x
|
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
|
PRAXAIR,
INC.
|
||
(Exact
name of registrant as specified in its charter)
|
||
|
||
DELAWARE
|
||
(State
or other jurisdiction of incorporation)
|
||
|
||
1-11037
|
|
06-1249050
|
(Commission
File Number)
|
|
(IRS
Employer Identification No.)
|
|
|
|
39
OLD RIDGEBURY ROAD, DANBURY, CT
|
|
06810-5113
|
(Address
of principal executive offices)
|
|
(Zip
Code)
|
|
||
(203)
837-2000
|
||
(Registrant’s
telephone number, including area code)
|
||
|
||
N/A
|
||
(Former
name, former address and former fiscal year, if changed since last
report)
|
INDEX
|
||
|
||
PART
I - FINANCIAL INFORMATION
|
PAGE
|
|
Financial
Statements
|
||
Consolidated
Statements of Income - Praxair, Inc. and Subsidiaries
Quarter
Ended March
31, 2006 and 2005 (Unaudited)
|
3
|
|
Condensed
Consolidated Balance Sheets - Praxair, Inc. and Subsidiaries
March
31, 2006 and December 31, 2005 (Unaudited)
|
4
|
|
Condensed
Consolidated Statements of Cash Flows - Praxair, Inc. and
Subsidiaries
Quarter
Ended March 31, 2006 and 2005 (Unaudited)
|
5
|
|
Consolidated
Statement of Shareholders’ Equity - Praxair, Inc. and Subsidiaries
Quarter
Ended March 31, 2006 (Unaudited)
|
6
|
|
Notes
to Condensed Consolidated Financial Statements - Praxair, Inc.
and
Subsidiaries (Unaudited)
|
7
|
|
Management's
Discussion and Analysis of Financial Condition and
Results
of Operations
|
15
|
|
Quantitative
and Qualitative Disclosures about Market Risk
|
22
|
|
Controls
and Procedures
|
22
|
|
PART
II - OTHER INFORMATION
|
||
Legal
Proceedings
|
23
|
|
Risk
Factors
|
23
|
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
23
|
|
Defaults
Upon Senior Securities
|
23
|
|
Submission
of Matters to a Vote of Security Holders
|
24
|
|
Other
Information
|
24
|
|
Exhibits
|
24
|
|
25
|
Praxair,
Inc. and Subsidiaries
|
PRAXAIR,
INC. AND SUBSIDIARIES
|
|||||||
CONSOLIDATED
STATEMENTS OF INCOME
|
|||||||
(Millions
of dollars, except per share data)
|
|||||||
(UNAUDITED)
|
|||||||
Quarter
Ended
March
31,
|
|||||||
2006
|
2005
|
||||||
SALES
|
$
|
2,026
|
$
|
1,827
|
|||
Cost
of sales, exclusive of
|
|||||||
depreciation
and amortization
|
1,207
|
1,109
|
|||||
Selling,
general and administrative
|
273
|
245
|
|||||
Depreciation
and amortization
|
171
|
162
|
|||||
Research
and development
|
21
|
20
|
|||||
Other
income (expense) - net
|
(2
|
)
|
18
|
||||
OPERATING
PROFIT
|
352
|
309
|
|||||
Interest
expense - net
|
38
|
42
|
|||||
INCOME
BEFORE INCOME TAXES
|
314
|
267
|
|||||
Income
taxes
|
83
|
69
|
|||||
231
|
198
|
||||||
Minority
interests
|
(8
|
)
|
(7
|
)
|
|||
Income
from equity investments
|
2
|
4
|
|||||
NET
INCOME
|
$
|
225
|
$
|
195
|
|||
PER
SHARE DATA:
|
|||||||
Basic
earnings per share
|
$
|
0.69
|
$
|
0.60
|
|||
Diluted
earnings per share
|
$
|
0.68
|
$
|
0.59
|
|||
Cash
dividends per share
|
$
|
0.25
|
$
|
0.18
|
|||
WEIGHTED
AVERAGE SHARES OUTSTANDING (000's):
|
|||||||
Basic
shares outstanding
|
323,804
|
323,818
|
|||||
Diluted
shares outstanding
|
330,043
|
329,669
|
|||||
The
accompanying notes are an integral part of these financial
statements.
