Praxair Reports Second-Quarter 2013 Results

Praxair, Inc. (NYSE: PX) reported second-quarter net income and diluted earnings per share of $445 million and $1.49, 4% and 5% above the prior-year quarter, respectively.

Sales in the second quarter were $3,014 million, 7% above the prior-year quarter. Strong volumes in Asia and South America were partially mitigated by lower volumes in Europe, while North American volumes were comparable to the prior year. Acquisitions contributed 3% growth in the quarter.

Operating profit in the second quarter was $665 million, up 5% compared to the prior-year quarter. The increase was driven by higher overall volumes, higher pricing and acquisitions, partially offset by negative currency translation effects. Operating profit as a percentage of sales was 22.1%.

Second-quarter cash flow from operations was $577 million and capital expenditures were $522 million, primarily for new production plants under long-term contracts with customers. The company invested $171 million in acquisitions of Dominion Technology Gases, Volgograd Oxygen Factory and several packaged gas distributors in the United States. The company paid dividends of $177 million and repurchased $152 million of stock, net of issuances. The debt-to-capital ratio was 57.9% and debt-to-EBITDA was 2.1x.* The after-tax return on capital and return on equity for the quarter were 13.0% and 28.4%, respectively.*

Commenting on the financial results and business outlook, Chairman, President and Chief Executive Officer Steve Angel said, “Our on-site business continued to be very strong with improving volumes to the energy, chemicals and metals industries across the Americas and Asia. Merchant deliveries continued to grow modestly with stable demand from healthcare and food and beverage. However, packaged gas demand weakened slightly due to poor overall business confidence and lower private and public spending on construction and capital projects.

In the near term, we expect these trends to continue with the strongest growth in chemicals, energy and emerging markets. Fortunately, we are well positioned geographically and have a strong backlog of large on-site projects being readied for start-up.”

For the third quarter of 2013, Praxair expects diluted earnings per share in the range of $1.48 to $1.53. For the full year of 2013, the company expects adjusted diluted earnings per share to be in the range of $5.90 to $6.00. These estimates are based on current foreign exchange rates for our international businesses, which on a weighted basis are 3% weaker than January when we initially gave earnings guidance for 2013. They also exclude an expected pension settlement charge in the third quarter of about $9 million. Praxair expects full-year sales in the area of $12 billion. 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 second-quarter 2013 results by segment.

In North America, second-quarter sales were $1,552 million up 11% from the prior-year quarter. The acquisitions of NuCO 2 and packaged gas distributors contributed 6% growth. Operating profit of $381 million grew 5% from the prior year primarily due to acquisitions and higher price.

In Europe, second-quarter sales were $382 million, in-line with the prior-year quarter. Underlying sales, excluding currency translation, were steady with the prior-year quarter due to higher pricing offset by lower volumes. Operating profit of $69 million, increased 1%, compared to the prior-year quarter, due to lower costs, productivity savings and price, partially offset by lower volumes.

In South America, second-quarter sales were $536 million, 3% higher than the prior-year quarter. Underlying sales, excluding currency translation, grew 9% with the strongest growth in the metals, healthcare and chemical markets. Operating profit was $123 million, up 12% versus the prior-year period, due to improved volumes and price.

Sales in Asia were $379 million in the quarter, up 9% from the prior year, driven by higher on-site and merchant sales in China, Korea and India, including new plant start-ups. Sales growth came primarily from metals, chemical and manufacturing customers. Operating profit was $61 million.

Praxair Surface Technologies had second-quarter sales of $165 million, 2% below the prior-year quarter. Sales were steady, excluding negative currency impact, as higher pricing offset weaker volumes of industrial coatings. Operating profit of $31 million grew 15% from the prior-year period due to lower costs from previous restructuring actions, productivity savings and higher pricing.

About Praxair

Praxair, Inc. 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 about Praxair, Inc. is available at www.praxair.com.

*See the attachments for calculations of non-GAAP measures. Guidance for diluted earnings per share for the third quarter excludes the impact of a pension settlement charge expected to be recorded and guidance for adjusted diluted earnings per share for the full year 2013 also excludes the impact of the Venezuela currency devaluation recorded in the first quarter.

