Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Jan. 31, 2018 | Jun. 30, 2017 | |
Document and Entity Information | |||
Entity Registrant Name | LINCOLN ELECTRIC HOLDINGS INC | ||
Entity Central Index Key | 59,527 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 5,917,150,492 | ||
Entity Common Stock, Shares Outstanding | 65,644,512 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current Assets | ||
Cash and cash equivalents | $ 326,701 | $ 379,179 |
Accounts receivable (less allowance for doubtful accounts of $15,943 in 2017; $7,768 in 2016) | 395,279 | 273,993 |
Inventories | ||
Raw materials | 97,577 | 76,811 |
Work-in-process | 50,695 | 40,556 |
Finished goods | 200,395 | 138,039 |
Inventories | 348,667 | 255,406 |
Marketable Securities | 179,125 | 38,922 |
Other current assets | 123,836 | 96,213 |
Total Current Assets | 1,373,608 | 1,043,713 |
Property, Plant and Equipment | ||
Property, Plant and Equipment, Net | 477,031 | 372,377 |
Other Assets | ||
Intangibles, net | 127,452 | 130,088 |
Goodwill | 234,582 | 231,919 |
Deferred income taxes | 15,937 | 8,424 |
Other non-current assets | 177,937 | 156,916 |
TOTAL ASSETS | 2,406,547 | 1,943,437 |
Current Liabilities | ||
Amounts due banks | 2,020 | 1,758 |
Trade accounts payable | 269,763 | 176,757 |
Accrued employee compensation and benefits | 91,902 | 67,431 |
Dividends payable | 25,608 | 22,986 |
Customer Advances | 19,683 | 21,238 |
Other current liabilities | 119,655 | 97,806 |
Current portion of long-term debt | 111 | 131 |
Total Current Liabilities | 528,742 | 388,107 |
Long-Term Liabilities | ||
Long-term debt, less current portion | 704,136 | 703,704 |
Deferred income taxes | 40,716 | 41,617 |
Other long-term liabilities | 200,500 | 97,803 |
Liabilities | 1,474,094 | 1,231,231 |
Shareholders' Equity | ||
Preferred shares, without par value – at stated capital amount; authorized – 5,000,000 shares; issued and outstanding – none | 0 | 0 |
Common shares, without par value – at stated capital amount; authorized – 240,000,000 shares; issued – 98,581,434 shares in 2017 and 2016; outstanding – 65,662,546 shares in 2017 and 65,674,754 shares in 2016 | 9,858 | 9,858 |
Additional paid-in capital | 334,309 | 309,417 |
Retained earnings | 2,388,219 | 2,236,071 |
Accumulated other comprehensive loss | (247,186) | (329,037) |
Treasury shares, at cost – 32,918,888 shares in 2017 and 32,906,680 shares in 2016 | (1,553,563) | (1,514,832) |
Total Shareholders' Equity | 931,637 | 711,477 |
Noncontrolling interests | 816 | 729 |
Total Equity | 932,453 | 712,206 |
TOTAL LIABILITIES AND EQUITY | $ 2,406,547 | $ 1,943,437 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts (in dollars) | $ 15,943 | $ 7,768 |
Preferred shares, authorized | 5,000,000 | 5,000,000 |
Preferred shares, issued | 0 | 0 |
Preferred shares, outstanding | 0 | 0 |
Common shares, authorized | 240,000,000 | 240,000,000 |
Common shares, issued | 98,581,434 | 98,581,434 |
Common shares, outstanding | 65,662,546 | 65,674,754 |
Treasury shares | 32,918,888 | 32,906,680 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Net sales | $ 2,624,431 | $ 2,274,614 | $ 2,535,791 |
Cost of goods sold | 1,744,105 | 1,485,316 | 1,694,647 |
Gross profit | 880,326 | 789,298 | 841,144 |
Selling, general & administrative expenses | 537,525 | 466,676 | 496,748 |
Rationalization and asset impairment charges (Notes 4 and 6) | 6,590 | 0 | 19,958 |
Pension settlement (charges) (Note 11) | (8,150) | 0 | (142,738) |
Loss on deconsolidation of Venezuelan subsidiary (Note 1) | 0 | 34,348 | 0 |
Bargain purchase gain (Note 3) | 49,650 | 0 | 0 |
Operating income | 377,711 | 288,274 | 181,700 |
Other income (expense): | |||
Interest income | 4,788 | 2,092 | 2,714 |
Equity earnings in affiliates | 2,742 | 2,928 | 3,015 |
Other income | 5,215 | 3,173 | 4,182 |
Interest expense | (24,220) | (19,079) | (21,824) |
Total other income (expense) | (11,475) | (10,886) | (11,913) |
Income before income taxes | 366,236 | 277,388 | 169,787 |
Income taxes (Note 12) | 118,761 | 79,015 | 42,375 |
Net income including non-controlling interests | 247,475 | 198,373 | 127,412 |
Non-controlling interests in subsidiaries' loss | (28) | (26) | (66) |
Net income | $ 247,503 | $ 198,399 | $ 127,478 |
Basic earnings per share | $ 3.76 | $ 2.94 | $ 1.72 |
Diluted earnings per share | 3.71 | 2.91 | 1.70 |
Cash dividends declared per share | $ 1.44 | $ 1.31 | $ 1.19 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Net income including non-controlling interests | $ 247,475 | $ 198,373 | $ 127,412 |
Unrealized (loss) gain on derivatives designated and qualifying as cash flow hedges, net of tax of $17 in 2017; $(21) in 2016; $336 in 2015 | 288 | 39 | 557 |
Defined pension plan activity, net of tax of $19,252 in 2017, $4,297 in 2016; $61,538 in 2015 | 10,662 | 3,837 | 98,117 |
Currency translation adjustment | 71,016 | (36,752) | (106,935) |
Transactions with non-controlling interests | 0 | 0 | (7) |
Other comprehensive income (loss) | 81,966 | (32,876) | (8,268) |
Comprehensive income | 329,441 | 165,497 | 119,144 |
Comprehensive (loss) income attributable to non-controlling interests | 87 | (132) | (689) |
Comprehensive income attributable to shareholders | 329,354 | 165,629 | 119,833 |
Accumulated Other Comprehensive Income (Loss) [Member] | |||
Unrealized (loss) gain on derivatives designated and qualifying as cash flow hedges, net of tax of $17 in 2017; $(21) in 2016; $336 in 2015 | 288 | 39 | 557 |
Defined pension plan activity, net of tax of $19,252 in 2017, $4,297 in 2016; $61,538 in 2015 | 10,662 | 3,837 | 98,117 |
Currency translation adjustment | $ 70,901 | $ (36,646) | $ (106,312) |
CONSOLIDATED STATEMENTS OF COM6
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Parenthetical - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Unrealized (loss) gain on derivatives designated and qualifying as cash flow hedges, tax | $ 17 | $ (21) | $ 336 |
Unrecognized amounts from defined benefit pension plans, tax | $ 19,252 | $ 4,297 | $ 61,538 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) [Member] | Treasury Shares | Noncontrolling Interests |
Beginning Balance at Dec. 31, 2014 | $ 1,285,781 | $ 9,858 | $ 258,816 | $ 2,086,174 | $ (288,622) | $ (783,677) | $ 3,232 |
Beginning Balance (in shares) at Dec. 31, 2014 | 76,997,000 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 127,412 | 127,478 | (66) | ||||
Unrecognized amounts from defined benefit pension plans, net of tax | 98,117 | 98,117 | |||||
Unrealized gain on derivatives designated and qualifying as cash flow hedges, net of tax | 557 | 557 | |||||
Currency translation adjustment | (106,935) | (106,312) | (623) | ||||
Cash dividends declared - $1.44, $1.31, and $1.19 per share during the year 2017, 2016 and 2015, respectively | (87,814) | (87,814) | |||||
Stock-based compensation activity | 16,513 | 14,092 | 2,421 | ||||
Issuance of shares under benefit plans (in shares) | 274,000 | ||||||
Purchase of shares for treasury | (399,494) | (399,494) | |||||
Purchase of shares for treasury (in shares) | (6,578,000) | ||||||
Equity (Increase) Decrease from Transactions with Noncontrolling Interest Holders | (1,689) | (7) | (1,682) | ||||
Ending Balance at Dec. 31, 2015 | 932,448 | $ 9,858 | 272,908 | 2,125,838 | (296,267) | (1,180,750) | 861 |
Ending Balance (in shares) at Dec. 31, 2015 | 70,693,000 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 198,373 | 198,399 | (26) | ||||
Unrecognized amounts from defined benefit pension plans, net of tax | 3,837 | 3,837 | |||||
Unrealized gain on derivatives designated and qualifying as cash flow hedges, net of tax | 39 | 39 | |||||
Currency translation adjustment | (36,752) | (36,646) | (106) | ||||
Cash dividends declared - $1.44, $1.31, and $1.19 per share during the year 2017, 2016 and 2015, respectively | (88,166) | (88,166) | |||||
Stock-based compensation activity | 44,430 | 36,509 | 7,921 | ||||
Issuance of shares under benefit plans (in shares) | 843,000 | ||||||
Purchase of shares for treasury | (342,003) | (342,003) | |||||
Purchase of shares for treasury (in shares) | (5,862,000) | ||||||
Ending Balance at Dec. 31, 2016 | $ 712,206 | $ 9,858 | 309,417 | 2,236,071 | (329,037) | (1,514,832) | 729 |
Ending Balance (in shares) at Dec. 31, 2016 | 65,674,754 | 65,674,000 | |||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | $ 247,475 | 247,503 | (28) | ||||
Unrecognized amounts from defined benefit pension plans, net of tax | 10,662 | 10,662 | |||||
Unrealized gain on derivatives designated and qualifying as cash flow hedges, net of tax | 288 | 288 | |||||
Currency translation adjustment | 71,016 | 70,901 | 115 | ||||
Cash dividends declared - $1.44, $1.31, and $1.19 per share during the year 2017, 2016 and 2015, respectively | (95,355) | (95,355) | |||||
Stock-based compensation activity | 29,325 | 24,892 | 4,433 | ||||
Issuance of shares under benefit plans (in shares) | 470,000 | ||||||
Purchase of shares for treasury | $ (43,164) | (43,164) | |||||
Purchase of shares for treasury (in shares) | (459,901) | (481,000) | |||||
Ending Balance at Dec. 31, 2017 | $ 932,453 | $ 9,858 | $ 334,309 | $ 2,388,219 | $ (247,186) | $ (1,553,563) | $ 816 |
Ending Balance (in shares) at Dec. 31, 2017 | 65,662,546 | 65,663,000 |
CONSOLIDATED STATEMENTS OF EQU8
CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Stockholders' Equity [Abstract] | |||
Cash dividends declared per share (in dollars per share) | $ 1.44 | $ 1.31 | $ 1.19 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net income | $ 247,503 | $ 198,399 | $ 127,478 |
Non-controlling interests in subsidiaries' (loss) earnings | (28) | (26) | (66) |
Net income including non-controlling interests | 247,475 | 198,373 | 127,412 |
Adjustments to reconcile Net income including non-controlling interests to Net cash provided by operating activities: | |||
Rationalization and asset impairment charges (Notes 4 and 6) | 1,441 | 0 | 6,269 |
Loss on deconsolidation of Venezuelan subsidiary | 0 | 34,348 | 0 |
Bargain purchase gain (Note 3) | 49,650 | 0 | 0 |
Net impact of U.S. Tax Act (Note 12) | 28,616 | 0 | 0 |
Depreciation and amortization | 68,115 | 65,073 | 64,007 |
Equity earnings in affiliates, net | (337) | (261) | (530) |
Deferred income taxes (Note 12) | 4,058 | (9,805) | (55,728) |
Stock-based compensation (Note 9) | 12,698 | 10,332 | 7,932 |
Pension expense, settlements and curtailments | 2,517 | 13,988 | 162,815 |
Pension contributions and payments | (4,683) | (22,484) | (53,547) |
Other, net | 6,085 | (4,076) | 958 |
Changes in operating assets and liabilities, net of effects from acquisitions: | |||
(Increase) decrease in accounts receivable | (16,811) | (12,314) | 56,741 |
Decrease in inventories | 19,448 | 14,601 | 56,067 |
(Increase) decrease in other current assets | (8,143) | 1,532 | (19,972) |
Increase (decrease) in accounts payable | 17,871 | 29,627 | (46,911) |
(Decrease) increase in other current liabilities | (13) | (9,286) | 1,511 |
Net change in other assets and liabilities | 6,158 | 2,909 | 5,808 |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 334,845 | 312,557 | 312,832 |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Capital expenditures | (61,656) | (49,877) | (50,507) |
Acquisition of businesses, net of cash acquired (Note 3) | (72,468) | (71,567) | (37,076) |
Proceeds from sale of property, plant, and equipment | 2,301 | 1,127 | 2,310 |
Purchase of marketable securities | (205,584) | (38,920) | 0 |
Proceeds from marketable securities | 65,380 | 0 | 0 |
Other investing activities | 0 | (709) | (79) |
NET CASH USED BY INVESTING ACTIVITIES | (272,027) | (159,946) | (85,352) |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Proceeds from short-term borrowings | 0 | 1,892 | 12,505 |
Payments on short-term borrowings | 0 | (1,822) | (9,268) |
Amounts due banks, net | (491) | 1,469 | (37,466) |
Proceeds from long-term borrowings | 34 | 350,261 | 357,780 |
Payments on long-term borrowings | (39) | (481) | (6,945) |
Proceeds from exercise of stock options | 16,627 | 25,049 | 5,996 |
Purchase of shares for treasury | (43,164) | (342,003) | (399,494) |
Cash dividends paid to shareholders | (92,452) | (87,330) | (86,968) |
Other Financing Activities | (15,552) | (19,043) | (8,022) |
NET CASH USED BY FINANCING ACTIVITIES | (135,037) | (72,008) | (171,882) |
Effect of exchange rate changes on cash and cash equivalents | 19,741 | (5,607) | (29,794) |
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (52,478) | 74,996 | 25,804 |
Cash and cash equivalents at beginning of year | 379,179 | 304,183 | 278,379 |
CASH AND CASH EQUIVALENTS AT END OF YEAR | $ 326,701 | $ 379,179 | $ 304,183 |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The consolidated financial statements include the accounts of Lincoln Electric Holdings, Inc. and its wholly-owned and majority-owned subsidiaries for which it has a controlling interest (the "Company") after elimination of all inter-company accounts, transactions and profits. General Information The Company is a manufacturer of welding, cutting and brazing products. Welding products include arc welding power sources, plasma cutters, wire feeding systems, robotic welding packages, integrated automation systems, fume extraction equipment, consumable electrodes, fluxes and welding accessories and specialty welding consumables and fabrication. The Company's product offering also includes computer numeric controlled ("CNC") plasma and oxy-fuel cutting systems and regulators and torches used in oxy-fuel welding, cutting and brazing. In addition, the Company has a leading global position in the brazing and soldering alloys market. Translation of Foreign Currencies Asset and liability accounts are translated into U.S. dollars using exchange rates in effect at the dates of the Consolidated Balance Sheets; revenue and expense accounts are translated at average monthly exchange rates. Translation adjustments are reflected as a component of Total equity. For subsidiaries operating in highly inflationary economies, both historical and current exchange rates are used in translating balance sheet accounts and translation adjustments are included in Net income. The translation of assets and liabilities originally denominated in foreign currencies into U.S. dollars is for consolidation purposes, and does not necessarily indicate that the Company could realize or settle the reported value of those assets and liabilities in U.S. dollars. Additionally, such a translation does not necessarily indicate that the Company could return or distribute the reported U.S. dollar value of the net equity of its foreign operations to shareholders. Foreign currency transaction gains and losses are included in Selling, general & administrative expenses and were gains of $5,654 and $3,741 in 2017 and 2016 , respectively, and a loss of $6,023 in 2015 . Venezuela – Deconsolidation Effective June 30, 2016, the Company determined that deteriorating conditions in Venezuela had led the Company to no longer meet the accounting criteria for control over its Venezuelan subsidiary. The restrictive exchange controls in Venezuela and the lack of access to U.S. dollars through official currency exchange mechanisms resulted in an other-than-temporary lack of exchangeability between the Venezuela bolivar and the U.S. dollar, and restricted the Venezuela operations ability to pay dividends and satisfy other obligations denominated in U.S. dollars. Additionally, other operating restrictions including government controls on pricing, profits, imports and restrictive labor laws significantly impacted the Company’s ability to make key operational decisions, including the ability to manage its capital structure, purchasing, product pricing and labor relations. Therefore, as of June 30, 2016, the Company deconsolidated the financial statements of its subsidiary in Venezuela and began reporting the results under the cost method of accounting. As a result of the deconsolidation, the Company recorded a pretax charge of $34,348 ( $33,251 after-tax) in the second quarter of 2016. The pretax charge includes the write-off of the Company’s investment in Venezuela, including all inter-company balances and $283 of Cash and cash equivalents. Additionally, the charge includes foreign currency translation losses and pension losses previously included in Accumulated other comprehensive loss. Beginning July 1, 2016, the Company no longer includes the results of the Venezuelan subsidiary in its consolidated financial statements. Under the cost method of accounting, if cash were to be received from the Venezuela entity in future periods from the sale of inventory, dividends or royalties, income would be recognized. The Company does not anticipate dividend or royalty payments being made in the foreseeable future and has no outstanding receivables or payables with the Venezuelan entity. The factors that led to the Company’s conclusion to deconsolidate at June 30, 2016 continued to exist through December 31, 2017. The Company expects these conditions to continue for the foreseeable future. Subsequent to the deconsolidation under the voting interest consolidation model, the Company determined that the Venezuelan subsidiary is considered to be a variable interest entity ("VIE"). As the Company does not have the power to direct the activities that most significantly affect the Venezuela subsidiary's economic performance, the Company is not the primary beneficiary of the VIE and therefore would not consolidate the entity under the VIE consolidation model. Due to the lack of ability to settle U.S. dollar obligations, the Company does not intend to sell into nor purchase inventory from the Venezuela entity at this time. Additionally, the Company has no remaining financial commitments to the Venezuelan subsidiary and therefore believes the exposure to future losses are not material. Prior to deconsolidation, the financial statements of the Company’s Venezuelan operation had been reported under highly inflationary accounting rules since January 1, 2010. Under highly inflationary accounting, the financial statements of the Company’s Venezuelan operation had been remeasured into the Company’s reporting currency and exchange gains and losses from the remeasurement of monetary assets and liabilities were reflected in current earnings. In February 2015, the Venezuelan government announced a new exchange market called the Marginal Currency System (“SIMADI”), which allowed for trading based on supply and demand. At September 30, 2015, the Company determined that the rate used in remeasuring the Venezuelan operation's financial statements into U.S. dollars would change to the SIMADI rate (now known as "DICOM"), as the SIMADI rate most appropriately approximated the rates used to transact business in its Venezuelan operations. At September 30, 2015, the SIMADI rate was 199.4 bolivars to the U.S. dollar, resulting in a remeasurement charge on the bolivar-denominated monetary net asset position of $4,334 . This foreign exchange loss was recorded in Selling, general & administrative expenses during the three months ended September 30, 2015. Additionally, the Company recorded a lower of cost or net realizable value inventory adjustments of $22,880 within Cost of goods sold, related to the adoption of the SIMADI rate. Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Accounts Receivable The Company maintains an allowance for doubtful accounts for estimated losses from the failure of its customers to make required payments for products delivered. The Company estimates this allowance based on the age of the related receivable, knowledge of the financial condition of customers, review of historical receivables and reserve trends and other pertinent information. If the financial condition of customers deteriorates or an unfavorable trend in receivable collections is experienced in the future, additional allowances may be required. Historically, the Company's reserves have approximated actual experience. Marketable Securities The Company's marketable securities consist of short-term highly liquid investments classified as available-for-sale and recorded at fair value using quoted market prices for similar assets at the end of the reporting period. Inventories Inventories are valued at the lower of cost or net realizable value. Fixed manufacturing overhead costs are allocated to inventory based on normal production capacity and abnormal manufacturing costs are recognized as period costs. Cost for a substantial portion of U.S. inventories is determined on a last-in, first-out (“ LIFO”) basis. At December 31, 2017 and 2016 , approximately 32% and 40% of total inventories, respectively, were valued using the LIFO method. Cost of other inventories is determined by costing methods that approximate a first-in, first-out (“FIFO”) basis. Refer to Note 15 to the consolidated financial statements for additional details. Reserves are maintained for estimated obsolescence or excess inventory equal to the difference between the cost of inventory and the estimated net realizable value based upon assumptions about future demand and market conditions. The reserve for excess and obsolete inventory was $27,544 and $19,252 at December 31, 2017 and 2016 , respectively. Prepaid Expenses Prepaid expenses include prepaid insurance, prepaid rent, prepaid service contracts and other prepaid items. Prepaid expenses are included in Other current assets in the accompanying Consolidated Balance Sheets and amounted to $15,599 at December 31, 2017 and $12,139 at December 31, 2016 . Equity Investments Investments in businesses which the Company does not own a majority interest and does not have the ability to exercise significant influence over operating and financial policies are accounted for using the equity method. The Company's 50% ownership interest in equity investments includes investments in Turkey and Chile. The amount of retained earnings that represents undistributed earnings of 50% or less owned equity investments was $19,670 at December 31, 2017 and $19,333 at December 31, 2016 . Property, Plant and Equipment Property, plant and equipment are stated at cost and include improvements which significantly increase capacities or extend the useful lives of existing plant and equipment. Depreciation and amortization are computed using a straight-line method over useful lives ranging from three to 20 years for machinery, tools and equipment, and up to 40 years for buildings. Net gains or losses related to asset dispositions are recognized in earnings in the period in which dispositions occur. Routine maintenance, repairs and replacements are expensed as incurred. The Company capitalizes interest costs associated with long-term construction in progress. Property, plant and equipment, net in the Consolidated Balance Sheet is comprised of the following components: December 31, 2017 2016 Land $ 66,653 $ 46,219 Buildings 421,722 335,885 Machinery and equipment 776,436 706,938 1,264,811 1,089,042 Less accumulated depreciation 787,780 716,665 Total $ 477,031 $ 372,377 Goodwill and Intangibles Goodwill is recorded when the cost of acquired businesses exceeds the fair value of the identifiable net assets acquired. Intangible assets other than goodwill are recorded at fair value at the time acquired or at cost, if applicable. Intangible assets that do not have indefinite lives are amortized in line with the pattern in which the economic benefits of the intangible asset are consumed. If the pattern of economic benefit cannot be reliably determined, the intangible assets are amortized on a straight-line basis over the shorter of the legal or estimated life. Goodwill and indefinite-lived intangibles assets are not amortized, but are tested for impairment in the fourth quarter using the same dates each year or more frequently if changes in circumstances or the occurrence of events indicate potential impairment. In performing the annual impairment test, the fair value of each indefinite-lived intangible asset is compared to its carrying value and an impairment charge is recorded if the carrying value exceeds the fair value. For goodwill, the Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, and whether it is necessary to perform the quantitative goodwill impairment test. The quantitative test is required only if the Company concludes that it is more likely than not that a reporting unit’s fair value is less than its carrying amount. For 2017, the Company early adopted Accounting Standard Update No. 2017-04, " Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.". As such, the quantitative goodwill impairment analysis is now a one-step process. The Company compared the fair value of each reporting unit with its carrying amount. If the carrying amount exceeds the fair value, an impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to that reporting unit. Fair values are determined using established business valuation techniques and models developed by the Company, estimates of market participant assumptions of future cash flows, future growth rates and the applicable discount rates to value estimated cash flows. Changes in economic and operating conditions impacting these assumptions could result in asset impairments in future periods. Refer to Note 4 to the consolidated financial statements for additional details. Long-Lived Assets The Company periodically evaluates whether current facts or circumstances indicate that the carrying value of its depreciable long-lived assets to be held and used may not be recoverable. If such circumstances are determined to exist, an estimate of undiscounted future cash flows produced by the long-lived asset, or the appropriate grouping of assets, is compared to the carrying value to determine whether impairment exists. If an asset is determined to be impaired, a loss is recognized to the extent that carrying value exceeds fair value. Fair value is measured based on quoted market prices in active markets, if available. If quoted market prices are not available, the estimate of fair value is based on various valuation techniques, including the discounted value of estimated future cash flows. Refer to Notes 4 and 6 to the consolidated financial statements for additional details. Fair Value Measurements Financial assets and liabilities, such as the Company's defined benefit pension plan assets and derivative contracts, are valued at fair value using the market and income valuation approaches. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The following hierarchy is used to classify the inputs that measure fair value: Level 1 Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets. Level 2 Inputs to the valuation methodology include: • Quoted prices for similar assets or liabilities in active markets; • Quoted prices for identical or similar assets or liabilities in inactive markets; • Inputs other than quoted prices that are observable for the asset or liability; and • Inputs that are derived principally from or corroborated by observable market data by correlation or other means. If the asset or liability has a specific (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability. Level 3 Inputs to the valuation methodology are unobservable and significant to the fair value measurement. Refer to Notes 11 and 14 to the consolidated financial statements for additional details. Product Warranties The Company accrues for product warranty claims based on historical experience and the expected material and labor costs to provide warranty service. Warranty services are generally provided for periods up to three years from the date of sale. The accrual for product warranty claims is included in Other current liabilities. Refer to Note 18 to the consolidated financial statements for additional details. Revenue Recognition Substantially all of the Company's revenues are recognized when the risks and rewards of ownership and title to the product have transferred to the customer, which generally occurs at point of shipment. The Company recognizes any discounts, credits, returns, rebates and incentive programs based on reasonable estimates as a reduction of sales to arrive at Net sales at the same time the related revenue is recorded. For contracts accounted for under the percentage of completion method, revenue recognition is typically based upon the ratio of costs incurred to date compared with estimated total costs to complete. The cumulative impact of revisions to total estimated costs is reflected in the period of the change, including anticipated losses. Distribution Costs Distribution costs, including warehousing and freight related to product shipments, are included in Cost of goods sold. Stock-Based Compensation Expense is recognized for all awards of stock-based compensation by allocating the aggregate grant date fair value over the vesting period. No expense is recognized for any stock options, restricted or deferred shares or restricted stock units ultimately forfeited because the recipients fail to meet vesting requirements. Common stock issuable upon the exercise of employee stock options is excluded from the calculation of diluted earnings per share when the calculation of option equivalent shares is anti-dilutive. Refer to Note 9 to the consolidated financial statements for additional details. Financial Instruments The Company uses derivative instruments to manage exposures to interest rates, commodity prices and currency exchange rate fluctuations on certain purchase and sales transactions, balance sheet and net investment exposures. Derivative contracts to hedge currency and commodity exposures are generally written on a short-term basis, but may cover exposures for up to two years while interest rate contracts may cover longer periods consistent with the terms of the underlying debt. The Company does not enter into derivatives for trading or speculative purposes. All derivatives are recognized at fair value on the Company's Consolidated Balance Sheets. The accounting for gains and losses resulting from changes in fair value depends on the use of the derivative and whether it is designated and qualifies for hedge accounting. The Company formally documents the relationship of the hedge with the hedged item as well as the risk-management strategy for all designated hedges. Both at inception and on an ongoing basis, the hedging instrument is assessed as to its effectiveness, when applicable. If and when a derivative is determined not to be highly effective as a hedge, the underlying hedged transaction is no longer likely to occur, or the derivative is terminated, hedge accounting is discontinued. The cash flows from settled derivative contracts are recognized in Net cash provided by operating activities in the Company's Consolidated Statements of Cash Flows. The Company is subject to the credit risk of the counterparties to derivative instruments. Counterparties include a number of major banks and financial institutions. The Company manages individual counterparty exposure by monitoring the credit rating of the counterparty and the size of financial commitments and exposures between the Company and the counterparty. Cash flow hedges Certain foreign currency forward contracts are qualified and designated as cash flow hedges. The effective portion of the fair value unrealized gain or loss on cash flow hedges are reported as a component of Accumulated other comprehensive income ("AOCI") with offsetting amounts recorded as Other current assets, Other assets, Other current liabilities or Other liabilities depending on the position and the duration of the contract. At settlement, the realized gain or loss is recorded in Cost of goods sold or Net sales for hedges of purchases and sales, respectively, in the same period or periods during which the hedged transaction affects earnings. The ineffective portion on cash flow hedges is recognized in current earnings. Fair value hedges Certain interest rate swap agreements were qualified and designated as fair value hedges. The interest rate swap agreements designated as fair value hedges meet the shortcut method requirements under accounting standards for derivatives and hedging. Accordingly, changes in the fair value of these agreements are considered to exactly offset changes in the fair value of the underlying long-term debt. Changes in fair value are recorded in Other assets or Other liabilities with offsetting amounts recorded as a fair value adjustment to the carrying value of Long-term debt, less current portion. Net investment hedges For derivative instruments that qualify as a net investment hedge, the effective portion of the fair value gains or losses are recognized in AOCI with offsetting amounts recorded as Other current assets, Other assets, Other current liabilities or Other liabilities depending on the position and the duration of the contract. The gains or losses are subsequently reclassified to Selling, general and administrative expenses, as the underlying hedged investment is liquidated. Derivatives not designated as hedging instruments The Company has certain foreign exchange forward contracts which are not designated as hedges. These derivatives are held as hedges of certain balance sheet exposures. The gains or losses on t hese contracts are recognized in Selling, general and administrative expenses, offsetting the losses or gains on the exposures being hedged. Refer to Note 13 to the consolidated financial statements for additional details. Research and Development Research and development costs are charged to Selling, general & administrative expenses as incurred and totaled $47,899 , $44,720 and $47,182 in 2017 , 2016 and 2015 , respectively. Bonus Included in Selling, general & administrative expenses are the costs related to the Company's discretionary employee bonus programs, which for certain U.S.