DANBURY, Conn., Jan 23, 2013 (BUSINESS WIRE) —
–Record full-year operating cash flow of $2.8 billion
–Fourth-quarter sales of $2.8 billion; diluted EPS of $1.38
–$2.6 billion project backlog at year-end; project development activity remains solid
–9% dividend increase; 20th consecutive annual increase
–Full-year 2013 EPS guidance of $5.85 to $6.10; up 5% – 10%*; First-quarter 2013 EPS guidance of $1.35 to $1.40
Praxair, Inc.
/quotes/zigman/238768/quotes/nls/px PX
+0.44%
announced full-year 2012 reported net income of
$1,692 million and reported diluted earnings per share of $5.61. On an
adjusted basis, full-year net income was $1,681 million and diluted
earnings per share was $5.57, 3% above the prior year.*
Full-year sales were $11,224, 5% above 2011 excluding negative foreign
currency translation and cost pass-through effects.
Reported operating profit was $2,437 million. Adjusted operating profit
was $2,502 million, compared to $2,469 million in the prior year.* The
increase was driven by higher volumes, higher pricing and productivity,
partially offset by currency translation effects. Operating profit in
North America grew by 10%, but was largely offset by lower operating
profit in Europe and South America.
For the full year, cash flow from operations was a record $2,752
million, up 12% from 2011. Capital expenditures, primarily for new
production plants under long-term contracts with customers, were $2,180
million. The company invested $280 million in acquisitions, for
seventeen North American packaged gas distributors and an industrial gas
business in Russia. The company paid $655 million of dividends and
repurchased $459 million of stock, net of issuances.
For the fourth quarter, net income and diluted earnings per share were
$414 million and $1.38, as compared to adjusted amounts of $414 million
and $1.36 in the prior-year quarter, respectively.*
Sales in the fourth quarter were $2,799 million, comparable to the
prior-year, as higher price and acquisitions were offset by negative
currency effects. Operating profit in the fourth quarter was $616
million versus $619 million in the prior-year quarter.*
Commenting on the financial results and business outlook, chairman and
chief executive officer Steve Angel said, “In 2012, Praxair delivered
record operating cash flow of $2.8 billion, which represented 25% of
sales. We also achieved a record operating margin of 22.3%, which we
achieved through global productivity gains as well as price attainment
in most operating segments. Our industry-leading North American business
achieved double-digit operating profit growth with strength across most
end markets. These strong results were mitigated by recessions in Brazil
and Europe, moderating growth in China, and significant currency
translation headwinds.
“As we enter 2013, Praxair remains committed to driving performance in
an uncertain economic environment. In addition, our backlog of large
projects remains strong at $2.6 billion and new proposal activity
remains solid. This backlog will contribute 4% to 6% growth in 2013, as
the plants start up to supply on-site customers under long-term
contracts.”
For the full year of 2013, Praxair expects sales in the area of $12
billion. The company expects diluted earnings per share to be in the
range of $5.85 to $6.10, up 5% to 10%.* Full-year capital expenditures
are expected to be in the range of $1.8 to $2.0 billion, and the
effective tax rate is forecasted to remain at about 28%.
For the first quarter of 2013, Praxair expects diluted earnings per
share in the range of $1.35 to $1.40.
Following is additional detail on fourth-quarter 2012 results by segment.
In North America, fourth-quarter sales were $1,416 million, up 2% from
the prior-year quarter. Sales grew to manufacturing, energy, and metals
markets, partially offset by declines in electronics. Operating profit
of $367 million grew 4% from the prior year due to price and
productivity.
In Europe, fourth-quarter sales were $363 million, 5% below the
prior-year quarter primarily due to the negative impact of currency
translation. Operating profit was $60 million in the quarter, as
compared to $64 million in the prior-year quarter primarily due to
negative currency effects.
In South America, fourth-quarter sales were $484 million, 9% below the
prior-year quarter. Operating profit was $92 million as compared to $118
million in the prior-year period. The lower sales and operating profit
as compared to the prior year were due primarily to negative currency
effects.
Sales in Asia were $374 million in the quarter, up 12% from the prior
year, driven by strong volume growth in India, China, and Korea,
including new plant start-ups. Sales growth came primarily from metals
and chemicals customers. Operating profit was $69 million as compared to
$60 million in the prior year, due primarily to higher volumes.
Praxair Surface Technologies had fourth-quarter sales of $162 million,
compared to $160 million in the prior-year quarter. Sales grew 3%,
excluding negative currency effects, primarily from higher jet-engine
and energy coatings. Operating profit increased to $28 million from $24
million in the quarter due primarily to price and productivity.
