BARNES GROUP INC, 10-Q filed on 4/29/2013
Quarterly Report
Document and Entity Information
3 Months Ended
Mar. 31, 2013
Apr. 24, 2013
Document and Entity Information [Abstract]
 
 
Document Type
10-Q 
 
Amendment Flag
false 
 
Document Period End Date
Mar. 31, 2013 
 
Document Fiscal Year Focus
2013 
 
Document Fiscal Period Focus
Q1 
 
Entity Registrant Name
BARNES GROUP INC 
 
Entity Central Index Key
0000009984 
 
Current Fiscal Year End Date
--12-31 
 
Entity Filer Category
Large Accelerated Filer 
 
Entity Common Stock, Shares Outstanding
 
53,745,549 
Consolidated Statements of Income (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Income Statement [Abstract]
 
 
Net sales
$ 263,545 
$ 222,795 
Cost of sales
177,715 
160,421 
Selling and administrative expenses
60,875 
37,756 
Total operating costs and expenses
238,590 
198,177 
Operating income
24,955 
24,618 
Interest expense
4,357 
2,368 
Other expense (income), net
966 
859 
Income from continuing operations before income taxes
19,632 
21,391 
Income taxes
4,199 
3,801 
Income from continuing operations
15,433 
17,590 
(Loss) income from discontinued operations, net of income taxes of $183 and $3,004 respectively (Note 2)
(1,961)
4,617 
Net income
$ 13,472 
$ 22,207 
Basic:
 
 
Income from continuing operations (in dollars per share)
$ 0.29 
$ 0.33 
(Loss) income from discontinued operations, net of income taxes (in dollars per share)
$ (0.04)
$ 0.08 
Net income (in dollars per share)
$ 0.25 
$ 0.41 
Diluted:
 
 
Income from continuing operations (in dollars per share)
$ 0.28 
$ 0.32 
(Loss) income from discontinued operations, net of income taxes (in dollars per share)
$ (0.04)
$ 0.08 
Net income (in dollars per share)
$ 0.24 
$ 0.40 
Dividends (in dollars per share)
$ 0.10 
$ 0.10 
Weighted average common shares outstanding:
 
 
Basic (in shares)
54,739,465 
54,805,636 
Diluted (in shares)
55,524,560 
55,455,579 
Consolidated Statements of Income (Parenthetical) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Income Statement [Abstract]
 
 
(Loss) income from discontinued operations, tax
$ 183 
$ 3,004 
Consolidated Statements of Comprehensive Income (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Statement of Income and Comprehensive Income [Abstract]
 
 
Net income
$ 13,472 
$ 22,207 
Other comprehensive (loss) income, net of tax
 
 
Unrealized gain on hedging activities, net of tax (1)
427 1
236 1
Foreign currency translation adjustments, net of tax (2)
(14,505)2
14,709 2
Defined benefit pension and other postretirement benefits, net of tax (3)
2,410 3
1,205 3
Total other comprehensive (loss) income, net of tax
(11,668)
16,150 
Total comprehensive income
1,804 
38,357 
Unrealized gain on hedging activities, tax
188 
84 
Foreign currency translation adjustment, tax
(101)
717 
Defined benefit pension and other postretirement benefits, tax
$ 2,838 
$ 1,017 
Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2013
Dec. 31, 2012
Current assets
 
 
Cash and cash equivalents
$ 99,872 
$ 86,356 
Accounts receivable, less allowances (2013 - $2,050; 2012 - $2,858)
226,744 
253,202 
Inventories
179,142 
226,220 
Deferred income taxes
12,968 
33,906 
Assets held for sale
241,311 
Prepaid expenses and other current assets
17,682 
18,856 
Total current assets
777,719 
618,540 
Deferred income taxes
46,955 
29,961 
Property, plant and equipment
581,964 
634,464 
Less accumulated depreciation
(368,124)
(401,367)
Property, plant and equipment, net
213,840 
233,097 
Goodwill
439,240 
579,905 
Other intangible assets, net
375,663 
383,972 
Other assets
22,191 
23,121 
Total assets
1,875,608 
1,868,596 
Current liabilities
 
 
Notes and overdrafts payable
12,539 
3,795 
Accounts payable
85,227 
99,037 
Accrued liabilities
72,786 
96,364 
Liabilities held for sale
23,809 
Long-term debt - current
53,781 
699 
Total current liabilities
248,142 
199,895 
Long-term debt
604,370 
642,119 
Accrued retirement benefits
158,455 
159,103 
Deferred income taxes
47,809 
48,707 
Other liabilities
18,437 
18,654 
Commitments and contingencies (Note 14)
   