-based employees are net of hospitalization costs. Bonus costs were $97,392 in 2017 , $83,620 in 2016 and $98,651 in 2015 . Income Taxes Deferred income taxes are recognized at currently enacted tax rates for temporary differences between the GAAP and income tax basis of assets and liabilities and operating loss and tax credit carry-forwards. In assessing the realizability of deferred tax assets, the Company assesses whether it is more likely than not that a portion or all of the deferred tax assets will not be realized. Refer to Note 12 to the consolidated financial statements for additional details. Acquisitions Upon acquisition of a business, the Company uses the income, market, or cost approach (or a combination thereof) for the valuation as appropriate. The valuation inputs in these models and analyses are based on market participant assumptions. Market participants are considered to be buyers and sellers unrelated to the Company in the principal or most advantageous market for the asset or liability. Fair value estimates are based on a series of judgments about future events and uncertainties and rely heavily on estimates and assumptions. Management values property, plant and equipment using the cost approach supported where available by observable market data, which includes consideration of obsolescence. Management values acquired intangible assets using the relief from royalty method, a form of the income approach supported by observable market data for peer companies. Acquired inventories are marked to fair value. For certain items, the carrying value is determined to be a reasonable approximation of fair value based on information available to the Company. Refer to Note 3 to the consolidated financial statements for additional details. Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions in certain circumstances that affect the amounts reported in the accompanying consolidated financial statements and notes. Actual results could differ from these estimates. Reclassification Certain reclassifications have been made to prior year financial statements to conform to current year classifications. New Accounting Pronouncements The following section provides a description of new accounting pronouncements ("Accounting Standard Update" or "ASU") issued by the Financial Accounting Standards Board ("FASB") that are applicable to the Company. New Accounting Pronouncements Adopted: In March 2016, the FASB issued ASU No. 2016-09, "Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting." ASU 2016-09 amends several aspects of the accounting for share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. The Company adopted ASU 2016-09 effective January 1, 2017. ASU 2016-09 requires prospective recognition of excess tax benefits and deficiencies resulting from stock-based compensation award vesting and exercises as a discrete income tax adjustment in the income statement. Previously, these amounts were recognized in Additional paid-in capital. Net excess tax benefits of $6,276 for the twelve months ended December 31, 2017 were recognized as a reduction of income tax expense. Earnings per share increased by $0.09 per share for the twelve months ended December 31, 2017 , respectively, as a result of this change. In addition, ASU 2016-09 requires excess tax benefits and deficiencies to be prospectively excluded from the assumed future proceeds in the calculation of diluted shares. This change results in an insignificant increase in diluted weighted average shares outstanding for the twelve months ended December 31, 2017 . ASU 2016-09 requires that excess tax benefits from stock-based compensation awards be reported as operating activities in the Consolidated Statements of Cash Flows. Previously, this activity was included in financing activities in the Consolidated Statements of Cash Flows. The Company has elected to apply this change on a retrospective basis. As a result, excess tax benefits of $6,276 are reported as Net cash provided by operating activities for the twelve months ended December 31, 2017 and $9,154 of excess tax benefits were reclassified from Net cash used by financing activities to Net cash provided by operating activities for the twelve months ended December 31, 2016 . ASU 2016-09 requires that employee taxes paid when an employer withholds shares for tax-withholding purposes be reported as financing activities in the Consolidated Statements of Cash Flows on a retrospective basis. Previously, this activity was included in operating activities. The impact of this change was immaterial to the Consolidated Statements of Cash Flows. The Company has elected to continue to estimate the number of stock-based awards expected to vest, as permitted by ASU 2016-09, rather than electing to account for forfeitures as they occur. In May 2017, the FASB issued ASU No. 2017-09, " Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting." ASU 2017-09 provides updated guidance about which changes to the terms and conditions of a share-based payment award require an entity to apply modification accounting. Under this ASU, an entity should account for the effects of an award modification unless the fair value, vesting conditions and equity or liability classification of the modified award are the same as the original award. The ASU is effective January 1, 2018, early adoption is permitted and the ASU should be applied prospectively. The Company elected early adoption and ASU 2017-09 is effective for the Company as of October 1, 2017. In January 2017, the FASB issued ASU No. 2017-04, " Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment." ASU 2017-04 simplifies the subsequent measurement of goodwill by eliminating the second step from the goodwill impairment test. Under this ASU, an entity should perform the first step in the annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. If the carrying amount exceeds the fair value, an entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to that reporting unit. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The ASU is effective January 1, 2020, early adoption is permitted and the ASU should be applied prospectively. The Company elected early adoption and ASU 2017-09 is effective for the Company as of January 1, 2017. New Accounting Pronouncements to be Adopted: In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606)." ASU 2014-09 requires an entity to recognize revenue in a manner that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard also specifies the accounting of some costs to obtain or fulfill a contract with a customer and expands the disclosure requirements around contracts with customers. In August 2015, the FASB issued ASU 2015-14, " Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date ," which deferred the effective date of ASU 2014-09 to annual reporting periods beginning after December 15, 2017, and interim periods within those fiscal years. An entity can either adopt this amendment retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying the update recognized at the date of initial application. To evaluate the impact of adopting this new guidance on the consolidated financial statements, the Company completed a scoping analysis of revenue streams against the requirements of the standard. In addition, the Company completed a review of customer contracts and implemented changes to processes and controls to meet the standard’s reporting and disclosure requirements. Upon adoption of the guidance’s control model, ASU 2014-09 will change the timing of when revenue is recognized for certain customized products and deliverables. The Company adopted ASU 2014-09 as of January 1, 2018, using the modified retrospective transition method applied to those contracts that were not completed as of that date. The adoption will not have a material impact on the Company’s consolidated financial statements. The following ASUs were adopted as of January 1, 2018. The impact on the Company's consolidated financial statements is described within the table below: Standard Description ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, issued August 2017. Provides updated guidance to more closely align hedge accounting with a company's risk management strategy, to simplify the application of hedge accounting and to better portray the economic results of hedging instruments in the financial statements. The ASU is effective January 1, 2019 and early adoption is permitted. On the date of adoption, the ASU applies to all existing hedging relationships and should be reflected as of the beginning of the respective fiscal year. The Company early adopted the ASU effective January 1, 2018. The adoption is not expected to have a material impact on the Company's consolidated financial statements. ASU No. 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Period Pension Cost and Net Periodic Postretirement Benefit Cost, issued March 2017. Requires an entity to report the service cost component of the net periodic benefit cost in the same income statement line item as other employee compensation costs. The other components of the net periodic benefit cost are required to be presented in the income statement separately from the service cost component and outside of any subtotal of operating income. Additionally, only the service cost component will be eligible for capitalization in assets. The ASU should be applied retrospectively for the presentation of the service cost component and the other components of net periodic pension cost in the income statement and prospectively for the capitalization of the service cost component. The adoption primarily results in the reclassification of other components of net periodic benefit cost outside of Operating income in the Consolidated Statements of Income. Refer to Note 11 of the consolidated financial |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per share: Year Ended December 31, 2017 2016 2015 Numerator: Net income $ 247,503 $ 198,399 $ 127,478 Denominator: Basic weighted average shares outstanding 65,739 67,462 74,111 Effect of dilutive securities - Stock options and awards 904 694 743 Diluted weighted average shares outstanding 66,643 68,156 74,854 Basic earnings per share $ 3.76 $ 2.94 $ 1.72 Diluted earnings per share $ 3.71 $ 2.91 $ 1.70 For the years ended December 31, 2017 , 2016 and 2015 , common shares subject to equity-based awards of 157,033 , 774,502 and 522,471 , respectively, were excluded from the computation of diluted earnings per share because the effect of their exercise would be anti-dilutive. |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS During July 2017, the Company completed its acquisition of Air Liquide Welding, a subsidiary of Air Liquide. The agreed upon purchase price was $135,123 , which was adjusted for certain debt like obligations, for a net purchase price of $61,953 , net of cash acquired. The primary debt like obligation was a pension liability. The acquisition was accounted for as a business combination. The funding of the cash portion of the purchase price and acquisition costs was provided for with available cash. The complementary business enhanced the Company’s global specialty consumables portfolio and extended its channel reach for equipment systems and cutting, soldering and brazing solutions in Europe. The acquisition also offers European customers more comprehensive welding solutions, greater technical application expertise and improved service levels. The fair value of the net assets acquired exceeded the purchase consideration by $49,650 , resulting in a bargain purchase gain at acquisition, which is included in Bargain purchase gain in the Company’s Consolidated Statements of Income. The Company believes that the bargain purchase gain was primarily the result of the divestiture by Air Liquide of the welding business, which was outside Air Liquide’s core business, as part of an overall repositioning of its core business. The Company anticipates future integration initiatives are necessary in order to achieve commercial and operational synergies. The assets and liabilities assumed and presented in the table below are based on available information and may be revised during the measurement period, not to exceed 12 months, if additional information becomes available. The following table summarizes the purchase price allocation for the Air Liquide Welding acquisition: Assets acquired and liabilities assumed As of July 31, 2017 Accounts receivable $ 89,442 Inventory (1) 97,803 Property, plant and equipment (2) 73,056 Intangible assets (3) 11,715 Accounts payable (65,640 ) Pension liability (67,563 ) Bargain purchase gain (49,650 ) Net other assets and liabilities (4) (27,210 ) Total purchase price, net of cash acquired (5) $ 61,953 (1) Inventories acquired were sold in 2017 resulting in a $4,578 increase in cost of sales for the amortization of step up in the value of acquired inventories. (2) Property, plant and equipment acquired includes a number of manufacturing and distribution sites, including the related facilities, land and leased sites, and machinery and equipment for use in manufacturing operations. (3) $7,099 of the intangible asset balance was assigned to a trade name expected to have an indefinite life. Of the remaining amount, $1,183 was assigned to a finite-lived trade name ( 10 year weighted average useful life) and $3,433 was assigned to other intangible assets ( 9 year weighted average life). (4) Consists primarily of other accrued liabilities. (5) Reflects a receivable from seller of $10,670 as of December 31, 2017 for an agreed upon purchase price adjustment received in the first quarter of 2018. In 2017, the Company recognized $15,002 in acquisition transaction and integration costs related to the acquisition of Air Liquide Welding. Such costs were expensed as incurred and are included in the "Selling, general and administrative expenses" line item in the Consolidated Statements of Income. In 2016, the Air Liquide Welding businesses generated sales of approximately $400 million. Beginning August 1, 2017, the Company's Consolidated Statements of Income include the results of the Air Liquide Welding businesses, including sales revenue of $182 million through December 31, 2017. The impact on net income in the year ended December 31, 2017 from Air Liquide Welding businesses was immaterial. During May 2016, the Company acquired Vizient Manufacturing Solutions ("Vizient"). Vizient, based in Bettendorf, Iowa, is a robotic integrator specializing in custom engineered tooling and automated arc welding systems for general and heavy fabrication applications. The acquisition assisted in diversifying end-market exposure and broadening global growth opportunities. During August 2015, the Company acquired Specialised Welding Products ("SWP"). SWP, based in Melbourne, Australia, is a provider of specialty welding consumables and fabrication, maintenance and repair services for alloy and wear resistant products commonly used in mining and energy sector applications. The acquisition broadened the Company's presence and specialty alloy offering in Australia and New Zealand. Also in August 2015, the Company acquired Rimrock Holdings Corporation ("Rimrock"). Rimrock is a manufacturer of industrial automation products and robotic systems with two divisions, Wolf Robotics LLC, based in Fort Collins, Colorado, and Rimrock Corporation, based in Columbus, Ohio. Wolf Robotics integrates robotic welding and cutting systems predominantly for heavy fabrication and transportation OEMs and suppliers. The acquisition advanced the Company's leadership position in automated welding and cutting solutions. Rimrock Corporation designs and manufactures automated spray systems and turnkey robotic systems for the die casting, foundry and forging markets. Pro forma information related to these acquisitions has not been presented because the impact on the Company's Consolidated Statements of Income is not material. Acquired companies are included in the Company's consolidated financial statements as of the date of acquisition. |
GOODWILL AND INTANGIBLES
GOODWILL AND INTANGIBLES | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLES | GOODWILL AND INTANGIBLES The changes in the carrying amount of goodwill by reportable segments for the years ended December 31, 2017 and 2016 were as follows: Americas Welding International Welding The Harris Products Group Consolidated Balance as of December 31, 2015 $ 152,335 $ 23,345 $ 11,824 $ 187,504 Additions and adjustments (1)(2) 43,217 (30 ) (301 ) 42,886 Foreign currency translation 826 349 354 1,529 Balance as of December 31, 2016 196,378 23,664 11,877 231,919 Additions and adjustments (2) (76 ) — (301 ) (377 ) Impairment charges (3) (1,091 ) — — (1,091 ) Foreign currency translation 2,048 2,003 80 4,131 Balance as of December 31, 2017 $ 197,259 $ 25,667 $ 11,656 $ 234,582 (1) Additions to Americas Welding reflect goodwill recognized in the acquisition of Vizient in 2016. (2) Adjustments to Harris Products Group include the tax benefit attributable to the amortization of tax deductible goodwill in excess of goodwill recorded for financial reporting purposes. (3) The Company performed an interim goodwill impairment test, using a combination of income and market valuation approaches, resulting in a non-cash impairment charge to the carrying value of goodwill. The impairment charge is recorded within Rationalization and asset impairment charges in the accompanying Consolidated Statements of Income. Gross carrying values and accumulated amortization of intangible assets other than goodwill by asset class were as follows: December 31, 2017 December 31, 2016 Gross Amount Accumulated Amortization Gross Accumulated Intangible assets not subject to amortization Trademarks and trade names $ 24,235 $ 17,113 Intangible assets subject to amortization Trademarks and trade names $ 41,203 $ 24,147 $ 38,972 $ 20,648 Customer relationships 93,139 47,175 91,216 39,033 Patents 27,777 12,978 28,073 11,467 Other 57,351 31,953 52,071 26,209 Total intangible assets subject to amortization $ 219,470 $ 116,253 $ 210,332 $ 97,357 Increases in gross intangible assets reflect the acquisition of Air Liquide Welding in 2017. Aggregate amortization expense was $15,671 , $14,525 and $13,296 for 2017 , 2016 and 2015 , respectively. Estimated annual amortization expense for intangible assets for each of the next five years is $14,856 in 2018 , $13,233 in 2019 , $12,513 in 2020 , $11,467 in 2021 and $10,437 in 2022 . |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2017 | |
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. Welding products include arc welding power sources, CNC and plasma cutters, wire feeding systems, robotic welding packages, integrated automation systems, fume extraction equipment, consumable electrodes, fluxes and welding accessories and specialty welding consumables and fabrication. The Company's product offering also includes oxy-fuel cutting systems and regulators and torches used in oxy-fuel welding, cutting and brazing. In addition, the Company has a leading global position in the brazing and soldering alloys market. During the first quarter of 2016, the Company realigned its organizational and leadership structure into three operating segments to support growth strategies and enhance the utilization of the Company's worldwide resources and global sourcing initiatives. The operating segments consist of Americas Welding, International Welding and The Harris Products Group. The Americas Welding segment includes welding operations in North and South America. The International Welding segment primarily includes welding operations in Europe, Africa, Asia and Australia. The Harris Products Group includes the Company's global cutting, soldering and brazing businesses as well as its retail business in the United States. 2015 results reflect the realigned segment structure. Segment performance is measured and resources are allocated based on a number of factors, the primary profit measure being adjusted earnings before interest and income taxes ("Adjusted EBIT"). 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, 2017 approximately 32% of total inventories were valued using the LIFO method. At December 31, 2016 and 2015 approximately 40% of total inventories were valued using the LIFO method. LIFO is used for a substantial portion of U.S. inventories included in Americas 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: Americas Welding (1) International Welding (2) The Harris Products Group Corporate / Eliminations (3) Consolidated For the Year Ended December 31, 2017 Net sales $ 1,609,779 $ 724,024 $ 290,628 $ — $ 2,624,431 Inter-segment sales 97,382 18,860 8,190 (124,432 ) $ — Total $ 1,707,161 $ 742,884 $ 298,818 $ (124,432 ) $ 2,624,431 Adjusted EBIT $ 291,866 $ 41,721 $ 36,442 $ 309 $ 370,338 Special items charge (gain) 9,242 10,076 — (34,648 ) $ (15,330 ) EBIT $ 282,624 $ 31,645 $ 36,442 $ 34,957 $ 385,668 Interest income 4,788 Interest expense (24,220 ) Income before income taxes $ 366,236 Total assets $ 1,253,411 $ 919,995 $ 175,151 $ 57,990 $ 2,406,547 Equity investments in affiliates 4,037 24,489 — — $ 28,526 Capital expenditures 43,158 14,549 3,949 — $ 61,656 Depreciation and amortization 47,038 18,364 2,885 (172 ) $ 68,115 For the Year Ended December 31, 2016 Net sales $ 1,494,982 $ 507,289 $ 272,343 $ — $ 2,274,614 Inter-segment sales 93,612 15,975 8,709 (118,296 ) $ — Total $ 1,588,594 $ 523,264 $ 281,052 $ (118,296 ) $ 2,274,614 Adjusted EBIT $ 266,633 $ 29,146 $ 32,380 $ 564 $ 328,723 Special items charge — — — 34,348 $ 34,348 EBIT $ 266,633 $ 29,146 $ 32,380 $ (33,784 ) $ 294,375 Interest income 2,092 Interest expense (19,079 ) Income before income taxes $ 277,388 Total assets $ 1,278,417 $ 529,223 $ 161,391 $ (25,594 ) $ 1,943,437 Equity investments in affiliates 3,946 23,355 — — $ 27,301 Capital expenditures 35,314 12,354 2,209 — $ 49,877 Depreciation and amortization 47,359 15,063 2,860 (209 ) $ 65,073 For the Year Ended December 31, 2015 Net sales $ 1,741,350 $ 530,460 $ 263,981 $ — $ 2,535,791 Inter-segment sales 92,538 18,747 9,312 (120,597 ) $ — Total $ 1,833,888 $ 549,207 $ 273,293 $ (120,597 ) $ 2,535,791 Adjusted EBIT $ 316,689 $ 34,511 $ 27,882 $ (275 ) $ 378,807 Special items charge 173,239 16,671 — — $ 189,910 EBIT $ 143,450 $ 17,840 $ 27,882 $ (275 ) $ 188,897 Interest income 2,714 Interest expense (21,824 ) Income before income taxes $ 169,787 Total assets $ 1,165,817 $ 543,254 $ 143,905 $ (68,805 ) $ 1,784,171 Equity investments in affiliates 3,791 23,450 — — $ 27,241 Capital expenditures 35,721 12,059 2,727 — $ 50,507 Depreciation and amortization 45,447 15,776 2,978 (194 ) $ 64,007 (1) 2017 special items reflect non-cash pension settlement charges related to lump sum pension payments, as well as non-cash charges related to the impairment of goodwill. 2015 special items reflect net charges related to employee severance and other related costs, Venezuelan foreign exchange remeasurement losses related to the adoption of a new foreign exchange mechanism and non-cash pension settlement charges related to the purchase of a group annuity contract. (2) 2017 special items reflect amortization of step up in value of acquired inventories related to the Air Liquide Welding acquisition as discussed in Note 3 to the consolidated financial statements, as well as charges related to employee severance, asset impairments and other related costs. 2015 special items reflect net charges related to employee severance and other costs and adjustments to reclassify a potential divestiture that was previously held-for-sale, as well as non-cash charges related to the impairment of goodwill and long-lived assets. (3) 2017 special items reflect a bargain purchase gain and acquisition transaction and integration costs related to the Air Liquide Welding acquisition as discussed in Note 3 to the consolidated financial statements. 2016 special items reflect a loss related to the deconsolidation of the Company's Venezuelan subsidiary. Export sales (excluding inter-company sales) from the United States were $151,630 in 2017 , $134,216 in 2016 and $175,049 in 2015 . No individual customer comprised more than 10% of the Company's total revenues for any of the three years ended December 31, 2017 . 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, 2017 2016 2015 Net sales: United States $ 1,388,816 $ 1,308,635 $ 1,387,882 Foreign countries 1,235,615 965,979 1,147,909 Total $ 2,624,431 $ 2,274,614 $ 2,535,791 December 31, 2017 2016 2015 Property, plant and equipment, net: United States $ 194,491 $ 176,041 $ 173,974 Foreign countries 282,931 196,679 237,718 Eliminations (391 ) (343 ) (369 ) Total $ 477,031 $ 372,377 $ 411,323 |
RATIONALIZATION AND ASSET IMPAI
RATIONALIZATION AND ASSET IMPAIRMENTS | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
RATIONALIZATION AND ASSET IMPAIRMENTS | RATIONALIZATION AND ASSET IMPAIRMENTS The Company recorded rationalization and asset impairment charges of $6,590 and $19,958 for the years ended December 31, 2017 and 2015 . The 2017 charges include $5,149 primarily related to employee severance and $1,441 in asset impairment charges. A description of each restructuring plan and the related costs follows: Americas Welding Plans: During 2015, the Company initiated a rationalization plan within Americas Welding that included a voluntary separation incentive program covering certain U.S.-based employees. The plan was completed during 2016. International Welding Plans: During 2017, the Company initiated rationalization plans within International Welding. The plan includes headcount restructuring and the consolidation of manufacturing operations to better align the cost structures with economic conditions and operating needs. At December 31, 2017 , liabilities relating to the International Welding plans of $3,610 were recognized in Other current liabilities. The Company does not anticipate significant additional charges related to the completion of these plans. During 2015, the Company initiated rationalization plans within International Welding. The plan included headcount restructuring to better align the cost structures with economic conditions and operating needs. The Company does not anticipate any additional charges related to the completion of these plans. 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 to evaluate its cost structure and additional rationalization actions may result in charges in future periods. The following table summarizes the activity related to the rationalization liabilities by segment for the year ended December 31, 2017 : Americas Welding International Welding Consolidated Balance at December 31, 2015 $ 67 $ 7,598 $ 7,665 Payments and other adjustments (67 ) (2,408 ) (2,475 ) Balance at December 31, 2016 $ — $ 5,190 $ 5,190 Payments and other adjustments — (3,536 ) (3,536 ) Charged to expense — 5,149 5,149 Balance at December 31, 2017 $ — $ 6,803 $ 6,803 |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME | 12 Months Ended |
Dec. 31, 2017 | |
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME | |
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) ("AOCI") The following tables set forth the total changes in AOCI by component, net of taxes, for the years ended December 31, 2017 and 2016 : Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges Defined benefit pension plan activity Currency translation adjustment Total Balance at December 31, 2015 $ 548 $ (99,776 ) $ (197,039 ) $ (296,267 ) Other comprehensive income (loss) before reclassification 2,026 (1,268 ) (2) (36,646 ) (3) (35,888 ) Amounts reclassified from AOCI (1,987 ) (1) 5,105 (2) — 3,118 Net current-period other comprehensive income (loss) 39 3,837 (36,646 ) (32,770 ) Balance at December 31, 2016 $ 587 $ (95,939 ) $ (233,685 ) $ (329,037 ) Other comprehensive income (loss) before reclassification (2,074 ) 2,736 (2) 70,901 (3) 71,563 Amounts reclassified from AOCI 2,362 (1) 7,926 (2) — 10,288 Net current-period other comprehensive income (loss) 288 10,662 70,901 81,851 Balance at December 31, 2017 $ 875 $ (85,277 ) $ (162,784 ) $ (247,186 ) (1) During 2017 , this AOCI reclassification is a component of Net sales of $1,860 (net of tax of $693 ) and Cost of goods sold of $502 (net of tax of $93 ); during 2016 , the reclassification is a component of Net sales of $(1,580) (net of tax of $(577) ) and Cost of goods sold of $(407) (net of tax of $(24) ). Refer to Note 13 to the consolidated financial statements for additional details. (2) This AOCI component is included in the computation of net periodic pension costs (net of tax of $19,252 and $4,297 during the years ended December 31, 2017 and 2016 , respectively). Refer to Note 11 to the consolidated financial statements for additional details. (3) The Other comprehensive income before reclassifications excludes $115 and $(106) attributable to Non-controlling interests in the years ended December 31, 2017 and 2016 , respectively. The reclassified AOCI component is included in the computation of Non-controlling interests. Refer to Consolidated Statements of Equity for additional details. |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT At December 31, 2017 and 2016 , debt consisted of the following: December 31, 2017 2016 Long-term debt Senior Unsecured Notes due through 2045, interest at 2.8% to 4.0% (net of debt issuance costs of $1,491 and $1,586 at December 31, 2017 and 2016, respectively), swapped $100,000 to variable interest rates of 2.0% to 3.2% $ 693,424 $ 692,975 Other borrowings due through 2023, interest up to 8.0% 10,823 10,860 704,247 703,835 Less current portion 111 131 Long-term debt, less current portion 704,136 703,704 Short-term debt Amounts due banks, interest at 31.8% (29.0% in 2016) 2,020 1,758 Current portion long-term debt 111 131 Total short-term debt 2,131 1,889 Total debt $ 706,267 $ 705,593 At December 31, 2017 and 2016 , the fair value of long-term debt, including the current portion, was approximately $687,428 and $669,209 , respectively, which was determined using available market information and methodologies requiring judgment. Since judgment is required in interpreting market information, the fair value of the debt is not necessarily the amount which could be realized in a current market exchange. Senior Unsecured Notes On April 1, 2015 , the Company entered into a Note Purchase Agreement pursuant to which it issued senior unsecured notes (the "2015 Notes") in the aggregate principal amount of $350,000 through a private placement. The proceeds were used for general corporate purposes. The 2015 Notes, as shown in the table below, have original maturities ranging from 10 to 30 years with a weighted average effective interest rate of 3.5% , excluding accretion of original issuance costs, and an initial average tenure of 19 years. Interest is payable semi-annually. The 2015 Notes contain certain affirmative and negative covenants. As of December 31, 2017, the Company was in compliance with all of its debt covenants . The maturity and interest rates of the 2015 Notes are as follows: Amount Maturity Date Interest Rate Series A $ 100,000 August 20, 2025 3.15 % Series B 100,000 August 20, 2030 3.35 % Series C 50,000 April 1, 2035 3.61 % Series D 100,000 April 1, 2045 4.02 % On October 20, 2016 the Company entered into a Note Purchase Agreement pursuant to which it issued senior unsecured notes (the "2016 Notes") in the aggregate principal amount of $350,000 through a private placement. The proceeds are being used for general corporate purposes. The 2016 Notes, as shown in the table below, have original maturities ranging from 12 to 25 years with a weighted average effective interest rate of 3.1% , excluding accretion of original issuance costs, and an initial average tenure of 18 years. Interest is payable semi-annually. The 2016 Notes contain certain affirmative and negative covenants. As of December 31, 2017, the Company was in compliance with all of its debt covenants . The maturity and interest rates of the 2016 Notes are as follows: Amount Maturity Date Interest Rate Series A $ 100,000 October 20, 2028 2.75 % Series B 100,000 October 20, 2033 3.03 % Series C 100,000 October 20, 2037 3.27 % Series D 50,000 October 20, 2041 3.52 % The Company's total weighted average effective interest rate and weighted average term, inclusive of the 2015 Notes and 2016 Notes, is 3.3% and 18 years, respectively. Revolving Credit Agreement The Company has a line of credit totaling $400,000 through the Amended and Restated Credit Agreement (the “Credit Agreement”). The Credit Agreement has a five -year term and may be increased, subject to certain conditions, by an additional amount up to $100,000 . The interest rate on borrowings is based on either the London Inter-Bank Offered Rate ("LIBOR") or the prime rate, plus a spread based on the Company’s leverage ratio, at the Company’s election. The Company amended and restated the Credit Agreement on June 30, 2017 , extending the maturity of the line of credit to June 30, 2022 . The Credit Agreement contains customary affirmative, negative and financial covenants for credit facilities of this type, including limitations on the Company and its subsidiaries with respect to liens, investments, distributions, mergers and acquisitions, dispositions of assets, transactions with affiliates, a fixed charges coverage ratio and total leverage ratio. As of December 31, 2017, the Company was in compliance with all of its covenants and had no outstanding borrowings under the Credit Agreement. Other Maturities of long-term debt, including payments under capital leases and amounts due banks, for the five years succeeding December 31, 2017 are $2,132 in 2018 , $111 in 2019 , $108 in 2020 , $110 in 2021 , $107 in 2022 and $710,607 thereafter. Total interest paid was $23,820 in 2017 , $15,332 in 2016 and $5,631 in 2015 . The difference between interest paid and interest expense is due to the accrual of interest associated with the Senior Unsecured Notes and adjustments to the forward contract discussed in Note 14. |
