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8-K - PRAXAIR, INC. 8-K - PRAXAIR INC | a50616772.htm |
Exhibit 99.1
Praxair Reports First-Quarter 2013 Results
- First-quarter sales of $2.9 billion; adjusted diluted EPS of $1.38*
- Completed acquisition of NuCO2 micro-bulk carbon dioxide business
- Announced signing of North West Redwater energy project, supply of 2,000 tons per day of oxygen in Alberta; project development activity remains solid
- Adjusted diluted EPS guidance: 2013 full-year $5.90 to $6.05* and 2Q13 $1.45 to $1.50
DANBURY, Conn.--(BUSINESS WIRE)--April 24, 2013--Praxair, Inc. (NYSE: PX) reported first-quarter net income and diluted earnings per share of $391 million and $1.30, respectively. These results include the impact of a $23 million pre-tax charge, or 8 cents of diluted earnings per share, related to currency devaluation in Venezuela. Excluding this charge, adjusted net income and earnings per share were $414 million and $1.38, respectively.*
Sales in the first quarter were $2,888 million, an increase of 2% compared to the prior-year quarter. On a comparable basis, sales grew 4%, excluding foreign currency, cost pass-through and fewer working days. Sales growth was driven by Asia and South America. Growth moderated in North America and weakened further in Europe.
Reported operating profit in the first quarter was $600 million. Adjusted operating profit was $623 million, 1% below the prior-year quarter. Excluding currency and day count effects, adjusted operating profit rose modestly driven by price, productivity gains and acquisitions. Adjusted operating profit as a percentage of sales was 21.6%.*
First-quarter cash flow from operations was $472 million and capital spending was $466 million, primarily for new production plants under long-term contracts with customers. Acquisition expenditures were $1,098 million, related primarily to the acquisition of NuCO2. The company paid dividends of $178 million and repurchased $117 million of stock, net of issuances. During the quarter, the company issued $400 million of 3-year notes at 0.75%, $500 million of 5-year notes at 1.2% and $500 million of 10-year notes at 2.7%. The after-tax return-on-capital and return on equity for the quarter were 13.3% and 28.1%, respectively.*
Commenting on the financial results and business outlook, Chairman and Chief Executive Officer Steve Angel said, “During the first quarter, Praxair saw varied growth rates across our geographic segments. Our Asia business grew sales at double-digit rates in China and Korea, due primarily to project start-ups. Sales in Brazil improved in March driven by manufacturing and construction. North American sales reflect solid underlying fundamentals with some deceleration of the growth rate.
For the balance of the year, we expect base volumes to grow modestly given the current uncertainty in the macro-economic environment. Additionally, we will be starting up several large hydrogen projects as well as a number of air separation plants that will contribute to earnings growth.”
For the second quarter of 2013, Praxair expects diluted earnings per share in the range of $1.45 to $1.50.
For the full year of 2013, Praxair expects sales in the area of $12 billion. The company expects adjusted diluted earnings per share to be in the range of $5.90 to $6.05. Full-year capital expenditures are expected to be in the range of $1.8 to $2.0 billion, and the adjusted effective tax rate is forecasted to remain at about 28%.*
Following is additional detail on first-quarter 2013 results by segment.
In North America, first-quarter sales were $1,457 million, 4% above the prior-year quarter. Acquisitions of packaged gas distributors and NuCO2, a United States micro-bulk carbon dioxide provider, contributed 3% growth. Base business sales were steady as higher pricing was offset by lower volumes, primarily due to fewer selling days in the quarter. Total sales growth was strongest to energy, manufacturing and food & beverage customers. Operating profit was $358 million.
In Europe, first-quarter sales were $370 million, down 2% versus the respective 2012 period. Sales were negatively impacted by lower industrial economic activity resulting in lower packaged gases volumes in Spain and Italy. Operating profit was $62 million in the quarter, as compared to $68 million in the prior-year quarter, primarily due to lower volumes.
In South America, first-quarter sales were $531 million. Sales grew 3% from the prior-year quarter, excluding a 10% negative currency impact, primarily due to higher volumes and price. Operating profit was $114 million as compared to $115 million in the prior-year period due to higher volumes and pricing offset by negative currency translation.
Sales in Asia were $367 million in the quarter, up 10% from the prior year driven by volume growth in India, China, Korea and Thailand. Sales growth came primarily from metals and chemicals customers. Operating profit was $63 million, as compared to $57 million in the prior year, due primarily to higher volumes.
Praxair Surface Technologies had first-quarter sales of $163 million as compared to $169 million in the prior-year quarter. Sales decreased 4%, primarily from lower sales of industrial and military aviation coatings. Operating profit was $26 million as higher price and productivity benefits offset the impact of weaker volumes.
About Praxair
Praxair, Inc. (NYSE: PX), is the largest industrial gases company in North and South America, and one of the largest worldwide, with 2012 sales of $11 billion. The company produces, sells and distributes atmospheric, process and specialty gases, and high-performance surface coatings. Praxair products, services and technologies are making 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, metals and others. More information on Praxair, Inc. is available on the Internet at www.praxair.com.
