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For the fiscal year ended December 31, 2013
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Commission file number 0-1402
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Ohio
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34-1860551
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer Identification No.)
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22801 St. Clair Avenue, Cleveland, Ohio
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44117
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(Address of principal executive offices)
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(Zip Code)
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(216) 481-8100
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(Registrant's telephone number, including area code)
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Common Shares, without par value
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The NASDAQ Stock Market LLC
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(Title of each class)
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(Name of each exchange on which registered)
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þ
Large accelerated filer
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¨
Accelerated filer
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¨
Non-accelerated filer
(Do not check if a smaller reporting company)
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¨
Smaller reporting company
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•
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general metal fabrication,
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•
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power generation and process industry,
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•
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structural steel construction (buildings and bridges),
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•
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heavy equipment fabrication (farming, mining and rail),
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•
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shipbuilding,
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•
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automotive,
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•
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pipe mills and pipelines, and
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•
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offshore oil and gas exploration and extraction.
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Name
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Age
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Position
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Christopher L. Mapes
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52
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Chairman of the Board effective December 21, 2013. President and Chief Executive Officer effective December 31, 2012; Chief Operating Officer from September 1, 2011 to December 31, 2012; Director since February 2010. Prior to his service with the Company, Mr. Mapes was an Executive Vice President of A.O. Smith Corporation (a global manufacturer with a water heating and water treatment technologies business) a position he held from 2004 through August 2011, and the President of its former Electrical Products unit, a position he held from September 2004 through August 2011.
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Vincent K. Petrella
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53
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Senior Vice President, Chief Financial Officer and Treasurer since October 7, 2005.
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Frederick G. Stueber
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60
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Senior Vice President, General Counsel and Secretary since 1996.
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George D. Blankenship
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51
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Senior Vice President; President, Lincoln Electric North America since July 30, 2009; Senior Vice President, Global Engineering from October 7, 2005 to July 30, 2009; Senior Vice President; President, Lincoln Cleveland of The Lincoln Electric Company from January 8, 2008 to July 30, 2009; Senior Vice President, U.S. Operations of The Lincoln Electric Company from October 7, 2005 to January 8, 2008.
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Gabriel Bruno
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46
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Vice President, Chief Information Officer since May 1, 2012; Vice President, Corporate Controller from 2005 to May 1, 2012.
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Gretchen A. Farrell
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51
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Senior Vice President, Human Resources and Compliance since July 30, 2009; Vice President, Human Resources from May 5, 2005 to July 30, 2009.
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Thomas A. Flohn
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53
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Vice President, Regional President, Lincoln Electric Asia Pacific Region since November 4, 2013. Vice President; President, Lincoln Electric Europe, Middle East & Africa (EMEA) from July 1, 2010 to November 4, 2013; Vice President; President, Lincoln Asia Pacific from January 1, 2005 to June 30, 2010.
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Mathias Hallmann
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51
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Vice President; President, Lincoln Electric Europe since November 4, 2013. Prior to his service with the Company, Mr. Hallmann was Chief Executive Officer of Bohler Welding Holding GmbH (a leading manufacturer and provider of auxiliary materials and consumables for industrial welding and soldering applications) from December 2008 to March 2012, and its Chief Operating Officer from April 2008 to November 2008.
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Steven B. Hedlund
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47
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Vice President, Strategy and Business Development since September 15, 2008. Prior to his service with the Company, Mr. Hedlund was the Vice President, Growth and Innovations with Master Lock, LLC (a security products company) from June 1, 2005 to July 1, 2008.
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David J. Nangle
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57
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Vice President, Group President of Brazing, Cutting and Retail Subsidiaries since January 12, 2006.
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North America Welding:
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United States
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Cleveland and Fort Loramie, Ohio; San Diego and Anaheim, California; Reno, Nevada; Baltimore, Maryland; Ladson, South Carolina; Chattanooga, Tennessee.
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Canada
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Toronto; Mississauga; Hamilton.
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Mexico
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Mexico City; Torreon.
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Europe Welding:
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France
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Grand-Quevilly.
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Germany
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Essen.
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Italy
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Genoa; Corsalone.
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Netherlands
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Nijmegen.
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Poland
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Bielawa; Dzierzoniow.
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Portugal
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Lisbon.
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Russia
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Mtsensk.
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Turkey
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Istanbul.
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United Kingdom
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Sheffield and Chertsey, England.
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Asia Pacific Welding:
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China
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Shanghai; Jinzhou; Nanjing; Zhengzhou; Luan County.
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India
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Chennai.
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Indonesia
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Cikarang.
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South America Welding:
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Brazil
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Sao Paulo.
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Colombia
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Bogota.
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Venezuela
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Maracay.
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The Harris Products Group:
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United States
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Mason, Ohio; Gainesville, Georgia; Santa Fe Springs, California.
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Brazil
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Guarulhos.
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Mexico
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Tijuana.
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Poland
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Dzierzoniow.
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2013
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2012
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||||||||||||||||||||
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Stock Price
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|
Dividends
Declared
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Stock Price
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Dividends
Declared
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||||||||||||||||
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High
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Low
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High
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Low
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||||||||||||||
First quarter
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$
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57.63
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$
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49.06
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$
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0.20
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$
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47.87
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$
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38.96
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$
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0.17
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Second quarter
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60.58
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|
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49.94
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0.20
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50.36
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41.42
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|
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0.17
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||||||
Third quarter
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69.35
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56.75
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0.20
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46.11
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37.83
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0.17
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||||||
Fourth quarter
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74.57
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65.45
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0.23
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49.00
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37.63
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0.20
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Period
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Total Number of
Shares Repurchased
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Average Price
Paid Per Share
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Total Number of
Shares Repurchased
as Part of Publicly
Announced Plans or
Programs
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Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs
(2)
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|||||
October 1-31, 2013
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162,100
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$
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67.84
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162,100
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16,257,131
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November 1-30, 2013
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270,847
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71.26
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270,847
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15,986,284
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December 1-31, 2013
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334,584
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|
(1)
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71.56
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315,525
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15,670,759
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Total
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767,531
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70.67
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748,472
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(1)
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The above share repurchases include the surrender of
19,059
shares of the Company's common shares in connection with the vesting of restricted shares granted pursuant to the Company's 2006 Equity and Performance Incentive Plan.
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(2)
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On July 26, 2013, the Company announced a new share repurchase program, which increased the total number the Company’s common shares authorized to be repurchased to
45 million
shares of the Company's common stock. Total shares purchased through the share repurchase program were
29,329,241
shares at a cost of
$594.9 million
for a weighted average cost of
$20.28
per share through
December 31, 2013
.
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Year Ended December 31,
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||||||||||||||||||
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2013
(1)
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2012
(2)
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2011
(3)
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2010
(4)
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2009
(5)
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||||||||||
Net sales
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$
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2,852,671
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$
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2,853,367
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$
|
2,694,609
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$
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2,070,172
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$
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1,729,285
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Net income
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|
293,780
|
|
|
257,411
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|
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217,186
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130,244
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48,576
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|||||
Basic earnings per share
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3.58
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3.10
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2.60
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1.54
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|
|
0.57
|
|
|||||
Diluted earnings per share
|
|
3.54
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|
3.06
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|
2.56
|
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1.53
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|
|
0.57
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|
|||||
Cash dividends declared per share
|
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0.830
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0.710
