FORM 10Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
---------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
---------- ----------
Commission File Number 1-11037
-------
Praxair, Inc.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 06-1249050
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) 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
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No [ ]
At March 31, 1998, 157,806,783 shares of common stock ($.01 par value) of the
Registrant were outstanding.
<PAGE>
Forward-looking statements
--------------------------
The forward-looking statements contained in this document concerning, among
other things, projected capital spending, continuation of acquisition
activities in the packaged gases and surface technologies businesses, tax
planning initiatives and effective tax rates, impacts in Brazil related to
currency and a change in functional currency, impacts from currency and
economic developments in Asia, and the timing, proceeds and other terms of the
disposition of assets held for sale involve risks and uncertainties, and are
subject to change based on various factors, including the impact of changes in
worldwide and national economies, pricing fluctuations in foreign currencies,
changes in interest rates, the continued timely development and acceptance of
new products and processes, the impact of competitive products and pricing, the
ability to continue to develop potential acquisition opportunities, and the
impact of tax and other legislation and regulation in the jurisdictions in
which the Company operates.
<PAGE>
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statement of Income - Praxair, Inc. and Subsidiaries
Quarter Ended March 31, 1998 and 1997 (Unaudited)
Condensed Consolidated Balance Sheet - Praxair, Inc. and Subsidiaries
March 31, 1998 (Unaudited) and December 31, 1997
Condensed Consolidated Statement of Cash Flows - Praxair, Inc. and
Subsidiaries Quarter Ended March 31, 1998 and 1997 (Unaudited)
Notes to Condensed Consolidated Financial Statements - Praxair, Inc.
and Subsidiaries (Unaudited)
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk (refer
to the Market Risks and Sensitivity Analyses in the Management's
Discussion and Analysis section of Praxair's 1997 Annual Report)
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
Item 6. Exhibits and Reports on Form 8-K
Signature
Exhibit Index
PART I. FINANCIAL INFORMATION
<PAGE>
ITEM 1. FINANCIAL STATEMENTS
PRAXAIR, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
(Millions of dollars, except per share data)
Quarter Ended
March 31
----------------
1998 1997
------- -------
SALES ..................................... $1,201 $1,158
Cost of sales, exclusive of
depreciation and amortization ........... 697 665
Selling, general and administrative ....... 167 167
Depreciation and amortization ............. 115 110
Research and development .................. 19 19
Other income-net .......................... 11 10
------- -------
OPERATING PROFIT .......................... 214 207
Interest expense .......................... 65 51
------- -------
INCOME BEFORE INCOME TAXES ................ 149 156
Income taxes .............................. 38 39
------- -------
INCOME OF CONSOLIDATED ENTITIES ........... 111 117
Minority interests ........................ (13) (17)
Income from equity investments ............ 4 2
------- -------
NET INCOME ................................ $ 102 $ 102
PER SHARE DATA:
Basic earnings per share .................. $ 0.65 $ 0.65
Diluted earnings per share................. $ 0.62 $ 0.62
Cash dividends per share .................. $ 0.125 $ 0.11
WEIGHTED AVERAGE SHARES OUTSTANDING (000'S):
Basic shares outstanding .................. 158,058 158,128
Diluted shares outstanding ................ 163,236 164,332
The accompanying notes are an integral part of these financial statements.
