Praxair Inc – ‘10-K405’ for 12/31/01

On:  Thursday, 3/14/02   ·   For:  12/31/01   ·   Accession #:  950159-2-161   ·   File #:  1-11037

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Annual Report — [x] Reg. S-K Item 405   —   Form 10-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K405     Annual Report -- [x] Reg. S-K Item 405                16     82K 
 2: EX-10       Exhibit 10.03                                          7     20K 
 3: EX-10       Exhibit 10.07A                                         1      7K 
 4: EX-10       Exhibit 10.18                                         16     29K 
 5: EX-10       Exhibit 10.19                                          7     29K 
 6: EX-12       Statement re: Computation of Ratios -- exhibit12-1     1      7K 
 7: EX-13       Exhbit 13.01                                          59±   266K 
 8: EX-21       Exhibit 21.01                                          4     22K 
 9: EX-23       Exhibit 23.01                                          1      7K 

10-K405   —   Annual Report — [x] Reg. S-K Item 405
Document Table of Contents

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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[] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2001
Commission file number 1-11037

 Praxair, Inc.
2001 Form 10-K

Praxair, Inc.                             Tel.  (203) 837-2000                  
39 Old Ridgebury Road                     State of incorporation: Delaware      
Danbury, Connecticut 06810-5113           IRS identification number: 06-124 9050

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

--------------------------------------------------------------------------------

Title of each class:                                    Registered on :         
--------------------------------------------------------------------------------

Common Stock ($.01 par value)                           New York Stock Exchange 
Common Stock Purchase Rights                            New York Stock Exchange 
--------------------------------------------------------------------------------

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

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Security 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.                                              
Yes [X]   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 [X]                                                                   

At January 31, 2002, 163,012,845 shares of common stock of Praxair, Inc. were   
outstanding. The aggregate market value of common stock held by non-affiliates  
at January 31, 2002 was approximately $9,395 million.                           

Documents incorporated by reference:                                            

Portions of the 2001 Annual Report to Shareholders of the Registrant are        
incorporated in Parts I, II and IV of this report. Also, portions of the Proxy  
Statement of Praxair, Inc., dated March 1, 2002, are incorporated in Part III   
of this report.                                                                 

The Index to Exhibits is located on page 11 of this report.                     

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Forward-looking statements
--------------------------

The forward-looking statements contained in this document concerning demand for 
products and services, the expected macroeconomic environment, sales and        
earnings growth, projected capital and acquisition spending, the impact of      
required changes in accounting, and other financial goals involve risks and     
uncertainties, and are subject to change based on various factors. These risk   
factors include the impact of changes in worldwide and national economies, the  
cost and availability of electric power, natural gas and other materials,       
development of operational efficiencies, changes in foreign currencies, changes 
in interest rates, the continued timely development and acceptance of new       
products and services, the impact of competitive products and pricing, and the  
impact of tax and other legislation and regulation in the jurisdictions which   
the company operates as well as new accounting rules and practices.             

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 INDEX

                                                        [Enlarge/Download Table]
                                                                                                           
Part I                                                                                                     
         PAGE                                                                                              
Item 1:   Business ..................................................................................... 2 
Item 2:   Properties.................................................................................... 6 
Item 3:   Legal Proceedings............................................................................. 6 
Item 4:   Submission of Matters to a Vote of Security Holders........................................... 6 

Part II                                                                                                    
Item 5:   Market for Registrant's Common Equity and Related  Shareholder Matters........................ 7 
Item 6:   Selected Financial Data....................................................................... 7 
Item 7:   Management's Discussion and Analysis of Financial Condition and Results of Operations......... 7 
Item 7a:  Quantitative and Qualitative Disclosures About Market Risk.................................... 7 
Item 8:   Financial Statements and Supplementary Data................................................... 7 
Item 9:   Changes in and Disagreements  with Accountants on Accounting and Financial Disclosure......... 7 

