PRAXAIR 2003 ANNUAL REPORT Financial Highlights (Dollar Amounts in Millions, Except Per Share Data)

PRAXAIR 2003 ANNUAL REPORT financial highlights (Dollar amounts in millions, except per share data)

year ended december 31, 2 0 0 3 2 0 0 2 2 0 0 1 (a)

Sales $5,613 $5,128 $5,158 Operating Profi t $ 922 $ 923 $ 800 Income before accounting changes $ 585 $ 548 $ 432 Diluted earnings per share (b) $ 1.77 $ 1.66 $ 1.32

OTHER INFORMATION AND RATIOS Cash fl ow from operations $ 1.137 $1,001 $1,020 Capital expenditures (c) $ 983 $ 498 $ 595 Cash fl ow from operations-to-debt ratio 40.4% 36.4% 34.1% After-tax return on capital (c, d) 12.8% 13.4% 12.7% Return on equity (d) 21.6% 22.8% 21.6% (a) 2001 includes goodwill amortization of $38 million ($33 million after tax or $0.10 per diluted share) and special charges of $70 million ($57 million after tax or $0.17 per diluted share). (b) Diluted earnings per share have been adjusted to reflect the December 15, 2003 two-for-one stock split which was effected as a stock dividend (see Note 1 to the consolidated financial statements). (c) Capital expenditures for 2003 include the purchase of previously leased assets for $339 million (see Note 5 to the consolidated financial statements). Consequently, after-tax return on capital for 2003 was reduced by 0.4%. (d) Refer to the Appendix on page 65 for definitions and reconciliation to reported amounts.

SALES CASH FLOW FROM OPERATIONS DILUTED EARNINGS PER SHARE ��(d) � �� (a, b, d)

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EXTERNAL RECOGNITION “quatthe ametbest lorem ceo’s zzrilissim in america, vel elent” institutional landiam, commodo investor obore magnibh magazine er ipit — praxair luptat. ’s ceo dennisLore reilley mod tet wissi tops te the mincilit basic venis materials et, commolorpero category. er aute January veros 2004 non “utthe lumsandigna best cfo’ facings in america, erostrud dolor” institutional er iureet utpatem investor er adipiss magazine quat, summoluptat — praxair’s cfo, james sawyer is among the top ten. February 2004 at etum in hent utpate consent am do odolorem irit lore dit ad er ad digna faccum “best managed companies in america,” forbes magazine — praxair headlinesvolobor sequam the accum chemical vel diamete company tate min section. hendreetum January er zzrilis 2004 nis niscipit vulla dunt diamete periuscipis. “leaders for the 21st century, ” treasury and risk management magazine — praxair’s cfo, james sawyer, is one of three selected. January 2004 dow jones sustainability index — praxair selected as an index component.Ut vel September dunt quis 2003 nit tate min consent am hendreetum er zzrilis nis niscipit volortop governance periuscipis molobor practices aute mincipit rating quis — governancemetrics nit lorper sissecte facilla international. dignis nim nim July 2003 and February 2004 del faccum del ute velenibh exerciduis doloreet, sequatuero dion vulputem vercin credit rating upgrade to a minus — standard & poor’s rating services.utpat aliquisl April diat, 2003 con at utat. Ut velesequisl dolorer ipsusci luptat.

governance rating in the top 25 s &p 500 companies — institutional shareholderA DISCIPLINED APPROACH services. April 2003 “Loresenior dui blaorpefinancial iusci officer iureet adionse of the molor year, sum” chemicalipsuscidunt weeklam irilluptat, magazine volortio — praxairveliscidunt’s praesequatcfo, james lutpat. sawyer. Ut vel April ute magnisit 2003 ex enit loborem zzrit utpat, quisit in “utmost vel ullandigna admired concompanies, hent iuscil” ulputat.fortune Ut magazineut vullandrer — accu praxairm ver quamranked zzriure third er among chemical companies. March 2003 and March 2004 suscilla feugiam vele ex eummod modit praestin si. Dui tem doloborem velit exerosto commoloreet, vel ullandrem velisi blaor sectet, sustincinit atio ex euguer ad etue Clockwise from top left; DENNIS H. REILLEY, Chairman, President and Chief Executive Offi cer,

STEPHEN F. ANGEL, Executive Vice President,

RICARDO S. MALFITANO, Senior Vice President and JAMES S. SAWYER, Senior Vice President and Chief Financial Offi cer.

