10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

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FORM 10-K

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þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2016

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number 1-11037

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Praxair, Inc.

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Praxair, Inc.
10 Riverview Drive	State of incorporation: Delaware
Danbury, Connecticut 06810-5113	IRS identification number: 06-124 9050
Tel. (203) 837-2000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:	Registered on:
Common Stock ($0.01 par value)	New York Stock Exchange
1.50% Euro notes due 2020	New York Stock Exchange
1.20% Euro notes due 2024	New York Stock Exchange
1.625% Euro notes due 2025	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  þ    No  ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes¨   No  þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yesþ    No¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  þ    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  þ

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  þ    Accelerated filer  ¨    Non- accelerated filer  ¨    Smaller reporting company  ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes¨    Noþ

The aggregate market value of the voting and non-voting common stock held by non-affiliates as of June 30, 2016, was approximately $32 billion (based on the closing sale price of the stock on that date as reported on the New York Stock Exchange).

At January 31, 2017, 285,071,181 shares of common stock of Praxair, Inc. were outstanding.

Documents incorporated by reference:

Portions of the Proxy Statement of Praxair, Inc., for its 2017 Annual Meeting of Shareholders, are incorporated in Part III of this report.

PRAXAIR, INC.

ANNUAL REPORT ON FORM 10-K

For the fiscal year ended December 31, 2016

TABLE OF CONTENTS

		Page
Part I
Item 1:	Business	3
Item 1A:	Risk Factors	7
Item 1B:	Unresolved Staff Comments	12
Item 2:	Properties	12
Item 3:	Legal Proceedings	12
Item 4:	Mine Safety Disclosures	12
Part II
Item 5:	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	13
Item 6:	Selected Financial Data	15
Item 7:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 7A:	Quantitative and Qualitative Disclosures About Market Risk	51
Item 8:	Financial Statements and Supplementary Data	52
Item 9:	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	103
Item 9A:	Controls and Procedures	103
Item 9B:	Other Information	103
Part III
Item 10:	Directors, Executive Officers and Corporate Governance	104
Item 11:	Executive Compensation	104
Item 12:	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	104
Item 13:	Certain Relationships and Related Transactions and Director Independence	105
Item 14:	Principal Accounting Fees and Services	105
Part IV
Item 15:	Exhibits and Financial Statement Schedules	106
Signatures		107
Index to Exhibits		108

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Praxair, Inc. and Subsidiaries

PART I

ITEM 1.     BUSINESS

General

Praxair, Inc. (Praxair or the company) was founded in 1907 and became an independent publicly traded company in 1992. Praxair was the first company in the United States to produce oxygen from air using a cryogenic process and continues to be a technological innovator in the industrial gases industry.

Praxair is a leading industrial gas company in North and South America and one of the largest worldwide. Praxair’s primary products in its industrial gases business are atmospheric gases (oxygen, nitrogen, argon, rare gases) and process gases (carbon dioxide, helium, hydrogen, electronic gases, specialty gases, acetylene). The company also designs, engineers, and builds equipment that produces industrial gases primarily for internal use. The company’s surface technologies segment, operated through Praxair Surface Technologies, Inc., supplies wear-resistant and high-temperature corrosion-resistant metallic and ceramic coatings and powders. Praxair’s sales were $10,534 million, $10,776 million, and $12,273 million for 2016, 2015, and 2014, respectively. Refer to Item 7, Management's Discussion and Analysis, for a discussion of consolidated sales and Note 18 to the consolidated financial statements for additional information related to Praxair’s reportable segments.

Praxair serves a diverse group of industries including healthcare, petroleum refining, manufacturing, food, beverage carbonation, fiber-optics, steel making, aerospace, chemicals and water treatment. In 2016, 94% of sales were generated in four geographic segments (North America, Europe, South America and Asia) primarily from the sale of industrial gases, with the balance generated from the surface technologies segment. Praxair provides a competitive advantage to its customers by continuously developing new products and applications, which allow them to improve their productivity, energy efficiency and environmental performance.

Industrial Gases Products and Manufacturing Processes

Atmospheric gases are the highest volume products produced by Praxair. Using air as its raw material, Praxair produces oxygen, nitrogen and argon through several air separation processes of which cryogenic air separation is the most prevalent. Rare gases, such as krypton, neon and xenon, are also produced through cryogenic air separation. As a pioneer in the industrial gases industry, Praxair is a leader in developing a wide range of proprietary and patented applications and supply systems technology. Praxair also led the development and commercialization of non-cryogenic air separation technologies for the production of industrial gases. These technologies open important new markets and optimize production capacity for the company by lowering the cost of supplying industrial gases. These technologies include proprietary vacuum pressure swing adsorption (“VPSA”) and membrane separation to produce gaseous oxygen and nitrogen, respectively. Praxair also manufactures precious metal and ceramic sputtering targets used primarily in the production of semiconductors.

Process gases, including carbon dioxide, hydrogen, carbon monoxide, helium, specialty gases and acetylene are produced by methods other than air separation. Most carbon dioxide is purchased from by-product sources, including chemical plants, refineries and industrial processes or is recovered from carbon dioxide wells. Carbon dioxide is processed in Praxair’s plants to produce commercial and food-grade carbon dioxide. Hydrogen and carbon monoxide can be produced by either steam methane reforming or auto-thermal reforming of natural gas or other feed streams such as naphtha. Hydrogen is also produced by purifying by-product sources obtained from the chemical and petrochemical industries. Most of the helium sold by Praxair is sourced from certain helium-rich natural gas streams in the United States, with additional supplies being acquired from outside the United States. Acetylene is primarily sourced as a chemical by-product, but may also be produced from calcium carbide and water.

Industrial Gases Distribution

There are three basic distribution methods for industrial gases: (i) on-site or tonnage; (ii) merchant or bulk liquid; and (iii) packaged or cylinder gases. These distribution methods are often integrated, with products from all three supply modes coming from the same plant. The method of supply is generally determined by the lowest cost means of meeting the customer’s needs, depending upon factors such as volume requirements, purity, pattern of usage, and the form in which the product is used (as a gas or as a cryogenic liquid).

On-site. Customers that require the largest volumes of product (typically oxygen, nitrogen and hydrogen) and that have a relatively constant demand pattern are supplied by cryogenic and process gas on-site plants. Praxair constructs plants on or adjacent to these customers’ sites and supplies the product directly to customers by pipeline. On-site product supply contracts generally are total requirement contracts with terms typically ranging from 10-20 years and containing

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minimum purchase requirements and price escalation provisions. Many of the cryogenic on-site plants also produce liquid products for the merchant market. Therefore, plants are typically not dedicated to a single customer. Advanced air separation processes allow on-site delivery to customers with smaller volume requirements. Customers using these systems usually enter into requirement contracts with terms typically ranging from 5-15 years.

Merchant. The merchant business is generally associated with distributable liquid oxygen, nitrogen, argon, carbon dioxide, hydrogen and helium. The deliveries generally are made from Praxair’s plants by tanker trucks to storage containers at the customer's site which are owned and maintained by Praxair and leased to the customer. Due to distribution cost, merchant oxygen and nitrogen generally have a relatively small distribution radius from the plants at which they are produced. Merchant argon, hydrogen and helium can be shipped much longer distances. The customer agreements used in the merchant business are usually three-to seven-year requirement contracts.

Packaged Gases. Customers requiring small volumes are supplied products in metal containers called cylinders, under medium to high pressure. Packaged gases include atmospheric gases, carbon dioxide, hydrogen, helium, acetylene and related products. Praxair also produces and distributes in cylinders a wide range of specialty gases and mixtures. Cylinders may be delivered to the customer’s site or picked up by the customer at a packaging facility or retail store. Packaged gases are generally sold under one to three-year supply contracts and through purchase orders.

A substantial amount of the cylinder gases sold in the United States is distributed by independent distributors that buy merchant gases in liquid form and repackage the products in their facilities. Packaged gas distributors, including Praxair, also distribute hardgoods and welding equipment purchased from independent manufacturers. Over time, Praxair has acquired a number of independent industrial gases and welding products distributors at various locations in the United States and continues to sell merchant gases to other independent distributors. Between its own distribution business, joint ventures and sales to independent distributors, Praxair is represented in 48 states, the District of Columbia and Puerto Rico.

Surface Technologies

Praxair Surface Technologies is a leading worldwide supplier of coating services and thermal spray consumables to customers in the aircraft, energy, printing, primary metals, petrochemical, textile, and other industries. Its coatings are used to provide wear resistance, corrosion protection, thermal insulation, and many other surface-enhancing functions which serve to extend component life, enable optimal performance, and reduce operating costs. It also manufactures a complete line of electric arc, plasma and wire spray, and high-velocity oxy-fuel ("HVOF") equipment.

Inventories – Praxair carries inventories of merchant and cylinder gases, hardgoods and coatings materials to supply products to its customers on a reasonable delivery schedule. On-site plants and pipeline complexes have limited inventory. Inventory obsolescence is not material to Praxair’s business.

Customers – Praxair is not dependent upon a single customer or a few customers.

International – Praxair is a global enterprise with approximately 56% of its 2016 sales outside of the United States. It conducts industrial gases business through consolidated companies in Argentina, Bahrain, Belgium, Bolivia, Brazil, Canada, Chile, China, Colombia, Costa Rica, Denmark, Dominican Republic, France, Germany, Ghana, India, Ireland, Italy, Japan, Mexico, the Netherlands, Norway, Panama, Paraguay, Peru, Portugal, Puerto Rico, Russia, South Korea, Spain, Sweden, Taiwan, Thailand, United Arab Emirates, the United Kingdom, and Uruguay. Societa Italiana Acetilene & Derivati S.p.A. ("S.I.A.D."), an Italian company accounted for as an equity company, also has established positions in Austria, Bosnia, Bulgaria, Croatia, the Czech Republic, Hungary, Romania, Russia, Serbia, Slovakia, Slovenia and Ukraine. Refrigeration and Oxygen Company Limited ("ROC"), a Middle Eastern company accounted for as an equity company, has operations in the United Arab Emirates, Kuwait and Qatar. Praxair’s surface technologies segment has operations in Brazil, Canada, China, France, Germany, India, Italy, Japan, Singapore, South Korea and the United Kingdom.

Praxair’s international business is subject to risks customarily encountered in foreign operations, including fluctuations in foreign currency exchange rates, import and export controls, and other economic, political and regulatory policies of local governments. Also, see Item 1A. “Risk Factors” and Item 7A. “Quantitative and Qualitative Disclosures About Market Risk.”

Seasonality – Praxair’s business is generally not subject to seasonal fluctuations to any significant extent.

Research and Development – Praxair’s research and development is directed toward developing new and improved methods for the production and distribution of industrial gases and the development of new markets and applications for these gases. This results in the development of new advanced air separation and hydrogen process technologies and the frequent introduction of new industrial gas applications. Research and development for industrial gases is principally conducted at Tonawanda, New York and Burr Ridge, Illinois.

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Praxair conducts research and development for its surface technologies to improve the quality and durability of coatings and the use of specialty powders for new applications and industries. Surface technologies research is conducted at Indianapolis, Indiana.

Patents and Trademarks – Praxair owns or licenses a large number of United States and foreign patents that relate to a wide variety of products and processes. Praxair’s patents expire at various times over the next 20 years. While these patents and licenses are considered important to our individual businesses, Praxair does not consider its business as a whole to be materially dependent upon any one particular patent, or patent license, or family of patents. Praxair also owns a large number of valuable trademarks. Only the "Praxair" trademark is important to our business as a whole.

Raw Materials and Energy Costs – Energy is the single largest cost item in the production and distribution of industrial gases. Most of Praxair’s energy requirements are in the form of electricity, natural gas and diesel fuel for distribution.

The supply of energy has not been a significant issue in the geographic areas where the company conducts business. However, energy availability and price is unpredictable and may pose unforeseen future risks.

For carbon dioxide, carbon monoxide, helium, hydrogen, specialty gases and surface technologies, raw materials are largely purchased from outside sources. Praxair has contracts or commitments for, or readily available sources of, most of these raw materials; however, their long-term availability and prices are subject to market conditions.

Competition – Praxair operates within a highly competitive environment. Some of its competitors are larger in size and capital base than Praxair. Competition is based on price, product quality, delivery, reliability, technology and service to customers.

Major competitors in the industrial gases industry both in the United States and worldwide include Air Products and Chemicals, Inc., L’Air Liquide S.A., and Linde AG. Principal competitors for the surface technologies business are Chromalloy Gas Turbine LLC, a subsidiary of Sequa Corporation, Bodycote, PLC, and OC Oerlikon Corp AG. There are other industrial gas and surface coating competitors that compete on a local geography basis.

Employees and Labor Relations – As of December 31, 2016, Praxair had 26,498 employees worldwide. Of this number, 10,182 are employed in the United States. Praxair has collective bargaining agreements with unions at numerous locations throughout the world, which expire at various dates. Praxair considers relations with its employees to be good.

Environment – Information required by this item is incorporated herein by reference to the section captioned “Management’s Discussion and Analysis – Environmental Matters” in Item 7 of this 10-K.

Available Information – The company makes its periodic and current reports available, free of charge, on or through its website, www.praxair.com, as soon as practicable after such material is electronically filed with, or furnished to, the Securities and Exchange Commission ("SEC"). Investors may also access from the company website other investor information such as press releases and presentations. Information on the company’s website is not incorporated by reference herein.

In addition, the public may read and copy any materials filed with the SEC at the SEC’s Public Reference Room located at 100 F Street NE, Washington, D.C. 20549. The public may also obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains a website, www.sec.gov, that contains reports, proxy information statements and other information regarding issuers that file electronically.

Executive Officers – The following Executive Officers have been elected by the Board of Directors and serve at the pleasure of the Board. It is expected that the Board will elect officers annually following each annual meeting of shareholders.

Stephen F. Angel, 61, is Chief Executive Officer of Praxair, Inc. since January 1, 2007, and Chairman since May 1, 2007. Before becoming the Chief Executive Officer, Mr. Angel served as President and Chief Operating Officer from March to December 2006, and as Executive Vice President from 2001 to March 2006. Prior to joining Praxair in 2001, Mr. Angel spent 22 years in a variety of management positions with General Electric. Mr. Angel is a director of PPG Industries, Inc. where he serves on the Officers-Directors Compensation Committee, and is the Chairman of the Technology and Environment Committee. He is also a member of the executive committee of The Business Council, co-chairs the U.S. - Brazil CEO Forum, a member of the Board of the U.S. - China Business Council and its Nominating Committee.

Guillermo Bichara, 42, was appointed Vice President, General Counsel and Corporate Secretary of Praxair, Inc. effective January 1, 2015. Prior to this, from 2013-2014, he was Associate General Counsel and Assistant Secretary. From 2011-2013, Mr. Bichara served as Associate General Counsel with responsibility for Praxair Europe, Praxair Mexico and corporate transactions. He was Vice President and General Counsel of Praxair Asia from 2007-2011, and joined Praxair in 2006 as director of legal affairs at Praxair Mexico. Prior to joining Praxair, Mr. Bichara served as corporate counsel at

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CEMEX, Mexico's global leader in the building materials industry, and was a foreign associate and counsel, respectively, at the law firms of Skadden, Arps, Slate, Meagher & Flom and White & Case.

Kelcey E. Hoyt, 47, was named Vice President and Controller effective August 1, 2016. Prior to becoming Controller, she served as Praxair’s Director of Investor Relations since 2010. She joined Praxair in 2002 and served as Director of Corporate Accounting and SEC Reporting through 2008, and later served as Controller for various divisions within Praxair’s North American Industrial Gas business. Previously, she had five years of experience in audit at KPMG, LLP. She is a certified public accountant.

Eduardo F. Menezes, 53, was promoted to Executive Vice President from Senior Vice President effective March 1, 2012. He oversees Praxair’s businesses in Asia, Europe, Mexico, and South America. From 2010 to March 2011, he was a Vice President of Praxair with responsibility for the North American Industrial Gases business. From 2007 to 2010, he was President of Praxair Europe. He served as Managing Director of Praxair’s business in Mexico from 2004 to 2007, as Vice President and General Manager for Praxair Distribution, Inc. from 2003 to 2004 and as Vice President, U.S. West Region, for North American Industrial Gases, from 2000 to 2003.

Anne K. Roby, age 52, was named Senior Vice President on January 1, 2014, responsible for Global Supply Systems, R&D, Global Market Development, Global Operations Excellence, Global Procurement, Sustainability and Safety, Health and Environment. From 2011-2013, she served as President of Praxair Asia, responsible for Praxair’s industrial gases business in China, India, South Korea and Thailand as well as the electronics market globally. In 2010, Dr. Roby became President of Praxair Electronics, after having served as Vice President, Global Sales, for Praxair from 2009-2010. Prior to this, she was Vice President of the U.S. South Region from 2006-2009. Dr. Roby joined Praxair in 1991 as a development associate in the Company’s R&D organization and was promoted to other positions of increasing responsibility.

Scott E. Telesz, 49, was promoted to Executive Vice President from Senior Vice President, effective March 1, 2012. He is responsible for Praxair’s U.S. atmospheric gases businesses, and it’s business in Canada, Praxair Distribution, Praxair Surface Technologies, and Helium-Rare Gases. Before joining Praxair in 2010, he was a Vice President from 2007 to 2010 of SABIC Innovative Plastics, a major division of Riyadh-based Saudi Basic Industries Corporation, a global manufacturer of chemicals, fertilizers, plastics and metals. From 1998 to 2007, he held a variety of general management positions with General Electric, and from 1989 to 1998, Mr. Telesz held several positions, including Engagement Manager, in the United States and Australia, with McKinsey & Company.

Matthew J. White, 44, was appointed Senior Vice President and Chief Financial Officer effective January 1, 2014. Prior to this, Mr. White was President of Praxair Canada from 2011-2014. Mr. White joined Praxair in 2004 as finance director of Praxair’s largest business unit, North American Industrial Gases. In 2008, he became Vice President and Controller of Praxair, then was named Vice President and Treasurer in 2010. Before joining Praxair, Mr. White was vice president, finance, at Fisher Scientific and before that he held various financial positions, including group controller, at GenTek, a manufacturing and performance chemicals company.

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ITEM 1A.     RISK FACTORS

Due to the size and geographic reach of the company’s operations, a wide range of factors, many of which are outside of the company’s control, could materially affect the company’s future operations and financial performance. Management believes the following risks may significantly impact the company:

General Economic Conditions – Weakening economic conditions in markets in which the company does business may adversely impact the company’s financial results and/or cash flows.

Praxair serves a diverse group of industries across more than 50 countries which generally leads to financial stability through various business cycles. However, a broad decline in general economic or business conditions in the industries served by its customers could adversely affect the demand for Praxair’s products and impair the ability of our customers to satisfy their obligations to the company, resulting in uncollected receivables and/or unanticipated contract terminations or project delays. In addition, many of the company’s customers are in businesses that are cyclical in nature, such as the chemicals, electronics, metals and energy industries. Downturns in these industries may adversely impact the company during these cycles. Additionally, such conditions could impact the utilization of the company’s manufacturing capacity which may require the company to recognize impairment losses on tangible assets such as property, plant and equipment as well as intangible assets such as goodwill, customer relationships or intellectual property.

Cost and Availability of Raw Materials and Energy – Increases in the cost of energy and raw materials and/or disruption in the supply of these materials could result in lost sales or reduced profitability.

Energy is the single largest cost item in the production and distribution of industrial gases. Most of Praxair’s energy requirements are in the form of electricity, natural gas and diesel fuel for distribution. Praxair attempts to minimize the financial impact of variability in these costs through the management of customer contracts and reducing demand through operational productivity and energy efficiency. Large customer contracts typically have escalation and pass-through clauses to recover energy and feedstock costs. Such attempts may not successfully mitigate cost variability which could negatively impact its financial condition or results of operations. The supply of energy has not been a significant issue in the geographic areas where it conducts business. However, regional energy conditions are unpredictable and may pose future risk.

For carbon dioxide, carbon monoxide, helium, hydrogen, specialty gases and surface technologies, raw materials are largely purchased from outside sources. Where feasible, Praxair sources several of these raw materials, including carbon dioxide, hydrogen and calcium carbide, as chemical or industrial byproducts. In addition, Praxair has contracts or commitments for, or readily available sources of, most of these raw materials; however, their long-term availability and prices are subject to market conditions. A disruption in supply of such raw materials could impact the company’s ability to meet contractual supply commitments.

International Events and Circumstances – The company’s international operations are subject to the risks of doing business abroad and international events and circumstances may adversely impact its business, financial condition or results of operations.

Praxair has substantial international operations which are subject to risks including devaluations in currency exchange rates, transportation delays and interruptions, political and economic instability and disruptions, restrictions on the transfer of funds, the imposition of duties and tariffs, import and export controls, changes in governmental policies, labor unrest, possible nationalization and/or expropriation of assets, domestic and international tax laws and compliance with governmental regulations. These events could have an adverse effect on international operations in the future by reducing the demand for its products, decreasing the prices at which it can sell its products, reducing the U.S. dollar value of revenue from international operations or otherwise having an adverse effect on its business.

The United Kingdom’s planned exit from the European Union has caused volatility in currency exchange rates as well as increased economic uncertainty. These factors could adversely affect our business and financial results primarily in Europe.

Global Financial Markets Conditions – Macroeconomic factors may impact the company’s ability to obtain financing or increase the cost of obtaining financing which may adversely impact the company’s financial results and/or cash flows.

Volatility and disruption in the U.S. and global credit and equity markets, from time to time, could make it more difficult for Praxair to obtain financing for its operations and/or could increase the cost of obtaining financing. In addition, the company’s borrowing costs can be affected by short and long-term debt ratings assigned by independent rating agencies which are based, in significant part, on the company’s performance as measured by certain criteria such as interest coverage and leverage ratios. A decrease in these debt ratings could increase the cost of borrowing or make it more difficult to obtain financing. While the impact of volatility in the global credit markets cannot be predicted with certainty, the

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company believes that it has sufficient operating flexibility, cash reserves, and funding sources to maintain adequate amounts of liquidity to meet its business needs around the world.

Competitor Actions – The inability to effectively compete could adversely impact results of operations.

Praxair operates within a highly competitive environment worldwide. Competition is based on price, product quality, delivery, reliability, technology and service to customers. Competitors’ behavior related to these areas could potentially have significant impacts on the company’s financial results.

Governmental Regulations – The company is subject to a variety of United States and foreign government regulations. Changes in these regulations could have an adverse impact on the business, financial position and results of operations.

The company is subject to regulations in the following areas, among others:

• Environmental protection including climate change;

• Domestic and international tax laws and currency controls;

• Safety;

• Securities laws (e.g., SEC and generally accepted accounting principles in the United States);

• Trade and import/ export restrictions;

• Antitrust matters;

• Global anti-bribery laws, including the U.S. Foreign Corrupt Practices Act;

• Healthcare regulations

Changes in these or other regulatory areas may impact the company’s profitability, may require the company to spend additional resources to comply with the regulations, or may restrict the company’s ability to compete effectively in the marketplace. Noncompliance with such laws and regulations could result in penalties or sanctions that could have an adverse impact on the company’s financial results and/or reputation. Environmental protection is discussed further below.

Praxair is subject to various environmental and occupational health and safety laws and regulations, including those governing the discharge of pollutants into the air or water, the storage, handling and disposal of chemicals, hazardous substances and wastes, the remediation of contamination, the regulation of greenhouse gas emissions, and other potential climate change initiatives. Violations of these laws could result in substantial penalties, third party claims for property damage or personal injury, or sanctions. The company may also be subject to liability for the investigation and remediation of environmental contamination at properties that it owns or operates and at other properties where Praxair or its predecessors have operated or arranged for the disposal of hazardous wastes. Although management does not believe that any such liabilities will have a material adverse impact on its financial position and results of operations, management cannot provide assurance that such costs will not increase in the future or will not become material. See the section captioned “Management’s Discussion and Analysis – Environmental Matters” in Item 7 of this Form 10-K.

Catastrophic Events – Catastrophic events could disrupt the operations of the company and/or its customers and suppliers and may have a significant adverse impact on the results of operations.

The occurrence of catastrophic events or natural disasters such as extreme weather, including hurricanes and floods; health epidemics; acts of war or terrorism; could disrupt or delay the company’s ability to produce and distribute its products to customers and could potentially expose the company to third-party liability claims. In addition, such events could impact the company’s customers and suppliers resulting in temporary or long-term outages and/or the limitation of supply of energy and other raw materials used in normal business operations. To mitigate these risks, Praxair evaluates the direct and indirect business risks through business impact analysis and conducts regular reviews of these business risks with management. Subsequently, Praxair establishes policies and sets priorities; consults with vendors, insurance providers and industry experts; and makes investments in facilities with suitably resilient design and technology, in order to reduce such impact to the business. Despite these steps, however, these situations are outside the company’s control and may have a significant adverse impact on the company’s financial results.

Retaining Qualified Personnel – The inability to attract and retain qualified personnel may adversely impact the company’s business.

If Praxair fails to attract, hire and retain qualified personnel, the company may not be able to develop, market or sell its products or successfully manage its business. Praxair is dependent upon its highly skilled, experienced and efficient workforce to be successful. Much of Praxair’s competitive advantage is based on the expertise and experience of its key

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personnel regarding its marketing, technology, manufacturing and distribution infrastructure, systems and products. The inability to attract and hire qualified individuals or the loss of key employees in very skilled areas could have a negative effect on the company’s financial results.

Technological Advances – If the company fails to keep pace with technological advances in the industry or if new technology initiatives do not become commercially accepted, customers may not continue to buy the company’s products and results of operations could be adversely affected.

Praxair’s research and development is directed toward developing new and improved methods for the production and distribution of industrial gases and the development of new markets and applications for the use of these gases. This results in the frequent introduction of new industrial gas applications and the development of new advanced air separation process technologies. The company also conducts research and development for its surface technologies to improve the quality and durability of coatings and the use of specialty powders for new applications and industries. As a result of these efforts, the company develops new and proprietary technologies and employs necessary measures to protect such technologies within the global geographies in which the company operates. These technologies help Praxair to create a competitive advantage and to provide a platform for the company to grow its business. If Praxair’s research and development activities do not keep pace with competitors or if it does not create new technologies that benefit customers, future results of operations could be adversely affected.

Litigation and Governmental Investigations – The outcomes of litigation and governmental investigations may affect the company’s financial results.

Praxair is subject to various lawsuits and governmental investigations arising out of the normal course of business that may result in adverse outcomes. These actions are based upon alleged environmental, tax, antitrust and personal injury claims, among others. Adverse outcomes in some or all of the claims pending may result in significant monetary damages or injunctive relief that could adversely affect its ability to conduct business. While management currently believes that resolving all of these matters, individually or in the aggregate, will not have a material adverse impact on the company’s financial position or liquidity, the litigation and other claims Praxair faces are subject to inherent uncertainties and management’s view of these matters may change in the future. There exists the possibility of a material adverse impact on the company’s results of operations for the period in which the effect of an unfavorable final outcome becomes probable and reasonably estimable.

Tax Liabilities – Potential tax liabilities could adversely impact the company’s financial position and results of operations.

Praxair is subject to income and other taxes in both the United States and numerous foreign jurisdictions. The determination of the company’s worldwide provision for income taxes and other tax liabilities requires judgment and is based on diverse legislative and regulatory structures that exist in the various jurisdictions where the company operates. Although management believes its estimates are reasonable, the ultimate tax outcome may differ from the amounts recorded in its financial statements and may materially affect the company’s financial results for the period when such determination is made. See Notes 5 and 17 to the consolidated financial statements of this Form 10-K.

Pension Liabilities – Risks related to our pension benefit plans may adversely impact our results of operations and cash flows.

Pension benefits represent significant financial obligations that will be ultimately settled in the future with employees who meet eligibility requirements. Because of the uncertainties involved in estimating the timing and amount of future payments and asset returns, significant estimates are required to calculate pension expense and liabilities related to the company’s plans. The company utilizes the services of independent actuaries, whose models are used to facilitate these calculations. Several key assumptions are used in the actuarial models to calculate pension expense and liability amounts recorded in the consolidated financial statements. In particular, significant changes in actual investment returns on pension assets, discount rates, or legislative or regulatory changes could impact future results of operations and required pension contributions. For information regarding the potential impacts regarding significant assumptions used to estimate pension expense, including discount rates and the expected long-term rates of return on plan assets. See “Critical Accounting Policies – Pension Benefits” included in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 of this Form 10-K.

Operational Risks – Operational risks may adversely impact the company’s business or results of operations.

Praxair’s operating results are dependent on the continued operation of its production facilities and its ability to meet customer contract requirements and other needs. Insufficient or excess capacity threatens the company’s ability to generate competitive profit margins and may expose the company to liabilities related to contract commitments. Operating results are also dependent on the company’s ability to complete new construction projects on time, on budget and in accordance

9

with performance requirements. Failure to do so may expose the business to loss of revenue, potential litigation and loss of business reputation.

Also inherent in the management of the company’s production facilities and delivery systems, including storage, vehicle transportation and pipelines, are operational risks that require continuous training, oversight and control. Material operating failures at production, storage facilities or pipelines, including fire, toxic release and explosions, or the occurrence of vehicle transportation accidents could result in loss of life, damage to the environment, loss of production and/or extensive property damage, all of which may negatively impact the company’s financial results.

Information Technology Systems – The Company may be subject to information technology system ("IT") failures, network disruptions and breaches in data security.

Praxair relies on IT systems and networks for business and operational activities, and also stores and processes sensitive business and proprietary information in these systems and networks. These systems are susceptible to outages due to fire, flood, power loss, telecommunications failures, viruses, break-ins and similar events, or breaches of security. Management has taken steps to address these risks and concerns by implementing advanced security technologies, internal controls, network and data center resiliency and recovery process. Despite these steps, however, operational failures and breaches of security from increasingly sophisticated cyber threats could lead to the loss or disclosure of confidential information, result in regulatory actions and have a material adverse impact on Praxair's operations, reputation and financial results.

Acquisitions and Joint Ventures – The inability to effectively integrate acquisitions or collaborate with joint venture partners could adversely impact the company’s financial position and results of operations.

Praxair has evaluated, and expects to continue to evaluate, a wide array of potential strategic acquisitions and joint ventures. Many of these transactions, if consummated, could be material to its financial condition and results of operations. In addition, the process of integrating an acquired company, business or group of assets may create unforeseen operating difficulties and expenditures. Although historically the company has been successful with its acquisition strategy and execution, the areas where the company may face risks include:

• The need to implement or remediate controls, procedures and policies appropriate for a larger public company at companies that prior to the acquisition lacked these controls, procedures and policies;

• Diversion of management time and focus from operating existing business to acquisition integration challenges;

• Cultural challenges associated with integrating employees from the acquired company into the existing organization;

• The need to integrate each company’s accounting, management information, human resource and other administrative systems to permit effective management;

• Difficulty with the assimilation of acquired operations and products;

• Failure to achieve targeted synergies; and

• Inability to retain key employees and business relationships of acquired companies.

Foreign acquisitions and joint ventures involve unique risks in addition to those mentioned above, including those related to integration of operations across different cultures and languages, currency risks and the particular economic, political and regulatory risks associated with specific countries. Also, the anticipated benefit of the company’s acquisitions may not materialize. Future acquisitions or dispositions could result in potentially dilutive issuances of equity securities, the incurrence of debt, contingent liabilities or amortization expenses, or impairments of goodwill, any of which could adversely impact the company’s financial results.

Intended potential business combination with Linde - Risks in connection with the potential business combination may adversely impact Praxair’s business, financial condition and results of operations.

On December 20, 2016, Praxair and Linde AG (Linde) jointly issued a press release announcing that Praxair and Linde intend to combine in a merger of equals under a new holding company through an all-stock transaction (the business combination) and signed a non-binding term sheet. The potential business combination with Linde involves certain risks, which may adversely impact Praxair’s business, financial condition and results of operations, and the combined company may not realize all of the anticipated benefits of the intended potential business combination if and when the combination is completed. Risks in connection with the proposed business combination, which may result in significant costs and delays, include:

10

• the expected timing and likelihood of the entry into or the completion of the proposed business combination, including the timing, receipt and terms and conditions of any required governmental and regulatory approvals of the proposed business combination that could reduce anticipated benefits or cause the parties not to enter into, or to abandon the transaction;

• if and when the parties enter into the proposed business combination agreement, the occurrence of any event, change or other circumstances that could give rise to the termination of the proposed business combination agreement;

• the ability to successfully complete the proposed business combination and the exchange offer, including regulatory or other limitations imposed as a result of the proposed business combination;

• the success of the combined company’s business following the proposed business combination, including the ability to successfully integrate the Praxair and Linde businesses;

• the possibility that Praxair stockholders may not approve the proposed business combination agreement or that the requisite number of Linde shares may not be tendered in the public offer;

• the risk that the parties may not be able to satisfy the conditions to closing of the proposed business combination in a timely manner or at all;

• the risk that the announcement or consummation of the proposed business combination could have adverse effects on the market price of Linde’s or Praxair’s common stock or the ability of Linde and Praxair to retain customers, retain or hire key personnel, maintain relationships with their respective suppliers and customers, and on their operating results and businesses generally;

• the risk that the combined company may be unable to achieve expected synergies or that it may take longer or be more costly than expected to achieve those synergies.

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ITEM 1B.     UNRESOLVED STAFF COMMENTS

Praxair has received no written SEC staff comments regarding any of its Exchange Act reports which remain unresolved.

ITEM 2.     PROPERTIES

Praxair’s worldwide headquarters are located in owned office space in Danbury, Connecticut. Other principal administrative offices are owned in Tonawanda, New York, and leased in Rio de Janeiro, Brazil; Shanghai, China and Madrid, Spain.

Praxair designs, engineers, manufactures and operates facilities that produce and distribute industrial gases. These industrial gas production facilities and certain components are designed and/or manufactured at its facilities in Tonawanda, New York; Houston, Texas; Rio de Janeiro, Brazil; and Shanghai, China. Praxair’s Italian equity affiliate, S.I.A.D., also has such capacity.

Due to the nature of Praxair’s industrial gas products, it is generally uneconomical to transport them distances greater than a few hundred miles from the production facility. As a result, Praxair operates a significant number of production facilities spread globally throughout a number of geographic regions.

The following is a description of production facilities for Praxair by segment. No significant portion of these assets was leased at December 31, 2016. Generally, these facilities are fully utilized and are sufficient to meet our manufacturing needs.

North America

The North America segment operates production facilities in the U.S., Canada and Mexico, approximately 255 of which are cryogenic air separation plants, hydrogen plants and carbon dioxide plants. There are five major pipeline complexes in North America located in Northern Indiana, Houston, along the Gulf Coast of Texas, Detroit and Louisiana. Also located throughout North America are noncryogenic air separation plants, packaged gas facilities, specialty gas plants, helium plants and other smaller plant facilities.

Europe

The Europe segment has production facilities primarily in Italy, Spain, Germany, the Benelux region, the United Kingdom, Scandinavia and Russia which include approximately 70 cryogenic air separation plants and carbon dioxide plants. There are three major pipeline complexes in Europe located in Northern Spain and the Rhine and Saar regions of Germany. These pipeline complexes are primarily supplied by cryogenic air separation plants. Also located throughout Europe are noncryogenic air separation plants, packaged gas facilities and other smaller plant facilities.

South America

The South America segment operates more than 60 cryogenic air separation plants and carbon dioxide plants, primarily located in Brazil. Many of these plants support a major pipeline complex in Southern Brazil. Also located throughout South America are packaged gas facilities and other smaller plant facilities.

Asia

The Asia segment has production facilities located primarily in China, Korea, India and Thailand, approximately 60 of which are cryogenic air separation plants and carbon dioxide plants. Also located throughout Asia are noncryogenic air separation plants, hydrogen, packaged gas and other production facilities.

Surface Technologies

The Surface Technologies segment provides coating services and manufactures coating equipment at approximately 45 sites. The majority of these sites are located in the United States and Europe, with smaller operations in Asia, and Brazil.

ITEM 3.     LEGAL PROCEEDINGS

Information required by this item is incorporated herein by reference to the section captioned “Notes to Consolidated Financial Statements – 17 Commitments and Contingencies” in Item 8 of this 10-K.

ITEM 4.     MINE SAFETY DISCLOSURES

Not Applicable

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

The principal market for the company’s common stock (ticker symbol: PX) is the New York Stock Exchange ("NYSE"). At December 31, 2016 there were 11,928 shareholders of record.

NYSE quarterly stock price and dividend information

Market Price	Trading High		Trading Low		Close		Dividend Per Share
2016
First Quarter	$	115.32	$	95.60	$	114.45	$	0.75
Second Quarter	$	120.04	$	106.31	$	112.39	$	0.75
Third Quarter	$	125.00	$	110.12	$	120.83	$	0.75
Fourth Quarter	$	124.48	$	114.43	$	117.19	$	0.75
2015
First Quarter	$	130.38	$	119.69	$	120.74	$	0.715
Second Quarter	$	124.99	$	117.19	$	119.55	$	0.715
Third Quarter	$	120.51	$	98.55	$	101.86	$	0.715
Fourth Quarter	$	118.58	$	99.59	$	102.40	$	0.715

Praxair’s annual dividend on its common stock for 2016 was $3.00 per share. On January 26, 2017, Praxair’s Board of Directors declared a dividend of $0.7875 per share for the first quarter of 2017, or $3.15 per share annualized, which may be changed as Praxair’s earnings and business prospects warrant. The declaration of dividends is a business decision made by the Board of Directors based on Praxair’s earnings and financial condition and other factors the Board of Directors considers relevant.

Purchases of Equity Securities – Certain information regarding purchases made by or on behalf of the company or any affiliated purchaser (as defined in Rule 10b-18(a)(3) under the Securities Exchange Act of 1934, as amended) of its common stock during the three months ended December 31, 2016 is provided below:

Period	Total Number of Shares Purchased (Thousands)	Average Price Paid Per Share		Total Number of Shares  Purchased as Part of Publicly Announced Program (1) (Thousands)	Approximate Dollar Value of Shares that May Yet be Purchased Under the Program (2) (Millions)
October 2016	25	$	117.44	25	$	1,683
November 2016	369	$	116.23	369	$	1,640
December 2016	506	$	117.36	506	$	1,581
Fourth Quarter 2016	900	$	116.90	900	$	1,581

________________________

(1) On January 28, 2014, the Company’s board of directors approved the repurchase of $1.5 billion of its common stock ("2014 program") which could take place from time to time on the open market (which could include the use of 10b5-1 trading plans) or through negotiated transactions, subject to market and business conditions.

(2) As of December 31, 2016, the Company had purchased $1,419 million of its common stock pursuant to the 2014 program, leaving an additional $81 million remaining authorized under the 2014 program. The 2014 program does not have any stated expiration date. In addition, on July 28, 2015, the Company's board of directors approved the repurchase of $1.5 billion of its common stock ("2015 program") which could take place from time to time on the open market (which could include the use of 10b5-1 trade plans) or through negotiated transactions, subject to market and business conditions. The 2015 program does not have any stated expiration date. The 2015 program is in addition to the 2014 program.

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Peer Performance Table – The graph below compares the most recent five-year cumulative returns of Praxair’s common stock with those of the Standard & Poor’s 500 Index ("SPX") and the S5 Materials Index ("S5MATR") which covers 30 companies, including Praxair. The figures assume an initial investment of $100 on December 31, 2011 and that all dividends have been reinvested.

	2011	2012	2013	2014	2015	2016
PX	$100	$105	$127	$130	$105	$124
SPX	$100	$116	$153	$175	$176	$197
S5MATR	$100	$115	$145	$155	$143	$167

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ITEM 6.      SELECTED FINANCIAL DATA

FIVE-YEAR FINANCIAL SUMMARY

(Dollar amounts in millions, except per share data)

Year Ended December 31,	2016(a)			2015(a)			2014(a)			2013(a)			2012(a)
From the Consolidated Statements of Income
Sales	$	10,534		$	10,776		$	12,273		$	11,925		$	11,224
Cost of sales, exclusive of depreciation and amortization	5,860			5,960			6,962			6,744			6,396
Selling, general and administrative	1,145			1,152			1,308			1,349			1,270
Depreciation and amortization	1,122			1,106			1,170			1,109			1,001
Research and development	92			93			96			98			98
Cost reduction program and other charges – net	100			172			138			32			65
Other income (expenses) – net	23			28			9			32			43
Operating profit	2,238			2,321			2,608			2,625			2,437
Interest expense – net	190			161			213			178			141
Income before income taxes and equity investments	2,048			2,160			2,395			2,447			2,296
Income taxes	551			612			691			649			586
Income before equity investments	1,497			1,548			1,704			1,798			1,710
Income from equity investments	41			43			42			38			34
Net income (including noncontrolling interests)	1,538			1,591			1,746			1,836			1,744
Noncontrolling interests	(38		)	(44		)	(52		)	(81		)	(52		)
Net income – Praxair, Inc.	$	1,500		$	1,547		$	1,694		$	1,755		$	1,692
Per Share Data – Praxair, Inc. Shareholders
Basic earnings per share	$	5.25		$	5.39		$	5.79		$	5.94		$	5.67
Diluted earnings per share	$	5.21		$	5.35		$	5.73		$	5.87		$	5.61
Cash dividends per share	$	3.00		$	2.86		$	2.60		$	2.40		$	2.20
Weighted Average Shares Outstanding (000’s)
Basic shares outstanding	285,677			287,005			292,494			295,523			298,316
Diluted shares outstanding	287,757			289,055			295,608			298,965			301,845
Other Information and Ratios
Total assets	$	19,332		$	18,319		$	19,769		$	20,223		$	18,062
Total debt	$	9,515		$	9,231		$	9,225		$	8,779		$	7,334
Net debt (b)	$	8,991		$	9,084		$	9,099		$	8,641		$	7,177
Cash flow from operations (c)	$	2,773		$	2,695		$	2,887		$	2,936		$	2,774
Net cash used for investing activities	$	(1,770	)	$	(1,303	)	$	(1,803	)	$	(3,237	)	$	(2,378	)
Net cash used for financing activities (c)	$	(643	)	$	(1,310	)	$	(1,027	)	$	309		$	(325	)
Adjusted EBITDA (b)	$	3,501		$	3,642		$	3,958		$	3,804		$	3,537
Capital expenditures	$	1,465		$	1,541		$	1,689		$	2,020		$	2,180
Acquisitions, net of cash acquired	$	363		$	82		$	206		$	1,323		$	280
After-tax return on capital (b)	12.0		%	12.6		%	12.7		%	12.8		%	13.9		%
Return on equity (b)	31.9		%	34.6		%	28.7		%	28.6		%	28.9		%
Debt-to-capital ratio (b)	62.3		%	64.9		%	59.5		%	54.2		%	51.8		%
Debt-to-adjusted EBITDA (b)	2.6			2.5			2.3			2.2			1.9
Shares outstanding (000’s)	284,901			284,879			289,262			294,134			296,229
Number of employees	26,498			26,657			27,780			27,560			26,539

________________________

(a) Amounts for 2016 include: (i) a $16 million charge to interest expense ($10 million after–tax, or $0.04 per diluted share) related to the redemption of the $325 million 5.20% notes due 2017, (ii) a pre–tax pension settlement charge of $4 million ($3 million after–tax, or $0.01 per diluted share) related to lump sum benefit payments made from the U.S. supplemental pension plan, and (iii) pre–tax charges of $96 million ($63 million after–tax and non–controlling interests, or $0.22 per diluted share) primarily related to cost reduction actions.

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Amounts for 2015 include: (i) a pre-tax charge of $165 million ($125 million after-tax, or $0.43 per diluted share) related to the cost reduction program and other charges; and (ii) a pre-tax charge of $7 million ($5 million after-tax, or $0.02 per diluted share) related to a pension settlement.

Amounts for 2014 include: (i) a pre-tax charge of $131 million ($131 million after-tax, or $0.45 per diluted share) related to the Venezuela currency devaluation, (ii) a pre-tax charge of $7 million ($5 million after-tax, or $0.02 per diluted share) related to pension settlements; and (iii) a pre-tax charge of $36 million ($22 million after-tax, or $0.07 per diluted share) related to a bond redemption.

Amounts for 2013 include: (i) a pre-tax charge of $23 million ($23 million after-tax, or $0.08 per diluted share) related to the Venezuela currency devaluation; (ii) a pre-tax charge of $9 million ($6 million after-tax, or $0.02 per diluted share) related to pension settlements; (iii) an income tax benefit of $40 million ($24 million net of noncontrolling interests, or $0.08 per diluted share) related to a realignment of the Italian legal structure; and (iv) a pre-tax charge of $18 million ($12 million after-tax, or $0.04 per diluted share) related to a bond redemption.

Amounts for 2012 include: (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 ($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.

See Notes 2, 5, 11 and 16 to the consolidated financial statements.

(b) Non-GAAP measures. See the “Non-GAAP Financial Measures” section in Item 7 for definitions and reconciliation to reported amounts.

(c) During 2016, Praxair adopted the FASB's standard for Improvements to Employee Share-Based Payment Accounting. As a result of the standard, withholding tax payments related to stock compensation are required to be presented as financing versus operating cash flows on a retrospective basis (see Note 1 to the consolidated financial statements).

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ITEM 7.     MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of the company’s financial condition and results of operations should be read together with its consolidated financial statements and notes to the consolidated financial statements included in Item 8 of this Form 10-K.

	Page
Business Overview	17
Executive Summary – Financial Results & Outlook	18
Consolidated Results and Other Information	19
Segment Discussion	26
Liquidity, Capital Resources and Other Financial Data	36
Contractual Obligations	41
Off-Balance Sheet Arrangements	41
Critical Accounting Policies	41
New Accounting Standards	44
Fair Value Measurements	44
Non-GAAP Financial Measures	45
Forward-Looking Statements	50

BUSINESS OVERVIEW

Praxair is a leading industrial gas company in North and South America and one of the largest worldwide. The Company's primary products in its industrial gases business are atmospheric gases (oxygen, nitrogen, argon, rare gases) and process gases (carbon dioxide, helium, hydrogen, electronic gases, specialty gases, acetylene). The company also designs, engineers, and builds equipment that produces industrial gases primarily for internal use. The company’s surface technologies segment supplies wear-resistant and high-temperature corrosion-resistant metallic and ceramic coatings and powders. Praxair Surface Technologies supplies high-performance coatings that protect metal parts from wear, corrosion and high heat. Praxair’s industrial gas operations are managed on a geographical basis and in 2016, 94% of sales were generated in four geographic segments (North America, Europe, South America, and Asia). The surface technologies segment generated the remaining 6% of sales.

Praxair serves a diverse group of industries including healthcare, petroleum refining, manufacturing, food, beverage carbonation, fiber-optics, steel making, aerospace, chemicals and water treatment. The diversity of end-markets creates financial stability for Praxair in varied business cycles.

Praxair generates most of its revenues and earnings in the following 12 core geographies where the company has its strongest market positions and where distribution and production operations allow the company to deliver the highest level of service to its customers at the lowest cost.

North America	South America	Europe	Asia
United States	Brazil	Spain	China
Canada		Italy	India
Mexico		Germany/Benelux	Korea
		Scandinavia	Thailand

Praxair manufactures and distributes its products through networks of hundreds of production plants, pipeline complexes, distribution centers and delivery vehicles. Major pipeline complexes are located in the United States, Brazil, Spain and Germany. These networks are a competitive advantage, providing the foundation of reliable product supply to the company’s customer base. The majority of Praxair’s business is conducted through long-term contracts which provide stability in cash flow and the ability to pass through changes in energy and feedstock costs to customers. The company has growth opportunities in all major geographies and in diverse end-markets such as energy, chemicals, metals, healthcare, food and beverage, and aerospace.

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EXECUTIVE SUMMARY – FINANCIAL RESULTS & OUTLOOK

2016 Year in review

Praxair delivered solid results for the full year of 2016 despite continued challenging global macro-economic trends and foreign currency headwinds. Volume growth from food and beverage and healthcare end-markets and new project start-ups largely in Asia, Europe and South America was offset by weaker volumes in North and South America, primarily manufacturing and up-stream energy end-markets. Excluding foreign currency headwinds, sales growth came from higher overall pricing and acquisitions. Operating cash flow was 3% higher than 2015 despite lower net income from currency and base volume headwinds.

• Sales of $10,534 million were 2% below 2015 sales of $10,776 million. Excluding negative currency impacts which reduced sales by 3%, and lower cost pass-through, sales were 2% above the prior year due to growth from positive price, new project start-ups and acquisitions. These increases were partially offset by lower base volumes primarily in North America due to weaker upstream energy and manufacturing end-markets.

• Reported operating profit of $2,238 million was 4% below 2015. Adjusted operating profit of $2,338 million was 6% below adjusted operating profit in 2015, and 3% below the prior year excluding negative currency translation. Benefits from project start-ups, acquisitions net of divestitures, higher price, and cost reduction programs were more than offset by the impact of lower base volumes.*

• Reported net income – Praxair, Inc. of $1,500 million and diluted earnings per share of $5.21 decreased from $1,547 million and $5.35, respectively, in 2015. Adjusted net income – Praxair, Inc. of $1,576 million and adjusted diluted earnings per share of $5.48 were both 6% below 2015 adjusted amounts.*

• Cash flow from operations was a strong $2,773 million, 26% of sales. Capital expenditures were $1,465 million and acquisitions, net of cash acquired were $363 million primarily for investments in growth and density; dividends paid were $856 million; and net common stock purchases were $89 million.

• We announced a non-binding agreement in principle to merge with Linde AG.

2017 Outlook

• Diluted earnings per share are forecasted to be in the range of $5.45 to $5.80. 2017 EPS guidance does not include transaction costs related to the potential Linde merger.

• Effective tax rate of approximately 28%.

• Capital expenditures of approximately $1.4 billion.

• The company’s core business is to build, own, and operate industrial gas plants in order to supply atmospheric and process gases to customers. As such, Praxair believes that its project backlog is one indicator of future sales growth. At December 31, 2016, Praxair’s backlog of 16 large projects under construction was $1.5 billion. This represents the total estimated capital cost of large plants under construction. North America represents about 80 percent of the backlog, with the majority located in the U.S. Gulf Coast. The remaining backlog resides in Asia, Europe, and South America. These plants will supply customers in the energy, chemical, manufacturing, electronics and metals markets.

* A reconciliation of the Adjusted amounts can be found in the "Non-GAAP Financial Measures" section in this MD&A. See Notes 2, 5, 11 and 16 to the consolidated financial statements.

The above guidance should be read in conjunction with the section entitled “Forward-Looking Statements.”

Praxair provides quarterly updates on operating results, material trends that may affect financial performance, and financial earnings guidance via earnings releases and investor teleconferences. These materials are available on the company’s website, www.praxair.com/investors but are not incorporated herein.

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CONSOLIDATED RESULTS AND OTHER INFORMATION

The following table provides selected data for 2016, 2015, and 2014:

										Variance
(Dollar amounts in millions, except per share data) Year Ended December 31,	2016			2015			2014			2016 vs. 2015		2015 vs. 2014
Reported Amounts:
Sales	$	10,534		$	10,776		$	12,273		(2	)%	(12	)%
Cost of sales, exclusive of depreciation and amortization	$	5,860		$	5,960		$	6,962		(2	)%	(14	)%
Gross margin (a)	$	4,674		$	4,816		$	5,311		(3	)%	(9	)%
As a percent of sales	44.4		%	44.7		%	43.3		%
Selling, general and administrative	$	1,145		$	1,152		$	1,308		(1	)%	(12	)%
As a percent of sales	10.9		%	10.7		%	10.7		%
Depreciation and amortization	$	1,122		$	1,106		$	1,170		1	%	(5	)%
Cost reduction program and other charges (b)	$	100		$	172		$	138
Other income (expense) – net	$	23		$	28		$	9
Operating profit	$	2,238		$	2,321		$	2,608		(4	)%	(11	)%
Operating margin	21.2		%	21.5		%	21.2		%
Interest expense – net	$	190		$	161		$	213		18	%	(24	)%
Effective tax rate	26.9		%	28.3		%	28.9		%
Income from equity investments	$	41		$	43		$	42		(5	)%	2	%
Noncontrolling interests	$	(38	)	$	(44	)	$	(52	)	(14	)%	(15	)%
Net income – Praxair, Inc.	$	1,500		$	1,547		$	1,694		(3	)%	(9	)%
Diluted earnings per share	$	5.21		$	5.35		$	5.73		(3	)%	(7	)%
Diluted shares outstanding	287,757			289,055			295,608			—	%	(2	)%
Number of employees	26,498			26,657			27,780
Adjusted Amounts (c):
Operating profit	$	2,338		$	2,493		$	2,746		(6	)%	(9	)%
Operating margin	22.2		%	23.1		%	22.4		%
Interest expense – net	$	174		$	161		$	177		8	%	(9	)%
Effective tax rate	27.1		%	28.0		%	27.5		%
Noncontrolling interests	$	(43	)	$	(45	)	$	(52	)	(4	)%	(13	)%
Net income – Praxair, Inc.	$	1,576		$	1,677		$	1,852		(6	)%	(9	)%
Diluted earnings per share	$	5.48		$	5.80		$	6.27		(6	)%	(7	)%

________________________

(a) Gross margin excludes depreciation and amortization expense.

(b) See Note 2 to the consolidated financial statements.

(c) Adjusted amounts are non-GAAP measures. A reconciliation of reported amounts to adjusted amounts can be found in the “Non-GAAP Financial Measures” section of this MD&A. See Notes 2, 5, 11 and 16 to the consolidated financial statements.

19

Results of Operations

The following table provides a summary of changes in consolidated sales and adjusted operating profit:

	2016 vs. 2015				2015 vs. 2014
	% Change				% Change
	Sales		Operating Profit		Sales		Operating Profit
Factors Contributing to Changes
Volume	—	%	(5	)%	(2	)%	(5	)%
Price/Mix	1	%	3	%	1	%	6	%
Cost pass-through	(1	)%	—	%	(2	)%	—	%
Currency	(3	)%	(3	)%	(10	)%	(10	)%
Acquisitions/Divestitures	1	%	—	%	1	%	—	%
Other	—	%	1	%	—	%	(2	)%
Reported	(2	)%	(4	)%	(12	)%	(11	)%
Add: Cost reduction program and other charges and pension settlement	—	%	(2	)%	—	%	2	%
Adjusted	(2	)%	(6	)%	(12	)%	(9	)%

The following tables provide consolidated sales by end-market and distribution method:

	% of Sales						% Change*
	2016		2015		2014		2016 vs. 2015		2015 vs. 2014
Sales by End-Markets
Manufacturing	23	%	24	%	24	%	(5	)%	(4	)%
Metals	17	%	17	%	17	%	4	%	(2	)%
Energy	12	%	13	%	14	%	(6	)%	(2	)%
Chemicals	10	%	10	%	10	%	—	%	(3	)%
Electronics	8	%	8	%	7	%	2	%	5	%
Healthcare	8	%	8	%	8	%	6	%	4	%
Food & Beverage	9	%	9	%	8	%	7	%	7	%
Aerospace	3	%	3	%	3	%	2	%	3	%
Other	10	%	8	%	9	%	1	%	(8	)%
	100	%	100	%	100	%

* Excludes impact of currency, natural gas/precious metals cost pass-through and acquisitions/divestitures.

	% of Sales
	2016		2015		2014
Sales by Distribution Method
On-Site	29	%	29	%	29	%
Merchant	35	%	34	%	34	%
Packaged Gas	28	%	28	%	28	%
Other	8	%	9	%	9	%
	100	%	100	%	100	%

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2016 Compared With 2015

Sales decreased 2% to $10,534 million in 2016compared to $10,776 million in 2015. The decrease is primarily due to negative currency translation impacts of 3% and lower cost pass-through which reduced sales by 1%. Excluding these impacts, sales increased 2% compared to prior year. Higher pricing, primarily in North and South America, and acquisitions, largely in Europe, each contributed 1% to sales.

Gross margin decreased $142 million, or 3%, versus 2015 primarily due to lower sales. Gross margin as a percentage of sales declined to 44.4% in 2016 from 44.7% in 2015.

Selling, general and administrative ("SG&A") expenses decreased $7 million or 1% in 2016 to $1,145 million, or 10.9% of sales, versus $1,152 million, or 10.7% of sales, for 2015. Currency impacts decreased SG&A by $31 million. Excluding currency impacts, SG&A increased $24 million driven by acquisitions, cost inflation and higher incentive compensation partially offset by benefits from cost reduction programs.

Depreciation and amortization expense increased $16 million versus 2015. This increase was primarily due to plant start ups and acquisitions partially offset by currency effects.

During the year ended December 31, 2016, Praxair recorded charges of $100 million related primarily to a cost reduction program. This program is expected to result in annualized pre-tax expense reductions and cash flows increases of approximately $45 million. During 2015, Praxair recorded charges of $146 million in the second quarter and $26 million in the third quarter also related primarily to a cost reduction program. The 2015 cost reduction actions are expected to result in annualized pre-tax expense reductions and cash flow increases of approximately $80 million. To date, the expected benefits of the 2015 and 2016 cost reduction programs have met expectations, excluding any currency translation impacts (refer to Note 2 to the consolidated financial statements).

Other income (expenses) – net in 2016 was a $23 million benefit versus a $28 million benefit in 2015 (see Note 7 to the consolidated financial statements for a summary of major components). Other income in 2016 is largely related to net gains on asset sales. Other income in 2015 includes a $28 million gain from the sale of a packaged gas business in the United States.

Reported operating profit of $2,238 million in 2016 was $83 million, or 4% lower than reported operating profit of $2,321 million in 2015. 2016 included charges of $96 million related to cost reduction actions and other charges and a $4 million charge related to a pension settlement. 2015 included a $165 million charge related to cost reduction actions and other charges and a $7 million charge related to a pension settlement. Refer to Note 2 of the consolidated financial statements for a further discussion of these items. Excluding the impact of these items, adjusted operating profit of $2,338 million in 2016 was $155 million, or 6% lower than adjusted operating profit of $2,493 million in 2015. Benefits from project start-ups, acquisitions net of divestitures, higher price, and cost reduction programs were more than offset by the impact of lower base volumes. A discussion of operating profit by segment is included in the segment discussion that follows.

Reported interest expense – net in 2016 increased $29 million, versus 2015. 2016 included charges of $16 million relating to the early redemption of notes (see Note 11 to the consolidated financial statements). Excluding this charge, adjusted interest expense increased $13 million largely attributable to higher average interest rates due primarily to extending debt maturities. See Note 7 to the consolidated financial statements for further information relating to interest expense.

The reported effective tax rate ("ETR") for 2016 was 26.9% versus 28.3% in 2015. The ETR for the 2016 period includes a $35 million tax benefit related to a pension settlement, bond redemption and cost reduction program and other charges. The 2015 period includes a $41 million tax benefit related to a pension settlement and cost reduction program and other charges (see Note 2 to the consolidated financial statements). Excluding these impacts, on an adjusted basis the ETR for the 2016 and 2015 periods was 27.1% and 28.0%, respectively. The decrease in the adjusted ETR is primarily due to a $20 million excess tax benefit on share–based compensation resulting from the adoption of a new accounting standard during 2016 (see Note 1 to the consolidated financial statements).

Praxair’s significant equity investments are in the United States, China, Italy, and the Middle East. Equity income decreased $2 million in 2016.

At December 31, 2016, reported noncontrolling interests consisted primarily of noncontrolling shareholders’ investments in Asia (primarily in China), Europe (primarily in Italy), and surface technologies. Noncontrolling interests decreased $6 million to $38 million in 2016 from $44 million in 2015. This decrease was due primarily to the acquisition of the remaining noncontrolling interests in a Scandinavian joint venture (See Note 14 to the consolidated financial statements) and the divestiture of a packaged gas joint venture in the United States in late 2015.

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Reported net income - Praxair, Inc. in 2016 was $1,500 million, or $47 million lower than net income - Praxair, Inc. of $1,547 million in 2015. Adjusted net income – Praxair, Inc. of $1,576 million in 2016 was $101 million, or 6% lower than adjusted net income – Praxair, Inc. of $1,677 million in 2015. Adjusted net income - Praxair, Inc. decreased primarily due to lower adjusted operating profit, including negative foreign currency translation impacts.

Reported diluted earnings per share ("EPS") of $5.21 in 2016decreased$0.14 per diluted share, or 3% from $5.35 in 2015. The decrease included a $0.01 pension settlement charge, a $0.04 bond redemption charge and a $0.22 charge related to the cost reduction actions. Adjusted diluted EPS of $5.48 in 2016 decreased $0.32 per diluted share, or 6%, from adjusted diluted EPS of $5.80 in 2015. The decrease in adjusted diluted EPS was primarily due to lower adjusted net income – Praxair, Inc.

Other comprehensive loss for the year ended December 31, 2016 of $8 million includes favorable currency translation adjustments of $68 million offset by a $76 million unfavorable impact related to a decline in the funded status of Praxair's retirement obligations. The favorable translation adjustments reflect the impact of translating local currency foreign subsidiary financial statements into U.S. dollars, and are largely driven by the weakening of the U.S. dollar against the Brazilian Real and the Canadian dollar. Favorable currency translation adjustments included $303 million in South America and $22 million in Europe offset by unfavorable currency translation adjustments of $139 million in North America and $98 million in Asia. The decline in the funded status of retirement obligations was primarily the result of unfavorable liability experience in the current year as compared with actuarial gains in the prior year offset by a higher actual return on assets. Refer to the Currency section of the MD&A and Notes 7 and 16 to the consolidated financial statements.

The number of employees at December 31, 2016 was 26,498, a decrease of 159 employees from December 31, 2015. This decrease primarily reflects the impact of cost reduction programs implemented during the current year partially offset by acquisitions.

2015 Compared With 2014

Sales decreased 12% to $10,776 million in 2015 compared to $12,273 million in 2014. The decrease is primarily due to negative currency translation impacts of 10% and lower cost pass-through which reduced sales by 2%. Excluding these impacts, sales were comparable to prior year. Lower overall volumes which decreased sales by 2%, primarily in North and South America, were offset by a 1% increase from higher pricing in most segments. Acquisitions increased sales by 1%.

Gross margin decreased $495 million, or 9%, versus 2014 primarily due to lower sales. Gross margin as a percentage of sales improved to 44.7% in 2015 from 43.3% in 2014 primarily due to higher overall pricing and lower cost pass-through.

Selling, general and administrative ("SG&A") expenses decreased $156 million or 12% in 2015 to $1,152 million, or 10.7% of sales, versus $1,308 million, or 10.7% of sales, for 2014. Currency impacts decreased SG&A by $135 million and cost reduction actions in response to weak underlying business trends also reduced SG&A.

Depreciation and amortization expense decreased $64 million versus 2014. This decrease was primarily due to currency effects which reduced depreciation and amortization expense by $109 million. This was partially offset by higher depreciation expense primarily related to new project start-ups.

Cost reduction and other charges for 2015 are discussed in the previous section. The 2014 charges of $138 million relate primarily to the impacts of a devaluation of the currency in Venezuela (refer to Note 2 to the consolidated financial statements).

Other income (expenses) – net in 2015 was a $28 million benefit versus a $9 million benefit in 2014 (see Note 7 to the consolidated financial statements for a summary of major components). Other income in 2015 includes a $28 million gain from the sale of a packaged gas business in the United States to an existing equity investment.

Reported operating profit of $2,321 million in 2015 was $287 million, or 11% lower than reported operating profit of $2,608 million in 2014. 2015 included charges of $165 million related to cost reduction actions and a $7 million charge related to a pension settlement. 2014 included a $131 million charge related to Venezuela currency devaluation and a $7 million charge related to a pension settlement. Refer to Note 2 of the consolidated financial statements for a further discussion of these items. Excluding the impact of these items, adjusted operating profit of $2,493 million in 2015 was $253 million, or 9% lower than adjusted operating profit of $2,746 million in 2014. Higher pricing, productivity and cost control increased operating profit but was more than offset by the negative impacts of foreign currency translation and lower volumes. A discussion of operating profit by segment is included in the segment discussion that follows.

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Reported interest expense – net in 2015 decreased $52 million, versus 2014. 2014 included charges of $36 million relating to the early redemption of notes (see note 11 to the consolidated financial statements). Excluding this charge, adjusted interest expense decreased $16 million. Lower overall interest rates reduced interest expense by approximately $32 million. This decrease was partially offset by higher debt levels and lower capitalized interest which increased interest expense by approximately $11 million and $5 million, respectively, versus 2014. The amount of interest capitalized decreased due to lower interest rates, lower construction in progress, and currency impacts. See Note 7 to the consolidated financial statements for further information relating to interest expense.

The effective tax rate ("ETR") for 2015 was 28.3% versus 28.9% in 2014. The adjusted effective tax rate was 28% in 2015 versus 27.5% in 2014. The increase in the ETR was primarily due to the impact of foreign tax differentials (see Note 5 to the consolidated financial statements).

Praxair’s significant equity investments are in the United States, China, Italy, and the Middle East. Equity income increased $1 million in 2015.

At December 31, 2015, reported noncontrolling interests consisted primarily of noncontrolling shareholders’ investments in Asia (primarily in China and India), Europe (primarily in Italy and Scandinavia), and North America (primarily within the U.S. packaged gas business). Noncontrolling interest decreased $8 million to $44 million in 2015 from $52 million in 2014. This decrease was due primarily to lower earnings in Italy, including a tax rate change, and China, and currency impacts.

Reported net income - Praxair, Inc. in 2015 was $1,547 million, or $147 million lower than net income - Praxair, Inc. of $1,694 million in 2014. Adjusted net income – Praxair, Inc. of $1,677 million in 2015 was $175 million, or 9% lower than adjusted net income – Praxair, Inc. of $1,852 million in 2014. Adjusted net income - Praxair, Inc. decreased primarily due to negative foreign currency translation impacts, partially offset by lower interest expense.

Reported diluted earnings per share ("EPS") of $5.35 in 2015 decreased $0.38 per diluted share, or 7% from $5.73 in 2014. The decrease included a $0.02 pension settlement charge and a $0.43 charge related to the cost reduction actions. Adjusted diluted EPS of $5.80 in 2015 decreased $0.47 per diluted share, or 7%, from adjusted diluted EPS of $6.27 in 2014. The decrease in adjusted diluted EPS was primarily due to lower adjusted net income – Praxair, Inc. due primarily to foreign currency translation impacts, partially offset by a 2% decrease in the number of diluted shares outstanding as a result of the company’s net repurchases of common stock.

Other comprehensive loss for the year ended December 31, 2015 of $1,458 million includes negative currency translation adjustments of $1,514 million and a positive impact of $56 million related to an improvement in the funded status of Praxair's retirement obligations. The negative translation adjustments reflect the impact of translating local currency foreign subsidiary financial statements to U.S. dollars and resulted from a strengthening U.S. dollar versus most foreign currencies. The negative currency translation adjustments included $762 million in South America, $346 million in North America, $236 million in Asia, and $94 million in Europe. The positive funded status - retirement obligations adjustment resulted primarily from the effect of higher discount rates somewhat offset by lower than expected actual return on assets. See the “Currency” section of the MD&A, and Notes 7 and 16 to the consolidated financial statements.

The number of employees at December 31, 2015 was 26,657, a decrease of 1,123 employees from December 31, 2014. This decrease primarily reflects the impact of cost reduction programs implemented during the current year.

Related Party Transactions

The company’s related parties are primarily unconsolidated equity affiliates. The company did not engage in any material transactions involving related parties that included terms or other aspects that differ from those which would be negotiated with independent parties.

Environmental Matters

Praxair’s principal operations relate to the production and distribution of atmospheric and other industrial gases, which historically have not had a significant impact on the environment. However, worldwide costs relating to environmental protection may continue to grow due to increasingly stringent laws and regulations, and Praxair's ongoing commitment to rigorous internal standards.

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Climate Change

Praxair operates in jurisdictions that have, or are developing, laws and/or regulations to reduce or mitigate the perceived adverse effects of greenhouse gas ("GHG") emissions and faces a highly uncertain regulatory environment in this area. For example, the U.S. Environmental Protection Agency ("EPA") has promulgated rules requiring reporting of GHG emissions, and Praxair and many of its suppliers and customers are subject to these rules. EPA has also promulgated regulations to restrict GHG emissions, including final rules regulating GHG emissions from light-duty vehicles and certain large manufacturing facilities, many of which are Praxair suppliers or customers. More recently, EPA promulgated carbon dioxide regulations for both new and existing power plants, which require controls on GHG emissions from certain suppliers of power to Praxair’s operations. In addition to these developments in the United States, GHGs are regulated in the European Union under the Emissions Trading System, which has wide implications for our customers and may impact certain operations of Praxair in Europe. There are also requirements for mandatory reporting in Quebec, Canada, which apply to certain Praxair operations and will be used in developing cap-and-trade regulations on GHG emissions. These regulations, as well as similar regulations that have been proposed in Ontario, Canada, are expected to impact certain Praxair facilities in Canada. Climate change and energy efficiency laws and policies are also being widely introduced in jurisdictions throughout South America, Mexico and parts of Asia. China has announced plans to launch a national carbon emissions trading system, though it does not appear the regulations will have a direct impact on GHG emissions from Praxair facilities. Among other impacts, such regulations are expected to raise the costs of energy, which is a significant cost for Praxair. Nevertheless, Praxair's customer contracts routinely provide rights to recover increased electricity, natural gas, and other costs that are incurred by the company as a result of Climate Change regulation.

Praxair anticipates continued growth in its hydrogen business, as hydrogen is essential to refineries that use it to remove sulfur from transportation fuels in order to meet ambient air quality standards in the United States. Hydrogen production plants and a large number of other manufacturing and electricity-generating plants have been identified under California law as a source of carbon dioxide emissions and these plants are subject to cap-and-trade regulations in that state. Praxair believes it will be able to mitigate the costs of these regulations through the terms of its product supply contracts. However, legislation that limits GHG emissions may impact growth by increasing operating costs and/or decreasing demand.

To manage business risks from current and potential GHG emission regulation, Praxair actively monitors current developments, evaluates the direct and indirect business risks, and takes appropriate actions. Among others, actions include: increasing relevant resources and training; consulting with vendors, insurance providers and industry experts; incorporating GHG provisions in commercial agreements; and conducting regular reviews of the business risks with management. Although there are considerable uncertainties, Praxair believes that the business risk from potential regulations can be effectively managed through its commercial contracts. Additionally, Praxair does not anticipate any material effects regarding its plant operations or business arising from potential physical risks of climate change.

Praxair continuously seeks opportunities to reduce its own energy use and GHG footprint through rigorous energy efficiency, investment in renewable energy, and purchasing hydrogen as a chemical byproduct where feasible. Praxair maintains a range of targets that drive reductions in its energy and in GHG emissions. Progress against theses targets is reported annually to Praxair's Board of Directors.

At the same time, Praxair may benefit from business opportunities arising from governmental regulation of GHG and other emissions; uncertain costs of energy and certain natural resources; the development of renewable energy alternatives; and new technologies that help extract natural gas, improve air quality, increase energy efficiency and mitigate the impacts of climate change. Praxair continues to develop new applications that can lower emissions, including GHG emissions, in Praxair's processes and help customers lower energy consumption and increase product throughput. Stricter regulation of water quality in emerging economies such as China provide a growing market for a number of gases, e.g., oxygen for wastewater treatment. Increase concern about drought in areas such as California may create a market for carbon dioxide for desalination. Renewable fuel standards in the European Union and U.S. create a market for second-generation biofuels which use of industrial gases such as oxygen, carbon dioxide, and hydrogen.

Costs Relating to the Protection of the Environment

Environmental protection costs in 2016 included approximately $10 million in capital expenditures and $25 million of expenses. Praxair anticipates that future annual environmental protection expenditures will be similar to 2016, subject to any significant changes in existing laws and regulations. Based on historical results and current estimates, management

24

does not believe that environmental expenditures will have a material adverse effect on the consolidated financial position, the consolidated results of operations or cash flows in any given year.

Legal Proceedings

See Note 17 to the consolidated financial statements for information concerning legal proceedings.

Retirement Benefits

Pensions

The net periodic benefit cost for the U.S. and International pension plans was $51 million in 2016, $98 million in 2015 and $82 million in 2014. Consolidated net periodic benefit cost included settlement charges of $4 million in 2016 and $7 million in both 2015 and 2014.

The funded status (pension benefit obligation ("PBO") less the fair value of plan assets) for the U.S. plans was a deficit of $559 million as of December 31, 2016 versus a deficit of $483 million at December 31, 2015. The increase in the deficit is primarily due to actuarial losses that arose during the current year, compared with actuarial gains in the prior year, partially offset by lower service and interest costs.

Global pension contributions were $11 million in 2016, $15 million in 2015 and $18 million in 2014. At a minimum, Praxair contributes to its pension plans to comply with local regulatory requirements (e.g., ERISA in the United States). Discretionary contributions in excess of the local minimum requirements are made based on many factors, including long-term projections of the plans' funded status, the economic environment, potential risk of overfunding, pension insurance costs and alternative uses of the cash. Changes to these factors can impact the timing of discretionary contributions from year to year. Estimated required contributions for 2017 are currently expected to be in the range of $10 million to $15 million.

Praxair assumes an expected return on plan assets for 2017 in the United States of 8.00%, which is consistent with the long-term expected return on its investment portfolio.

Excluding the impact of any settlements, 2017 consolidated pension expense is expected to increase by approximately $7 million to $54 million. This fluctuation is primarily driven by higher expected amortization of actuarial losses, with service and interest costs anticipated to remain relatively consistent. Throughout 2015 Praxair measured service and interest costs utilizing a single weighted-average discount rate for each plan derived from the yield curve used to measure the respective plan obligations. For 2016 the Company elected to measure service and interest costs for significant plans by applying the specific spot rates along that yield curve to the plan's expected cash flows ("spot rate approach"). The Company believes the new spot rate approach provides a more precise measurement of service and interest costs by aligning the timing of the plans' expected cash flows to the corresponding spot rates on the yield curve. This change does not affect the measurement of the plans' obligations or the funded status of the plans.

Postretirement Benefits Other Than Pensions ("OPEB")

The net periodic benefit cost for OPEB plans was $5 million in 2016, $8 million in 2015 and $7 million in 2014. The funded status deficit reduced by $4 million from 2015 to 2016 primarily due to lower service and interest costs and the favorable impact of plan amendments.