Praxair is the largest industrial gases company in North and South
America, and one of the largest worldwide. The company produces, sells
and distributes atmospheric and process gases, and high-performance
surface coatings. Praxair products, services and technologies are making
the 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 is
available on the Internet at
www.praxair.com .
*See the attachments for calculations of non-GAAP measures. Full-year
2012 results are adjusted to exclude cost reduction charges, a pension
settlement charge and an income tax benefit. Fourth-quarter and
full-year 2011 results are adjusted to exclude the Yara acquisition net
gain and restructuring charges.
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 fourth-quarter results is being
held this morning, January 23, at 11:00 am Eastern Time. The number is
(617) 597-5346 — Passcode: 52650064. 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.
PRAXAIR, INC. AND SUBSIDIARIES
NON-GAAP RECONCILIATIONS
(UNAUDITED)
The following Non-GAAP measures are intended to supplement an
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
---------------------- ------------------ ----------------------------- ---------------------
2012 2011 2012 2011 2012 2011 2012 2011
------- --------- ----- ------- ----------- ----------- ------- -------
Quarter Ended December 31,
--------------------------------
Reported GAAP amounts $ 616 $ 618 $ 162 $ 156 $ 414 $ 420 $ 1.38 $ 1.38
Non-GAAP adjustments:
- (39) - (3) - (37) - (0.12)
Gain on acquisition (a)
Cost reduction program (b) - 40 - 9 - 31 - 0.10
----- ----- --- --- ----- ----- ----- -----
Total adjustments - 1 - 6 - (6) - (0.02)
----- ----- --- --- ----- ----- --- ----- ----- -
Adjusted amounts $ 616 $ 619 $ 162 $ 162 $ 414 $ 414 $ 1.38 $ 1.36
== ===== == ===== == === == === === ===== === ===== = ===== = =====
Year Ended December 31,
--------------------------------
Reported GAAP amounts $ 2,437 $ 2,468 $ 586 $ 641 $ 1,692 $ 1,672 $ 5.61 $ 5.45
Non-GAAP adjustments:
- (39) - (3) - (37) - (0.12)
Gain on acquisition (a)
Cost reduction programs (b) 56 40 16 9 38 31 0.12 0.10
Pension settlement charge (c) 9 - 3 - 6 - 0.02 -
Income tax benefit (d) - - 55 - (55) - (0.18) -
----- ----- --- --- ----- --- ----- ----- - -----
Total adjustments 65 1 74 6 (11) (6) (0.04) (0.02)
----- ----- --- --- ----- --- ----- --- ----- - ----- -
Adjusted amounts $ 2,502 $ 2,469 $ 660 $ 647 $ 1,681 $ 1,666 $ 5.57 $ 5.43
== ===== == ===== == === == === === ===== === ===== = ===== = =====
(a) Net gain on Praxair's acquisition of an additional 16% of Yara
Praxair AS and consolidation effective October 2011. Accounting
rules require Praxair to fair value its prior 50% ownership
interest.
(b) Charges in the third quarter 2012 and fourth quarter 2011
related to severance and business restructuring actions primarily in
Europe within the industrial gases and surface technologies
businesses.
(c) A pension settlement charge was recorded in the 2012 third
quarter related to lump sum benefit payments made from the U.S.
supplemental pension plan to a number of recently retired senior
managers.
(d) Income tax benefit related to a loss on a liquidated subsidiary
as a result of the divestiture of the U.S. Homecare business.
