4 | % | 4 | % | 4 | % | |||
100 | % | 100 | % | 100 | % | 100 | % |
Quarter Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||
2018 | 2017 | Variance | 2018 | 2017 | Variance | ||||||||||||||||
Sales | $ | 349 | $ | 373 | (6 | )% | $ | 714 | $ | 742 | (4 | )% | |||||||||
Cost of sales, exclusive of depreciation and amortization | 209 | 221 | 428 | 444 | |||||||||||||||||
Gross margin | 140 | 152 | 286 | 298 | |||||||||||||||||
Operating expenses | 47 | 49 | 98 | 109 | |||||||||||||||||
Depreciation and amortization | 37 | 39 | 78 | 77 | |||||||||||||||||
Operating profit | $ | 56 | $ | 64 | (13 | )% | $ | 110 | $ | 112 | (2 | )% | |||||||||
Margin % | 16.0 | % | 17.2 | % | 15.4 | % | 15.1 | % |
Quarter Ended June 30, 2018 vs. 2017 | Six Months Ended June 30, 2018 vs. 2017 | ||||||||||
% Change | % Change | % Change | % Change | ||||||||
Sales | Operating Profit | Sales | Operating Profit | ||||||||
Factors Contributing to Changes | |||||||||||
Volume | 4 | % | 6 | % | 2 | % | 3 | % | |||
Price/Mix | — | % | (1 | )% | 1 | % | 4 | % | |||
Cost pass-through | — | % | — | % | — | % | — | % | |||
Currency | (10 | )% | (14 | )% | (7 | )% | (11 | )% | |||
Acquisitions/divestitures | — | % | — | % | — | % | — | % | |||
Other | — | % | (4 | )% | — | % | 2 | % | |||
(6 | )% | (13 | )% | (4 | )% | (2 | )% |
Quarter Ended June 30, | Six Months Ended June 30, | ||||||||||||||||
% of Sales | % Change* | % of Sales | % Change* | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||
Sales by End Markets | |||||||||||||||||
Manufacturing | 16 | % | 16 | % | (8 | )% | 16 | % | 17 | % | (4 | )% | |||||
Metals | 32 | % | 31 | % | 12 | % | 31 | % | 30 | % | 8 | % | |||||
Energy | 2 | % | 2 | % | 3 | % | 2 | % | 2 | % | (1 | )% | |||||
Chemicals | 9 | % | 10 | % | — | % | 10 | % | 10 | % | — | % | |||||
Electronics | — | % | — | % | — | % | — | % | — | % | — | % | |||||
Healthcare | 20 | % | 20 | % | 3 | % | 19 | % | 20 | % | 3 | % | |||||
Food & Beverage | 12 | % | 12 | % | (1 | )% | 13 | % | 13 | % | — | % | |||||
Aerospace | — | % | — | % | — | % | — | % | — | % | — | % | |||||
Other | 9 | % | 9 | % | 12 | % | 9 | % | 8 | % | 12 | % | |||||
100 | % | 100 | % | 100 | % | 100 | % |
Quarter Ended June 30, | Six Months Ended June 30, | ||||||||||
% of Sales | % of Sales | ||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||
Sales by Distribution Method | |||||||||||
On- Site | 34 | % | 33 | % | 32 | % | 32 | % | |||
Merchant | 37 | % | 38 | % | 38 | % | 38 | % | |||
Packaged Gas | 27 | % | 27 | % | 27 | % | 27 | % | |||
Other | 2 | % | 2 | % | 3 | % | 3 | % | |||
100 | % | 100 | % | 100 | % | 100 | % |
Quarter Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||
2018 | 2017 | Variance | 2018 | 2017 | Variance | ||||||||||||||||
Sales | $ | 502 | $ | 422 | 19 | % | $ | 978 | $ | 817 | 20 | % | |||||||||
Cost of sales, exclusive of depreciation and amortization | 312 | 268 | 606 | 517 | |||||||||||||||||
Gross margin | 190 | 154 | 372 | 300 | |||||||||||||||||
Operating expenses | 31 | 28 | 57 | 55 | |||||||||||||||||
Depreciation and amortization | 52 | 46 | 104 | 90 | |||||||||||||||||
Operating profit | $ | 107 | $ | 80 | 34 | % | $ | 211 | $ | 155 | 36 | % | |||||||||
Margin % | 21.3 | % | 19.0 | % | 21.6 | % | 19.0 | % |
Quarter Ended June 30, 2018 vs. 2017 | Six Months Ended June 30, 2018 vs. 2017 | ||||||||||
% Change | % Change | % Change | % Change | ||||||||
Sales | Operating Profit | Sales | Operating Profit | ||||||||
Factors Contributing to Changes | |||||||||||
Volume | 11 | % | 16 | % | 11 | % | 16 | % | |||
Price/Mix | 3 | % | 17 | % | 3 | % | 16 | % | |||
Cost pass-through | 1 | % | — | % | 1 | % | — | % | |||
Currency | 4 | % | 5 | % | 5 | % | 6 | % | |||
Acquisitions/divestitures | — | % | — | % | — | % | — | % | |||
Other | — | % | (4 | )% | — | % | (2 | )% | |||
19 | % | 34 | % | 20 | % | 36 | % |
Quarter Ended June 30, | Six Months Ended June 30, | ||||||||||||||||
% of Sales | % Change* | % of Sales | % Change* | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||
Sales by End Markets | |||||||||||||||||
Manufacturing | 9 | % | 9 | % | 14 | % | 9 | % | 9 | % | 20 | % | |||||
Metals | 27 | % | 27 | % | 20 | % | 27 | % | 26 | % | 19 | % | |||||
Energy | 4 | % | 3 | % | 86 | % | 5 | % | 3 | % | 97 | % | |||||
Chemicals | 15 | % | 15 | % | 9 | % | 15 | % | 15 | % | 9 | % | |||||
Electronics | 33 | % | 33 | % | 12 | % | 33 | % | 34 | % | 9 | % | |||||
Healthcare | 1 | % | 1 | % | 8 | % | 1 | % | 1 | % | 2 | % | |||||
Food & Beverage | 2 | % | 2 | % | (8 | )% | 2 | % | 2 | % | (9 | )% | |||||
Aerospace | — | % | — | % | — | % | — | % | — | % | — | % | |||||
Other | 9 | % | 10 | % | 7 | % | 8 | % | 10 | % | 6 | % | |||||
100 | % | 100 | % | 100 | % | 100 | % |
Quarter Ended June 30, | Six Months Ended June 30, | ||||||||||
% of Sales | % of Sales | ||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||
Sales by Distribution Method | |||||||||||
On- Site | 50 | % | 50 | % | 51 | % | 50 | % | |||
Merchant | 33 | % | 30 | % | 32 | % | 29 | % | |||
Packaged Gas | 11 | % | 14 | % | 11 | % | 14 | % | |||
Other | 6 | % | 6 | % | 6 | % | 7 | % | |||
100 | % | 100 | % | 100 | % | 100 | % |
Quarter Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||
2018 | 2017 | Variance | 2018 | 2017 | Variance | |||||||||||||||||
Sales | $ | 172 | $ | 151 | 14 | % | $ | 339 | $ | 301 | 13 | % | ||||||||||
Cost of sales, exclusive of depreciation and amortization | 111 | 98 | 221 | 195 | ||||||||||||||||||
Gross margin | 61 | 53 | 118 | 106 | ||||||||||||||||||
Operating expenses | 19 | 18 | 38 | 35 | ||||||||||||||||||
Depreciation and amortization | 11 | 10 | 21 | 20 | ||||||||||||||||||
Operating profit | $ | 31 | $ | 25 | 24 | % | $ | 59 | $ | 51 | 16 | % | ||||||||||
Margin % | 18.0 | % | 16.6 | % | 17.4 | % | 16.9 | % |
Quarter Ended June 30, 2018 vs. 2017 | Six Months Ended June 30, 2018 vs. 2017 | ||||||||||
% Change | % Change | % Change | % Change | ||||||||
Sales | Operating Profit | Sales | Operating Profit | ||||||||
Factors Contributing to Changes | |||||||||||
Volume/Price | 10 | % | 25 | % | 8 | % | 18 | % | |||
Cost pass-through | 1 | % | — | % | 1 | % | — | % | |||
Currency | 3 | % | 2 | % | 4 | % | 3 | % | |||
Acquisitions/divestitures | — | % | — | % | — | % | — | % | |||
Other | — | % | (3 | )% | — | % | (5 | )% | |||
14 | % | 24 | % | 13 | % | 16 | % |
Quarter Ended June 30, | Six Months Ended June 30, | ||||||||||||||||
% of Sales | % Change* | % of Sales | % Change* | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||
Sales by End Markets | |||||||||||||||||
Manufacturing | 12 | % | 10 | % | 30 | % | 12 | % | 11 | % | 20 | % | |||||
Metals | 8 | % | 9 | % | (7 | )% | 8 | % | 9 | % | (3 | )% | |||||
Energy | 19 | % | 19 | % | 7 | % | 19 | % | 19 | % | 6 | % | |||||
Chemicals | 2 | % | 2 | % | 3 | % | 2 | % | 2 | % | 8 | % | |||||
Electronics | 1 | % | 1 | % | — | % | 1 | % | 1 | % | 44 | % | |||||
Healthcare | — | % | — | % | — | % | — | % | — | % | — | % | |||||
Food & Beverage | 3 | % | 3 | % | 19 | % | 3 | % | 3 | % | 3 | % | |||||
Aerospace | 43 | % | 44 | % | 10 | % | 44 | % | 44 | % | 9 | % | |||||
Other | 12 | % | 12 | % | 11 | % | 11 | % | 11 | % | 5 | % | |||||
100 | % | 100 | % | 100 | % | 100 | % |
Percentage of YTD 2018 Consolidated Sales | Exchange Rate for Income Statement | Exchange Rate for Balance Sheet | ||||||||||||
Year-To-Date Average | June 30, | December 31, | ||||||||||||
Currency | 2018 | 2017 | 2018 | 2017 | ||||||||||
Euro | 14 | % | 0.83 | 0.92 | 0.86 | 0.83 | ||||||||
Brazilian real | 9 | % | 3.41 | 3.18 | 3.86 | 3.31 | ||||||||
Canadian dollar | 7 | % | 1.28 | 1.33 | 1.31 | 1.26 | ||||||||
Chinese yuan | 7 | % | 6.37 | 6.88 | 6.62 | 6.51 | ||||||||
Mexican peso | 5 | % | 19.03 | 19.37 | 19.91 | 19.66 | ||||||||
Korean won | 4 | % | 1,076 | 1,142 | 1,115 | 1,067 | ||||||||
India rupee | 3 | % | 65.65 | 65.70 | 68.47 | 63.87 | ||||||||
Argentine peso | 1 | % | 21.30 | 15.69 | 28.85 | 18.65 | ||||||||
British pound | 1 | % | 0.73 | 0.79 | 0.76 | 0.74 | ||||||||
Norwegian krone | 1 | % | 7.93 | 8.48 | 8.15 | 8.20 |
(Millions of dollars) | Six months ended June 30, | ||||||
2018 | 2017 | ||||||
NET CASH PROVIDED BY (USED FOR): | |||||||
OPERATING ACTIVITIES | |||||||
Net income (including noncontrolling interests) | $ | 971 | $ | 824 | |||
Non-cash charges (credits): | |||||||
Add: Depreciation and amortization | 622 | 579 | |||||
Add: Deferred income taxes | 10 | 48 | |||||
Add: Share-based compensation | 21 | 28 | |||||
Add: Transaction costs and other charges, net of payments (a) | 15 | 17 | |||||
Net income adjusted for non-cash charges | 1,639 | 1,496 | |||||
Less: Working capital | (138 | ) | (164 | ) | |||
Less: Pension contributions | (10 | ) | (6 | ) | |||
Other | (13 | ) | 85 | ||||
Net cash provided by operating activities | $ | 1,478 | $ | 1,411 | |||
INVESTING ACTIVITIES | |||||||
Capital expenditures | (676 | ) | (652 | ) | |||
Acquisitions, net of cash acquired | — | (2 | ) | ||||
Divestitures and asset sales | 69 | 17 | |||||
Net cash used for investing activities | $ | (607 | ) | $ | (637 | ) | |
FINANCING ACTIVITIES | |||||||
Debt increase (decrease) - net | (492 | ) | (305 | ) | |||
Issuances (purchases) of common stock - net | 43 | 59 | |||||
Cash dividends - Praxair, Inc. shareholders | (474 | ) | (450 | ) | |||
Noncontrolling interest transactions and other | (22 | ) | (84 | ) | |||
Net cash provided by (used for) financing activities | $ | (945 | ) | $ | (780 | ) | |
Effect of exchange rate changes on cash and cash equivalents | $ | (64 | ) | $ | 17 | ||
Cash and cash equivalents, end-of-period | $ | 479 | $ | 535 |
Quarter Ended June 30, | Six Months Ended June 30, | ||||||||||||||
(Dollar amounts in millions, except per share data) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Adjusted Operating Profit | |||||||||||||||
Reported operating profit | $ | 689 | $ | 606 | $ | 1,342 | $ | 1,173 | |||||||
Add: Transaction costs and other charges | 24 | 15 | 43 | 21 | |||||||||||
Adjusted operating profit | $ | 713 | $ | 621 | $ | 1,385 | $ | 1,194 | |||||||
Reported percent change | 14 | % | 14 | % | |||||||||||
Adjusted percent change | 15 | % | 16 | % | |||||||||||
Adjusted Income Taxes and Effective Tax Rate | |||||||||||||||
Reported income taxes | $ | 158 | $ | 157 | $ | 306 | $ | 306 | |||||||
Add: Transaction costs and other charges | 3 | — | 5 | — | |||||||||||
Adjusted income taxes | $ | 161 | $ | 157 | $ | 311 | $ | 306 |
Adjusted Effective Tax Rate | |||||||||||||||
Reported income before income taxes and equity investments | $ | 643 | $ | 566 | $ | 1,248 | $ | 1,107 | |||||||
Add: Transaction costs and other charges | 24 | 15 | 43 | 21 | |||||||||||
Adjusted income before income taxes and equity investments | $ | 667 | $ | 581 | $ | 1,291 | $ | 1,128 | |||||||
Reported effective tax rate | 24.6 | % | 27.7 | % | 24.5 | % | 27.6 | % | |||||||
Adjusted effective tax rate | 24.1 | % | 27.0 | % | 24.1 | % | 27.1 | % | |||||||
Adjusted Noncontrolling Interests | |||||||||||||||
Reported noncontrolling interests | $ | 19 | $ | 14 | $ | 29 | $ | 29 | |||||||
Add: Cost reduction program | — | — | (1 | ) | — | ||||||||||
Adjusted Noncontrolling Interests | $ | 19 | $ | 14 | $ | 28 | $ | 29 | |||||||
Adjusted Net Income - Praxair, Inc. | |||||||||||||||
Reported net income - Praxair, Inc. | $ | 480 | $ | 406 | $ | 942 | $ | 795 | |||||||