In 2017, consolidated net periodic benefit costs for the OPEB plans is expected to be approximately $5 million.

Refer to the Critical Accounting Policies section and Note 16 to the consolidated financial statements for a more detailed discussion of the company’s retirement benefits, including a description of the various retirement plans and the assumptions used in the calculation of net periodic benefit cost and funded status.

Insurance

Praxair purchases insurance to limit a variety of property and casualty risks, including those related to property, business interruption, third-party liability and workers’ compensation. Currently, the company self-retains the first $5 million per occurrence for workers’ compensation, general and vehicle liability in the United States and retains $2.5 million to $5 million per occurrence at its various properties worldwide. To mitigate its aggregate loss potential above these retentions, the company purchases insurance coverage from highly rated insurance companies. The company does not currently operate or participate in any captive insurance companies or other non-traditional risk transfer alternatives.

At December 31, 2016 and 2015, the company had recorded a total of $33 million and $32 million, respectively, representing an estimate of the retained liability for the ultimate cost of claims incurred and unpaid as of the balance sheet dates. The estimated liability is established using statistical analysis and is based upon historical experience, actuarial

25

assumptions and professional judgment. These estimates are subject to the effects of trends in loss severity and frequency and are subject to a significant degree of inherent variability. If actual claims differ from the company’s estimates, they will be adjusted at that time and financial results could be impacted.

Praxair recognizes estimated insurance proceeds relating to damages at the time of loss only to the extent of incurred losses. Any insurance recoveries for business interruption and for property damages in excess of the net book value of the property are recognized only when realized or pending payments confirmed by its insurance companies.

SEGMENT DISCUSSION

The following summary of sales and operating profit by segment provides a basis for the discussion that follows (for additional information concerning Praxair’s segments, see Note 18 to the consolidated financial statements). Praxair evaluates the performance of its reportable segments based on operating profit, excluding the items not indicative of ongoing business trends (See Note 2 to the consolidated financial statements).

(Dollar amounts in millions) Year Ended December 31,										Variance*
	2016			2015			2014			2016 vs. 2015		2015 vs. 2014
Sales
North America	$	5,592		$	5,865		$	6,436		(5	)%	(9	)%
Europe	1,392			1,320			1,546			5	%	(15	)%
South America	1,399			1,431			1,993			(2	)%	(28	)%
Asia	1,555			1,551			1,619			—	%	(4	)%
Surface Technologies	596			609			679			(2	)%	(10	)%
	$	10,534		$	10,776		$	12,273		(2	)%	(12	)%
Operating Profit
North America	$	1,430		$	1,558		$	1,580		(8	)%	(1	)%
Europe	273			250			291			9	%	(14	)%
South America	257			291			449			(12	)%	(35	)%
Asia	276			289			303			(4	)%	(5	)%
Surface Technologies	102			105			123			(3	)%	(15	)%
Segment operating profit	2,338			2,493			2,746			(6	)%	(9	)%
Cost reduction program and other charges	(100		)	(172		)	(138		)
Consolidated operating profit	$	2,238		$	2,321		$	2,608

* Sales variances were negatively impacted by foreign currency translation and by cost pass-through. Similarly, operating profit variances were negatively impacted by foreign currency translation. Refer to the following segment discussions for a quantification of these impacts and the "Currency" section of this MD&A for a summary of the significant currencies and exchange rates used to translate the foreign financial statements to U.S. dollars.

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North America

(Dollar amounts in millions) Year Ended December 31,										Variance
	2016			2015			2014			2016 vs. 2015		2015 vs. 2014
Sales	$	5,592		$	5,865		$	6,436		(5	)%	(9	)%
Cost of sales, exclusive of depreciation and amortization	2,872			3,028			3,514
Gross margin	2,720			2,837			2,922
Operating expenses	676			670			731
Depreciation and amortization	614			609			611
Operating profit	$	1,430		$	1,558		$	1,580		(8	)%	(1	)%
Operating margin	25.6		%	26.6		%	24.5		%

	2016 vs. 2015				2015 vs. 2014
	% Change				% Change
	Sales		Operating Profit		Sales		Operating Profit
Factors Contributing to Changes
Volume	(3	)%	(6	)%	(3	)%	(4	)%
Price/Mix	1	%	3	%	1	%	3	%
Cost pass-through	(1	)%	—	%	(4	)%	—	%
Currency	(2	)%	(2	)%	(3	)%	(4	)%
Acquisitions/Divestitures	—	%	—	%	—	%	—	%
Other	—	%	(3	)%	—	%	4	%
	(5	)%	(8	)%	(9	)%	(1	)%

The following tables provide sales by end-market and distribution method:

	% of Sales						% Change*
	2016		2015		2014		2016 vs. 2015		2015 vs. 2014
Sales by End-Markets
Manufacturing	29	%	30	%	30	%	(5	)%	(4	)%
Metals	12	%	11	%	12	%	(1	)%	(11	)%
Energy	17	%	18	%	20	%	(6	)%	—	%
Chemicals	9	%	10	%	10	%	(8	)%	(6	)%
Electronics	5	%	5	%	4	%	(4	)%	15	%
Healthcare	7	%	7	%	7	%	2	%	4	%
Food & Beverage	10	%	9	%	8	%	6	%	6	%
Aerospace	2	%	2	%	1	%	(1	)%	3	%
Other	9	%	8	%	8	%	5	%	(4	)%
	100	%	100	%	100	%

* Excludes impact of currency, natural gas/precious metals cost pass-through and acquisitions/divestitures.

27

	% of Sales
	2016		2015		2014
Sales by Distribution Method
On-Site	28	%	28	%	30	%
Merchant	38	%	38	%	36	%
Packaged Gas	31	%	32	%	32	%
Other	3	%	2	%	2	%
	100	%	100	%	100	%

The North America segment includes Praxair’s industrial gases operations in the United States, Canada and Mexico.

Sales for 2016 decreased $273 million, or 5%, versus 2015. Excluding currency and cost pass–through impacts, sales were 2% below the prior year due to lower volumes, primarily packaged gases, partially offset by higher pricing. By end–market, lower sales primarily to manufacturing and upstream energy customers were partially offset by growth in food and beverage and healthcare.

Operating profit in 2016 decreased $128 million, or 8% from 2015. Currency translation impacts, primarily the devaluation of both the Mexican Peso and the Canadian Dollar against the U.S. Dollar, reduced operating profit by 2%. Excluding currency translation impacts, operating profit decreased 6% driven by lower volumes partially offset by higher pricing. In addition, 2015 included a gain from the sale of a packaged gas business.

Sales for 2015 decreased $571 million, or 9%, versus 2014. Excluding currency and cost pass-through impacts, organic sales were 2% below the prior year due to lower volumes partially offset by higher pricing. By end-market, sales growth to the electronics, healthcare and food and beverage industries was more than offset by declines in sales to the metals, manufacturing and chemicals industries. On-site volumes to metals customers were lower than the prior year which accounted for the decrease in on-site sales as a percent of total sales in 2015.

Operating profit in 2015 decreased $22 million, or 1% from 2014. Currency translation impacts, primarily the devaluation of both the Mexican Peso and the Canadian Dollar against the U.S. Dollar, reduced operating profit by 4%. Operating profit grew 3% excluding currency translation impacts. Higher pricing, productivity and a $28 million gain from the sale of a packaged gas business to an existing equity investment were partially offset by lower volumes. 2014 included a $9 million benefit related to a change in accounting principle for LIFO inventories in the United States.

Europe

(Dollar amounts in millions) Year Ended December 31,										Variance
	2016			2015			2014			2016 vs. 2015		2015 vs. 2014
Sales	$	1,392		$	1,320		$	1,546		5	%	(15	)%
Cost of sales, exclusive of depreciation and amortization	775			749			868
Gross margin	617			571			678
Operating expenses	189			176			219
Depreciation and amortization	155			145			168
Operating profit	$	273		$	250		$	291		9	%	(14	)%
Operating margin	19.6		%	18.9		%	18.8		%

28

	2016 vs. 2015				2015 vs. 2014
	% Change				% Change
	Sales		Operating Profit		Sales		Operating Profit
Factors Contributing to Changes
Volume	1	%	—	%	1	%	1	%
Price/Mix	—	%	1	%	1	%	3	%
Cost pass-through	—	%	—	%	—	%	—	%
Currency	(1	)%	(1	)%	(17	)%	(17	)%
Acquisitions/Divestitures	5	%	3	%	—	%	—	%
Other	—	%	6	%	—	%	(1	)%
	5	%	9	%	(15	)%	(14	)%

The following tables provide sales by end-market and distribution method:

	% of Sales						% Change*
	2016		2015		2014		2016 vs. 2015		2015 vs. 2014
Sales by End-Markets
Manufacturing	21	%	22	%	22	%	(2	)%	4	%
Metals	16	%	17	%	16	%	—	%	9	%
Energy	5	%	6	%	7	%	(9	)%	(17	)%
Chemicals	14	%	14	%	15	%	1	%	(2	)%
Electronics	7	%	7	%	7	%	6	%	4	%
Healthcare	11	%	11	%	11	%	4	%	—	%
Food & Beverage	12	%	10	%	9	%	5	%	8	%
Aerospace	1	%	1	%	—	%	5	%	35	%
Other	13	%	12	%	13	%	6	%	(1	)%
	100	%	100	%	100	%

* Excludes impact of currency, natural gas/precious metals cost pass-through and acquisitions/divestitures.

	% of Sales
	2016		2015		2014
Sales by Distribution Method
On-Site	19	%	20	%	19	%
Merchant	35	%	34	%	35	%
Packaged Gas	42	%	42	%	43	%
Other	4	%	4	%	3	%
	100	%	100	%	100	%

Praxair’s European industrial gases business operates in Spain, Ireland, Italy, France, Germany, Russia, the United Kingdom, Scandinavia and the Benelux region.

Sales in 2016 increased $72 million, or 5% from 2015 driven primarily by the acquisition of a carbon dioxide business largely serving the food and beverage market. Excluding the impact of acquisitions and unfavorable currency translation impacts, underlying sales increased 1% largely driven by volume growth from new project start–ups. The increase in the percentage of merchant sales year–over–year is primarily due to the acquisition of the carbon dioxide business. Refer to Note 3 to the consolidated financial statements for additional information.

Operating profit in 2016 of $273 million increased 9% from 2015 driven by the acquisition of a carbon dioxide business, higher pricing and cost reduction actions, partially offset by negative currency impacts.

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Sales in 2015 decreased $226 million, or 15% from 2014 primarily due to unfavorable currency translation impacts. Excluding unfavorable currency impacts, sales increased 2% year-over-year due to higher volumes in Russia, Spain, Italy, and Germany and higher pricing. Volume growth was largely due to new on-site project start-ups in Russia which accounted for the increase in on-site sales as a percentage of total segment sales.

Operating profit in 2015 of $250 million decreased 14% from 2014 primarily due to unfavorable currency translation impacts. Excluding currency impacts, operating profit increased 3% as higher pricing and volumes were partially offset by higher costs.

South America

(Dollar amounts in millions) Year Ended December 31,										Variance
	2016			2015			2014			2016 vs. 2015		2015 vs. 2014
Sales	$	1,399		$	1,431		$	1,993		(2	)%	(28	)%
Cost of sales, exclusive of depreciation and amortization	828			809			1,101
Gross margin	571			622			892
Operating expenses	181			196			266
Depreciation and amortization	133			135			177
Operating profit	$	257		$	291		$	449		(12	)%	(35	)%
Operating margin	18.4		%	20.3		%	22.5		%

	2016 vs. 2015				2015 vs. 2014
	% Change				% Change
	Sales		Operating Profit		Sales		Operating Profit
Factors Contributing to Changes
Volume	2	%	(2	)%	(4	)%	(10	)%
Price/Mix	4	%	17	%	5	%	22	%
Cost pass-through	—	%	—	%	1	%	—	%
Currency	(8	)%	(9	)%	(30	)%	(31	)%
Acquisitions/Divestitures	—	%	—	%	—	%	—	%
Other	—	%	(18	)%	—	%	(16	)%
	(2	)%	(12	)%	(28	)%	(35	)%

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The following tables provide sales by end-market and distribution method:

	% of Sales						% Change*
	2016		2015		2014		2016 vs. 2015		2015 vs. 2014
Sales by End-Markets
Manufacturing	18	%	21	%	21	%	(10	)%	(3	)%
Metals	31	%	28	%	27	%	14	%	2	%
Energy	2	%	2	%	2	%	16	%	6	%
Chemicals	9	%	9	%	9	%	1	%	1	%
Electronics	—	%	—	%	—	%	—	%	—	%
Healthcare	19	%	18	%	18	%	13	%	7	%
Food & Beverage	13	%	13	%	13	%	12	%	6	%
Aerospace	—	%	—	%	—	%	—	%	—	%
Other	8	%	9	%	10	%	(5	)%	(8	)%
	100	%	100	%	100	%

* Excludes impact of currency, natural gas/precious metals cost pass-through and acquisitions/divestitures.

	% of Sales
	2016		2015		2014
Sales by Distribution Method
On-Site	31	%	28	%	26	%
Merchant	40	%	41	%	43	%
Packaged Gas	27	%	29	%	29	%
Other	2	%	2	%	2	%
	100	%	100	%	100	%

Praxair’s South American industrial gases business operates in Brazil, Argentina, Bolivia, Chile, Colombia, Paraguay, Peru, and Uruguay.

Sales in 2016 decreased $32 million, or 2%, versus 2015. Unfavorable currency translation impacts reduced sales by 8% primarily due to the devaluation of the Brazilian Real and Argentine Peso against the U.S. dollar. Excluding currency, sales grew 6% primarily driven by higher overall pricing which increased sales by 4% and a 2% increase due to higher volumes attributable to new plant start–ups for metals customers partially offset by lower sales to the manufacturing end–market due to weak industrial production.

Operating profit decreased $34 million or 12% versus 2015. Excluding negative currency effects which reduced operating profit by 9%, operating profit decreased 3% as higher pricing was more than offset by higher costs, including inflation.

Sales in 2015 decreased $562 million, or 28%, versus 2014. Unfavorable currency translation impacts reduced sales by 30% primarily due to the significant devaluation of the Brazilian Real against the U.S. dollar. Excluding currency and cost pass-through impacts, sales grew 1% due to higher overall pricing. Higher pricing was largely offset by lower volumes primarily in Brazil due to slower industrial production.

Operating profit in 2015 decreased $158 million or 35% versus 2014 . Excluding negative currency effects which reduced operating profit by 31%, operating profit decreased 4% as higher pricing and cost reduction actions were more than offset by lower volumes and inflationary cost increases.

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Asia

(Dollar amounts in millions) Year Ended December 31,										Variance
	2016			2015			2014			2016 vs. 2015		2015 vs. 2014
Sales	$	1,555		$	1,551		$	1,619		—	%	(4	)%
Cost of sales, exclusive of depreciation and amortization	998			977			1,041
Gross margin	557			574			578
Operating expenses	102			109			105
Depreciation and amortization	179			176			170
Operating profit	$	276		$	289		$	303		(4	)%	(5	)%
Operating margin	17.7		%	18.6		%	18.7		%

	2016 vs. 2015				2015 vs. 2014
	% Change				% Change
	Sales		Operating Profit		Sales		Operating Profit
Factors Contributing to Changes
Volume / Equipment	5	%	2	%	(1	)%	(4	)%
Price/Mix	(1	)%	(6	)%	—	%	1	%
Cost pass-through	1	%	—	%	(2	)%	—	%
Currency	(4	)%	(4	)%	(3	)%	(4	)%
Acquisitions / Divestitures	(1	)%	—	%	2	%	1	%
Other	—	%	4	%	—	%	1	%
	—	%	(4	)%	(4	)%	(5	)%

The following tables provide sales by end-market and distribution method:

	% of Sales						% Change*
	2016		2015		2014		2016 vs. 2015		2015 vs. 2014
Sales by End-Markets
Manufacturing	9	%	9	%	10	%	(8	)%	(10	)%
Metals	28	%	29	%	28	%	5	%	3	%
Energy	3	%	3	%	3	%	(3	)%	9	%
Chemicals	14	%	13	%	12	%	19	%	5	%
Electronics	33	%	32	%	31	%	4	%	1	%
Healthcare	1	%	1	%	1	%	8	%	(9	)%
Food & Beverage	2	%	2	%	2	%	6	%	6	%
Aerospace	—	%	—	%	—	%	—	%	—	%
Other	10	%	11	%	13	%	(2	)%	(21	)%
	100	%	100	%	100	%

* Excludes impact of currency, natural gas/precious metals cost pass-through and acquisitions/divestitures.

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	% of Sales
	2016		2015		2014
Sales by Distribution Method
On-Site	50	%	50	%	51	%
Merchant	29	%	30	%	29	%
Packaged Gas	14	%	13	%	12	%
Other	7	%	7	%	8	%
	100	%	100	%	100	%

The Asia segment includes Praxair’s industrial gases operations in China, India, Korea and Thailand, with smaller operations in Taiwan and the Middle East.

Asia segment sales in 2016 were comparable to the prior year. Unfavorable currency translation impacts reduced sales by 4% primarily due to the devaluation of the Chinese yuan and Indian Rupee against the U.S. Dollar. Cost pass–through increased sales by 1%. Excluding these impacts, sales increased 3%. Volume growth of 5% included new plant start–ups and was strongest to the chemicals and metals end-markets. Pricing was lower than the prior year by 1%.

Asia segment operating profit for 2016 decreased $13 million, or 4%, as compared to the prior year. Excluding currency impacts, operating profit was steady with prior year as lower pricing was offset by volume growth and cost reduction actions.

Asia segment sales in 2015 decreased $68 million, or 4%, as compared to the prior year. Currency and cost pass-through of precious metals prices used in electronic materials end-markets reduced sales by 5%. Excluding these impacts, sales grew 1% year-over-year primarily driven by the acquisition of an equity investment in 2014. Lower volumes were impacted by a sale of equipment in China in 2014, which was partially offset by an increase in volumes primarily from new project start ups in China, India, and Korea.

Asia segment operating profit for 2015 decreased $14 million, or 5%, as compared to the prior year. Currency reduced operating profit by 4%. Excluding currency impacts, operating profit was 1% below the prior year. Lower volumes, including the impact of a sale of equipment in China in 2014, reduced operating profit by 4%. This more than offset the improvements from overall pricing, productivity actions and an acquisition. In the fourth quarter 2014, operating profit included a $14 million gain related to the acquisition of an equity investment that did not recur during the current year.

Surface Technologies

(Dollar amounts in millions) Year Ended December 31,										Variance
	2016			2015			2014			2016 vs. 2015		2015 vs. 2014
Sales	$	596		$	609		$	679		(2	)%	(10	)%
Cost of sales, exclusive of depreciation and amortization	388			397			438
Gross margin	208			212			241
Operating expenses	66			66			75
Depreciation and amortization	40			41			43
Operating profit	$	102		$	105		$	123		(3	)%	(15	)%
Operating margin	17.1		%	17.2		%	18.1		%

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	2016 vs. 2015				2015 vs. 2014
	% Change				% Change
	Sales		Operating Profit		Sales		Operating Profit
Factors Contributing to Changes
Volume/Price	(2	)%	(8	)%	(3	)%	(13	)%
Cost pass-through	—	%	—	%	—	%	—	%
Currency	(1	)%	(1	)%	(7	)%	(6	)%
Acquisitions/Divestitures	1	%	—	%	—	%	—	%
Other	—	%	6	%	—	%	4	%
	(2	)%	(3	)%	(10	)%	(15	)%

The following table provides sales by end-market:

	% of Sales						% Change*
	2016		2015		2014		2016 vs. 2015		2015 vs. 2014
Sales by End-Markets
Manufacturing	11	%	12	%	13	%	(5	)%	(13	)%
Metals	9	%	8	%	8	%	11	%	(3	)%
Energy	23	%	25	%	28	%	(10	)%	(12	)%
Chemicals	2	%	2	%	2	%	(4	)%	6	%
Electronics	1	%	1	%	1	%	17	%	13	%
Healthcare	—	%	—	%	—	%	—	%	—	%
Food & Beverage	4	%	4	%	3	%	2	%	48	%
Aerospace	40	%	37	%	34	%	3	%	3	%
Other	10	%	11	%	11	%	(12	)%	(8	)%
	100	%	100	%	100	%

* Excludes impact of currency, natural gas/precious metals cost pass-through and acquisitions/divestitures.

Surface Technologies provides high-performance coatings and thermal-spray powders and equipment in the Americas, Europe, and Asia.

Sales decreased $13 million, or 2% versus 2015 primarily due to lower volumes to the energy and manufacturing end–markets partially offset by growth in the aerospace end-market. Unfavorable currency translation impacts reduced sales by 1% while acquisitions increased sales by 1%.

Operating profit decreased $3 million, or 3% versus 2015. Lower volumes partially offset by higher pricing decreased operating profit by 8%, and negative currency translation reduced operating profit by 1%. These impacts were partially offset by productivity gains and savings from cost reduction programs.

During the fourth quarter of 2016, surface technologies completed the formation of PG Technologies, LLC ("PGT"), a majority–owned joint venture with GE Aviation ("GE") for the development, support and application of specialized coatings tailored for GE's and CFM International’s (a GE joint venture with Safran Aircraft Engines of France) current and future engine models, including the GE9X and LEAP engines. PGT will expand its production with a new coatings plant in the southeast United States.

Sales in 2015 decreased $70 million, or 10% versus 2014 primarily due to negative currency impacts of 7%, including a weaker Euro, British pound and Japanese yen versus the U.S. dollar. In addition, lower volumes to the manufacturing and energy end-markets reduced sales by 3%.

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Operating profit in 2015 decreased $18 million, or 15% versus 2014. Lower volumes decreased operating profit by 13%, and negative currency translation reduced operating profit by 6%. These impacts were partially offset by higher pricing, productivity gains and savings from cost reduction programs which increased operating profit by 4%.

Currency

The results of Praxair’s non-U.S. operations are translated to the company’s reporting currency, the U.S. dollar, from the functional currencies used in the countries in which the company operates. For most foreign operations, Praxair uses the local currency as its functional currency. There is inherent variability and unpredictability in the relationship of these functional currencies to the U.S. dollar and such currency movements may materially impact Praxair’s results of operations in any given period.

To help understand the reported results, the following is a summary of the significant currencies underlying Praxair’s consolidated results and the exchange rates used to translate the financial statements (rates of exchange expressed in units of local currency per U.S. dollar):

	Percent of 2016 Consolidated Sales		Statements of Income			Balance Sheets
			Average Year Ended December 31,			December 31,
Currency			2016	2015	2014	2016	2015
Brazilian real	11	%	3.47	3.28	2.35	3.26	3.90
Euro	10	%	0.90	0.90	0.75	0.95	0.92
Canadian dollar	7	%	1.32	1.28	1.10	1.34	1.38
Chinese yuan	6	%	6.64	6.28	6.16	6.95	6.49
Mexican peso	5	%	18.65	15.83	13.30	20.73	17.21
Korean won	4	%	1,160	1,130	1,053	1,206	1,175
Indian rupee	3	%	67.18	64.11	61.03	67.92	66.15
Argentine peso	1	%	14.74	9.22	8.10	15.89	13.04
British pound	1	%	0.74	0.65	0.61	0.81	0.68
Norwegian krone	1	%	8.39	8.05	6.28	8.64	8.84

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LIQUIDITY, CAPITAL RESOURCES AND OTHER FINANCIAL DATA

(Millions of dollars) Year Ended December 31,	2016			2015			2014
Net Cash Provided by (Used for)
Operating Activities
Net Income (including noncontrolling interests)	$	1,538		$	1,591		$	1,746
Non-cash charges (credits):
Add: Cost reduction program and other charges, net of payments (a)	83			121			138
Add: Depreciation and amortization	1,122			1,106			1,170
Add (Less): Deferred income taxes	(13		)	99			55
Less: Other non-cash charges	(4		)	(49		)	(65		)
Net Income adjusted for non-cash charges	2,726			2,868			3,044
Less: Pension contributions	(11		)	(15		)	(18		)
Add (Less): Working capital	52			(84		)	(129		)
Add (Less): Other (c)	6			(74		)	(10		)
Net cash provided from operating activities (c)	$	2,773		$	2,695		$	2,887
Investing Activities
Capital expenditures	$	(1,465	)	$	(1,541	)	$	(1,689	)
Acquisitions, net of cash acquired	(363		)	(82		)	(206		)
Divestitures and asset sales	58			320			92
Total used for investing	$	(1,770	)	$	(1,303	)	$	(1,803	)
Financing Activities
Debt increases – net	$	357		$	168		$	589
Purchases of common stock – net	(89		)	(637		)	(759		)
Cash dividends – Praxair, Inc. shareholders	(856		)	(819		)	(759		)
Excess tax benefit on stock based compensation	—			19			31
Noncontrolling interest transactions and other (c)	(55		)	(41		)	(129		)
Total provided (used) for financing (c)	$	(643	)	$	(1,310	)	$	(1,027	)
Effect of exchange rate changes on cash	$	17		$	(61	)	$	(69	)
Cash and cash equivalents	$	524		$	147		$	126
Other Financial Data (b)
Debt-to-capital ratio	62.3		%	64.9		%	59.5		%
After-tax return on capital ("ROC")	12.0		%	12.6		%	12.7		%
Return on Praxair, Inc. shareholder's equity ("ROE")	31.9		%	34.6		%	28.7		%
Adjusted EBITDA	$	3,501		$	3,642		$	3,958
Adjusted EBITDA Margin	33.2		%	33.8		%	32.2		%
Debt-to-Adjusted EBITDA	2.6			2.5			2.3

____________________

(a) See Note 2 to the consolidated financial statements.

(b) Non-GAAP measures. See the “Non-GAAP Financial Measures” section for definitions and reconciliations to reported amounts.

(c) During 2016, Praxair adopted the FASB's Improvements to Employee Share-Based Payment Accounting standard. As a result of the standard, withholding tax payments related to stock compensation are required to be presented as financing versus operating cash flows on a retrospective basis (see Note 1 to the consolidated financial statements).

36

Cash increased $377 million in 2016 versus 2015. The primary sources of cash in 2016 were cash flows from operations of $2,773 million, proceeds from divestitures and asset sales of $58 million and debt increases net of repayments of $357 million. The significant uses of cash were capital expenditures of $1,465 million, cash dividends to shareholders of $856 million, acquisitions of $363 million and purchases of Praxair common stock net of issuances of $89 million.

Cash Flows From Operations

2016 compared with 2015

Cash flows from operations was $2,773 million, or 26% of sales, an increase of $78 million from $2,695 million, or 25% of sales in 2015. The increase was primarily attributable to lower working capital requirements and favorable changes in other long–term assets and liabilities which were partially offset by lower net income adjusted for non–cash charges.

2015 compared with 2014

Cash flows from operations was $2,695 million, or 25% of sales, a decrease of $192 million from $2,887 million, or 24% of sales in 2014. Cash flows provided from net income decreased $155 million and decreased $176 million after adjusting for the change in non-cash items included in net income. The decrease is primarily due to negative currency translation impacts. Cash used for working capital requirements decreased $45 million versus 2014.

37

Investing

2016 compared with 2015

Net cash used for investing activities of $1,770 million increased $467 million versus 2015 due to higher acquisitions and lower proceeds from divestiture and asset sales, partially offset by lower capital expenditures.

Capital expenditures in 2016 were $1,465 million, a decrease of $76 million from 2015. Capital expenditures during 2016 related primarily to investments in new plant and production equipment for growth and density. Approximately 60% of the capital expenditures were in North America with the rest in Asia, Europe and South America.

Acquisition expenditures in 2016 were $363 million, an increase of $281 million from 2015. Acquisitions were primarily comprised of the acquisition of a European carbon dioxide business and packaged gases businesses in North America and Europe (see Note 3 to the consolidated financial statements).

Divestitures and asset sales in 2016 totaled $58 million, which included proceeds from assets sales and the sale of an ownership interest in a majority-owned joint venture in India. 2015 divestitures and asset sales were $320 million primarily due to the sale of fixed assets under construction to a customer in the North America energy market.

2015 compared with 2014

Net cash used for investing activities of $1,303 million decreased $500 million versus 2014 due to lower capital expenditures, lower acquisitions, and higher proceeds from divestitures and asset sales.

Capital expenditures in 2015 were $1,541 million, a decrease of $148 million from 2014. Capital expenditures during 2015 related primarily to investments in new plant and production equipment for growth and density. Approximately 50% of the capital expenditures were in North America with the rest in Asia, Europe and South America.

Acquisition expenditures in 2015 were $82 million, a decrease of $124 million from 2014. Acquisitions in 2015 consisted primarily of packaged gases businesses in North and South America and an acquisition of a controlling interest of an equity investment in Asia (see Note 3 to the consolidated financial statements).

Divestitures and asset sales in 2015 totaled $320 million, which was primarily comprised of $235 million from the sale of fixed assets under construction to a customer in the North America energy market during the second quarter, and $65 million from the sale of a packaged gas business to an existing equity investment in the fourth quarter.

38

Financing

Praxair’s financing strategy is to secure long-term committed funding by issuing public notes and debentures and commercial paper backed by a long-term bank credit agreement. Praxair’s international operations are funded through a combination of local borrowing and inter-company funding to minimize the total cost of funds and to manage and centralize currency exchange exposures. As deemed necessary, Praxair manages its exposure to interest-rate changes through the use of financial derivatives (see Note 12 to the consolidated financial statements and Item 7A. Quantitative and Qualitative Disclosures About Market Risk).

Cash used by financing activities was $643 million in 2016 compared to $1,310 million in 2015. The primary financing uses of cash were for cash dividends and net purchases of common stock, while the primary source was net issuances of debt. Cash dividends of $856 million increased $37 million from 2015 due to a 5% increase in dividends per share from $2.86 to $3.00 and net purchases of common stock of $89 million decreased $548 million as synergistic acquisitions increased. The noncontrolling interests and other payments was $55 million versus $41 million in 2015 and primarily included the acquisition of the remaining 34% of a Scandinavian joint venture, partially offset by the proceeds received from the formation of a consolidated joint venture in the United States and Singapore (see Note 14 to the consolidated financial statements). The cash received from debt issuances-net of $357 million increased $189 million from $168 million of debt issuances during 2015 while cash increased $377 million. Net debt (debt minus cash) decreased $93 million.

The company believes that it has sufficient operating flexibility, cash reserves, and funding sources to maintain adequate amounts of liquidity to meet its business needs around the world. At December 31, 2016, the company’s credit ratings as reported by Standard & Poor’s and Moody’s were A-1 and P-1 for short-term debt, respectively, and A and A2 for long-term debt, respectively. Additionally, the company plans to retain overseas its undistributed earnings of foreign subsidiaries to support foreign growth opportunities and reduce local debt.

Note 11 to the consolidated financial statements includes information with respect to the company’s debt refinancing in 2016, current debt position, debt covenants and the available credit facility; and Note 12 includes information relating to derivative financial instruments. Praxair's credit facility is with major financial institutions and is non-cancellable until maturity. Therefore, the company believes the risk of the financial institutions being unable to make required loans under the credit facility, if requested, to be low. Praxair’s major bank credit and long-term debt agreements contain standard covenants. The company was in compliance with these covenants at December 31, 2016 and expects to remain in compliance for the foreseeable future.

Praxair’s total net debt outstanding at December 31, 2016 was $8,991 million, $93 million lower than $9,084 million at December 31, 2015. The December 31, 2016 net debt balance includes $9,346 million in public securities, $169 million representing primarily worldwide bank borrowings net of $524 million of cash. Praxair’s global effective borrowing rate was approximately 2.17% for 2016.

39

In February 2016, Praxair repaid $400 million of 0.75% notes that became due. Also in February 2016, Praxair redeemed $325 million of 5.20% notes due March 2017 resulting in a $16 million charge to interest expense ($10 million after-tax, or $0.04 per diluted share) (see Note 11 to the consolidated financial statements).

In February 2016, Praxair issued €550 million ($575 million as of December 31, 2016) of 1.20% Euro-denominated notes due 2024. In addition, Praxair issued $275 million of 3.20% notes due 2026.

Other Financial Data

Praxair’s debt-to-capital ratio was 62.3% at December 31, 2016 versus 64.9% at December 31, 2015. This decrease was primarily attributable to (i) a reduction in net debt of $93 million; (ii) an increase in equity due to currency translation impacts on the accumulated other comprehensive income (loss) component as well as increases to equity due to earnings net of dividends declared and (iii) a decrease of $102 million in redeemable noncontrolling interests primarily due to the acquisition of a 34% stake in a consolidated joint venture. Praxair's debt is largely denominated in U.S. dollars.

After-tax return on capital ("ROC") was 12.0% at December 31, 2016 versus 12.6% for 2015, and 12.7% for 2014. This decrease is because net operating profit after tax ("NOPAT") has decreased at a greater percentage than capital due largely to the impact of capital projects and investments.

Return on equity ("ROE") was 31.9% at December 31, 2016 versus 34.6% and 28.7% for 2015 and 2014, respectively. The decrease is because positive currency movements impacted adjusted net income less than shareholders' equity.

Adjusted EBITDA decreased $141 million to $3,501 million in 2016 from $3,642 million in 2015 while adjusted EBITDA margin decreased to 33.2% in 2016 from 33.8% in 2015. The decrease in adjusted EBITDA is primarily due to lower adjusted net income adjusted for depreciation and amortization versus the prior year. Adjusted EBITDA decreased $316 million to $3,642 million in 2015 from $3,958 million in 2014 while adjusted EBITDA margin increased to 33.8% in 2015 from 32.2% in 2014. The decrease in adjusted EBITDA is primarily due to lower adjusted net income adjusted for depreciation and amortization versus the prior year primarily due to negative currency impacts.

Debt -to-Adjusted EBITDA was 2.6 and 2.5 for the four-quarter trailing period ended December 31, 2016 and 2015 respectively, primarily due to lower adjusted EBITDA.

See the “Non-GAAP Financial Measures” section for definitions and reconciliation of these non-GAAP measures to reported amounts.

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CONTRACTUAL OBLIGATIONS

The following table sets forth Praxair’s material contract obligations and other commercial commitments as of December 31, 2016:

(Millions of dollars)	Due or expiring by December 31,
	2017		2018		2019		2020		2021		Thereafter		Total
Long-term debt obligations:
Debt and capitalized lease maturities (Note 11)*	$	164	$	985	$	1,503	$	938	$	1,006	$	4,485	$	9,081
Contractual interest	220		210		185		156		128		701		1,600
Operating leases (Note 4)*	117		97		79		65		54		117		529
Retirement obligations	38		31		35		32		31		140		307
Unconditional purchase obligations (Note 17)*	585		534		476		422		434		2,645		5,096
Construction commitments (Note 17)*	836		271		125		—		—		—		1,232
Total Contractual Obligations	$	1,960	$	2,128	$	2,403	$	1,613	$	1,653	$	8,088	$	17,845

* See respective Notes to the consolidated financial statements for additional information.

Contractual interest on long-term debt of $1,600 million represents interest the company is contracted to pay on outstanding long-term debt, current portion of long-term debt and capital lease obligations, calculated on a basis consistent with planned debt maturities, excluding the interest impact of interest rate swaps. At December 31, 2016, Praxair had fixed-rate debt of $8,407 million and floating-rate debt of $1,108 million. The rate assumed for floating-rate debt was the rate in effect at December 31, 2016.

Retirement obligations of $307 million include estimates of pension plan contributions and expected future benefit payments for unfunded pension and OPEB plans. Pension plan contributions are forecasted for 2017 only. For purposes of the table, $13 million of estimated required contributions have been included for 2017. Expected future unfunded pension and OPEB benefit payments are forecasted only through 2026. Contribution and unfunded benefit payment estimates are based upon current valuation assumptions. Estimates of pension contributions after 2017 and unfunded benefit payments after 2026 are not included in the table because the timing of their resolution cannot be estimated. Retirement obligations are more fully described in Note 16 to the consolidated financial statements.

Liabilities for uncertain tax positions totaling $56 million, including interest and penalties, are not included in the table because the timing of their resolution cannot be estimated. See Note 5 to the consolidated financial statements for disclosures surrounding uncertain income tax positions.

OFF-BALANCE SHEET ARRANGEMENTS

As discussed in Note 17 to the consolidated financial statements, at December 31, 2016, Praxair had entered into various guarantees and other arrangements, and had undrawn outstanding letters of credit from financial institutions. These arrangements were entered into in connection with normal business operations and they are not reasonably likely to have a material impact on Praxair’s consolidated financial condition, results of operations, or liquidity.

CRITICAL ACCOUNTING POLICIES

The policies discussed below are considered by management to be critical to understanding Praxair’s financial statements and accompanying notes prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). Their application places significant importance on management’s judgment as a result of the need to make estimates of matters that are inherently uncertain. Praxair’s financial position, results of operations and cash flows could be materially affected if actual results differ from estimates made. These policies are determined by management and have been reviewed by Praxair’s Audit Committee.

Depreciable Lives of Property, Plant and Equipment

Praxair’s net property, plant and equipment at December 31, 2016 was $11,477 million, representing 59% of the company’s consolidated total assets. Depreciation expense for the year ended December 31, 2016 was $1,071 million, or 13% of total operating costs. Management judgment is required in the determination of the estimated depreciable lives that are used to calculate the annual depreciation expense and accumulated depreciation.

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Property, plant and equipment are recorded at cost and depreciated over the assets’ estimated useful lives on a straight-line basis for financial reporting purposes. The estimated useful life represents the projected period of time that the asset will be productively employed by the company and is determined by management based on many factors, including historical experience with similar assets, technological life cycles, geographic locations and contractual supply relationships with on-site customers. Circumstances and events relating to these assets, such as on-site contract modifications, are monitored to ensure that changes in asset lives or impairments (see “Asset Impairments”) are identified and prospective depreciation expense or impairment expense is adjusted accordingly. Praxair’s largest asset values relate to cryogenic air-separation production plants with depreciable lives of principally 15 years.

Based upon the assets as of December 31, 2016, if depreciable lives of machinery and equipment, on average, were increased or decreased by one year, annual depreciation expense would be decreased by approximately $66 million or increased by approximately $75 million, respectively.

Pension Benefits

Pension benefits represent financial obligations that will be ultimately settled in the future with employees who meet eligibility requirements. Because of the uncertainties involved in estimating the timing and amount of future payments, significant estimates are required to calculate pension expense and liabilities related to the company’s plans. The company utilizes the services of several independent actuaries, whose models are used to facilitate these calculations.

Several key assumptions are used in actuarial models to calculate pension expense and liability amounts recorded in the financial statements. Management believes the three most significant variables in the models are the expected long-term rate of return on plan assets, the discount rate, and the expected rate of compensation increase. The actuarial models also use assumptions for various other factors, including employee turnover, retirement age, and mortality. Praxair management believes the assumptions used in the actuarial calculations are reasonable, reflect the company’s experience and expectations for the future and are within accepted practices in each of the respective geographic locations in which it operates. Actual results in any given year will often differ from actuarial assumptions because of economic and other factors.

The weighted-average expected long-term rates of return on pension plan assets were 8.00% for U.S. plans and 7.92% for international plans for the year ended December 31, 2016 (8.00% and 7.71%, respectively at December 31, 2015). These rates are determined annually by management based on a weighted average of current and historical market trends, historical and expected portfolio performance and the current and expected portfolio mix of investments. A 0.50% change in these expected long-term rates of return, with all other variables held constant, would change Praxair’s pension expense by approximately $10 million.

The company has consistently used a market-related value of assets rather than the fair value at the measurement date to determine annual pension expense. The market-related value recognizes investment gains or losses over a five-year period. As a result, changes in the fair value of assets from year to year are not immediately reflected in the company’s annual pension expense. Instead, annual pension expense in future periods will be impacted as deferred investment gains or losses are recognized in the market-related value of assets over the five-year period. The consolidated market-related value of assets was $2,064 million, or $50 million higher than the fair value of assets of $2,014 million at December 31, 2016.These net deferred investment gains of $50 million will be recognized in the calculation of the market-related value of assets ratably over the next four years and will impact future pension expense. Future actual investment gains or losses will impact the market-related value of assets and, therefore, will impact future annual pension expense in a similar manner.

Discount rates are used to calculate the present value of plan liabilities and pension costs and are determined annually by management. For 2016 the Company changed the approach that it used to determine the service and interest cost components of pension and OPEB expense for significant plans to the spot rate approach. U.S. plans that do not use the spot rate approach continue to determine discount rates by using a cash flow matching model provided by the company's independent actuaries. The model includes a portfolio of corporate bonds graded Aa or better by at least half of the ratings agencies and matches the U.S. plans' projected cash flows to the calculated spot rates. Discount rates for the remaining international plans are based on market yields for high-quality fixed income investments representing the approximate duration of the pension liabilities on the measurement date. Refer to Note 16 to the consolidated financial statements for a summary of the discount rates used to calculate plan liabilities and benefit costs, and to the Retirement Benefits section of the Consolidated Results and Other Information section of this MD&A for a further discussion of 2016 benefit costs. A 0.50% change in discount rates, with all other variables held constant, would decrease/increase Praxair’s pension expense by approximately $11 million and would impact the PBO by approximately $170 million.

The weighted-average expected rate of compensation increase was 3.25% for U.S. plans and 3.73% for international plans at December 31, 2016 (3.25% and 3.57%, respectively, at December 31, 2015). The estimated annual compensation increase is determined by management every year and is based on historical trends and market indices. A 0.50% change in

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the expected rate of compensation increase, with all other variables held constant, would change Praxair’s pension expense by approximately $5 million and would impact the PBO by approximately $29 million.

Asset Impairments

Goodwill

At December 31, 2016, the company had goodwill of $3,117 million, which represents the aggregate of the excess purchase price for acquired businesses over the fair value of the net assets acquired.

The company performs a goodwill impairment test annually in the second quarter or more frequently if events or circumstances indicate that an impairment loss may have been incurred, and no impairments were indicated. The company has continuously re-evaluated the likelihood of goodwill impairments in its reporting units subsequent to the second quarter test, and does not believe there is indication of impairment for any of its reporting units. At December 31, 2016, Praxair’s enterprise value was approximately $42 billion (outstanding shares multiplied by the year-end stock price plus debt, and without any control premium) while its total capital was approximately $14 billion.

The impairment test allows an entity to first assess qualitative factors to determine if it is more likely than not that the fair value of a reporting unit is less than carrying value. If it is determined that it is more likely than not that the fair value of a reporting unit is less than carrying value then the company will estimate and compare the fair value of its reporting units to their carrying value, including goodwill. Reporting units are determined based on one level below the operating segment level. Fair value is determined through the use of projected future cash flows, multiples of earnings and sales and other factors.

Such analysis requires the use of certain market assumptions and discount factors, which are subjective in nature. As applicable, estimated values can be affected by many factors beyond the company's control such as business and economic trends, government regulation, and technological changes. Management believes that the qualitative factors used to perform its annual goodwill impairment assessment are appropriate and reasonable. Although the 2016 qualitative assessment indicated that it is more likely than not that the fair value of each reporting unit substantially exceeded its carrying value, changes in circumstances or conditions affecting this analysis could have a significant impact on the fair value determination, which could then result in a material impairment charge to the company's results of operations.

See Note 9 to the consolidated financial statements for disclosures concerning the carrying value of goodwill by reportable segment.

Property, Plant and Equipment

Property, plant and equipment is tested for impairment whenever events or changes in circumstances indicate that the carrying amount of an individual asset or asset group may not be recoverable. For purposes of this test, asset groups are determined based upon the lowest level for which there are independent and identifiable cash flows. Based upon Praxair's business model, an asset group may be a single plant and related assets used to support on-site, merchant and packaged gas customers. Alternatively, the asset group may be a pipeline complex which includes multiple interdependent plants and related assets connected by pipelines within a geographic area used to support the same distribution methods.

Income Taxes

At December 31, 2016, Praxair had deferred tax assets of $992 million (net of valuation allowances of $132 million), and deferred tax liabilities of $2,016 million. At December 31, 2016, uncertain tax positions totaled $56 million (see Notes 1 and 5 to the consolidated financial statements). Income tax expense was $551 million for the year ended December 31, 2016, or about 26.9% of pre-tax income.

In the preparation of consolidated financial statements, Praxair estimates income taxes based on diverse legislative and regulatory structures that exist in various jurisdictions where the company conducts business. Deferred income tax assets and liabilities represent tax benefits or obligations that arise from temporary differences due to differing treatment of certain items for accounting and income tax purposes. Praxair evaluates deferred tax assets each period to ensure that estimated future taxable income will be sufficient in character (e.g. capital gain versus ordinary income treatment), amount and timing to result in their recovery. A valuation allowance is established when management determines that it is more likely than not that a deferred tax asset will not be realized to reduce the assets to their realizable value. Considerable judgments are required in establishing deferred tax valuation allowances and in assessing exposures related to tax matters. As events and circumstances change, related reserves and valuation allowances are adjusted to income at that time. Praxair’s tax returns are subject to audit and local taxing authorities could challenge the company’s tax positions. The company’s practice is to review tax filing positions by jurisdiction and to record provisions for uncertain income tax

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positions, including interest and penalties when applicable. Praxair believes it records and/or discloses such potential tax liabilities as appropriate and has reasonably estimated its income tax liabilities and recoverable tax assets. If new information becomes available, adjustments are charged or credited against income at that time. Management does not anticipate that such adjustments would have a material adverse effect on the company’s consolidated financial position or liquidity; however, it is possible that the final outcomes could have a material impact on the company’s reported results of operations.

At December 31, 2016, a provision has not been made for additional U.S. federal or foreign taxes on approximately $12 billion of undistributed earnings of foreign subsidiaries because Praxair intends to reinvest these funds indefinitely to support foreign growth opportunities. It is not practicable to estimate the unrecognized deferred income tax liability on these undistributed earnings. These earnings could become subject to additional tax if they are remitted as dividends, loaned to Praxair in the U.S., or upon sale of the subsidiary’s stock.

Contingencies

The company accrues liabilities for non-income tax contingencies when management believes that a loss is probable and the amounts can be reasonably estimated, while contingent gains are recognized only when realized. If new information becomes available or losses are sustained in excess of recorded amounts, adjustments are charged against income at that time. Management does not anticipate that in the aggregate such losses would have a material adverse effect on the company’s consolidated financial position or liquidity; however, it is possible that the final outcomes could have a material impact on the company’s reported results of operations.

Praxair is subject to various claims, legal proceedings and government investigations that arise from time to time in the ordinary course of business. These actions are based upon alleged environmental, tax, antitrust and personal injury claims, among others (see Note 17 to the consolidated financial statements). Such contingencies are significant and the accounting requires considerable management judgments in analyzing each matter to assess the likely outcome and the need for establishing appropriate liabilities and providing adequate disclosures. Praxair believes it records and/or discloses such contingencies as appropriate and has reasonably estimated its liabilities.

NEW ACCOUNTING STANDARDS

See Note 1 to the consolidated financial statements for information concerning new accounting standards and the impact of the implementation of these standards on the company’s financial statements.

FAIR VALUE MEASUREMENTS

Praxair does not expect changes in the aggregate fair value of its financial assets and liabilities to have a material impact on the consolidated financial statements. See Note 13 to the consolidated financial statements.

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NON-GAAP FINANCIAL MEASURES

The company presents the following non-GAAP financial measures in the discussion of financial condition, results of operations and liquidity throughout the MD&A. These measures are intended to supplement investors’ understanding of the company’s financial information by providing information which investors, financial analysts and management use to help evaluate the company’s financial leverage, return on capital employed and operating performance. Special items which the company does not believe to be indicative of on-going business performance 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.

The following are the non-GAAP measures presented in the Selected Financial Data (Item 6) or this MD&A:

(Dollar amounts in millions, except for per share data) Year ended December 31,	2016			2015			2014			2013			2012
Performance Measures:
After-tax return on capital ("ROC")	12.0		%	12.6		%	12.7		%	12.8		%	13.9		%
Return on equity ("ROE")	31.9		%	34.6		%	28.7		%	28.6		%	28.9		%
Debt-to-capital	62.3		%	64.9		%	59.5		%	54.2		%	51.8		%
Debt-to-adjusted EBITDA	2.6			2.5			2.3			2.2			1.9
Adjusted Amounts:
Operating profit	$	2,338		$	2,493		$	2,746		$	2,657		$	2,502
Operating margin	22.2		%	23.1		%	22.4		%	22.3		%	22.3		%
EBITDA	$	3,501		$	3,642		$	3,958		$	3,804		$	3,537
EBITDA margin	33.2		%	33.8		%	32.2		%	31.9		%	31.5		%
Interest expense - net	$	174		$	161		$	177		$	160		$	141
Effective tax rate	27.1		%	28.0		%	27.5		%	28.0		%	28.0		%
Noncontrolling interests	$	(43	)	$	(45	)	$	(52	)	$	(65	)	$	(54	)
Net income – Praxair, Inc.	$	1,576		$	1,677		$	1,852		$	1,772		$	1,681
Diluted earnings per share	$	5.48		$	5.80		$	6.27		$	5.93		$	5.57

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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 capital 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).

(Dollar amounts in millions) Year Ended December 31,	2016			2015			2014			2013			2012
Adjusted operating profit (see below)	$	2,338		$	2,493		$	2,746		$	2,657		$	2,502
Less: adjusted income taxes (see below)	(586		)	(653		)	(707		)	(698		)	(660		)
Less: tax benefit on adjusted interest expense (a)	(48		)	(45		)	(50		)	(44		)	(39		)
Add: income from equity investments	41			43			42			38			34
Net operating profit after-tax ("NOPAT")	$	1,745		$	1,838		$	2,031		$	1,953		$	1,837
Beginning capital	$	13,990		$	15,285		$	15,951		$	13,850		$	12,466
First quarter ending capital	$	14,607		$	14,806		$	16,285		$	15,312		$	13,223
Second quarter ending capital	$	14,948		$	14,696		$	16,459		$	15,514		$	12,994
Third quarter ending capital	$	14,864		$	14,157		$	16,052		$	15,725		$	13,592
Year-end ending capital	$	14,443		$	13,990		$	15,285		$	15,951		$	13,850
Five-quarter average capital	$	14,570		$	14,587		$	16,007		$	15,270		$	13,225
After-tax return on capital	12.0		%	12.6		%	12.7		%	12.8		%	13.9		%

________________________

(a) Tax benefit on adjusted interest expense is computed using the effective rate adjusted for non-recurring income tax benefits and charges. The effective tax rates used for all periods was approximately 28%.

Return on Praxair, Inc. Shareholders’ 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.

(Dollar amounts in millions) Year Ended December 31,	2016			2015			2014			2013			2012
Adjusted net income – Praxair, Inc. (see below)	$	1,576		$	1,677		$	1,852		$	1,772		$	1,681
Beginning Praxair, Inc. shareholders’ equity	$	4,389		$	5,623		$	6,609		$	6,064		$	5,488
First quarter ending Praxair, Inc. shareholders’ equity	$	4,888		$	5,018		$	6,600		$	6,169		$	5,940
Second quarter ending Praxair, Inc. shareholders’ equity	$	5,140		$	4,964		$	6,911		$	5,928		$	5,615
Third quarter ending Praxair, Inc. shareholders’ equity	$	5,245		$	4,264		$	6,552		$	6,210		$	6,015
Year-End ending Praxair, Inc. shareholders’ equity	$	5,021		$	4,389		$	5,623		$	6,609		$	6,064
Five-quarter average Praxair, Inc. shareholders’ equity	$	4,937		$	4,852		$	6,459		$	6,196		$	5,824
Return on Praxair, Inc. Shareholders’ Equity	31.9		%	34.6		%	28.7		%	28.6		%	28.9		%

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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.

(Dollar amounts in millions)	2016			2015			2014			2013			2012
Year Ended December 31,
Total debt	$	9,515		$	9,231		$	9,225		$	8,779		$	7,334
Less: cash and cash equivalents	(524		)	(147		)	(126		)	(138		)	(157		)
Net debt	8,991			9,084			9,099			8,641			7,177
Equity and redeemable noncontrolling interests
Redeemable noncontrolling interests	11			113			176			307			252
Praxair, Inc. shareholders’ equity	5,021			4,389			5,623			6,609			6,064
Noncontrolling interests	420			404			387			394			357
Total equity and redeemable noncontrolling interests	5,452			4,906			6,186			7,310			6,673
Total capital	$	14,443		$	13,990		$	15,285		$	15,951		$	13,850
Debt-to-capital ratio	62.3		%	64.9		%	59.5		%	54.2		%	51.8		%

Adjusted EBITDA, Adjusted EBITDA Margin and Debt-to-Adjusted EBITDA Ratio

(Dollar amounts in millions)	2016			2015			2014			2013			2012
Year Ended December 31,
Adjusted net income - Praxair, Inc. (see below)	$	1,576		$	1,677		$	1,852		$	1,772		$	1,681
Add: adjusted noncontrolling interests (see below)	43			45			52			65			54
Add: adjusted interest expense - net (see below)	174			161			177			160			141
Add: adjusted income taxes (see below)	586			653			707			698			660
Add: depreciation and amortization	1,122			1,106			1,170			1,109			1,001
Adjusted EBITDA	$	3,501		$	3,642		$	3,958		$	3,804		$	3,537
Reported Sales	$	10,534		$	10,776		$	12,273		$	11,925		$	11,224
Adjusted EBITDA Margin	33.2		%	33.8		%	32.2		%	31.9		%	31.5		%
Beginning Praxair, Inc. net debt	$	9,084		$	9,099		$	8,641		$	7,177		$	6,449
First quarter ending Praxair, Inc. net debt	$	9,183		$	9,243		$	9,092		$	8,531		$	6,724
Second quarter ending Praxair, Inc. net debt	$	9,389		$	9,177		$	8,959		$	8,970		$	6,868
Third quarter ending Praxair, Inc. net debt	$	9,215		$	9,344		$	8,922		$	8,860		$	7,003
Year-End ending Praxair, Inc. net debt	$	8,991		$	9,084		$	9,099		$	8,641		$	7,177
Five-quarter average Praxair, Inc. net debt	$	9,172		$	9,189		$	8,943		$	8,436		$	6,844
Debt-to- adjusted EBITDA ratio	2.6			2.5			2.3			2.2			1.9

Adjusted Amounts

2016 amounts are adjusted for the impact of the cost reduction program, pension settlement and bond redemption charge. 2015 amounts are adjusted for the impact of the cost reduction program and other charges and pension settlements. 2014 amounts are adjusted for the impact of the Venezuela currency devaluation, a pension settlement and a bond redemption. 2013 amounts are adjusted for the impact of Venezuela currency devaluation, a pension settlement, an income tax benefit related to the realignment of Praxair's Italian legal structure and a bond redemption. 2012 amounts are adjusted for the impact of the cost reduction program, a pension settlement and an income tax benefit related to U.S. homecare divestiture.

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(Dollar amounts in millions, except per share data)	2016			2015			2014			2013			2012
Year Ended December 31,
Adjusted Operating Profit and Margin
Reported operating profit	$	2,238		$	2,321		$	2,608		$	2,625		$	2,437
Add: Pension settlement charge	4			7			7			9			9
Add: Venezuela currency devaluation	—			—			131			23			—
Add: Cost reduction program	96			165			—			—			56
Total adjustments	100			172			138			32			65
Adjusted operating profit	$	2,338		$	2,493		$	2,746		$	2,657		$	2,502
Reported percent change	(4		)%	(11		)%	(1		)%	8		%	(1		)%
Adjusted percent change	(6		)%	(9		)%	3		%	6		%	1		%
Reported sales	$	10,534		$	10,776		$	12,273		$	11,925		$	11,224
Reported operating margin	21.2		%	21.5		%	21.2		%	22.0		%	21.7		%
Adjusted operating margin	22.2		%	23.1		%	22.4		%	22.3		%	22.3		%
Adjusted Interest Expense - Net
Reported interest expense	190			161			213			178			141
Less: Bond redemption	(16		)	—			(36		)	(18		)	—
Adjusted interest expense - net	$	174		$	161		$	177		$	160		$	141
Adjusted Income Taxes and Effective Tax Rate
Reported income taxes	$	551		$	612		$	691		$	649		$	586
Add: Bond redemption	6			—			14			6			—
Add: Income tax benefits	—			—			—			40			55
Add: Pension settlement charge	1			2			2			3			3
Add: Cost reduction program	28			39			—			—			16
Total adjustments	35			41			16			49			74
Adjusted income taxes	$	586		$	653		$	707		$	698		$	660
Reported income before income taxes and equity investments	$	2,048		$	2,160		$	2,395		$	2,447		$	2,296
Add: Bond redemption	16			—			36			18			—
Add: Pension settlement charge	4			7			7			9			9
Add: Venezuela currency devaluation	—			—			131			23			—
Add: Cost reduction program	96			165			—			—			56
Total adjustments	116			172			174			50			65
Adjusted income before income taxes and equity investments	$	2,164		$	2,332		$	2,569		$	2,497		$	2,361
Reported effective tax rate	26.9		%	28.3		%	28.9		%	26.5		%	25.5		%
Adjusted effective tax rate	27.1		%	28.0		%	27.5		%	28.0		%	28.0		%
Adjusted Noncontrolling Interests
Reported noncontrolling interests	$	38		$	44		$	52		$	81		$	52
Less: Income tax benefits	—			—			—			(16		)	—
Add: Cost reduction program	5			1			—			—			2
Total adjustments	5			1			—			(16		)	2
Adjusted noncontrolling interests	$	43		$	45		$	52		$	65		$	54

48

(Dollar amounts in millions, except per share data)	2016			2015			2014			2013			2012
Year Ended December 31,
Adjusted Net Income – Praxair, Inc.
Reported net income – Praxair, Inc.	$	1,500		$	1,547		$	1,694		$	1,755		$	1,692
Add: Bond redemption	10			—			22			12			—
Less: Income tax benefits	—			—			—			(24		)	(55		)
Add: Pension settlement charge	3			5			5			6			6
Add: Venezuela currency devaluation	—			—			131			23			—
Add: Cost reduction program	63			125			—			—			38
Total adjustments	76			130			158			17			(11		)
Adjusted net income – Praxair, Inc.	$	1,576		$	1,677		$	1,852		$	1,772		$	1,681
Reported percent change	(3		)%	(9		)%	(3		)%	4		%	1		%
Adjusted percent change	(6		)%	(9		)%	5		%	5		%	1		%

(Dollar amounts in millions, except per share data)	2016			2015			2014			2013			2012
Year Ended December 31,
Adjusted Diluted Earnings Per Share
Reported diluted earnings per share	$	5.21		$	5.35		$	5.73		$	5.87		$	5.61
Add: Bond redemption	0.04			—			0.07			0.04			—
Less: Income tax benefits	—			—			—			(0.08		)	(0.18		)
Add: Pension settlement charge	0.01			0.02			0.02			0.02			0.02
Add: Venezuela currency devaluation	—			—			0.45			0.08			—
Add: Cost reduction program	0.22			0.43			—			—			0.12
Total adjustments	0.27			0.45			0.54			0.06			(0.04		)
Adjusted diluted earnings per share	$	5.48		$	5.80		$	6.27		$	5.93		$	5.57
Reported percent change	(3		)%	(7		)%	(2		)%	5		%	3		%
Adjusted percent change	(6		)%	(7		)%	6		%	6		%	3		%
2017 Diluted Earnings Per Share Guidance
	Low End			High End
2017 diluted EPS guidance	$5.45			$5.80
2016 adjusted diluted EPS (see above)	$5.48			$5.48
Adjusted percentage change	(1		)%	6		%

49

FORWARD-LOOKING STATEMENTS

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 expected timing and likelihood of the entry into or the completion of the contemplated business combination with Linde AG, including the timing, receipt and terms and conditions of any required governmental and regulatory approvals that could reduce anticipated benefits or cause the parties not to enter into, or to abandon the transaction; the occurrence of any event, change or other circumstances that could give rise to the termination of the proposed business combination agreement; the ability to successfully complete the proposed business combination and the exchange offer, including satisfying closing conditions; the success of the business following the proposed business combination; the ability to successfully integrate the Praxair and Linde businesses; the possibility that Praxair stockholders may not approve the proposed business combination agreement or that the requisite number of Linde shares may not be tendered in the public offer; the risk that the combined company may be unable to achieve expected synergies or that it may take longer or be more costly than expected to achieve those synergies; 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; the impact of potential unusual or non-recurring items; 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 GAAP or adjusted projections or estimates contained in the forward-looking statements. 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 this report which should be reviewed carefully. Please consider the company’s forward-looking statements in light of those risks.

50

ITEM 7A.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Praxair is exposed to market risks relating to fluctuations in interest rates and currency exchange rates. The objective of financial risk management at Praxair is to minimize the negative impact of interest rate and foreign exchange rate fluctuations on the company’s earnings, cash flows and equity.

To manage these risks, Praxair uses various derivative financial instruments, including interest-rate swaps, treasury rate locks, currency swaps, forward contracts, currency options and commodity contracts. Praxair only uses commonly traded and non-leveraged instruments. These contracts are entered into primarily with major banking institutions thereby minimizing the risk of credit loss. Also, see Notes 1 and 12 to the consolidated financial statements for a more complete description of Praxair’s accounting policies and use of such instruments.

The following discussion presents the sensitivity of the market value, earnings and cash flows of Praxair’s financial instruments to hypothetical changes in interest and exchange rates assuming these changes occurred at December 31, 2016. The range of changes chosen for these discussions reflects Praxair’s view of changes which are reasonably possible over a one-year period. Market values represent the present values of projected future cash flows based on interest rate and exchange rate assumptions.

Interest Rate and Debt Sensitivity Analysis

At December 31, 2016, Praxair had debt totaling $9,515 million ($9,231 million at December 31, 2015). At December 31, 2016, there was one interest rate swap agreement outstanding with a notional amount of $475 million that converts fixed-rate interest to variable-rate interest on the $475 million 1.25% notes that mature in 2018. When considered appropriate, interest-rate swaps are entered into as hedges of underlying financial instruments to effectively change the characteristics of the interest rate without actually changing the underlying financial instrument.

For fixed-rate instruments, interest-rate changes affect the fair market value but do not impact earnings or cash flows. Conversely, for floating-rate instruments, interest-rate changes generally do not affect the fair market value but impact future earnings and cash flows, assuming other factors are held constant.

At December 31, 2016, Praxair had fixed-rate debt of $8,407 million and floating-rate debt of $1,108 million, representing 88% and 12%, respectively, of total debt. At December 31, 2015, Praxair had fixed-rate debt of $8,300 million and floating-rate debt of $931 million, representing 90% and 10%, respectively, of total debt. Holding other variables constant (such as foreign exchange rates, swaps and debt levels), a one-percentage-point decrease in interest rates would increase the unrealized fair market value of the fixed-rate debt by approximately $503 million ($506 million in 2015). At December 31, 2016 and 2015, the after-tax earnings and cash flows impact for the subsequent year resulting from a one-percentage-point increase in interest rates would be approximately $7 million and $6 million, respectively, holding other variables constant.

Exchange Rate Sensitivity Analysis

Praxair’s exchange-rate exposures result primarily from its investments and ongoing operations in South America (primarily Brazil, Argentina and Colombia), Europe (primarily Germany, Italy, Russia, Scandinavia, Spain and the United Kingdom), Canada, Mexico, Asia (primarily China, India, Korea and Thailand) and other business transactions such as the procurement of equipment from foreign sources. From time to time, Praxair utilizes foreign exchange forward contracts to hedge these exposures. At December 31, 2016, Praxair had $2,104 million notional amount ($2,548 million at December 31, 2015) of foreign exchange contracts all of which were to hedge recorded balance sheet exposures. See Note 12 to the consolidated financial statements.

Holding other variables constant, if there were a 10% adverse change in foreign-currency exchange rates for the portfolio, the fair market value of foreign-currency contracts outstanding at December 31, 2016 and 2015 would decrease by approximately $121 million and $123 million, respectively, which would be largely offset by an offsetting gain or loss on the foreign-currency fluctuation of the underlying exposure being hedged.

51

ITEM 8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Management’s Statement of Responsibility for Financial Statements	53
Management’s Report on Internal Control Over Financial Reporting	53
Report of Independent Registered Public Accounting Firm	54
Audited Consolidated Financial Statements
Consolidated Statements of Income for the Years Ended December 31, 2016, 2015 and 2014	55
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2016, 2015 and 2014	56
Consolidated Balance Sheets as of December 31, 2016 and 2015	57
Consolidated Statements of Cash Flows for the Years Ended December 31, 2016, 2015 and 2014	58
Consolidated Statements of Equity for the Years Ended December 31, 2016, 2015 and 2014	59
Notes to Consolidated Financial Statements
Note 1.  Summary of Significant Accounting Policies	61
Note 2.  Cost Reduction Program and Other Charges	65
Note 3.  Acquisitions	68
Note 4.  Leases	68
Note 5.  Income Taxes	69
Note 6.  Earnings Per Share – Praxair, Inc. Shareholders	72
Note 7.  Supplemental Information	73
Note 8.  Property, Plant and Equipment – Net	76
Note 9.  Goodwill	77
Note 10.  Other Intangible Assets	78
Note 11.  Debt	80
Note 12.  Financial Instruments	82
Note 13.  Fair Value Disclosures	85
Note 14.  Equity and Noncontrolling Interests	86
Note 15.  Share-Based Compensation	87
Note 16.  Retirement Programs	89
Note 17.  Commitments and Contingencies	97
Note 18.  Segment Information	99
Note 19.  Quarterly Data (Unaudited)	101

52

MANAGEMENT’S STATEMENT OF RESPONSIBILITY FOR FINANCIAL STATEMENTS

Praxair’s consolidated financial statements are prepared by management, which is responsible for their fairness, integrity and objectivity. The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America applied on a consistent basis, except for accounting changes as disclosed, and include amounts that are estimates and judgments. All historical financial information in this annual report is consistent with the accompanying financial statements.

Praxair maintains accounting systems, including internal accounting controls, monitored by a staff of internal auditors, that are designed to provide reasonable assurance of the reliability of financial records and the protection of assets. The concept of reasonable assurance is based on recognition that the cost of a system should not exceed the related benefits. The effectiveness of those systems depends primarily upon the careful selection of financial and other managers, clear delegation of authority and assignment of accountability, inculcation of high business ethics and conflict-of-interest standards, policies and procedures for coordinating the management of corporate resources, and the leadership and commitment of top management. In compliance with Section 404 of the Sarbanes-Oxley Act of 2002, Praxair assessed its internal control over financial reporting and issued a report (see below).

PricewaterhouseCoopers LLP, an independent registered public accounting firm, has completed an integrated audit of Praxair’s 2016, 2015 and 2014 consolidated financial statements and of its internal control over financial reporting as of December 31, 2016 in accordance with the standards of the Public Company Accounting Oversight Board (United States) as stated in their report.

The Audit Committee of the Board of Directors, which consists solely of non-employee directors, is responsible for overseeing the functioning of the accounting system and related controls and the preparation of annual financial statements. The Audit Committee periodically meets with management, internal auditors and the independent accountants to review and evaluate their accounting, auditing and financial reporting activities and responsibilities, including management’s assessment of internal control over financial reporting. The independent registered public accounting firm and internal auditors have full and free access to the Audit Committee and meet with the committee, with and without management present.

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Praxair’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of management, including the company’s principal executive officer and principal financial officer, the company conducted an evaluation of the effectiveness of its internal control over financial reporting based on the framework in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (often referred to as COSO). Based on this evaluation, management concluded that the company’s internal control over financial reporting was effective as of December 31, 2016.

Praxair’s evaluation of internal control over financial reporting as of December 31, 2016 did not include the internal control over financial reporting related to Yara International ASA's European carbon dioxide business because they were acquired by Praxair in a purchase business combination consummated during 2016. Total assets and sales for this acquisition represent approximately 1.1% and 0.6%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2016 (See Note 3).

PricewaterhouseCoopers LLP, an independent registered public accounting firm, has issued their opinion on the company’s internal control over financial reporting as of December 31, 2016 as stated in their report.

/s/    STEPHEN F. ANGEL	/s/    KELCEY E. HOYT
Stephen F. Angel Chairman, President and Chief Executive Officer	Kelcey E. Hoyt Vice President and Controller
/s/    MATTHEW J. WHITE
Matthew J. White Senior Vice President and Chief Financial Officer	Danbury, Connecticut March 1, 2017

53

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To The Board of Directors and Shareholders of Praxair, Inc.:

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of income, comprehensive income, equity and cash flows present fairly, in all material respects, the financial position of Praxair, Inc. and its subsidiaries at December 31, 2016 and 2015, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2016 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2016, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company's management is responsible for these financial statements, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express opinions on these financial statements and on the Company's internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As described in Management’s Report on Internal Control Over Financial Reporting, management has excluded Yara International ASA's European carbon dioxide business from its assessment of internal control over financial reporting as of December 31, 2016 because this business was acquired by the Company in a purchase business combination during 2016. We have also excluded Yara International ASA's European carbon dioxide business from our audit of internal control over financial reporting. Total assets and sales for this acquisition represent approximately 1.1% and 0.6%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2016.

/s/ PricewaterhouseCoopers LLP

Stamford, Connecticut

March 1, 2017

54

CONSOLIDATED STATEMENTS OF INCOME

PRAXAIR, INC. AND SUBSIDIARIES

(Dollar amounts in millions, except per share data)

Year Ended December 31,	2016			2015			2014
Sales	$	10,534		$	10,776		$	12,273
Cost of sales, exclusive of depreciation and amortization	5,860			5,960			6,962
Selling, general and administrative	1,145			1,152			1,308
Depreciation and amortization	1,122			1,106			1,170
Research and development	92			93			96
Cost reduction program and other charges	100			172			138
Other income (expenses) – net	23			28			9
Operating Profit	2,238			2,321			2,608
Interest expense – net	190			161			213
Income Before Income Taxes and Equity Investments	2,048			2,160			2,395
Income taxes	551			612			691
Income Before Equity Investments	1,497			1,548			1,704
Income from equity investments	41			43			42
Net Income (Including Noncontrolling Interests)	1,538			1,591			1,746
Less: noncontrolling interests	(38		)	(44		)	(52		)
Net Income – Praxair, Inc.	$	1,500		$	1,547		$	1,694
Per Share Data – Praxair, Inc. Shareholders
Basic earnings per share	$	5.25		$	5.39		$	5.79
Diluted earnings per share	$	5.21		$	5.35		$	5.73
Weighted Average Shares Outstanding (000’s):
Basic shares outstanding	285,677			287,005			292,494
Diluted shares outstanding	287,757			289,055			295,608

The accompanying Notes on pages 61 to 102 are an integral part of these financial statements.

55

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

PRAXAIR, INC. AND SUBSIDIARIES

(Dollar amounts in millions)

Year Ended December 31,	2016			2015			2014
NET INCOME (INCLUDING NONCONTROLLING INTERESTS)	$	1,538		$	1,591		$	1,746
OTHER COMPREHENSIVE INCOME (LOSS)
Translation adjustments:
Foreign currency translation adjustments	116			(1,517		)	(1,087		)
Reclassifications to net income	—			—			(5		)
Income taxes	(48		)	3			(4		)
Translation adjustments	68			(1,514		)	(1,096		)
Funded status - retirement obligations (Note 16):
Retirement program remeasurements	(163		)	(11		)	(318		)
Reclassifications to net income	60			84			59
Income taxes	27			(17		)	95
Funded status - retirement obligations	(76		)	56			(164		)
Derivative instruments (Note 12):
Current year unrealized gain (loss)	1			1			4
Reclassifications to net income	(1		)	(1		)	—
Income taxes	—			—			(1		)
Derivative instruments	—			—			3
TOTAL OTHER COMPREHENSIVE LOSS	(8		)	(1,458		)	(1,257		)
COMPREHENSIVE INCOME (INCLUDING NONCONTROLLING INTERESTS)	1,530			133			489
Less: noncontrolling interests	(34		)	3			1
COMPREHENSIVE INCOME - PRAXAIR, INC.	$	1,496		$	136		$	490

The accompanying Notes on pages 61 to 102 are an integral part of these financial statements.

56

CONSOLIDATED BALANCE SHEETS

PRAXAIR, INC. AND SUBSIDIARIES

(Dollar amounts in millions)

December 31,	2016			2015
Assets
Cash and cash equivalents	$	524		$	147
Accounts receivable – net	1,641			1,601
Inventories	550			531
Prepaid and other current assets	165			347
Total Current Assets	2,880			2,626
Property, plant and equipment – net	11,477			10,998
Equity investments	717			665
Goodwill	3,117			2,986
Other intangible assets – net	583			568
Other long-term assets	558			476
Total Assets	$	19,332		$	18,319
Liabilities and Equity
Accounts payable	$	906		$	791
Short-term debt	434			250
Current portion of long-term debt	164			6
Accrued taxes	133			144
Other current liabilities	841			702
Total Current Liabilities	2,478			1,893
Long-term debt	8,917			8,975
Other long-term liabilities	1,213			1,155
Deferred credits	1,272			1,390
Total Liabilities	13,880			13,413
Commitments and contingencies (Note 17)
Redeemable noncontrolling interests	11			113
Praxair, Inc. Shareholders’ Equity:
Common stock $0.01 par value, authorized – 800,000,000 shares, issued 2016 and 2015 – 383,230,625 shares	4			4
Additional paid-in capital	4,074			4,005
Retained earnings	12,879			12,229
Accumulated other comprehensive income (loss)	(4,600		)	(4,596		)
Less: Treasury stock, at cost (2016 – 98,329,849 shares and 2015 – 98,351,546 shares)	(7,336		)	(7,253		)
Total Praxair, Inc. Shareholders’ Equity	5,021			4,389
Noncontrolling interests	420			404
Total Equity	5,441			4,793
Total Liabilities and Equity	$	19,332		$	18,319

The accompanying Notes on pages 61 to 102 are an integral part of these financial statements.