PRAXAIR, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Millions of dollars, except per share data)
(UNAUDITED)
Quarter Ended Year to Date
December 31, December 31,
-------------------------- --------------------------
2012 2011 2012 2011
------------ ------------ ------------ ------------
SALES $ 2,799 $ 2,796 $ 11,224 $ 11,252
Cost of sales 1,583 1,598 6,396 6,458
Selling, general and administrative 319 315 1,270 1,239
Depreciation and amortization 254 249 1,001 1,003
Research and development 25 23 98 90
Cost reduction programs and other charges - 1 65 1
Other income (expense) - net (2) 8 43 7
------- - ------- ------- -------
OPERATING PROFIT 616 618 2,437 2,468
Interest expense - net 35 38 141 145
------- ------- ------- -------
INCOME BEFORE INCOME TAXES AND EQUITY INVESTMENTS 581 580 2,296 2,323
Income taxes 162 156 586 641
------- ------- ------- -------
INCOME BEFORE EQUITY INVESTMENTS 419 424 1,710 1,682
Income from equity investments 9 7 34 40
------- ------- ------- -------
NET INCOME (INCLUDING NONCONTROLLING INTERESTS) 428 431 1,744 1,722
Less: noncontrolling interests (14) (11) (52) (50)
------- - ------- - ------- - ------- -
NET INCOME - PRAXAIR, INC. $ 414 $ 420 $ 1,692 $ 1,672
= ======= = ======= = ======= = =======
PER SHARE DATA - PRAXAIR, INC. SHAREHOLDERS
Basic earnings per share $ 1.40 $ 1.40 $ 5.67 $ 5.53
Diluted earnings per share $ 1.38 $ 1.38 $ 5.61 $ 5.45
Cash dividends $ 0.55 $ 0.50 $ 2.20 $ 2.00
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic shares outstanding (000's) 296,887 299,575 298,316 302,237
Diluted shares outstanding (000's) 300,224 303,700 301,845 306,722
PRAXAIR, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Millions of dollars)
(UNAUDITED)
December 31, December 31,
2012 2011
-------------- --------------
ASSETS
Cash and cash equivalents $ 157 $ 90
Accounts receivable - net 1,834 1,795
Inventories 476 456
Prepaid and other current assets 325 266
------ ------
TOTAL CURRENT ASSETS 2,792 2,607
Property, plant and equipment - net 11,453 10,131
Goodwill 2,507 2,372
Other intangibles - net 173 167
Other long-term assets 1,165 1,079
------ ------
TOTAL ASSETS $ 18,090 $ 16,356
====== ====== ====== ======
LIABILITIES AND EQUITY
Accounts payable $ 928 $ 896
Short-term debt 638 337
Current portion of long-term debt 39 387
Other current liabilities 874 915
------ ------
TOTAL CURRENT LIABILITIES 2,479 2,535
Long-term debt 6,685 5,838
Other long-term liabilities 2,253 1,966
------ ------
TOTAL LIABILITIES 11,417 10,339
REDEEMABLE NONCONTROLLING INTERESTS 252 220
EQUITY
Praxair, Inc. shareholders' equity 6,064 5,488
Noncontrolling interests 357 309
------ ------
TOTAL EQUITY 6,421 5,797
------ ------
TOTAL LIABILITIES AND EQUITY $ 18,090 $ 16,356
====== ====== ====== ======
PRAXAIR, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Millions of dollars)
(UNAUDITED)
Quarter Ended Year to Date
December 31, December 31,
------------------------ ----------------------------
2012 2011 2012 2011
----------- ----------- ------------- -------------
OPERATIONS
Net income - Praxair, Inc. $ 414 $ 420 $ 1,692 $ 1,672
Noncontrolling interests 14 11 52 50
---- ---- ------ ------
Net income (including noncontrolling interests) 428 431 1,744 1,722
Adjustments to reconcile net income to net cash provided by
operating activities:
Cost reduction programs and other charges, net of payments (9) (5) 43 (5)
Deferred income taxes 56 (36) 258 (3)
Depreciation and amortization 254 249 1,001 1,003
Accounts receivable 71 94 (36) (108)
Inventory 12 12 (18) (31)
Payables and accruals 41 92 (34) 44
Pension contributions (72) (7) (184) (94)
Other 98 (39) (22) (73)
---- ---- -- ------ -- ------ --
Net cash provided by operating activities 879 791 2,752 2,455
---- ---- ------ ------
INVESTING
Capital expenditures (586) (572) (2,180) (1,797)
Acquisitions, net of cash acquired (171) (195) (280) (294)
Divestitures and asset sales 5 46 82 86
---- ---- ------ ------
Net cash used for investing activities (752) (721) (2,378) (2,005)
---- -- ---- -- ------ -- ------ --
FINANCING
Debt increase (decrease) - net 224 189 807 914
Issuances of common stock 38 31 164 195
Purchases of common stock (185) (179) (623) (937)
Cash dividends - Praxair, Inc. shareholders (163) (149) (655) (602)
Excess tax benefit on stock option exercises 10 6 60 53
Noncontrolling interest transactions and other (1) 1 (56) (3)
---- -- ---- ------ -- ------ --
Net cash provided by (used for) financing activities (77) (101) (303) (380)
(1) (4) (4) (19)
Effect of exchange rate changes on cash and cash equivalents
---- -- ---- -- ------ -- ------ --
Change in cash and cash equivalents 49 (35) 67 51
Cash and cash equivalents, beginning-of-period 108 125 90 39
---- ---- ------ ------
Cash and cash equivalents, end-of-period $ 157 $ 90 $ 157 $ 90
== ==== == ==== == ====== == ======
PRAXAIR, INC. AND SUBSIDIARIES
SEGMENT INFORMATION
(Millions of dollars)
(UNAUDITED)
Quarter Ended Year to Date
December 31, December 31,
----------------------- --------------------------
2012 2011 (a) 2012 2011 (a)
--------- ------------ ----------- -------------
SALES
North America $ 1,416 $ 1,388 $ 5,598 $ 5,490
Europe 363 382 1,474 1,458
South America 484 532 2,082 2,308
Asia 374 334 1,414 1,348
Surface Technologies 162 160 656 648
----- ----- ------ ------
Total sales $ 2,799 $ 2,796 $ 11,224 $ 11,252
== ===== == ===== = ====== == ======
OPERATING PROFIT
North America $ 367 $ 353 $ 1,465 $ 1,331
Europe 60 64 256 272
South America 92 118 429 530
Asia 69 60 246 234
Surface Technologies 28 24 106 102
----- ----- ------ ------
Segment operating profit 616 619 2,502 2,469
Cost reduction programs and other charges - (1) (65) (1)
----- ----- -- ------ - ------ --
Total operating profit $ 616 $ 618 $ 2,437 $ 2,468
== ===== == ===== = ====== == ======
(a) Effective with the 2012 first quarter, Praxair changed the
measurement of its segment sales and operating profit. These changes
primarily relate to helium and specialty gas sales and result in
slightly higher sales and operating profit in the Europe and Asia
segments with offsetting declines in the North America segment.