<PAGE>
PRAXAIR, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(Millions of dollars)
March 31,
1998 December 31,
(Unaudited) 1997
----------- ------------
ASSETS
Cash and cash equivalents ....................... $ 36 $ 43
Accounts receivable ............................. 993 971
Inventories ..................................... 321 329
Prepaid and other ............................... 169 154
-------- --------
TOTAL CURRENT ASSETS ....................... 1,519 1,497
Property, plant and equipment-net ............... 4,686 4,607
Other assets .................................... 1,788 1,706
-------- --------
TOTAL ASSETS ............................... $ 7,993 $ 7,810
LIABILITIES AND EQUITY
Accounts payable ................................ $ 376 $ 383
Short-term debt ................................. 401 391
Current portion of long-term debt ............... 35 40
Other current liabilities ....................... 531 552
-------- --------
TOTAL CURRENT LIABILITIES .................. 1,343 1,366
Long-term debt .................................. 3,013 2,874
Other long-term obligations ..................... 936 852
-------- --------
TOTAL LIABILITIES .......................... 5,292 5,092
Minority interests .............................. 483 521
Preferred stock ................................. 75 75
Shareholders' equity ............................ 2,143 2,122
-------- --------
TOTAL LIABILITIES AND EQUITY ............... $ 7,993 $ 7,810
The accompanying notes are an integral part of these financial statements.
<PAGE>
PRAXAIR, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
(Millions of dollars)
Quarter ended March 31,
-------------------------
1998 1997
----------- -----------
OPERATIONS
Net income ..................................... $ 102 $ 102
Adjustments:
Depreciation and amortization ................ 115 110
Special charges .............................. (2) (8)
Deferred income taxes ........................ 29 4
Gain on sale of fixed assets ................. - 1
Working capital .............................. (71) (146)
Long-term assets and liabilities ............. (35) (13)
Other non-cash charges ....................... 2 10
------- -------
Net cash provided by operating activities .. 140 60
------- -------
INVESTING
Construction ................................... (171) (200)
Acquisitions ................................... (160) (22)
Divestitures and asset sales ................... 12 13
-------- --------
Net cash used for investing activities ..... (319) (209)
-------- --------
FINANCING
Short-term borrowings-net ...................... 10 102
Long-term borrowings ........................... 157 35
Long-term debt repayments ...................... (22) (19)
Minority transactions and other ................ 22 56
Issuances of common stock ...................... 52 40
Purchases of common stock ...................... (27) (39)
Cash dividends ................................. (20) (18)
-------- --------
Net cash provided by financing activities .. 172 157
-------- --------
Effect of exchange rate changes on cash and
cash equivalents ............................... - (1)
-------- --------
Change in cash and cash equivalents .............. (7) 7
Cash and cash equivalents beginning-of-year....... 43 63
-------- --------
Cash and cash equivalents end-of-period .......... $ 36 $ 70
Supplemental data:
Effect of functional currency change (Note 2) .... $ 81 $ -
The accompanying notes are an integral part of these financial statements.
<PAGE>
PRAXAIR, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. 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. These adjustments consisted of only normal recurring
adjustments. The accompanying condensed consolidated financial statements
should be read in conjunction with the Notes to the Financial Statements
of Praxair, Inc. and subsidiaries in Praxair's 1997 Annual Report.
Certain prior years' amounts have been reclassified to conform to the
current years' presentation.
2. Accounting Matters
FUNCTIONAL CURRENCY CHANGE IN BRAZIL - As required by accounting
standards, effective January 1, 1998 Brazil is no longer a
hyperinflationary economy. Accordingly, Praxair's majority owned
subsidiary (SA White Martins) designated the Brazilian Real as its
functional currency instead of the U.S. Dollar. The effect of this change
was to increase Operating profit and interest expense by approximately $5
million for the quarter ended March 31, 1998. The impact on taxes and net
income was not significant. This change also required Praxair to record a
one-time cumulative adjustment for additional deferred income taxes of $81
million with offsetting balance sheet reductions to the cumulative
translation component of Shareholders' equity and Minority interests of
$57 million and $24 million, respectively.
COMPREHENSIVE INCOME - Effective January 1, 1998, Praxair adopted
Statement of Financial Accounting Standards No. 130, Reporting
Comprehensive Income. The adoption produced no effect on the Company's
financial position, cash flows, or results of operations. Comprehensive
income has been disclosed in Note 5.
3. Special Charges
At March 31, 1998, the remaining accrual balance related to 1996 and 1997
Special charges was $24 million (see Note 3 to Praxair's 1997 consolidated
financial statements).
