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SEGMENT INFORMATION | 12 Months Ended
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Dec. 31, 2012
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. The accounting principles applied at the operating segment level are generally the same as those applied at the consolidated financial statement level with the exception of LIFO. Segment assets include inventories measured on a FIFO basis while consolidated inventories are reported on a LIFO basis. Segment and consolidated income before interest and income taxes are reported on a LIFO basis. At December 31, 2012, 2011 and 2010, approximately 34%, 31% and 30%, respectively, of total inventories were valued using the LIFO method. LIFO is used for certain domestic inventories included in the North America Welding segment. Inter-segment sales are recorded at agreed upon prices that approximate arm's length prices and are eliminated in consolidation. Corporate-level expenses are allocated to the operating segments on a basis that management believes to be reasonable. Certain corporate-level expenses may not be allocated to the operating segments and are reported as Corporate/Eliminations. 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
For the Year Ended December 31, 2012 |  |  |  |  |  |  |  |  |  |  |  |  |
Net sales | $ | 1,580,818 |  |  | $ | 452,227 |  |  | $ | 324,482 |  |  | $ | 161,483 |  |  | $ | 334,357 |  |  | $ | — |  |  | $ | 2,853,367 |
Inter-segment sales | 131,062 |  |  | 16,048 |  |  | 14,829 |  |  | 38 |  |  | 8,549 |  |  | (170,526 | ) |  | $ | — |
Total | $ | 1,711,880 |  |  | $ | 468,275 |  |  | $ | 339,311 |  |  | $ | 161,521 |  |  | $ | 342,906 |  |  | $ | (170,526 | ) |  | $ | 2,853,367 |
EBIT, as adjusted | $ | 293,070 |  |  | $ | 37,299 |  |  | $ | 7,247 |  |  | $ | 18,301 |  |  | $ | 29,477 |  |  | $ | (4,886 | ) |  | $ | 380,508 |
Special items charge (gain) | 827 |  |  | 3,534 |  |  | 4,993 |  |  | 1,381 |  |  | — |  |  | — |  |  | $ | 10,735 |
EBIT | $ | 292,243 |  |  | $ | 33,765 |  |  | $ | 2,254 |  |  | $ | 16,920 |  |  | $ | 29,477 |  |  | $ | (4,886 | ) |  | $ | 369,773 |
Interest income |  |  |  |  |  |  |  |  |  |  |  |  | 3,988 |
Interest expense |  |  |  |  |  |  |  |  |  |  |  |  | (4,191 | )
Income before income taxes |  |  |  |  |  |  |  |  |  |  |  |  | $ | 369,570 |
Total assets | $ | 980,093 |  |  | $ | 451,654 |  |  | $ | 350,189 |  |  | $ | 134,650 |  |  | $ | 195,881 |  |  | $ | (22,604 | ) |  | $ | 2,089,863 |
Equity investments in affiliates | — |  |  | 21,798 |  |  | — |  |  | 2,808 |  |  | — |  |  | — |  |  | $ | 24,606 |
Capital expenditures | 36,834 |  |  | 5,372 |  |  | 8,833 |  |  | 899 |  |  | 831 |  |  | (54 | ) |  | $ | 52,715 |
Depreciation and amortization | 33,479 |  |  | 11,008 |  |  | 15,102 |  |  | 1,878 |  |  | 3,934 |  |  | (67 | ) |  | $ | 65,334 |
For the Year Ended December 31, 2011 |  |  |  |  |  |  |  |  |  |  |  |  |
Net sales | $ | 1,309,499 |  |  | $ | 508,692 |  |  | $ | 376,276 |  |  | $ | 156,684 |  |  | $ | 343,458 |  |  | $ | — |  |  | $ | 2,694,609 |
Inter-segment sales | 136,314 |  |  | 17,422 |  |  | 15,614 |  |  | 494 |  |  | 8,496 |  |  | (178,340 | ) |  | $ | — |
Total | $ | 1,445,813 |  |  | $ | 526,114 |  |  | $ | 391,890 |  |  | $ | 157,178 |  |  | $ | 351,954 |  |  | $ | (178,340 | ) |  | $ | 2,694,609 |
EBIT, as adjusted | $ | 227,924 |  |  | $ | 36,171 |  |  | $ | 2,629 |  |  | $ | 12,895 |  |  | $ | 25,151 |  |  | $ | 426 |  |  | $ | 305,196 |
Special items charge (gain) | — |  |  | 392 |  |  | (110 | ) |  | — |  |  | — |  |  | — |  |  | $ | 282 |
EBIT | $ | 227,924 |  |  | $ | 35,779 |  |  | $ | 2,739 |  |  | $ | 12,895 |  |  | $ | 25,151 |  |  | $ | 426 |  |  | $ | 304,914 |
Interest income |  |  |  |  |  |  |  |  |  |  |  |  | 3,121 |
Interest expense |  |  |  |  |  |  |  |  |  |  |  |  | (6,704 | )
Income before income taxes |  |  |  |  |  |  |  |  |  |  |  |  | $ | 301,331 |
Total assets | $ | 771,315 |  |  | $ | 436,327 |  |  | $ | 380,282 |  |  | $ | 110,781 |  |  | $ | 181,916 |  |  | $ | 96,155 |  |  | $ | 1,976,776 |
Equity investments in affiliates | — |  |  | 20,500 |  |  | — |  |  | 4,118 |  |  | — |  |  | — |  |  | $ | 24,618 |
Capital expenditures | 31,826 |  |  | 8,566 |  |  | 21,498 |  |  | 2,314 |  |  | 1,792 |  |  | (183 | ) |  | $ | 65,813 |
Depreciation and amortization | 29,237 |  |  | 11,736 |  |  | 14,663 |  |  | 2,033 |  |  | 4,714 |  |  | (332 | ) |  | $ | 62,051 |
For the Year Ended December 31, 2010 |  |  |  |  |  |  |  |  |  |  |  |  |
Net sales | $ | 1,013,193 |  |  | $ | 359,925 |  |  | $ | 324,092 |  |  | $ | 117,419 |  |  | $ | 255,543 |  |  | $ | — |  |  | $ | 2,070,172 |
Inter-segment sales | 108,849 |  |  | 13,330 |  |  | 12,546 |  |  | 1,216 |  |  | 6,641 |  |  | (142,582 | ) |  | $ | — |
Total | $ | 1,122,042 |  |  | $ | 373,255 |  |  | $ | 336,638 |  |  | $ | 118,635 |  |  | $ | 262,184 |  |  | $ | (142,582 | ) |  | $ | 2,070,172 |