Prior-period amounts have been reclassified to conform to the
current presentation. See the Investors section of Praxair's website
for a summary of the remeasurement adjustments for 2011 and 2010.
PRAXAIR, INC. AND SUBSIDIARIES
QUARTERLY FINANCIAL SUMMARY
(Millions of dollars, except per share data)
(UNAUDITED)
2012 2011
----------------------------------------------------- -----------------------------------------------------
Q4 Q3 (b) Q2 Q1 Q4 (b) Q3 Q2 Q1
FROM THE INCOME STATEMENT
Sales $ 2,799 $ 2,774 $ 2,811 $ 2,840 $ 2,796 $ 2,896 $ 2,858 $ 2,702
Cost of sales 1,583 1,595 1,602 1,616 1,598 1,684 1,640 1,536
Selling, general and administrative 319 306 310 335 315 307 309 308
Depreciation and amortization 254 248 247 252 249 256 254 244
Research and development 25 24 25 24 23 22 23 22
Cost reduction programs and other charges - net - 65 - - 1 - - -
Other income (expenses) - net (2) 22 9 14 8 5 (5) (1)
------- - ------- ------- ------- ------- ------- ------- - ------- -
Operating profit 616 558 636 627 618 632 627 591
Interest expense - net 35 36 33 37 38 36 36 35
Income taxes 162 90 169 165 156 166 163 156
Income from equity investments 9 8 10 7 7 13 11 9
------- ------- ------- ------- ------- ------- ------- -------
Net income (including noncontrolling interests) 428 440 444 432 431 443 439 409
Less: noncontrolling interests (14) (10) (15) (13) (11) (14) (14) (11)
------- - ------- -- ------- - ------- - ------- -- ------- - ------- - ------- -
Net income - Praxair, Inc. $ 414 $ 430 $ 429 $ 419 $ 420 $ 429 $ 425 $ 398
= ======= == ======= = ======= = ======= == ======= = ======= = ======= = =======
PER SHARE DATA - PRAXAIR, INC. SHAREHOLDERS
Diluted earnings per share $ 1.38 $ 1.43 $ 1.42 $ 1.38 $ 1.38 $ 1.40 $ 1.38 $ 1.29
Cash dividends per share $ 0.55 $ 0.55 $ 0.55 $ 0.55 $ 0.50 $ 0.50 $ 0.50 $ 0.50
Diluted weighted average shares outstanding (000's) 300,224 301,731 302,492 302,876 303,700 305,623 308,253 308,595
FROM THE BALANCE SHEET
Net debt (a) $ 7,205 $ 7,028 $ 6,891 $ 6,749 $ 6,472 $ 6,185 $ 6,039 $ 5,752
Capital (a) $ 13,878 $ 13,617 $ 13,017 $ 13,248 $ 12,489 $ 12,306 $ 12,809 $ 12,289
Debt-to-capital ratio (a) 51.9 % 51.6 % 52.9 % 50.9 % 51.8 % 50.3 % 47.1 % 46.8 %
FROM THE STATEMENT OF CASH FLOWS
Cash flow from operations $ 879 $ 746 $ 725 $ 402 $ 791 $ 732 $ 573 $ 359
Capital expenditures 586 547 564 483 572 458 433 334
Acquisitions 171 58 39 12 195 19 80 -
Cash dividends 163 164 164 164 149 150 151 152
OTHER INFORMATION
After-tax return on capital (ROC) (a) 13.9 % 14.2 % 14.5 % 14.6 % 14.8 % 14.8 % 14.7 % 14.6 %
Return on Praxair, Inc. shareholders' equity (ROE) (a) 28.9 % 29.2 % 29.0 % 28.4 % 28.1 % 27.2 % 26.6 % 26.6 %
Adjusted earnings before interest, taxes, depreciation and $ 879 $ 879 $ 893 $ 886 $ 875 $ 901 $ 892 $ 844
amortization (adjusted EBITDA) (a)
Debt-to-adjusted EBITDA ratio (a) 1.9 1.9 1.8 1.8 1.7 1.7 1.6 1.6
Number of employees 26,539 26,215 26,353 26,259 26,184 25,793 25,678 25,482
SEGMENT DATA (c)
SALES
North America $ 1,416 $ 1,391 $ 1,393 $ 1,398 $ 1,388 $ 1,416 $ 1,361 $ 1,325
Europe 363 352 382 377 382 361 370 345
South America 484 516 520 562 532 607 611 558
