Exhibit 99.1
Praxair Reports Third-Quarter 2018 Results
Financial Highlights
• | Sales $3.0 billion, up 3% above prior-year quarter, includes-4% FX headwind |
• | Operating profit $0.7 billion, 6% above prior-year quarter, adjusted operating profit 8% higher |
• | EPS $1.58, up 9% versus prior-year quarter, adjusted EPS $1.69, 13% above prior-year quarter |
• | Strong operating cash flow of $0.9 billion, 29% of sales |
• | Return on Capital 11.3%, Adjusted Return on Capital 14.1% |
• | Backlog $2.2 billion, up $0.5 billion sequentially |
- Won four new onsite projects, three in the U.S.
The third quarter earnings presentation can be found at: www.praxair.com/investor-relations.
# # #
>> About Praxair
Praxair, Inc., a wholly-owned subsidiary of Linde plc, is a leading industrial gas company in North and South America and one of the largest worldwide. With market capitalization of approximately $40 billion and 2017 sales of $11 billion, the company employs over 26,000 people globally and has been named to the Dow Jones® World Sustainability Index for 16 consecutive years. Praxair produces, sells and distributes atmospheric, process and specialty gases, and high-performance surface coatings. Our products, services and technologies aremaking our planet more productive by bringing efficiency and environmental benefits to a wide variety of industries, including aerospace, chemicals, food and beverage, electronics, energy, healthcare, manufacturing, primary metals and many others. For more information about the company, please visit our website at www.praxair.com.
This document is only controlled while on the Praxair, Inc. website and a copy of this controlled version is available for download. Praxair cannot assure the integrity or accuracy of any version of this document after it has been downloaded or removed from our website.
Page 2 of 8
PRAXAIR, INC. AND SUBSIDIARIES
SUMMARYNON-GAAP RECONCILIATIONS
(UNAUDITED)
The following adjusted amounts areNon-GAAP measures and are intended to supplement investors’ understanding of the company’s financial statements by providing measures which investors, financial analysts and management use to help evaluate the company’s operating performance. Items which the company does not believe to be indicative ofon-going business trends are excluded from these calculations so that investors can better evaluate and analyze historical and future business trends on a consistent basis. Definitions of theseNon-GAAP measures may not be comparable to similar definitions used by other companies and are not a substitute for similar GAAP measures. See theNon-GAAP reconciliations starting on page 8 for additional details relating to theNon-GAAP adjustments.
(Millions of dollars, except per share amounts)
Sales | Operating Profit | Net Income - Praxair, Inc. | Diluted EPS | |||||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 (d) | 2018 | 2017 | 2018 | 2017 | |||||||||||||||||||||||||
Quarter Ended September 30 | ||||||||||||||||||||||||||||||||
Reported GAAP Amounts | $ | 3,024 | $ | 2,922 | $ | 669 | $ | 632 | $ | 461 | $ | 419 | $ | 1.58 | $ | 1.45 | ||||||||||||||||
Transaction costs (a) | — | — | 21 | 14 | 19 | 13 | 0.07 | 0.05 | ||||||||||||||||||||||||
Argentina currency devaluation (b) | — | — | 10 | — | 10 | — | 0.03 | — | ||||||||||||||||||||||||
Pension settlement charges (c) | — | — | — | — | 3 | 1 | 0.01 | — | ||||||||||||||||||||||||
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Total adjustments | — | — | 31 | 14 | 32 | 14 | 0.11 | 0.05 | ||||||||||||||||||||||||
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Adjusted amounts | $ | 3,024 | $ | 2,922 | $ | 700 | $ | 646 | $ | 493 | $ | 433 | $ | 1.69 | $ | 1.50 | ||||||||||||||||
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Year To Date September 30 | ||||||||||||||||||||||||||||||||
Reported GAAP Amounts | $ | 9,084 | $ | 8,484 | $ | 2,011 | $ | 1,805 | $ | 1,403 | $ | 1,214 | $ | 4.82 | $ | 4.21 | ||||||||||||||||
Transaction costs (a) | — | — | 64 | 35 | 58 | 34 | 0.20 | 0.12 | ||||||||||||||||||||||||
Argentina currency devaluation (b) | — | — | 10 | — | 10 | — | 0.03 | — | ||||||||||||||||||||||||
Pension settlement charges (c) | — | — | — | — | 3 | 1 | 0.01 | — | ||||||||||||||||||||||||
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Total adjustments | — | — | 74 | 35 | 71 | 35 | 0.24 | 0.12 | ||||||||||||||||||||||||
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Adjusted amounts | $ | 9,084 | $ | 8,484 | $ | 2,085 | $ | 1,840 | $ | 1,474 | $ | 1,249 | $ | 5.06 | $ | 4.33 | ||||||||||||||||
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(a) | Charges primarily for transaction costs related to the Linde merger which closed on October 31, 2018. |
(b) | Effective July 1, 2018, Argentina was deemed a highly inflationary economy. As a result, the third quarter of 2018 includesafter-tax charges of $10 million ($0.03 per diluted share) associated with the transition to hyper-inflationary accounting for Argentina. |
(c) | Pension settlement charges were recorded in the third quarter of 2018 related to lump sum benefit payments made from the U.S. supplemental pension plan and in the third quarter of 2017 related to lump sum benefit payments made from an international pension plan. |
(d) | During the first quarter 2018, Praxair adopted accounting guidance on the presentation of net periodic pension and postretirement benefit costs which requiresnon-service related costs be presented outside of operating profit. As a result,non-service related pension and postretirement benefit costs are now presented in the consolidated statements of income in “Net pension and OPEB cost (benefit), excluding service cost.” Prior period information, including segment operating profit, has been reclassified to conform with current year presentation. The adoption of this guidance did not impact “Net Income - Praxair, Inc.” |
Page 3 of 8