STOCK PLANS
STOCK PLANS | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK PLANS | STOCK PLANS On April 23, 2015, the shareholders of the Company approved the 2015 Equity and Incentive Compensation Plan ("Employee Plan"), which replaced the 2006 Equity and Performance Incentive Plan, as amended ("EPI Plan"). The Employee Plan provides for the granting of options, appreciation rights, restricted shares, restricted stock units and performance-based awards up to an additional 5,400,000 of the Company's common shares. In addition, on April 23, 2015, the shareholders of the Company approved the 2015 Stock Plan for Non-Employee Directors ("2015 Director Plan"), which replaced the 2006 Stock Plan for Non-Employee Directors ("2006 Director Plan"). The 2015 Director Plan provides for the granting of options, restricted shares and restricted stock units up to an additional 300,000 of the Company's common shares. At December 31, 2017 , there were 4,324,951 common shares available for future grant under all plans. Stock Options The following table summarizes stock option activity for the year ended December 31, 2017 under all Plans: Year Ended December 31, 2017 Number of Weighted Average Exercise Price Balance at beginning of year 1,609,702 $ 51.32 Options granted 182,615 85.43 Options exercised (401,233 ) 41.44 Options canceled (28,636 ) 68.18 Balance at end of year 1,362,448 58.45 Exercisable at end of year 952,889 52.57 Options granted under both the Employee Plan and its predecessor plans may be outstanding for a maximum of 10 years from the date of grant. The majority of options granted vest ratably over a period of three years from the grant date. The exercise prices of all options were equal to the quoted market price of the Company's common shares at the date of grant. The Company issued shares of common stock from treasury upon all exercises of stock options in 2017 . In 2017 , all options issued were under the Employee Plan. The Company uses the Black-Scholes option pricing model for estimating fair values of options. In estimating the fair value of options granted, the expected option life is based on the Company's historical experience. The expected volatility is based on historical volatility. The weighted average assumptions for each of the three years ended December 31 were as follows: Year Ended December 31, 2017 2016 2015 Expected volatility 25.77 % 28.86 % 30.73 % Dividend yield 1.62 % 1.70 % 1.48 % Risk-free interest rate 1.90 % 1.27 % 1.32 % Expected option life (years) 4.5 4.5 4.5 Weighted average fair value per option granted during the year $ 17.50 $ 12.55 $ 16.35 The following table summarizes non-vested stock options for the year ended December 31, 2017 : Year Ended December 31, 2017 Number of Options Weighted Average Fair Value at Grant Date Balance at beginning of year 458,382 $ 14.32 Granted 182,615 17.50 Vested (205,066 ) 14.82 Forfeited (26,372 ) 14.58 Balance at end of year 409,559 15.47 The aggregate intrinsic value of options outstanding and exercisable which would have been received by the optionees had all awards been exercised at December 31, 2017 was $45,139 and $37,169 , respectively. The total intrinsic value of awards exercised during 2017 , 2016 and 2015 was $19,328 , $30,967 and $6,879 , respectively. The total fair value of options that vested during 2017 , 2016 and 2015 was $3,040 , $2,865 and $3,273 , respectively. The following table summarizes information about awards outstanding as of December 31, 2017 : Outstanding Exercisable Exercise Price Range Number of Stock Options Weighted Average Exercise Price Weighted Number of Stock Options Weighted Average Exercise Price Weighted Average Remaining Life (years) Under $49.99 508,257 $ 38.79 3.9 508,257 $ 38.79 3.9 $50.00 - $59.99 224,894 58.11 8.1 75,615 58.07 8.1 Over $60.00 629,297 74.45 7.3 369,017 70.43 6.5 1,362,448 6.2 952,889 5.2 Restricted Share Awards ("RSAs") The following table summarizes restricted share award activity for the year ended December 31, 2017 under all Plans: Year Ended December 31, 2017 Number of Shares Weighted Average Grant Date Fair Value Balance at beginning of year 46,159 $ 64.65 Shares granted 13,910 89.82 Shares vested (12,213 ) 90.37 Balance at end of year 47,856 71.54 RSAs are valued at the quoted market price on the grant date. The majority of RSAs vest over a period of three to five years. The Company issued common shares from treasury upon the granting of RSAs in 2017 . Restricted shares issued in 2017 were under the 2015 Director Plan. The remaining weighted average vesting period of all non-vested RSAs is 1.2 years as of December 31, 2017 . Restricted Stock Units ("RSUs") and Performance Share Units ("PSUs") The following table summarizes RSU and PSU activity for the year ended December 31, 2017 under all Plans: Year Ended December 31, 2017 Number of Units Weighted Average Grant Date Fair Value Balance at beginning of year 376,784 $ 59.75 Units granted 145,245 85.69 Units vested (71,845 ) 49.39 Units forfeited (31,218 ) 66.68 Balance at end of year 418,966 69.98 RSUs are valued at the quoted market price on the grant date. The majority of RSUs vest over a period of three to five years. The Company issues shares of common stock from treasury upon the vesting of RSUs and any earned dividend equivalents. Conversion of 10,193 RSUs to common shares in 2017 were deferred as part of the 2005 Deferred Compensation Plan for Executives (the "2005 Plan"). As of December 31, 2017 , 96,180 RSUs, including related dividend equivalents, have been deferred under the 2005 Plan. These units are reflected within dilutive shares in the calculation of earnings per share. In 2017 , 110,585 RSUs were issued under the Employee Plan. The remaining weighted average vesting period of all non-vested RSUs is 1.9 years as of December 31, 2017 . PSUs are valued at the quoted market price on the grant date. PSUs vest over a three -year period and are based on the Company's performance relative to pre-established performance goals. The Company issues common stock from treasury upon the vesting of PSUs and any earned dividend equivalents. In 2017 , the Company issued 34,660 PSU's and has 75,285 PSUs outstanding under the Employee Plan at a weighted average fair value of $70.09 per share. The remaining weighted average vesting period of all non-vested PSUs is 1.6 years as of December 31, 2017 . Stock-Based Compensation Expense Expense is recognized for all awards of stock-based compensation by allocating the aggregate grant date fair value over the vesting period. No expense is recognized for any stock options, restricted or deferred shares, RSUs or PSUs ultimately forfeited because recipients fail to meet vesting requirements. Total stock-based compensation expense recognized in the Consolidated Statements of Income for 2017 , 2016 and 2015 was $12,698 , $10,332 and $7,932 , respectively. The related tax benefit for 2017 , 2016 and 2015 was $4,861 , $3,955 and $3,037 , respectively. As of December 31, 2017 , total unrecognized stock-based compensation expense related to non-vested stock options, RSAs, RSUs and PSUs was $20,022 , which is expected to be recognized over a weighted average period of approximately 1.9 years years. Lincoln Stock Purchase Plan The 1995 Lincoln Stock Purchase Plan provides employees the ability to purchase open market shares on a commission-free basis up to a limit of ten thousand dollars annually. Under this plan, 800,000 shares have been authorized to be purchased. Shares purchased were 10,458 in 2017 , 15,827 in 2016 and 16,012 in 2015 . |
COMMON STOCK REPURCHASE PROGRAM
COMMON STOCK REPURCHASE PROGRAM | 12 Months Ended |
Dec. 31, 2017 | |
COMMON SHARE REPURCHASE PROGRAM | |
COMMON STOCK REPURCHASE PROGRAM | COMMON STOCK REPURCHASE PROGRAM The Company has a share repurchase program for up to 55 million of the Company's common shares. At management's discretion, the Company repurchases its common shares from time to time in the open market, depending on market conditions, stock price and other factors. During the year ended December 31, 2017 , the Company purchased a total of 0.5 million shares at an average cost per share of $89.58 . As of December 31, 2017 , 8.4 million shares remained available for repurchase under the stock repurchase program. The treasury shares have not been retired. |
RETIREMENT ANNUITY AND GUARANTE
RETIREMENT ANNUITY AND GUARANTEED CONTINUOUS EMPLOYMENT PLANS | 12 Months Ended |
Dec. 31, 2017 | |
General Discussion of Pension and Other Postretirement Benefits [Abstract] | |
RETIREMENT ANNUITY AND GUARANTEED CONTINUOUS EMPLOYMENT PLANS | RETIREMENT ANNUITY AND GUARANTEED CONTINUOUS EMPLOYMENT PLANS The Company maintains a number of defined benefit and defined contribution plans to provide retirement benefits for employees. These plans are maintained and contributions are made in accordance with the Employee Retirement Income Security Act of 1974 ("ERISA"), local statutory law or as determined by the Board of Directors. The plans generally provide benefits based upon years of service and compensation. Pension plans are funded except for a domestic non-qualified pension plan for certain key employees and certain foreign plans. The Company uses a December 31 measurement date for its plans. The Company does not have, and does not provide for, any postretirement or postemployment benefits other than pensions and certain non-U.S. statutory termination benefits. Defined Benefit Plans Contributions are made in amounts sufficient to fund current service costs on a current basis and to fund past service costs, if any, over various amortization periods. Obligations and Funded Status December 31, 2017 2016 U.S. pension plans Non-U.S. pension plans U.S. pension plans Non-U.S. pension plans Change in benefit obligations Benefit obligations at beginning of year $ 484,758 $ 79,972 $ 481,345 $ 76,824 Service cost 608 2,678 15,474 2,215 Interest cost 19,497 3,253 20,676 2,902 Plan participants' contributions — 176 — 148 Acquisitions (1) — 100,551 — — Actuarial loss (gain) 46,144 4,926 20,333 7,671 Benefits paid (6,409 ) (4,909 ) (29,002 ) (2,306 ) Settlements/curtailments (2) (37,523 ) (700 ) (24,068 ) — Currency translation — 7,576 — (7,482 ) Benefit obligations at end of year 507,075 193,523 484,758 79,972 Change in plan assets Fair value of plan assets at beginning of year 528,744 70,341 502,184 73,917 Actual return on plan assets 82,732 5,770 34,779 3,485 Employer contributions 55 1,684 20,087 1,286 Plan participants' contributions — 176 — 148 Acquisitions (1) — 32,599 — — Benefits paid (5,620 ) (3,196 ) (28,306 ) (1,840 ) Settlements (2) (37,523 ) (22 ) — — Currency translation — 5,992 — (6,655 ) Fair value of plan assets at end of year 568,388 113,344 528,744 70,341 Funded status at end of year 61,313 (80,179 ) 43,986 (9,631 ) Unrecognized actuarial net loss 90,679 25,987 122,109 24,476 Unrecognized prior service cost — (11 ) — (18 ) Unrecognized transition assets, net — 35 — 37 Net amount recognized $ 151,992 $ (54,168 ) $ 166,095 $ 14,864 (1) Acquisitions in 2017 relate to acquisition of Air Liquide Welding as discussed in Note 3 to the consolidated financial statements. (2) Settlements in 2017 resulting from lump sum pension payments. In August 2015, The Lincoln Electric Company, plan sponsor of the Lincoln Electric Retirement Annuity Program ("RAP") and subsidiary of the Company, entered into an agreement to purchase a group annuity contract from The Principal Financial Group ("Principal"). Under the agreement, Principal assumed the obligation to pay future pension benefits for specified U.S. retirees and surviving beneficiaries who retired on or before June 1, 2015 and are currently receiving payments from the RAP. The transaction will not change the amount of the monthly pension benefit received by affected retirees and surviving beneficiaries. The purchase was funded by existing plan assets and required no additional cash contribution. In October 2016, The Lincoln Electric Company amended the plan to freeze all benefit accruals for participants under the RAP effective as of December 31, 2016. The RAP includes approximately 1,500 domestic employees who fully transitioned to The Lincoln Electric Company Employee Savings Plan (“Savings Plan”), a defined contribution retirement savings plan. The Company recorded pension curtailment gains of $2,206 for the year ended December 31, 2016 related to the amendment. The Company did not make significant contributions to the defined benefit plans in the United States in 2017. The after-tax amounts of unrecognized actuarial net loss, prior service costs and transition assets included in Accumulated other comprehensive loss at December 31, 2017 were $85,253 , $(8) and $32 , respectively. The actuarial loss represents changes in the estimated obligation not yet recognized in the Consolidated Income Statement. The pre-tax amounts of unrecognized actuarial net loss, prior service credits and transition obligations expected to be recognized as components of net periodic benefit cost during 2018 are $3,793 , $1 and $3 , respectively. Amounts Recognized in Consolidated Balance Sheets December 31, 2017 2016 U.S. pension plans Non-U.S. pension plans U.S. pension plans Non-U.S. pension plans Prepaid pensions (1) $ 81,485 $ 368 $ 64,169 $ 228 Accrued pension liability, current (2) (5,332 ) (3,483 ) (5,064 ) (283 ) Accrued pension liability, long-term (3) (14,840 ) (77,064 ) (15,119 ) (9,576 ) Accumulated other comprehensive loss, excluding tax effects 90,679 26,011 122,109 24,495 Net amount recognized in the balance sheets $ 151,992 $ (54,168 ) $ 166,095 $ 14,864 (1) I ncluded in Other assets. (2) I ncluded in Other current liabilities. (3) I ncluded in Other liabilities. Components of Pension Cost for Defined Benefit Plans Year Ended December 31, 2017 2016 2015 Service cost $ 3,286 $ 17,689 $ 19,933 Interest cost 22,750 23,578 36,002 Expected return on plan assets (35,800 ) (35,716 ) (54,638 ) Amortization of prior service cost 15 (394 ) (626 ) Amortization of net loss (1) 4,014 9,893 19,406 Settlement/curtailment loss (gain) (2) 8,252 (1,062 ) 142,738 Pension cost for defined benefit plans (3) $ 2,517 $ 13,988 $ 162,815 (1) The amortization of net loss includes a $959 charge resulting from the deconsolidation of the Venezuelan subsidiary during the year ended December 31, 2016. (2) Pension settlement charges for the year ended December 31, 2017 resulting from lump sum pension payments. For the year ended December 31, 2015, the Company recorded pension settlement charges of $142,738, primarily related to the purchase of the group annuity contract. (3) The decrease in pension cost for defined benefit plans for the year ended December 31, 2017 was due to the U.S. plan freeze effective December 31, 2016. Pension Plans with Accumulated Benefit Obligations in Excess of Plan Assets December 31, 2017 2016 U.S. pension plans Non-U.S. pension plans U.S. pension plans Non-U.S. pension plans Projected benefit obligation $ 26,149 $ 182,512 $ 25,731 $ 47,776 Accumulated benefit obligation 25,870 174,667 25,460 45,128 Fair value of plan assets 5,977 102,107 5,548 38,200 The total accumulated benefit obligation for all plans was $691,827 as of December 31, 2017 and $560,230 as of December 31, 2016 . Benefit Payments for Plans Benefits expected to be paid for the plans are as follows: U.S. pension plans Non-U.S. pension plans Estimated Payments 2018 $ 38,031 $ 8,129 2019 29,782 8,633 2020 32,547 8,833 2021 28,542 9,133 2022 28,724 8,756 2023 through 2027 149,468 44,284 Assumptions Weighted average assumptions used to measure the benefit obligation for the Company's significant defined benefit plans as of December 31, 2017 and 2016 were as follows: December 31, 2017 2016 U.S. pension plans Non-U.S. pension plans U.S. pension plans Non-U.S. pension plans Discount Rate 3.7 % 2.0 % 4.2 % 3.3 % Rate of increase in compensation 2.5 % 2.7 % 2.5 % 3.7 % Weighted average assumptions used to measure the net periodic benefit cost for the Company's significant defined benefit plans for each of the three years ended December 31 were as follows: December 31, 2017 2016 2015 U.S. pension plans Non-U.S. pension plans U.S. pension plans Non-U.S. pension plans U.S. pension plans Non-U.S. pension plans Discount rate 4.2 % 2.2 % 4.5 % 3.9 % 4.0 % 4.0 % Rate of increase in compensation 2.5 % 2.5 % 2.6 % 3.7 % 2.5 % 3.9 % Expected return on plan assets 6.0 % 4.5 % 6.2 % 5.7 % 6.4 % 5.4 % To develop the discount rate assumptions, the Company refers to the yield derived from matching projected pension payments with maturities of bonds rated AA or an equivalent quality. The expected long-term rate of return assumption is based on the weighted average expected return of the various asset classes in the plans' portfolio and the targeted allocation of plan assets. The asset class return is developed using historical asset return performance as well as current market conditions such as inflation, interest rates and equity market performance. The rate of compensation increase is determined by the Company based upon annual reviews. Pension Plans' Assets The primary objective of the pension plans' investment policy is to ensure sufficient assets are available to provide benefit obligations when such obligations mature. Investment management practices must comply with ERISA or any other applicable regulations and rulings. The overall investment strategy for the defined benefit pension plans' assets is to achieve a rate of return over a normal business cycle relative to an acceptable level of risk that is consistent with the long-term objectives of the portfolio. The target allocation for plan assets is 15% to 25% equity securities and 75% to 85% debt securities. The following table sets forth, by level within the fair value hierarchy, the pension plans' assets as of December 31, 2017 : Pension Plans' Assets at Fair Value as of December 31, 2017 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Cash and cash equivalents $ 8,922 $ — $ — $ 8,922 Equity securities (1) 4,566 — — 4,566 Fixed income securities (2) U.S. government bonds 33,205 — — 33,205 Corporate debt and other obligations — 398,578 — 398,578 Investments measured at NAV (3) Common trusts and 103-12 investments (4) 199,066 Private equity funds (5) 37,395 Total investments at fair value $ 46,693 $ 398,578 $ — $ 681,732 The following table sets forth, by level within the fair value hierarchy, the pension plans' assets as of December 31, 2016 : Pension Plans' Assets at Fair Value as of December 31, 2016 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Cash and cash equivalents $ 3,652 $ — $ — $ 3,652 Equity securities (1) 4,071 — — 4,071 Fixed income securities (2) U.S. government bonds 20,036 — — 20,036 Corporate debt and other obligations — 134,051 — 134,051 Investments measured at NAV (3) Common trusts and 103-12 investments (4) 397,924 Private equity funds (5) 39,351 Total investments at fair value $ 27,759 $ 134,051 $ — $ 599,085 (1) Equity securities are primarily comprised of corporate stock and mutual funds directly held by the plans. Equity securities are valued using the closing price reported on the active market on which the individual securities are traded. (2) Fixed income securities are primarily comprised of governmental and corporate bonds directly held by the plans. Governmental and corporate bonds are valued using both market observable inputs for similar assets that are traded on an active market and the closing price on the active market on which the individual securities are traded. (3) Certain assets that are measured at fair value using the net asset value ("NAV") practical expedient have not been classified in the fair value hierarchy. (4) Common trusts and 103-12 investments (collectively "Trusts") are comprised of a number of investment funds that invest in a diverse portfolio of assets including equity securities, corporate and governmental bonds, equity and credit indexes and money markets. Trusts are valued at the NAV as determined by their custodian. NAV represents the accumulation of the unadjusted quoted close prices on the reporting date for the underlying investments divided by the total shares outstanding at the reporting dates. (5) Private equity funds consist of four funds seeking capital appreciation by investing in private equity investment partnerships and venture capital companies. Private equity fund valuations are based on the NAV of the underlying assets. Funds are comprised of unrestricted and restricted publicly traded securities and privately held securities. Unrestricted securities are valued at the closing market price on the reporting date. Restricted securities may be valued at a discount from such closing public market price, depending on facts and circumstances. Privately held securities are valued at fair value as determined by the fund directors and general partners. Supplemental Executive Retirement Plan The Company maintains a domestic unfunded Supplemental Executive Retirement Plan ("SERP") under which non-qualified supplemental pension benefits are paid to certain employees in addition to amounts received under the Company's qualified retirement plan which is subject to Internal Revenue Service ("IRS") limitations on covered compensation. The annual cost of this program has been included in the determination of total net pension costs shown above and was $772 , $2,113 and $1,703 in 2017 , 2016 and 2015 , respectively. The projected benefit obligation associated with this plan is also included in the pension disclosure shown above and was $17,047 , $16,738 and $14,643 at December 31, 2017 , 2016 and 2015 , respectively. In October 2016, the Company announced an amendment to freeze and vest all benefit accruals under the SERP, effective November 30, 2016. The Company recorded a curtailment loss of $1,144 for the year ended December 31, 2016 related to the amendment. The value of the frozen vested benefit was converted into an account balance and deferred. In addition, the Company created The Lincoln Electric Company Restoration Plan (“Restoration Plan”) effective January 1, 2017. The Restoration Plan is a domestic unfunded plan maintained for the purpose of providing certain employees the ability to fully participate in standard employee retirement offerings, which are limited by IRS regulations on covered compensation. Defined Contribution Plans Substantially all U.S. employees are covered under defined contribution plans. In October 2016, the Company announced a plan redesign of the Savings Plan that was effective January 1, 2017. The Savings Plan provides that eligible employees receive up to 6% of employees' annual compensation through Company matching contributions of 100% of the first 3% of employee compensation contributed to the plan, and automatic Company contributions equal to 3% of annual compensation. In addition, certain employees affected by the RAP freeze are also eligible to receive employer contributions equal to 6% of annual compensation for a minimum period of five years or to the end of the year in which they complete thirty years of service. The annual costs recognized for defined contribution plans were $25,285 , $8,361 and $10,082 in 2017 , 2016 and 2015 , respectively. Other Benefits The Cleveland, Ohio, area operations have a Guaranteed Continuous Employment Plan covering substantially all employees which, in general, provides that the Company will provide work for at least 75% of every standard work week (presently 40 hours). This plan does not guarantee employment when the Company's ability to continue normal operations is seriously restricted by events beyond the control of the Company. The Company has reserved the right to terminate this plan effective at the end of a calendar year by giving notice of such termination not less than six months prior to the end of such year. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The components of income before income taxes for the three years ended December 31, 2017 were as follows: Year Ended December 31, 2017 2016 2015 U.S. $ 213,171 $ 209,409 $ 118,037 Non-U.S. 153,065 67,979 51,750 Total $ 366,236 $ 277,388 $ 169,787 The components of income tax expense (benefit) for the three years ended December 31, 2017 were as follows: Year Ended December 31, 2017 2016 2015 Current: Federal $ 89,182 $ 57,090 $ 60,500 Non-U.S. 25,746 23,344 28,046 State and local 7,640 8,386 9,557 122,568 88,820 98,103 Deferred: Federal (4,391 ) (1,716 ) (47,902 ) Non-U.S. (82 ) (8,261 ) (3,362 ) State and local 666 172 (4,464 ) (3,807 ) (9,805 ) (55,728 ) Total $ 118,761 $ 79,015 $ 42,375 The U.S. Tax Cuts and Jobs Act (the "U.S. Tax Act") was enacted on December 22, 2017. The SEC staff issued Staff Accounting Bulletin No. 118 ("SAB 118"), which provides for a one-year measurement period and provides guidance for the application of ASC Topic 740, Income Taxes . In accordance with SAB 118, the Company recognized the income tax effects of the U.S. Tax Act to the extent applicable for the year of enactment. The expense primarily relates to taxes on the Company's unremitted foreign earnings and profits, partially offset by the re-measurement of deferred tax assets and liabilities. The amounts recorded are based on reasonable estimates and may require further adjustments as additional guidance from the U.S. Department of Treasury is provided, the Company's assumptions change or as further information and interpretations become available. The provisional amount recorded for the remeasurement of the Company's deferred tax assets and liabilities is a tax benefit of $14,532 . The Company is still analyzing certain aspects of the U.S. Tax Act and refining calculations that could potentially affect the measurement of deferred income tax balances, including law changes surrounding deferred compensation. The one-time transition tax is based on total post-1986 earnings and profits for which the Company had previously deferred from U.S. income taxes. The Company recorded a provisional amount for the one-time transition tax liability of $36,387 , resulting in an increase to income tax expense. The transition tax is based partially on the earnings and profits held in cash and partially on the earnings and profits invested in assets. The provisional amount recorded for taxes on the planned repatriation of certain earnings and profits subject to the transition tax is $6,667 . This additional tax pertains to foreign withholding taxes associated with the repatriation of earnings that are not indefinitely reinvested in the foreign operations. The net impact of the U.S. Tax Act provisional amounts are included in Income taxes in the accompanying Consolidated Statements of Income. The differences between total income tax expense and the amount computed by applying the statutory federal income tax rate to income before income taxes for the three years ended December 31, 2017 were as follows: Year Ended December 31, 2017 2016 2015 Statutory rate of 35% applied to pre-tax income $ 128,182 $ 97,086 $ 59,426 State and local income taxes, net of federal tax benefit 5,671 5,554 1,868 Excess tax benefits resulting from exercises of stock-based compensation (6,276 ) — — Net impact of the U.S. Tax Act 21,949 — — Foreign withholding taxes 6,667 — — Intangible and asset impairments/(write-off) — (4,438 ) 2,184 Foreign rate variance (13,929 ) (8,128 ) (11,399 ) Venezuela deconsolidation/devaluation — 5,192 11,396 Bargain purchase gain (17,556 ) — — Valuation allowances 102 (8,525 ) 2,900 Manufacturing deduction (5,922 ) (5,190 ) (9,207 ) U.S. tax cost (benefit) of foreign source income 294 (489 ) (8,754 ) Other (421 ) (2,047 ) (6,039 ) Total $ 118,761 $ 79,015 $ 42,375 Effective tax rate 32.4 % 28.5 % 25.0 % The 2017 effective tax rate is impacted by the nontaxable bargain purchase gain recorded in connection with the acquisition of Air Liquide Welding, excess tax benefits from the exercise of stock based compensation awards, the net impact of the U.S. Tax Act and income earned in lower tax rate jurisdictions. Total income tax payments, net of refunds, were $81,691 in 2017 , $72,965 in 2016 and $101,939 in 2015 . Deferred Taxes Significant components of deferred tax assets and liabilities at December 31, 2017 and 2016 , were as follows: December 31, 2017 2016 Deferred tax assets: Tax loss and credit carry-forwards $ 65,284 $ 52,270 Inventory 2,501 2,080 Other accruals 14,873 18,186 Employee benefits 18,468 23,596 Pension obligations 12,363 2,503 Other 4,923 3,020 Deferred tax assets, gross 118,412 101,655 Valuation allowance (68,694 ) (47,849 ) Deferred tax assets, net 49,718 53,806 Deferred tax liabilities: Property, plant and equipment 21,427 32,210 Intangible assets 10,729 17,506 Inventory 5,891 10,059 Pension obligations 16,137 17,915 Other 20,313 9,309 Deferred tax liabilities 74,497 86,999 Total deferred taxes $ (24,779 ) $ (33,193 ) At December 31, 2017 , certain subsidiaries had tax loss carry-forwards of approximately $80,961 that expire in various years from 2018 through 2033, plus $177,796 for which there is no expiration date. In assessing the realizability of deferred tax assets, the Company assesses whether it is more likely than not that a portion or all of the deferred tax assets will not be realized. The Company considers the scheduled reversal of deferred tax liabilities, tax planning strategies and projected future taxable income in making this assessment. At December 31, 2017 , a valuation allowance of $68,694 was recorded against certain deferred tax assets based on this assessment. The Company believes it is more likely than not that the tax benefit of the remaining net deferred tax assets will be realized. The amount of net deferred tax assets considered realizable could be increased or reduced in the future if the Company's assessment of future taxable income or tax planning strategies changes. The Company previously considered the earnings in non-U.S. subsidiaries to be indefinitely reinvested and, accordingly, recorded no deferred income taxes. As a result of the U.S. Tax Act, the Company determined it will repatriate earnings for certain non-U.S. subsidiaries, which are subject to foreign withholding taxes. The Company has estimated the associated tax to be $6,667 . The Company considers remaining earnings in all other non-U.S. subsidiaries to be indefinitely reinvested and has not recorded any deferred taxes as such estimate is not practicable. Unrecognized Tax Benefits Liabilities for unrecognized tax benefits are classified as Other liabilities unless expected to be paid in one year, with a portion recorded to Deferred income taxes to offset tax attributes. The Company recognizes interest and penalties related to unrecognized tax benefits in Income taxes. Current income tax expense included expense of $1,079 for the year ended December 31, 2017 and expense of $597 for the year ended December 31, 2016 for interest and penalties. For those same years, the Company's accrual for interest and penalties related to unrecognized tax benefits totaled $8,135 and $6,431 , respectively. The following table summarizes the activity related to unrecognized tax benefits: 2017 2016 Balance at beginning of year $ 18,499 $ 14,332 Increase related to current year tax provisions 1,448 1,975 Increase related to prior years' tax positions 1,460 5,188 Increase related to acquisitions 8,223 — Decrease related to settlements with taxing authorities (522 ) (265 ) Resolution of and other decreases in prior years' tax liabilities (1,734 ) (1,982 ) Other 1,075 (749 ) Balance at end of year $ 28,449 $ 18,499 The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was $12,709 at December 31, 2017 and $9,813 at December 31, 2016 . The Company files income tax returns in the U.S. and various state, local and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local or non-U.S. income tax examinations by tax authorities for years before 2013. The Company is currently subject to U.S. federal, various state audits and non-U.S. income tax audits. The Company is generally not able to precisely estimate the ultimate settlement amounts or timing until after the close of an audit. The Company evaluates its tax positions and establishes liabilities for uncertain tax positions that may be challenged by local authorities and may not be fully sustained. Unrecognized tax benefits are reviewed on an ongoing basis and are adjusted for changing facts and circumstances, including progress of tax audits and closing of statutes of limitations. Based on information currently available, management believes that additional audit activity could be completed and/or statutes of limitations may close relating to existing unrecognized tax benefits. It is reasonably possible there could be a further reduction of $2,414 in prior years' unrecognized tax benefits in 2018 . |