|
PRAXAIR,
INC. AND SUBSIDIARIES
|
|||||||
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|||||||
(Millions
of dollars)
|
|||||||
(UNAUDITED)
|
|||||||
March
31,
|
December
31,
|
|
|||||
2006
|
2005
|
||||||
ASSETS
|
|||||||
Cash
and cash equivalents
|
$
|
32
|
$
|
173
|
|||
Accounts
receivable - net
|
1,405
|
1,386
|
|||||
Inventories
|
391
|
373
|
|||||
Prepaid
and other current assets
|
225
|
201
|
|||||
TOTAL
CURRENT ASSETS
|
2,053
|
2,133
|
|||||
Property,
plant and equipment (less accumulated depreciation of
$6,771
at March 31, 2006 and $6,553 at December 31, 2005)
|
6,271
|
6,108
|
|||||
Goodwill
|
1,568
|
1,545
|
|||||
Other
intangible assets - net
|
77
|
81
|
|||||
Other
long-term assets
|
647
|
624
|
|||||
TOTAL
ASSETS
|
$
|
10,616
|
$
|
10,491
|
|||
LIABILITIES
AND EQUITY
|
|||||||
Accounts
payable
|
$
|
581
|
$
|
639
|
|||
Short-term
debt
|
346
|
231
|
|||||
Current
portion of long-term debt
|
285
|
290
|
|||||
Other
current liabilities
|
862
|
841
|
|||||
TOTAL
CURRENT LIABILITIES
|
2,074
|
2,001
|
|||||
Long-term
debt
|
2,777
|
2,926
|
|||||
Other
long-term obligations
|
1,433
|
1,460
|
|||||
TOTAL
LIABILITIES
|
6,284
|
6,387
|
|||||
Commitments
and contingencies (Note 9)
|
|||||||
Minority
interests
|
207
|
202
|
|||||
Shareholders'
equity
|
4,125
|
3,902
|
|||||
TOTAL
LIABILITIES AND EQUITY
|
$
|
10,616
|
$
|
10,491
|
|||
The
accompanying notes are an integral part of these financial
statements.
|
|||||||
PRAXAIR,
INC. AND SUBSIDIARIES
|
|||||||
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|||||||
(Millions
of dollars)
|
|||||||
(UNAUDITED)
|
|||||||
Quarter
Ended
March
31,
|
|||||||
2006
|
2005
|
||||||
OPERATIONS
|
|||||||
Net
income
|
$
|
225
|
$
|
195
|
|||
Adjustments
to reconcile net income to net cash
|
|||||||
provided
by operating activities:
|
|||||||
Depreciation
and amortization
|
171
|
162
|
|||||
Deferred
income taxes
|
45
|
35
|
|||||
Stock option expense
|
11
|
-
|
|||||
Accounts
receivable
|
(21
|
)
|
(38
|
)
|
|||
Inventory
|
(16
|
)
|
(12
|
)
|
|||
Prepaid
and other current assets
|
(15
|
)
|
(17
|
)
|
|||
Payables
and accruals
|
(54
|
)
|
78
|
||||
Pension
contributions
|
(92
|
)
|
(71
|
)
|
|||
Other
|
(11
|
)
|
(43
|
)
|
|||
Net
cash provided by operating activities
|
243
|
289
|
|||||
INVESTING
|
|||||||
Capital
expenditures
|
(256
|
)
|
(165
|
)
|
|||
Acquisitions
|
(3
|
)
|
(2
|
)
|
|||
Divestitures
and asset sales
|
5
|
13
|
|||||
Net
cash used for investing activities
|
(254
|
)
|
(154
|
)
|
|||
FINANCING
|
|||||||
Short-term
debt borrowings - net
|
9
|
(33
|
)
|
||||
Long-term
debt borrowings
|
35
|
5
|
|||||
Long-term
debt repayments
|
(102
|
)
|
(12
|
)
|
|||
Excess tax benefit on stock option exercises
|
9
|
-
|
|||||
Minority
interest transactions and other
|
2
|
(4
|
)
|
||||
Issuances
of common stock
|
88
|
61
|
|||||
Purchases
of common stock
|
(91
|
)
|
(92
|
)
|
|||
Cash
dividends
|
(81
|
)
|
(58
|
)
|
|||
Net
cash used for financing activities
|
(131
|
)
|
(133
|
)
|
|||
Effect
of exchange rate changes on cash and
|
|||||||
cash
equivalents
|
1
|
(1
|
)
|
||||
Change
in cash and cash equivalents
|
(141
|
)
|
1
|
||||
Cash
and cash equivalents, beginning-of-period
|
173
|
25
|
|||||
Cash
and cash equivalents, end-of-period
|
$
|
32
|
$
|
26
|
|||
The
accompanying notes are an integral part of these financial
statements.
