Praxair Reports Record First Quarter Results.Business Editors DANBURY Danbury (dăn`bĕr'ē, –bərē), city (1990 pop. 65,585), Fairfield co., SW Conn.; settled 1685, inc. as a city 1889. , Conn.--(BUSINESS WIRE)--April 23, 2001 Praxair Praxair, Inc. (NYSE: PX) is a Fortune 300 company. It is the largest supplier of industrial gases in North and South America, as well as one of the largest worldwide. The company's revenue in 2006 was US$8.3 billion. , Inc. (NYSE NYSE See: New York Stock Exchange : PX) today reported record first-quarter sales and earnings. Net income increased 11%, to $126 million, compared to $114 million a year ago, excluding the impact of a required one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. accounting change in the current quarter. On the same basis, the company reported diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of 77 cents compared to 71 cents a year ago. The accounting change reduced reported net income by $2 million, or 1 cent per share. Sales increased to $1,335 million versus $1,230 in the year-ago quarter. Results were driven by significant price gains in industrial gases, good demand growth outside the U.S. and much improved Praxair Surface Technologies results. "Despite weak demand for industrial gases in the U.S., our strong business portfolio delivered record results," said Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Dennis Dennis is a male first name derived from the Greco-Roman name Dionysius meaning "servant of Dionysus", the Thracian god of wine, which is ultimately derived from the Greek Dios (Διος, "of Zeus") combined with Nysos or Nysa (Νυσα), where the H. Reilley. Solid demand in refining refining, any of various processes for separating impurities from crude or semifinished materials. It includes the finer processes of metallurgy, the fractional distillation of petroleum into its commercial products, and the purifying of cane, beet, and maple sugar and oil and gas exploration and production, together with a favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. business mix, tempered the effects of the U.S. economic slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. . Demand declined in basic industry segments such as steel and durable goods durable goods Goods, such as appliances and automobiles, that have a useful life over a number of periods. Firms that produce durable goods are often subject to wide fluctuations in sales and profits. Also called consumer durables. for both industrial gases and for metal fabrication-related products, important to the company's U.S. packaged gases business. Overall, North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. segment performance improved due to better pricing and good demand growth in Mexico Mexico, city, Mexico Mexico or Mexico City, Span. Ciudad de México (Méjico), city (1990 pop. 8,236,960; 1991 met. area est. 20,899,000), central Mexico, capital and largest city of Mexico. . The company's industrial gases operations in South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. , Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). and Asia all delivered strong sales and operating profit Operating profit (or loss)Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. results, excluding currency impacts. Overall, currency translation effects reduced net income by $9 million, or 6 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. . Praxair Surface Technologies had record sales and performance improved in most major markets, led by semiconductor and industrial gas turbine turbine, rotary engine that uses a continuous stream of fluid (gas or liquid) to turn a shaft that can drive machinery. A water, or hydraulic, turbine is used to drive electric generators in hydroelectric power stations. engine markets. Commenting on the business outlook, Reilley said, "Our first-quarter results demonstrate the ability of Praxair to withstand significant business and currency headwinds." For the full year, the company is maintaining its previously disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). earnings guidance, which anticipates 10% growth in diluted earnings per share. The economic scenario A scenario (from Italian, that which is pinned to the scenery) is a synthetic description of an event or series of actions and events. In the Commedia dell'arte underlying this financial guidance anticipates a continued soft U.S. economy in the second quarter followed by a modest second-half recovery. Outside the U.S., the company continues to anticipate good economic growth, partly offset by a weaker currency environment. The company is also maintaining its guidance for 5% growth in diluted earnings per share for the downside Downside The dollar amount by which the market or a stock has the potential to fall. Notes: You might hear someone say that the downside on stock XYZ is $10. What that means is that the stock could fall by this amount if things got bad. scenario should the U.S. economy not improve as expected. For the second quarter, the company anticipates