PRAXAIR, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Millions of dollars, except per share data)
(UNAUDITED)
Quarter Ended September 30, | Year to Date September 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
SALES | $ | 3,024 | $ | 2,922 | $ | 9,084 | $ | 8,484 | ||||||||
Cost of sales | 1,714 | 1,652 | 5,114 | 4,800 | ||||||||||||
Selling, general and administrative | 294 | 300 | 911 | 895 | ||||||||||||
Depreciation and amortization | 306 | 298 | 928 | 877 | ||||||||||||
Research and development | 23 | 23 | 71 | 69 | ||||||||||||
Transaction costs and other charges | 31 | 14 | 74 | 35 | ||||||||||||
Other income (expense) - net | 13 | (3 | ) | 25 | (3 | ) | ||||||||||
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OPERATING PROFIT | 669 | 632 | 2,011 | 1,805 | ||||||||||||
Interest expense - net | 40 | 41 | 130 | 120 | ||||||||||||
Net pension and OPEB cost (benefit), excluding service cost | 6 | 6 | 10 | (7 | ) | |||||||||||
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INCOME BEFORE INCOME TAXES AND EQUITY INVESTMENTS | 623 | 585 | 1,871 | 1,692 | ||||||||||||
Income taxes | 156 | 162 | 462 | 468 | ||||||||||||
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INCOME BEFORE EQUITY INVESTMENTS | 467 | 423 | 1,409 | 1,224 | ||||||||||||
Income from equity investments | 13 | 12 | 42 | 35 | ||||||||||||
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NET INCOME (INCLUDING NONCONTROLLING INTERESTS) | 480 | 435 | 1,451 | 1,259 | ||||||||||||
Less: noncontrolling interests | (19 | ) | (16 | ) | (48 | ) | (45 | ) | ||||||||
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NET INCOME - PRAXAIR, INC. | $ | 461 | $ | 419 | $ | 1,403 | $ | 1,214 | ||||||||
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PER SHARE DATA - PRAXAIR, INC. SHAREHOLDERS | ||||||||||||||||
Basic earnings per share | $ | 1.60 | $ | 1.46 | $ | 4.87 | $ | 4.24 | ||||||||
Diluted earnings per share | $ | 1.58 | $ | 1.45 | $ | 4.82 | $ | 4.21 | ||||||||
Cash dividends | $ | 0.825 | $ | 0.7875 | $ | 2.475 | $ | 2.36 | ||||||||
WEIGHTED AVERAGE SHARES OUTSTANDING | ||||||||||||||||
Basic shares outstanding (000’s) | 288,093 | 286,467 | 287,800 | 286,022 | ||||||||||||
Diluted shares outstanding (000’s) | 291,513 | 289,216 | 291,275 | 288,524 |
Note: See page 2 for a reconciliation to adjusted amounts which areNon-GAAP.
Page 4 of 8
PRAXAIR, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Millions of dollars)
(UNAUDITED)
September 30, 2018 | December 31, 2017 | |||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 600 | $ | 617 | ||||
Accounts receivable - net | 1,852 | 1,804 | ||||||
Inventories | 622 | 614 | ||||||
Prepaid and other current assets | 231 | 250 | ||||||
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TOTAL CURRENT ASSETS | 3,305 | 3,285 | ||||||
Property, plant and equipment - net | 11,725 | 12,057 | ||||||
Goodwill | 3,201 | 3,233 | ||||||
Other intangibles - net | 513 | 553 | ||||||
Other long-term assets | 1,235 | 1,308 | ||||||
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TOTAL ASSETS | $ | 19,979 | $ | 20,436 | ||||
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LIABILITIES AND EQUITY | ||||||||
Accounts payable | $ | 978 | $ | 972 | ||||
Short-term debt | 115 | 238 | ||||||
Current portion of long-term debt | 1,582 | 979 | ||||||
Other current liabilities | 1,185 | 1,118 | ||||||
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TOTAL CURRENT LIABILITIES | 3,860 | 3,307 | ||||||
Long-term debt | 6,615 | 7,783 | ||||||
Other long-term liabilities | 2,754 | 2,824 | ||||||
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TOTAL LIABILITIES | 13,229 | 13,914 | ||||||
REDEEMABLE NONCONTROLLING INTERESTS | 15 | 11 | ||||||
PRAXAIR, INC. SHAREHOLDERS’ EQUITY: | ||||||||
Common stock | 4 | 4 | ||||||
Additionalpaid-in capital | 4,088 | 4,084 | ||||||
Retained earnings | 13,913 | 13,224 | ||||||
Accumulated other comprehensive income (loss) | (4,656 | ) | (4,098 | ) | ||||
Less: Treasury stock, at cost | (7,117 | ) | (7,196 | ) | ||||
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Total Praxair, Inc. Shareholders’ Equity | 6,232 | 6,018 | ||||||
Noncontrolling interests | 503 | 493 | ||||||
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TOTAL EQUITY | 6,735 | 6,511 | ||||||
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TOTAL LIABILITIES AND EQUITY | $ | 19,979 | $ | 20,436 | ||||
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Page 5 of 8
PRAXAIR, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Millions of dollars)
(UNAUDITED)
Quarter Ended September 30, | Year to Date September 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
OPERATIONS | ||||||||||||||||
Net income - Praxair, Inc. | $ | 461 | $ | 419 | $ | 1,403 | $ | 1,214 | ||||||||
Noncontrolling interests | 19 | 16 | 48 | 45 | ||||||||||||
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Net income (including noncontrolling interests) | 480 | 435 | 1,451 | 1,259 | ||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||
Transaction costs and other charges, net of payments | 20 | 10 | 35 | 27 | ||||||||||||
Depreciation and amortization | 306 | 298 | 928 | 877 | ||||||||||||
Accounts Receivable | 26 | 12 | (121 | ) | (83 | ) | ||||||||||
Inventory | (19 | ) | (6 | ) | (29 | ) | (11 | ) | ||||||||
Payables and accruals | 107 | 35 | 101 | 11 | ||||||||||||
Pension contributions | (7 | ) | (8 | ) | (17 | ) | (14 | ) | ||||||||
Deferred income taxes and other | (42 | ) | 18 | 1 | 139 | |||||||||||
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Net cash provided by operating activities | 871 | 794 | 2,349 | 2,205 | ||||||||||||
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INVESTING | ||||||||||||||||
Capital expenditures | (380 | ) | (320 | ) | (1,056 | ) | (972 | ) | ||||||||
Acquisitions, net of cash acquired | (6 | ) | (16 | ) | (6 | ) | (18 | ) | ||||||||
Divestitures and asset sales | 8 | 5 | 77 | 22 | ||||||||||||