DERIVATIVES
DERIVATIVES | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES | DERIVATIVES The Company uses derivative instruments to manage exposures to currency exchange rates, interest rates and commodity prices arising in the normal course of business. Both at inception and on an ongoing basis, the derivative instruments that qualify for hedge accounting are assessed as to their effectiveness, when applicable. Hedge ineffectiveness was immaterial for each of the three years in the period ended December 31, 2017. The Company is subject to the credit risk of the counterparties to derivative instruments. Counterparties include a number of major banks and financial institutions. None of the concentrations of risk with any individual counterparty was considered significant at December 31, 2017 . The Company does not expect any counterparties to fail to meet their obligations. Cash flow hedges Certain foreign currency forward contracts are qualified and designated as cash flow hedges. The dollar equivalent gross notional amount of these short-term contracts was $35,489 at December 31, 2017 and $36,385 at December 31, 2016 . Fair value hedges Certain interest rate swap agreements were qualified and designated as fair value hedges. At December 31, 2017 , the Company had interest rate swap agreements outstanding that effectively convert notional amounts of $100,000 of debt from a fixed interest rate to a variable interest rate based on three-month LIBOR plus a spread of between 0.6% and 1.8% . The variable rates reset every three months, and cash flows related to these swaps are settled every three or six months. Net investment hedges From time to time, the Company executes foreign currency forward contracts that qualify and are designated as net investment hedges. No such contracts were outstanding at December 31, 2017 and December 31, 2016 . Derivatives not designated as hedging instruments The Company has certain foreign exchange forward contracts which are not designated as hedges. These derivatives are held as hedges of certain balance sheet exposures. The dollar equivalent gross notional amount of these contracts was $340,884 at December 31, 2017 and $261,168 at December 31, 2016 . Fair values of derivative instruments in the Company's Consolidated Balance Sheets follow: December 31, 2017 December 31, 2016 Derivatives by hedge designation Other Current Assets Other Current Liabilities Other Liabilities Other Current Assets Other Current Liabilities Other Liabilities Designated as hedging instruments: Foreign exchange contracts $ 519 $ 604 $ — $ 439 $ 923 $ — Interest rate swap agreements — — 5,085 — — 5,439 Not designated as hedging instruments: Foreign exchange contracts 2,257 3,747 — 746 1,529 — Total derivatives $ 2,776 $ 4,351 $ 5,085 $ 1,185 $ 2,452 $ 5,439 The effects of undesignated derivative instruments on the Company's Consolidated Statements of Income for the years ended December 31, 2017 and 2016 consisted of the following: Year Ended December 31, Derivatives by hedge designation Classification of gains (losses) 2017 2016 Not designated as hedges: Foreign exchange contracts Selling, general & administrative expenses $ 17,590 $ (21,096 ) Commodity contracts Cost of goods sold — (742 ) The effects of designated cash flow hedges on AOCI and the Company's Consolidated Statements of Income for the years ended December 31, 2017 and 2016 consisted of the following: December 31, Total gain (loss) recognized in AOCI, net of tax 2017 2016 Foreign exchange contracts $ (224 ) $ (512 ) Net investment contracts 1,099 1,099 The Company expects a loss of $224 related to existing contracts to be reclassified from AOCI, net of tax, to earnings over the next 12 months as the hedged transactions are realized. Year Ended December 31, Derivative type Gain (loss) reclassified from AOCI to: 2017 2016 Foreign exchange contracts Net sales $ 1,860 $ (1,580 ) Cost of goods sold 502 (407 ) |
FAIR VALUE
FAIR VALUE | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | FAIR VALUE The following table provides a summary of fair value assets and liabilities as of December 31, 2017 measured at fair value on a recurring basis: Description Balance as of December 31, 2017 Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Foreign exchange contracts $ 2,776 $ — $ 2,776 $ — Marketable securities 179,125 — 179,125 — Total assets $ 181,901 $ — $ 181,901 $ — Liabilities: Foreign exchange contracts $ 4,351 $ — $ 4,351 $ — Interest rate swap agreements 5,085 — 5,085 — Contingent considerations 7,086 — — 7,086 Deferred compensation 25,397 — 25,397 — Total liabilities $ 41,919 $ — $ 34,833 $ 7,086 The following table provides a summary of fair value assets and liabilities as of December 31, 2016 measured at fair value on a recurring basis: Description Balance as of December 31, 2016 Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Foreign exchange contracts $ 1,185 $ — $ 1,185 $ — Marketable securities 38,922 — 38,922 — Total assets $ 40,107 $ — $ 40,107 $ — Liabilities: Foreign exchange contracts $ 2,452 $ — $ 2,452 $ — Interest rate swap agreements 5,439 — 5,439 — Contingent considerations 8,154 — — 8,154 Forward contract 15,272 — — 15,272 Deferred compensation 25,244 — 25,244 — Total liabilities $ 56,561 $ — $ 33,135 $ 23,426 The Company's derivative contracts are valued at fair value using the market approach. The Company measures the fair value of foreign exchange contracts and interest rate swap agreements using Level 2 inputs based on observable spot and forward rates in active markets. During the year ended December 31, 2017 , there were no transfers between Levels 1, 2 or 3. The Company measures the fair value of marketable securities using Level 2 inputs based on quoted market prices for similar assets in active markets. In connection with acquisitions, the Company recorded contingent considerations fair valued at $7,086 as of December 31, 2017 . Under the contingent consideration agreements the amounts to be paid are based upon actual financial results of the acquired entity for specified future periods. The fair value of the contingent considerations are a Level 3 valuation and fair valued using either a probability weighted discounted cash flow analysis or an option pricing model. In connection with an acquisition, the Company obtained a controlling financial interest in the acquired entity and at the same time entered into a forward contract to obtain the remaining financial interest in the entity over a three -year period. The final payment associated with the forward contract was paid by the Company in the second quarter of 2017. The deferred compensation liability is the Company’s obligation under its executive deferred compensation plan. The Company measures the fair value of the liability using the market values of the participants’ underlying investment fund elections. The Company has various financial instruments, including cash and cash equivalents, short and long-term debt and forward contracts. While these financial instruments are subject to concentrations of credit risk, the Company has minimized this risk by entering into arrangements with a number of major banks and financial institutions and investing in several high-quality instruments. The Company does not expect any counterparties to fail to meet their obligations. The fair value of Cash and cash equivalents, Accounts receivable, Amounts due banks and Trade accounts payable approximated book value due to the short-term nature of these instruments at both December 31, 2017 and December 31, 2016 . Refer to Note 8 to the consolidated financial statements for the fair value estimate of debt. |
INVENTORY
INVENTORY | 12 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
INVENTORY | INVENTORY Inventories in the Consolidated Balance Sheet is comprised of the following components: December 31, 2017 2016 Raw materials $ 97,577 $ 76,811 Work-in-process 50,695 40,556 Finished goods 200,395 138,039 Total $ 348,667 $ 255,406 The valuation of LIFO inventories is made at the end of each year based on inventory levels and costs at that time. Accordingly, interim LIFO calculations are based on management’s estimates of expected year-end inventory levels and costs. Actual year-end inventory levels and costs may differ from interim LIFO inventory valuations. At December 31, 2017 and 2016 , approximately 32% and 40% of total inventories, respectively, were valued using the LIFO method. The excess of current cost over LIFO cost was $68,641 at December 31, 2017 and $61,329 at December 31, 2016 . |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2017 | |
Leases [Abstract] | |
LEASES | LEASES The Company leases sales offices, manufacturing facilities, warehouses and distribution centers, transportation equipment, office equipment and information technology equipment. Such leases, some of which are noncancelable and, in many cases, include renewals, expire at various dates. The Company pays most insurance, maintenance and taxes relating to leased assets. Rental expense was $20,450 in 2017 , $16,897 in 2016 and $16,703 in 2015 . At December 31, 2017 , total future minimum lease payments for noncancelable operating leases were $19,205 in 2018 , $13,358 in 2019 , $8,972 in 2020 , $5,252 in 2021 , $4,892 in 2022 and $5,629 thereafter. Assets held under capital leases are included in property, plant and equipment and are immaterial. |
CONTINGENCIES
CONTINGENCIES | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES | CONTINGENCIES The Company, like other manufacturers, is subject from time to time to a variety of civil and administrative proceedings arising in the ordinary course of business. Such claims and litigation include, without limitation, product liability claims, administrative claims, regulatory claims and health, safety and environmental claims, some of which relate to cases alleging asbestos induced illnesses. The claimants in the asbestos cases seek compensatory and punitive damages, in most cases for unspecified amounts. The Company believes it has meritorious defenses to these claims and intends to contest such suits vigorously. The Company accrues its best estimate of the probable costs after a review of the facts with management and counsel and taking into account past experience. If an unfavorable outcome is determined to be reasonably possible but not probable, or if the amount of loss cannot be reasonably estimated, disclosure would be provided for material claims or litigation. Many of the current cases are in differing procedural stages and information on the circumstances of each claimant, which forms the basis for judgments as to the validity or ultimate disposition of such actions, varies greatly. Therefore, in many situations a range of possible losses cannot be made. Reserves are adjusted as facts and circumstances change and related management assessments of the underlying merits and the likelihood of outcomes change. Moreover, reserves only cover identified and/or asserted claims. Future claims could, therefore, give rise to increases to such reserves. Based on the Company's historical experience in litigating product liability claims, including a significant number of dismissals, summary judgments and defense verdicts in many cases and immaterial settlement amounts, as well as the Company's current assessment of the underlying merits of the claims and applicable insurance, the Company believes resolution of these claims and proceedings, individually or in the aggregate, will not have a material effect on the Company's consolidated financial statements. |
PRODUCT WARRANTY COSTS
PRODUCT WARRANTY COSTS | 12 Months Ended |
Dec. 31, 2017 | |
Product Warranties Disclosures [Abstract] | |
PRODUCT WARRANTY COSTS | PRODUCT WARRANTY COSTS The changes in product warranty accruals for 2017 , 2016 and 2015 were as follows: December 31, 2017 2016 2015 Balance at beginning of year $ 21,053 $ 19,469 $ 15,579 Accruals for warranties 9,901 13,058 19,824 Settlements (11,500 ) (11,434 ) (15,458 ) Foreign currency translation and other adjustments (1) 2,575 (40 ) (476 ) Balance at end of year $ 22,029 $ 21,053 $ 19,469 (1) At December 31, 2017 , Foreign currency translation and other adjustments includes $2,299 in an acquired liability related to the Air Liquide Welding acquisition as discussed in Note 3 to the consolidated financial statements. |
QUARTERLY FINANCIAL DATA (UNAUD
QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
QUARTERLY FINANCIAL DATA (UNAUDITED) | QUARTERLY FINANCIAL DATA (UNAUDITED) First (1) Second (2) Third (3) Fourth (4) 2017 Net sales $ 580,897 $ 626,858 $ 669,491 $ 747,185 Gross profit 203,856 217,488 219,516 239,466 Income before income taxes 77,900 83,966 130,642 73,728 Net income 55,844 61,352 106,126 24,181 Basic earnings per share (5) $ 0.85 $ 0.93 $ 1.61 $ 0.37 Diluted earnings per share (5) $ 0.84 $ 0.92 $ 1.59 $ 0.36 2016 Net sales $ 550,772 $ 592,418 $ 567,646 $ 563,828 Gross profit 189,102 202,927 199,812 197,457 Income before income taxes 73,182 45,758 80,296 78,152 Net income 53,638 31,317 60,049 53,395 Basic earnings per share (5) $ 0.77 $ 0.46 $ 0.90 $ 0.81 Diluted earnings per share (5) $ 0.76 $ 0.45 $ 0.89 $ 0.81 (1) 2017 includes special item charges of $3,615 ( $2,734 after-tax) related to acquisition transaction costs. (2) 2017 includes special item charges of $4,498 ( $3,494 after-tax) related to acquisition transaction and integration costs. 2016 includes special item charges of $34,348 ( $33,251 after-tax) primarily related to the loss on deconsolidation of Venezuelan subsidiary and a tax benefit of $7,196 related to the reversal of an income tax valuation allowance as a result of a legal entity change to realign the Company's tax structure. (3) 2017 includes special item charges of $5,283 ( $3,260 after-tax) for pension settlement charges and acquisition-related items including $2,314 ( $1,745 after-tax) in amortization of step up in value of acquired inventories, $3,273 ( $2,229 after-tax) for acquisition transaction and integration costs and a $51,585 bargain purchase gain. (4) 2017 includes special item charges of $2,867 ( $1,770 after-tax) for pension settlement charges, $6,590 ( $6,198 after-tax) for rationalization and asset impairment charges, $28,616 for the net impact of the U.S. Tax Act and acquisition-related items including $2,264 ( $1,708 after-tax) in amortization of step up in value of acquired inventories, $3,616 ( $3,102 after-tax) for acquisition transaction and integration costs and a $1,935 adjustment to the bargain purchase gain. (5) The quarterly earnings per share ("EPS") amounts are each calculated independently. Therefore, the sum of the quarterly EPS amounts may not equal the annual totals. |
SCHEDULE II - VALUATION AND QUA
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Dec. 31, 2017 | |
Valuation and Qualifying Accounts [Abstract] | |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS LINCOLN ELECTRIC HOLDINGS, INC. (In thousands) Additions Description Balance at Beginning of Period Charged to Costs and Expenses Charged (Credited) to Other Accounts (1) Deductions (2) Balance at End of Period Allowance for doubtful accounts: Year Ended December 31, 2017 $ 7,768 $ 1,172 $ 9,501 $ 2,498 $ 15,943 Year Ended December 31, 2016 7,299 1,657 72 1,260 7,768 Year Ended December 31, 2015 7,858 1,969 (1,046 ) 1,482 7,299 Deferred tax asset valuation allowance: Year Ended December 31, 2017 47,849 16,222 4,854 (231 ) 68,694 Year Ended December 31, 2016 51,294 3,704 3,923 (11,072 ) 47,849 Year Ended December 31, 2015 48,840 7,533 (521 ) (4,558 ) 51,294 (1) Currency translation adjustment, additions from acquisitions and other adjustments. (2) For the Allowance for doubtful accounts, deductions relate to uncollectible accounts written-off, net of recoveries. For the Deferred tax asset valuation allowance, deductions relate to the reversal of valuation allowances due to the realization of net operating loss carryforwards. |
SIGNIFICANT ACCOUNTING POLICI30
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Prepaid Expenses [Policy Text Block] | Prepaid Expenses Prepaid expenses include prepaid insurance, prepaid rent, prepaid service contracts and other prepaid items. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of Lincoln Electric Holdings, Inc. and its wholly-owned and majority-owned subsidiaries for which it has a controlling interest (the "Company") after elimination of all inter-company accounts, transactions and profits. |
Translation of Foreign Currencies | Translation of Foreign Currencies Asset and liability accounts are translated into U.S. dollars using exchange rates in effect at the dates of the Consolidated Balance Sheets; revenue and expense accounts are translated at average monthly exchange rates. Translation adjustments are reflected as a component of Total equity. For subsidiaries operating in highly inflationary economies, both historical and current exchange rates are used in translating balance sheet accounts and translation adjustments are included in Net income. The translation of assets and liabilities originally denominated in foreign currencies into U.S. dollars is for consolidation purposes, and does not necessarily indicate that the Company could realize or settle the reported value of those assets and liabilities in U.S. dollars. Additionally, such a translation does not necessarily indicate that the Company could return or distribute the reported U.S. dollar value of the net equity of its foreign operations to shareholders. |
Cash Equivalents | Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. |
Accounts Receivable | Accounts Receivable The Company maintains an allowance for doubtful accounts for estimated losses from the failure of its customers to make required payments for products delivered. The Company estimates this allowance based on the age of the related receivable, knowledge of the financial condition of customers, review of historical receivables and reserve trends and other pertinent information. If the financial condition of customers deteriorates or an unfavorable trend in receivable collections is experienced in the future, additional allowances may be required. |
Inventories | Inventories Inventories are valued at the lower of cost or net realizable value. Fixed manufacturing overhead costs are allocated to inventory based on normal production capacity and abnormal manufacturing costs are recognized as period costs. Cost for a substantial portion of U.S. inventories is determined on a last-in, first-out (“ LIFO”) basis. At December 31, 2017 and 2016 , approximately 32% and 40% of total inventories, respectively, were valued using the LIFO method. Cost of other inventories is determined by costing methods that approximate a first-in, first-out (“FIFO”) basis. Refer to Note 15 to the consolidated financial statements for additional details. Reserves are maintained for estimated obsolescence or excess inventory equal to the difference between the cost of inventory and the estimated net realizable value based upon assumptions about future demand and market conditions. |
Marketable Securities | Marketable Securities The Company's marketable securities consist of short-term highly liquid investments classified as available-for-sale and recorded at fair value using quoted market prices for similar assets at the end of the reporting period. |
Equity Investments | Equity Investments Investments in businesses which the Company does not own a majority interest and does not have the ability to exercise significant influence over operating and financial policies are accounted for using the equity method. The Company's 50% ownership interest in equity investments includes investments in Turkey and Chile. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are stated at cost and include improvements which significantly increase capacities or extend the useful lives of existing plant and equipment. Depreciation and amortization are computed using a straight-line method over useful lives ranging from three to 20 years for machinery, tools and equipment, and up to 40 years for buildings. Net gains or losses related to asset dispositions are recognized in earnings in the period in which dispositions occur. Routine maintenance, repairs and replacements are expensed as incurred. The Company capitalizes interest costs associated with long-term construction in progress. |
Goodwill and Intangibles | Goodwill and Intangibles Goodwill is recorded when the cost of acquired businesses exceeds the fair value of the identifiable net assets acquired. Intangible assets other than goodwill are recorded at fair value at the time acquired or at cost, if applicable. Intangible assets that do not have indefinite lives are amortized in line with the pattern in which the economic benefits of the intangible asset are consumed. If the pattern of economic benefit cannot be reliably determined, the intangible assets are amortized on a straight-line basis over the shorter of the legal or estimated life. Goodwill and indefinite-lived intangibles assets are not amortized, but are tested for impairment in the fourth quarter using the same dates each year or more frequently if changes in circumstances or the occurrence of events indicate potential impairment. In performing the annual impairment test, the fair value of each indefinite-lived intangible asset is compared to its carrying value and an impairment charge is recorded if the carrying value exceeds the fair value. For goodwill, the Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, and whether it is necessary to perform the quantitative goodwill impairment test. The quantitative test is required only if the Company concludes that it is more likely than not that a reporting unit’s fair value is less than its carrying amount. For 2017, the Company early adopted Accounting Standard Update No. 2017-04, " Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.". As such, the quantitative goodwill impairment analysis is now a one-step process. The Company compared the fair value of each reporting unit with its carrying amount. If the carrying amount exceeds the fair value, an impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to that reporting unit. Fair values are determined using established business valuation techniques and models developed by the Company, estimates of market participant assumptions of future cash flows, future growth rates and the applicable discount rates to value estimated cash flows. Changes in economic and operating conditions impacting these assumptions could result in asset impairments in future periods. |
Long-Lived Assets | Long-Lived Assets The Company periodically evaluates whether current facts or circumstances indicate that the carrying value of its depreciable long-lived assets to be held and used may not be recoverable. If such circumstances are determined to exist, an estimate of undiscounted future cash flows produced by the long-lived asset, or the appropriate grouping of assets, is compared to the carrying value to determine whether impairment exists. If an asset is determined to be impaired, a loss is recognized to the extent that carrying value exceeds fair value. Fair value is measured based on quoted market prices in active markets, if available. If quoted market prices are not available, the estimate of fair value is based on various valuation techniques, including the discounted value of estimated future cash flows. |
Fair Value Measurements | Fair Value Measurements Financial assets and liabilities, such as the Company's defined benefit pension plan assets and derivative contracts, are valued at fair value using the market and income valuation approaches. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The following hierarchy is used to classify the inputs that measure fair value: Level 1 Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets. Level 2 Inputs to the valuation methodology include: • Quoted prices for similar assets or liabilities in active markets; • Quoted prices for identical or similar assets or liabilities in inactive markets; • Inputs other than quoted prices that are observable for the asset or liability; and • Inputs that are derived principally from or corroborated by observable market data by correlation or other means. If the asset or liability has a specific (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability. Level 3 Inputs to the valuation methodology are unobservable and significant to the fair value measurement. |
Product Warranties | Product Warranties The Company accrues for product warranty claims based on historical experience and the expected material and labor costs to provide warranty service. Warranty services are generally provided for periods up to three years from the date of sale. The accrual for product warranty claims is included in Other current liabilities. |
Revenue Recognition | Revenue Recognition Substantially all of the Company's revenues are recognized when the risks and rewards of ownership and title to the product have transferred to the customer, which generally occurs at point of shipment. The Company recognizes any discounts, credits, returns, rebates and incentive programs based on reasonable estimates as a reduction of sales to arrive at Net sales at the same time the related revenue is recorded. For contracts accounted for under the percentage of completion method, revenue recognition is typically based upon the ratio of costs incurred to date compared with estimated total costs to complete. The cumulative impact of revisions to total estimated costs is reflected in the period of the change, including anticipated losses. |
Distribution Costs | Distribution Costs Distribution costs, including warehousing and freight related to product shipments, are included in Cost of goods sold. |
Stock-Based Compensation | Stock-Based Compensation Expense is recognized for all awards of stock-based compensation by allocating the aggregate grant date fair value over the vesting period. No expense is recognized for any stock options, restricted or deferred shares or restricted stock units ultimately forfeited because the recipients fail to meet vesting requirements. Common stock issuable upon the exercise of employee stock options is excluded from the calculation of diluted earnings per share when the calculation of option equivalent shares is anti-dilutive. |
Financial Instruments | Financial Instruments The Company uses derivative instruments to manage exposures to interest rates, commodity prices and currency exchange rate fluctuations on certain purchase and sales transactions, balance sheet and net investment exposures. Derivative contracts to hedge currency and commodity exposures are generally written on a short-term basis, but may cover exposures for up to two years while interest rate contracts may cover longer periods consistent with the terms of the underlying debt. The Company does not enter into derivatives for trading or speculative purposes. All derivatives are recognized at fair value on the Company's Consolidated Balance Sheets. The accounting for gains and losses resulting from changes in fair value depends on the use of the derivative and whether it is designated and qualifies for hedge accounting. The Company formally documents the relationship of the hedge with the hedged item as well as the risk-management strategy for all designated hedges. Both at inception and on an ongoing basis, the hedging instrument is assessed as to its effectiveness, when applicable. If and when a derivative is determined not to be highly effective as a hedge, the underlying hedged transaction is no longer likely to occur, or the derivative is terminated, hedge accounting is discontinued. The cash flows from settled derivative contracts are recognized in Net cash provided by operating activities in the Company's Consolidated Statements of Cash Flows. The Company is subject to the credit risk of the counterparties to derivative instruments. Counterparties include a number of major banks and financial institutions. The Company manages individual counterparty exposure by monitoring the credit rating of the counterparty and the size of financial commitments and exposures between the Company and the counterparty. Cash flow hedges Certain foreign currency forward contracts are qualified and designated as cash flow hedges. The effective portion of the fair value unrealized gain or loss on cash flow hedges are reported as a component of Accumulated other comprehensive income ("AOCI") with offsetting amounts recorded as Other current assets, Other assets, Other current liabilities or Other liabilities depending on the position and the duration of the contract. At settlement, the realized gain or loss is recorded in Cost of goods sold or Net sales for hedges of purchases and sales, respectively, in the same period or periods during which the hedged transaction affects earnings. The ineffective portion on cash flow hedges is recognized in current earnings. Fair value hedges Certain interest rate swap agreements were qualified and designated as fair value hedges. The interest rate swap agreements designated as fair value hedges meet the shortcut method requirements under accounting standards for derivatives and hedging. Accordingly, changes in the fair value of these agreements are considered to exactly offset changes in the fair value of the underlying long-term debt. Changes in fair value are recorded in Other assets or Other liabilities with offsetting amounts recorded as a fair value adjustment to the carrying value of Long-term debt, less current portion. Net investment hedges For derivative instruments that qualify as a net investment hedge, the effective portion of the fair value gains or losses are recognized in AOCI with offsetting amounts recorded as Other current assets, Other assets, Other current liabilities or Other liabilities depending on the position and the duration of the contract. The gains or losses are subsequently reclassified to Selling, general and administrative expenses, as the underlying hedged investment is liquidated. Derivatives not designated as hedging instruments The Company has certain foreign exchange forward contracts which are not designated as hedges. These derivatives are held as hedges of certain balance sheet exposures. The gains or losses on t hese contracts are recognized in Selling, general and administrative expenses, offsetting the losses or gains on the exposures being hedged |