2 to our shareholders

If the true test of an organization is how well it performs in tough times, the Praxair team did very well in 2003. Although they might sound like old-fashioned concepts in the vernacular of today’s business world, the primary factors that led to this performance were innovation and an acute focus on disciplined execution. Innovation is often the result of a passionate belief that there really is a better, easier, cheaper or faster way to achieve a particular goal. And, although these breakthroughs are frequently buried deep in arcane processes or technologies, they can make a real difference to a customer’s performance as well as to our environment. That is good for everyone: it is good for business and, during 2003, it was very good for Praxair. Partnering with customers, we developed and commercialized several new products to improve semiconductor production; we introduced new technology to reduce the release of environmental pollutants by electric utilities; and we developed a process for oil refi ners to signifi cantly increase effi ciency and reduce emissions. These innovations and others will be discussed in the pages that follow. When it came to executing our business plans, the Praxair team concentrated on four key areas: operational discipline, capital discipline, customers’ needs and safety. Operational discipline ensured the consistent, reliable, cost-effi cient operation of our plants and facilities all day, everyday. From capital discipline came carefully selected fi rst-class projects and investments that provided returns far in excess of the cost of capital. And providing valued service to customers in a safe and effi cient manner continued to be the underpinning of our successful enterprise. What we did not do last year was almost as important for our business as what we actually did. Strategic acquisitions can certainly play a role in growing our business, but we resisted the prohibitive prices that were being asked in several markets, such as home healthcare. And we remained prudent in the authorization of capital expenditures for organic growth in order to avoid over-investment in capacity additions. These management principles were important in our 2003 performance. And, I believe they will be a major factor in continuing to drive us in the right direction in the years ahead. In 2003, Praxair led the industrial gases industry in earnings growth and return on capital. Net income was up 7% excluding the impact of an accounting change in 2002, and after-tax return on capital was 12.8%. Refl ecting our strong cash fl ow and capital discipline, our debt-to-capital ratio fell to 46.2% at year-end, the lowest level since 1995. Praxair’s total return to shareholders of 34% outperformed that of its competitors and the Standard and Poor’s 500. These results refl ect the skill and hard work of Praxair employees around the world who strove constantly to offset slow economic growth in many major markets. They also refl ect astute marketing and pricing actions that captured as much benefi t as

3 possible from the growth we did achieve. In other parts of this report, we describe examples of individual efforts that display the “can-do” attitude and unmatched professional expertise in many different parts of the organization that is responsible for this superior performance. Looking ahead, even the rosiest economic forecasts predict that the manufacturing sector, which accounts for the bulk of our customers, is not likely to bounce back as quickly as some sectors. This means that innovation, productivity improvement and capital discipline will continue to be the cornerstones of Praxair’s success for the foreseeable future. These will be supported by our expanded global Six Sigma initiatives, which contributed about half of our $100 million in productivity savings in 2003. Procurement benefi ts and a dramatic improvement in plant effi ciencies worldwide accounts for the other half. In 2004, our packaged gases operations will be the focus of additional productivity-improvement initiatives. With our balanced approach to capital spending, we will concentrate on projects that earn good returns in our targeted markets and 10 core countries, and on selective programs and acquisitions that can improve our competitive position and provide profi table growth. Clearly, our biggest challenge over the near term is growth. Over the past three years, our top line reached a plateau as industrial growth slowed. However, during this time we signifi cantly beefed up our hydrogen capabilities; introduced several new products for the semiconductor industry; solidifi ed our position in the fast-growing China and healthcare markets; and launched services and other growth initiatives. Construction began on two new hydrogen plants on the U.S. Gulf Coast, which are on track to start up in 2004. Refi ners’ demand for hydrogen is expected to increase by nearly 20% per year through 2006 based on the need for clean-burning, low-sulfur gasoline and diesel fuels to comply with new Environmental Protection Agency regulations. Since we began investing in China in 1993, Praxair has established a No. 1 position among industrial gases companies, and our investments there are earning a good rate of return. Based on forecast economic growth, we estimate that our sales in China over the next four years could achieve a cumulative average growth rate of more than 30% per year. To capture those sales, we will focus on the rapidly develop- ing steel, chemical and electronics markets. We invested about $40 million in our China operations during 2003, and this will double in 2004. In a relatively short period of time, we have made great progress in the North American home healthcare market, carving out a niche in the respiratory and rental home-medical equipment segments. Our strategy is to streamline transaction