Part III                                                                                                   
Item 10:   Directors and Executive Officers of the Registrant........................................... 8 
Item 11:   Executive Compensation....................................................................... 8 
Item 12:   Security Ownership of Certain Beneficial Owners and Management............................... 8 
Item 13:   Certain Relationships and Related Transactions............................................... 8 

Part IV                                                                                                    
Item 14:   Exhibits, Financial Statement Schedules, and Reports on Form 8-K............................. 9 

Signatures .............................................................................................10 

Index to Exhibits.......................................................................................11 


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PART I
                                                  Praxair, Inc. and Subsidiaries
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Item 1. Business                                                                

General                                                                         
Praxair, Inc. (Praxair or 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. Praxair has been,  
and continues to be, a major technological innovator in the industrial gases    
industry and has done much to create value for its customers by developing new  
applications for industrial gases and to open new markets by lowering the cost  
of supply.                                                                      

Praxair is the largest industrial gases company in North and South America and  
the third largest worldwide. The Company is also the world's largest supplier of
carbon dioxide. Praxair's primary products for its industrial gases business are
atmospheric gases (oxygen, nitrogen, argon, rare gases), process gases (carbon  
dioxide, helium, hydrogen, electronic gases, specialty gases, acetylene), and   
the Company also designs, engineers and builds equipment that produces          
industrial gases (for internal use and external sale). The Company's surface    
technology segment, operated through Praxair Surface Technologies, Inc.,        
supplies wear-resistant and high-temperature corrosion-resistant metallic and   
ceramic coatings and powders. Sales for Praxair were $5,158 million, $5,043     
million, and $4,639 million for 2001, 2000 and 1999, respectively, with         
industrial gases and related products and services accounted for 92% of sales in
2001, 2000 and 1999, and surface technologies accounts for the balance. Refer to
Note 3 of the section captioned "Notes to Consolidated Financial Statements" in 
Praxair's 2001 Annual Report to Shareholders for information related to         
Praxair's segment information.                                                  

Gases produced by the Company find wide use in the aerospace, chemicals,        
electronics, energy, food and beverage, healthcare, manufacturing and metals    
industries. By using the gases that Praxair produces and, in many cases, the    
proprietary processes that it invents, customer value is created through        
improved product quality, increased productivity, conservation of energy, and   
the attainment of environmental improvement objectives. The Company has been and
continues to be a major technological innovator in the industrial gases industry
and, working with customers, has done much to increase the use of its industrial
gases to support the manufacture of other products and for many other uses.     
Historically, consumption of industrial gases has increased at approximately 1.5
to 2.0 times local industrial production growth in countries in which the       
Company does business.                                                          

Industrial Gases Products and Manufacturing Processes                           
Atmospheric gases are the highest volume products produced by Praxair. Using air
as its raw material, Praxair primarily produces oxygen, nitrogen and argon      
through several air separation processes. Cryogenic air separation, which is the
primary process, compresses and cools air until it liquefies. As a pioneer in   
the industrial gases industry, Praxair has been a leader in developing a wide   
range of proprietary and patented applications and supply systems technology,   
including small cryogenic nitrogen plants. In recent years, Praxair has         
developed and commercialized air separation technologies for the production of  
industrial gases and is a recognized leader in this rapidly growing market      
segment. These technologies open important new markets and optimize production  
capacity for the Company by lowering the cost of supply of industrial gases.    
These technologies include proprietary vacuum pressure swing adsorption ("VPSA")
and membrane separation to produce gaseous oxygen and nitrogen, respectively.   
Industrial Gases also manufactures precious metal and ceramic sputtering targets
used principally in the production of semiconductors.                           