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0.635
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|
0.575
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|
|
0.545
|
|
|||||
Total assets
|
|
2,151,867
|
|
|
2,089,863
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|
|
1,976,776
|
|
|
1,783,788
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|
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1,705,292
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|
|||||
Long-term debt
|
|
3,791
|
|
|
1,599
|
|
|
1,960
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|
|
84,627
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|
87,850
|
|
(1)
|
Results for 2013 include rationalization and asset impairment net charges of
$8,463
(
$7,573
after-tax) which include
$3,658
(
$2,965
after-tax) in rationalization charges and impairment charges net of gains on disposals of
$4,805
(
$4,608
after-tax). Results also include a charge of
$12,198
(
$12,198
after-tax) related to the devaluation of the Venezuelan currency and a loss of
$705
(
$705
after-tax) related to a loss on the sale of land. Associated with the impairment of long-lived assets and loss on the sale of land is an offsetting special item of
$1,068
representing portions attributable to non-controlling interests.
|
(2)
|
Results for 2012 include rationalization and asset impairment net charges of $9,354 ($7,442 after-tax) which include $7,512 ($6,153 after-tax) in rationalization charges and asset disposal and impairment charges of $1,842 ($1,289 after-tax). Results also include a charge of $1,381 ($906 after-tax) related to the change in Venezuelan labor law, which provides for increased employee severance obligations.
|
(3)
|
Results for 2011 include rationalization and asset impairment net charges of $282 ($237 after-tax) resulting from rationalization activities primarily initiated in 2009 and a gain of $4,844 related to a favorable adjustment for tax audit settlements.
|
(4)
|
Results for 2010 include rationalization and asset impairment net gains of $384 ($894 after-tax) which include net gains of $3,684 ($3,725 after-tax) related to the sale of property and asset disposals, impairment charges of $883 ($801 after-tax) and $2,417 ($2,030 after-tax) in rationalization charges. Results also include a net charge of $3,123 ($3,560 after-tax) related to the change in functional currency and devaluation of the Venezuelan currency, income of $5,092 was recognized due to an adjustment in tax liabilities for a change in applicable tax regulations, a gain of $108 after-tax in non-controlling interests related to the impairment of assets for a majority-owned consolidated subsidiary and a charge of $1,890 after-tax in non-controlling interests related to gains on the disposal of assets in a majority-owned consolidated subsidiary.
|
(5)
|
Results for 2009 include rationalization and asset impairment net charges of $29,897 ($23,789 after-tax). The net charges include rationalization charges of $26,957 ($21,529 after-tax) and impairment charges of $2,940 ($2,260 after-tax) for certain indefinite-lived intangible assets. Results also include a loss of $7,943 ($7,943 after-tax) associated with the acquisition of a business in China and the related disposal of an interest in Taiwan, a pension settlement gain of $2,144 ($2,144 after-tax), a charge of $601 after-tax in non-controlling interests associated with the pension settlement gain for a majority-owned consolidated subsidiary and a gain on the sale of a property by the Company's joint venture in Turkey of $5,667 ($5,667 after-tax).
|
•
|
general metal fabrication,
|
•
|
power generation and process industry,
|
•
|
structural steel construction (buildings and bridges),
|
•
|
heavy equipment fabrication (farming, mining and rail),
|
•
|
shipbuilding,
|
•
|
automotive,
|
•
|
pipe mills and pipelines, and
|
•
|
offshore oil and gas exploration and extraction.
|
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
|
2013
|
|
2012
|
|
2011
|
|||||||||||||||
|
|
Amount
|
|
% of Sales
|
|
Amount
|
|
% of Sales
|
|
Amount
|
|
% of Sales
|
|||||||||
Net sales
|
|
$
|
2,852,671
|
|
|
100.0
|
%
|
|
$
|
2,853,367
|
|
|
100.0
|
%
|
|
$
|
2,694,609
|
|
|
100.0
|
%
|
Cost of goods sold
|
|
1,910,017
|
|
|
67.0
|
%
|
|
1,986,711
|
|
|
69.6
|
%
|
|
1,957,872
|
|
|
72.7
|
%
|
|||
Gross profit
|
|
942,654
|
|
|
33.0
|
%
|
|
866,656
|
|
|
30.4
|
%
|
|
736,737
|
|
|
27.3
|
%
|
|||
Selling, general & administrative
expenses
|
|
527,206
|
|
|
18.5
|
%
|
|
495,221
|
|
|
17.4
|
%
|
|
439,775
|
|
|
16.3
|
%
|
|||
Rationalization and asset impairment
charges
|
|
8,463
|
|
|
0.3
|
%
|
|
9,354
|
|
|
0.3
|
%
|
|
282
|
|
|
—
|
|
|||
Operating income
|
|
406,985
|
|
|
14.3
|
%
|
|
362,081
|
|
|
12.7
|
%
|
|
296,680
|
|
|
11.0
|
%
|
|||
Interest income
|
|
3,320
|
|
|
0.1
|
%
|
|
3,988
|
|
|
0.1
|
%
|
|
3,121
|
|
|
0.1
|
%
|
|||
Equity earnings in affiliates
|
|
4,806
|
|
|
0.2
|
%
|
|
5,007
|
|
|
0.2
|
%
|
|
5,385
|
|
|
0.2
|
%
|
|||
Other income
|
|
4,194
|
|
|
0.1
|
%
|
|
2,685
|
|
|
0.1
|
%
|
|
2,849
|
|
|
0.1
|
%
|
|||
Interest expense
|
|
(2,864
|
)
|
|
(0.1
|
%)
|
|
(4,191
|
)
|
|
(0.1
|
%)
|
|
(6,704
|
)
|
|
(0.2
|
%)
|
|||
Income before income taxes
|
|
416,441
|
|
|
14.6
|
%
|
|
369,570
|
|
|
13.0
|
%
|
|
301,331
|
|
|
11.2
|
%
|
|||
Income taxes
|
|
124,754
|
|
|
4.4
|
%
|
|
112,354
|
|
|
3.9
|
%
|
|
84,318
|
|
|
3.1
|
%
|
|||
Net income including non-controlling
interests
|
|
291,687
|
|
|
10.2
|
%
|
|
257,216
|
|
|
9.0
|
%
|
|
217,013
|
|
|
8.1
|
%
|
|||
Non-controlling interests in
subsidiaries' loss
|
|
(2,093
|
)
|
|
(0.1
|
%)
|
|
(195
|
)
|
|
—
|
|
|
(173
|
)
|
|
—
|
|
|||
Net income
|
|
$
|
293,780
|
|
|
10.3
|
%
|
|
$
|
257,411
|
|
|
9.0
|
%
|
|
$
|
217,186
|
|
|
8.1
|
%
|
|
|
|
|
Change in Net Sales due to:
|
|
|
||||||||||||||||||
|
|
Net Sales
2012
|
|
Volume
|
|
Acquisitions
|
|
Price
|
|
Foreign Exchange
|
|
Net Sales
2013
|
||||||||||||
Operating Segments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
North America Welding
|
|
$
|
1,580,818
|
|
|
$
|
(22,962
|
)
|
|
$
|
91,442
|
|
|
$
|
7,785
|
|
|
$
|
(4,314
|
)
|
|
$
|
1,652,769
|
|
Europe Welding
|
|
452,227
|
|
|
(18,518
|
)
|
|
—
|
|
|
(5,696
|
)
|
|
1,535
|
|
|
429,548
|
|
||||||
Asia Pacific Welding
|
|
324,482
|
|
|
(48,964
|
)
|
|
—
|
|
|
(4,947
|
)
|
|
(4,289
|
)
|
|
266,282
|
|
||||||
South America Welding
|
|
161,483
|
|
|
13,269
|
|
|
—
|
|
|
29,730
|
|
|
(8,587
|
)
|
|
195,895
|
|
||||||
The Harris Products Group
|
|
334,357
|
|
|
1,276
|
|
|
—
|
|
|
(24,748
|
)
|
|
(2,708
|
)
|
|
308,177
|
|
||||||
Consolidated
|
|
$
|
2,853,367
|
|
|
$
|
(75,899
|
)
|
|
$
|
91,442
|
|
|
$
|
2,124
|
|
|
$
|
(18,363
|
)
|
|
$
|
2,852,671
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
North America Welding
|
|
|
|
|
(1.5
|
%)
|
|
5.8
|
%
|
|
0.5
|
%
|
|
(0.3
|
%)
|
|
4.6
|
%
|
||||||
Europe Welding
|
|
|
|
|
(4.1
|
%)
|
|
—
|
|
|
(1.3
|
%)
|
|
0.3
|
%
|
|
(5.0
|
%)
|
||||||
Asia Pacific Welding
|
|
|
|
|
(15.1
|
%)
|
|
—
|
|
|
(1.5
|
%)
|
|
(1.3
|
%)
|
|
(17.9
|
%)
|
||||||
South America Welding
|
|
|
|
|
8.2
|
%
|
|
—
|
|
|
18.4
|
%
|
|
(5.3
|
%)
|
|
21.3
|
%
|
||||||
The Harris Products Group
|
|
|
|
|
0.4
|
%
|
|
—
|
|
|
(7.4
|
%)
|
|
(0.8
|
%)
|
|
(7.8
|
%)
|
||||||
Consolidated
|
|
|
|
|
(2.7
|
%)
|
|
3.2
|
%
|
|
0.1
|
%
|
|
(0.6
|
%)
|
|
—
|
|
|
|
Twelve Months Ended
|
|
|
|
|
||||||||
|
|
December 31,
|
|
|
|
|
||||||||
|
|
2013
|
|
2012
|
|
$ Change
|
|
% Change
|
||||||
North America Welding:
|
|
|
|
|
|
|
|
|
||||||
Net sales
|
|
$
|
1,652,769
|
|
|
$
|
1,580,818
|
|
|
71,951
|
|
|
4.6
|
%
|
Inter-segment sales
|
|
127,254
|
|
|
131,062
|
|
|
(3,808
|
)
|
|
(2.9
|
%)
|
||
Total Sales
|
|
$
|
1,780,023
|
|
|
$
|
1,711,880
|
|
|
68,143
|
|
|
4.0
|
%
|
|
|
|
|
|
|
|
|
|
||||||
EBIT, as adjusted
|
|
$
|
318,507
|
|
|
$
|
293,070
|
|
|
25,437
|
|
|
8.7
|
%
|
As a percent of total sales
|
|
17.9
|
%
|
|
17.1
|
%
|
|
|
|
0.8
|
%
|
|||
|
|
|
|
|
|
|
|
|
||||||
Europe Welding:
|
|
|
|
|
|
|
|
|
||||||
Net sales
|
|
$
|
429,548
|
|
|
$
|
452,227
|
|
|
(22,679
|
)
|
|
(5.0
|
%)
|
Inter-segment sales
|
|
19,911
|
|
|
16,048
|
|
|
3,863
|
|
|
24.1
|
%
|
||
Total Sales
|
|
$
|
449,459
|
|
|
$
|
468,275
|
|
|
(18,816
|
)
|
|
(4.0
|
%)
|
|
|
|
|
|
|
|
|
|
||||||
EBIT, as adjusted
|
|
$
|
36,247
|
|
|
$
|
37,299
|
|
|
(1,052
|
)
|
|
(2.8
|
%)
|
As a percent of total sales
|
|
8.1
|
%
|
|
8.0
|
%
|
|
|
|
0.1
|
%
|
|||
|
|
|
|
|
|
|
|
|
||||||
Asia Pacific Welding:
|
|
|
|
|
|
|
|
|
||||||
Net sales
|
|
$
|
266,282
|
|
|
$
|
324,482
|
|
|
(58,200
|
)
|
|
(17.9
|
%)
|
Inter-segment sales
|
|
14,906
|
|
|
14,829
|
|
|
77
|
|
|
0.5
|
%
|
||
Total Sales
|
|
$
|
281,188
|
|
|
$
|
339,311
|
|
|
(58,123
|
)
|
|
(17.1
|
%)
|
|
|
|
|
|
|
|
|
|
||||||
EBIT, as adjusted
|
|
$
|
1,815
|
|
|
$
|
7,247
|
|
|
(5,432
|
)
|
|
(75.0
|
%)
|
As a percent of total sales
|
|
0.6
|
%
|
|
2.1
|
%
|
|
|
|
(1.5
|
%)
|
|||
|
|
|
|
|
|
|
|
|
||||||
South America Welding:
|
|
|
|
|
|
|
|
|
||||||
Net sales
|
|
$
|
195,895
|
|
|
$
|
161,483
|
|
|
34,412
|
|
|
21.3
|
%
|
Inter-segment sales
|
|
233
|
|
|
38
|
|
|
195
|
|
|
513.2
|
%
|
||
Total Sales
|
|
$
|
196,128
|
|
|
$
|
161,521
|
|
|
34,607
|
|
|
21.4
|
%
|
|
|
|
|
|
|
|
|
|
||||||
EBIT, as adjusted
|
|
$
|
57,306
|
|
|
$
|
18,301
|
|
|
39,005
|
|
|
213.1
|
%
|
As a percent of total sales
|
|
29.2
|
%
|
|
11.3
|
%
|
|
|
|
17.9
|
%
|
|||
|
|
|
|
|
|
|
|
|
||||||
The Harris Products Group:
|
|
|
|
|
|
|
|
|
||||||
Net sales
|
|
$
|
308,177
|
|
|
$
|
334,357
|
|
|
(26,180
|
)
|
|
(7.8
|
%)
|
Inter-segment sales
|
|
9,605
|
|
|
8,549
|
|
|
1,056
|
|
|
12.4
|
%
|
||
Total Sales
|
|
$
|
317,782
|
|
|
$
|
342,906
|
|
|
(25,124
|
)
|
|
(7.3
|
%)
|
|
|
|
|
|
|
|
|
|
||||||
EBIT, as adjusted
|
|
$
|
27,826
|
|
|
$
|
29,477
|
|
|
(1,651
|
)
|
|
(5.6
|
%)
|
As a percent of total sales
|
|
8.8
|
%
|
|
8.6
|
%
|
|
|
|
0.2
|
%
|
|
|
|
|
Change in Net Sales due to:
|
|
|
||||||||||||||||||
|
|
Net Sales
2011
|
|
Volume
|
|
Acquisitions
|
|
Price
|
|
Foreign
Exchange
|
|
Net Sales
2012
|
||||||||||||
Operating Segments
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
North America Welding
|
|
$
|
1,309,499
|
|
|
$
|
112,898
|
|
|
$
|
124,830
|
|
|
$
|
37,124
|
|
|
$
|
(3,533
|
)
|
|
$
|
1,580,818
|
|
Europe Welding
|
|
508,692
|
|
|
(36,199
|
)
|
|
8,322
|
|
|
4,874
|
|
|
(33,462
|
)
|
|
452,227
|
|
||||||
Asia Pacific Welding
|
|
376,276
|
|
|
(54,289
|
)
|
|
—
|
|
|
1,646
|
|
|
849
|
|
|
324,482
|
|
||||||
South America Welding
|
|
156,684
|
|
|
(1,284
|
)
|
|
—
|
|
|
15,584
|
|
|
(9,501
|
)
|
|
161,483
|
|
||||||
The Harris Products Group
|
|
343,458
|
|
|
13,683
|
|
|
—
|
|
|
(13,427
|
)
|
|
(9,357
|
)
|
|
334,357
|
|
||||||
Consolidated
|
|
$
|
2,694,609
|
|
|
$
|
34,809
|
|
|
$
|
133,152
|
|
|
$
|
45,801
|
|
|
$
|
(55,004
|
)
|
|
$
|
2,853,367
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
North America Welding
|
|
|
|
|
8.6
|
%
|
|
9.5
|
%
|
|
2.8
|
%
|
|
(0.3
|
%)
|
|
20.7
|
%
|
||||||
Europe Welding
|
|
|
|
|
(7.1
|
%)
|
|
1.6
|
%
|
|
1.0
|
%
|
|
(6.6
|
%)
|
|
(11.1
|
%)
|
||||||
Asia Pacific Welding
|
|
|
|
|
(14.4
|
%)
|
|
—
|
|
|
0.4
|
%
|
|
0.2
|
%
|
|
(13.8
|
%)
|
||||||
South America Welding
|
|
|
|
|
(0.8
|
%)
|
|
—
|
|
|
9.9
|
%
|
|
(6.1
|
%)
|
|
3.1
|
%
|
||||||
The Harris Products Group
|
|
|
|
|
4.0
|
%
|
|
—
|
|
|
(3.9
|
%)
|
|
(2.7
|
%)
|
|
(2.6
|
%)
|
||||||
Consolidated
|
|
|
|
|
1.3
|
%
|
|
4.9
|
%
|
|
1.7
|
%
|
|
(2.0
|
%)
|
|
5.9
|
%
|
|
|
Twelve Months Ended
|
|
|
|
|
||||||||
|
|
December 31,
|
|
|
|
|
||||||||
|
|
2012
|
|
2011
|
|
$ Change
|
|
% Change
|
||||||
North America Welding:
|
|
|
|
|
|
|
|
|
||||||
Net sales
|
|
$
|
1,580,818
|
|
|
$
|
1,309,499
|
|
|
271,319
|
|
|
20.7
|
%
|
Inter-segment sales
|
|
131,062
|
|
|
136,314
|
|
|
(5,252
|
)
|
|
(3.9
|
%)
|
||
Total Sales
|
|
$
|
1,711,880
|
|
|
$
|
1,445,813
|
|
|
266,067
|
|
|
18.4
|
%
|
|
|
|
|
|
|
|
|
|
||||||
EBIT, as adjusted
|
|
$
|
293,070
|
|
|
$
|
227,924
|
|
|
65,146
|
|
|
28.6
|
%
|
As a percent of total sales
|
|
17.1
|
%
|
|
15.8
|
%
|
|
|
|
1.3
|
%
|
|||
|
|
|
|
|
|
|
|
|
||||||
Europe Welding:
|
|
|
|
|
|
|
|
|
||||||
Net sales
|
|
$
|
452,227
|
|
|
$
|
508,692
|
|
|
(56,465
|
)
|
|
(11.1
|
%)
|
Inter-segment sales
|
|
16,048
|
|
|
17,422
|
|
|
(1,374
|
)
|
|
(7.9
|
%)
|
||
Total Sales
|
|
$
|
468,275
|
|
|
$
|
526,114
|
|
|
(57,839
|
)
|
|
(11.0
|
%)
|
|
|
|
|
|
|
|
|
|
||||||
EBIT, as adjusted
|
|
$
|
37,299
|
|
|
$
|
36,171
|
|
|
1,128
|
|
|
3.1
|
%
|
As a percent of total sales
|
|
8.0
|
%
|
|
6.9
|
%
|
|
|
|
1.1
|
%
|
|||
|
|
|
|
|
|
|
|
|
||||||
Asia Pacific Welding:
|
|
|
|
|
|
|
|
|
||||||
Net sales
|
|
$
|
324,482
|
|
|
$
|
376,276
|
|
|
(51,794
|
)
|
|
(13.8
|
%)
|
Inter-segment sales
|
|
14,829
|
|
|
15,614
|
|
|
(785
|
)
|
|
(5.0
|
%)
|
||
Total Sales
|
|
$
|
339,311
|
|
|
$
|
391,890
|
|
|
(52,579
|
)
|
|
(13.4
|
%)
|
|
|
|
|
|
|
|
|
|
||||||
EBIT, as adjusted
|
|
$
|
7,247
|
|
|
$
|
2,629
|
|
|
4,618
|
|
|
175.7
|
%
|
As a percent of total sales
|
|
2.1
|
%
|
|
0.7
|
%
|
|
|
|
1.4
|
%
|
|||
|
|
|
|
|
|
|
|
|
||||||
South America Welding:
|
|
|
|
|
|
|
|
|
||||||
Net sales
|
|
$
|
161,483
|
|
|
$
|
156,684
|
|
|
4,799
|
|
|
3.1
|
%
|
Inter-segment sales
|
|
38
|
|
|
494
|
|
|
(456
|
)
|
|
(92.3
|
%)
|
||
Total Sales
|
|
$
|
161,521
|
|
|
$
|
157,178
|
|
|
4,343
|
|
|
2.8
|
%
|
|
|
|
|
|
|
|
|
|
||||||
EBIT, as adjusted
|
|
$
|
18,301
|
|
|
$
|
12,895
|
|
|
5,406
|
|
|
41.9
|
%
|
As a percent of total sales
|
|
11.3
|
%
|
|
8.2
|
%
|
|
|
|
3.1
|
%
|
|||
|
|
|
|
|
|
|
|
|
||||||
The Harris Products Group:
|
|
|
|
|
|
|
|
|
||||||
Net sales
|
|
$
|
334,357
|
|
|
$
|
343,458
|
|
|
(9,101
|
)
|
|
(2.6
|
%)
|
Inter-segment sales
|
|
8,549
|
|
|
8,496
|
|
|
53
|
|
|
0.6
|
%
|
||
Total Sales
|
|
$
|
342,906
|
|
|
$
|
351,954
|
|
|
(9,048
|
)
|
|
(2.6
|
%)
|
|
|
|
|
|
|
|
|
|
||||||
EBIT, as adjusted
|
|
$
|
29,477
|
|
|
$
|
25,151
|
|
|
4,326
|
|
|
17.2
|
%
|
As a percent of total sales
|
|
8.6
|
%
|
|
7.1
|
%
|
|
|
|
1.5
|
%
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2013
|
|
2012
|
|
2011
|
||||||
Operating income as reported
|
|
$
|
406,985
|
|
|
$
|
362,081
|
|
|
$
|
296,680
|
|
Special items (pre-tax):
|
|
|
|
|
|
|
||||||
Rationalization and asset impairment charges
|
|
8,463
|
|
|
9,354
|
|
|
282
|
|
|||
Loss on the sale of land
|
|
705
|
|
|
—
|
|
|
—
|
|
|||
Venezuela currency devaluation
|
|
12,198
|
|
|
—
|
|
|
—
|
|
|||
Venezuela statutory severance obligation
|
|
—
|
|
|
1,381
|
|
|
—
|
|
|||
Adjusted operating income
|
|
$
|
428,351
|
|
|
$
|
372,816
|
|
|
$
|
296,962
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2013
|
|
2012
|
|
2011
|
||||||
Net income as reported
|
|
$
|
293,780
|
|
|
$
|
257,411
|
|
|
$
|
217,186
|
|
Special items (after-tax):
|
|
|
|
|
|
|
||||||
Rationalization and asset impairment charges
|
|
7,573
|
|
|
7,442
|
|
|
237
|
|
|||
Loss on the sale of land
|
|
705
|
|
|
—
|
|
|
—
|
|
|||
Venezuela currency devaluation
|
|
12,198
|
|
|
—
|
|
|
—
|
|
|||
Venezuela statutory severance obligation
|
|
—
|
|
|
906
|
|
|
—
|
|
|||
Adjustment for tax audit settlements
|
|
—
|
|
|
—
|
|
|
(4,844
|
)
|
|||
Non-controlling interests associated with special items
|
|
(1,068
|
)
|
|
—
|
|
|
—
|
|
|||
Adjusted net income
|
|
$
|
313,188
|
|
|
$
|
265,759
|
|
|
$
|
212,579
|
|
Diluted earnings per share as reported
|
|
$
|
3.54
|
|
|
$
|
3.06
|
|
|
$
|
2.56
|
|
Special items per share
|
|
0.23
|
|
|
0.10
|
|
|
(0.05
|
)
|
|||
Adjusted diluted earnings per share
|
|
$
|
3.77
|
|
|
$
|
3.16
|
|
|
$
|
2.51
|
|
|
|
Year Ended December 31,
|
|
$ Change
|
||||||||||||||||
|
|
2013
|
|
2012
|
|
2011
|
|
2013 vs. 2012
|
|
2012 vs. 2011
|
||||||||||
Cash provided by operating activities
|
|
$
|
338,894
|
|
|
$
|
327,484
|
|
|
$
|
193,518
|
|
|
$
|
11,410
|
|
|
$
|
133,966
|
|
Cash used by investing activities:
|
|
(129,500
|
)
|
|
(187,471
|
)
|
|
(130,796
|
)
|
|
57,971
|
|
|
(56,675
|
)
|
|||||
Capital expenditures
|
|
(76,015
|
)
|
|
(52,715
|
)
|
|
(65,813
|
)
|
|
(23,300
|
)
|
|
13,098
|
|
|||||
Acquisition of businesses, net of cash acquired
|
|
(53,161
|
)
|
|
(134,602
|
)
|
|
(66,229
|
)
|
|
81,441
|
|
|
(68,373
|
)
|
|||||
Proceeds from the sale of property, plant and equipment
|
|
1,393
|
|
|
1,387
|
|
|
1,246
|
|
|
6
|
|
|
141
|
|
|||||
Other investing activities
|
|
(1,717
|
)
|
|
(1,541
|
)
|
|
—
|
|
|
(176
|
)
|
|
(1,541
|
)
|
|||||
Cash used by financing activities:
|
|
(194,184
|
)
|
|
(216,838
|
)
|
|
(63,370
|
)
|
|
22,654
|
|
|
(153,468
|
)
|
|||||
(Payments) proceeds on short-term borrowings, net
|
|
(1,451
|
)
|
|
(4,533
|
)
|
|
8,981
|
|
|
3,082
|
|
|
(13,514
|
)
|
|||||
Payments on long-term borrowings, net
|
|
(389
|
)
|
|
(84,770
|
)
|
|
(1,032
|
)
|
|
84,381
|
|
|
(83,738
|
)
|
|||||
Proceeds from exercise of stock options
|
|
20,297
|
|
|
18,776
|
|
|
11,351
|
|
|
1,521
|
|
|
7,425
|
|
|||||
Excess tax benefit from stock-based compensation
|
|
10,602
|
|
|
7,819
|
|
|
2,916
|
|
|
2,783
|
|
|
4,903
|
|
|||||
Purchase of shares for treasury
|
|
(167,879
|
)
|
|
(81,018
|
)
|
|
(36,997
|
)
|
|
(86,861
|
)
|
|
(44,021
|
)
|
|||||
Cash dividends paid to shareholders
|
|
(49,277
|
)
|
|
(73,112
|
)
|
|
(51,935
|
)
|
|
23,835
|
|
|
(21,177
|
)
|
|||||
Transactions with non-controlling interests
|
|
(6,087
|
)
|
|
—
|
|
|
—
|
|
|
(6,087
|
)
|
|
—
|
|
|||||
Other financing activities
|
|
—
|
|
|
—
|
|
|
3,346
|
|
|
—
|
|
|
(3,346
|
)
|
|||||
Increase (decrease) in Cash and cash equivalents
|
|
13,361
|
|
|
(74,637
|
)
|
|
(5,092
|
)
|
|
|
|
|
|
|
|
|
Payments Due By Period
|
||||||||||||||||||
|
|
Total
|
|
2014
|
|
2015 to
2016 |
|
2017 to
2018 |
|
2019 and
Beyond |
||||||||||
Long-term debt, including current portion
|
|
$
|
2,722
|
|
|
$
|
644
|
|
|
$
|
854
|
|
|
$
|
450
|
|
|
$
|
774
|
|
Interest on long-term debt
|
|
311
|
|
|
107
|
|
|
104
|
|
|
54
|
|
|
46
|
|
|||||
Capital lease obligations
|
|
236
|
|
|
72
|
|
|
127
|
|
|
37
|
|
|
—
|
|
|||||
Short-term debt
|
|
14,581
|
|
|
14,581
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Interest on short-term debt
|
|
1,019
|
|
|
1,019
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Operating leases
|
|
48,170
|
|
|
13,263
|
|
|
18,631
|
|
|
9,708
|
|
|
6,568
|
|
|||||
Purchase commitments
(1)
|
|
164,232
|
|
|
160,987
|
|
|
2,983
|
|
|
175
|
|
|
87
|
|
|||||
Total
|
|
$
|
231,271
|
|
|
$
|
190,673
|
|
|
$
|
22,699
|
|
|
$
|
10,424
|
|
|
$
|
7,475
|
|
(1)
|
Purchase commitments include contractual obligations for raw materials and services.