57

CONSOLIDATED STATEMENTS OF CASH FLOWS

PRAXAIR, INC. AND SUBSIDIARIES

(Millions of dollars)

Year Ended December 31,	2016			2015			2014
Increase (Decrease) in Cash and Cash Equivalents
Operations
Net income – Praxair, Inc.	$	1,500		$	1,547		$	1,694
Noncontrolling interests	38			44			52
Net income (including noncontrolling interests)	$	1,538		$	1,591		$	1,746
Adjustments to reconcile net income to net cash provided by operating activities:
Cost reduction program and other charges, net of payments	83			121			138
Depreciation and amortization	1,122			1,106			1,170
Deferred income taxes	(13		)	99			55
Share-based compensation	39			30			51
Non-cash charges and other	(43		)	(79		)	(116		)
Working capital
Accounts receivable	(33		)	1			(80		)
Inventory	(13		)	(23		)	(42		)
Prepaid and other current assets	6			(22		)	(20		)
Payables and accruals	92			(40		)	13
Pension contributions	(11		)	(15		)	(18		)
Long-term assets, liabilities and other	6			(74		)	(10		)
Net cash provided by operating activities	2,773			2,695			2,887
Investing
Capital expenditures	(1,465		)	(1,541		)	(1,689		)
Acquisitions, net of cash acquired	(363		)	(82		)	(206		)
Divestitures and asset sales	58			320			92
Net cash used for investing activities	(1,770		)	(1,303		)	(1,803		)
Financing
Short-term debt borrowings (repayments) – net	191			(329		)	(193		)
Long-term debt borrowings	936			1,497			1,546
Long-term debt repayments	(770		)	(1,000		)	(764		)
Issuances of common stock	139			88			103
Purchases of common stock	(228		)	(725		)	(862		)
Cash dividends – Praxair, Inc. shareholders	(856		)	(819		)	(759		)
Excess tax benefit on stock based compensation	—			19			31
Noncontrolling interest transactions and other	(55		)	(41		)	(129		)
Net cash provided (used ) for financing activities	(643		)	(1,310		)	(1,027		)
Effect of exchange rate changes on cash and cash equivalents	17			(61		)	(69		)
Change in cash and cash equivalents	377			21			(12		)
Cash and cash equivalents, beginning-of-period	147			126			138
Cash and cash equivalents, end-of-period	$	524		$	147		$	126
Supplemental Data
Income taxes paid	$	585		$	420		$	606
Interest paid, net of capitalized interest (Note 7)	$	189		$	174		$	210

The accompanying Notes on pages 61 to 102 are an integral part of these financial statements.

58

CONSOLIDATED STATEMENTS OF EQUITY

PRAXAIR, INC. AND SUBSIDIARIES

(Dollar amounts in millions, except per share data, shares in thousands)

	Praxair, Inc. Shareholders’ Equity
	Common Stock			Additional Paid-in Capital			Retained Earnings			Accumulated  Other Comprehensive Income (Loss) (Note 7)			Treasury Stock					Praxair, Inc. Shareholders’ Equity			Noncontrolling Interests			Total Equity
Activity	Shares	Amounts											Shares		Amounts
Balance, December 31, 2013	383,231	$	4	$	3,970		$	10,528		$	(1,981	)	89,097		$	(5,912	)	$	6,609		$	394		$	7,003
Net Income							1,694											1,694			40			1,734
Other comprehensive income (loss)										(1,204		)						(1,204		)	(29		)	(1,233		)
Noncontrolling interests:
Dividends and other capital reductions																					(28		)	(28		)
Purchases of noncontrolling interests				(24		)												(24		)	2			(22		)
Additions (Reductions)																					8			8
Redemption value adjustments (Note 14)							(2		)									(2		)				(2		)
Dividends to Praxair, Inc. common stock ($2.60 per share)							(759		)									(759		)				(759		)
Issuances of common stock:
For the dividend reinvestment and stock purchase plan													(56	)	7			7						7
For employee savings and incentive plans				(36		)							(1,830	)	122			86						86
Purchases of common stock													6,758		(868		)	(868		)				(868		)
Tax benefit from stock options				33														33						33
Share-based compensation				51														51						51
Balance, December 31, 2014	383,231	$	4	$	3,994		$	11,461		$	(3,185	)	93,969		$	(6,651	)	$	5,623		$	387		$	6,010
Net Income							1,547											1,547			34			1,581
Other comprehensive income (loss)										(1,411		)						(1,411		)	(30		)	(1,441		)
Noncontrolling interests:
Dividends and other capital reductions																					(16		)	(16		)
Additions (Reductions)																					29			29
Redemption value adjustments (Note 14)							40											40						40
Dividends to Praxair, Inc. common stock ($2.86 per share)							(819		)									(819		)				(819		)

59

	Praxair, Inc. Shareholders’ Equity
	Common Stock			Additional Paid-in Capital			Retained Earnings			Accumulated  Other Comprehensive Income (Loss) (Note 7)			Treasury Stock					Praxair, Inc. Shareholders’ Equity			Noncontrolling Interests			Total Equity
Activity	Shares	Amounts											Shares		Amounts
Issuances of common stock:
For the dividend reinvestment and stock purchase plan													(64	)	7			7						7
For employee savings and incentive plans				(38		)							(1,562	)	110			72						72
Purchases of common stock													6,009		(719		)	(719		)				(719		)
Tax benefit from stock options				19														19						19
Share-based compensation				30														30						30
Balance, December 31, 2015	383,231	$	4	$	4,005		$	12,229		$	(4,596	)	98,352		$	(7,253	)	$	4,389		$	404		$	4,793
Net Income							1,500											1,500			35			1,535
Other comprehensive loss										(4		)						(4		)	(11		)	(15		)
Noncontrolling interests:
Dividends and other capital reductions																					(28		)	(28		)
Additions (Reductions) - (Note 14)				50														50			20			70
Redemption value adjustments (Note 14)							6											6						6
Dividends to Praxair, Inc. common stock ($3.00 per share)							(856		)									(856		)				(856		)
Issuances of common stock:
For the dividend reinvestment and stock purchase plan													(60	)	7			7						7
For employee savings and incentive plans				(20		)							(2,044	)	143			123						123
Other															5			5						5
Purchases of common stock													2,082		(238		)	(238		)				(238		)
Share-based compensation				39														39						39
Balance, December 31, 2016	383,231	$	4	$	4,074		$	12,879		$	(4,600	)	98,330		$	(7,336	)	$	5,021		$	420		$	5,441

The accompanying Notes on pages 61 to 102 are an integral part of these financial statements

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PRAXAIR, INC. AND SUBSIDIARIES

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Operations– Praxair, Inc. and its subsidiaries ("Praxair" or "the company") comprise one of the largest industrial gases companies worldwide. Praxair produces, sells and distributes atmospheric, process and specialty gases, and high-performance surface coatings to a diverse group of industries including aerospace, chemicals, food and beverage, electronics, energy, healthcare, manufacturing, and metals.

Principles of Consolidation– The consolidated financial statements were prepared in conformity with accounting principles generally accepted in the United States of America (" U.S. GAAP") and include the accounts of all significant subsidiaries where control exists and, in limited situations, variable-interest entities where the company is the primary beneficiary. Intercompany transactions and balances are eliminated in consolidation and any significant related-party transactions have been disclosed.

Equity investments generally consist of 20% to 50% owned operations where the company exercises significant influence, but does not have control. Equity income from equity investments in corporations is reported on an after-tax basis. Pre-tax income from equity investments that are partnerships or limited-liability corporations ("LLC") is included in other income (expenses) – net with related taxes included in Income taxes. Equity investments are reviewed for impairment whenever events or circumstances reflect that an impairment loss may have incurred. Operations less than 20% owned, where the company does not exercise significant influence, are generally carried at cost.

Changes in ownership interest that result either in consolidation or deconsolidation of an investment are recorded at fair value through earnings, including the retained ownership interest, while changes that do not result in either consolidation or deconsolidation of a subsidiary are treated as equity transactions.

Use of Estimates– The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. While actual results could differ, management believes such estimates to be reasonable.

Revenue Recognition– Product sales represent approximately 87% of consolidated sales. Revenue is recognized when a firm sales agreement exists, collectability of a fixed or determinable sales price is reasonably assured, and when title and risks of ownership transfer to the customer for product sales or, in the case of other revenues when obligations are satisfied or services are performed. Sales returns and allowances are not a normal practice in the industry and are not significant.

A small portion of the company’s revenues relate to long-term construction contracts and are generally recognized using the percentage-of-completion method. Under this method, revenues from sales of major equipment, such as large air-separation facilities, are recognized based primarily on cost incurred to date compared with total estimated cost. Changes to total estimated cost and anticipated losses, if any, are recognized in the period determined.

For contracts that contain multiple products and/or services, amounts assigned to each component are based on its objectively determined fair value, such as the sales price for the component when it is sold separately or competitor prices for similar components.

Certain of the company’s facilities that are built to provide product to a specific customer are required to be accounted for as leases. The associated revenue streams are classified as rental revenue and are not significant.

Amounts billed for shipping and handling fees are recorded as sales, generally on FOB destination terms, and costs incurred for shipping and handling are recorded as cost of sales.

Amounts billed for sales and use taxes, value-added taxes, and certain excise and other specific transactional taxes imposed on revenue producing transactions are presented on a net basis and are not included in sales in the consolidated statement of income.

Cash Equivalents– Cash equivalents are considered to be highly liquid securities with original maturities of three months or less.

Inventories– Inventories are stated at the lower of cost or market. Cost is determined using the average-cost method.

Property, Plant and Equipment – Net– Property, plant and equipment are carried at cost, net of accumulated depreciation. The company capitalizes interest as part of the cost of constructing major facilities (see Note 7). Depreciation is calculated on the straight-line method based on the estimated useful lives of the assets, which range from 3 years to 40 years

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(see Note 8). Praxair uses accelerated depreciation methods for tax purposes where appropriate. Maintenance of property, plant and equipment is generally expensed as incurred.

The company performs a test for impairment whenever events or changes in circumstances indicate that the carrying amount of an individual asset or asset group may not be recoverable. Should projected undiscounted future cash flows be less than the carrying amount of the asset or asset group, an impairment charge reducing the carrying amount to fair value is required. Fair value is determined based on the most appropriate valuation technique, including discounted cash flows.

Asset-Retirement Obligations – An asset-retirement obligation is recognized in the period in which sufficient information exists to determine the fair value of the liability with a corresponding increase to the carrying amount of the related property, plant and equipment which is then depreciated over its useful life. The liability is initially measured at discounted fair value and then accretion expense is recorded in each subsequent period. The company’s asset-retirement obligations are primarily associated with its on-site long-term supply arrangements where the company has built a facility on land leased from the customer and is obligated to remove the facility at the end of the contract term. The company’s asset-retirement obligations are not material to its consolidated financial statements.

Foreign Currency Translation– For most foreign operations, the local currency is the functional currency and translation gains and losses are reported as part of the accumulated other comprehensive income (loss) component of equity as a cumulative translation adjustment (see Note 7).

Financial Instruments– Praxair enters into various derivative financial instruments to manage its exposure to fluctuating interest and currency exchange rates and energy costs. Such instruments primarily include interest-rate swap and treasury rate lock agreements; currency-swap agreements; forward contracts; currency options; and commodity-swap agreements. These instruments are not entered into for trading purposes. Praxair only uses commonly traded and non-leveraged instruments.

There are three types of derivatives the company enters into: (i) those relating to fair-value exposures, (ii) those relating to cash-flow exposures, and (iii) those relating to foreign currency net investment exposures. Fair-value exposures relate to recognized assets or liabilities, and firm commitments; cash-flow exposures relate to the variability of future cash flows associated with recognized assets or liabilities, or forecasted transactions; and net investment exposures relate to the impact of foreign currency exchange rate changes on the carrying value of net assets denominated in foreign currencies.

When a derivative is executed and hedge accounting is appropriate, it is designated as either a fair-value hedge, cash-flow hedge, or a net investment hedge. Currently, Praxair designates all interest-rate and treasury rate locks as hedges for accounting purposes; however, currency contracts are generally not designated as hedges for accounting purposes unless they are related to forecasted transactions. Whether designated as hedges for accounting purposes or not, all derivatives are linked to an appropriate underlying exposure. On an ongoing basis, the company assesses the hedge effectiveness of all derivatives designated as hedges for accounting purposes to determine if they continue to be highly effective in offsetting changes in fair values or cash flows of the underlying hedged items. If it is determined that the hedge is not highly effective, then hedge accounting will be discontinued prospectively.

Changes in the fair value of derivatives designated as fair-value hedges are recognized in earnings as an offset to the change in the fair values of the underlying exposures being hedged. The changes in fair value of derivatives that are designated as cash-flow hedges are deferred in accumulated other comprehensive income (loss) and are reclassified to earnings as the underlying hedged transaction affects earnings. Any ineffectiveness is recognized in earnings immediately. Hedges of net investments in foreign subsidiaries are recognized in the cumulative translation adjustment component of accumulated other comprehensive income (loss) on the consolidated balance sheets to offset translation gains and losses associated with the hedged net investment. Derivatives that are entered into for risk-management purposes and are not designated as hedges (primarily related to anticipated net income and currency derivatives other than for firm commitments) are recorded at their fair market values and recognized in current earnings.

See Note 12 for additional information relating to financial instruments.

Goodwill– Acquisitions are accounted for using the acquisition method which requires allocation of the purchase price to assets acquired and liabilities assumed based on estimated fair values. Any excess of the purchase price over the fair value of the assets and liabilities acquired is recorded as goodwill. Allocations of the purchase price are based on preliminary estimates and assumptions at the date of acquisition and are subject to revision based on final information received, including appraisals and other analyses which support underlying estimates.

The company performs a goodwill impairment test annually in the second quarter or more frequently if events or circumstances indicate that an impairment loss may have been incurred. The applicable guidance allows an entity to first assess qualitative factors to determine if it is more likely than not that the fair value of a reporting unit is less than carrying value. If it is determined that it is more likely than not that the fair value of a reporting unit is less than carrying value then the company will estimate and compare the fair value of its reporting units to their carrying value, including goodwill.

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Reporting units are determined based on one level below the operating segment level. As applicable, fair value is determined through the use of projected future cash flows, multiples of earnings and sales and other factors. Such analysis requires the use of certain market assumptions and discount factors, which are subjective in nature.

See Note 9 for additional information relating to goodwill.

Other Intangible Assets– Customer and license/use agreements, non-compete agreements and patents and other intangibles are amortized over the estimated period of benefit. The determination of the estimated period of benefit will be dependent upon the use and underlying characteristics of the intangible asset. Praxair evaluates the recoverability of its intangible assets subject to amortization when facts and circumstances indicate that the carrying value of the asset may not be recoverable. If the carrying value is not recoverable, impairment is measured as the amount by which the carrying value exceeds its estimated fair value. Fair value is generally estimated based on either appraised value or other valuation techniques.

See Note 10 for additional information relating to other intangible assets.

Income Taxes– Deferred income taxes are recorded for the temporary differences between the financial statement and tax bases of assets and liabilities using currently enacted tax rates. Valuation allowances are established against deferred tax assets whenever circumstances indicate that it is more likely than not that such assets will not be realized in future periods.

Under the guidance for accounting for uncertainty in income taxes, the company can recognize the benefit of an income tax position only if it is more likely than not (greater than 50%) that the tax position will be sustained upon tax examination, based solely on the technical merits of the tax position. Otherwise, no benefit can be recognized. The tax benefits recognized are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Additionally, the company accrues interest and related penalties, if applicable, on all tax exposures for which reserves have been established consistent with jurisdictional tax laws. Interest and penalties are classified as income tax expense in the financial statements.

See Note 5 for additional information relating to income taxes.

Retirement Benefits – Most Praxair employees participate in a form of defined benefit or contribution retirement plan, and additionally certain employees are eligible to participate in various post-employment health care and life insurance benefit plans. The cost of contribution plans is recognized in the year earned while the cost of other plans is recognized over the employees’ expected service period to the company, all in accordance with the applicable accounting standards. The funded status of the plans is recorded as an asset or liability in the consolidated balance sheets. Funding of retirement benefits varies and is in accordance with local laws and practices.

See Note 16 for additional information relating to retirement programs.

Share-based Compensation– The company has granted share-based awards which consist of stock options, restricted stock and performance-based stock. Share-based compensation expense is generally recognized on a straight-line basis over the stated vesting period. For stock awards granted to full-retirement-eligible employees, compensation expense is recognized over the period from the grant date to the date retirement eligibility is achieved. For performance-based awards, compensation expense is recognized only if it is probable that the performance condition will be achieved.

See Note 15 for additional disclosures relating to share-based compensation.

Recently Issued Accounting Standards

Accounting Standards Implemented in 2016

The following standards were effective for Praxair in 2016 and their adoption did not have a significant impact on the consolidated financial statements:

• Accounting for Share-based Compensation - In June 2014, the FASB issued updated guidance on the accounting for share-based payments when the terms of an award provide that a performance target could be achieved after the requisite service period. The adoption of this guidance did not have a significant impact on the condensed consolidated financial statements.

• Improvements to Employee Share-Based Payment Accounting - In March 2016, the FASB issued updated guidance on the accounting for employee share-based payments. The new guidance, among other changes, requires that all excess tax benefits and deficiencies associated with share-based payment awards be recorded in Income taxes in the statement of income in the period in which they occur, and within operating cash flows. Previously, such excess tax benefits were recorded as direct credits to equity (not via the statement of income), and as financing cash flows.

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Effective in the second quarter 2016, Praxair elected to adopt the requirements of this new accounting standard. Accordingly, income tax expense and operating cash flows for 2016 include $20 million of excess tax benefits. The Company elected not to adjust prior-year cash flow presentations.

The new standard also amends the consolidated statement of cash flows by requiring that cash paid to taxing authorities at settlement arising from the withholding of shares from employees be classified in cash flows from financing activities (such amounts were previously included in cash flows from operating activities). This portion of the standard was required to be adopted on a retrospective basis. In addition, $13 million and $19 million were similarly reclassified for the years ended December 31, 2015 and 2014, respectively.

• Balance Sheet Classification of Deferred Taxes - In November 2015, the FASB issued updated guidance on the balance sheet classification of deferred taxes. Prior to the adoption of this guidance, deferred income tax liabilities and assets were required to be separated and classified as current or non-current in a classified balance sheet. The amendments in this update require that deferred tax liabilities and assets be classified as non-current in a classified balance sheet. Praxair has elected to early adopt this guidance beginning in the fourth quarter 2016 on a prospective basis, prior periods were not retrospectively adjusted (see Note 7).

• Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent) - In May 2015, the FASB issued updated guidance removing the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. The adoption of this guidance resulted in the removal of certain pensions assets from within the fair value hierarchy (see Note 16).

Accounting Standards to be Implemented

• Revenue Recognition – In May 2014, the FASB issued updated guidance on the reporting and disclosure of revenue. The new guidance requires the evaluation of contracts with customers to determine the recognition of revenue when or as the entity satisfies a performance obligation, and requires expanded disclosures. Subsequently, the FASB has issued amendments to certain aspects of the guidance including the effective date. This guidance is required to be effective beginning in the first quarter 2018 (with early adoption beginning in 2017 optional) and includes several transition options.

The Company is currently in the process of evaluating and implementing this new guidance, as required, and at this time expects to use the modified retrospective basis starting in 2018. Praxair will provide additional updates in future filings, when appropriate.

• Simplifying the Measurement of Inventory – In July 2015, the FASB issued updated guidance on the measurement of inventory. The new guidance requires that inventory be measured at the lower of cost or net realizable value. Currently inventory is measured at the lower of cost or market. This new guidance will be effective for Praxair beginning in the first quarter 2017 on a prospective basis, with early adoption optional. Praxair does not expect this requirement to have a material impact.

• Leases – In February 2016, the FASB issued updated guidance on the accounting and financial statement presentation of leases. The new guidance requires lessees to recognize a right-of-use asset and lease liability for all leases, except those that meet certain scope exceptions, and would require expanded quantitative and qualitative disclosures. This guidance will be effective for Praxair beginning in the first quarter 2019, with early adoption optional, and requires companies to transition using a modified retrospective approach. Praxair is in the early stages of reviewing the new guidance and will provide updates on the expected impact to Praxair in future filings, as determined.

• Credit Losses on Financial Instruments –In June 2016, the FASB issued an update on the measurement of credit losses. The guidance introduces a new accounting model for expected credit losses on financial instruments, including trade receivables, based on estimates of current expected credit losses. This guidance will be effective for Praxair beginning in the first quarter 2020, with early adoption permitted beginning in the first quarter 2019 and requires companies to apply the change in accounting on a prospective basis. We are currently evaluating the impact this update will have on our consolidated financial statements.

• Classification of Certain Cash Receipts and Cash Payments – In August 2016, the FASB issued updated guidance on the classification of certain cash receipts and cash payments within the statement of cash flows. The update provides accounting guidance for specific cash flow issues with the objective of reducing diversity in practice. This new guidance will be effective for Praxair beginning in the first quarter 2018 on a retrospective basis, with early adoption optional. Praxair does not expect this requirement to have a material impact.

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• Intra-Entity Asset Transfers – In October 2016, the FASB issued updated guidance for income tax accounting of intra-entity transfers of assets other than inventory. The update requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory in the period when the transfer occurs. This new guidance will be effective for Praxair beginning in the first quarter 2018, with early adoption permitted, and should be applied on a modified retrospective basis. We are currently evaluating the impact this update will have on our consolidated financial statements.

• Simplifying the Test for Goodwill Impairment – In January 2017, the FASB issued updated guidance on the measurement of goodwill. The new guidance eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge. The guidance will be effective for Praxair beginning in the first quarter 2020 with early adoption permitted. Praxair does not expect this guidance to have a material impact.

Reclassifications – Certain prior years’ amounts have been reclassified to conform to the current year’s presentation, including reclassifications to the condensed consolidated statement of cash flows due to the adoption of the new share-based payment accounting standard.

NOTE 2. COST REDUCTION PROGRAM AND OTHER CHARGES

2016 Charges

Cost Reduction Program and Other Charges

In the third quarter of 2016, Praxair recorded pre-tax charges totaling $96 million ($63 million after-tax and noncontrolling interests of $0.22 per diluted share). Following is a summary of the pre-tax charge by reportable segment:

(millions of dollars)	Severance costs		Other Charges		Total
North America	$	14	$	29	$	43
Europe	12		3		15
South America	5		7		12
Asia	6		13		19
Surface Technologies	3		4		7
Total	$	40	$	56	$	96

The severance costs of $40 million are for the elimination of 730 positions. The other charges of $56 million are primarily related to (i) the consolidation of operations for efficiencies and cost reduction primarily in North America and Surface Technologies, (ii) integration costs for recent acquisitions in Europe and North America, and (iii) asset write-downs and other charges related to the impacts of weaker underlying industrial activity, primarily in the Americas and Asia. Amounts related to asset write-downs are net of expected sale proceeds, which are not significant.

The total cash requirement of the cost reduction program and other charges are estimated to be approximately $57 million, of which $13 million was paid through December 31, 2016.

Pension Settlement Charge

In 2015 a number of senior managers retired. These retirees are covered by the U.S. supplemental pension plan which provides for a lump sum benefit payment option. Under certain circumstances, such lump sum payments must be accounted for as a settlement of the related pension obligation, but only when paid. Accordingly, in the third quarter of 2016, Praxair recorded a pension settlement charge related to net unrecognized actuarial losses of $4 million ($3 million after-tax or $0.01 per diluted share).

2015 Charges

Cost Reduction Program and other Charges

In the second quarter of 2015, Praxair recorded pre-tax charges totaling $146 million ($112 million after-tax and noncontrolling interests or $0.39 per diluted share) and in the third quarter recorded pre-tax charges totaling $19 million ($13 million after-tax or $0.04 per diluted share). The charges related primarily to severance and other costs associated

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with a cost reduction program, which was initiated in response to lower volumes resulting from economic slowdown in emerging markets and energy related end-markets. Following is a summary of the pre-tax charges by reportable segment:

(millions of dollars)	Severance costs		Other Charges		Total
North America	$	14	$	20	$	34
Europe	11		9		20
South America	18		49		67
Asia	11		14		25
Surface Technologies	9		10		19
Total	$	63	$	102	$	165

The severance costs of $63 million are for the elimination of 1,544 positions. A majority of the actions were completed in 2015.

The other charges of $102 million are primarily related to the consolidation of operations and the exit of other operations due to current economic conditions, primarily in Brazil. Amounts related to asset write-downs are net of expected sale proceeds, which are not significant. Following is a summary:

i. The North America charges of $20 million relate primarily to the decision to consolidate certain manufacturing and distribution locations for efficiencies and cost reduction.

ii. The Europe charges of $9 million are primarily for the restructuring of operations in Russia and energy-related businesses in Northern Europe.

iii. The South America charges of $49 million include costs primarily associated with a decision to exit a non-core business and other operations in South America.

iv. The Asia charges of $14 million include costs primarily related to an asset disposal in China.

v. The Surface Technologies charges of $10 million relate to the realignment of sales and manufacturing operations in Europe and the United States for efficiencies and cost reduction.

Additionally, for the year ended December 31, 2015 income taxes include a $10 million increase in valuation allowances relating to U.S. foreign tax credit carryforwards, reflecting the impact of current economic conditions.

The total cash requirements of the cost reduction program and other charges are estimated to be approximately $94 million.

Pension Settlement Charge

In 2014 a number of senior managers retired. These retirees are covered by the U.S. supplemental pension plan which provides for a lump sum benefit payment option. Under certain circumstances, such lump sum payments must be accounted for as a settlement of the related pension obligation, but only when paid. Accordingly, when the cash payments were made in the third quarter of 2015, Praxair recorded a pension settlement charge related to net unrecognized actuarial losses of $7 million ($5 million after-tax or $0.02 per diluted share).

Reconciliation of the 2016 and 2015 Cost Reduction Programs

The following table summarizes the activities related to the company's cost reduction and other charges for the years ended December 31, 2016 and 2015:

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(millions of dollars)	Severance costs			Other Charges			Total
Q2/Q3 2015 Cost Reduction Program and Other Charges	$	63		$	102		$	165
Less: Cash payments	(31		)	(13		)	(44		)
Less: Non-cash asset write-offs	—			(68		)	(68		)
Foreign currency translation and other	(2		)	(1		)	(3		)
Balance, December 31, 2015	$	30		$	20		$	50
2016 Cost Reduction Program and Other Charges	40			56			96
Less: Cash payments	(33		)	(9		)	(42		)
Less: Non-cash asset write-offs	—			(39		)	(39		)
Foreign currency translation and other	1			(1		)	—
Balance, December 31, 2016	$	38		$	27		$	65

2014 Charges

Venezuela Currency Devaluation

In recent years, exchange control and other regulations in Venezuela have restricted the Company's operations in Venezuela. During 2014, the Venezuelan government introduced a new exchange control market-based mechanism (referred to as "SICAD II") which allowed companies to apply for the conversion of VEF to the U.S. dollar. At December 31, 2014 the SICAD II rate was 50 VEF per U.S. Dollar versus the official rate of 6.3 (a devaluation of about 88%). After considerable analysis, Praxair concluded at that time that the SICAD II rate more accurately reflects the economic reality of its business in Venezuela versus the official exchange rate. There continues to be a lack of exchangeability between the Venezuelan bolivar fuerte ("VEF") and the U.S. dollar.

As a result, effective December 31, 2014 Praxair changed the exchange rate used to translate the monetary assets and liabilities of its Venezuelan subsidiary to the SICAD II rate of 50 VEF per U.S. Dollar. Also, the Company evaluated the carrying value of its non-monetary assets for impairment and lower of cost or market adjustments considering the new SICAD II rate. As a result, Praxair recorded a pre-tax charge of $131 million ($131 million after-tax, or $0.45 per diluted share) in the Company's consolidated statement of income for the year ended December 31, 2014. This charge includes $68 million related to translation of monetary assets and liabilities to the SICAD II rate and $63 million related primarily to long-lived asset impairments. As a result, Praxair's net asset position in Venezuela at December 31, 2014 was immaterial.

Pension Settlement Charge

During the fourth quarter of 2014, Praxair offered certain former employees who participate in either of the two U.S. qualified defined benefit pension plans, the option to receive a one-time lump sum benefit payment of their vested pension benefits under the plans rather than receiving lifetime annuity payments of these benefits. As a result, a pension settlement of the related pension obligation was triggered for one of the U.S. qualified defined benefit pension plans due to the acceptance rate of the lump sum payment option. Accordingly, Praxair recorded a pension settlement charge of $7 million ($5 million after-tax, or $0.02 per diluted share) in the fourth quarter of 2014 (refer to Note 16).

Classification in the consolidated financial statements

The pre-tax charges for each year are shown within operating profit in a separate line item on the consolidated statements of income. In the consolidated balance sheets, reductions in assets are recorded against the carrying value of the related assets and unpaid amounts are recorded primarily as short-term liabilities. On the consolidated statement of cash flows, the pre-tax impact of these charges, net of cash payments, is shown as an adjustment to reconcile net income to net cash provided by operating activities. In Note 18 - Segment Information, Praxair excluded these charges from its management definition of segment operating profit; a reconciliation of segment operating profit to consolidated operating profit is shown within the segment operating profit table.

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NOTE 3. ACQUISITIONS

The results of operations of these businesses have been included in Praxair’s consolidated statements of income since their respective dates of acquisition. Proforma financial statements for the following acquisitions have not been provided as the acquisitions are not material individually or in the aggregate.

2016 Acquisitions

During the year ended December 31, 2016, Praxair had acquisitions totaling $363 million, primarily the acquisition of Yara International ASA's European carbon dioxide business ("European CO2 business") and packaged gases businesses in North America and Europe. These transactions resulted in goodwill and other intangible assets of $141 million and $82 million, respectively (see Notes 9 and 10). In addition, Praxair purchased a remaining 34% share in a Scandinavian joint venture for $104 million (see Note 14).

European CO2 Acquisition

On June 1, 2016 Praxair, Inc. completed an acquisition of a European CO2 business, which is a leading supplier of liquid CO2 and dry ice primarily to the European food and beverage industries. The business operates CO2 liquefaction plants and dry ice production facilities across the UK, Ireland, Norway, Denmark, Germany, Netherlands, Belgium, France and Italy. This acquisition was accounted for as a business combination; accordingly, the results of operations were consolidated from June 1, 2016 in the European business segment.

The purchase price for the acquisition was approximately $230 million (€206 million) and resulted in $121 million of intangible assets. The intangible assets primarily consist of $69 million of goodwill and $51 million of customer relationships that will be amortized over their estimated life of 20 years. The allocation of the purchase price is final except for pension liabilities. Any potential adjustments are not expected to be material.

2015 Acquisitions

During the year-ended December 31, 2015 Praxair had acquisitions totaling $82 million, primarily acquisitions of packaged gases businesses in North and South America and an acquisition of a controlling interest of an equity investment in Asia. These transactions resulted in goodwill and other intangible assets of $56 million and $26 million, respectively (see Note 9 and Note 10).

2014 Acquisitions

During the year-ended December 31, 2014 Praxair had acquisitions totaling $206 million. These acquisitions consisted primarily of an industrial gases business in Italy, packaged gas businesses in North and South America and an acquisition of a controlling interest of an equity investment in Asia. These transactions resulted in goodwill and other intangible assets of $86 million and $66 million, respectively (see Note 9 and Note 10).

NOTE 4. LEASES

In the normal course of its business, Praxair enters into various leases as the lessee, primarily involving manufacturing and distribution equipment and office space. Total lease and rental expenses under operating leases were $141 million in 2016, $141 million in 2015 and $148 million in 2014. Capital leases are not significant and are included in property, plant and equipment – net. Related obligations are included in debt.

At December 31, 2016, minimum payments due under operating leases are as follows:

(Millions of dollars)
2017	$	117
2018	97
2019	79
2020	65
2021	54
Thereafter	117
	$	529

The present value of these future lease payments under operating leases is approximately $490 million.

Praxair’s leases where it is the lessor are not material.

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NOTE 5. INCOME TAXES

Pre-tax income applicable to U.S. and foreign operations is as follows:

(Millions of dollars) Year Ended December 31,	2016		2015		2014
United States	$	954	$	980	$	1,004
Foreign	1,094		1,180		1,391
Total income before income taxes	$	2,048	$	2,160	$	2,395

The following is an analysis of the provision for income taxes:

(Millions of dollars) Year Ended December 31,	2016			2015		2014
Current tax expense
U.S. federal	$	266		$	205	$	291
State and local	32			33		35
Foreign	266			275		310
	564			513		636
Deferred tax expense
U.S. federal	3			71		14
State and local	7			10		12
Foreign	(23		)	18		29
	(13		)	99		55
Total income taxes	$	551		$	612	$	691

An analysis of the difference between the provision for income taxes and the amount computed by applying the U.S. statutory income tax rate to pre-tax income follows:

(Dollar amounts in millions) Year Ended December 31,	2016					2015					2014
U.S. statutory income tax rate	$	717		35.0	%	$	756		35.0	%	$	838		35.0	%
State and local taxes – net of federal benefit	28			1.4	%	28			1.3	%	31			1.3	%
U.S. tax credits and deductions (a)	(32		)	(1.6	)%	(40		)	(1.9	)%	(37		)	(1.5	)%
Foreign tax differentials (b)	(140		)	(6.8	)%	(121		)	(5.6	)%	(186		)	(7.8	)%
Venezuela currency devaluation (c)	—			—	%	—			—	%	46			1.9	%
Share Based Compensation (d)	(20		)	(1.0	)%	—			—	%	—			—	%
Other – net	(2		)	(0.1	)%	(11		)	(0.5	)%	(1		)	—	%
Provision for income taxes	$	551		26.9	%	$	612		28.3	%	$	691		28.9	%

________________________

(a) U.S. tax credits and deductions relate to manufacturing deductions and to the research and experimentation tax credit.

(b) Primarily related to differences between the U.S. tax rate of 35% and the statutory tax rate in the countries where Praxair operates. 2014 includes $56 million of tax benefits related to a reduction of uncertain tax positions as a result of a lapse of statute of limitations. Other permanent items and tax rate changes were not significant.

(c) Impact related to non-deductible Venezuela currency devaluations in 2014 (see Note 2).

(d) See Note 1 related to adoption of the FASB's standard for Improvements to Employee Share-Based Payment Accounting in 2016.

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Net deferred tax liabilities included in the consolidated balance sheet are comprised of the following:

(Millions of dollars) December 31,	2016			2015
Deferred tax liabilities
Fixed assets	$	1,522		$	1,413
Exchange gains	139			110
Goodwill	178			147
Other intangible assets	115			117
Other	62			155
	$	2,016		$	1,942
Deferred tax assets
Carryforwards	$	284		$	287
Benefit plans and related (a)	404			365
Inventory	26			20
Exchange Losses	6			16
Accruals and other (b)	404			351
	$	1,124		$	1,039
Less: Valuation allowances (c)	(132		)	(123		)
	$	992		$	916
Net deferred tax liabilities	$	1,024		$	1,026
Recorded in the consolidated balance sheets as (See Note 7):
Prepaid and other current assets (d)	$	—		$	184
Other long-term assets (d)	185			118
Deferred credits (d)	1,209			1,328
	$	1,024		$	1,026

________________________

(a) Includes deferred taxes of $352 million and $325 million in 2016 and 2015, respectively, related to pension / OPEB funded status (see Notes 7 and 16).

(b) Includes $233 million and $194 million in 2016 and 2015, respectively, related to research and development costsand $45 million and $45 million in 2016 and 2015, respectively, related to goodwill.

(c) Summary of valuation allowances relating to deferred tax assets follows (millions of dollars):

	2016			2015			2014
Balance, January 1,	$	(123	)	$	(106	)	$	(85	)
Income tax (charge) benefit	(13		)	(20		)	(20		)
Translation adjustments	(2		)	4			6
Other, including write-offs	6			(1		)	(7		)
Balance, December 31,	$	(132	)	$	(123	)	$	(106	)

(d) 2016 amounts reflect the adoption of the FASB's standard regarding the Balance Sheet Classification of Deferred Taxes which requires all current deferred income tax assets and liabilities to be classified as non-current on the balance sheet (see Note 1).

Praxair evaluates deferred tax assets quarterly to ensure that estimated future taxable income will be sufficient in character (e.g., capital gain versus ordinary income treatment), amount and timing to result in their recovery. After considering the positive and negative evidence, a valuation allowance is established to reduce the assets to their realizable value when management determines that it is more likely than not (i.e., greater than 50% likelihood) that a deferred tax asset will not be realized. Considerable judgment is required in establishing deferred tax valuation allowances. At December 31, 2016, Praxair had $284 million of deferred tax assets relating to net operating losses (“NOLs”) and tax

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credits and $132 million of valuation allowances. These deferred tax assets include $106 million relating to NOLs of which $45 million are in the United States and $61 million are in Brazil. The U.S. NOLs expire through 2032 and the Brazil NOLs have no expiration. These NOLs have no valuation allowances. The deferred tax assets as of December 31, 2016 also include $62 million relating to U.S. foreign tax credits which expire in 2021 and have a full valuation allowance. The utilization of the U.S. foreign tax credits is dependent on many factors including U.S. interest expense, future U.S. investment, foreign sales and earnings growth, foreign currency exchange rates, and acquisitions and dispositions. Management’s assessment and judgment are highly dependent on these variables and any significant changes to any one of them can substantially impact the amount of foreign tax credit utilization over the ten-year carryforward period.

The remaining deferred tax assets of $116 million relate to U.S. state ($55 million) and other foreign ($61 million) NOLs and credit carryforwards, which expire through 2033, have valuation allowances totaling $70 million. These valuation allowances relate to certain foreign and U.S. state NOLs and are required because management has determined, based on financial projections and available tax strategies, that it is unlikely that the NOLs will be utilized before they expire. If events or circumstances change, valuation allowances are adjusted at that time resulting in an income tax benefit or charge.

A provision has not been made for additional U.S. federal or foreign taxes at December 31, 2016 of approximately $12 billion of undistributed earnings of foreign subsidiaries because Praxair intends to reinvest these funds indefinitely to support foreign growth opportunities. It is not practicable to estimate the unrecognized deferred tax liability on these undistributed earnings. These earnings could become subject to additional tax if they are remitted as dividends, loaned to Praxair in the U.S., or upon sale of the subsidiary’s stock.

Uncertain Tax Positions

Unrecognized income tax benefits represent income tax positions taken on income tax returns but not yet recognized in the consolidated financial statements. The company has unrecognized income tax benefits totaling $56 million, $68 million and $71 million as of December 31, 2016, 2015 and 2014, respectively. If recognized, essentially all of the unrecognized tax benefits and related interest and penalties would be recorded as a benefit to income tax expense on the consolidated statement of income.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

(Millions of dollars)	2016			2015			2014
Unrecognized income tax benefits, January 1	$	68		$	71		$	121
Additions for tax positions of prior years	6			21			13
Reductions for tax positions of prior years	(15		)	(13		)	(2		)
Additions for current year tax positions	—			—			3
Reductions for settlements with taxing authorities (a)	(2		)	(3		)	(3		)
Reductions as a result of a lapse of an applicable statute of limitations (b)	—			—			(56		)
Foreign currency translation and other	(1		)	(8		)	(5		)
Unrecognized income tax benefits, December 31	$	56		$	68		$	71

________________________

(a) Settlements are uncertain tax positions that were effectively settled with the taxing authorities, including positions where the company has agreed to amend its tax returns to eliminate the uncertainty.

(b) See note (b) to the effective tax rate reconciliation.

Praxair classifies interest income and expense related to income taxes as tax expense in the consolidated statement of income. Praxair recognized net interest income of $10 million in 2016, none in 2015 and $3 million in 2014. Praxair had $6 million and $8 million of accrued interest and penalties as of December 31, 2016 and December 31, 2015, respectively which were recorded in other long-term liabilities in the consolidated balance sheets (see Note 7).

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As of December 31, 2016, the company remained subject to examination in the following major tax jurisdictions for the tax years as indicated below:

Major tax jurisdictions	Open Years
North America
United States	2011 through 2016
Canada	2009 through 2016
Mexico	2011 through 2016
Europe
Germany	2011 through 2016
Italy	2012 through 2016
Spain	2004 through 2016
South America
Brazil	2005 through 2016
Asia
China	2011 through 2016
India	2006 through 2016
Korea	2012 through 2016
Thailand	2010 through 2016

The company is currently under audit in a number of tax jurisdictions. As a result, it is reasonably possible that some of these audits will conclude or reach the stage where a change in unrecognized income tax benefits may occur within the next twelve months. At that time, the company will record any adjustment to income tax expense as required. In 2016, settlements were not material to the consolidated financial statements. The company is also subject to income taxes in many hundreds of state and local taxing jurisdictions that are open to tax examinations.

NOTE 6. EARNINGS PER SHARE – PRAXAIR, INC. SHAREHOLDERS

Basic earnings per share is computed by dividing Net income – Praxair, Inc. for the period by the weighted average number of Praxair common shares outstanding. Diluted earnings per share is computed by dividing Net income – Praxair, Inc. for the period by the weighted average number of Praxair common shares outstanding and dilutive common stock equivalents, as follows:

	2016		2015		2014
Numerator (Millions of dollars)
Net income – Praxair, Inc.	$	1,500	$	1,547	$	1,694
Denominator (Thousands of shares)
Weighted average shares outstanding	285,289		286,606		291,987
Shares earned and issuable under compensation plans	388		399		507
Weighted average shares used in basic earnings per share	285,677		287,005		292,494
Effect of dilutive securities
Stock options and awards	2,080		2,050		3,114
Weighted average shares used in diluted earnings per share	287,757		289,055		295,608
Basic Earnings Per Common Share	$	5.25	$	5.39	$	5.79
Diluted Earnings Per Common Share	$	5.21	$	5.35	$	5.73

Stock options of 2,602,770 for the year ended December 31, 2016 and 2,696,785 for the year ended December 31, 2015 were antidilutive and therefore excluded in the computation of diluted earnings per share. There were no antidilutive shares for the year ended December 31, 2014.

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NOTE 7. SUPPLEMENTAL INFORMATION

Income Statement

(Millions of dollars) Year Ended December 31,	2016		2015		2014
Selling, General and Administrative
Selling	$	493	$	507	$	572
General and administrative	652		645		736
	$	1,145	$	1,152	$	1,308

Year Ended December 31,	2016		2015		2014
Depreciation and Amortization
Depreciation	$	1,071	$	1,059	$	1,123
Amortization of other intangibles (Note 10)	51		47		47
	$	1,122	$	1,106	$	1,170

Year Ended December 31,	2016			2015			2014
Other Income (Expenses) – Net
Currency related net gains (losses)	$	1		$	(2	)	$	1
Partnership income	5			4			16
Severance expense	(7		)	(5		)	(22		)
Business divestitures and asset gains (losses) – net	16			34			36
Other – net	8			(3		)	(22		)
	$	23		$	28		$	9

Year Ended December 31,	2016			2015			2014
Interest Expense – Net
Interest incurred on debt	$	208		$	194		$	215
Interest capitalized	(34		)	(33		)	(38		)
Bond redemption (a)	16			—			36
	$	190		$	161		$	213

Year Ended December 31,	2016		2015		2014
Income Attributable to Noncontrolling Interests
Noncontrolling interests' operations	$	35	$	34	$	40
Redeemable noncontrolling interests' operations (Note 14)	3		10		12
	$	38	$	44	$	52

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Balance Sheet

(Millions of dollars) December 31,	2016			2015
Accounts Receivable
Trade	$	1,640		$	1,601
Other	122			101
	1,762			1,702
Less: allowance for doubtful accounts (b)	(121		)	(101		)
	$	1,641		$	1,601

December 31,	2016		2015
Inventories
Raw materials and supplies	$	197	$	202
Work in process	45		48
Finished goods	308		281
	$	550	$	531

December 31,	2016		2015
Prepaid and Other Current Assets
Deferred income taxes (Note 5) (c)	$	—	$	184
Prepaid (d)	108		110
Other	57		53
	$	165	$	347

December 31,	2016		2015
Other Long-term Assets
Pension assets (Note 16)	$	13	$	41
Insurance contracts (e)	74		74
Long-term receivables, net (f)	46		33
Deposits	56		48
Investments carried at cost	14		12
Deferred charges	51		50
Deferred income taxes (Note 5) (c)	185		118
Other	119		100
	$	558	$	476

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December 31,	2016		2015
Other Current Liabilities
Accrued expenses	$	285	$	247
Payroll	141		114
Cost reduction program (Note 2)	59		44
Pension and postretirement (Note 16)	24		29
Interest payable	78		71
Employee benefit accrual	23		22
Insurance reserves	8		8
Other	223		167
	$	841	$	702

December 31,	2016		2015
Other Long-term Liabilities
Pension and postretirement (Note 16)	$	863	$	760
Tax liabilities for uncertain tax positions	44		56
Cost reduction program (Note 2)	6		6
Interest and penalties for uncertain tax positions (Note 5)	6		8
Insurance reserves	25		24
Other	269		301
	$	1,213	$	1,155

December 31,	2016		2015
Deferred Credits
Deferred income taxes (Note 5) (c)	$	1,209	$	1,328
Other	63		62
	$	1,272	$	1,390

December 31,	2016			2015
Accumulated Other Comprehensive Income (Loss)
Cumulative translation adjustment - net of taxes:
North America (g)	$	(1,038	)	$	(899	)
South America (g)	(1,969		)	(2,272		)
Europe (g)	(504		)	(526		)
Asia (g)	(383		)	(285		)
Surface Technologies	(52		)	(36		)
	(3,946		)	(4,018		)
Derivatives – net of taxes	(1		)	(1		)
Pension/OPEB funded status obligation (net of $352 million and $325 million tax benefit in 2016 and 2015, respectively) (Note 16)	(653		)	(577		)
	$	(4,600	)	$	(4,596	)

________________________

(a) In February 2016, Praxair redeemed $325 million of 5.20% notes due March 2017 resulting in a $16 million interest charge ($10 million after-tax, or $0.04 per diluted share). In December 2014, Praxair redeemed $400

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million of 5.375% notes due November 2016 for $434 million resulting in an $36 million charge ($22 million after-tax, or $0.07 per diluted share).

(b) Provisions to the allowance for doubtful accounts were $41 million, $35 million, and $39 million in 2016, 2015, and 2014, respectively. The allowance activity in each period related primarily to write-offs of uncollectible amounts, net of recoveries and currency movements.

(c) 2016 amounts reflect the adoption of the FASB's standard regarding Balance Sheet Classification of Deferred Taxes which requires all current deferred income tax assets and liabilities to be classified as non-current on the balance sheet (see Note 1).

(d) Includes estimated income tax payments of $39 million and $42 million in 2016 and 2015, respectively.

(e) Consists primarily of insurance contracts and other investments to be utilized for non-qualified pension and OPEB obligations.

(f) Long-term receivables are not material and are largely reserved. The balances at December 31, 2016 and 2015 are net of reserves of $50 million and $35 million, respectively. The amounts in both periods relate primarily to government receivables in Brazil and other long-term notes receivable from customers. Collectability is reviewed regularly and uncollectible amounts are written-off as appropriate. The account balance changes during 2016 were primarily due to additional government receivables in Brazil and foreign exchange rate movements.

(g) North America consists of currency translation adjustments in Canada and Mexico. South America relates primarily to Brazil and Argentina. Europe relates primarily to Spain, Italy and Germany. Asia relates primarily to Korea and India.

NOTE 8. PROPERTY, PLANT AND EQUIPMENT – NET

Significant classes of property, plant and equipment are as follows:

(Millions of dollars) December 31,	Depreciable Lives (Yrs)	2016			2015
Production plants (primarily 15-year life) (a)	10-20	$	14,588		$	13,778
Storage tanks	15-20	2,360			2,196
Transportation equipment and other	3-15	2,038			1,925
Cylinders (primarily 30-year life)	10-30	1,722			1,654
Buildings	25-40	1,096			1,085
Land and improvements (b)	0-20	559			517
Construction in progress		1,558			1,539
		23,921			22,694
Less: accumulated depreciation		(12,444		)	(11,696		)
		$	11,477		$	10,998

(a) - Depreciable lives of production plants related to long-term customer supply contracts are consistent with the contract lives.

(b) - Land is not depreciated.

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NOTE 9. GOODWILL

Changes in the carrying amount of goodwill for the years ended December 31, 2016 and 2015 were as follows:

(Millions of dollars)	North America			South America			Europe			Asia			Surface Technologies			Total
Balance, December 31, 2014	$	2,139		$	147		$	654		$	38		$	143		$	3,121
Acquisitions (Note 3)	21			9			—			23			3			56
Purchase adjustments & other *	(12		)	—			—			—			—			(12		)
Foreign currency translation	(37		)	(58		)	(72		)	(2		)	(10		)	(179		)
Balance, December 31, 2015	$	2,111		$	98		$	582		$	59		$	136		$	2,986
Acquisitions (Note 3)	61			9			71			—			—			141
Purchase adjustments & other	6			—			—			—			2			8
Foreign currency translation	(13		)	25			(24		)	(1		)	(5		)	(18		)
Balance, December 31, 2016	$	2,165		$	132		$	629		$	58		$	133		$	3,117

*    Primarily relates to the elimination of goodwill with a divestiture.    

Praxair has performed its goodwill impairment tests annually during the second quarter of each year, and historically has determined that the fair value of each of its reporting units was substantially in excess of its carrying value. For the 2016 test, Praxair applied the FASB's accounting guidance which allows the company to first assess qualitative factors to determine the extent of additional quantitative analysis, if any, that may be required to test goodwill for impairment. Based on the qualitative assessments performed, Praxair concluded that it was more likely than not that the fair value of each reporting unit substantially exceeded its carrying value and therefore, further quantitative analysis was not required. As a result, no impairment was recorded. There were no indicators of impairment through December 31, 2016.

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NOTE 10. OTHER INTANGIBLE ASSETS

The following is a summary of Praxair’s other intangible assets at December 31, 2016 and 2015:

(Millions of dollars) For the year ended December 31, 2016	Customer & License/Use Agreements			Non-compete Agreements			Patents & Other			Total
Cost:
Balance, December 31, 2015	$	698		$	38		$	47		$	783
Additions (primarily acquisitions)	72			4			6			82
Foreign currency translation	(16		)	(1		)	(2		)	(19		)
Other *	(3		)	(7		)	—			(10		)
Balance, December 31, 2016	751			34			51			836
Less: accumulated amortization:
Balance, December 31, 2015	(179		)	(23		)	(13		)	(215		)
Amortization expense	(41		)	(6		)	(4		)	(51		)
Foreign currency translation	6			—			—			6
Other *	—			7			—			7
Balance, December 31, 2016	(214		)	(22		)	(17		)	(253		)
Net balance at December 31, 2016	$	537		$	12		$	34		$	583
(Millions of dollars) For the year ended December 31, 2015	Customer & License/Use Agreements			Non-compete Agreements			Patents & Other			Total
Cost:
Balance, December 31, 2014	$	693		$	37		$	47		$	777
Additions (primarily acquisitions)	23			2			1			26
Foreign currency translation	(21		)	(1		)	(1		)	(23		)
Other *	3			—			—			3
Balance, December 31, 2015	698			38			47			783
Less: accumulated amortization:
Balance, December 31, 2014	(147		)	(18		)	(9		)	(174		)
Amortization expense	(37		)	(6		)	(4		)	(47		)
Foreign currency translation	7			1			—			8
Other *	(2		)	—			—			(2		)
Balance, December 31, 2015	(179		)	(23		)	(13		)	(215		)
Net balance at December 31, 2015	$	519		$	15		$	34		$	568

________________________

* Other primarily relates to the write-off of fully amortized assets, purchase accounting adjustments and reclassifications.

There are no expected residual values related to these intangible assets. Amortization expense for the years ended December 31, 2016, 2015 and 2014 was $51 million, $47 million and $47 million, respectively. The remaining weighted-average amortization period for intangible assets is approximately 17 years.

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Total estimated annual amortization expense is as follows:

(Millions of dollars)
2017	$	45
2018	42
2019	40
2020	38
2021	36
Thereafter	382
	$	583

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NOTE 11. DEBT

The following is a summary of Praxair’s outstanding debt at December 31, 2016 and 2015:

(Millions of dollars)	2016			2015
Short-term
Commercial paper and U.S. bank borrowings	$	333		$	87
Other bank borrowings (primarily international)	101			163
Total short-term debt	434			250
Long-term (a)
U.S. borrowings
0.75% Notes due 2016 (b)	—			400
Floating Rate Notes due 2017	150			150
5.20% Notes due 2017 (b)	—			325
1.05% Notes due 2017 (c)	400			399
1.20% Notes due 2018	499			499
1.25% Notes due 2018 (d)	478			480
4.50% Notes due 2019	598			597
1.90% Notes due 2019	499			499
1.50% Euro denominated notes due 2020	627			646
2.25% Notes due 2020	299			298
4.05% Notes due 2021	497			497
3.00% Notes due 2021	496			496
2.45% Notes due 2022	597			596
2.20% Notes due 2022	498			497
2.70% Notes due 2023	497			497
1.20% Euro denominated notes due 2024 (e)	575			—
2.65% Notes due 2025	397			396
1.625% Euro denominated notes due 2025	519			535
3.20% Notes due 2026 (e)	725			446
3.55% Notes due 2042	662			661
Other	12			3
International bank borrowings	49			57
Obligations under capital lease	7			7
	9,081			8,981
Less: current portion of long-term debt	(164		)	(6		)
Total long-term debt	8,917			8,975
Total debt	$	9,515		$	9,231

________________________

(a) Amounts are net of unamortized discounts, premiums and/or debt issuance cost as applicable.

(b) In February 2016, Praxair repaid $400 million of 0.75% notes that became due. Also in February 2016, Praxair redeemed $325 million of 5.20% notes due March 2017 resulting in a $16 million interest charge ($10 million after-tax, or $0.04 per diluted share).

(c) Classified as long-term because of the Company’s intent to refinance this debt on a long-term basis and the availability of such financing under the terms of an existing $2.5 billion long-term credit facility.

(d) December 31, 2016 and 2015 include a $4 million and $6 million fair value increase, respectively, related to hedge accounting. See Note 12 for additional information.

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(e) In February 2016, Praxair issued €550 million of 1.20% Euro-denominated notes due 2024. In addition, Praxair issued $275 million of 3.20% notes due 2026. The proceeds of these debt issuances were used for general corporate purposes.

Credit Facilities

At December 31, 2016, the company has the following major credit facility available for future borrowing:

Millions of dollars	Total Facility		Borrowings Outstanding		Available for Borrowing		Expires
Senior Unsecured	$	2,500	$	—	$	2,500	December 2019

The credit facility is non-cancellable by the issuing financial institutions until its maturity in December 2019. No borrowings were outstanding under the credit agreement at December 31, 2016.

Covenants

Praxair’s $2.5 billion senior unsecured credit facility and long-term debt agreements contain various covenants which may, among other things, restrict certain types of mergers and changes in beneficial ownership of the company, and the ability of the company to incur or guarantee debt, sell or transfer certain assets, create liens against assets, enter into sale and leaseback agreements, or pay dividends and make other distributions beyond certain limits. These agreements also require Praxair to not exceed a maximum 70% leverage ratio defined in the agreements as the ratio of consolidated total debt to the sum of consolidated total debt plus consolidated shareholders’ equity of the company. For purposes of the leverage ratio calculation, consolidated shareholders’ equity excludes changes in the cumulative foreign currency translation adjustments after June 30, 2011. At December 31, 2016, the actual leverage ratio, as calculated according to the agreement, was 52% and the company is in compliance with all financial covenants. Also, there are no material adverse change clauses or other subjective conditions that would restrict the company’s ability to borrow under the agreement.

Other Debt Information

As of December 31, 2016 and 2015, the weighted-average interest rate of short-term borrowings outstanding was 1.2% and 3.4%, respectively. The decrease reflects the higher mix of international borrowings in prior year.

Expected maturities of long-term debt are as follows:

(Millions of dollars)
2017	$	164	*
2018	985
2019	1,503		*
2020	938
2021	1,006
Thereafter	4,485
	$	9,081

________________________

*    $400 million of debt due in 2017 has been reflected in 2019 maturities due to the company’s intent to refinance this debt on a long-term basis and the ability to do so under the $2.5 billion senior unsecured credit facility with a syndicate of banks which expires in 2019.

As of December 31, 2016, $5 million of Praxair’s assets (principally international fixed assets) were pledged as collateral for $5 million of long-term debt, including the current portion of long-term debt.

See Note 13 for the fair value information related to debt.

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NOTE 12. FINANCIAL INSTRUMENTS

In its normal operations, Praxair is exposed to market risks relating to fluctuations in interest rates, foreign currency exchange rates, energy costs and to a lesser extent precious metal prices. The objective of financial risk management at Praxair is to minimize the negative impact of such fluctuations on the company’s earnings and cash flows. To manage these risks, among other strategies, Praxair routinely enters into various derivative financial instruments (“derivatives”) including interest-rate swap and treasury rate lock agreements, currency-swap agreements, forward contracts, currency options, and commodity-swap agreements. These instruments are not entered into for trading purposes and Praxair only uses commonly traded and non-leveraged instruments.

There are three types of derivatives that the company enters into: (i) those relating to fair-value exposures, (ii) those relating to cash-flow exposures, and (iii) those relating to foreign currency net investment exposures. Fair-value exposures relate to recognized assets or liabilities, and firm commitments; cash-flow exposures relate to the variability of future cash flows associated with recognized assets or liabilities, or forecasted transactions; and net investment exposures relate to the impact of foreign currency exchange rate changes on the carrying value of net assets denominated in foreign currencies.

When a derivative is executed and hedge accounting is appropriate, it is designated as either a fair-value hedge, cash-flow hedge, or a net investment hedge. Currently, Praxair designates all interest-rate and treasury-rate locks as hedges for accounting purposes; however, currency contracts are generally not designated as hedges for accounting purposes unless they are related to forecasted transactions. Whether designated as hedges for accounting purposes or not, all derivatives are linked to an appropriate underlying exposure. On an ongoing basis, the company assesses the hedge effectiveness of all derivatives designated as hedges for accounting purposes to determine if they continue to be highly effective in offsetting changes in fair values or cash flows of the underlying hedged items. If it is determined that the hedge is not highly effective, then hedge accounting will be discontinued prospectively.

Counterparties to Praxair’s derivatives are major banking institutions with credit ratings of investment grade or better and no collateral is required, and there are no significant risk concentrations. Management believes the risk of incurring losses on derivative contracts related to credit risk is remote and any losses would be immaterial.

The following table is a summary of the notional amount and fair value of derivatives outstanding at December 31, 2016 and 2015 for consolidated subsidiaries:

					Fair Value
(Millions of dollars)	Notional Amounts				Assets				Liabilities
December 31,	2016		2015		2016		2015		2016		2015
Derivatives Not Designated as Hedging Instruments:
Currency contracts:
Balance sheet items (a)	$	2,104	$	2,548	$	11	$	15	$	18	$	11
Derivatives Designated as Hedging Instruments:
Currency contracts:
Balance sheet items (a)	$	38	$	38	$	3	$	1	$	—	$	—
Interest rate contracts:
Interest rate swaps (b)	475		475		4		6		—		—
Total Hedges	$	513	$	513	$	7	$	7	$	—	$	—
Total Derivatives	$	2,617	$	3,061	$	18	$	22	$	18	$	11

________________________

(a) Assets are recorded in prepaid and other current assets, and liabilities are recorded in other current liabilities.

(b) Assets are recorded in other long term assets.

Currency Contracts

Balance Sheet Items

Foreign currency contracts related to balance sheet items consist of forward contracts entered into to manage the exposure to fluctuations in foreign-currency exchange rates on recorded balance sheet assets and liabilities denominated in

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currencies other than the functional currency of the related operating unit. Certain forward currency contracts are entered into to protect underlying monetary assets and liabilities denominated in foreign currencies from foreign exchange risk and are not designated as hedging instruments. The fair value adjustments on these contracts are offset by the fair value adjustments recorded on the underlying monetary assets and liabilities. Praxair also enters into forward currency contracts, which are designated as hedging instruments, to limit the cash flow exposure on certain foreign-currency denominated intercompany loans. The fair value adjustments on these contracts are recorded to AOCI, with the effective portion immediately reclassified to earnings to offset the fair value adjustments on the underlying debt instrument.

Forecasted Purchases

Foreign currency contracts related to forecasted purchases consist of forward contracts entered into to manage the exposure to fluctuations in foreign-currency exchange rates on forecasted purchases of capital-related equipment and services denominated in currencies other than the functional currency of the related operating units. These forward contracts were designated and accounted for as cash flow hedges.

Net Investment Hedges

In 2014, Praxair designated the €600 million ($627 million as of December 31, 2016) 1.50% Euro-denominated notes due 2020 and the €500 million ($519 million as of December 31, 2016) 1.625% Euro-denominated notes due 2025, as a hedge of the net investment position in its European operations. In 2016 Praxair designated an incremental €550 million ($575 million as of December 31, 2016) 1.20% Euro-denominated notes due 2024 as an additional hedge of the net investment position in its European operations. These Euro-denominated debt instruments reduce the company's exposure to changes in the currency exchange rate on investments in foreign subsidiaries with Euro functional currencies. Since hedge inception, exchange rate movements have reduced long-term debt by $339 million ($78 million of which was during the year ended December 31, 2016), with the offsetting gain shown within the cumulative translation component of AOCI in the consolidated balance sheets and the consolidated statements of comprehensive income.

Interest Rate Contracts

Outstanding Interest Rate Swaps

At December 31, 2016, Praxair had one outstanding interest rate swap agreement with a $475 million notional amount related to the $475 million1.25% notes that mature in 2018. The interest rate swap effectively converts fixed-rate interest to variable-rate interest and is designated as a fair value hedge. Fair value adjustments are recognized in earnings along with an equally offsetting charge / benefit to earnings for the changes in the fair value of the underlying debt instrument. At December 31, 2016, $4 million was recognized as an increase in the fair value of this note ($6 million at December 31, 2015).

Terminated Treasury Rate Locks

The following table summarizes the unrecognized gains (losses) related to terminated treasury rate lock contracts:

					Unrecognized Gain / (Loss) (a)
(Millions of dollars)	Year Terminated	Original Gain / (Loss)			December 31, 2016			December 31, 2015
Treasury Rate Locks
Underlying debt instrument:
$500 million 2.20% fixed-rate notes that mature in 2022 (b)	2012	$	(2	)	$	(1	)	$	(1	)
$500 million 3.00% fixed-rate notes that mature in 2021 (b)	2011	(11		)	(5		)	(6		)
$600 million 4.50% fixed-rate notes that mature in 2019 (b)	2009	16			4			6
Total – pre-tax					$	(2	)	$	(1	)
Less: income taxes					1			—
After- tax amounts					$	(1	)	$	(1	)

________________________

(a) The unrecognized gains / (losses) for the treasury rate locks are shown in accumulated other comprehensive income ("AOCI") and are being recognized on a straight line basis to interest expense – net over the term of the underlying debt agreements. Refer to the table below summarizing the impact of the company’s consolidated statements of income and AOCI for current period gain (loss) recognition.

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(b) The notional amount of the treasury rate lock contracts are equal to the underlying debt instrument with the exception of the treasury rate lock contract entered into to hedge the $600 million4.50% fixed-rate notes that mature in 2019. The notional amount of this contract was $500 million.

The following table summarizes the impact of the company's derivatives not designated as hedging instruments on the consolidated statements of income:

(Millions of dollars)	Amount of Pre-Tax Gain (Loss)     Recognized in Earnings *
December 31,	2016		2015			2014
Derivatives Not Designated as Hedging Instruments
Currency contracts:
Balance sheet items:
Debt-related	$	21	$	(162	)	$	(69	)
Other balance sheet items	4		(8		)	(2		)
Total	$	25	$	(170	)	$	(71	)

* The gains (losses) on balance sheet items are offset by gains (losses) recorded on the underlying hedged assets and liabilities. Accordingly, the gains (losses) for the derivatives and the underlying hedged assets and liabilities related to debt items are recorded in the consolidated statements of income as interest expense-net. Other balance sheet items and anticipated net income gains (losses) are recorded in the consolidated statements of income as other income (expenses)-net.

The following table summarizes the impact of the company's derivatives designated as hedging instruments that impact AOCI:

(Millions of dollars)	Amount of Gain (Loss) Recognized in AOCI								Amount of Gain (Loss) Reclassified from AOCI to the Consolidated Statement of Income
December 31,	2016			2015		2014			2016			2015			2014
Derivatives Designated as Hedging Instruments**
Currency contracts:
Net Investment hedge	$	(4	)	$	—	$	(6	)	$	—		$	—		$	—
Forecasted purchases	—			—		1			—			—			—
Balance sheet items	1			1		—			—			(1		)	—
Interest rate contracts:
Treasury rate locks	—			—		—			(1		)	—			—
Total – Pre tax	$	(3	)	$	1	$	(5	)	$	(1	)	$	(1	)	$	—
Less: income taxes	—			—		2			1			—			—
Total - Net of Taxes	$	(3	)	$	1	$	(3	)	$	—		$	(1	)	$	—

** The gains (losses) on net investment hedges are recorded as a component of AOCI within foreign currency translation adjustments in the consolidated balance sheets and consolidated statements of comprehensive income. The gains (losses) on forecasted purchases, balance sheet items, and treasury rate locks are recorded as a component of AOCI within derivative instruments in the consolidated balance sheets and the consolidated statements of comprehensive income. There was no ineffectiveness for these instruments during 2016 or 2015. The gains (losses) on net investment hedges are reclassified to earnings only when the related currency translation adjustments are required to be reclassified, usually upon sale or liquidation of the investment. The gains (losses) for interest rate contracts are reclassified to earnings as interest expense –net on a straight-line basis over the remaining maturity of the underlying debt. Net losses of approximately $1 million are expected to be reclassified to earnings during 2017.

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NOTE 13. FAIR VALUE DISCLOSURES

The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels as follows:

Level 1 – quoted prices in active markets for identical assets or liabilities

Level 2 – quoted prices for similar assets and liabilities in active markets or inputs that are observable

Level 3 – inputs that are unobservable (for example cash flow modeling inputs based on assumptions)

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table summarizes assets and liabilities measured at fair value on a recurring basis at December 31, 2016 and 2015:

	Fair Value Measurements Using
(Millions of dollars)	Level 1				Level 2				Level 3
	2016		2015		2016		2015		2016		2015
Assets
Derivative assets	$	—	$	—	$	18	$	22	$	—	$	—
Liabilities
Derivative liabilities	$	—	$	—	$	18	$	11	$	—	$	—

The fair values of the derivative assets and liabilities are based on market prices obtained from independent brokers or determined using quantitative models that use as their basis readily observable market parameters that are actively quoted and can be validated through external sources, including third-party pricing services, brokers and market transactions. Investments are marketable securities traded on an exchange.

The fair value of cash and cash equivalents, short-term debt, accounts receivables-net, and accounts payable approximate carrying value because of the short-term maturities of these instruments. The fair value of long-term debt is estimated based on the quoted market prices for the same or similar issues, which is deemed a Level 2 measurement. At December 31, 2016, the estimated fair value of Praxair’s long-term debt portfolio was $9,218 million versus a carrying value of $9,081 million. At December 31, 2015, the estimated fair value of Praxair’s long-term debt portfolio was $9,069 million versus a carrying value of $8,981 million. These differences are attributable to interest-rate changes subsequent to when the debt was issued.

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NOTE 14. EQUITY AND NONCONTROLLING INTERESTS

Praxair, Inc. Shareholders’ Equity

At December 31, 2016 and 2015, there were 800,000,000 shares of common stock authorized (par value $0.01 per share) of which 383,230,625 shares were issued and 284,900,776 were outstanding at December 31, 2016 (284,879,079 were outstanding at December 31, 2015).

At December 31, 2016 and 2015, there were 25,000,000 shares of preferred stock (par value $0.01 per share) authorized, of which no shares were issued and outstanding. Praxair’s Board of Directors may from time to time authorize the issuance of one or more series of preferred stock and, in connection with the creation of such series, determine the characteristics of each such series including, without limitation, the preference and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions of the series.

Noncontrolling Interests

Noncontrolling interest ownership changes are presented within the "Additions (Reductions)" line item of the consolidated statements of equity. The $20 million increase during 2016 relates to the sale of an ownership interest in a majority-owned joint venture in India during the third quarter offset by the formation of PG Technologies, LLC ("PGT"), a majority-owned joint venture with GE Aviation, during the fourth quarter. The "Additions (Reductions)" line item of the consolidated statements of equity also includes an increase to Additional Paid-In Capital resulting from the sale of the noncontrolling interest to the PGT joint venture partner.

Redeemable Noncontrolling Interests

Noncontrolling interests with redemption features, such as put/sell options, that are not solely within the company’s control (“redeemable noncontrolling interests”) are reported separately in the consolidated balance sheets at the greater of carrying value or redemption value. For redeemable noncontrolling interests that are not yet exercisable, Praxair calculates the redemption value by accreting the carrying value to the redemption value over the period until exercisable. If the redemption value is greater than the carrying value, any increase is adjusted directly to retained earnings and does not impact net income. At December 31, 2016, the redeemable noncontrolling interest balance includes one packaged gas distributor in the United States where the noncontrolling shareholder has a put option.

The following is a summary of redeemable noncontrolling interests for the years ended December 31, 2016, 2015 and 2014 :

(Millions of dollars)	2016			2015			2014
Beginning Balance	$	113		$	176		$	307
Net income	3			10			12
Distributions to noncontrolling interest	(2		)	(7		)	(9		)
Redemption value adjustment/accretion *	(6		)	(40		)	2
Foreign currency translation and other	7			(17		)	(24		)
Purchase/divestiture of noncontrolling interest **	(104		)	(9		)	(112		)
Ending Balance	$	11		$	113		$	176

* In December 2015, Praxair sold its controlling interest in Praxair Distribution Southeast, LLC and, accordingly, removed the related redeemable noncontrolling interests.

** In June 2016, Praxair acquired the remaining 34% stake in a Scandinavian joint venture for $104 million. In January 2014, Praxair acquired the remaining noncontrolling interests in a joint venture in the United States. The cash payments related to these acquisitions are shown in the financing section of the consolidated statements of cash flows under the caption "Noncontrolling interest transactions and other" as there was no change in control.

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NOTE 15. SHARE-BASED COMPENSATION

Share-based compensation expense was $39 million in 2016 ($30 million and $51 million in 2015 and 2014, respectively). The income tax benefit recognized was $32 million in 2016 ($8 million and $14 million in 2015 and 2014, respectively). 2016 includes $20 million of excess tax benefits related to the new accounting standard implemented (see Note 1 and Note 5). Expense amounts reflect current estimates of achieving performance targets relating to performance-based compensation. The expense was primarily recorded in selling, general and administrative expenses and no share-based compensation expense was capitalized.

Summary of Plans

The 2009 Praxair, Inc. Long-Term Incentive Plan was initially adopted by the board of directors and shareholders of the company on April 28, 2009 and was amended and restated in its entirety by the board and shareholders on April 22, 2014 ("the 2009 Plan"). Prior to April 28, 2009, equity awards were granted under the 2002 Praxair, Inc. Long-Term Incentive Plan and the company’s ability to make further equity awards under that plan ended with its adoption of the 2009 Plan. The 2009 Plan permits awards of stock options, stock appreciation rights, restricted stock and restricted stock units, performance-based stock units and other equity awards to eligible officer and non-officer employees and non-employee directors of the company and its affiliates. Under the 2009 Plan, as amended and restated in 2014, the aggregate number of shares available for option and other equity grants is 8,000,000 shares, of which up to 2,600,000 shares may be granted as awards other than options or stock appreciation rights. The 2009 Plan also provides calendar year per-participant limits on grants of stock options and stock appreciation rights and on other types of awards intended to qualify as Performance-Based Compensation under Section 162(m) of the Internal Revenue Code. As of December 31, 2016, 3,993,818 shares remained available for equity grants under the 2009 Plan.

In 2005, the board of directors and shareholders of the company adopted the 2005 Equity Compensation Plan for Non-Employee Directors of Praxair, Inc. ("the 2005 Plan"). Under the 2005 Plan, the aggregate number of shares available for option and other equity grants was limited to a total of 500,000 shares. The 2005 Plan expired on April 30, 2010, by its own terms, and no shares were available for grant thereafter.

Exercise prices for options granted under the 2009 Plan may not be less than the closing market price of the company’s common stock on the date of grant and granted options may not be re-priced or exchanged without shareholder approval. Options granted under the 2009 Plan subject only to time vesting requirements may become partially exercisable after a minimum of one year after the date of grant but may not become fully exercisable until at least three years have elapsed from the date of grant, and all options have a maximum duration of ten years. Options granted under predecessor plans had similar terms.

In order to satisfy option exercises and other equity grants, the Company may issue authorized but previously unissued shares or it may issue treasury shares.

Stock Option Fair Value

The company utilizes the Black-Scholes Options-Pricing Model to determine the fair value of stock options consistent with that used in prior years. Management is required to make certain assumptions with respect to selected model inputs, including anticipated changes in the underlying stock price (i.e., expected volatility) and option exercise activity (i.e., expected life). Expected volatility is based on the historical volatility of the company’s stock over the most recent period commensurate with the estimated expected life of the company’s stock options and other factors. The expected life of options granted, which represents the period of time that the options are expected to be outstanding, is based primarily on historical exercise experience. The expected dividend yield is based on the company’s most recent history and expectation of dividend payouts. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for a period commensurate with the estimated expected life. If factors change and result in different assumptions in future periods, the stock option expense that the company records for future grants may differ significantly from what the company has recorded in the current period.

The weighted-average fair value of options granted during 2016 was $8.91 ($11.99 in 2015 and $14.62 in 2014) based on the Black-Scholes Options-Pricing model. The decrease in grant date fair value year-over-year is primarily attributable to a decrease in the company's stock price as of the grant date.

The following weighted-average assumptions were used to value the grants in 2016, 2015 and 2014:

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Year Ended December 31,	2016		2015		2014
Dividend yield	2.9	%	2.2	%	2.0	%
Volatility	14.4	%	13.5	%	15.2	%
Risk-free interest rate	1.41	%	1.51	%	1.57	%
Expected term years	6		5		5

The following table summarizes option activity under the plans as of December 31, 2016 and changes during the period then ended (averages are calculated on a weighted basis; life in years; intrinsic value expressed in millions):

Activity	Number  of Options (000’s)		Average Exercise Price		Average Remaining Life	Aggregate Intrinsic Value
Outstanding at January 1, 2016	11,273		$	96.58
Granted	2,473		102.23
Exercised	(1,821	)	70.17
Cancelled or expired	(217	)	111.25
Outstanding at December 31, 2016	11,708		$	101.58	5.6	$	212
Exercisable at December 31, 2016	8,018		$	96.90	4.2	$	177

The aggregate intrinsic value represents the difference between the company’s closing stock price of $117.19 as of December 31, 2016 and the exercise price multiplied by the number of in the money options outstanding as of that date. The total intrinsic value of stock options exercised during 2016 was $82 million ($65 million and $93 million in 2015 and 2014, respectively).

