SEGMENT INFORMATION

9 Months Ended

Sep. 30, 2020

The Company's business units are aligned into three operating segments. The operating segments consist of Americas Welding, International Welding and The Harris Products Group. The Americas Welding segment includes welding operations in North and South America. The International Welding segment includes welding operations in Europe, Africa, Asia and Australia. The Harris Products Group includes the Company’s global oxy-fuel cutting, soldering and brazing businesses as well as its retail business in the United States.

Segment performance is measured and resources are allocated based on a number of factors, the primary measure being the adjusted earnings before interest and income taxes (“Adjusted EBIT”) profit measure. EBIT is defined as Operating income plus Other income (expense). EBIT is adjusted for special items as determined by management such as the impact of rationalization activities, certain asset impairment charges and gains or losses on disposals of assets.

The following table presents Adjusted EBIT by segment:


	Americas Welding		International Welding		The Harris Products Group		Corporate / Eliminations		Consolidated
Three Months Ended September 30, 2020
Net sales	$	371,535	$	196,937	$	100,416	$	—	$	668,888
Inter-segment sales	29,368		4,898		1,898		(36,164)		—
Total	$	400,903	$	201,835	$	102,314	$	(36,164)	$	668,888

Adjusted EBIT	$	59,120	$	13,432	$	17,587	$	(1,839)	$	88,300
Special items charge (gain) ⁽¹⁾	7,044		2,401		—		—		9,445
EBIT	$	52,076	$	11,031	$	17,587	$	(1,839)	$	78,855
Interest income									293
Interest expense									(5,845)
Income before income taxes									$	73,303
Three Months Ended September 30, 2019
Net sales	$	443,521	$	205,378	$	81,884	$	—	$	730,783
Inter-segment sales	31,101		4,441		1,857		(37,399)		—
Total	$	474,622	$	209,819	$	83,741	$	(37,399)	$	730,783

Adjusted EBIT	$	74,110	$	10,184	$	11,038	$	(1,632)	$	93,700
Special items charge (gain) ⁽²⁾	—		(4,497)		—		—		(4,497)
EBIT	$	74,110	$	14,681	$	11,038	$	(1,632)	$	98,197
Interest income									491
Interest expense									(6,891)
Income before income taxes									$	91,797
Nine Months Ended September 30, 2020
Net sales	$	1,123,299	$	572,027	$	266,280	$	—	$	1,961,606
Inter-segment sales	81,644		13,667		5,376		(100,687)		—
Total	$	1,204,943	$	585,694	$	271,656	$	(100,687)	$	1,961,606

Adjusted EBIT	$	176,524	$	29,729	$	41,792	$	(4,902)	$	243,143
Special items charge (gain) ⁽¹⁾	34,241		9,103		—		—		43,344
EBIT	$	142,283	$	20,626	$	41,792	$	(4,902)	$	199,799
Interest income									1,576
Interest expense									(18,467)
Income before income taxes									$	182,908
Nine Months Ended September 30, 2019
Net sales	$	1,377,847	$	635,770	$	253,348	$	—	$	2,266,965
Inter-segment sales	95,300		12,838		5,837		(113,975)		—
Total	$	1,473,147	$	648,608	$	259,185	$	(113,975)	$	2,266,965

Adjusted EBIT	$	240,713	$	38,699	$	35,045	$	(8,643)	$	305,814
Special items charge (gain) ⁽²⁾	3,115		(4,925)		—		1,804		(6)
EBIT	$	237,598	$	43,624	$	35,045	$	(10,447)	$	305,820
Interest income									2,047
Interest expense									(19,668)
Income before income taxes									$	288,199

(1)In the three months ended September 30, 2020, special items reflect Rationalization and asset impairment charges of $3,856 and $2,401 in Americas Welding and International Welding, respectively, and pension settlement charges of $3,188 in Americas Welding. In the nine months ended September 30, 2020, special items reflect Rationalization and asset impairment charges of $27,719 and $8,297 in Americas Welding and International Welding, respectively, amortization of step up in value of acquired inventories of $806 related to an acquisition in International Welding and pension settlement charges of $6,522 in Americas Welding.

(2)In the three months ended September 30, 2019, special items reflect Rationalization and asset impairment charges $1,495, amortization of step up in value of acquired inventories of $1,609 related to the acquisition of Askaynak and a gain on change in control of $7,601 related to the acquisition of Askaynak in International Welding. In the nine months ended September 30, 2019, special items reflect Rationalization and asset impairment charges of $1,716 and $4,621 in Americas Welding and International Welding, respectively, amortization of step up in value of acquired inventories of $1,399 in Americas Welding and $1,609 related to the acquisition of Askaynak in International Welding, gains on disposals of assets of $3,554 in International Welding and acquisition transaction and integration costs of $1,804 in Corporate / Eliminations related to the Air Liquide Welding acquisition and a gain on change in control of $7,601 related to the acquisition of Askaynak in International Welding.