|
PRAXAIR,
INC. AND SUBSIDIARIES
|
|||||||||||||||||||||||||
CONSOLIDATED
STATEMENT OF SHAREHOLDERS’ EQUITY
|
|||||||||||||||||||||||||
(Dollar
amounts in millions, except share data, shares in
thousands)
|
|||||||||||||||||||||||||
(UNAUDITED)
|
|||||||||||||||||||||||||
Accumulated
|
|||||||||||||||||||||||||
Additional
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|||||||||||||
|
Common
Stock
|
Paid-In
|
Treasury
Stock
|
|
Retained
|
|
|
Comprehensive
|
|||||||||||||||||
Activity
|
Shares
|
|
|
Amounts
|
|
|
Capital
|
|
|
Shares
|
|
|
Amounts
|
|
|
Earnings
|
|
|
Income
(Loss)(b)
|
|
|
Total
|
|||
Balance,
January 1, 2006
|
363,713
|
$
|
4
|
$
|
2,489
|
41,374
|
$
|
(1,356
|
)
|
$
|
4,022
|
$
|
(1,257
|
)
|
$
|
3,902
|
|||||||||
Net
income
|
225
|
225
|
|||||||||||||||||||||||
Translation
adjustments
|
73
|
73
|
|||||||||||||||||||||||
Minimum
pension liability,
|
|||||||||||||||||||||||||
net
of $8 million of taxes
|
(11
|
)
|
(11
|
)
|
|||||||||||||||||||||
Comprehensive
income(a)
|
287
|
||||||||||||||||||||||||
Dividends
on common stock
($0.25
per share)
|
(81
|
)
|
(81
|
)
|
|||||||||||||||||||||
Issuances
of common stock:
|
|||||||||||||||||||||||||
For
the dividend reinvestment
|
|||||||||||||||||||||||||
and
stock purchase plan
|
25
|
1
|
1
|
||||||||||||||||||||||
For
employee savings and
|
|||||||||||||||||||||||||
incentive
plans
|
1,361
|
49
|
(1,147
|
)
|
38
|
87
|
|||||||||||||||||||
Purchases
of common stock
|
1,755
|
(94
|
)
|
(94
|
)
|
||||||||||||||||||||
Tax
benefit from stock options
|
12
|
12
|
|||||||||||||||||||||||
Stock
option expense
|
11
|
11
|
|||||||||||||||||||||||
Balance,
March 31, 2006
|
365,099
|
$
|
4
|
$
|
2,562
|
41,982
|
$
|
(1,412
|
)
|
$
|
4,166
|
$
|
(1,195
|
)
|
$
|
4,125
|
(a)
The components of comprehensive income are as follows:
|
|||||||
Quarter
Ended March 31,
|
|||||||
2006
|
2005
|
||||||
Net
income
|
$
|
225
|
$
|
195
|
|||
Translation
adjustments
|
73
|
(69
|
)
|
||||
Derivative instruments
|
-
|
1
|
|||||
Minimum
pension liability
|
(11
|
)
|
(2
|
)
|
|||
|
$
|
287
|
$
|
125
|
|||
(b)
The components of accumulated other comprehensive income (loss) are
as
follows:
|
|||||||
|
March
31,
2006
|
December
31,
2005
|
|||||
Accumulated
translation adjustments
|
$
|
(977
|
)
|
$
|
(1,050
|
)
|
|
Accumulated
minimum pension liability
|
(217
|
)
|
(206
|
)
|
|||
Accumulated
derivatives
|
(1
|
)
|
(1
|
)
|
|||
$
|
(1,195
|
)
|
$
|
(1,257
|
)
|
||
The
accompanying notes are an integral part of these financial
statements.