4. Inventories
The following is a summary of Praxair's consolidated inventories:
(Millions of dollars)
March 31,
1998 December 31,
(Unaudited) 1997
----------- ------------
Raw materials and supplies...... $ 109 $ 120
Work in process................. 43 48
Finished goods.................. 169 161
------ ------
$ 321 $ 329
<PAGE>
5. Shareholders' Equity
Changes in Shareholders' Equity were as follows:
(Thousands of shares)
Common Treasury
Stock Issued Stock
------------ ---------
Balance, January 1, 1998................ 159,970 2,596
Common stock activity (a) .............. 415 (18)
--------- --------
Balance, March 31, 1998................. 160,385 2,578
(Millions of dollars) Accumulated
Additional Other
Common Paid-In Treasury Retained Comprehensive
Stock Capital Stock Earnings Income Total
------ ---------- -------- -------- ----------- ------
Balance, January 1, 1998 .. $ 2 $1,471 $(129) $1,034 $(256) $2,122
Net income ................ 102 102
Translation adjustments ... (29) (29)
Effect of functional
currency change (Note 2). (57) (57)
-------
Comprehensive income (b). $ 16
Dividends - common stock... (20) (20)
Common stock activity (a).. 21 4 25
--- ------ ------ ------- ------ -------
Balance, March 31, 1998 ... $ 2 $1,492 $(125) $1,116 $(342) $2,143
=== ====== ====== ====== ====== =======
(a) Relates to issuances of common stock for the Dividend Reinvestment and
Stock Purchase Plan, employee savings and incentive plans, and
issuances/purchases of common stock.
(b) Comprehensive income for the quarter ended March 31, 1997 was $53 million.
During the quarter ended March 31, 1998, Praxair granted options for
833,225 shares of common stock having option prices ranging from $40.56
to $47.00 per share, the closing market price of Praxair's common stock on
the day of the grants. At March 31, 1998 there were 11,449,204 shares
under option at prices ranging from $9.80 to $56.13 per share (weighted
average of $26.51) of which options for 7,529,564 shares were exercisable
at prices ranging from $9.80 to $46.50 per share (weighted average of
$16.95). During the quarter ended March 31, 1998, 272,970 options were
exercised.
<PAGE>
6 Debt and Financial Instruments
Debt - The following is a summary of Praxair's outstanding debt at March
31, 1998 and December 31, 1997:
(Millions of dollars) March 31,
1998 December 31,
(Unaudited) 1997
----------- ------------
Short-term:
Canadian borrowings.................... $ 137 $ 84
South American borrowings.............. 191 268
Other borrowings....................... 73 39
------- -------
Total Short-term Debt.................... 401 391
Long-term:
U.S.:
Commercial paper and US bank borrowings. $1,005 $ 860
6.25% Notes due 2000................... 75 75
6.70% Notes due 2001................... 250 250
6.625% Notes due 2003................... 75 75
6.75% Notes due 2003................... 300 300
6.85% Notes due 2005................... 150 150
6.90% Notes due 2006................... 250 250
6.625% Notes due 2007................... 250 250
8.70% Debentures due 2022
(Redeemable after 2002).......... 300 300
Other borrowings........................ 59 57
Canadian subsidiary borrowings............ 161 160
South American subsidiary borrowings...... 123 136
Other International borrowings............ 50 51
------- -------
3,048 2,914
Less: Current portion of long-term debt .. 35 40
------- -------
Total Long-term Debt...................... 3,013 2,874
------- -------
Total Debt................................ $3,449 $3,305
======= =======
At March 31, 1998, $1,005 million of short-term borrowings have been
classified as long term ($860 million at December 31, 1997) 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 its $1.5 billion credit
agreement.
On April 2, 1998, Praxair issued $250 million of 6.15% non-redeemable
Notes due 2003 with interest payable semi-annually. The proceeds from the
Notes were used to repay outstanding commercial paper and for other
general corporate purposes.