Add: Transaction costs and other charges | 21 | 15 | 38 | 21 | |||||||||||
Add: Cost reduction program | — | — | 1 | — | |||||||||||
Total adjustments | 21 | 15 | 39 | 21 | |||||||||||
Adjusted net income - Praxair, Inc. | $ | 501 | $ | 421 | $ | 981 | $ | 816 | |||||||
Reported percent change | 18 | % | 18 | % | |||||||||||
Adjusted percent change | 19 | % | 20 | % |
Adjusted Diluted Earnings Per Share | |||||||||||||||
Reported diluted EPS | $ | 1.65 | $ | 1.41 | $ | 3.24 | $ | 2.76 | |||||||
Add: Transaction costs and other charges | 0.07 | 0.05 | 0.13 | 0.07 | |||||||||||
Adjusted diluted EPS | $ | 1.72 | $ | 1.46 | $ | 3.37 | $ | 2.83 | |||||||
Reported percent change | 17 | % | 17 | % | |||||||||||
Adjusted percent change | 18 | % | 19 | % |
Quarter Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(Dollar amounts in millions) | |||||||||||||||
Reported net income - Praxair, Inc. | $ | 480 | $ | 406 | $ | 942 | $ | 795 | |||||||
Add: noncontrolling interest | 19 | 14 | 29 | 29 | |||||||||||
Add: interest expense - net | 44 | 38 | 90 | 79 | |||||||||||
Add: net pension and OPEB cost (benefit), excluding service cost | 2 | 2 | 4 | (13 | ) | ||||||||||
Add: income taxes | 158 | 157 | 306 | 306 | |||||||||||
Add: depreciation and amortization | 311 | 292 | 622 | 579 | |||||||||||
EBITDA | $ | 1,014 | $ | 909 | $ | 1,993 | $ | 1,775 | |||||||
Adjustments: | |||||||||||||||
Add: Transaction costs | $ | 24 | $ | 15 | $ | 43 | $ | 21 | |||||||
ADJUSTED EBITDA | $ | 1,038 | $ | 924 | $ | 2,036 | $ | 1,796 | |||||||
Reported Sales | $ | 3,061 | $ | 2,834 | $ | 6,060 | $ | 5,562 | |||||||
EBITDA Margin | 33.1 | % | 32.1 | % | 32.9 | % | 31.9 | % | |||||||
Adjusted EBITDA Margin | 33.9 | % | 32.6 | % | 33.6 | % | 32.3 | % |
Six Months Ended June 30, | |||||||
2018 | 2017 | ||||||
(Dollar amounts in millions) | |||||||
Debt | $ | 8,458 | $ | 9,367 | |||
Less: cash and cash equivalents | (479 | ) | (535 | ) | |||
Net debt | 7,979 | 8,832 | |||||
Equity and redeemable noncontrolling interests | |||||||
Redeemable noncontrolling interests | 14 | 10 | |||||
Praxair, Inc. shareholders’ equity | 6,027 | 5,807 | |||||
Noncontrolling interests | 501 | 453 | |||||
Total equity and redeemable noncontrolling interests | 6,542 | 6,270 | |||||
Capital | $ | 14,521 | $ | 15,102 | |||
DEBT-TO-CAPITAL RATIO | 54.9 | % | 58.5 | % |
(a) | Based on an evaluation of the effectiveness of Praxair’s disclosure controls and procedures, which was made under the supervision and with the participation of management, including Praxair’s principal executive officer and principal financial officer, the principal executive officer and principal financial officer have each concluded that, as of the end of the quarterly period covered by this report, such disclosure controls and procedures are effective in ensuring that information required to be disclosed by Praxair in reports that it files under the Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and accumulated and communicated to management including Praxair’s principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure. |
(b) | There were no changes in Praxair’s internal control over financial reporting that occurred during the quarterly period covered by this report that have materially affected, or are reasonably likely to materially affect, Praxair’s internal control over financial reporting. |
Period | Total Number of Shares Purchased (Thousands) | Average Price Paid Per Share | Total Numbers of Shares Purchased as Part of Publicly Announced Program (1) (Thousands) | Approximate Dollar Value of Shares that May Yet be Purchased Under the Program (2) (Millions) | |||||||||
April 2018 | — | $ | — | — | $ | 1,579 | |||||||
May 2018 | 2 | $ | 151.89 | 2 | $ | 1,579 | |||||||
June 2018 | — | $ | — | — | $ | 1,579 | |||||||
Second Quarter 2018 | 2 | $ | 151.89 | 2 | $ | 1,579 |
(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 June 30, 2018, the Company purchased $1,421 million of its common stock pursuant to the 2014 program, leaving an additional $79 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. |
(a) | Exhibits | ||
10.1 | |||
12.01 | |||
31.01 | |||
31.02 | |||
32.01 | |||
32.02 | |||
101.INS | XBRL Instance Document | ||
101.SCH | XBRL Taxonomy Extension Schema | ||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase | ||
101.LAB | XBRL Taxonomy Extension Label Linkbase | ||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase | ||
101.DEF | XBRL Taxonomy Extension Definition Linkbase |
PRAXAIR, INC. | |||
(Registrant) | |||
Date: July 26, 2018 | By: /s/ Kelcey E. Hoyt | ||
Kelcey E. Hoyt | |||
Vice President and Controller | |||
(On behalf of the Registrant | |||
and as Chief Accounting Officer) |
RATIO OF EARNINGS TO FIXED CHARGES | |||||||||||||||||||
Praxair, Inc. and Subsidiaries | |||||||||||||||||||
Exhibit 12.01 | |||||||||||||||||||
Six Months Ended June 30, | Year Ended December 31, | ||||||||||||||||||
(Dollar amounts in millions, except ratios) | 2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||||||
Pre-tax income from continuing operations before adjustment for | |||||||||||||||||||
noncontrolling interests in consolidated subsidiaries or income or | |||||||||||||||||||
loss from equity investees | $ | 1,248 | $ | 2,287 | $ | 2,048 | $ | 2,160 | $ | 2,395 | |||||||||
Capitalized interest | (8 | ) | (28 | ) | (34 | ) | (33 | ) | (38 | ) | |||||||||
Depreciation of capitalized interest | 13 | 17 | 19 | 22 | 27 | ||||||||||||||
Dividends from less than 50%-owned companies carried at equity | 29 | 111 | 8 | 11 | 6 | ||||||||||||||
Adjusted pre-tax income from continuing operations before adjustment | |||||||||||||||||||
for noncontrolling interests in consolidated subsidiaries or income | |||||||||||||||||||
or loss from equity investees | $ | 1,282 | $ | 2,387 | $ | 2,041 | $ | 2,160 | $ | 2,390 | |||||||||
Fixed charges | |||||||||||||||||||
Interest on long-term and short-term debt | $ | 90 | $ | 161 | $ | 190 | $ | 161 | $ | 213 | |||||||||
Capitalized interest | 8 | 28 | 34 | 33 | 38 | ||||||||||||||
Rental expenses representative of an interest factor | 30 | 49 | 47 | 47 | 52 | ||||||||||||||
Total fixed charges | $ | 128 | $ | 238 | $ | 271 | $ | 241 | $ | 303 | |||||||||
Adjusted pre-tax income from continuing operations before adjustment | |||||||||||||||||||
for noncontrolling interests in consolidated subsidiaries or income or | |||||||||||||||||||
loss from equity investees plus total fixed charges | $ | 1,410 | $ | 2,625 | $ | 2,312 | $ | 2,401 | $ | 2,693 | |||||||||
RATIO OF EARNINGS TO FIXED CHARGES | 11.0 | 11.0 | 8.5 | 10.0 | 8.9 |
1. | I have reviewed this Quarterly Report on Form 10-Q of Praxair, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have: |
(a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing equivalent function): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
July 26, 2018 | By: /s/ Stephen F. Angel | ||
Stephen F. Angel | |||
Chairman, President | |||
Chief Executive Officer | |||
(principal executive officer) |
1. | I have reviewed this Quarterly Report on Form 10-Q of Praxair, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have: |
(a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing equivalent function): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
July 26, 2018 | By: /s/ Matthew J. White | ||
Matthew J. White | |||
Senior Vice President and | |||
Chief Financial Officer | |||
(principal financial officer) |
July 26, 2018 | By: /s/ Stephen F. Angel | ||
Stephen F. Angel | |||
Chairman, President | |||
Chief Executive Officer | |||
(principal executive officer) |
July 26, 2018 | By: /s/ Matthew J. White | ||
Matthew J. White | |||
Senior Vice President and | |||
Chief Financial Officer | |||
(principal financial officer) |
Document and Entity Information |
6 Months Ended |
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Jun. 30, 2018
shares
| |
Document Information [Line Items] | |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | Jun. 30, 2018 |
Document Fiscal Year Focus | 2018 |
Document Fiscal Period Focus | Q2 |
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 | 287,575,784 |
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Millions |
3 Months Ended | 6 Months Ended | |||||||||
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Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
||||||||
SALES | [1] | $ 3,061 | $ 2,834 | $ 6,060 | $ 5,562 | ||||||
Cost of sales, exclusive of depreciation and amortization | 1,723 | 1,599 | 3,400 | 3,148 | |||||||
Selling, general and administrative | 307 | 305 | 617 | 595 | |||||||
Depreciation and amortization | 311 | 292 | 622 | 579 | |||||||
Research and development | 24 | 23 | 48 | 46 | |||||||
Transaction costs and other charges | 24 | 15 | 43 | 21 | |||||||
Other income (expense) - net | 17 | 6 | 12 | ||||||||
OPERATING PROFIT | 689 | 606 | 1,342 | 1,173 | |||||||
Interest expense - net | 44 | 38 | 90 | 79 | |||||||
Net pension and OPEB cost (benefit), excluding service cost | 2 | 2 | 4 | (13) | |||||||
INCOME BEFORE INCOME TAXES AND EQUITY INVESTMENTS | 643 | 566 | 1,248 | 1,107 | |||||||
Income taxes | 158 | 157 | 306 | 306 | |||||||
INCOME BEFORE EQUITY INVESTMENTS | 485 | 409 | 942 | 801 | |||||||
Income from equity investments | 14 | 11 | 29 | 23 | |||||||
NET INCOME (INCLUDING NONCONTROLLING INTERESTS) | 499 | 420 | 971 | 824 | |||||||
Less: noncontrolling interests | $ (19) | $ (14) | (29) | (29) | |||||||
NET INCOME - PRAXAIR, INC. | $ 942 | $ 795 | |||||||||
PER SHARE DATA - PRAXAIR, INC. SHAREHOLDERS | |||||||||||
Basic earnings per share (usd per share) | $ 1.67 | $ 1.42 | $ 3.27 | $ 2.78 | |||||||
Diluted earnings per share (usd per share) | 1.65 | 1.41 | 3.24 | 2.76 | |||||||
Cash dividends per share (usd per share) | $ 0.8250 | $ 0.7875 | $ 1.650 | $ 1.575 | |||||||
WEIGHTED AVERAGE SHARES OUTSTANDING (000’s): | |||||||||||
Basic shares outstanding (in shares) | 287,803 | 286,090 | 287,654 | 285,799 | |||||||
Diluted shares outstanding (in shares) | 290,908 | 288,535 | 290,926 | 288,067 | |||||||
Parent [Member] | |||||||||||
Net Income (Loss), Including Portion Attributable to Nonredeemable Noncontrolling Interest | $ 480 | $ 406 | [2] | $ 942 | [2] | $ 795 | [2] | ||||
NET INCOME - PRAXAIR, INC. | $ 406 | ||||||||||
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Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Property, plant and equipment, accumulated depreciation | $ 13,821 | $ 13,819 |
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) | 95,654,841 | 96,453,634 |
Summary of Significant Accounting Policies |
6 Months Ended | ||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||
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 2017 Annual Report on Form 10-K. There have been no material changes to the company’s significant accounting policies during 2018. Accounting Standards Implemented in 2018
Accounting Standards to be Implemented
Reclassifications – Certain prior years’ amounts have been reclassified to conform to the current year’s presentation including reclassifications on the consolidated statements of income and segment operating profit relating to the adoption of accounting guidance on the presentation of net periodic pension and postretirement benefit costs. |
Transaction Costs and Other Charges |
6 Months Ended |
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Jun. 30, 2018 | |
Unusual or Infrequent Items, or Both [Abstract] | |