Research and Development | Research and Development Research and development costs are charged to Selling, general & administrative expenses as incurred and totaled $47,899 , $44,720 and $47,182 in 2017 , 2016 and 2015 , respectively. |
Bonus | Bonus Included in Selling, general & administrative expenses are the costs related to the Company's discretionary employee bonus programs, which for certain U.S.-based employees are net of hospitalization costs. |
Income Taxes | Income Taxes Deferred income taxes are recognized at currently enacted tax rates for temporary differences between the GAAP and income tax basis of assets and liabilities and operating loss and tax credit carry-forwards. In assessing the realizability of deferred tax assets, the Company assesses whether it is more likely than not that a portion or all of the deferred tax assets will not be realized. |
Estimates | Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions in certain circumstances that affect the amounts reported in the accompanying consolidated financial statements and notes. Actual results could differ from these estimates. |
Reclassification | Reclassification Certain reclassifications have been made to prior year financial statements to conform to current year classifications. |
Acquisitions | Acquisitions Upon acquisition of a business, the Company uses the income, market, or cost approach (or a combination thereof) for the valuation as appropriate. The valuation inputs in these models and analyses are based on market participant assumptions. Market participants are considered to be buyers and sellers unrelated to the Company in the principal or most advantageous market for the asset or liability. Fair value estimates are based on a series of judgments about future events and uncertainties and rely heavily on estimates and assumptions. Management values property, plant and equipment using the cost approach supported where available by observable market data, which includes consideration of obsolescence. Management values acquired intangible assets using the relief from royalty method, a form of the income approach supported by observable market data for peer companies. Acquired inventories are marked to fair value. For certain items, the carrying value is determined to be a reasonable approximation of fair value based on information available to the Company. Refer to Note 3 to the consolidated financial statements for additional details. Acquired companies are included in the Company's consolidated financial statements as of the date of acquisition. |
Segments | 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. Welding products include arc welding power sources, CNC and plasma cutters, wire feeding systems, robotic welding packages, integrated automation systems, fume extraction equipment, consumable electrodes, fluxes and welding accessories and specialty welding consumables and fabrication. The Company's product offering also includes oxy-fuel cutting systems and regulators and torches used in oxy-fuel welding, cutting and brazing. In addition, the Company has a leading global position in the brazing and soldering alloys market. During the first quarter of 2016, the Company realigned its organizational and leadership structure into three operating segments to support growth strategies and enhance the utilization of the Company's worldwide resources and global sourcing initiatives. The operating segments consist of Americas Welding, International Welding and The Harris Products Group. The Americas Welding segment includes welding operations in North and South America. The International Welding segment primarily includes welding operations in Europe, Africa, Asia and Australia. The Harris Products Group includes the Company's global cutting, soldering and brazing businesses as well as its retail business in the United States. 2015 results reflect the realigned segment structure. Segment performance is measured and resources are allocated based on a number of factors, the primary profit measure being adjusted earnings before interest and income taxes ("Adjusted EBIT"). 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, 2017 approximately 32% of total inventories were valued using the LIFO method. At December 31, 2016 and 2015 approximately 40% of total inventories were valued using the LIFO method. LIFO is used for a substantial portion of U.S. inventories included in Americas 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. |
SIGNIFICANT ACCOUNTING POLICI31
SIGNIFICANT ACCOUNTING POLICIES SIGNIFICANT ACCOUNTING POLICIES (Tables) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment [Table Text Block] | Property, plant and equipment, net in the Consolidated Balance Sheet is comprised of the following components: December 31, 2017 2016 Land $ 66,653 $ 46,219 Buildings 421,722 335,885 Machinery and equipment 776,436 706,938 1,264,811 1,089,042 Less accumulated depreciation 787,780 716,665 Total $ 477,031 $ 372,377 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Computation of basic and diluted earnings per share | The following table sets forth the computation of basic and diluted earnings per share: Year Ended December 31, 2017 2016 2015 Numerator: Net income $ 247,503 $ 198,399 $ 127,478 Denominator: Basic weighted average shares outstanding 65,739 67,462 74,111 Effect of dilutive securities - Stock options and awards 904 694 743 Diluted weighted average shares outstanding 66,643 68,156 74,854 Basic earnings per share $ 3.76 $ 2.94 $ 1.72 Diluted earnings per share $ 3.71 $ 2.91 $ 1.70 |
ACQUISITIONS Business Combinati
ACQUISITIONS Business Combination (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Business Combination [Table Text Block] | The following table summarizes the purchase price allocation for the Air Liquide Welding acquisition: Assets acquired and liabilities assumed As of July 31, 2017 Accounts receivable $ 89,442 Inventory (1) 97,803 Property, plant and equipment (2) 73,056 Intangible assets (3) 11,715 Accounts payable (65,640 ) Pension liability (67,563 ) Bargain purchase gain (49,650 ) Net other assets and liabilities (4) (27,210 ) Total purchase price, net of cash acquired (5) $ 61,953 (1) Inventories acquired were sold in 2017 resulting in a $4,578 increase in cost of sales for the amortization of step up in the value of acquired inventories. (2) Property, plant and equipment acquired includes a number of manufacturing and distribution sites, including the related facilities, land and leased sites, and machinery and equipment for use in manufacturing operations. (3) $7,099 of the intangible asset balance was assigned to a trade name expected to have an indefinite life. Of the remaining amount, $1,183 was assigned to a finite-lived trade name ( 10 year weighted average useful life) and $3,433 was assigned to other intangible assets ( 9 year weighted average life). (4) Consists primarily of other accrued liabilities. (5) Reflects a receivable from seller of $10,670 as of December 31, 2017 for an agreed upon purchase price adjustment received in the first quarter of 2018. |
GOODWILL AND INTANGIBLES (Table
GOODWILL AND INTANGIBLES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in the carrying amount of goodwill by reportable segment | The changes in the carrying amount of goodwill by reportable segments for the years ended December 31, 2017 and 2016 were as follows: Americas Welding International Welding The Harris Products Group Consolidated Balance as of December 31, 2015 $ 152,335 $ 23,345 $ 11,824 $ 187,504 Additions and adjustments (1)(2) 43,217 (30 ) (301 ) 42,886 Foreign currency translation 826 349 354 1,529 Balance as of December 31, 2016 196,378 23,664 11,877 231,919 Additions and adjustments (2) (76 ) — (301 ) (377 ) Impairment charges (3) (1,091 ) — — (1,091 ) Foreign currency translation 2,048 2,003 80 4,131 Balance as of December 31, 2017 $ 197,259 $ 25,667 $ 11,656 $ 234,582 |
Schedule of gross and net intangible assets other than goodwill by asset class | Gross carrying values and accumulated amortization of intangible assets other than goodwill by asset class were as follows: December 31, 2017 December 31, 2016 Gross Amount Accumulated Amortization Gross Accumulated Intangible assets not subject to amortization Trademarks and trade names $ 24,235 $ 17,113 Intangible assets subject to amortization Trademarks and trade names $ 41,203 $ 24,147 $ 38,972 $ 20,648 Customer relationships 93,139 47,175 91,216 39,033 Patents 27,777 12,978 28,073 11,467 Other 57,351 31,953 52,071 26,209 Total intangible assets subject to amortization $ 219,470 $ 116,253 $ 210,332 $ 97,357 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of financial information for the reportable segments | Financial information for the reportable segments follows: Americas Welding (1) International Welding (2) The Harris Products Group Corporate / Eliminations (3) Consolidated For the Year Ended December 31, 2017 Net sales $ 1,609,779 $ 724,024 $ 290,628 $ — $ 2,624,431 Inter-segment sales 97,382 18,860 8,190 (124,432 ) $ — Total $ 1,707,161 $ 742,884 $ 298,818 $ (124,432 ) $ 2,624,431 Adjusted EBIT $ 291,866 $ 41,721 $ 36,442 $ 309 $ 370,338 Special items charge (gain) 9,242 10,076 — (34,648 ) $ (15,330 ) EBIT $ 282,624 $ 31,645 $ 36,442 $ 34,957 $ 385,668 Interest income 4,788 Interest expense (24,220 ) Income before income taxes $ 366,236 Total assets $ 1,253,411 $ 919,995 $ 175,151 $ 57,990 $ 2,406,547 Equity investments in affiliates 4,037 24,489 — — $ 28,526 Capital expenditures 43,158 14,549 3,949 — $ 61,656 Depreciation and amortization 47,038 18,364 2,885 (172 ) $ 68,115 For the Year Ended December 31, 2016 Net sales $ 1,494,982 $ 507,289 $ 272,343 $ — $ 2,274,614 Inter-segment sales 93,612 15,975 8,709 (118,296 ) $ — Total $ 1,588,594 $ 523,264 $ 281,052 $ (118,296 ) $ 2,274,614 Adjusted EBIT $ 266,633 $ 29,146 $ 32,380 $ 564 $ 328,723 Special items charge — — — 34,348 $ 34,348 EBIT $ 266,633 $ 29,146 $ 32,380 $ (33,784 ) $ 294,375 Interest income 2,092 Interest expense (19,079 ) Income before income taxes $ 277,388 Total assets $ 1,278,417 $ 529,223 $ 161,391 $ (25,594 ) $ 1,943,437 Equity investments in affiliates 3,946 23,355 — — $ 27,301 Capital expenditures 35,314 12,354 2,209 — $ 49,877 Depreciation and amortization 47,359 15,063 2,860 (209 ) $ 65,073 For the Year Ended December 31, 2015 Net sales $ 1,741,350 $ 530,460 $ 263,981 $ — $ 2,535,791 Inter-segment sales 92,538 18,747 9,312 (120,597 ) $ — Total $ 1,833,888 $ 549,207 $ 273,293 $ (120,597 ) $ 2,535,791 Adjusted EBIT $ 316,689 $ 34,511 $ 27,882 $ (275 ) $ 378,807 Special items charge 173,239 16,671 — — $ 189,910 EBIT $ 143,450 $ 17,840 $ 27,882 $ (275 ) $ 188,897 Interest income 2,714 Interest expense (21,824 ) Income before income taxes $ 169,787 Total assets $ 1,165,817 $ 543,254 $ 143,905 $ (68,805 ) $ 1,784,171 Equity investments in affiliates 3,791 23,450 — — $ 27,241 Capital expenditures 35,721 12,059 2,727 — $ 50,507 Depreciation and amortization 45,447 15,776 2,978 (194 ) $ 64,007 |
Schedule of geographical split of the Company's net sales, based on the location of the customers, and property plant equipment | 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, 2017 2016 2015 Net sales: United States $ 1,388,816 $ 1,308,635 $ 1,387,882 Foreign countries 1,235,615 965,979 1,147,909 Total $ 2,624,431 $ 2,274,614 $ 2,535,791 December 31, 2017 2016 2015 Property, plant and equipment, net: United States $ 194,491 $ 176,041 $ 173,974 Foreign countries 282,931 196,679 237,718 Eliminations (391 ) (343 ) (369 ) Total $ 477,031 $ 372,377 $ 411,323 |
RATIONALIZATION AND ASSET IMP36
RATIONALIZATION AND ASSET IMPAIRMENTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Summary of the activity related to the rationalization liabilities by segment | Americas Welding International Welding Consolidated Balance at December 31, 2015 $ 67 $ 7,598 $ 7,665 Payments and other adjustments (67 ) (2,408 ) (2,475 ) Balance at December 31, 2016 $ — $ 5,190 $ 5,190 Payments and other adjustments — (3,536 ) (3,536 ) Charged to expense — 5,149 5,149 Balance at December 31, 2017 $ — $ 6,803 $ 6,803 |
ACCUMULATED OTHER COMPREHENSI37
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME | |
Components of accumulated other comprehensive loss | The following tables set forth the total changes in AOCI by component, net of taxes, for the years ended December 31, 2017 and 2016 : Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges Defined benefit pension plan activity Currency translation adjustment Total Balance at December 31, 2015 $ 548 $ (99,776 ) $ (197,039 ) $ (296,267 ) Other comprehensive income (loss) before reclassification 2,026 (1,268 ) (2) (36,646 ) (3) (35,888 ) Amounts reclassified from AOCI (1,987 ) (1) 5,105 (2) — 3,118 Net current-period other comprehensive income (loss) 39 3,837 (36,646 ) (32,770 ) Balance at December 31, 2016 $ 587 $ (95,939 ) $ (233,685 ) $ (329,037 ) Other comprehensive income (loss) before reclassification (2,074 ) 2,736 (2) 70,901 (3) 71,563 Amounts reclassified from AOCI 2,362 (1) 7,926 (2) — 10,288 Net current-period other comprehensive income (loss) 288 10,662 70,901 81,851 Balance at December 31, 2017 $ 875 $ (85,277 ) $ (162,784 ) $ (247,186 ) (1) During 2017 , this AOCI reclassification is a component of Net sales of $1,860 (net of tax of $693 ) and Cost of goods sold of $502 (net of tax of $93 ); during 2016 , the reclassification is a component of Net sales of $(1,580) (net of tax of $(577) ) and Cost of goods sold of $(407) (net of tax of $(24) ). Refer to Note 13 to the consolidated financial statements for additional details. (2) This AOCI component is included in the computation of net periodic pension costs (net of tax of $19,252 and $4,297 during the years ended December 31, 2017 and 2016 , respectively). Refer to Note 11 to the consolidated financial statements for additional details. (3) The Other comprehensive income before reclassifications excludes $115 and $(106) attributable to Non-controlling interests in the years ended December 31, 2017 and 2016 , respectively. The reclassified AOCI component is included in the computation of Non-controlling interests. Refer to Consolidated Statements of Equity for additional details. |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Instrument [Line Items] | |
Schedule of debt | At December 31, 2017 and 2016 , debt consisted of the following: December 31, 2017 2016 Long-term debt Senior Unsecured Notes due through 2045, interest at 2.8% to 4.0% (net of debt issuance costs of $1,491 and $1,586 at December 31, 2017 and 2016, respectively), swapped $100,000 to variable interest rates of 2.0% to 3.2% $ 693,424 $ 692,975 Other borrowings due through 2023, interest up to 8.0% 10,823 10,860 704,247 703,835 Less current portion 111 131 Long-term debt, less current portion 704,136 703,704 Short-term debt Amounts due banks, interest at 31.8% (29.0% in 2016) 2,020 1,758 Current portion long-term debt 111 131 Total short-term debt 2,131 1,889 Total debt $ 706,267 $ 705,593 |
Senior Notes 2015 [Member] | |
Debt Instrument [Line Items] | |
Schedule of debt | The maturity and interest rates of the 2015 Notes are as follows: Amount Maturity Date Interest Rate Series A $ 100,000 August 20, 2025 3.15 % Series B 100,000 August 20, 2030 3.35 % Series C 50,000 April 1, 2035 3.61 % Series D 100,000 April 1, 2045 4.02 % |
Senior Notes 2016 [Member] | |
Debt Instrument [Line Items] | |
Schedule of debt | The maturity and interest rates of the 2016 Notes are as follows: Amount Maturity Date Interest Rate Series A $ 100,000 October 20, 2028 2.75 % Series B 100,000 October 20, 2033 3.03 % Series C 100,000 October 20, 2037 3.27 % Series D 50,000 October 20, 2041 3.52 % |
STOCK PLANS (Tables)
STOCK PLANS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of stock option activity | The following table summarizes stock option activity for the year ended December 31, 2017 under all Plans: Year Ended December 31, 2017 Number of Weighted Average Exercise Price Balance at beginning of year 1,609,702 $ 51.32 Options granted 182,615 85.43 Options exercised (401,233 ) 41.44 Options canceled (28,636 ) 68.18 Balance at end of year 1,362,448 58.45 Exercisable at end of year 952,889 52.57 |
Weighted average assumptions used for estimating fair value of options granted | The weighted average assumptions for each of the three years ended December 31 were as follows: Year Ended December 31, 2017 2016 2015 Expected volatility 25.77 % 28.86 % 30.73 % Dividend yield 1.62 % 1.70 % 1.48 % Risk-free interest rate 1.90 % 1.27 % 1.32 % Expected option life (years) 4.5 4.5 4.5 Weighted average fair value per option granted during the year $ 17.50 $ 12.55 $ 16.35 |
Summary of nonvested stock options | The following table summarizes non-vested stock options for the year ended December 31, 2017 : Year Ended December 31, 2017 Number of Options Weighted Average Fair Value at Grant Date Balance at beginning of year 458,382 $ 14.32 Granted 182,615 17.50 Vested (205,066 ) 14.82 Forfeited (26,372 ) 14.58 Balance at end of year 409,559 15.47 |
Summary of information about awards outstanding, by exercise price range | The following table summarizes information about awards outstanding as of December 31, 2017 : Outstanding Exercisable Exercise Price Range Number of Stock Options Weighted Average Exercise Price Weighted Number of Stock Options Weighted Average Exercise Price Weighted Average Remaining Life (years) Under $49.99 508,257 $ 38.79 3.9 508,257 $ 38.79 3.9 $50.00 - $59.99 224,894 58.11 8.1 75,615 58.07 8.1 Over $60.00 629,297 74.45 7.3 369,017 70.43 6.5 1,362,448 6.2 952,889 5.2 |
Summary of restricted share award activity | The following table summarizes restricted share award activity for the year ended December 31, 2017 under all Plans: Year Ended December 31, 2017 Number of Shares Weighted Average Grant Date Fair Value Balance at beginning of year 46,159 $ 64.65 Shares granted 13,910 89.82 Shares vested (12,213 ) 90.37 Balance at end of year 47,856 71.54 |
Summary of restricted stock unit activity | The following table summarizes RSU and PSU activity for the year ended December 31, 2017 under all Plans: Year Ended December 31, 2017 Number of Units Weighted Average Grant Date Fair Value Balance at beginning of year 376,784 $ 59.75 Units granted 145,245 85.69 Units vested (71,845 ) 49.39 Units forfeited (31,218 ) 66.68 Balance at end of year 418,966 69.98 |
RETIREMENT ANNUITY AND GUARAN40
RETIREMENT ANNUITY AND GUARANTEED CONTINUOUS EMPLOYMENT PLANS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
General Discussion of Pension and Other Postretirement Benefits [Abstract] | |
Obligations and Funded Status | Obligations and Funded Status December 31, 2017 2016 U.S. pension plans Non-U.S. pension plans U.S. pension plans Non-U.S. pension plans Change in benefit obligations Benefit obligations at beginning of year $ 484,758 $ 79,972 $ 481,345 $ 76,824 Service cost 608 2,678 15,474 2,215 Interest cost 19,497 3,253 20,676 2,902 Plan participants' contributions — 176 — 148 Acquisitions (1) — 100,551 — — Actuarial loss (gain) 46,144 4,926 20,333 7,671 Benefits paid (6,409 ) (4,909 ) (29,002 ) (2,306 ) Settlements/curtailments (2) (37,523 ) (700 ) (24,068 ) — Currency translation — 7,576 — (7,482 ) Benefit obligations at end of year 507,075 193,523 484,758 79,972 Change in plan assets Fair value of plan assets at beginning of year 528,744 70,341 502,184 73,917 Actual return on plan assets 82,732 5,770 34,779 3,485 Employer contributions 55 1,684 20,087 1,286 Plan participants' contributions — 176 — 148 Acquisitions (1) — 32,599 — — Benefits paid (5,620 ) (3,196 ) (28,306 ) (1,840 ) Settlements (2) (37,523 ) (22 ) — — Currency translation — 5,992 — (6,655 ) Fair value of plan assets at end of year 568,388 113,344 528,744 70,341 Funded status at end of year 61,313 (80,179 ) 43,986 (9,631 ) Unrecognized actuarial net loss 90,679 25,987 122,109 24,476 Unrecognized prior service cost — (11 ) — (18 ) Unrecognized transition assets, net — 35 — 37 Net amount recognized $ 151,992 $ (54,168 ) $ 166,095 $ 14,864 |
Amounts Recognized in Consolidated Balance Sheets | Amounts Recognized in Consolidated Balance Sheets December 31, 2017 2016 U.S. pension plans Non-U.S. pension plans U.S. pension plans Non-U.S. pension plans Prepaid pensions (1) $ 81,485 $ 368 $ 64,169 $ 228 Accrued pension liability, current (2) (5,332 ) (3,483 ) (5,064 ) (283 ) Accrued pension liability, long-term (3) (14,840 ) (77,064 ) (15,119 ) (9,576 ) Accumulated other comprehensive loss, excluding tax effects 90,679 26,011 122,109 24,495 Net amount recognized in the balance sheets $ 151,992 $ (54,168 ) $ 166,095 $ 14,864 (1) I ncluded in Other assets. (2) I ncluded in Other current liabilities. (3) I ncluded in Other liabilities. |
Components of Pension Cost for Defined Benefit Plans | Components of Pension Cost for Defined Benefit Plans Year Ended December 31, 2017 2016 2015 Service cost $ 3,286 $ 17,689 $ 19,933 Interest cost 22,750 23,578 36,002 Expected return on plan assets (35,800 ) (35,716 ) (54,638 ) Amortization of prior service cost 15 (394 ) (626 ) Amortization of net loss (1) 4,014 9,893 19,406 Settlement/curtailment loss (gain) (2) 8,252 (1,062 ) 142,738 Pension cost for defined benefit plans (3) $ 2,517 $ 13,988 $ 162,815 (1) The amortization of net loss includes a $959 charge resulting from the deconsolidation of the Venezuelan subsidiary during the year ended December 31, 2016. |
Pension Plans with Accumulated Benefit Obligations in Excess of Plan Assets | Pension Plans with Accumulated Benefit Obligations in Excess of Plan Assets December 31, 2017 2016 U.S. pension plans Non-U.S. pension plans U.S. pension plans Non-U.S. pension plans Projected benefit obligation $ 26,149 $ 182,512 $ 25,731 $ 47,776 Accumulated benefit obligation 25,870 174,667 25,460 45,128 Fair value of plan assets 5,977 102,107 5,548 38,200 |
Benefits expected to be paid for the U.S. Plans | Benefit Payments for Plans Benefits expected to be paid for the plans are as follows: U.S. pension plans Non-U.S. pension plans Estimated Payments 2018 $ 38,031 $ 8,129 2019 29,782 8,633 2020 32,547 8,833 2021 28,542 9,133 2022 28,724 8,756 2023 through 2027 149,468 44,284 |
Weighted average assumptions used to measure the net periodic benefit cost for the Company's significant defined benefit plans | Assumptions Weighted average assumptions used to measure the benefit obligation for the Company's significant defined benefit plans as of December 31, 2017 and 2016 were as follows: December 31, 2017 2016 U.S. pension plans Non-U.S. pension plans U.S. pension plans Non-U.S. pension plans Discount Rate 3.7 % 2.0 % 4.2 % 3.3 % Rate of increase in compensation 2.5 % 2.7 % 2.5 % 3.7 % Weighted average assumptions used to measure the net periodic benefit cost for the Company's significant defined benefit plans for each of the three years ended December 31 were as follows: December 31, 2017 2016 2015 U.S. pension plans Non-U.S. pension plans U.S. pension plans Non-U.S. pension plans U.S. pension plans Non-U.S. pension plans Discount rate 4.2 % 2.2 % 4.5 % 3.9 % 4.0 % 4.0 % Rate of increase in compensation 2.5 % 2.5 % 2.6 % 3.7 % 2.5 % 3.9 % Expected return on plan assets 6.0 % 4.5 % 6.2 % 5.7 % 6.4 % 5.4 % |
Pension plans' assets by level within the fair value hierarchy | The following table sets forth, by level within the fair value hierarchy, the pension plans' assets as of December 31, 2017 : Pension Plans' Assets at Fair Value as of December 31, 2017 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Cash and cash equivalents $ 8,922 $ — $ — $ 8,922 Equity securities (1) 4,566 — — 4,566 Fixed income securities (2) U.S. government bonds 33,205 — — 33,205 Corporate debt and other obligations — 398,578 — 398,578 Investments measured at NAV (3) Common trusts and 103-12 investments (4) 199,066 Private equity funds (5) 37,395 Total investments at fair value $ 46,693 $ 398,578 $ — $ 681,732 The following table sets forth, by level within the fair value hierarchy, the pension plans' assets as of December 31, 2016 : Pension Plans' Assets at Fair Value as of December 31, 2016 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Cash and cash equivalents $ 3,652 $ — $ — $ 3,652 Equity securities (1) 4,071 — — 4,071 Fixed income securities (2) U.S. government bonds 20,036 — — 20,036 Corporate debt and other obligations — 134,051 — 134,051 Investments measured at NAV (3) Common trusts and 103-12 investments (4) 397,924 Private equity funds (5) 39,351 Total investments at fair value $ 27,759 $ 134,051 $ — $ 599,085 (1) Equity securities are primarily comprised of corporate stock and mutual funds directly held by the plans. Equity securities are valued using the closing price reported on the active market on which the individual securities are traded. (2) Fixed income securities are primarily comprised of governmental and corporate bonds directly held by the plans. Governmental and corporate bonds are valued using both market observable inputs for similar assets that are traded on an active market and the closing price on the active market on which the individual securities are traded. (3) Certain assets that are measured at fair value using the net asset value ("NAV") practical expedient have not been classified in the fair value hierarchy. (4) Common trusts and 103-12 investments (collectively "Trusts") are comprised of a number of investment funds that invest in a diverse portfolio of assets including equity securities, corporate and governmental bonds, equity and credit indexes and money markets. Trusts are valued at the NAV as determined by their custodian. NAV represents the accumulation of the unadjusted quoted close prices on the reporting date for the underlying investments divided by the total shares outstanding at the reporting dates. (5) Private equity funds consist of four funds seeking capital appreciation by investing in private equity investment partnerships and venture capital companies. Private equity fund valuations are based on the NAV of the underlying assets. Funds are comprised of unrestricted and restricted publicly traded securities and privately held securities. Unrestricted securities are valued at the closing market price on the reporting date. Restricted securities may be valued at a discount from such closing public market price, depending on facts and circumstances. Privately held securities are valued at fair value as determined by the fund directors and general partners. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Components of income (loss) before income taxes | The components of income before income taxes for the three years ended December 31, 2017 were as follows: Year Ended December 31, 2017 2016 2015 U.S. $ 213,171 $ 209,409 $ 118,037 Non-U.S. 153,065 67,979 51,750 Total $ 366,236 $ 277,388 $ 169,787 |
Components of income tax expense (benefit) | The components of income tax expense (benefit) for the three years ended December 31, 2017 were as follows: Year Ended December 31, 2017 2016 2015 Current: Federal $ 89,182 $ 57,090 $ 60,500 Non-U.S. 25,746 23,344 28,046 State and local 7,640 8,386 9,557 122,568 88,820 98,103 Deferred: Federal (4,391 ) (1,716 ) (47,902 ) Non-U.S. (82 ) (8,261 ) (3,362 ) State and local 666 172 (4,464 ) (3,807 ) (9,805 ) (55,728 ) Total $ 118,761 $ 79,015 $ 42,375 |
Differences between total income tax expense and the amount computed by applying the statutory federal income tax rate to income before income taxes | The differences between total income tax expense and the amount computed by applying the statutory federal income tax rate to income before income taxes for the three years ended December 31, 2017 were as follows: Year Ended December 31, 2017 2016 2015 Statutory rate of 35% applied to pre-tax income $ 128,182 $ 97,086 $ 59,426 State and local income taxes, net of federal tax benefit 5,671 5,554 1,868 Excess tax benefits resulting from exercises of stock-based compensation (6,276 ) — — Net impact of the U.S. Tax Act 21,949 — — Foreign withholding taxes 6,667 — — Intangible and asset impairments/(write-off) — (4,438 ) 2,184 Foreign rate variance (13,929 ) (8,128 ) (11,399 ) Venezuela deconsolidation/devaluation — 5,192 11,396 Bargain purchase gain (17,556 ) — — Valuation allowances 102 (8,525 ) 2,900 Manufacturing deduction (5,922 ) (5,190 ) (9,207 ) U.S. tax cost (benefit) of foreign source income 294 (489 ) (8,754 ) Other (421 ) (2,047 ) (6,039 ) Total $ 118,761 $ 79,015 $ 42,375 Effective tax rate 32.4 % 28.5 % 25.0 % |
Significant components of deferred tax assets and liabilities | Significant components of deferred tax assets and liabilities at December 31, 2017 and 2016 , were as follows: December 31, 2017 2016 Deferred tax assets: Tax loss and credit carry-forwards $ 65,284 $ 52,270 Inventory 2,501 2,080 Other accruals 14,873 18,186 Employee benefits 18,468 23,596 Pension obligations 12,363 2,503 Other 4,923 3,020 Deferred tax assets, gross 118,412 101,655 Valuation allowance (68,694 ) (47,849 ) Deferred tax assets, net 49,718 53,806 Deferred tax liabilities: Property, plant and equipment 21,427 32,210 Intangible assets 10,729 17,506 Inventory 5,891 10,059 Pension obligations 16,137 17,915 Other 20,313 9,309 Deferred tax liabilities 74,497 86,999 Total deferred taxes $ (24,779 ) $ (33,193 ) |
Summary of the activity related to unrecognized tax benefits | The following table summarizes the activity related to unrecognized tax benefits: 2017 2016 Balance at beginning of year $ 18,499 $ 14,332 Increase related to current year tax provisions 1,448 1,975 Increase related to prior years' tax positions 1,460 5,188 Increase related to acquisitions 8,223 — Decrease related to settlements with taxing authorities (522 ) (265 ) Resolution of and other decreases in prior years' tax liabilities (1,734 ) (1,982 ) Other 1,075 (749 ) Balance at end of year $ 28,449 $ 18,499 |
DERIVATIVES (Tables)
DERIVATIVES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of fair values of derivative instruments on the Company's Consolidated Balance Sheets | Fair values of derivative instruments in the Company's Consolidated Balance Sheets follow: December 31, 2017 December 31, 2016 Derivatives by hedge designation Other Current Assets Other Current Liabilities Other Liabilities Other Current Assets Other Current Liabilities Other Liabilities Designated as hedging instruments: Foreign exchange contracts $ 519 $ 604 $ — $ 439 $ 923 $ — Interest rate swap agreements — — 5,085 — — 5,439 Not designated as hedging instruments: Foreign exchange contracts 2,257 3,747 — 746 1,529 — Total derivatives $ 2,776 $ 4,351 $ 5,085 $ 1,185 $ 2,452 $ 5,439 |
Schedule of effects of undesignated derivative instruments on the Company's Consolidated Statements of Income | The effects of undesignated derivative instruments on the Company's Consolidated Statements of Income for the years ended December 31, 2017 and 2016 consisted of the following: Year Ended December 31, Derivatives by hedge designation Classification of gains (losses) 2017 2016 Not designated as hedges: Foreign exchange contracts Selling, general & administrative expenses $ 17,590 $ (21,096 ) Commodity contracts Cost of goods sold — (742 ) |