Cash received from option exercises under all share-based payment arrangements for 2016 was $128 million ($72 million and $88 million in 2015 and 2014, respectively). The cash tax benefit realized from share-based compensation totaled$32 million for 2016 ($33 million and $48 million cash tax benefit in 2015 and 2014, respectively).

As of December 31, 2016, $17 million of unrecognized compensation cost related to non-vested stock options is expected to be recognized over a weighted-average period of approximately 1 year.

Performance-Based and Restricted Stock Awards

In 2016, the company granted performance-based stock awards under the 2009 Plan to senior level executives of 240,505 shares that vest, subject to the attainment of pre-established minimum performance criteria, principally on the third anniversary of their date of grant. These awards are tied to either return on capital ("ROC") performance or relative total shareholder return ("TSR") performance versus that of the S&P 500. The actual number of shares issued in settlement of a vested award can range from zero to 200 percent of the target number of shares granted based upon the company’s attainment of specified performance targets at the end of a three-year period. Compensation expense related to these awards is recognized over the three-year performance period based on the fair value of the closing market price of the company’s common stock on the date of the grant and the estimated performance that will be achieved. Compensation expense for ROC awards will be adjusted during the three-year performance period based upon the estimated performance levels that will be achieved. TSR awards are measured at their grant date fair value and not subsequently re-measured.

There were 97,924 restricted stock units granted to employees during 2016. In addition, the company had previously granted restricted stock to certain key employees that vest after a designated service period ranging from 2 to 10 years although the majority of the restricted stock units vest at the end of a three-year service period. Generally, restricted stock does not earn quarterly dividends while vesting. Compensation expense related to the restricted stock units is recognized on a straight-line basis over the vesting period.

The weighted-average fair value of ROC performance-based stock awards and restricted stock units granted during 2016 was $93.46 and $98.18, respectively ($120.04 and $120.24 in 2015 and $121.16 and $122.55 in 2014). These fair values are based on the closing market price of Praxair's common stock on the grant date adjusted for dividends that will not be paid during the vesting period.

The weighted-average fair value of performance-based stock tied to relative TSR performance granted during 2016 was $124.18 per unit (none in 2015 and 2014), and was estimated using a Monte Carlo simulation performed as of the grant date.

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The following table summarizes non-vested performance-based and restricted stock award activity as of December 31, 2016 and changes during the period then ended (shares based on target amounts, averages are calculated on a weighted basis):

	Performance-Based				Restricted Stock
	Number of Shares (000’s)		Average Grant Date Fair Value		Number of Shares (000’s)		Average Grant Date Fair Value
Non-vested at January 1, 2016	802		$	114.41	286		$	112.48
Granted	241		105.34		98		98.18
Vested	(109	)	103.79		(93	)	105.92
Cancelled and Forfeited	(220	)	105.63		(17	)	113.91
Non-vested at December 31, 2016	714		$	115.72	274		$	109.49

There are approximately 11 thousand performance-based shares and 11 thousand restricted stock shares that are non-vested at December 31, 2016 which will be settled in cash due to foreign regulatory limitations. The liability related to these grants reflects the current estimate of performance that will be achieved and the current common stock price.

As of December 31, 2016, based on current estimates of future performance, $19 million of unrecognized compensation cost related to performance-based awards and $11 million of unrecognized compensation cost related to the restricted stock awards is expected to be recognized primarily through the first quarter of 2019.

NOTE 16. RETIREMENT PROGRAMS

Defined Benefit Pension Plans

Praxair has two main U.S. retirement programs which are non-contributory defined benefit plans: the Praxair Pension Plan and the CBI Pension Plan. The latter program benefits primarily former employees of CBI Industries, Inc. which Praxair acquired in 1996. Effective July 1, 2002, the Praxair Pension Plan was amended to give participating employees a one-time choice to remain covered by the old formula or to elect coverage under a new formula. The old formula is based predominantly on years of service, age and compensation levels prior to retirement, while the new formula provides for an annual contribution to an individual account which grows with interest each year at a predetermined rate. Also, this new formula applies to all new employees hired after April 30, 2002 into businesses adopting this plan. The U.S. and international pension plan assets are comprised of a diversified mix of investments, including domestic and international corporate equities, government securities and corporate debt securities. Praxair has several plans that provide supplementary retirement benefits primarily to higher level employees that are unfunded and are nonqualified for federal tax purposes. Pension coverage for employees of certain of Praxair’s international subsidiaries generally is provided by those companies through separate plans. Obligations under such plans are primarily provided for through diversified investment portfolios, with some smaller plans provided for under insurance policies or by book reserves.

Multi-employer Pension Plans

In the United States Praxair participates in seven multi-employer defined benefit pension plans ("MEPs"), pursuant to the terms of collective bargaining agreements, covering approximately 200 union-represented employees. The collective bargaining agreements expire on different dates through 2021. In connection with such agreements, the Company is required to make periodic contributions to the MEPs in accordance with the terms of the respective collective bargaining agreements. Praxair’s participation in these plans is not material either at the plan level or in the aggregate. Praxair’s contributions to these plans were $2 million in 2016, 2015, and 2014 (these costs are not included in the tables that follow). For all MEPs, Praxair’s contributions were significantly less than 1% of the total contributions to each plan for 2015 and 2014. Total 2016 contributions were not yet available from the MEPs.

Praxair has obtained the most recently available Pension Protection Act ("PPA") zone status letters from the Trustees of the MEPs. The PPA classifies MEPs as either Red, Yellow or Green zone plans. Among other factors, plans in the Red zone are generally less than 65 percent funded; plans in the Yellow zone are generally 65 to 80 percent funded; and plans in the Green zone are generally at least 80 percent funded. According to the most current data available, four of the MEPs that the Company participates in are in a Red zone status; one is in a Yellow zone status; and two are in a Green zone status. As of December 31, 2016, the five Red and Yellow Zone plans have pending or have implemented financial improvement or rehabilitation plans. Praxair does not currently anticipate significant future obligations due to the funding status of these plans. If Praxair determined it was probable that it would withdraw from an MEP, the Company would record a liability for its portion of the MEP’s unfunded pension obligations, as calculated at that time. Historically, such withdrawal payments have not been significant.

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Defined Contribution Plans

Praxair’s U.S. business employees are eligible to participate in the Praxair defined contribution savings plan. Employees may contribute up to 40% of their compensation, subject to the maximum allowable by IRS regulations. For the U.S. packaged gases business, company contributions to this plan are calculated as a percentage of salary based on age plus service. U.S. employees other than those in the packaged gases business have company contributions to this plan calculated on a graduated scale based on employee contributions to the plan. The cost for these defined contribution plans was $28 million in 2016, $28 million in 2015 and $26 million in 2014 (these costs are not included in the tables that follow).

The defined contribution plans include a non-leveraged employee stock ownership plan ("ESOP") which covers all employees participating in this plan. The collective number of shares of Praxair common stock in the ESOP totaled 2,703,391 at December 31, 2016.

Certain international subsidiaries of the company also sponsor defined contribution plans where contributions are determined under various formulas. The expense for these plans was $18 million in 2016 and $17 million in 2015 and 2014 (these expenses are not included in the tables that follow).

Postretirement Benefits Other Than Pensions (OPEB)

Praxair provides health care and life insurance benefits to certain eligible retired employees. These benefits are provided through various insurance companies and healthcare providers. Praxair is also obligated to make payments for a portion of postretirement benefits related to retirees of Praxair’s former parent. Additionally, as part of the CBI acquisition in 1996, Praxair assumed responsibility for healthcare and life insurance benefit obligations for CBI’s retired employees. All postretirement healthcare programs have cost caps that limit the company’s exposure to future cost increases. In addition, as part of the retirement elections made for July 1, 2002, eligible employees were given the choice of maintaining coverage in the current retiree medical design (as may be amended from time to time), or to move to a design whereby coverage would be provided, but with no Praxair subsidy whatsoever. Also, all new employees hired after April 30, 2002 into a business adopting these plans will not receive a company subsidy. Praxair does not currently fund its postretirement benefits obligations. Praxair’s retiree plans may be changed or terminated by Praxair at any time for any reason with no liability to current or future retirees.

Praxair uses a measurement date of December 31 for its pension and other post-retirement benefit plans.

Pension and Postretirement Benefit Costs

The components of net pension and OPEB costs for 2016, 2015 and 2014 are shown below:

(Millions of dollars) Year Ended December 31,	Pensions									OPEB
	2016			2015			2014			2016			2015			2014
Service cost	$	45		$	54		$	49		$	2		$	3		$	4
Interest cost	100			112			121			6			7			11
Expected return on plan assets	(157		)	(154		)	(155		)	—			—			—
Net amortization and deferral	59			79			60			(3		)	(2		)	(8		)
Net periodic benefit cost before pension settlement charges	$	47		$	91		$	75		$	5		$	8		$	7
Pension settlement charges *	4			7			7			—			—			—
Net periodic benefit cost	$	51		$	98		$	82		$	5		$	8		$	7

* 2016 includes a $4 million pension settlement charge related to lump sum benefits paid to retired senior managers in the third quarter. The third quarter of 2015 and the fourth quarter of 2014 both include charges of $7 million, related primarily to the retirement of senior managers in the United States (see Note 2).

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Funded Status

The changes in benefit obligation and plan assets for Praxair’s pension and OPEB programs, including reconciliation of the funded status of the plans to amounts recorded in the consolidated balance sheet, as of December 31, 2016 and 2015 are shown below:

(Millions of dollars) Year Ended December 31,	Pensions
	2016						2015						OPEB
	U.S.			International			U.S.			International			2016			2015
Change in Benefit Obligation ("PBO")
Benefit obligation January 1	$	1,992		$	580		$	2,050		$	719		$	160		$	180
Service cost	31			14			36			18			2			3
Interest cost	70			30			80			32			6			7
Participant contributions	—			—			—			—			10			10
Plan amendment	—			(2		)	—			2			(7		)	—
Actuarial loss (gain)	104			76			(68		)	(41		)	4			(9		)
Benefits paid	(131		)	(33		)	(106		)	(32		)	(20		)	(24		)
Foreign currency translation	—			1			—			(118		)	1			(7		)
Benefit obligation, December 31	$	2,066		$	666		$	1,992		$	580		$	156		$	160
Accumulated benefit obligation ("ABO")	$	1,970		$	639		$	1,900		$	551
Change in Plan Assets
Fair value of plan assets, January 1	$	1,509		$	475		$	1,607		$	561		$	—		$	—
Actual return on plan assets	117			47			(11		)	18			—			—
Company contributions	—			11			—			15			—			—
Benefits paid from plan assets	(119		)	(26		)	(87		)	(28		)	—			—
Foreign currency translation	—			—			—			(91		)	—			—
Fair value of plan assets, December 31	$	1,507		$	507		$	1,509		$	475		$	—		$	—
Funded Status, End of Year	$	(559	)	$	(159	)	$	(483	)	$	(105	)	$	(156	)	$	(160	)
Recorded in the Balance Sheet
Other long-term assets	$	—		$	13		$	—		$	41		$	—		$	—
Other current liabilities	(7		)	(5		)	(12		)	(4		)	(12		)	(13		)
Other long-term liabilities	(552		)	(167		)	(471		)	(142		)	(144		)	(147		)
Net amount recognized, December 31	$	(559	)	$	(159	)	$	(483	)	$	(105	)	$	(156	)	$	(160	)
Amounts recognized in accumulated other comprehensive income (loss) consist of:
Net actuarial loss (gain)	$	832		$	189		$	782		$	135		$	(20	)	$	(25	)
Prior service cost (credit)	—			12			—			11			(8		)	(1		)
Deferred tax benefit (Note 5)	(318		)	(46		)	(299		)	(37		)	12			11
Amount recognized in accumulated other comprehensive income (loss) (Note 7)	$	514		$	155		$	483		$	109		$	(16	)	$	(15	)

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The changes in plan assets and benefit obligations recognized in other comprehensive income in 2016 and 2015 are as follows:

	Pensions						OPEB
(Millions of dollars)	2016			2015			2016			2015
Current year net actuarial losses (gains)*	$	172		$	38		$	4		$	(9	)
Amortization of net actuarial gains (losses)	(60		)	(78		)	3			2
Plan amendment	(2		)	—			(7		)	—
Amortization of prior service credits (costs)	1			(1		)	—			—
Pension settlements (Note 2)	(4		)	(7		)	—			—
Foreign currency translation and other	(2		)	(24		)	(2		)	6
Total recognized in other comprehensive income	$	105		$	(72	)	$	(2	)	$	(1	)

________________________

 * Pension net actuarial losses in 2016 are primarily driven by liability experience as well as lower U.S. discount rates. Pension net actuarial losses in 2015 relate primarily to lower actual returns on plan assets when compared with 2014 offset by higher U.S. discount rates. OPEB net actuarial losses in 2016 are largely due to unfavorable plan experience whereas gains in 2015 relate primarily to higher discount rates and favorable plan experience.

The amounts in accumulated other comprehensive income (loss) that are expected to be recognized as components of net periodic benefit cost during 2017 are as follows:

(Millions of dollars)	Pension		OPEB
Net actuarial loss (gain)	$	65	$	2
Prior service cost (credit)	2		1
	$	67	$	3

The following table provides information for pension plans where the accumulated benefit obligation exceeds the fair value of the plan assets:

(Millions of dollars) Year Ended December 31,	Pensions
	2016				2015
	U.S.		International		U.S.		International
Projected benefit obligation ("PBO")	$	2,066	$	372	$	1,992	$	336
Accumulated benefit obligation ("ABO")	$	1,970	$	365	$	1,900	$	324
Fair value of plan assets	$	1,507	$	199	$	1,509	$	188

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Assumptions

The assumptions used to determine benefit obligations are as of the respective balance sheet dates and the assumptions used to determine net benefit cost are as of the previous year-end, as shown below:

	Pensions
	U.S.				International				OPEB
	2016		2015		2016		2015		2016		2015
Weighted average assumptions used to determine benefit obligations at December 31,
Discount rate	4.05	%	4.32	%	5.09	%	5.32	%	4.21	%	4.24	%
Rate of increase in compensation levels	3.25	%	3.25	%	3.73	%	3.57	%	N/A		N/A
Weighted average assumptions used to determine net periodic benefit cost for years ended December 31,
Discount rate (1)	4.32	%	3.95	%	5.32	%	5.36	%	4.24	%	4.48	%
Rate of increase in compensation levels	3.25	%	3.25	%	3.57	%	3.72	%	N/A		N/A
Expected long-term rate of return on plan assets (2)	8.00	%	8.00	%	7.92	%	7.71	%	N/A		N/A

________________________

(1) At the end of 2015, the Company changed the approach used to measure service and interest costs for significant pension and OPEB plans. Through 2015, Praxair measured service and interest costs utilizing a single weighted-average discount rate for each plan derived from the yield curve used to measure the respective plan obligations. Effective in 2016, the Company elected to measure service and interest costs for significant plans by applying the specific spot rates along that yield curve to the plan's expected cash flows ("spot rate approach"). The Company believes the new spot rate approach provides a more precise measurement of service and interest costs by aligning the timing of the plans' expected cash flows to the corresponding spot rates on the yield curve. This change does not affect the measurement of plan obligations nor the funded status of the plans. The Company has accounted for this change as a change in accounting estimate and, accordingly has accounted for it on a prospective basis.

(2) The expected long term rate of return on the U.S. and international plan assets is estimated based on the plans' investment strategy and asset allocation, historical capital market performance and, to a lesser extent, historical plan performance. For the U.S. plans, the expected rate of return of 8.00% was derived based on the target asset allocation of 50%-70% equity securities (approximately 9.5% expected return), 20%-40% fixed income securities (approximately 5.5% expected return) and 2% - 10% real estate funds (approximately 7% expected return). For the international plans, the expected rate of return was derived based on the weighted average target asset allocation of 30%-50% equity securities (approximately 10% expected return), 40%-60% fixed income securities (approximately 7.5% expected return), and 0%-10% alternative investments (approximately 7.5% expected return). For the U.S. plan assets, the actual annualized total returns for the most recent 10-year and 20-year periods ended December 31, 2016 were approximately 4.9% and 6.7%, respectively. For the international plan assets, the actual annualized total returns for the same two periods were approximately 6.9% and 8.6%, respectively. Changes to plan asset allocations and investment strategy over this time period limit the value of historical plan performance as factor in estimating the expected long term rate of return. For 2017, the expected long-term rate of return on plan assets will be 8.00% for the U.S. plans. Expected weighted average returns for international plans will vary.    

	OPEB
Assumed healthcare cost trend rates	2016		2015
Healthcare cost trend assumed	7.00	%	7.00	%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)	5.00	%	5.00	%
Year that the rate reaches the ultimate trend rate	2020		2020

These healthcare-cost trend rate assumptions have an impact on the amounts reported. However, cost caps limit the impact on the net OPEB benefit cost in the U.S. To illustrate the effect, a one-percentage point change in assumed

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healthcare cost trend rates would have the following effects:

	One-Percentage Point
(Millions of dollars)	Increase		Decrease
Effect on the total of service and interest cost components of net OPEB benefit cost	$	—	$	—
Effect on OPEB benefit obligation	$	4	$	(3	)

Pension Plan Assets

The investments of the U.S. pension plan are managed to meet the future expected benefit liabilities of the plan over the long term by investing in diversified portfolios consistent with prudent diversification and historical and expected capital market returns. When Praxair became an independent, publicly traded company in 1992, its former parent retained all liabilities for its term-vested and retired employees. Praxair’s plan received assets and retained pension liabilities for its own active employee base. Therefore, the liabilities under the Praxair U.S. pension plan mature at a later date compared to pension funds of other similar companies. Investment strategies are reviewed by the Finance and Pension Committee of the company’s Board of Directors and investment performance is tracked against appropriate benchmarks. There are no concentrations of risk as it relates to the assets within the plans.

The international pension plans are managed individually based on diversified investment portfolios, with different target asset allocations that vary for each plan. Praxair’s U.S. and international pension plans’ weighted-average asset allocations at December 31, 2016 and 2015, and the target asset allocation range for 2016, by major asset category, are as follows:

	U.S.					International
Asset Category	Target	2016		2015		Target	2016		2015
Equity securities	50%-70%	59	%	62	%	30%-50%	35	%	50	%
Fixed income securities	20%-40%	32	%	30	%	40%-60%	56	%	41	%
Other	2% - 10%	9	%	8	%	0%-10%	9	%	9	%

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The following table summarizes pension assets measured at fair value by asset category at December 31, 2016 and 2015. During the years presented, there has been no transfer of assets between Levels 1, 2 and 3 (see Note 13 for definition of the levels):

	Fair Value Measurements Using
	Level 1				Level 2				Level 3 **				Total
(Millions of dollars)	2016		2015		2016		2015		2016		2015		2016		2015
Cash and cash equivalents	$	3	$	1	$	—	$	—	$	—	$	—	$	3	$	1
Equity securities:
U.S. equities	344		302		—		—		—		—		344		302
International equities	37		62		—		—		—		—		37		62
Mutual funds	2		236		—		—		—		—		2		236
Fixed income securities:
U.S. government bonds	—		—		51		50		—		—		51		50
International government bonds	—		—		159		89		—		—		159		89
Mutual funds	104		91		—		—		—		—		104		91
Corporate bonds	—		—		194		163		—		—		194		163
Other:
Insurance contracts	—		—		—		—		45		43		45		43
Real Estate Funds	—		—		—		—		135		123		135		123
Total plan assets at fair value, December 31,	$	490	$	692	$	404	$	302	$	180	$	166	$	1,074	$	1,160
Pooled funds *													940		824
Total fair value plan assets December 31,													$	2,014	$	1,984

* Pooled funds are measured using the net asset value ("NAV") as a practical expedient for fair value as permissible under the accounting standard for fair value measurements and have not been categorized in the fair value hierarchy in accordance with recently issued accounting standards updates related to Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share. Pooled fund NAVs are provided by the trustee and are determined by reference to the fair value of the underlying securities of the trust, less its liabilities, which are valued primarily through the use of directly or indirectly observable inputs. Depending on the pooled fund, underlying securities may include marketable equity securities or fixed income securities.

** The following table summarizes changes in fair value of the pension plan assets classified as level 3 for the periods ended December 31, 2016 and 2015:

(Millions of dollars)	Insurance Contracts			Real Estate Funds		Total
Balance, December 31, 2014	$	53		$	110	$	163
Gain/(Loss) for the period	(4		)	13		9
Acquisitions	—			—		—
Foreign currency translation	(6		)	—		(6		)
Balance, December 31, 2015	43			123		166
Gain/(Loss) for the period	3			12		15
Acquisitions	—			—		—
Foreign currency translation	(1		)	—		(1		)
Balance, December 31, 2016	$	45		$	135	$	180

The descriptions and fair value methodologies for the U.S. and international pension plan assets are as follows:

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Cash and Cash Equivalents – This category includes cash and short-term interest bearing investments with maturities of three months or less. Investments are valued at cost plus accrued interest. Cash and cash equivalents are classified within level 1 of the valuation hierarchy.

Equity Securities – This category is comprised of shares of common stock in U.S. and international companies from a diverse set of industries and size. Common stock is valued at the closing market price reported on a U.S. or international exchange where the security is actively traded. Equity securities are classified within level 1 of the valuation hierarchy.

Mutual Funds – These categories consist of publicly and privately managed funds that invest primarily in marketable equity and fixed income securities. The fair value of these investments is determined by reference to the net asset value of the underlying securities of the fund. Shares of publicly traded mutual funds are valued at the net asset value quoted on the exchange where the fund is traded and are classified as level 1 within the valuation hierarchy.

U.S. and International Government Bonds – This category includes U.S. treasuries, U.S. federal agency obligations and international government debt. The majority of these investments do not have quoted market prices available for a specific government security and so the fair value is determined using quoted prices of similar securities in active markets and is classified as level 2 within the valuation hierarchy.

Corporate Bonds – This category is comprised of corporate bonds of U.S. and international companies from a diverse set of industries and size. The fair values for U.S. and international corporate bonds are determined using quoted prices of similar securities in active markets and observable data or broker or dealer quotations. The fair values for these investments are classified as level 2 within the valuation hierarchy.

Insurance Contracts – The fair value of insurance contracts is determined based on the cash surrender value of the insurance contract, which is determined based on such factors as the fair value of the underlying assets and discounted cash flows. These contracts are with highly rated insurance companies. Insurance contracts are classified within level 3 of the valuation hierarchy.

Real Estate Funds – This category includes real estate properties, partnership equities and investments in operating companies. The fair value of the assets is determined using discounted cash flows by estimating an income stream for the property plus a reversion into a present value at a risk adjusted rate. Yield rates and growth assumptions utilized are derived from market transactions as well as other financial and industry data. The fair value for these investments are classified within level 3 of the valuation hierarchy.

Contributions

At a minimum, Praxair contributes to its pension plans to comply with local regulatory requirements (e.g., ERISA in the United States). Discretionary contributions in excess of the local minimum requirements are made based on many factors, including long-term projections of the plans' funded status, the economic environment, potential risk of overfunding, pension insurance costs and alternative uses of the cash. Changes to these factors can impact the timing of discretionary contributions from year to year. Pension contributions were $11 million in 2016, $15 million in 2015 and $18 million in 2014. Estimated required contributions for 2017 are currently expected to be in the area of $10 million to $15 million.

Estimated Future Benefit Payments

The following table presents estimated future benefit payments, net of participants contributions:

(Millions of dollars)	Pensions
Year Ended December 31,	U.S.		International		OPEB
2017	$	105	$	32	$	13
2018	115		32		12
2019	122		35		12
2020	123		37		11
2021	126		38		11
2022-2026	661		210		47

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NOTE 17. COMMITMENTS AND CONTINGENCIES

The company accrues non income-tax liabilities for contingencies when management believes that a loss is probable and the amounts can be reasonably estimated, while contingent gains are recognized only when realized. In the event any losses are sustained in excess of accruals, they will be charged against income at that time. Attorney fees are recorded as incurred. Commitments represent obligations, such as those for future purchases of goods or services, that are not yet recorded on the company’s balance sheet as liabilities. The company records liabilities for commitments when incurred (i.e., when the goods or services are received).

Contingent Liabilities

Praxair is subject to various lawsuits and government investigations that arise from time to time in the ordinary course of business. These actions are based upon alleged environmental, tax, antitrust and personal injury claims, among others. Praxair has strong defenses in these cases and intends to defend itself vigorously. It is possible that the company may incur losses in connection with some of these actions in excess of accrued liabilities. Management does not anticipate that in the aggregate such losses would have a material adverse effect on the company’s consolidated financial position or liquidity; however, it is possible that the final outcomes could have a significant impact on the company’s reported results of operations in any given period.

Significant matters are:

• During May 2009, the Brazilian government published Law 11941/2009 instituting a new voluntary amnesty program (“Refis Program”) which allowed Brazilian companies to settle certain federal tax disputes at reduced amounts. During the 2009 third quarter, Praxair decided that it was economically beneficial to settle many of its outstanding federal tax disputes and such disputes were enrolled in the Refis Program, subject to final calculation and review by the Brazilian federal government. The Company recorded estimated liabilities based on the terms of the Refis Program. Since 2009, Praxair has been unable to reach final agreement on the calculations and recently initiated litigation against the government in an attempt to resolve certain items. Open issues relate to the following matters: (i) application of cash deposits and net operating loss carryforwards to satisfy obligations and (ii) the amount of tax reductions available under the Refis Program. It is difficult to estimate the timing of resolution of legal matters in Brazil.

• At December 31, 2016 the most significant non-income and income tax claims in Brazil, after enrollment in the Refis Program, relate to state VAT tax matters and a federal income tax matter where the taxing authorities are challenging the tax rate that should be applied to income generated by a subsidiary company. The total estimated exposure relating to such claims, including interest and penalties, as appropriate, is approximately $225 million. Praxair has not recorded any liabilities related to such claims based on management judgments, after considering judgments and opinions of outside counsel. Because litigation in Brazil historically takes many years to resolve, it is very difficult to estimate the timing of resolution of these matters; however, it is possible that certain of these matters may be resolved within the near term. The company is vigorously defending against the proceedings.

• On September 1, 2010, CADE ("Brazilian Administrative Council for Economic Defense") announced alleged anticompetitive activity on the part of five industrial gas companies in Brazil and imposed fines on all five companies. Originally, CADE imposed a civil fine of R$2.2 billion Brazilian reais (US$675 million) against White Martins, the Brazil-based subsidiary of Praxair, Inc. In response to a motion for clarification, the fine was reduced to R$1.7 billion Brazilian reais (US$522 million) due to a calculation error made by CADE. The amount of the fine is subject to indexation using SELIC. On September 2, 2010, Praxair issued a press release and filed a report on Form 8-K rejecting all claims and stating that the fine represents a gross and arbitrary disregard of Brazilian law.

On October 19, 2010, White Martins filed an annulment petition (“appeal”) with the Federal Court in Brasilia seeking to have the fine against White Martins entirely overturned. In order to suspend payment of the fine pending the completion of the appeal process, Brazilian law required that the company tender a form of guarantee in the amount of the fine as security. Initially, 50% of the guarantee was satisfied by letters of credit with a financial institution and 50% by equity of a Brazilian subsidiary. On April 15, 2016, the Ninth Federal Court in Brasilia allowed White Martins to withdraw and cancel the letters of credit. Accordingly, the guarantee is currently satisfied solely by equity of a Brazilian subsidiary.

On September 14, 2015, the Ninth Federal Court of Brasilia overturned the fine against White Martins and declared the original CADE administrative proceeding to be null and void. On June 30, 2016, CADE filed an appeal against this decision with the Federal Circuit Court in Brasilia.

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Praxair strongly believes that the allegations are without merit and that the fine will be entirely overturned during the appeal process. The company further believes that it has strong defenses and will vigorously defend against the allegations and related fine up to such levels of the Federal Courts in Brazil as may be necessary. Because appeals in Brazil historically take many years to resolve, it is very difficult to estimate when the appeal will be finally decided. Based on management judgments, after considering judgments and opinions of outside counsel, no reserve has been recorded for this proceeding as management does not believe that a loss is probable.

Commitments and Contractual Obligations

The following table sets forth Praxair’s material commitments and contractual obligations as of December 31, 2016, excluding leases, tax liabilities for uncertain tax positions, long-term debt, other post retirement and pension obligations which are summarized elsewhere in the financial statements (see Notes 4, 5, 11, and 16):

(Millions of dollars) Expiring through December 31,	Unconditional Purchase Obligations		Construction Commitments
2017	$	585	$	836
2018	534		271
2019	476		125
2020	422		—
2021	434		—
Thereafter	2,645		—
	$	5,096	$	1,232

Unconditional purchase obligations of $5,096 million represent contractual commitments under various long and short-term take-or-pay arrangements with suppliers and are not included on Praxair's balance sheet. These obligations are primarily minimum-purchase commitments for helium, electricity, natural gas and feedstock used to produce atmospheric and process gases. A significant portion of these obligations is passed on to customers through similar take-or-pay or other contractual arrangements. Purchase obligations that are not passed along to customers through such contractual arrangements are subject to market conditions, but do not represent a material risk to Praxair. During 2016, payments related to Praxair's unconditional purchase obligations totaled $887 million, including $444 million for electricity and $150 million for natural gas. Approximately $2,770 million of the purchase obligations relates to power and is intended to secure the uninterrupted supply of electricity and feedstock to Praxair's plants to reliably satisfy customer product supply obligations, and extend through 2030. Certain of the power contracts contain various cancellation provisions requiring supplier agreement, and many are subject to annual escalations based on local inflation factors. The purchase obligations also include a multi-year contract for silane, with a total purchase obligation of $86 million as of December 31, 2016. At December 31, 2016, Praxair's current selling prices and estimated future demand for silane are in excess of its contractual purchase obligations under the contract.

Construction commitments of $1,232 million represent outstanding commitments to complete authorized construction projects as of December 31, 2016. A significant portion of Praxair’s capital spending is related to the construction of new production facilities to satisfy customer commitments which may take a year or more to complete.

Unconsolidated equity investees had total debt of approximately $305 million at December 31, 2016, which was non-recourse to Praxair. Additionally, Praxair pledged its interest in an unconsolidated equity investment as collateral for $22 million of debt held by that same equity investee. Praxair has no significant financing arrangements with closely-held related parties.

At December 31, 2016, Praxair had undrawn outstanding letters of credit, bank guarantees and surety bonds valued at approximately $415 million from financial institutions. These relate primarily to customer contract performance guarantees (including plant construction in connection with certain on-site contracts), self-insurance claims and other commercial and governmental requirements, including foreign litigation matters.

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NOTE 18. SEGMENT INFORMATION

The company’s operations are organized into five reportable segments, four of which have been determined on a geographic basis of segmentation: North America, Europe, South America and Asia. In addition, Praxair operates its worldwide surface technologies business through its wholly-owned subsidiary, Praxair Surface Technologies, Inc., which represents the fifth reportable segment.

Praxair’s operations consist of two major product lines: industrial gases and surface technologies. The industrial gases product line centers on the manufacturing and distribution of atmospheric gases (oxygen, nitrogen, argon, rare gases) and process gases (carbon dioxide, helium, hydrogen, electronic gases, specialty gases, acetylene). Many of these products are co-products of the same manufacturing process. Praxair manufactures and distributes nearly all of its products and manages its customer relationships on a regional basis. Praxair’s industrial gases are distributed to various end-markets within a regional segment through one of three basic distribution methods: on-site or tonnage; merchant or bulk; and packaged or cylinder gases. The distribution methods are generally integrated in order to best meet the customer’s needs and very few of its products can be economically transported outside of a region. Therefore, the distribution economics are specific to the various geographies in which the company operates and are consistent with how management assesses performance.

Praxair evaluates the performance of its reportable segments based primarily on operating profit, excluding inter-company royalties and items not indicative of ongoing business trends. Corporate and globally managed expenses, and research and development costs relating to Praxair’s global industrial gases business, are allocated to operating segments based on sales.

The table below presents information about reportable segments for the years ended December 31, 2016, 2015 and 2014.

(Millions of dollars)	2016		2015		2014
Sales (a)
North America	$	5,592	$	5,865	$	6,436
Europe	1,392		1,320		1,546
South America	1,399		1,431		1,993
Asia	1,555		1,551		1,619
Surface Technologies	596		609		679
	$	10,534	$	10,776	$	12,273

	2016			2015			2014
Operating Profit
North America	$	1,430		$	1,558		$	1,580
Europe	273			250			291
South America	257			291			449
Asia	276			289			303
Surface Technologies	102			105			123
Segment operating profit	2,338			2,493			2,746
Cost reduction program and other charges (Note 2)	(100		)	(172		)	(138		)
Total operating profit	$	2,238		$	2,321		$	2,608

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	2016		2015		2014
Total Assets (b)
North America	$	10,019	$	9,748	$	10,187
Europe	2,928		2,704		2,996
South America	2,748		2,124		2,718
Asia	2,984		3,113		3,194
Surface Technologies	653		630		674
	$	19,332	$	18,319	$	19,769

	2016		2015		2014
Depreciation and Amortization
North America	$	614	$	609	$	611
Europe	155		145		168
South America	133		135		177
Asia	179		176		170
Surface Technologies	41		41		44
	$	1,122	$	1,106	$	1,170

	2016		2015		2014
Capital Expenditures and Acquisitions
North America	$	989	$	869	$	837
Europe	402		227		319
South America	232		285		373
Asia	165		208		310
Surface Technologies	40		34		56
	$	1,828	$	1,623	$	1,895

	2016		2015		2014
Sales by Product Group
Atmospheric gases and related	$	7,329	$	7,595	$	8,623
Process gases and other	2,609		2,572		2,971
Surface technologies	596		609		679
	$	10,534	$	10,776	$	12,273

	2016		2015		2014
Sales by Major Country
United States	$	4,623	$	4,771	$	5,171
Brazil	1,091		1,107		1,511
Other – foreign	4,820		4,898		5,591
	$	10,534	$	10,776	$	12,273

100

	2016		2015		2014
Long-lived Assets by Major Country (c)
United States	$	4,922	$	4,825	$	4,817
Brazil	1,262		986		1,344
Other – foreign	5,293		5,187		5,836
	$	11,477	$	10,998	$	11,997

________________________

(a) Sales reflect external sales only. Intersegment sales, primarily from North America to other segments, were not material.

(b) Includes equity investments as of December 31, as follows:

(Millions of dollars)	2016		2015		2014
North America	$	121	$	127	$	132
Europe	243		195		207
Asia	353		343		354
	$	717	$	665	$	693

Changes primarily relate to equity investment earnings, dividends and currency impacts.

(c) Long-lived assets include property, plant and equipment – net.

NOTE 19. QUARTERLY DATA (UNAUDITED)

(Dollar amounts in millions, except per share data)

2016	1Q (a)		2Q		3Q (a)		4Q		YEAR (a)
Sales	$	2,509	$	2,665	$	2,716	$	2,644	$	10,534
Cost of sales, exclusive of depreciation and amortization	$	1,381	$	1,468	$	1,533	$	1,478	$	5,860
Depreciation and amortization	$	272	$	281	$	284	$	285	$	1,122
Operating profit	$	554	$	588	$	497	$	599	$	2,238
Net income – Praxair, Inc.	$	356	$	399	$	339	$	406	$	1,500
Basic Per Share Data
Net income	$	1.25	$	1.40	$	1.19	$	1.42	$	5.25
Weighted average shares (000’s)	285,429		285,702		285,858		285,720		285,677
Diluted Per Share Data
Net income	$	1.24	$	1.39	$	1.18	$	1.41	$	5.21
Weighted average shares (000’s)	286,665		287,727		288,195		287,956		287,757

101

2015	1Q		2Q (a)		3Q (a)		4Q		YEAR (a)
Sales	$	2,757	$	2,738	$	2,686	$	2,595	$	10,776
Cost of sales, exclusive of depreciation and amortization	$	1,530	$	1,516	$	1,488	$	1,426	$	5,960
Depreciation and amortization	$	277	$	278	$	276	$	275	$	1,106
Operating profit	$	623	$	480	$	594	$	624	$	2,321
Net income – Praxair, Inc.	$	416	$	308	$	401	$	422	$	1,547
Basic Per Share Data
Net income	$	1.44	$	1.07	$	1.40	$	1.48	$	5.39
Weighted average shares (000’s)	289,143		287,939		285,651		285,288		287,005
Diluted Per Share Data
Net income	$	1.43	$	1.06	$	1.40	$	1.47	$	5.35
Weighted average shares (000’s)	291,652		290,102		287,311		286,856		289,055

________________________

(a) 2016 and 2015 include the impact of the following charges (see Notes 2, 11 & 16):

(Millions of dollars)	Operating Profit/ (Loss)			Net Income/ (Loss)			Diluted Earnings Per Share
Bond Redemption -Q1	$	—		$	(10	)	$	(0.04	)
Cost reduction program and other charges - Q3	(96		)	(63		)	(0.22		)
Pension settlement charge - Q3	(4		)	(3		)	(0.01		)
Year 2016	$	(100	)	$	(76	)	$	(0.27	)
Cost reduction program and other charges - Q2	$	(146	)	$	(112	)	$	(0.39	)
Cost reduction program and other charges - Q3	(19		)	(13		)	(0.04		)
Pension settlement charge - Q3	(7		)	(5		)	(0.02		)
Year 2015	$	(172	)	$	(130	)	$	(0.45	)

102

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A.     CONTROLS AND PROCEDURES

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

Based on an evaluation of the effectiveness of Praxair’s disclosure controls and procedures, which was made under the supervision and with the participation of management, including Praxair’s principal executive officer and principal financial officer, the principal executive officer and principal financial officer have each concluded that, as of the end of the annual period covered by this report, such disclosure controls and procedures are effective in ensuring that information required to be disclosed by Praxair in reports that it files under the Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and accumulated and communicated to management including Praxair’s principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control Over Financial Reporting

Praxair’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of management, including the company’s principal executive officer and principal financial officer, Praxair conducted an evaluation of the effectiveness of its internal control over financial reporting based on the framework in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (often referred to as COSO). Based on this evaluation, management concluded that the company’s internal control over financial reporting was effective as of December 31, 2016.

Praxair’s evaluation of internal control over financial reporting as of December 31, 2016 did not include the internal control over financial reporting related to Yara International ASA's European carbon dioxide business because they were acquired by Praxair in a purchase business combination consummated during 2016. Total assets and sales for this acquisition represent 1.1% and 0.6%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2016 (See Note 3 to the consolidated financial statements in Item 8).

PricewaterhouseCoopers LLP, an independent registered public accounting firm, has issued their opinion on the company’s internal control over financial reporting as of December 31, 2016 as stated in their report in Item 8.

Changes in Internal Control over Financial Reporting

There were no changes in Praxair’s internal control over financial reporting that occurred during the fourth quarter of 2016 that have materially affected, or are reasonably likely to materially affect, Praxair’s internal control over financial reporting.

ITEM 9B.     OTHER INFORMATION

None.

103

PART III

ITEM 10.     DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Certain information required by this item is incorporated herein by reference to the sections captioned “Corporate Governance and Board Matters - Director Nominees” and “Corporate Governance And Board Matters-Section 16(a) Beneficial Ownership Reporting Compliance” in Praxair’s Proxy Statement for the Annual Meeting of Shareholders to be held on April 25, 2017.

Identification of the Audit Committee

Praxair has a separately-designated standing Audit Committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934 as amended (the “Exchange Act”). The members of that Audit Committee are Raymond W. LeBoeuf, Chairman, Ira D. Hall, Nance K. Dicciani and Larry D. McVay.

Audit Committee Financial Expert

The Praxair Board of Directors has determined that each of, Raymond W. LeBoeuf and Ira D. Hall is an “audit committee financial expert” as defined by Item 407(d)(5)(ii) of Regulation S-K of the Exchange Act and is independent within the meaning of the independence standards adopted by the Board of Directors and those of the New York Stock Exchange.

Code of Ethics

Praxair has adopted a code of ethics that applies to the company’s directors and all employees, including its Chief Executive Officer, Chief Financial Officer, and Controller. This code of ethics has been approved by the Praxair Board of Directors and is named the “Compliance with Laws and Business Integrity and Ethics Policy”. To assist employees and directors in complying with this code of ethics, management, from time to time, develops specific standards implementing certain provisions of the code which standards are contained in Praxair’s “Standards of Business Integrity.” Both documents are posted on the company’s public website, www.praxair.com but are not incorporated herein.

ITEM 11.     EXECUTIVE COMPENSATION

Information required by this item is incorporated herein by reference to the sections captioned “Executive Compensation Matters” and “Corporate Governance and Board Matters - Director Compensation” in Praxair’s Proxy Statement for the Annual Meeting of Shareholders to be held on April 25, 2017.

ITEM 12.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Equity Compensation Plans Information – The table below provides information as of December 31, 2016 about company stock that may be issued upon the exercise of options, warrants and rights granted to employees or members of Praxair’s Board of Directors under present and former equity compensation plans, including plans approved by shareholders and one plan which has not been approved by shareholders, the 1996 Praxair, Inc. Performance Incentive Plan ("the 1996 Plan"). The equity compensation plan not approved by shareholders was terminated in March 2001 and directors and officers of the company were not eligible to participate in that plan. Shareholder approval of that plan was not required under applicable NYSE rules. The 1996 Plan provided for granting nonqualified or incentive stock options, stock grants, performance awards and other stock related incentives for key employees. The exercise price under the 1996 Plan was equal to the closing price of Praxair’s common stock on the date of grant. Options that were granted under this plan became exercisable after one or more years after the date of grant and the option term was no more than ten years.

104

EQUITY COMPENSATION PLANS TABLE

Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)		Weighted-average exercise price of outstanding options, warrants and rights (b)		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by shareholders	12,695,921	(1)	$	93.67	3,993,818
Equity compensation plans not approved by shareholders	—		—		—
Total	12,695,921		$	93.67	3,993,818

________________________

(1) This amount includes 274,422 restricted shares and 713,620 performance shares. Up to an additional 713,620 performance shares could be issued if performance goals are achieved at the maximum specified targets. See Note 15 to the consolidated financial statements.

Certain information required by this item regarding the beneficial ownership of the Company’s common stock is incorporated herein by reference to the section captioned “Information on Share Ownership” in Praxair’s Proxy Statement for the Annual Meeting of Shareholders to be held on April 25, 2017.

ITEM 13.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

Information required by this item is incorporated herein by reference to the sections captioned “Corporate Governance And Board Matters – Review, Approval or Ratification of Transactions with Related Persons,” “Corporate Governance And Board Matters – Certain Relationships and Transactions,” and “Corporate Governance And Board Matters – Director Independence” in Praxair’s Proxy Statement for the Annual Meeting of Shareholders to be held on April 25, 2017.

ITEM 14.     PRINCIPAL ACCOUNTING FEES AND SERVICES

Information required by this item is incorporated herein by reference to the section captioned “Audit Matters - Fees Paid to the Independent Auditor” and "Audit Matters - Non-Audit Engagement Services Pre-Approval Policy" in Praxair’s Proxy Statement for the Annual Meeting of Shareholders to be held on April 25, 2017.

105

PART IV

ITEM 15.     EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a) The following documents are filed as part of this report:

(1) The company’s 2016 Consolidated Financial Statements and the Report of the Independent Registered Public Accounting Firm are included in Part II, Item 8. Financial Statements and Supplementary Data.

(2) Financial Statement Schedules – All financial statement schedules have been omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.

(3) Exhibits – The exhibits filed as part of this Annual Report on Form 10-K are listed in the accompanying index.

106

SIGNATURES

Praxair, Inc. and Subsidiaries

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		PRAXAIR, INC.
		(Registrant)
Date: March 1, 2017	By:	/s/   KELCEY E. HOYT
		Kelcey E. Hoyt Vice President and Controller (On behalf of the Registrant and as Chief Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on March 1, 2017.

/s/    STEPHEN F. ANGEL	/s/    MATTHEW J. WHITE	/s/    OSCARDE PAULA  BERNARDES
Stephen F. Angel Chairman, President, Chief Executive Officer and Director	Matthew J. White Senior Vice President and Chief Financial Officer	Oscar de Paula Bernardes Director
/s/    NANCE K. DICCIANI	/s/    EDWARD G. GALANTE	/s/    IRA D. HALL
Nance K. Dicciani Director	Edward G. Galante Director	Ira D. Hall Director
/s/    RAYMOND W. LEBOEUF	/s/    LARRY D. MCVAY	/s/    MARTIN H. RICHENHAGEN
Raymond W. LeBoeuf Director	Larry D. McVay Director	Martin H. Richenhagen Director
/s/    WAYNE T. SMITH	/s/    ROBERT L. WOOD
Wayne T. Smith Director	Robert L. Wood Director

107

INDEX TO EXHIBITS

Praxair, Inc. and Subsidiaries

Exhibit No.	Description
3.01	Restated Certificate of Incorporation of Praxair, Inc. as filed with the Secretary of State of the State of Delaware on April 27, 2012 (Filed as Exhibit 3.01 to the Company’s Current Report on Form 8-K dated April 30, 2012, Filing No. 1-11037, and incorporated herein by reference).
3.02	Amended and Restated By-Laws of Praxair, Inc. (Filed as Exhibit 3.02 to the Company’s Current Report on Form 8-K dated January 29, 2016, Filing No. 1-11037, and incorporated herein by reference).
3.03	Certificate of Designations for the 7.48% Cumulative Preferred Stock, Series A (Filed on February 13, 1997 as Exhibit 3.3 to Amendment #1 to the Company’s Registration Statement on Form S-3, Registration No. 333-18141).
3.04	Certificate of Designations for the 6.75% Cumulative Preferred Stock, Series B (Filed on February 13, 1997 as Exhibit 3.4 to Amendment #1 to the Company’s Registration Statement on Form S-3, Registration No. 333-18141).
4.01	Common Stock Certificate (Filed as Exhibit 4.01 to the Company’s Registration Statement on Form 10, Filing No. 1-11037, and incorporated herein by reference).
4.02a	Indenture, dated as of July 15, 1992, between Praxair, Inc. and U.S. Bank National Association, as the ultimate successor trustee to Bank of America, Illinois, formerly Continental Bank, National Association (Filed as Exhibit 4 to the Company’s Current Report on Form 8-K dated March 19, 2007, Filing No. 1-11037, and incorporated herein by reference).
4.02b	Form of Subordinated Indenture was filed as Exhibit 4.3 to the Company’s Form S-3 filed on May 12, 2015, and is incorporated herein by reference.
4.03	Copies of the agreements relating to long-term debt which are not required to be filed as exhibits to this Annual Report on Form 10-K will be furnished to the Securities and Exchange Commission upon request.
4.04	Series A Preferred Stock Certificate (Filed on February 7, 1997 as Exhibit 4.3 to Amendment #1 to the Company’s Registration Statement on Form S-3, Registration No. 333-18141).
4.05	Series B Preferred Stock Certificate (Filed on February 7, 1997 as Exhibit 4.4 to Amendment #1 to the Company’s Registration Statement on Form S-3, Registration No. 333-18141).
*10.01	Restated 2002 Praxair, Inc. Long Term Incentive Plan (Filed as Exhibit 10.01 to the Company’s 2003 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
*10.01a	Amendment, dated as of October 24, 2006, to the Amended and Restated 2002 Praxair, Inc. Long Term Incentive Plan (Filed as Exhibit 10.01a to the Company’s 2006 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
*10.01b	Amendment, dated as of January 23, 2007, to the Amended and Restated 2002 Praxair, Inc. Long Term Incentive Plan (Filed as Exhibit 10.01b to the Company’s 2006 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
*10.01c	Form of Standard Option Award under the 2002 Praxair, Inc. Long Term Incentive Plan (Filed as Exhibit 10.01c to the Company’s 2007 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
*10.01d	Form of Transferable Option Award under the 2002 Praxair, Inc. Long Term Incentive Plan (Filed as Exhibit 10.01d to the Company’s 2007 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).

108

Exhibit No.	Description
*10.02	Form of Executive Severance Compensation Agreement effective January 1, 2009 (Filed as Exhibit 10.02 to the Company’s 2008 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
*10.02a	Form of Amendment, effective December 31, 2012, to Executive Severance Compensation Agreements that were effective January 1, 2009 (Filed as Exhibit 10.1 to the Company's Current Report on Form 8-K dated December 14, 2012, Filing No. 1-11037, and incorporated herein by reference.
*10.02b	Form of Executive Severance Compensation Agreement effective January 1, 2010 (Filed as Exhibit 10.02 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2010, Filing No. 1-11037, and incorporated herein by reference).
*10.02c	Form of Amendment, effective December 31, 2012, to Executive Severance Compensation Agreements that were effective January 1, 2010 (Filed as Exhibit 10.02c to the Company’s 2012 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
*10.02d	Form of Executive Severance Compensation Agreement effective January 1, 2013 (Filed as Exhibit 10.02d to the Company’s 2012 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
*10.03	Praxair, Inc. Variable Compensation Plan amended and restated effective April 24, 2012 (Filed as Exhibit 10.01 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, Filing No. 1-11037, and incorporated herein by reference).
*10.04	Amended and Restated 1995 Stock Option Plan for Non-Employee Directors (Filed as Exhibit 10.04 to the Company’s 2003 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
*10.04a	First Amendment, dated as of October 24, 2006, to the Amended and Restated 1995 Stock Option Plan for Non-Employee Directors (Filed as Exhibit 10.04a to the Company’s 2006 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
*10.04b	2005 Equity Compensation Plan for Non-Employee Directors of Praxair, Inc. amended and restated effective January 26, 2010 (Filed as Exhibit 10.04b to the Company’s 2009 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
*10.04c	Form of Option Award under the 2005 Equity Compensation Plan for Non-Employee Directors of Praxair, Inc (Filed as Exhibit 10.04a to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2005, Filing No. 1-11037, and incorporated herein by reference).
*10.05a	Praxair, Inc. Supplemental Retirement Income Plan A effective January 1, 2008 (Filed as Exhibit 10.05a to the Company’s 2008 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
*10.05b	First amendment to the Praxair, Inc. Supplemental Retirement Income Plan A effective January 1, 2010 (Filed as Exhibit 10.05b to the Company’s 2009 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
*10.05c	Second Amendment to Praxair, Inc. Supplemental Retirement Income Plan A effective February 28, 2017 is filed herewith.
*10.05d	Praxair, Inc. Supplemental Retirement Income Plan B amended and restated effective December 31, 2007 (Filed as Exhibit 10.05b to the Company’s 2008 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
*10.05e	First amendment to the Praxair, Inc. Supplemental Retirement Income Plan B effective January 1, 2010 (Filed as Exhibit 10.05d to the Company’s 2009 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
*10.05f	Second Amendment to Praxair, Inc. Supplemental Retirement Income Plan B effective July 1, 2012 (Filed as Exhibit 10.05e to the Company’s 2012 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
*10.05g	Third Amendment to Praxair, Inc. Supplemental Retirement Income Plan B effective February 28, 2017 is filed herewith.

109

Exhibit No.	Description
*10.05h	Praxair, Inc. Equalization Benefit Plan amended and restated effective December 31, 2007 (Filed as Exhibit 10.05c to the Company’s 2008 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
*10.05i	First amendment to the Praxair, Inc. Equalization Benefit Plan effective January 1, 2010 (Filed as Exhibit 10.05f to the Company’s 2009 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
*10.05j	Second Amendment to the Praxair, Inc. Equalization Benefit Plan effective February 28, 2017 is filed herewith.
*10.06	Praxair, Inc. Director’s Fees Deferral Plan amended and restated effective January 26, 2010 (Filed as Exhibit 10.06 to the Company’s 2009 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
*10.07	Praxair, Inc. Compensation Deferral Program Amended and Restated as of July 15, 2014 (Filed as Exhibit 10.01 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, Filing No. 1-11037, and incorporated herein by reference).
*10.07a	First Amendment to the Praxair Compensation Deferral Program effective February 28, 2017 is filed herewith.
10.08	Transfer Agreement dated January 1, 1989, between Union Carbide Corporation and the registrant (Filed as Exhibit 10.06 to the Company’s Registration Statement on Form 10, Filing No. 1-11037, and incorporated herein by reference).
10.08a	Amendment No. 1 dated as of December 31, 1989, to the Transfer Agreement (Filed as Exhibit 10.07 to the Company’s Registration Statement on Form 10, Filing No. 1-11037, and incorporated herein by reference).
10.08b	Amendment No. 2 dated as of July 2, 1990, to the Transfer Agreement (Filed as Exhibit 10.08 to the Company’s Registration Statement on Form 10, Filing No. 1-11037, and incorporated herein by reference).
10.08c	Amendment No. 3 dated as of January 2, 1991, to the Transfer Agreement (Filed as Exhibit 10.09 to the Company’s Registration Statement on Form 10, Filing No. 1-11037, and incorporated herein by reference).
10.09	Transfer Agreement dated January 1, 1989, between Union Carbide Corporation and Union Carbide Coatings Service Corporation (Filed as Exhibit 10.14 to the Company’s Registration Statement on Form 10, Filing No. 1-11037, and incorporated herein by reference).
10.09a	Amendment No. 1 dated as of December 31, 1989, to the Transfer Agreement (Filed as Exhibit 10.15 to the Company’s Registration Statement on Form 10, Filing No. 1-11037, and incorporated herein by reference).
10.09b	Amendment No. 2 dated as of July 2, 1990, to the Transfer Agreement (Filed as Exhibit 10.16 to the Company’s Registration Statement on Form 10, Filing No. 1-11037, and incorporated herein by reference).
10.10	Additional Provisions Agreement dated as of June 4, 1992 (Filed as Exhibit 10.21 to the Company’s Registration Statement on Form 10, Filing No. 1-11037, and incorporated herein by reference).
10.11	Amended and Restated Realignment Indemnification Agreement dated as of June 4, 1992 (Filed as Exhibit 10.23 to the Company’s Registration Statement on Form 10, Filing No. 1-11037, and incorporated herein by reference).
10.12	Environmental Management, Services and Liabilities Allocation Agreement dated as of January 1, 1990 (Filed as Exhibit 10.13 to the Company’s Registration Statement on Form 10, Filing No. 1-11037, and incorporated herein by reference).
10.12a	Amendment No. 1 to the Environmental Management, Services and Liabilities Allocation Agreement dated as of June 4, 1992 (Filed as Exhibit 10.22 to the Company’s Registration Statement on Form 10, Filing No. 1-11037, and incorporated herein by reference).

110

Exhibit No.	Description
10.13	Danbury Lease-Related Services Agreement dated as of June 4, 1992 (Filed as Exhibit 10.24 to the Company’s Registration Statement on Form 10, Filing No. 1-11037, and incorporated herein by reference).
10.13a	First Amendment to Danbury Lease-Related Services Agreement (Filed as Exhibit 10.13a to the Company’s 1994 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
10.14	Danbury Lease Agreements, as amended (Filed as Exhibit 10.26 to the Company’s Registration Statement on Form 10, Filing No. 1-11037, and incorporated herein by reference).
10.14a	Second Amendment to Linde Data Center Lease (Danbury) (Filed as Exhibit 10.14a to the Company’s 1993 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
10.14b	Fourth Amendment to Carbide Center Lease (Filed as Exhibit 10.14b to the Company’s 1993 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
10.14c	Third Amendment to Linde Data Center Lease (Filed as Exhibit 10.14c to the Company’s 1994 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
10.14d	Fifth Amendment to Carbide Center Lease (Filed as Exhibit 10.14d to the Company’s 1994 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
10.14e	Sixth Amendment to Carbide Center Lease (Filed as Exhibit 10.14e to the Company’s 2004 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
10.15	Employee Benefits Agreement dated as of June 4, 1992 (Filed as Exhibit 10.25 to the Company’s Registration Statement on Form 10, Filing No. 1-11037, and incorporated herein by reference).
10.15a	First Amendatory Agreement to the Employee Benefits Agreement (Filed as Exhibit 10.15a to the Company’s 1994 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
10.16	Tax Disaffiliation Agreement dated as of June 4, 1992 (Filed as Exhibit 10.20 to the Company’s Registration Statement on Form 10, Filing No. 1-11037, and incorporated herein by reference).
10.17	Credit Agreement dated as of December 19, 2014 among Praxair, Inc. and the Eligible Subsidiaries Referred to therein, the Lenders listed therein, and Bank of America, N.A., as Administrative Agent, Citibank N.A., Deutsche Bank Securities Inc. and HSBC Securities (USA) Inc., as Syndication Agents was filed as Exhibit 10.1 to the Company’s current report on Form 8-K, dated December 22, 2014, Filing No. 1-11037, and is incorporated herein by reference.
*10.18	Praxair, Inc. Plan for Determining Performance-Based Awards Under Section 162(m) (Filed as Exhibit 10.01 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, Filing No. 1-11037, and incorporated herein by reference).
*10.19	Service Credit Arrangement for Stephen F. Angel dated May 23, 2007 was filed as Exhibit 10.20 to the Company’s Form 8-K filed on May 24, 2007 and is incorporated herein by reference.
*10.20	2009 Praxair, Inc. Long Term Incentive Plan as amended on April 27, 2010, January 25, 2011 and October 23, 2012 was filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K dated December 14, 2012 Filing No. 1-11037, and incorporated herein by reference.
*10.21	Form of Standard Option Award under the 2009 Praxair, Inc. Long Term Incentive Plan (Filed as Exhibit 10.22 to the Company’s 2009 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
*10.22	Form of Transferable Option Award under the 2009 Praxair, Inc. Long Term Incentive Plan (Filed as Exhibit 10.23 to the Company’s 2009 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).

111

Exhibit No.	Description
*10.23	Form of Restricted Stock Unit Award under the 2009 Praxair, Inc. Long Term Incentive Plan (Filed as Exhibit 10.24 to the Company’s 2009 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
*10.24a	Form of Performance Share Unit Award under the 2009 Praxair, Inc. Long Term Incentive Plan for grants made from 2010-2013 (Filed as Exhibit 10.25 to the Company’s 2009 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
*10.24b	Form of Performance Share Unit Award under the 2009 Praxair, Inc. Long Term Incentive Plan for grants made in 2013-2014 with Earnings Per Share performance metrics (Filed as Exhibit 10.24b to the Company’s 2012 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
*10.24c	Form of Performance Share Unit Award under the 2009 Praxair, Inc. Long Term Incentive Plan for grants made in 2013-2014 with Return on Capital performance metrics (Filed as Exhibit 10.24c to the Company’s 2012 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
*10.25	Amended and Restated 2009 Praxair, Inc. Long Term Incentive Plan (Filed as Exhibit 10.01 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, Filing No. 1-11037, and incorporated herein by reference).
*10.26	Form of Transferable Option Award under the Amended and Restated 2009 Praxair, Inc. Long Term Incentive Plan for grants made in 2015 and thereafter (Filed as Exhibit 10.26 to the Company’s 2014 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
*10.27	Form of Restricted Stock Unit Award under the Amended and Restated 2009 Praxair, Inc. Long Term Incentive Plan for grants made in 2015 and thereafter (Filed as Exhibit 10.27 to the Company’s 2014 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
*10.28a	Form of Performance Share Unit Award under the Amended and Restated 2009 Praxair, Inc. Long Term Incentive Plan for grants made in 2015 and thereafter with Earnings Per Share performance metrics (Filed as Exhibit 10.28A to the Company’s 2014 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
*10.28b	Form of Performance Share Unit Award under the Amended and Restated 2009 Praxair, Inc. Long Term Incentive Plan for grants made in 2015 and thereafter with Return on Capital performance metrics (Filed as Exhibit 10.28B to the Company’s 2014 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
*10.28c	Form of Performance Share Unit Award under the Amended and Restated 2009 Praxair, Inc. Long Term Incentive Plan for grants made in 2016 and thereafter with Total Shareholder Return performance metrics (Filed as Exhibit 10.28C to the Company’s 2015 Annual Report on Form 10-K, Filing No. 1-11037, and incorporated herein by reference).
*10.28d	Form of Non-Employee Director Restricted Stock Unit Award under the Amended and Restated 2009 Praxair, Inc. Long Term Incentive Plan (Filed as Exhibit 10.01 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, Filing No. 1-11037, and incorporated herein by reference.
10.29	Form of Standard Underwriting Provisions was filed as Exhibit 1.1 to the Company’s Registration Statement on Form S-3 filed on May 12, 2015, and is incorporated herein by reference.
10.30	Terms Agreement dated March 4, 2014 among the Company and Credit Suisse Securities (Europe) Limited, Deutsche Bank AG, London Branch and HSBC Bank plc, acting on behalf of the several underwriters for the issuance and sale of €600,000,000 1.500% Notes due 2020, was filed as Exhibit 1 to the Company’s current report on Form 8-K dated March 5, 2014, Filing No. 1-11037, and incorporated herein by reference.

112

Exhibit No.	Description
10.31	Terms Agreement dated November 21, 2014 among the Company and Citigroup Global Markets Limited, Deutsche Bank AG, London Branch, HSBC Bank plc and Merrill Lynch International, acting on behalf of the several underwriters for the issuance and sale of €500,000,000 1.625% Notes due 2025, was filed as Exhibit 1 to the Company’s current report on Form 8-K dated November 24, 2014, Filing No. 1-11037, and incorporated herein by reference.
10.32	Terms Agreement dated September 21, 2015 among the Company and Citigroup Global Markets Inc., Deutsche Bank Securities Inc., HSBC Securities (USA) Inc. and Mitsubishi UFJ Securities (USA), acting on behalf of the several underwriters for the issuance and sale of $300,000,000 2.250% Notes due 2020 and $450,000,000 3.200% Notes due 2026, was filed as Exhibit 1 to the Company’s current report on Form 8-K dated September 24, 2015, Filing No. 1-11037, and incorporated herein by reference.
10.33	Terms Agreement dated February 4, 2016 among the Company and Credit Suisse Securities (Europe) Limited, Deutsche Bank AG, London Branch and Merrill Lynch International, acting on behalf of the several underwriters for the issuance and sale of €550,000,000 1.200% Notes due 2024, was filed as Exhibit 1.1 to the Company’s current report on Form 8-K dated February 8, 2016, Filing No. 1-11037, and incorporated herein by reference.
10.34	Terms Agreement dated February 4, 2016 among the Company and J.P. Morgan Securities LLC, Mizuho Securities USA Inc. and Wells Fargo Securities, LLC, acting on behalf of the several underwriters for the issuance and sale of $275,000,000 3.200% Notes due 2026, was filed as Exhibit 1.2 to the Company’s current report on Form 8-K dated February 8, 2016, Filing No. 1-11037, and incorporated herein by reference.
12.01	Computation of Ratio of Earnings to Fixed Charges.
21.01	Subsidiaries of Praxair, Inc.
23.01	Consent of Independent Registered Public Accounting Firm.
31.01	Rule 13a-14(a) Certification
31.02	Rule 13a-14(a) Certification
32.01	Section 1350 Certification (such certifications are furnished for the information of the Commission and shall not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act).
32.02	Section 1350 Certification (such certifications are furnished for the information of the Commission and shall not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act).
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase

Copies of exhibits incorporated by reference can be obtained from the SEC and are located in SEC File No. 1-11037.

*    Indicates a management contract or compensatory plan or arrangement.

113

EX-10.05C

Praxair, Inc. and Subsidiaries

EXHIBIT 10.05c

SECOND AMENDMENT TO THE

PRAXAIR, INC.

SUPPLEMENTAL RETIREMENT INCOME PLAN A

(EFFECTIVE JANUARY 1, 2008)

Article III, Section 3 of the Praxair, Inc. Supplemental Retirement Income Plan A (Effective January 1, 2008) is hereby amended, effective as of February 28, 2017, to amend and restate the first paragraph thereof in its entirety as follows:

“In the event of a Change in Control, all SRIP A Benefits not yet paid under this Plan shall become immediately vested and shall be paid in a lump sum payment, calculated as otherwise described herein, as soon as administratively possible following the date of such Change in Control, but no later than 90 days after such date. Notwithstanding any provision of this Plan to the contrary, a Participant (including a Participant who has previously separated from service and is receiving payment of his or her SRIP A Benefit) who satisfies criteria established by the Committee or the Corporation’s Chief Human Resources Officer (the “CHRO”), as determined in the sole discretion of the Committee or the CHRO, may elect, at the time and in the manner designated by the Committee or the CHRO, to waive the right to receive payment of his or her unpaid SRIP A Benefit upon a Change in Control and such waiver shall be considered the deletion of such Participant’s Change in Control payment event as contemplated under Treasury Regulation Section 1.409A-2(b)(6). Any Participant who makes such election shall receive payment of his or her SRIP A Benefits at such time and in such manner as otherwise provided under the Plan. Any such election must be consistent with the election made by the Participant with respect to his or her benefits, if any, under the EPB and/or SRIP B, and shall be valid if, and only if, made at least one year prior to the effective date of any Change in Control. For this purpose, “Change in Control” shall mean the occurrence of any one of the following events with respect to the Corporation:”

PRAXAIR, INC.

By:_________________________________

Vice President,

Chief Human Resources Officer

Date:________________________________

EX-10.05G

Praxair, Inc. and Subsidiaries

EXHIBIT 10.05g

THIRD AMENDMENT TO THE

PRAXAIR, INC.

SUPPLEMENTAL RETIREMENT INCOME PLAN B

(AS AMENDED AND RESTATED EFFECTIVE DECEMBER 31, 2007)

Article III, Section 3 of the Praxair, Inc. Supplemental Retirement Income Plan B (As Amended and Restated Effective December 31, 2007) is hereby amended, effective as of February 28, 2017, to amend and restate the first paragraph thereof in its entirety as follows:

“In the event of a Change in Control, all SRIP B Benefits not yet paid under this Plan shall become immediately vested and shall be paid in a lump sum payment, calculated as otherwise described herein, as soon as administratively possible following the date of such Change in Control, but no later than 90 days after such date. Notwithstanding any provision of this Plan to the contrary, a Participant (including a Participant who has previously separated from service and is receiving payment of his or her SRIP B Benefit) who satisfies criteria established by the Committee or the Corporation’s Chief Human Resources Officer (the “CHRO”), as determined in the sole discretion of the Committee or the CHRO, may elect, at the time and in the manner designated by the Committee or the CHRO, to waive the right to receive payment of his or her unpaid SRIP B Benefit upon a Change in Control and such waiver shall be considered the deletion of such Participant’s Change in Control payment event as contemplated under Treasury Regulation Section 1.409A-2(b)(6). Any Participant who makes such election shall receive payment of his or her SRIP B Benefits at such time and in such manner as otherwise provided under the Plan. Any such election must be consistent with the election made by the Participant with respect to his or her benefits, if any, under the EPB and/or SRIP A, and shall be valid if, and only if, made at least one year prior to the effective date of any Change in Control. For this purpose, “Change in Control” shall mean the occurrence of any one of the following events with respect to the Corporation:”

PRAXAIR, INC.

By:_________________________________

Vice President,

Chief Human Resources Officer

Date:________________________________

EX-10.05J

Praxair, Inc. and Subsidiaries

EXHIBIT 10.05j

SECOND AMENDMENT TO THE

PRAXAIR, INC.

EQUALIZATION BENEFIT PLAN

(AS AMENDED AND RESTATED EFFECTIVE DECEMBER 31, 2007)

Article III, Section 3 of the Praxair, Inc. Equalization Benefit Plan (As Amended and Restated Effective December 31, 2007) is hereby amended, effective as of February 28, 2017, to amend and restate the first paragraph thereof in its entirety as follows:

“In the event of a Change in Control, all EBP Benefits not yet paid under this Plan shall become immediately vested and shall be paid in a lump sum payment, calculated as otherwise described herein, as soon as administratively possible following the date of such Change in Control, but no later than 90 days after such date. Notwithstanding any provision of this Plan to the contrary, a Participant (including a Participant who has previously separated from service and is receiving payment of his or her EPB Benefit) who satisfies criteria established by the Committee or the Corporation’s Chief Human Resources Officer (the “CHRO”), as determined in the sole discretion of the Committee or the CHRO, may elect, at the time and in the manner designated by the Committee or the CHRO, to waive the right to receive payment of his or her unpaid EBP Benefit upon a Change in Control and such waiver shall be considered the deletion of such Participant’s Change in Control payment event as contemplated under Treasury Regulation Section 1.409A-2(b)(6). Any Participant who makes such election shall receive payment of his or her EBP Benefits at such time and in such manner as otherwise provided under the Plan. Any such election must be consistent with the election made by the Participant with respect to his or her benefits, if any, under the SRIP A and/or SRIP B, and shall be valid if, and only if, made at least one year prior to the effective date of any Change in Control. For this purpose, “Change in Control” shall mean the occurrence of any one of the following events with respect to the Corporation:”

PRAXAIR, INC.

By:_________________________________

Vice President,

Chief Human Resources Officer

Date:________________________________

EX-10.07A

Praxair, Inc. and Subsidiaries

EXHIBIT 10.07a

FIRST AMENDMENT

TO THE

PRAXAIR COMPENSATION DEFERRAL PROGRAM

Section 5.1(f) of the Praxair Compensation Deferral Program, Amended and Restated as of July 15, 2014, is hereby amended in its entirety, effective as of February 28, 2017, as set forth below:

“(f)Notwithstanding any provision in this Plan to the contrary, all Praxair Contributions shall fully vest and each Participant shall receive a lump sum payment of his or her entire benefit under this Plan (and any election to receive installment payments shall be disregarded) at such time as the Board determines that a Change in Control has occurred. Such payment shall be made in full within 45 days after the Change in Control; provided, however, that a Participant who satisfies criteria established by the Committee or the Corporation’s Chief Human Resources Officer (the “CHRO”), as determined in the sole discretion of the Committee or the CHRO, may elect, at the time and in the manner designated by the Committee or the CHRO, to waive the right to receive a lump sum payment of his or her entire Plan benefit upon a Change in Control and such waiver shall be considered the deletion of such Participant’s Change in Control payment event as contemplated under Treasury Regulation Section 1.409A-2(b)(6). Any Participant who makes such election shall receive payment of his or her Plan benefit at such time and in such form as otherwise provided under the Plan. Any such election shall be valid if, and only if, made at least one year prior to the effective date of any Change in Control, and shall not count as a subsequent election as described in Section 5.5.”

PRAXAIR, INC.

By:_________________________________

Vice President,

Chief Human Resources Officer

Date:______________________________

EX-12.01

RATIO OF EARNINGS TO FIXED CHARGES
				Praxair, Inc. and Subsidiaries
										Exhibit 12.01
	Year Ended December 31,
(Dollar amounts in millions, except ratios)	2016			2015			2014			2013			2012
Pre-tax income from continuing operations before adjustment for
noncontrolling interests in consolidated subsidiaries or income or
loss from equity investees	$	2,048		$	2,160		$	2,395		$	2,447		$	2,296
Capitalized interest	(34		)	(33		)	(38		)	(69		)	(70		)
Depreciation of capitalized interest	19			22			27			20			20
Dividends from less than 50%-owned companies carried at equity	8			11			6			10			7
Adjusted pre-tax income from continuing operations before adjustment
for noncontrolling interests in consolidated subsidiaries or income
or loss from equity investees	$	2,041		$	2,160		$	2,390		$	2,408		$	2,253
Fixed charges
Interest on long-term and short-term debt	$	190		$	161		$	213		$	178		$	141
Capitalized interest	34			33			38			69			70
Rental expenses representative of an interest factor	47			47			52			43			39
Total fixed charges	$	271		$	241		$	303		$	290		$	250
Adjusted pre-tax income from continuing operations before adjustment
for noncontrolling interests in consolidated subsidiaries or income or
loss from equity investees plus total fixed charges	$	2,312		$	2,401		$	2,693		$	2,698		$	2,503
RATIO OF EARNINGS TO FIXED CHARGES	8.5			10.0			8.9			9.3			10.0

EX-21.01

SUBSIDIARIES OF PRAXAIR, INC.

Praxair, Inc. and Subsidiaries

EXHIBIT 21.01

The following is a list of the Company's subsidiaries as of December 31, 2016.