*See the attachments for calculations of non-GAAP measures. First-quarter 2013 results are adjusted to exclude a charge of $23 million, or 8 cents per diluted share, related to the Venezuela currency devaluation. Guidance for adjusted diluted earnings per share for the full year 2013 excludes the Venezuelan currency devaluation and the impact of any pension settlement charges expected to be recorded in the third quarter.
Attachments: Non-GAAP Reconciliations, Statements of Income, Balance Sheets, Statements of Cash Flows, Segment Information, Quarterly Financial Summary, and Appendix: Non-GAAP Measures.
A teleconference on Praxair’s first-quarter results is being held this morning, April 24, at 11:00 a.m. Eastern Time. The number is (617) 213-8831 -- Passcode: 19538377. The call also is available as a web cast at www.praxair.com/investors. Materials to be used in the teleconference are also available.
This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management’s reasonable expectations and assumptions as of the date the statements are made but involve risks and uncertainties. These risks and uncertainties include, without limitation: the performance of stock markets generally; developments in worldwide and national economies and other international events and circumstances; changes in foreign currencies and in interest rates; the cost and availability of electric power, natural gas and other raw materials; the ability to achieve price increases to offset cost increases; catastrophic events including natural disasters, epidemics and acts of war and terrorism; the ability to attract, hire, and retain qualified personnel; the impact of changes in financial accounting standards; the impact of changes in pension plan liabilities; the impact of tax, environmental, healthcare and other legislation and government regulation in jurisdictions in which the company operates; the cost and outcomes of investigations, litigation and regulatory proceedings; continued timely development and market acceptance of new products and applications; the impact of competitive products and pricing; future financial and operating performance of major customers and industries served; the impact of information technology system failures, network disruptions and breaches in data security; and the effectiveness and speed of integrating new acquisitions into the business. These risks and uncertainties may cause actual future results or circumstances to differ materially from the projections or estimates contained in the forward-looking statements. Additionally, financial projections or estimates exclude the impact of special items which the company believes are not indicative of ongoing business performance. The company assumes no obligation to update or provide revisions to any forward-looking statement in response to changing circumstances. The above listed risks and uncertainties are further described in Item 1A (Risk Factors) in the company’s Form 10-K and 10-Q reports filed with the SEC which should be reviewed carefully. Please consider the company’s forward-looking statements in light of those risks.
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PRAXAIR, INC. AND SUBSIDIARIES |
NON-GAAP RECONCILIATIONS |
(UNAUDITED) |
The following Non-GAAP measures 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 of on-going business trends are excluded from these calculations so that investors can better evaluate and analyze historical and future business trends on a consistent basis. Definitions of these non-GAAP measures may not be comparable to similar definitions used by other companies and are not a substitute for similar GAAP measures. |
(Millions of dollars, except per share amounts) | |||||||||||||||||||||||||||||||||||||
Operating Profit | Income Taxes |
Net Income - Praxair, Inc. |
Diluted EPS | ||||||||||||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||||||||||
Quarter Ended March 31, |
|||||||||||||||||||||||||||||||||||||