Attachments: Statements of Income, Balance Sheets, Statements of Cash Flows, Segment Information, Quarterly Financial Summary, Non-GAAP Reconciliations, Appendix: Non-GAAP Measures.

A teleconference on Praxair’s second-quarter results is being held this morning, July 24, at 11:00 am 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 at www.praxair.com/investors.

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.
 
 
PRAXAIR, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Millions of dollars, except per share data)
(UNAUDITED)
             
Quarter Ended Year to Date
June 30, June 30,
2013 2012 2013 2012
 
SALES $ 3,014 $ 2,811 $ 5,902 $ 5,651
Cost of sales 1,710 1,602 3,348 3,218
Selling, general and administrative 344 310 681 645
Depreciation and amortization 275 247 541 499
Research and development 24 25 48 49
Venezuela currency devaluation (a)

-  

-  
23

-  
Other income (expense) - net   4     9     4     23  
OPERATING PROFIT 665 636 1,265 1,263
Interest expense - net   41     33     81     70  
INCOME BEFORE INCOME TAXES AND EQUITY INVESTMENTS 624 603 1,184 1,193
Income taxes   174     169     338     334  
INCOME BEFORE EQUITY INVESTMENTS 450 434 846 859
Income from equity investments   11     10     21     17  
NET INCOME (INCLUDING NONCONTROLLING INTERESTS) 461 444 867 876
Less: noncontrolling interests   (16 )   (15 )   (31 )   (28 )
NET INCOME - PRAXAIR, INC. $ 445   $ 429   $ 836   $ 848  
 
PER SHARE DATA - PRAXAIR, INC. SHAREHOLDERS
 
Basic earnings per share $ 1.50 $ 1.43 $ 2.82 $ 2.84
 
Diluted earnings per share $ 1.49 $ 1.42 $ 2.79 $ 2.80
 
Cash dividends $ 0.60 $ 0.55 $ 1.20 $ 1.10
 
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic shares outstanding (000's) 295,668 298,885 296,136 298,981
Diluted shares outstanding (000's) 298,654 302,492 299,290 302,657
   
(a) The 2013 year to date period includes a charge of $23 million ($23 million after-tax, or $0.08 per diluted share) in the first quarter, 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)
                 

   June 30,   

 December 31, 

   2013   

 2012 
ASSETS
Cash and cash equivalents $ 102 $ 157
Accounts receivable - net 1,961 1,834
Inventories 480 476
Prepaid and other current assets   470   325
TOTAL CURRENT ASSETS 3,013 2,792
 
Property, plant and equipment - net 11,867 11,453
Goodwill 3,159 2,507
Other intangibles - net 576 173
Other long-term assets   1,156   1,165
TOTAL ASSETS $ 19,771 $ 18,090
LIABILITIES AND EQUITY
Accounts payable $ 915 $ 928
Short-term debt 1,234 638
Current portion of long-term debt 9 39
Other current liabilities   832   874
TOTAL CURRENT LIABILITIES 2,990 2,479
Long-term debt 7,863 6,685
Other long-term liabilities   2,374   2,253
TOTAL LIABILITIES 13,227 11,417
 
REDEEMABLE NONCONTROLLING INTERESTS 259 252
 
EQUITY
Praxair, Inc. shareholders' equity 5,928 6,064
Noncontrolling interests   357   357
TOTAL EQUITY   6,285   6,421
TOTAL LIABILITIES AND EQUITY $ 19,771 $ 18,090

 
 
PRAXAIR, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Millions of dollars)
(UNAUDITED)
             
Quarter Ended Year to Date
June 30, June 30,
2013 2012 2013 2012
OPERATIONS
Net income - Praxair, Inc. $ 445 $ 429 $ 836 $ 848
Noncontrolling interests   16     15     31     28  
Net income (including noncontrolling interests) 461 444 867 876
 
Adjustments to reconcile net income to net cash provided
by operating activities:
Venezuela currency devaluation