   
Stockholders' equity
 
 
Common stock - par value $0.01 per share Authorized: 150,000,000 shares Issued: at par value (2013 - 59,489,205 shares; 2012 - 59,202,029 shares)
595 
592 
Additional paid-in capital
348,158 
332,588 
Treasury stock, at cost (2013 - 5,497,079 shares; 2012 - 4,999,556 shares)
(113,333)
(99,756)
Retained earnings
641,395 
633,446 
Accumulated other non-owner changes to equity
(78,420)
(66,752)
Total stockholders' equity
798,395 
800,118 
Total liabilities and stockholders' equity
$ 1,875,608 
$ 1,868,596 
Consolidated Balance Sheets (Parenthetical) (USD $)
In Thousands, except Share data, unless otherwise specified
Mar. 31, 2013
Dec. 31, 2012
Allowance for doubtful accounts
$ 2,050 
$ 2,858 
Common stock, par value (in dollars per share)
$ 0.01 
$ 0.01 
Common stock, shares authorized (in shares)
150,000,000 
150,000,000 
Common stock, shares issued (in shares)
59,489,205 
59,202,029 
Treasury stock, at cost (in shares)
5,497,079 
4,999,556 
Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Operating activities:
 
 
Net income
$ 13,472 
$ 22,207 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
Depreciation and amortization
16,499 
13,063 
Amortization of convertible debt discount
582 
537 
Gain on disposition of property, plant and equipment
(54)
(97)
Stock compensation expense
12,657 
2,100 
Withholding taxes paid on stock issuances
(720)
(683)
Loss on the sale of businesses
767 
Changes in assets and liabilities:
 
 
Accounts receivable
(16,347)
(1,512)
Inventories
(968)
1,091 
Prepaid expenses and other current assets
(235)
(2,272)
Accounts payable
7,144 
(672)
Accrued liabilities
(16,679)
(29,379)
Deferred income taxes
485 
3,852 
Long-term retirement benefits
801 
(2,708)
Other
1,020 
25 
Net cash provided by operating activities
17,657 
6,319 
Investing activities:
 
 
Proceeds from disposition of property, plant and equipment
44 
135 
Payments related to the sale of businesses, net
(363)
Capital expenditures
(10,050)
(7,281)
Other
(1,420)
(1,418)
Net cash used by investing activities
(11,426)
(8,927)
Financing activities:
 
 
Net change in other borrowings
8,737 
(6,688)
Payments on long-term debt
(6,245)
(13,135)
Proceeds from the issuance of long-term debt
21,000 
49,000 
Proceeds from the issuance of common stock
2,677 
3,324 
Common stock repurchases
(12,856)
(11,141)
Dividends paid
(5,443)
(5,459)
Excess tax benefit on stock awards
506 
1,227 
Other
(53)
(65)
Net cash provided by financing activities
8,323 
17,063 
Effect of exchange rate changes on cash flows
(1,038)
529 
Increase in cash and cash equivalents
13,516 
14,984 
Cash and cash equivalents at beginning of period
86,356 
62,505 
Cash and cash equivalents at end of period
$ 99,872 
$ 77,489 
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies

The accompanying unaudited consolidated balance sheet and the related unaudited consolidated statements of income, comprehensive income and cash flows have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. The consolidated financial statements do not include all information and notes required by accounting principles generally accepted in the United States of America for complete financial statements. The balance sheet as of December 31, 2012 has been derived from the 2012 financial statements of Barnes Group Inc. (the “Company”). For additional information, please refer to the consolidated financial statements and notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2012. In the opinion of management, all adjustments, including normal recurring accruals considered necessary for a fair presentation, have been included. Operating results for the three-month period ended March 31, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. Certain reclassifications have been made to prior year amounts to conform to the current year presentation.

In the first quarter of 2013, the Company entered into a definitive agreement to sell its Barnes Distribution North America business ("BDNA") to MSC Industrial Direct Co., Inc. ("MSC") for $550,000, subject to certain working capital and post closing adjustments. All previously reported financial information has been adjusted on a retrospective basis to reflect BDNA results as discontinued operations in the consolidated statements of income. The Company classified the business as "held for sale" on the consolidated balance sheets as of March 31, 2013. The Company completed the sale of BDNA on April 22, 2013. See Note 2 and Note 16.

Additionally, in the first quarter of 2013, the Company changed its organizational structure to align its strategic business units into two reportable business segments: Aerospace and Industrial. The Company has transferred the Associated Spring Raymond business ("Raymond"), its remaining business within the former Distribution segment, to the Industrial segment. Raymond sells, among other products, springs that are manufactured by one of the Industrial businesses. All previously reported financial information has been adjusted on a retrospective basis to reflect the segment realignment. See Note 13.