|
Quarter
ended
March
31,
|
|||||||
2006
|
2005
|
||||||
Dividend
yield
|
1.85
|
%
|
1.63
|
%
|
|||
Volatility
|
17.64
|
%
|
22.69
|
%
|
|||
Risk-free
interest rate
|
4.65
|
%
|
3.93
|
%
|
|||
Expected
term years
|
5
|
5
|
Average
|
Aggregate
|
||||||||||||
Number
of
|
Average
|
Remaining
|
Intrinsic
|
||||||||||
Activity
|
Options
|
Exercise
Price
|
Life
|
Value
|
|||||||||
Outstanding
at December 31, 2005
|
21,644
|
$
|
30.04
|
||||||||||
Granted
|
3,980
|
|
53.98
|
||||||||||
Exercised
|
(1,318
|
)
|
|
25.80
|
|||||||||
Cancelled
or expired
|
(11
|
)
|
|
25.43
|
|||||||||
Outstanding
at March 31, 2006
|
24,295
|
$
|
34.20
|
6.9
|
$
|
509,056
|
|
||||||
Exercisable
at March 31, 2006
|
16,298
|
$
|
27.50
|
5.7
|
$
|
450,681
|
(Millions
of dollars, except per share data)
|
Quarter
ended March 31, 2005
|
|||
NET
INCOME:
|
||||
As
reported
|
$
|
195
|
||
Less:
total stock-based employee compensation
|
||||
expense
determined under fair value based method
|
||||
for
all awards, net of $3 million tax
|
(6
|
)
|
||
Pro
forma net income
|
$
|
189
|
||
BASIC
EARNINGS PER SHARE:
|
||||
As
reported
|
$
|
0.60
|
||
Pro
forma
|
$
|
0.58
|
||
DILUTED
EARNINGS PER SHARE:
|
||||
As
reported
|
$
|
0.59
|
||
Pro
forma
|
$
|
0.57
|
||
March
31,
|
December
31,
|
||||||
(Millions
of dollars)
|
2006
|
2005
|
|||||
Raw
materials and supplies
|
$
|
102
|
$
|
90
|
|||
Work
in process
|
58
|
67
|
|||||
Finished
goods
|
231
|
216
|
|||||
$
|
391
|
$
|
373
|
March
31,
|
December
31,
|
||||||
(Millions
of dollars)
|
2006
|
2005
|
|||||
SHORT-TERM
|
|||||||
Commercial paper and U.S. borrowings
|
$
|
15
|
$
|
-
|
|||
Canadian
borrowings
|
166
|
91
|
|||||
South
American borrowings
|
35
|
32
|
|||||
Asian
borrowings
|
81
|
95
|
|||||
European borrowings
|
43
|
9
|
|||||
Other
international borrowings
|
6
|
4
|
|||||
Total
short-term debt
|
346
|
231
|
|||||
LONG-TERM
|
|||||||
U.S. borrowings
|
|||||||
6.90% Notes due 2006
|
250
|
250
|
|||||
4.75% Notes due 2007
|
250
|
250
|
|||||
6.625% Notes due 2007
|
250
|
250
|
|||||
6.50% Notes due 2008
|
250
|
250
|
|||||
2.75% Notes due 2008 (a)
|
299
|
299
|
|||||
6.375% Notes due 2012 (a,
b)
|
528
|
529
|
|||||
3.95% Notes due 2013 (a)
|
349
|
349
|
|||||
Other
|
9
|
9
|
|||||
European borrowings (c)
|
709
|
786
|
|||||
Canadian borrowings (c)
|
59
|
140
|
|||||
South American borrowings
|
62
|
54
|
|||||
Asian borrowings
|
30
|
34
|
|||||
Other international borrowings
|
4
|
4
|
|||||
Obligations under capital leases
|
13
|
12
|
|||||
3,062
|
3,216
|
||||||
Less:
current portion of long-term debt
|
(285
|
)
|
(290
|
)
|
|||
Total
long-term debt
|
2,777
|
2,926
|
|||||
Total
debt
|
$
|
3,408
|
$
|
3,447
|
|||
(a) |
Amounts
are net of unamortized discounts.
|
(b) |
March
31, 2006 and December 31, 2005 include a $29 million and $30 million
fair
value increase, respectively, related to SFAS 133 hedge accounting.
