Praxair Inc – ‘10-K405’ for 12/31/98

As of:  Monday, 3/15/99   ·   For:  12/31/98   ·   Accession #:  950159-99-53   ·   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     84K 
 2: EX-10       Ex-10.04                                               7     40K 
 3: EX-12       Ex-12.01                                               1      7K 
 4: EX-13       Ex-13.01                                              56±   242K 
 5: EX-21       Ex-21.01                                               3     18K 
 6: EX-23       Ex-23.01                                               1      7K 
 7: EX-27       Ex-27.01                                               2±     9K 
 8: EX-99       Ex-99.01                                               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, 1998
Commission file number 1-11037

 Praxair, Inc.
1998 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:                     

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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, 1999,  157,454,972  shares of common stock of Praxair,  Inc. were
outstanding.  The aggregate market value of common stock held by  non-affiliates
at January 31, 1999 was approximately $5,071 million.                           

Documents incorporated by reference:                                            

Portions  of the 1998  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 6, 1999, 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,  among
other things, projected capital spending, continuation of acquisition activities
in  the  packaged  gases  and  surface  technologies  businesses,  tax  planning
initiatives  and  effective  tax rates,  impacts in Brazil  related to  economic
conditions,  currency movements, and the change in functional currency,  impacts
from currency and economic developments in Asia, management's assessments of the
impacts of the Year 2000  Problem  and Euro  Conversion,  and  market  risks and
sensitivity analyses disclosures related to financial  instruments involve risks
and uncertainties, and are subject to change based on various factors, including
the impact of changes in worldwide  and  national  economies,  foreign  currency
movements,  pricing fluctuations for the Company's products, changes in interest
rates,  the  continued  timely  development  and  acceptance of new products and
processes,  the impact of  competitive  products  and  pricing,  the  ability to
continue to develop potential acquisition  opportunities,  and the impact of tax
and other  legislation and regulation in the  jurisdictions in which the Company
operates.                                                                       

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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) and  process  gases
(carbon  dioxide,   helium,   hydrogen,   electronic  gases,   specialty  gases,
acetylene).  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. The Company also
designs,  engineers and builds  equipment  that produces  industrial  gases (for
internal use and external  sale) through its global supply  systems  included in
its All Other segment.  Sales for Praxair were $4,833  million,  $4,735 million,
and $4,449 million for 1998, 1997 and 1996, respectively,  with industrial gases
accounting  for 90% of sales  in 1998 and  1997,  and 91% in 1996,  and  surface
technologies and global supply systems accounting for the balance. Refer to Note
4 of the section  captioned  "Notes to  Consolidated  Financial  Statements"  in
Praxair's  1998  Annual  Report  to  Shareholders  for  information  related  to
Praxair's segment information.                                                  

During 1996,  Praxair  acquired the common stock of CBI  Industries,  Inc. (CBI)
(See  Note  2  of  the  section  captioned  "Notes  to  Consolidated   Financial
Statements"  in Praxair's  1998 Annual Report to  Shareholders).  The industrial
gases segment of CBI has been  integrated  into Praxair's  worldwide  industrial
gases  business.  The remainder of CBI was  considered not strategic to Praxair,
and those businesses have been sold.                                            

Gases produced by the Company find wide use in the metal fabrication,  chemicals
& refining, primary metals, food & beverage, healthcare, electronics, aerospace,
glass, pulp & paper, environmental  remediation,  and other 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. In
recent  years,  Praxair has  developed  and  commercialized  new 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 new technologies  include  proprietary vacuum
pressure swing  adsorption  ("VPSA") and membrane  separation to produce gaseous
oxygen and nitrogen, respectively. During 1997, Praxair introduced a new product
offering of small cryogenic nitrogen plants.                                    

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PART I (Cont.)
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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.                           

In the United  States,  most  cylinder  products  are sold  along  with  welding
equipment  (hardgoods)  by  distributors  that  buy the  merchant  product  from
industrial  gases  producers  and package  the product at their own  facilities.
Praxair  has a  large  network  of  independent  distributors  and  owns  equity
interests in  distributor  operations  in 40 states in the U.S. and Puerto Rico.
Praxair has acquired independent distributors in various locations in the United
States.                                                                         

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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,  electronics,  printing,  textile,  plastics,  primary  metals
petrochemical,  and other  industries.  It also  provides  aircraft  engine  and
airframe  component  overhaul  services.   Praxair  Surface   Technologies  also
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 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  48% of its 1998  sales
outside of the United States.  It conducts  industrial  gases  business  through
subsidiary and affiliated companies in Argentina,  Australia,  Belgium,  Belize,
Bolivia,  Brazil, Canada, Chile, Colombia, Costa Rica, Ecuador, France, Germany,
Indonesia,  India,  Israel,  Italy, Japan, Korea,  Mexico, the Netherlands,  the
People's Republic of China, Paraguay, Peru, Poland,  Portugal,  Spain, 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,  Denmark,
France,  Germany,  Italy, Japan,  Singapore,  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
Analyses" in Praxair's 1998 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  and  Tarrytown,  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 - Energy  is the  largest  single  cost  item in the
production and  distribution of industrial  gases.  Principal risks to Praxair's
business  and  financial  performance  include  shortage of  electric  power and
natural gas, interruption of supply or increases in price which cannot be passed
through to customers.  Praxair has not,  historically,  experienced  significant
difficulties of this nature. Also, Praxair operates a large fleet of trucks, and
any fuel shortage may adversely affect its distribution system.                 