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PART I (Cont.)
                                                  Praxair, Inc. and Subsidiaries
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Process gases, including carbon dioxide, hydrogen, carbon monoxide, helium and  
acetylene, are produced by different methods than air separation. Most carbon   
dioxide is purchased from by-product sources, including chemical plants,        
refineries and industrial processes, or from carbon dioxide wells, and is       
processed in Praxair's own plants to produce commercial carbon dioxide. Hydrogen
and carbon monoxide are produced by purifying hydrocarbon sources or by         
purifying by-product sources obtained from the chemical and petrochemical       
industries. Most of the helium sold by Praxair is derived from certain          
helium-rich natural gas streams in the United States, with additional supplies  
being acquired from outside the United States. Acetylene is typically 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 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. Because these are usually dedicated plants, the  
product supply contracts generally are total requirement contracts, typically   
having 10-20 year terms and containing minimum purchase requirements and price  
escalation provisions. Many of the cryogenic on-site plants also produce liquid 
products for the merchant market. New 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. Atmospheric
gases for the merchant business are produced by cryogenic processes, whereas    
carbon dioxide, hydrogen and helium are produced by other processes as discussed
earlier. The deliveries generally are made from Praxair's plants by tanker      
trucks to storage containers owned or leased and maintained by Praxair or the   
customer at the customer's site. Although 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 agreements used in the merchant business are usually three to    
five year requirement contracts except for carbon dioxide, which typically has  
one-year requirement contracts in the United States.                            

Packaged Gases. Customers requiring small volumes are supplied products in metal
containers called cylinders, usually at medium to high pressure. These so-called
packaged gases include the atmospheric gases, carbon dioxide, hydrogen, helium  
and acetylene. 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 by 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. These businesses also distribute
welding equipment purchased from manufacturers of such products. Praxair has    
acquired independent industrial gas and welding products distributors at various
locations in the United States. Between distributors in which it owns an equity 
interest and independent distributors that resell its gases, Praxair is         
represented in 42 states, the District of Columbia and Puerto Rico.             

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PART I (Cont.)
                                                  Praxair, Inc. and Subsidiaries
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Surface Technologies                                                            
Praxair's surface technologies business supplies wear-resistant and             
high-temperature corrosion-resistant metallic and ceramic coatings and powders  
to the aircraft, printing, textile, plastics, primary metals, petrochemical, and
other industries. It also provides aircraft engine and airframe component       
overhaul services. Additionally, Praxair Surface Technologies manufactures a    
complete line of electric arc, plasma, and high velocity oxygen fuel spray      
equipment as well as arc and flame wire equipment; including its patented Super 
D-Gun. This equipment is used for the application of thermal barrier wear       
resistant coatings. The coatings extend wear life at high temperatures and under
corrosive conditions and are applied at Praxair's facilities using a variety of 
thermal spray coatings processes. The coated parts are finished to the          
customer's precise specifications before shipment.                              

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. Inventories, inventory obsolescence and backlogs are not material to 
Praxair's business.                                                             

Customers - Praxair is not dependent, to a significant extent, upon a single    
customer or a few customers.                                                    

International - Praxair is a global enterprise with 45% of its 2001 sales       
outside of the United States. It conducts industrial gases business through     
subsidiary and affiliated companies in Argentina, Australia, Belgium, Bolivia,  
Brazil, Canada, Chile, Colombia, Costa Rica, France, Germany, India, Israel,    
Italy, Japan, South Korea, Malayasia, Mexico, the Netherlands, the People's     
Republic of China, Paraguay, Peru, Poland, Portugal, Spain, Taiwan, Thailand,   
Turkey, Uruguay and Venezuela. S.I.A.D. (Societa Italiana Acetilene & Derivati  
S.p.A.), an Italian company carried at equity, also has established positions in
Austria, Bulgaria, Croatia, the Czech Republic, Hungary, Romania and Slovenia.  
Praxair's surface technologies business has operations in Brazil, France,       
Germany, Italy, Japan, Singapore, South Korea, Taiwan, Spain, Switzerland and   
the United Kingdom.                                                             

Praxair's international business is subject to risks customarily encountered in 
foreign operations, including fluctuations in foreign currency exchange rates   
and controls, import and export controls, and other economic, political and     
regulatory policies of local governments. Also, see Note 1 of the section       
captioned "Notes to Consolidated Financial Statements", and the section         
captioned "Management's Discussion and Analysis - Market Risk and Sensitivity   
Analysis" in Praxair's 2001 Annual Report to Shareholders.                      