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Net cash used for investing activities | (378 | ) | (331 | ) | (985 | ) | (968 | ) | ||||||||
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FINANCING | ||||||||||||||||
Debt increase (decrease) - net | (133 | ) | (197 | ) | (625 | ) | (502 | ) | ||||||||
Issuances of common stock | 26 | 20 | 70 | 90 | ||||||||||||
Purchases of common stock | (1 | ) | — | (2 | ) | (11 | ) | |||||||||
Cash dividends - Praxair, Inc. shareholders | (238 | ) | (225 | ) | (712 | ) | (675 | ) | ||||||||
Noncontrolling interest transactions and other | (11 | ) | (1 | ) | (33 | ) | (85 | ) | ||||||||
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Net cash provided by (used for) financing activities | (357 | ) | (403 | ) | (1,302 | ) | (1,183 | ) | ||||||||
Effect of exchange rate changes on cash and cash equivalents | (15 | ) | 12 | (79 | ) | 29 | ||||||||||
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Change in cash and cash equivalents | 121 | 72 | (17 | ) | 83 | |||||||||||
Cash and cash equivalents,beginning-of-period | 479 | 535 | 617 | 524 | ||||||||||||
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Cash and cash equivalents,end-of-period | $ | 600 | $ | 607 | $ | 600 | $ | 607 | ||||||||
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Page 6 of 8
PRAXAIR, INC. AND SUBSIDIARIES
SEGMENT INFORMATION
(Millions of dollars)
(UNAUDITED)
Quarter Ended September 30, | Year to Date September 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
SALES | ||||||||||||||||
North America | $ | 1,613 | $ | 1,518 | $ | 4,770 | $ | 4,481 | ||||||||
Europe | 425 | 407 | 1,297 | 1,146 | ||||||||||||
South America | 329 | 389 | 1,043 | 1,131 | ||||||||||||
Asia | 487 | 451 | 1,465 | 1,268 | ||||||||||||
Surface Technologies | 170 | 157 | 509 | 458 | ||||||||||||
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Consolidated sales | $ | 3,024 | $ | 2,922 | $ | 9,084 | $ | 8,484 | ||||||||
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OPERATING PROFIT | ||||||||||||||||
North America | $ | 420 | $ | 386 | $ | 1,258 | $ | 1,121 | ||||||||
Europe | 81 | 79 | 248 | 220 | ||||||||||||
South America | 57 | 66 | 167 | 178 | ||||||||||||
Asia | 110 | 88 | 321 | 243 | ||||||||||||
Surface Technologies | 32 | 27 | 91 | 78 | ||||||||||||
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Segment operating profit | $ | 700 | $ | 646 | $ | 2,085 | $ | 1,840 | ||||||||
Transaction costs and other charges | (31 | ) | (14 | ) | (74 | ) | (35 | ) | ||||||||
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Total operating profit | $ | 669 | $ | 632 | $ | 2,011 | $ | 1,805 | ||||||||
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Page 7 of 8
PRAXAIR, INC. AND SUBSIDIARIES
QUARTERLY FINANCIAL SUMMARY
(Millions of dollars, except per share data)
(UNAUDITED)
2018 (b) | 2017 (c, d) | |||||||||||||||||||||||||||
Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||||
FROM THE INCOME STATEMENT | ||||||||||||||||||||||||||||
Sales | $ | 3,024 | $ | 3,061 | $ | 2,999 | $ | 2,953 | $ | 2,922 | $ | 2,834 | $ | 2,728 | ||||||||||||||
Cost of sales | 1,714 | 1,723 | 1,677 | 1,661 | 1,652 | 1,599 | 1,549 | |||||||||||||||||||||
Selling, general and administrative | 294 | 307 | 310 | 312 | 300 | 305 | 290 | |||||||||||||||||||||
Depreciation and amortization | 306 | 311 | 311 | 307 | 298 | 292 | 287 | |||||||||||||||||||||
Research and development | 23 | 24 | 24 | 24 | 23 | 23 | 23 | |||||||||||||||||||||
Transaction costs and other charges | 31 | 24 | 19 | 17 | 14 | 15 | 6 | |||||||||||||||||||||
Other income (expense) - net | 13 | 17 | (5 | ) | 7 | (3 | ) | 6 | (6 | ) | ||||||||||||||||||
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Operating profit | 669 | 689 | 653 | 639 | 632 | 606 | 567 | |||||||||||||||||||||
Interest expense - net | 40 | 44 | 46 | 41 | 41 | 38 | 41 | |||||||||||||||||||||
Net pension and OPEB cost (benefit), excluding service cost | 6 | 2 | 2 | 3 | 6 | 2 | (15 | ) | ||||||||||||||||||||
Income taxes | 156 | 158 | 148 | 558 | 162 | 157 | 149 | |||||||||||||||||||||
Income from equity investments | 13 | 14 | 15 | 12 | 12 | 11 | 12 | |||||||||||||||||||||
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Net income (including noncontrolling interests) | 480 | 499 | 472 | 49 | 435 | 420 | 404 | |||||||||||||||||||||
Less: noncontrolling interests | (19 | ) | (19 | ) | (10 | ) | (16 | ) | (16 | ) | (14 | ) | (15 | ) | ||||||||||||||
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Net income - Praxair, Inc. | $ | 461 | $ | 480 | $ | 462 | $ | 33 | $ | 419 | $ | 406 | $ | 389 | ||||||||||||||
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PER SHARE DATA - PRAXAIR, INC. SHAREHOLDERS | ||||||||||||||||||||||||||||
Diluted earnings per share | $ | 1.58 | $ | 1.65 | $ | 1.59 | $ | 0.11 | $ | 1.45 | $ | 1.41 | $ | 1.35 | ||||||||||||||
Cash dividends per share | $ | 0.8250 | $ | 0.8250 | $ | 0.8250 | $ | 0.7875 | $ | 0.7875 | $ | 0.7875 | $ | 0.7875 | ||||||||||||||
Diluted weighted average shares outstanding (000’s) | 291,513 | 290,908 | 290,809 | 290,456 | 289,216 | 288,535 | 287,384 | |||||||||||||||||||||
ADJUSTED AMOUNTS (a) | ||||||||||||||||||||||||||||
Operating profit | $ | 700 | $ | 713 | $ | 672 | $ | 656 | $ | 646 | $ | 621 | $ | 573 | ||||||||||||||
Operating margin | 23.1 | % | 23.3 | % | 22.4 | % | 22.2 | % | 22.1 | % | 21.9 | % | 21.0 | % | ||||||||||||||
Net Income | $ | 493 | $ | 501 | $ | 480 | $ | 441 | $ | 433 | $ | 421 | $ | 395 | ||||||||||||||
Diluted earnings per share | $ | 1.69 | $ | 1.72 | $ | 1.65 | $ | 1.52 | $ | 1.50 | $ | 1.46 | $ | 1.37 | ||||||||||||||
FROM THE BALANCE SHEET | ||||||||||||||||||||||||||||
Net debt (a) | $ | 7,712 | $ | 7,979 | $ | 8,297 | $ | 8,383 | $ | 8,630 | $ | 8,832 | $ | 8,849 | ||||||||||||||
Capital (a) | $ | 14,462 | $ | 14,521 | $ | 15,194 | $ | 14,905 | $ | 15,372 | $ | 15,102 | $ | 14,824 | ||||||||||||||
FROM THE STATEMENT OF CASH FLOWS | ||||||||||||||||||||||||||||