4 processing and continue to make highly selective acquisitions as well as start up new operations in certain geographic areas. We anticipate sales to grow between 10% and 20% in 2004. Electronics sales are forecast to grow, partly on the strength of a cyclical recovery and also due to new product introductions. We are continuing to strengthen our capabilities in the areas of advanced deposition materials, advanced components and specialized services. One of the key elements for success in all our markets is the concentration of all employees — from the topmost management level down — on knowing our business in great detail and, at the same time, clearly understanding the needs of our customers. This allows us to quickly identify the good opportunities, mitigate risks and seal the best deals. Our commitment to safety and integrity underlies everything we do. We gained good recognition over the past year for our strong governance practices, and Praxair was included in the Dow Jones Sustainability Index, which evaluates companies based on a wide range of environmental, social and economic factors. In safety, we were able to sharply reduce the number of vehicle accidents in our North American bulk-gases fl eet, the result of employee focus and a series of training programs initiated during the year. However, personnel safety performance slipped after three years of steady improvement. Although our safety record is still much better than the industry average, we are not satisfi ed, and have taken action to move the trend back in the right direction. As always, Praxair’s board of directors gave valuable guidance to our management team throughout the year. At the end of 2003, Dale Frey retired from the board and we thank him for his advice and wise counsel on a wide range of business issues over the 10 years of his service. As 2004 begins, I remain cautiously optimistic about the pace and sustainability of the economic recovery and I believe Praxair is well placed to accelerate its growth as the global economy strengthens. Our solid performance in 2003 demonstrates that all Praxair people — regardless of where they work in the organization — fully understand the task at hand. They embrace the principles of innovative thinking and disciplined execution and are pulling together in the right direction — toward revenue and earnings growth, increased return on capital, and cash fl ow. It’s the direction that leads to increased value for our shareholders.

DENNIS H. REILLEY Chairman, President & Chief Executive Offi cer February 11, 2004

5 review of operations

A combination of rigorous operational discipline, innovative technologies and creative marketing by the Praxair team enabled the company to deliver superior returns to shareholders despite the pressures of sluggish growth in industrial markets.

OPERATIONAL DISCIPLINE Praxair employees throughout the organization focused on squeezing the maximum value out of every business activity, from the routine to the extraordinary. A combination of initiatives in business operations and procurement reduced costs by $100 million while improving customer-response times, process effi ciency and reliability, and transaction-processing speeds. Six-Sigma teams contributed almost half of the savings, refl ecting the expanding implementation of this methodology across all Praxair businesses worldwide during the year. By year-end, almost 2,000 employees had received Six Sigma training and 1,000 projects were underway. Operational effi ciencies continued to improve as a result of our global process-automation program, designed to achieve a three-year payback on investment. Eighty percent of the Praxair plants worldwide have been retrofi tted and upgraded, resulting in a 15% to 20% reduction in the unit cost of production over the last fi ve years. Benefi ts also have been realized from computerized maintenance management, improved logistics programming and standardized truck-fi lling procedures. In 2004, the effort will focus on opportunities for similar signifi cant productivity gains in our packaged-gases operations worldwide. Safety performance was mixed in 2003. Recordable injuries were up a disappointing 12% after three years of steady improvement, and lost workday cases were up 7%. Programs designed to heighten safety awareness and train employees to avoid risky behavior will be a top priority in 2004. On the positive side, our total vehicle accident rate was down 11%, with high-severity accidents down 23%. The improved vehicle accident rate refl ects the success of several programs that have focused on this area over the past two years; the North American bulk-gases distribution team showed the greatest improvement.