|
Exhibit No.
|
|
Description
|
3.1
|
|
Amended and Restated Articles of Incorporation of Lincoln Electric Holdings, Inc. (filed as Exhibit 3.1 to Form 8-K of Lincoln Electric Holdings, Inc. filed on September 27, 2011, SEC file No. 0-1402 and incorporated herein by reference and made a part hereof).
|
3.2
|
|
Amended and Restated Code of Regulations of Lincoln Electric Holdings, Inc. (as Amended on November 3, 2009) (filed as Exhibit 3.2 to Form 10-Q of Lincoln Electric Holdings, Inc. for the three months ended September 30, 2009, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
|
10.1
|
|
Amended and Restated Credit Agreement, dated as of July 26, 2012, by and among Lincoln Electric Holdings, Inc., The Lincoln Electric Company, Lincoln Electric International Holding Company, J.W. Harris Co., Inc., Techalloy, Inc., Wayne Trail Technologies, Inc., Lincoln Global, Inc., the Lenders and KeyBank National Association, as Letter of Credit Issuer and Administrative Agent (filed as Exhibit 10.1 to Form 8-K of Lincoln Electric Holdings, Inc. filed on July 31, 2012, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
|
10.2*
|
|
1998 Stock Plan (Amended, Restated and Renamed as of May 1, 2003) (filed as Appendix B to the Lincoln Electric Holdings, Inc. proxy statement dated March 31, 2003, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
|
10.3*
|
|
Amendment No. 1 to the 1998 Stock Plan (Amended, Restated and Renamed Effective May 1, 2003) dated October 20, 2006 (filed as Exhibit 10.6 to Form 10-K of Lincoln Electric Holdings, Inc. for the year ended December 31, 2007, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
|
10.4*
|
|
1988 Incentive Equity Plan (filed as Exhibit 28 to the Form S-8 Registration Statement of The Lincoln Electric Company, SEC File No. 33-25209 and incorporated herein by reference and made a part hereof) as adopted and amended by Lincoln Electric Holdings, Inc. pursuant to an Instrument of Adoption and Amendment dated December 29, 1998 (filed as Exhibit 10(d) to Form 10-K of Lincoln Electric Holdings, Inc. for the year ended December 31, 1998, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
|
10.5*
|
|
Amendment No. 2 to the 1988 Incentive Equity Plan dated October 20, 2006 (filed as Exhibit 10.8 to Form 10-K of Lincoln Electric Holdings, Inc. for the year ended December 31, 2007, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
|
10.6*
|
|
Supplemental Executive Retirement Plan (Amended and Restated as of December 31, 2008) (filed as Exhibit 10.1 to Form 8-K of Lincoln Electric Holdings, Inc. filed on January 7, 2009, SEC File No. 0-1402 and incorporated herein by reference and made part hereof).
|
Exhibit No.
|
|
Description
|
10.7*
|
|
Deferred Compensation Plan for Certain Retention Agreements and Other Contractual Arrangements (Amended and Restated as of January 1, 2004) (filed as Exhibit 10(i) to Form 10-K of Lincoln Electric Holdings, Inc. for the year ended December 31, 2003, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
|
10.8*
|
|
Non-Employee Directors' Deferred Compensation Plan (Amended and Restated as of December 31, 2008) (filed as Exhibit 10.3 to Form 8-K of Lincoln Electric Holdings, Inc. filed on January 7, 2009, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
|
10.9*
|
|
2005 Deferred Compensation Plan for Executives (Amended and Restated as of August 1, 2011) (filed as Exhibit 10.1 to Form 8-K of Lincoln Electric Holdings, Inc. filed on August 4, 2011, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
|
10.10*
|
|
Description of Management Incentive Plan (filed as Exhibit 10(e) to Form 10-K of The Lincoln Electric Company for the year ended December 31, 1995, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
|
10.11*
|
|
Description of Long-Term Performance Plan (filed as Exhibit 10(f) to Form 10-K of The Lincoln Electric Company for the year ended December 31, 1997, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
|
10.12*
|
|
Form of Severance Agreement (as entered into by the Company and the following executive officers: Messrs. Stropki, Mapes, Petrella, Stueber, LeBlanc and Blankenship) (filed as Exhibit 10.1 to Form 10-Q of Lincoln Electric Holdings, Inc. for the three months ended June 30, 2009, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
|
10.13*
|
|
Stock Option Plan for Non-Employee Directors (filed as Exhibit 10(p) to Form 10-Q of Lincoln Electric Holdings, Inc. for the three months ended March 31, 2000, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
|
10.14*
|
|
Amendment No. 1 to the Stock Option Plan for Non-Employee Directors dated October 20, 2006 (filed as Exhibit 10.26 to Form 10-K of Lincoln Electric Holdings, Inc. for the year ended December 31, 2007, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
|
10.15*
|
|
Summary of Cash Long-Term Incentive Plan, as amended (filed as Exhibit 10.1 to Form 8-K of Lincoln Electric Holdings, Inc. filed on April 6, 2005, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
|
10.16*
|
|
2006 Equity and Performance Incentive Plan (Restated as of March 3, 2011) (filed as Annex A to the Lincoln Electric Holdings, Inc. proxy statement dated March 18, 2011, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
|
10.17*
|
|
2006 Stock Plan for Non-Employee Directors (filed as Appendix C to the Lincoln Electric Holdings, Inc. proxy statement dated March 28, 2006, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
|
10.18*
|
|
Amendment No. 1 to the 2006 Stock Plan for Non-Employee Directors dated October 20, 2006 (filed as Exhibit 10.2 to Form 10-Q of Lincoln Electric Holdings, Inc. for the three months ended March 31, 2007, SEC file No. 0-1402 and incorporated herein by reference and made a part hereof).
|
10.19*
|
|
Amendment No. 2 to the 2006 Stock Plan for Non-Employee Directors dated July 26, 2007 (filed as Exhibit 10.1 to Form 10-Q of Lincoln Electric Holdings, Inc. for the three months ended September 30, 2007, SEC file No. 0-1402 and incorporated herein by reference and made a part hereof).
|
10.20*
|
|
2007 Management Incentive Compensation Plan (Amended and Restated as of December 31, 2008) (filed as Exhibit 10.4 to Form 8-K of Lincoln Electric Holdings, Inc. filed on January 7, 2009, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
|
10.21*
|
|
Form of Restricted Shares Agreement for Non-Employee Directors (filed as Exhibit 10.1 to Form 10-Q of Lincoln Electric Holdings, Inc. for the three months ended September 30, 2010, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
|
10.22*
|
|
Form of Restricted Shares Agreement for Executive Officers (filed as Exhibit 10.2 to Form 10-Q of Lincoln Electric Holdings, Inc. for the three months ended September 30, 2010, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
|
10.23*
|
|
Form of Stock Option Agreement for Non-Employee Directors (filed as Exhibit 10.3 to Form 10-Q of Lincoln Electric Holdings, Inc. for the three months ended September 30, 2010, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
|
10.24*
|
|
Form of Stock Option Agreement for Executive Officers (filed as Exhibit 10.4 to Form 10-Q of Lincoln Electric Holdings, Inc. for the three months ended September 30, 2010, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
|
10.25*
|
|
Form of Restricted Shares Agreement for Non-Employee Directors (for awards made on or after December 1, 2010) (filed as Exhibit 10.35 to Form 10-K of the Lincoln Electric Holdings, Inc. for the year ended December 31, 2010, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
|
Exhibit No.
|
|
Description
|
10.26*
|
|
Form of Restricted Shares Agreement for Executive Officers (for awards made on or after December 1, 2010) (filed as Exhibit 10.36 to Form 10-K of the Lincoln Electric Holdings, Inc. for the year ended December 31, 2010, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
|
10.27*
|
|
Form of Stock Option Agreement for Executive Officers (for awards made on or after December 1, 2010) (filed as Exhibit 10.37 to Form 10-K of the Lincoln Electric Holdings, Inc. for the year ended December 31, 2010, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
|
10.28*
|
|
Form of Restricted Stock Unit Agreement for Executive Officers (filed as Exhibit 10.2 to Form 8-K of Lincoln Electric Holdings, Inc. filed on August 4, 2011, SEC File No. 0-1402 and incorporated herein by reference and made a part thereof).
|
10.29*
|
|
Form of Officer Indemnification Agreement (effective February 23, 2012) (filed as Exhibit 10.1 to Form 8-K of Lincoln Electric Holdings, Inc. filed on February 29, 2012, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
|
10.30*
|
|
Form of Director Indemnification Agreement (effective February 23, 2012) (filed as Exhibit 10.1 to Form 8-K of Lincoln Electric Holdings, Inc. filed on February 29, 2012, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
|
10.31*
|
|
Form of Amendment to Restricted Shares Agreement for Executive Officers (for awards granted prior to December 2013) (filed as Exhibit 10.1 to Form 8-K of Lincoln Electric Holdings, Inc. filed on December 20, 2013, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
|
10.32*
|
|
Form of Amendment to Restricted Stock Unit Agreement for Executive Officers (for awards granted prior to December 2013) (filed as Exhibit 10.2 to Form 8-K of Lincoln Electric Holdings, Inc. filed on December 20, 2013, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
|
10.33*
|
|
Form of Restricted Stock Unit Agreement for Executive Officers (for awards granted on or after December 16, 2013) (filed herewith).
|
21
|
|
Subsidiaries of the Registrant.
|
23
|
|
Consent of Independent Registered Public Accounting Firm.
|
24
|
|
Powers of Attorney.
|
31.1
|
|
Certification by the President and Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.
|
31.2
|
|
Certification by the Senior Vice President, Chief Financial Officer and Treasurer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.
|
32.1
|
|
Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101.INS
|
|
XBRL Instance Document
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
*
|
Reflects management contract or other compensatory arrangement required to be filed as an exhibit pursuant to Item 15(b) of this report.
|
|
|
LINCOLN ELECTRIC HOLDINGS, INC.
|
|
|
By:
|
/s/ VINCENT K. PETRELLA
|
|
|
Vincent K. Petrella
Senior Vice President, Chief Financial
Officer and Treasurer
(principal financial and accounting officer)
February 21, 2014
|
/s/ CHRISTOPHER L. MAPES
|
|
/s/ VINCENT K. PETRELLA
|
Christopher L. Mapes,
President and Chief Executive Officer
(principal executive officer)
February 21, 2014
|
|
Vincent K. Petrella,
Senior Vice President, Chief Financial Officer and
Treasurer (principal financial and accounting officer)
February 21, 2014
|
|
|
|
/s/ VINCENT K. PETRELLA
|
|
/s/ VINCENT K. PETRELLA
|
Vincent K. Petrella as
Attorney-in-Fact for
Harold L. Adams, Director
February 21, 2014
|
|
Vincent K. Petrella as
Attorney-in-Fact for Curtis E. Espeland, Director February 21, 2014 |
|
|
|
/s/ VINCENT K. PETRELLA
|
|
/s/ VINCENT K. PETRELLA
|
Vincent K. Petrella as
Attorney-in-Fact for
David H. Gunning, Director
February 21, 2014
|
|
Vincent K. Petrella as
Attorney-in-Fact for Stephen G. Hanks, Director February 21, 2014 |
|
|
|
/s/ VINCENT K. PETRELLA
|
|
/s/ VINCENT K. PETRELLA
|
Vincent K. Petrella as
Attorney-in-Fact for
Robert J. Knoll, Director
February 21, 2014
|
|
Vincent K. Petrella as
Attorney-in-Fact for
G. Russell Lincoln, Director
February 21, 2014
|
|
|
|
/s/ VINCENT K. PETRELLA
|
|
/s/ VINCENT K. PETRELLA
|
Vincent K. Petrella as
Attorney-in-Fact for Kathryn Jo Lincoln, Director February 21, 2014 |
|
Vincent K. Petrella as
Attorney-in-Fact for
William E. MacDonald, III, Director
February 21, 2014
|
|
|
|
/s/ VINCENT K. PETRELLA
|
|
/s/ VINCENT K. PETRELLA
|
Vincent K. Petrella as
Attorney-in-Fact for
Phillip J. Mason, Director
February 21, 2014
|
|
Vincent K. Petrella as
Attorney-in-Fact for
Hellene S. Runtagh, Director
February 21, 2014
|
|
|
|
/s/ VINCENT K. PETRELLA
|
|
|
Vincent K. Petrella as
Attorney-in-Fact for
George H. Walls, Jr., Director
February 21, 2014
|
|
|
|
|
December 31,
|
||||||
|
|
2013
|
|
2012
|
||||
ASSETS
|
|
|
|
|
||||
Current Assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
299,825
|
|
|
$
|
286,464
|
|
Accounts receivable (less allowance for doubtful accounts of $8,398 in
2013; $8,654 in 2012)
|
|
367,134
|
|
|
360,662
|
|
||
Inventories
|
|
|
|
|
||||
Raw materials
|
|
112,478
|
|
|
119,963
|
|
||
Work-in-process
|
|
38,963
|
|
|
41,805
|
|
||
Finished goods
|
|
198,522
|
|
|
203,122
|
|
||
Total inventory
|
|
349,963
|
|
|
364,890
|
|
||
Deferred income taxes
|
|
10,922
|
|
|
16,670
|
|
||
Other current assets
|
|
102,931
|
|
|
104,130
|
|
||
Total Current Assets
|
|
1,130,775