Reported GAAP amounts | $ | 600 | $ | 627 | $ | 164 | $ | 165 | $ | 391 | $ | 419 | $ | 1.30 | $ | 1.38 | |||||||||||||||||||||
Non-GAAP adjustments: | |||||||||||||||||||||||||||||||||||||
Venezuela currency devaluation (a) | $ | 23 | $ | - | $ | - | $ | - | $ | 23 | $ | - | $ | 0.08 | $ | - | |||||||||||||||||||||
Total adjustments | 23 | - | - | - | 23 | - | 0.08 | - | |||||||||||||||||||||||||||||
Adjusted amounts | $ | 623 | $ | 627 | $ | 164 | $ | 165 | $ | 414 | $ | 419 | $ | 1.38 | $ | 1.38 | |||||||||||||||||||||
(a) |
Charge in the first quarter of 2013 related to the Venezuela currency devaluation. |
|
PRAXAIR, INC. AND SUBSIDIARIES | |||||||||||||
CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||
(Millions of dollars, except per share data) | |||||||||||||
(UNAUDITED) | |||||||||||||
Quarter Ended | |||||||||||||
March 31, | |||||||||||||
2013 | 2012 | ||||||||||||
SALES | $ | 2,888 | $ | 2,840 | |||||||||
Cost of sales | 1,638 | 1,616 | |||||||||||
Selling, general and administrative | 337 | 335 | |||||||||||
Depreciation and amortization | 266 | 252 | |||||||||||
Research and development | 24 | 24 | |||||||||||
Venezuela currency devaluation (a) | 23 | - | |||||||||||
Other income (expense) - net | - | 14 | |||||||||||
OPERATING PROFIT | 600 | 627 | |||||||||||
Interest expense - net | 40 | 37 | |||||||||||
INCOME BEFORE INCOME TAXES AND EQUITY INVESTMENTS | 560 | 590 | |||||||||||
Income taxes | 164 | 165 | |||||||||||
INCOME BEFORE EQUITY INVESTMENTS | 396 | 425 | |||||||||||
Income from equity investments | 10 | 7 | |||||||||||
NET INCOME (INCLUDING NONCONTROLLING INTERESTS) | 406 | 432 | |||||||||||
Less: noncontrolling interests | (15 | ) | (13 | ) | |||||||||
NET INCOME - PRAXAIR, INC. | $ | 391 | $ | 419 | |||||||||
PER SHARE DATA - PRAXAIR, INC. SHAREHOLDERS | |||||||||||||
Basic earnings per share | $ | 1.32 | $ | 1.40 | |||||||||
Diluted earnings per share | $ | 1.30 | $ | 1.38 | |||||||||
Cash dividends | $ | 0.60 | $ | 0.55 | |||||||||
WEIGHTED AVERAGE SHARES OUTSTANDING | |||||||||||||
Basic shares outstanding (000's) | 296,604 | 299,077 | |||||||||||
Diluted shares outstanding (000's) | 299,700 | 302,876 | |||||||||||
(a) | The 2013 first quarter includes a charge of $23 million ($23 million after-tax, or $0.08 per diluted share), related to the Venezuela currency devaluation. See appendix for non-GAAP measures which exclude the impact of this charge. |
PRAXAIR, INC. AND SUBSIDIARIES | ||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||||
(Millions of dollars) | ||||||||||||
(UNAUDITED) | ||||||||||||
March 31, | December 31, | |||||||||||
2013 | 2012 | |||||||||||
ASSETS | ||||||||||||
Cash and cash equivalents | $ | 113 | $ | 157 | ||||||||
Accounts receivable - net | 1,994 | 1,834 | ||||||||||
Inventories | 477 | 476 | ||||||||||
Prepaid and other current assets | 345 | 325 | ||||||||||
TOTAL CURRENT ASSETS | 2,929 | 2,792 | ||||||||||
Property, plant and equipment - net | 11,841 | 11,453 | ||||||||||
Goodwill | 3,098 | 2,507 | ||||||||||
Other intangibles - net | 544 | 173 | ||||||||||
Other long-term assets | 1,174 | 1,165 | ||||||||||
TOTAL ASSETS | $ | 19,586 | $ | 18,090 | ||||||||
LIABILITIES AND EQUITY | ||||||||||||
Accounts payable | $ | 907 | $ | 928 | ||||||||
Short-term debt | 579 | 638 | ||||||||||
Current portion of long-term debt | 325 | 39 | ||||||||||
Other current liabilities | 875 | 874 | ||||||||||
TOTAL CURRENT LIABILITIES | 2,686 | 2,479 | ||||||||||
Long-term debt | 7,772 | 6,685 | ||||||||||
Other long-term liabilities | 2,347 | 2,253 | ||||||||||
TOTAL LIABILITIES | 12,805 | 11,417 | ||||||||||
REDEEMABLE NONCONTROLLING INTERESTS | 255 | 252 | ||||||||||
EQUITY | ||||||||||||
Praxair, Inc. shareholders' equity | 6,169 | 6,064 | ||||||||||
Noncontrolling interests | 357 | 357 | ||||||||||
TOTAL EQUITY | 6,526 | 6,421 | ||||||||||
TOTAL LIABILITIES AND EQUITY | $ | 19,586 | $ | 18,090 | ||||||||
PRAXAIR, INC. AND SUBSIDIARIES | |||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||
(Millions of dollars) | |||||||||||||