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 Products and
Chemicals, Inc., and AGA Aktiebolag.                                            

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., and Chemtronics,  Inc., a
subsidiary of Interlake,  Inc. International competitors in surface technologies
vary from country to country.                                                   

Employees  and Labor  Relations - As of December  31,  1998,  Praxair had 24,834
employees  worldwide.  Of this number,  9,373 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 1998 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 329 cryogenic air separation plants (196 in the United States);  94
by-product  carbon dioxide plants (23 in the United States);  297  non-cryogenic
plants, and 31 hydrogen plants. No single production facility is material except
for the following complexes:                                                    

Number of                     
Supply System            Connected Plants         Products Produced             
-------------            ----------------      ---------------------------      
Northern Indiana               12              Air Separation/Hydrogen          
Houston                         8              Air Separation                   
Gulf Coast *                   11              Hydrogen/ Carbon Monoxide        
Detroit                         6              Air Separation/Hydrogen          
Southern Brazil *               2              Air Separation                   
Northern Spain                  3              Air Separation/Hydrogen          

* partially owned and partially leased.                                         

The surface  technologies  business operates 38 plants located near customers in
Brazil, Denmark, France, Germany, Italy, Japan, Singapore,  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  14
Commitments and Contingencies" in Praxair's 1998 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 1998.                                                                

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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 1998 Annual Report to Shareholders.                     

Praxair's  annual  dividend on its common stock for 1998 was $0.50 per share. In
January  1999,  Praxair's  Board of  Directors  declared a dividend of $0.14 per
share for the first quarter of 1999, or $0.56 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,  1998  is
incorporated herein by reference to the section captioned  "Five-year  Financial
Summary" in Praxair's 1998 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  1998
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  1998
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 1998 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"  in  Praxair's  Proxy
Statement for the Annual Meeting of Shareholders to be held on April 27, 1999.  

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 27, 1999.                    

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 27, 1999.                              

Item 13.  Certain Relationships and Related Transactions                        

Information  required by this item is  incorporated  by reference to the section
captioned  "Certain  Relationships and Related  Transactions" in Praxair's Proxy
Statement for the Annual Meeting of Shareholders to be held April 27, 1999.     

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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 1998
                                                             Annual Report (AR)*
Financial Statements                                                  

Consolidated Statement of Income for the Years Ended                  
  December  31,  1998,  1997  and  1996  ..........................AR-18

 Consolidated Balance Sheet at December 31, 1998 and 1997 .........AR-19

Consolidated Statement of Cash Flows for the Years Ended              
  December 31, 1998, 1997 and 1996 ................................AR-20

Consolidated Statement of Shareholders' Equity  for the               
  Years Ended December 31, 1998, 1997 and 1996 ....................AR-21

 Notes to Consolidated Financial Statements .......................AR-32

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

     * Incorporated  by  reference  to the  indicated  pages of the 1998  Annual
       Report to  Shareholders.  With the exception of this  information and the
       information  incorporated  in Items 5, 6, 7, 7A, 8 and 9, the 1998 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.                                                     

Quarterly Segment Information (Unaudited)                             

     Effective  in 1998,  Praxair  adopted  Statement  of  Financial  Accounting
     Standards  No. 131 which  requires a new  "management"  approach to segment
     disclosures  (see  Notes  1  and  4 in  the  section  captioned  "Notes  to
     Consolidated  Financial  Statements"  in  Praxair's  1998 Annual  Report to
     Shareholders).   Restated  segment   information  to  conform  to  the  new
     requirements for the 1998 quarters (unaudited) is included in Exhibit 99.01
to this Form 10-K.                                                    

(b)  Reports on Form 8-K                                                        

  No reports on Form 8-K were filed during the fourth quarter of 1998.

(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
--------------------------------------------------------------------------------

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 15, 1999                                                            
/s/ J. Robert Vipond
       ---------------------------
J. Robert Vipond    
         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 23, 1999.                               