Transaction Costs and Other Charges | Transaction Costs and Other Charges On June 1, 2017 Praxair and Linde AG ("Linde") entered into a business combination agreement, pursuant to which they agreed to combine their respective businesses subject to shareholder and regulatory approvals (see Note 17). Praxair incurred transaction costs and other charges primarily in connection with the intended business combination totaling $24 million and $43 million for the quarter and six months ended June 30, 2018 ($21 million and $39 million after-tax and noncontrolling interests, or $0.07 and $0.13 per diluted share), respectively. Praxair incurred transaction costs which totaled $15 million and $21 million after-tax for the quarter and six months ended June 30, 2017 ($0.05 and $0.07 per diluted share), respectively. 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. |
Acquisitions |
6 Months Ended |
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Jun. 30, 2018 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions Acquisition activity was immaterial for the quarter and six month periods ending June 30, 2018 and June 30, 2017. |
Supplemental Information |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Supplemental Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Information | Supplemental Information Inventories The following is a summary of Praxair’s consolidated inventories:
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 $32 million and $54 million at June 30, 2018 and December 31, 2017, respectively. These amounts are net of reserves of $46 million and $51 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. |
Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt The following is a summary of Praxair’s outstanding debt at June 30, 2018 and December 31, 2017:
In June 2018, the company's $500 million 364-day revolving credit facility with a syndicate of banks expired and was not renewed. |
Financial Instruments |
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Derivative Instruments and Hedging Activities Disclosure [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 June 30, 2018 and December 31, 2017 for consolidated subsidiaries:
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 As of June 30, 2018, the Company has €1.65 billion ($1.92 billion) of Euro-denominated notes, of which €1.57 billion ($1.83 billion) is designated as a 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 $148 million (long-term debt decreased by $51 million during the first six months of 2018), 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 June 30, 2018, Praxair had one outstanding interest rate swap agreement with a $475 million notional amount related to the $475 million 1.25% 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 June 30, 2018, $1 million was recognized as a decrease in the fair value of these notes (increase in the fair value of less than $1 million at December 31, 2017). Terminated Treasury Rate Locks The following table summarizes the unrecognized gains (losses) related to terminated treasury rate lock contracts:
The following table summarizes the impact of the company’s derivatives on the consolidated statements of income:
* 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 table summarizes the impacts of the company's derivatives designated as hedging instruments that impact AOCI: Derivatives Designated as Hedging Instruments **
**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 2018 or 2017. 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 less than $1 million are expected to be reclassified to earnings during the next twelve months. |
Fair Value Disclosures |
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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:
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 June 30, 2018, the estimated fair value of Praxair’s long-term debt portfolio was $8,216 million versus a carrying value of $8,208 million. At December 31, 2017, the estimated fair value of Praxair’s long-term debt portfolio was $8,969 million versus a carrying value of $8,762 million. Differences from carrying amounts are attributable to interest-rate changes subsequent to when the debt was issued. |
Earnings Per Share - Praxair, Inc. Shareholders |
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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:
There were no antidilutive shares for the quarter and six months ended June 30, 2018. Stock options of 2,508,472 and 2,509,162 for the quarter and six months ended June 30, 2017 were antidilutive and therefore excluded in the computation of diluted earnings per share. |
Goodwill and Other Intangible Assets (Notes) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Changes in the carrying amount of goodwill for the six months ended June 30, 2018 were as follows:
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. For the 2018 test completed this quarter, Praxair applied the FASB's accounting guidance which allows the Company to first assess qualitative factors to determine the extent of additional quantitative analysis, if any, that may be required to test goodwill for impairment (refer to Note 1 to the consolidated financial statements of Praxair's 2017 Annual Report on Form 10-K). Based on the qualitative assessments performed in the second quarter of 2018, Praxair concluded that it was more likely than not that the fair value of each reporting unit substantially exceeded its carrying value and therefore, further quantitative analysis was not required. As a result, no impairment was recorded. There were no indicators of impairment through June 30, 2018. Changes in the carrying amounts of other intangibles for the six months ended June 30, 2018 were as follows:
* Other primarily relates to the 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 16 years. Total estimated annual amortization expense is as follows:
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Share-Based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Compensation | Share-Based Compensation Share-based compensation expense of $17 million ($12 million after-tax) and $16 million ($1 million after-tax) was recognized during the quarters ended June 30, 2018 and 2017, respectively. The 2018 and 2017 quarters include $2 million and $10 million of excess tax benefits, respectively. Share-based compensation of $21 million ($2 million after-tax) and $28 million ($5 million after-tax) was recognized during the six months ended June 30, 2018 and 2017, respectively. The 2018 and 2017 six-month periods include $15 million and $14 million, respectively, of excess tax benefits. 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 2017 Annual Report on Form 10-K. Stock Options The weighted-average fair value of options granted during the six months ended June 30, 2018 was $19.29 ($12.40 in 2017) 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 2018 and 2017:
The following table summarizes option activity under the plans as of June 30, 2018 and changes during the six-month period then ended (averages are calculated on a weighted basis; life in years; intrinsic value expressed in millions):
The aggregate intrinsic value represents the difference between the company’s closing stock price of $158.15 as of June 30, 2018 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 and six months ended June 30, 2018 was $14 million and $77 million, respectively ($45 million and $63 million during the same periods in 2017, respectively). Cash received from option exercises under all share-based payment arrangements for the quarter and six months ended June 30, 2018 was $12 million and $38 million, respectively ($44 million and $63 million for the same periods in 2017). The cash tax benefit realized from share-based compensation totaled $5 million and $19 million for the quarter and six months ended June 30, 2018, respectively ($18 million and $26 million for the same periods in 2017, respectively). As of June 30, 2018, $33 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 six months ended June 30, 2018, the company granted restricted stock units to employees of 269,433 shares. There were no performance-based stock awards granted to employees during the six months ended June 30, 2018 as restricted stock units were granted in place of performance-based stock awards. Compensation expense related to the restricted stock units is recognized over the vesting period, which is up to three years, based on the grant date fair value. As of June 30, 2018 the company had performance-based stock awards outstanding, 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. The weighted-average fair value of restricted stock units granted during the six months ended June 30, 2018 was $144.79 ($111.69 for the same period in 2017). 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 ROC performance-based stock awards granted during the six months ended June 30, 2017 was $109.68. The weighted-average fair value of performance-based stock tied to relative TSR performance granted during six months ended June 30, 2017 was $124.12 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 June 30, 2018 and changes during the six months then ended (shares based on target amounts, averages are calculated on a weighted basis):
There are approximately 6 thousand performance-based shares and 3 thousand restricted stock shares that are non-vested at June 30, 2018 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 June 30, 2018, based on current estimates of future performance, $11 million of unrecognized compensation cost related to performance-based awards is expected to be recognized through the first quarter of 2020 and $36 million of unrecognized compensation cost related to the restricted stock awards is expected to be recognized primarily through the first quarter of 2021. |
Retirement Programs |
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Retirement Benefits, Description [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Programs | Retirement Programs The components of net pension and postretirement benefits other than pensions (“OPEB”) costs for the quarter and six months ended June 30, 2018 and 2017 are shown below:
(a) The curtailment gain recorded in the first quarter of 2017 resulted from the termination of an OPEB plan in South America. Praxair estimates that 2018 required contributions to its pension plans will be in the range of $15 million to $20 million, of which $10 million have been made through June 30, 2018. |
Commitments and Contingencies |
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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 2017 Annual Report on Form 10-K). Significant matters are:
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. |
Segments |
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Segments | Segments For a description of Praxair’s operating segments, refer to Note 18 to the consolidated financial statements of Praxair’s 2017 Annual Report on Form 10-K. Sales and operating profit by segment for the quarters and six months ended June 30, 2018 and 2017 are shown below. 2017 segment operating profit has been reclassified to conform with current year presentation as a result of the adoption of new accounting guidance on the presentation of net periodic pension and postretirement benefit costs (see Note 1).