(UNAUDITED) | |||||||||||||
Quarter Ended | |||||||||||||
March 31, | |||||||||||||
2013 | 2012 | ||||||||||||
OPERATIONS | |||||||||||||
Net income - Praxair, Inc. | $ | 391 | $ | 419 | |||||||||
Noncontrolling interests | 15 | 13 | |||||||||||
Net income (including noncontrolling interests) | 406 | 432 | |||||||||||
Adjustments to reconcile net income to net cash provided | |||||||||||||
by operating activities: | |||||||||||||
Venezuela currency devaluation | 23 | - | |||||||||||
Deferred income taxes | 1 | 69 | |||||||||||
Depreciation and amortization | 266 | 252 | |||||||||||
Accounts receivable | (161 | ) | (143 | ) | |||||||||
Inventory | (16 | ) | (31 | ) | |||||||||
Payables and accruals | - | (95 | ) | ||||||||||
Pension contributions | (5 | ) | (106 | ) | |||||||||
Other | (42 | ) | 24 | ||||||||||
Net cash provided by operating activities | 472 | 402 | |||||||||||
INVESTING | |||||||||||||
Capital expenditures | (466 | ) | (483 | ) | |||||||||
Acquisitions, net of cash acquired | (1,098 | ) | (12 | ) | |||||||||
Divestitures and asset sales | 31 | 64 | |||||||||||
Net cash used for investing activities | (1,533 | ) | (431 | ) | |||||||||
FINANCING | |||||||||||||
Debt increase (decrease) - net | 1,316 | 278 | |||||||||||
Issuances of common stock | 33 | 73 | |||||||||||
Purchases of common stock | (150 | ) | (175 | ) | |||||||||
Cash dividends - Praxair, Inc. shareholders | (178 | ) | (164 | ) | |||||||||
Excess tax benefit on stock option exercises | 14 | 32 | |||||||||||
Noncontrolling interest transactions and other | (5 | ) | - | ||||||||||
Net cash provided by (used for) financing activities | 1,030 | 44 | |||||||||||
Effect of exchange rate changes on cash and cash equivalents | (13 | ) | 2 | ||||||||||
Change in cash and cash equivalents | (44 | ) | 17 | ||||||||||
Cash and cash equivalents, beginning-of-period | 157 | 90 | |||||||||||
Cash and cash equivalents, end-of-period | $ | 113 | $ | 107 | |||||||||
PRAXAIR, INC. AND SUBSIDIARIES SEGMENT INFORMATION (Millions of dollars) (UNAUDITED) |
||||||||||||
Quarter Ended | ||||||||||||
March 31, | ||||||||||||
2013 | 2012 | |||||||||||
SALES | ||||||||||||
North America | $ | 1,457 | $ | 1,398 | ||||||||
Europe | 370 | 377 | ||||||||||
South America | 531 | 562 | ||||||||||
Asia | 367 | 334 | ||||||||||
Surface Technologies | 163 | 169 | ||||||||||
Total sales | $ | 2,888 | $ | 2,840 | ||||||||
OPERATING PROFIT | ||||||||||||
North America | $ | 358 | $ | 361 | ||||||||
Europe | 62 | 68 | ||||||||||
South America | 114 | 115 | ||||||||||
Asia | 63 | 57 | ||||||||||
Surface Technologies | 26 | 26 | ||||||||||
Segment operating profit | 623 | 627 | ||||||||||
Venezuela currency devaluation | (23 | ) | - | |||||||||
Total operating profit | $ | 600 | $ | 627 | ||||||||
PRAXAIR, INC. AND SUBSIDIARIES | ||||||||||||||||||||||||||||
QUARTERLY FINANCIAL SUMMARY | ||||||||||||||||||||||||||||
(Millions of dollars, except per share data) | ||||||||||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||||||
Q1 (b) | Q4 | Q3 (b) | Q2 | Q1 | ||||||||||||||||||||||||
FROM THE INCOME STATEMENT | ||||||||||||||||||||||||||||
Sales | $ | 2,888 | $ | 2,799 | $ | 2,774 | $ | 2,811 | $ | 2,840 | ||||||||||||||||||
Cost of sales | 1,638 | 1,583 | 1,595 | 1,602 | 1,616 | |||||||||||||||||||||||
Selling, general and administrative | 337 | 319 | 306 | 310 | 335 | |||||||||||||||||||||||
Depreciation and amortization | 266 | 254 | 248 | 247 | 252 | |||||||||||||||||||||||
Research and development | 24 | 25 | 24 | 25 | 24 | |||||||||||||||||||||||
Venezuela currency devaluation and other charges | 23 | - | 65 | - | - | |||||||||||||||||||||||
Other income (expenses) - net | - | (2 | ) | 22 | 9 | 14 | ||||||||||||||||||||||
Operating profit | 600 | 616 | 558 | 636 | 627 | |||||||||||||||||||||||
Interest expense - net | 40 | 35 | 36 | 33 | 37 | |||||||||||||||||||||||
Income taxes | 164 | 162 | 90 | 169 | 165 | |||||||||||||||||||||||
Income from equity investments | 10 | 9 | 8 | 10 | 7 | |||||||||||||||||||||||