STRONG REGIONAL BUSINESSES In a tough economic environment, our North American business increased sales 8% and generated strong cash fl ow, refl ecting a combination of new business and installation of advanced controls at praxair’s pipeline business center in texas has significantly improved efficiency and reliability while reducing operating costs. r &d’s LARRY MEGAN was part of the team that developed the software and worked closely with operations engineer MAURY MCDOWELL and others to get the project fully implemented in early 2003.

6 Larry Megan Manager, R&D Advanced Simulation & Control Maury McDowell Senior Engineering Associate

DEER PARK PRODUCTIVITY IMPROVEMENT PROJECTS HAVE REDUCED UNIT COST OF PRODUCTION BY 15% TO 20% OVER THE PAST FIVE YEARS TEXAS Viky Gilis Production Engineer Michel Suyckerbuyck Group Leader

OEVEL SALES TO ELECTRONICS CUSTOMERS WORLDWIDE ROSE 10% DURING 2003 BELGIUM successful pricing actions as well as a strong focus on productivity. Demand in industrial markets began to pick up late in the year; growth came from higher sales to the metals, chemicals and manufacturing sectors. Praxair Services, Inc., a subsidiary formed mid-year, also experienced strong sales, refl ecting increased oil- and gas-well drilling activity during the year. Praxair Services offers comprehen- sive integrity assessment for tanks and piping, mobile nitrogen pumping and rapid-response cleaning, environmental drilling, pipeline hydro-testing and leak- detection services. To enhance Praxair’s ability to supply customers in Western Canada, Praxair Canada acquired the Western Canada bulk-gas business of Air Products. This business encompasses supply to about 60 locations as well as a small number of on-site production facilities in British Columbia, Alberta, Manitoba and Northwest Territories. In the food market, the year marked the fi rst commercial installation of Praxair’s Better Than Fresh™ non-thermal juice-processing system and NatureWash™ ozonated-water produce-washing system. Applied to orange juice production, the juice-processing system uses carbon dioxide rather than heat to kill microorgan- isms, retaining more of the juice’s natural fl avor and nutrients. The patent-pending ozonated-water system is being used to process fresh-cut fruit and vegetables for the pre-packaged, ready-to-eat consumer market. Incorporating ozone into the washing process better preserves the taste, appearance and texture of produce compared to other methods. Praxair Distribution, our cylinder-gases business in the U.S. and Canada, made substantial progress in positioning itself as a full-service solutions provider. Using proprietary tools such as our computerized StarSolver® productivity- improvement program, Praxair specialists are helping customers reduce costs and improve product quality by recommending changes to production processes. Other services include cylinder-to-bulk-gas conversion systems, gas-cylinder management, and installation of gas-distribution systems that lower residual losses and increase safety and reliability. since praxair’s state-of-the-art electronics processing and innovation center opened in belgium in june 2003, MICHEL SUYCKERBUYCK, VIKY GILIS and other highly trained employees have been supplying ultra-high-purity semiconductor process gases to customers throughout europe. fully automated and featuring innovations such as a patent-pending carbon- dioxide-based cleaning system, the center allows the electronics team to deliver enhanced safety, quality and reliability.