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Equity and Redeemable Noncontrolling Interests |
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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 and six months ended June 30, 2018 and 2017 is provided below:
The components of AOCI are as follows:
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 June 30, 2018 and 2017, redeemable noncontrolling interests includes one packaged gas distributor in the United States where the noncontrolling shareholder has a put option. Following is a summary of the changes in redeemable noncontrolling interests for the six months ended June 30, 2018 and 2017:
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Revenue Recognition (Notes) |
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Revenue Recognition | 15. Revenue Recognition Effective January 1, 2018, Praxair adopted the FASB's Accounting Standards Update No. 2014-09 ("ASC 606") relating to Revenue Recognition using the modified retrospective transition method. The new accounting standard requires revenue to be recognized as control of goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled to receive in exchange for the goods or services. No material differences in revenue recognition were identified as compared to the Company's historical revenue recognition accounting; accordingly, there is no adjustment to opening retained earnings at January 1, 2018 and therefore no need to present comparable revenue in accordance with the prior accounting policy. The following sections include updated accounting policies and disclosures required by ASC 606. Praxair's significant accounting policies for periods through December 31, 2017 are summarized in Note 1 to its 2017 Annual Report on Form 10-K. Contracts with Customers Approximately 94% of Praxair’s consolidated sales are generated from industrial gases and related products in four geographic segments (North America, Europe, South America and Asia) and the remaining 6% is related to the global surface technologies segment. Praxair serves a diverse group of industries including healthcare, petroleum refining, manufacturing, food, beverage carbonation, fiber-optics, steel making, aerospace, chemicals and water treatment. Industrial Gases Within each of the Company’s geographic segments for industrial gases, there are three basic distribution methods: (i) on-site or tonnage; (ii) merchant or bulk liquid; and (iii) packaged or cylinder gases. The distribution method used by Praxair to supply a customer is determined by many factors, including the customer’s volume requirements and location. The distribution method generally determines the contract terms with the customer and, accordingly, the revenue recognition accounting practices. Praxair’s primary products in its industrial gases business are atmospheric gases (oxygen, nitrogen, argon, rare gases) and process gases (carbon dioxide, helium, hydrogen, electronic gases, specialty gases, acetylene). These products are generally sold through one of the three distribution methods. Following is a description of each of the three industrial gases distribution methods and the respective revenue recognition policies: On-site. Customers that require the largest volumes of product and that have a relatively constant demand pattern are supplied by cryogenic and process gas on-site plants. Praxair constructs plants on or adjacent to these customers’ sites and supplies the product directly to customers by pipeline. Where there are large concentrations of customers, a single pipeline may be connected to several plants and customers. On-site product supply contracts generally are total requirement contracts with terms typically ranging from 10-20 years and contain minimum purchase requirements and price escalation provisions. Many of the cryogenic on-site plants also produce liquid products for the merchant market. Therefore, plants are typically not dedicated to a single customer. Additionally, Praxair is responsible for the design, construction, operations and maintenance of the plants and our customers typically have no involvement in these activities. Advanced air separation processes also allow on-site delivery to customers with smaller volume requirements. The Company’s performance obligations related to on-site customers are satisfied over time as customers receive and obtain control of the product. Praxair has elected to apply the practical expedient for measuring progress towards the completion of a performance obligation and recognizes revenue as the company has the right to invoice each customer, which generally corresponds with product delivery. Accordingly, revenue is recognized when product is delivered to the customer and the Company has the right to invoice the customer in accordance with the contract terms. Consideration in these contracts is generally based on pricing which fluctuates with various price indices. Variable components of consideration exist within on-site contracts but are considered constrained. Merchant. Merchant deliveries generally are made from Praxair’s plants by tanker trucks to storage containers at the customer's site. Due to the relatively high distribution cost, merchant oxygen and nitrogen generally have a relatively small distribution radius from the plants at which they are produced. Merchant argon, hydrogen and helium can be shipped much longer distances. The customer agreements used in the merchant business are usually three-to seven-year supply agreements based on the requirements of the customer. These contracts generally do not contain minimum purchase requirements or volume commitments. The Company’s performance obligations related to merchant customers are generally satisfied at a point in time as the customers receive and obtain control of the product. Revenue is recognized when product is delivered to the customer and the Company has the right to invoice the customer in accordance with the contract terms. Any variable components of consideration within merchant contracts are constrained however this consideration is not significant. Packaged Gases. Customers requiring small volumes are supplied products in containers called cylinders, under medium to high pressure. Praxair distributes merchant gases from its production plants to Company-owned cylinder filling plants where cylinders are then filled for distribution to customers. Cylinders may be delivered to the customer’s site or picked up by the customer at a packaging facility or retail store. Praxair invoices the customer for the industrial gases and the use of the cylinder container(s). The Company also sells hardgoods and welding equipment purchased from independent manufacturers. Packaged gases are generally sold under one to three-year supply contracts and purchase orders and do not contain minimum purchase requirements or volume commitments. The Company’s performance obligations related to packaged gases are satisfied at a point in time. Accordingly, revenue is recognized when product is delivered to the customer or when the customer picks up product from a packaged gas facility or retail store, and the Company has the right to payment from the customer in accordance with the contract terms. Any variable consideration is constrained and will be recognized when the uncertainty related to the consideration is resolved. Surface Technologies The company’s surface technologies segment, operated through Praxair Surface Technologies, Inc., supplies wear-resistant and high-temperature corrosion-resistant metallic and ceramic coatings and powders. Praxair Surface Technologies is a leading global supplier of coatings services and thermal spray consumables to customers in the aircraft, energy, printing, primary metals, petrochemical, textile, and other industries. Its coatings are used to provide wear resistance, corrosion protection, thermal insulation, and many other surface-enhancing functions which serve to extend component life, enable optimal performance, and reduce operating costs. It also manufactures a complete line of electric arc, plasma and wire spray, and high-velocity oxy-fuel ("HVOF") equipment. The Company’s performance obligation related to surface technologies customers are generally satisfied at a point in time when the customer receives and takes control of product. Accordingly, revenue is recognized when product is delivered to the customer or when the customer picks up the product from the Company’s facility, and the Company has the right to invoice the customer in accordance with the contract terms. Payment Terms and Other Praxair generally receives payment after performance obligations are satisfied, and customer prepayments are not typical. Payment terms vary based on the country where sales originate and local customary payment practices. Praxair does not offer extended financing outside of customary payment terms. Contract asset and liability balances and the changes in these balances are not material. Amounts billed for sales and use taxes, value-added taxes, and certain excise and other specific transactional taxes imposed on revenue producing transactions are presented on a net basis and are not included in sales within the consolidated statement of income. Additionally, sales returns and allowances are not a normal practice in the industry and are not significant. Disaggregated Revenues Information As described above and in Note 18 of the 2017 10-K, the Company manages its industrial gases business on a geographic basis, while the surface technologies business is managed on a global basis. Further, the Company believes that reporting sales by distribution method by reportable geographic segment best illustrates the nature, timing, type of customer, and contract terms for its revenues, including terms and pricing. The following table shows sales by distribution method for each reportable segment and at the consolidated level for the quarter and six months ended June 30, 2018.