<PAGE>
Financial Instruments - The following table is a summary of the notional
amount of interest rate swap agreements at March 31, 1998:
(Millions of dollars) March 31,
1998
(Unaudited)(a)
-------------
Maturing within one year:
Fixed Rate Swaps .................... $955
Floating Rate Swaps ................. $150
Forward Starting Fixed Rate Swaps ... $ 70
Maturing 2001:
Fixed Rate Swaps .................... $ 80
(a) Additionally, at March 31, 1998, there are $300 million notional value of
fixed rate swaps that effectively offset $300 million notional value of
floating rate swaps through June 1998. At December 31, 1997 these
offsetting contracts were forward starting.
At March 31, 1998, Praxair had $337 million of currency exchange forward
contracts outstanding primarily to hedge balance sheet exposures.
Additionally, there are $213 million notional value of currency exchange
contracts that effectively offset. These contracts all mature within one
year.
7. Earnings Per Share
Basic earnings per share is computed by dividing net income for the period
by the weighted average number of Praxair common shares outstanding.
Diluted earnings per share is computed by dividing net income for the
period by the weighted average number of Praxair common shares outstanding
and dilutive common stock equivalents. The difference between the number
of shares used in the basic earnings per share calculation is due to the
dilutive effect of outstanding stock options.
<PAGE>
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Consolidated Results
(Millions of dollars, except percent)
Percent
Quarter Ended March 31, 1998 1997 Change
- -------------------------------------- ------ -------- ---------
Sales................................. $1,201 $1,158 + 4%
Selling, general and administrative... $ 167 $ 167 -
Depreciation and amortization......... $ 115 $ 110 + 5%
Operating profit...................... $ 214 $ 207 + 3%
Interest expense...................... $ 65 $ 51 + 27%
Effective tax rate.................... 25% 25% -
Net income............................ $ 102 $ 102 -
The sales growth of 4% for the quarter was predominately due to increased sales
volumes, the effect of newly acquired packaged gases and Surface Technologies
subsidiaries partly offset by unfavorable currency effects, lower plant sales
and unfavorable pricing. Surface Technologies posted record sales, increasing
approximately 10% for the quarter primarily due to volume growth and
acquisitions.
The sales growth along with productivity gains and the effect of the functional
currency change in Brazil (see Note 2) were primarily responsible for the
increase in Operating profit to $214 million. Increased depreciation and
amortization reflected new projects coming on-stream, as well as packaged gases
and Surface Technologies acquisitions. Selling, general and administrative
expenses were flat due to the effects of productivity improvements offset by
new packaged gases and Surface Technologies acquisitions, and cost inflation.
Interest expense increased due to higher debt levels and the effect of the
functional currency change in Brazil. The effective tax rate for the quarter
was 25%, flat as compared to the 1997 effective tax rate.
Net Income for the quarter was flat as compared to the 1997 period due
principally to higher operating profit offset by the increased interest
expense.
The number of employees at March 31, 1998 was approximately 26,000 which, when
adjusted for acquisitions, reflects a decrease of approximately 250 from
December 31, 1997. The decrease is principally the result of productivity
improvement initiatives in South America, Europe and the North American
packaged gases business partially offset by the addition of employees to
support volume growth.
<PAGE>
Segment Discussion
This summary of Sales and Operating profit by geographic segment provides a
basis for the discussion that follows:
(Millions of dollars)
Quarter Ended March 31,
1998 1997
----- -----
SALES
United States.................... $ 627 $ 588
South America.................... 246 248
Europe........................... 156 150
Canada, Mexico, Asia and Other... 172 172
------- -------
$1,201 $1,158
(Millions of dollars)
Quarter Ended March 31,
1998 1997
----- -----
OPERATING PROFIT
United States.................... $ 122 $ 112
South America.................... 46 52
Europe........................... 30 29
Canada, Mexico, Asia and Other... 22 20
Corporate........................ (6) (6)
------- -------
$ 214 $ 207
United States
- -------------
Strong volume growth (6%) and the effect of newly acquired packaged gases
subsidiaries (6%) partly offset by unfavorable pricing and lower plant sales
accounted for the sales increase for the quarter ended March 31, 1998 as
compared to the 1997 period.