9 This customer-focused approach helped win the business of LSG Sky Chefs, the global airline-catering subsidiary of Lufthansa. To refrigerate food and beverages on airplanes, Praxair Distribution will supply more than 30 million pounds of dry ice slices per year from 17 facilities to 70 LSG Sky Chefs locations at 45 airports in the U.S., Canada and Mexico. By plotting changing temperatures inside airline food carts, experienced food technicians at the Praxair Food Technologies Center in Burr Ridge, Illinois, were able to identify the optimum amount and form of dry ice required to keep food and beverages properly chilled. Praxair also provides LSG Sky Chefs with dry ice in Brazil, Spain and Argentina. Another signifi cant piece of new business for Praxair Distribution is a fi ve-year contract to supply cylinder gases and hardgoods to United Technologies Corporation companies at more than 200 locations in the U.S., Canada, Puerto Rico and Mexico. UTC facilities will use Praxair products for heat treating, welding and cutting in metal fabrication and maintenance, for calibration of emissions testing equipment, and in research and development. To support growing demand for industrial, medical and specialty cylinder gases in the San Francisco Bay area, a new plant opened in Pittsburg, California, replacing two older, less effi cient plants. The state-of-the-art, 34,000-square-foot facility features a very high level of automation and is designed to operate with very low levels of empty-cylinder inventory. In South America, volume demand remained strong and sales were up 12% despite devaluation of the currency in Brazil which stabilized in the second half of 2003. Excluding currency effects, sales increased by 19%, primarily in metals, glass, food and healthcare markets. The business continues to develop new service offerings in wastewater treatment and recycling; site-gas management; pipeline maintenance; and metal fabrication markets. A new plant opened in Brazil to produce conversion kits that allow consumers to adapt automobiles to use natural gas as a fuel. Our team in Europe continues to do an outstanding job in winning new business while improving the effi ciency of production and distributions systems across the region. Sales were up by 19% and operating profi t by 22%, refl ecting a strong Euro as well as gains in the metals, healthcare, chemicals and general

superb teamwork captured a large dry-ice account at sky chefs, a subsidiary of lufthansa airlines that provides catering services to 40 airlines. in just 45 days, REGGIE HICKS and his la marque team started up a new plant, installing ice-making and packaging equipment and staffing the facility. we have been delivering high-quality dry ice to airlines flying out of dallas, sky chef’s largest location, ever since.

10 Reggie Hicks Facility Manager

LA MARQUE A NEW ACCOUNT INCREASED DEMAND FOR PRAXAIR’S DRY ICE IN NORTH AMERICA BY 25% TEXAS Minda Ho Vice President, Praxair China

SHANGHAI OUR BUSINESS IN CHINA IS FUELING MOST OF THE SALES AND OPERATING-PROFIT GROWTH IN ASIA CHINA manufacturing markets. Operating margins reached 24.6%, the result of productivity initiatives, higher volumes and higher pricing. In November, Praxair acquired the remaining shares of Indugas, its packaged-gases joint venture in Belgium. Indugas had sales of $35 million in 2003.

KEY GROWTH PLATFORMS Praxair made substantial progress in its key growth areas: china, hydrogen, healthcare, electronics and environmental technologies. Our growing business in China generated the bulk of sales and operating profi t growth in Asia, which were up 20% and 25% respectively. We are focusing on three key industrial corridors along the coast of China: Beijing-Tianjin in the north; Nanjing-Shanghai; and Guangdong Province in the south. Under a new agreement, Praxair China will supply a variety of bulk gases to Semiconductor Manufacturing International (Beijing) Corporation’s new semiconductor wafer fab scheduled to start up in early 2005. Praxair already supplies gases to SMIC’s semiconductor wafer fabs at the Zhangjiang High-Tech Park in Shanghai. Shanghai Chemical Industry Park Industrial Gases Company, a 50-50 joint venture between Praxair and Air Liquide, broke ground in Shanghai Chemical Industry Park in Caojing for an air separation plant and a hydrogen-carbon monoxide plant. The plants, expected to start up in late 2004, will support contracts awarded by BASF and other major chemical-company affi liates in China. Just after year-end, we announced a contract to supply oxygen and nitrogen to a $4.3-billion petrochemi- cal complex in Guangdong Province to be built by a joint venture between Shell Petrochemicals Company and China National Offshore Oil Corporation. Elsewhere in Asia, Tata Steel, India’s premier integrated steel producer, selected Praxair to build a state-of-the-art air separation plant with advanced control systems adjacent to Tata Steel’s works in northeast India. We also signed agreements with Samsung Electronics in Korea to supply two new manufacturing facilities: a 300 mm semiconductor wafer plant in Hwasung and a fl at-panel-display production complex in Tangjung.