Remaining Performance Obligations As described above, Praxair’s contracts with on-site customers are under long-term supply arrangements which generally require the customer to purchase their requirements from Praxair and also have minimum purchase requirements. The Company estimates the consideration related to minimum purchase requirements is approximately $17 billion. This amount excludes all sales above minimum purchase requirements, which can be significant depending on customer needs. In the future, actual amounts will be different due to impacts from several factors, many of which are beyond the Company’s control including, but not limited to, timing of newly signed, terminated and renewed contracts, inflationary price escalations, currency exchange rates, and pass-through costs related to natural gas and electricity. The actual duration of long-term supply contracts ranges up to twenty years. The Company estimates that approximately half of the revenue related to minimum purchase requirements are estimated to be earned in the next five years and the remaining thereafter. |
Income Tax Disclosure (Notes) |
6 Months Ended |
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Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | Note 16. Income Taxes U.S. Tax Cuts and Jobs Act (Tax Act) On December 22, 2017 the U.S. government enacted the Tax Cuts and Jobs Act (Tax Act). This comprehensive tax legislation significantly revises the U.S. corporate income tax rules by, among other things, lowering the corporate income tax rate from 35% to 21%, implementing a territorial tax system and imposing a one-time tax on accumulated earnings of foreign subsidiaries. Given the substantial uncertainties surrounding the Tax Act and the short period of time between December 22, 2017 and December 31, 2017 to calculate the U.S. Federal, U.S. state, and non-U.S. tax impacts of the Tax Act, the Company is accounting for its income tax charge on a provisional (estimated) basis as allowed by SEC Staff Accounting Bulletin No. 118. In 2017, the Company recorded a net provisional income tax charge of $394 million with three main components: (i) an estimated $467 million U.S. federal and state tax charge for deemed repatriation of accumulated foreign earnings; (ii) an estimated $260 million charge for foreign withholding taxes related to anticipated future repatriation of foreign earnings; and (iii) an estimated $333 million deferred tax benefit for the revaluation of net deferred tax liabilities from 35% to the new 21% tax rate. Refer to Note 5 to the consolidated financial statements of Praxair's 2017 Annual Report on Form 10-K. During 2018, the Company will continue to evaluate the Tax Act, additional guidance from the Internal Revenue Service, its historical foreign earnings and taxes and other items that could impact its net provisional tax charge. Additionally, the Company will continue to review its foreign capital structures, organizational cash needs and the foreign withholding tax cost of planned repatriation. As new information becomes available, the Company will update its provisional estimate and record any changes to its income tax expense at that time. As of June 30, 2018, there have been no adjustments to the net provisional income tax charge recognized in 2017. |
Proposed Business Combination with Linde AG (Notes) |
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Jun. 30, 2018 | |
Proposed Business Combination with Linde AG [Abstract] | |
Business Combination Disclosure [Text Block] | Proposed Business Combination with Linde AG On June 1, 2017, Praxair, Inc. and Linde AG entered into a definitive Business Combination Agreement, as amended (the "Business Combination Agreement"), pursuant to which, among other things, Praxair, Inc. and Linde AG agreed to combine their respective businesses through an all-stock transaction, and become subsidiaries of a new holding company incorporated in Ireland, Linde plc. In connection with the proposed business combination, Linde plc filed a Registration Statement on Form S-4 which was declared effective by the U. S. Securities and Exchange Commission ("SEC") on August 14, 2017. Linde plc has also filed an offer document with the German Federal Financial Supervisory Authority (Bundesanstalt fuer Finanzdienstleistungsaufsicht) (“BaFin”) which was approved for publication by BaFin on August 14, 2017 and published by Linde plc on August 15, 2017. Pursuant to the offer document, Linde plc made an offer to exchange each issued and outstanding no-par value bearer share of Linde AG for 1.540 ordinary shares of Linde plc (the “Exchange Offer”). In addition, Zamalight Subco, Inc., an indirect wholly-owned Delaware subsidiary of Linde plc, will merge with and into Praxair, Inc., with Praxair, Inc. surviving the merger (the “Merger”, and together with the Exchange Offer, the “Business Combination”). In the Merger, each share of Praxair, Inc. common stock will be converted into the right to receive one Linde plc ordinary share. Praxair Inc.’s stockholders approved the Merger at Praxair Inc.’s special meeting held on September 27, 2017, and on November 24, 2017, the tender period for the Exchange Offer expired with approximately 92% of all Linde AG shares entitled to voting rights being tendered. The parties currently expect the Business Combination to be completed in the second half of 2018. In connection with the completion of the Business Combination, Linde plc will apply to list its ordinary shares on the New York Stock Exchange and the Frankfurt Stock Exchange, and will seek inclusion in the S&P 500 and DAX 30 indices. Completion of the Business Combination remains subject to approval by requisite governmental regulators and authorities under applicable competition laws. The Business Combination Agreement, or certain covenants contained therein, may be terminated for, or may terminate as a result of, certain reasons, including, among others, (a) the mutual consent of Praxair, Inc. and Linde AG to termination, (b) a permanent injunction or order by any governmental entity in Ireland, the United Kingdom, Germany or the United States that prohibits or makes illegal the completion of the Business Combination, (c) the occurrence of a change, event, occurrence or effect that has had or is reasonably expected to have a “material adverse change” (as defined in the Business Combination Agreement) on Linde AG or Praxair, Inc. or (d) the failure to obtain approval by requisite governmental regulators and authorities described in the preceding paragraph. For additional information related to the Business Combination Agreement, please refer to the proxy statement/prospectus filed by Praxair, Inc. on Schedule 14A with the SEC on August 16, 2017. Subsequent Event On July 5, 2018, Praxair, Inc. agreed to sell the majority of its businesses in Europe to Taiyo Nippon Sanso Corporation (“Taiyo”) pursuant to a Sale and Purchase Agreement, dated July 5, 2018, by and among Praxair Inc., Taiyo and Linde plc (the “SPA”). The SPA was entered into in connection with the antitrust regulatory review by the European Commission of the transactions contemplated by the Business Combination Agreement. The purchase price for the European businesses pursuant to the SPA is 5.0 billion euros in cash consideration and is subject to customary adjustments at closing. The completion of the transactions contemplated by the SPA is conditioned upon, and subject to, (i) the successful completion of the Business Combination, (ii) Praxair, Inc. having received confirmation from the European Commission in writing that the European Commission (x) approves Taiyo as a suitable purchaser of the European businesses or does not object to the identity of Taiyo and (y) approves the sale of the European businesses pursuant to the SPA as an adequate remedy to concerns that the Business Combination could impede competition in the European Economic Area, and (iii) the transactions contemplated by the SPA having received competition approvals or expiry of the statutory waiting periods in the European Union and Brazil. |
Summary of Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||
Accounting Standards Implemented in 2017 | Accounting Standards Implemented in 2018
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Accounting Standards to be Implemented | Accounting Standards to be Implemented
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Supplemental Information (Tables) |
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Schedule Of Inventories Table | The following is a summary of Praxair’s consolidated inventories:
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Debt (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term And Short-term Debt Table | The following is a summary of Praxair’s outstanding debt at June 30, 2018 and December 31, 2017:
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Financial Instruments (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [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 June 30, 2018 and December 31, 2017 for consolidated subsidiaries:
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Schedule Of Treasury Rate Lock Contracts Table Text Block | The following table summarizes the unrecognized gains (losses) related to terminated treasury rate lock contracts:
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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:
* 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. |
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Schedule of Derivative Instruments Designated As Hedging Instruments Table | The following table summarizes the impacts of the company's derivatives designated as hedging instruments that impact AOCI: Derivatives Designated as Hedging Instruments **
**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 2018 or 2017. 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 less than $1 million are expected to be reclassified to earnings during the next twelve months. |
Fair Value Disclosures (Tables) |
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Fair Value Disclosures [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:
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Earnings Per Share - Praxair, Inc. Shareholders (Tables) |
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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:
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Goodwill and Other Intangible Assets (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill Table | Changes in the carrying amount of goodwill for the six months ended June 30, 2018 were as follows:
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Schedule of Other Intangible Assets Table | Changes in the carrying amounts of other intangibles for the six months ended June 30, 2018 were as follows:
* Other primarily relates to the write-off of fully amortized assets. |
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Schedule of Estimated Future Amortization Expense Table | Total estimated annual amortization expense is as follows:
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Share-Based Compensation (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 2018 and 2017:
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Schedule of Share-based Compensation, Stock Options, Activity | The following table summarizes option activity under the plans as of June 30, 2018 and changes during the six-month period then ended (averages are calculated on a weighted basis; life in years; intrinsic value expressed in millions):
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Performance Based and Restricted Stock Activity | The following table summarizes non-vested performance-based and restricted stock award activity as of June 30, 2018 and changes during the six months then ended (shares based on target amounts, averages are calculated on a weighted basis):
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Retirement Programs (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits, Description [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 quarter and six months ended June 30, 2018 and 2017 are shown below:
(a) The curtailment gain recorded in the first quarter of 2017 resulted from the termination of an OPEB plan in South America. |
Segments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, Sales Table |
Sales and operating profit by segment for the quarters and six months ended June 30, 2018 and 2017 are shown below. 2017 segment operating profit has been reclassified to conform with current year presentation as a result of the adoption of new accounting guidance on the presentation of net periodic pension and postretirement benefit costs (see Note 1).
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Schedule Of Segment Reporting Information, Operating Profit |
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Equity and Redeemable Noncontrolling Interests (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity And Noncontrolling Interests Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stockholders Equity | A summary of the changes in total equity for the quarters and six months ended June 30, 2018 and 2017 is provided below:
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Schedule of Accumulated Other Comprehensive Income (Loss) | The components of AOCI are as follows:
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Redeemable Noncontrolling Interest | Following is a summary of the changes in redeemable noncontrolling interests for the six months ended June 30, 2018 and 2017:
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Revenue Recognition (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Revenue by Distribution Method, by Reportable Segments [Table Text Block] | The following table shows sales by distribution method for each reportable segment and at the consolidated level for the quarter and six months ended June 30, 2018.
