SEGMENT INFORMATION

9 Months Ended

Sep. 30, 2022

SEGMENT INFORMATION

SEGMENT INFORMATION

NOTE 5 — SEGMENT INFORMATION

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:

					The Harris
	Americas		International		Products		Corporate /
	Welding		Welding		Group		Eliminations		Consolidated
Three Months Ended September 30, 2022
Net sales	$	585,628	$	216,497	$	133,115	$	—	$	935,240
Inter-segment sales		35,353		9,994		2,642		(47,989)		—
Total	$	620,981	$	226,491	$	135,757	$	(47,989)	$	935,240
Adjusted EBIT	$	118,804	$	25,225	$	14,432	$	(1,685)	$	156,776
Special items charge (gain) (1)		(353)		8,364		—		3,068		11,079
EBIT	$	119,157	$	16,861	$	14,432	$	(4,753)	$	145,697
Interest income										376
Interest expense										(8,586)
Income before income taxes									$	137,487
Three Months Ended September 30, 2021
Net sales	$	461,508	$	227,165	$	117,781	$	—	$	806,454
Inter-segment sales		37,480		7,078		1,945		(46,503)		—
Total	$	498,988	$	234,243	$	119,726	$	(46,503)	$	806,454
Adjusted EBIT	$	84,557	$	29,032	$	15,980	$	(4,704)	$	124,865
Special items charge (gain) (3)		73,574		6,615		547		—		80,736
EBIT	$	10,983	$	22,417	$	15,433	$	(4,704)	$	44,129
Interest income										333
Interest expense										(6,047)
Income before income taxes									$	38,415
Nine Months Ended September 30, 2022
Net sales	$	1,715,342	$	711,167	$	403,768	$	—	$	2,830,277
Inter-segment sales		92,540		25,749		8,570		(126,859)		—
Total	$	1,807,882	$	736,916	$	412,338	$	(126,859)	$	2,830,277
Adjusted EBIT	$	348,439	$	97,321	$	51,952	$	(10,470)	$	487,242
Special items charge (gain) (2)		(3,627)		9,865		—		3,068		9,306
EBIT	$	352,066	$	87,456	$	51,952	$	(13,538)	$	477,936
Interest income										980
Interest expense										(21,847)
Income before income taxes									$	457,069
Nine Months Ended September 30, 2021
Net sales	$	1,344,218	$	702,596	$	343,115	$	—	$	2,389,929
Inter-segment sales		109,993		18,260		6,376		(134,629)		—
Total	$	1,454,211	$	720,856	$	349,491	$	(134,629)	$	2,389,929
Adjusted EBIT	$	245,308	$	77,845	$	52,889	$	(10,048)	$	365,994
Special items charge (gain) (3)		79,664		13,695		547		1,923		95,829
EBIT	$	165,644	$	64,150	$	52,342	$	(11,971)	$	270,165
Interest income										1,185
Interest expense										(17,921)
Income before income taxes									$	253,429

(1) In the three months ended September 30, 2022, special items exclude an adjustment to the amortization of the step up in value of acquired inventories of $353 in Americas Welding, Rationalization and asset impairment charges of $8,364 in International Welding as discussed in Note 6 and acquisition transaction costs of $3,068 in Corporate/Eliminations related to the contemplated acquisition discussed in Note 18.

(2) In the nine months ended September 30, 2022, special items exclude a favorable adjustment related to the termination of a pension plan of $3,735, the amortization of the step up in value of acquired inventories of $1,106 and Rationalization and asset impairment net gains of $998 in Americas Welding, Rationalization and

asset impairment charges of $10,403 in International Welding as discussed in Note 6 and acquisition costs transaction costs of $3,086 in Corporate/Eliminations related to the contemplated acquisition discussed in Note 18.

(3) In the three and nine months ended September 30, 2021, special items reflect Rationalization and asset impairment charges of $3,484 and $8,277, respectively, primarily in International Welding, amortization of the step up in value of acquired inventories of $3,690 and $5,531, respectively, related to the acquisitions of Zeman in International Welding and FTP in The Harris Products Group, pension settlement charges of $73,562 and $79,652, respectively, in Americas Welding and $446 in International Welding in the nine months ended September 30, 2021. Also in the nine months ended September 30, 2021, special items reflect acquisition transaction costs of $1,923 in Corporate/Eliminations related to acquisitions as discussed in Note 4.