MINDA HO has played a key role in establishing joint-venture agreements with a number of electronics, chemical, steel and other companies in china, helping to propel praxair to a leading position in that country. with praxair sales in china projected to grow substantially over the next five years, minda and the rest of the praxair china team will continue to be busy.

13 Hydrogen is another major growth platform for Praxair. Construction began on two new hydrogen plants that will supply BP and Motiva as well as other customers along Praxair’s U.S. Gulf Coast pipeline. These plants will help refi ning customers meet the forecasted demand for hydrogen in the U.S. generated by environmental regulations requiring lower levels of sulfur in gasoline and diesel fuels. The plants are scheduled to start up by mid-2004. Praxair also helps refi ning customers improve the effi ciency of their processes utilizing proprietary, sophisticated computer models to analyze refi nery hydrogen systems. During the year we also demonstrated an oxygen-based combustion application that signifi cantly increases the capacity of refi nery process heaters while reducing emissions and improving their effi ciency. The application can be retrofi tted without a refi nery shutdown or other disturbance of ongoing operations. Hydrogen plays a key role in the development of cleaner fuels, and, in response to fuel-cell manufacturers’ requests, Praxair launched a new high- purity grade of hydrogen for fuel-cell applications — the only one in the industry. For several years Praxair has worked with materials and device suppliers, end-use customers and government on the development of new, clean-fuel technologies, including fuel cells for electricity and mobile power generation. Sales in the home-healthcare market in North America were up 14% in 2003 as Praxair Healthcare Services pursued its strategy to expand this business by providing a smooth transition for clients moving from the hospital environment to home. During 2003 we concentrated on integrating previous home care acquisitions and established nine new operations within targeted geographic regions. We were also awarded national accreditation from the Joint Commission on the Accreditation of Healthcare Organizations, the leading standards-setting and accrediting body in the U.S. Healthcare sales to hospitals and healthcare networks also were up during the year. Praxair Healthcare Services secured new contracts or expanded existing agreements with leading group-purchasing organizations. Hospital members of these organizations have access to Praxair’s Medipure™ medical gases, the Grab ‘n Go® portable medical oxygen system, and services such as environmental monitoring, certifi cation testing, medical-gas evaluation, hood certifi cation, oxygen shut-down services and turnkey gas-delivery installations.

ACY DUHON is overseeing a major praxair construction project — one of two new hydrogen plants that will start supplying bp, motiva and other refinery customers on the u.s. gulf coast by mid-2004. refiners need the hydrogen to reduce sulfur in gasoline and diesel fuels to meet environmental standards.

14 Acy Duhon Plant Manager, Texas City

TEXAS CITY BY MID-2004, PRAXAIR’S GULF COAST HYDROGEN CAPACITY WILL INCREASE BY MORE THAN 30% TEXAS Shawn Fitzsimmons Healthcare Service Technician