See
Note 14 on page 57 of the 2005 Annual
Report.
|
(c) |
Classified
as long-term because of the company’s intent to refinance this debt on a
long-term basis and the availability of such financing under the
terms of
the respective agreements.
|
March
31,
|
December
31,
|
||||||
(Millions
of dollars)
|
2006
|
2005
|
|||||
CURRENCY
CONTRACTS
|
|||||||
Balance
sheet items
|
$
|
626
|
$
|
749
|
|||
Anticipated
net income
|
-
|
12
|
|||||
Forecasted
transactions
|
7
|
7
|
|||||
$
|
633
|
$
|
768
|
Quarter
Ended
March
31,
|
|||||||
2006
|
2005
|
||||||
NUMERATOR
(Millions
of dollars)
|
|||||||
Net
income used in basic and diluted EPS
|
$
|
225
|
$
|
195
|
|||
DENOMINATOR
(Thousands
of shares)
|
|||||||
Weighted
average shares outstanding
|
322,770
|
322,710
|
|||||
Shares
earned and issuable under
|
|||||||
compensation
plans
|
1,034
|
1,108
|
|||||
Weighted
average shares used in basic
|
|||||||
earnings
per share
|
323,804
|
323,818
|
|||||
Effect
of dilutive securities
|
|||||||
Convertible
debt
|
-
|
198
|
|||||
Employee
stock options
|
6,239
|
5,653
|
|||||
Weighted
average shares
|
|||||||
used
in diluted earnings per share
|
330,043
|
329,669
|
|||||
BASIC
EARNINGS PER COMMON SHARE
|
$
|
0.69
|
$
|
0.60
|
|||
DILUTED
EARNINGS PER COMMON SHARE
|
$
|
0.68
|
$
|
0.59
|
North
|
South
|
Surface
|
|||||||||||||||||
(Millions
of dollars)
|
America
|
America
|
Europe
|
Asia
|
Technologies
|
Total
|
|||||||||||||
Balance,
December 31, 2005
|
$
|
991
|
$
|
161
|
$
|
293
|
$
|
26
|
$
|
74
|
$
|
1,545
|
|||||||
|
|
|
|||||||||||||||||
Acquisitions
|
1
|
1
|
-
|
-
|
-
|
2
|
|||||||||||||
Purchase
adjustments
|
2
|
-
|
-
|
-
|
-
|
2
|
|||||||||||||
Foreign
currency translation
|
(1
|
)
|
14
|
4
|
1
|
1
|
19
|
||||||||||||
Other
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||
Balance,
March 31, 2006
|
$
|
993
|
$
|
176
|
$
|
297
|
$
|
27
|
$
|
75
|
$
|
1,568
|
|||||||
Customer
&
License/Use
|
Non-compete
|
Patents
&
|
|||||||||||
Agreements
|
Agreements
|
Other
|
Total
|
||||||||||
Cost:
|
|||||||||||||
Balance,
December 31, 2005
|
$
|
71
|
$
|
38
|
$
|
17
|
$
|
126
|
|||||
Additions
|
-
|
1
|
-
|
1
|
|||||||||
Foreign
currency translation
|
-
|
-
|
-
|
-
|
|||||||||
Other
|
(1
|
)
|
(2
|
)
|
-
|
(3
|
)
|
||||||
Balance,
March 31, 2006
|
|
70
|
37
|
|
17
|
|
124
|
||||||
Less:
Accumulated amortization
|
|||||||||||||
Balance,
December 31, 2005
|
|
(22
|
)
|
|
(18
|
)
|
|
(5
|
)
|
|
(45
|
)
|
|
Amortization
expense
|
(2
|
)
|
(2
|
)
|
(1
|
)
|
(5
|
)
|
|||||
Foreign
currency translation
|
-
|
-
|
-
|
-
|
|||||||||
Other
|
1
|
2
|
-
|
3
|
|||||||||
Balance,
March 31, 2006
|
|
(23
|
)
|
|
(18
|
)
|
|
(6
|
)
|
|
(47
|
)
|
|
Net
balance at March 31, 2006
|
$
|
47
|
$
|
19
|
$
|
11
|
$
|
77
|
Quarter
Ended March 31,
|
|||||||||||||
Pensions
|
OPEB
|
||||||||||||
(Millions
of dollars)
|
2006
|
2005
|
2006
|
2005
|