Cash flow from operations | $ | 871 | $ | 790 | $ | 688 | $ | 836 | $ | 794 | $ | 701 | $ | 710 | ||||||||||||||
Cash flow provided by (used for) investing activities | (378 | ) | (289 | ) | (318 | ) | (346 | ) | (331 | ) | (313 | ) | (324 | ) | ||||||||||||||
Cash flow provided by (used for) financing activities | (357 | ) | (516 | ) | (429 | ) | (473 | ) | (403 | ) | (384 | ) | (396 | ) | ||||||||||||||
Capital expenditures | 380 | 351 | 325 | 339 | 320 | 325 | 327 | |||||||||||||||||||||
Acquisitions | 6 | — | — | 15 | 16 | 1 | 1 | |||||||||||||||||||||
Cash dividends | 238 | 237 | 237 | 226 | 225 | 225 | 225 | |||||||||||||||||||||
OTHER INFORMATION | ||||||||||||||||||||||||||||
After-tax return on capital (ROC) (a) | 11.3 | % | 10.5 | % | 9.9 | % | 9.5 | % | 12.0 | % | 11.5 | % | 11.5 | % | ||||||||||||||
Adjustedafter-tax ROC (a) | 14.1 | % | 13.6 | % | 13.0 | % | 12.5 | % | 12.3 | % | 12.1 | % | 12.0 | % | ||||||||||||||
EBITDA (a) | $ | 988 | $ | 1,014 | $ | 979 | $ | 958 | $ | 942 | $ | 909 | $ | 866 | ||||||||||||||
EBITDA margin (a) | 32.7 | % | 33.1 | % | 32.6 | % | 32.4 | % | 32.2 | % | 32.1 | % | 31.7 | % | ||||||||||||||
Adjusted EBITDA (a) | $ | 1,019 | $ | 1,038 | $ | 998 | $ | 975 | $ | 956 | $ | 924 | $ | 872 | ||||||||||||||
Adjusted EBITDA margin (a) | 33.7 | % | 33.9 | % | 33.3 | % | 33.0 | % | 32.7 | % | 32.6 | % | 32.0 | % | ||||||||||||||
Number of employees | 26,714 | 26,658 | 26,550 | 26,461 | 26,531 | 26,487 | 26,420 | |||||||||||||||||||||
SEGMENT DATA | ||||||||||||||||||||||||||||
SALES | ||||||||||||||||||||||||||||
North America | $ | 1,613 | $ | 1,594 | $ | 1,563 | $ | 1,542 | $ | 1,518 | $ | 1,505 | $ | 1,458 | ||||||||||||||
Europe | 425 | 444 | 428 | 412 | 407 | 383 | 356 | |||||||||||||||||||||
South America | 329 | 349 | 365 | 370 | 389 | 373 | 369 | |||||||||||||||||||||
Asia | 487 | 502 | 476 | 470 | 451 | 422 | 395 | |||||||||||||||||||||
Surface Technologies | 170 | 172 | 167 | 159 | 157 | 151 | 150 | |||||||||||||||||||||
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Total sales | $ | 3,024 | $ | 3,061 | $ | 2,999 | $ | 2,953 | $ | 2,922 | $ | 2,834 | $ | 2,728 | ||||||||||||||
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OPERATING PROFIT | ||||||||||||||||||||||||||||
North America | $ | 420 | $ | 432 | $ | 406 | $ | 396 | $ | 386 | $ | 378 | $ | 357 | ||||||||||||||
Europe | 81 | 87 | 80 | 81 | 79 | 74 | 67 | |||||||||||||||||||||
South America | 57 | 56 | 54 | 61 | 66 | 64 | 48 | |||||||||||||||||||||
Asia | 110 | 107 | 104 | 90 | 88 | 80 | 75 | |||||||||||||||||||||
Surface Technologies | 32 | 31 | 28 | 28 | 27 | 25 | 26 | |||||||||||||||||||||
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Segment operating profit | 700 | 713 | 672 | 656 | 646 | 621 | 573 | |||||||||||||||||||||
Transaction costs and other charges | (31 | ) | (24 | ) | (19 | ) | (17 | ) | (14 | ) | (15 | ) | (6 | ) | ||||||||||||||
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Total operating profit | $ | 669 | $ | 689 | $ | 653 | $ | 639 | $ | 632 | $ | 606 | $ | 567 | ||||||||||||||
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(a) | Non-GAAP measure, see Appendix. |
(b) | 2018 includes(i) after-tax charges of $19 million ($0.07 per diluted share) in the third quarter for transaction costs related to the Linde merger, (ii) a pension settlement charge of $4 million ($3 millionafter-tax or $0.01 per diluted share) in the third quarter,(iii) after-tax charges of $10 million ($0.03 per diluted share) in the third quarter related the transition to hyper-inflationary accounting in Argentina,(iv) after-tax charges of $21 million ($0.07 per diluted share) in the second quarter primarily for transaction costs related to the Linde merger, and (v) a charge of $18 millionafter-tax and noncontrolling interests ($0.06 per diluted share) in the first quarter primarily for transaction costs related to the Linde merger. |
(c) | 2017 includes(i) after-tax charges of $6 million ($0.02 per diluted share), $15 million ($0.05 per diluted share), $13 million ($0.05 per diluted share), and $14 million ($0.05 per diluted share) in the first, second, third, and fourth quarters, respectively for transaction costs related to the Linde merger, (ii) a pension settlement charge of $2 million ($1 millionafter-tax) in the third quarter related to lump sum benefit payments made from an international pension plan, and (iii) income tax charges, net of $394 million ($1.36 per diluted share) in the fourth quarter due to U.S. tax reform. |
(d) | As a result of the adoption of new accounting guidance on the presentation of net periodic pension and postretirement benefit costs, prior period information has been reclassified to conform with current year presentation. |
Page 8 of 8
PRAXAIR, INC. AND SUBSIDIARIES
APPENDIX
NON-GAAP MEASURES
(Millions of dollars, except per share data)
(UNAUDITED)
The followingNon-GAAP measures are intended to supplement investors’ understanding of the company’s financial information by providing measures which investors, financial analysts and management use to help evaluate the company’s financial leverage, return on capital and operating performance. Items which the company does not believe to be indicative ofon-going business trends are excluded from these calculations so that investors can better evaluate and analyze historical and future business trends on a consistent basis. Definitions of theseNon-GAAP measures may not be comparable to similar definitions used by other companies and are not a substitute for similar GAAP measures. Adjusted amounts exclude the impacts of the 2018 transaction costs and other charges, 2018 third quarter Argentina hyper-inflationary impact, 2018 third quarter pension settlement, 2017 transaction costs and other charges, 2017 third quarter pension settlement, 2017 fourth quarter U.S. tax reform, 2016 third quarter cost reduction program and pension settlement, and 2016 first quarter bond redemption.