diluted earnings per share of 77 cents to 80 cents, compared to 76 cents reported in the second quarter of 2000. "This is the year for Praxair to deliver," said Reilley. "Keeping customers supplied in a period of uncertain energy and supply conditions will be as important as ever. And we intend to demonstrate financial performance that reflects the fundamental strengths of our industrial gases and surface technologies portfolio, our focused business and investment strategies, and our management team's commitment to deliver." Praxair is the largest industrial gases company in North and South America, and one of the largest worldwide, with 2000 sales of $5 billion. The company produces, sells and distributes atmospheric atmospheric /at·mos·pher·ic/ (at?mos-fer´ik) of or pertaining to the atmosphere. atmospheric of or pertaining to the atmosphere. and process gases, and high-performance Adj. 1. high-performance - modified to give superior performance; "a high-performance car" superior - of high or superior quality or performance; "superior wisdom derived from experience"; "superior math students" surface coatings Surface coating A substance applied to other materials to change the surface properties, such as color, gloss, resistance to wear or chemical attack, or permeability, without changing the bulk properties. . Praxair products, services and technology bring productivity and environmental benefits to a wide variety of industries, including aerospace, food and beverage F&B is a common abbreviation in the United States and Commonwealth countries, including Hong Kong. F&B is typically the widely accepted abbreviation for "Food and Beverage," which is the sector/industry that specializes in the conceptualization, the making of, and delivery of foods. , healthcare, semiconductor materials Semiconductor materials are insulators at absolute zero temperature that conduct electricity in a limited way at room temperature (see also Semiconductor). The defining property of a semiconductor material is that it can be doped with impurities that alter its electronic properties , steel, chemicals and refining, metal fabrication fabrication (fab´rikā´sh  n),n the construction or making of a restoration. , water treatment, glass and others. More information, including a summary of Praxair's financial outlook, can be found on the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at www.praxair.com. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. : The forward-looking statements contained in this announcement concerning demand for products and services, the expected macroeconomic mac·ro·ec·o·nom·ics n. (used with a sing. verb) The study of the overall aspects and workings of a national economy, such as income, output, and the interrelationship among diverse economic sectors. environment, sales and earnings growth, and other financial goals involve risks and uncertainties, and are subject to change based on various factors. These include the impact of changes in worldwide and national economies, the cost and availability of electric power, natural gas and other materials, development of operational efficiencies, changes in foreign currencies, changes in interest rates, the continued timely development and acceptance of new products and processes, the impact of competitive products and pricing, and the impact of tax and other legislation and regulation in the jurisdictions in which the company operates as well as new accounting rules and practices.
PRAXAIR, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(Millions of dollars, except per share data)
(UNAUDITED)
Quarter Ended March 31,
-----------------------
2001(a) 2000
------- ----
SALES $ 1,335 $ 1,230
Cost of sales 809 722
Selling, general and administrative 168 167
Depreciation and amortization 122 118
Research and development 16 16
Other income - net 4 6
--------- ---------
OPERATING PROFIT 224 213
Interest expense 56 52
--------- ---------
INCOME BEFORE INCOME TAXES 168 161
Provision for income taxes 39 37
--------- ---------
INCOME OF CONSOLIDATED ENTITIES 129 124
Minority interests (5) (12)
Income from equity investments 2 2
--------- ---------
INCOME BEFORE ACCOUNTING CHANGE 126 114
Cumulative effect of
accounting change(b) (2) --
--------- ---------
NET INCOME $ 124 $ 114
========= =========
PER SHARE DATA:
Basic earnings per share:
Before accounting change $ 0.78 $ 0.72
Accounting change(b) (.01) --
--------- ---------
Net income $ 0.77 $ 0.72
========= =========
Diluted earnings per share:
Before accounting change $ 0.77 $ 0.71
Accounting change(b) (.01) --
--------- ---------
Net income $ 0.76 $ 0.71
========= =========
Cash dividends $ 0.17 $ 0.155
========= =========
WEIGHTED AVERAGE SHARES OUTSTANDING (000'S):
Basic shares outstanding 160,773 159,433
Diluted shares outstanding 162,661 161,575
(a) Results for the quarter ended March 31, 2001 include a $45
million decrease in sales; a $13 million decrease in operating
profit; and a $9 million decrease in net income from currency
translation effects worldwide compared to the 2000 results.