Net income (including noncontrolling interests) | 406 | 428 | 440 | 444 | 432 | |||||||||||||||||||||||
Less: noncontrolling interests | (15 | ) | (14 | ) | (10 | ) | (15 | ) | (13 | ) | ||||||||||||||||||
Net income - Praxair, Inc. | $ | 391 | $ | 414 | $ | 430 | $ | 429 | $ | 419 | ||||||||||||||||||
PER SHARE DATA - PRAXAIR, INC. SHAREHOLDERS | ||||||||||||||||||||||||||||
Diluted earnings per share | $ | 1.30 | $ | 1.38 | $ | 1.43 | $ | 1.42 | $ | 1.38 | ||||||||||||||||||
Cash dividends per share | $ | 0.60 | $ | 0.55 | $ | 0.55 | $ | 0.55 | $ | 0.55 | ||||||||||||||||||
Diluted weighted average shares outstanding (000's) | 299,700 | 300,224 | 301,731 | 302,492 | 302,876 | |||||||||||||||||||||||
FROM THE BALANCE SHEET | ||||||||||||||||||||||||||||
Net debt (a) | $ | 8,563 | $ | 7,205 | $ | 7,028 | $ | 6,891 | $ | 6,749 | ||||||||||||||||||
Capital (a) | $ | 15,344 | $ | 13,878 | $ | 13,617 | $ | 13,017 | $ | 13,248 | ||||||||||||||||||
Debt-to-capital ratio (a) | 55.8 | % | 51.9 | % | 51.6 | % | 52.9 | % | 50.9 | % | ||||||||||||||||||
FROM THE STATEMENT OF CASH FLOWS | ||||||||||||||||||||||||||||
Cash flow from operations | $ | 472 | $ | 879 | $ | 746 | $ | 725 | $ | 402 | ||||||||||||||||||
Capital expenditures | 466 | 586 | 547 | 564 | 483 | |||||||||||||||||||||||
Acquisitions | 1,098 | 171 | 58 | 39 | 12 | |||||||||||||||||||||||
Cash dividends | 178 | 163 | 164 | 164 | 164 | |||||||||||||||||||||||
OTHER INFORMATION | ||||||||||||||||||||||||||||
After-tax return on capital (ROC) (a) | 13.3 | % | 13.9 | % | 14.2 | % | 14.5 | % | 14.6 | % | ||||||||||||||||||
Return on Praxair, Inc. shareholders' equity (ROE) (a) | 28.1 | % | 28.9 | % | 29.2 | % | 29.0 | % | 28.4 | % | ||||||||||||||||||
Adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) (a) |
$ | 899 | $ | 879 | $ | 879 | $ | 893 | $ | 886 | ||||||||||||||||||
Debt-to-adjusted EBITDA ratio (a) | 2.1 | 1.9 | 1.9 | 1.8 | 1.8 | |||||||||||||||||||||||
Number of employees | 27,380 | 26,539 | 26,215 | 26,353 | 26,259 | |||||||||||||||||||||||
SEGMENT DATA | ||||||||||||||||||||||||||||
SALES | ||||||||||||||||||||||||||||
North America | $ | 1,457 | $ | 1,416 | $ | 1,391 | $ | 1,393 | $ | 1,398 | ||||||||||||||||||
Europe | 370 | 363 | 352 | 382 | 377 | |||||||||||||||||||||||
South America | 531 | 484 | 516 | 520 | 562 | |||||||||||||||||||||||
Asia | 367 | 374 | 358 | 348 | 334 | |||||||||||||||||||||||
Surface Technologies | 163 | 162 | 157 | 168 | 169 | |||||||||||||||||||||||
Total sales | $ | 2,888 | $ | 2,799 | $ | 2,774 | $ | 2,811 | $ | 2,840 | ||||||||||||||||||
OPERATING PROFIT | ||||||||||||||||||||||||||||
North America | $ | 358 | $ | 367 | $ | 374 | $ | 363 | $ | 361 | ||||||||||||||||||
Europe | 62 | 60 | 60 | 68 | 68 | |||||||||||||||||||||||
South America | 114 | 92 | 112 | 110 | 115 | |||||||||||||||||||||||
Asia | 63 | 69 | 52 | 68 | 57 | |||||||||||||||||||||||
Surface Technologies | 26 | 28 | 25 | 27 | 26 | |||||||||||||||||||||||
Segment operating profit | 623 | 616 | 623 | 636 | 627 | |||||||||||||||||||||||
Venezuela currency devaluation and other charges | (23 | ) | - | (65 | ) | - | - | |||||||||||||||||||||
Total operating profit | $ | 600 | $ | 616 | $ | 558 | $ | 636 | $ | 627 | ||||||||||||||||||
(a) | Non-GAAP measure, see Appendix. | |
(b) | The first quarter 2013 includes a charge of $23 million ($23 million after-tax, or $0.08 per diluted share), related to the Venezuela currency devaluation. The third quarter 2012 includes: (i) a pre-tax charge of $56 million ($38 million after-tax and non-controlling interests, or $0.12 per diluted share) related to the 2012 cost reduction program; (ii) a pre-tax charge of $9 million ($6 million after-tax, or $0.02 per diluted share) related to pension settlement; and (iii) an income tax benefit of $55 million, or $0.18 per diluted share related to a loss on liquidated subsidiary as a result of the divestiture of the U.S. Homecare business. | |
PRAXAIR, INC. AND SUBSIDIARIES |
APPENDIX |
NON-GAAP MEASURES |