EBIT, as adjusted | $ | 162,192 |  |  | $ | 17,023 |  |  | $ | 1,752 |  |  | $ | 7,554 |  |  | $ | 12,311 |  |  | $ | (6,675 | ) |  | $ | 194,157 |
Special items charge (gain) | — |  |  | 2,486 |  |  | (3,741 | ) |  | 3,123 |  |  | 871 |  |  | — |  |  | $ | 2,739 |
EBIT | $ | 162,192 |  |  | $ | 14,537 |  |  | $ | 5,493 |  |  | $ | 4,431 |  |  | $ | 11,440 |  |  | $ | (6,675 | ) |  | $ | 191,418 |
Interest income |  |  |  |  |  |  |  |  |  |  |  |  | 2,381 |
Interest expense |  |  |  |  |  |  |  |  |  |  |  |  | (6,691 | )
Income before income taxes |  |  |  |  |  |  |  |  |  |  |  |  | $ | 187,108 |
Total assets | $ | 611,725 |  |  | $ | 413,789 |  |  | $ | 350,975 |  |  | $ | 94,836 |  |  | $ | 193,474 |  |  | $ | 118,989 |  |  | $ | 1,783,788 |
Equity investments in affiliates | — |  |  | 19,194 |  |  | — |  |  | 3,715 |  |  | — |  |  | — |  |  | $ | 22,909 |
Capital expenditures | 25,746 |  |  | 10,373 |  |  | 22,973 |  |  | 3,573 |  |  | 884 |  |  | (2,984 | ) |  | $ | 60,565 |
Depreciation and amortization | 27,652 |  |  | 9,527 |  |  | 13,542 |  |  | 1,564 |  |  | 5,012 |  |  | 60 |  |  | $ | 57,357 |
In 2012, special items include net charges of $827, $3,637 and $3,151 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 Europe Welding segment special items also include a gain of $103 on the sale of assets. The Asia Pacific Welding segment special items also include a charge of $1,842 related to asset impairments. The South America Welding segment special item represents a charge of $1,381 related to a change in Venezuelan labor law, which provides for increased employee severance obligations. In 2011, special items include net charges of $188 and $93 for rationalization actions in the Europe Welding and Asia Pacific Welding segments, respectively, primarily related to employee severance and other costs associated with the consolidation of manufacturing operations. The Europe Welding and Asia Pacific Welding segments special items also include a loss of $204 and a gain of $203, respectively, on the sale of assets at rationalized operations. In 2010, special items include a charge of $1,990 for rationalization actions and $496 in related asset impairment charges for the Europe Welding segment. The Asia Pacific Welding segment includes a gain of $4,555 related to the disposal of assets, a charge of $427 for rationalization actions and $387 in asset impairment charges. The South America Welding segment includes a net charge of $3,123 related to the change in functional currency and devaluation of the Venezuelan currency. The Harris Products Group segment includes a net charge of $871 related to environmental costs associated with the sale of property at a rationalized operation. Export sales (excluding inter-company sales) from the United States were $268,331 in 2012, $242,380 in 2011 and $197,057 in 2010. No individual customer comprised more than 10% of the Company's total revenues for any of the three years ended December 31, 2012. The geographic split of the Company's net sales, based on the location of the customer, and property, plant and equipment were as follows:
|  | Year Ended December 31,
|  | 2012 |  | 2011 |  | 2010
Net sales: |  |  |  |  |  |
United States |  | $ | 1,283,066 |  |  | $ | 1,092,838 |  |  | $ | 825,371 |
China |  | 229,996 |  |  | 286,121 |  |  | 250,981 |
Other foreign countries |  | 1,340,305 |  |  | 1,315,650 |  |  | 993,820 |
Total |  | $ | 2,853,367 |  |  | $ | 2,694,609 |  |  | $ | 2,070,172 |
|  | December 31,
|  | 2012 |  | 2011 |  | 2010
Property, plant and equipment, net: |  |  |  |  |  |
United States |  | $ | 170,831 |  |  | $ | 149,637 |  |  | $ | 149,185 |
China |  | 92,744 |  |  | 96,374 |  |  | 87,722 |
Other foreign countries |  | 223,050 |  |  | 224,801 |  |  | 242,084 |
Eliminations |  | (389 | ) |  | (361 | ) |  | (425 | )
Total |  | $ | 486,236 |  |  | $ | 470,451 |  |  | $ | 478,566 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 29 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8864-108599 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8906-108599 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8933-108599 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8984-108599 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8380-108599 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8538-108599 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9054-108599 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8595-108599 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 131 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8981-108599 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 33 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8971-108599 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8844-108599 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8924-108599 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9031-108599 Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9038-108599 + Details
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