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 frequent introduction of new industrial gas          
applications. It has also led to the development of new advanced air separation 
process technologies. Research and development for industrial gases is          
principally conducted at Tonawanda, New York; Burr Ridge, Illinois; Rio de      
Janeiro, Brazil; Mississauga, Canada and Norwood, Massachusetts.                

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, Praxair does not     
consider its business as a whole to be materially dependent upon any one        
particular patent or patent license. Praxair also owns a large number of        
trademarks.                                                                     

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PART I (Cont.)
                                                  Praxair, Inc. and Subsidiaries
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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. Other important elements are natural gas, waste hydrogen (for      
hydrogen) and diesel fuel (for distribution). A shortage or interruption of     
energy, or increase in energy prices that cannot be passed through to customers,
are risks to Praxair's business and financial performance. Because many of      
Praxair's contracts with customers are long term, with pass-through provisions, 
Praxair has not, historically, experienced significant difficulties related to  
recovery of energy costs. Supply of energy also has not been a significant      
issue. However, during 2000 and 2001, there has been unprecedented volatility in
the cost and supply of electricity and natural gas prices in the United States, 
particularly California and Washington, and energy supply curtailments in Brazil
(see South America segment discussion). To date, Praxair has been able to       
substantially mitigate the financial impact of these costs by passing them on to
customers. In anticipation of continued volatility, the company has taken       
aggressive pricing actions, is strengthening its energy management program for  
purchased power, including the use of derivative instruments to reduce risk     
associated with purchases of natural gas and electricity (see Notes 1 and 5 to  
the consolidated financial statements in the 2001 Annual Report), and is        
implementing new customer contract terms and conditions. However, the outcome of
regional energy situations or new energy situations 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 The BOC Group p.l.c., L'Air Liquide S.A., Air Gas, Air        
Products and Chemicals, Inc., The Messer Group and Linde AG. At a worldwide     
level, there are no congruent competitors for the surface technologies business.
However, principal domestic competitors are Sermatech International, Inc., a    
subsidiary of Teleflex, Inc., Chemtronics, Inc., a subsidiary of GKN p.l.c. and 
Johnson Matthey Electronics, a subsidiary of Honeywell. International           
competitors in surface technologies vary from country to country.               

Employees and Labor Relations - As of December 31, 2001, Praxair had 24,271     
employees worldwide. Of this number, 9,759 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 - Costs
Relating to the Protection of the Environment" in Praxair's 2000 Annual Report  
to Shareholders.                                                                

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PART I (Cont.)
                                                  Praxair, Inc. and Subsidiaries
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Item 2. Properties                                                              

Praxair's worldwide headquarters is located in leased office space in Danbury,  
Connecticut. Other principal administrative offices are owned in Tonawanda, New 
York and Rio de Janeiro, Brazil.                                                

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; Norwood, Massachusetts; Burr Ridge, Illinois and Rio de    
Janeiro, Brazil. Praxair's Italian equity affiliate, Societa Italiana Acetilene 
& Derivati S.p.A. (S.I.A.D.) also has such capacity.                            

Praxair owns 317cryogenic air separation plants (195 in the United States); 90  
by-product carbon dioxide plants (23 in the United States); 354 non-cryogenic   
plants, and 39 hydrogen plants. No single production facility is material except
for the following complexes:                                                    

                                                        [Enlarge/Download Table]

                             Number of                                               
Supply System                Connected Plants  Products Produced                     
-------------                ----------------  -----------------                     
                                                                                     
Northern Indiana                  14           Air Separation/Hydrogen/Carbon Dioxide
Houston                            8           Air Separation                        
Gulf Coast *                      12           Hydrogen/ Carbon Monoxide             
Detroit                            7           Air Separation/Hydrogen               
Louisiana*                         4           Hydrogen/Carbon Monoxide              
Southern Brazil *                  2           Air Separation                        
Northern Spain                     5           Air Separation/Hydrogen/Carbon Dioxide

* partially owned and partially leased.                                              

The surface technologies and electronics component of industrial gases business 
operates 31 plants located near customers in Brazil, France, Germany, Italy,    
Japan, Singapore, South Korea, Taiwan, Spain, Switzerland, the United Kingdom   
and the United States.                                                          

Generally, these facilities are fully utilized and sufficient to meet customer  
needs.                                                                          

Item 3.  Legal Proceedings                                                      

Information required by this item is incorporated herein by reference to the    
section captioned "Notes to Consolidated Financial Statements - Note 13         
Commitments and Contingencies" in Praxair's 2001 Annual Report to Shareholders. 

