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SEGMENT INFORMATION
 12 Months Ended
Dec. 31, 2015
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. As of December 31, 2015, the Company's business units were aligned into five operating segments. The operating segments consists of North America Welding, Europe Welding, Asia Pacific Welding, South America Welding and The Harris Products Group. The North America Welding segment primarily 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 Asia Pacific Welding segment primarily includes welding operations in China and Australia. The South America Welding segment primarily includes welding operations in Brazil, Colombia and Venezuela. The Harris Products Group includes the Company's global cutting, soldering and brazing businesses as well as the retail business in the United States.
During the first quarter of 2016, the Company realigned its organizational and leadership structure. The new structure will allow for further integration of operational and product development processes across regions and support growth strategies. In accordance with this organizational change, beginning with quarterly reporting for the three months ended March 31, 2016, the Company will report three operating segments as follows: Americas Welding, International Welding, and The Harris Products Group.
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. EBIT is defined as Operating income plus Equity earnings in affiliates and Other income. 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 include inventories reported on a LIFO basis. Segment and consolidated income before interest and income taxes include the effect of inventories reported on a LIFO basis. At December 31, 2015, 2014 and 2013, approximately 40%, 40% and 38%, respectively, of total inventories were valued using the LIFO method. LIFO is used for certain domestic inventories included in North America Welding. 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.
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, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
Net sales
$
1,610,357

 
$
336,824

 
$
186,615

 
$
138,014

 
$
263,981

 
$
—

 
$
2,535,791

Inter-segment sales
100,770

 
15,922

 
10,510

 
174

 
9,312

 
(136,688
)
 
$
—

Total
$
1,711,127

 
$
352,746

 
$
197,125

 
$
138,188

 
$
273,293

 
$
(136,688
)
 
$
2,535,791

EBIT, as adjusted
$
306,746

 
$
31,317

 
$
7,392

 
$
5,569

 
$
27,882

 
$
(99
)
 
$
378,807

Special items charge (gain)
155,757

 
1,507

 
5,432

 
27,214

 
—

 
—

 
$
189,910

EBIT
$
150,989

 
$
29,810

 
$
1,960

 
$
(21,645
)
 
$
27,882

 
$
(99
)
 
$
188,897

Interest income
 
 
 
 
 
 
 
 
 
 
 
 
2,714

Interest expense
 
 
 
 
 
 
 
 
 
 
 
 
(21,824
)
Income before income taxes
 
 
 
 
 
 
 
 
 
 
 
 
$
169,787

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
$
1,101,056

 
$
298,825

 
$
239,382

 
$
82,575

 
$
143,905

 
$
(81,572
)
 
$
1,784,171

Equity investments in affiliates
—

 
23,450

 
—

 
3,791

 
—

 
—

 
$
27,241

Capital expenditures
31,578

 
6,508

 
5,480

 
4,214

 
2,727

 
—

 
$
50,507

Depreciation and amortization
44,344

 
8,296

 
7,026

 
1,765

 
2,596

 
(20
)
 
$
64,007

For the Year Ended
   December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
Net sales
$
1,700,924

 
$
425,775

 
$
243,800

 
$
148,595

 
$
294,230

 
$
—

 
$
2,813,324

Inter-segment sales
124,732

 
19,586

 
14,820

 
144

 
8,210

 
(167,492
)
 
$
—

Total
$
1,825,656

 
$
445,361

 
$
258,620

 
$
148,739

 
$
302,440

 
$
(167,492
)
 
$
2,813,324

EBIT, as adjusted
$
335,465

 
$
48,822

 
$
1,321

 
$
15,953

 
$
28,563

 
$
4,216

 
$
434,340

Special items charge (gain)
(68
)
 
904

 
28,635

 
21,715

 
—

 
—

 
$
51,186

EBIT
$
335,533

 
$
47,918

 
$
(27,314
)
 
$
(5,762
)
 
$
28,563

 
$
4,216

 
$
383,154

Interest income
 
 
 
 
 
 
 
 
 
 
 
 
3,093

Interest expense
 
 
 
 
 
 
 
 
 
 
 
 
(10,434
)
Income before income taxes
 
 
 
 
 
 
 
 
 
 
 
 
$
375,813

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
$
1,111,065

 
$
359,337

 
$
284,573

 
$
138,114

 
$
147,990

 
$
(101,864
)
 