|||||||||
Service
cost
|
$
|
10
|
$
|
9
|
$
|
2
|
$
|
1
|
|||||
Interest
cost
|
24
|
22
|
4
|
4
|
|||||||||
Expected
return on plan assets
|
(28
|
)
|
(25
|
)
|
-
|
-
|
|||||||
Net
amortization and deferral
|
7
|
5
|
-
|
-
|
|||||||||
Net
periodic benefit cost
|
$
|
13
|
$
|
11
|
$
|
6
|
$
|
5
|
Quarter
Ended
March
31,
|
|||||||
(Millions
of dollars)
|
2006
|
2005
|
|||||
SALES(a)
|
|||||||
North
America
|
$
|
1,169
|
$
|
1,060
|
|||
Europe
|
268
|
285
|
|||||
South
America
|
317
|
244
|
|||||
Asia
|
147
|
122
|
|||||
Surface
Technologies (b)
|
125
|
116
|
|||||
$
|
2,026
|
$
|
1,827
|
||||
OPERATING
PROFIT
|
|||||||
North
America
|
$
|
200
|
$
|
166
|
|||
Europe
|
59
|
67
|
|||||
South
America
|
57
|
43
|
|||||
Asia
|
23
|
22
|
|||||
Surface
Technologies
|
13
|
11
|
|||||
$
|
352
|
$
|
309
|
||||
(a) |
Represents
external sales. Intersegment sales, primarily from North America,
totaled
$17 million and $13
million
for
the quarters
ended March 31, 2006 and 2005,
respectively.
|
(b) |
On
March 31, 2006, Praxair reached agreement to sell its aviation service
business, which contributed full year
2005
sales
of approximately $80 million ($67 million of which was reflected
in the
Surface Technologies segment).
Praxair
anticipates the sale to close by the end of the second quarter.
|
Quarter
Ended March 31,
|
||||||||||
(Dollar
amounts in millions)
|
2006
|
2005
|
Variance
|
|||||||
Sales
|
$
|
2,026
|
$
|
1,827
|
+11
|
%
|
||||
Gross
margin(a)
|
$
|
819
|
$
|
718
|
+14
|
%
|
||||
As
a percent of sales
|
40.4
|
%
|
39.3
|
%
|
||||||
Selling,
general and administrative
|
$
|
273
|
$
|
245
|
+11
|
%
|
||||
As
a percent of sales
|
13.5
|
%
|
13.4
|
%
|
||||||
Depreciation
and amortization
|
$
|
171
|
$
|
162
|
+6
|
%
|
||||
Other
income (expenses) - net
|
$
|
(2
|
)
|
$
|
18
|
|||||
Operating
profit
|
$
|
352
|
$
|
309
|
+14
|
%
|
||||
Interest
expense - net
|
$
|
38
|
$
|
42
|
-10
|
%
|
||||
Effective
tax rate
|
26.4
|
%
|
25.8
|
%
|
||||||
Net
income
|
$
|
225
|
$
|
195
|
+15
|
%
|
||||
Quarter
Ended March 31,
|
||||||||||
(Dollar
amounts in millions)
|
2006
|
2005
|
Variance
|
|||||||
SALES(a)
|
||||||||||
North
America
|
$
|
1,169
|
$
|
1,060
|
+10
|
%
|
||||
Europe
|
268
|
285
|
-6
|
%
|
||||||
South
America
|
317
|
244
|
+30
|
%
|
||||||
Asia
|
147
|
122
|
+20
|
%
|
||||||
Surface
Technologies
|
125
|
116
|
+8
|
%
|
||||||
$
|
2,026
|
$
|
1,827
|
+11
|
%
|
|||||
OPERATING
PROFIT
|
||||||||||
North
America
|
$
|
200
|
$
|
166
|
+20
|
%
|
||||
Europe
|
59
|
67
|
-12
|
%
|
||||||
South
America
|
57
|
43
|
+33
|
%
|
||||||
Asia
|
23
|
22
|
+5
|
%
|
||||||
Surface
Technologies
|
13
|
11
|
+18
|
%
|
||||||
$
|
352
|
$
|
309
|
+14
|
%
|
Percent
of
|
||||||||||||||||
Q1
2006
|
Income
Statement
|
Balance
Sheet
|
||||||||||||||
Consolidated
|
First
Quarter Average
|
March
31,
|
December
31,
|
|||||||||||||
Currency
|
Sales