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Transaction Costs and Other Charges (Details) - Transaction Costs [Member] - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
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Unusual or Infrequent Item, or Both [Line Items] | ||||
Transaction Costs | $ 24 | $ 15 | $ 43 | $ 21 |
Income (Loss) from Continuing Operations, Net of Tax, Attributable to Parent | $ 21 | $ 39 | ||
Income (Loss) from Continuing Operations, Per Diluted Share | $ (0.07) | $ (0.05) | $ (0.13) | $ (0.07) |
Supplemental Information (Details) - USD ($) $ in Millions |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Prepaid Expense and Other Assets, Noncurrent [Abstract] | ||
Long-term receivables, net | $ 32 | $ 54 |
Long-term receivables reserve | 46 | 51 |
Inventory, Finished Goods and Work in Process, Gross [Abstract] | ||
Raw materials and supplies | 222 | 224 |
Work in process | 54 | 57 |
Finished goods | 330 | 333 |
Total inventories | $ 606 | $ 614 |
Financial Instruments (Details) € in Millions, $ in Millions |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2017
USD ($)
Rate
|
Jun. 30, 2018
USD ($)
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Jun. 30, 2017
USD ($)
|
Jun. 30, 2018
USD ($)
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Jun. 30, 2017
USD ($)
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Dec. 31, 2017
USD ($)
Rate
|
Dec. 31, 2012
USD ($)
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Dec. 31, 2011
USD ($)
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Dec. 31, 2009
USD ($)
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Jun. 30, 2018
EUR (€)
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Jun. 30, 2018
USD ($)
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Jul. 31, 2012
USD ($)
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Aug. 31, 2011
USD ($)
|
Dec. 31, 2008
USD ($)
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Derivative [Line Items] | |||||||||||||||||||||||||||
Notional Amount of Derivatives | $ 3,210 | $ 3,210 | $ 2,743 | ||||||||||||||||||||||||
Derivatives Assets | 17 | 17 | 6 | ||||||||||||||||||||||||
Derivative Liabilities | $ 18 | $ 18 | 26 | ||||||||||||||||||||||||
Amount of Gain (Loss) Recognized in AOCI, Before Tax | $ 0 | $ 1 | |||||||||||||||||||||||||
Amount of Gain (Loss) Reclassified from AOCI to the Consolidated Statement of Income, Before Tax | 0 | 0 | |||||||||||||||||||||||||
Derivative Instruments, Tax Impact of Net Change in AOCI | 0 | 1 | |||||||||||||||||||||||||
Net gains (losses) to be recognized over next 12 months (approximately $1 million) | (1) | ||||||||||||||||||||||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 35.00% | ||||||||||||||||||||||||||
Federal Statutory Tax Rate following enactment of Tax Act, Percent | 21.00% | ||||||||||||||||||||||||||
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] | (69) | 31 | $ (31) | $ 111 | ||||||||||||||||||||||
Not Designated as Hedging Instrument [Member] | Foreign Exchange Contract [Member] | |||||||||||||||||||||||||||
Derivative [Line Items] | |||||||||||||||||||||||||||
Notional Amount of Derivatives | [3] | $ 2,693 | $ 2,693 | 2,266 | |||||||||||||||||||||||
Derivatives Assets | [3] | 16 | 16 | 6 | |||||||||||||||||||||||
Derivative Liabilities | [3] | 16 | 16 | 25 | |||||||||||||||||||||||
Not Designated as Hedging Instrument [Member] | Debt-Related [Member] | |||||||||||||||||||||||||||
Derivative [Line Items] | |||||||||||||||||||||||||||
Amount of Pre-Tax Gain (Loss) Recognized in Earnings | [2] | (68) | 30 | (32) | 109 | ||||||||||||||||||||||
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) | 1 | 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) | (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) | (1) | |||||||||||||||||||||||
Cash Flow Hedging [Member] | Jul 2012 Treasury Lock [Member] | |||||||||||||||||||||||||||
Derivative [Line Items] | |||||||||||||||||||||||||||
Deferred Gain (Loss) on Hedge, Gross | [4] | (1) | (1) | (1) | |||||||||||||||||||||||
Cash Flow Hedging [Member] | Aug 2011Treasury Lock [Member] | |||||||||||||||||||||||||||
Derivative [Line Items] | |||||||||||||||||||||||||||
Deferred Gain (Loss) on Hedge, Gross | [4] | (4) | (4) | (3) | |||||||||||||||||||||||
Cash Flow Hedging [Member] | December 2008 Treasury Lock [Member] | |||||||||||||||||||||||||||
Derivative [Line Items] | |||||||||||||||||||||||||||
Deferred Gain (Loss) on Hedge, Gross | [4] | 3 | 3 | 2 | |||||||||||||||||||||||
Net Investment Hedging [Member] | |||||||||||||||||||||||||||
Derivative [Line Items] | |||||||||||||||||||||||||||
Euro-denominated notes notional value | € 1,650 | 1,920 | |||||||||||||||||||||||||
Euro-denominated notes designated as hedging instrument | € 1,570 | 1,830 | |||||||||||||||||||||||||
Derivatives used in Net Investment Hedge, Increase (Decrease), Gross of Tax | 51 | ||||||||||||||||||||||||||
Derivatives used in Net Investment Hedge Increase (Decrease) since inception, Gross of Tax | 148 | ||||||||||||||||||||||||||
Derivatives Designated as Hedging Instruments - Fair Value | Interest Rate Swap | |||||||||||||||||||||||||||
Derivative [Line Items] | |||||||||||||||||||||||||||
Debt instrument, face value | 475 | ||||||||||||||||||||||||||
Notional Amount of Derivatives | [3] | 475 | 475 | 475 | |||||||||||||||||||||||
Derivative Liabilities | [3] | $ 1 | |||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 1.25% | 1.25% | |||||||||||||||||||||||||
Designated as Hedging Instrument | |||||||||||||||||||||||||||
Derivative [Line Items] | |||||||||||||||||||||||||||
Notional Amount of Derivatives | 517 | 517 | $ 477 | ||||||||||||||||||||||||
Derivatives Assets | 1 | 1 | 0 | ||||||||||||||||||||||||
Derivative Liabilities | 2 | 2 | 1 | ||||||||||||||||||||||||
Amount of Gain (Loss) Recognized in AOCI, Before Tax | [5] | 1 | |||||||||||||||||||||||||
Amount of Gain (Loss) Recognized in AOCI, Net of Taxes | [5] | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
Amount of Gain (Loss) Reclassified from AOCI to the Consolidated Statement of Income, Before Tax | [5] | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
Derivative Instruments, Tax Impact of Net Change in AOCI | [5] | (1) | |||||||||||||||||||||||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Tax | [5] | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
Other Comprehensive Income (Loss), Reclassification Adjustment on Derivatives Included in Net Income, Net of Tax | [5] | $ 0 | 0 | $ 0 | 0 | ||||||||||||||||||||||
Designated as Hedging Instrument | Balance Sheet Items [Member] | |||||||||||||||||||||||||||
Derivative [Line Items] | |||||||||||||||||||||||||||
Amount of Gain (Loss) Recognized in AOCI, Before Tax | [5] | (1) | |||||||||||||||||||||||||
Designated as Hedging Instrument | Foreign Exchange Contract [Member] | |||||||||||||||||||||||||||
Derivative [Line Items] | |||||||||||||||||||||||||||
Notional Amount of Derivatives | [3] | 38 | 38 | 0 | |||||||||||||||||||||||
Derivative Liabilities | [3] | 2 | 2 | ||||||||||||||||||||||||
Designated as Hedging Instrument | Forecasted Purchases | |||||||||||||||||||||||||||
Derivative [Line Items] | |||||||||||||||||||||||||||
Notional Amount of Derivatives | [3] | 4 | 4 | 2 | |||||||||||||||||||||||
Derivatives Assets | [3] | 1 | 1 | ||||||||||||||||||||||||
Amount of Gain (Loss) Recognized in AOCI, Before Tax | [5] | $ 1 | $ 1 | ||||||||||||||||||||||||
Euro Denominated Long-term 1.50% Notes Due 2020 | |||||||||||||||||||||||||||
Derivative [Line Items] | |||||||||||||||||||||||||||
Senior Notes | [6] | $ 717 | $ 717 | $ 699 | |||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 1.50% | 1.50% | 1.50% | 1.50% | |||||||||||||||||||||||
Euro Denominated Long-term 1.625% Notes Due 2025 [Member] [Member] | |||||||||||||||||||||||||||
Derivative [Line Items] | |||||||||||||||||||||||||||
Senior Notes | [6] | $ 594 | $ 594 | $ 578 | |||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 1.625% | 1.625% | 1.625% | 1.625% | |||||||||||||||||||||||
Euro Denominated 1.20% Due 2024 [Member] | |||||||||||||||||||||||||||
Derivative [Line Items] | |||||||||||||||||||||||||||
Senior Notes | [6] | $ 658 | $ 658 | $ 640 | |||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 1.20% | 1.20% | 1.20% | 1.20% | |||||||||||||||||||||||
|
Fair Value Disclosures (Details) - USD ($) $ in Millions |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Assets and Liabilities Measured on a Recurring Basis | ||
Derivative assets | $ 6 | $ 17 |
Derivative liabilities | 26 | 18 |
Fair Value Additional Information [Abstract] | ||
Carrying value of long-term debt including current portion | 8,208 | 8,762 |
Level 2 Member | ||
Fair Value Additional Information [Abstract] | ||
Fair value of long-term debt | 8,216 | 8,969 |
Level 2 Member | Fair Value, Measurements, Recurring | ||
Assets and Liabilities Measured on a Recurring Basis | ||
Derivative assets | 6 | 17 |
Derivative liabilities | $ 26 | $ 18 |
Earnings Per Share - Praxair, Inc. Shareholders (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Net Income (Loss) Attributable to Parent [Abstract] | ||||
Net income – Praxair, Inc. | $ 942 | $ 795 | ||
Denominator (Details) [Abstract] | ||||
Weighted average shares outstanding | 287,467,000 | 285,719,000 | 287,321,000 | 285,429,000 |
Shares earned and issuable under compensation plans | 336,000 | 371,000 | 333,000 | 370,000 |
Weighted average shares used in basic earnings per share | 287,803,000 | 286,090,000 | 287,654,000 | 285,799,000 |
Stock options and awards | 3,105,000 | 2,445,000 | 3,272,000 | 2,268,000 |
Weighted average shares used in diluted earnings per share | 290,908,000 | 288,535,000 | 290,926,000 | 288,067,000 |
Basic Earnings Per Common Share | $ 1.67 | $ 1.42 | $ 3.27 | $ 2.78 |
Diluted earnings per share (usd per share) | $ 1.65 | $ 1.41 | $ 3.24 | $ 2.76 |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Antidilutive excluded from the computation of Earnings Per Share | 2,508,472 | 2,509,162 |
Goodwill and Other Intangible Assets - Goodwill (Details) $ in Millions |
6 Months Ended |
---|---|
Jun. 30, 2018
USD ($)
| |
Goodwill [Roll Forward] | |
Goodwill, Beginning Balance | $ 3,233 |
Goodwill, Acquired During Period | 0 |
Purchase adjustments & other | 12 |
Foreign currency translation | (45) |
Goodwill, Ending Balance | 3,200 |
North America Segment | |
Goodwill [Roll Forward] | |
Goodwill, Beginning Balance | 2,202 |
Goodwill, Acquired During Period | 0 |
Purchase adjustments & other | 12 |
Foreign currency translation | (7) |
Goodwill, Ending Balance | 2,207 |
South America Segment | |