Schedule of effects of designated cash flow hedges on AOCI and the entity's Consolidated Statements of Income | The effects of designated cash flow hedges on AOCI and the Company's Consolidated Statements of Income for the years ended December 31, 2017 and 2016 consisted of the following: December 31, Total gain (loss) recognized in AOCI, net of tax 2017 2016 Foreign exchange contracts $ (224 ) $ (512 ) Net investment contracts 1,099 1,099 The Company expects a loss of $224 related to existing contracts to be reclassified from AOCI, net of tax, to earnings over the next 12 months as the hedged transactions are realized. Year Ended December 31, Derivative type Gain (loss) reclassified from AOCI to: 2017 2016 Foreign exchange contracts Net sales $ 1,860 $ (1,580 ) Cost of goods sold 502 (407 ) |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Summary of assets and liabilities measured at fair value on a recurring basis | The following table provides a summary of fair value assets and liabilities as of December 31, 2017 measured at fair value on a recurring basis: Description Balance as of December 31, 2017 Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Foreign exchange contracts $ 2,776 $ — $ 2,776 $ — Marketable securities 179,125 — 179,125 — Total assets $ 181,901 $ — $ 181,901 $ — Liabilities: Foreign exchange contracts $ 4,351 $ — $ 4,351 $ — Interest rate swap agreements 5,085 — 5,085 — Contingent considerations 7,086 — — 7,086 Deferred compensation 25,397 — 25,397 — Total liabilities $ 41,919 $ — $ 34,833 $ 7,086 The following table provides a summary of fair value assets and liabilities as of December 31, 2016 measured at fair value on a recurring basis: Description Balance as of December 31, 2016 Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Foreign exchange contracts $ 1,185 $ — $ 1,185 $ — Marketable securities 38,922 — 38,922 — Total assets $ 40,107 $ — $ 40,107 $ — Liabilities: Foreign exchange contracts $ 2,452 $ — $ 2,452 $ — Interest rate swap agreements 5,439 — 5,439 — Contingent considerations 8,154 — — 8,154 Forward contract 15,272 — — 15,272 Deferred compensation 25,244 — 25,244 — Total liabilities $ 56,561 $ — $ 33,135 $ 23,426 |
INVENTORY Inventory Disclosure
INVENTORY Inventory Disclosure (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Inventory [Line Items] | |
Schedule of Inventory, Current [Table Text Block] | Inventories in the Consolidated Balance Sheet is comprised of the following components: December 31, 2017 2016 Raw materials $ 97,577 $ 76,811 Work-in-process 50,695 40,556 Finished goods 200,395 138,039 Total $ 348,667 $ 255,406 |
PRODUCT WARRANTY COSTS (Tables)
PRODUCT WARRANTY COSTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Product Warranties Disclosures [Abstract] | |
Schedule of the changes in the carrying amount of product warranty accruals | The changes in product warranty accruals for 2017 , 2016 and 2015 were as follows: December 31, 2017 2016 2015 Balance at beginning of year $ 21,053 $ 19,469 $ 15,579 Accruals for warranties 9,901 13,058 19,824 Settlements (11,500 ) (11,434 ) (15,458 ) Foreign currency translation and other adjustments (1) 2,575 (40 ) (476 ) Balance at end of year $ 22,029 $ 21,053 $ 19,469 (1) At December 31, 2017 , Foreign currency translation and other adjustments includes $2,299 in an acquired liability related to the Air Liquide Welding acquisition as discussed in Note 3 to the consolidated financial statements. |
QUARTERLY FINANCIAL DATA (UNA46
QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of quarterly financial data | First (1) Second (2) Third (3) Fourth (4) 2017 Net sales $ 580,897 $ 626,858 $ 669,491 $ 747,185 Gross profit 203,856 217,488 219,516 239,466 Income before income taxes 77,900 83,966 130,642 73,728 Net income 55,844 61,352 106,126 24,181 Basic earnings per share (5) $ 0.85 $ 0.93 $ 1.61 $ 0.37 Diluted earnings per share (5) $ 0.84 $ 0.92 $ 1.59 $ 0.36 2016 Net sales $ 550,772 $ 592,418 $ 567,646 $ 563,828 Gross profit 189,102 202,927 199,812 197,457 Income before income taxes 73,182 45,758 80,296 78,152 Net income 53,638 31,317 60,049 53,395 Basic earnings per share (5) $ 0.77 $ 0.46 $ 0.90 $ 0.81 Diluted earnings per share (5) $ 0.76 $ 0.45 $ 0.89 $ 0.81 (1) 2017 includes special item charges of $3,615 ( $2,734 after-tax) related to acquisition transaction costs. (2) 2017 includes special item charges of $4,498 ( $3,494 after-tax) related to acquisition transaction and integration costs. 2016 includes special item charges of $34,348 ( $33,251 after-tax) primarily related to the loss on deconsolidation of Venezuelan subsidiary and a tax benefit of $7,196 related to the reversal of an income tax valuation allowance as a result of a legal entity change to realign the Company's tax structure. (3) 2017 includes special item charges of $5,283 ( $3,260 after-tax) for pension settlement charges and acquisition-related items including $2,314 ( $1,745 after-tax) in amortization of step up in value of acquired inventories, $3,273 ( $2,229 after-tax) for acquisition transaction and integration costs and a $51,585 bargain purchase gain. (4) 2017 includes special item charges of $2,867 ( $1,770 after-tax) for pension settlement charges, $6,590 ( $6,198 after-tax) for rationalization and asset impairment charges, $28,616 for the net impact of the U.S. Tax Act and acquisition-related items including $2,264 ( $1,708 after-tax) in amortization of step up in value of acquired inventories, $3,616 ( $3,102 after-tax) for acquisition transaction and integration costs and a $1,935 adjustment to the bargain purchase gain. (5) The quarterly earnings per share ("EPS") amounts are each calculated independently. Therefore, the sum of the quarterly EPS amounts may not equal the annual totals. |
SIGNIFICANT ACCOUNTING POLICI47
SIGNIFICANT ACCOUNTING POLICIES (Translation of Foreign Currencies) (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Jun. 30, 2016USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2015VEB / $ | |
Foreign Currency Transaction [Abstract] | |||||
Foreign currency transaction losses | $ (5,654) | $ (3,741) | $ 6,023 | ||
DICOMRate | VEB / $ | 199.4 | ||||
Venezuela - Highly Inflationary Economy | |||||
Foreign Currency Transaction Loss, before Tax | 4,334 | ||||
Inventory Write-down | 22,880 | ||||
Deconsolidation, Gain (Loss), Amount | $ (34,348) | $ 0 | (34,348) | $ 0 | |
DeconsolidationGainOrLossAmountNet | $ (33,251) | (33,251) | |||
Cash Divested from Deconsolidation | $ 283 |
SIGNIFICANT ACCOUNTING POLICI48
SIGNIFICANT ACCOUNTING POLICIES (Equity Investments) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Maximum | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership interest in equity investments (as a percent) | 50.00% | 50.00% |
Investments in Turkey and Chile | ||
Schedule of Equity Method Investments [Line Items] | ||
Amount of retained earnings that represents undistributed earnings of 50% or less owned equity investments | $ 19,670 | $ 19,333 |
SIGNIFICANT ACCOUNTING POLICI49
SIGNIFICANT ACCOUNTING POLICIES (Property, Plant and Equipment) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | |||
Land | $ 66,653 | $ 46,219 | |
Buildings | 421,722 | 335,885 | |
Machinery and equipment | 776,436 | 706,938 | |
Property, Plant and Equipment, Gross | 1,264,811 | 1,089,042 | |
Less accumulated depreciation | 787,780 | 716,665 | |
Property, Plant and Equipment, Net | $ 477,031 | $ 372,377 | $ 411,323 |
Machinery, tools and equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life of property, plant and equipment | 3 years | ||
Machinery, tools and equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life of property, plant and equipment | 20 years | ||
Buildings | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life of property, plant and equipment | 40 years |
SIGNIFICANT ACCOUNTING POLICI50
SIGNIFICANT ACCOUNTING POLICIES (Textual) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Income Tax Reconciliation Excess Tax Benefits Stock Options | $ 6,276 | $ 0 | $ 0 |
Excess Tax Benefit from Share-based Compensation, Operating Activities | $ 9,154 | ||
New Accounting Pronouncement or Change in Accounting Principle, Effect of Change on Diluted Earnings Per Share | $ 0.09 | ||
Percentage of LIFO Inventory | 32.00% | 40.00% | |
Maximum period for which derivative contracts cover currency and commodity exposures (in years) | 2 years | ||
Product Warranties | |||
Period of warranty services (in years) | 3 years | ||
Stock-Based Compensation | |||
Anti-dilutive shares excluded from the calculation of diluted earnings per share (in shares) | 157,033 | 774,502 | 522,471 |
Research and Development | |||
Research and development costs | $ 47,899 | $ 44,720 | $ 47,182 |
Bonus | |||
Costs related to the Company's discretionary employee bonus programs | 97,392 | 83,620 | $ 98,651 |
Inventories | |||
Inventory Valuation Reserves | 27,544 | 19,252 | |
Prepaid Expense, Current [Abstract] | |||
Prepaid Expense, Current | $ 15,599 | $ 12,139 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |||||||||
Numerator: | |||||||||||||||||||
Net income | $ 24,181 | [1] | $ 106,126 | [2] | $ 61,352 | [3] | $ 55,844 | [4] | $ 53,395 | [1] | $ 60,049 | [2] | $ 31,317 | [3] | $ 53,638 | [4] | $ 247,503 | $ 198,399 | $ 127,478 |
Denominator: | |||||||||||||||||||
Basic weighted average shares outstanding (in shares) | 65,739,000 | 67,462,000 | 74,111,000 | ||||||||||||||||
Effect of dilutive securities - stock options and awards (in shares) | 904,000 | 694,000 | 743,000 | ||||||||||||||||
Diluted weighted average shares outstanding (in shares) | 66,643,000 | 68,156,000 | 74,854,000 | ||||||||||||||||
Basic earnings per share (in dollars per share) | $ 0.37 | [5] | $ 1.61 | [5] | $ 0.93 | [5] | $ 0.85 | [5] | $ 0.81 | [5] | $ 0.90 | [5] | $ 0.46 | [5] | $ 0.77 | [5] | $ 3.76 | $ 2.94 | $ 1.72 |
Diluted earnings per share (in dollars per share) | $ 0.36 | [5] | $ 1.59 | [5] | $ 0.92 | [5] | $ 0.84 | [5] | $ 0.81 | [5] | $ 0.89 | [5] | $ 0.45 | [5] | $ 0.76 | [5] | $ 3.71 | $ 2.91 | $ 1.70 |
Anti-dilutive shares excluded from the computation of diluted earnings per share | 157,033 | 774,502 | 522,471 | ||||||||||||||||
[1] | 2017 includes special item charges of $2,867 ($1,770 after-tax) for pension settlement charges, $6,590 ($6,198 after-tax) for rationalization and asset impairment charges, $28,616 for the net impact of the U.S. Tax Act and acquisition-related items including $2,264 ($1,708 after-tax) in amortization of step up in value of acquired inventories, $3,616 ($3,102 after-tax) for acquisition transaction and integration costs and a $1,935 adjustment to the bargain purchase gain. | ||||||||||||||||||
[2] | 2017 includes special item charges of $5,283 ($3,260 after-tax) for pension settlement charges and acquisition-related items including $2,314 ($1,745 after-tax) in amortization of step up in value of acquired inventories, $3,273 ($2,229 after-tax) for acquisition transaction and integration costs and a $51,585 bargain purchase gain. | ||||||||||||||||||
[3] | 2017 includes special item charges of $4,498 ($3,494 after-tax) related to acquisition transaction and integration costs.2016 includes special item charges of $34,348 ($33,251 after-tax) primarily related to the loss on deconsolidation of Venezuelan subsidiary and a tax benefit of $7,196 related to the reversal of an income tax valuation allowance as a result of a legal entity change to realign the Company's tax structure. | ||||||||||||||||||
[4] | 2017 includes special item charges of $3,615 ($2,734 after-tax) related to acquisition transaction costs. | ||||||||||||||||||
[5] | The quarterly earnings per share ("EPS") amounts are each calculated independently. Therefore, the sum of the quarterly EPS amounts may not equal the annual totals. |
ACQUISITIONS (Details)
ACQUISITIONS (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||||
Jul. 31, 2017 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |||
Acquisitions | ||||||||||||||
Business Combination, Inventory Step Up | $ 2,264 | $ 2,314 | $ 4,578 | |||||||||||
Acquisition Transaction and Integration Costs | 3,616 | 3,273 | $ 4,498 | $ 3,615 | 15,002 | |||||||||
Annual sales at the date of acquisition | 747,185 | 669,491 | $ 626,858 | $ 580,897 | $ 563,828 | $ 567,646 | $ 592,418 | $ 550,772 | 2,624,431 | $ 2,274,614 | $ 2,535,791 | |||
Business Combination, Bargain Purchase, Gain Recognized, Amount | (1,935) | $ 51,585 | 49,650 | 0 | 0 | |||||||||
Payments to Acquire Businesses, Net of Cash Acquired | 72,468 | 71,567 | $ 37,076 | |||||||||||
Business Combination Receivable From Seller | $ 10,670 | 10,670 | ||||||||||||
Air Liquide Welding [Member] | ||||||||||||||
Acquisitions | ||||||||||||||
Business Combination, Agreed Upon Purchase Price | $ 135,123 | |||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables | 89,442 | |||||||||||||
Annual sales at the date of acquisition | 182,000 | $ 400,000 | ||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory | [1] | 97,803 | ||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment | [2] | 73,056 | ||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | [3] | 11,715 | ||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Accounts Payable | (65,640) | |||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Pension Liability | (67,563) | |||||||||||||
Business Combination, Bargain Purchase, Gain Recognized, Amount | 49,650 | |||||||||||||
Business Combination, Recognized Identifiable Other Assets Acquired and Other Liabilities Assumed, Net | [4] | (27,210) | ||||||||||||
Payments to Acquire Businesses, Net of Cash Acquired | $ 61,953 | [5] | 61,953 | |||||||||||
Indefinite-lived Intangible Assets Acquired | 7,099 | |||||||||||||
Other Intangible Assets | Air Liquide Welding [Member] | ||||||||||||||
Acquisitions | ||||||||||||||
Finite-lived Intangible Assets Acquired | 3,433 | |||||||||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 9 years | |||||||||||||
Trademarks and trade names | Air Liquide Welding [Member] | ||||||||||||||
Acquisitions | ||||||||||||||
Finite-lived Intangible Assets Acquired | $ 1,183 | |||||||||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 10 years | |||||||||||||
[1] | Inventories acquired were sold in 2017 resulting in a $4,578 increase in cost of sales for the amortization of step up in the value of acquired inventories. | |||||||||||||
[2] | Property, plant and equipment acquired includes a number of manufacturing and distribution sites, including the related facilities, land and leased sites, and machinery and equipment for use in manufacturing operations. | |||||||||||||
[3] | $7,099 of the intangible asset balance was assigned to a trade name expected to have an indefinite life. Of the remaining amount, $1,183 was assigned to a finite-lived trade name (10 year weighted average useful life) and $3,433 was assigned to other intangible assets (9 year weighted average life). | |||||||||||||
[4] | Consists primarily of other accrued liabilities. | |||||||||||||
[5] | Reflects a receivable from seller of $10,670 as of December 31, 2017 for an agreed upon purchase price adjustment received in the first quarter of 2018. |
GOODWILL AND INTANGIBLES (Chang
GOODWILL AND INTANGIBLES (Changes in Carrying Amount of Goodwill by Reportable Segment) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | |||
Changes in the carrying amount of goodwill by reportable segment | ||||
Balance at the beginning of the period | $ 231,919 | $ 187,504 | ||
Additions and adjustments | [1] | (377) | 42,886 | [2] |
Impairment charge | [3] | (1,091) | ||
Foreign currency translation | 4,131 | 1,529 | ||
Balance at the end of the period | 234,582 | 231,919 | ||
Americas Welding [Member] | ||||
Changes in the carrying amount of goodwill by reportable segment | ||||
Balance at the beginning of the period | 196,378 | 152,335 | ||
Additions and adjustments | [1] | (76) | 43,217 | [2] |
Impairment charge | [3] | (1,091) | ||
Foreign currency translation | 2,048 | 826 | ||
Balance at the end of the period | 197,259 | 196,378 | ||
International Welding [Member] | ||||
Changes in the carrying amount of goodwill by reportable segment | ||||
Balance at the beginning of the period | 23,664 | 23,345 | ||
Additions and adjustments | [1] | 0 | (30) | [2] |
Foreign currency translation | 2,003 | 349 | ||
Balance at the end of the period | 25,667 | 23,664 | ||
The Harris Products Group | ||||
Changes in the carrying amount of goodwill by reportable segment | ||||
Balance at the beginning of the period | 11,877 | 11,824 | ||
Additions and adjustments | [1] | (301) | (301) | [2] |
Impairment charge | [3] | 0 | ||
Foreign currency translation | 80 | 354 | ||
Balance at the end of the period | $ 11,656 | $ 11,877 | ||
[1] | Adjustments to Harris Products Group include the tax benefit attributable to the amortization of tax deductible goodwill in excess of goodwill recorded for financial reporting purposes. | |||
[2] | Additions to Americas Welding reflect goodwill recognized in the acquisition of Vizient in 2016. | |||
[3] | The Company performed an interim goodwill impairment test, using a combination of income and market valuation approaches, resulting in a non-cash impairment charge to the carrying value of goodwill. The impairment charge is recorded within Rationalization and asset impairment charges in the accompanying Consolidated Statements of Income. |
GOODWILL AND INTANGIBLES (Gross
GOODWILL AND INTANGIBLES (Gross and Net Intangible Assets Other Than Goodwill) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Gross intangible assets other than goodwill by asset class | ||
Asset Impairment Charges | $ 1,441 | |
Finite-Lived Assets - Gross Amount | 219,470 | $ 210,332 |
Finite-Lived Assets - Accumulated Amortization | 116,253 | 97,357 |
Trademarks and trade names | ||
Gross intangible assets other than goodwill by asset class | ||
Finite-Lived Assets - Gross Amount | 41,203 | 38,972 |
Finite-Lived Assets - Accumulated Amortization | 24,147 | 20,648 |
Indefinite Lived Assets | 24,235 | 17,113 |
Customer relationships | ||
Gross intangible assets other than goodwill by asset class | ||
Finite-Lived Assets - Gross Amount | 93,139 | 91,216 |
Finite-Lived Assets - Accumulated Amortization | 47,175 | 39,033 |
Patents | ||
Gross intangible assets other than goodwill by asset class | ||
Finite-Lived Assets - Gross Amount | 27,777 | 28,073 |
Finite-Lived Assets - Accumulated Amortization | 12,978 | 11,467 |
Other | ||
Gross intangible assets other than goodwill by asset class | ||
Finite-Lived Assets - Gross Amount | 57,351 | 52,071 |
Finite-Lived Assets - Accumulated Amortization | $ 31,953 | $ 26,209 |
GOODWILL AND INTANGIBLES (Textu
GOODWILL AND INTANGIBLES (Textual) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Aggregate amortization expense | $ 15,671 | $ 14,525 | $ 13,296 |
Estimated annual amortization expense for intangible assets for each of the next five years | |||
2,018 | 14,856 | ||
2,019 | 13,233 | ||
2,020 | 12,513 | ||
2,021 | 11,467 | ||
2,022 | 10,437 | ||
Acquired Finite And Indefinite Lived Intangible Assets By Major Class [Line Items] | |||
Asset Impairment Charges | $ 1,441 |
SEGMENT INFORMATION (Financial
SEGMENT INFORMATION (Financial Information of Reportable Segments) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||||||||||
Financial information for the reportable segments | ||||||||||||||||||||
Net sales | $ 747,185 | $ 669,491 | $ 626,858 | $ 580,897 | $ 563,828 | $ 567,646 | $ 592,418 | $ 550,772 | $ 2,624,431 | $ 2,274,614 | $ 2,535,791 | |||||||||
Revenue from Related Parties | 0 | 0 | 0 | |||||||||||||||||
Segment, including Inter-segment, sales | 2,624,431 | 2,274,614 | 2,535,791 | |||||||||||||||||
EBIT, as adjusted | 370,338 | 328,723 | 378,807 | |||||||||||||||||
Special items charge (Gain) | (15,330) | 34,348 | 189,910 | |||||||||||||||||
EBIT | 385,668 | 294,375 | 188,897 | |||||||||||||||||
Interest income | 4,788 | 2,092 | 2,714 | |||||||||||||||||
Interest expense | (24,220) | (19,079) | (21,824) | |||||||||||||||||
Income before income taxes | 73,728 | [1] | $ 130,642 | [2] | $ 83,966 | [3] | $ 77,900 | [4] | 78,152 | [1] | $ 80,296 | [2] | $ 45,758 | [3] | $ 73,182 | [4] | 366,236 | 277,388 | 169,787 | |
Total assets | 2,406,547 | 1,943,437 | 2,406,547 | 1,943,437 | 1,784,171 | |||||||||||||||
Equity investments in affiliates | 28,526 | 27,301 | 28,526 | 27,301 | 27,241 | |||||||||||||||
Capital expenditures | 61,656 | 49,877 | 50,507 | |||||||||||||||||
Depreciation and amortization | 68,115 | 65,073 | 64,007 | |||||||||||||||||
The Harris Products Group | ||||||||||||||||||||
Financial information for the reportable segments | ||||||||||||||||||||
Net sales | 290,628 | 272,343 | 263,981 | |||||||||||||||||
Revenue from Related Parties | 8,190 | 8,709 | 9,312 | |||||||||||||||||
Segment, including Inter-segment, sales | 298,818 | 281,052 | 273,293 | |||||||||||||||||
EBIT, as adjusted | 36,442 | 32,380 | 27,882 | |||||||||||||||||
Special items charge (Gain) | 0 | 0 | 0 | |||||||||||||||||
EBIT | 36,442 | 32,380 | 27,882 | |||||||||||||||||
Total assets | 175,151 | 161,391 | 175,151 | 161,391 | 143,905 | |||||||||||||||
Equity investments in affiliates | 0 | 0 | 0 | 0 | 0 | |||||||||||||||
Capital expenditures | 3,949 | 2,209 | 2,727 | |||||||||||||||||
Depreciation and amortization | 2,885 | 2,860 | 2,978 | |||||||||||||||||
Corporate / Eliminations | ||||||||||||||||||||
Financial information for the reportable segments | ||||||||||||||||||||
Net sales | 0 | 0 | 0 | |||||||||||||||||
Revenue from Related Parties | (124,432) | (118,296) | (120,597) | |||||||||||||||||
Segment, including Inter-segment, sales | (124,432) | (118,296) | (120,597) | |||||||||||||||||
EBIT, as adjusted | 309 | 564 | (275) | |||||||||||||||||
Special items charge (Gain) | [5] | (34,648) | 34,348 | 0 | ||||||||||||||||
EBIT | 34,957 | (33,784) | (275) | |||||||||||||||||
Total assets | 57,990 | (25,594) | 57,990 | (25,594) | (68,805) | |||||||||||||||
Equity investments in affiliates | 0 | 0 | 0 | 0 | 0 | |||||||||||||||
Capital expenditures | 0 | 0 | 0 | |||||||||||||||||
Depreciation and amortization | (172) | (209) | (194) | |||||||||||||||||
Americas Welding [Member] | ||||||||||||||||||||
Financial information for the reportable segments | ||||||||||||||||||||
Net sales | 1,609,779 | 1,494,982 | 1,741,350 | |||||||||||||||||
Revenue from Related Parties | 97,382 | 93,612 | 92,538 | |||||||||||||||||
Segment, including Inter-segment, sales | 1,707,161 | 1,588,594 | 1,833,888 | |||||||||||||||||
EBIT, as adjusted | 291,866 | 266,633 | 316,689 | |||||||||||||||||
Special items charge (Gain) | [6] | 9,242 | 0 | 173,239 | ||||||||||||||||
EBIT | 282,624 | 266,633 | 143,450 | |||||||||||||||||
Total assets | 1,253,411 | 1,278,417 | 1,253,411 | 1,278,417 | 1,165,817 | |||||||||||||||
Equity investments in affiliates | 4,037 | 3,946 | 4,037 | 3,946 | 3,791 | |||||||||||||||
Capital expenditures | 43,158 | 35,314 | 35,721 | |||||||||||||||||
Depreciation and amortization | 47,038 | 47,359 | 45,447 | |||||||||||||||||
International Welding [Member] | ||||||||||||||||||||
Financial information for the reportable segments | ||||||||||||||||||||
Net sales | 724,024 | 507,289 | 530,460 | |||||||||||||||||
Revenue from Related Parties | 18,860 | 15,975 | 18,747 | |||||||||||||||||
Segment, including Inter-segment, sales | 742,884 | 523,264 | 549,207 | |||||||||||||||||
EBIT, as adjusted | 41,721 | 29,146 | 34,511 | |||||||||||||||||
Special items charge (Gain) | [7] | 10,076 | 0 | 16,671 | ||||||||||||||||
EBIT | 31,645 | 29,146 | 17,840 | |||||||||||||||||
Total assets | 919,995 | 529,223 | 919,995 | 529,223 | 543,254 | |||||||||||||||
Equity investments in affiliates | $ 24,489 | $ 23,355 | 24,489 | 23,355 | 23,450 | |||||||||||||||
Capital expenditures | 14,549 | 12,354 | 12,059 | |||||||||||||||||
Depreciation and amortization | $ 18,364 | $ 15,063 | $ 15,776 | |||||||||||||||||
[1] | 2017 includes special item charges of $2,867 ($1,770 after-tax) for pension settlement charges, $6,590 ($6,198 after-tax) for rationalization and asset impairment charges, $28,616 for the net impact of the U.S. Tax Act and acquisition-related items including $2,264 ($1,708 after-tax) in amortization of step up in value of acquired inventories, $3,616 ($3,102 after-tax) for acquisition transaction and integration costs and a $1,935 adjustment to the bargain purchase gain. | |||||||||||||||||||
[2] | 2017 includes special item charges of $5,283 ($3,260 after-tax) for pension settlement charges and acquisition-related items including $2,314 ($1,745 after-tax) in amortization of step up in value of acquired inventories, $3,273 ($2,229 after-tax) for acquisition transaction and integration costs and a $51,585 bargain purchase gain. | |||||||||||||||||||
[3] | 2017 includes special item charges of $4,498 ($3,494 after-tax) related to acquisition transaction and integration costs.2016 includes special item charges of $34,348 ($33,251 after-tax) primarily related to the loss on deconsolidation of Venezuelan subsidiary and a tax benefit of $7,196 related to the reversal of an income tax valuation allowance as a result of a legal entity change to realign the Company's tax structure. | |||||||||||||||||||
[4] | 2017 includes special item charges of $3,615 ($2,734 after-tax) related to acquisition transaction costs. | |||||||||||||||||||
[5] | 2017 special items reflect a bargain purchase gain and acquisition transaction and integration costs related to the Air Liquide Welding acquisition as discussed in Note 3 to the consolidated financial statements.2016 special items reflect a loss related to the deconsolidation of the Company's Venezuelan subsidiary. | |||||||||||||||||||
[6] | 2017 special items reflect non-cash pension settlement charges related to lump sum pension payments, as well as non-cash charges related to the impairment of goodwill.2015 special items reflect net charges related to employee severance and other related costs, Venezuelan foreign exchange remeasurement losses related to the adoption of a new foreign exchange mechanism and non-cash pension settlement charges related to the purchase of a group annuity contract. | |||||||||||||||||||
[7] | 2017 special items reflect amortization of step up in value of acquired inventories related to the Air Liquide Welding acquisition as discussed in Note 3 to the consolidated financial statements, as well as charges related to employee severance, asset impairments and other related costs.2015 special items reflect net charges related to employee severance and other costs and adjustments to reclassify a potential divestiture that was previously held-for-sale, as well as non-cash charges related to the impairment of goodwill and long-lived assets. |
SEGMENT INFORMATION (Geographic
SEGMENT INFORMATION (Geographic Split of Net Sales and Property, Plant and Equipment ) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Geographic split of the Company's net sales, based on the location of the customer, and property, plant and equipment | |||||||||||
Net sales | $ 747,185 | $ 669,491 | $ 626,858 | $ 580,897 | $ 563,828 | $ 567,646 | $ 592,418 | $ 550,772 | $ 2,624,431 | $ 2,274,614 | $ 2,535,791 |
Total property, plant and equipment, net | $ 477,031 | $ 372,377 | $ 477,031 | $ 372,377 | 411,323 | ||||||
Percentage of LIFO Inventory | 32.00% | 40.00% | 32.00% | 40.00% | |||||||
United States | |||||||||||
Geographic split of the Company's net sales, based on the location of the customer, and property, plant and equipment | |||||||||||
Net sales | $ 1,388,816 | $ 1,308,635 | 1,387,882 | ||||||||
Total property, plant and equipment, net | $ 194,491 | $ 176,041 | 194,491 | 176,041 | 173,974 | ||||||
Other foreign countries | |||||||||||
Geographic split of the Company's net sales, based on the location of the customer, and property, plant and equipment | |||||||||||
Net sales | 1,235,615 | 965,979 | 1,147,909 | ||||||||
Total property, plant and equipment, net | 282,931 | 196,679 | 282,931 | 196,679 | 237,718 | ||||||
Corporate / Eliminations | |||||||||||
Geographic split of the Company's net sales, based on the location of the customer, and property, plant and equipment | |||||||||||
Total property, plant and equipment, net | $ (391) | $ (343) | $ (391) | $ (343) | $ (369) | ||||||
Customer Concentration Risk [Member] | Sales Revenue, Goods, Net [Member] | Maximum | |||||||||||
Geographic split of the Company's net sales, based on the location of the customer, and property, plant and equipment | |||||||||||
Concentration Risk, Percentage | 10.00% | 10.00% | 10.00% |
SEGMENT INFORMATION (Textual) (
SEGMENT INFORMATION (Textual) (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017USD ($)segment | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | ||
Financial information for the reportable segments | ||||
Number of operating segments (segments) | segment | 3 | |||
Percentage of total inventories valued using the LIFO method (as a percent) | 32.00% | 40.00% | ||
Special items | ||||
Asset Impairment Charges | $ 1,441 | |||
Special items charge (Gain) | (15,330) | $ 34,348 | $ 189,910 | |
Goodwill, Impairment Loss | [1] | 1,091 | ||
Foreign Currency Transaction Loss, before Tax | 4,334 | |||
Europe Welding | ||||
Special items | ||||
Goodwill, Impairment Loss | [1] | 0 | ||
The Harris Products Group | ||||
Special items | ||||
Special items charge (Gain) | 0 | 0 | 0 | |
Goodwill, Impairment Loss | [1] | 0 | ||
United States | ||||
Special items | ||||
EntityWideDisclosureOnGeographicAreasRevenueFromExternalCustomersAttributedToForeignCountries1 | $ 151,630 | $ 134,216 | $ 175,049 | |
Revenues | Customer concentration risk | Maximum | ||||
Special items | ||||
Percentage of concentration of credit risk not met other than separately disclosed | 10.00% | 10.00% | 10.00% | |
[1] | The Company performed an interim goodwill impairment test, using a combination of income and market valuation approaches, resulting in a non-cash impairment charge to the carrying value of goodwill. The impairment charge is recorded within Rationalization and asset impairment charges in the accompanying Consolidated Statements of Income. |
RATIONALIZATION AND ASSET IMP59
RATIONALIZATION AND ASSET IMPAIRMENTS (Summary of Activity Related to Rationalization Liabilities by Segment) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Activity related to the rationalization liabilities by segment | ||
Balance at the beginning of the period | $ 5,190 | $ 7,665 |
Payments and other adjustments | (3,536) | (2,475) |
Charged to expense | 5,149 | |
Balance at the end of the period | 6,803 | 5,190 |
Americas Welding [Member] | ||
Activity related to the rationalization liabilities by segment | ||
Balance at the beginning of the period | 0 | 67 |
Payments and other adjustments | 0 | (67) |
Charged to expense | 0 | |
Balance at the end of the period | 0 | 0 |
International Welding [Member] | ||
Activity related to the rationalization liabilities by segment | ||
Balance at the beginning of the period | 5,190 | 7,598 |
Payments and other adjustments | (3,536) | (2,408) |
Charged to expense | 5,149 | |
Balance at the end of the period | $ 6,803 | $ 5,190 |
RATIONALIZATION AND ASSET IMP60
RATIONALIZATION AND ASSET IMPAIRMENTS (Textual) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Restructuring Cost and Reserve [Line Items] | |||||
Rationalization and asset impairment charges (gains) | $ 6,590 | $ 6,590 | $ 0 | $ 19,958 | |
Restructuring Charges | 5,149 | ||||
Restructuring liability | 6,803 | 6,803 | 5,190 | $ 7,665 | |
Asset impairment charges | 1,441 | ||||
Goodwill, Impairment Loss | [1] | 1,091 | |||
Other current assets | 123,836 | 123,836 | 96,213 | ||
Other Liabilities, Current | 119,655 | 119,655 | $ 97,806 | ||
International Welding [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring liability | $ 3,610 | 3,610 | |||
The Harris Products Group | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Goodwill, Impairment Loss | [1] | $ 0 | |||
[1] | The Company performed an interim goodwill impairment test, using a combination of income and market valuation approaches, resulting in a non-cash impairment charge to the carrying value of goodwill. The impairment charge is recorded within Rationalization and asset impairment charges in the accompanying Consolidated Statements of Income. |
ACCUMULATED OTHER COMPREHENSI61
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Accumulated Other Comprehensive Loss Income [Line Items] | ||||||||||||
Accumulated other comprehensive loss | $ (247,186) | $ (329,037) | $ (247,186) | $ (329,037) | $ (296,267) | |||||||
Other comprehensive income (loss) before reclassification | 71,563 | (35,888) | ||||||||||
Amounts reclassified from AOCI | 10,288 | 3,118 | ||||||||||
Net current-period other comprehensive income (loss) | 81,851 | (32,770) | ||||||||||
Net sales | 747,185 | $ 669,491 | $ 626,858 | $ 580,897 | 563,828 | $ 567,646 | $ 592,418 | $ 550,772 | 2,624,431 | 2,274,614 | 2,535,791 | |
Income taxes | 118,761 | 79,015 | 42,375 | |||||||||
Cost of goods sold | 1,744,105 | 1,485,316 | 1,694,647 | |||||||||
Selling, general & administrative expenses | 537,525 | 466,676 | 496,748 | |||||||||
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member] | ||||||||||||
Accumulated Other Comprehensive Loss Income [Line Items] | ||||||||||||
Accumulated other comprehensive loss | 875 | 587 | 875 | 587 | 548 | |||||||
Other comprehensive income (loss) before reclassification | (2,074) | 2,026 | ||||||||||
Amounts reclassified from AOCI | [1] | 2,362 | (1,987) | |||||||||
Net current-period other comprehensive income (loss) | 288 | 39 | ||||||||||
Accumulated Defined Benefit Plans Adjustment [Member] | ||||||||||||
Accumulated Other Comprehensive Loss Income [Line Items] | ||||||||||||