(a)
|
2006
|
2005
|
2006
|
2005
|
|||||||||||
European
euro
|
15
|
%
|
0.83
|
0.75
|
0.83
|
0.85
|
||||||||||
Brazilian
real
|
13
|
%
|
2.19
|
2.66
|
2.17
|
2.34
|
||||||||||
Canadian
dollar
|
10
|
%
|
1.16
|
1.23
|
1.17
|
1.17
|
||||||||||
Mexican
peso
|
5
|
%
|
10.56
|
11.16
|
11.01
|
10.68
|
||||||||||
Chinese
RMB
|
2
|
%
|
8.06
|
8.28
|
8.03
|
8.07
|
||||||||||
Indian
rupee
|
2
|
%
|
44.59
|
43.74
|
44.70
|
45.20
|
||||||||||
Korean
won
|
2
|
%
|
984
|
1,028
|
976
|
1,013
|
||||||||||
Argentinean
peso
|
1
|
%
|
3.07
|
2.93
|
3.08
|
3.03
|
||||||||||
Venezuelan
bolivar
|
<
1
|
%
|
2,150
|
1,987
|
2,150
|
2,150
|
(a) |
Certain
Surface Technologies segment sales are included in European and Brazilian
sales.
|
(Millions
of dollars)
|
Quarter
Ended
March
31,
|
||||||
2006
|
2005
|
||||||
NET
CASH PROVIDED BY (USED FOR):
|
|||||||
OPERATING
ACTIVITIES
|
|||||||
Net
income
|
$
|
225
|
$
|
195
|
|||
Depreciation
and amortization
|
171
|
162
|
|||||
Accounts receivable
|
(21
|
)
|
(38
|
)
|
|||
Inventory
|
(16
|
)
|
(12
|
)
|
|||
Payables and accruals
|
(54
|
)
|
78
|
||||
Pension contributions
|
(92
|
)
|
(71
|
)
|
|||
Other
- net
|
30
|
(25
|
)
|
||||
Net
cash provided by operating activities
|
$
|
243
|
$
|
289
|
|||
INVESTING
ACTIVITIES
|
|||||||
Capital
expenditures
|
$
|
(256
|
)
|
$
|
(165
|
)
|
|
Acquisitions
|
(3
|
)
|
(2
|
)
|
|||
Divestitures
and asset sales
|
5
|
13
|
|||||
Net
cash used for investing activities
|
$
|
(254
|
)
|
$
|
(154
|
)
|
|
FINANCING
ACTIVITIES
|
|||||||
Debt
reductions - net
|
$
|
(58
|
)
|
$
|
(40
|
)
|
|
Excess tax benefit on stock option exercises
|
9
|
-
|
|||||
Issuances
of common stock
|
88
|
61
|
|||||
Purchases
of common stock
|
(91
|
)
|
(92
|
)
|
|||
Cash
dividends
|
(81
|
)
|
(58
|
)
|
|||
Minority
transactions and other
|
2
|
(4
|
)
|
||||
Net
cash used for financing activities
|
$
|
(131
|
)
|
$
|
(133
|
)
|
(Dollar
amounts in millions)
|
March
31,
|
December
31,
|
|||||
2006
|
2005
|
||||||
TOTAL
CAPITAL
|
|||||||
Debt
|
$
|
3,408
|
$
|
3,447
|
|||
Minority interests
|
207
|
202
|
|||||
Shareholders' equity
|
4,125
|
3,902
|
|||||
$
|
7,740
|
$
|
7,551
|
||||
DEBT-TO-CAPITAL
RATIO
|
44.0
|
%
|
45.6
|
%
|
Quarter
Ended
|
|||||||
March
31,
|
|||||||
2006
|
2005
|
||||||
AFTER-TAX
RETURN ON CAPITAL (ROC)
|
|||||||
Adjusted
operating profit (a)
|
$
|
352
|
$
|
300
|
|||
Less:
adjusted taxes (a)
|
(83
|
)
|
(66
|
)
|
|||
Less:
tax benefit on interest expense (b)
|
(10
|
)
|
(11
|
)
|
|||
Add:
equity income
|
2
|
4
|
|||||
$
|
261
|
$
|
227
|
||||
Beginning
capital
|
$
|
7,551
|
$
|
7,358
|
|||
Ending
capital
|
$
|
7,740
|
$
|
7,321
|
|||
Average
capital
|
$
|
7,646
|
$
|
7,340
|
|||
ROC
%
|
3.4
|
%
|
3.1
|
%
|
|||
ROC
% (annualized)
|
13.7
|
%
|
12.4
|
%
|
(a)
2005 amounts have been adjusted to include pro forma stock option
expense
of $9 million, $6 million net of tax.