(Millions of dollars, except per share data) |
The following non-GAAP measures are intended to supplement investors’ understanding of the company’s financial information by providing measures which investors, financial analysts and management use to help evaluate the company’s financing leverage, return on net assets employed and operating performance. Items which the company does not believe to be indicative of on-going business trends are excluded from these calculations so that investors can better evaluate and analyze historical and future business trends on a consistent basis. Definitions of these non-GAAP measures may not be comparable to similar definitions used by other companies and are not a substitute for similar GAAP measures. Adjusted amounts exclude the impact of the 2013 first quarter loss on Venezuela currency devaluation; and the 2012 third quarter cost reduction program, pension settlement charge, and an income tax benefit; and the 2011 fourth quarter gain on acquisition and cost reduction program which helps investors understand underlying performance on a comparable basis. |
2013 | 2012 | 2011 | |||||||||||||||||||||||||||
Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Debt to Capital Ratio - The debt-to-capital ratio is a measure used by investors, financial analysts and management to provide a measure of financial leverage and insights into how the company is financing its operations. |
|||||||||||||||||||||||||||||
Debt | $ 8,676 | $ 7,362 | $ 7,136 | $ 6,995 | $ 6,856 | $ 6,562 | $ 6,310 | $ 6,119 | $ 5,838 | ||||||||||||||||||||
Less: cash and cash equivalents | (113) | (157) | (108) | (104) | (107) | (90) | (125) | (80) | (86) | ||||||||||||||||||||
Net debt | 8,563 | 7,205 | 7,028 | 6,891 | 6,749 | 6,472 | 6,185 | 6,039 | 5,752 | ||||||||||||||||||||
Equity and redeemable noncontrolling interests: | |||||||||||||||||||||||||||||
Redeemable noncontrolling interests | 255 | 252 | 243 | 232 | 232 | 220 | - | - | - | ||||||||||||||||||||
Praxair, Inc. shareholders' equity | 6,169 | 6,064 | 6,015 | 5,615 | 5,940 | 5,488 | 5,753 | 6,400 | 6,165 | ||||||||||||||||||||
Noncontrolling interests | 357 | 357 | 331 | 279 | 327 | 309 | 368 | 370 | 372 | ||||||||||||||||||||
Total equity and redeemable noncontrolling interests | 6,781 | 6,673 | 6,589 | 6,126 | 6,499 | 6,017 | 6,121 | 6,770 | 6,537 | ||||||||||||||||||||
Capital | $ 15,344 | $ 13,878 | $ 13,617 | $ 13,017 | $ 13,248 | $ 12,489 | $ 12,306 | $ 12,809 | $ 12,289 | ||||||||||||||||||||
Debt-to-capital | 55.8% | 51.9% | 51.6% | 52.9% | 50.9% | 51.8% | 50.3% | 47.1% | 46.8% | ||||||||||||||||||||
After -tax return on Capital (ROC) - After-tax return on capital is a measure used by investors, financial analysts and management to evaluate the return on net assets employed in the business. ROC measures the after-tax operating profit that the company was able to generate with the investments made by all parties in the business (debt, noncontrolling interests and Praxair, Inc. shareholders’ equity). |
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Adjusted operating profit (a) | $ 623 | $ 616 | $ 623 | $ 636 | $ 627 | $ 619 | $ 632 | $ 627 | $ 591 | ||||||||||||||||||||
Less: adjusted income taxes (a) | (164) | (162) | (164) | (169) | (165) | (162) | (166) | (163) | (156) | ||||||||||||||||||||
Less: tax benefit on interest expense | (11) | (10) | (10) | (9) | (10) | (11) | (10) | (10) | (10) | ||||||||||||||||||||
Add: income from equity investments | 10 | 9 | 8 | 10 | 7 | 7 | 13 | 11 | 9 | ||||||||||||||||||||
Adjusted net operating profit after-tax (NOPAT) | $ 458 | $ 453 | $ 457 | $ 468 | $ 459 | $ 453 | $ 469 | $ 465 | $ 434 | ||||||||||||||||||||
4-quarter trailing adjusted NOPAT | $ 1,836 | $ 1,837 | $ 1,837 | $ 1,849 | $ 1,846 | ||||||||||||||||||||||||
Ending capital (see above) | $ 15,344 | $ 13,878 | $ 13,617 | $ 13,017 | $ 13,248 | $ 12,489 | $ 12,306 | $ 12,809 | $ 12,289 | ||||||||||||||||||||
5-quarter average ending capital | $ 13,821 | $ 13,250 | $ 12,935 | $ 12,774 | $ 12,628 | ||||||||||||||||||||||||