Operating profit improved 9% for the quarter with the operating margin
increasing to 19.5% from 19.0% in 1997. The improvement is due primarily to
the increased sales, acquisitions, and the benefits of productivity improvement
initiatives.
South America
- -------------
Sales for the quarter ended March 31, 1998 decreased 1% primarily due to
unfavorable currency effects and pricing which were largely offset by strong
sales volume growth. Excluding the currency effects for the quarter ended
March 31, 1998, sales increased by 6%.
Operating profit for the quarter ended March 31, 1998 decreased $5 million, or
10%, compared to the first quarter 1997 after excluding unfavorable currency
effects and the positive impact of the functional currency change in Brazil
(see Note 2). This was due to cost inflation which was partly offset by
productivity improvement initiatives.
<PAGE>
Europe
- ------
Sales for the quarter ended March 31, 1998 increased 4% as compared to the
first quarter of 1997 due primarily to volume increases and sales associated
with Surface Technologies acquisitions, partly offset by currency effects and
lower pricing. Excluding the currency effects for the quarter ended March 31,
1998, sales increased by 13%.
Operating profit for the quarter ended March 31, 1998 was consistent with the
first quarter of 1997. Excluding the currency effects for the quarter ended
March 31, 1998, operating profit increased 10% primarily due to volume growth
and Surface Technologies acquisitions.
Canada, Mexico, Asia and Other
- ------------------------------
Sales for the quarter ended March 31, 1998 were flat as compared to the 1997
period due to the offsetting effects of volume growth (primarily in Mexico and
Asia), pricing improvement in Mexico and unfavorable currency effects
(primarily in Asia). Excluding the currency effects for the quarter ended
March 31, 1998, sales increased by 13%.
Operating Profit for the quarter ended March 31, 1998 increased by 10% as
compared to the first quarter of 1997. Excluding the currency effects for the
quarter ended March 31, 1998, operating profit increased by 20% reflecting the
strong sales growth and the impact of productivity initiatives (primarily in
Canada).
<PAGE>
Liquidity, Capital Resources and Other Financial Data
Cash Flow From Operations
- -------------------------
Cash flow from operations in the first quarter of 1998 increased from $60
million to $140 million, primarily due to lower working capital requirements.
Payments made in the first quarter of 1997 for pre-1997 incentive compensation
programs was the primary reason for the working capital improvement.
Investing
- ---------
Cash flow used for investing in the first quarter of 1998 totaled $319 million,
an increase of $110 million from the 1997 quarter. This increase was due
primarily to higher acquisition expenditures partly offset by lower
construction expenditures.
Construction expenditures for the first quarter of 1998 totaled $171 million,
down $29 million from the corresponding quarter in 1997, largely due to the
timing of cash payments.
Acquisition expenditures for the first quarter of 1998 totaled $160 million, an
increase of $138 million from the 1997 quarter. This increase is primarily
related to the purchase of the remaining shares outstanding of GasTech, Inc. a
U.S. packaged gases distributor (previously an equity investment), and other
investments related to the U.S. packaged gases business, a joint venture in
India, and buy-outs of minority interests in South America and Canada.
On a worldwide basis, construction and investment expenditures for the full
year 1998 are still expected to be approximately $1 billion primarily from
growth opportunities in the United States, South America, Europe and Asia and
the continuation of Praxair's packaged gases and Surface Technologies
acquisition strategies.
Financing
- ---------
At March 31, 1998, Praxair's total debt outstanding was $3,449 million, an
increase of $144 million versus December 31, 1997. This increase in debt was
needed primarily to finance the first quarter acquisitions. As of March 31,
1998, there were no borrowings under Praxair's $1.5 billion U.S. bank credit
facility.
On April 2, 1998, Praxair issued $250 million of 6.15% non-redeemable Notes due
2003 with interest payable semi-annually. The proceeds from the Notes were used
to repay outstanding commercial paper and for other general corporate purposes.