23

-  
Depreciation and amortization 275 247 541 499
Accounts receivable (3 ) 96 (164 ) (47 )
Inventory (11 ) 17 (27 ) (14 )
Payables and accruals (6 ) (23 ) (6 ) (118 )
Pension contributions (38 ) (3 ) (43 ) (109 )
Deferred income taxes and other   (101 )   (53 )   (142 )   39  
Net cash provided by operating activities   577     725     1,049     1,127  
INVESTING
Capital expenditures (522 ) (564 ) (988 ) (1,047 )
Acquisitions, net of cash acquired (171 ) (39 ) (1,269 ) (51 )
Divestitures and asset sales   7     7     38     71  
Net cash used for investing activities   (686 )   (596 )   (2,219 )   (1,027 )
 
FINANCING
Debt increase (decrease) - net 439 174 1,755 452
Issuances of common stock 43 34 76 107
Purchases of common stock (195 ) (138 ) (345 ) (313 )
Cash dividends - Praxair, Inc. shareholders (177 ) (164 ) (355 ) (328 )
Excess tax benefit on stock option exercises 10 12 24 44
Noncontrolling interest transactions and other   (12 )   (41 )   (17 )   (41 )
Net cash provided by (used for) financing activities 108 (123 ) 1,138 (79 )
 
Effect of exchange rate changes on cash and
cash equivalents   (10 )   (9 )   (23 )   (7 )
 
Change in cash and cash equivalents (11 ) (3 ) (55 ) 14
Cash and cash equivalents, beginning-of-period   113     107     157     90  
 
Cash and cash equivalents, end-of-period $ 102   $ 104   $ 102   $ 104  

 
 
PRAXAIR, INC. AND SUBSIDIARIES
SEGMENT INFORMATION
(Millions of dollars)
(UNAUDITED)
                   

Quarter Ended
Year to Date
June 30, June 30,
2013 2012 2013 2012
SALES
North America $ 1,552 $ 1,393 $ 3,009 $ 2,791
Europe 382 382 752 759
South America 536 520 1,067 1,082
Asia 379 348 746 682
Surface Technologies   165   168   328     337
Total sales $ 3,014 $ 2,811 $ 5,902   $ 5,651
 
OPERATING PROFIT
North America $ 381 $ 363 $ 739 $ 724
Europe 69 68 131 136
South America 123 110 237 225
Asia 61 68 124 125
Surface Technologies   31   27   57     53
Segment operating profit 665 636 1,288 1,263
Venezuela currency devaluation  

 

  (23 )  

-  
Total operating profit $ 665 $ 636 $ 1,265   $ 1,263

 
 
PRAXAIR, INC. AND SUBSIDIARIES
QUARTERLY FINANCIAL SUMMARY
(Millions of dollars, except per share data)
(UNAUDITED)
               
2013 2012
Q2 Q1 (b) Q4 Q3 (b) Q2 Q1
FROM THE INCOME STATEMENT
Sales $ 3,014 $ 2,888 $ 2,799 $ 2,774 $ 2,811 $ 2,840
Cost of sales 1,710 1,638 1,583 1,595 1,602 1,616
Selling, general and administrative 344 337 319 306 310 335
Depreciation and amortization 275 266 254 248 247 252
Research and development 24 24 25 24 25 24
Venezuela currency devaluation and other charges

-  
23

-  
65

-  

-  
Other income (expenses) - net   4      

-  
    (2 )     22       9       14  
Operating profit 665 600 616 558 636 627
Interest expense - net 41 40 35 36 33 37
Income taxes 174 164 162 90 169 165
Income from equity investments   11       10     9       8       10       7  
Net income (including noncontrolling interests) 461 406 428 440 444 432
Less: noncontrolling interests   (16 )     (15 )   (14 )     (10 )     (15 )     (13 )
Net income - Praxair, Inc. $ 445     $ 391   $ 414     $ 430     $ 429     $ 419  
 