Adjusted Amounts
Year-to-date September 30, | Third Quarter | Second Quarter | First Quarter | Year | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | Year | Third Quarter | First Quarter | |||||||||||||||||||||||||||||||||||||
2018 | 2018 | 2018 | 2018 | 2017 | 2017 | 2017 | 2017 | 2017 | 2016 | 2016 | 2016 | |||||||||||||||||||||||||||||||||||||
Adjusted Operating Profit and Operating Profit Margin | ||||||||||||||||||||||||||||||||||||||||||||||||
Reported operating profit | $ | 2,011 | $ | 669 | $ | 689 | $ | 653 | $ | 2,444 | $ | 639 | $ | 632 | $ | 606 | $ | 567 | $ | 2,247 | $ | 505 | $ | 554 | ||||||||||||||||||||||||
Add: Cost reduction program and other charges, net | — | — | — | — | — | — | — | — | — | 96 | 96 | — | ||||||||||||||||||||||||||||||||||||
Add: Argentina currency devaluation | 10 | 10 | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Add: Transaction costs | 64 | 21 | 24 | 19 | 52 | 17 | 14 | 15 | 6 | — | — | — | ||||||||||||||||||||||||||||||||||||
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Total adjustments | 74 | 31 | 24 | 19 | 52 | 17 | 14 | 15 | 6 | 96 | 96 | — | ||||||||||||||||||||||||||||||||||||
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Adjusted operating profit | $ | 2,085 | $ | 700 | $ | 713 | $ | 672 | $ | 2,496 | $ | 656 | $ | 646 | $ | 621 | $ | 573 | $ | 2,343 | $ | 601 | $ | 554 | ||||||||||||||||||||||||
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Reported percentage change | 11 | % | 6 | % | ||||||||||||||||||||||||||||||||||||||||||||
Adjusted percentage change | 13 | % | 8 | % | ||||||||||||||||||||||||||||||||||||||||||||
Reported sales | $ | 9,084 | $ | 3,024 | $ | 3,061 | $ | 2,999 | $ | 11,437 | $ | 2,953 | $ | 2,922 | $ | 2,834 | $ | 2,728 | $ | 10,534 | $ | 2,716 | $ | 2,509 | ||||||||||||||||||||||||
Adjusted operating profit margin | 23.0 | % | 23.1 | % | 23.3 | % | 22.4 | % | 21.8 | % | 22.2 | % | 22.1 | % | 21.9 | % | 21.0 | % | 22.2 | % | 22.1 | % | 22.1 | % | ||||||||||||||||||||||||
Adjusted Interest Expense - net | ||||||||||||||||||||||||||||||||||||||||||||||||
Reported interest expense - net | $ | 130 | $ | 40 | $ | 44 | $ | 46 | $ | 161 | $ | 41 | $ | 41 | $ | 38 | $ | 41 | $ | 190 | $ | 43 | $ | 65 | ||||||||||||||||||||||||
Less: Bond redemption | — | — | — | — | — | — | — | — | — | (16 | ) | — | (16 | ) | ||||||||||||||||||||||||||||||||||
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Adjusted interest expense - net | $ | 130 | $ | 40 | $ | 44 | $ | 46 | $ | 161 | $ | 41 | $ | 41 | $ | 38 | $ | 41 | $ | 174 | $ | 43 | $ | 49 | ||||||||||||||||||||||||
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Adjusted Net Pension and OPEB cost (benefit), excluding service cost | ||||||||||||||||||||||||||||||||||||||||||||||||
Reported net pension and OPEB cost (benefit), excluding service cost | $ | 10 | $ | 6 | $ | 2 | $ | 2 | $ | (4 | ) | $ | 3 | $ | 6 | $ | 2 | $ | (15 | ) | 9 | 8 | — | |||||||||||||||||||||||||
Less: Pension settlement charge | (4 | ) | (4 | ) | — | — | (2 | ) | — | (2 | ) | — | — | (4 | ) | (4 | ) | — | ||||||||||||||||||||||||||||||
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Adjusted net Pension and OPEB cost (benefit), excluding service cost | $ | 6 | $ | 2 | $ | 2 | $ | 2 | $ | (6 | ) | $ | 3 | $ | 4 | $ | 2 | $ | (15 | ) | $ | 5 | $ | 4 | $ | — | ||||||||||||||||||||||
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Adjusted Income Taxes | ||||||||||||||||||||||||||||||||||||||||||||||||
Reported income taxes | $ | 462 | $ | 156 | $ | 158 | $ | 148 | $ | 1,026 | $ | 558 | $ | 162 | $ | 157 | $ | 149 | $ | 551 | $ | 120 | $ | 133 | ||||||||||||||||||||||||
Add: Cost reduction program and other charges, net | — | — | — | — | — | — | — | — | — | 28 | 28 | — | ||||||||||||||||||||||||||||||||||||
Add: Bond redemption | — | — | — | — | — | — | — | — | — | 6 | — | 6 | ||||||||||||||||||||||||||||||||||||
Add: Pension settlement charge | 1 | 1 | — | — | 1 | — | 1 | — | — | 1 | 1 | — | ||||||||||||||||||||||||||||||||||||
Add: Tax reform | — | — | — | — | (394 | ) | (394 | ) | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Add: Transaction costs | 7 | 2 | 3 | 2 | 4 | 3 | 1 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
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Total adjustments | 8 | 3 | 3 | 2 | (389 | ) | (391 | ) | 2 | — | — | 35 | 29 | 6 | ||||||||||||||||||||||||||||||||||
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Adjusted income taxes | $ | 470 | $ | 159 | $ | 161 | $ | 150 | $ | 637 | $ | 167 | $ | 164 | $ | 157 | $ | 149 | $ | 586 | $ | 149 | $ | 139 | ||||||||||||||||||||||||
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Adjusted Effective Tax Rate | ||||||||||||||||||||||||||||||||||||||||||||||||
Reported income before income taxes and equity investments | $ | 1,871 | $ | 623 | $ | 643 | $ | 605 | $ | 2,287 | $ | 595 | $ | 585 | $ | 566 | $ | 541 | $ | 2,048 | $ | 454 | $ | 489 | ||||||||||||||||||||||||