After-tax ROC (4-quarter trailing NOPAT / 5-quarter average capital) | 13.3% | 13.9% | 14.2% | 14.5% | 14.6% | ||||||||||||||||||||||||
Return on Praxair, Inc. Shareholder's equity (ROE) - Return on Praxair, Inc. shareholders' equity is a measure used by investors, financial analysts and management to evaluate operating performance from a Praxair shareholder perspective. ROE measures the net income attributable to Praxair, Inc. that the company was able to generate with the money shareholders have invested. |
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Adjusted net income - Praxair, Inc. (a) | $ 414 | $ 414 | $ 419 | $ 429 | $ 419 | $ 414 | $ 429 | $ 425 | $ 398 | ||||||||||||||||||||
4-quarter trailing adjusted net income - Praxair, Inc. (a) | $ 1,676 | $ 1,681 | $ 1,681 | $ 1,691 | $ 1,687 | ||||||||||||||||||||||||
Ending Praxair, Inc. shareholders' equity | $ 6,169 | $ 6,064 | $ 6,015 | $ 5,615 | $ 5,940 | $ 5,488 | $ 5,753 | $ 6,400 | $ 6,165 | ||||||||||||||||||||
5-quarter average Praxair shareholders' equity | $ 5,961 | $ 5,824 | $ 5,762 | $ 5,839 | $ 5,949 | ||||||||||||||||||||||||
ROE (4-quarter trailing adjusted net income - Praxair, Inc. / 5-quarter average Praxair shareholders' equity) | 28.1% | 28.9% | 29.2% | 29.0% | 28.4% | ||||||||||||||||||||||||
Adjusted EBITDA and Debt-to-Adjusted EBITDA Ratio- These measures are used by investors, financial analysts and management to assess a company's ability to meet it's financial obligations. |
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Adjusted net income - Praxair, Inc. (a) | $ 414 | $ 414 | $ 419 | $ 429 | $ 419 | $ 414 | $ 429 | $ 425 | $ 398 | ||||||||||||||||||||
Add: adjusted noncontrolling interests (a) | 15 | 14 | 12 | 15 | 13 | 12 | 14 | 14 | 11 | ||||||||||||||||||||
Add: interest expense - net | 40 | 35 | 36 | 33 | 37 | 38 | 36 | 36 | 35 | ||||||||||||||||||||
Add: adjusted income taxes (a) | 164 | 162 | 164 | 169 | 165 | 162 | 166 | 163 | 156 | ||||||||||||||||||||
Add: depreciation and amortization | 266 | 254 | 248 | 247 | 252 | 249 | 256 | 254 | 244 | ||||||||||||||||||||
Adjusted EBITDA | $ 899 | $ 879 | $ 879 | $ 893 | $ 886 | $ 875 | $ 901 | $ 892 | $ 844 | ||||||||||||||||||||
4-quarter trailing adjusted EBITDA | $ 3,550 | $ 3,537 | $ 3,533 | $ 3,555 | $ 3,554 | ||||||||||||||||||||||||
Ending net debt (see above) | $ 8,563 | $ 7,205 | $ 7,028 | $ 6,891 | $ 6,749 | $ 6,472 | $ 6,185 | $ 6,039 | $ 5,752 | ||||||||||||||||||||
5-quarter average net debt | $ 7,287 | $ 6,869 | $ 6,665 | $ 6,467 | $ 6,239 | ||||||||||||||||||||||||
Debt-to-adjusted EBITDA ratio (5-quarter average net debt / 4-quarter trailing adjusted EBITDA) | 2.1 | 1.9 | 1.9 | 1.8 | 1.8 | ||||||||||||||||||||||||
(a) | The following table presents adjusted amounts for Operating Profit and Operating Profit Margin, Income Taxes, Effective Tax Rate, Noncontrolling Interests, Net income - Praxair, Inc., and Diluted EPS for the First Quarter 2013, Third Quarter and full year 2012 and the Fourth Quarter 2011. Additionally, this table presents the percentage change in Diluted EPS Guidance for the full year 2013. | |
First
Quarter |
Year |
Third
Quarter |
Fourth
Quarter |
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2013 | 2012 | 2012 | 2011 | ||||||||||||||||||||||
Adjusted Operating Profit and Operating Profit Margin | |||||||||||||||||||||||||
Reported operating profit | $ | 600 | $ | 2,437 | $ | 558 | $ | 618 | |||||||||||||||||
Add: Venezuela currency devaluation | 23 | - | - | - | |||||||||||||||||||||
Add: Pension settlement charge | - | 9 | 9 | - | |||||||||||||||||||||
Add: Cost reduction program | - | 56 | 56 | 40 | |||||||||||||||||||||
Less: Gain on acquisition | - | - | - | (39 | ) | ||||||||||||||||||||
Total adjustments | 23 | 65 | 65 | 1 | |||||||||||||||||||||
Adjusted operating profit | $ | 623 | $ | 2,502 | $ | 623 | $ | 619 | |||||||||||||||||
Reported sales | $ | 2,888 | $ | 11,224 | $ | 2,774 | $ | 2,796 | |||||||||||||||||