Asia 374 358 348 334 334 349 348 317
Surface Technologies 162 157 168 169 160 163 168 157
------- ------- ------- ------- ------- ------- ------- -------
Total sales $ 2,799 $ 2,774 $ 2,811 $ 2,840 $ 2,796 $ 2,896 $ 2,858 $ 2,702
= ======= == ======= = ======= = ======= == ======= = ======= = ======= = =======
OPERATING PROFIT
North America $ 367 $ 374 $ 363 $ 361 $ 353 $ 340 $ 326 $ 312
Europe 60 60 68 68 64 68 72 68
South America 92 112 110 115 118 140 139 133
Asia 69 52 68 57 60 58 63 53
Surface Technologies 28 25 27 26 24 26 27 25
------- ------- ------- ------- ------- ------- ------- -------
Segment operating profit 616 623 636 627 619 632 627 591
Cost reduction programs and other charges - net - (65) - - (1) - - -
------- ------- -- ------- ------- ------- -- ------- ------- -------
Total operating profit $ 616 $ 558 $ 636 $ 627 $ 618 $ 632 $ 627 $ 591
= ======= == ======= = ======= = ======= == ======= = ======= = ======= = =======
(a) Non-GAAP measure, see Appendix.
(b) 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 a liquidated subsidiary as a result of the divestiture of
the U.S. Homecare business. The fourth quarter 2011 includes: (i) a
pre-tax gain of $39 million ($37 million after-tax and
noncontrolling interests, or $0.12 per diluted share) related to a
gain on acquisition; and (ii) a pre-tax charge of $40 million ($31
million after-tax, or $0.10 per diluted share) related to the 2011
cost reduction program. Also, see the Appendix - Non-GAAP Measures
which provides Non-GAAP amounts that exclude the impact of these
items.
(c) Effective with the 2012 first quarter, Praxair changed the
measurement of its segment sales and operating profit. Prior period
amounts have been reclassified to conform to the current
presentation. See segment information.
PRAXAIR, INC. AND SUBSIDIARIES
APPENDIX
NON-GAAP MEASURES
(Millions of dollars, except per share data)
The following non-GAAP measures are intended to supplement an
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 2012 third-quarter cost reduction program, pension settlement
charge, and an income tax benefit; the 2011 fourth-quarter gain on
acquisition and cost reduction program; and the 2010 first-quarter
loss on Venezuela currency devaluation and the 2010 fourth-quarter
loss on the U.S. Homecare divestiture, Spanish income tax settlement
and repatriation tax benefit.
To be more consistent with the methodology used for annual reporting
and to improve comparability, effective in the third quarter 2012
the company changed the methodology that it uses for calculating the
following non-GAAP measures: Debt to capital, After-tax ROC, ROE,
Debt-to-Adjusted EBITDA. These calculations are now based on a
rolling four quarters approach for the earnings component of the
calculations (NOPAT, Net income- Praxair, Inc., Adjusted EBITDA) and
a five quarter average for the balance sheet component of the
calculation (capital, equity, debt). In addition, the company
decided to use net debt instead of debt in the new calculations. Net
debt is defined as debt less cash and cash equivalents. Prior-period
amounts have been adjusted to conform to the current methodology.