Add: Cost reduction program and other charges, net | — | — | — | — | — | — | — | — | — | 96 | 96 | — | ||||||||||||||||||||||||||||||||||||
Add: Bond redemption | — | — | — | — | — | — | — | — | — | 16 | — | 16 | ||||||||||||||||||||||||||||||||||||
Add: Pension settlement charge | 4 | 4 | — | — | 2 | — | 2 | — | — | 4 | 4 | — | ||||||||||||||||||||||||||||||||||||
Add: Argentina currency devaluation | 10 | 10 | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Add: Transaction costs | 64 | 21 | 24 | 19 | 52 | 17 | 14 | 15 | 6 | — | — | — | ||||||||||||||||||||||||||||||||||||
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Total adjustments | 78 | 35 | 24 | 19 | 54 | 17 | 16 | 15 | 6 | 116 | 100 | 16 | ||||||||||||||||||||||||||||||||||||
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Adjusted income before income taxes and equity investments | $ | 1,949 | $ | 658 | $ | 667 | $ | 624 | $ | 2,341 | $ | 612 | $ | 601 | $ | 581 | $ | 547 | $ | 2,164 | $ | 554 | $ | 505 | ||||||||||||||||||||||||
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Reported effective tax rate | 24.7 | % | 25.0 | % | 24.6 | % | 24.5 | % | 44.9 | % | 93.8 | % | 27.7 | % | 27.7 | % | 27.5 | % | 26.9 | % | 26.4 | % | 27.2 | % | ||||||||||||||||||||||||
Adjusted effective tax rate | 24.1 | % | 24.2 | % | 24.1 | % | 24.0 | % | 27.2 | % | 27.3 | % | 27.3 | % | 27.0 | % | 27.2 | % | 27.1 | % | 26.9 | % | 27.5 | % | ||||||||||||||||||||||||
Adjusted Noncontrolling Interests | ||||||||||||||||||||||||||||||||||||||||||||||||
Reported noncontrolling interests | $ | 48 | $ | 19 | $ | 19 | $ | 10 | $ | 61 | $ | 16 | $ | 16 | $ | 14 | $ | 15 | $ | 38 | $ | 5 | $ | 10 | ||||||||||||||||||||||||
Add: Cost reduction program and other charges, net | (1 | ) | — | — | (1 | ) | — | — | — | — | — | 5 | 5 | — | ||||||||||||||||||||||||||||||||||
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Total adjustments | (1 | ) | — | — | (1 | ) | — | — | — | — | — | 5 | 5 | — | ||||||||||||||||||||||||||||||||||
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Adjusted noncontrolling interests | $ | 47 | $ | 19 | $ | 19 | $ | 9 | $ | 61 | $ | 16 | $ | 16 | $ | 14 | $ | 15 | $ | 43 | $ | 10 | $ | 10 | ||||||||||||||||||||||||
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Adjusted Net Income - Praxair, Inc. | ||||||||||||||||||||||||||||||||||||||||||||||||
Reported net income - Praxair, Inc. | $ | 1,403 | $ | 461 | $ | 480 | $ | 462 | $ | 1,247 | $ | 33 | $ | 419 | $ | 406 | $ | 389 | $ | 1,500 | $ | 339 | $ | 356 | ||||||||||||||||||||||||
Add: Cost reduction program and other charges, net | 1 | — | — | 1 | — | — | — | — | — | 63 | 63 | — | ||||||||||||||||||||||||||||||||||||
Add: Bond redemption | — | — | — | — | — | — | — | — | — | 10 | — | 10 | ||||||||||||||||||||||||||||||||||||
Add: Pension settlement charge | 3 | 3 | — | — | 1 | — | 1 | — | — | 3 | 3 | — | ||||||||||||||||||||||||||||||||||||
Add: Tax reform | — | — | — | — | 394 | 394 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Add: Argentina currency devaluation | 10 | 10 | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Add: Transaction costs | 57 | 19 | 21 | 17 | 48 | 14 | 13 | 15 | 6 | — | — | — | ||||||||||||||||||||||||||||||||||||
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Total adjustments | 71 | 32 | 21 | 18 | 443 | 408 | 14 | 15 | 6 | 76 | 66 | 10 | ||||||||||||||||||||||||||||||||||||
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Adjusted net income - Praxair, Inc. | $ | 1,474 | $ | 493 | $ | 501 | $ | 480 | $ | 1,690 | $ | 441 | $ | 433 | $ | 421 | $ | 395 | $ | 1,576 | $ | 405 | $ | 366 | ||||||||||||||||||||||||
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Reported percentage change | 16 | % | 10 | % | ||||||||||||||||||||||||||||||||||||||||||||
Adjusted percentage change | 18 | % | 14 | % | ||||||||||||||||||||||||||||||||||||||||||||
Adjusted Diluted EPS | ||||||||||||||||||||||||||||||||||||||||||||||||
Reported diluted EPS | $ | 4.82 | $ | 1.58 | $ | 1.65 | $ | 1.59 | $ | 4.32 | $ | 0.11 | $ | 1.45 | $ | 1.41 | $ | 1.35 | $ | 5.21 | $ | 1.18 | $ | 1.24 | ||||||||||||||||||||||||
Add: Cost reduction program and other charges, net | — | — | — | — | — | — | — | — | — | 0.22 | 0.22 | — | ||||||||||||||||||||||||||||||||||||
Add: Bond redemption | — | — | — | — | — | — | — | — | — | 0.04 | — | 0.04 | ||||||||||||||||||||||||||||||||||||
Add: Pension settlement charge | 0.01 | 0.01 | — | — | — | — | — | — | — | 0.01 | 0.01 | — | ||||||||||||||||||||||||||||||||||||
Add: Tax reform | — | — | — | — | 1.36 | 1.36 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Add: Argentina currency devaluation | 0.03 | 0.03 | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Add: Transaction costs | 0.20 | 0.07 | 0.07 | 0.06 | 0.17 | 0.05 | 0.05 | 0.05 | 0.02 | — | — | — | ||||||||||||||||||||||||||||||||||||