	Place of Incorporation
10 Riverview Drive LLC	Delaware
Acetylene Oxygen Company	Texas
Almacenes Geneva S.A.	Panama
Almacenes Geneva-David, S.A.	Panama
Antwerpse Chemische Bedrijven (LCB) N. V.	Belgium
Argon (Isotank) Limited	Scotland
Beijing Praxair Huashi Carbon Dioxide Co., Ltd.	China
Beijing Praxair, Inc.	China
Coatec Gesellschaft für Oberflächenveredelung mbH	Germany
Consultora Rynuter S.A.	Uruguay
Dablioeme Participacoes Ltda	Brazil
Distribuciones Invegas SCA	Venezuela
Dominion Gas Asia Pacific Pte Limited	Singapore
Dominion Gas Asia Pte Limited	Singapore
Dominion Oilfield Services Limited	Scotland
Dominion Oilfield Services Limited	Ghana
Dominion Technology Gases Holdings Limited	Scotland
Dominion Technology Gases Investment Limited	Scotland
Dominion Technology Gases Limited	Scotland
Domolife S.r.l.	Italy
Dryce S.r.l.	Italy
Empresas Geneva, S.A.	Panama
Famex Comercio Atacadista de Gas Carbonico Ltda.	Brazil
Famex Rio Comercio de Gas Carbonico e Equipamentos de Combate a Incendio Ltda.	Brazil
Gama Gases Especials Ltda.	Brazil
Garland Welding Supply Company	Texas
Gases de Ensenada S.A.	Argentina
Gases Industriales, S.A.	Panama
Gases Tachira S.A.	Venezuela
GemGas S.r.l.	Italy
Global Gas Supplies (Aberdeen) Limited	Scotland
Global Gas Supplies Limited	Scotland
GNC Matco Compressco de Gus Natural Ltda.	Brazil
GNL Gemini Comercializacao e Logistica de Gas Ltda.	Brazil
Grenslandgas G.m.b.H.	Germany
Great Lakes Street, Inc.	Delaware
Helium Centre Pte. Ltd.	Singapore
Industria Paraguaya de Gases S.r l	Paraguay
Industria Venezoelana de Gas INVEGAS, S.C.A.	Venezuela
Inmobiliaria Radial, S.A.	Panama
Inversionista Metropolitana, S.A.	Panama
Joint Stock Company “Volgograd Oxygen Plant”	Russia
Kelvin Finance Company Limited	Ireland

Kosmoid Finance UC	Ireland
Kunshan Praxair Co., Ltd.	China
Limited Liability Company Praxair Azot Togliatti	Russia
Limited Liability Company Praxair Titanium Valley	Russia
Limited Liability Company Praxair Rus	Russia
Limited Liability Company Praxair Volgograd	Russia
Liquid Carbonic Corporation	Delaware
Liquid Carbonic del Paraguay S.A.	Paraguay
Liquid Carbonic of Oklahoma, Inc.	Oklahoma
Liquido Carbonico Colombiana S.A.	Colombia
Madison Gas LLC	Delaware
Malaysian Industrial Gas Company Sdn. Bhd.	Malaysia
Medical Gases S.r.l.	Argentina
Nanjing Praxair Nanlian Industrial Gases Co., Ltd.	China
Nitropet, S.A. de C.V.	Mexico
NOxBOX Ltd.	United Kingdom
NuCO2 Inc.	Delaware
NuCO2 Management LLC	Delaware
NuCO2 LLC	Delaware
NuCO2 Supply LLC	Delaware
Nuova Pescarito S.r.l.	Italy
Old Danford S.A.	Uruguay
Oxigenos de Colombia Ltda.	Colombia
Oximesa S.L.	Spain
PG Technologies, LLC	Delaware
PG Technologies Pte. Ltd.	Singapore
Praxair & M.I. Services, S.r.l.	Italy
Praxair (Anhui) Industrial Gases Co., Ltd.	China
Praxair (Beijing) Industrial Gases Co., Ltd.	China
Praxair (Beijing) Semiconductor Gases Co., Ltd.	China
Praxair (China) Investment Co., Ltd.	China
Praxair (Guangzhou) Industrial Gases Co., Ltd.	China
Praxair (Hainan) Indusrial Gases Co., Ltd.	China
Praxair (Hefei) Industrial Gases Co., Ltd.	China
Praxair (Huizhou) Industrial Gases Limited	China
Praxair (Jiaxing) Industrial Gases Co., Ltd.	China
Praxair (Jining) Industrial Gases Co., Ltd.	China
Praxair (Nanjing) Carbon Dioxide Co., Ltd.	China
Praxair (Shanghai) Co., Ltd.	China
Praxair (Shanghai) Industrial Gases Co., Ltd.	China
Praxair (Shanghai) Semiconductor Gases Co., Ltd.	China
Praxair (Thailand) Company Limited	Thailand
Praxair (Wuhan), Inc.	China
Praxair (Yangzhou) Application Technology Co., Ltd.	China
Praxair (Yangzhou) Industrial Gases Co., Ltd.	China
Praxair (Zhengjing) Industrial Gas Co. Ltd.	China
Praxair Alberta Ltd.	Alberta
Praxair Argentina S.R.L.	Argentina
Praxair Asia, Inc.	Delaware
Praxair Bahrain B.S.C.	Kingdom of Bahrain

Praxair B.V.	Netherlands
Praxair Bolivia Srl	Luxembourg
Praxair Canada Inc.	Canada
Praxair Chemax Semiconductor Materials Co. Ltd.	Taiwan
Praxair Chile Ltda.	Chile
Praxair Colonia Limitada	Uruguay
Praxair Consultoria y Administracion S de RL de CV	Mexico
Praxair Costa Rica, S.A.	Costa Rica
Praxair Danmark A/S	Denmark
Praxair Deutschland GmbH	Germany
Praxair Deutschland Holding GmbH & Co. KG	Germany
Praxair Distribution, Inc.	Delaware
Praxair do Brasil Ltda.	Brazil
Praxair Espana, S.L.	Spain
Praxair Euroholding, S.L.	Spain
Praxair Fray Bentos S.C.A.	Uruguay
Praxair Gas B.V.	Netherlands
Praxair Gases Industriales Ltda	Columbia
Praxair Gases France SAS	France
Praxair Gases Ireland Limited	Ireland
Praxair Gases UK Ltd.	United Kingdom
Praxair Gulf Industrial Gases LLC	Abu Dhabi
Praxair Holding Latinoamerica (Sarl)	Luxembourg
Praxair Holdings International, Inc.	Delaware
Praxair Huayi (Chongqing) Industrial Gases Co. Ltd.	China
Praxair Hydrogen Supply, Inc.	Delaware
Praxair India Private Limited	India
Praxair International Finance UC	Ireland
Praxair Inversiones SRL	Peru
Praxair Investments B.V.	Netherlands
Praxair Italia S.R.L.	Italy
Praxair K.K.	Japan
Praxair Korea Company, Limited	Korea
Praxair Latin America Holdings LLC	Delaware
Praxair Luxembourg S.a.r.L.	Luxembourg
Praxair Meishan (Nanjin) Industrial Gases Co., Ltd.	China
Praxair Mexico, S. de R.L. de C.V.	Mexico
Praxair MRC S.A.S.	France
Praxair Norge AS	Norway
Praxair N.V.	Belgium
Praxair Offshore Services Ltd.	United Kingdom
Praxair Pacific Ltd.	Mauritius
Praxair Panama, S.A.	Panama
Praxair Partnership	Delaware
Praxair PC Partnership	Canada
Praxair Peru S.R.L.	Peru
Praxair PHP S.A.S.	France
Praxair Plainfield, Inc.	Delaware
Praxair Portugal Gases S.A.	Portugal
Praxair Puerto Rico B. V.	Netherlands

Praxair Puerto Rico LLC	Delaware
Praxair Qingdao Industrial Gases Co., Ltd.	China
Praxair Republica Dominicana, SRL	Dominican Republic
Praxair Samara LLC	Russia
Praxair Scandinavia Holding AS	Norway
Praxair Ship AS	Norway
Praxair S.r.l.	Italy
Praxair S.T. Technology, Inc.	Delaware
Praxair Services Canada Inc.	Ontario
Praxair Services, Inc.	Texas
Praxair Shanghai Meishan Inc.	China
Praxair Shaogang Co., Ltd.	China
Praxair Sp. Zo. o.	Poland
Praxair Surface Technologies (Changzhou) Co. Ltd.	China
Praxair Surface Technologies (Europe) S.A.	Switzerland
Praxair Surface Technologies Co., Ltd.	Korea
Praxair Surface Technologies do Brasil Ltda.	Brazil
Praxair Surface Technologies G.m.b.H.	Germany
Praxair Surface Technologies K.K.	Japan
Praxair Surface Technologies Limited	United Kingdom
Praxair Surface Technologies Montreal L.P.	New Brunswick
Praxair Surface Technologies Pte. Ltd.	Singapore
Praxair Surface Technologies S.A.S.	France
Praxair Surface Technologies, Inc.	Delaware
Praxair Sverige AB	Sweden
Praxair Switzerland GmbH	Switzerland
Praxair Taiwan Co., Ltd.	Taiwan
Praxair Technology, Inc.	Delaware
Praxair Uruguay Ltda.	Uruguay
Praxair Vertwaltungs GmbH	Germany
Production Praxair Canada Inc.	Canada
Remtechgaz t.o.v.	Ukraine
Rivoira Gas S.r.l.	Italy
Rivoira Operations S.r.l.	Italy
Rivoira Pharma S.r.l.	Italy
Rivoira Refrigerants S.r.l.	Italy
Rivoira S.p.A.	Italy
Rivoira Siad Servizi S. Con S.A.R.L.	Italy
Rivoira SUD S.R.L.	Italy
Sermatech International Canada Corp.	Delaware
Sermatech International Canada GP LLC	Delaware
Sermatech Korea Ltd.	Korea
Shanghai Praxair Baoshan Inc.	China
Shanghai Praxair-Yidian Inc.	China
Sierra Gas Metal Arc, Inc.	Delaware
Technical Gas S.A.	Venezuela
Tecnogas S/A	Peru
Technogas sp. Z o.o.	Poland
Thai Carbonic Company, Ltd.	Thailand
The Welding Center, Inc.	Illinois

Tianjin Praxair, Inc.	China
Tongling Praxair Co., Ltd.	China
Topaz Consultora S.A.	Uruguay
TWC Cryogenics, Inc.	Illinois
Vision Energy Group LLC	Oklahoma
Welder Services of Fort Wayne, Inc.	Indiana
Westair Cryogenics Company	Delaware
Westair Gas and Equipment, L.P.	Texas
White Martins e White Martins Comercio e Servicos SARL	Luxembourg
White Martins Gases Industriais do Nordeste S.A.	Brazil
White Martins Gases Industriais do Norte S.A.	Brazil
White Martins Gases Industriais Ltda.	Brazil
White Martins Pecem Gases Inudstriais Ltda	Brazil
White Martins Steel Gases Industrials Ltda.	Brazil
WM Steel Gases Industriais Ltda.	Brazil
WM Transporte de Gases Ltda	Brazil
Wyandotte Welding Supply, Inc.	Michigan
Yateem Oxygen W.L.L.	Bahrain

EX-23.01

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Praxair, Inc. and Subsidiaries

EXHIBIT 23.01

We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (No. 33-48480 and 333-204093) and on Form S-8 (No. 333-18113, 333-64608, 333-81248, 333-97191, 333-115192, 333-163005, 333-183147 and 333-204086) of Praxair, Inc. of our report dated March 1, 2017 relating to the financial statements and the effectiveness of internal control over financial reporting, which appears in this Form 10‑K.

/s/ PricewaterhouseCoopers LLP

Stamford, Connecticut

March 1, 2017

EX-31.01

RULE 13a-14(a) CERTIFICATIONS

Praxair, Inc. and Subsidiaries

EXHIBIT 31.01

I, Stephen F. Angel, certify that:

1. I have reviewed this Annual Report on Form 10-K of Praxair, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing equivalent function):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

March 1, 2017	By: /s/ Stephen F. Angel
	Stephen F. Angel
	Chairman, President
	Chief Executive Officer
	(principal executive officer)

EX-31.02

RULE 13a-14(a) CERTIFICATIONS

Praxair, Inc. and Subsidiaries

EXHIBIT 31.02

I, Matthew J. White, certify that:

1. I have reviewed this Annual Report on Form 10-K of Praxair, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing equivalent function):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

March 1, 2017	By: /s/ Matthew J. White
	Matthew J. White
	Senior Vice President and
	Chief Financial Officer
	(principal financial officer)

EX-32.01

SECTION 1350 CERTIFICATION

Praxair, Inc. and Subsidiaries

EXHIBIT 32.01

Pursuant to 18 U.S.C. § 1350, the undersigned officer of Praxair, Inc. (the “Company”), hereby certifies that the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

March 1, 2017	By: /s/ Stephen F. Angel
	Stephen F. Angel
	Chairman, President
	Chief Executive Officer
	(principal executive officer)

The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document.

A signed original of this written statement required by 18 U.S.C. § 1350 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.02

SECTION 1350 CERTIFICATION

Praxair, Inc. and Subsidiaries

EXHIBIT 32.02

Pursuant to 18 U.S.C. § 1350, the undersigned officer of Praxair, Inc. (the “Company”), hereby certifies that the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

March 1, 2017	By: /s/ Matthew J. White
	Matthew J. White
	Senior Vice President and
	Chief Financial Officer
	(principal financial officer)

The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document.

A signed original of this written statement required by 18 U.S.C. § 1350 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - USD ($) $ in Billions	12 Months Ended
	Dec. 31, 2016	Jan. 31, 2017	Jun. 30, 2016
Document and Entity Information [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	FY
Trading Symbol	PX
Entity Registrant Name	PRAXAIR INC
Entity Central Index Key	0000884905
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		285,071,181
Entity Public Float			$ 32

XML

Consolidated Statements of Income - USD ($) shares in Thousands, $ in Millions	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Income Statement [Abstract]
Sales	$ 10,534	$ 10,776	$ 12,273
Cost of sales, exclusive of depreciation and amortization	5,860	5,960	6,962
Selling, general and administrative	1,145	1,152	1,308
Depreciation and amortization	1,122	1,106	1,170
Research and development	92	93	96
Cost reduction program and other charges	100	172	138
Other income (expenses) – net	23	28	9
Operating Profit	2,238	2,321	2,608
Interest expense – net	190	161	213
Income Before Income Taxes and Equity Investments	2,048	2,160	2,395
Income taxes	551	612	691
Income Before Equity Investments	1,497	1,548	1,704
Income from equity investments	41	43	42
Net Income (Including Noncontrolling Interests)	1,538	1,591	1,746
Less: noncontrolling interests	(38)	(44)	(52)
Net Income (Loss) – Praxair, Inc.	$ 1,500	$ 1,547	$ 1,694
Per Share Data – Praxair, Inc. Shareholders
Basic earnings per share (usd per share)	$ 5.25	$ 5.39	$ 5.79
Earnings Per Share, Diluted	$ 5.21	$ 5.35	$ 5.73
Weighted Average Shares Outstanding (000’s):
Basic shares outstanding (in shares)	285,677	287,005	292,494
Diluted shares outstanding (in shares)	287,757	289,055	295,608

XML

Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
NET INCOME (INCLUDING NONCONTROLLING INTERESTS)	$ 1,538	$ 1,591	$ 1,746
Translation adjustments:
Foreign currency translation adjustments	116	(1,517)	(1,087)
Reclassifications to Net Income			(5)
Income Taxes	(48)	3	(4)
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax	68	(1,514)	(1,096)
Funded status - retirement obligations (Note 16):
Retirement program remeasurements	(163)	(11)	(318)
Reclassifications to net income	60	84	59
Income taxes	27	(17)	95
Funded status - retirement obligations	(76)	56	(164)
Derivative instruments (Note 12):
Current year unrealized gain (loss)	1	1	4
Reclassifications to net income	(1)	(1)
Income taxes			(1)
Derivative instruments			3
Other Comprehensive Income (Loss) Including Portion Attributable to Redeemable Non-Controlling Interest, Net of Tax	(8)	(1,458)	(1,257)
COMPREHENSIVE INCOME (INCLUDING NONCONTROLLING INTERESTS)	1,530	133	489
Less: noncontrolling interests	(34)	3	1
COMPREHENSIVE INCOME - PRAXAIR, INC.	$ 1,496	$ 136	$ 490

XML

Consolidated Balance Sheets - USD ($) $ in Millions	Dec. 31, 2016	Dec. 31, 2015
Assets
Cash and cash equivalents	$ 524	$ 147
Accounts receivable – net	1,641	1,601
Inventories	550	531
Prepaid and other current assets	165	347
Total Current Assets	2,880	2,626
Property, plant and equipment – net	11,477	10,998
Equity investments	717	665
Goodwill	3,117	2,986
Other intangible assets – net	583	568
Other long-term assets	558	476
Total Assets	19,332	18,319
Liabilities and Equity
Accounts payable	906	791
Short-term debt	434	250
Current portion of long-term debt	164	6
Accrued taxes	133	144
Other current liabilities	841	702
Total Current Liabilities	2,478	1,893
Long-term debt	8,917	8,975
Other long-term liabilities	1,213	1,155
Deferred credits	1,272	1,390
Total Liabilities	13,880	13,413
Commitments and contingencies (Note 17)
Redeemable noncontrolling interests	11	113
Praxair, Inc. Shareholders’ Equity:
Common stock $0.01 par value, authorized – 800,000,000 shares, issued 2016 and 2015 – 383,230,625 shares	4	4
Additional paid-in capital	4,074	4,005
Retained earnings	12,879	12,229
Accumulated other comprehensive income (loss)	(4,600)	(4,596)
Less: Treasury stock, at cost (2016 – 98,329,849 shares and 2015 – 98,351,546 shares)	(7,336)	(7,253)
Total Praxair, Inc. Shareholders’ Equity	5,021	4,389
Noncontrolling interests	420	404
Total Equity	5,441	4,793
Total Liabilities and Equity	$ 19,332	$ 18,319

XML

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Common stock, par value (usd per share)	$ 0.01	$ 0.01
Common stock, authorized (in shares)	800,000,000	800,000,000
Common stock, issued (in shares)	383,230,625	383,230,625
Treasury stock, shares (in shares)	98,329,849	98,351,546

XML

Consolidated Statements of Cash Flows - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Operations
Net income – Praxair, Inc.	$ 1,500	$ 1,547	$ 1,694
Income (Loss) Attributable to Noncontrolling Interest	38	44	52
Net Income (Including Noncontrolling Interests)	1,538	1,591	1,746
Adjustments to reconcile net income to net cash provided by operating activities:
Cost reduction program and other charges, net of payments	83	121	138
Depreciation and amortization	1,122	1,106	1,170
Deferred income taxes	(13)	99	55
Share-based compensation	39	30	51
Non-cash charges and other	(43)	(79)	(116)
Working capital
Accounts receivable	(33)	1	(80)
Inventory	(13)	(23)	(42)
Prepaid and other current assets	6	(22)	(20)
Payables and accruals	92	(40)	13
Pension contributions	(11)	(15)	(18)
Long-term assets, liabilities and other	6	(74)	(10)
Net cash provided by operating activities	2,773	2,695	2,887
Investing
Capital expenditures	(1,465)	(1,541)	(1,689)
Acquisitions, net of cash acquired	(363)	(82)	(206)
Divestitures and asset sales	58	320	92
Net cash used for investing activities	(1,770)	(1,303)	(1,803)
Net Cash Provided by (Used in) Financing Activities [Abstract]
Short-term debt borrowings (repayments) – net	191	(329)	(193)
Long-term debt borrowings	936	1,497	1,546
Long-term debt repayments	(770)	(1,000)	(764)
Issuances of common stock	139	88	103
Purchases of common stock	(228)	(725)	(862)
Cash dividends – Praxair, Inc. shareholders	(856)	(819)	(759)
Excess tax benefit on stock based compensation		19	31
Noncontrolling interest transactions and other	(55)	(41)	(129)
Net cash used for financing activities	(643)	(1,310)	(1,027)
Effect of exchange rate changes on cash and cash equivalents	17	(61)	(69)
Change in cash and cash equivalents	377	21	(12)
Cash and cash equivalents, beginning-of-period	147	126	138
Cash and cash equivalents, end-of-period	524	147	126
Supplemental Data
Income taxes paid	585	420	606
Interest paid, net of capitalized interest (Note 7)	$ 189	$ 174	$ 210

XML

Consolidated Statements of Equity - USD ($) $ in Millions	Total		Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss) (Note 7)	Treasury Stock	Praxair, Inc. Shareholders’ Equity	Noncontrolling Interests	Total Equity
Beginning Balance (in shares) at Dec. 31, 2013			383,231,000
Beginning Balance at Dec. 31, 2013	$ 7,003		$ 4	$ 3,970	$ 10,528	$ (1,981)	$ (5,912)	$ 6,609	$ 394
Treasury stock, shares (in shares) at Dec. 31, 2013							89,097,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income	1,746				1,694			1,694	40	$ 1,734
Other Comprehensive Income (Loss), Net of Tax	(1,233)					(1,204)		(1,204)	(29)
Dividends and other capital reductions	(28)								(28)
Purchases of noncontrolling interests				(24)				(24)	2	(22)
Additions (Reductions)	8								8
Redemption value adjustments (Note 14)	2				(2)			(2)		(2)
Dividends to Praxair, Inc common stock	(759)				(759)			(759)
Issuances of common stock:
Stock issued during period dividend reinvestment and employee stock purchase plan (in shares)							(56,000)
Stock issued during period dividend reinvestment and employee stock purchase plan	7						$ 7	7
Stock issued during period employee savings and incentive plans (in shares)							(1,830,000)
Stock issued during period employee savings and incentive plans	86			(36)			$ 122	86
Purchases of common stock (in shares)							6,758,000
Purchases of common stock	(868)						$ (868)	(868)
Tax benefit from stock options	33			33				33
Share-based compensation	51			51				51
Ending Balance (in shares) at Dec. 31, 2014			383,231,000
Ending Balance at Dec. 31, 2014	6,010		$ 4	3,994	11,461	(3,185)	$ (6,651)	5,623	387
Treasury stock, shares (in shares) at Dec. 31, 2014							93,969,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income	1,591				1,547			1,547	34	1,581
Other Comprehensive Income (Loss), Net of Tax	(1,441)					(1,411)		(1,411)	(30)
Dividends and other capital reductions	(16)								(16)
Additions (Reductions)	29								29
Redemption value adjustments (Note 14)	(40)	[1]			40			40		40
Dividends to Praxair, Inc common stock	(819)				(819)			(819)
Issuances of common stock:
Stock issued during period dividend reinvestment and employee stock purchase plan (in shares)							(64,000)
Stock issued during period dividend reinvestment and employee stock purchase plan	7						$ 7	7
Stock issued during period employee savings and incentive plans (in shares)							(1,562,000)
Stock issued during period employee savings and incentive plans	72			(38)			$ 110	72
Purchases of common stock (in shares)							6,009,000
Purchases of common stock	(719)						$ (719)	(719)
Tax benefit from stock options	19			19				19
Share-based compensation	30			30				30
Ending Balance (in shares) at Dec. 31, 2015			383,231,000
Ending Balance at Dec. 31, 2015	$ 4,793		$ 4	4,005	12,229	(4,596)	$ (7,253)	4,389	404
Treasury stock, shares (in shares) at Dec. 31, 2015	98,351,546						98,352,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income	$ 1,538				1,500			1,500	35	1,535
Other Comprehensive Income (Loss), Net of Tax	(15)					(4)		(4)	(11)
Dividends and other capital reductions	(28)								(28)
Additions (Reductions)	70			50				50	20
Redemption value adjustments (Note 14)	(6)				6			6		$ 6
Dividends to Praxair, Inc common stock	(856)				(856)			(856)
Issuances of common stock:
Stock issued during period dividend reinvestment and employee stock purchase plan (in shares)							(60,000)
Stock issued during period dividend reinvestment and employee stock purchase plan	7						$ 7	7
Stock issued during period employee savings and incentive plans (in shares)							(2,044,000)
Stock issued during period employee savings and incentive plans	123			(20)			$ 143	123
Stock Issued During Period, Value, Other	5						$ 5	5
Purchases of common stock (in shares)							2,082,000
Purchases of common stock	(238)						$ (238)	(238)
Share-based compensation	39			39				39
Ending Balance (in shares) at Dec. 31, 2016			383,231,000
Ending Balance at Dec. 31, 2016	$ 5,441		$ 4	$ 4,074	$ 12,879	$ (4,600)	$ (7,336)	$ 5,021	$ 420
Treasury stock, shares (in shares) at Dec. 31, 2016	98,329,849						98,330,000

[1] In December 2015, Praxair sold its controlling interest in Praxair Distribution Southeast, LLC and, accordingly, removed the related redeemable noncontrolling interests.

XML

Consolidated Statements of Equity (Parenthetical) - $ / shares	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Dividends to Praxair, Inc common stock, per share	$ 3.00	$ 2.86	$ 2.60

XML

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2016

Accounting Policies [Abstract]

Summary Of Significant Accounting Policies

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Operations– Praxair, Inc. and its subsidiaries ("Praxair" or "the company") comprise one of the largest industrial gases companies worldwide. Praxair produces, sells and distributes atmospheric, process and specialty gases, and high-performance surface coatings to a diverse group of industries including aerospace, chemicals, food and beverage, electronics, energy, healthcare, manufacturing, and metals.

Principles of Consolidation– The consolidated financial statements were prepared in conformity with accounting principles generally accepted in the United States of America (" U.S. GAAP") and include the accounts of all significant subsidiaries where control exists and, in limited situations, variable-interest entities where the company is the primary beneficiary. Intercompany transactions and balances are eliminated in consolidation and any significant related-party transactions have been disclosed.

Equity investments generally consist of 20% to 50% owned operations where the company exercises significant influence, but does not have control. Equity income from equity investments in corporations is reported on an after-tax basis. Pre-tax income from equity investments that are partnerships or limited-liability corporations ("LLC") is included in other income (expenses) – net with related taxes included in Income taxes. Equity investments are reviewed for impairment whenever events or circumstances reflect that an impairment loss may have incurred. Operations less than 20% owned, where the company does not exercise significant influence, are generally carried at cost.

Changes in ownership interest that result either in consolidation or deconsolidation of an investment are recorded at fair value through earnings, including the retained ownership interest, while changes that do not result in either consolidation or deconsolidation of a subsidiary are treated as equity transactions.

Use of Estimates– The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. While actual results could differ, management believes such estimates to be reasonable.

Revenue Recognition– Product sales represent approximately 87% of consolidated sales. Revenue is recognized when a firm sales agreement exists, collectability of a fixed or determinable sales price is reasonably assured, and when title and risks of ownership transfer to the customer for product sales or, in the case of other revenues when obligations are satisfied or services are performed. Sales returns and allowances are not a normal practice in the industry and are not significant.

A small portion of the company’s revenues relate to long-term construction contracts and are generally recognized using the percentage-of-completion method. Under this method, revenues from sales of major equipment, such as large air-separation facilities, are recognized based primarily on cost incurred to date compared with total estimated cost. Changes to total estimated cost and anticipated losses, if any, are recognized in the period determined.

For contracts that contain multiple products and/or services, amounts assigned to each component are based on its objectively determined fair value, such as the sales price for the component when it is sold separately or competitor prices for similar components.

Certain of the company’s facilities that are built to provide product to a specific customer are required to be accounted for as leases. The associated revenue streams are classified as rental revenue and are not significant.

Amounts billed for shipping and handling fees are recorded as sales, generally on FOB destination terms, and costs incurred for shipping and handling are recorded as cost of sales.

Amounts billed for sales and use taxes, value-added taxes, and certain excise and other specific transactional taxes imposed on revenue producing transactions are presented on a net basis and are not included in sales in the consolidated statement of income.

Cash Equivalents– Cash equivalents are considered to be highly liquid securities with original maturities of three months or less.

Inventories– Inventories are stated at the lower of cost or market. Cost is determined using the average-cost method.

Property, Plant and Equipment – Net– Property, plant and equipment are carried at cost, net of accumulated depreciation. The company capitalizes interest as part of the cost of constructing major facilities (see Note 7). Depreciation is calculated on the straight-line method based on the estimated useful lives of the assets, which range from 3 years to 40 years (see Note 8). Praxair uses accelerated depreciation methods for tax purposes where appropriate. Maintenance of property, plant and equipment is generally expensed as incurred.

The company performs a test for impairment whenever events or changes in circumstances indicate that the carrying amount of an individual asset or asset group may not be recoverable. Should projected undiscounted future cash flows be less than the carrying amount of the asset or asset group, an impairment charge reducing the carrying amount to fair value is required. Fair value is determined based on the most appropriate valuation technique, including discounted cash flows.

Asset-Retirement Obligations – An asset-retirement obligation is recognized in the period in which sufficient information exists to determine the fair value of the liability with a corresponding increase to the carrying amount of the related property, plant and equipment which is then depreciated over its useful life. The liability is initially measured at discounted fair value and then accretion expense is recorded in each subsequent period. The company’s asset-retirement obligations are primarily associated with its on-site long-term supply arrangements where the company has built a facility on land leased from the customer and is obligated to remove the facility at the end of the contract term. The company’s asset-retirement obligations are not material to its consolidated financial statements.

Foreign Currency Translation– For most foreign operations, the local currency is the functional currency and translation gains and losses are reported as part of the accumulated other comprehensive income (loss) component of equity as a cumulative translation adjustment (see Note 7).

Financial Instruments– Praxair enters into various derivative financial instruments to manage its exposure to fluctuating interest and currency exchange rates and energy costs. Such instruments primarily include interest-rate swap and treasury rate lock agreements; currency-swap agreements; forward contracts; currency options; and commodity-swap agreements. These instruments are not entered into for trading purposes. Praxair only uses commonly traded and non-leveraged instruments.

There are three types of derivatives the company enters into: (i) those relating to fair-value exposures, (ii) those relating to cash-flow exposures, and (iii) those relating to foreign currency net investment exposures. Fair-value exposures relate to recognized assets or liabilities, and firm commitments; cash-flow exposures relate to the variability of future cash flows associated with recognized assets or liabilities, or forecasted transactions; and net investment exposures relate to the impact of foreign currency exchange rate changes on the carrying value of net assets denominated in foreign currencies.

When a derivative is executed and hedge accounting is appropriate, it is designated as either a fair-value hedge, cash-flow hedge, or a net investment hedge. Currently, Praxair designates all interest-rate and treasury rate locks as hedges for accounting purposes; however, currency contracts are generally not designated as hedges for accounting purposes unless they are related to forecasted transactions. Whether designated as hedges for accounting purposes or not, all derivatives are linked to an appropriate underlying exposure. On an ongoing basis, the company assesses the hedge effectiveness of all derivatives designated as hedges for accounting purposes to determine if they continue to be highly effective in offsetting changes in fair values or cash flows of the underlying hedged items. If it is determined that the hedge is not highly effective, then hedge accounting will be discontinued prospectively.

Changes in the fair value of derivatives designated as fair-value hedges are recognized in earnings as an offset to the change in the fair values of the underlying exposures being hedged. The changes in fair value of derivatives that are designated as cash-flow hedges are deferred in accumulated other comprehensive income (loss) and are reclassified to earnings as the underlying hedged transaction affects earnings. Any ineffectiveness is recognized in earnings immediately. Hedges of net investments in foreign subsidiaries are recognized in the cumulative translation adjustment component of accumulated other comprehensive income (loss) on the consolidated balance sheets to offset translation gains and losses associated with the hedged net investment. Derivatives that are entered into for risk-management purposes and are not designated as hedges (primarily related to anticipated net income and currency derivatives other than for firm commitments) are recorded at their fair market values and recognized in current earnings.

See Note 12 for additional information relating to financial instruments.

Goodwill– Acquisitions are accounted for using the acquisition method which requires allocation of the purchase price to assets acquired and liabilities assumed based on estimated fair values. Any excess of the purchase price over the fair value of the assets and liabilities acquired is recorded as goodwill. Allocations of the purchase price are based on preliminary estimates and assumptions at the date of acquisition and are subject to revision based on final information received, including appraisals and other analyses which support underlying estimates.

The company performs a goodwill impairment test annually in the second quarter or more frequently if events or circumstances indicate that an impairment loss may have been incurred. The applicable guidance allows an entity to first assess qualitative factors to determine if it is more likely than not that the fair value of a reporting unit is less than carrying value. If it is determined that it is more likely than not that the fair value of a reporting unit is less than carrying value then the company will estimate and compare the fair value of its reporting units to their carrying value, including goodwill. Reporting units are determined based on one level below the operating segment level. As applicable, fair value is determined through the use of projected future cash flows, multiples of earnings and sales and other factors. Such analysis requires the use of certain market assumptions and discount factors, which are subjective in nature.

See Note 9 for additional information relating to goodwill.

Other Intangible Assets– Customer and license/use agreements, non-compete agreements and patents and other intangibles are amortized over the estimated period of benefit. The determination of the estimated period of benefit will be dependent upon the use and underlying characteristics of the intangible asset. Praxair evaluates the recoverability of its intangible assets subject to amortization when facts and circumstances indicate that the carrying value of the asset may not be recoverable. If the carrying value is not recoverable, impairment is measured as the amount by which the carrying value exceeds its estimated fair value. Fair value is generally estimated based on either appraised value or other valuation techniques.

See Note 10 for additional information relating to other intangible assets.

Income Taxes– Deferred income taxes are recorded for the temporary differences between the financial statement and tax bases of assets and liabilities using currently enacted tax rates. Valuation allowances are established against deferred tax assets whenever circumstances indicate that it is more likely than not that such assets will not be realized in future periods.

Under the guidance for accounting for uncertainty in income taxes, the company can recognize the benefit of an income tax position only if it is more likely than not (greater than 50%) that the tax position will be sustained upon tax examination, based solely on the technical merits of the tax position. Otherwise, no benefit can be recognized. The tax benefits recognized are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Additionally, the company accrues interest and related penalties, if applicable, on all tax exposures for which reserves have been established consistent with jurisdictional tax laws. Interest and penalties are classified as income tax expense in the financial statements.

See Note 5 for additional information relating to income taxes.

Retirement Benefits – Most Praxair employees participate in a form of defined benefit or contribution retirement plan, and additionally certain employees are eligible to participate in various post-employment health care and life insurance benefit plans. The cost of contribution plans is recognized in the year earned while the cost of other plans is recognized over the employees’ expected service period to the company, all in accordance with the applicable accounting standards. The funded status of the plans is recorded as an asset or liability in the consolidated balance sheets. Funding of retirement benefits varies and is in accordance with local laws and practices.

See Note 16 for additional information relating to retirement programs.

Share-based Compensation– The company has granted share-based awards which consist of stock options, restricted stock and performance-based stock. Share-based compensation expense is generally recognized on a straight-line basis over the stated vesting period. For stock awards granted to full-retirement-eligible employees, compensation expense is recognized over the period from the grant date to the date retirement eligibility is achieved. For performance-based awards, compensation expense is recognized only if it is probable that the performance condition will be achieved.

See Note 15 for additional disclosures relating to share-based compensation.

Recently Issued Accounting Standards

Accounting Standards Implemented in 2016

The following standards were effective for Praxair in 2016 and their adoption did not have a significant impact on the consolidated financial statements:

• Accounting for Share-based Compensation - In June 2014, the FASB issued updated guidance on the accounting for share-based payments when the terms of an award provide that a performance target could be achieved after the requisite service period. The adoption of this guidance did not have a significant impact on the condensed consolidated financial statements.

• Improvements to Employee Share-Based Payment Accounting - In March 2016, the FASB issued updated guidance on the accounting for employee share-based payments. The new guidance, among other changes, requires that all excess tax benefits and deficiencies associated with share-based payment awards be recorded in Income taxes in the statement of income in the period in which they occur, and within operating cash flows. Previously, such excess tax benefits were recorded as direct credits to equity (not via the statement of income), and as financing cash flows.

Effective in the second quarter 2016, Praxair elected to adopt the requirements of this new accounting standard. Accordingly, income tax expense and operating cash flows for 2016 include $20 million of excess tax benefits. The Company elected not to adjust prior-year cash flow presentations.

The new standard also amends the consolidated statement of cash flows by requiring that cash paid to taxing authorities at settlement arising from the withholding of shares from employees be classified in cash flows from financing activities (such amounts were previously included in cash flows from operating activities). This portion of the standard was required to be adopted on a retrospective basis. In addition, $13 million and $19 million were similarly reclassified for the years ended December 31, 2015 and 2014, respectively.

• Balance Sheet Classification of Deferred Taxes - In November 2015, the FASB issued updated guidance on the balance sheet classification of deferred taxes. Prior to the adoption of this guidance, deferred income tax liabilities and assets were required to be separated and classified as current or non-current in a classified balance sheet. The amendments in this update require that deferred tax liabilities and assets be classified as non-current in a classified balance sheet. Praxair has elected to early adopt this guidance beginning in the fourth quarter 2016 on a prospective basis, prior periods were not retrospectively adjusted (see Note 7).

• Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent) - In May 2015, the FASB issued updated guidance removing the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. The adoption of this guidance resulted in the removal of certain pensions assets from within the fair value hierarchy (see Note 16).

Accounting Standards to be Implemented

• Revenue Recognition – In May 2014, the FASB issued updated guidance on the reporting and disclosure of revenue. The new guidance requires the evaluation of contracts with customers to determine the recognition of revenue when or as the entity satisfies a performance obligation, and requires expanded disclosures. Subsequently, the FASB has issued amendments to certain aspects of the guidance including the effective date. This guidance is required to be effective beginning in the first quarter 2018 (with early adoption beginning in 2017 optional) and includes several transition options.

The Company is currently in the process of evaluating and implementing this new guidance, as required, and at this time expects to use the modified retrospective basis starting in 2018. Praxair will provide additional updates in future filings, when appropriate.

• Simplifying the Measurement of Inventory – In July 2015, the FASB issued updated guidance on the measurement of inventory. The new guidance requires that inventory be measured at the lower of cost or net realizable value. Currently inventory is measured at the lower of cost or market. This new guidance will be effective for Praxair beginning in the first quarter 2017 on a prospective basis, with early adoption optional. Praxair does not expect this requirement to have a material impact.

• Leases – In February 2016, the FASB issued updated guidance on the accounting and financial statement presentation of leases. The new guidance requires lessees to recognize a right-of-use asset and lease liability for all leases, except those that meet certain scope exceptions, and would require expanded quantitative and qualitative disclosures. This guidance will be effective for Praxair beginning in the first quarter 2019, with early adoption optional, and requires companies to transition using a modified retrospective approach. Praxair is in the early stages of reviewing the new guidance and will provide updates on the expected impact to Praxair in future filings, as determined.

• Credit Losses on Financial Instruments –In June 2016, the FASB issued an update on the measurement of credit losses. The guidance introduces a new accounting model for expected credit losses on financial instruments, including trade receivables, based on estimates of current expected credit losses. This guidance will be effective for Praxair beginning in the first quarter 2020, with early adoption permitted beginning in the first quarter 2019 and requires companies to apply the change in accounting on a prospective basis. We are currently evaluating the impact this update will have on our consolidated financial statements.

• Classification of Certain Cash Receipts and Cash Payments – In August 2016, the FASB issued updated guidance on the classification of certain cash receipts and cash payments within the statement of cash flows. The update provides accounting guidance for specific cash flow issues with the objective of reducing diversity in practice. This new guidance will be effective for Praxair beginning in the first quarter 2018 on a retrospective basis, with early adoption optional. Praxair does not expect this requirement to have a material impact.

• Intra-Entity Asset Transfers – In October 2016, the FASB issued updated guidance for income tax accounting of intra-entity transfers of assets other than inventory. The update requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory in the period when the transfer occurs. This new guidance will be effective for Praxair beginning in the first quarter 2018, with early adoption permitted, and should be applied on a modified retrospective basis. We are currently evaluating the impact this update will have on our consolidated financial statements.

• Simplifying the Test for Goodwill Impairment – In January 2017, the FASB issued updated guidance on the measurement of goodwill. The new guidance eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge. The guidance will be effective for Praxair beginning in the first quarter 2020 with early adoption permitted. Praxair does not expect this guidance to have a material impact.

Reclassifications – Certain prior years’ amounts have been reclassified to conform to the current year’s presentation, including reclassifications to the condensed consolidated statement of cash flows due to the adoption of the new share-based payment accounting standard.

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Cost Reduction Program and Other Charges

12 Months Ended

Dec. 31, 2016

Restructuring and Related Activities [Abstract]

Cost Reduction Program and Other Charges

NOTE 2. COST REDUCTION PROGRAM AND OTHER CHARGES

2016 Charges

Cost Reduction Program and Other Charges

In the third quarter of 2016, Praxair recorded pre-tax charges totaling $96 million ($63 million after-tax and noncontrolling interests of $0.22 per diluted share). Following is a summary of the pre-tax charge by reportable segment:

(millions of dollars)	Severance costs		Other Charges		Total
North America	$	14	$	29	$	43
Europe	12		3		15
South America	5		7		12
Asia	6		13		19
Surface Technologies	3		4		7
Total	$	40	$	56	$	96

The severance costs of $40 million are for the elimination of 730 positions. The other charges of $56 million are primarily related to (i) the consolidation of operations for efficiencies and cost reduction primarily in North America and Surface Technologies, (ii) integration costs for recent acquisitions in Europe and North America, and (iii) asset write-downs and other charges related to the impacts of weaker underlying industrial activity, primarily in the Americas and Asia. Amounts related to asset write-downs are net of expected sale proceeds, which are not significant.

The total cash requirement of the cost reduction program and other charges are estimated to be approximately $57 million, of which $13 million was paid through December 31, 2016.

Pension Settlement Charge

In 2015 a number of senior managers retired. These retirees are covered by the U.S. supplemental pension plan which provides for a lump sum benefit payment option. Under certain circumstances, such lump sum payments must be accounted for as a settlement of the related pension obligation, but only when paid. Accordingly, in the third quarter of 2016, Praxair recorded a pension settlement charge related to net unrecognized actuarial losses of $4 million ($3 million after-tax or $0.01 per diluted share).

2015 Charges

Cost Reduction Program and other Charges

In the second quarter of 2015, Praxair recorded pre-tax charges totaling $146 million ($112 million after-tax and noncontrolling interests or $0.39 per diluted share) and in the third quarter recorded pre-tax charges totaling $19 million ($13 million after-tax or $0.04 per diluted share). The charges related primarily to severance and other costs associated with a cost reduction program, which was initiated in response to lower volumes resulting from economic slowdown in emerging markets and energy related end-markets. Following is a summary of the pre-tax charges by reportable segment:

(millions of dollars)	Severance costs		Other Charges		Total
North America	$	14	$	20	$	34
Europe	11		9		20
South America	18		49		67
Asia	11		14		25
Surface Technologies	9		10		19
Total	$	63	$	102	$	165

The severance costs of $63 million are for the elimination of 1,544 positions. A majority of the actions were completed in 2015.

The other charges of $102 million are primarily related to the consolidation of operations and the exit of other operations due to current economic conditions, primarily in Brazil. Amounts related to asset write-downs are net of expected sale proceeds, which are not significant. Following is a summary:

i. The North America charges of $20 million relate primarily to the decision to consolidate certain manufacturing and distribution locations for efficiencies and cost reduction.

ii. The Europe charges of $9 million are primarily for the restructuring of operations in Russia and energy-related businesses in Northern Europe.

iii. The South America charges of $49 million include costs primarily associated with a decision to exit a non-core business and other operations in South America.

iv. The Asia charges of $14 million include costs primarily related to an asset disposal in China.

v. The Surface Technologies charges of $10 million relate to the realignment of sales and manufacturing operations in Europe and the United States for efficiencies and cost reduction.

Additionally, for the year ended December 31, 2015 income taxes include a $10 million increase in valuation allowances relating to U.S. foreign tax credit carryforwards, reflecting the impact of current economic conditions.

The total cash requirements of the cost reduction program and other charges are estimated to be approximately $94 million.

Pension Settlement Charge

In 2014 a number of senior managers retired. These retirees are covered by the U.S. supplemental pension plan which provides for a lump sum benefit payment option. Under certain circumstances, such lump sum payments must be accounted for as a settlement of the related pension obligation, but only when paid. Accordingly, when the cash payments were made in the third quarter of 2015, Praxair recorded a pension settlement charge related to net unrecognized actuarial losses of $7 million ($5 million after-tax or $0.02 per diluted share).

Reconciliation of the 2016 and 2015 Cost Reduction Programs

The following table summarizes the activities related to the company's cost reduction and other charges for the years ended December 31, 2016 and 2015:

(millions of dollars)	Severance costs			Other Charges			Total
Q2/Q3 2015 Cost Reduction Program and Other Charges	$	63		$	102		$	165
Less: Cash payments	(31		)	(13		)	(44		)
Less: Non-cash asset write-offs	—			(68		)	(68		)
Foreign currency translation and other	(2		)	(1		)	(3		)
Balance, December 31, 2015	$	30		$	20		$	50
2016 Cost Reduction Program and Other Charges	40			56			96
Less: Cash payments	(33		)	(9		)	(42		)
Less: Non-cash asset write-offs	—			(39		)	(39		)
Foreign currency translation and other	1			(1		)	—
Balance, December 31, 2016	$	38		$	27		$	65

2014 Charges

Venezuela Currency Devaluation

In recent years, exchange control and other regulations in Venezuela have restricted the Company's operations in Venezuela. During 2014, the Venezuelan government introduced a new exchange control market-based mechanism (referred to as "SICAD II") which allowed companies to apply for the conversion of VEF to the U.S. dollar. At December 31, 2014 the SICAD II rate was 50 VEF per U.S. Dollar versus the official rate of 6.3 (a devaluation of about 88%). After considerable analysis, Praxair concluded at that time that the SICAD II rate more accurately reflects the economic reality of its business in Venezuela versus the official exchange rate. There continues to be a lack of exchangeability between the Venezuelan bolivar fuerte ("VEF") and the U.S. dollar.

As a result, effective December 31, 2014 Praxair changed the exchange rate used to translate the monetary assets and liabilities of its Venezuelan subsidiary to the SICAD II rate of 50 VEF per U.S. Dollar. Also, the Company evaluated the carrying value of its non-monetary assets for impairment and lower of cost or market adjustments considering the new SICAD II rate. As a result, Praxair recorded a pre-tax charge of $131 million ($131 million after-tax, or $0.45 per diluted share) in the Company's consolidated statement of income for the year ended December 31, 2014. This charge includes $68 million related to translation of monetary assets and liabilities to the SICAD II rate and $63 million related primarily to long-lived asset impairments. As a result, Praxair's net asset position in Venezuela at December 31, 2014 was immaterial.

Pension Settlement Charge

During the fourth quarter of 2014, Praxair offered certain former employees who participate in either of the two U.S. qualified defined benefit pension plans, the option to receive a one-time lump sum benefit payment of their vested pension benefits under the plans rather than receiving lifetime annuity payments of these benefits. As a result, a pension settlement of the related pension obligation was triggered for one of the U.S. qualified defined benefit pension plans due to the acceptance rate of the lump sum payment option. Accordingly, Praxair recorded a pension settlement charge of $7 million ($5 million after-tax, or $0.02 per diluted share) in the fourth quarter of 2014 (refer to Note 16).

Classification in the consolidated financial statements

The pre-tax charges for each year are shown within operating profit in a separate line item on the consolidated statements of income. In the consolidated balance sheets, reductions in assets are recorded against the carrying value of the related assets and unpaid amounts are recorded primarily as short-term liabilities. On the consolidated statement of cash flows, the pre-tax impact of these charges, net of cash payments, is shown as an adjustment to reconcile net income to net cash provided by operating activities. In Note 18 - Segment Information, Praxair excluded these charges from its management definition of segment operating profit; a reconciliation of segment operating profit to consolidated operating profit is shown within the segment operating profit table.

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Acquisitions

12 Months Ended

Dec. 31, 2016

Acquistions [Abstract]

Acquisitions

NOTE 3. ACQUISITIONS

The results of operations of these businesses have been included in Praxair’s consolidated statements of income since their respective dates of acquisition. Proforma financial statements for the following acquisitions have not been provided as the acquisitions are not material individually or in the aggregate.

2016 Acquisitions

During the year ended December 31, 2016, Praxair had acquisitions totaling $363 million, primarily the acquisition of Yara International ASA's European carbon dioxide business ("European CO2 business") and packaged gases businesses in North America and Europe. These transactions resulted in goodwill and other intangible assets of $141 million and $82 million, respectively (see Notes 9 and 10). In addition, Praxair purchased a remaining 34% share in a Scandinavian joint venture for $104 million (see Note 14).

European CO2 Acquisition

On June 1, 2016 Praxair, Inc. completed an acquisition of a European CO2 business, which is a leading supplier of liquid CO2 and dry ice primarily to the European food and beverage industries. The business operates CO2 liquefaction plants and dry ice production facilities across the UK, Ireland, Norway, Denmark, Germany, Netherlands, Belgium, France and Italy. This acquisition was accounted for as a business combination; accordingly, the results of operations were consolidated from June 1, 2016 in the European business segment.

The purchase price for the acquisition was approximately $230 million (€206 million) and resulted in $121 million of intangible assets. The intangible assets primarily consist of $69 million of goodwill and $51 million of customer relationships that will be amortized over their estimated life of 20 years. The allocation of the purchase price is final except for pension liabilities. Any potential adjustments are not expected to be material.

2015 Acquisitions

During the year-ended December 31, 2015 Praxair had acquisitions totaling $82 million, primarily acquisitions of packaged gases businesses in North and South America and an acquisition of a controlling interest of an equity investment in Asia. These transactions resulted in goodwill and other intangible assets of $56 million and $26 million, respectively (see Note 9 and Note 10).

2014 Acquisitions

During the year-ended December 31, 2014 Praxair had acquisitions totaling $206 million. These acquisitions consisted primarily of an industrial gases business in Italy, packaged gas businesses in North and South America and an acquisition of a controlling interest of an equity investment in Asia. These transactions resulted in goodwill and other intangible assets of $86 million and $66 million, respectively (see Note 9 and Note 10).

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Leases

12 Months Ended

Dec. 31, 2016

Leases [Abstract]

Leases

NOTE 4. LEASES

In the normal course of its business, Praxair enters into various leases as the lessee, primarily involving manufacturing and distribution equipment and office space. Total lease and rental expenses under operating leases were $141 million in 2016, $141 million in 2015 and $148 million in 2014. Capital leases are not significant and are included in property, plant and equipment – net. Related obligations are included in debt.

At December 31, 2016, minimum payments due under operating leases are as follows:

(Millions of dollars)
2017	$	117
2018	97
2019	79
2020	65
2021	54
Thereafter	117
	$	529

The present value of these future lease payments under operating leases is approximately $490 million.

Praxair’s leases where it is the lessor are not material.

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Income Taxes

12 Months Ended

Dec. 31, 2016

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 5. INCOME TAXES

Pre-tax income applicable to U.S. and foreign operations is as follows:

(Millions of dollars) Year Ended December 31,	2016		2015		2014
United States	$	954	$	980	$	1,004
Foreign	1,094		1,180		1,391
Total income before income taxes	$	2,048	$	2,160	$	2,395

The following is an analysis of the provision for income taxes:

(Millions of dollars) Year Ended December 31,	2016			2015		2014
Current tax expense
U.S. federal	$	266		$	205	$	291
State and local	32			33		35
Foreign	266			275		310
	564			513		636
Deferred tax expense
U.S. federal	3			71		14
State and local	7			10		12
Foreign	(23		)	18		29
	(13		)	99		55
Total income taxes	$	551		$	612	$	691

An analysis of the difference between the provision for income taxes and the amount computed by applying the U.S. statutory income tax rate to pre-tax income follows:

(Dollar amounts in millions) Year Ended December 31,	2016					2015					2014
U.S. statutory income tax rate	$	717		35.0	%	$	756		35.0	%	$	838		35.0	%
State and local taxes – net of federal benefit	28			1.4	%	28			1.3	%	31			1.3	%
U.S. tax credits and deductions (a)	(32		)	(1.6	)%	(40		)	(1.9	)%	(37		)	(1.5	)%
Foreign tax differentials (b)	(140		)	(6.8	)%	(121		)	(5.6	)%	(186		)	(7.8	)%
Venezuela currency devaluation (c)	—			—	%	—			—	%	46			1.9	%
Share Based Compensation (d)	(20		)	(1.0	)%	—			—	%	—			—	%
Other – net	(2		)	(0.1	)%	(11		)	(0.5	)%	(1		)	—	%
Provision for income taxes	$	551		26.9	%	$	612		28.3	%	$	691		28.9	%

________________________

(a) U.S. tax credits and deductions relate to manufacturing deductions and to the research and experimentation tax credit.

(b) Primarily related to differences between the U.S. tax rate of 35% and the statutory tax rate in the countries where Praxair operates. 2014 includes $56 million of tax benefits related to a reduction of uncertain tax positions as a result of a lapse of statute of limitations. Other permanent items and tax rate changes were not significant.

(c) Impact related to non-deductible Venezuela currency devaluations in 2014 (see Note 2).

(d) See Note 1 related to adoption of the FASB's standard for Improvements to Employee Share-Based Payment Accounting in 2016.

Net deferred tax liabilities included in the consolidated balance sheet are comprised of the following:

(Millions of dollars) December 31,	2016			2015
Deferred tax liabilities
Fixed assets	$	1,522		$	1,413
Exchange gains	139			110
Goodwill	178			147
Other intangible assets	115			117
Other	62			155
	$	2,016		$	1,942
Deferred tax assets
Carryforwards	$	284		$	287
Benefit plans and related (a)	404			365
Inventory	26			20
Exchange Losses	6			16
Accruals and other (b)	404			351
	$	1,124		$	1,039
Less: Valuation allowances (c)	(132		)	(123		)
	$	992		$	916
Net deferred tax liabilities	$	1,024		$	1,026
Recorded in the consolidated balance sheets as (See Note 7):
Prepaid and other current assets (d)	$	—		$	184
Other long-term assets (d)	185			118
Deferred credits (d)	1,209			1,328
	$	1,024		$	1,026

________________________

(a) Includes deferred taxes of $352 million and $325 million in 2016 and 2015, respectively, related to pension / OPEB funded status (see Notes 7 and 16).

(b) Includes $233 million and $194 million in 2016 and 2015, respectively, related to research and development costsand $45 million and $45 million in 2016 and 2015, respectively, related to goodwill.

(c) Summary of valuation allowances relating to deferred tax assets follows (millions of dollars):

	2016			2015			2014
Balance, January 1,	$	(123	)	$	(106	)	$	(85	)
Income tax (charge) benefit	(13		)	(20		)	(20		)
Translation adjustments	(2		)	4			6
Other, including write-offs	6			(1		)	(7		)
Balance, December 31,	$	(132	)	$	(123	)	$	(106	)

(d) 2016 amounts reflect the adoption of the FASB's standard regarding the Balance Sheet Classification of Deferred Taxes which requires all current deferred income tax assets and liabilities to be classified as non-current on the balance sheet (see Note 1).

Praxair evaluates deferred tax assets quarterly to ensure that estimated future taxable income will be sufficient in character (e.g., capital gain versus ordinary income treatment), amount and timing to result in their recovery. After considering the positive and negative evidence, a valuation allowance is established to reduce the assets to their realizable value when management determines that it is more likely than not (i.e., greater than 50% likelihood) that a deferred tax asset will not be realized. Considerable judgment is required in establishing deferred tax valuation allowances. At December 31, 2016, Praxair had $284 million of deferred tax assets relating to net operating losses (“NOLs”) and tax credits and $132 million of valuation allowances. These deferred tax assets include $106 million relating to NOLs of which $45 million are in the United States and $61 million are in Brazil. The U.S. NOLs expire through 2032 and the Brazil NOLs have no expiration. These NOLs have no valuation allowances. The deferred tax assets as of December 31, 2016 also include $62 million relating to U.S. foreign tax credits which expire in 2021 and have a full valuation allowance. The utilization of the U.S. foreign tax credits is dependent on many factors including U.S. interest expense, future U.S. investment, foreign sales and earnings growth, foreign currency exchange rates, and acquisitions and dispositions. Management’s assessment and judgment are highly dependent on these variables and any significant changes to any one of them can substantially impact the amount of foreign tax credit utilization over the ten-year carryforward period.

The remaining deferred tax assets of $116 million relate to U.S. state ($55 million) and other foreign ($61 million) NOLs and credit carryforwards, which expire through 2033, have valuation allowances totaling $70 million. These valuation allowances relate to certain foreign and U.S. state NOLs and are required because management has determined, based on financial projections and available tax strategies, that it is unlikely that the NOLs will be utilized before they expire. If events or circumstances change, valuation allowances are adjusted at that time resulting in an income tax benefit or charge.

A provision has not been made for additional U.S. federal or foreign taxes at December 31, 2016 of approximately $12 billion of undistributed earnings of foreign subsidiaries because Praxair intends to reinvest these funds indefinitely to support foreign growth opportunities. It is not practicable to estimate the unrecognized deferred tax liability on these undistributed earnings. These earnings could become subject to additional tax if they are remitted as dividends, loaned to Praxair in the U.S., or upon sale of the subsidiary’s stock.

Uncertain Tax Positions

Unrecognized income tax benefits represent income tax positions taken on income tax returns but not yet recognized in the consolidated financial statements. The company has unrecognized income tax benefits totaling $56 million, $68 million and $71 million as of December 31, 2016, 2015 and 2014, respectively. If recognized, essentially all of the unrecognized tax benefits and related interest and penalties would be recorded as a benefit to income tax expense on the consolidated statement of income.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

(Millions of dollars)	2016			2015			2014
Unrecognized income tax benefits, January 1	$	68		$	71		$	121
Additions for tax positions of prior years	6			21			13
Reductions for tax positions of prior years	(15		)	(13		)	(2		)
Additions for current year tax positions	—			—			3
Reductions for settlements with taxing authorities (a)	(2		)	(3		)	(3		)
Reductions as a result of a lapse of an applicable statute of limitations (b)	—			—			(56		)
Foreign currency translation and other	(1		)	(8		)	(5		)
Unrecognized income tax benefits, December 31	$	56		$	68		$	71

________________________

(a) Settlements are uncertain tax positions that were effectively settled with the taxing authorities, including positions where the company has agreed to amend its tax returns to eliminate the uncertainty.

(b) See note (b) to the effective tax rate reconciliation.

Praxair classifies interest income and expense related to income taxes as tax expense in the consolidated statement of income. Praxair recognized net interest income of $10 million in 2016, none in 2015 and $3 million in 2014. Praxair had $6 million and $8 million of accrued interest and penalties as of December 31, 2016 and December 31, 2015, respectively which were recorded in other long-term liabilities in the consolidated balance sheets (see Note 7).

As of December 31, 2016, the company remained subject to examination in the following major tax jurisdictions for the tax years as indicated below:

Major tax jurisdictions	Open Years
North America
United States	2011 through 2016
Canada	2009 through 2016
Mexico	2011 through 2016
Europe
Germany	2011 through 2016
Italy	2012 through 2016
Spain	2004 through 2016
South America
Brazil	2005 through 2016
Asia
China	2011 through 2016
India	2006 through 2016
Korea	2012 through 2016
Thailand	2010 through 2016

The company is currently under audit in a number of tax jurisdictions. As a result, it is reasonably possible that some of these audits will conclude or reach the stage where a change in unrecognized income tax benefits may occur within the next twelve months. At that time, the company will record any adjustment to income tax expense as required. In 2016, settlements were not material to the consolidated financial statements. The company is also subject to income taxes in many hundreds of state and local taxing jurisdictions that are open to tax examinations.

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Earnings Per Share - Praxair, Inc. Shareholders

12 Months Ended

Dec. 31, 2016

Earnings Per Share [Abstract]

Earnings Per Share - Praxair, Inc. Shareholders

NOTE 6. EARNINGS PER SHARE – PRAXAIR, INC. SHAREHOLDERS

Basic earnings per share is computed by dividing Net income – Praxair, Inc. for the period by the weighted average number of Praxair common shares outstanding. Diluted earnings per share is computed by dividing Net income – Praxair, Inc. for the period by the weighted average number of Praxair common shares outstanding and dilutive common stock equivalents, as follows:

	2016		2015		2014
Numerator (Millions of dollars)
Net income – Praxair, Inc.	$	1,500	$	1,547	$	1,694
Denominator (Thousands of shares)
Weighted average shares outstanding	285,289		286,606		291,987
Shares earned and issuable under compensation plans	388		399		507
Weighted average shares used in basic earnings per share	285,677		287,005		292,494
Effect of dilutive securities
Stock options and awards	2,080		2,050		3,114
Weighted average shares used in diluted earnings per share	287,757		289,055		295,608
Basic Earnings Per Common Share	$	5.25	$	5.39	$	5.79
Diluted Earnings Per Common Share	$	5.21	$	5.35	$	5.73

Stock options of 2,602,770 for the year ended December 31, 2016 and 2,696,785 for the year ended December 31, 2015 were antidilutive and therefore excluded in the computation of diluted earnings per share. There were no antidilutive shares for the year ended December 31, 2014.

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Supplemental Information

12 Months Ended

Dec. 31, 2016

Supplemental Information [Abstract]

Supplemental Information

NOTE 7. SUPPLEMENTAL INFORMATION

Income Statement

(Millions of dollars) Year Ended December 31,	2016		2015		2014
Selling, General and Administrative
Selling	$	493	$	507	$	572
General and administrative	652		645		736
	$	1,145	$	1,152	$	1,308

Year Ended December 31,	2016		2015		2014
Depreciation and Amortization
Depreciation	$	1,071	$	1,059	$	1,123
Amortization of other intangibles (Note 10)	51		47		47
	$	1,122	$	1,106	$	1,170

Year Ended December 31,	2016			2015			2014
Other Income (Expenses) – Net
Currency related net gains (losses)	$	1		$	(2	)	$	1
Partnership income	5			4			16
Severance expense	(7		)	(5		)	(22		)
Business divestitures and asset gains (losses) – net	16			34			36
Other – net	8			(3		)	(22		)
	$	23		$	28		$	9

Year Ended December 31,	2016			2015			2014
Interest Expense – Net
Interest incurred on debt	$	208		$	194		$	215
Interest capitalized	(34		)	(33		)	(38		)
Bond redemption (a)	16			—			36
	$	190		$	161		$	213

Year Ended December 31,	2016		2015		2014
Income Attributable to Noncontrolling Interests
Noncontrolling interests' operations	$	35	$	34	$	40
Redeemable noncontrolling interests' operations (Note 14)	3		10		12
	$	38	$	44	$	52

Balance Sheet

(Millions of dollars) December 31,	2016			2015
Accounts Receivable
Trade	$	1,640		$	1,601
Other	122			101
	1,762			1,702
Less: allowance for doubtful accounts (b)	(121		)	(101		)
	$	1,641		$	1,601

December 31,	2016		2015
Inventories
Raw materials and supplies	$	197	$	202
Work in process	45		48
Finished goods	308		281
	$	550	$	531

December 31,	2016		2015
Prepaid and Other Current Assets
Deferred income taxes (Note 5) (c)	$	—	$	184
Prepaid (d)	108		110
Other	57		53
	$	165	$	347

December 31,	2016		2015
Other Long-term Assets
Pension assets (Note 16)	$	13	$	41
Insurance contracts (e)	74		74
Long-term receivables, net (f)	46		33
Deposits	56		48
Investments carried at cost	14		12
Deferred charges	51		50
Deferred income taxes (Note 5) (c)	185		118
Other	119		100
	$	558	$	476

December 31,	2016		2015
Other Current Liabilities
Accrued expenses	$	285	$	247
Payroll	141		114
Cost reduction program (Note 2)	59		44
Pension and postretirement (Note 16)	24		29
Interest payable	78		71
Employee benefit accrual	23		22
Insurance reserves	8		8
Other	223		167
	$	841	$	702

December 31,	2016		2015
Other Long-term Liabilities
Pension and postretirement (Note 16)	$	863	$	760
Tax liabilities for uncertain tax positions	44		56
Cost reduction program (Note 2)	6		6
Interest and penalties for uncertain tax positions (Note 5)	6		8
Insurance reserves	25		24
Other	269		301
	$	1,213	$	1,155

December 31,	2016		2015
Deferred Credits
Deferred income taxes (Note 5) (c)	$	1,209	$	1,328
Other	63		62
	$	1,272	$	1,390

December 31,	2016			2015
Accumulated Other Comprehensive Income (Loss)
Cumulative translation adjustment - net of taxes:
North America (g)	$	(1,038	)	$	(899	)
South America (g)	(1,969		)	(2,272		)
Europe (g)	(504		)	(526		)
Asia (g)	(383		)	(285		)
Surface Technologies	(52		)	(36		)
	(3,946		)	(4,018		)
Derivatives – net of taxes	(1		)	(1		)
Pension/OPEB funded status obligation (net of $352 million and $325 million tax benefit in 2016 and 2015, respectively) (Note 16)	(653		)	(577		)
	$	(4,600	)	$	(4,596	)

________________________

(a) In February 2016, Praxair redeemed $325 million of 5.20% notes due March 2017 resulting in a $16 million interest charge ($10 million after-tax, or $0.04 per diluted share). In December 2014, Praxair redeemed $400 million of 5.375% notes due November 2016 for $434 million resulting in an $36 million charge ($22 million after-tax, or $0.07 per diluted share).

(b) Provisions to the allowance for doubtful accounts were $41 million, $35 million, and $39 million in 2016, 2015, and 2014, respectively. The allowance activity in each period related primarily to write-offs of uncollectible amounts, net of recoveries and currency movements.

(c) 2016 amounts reflect the adoption of the FASB's standard regarding Balance Sheet Classification of Deferred Taxes which requires all current deferred income tax assets and liabilities to be classified as non-current on the balance sheet (see Note 1).

(d) Includes estimated income tax payments of $39 million and $42 million in 2016 and 2015, respectively.

(e) Consists primarily of insurance contracts and other investments to be utilized for non-qualified pension and OPEB obligations.

(f) Long-term receivables are not material and are largely reserved. The balances at December 31, 2016 and 2015 are net of reserves of $50 million and $35 million, respectively. The amounts in both periods relate primarily to government receivables in Brazil and other long-term notes receivable from customers. Collectability is reviewed regularly and uncollectible amounts are written-off as appropriate. The account balance changes during 2016 were primarily due to additional government receivables in Brazil and foreign exchange rate movements.

(g) North America consists of currency translation adjustments in Canada and Mexico. South America relates primarily to Brazil and Argentina. Europe relates primarily to Spain, Italy and Germany. Asia relates primarily to Korea and India.

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Property, Plant & Equipment - Net

12 Months Ended

Dec. 31, 2016

Property, Plant and Equipment [Abstract]

Property, Plant & Equipment - Net

NOTE 8. PROPERTY, PLANT AND EQUIPMENT – NET

Significant classes of property, plant and equipment are as follows:

(Millions of dollars) December 31,	Depreciable Lives (Yrs)	2016			2015
Production plants (primarily 15-year life) (a)	10-20	$	14,588		$	13,778
Storage tanks	15-20	2,360			2,196
Transportation equipment and other	3-15	2,038			1,925
Cylinders (primarily 30-year life)	10-30	1,722			1,654
Buildings	25-40	1,096			1,085
Land and improvements (b)	0-20	559			517
Construction in progress		1,558			1,539
		23,921			22,694
Less: accumulated depreciation		(12,444		)	(11,696		)
		$	11,477		$	10,998

(a) - Depreciable lives of production plants related to long-term customer supply contracts are consistent with the contract lives.

(b) - Land is not depreciated.

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Goodwill

12 Months Ended

Dec. 31, 2016

Goodwill [Abstract]

Goodwill

NOTE 9. GOODWILL

Changes in the carrying amount of goodwill for the years ended December 31, 2016 and 2015 were as follows:

(Millions of dollars)	North America			South America			Europe			Asia			Surface Technologies			Total
Balance, December 31, 2014	$	2,139		$	147		$	654		$	38		$	143		$	3,121
Acquisitions (Note 3)	21			9			—			23			3			56
Purchase adjustments & other *	(12		)	—			—			—			—			(12		)
Foreign currency translation	(37		)	(58		)	(72		)	(2		)	(10		)	(179		)
Balance, December 31, 2015	$	2,111		$	98		$	582		$	59		$	136		$	2,986
Acquisitions (Note 3)	61			9			71			—			—			141
Purchase adjustments & other	6			—			—			—			2			8
Foreign currency translation	(13		)	25			(24		)	(1		)	(5		)	(18		)
Balance, December 31, 2016	$	2,165		$	132		$	629		$	58		$	133		$	3,117

*    Primarily relates to the elimination of goodwill with a divestiture.    

Praxair has performed its goodwill impairment tests annually during the second quarter of each year, and historically has determined that the fair value of each of its reporting units was substantially in excess of its carrying value. For the 2016 test, Praxair applied the FASB's accounting guidance which allows the company to first assess qualitative factors to determine the extent of additional quantitative analysis, if any, that may be required to test goodwill for impairment. Based on the qualitative assessments performed, Praxair concluded that it was more likely than not that the fair value of each reporting unit substantially exceeded its carrying value and therefore, further quantitative analysis was not required. As a result, no impairment was recorded. There were no indicators of impairment through December 31, 2016.

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Other Intangible Assets

12 Months Ended

Dec. 31, 2016

Other Intangible Assets [Abstract]

Other Intangible Assets

NOTE 10. OTHER INTANGIBLE ASSETS

The following is a summary of Praxair’s other intangible assets at December 31, 2016 and 2015:

(Millions of dollars) For the year ended December 31, 2016	Customer & License/Use Agreements			Non-compete Agreements			Patents & Other			Total
Cost:
Balance, December 31, 2015	$	698		$	38		$	47		$	783
Additions (primarily acquisitions)	72			4			6			82
Foreign currency translation	(16		)	(1		)	(2		)	(19		)
Other *	(3		)	(7		)	—			(10		)
Balance, December 31, 2016	751			34			51			836
Less: accumulated amortization:
Balance, December 31, 2015	(179		)	(23		)	(13		)	(215		)
Amortization expense	(41		)	(6		)	(4		)	(51		)
Foreign currency translation	6			—			—			6
Other *	—			7			—			7
Balance, December 31, 2016	(214		)	(22		)	(17		)	(253		)
Net balance at December 31, 2016	$	537		$	12		$	34		$	583
(Millions of dollars) For the year ended December 31, 2015	Customer & License/Use Agreements			Non-compete Agreements			Patents & Other			Total
Cost:
Balance, December 31, 2014	$	693		$	37		$	47		$	777
Additions (primarily acquisitions)	23			2			1			26
Foreign currency translation	(21		)	(1		)	(1		)	(23		)
Other *	3			—			—			3
Balance, December 31, 2015	698			38			47			783
Less: accumulated amortization:
Balance, December 31, 2014	(147		)	(18		)	(9		)	(174		)
Amortization expense	(37		)	(6		)	(4		)	(47		)
Foreign currency translation	7			1			—			8
Other *	(2		)	—			—			(2		)
Balance, December 31, 2015	(179		)	(23		)	(13		)	(215		)
Net balance at December 31, 2015	$	519		$	15		$	34		$	568

________________________

* Other primarily relates to the write-off of fully amortized assets, purchase accounting adjustments and reclassifications.

There are no expected residual values related to these intangible assets. Amortization expense for the years ended December 31, 2016, 2015 and 2014 was $51 million, $47 million and $47 million, respectively. The remaining weighted-average amortization period for intangible assets is approximately 17 years.

Total estimated annual amortization expense is as follows:

(Millions of dollars)
2017	$	45
2018	42
2019	40
2020	38
2021	36
Thereafter	382
	$	583

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Debt

12 Months Ended

Dec. 31, 2016

Debt Disclosure [Abstract]

Debt

NOTE 11. DEBT

The following is a summary of Praxair’s outstanding debt at December 31, 2016 and 2015:

(Millions of dollars)	2016			2015
Short-term
Commercial paper and U.S. bank borrowings	$	333		$	87
Other bank borrowings (primarily international)	101			163
Total short-term debt	434			250
Long-term (a)
U.S. borrowings
0.75% Notes due 2016 (b)	—			400
Floating Rate Notes due 2017	150			150
5.20% Notes due 2017 (b)	—			325
1.05% Notes due 2017 (c)	400			399
1.20% Notes due 2018	499			499
1.25% Notes due 2018 (d)	478			480
4.50% Notes due 2019	598			597
1.90% Notes due 2019	499			499
1.50% Euro denominated notes due 2020	627			646
2.25% Notes due 2020	299			298
4.05% Notes due 2021	497			497
3.00% Notes due 2021	496			496
2.45% Notes due 2022	597			596
2.20% Notes due 2022	498			497
2.70% Notes due 2023	497			497
1.20% Euro denominated notes due 2024 (e)	575			—
2.65% Notes due 2025	397			396
1.625% Euro denominated notes due 2025	519			535
3.20% Notes due 2026 (e)	725			446
3.55% Notes due 2042	662			661
Other	12			3
International bank borrowings	49			57
Obligations under capital lease	7			7
	9,081			8,981
Less: current portion of long-term debt	(164		)	(6		)
Total long-term debt	8,917			8,975
Total debt	$	9,515		$	9,231

________________________

(a) Amounts are net of unamortized discounts, premiums and/or debt issuance cost as applicable.

(b) In February 2016, Praxair repaid $400 million of 0.75% notes that became due. Also in February 2016, Praxair redeemed $325 million of 5.20% notes due March 2017 resulting in a $16 million interest charge ($10 million after-tax, or $0.04 per diluted share).

(c) Classified as long-term because of the Company’s intent to refinance this debt on a long-term basis and the availability of such financing under the terms of an existing $2.5 billion long-term credit facility.

(d) December 31, 2016 and 2015 include a $4 million and $6 million fair value increase, respectively, related to hedge accounting. See Note 12 for additional information.

(e) In February 2016, Praxair issued €550 million of 1.20% Euro-denominated notes due 2024. In addition, Praxair issued $275 million of 3.20% notes due 2026. The proceeds of these debt issuances were used for general corporate purposes.

Credit Facilities

At December 31, 2016, the company has the following major credit facility available for future borrowing:

Millions of dollars	Total Facility		Borrowings Outstanding		Available for Borrowing		Expires
Senior Unsecured	$	2,500	$	—	$	2,500	December 2019

The credit facility is non-cancellable by the issuing financial institutions until its maturity in December 2019. No borrowings were outstanding under the credit agreement at December 31, 2016.

Covenants

Praxair’s $2.5 billion senior unsecured credit facility and long-term debt agreements contain various covenants which may, among other things, restrict certain types of mergers and changes in beneficial ownership of the company, and the ability of the company to incur or guarantee debt, sell or transfer certain assets, create liens against assets, enter into sale and leaseback agreements, or pay dividends and make other distributions beyond certain limits. These agreements also require Praxair to not exceed a maximum 70% leverage ratio defined in the agreements as the ratio of consolidated total debt to the sum of consolidated total debt plus consolidated shareholders’ equity of the company. For purposes of the leverage ratio calculation, consolidated shareholders’ equity excludes changes in the cumulative foreign currency translation adjustments after June 30, 2011. At December 31, 2016, the actual leverage ratio, as calculated according to the agreement, was 52% and the company is in compliance with all financial covenants. Also, there are no material adverse change clauses or other subjective conditions that would restrict the company’s ability to borrow under the agreement.

Other Debt Information

As of December 31, 2016 and 2015, the weighted-average interest rate of short-term borrowings outstanding was 1.2% and 3.4%, respectively. The decrease reflects the higher mix of international borrowings in prior year.

Expected maturities of long-term debt are as follows:

(Millions of dollars)
2017	$	164	*
2018	985
2019	1,503		*
2020	938
2021	1,006
Thereafter	4,485
	$	9,081

________________________

*    $400 million of debt due in 2017 has been reflected in 2019 maturities due to the company’s intent to refinance this debt on a long-term basis and the ability to do so under the $2.5 billion senior unsecured credit facility with a syndicate of banks which expires in 2019.