2012 2011 2010
----------------------------------------------------------- ----------------------------------------------------------- -----------------------------------------------
Year Q4 Q3 Q2 Q1 Year 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 $ 7,362 $ 7,136 $ 6,995 $ 6,856 $ 6,562 $ 6,310 $ 6,119 $ 5,838 $ 5,557 $ 5,077 $ 5,026 $ 5,404
Less: cash and cash equivalents (157) (108) (104) (107) (90) (125) (80) (86) (39) (71) (48) (376)
------ - ------ - ------ - ------ - ------ - ------ - ------ - ------ - ------ - ------ - ------ - ------ -
Net debt 7,205 7,028 6,891 6,749 6,472 6,185 6,039 5,752 5,518 5,006 4,978 5,028
Equity and redeemable noncontrolling interests:
Redeemable noncontrolling interests 252 243 232 232 220 - - - - - - -
Praxair, Inc. shareholders' equity 6,064 6,015 5,615 5,940 5,488 5,753 6,400 6,165 5,792 5,991 5,452 5,398
Noncontrolling interests 357 331 279 327 309 368 370 372 353 339 315 332
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
6,673 6,589 6,126 6,499 6,017 6,121 6,770 6,537 6,145 6,330 5,767 5,730
Total equity and redeemable noncontrolling interests
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Capital $ 13,878 $ 13,617 $ 13,017 $ 13,248 $ 12,489 $ 12,306 $ 12,809 $ 12,289 $ 11,663 $ 11,336 $ 10,745 $ 10,758
= ====== = ====== = ====== = ====== = ====== = ====== = ====== = ====== = ====== = ====== = ====== = ======
Debt-to-capital 51.9 % 51.6 % 52.9 % 50.9 % 51.8 % 50.3 % 47.1 % 46.8 % 47.3 % 44.2 % 46.3 % 46.7 %
------ - ------ - ------ - ------ - ------ - ------ - ------ - ------ - ------ - ------ - ------ - ------ -
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) $ 2,502 $ 616 $ 623 $ 636 $ 627 $ 2,469 $ 619 $ 632 $ 627 $ 591 $ 563 $ 551 $ 547 $ 506
Less: adjusted income taxes (a) (660) (162) (164) (169) (165) (647) (162) (166) (163) (156) (149) (146) (145) (132)
Less: tax benefit on interest expense (39) (10) (10) (9) (10) (41) (11) (10) (10) (10) (8) (8) (8) (9)
Add: income from equity investments 34 9 8 10 7 40 7 13 11 9 11 12 8 7
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Adjusted net operating profit after-tax (NOPAT) $ 1,837 $ 453 $ 457 $ 468 $ 459 $ 1,821 $ 453 $ 469 $ 465 $ 434 $ 417 $ 409 $ 402 $ 372
4-quarter trailing adjusted NOPAT $ 1,837 $ 1,837 $ 1,849 $ 1,846 $ 1,821 $ 1,785 $ 1,725 $ 1,662
Ending capital (see above) $ 13,878 $ 13,878 $ 13,617 $ 13,017 $ 13,248 $ 12,489 $ 12,489 $ 12,306 $ 12,809 $ 12,289 $ 11,663 $ 11,336 $ 10,745 $ 10,758
5-quarter average ending capital $ 13,250 $ 13,250 $ 12,935 $ 12,774 $ 12,628 $ 12,311 $ 12,311 $ 12,081 $ 11,768 $ 11,358
After-tax ROC (4-quarter trailing NOPAT / 13.9 % 13.9 % 14.2 % 14.5 % 14.6 % 14.8 % 14.8 % 14.8 % 14.7 % 14.6 %
5-quarter average capital)
------ - ------ - ------ - ------ - ------ - ------ - ------ - ------ - ------ - ------ -
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) $ 1,681 $ 414 $ 419 $ 429 $ 419 $ 1,666 $ 414 $ 429 $ 425 $ 398 $ 388 $ 377 $ 371 $ 340
4-quarter trailing adjusted net income - Praxair, Inc. (a) $ 1,681 $ 1,681 $ 1,691 $ 1,687 $ 1,666 $ 1,640 $ 1,588 $ 1,534
Ending Praxair, Inc. shareholders' equity $ 6,064 $ 6,064 $ 6,015 $ 5,615 $ 5,940 $ 5,488 $ 5,488 $ 5,753 $ 6,400 $ 6,165 $ 5,792 $ 5,991 $ 5,452 $ 5,398
5-quarter average Praxair shareholders' equity $ 5,824 $ 5,824 $ 5,762 $ 5,839 $ 5,949 $ 5,920 $ 5,920 $ 6,020 $ 5,960 $ 5,760
ROE (4-quarter trailing adjusted net income - Praxair, Inc. / 28.9 % 28.9 % 29.2 % 29.0 % 28.4 % 28.1 % 28.1 % 27.2 % 26.6 % 26.6 %
5-quarter average Praxair shareholders' equity)
------ - ------ - ------ - ------ - ------ - ------ - ------ - ------ - ------ - ------ -