Item 4.  Submission of Matters to a Vote of Security Holders                    

Praxair did not submit any matters to a shareholder vote during the fourth      
quarter of 2001.                                                                

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 PART II
                                                  Praxair, Inc. and Subsidiaries
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Item 5. Market for Registrant's Common Equity and Related Shareholder Matters   

Market, trading, shareholder and dividend information for Praxair's common stock
is incorporated herein by reference to the section captioned "Information for   
Investors" in Praxair's 2001 Annual Report to Shareholders.                     

Praxair's annual dividend on its common stock for 2001 was $0.68 per share. On  
January 22, 2002, Praxair's Board of Directors declared a dividend of $0.19 per 
share for the first quarter of 2002, or $0.76 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.                                                   

Item 6. Selected Financial Data                                                 

Selected financial data for the five years ended December 31, 2001 is           
incorporated herein by reference to the section captioned "Five-Year Financial  
Summary" in Praxair's 2001 Annual Report to Shareholders. This summary should be
read in conjunction with the Consolidated Financial Statements and related Notes
to Consolidated Financial Statements.                                           

Item 7. Management's Discussion and Analysis of Financial Condition and Results 
of Operations                                                                   

Information required by this item is incorporated herein by reference to the    
section captioned "Management's Discussion and Analysis" in Praxair's 2001      
Annual Report to Shareholders.                                                  

Item 7a.  Quantitative and Qualitative Disclosures About Market Risk            

Information required by this item is incorporated herein by reference to the    
section captioned "Management's Discussion and Analysis" in Praxair's 2001      
Annual Report to Shareholders.                                                  

Item 8. Financial Statements and Supplementary Data                             

Information required by this item is incorporated herein by reference to the    
sections captioned "Consolidated Statement of Income," "Consolidated Balance    
Sheet," "Consolidated Statement of Cash Flows," "Consolidated Statement of      
Shareholders' Equity" and "Notes to Consolidated Financial Statements" in       
Praxair's 2001 Annual Report to Shareholders.                                   

Item 9.  Changes in and Disagreements with Accountants on Accounting and        
Financial Disclosure                                                            

There have been no changes in or disagreements with accountants reportable under
this item.                                                                      

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PART III
                                                  Praxair, Inc. and Subsidiaries
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Item 10.  Directors and Executive Officers of the Registrant                    

Information required by this item is incorporated herein by reference to the    
section captioned "Directors and Executive Officers" and "Section 16(a)         
Beneficial Ownership Reporting Compliance" in Praxair's Proxy Statement for the 
Annual Meeting of Shareholders to be held on April 23, 2002.                    

Item 11.  Executive Compensation                                                

Information required by this item is incorporated herein by reference to the    
section captioned "Executive Compensation" in Praxair's Proxy Statement for the 
Annual Meeting of Shareholders to be held on April 23, 2002.                    

Item 12.  Security Ownership of Certain Beneficial Owners and Management        

Information required by this item is incorporated herein by reference to the    
section captioned "Share Ownership" in Praxair's Proxy Statement for the Annual 
Meeting of Shareholders to be held April 23, 2002.                              