$
1,939,215

Equity investments in affiliates
—

 
23,902

 
—

 
3,579

 
—

 
—

 
$
27,481

Capital expenditures
51,691

 
5,619

 
3,959

 
10,896

 
825

 
—

 
$
72,990

Depreciation and amortization
43,659

 
10,823

 
9,799

 
2,085

 
3,512

 
(271
)
 
$
69,607

For the Year Ended
   December 31, 2013
 
 
 
 
 
 
 
 
 
 
 
 
 
Net sales
$
1,652,769

 
$
429,548

 
$
266,282

 
$
195,895

 
$
308,177

 
$
—

 
$
2,852,671

Inter-segment sales
127,254

 
19,911

 
14,906

 
233

 
9,605

 
(171,909
)
 
$
—

Total
$
1,780,023

 
$
449,459

 
$
281,188

 
$
196,128

 
$
317,782

 
$
(171,909
)
 
$
2,852,671

EBIT, as adjusted
$
318,507

 
$
36,247

 
$
1,815

 
$
57,306

 
$
27,826

 
$
(4,350
)
 
$
437,351

Special items charge (gain)
1,052

 
2,045

 
6,071

 
12,198

 
—

 
—

 
$
21,366

EBIT
$
317,455

 
$
34,202

 
$
(4,256
)
 
$
45,108

 
$
27,826

 
$
(4,350
)
 
$
415,985

Interest income
 
 
 
 
 
 
 
 
 
 
 
 
3,320

Interest expense
 
 
 
 
 
 
 
 
 
 
 
 
(2,864
)
Income before income taxes
 
 
 
 
 
 
 
 
 
 
 
 
$
416,441

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
$
1,048,412

 
$
403,094

 
$
325,656

 
$
169,027

 
$
162,496

 
$
43,182

 
$
2,151,867

Equity investments in affiliates
—

 
23,315

 
—

 
3,303

 
—

 
—

 
$
26,618

Capital expenditures
41,181

 
10,305

 
2,073

 
20,840

 
3,931

 
(2,315
)
 
$
76,015

Depreciation and amortization
39,086

 
10,933

 
13,559

 
1,893

 
3,636

 
(224
)
 
$
68,883




In 2015, special items in North America Welding, Europe Welding and Asia Pacific Welding include rationalization charges primarily related to employee severance and other related costs. North America Welding special items also include charges of $3,417 related to the impairment of long-lived assets and $6,315 related to the impairment to the carrying value of goodwill. Special items in 2015 also include pension settlement charges of $142,738, primarily related to the purchase of a group annuity contract. South America Welding special items reflect Venezuelan foreign exchange remeasurement losses related to the adoption of a new foreign exchange mechanism.
In 2014, special items include net rationalization charges primarily related to employee severance and other costs associated with the consolidation of manufacturing operations. Asia Pacific Welding special items also include net charges of $32,742 related to the impairment of long-lived assets partially offset by gains of $3,293 related to the sale of assets. South America Welding special items also include Venezuelan foreign exchange remeasurement losses of $21,133 related to the adoption of a new foreign exchange mechanism.
In 2013, special items in North America Welding, Europe Welding and Asia Pacific Welding reflect rationalization charges primarily related to employee severance and other costs associated with the consolidation of manufacturing operations. Asia Pacific Welding special items also include charges of $4,444 related to the impairment of long-lived assets and a charge of $705 related to a loss on the sale of land. South America Welding special items represent a charge related to the devaluation of the Venezuelan foreign currency.
Export sales (excluding inter-company sales) from the United States were $175,049 in 2015, $210,325 in 2014 and $260,195 in 2013. No individual customer comprised more than 10% of the Company's total revenues for any of the three years ended December 31, 2015.
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,
 
 
2015
 
2014
 
2013
Net sales:
 
 
 
 
 
 
United States
 
$
1,387,882

 
$
1,417,750

 
$
1,350,309

China
 
137,101

 
190,035

 
219,490

Other foreign countries
 
1,010,808

 
1,205,539

 
1,282,872

Total
 
$
2,535,791

 
$
2,813,324

 
$
2,852,671

 
 
December 31,
 
 
2015
 
2014
 
2013
Property, plant and equipment, net:
 
 
 
 
 
 
United States
 
$
173,974

 
$
171,746

 
$
162,357

China
 
53,673

 
57,783

 
83,416

Other foreign countries
 
184,045

 
209,640

 
238,685

Eliminations
 
(369
)
 
(423
)
 
(453
)
Total
 
$
411,323

 
$
438,746

 
$
484,005