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) $ 1,681 $ 414 $ 419 $ 429 $ 419 $ 1,666 $ 414 $ 429 $ 425 $ 398 $ 388 $ 377 $ 371 $ 340
Add: adjusted noncontrolling interests (a) 54 14 12 15 13 51 12 14 14 11 9 11 10 9
Add: interest expense - net 141 35 36 33 37 145 38 36 36 35 28 29 29 32
Add: adjusted income taxes (a) 660 162 164 169 165 647 162 166 163 156 149 146 145 132
Add: depreciation and amortization 1,001 254 248 247 252 1,003 249 256 254 244 240 227 230 228
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Adjusted EBITDA $ 3,537 $ 879 $ 879 $ 893 $ 886 $ 3,512 $ 875 $ 901 $ 892 $ 844 $ 814 $ 790 $ 785 $ 741
4-quarter trailing adjusted EBITDA $ 3,537 $ 3,533 $ 3,555 $ 3,554 $ 3,512 $ 3,451 $ 3,340 $ 3,233
Ending net debt (see above) $ 7,205 $ 7,205 $ 7,028 $ 6,891 $ 6,749 $ 6,472 $ 6,472 $ 6,185 $ 6,039 $ 5,752 $ 5,518 $ 5,006 $ 4,978 $ 5,028
5-quarter average net debt $ 6,869 $ 6,869 $ 6,665 $ 6,467 $ 6,239 $ 5,993 $ 5,993 $ 5,700 $ 5,459 $ 5,256
Debt-to-adjusted EBITDA ratio (5-quarter average net debt / 1.9 1.9 1.9 1.8 1.8 1.7 1.7 1.7 1.6 1.6
4-quarter trailing adjusted EBITDA)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
APPENDIX - Cont'd
(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 Third Quarter and full year 2012, the Fourth Quarter and
full year 2011 and the First Quarter, Fourth Quarter and full year
2010. Additionally, this table presents the percentage change in
Diluted EPS Guidance for the full year 2012.
Year Third Year Fourth Year Fourth First
Quarter Quarter Quarter Quarter
---------- --------- -------- --------- -------- --------- ---------
2012 2012 2011 2011 2010 2010 2010
------------- ------------ ----------- ------------ ----------- ------------ ------------
Adjusted Operating Profit and Operating
Profit Margin
----------------------------------------------------------
Reported operating profit $ 2,437 $ 558 $ 2,468 $ 618 $ 2,082 $ 505 $ 479
Add: Pension settlement charge 9 9 - - - - -
Add: Cost reduction programs 56 56 40 40 - - -
Less: Gain on acquisition - - (39) (39) - - -
Add: U.S. Homecare divestiture - - - - 58 58 -
Add: Venezuela currency devaluation - - - - 27 - 27
------ ----- ------ ----- ------ ----- -----
Total adjustments 65 65 1 1 85 58 27
------ ----- ------ ----- ------ ----- -----
Adjusted operating profit $ 2,502 $ 623 $ 2,469 $ 619 $ 2,167 $ 563 $ 506
== ====== == ===== = ====== == ===== = ====== == ===== == =====
Reported sales $ 11,224 $ 2,774 $ 11,252 $ 2,796 $ 10,116 $ 2,623 $ 2,428
Adjusted operating profit margin 22.3 % 22.5 % 21.9 % 22.1 % 21.4 % 21.5 % 20.8 %
Adjusted Income Taxes
----------------------------------------------------------
Reported income taxes $ 586 $ 90 $ 641 $ 156 $ 768 $ 346 $ 131
Add: Pension settlement charge 3 3 - - - - -
Add: Income tax benefit 55 55 - - - - -
Add: Cost reduction programs 16 16 9 9 - - -
Less: Gain on acquisition - - (3) (3) - - -
Less: Spanish income tax settlement - - - - (250) (250) -
Add: U.S. Homecare divestiture - - - - 18 18 -
Add: Repatriation tax benefit - - - - 35 35 -
Add: Venezuela currency devaluation - - - - 1 - 1
------ ----- ------ ----- ------ ----- -----
Total adjustments 74 74 6 6 (196) (197) 1
------ ----- ------ ----- ------ - ----- -- -----
Adjusted income taxes $ 660 $ 164 $ 647 $ 162 $ 572 $ 149 $ 132
== ====== == ===== = ====== == ===== = ====== == ===== == =====
Adjusted Effective Tax Rate
----------------------------------------------------------
Reported income before income taxes and equity investments $ 2,296 $ 522 $ 2,323 $ 580 $ 1,964 $ 477 $ 447