|
|
|
1,132,816
|
|
||
Property, Plant and Equipment
|
|
|
|
|
||||
Land
|
|
48,369
|
|
|
44,510
|
|
||
Buildings
|
|
373,373
|
|
|
343,867
|
|
||
Machinery and equipment
|
|
723,715
|
|
|
732,461
|
|
||
|
|
1,145,457
|
|
|
1,120,838
|
|
||
Less accumulated depreciation
|
|
661,452
|
|
|
634,602
|
|
||
Property, Plant and Equipment, Net
|
|
484,005
|
|
|
486,236
|
|
||
Other Assets
|
|
|
|
|
||||
Prepaid pensions
|
|
36,116
|
|
|
—
|
|
||
Equity investments in affiliates
|
|
26,618
|
|
|
24,606
|
|
||
Intangibles, net
|
|
147,012
|
|
|
132,902
|
|
||
Goodwill
|
|
174,715
|
|
|
132,903
|
|
||
Long-term investments
|
|
32,763
|
|
|
31,187
|
|
||
Deferred income taxes
|
|
3,556
|
|
|
44,639
|
|
||
Other non-current assets
|
|
116,307
|
|
|
104,574
|
|
||
Total Other Assets
|
|
537,087
|
|
|
470,811
|
|
||
TOTAL ASSETS
|
|
$
|
2,151,867
|
|
|
$
|
2,089,863
|
|
|
|
December 31,
|
||||||
|
|
2013
|
|
2012
|
||||
LIABILITIES AND EQUITY
|
|
|
|
|
||||
Current Liabilities
|
|
|
|
|
||||
Amounts due banks
|
|
$
|
14,581
|
|
|
$
|
18,220
|
|
Trade accounts payable
|
|
212,799
|
|
|
209,647
|
|
||
Accrued employee compensation and benefits
|
|
68,263
|
|
|
68,698
|
|
||
Accrued expenses
|
|
29,613
|
|
|
29,420
|
|
||
Accrued taxes, including income taxes
|
|
46,109
|
|
|
45,505
|
|
||
Accrued pensions
|
|
10,564
|
|
|
3,639
|
|
||
Dividends payable
|
|
18,619
|
|
|
—
|
|
||
Customer advances
|
|
24,319
|
|
|
26,335
|
|
||
Other current liabilities
|
|
31,335
|
|
|
38,347
|
|
||
Current portion of long-term debt
|
|
715
|
|
|
456
|
|
||
Total Current Liabilities
|
|
456,917
|
|
|
440,267
|
|
||
Long-Term Liabilities
|
|
|
|
|
||||
Long-term debt, less current portion
|
|
3,791
|
|
|
1,599
|
|
||
Accrued pensions
|
|
26,999
|
|
|
216,189
|
|
||
Deferred income taxes
|
|
48,103
|
|
|
8,349
|
|
||
Accrued taxes
|
|
36,149
|
|
|
35,550
|
|
||
Other long-term liabilities
|
|
49,220
|
|
|
29,588
|
|
||
Total Long-Term Liabilities
|
|
164,262
|
|
|
291,275
|
|
||
Shareholders' Equity
|
|
|
|
|
||||
Preferred shares, without par value – at stated capital amount;
authorized – 5,000,000 shares; issued and outstanding – none
|
|
—
|
|
|
—
|
|
||
Common shares, without par value – at stated capital amount;
authorized – 240,000,000 shares; issued – 98,581,434 shares in 2013 and 2012;
outstanding – 81,010,084 shares in 2013 and 82,944,817 shares in 2012
|
|
9,858
|
|
|
9,858
|
|
||
Additional paid-in capital
|
|
240,519
|
|
|
205,124
|
|
||
Retained earnings
|
|
1,908,462
|
|
|
1,682,668
|
|
||
Accumulated other comprehensive loss
|
|
(151,941
|
)
|
|
(235,400
|
)
|
||
Treasury shares, at cost – 17,571,350 shares in 2013 and 15,636,617 shares in 2012
|
|
(480,296
|
)
|
|
(319,877
|
)
|
||
Total Shareholders' Equity
|
|
1,526,602
|
|
|
1,342,373
|
|
||
Non-controlling interests
|
|
4,086
|
|
|
15,948
|
|
||
Total Equity
|
|
1,530,688
|
|
|
1,358,321
|
|
||
TOTAL LIABILITIES AND EQUITY
|
|
$
|
2,151,867
|
|
|
$
|
2,089,863
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2013
|
|
2012
|
|
2011
|
||||||
Net sales
|
|
$
|
2,852,671
|
|
|
$
|
2,853,367
|
|
|
$
|
2,694,609
|
|
Cost of goods sold
|
|
1,910,017
|
|
|
1,986,711
|
|
|
1,957,872
|
|
|||
Gross profit
|
|
942,654
|
|
|
866,656
|
|
|
736,737
|
|
|||
Selling, general & administrative expenses
|
|
527,206
|
|
|
495,221
|
|
|
439,775
|
|
|||
Rationalization and asset impairment charges
|
|
8,463
|
|
|
9,354
|
|
|
282
|
|
|||
Operating income
|
|
406,985
|
|
|
362,081
|
|
|
296,680
|
|
|||
Other income (expense):
|
|
|
|
|
|
|
||||||
Interest income
|
|
3,320
|
|
|
3,988
|
|
|
3,121
|
|
|||
Equity earnings in affiliates
|
|
4,806
|
|
|
5,007
|
|
|
5,385
|
|
|||
Other income
|
|
4,194
|
|
|
2,685
|
|
|
2,849
|
|
|||
Interest expense
|
|
(2,864
|
)
|
|
(4,191
|
)
|
|
(6,704
|
)
|
|||
Total other income (expense)
|
|
9,456
|
|
|
7,489
|
|
|
4,651
|
|
|||
Income before income taxes
|
|
416,441
|
|
|
369,570
|
|
|
301,331
|
|
|||
Income taxes
|
|
124,754
|
|
|
112,354
|
|
|
84,318
|
|
|||
Net income including non-controlling interests
|
|
291,687
|
|
|
257,216
|
|
|
217,013
|
|
|||
Non-controlling interests in subsidiaries' loss
|
|
(2,093
|
)
|
|
(195
|
)
|
|
(173
|
)
|
|||
Net income
|
|
$
|
293,780
|
|
|
$
|
257,411
|
|
|
$
|
217,186
|
|
|
|
|
|
|
|
|
||||||
Basic earnings per share
|
|
$
|
3.58
|
|
|
$
|
3.10
|
|
|
$
|
2.60
|
|
Diluted earnings per share
|
|
$
|
3.54
|
|
|
$
|
3.06
|
|
|
$
|
2.56
|
|
|
|
|
|
|
|
|
||||||
Cash dividends declared per share
|
|
$
|
0.830
|
|
|
$
|
0.710
|
|
|
$
|
0.635
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2013
|
|
2012
|
|
2011
|
||||||
Net income including non-controlling interests
|
|
$
|
291,687
|
|
|
$
|
257,216
|
|
|
$
|
217,013
|
|
Other comprehensive income, net of tax:
|
|
|
|
|
|
|
||||||
Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges, net of tax of $(141) in 2013; $(201) in 2012; $264 in 2011
|
|
289
|
|
|
(832
|
)
|
|
1,264
|
|
|||
Defined pension plan activity, net of tax of $60,556 in 2013; $(3,492) in 2012; $(47,413) in 2011
|
|
101,151
|
|
|
(6,475
|
)
|
|
(79,936
|
)
|
|||
Currency translation adjustment
|
|
(19,955
|
)
|
|
19,635
|
|
|
(26,773
|
)
|
|||
Transactions with non-controlling interests
|
|
155
|
|
|
—
|
|
|
—
|
|
|||
Other comprehensive income (loss)
|
|
81,640
|
|
|
12,328
|
|
|
(105,445
|
)
|
|||
Comprehensive income
|
|
373,327
|
|
|
269,544
|
|
|
111,568
|
|
|||
Comprehensive (loss) income attributable to non-controlling interests
|
|
(3,912
|
)
|
|
(348
|
)
|
|
315
|
|
|||
Comprehensive income attributable to shareholders
|
|
$
|
377,239
|
|
|
$
|
269,892
|
|
|
$
|
111,253
|
|
|
Common
Shares
Outstanding
|
|
Common
Shares
|
|
Additional
Paid-In
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Treasury
Shares
|
|
Non-controlling
Interests
|
|
Total
|
|||||||||||||||
Balance at December 31, 2010
|
84,242
|
|
|
$
|
9,858
|
|
|
$
|
162,447
|
|
|
$
|
1,320,552
|
|
|
$
|
(141,948
|
)
|
|
$
|
(217,412
|
)
|
|
$
|
15,981
|
|
|
$
|
1,149,478
|
|
Net income
|
|
|
|
|
|
|
217,186
|
|
|
|
|
|
|
(173
|
)
|
|
217,013
|
|
||||||||||||
Unrecognized amounts from defined benefit pension plans, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
(79,936
|
)
|
|
|
|
|
|
|
(79,936
|
)
|
|||||||||
Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
1,264
|
|
|
|
|
|
|
|
|
1,264
|
|
||||||||
Currency translation adjustment
|
|
|
|
|
|
|
|
|
|
|
|
(27,261
|
)
|
|
|
|
|
488
|
|
|
(26,773
|
)
|
||||||||
Cash dividends declared – $0.635 per
share
|
|
|
|
|
|
|
|
|
|
(53,345
|
)
|
|
|
|
|
|
|
|
|
|
|
(53,345
|
)
|
|||||||
Issuance of shares under benefit plans
|
593
|
|
|
|
|
|
16,657
|
|
|
|
|
|
|
|
|
5,881
|
|
|
|
|
|
22,538
|
|
|||||||
Purchase of shares for treasury
|
(1,078
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(36,997
|
)
|
|
|
|
|
(36,997
|
)
|
|||||||
Balance at December 31, 2011
|
83,757
|
|
|
9,858
|
|
|
179,104
|
|
|
1,484,393
|
|
|
(247,881
|
)
|
|
(248,528
|
)
|
|
16,296
|
|
|
1,193,242
|
|
|||||||
Net income
|
|
|
|
|
|
|
257,411
|
|
|
|
|
|
|
(195
|
)
|
|
257,216
|
|
||||||||||||
Unrecognized amounts from defined benefit pension plans, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
(6,475
|
)
|
|
|
|
|
|
|
|
(6,475
|
)
|
||||||||
Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
(832
|
)
|
|
|
|
|
|
|
|
(832
|
)
|
||||||||
Currency translation adjustment
|
|
|
|
|
|
|
|
|
|
|
|
19,788
|
|
|
|
|
|
(153
|
)
|
|
19,635
|
|
||||||||
Cash dividends declared – $0.710 per
share
|
|
|
|
|
|
|
|
|
|
(59,136
|
)
|
|
|
|
|
|
|
|
|
|
|
(59,136
|
)
|
|||||||
Issuance of shares under benefit plans
|
985
|
|
|
|
|
|
26,020
|
|
|
|
|
|
|
|
|
9,669
|
|
|
|
|
|
35,689
|
|
|||||||
Purchase of shares for treasury
|
(1,797
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(81,018
|
)
|
|
|
|
|
(81,018
|
)
|
|||||||
Balance at December 31, 2012
|
82,945
|
|
|
9,858
|
|
|
205,124
|
|
|
1,682,668
|
|
|
(235,400
|
)
|
|
(319,877
|
)
|
|
15,948
|
|
|
1,358,321
|
|
|||||||
Net income
|
|
|
|
|
|
|
293,780
|
|
|
|
|
|
|
(2,093
|
)
|
|
291,687
|
|
||||||||||||
Unrecognized amounts from defined benefit pension plans, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
101,151
|
|
|
|
|
|
|
|
|
101,151
|
|
||||||||
Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
289
|
|
|
|
|
|
|
|
|
289
|
|
||||||||
Currency translation adjustment
|
|
|
|
|
|
|
|
|
|
|
|
(18,136
|
)
|
|
|
|
|
(1,819
|
)
|
|
(19,955
|
)
|
||||||||
Cash dividends declared – $0.83 per
share
|
|
|
|
|
|
|
|
|
|
(67,986
|
)
|
|
|
|
|
|
|
|
|
|
|
(67,986
|
)
|
|||||||
Issuance of shares under benefit plans
|
787
|
|
|
|
|
|
33,693
|
|
|
|
|
|
|
|
7,460
|
|
|
|
|
|
41,153
|
|
||||||||
Purchase of shares for treasury
|
(2,722
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(167,879
|
)
|
|
|
|
|
(167,879
|
)
|
|||||||
Transactions with non-controlling interests
|
|
|
|
|
1,702
|
|
|
|
|
155
|
|
|
|
|
(7,950
|
)
|
|
(6,093
|
)
|
|||||||||||
Balance at December 31, 2013
|
81,010
|
|
|
$
|
9,858
|
|
|
$
|
240,519
|
|
|
$
|
1,908,462
|
|
|
$
|
(151,941
|
)
|
|
$
|
(480,296
|
)
|
|
$
|
4,086
|
|
|
$
|
1,530,688
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2013
|
|
2012
|
|
2011
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
293,780
|
|
|
$
|
257,411
|
|
|
$
|
217,186
|
|
Non-controlling interests in subsidiaries' loss
|
|
(2,093
|
)
|
|
(195
|
)
|
|
(173
|
)
|
|||
Net income including non-controlling interests
|
|
291,687
|
|
|
257,216
|
|
|
217,013
|
|
|||
Adjustments to reconcile Net income including non-controlling interests to Net cash provided by operating activities:
|
|
|
|
|
|
|
||||||
Rationalization and asset impairment charges
|
|
5,092
|
|
|
1,740
|
|
|
23
|
|
|||
Depreciation and amortization
|
|
68,883
|
|
|
65,334
|
|
|
62,051
|
|
|||
Equity (earnings) loss in affiliates, net
|
|
(1,660
|
)
|
|
160
|
|
|
(1,971
|
)
|
|||
Deferred income taxes
|
|
17,817
|
|
|
(2,137
|
)
|
|
15,139
|
|
|||
Stock-based compensation
|
|
9,734
|
|
|
8,961
|
|
|
6,610
|
|
|||
Pension expense
|
|
29,774
|
|
|
35,515
|
|
|
26,370
|
|
|||
Pension contributions and payments
|
|
(87,356
|
)
|
|
(69,646
|
)
|
|
(36,322
|
)
|
|||
Other, net
|
|
1,910
|
|
|
2,688
|
|
|
991
|
|
|||
Changes in operating assets and liabilities, net of effects from acquisitions:
|
|
|
|
|
|
|
||||||
(Increase) decrease in accounts receivable
|
|
(5,437
|
)
|
|
57,759
|
|
|
(67,518
|
)
|
|||
Decrease (increase) in inventories
|
|
13,310
|
|
|
28,286
|
|
|
(51,679
|
)
|
|||
Decrease (increase) in other current assets
|
|
2,811
|
|
|
(9,506
|
)
|
|
(2,857
|
)
|
|||
Increase in accounts payable
|
|
794
|
|
|
16,110
|
|
|
8,672
|
|
|||
(Decrease) increase in other current liabilities
|
|
(7,785
|
)
|
|
21,887
|
|
|
20,838
|
|
|||
Net change in other long-term assets and liabilities
|
|
(680
|
)
|
|
(86,883
|
)
|
|
(3,842
|
)
|
|||
NET CASH PROVIDED BY OPERATING ACTIVITIES
|
|
338,894
|
|
|
327,484
|
|
|
193,518
|
|
|||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
||||||
Capital expenditures
|
|
(76,015
|
)
|
|
(52,715
|
)
|
|
(65,813
|
)
|
|||
Acquisition of businesses, net of cash acquired
|
|
(53,161
|
)
|
|
(134,602
|
)
|
|
(66,229
|
)
|
|||
Proceeds from sale of property, plant and equipment
|
|
1,393
|
|
|
1,387
|
|
|
1,246
|
|
|||
Other investing activities
|
|
(1,717
|
)
|
|
(1,541
|
)
|
|
—
|
|
|||
NET CASH USED BY INVESTING ACTIVITIES
|
|
(129,500
|
)
|
|
(187,471
|
)
|
|
(130,796
|
)
|
|||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
||||||
Proceeds from short-term borrowings
|
|
1,230
|
|
|
2,518
|
|
|
23,224
|
|
|||
Payments on short-term borrowings
|
|
(2,164
|
)
|
|
(4,293
|
)
|
|
(15,446
|
)
|
|||
Amounts due banks, net
|
|
(517
|
)
|
|
(2,758
|
)
|
|
1,203
|
|
|||
Proceeds from long-term borrowings
|
|
61
|
|
|
918
|
|
|
909
|
|
|||
Payments on long-term borrowings
|
|
(450
|
)
|
|
(85,688
|
)
|
|
(1,941
|
)
|
|||
Proceeds from exercise of stock options
|
|
20,297
|
|
|
18,776
|
|
|
11,351
|
|
|||
Excess tax benefit from stock-based compensation
|
|
10,602
|
|
|
7,819
|
|
|
2,916
|
|
|||
Purchase of shares for treasury
|
|
(167,879
|
)
|
|
(81,018
|
)
|
|
(36,997
|
)
|
|||
Cash dividends paid to shareholders
|
|
(49,277
|
)
|
|
(73,112
|
)
|
|
(51,935
|
)
|
|||
Transactions with non-controlling interests
|
|
(6,087
|
)
|
|
—
|
|
|
—
|
|
|||
Other financing activities
|
|
—
|
|
|
—
|
|
|
3,346
|
|
|||
NET CASH USED BY FINANCING ACTIVITIES
|
|
(194,184
|
)
|
|
(216,838
|
)
|
|
(63,370
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
|
(1,849
|
)
|
|
2,188
|
|
|
(4,444
|
)
|
|||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
|
13,361
|
|
|
(74,637
|
)
|
|
(5,092
|
)
|
|||
Cash and cash equivalents at beginning of year
|
|
286,464
|
|
|
361,101
|
|
|
366,193
|
|
|||
CASH AND CASH EQUIVALENTS AT END OF YEAR
|
|
$
|
299,825
|
|
|
$
|
286,464
|
|
|
$
|
361,101
|
|
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.