                                                        [Enlarge/Download Table]

                                                                                          

/s/ Paul J. Bilek               /s/ Alejandro Achaval        /s/ Ronald L. Kuehn, Jr.     
---------------------------     ---------------------------  ---------------------------  
Paul J. Bilek                   Alejandro Achaval            Ronald L. Kuehn, Jr.         
Executive Vice President        Director                     Director                     

/s/ John A. Clerico             /s/ Raymond W. LeBoeuf       /s/ Benjamin F. Payton       
---------------------------     ---------------------------  ---------------------------  
John A. Clerico                 Raymond W. LeBoeuf           Benjamin F. Payton           
Executive Vice President and    Director                     Director                     
Chief Financial Officer and                                                               
Director                                                                                  

/s/ H. William Lichtenberger    /s/ C. Fred Fetterolf        /s/ G. Jackson Ratcliffe, Jr.
---------------------------     ---------------------------  ---------------------------  
H. William Lichtenberger        C. Fred Fetterolf            G. Jackson Ratcliffe, Jr.    
Chairman and Chief              Director                     Director                     
Executive Officer and Director                                                            

                                /s/ Dale F. Frey             /s/ H. Mitchell Watson, Jr.  
                                ---------------------------  ---------------------------  
                                Dale F. Frey                 H. Mitchell Watson, Jr.      
                                Director                     Director                     

                                /s/ Claire W. Gargalli                                    
                                ---------------------------                               
                                Claire W. Gargalli                                        
                                Director                                                  

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 INDEX TO EXHIBITS
                                                  Praxair, Inc. and Subsidiaries
--------------------------------------------------------------------------------

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         1992  Long-Term  Incentive  Plan  (Filed as Exhibit  10.01 to the
               Company's  Registration Statement on Form 10, Filing No. 1-11037,
and incorporated herein by reference).            

*10.01a        First  Amendment to the 1992  Long-Term  Incentive Plan (Filed as
               Exhibit  10.01a to the Company's 1993 Annual Report on Form 10-K,
        Filing No. 1-11037, and incorporated herein by reference).

*10.01b        Second  Amendment to the 1992 Long-Term  Incentive Plan (Filed as
               Exhibit  10.01b to the Company's 1995 Annual Report on Form 10-K,
        Filing No. 1-11037, and incorporated herein by reference).

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                                                  Praxair, Inc. and Subsidiaries
--------------------------------------------------------------------------------

Exhibit No.    Description                                                      

*10.01c        Third  Amendment to the 1992  Long-Term  Incentive Plan (Filed as
               Exhibit  10.01c to the Company's 1995 Annual Report on Form 10-K,
        Filing No. 1-11037, and incorporated herein by reference).

*10.01d        Fourth  Amendment to the 1992 Long-Term  Incentive Plan (Filed as
               Exhibit  10.01d to the Company's 1996 Annual Report on Form 10-K,
        Filing No. 1-11037, and incorporated herein by reference).

*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         1992  Variable  Compensation  Plan (Filed as Exhibit 10.03 to the
               Company's  Registration Statement on Form 10, Filing No. 1-11037,
and incorporated herein by reference).            

*10.03a        First Amendment to the 1992 Variable  Compensation Plan (Filed as
               Exhibit  10.03a to the Company's 1993 Annual Report on Form 10-K,
        Filing No. 1-11037, and incorporated herein by reference).

*10.04         Amended and  Restated  1995 Stock  Option  Plan for  Non-Employee
Directors.                                        

*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).                                       

10.08          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).

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                                                  Praxair, Inc. and Subsidiaries
--------------------------------------------------------------------------------

Exhibit No.    Description                                                      

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).

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).

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                                                  Praxair, Inc. and Subsidiaries
--------------------------------------------------------------------------------

Exhibit No.    Description                                                      

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 7, 1995,  among  Praxair,
               Inc., The Banks Party Thereto,  Morgan  Guaranty Trust Company of
               New York as  Documentation  Agent  and The Chase  Manhattan  Bank
               (formerly known as Chemical Bank), as Administrative Agent (Filed
               as Exhibit  10.17 to the  Company's  1995  Annual  Report on Form
              10-K, Filing No. 1-11037, and incorporated herein by reference).

10.17a         Amendment  No. 1 to Credit  Agreement,  dated as of December  22,
               1997 (Filed as Exhibit 10.17a to the Company's 1997 Annual Report
               on Form 10-K,  Filing No.  1-11037,  and  incorporated  herein by
reference).                                       

*10.18         1996 Praxair, Inc. Senior Executive Performance Award Plan (Filed
               as  Exhibit  10.19 to the  Company's  Report on Form 10-Q for the
               Quarter   ended  March  31,  1996,   Filing  No.   1-11037,   and
incorporated herein by reference).                

10.19          Form of Underwriting  Agreement  related to the sale of shares of
               Chicago  Bridge & Iron  Company  N.V.  (Filed as Exhibit 1 to the
               Registration  Statement  on Form  S-1 of  Chicago  Bridge  & Iron
               Company N.V., Registration No. 333-18065, and incorporated herein
by reference).                                    

12.01          Computation of Ratio of Earnings to Fixed Charges.               

13.01          Praxair's 1998 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.                              

27.01          Financial Data Schedule.                                         

99.01          Segment Information for the 1998 Quarters (Unaudited).           

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
		4/27/99		10					DEF 14A
Filed on:		3/15/99		12
		3/6/99		1
		2/23/99		12
		1/31/99		1
For Period End:		12/31/98		1		11
		12/31/97		11					10-K405
		12/22/97		16
		2/7/97		13
		12/31/96		11					10-K405
		3/31/96		16
		12/22/95		13
		12/7/95		16
		7/15/92		13
		6/30/92		13
		6/4/92		15		16
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