RATIONALIZATION AND ASSET IMPAIRMENTS

The Company recorded rationalization charges of $19,524 for the nine months ended September 30, 2015. The net charges include $13,434 primarily related to employee severance and $6,090 in non-cash charges primarily related to asset impairments. A description of each restructuring plan and the related costs follows:

North America Welding Plans:

During 2015, the Company initiated a rationalization plan within North America Welding that includes a voluntary separation incentive program covering certain U.S.-based employees. The Company recorded rationalization charges of $3,341 in the nine months ended September 30, 2015 related to the program, which was recognized in Other current liabilities at September 30, 2015. The Company expects the plan liabilities will be substantially paid during 2015.

Due to the presence of impairment indicators during the third quarter of 2015, the Company performed an impairment test of certain long-lived assets and goodwill of a business unit, resulting in a $9,732 non-cash impairment charge. The Company determined that for certain long-lived assets of the business unit the carrying value of the assets exceeded the fair value, resulting in an impairment. This result was considered a possible indication of goodwill impairment therefore the Company performed an interim goodwill impairment test, using a combination of income and market valuation approaches for the related business unit, resulting in an impairment to the carrying value of goodwill.

Europe Welding Plans:

During 2015, the Company initiated a rationalization plan within Europe Welding. The plan includes headcount restructuring to better align the cost structures with economic conditions and operating needs. During the nine months ended September 30, 2015, the Company recorded charges relating to the Europe Welding plans of $1,507, which represent employee severance and other related costs. Additional charges related to the completion of these plans are expected to be immaterial. At September 30, 2015, liabilities relating to the Europe Welding plans of $165 were recognized in Other current liabilities, which will be substantially paid during 2015.

Asia Pacific Welding Plans:

During the third quarter of 2014, the Company identified net assets within the segment for planned divestiture which were classified as held for sale. During the third quarter of 2015, the Company initiated a rationalization plan to restructure headcount and better align the cost structures with economic conditions and operating needs. As part of this plan, the net assets held for sale were reclassified as held for use as the sale was no longer deemed probable. During the nine months ended September 30, 2015, the Company recorded net charges relating to these actions of $4,944, which primarily represent employee severance and other related costs. The Company expects additional charges up to $400 related to the completion of these actions. At September 30, 2015, liabilities relating to the Asia Pacific Welding plan of $7,898 were recognized in Other current liabilities, which will be substantially paid during 2016.

The Company believes the rationalization actions will positively impact future results of operations and will not have a material effect on liquidity and sources and uses of capital. 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, 2015:



	North America Welding		Europe Welding			Asia Pacific Welding			Consolidated
Balance, December 31, 2014	$	—	$	305		$	—		$	305
Payments and other adjustments	—		(1,647		)	(688		)	(2,335		)
Charged to expense	3,341		1,507			8,586			13,434
Balance, September 30, 2015	$	3,341	$	165		$	7,898		$	11,404