PER SHARE DATA - PRAXAIR, INC. SHAREHOLDERS
Diluted earnings per share $ 1.49 $ 1.30 $ 1.38 $ 1.43 $ 1.42 $ 1.38
Cash dividends per share $ 0.60 $ 0.60 $ 0.55 $ 0.55 $ 0.55 $ 0.55
Diluted weighted average shares outstanding (000's) 298,654 299,700 300,224 301,731 302,492 302,876
 
FROM THE BALANCE SHEET
Net debt (a) $ 9,004 $ 8,563 $ 7,205 $ 7,028 $ 6,891 $ 6,749
Capital (a) $ 15,548 $ 15,344 $ 13,878 $ 13,617 $ 13,017 $ 13,248
Debt-to-capital ratio (a) 57.9 % 55.8 % 51.9 % 51.6 % 52.9 % 50.9 %
 
FROM THE STATEMENT OF CASH FLOWS
Cash flow from operations $ 577 $ 472 $ 879 $ 746 $ 725 $ 402
Capital expenditures 522 466 586 547 564 483
Acquisitions 171 1,098 171 58 39 12
Cash dividends 177 178 163 164 164 164
 
OTHER INFORMATION
After-tax return on capital (ROC) (a) 13.0 % 13.3 % 13.9 % 14.2 % 14.5 % 14.6 %
Return on Praxair, Inc. shareholders' equity (ROE) (a) 28.4 % 28.1 % 28.9 % 29.2 % 29.0 % 28.4 %

Adjusted earnings before interest, taxes, depreciation andamortization (adjusted EBITDA) (a)
$ 951 $ 899 $ 879 $ 879 $ 893 $ 886
Debt-to-adjusted EBITDA ratio (a) 2.1 2.1 1.9 1.9 1.8 1.8
Number of employees 27,878 27,380 26,539 26,215 26,353 26,259
 
SEGMENT DATA
SALES
North America $ 1,552 $ 1,457 $ 1,416 $ 1,391 $ 1,393 $ 1,398
Europe 382 370 363 352 382 377
South America 536 531 484 516 520 562
Asia 379 367 374 358 348 334
Surface Technologies   165       163     162       157       168       169  
Total sales $ 3,014     $ 2,888   $ 2,799     $ 2,774     $ 2,811     $ 2,840  
OPERATING PROFIT
North America $ 381 $ 358 $ 367 $ 374 $ 363 $ 361
Europe 69 62 60 60 68 68
South America 123 114 92 112 110 115
Asia 61 63 69 52 68 57
Surface Technologies   31       26     28       25       27       26  
Segment operating profit 665 623 616 623 636 627
Venezuela currency devaluation and other charges  

-  
      (23 )  

-  
      (65 )    

-  
     

-  
 
Total operating profit $ 665     $ 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
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

Year To Date June 30,
Reported GAAP amounts $ 1,265 $ 1,263 $ 338 $ 334 $ 836 $ 848 $ 2.79 $ 2.80
Non-GAAP adjustments:
Venezuela currency devaluation (a)   23    

-  
  -     -   23     -   0.08     -
Total adjustments   23    

-  
  -     -   23     -   0.08     -
Adjusted amounts $ 1,288   $ 1,263 $ 338   $ 334 $ 859   $ 848 $ 2.87   $ 2.80
 

Note: There were no non-GAAP adjustments for the quarters ended June 30, 2013 or 2012.

 

 
                         
PRAXAIR, INC. AND SUBSIDIARIES
APPENDIX
NON-GAAP MEASURES
(Millions of dollars, except per share data)
(UNAUDITED)
 
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
Q2 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 $ 9,106 $ 8,676 $ 7,362 $ 7,136 $ 6,995 $ 6,856 $ 6,562 $ 6,310 $ 6,119 $ 5,838
Less: cash and cash equivalents   (102 )     (113 )   (157 )     (108 )     (104 )     (107 )   (90 )     (125 )     (80 )     (86 )
Net debt 9,004 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 259 255 252 243 232 232 220 - - -
Praxair, Inc. shareholders' equity 5,928 6,169 6,064 6,015 5,615 5,940 5,488 5,753 6,400 6,165
Noncontrolling interests   357       357     357       331       279       327     309       368       370       372  
Total equity and redeemable noncontrolling interests   6,544       6,781     6,673       6,589       6,126       6,499     6,017       6,121       6,770       6,537  
Capital $ 15,548 $ 15,344 $ 13,878 $ 13,617 $ 13,017 $ 13,248 $ 12,489 $ 12,306 $ 12,809 $ 12,289
 
Debt-to-capital   57.9 %     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).
 