Item 13.  Certain Relationships and Related Transactions                        

There have been no transactions or relationships since the beginning of 2001,   
which are reportable under this item.                                           

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 PART IV
                                                  Praxair, Inc. and Subsidiaries
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Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K      

(a)  Financial Statements and Schedules                                         

                                                             Page No. in
                                                            Praxair's 2001
                                                             Annual Report (AR)*
Financial Statements                                                            

Consolidated Statement of Income for the Years Ended                        
December 31, 2001, 2000 and 1999 .................................AR-17 

Consolidated Balance Sheet at December 31, 2001 and 2000 ...........AR-18   

Consolidated Statement of Cash Flows for the Years Ended                    
December 31, 2001, 2000 and 1999 ..................................AR-19  

Consolidated Statement of Shareholders' Equity  for the                     
Years Ended December 31, 2001, 2000 and 1999 ......................AR-20  

Notes to Consolidated Financial Statements .........................AR-31   

Report of Independent Accountants ..................................AR-48   

  *    Incorporated by reference to the indicated pages of the 2001 Annual
          Report to Shareholders. With the exception of this information and the
    information incorporated in Items 5, 6, 7, 7A, 8 and 9, the 2001
      Annual Report to Shareholders is not to be deemed filed as part of
this Annual Report on Form 10-K.                            

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.                                                     

(b)  Reports on Form 8-K                                                        

None                                                                  

(c)  Exhibits                                                                   

   Exhibits filed as a part of this Annual Report on Form 10-K are listed in
the Index to Exhibits located on page 11 of this Report.              

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SIGNATURES
                                                  Praxair, Inc. and Subsidiaries
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Pursuant to the requirements of Section 13 or 15(d) 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 14, 2002                                                           
                                     /s/ George P. Ristevski
                                             -------------------------------
                                       George P. Ristevski
                                           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 February 26, 2002.                               

                                                        [Enlarge/Download Table]

                                                                                       
/s/ James S. Sawyer        /s/ Dennis H. Reilley           /s/ Alejandro Achaval       
-------------------------  ------------------------------  --------------------------- 
James S. Sawyer            Dennis H. Reilley               Alejandro Achaval           
Vice President and         Chairman, President and Chief   Director                    
Chief Financial Officer    Executive Officer and Director                              

/s/ Dale F. Frey           /s/ Claire W. Gargalli          /s/ Ronald L. Kuehn, Jr.    
-------------------------  ------------------------------  --------------------------- 
Dale F. Frey               Claire W. Gargalli              Ronald L. Kuehn, Jr.        
Director                   Director                        Director                    

/s/ Raymond W. LeBoeuf     /s/ Benjamin F. Payton          /s/ G. Jackson Ratcliffe, Jr
-------------------------  ------------------------------  ----------------------------
Raymond W. LeBoeuf         Benjamin F. Payton              G. Jackson Ratcliffe, Jr    
Director                   Director                        Director                    

/s/ Wayne T. Smith         /s/ H. Mitchell Watson, Jr                                  
-------------------------  ------------------------------  --------------------------- 
Wayne T. Smith             H. Mitchell Watson, Jr          William A. Wise             
Director                   Director                        Director                    


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Exhibit No.       Description                                                   

2.01          Agreement and Plan of Merger dated as of December 22, 1995
                 among Praxair, Inc., PX Acquisition Corp. and CBI Industries,
               Inc. (Filed as Exhibit 2 to the Company's Current Report on
             Form 8-K dated December 22, 1995, Filing No. 1-11037, and
incorporated herein by reference).          

  3.01          Restated Certificate of Incorporation (Filed as Exhibit 3.01
                  to the Company's Registration Statement on Form 10, Filing No.
   1-11037, and incorporated herein by reference).

    3.02          Amended By Laws of Praxair, Inc. (Filed as Exhibit 3.02 to the
           Company's Registration Statement on Form 10, 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 7, 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 7, 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).

 4.02          Rights Agreement between the registrant and The Bank of New
                 York as Rights Agent. (Filed as Exhibit 4.02 to the Company's
              Registration Statement on Form 10, Filing No. 1-11037, and
incorporated herein by reference).          