Praxair's debt-to-capital ratio increased from 54.9% at December 31, 1997 to
56.1% at March 31, 1998. This increase is due to a combination of the higher
debt levels required to finance the first quarter acquisitions and the effect
of the functional currency change in Brazil which reduced Praxair's
Shareholders' equity and Minority interests (see Note 2).
Recently Issued Accounting Standard on Comprehensive Income
See Note 2 to the condensed consolidated financial statements.
<PAGE>
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
The Annual Meeting of the Shareholders of Praxair, Inc. was held on April 28,
1998. At that meeting, four directors were elected. The vote was as follows:
Election of Directors:
NOMINEE VOTES FOR VOTES WITHHELD
- ------------------------- ----------- --------------
Alejandro Achaval 134,950,192 1,283,065
Ronald L. Kuehn, Jr. 134,915,309 1,317,948
H. William Lichtenberger 134,916,121 1,317,136
H. Mitchell Watson, Jr. 134,916,899 1,316,358
In addition to the foregoing elected directors, the terms of office for the
following individuals continue after the meeting:
John A. Clerico
C. Fred Fetterolf
Dale F. Frey
Claire W. Gargalli
Edgar G. Hotard
Raymond W. LeBoeuf
Benjamin F. Payton
G. Jackson Ratcliffe, Jr.
Item 6. Exhibits and Reports on Form 8-K
Exhibits
27. Financial Data Schedule
Reports on Form 8-K
As a result of the new accounting standard regarding earnings per share
(Statement of Financial Accounting Standards No. 128), a report on Form 8-K
dated April 1, 1998 was filed in order to retroactively restate the
Corporation's earnings per share information included in Financial Data
Schedules filed with Forms 10Q and 10K, as applicable, for the periods ended
June 30, 1996, September 30, 1996, December 31, 1996, March 31, 1997, June 30,
1997, and September 30, 1997. The Form 8-K also included Financial Data
Schedules for the periods ended December 31, 1995 and March 31, 1996.
<PAGE>
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PRAXAIR, INC.
-------------
(Registrant)
Date: May 8, 1998 By: /s/J. Robert Vipond
------------------------ -----------------------------
J. Robert Vipond
Vice President and Controller
(On behalf of the Registrant
and as Chief Accounting Officer)
<PAGE>
Exhibit Index
-------------
Exhibit No.
- -----------------------------------------------------------------------------
27. Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Financial Data Schedule - Exhibit 27
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 36
<SECURITIES> 0
<RECEIVABLES> 1019
<ALLOWANCES> 26
<INVENTORY> 321
<CURRENT-ASSETS> 1519
<PP&E> 8356
<DEPRECIATION> 3670
<TOTAL-ASSETS> 7993
<CURRENT-LIABILITIES> 1343
<BONDS> 3013
75
0
<COMMON> 2
<OTHER-SE> 2141
<TOTAL-LIABILITY-AND-EQUITY> 7993
<SALES> 1201
<TOTAL-REVENUES> 1201
<CGS> 697<F1>
<TOTAL-COSTS> 697<F1>
<OTHER-EXPENSES> 115<F1>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 65
<INCOME-PRETAX> 149
<INCOME-TAX> 38
<INCOME-CONTINUING> 111
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 102
<EPS-PRIMARY> .65<F2>
<EPS-DILUTED> .62<F2>
<FN>
<F1>Cost of goods sold and total costs are exclusive of depreciation and
amortization which is shown on the other expense line in the Financial Data
Schedule.
<F2>Effective in 1997, SFAS No. 128 established new standards for computing and
presenting earnings per share (EPS). In the Financial Data Schedule, Praxair's
Basic EPS is presented on the "EPS-Primary" line and Diluted EPS is presented
on the "EPS-Diluted" line. Diluted EPS is consistent with Praxair's previously
disclosed amounts.
</FN>
</TABLE>