Adjusted operating profit (a) $ 665 $ 623 $ 616 $ 623 $ 636 $ 627 $ 619 $ 632 $ 627 $ 591
Less: adjusted income taxes (a) (174 ) (164 ) (162 ) (164 ) (169 ) (165 ) (162 ) (166 ) (163 ) (156 )
Less: tax benefit on interest expense (11 ) (11 ) (10 ) (10 ) (9 ) (10 ) (11 ) (10 ) (10 ) (10 )
Add: income from equity investments   11       10     9       8       10       7     7       13       11       9  
Adjusted net operating profit after-tax (NOPAT) $ 491 $ 458 $ 453 $ 457 $ 468 $ 459 $ 453 $ 469 $ 465 $ 434
4-quarter trailing adjusted NOPAT $ 1,859 $ 1,836 $ 1,837 $ 1,837 $ 1,849 $ 1,846
 
Ending capital (see above) $ 15,548 $ 15,344 $ 13,878 $ 13,617 $ 13,017 $ 13,248 $ 12,489 $ 12,306 $ 12,809 $ 12,289
5-quarter average ending capital $ 14,281 $ 13,821 $ 13,250 $ 12,935 $ 12,774 $ 12,628
 
After-tax ROC (4-quarter trailing NOPAT / 5-quarter average capital)   13.0 %     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.
 
Adjusted net income - Praxair, Inc. (a) $ 445 $ 414 $ 414 $ 419 $ 429 $ 419 $ 414 $ 429 $ 425 $ 398
4-quarter trailing adjusted net income - Praxair, Inc. (a) $ 1,692 $ 1,676 $ 1,681 $ 1,681 $ 1,691 $ 1,687
 
Ending Praxair, Inc. shareholders' equity $ 5,928 $ 6,169 $ 6,064 $ 6,015 $ 5,615 $ 5,940 $ 5,488 $ 5,753 $ 6,400 $ 6,165
5-quarter average Praxair shareholders' equity $ 5,958 $ 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)   28.4 %     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.
 
 
Adjusted net income - Praxair, Inc. (a) $ 445 $ 414 $ 414 $ 419 $ 429 $ 419 $ 414 $ 429 $ 425 $ 398
 
Add: adjusted noncontrolling interests (a) 16 15 14 12 15 13 12 14 14 11
Add: interest expense - net 41 40 35 36 33 37 38 36 36 35
Add: adjusted income taxes (a) 174 164 162 164 169 165 162 166 163 156
Add: depreciation and amortization   275       266     254       248       247       252     249       256       254       244  
Adjusted EBITDA $ 951 $ 899 $ 879 $ 879 $ 893 $ 886 $ 875 $ 901 $ 892 $ 844
4-quarter trailing adjusted EBITDA $ 3,608 $ 3,550 $ 3,537 $ 3,533 $ 3,555 $ 3,554
 
Ending net debt (see above) $ 9,004 $ 8,563 $ 7,205 $ 7,028 $ 6,891 $ 6,749 $ 6,472 $ 6,185 $ 6,039 $ 5,752
5-quarter average net debt $ 7,738 $ 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       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
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 $ 5.92
Non-GAAP adjustments:
Add: Venezuela currency devaluation   0.08     0.08  
2013 adjusted diluted EPS $ 5.90 $ 6.00
 
2012 adjusted diluted EPS (see above) $ 5.57 $ 5.57
 
Percentage change from 2012 adjusted amounts 6 % 8 %
 

Copyright Business Wire 2010

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