RATIONALIZATION AND ASSET IMPAIRMENTS

The Company recorded net rationalization charges of $29,887 for the nine months ended September 30, 2014. The net charges include $1,260 primarily related to employee severance and $32,557 in asset impairments, offset by gains of $3,930 related to the sale and disposal of assets. A description of each restructuring plan and the related costs follows:

North America Welding Plans:

During 2012, the Company initiated various rationalization plans within the North America Welding segment. Plans for the segment include consolidating its Oceanside, California operations and its Reno, Nevada operations to another facility in Reno, Nevada and consolidating its Baltimore, Maryland manufacturing operations into its current manufacturing operations in Cleveland, Ohio. During the nine months ended September 30, 2014, the Company recorded credits of $68 related to these actions. The Company does not expect further costs associated with these actions as they were substantially completed and paid at September 30, 2014.

Europe Welding Plans:

During 2014, the Company initiated a rationalization plan within the Europe Welding segment. The plan includes headcount restructuring to better align the cost structure with current economic conditions and operating needs. During the nine months ended September 30, 2014, the Company recorded charges of $686, which represent employee severance costs. At September 30, 2014, a liability relating to these actions of $356 was recognized in Other current liabilities. Additional charges related to the completion of this plan are expected to be immaterial.

During 2013, the Company initiated a rationalization plan within the Europe Welding segment to consolidate certain consumable manufacturing operations. During the nine months ended September 30, 2014, the Company recorded net charges of $335, which primarily represents employee severance and other related costs. At September 30, 2014, a liability relating to these actions of $44 was recognized in Other current liabilities. Additional charges related to the completion of this plan are expected to be immaterial.

During 2012, the Company initiated various rationalization plans within the Europe Welding segment. Plans for the segment include the consolidation of manufacturing facilities in Russia, relocation of its Italian machine manufacturing operations to current facilities in Poland and headcount restructuring at various other manufacturing operations within the segment to better align the cost structure and capacity requirements with current economic needs and conditions. During the nine months ended September 30, 2014, the Company recorded net credits of $98 related to these activities. At September 30, 2014, a liability relating to these actions of $111 was recognized in Other current liabilities, which will be substantially paid in 2014. Additional charges related to the completion of this plan are expected to be immaterial.

Asia Pacific Welding Plans:

During the third quarter of 2014, the Company identified assets within the segment for planned divestiture. In anticipation of the divestiture, the Company reviewed the carrying values and future cash flows of certain long-lived assets and indefinite-lived intangible assets for potential impairment. The Company determined that for certain assets, including the planned divestiture, the carrying values of the assets exceeded the fair values resulting in non-cash impairment charges of $32,448 recorded in Rationalization and asset impairment charges. This result was considered a possible indication of goodwill impairment. As such, the Company performed a goodwill impairment test for the Asia Pacific reporting unit ahead of the annual impairment tests, which resulted in no impairment to the carrying value of goodwill. As of September 30, 2014, the assets identified for divestiture were classified as held for sale. As of September 30, 2014, $36,331 and $13,236 of assets and liabilities held for sale were recorded in Other current assets and Other current liabilities, respectively.

During 2012, the Company initiated various rationalization plans within the Asia Pacific Welding segment. Plans for the segment include the rationalization of its Australian manufacturing operations and headcount restructuring at various other manufacturing operations within the segment to better align the cost structure and capacity requirements with current economic needs and conditions. During the nine months ended September 30, 2014, the Company recorded net gains of $3,982, which primarily represent a gain of $3,911 on the sale of real estate, a net reversal of $184 of previously accrued costs and $125 in asset impairment charges. The Company does not expect further costs associated with these actions as they were substantially completed and paid at September 30, 2014.

South America Welding Plans:

During 2014, the Company initiated a rationalization plan within the South America Welding segment to restructure headcount to better align the cost structure with current economic conditions and operating needs. During the nine months ended September 30, 2014, the Company recorded net charges of $582, which primarily represents employee severance and other related costs. The Company does not expect further costs associated with these actions as they were substantially completed and paid at September 30, 2014.

The Company continues evaluating its cost structure and additional rationalization actions may result in charges in future periods.

The following tables summarize the activity related to the rationalization liabilities by segment for the nine months ended September 30, 2014:



	North America Welding			Europe Welding			Asia Pacific Welding			South America Welding			Consolidated
Balance, December 31, 2013	$	466		$	2,435		$	375		$	—		$	3,276
Payments and other adjustments	(398		)	(2,854		)	(191		)	(582		)	(4,025		)
Charged (credited) to expense	(68		)	930			(184		)	582			1,260
Balance, September 30, 2014	$	—		$	511		$	—		$	—		$	511