Accumulated other comprehensive loss | (85,277) | (95,939) | (85,277) | (95,939) | (99,776) | |||||||
Other comprehensive income (loss) before reclassification | [2] | 2,736 | (1,268) | |||||||||
Amounts reclassified from AOCI | [2] | 7,926 | 5,105 | |||||||||
Net current-period other comprehensive income (loss) | 10,662 | 3,837 | ||||||||||
Accumulated Translation Adjustment [Member] | ||||||||||||
Accumulated Other Comprehensive Loss Income [Line Items] | ||||||||||||
Accumulated other comprehensive loss | $ (162,784) | $ (233,685) | (162,784) | (233,685) | $ (197,039) | |||||||
Other comprehensive income (loss) before reclassification | [3] | 70,901 | (36,646) | |||||||||
Amounts reclassified from AOCI | [3] | 0 | 0 | |||||||||
Net current-period other comprehensive income (loss) | 70,901 | (36,646) | ||||||||||
Reclassification out of Accumulated Other Comprehensive Income [Member] | Accumulated Defined Benefit Plans Adjustment [Member] | ||||||||||||
Accumulated Other Comprehensive Loss Income [Line Items] | ||||||||||||
Income taxes | 19,252 | 4,297 | ||||||||||
Reclassification out of Accumulated Other Comprehensive Income [Member] | Accumulated Translation Adjustment [Member] | ||||||||||||
Accumulated Other Comprehensive Loss Income [Line Items] | ||||||||||||
Other Comprehensive (Income) Loss, Net of Tax, Portion Attributable to Noncontrolling Interest | 115 | (106) | ||||||||||
Reclassification out of Accumulated Other Comprehensive Income [Member] | Sales | Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member] | ||||||||||||
Accumulated Other Comprehensive Loss Income [Line Items] | ||||||||||||
Net sales | 1,860 | (1,580) | ||||||||||
Income taxes | 693 | (577) | ||||||||||
Reclassification out of Accumulated Other Comprehensive Income [Member] | Cost of goods sold | Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member] | ||||||||||||
Accumulated Other Comprehensive Loss Income [Line Items] | ||||||||||||
Income taxes | 93 | (24) | ||||||||||
Cost of goods sold | $ 502 | $ (407) | ||||||||||
[1] | During 2017, this AOCI reclassification is a component of Net sales of $1,860 (net of tax of $693) and Cost of goods sold of $502 (net of tax of $93); during 2016, the reclassification is a component of Net sales of $(1,580) (net of tax of $(577)) and Cost of goods sold of $(407) (net of tax of $(24)). Refer to Note 13 to the consolidated financial statements for additional details | |||||||||||
[2] | This AOCI component is included in the computation of net periodic pension costs (net of tax of $19,252 and $4,297 during the years ended December 31, 2017 and 2016, respectively). Refer to Note 11 to the consolidated financial statements for additional details | |||||||||||
[3] | The Other comprehensive income before reclassifications excludes $115 and $(106) attributable to Non-controlling interests in the years ended December 31, 2017 and 2016, respectively. The reclassified AOCI component is included in the computation of Non-controlling interests. Refer to Consolidated Statements of Equity for additional details. |
DEBT (Schedule of Debt) (Detail
DEBT (Schedule of Debt) (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Oct. 31, 2016 | Apr. 30, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Apr. 01, 2015 | |
Debt Instrument [Line Items] | |||||
Debt Issuance Cost | $ 1,491 | $ 1,586 | |||
Long-term debt | |||||
Long-term Debt and Capital Lease Obligations, Including Current Maturities | 704,247 | 703,835 | |||
Less current portion | 111 | 131 | |||
Long-term debt, less current portion | 704,136 | 703,704 | |||
Short-term debt | |||||
Amounts due banks, interest at 31.8% (29.0% in 2016) | 2,020 | 1,758 | |||
Current portion of long-term debt | 111 | 131 | |||
Total short-term debt | 2,131 | 1,889 | |||
Total debt | $ 706,267 | $ 705,593 | |||
Short-term Debt, Weighted Average Interest Rate | 31.80% | 29.00% | |||
Senior Notes 2015 [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt, Weighted Average Interest Rate | 3.50% | ||||
Debt Instrument, Face Amount | $ 350,000 | ||||
Weighted Average [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Term | 18 years | 19 years | 18 years | ||
Senior Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt, Weighted Average Interest Rate | 3.30% | ||||
Long-term debt | |||||
Long-term Debt and Capital Lease Obligations, Including Current Maturities | $ 693,424 | $ 692,975 | |||
Other borrowings due through 2023, interest up to 8.0% | |||||
Long-term debt | |||||
Long-term Debt and Capital Lease Obligations, Including Current Maturities | $ 10,823 | $ 10,860 | |||
Minimum | |||||
Short-term debt | |||||
Derivative, Variable Interest Rate | 2.00% | ||||
Minimum | Senior Notes 2015 [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Term | 10 years | ||||
Minimum | Senior Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Interest Rate, Stated Percentage | 2.80% | ||||
Maximum | |||||
Short-term debt | |||||
Derivative, Variable Interest Rate | 3.20% | ||||
Maximum | Senior Notes 2015 [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Term | 30 years | ||||
Maximum | Senior Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Interest Rate, Stated Percentage | 4.00% | ||||
Maximum | Other borrowings due through 2023, interest up to 8.0% | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Interest Rate, Stated Percentage | 8.00% | ||||
Senior Notes Series A [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Face Amount | $ 100,000 | ||||
Debt Instrument, Maturity Date | Aug. 20, 2025 | ||||
Debt Instrument, Interest Rate, Stated Percentage | 3.15% | ||||
Senior Notes Series B [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Face Amount | $ 100,000 | ||||
Debt Instrument, Maturity Date | Aug. 20, 2030 | ||||
Debt Instrument, Interest Rate, Stated Percentage | 3.35% | ||||
Senior Notes Series C [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Face Amount | $ 50,000 | ||||
Debt Instrument, Maturity Date | Apr. 1, 2035 | ||||
Debt Instrument, Interest Rate, Stated Percentage | 3.61% | ||||
Senior Notes Series D [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Face Amount | $ 100,000 | ||||
Debt Instrument, Maturity Date | Apr. 1, 2045 | ||||
Debt Instrument, Interest Rate, Stated Percentage | 4.02% | ||||
Designated as Hedging Instruments | Interest Rate Swap [Member] | |||||
Short-term debt | |||||
Derivative, Notional Amount | $ 100,000 |
DEBT (Long-Term Debt) (Details)
DEBT (Long-Term Debt) (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Oct. 31, 2016 | Apr. 30, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Oct. 20, 2016 | Apr. 01, 2015 | |
Debt Instrument [Line Items] | ||||||
Amounts due banks, interest at 31.8% (29.0% in 2016) | $ 2,020 | $ 1,758 | ||||
Fair value of long-term debt | $ 687,428 | $ 669,209 | ||||
Senior Notes 2016 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt, Weighted Average Interest Rate | 3.10% | |||||
Debt Instrument, Face Amount | $ 350,000 | |||||
Debt Instrument, Issuance Date | Oct. 20, 2016 | |||||
Debt Instrument, Covenant Compliance | As of December 31, 2017, the Company was in compliance with all of its debt covenants | |||||
Senior Notes [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt, Weighted Average Interest Rate | 3.30% | |||||
Weighted Average [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Term | 18 years | 19 years | 18 years | |||
Senior Notes 2015 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt, Weighted Average Interest Rate | 3.50% | |||||
Debt Instrument, Face Amount | $ 350,000 | |||||
Debt Instrument, Issuance Date | Apr. 1, 2015 | |||||
Debt Instrument, Covenant Compliance | As of December 31, 2017, the Company was in compliance with all of its debt covenants | |||||
Minimum | Senior Notes 2016 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Term | 12 years | |||||
Minimum | Senior Notes [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 2.80% | |||||
Minimum | Senior Notes 2015 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Term | 10 years | |||||
Maximum | Senior Notes 2016 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Term | 25 years | |||||
Maximum | Senior Notes [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.00% | |||||
Maximum | Senior Notes 2015 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Term | 30 years | |||||
Senior Notes Series A [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Face Amount | $ 100,000 | |||||
Debt Instrument, Maturity Date | Aug. 20, 2025 | |||||
Debt Instrument, Interest Rate, Stated Percentage | 3.15% | |||||
Senior Notes Series A [Member] | Senior Notes 2016 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Face Amount | $ 100,000 | |||||
Debt Instrument, Maturity Date | Oct. 20, 2028 | |||||
Debt Instrument, Interest Rate, Stated Percentage | 2.75% | |||||
Senior Notes Series B [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Face Amount | $ 100,000 | |||||
Debt Instrument, Maturity Date | Aug. 20, 2030 | |||||
Debt Instrument, Interest Rate, Stated Percentage | 3.35% | |||||
Senior Notes Series B [Member] | Senior Notes 2016 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Face Amount | $ 100,000 | |||||
Debt Instrument, Maturity Date | Oct. 20, 2033 | |||||
Debt Instrument, Interest Rate, Stated Percentage | 3.03% | |||||
Senior Notes Series C [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Face Amount | $ 50,000 | |||||
Debt Instrument, Maturity Date | Apr. 1, 2035 | |||||
Debt Instrument, Interest Rate, Stated Percentage | 3.61% | |||||
Senior Notes Series C [Member] | Senior Notes 2016 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Face Amount | $ 100,000 | |||||
Debt Instrument, Maturity Date | Oct. 20, 2037 | |||||
Debt Instrument, Interest Rate, Stated Percentage | 3.27% | |||||
Senior Notes Series D [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Face Amount | $ 100,000 | |||||
Debt Instrument, Maturity Date | Apr. 1, 2045 | |||||
Debt Instrument, Interest Rate, Stated Percentage | 4.02% | |||||
Senior Notes Series D [Member] | Senior Notes 2016 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Face Amount | $ 50,000 | |||||
Debt Instrument, Maturity Date | Oct. 20, 2041 | |||||
Debt Instrument, Interest Rate, Stated Percentage | 3.52% |
DEBT (Revolving Credit Agreemen
DEBT (Revolving Credit Agreement) (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | 12 Months Ended | |
Jun. 30, 2017 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | ||||
Line of Credit Facility, Expiration Date | Jun. 30, 2022 | |||
Amounts due banks | $ 2,020 | $ 1,758 | ||
Revolving credit agreement | ||||
Debt Instrument [Line Items] | ||||
Borrowing capacity under the line of credit | $ 400,000 | |||
Credit agreement initiation date | Jun. 30, 2017 | |||
Credit facility covenant compliance | As of December 31, 2017, the Company was in compliance with all of its covenants | |||
Debt Instrument, Term | 5 years | |||
Additional increase in borrowing capacity of the line of credit available at the entity's option | $ 100,000 |
DEBT (Other Textual) (Details)
DEBT (Other Textual) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Long-term Debt, Fiscal Year Maturity [Abstract] | |||
2,018 | $ 2,132 | ||
2,019 | 111 | ||
2,020 | 108 | ||
2,021 | 110 | ||
2,022 | 107 | ||
Thereafter | 710,607 | ||
Total interest paid | 23,820 | $ 15,332 | $ 5,631 |
Amounts due banks, interest at 31.8% (29.0% in 2016) | $ 2,020 | $ 1,758 | |
Weighted average interest rates of borrowings under the Credit Agreement and borrowings of foreign subsidiaries (as a percent) | 31.80% | 29.00% |
STOCK PLANS (Summary of Stock O
STOCK PLANS (Summary of Stock Option Activity) (Details) - Stock options | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Stock Options, Shares | |
Balance at beginning of year | shares | 1,609,702 |
Options granted | shares | 182,615 |
Options exercised | shares | (401,233) |
Options canceled | shares | (28,636) |
Balance at end of year | shares | 1,362,448 |
Exercisable at end of year | shares | 952,889 |
Stock Options, Weighted Average Exercise Price | |
Balance at beginning of year, weighted average exercise price (in dollars per share) | $ / shares | $ 51.32 |
Shares granted, weighted average exercise price (in dollars per share) | $ / shares | 85.43 |
Shares exercised, weighted average exercise price (in dollars per share) | $ / shares | 41.44 |
Shares canceled, weighted average exercise price (in dollars per share) | $ / shares | 68.18 |
Balance at end of year, weighted average exercise price (in dollars per share) | $ / shares | 58.45 |
Exercisable at end of year, weighted average exercise price (in dollars per share) | $ / shares | $ 52.57 |
STOCK PLANS (Stock Option Weigh
STOCK PLANS (Stock Option Weighted Average Assumptions) (Details) - Stock options - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Stock Plans | |||
Expected volatility | 25.77% | 28.86% | 30.73% |
Dividend yield | 1.62% | 1.70% | 1.48% |
Risk-free interest rate | 1.90% | 1.27% | 1.32% |
Expected option life (in years) | 4 years 6 months | 4 years 6 months | 4 years 6 months |
Weighted average fair value per option granted during the year | $ 17.50 | $ 12.55 | $ 16.35 |
STOCK PLANS (Non-Vested Stock O
STOCK PLANS (Non-Vested Stock Option Activity) (Details) - Stock options - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Stock Plans | |||
Balance of Nonvested Options (in shares) | 409,559 | 458,382 | |
Options granted | 182,615 | ||
Vested (in shares) | (205,066) | ||
Forfeited (in shares) | (26,372) | ||
Nonvested stock options, Weighted Average Fair Value at Grant Date | |||
Balance at beginning of year, weighted average fair value at grant date (in dollars per share) | $ 14.32 | ||
Granted, weighted average fair value at grant date (in dollars per share) | 17.50 | $ 12.55 | $ 16.35 |
Vested, weighted average fair value at grant date (in dollars per share) | 14.82 | ||
Forfeited, weighted average fair value at grant date (in dollars per share) | 14.58 | ||
Balance at end of year, weighted average fair value at grant date (in dollars per share) | $ 15.47 | $ 14.32 |
STOCK PLANS (Summary of Stock69
STOCK PLANS (Summary of Stock Options by Exercise Price Range) (Details) - Stock options | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Information about awards outstanding | |
Weighted Average Remaining Life (in years) | 6 years 2 months 12 days |
Outstanding | |
Options Outstanding, Number of Stock Options (in shares) | shares | 1,362,448 |
Exercisable | |
Options Exercisable, Number of Stock Options (in shares) | shares | 952,889 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | 5 years 2 months 12 days |
Exercise Price Range 1 | |
Information about awards outstanding | |
Exercise price, high end of range (in dollars per share) | $ 49.99 |
Weighted Average Remaining Life (in years) | 3 years 10 months 25 days |
Outstanding | |
Options Outstanding, Number of Stock Options (in shares) | shares | 508,257 |
Options Outstanding, Weighted Average Exercise Price (in dollars per share) | $ 38.79 |
Exercisable | |
Options Exercisable, Number of Stock Options (in shares) | shares | 508,257 |
Options Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 38.79 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | 3 years 10 months 25 days |
Exercise Price Range 2 | |
Information about awards outstanding | |
Exercise price, low end of range (in dollars per share) | $ 50 |
Exercise price, high end of range (in dollars per share) | $ 59.99 |
Weighted Average Remaining Life (in years) | 8 years 1 month 6 days |
Outstanding | |
Options Outstanding, Number of Stock Options (in shares) | shares | 224,894 |
Options Outstanding, Weighted Average Exercise Price (in dollars per share) | $ 58.11 |
Exercisable | |
Options Exercisable, Number of Stock Options (in shares) | shares | 75,615 |
Options Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 58.07 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | 8 years 1 month 6 days |
Exercise Price Range 3 | |
Information about awards outstanding | |
Exercise price, low end of range (in dollars per share) | $ 60 |
Weighted Average Remaining Life (in years) | 7 years 3 months 19 days |
Outstanding | |
Options Outstanding, Number of Stock Options (in shares) | shares | 629,297 |
Options Outstanding, Weighted Average Exercise Price (in dollars per share) | $ 74.45 |
Exercisable | |
Options Exercisable, Number of Stock Options (in shares) | shares | 369,017 |
Options Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 70.43 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | 6 years 6 months |
STOCK PLANS (Summary of Restric
STOCK PLANS (Summary of Restricted Stock Awards) (Details) - Restricted stock awards - $ / shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Shares | ||
Shares granted | 13,910 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 47,856 | 46,159 |
Weighted Average Grant Date Fair Value | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value | $ 90.37 | |
Shares granted, weighted average grant date fair value (in dollars per share) | $ 89.82 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 12,213 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | $ 71.54 | $ 64.65 |
STOCK PLANS (Summary Non-Vested
STOCK PLANS (Summary Non-Vested Restricted Stock Activity) (Details) - Restricted stock awards | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Shares | |
Balance at beginning of year (in shares) | shares | 46,159 |
Shares granted | shares | 13,910 |
Shares vested (in shares) | shares | (12,213) |
Balance at end of year (in shares) | shares | 47,856 |
Weighted Average Grant Date Fair Value | |
Balance at beginning of year, weighted average grant date fair value (in dollars per share) | $ / shares | $ 64.65 |
Shares granted, weighted average grant date fair value (in dollars per share) | $ / shares | 89.82 |
Shares vested, weighted average grant date fair value (in dollars per share) | $ / shares | 90.37 |
Balance at end of year, weighted average grant date fair value (in dollars per share) | $ / shares | $ 71.54 |
STOCK PLANS (RSUs and PSUs) (De
STOCK PLANS (RSUs and PSUs) (Details) | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Restricted Stock Units | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Balance at beginning of year (in shares) | shares | 376,784 |
Shares granted | shares | 145,245 |
Shares vested (in shares) | shares | (71,845) |
Shares forfeited | shares | (31,218) |
Balance at end of year (in shares) | shares | 418,966 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | |
Balance at beginning of year, weighted average grant date fair value (in dollars per share) | $ / shares | $ 59.75 |
Shares granted, weighted average grant date fair value (in dollars per share) | $ / shares | 85.69 |
Shares vested, weighted average grant date fair value (in dollars per share) | $ / shares | 49.39 |
Shares forfeited, weighted average grant date fair value (in dollars per share) | $ / shares | 66.68 |
Balance at end of year, weighted average grant date fair value (in dollars per share) | $ / shares | $ 69.98 |
Performance Shares [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Shares granted | shares | 34,660 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | |
Shares granted, weighted average grant date fair value (in dollars per share) | $ / shares | $ 70.09 |
STOCK PLANS (Textual) (Details)
STOCK PLANS (Textual) (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Apr. 23, 2015 | |
Stock Plans | ||||
Common shares available for future grant under all plans (in shares) | 4,324,951 | |||
Total stock-based compensation expense | $ 12,698,000 | $ 10,332,000 | $ 7,932,000 | |
Tax benefit related to stock-based compensation recognized in the period | 4,861,000 | 3,955,000 | 3,037,000 | |
Total unrecognized stock-based compensation expense related to nonvested stock options, restricted shares and restricted stock units | $ 20,022,000 | |||
Weighted average period of recognition of unrecognized stock-based compensation expense (in months) | 1 year 10 months 25 days | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | $ 3,040,000 | 2,865,000 | 3,273,000 | |
Stock options | ||||
Stock Plans | ||||
Award expiration (in years) | 10 years | |||
Award vesting period (in years) | 3 years | |||
Aggregate intrinsic value of awards outstanding | $ 45,139,000 | |||
Aggregate intrinsic value of awards exercisable | 37,169,000 | |||
Total intrinsic value of awards exercised | $ 19,328,000 | $ 30,967,000 | $ 6,879,000 | |
Restricted stock awards | ||||
Stock Plans | ||||
Shares converted (in shares) | 12,213 | |||
Shares granted | 13,910 | |||
Shares granted (in dollars per share) | $ 89.82 | |||
Remaining weighted average life of non-vested restricted awards (in years) | 1 year 2 months 12 days | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 47,856 | 46,159 | ||
Restricted Stock Units | ||||
Stock Plans | ||||
Shares converted (in shares) | 71,845 | |||
Shares granted | 145,245 | |||
Shares granted (in dollars per share) | $ 85.69 | |||
Remaining weighted average life of non-vested restricted awards (in years) | 1 year 10 months 25 days | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 418,966 | 376,784 | ||
Performance Shares [Member] | ||||
Stock Plans | ||||
Award vesting period (in years) | 3 years | |||
Shares granted | 34,660 | |||
Shares granted (in dollars per share) | $ 70.09 | |||
Remaining weighted average life of non-vested restricted awards (in years) | 1 year 7 months 6 days | |||
1995 Lincoln Stock Purchase Plan | ||||
Stock Plans | ||||
Maximum additional number of the Company's common shares that may be granted (in shares) | 800,000 | |||
Shares purchased (in shares) | 10,458 | 15,827 | 16,012 | |
Equity and Incentive Compensation Plan [Member] | ||||
Stock Plans | ||||
Maximum additional number of the Company's common shares that may be granted (in shares) | 5,400,000 | |||
Equity and Incentive Compensation Plan [Member] | Restricted Stock Units | ||||
Stock Plans | ||||
Shares granted | 110,585 | |||
Equity and Incentive Compensation Plan [Member] | Performance Shares [Member] | ||||
Stock Plans | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 75,285 | |||
Director Plan | ||||
Stock Plans | ||||
Maximum additional number of the Company's common shares that may be granted (in shares) | 300,000 | |||
2005 Plan | Restricted Stock Units | ||||
Stock Plans | ||||
Shares converted (in shares) | 10,193 | |||
Deferred RSUs (in shares) | 96,180 | |||
Minimum | Restricted stock awards | ||||
Stock Plans | ||||
Award vesting period (in years) | 3 years | |||
Minimum | Restricted Stock Units | ||||
Stock Plans | ||||
Award vesting period (in years) | 3 years | |||
Maximum | Restricted stock awards | ||||
Stock Plans | ||||
Award vesting period (in years) | 5 years | |||
Maximum | Restricted Stock Units | ||||
Stock Plans | ||||
Award vesting period (in years) | 5 years | |||
Maximum | 1995 Lincoln Stock Purchase Plan | ||||
Stock Plans | ||||
Dollar value of shares that each employee has the ability to purchase on the open market, on a commission-free basis annually under the plan | $ 10,000 |
COMMON STOCK REPURCHASE PROGR74
COMMON STOCK REPURCHASE PROGRAM (Details) | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
COMMON SHARE REPURCHASE PROGRAM | |
Shares authorized for repurchase under share repurchase program (in shares) | 55,000,000 |
Shares purchased in the open market under share repurchase program (in shares) | 459,901 |
Average cost per share of shares purchased in the open market under share repurchase program (in dollars per share) | $ / shares | $ 89.58 |
Remaining shares available for repurchase under the stock repurchase program (in shares) | 8,428,574 |
RETIREMENT ANNUITY AND GUARAN75
RETIREMENT ANNUITY AND GUARANTEED CONTINUOUS EMPLOYMENT PLANS (Obligations and Funded Status) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Change in benefit obligations | ||||
Service cost | $ 3,286 | $ 17,689 | $ 19,933 | |
Interest cost | 22,750 | 23,578 | 36,002 | |
Change in plan assets | ||||
Balance at the beginning of year | 599,085 | |||
Balance at the end of year | 681,732 | 599,085 | ||
Foreign Pension Plan [Member] | ||||
Change in benefit obligations | ||||
Benefit obligations at beginning of year | 79,972 | 76,824 | ||
Service cost | 2,678 | 2,215 | ||
Interest cost | 3,253 | 2,902 | ||
Plan participants' contributions | 176 | 148 | ||
Acquisitions | [1] | 100,551 | 0 | |
Actuarial (gain) loss | 4,926 | 7,671 | ||
Benefits Paid | (4,909) | (2,306) | ||
Settlement/curtailment | [2] | (700) | 0 | |
Currency translation | 7,576 | (7,482) | ||
Benefit obligations at end of year | 193,523 | 79,972 | 76,824 | |
Change in plan assets | ||||
Balance at the beginning of year | 70,341 | 73,917 | ||
Actual return on plan assets | 5,770 | 3,485 | ||
Employer contributions | 1,684 | 1,286 | ||
Plan participants' contributions | 176 | 148 | ||
Acquisitions | [1] | 32,599 | 0 | |
Benefits paid | (3,196) | (1,840) | ||
Settlement | [2] | (22) | 0 | |
Currency translation | 5,992 | (6,655) | ||
Balance at the end of year | 113,344 | 70,341 | 73,917 | |
Net amount recognized | ||||
Funded status at end of year | (80,179) | (9,631) | ||
Unrecognized actuarial net loss | 25,987 | 24,476 | ||
Unrecognized prior service cost | (11) | (18) | ||
Unrecognized transition assets, net | 35 | 37 | ||
Net amount recognized in the balance sheets | (54,168) | 14,864 | ||
United States Pension Plan of US Entity [Member] | ||||
Change in benefit obligations | ||||
Benefit obligations at beginning of year | 484,758 | 481,345 | ||
Service cost | 608 | 15,474 | ||
Interest cost | 19,497 | 20,676 | ||
Plan participants' contributions | 0 | 0 | ||
Acquisitions | [1] | 0 | 0 | |
Actuarial (gain) loss | 46,144 | 20,333 | ||
Benefits Paid | (6,409) | (29,002) | ||
Settlement/curtailment | [2] | (37,523) | (24,068) | |
Currency translation | 0 | 0 | ||
Benefit obligations at end of year | 507,075 | 484,758 | 481,345 | |
Change in plan assets | ||||
Balance at the beginning of year | 528,744 | 502,184 | ||
Actual return on plan assets | 82,732 | 34,779 | ||
Employer contributions | 55 | 20,087 | ||
Plan participants' contributions | 0 | 0 | ||
Acquisitions | [1] | 0 | 0 | |
Benefits paid | (5,620) | (28,306) | ||
Settlement | [2] | (37,523) | 0 | |
Currency translation | 0 | 0 | ||
Balance at the end of year | 568,388 | 528,744 | $ 502,184 | |
Net amount recognized | ||||
Funded status at end of year | 61,313 | 43,986 | ||
Unrecognized actuarial net loss | 90,679 | 122,109 | ||
Unrecognized prior service cost | 0 | 0 | ||
Unrecognized transition assets, net | 0 | 0 | ||
Net amount recognized in the balance sheets | $ 151,992 | $ 166,095 | ||
[1] | Acquisitions in 2017 relate to acquisition of Air Liquide Welding as discussed in Note 3 to the consolidated financial statements. | |||
[2] | Settlements in 2017 resulting from lump sum pension payments. |
RETIREMENT ANNUITY AND GUARAN76
RETIREMENT ANNUITY AND GUARANTEED CONTINUOUS EMPLOYMENT PLANS (Amounts Recognized in Consolidated Balance Sheets) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | ||
Foreign Pension Plan [Member] | ||||
Retirement Annuity and Guaranteed Continuous Employment Plans | ||||
Prepaid Pension | [1] | $ 368 | $ 228 | |
Accrued pension liability, current | [2] | (3,483) | (283) | |
Accrued pension liability, long-term | [3] | (77,064) | (9,576) | |
Accumulated other comprehensive loss, excluding tax effects | 26,011 | 24,495 | ||
Net amount recognized in the balance sheets | (54,168) | 14,864 | ||
United States Pension Plan of US Entity [Member] | ||||
Retirement Annuity and Guaranteed Continuous Employment Plans | ||||
Prepaid Pension | 81,485 | [1] | 64,169 | |
Accrued pension liability, current | (5,332) | [2] | (5,064) | |
Accrued pension liability, long-term | (14,840) | [3] | (15,119) | |
Accumulated other comprehensive loss, excluding tax effects | 90,679 | 122,109 | ||
Net amount recognized in the balance sheets | $ 151,992 | $ 166,095 | ||
[1] | Included in Other assets. | |||
[2] | Included in Other current liabilities. | |||
[3] | Included in Other liabilities. |
RETIREMENT ANNUITY AND GUARAN77
RETIREMENT ANNUITY AND GUARANTEED CONTINUOUS EMPLOYMENT PLANS (Components of Pension Cost for Defined Benefit Plans) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||
Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |||||
Components of Pension Cost for Defined Benefit Plan | |||||||||
Service cost | $ 3,286 | $ 17,689 | $ 19,933 | ||||||
Interest cost | 22,750 | 23,578 | 36,002 | ||||||
Expected return on plan assets | (35,800) | (35,716) | (54,638) | ||||||
Amortization of prior service cost | 15 | (394) | (626) | ||||||
Amortization of net loss | [1] | 4,014 | 9,893 | 19,406 | |||||
Settlement/curtailment loss | $ (2,867) | $ (5,283) | (8,252) | [2] | 1,062 | [2] | (142,738) | [2] | |
Pension cost for defined benefit plans | [3] | $ 2,517 | 13,988 | $ 162,815 | |||||
VENEZUELA | |||||||||
Components of Pension Cost for Defined Benefit Plan | |||||||||
Amortization of net loss | $ 959 | ||||||||
[1] | The amortization of net loss includes a $959 charge resulting from the deconsolidation of the Venezuelan subsidiary during the year ended December 31, 2016. | ||||||||
[2] | Pension settlement charges for the year ended December 31, 2017 resulting from lump sum pension payments. For the year ended December 31, 2015, the Company recorded pension settlement charges of $142,738, primarily related to the purchase of the group annuity contract. | ||||||||
[3] | The decrease in pension cost for defined benefit plans for the year ended December 31, 2017 was due to the U.S. plan freeze effective December 31, 2016. |
RETIREMENT ANNUITY AND GUARAN78
RETIREMENT ANNUITY AND GUARANTEED CONTINUOUS EMPLOYMENT PLANS (Pension Plans with Accumulated Benefit Obligations in Excess of Plan Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
United States Pension Plan of US Entity [Member] | ||
Pension Plans with Accumulated Benefit Obligations in Excess of Plan Assets | ||
Projected benefit obligation | $ 26,149 | $ 25,731 |
Accumulated benefit obligation | 25,870 | 25,460 |
Fair value of plan assets | 5,977 | 5,548 |
Foreign Pension Plan [Member] | ||
Pension Plans with Accumulated Benefit Obligations in Excess of Plan Assets | ||
Projected benefit obligation | 182,512 | 47,776 |
Accumulated benefit obligation | 174,667 | 45,128 |
Fair value of plan assets | $ 102,107 | $ 38,200 |
RETIREMENT ANNUITY AND GUARAN79
RETIREMENT ANNUITY AND GUARANTEED CONTINUOUS EMPLOYMENT PLANS (Benefit Payments for Plans) (Details) $ in Thousands | Dec. 31, 2017USD ($) |
United States Pension Plan of US Entity [Member] | |
Benefit Payments for Plans | |
2,018 | $ 38,031 |
2,019 | 29,782 |
2,020 | 32,547 |
2,021 | 28,542 |
2,022 | 28,724 |
2023 through 2027 | 149,468 |
Foreign Pension Plan [Member] | |
Benefit Payments for Plans | |
2,018 | 8,129 |
2,019 | 8,633 |
2,020 | 8,833 |
2,021 | 9,133 |
2,022 | 8,756 |
2023 through 2027 | $ 44,284 |
RETIREMENT ANNUITY AND GUARAN80
RETIREMENT ANNUITY AND GUARANTEED CONTINUOUS EMPLOYMENT PLANS (Weighted Average Assumptions Used to Measure the Benefit Obligation) (Details) | Dec. 31, 2017 | Dec. 31, 2016 |
Foreign Pension Plan [Member] | ||
Weighted average assumptions used to measure the benefit obligation | ||
Discount rate | 2.00% | 3.30% |
Rate of increase in compensation | 2.70% | 3.70% |
United States Pension Plan of US Entity [Member] | ||
Weighted average assumptions used to measure the benefit obligation | ||
Discount rate | 3.70% | 4.20% |
Rate of increase in compensation | 2.50% | 2.50% |
RETIREMENT ANNUITY AND GUARAN81
RETIREMENT ANNUITY AND GUARANTEED CONTINUOUS EMPLOYMENT PLANS (Weighted Average Assumptions Used to Measure the Net Periodic Benefit Cost) (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
United States Pension Plan of US Entity [Member] | |||
Weighted average assumptions used to measure the net periodic benefit cost | |||
Discount rate | 4.20% | 4.50% | 4.00% |
Rate of increase in compensation | 2.50% | 2.60% | 2.50% |
Expected return on plan assets | 6.00% | 6.20% | 6.40% |
Foreign Pension Plan [Member] | |||
Weighted average assumptions used to measure the net periodic benefit cost | |||
Discount rate | 2.20% | 3.90% | 4.00% |
Rate of increase in compensation | 2.50% | 3.70% | 3.90% |
Expected return on plan assets | 4.50% | 5.70% | 5.40% |
RETIREMENT ANNUITY AND GUARAN82
RETIREMENT ANNUITY AND GUARANTEED CONTINUOUS EMPLOYMENT PLANS (Pension Plan Assets by Level with the Fair Value Hierarchy) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | |
Pension plans' assets by level within the fair value hierarchy | |||