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Numerator:
|
|
|
|
|
|
||||||
Net income
|
$
|
293,780
|
|
|
$
|
257,411
|
|
|
$
|
217,186
|
|
Denominator:
|
|
|
|
|
|
||||||
Basic weighted average shares outstanding
|
81,978
|
|
|
83,087
|
|
|
83,681
|
|
|||
Effect of dilutive securities - Stock options and awards
|
1,064
|
|
|
1,088
|
|
|
1,027
|
|
|||
Diluted weighted average shares outstanding
|
83,042
|
|
|
84,175
|
|
|
84,708
|
|
|||
Basic earnings per share
|
$
|
3.58
|
|
|
$
|
3.10
|
|
|
$
|
2.60
|
|
Diluted earnings per share
|
$
|
3.54
|
|
|
$
|
3.06
|
|
|
$
|
2.56
|
|
|
|
North
America
Welding
|
|
Europe
Welding
|
|
Asia
Pacific
Welding
|
|
South
America
Welding
|
|
The Harris
Products
Group
|
|
Consolidated
|
||||||||||||
Balance at December 31, 2011
|
|
$
|
18,514
|
|
|
$
|
23,867
|
|
|
$
|
5,208
|
|
|
$
|
561
|
|
|
$
|
16,951
|
|
|
$
|
65,101
|
|
Additions and adjustments
|
|
67,740
|
|
66
|
|
|
—
|
|
|
—
|
|
|
(1,109
|
)
|
|
66,697
|
|
|||||||
Foreign currency translation
|
|
23
|
|
1,424
|
|
|
40
|
|
|
53
|
|
|
(435
|
)
|
|
1,105
|
|
|||||||
Balance as of December 31, 2012
|
|
86,277
|
|
|
25,357
|
|
|
5,248
|
|
|
614
|
|
|
15,407
|
|
|
132,903
|
|
||||||
Additions and adjustments
|
|
44,446
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,027
|
)
|
|
43,419
|
|
|||||||
Foreign currency translation
|
|
(284)
|
|
(927
|
)
|
|
111
|
|
|
(52
|
)
|
|
(455
|
)
|
|
(1,607
|
)
|
|||||||
Balance as of December 31, 2013
|
|
$
|
130,439
|
|
|
$
|
24,430
|
|
|
$
|
5,359
|
|
|
$
|
562
|
|
|
$
|
13,925
|
|
|
$
|
174,715
|
|
|
|
|
|
December 31, 2013
|
||||||||||||||
|
|
Weighted
Average Life
|
|
Gross
Amount
|
|
Accumulated
Amortization
|
|
Indefinite
Lived Assets
|
|
Total Intangible,
Net
|
||||||||
Trademarks and trade names
|
|
12
|
|
$
|
38,566
|
|
|
$
|
11,898
|
|
|
$
|
18,310
|
|
|
$
|
44,978
|
|
Customer relationships
|
|
14
|
|
74,935
|
|
|
16,837
|
|
|
—
|
|
|
58,098
|
|
||||
Patents
|
|
20
|
|
23,861
|
|
|
6,205
|
|
|
—
|
|
|
17,656
|
|
||||
Other
|
|
14
|
|
49,578
|
|
|
23,298
|
|
|
—
|
|
|
26,280
|
|
||||
Total
|
|
|
|
$
|
186,940
|
|
|
$
|
58,238
|
|
|
$
|
18,310
|
|
|
$
|
147,012
|
|
|
|
December 31, 2012
|
||||||||||||||
|
|
Gross
Amount
|
|
Accumulated
Amortization
|
|
Indefinite
Lived Assets
|
|
Total Intangible,
Net
|
||||||||
Trademarks and trade names
|
|
$
|
30,611
|
|
|
$
|
9,493
|
|
|
$
|
18,276
|
|
|
$
|
39,394
|
|
Customer relationships
|
|
63,906
|
|
|
12,099
|
|
|
—
|
|
|
51,807
|
|
||||
Patents
|
|
20,882
|
|
|
5,103
|
|
|
—
|
|
|
15,779
|
|
||||
Other
|
|
44,769
|
|
|
18,847
|
|
|
—
|
|
|
25,922
|
|
||||
Total
|
|
$
|
160,168
|
|
|
$
|
45,542
|
|
|
$
|
18,276
|
|
|
$
|
132,902
|
|
|
North
America
Welding
|
|
Europe
Welding
|
|
Asia
Pacific
Welding
|
|
South
America
Welding
|
|
The Harris
Products
Group
|
|
Corporate /
Eliminations
|
|
Consolidated
|
||||||||||||||
For the Year Ended
December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net sales
|
$
|
1,652,769
|
|
|
$
|
429,548
|
|
|
$
|
266,282
|
|
|
$
|
195,895
|
|
|
$
|
308,177
|
|
|
$
|
—
|
|
|
$
|
2,852,671
|
|
Inter-segment sales
|
127,254
|
|
|
19,911
|
|
|
14,906
|
|
|
233
|
|
|
9,605
|
|
|
(171,909
|
)
|
|
$
|
—
|
|
||||||
Total
|
$
|
1,780,023
|
|
|
$
|
449,459
|
|
|
$
|
281,188
|
|
|
$
|
196,128
|
|
|
$
|
317,782
|
|
|
$
|
(171,909
|
)
|
|
$
|
2,852,671
|
|
EBIT, as adjusted
|
$
|
318,507
|
|
|
$
|
36,247
|
|
|
$
|
1,815
|
|
|
$
|
57,306
|
|
|
$
|
27,826
|
|
|
$
|
(4,350
|
)
|
|
$
|
437,351
|
|
Special items charge (gain)
|
1,052
|
|
|
2,045
|
|
|
6,071
|
|
|
12,198
|
|
|
—
|
|
|
—
|
|
|
$
|
21,366
|
|
||||||
EBIT
|
$
|
317,455
|
|
|
$
|
34,202
|
|
|
$
|
(4,256
|
)
|
|
$
|
45,108
|
|
|
$
|
27,826
|
|
|
$
|
(4,350
|
)
|
|
$
|
415,985
|
|
Interest income
|
|
|
|
|
|
|
|
|
|
|
|
|
3,320
|
|
|||||||||||||
Interest expense
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,864
|
)
|
|||||||||||||
Income before income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
416,441
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total assets
|
$
|
1,048,412
|
|
|
$
|
403,094
|
|
|
$
|
325,656
|
|
|
$
|
169,027
|
|
|
$
|
162,496
|
|
|
$
|
43,182
|
|
|
$
|
2,151,867
|
|
Equity investments in affiliates
|
—
|
|
|
23,315
|
|
|
—
|
|
|
3,303
|
|
|
—
|
|
|
—
|
|
|
$
|
26,618
|
|
||||||
Capital expenditures
|
41,181
|
|
|
10,305
|
|
|
2,073
|
|
|
20,840
|
|
|
3,931
|
|
|
(2,315
|
)
|
|
$
|
76,015
|
|
||||||
Depreciation and amortization
|
39,086
|
|
|
10,933
|
|
|
13,559
|
|
|
1,893
|
|
|
3,636
|
|
|
(224
|
)
|
|
$
|
68,883
|
|
||||||
For the Year Ended
December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net sales
|
$
|
1,580,818
|
|
|
$
|
452,227
|
|
|
$
|
324,482
|
|
|
$
|
161,483
|
|
|
$
|
334,357
|
|
|
$
|
—
|
|
|
$
|
2,853,367
|
|
Inter-segment sales
|
131,062
|
|
|
16,048
|
|
|
14,829
|
|
|
38
|
|
|
8,549
|
|
|
(170,526
|
)
|
|
$
|
—
|
|
||||||
Total
|
$
|
1,711,880
|
|
|
$
|
468,275
|
|
|
$
|
339,311
|
|
|
$
|
161,521
|
|
|
$
|
342,906
|
|
|
$
|
(170,526
|
)
|
|
$
|
2,853,367
|
|
EBIT, as adjusted
|
$
|
293,070
|
|
|
$
|
37,299
|
|
|
$
|
7,247
|
|
|
$
|
18,301
|
|
|
$
|
29,477
|
|
|
$
|
(4,886
|
)
|
|
$
|
380,508
|
|
Special items charge (gain)
|
827
|
|
|
3,534
|
|
|
4,993
|
|
|
1,381
|
|
|
—
|
|
|
—
|
|
|
$
|
10,735
|
|
||||||
EBIT
|
$
|
292,243
|
|
|
$
|
33,765
|
|
|
$
|
2,254
|
|
|
$
|
16,920
|
|
|
$
|
29,477
|
|
|
$
|
(4,886
|
)
|
|
$
|
369,773
|
|
Interest income
|
|
|
|
|
|
|
|
|
|
|
|
|
3,988
|
|
|||||||||||||
Interest expense
|
|
|
|
|
|
|
|
|
|
|
|
|
(4,191
|
)
|
|||||||||||||
Income before income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
369,570
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total assets
|
$
|
980,093
|
|
|
$
|
451,654
|
|
|
$
|
350,189
|
|
|
$
|
134,650
|
|
|
$
|
195,881
|
|
|
$
|
(22,604
|
)
|
|
$
|
2,089,863
|
|
Equity investments in affiliates
|
—
|
|
|
21,798
|
|
|
—
|
|
|
2,808
|
|
|
—
|
|
|
—
|
|
|
$
|
24,606
|
|
||||||
Capital expenditures
|
36,834
|
|
|
5,372
|
|
|
8,833
|
|
|
899
|
|
|
831
|
|
|
(54
|
)
|
|
$
|
52,715
|
|
||||||
Depreciation and amortization
|
33,479
|
|
|
11,008
|
|
|
15,102
|
|
|
1,878
|
|
|
3,934
|
|
|
(67
|
)
|
|
$
|
65,334
|
|
||||||
For the Year Ended
December 31, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net sales
|
$
|
1,309,499
|
|
|
$
|
508,692
|
|
|
$
|
376,276
|
|
|
$
|
156,684
|
|
|
$
|
343,458
|
|
|
$
|
—
|
|
|
$
|
2,694,609
|
|
Inter-segment sales
|
136,314
|
|
|
17,422
|
|
|
15,614
|
|
|
494
|
|
|
8,496
|
|
|
(178,340
|
)
|
|
$
|
—
|
|
||||||
Total
|
$
|
1,445,813
|
|
|
$
|
526,114
|
|
|
$
|
391,890
|
|
|
$
|
157,178
|
|
|
$
|
351,954
|
|
|
$
|
(178,340
|
)
|
|
$
|
2,694,609
|
|
EBIT, as adjusted
|
$
|
227,924
|
|
|
$
|
36,171
|
|
|
$
|
2,629
|
|
|
$
|
12,895
|
|
|
$
|
25,151
|
|
|
$
|
426
|
|
|
$
|
305,196
|
|
Special items charge (gain)
|
—
|
|
|
392
|
|
|
(110
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
282
|
|
||||||
EBIT
|
$
|
227,924
|
|
|
$
|
35,779
|
|
|
$
|
2,739
|
|
|
$
|
12,895
|
|
|
$
|
25,151
|
|
|
$
|
426
|
|
|
$
|
304,914
|
|
Interest income
|
|
|
|
|
|
|
|
|
|
|
|
|
3,121
|
|
|||||||||||||
Interest expense
|
|
|
|
|
|
|
|
|
|
|
|
|
(6,704
|
)
|
|||||||||||||
Income before income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
301,331
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total assets
|
$
|
771,315
|
|
|
$
|
436,327
|
|
|
$
|
380,282
|
|
|
$
|
110,781
|
|
|
$
|
181,916
|
|
|
$
|
96,155
|
|
|
$
|
1,976,776
|
|
Equity investments in affiliates
|
—
|
|
|
20,500
|
|
|
—
|
|
|
4,118
|
|
|
—
|
|
|
—
|
|
|
$
|
24,618
|
|
||||||
Capital expenditures
|
31,826
|
|
|
8,566
|
|
|
21,498
|
|
|
2,314
|
|
|
1,792
|
|
|
(183
|
)
|
|
$
|
65,813
|
|
||||||
Depreciation and amortization
|
29,237
|
|
|
11,736
|
|
|
14,663
|
|
|
2,033
|
|
|
4,714
|
|
|
(332
|
)
|
|
$
|
62,051
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2013
|
|
2012
|
|
2011
|
||||||
Net sales:
|
|
|
|
|
|
|
||||||
United States
|
|
$
|
1,350,309
|
|
|
$
|
1,283,066
|
|
|
$
|
1,092,838
|
|
China
|
|
219,490
|
|
|
229,996
|
|
|
286,121
|
|
|||
Other foreign countries
|
|
1,282,872
|
|
|
1,340,305
|
|
|
1,315,650
|
|
|||
Total
|
|
$
|
2,852,671
|
|
|
$
|
2,853,367
|
|
|
$
|
2,694,609
|
|
|
|
December 31,
|
||||||||||
|
|
2013
|
|
2012
|
|
2011
|
||||||
Property, plant and equipment, net:
|
|
|
|
|
|
|
||||||
United States
|
|
$
|
162,357
|
|
|
$
|
170,831
|
|
|
$
|
149,637
|
|
China
|
|
83,416
|
|
|
92,744
|
|
|
96,374
|
|
|||
Other foreign countries
|
|
238,685
|
|
|
223,050
|
|
|
224,801
|
|
|||
Eliminations
|
|
(453
|
)
|
|
(389
|
)
|
|
(361
|
)
|
|||
Total
|
|
$
|
484,005
|
|
|
$
|
486,236
|
|
|
$
|
470,451
|
|
|
|
North America Welding
|
|
Europe
Welding
|
|
Asia
Pacific
Welding
|
|
The Harris
Products
Group
|
|
Consolidated
|
||||||||||
Balance at December 31, 2011
|
|
$
|
—
|
|
|
$
|
173
|
|
|
$
|
—
|
|
|
$
|
82
|
|
|
$
|
255
|
|
Payments and other adjustments
|
|
(827
|
)
|
|
(1,797
|
)
|
|
(2,107
|
)
|
|
(82
|
)
|
|
(4,813
|
)
|
|||||
Charged to expense
|
|
827
|
|
|
3,637
|
|
|
3,151
|
|
|
—
|
|
|
7,615
|
|
|||||
Balance at December 31, 2012
|
|
$
|
—
|
|
|
$
|
2,013
|
|
|
$
|
1,044
|
|
|
$
|
—
|
|
|
$
|
3,057
|
|
Payments and other adjustments
|
|
(586
|
)
|
|
(1,343
|
)
|
|
(1,510
|
)
|
|
—
|
|
|
(3,439
|
)
|
|||||
Charged to expense
|
|
1,052
|
|
|
1,765
|
|
|
841
|
|
|
—
|
|
|
3,658
|
|
|||||
Balance at December 31, 2013
|
|
$
|
466
|
|
|
$
|
2,435
|
|
|
$
|
375
|
|
|
$
|
—
|
|
|
$
|
3,276
|
|
|
|
Unrealized (loss) gain on derivatives designated and qualifying as cash flow hedges
|
|
Defined benefit pension plan activity
|
|
Currency translation adjustment
|
|
Total
|
||||||||
Balance at December 31, 2011
|
|
$
|
912
|
|
|
$
|
(255,369
|
)
|
|
$
|
6,576
|
|
|
$
|
(247,881
|
)
|
Other comprehensive income (loss) before reclassification
|
|
(1,997
|
)
|
|
(26,373
|
)
|
2
|
19,555
|
|
3
|
(8,815
|
)
|
||||
Amounts reclassified from AOCI
|
|
1,165
|
|
1
|
19,898
|
|
2
|
233
|
|
3
|
21,296
|
|
||||
Net current-period other comprehensive income (loss)
|
|
(832
|
)
|
|
(6,475
|
)
|
|
19,788
|
|
|
12,481
|
|
||||
Balance at December 31, 2012
|
|
$
|
80
|
|
|
$
|
(261,844
|
)
|
|
$
|
26,364
|
|
|
$
|
(235,400
|
)
|
Other comprehensive income (loss) before reclassification
|
|
(681
|
)
|
|
82,050
|
|
2
|
(19,316
|
)
|
3
|
62,053
|
|
||||
Amounts reclassified from AOCI
|
|
970
|
|
1
|
19,101
|
|
2
|
1,335
|
|
3
|
21,406
|
|
||||
Net current-period other comprehensive income (loss)
|
|
289
|
|
|
101,151
|
|
|
(17,981
|
)
|
|
83,459
|
|
||||
Balance at December 31, 2013
|
|
$
|
369
|
|
|
$
|
(160,693
|
)
|
|
$
|
8,383
|
|
|
$
|
(151,941
|
)
|
|
|
|
|
|
|
|
|
|
1
|
During the
2013
period, this AOCI reclassification is a component of Net sales of
$619
(net of tax of
$99
), Cost of goods sold of
$418
(net of tax of
$295
) and SG&A of
$(67)
with no tax effect; during the
2012
period, the reclassification is a component of Net sales of
$931
(net of tax of
$157
) and Cost of goods sold of
$234
(net of tax of
$169
). (See Note 13 - Derivatives for additional details.)
|
2
|
This AOCI component is included in the computation of net periodic pension costs (net of tax of
$60,556
and
$(3,492)
during the years ended December 31,
2013
and
2012
, respectively). (See Note 11 - Retirement and Postretirement Benefit Plans for additional details.)
|
3
|
The Other comprehensive income before reclassifications excludes
$(1,819)
and
$(153)
attributable to Non-controlling interests in the years ended December 31,
2013
and
2012
, respectively. The reclassified AOCI component is included in the computation of Non-controlling interests. (See Consolidated Statements of Equity for additional details.)