OTTAWA RESPONSIVENESS TO CLIENT NEEDS HELPED HOME HEALTHCARE SALES IN NORTH AMERICA GROW 14% IN 2003 CANADA In a related market, a new subsidiary, Praxair Cryomag Services, Inc., was formed following the acquisition in late 2002 of Cryomag Services, Inc. The new business expands Praxair’s capabilities from being simply a supplier of cryogenic gases to a full-service partner in diagnostic magnetic resonance imaging (MRI) and nuclear magnetic resonance imaging operations, primarily in the healthcare and pharmaceutical industries. For example, a remote monitoring service was introduced that tracks key material levels, verifi es tempera- ture ranges and confi rms the proper operation of fundamental components 24 hours a day, seven days a week. This service reduces emergency calls and avoids costly system downtime. Our service contract with Hitachi Medical Systems America for installation follow-up services for more than 150 MRI systems was extended during the year, and new agreements to supply cryogenic gases and transfi lling services were signed with BioMagnetics Ltd. and MagnaServ, representing another 50 locations. In the electronics market, Praxair’s ongoing development of advanced materials and services helped to partially offset slower gases sales in the depressed semiconductor market. Working with a major semiconductor toolmaker, Praxair introduced a unique copper polishing slurry used in the production of the newest generation of chemical mechanical planarization tools. We also commissioned a patent-pending super-critical carbon dioxide cleaning process now being used in a leading semiconductor foundry, and began production of a new generation of ceramic-coated electrostatic chucks for electron-beam inspection of semiconductor chips. To meet customer demand for its advanced, 300mm physical-vapor-deposition products, Praxair Electronics completed a $19-million expansion program to upgrade and enhance its global manufacturing capabilities, technology development and customer-support infrastructure. The expansion of facilities in Toulouse, France, and Orangeburg, New York, increased production capacity by 25%. No other manufacturer offers the advanced testing capabilities available in Orangeburg where Praxair’s copper and tantalum 300mm targets can be evaluated under conditions similar to those in customer facilities. Praxair Electronics also introduced its UpTime™ gas storage and delivery system designed to lower the cost and increase the productivity of ion-implanter consumables compared to widely used alternative systems.

when the lights went out in most of northeastern u.s. and canada in august 2003, patients who relied on oxygen at home worried about running out. SHAWN FITZSIMMONS and his home-healthcare colleagues throughout the blackout area made sure that despite the crisis, their customers could breathe easy. “these people deserve a medal,” wrote one client, describing shawn’s 2:00 am delivery of oxygen cylinders to her home.

17 In the area of environmental technologies, Praxair is using its extensive combustion expertise to help coal-fi red utilities, which produce more than 50% of electric power in the U.S., to meet regulations requiring large reductions in nitrogen oxide emissions. This technology is a cost- effective, reliable means of signifi cantly reducing these emissions, which generate ground-based ozone and smog. The fi rst commercial installation of Praxair’s patent- pending burner technology was made at Northeast Generation Services Company’s plant in Massachusetts. Praxair’s patented CoJet® gas-injection technology offers steel producers signifi cant productivity improvements as well as lower emissions. In Brazil, new license agreements for its installation in basic-oxygen furnaces were signed with Sistema Usiminas and its subsidiary, Cosipa (Companhia Siderúrgica Paulista). In the U.S., CoJet systems were installed on two additional basic-oxygen furnaces at U.S. Steel Corporation’s Gary Works in Indiana. The installation of the technology in integrated mills is an extension of the technology’s success in more than 70 electric-arc-furnace (or “mini-mill”) steel mills worldwide. In 2003, Praxair signed the fi rst contract to provide the CoJet system to an electric-arc furnace in China, to be installed at Bao Steel, China’s largest steel manufacturer. Adding to its portfolio of environmental solutions, Praxair entered into a strategic marketing alliance with Integrated Environmental Technologies, LLC of Richland, Washington, to market IET’s waste-gasifi cation systems. This technology allows for the on-site treatment of wastes generated by chemical, refi nery, and electronics plants as well as other treatment opportunities. The plasma-gasifi cation technology produces synthesis gas, hydrogen and carbon monoxide. Under the agreement, Praxair will also market and distribute the technology in North and South America, Europe and Asia. In summary, Praxair’s operating performance in the tough business conditions of 2003 is a tribute to a skilled and creative global team of employees who applied a disciplined approach to growth and problem-solving. Their focus stayed riveted on the customer, offering world-class technology, process expertise, and innovative services. And, most important, they have positioned Praxair for accelerated growth and achievement as the economy recovers in the year ahead.

praxair technologies help customers increase the efficiency of their processes, lower their costs and improve their environmental performance. for example, BARBARA JORDAN and LARRY BOOL are helping to comm