As of December 31, 2016, $5 million of Praxair’s assets (principally international fixed assets) were pledged as collateral for $5 million of long-term debt, including the current portion of long-term debt.

See Note 13 for the fair value information related to debt.

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Financial Instruments

12 Months Ended

Dec. 31, 2016

Derivative Instruments and Hedges, Assets [Abstract]

Financial Instruments

NOTE 12. FINANCIAL INSTRUMENTS

In its normal operations, Praxair is exposed to market risks relating to fluctuations in interest rates, foreign currency exchange rates, energy costs and to a lesser extent precious metal prices. The objective of financial risk management at Praxair is to minimize the negative impact of such fluctuations on the company’s earnings and cash flows. To manage these risks, among other strategies, Praxair routinely enters into various derivative financial instruments (“derivatives”) including interest-rate swap and treasury rate lock agreements, currency-swap agreements, forward contracts, currency options, and commodity-swap agreements. These instruments are not entered into for trading purposes and Praxair only uses commonly traded and non-leveraged instruments.

There are three types of derivatives that the company enters into: (i) those relating to fair-value exposures, (ii) those relating to cash-flow exposures, and (iii) those relating to foreign currency net investment exposures. Fair-value exposures relate to recognized assets or liabilities, and firm commitments; cash-flow exposures relate to the variability of future cash flows associated with recognized assets or liabilities, or forecasted transactions; and net investment exposures relate to the impact of foreign currency exchange rate changes on the carrying value of net assets denominated in foreign currencies.

When a derivative is executed and hedge accounting is appropriate, it is designated as either a fair-value hedge, cash-flow hedge, or a net investment hedge. Currently, Praxair designates all interest-rate and treasury-rate locks as hedges for accounting purposes; however, currency contracts are generally not designated as hedges for accounting purposes unless they are related to forecasted transactions. Whether designated as hedges for accounting purposes or not, all derivatives are linked to an appropriate underlying exposure. On an ongoing basis, the company assesses the hedge effectiveness of all derivatives designated as hedges for accounting purposes to determine if they continue to be highly effective in offsetting changes in fair values or cash flows of the underlying hedged items. If it is determined that the hedge is not highly effective, then hedge accounting will be discontinued prospectively.

Counterparties to Praxair’s derivatives are major banking institutions with credit ratings of investment grade or better and no collateral is required, and there are no significant risk concentrations. Management believes the risk of incurring losses on derivative contracts related to credit risk is remote and any losses would be immaterial.

The following table is a summary of the notional amount and fair value of derivatives outstanding at December 31, 2016 and 2015 for consolidated subsidiaries:

					Fair Value
(Millions of dollars)	Notional Amounts				Assets				Liabilities
December 31,	2016		2015		2016		2015		2016		2015
Derivatives Not Designated as Hedging Instruments:
Currency contracts:
Balance sheet items (a)	$	2,104	$	2,548	$	11	$	15	$	18	$	11
Derivatives Designated as Hedging Instruments:
Currency contracts:
Balance sheet items (a)	$	38	$	38	$	3	$	1	$	—	$	—
Interest rate contracts:
Interest rate swaps (b)	475		475		4		6		—		—
Total Hedges	$	513	$	513	$	7	$	7	$	—	$	—
Total Derivatives	$	2,617	$	3,061	$	18	$	22	$	18	$	11

________________________

(a) Assets are recorded in prepaid and other current assets, and liabilities are recorded in other current liabilities.

(b) Assets are recorded in other long term assets.

Currency Contracts

Balance Sheet Items

Foreign currency contracts related to balance sheet items consist of forward contracts entered into to manage the exposure to fluctuations in foreign-currency exchange rates on recorded balance sheet assets and liabilities denominated in currencies other than the functional currency of the related operating unit. Certain forward currency contracts are entered into to protect underlying monetary assets and liabilities denominated in foreign currencies from foreign exchange risk and are not designated as hedging instruments. The fair value adjustments on these contracts are offset by the fair value adjustments recorded on the underlying monetary assets and liabilities. Praxair also enters into forward currency contracts, which are designated as hedging instruments, to limit the cash flow exposure on certain foreign-currency denominated intercompany loans. The fair value adjustments on these contracts are recorded to AOCI, with the effective portion immediately reclassified to earnings to offset the fair value adjustments on the underlying debt instrument.

Forecasted Purchases

Foreign currency contracts related to forecasted purchases consist of forward contracts entered into to manage the exposure to fluctuations in foreign-currency exchange rates on forecasted purchases of capital-related equipment and services denominated in currencies other than the functional currency of the related operating units. These forward contracts were designated and accounted for as cash flow hedges.

Net Investment Hedges

In 2014, Praxair designated the €600 million ($627 million as of December 31, 2016) 1.50% Euro-denominated notes due 2020 and the €500 million ($519 million as of December 31, 2016) 1.625% Euro-denominated notes due 2025, as a hedge of the net investment position in its European operations. In 2016 Praxair designated an incremental €550 million ($575 million as of December 31, 2016) 1.20% Euro-denominated notes due 2024 as an additional hedge of the net investment position in its European operations. These Euro-denominated debt instruments reduce the company's exposure to changes in the currency exchange rate on investments in foreign subsidiaries with Euro functional currencies. Since hedge inception, exchange rate movements have reduced long-term debt by $339 million ($78 million of which was during the year ended December 31, 2016), with the offsetting gain shown within the cumulative translation component of AOCI in the consolidated balance sheets and the consolidated statements of comprehensive income.

Interest Rate Contracts

Outstanding Interest Rate Swaps

At December 31, 2016, Praxair had one outstanding interest rate swap agreement with a $475 million notional amount related to the $475 million1.25% notes that mature in 2018. The interest rate swap effectively converts fixed-rate interest to variable-rate interest and is designated as a fair value hedge. Fair value adjustments are recognized in earnings along with an equally offsetting charge / benefit to earnings for the changes in the fair value of the underlying debt instrument. At December 31, 2016, $4 million was recognized as an increase in the fair value of this note ($6 million at December 31, 2015).

Terminated Treasury Rate Locks

The following table summarizes the unrecognized gains (losses) related to terminated treasury rate lock contracts:

					Unrecognized Gain / (Loss) (a)
(Millions of dollars)	Year Terminated	Original Gain / (Loss)			December 31, 2016			December 31, 2015
Treasury Rate Locks
Underlying debt instrument:
$500 million 2.20% fixed-rate notes that mature in 2022 (b)	2012	$	(2	)	$	(1	)	$	(1	)
$500 million 3.00% fixed-rate notes that mature in 2021 (b)	2011	(11		)	(5		)	(6		)
$600 million 4.50% fixed-rate notes that mature in 2019 (b)	2009	16			4			6
Total – pre-tax					$	(2	)	$	(1	)
Less: income taxes					1			—
After- tax amounts					$	(1	)	$	(1	)

________________________

(a) The unrecognized gains / (losses) for the treasury rate locks are shown in accumulated other comprehensive income ("AOCI") and are being recognized on a straight line basis to interest expense – net over the term of the underlying debt agreements. Refer to the table below summarizing the impact of the company’s consolidated statements of income and AOCI for current period gain (loss) recognition.

(b) The notional amount of the treasury rate lock contracts are equal to the underlying debt instrument with the exception of the treasury rate lock contract entered into to hedge the $600 million4.50% fixed-rate notes that mature in 2019. The notional amount of this contract was $500 million.

The following table summarizes the impact of the company's derivatives not designated as hedging instruments on the consolidated statements of income:

(Millions of dollars)	Amount of Pre-Tax Gain (Loss)     Recognized in Earnings *
December 31,	2016		2015			2014
Derivatives Not Designated as Hedging Instruments
Currency contracts:
Balance sheet items:
Debt-related	$	21	$	(162	)	$	(69	)
Other balance sheet items	4		(8		)	(2		)
Total	$	25	$	(170	)	$	(71	)

* The gains (losses) on balance sheet items are offset by gains (losses) recorded on the underlying hedged assets and liabilities. Accordingly, the gains (losses) for the derivatives and the underlying hedged assets and liabilities related to debt items are recorded in the consolidated statements of income as interest expense-net. Other balance sheet items and anticipated net income gains (losses) are recorded in the consolidated statements of income as other income (expenses)-net.

The following table summarizes the impact of the company's derivatives designated as hedging instruments that impact AOCI:

(Millions of dollars)	Amount of Gain (Loss) Recognized in AOCI								Amount of Gain (Loss) Reclassified from AOCI to the Consolidated Statement of Income
December 31,	2016			2015		2014			2016			2015			2014
Derivatives Designated as Hedging Instruments**
Currency contracts:
Net Investment hedge	$	(4	)	$	—	$	(6	)	$	—		$	—		$	—
Forecasted purchases	—			—		1			—			—			—
Balance sheet items	1			1		—			—			(1		)	—
Interest rate contracts:
Treasury rate locks	—			—		—			(1		)	—			—
Total – Pre tax	$	(3	)	$	1	$	(5	)	$	(1	)	$	(1	)	$	—
Less: income taxes	—			—		2			1			—			—
Total - Net of Taxes	$	(3	)	$	1	$	(3	)	$	—		$	(1	)	$	—

** The gains (losses) on net investment hedges are recorded as a component of AOCI within foreign currency translation adjustments in the consolidated balance sheets and consolidated statements of comprehensive income. The gains (losses) on forecasted purchases, balance sheet items, and treasury rate locks are recorded as a component of AOCI within derivative instruments in the consolidated balance sheets and the consolidated statements of comprehensive income. There was no ineffectiveness for these instruments during 2016 or 2015. The gains (losses) on net investment hedges are reclassified to earnings only when the related currency translation adjustments are required to be reclassified, usually upon sale or liquidation of the investment. The gains (losses) for interest rate contracts are reclassified to earnings as interest expense –net on a straight-line basis over the remaining maturity of the underlying debt. Net losses of approximately $1 million are expected to be reclassified to earnings during 2017.

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Fair Value Disclosures

12 Months Ended

Dec. 31, 2016

Fair Value Disclosures [Abstract]

Fair Value Disclosures

NOTE 13. FAIR VALUE DISCLOSURES

The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels as follows:

Level 1 – quoted prices in active markets for identical assets or liabilities

Level 2 – quoted prices for similar assets and liabilities in active markets or inputs that are observable

Level 3 – inputs that are unobservable (for example cash flow modeling inputs based on assumptions)

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table summarizes assets and liabilities measured at fair value on a recurring basis at December 31, 2016 and 2015:

	Fair Value Measurements Using
(Millions of dollars)	Level 1				Level 2				Level 3
	2016		2015		2016		2015		2016		2015
Assets
Derivative assets	$	—	$	—	$	18	$	22	$	—	$	—
Liabilities
Derivative liabilities	$	—	$	—	$	18	$	11	$	—	$	—

The fair values of the derivative assets and liabilities are based on market prices obtained from independent brokers or determined using quantitative models that use as their basis readily observable market parameters that are actively quoted and can be validated through external sources, including third-party pricing services, brokers and market transactions. Investments are marketable securities traded on an exchange.

The fair value of cash and cash equivalents, short-term debt, accounts receivables-net, and accounts payable approximate carrying value because of the short-term maturities of these instruments. The fair value of long-term debt is estimated based on the quoted market prices for the same or similar issues, which is deemed a Level 2 measurement. At December 31, 2016, the estimated fair value of Praxair’s long-term debt portfolio was $9,218 million versus a carrying value of $9,081 million. At December 31, 2015, the estimated fair value of Praxair’s long-term debt portfolio was $9,069 million versus a carrying value of $8,981 million. These differences are attributable to interest-rate changes subsequent to when the debt was issued.

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Equity and Redeemable Noncontrolling Interests

12 Months Ended

Dec. 31, 2016

Equity And Noncontrolling Interests Disclosure [Abstract]

Equity And Noncontrolling Interests Disclosure [Text Block]

NOTE 14. EQUITY AND NONCONTROLLING INTERESTS

Praxair, Inc. Shareholders’ Equity

At December 31, 2016 and 2015, there were 800,000,000 shares of common stock authorized (par value $0.01 per share) of which 383,230,625 shares were issued and 284,900,776 were outstanding at December 31, 2016 (284,879,079 were outstanding at December 31, 2015).

At December 31, 2016 and 2015, there were 25,000,000 shares of preferred stock (par value $0.01 per share) authorized, of which no shares were issued and outstanding. Praxair’s Board of Directors may from time to time authorize the issuance of one or more series of preferred stock and, in connection with the creation of such series, determine the characteristics of each such series including, without limitation, the preference and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions of the series.

Noncontrolling Interests

Noncontrolling interest ownership changes are presented within the "Additions (Reductions)" line item of the consolidated statements of equity. The $20 million increase during 2016 relates to the sale of an ownership interest in a majority-owned joint venture in India during the third quarter offset by the formation of PG Technologies, LLC ("PGT"), a majority-owned joint venture with GE Aviation, during the fourth quarter. The "Additions (Reductions)" line item of the consolidated statements of equity also includes an increase to Additional Paid-In Capital resulting from the sale of the noncontrolling interest to the PGT joint venture partner.

Redeemable Noncontrolling Interests

Noncontrolling interests with redemption features, such as put/sell options, that are not solely within the company’s control (“redeemable noncontrolling interests”) are reported separately in the consolidated balance sheets at the greater of carrying value or redemption value. For redeemable noncontrolling interests that are not yet exercisable, Praxair calculates the redemption value by accreting the carrying value to the redemption value over the period until exercisable. If the redemption value is greater than the carrying value, any increase is adjusted directly to retained earnings and does not impact net income. At December 31, 2016, the redeemable noncontrolling interest balance includes one packaged gas distributor in the United States where the noncontrolling shareholder has a put option.

The following is a summary of redeemable noncontrolling interests for the years ended December 31, 2016, 2015 and 2014 :

(Millions of dollars)	2016			2015			2014
Beginning Balance	$	113		$	176		$	307
Net income	3			10			12
Distributions to noncontrolling interest	(2		)	(7		)	(9		)
Redemption value adjustment/accretion *	(6		)	(40		)	2
Foreign currency translation and other	7			(17		)	(24		)
Purchase/divestiture of noncontrolling interest **	(104		)	(9		)	(112		)
Ending Balance	$	11		$	113		$	176

* In December 2015, Praxair sold its controlling interest in Praxair Distribution Southeast, LLC and, accordingly, removed the related redeemable noncontrolling interests.

** In June 2016, Praxair acquired the remaining 34% stake in a Scandinavian joint venture for $104 million. In January 2014, Praxair acquired the remaining noncontrolling interests in a joint venture in the United States. The cash payments related to these acquisitions are shown in the financing section of the consolidated statements of cash flows under the caption "Noncontrolling interest transactions and other" as there was no change in control.

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Share-Based Compensation

12 Months Ended

Dec. 31, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-Based Compensation

NOTE 15. SHARE-BASED COMPENSATION

Share-based compensation expense was $39 million in 2016 ($30 million and $51 million in 2015 and 2014, respectively). The income tax benefit recognized was $32 million in 2016 ($8 million and $14 million in 2015 and 2014, respectively). 2016 includes $20 million of excess tax benefits related to the new accounting standard implemented (see Note 1 and Note 5). Expense amounts reflect current estimates of achieving performance targets relating to performance-based compensation. The expense was primarily recorded in selling, general and administrative expenses and no share-based compensation expense was capitalized.

Summary of Plans

The 2009 Praxair, Inc. Long-Term Incentive Plan was initially adopted by the board of directors and shareholders of the company on April 28, 2009 and was amended and restated in its entirety by the board and shareholders on April 22, 2014 ("the 2009 Plan"). Prior to April 28, 2009, equity awards were granted under the 2002 Praxair, Inc. Long-Term Incentive Plan and the company’s ability to make further equity awards under that plan ended with its adoption of the 2009 Plan. The 2009 Plan permits awards of stock options, stock appreciation rights, restricted stock and restricted stock units, performance-based stock units and other equity awards to eligible officer and non-officer employees and non-employee directors of the company and its affiliates. Under the 2009 Plan, as amended and restated in 2014, the aggregate number of shares available for option and other equity grants is 8,000,000 shares, of which up to 2,600,000 shares may be granted as awards other than options or stock appreciation rights. The 2009 Plan also provides calendar year per-participant limits on grants of stock options and stock appreciation rights and on other types of awards intended to qualify as Performance-Based Compensation under Section 162(m) of the Internal Revenue Code. As of December 31, 2016, 3,993,818 shares remained available for equity grants under the 2009 Plan.

In 2005, the board of directors and shareholders of the company adopted the 2005 Equity Compensation Plan for Non-Employee Directors of Praxair, Inc. ("the 2005 Plan"). Under the 2005 Plan, the aggregate number of shares available for option and other equity grants was limited to a total of 500,000 shares. The 2005 Plan expired on April 30, 2010, by its own terms, and no shares were available for grant thereafter.

Exercise prices for options granted under the 2009 Plan may not be less than the closing market price of the company’s common stock on the date of grant and granted options may not be re-priced or exchanged without shareholder approval. Options granted under the 2009 Plan subject only to time vesting requirements may become partially exercisable after a minimum of one year after the date of grant but may not become fully exercisable until at least three years have elapsed from the date of grant, and all options have a maximum duration of ten years. Options granted under predecessor plans had similar terms.

In order to satisfy option exercises and other equity grants, the Company may issue authorized but previously unissued shares or it may issue treasury shares.

Stock Option Fair Value

The company utilizes the Black-Scholes Options-Pricing Model to determine the fair value of stock options consistent with that used in prior years. Management is required to make certain assumptions with respect to selected model inputs, including anticipated changes in the underlying stock price (i.e., expected volatility) and option exercise activity (i.e., expected life). Expected volatility is based on the historical volatility of the company’s stock over the most recent period commensurate with the estimated expected life of the company’s stock options and other factors. The expected life of options granted, which represents the period of time that the options are expected to be outstanding, is based primarily on historical exercise experience. The expected dividend yield is based on the company’s most recent history and expectation of dividend payouts. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for a period commensurate with the estimated expected life. If factors change and result in different assumptions in future periods, the stock option expense that the company records for future grants may differ significantly from what the company has recorded in the current period.

The weighted-average fair value of options granted during 2016 was $8.91 ($11.99 in 2015 and $14.62 in 2014) based on the Black-Scholes Options-Pricing model. The decrease in grant date fair value year-over-year is primarily attributable to a decrease in the company's stock price as of the grant date.

The following weighted-average assumptions were used to value the grants in 2016, 2015 and 2014:

Year Ended December 31,	2016		2015		2014
Dividend yield	2.9	%	2.2	%	2.0	%
Volatility	14.4	%	13.5	%	15.2	%
Risk-free interest rate	1.41	%	1.51	%	1.57	%
Expected term years	6		5		5

The following table summarizes option activity under the plans as of December 31, 2016 and changes during the period then ended (averages are calculated on a weighted basis; life in years; intrinsic value expressed in millions):

Activity	Number  of Options (000’s)		Average Exercise Price		Average Remaining Life	Aggregate Intrinsic Value
Outstanding at January 1, 2016	11,273		$	96.58
Granted	2,473		102.23
Exercised	(1,821	)	70.17
Cancelled or expired	(217	)	111.25
Outstanding at December 31, 2016	11,708		$	101.58	5.6	$	212
Exercisable at December 31, 2016	8,018		$	96.90	4.2	$	177

The aggregate intrinsic value represents the difference between the company’s closing stock price of $117.19 as of December 31, 2016 and the exercise price multiplied by the number of in the money options outstanding as of that date. The total intrinsic value of stock options exercised during 2016 was $82 million ($65 million and $93 million in 2015 and 2014, respectively).

Cash received from option exercises under all share-based payment arrangements for 2016 was $128 million ($72 million and $88 million in 2015 and 2014, respectively). The cash tax benefit realized from share-based compensation totaled$32 million for 2016 ($33 million and $48 million cash tax benefit in 2015 and 2014, respectively).

As of December 31, 2016, $17 million of unrecognized compensation cost related to non-vested stock options is expected to be recognized over a weighted-average period of approximately 1 year.

Performance-Based and Restricted Stock Awards

In 2016, the company granted performance-based stock awards under the 2009 Plan to senior level executives of 240,505 shares that vest, subject to the attainment of pre-established minimum performance criteria, principally on the third anniversary of their date of grant. These awards are tied to either return on capital ("ROC") performance or relative total shareholder return ("TSR") performance versus that of the S&P 500. The actual number of shares issued in settlement of a vested award can range from zero to 200 percent of the target number of shares granted based upon the company’s attainment of specified performance targets at the end of a three-year period. Compensation expense related to these awards is recognized over the three-year performance period based on the fair value of the closing market price of the company’s common stock on the date of the grant and the estimated performance that will be achieved. Compensation expense for ROC awards will be adjusted during the three-year performance period based upon the estimated performance levels that will be achieved. TSR awards are measured at their grant date fair value and not subsequently re-measured.

There were 97,924 restricted stock units granted to employees during 2016. In addition, the company had previously granted restricted stock to certain key employees that vest after a designated service period ranging from 2 to 10 years although the majority of the restricted stock units vest at the end of a three-year service period. Generally, restricted stock does not earn quarterly dividends while vesting. Compensation expense related to the restricted stock units is recognized on a straight-line basis over the vesting period.

The weighted-average fair value of ROC performance-based stock awards and restricted stock units granted during 2016 was $93.46 and $98.18, respectively ($120.04 and $120.24 in 2015 and $121.16 and $122.55 in 2014). These fair values are based on the closing market price of Praxair's common stock on the grant date adjusted for dividends that will not be paid during the vesting period.

The weighted-average fair value of performance-based stock tied to relative TSR performance granted during 2016 was $124.18 per unit (none in 2015 and 2014), and was estimated using a Monte Carlo simulation performed as of the grant date.

The following table summarizes non-vested performance-based and restricted stock award activity as of December 31, 2016 and changes during the period then ended (shares based on target amounts, averages are calculated on a weighted basis):

	Performance-Based				Restricted Stock
	Number of Shares (000’s)		Average Grant Date Fair Value		Number of Shares (000’s)		Average Grant Date Fair Value
Non-vested at January 1, 2016	802		$	114.41	286		$	112.48
Granted	241		105.34		98		98.18
Vested	(109	)	103.79		(93	)	105.92
Cancelled and Forfeited	(220	)	105.63		(17	)	113.91
Non-vested at December 31, 2016	714		$	115.72	274		$	109.49

There are approximately 11 thousand performance-based shares and 11 thousand restricted stock shares that are non-vested at December 31, 2016 which will be settled in cash due to foreign regulatory limitations. The liability related to these grants reflects the current estimate of performance that will be achieved and the current common stock price.

As of December 31, 2016, based on current estimates of future performance, $19 million of unrecognized compensation cost related to performance-based awards and $11 million of unrecognized compensation cost related to the restricted stock awards is expected to be recognized primarily through the first quarter of 2019.

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Retirement Programs

12 Months Ended

Dec. 31, 2016

General Discussion of Pension and Other Postretirement Benefits [Abstract]

Retirement Programs

NOTE 16. RETIREMENT PROGRAMS

Defined Benefit Pension Plans

Praxair has two main U.S. retirement programs which are non-contributory defined benefit plans: the Praxair Pension Plan and the CBI Pension Plan. The latter program benefits primarily former employees of CBI Industries, Inc. which Praxair acquired in 1996. Effective July 1, 2002, the Praxair Pension Plan was amended to give participating employees a one-time choice to remain covered by the old formula or to elect coverage under a new formula. The old formula is based predominantly on years of service, age and compensation levels prior to retirement, while the new formula provides for an annual contribution to an individual account which grows with interest each year at a predetermined rate. Also, this new formula applies to all new employees hired after April 30, 2002 into businesses adopting this plan. The U.S. and international pension plan assets are comprised of a diversified mix of investments, including domestic and international corporate equities, government securities and corporate debt securities. Praxair has several plans that provide supplementary retirement benefits primarily to higher level employees that are unfunded and are nonqualified for federal tax purposes. Pension coverage for employees of certain of Praxair’s international subsidiaries generally is provided by those companies through separate plans. Obligations under such plans are primarily provided for through diversified investment portfolios, with some smaller plans provided for under insurance policies or by book reserves.

Multi-employer Pension Plans

In the United States Praxair participates in seven multi-employer defined benefit pension plans ("MEPs"), pursuant to the terms of collective bargaining agreements, covering approximately 200 union-represented employees. The collective bargaining agreements expire on different dates through 2021. In connection with such agreements, the Company is required to make periodic contributions to the MEPs in accordance with the terms of the respective collective bargaining agreements. Praxair’s participation in these plans is not material either at the plan level or in the aggregate. Praxair’s contributions to these plans were $2 million in 2016, 2015, and 2014 (these costs are not included in the tables that follow). For all MEPs, Praxair’s contributions were significantly less than 1% of the total contributions to each plan for 2015 and 2014. Total 2016 contributions were not yet available from the MEPs.

Praxair has obtained the most recently available Pension Protection Act ("PPA") zone status letters from the Trustees of the MEPs. The PPA classifies MEPs as either Red, Yellow or Green zone plans. Among other factors, plans in the Red zone are generally less than 65 percent funded; plans in the Yellow zone are generally 65 to 80 percent funded; and plans in the Green zone are generally at least 80 percent funded. According to the most current data available, four of the MEPs that the Company participates in are in a Red zone status; one is in a Yellow zone status; and two are in a Green zone status. As of December 31, 2016, the five Red and Yellow Zone plans have pending or have implemented financial improvement or rehabilitation plans. Praxair does not currently anticipate significant future obligations due to the funding status of these plans. If Praxair determined it was probable that it would withdraw from an MEP, the Company would record a liability for its portion of the MEP’s unfunded pension obligations, as calculated at that time. Historically, such withdrawal payments have not been significant.

Defined Contribution Plans

Praxair’s U.S. business employees are eligible to participate in the Praxair defined contribution savings plan. Employees may contribute up to 40% of their compensation, subject to the maximum allowable by IRS regulations. For the U.S. packaged gases business, company contributions to this plan are calculated as a percentage of salary based on age plus service. U.S. employees other than those in the packaged gases business have company contributions to this plan calculated on a graduated scale based on employee contributions to the plan. The cost for these defined contribution plans was $28 million in 2016, $28 million in 2015 and $26 million in 2014 (these costs are not included in the tables that follow).

The defined contribution plans include a non-leveraged employee stock ownership plan ("ESOP") which covers all employees participating in this plan. The collective number of shares of Praxair common stock in the ESOP totaled 2,703,391 at December 31, 2016.

Certain international subsidiaries of the company also sponsor defined contribution plans where contributions are determined under various formulas. The expense for these plans was $18 million in 2016 and $17 million in 2015 and 2014 (these expenses are not included in the tables that follow).

Postretirement Benefits Other Than Pensions (OPEB)

Praxair provides health care and life insurance benefits to certain eligible retired employees. These benefits are provided through various insurance companies and healthcare providers. Praxair is also obligated to make payments for a portion of postretirement benefits related to retirees of Praxair’s former parent. Additionally, as part of the CBI acquisition in 1996, Praxair assumed responsibility for healthcare and life insurance benefit obligations for CBI’s retired employees. All postretirement healthcare programs have cost caps that limit the company’s exposure to future cost increases. In addition, as part of the retirement elections made for July 1, 2002, eligible employees were given the choice of maintaining coverage in the current retiree medical design (as may be amended from time to time), or to move to a design whereby coverage would be provided, but with no Praxair subsidy whatsoever. Also, all new employees hired after April 30, 2002 into a business adopting these plans will not receive a company subsidy. Praxair does not currently fund its postretirement benefits obligations. Praxair’s retiree plans may be changed or terminated by Praxair at any time for any reason with no liability to current or future retirees.

Praxair uses a measurement date of December 31 for its pension and other post-retirement benefit plans.

Pension and Postretirement Benefit Costs

The components of net pension and OPEB costs for 2016, 2015 and 2014 are shown below:

(Millions of dollars) Year Ended December 31,	Pensions									OPEB
	2016			2015			2014			2016			2015			2014
Service cost	$	45		$	54		$	49		$	2		$	3		$	4
Interest cost	100			112			121			6			7			11
Expected return on plan assets	(157		)	(154		)	(155		)	—			—			—
Net amortization and deferral	59			79			60			(3		)	(2		)	(8		)
Net periodic benefit cost before pension settlement charges	$	47		$	91		$	75		$	5		$	8		$	7
Pension settlement charges *	4			7			7			—			—			—
Net periodic benefit cost	$	51		$	98		$	82		$	5		$	8		$	7

* 2016 includes a $4 million pension settlement charge related to lump sum benefits paid to retired senior managers in the third quarter. The third quarter of 2015 and the fourth quarter of 2014 both include charges of $7 million, related primarily to the retirement of senior managers in the United States (see Note 2).

Funded Status

The changes in benefit obligation and plan assets for Praxair’s pension and OPEB programs, including reconciliation of the funded status of the plans to amounts recorded in the consolidated balance sheet, as of December 31, 2016 and 2015 are shown below:

(Millions of dollars) Year Ended December 31,	Pensions
	2016						2015						OPEB
	U.S.			International			U.S.			International			2016			2015
Change in Benefit Obligation ("PBO")
Benefit obligation January 1	$	1,992		$	580		$	2,050		$	719		$	160		$	180
Service cost	31			14			36			18			2			3
Interest cost	70			30			80			32			6			7
Participant contributions	—			—			—			—			10			10
Plan amendment	—			(2		)	—			2			(7		)	—
Actuarial loss (gain)	104			76			(68		)	(41		)	4			(9		)
Benefits paid	(131		)	(33		)	(106		)	(32		)	(20		)	(24		)
Foreign currency translation	—			1			—			(118		)	1			(7		)
Benefit obligation, December 31	$	2,066		$	666		$	1,992		$	580		$	156		$	160
Accumulated benefit obligation ("ABO")	$	1,970		$	639		$	1,900		$	551
Change in Plan Assets
Fair value of plan assets, January 1	$	1,509		$	475		$	1,607		$	561		$	—		$	—
Actual return on plan assets	117			47			(11		)	18			—			—
Company contributions	—			11			—			15			—			—
Benefits paid from plan assets	(119		)	(26		)	(87		)	(28		)	—			—
Foreign currency translation	—			—			—			(91		)	—			—
Fair value of plan assets, December 31	$	1,507		$	507		$	1,509		$	475		$	—		$	—
Funded Status, End of Year	$	(559	)	$	(159	)	$	(483	)	$	(105	)	$	(156	)	$	(160	)
Recorded in the Balance Sheet
Other long-term assets	$	—		$	13		$	—		$	41		$	—		$	—
Other current liabilities	(7		)	(5		)	(12		)	(4		)	(12		)	(13		)
Other long-term liabilities	(552		)	(167		)	(471		)	(142		)	(144		)	(147		)
Net amount recognized, December 31	$	(559	)	$	(159	)	$	(483	)	$	(105	)	$	(156	)	$	(160	)
Amounts recognized in accumulated other comprehensive income (loss) consist of:
Net actuarial loss (gain)	$	832		$	189		$	782		$	135		$	(20	)	$	(25	)
Prior service cost (credit)	—			12			—			11			(8		)	(1		)
Deferred tax benefit (Note 5)	(318		)	(46		)	(299		)	(37		)	12			11
Amount recognized in accumulated other comprehensive income (loss) (Note 7)	$	514		$	155		$	483		$	109		$	(16	)	$	(15	)

The changes in plan assets and benefit obligations recognized in other comprehensive income in 2016 and 2015 are as follows:

	Pensions						OPEB
(Millions of dollars)	2016			2015			2016			2015
Current year net actuarial losses (gains)*	$	172		$	38		$	4		$	(9	)
Amortization of net actuarial gains (losses)	(60		)	(78		)	3			2
Plan amendment	(2		)	—			(7		)	—
Amortization of prior service credits (costs)	1			(1		)	—			—
Pension settlements (Note 2)	(4		)	(7		)	—			—
Foreign currency translation and other	(2		)	(24		)	(2		)	6
Total recognized in other comprehensive income	$	105		$	(72	)	$	(2	)	$	(1	)

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 * Pension net actuarial losses in 2016 are primarily driven by liability experience as well as lower U.S. discount rates. Pension net actuarial losses in 2015 relate primarily to lower actual returns on plan assets when compared with 2014 offset by higher U.S. discount rates. OPEB net actuarial losses in 2016 are largely due to unfavorable plan experience whereas gains in 2015 relate primarily to higher discount rates and favorable plan experience.

The amounts in accumulated other comprehensive income (loss) that are expected to be recognized as components of net periodic benefit cost during 2017 are as follows:

(Millions of dollars)	Pension		OPEB
Net actuarial loss (gain)	$	65	$	2
Prior service cost (credit)	2		1
	$	67	$	3

The following table provides information for pension plans where the accumulated benefit obligation exceeds the fair value of the plan assets:

(Millions of dollars) Year Ended December 31,	Pensions
	2016				2015
	U.S.		International		U.S.		International
Projected benefit obligation ("PBO")	$	2,066	$	372	$	1,992	$	336
Accumulated benefit obligation ("ABO")	$	1,970	$	365	$	1,900	$	324
Fair value of plan assets	$	1,507	$	199	$	1,509	$	188

Assumptions

The assumptions used to determine benefit obligations are as of the respective balance sheet dates and the assumptions used to determine net benefit cost are as of the previous year-end, as shown below:

	Pensions
	U.S.				International				OPEB
	2016		2015		2016		2015		2016		2015
Weighted average assumptions used to determine benefit obligations at December 31,
Discount rate	4.05	%	4.32	%	5.09	%	5.32	%	4.21	%	4.24	%
Rate of increase in compensation levels	3.25	%	3.25	%	3.73	%	3.57	%	N/A		N/A
Weighted average assumptions used to determine net periodic benefit cost for years ended December 31,
Discount rate (1)	4.32	%	3.95	%	5.32	%	5.36	%	4.24	%	4.48	%
Rate of increase in compensation levels	3.25	%	3.25	%	3.57	%	3.72	%	N/A		N/A
Expected long-term rate of return on plan assets (2)	8.00	%	8.00	%	7.92	%	7.71	%	N/A		N/A

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(1) At the end of 2015, the Company changed the approach used to measure service and interest costs for significant pension and OPEB plans. Through 2015, Praxair measured service and interest costs utilizing a single weighted-average discount rate for each plan derived from the yield curve used to measure the respective plan obligations. Effective in 2016, the Company elected to measure service and interest costs for significant plans by applying the specific spot rates along that yield curve to the plan's expected cash flows ("spot rate approach"). The Company believes the new spot rate approach provides a more precise measurement of service and interest costs by aligning the timing of the plans' expected cash flows to the corresponding spot rates on the yield curve. This change does not affect the measurement of plan obligations nor the funded status of the plans. The Company has accounted for this change as a change in accounting estimate and, accordingly has accounted for it on a prospective basis.

(2) The expected long term rate of return on the U.S. and international plan assets is estimated based on the plans' investment strategy and asset allocation, historical capital market performance and, to a lesser extent, historical plan performance. For the U.S. plans, the expected rate of return of 8.00% was derived based on the target asset allocation of 50%-70% equity securities (approximately 9.5% expected return), 20%-40% fixed income securities (approximately 5.5% expected return) and 2% - 10% real estate funds (approximately 7% expected return). For the international plans, the expected rate of return was derived based on the weighted average target asset allocation of 30%-50% equity securities (approximately 10% expected return), 40%-60% fixed income securities (approximately 7.5% expected return), and 0%-10% alternative investments (approximately 7.5% expected return). For the U.S. plan assets, the actual annualized total returns for the most recent 10-year and 20-year periods ended December 31, 2016 were approximately 4.9% and 6.7%, respectively. For the international plan assets, the actual annualized total returns for the same two periods were approximately 6.9% and 8.6%, respectively. Changes to plan asset allocations and investment strategy over this time period limit the value of historical plan performance as factor in estimating the expected long term rate of return. For 2017, the expected long-term rate of return on plan assets will be 8.00% for the U.S. plans. Expected weighted average returns for international plans will vary.    

	OPEB
Assumed healthcare cost trend rates	2016		2015
Healthcare cost trend assumed	7.00	%	7.00	%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)	5.00	%	5.00	%
Year that the rate reaches the ultimate trend rate	2020		2020

These healthcare-cost trend rate assumptions have an impact on the amounts reported. However, cost caps limit the impact on the net OPEB benefit cost in the U.S. To illustrate the effect, a one-percentage point change in assumedhealthcare cost trend rates would have the following effects:

	One-Percentage Point
(Millions of dollars)	Increase		Decrease
Effect on the total of service and interest cost components of net OPEB benefit cost	$	—	$	—
Effect on OPEB benefit obligation	$	4	$	(3	)

Pension Plan Assets

The investments of the U.S. pension plan are managed to meet the future expected benefit liabilities of the plan over the long term by investing in diversified portfolios consistent with prudent diversification and historical and expected capital market returns. When Praxair became an independent, publicly traded company in 1992, its former parent retained all liabilities for its term-vested and retired employees. Praxair’s plan received assets and retained pension liabilities for its own active employee base. Therefore, the liabilities under the Praxair U.S. pension plan mature at a later date compared to pension funds of other similar companies. Investment strategies are reviewed by the Finance and Pension Committee of the company’s Board of Directors and investment performance is tracked against appropriate benchmarks. There are no concentrations of risk as it relates to the assets within the plans.

The international pension plans are managed individually based on diversified investment portfolios, with different target asset allocations that vary for each plan. Praxair’s U.S. and international pension plans’ weighted-average asset allocations at December 31, 2016 and 2015, and the target asset allocation range for 2016, by major asset category, are as follows:

	U.S.					International
Asset Category	Target	2016		2015		Target	2016		2015
Equity securities	50%-70%	59	%	62	%	30%-50%	35	%	50	%
Fixed income securities	20%-40%	32	%	30	%	40%-60%	56	%	41	%
Other	2% - 10%	9	%	8	%	0%-10%	9	%	9	%

The following table summarizes pension assets measured at fair value by asset category at December 31, 2016 and 2015. During the years presented, there has been no transfer of assets between Levels 1, 2 and 3 (see Note 13 for definition of the levels):

	Fair Value Measurements Using
	Level 1				Level 2				Level 3 **				Total
(Millions of dollars)	2016		2015		2016		2015		2016		2015		2016		2015
Cash and cash equivalents	$	3	$	1	$	—	$	—	$	—	$	—	$	3	$	1
Equity securities:
U.S. equities	344		302		—		—		—		—		344		302
International equities	37		62		—		—		—		—		37		62
Mutual funds	2		236		—		—		—		—		2		236
Fixed income securities:
U.S. government bonds	—		—		51		50		—		—		51		50
International government bonds	—		—		159		89		—		—		159		89
Mutual funds	104		91		—		—		—		—		104		91
Corporate bonds	—		—		194		163		—		—		194		163
Other:
Insurance contracts	—		—		—		—		45		43		45		43
Real Estate Funds	—		—		—		—		135		123		135		123
Total plan assets at fair value, December 31,	$	490	$	692	$	404	$	302	$	180	$	166	$	1,074	$	1,160
Pooled funds *													940		824
Total fair value plan assets December 31,													$	2,014	$	1,984

* Pooled funds are measured using the net asset value ("NAV") as a practical expedient for fair value as permissible under the accounting standard for fair value measurements and have not been categorized in the fair value hierarchy in accordance with recently issued accounting standards updates related to Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share. Pooled fund NAVs are provided by the trustee and are determined by reference to the fair value of the underlying securities of the trust, less its liabilities, which are valued primarily through the use of directly or indirectly observable inputs. Depending on the pooled fund, underlying securities may include marketable equity securities or fixed income securities.

** The following table summarizes changes in fair value of the pension plan assets classified as level 3 for the periods ended December 31, 2016 and 2015:

(Millions of dollars)	Insurance Contracts			Real Estate Funds		Total
Balance, December 31, 2014	$	53		$	110	$	163
Gain/(Loss) for the period	(4		)	13		9
Acquisitions	—			—		—
Foreign currency translation	(6		)	—		(6		)
Balance, December 31, 2015	43			123		166
Gain/(Loss) for the period	3			12		15
Acquisitions	—			—		—
Foreign currency translation	(1		)	—		(1		)
Balance, December 31, 2016	$	45		$	135	$	180

The descriptions and fair value methodologies for the U.S. and international pension plan assets are as follows:

Cash and Cash Equivalents – This category includes cash and short-term interest bearing investments with maturities of three months or less. Investments are valued at cost plus accrued interest. Cash and cash equivalents are classified within level 1 of the valuation hierarchy.

Equity Securities – This category is comprised of shares of common stock in U.S. and international companies from a diverse set of industries and size. Common stock is valued at the closing market price reported on a U.S. or international exchange where the security is actively traded. Equity securities are classified within level 1 of the valuation hierarchy.

Mutual Funds – These categories consist of publicly and privately managed funds that invest primarily in marketable equity and fixed income securities. The fair value of these investments is determined by reference to the net asset value of the underlying securities of the fund. Shares of publicly traded mutual funds are valued at the net asset value quoted on the exchange where the fund is traded and are classified as level 1 within the valuation hierarchy.

U.S. and International Government Bonds – This category includes U.S. treasuries, U.S. federal agency obligations and international government debt. The majority of these investments do not have quoted market prices available for a specific government security and so the fair value is determined using quoted prices of similar securities in active markets and is classified as level 2 within the valuation hierarchy.

Corporate Bonds – This category is comprised of corporate bonds of U.S. and international companies from a diverse set of industries and size. The fair values for U.S. and international corporate bonds are determined using quoted prices of similar securities in active markets and observable data or broker or dealer quotations. The fair values for these investments are classified as level 2 within the valuation hierarchy.

Insurance Contracts – The fair value of insurance contracts is determined based on the cash surrender value of the insurance contract, which is determined based on such factors as the fair value of the underlying assets and discounted cash flows. These contracts are with highly rated insurance companies. Insurance contracts are classified within level 3 of the valuation hierarchy.

Real Estate Funds – This category includes real estate properties, partnership equities and investments in operating companies. The fair value of the assets is determined using discounted cash flows by estimating an income stream for the property plus a reversion into a present value at a risk adjusted rate. Yield rates and growth assumptions utilized are derived from market transactions as well as other financial and industry data. The fair value for these investments are classified within level 3 of the valuation hierarchy.

Contributions

At a minimum, Praxair contributes to its pension plans to comply with local regulatory requirements (e.g., ERISA in the United States). Discretionary contributions in excess of the local minimum requirements are made based on many factors, including long-term projections of the plans' funded status, the economic environment, potential risk of overfunding, pension insurance costs and alternative uses of the cash. Changes to these factors can impact the timing of discretionary contributions from year to year. Pension contributions were $11 million in 2016, $15 million in 2015 and $18 million in 2014. Estimated required contributions for 2017 are currently expected to be in the area of $10 million to $15 million.

Estimated Future Benefit Payments

The following table presents estimated future benefit payments, net of participants contributions:

(Millions of dollars)	Pensions
Year Ended December 31,	U.S.		International		OPEB
2017	$	105	$	32	$	13
2018	115		32		12
2019	122		35		12
2020	123		37		11
2021	126		38		11
2022-2026	661		210		47

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments And Contingencies

NOTE 17. COMMITMENTS AND CONTINGENCIES

The company accrues non income-tax liabilities for contingencies when management believes that a loss is probable and the amounts can be reasonably estimated, while contingent gains are recognized only when realized. In the event any losses are sustained in excess of accruals, they will be charged against income at that time. Attorney fees are recorded as incurred. Commitments represent obligations, such as those for future purchases of goods or services, that are not yet recorded on the company’s balance sheet as liabilities. The company records liabilities for commitments when incurred (i.e., when the goods or services are received).

Contingent Liabilities

Praxair is subject to various lawsuits and government investigations that arise from time to time in the ordinary course of business. These actions are based upon alleged environmental, tax, antitrust and personal injury claims, among others. Praxair has strong defenses in these cases and intends to defend itself vigorously. It is possible that the company may incur losses in connection with some of these actions in excess of accrued liabilities. Management does not anticipate that in the aggregate such losses would have a material adverse effect on the company’s consolidated financial position or liquidity; however, it is possible that the final outcomes could have a significant impact on the company’s reported results of operations in any given period.

Significant matters are:

• During May 2009, the Brazilian government published Law 11941/2009 instituting a new voluntary amnesty program (“Refis Program”) which allowed Brazilian companies to settle certain federal tax disputes at reduced amounts. During the 2009 third quarter, Praxair decided that it was economically beneficial to settle many of its outstanding federal tax disputes and such disputes were enrolled in the Refis Program, subject to final calculation and review by the Brazilian federal government. The Company recorded estimated liabilities based on the terms of the Refis Program. Since 2009, Praxair has been unable to reach final agreement on the calculations and recently initiated litigation against the government in an attempt to resolve certain items. Open issues relate to the following matters: (i) application of cash deposits and net operating loss carryforwards to satisfy obligations and (ii) the amount of tax reductions available under the Refis Program. It is difficult to estimate the timing of resolution of legal matters in Brazil.

• At December 31, 2016 the most significant non-income and income tax claims in Brazil, after enrollment in the Refis Program, relate to state VAT tax matters and a federal income tax matter where the taxing authorities are challenging the tax rate that should be applied to income generated by a subsidiary company. The total estimated exposure relating to such claims, including interest and penalties, as appropriate, is approximately $225 million. Praxair has not recorded any liabilities related to such claims based on management judgments, after considering judgments and opinions of outside counsel. Because litigation in Brazil historically takes many years to resolve, it is very difficult to estimate the timing of resolution of these matters; however, it is possible that certain of these matters may be resolved within the near term. The company is vigorously defending against the proceedings.

• On September 1, 2010, CADE ("Brazilian Administrative Council for Economic Defense") announced alleged anticompetitive activity on the part of five industrial gas companies in Brazil and imposed fines on all five companies. Originally, CADE imposed a civil fine of R$2.2 billion Brazilian reais (US$675 million) against White Martins, the Brazil-based subsidiary of Praxair, Inc. In response to a motion for clarification, the fine was reduced to R$1.7 billion Brazilian reais (US$522 million) due to a calculation error made by CADE. The amount of the fine is subject to indexation using SELIC. On September 2, 2010, Praxair issued a press release and filed a report on Form 8-K rejecting all claims and stating that the fine represents a gross and arbitrary disregard of Brazilian law.

On October 19, 2010, White Martins filed an annulment petition (“appeal”) with the Federal Court in Brasilia seeking to have the fine against White Martins entirely overturned. In order to suspend payment of the fine pending the completion of the appeal process, Brazilian law required that the company tender a form of guarantee in the amount of the fine as security. Initially, 50% of the guarantee was satisfied by letters of credit with a financial institution and 50% by equity of a Brazilian subsidiary. On April 15, 2016, the Ninth Federal Court in Brasilia allowed White Martins to withdraw and cancel the letters of credit. Accordingly, the guarantee is currently satisfied solely by equity of a Brazilian subsidiary.

On September 14, 2015, the Ninth Federal Court of Brasilia overturned the fine against White Martins and declared the original CADE administrative proceeding to be null and void. On June 30, 2016, CADE filed an appeal against this decision with the Federal Circuit Court in Brasilia.

Praxair strongly believes that the allegations are without merit and that the fine will be entirely overturned during the appeal process. The company further believes that it has strong defenses and will vigorously defend against the allegations and related fine up to such levels of the Federal Courts in Brazil as may be necessary. Because appeals in Brazil historically take many years to resolve, it is very difficult to estimate when the appeal will be finally decided. Based on management judgments, after considering judgments and opinions of outside counsel, no reserve has been recorded for this proceeding as management does not believe that a loss is probable.

Commitments and Contractual Obligations

The following table sets forth Praxair’s material commitments and contractual obligations as of December 31, 2016, excluding leases, tax liabilities for uncertain tax positions, long-term debt, other post retirement and pension obligations which are summarized elsewhere in the financial statements (see Notes 4, 5, 11, and 16):

(Millions of dollars) Expiring through December 31,	Unconditional Purchase Obligations		Construction Commitments
2017	$	585	$	836
2018	534		271
2019	476		125
2020	422		—
2021	434		—
Thereafter	2,645		—
	$	5,096	$	1,232

Unconditional purchase obligations of $5,096 million represent contractual commitments under various long and short-term take-or-pay arrangements with suppliers and are not included on Praxair's balance sheet. These obligations are primarily minimum-purchase commitments for helium, electricity, natural gas and feedstock used to produce atmospheric and process gases. A significant portion of these obligations is passed on to customers through similar take-or-pay or other contractual arrangements. Purchase obligations that are not passed along to customers through such contractual arrangements are subject to market conditions, but do not represent a material risk to Praxair. During 2016, payments related to Praxair's unconditional purchase obligations totaled $887 million, including $444 million for electricity and $150 million for natural gas. Approximately $2,770 million of the purchase obligations relates to power and is intended to secure the uninterrupted supply of electricity and feedstock to Praxair's plants to reliably satisfy customer product supply obligations, and extend through 2030. Certain of the power contracts contain various cancellation provisions requiring supplier agreement, and many are subject to annual escalations based on local inflation factors. The purchase obligations also include a multi-year contract for silane, with a total purchase obligation of $86 million as of December 31, 2016. At December 31, 2016, Praxair's current selling prices and estimated future demand for silane are in excess of its contractual purchase obligations under the contract.

Construction commitments of $1,232 million represent outstanding commitments to complete authorized construction projects as of December 31, 2016. A significant portion of Praxair’s capital spending is related to the construction of new production facilities to satisfy customer commitments which may take a year or more to complete.

Unconsolidated equity investees had total debt of approximately $305 million at December 31, 2016, which was non-recourse to Praxair. Additionally, Praxair pledged its interest in an unconsolidated equity investment as collateral for $22 million of debt held by that same equity investee. Praxair has no significant financing arrangements with closely-held related parties.

At December 31, 2016, Praxair had undrawn outstanding letters of credit, bank guarantees and surety bonds valued at approximately $415 million from financial institutions. These relate primarily to customer contract performance guarantees (including plant construction in connection with certain on-site contracts), self-insurance claims and other commercial and governmental requirements, including foreign litigation matters.

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Segments

12 Months Ended

Dec. 31, 2016

Segment Reporting [Abstract]

Segment Information

NOTE 18. SEGMENT INFORMATION

The company’s operations are organized into five reportable segments, four of which have been determined on a geographic basis of segmentation: North America, Europe, South America and Asia. In addition, Praxair operates its worldwide surface technologies business through its wholly-owned subsidiary, Praxair Surface Technologies, Inc., which represents the fifth reportable segment.

Praxair’s operations consist of two major product lines: industrial gases and surface technologies. The industrial gases product line centers on the manufacturing and distribution of atmospheric gases (oxygen, nitrogen, argon, rare gases) and process gases (carbon dioxide, helium, hydrogen, electronic gases, specialty gases, acetylene). Many of these products are co-products of the same manufacturing process. Praxair manufactures and distributes nearly all of its products and manages its customer relationships on a regional basis. Praxair’s industrial gases are distributed to various end-markets within a regional segment through one of three basic distribution methods: on-site or tonnage; merchant or bulk; and packaged or cylinder gases. The distribution methods are generally integrated in order to best meet the customer’s needs and very few of its products can be economically transported outside of a region. Therefore, the distribution economics are specific to the various geographies in which the company operates and are consistent with how management assesses performance.

Praxair evaluates the performance of its reportable segments based primarily on operating profit, excluding inter-company royalties and items not indicative of ongoing business trends. Corporate and globally managed expenses, and research and development costs relating to Praxair’s global industrial gases business, are allocated to operating segments based on sales.

The table below presents information about reportable segments for the years ended December 31, 2016, 2015 and 2014.

(Millions of dollars)	2016		2015		2014
Sales (a)
North America	$	5,592	$	5,865	$	6,436
Europe	1,392		1,320		1,546
South America	1,399		1,431		1,993
Asia	1,555		1,551		1,619
Surface Technologies	596		609		679
	$	10,534	$	10,776	$	12,273

	2016			2015			2014
Operating Profit
North America	$	1,430		$	1,558		$	1,580
Europe	273			250			291
South America	257			291			449
Asia	276			289			303
Surface Technologies	102			105			123
Segment operating profit	2,338			2,493			2,746
Cost reduction program and other charges (Note 2)	(100		)	(172		)	(138		)
Total operating profit	$	2,238		$	2,321		$	2,608

	2016		2015		2014
Total Assets (b)
North America	$	10,019	$	9,748	$	10,187
Europe	2,928		2,704		2,996
South America	2,748		2,124		2,718
Asia	2,984		3,113		3,194
Surface Technologies	653		630		674
	$	19,332	$	18,319	$	19,769

	2016		2015		2014
Depreciation and Amortization
North America	$	614	$	609	$	611
Europe	155		145		168
South America	133		135		177
Asia	179		176		170
Surface Technologies	41		41		44
	$	1,122	$	1,106	$	1,170

	2016		2015		2014
Capital Expenditures and Acquisitions
North America	$	989	$	869	$	837
Europe	402		227		319
South America	232		285		373
Asia	165		208		310
Surface Technologies	40		34		56
	$	1,828	$	1,623	$	1,895

	2016		2015		2014
Sales by Product Group
Atmospheric gases and related	$	7,329	$	7,595	$	8,623
Process gases and other	2,609		2,572		2,971
Surface technologies	596		609		679
	$	10,534	$	10,776	$	12,273

	2016		2015		2014
Sales by Major Country
United States	$	4,623	$	4,771	$	5,171
Brazil	1,091		1,107		1,511
Other – foreign	4,820		4,898		5,591
	$	10,534	$	10,776	$	12,273

	2016		2015		2014
Long-lived Assets by Major Country (c)
United States	$	4,922	$	4,825	$	4,817
Brazil	1,262		986		1,344
Other – foreign	5,293		5,187		5,836
	$	11,477	$	10,998	$	11,997

________________________

(a) Sales reflect external sales only. Intersegment sales, primarily from North America to other segments, were not material.

(b) Includes equity investments as of December 31, as follows:

(Millions of dollars)	2016		2015		2014
North America	$	121	$	127	$	132
Europe	243		195		207
Asia	353		343		354
	$	717	$	665	$	693

Changes primarily relate to equity investment earnings, dividends and currency impacts.

(c) Long-lived assets include property, plant and equipment – net.

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Quarterly Data

12 Months Ended

Dec. 31, 2016

Quarterly Financial Information Disclosure [Abstract]

Quarterly Data (Unaudited)

NOTE 19. QUARTERLY DATA (UNAUDITED)

(Dollar amounts in millions, except per share data)

2016	1Q (a)		2Q		3Q (a)		4Q		YEAR (a)
Sales	$	2,509	$	2,665	$	2,716	$	2,644	$	10,534
Cost of sales, exclusive of depreciation and amortization	$	1,381	$	1,468	$	1,533	$	1,478	$	5,860
Depreciation and amortization	$	272	$	281	$	284	$	285	$	1,122
Operating profit	$	554	$	588	$	497	$	599	$	2,238
Net income – Praxair, Inc.	$	356	$	399	$	339	$	406	$	1,500
Basic Per Share Data
Net income	$	1.25	$	1.40	$	1.19	$	1.42	$	5.25
Weighted average shares (000’s)	285,429		285,702		285,858		285,720		285,677
Diluted Per Share Data
Net income	$	1.24	$	1.39	$	1.18	$	1.41	$	5.21
Weighted average shares (000’s)	286,665		287,727		288,195		287,956		287,757

2015	1Q		2Q (a)		3Q (a)		4Q		YEAR (a)
Sales	$	2,757	$	2,738	$	2,686	$	2,595	$	10,776
Cost of sales, exclusive of depreciation and amortization	$	1,530	$	1,516	$	1,488	$	1,426	$	5,960
Depreciation and amortization	$	277	$	278	$	276	$	275	$	1,106
Operating profit	$	623	$	480	$	594	$	624	$	2,321
Net income – Praxair, Inc.	$	416	$	308	$	401	$	422	$	1,547
Basic Per Share Data
Net income	$	1.44	$	1.07	$	1.40	$	1.48	$	5.39
Weighted average shares (000’s)	289,143		287,939		285,651		285,288		287,005
Diluted Per Share Data
Net income	$	1.43	$	1.06	$	1.40	$	1.47	$	5.35
Weighted average shares (000’s)	291,652		290,102		287,311		286,856		289,055

________________________

(a) 2016 and 2015 include the impact of the following charges (see Notes 2, 11 & 16):

(Millions of dollars)	Operating Profit/ (Loss)			Net Income/ (Loss)			Diluted Earnings Per Share
Bond Redemption -Q1	$	—		$	(10	)	$	(0.04	)
Cost reduction program and other charges - Q3	(96		)	(63		)	(0.22		)
Pension settlement charge - Q3	(4		)	(3		)	(0.01		)
Year 2016	$	(100	)	$	(76	)	$	(0.27	)
Cost reduction program and other charges - Q2	$	(146	)	$	(112	)	$	(0.39	)
Cost reduction program and other charges - Q3	(19		)	(13		)	(0.04		)
Pension settlement charge - Q3	(7		)	(5		)	(0.02		)
Year 2015	$	(172	)	$	(130	)	$	(0.45	)

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2016

Accounting Policies [Abstract]

Principles of Consolidation

Principles of Consolidation– The consolidated financial statements were prepared in conformity with accounting principles generally accepted in the United States of America (" U.S. GAAP") and include the accounts of all significant subsidiaries where control exists and, in limited situations, variable-interest entities where the company is the primary beneficiary. Intercompany transactions and balances are eliminated in consolidation and any significant related-party transactions have been disclosed.

Changes in ownership interest that result either in consolidation or deconsolidation of an investment are recorded at fair value through earnings, including the retained ownership interest, while changes that do not result in either consolidation or deconsolidation of a subsidiary are treated as equity transactions.

Equity Method Investments and Joint Ventures Disclosure

Equity investments generally consist of 20% to 50% owned operations where the company exercises significant influence, but does not have control. Equity income from equity investments in corporations is reported on an after-tax basis. Pre-tax income from equity investments that are partnerships or limited-liability corporations ("LLC") is included in other income (expenses) – net with related taxes included in Income taxes. Equity investments are reviewed for impairment whenever events or circumstances reflect that an impairment loss may have incurred.

Cost Method Investments, Policy

Operations less than 20% owned, where the company does not exercise significant influence, are generally carried at cost.

Use of Estimates

Use of Estimates– The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. While actual results could differ, management believes such estimates to be reasonable.

Revenue Recognition

Revenue Recognition– Product sales represent approximately 87% of consolidated sales. Revenue is recognized when a firm sales agreement exists, collectability of a fixed or determinable sales price is reasonably assured, and when title and risks of ownership transfer to the customer for product sales or, in the case of other revenues when obligations are satisfied or services are performed. Sales returns and allowances are not a normal practice in the industry and are not significant.

A small portion of the company’s revenues relate to long-term construction contracts and are generally recognized using the percentage-of-completion method. Under this method, revenues from sales of major equipment, such as large air-separation facilities, are recognized based primarily on cost incurred to date compared with total estimated cost. Changes to total estimated cost and anticipated losses, if any, are recognized in the period determined.

For contracts that contain multiple products and/or services, amounts assigned to each component are based on its objectively determined fair value, such as the sales price for the component when it is sold separately or competitor prices for similar components.

Certain of the company’s facilities that are built to provide product to a specific customer are required to be accounted for as leases. The associated revenue streams are classified as rental revenue and are not significant.

Amounts billed for shipping and handling fees are recorded as sales, generally on FOB destination terms, and costs incurred for shipping and handling are recorded as cost of sales.

Amounts billed for sales and use taxes, value-added taxes, and certain excise and other specific transactional taxes imposed on revenue producing transactions are presented on a net basis and are not included in sales in the consolidated statement of income.

Cost of Sales

costs incurred for shipping and handling are recorded as cost of sales.

Cash Equivalents

Cash Equivalents– Cash equivalents are considered to be highly liquid securities with original maturities of three months or less.

Inventories

Inventories– Inventories are stated at the lower of cost or market. Cost is determined using the average-cost method.

Property, Plant and Equipment

Property, Plant and Equipment – Net– Property, plant and equipment are carried at cost, net of accumulated depreciation. The company capitalizes interest as part of the cost of constructing major facilities (see Note 7). Depreciation is calculated on the straight-line method based on the estimated useful lives of the assets, which range from 3 years to 40 years (see Note 8). Praxair uses accelerated depreciation methods for tax purposes where appropriate. Maintenance of property, plant and equipment is generally expensed as incurred.

The company performs a test for impairment whenever events or changes in circumstances indicate that the carrying amount of an individual asset or asset group may not be recoverable. Should projected undiscounted future cash flows be less than the carrying amount of the asset or asset group, an impairment charge reducing the carrying amount to fair value is required. Fair value is determined based on the most appropriate valuation technique, including discounted cash flows.

Asset - Retirement Obligations

Asset-Retirement Obligations – An asset-retirement obligation is recognized in the period in which sufficient information exists to determine the fair value of the liability with a corresponding increase to the carrying amount of the related property, plant and equipment which is then depreciated over its useful life. The liability is initially measured at discounted fair value and then accretion expense is recorded in each subsequent period. The company’s asset-retirement obligations are primarily associated with its on-site long-term supply arrangements where the company has built a facility on land leased from the customer and is obligated to remove the facility at the end of the contract term. The company’s asset-retirement obligations are not material to its consolidated financial statements.

Foreign Currency Translation

Foreign Currency Translation– For most foreign operations, the local currency is the functional currency and translation gains and losses are reported as part of the accumulated other comprehensive income (loss) component of equity as a cumulative translation adjustment (see Note 7).

Financial Instruments

Financial Instruments– Praxair enters into various derivative financial instruments to manage its exposure to fluctuating interest and currency exchange rates and energy costs. Such instruments primarily include interest-rate swap and treasury rate lock agreements; currency-swap agreements; forward contracts; currency options; and commodity-swap agreements. These instruments are not entered into for trading purposes. Praxair only uses commonly traded and non-leveraged instruments.

There are three types of derivatives the company enters into: (i) those relating to fair-value exposures, (ii) those relating to cash-flow exposures, and (iii) those relating to foreign currency net investment exposures. Fair-value exposures relate to recognized assets or liabilities, and firm commitments; cash-flow exposures relate to the variability of future cash flows associated with recognized assets or liabilities, or forecasted transactions; and net investment exposures relate to the impact of foreign currency exchange rate changes on the carrying value of net assets denominated in foreign currencies.

When a derivative is executed and hedge accounting is appropriate, it is designated as either a fair-value hedge, cash-flow hedge, or a net investment hedge. Currently, Praxair designates all interest-rate and treasury rate locks as hedges for accounting purposes; however, currency contracts are generally not designated as hedges for accounting purposes unless they are related to forecasted transactions. Whether designated as hedges for accounting purposes or not, all derivatives are linked to an appropriate underlying exposure. On an ongoing basis, the company assesses the hedge effectiveness of all derivatives designated as hedges for accounting purposes to determine if they continue to be highly effective in offsetting changes in fair values or cash flows of the underlying hedged items. If it is determined that the hedge is not highly effective, then hedge accounting will be discontinued prospectively.

Changes in the fair value of derivatives designated as fair-value hedges are recognized in earnings as an offset to the change in the fair values of the underlying exposures being hedged. The changes in fair value of derivatives that are designated as cash-flow hedges are deferred in accumulated other comprehensive income (loss) and are reclassified to earnings as the underlying hedged transaction affects earnings. Any ineffectiveness is recognized in earnings immediately. Hedges of net investments in foreign subsidiaries are recognized in the cumulative translation adjustment component of accumulated other comprehensive income (loss) on the consolidated balance sheets to offset translation gains and losses associated with the hedged net investment. Derivatives that are entered into for risk-management purposes and are not designated as hedges (primarily related to anticipated net income and currency derivatives other than for firm commitments) are recorded at their fair market values and recognized in current earnings.

See Note 12 for additional information relating to financial instruments.

Goodwill

Goodwill– Acquisitions are accounted for using the acquisition method which requires allocation of the purchase price to assets acquired and liabilities assumed based on estimated fair values. Any excess of the purchase price over the fair value of the assets and liabilities acquired is recorded as goodwill. Allocations of the purchase price are based on preliminary estimates and assumptions at the date of acquisition and are subject to revision based on final information received, including appraisals and other analyses which support underlying estimates.

The company performs a goodwill impairment test annually in the second quarter or more frequently if events or circumstances indicate that an impairment loss may have been incurred. The applicable guidance allows an entity to first assess qualitative factors to determine if it is more likely than not that the fair value of a reporting unit is less than carrying value. If it is determined that it is more likely than not that the fair value of a reporting unit is less than carrying value then the company will estimate and compare the fair value of its reporting units to their carrying value, including goodwill. Reporting units are determined based on one level below the operating segment level. As applicable, fair value is determined through the use of projected future cash flows, multiples of earnings and sales and other factors. Such analysis requires the use of certain market assumptions and discount factors, which are subjective in nature.

See Note 9 for additional information relating to goodwill.

Other Intangible Assets

Other Intangible Assets– Customer and license/use agreements, non-compete agreements and patents and other intangibles are amortized over the estimated period of benefit. The determination of the estimated period of benefit will be dependent upon the use and underlying characteristics of the intangible asset. Praxair evaluates the recoverability of its intangible assets subject to amortization when facts and circumstances indicate that the carrying value of the asset may not be recoverable. If the carrying value is not recoverable, impairment is measured as the amount by which the carrying value exceeds its estimated fair value. Fair value is generally estimated based on either appraised value or other valuation techniques.

See Note 10 for additional information relating to other intangible assets.

Income Taxes

Income Taxes– Deferred income taxes are recorded for the temporary differences between the financial statement and tax bases of assets and liabilities using currently enacted tax rates. Valuation allowances are established against deferred tax assets whenever circumstances indicate that it is more likely than not that such assets will not be realized in future periods.

Under the guidance for accounting for uncertainty in income taxes, the company can recognize the benefit of an income tax position only if it is more likely than not (greater than 50%) that the tax position will be sustained upon tax examination, based solely on the technical merits of the tax position. Otherwise, no benefit can be recognized. The tax benefits recognized are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Additionally, the company accrues interest and related penalties, if applicable, on all tax exposures for which reserves have been established consistent with jurisdictional tax laws. Interest and penalties are classified as income tax expense in the financial statements.

See Note 5 for additional information relating to income taxes.

Retirement Benefits

Retirement Benefits – Most Praxair employees participate in a form of defined benefit or contribution retirement plan, and additionally certain employees are eligible to participate in various post-employment health care and life insurance benefit plans. The cost of contribution plans is recognized in the year earned while the cost of other plans is recognized over the employees’ expected service period to the company, all in accordance with the applicable accounting standards. The funded status of the plans is recorded as an asset or liability in the consolidated balance sheets. Funding of retirement benefits varies and is in accordance with local laws and practices.

See Note 16 for additional information relating to retirement programs.

Share-based Compensation

Share-based Compensation– The company has granted share-based awards which consist of stock options, restricted stock and performance-based stock. Share-based compensation expense is generally recognized on a straight-line basis over the stated vesting period. For stock awards granted to full-retirement-eligible employees, compensation expense is recognized over the period from the grant date to the date retirement eligibility is achieved. For performance-based awards, compensation expense is recognized only if it is probable that the performance condition will be achieved.

See Note 15 for additional disclosures relating to share-based compensation.

New Accounting Pronouncements, Policy

Accounting Standards Implemented in 2016

The following standards were effective for Praxair in 2016 and their adoption did not have a significant impact on the consolidated financial statements:

• Accounting for Share-based Compensation - In June 2014, the FASB issued updated guidance on the accounting for share-based payments when the terms of an award provide that a performance target could be achieved after the requisite service period. The adoption of this guidance did not have a significant impact on the condensed consolidated financial statements.

• Improvements to Employee Share-Based Payment Accounting - In March 2016, the FASB issued updated guidance on the accounting for employee share-based payments. The new guidance, among other changes, requires that all excess tax benefits and deficiencies associated with share-based payment awards be recorded in Income taxes in the statement of income in the period in which they occur, and within operating cash flows. Previously, such excess tax benefits were recorded as direct credits to equity (not via the statement of income), and as financing cash flows.

Effective in the second quarter 2016, Praxair elected to adopt the requirements of this new accounting standard. Accordingly, income tax expense and operating cash flows for 2016 include $20 million of excess tax benefits. The Company elected not to adjust prior-year cash flow presentations.

The new standard also amends the consolidated statement of cash flows by requiring that cash paid to taxing authorities at settlement arising from the withholding of shares from employees be classified in cash flows from financing activities (such amounts were previously included in cash flows from operating activities). This portion of the standard was required to be adopted on a retrospective basis. In addition, $13 million and $19 million were similarly reclassified for the years ended December 31, 2015 and 2014, respectively.

• Balance Sheet Classification of Deferred Taxes - In November 2015, the FASB issued updated guidance on the balance sheet classification of deferred taxes. Prior to the adoption of this guidance, deferred income tax liabilities and assets were required to be separated and classified as current or non-current in a classified balance sheet. The amendments in this update require that deferred tax liabilities and assets be classified as non-current in a classified balance sheet. Praxair has elected to early adopt this guidance beginning in the fourth quarter 2016 on a prospective basis, prior periods were not retrospectively adjusted (see Note 7).

• Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent) - In May 2015, the FASB issued updated guidance removing the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. The adoption of this guidance resulted in the removal of certain pensions assets from within the fair value hierarchy (see Note 16).

New Accounting Pronouncements Not Yet Adopted

Accounting Standards to be Implemented

• Revenue Recognition – In May 2014, the FASB issued updated guidance on the reporting and disclosure of revenue. The new guidance requires the evaluation of contracts with customers to determine the recognition of revenue when or as the entity satisfies a performance obligation, and requires expanded disclosures. Subsequently, the FASB has issued amendments to certain aspects of the guidance including the effective date. This guidance is required to be effective beginning in the first quarter 2018 (with early adoption beginning in 2017 optional) and includes several transition options.

The Company is currently in the process of evaluating and implementing this new guidance, as required, and at this time expects to use the modified retrospective basis starting in 2018. Praxair will provide additional updates in future filings, when appropriate.

• Simplifying the Measurement of Inventory – In July 2015, the FASB issued updated guidance on the measurement of inventory. The new guidance requires that inventory be measured at the lower of cost or net realizable value. Currently inventory is measured at the lower of cost or market. This new guidance will be effective for Praxair beginning in the first quarter 2017 on a prospective basis, with early adoption optional. Praxair does not expect this requirement to have a material impact.

• Leases – In February 2016, the FASB issued updated guidance on the accounting and financial statement presentation of leases. The new guidance requires lessees to recognize a right-of-use asset and lease liability for all leases, except those that meet certain scope exceptions, and would require expanded quantitative and qualitative disclosures. This guidance will be effective for Praxair beginning in the first quarter 2019, with early adoption optional, and requires companies to transition using a modified retrospective approach. Praxair is in the early stages of reviewing the new guidance and will provide updates on the expected impact to Praxair in future filings, as determined.

• Credit Losses on Financial Instruments –In June 2016, the FASB issued an update on the measurement of credit losses. The guidance introduces a new accounting model for expected credit losses on financial instruments, including trade receivables, based on estimates of current expected credit losses. This guidance will be effective for Praxair beginning in the first quarter 2020, with early adoption permitted beginning in the first quarter 2019 and requires companies to apply the change in accounting on a prospective basis. We are currently evaluating the impact this update will have on our consolidated financial statements.

• Classification of Certain Cash Receipts and Cash Payments – In August 2016, the FASB issued updated guidance on the classification of certain cash receipts and cash payments within the statement of cash flows. The update provides accounting guidance for specific cash flow issues with the objective of reducing diversity in practice. This new guidance will be effective for Praxair beginning in the first quarter 2018 on a retrospective basis, with early adoption optional. Praxair does not expect this requirement to have a material impact.

• Intra-Entity Asset Transfers – In October 2016, the FASB issued updated guidance for income tax accounting of intra-entity transfers of assets other than inventory. The update requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory in the period when the transfer occurs. This new guidance will be effective for Praxair beginning in the first quarter 2018, with early adoption permitted, and should be applied on a modified retrospective basis. We are currently evaluating the impact this update will have on our consolidated financial statements.

• Simplifying the Test for Goodwill Impairment – In January 2017, the FASB issued updated guidance on the measurement of goodwill. The new guidance eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge. The guidance will be effective for Praxair beginning in the first quarter 2020 with early adoption permitted. Praxair does not expect this guidance to have a material impact.

Reclassifications

Reclassifications – Certain prior years’ amounts have been reclassified to conform to the current year’s presentation, including reclassifications to the condensed consolidated statement of cash flows due to the adoption of the new share-based payment accounting standard.