|
(b)
Tax benefit on interest expense is based on Praxair’s underlying effective
tax rates of 26.5% for 2006 and 26% for 2005.
|
(a) |
Based
on an evaluation of the effectiveness of Praxair’s disclosure controls and
procedures (the “Evaluation”), which evaluation 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.
|
(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.
|
Praxair,
Inc. and Subsidiaries
|
Period
|
Total
Number of Shares Purchased
|
Average
Price Paid
Per
Share
|
Total
Number of Shares Purchased as Part of Publicly Announced Plans or
Programs(1)
|
Maximum
Number of Shares that May Yet be Purchased Under the
Program(2)
|
|||||||||
(Thousands)
|
(Thousands)
|
||||||||||||
January
2006
|
100
|
$
|
52.22
|
100
|
N/A
|
||||||||
February
2006
|
1,000
|
51.90
|
1,000
|
N/A
|
|||||||||
March
2006
|
615
|
55.62
|
615
|
N/A
|
|||||||||
First
Quarter 2006
|
1,715
|
$
|
53.25
|
1,715
|
N/A
|
(1)
|
On
January 20, 1997, the company’s Board of Directors approved a share
repurchase program which authorized the company to repurchase shares
of
its common stock from time to time, either directly or through agents,
in
the open market at prices and on terms satisfactory to the company
in
order to offset some or all of such shares issued pursuant to the
company’s employee benefit plans and its Dividend Reinvestment and Stock
Purchase Plan. The company announced this program on January 21,
1997. The
program has no expiration date.
|
(2)
|
The
Board-approved program does not contain any quantitative limit on
the
total number of shares, or dollar value, that may be purchased.
|
Nominee
|
Votes
for
|
Votes
withheld
|
||
Stephen
F. Angel
|
272,073,345
|
9,583,502
|
||
Claire
W. Gargalli
|
271,979,887
|
9,676,960
|
||
G.
Jackson Ratcliffe, Jr.
|
271,649,209
|
10,007,638
|
||
Dennis
H. Reilley
|
271,546,948
|
10,109,899
|
(a) |
Exhibits:
|
Computation
of Ratio of Earnings to Fixed
Charges
|
Rule
13a-14(a) Certification
|
Rule
13a-14(a) Certification
|
Section
1350 Certification (such certifications are furnished for the information
of the Commission and shall not be deemed incorporated by reference
into
any filing under the Securities Act or the Exchange
Act)
|
Section
1350 Certification (such certifications are furnished for the information
of the Commission and shall not be deemed incorporated by reference
into
any filing under the Securities Act or the Exchange
Act)
|
Praxair,
Inc. and Subsidiaries
|
PRAXAIR,
INC.
|
||
(Registrant)
|
||
Date:
April 26, 2006
|
By: /s/
Patrick M. Clark
|
|
Patrick
M. Clark
|
||
Vice President
and Controller
|
||
(On
behalf of the Registrant
|
||
and
as Chief Accounting Officer)
|