|
|
|
December 31,
|
||||||
|
|
2013
|
|
2012
|
||||
Long-term debt
|
|
|
|
|
||||
Capital leases due through 2017, interest at 1.12% to 3.63%
|
|
$
|
236
|
|
|
$
|
267
|
|
Other borrowings due through 2023, interest up to 4.00%
|
|
4,270
|
|
|
1,788
|
|
||
|
|
4,506
|
|
|
2,055
|
|
||
Less current portion
|
|
715
|
|
|
456
|
|
||
Long-term debt, less current portion
|
|
3,791
|
|
|
1,599
|
|
||
Short-term debt
|
|
|
|
|
||||
Amounts due banks, interest at 11.28% (11.32% in 2012)
|
|
14,581
|
|
|
18,220
|
|
||
Current portion long-term debt
|
|
715
|
|
|
456
|
|
||
Total short-term debt
|
|
15,296
|
|
|
18,676
|
|
||
Total debt
|
|
$
|
19,087
|
|
|
$
|
20,275
|
|
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
|
2013
|
|
2012
|
|
2011
|
|||||||||||||||
|
|
Options
|
|
Weighted
Average
Exercise
Price
|
|
Options
|
|
Weighted
Average
Exercise
Price
|
|
Options
|
|
Weighted
Average
Exercise
Price
|
|||||||||
Balance at beginning of year
|
|
3,060,944
|
|
|
$
|
30.98
|
|
|
3,632,463
|
|
|
$
|
26.05
|
|
|
3,779,824
|
|
|
$
|
23.99
|
|
Options granted
|
|
273,105
|
|
|
70.88
|
|
|
412,980
|
|
|
47.66
|
|
|
459,263
|
|
|
35.34
|
|
|||
Options exercised
|
|
(774,783
|
)
|
|
26.20
|
|
|
(962,029
|
)
|
|
19.52
|
|
|
(572,795
|
)
|
|
19.82
|
|
|||
Options canceled
|
|
(106,618
|
)
|
|
40.54
|
|
|
(22,470
|
)
|
|
24.07
|
|
|
(33,829
|
)
|
|
26.62
|
|
|||
Balance at end of year
|
|
2,452,648
|
|
|
36.52
|
|
|
3,060,944
|
|
|
30.98
|
|
|
3,632,463
|
|
|
26.05
|
|
|||
Exercisable at end of year
|
|
1,837,014
|
|
|
29.93
|
|
|
2,208,455
|
|
|
27.19
|
|
|
2,677,071
|
|
|
23.73
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2013
|
|
2012
|
|
2011
|
||||||
Expected volatility
|
|
32.97
|
%
|
|
45.67
|
%
|
|
41.92
|
%
|
|||
Dividend yield
|
|
1.40
|
%
|
|
1.66
|
%
|
|
1.63
|
%
|
|||
Risk-free interest rate
|
|
1.52
|
%
|
|
0.70
|
%
|
|
0.80
|
%
|
|||
Expected option life (years)
|
|
4.4
|
|
|
4.5
|
|
|
4.3
|
|
|||
Weighted average fair value per option granted during the year
|
|
$
|
18.14
|
|
|
$
|
15.87
|
|
|
$
|
10.97
|
|
|
|
Year Ended December 31, 2013
|
|||||
|
|
Number of
Options
|
|
Weighted
Average Fair
Value at Grant
Date
|
|||
Balance at beginning of year
|
|
852,489
|
|
|
$
|
13.63
|
|
Granted
|
|
273,105
|
|
|
18.14
|
|
|
Vested
|
|
(410,542
|
)
|
|
12.50
|
|
|
Forfeited
|
|
(99,418
|
)
|
|
14.04
|
|
|
Balance at end of year
|
|
615,634
|
|
|
16.32
|
|
|
|
Outstanding
|
|
Exercisable
|
|
|
||||||||||
Exercise Price Range
|
|
Number of
Stock
Options
|
|
Weighted
Average
Exercise
Price
|
|
Number of
Stock
Options
|
|
Weighted
Average
Exercise
Price
|
|
Weighted
Average
Remaining
Life (years)
|
||||||
Under $29.99
|
|
738,614
|
|
|
$
|
23.41
|
|
|
738,614
|
|
|
$
|
23.41
|
|
|
4.6
|
$30.00 - $39.99
|
|
1,092,456
|
|
|
33.20
|
|
|
1,001,199
|
|
|
33.00
|
|
|
6.2
|
||
Over $40.00
|
|
621,578
|
|
|
57.93
|
|
|
97,201
|
|
|
47.85
|
|
|
9.4
|
||
|
|
2,452,648
|
|
|
|
|
|
1,837,014
|
|
|
|
|
|
6.5
|
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
|
2013
|
|
2012
|
|
2011
|
|||||||||||||||
|
|
Shares
|
|
Weighted
Average
Grant Date
Fair Value
|
|
Shares
|
|
Weighted
Average
Grant Date
Fair Value
|
|
Shares
|
|
Weighted
Average
Grant Date
Fair Value
|
|||||||||
Balance at beginning of year
|
|
336,808
|
|
|
$
|
28.49
|
|
|
379,233
|
|
|
$
|
28.06
|
|
|
523,730
|
|
|
$
|
27.36
|
|
Shares granted
|
|
14,464
|
|
|
70.88
|
|
|
20,099
|
|
|
47.81
|
|
|
22,779
|
|
|
35.55
|
|
|||
Shares vested*
|
|
(224,021
|
)
|
|
25.68
|
|
|
(62,524
|
)
|
|
32.10
|
|
|
(159,842
|
)
|
|
26.97
|
|
|||
Shares forfeited
|
|
(11,935
|
)
|
|
25.76
|
|
|
—
|
|
|
—
|
|
|
(7,434
|
)
|
|
24.67
|
|
|||
Balance at end of year
|
|
115,316
|
|
|
39.55
|
|
|
336,808
|
|
|
28.49
|
|
|
379,233
|
|
|
28.06
|
|
*
|
Includes shares vested but not exercisable
|
|
|
Year Ended December 31, 2013
|
|||||
|
|
Number of Restricted Shares
|
|
Weighted Average Fair Value at Grant Date
|
|||
Balance at beginning of year
|
|
318,088
|
|
|
$
|
28.74
|
|
Shares granted
|
|
14,464
|
|
|
70.88
|
|
|
Shares vested
|
|
(205,301
|
)
|
|
25.80
|
|
|
Shares forfeited
|
|
(11,935
|
)
|
|
25.76
|
|
|
Balance at end of year
|
|
115,316
|
|
|
39.55
|
|
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
|
2013
|
|
2012
|
|
2011
|
|||||||||||||||
|
|
Units
|
|
Weighted
Average
Grant Date
Fair Value
|
|
Units
|
|
Weighted
Average
Grant Date
Fair Value
|
|
Units
|
|
Weighted
Average
Grant Date
Fair Value
|
|||||||||
Balance at beginning of year
|
|
288,669
|
|
|
$
|
40.83
|
|
|
166,519
|
|
|
$
|
34.55
|
|
|
—
|
|
|
$
|
—
|
|
Units granted
|
|
69,925
|
|
|
67.17
|
|
|
133,944
|
|
|
47.97
|
|
|
166,519
|
|
|
34.55
|
|
|||
Units vested
|
|
(33,698
|
)
|
|
39.20
|
|
|
(10,499
|
)
|
|
33.06
|
|
|
—
|
|
|
—
|
|
|||
Units forfeited
|
|
(40,952
|
)
|
|
41.70
|
|
|
(1,295
|
)
|
|
35.55
|
|
|
—
|
|
|
—
|
|
|||
Balance at end of year
|
|
283,944
|
|
|
47.38
|
|
|
288,669
|
|
|
40.83
|
|
|
166,519
|
|
|
34.55
|
|
|
|
December 31,
|
||||||
|
|
2013
|
|
2012
|
||||
Change in benefit obligations
|
|
|
|
|
||||
Benefit obligations at beginning of year
|
|
$
|
1,033,725
|
|
|
$
|
991,979
|
|
Service cost
|
|
23,188
|
|
|
21,538
|
|
||
Interest cost
|
|
37,225
|
|
|
41,584
|
|
||
Plan participants' contributions
|
|
221
|
|
|
334
|
|
||
Plan amendments
|
|
1,623
|
|
|
(3,681
|
)
|
||
Actuarial (gain) loss
|
|
(91,851
|
)
|
|
70,015
|
|
||
Benefits paid
|
|
(59,296
|
)
|
|
(86,722
|
)
|
||
Settlement/curtailment
|
|
(1,390
|
)
|
|
(3,946
|
)
|
||
Currency translation
|
|
(2,003
|
)
|
|
2,624
|
|
||
Benefit obligations at end of year
|
|
941,442
|
|
|
1,033,725
|
|
||
|
|
|
|
|
||||
Change in plan assets
|
|
|
|
|
||||
Fair value of plan assets at beginning of year
|
|
813,897
|
|
|
749,456
|
|
||
Actual return on plan assets
|
|
101,044
|
|
|
83,156
|
|
||
Employer contributions
|
|
85,456
|
|
|
68,029
|
|
||
Plan participants' contributions
|
|
221
|
|
|
334
|
|
||
Benefits paid
|
|
(57,644
|
)
|
|
(85,238
|
)
|
||
Settlement
|
|
(1,390
|
)
|
|
(3,798
|
)
|
||
Currency translation
|
|
(1,589
|
)
|
|
1,958
|
|
||
Fair value of plan assets at end of year
|
|
939,995
|
|
|
813,897
|
|
||
|
|
|
|
|
||||
Funded status at end of year
|
|
(1,447
|
)
|
|
(219,828
|
)
|
||
Unrecognized actuarial net loss
|
|
258,781
|
|
|
422,042
|
|
||
Unrecognized prior service cost
|
|
(2,547
|
)
|
|
(4,101
|
)
|
||
Unrecognized transition assets, net
|
|
26
|
|
|
26
|
|
||
Net amount recognized
|
|
$
|
254,813
|
|
|
$
|
198,139
|
|
|
|
December 31,
|
||||||
|
|
2013
|
|
2012
|
||||
Prepaid pensions
|
|
$
|
36,116
|
|
|
$
|
—
|
|
Accrued pension liability, current
|
|
(10,564
|
)
|
|
(3,639
|
)
|
||
Accrued pension liability, long-term
|
|
(26,999
|
)
|
|
(216,189
|
)
|
||
Accumulated other comprehensive loss, excluding tax effects
|
|
256,260
|
|
|
417,967
|
|
||
Net amount recognized in the balance sheets
|
|
$
|
254,813
|
|
|
$
|
198,139
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2013
|
|
2012
|
|
2011
|
||||||
Service cost
|
|
$
|
23,188
|
|
|
$
|
21,538
|
|
|
$
|
17,331
|
|
Interest cost
|
|
37,225
|
|
|
41,584
|
|
|
44,161
|
|
|||
Expected return on plan assets
|
|
(61,244
|
)
|
|
(58,754
|
)
|
|
(57,405
|
)
|
|||
Amortization of prior service cost
|
|
(613
|
)
|
|
(90
|
)
|
|
(62
|
)
|
|||
Amortization of net loss
|
|
30,929
|
|
|
31,085
|
|
|
21,816
|
|
|||
Settlement/curtailment loss
|
|
423
|
|
|
895
|
|
|
529
|
|
|||
Pension cost for defined benefit plans
|
|
$
|
29,908
|
|
|
$
|
36,258
|
|
|
$
|
26,370
|
|
|
|
December 31,
|
||||||
|
|
2013
|
|
2012
|
||||
U.S. pension plans
|
|
|
|
|
||||
Projected benefit obligation
|
|
$
|
37,355
|
|
|
$
|
956,837
|
|
Accumulated benefit obligation
|
|
33,416
|
|
|
905,541
|
|
||
Fair value of plan assets
|
|
10,028
|
|
|
755,491
|
|
||
Non-U.S. pension plans
|
|
|
|
|
||||
Projected benefit obligation
|
|
$
|
49,990
|
|
|
$
|
76,884
|
|
Accumulated benefit obligation
|
|
42,593
|
|
|
70,492
|
|
||
Fair value of plan assets
|
|
39,753
|
|
|
58,403
|
|
Estimated Payments
|
|
||
2014
|
$
|
61,755
|
|
2015
|
53,992
|
|
|
2016
|
61,654
|
|
|
2017
|
59,570
|
|
|
2018
|
58,422
|
|
|
2019 through 2023
|
307,094
|
|
|
|
December 31,
|
||||
|
|
2013
|
|
2012
|
||
Discount rate
|
|
4.7
|
%
|
|
3.8
|
%
|
Rate of increase in compensation
|
|
4.2
|
%
|
|
4.0
|
%
|
|
|
December 31,
|
|||||||
|
|
2013
|
|
2012
|
|
2011
|
|||
Discount rate
|
|
3.8
|
%
|
|
4.2
|
%
|
|
5.3
|
%
|
Rate of increase in compensation
|
|
4.1
|
%
|
|
4.0
|
%
|
|
4.0
|
%
|
Expected return on plan assets
|
|
7.4
|
%
|
|
7.7
|
%
|
|
7.9
|
%
|
|
|
Pension Plans' Assets at Fair Value as of December 31, 2013
|
||||||||||||||
|
|
Quoted Prices
in Active Markets
for Identical
Assets
(Level 1)
|
|
Significant Other
Observable Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
|
||||||||
Common trusts and 103-12 investments
(1)
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
|
$
|
—
|
|
|
$
|
4,686
|
|
|
$
|
—
|
|
|
$
|
4,686
|
|
Common trusts and 103-12 investments
|
|
—
|
|
|
902,746
|
|
|
—
|
|
|
902,746
|
|
||||
Private equity funds
(2)
|
|
—
|
|
|
—
|
|
|
32,563
|
|
|
32,563
|
|
||||
Total assets at fair value
|
|
$
|
—
|
|
|
$
|
907,432
|
|
|
$
|
32,563
|
|
|
$
|
939,995
|
|
|
|
Pension Plans' Assets at Fair Value as of December 31, 2012
|
||||||||||||||
|
|
Quoted Prices
in Active Markets
for Identical
Assets
(Level 1)
|
|
Significant Other
Observable Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
|
||||||||
Corporate stock
(3)
|
|
$
|
107,763
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
107,763
|
|
Cash and cash equivalents
|
|
5,170
|
|
|
—
|
|
|
—
|
|
|
5,170
|
|
||||
Corporate and other obligations
(4)
|
|
—
|
|
|
412
|
|
|
—
|
|
|
412
|
|
||||
Common trusts and 103-12 investments
(1)
|
|
—
|
|
|
673,469
|
|
|
—
|
|
|
673,469
|
|
||||
Private equity funds
(2)
|
|
—
|
|
|
—
|
|
|
27,083
|
|
|
27,083
|
|
||||
Total assets at fair value
|
|
$
|
112,933
|
|
|
$
|
673,881
|
|
|
$
|
27,083
|
|
|
$
|
813,897
|
|
(1)
|
Common trusts and 103-12 investments 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 net asset value ("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.
|
(2)
|
Private equity funds consist of four funds seeking capital appreciation by investing in private equity investment partnerships and venture capital companies. 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.
|
(3)
|
This investment category includes publicly traded equity investments directly held by the plans. Investments are valued at the unadjusted quoted close prices reported on the reporting date.
|
(4)
|
This investment category is composed of publicly traded bonds and asset backed securities which are valued at the quoted closing market prices on the reporting date.
|
|
|
Private
Equity
Funds
|
||
Balance at the beginning of year
|
|
$
|
27,083
|
|
Purchases, sales, issuances and settlements
|
|
2,186
|
|
|
Realized and unrealized gains
|
|
3,294
|
|
|
Balance at the end of year
|
|
$
|
32,563
|
|
The amount of total gains during the period attributable to the change in unrealized gains relating to Level 3 net assets still held at the reporting date
|
|
$
|
3,035
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2013
|
|
2012
|
|
2011
|
||||||
U.S.
|
|
$
|
281,724
|
|
|
$
|
243,382
|
|
|
$
|
204,667
|
|
Non-U.S.
|
|
134,717
|
|
|
126,188
|
|
|
96,664
|
|
|||
Total
|
|
$
|
416,441
|
|
|
$
|
369,570
|
|
|
$
|
301,331
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2013
|
|
2012
|
|
2011
|
||||||
Current:
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
58,099
|
|
|
$
|
72,809
|
|
|
$
|
42,510
|
|
Non-U.S.
|
|
40,348
|
|
|
33,510
|
|
|
19,970
|
|
|||
State and local
|
|
8,490
|
|
|
8,172
|
|
|
6,699
|
|
|||
|
|
106,937
|
|
|
114,491
|
|
|
69,179
|
|
|||
Deferred:
|
|
|
|
|
|
|
||||||
Federal
|
|
21,946
|
|
|
(1,673
|
)
|
|
12,140
|
|
|||
Non-U.S.
