SEGMENT INFORMATION

6 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

The Company’s primary business is the design and manufacture of arc welding and cutting products, manufacturing a broad line of arc welding equipment, consumable welding products and other welding and cutting products.  The Company also has a leading global position in the brazing and soldering alloys market.  The Company has aligned its business units into five operating segments to enhance the utilization of the Company’s worldwide resources and global end user and sourcing initiatives.  The operating segments consist of North America Welding, Europe Welding, Asia Pacific Welding, South America Welding and The Harris Products Group.  The North America Welding segment includes welding operations in the United States, Canada and Mexico.  The Europe Welding segment includes welding operations in Europe, Russia, Africa and the Middle East.  The other two welding segments include welding operations in Asia Pacific and South America, respectively.  The fifth segment, The Harris Products Group, includes the Company’s global cutting, soldering and brazing businesses as well as the retail business in the United States.

Segment performance is measured and resources are allocated based on a number of factors, the primary profit measure being earnings before interest and income taxes (“EBIT”), as adjusted.  Segment EBIT is adjusted for special items as determined by management such as the impact of rationalization activities, certain asset impairment charges and gains or losses on disposals of assets.

Financial information for the reportable segments follows:

	North America Welding			Europe Welding		Asia Pacific Welding			South America Welding			The Harris Products Group		Corporate / Eliminations			Consolidated
Three Months Ended June 30, 2014
Net sales	$	429,490		$	115,574	$	66,997		$	39,051		$	77,419	$	—		$	728,531
Inter-segment sales	33,360			5,494		3,600			35			2,262		(44,751		)	—
Total	$	462,850		$	121,068	$	70,597		$	39,086		$	79,681	$	(44,751	)	$	728,531
EBIT, as adjusted	$	91,195		$	14,899	$	365		$	4,995		$	7,178	$	600		$	119,232
Special items (gain) charge	(21		)	965		(108		)	3,468			—		—			4,304
EBIT	$	91,216		$	13,934	$	473		$	1,527		$	7,178	$	600		$	114,928
Interest income																	924
Interest expense																	(986		)
Income before income taxes																	$	114,866
Three Months Ended June 30, 2013
Net sales	$	419,069		$	108,661	$	69,239		$	44,503		$	85,960	$	—		$	727,432
Inter-segment sales	35,529			4,330		4,374			51			2,674		(46,958		)	—
Total	$	454,598		$	112,991	$	73,613		$	44,554		$	88,634	$	(46,958	)	$	727,432
EBIT, as adjusted	$	82,777		$	9,532	$	653		$	11,065		$	7,343	$	(1,538	)	$	109,832
Special items (gain) charge	266			75		510			2,538			—		—			3,389
EBIT	$	82,511		$	9,457	$	143		$	8,527		$	7,343	$	(1,538	)	$	106,443
Interest income																	890
Interest expense																	(799		)
Income before income taxes																	$	106,534
Six Months Ended June 30, 2014
Net sales	$	831,396		$	220,980	$	128,283		$	83,044		$	149,890	$	—		$	1,413,593
Inter-segment sales	66,303			11,354		8,049			64			4,380		(90,150		)	—
Total	$	897,699		$	232,334	$	136,332		$	83,108		$	154,270	$	(90,150	)	$	1,413,593
EBIT, as adjusted	$	162,559		$	24,191	$	(275	)	$	16,760		$	13,236	$	3,491		$	219,962
Special items (gain) charge	(68		)	1,004		(117		)	21,133			—		—			21,952
EBIT	$	162,627		$	23,187	$	(158	)	$	(4,373	)	$	13,236	$	3,491		$	198,010
Interest income																	1,838
Interest expense																	(2,556		)
Income before income taxes																	$	197,292
Total assets	$	1,150,833		$	418,283	$	319,965		$	149,430		$	172,781	$	(66,453	)	$	2,144,839
Six months ended June 30, 2013
Net sales	$	838,623		$	219,152	$	139,278		$	80,877		$	168,075	$	—		$	1,446,005
Inter-segment sales	64,514			8,609		8,758			71			4,898		(86,850		)	—
Total	$	903,137		$	227,761	$	148,036		$	80,948		$	172,973	$	(86,850	)	$	1,446,005
EBIT, as adjusted	$	159,437		$	20,233	$	2,946		$	16,177		$	14,494	$	(2,141	)	$	211,146
Special items (gain) charge	1,126			69		707			12,198			—		—			14,100
EBIT	$	158,311		$	20,164	$	2,239		$	3,979		$	14,494	$	(2,141	)	$	197,046
Interest income																	1,916
Interest expense																	(1,749		)
Income before income taxes																	$	197,213
Total assets	$	1,000,724		$	446,142	$	339,657		$	124,841		$	187,475	$	(38,722	)	$	2,060,117

In the second quarter 2014, special items include net gains of $21 and $108 in the North America Welding and Asia Pacific Welding segments, respectively, and a net charge of $965 in the Europe Welding segment primarily related to employee severance and other costs associated with the consolidation of manufacturing operations. The South America Welding segment special items represent Venezuelan foreign exchange remeasurement losses of $3,468, related to the adoption of a new foreign exchange mechanism in the first quarter.

In the second quarter 2013, special items include net charges of $266, $75 and $510 for rationalization actions in the North America Welding, Europe Welding and Asia Pacific Welding segments, respectively, primarily related to employee severance and other costs associated with the consolidation of manufacturing operations. The South America Welding segment special items represent charges of $2,538, relating to the devaluation of the Venezuelan currency.

In the six months ended June 30, 2014, special items include net gains of $68 and $117 in the North America Welding and Asia Pacific Welding segments, respectively, and a net charge of $1,004 in the Europe Welding segment primarily related to employee severance and other costs associated with the consolidation of manufacturing operations.  The South America Welding segment special items represent Venezuelan foreign exchange remeasurement losses of $21,133, related to the adoption of a new foreign exchange mechanism in the first quarter.

In the six months ended June 30, 2013, special items include net charges of $1,126, $69 and $707 in the North America Welding, Europe Welding and Asia Pacific Welding segments, respectively, primarily related to employee severance and other costs associated with the consolidation of manufacturing operations. The South America Welding segment special items represent charges of $12,198, relating to the devaluation of the Venezuelan currency.