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Total adjustments | 0.24 | 0.11 | 0.07 | 0.06 | 1.53 | 1.41 | 0.05 | 0.05 | 0.02 | 0.27 | 0.23 | 0.04 | ||||||||||||||||||||||||||||||||||||
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Adjusted diluted EPS | $ | 5.06 | $ | 1.69 | $ | 1.72 | $ | 1.65 | $ | 5.85 | $ | 1.52 | $ | 1.50 | $ | 1.46 | $ | 1.37 | $ | 5.48 | $ | 1.41 | $ | 1.28 | ||||||||||||||||||||||||
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Reported percentage change | 14 | % | 9 | % | ||||||||||||||||||||||||||||||||||||||||||||
Adjusted percentage change | 17 | % | 13 | % |
Page 8 of 8 (cont’d)
2018 | 2017 | 2016 | ||||||||||||||||||||||||||||||||||||||||||
Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 (a) | ||||||||||||||||||||||||||||||||||
Free Cash Flow (FCF)- Free cash flow is a measure used by investors, financial analysts and management to evaluate the ability of a company to pursue opportunities that enhance shareholder value. FCF equals cash flow from operations less capital expenditures. |
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Operating cash flow | $ | 871 | $ | 790 | $ | 688 | $ | 836 | $ | 794 | $ | 701 | $ | 710 | $ | 726 | $ | 788 | $ | 706 | $ | 569 | ||||||||||||||||||||||
Less: capital expenditures | (380 | ) | (351 | ) | (325 | ) | (339 | ) | (320 | ) | (325 | ) | (327 | ) | (409 | ) | (376 | ) | (357 | ) | (323 | ) | ||||||||||||||||||||||
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Free Cash Flow | $ | 491 | $ | 439 | $ | 363 | $ | 497 | $ | 474 | $ | 376 | $ | 383 | $ | 317 | $ | 412 | $ | 349 | $ | 246 | ||||||||||||||||||||||
Net Debt, Capital andDebt-to-Capital Ratio- Thedebt-to-capital ratio is a measure used by investors, financial analysts and management to provide a measure of financial leverage and insights into how the company is financing its operations. |
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Debt | $ | 8,312 | $ | 8,458 | $ | 8,842 | $ | 9,000 | $ | 9,237 | $ | 9,367 | $ | 9,368 | $ | 9,515 | $ | 9,842 | $ | 9,956 | $ | 9,404 | ||||||||||||||||||||||
Less: cash and cash equivalents | (600 | ) | (479 | ) | (545 | ) | (617 | ) | (607 | ) | (535 | ) | (519 | ) | (524 | ) | (627 | ) | (567 | ) | (221 | ) | ||||||||||||||||||||||
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Net debt | 7,712 | 7,979 | 8,297 | 8,383 | 8,630 | 8,832 | 8,849 | 8,991 | 9,215 | 9,389 | 9,183 | |||||||||||||||||||||||||||||||||
Equity and redeemable noncontrolling interests: | ||||||||||||||||||||||||||||||||||||||||||||
Redeemable noncontrolling interests | 15 | 14 | 13 | 11 | 11 | 10 | 10 | 11 | 11 | 12 | 119 | |||||||||||||||||||||||||||||||||
Praxair, Inc. shareholders’ equity | 6,232 | 6,027 | 6,368 | 6,018 | 6,256 | 5,807 | 5,529 | 5,021 | 5,245 | 5,140 | 4,888 | |||||||||||||||||||||||||||||||||
Noncontrolling interests | 503 | 501 | 516 | 493 | 475 | 453 | 436 | 420 | 393 | 407 | 417 | |||||||||||||||||||||||||||||||||
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Total equity and redeemable noncontrolling interests | 6,750 | 6,542 | 6,897 | 6,522 | 6,742 | 6,270 | 5,975 | 5,452 | 5,649 | 5,559 | 5,424 | |||||||||||||||||||||||||||||||||
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Capital | $ | 14,462 | $ | 14,521 | $ | 15,194 | $ | 14,905 | $ | 15,372 | $ | 15,102 | $ | 14,824 | $ | 14,443 | $ | 14,864 | $ | 14,948 | $ | 14,607 | ||||||||||||||||||||||
Debt-to-capital | 53.3 | % | 54.9 | % | 54.6 | % | 56.2 | % | 56.1 | % | 58.5 | % | 59.7 | % | 62.3 | % | 62.0 | % | 62.8 | % | 62.9 | % | ||||||||||||||||||||||
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After-tax Return on Capital and AdjustedAfter-tax Return on Capital (ROC) -After-tax return on capital is a measure used by investors, financial analysts and management to evaluate the return on net assets employed in the business. ROC measures theafter-tax operating profit that the company was able to generate with the investments made by all parties in the business (debt, noncontrolling interests and Praxair, Inc. shareholders’ equity). |
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Reported net income - Praxair, Inc. | $ | 461 | $ | 480 | $ | 462 | $ | 33 | $ | 419 | $ | 406 | $ | 389 | $ | 406 | $ | 339 | $ | 399 | $ | 356 | ||||||||||||||||||||||
Add: noncontrolling interests | 19 | 19 | 10 | 16 | 16 | 14 | 15 | 13 | 5 | 10 | 10 | |||||||||||||||||||||||||||||||||
Add: interest expense - net | 40 | 44 | 46 | 41 | 41 | 38 | 41 | 38 | 43 | 44 | 65 | |||||||||||||||||||||||||||||||||
Less: tax benefit on interest expense - net * | (10 | ) | (11 | ) | (11 | ) | (11 | ) | (11 | ) | (11 | ) | (12 | ) | (10 | ) | (12 | ) | (12 | ) | (20 | ) | ||||||||||||||||||||||
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Net operating profitafter-tax (NOPAT) | $ | 510 | $ | 532 | $ | 507 | $ | 79 | $ | 465 | $ | 447 | $ | 433 | $ | 447 | $ | 375 | $ | 441 | $ | 411 | ||||||||||||||||||||||
Pre-tax Adjustments: | ||||||||||||||||||||||||||||||||||||||||||||