|
|
(5,734
|
)
|
|
(750
|
)
|
|
2,768
|
|
|||
State and local
|
|
1,605
|
|
|
286
|
|
|
231
|
|
|||
|
|
17,817
|
|
|
(2,137
|
)
|
|
15,139
|
|
|||
Total
|
|
$
|
124,754
|
|
|
$
|
112,354
|
|
|
$
|
84,318
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2013
|
|
2012
|
|
2011
|
||||||
Statutory rate of 35% applied to pre-tax income
|
|
$
|
145,754
|
|
|
$
|
129,350
|
|
|
$
|
105,466
|
|
Effect of state and local income taxes, net of federal tax benefit
|
|
7,124
|
|
|
5,598
|
|
|
4,585
|
|
|||
Taxes (less) more than the U.S. tax rate on non-U.S. earnings, including utilization of tax loss carry-forwards, losses with no benefit and changes in non-U.S. valuation allowance
|
|
(17,352
|
)
|
|
(11,263
|
)
|
|
(13,637
|
)
|
|||
Manufacturing deduction
|
|
(6,386
|
)
|
|
(6,287
|
)
|
|
(5,330
|
)
|
|||
U.S. tax cost (benefit) of foreign source income
|
|
995
|
|
|
(4,766
|
)
|
|
145
|
|
|||
Resolution and adjustments to uncertain tax positions
|
|
(313
|
)
|
|
(1,493
|
)
|
|
(5,103
|
)
|
|||
Other
|
|
(5,068
|
)
|
|
1,215
|
|
|
(1,808
|
)
|
|||
Total
|
|
$
|
124,754
|
|
|
$
|
112,354
|
|
|
$
|
84,318
|
|
Effective tax rate
|
|
29.96
|
%
|
|
30.40
|
%
|
|
27.98
|
%
|
|
|
December 31,
|
||||||
|
|
2013
|
|
2012
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Tax loss and credit carry-forwards
|
|
$
|
51,762
|
|
|
$
|
40,373
|
|
Inventory
|
|
1,277
|
|
|
1,328
|
|
||
Other accruals
|
|
15,709
|
|
|
14,981
|
|
||
Employee benefits
|
|
18,909
|
|
|
17,904
|
|
||
Pension obligations
|
|
4,643
|
|
|
82,903
|
|
||
Other
|
|
9,828
|
|
|
12,686
|
|
||
Deferred tax assets, gross
|
|
102,128
|
|
|
170,175
|
|
||
Valuation allowance
|
|
(49,684
|
)
|
|
(38,799
|
)
|
||
Deferred tax assets, net
|
|
52,444
|
|
|
131,376
|
|
||
Deferred tax liabilities:
|
|
|
|
|
||||
Property, plant and equipment
|
|
38,653
|
|
|
41,380
|
|
||
Intangible assets
|
|
24,014
|
|
|
19,545
|
|
||
Inventory
|
|
7,311
|
|
|
5,783
|
|
||
Pension obligations
|
|
7,315
|
|
|
2,940
|
|
||
Other
|
|
8,777
|
|
|
8,769
|
|
||
Deferred tax liabilities
|
|
86,070
|
|
|
78,417
|
|
||
Total Deferred taxes
|
|
$
|
(33,626
|
)
|
|
$
|
52,959
|
|
|
|
2013
|
|
2012
|
||||
Balance at January 1
|
|
$
|
25,255
|
|
|
$
|
26,656
|
|
Increase related to current year tax provisions
|
|
1,990
|
|
|
3,838
|
|
||
Increase related to prior years' tax positions
|
|
208
|
|
|
212
|
|
||
Increase related to acquisitions
|
|
3,528
|
|
|
1,274
|
|
||
Decrease related to settlements with taxing authorities
|
|
(95
|
)
|
|
(940
|
)
|
||
Resolution of and other decreases in prior years' tax liabilities
|
|
(3,491
|
)
|
|
(5,964
|
)
|
||
Other
|
|
(1,488
|
)
|
|
179
|
|
||
Balance at December 31
|
|
$
|
25,907
|
|
|
$
|
25,255
|
|
|
|
December 31, 2013
|
|
December 31, 2012
|
||||||||||||
Derivatives by hedge designation
|
|
Other
Current
Assets
|
|
Other
Current
Liabilities
|
|
Other
Current
Assets
|
|
Other
Current
Liabilities
|
||||||||
Designated as hedging instruments:
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
|
$
|
706
|
|
|
$
|
219
|
|
|
$
|
352
|
|
|
$
|
325
|
|
Not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
|
766
|
|
|
228
|
|
|
510
|
|
|
902
|
|
||||
Commodity contracts
|
|
262
|
|
|
47
|
|
|
731
|
|
|
—
|
|
||||
Total derivatives
|
|
$
|
1,734
|
|
|
$
|
494
|
|
|
$
|
1,593
|
|
|
$
|
1,227
|
|
|
|
|
|
Year Ended December 31,
|
||||||
Derivatives by hedge designation
|
|
Classification of gains (losses)
|
|
2013
|
|
2012
|
||||
Not designated as hedges:
|
|
|
|
|
|
|
||||
Foreign exchange contracts
|
|
Selling, general & administrative expenses
|
|
$
|
215
|
|
|
$
|
3,711
|
|
Commodity contracts
|
|
Cost of goods sold
|
|
2,882
|
|
|
(1,117
|
)
|
|
|
December 31,
|
||||||
Total gain recognized in AOCI, net of tax
|
|
2013
|
|
2012
|
||||
Foreign exchange contracts
|
|
$
|
369
|
|
|
$
|
80
|
|
|
|
|
|
Year Ended December 31,
|
||||||
Derivative type
|
|
Gain (loss) reclassified from AOCI to:
|
|
2013
|
|
2012
|
||||
Foreign exchange contracts
|
|
Sales
|
|
$
|
619
|
|
|
$
|
931
|
|
|
|
Cost of goods sold
|
|
418
|
|
|
234
|
|
||
Net investment contracts
|
|
Selling, general & administrative expenses
|
|
(67
|
)
|
|
—
|
|
Description
|
|
Balance as of December 31, 2013
|
|
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
|
|
$
|
1,472
|
|
|
$
|
—
|
|
|
$
|
1,472
|
|
|
$
|
—
|
|
Commodity contracts
|
|
262
|
|
|
—
|
|
|
262
|
|
|
—
|
|
||||
Total assets
|
|
$
|
1,734
|
|
|
$
|
—
|
|
|
$
|
1,734
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
|
$
|
447
|
|
|
$
|
—
|
|
|
$
|
447
|
|
|
$
|
—
|
|
Commodity contracts
|
|
47
|
|
|
—
|
|
|
47
|
|
|
—
|
|
||||
Contingent consideration
|
|
5,375
|
|
|
—
|
|
|
—
|
|
|
5,375
|
|
||||
Forward contract
|
|
16,974
|
|
|
—
|
|
|
—
|
|
|
16,974
|
|
||||
Deferred compensation
|
|
20,132
|
|
|
—
|
|
|
20,132
|
|
|
—
|
|
||||
Total liabilities
|
|
$
|
42,975
|
|
|
$
|
—
|
|
|
$
|
20,626
|
|
|
$
|
22,349
|
|
Description
|
|
Balance as of December 31, 2012
|
|
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
|
|
$
|
862
|
|
|
$
|
—
|
|
|
$
|
862
|
|
|
$
|
—
|
|
Commodity contracts
|
|
731
|
|
|
—
|
|
|
731
|
|
|
—
|
|
||||
Total assets
|
|
$
|
1,593
|
|
|
$
|
—
|
|
|
$
|
1,593
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign exchange contracts
|
|
$
|
1,227
|
|
|
$
|
—
|
|
|
$
|
1,227
|
|
|
$
|
—
|
|
Contingent consideration
|
|
4,894
|
|
|
—
|
|
|
—
|
|
|
4,894
|
|
||||
Deferred compensation
|
|
16,882
|
|
|
—
|
|
|
16,882
|
|
|
—
|
|
||||
Total liabilities
|
|
$
|
23,003
|
|
|
$
|
—
|
|
|
$
|
18,109
|
|
|
$
|
4,894
|
|
|
|
December 31,
|
||||||
|
|
2013
|
|
2012
|
||||
Buildings
|
|
$
|
461
|
|
|
$
|
441
|
|
Machinery and equipment
|
|
110
|
|
|
209
|
|
||
Less: accumulated depreciation
|
|
(100
|
)
|
|
(163
|
)
|
||
Net capital leases
|
|
$
|
471
|
|
|
$
|
487
|
|
|
|
December 31,
|
||||||||||
|
|
2013
|
|
2012
|
|
2011
|
||||||
Balance at beginning of year
|
|
$
|
15,304
|
|
|
$
|
15,781
|
|
|
$
|
16,879
|
|
Accruals for warranties
|
|
12,786
|
|
|
10,872
|
|
|
10,395
|
|
|||
Settlements
|
|
(12,794
|
)
|
|
(11,477
|
)
|
|
(11,260
|
)
|
|||
Foreign currency translation
|
|
(116
|
)
|
|
128
|
|
|
(233
|
)
|
|||
Balance at end of year
|
|
$
|
15,180
|
|
|
$
|
15,304
|
|
|
$
|
15,781
|
|
|
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
||||||||
2013
|
|
|
|
|
|
|
|
|
||||||||
Net sales
|
|
$
|
718,573
|
|
|
$
|
727,432
|
|
|
$
|
691,875
|
|
|
$
|
714,791
|
|
Gross profit
|
|
226,572
|
|
|
240,338
|
|
|
232,697
|
|
|
243,047
|
|
||||
Income before income taxes
|
|
90,679
|
|
|
106,534
|
|
|
97,840
|
|
|
121,388
|
|
||||
Net income
|
|
66,806
|
|
|
72,606
|
|
|
66,044
|
|
|
88,324
|
|
||||
Basic earnings per share
|
|
$
|
0.81
|
|
|
$
|
0.88
|
|
|
$
|
0.81
|
|
|
$
|
1.09
|
|
Diluted earnings per share
|
|
$
|
0.80
|
|
|
$
|
0.87
|
|
|
$
|
0.80
|
|
|
$
|
1.07
|
|
2012
|
|
|
|
|
|
|
|
|
||||||||
Net sales
|
|
$
|
727,122
|
|
|
$
|
744,045
|
|
|
$
|
697,552
|
|
|
$
|
684,648
|
|
Gross profit
|
|
215,265
|
|
|
224,997
|
|
|
213,362
|
|
|
213,032
|
|
||||
Income before income taxes
|
|
92,919
|
|
|
98,157
|
|
|
90,889
|
|
|
87,605
|
|
||||
Net income
|
|
64,243
|
|
|
66,319
|
|
|
64,765
|
|
|
62,084
|
|
||||
Basic earnings per share
|
|
$
|
0.77
|
|
|
$
|
0.80
|
|
|
$
|
0.78
|
|
|
$
|
0.75
|
|
Diluted earnings per share
|
|
$
|
0.76
|
|
|
$
|
0.79
|
|
|
$
|
0.77
|
|
|
$
|
0.74
|
|
|
|
|
|
Additions
|
|
|
|
|
||||||||||||
Description
|
|
Balance at
Beginning
of Period
|
|
Charged to
Costs and
Expenses
|
|
(1)
Charged to
Other
Accounts
|
|
(2)
Deductions
|
|
Balance at End of Period
|
||||||||||
Allowance for doubtful accounts:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Year Ended December 31, 2013
|
|
$
|
8,654
|
|
|
$
|
2,671
|
|
|
$
|
49
|
|
|
$
|
2,976
|
|
|
$
|
8,398
|
|
Year Ended December 31, 2012
|
|
7,079
|
|
|
3,368
|
|
|
68
|
|
|
1,861
|
|
|
8,654
|
|
|||||
Year Ended December 31, 2011
|
|
7,855
|
|
|
2,173
|
|
|
(303
|
)
|
|
2,646
|
|
|
7,079
|
|
(1)
|
Currency translation adjustment.
|
(2)
|
Uncollectible accounts written-off, net of recoveries.
|
1.
|
Definitions
. Unless otherwise defined in this Agreement, terms used in this Agreement, with initial capital letters will have the meanings assigned to them in the Plan.
|
(a)
|
"Change in Control" means the occurrence of any of the following events:
|
(i)
|
any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person") is or becomes the beneficial owner (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of the combined voting power of the then-outstanding Voting Stock of the Company;
provided
,
however
, that:
|
(1)
|
for purposes of this Section 1(a)(i), the following acquisitions will not constitute a Change in Control: (A) any acquisition of Voting Stock of the Company directly from the Company that is approved by a majority of the Incumbent Directors, (B) any acquisition of Voting Stock of the Company by the Company or any Subsidiary, (C) any acquisition of Voting Stock of the Company by the trustee or other fiduciary holding securities under any employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary, and (D) any acquisition of Voting Stock of the Company by any Person pursuant to a Business Transaction that complies with clauses (A), (B) and (C) of Section 1(a)(iii) below;
|
(2)
|
if any Person is or becomes the beneficial owner of 30% or more of combined voting power of the then-outstanding Voting Stock of the Company as a result of a transaction described in clause (A) of Section 1(a)(i)(1) above and such Person thereafter becomes the beneficial owner of any additional shares of Voting Stock of the Company representing 1% or more of the then-outstanding
|
(3)
|
a Change in Control will not be deemed to have occurred if a Person is or becomes the beneficial owner of 30% or more of the Voting Stock of the Company as a result of a reduction in the number of shares of Voting Stock of the Company outstanding pursuant to a transaction or series of transactions that is approved by a majority of the Incumbent Directors unless and until such Person thereafter becomes the beneficial owner of any additional shares of Voting Stock of the Company representing 1% or more of the then-outstanding Voting Stock of the Company, other than as a result of a stock dividend, stock split or similar transaction effected by the Company in which all holders of Voting Stock are treated equally; and
|
(4)
|
if at least a majority of the Incumbent Directors determine in good faith that a Person has acquired beneficial ownership of 30% or more of the Voting Stock of the Company inadvertently, and such Person divests as promptly as practicable but no later than the date, if any, set by the Incumbent Board a sufficient number of shares so that such Person beneficially owns less than 30% of the Voting Stock of the Company, then no Change in Control will have occurred as a result of such Person's acquisition; or
|
(ii)
|
a majority of the Board ceases to be comprised of Incumbent Directors; or
|
(iii)
|
the consummation of a reorganization, merger or consolidation, or sale or other disposition of all or substantially all of the assets of the Company or the acquisition of the stock or assets of another corporation, or other transaction (each, a "Business Transaction"), unless, in each case, immediately following such Business Transaction (A) the Voting Stock of the Company outstanding immediately prior to such Business Transaction continues to represent (either by remaining outstanding or by being converted into Voting Stock of the surviving entity or any parent thereof), more than 50% of the combined voting power of the then outstanding shares of Voting Stock of the entity resulting from such Business Transaction (including, without limitation, an entity which as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries), (B) no Person (other than the Company, such entity resulting from such Business Transaction, or any employee benefit plan (or related trust) sponsored or maintained by the Company, any Subsidiary or such entity resulting from such Business Transaction) beneficially owns, directly or indirectly, 30% or more of the combined voting power of the then outstanding shares of Voting Stock of the entity resulting from such Business Transaction, and (C) at least a majority of the members of the Board of Directors of the entity resulting from such Business Transaction were Incumbent Directors at the time of the execution of the initial agreement or of the action of the Board providing for such Business Transaction; or
|
(iv)
|
approval by the shareholders of the Company of a complete liquidation or dissolution of the Company, except pursuant to a Business Transaction that complies with clauses (A), (B) and (C) of Section 1(a)(iii).
|
(b)
|
Other definitions used in Section 1(a):
|
(i)
|
"Board" means the Board of Directors of Lincoln Electric Holdings, Inc.
|
(ii)
|
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
|
(iii)
|
"Incumbent Directors" means the individuals who, as of the date hereof, are Directors of the Company (each, a "Director") and any individual becoming a Director subsequent to the date hereof whose election, nomination for election by the Company's shareholders, or appointment, was approved by a vote of at least two-thirds of the then Incumbent Directors (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without objection to such nomination);
provided
,
however
, that an individual will not be an Incumbent Director if such individual's election or appointment to the Board occurs as a result of an actual or threatened election contest (as described in Rule 14a‑12(c) of the Exchange Act) with respect to the election or removal of Directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board.
|
(iv)
|
"Subsidiary" means an entity in which the Company directly or indirectly beneficially owns 50% or more of the outstanding Voting Stock.
|
(v)
|
"Voting Stock" means securities entitled to vote generally in the election of directors.
|
(c)
|
Deferred Compensation Plan" means the Lincoln Electric Holdings, Inc. 2005 Deferred Compensation Plan for Executives, as amended and restated.
|
(d)
|
"Disabled": The Committee shall determine, in its sole discretion, that a Grantee is "Disabled" if the Grantee meets one of the following requirements: (A) the Grantee is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, (B) the Grantee is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under the Company's accident and health or long-term disability plan or any similar plan maintained by a third party, but excluding governmental plans, or (C) the Social Security Administration determines the Grantee to be totally disabled.
|
(e)
|
"Distribution Date" means the date on which the Common Shares represented by vested RSUs shall be distributed to the Grantee as specified in Section 8; provided that, the Distribution Date for a Grantee who elects to defer the distribution of his or her Common Shares pursuant to the Deferred Compensation Plan will be governed by the Deferred Compensation Plan.
|
(f)
|
"Separation from Service" shall have the meaning given in Code Section 409A, and references to employment termination or termination of employment in this Agreement shall be deemed to refer to a Separation from Service. In accordance with Treasury Regulation §1.409A-1(h)(1)(ii) (or any similar or successor provisions), a Separation from Service shall be deemed to occur, without limitation, if the Company and the Grantee reasonably anticipate that the level of bona fide services the Grantee will perform after a certain date (whether as an employee or as an independent contractor) will permanently decrease to less than fifty percent (50%) of the average level of bona fide services provided in the immediately preceding thirty-six (36) months.
|
2.
|
Issuance of RSUs
. The RSUs covered by this Agreement shall be issued to the Grantee effective upon the Date of Grant. Each RSU entitles the Grantee to receive one Common Share upon the Grantee's Distribution Date. The Grantee shall not have the rights of a shareholder with respect to such RSUs, except as provided in Section 10, provided that such RSUs, together with any additional RSUs that the Grantee may become entitled to receive by virtue of a share dividend, a merger or
|
3.
|
Restrictions on Transfer of RSUs
. The RSUs subject to this grant may not be sold, exchanged, assigned, transferred, pledged, encumbered or otherwise disposed of by the Grantee, except to the Company, until the Distribution Date;
provided
,
however
, that the Grantee's rights with respect to such RSUs may be transferred by will or pursuant to the laws of descent and distribution. Any purported transfer or encumbrance in violation of the provisions of this Section 3 shall be void, and the other party to any such purported transaction shall not obtain any rights to or interest in such RSUs or the underlying Common Shares. The Company in its sole discretion, when and as permitted by the Plan, may waive the restrictions on transferability with respect to all or a portion of the RSUs subject to this Agreement.
|
4.
|
Vesting of RSUs
. Subject to the terms and conditions of Sections 5, 6 and 7 hereof,
all of
the RSUs covered by this Agreement shall become nonforfeitable upon the Grantee remaining in the continuous employment of the Company or a Subsidiary until the earlier of (a) the fifth anniversary from the Date of Grant (December 16, 2018), or (b) a determination by the Committee that each of the Management Objectives incorporated in the Company's 2014 to 2016 Cash Long-Term Incentive Plan has been achieved at 100% or more of targets (which determination shall be made within 75 days of December 31, 2016).
|
5.
|
Effect of Change in Control
. The RSUs subject to this Agreement shall become immediately nonforfeitable upon any Change in Control of the Company that shall occur while the Grantee is an employee of the Company or a Subsidiary (a) if the Grantee's employment is terminated prior to the vesting provided in Section 4 hereof or (b) if any successor to the business of the Company resulting from a Change in Control should fail to honor the terms of this Agreement.
|
6.
|
Effect of Death
,
Disability
or Retirement
.
|
(a)
|
The RSUs subject to this Agreement shall become immediately nonforfeitable in full (i) upon the death of the Grantee while in the employment of the Company or any Subsidiary, or (ii) if the Grantee’s employment with the Company or any subsidiary should terminate as a result of the Grantee becoming Disabled.