Total assets at fair value | $ 681,732 | $ 599,085 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Pension plans' assets by level within the fair value hierarchy | |||
Total assets at fair value | 46,693 | 27,759 | |
Significant Other Observable Inputs (Level 2) | |||
Pension plans' assets by level within the fair value hierarchy | |||
Total assets at fair value | 398,578 | 134,051 | |
Significant Unobservable Inputs (Level 3) | |||
Pension plans' assets by level within the fair value hierarchy | |||
Total assets at fair value | 0 | 0 | |
Corporate stock | |||
Pension plans' assets by level within the fair value hierarchy | |||
Total assets at fair value | [1] | 4,566 | 4,071 |
Corporate stock | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Pension plans' assets by level within the fair value hierarchy | |||
Total assets at fair value | 4,566 | 4,071 | |
Corporate stock | Significant Other Observable Inputs (Level 2) | |||
Pension plans' assets by level within the fair value hierarchy | |||
Total assets at fair value | 0 | 0 | |
Corporate stock | Significant Unobservable Inputs (Level 3) | |||
Pension plans' assets by level within the fair value hierarchy | |||
Total assets at fair value | 0 | 0 | |
Cash and cash equivalents | |||
Pension plans' assets by level within the fair value hierarchy | |||
Total assets at fair value | 8,922 | 3,652 | |
Cash and cash equivalents | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Pension plans' assets by level within the fair value hierarchy | |||
Total assets at fair value | 8,922 | 3,652 | |
Cash and cash equivalents | Significant Other Observable Inputs (Level 2) | |||
Pension plans' assets by level within the fair value hierarchy | |||
Total assets at fair value | 0 | 0 | |
Cash and cash equivalents | Significant Unobservable Inputs (Level 3) | |||
Pension plans' assets by level within the fair value hierarchy | |||
Total assets at fair value | 0 | 0 | |
Corporate and other obligations | |||
Pension plans' assets by level within the fair value hierarchy | |||
Total assets at fair value | [2] | 398,578 | 134,051 |
Corporate and other obligations | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Pension plans' assets by level within the fair value hierarchy | |||
Total assets at fair value | 0 | 0 | |
Corporate and other obligations | Significant Other Observable Inputs (Level 2) | |||
Pension plans' assets by level within the fair value hierarchy | |||
Total assets at fair value | 398,578 | 134,051 | |
Corporate and other obligations | Significant Unobservable Inputs (Level 3) | |||
Pension plans' assets by level within the fair value hierarchy | |||
Total assets at fair value | 0 | 0 | |
US Treasury Bond Securities [Member] | |||
Pension plans' assets by level within the fair value hierarchy | |||
Total assets at fair value | [2] | 33,205 | 20,036 |
US Treasury Bond Securities [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Pension plans' assets by level within the fair value hierarchy | |||
Total assets at fair value | 33,205 | 20,036 | |
US Treasury Bond Securities [Member] | Significant Other Observable Inputs (Level 2) | |||
Pension plans' assets by level within the fair value hierarchy | |||
Total assets at fair value | 0 | 0 | |
US Treasury Bond Securities [Member] | Significant Unobservable Inputs (Level 3) | |||
Pension plans' assets by level within the fair value hierarchy | |||
Total assets at fair value | 0 | 0 | |
Common trusts and 103-12 investments | |||
Pension plans' assets by level within the fair value hierarchy | |||
Total assets at fair value | [3],[4] | 199,066 | 397,924 |
Private equity funds | |||
Pension plans' assets by level within the fair value hierarchy | |||
Total assets at fair value | [3],[5] | $ 37,395 | $ 39,351 |
[1] | Equity securities are primarily comprised of corporate stock and mutual funds directly held by the plans. Equity securities are valued using the closing price reported on the active market on which the individual securities are traded. | ||
[2] | Fixed income securities are primarily comprised of governmental and corporate bonds directly held by the plans. Governmental and corporate bonds are valued using both market observable inputs for similar assets that are traded on an active market and the closing price on the active market on which the individual securities are traded. | ||
[3] | Certain assets that are measured at fair value using the net asset value ("NAV") practical expedient have not been classified in the fair value hierarchy. | ||
[4] | Common trusts and 103-12 investments (collectively "Trusts") are comprised of a number of investment funds that invest in a diverse portfolio of assets including equity securities, corporate and governmental bonds, equity and credit indexes and money markets. Trusts are valued at the NAV as determined by their custodian. NAV represents the accumulation of the unadjusted quoted close prices on the reporting date for the underlying investments divided by the total shares outstanding at the reporting dates. | ||
[5] | Private equity funds consist of four funds seeking capital appreciation by investing in private equity investment partnerships and venture capital companies. Private equity fund valuations are based on the NAV of the underlying assets. Funds are comprised of unrestricted and restricted publicly traded securities and privately held securities. Unrestricted securities are valued at the closing market price on the reporting date. Restricted securities may be valued at a discount from such closing public market price, depending on facts and circumstances. Privately held securities are valued at fair value as determined by the fund directors and general partners. |
RETIREMENT ANNUITY AND GUARAN83
RETIREMENT ANNUITY AND GUARANTEED CONTINUOUS EMPLOYMENT PLANS (Defined Contribution Plans) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Contribution Plan | |||
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay | 6.00% | ||
Employer match of employee contributions of first 3% of eligible compensation (as a percent) | 100.00% | ||
Percentage of eligible compensation, matched 100% by employer (as a percent) | 3.00% | ||
Percentage of base pay as additional annual Company contribution to participants (as a percent) | 3.00% | ||
Annual costs recognized for defined contribution plans | $ 25,285 | $ 8,361 | $ 10,082 |
Minimum | |||
Defined Contribution Plan | |||
DefinedContributionPlanEmployeeServicePeriod | 5 years | ||
Maximum | |||
Defined Contribution Plan | |||
DefinedContributionPlanEmployeeServicePeriod | 30 years |
RETIREMENT ANNUITY AND GUARAN84
RETIREMENT ANNUITY AND GUARANTEED CONTINUOUS EMPLOYMENT PLANS (Textual) (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||
Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($)hours | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |||||
After-tax amounts included in Accumulated other comprehensive loss | |||||||||
Unrecognized actuarial net loss | $ 85,253 | $ 85,253 | |||||||
Unrecognized prior service credits | (8) | (8) | |||||||
Unrecognized transition obligations | 32 | 32 | |||||||
Pre-tax amounts expected to be recognized as components of net periodic benefit cost during next fiscal year | |||||||||
Unrecognized actuarial net loss | 3,793 | ||||||||
Unrecognized prior service credits | 1 | ||||||||
Unrecognized transition obligations | 3 | ||||||||
Total accumulated benefit obligation for all plans | 691,827 | 691,827 | $ 560,230 | ||||||
Supplemental Executive Retirement Plan | |||||||||
Total net pension costs | [1] | $ 2,517 | 13,988 | $ 162,815 | |||||
Other Benefits | |||||||||
Minimum percentage of every standard work week for which, the Company will provide work to employees in Cleveland, Ohio, area operations, covered under the guaranteed continuous employment plan (as a percent) | 75.00% | ||||||||
Hours in a standard work week under Guaranteed Continuous Employment Plan (hours) | hours | 40 | ||||||||
Minimum notice period for the termination of Guaranteed Continuous Employment Plan (in months) | 6 months | ||||||||
Defined Benefit Plan, Recognized Net Gain (Loss) Due to Settlements and Curtailments | (2,867) | $ (5,283) | $ (8,252) | [2] | 1,062 | [2] | (142,738) | [2] | |
Defined Benefit Plan, Recognized Net Gain (Loss) Due to Curtailments | (2,206) | ||||||||
Supplemental executive retirement plan (SERP) | |||||||||
Supplemental Executive Retirement Plan | |||||||||
Total net pension costs | 772 | 2,113 | 1,703 | ||||||
Projected benefit obligation | $ 17,047 | 17,047 | $ 16,738 | $ 14,643 | |||||
Other Benefits | |||||||||
Defined Benefit Plan, Recognized Net Gain (Loss) Due to Curtailments | $ (1,144) | ||||||||
Equity Securities | |||||||||
Target allocation for pension plan assets | |||||||||
Target plan asset allocations range minimum | 15.00% | ||||||||
Target plan asset allocations range maximum | 25.00% | ||||||||
Debt Securities | |||||||||
Target allocation for pension plan assets | |||||||||
Target plan asset allocations range minimum | 75.00% | ||||||||
Target plan asset allocations range maximum | 85.00% | ||||||||
[1] | The decrease in pension cost for defined benefit plans for the year ended December 31, 2017 was due to the U.S. plan freeze effective December 31, 2016. | ||||||||
[2] | Pension settlement charges for the year ended December 31, 2017 resulting from lump sum pension payments. For the year ended December 31, 2015, the Company recorded pension settlement charges of $142,738, primarily related to the purchase of the group annuity contract. |
INCOME TAXES (Components of Inc
INCOME TAXES (Components of Income (Loss) before Income Taxes) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||||||
Dec. 31, 2017 | [1] | Sep. 30, 2017 | [2] | Jun. 30, 2017 | [3] | Mar. 31, 2017 | [4] | Dec. 31, 2016 | [1] | Sep. 30, 2016 | [2] | Jun. 30, 2016 | [3] | Mar. 31, 2016 | [4] | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Components of income (loss) before income taxes | |||||||||||||||||||
U.S. | $ 213,171 | $ 209,409 | $ 118,037 | ||||||||||||||||
Non-U.S. | 153,065 | 67,979 | 51,750 | ||||||||||||||||
Income before income taxes | $ 73,728 | $ 130,642 | $ 83,966 | $ 77,900 | $ 78,152 | $ 80,296 | $ 45,758 | $ 73,182 | $ 366,236 | $ 277,388 | $ 169,787 | ||||||||
[1] | 2017 includes special item charges of $2,867 ($1,770 after-tax) for pension settlement charges, $6,590 ($6,198 after-tax) for rationalization and asset impairment charges, $28,616 for the net impact of the U.S. Tax Act and acquisition-related items including $2,264 ($1,708 after-tax) in amortization of step up in value of acquired inventories, $3,616 ($3,102 after-tax) for acquisition transaction and integration costs and a $1,935 adjustment to the bargain purchase gain. | ||||||||||||||||||
[2] | 2017 includes special item charges of $5,283 ($3,260 after-tax) for pension settlement charges and acquisition-related items including $2,314 ($1,745 after-tax) in amortization of step up in value of acquired inventories, $3,273 ($2,229 after-tax) for acquisition transaction and integration costs and a $51,585 bargain purchase gain. | ||||||||||||||||||
[3] | 2017 includes special item charges of $4,498 ($3,494 after-tax) related to acquisition transaction and integration costs.2016 includes special item charges of $34,348 ($33,251 after-tax) primarily related to the loss on deconsolidation of Venezuelan subsidiary and a tax benefit of $7,196 related to the reversal of an income tax valuation allowance as a result of a legal entity change to realign the Company's tax structure. | ||||||||||||||||||
[4] | 2017 includes special item charges of $3,615 ($2,734 after-tax) related to acquisition transaction costs. |
INCOME TAXES (Components of I86
INCOME TAXES (Components of Income Tax Expense (Benefit)) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Deferred Income Tax Expense (Benefit) Net Resulting from Tax Reform Act | $ 14,532 | ||
Current: | |||
Federal | 89,182 | $ 57,090 | $ 60,500 |
Non-U.S. | 25,746 | 23,344 | 28,046 |
State and local | 7,640 | 8,386 | 9,557 |
Current income tax expense (benefit) | 122,568 | 88,820 | 98,103 |
Deferred: | |||
Federal | (4,391) | (1,716) | (47,902) |
Non-U.S. | (82) | (8,261) | (3,362) |
State and local | 666 | 172 | (4,464) |
Deferred income tax expense (benefit) | (3,807) | (9,805) | (55,728) |
Total | 118,761 | $ 79,015 | $ 42,375 |
Transition Tax Expense Benefit Net Resulting from Tax Reform Act | $ 36,387 |
INCOME TAXES (Income Tax Rate R
INCOME TAXES (Income Tax Rate Reconciliation) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Differences between total income tax expense and the amount computed by applying the statutory federal income tax rate to income before income taxes | |||
Statutory rate (as a percent) | 35.00% | 35.00% | 35.00% |
Statutory rate of 35% applied to pre-tax income | $ 128,182 | $ 97,086 | $ 59,426 |
State and local income taxes, net of federal tax benefit | 5,671 | 5,554 | 1,868 |
Excess tax benefits resulting from exercises of stock-based compensation | (6,276) | 0 | 0 |
Net impact of the U.S. Tax Act | 21,949 | 0 | 0 |
Foreign withholding taxes | 6,667 | 0 | 0 |
Intangible and asset impairments/(write-off) | 0 | (4,438) | 2,184 |
Foreign rate variance | (13,929) | (8,128) | (11,399) |
Venezuela deconsolidation/devaluation | 0 | 5,192 | 11,396 |
Income Tax Reconciliation Bargain Purchase Gain | (17,556) | 0 | 0 |
Valuation allowances | 102 | (8,525) | 2,900 |
Manufacturing deduction | (5,922) | (5,190) | (9,207) |
U.S. tax cost (benefit) of foreign source income | 294 | (489) | (8,754) |
Other | (421) | (2,047) | (6,039) |
Total | $ 118,761 | $ 79,015 | $ 42,375 |
Effective tax rate | 32.40% | 28.50% | 25.00% |
Total income tax payments, net of refunds | $ 81,691 | $ 72,965 | $ 101,939 |
INCOME TAXES (Deferred Taxes) (
INCOME TAXES (Deferred Taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Income Tax Reconciliation Foreign Withholding Taxes | $ 6,667 | $ 0 | $ 0 |
Deferred tax assets: | |||
Tax loss and credit carry-forwards | 65,284 | 52,270 | |
Inventory | 2,501 | 2,080 | |
Other accruals | 14,873 | 18,186 | |
Employee benefits | 18,468 | 23,596 | |
Pension obligations | 12,363 | 2,503 | |
Other | 4,923 | 3,020 | |
Deferred tax assets, gross | 118,412 | 101,655 | |
Valuation allowance | (68,694) | (47,849) | |
Deferred tax assets, net | 49,718 | 53,806 | |
Deferred tax liabilities: | |||
Property, plant and equipment | 21,427 | 32,210 | |
Intangible assets | 10,729 | 17,506 | |
Inventory | 5,891 | 10,059 | |
Pension obligations | 16,137 | 17,915 | |
Other | 20,313 | 9,309 | |
Deferred tax liabilities | 74,497 | 86,999 | |
Total deferred taxes | (24,779) | $ (33,193) | |
Tax loss carryforwards of certain subsidiaries that will expire in various years from 2018 through 2033 | 80,961 | ||
Tax loss carryforwards of certain subsidiaries for which there is no expiration date | $ 177,796 |
INCOME TAXES (Unrecognized Tax
INCOME TAXES (Unrecognized Tax Benefits) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Balance at the beginning of the year | $ 18,499 | $ 14,332 |
Increase related to current year tax provisions | 1,448 | 1,975 |
Increase related to prior years' tax positions | 1,460 | 5,188 |
Unrecognized Tax Benefits, Increase Resulting from Acquisition | 8,223 | 0 |
Decrease related to settlements with taxing authorities | (522) | (265) |
Resolution of and other decreases in prior years' tax liabilities | (1,734) | (1,982) |
Other | 1,075 | (749) |
Balance at the end of the year | 28,449 | 18,499 |
Interest and penalties expense (benefit) | 1,079 | 597 |
Accrued interest and penalties | 8,135 | 6,431 |
Total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate | 12,709 | $ 9,813 |
Reasonably possible further reduction in prior years' unrecognized tax benefits during the next twelve months | $ 2,414 |
DERIVATIVES (Fair Value of Deri
DERIVATIVES (Fair Value of Derivative Instruments) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Other Current Assets | ||
Fair values of derivative instruments | ||
Fair value of derivative assets | $ 2,776 | $ 1,185 |
Other Current Liabilities | ||
Fair values of derivative instruments | ||
Fair value of derivative liabilities | 4,351 | 2,452 |
Other Noncurrent Liabilities [Member] | ||
Fair values of derivative instruments | ||
Fair value of derivative liabilities | 5,085 | 5,439 |
Designated as Hedging Instruments | Foreign exchange contracts | Other Current Assets | ||
Fair values of derivative instruments | ||
Fair value of derivative assets | 519 | 439 |
Designated as Hedging Instruments | Foreign exchange contracts | Other Current Liabilities | ||
Fair values of derivative instruments | ||
Fair value of derivative liabilities | 604 | 923 |
Designated as Hedging Instruments | Foreign exchange contracts | Other Noncurrent Liabilities [Member] | ||
Fair values of derivative instruments | ||
Fair value of derivative liabilities | 0 | 0 |
Designated as Hedging Instruments | Interest Rate Swap [Member] | Other Current Assets | ||
Fair values of derivative instruments | ||
Fair value of derivative assets | 0 | 0 |
Designated as Hedging Instruments | Interest Rate Swap [Member] | Other Current Liabilities | ||
Fair values of derivative instruments | ||
Fair value of derivative liabilities | 0 | 0 |
Designated as Hedging Instruments | Interest Rate Swap [Member] | Other Noncurrent Liabilities [Member] | ||
Fair values of derivative instruments | ||
Fair value of derivative liabilities | 5,085 | 5,439 |
Not designated as hedging instruments | Foreign exchange contracts | Other Current Assets | ||
Fair values of derivative instruments | ||
Fair value of derivative assets | 2,257 | 746 |
Not designated as hedging instruments | Foreign exchange contracts | Other Current Liabilities | ||
Fair values of derivative instruments | ||
Fair value of derivative liabilities | 3,747 | 1,529 |
Not designated as hedging instruments | Foreign exchange contracts | Other Noncurrent Liabilities [Member] | ||
Fair values of derivative instruments | ||
Fair value of derivative liabilities | $ 0 | $ 0 |
DERIVATIVES (Derivatives Income
DERIVATIVES (Derivatives Income Statement Impact) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Foreign exchange contracts | Selling, General and Administrative Expenses [Member] | ||
Effects of undesignated derivative instruments on the entity's Consolidated Statements of Income | ||
Gains (losses) recognized in income | $ 17,590 | $ (21,096) |
Commodity contracts | Cost of goods sold | ||
Effects of undesignated derivative instruments on the entity's Consolidated Statements of Income | ||
Gains (losses) recognized in income | $ 0 | $ (742) |
DERIVATIVES (AOCI Impact) (Deta
DERIVATIVES (AOCI Impact) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Foreign exchange contracts | ||
Fair values of derivative instruments | ||
Gain (loss) recognized in AOCI, net of tax | $ (224) | $ (512) |
Net Investment Hedging [Member] | ||
Fair values of derivative instruments | ||
Gain (loss) recognized in AOCI, net of tax | 1,099 | 1,099 |
Sales | Foreign exchange contracts | ||
Fair values of derivative instruments | ||
Gain (loss) reclassified from AOCI to earnings | 1,860 | (1,580) |
Cost of goods sold | Foreign exchange contracts | ||
Fair values of derivative instruments | ||
Gain (loss) reclassified from AOCI to earnings | $ 502 | $ (407) |
DERIVATIVES (Textual) (Details)
DERIVATIVES (Textual) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Derivative [Line Items] | ||
Maximum period for which derivative contracts cover currency and commodity exposures (in years) | 2 years | |
Hedge ineffectiveness was immaterial | Hedge ineffectiveness was immaterial for each of the three years in the period ended December 31, 2017. | |
Derivative Instruments, Gain (Loss) Reclassification from Accumulated OCI to Income, Estimate of Time to Transfer | 12 months | |
Foreign exchange contracts | ||
Derivative [Line Items] | ||
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net | $ (224) | |
Designated as Hedging Instruments | Foreign exchange contracts | ||
Derivative [Line Items] | ||
Notional amount of derivative instruments | 35,489 | $ 36,385 |
Designated as Hedging Instruments | Interest Rate Swap [Member] | ||
Derivative [Line Items] | ||
Notional amount of derivative instruments | 100,000 | |
Not designated as hedging instruments | Foreign exchange contracts | ||
Derivative [Line Items] | ||
Notional amount of derivative instruments | $ 340,884 | $ 261,168 |
Minimum | ||
Derivative [Line Items] | ||
Debt Instrument, Basis Spread on Variable Rate | 0.60% | |
Maximum | ||
Derivative [Line Items] | ||
Debt Instrument, Basis Spread on Variable Rate | 1.80% |
FAIR VALUE (Summary of Fair Val
FAIR VALUE (Summary of Fair Value Assets and Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Assets: | ||
Marketable Securities | $ 179,125 | $ 38,922 |
Liabilities: | ||
Contingent consideration | 7,086 | |
Recurring basis | ||
Assets: | ||
Marketable Securities | 179,125 | |
Total assets | 181,901 | 40,107 |
Liabilities: | ||
Contingent consideration | 7,086 | 8,154 |
Forward Contract | 15,272 | |
Deferred compensation | 25,397 | 25,244 |
Total liabilities | 41,919 | 56,561 |
Recurring basis | Foreign exchange contracts | ||
Assets: | ||
Assets | 2,776 | 1,185 |
Liabilities: | ||
Liabilities | 4,351 | 2,452 |
Recurring basis | Interest Rate Swap [Member] | ||
Liabilities: | ||
Liabilities | 5,085 | |
Recurring basis | Commodity contracts | ||
Assets: | ||
Assets | 38,922 | |
Liabilities: | ||
Liabilities | 5,439 | |
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets: | ||
Marketable Securities | 0 | |
Total assets | 0 | 0 |
Liabilities: | ||
Contingent consideration | 0 | 0 |
Forward Contract | 0 | |
Deferred compensation | 0 | 0 |
Total liabilities | 0 | 0 |
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Foreign exchange contracts | ||
Assets: | ||
Assets | 0 | 0 |
Liabilities: | ||
Liabilities | 0 | 0 |
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Interest Rate Swap [Member] | ||
Liabilities: | ||
Liabilities | 0 | |
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Commodity contracts | ||
Assets: | ||
Assets | 0 | |
Liabilities: | ||
Liabilities | 0 | |
Recurring basis | Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Marketable Securities | 179,125 | |
Total assets | 181,901 | 40,107 |
Liabilities: | ||
Contingent consideration | 0 | 0 |
Forward Contract | 0 | |
Deferred compensation | 25,397 | 25,244 |
Total liabilities | 34,833 | 33,135 |
Recurring basis | Significant Other Observable Inputs (Level 2) | Foreign exchange contracts | ||
Assets: | ||
Assets | 2,776 | 1,185 |
Liabilities: | ||
Liabilities | 4,351 | 2,452 |
Recurring basis | Significant Other Observable Inputs (Level 2) | Commodity contracts | ||
Assets: | ||
Assets | 38,922 | |
Liabilities: | ||
Liabilities | 5,439 | |
Recurring basis | Significant Unobservable Inputs (Level 3) | ||
Assets: | ||
Marketable Securities | 0 | |
Total assets | 0 | 0 |
Liabilities: | ||
Contingent consideration | 7,086 | 8,154 |
Forward Contract | 15,272 | |
Deferred compensation | 0 | 0 |
Total liabilities | 7,086 | 23,426 |
Recurring basis | Significant Unobservable Inputs (Level 3) | Foreign exchange contracts | ||
Assets: | ||
Assets | 0 | 0 |
Liabilities: | ||
Liabilities | 0 | 0 |
Recurring basis | Significant Unobservable Inputs (Level 3) | Interest Rate Swap [Member] | ||
Liabilities: | ||
Liabilities | $ 0 | |
Recurring basis | Significant Unobservable Inputs (Level 3) | Commodity contracts | ||
Assets: | ||
Assets | 0 | |
Liabilities: | ||
Liabilities | $ 0 |
FAIR VALUE (Textual) (Details)
FAIR VALUE (Textual) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Assets and liabilities measured at fair value on a recurring basis | ||
Contingent consideration | $ 7,086 | |
Business Combination Arrangement Remaining Interest Period | 3 years | |
Other Assets, Current | $ 123,836 | $ 96,213 |
Other Liabilities, Current | 119,655 | 97,806 |
Fair Value, Measurements, Recurring [Member] | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Contingent consideration | $ 7,086 | 8,154 |
Forward Contract | $ 15,272 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Inventory [Line Items] | ||
Raw materials | $ 97,577 | $ 76,811 |
Work-in-process | 50,695 | 40,556 |
Finished goods | 200,395 | 138,039 |
Inventory, Net | $ 348,667 | $ 255,406 |
Percentage of total inventories valued using the LIFO method (as a percent) | 32.00% | 40.00% |
Excess of current cost over LIFO cost | $ 68,641 | $ 61,329 |
LEASES (Details)
LEASES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Total future minimum lease payments for noncancelable operating leases | |||
2,018 | $ 19,205 | ||
2,019 | 13,358 | ||
2,020 | 8,972 | ||
2,021 | 5,252 | ||
2,022 | 4,892 | ||
Thereafter | 5,629 | ||
Rental expense | $ 20,450 | $ 16,897 | $ 16,703 |
PRODUCT WARRANTY COSTS (Details
PRODUCT WARRANTY COSTS (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Changes in the carrying amount of product warranty accruals | ||||
Balance at beginning of year | $ 21,053 | $ 19,469 | $ 15,579 | |
Accruals for warranties | 9,901 | 13,058 | 19,824 | |
Settlements | (11,500) | (11,434) | (15,458) | |
Standard And Extended Product Warranty Accrual Foreign Currency Translation Gain (Loss) and Other Adjustments | [1] | 2,575 | (40) | (476) |
Balance at end of year | 22,029 | $ 21,053 | $ 19,469 | |
Air Liquide Welding [Member] | ||||
Changes in the carrying amount of product warranty accruals | ||||
Product Warranty Accrual Additions From Business Acquisition | $ 2,299 | |||
[1] | At December 31, 2017, Foreign currency translation and other adjustments includes $2,299 in an acquired liability related to the Air Liquide Welding acquisition as discussed in Note 3 to the consolidated financial statements. |
QUARTERLY FINANCIAL DATA (UNA99
QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |||||||||||||
Quarterly financial data (unaudited) | |||||||||||||||||||||||
Acquisition Transaction and Integration Costs | $ 3,616 | $ 3,273 | $ 4,498 | $ 3,615 | $ 15,002 | ||||||||||||||||||
Business Combination, Bargain Purchase, Gain Recognized, Amount | (1,935) | 51,585 | 49,650 | $ 0 | $ 0 | ||||||||||||||||||
Deconsolidation, Gain (Loss), Amount | $ (34,348) | 0 | (34,348) | 0 | |||||||||||||||||||
DeconsolidationGainOrLossAmountNet | (33,251) | (33,251) | |||||||||||||||||||||
IncomeTaxSpecialItemChargeGain | (7,196) | ||||||||||||||||||||||
Net sales | 747,185 | 669,491 | 626,858 | 580,897 | $ 563,828 | $ 567,646 | 592,418 | $ 550,772 | 2,624,431 | 2,274,614 | 2,535,791 | ||||||||||||
Gross profit | 239,466 | 219,516 | 217,488 | 203,856 | 197,457 | 199,812 | 202,927 | 189,102 | 880,326 | 789,298 | 841,144 | ||||||||||||
Income before income taxes | 73,728 | [1] | 130,642 | [2] | 83,966 | [3] | 77,900 | [4] | 78,152 | [1] | 80,296 | [2] | 45,758 | [3] | 73,182 | [4] | 366,236 | 277,388 | 169,787 | ||||
Net income | $ 24,181 | [1] | $ 106,126 | [2] | $ 61,352 | [3] | $ 55,844 | [4] | $ 53,395 | [1] | $ 60,049 | [2] | $ 31,317 | [3] | $ 53,638 | [4] | $ 247,503 | $ 198,399 | $ 127,478 | ||||
Basic earnings per share (in dollars per share) | $ 0.37 | [5] | $ 1.61 | [5] | $ 0.93 | [5] | $ 0.85 | [5] | $ 0.81 | [5] | $ 0.90 | [5] | $ 0.46 | [5] | $ 0.77 | [5] | $ 3.76 | $ 2.94 | $ 1.72 | ||||
Diluted earnings per share (in dollars per share) | $ 0.36 | [5] | $ 1.59 | [5] | $ 0.92 | [5] | $ 0.84 | [5] | $ 0.81 | [5] | $ 0.89 | [5] | $ 0.45 | [5] | $ 0.76 | [5] | $ 3.71 | $ 2.91 | $ 1.70 | ||||
Rationalization and asset impairment net gains (charges) | $ (6,590) | $ (6,590) | $ 0 | $ (19,958) | |||||||||||||||||||
Rationalization and asset impairment net gains (charges), after-tax | (6,198) | ||||||||||||||||||||||
Income Tax Expense Benefit Net Resulting from Tax Reform Act | 28,616 | 28,616 | 0 | 0 | |||||||||||||||||||
Goodwill, Impairment Loss | [6] | 1,091 | |||||||||||||||||||||
Foreign Currency Transaction Loss, before Tax | 4,334 | ||||||||||||||||||||||
Acquisition Transaction and Integration Costs Net of Tax | 3,102 | $ 2,229 | $ 3,494 | $ 2,734 | |||||||||||||||||||
Asset Impairment Charges | 1,441 | ||||||||||||||||||||||
Defined Benefit Plan, Recognized Net Gain (Loss) Due to Settlements and Curtailments | (2,867) | (5,283) | (8,252) | [7] | 1,062 | [7] | (142,738) | [7] | |||||||||||||||
Defined Benefit Plan Recognized Net Gain (Loss) Due To Settlements Net Of Tax | (1,770) | (3,260) | |||||||||||||||||||||
Business Combination, Inventory Step Up | 2,264 | 2,314 | 4,578 | ||||||||||||||||||||
Business Combination, Inventory Step Up Net of Tax | $ 1,708 | $ 1,745 | |||||||||||||||||||||
Inventory Write-down | 22,880 | ||||||||||||||||||||||
International Welding [Member] | |||||||||||||||||||||||
Quarterly financial data (unaudited) | |||||||||||||||||||||||
Net sales | 724,024 | 507,289 | 530,460 | ||||||||||||||||||||
Americas Welding [Member] | |||||||||||||||||||||||
Quarterly financial data (unaudited) | |||||||||||||||||||||||
Net sales | 1,609,779 | $ 1,494,982 | $ 1,741,350 | ||||||||||||||||||||
Goodwill, Impairment Loss | [6] | $ 1,091 | |||||||||||||||||||||
[1] | 2017 includes special item charges of $2,867 ($1,770 after-tax) for pension settlement charges, $6,590 ($6,198 after-tax) for rationalization and asset impairment charges, $28,616 for the net impact of the U.S. Tax Act and acquisition-related items including $2,264 ($1,708 after-tax) in amortization of step up in value of acquired inventories, $3,616 ($3,102 after-tax) for acquisition transaction and integration costs and a $1,935 adjustment to the bargain purchase gain. | ||||||||||||||||||||||
[2] | 2017 includes special item charges of $5,283 ($3,260 after-tax) for pension settlement charges and acquisition-related items including $2,314 ($1,745 after-tax) in amortization of step up in value of acquired inventories, $3,273 ($2,229 after-tax) for acquisition transaction and integration costs and a $51,585 bargain purchase gain. | ||||||||||||||||||||||
[3] | 2017 includes special item charges of $4,498 ($3,494 after-tax) related to acquisition transaction and integration costs.2016 includes special item charges of $34,348 ($33,251 after-tax) primarily related to the loss on deconsolidation of Venezuelan subsidiary and a tax benefit of $7,196 related to the reversal of an income tax valuation allowance as a result of a legal entity change to realign the Company's tax structure. | ||||||||||||||||||||||
[4] | 2017 includes special item charges of $3,615 ($2,734 after-tax) related to acquisition transaction costs. | ||||||||||||||||||||||
[5] | The quarterly earnings per share ("EPS") amounts are each calculated independently. Therefore, the sum of the quarterly EPS amounts may not equal the annual totals. | ||||||||||||||||||||||
[6] | The Company performed an interim goodwill impairment test, using a combination of income and market valuation approaches, resulting in a non-cash impairment charge to the carrying value of goodwill. The impairment charge is recorded within Rationalization and asset impairment charges in the accompanying Consolidated Statements of Income. | ||||||||||||||||||||||
[7] | Pension settlement charges for the year ended December 31, 2017 resulting from lump sum pension payments. For the year ended December 31, 2015, the Company recorded pension settlement charges of $142,738, primarily related to the purchase of the group annuity contract. |
SCHEDULE II - VALUATION AND 100
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Allowance for doubtful accounts | ||||
Changes in valuation and qualifying accounts | ||||
Balance at Beginning of Period | $ 7,768 | $ 7,299 | $ 7,858 | |
Additions: Charged to Costs and Expenses | 1,172 | 1,657 | 1,969 | |
Additions: Charged to Other Accounts | [1] | 9,501 | 72 | (1,046) |
Deductions | [2] | 2,498 | 1,260 | 1,482 |
Balance at End of Period | 15,943 | 7,768 | 7,299 | |
Valuation Allowance of Deferred Tax Assets [Member] | ||||
Changes in valuation and qualifying accounts | ||||
Balance at Beginning of Period | 47,849 | 51,294 | 48,840 | |
Additions: Charged to Costs and Expenses | 16,222 | 3,704 | 7,533 | |
Additions: Charged to Other Accounts | [1] | 4,854 | 3,923 | (521) |
Deductions | [2] | (231) | (11,072) | (4,558) |
Balance at End of Period | $ 68,694 | $ 47,849 | $ 51,294 | |
[1] | Currency translation adjustment, additions from acquisitions and other adjustments. | |||
[2] | For the Allowance for doubtful accounts, deductions relate to uncollectible accounts written-off, net of recoveries. For the Deferred tax asset valuation allowance, deductions relate to the reversal of valuation allowances due to the realization of net operating loss carryforwards. |