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Cost Reduction Program and Other Charges (Tables)

12 Months Ended

Dec. 31, 2016

Cost Reduction Program And Other Charges (Table) [Abstract]

Schedule Of Cost Reduction By Segment [Table Text Block]

In the third quarter of 2016, Praxair recorded pre-tax charges totaling $96 million ($63 million after-tax and noncontrolling interests of $0.22 per diluted share). Following is a summary of the pre-tax charge by reportable segment:

(millions of dollars)	Severance costs		Other Charges		Total
North America	$	14	$	29	$	43
Europe	12		3		15
South America	5		7		12
Asia	6		13		19
Surface Technologies	3		4		7
Total	$	40	$	56	$	96

In the second quarter of 2015, Praxair recorded pre-tax charges totaling $146 million ($112 million after-tax and noncontrolling interests or $0.39 per diluted share) and in the third quarter recorded pre-tax charges totaling $19 million ($13 million after-tax or $0.04 per diluted share). The charges related primarily to severance and other costs associated with a cost reduction program, which was initiated in response to lower volumes resulting from economic slowdown in emerging markets and energy related end-markets. Following is a summary of the pre-tax charges by reportable segment:

(millions of dollars)	Severance costs		Other Charges		Total
North America	$	14	$	20	$	34
Europe	11		9		20
South America	18		49		67
Asia	11		14		25
Surface Technologies	9		10		19
Total	$	63	$	102	$	165

Schedule of Restructuring Reserve by Type of Cost [Table Text Block]

The following table summarizes the activities related to the company's cost reduction and other charges for the years ended December 31, 2016 and 2015:

(millions of dollars)	Severance costs			Other Charges			Total
Q2/Q3 2015 Cost Reduction Program and Other Charges	$	63		$	102		$	165
Less: Cash payments	(31		)	(13		)	(44		)
Less: Non-cash asset write-offs	—			(68		)	(68		)
Foreign currency translation and other	(2		)	(1		)	(3		)
Balance, December 31, 2015	$	30		$	20		$	50
2016 Cost Reduction Program and Other Charges	40			56			96
Less: Cash payments	(33		)	(9		)	(42		)
Less: Non-cash asset write-offs	—			(39		)	(39		)
Foreign currency translation and other	1			(1		)	—
Balance, December 31, 2016	$	38		$	27		$	65

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Leases (Tables)

12 Months Ended

Dec. 31, 2016

Leases, Operating [Abstract]

Leases Table

At December 31, 2016, minimum payments due under operating leases are as follows:

(Millions of dollars)
2017	$	117
2018	97
2019	79
2020	65
2021	54
Thereafter	117
	$	529

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2016

Income Tax Disclosure (Tables) [Abstract]

Schedule of U.S. and Foreign Pre-tax Income Table

Pre-tax income applicable to U.S. and foreign operations is as follows:

(Millions of dollars) Year Ended December 31,	2016		2015		2014
United States	$	954	$	980	$	1,004
Foreign	1,094		1,180		1,391
Total income before income taxes	$	2,048	$	2,160	$	2,395

Schedule of the Provision for Income Taxes Table

The following is an analysis of the provision for income taxes:

(Millions of dollars) Year Ended December 31,	2016			2015		2014
Current tax expense
U.S. federal	$	266		$	205	$	291
State and local	32			33		35
Foreign	266			275		310
	564			513		636
Deferred tax expense
U.S. federal	3			71		14
State and local	7			10		12
Foreign	(23		)	18		29
	(13		)	99		55
Total income taxes	$	551		$	612	$	691

Schedule of the Difference Between the Actual Income Tax Provision and the Amount Computed By Applying the US Statutory Income Tax Rate Table

An analysis of the difference between the provision for income taxes and the amount computed by applying the U.S. statutory income tax rate to pre-tax income follows:

(Dollar amounts in millions) Year Ended December 31,	2016					2015					2014
U.S. statutory income tax rate	$	717		35.0	%	$	756		35.0	%	$	838		35.0	%
State and local taxes – net of federal benefit	28			1.4	%	28			1.3	%	31			1.3	%
U.S. tax credits and deductions (a)	(32		)	(1.6	)%	(40		)	(1.9	)%	(37		)	(1.5	)%
Foreign tax differentials (b)	(140		)	(6.8	)%	(121		)	(5.6	)%	(186		)	(7.8	)%
Venezuela currency devaluation (c)	—			—	%	—			—	%	46			1.9	%
Share Based Compensation (d)	(20		)	(1.0	)%	—			—	%	—			—	%
Other – net	(2		)	(0.1	)%	(11		)	(0.5	)%	(1		)	—	%
Provision for income taxes	$	551		26.9	%	$	612		28.3	%	$	691		28.9	%

________________________

(a) U.S. tax credits and deductions relate to manufacturing deductions and to the research and experimentation tax credit.

(b) Primarily related to differences between the U.S. tax rate of 35% and the statutory tax rate in the countries where Praxair operates. 2014 includes $56 million of tax benefits related to a reduction of uncertain tax positions as a result of a lapse of statute of limitations. Other permanent items and tax rate changes were not significant.

(c) Impact related to non-deductible Venezuela currency devaluations in 2014 (see Note 2).

(d) See Note 1 related to adoption of the FASB's standard for Improvements to Employee Share-Based Payment Accounting in 2016.

Schedule of the Composition of the Net Deferred Tax Liabilities in the Consolidated Balance Sheets Table

Net deferred tax liabilities included in the consolidated balance sheet are comprised of the following:

(Millions of dollars) December 31,	2016			2015
Deferred tax liabilities
Fixed assets	$	1,522		$	1,413
Exchange gains	139			110
Goodwill	178			147
Other intangible assets	115			117
Other	62			155
	$	2,016		$	1,942
Deferred tax assets
Carryforwards	$	284		$	287
Benefit plans and related (a)	404			365
Inventory	26			20
Exchange Losses	6			16
Accruals and other (b)	404			351
	$	1,124		$	1,039
Less: Valuation allowances (c)	(132		)	(123		)
	$	992		$	916
Net deferred tax liabilities	$	1,024		$	1,026
Recorded in the consolidated balance sheets as (See Note 7):
Prepaid and other current assets (d)	$	—		$	184
Other long-term assets (d)	185			118
Deferred credits (d)	1,209			1,328
	$	1,024		$	1,026

________________________

(a) Includes deferred taxes of $352 million and $325 million in 2016 and 2015, respectively, related to pension / OPEB funded status (see Notes 7 and 16).

(b) Includes $233 million and $194 million in 2016 and 2015, respectively, related to research and development costsand $45 million and $45 million in 2016 and 2015, respectively, related to goodwill.

(c) Summary of valuation allowances relating to deferred tax assets follows (millions of dollars):

	2016			2015			2014
Balance, January 1,	$	(123	)	$	(106	)	$	(85	)
Income tax (charge) benefit	(13		)	(20		)	(20		)
Translation adjustments	(2		)	4			6
Other, including write-offs	6			(1		)	(7		)
Balance, December 31,	$	(132	)	$	(123	)	$	(106	)

(d) 2016 amounts reflect the adoption of the FASB's standard regarding the Balance Sheet Classification of Deferred Taxes which requires all current deferred income tax assets and liabilities to be classified as non-current on the balance sheet (see Note 1).

Schedule of Valuation Allowances Relating To Deferred Tax Assets Table

(c) Summary of valuation allowances relating to deferred tax assets follows (millions of dollars):

	2016			2015			2014
Balance, January 1,	$	(123	)	$	(106	)	$	(85	)
Income tax (charge) benefit	(13		)	(20		)	(20		)
Translation adjustments	(2		)	4			6
Other, including write-offs	6			(1		)	(7		)
Balance, December 31,	$	(132	)	$	(123	)	$	(106	)

Schedule of Reconciliation of Unrecognized Tax Benefits Table

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

(Millions of dollars)	2016			2015			2014
Unrecognized income tax benefits, January 1	$	68		$	71		$	121
Additions for tax positions of prior years	6			21			13
Reductions for tax positions of prior years	(15		)	(13		)	(2		)
Additions for current year tax positions	—			—			3
Reductions for settlements with taxing authorities (a)	(2		)	(3		)	(3		)
Reductions as a result of a lapse of an applicable statute of limitations (b)	—			—			(56		)
Foreign currency translation and other	(1		)	(8		)	(5		)
Unrecognized income tax benefits, December 31	$	56		$	68		$	71

________________________

(a) Settlements are uncertain tax positions that were effectively settled with the taxing authorities, including positions where the company has agreed to amend its tax returns to eliminate the uncertainty.

(b) See note (b) to the effective tax rate reconciliation.

Schedule of Open Tax Years Subject to Examination by Major Jurisdiction Table

As of December 31, 2016, the company remained subject to examination in the following major tax jurisdictions for the tax years as indicated below:

Major tax jurisdictions	Open Years
North America
United States	2011 through 2016
Canada	2009 through 2016
Mexico	2011 through 2016
Europe
Germany	2011 through 2016
Italy	2012 through 2016
Spain	2004 through 2016
South America
Brazil	2005 through 2016
Asia
China	2011 through 2016
India	2006 through 2016
Korea	2012 through 2016
Thailand	2010 through 2016

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Earnings Per Share - Praxair, Inc. Shareholders (Tables)

12 Months Ended

Dec. 31, 2016

Earnings Per Share [Abstract]

Earnings Per Share Table - Praxair, Inc. Shareholders - Table

Basic earnings per share is computed by dividing Net income – Praxair, Inc. for the period by the weighted average number of Praxair common shares outstanding. Diluted earnings per share is computed by dividing Net income – Praxair, Inc. for the period by the weighted average number of Praxair common shares outstanding and dilutive common stock equivalents, as follows:

	2016		2015		2014
Numerator (Millions of dollars)
Net income – Praxair, Inc.	$	1,500	$	1,547	$	1,694
Denominator (Thousands of shares)
Weighted average shares outstanding	285,289		286,606		291,987
Shares earned and issuable under compensation plans	388		399		507
Weighted average shares used in basic earnings per share	285,677		287,005		292,494
Effect of dilutive securities
Stock options and awards	2,080		2,050		3,114
Weighted average shares used in diluted earnings per share	287,757		289,055		295,608
Basic Earnings Per Common Share	$	5.25	$	5.39	$	5.79
Diluted Earnings Per Common Share	$	5.21	$	5.35	$	5.73

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Supplemental Information (Tables)

12 Months Ended

Dec. 31, 2016

Supplemental Information (Tables) [Abstract]

Schedule Of Selling General And Administrative Table

(Millions of dollars) Year Ended December 31,	2016		2015		2014
Selling, General and Administrative
Selling	$	493	$	507	$	572
General and administrative	652		645		736
	$	1,145	$	1,152	$	1,308

Schedule Of Depreciation And Amortization Table

Year Ended December 31,	2016		2015		2014
Depreciation and Amortization
Depreciation	$	1,071	$	1,059	$	1,123
Amortization of other intangibles (Note 10)	51		47		47
	$	1,122	$	1,106	$	1,170

Schedule Of Other Income (Expense) - Net Table

Year Ended December 31,	2016			2015			2014
Other Income (Expenses) – Net
Currency related net gains (losses)	$	1		$	(2	)	$	1
Partnership income	5			4			16
Severance expense	(7		)	(5		)	(22		)
Business divestitures and asset gains (losses) – net	16			34			36
Other – net	8			(3		)	(22		)
	$	23		$	28		$	9

Schedule Of Interest Expense - Net Table

(a) In February 2016, Praxair redeemed $325 million of 5.20% notes due March 2017 resulting in a $16 million interest charge ($10 million after-tax, or $0.04 per diluted share). In December 2014, Praxair redeemed $400 million of 5.375% notes due November 2016 for $434 million resulting in an $36 million charge ($22 million after-tax, or $0.07 per diluted share).

Year Ended December 31,	2016			2015			2014
Interest Expense – Net
Interest incurred on debt	$	208		$	194		$	215
Interest capitalized	(34		)	(33		)	(38		)
Bond redemption (a)	16			—			36
	$	190		$	161		$	213

Schedule Of Noncontrolling Interests Income [Table Text Block]

Year Ended December 31,	2016		2015		2014
Income Attributable to Noncontrolling Interests
Noncontrolling interests' operations	$	35	$	34	$	40
Redeemable noncontrolling interests' operations (Note 14)	3		10		12
	$	38	$	44	$	52

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

(Millions of dollars) December 31,	2016			2015
Accounts Receivable
Trade	$	1,640		$	1,601
Other	122			101
	1,762			1,702
Less: allowance for doubtful accounts (b)	(121		)	(101		)
	$	1,641		$	1,601

(b) Provisions to the allowance for doubtful accounts were $41 million, $35 million, and $39 million in 2016, 2015, and 2014, respectively. The allowance activity in each period related primarily to write-offs of uncollectible amounts, net of recoveries and currency movements.

^[1]

Schedule Of Inventories Table

December 31,	2016		2015
Inventories
Raw materials and supplies	$	197	$	202
Work in process	45		48
Finished goods	308		281
	$	550	$	531

Schedule Of Prepaid And Other Current Assets Table

December 31,	2016		2015
Prepaid and Other Current Assets
Deferred income taxes (Note 5) (c)	$	—	$	184
Prepaid (d)	108		110
Other	57		53
	$	165	$	347

(d) Includes estimated income tax payments of $39 million and $42 million in 2016 and 2015, respectively.

Schedule Of Other Long-term Assets Table

December 31,	2016		2015
Other Long-term Assets
Pension assets (Note 16)	$	13	$	41
Insurance contracts (e)	74		74
Long-term receivables, net (f)	46		33
Deposits	56		48
Investments carried at cost	14		12
Deferred charges	51		50
Deferred income taxes (Note 5) (c)	185		118
Other	119		100
	$	558	$	476

(c) 2016 amounts reflect the adoption of the FASB's standard regarding Balance Sheet Classification of Deferred Taxes which requires all current deferred income tax assets and liabilities to be classified as non-current on the balance sheet (see Note 1).

(e) Consists primarily of insurance contracts and other investments to be utilized for non-qualified pension and OPEB obligations.

(f) Long-term receivables are not material and are largely reserved. The balances at December 31, 2016 and 2015 are net of reserves of $50 million and $35 million, respectively. The amounts in both periods relate primarily to government receivables in Brazil and other long-term notes receivable from customers. Collectability is reviewed regularly and uncollectible amounts are written-off as appropriate. The account balance changes during 2016 were primarily due to additional government receivables in Brazil and foreign exchange rate movements.

Schedule Of Other Current Liabilities Table

December 31,	2016		2015
Other Current Liabilities
Accrued expenses	$	285	$	247
Payroll	141		114
Cost reduction program (Note 2)	59		44
Pension and postretirement (Note 16)	24		29
Interest payable	78		71
Employee benefit accrual	23		22
Insurance reserves	8		8
Other	223		167
	$	841	$	702

Schedule Of Other Long-term Liabilities Table

December 31,	2016		2015
Other Long-term Liabilities
Pension and postretirement (Note 16)	$	863	$	760
Tax liabilities for uncertain tax positions	44		56
Cost reduction program (Note 2)	6		6
Interest and penalties for uncertain tax positions (Note 5)	6		8
Insurance reserves	25		24
Other	269		301
	$	1,213	$	1,155

Schedule Of Deferred Credits Table

December 31,	2016		2015
Deferred Credits
Deferred income taxes (Note 5) (c)	$	1,209	$	1,328
Other	63		62
	$	1,272	$	1,390

Schedule Of Accumulated Other Comprehensive Income (Loss) Table

(g) North America consists of currency translation adjustments in Canada and Mexico. South America relates primarily to Brazil and Argentina. Europe relates primarily to Spain, Italy and Germany. Asia relates primarily to Korea and India.

December 31,	2016			2015
Accumulated Other Comprehensive Income (Loss)
Cumulative translation adjustment - net of taxes:
North America (g)	$	(1,038	)	$	(899	)
South America (g)	(1,969		)	(2,272		)
Europe (g)	(504		)	(526		)
Asia (g)	(383		)	(285		)
Surface Technologies	(52		)	(36		)
	(3,946		)	(4,018		)
Derivatives – net of taxes	(1		)	(1		)
Pension/OPEB funded status obligation (net of $352 million and $325 million tax benefit in 2016 and 2015, respectively) (Note 16)	(653		)	(577		)
	$	(4,600	)	$	(4,596	)

[1] North America consists of currency translation adjustments in Canada and Mexico. South America relates primarily to Brazil and Argentina. Europe relates primarily to Spain, Italy and Germany. Asia relates primarily to Korea and India.

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Property, Plant & Equipment - Net (Tables)

12 Months Ended

Dec. 31, 2016

Property, Plant and Equipment [Abstract]

Property, Plant & Equipment - Net

Significant classes of property, plant and equipment are as follows:

(Millions of dollars) December 31,	Depreciable Lives (Yrs)	2016			2015
Production plants (primarily 15-year life) (a)	10-20	$	14,588		$	13,778
Storage tanks	15-20	2,360			2,196
Transportation equipment and other	3-15	2,038			1,925
Cylinders (primarily 30-year life)	10-30	1,722			1,654
Buildings	25-40	1,096			1,085
Land and improvements (b)	0-20	559			517
Construction in progress		1,558			1,539
		23,921			22,694
Less: accumulated depreciation		(12,444		)	(11,696		)
		$	11,477		$	10,998

(a) - Depreciable lives of production plants related to long-term customer supply contracts are consistent with the contract lives.

(b) - Land is not depreciated.

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Goodwill (Tables)

12 Months Ended

Dec. 31, 2016

Schedule of Goodwill [Abstract]

Schedule of Goodwill Table

Changes in the carrying amount of goodwill for the years ended December 31, 2016 and 2015 were as follows:

(Millions of dollars)	North America			South America			Europe			Asia			Surface Technologies			Total
Balance, December 31, 2014	$	2,139		$	147		$	654		$	38		$	143		$	3,121
Acquisitions (Note 3)	21			9			—			23			3			56
Purchase adjustments & other *	(12		)	—			—			—			—			(12		)
Foreign currency translation	(37		)	(58		)	(72		)	(2		)	(10		)	(179		)
Balance, December 31, 2015	$	2,111		$	98		$	582		$	59		$	136		$	2,986
Acquisitions (Note 3)	61			9			71			—			—			141
Purchase adjustments & other	6			—			—			—			2			8
Foreign currency translation	(13		)	25			(24		)	(1		)	(5		)	(18		)
Balance, December 31, 2016	$	2,165		$	132		$	629		$	58		$	133		$	3,117

*    Primarily relates to the elimination of goodwill with a divestiture.

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Other Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2016

Other Intangible Assets [Abstract]

Schedule of Other Intangible Assets Table

The following is a summary of Praxair’s other intangible assets at December 31, 2016 and 2015:

(Millions of dollars) For the year ended December 31, 2016	Customer & License/Use Agreements			Non-compete Agreements			Patents & Other			Total
Cost:
Balance, December 31, 2015	$	698		$	38		$	47		$	783
Additions (primarily acquisitions)	72			4			6			82
Foreign currency translation	(16		)	(1		)	(2		)	(19		)
Other *	(3		)	(7		)	—			(10		)
Balance, December 31, 2016	751			34			51			836
Less: accumulated amortization:
Balance, December 31, 2015	(179		)	(23		)	(13		)	(215		)
Amortization expense	(41		)	(6		)	(4		)	(51		)
Foreign currency translation	6			—			—			6
Other *	—			7			—			7
Balance, December 31, 2016	(214		)	(22		)	(17		)	(253		)
Net balance at December 31, 2016	$	537		$	12		$	34		$	583
(Millions of dollars) For the year ended December 31, 2015	Customer & License/Use Agreements			Non-compete Agreements			Patents & Other			Total
Cost:
Balance, December 31, 2014	$	693		$	37		$	47		$	777
Additions (primarily acquisitions)	23			2			1			26
Foreign currency translation	(21		)	(1		)	(1		)	(23		)
Other *	3			—			—			3
Balance, December 31, 2015	698			38			47			783
Less: accumulated amortization:
Balance, December 31, 2014	(147		)	(18		)	(9		)	(174		)
Amortization expense	(37		)	(6		)	(4		)	(47		)
Foreign currency translation	7			1			—			8
Other *	(2		)	—			—			(2		)
Balance, December 31, 2015	(179		)	(23		)	(13		)	(215		)
Net balance at December 31, 2015	$	519		$	15		$	34		$	568

________________________

* Other primarily relates to the write-off of fully amortized assets, purchase accounting adjustments and reclassifications.

Schedule of Estimated Future Amortization Expense Table

Total estimated annual amortization expense is as follows:

(Millions of dollars)
2017	$	45
2018	42
2019	40
2020	38
2021	36
Thereafter	382
	$	583

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Debt (Tables)

12 Months Ended

Dec. 31, 2016

Debt (Tables) [Abstract]

Long-term And Short-term Debt Table

The following is a summary of Praxair’s outstanding debt at December 31, 2016 and 2015:

(Millions of dollars)	2016			2015
Short-term
Commercial paper and U.S. bank borrowings	$	333		$	87
Other bank borrowings (primarily international)	101			163
Total short-term debt	434			250
Long-term (a)
U.S. borrowings
0.75% Notes due 2016 (b)	—			400
Floating Rate Notes due 2017	150			150
5.20% Notes due 2017 (b)	—			325
1.05% Notes due 2017 (c)	400			399
1.20% Notes due 2018	499			499
1.25% Notes due 2018 (d)	478			480
4.50% Notes due 2019	598			597
1.90% Notes due 2019	499			499
1.50% Euro denominated notes due 2020	627			646
2.25% Notes due 2020	299			298
4.05% Notes due 2021	497			497
3.00% Notes due 2021	496			496
2.45% Notes due 2022	597			596
2.20% Notes due 2022	498			497
2.70% Notes due 2023	497			497
1.20% Euro denominated notes due 2024 (e)	575			—
2.65% Notes due 2025	397			396
1.625% Euro denominated notes due 2025	519			535
3.20% Notes due 2026 (e)	725			446
3.55% Notes due 2042	662			661
Other	12			3
International bank borrowings	49			57
Obligations under capital lease	7			7
	9,081			8,981
Less: current portion of long-term debt	(164		)	(6		)
Total long-term debt	8,917			8,975
Total debt	$	9,515		$	9,231

________________________

(a) Amounts are net of unamortized discounts, premiums and/or debt issuance cost as applicable.

(b) In February 2016, Praxair repaid $400 million of 0.75% notes that became due. Also in February 2016, Praxair redeemed $325 million of 5.20% notes due March 2017 resulting in a $16 million interest charge ($10 million after-tax, or $0.04 per diluted share).

(c) Classified as long-term because of the Company’s intent to refinance this debt on a long-term basis and the availability of such financing under the terms of an existing $2.5 billion long-term credit facility.

(d) December 31, 2016 and 2015 include a $4 million and $6 million fair value increase, respectively, related to hedge accounting. See Note 12 for additional information.

(e) In February 2016, Praxair issued €550 million of 1.20% Euro-denominated notes due 2024. In addition, Praxair issued $275 million of 3.20% notes due 2026. The proceeds of these debt issuances were used for general corporate purposes

Credit Facilities Table

At December 31, 2016, the company has the following major credit facility available for future borrowing:

Millions of dollars	Total Facility		Borrowings Outstanding		Available for Borrowing		Expires
Senior Unsecured	$	2,500	$	—	$	2,500	December 2019

Expected Maturities On Long-term Debt Table

Expected maturities of long-term debt are as follows:

(Millions of dollars)
2017	$	164	*
2018	985
2019	1,503		*
2020	938
2021	1,006
Thereafter	4,485
	$	9,081

________________________

*    $400 million of debt due in 2017 has been reflected in 2019 maturities due to the company’s intent to refinance this debt on a long-term basis and the ability to do so under the $2.5 billion senior unsecured credit facility with a syndicate of banks which expires in 2019

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Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2016

Financial Instruments (Tables) [Abstract]

Derivative Instruments Fair Value and Notional Amounts Table

The following table is a summary of the notional amount and fair value of derivatives outstanding at December 31, 2016 and 2015 for consolidated subsidiaries:

					Fair Value
(Millions of dollars)	Notional Amounts				Assets				Liabilities
December 31,	2016		2015		2016		2015		2016		2015
Derivatives Not Designated as Hedging Instruments:
Currency contracts:
Balance sheet items (a)	$	2,104	$	2,548	$	11	$	15	$	18	$	11
Derivatives Designated as Hedging Instruments:
Currency contracts:
Balance sheet items (a)	$	38	$	38	$	3	$	1	$	—	$	—
Interest rate contracts:
Interest rate swaps (b)	475		475		4		6		—		—
Total Hedges	$	513	$	513	$	7	$	7	$	—	$	—
Total Derivatives	$	2,617	$	3,061	$	18	$	22	$	18	$	11

________________________

(a) Assets are recorded in prepaid and other current assets, and liabilities are recorded in other current liabilities.

(b) Assets are recorded in other long term assets.

Schedule Of Treasury Rate Lock Contracts Table Text Block

The following table summarizes the unrecognized gains (losses) related to terminated treasury rate lock contracts:

					Unrecognized Gain / (Loss) (a)
(Millions of dollars)	Year Terminated	Original Gain / (Loss)			December 31, 2016			December 31, 2015
Treasury Rate Locks
Underlying debt instrument:
$500 million 2.20% fixed-rate notes that mature in 2022 (b)	2012	$	(2	)	$	(1	)	$	(1	)
$500 million 3.00% fixed-rate notes that mature in 2021 (b)	2011	(11		)	(5		)	(6		)
$600 million 4.50% fixed-rate notes that mature in 2019 (b)	2009	16			4			6
Total – pre-tax					$	(2	)	$	(1	)
Less: income taxes					1			—
After- tax amounts					$	(1	)	$	(1	)

________________________

(a) The unrecognized gains / (losses) for the treasury rate locks are shown in accumulated other comprehensive income ("AOCI") and are being recognized on a straight line basis to interest expense – net over the term of the underlying debt agreements. Refer to the table below summarizing the impact of the company’s consolidated statements of income and AOCI for current period gain (loss) recognition.

(b) The notional amount of the treasury rate lock contracts are equal to the underlying debt instrument with the exception of the treasury rate lock contract entered into to hedge the $600 million4.50% fixed-rate notes that mature in 2019. The notional amount of this contract was $500 million.

Schedule of Derivative Instruments Not Designated as Hedging Instruments Table

The following table summarizes the impact of the company's derivatives not designated as hedging instruments on the consolidated statements of income:

(Millions of dollars)	Amount of Pre-Tax Gain (Loss)     Recognized in Earnings *
December 31,	2016		2015			2014
Derivatives Not Designated as Hedging Instruments
Currency contracts:
Balance sheet items:
Debt-related	$	21	$	(162	)	$	(69	)
Other balance sheet items	4		(8		)	(2		)
Total	$	25	$	(170	)	$	(71	)

* The gains (losses) on balance sheet items are offset by gains (losses) recorded on the underlying hedged assets and liabilities. Accordingly, the gains (losses) for the derivatives and the underlying hedged assets and liabilities related to debt items are recorded in the consolidated statements of income as interest expense-net. Other balance sheet items and anticipated net income gains (losses) are recorded in the consolidated statements of income as other income (expenses)-net.

Schedule of Derivative Instruments Designated As Hedging Instruments Table

The following table summarizes the impact of the company's derivatives designated as hedging instruments that impact AOCI:

(Millions of dollars)	Amount of Gain (Loss) Recognized in AOCI								Amount of Gain (Loss) Reclassified from AOCI to the Consolidated Statement of Income
December 31,	2016			2015		2014			2016			2015			2014
Derivatives Designated as Hedging Instruments**
Currency contracts:
Net Investment hedge	$	(4	)	$	—	$	(6	)	$	—		$	—		$	—
Forecasted purchases	—			—		1			—			—			—
Balance sheet items	1			1		—			—			(1		)	—
Interest rate contracts:
Treasury rate locks	—			—		—			(1		)	—			—
Total – Pre tax	$	(3	)	$	1	$	(5	)	$	(1	)	$	(1	)	$	—
Less: income taxes	—			—		2			1			—			—
Total - Net of Taxes	$	(3	)	$	1	$	(3	)	$	—		$	(1	)	$	—

** The gains (losses) on net investment hedges are recorded as a component of AOCI within foreign currency translation adjustments in the consolidated balance sheets and consolidated statements of comprehensive income. The gains (losses) on forecasted purchases, balance sheet items, and treasury rate locks are recorded as a component of AOCI within derivative instruments in the consolidated balance sheets and the consolidated statements of comprehensive income. There was no ineffectiveness for these instruments during 2016 or 2015. The gains (losses) on net investment hedges are reclassified to earnings only when the related currency translation adjustments are required to be reclassified, usually upon sale or liquidation of the investment. The gains (losses) for interest rate contracts are reclassified to earnings as interest expense –net on a straight-line basis over the remaining maturity of the underlying debt. Net losses of approximately $1 million are expected to be reclassified to earnings during 2017.

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Fair Value Disclosures (Tables)

12 Months Ended

Dec. 31, 2016

Fair Value Measurements [Abstract]

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis Table

The following table summarizes assets and liabilities measured at fair value on a recurring basis at December 31, 2016 and 2015:

	Fair Value Measurements Using
(Millions of dollars)	Level 1				Level 2				Level 3
	2016		2015		2016		2015		2016		2015
Assets
Derivative assets	$	—	$	—	$	18	$	22	$	—	$	—
Liabilities
Derivative liabilities	$	—	$	—	$	18	$	11	$	—	$	—

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Equity and Redeemable Noncontrolling Interests (Tables)

12 Months Ended

Dec. 31, 2016

Equity and Redeemable Noncontrolling Interests Table Abstract

Redeemable Noncontrolling Interests

The following is a summary of redeemable noncontrolling interests for the years ended December 31, 2016, 2015 and 2014 :

(Millions of dollars)	2016			2015			2014
Beginning Balance	$	113		$	176		$	307
Net income	3			10			12
Distributions to noncontrolling interest	(2		)	(7		)	(9		)
Redemption value adjustment/accretion *	(6		)	(40		)	2
Foreign currency translation and other	7			(17		)	(24		)
Purchase/divestiture of noncontrolling interest **	(104		)	(9		)	(112		)
Ending Balance	$	11		$	113		$	176

* In December 2015, Praxair sold its controlling interest in Praxair Distribution Southeast, LLC and, accordingly, removed the related redeemable noncontrolling interests.

** In June 2016, Praxair acquired the remaining 34% stake in a Scandinavian joint venture for $104 million. In January 2014, Praxair acquired the remaining noncontrolling interests in a joint venture in the United States. The cash payments related to these acquisitions are shown in the financing section of the consolidated statements of cash flows under the caption "Noncontrolling interest transactions and other" as there was no change in control.

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Share-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions

The following weighted-average assumptions were used to value the grants in 2016, 2015 and 2014:

Year Ended December 31,	2016		2015		2014
Dividend yield	2.9	%	2.2	%	2.0	%
Volatility	14.4	%	13.5	%	15.2	%
Risk-free interest rate	1.41	%	1.51	%	1.57	%
Expected term years	6		5		5

Schedule of Share-based Compensation, Stock Options, Activity

The following table summarizes option activity under the plans as of December 31, 2016 and changes during the period then ended (averages are calculated on a weighted basis; life in years; intrinsic value expressed in millions):

Activity	Number  of Options (000’s)		Average Exercise Price		Average Remaining Life	Aggregate Intrinsic Value
Outstanding at January 1, 2016	11,273		$	96.58
Granted	2,473		102.23
Exercised	(1,821	)	70.17
Cancelled or expired	(217	)	111.25
Outstanding at December 31, 2016	11,708		$	101.58	5.6	$	212
Exercisable at December 31, 2016	8,018		$	96.90	4.2	$	177

Performance Based and Restricted Stock Activity

The following table summarizes non-vested performance-based and restricted stock award activity as of December 31, 2016 and changes during the period then ended (shares based on target amounts, averages are calculated on a weighted basis):

	Performance-Based				Restricted Stock
	Number of Shares (000’s)		Average Grant Date Fair Value		Number of Shares (000’s)		Average Grant Date Fair Value
Non-vested at January 1, 2016	802		$	114.41	286		$	112.48
Granted	241		105.34		98		98.18
Vested	(109	)	103.79		(93	)	105.92
Cancelled and Forfeited	(220	)	105.63		(17	)	113.91
Non-vested at December 31, 2016	714		$	115.72	274		$	109.49

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Retirement Programs (Tables)

12 Months Ended

Dec. 31, 2016

Pension And Other Postretirement Benefits (Tables) [Abstract]

Schedule of Pension and OPEB Net Periodic Benefit Costs Table

The components of net pension and OPEB costs for 2016, 2015 and 2014 are shown below:

(Millions of dollars) Year Ended December 31,	Pensions									OPEB
	2016			2015			2014			2016			2015			2014
Service cost	$	45		$	54		$	49		$	2		$	3		$	4
Interest cost	100			112			121			6			7			11
Expected return on plan assets	(157		)	(154		)	(155		)	—			—			—
Net amortization and deferral	59			79			60			(3		)	(2		)	(8		)
Net periodic benefit cost before pension settlement charges	$	47		$	91		$	75		$	5		$	8		$	7
Pension settlement charges *	4			7			7			—			—			—
Net periodic benefit cost	$	51		$	98		$	82		$	5		$	8		$	7

* 2016 includes a $4 million pension settlement charge related to lump sum benefits paid to retired senior managers in the third quarter. The third quarter of 2015 and the fourth quarter of 2014 both include charges of $7 million, related primarily to the retirement of senior managers in the United States (see Note 2)

Schedule of Pension and OPEB Funded Status Table

The changes in benefit obligation and plan assets for Praxair’s pension and OPEB programs, including reconciliation of the funded status of the plans to amounts recorded in the consolidated balance sheet, as of December 31, 2016 and 2015 are shown below:

(Millions of dollars) Year Ended December 31,	Pensions
	2016						2015						OPEB
	U.S.			International			U.S.			International			2016			2015
Change in Benefit Obligation ("PBO")
Benefit obligation January 1	$	1,992		$	580		$	2,050		$	719		$	160		$	180
Service cost	31			14			36			18			2			3
Interest cost	70			30			80			32			6			7
Participant contributions	—			—			—			—			10			10
Plan amendment	—			(2		)	—			2			(7		)	—
Actuarial loss (gain)	104			76			(68		)	(41		)	4			(9		)
Benefits paid	(131		)	(33		)	(106		)	(32		)	(20		)	(24		)
Foreign currency translation	—			1			—			(118		)	1			(7		)
Benefit obligation, December 31	$	2,066		$	666		$	1,992		$	580		$	156		$	160
Accumulated benefit obligation ("ABO")	$	1,970		$	639		$	1,900		$	551
Change in Plan Assets
Fair value of plan assets, January 1	$	1,509		$	475		$	1,607		$	561		$	—		$	—
Actual return on plan assets	117			47			(11		)	18			—			—
Company contributions	—			11			—			15			—			—
Benefits paid from plan assets	(119		)	(26		)	(87		)	(28		)	—			—
Foreign currency translation	—			—			—			(91		)	—			—
Fair value of plan assets, December 31	$	1,507		$	507		$	1,509		$	475		$	—		$	—
Funded Status, End of Year	$	(559	)	$	(159	)	$	(483	)	$	(105	)	$	(156	)	$	(160	)
Recorded in the Balance Sheet
Other long-term assets	$	—		$	13		$	—		$	41		$	—		$	—
Other current liabilities	(7		)	(5		)	(12		)	(4		)	(12		)	(13		)
Other long-term liabilities	(552		)	(167		)	(471		)	(142		)	(144		)	(147		)
Net amount recognized, December 31	$	(559	)	$	(159	)	$	(483	)	$	(105	)	$	(156	)	$	(160	)
Amounts recognized in accumulated other comprehensive income (loss) consist of:
Net actuarial loss (gain)	$	832		$	189		$	782		$	135		$	(20	)	$	(25	)
Prior service cost (credit)	—			12			—			11			(8		)	(1		)
Deferred tax benefit (Note 5)	(318		)	(46		)	(299		)	(37		)	12			11
Amount recognized in accumulated other comprehensive income (loss) (Note 7)	$	514		$	155		$	483		$	109		$	(16	)	$	(15	)

Schedule of Pension and OPEB Changes in Plan Assets and Benefit Obligations Recognized in AOCI Table

The changes in plan assets and benefit obligations recognized in other comprehensive income in 2016 and 2015 are as follows:

	Pensions						OPEB
(Millions of dollars)	2016			2015			2016			2015
Current year net actuarial losses (gains)*	$	172		$	38		$	4		$	(9	)
Amortization of net actuarial gains (losses)	(60		)	(78		)	3			2
Plan amendment	(2		)	—			(7		)	—
Amortization of prior service credits (costs)	1			(1		)	—			—
Pension settlements (Note 2)	(4		)	(7		)	—			—
Foreign currency translation and other	(2		)	(24		)	(2		)	6
Total recognized in other comprehensive income	$	105		$	(72	)	$	(2	)	$	(1	)

________________________

 * Pension net actuarial losses in 2016 are primarily driven by liability experience as well as lower U.S. discount rates. Pension net actuarial losses in 2015 relate primarily to lower actual returns on plan assets when compared with 2014 offset by higher U.S. discount rates. OPEB net actuarial losses in 2016 are largely due to unfavorable plan experience whereas gains in 2015 relate primarily to higher discount rates and favorable plan experience

Schedule of Pension and OPEB Amounts in AOCI to be Recognized in 2017 Table

The amounts in accumulated other comprehensive income (loss) that are expected to be recognized as components of net periodic benefit cost during 2017 are as follows:

(Millions of dollars)	Pension		OPEB
Net actuarial loss (gain)	$	65	$	2
Prior service cost (credit)	2		1
	$	67	$	3

Schedule of Pension Plans Where the Accumulated Benefit Obligation Exceeds the Fair Value of Plan Assets Table

The following table provides information for pension plans where the accumulated benefit obligation exceeds the fair value of the plan assets:

(Millions of dollars) Year Ended December 31,	Pensions
	2016				2015
	U.S.		International		U.S.		International
Projected benefit obligation ("PBO")	$	2,066	$	372	$	1,992	$	336
Accumulated benefit obligation ("ABO")	$	1,970	$	365	$	1,900	$	324
Fair value of plan assets	$	1,507	$	199	$	1,509	$	188

Schedule of Pension and OPEB Plans Assumptions Used to Determine Benefit Obligations and the Net Benefit Cost Table

The assumptions used to determine benefit obligations are as of the respective balance sheet dates and the assumptions used to determine net benefit cost are as of the previous year-end, as shown below:

	Pensions
	U.S.				International				OPEB
	2016		2015		2016		2015		2016		2015
Weighted average assumptions used to determine benefit obligations at December 31,
Discount rate	4.05	%	4.32	%	5.09	%	5.32	%	4.21	%	4.24	%
Rate of increase in compensation levels	3.25	%	3.25	%	3.73	%	3.57	%	N/A		N/A
Weighted average assumptions used to determine net periodic benefit cost for years ended December 31,
Discount rate (1)	4.32	%	3.95	%	5.32	%	5.36	%	4.24	%	4.48	%
Rate of increase in compensation levels	3.25	%	3.25	%	3.57	%	3.72	%	N/A		N/A
Expected long-term rate of return on plan assets (2)	8.00	%	8.00	%	7.92	%	7.71	%	N/A		N/A

________________________

(1) At the end of 2015, the Company changed the approach used to measure service and interest costs for significant pension and OPEB plans. Through 2015, Praxair measured service and interest costs utilizing a single weighted-average discount rate for each plan derived from the yield curve used to measure the respective plan obligations. Effective in 2016, the Company elected to measure service and interest costs for significant plans by applying the specific spot rates along that yield curve to the plan's expected cash flows ("spot rate approach"). The Company believes the new spot rate approach provides a more precise measurement of service and interest costs by aligning the timing of the plans' expected cash flows to the corresponding spot rates on the yield curve. This change does not affect the measurement of plan obligations nor the funded status of the plans. The Company has accounted for this change as a change in accounting estimate and, accordingly has accounted for it on a prospective basis.

(2) The expected long term rate of return on the U.S. and international plan assets is estimated based on the plans' investment strategy and asset allocation, historical capital market performance and, to a lesser extent, historical plan performance. For the U.S. plans, the expected rate of return of 8.00% was derived based on the target asset allocation of 50%-70% equity securities (approximately 9.5% expected return), 20%-40% fixed income securities (approximately 5.5% expected return) and 2% - 10% real estate funds (approximately 7% expected return). For the international plans, the expected rate of return was derived based on the weighted average target asset allocation of 30%-50% equity securities (approximately 10% expected return), 40%-60% fixed income securities (approximately 7.5% expected return), and 0%-10% alternative investments (approximately 7.5% expected return). For the U.S. plan assets, the actual annualized total returns for the most recent 10-year and 20-year periods ended December 31, 2016 were approximately 4.9% and 6.7%, respectively. For the international plan assets, the actual annualized total returns for the same two periods were approximately 6.9% and 8.6%, respectively. Changes to plan asset allocations and investment strategy over this time period limit the value of historical plan performance as factor in estimating the expected long term rate of return. For 2017, the expected long-term rate of return on plan assets will be 8.00% for the U.S. plans. Expected weighted average returns for international plans will vary.

Schedule of OPEB Plans Assumed Healthcare Cost Trend Rates Table

	OPEB
Assumed healthcare cost trend rates	2016		2015
Healthcare cost trend assumed	7.00	%	7.00	%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)	5.00	%	5.00	%
Year that the rate reaches the ultimate trend rate	2020		2020

Schedule of Effect of One-Percentage Point Change in Assumed Healthcare Cost Trend Rates Table

These healthcare-cost trend rate assumptions have an impact on the amounts reported. However, cost caps limit the impact on the net OPEB benefit cost in the U.S. To illustrate the effect, a one-percentage point change in assumedhealthcare cost trend rates would have the following effects:

	One-Percentage Point
(Millions of dollars)	Increase		Decrease
Effect on the total of service and interest cost components of net OPEB benefit cost	$	—	$	—
Effect on OPEB benefit obligation	$	4	$	(3	)

Schedule of Pension Plans Targeted Asset Allocation Range and Weighted-Average Asset Allocations Table

The international pension plans are managed individually based on diversified investment portfolios, with different target asset allocations that vary for each plan. Praxair’s U.S. and international pension plans’ weighted-average asset allocations at December 31, 2016 and 2015, and the target asset allocation range for 2016, by major asset category, are as follows:

	U.S.					International
Asset Category	Target	2016		2015		Target	2016		2015
Equity securities	50%-70%	59	%	62	%	30%-50%	35	%	50	%
Fixed income securities	20%-40%	32	%	30	%	40%-60%	56	%	41	%
Other	2% - 10%	9	%	8	%	0%-10%	9	%	9	%

Schedule of Pension Plans Assets Measured at Fair Value by Asset Category Table

The following table summarizes pension assets measured at fair value by asset category at December 31, 2016 and 2015. During the years presented, there has been no transfer of assets between Levels 1, 2 and 3 (see Note 13 for definition of the levels):

	Fair Value Measurements Using
	Level 1				Level 2				Level 3 **				Total
(Millions of dollars)	2016		2015		2016		2015		2016		2015		2016		2015
Cash and cash equivalents	$	3	$	1	$	—	$	—	$	—	$	—	$	3	$	1
Equity securities:
U.S. equities	344		302		—		—		—		—		344		302
International equities	37		62		—		—		—		—		37		62
Mutual funds	2		236		—		—		—		—		2		236
Fixed income securities:
U.S. government bonds	—		—		51		50		—		—		51		50
International government bonds	—		—		159		89		—		—		159		89
Mutual funds	104		91		—		—		—		—		104		91
Corporate bonds	—		—		194		163		—		—		194		163
Other:
Insurance contracts	—		—		—		—		45		43		45		43
Real Estate Funds	—		—		—		—		135		123		135		123
Total plan assets at fair value, December 31,	$	490	$	692	$	404	$	302	$	180	$	166	$	1,074	$	1,160
Pooled funds *													940		824
Total fair value plan assets December 31,													$	2,014	$	1,984

* Pooled funds are measured using the net asset value ("NAV") as a practical expedient for fair value as permissible under the accounting standard for fair value measurements and have not been categorized in the fair value hierarchy in accordance with recently issued accounting standards updates related to Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share. Pooled fund NAVs are provided by the trustee and are determined by reference to the fair value of the underlying securities of the trust, less its liabilities, which are valued primarily through the use of directly or indirectly observable inputs. Depending on the pooled fund, underlying securities may include marketable equity securities or fixed income securities.

** The following table summarizes changes in fair value of the pension plan assets classified as level 3 for the periods ended December 31, 2016 and 2015:

(Millions of dollars)	Insurance Contracts			Real Estate Funds		Total
Balance, December 31, 2014	$	53		$	110	$	163
Gain/(Loss) for the period	(4		)	13		9
Acquisitions	—			—		—
Foreign currency translation	(6		)	—		(6		)
Balance, December 31, 2015	43			123		166
Gain/(Loss) for the period	3			12		15
Acquisitions	—			—		—
Foreign currency translation	(1		)	—		(1		)
Balance, December 31, 2016	$	45		$	135	$	180

Schedule of Pension Plans Changes in Fair Value of Assets Classified as Level 3 Table

** The following table summarizes changes in fair value of the pension plan assets classified as level 3 for the periods ended December 31, 2016 and 2015:

(Millions of dollars)	Insurance Contracts			Real Estate Funds		Total
Balance, December 31, 2014	$	53		$	110	$	163
Gain/(Loss) for the period	(4		)	13		9
Acquisitions	—			—		—
Foreign currency translation	(6		)	—		(6		)
Balance, December 31, 2015	43			123		166
Gain/(Loss) for the period	3			12		15
Acquisitions	—			—		—
Foreign currency translation	(1		)	—		(1		)
Balance, December 31, 2016	$	45		$	135	$	180

Schedule of Pension and OPEB Estimated Future Benefit Payments, Net of Participant Contributions Table

The following table presents estimated future benefit payments, net of participants contributions:

(Millions of dollars)	Pensions
Year Ended December 31,	U.S.		International		OPEB
2017	$	105	$	32	$	13
2018	115		32		12
2019	122		35		12
2020	123		37		11
2021	126		38		11
2022-2026	661		210		47

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Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2016

Unconditional Purchase Obligations (Excluding Capital Stock Redemptions) [Abstract]

Material Commitments and Contractual Obligations

The following table sets forth Praxair’s material commitments and contractual obligations as of December 31, 2016, excluding leases, tax liabilities for uncertain tax positions, long-term debt, other post retirement and pension obligations which are summarized elsewhere in the financial statements (see Notes 4, 5, 11, and 16):

(Millions of dollars) Expiring through December 31,	Unconditional Purchase Obligations		Construction Commitments
2017	$	585	$	836
2018	534		271
2019	476		125
2020	422		—
2021	434		—
Thereafter	2,645		—
	$	5,096	$	1,232

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Segments (Tables)

12 Months Ended

Dec. 31, 2016

Segment Reporting (Tables) [Abstract]

Schedule of Segment Reporting Information, Sales Table

(a) Sales reflect external sales only. Intersegment sales, primarily from North America to other segments, were not material.

The table below presents information about reportable segments for the years ended December 31, 2016, 2015 and 2014.

(Millions of dollars)	2016		2015		2014
Sales (a)
North America	$	5,592	$	5,865	$	6,436
Europe	1,392		1,320		1,546
South America	1,399		1,431		1,993
Asia	1,555		1,551		1,619
Surface Technologies	596		609		679
	$	10,534	$	10,776	$	12,273

Schedule Of Segment Reporting Information, Operating Profit

	2016			2015			2014
Operating Profit
North America	$	1,430		$	1,558		$	1,580
Europe	273			250			291
South America	257			291			449
Asia	276			289			303
Surface Technologies	102			105			123
Segment operating profit	2,338			2,493			2,746
Cost reduction program and other charges (Note 2)	(100		)	(172		)	(138		)
Total operating profit	$	2,238		$	2,321		$	2,608

^[1]

Schedule of Segment Reporting Information, Total Assets Table

	2016		2015		2014
Total Assets (b)
North America	$	10,019	$	9,748	$	10,187
Europe	2,928		2,704		2,996
South America	2,748		2,124		2,718
Asia	2,984		3,113		3,194
Surface Technologies	653		630		674
	$	19,332	$	18,319	$	19,769

(b) Includes equity investments as of December 31, as follows:

(Millions of dollars)	2016		2015		2014
North America	$	121	$	127	$	132
Europe	243		195		207
Asia	353		343		354
	$	717	$	665	$	693

Changes primarily relate to equity investment earnings, dividends and currency impacts.

^[1]

Schedule of Segment Reporting Information, Depreciation and Amortization Table

	2016		2015		2014
Depreciation and Amortization
North America	$	614	$	609	$	611
Europe	155		145		168
South America	133		135		177
Asia	179		176		170
Surface Technologies	41		41		44
	$	1,122	$	1,106	$	1,170

Schedule of Segment Reporting Information, Capital Expenditures and Acquisitions Table

	2016		2015		2014
Capital Expenditures and Acquisitions
North America	$	989	$	869	$	837
Europe	402		227		319
South America	232		285		373
Asia	165		208		310
Surface Technologies	40		34		56
	$	1,828	$	1,623	$	1,895

Revenue from External Customers by Products and Services

	2016		2015		2014
Sales by Product Group
Atmospheric gases and related	$	7,329	$	7,595	$	8,623
Process gases and other	2,609		2,572		2,971
Surface technologies	596		609		679
	$	10,534	$	10,776	$	12,273

Schedule of Segment Information, Sales by Major Country Table

	2016		2015		2014
Sales by Major Country
United States	$	4,623	$	4,771	$	5,171
Brazil	1,091		1,107		1,511
Other – foreign	4,820		4,898		5,591
	$	10,534	$	10,776	$	12,273

Schedule of Segment Information, Long-lived Assets by Major Country Table

	2016		2015		2014
Long-lived Assets by Major Country (c)
United States	$	4,922	$	4,825	$	4,817
Brazil	1,262		986		1,344
Other – foreign	5,293		5,187		5,836
	$	11,477	$	10,998	$	11,997

(c) Long-lived assets include property, plant and equipment – net.

^[1]

Schedule of Segment Information, Equity Investments Table

(b) Includes equity investments as of December 31, as follows:

(Millions of dollars)	2016		2015		2014
North America	$	121	$	127	$	132
Europe	243		195		207
Asia	353		343		354
	$	717	$	665	$	693

Changes primarily relate to equity investment earnings, dividends and currency impacts.

[1] Long-lived assets include property, plant and equipment – net.

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Quarterly Data (Tables)

12 Months Ended

Dec. 31, 2016

Quarterly Financial Data [Abstract]

Schedule of Quarterly Data (Unaudited) Table

(Dollar amounts in millions, except per share data)

2016	1Q (a)		2Q		3Q (a)		4Q		YEAR (a)
Sales	$	2,509	$	2,665	$	2,716	$	2,644	$	10,534
Cost of sales, exclusive of depreciation and amortization	$	1,381	$	1,468	$	1,533	$	1,478	$	5,860
Depreciation and amortization	$	272	$	281	$	284	$	285	$	1,122
Operating profit	$	554	$	588	$	497	$	599	$	2,238
Net income – Praxair, Inc.	$	356	$	399	$	339	$	406	$	1,500
Basic Per Share Data
Net income	$	1.25	$	1.40	$	1.19	$	1.42	$	5.25
Weighted average shares (000’s)	285,429		285,702		285,858		285,720		285,677
Diluted Per Share Data
Net income	$	1.24	$	1.39	$	1.18	$	1.41	$	5.21
Weighted average shares (000’s)	286,665		287,727		288,195		287,956		287,757

2015	1Q		2Q (a)		3Q (a)		4Q		YEAR (a)
Sales	$	2,757	$	2,738	$	2,686	$	2,595	$	10,776
Cost of sales, exclusive of depreciation and amortization	$	1,530	$	1,516	$	1,488	$	1,426	$	5,960
Depreciation and amortization	$	277	$	278	$	276	$	275	$	1,106
Operating profit	$	623	$	480	$	594	$	624	$	2,321
Net income – Praxair, Inc.	$	416	$	308	$	401	$	422	$	1,547
Basic Per Share Data
Net income	$	1.44	$	1.07	$	1.40	$	1.48	$	5.39
Weighted average shares (000’s)	289,143		287,939		285,651		285,288		287,005
Diluted Per Share Data
Net income	$	1.43	$	1.06	$	1.40	$	1.47	$	5.35
Weighted average shares (000’s)	291,652		290,102		287,311		286,856		289,055

________________________

(a) 2016 and 2015 include the impact of the following charges (see Notes 2, 11 & 16):

(Millions of dollars)	Operating Profit/ (Loss)			Net Income/ (Loss)			Diluted Earnings Per Share
Bond Redemption -Q1	$	—		$	(10	)	$	(0.04	)
Cost reduction program and other charges - Q3	(96		)	(63		)	(0.22		)
Pension settlement charge - Q3	(4		)	(3		)	(0.01		)
Year 2016	$	(100	)	$	(76	)	$	(0.27	)
Cost reduction program and other charges - Q2	$	(146	)	$	(112	)	$	(0.39	)
Cost reduction program and other charges - Q3	(19		)	(13		)	(0.04		)
Pension settlement charge - Q3	(7		)	(5		)	(0.02		)
Year 2015	$	(172	)	$	(130	)	$	(0.45	)

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Summary of Significant Accounting Policies (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Accounting Policy
Excess Tax Benefits	$ 20	$ 13	$ 19
Minimum ownership percentage generally utilized for an equity investment	20.00%
Maximum ownership percentage generally utilized for an equity investment	50.00%
Maximum ownership percentage generally utilized for a cost investment	20.00%
Minimum likelihood that a position will be sustained upon tax examination needed to recognize a benefit	50.00%
Tax benefits recognized are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement	50.00%
Product Revenues
Accounting Policy
Percentage of Consolidated Sales	87.00%
Minimum
Accounting Policy
Useful life	3 years
Maximum
Accounting Policy
Useful life	40 years

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Cost Reduction Program and Other Charges (Restructuring and Related Information) (Details) $ / shares in Units, $ in Millions	3 Months Ended												12 Months Ended
	Dec. 31, 2016 USD ($)	Sep. 30, 2016 USD ($) $ / shares		Jun. 30, 2016 USD ($)	Mar. 31, 2016 USD ($)		Dec. 31, 2015 USD ($)	Sep. 30, 2015 USD ($) $ / shares		Jun. 30, 2015 USD ($) $ / shares		Mar. 31, 2015 USD ($)	Dec. 31, 2016 USD ($) employee $ / shares	Dec. 31, 2015 USD ($) employee $ / shares	Dec. 31, 2014 USD ($) $ / shares	Feb. 13, 2013
Restructuring And Related Cost [Line Items]
Net income – Praxair, Inc.	$ 406	$ 339	[1]	$ 399	$ 356	[1]	$ 422	$ 401	[1]	$ 308	[1]	$ 416	$ 1,500	$ 1,547	$ 1,694
Operating Profit (Loss)	599	497	[1]	$ 588	554	[1]	624	594	[1]	480	[1]	$ 623	2,238	2,321	2,608
Income Tax Expense (Benefit)													551	612	691
Noncontrolling Interests													38	44	52
Severance Costs													7	5	22
Valuation Allowances and Reserves, Adjustments													6	(1)	(7)
Total cash requirements for cost reduction program	57						94						$ 57	$ 94
Restructuring and Related Cost, Number of Positions Eliminated | employee													730	1,544
Restructuring Reserve [Abstract]
Less: Cash payments													$ (13)
Total Cost Reduction Program
Restructuring And Related Cost [Line Items]
Net income – Praxair, Inc.		$ (63)						$ (13)		$ (112)
Income (Loss) from Continuing Operations, Per Diluted Share | $ / shares		$ (0.22)						$ (0.04)		$ (0.39)
Valuation Allowances and Reserves, Adjustments														$ 10
Pension Settlement Charge [Member]
Restructuring And Related Cost [Line Items]
Net income – Praxair, Inc.													$ (3)	$ (5)	$ (5)
Income (Loss) from Continuing Operations, Per Diluted Share | $ / shares													$ (0.01)	$ (0.02)	$ (0.02)
Defined Benefit Plan, Recognized Net Gain (Loss) Due to Settlements													$ (4)	$ (7)	$ (7)
North America Segment [Member]
Restructuring And Related Cost [Line Items]
Operating Profit (Loss)													1,430	1,558	1,580
North America Segment [Member] | Other Restructuring [Member]
Restructuring And Related Cost [Line Items]
Other Restructuring Costs													29	20
North America Segment [Member] | Severance Costs
Restructuring And Related Cost [Line Items]
Severance Costs													14	14
North America Segment [Member] | Total Cost Reduction Program
Restructuring And Related Cost [Line Items]
Total Cost Reduction Program													43	34
South America Segment Member
Restructuring And Related Cost [Line Items]
Operating Profit (Loss)													257	291	449
South America Segment Member | Other Restructuring [Member]
Restructuring And Related Cost [Line Items]
Other Restructuring Costs													7	49
South America Segment Member | Severance Costs
Restructuring And Related Cost [Line Items]
Severance Costs													5	18
South America Segment Member | Total Cost Reduction Program
Restructuring And Related Cost [Line Items]
Total Cost Reduction Program													12	67
Surface Technologies Segment [Member]
Restructuring And Related Cost [Line Items]
Operating Profit (Loss)													102	105	123
Surface Technologies Segment [Member] | Other Restructuring [Member]
Restructuring And Related Cost [Line Items]
Other Restructuring Costs													4	10
Surface Technologies Segment [Member] | Severance Costs
Restructuring And Related Cost [Line Items]
Severance Costs													3	9
Surface Technologies Segment [Member] | Total Cost Reduction Program
Restructuring And Related Cost [Line Items]
Total Cost Reduction Program													7	19
Europe Segment Member
Restructuring And Related Cost [Line Items]
Operating Profit (Loss)													273	250	291
Europe Segment Member | Other Restructuring [Member]
Restructuring And Related Cost [Line Items]
Other Restructuring Costs													3	9
Europe Segment Member | Severance Costs
Restructuring And Related Cost [Line Items]
Severance Costs													12	11
Europe Segment Member | Total Cost Reduction Program
Restructuring And Related Cost [Line Items]
Total Cost Reduction Program													15	20
Asia Segment Member
Restructuring And Related Cost [Line Items]
Operating Profit (Loss)													276	289	303
Asia Segment Member | Other Restructuring [Member]
Restructuring And Related Cost [Line Items]
Other Restructuring Costs													13	14
Asia Segment Member | Severance Costs
Restructuring And Related Cost [Line Items]
Severance Costs													6	11
Asia Segment Member | Total Cost Reduction Program
Restructuring And Related Cost [Line Items]
Total Cost Reduction Program													19	25
Total Segments
Restructuring And Related Cost [Line Items]
Operating Profit (Loss)													2,338	2,493	2,746
Total Segments | Other Restructuring [Member]
Restructuring And Related Cost [Line Items]
Other Restructuring Costs													56	102
Restructuring Reserve [Abstract]
Cost reduction program - Period Start					20								20
Less: Cash payments													(9)	(13)
Less: Non-cash asset write-offs													(39)	(68)
Restructuring Reserve, Translation Adjustment													(1)	(1)
Cost reduction program - Period End	27						20						27	20
Total Segments | Severance Costs
Restructuring And Related Cost [Line Items]
Severance Costs													40	63
Restructuring Reserve [Abstract]
Cost reduction program - Period Start					30								30
Less: Cash payments													(33)	(31)
Restructuring Reserve, Translation Adjustment													1	(2)
Cost reduction program - Period End	38						30						38	30
Total Segments | Total Cost Reduction Program
Restructuring And Related Cost [Line Items]
Total Cost Reduction Program								$ 19		$ 146			96	165
Restructuring Reserve [Abstract]
Cost reduction program - Period Start					$ 50								50
Less: Cash payments													(42)	(44)
Less: Non-cash asset write-offs													(39)	(68)
Restructuring Reserve, Translation Adjustment													0	(3)
Cost reduction program - Period End	$ 65						$ 50						$ 65	$ 50
Venezuela Currency Devaluation [Member]
Restructuring And Related Cost [Line Items]
Asset Impairment Charges															63
Monetary Asset and Liability Translation Loss															$ 68
Venezuela Exchange Rate															50	6.3
Net income – Praxair, Inc.															$ (131)
Venezuela Implied Devaluation On Remaining Sectors Rate															88.00%
Operating Profit (Loss)															$ (131)
Income (Loss) from Continuing Operations, Per Diluted Share | $ / shares															$ (0.45)

[1] 2016 and 2015 include the impact of the following charges (see Notes 2, 11 & 16):(Millions of dollars)OperatingProfit/(Loss) NetIncome/(Loss) Diluted Earnings Per ShareBond Redemption -Q1$— $(10) $(0.04)Cost reduction program and other charges - Q3(96) (63) (0.22)Pension settlement charge - Q3(4) (3) (0.01)Year 2016$(100) $(76) $(0.27) Cost reduction program and other charges - Q2$(146) $(112) $(0.39)Cost reduction program and other charges - Q3(19) (13) (0.04)Pension settlement charge - Q3(7) (5) (0.02)Year 2015$(172) $(130) $(0.45)

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Acquisitions (Details) € in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2016 EUR (€) Rate	Dec. 31, 2016 USD ($) Rate		Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)
Business Acquisition Line Items
Goodwill, Acquired During Period		$ 141		$ 56	$ 86
Purchase Price of Acquisitions		363		82	206
Goodwill		3,117		2,986	3,121
Finite-lived Intangible Assets Acquired		$ 82		26	66
Purchase of redeemable noncontrolling interest - percent acquired | Rate	34.00%	34.00%
Payments for Repurchase of Redeemable Noncontrolling Interest		$ 104	[1]	$ 9	$ 112	[1]
European CO2 Business [Member]
Business Acquisition Line Items
Goodwill, Acquired During Period		69
Purchase Price of Acquisitions	€ 206	230
Intangible assets		$ 121
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	20 years	20 years
Finite-lived Intangible Assets Acquired		$ 51

[1] In June 2016, Praxair acquired the remaining 34% stake in a Scandinavian joint venture for $104 million. In January 2014, Praxair acquired the remaining noncontrolling interests in a joint venture in the United States. The cash payments related to these acquisitions are shown in the financing section of the consolidated statements of cash flows under the caption "Noncontrolling interest transactions and other" as there was no change in control.

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Leases (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Operating Leases, Rent Expense, Net [Abstract]
Lease and Rental Expense	$ 141	$ 141	$ 148
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
2017	117
2018	97
2019	79
2020	65
2021	54
Thereafter	117
Total Minimum Payments Under Operating Leases	529
Present Value of Future Lease Payments Under Operating Leases	$ 490

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Income Taxes (Pre-tax Income and Income Tax Provision) (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Components of Income Tax Expense (Benefit), Continuing Operations [Abstract]
Current tax expense - U.S. federal	$ 266	$ 205	$ 291
Current tax expense - State and local	32	33	35
Current Foreign Tax Expense (Benefit)	266	275	310
Total current tax expense	564	513	636
Deferred tax expense (benefit) - U.S. federal	3	71	14
Deferred tax expense (benefit) - State and local	7	10	12
Deferred Foreign Income Tax Expense (Benefit)	(23)	18	29
Total deferred income taxes	(13)	99	55
Income Tax Expense (Benefit)	551	612	691
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest [Abstract]
Pre-tax income - United States	954	980	1,004
Pre-tax income - Foreign	1,094	1,180	1,391
Income Before Income Taxes and Equity Investments	$ 2,048	$ 2,160	$ 2,395

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Income Taxes (Tax Rate Analysis) (Details) - USD ($) $ in Millions		12 Months Ended
		Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Unusual or Infrequent Item [Line Items]
U.S. statutory income tax rate		$ 717	$ 756	$ 838
U.S. statutory income tax rate percentage		35.00%	35.00%	35.00%
State and local taxes - net of federal benefit		$ 28	$ 28	$ 31
State and local taxes - net of federal benefit percentage		1.40%	1.30%	1.30%
U.S. tax credits and deductions	[1]	$ (32)	$ (40)	$ (37)
U.S. tax credits and deductions percentage	[1]	(1.60%)	(1.90%)	(1.50%)
Foreign tax rate differentials	[2]	$ (140)	$ (121)	$ (186)
Foreign tax rate differentials percentage	[2]	(6.80%)	(5.60%)	(7.80%)
Income Tax Reconciliation Devaluation	[3]			$ 46
Income Tax Reconciliation Devaluation, percent	[3]			1.90%
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Share-based Compensation Cost, Amount	[4]	$ (20)
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Share-based Compensation Cost, Percent	[4]	(1.00%)
Other - net		$ (2)	$ (11)	$ (1)
Other - net percentage		(0.10%)	(0.50%)
Income Tax Expense (Benefit)		$ 551	$ 612	$ 691
Provision for income taxes percentage		26.90%	28.30%	28.90%
Current Foreign Tax Expense (Benefit)		$ 266	$ 275	$ 310
statute of limitations lapse [Member]
Unusual or Infrequent Item [Line Items]
Current Foreign Tax Expense (Benefit)				$ (56)

[1] U.S. tax credits and deductions relate to manufacturing deductions and to the research and experimentation tax credit.

[2] Primarily related to differences between the U.S. tax rate of 35% and the statutory tax rate in the countries where Praxair operates. 2014 includes $56 million of tax benefits related to a reduction of uncertain tax positions as a result of a lapse of statute of limitations. Other permanent items and tax rate changes were not significant.

[3] Impact related to non-deductible Venezuela currency devaluations in 2014 (see Note 2).

[4] See Note 1 related to adoption of the FASB's standard for Improvements to Employee Share-Based Payment Accounting in 2016.

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Income Taxes (Net Deferred Tax Liabilities and Valuation Allowances) (Details) - USD ($) $ in Millions		12 Months Ended
		Dec. 31, 2016		Dec. 31, 2015		Dec. 31, 2014	Dec. 31, 2013
Valuation Allowance [Line Items]
Charges to expense (income)		$ (13)		$ (20)		$ (20)
Other, including write-offs		6		(1)		(7)
Valuation allowances		(132)	[1]	(123)	[1]	(106)	$ (85)
Valuation Allowances And Reserves Translation Adjustments		(2)		4		$ 6
Deferred Tax Assets
Other Long-term Assets, Deferred Taxes		185	[2],[3]	118
Prepaid and Other Current Assets, Deferred Taxes				184
Carryforwards		284		287
Total net deferred tax assets		992		916
Accruals and other	[4]	404		351
Deferred Tax Assets, Goodwill and Intangible Assets		45		45
Deferred Tax Assets, in Process Research and Development		233		194
Deferred tax asset - Pension,OPEB		352		325
Total gross deferred tax assets		1,124		1,039
Deferred Tax Assets, Unrealized Currency Losses		6		16
Inventory		26		20
Benefit plans and related	[5]	404		365
Deferred Tax Liabilities
Deferred Credits, Deferred Taxes		1,209	[2],[3]	1,328
Goodwill		178		147
Total deferred tax liabilities		1,024		1,026
Other		62		155
Exchange gains		139		110
Intangible Assets		115		117
Deferred Tax Liabilities, Gross		2,016		1,942
Fixed assets		$ 1,522		$ 1,413

[1] Summary of valuation allowances relating to deferred tax assets follows (millions of dollars): 2016 2015 2014 Balance, January 1,$(123) $(106) $(85) Income tax (charge) benefit(13) (20) (20) Translation adjustments(2) 4 6 Other, including write-offs6 (1) (7) Balance, December 31,$(132) $(123) $(106)

[2] 2016 amounts reflect the adoption of the FASB's standard regarding Balance Sheet Classification of Deferred Taxes which requires all current deferred income tax assets and liabilities to be classified as non-current on the balance sheet (see Note 1).

[3] 2016 amounts reflect the adoption of the FASB's standard regarding the Balance Sheet Classification of Deferred Taxes which requires all current deferred income tax assets and liabilities to be classified as non-current on the balance sheet (see Note 1).

[4] Includes $233 million and $194 million in 2016 and 2015, respectively, related to research and development costs and $45 million and $45 million in 2016 and 2015, respectively, related to goodwill.

[5] Includes deferred taxes of $352 million and $325 million in 2016 and 2015, respectively, related to pension / OPEB funded status (see Notes 7 and 16).

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Income Taxes (Valuation Allowances Narrative) (Details) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Valuation Allowance [Abstract]
Undistributed earnings of foreign subsidiaries	$ 12,000,000,000
Minimum likelihood that a position will be sustained upon tax examination needed to recognize a benefit	50.00%
Other Tax Carryforward [Line Items]
Operating Loss Carryforwards	$ 106,000,000
Carryforwards	284,000,000	$ 287,000,000
Brazil Member
Other Tax Carryforward [Line Items]
Brazil net operating loss carryforward	61,000,000
United States Member
Other Tax Carryforward [Line Items]
Operating Loss Carryforwards, U.S.	45,000,000
US foreign tax credit carryforwards	62,000,000
Tax Credit Carryforward, Valuation Allowance	62,000,000
Foreign Country Member
Other Tax Carryforward [Line Items]
Carryforwards	61,000,000
Total Company Less US Federal and Brazil NOL And US Foreign Tax Credits Member
Other Tax Carryforward [Line Items]
Tax Credit Carryforward, Valuation Allowance	70,000,000
Carryforwards	116,000,000
U.S. State Member
Other Tax Carryforward [Line Items]
Carryforwards	$ 55,000,000

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Income Taxes (Unrecognized Tax Positions) (Details) - USD ($) $ in Millions		12 Months Ended
		Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Income Tax Uncertainties [Abstract]
Expenses (Income) for interest and penalties on tax reserves		$ (10)		$ (3)
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued		6	$ 8
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
Unrecognized income tax benefits, January 1		68	71	121
Additions for tax positions of prior years		6	21	13
Reductions for tax positions of prior years		(15)	(13)	(2)
Additions for current year tax positions				3
Reductions for settlements with taxing authorities	[1]	(2)	(3)	(3)
Reductions as a result of a lapse of an applicable statute of limitations	[2]			(56)
Foreign currency translation and other		(1)	(8)	(5)
Unrecognized income tax benefits, December 31		$ 56	$ 68	$ 71

[1] Settlements are uncertain tax positions that were effectively settled with the taxing authorities, including positions where the company has agreed to amend its tax returns to eliminate the uncertainty.

[2] See note (b) to the effective tax rate reconciliation.

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Income Taxes (Open Years by Major Tax Jurisdictions) (Details)	12 Months Ended
	Dec. 31, 2016
Domestic Country Member | Minimum
Income Tax Examination Line Items
Open Years	2011
Domestic Country Member | Maximum
Income Tax Examination Line Items
Open Years	2016
Foreign Country Canada Member | Minimum
Income Tax Examination Line Items
Open Years	2009
Foreign Country Canada Member | Maximum
Income Tax Examination Line Items
Open Years	2016
Foreign Country Mexico Member | Minimum
Income Tax Examination Line Items
Open Years	2011
Foreign Country Mexico Member | Maximum
Income Tax Examination Line Items
Open Years	2016
Foreign Country Germany Member | Minimum
Income Tax Examination Line Items
Open Years	2011
Foreign Country Germany Member | Maximum
Income Tax Examination Line Items
Open Years	2016
Foreign Country Italy Member | Minimum
Income Tax Examination Line Items
Open Years	2012
Foreign Country Italy Member | Maximum
Income Tax Examination Line Items
Open Years	2016
Foreign Country Spain Member | Minimum
Income Tax Examination Line Items
Open Years	2004
Foreign Country Spain Member | Maximum
Income Tax Examination Line Items
Open Years	2016
Foreign Country Brazil Member | Minimum
Income Tax Examination Line Items
Open Years	2005
Foreign Country Brazil Member | Maximum
Income Tax Examination Line Items
Open Years	2016
Foreign Country China Member | Minimum
Income Tax Examination Line Items
Open Years	2011
Foreign Country China Member | Maximum
Income Tax Examination Line Items
Open Years	2016
Foreign Country India Member | Minimum
Income Tax Examination Line Items
Open Years	2006
Foreign Country India Member | Maximum
Income Tax Examination Line Items
Open Years	2016
Foreign Country Korea Member | Minimum
Income Tax Examination Line Items
Open Years	2012
Foreign Country Korea Member | Maximum
Income Tax Examination Line Items
Open Years	2016
Foreign Country Thailand Member | Minimum
Income Tax Examination Line Items
Open Years	2010
Foreign Country Thailand Member | Maximum
Income Tax Examination Line Items
Open Years	2016

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Earnings Per Share - Praxair, Inc. Shareholders (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended												12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016		Jun. 30, 2016	Mar. 31, 2016		Dec. 31, 2015	Sep. 30, 2015		Jun. 30, 2015		Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Earnings Per Share [Abstract]
Net income – Praxair, Inc.	$ 406	$ 339	[1]	$ 399	$ 356	[1]	$ 422	$ 401	[1]	$ 308	[1]	$ 416	$ 1,500	$ 1,547	$ 1,694
Weighted average shares outstanding													285,289,000	286,606,000	291,987,000
Shares earned and issuable under compensation plans													388,000	399,000	507,000
Weighted average shares used in basic earnings per share	285,720,000	285,858,000		285,702,000	285,429,000		285,288,000	285,651,000		287,939,000		289,143,000	285,677,000	287,005,000	292,494,000
Stock options and awards													2,080,000	2,050,000	3,114,000
Weighted average shares used in diluted earnings per share	287,956,000	288,195,000		287,727,000	286,665,000		286,856,000	287,311,000		290,102,000		291,652,000	287,757,000	289,055,000	295,608,000
Basic Earnings Per Common Share	$ 1.42	$ 1.19		$ 1.40	$ 1.25		$ 1.48	$ 1.40		$ 1.07		$ 1.44	$ 5.25	$ 5.39	$ 5.79
Diluted Earnings Per Common Share	$ 1.41	$ 1.18	[1]	$ 1.39	$ 1.24	[1]	$ 1.47	$ 1.40	[1]	$ 1.06	[1]	$ 1.43	$ 5.21	$ 5.35	$ 5.73
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive excluded from the computation of Earnings Per Share													2,602,770	2,696,785

[1] 2016 and 2015 include the impact of the following charges (see Notes 2, 11 & 16):(Millions of dollars)OperatingProfit/(Loss) NetIncome/(Loss) Diluted Earnings Per ShareBond Redemption -Q1$— $(10) $(0.04)Cost reduction program and other charges - Q3(96) (63) (0.22)Pension settlement charge - Q3(4) (3) (0.01)Year 2016$(100) $(76) $(0.27) Cost reduction program and other charges - Q2$(146) $(112) $(0.39)Cost reduction program and other charges - Q3(19) (13) (0.04)Pension settlement charge - Q3(7) (5) (0.02)Year 2015$(172) $(130) $(0.45)

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Supplemental Information (Details) - USD ($) $ / shares in Units, $ in Millions		3 Months Ended									12 Months Ended
		Dec. 31, 2016		Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2016		Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2016	Dec. 31, 2016
Other Current Liabilities [Abstract]
Accrued expenses		$ 285					$ 247				$ 285		$ 247
Payrolls		141					114				141		114
Cost reduction program and other charges (Note 2)		59					44				59		44
Pension and postretirement (Note 16)		24					29				24		29
Interest payable		78					71				78		71
Employee benefit accrual		23					22				23		22
Other		223					167				223		167
Other current liabilities		841					702				841		702
Insurance reserves		8					8				8		8
Selling, General and Administrative Expense [Abstract]
Selling, general and administrative											1,145		1,152	$ 1,308
Selling											493		507	572
General and administrative											652		645	736
Noncontrolling Interest [Abstract]
Net Income (Loss) Attributable to Noncontrolling Interest											38		44	52
Noncontrolling Interests Income From Operations											35		34	40
Net Income (Loss) Attributable to Redeemable Noncontrolling Interest											3		10	12
Other Long Term Liabilities [Abstract]
Other long-term liabilities		1,213					1,155				1,213		1,155
Pension and postretirement (Note 16)		863					760				863		760
Long-term liability related to cost reduction program		6					6				6		6
Other		269					301				269		301
Interest and penalties for uncertain tax positions (Note 5)		6					8				6		8
Insurance reserves		25					24				25		24
Tax liabilities for uncertain tax positions		44					56				44		56
Prepaid Expense and Other Assets, Noncurrent [Abstract]
Deferred charges		51					50				51		50
Long-term receivables reserve		50					35				50		35
Pension assets (Note 16)		13					41				13		41
Insurance Contracts	[1]	74					74				74		74
Deferred income taxes (Note 5)		185	[2],[3]				118				185	[2],[3]	118
Other		119					100				119		100
Other long-term assets		558					476				558		476
Investments carried at cost		14					12				14		12
Long-term receivables, net	[4]	46					33				46		33
Deposits		56					48				56		48
Other Income Expense Net [Abstract]
Business divestitures and asset gains (losses) – net											16		34	36
Other income (expenses) – net											23		28	9
Other - net											8		(3)	(22)
Currency related net gains (losses)											1		(2)	1
Severance expense											(7)		(5)	(22)
Partnership income											5		4	16
Debt Instrument [Line Items]
Repayments of Long-term Debt											770		1,000	764
Interest incurred on debt											208		194	215
Interest Capitalized											(34)		(33)	(38)
Bond redemption	[5]										16			36
Interest expense – net											190		161	213
Inventory, Finished Goods and Work in Process, Gross [Abstract]
Work in process		45					48				45		48
Raw materials and supplies		197					202				197		202
Inventories		550					531				550		531
Finished goods		308					281				308		281
Accounts, Notes, Loans and Financing Receivable, Net, Current [Abstract]
Total Accounts Receivable - Gross		1,762					1,702				1,762		1,702
Less: allowance for doubtful accounts	[6]	(121)					(101)				(121)		(101)
Other Accounts Receivable		122					101				122		101
Provisions to the allowance for doubtful accounts											41		35	39
Accounts receivable – net		1,641					1,601				1,641		1,601
Trade		1,640					1,601				1,640		1,601
Depreciation, Depletion and Amortization [Abstract]
Depreciation											1,071		1,059	1,123
Depreciation and amortization		285		$ 284	$ 281	$ 272	275	$ 276	$ 278	$ 277	1,122		1,106	1,170
Amortization of other intangibles (Note 10)											51		47	47
Prepaid Expense and Other Assets, Current [Abstract]
Prepaid and other current assets		165					347				165		347
Prepaid	[7]	108					110				108		110
Deferred income taxes (Note 5)							184						184
Estimated Income Tax Payments		39					42				39		42
Other		57					53				57		53
Deferred Revenue and Credits, Noncurrent [Abstract]
Other		63					62				63		62
Deferred Income Tax Liabilities (Note 5)		1,209	[2],[3]				1,328				1,209	[2],[3]	1,328
Deferred credits		$ 1,272					$ 1,390				$ 1,272		$ 1,390
US Long-term 5.20% Notes due 2017
Debt Instrument [Line Items]
Income (Loss) from Continuing Operations, Per Diluted Share											$ 0.04
Extinguishment of Debt, Gain (Loss), Net of Tax											$ 10
Repayments of Long-term Debt											325
Debt Instrument, Interest Rate, Stated Percentage							5.20%						5.20%			5.20%
Bond redemption											$ 16
US Long-term 5.375% Notes due 2016 [Member]
Debt Instrument [Line Items]
Extinguishment of Debt, Amount														$ 434
Income (Loss) from Continuing Operations, Per Diluted Share														$ 0.07
Extinguishment of Debt, Gain (Loss), Net of Tax														$ 22
Repayments of Long-term Debt														$ 400
Debt Instrument, Interest Rate, Stated Percentage														5.375%
Bond redemption														$ 36

[1] Consists primarily of insurance contracts and other investments to be utilized for non-qualified pension and OPEB obligations.