Adjusted operating profit margin | 21.6 | % | 22.3 | % | 22.5 | % | 22.1 | % | |||||||||||||||||
Adjusted Income Taxes | |||||||||||||||||||||||||
Reported income taxes | $ | 164 | $ | 586 | $ | 90 | $ | 156 | |||||||||||||||||
Add: Venezuela currency devaluation | - | - | - | - | |||||||||||||||||||||
Add: Pension settlement charge | - | 3 | 3 | - | |||||||||||||||||||||
Add: Income tax benefit | - | 55 | 55 | - | |||||||||||||||||||||
Add: Cost reduction program | - | 16 | 16 | 9 | |||||||||||||||||||||
Less: Gain on acquisition | - | - | - | (3 | ) | ||||||||||||||||||||
Total adjustments | - | 74 | 74 | 6 | |||||||||||||||||||||
Adjusted income taxes | $ | 164 | $ | 660 | $ | 164 | $ | 162 | |||||||||||||||||
Adjusted Effective Tax Rate | |||||||||||||||||||||||||
Reported income before income taxes and equity investments | $ | 560 | $ | 2,296 | $ | 522 | $ | 580 | |||||||||||||||||
Add: Venezuela currency devaluation | 23 | - | - | - | |||||||||||||||||||||
Add: Pension settlement charge | - | 9 | 9 | - | |||||||||||||||||||||
Add: Cost reduction program | - | 56 | 56 | 40 | |||||||||||||||||||||
Less: Gain on acquisition | - | - | - | (39 | ) | ||||||||||||||||||||
Total adjustments | 23 | 65 | 65 | 1 | |||||||||||||||||||||
Adjusted income before income taxes and equity investments | $ | 583 | $ | 2,361 | $ | 587 | $ | 581 | |||||||||||||||||
Adjusted income taxes (above) | $ | 164 | $ | 660 | $ | 164 | $ | 162 | |||||||||||||||||
Adjusted effective tax rate | 28 | % | 28 | % | 28 | % | 28 | % | |||||||||||||||||
Adjusted Noncontrolling Interest | |||||||||||||||||||||||||
Reported noncontrolling interest | $ | 15 | $ | 52 | $ | 10 | $ | 11 | |||||||||||||||||
Add: Cost reduction program | - | 2 | 2 | - | |||||||||||||||||||||
Add: Gain on acquisition | - | - | - | 1 | |||||||||||||||||||||
Total adjustments | - | 2 | 2 | 1 | |||||||||||||||||||||
Adjusted noncontrolling interest | $ | 15 | $ | 54 | $ | 12 | $ | 12 | |||||||||||||||||
Adjusted Net Income - Praxair, Inc. | |||||||||||||||||||||||||
Reported net income - Praxair, Inc. | $ | 391 | $ | 1,692 | $ | 430 | $ | 420 | |||||||||||||||||
Add: Venezuela currency devaluation | 23 | - | - | - | |||||||||||||||||||||
Add: Pension settlement charge | - | 6 | 6 | - | |||||||||||||||||||||
Less: Income tax benefit | - | (55 | ) | (55 | ) | - | |||||||||||||||||||
Add: Cost reduction program | - | 38 | 38 | 31 | |||||||||||||||||||||
Less: Gain on acquisition | - | - | - | (37 | ) | ||||||||||||||||||||
Total adjustments | 23 | (11 | ) | (11 | ) | (6 | ) | ||||||||||||||||||
Adjusted net income - Praxair, Inc. | $ | 414 | $ | 1,681 | $ | 419 | $ | 414 | |||||||||||||||||
Adjusted Diluted EPS | |||||||||||||||||||||||||
Reported diluted EPS | $ | 1.30 | $ | 5.61 | $ | 1.43 | $ | 1.38 | |||||||||||||||||
Add: Venezuela currency devaluation | 0.08 | - | - | - | |||||||||||||||||||||
Add: Pension settlement charge | - | 0.02 | 0.02 | - | |||||||||||||||||||||
Less: Income tax benefit | - | (0.18 | ) | (0.18 | ) | - | |||||||||||||||||||
Add: Cost reduction program | - | 0.12 | 0.12 | 0.10 | |||||||||||||||||||||
Less: Gain on acquisition | - | - | - | (0.12 | ) | ||||||||||||||||||||
Total adjustments | 0.08 | (0.04 | ) | (0.04 | ) | (0.02 | ) | ||||||||||||||||||
Adjusted diluted EPS | $ | 1.38 | $ | 5.57 | $ | 1.39 | $ | 1.36 | |||||||||||||||||
Percentage Change in Adjusted Full Year 2013 Diluted EPS Guidance | |||||||||||||
Full Year 2013 | |||||||||||||
Low End | High End | ||||||||||||
Diluted EPS guidance | $ | 5.82 | $ | 5.97 | |||||||||
Non-GAAP adjustments: | |||||||||||||
Add: Venezuela currency devaluation | 0.08 | 0.08 | |||||||||||
2013 adjusted diluted EPS | $ | 5.90 | $ | 6.05 | |||||||||
2012 adjusted diluted EPS (see above) | $ | 5.57 | $ | 5.57 | |||||||||
Percentage change from 2013 adjusted amounts | 6 | % | 9 | % | |||||||||
CONTACT:
Praxair, Inc.
Investors:
Kelcey Hoyt, 203-837-2118
kelcey_hoyt@praxair.com
or
Media:
Jacqueline
Hunt, 203-837-2663
jacqueline_hunt@praxair.com