Add: Pension settlement charge 9 9 - - - - -
Add: Cost reduction programs 56 56 40 40 - - -
Less: Gain on acquisition - - (39) (39) - - -
Add: U.S. Homecare divestiture - - - - 58 58 -
Add: Venezuela currency devaluation - - - - 27 - 27
------ ----- ------ ----- ------ ----- -----
Total adjustments 65 65 1 1 85 58 27
------ ----- ------ ----- ------ ----- -----
Adjusted income before income taxes and equity investments $ 2,361 $ 587 $ 2,324 $ 581 $ 2,049 $ 535 $ 474
== ====== == ===== = ====== == ===== = ====== == ===== == =====
Adjusted income taxes (above) $ 660 $ 164 $ 647 $ 162 $ 572 $ 149 $ 132
Adjusted effective tax rate 28 % 28 % 28 % 28 % 28 % 28 % 28 %
Adjusted Noncontrolling interest
----------------------------------------------------------
Reported noncontrolling interest $ 52 $ 10 $ 50 $ 11
Add: Cost reduction programs 2 2 - -
Add: Gain on acquisition - - 1 1
------ ----- ------ -----
Total adjustments 2 2 51 12
------ ----- ------ -----
Adjusted noncontrolling interest $ 54 $ 12 $ 51 $ 12
-- ------ -- ----- - ------ -- -----
Adjusted Net Income - Praxair, Inc.
----------------------------------------------------------
Reported net income - Praxair, Inc. $ 1,692 $ 430 $ 1,672 $ 42 $ 1,195 $ 133 $ 314
Add: Pension settlement charge 6 6 - - - - -
Less: Income tax benefit (55) (55) - - - - -
Add: Cost reduction programs 38 38 31 31 - - -
Less: Gain on acquisition - - (37) (37) - - -
Add: Spanish income tax settlement - - - - 250 250 -
Add: U.S. Homecare divestiture - - - - 40 40 -
Less: Repatriation tax benefit - - - - (35) (35) -
Add: Venezuela currency devaluation - - - - 26 - 26
------ ----- ------ ----- ------ ----- -----
Total adjustments (11) (11) (6) (6) 281 255 26
------ -- ----- -- ------ - ----- -- ------ ----- -----
Adjusted net income - Praxair, Inc. $ 1,681 $ 419 $ 1,666 $ 414 $ 1,476 $ 388 $ 340
== ====== == ===== = ====== == ===== = ====== == ===== == =====
Adjusted Diluted EPS
----------------------------------------------------------
Reported diluted EPS $ 5.61 $ 1.43 $ 5.45 $ 1.38 $ 3.84 $ 0.43 $ 1.01
Add: Pension settlement charge 0.02 0.02 - - - - -
Less: Income tax benefit (0.18) (0.18) - - - - -
Add: Cost reduction programs 0.12 0.12 0.10 0.10 - - -
Less: Gain on acquisition - - (0.12) (0.12) - - -
Add: Spanish income tax settlement - - - - 0.80 0.80 -
Add: U.S. Homecare divestiture - - - - 0.13 0.13 -
Less: Repatriation tax benefit - - - - (0.11) (0.11) -
Add: Venezuela currency devaluation - - - - 0.08 - 0.08
------ ----- ------ ----- ------ ----- -----
Total adjustments (0.04) (0.04) (0.02) (0.02) 0.90 0.82 0.08
------ -- ----- -- ------ - ----- -- ------ ----- -----
Adjusted diluted EPS $ 5.57 $ 1.39 $ 5.43 $ 1.36 $ 4.74 $ 1.25 $ 1.09
== ====== == ===== = ====== == ===== = ====== == ===== == =====
Percentage Change in Adjusted Full Year
2013 Diluted EPS Guidance
------------------------------------------------------------------------------------------------------------------------
Full Year 2013
--------------------------
Low End High End
------------- ------------
Diluted EPS guidance $ 5.85 $ 6.10
2012 adjusted diluted EPS (see above) $ 5.57 $ 5.57
Percentage change from 2012 adjusted amounts 5 % 10 %
http://cts.businesswire.com/ct/CT?id=bwnews&sty=20130123005635r1&sid=cmtx4&distro=nx
SOURCE: Praxair, Inc.
Praxair, Inc.
Investors:
Kelcey Hoyt, 203-837-2118
kelcey_hoyt@praxair.com
or
Media:
Jacqueline Hunt, 203-837-2663
jacqueline_hunt@praxair.com
Copyright Business Wire 2013
Source Article from http://www.marketwatch.com/story/praxair-reports-record-full-year-2012-earnings-and-cash-flow-2013-01-23