Add: Cost reduction program and other charges, net | — | — | — | — | — | — | — | — | 96 | — | — | |||||||||||||||||||||||||||||||||
Add: Pension settlement charge | 4 | — | — | — | 2 | — | — | — | 4 | — | — | |||||||||||||||||||||||||||||||||
Add: Argentina currency devaluation | 10 | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Add: Transaction costs | 21 | 24 | 19 | 17 | 14 | 15 | 6 | — | — | — | — | |||||||||||||||||||||||||||||||||
Less: income taxes onpre-tax adjustments | (3 | ) | (3 | ) | (2 | ) | (3 | ) | — | — | — | — | (29 | ) | — | — | ||||||||||||||||||||||||||||
Add: Tax reform net income tax charge | — | — | — | 394 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
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Adjusted NOPAT | $ | 542 | $ | 553 | $ | 524 | $ | 487 | $ | 481 | $ | 462 | $ | 439 | $ | 447 | $ | 446 | $ | 441 | $ | 411 | ||||||||||||||||||||||
4-quarter trailing NOPAT | $ | 1,628 | $ | 1,583 | $ | 1,497 | $ | 1,424 | $ | 1,792 | $ | 1,702 | $ | 1,696 | $ | 1,674 | $ | 1,688 | $ | 1,751 | $ | 1,658 | ||||||||||||||||||||||
4-quarter trailing adjusted NOPAT | $ | 2,106 | $ | 2,045 | $ | 1,953 | $ | 1,869 | $ | 1,829 | $ | 1,794 | $ | 1,773 | $ | 1,745 | $ | 1,759 | $ | 1,769 | $ | 1,789 | ||||||||||||||||||||||
Ending capital (see above) | $ | 14,462 | $ | 14,521 | $ | 15,194 | $ | 14,905 | $ | 15,372 | $ | 15,102 | $ | 14,824 | $ | 14,443 | $ | 14,864 | $ | 14,948 | $ | 14,607 | ||||||||||||||||||||||
5-quarter average ending capital | $ | 14,891 | $ | 15,019 | $ | 15,079 | $ | 14,929 | $ | 14,921 | $ | 14,836 | $ | 14,737 | $ | 14,570 | $ | 14,513 | $ | 14,480 | $ | 14,451 | ||||||||||||||||||||||
After-tax ROC(4-quarter trailing NOPAT /5-quarter average capital) | 11.3 | % | 10.5 | % | 9.9 | % | 9.5 | % | 12.0 | % | 11.5 | % | 11.5 | % | 11.5 | % | 11.6 | % | 12.1 | % | 11.5 | % | ||||||||||||||||||||||
Adjustedafter-tax ROC(4-quarter trailing adjusted NOPAT /5-quarter average capital) | 14.1 | % | 13.6 | % | 13.0 | % | 12.5 | % | 12.3 | % | 12.1 | % | 12.0 | % | 12.0 | % | 12.1 | % | 12.2 | % | 12.4 | % | ||||||||||||||||||||||
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* Tax benefit on interest expense - net is generally presented using the reported effective rate. |
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EBITDA, Adjusted EBITDA, EBITDA Margin and Adjusted EBITDA Margin- These measures are used by investors, financial analysts and management to assess a company’s profitability. |
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Reported net income - Praxair, Inc. | $ | 461 | $ | 480 | $ | 462 | $ | 33 | $ | 419 | $ | 406 | $ | 389 | $ | 406 | $ | 339 | $ | 399 | $ | 356 | ||||||||||||||||||||||
Add: noncontrolling interests | 19 | 19 | 10 | $ | 16 | 16 | 14 | 15 | 13 | 5 | 10 | 10 | ||||||||||||||||||||||||||||||||
Add: interest expense - net | 40 | 44 | 46 | $ | 41 | 41 | 38 | 41 | 38 | 43 | 44 | 65 | ||||||||||||||||||||||||||||||||
Add: net pension and OPEB cost (benefit), excluding service cost | 6 | 2 | 2 | 3 | 6 | 2 | (15 | ) | (1 | ) | 8 | 2 | — | |||||||||||||||||||||||||||||||
Add: income taxes | 156 | 158 | 148 | 558 | 162 | 157 | 149 | 152 | 120 | 146 | 133 | |||||||||||||||||||||||||||||||||
Add: depreciation and amortization | 306 | 311 | 311 | 307 | 298 | 292 | 287 | 285 | 284 | 281 | 272 | |||||||||||||||||||||||||||||||||
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EBITDA | $ | 988 | $ | 1,014 | $ | 979 | $ | 958 | $ | 942 | $ | 909 | $ | 866 | $ | 893 | $ | 799 | $ | 882 | $ | 836 | ||||||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||||||||||||||||||||||
Add: Cost reduction program and other charges, net | — | — | — | — | — | — | — | — | 96 | — | — | |||||||||||||||||||||||||||||||||
Add: Argentina currency devaluation | 10 | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Add: Transaction costs | 21 | 24 | 19 | 17 | 14 | 15 | 6 | — | — | — | — | |||||||||||||||||||||||||||||||||
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Adjusted EBITDA | $ | 1,019 | $ | 1,038 | $ | 998 | $ | 975 | $ | 956 | $ | 924 | $ | 872 | $ | 893 | $ | 895 | $ | 882 | $ | 836 | ||||||||||||||||||||||
Reported sales | 3,024 | 3,061 | 2,999 | 2,953 | 2,922 | 2,834 | 2,728 | 2,644 | 2,716 | 2,665 | 2,509 | |||||||||||||||||||||||||||||||||
EBITDA margin | 32.7 | % | 33.1 | % | 32.6 | % | 32.4 | % | 32.2 | % | 32.1 | % | 31.7 | % | 33.8 | % | 29.4 | % | 33.1 | % | 33.3 | % | ||||||||||||||||||||||
Adjusted EBITDA margin | 33.7 | % | 33.9 | % | 33.3 | % | 33.0 | % | 32.7 | % | 32.6 | % | 32.0 | % | 33.8 | % | 33.0 | % | 33.1 | % | 33.3 | % |
(a) | 2016 first quarter operating cash flow was restated for the reclassification of $16 million cash payment related to the bond redemption from operating cash flow to financing cash flow on the statement of cash flow pursuant to new accounting guidance adopted in the first quarter of 2018 relating to the classification of certain cash receipts and payments. |