 4.03          Indenture, dated as of July 15, 1992, between Praxair, Inc.
                 and State Street Bank and Trust Company, successor trustee to
                Fleet Bank of Connecticut and the ultimate successor trustee
           to Bank of America Illinois (formerly Continental Bank,
              National Association) (Filed as Exhibit 4 to the Company's
             Form 10-Q for the quarter ended June 30, 1992, Filing No.
   1-11307, and incorporated herein by reference).

   4.04          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.                    

 4.05          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).                                 

 4.06          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        2002 Praxair, Inc. Long-Term Incentive Plan(Filed on July 5,
                2001 as Exhibit 4 to the Company's Registration Statement on
Form S-8, Registration No. 333-64608).      

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Exhibit No.       Description                                                   

*10.02        Form of Severance Compensation Agreement (Filed as Exhibit
                 10.02 to the Company's 1997 Annual Report on Form 10K, Filing
       No. 1-11037, and incorporated herein by reference).

*10.03        2002 Praxair, Inc. Variable Compensation Plan.            

  *10.04        Amended and Restated 1995 Stock Option Plan for Non-Employee
                  Directors (Filed as Exhibit 10.04 to the Company's 1998 Annual
             Report on Form 10-K, Filing No. 1-11037, and incorporated
herein by reference).                       

  *10.05        Special Severance Protection Program (Filed as Exhibit 10.05
                  to the Company's Registration Statement on Form 10, Filing No.
   1-11037, and incorporated herein by reference).

    *10.06        Restated Praxair, Inc. Directors' Fees Deferral Plan (Filed as
             Exhibit 10.06 to the Company's 1996 Annual Report on Form
        10-K, Filing No. 1-11037, and incorporated herein by
reference).                                 

*10.07        Amended and Restated 1993 Praxair Compensation Deferral   
                Program (Filed as Exhibit 10.07 to the Company's 1996 Annual
             Report on Form 10-K, Filing No. 1-11037, and incorporated
herein by reference).                       

    *10.07a       First Amendment, dated as of April 1, 2001, to the Amended and
       Restated 1993 Praxair Compensation Deferral Program

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).          

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Exhibit No.       Description                                                   

  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).          

10.9          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).                       

  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).

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                                                  Praxair, Inc. and Subsidiaries
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Exhibit No.       Description                                                   

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).

    10.15         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 July 12, 2000 among Praxair, 
                Inc,, The Banks Party Thereto, Morgan Guaranty Trust Company
               of New York, Bank of America, N. A. and Credit Suisse First
                Boston as Co-Syndication Agents and The Chase Manhattan Bank
           as Administrative Agent (Filed as Exhibit 10.17b to the
                  Company's 2000 Annual Report on Form 10-K, Filing No. 1-11037,
and incorporated herein by reference).      

10.18         Amended and Restated Credit Agreement dated as of July 11,
                2001 among Praxair, Inc., The Banks Listed Herein, The Chase
                  Manhattan Bank, Bank of America, N.A., and Credit Suisse First
                Boston as Co-Syndication Agents and The Chase Manhattan Bank
as Administrative Agent.                    

 *10.19        Praxair, Inc. Plan for Determining Performance-Based Awards
Under Section 162(M).                       

12.01         Computation of Ratio of Earnings to Fixed Charges.        

13.01         Praxair's 2001 Annual Report to Shareholders (such report,
                except for those portions which are expressly referred to in
           this Form 10-K, is furnished for the information of the
             Commission and is not deemed "filed" as part of this Form
10-K).                                      

21.01         Subsidiaries of Praxair, Inc.                             

23.01         Consent of Independent Accountants.                       

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.                                      

14

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘10-K405’ Filing		Date		First		Last			Other Filings
		4/23/02		10					8-K,  DEF 14A
Filed on:		3/14/02		12					DEF 14A
		3/1/02		1
		2/26/02		12
		1/31/02		1
		1/22/02		9
For Period End:		12/31/01		1		11
		7/11/01		16
		7/5/01		13					S-8
		4/1/01		14
		12/31/00		11					10-K
		7/12/00		16
		12/31/99		11					10-K
		2/7/97		13
		12/22/95		13
		7/15/92		13
		6/30/92		13
		6/4/92		15		16
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