[2] 2016 amounts reflect the adoption of the FASB's standard regarding Balance Sheet Classification of Deferred Taxes which requires all current deferred income tax assets and liabilities to be classified as non-current on the balance sheet (see Note 1).

[3] 2016 amounts reflect the adoption of the FASB's standard regarding the Balance Sheet Classification of Deferred Taxes which requires all current deferred income tax assets and liabilities to be classified as non-current on the balance sheet (see Note 1).

[4] Long-term receivables are not material and are largely reserved. The balances at December 31, 2016 and 2015 are net of reserves of $50 million and $35 million, respectively. The amounts in both periods relate primarily to government receivables in Brazil and other long-term notes receivable from customers. Collectability is reviewed regularly and uncollectible amounts are written-off as appropriate. The account balance changes during 2016 were primarily due to additional government receivables in Brazil and foreign exchange rate movements.

[5] In February 2016, Praxair redeemed $325 million of 5.20% notes due March 2017 resulting in a $16 million interest charge ($10 million after-tax, or $0.04 per diluted share). In December 2014, Praxair redeemed $400 million of 5.375% notes due November 2016 for $434 million resulting in an $36 million charge ($22 million after-tax, or $0.07 per diluted share).

[6] Provisions to the allowance for doubtful accounts were $41 million, $35 million, and $39 million in 2016, 2015, and 2014, respectively. The allowance activity in each period related primarily to write-offs of uncollectible amounts, net of recoveries and currency movements.

[7] Includes estimated income tax payments of $39 million and $42 million in 2016 and 2015, respectively.

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Supplemental Information (Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Millions		12 Months Ended
		Dec. 31, 2016	Dec. 31, 2015
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
Derivatives - net of taxes		$ (1)	$ (1)
Pension and OPEB funded status obligation		(653)	(577)
Accumulated other comprehensive income (loss)		(4,600)	(4,596)
Funded Status Obligations, Taxes		(352)	(325)
North America Segment [Member]
Segment Reporting Information [Line Items]
Cumulative Translation Adjustment	[1]	(1,038)	(899)
South America Segment Member
Segment Reporting Information [Line Items]
Cumulative Translation Adjustment	[1]	(1,969)	(2,272)
Europe Segment Member
Segment Reporting Information [Line Items]
Cumulative Translation Adjustment	[1]	(504)	(526)
Asia Segment Member
Segment Reporting Information [Line Items]
Cumulative Translation Adjustment	[1]	(383)	(285)
Surface Technologies Segment [Member]
Segment Reporting Information [Line Items]
Cumulative Translation Adjustment		(52)	(36)
Total Segments
Segment Reporting Information [Line Items]
Cumulative Translation Adjustment		$ (3,946)	$ (4,018)

[1] North America consists of currency translation adjustments in Canada and Mexico. South America relates primarily to Brazil and Argentina. Europe relates primarily to Spain, Italy and Germany. Asia relates primarily to Korea and India.

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Property, Plant & Equipment - Net (Details) - USD ($) $ in Millions		12 Months Ended
		Dec. 31, 2016	Dec. 31, 2015
Property, Plant and Equipment
Gross Balance		$ 23,921	$ 22,694
Less: accumulated depreciation		(12,444)	(11,696)
Property, plant and equipment – net		11,477	10,998
Production plants (primarily 15-year life) (a)
Property, Plant and Equipment
Gross Balance	[1]	14,588	13,778
Storage tanks
Property, Plant and Equipment
Gross Balance		2,360	2,196
Transportation equipment and other
Property, Plant and Equipment
Gross Balance		2,038	1,925
Cylinders (primarily 30-year life)
Property, Plant and Equipment
Gross Balance		1,722	1,654
Buildings
Property, Plant and Equipment
Gross Balance		1,096	1,085
Land and improvements (b)
Property, Plant and Equipment
Gross Balance	[2]	559	517
Construction in progress
Property, Plant and Equipment
Gross Balance		$ 1,558	$ 1,539
Minimum
Property, Plant and Equipment
Useful life		3 years
Minimum | Production plants (primarily 15-year life) (a)
Property, Plant and Equipment
Useful life	[1]	10 years
Minimum | Storage tanks
Property, Plant and Equipment
Useful life		15 years
Minimum | Transportation equipment and other
Property, Plant and Equipment
Useful life		3 years
Minimum | Cylinders (primarily 30-year life)
Property, Plant and Equipment
Useful life		10 years
Minimum | Buildings
Property, Plant and Equipment
Useful life		25 years
Minimum | Land Improvements [Member]
Property, Plant and Equipment
Useful life	[2]	0 years
Maximum
Property, Plant and Equipment
Useful life		40 years
Maximum | Production plants (primarily 15-year life) (a)
Property, Plant and Equipment
Useful life	[1]	20 years
Maximum | Storage tanks
Property, Plant and Equipment
Useful life		20 years
Maximum | Transportation equipment and other
Property, Plant and Equipment
Useful life		15 years
Maximum | Cylinders (primarily 30-year life)
Property, Plant and Equipment
Useful life		30 years
Maximum | Buildings
Property, Plant and Equipment
Useful life		40 years
Maximum | Land Improvements [Member]
Property, Plant and Equipment
Useful life	[2]	20 years

[1] Depreciable lives of production plants related to long-term customer supply contracts are consistent with the contract lives.

[2] Land is not depreciated.

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Goodwill (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015		Dec. 31, 2014
Goodwill [Line Items]
Goodwill, Beginning Balance	$ 2,986	$ 3,121
Goodwill, Acquired During Period	141	56		$ 86
Purchase adjustments & other	8	(12)	[1]
Foreign currency translation	(18)	(179)
Goodwill, Ending Balance	3,117	2,986		3,121
North America Segment [Member]
Goodwill [Line Items]
Goodwill, Beginning Balance	2,111	2,139
Goodwill, Acquired During Period	61	21
Purchase adjustments & other	6	(12)	[1]
Foreign currency translation	(13)	(37)
Goodwill, Ending Balance	2,165	2,111		2,139
South America Segment Member
Goodwill [Line Items]
Goodwill, Beginning Balance	98	147
Goodwill, Acquired During Period	9	9
Foreign currency translation	25	(58)
Goodwill, Ending Balance	132	98		147
Europe Segment Member
Goodwill [Line Items]
Goodwill, Beginning Balance	582	654
Goodwill, Acquired During Period	71
Foreign currency translation	(24)	(72)
Goodwill, Ending Balance	629	582		654
Asia Segment Member
Goodwill [Line Items]
Goodwill, Beginning Balance	59	38
Goodwill, Acquired During Period		23
Foreign currency translation	(1)	(2)
Goodwill, Ending Balance	58	59		38
Surface Technologies Segment [Member]
Goodwill [Line Items]
Goodwill, Beginning Balance	136	143
Goodwill, Acquired During Period		3
Purchase adjustments & other	2
Foreign currency translation	(5)	(10)
Goodwill, Ending Balance	$ 133	$ 136		$ 143

[1] Primarily relates to the elimination of goodwill with a divestiture.

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Other Intangible Assets (Details) - USD ($) $ in Millions		12 Months Ended
		Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Finite Lived Intangible Assets [Line Items]
Beginning Period Cost		$ 783	$ 777
Additions (primarily acquisitions)		82	26	$ 66
Foreign currency translation		(19)	(23)
Other	[1]	(10)	3
Ending Period Cost		836	783	777
Beginning Accumulated Amortization		(215)	(174)
Amortization expense		(51)	(47)	(47)
Foreign currency translation		6	8
Other	[1]	7	(2)
Ending Accumulated Amortization		(253)	(215)	(174)
Net balance finite lived intangibles		$ 583	568
Additional Finite Lived Intangible Asset Information (Details) [Abstract]
Remaining weighted-average amortization period for intangible asset		17 years
2017		$ 45
2018		42
2019		40
2020		38
2021		36
Thereafter		382
Customer & License/Use Agreements
Finite Lived Intangible Assets [Line Items]
Beginning Period Cost		698	693
Additions (primarily acquisitions)		72	23
Foreign currency translation		(16)	(21)
Other	[1]	(3)	3
Ending Period Cost		751	698	693
Beginning Accumulated Amortization		(179)	(147)
Amortization expense		(41)	(37)
Foreign currency translation		6	7
Other	[1]		(2)
Ending Accumulated Amortization		(214)	(179)	(147)
Net balance finite lived intangibles		537	519
Non-compete Agreements
Finite Lived Intangible Assets [Line Items]
Beginning Period Cost		38	37
Additions (primarily acquisitions)		4	2
Foreign currency translation		(1)	(1)
Other	[1]	(7)
Ending Period Cost		34	38	37
Beginning Accumulated Amortization		(23)	(18)
Amortization expense		(6)	(6)
Foreign currency translation			1
Other	[1]	7
Ending Accumulated Amortization		(22)	(23)	(18)
Net balance finite lived intangibles		12	15
Patents & Other
Finite Lived Intangible Assets [Line Items]
Beginning Period Cost		47	47
Additions (primarily acquisitions)		6	1
Foreign currency translation		(2)	(1)
Ending Period Cost		51	47	47
Beginning Accumulated Amortization		(13)	(9)
Amortization expense		(4)	(4)
Ending Accumulated Amortization		(17)	(13)	$ (9)
Net balance finite lived intangibles		$ 34	$ 34

[1] Other primarily relates to the write-off of fully amortized assets, purchase accounting adjustments and reclassifications.

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Debt (ST and LT Debt) (Details) $ / shares in Units, € in Millions		12 Months Ended
		Dec. 31, 2016 USD ($) $ / shares	Dec. 31, 2015 USD ($)		Dec. 31, 2014 USD ($)	Dec. 31, 2016 EUR (€)	Dec. 31, 2016 USD ($)		Dec. 31, 2016	Dec. 31, 2016 Rate	Feb. 12, 2016 Rate	Feb. 11, 2016 USD ($) Rate
Debt Instrument Line Items
Current portion of long-term debt			$ (6,000,000)				$ (164,000,000)
Fair value increase			6,000,000				4,000,000
Total short-term debt			250,000,000				434,000,000
Carrying value of long-term debt including current portion			8,981,000,000				9,081,000,000
Long-term debt			8,975,000,000				8,917,000,000
Obligations under capital lease			7,000,000				7,000,000
Other bank borrowings (Primarily International)			163,000,000				101,000,000
Repayments of Long-term Debt		$ 770,000,000	1,000,000,000		$ 764,000,000
Commercial Paper			87,000,000				333,000,000
Loss on Bond Redemption	[1]	16,000,000			$ 36,000,000
Debt And Capital Lease Obligations			9,231,000,000				9,515,000,000
US Long-term 0.75% Notes due 2016
Debt Instrument Line Items
Repayments of Long-term Debt		400,000,000
Senior Notes - Carrying Amount	[2],[3]		$ 400,000,000
Debt Instrument, Interest Rate, Stated Percentage			0.75%							0.75%
US Long-term 5.20% Notes due 2017
Debt Instrument Line Items
Repayments of Long-term Debt		325,000,000
Loss on Bond Redemption		$ 16,000,000
Income (Loss) from Continuing Operations, Per Diluted Share | $ / shares		$ 0.04
Bond Redemption, Loss, Net of Tax		$ 10,000,000
Senior Notes - Carrying Amount	[2],[3]		$ 325,000,000
Debt Instrument, Interest Rate, Stated Percentage			5.20%							5.20%
US Long-term1.05% Notes due 2017
Debt Instrument Line Items
Senior Notes - Carrying Amount	[2],[4]		$ 399,000,000				400,000,000
Debt Instrument, Interest Rate, Stated Percentage			1.05%						1.05%
US Long-term 1.20% Notes Due 2018 [Member]
Debt Instrument Line Items
Senior Notes - Carrying Amount	[2]		$ 499,000,000				499,000,000
Debt Instrument, Interest Rate, Stated Percentage			1.20%						1.20%
US Long-term 1.25% Notes due 2018 [Member]
Debt Instrument Line Items
Senior Notes - Carrying Amount	[2],[5]		$ 480,000,000				478,000,000
Debt Instrument, Interest Rate, Stated Percentage			1.25%						1.25%
US Long-term 4.50% Notes due 2019
Debt Instrument Line Items
Senior Notes - Carrying Amount	[2]		$ 597,000,000				598,000,000
Debt Instrument, Interest Rate, Stated Percentage			4.50%						4.50%
US Long-term 1.90% Notes Due 2019 [Member]
Debt Instrument Line Items
Senior Notes - Carrying Amount	[2]		$ 499,000,000				499,000,000
Debt Instrument, Interest Rate, Stated Percentage			1.90%						1.90%
Euro Denominated Long-term 1.50% Notes Due 2020 [Member]
Debt Instrument Line Items
Senior Notes - Carrying Amount	[2]		$ 646,000,000				627,000,000
Debt Instrument, Interest Rate, Stated Percentage			1.50%						1.50%
Debt Instrument, Face Value | €						€ 600
US Long-term 2.25% notes due 2020 [Member]
Debt Instrument Line Items
Senior Notes - Carrying Amount	[2]		$ 298,000,000				299,000,000
Debt Instrument, Interest Rate, Stated Percentage			2.25%						2.25%
US Long-term 4.05% Notes due 2021
Debt Instrument Line Items
Senior Notes - Carrying Amount	[2]		$ 497,000,000				497,000,000
Debt Instrument, Interest Rate, Stated Percentage			4.05%						4.05%
US Long-term 3.00% Notes due 2021
Debt Instrument Line Items
Senior Notes - Carrying Amount	[2]		$ 496,000,000				496,000,000
Debt Instrument, Interest Rate, Stated Percentage			3.00%						3.00%
US Long-term 2.45% Notes due 2022
Debt Instrument Line Items
Senior Notes - Carrying Amount	[2]		$ 596,000,000				597,000,000
Debt Instrument, Interest Rate, Stated Percentage			2.45%						2.45%
US Long-term 2.20% Notes due 2022
Debt Instrument Line Items
Senior Notes - Carrying Amount	[2]		$ 497,000,000				498,000,000
Debt Instrument, Interest Rate, Stated Percentage			2.20%						2.20%
US Long-term 2.70% Notes due 2023
Debt Instrument Line Items
Senior Notes - Carrying Amount	[2]		$ 497,000,000				497,000,000
Debt Instrument, Interest Rate, Stated Percentage			2.70%						2.70%
Euro Denominated 1.20% Due 2024 [Member]
Debt Instrument Line Items
Senior Notes - Carrying Amount	[2],[6]						575,000,000
Debt Instrument, Interest Rate, Stated Percentage									1.20%		1.20%
Debt Instrument, Face Value | €						550
US Long-term 2.65% Notes due 2025 [Member]
Debt Instrument Line Items
Senior Notes - Carrying Amount	[2]		$ 396,000,000				397,000,000
Debt Instrument, Interest Rate, Stated Percentage			2.65%						2.65%
Euro Denominated Long-term 1.625% Notes Due 2025 [Member] [Member]
Debt Instrument Line Items
Senior Notes - Carrying Amount	[2]		$ 535,000,000				519,000,000
Debt Instrument, Interest Rate, Stated Percentage			1.625%						1.625%
Debt Instrument, Face Value | €						€ 500
US Long-term 3.20% notes due 2026 [Member]
Debt Instrument Line Items
Senior Notes - Carrying Amount			$ 446,000,000	[2]			725,000,000	[2],[6]				$ 275,000,000
Debt Instrument, Interest Rate, Stated Percentage			3.20%						3.20%			3.20%
US Long-term 3.55% Notes due 2042
Debt Instrument Line Items
Senior Notes - Carrying Amount	[2]		$ 661,000,000				662,000,000
Debt Instrument, Interest Rate, Stated Percentage			3.55%						3.55%
US Long-term other
Debt Instrument Line Items
Other Debt - Carrying Amount			$ 3,000,000				12,000,000
Other International Bank Borrowings
Debt Instrument Line Items
Other Debt - Carrying Amount			57,000,000				49,000,000
US Long-term floating plus 0.33% Notes Due 2017 [Member]
Debt Instrument Line Items
Senior Notes - Carrying Amount	[2]		$ 150,000,000				150,000,000
$2.5 Billion Senior Unsecured Credit Facilty, expires in 2019
Debt Instrument Line Items
Line of Credit Facility, Maximum Borrowing Capacity							$ 2,500,000,000
Net Investment Hedging [Member]
Debt Instrument Line Items
Derivatives used in Net Investment Hedge, Increase (Decrease), Gross of Tax		$ 78,000,000

[1] In February 2016, Praxair redeemed $325 million of 5.20% notes due March 2017 resulting in a $16 million interest charge ($10 million after-tax, or $0.04 per diluted share). In December 2014, Praxair redeemed $400 million of 5.375% notes due November 2016 for $434 million resulting in an $36 million charge ($22 million after-tax, or $0.07 per diluted share).

[2] Amounts are net of unamortized discounts, premiums and/or debt issuance cost as applicable.

[3] In February 2016, Praxair repaid $400 million of 0.75% notes that became due. Also in February 2016, Praxair redeemed $325 million of 5.20% notes due March 2017 resulting in a $16 million interest charge ($10 million after-tax, or $0.04 per diluted share).

[4] Classified as long-term because of the Company’s intent to refinance this debt on a long-term basis and the availability of such financing under the terms of an existing $2.5 billion long-term credit facility.

[5] December 31, 2016 and 2015 include a $4 million and $6 million fair value increase, respectively, related to hedge accounting. See Note 12 for additional information.

[6] In February 2016, Praxair issued €550 million of 1.20% Euro-denominated notes due 2024. In addition, Praxair issued $275 million of 3.20% notes due 2026. The proceeds of these debt issuances were used for general corporate purposes.

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Debt (Credit Facilities) (Details) - $2.5 Billion Senior Unsecured Credit Facilty, expires in 2019	12 Months Ended
	Dec. 31, 2016 USD ($)
Line Of Credit Facility [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 2,500,000,000
Available for Borrowing	$ 2,500,000,000
Expires	Dec. 18, 2019
Debt Covenant Limit	0.7
Debt Covenant Actual Compliance	0.52

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Debt (Other Debt Information) (Details) - USD ($) $ in Millions		Dec. 31, 2016	Dec. 31, 2015
Long-term Debt, Other Disclosures [Abstract]
Short Term Debt Weighted Average Interest Rate		1.20%	3.40%
Pledged Assets		$ 5
Secured Long Term Debt		5
Long-term Debt, Fiscal Year Maturity [Abstract]
2017	[1]	164
2018		985
2019	[1]	1,503
2020		938
2021		1,006
Thereafter		4,485
Carrying value of long-term debt including current portion		9,081	$ 8,981
Debt Instruments That Retain Long Term Classification Due to Ability And Intent To Refinance Member
Debt Instrument Line Items
Senior Notes		$ 400

[1] $400 million of debt due in 2017 has been reflected in 2019 maturities due to the company’s intent to refinance this debt on a long-term basis and the ability to do so under the $2.5 billion senior unsecured credit facility with a syndicate of banks which expires in 2019

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Financial Instruments (Details) € in Millions, $ in Millions		12 Months Ended
		Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)	Dec. 31, 2011 USD ($)	Dec. 31, 2009 USD ($)	Dec. 31, 2016 EUR (€)	Dec. 31, 2016 USD ($)	Feb. 12, 2016 Rate	Jun. 30, 2012 USD ($)	Aug. 31, 2011 USD ($)	Dec. 31, 2008 USD ($)
Derivative [Line Items]
Notional Amount of Derivatives			$ 3,061						$ 2,617
Derivative Liabilities			11						18
Derivatives Assets			22						18
Gain (Loss) Recognized in AOCI, Before Tax		$ 1	1	$ 4
Gain (Loss) Reclassified from AOCI to Earnings, Before Tax		(1)	(1)
Derivative Instruments, Tax Impact of Reclassification From AOCI	[1]	1
Net Change in AOCI				3
Net Investment Hedging [Member]
Derivative [Line Items]
Derivatives used in Net Investment Hedge, Increase (Decrease), Gross of Tax		78
Derivatives used in Net Investment Hedge Increase (Decrease) since inception, Gross of Tax		339
Aug 2011 Treasury Lock [Member]
Derivative [Line Items]
Debt Instrument Face Amount	[2]											$ 500
Debt Instrument Interest Rate Stated Percentage												3.00%
Jul 2012 Treasury Lock [Member]
Derivative [Line Items]
Debt Instrument Face Amount	[2]										$ 500
Debt Instrument Interest Rate Stated Percentage											2.20%
December 2008 Treasury Lock [Member]
Derivative [Line Items]
Notional Amount of Derivatives													$ 500
Debt Instrument Face Amount	[2]												$ 600
Debt Instrument Interest Rate Stated Percentage													4.50%
Derivatives Not Designated as Hedging Instruments
Derivative [Line Items]
Amount of Pre-Tax Gain (Loss) Recognized in Earnings	[3]	25	(170)	(71)
Derivatives Not Designated as Hedging Instruments | Foreign Exchange Contract
Derivative [Line Items]
Notional Amount of Derivatives			2,548						2,104
Derivative Liabilities	[4]		11						18
Derivatives Assets	[4]		15						11
Derivatives Not Designated as Hedging Instruments | Other Balance Sheet Items [Member]
Derivative [Line Items]
Amount of Pre-Tax Gain (Loss) Recognized in Earnings	[3]	4	(8)	(2)
Derivatives Not Designated as Hedging Instruments | Debt-Related [Member]
Derivative [Line Items]
Amount of Pre-Tax Gain (Loss) Recognized in Earnings	[3]	21	(162)	(69)
Derivatives Designated as Hedging Instruments - Cash Flow | Foreign Exchange Contract
Derivative [Line Items]
Notional Amount of Derivatives			38						38
Derivatives Assets	[4]		1						3
Derivatives Designated as Hedging Instruments - Cash Flow | Treasury Rate Locks Member
Derivative [Line Items]
Deferred Gain (Loss) on Hedge, Gross	[5]		(1)						(2)
Original Deferred Gain on Settlement of Derivative Instruments - Gross							$ 16
Payments for Hedge, Financing Activities					$ (2)	$ (11)
Derivative Instruments, Tax Impact of Net Change in AOCI	[5]	1
Derivative Instruments Gain (Loss) Recognized In Other Comprehensive Income Effective Portion Net Of Tax	[5]	(1)	(1)
Derivatives Designated as Hedging Instruments - Cash Flow | Aug 2011 Treasury Lock [Member]
Derivative [Line Items]
Deferred Gain (Loss) on Hedge, Gross	[5]		(6)						(5)
Derivatives Designated as Hedging Instruments - Cash Flow | Jul 2012 Treasury Lock [Member]
Derivative [Line Items]
Deferred Gain (Loss) on Hedge, Gross	[5]		(1)						(1)
Derivatives Designated as Hedging Instruments - Cash Flow | December 2008 Treasury Lock [Member]
Derivative [Line Items]
Deferred Gain (Loss) on Hedge, Gross	[5]		6						4
Derivatives Designated as Hedging Instruments - Fair Value | Interest Rate Swap [Member]
Derivative [Line Items]
Notional Amount of Derivatives			475						475
Derivatives Assets	[6]		6						4
Debt Instrument Face Amount									$ 475
Debt Instrument Interest Rate Stated Percentage								1.25%	1.25%
Designated as Hedging Instrument [Member]
Derivative [Line Items]
Interest Rate Cash Flow Hedge Gain (Loss) to be Reclassified During Next 12 Months, Net									$ 1
Notional Amount of Derivatives			513						513
Derivatives Assets			7						7
Gain (Loss) Recognized in AOCI, Before Tax	[1]	(3)	1	(5)
Gain (Loss) Reclassified from AOCI to Earnings, Before Tax	[1]	(1)	(1)
Derivative Instruments, Tax Impact of Net Change in AOCI	[1]			2
Derivative Instruments, Gain (Loss) Recognized in AOCI Net of Tax	[1]	(3)	1	(3)
Other Comprehensive (Income) Loss, Reclassification Adjustment from AOCI on Derivatives, Net of Tax	[1]		(1)
Designated as Hedging Instrument [Member] | Net Investment Hedging [Member]
Derivative [Line Items]
Gain (Loss) Recognized in AOCI, Before Tax	[1]	(4)		(6)
Designated as Hedging Instrument [Member] | Balance Sheet Items [Member]
Derivative [Line Items]
Gain (Loss) Recognized in AOCI, Before Tax	[1]	1	1
Gain (Loss) Reclassified from AOCI to Earnings, Before Tax	[1]		(1)
Designated as Hedging Instrument [Member] | Forecasted Purchases [Member]
Derivative [Line Items]
Gain (Loss) Recognized in AOCI, Before Tax	[1]			$ 1
Designated as Hedging Instrument [Member] | Total Treasury Locks [Member]
Derivative [Line Items]
Gain (Loss) Reclassified from AOCI to Earnings, Before Tax	[1]	$ (1)
Euro Denominated Long-term 1.50% Notes Due 2020 [Member]
Derivative [Line Items]
Senior Notes	[7]		$ 646						$ 627
Debt Instrument Face Amount | €								€ 600
Debt Instrument Interest Rate Stated Percentage			1.50%					1.50%	1.50%
Euro Denominated Long-term 1.625% Notes Due 2025 [Member] [Member]
Derivative [Line Items]
Senior Notes	[7]		$ 535						$ 519
Debt Instrument Face Amount | €								€ 500
Debt Instrument Interest Rate Stated Percentage			1.625%					1.625%	1.625%
Euro Denominated 1.20% Due 2024 [Member]
Derivative [Line Items]
Senior Notes	[7],[8]								$ 575
Debt Instrument Face Amount | €								€ 550
Debt Instrument Interest Rate Stated Percentage								1.20%	1.20%	1.20%

[1] The gains (losses) on net investment hedges are recorded as a component of AOCI within foreign currency translation adjustments in the consolidated balance sheets and consolidated statements of comprehensive income. The gains (losses) on forecasted purchases, balance sheet items, and treasury rate locks are recorded as a component of AOCI within derivative instruments in the consolidated balance sheets and the consolidated statements of comprehensive income. There was no ineffectiveness for these instruments during 2016 or 2015. The gains (losses) on net investment hedges are reclassified to earnings only when the related currency translation adjustments are required to be reclassified, usually upon sale or liquidation of the investment. The gains (losses) for interest rate contracts are reclassified to earnings as interest expense –net on a straight-line basis over the remaining maturity of the underlying debt. Net losses of approximately $1 million are expected to be reclassified to earnings during 2017.

[2] The notional amount of the treasury rate lock contracts are equal to the underlying debt instrument with the exception of the treasury rate lock contract entered into to hedge the $600 million 4.50% fixed-rate notes that mature in 2019. The notional amount of this contract was $500 million.

[3] The gains (losses) on balance sheet items are offset by gains (losses) recorded on the underlying hedged assets and liabilities. Accordingly, the gains (losses) for the derivatives and the underlying hedged assets and liabilities related to debt items are recorded in the consolidated statements of income as interest expense-net. Other balance sheet items and anticipated net income gains (losses) are recorded in the consolidated statements of income as other income (expenses)-net.

[4] Assets are recorded in prepaid and other current assets, and liabilities are recorded in other current liabilities.

[5] The unrecognized gains / (losses) for the treasury rate locks are shown in accumulated other comprehensive income ("AOCI") and are being recognized on a straight line basis to interest expense – net over the term of the underlying debt agreements. Refer to the table below summarizing the impact of the company’s consolidated statements of income and AOCI for current period gain (loss) recognition.

[6] Assets are recorded in other long term assets.

[7] Amounts are net of unamortized discounts, premiums and/or debt issuance cost as applicable.

[8] In February 2016, Praxair issued €550 million of 1.20% Euro-denominated notes due 2024. In addition, Praxair issued $275 million of 3.20% notes due 2026. The proceeds of these debt issuances were used for general corporate purposes.

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Fair Value Disclosures (Details) - USD ($) $ in Millions	Dec. 31, 2016	Dec. 31, 2015
Assets and Liabilities Measured on a Recurring Basis
Derivative assets	$ 18	$ 22
Derivative liabilities	18	11
Fair Value Additional Information [Abstract]
Carrying value of long-term debt including current portion	9,081	8,981
Level 2 Member
Fair Value Additional Information [Abstract]
Fair value of long-term debt	9,218	$ 9,069
Level 2 Member | Fair Value, Measurements, Recurring [Member]
Assets and Liabilities Measured on a Recurring Basis
Derivative assets	18
Derivative liabilities	$ 18

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Equity and Redeemable Noncontrolling Interests (Details) - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	Dec. 31, 2016		Dec. 31, 2015		Dec. 31, 2014
Class of Stock [Line Items]
Common Stock Shares Authorized	800,000,000		800,000,000
Common Stock Shares Issued	383,230,625		383,230,625
Common Stock Shares Outstanding	284,900,776		284,879,079
Preferred Stock Authorized	25,000,000		25,000,000
Preferred Stock Par Value	$ 0.01		$ 0.01
Common stock, par value (usd per share)	$ 0.01		$ 0.01
Redeemable Noncontrolling Interest [Line Items]
Purchase of redeemable noncontrolling interest - percent acquired	34.00%
Redeemable Noncontrolling Interests, Beginning Balance	$ 113		$ 176		$ 307
Net Income (Loss) Attributable to Redeemable Noncontrolling Interest	3		10		12
Dividends Paid to Redeemable Noncontrolling Interests	(2)		(7)		(9)
Redemption value adjustment/accretion	(6)		(40)	[1]	2
Foreign currency translation and other	7		(17)		(24)
Payments for Repurchase of Redeemable Noncontrolling Interest	(104)	[2]	(9)		(112)	[2]
Redeemable Noncontrolling Interests, Ending Balance	11		113		176
Additions (reductions) to noncontrolling interests	70		29		8
Noncontrolling Interest [Member]
Redeemable Noncontrolling Interest [Line Items]
Additions (reductions) to noncontrolling interests	20		$ 29		$ 8
Additional Paid-in Capital [Member]
Redeemable Noncontrolling Interest [Line Items]
Additions (reductions) to noncontrolling interests	$ 50

[1] In December 2015, Praxair sold its controlling interest in Praxair Distribution Southeast, LLC and, accordingly, removed the related redeemable noncontrolling interests.

[2] In June 2016, Praxair acquired the remaining 34% stake in a Scandinavian joint venture for $104 million. In January 2014, Praxair acquired the remaining noncontrolling interests in a joint venture in the United States. The cash payments related to these acquisitions are shown in the financing section of the consolidated statements of cash flows under the caption "Noncontrolling interest transactions and other" as there was no change in control.

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Share-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Praxair, Inc. Closing Stock Price	$ 117.19
Additional Company Information [Abstract]
Share-based compensation expense	$ 39	$ 30	$ 51
Share-based compensation expense related income tax benefit	32	8	14
Excess Tax Benefits	$ 20	$ 13	$ 19
Equity Plan 2009 Praxair, Inc. Long-term Incentive Plan For Employees Member
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares authorized for grant	8,000,000
Authorized for issuance as RS, RSU or PSU	2,600,000
Shares remaining available for equity grants	3,993,818
Equity Plan 2005 Equity Compensation Plan For Non-employee Directors Of Praxair, Inc. Member
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares authorized for grant	500,000
Stock Options [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unrecognized compensation expense	$ 17
Performance Period (years)	1 year
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Outstanding at beginning of period - average exercise price	$ 96.58
Granted - average exercise price	102.23
Exercised - average exercise price	70.17
Cancelled or Expired - average exercise price	111.25
Outstanding at end of period - average exercise price	101.58	$ 96.58
Exercisable at December 31, 2016 - average exercise price	$ 96.90
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Stock Options Outstanding at Beginning of Period	11,273,000
Stock Options Granted	2,473,000
Stock Options Exercised	(1,821,000)
Stock Options Cancelled or Expired	(217,000)
Stock Options Outstanding at End of Period	11,708,000	11,273,000
Stock Options Exercisable at December 31, 2016	8,018,000
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Dividend yield	2.90%	2.20%	2.00%
Volatility	14.40%	13.50%	15.20%
Risk-free interest rate	1.41%	1.51%	1.57%
Expected term years	6 years	5 years	5 years
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures [Abstract]
Weighted-average fair values of options granted	$ 8.91	$ 11.99	$ 14.62
Total intrinsic value of stock options exercised	$ 82	$ 65	$ 93
Cash received from option exercises	128	72	88
Total cash tax benefit	$ 32	$ 33	$ 48
Average Remaining Life (years) [Abstract]
Outstanding at December 31, 2016 - average remaining life	5 years 7 months
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term	4 years 2 months
Aggregate Intrinsic Value [Abstract]
Outstanding at December 31, 2016 - intrinsic value	$ 212
Exercisable at December 31, 2016 - intrinsic value	$ 177

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Share-Based Compensation (PSU and RSU) (Details) - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Additional Company Information [Abstract]
Performance based awards vesting, as a percentage of the target, low end of range	0.00%
Performance based awards vesting, as a percentage of the target, high end of range	200.00%
PX Performance Based Awards Member
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Awards to be settled in cash	11,000
Unrecognized compensation expense	$ 19
Performance Period (years)	3 years
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Non-vested at beginning of period	802,000
Granted	240,505
Vested	(109,000)
Cancelled	(220,000)
Non-vested at end of period	714,000	802,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
Non-vested at beginning of period, grant date fair value	$ 114.41
Granted - average grant date fair value	105.34
Vested - average grant date fair value	103.79
Cancelled - average grant date fair value	105.63
Non-vested at end of period, grant date fair value	$ 115.72	$ 114.41
Additional Company Information [Abstract]
Remaining Service Period	2 years 3 months
Restricted Stock [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Awards to be settled in cash	11,000
Unrecognized compensation expense	$ 11
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Non-vested at beginning of period	286,000
Granted	97,924
Vested	(93,000)
Cancelled	(17,000)
Non-vested at end of period	274,000	286,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
Non-vested at beginning of period, grant date fair value	$ 112.48
Granted - average grant date fair value	98.18	$ 120.24	$ 122.55
Vested - average grant date fair value	105.92
Cancelled - average grant date fair value	113.91
Non-vested at end of period, grant date fair value	$ 109.49	112.48
Additional Company Information [Abstract]
Remaining Service Period	2 years 3 months
Restricted Stock [Member] | Minimum
Additional Company Information [Abstract]
Remaining Service Period	2 years
Restricted Stock [Member] | Maximum
Additional Company Information [Abstract]
Remaining Service Period	10 years
Performance Shares TSR [Member] [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
Granted - average grant date fair value	$ 124.18
Performance Shares ROC [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
Granted - average grant date fair value	$ 93.46	$ 120.04	$ 121.16

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Retirement Programs (Additional Information) (Details) $ in Millions	12 Months Ended
	Dec. 31, 2016 USD ($) shares	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)
Multiemployer Plans [Abstract]
Number of Multiemployer Plans Participated In	7
Multiemployer Plan Contributions	$ 2	$ 2	$ 2
Multiemployer Plans, General Nature	According to the most current data available, four of the MEPs that the Company participates in are in a Red zone status; one is in a Yellow zone status; and two are in a Green zone status. As of December 31, 2016, the five Red and Yellow Zone plans have pending or have implemented financial improvement or rehabilitation plans.
Number of Multiemployer Plans With Pending or Implemented Rehabilitation Plans	5
Estimated number of union employees in multiemployer plans	200
Praxair U.S. Defined Contribution Savings Plans
Retirement Programs - Defined Contribution Plans [Line Items]
Defined Contribution Plan Contributions	$ 28	28	26
Maximum amount employees may contribute to the respective plan subject to IRS limitations	40.00%
Shares of Common Stock in ESOPs | shares	2,703,391
Praxair International Defined Contribution Savings Plans
Retirement Programs - Defined Contribution Plans [Line Items]
Defined Contribution Plan Contributions	$ 18	$ 17	$ 17

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Retirement Programs (Net Pension and OPEB costs) (Details) - USD ($) $ in Millions		3 Months Ended												12 Months Ended
		Dec. 31, 2016	Sep. 30, 2016		Jun. 30, 2016	Mar. 31, 2016	[1]	Dec. 31, 2015	Sep. 30, 2015		Jun. 30, 2015	[1]	Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Defined Benefit Plan Disclosure [Line Items]
Operating Income (Loss)		$ 599	$ 497	[1]	$ 588	$ 554		$ 624	$ 594	[1]	$ 480		$ 623	$ 2,238	$ 2,321	$ 2,608
U.S. Pension Plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost														31	36
Interest cost														70	80
Pension settlements	[2]													4	7	7
Pension Plans Defined Benefit Member
Defined Benefit Plan Disclosure [Line Items]
Service cost														45	54	49
Interest cost														100	112	121
Expected return on plan assets														(157)	(154)	(155)
Net amortization and deferral														59	79	60
Net periodic benefit cost before pension settlement charge														47	91	75
Pension settlements	[2]													4	7	7
Net periodic benefit cost														51	98	82
Other Postretirement Benefit Plans Defined Benefit
Defined Benefit Plan Disclosure [Line Items]
Service cost														2	3	4
Interest cost														6	7	11
Net amortization and deferral														(3)	(2)	(8)
Net periodic benefit cost before pension settlement charge														5	8	7
Net periodic benefit cost														5	$ 8	$ 7
Pension Settlement Charge [Member]
Defined Benefit Plan Disclosure [Line Items]
Operating Income (Loss)			$ (4)						$ (7)					$ (4)

[1] 2016 and 2015 include the impact of the following charges (see Notes 2, 11 & 16):(Millions of dollars)OperatingProfit/(Loss) NetIncome/(Loss) Diluted Earnings Per ShareBond Redemption -Q1$— $(10) $(0.04)Cost reduction program and other charges - Q3(96) (63) (0.22)Pension settlement charge - Q3(4) (3) (0.01)Year 2016$(100) $(76) $(0.27) Cost reduction program and other charges - Q2$(146) $(112) $(0.39)Cost reduction program and other charges - Q3(19) (13) (0.04)Pension settlement charge - Q3(7) (5) (0.02)Year 2015$(172) $(130) $(0.45)

[2] 2016 includes a $4 million pension settlement charge related to lump sum benefits paid to retired senior managers in the third quarter. The third quarter of 2015 and the fourth quarter of 2014 both include charges of $7 million, related primarily to the retirement of senior managers in the United States (see Note 2)

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Retirement Programs (Funded Status) (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]
Other Long-Term Assets	$ 13	$ 41
Other Current Liabilities	(24)	(29)
Other Long-Term Liabilities	(863)	(760)
Deferred Tax Benefit	(352)	(325)
U.S. Pension Plans [Member]
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]
Benefit Obligation January 1	1,992	2,050
Service cost	31	36
Interest cost	70	80
Actuarial Loss (Gain)	104	(68)
Benefits Paid	(131)	(106)
Benefit Obligation December 31	2,066	1,992	$ 2,050
Accumulated Benefit Obligation	1,970	1,900
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]
Defined Benefit Plan Fair Value of Plan Assets Balance, Beginning of Year	1,509	1,607
Gains or (losses) for the period	117	(11)
Benefits Paid From Plan Assets	(119)	(87)
Defined Benefit Plan Fair Value of Plan Assets Balance, End of Year	1,507	1,509	1,607
Other Current Liabilities	(7)	(12)
Other Long-Term Liabilities	(552)	(471)
Fund status - net amount recognized, December 31	(559)	(483)
Net Actuarial Loss (Gain)	832	782
Deferred Tax Benefit	(318)	(299)
Amount recognized in accumulated other comprehensive income (loss)	514	483
International Pension Plans Defined Benefit
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]
Benefit Obligation January 1	580	719
Service cost	14	18
Interest cost	30	32
Plan amendment	(2)	2
Actuarial Loss (Gain)	76	(41)
Benefits Paid	(33)	(32)
Foreign Currency Translation	1	(118)
Benefit Obligation December 31	666	580	719
Accumulated Benefit Obligation	639	551
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]
Defined Benefit Plan Fair Value of Plan Assets Balance, Beginning of Year	475	561
Gains or (losses) for the period	47	18
Company Contributions	11	15
Benefits Paid From Plan Assets	(26)	(28)
Foreign Currency Translation		(91)
Defined Benefit Plan Fair Value of Plan Assets Balance, End of Year	507	475	561
Other Long-Term Assets	13	41
Other Current Liabilities	(5)	(4)
Other Long-Term Liabilities	(167)	(142)
Fund status - net amount recognized, December 31	(159)	(105)
Net Actuarial Loss (Gain)	189	135
Prior Service Cost (Credit)	12	11
Deferred Tax Benefit	(46)	(37)
Amount recognized in accumulated other comprehensive income (loss)	155	109
Other Postretirement Benefit Plans Defined Benefit
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]
Benefit Obligation January 1	160	180
Service cost	2	3	4
Interest cost	6	7	11
Participant Contribution	10	10
Plan amendment	(7)
Actuarial Loss (Gain)	4	(9)
Benefits Paid	(20)	(24)
Foreign Currency Translation	1	(7)
Benefit Obligation December 31	156	160	$ 180
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]
Other Current Liabilities	(12)	(13)
Other Long-Term Liabilities	(144)	(147)
Fund status - net amount recognized, December 31	(156)	(160)
Net Actuarial Loss (Gain)	(20)	(25)
Prior Service Cost (Credit)	(8)	(1)
Deferred Tax Benefit	12	11
Amount recognized in accumulated other comprehensive income (loss)	$ (16)	$ (15)

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Retirement Programs (Changes In Plan Assets and Benefit Obligations Recognized in OCI) (Details) - USD ($) $ in Millions		12 Months Ended
		Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Pension Plans Defined Benefit Member
Defined Benefit Plan Disclosure [Line Items]
Current Year Net Actuarial Loss (Gain)	[1]	$ 172	$ 38
Amortization of Net Actuarial Gains (Losses)		(60)	(78)
Plan Amendment		(2)
Amortization of Prior Service Credits (Costs)		1	(1)
Defined Benefit Plan, Recognized Net Gain (Loss) Due to Settlements	[2]	4	7	$ 7
Foreign Currency Translation and Other		(2)	(24)
Total Recognized in Other Comprehensive Income		105	(72)
Other Postretirement Benefit Plans Defined Benefit
Defined Benefit Plan Disclosure [Line Items]
Current Year Net Actuarial Loss (Gain)	[1]	4	(9)
Amortization of Net Actuarial Gains (Losses)		3	2
Plan Amendment		(7)
Foreign Currency Translation and Other		(2)	6
Total Recognized in Other Comprehensive Income		$ (2)	$ (1)

[1] Pension net actuarial losses in 2016 are primarily driven by liability experience as well as lower U.S. discount rates. Pension net actuarial losses in 2015 relate primarily to lower actual returns on plan assets when compared with 2014 offset by higher U.S. discount rates. OPEB net actuarial losses in 2016 are largely due to unfavorable plan experience whereas gains in 2015 relate primarily to higher discount rates and favorable plan experience

[2] 2016 includes a $4 million pension settlement charge related to lump sum benefits paid to retired senior managers in the third quarter. The third quarter of 2015 and the fourth quarter of 2014 both include charges of $7 million, related primarily to the retirement of senior managers in the United States (see Note 2)

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Retirement Programs (AOCI Expected to be Recognized as Components of Net Periodic Benefit Costs in 2017) (Details) $ in Millions	12 Months Ended
	Dec. 31, 2016 USD ($)
Pension Plans Defined Benefit Member
Defined Benefit Plan Disclosure [Line Items]
Net Actuarial Loss (Gain)	$ 65
Prior Service Cost (Credit)	2
Total AOCI Expected to be Recognized as Components of Net Periodic Benefit Cost During Upcoming Year	67
Other Postretirement Benefit Plans Defined Benefit
Defined Benefit Plan Disclosure [Line Items]
Net Actuarial Loss (Gain)	2
Prior Service Cost (Credit)	1
Total AOCI Expected to be Recognized as Components of Net Periodic Benefit Cost During Upcoming Year	$ 3

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Retirement Programs (Plans Where the ABO Exceeds Plan Assets Fair Value) (Details) - USD ($) $ in Millions	Dec. 31, 2016	Dec. 31, 2015
U.S. Pension Plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Projected Benefit Obligation	$ 2,066	$ 1,992
Accumulated Benefit Obligation	1,970	1,900
Fair Value of Plan Assets	1,507	1,509
International Pension Plans Defined Benefit
Defined Benefit Plan Disclosure [Line Items]
Projected Benefit Obligation	372	336
Accumulated Benefit Obligation	365	324
Fair Value of Plan Assets	$ 199	$ 188

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Retirement Programs (Assumptions Used in Determining Benefit Obligations and Net Benefit Costs) (Details) - USD ($) $ in Millions		3 Months Ended												12 Months Ended
		Dec. 31, 2016	Sep. 30, 2016	[1]	Jun. 30, 2016	Mar. 31, 2016	[1]	Dec. 31, 2015	Sep. 30, 2015	[1]	Jun. 30, 2015	[1]	Mar. 31, 2015	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Defined Benefit Plan, Effect of One-Percentage Point Change in Assumed Health Care Cost Trend Rates [Abstract]
One Percent Decrease in Healthcare Cost Trend Rates															$ (3)
One Percent Increase in Healthcare Cost Trend Rates															4
Defined Benefit Plan Disclosure [Line Items]
Operating Income (Loss)		$ 599	$ 497		$ 588	$ 554		$ 624	$ 594		$ 480		$ 623		$ 2,238	$ 2,321	$ 2,608
Defined Benefit Plan, Assumed Health Care Cost Trend Rates [Abstract]
Year in Which the Rate Reaches the Ultimate Trend Rate		2020						2020							2020	2020
Healthcare Cost Trend Assumed															7.00%	7.00%
Defined Benefit Plan, Ultimate Health Care Cost Trend Rate															5.00%	5.00%
U.S. Pension Plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Discount Rate - Utilized for Obligation		4.05%						4.32%							4.05%	4.32%
Rate of Increase in Compensation Levels - Utilized for Obligation		3.25%						3.25%							3.25%	3.25%
Discount Rate - Utilized for Expense	[2]														4.32%	3.95%
Rate of Increase in Compensation Levels - Utilized for Expense															3.25%	3.25%
Expected Long-Term Rate of Return on Plan Assets - Utilized for Expense	[3]														8.00%	8.00%
International Pension Plans Defined Benefit
Defined Benefit Plan Disclosure [Line Items]
Discount Rate - Utilized for Obligation		5.09%						5.32%							5.09%	5.32%
Rate of Increase in Compensation Levels - Utilized for Obligation		3.73%						3.57%							3.73%	3.57%
Discount Rate - Utilized for Expense	[2]														5.32%	5.36%
Rate of Increase in Compensation Levels - Utilized for Expense															3.57%	3.72%
Expected Long-Term Rate of Return on Plan Assets - Utilized for Expense	[3]														7.92%	7.71%
Other Postretirement Benefit Plans Defined Benefit
Defined Benefit Plan Disclosure [Line Items]
Discount Rate - Utilized for Obligation		4.21%						4.24%							4.21%	4.24%
Discount Rate - Utilized for Expense	[2]														4.24%	4.48%
Equity Securities [Member] | U.S. Pension Plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Expected Rate of Return on Plan Assets															9.50%
Equity Securities [Member] | International Pension Plans Defined Benefit
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Expected Rate of Return on Plan Assets															10.00%
Fixed Income Investments [Member] | U.S. Pension Plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Expected Rate of Return on Plan Assets															5.50%
Fixed Income Investments [Member] | International Pension Plans Defined Benefit
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Expected Rate of Return on Plan Assets															7.50%
Other Investment [Member] | U.S. Pension Plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Expected Rate of Return on Plan Assets															7.00%
Other Investment [Member] | International Pension Plans Defined Benefit
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Expected Rate of Return on Plan Assets															7.50%
Scenario, Forecast [Member] | U.S. Pension Plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Expected Long-Term Rate of Return on Plan Assets - Utilized for Expense														8.00%
Return Experienced Over Last 10 years [Member] | U.S. Pension Plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Actual Rate of Return on Plan Assets															4.90%
Return Experienced Over Last 10 years [Member] | International Pension Plans Defined Benefit
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Actual Rate of Return on Plan Assets															6.90%
Return Experienced Over Last 20 years [Member] | U.S. Pension Plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Actual Rate of Return on Plan Assets															6.70%
Return Experienced Over Last 20 years [Member] | International Pension Plans Defined Benefit
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Actual Rate of Return on Plan Assets															8.60%

[1] 2016 and 2015 include the impact of the following charges (see Notes 2, 11 & 16):(Millions of dollars)OperatingProfit/(Loss) NetIncome/(Loss) Diluted Earnings Per ShareBond Redemption -Q1$— $(10) $(0.04)Cost reduction program and other charges - Q3(96) (63) (0.22)Pension settlement charge - Q3(4) (3) (0.01)Year 2016$(100) $(76) $(0.27) Cost reduction program and other charges - Q2$(146) $(112) $(0.39)Cost reduction program and other charges - Q3(19) (13) (0.04)Pension settlement charge - Q3(7) (5) (0.02)Year 2015$(172) $(130) $(0.45)

[2] At the end of 2015, the Company changed the approach used to measure service and interest costs for significant pension and OPEB plans. Through 2015, Praxair measured service and interest costs utilizing a single weighted-average discount rate for each plan derived from the yield curve used to measure the respective plan obligations. Effective in 2016, the Company elected to measure service and interest costs for significant plans by applying the specific spot rates along that yield curve to the plan's expected cash flows ("spot rate approach"). The Company believes the new spot rate approach provides a more precise measurement of service and interest costs by aligning the timing of the plans' expected cash flows to the corresponding spot rates on the yield curve. This change does not affect the measurement of plan obligations nor the funded status of the plans. The Company has accounted for this change as a change in accounting estimate and, accordingly has accounted for it on a prospective basis.

[3] The expected long term rate of return on the U.S. and international plan assets is estimated based on the plans' investment strategy and asset allocation, historical capital market performance and, to a lesser extent, historical plan performance. For the U.S. plans, the expected rate of return of 8.00% was derived based on the target asset allocation of 50%-70% equity securities (approximately 9.5% expected return), 20%-40% fixed income securities (approximately 5.5% expected return) and 2% - 10% real estate funds (approximately 7% expected return). For the international plans, the expected rate of return was derived based on the weighted average target asset allocation of 30%-50% equity securities (approximately 10% expected return), 40%-60% fixed income securities (approximately 7.5% expected return), and 0%-10% alternative investments (approximately 7.5% expected return). For the U.S. plan assets, the actual annualized total returns for the most recent 10-year and 20-year periods ended December 31, 2016 were approximately 4.9% and 6.7%, respectively. For the international plan assets, the actual annualized total returns for the same two periods were approximately 6.9% and 8.6%, respectively. Changes to plan asset allocations and investment strategy over this time period limit the value of historical plan performance as factor in estimating the expected long term rate of return. For 2017, the expected long-term rate of return on plan assets will be 8.00% for the U.S. plans. Expected weighted average returns for international plans will vary.

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Retirement Programs (Pension Plan Asset Allocations) (Details)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
U.S. Pension Plans [Member] | Equity Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Target Asset Allocation Range - Minimum	50.00%
Target Asset Allocation Range - Maximum	70.00%
Weighted Average Asset Allocation	59.00%	62.00%
U.S. Pension Plans [Member] | Fixed Income Investments [Member]
Defined Benefit Plan Disclosure [Line Items]
Target Asset Allocation Range - Minimum	20.00%
Target Asset Allocation Range - Maximum	40.00%
Weighted Average Asset Allocation	32.00%	30.00%
U.S. Pension Plans [Member] | Other Investment [Member]
Defined Benefit Plan Disclosure [Line Items]
Target Asset Allocation Range - Minimum	2.00%
Target Asset Allocation Range - Maximum	10.00%
Weighted Average Asset Allocation	9.00%	8.00%
International Pension Plans Defined Benefit | Equity Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Target Asset Allocation Range - Minimum	30.00%
Target Asset Allocation Range - Maximum	50.00%
Weighted Average Asset Allocation	35.00%	50.00%
International Pension Plans Defined Benefit | Fixed Income Investments [Member]
Defined Benefit Plan Disclosure [Line Items]
Target Asset Allocation Range - Minimum	40.00%
Target Asset Allocation Range - Maximum	60.00%
Weighted Average Asset Allocation	56.00%	41.00%
International Pension Plans Defined Benefit | Other Investment [Member]
Defined Benefit Plan Disclosure [Line Items]
Target Asset Allocation Range - Minimum	0.00%
Target Asset Allocation Range - Maximum	10.00%
Weighted Average Asset Allocation	9.00%	9.00%

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Retirement Programs (Pension Plan Asset Fair Value By Category And Level 3 Rollforward) (Details) - USD ($) $ in Millions		12 Months Ended
		Dec. 31, 2016		Dec. 31, 2015		Dec. 31, 2014
Cash And Cash Equivalents
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Plan Assets		$ 3		$ 1
U S Equity Securities
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Plan Assets		344		302
International Equity Securities
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Plan Assets		37		62
Equity Mutual Funds
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Plan Assets		2		236
U.S. Government Bonds
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Plan Assets		51		50
International Government Bonds
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Plan Assets		159		89
Fixed Income Mutual Funds
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Plan Assets		104		91
Corporate Bonds
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Plan Assets		194		163
Insurance Contract
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Plan Assets		45		43
Real Estate Funds [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Plan Assets		135		123
Total pension assets for all levels [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Plan Assets		1,074		1,160
Pooled Funds [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Plan Assets	[1]	940		824
Total Fair Value of Plan Assets [Domain]
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Plan Assets		2,014		1,984
Level 1 Member | Cash And Cash Equivalents
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Plan Assets		3		1
Level 1 Member | U S Equity Securities
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Plan Assets		344		302
Level 1 Member | International Equity Securities
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Plan Assets		37		62
Level 1 Member | Equity Mutual Funds
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Plan Assets		2		236
Level 1 Member | Fixed Income Mutual Funds
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Plan Assets		104		91
Level 1 Member | Total pension assets, by level
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Plan Assets		490		692
Level 2 Member | U.S. Government Bonds
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Plan Assets		51		50
Level 2 Member | International Government Bonds
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Plan Assets		159		89
Level 2 Member | Corporate Bonds
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Plan Assets		194		163
Level 2 Member | Total pension assets, by level
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Plan Assets		404		302
Level 3 Member | Insurance Contract
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Plan Assets		45	[2]	43	[2]	$ 53
Acquisition
Gains or (losses) for the period		3		(4)
Foreign Currency Translation		(1)		(6)
Level 3 Member | Real Estate Funds [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Plan Assets		135	[2]	123	[2]	110
Gains or (losses) for the period		12		13
Level 3 Member | Total pension assets, by level
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Plan Assets		180	[2]	166	[2]	163
Gains or (losses) for the period		15		9
Foreign Currency Translation		(1)		(6)
Other Postretirement Benefit Plans Defined Benefit
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Benefits Paid		20		24
U.S. Pension Plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Plan Assets		1,507		1,509		1,607
Gains or (losses) for the period		117		(11)
Defined Benefit Plan, Benefits Paid		131		106
Foreign Pension Plans, Defined Benefit [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Plan Assets		507		475		$ 561
Gains or (losses) for the period		47		18
Foreign Currency Translation				(91)
Defined Benefit Plan, Benefits Paid		$ 33		$ 32

[1] Pooled funds are measured using the net asset value ("NAV") as a practical expedient for fair value as permissible under the accounting standard for fair value measurements and have not been categorized in the fair value hierarchy in accordance with recently issued accounting standards updates related to Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share. Pooled fund NAVs are provided by the trustee and are determined by reference to the fair value of the underlying securities of the trust, less its liabilities, which are valued primarily through the use of directly or indirectly observable inputs. Depending on the pooled fund, underlying securities may include marketable equity securities or fixed income securities.

[2] The following table summarizes changes in fair value of the pension plan assets classified as level 3 for the periods ended December 31, 2016 and 2015: (Millions of dollars)InsuranceContracts Real Estate Funds TotalBalance, December 31, 2014$53 $110 $163Gain/(Loss) for the period(4) 13 9Acquisitions— — —Foreign currency translation(6) — (6)Balance, December 31, 201543 123 166Gain/(Loss) for the period3 12 15Acquisitions— — —Foreign currency translation(1) — (1)Balance, December 31, 2016$45 $135 $180

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Retirement Programs (Contributions and Future Estimated Payments) (Details) - USD ($) $ in Millions	3 Months Ended												12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016	[1]	Jun. 30, 2016	Mar. 31, 2016	[1]	Dec. 31, 2015	Sep. 30, 2015	[1]	Jun. 30, 2015	[1]	Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Defined Benefit Plan Disclosure [Line Items]
Operating Income (Loss)	$ 599	$ 497		$ 588	$ 554		$ 624	$ 594		$ 480		$ 623	$ 2,238	$ 2,321	$ 2,608
Pension and Other Postretirement Benefit Contributions [Abstract]
Pension Contributions													11	$ 15	$ 18
U.S. Pension Plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Estimated Future Benefit Payments in 2017	105												105
Defined Benefit Plan, Estimated Future Benefit Payments in 2018	115												115
Defined Benefit Plan, Estimated Future Benefit Payments in 2019	122												122
Defined Benefit Plan, Estimated Future Benefit Payments in 2020	123												123
Defined Benefit Plan, Estimated Future Benefit Payments in 2021	126												126
Defined Benefit Plan, Estimated Future Benefit Payments in 2022-2026	661												661
International Pension Plans Defined Benefit
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Estimated Future Benefit Payments in 2017	32												32
Defined Benefit Plan, Estimated Future Benefit Payments in 2018	32												32
Defined Benefit Plan, Estimated Future Benefit Payments in 2019	35												35
Defined Benefit Plan, Estimated Future Benefit Payments in 2020	37												37
Defined Benefit Plan, Estimated Future Benefit Payments in 2021	38												38
Defined Benefit Plan, Estimated Future Benefit Payments in 2022-2026	210												210
Other Postretirement Benefit Plans Defined Benefit
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Estimated Future Benefit Payments in 2017	13												13
Defined Benefit Plan, Estimated Future Benefit Payments in 2018	12												12
Defined Benefit Plan, Estimated Future Benefit Payments in 2019	12												12
Defined Benefit Plan, Estimated Future Benefit Payments in 2020	11												11
Defined Benefit Plan, Estimated Future Benefit Payments in 2021	11												11
Defined Benefit Plan, Estimated Future Benefit Payments in 2022-2026	$ 47												47
Minimum
Defined Benefit Plan Disclosure [Line Items]
Estimated Pension plan contributions during next fiscal year													10
Maximum
Defined Benefit Plan Disclosure [Line Items]
Estimated Pension plan contributions during next fiscal year													$ 15

[1] 2016 and 2015 include the impact of the following charges (see Notes 2, 11 & 16):(Millions of dollars)OperatingProfit/(Loss) NetIncome/(Loss) Diluted Earnings Per ShareBond Redemption -Q1$— $(10) $(0.04)Cost reduction program and other charges - Q3(96) (63) (0.22)Pension settlement charge - Q3(4) (3) (0.01)Year 2016$(100) $(76) $(0.27) Cost reduction program and other charges - Q2$(146) $(112) $(0.39)Cost reduction program and other charges - Q3(19) (13) (0.04)Pension settlement charge - Q3(7) (5) (0.02)Year 2015$(172) $(130) $(0.45)

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Commitments and Contingencies (Lawsuits and Government Investigations) (Details) - 12 months ended Dec. 31, 2016 $ in Millions, BRL in Billions	USD ($)	BRL
Gain And Loss Contingencies [Line Items]
Brazil tax matters estimated exposure	$ 225
Initial CADE civil fine imposed	675	BRL 2.2
Revised CADE civil fine	$ 522	BRL 1.7
Percentage Of Guarantees To Brazilian Court Satisfied By Letters Of Credit	50.00%
Percentage Of Guarantees To Brazilian Court Satisfied By Equity	50.00%
Outstanding letters of credit, bank guarantees and surety bonds	$ 415
Material Commitments and Contractual Obligations [Line Items]
Pledge against portion of debt held by an unconsolidated equity investee	22
Total Debt Of Unconsolidated Equity Investees	305
Unconditional Purchase Obligations
Material Commitments and Contractual Obligations [Line Items]
2017	585
2018	534
2019	476
2020	422
2021	434
Thereafter	2,645
Total	5,096
Unconditional Purchase Obligation Payments	887
Unconditional Purchase Obligation Payments, Electricty	444
Unconditional Purchase Obligations Payments, Natural Gas	150
Unrecognized Unconditional Future Purchase Obligation Electricity	2,770
Unrecognized Unconditional Purchase Obligation, Silane	86
Construction Commitments
Material Commitments and Contractual Obligations [Line Items]
2017	836
2018	271
2019	125
Total	$ 1,232

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Segments (Details) - USD ($) $ in Millions		3 Months Ended												12 Months Ended
		Dec. 31, 2016	Sep. 30, 2016		Jun. 30, 2016	Mar. 31, 2016		Dec. 31, 2015	Sep. 30, 2015		Jun. 30, 2015		Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Segment Reporting Information [Line Items]
Operating Profit (Loss)		$ 599	$ 497	[1]	$ 588	$ 554	[1]	$ 624	$ 594	[1]	$ 480	[1]	$ 623	$ 2,238	$ 2,321	$ 2,608
Cost reduction program and other charges (Note 2)														(100)	(172)	(138)
Sales		2,644	2,716		2,665	2,509		2,595	2,686		2,738		2,757	10,534	10,776	12,273
Segment Assets		19,332						18,319						19,332	18,319
Segment Depreciation and Amortization		285	$ 284		$ 281	$ 272		275	$ 276		$ 278		$ 277	1,122	1,106	1,170
Segment Capital Expenditures and Acquisitions														1,828	1,623	1,895
Equity investments		717						665						717	665
Atmospheric gases and related [Member]
Segment Reporting Information [Line Items]
Sales														7,329	7,595	8,623
Process gases and other [Member]
Segment Reporting Information [Line Items]
Sales														2,609	2,572	2,971
Surface Technologies Segment [Member]
Segment Reporting Information [Line Items]
Sales														596	609	679
North America Segment [Member]
Segment Reporting Information [Line Items]
Operating Profit (Loss)														1,430	1,558	1,580
Sales	[2]													5,592	5,865	6,436
Segment Assets	[3]	10,019						9,748						10,019	9,748	10,187
Segment Depreciation and Amortization														614	609	611
Segment Capital Expenditures and Acquisitions														989	869	837
Equity investments		121						127						121	127	132
South America Segment Member
Segment Reporting Information [Line Items]
Operating Profit (Loss)														257	291	449
Sales	[2]													1,399	1,431	1,993
Segment Assets	[3]	2,748						2,124						2,748	2,124	2,718
Segment Depreciation and Amortization														133	135	177
Segment Capital Expenditures and Acquisitions														232	285	373
Europe Segment Member
Segment Reporting Information [Line Items]
Operating Profit (Loss)														273	250	291
Sales	[2]													1,392	1,320	1,546
Segment Assets	[3]	2,928						2,704						2,928	2,704	2,996
Segment Depreciation and Amortization														155	145	168
Segment Capital Expenditures and Acquisitions														402	227	319
Equity investments		243						195						243	195	207
Asia Segment Member
Segment Reporting Information [Line Items]
Operating Profit (Loss)														276	289	303
Sales	[2]													1,555	1,551	1,619
Segment Assets	[3]	2,984						3,113						2,984	3,113	3,194
Segment Depreciation and Amortization														179	176	170
Segment Capital Expenditures and Acquisitions														165	208	310
Equity investments		353						343						353	343	354
Surface Technologies Segment [Member]
Segment Reporting Information [Line Items]
Operating Profit (Loss)														102	105	123
Sales	[2]													596	609	679
Segment Assets	[3]	653						630						653	630	674
Segment Depreciation and Amortization														41	41	44
Segment Capital Expenditures and Acquisitions														40	34	56
Total Segments
Segment Reporting Information [Line Items]
Operating Profit (Loss)														2,338	2,493	2,746
Cost reduction program and other charges (Note 2)														(100)	(172)	(138)
Sales	[2]													10,534	10,776	12,273
Segment Assets	[3]	19,332						18,319						19,332	18,319	19,769
Equity investments		$ 717						$ 665						717	665	$ 693
Total Impact Of Items [Member]
Segment Reporting Information [Line Items]
Operating Profit (Loss)														$ (100)	$ (172)

[1] 2016 and 2015 include the impact of the following charges (see Notes 2, 11 & 16):(Millions of dollars)OperatingProfit/(Loss) NetIncome/(Loss) Diluted Earnings Per ShareBond Redemption -Q1$— $(10) $(0.04)Cost reduction program and other charges - Q3(96) (63) (0.22)Pension settlement charge - Q3(4) (3) (0.01)Year 2016$(100) $(76) $(0.27) Cost reduction program and other charges - Q2$(146) $(112) $(0.39)Cost reduction program and other charges - Q3(19) (13) (0.04)Pension settlement charge - Q3(7) (5) (0.02)Year 2015$(172) $(130) $(0.45)

[2] Sales reflect external sales only. Intersegment sales, primarily from North America to other segments, were not material.

[3] Includes equity investments as of December 31, as follows:(Millions of dollars)2016 2015 2014North America$121 $127 $132Europe 243 195 207Asia 353 343 354 $717 $665 $693Changes primarily relate to equity investment earnings, dividends and currency impacts.

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Segments (Sales and Assets by Major Country) (Details) - USD ($) $ in Millions		3 Months Ended								12 Months Ended
		Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Sales by Major Country [Line Items]
Sales		$ 2,644	$ 2,716	$ 2,665	$ 2,509	$ 2,595	$ 2,686	$ 2,738	$ 2,757	$ 10,534	$ 10,776	$ 12,273
Long-Lived Assets by Major Country		11,477				10,998				11,477	10,998
United States Member
Sales by Major Country [Line Items]
Sales										4,623	4,771	5,171
Long-Lived Assets by Major Country	[1]	4,922				4,825				4,922	4,825	4,817
Brazil Member
Sales by Major Country [Line Items]
Sales										1,091	1,107	1,511
Long-Lived Assets by Major Country	[1]	1,262				986				1,262	986	1,344
Other International Member
Sales by Major Country [Line Items]
Sales										4,820	4,898	5,591
Long-Lived Assets by Major Country	[1]	5,293				5,187				5,293	5,187	5,836
Long-lived Assets, Total [Member]
Sales by Major Country [Line Items]
Long-Lived Assets by Major Country	[1]	$ 11,477				$ 10,998				$ 11,477	$ 10,998	$ 11,997

[1] Long-lived assets include property, plant and equipment – net.

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Quarterly Data (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	3 Months Ended												12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016		Jun. 30, 2016	Mar. 31, 2016		Dec. 31, 2015	Sep. 30, 2015		Jun. 30, 2015		Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Selected Quarterly Financial Information [Line Items]
Diluted Earnings Per Common Share	$ 1.41	$ 1.18	[1]	$ 1.39	$ 1.24	[1]	$ 1.47	$ 1.40	[1]	$ 1.06	[1]	$ 1.43	$ 5.21	$ 5.35	$ 5.73
Net Income (Loss) – Praxair, Inc.	$ 406	$ 339	[1]	$ 399	$ 356	[1]	$ 422	$ 401	[1]	$ 308	[1]	$ 416	$ 1,500	$ 1,547	$ 1,694
Operating Profit (Loss)	599	497	[1]	588	554	[1]	624	594	[1]	480	[1]	623	2,238	2,321	2,608
Sales	2,644	2,716		2,665	2,509		2,595	2,686		2,738		2,757	10,534	10,776	12,273
Depreciation and amortization	$ 285	$ 284		$ 281	$ 272		$ 275	$ 276		$ 278		$ 277	$ 1,122	$ 1,106	$ 1,170
Basic Earnings Per Common Share	$ 1.42	$ 1.19		$ 1.40	$ 1.25		$ 1.48	$ 1.40		$ 1.07		$ 1.44	$ 5.25	$ 5.39	$ 5.79
Cost of sales, exclusive of depreciation and amortization	$ 1,478	$ 1,533		$ 1,468	$ 1,381		$ 1,426	$ 1,488		$ 1,516		$ 1,530	$ 5,860	$ 5,960	$ 6,962
Diluted weighted average shares outstanding (in thousands)	287,956	288,195		287,727	286,665		286,856	287,311		290,102		291,652	287,757	289,055	295,608
Basic weighted average shares outstanding (in thousands)	285,720	285,858		285,702	285,429		285,288	285,651		287,939		289,143	285,677	287,005	292,494
Cost Reduction Program [Member]
Selected Quarterly Financial Information [Line Items]
Diluted Earnings Per Common Share		$ (0.22)						$ (0.04)		$ (0.39)
Net Income (Loss) – Praxair, Inc.		$ (63)						$ (13)		$ (112)
Operating Profit (Loss)		$ (96)						$ (19)		$ (146)
Pension Settlement Charge [Member]
Selected Quarterly Financial Information [Line Items]
Diluted Earnings Per Common Share		$ (0.01)						$ (0.02)
Net Income (Loss) – Praxair, Inc.		$ (3)						$ (5)
Operating Profit (Loss)		$ (4)						$ (7)					$ (4)
Total Impact Of Items [Member]
Selected Quarterly Financial Information [Line Items]
Diluted Earnings Per Common Share													$ (0.27)	$ (0.45)
Net Income (Loss) – Praxair, Inc.													$ (76)	$ (130)
Operating Profit (Loss)													$ (100)	$ (172)
Bond Redemption [Member]
Selected Quarterly Financial Information [Line Items]
Diluted Earnings Per Common Share					$ (0.04)
Net Income (Loss) – Praxair, Inc.					$ (10)

[1] 2016 and 2015 include the impact of the following charges (see Notes 2, 11 & 16):(Millions of dollars)OperatingProfit/(Loss) NetIncome/(Loss) Diluted Earnings Per ShareBond Redemption -Q1$— $(10) $(0.04)Cost reduction program and other charges - Q3(96) (63) (0.22)Pension settlement charge - Q3(4) (3) (0.01)Year 2016$(100) $(76) $(0.27) Cost reduction program and other charges - Q2$(146) $(112) $(0.39)Cost reduction program and other charges - Q3(19) (13) (0.04)Pension settlement charge - Q3(7) (5) (0.02)Year 2015$(172) $(130) $(0.45)