|
(b)
|
If the Grantee terminates employment with the Company or any Subsidiary after the Grantee's normal retirement date (as determined under The Lincoln Electric Company Retirement Annuity Program, whether or not the Grantee participates in that program) (“Retirement"), but prior to the vesting provided in Section 4 hereof, only a pro rata portion of the RSUs granted hereby, based on the Grantee's length of employment during the five-year vesting period shall immediately vest; provided, however, that:
|
(i)
|
If the Retirement occurs prior to July 1, 2016, the remaining portion of the RSUs will be forfeited upon such Retirement; and
|
(ii)
|
If the Retirement occurs on or after July 1, 2016, the remaining portion of the RSUs will continue to vest as if the Grantee had remained employed by the Company or a Subsidiary and shall become nonforfeitable if the Committee timely determines, pursuant to Section 4(b) above, that each of the Management Objectives incorporated in the Company’s 2014 to 2016 Cash Long-Term Incentive Plan has been achieved at 100% or more of targets. However, if, during the period of time described in Section 4(b) above, the Committee determines that each of the Management Objectives incorporated in the Company’s 2014 to 2016 Cash Long-Term Incentive Plan has not been achieved at 100% or more of targets, the remaining portion of the RSUs will be forfeited on the date of such Committee determination.
|
7.
|
Effect of Termination of Employment and Effect of Competitive Conduct
.
|
(a)
|
In the event that the Grantee's employment shall terminate in a manner other than any specified in Section 5 or Section 6 hereof, the Grantee shall forfeit any RSUs that have not become nonforfeitable by such Grantee at the time of such termination;
provided
,
however
, that the Board upon recommendation of the Committee may order that such part or all of such RSUs become nonforfeitable.
|
(b)
|
Notwithstanding anything in this Agreement to the contrary, unless otherwise determined by the Company, if the Grantee, either during employment by the Company or a Subsidiary or within two (2) years after termination of such employment, (i) shall become an employee of a competitor of the Company or a Subsidiary or (ii) shall engage in any other conduct that is competitive with the Company or a Subsidiary, in each case as reasonably determined by the Company (“Competition”), then, at the time of such Company determination, the Grantee shall forfeit RSUs that have not become nonforfeitable. In addition, if the Company shall so determine, the Grantee shall, promptly upon notice of such determination, (x) return to the Company, all the Common Shares that the Grantee has not disposed of that were issued in payment of RSUs that became nonforfeitable pursuant to this Agreement, including amounts the Grantee elected to defer under Section 9 hereof, within a period of one (1) year prior to the date of the commencement of such Competition if the Grantee is an employee of the Company or a Subsidiary, or within a period of one (1) year prior to termination of employment with the Company or a Subsidiary if the Grantee is no longer an employee, and (y) with respect to any Common Shares so issued in payment of RSUs pursuant to this Agreement, that the Grantee has disposed of, including amounts the Grantee elected to defer under Section 9 hereof, pay to the Company in cash the aggregate Market Value Per Share of those Common Shares on the Distribution Date, in each case as reasonably determined by the Company. To the extent that such amounts are not promptly paid to the Company, the Company may set off the amounts so payable to it against any amounts (other than amounts of non-qualified deferred compensation as so defined under Section 409A of the Code) that may be owing from time to time by the Company or a Subsidiary to the Grantee, whether as wages or vacation pay or in the form of any other benefit or for any other reason.
|
8.
|
Time of Payment of RSUs
.
|
(a)
|
With respect to RSUs (or any portion of RSUs) that constitute deferred compensation within the meaning of Section 409A of the Code (after taking into account any applicable exemptions from Section 409A of the Code), on each of the earlier of the following dates (
i.e
., within 15 days of such date), payment for such RSUs, if any, that are vested as of such date as determined in accordance with Section 409A of the Code (less any RSUs which became vested and were paid on an earlier date) shall be made:
|
(i)
|
on the vesting date specified in Section 4;
|
(ii)
|
on the date of the Grantee’s death;
|
(iii)
|
on the date the Grantee experiences a separation from service with the Company (determined in accordance with Section 409A of the Code), provided, however, that if the Grantee on the date of separation from service is a “specified employee” (within the meaning of Section 409A of the Code determined using the identification methodology selected by the Company from time to time), payment for the RSUs will be made on the first day of the seventh month after the date of the Grantee’s separation from service or, if earlier, the date of the Grantee’s death; or
|
(iv)
|
on the date of a change in the ownership or effective control of the Company, or a change in the ownership of a substantial portion of the assets of the Company (each within the meaning of Section 409A of the Code).
|
(b)
|
With respect to RSUs (or any portion of RSUs) that do not constitute deferred compensation within the meaning of Section 409A of the Code (after taking into account any applicable exemptions from Section 409A of the Code), payment for such RSUs shall be made within 60 days of the date on which such RSUs become nonforfeitable and in all events within the 2 ½ month short-term deferral period specified in Treasury Regulation § 1.409A-1(b)(4).
|
9.
|
Deferral of RSUs
. The Grantee may elect to defer receipt of the Common Shares underlying the RSUs subject to this Agreement beyond the vesting date in Section 4 above, pursuant to and in accordance with the terms of the Deferred Compensation Plan.
|
10.
|
Dividend Equivalents and Other Rights
.
|
(a)
|
Except as provided in this Section, the Grantee shall not have any of the rights of a shareholder with respect to the RSUs covered by this Agreement;
provided
,
however
, that any additional Common Shares, share rights or other securities that the Grantee may become entitled to receive pursuant to a stock dividend, stock split, combination of shares, recapitalization, merger, consolidation, separation or reorganization or any other change in the capital structure of the Company shall be subject to the same restrictions as the RSUs covered by this Agreement.
|
(b)
|
The Grantee shall have the right to receive dividend equivalents with respect to the Common Shares underlying the RSUs on a deferred basis and contingent on vesting of the RSUs. Dividend equivalents on the RSUs covered by this Agreement shall be sequestered by the Company from and after the Date of Grant until the Distribution Date, whereupon such dividend equivalents shall be paid to the Grantee in the form of additional Common Shares to the extent such dividend equivalents are attributable to RSUs that have become nonforfeitable. To the extent that RSUs covered by this Agreement are forfeited pursuant to Section 7 hereof, all the dividend equivalents sequestered with respect to such RSUs shall also be forfeited. No interest shall be payable with respect to any such dividend equivalents. Any fraction of a Common Share shall be paid in cash at the Distribution Date.
|
(c)
|
Under no circumstances, will the Company distribute dividend equivalents paid on RSUs until the Grantee's Distribution Date. The Grantee will not be entitled to vote the Common Shares underlying the RSUs until after the Distribution Date.
|
(d)
|
Notwithstanding anything to the contrary in this Section 10, to the extent that any of the RSUs vest pursuant to this Agreement and the Grantee elects pursuant to Section 9 to defer receipt of the Common Shares underlying the RSUs beyond such vesting date in accordance with the terms of the Deferred Compensation Plan, then the right to receive dividend equivalents thereafter will be governed by the Deferred Compensation Plan from and after such vesting date.
|
11.
|
Withholding Taxes
. No later than the date as of which an amount first becomes includible in the gross income of the Grantee for applicable income tax purposes with respect to the RSUs awarded under this Agreement, the Grantee shall pay to the Company, or make arrangements satisfactory to the Committee regarding the payment of, any Federal, state local or foreign taxes of any kind required by law to be withheld with respect to such amount. Unless otherwise determined by the Committee, the minimum required withholding obligations may be settled with Common Shares, including Common Shares that are payable to Grantee upon vesting of RSUs under this Agreement. The obligations of the Company under this Agreement shall be conditional on such payment or
|
12.
|
No Right to Employment
. This award of RSUs is a voluntary, discretionary bonus being made on a one-time basis and it does not constitute a commitment to make any future awards. This award and any payments made hereunder will not be considered salary or other compensation for purposes of any severance pay or similar allowance, except as otherwise required by law. The Plan and this Agreement will not confer upon the Grantee any right with respect to the continuance of employment or other service with the Company or any Subsidiary and will not interfere in any way with any right that the Company or any Subsidiary would otherwise have to terminate any employment or other service of the Grantee at any time. For purposes of this Agreement, the continuous employ of the Grantee with the Company or a Subsidiary shall not be deemed interrupted, and the Grantee shall not be deemed to have ceased to be an employee of the Company or any Subsidiary, by reason of (A) the transfer of his or her employment among the Company and any Subsidiary or (B) an approved leave of absence.
|
13.
|
Relation to Other Benefits
. Any economic or other benefit to the Grantee under this Agreement or the Plan will not be taken into account in determining any benefits to which the Grantee may be entitled under any profit-sharing, retirement or other benefit or compensation plan maintained by the Company or a Subsidiary and will not affect the amount of any life insurance coverage available to any beneficiary under any life insurance plan covering employees of the Company or a Subsidiary.
|
14.
|
Agreement Subject to the Plan
. The RSUs granted under this Agreement and all of the terms and conditions hereof are subject to all of the terms and conditions of the Plan. In the event of any inconsistency between this Agreement and the Plan, the terms of the Plan will govern.
|
15.
|
Data Privacy
. Information about the Grantee and the Grantee's participation in the Plan may be collected, recorded and held, used and disclosed for any purpose related to the administration of the Plan. The Grantee understands that such processing of this information may need to be carried out by the Company or any Subsidiary and by third party administrators whether such persons are located within the Grantee's country or elsewhere, including the United States of America. The Grantee consents to the processing of information relating to the Grantee and the Grantee's participation in the Plan in any one or more of the ways referred to above.
|
16.
|
Amendments
. Any amendment to the Plan shall be deemed to be an amendment to this Agreement to the extent that the amendment is applicable hereto;
provided
,
however
, that no amendment shall adversely affect the rights of the Grantee with respect to RSUs without the Grantee's consent.
|
17.
|
Severability
. In the event that one or more of the provisions of this Agreement shall be invalidated for any reason by a court of competent jurisdiction, any provision so invalidated will be deemed to be separable from the other provisions hereof, and the remaining provisions hereof will continue to be valid and fully enforceable.
|
18.
|
Governing Law/Venue
. This Agreement is made under, and will be construed in accordance with, the internal substantive laws of the State of Ohio. All legal actions or proceedings relating to this Agreement shall be brought exclusively in the U.S. District Court for the Northern District of Ohio, Eastern Division or the Cuyahoga County Court of Common Pleas, located in Cuyahoga County, Ohio.
|
19.
|
Employment Agreement
. The grant of the RSUs under this Agreement is contingent upon the Grantee having executed the most recent version of the Company's Employment Agreement and having returned it to the Company.
|
20.
|
RSUs Subject to the Company's Recovery of Funds Policy
. Notwithstanding anything in this Agreement to the contrary, the RSUs covered by this Agreement shall be subject to the Company's Recovery of Funds Policy, as it may be in effect from time to time, including, without limitation, the
|
21.
|
Code Section 409A
. To the extent applicable, it is intended that this Agreement be designed and operated within the requirements of Section 409A of the Code (including any applicable exemptions) and, in the event of any inconsistency between any provision of this Agreement or the Plan and Section 409A of the Code, the provisions of Section 409A of the Code shall control. Any provision in the Plan or this Agreement that is determined to violate the requirements of Section 409A of the Code shall be void and without effect until amended to comply with Section 409A of the Code (which amendment may be retroactive to the extent permitted by Section 409A of the Code and may be made by the Company without the consent of the Grantee). Any provision that is required by Section 409A of the Code to appear in the Agreement that is not expressly set forth herein shall be deemed to be set forth herein, and the Agreement shall be administered in all respects as if such provision was expressly set forth herein. Any reference in the Agreement to Section 409A of the Code or a Treasury Regulation Section shall be deemed to include any similar or successor provisions thereto.
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22.
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Counterparts
. T
his Agreement may be executed in one or more counterparts, all of which together shall constitute but one Agreement.
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Date
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«Full»
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LINCOLN ELECTRIC HOLDINGS, INC.
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Christopher L. Mapes
Chairman, President and Chief Executive
Officer
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Name
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Country of
Incorporation
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A. B. Arriendos S.A.
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Chile
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Arc Products, Inc.
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United States
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Burlington Automation Corporation
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Canada
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Electro-Arco S.A.
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Portugal
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Harris Calorific GmbH
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Germany
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Harris Calorific International Sp. z o.o.
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Poland
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Harris Calorific S.r.l.
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Italy
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Harris Euro S.L.
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Spain
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Harris Soldas Especiais S.A.
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Brazil
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Inversiones LyL S.A.
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Chile
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J.W. Harris Co., Inc.
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United States
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Jinzhou Zheng Tai Welding and Metal Co., Ltd.
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China
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Kaliburn, Inc.
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United States
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Kaynak Teknigi Sanayi ve Ticaret A.S.
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Turkey
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Lincoln Canada Finance ULC
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Canada
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Lincoln Electric Bester Sp. z o.o.
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Poland
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Lincoln Electric Company of Canada LP
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Canada
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Lincoln Electric Company (India) Private Limited
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India
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Lincoln Electric Cutting Systems, Inc.
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United States
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Lincoln Electric do Brasil Industria e Comercio Ltda.
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Brazil
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Lincoln Electric Europe B.V.
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The Netherlands
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Lincoln Electric Europe, S.L.
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Spain
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Lincoln Electric France S.A.S.
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France
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Lincoln Electric Heli (Zhengzhou) Welding Materials Company Ltd.
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China
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Lincoln Electric Holdings S.ar.l.
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Luxembourg
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Lincoln Electric Iberia, S.L.
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Spain
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Lincoln Electric International Holding Company
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United States
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Lincoln Electric Italia S.r.l.
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Italy
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Lincoln Electric Japan K.K.
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Japan
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Lincoln Electric (Jinzhou) Welding Materials Co., Ltd.
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China
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Lincoln Electric Luxembourg S.ar.l.
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Luxembourg
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Lincoln Electric Management (Shanghai) Co., Ltd.
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China
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Lincoln Electric Manufactura, S.A. de C.V.
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Mexico
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Lincoln Electric Maquinas, S. de R.L. de C.V.
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Mexico
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Lincoln Electric Mexicana, S.A. de C.V.
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Mexico
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Lincoln Electric Middle East FZE
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United Arab Emirates
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Lincoln Electric North America, Inc.
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United States
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Name
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Country of
Incorporation
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Lincoln Electric S.A.
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Argentina
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Lincoln Electric (Tangshan) Welding Materials Co., Ltd.
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China
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Lincoln Electric (U.K.) Ltd.
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United Kingdom
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Lincoln Global Holdings LLC
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United States
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Lincoln Global, Inc.
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United States
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Lincoln Smitweld B.V.
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The Netherlands
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Lincoln Soldaduras de Colombia Ltda.
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Colombia
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Lincoln Soldaduras de Venezuela C.A.
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Venezuela
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Metrode Products Limited
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United Kingdom
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OAO Mezhgosmetiz – Mtsensk
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Russia
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OOO Torgovyi Dom Mezhgosmetiz
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Russia
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OOO Severstal – metiz: Welding Consumables
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Russia
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PT Lincoln Electric Indonesia
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Indonesia
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Robolution GmbH
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Germany
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Smart Force, LLC
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United States
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Techalloy, Inc.
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United States
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Tennessee Rand, Inc.
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United States
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Tenwell Development Pte. Ltd.
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Singapore
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The Lincoln Electric Company
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United States
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The Lincoln Electric Company (Asia Pacific) Pte. Ltd.
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Singapore
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The Lincoln Electric Company (Australia) Proprietary Limited
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Australia
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The Lincoln Electric Company (New Zealand) Limited
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New Zealand
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The Lincoln Electric Company of South Africa (Pty) Ltd.
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South Africa
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The Nanjing Lincoln Electric Co., Ltd.
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China
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The Shanghai Lincoln Electric Co., Ltd.
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China
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Uhrhan & Schwill Schweisstechnik GmbH
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Germany
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Wayne Trail Technologies, Inc.
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United States
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Weartech International, Inc.
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United States
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Weartech International Limited
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United Kingdom
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Welding, Cutting, Tools & Accessories, LLC
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United States
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/s/ Christopher L. Mapes
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/s/ Harold L. Adams
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/s/ Curtis E. Espeland
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Christopher L. Mapes, Director
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Harold L. Adams, Director
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Curtis E. Espeland, Director
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February 21, 2014
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February 21, 2014
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February 21, 2014
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/s/ David H. Gunning
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/s/ Stephen G. Hanks
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/s/ Robert J. Knoll
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David H. Gunning, Director
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Stephen G. Hanks, Director
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Robert J. Knoll, Director
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February 21, 2014
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February 21, 2014
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February 21, 2014
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/s/ G. Russell Lincoln
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/s/ Kathryn Jo Lincoln
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/s/ William E. MacDonald, III
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G. Russell Lincoln, Director
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Kathryn Jo Lincoln, Director
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William E. MacDonald, III, Director
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February 21, 2014
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February 21, 2014
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February 21, 2014
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/s/ Phillip J. Mason
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/s/ Hellene S. Runtagh
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/s/ George H. Walls, Jr.
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Phillip J. Mason, Director
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Hellene S. Runtagh, Director
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George H. Walls, Jr., Director
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February 21, 2014
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February 21, 2014
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February 21, 2014
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1.
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I have reviewed this annual report on Form 10-K of Lincoln Electric Holdings, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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Date: February 21, 2014
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/s/ Christopher L. Mapes
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Christopher L. Mapes
President and Chief Executive Officer
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1.
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I have reviewed this annual report on Form 10-K of Lincoln Electric Holdings, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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Date: February 21, 2014
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/s/ Vincent K. Petrella
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Vincent K. Petrella
Senior Vice President, Chief Financial
Officer and Treasurer
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.
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Date: February 21, 2014
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/s/ Christopher L. Mapes
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Christopher L. Mapes
President and Chief Executive Officer
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/s/ Vincent K. Petrella
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Vincent K. Petrella
Senior Vice President, Chief Financial
Officer and Treasurer
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