Goodwill [Roll Forward] | |
Goodwill, Beginning Balance | 129 |
Goodwill, Acquired During Period | 0 |
Foreign currency translation | (22) |
Goodwill, Ending Balance | 107 |
Europe Segment | |
Goodwill [Roll Forward] | |
Goodwill, Beginning Balance | 698 |
Goodwill, Acquired During Period | 0 |
Foreign currency translation | (12) |
Goodwill, Ending Balance | 686 |
Asia Segment | |
Goodwill [Roll Forward] | |
Goodwill, Beginning Balance | 61 |
Goodwill, Acquired During Period | 0 |
Foreign currency translation | (1) |
Goodwill, Ending Balance | 60 |
Surface Technologies Segment | |
Goodwill [Roll Forward] | |
Goodwill, Beginning Balance | 143 |
Goodwill, Acquired During Period | 0 |
Foreign currency translation | (3) |
Goodwill, Ending Balance | $ 140 |
Goodwill and Other Intangible Assets - Other Intangible Assets (Details) $ in Millions |
6 Months Ended | |||
---|---|---|---|---|
Jun. 30, 2018
USD ($)
| ||||
Finite-lived Intangible Assets [Roll Forward] | ||||
Beginning Period Cost | $ 852 | |||
Additions (primarily acquisitions) | 0 | |||
Foreign currency translation | (6) | |||
Other | (25) | [1] | ||
Ending Period Cost | 821 | |||
Beginning Accumulated Amortization | (299) | |||
Amortization expense | (23) | |||
Foreign currency translation | 2 | |||
Other | 24 | [1] | ||
Ending Accumulated Amortization | (296) | |||
Net balance finite lived intangibles | $ 525 | |||
Additional Finite Lived Intangible Asset Information (Details) [Abstract] | ||||
Finite-lived intangible asset, useful life | 16 years | |||
Remaining 2018 | $ 22 | |||
2019 | 43 | |||
2020 | 41 | |||
2021 | 39 | |||
2022 | 38 | |||
Thereafter | 342 | |||
Customer & License/Use Agreements | ||||
Finite-lived Intangible Assets [Roll Forward] | ||||
Beginning Period Cost | 772 | |||
Additions (primarily acquisitions) | 0 | |||
Foreign currency translation | (6) | |||
Other | (20) | [1] | ||
Ending Period Cost | 746 | |||
Beginning Accumulated Amortization | (260) | |||
Amortization expense | (19) | |||
Foreign currency translation | 2 | |||
Other | 19 | [1] | ||
Ending Accumulated Amortization | (258) | |||
Net balance finite lived intangibles | 488 | |||
Non-compete Agreements | ||||
Finite-lived Intangible Assets [Roll Forward] | ||||
Beginning Period Cost | 28 | |||
Additions (primarily acquisitions) | 0 | |||
Other | (5) | [1] | ||
Ending Period Cost | 23 | |||
Beginning Accumulated Amortization | (18) | |||
Amortization expense | (2) | |||
Other | 5 | [1] | ||
Ending Accumulated Amortization | (15) | |||
Net balance finite lived intangibles | 8 | |||
Patents & Other | ||||
Finite-lived Intangible Assets [Roll Forward] | ||||
Beginning Period Cost | 52 | |||
Additions (primarily acquisitions) | 0 | |||
Ending Period Cost | 52 | |||
Beginning Accumulated Amortization | (21) | |||
Amortization expense | (2) | |||
Ending Accumulated Amortization | (23) | |||
Net balance finite lived intangibles | $ 29 | |||
|
Share-Based Compensation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Closing Share Price | $ 158.15 | $ 158.15 | ||
Additional Company Information [Abstract] | ||||
Share-based Compensation Expense | $ 17 | $ 16 | $ 21 | $ 28 |
Share-based Compensation Expense, Net of Tax | 12 | 1 | 2 | 5 |
Excess Tax Benefits | 2 | 10 | $ 15 | $ 14 |
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 4 months | |||
Unrecognized compensation expense | $ 33 | $ 33 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||||
Dividend yield | 2.10% | 2.70% | ||
Volatility | 14.40% | 14.00% | ||
Risk-free interest rate | 2.67% | 2.13% | ||
Expected term years | 5 years | 6 years | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||||
Stock Options Outstanding at January 1, 2018 | 10,787 | |||
Stock Options Granted | 1,625 | |||
Stock Options Exercised | (1,136) | |||
Stock Options Cancelled or Expired | (35) | |||
Stock Options Outstanding at March 31, 2018 | 11,241 | 11,241 | ||
Stock Options Exercisable at March 31, 2018 | 7,521 | 7,521 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||||
Outstanding at January 1, 2018 - average exercise price | $ 108.70 | |||
Granted - average exercise price | 154.00 | |||
Exercised - average exercise price | 92.29 | |||
Cancelled or Expired - average exercise price | 126.27 | |||
Outstanding at March 31, 2018 - average exercise price | $ 116.86 | 116.86 | ||
Exercisable at March 31, 2018 - average exercise price | $ 110.02 | $ 110.02 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | 5 years 2 months | |||
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures [Abstract] | ||||
Weighted-average fair values of options granted | $ 19.29 | $ 12.40 | ||
Total intrinsic value of stock options exercised | $ 14 | 45 | $ 77 | $ 63 |
Cash received from option exercises | 12 | 44 | 38 | 63 |
Total cash tax benefit | 5 | $ 18 | $ 19 | $ 26 |
Total compensation cost not yet recognized, period for recognition | 1 year | |||
Aggregate Intrinsic Value [Abstract] | ||||
Outstanding at March 31, 2018 - intrinsic value | 464 | $ 464 | ||
Exercisable at March 31, 2018 - intrinsic value | $ 362 | $ 362 |
Share-Based Compensation (PSU and RSU) (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Mar. 31, 2018 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
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 | 6,000 | 6,000 | ||
Unrecognized compensation expense | $ 11 | $ 11 | ||
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, 2018 | 665,000 | 665,000 | ||
Granted | 0 | |||
Vested | (78,000) | |||
Cancelled | (150,000) | |||
Non-vested at March 31, 2018 | 437,000 | 437,000 | ||
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, 2018, grant date fair value | $ 113.40 | $ 113.40 | ||
Granted - average grant date fair value | 0.00 | |||
Vested - average grant date fair value | 119.98 | |||
Cancelled - average grant date fair value | 110.12 | |||
Non-vested at March 31, 2018, grant date fair value | $ 110.02 | $ 110.02 | ||
Restricted Stock | ||||
Additional Company Information [Abstract] | ||||
Cash-based Liability awards | 3,000 | 3,000 | ||
Unrecognized compensation expense | $ 36 | $ 36 | ||
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, 2018 | 264,000 | 264,000 | ||
Granted | 269,433 | |||
Vested | (89,000) | |||
Cancelled | (14,000) | |||
Non-vested at March 31, 2018 | 430,000 | 430,000 | ||
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, 2018, grant date fair value | $ 107.56 | $ 107.56 | ||
Granted - average grant date fair value | 144.79 | $ 111.69 | ||
Vested - average grant date fair value | 116.29 | |||
Cancelled - average grant date fair value | 92.93 | |||
Non-vested at March 31, 2018, grant date fair value | $ 129.49 | 129.49 | ||
Performance Shares ROC | ||||
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 | |||
Performance Shares TSR | ||||
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 | |||
Maximum [Member] | PX Performance Based Awards | ||||
Additional Company Information [Abstract] | ||||
Award vesting period | 1 year 9 months | |||
Maximum [Member] | Restricted Stock | ||||
Additional Company Information [Abstract] | ||||
Award vesting period | 2 years 9 months |
Retirement Programs (Net Pension and OPEB costs) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||
Net pension and OPEB cost (benefit), excluding service cost | $ 2 | $ 2 | $ 4 | $ (13) | ||||
Pension Plans Defined Benefit Member | ||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||
Service cost | 12 | 12 | 24 | 23 | ||||
Interest cost | 25 | 25 | 51 | 51 | ||||
Expected return on plan assets | (41) | (40) | (83) | (80) | ||||
Net amortization and deferral | 18 | 17 | 36 | 34 | ||||
Net pension and OPEB cost (benefit), excluding service cost | 2 | 2 | 4 | 5 | ||||
Net periodic benefit cost | 14 | 14 | 28 | 28 | ||||
Other Postretirement Benefit Plans Defined Benefit | ||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||
Service cost | 1 | 1 | 1 | 2 | ||||
Interest cost | 1 | 1 | 2 | 2 | ||||
Net amortization and deferral | (1) | (1) | (2) | (2) | ||||
Curtailment gain (a) | 0 | [1] | 0 | (18) | [1] | |||
Net pension and OPEB cost (benefit), excluding service cost | 0 | 0 | 0 | (18) | ||||
Net periodic benefit cost | $ 1 | $ 1 | $ 1 | $ (16) | ||||
|
Retirement Programs (Contributions and Future Estimated Payments) (Details) - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Defined Benefit Plan Disclosure [Line Items] | ||
Pension contributions | $ 10 | $ 6 |
Minimum [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan, Estimated Future Employer Contributions in Current Fiscal Year | 15 | |
Maximum [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan, Estimated Future Employer Contributions in Current Fiscal Year | $ 20 |
Commitments and Contingencies (Lawsuits and Goverment Investigations) (Details) - 6 months ended Jun. 30, 2018 $ in Millions, R$ in Billions |
USD ($) |
BRL (R$) |
---|---|---|
Gain And Loss Contingencies [Abstract] | ||
Brazil tax matters estimated exposure | $ 210 | |
Initial CADE civil fine imposed | 570 | R$ 2.2 |
Revised CADE civil fine | $ 440 | R$ 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% |
Segments (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||||
---|---|---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
||||
Segment Reporting Information [Line Items] | |||||||
Sales | [1] | $ 3,061 | $ 2,834 | $ 6,060 | $ 5,562 | ||
Operating profit (loss) | 689 | 606 | 1,342 | 1,173 | |||
Transaction costs and other charges (Note 2) | (24) | (15) | (43) | (21) | |||
North America Segment | |||||||
Segment Reporting Information [Line Items] | |||||||
Sales | [1] | 1,594 | 1,505 | 3,157 | 2,963 | ||
Operating profit (loss) | 432 | 378 | 838 | 735 | |||
Europe Segment | |||||||
Segment Reporting Information [Line Items] | |||||||
Sales | [1] | 444 | 383 | 872 | 739 | ||
Operating profit (loss) | 87 | 74 | 167 | 141 | |||
South America Segment | |||||||
Segment Reporting Information [Line Items] | |||||||
Sales | [1] | 349 | 373 | 714 | 742 | ||
Operating profit (loss) | 56 | 64 | 110 | 112 | |||
Asia Segment | |||||||
Segment Reporting Information [Line Items] | |||||||
Sales | [1] | 502 | 422 | 978 | 817 | ||
Operating profit (loss) | 107 | 80 | 211 | 155 | |||
Surface Technologies Segment | |||||||
Segment Reporting Information [Line Items] | |||||||
Sales | [1] | 172 | 151 | 339 | 301 | ||
Operating profit (loss) | 31 | 25 | 59 | 51 | |||
Total Segments | |||||||
Segment Reporting Information [Line Items] | |||||||
Operating profit (loss) | 713 | 621 | 1,385 | 1,194 | |||
Transaction costs and other charges (Note 2) | $ (24) | $ (15) | $ (43) | $ (21) | |||
|