(b) The accounting change is related to the adoption of Statement
of Financial Accounting Standards (SFAS) No. 133, Accounting
for Derivative Instruments and Hedging Activities, at January
1, 2001 (see Note 1 to the consolidated financial statements
included in Praxair's 2000 Annual Report). The impact of SFAS
No. 133 related to first quarter activity was not significant.
PRAXAIR, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(Millions of dollars)
March 31,
2001 December 31,
(Unaudited) 2000
----------- ------------
ASSETS
Cash and cash equivalents $ 43 $ 31
Accounts receivable 933 876
Inventories 316 297
Prepaid and other current assets 163 157
----- -----
TOTAL CURRENT ASSETS 1,455 1,361
Property, plant and equipment - net 4,688 4,771
Other assets 1,685 1,630
----- -----
TOTAL ASSETS $7,828 $7,762
===== =====
LIABILITIES AND EQUITY
Accounts payable $ 413 $ 409
Short-term debt 175 159
Current portion of long-term debt 333 341
Other current liabilities 512 530
----- -----
TOTAL CURRENT LIABILITIES 1,433 1,439
Long-term debt 2,714 2,641
Other long-term liabilities 1,179 1,167
----- -----
TOTAL LIABILITIES 5,326 5,247
Minority interests 139 138
Preferred stock 20 20
Shareholders' equity(a) 2,343 2,357
----- -----
TOTAL LIABILITIES AND EQUITY $7,828 $7,762
===== ======
(a) Shareholders' equity at March 31, 2001 includes a reduction of
$6 million related to SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities ($4 million related to the
adoption at January 1, 2001 and $2 million related to first
quarter activity).
PRAXAIR, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Millions of dollars)
(UNAUDITED)
Quarter Ended March 31,
-----------------------
2001 2000
---- ----
Net Cash provided by (used for):
Operating activities $ 186 $ 149
Investing activities (a) (250) (162)
Financing activities (b) 77 (38)
----- -----
13 (51)
Effect of exchange rate changes on
Cash and cash equivalents (1) --
----- -----
Change in cash and cash equivalents 12 (51)
Cash and cash equivalents,
beginning-of-year 31 76
----- -----
Cash and cash equivalents,
end-of-period $ 43 $ 25
===== =====
2001 2000
---- ----
(a) Investing activities include:
Capital expenditures $ (145) $ (159)
Acquisitions (106) (5)
Divestitures and asset sales 1 2
------ ------
$ (250) $ (162)
====== ======
2001 2000
---- ----
(b) Financing activities include:
Debt increases (reductions) - net $ 85 $ 77
Issuances of common stock 33 64
Purchases of common stock (6) (144)
Cash dividends (27) (24)
Minority transactions and other (8) (11)
------ ------
$ 77 $ (38)
====== ======
PRAXAIR, INC. AND SUBSIDIARIES
SEGMENT INFORMATION
(Millions of dollars)
(UNAUDITED)
Quarter Ended March 31,
----------------------
2001 2000
------ ------
SALES
North America $ 826 $ 722
South America(a,b) 175 186
Europe(a) 128 130
Surface Technologies(a) 153 147
All Other 53 45
------ ------
$1,335 $1,230
====== ======
SEGMENT OPERATING PROFIT
North America $ 145 $ 139
South America(a) 42 39
Europe(a) 32 32
Surface Technologies(a,c) 18 11
All Other(c) (6) (1)
Corporate (7) (7)
----- -----
$ 224 $ 213
===== =====
(a) South American results for the quarter ended March 31, 2001
include a $19 million decrease in sales, and a $5 million
decrease in operating profit from currency translation effects
versus 2000. European results for the quarter ended March 31,
2001 include a $12 million decrease in sales and a $4 million
decrease in operating profit from currency translation effects
versus 2000. Surface Technologies results for the quarter
ended March 31, 2001 include a $5 million decrease in sales
and a $1 million decrease in operating profit from currency
translation effects versus 2000.
(b) South America sales for the 2000 quarter include $12 million
related to a business that was divested in the third quarter
of 2000.
(c) Surface Technologies' results for the quarter ended March 31,
2000 include a $5 million charge relating to severance costs
and other exit costs. The All Other segment results for the
quarter ended March 31, 2000 includes a $5 million recovery
from the cash settlement of litigation related to a business
that was previously sold.
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