Equity and Redeemable Noncontrolling Interests Equity (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Dec. 31, 2017 |
Mar. 31, 2018 |
Mar. 31, 2017 |
Dec. 31, 2016 |
|||||||
Common Stock, Dividends, Per Share, Cash Paid | $ 0.8250 | $ 0.7875 | $ 1.650 | $ 1.575 | ||||||||||
Funded Status Obligations, Taxes | $ (341) | $ (347) | ||||||||||||
Net Income (Loss) Attributable to Redeemable Noncontrolling Interest | 2 | $ 1 | ||||||||||||
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax | $ (3,973) | (3,973) | (3,455) | |||||||||||
Derivatives - net of taxes | (1) | (1) | (1) | |||||||||||
Accumulated Other Comprehensive (Income) Loss, Defined Benefit Plan, after Tax | 622 | 622 | 642 | |||||||||||
Accumulated other comprehensive income (loss) | (4,596) | (4,596) | (4,098) | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Total Praxair, Inc. Shareholders’ Equity | 6,027 | 6,027 | 6,018 | |||||||||||
Noncontrolling interests | 501 | 501 | 493 | |||||||||||
Total Equity | 6,528 | 6,528 | 6,511 | |||||||||||
Other comprehensive income (loss) | (637) | $ 54 | (508) | 374 | ||||||||||
Redemption value adjustments | (2) | |||||||||||||
Praxair, Inc. Shareholders' Equity | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Total Praxair, Inc. Shareholders’ Equity | 6,027 | 5,807 | 6,027 | 5,807 | $ 6,368 | $ 5,529 | $ 5,021 | |||||||
Net income | 480 | 406 | [1] | 942 | [1] | 795 | [1] | |||||||
Other comprehensive income (loss) | (616) | 41 | (498) | 356 | ||||||||||
Dividends to Praxair, Inc. common stock holders | (237) | (225) | (474) | (450) | ||||||||||
For the dividend reinvestment and stock purchase plan | 1 | 1 | 3 | 3 | ||||||||||
Redemption value adjustments | (2) | |||||||||||||
For employee savings and incentive plans | 15 | 39 | 18 | 54 | ||||||||||
Purchases of common stock | (1) | (1) | ||||||||||||
Share-based compensation | 17 | 16 | 21 | 28 | ||||||||||
Noncontrolling Interests | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Noncontrolling interests | 501 | 453 | 501 | 453 | 493 | 516 | 436 | 420 | ||||||
Net income | [1] | 18 | 13 | 27 | 28 | |||||||||
Other comprehensive income (loss) | (21) | 13 | (10) | 18 | ||||||||||
Dividends and Other Capital Changes to Noncontrolling Interests | (13) | (16) | (16) | (20) | ||||||||||
Additions (reductions) to noncontrolling interests | 1 | 7 | 7 | 7 | ||||||||||
Total Equity | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Total Equity | 6,528 | 6,260 | 6,528 | 6,260 | $ 6,884 | $ 5,965 | $ 5,441 | |||||||
Net income | [1] | 498 | 419 | 969 | 823 | |||||||||
Other comprehensive income (loss) | (637) | 54 | (508) | 374 | ||||||||||
Dividends and Other Capital Changes to Noncontrolling Interests | (13) | (16) | (16) | (20) | ||||||||||
Dividends to Praxair, Inc. common stock holders | (237) | (225) | (474) | (450) | ||||||||||
Additions (reductions) to noncontrolling interests | 1 | 7 | 7 | 7 | ||||||||||
For the dividend reinvestment and stock purchase plan | 1 | 1 | 3 | 3 | ||||||||||
Redemption value adjustments | (2) | |||||||||||||
For employee savings and incentive plans | 15 | 39 | 18 | 54 | ||||||||||
Purchases of common stock | (1) | 0 | (1) | |||||||||||
Share-based compensation | 17 | $ 16 | 21 | $ 28 | ||||||||||
North America Segment | ||||||||||||||
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax | (940) | (940) | (885) | |||||||||||
South America Segment | ||||||||||||||
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax | (2,319) | (2,319) | (2,004) | |||||||||||
Europe Segment | ||||||||||||||
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax | (433) | (433) | (398) | |||||||||||
Asia Segment | ||||||||||||||
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax | (254) | (254) | (151) | |||||||||||
Surface Technologies Segment | ||||||||||||||
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax | $ (27) | $ (27) | $ (17) | |||||||||||
|
Equity and Redeemable Noncontrolling Interests (Details) - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Increase (Decrease) in Temporary Equity [Roll Forward] | ||
Balance, January 1 | $ 11 | $ 11 |
Net income | 2 | 1 |
Distributions to noncontrolling interest and other | (1) | (2) |
Redemption value adjustments/accretion | 2 | |
Balance, March 31 | $ 14 | $ 10 |
Revenue Recognition (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||||
---|---|---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
||||
Schedule of Revenue by Distribution Method, by Reportable Segment [Line Items] | |||||||
Percentage of Total Sales, All Segments excluding Surface Technologies | 94.00% | ||||||
Percentage of Total Sales, Surface Technologies Segment | 6.00% | ||||||
Estimated Consideration related to Unsatisfied Performance Obligations | $ 17,000 | $ 17,000 | |||||
Sales | [1] | $ 3,061 | $ 2,834 | $ 6,060 | $ 5,562 | ||
Percentage of Total Sales, Distribution Method | 100.00% | 100.00% | |||||
Merchant [Member] | |||||||
Schedule of Revenue by Distribution Method, by Reportable Segment [Line Items] | |||||||
Sales | $ 1,038 | $ 2,049 | |||||
Percentage of Total Sales, Distribution Method | 33.91049% | 33.81188% | |||||
On-Site [Member] | |||||||
Schedule of Revenue by Distribution Method, by Reportable Segment [Line Items] | |||||||
Sales | $ 902 | $ 1,802 | |||||
Percentage of Total Sales, Distribution Method | 29.46749% | 29.73597% | |||||
Packaged Gas [Member] | |||||||
Schedule of Revenue by Distribution Method, by Reportable Segment [Line Items] | |||||||
Sales | $ 857 | $ 1,683 | |||||
Percentage of Total Sales, Distribution Method | 27.99739% | 27.77228% | |||||
Other Distribution Methods [Member] | |||||||
Schedule of Revenue by Distribution Method, by Reportable Segment [Line Items] | |||||||
Sales | $ 264 | $ 526 | |||||
Percentage of Total Sales, Distribution Method | 8.62463% | 7.67987% | |||||
North America Segment | |||||||
Schedule of Revenue by Distribution Method, by Reportable Segment [Line Items] | |||||||
Sales | [1] | $ 1,594 | 1,505 | $ 3,157 | 2,963 | ||
North America Segment | Merchant [Member] | |||||||
Schedule of Revenue by Distribution Method, by Reportable Segment [Line Items] | |||||||
Sales | 591 | 1,164 | |||||
North America Segment | On-Site [Member] | |||||||
Schedule of Revenue by Distribution Method, by Reportable Segment [Line Items] | |||||||
Sales | 458 | 918 | |||||
North America Segment | Packaged Gas [Member] | |||||||
Schedule of Revenue by Distribution Method, by Reportable Segment [Line Items] | |||||||
Sales | 508 | 1,001 | |||||
North America Segment | Other Distribution Methods [Member] | |||||||
Schedule of Revenue by Distribution Method, by Reportable Segment [Line Items] | |||||||
Sales | 37 | 74 | |||||
Europe Segment | |||||||
Schedule of Revenue by Distribution Method, by Reportable Segment [Line Items] | |||||||
Sales | [1] | 444 | 383 | 872 | 739 | ||
Europe Segment | Merchant [Member] | |||||||
Schedule of Revenue by Distribution Method, by Reportable Segment [Line Items] | |||||||
Sales | 152 | 300 | |||||
Europe Segment | On-Site [Member] | |||||||
Schedule of Revenue by Distribution Method, by Reportable Segment [Line Items] | |||||||
Sales | 77 | 157 | |||||
Europe Segment | Packaged Gas [Member] | |||||||
Schedule of Revenue by Distribution Method, by Reportable Segment [Line Items] | |||||||
Sales | 199 | 380 | |||||
Europe Segment | Other Distribution Methods [Member] | |||||||
Schedule of Revenue by Distribution Method, by Reportable Segment [Line Items] | |||||||
Sales | 16 | 35 | |||||
South America Segment | |||||||
Schedule of Revenue by Distribution Method, by Reportable Segment [Line Items] | |||||||
Sales | [1] | 349 | 373 | 714 | 742 | ||
South America Segment | Merchant [Member] | |||||||
Schedule of Revenue by Distribution Method, by Reportable Segment [Line Items] | |||||||
Sales | 131 | 274 | |||||
South America Segment | On-Site [Member] | |||||||
Schedule of Revenue by Distribution Method, by Reportable Segment [Line Items] | |||||||
Sales | 117 | 231 | |||||
South America Segment | Packaged Gas [Member] | |||||||
Schedule of Revenue by Distribution Method, by Reportable Segment [Line Items] | |||||||
Sales | 93 | 191 | |||||
South America Segment | Other Distribution Methods [Member] | |||||||
Schedule of Revenue by Distribution Method, by Reportable Segment [Line Items] | |||||||
Sales | 8 | 18 | |||||
Asia Segment | |||||||
Schedule of Revenue by Distribution Method, by Reportable Segment [Line Items] | |||||||
Sales | [1] | 502 | 422 | 978 | 817 | ||
Asia Segment | Merchant [Member] | |||||||
Schedule of Revenue by Distribution Method, by Reportable Segment [Line Items] | |||||||
Sales | 164 | 311 | |||||
Asia Segment | On-Site [Member] | |||||||
Schedule of Revenue by Distribution Method, by Reportable Segment [Line Items] | |||||||
Sales | 250 | 496 | |||||
Asia Segment | Packaged Gas [Member] | |||||||
Schedule of Revenue by Distribution Method, by Reportable Segment [Line Items] | |||||||
Sales | 57 | 111 | |||||
Asia Segment | Other Distribution Methods [Member] | |||||||
Schedule of Revenue by Distribution Method, by Reportable Segment [Line Items] | |||||||
Sales | 31 | 60 | |||||
Surface Technologies Segment | |||||||
Schedule of Revenue by Distribution Method, by Reportable Segment [Line Items] | |||||||
Sales | [1] | 172 | $ 151 | 339 | $ 301 | ||
Surface Technologies Segment | Other Distribution Methods [Member] | |||||||
Schedule of Revenue by Distribution Method, by Reportable Segment [Line Items] | |||||||
Sales | $ 172 | $ 339 | |||||
|
Income Tax Disclosure (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2017 |
|
Income Tax Disclosure [Abstract] | ||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 35.00% | |
Federal Statutory Tax Rate following enactment of Tax Act, Percent | 21.00% | |
Net Provisional Income Tax Charge, enactment of Tax Act | $ 394 | |
Estimated Charge on Deemed Repatriation of Accumulated Foreign Earnings, enactment of Tax Act | 467 | |
Estimated Foreign Withholding Taxes on Anticipated Repatriation, enactment of Tax Act | 260 | |
Estimated Federal Tax Benefit, Deferred Tax Revaluation, enactment of Tax Act | $ (333) |
Proposed Business Combination with Linde AG (Details) - shares |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2017 |
Dec. 31, 2017 |
|
Proposed Business Combination with Linde AG [Abstract] | ||
Number of ordinary shares issued, per share | 1.540 | |
Percentage of voting rights tendered | 92.00% |
Label | Element | Value |
---|---|---|
Income (Loss) Attributable to Noncontrolling Interest, before Tax | us-gaap_IncomeLossAttributableToNoncontrollingInterest | $ (29,000,000) |
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