In the third quarter of 2012, the Company completed its acquisition of Synventive Molding Solutions. The acquisition has been integrated into the Industrial segment. See Note 3.
Discontinued Operations
Discontinued Operations
Discontinued Operations
 
Barnes Distribution Europe

On December 30, 2011, the Company sold substantially all of the assets of its Barnes Distribution Europe ("BDE") business to Berner SE (the "Purchaser") in a cash transaction pursuant to the terms of a Share and Asset Purchase Agreement ("SPA") among the Company, the Purchaser, and their respective relevant subsidiaries. The Company received gross proceeds of $33,358, which represented the initial stated purchase price, and yielded net cash proceeds of $22,492 after consideration of cash sold, transaction costs paid and closing adjustments. The final amount of proceeds from the sale of the BDE business was subject to post-closing adjustments that were reflected in discontinued operations in periods subsequent to the disposition. The loss from operations of discontinued businesses for the quarter ended March 31, 2013 includes a final settlement to a retained liability related to BDE.

As required by the terms of the SPA, the Company was required to place €9,000 of the proceeds in escrow to be used for any settlement of general representation and warranty claims. Absent a breach of warranty claim, the funds would be released from escrow on August 31, 2012 unless there were any then pending claims. Cash related to a pending claim would remain in escrow until a final determination of the claim had been made. On August 17, 2012, the Purchaser provided a notice of breach of various warranties to the Company.  The Company rejected the Purchaser's notice and demanded release of the full escrow effective August 31, 2012.  The Purchaser refused to release the full escrow, and only €3,900 plus interest was released whereas €5,100 ($6,537 at March 31, 2013) plus interest remains in escrow. The Company objected to the retention of the escrow and expects to prevail in this matter. The Company has recorded the restricted cash in other assets at March 31, 2013 and December 31, 2012.



Barnes Distribution North America

On February 22, 2013, the Company and MSC entered into an Asset Purchase Agreement ("APA") pursuant to which MSC would acquire BDNA. The APA provided that MSC would pay the Company $550,000 as consideration for the acquisition of BDNA, subject to certain working capital and post closing adjustments. In the first quarter of 2013, the Company classified the business as "held for sale". The results of BDNA have been segregated and presented as discontinued operations in the consolidated statements of income. The Company completed the sale of BDNA on April 22, 2013.

The following amounts related to BDE and BDNA were derived from historical financial information. The amounts have been segregated from continuing operations and reported as discontinued operations within the consolidated financial statements:

 
Three months ended March 31,
 
2013
 
2012
Net sales
$
75,821

 
$
80,301

(Loss) income before income taxes
(1,778
)
 
8,401

Income tax expense
183

 
3,017

(Loss) income from operations of discontinued businesses, net of income taxes
(1,961
)
 
5,384

Loss on transaction

 
(780
)
Income tax benefit on loss on sale

 
13

Loss on the sale of businesses

 
(767
)
(Loss) income from discontinued operations, net of income taxes
$
(1,961
)
 
$
4,617



The BDNA assets and liabilities held for sale will be sold or otherwise disposed of and are comprised of the following:
Assets
 
Accounts receivable, less allowance of $801
$
38,752

Inventories
47,408

Prepaid expenses and other current assets
2,179

Property, plant and equipment, net
17,861

Goodwill
134,715

Other assets
396

     Assets held for sale
$
241,311

 
 
Liabilities
 
Accounts payable
$
20,676

Accrued liabilities
2,964

Accrued retirement benefits
66

Other liabilities
103

     Liabilities held for sale
$
23,809

Acquisition
Acquisition
Acquisition

During 2012, the Company completed the acquisition of Synventive Molding Solutions (“Synventive”) by acquiring all of the issued and outstanding shares of capital stock of Synventive Acquisition Inc., a Delaware corporation. The following table reflects the unaudited pro forma operating results of the Company for the three months ended March 31, 2012, which gives effect to the acquisition of Synventive as if it had occurred on January 1, 2011. The pro forma results are based on assumptions that the Company believes are reasonable under the circumstances. The pro forma results are not necessarily indicative of the operating results that would have occurred had the acquisition been effective January 1, 2011, nor are they intended to be indicative of results that may occur in the future. The underlying pro forma information includes the historical financial results of the Company and Synventive adjusted for certain items including depreciation and amortization expense associated with the assets acquired and the Company’s expense related to financing arrangements, with the related tax effects. The pro forma information does not include the effects of any synergies or cost reduction initiatives related to the acquisition.
 
(Unaudited Pro Forma)
Three months ended March 31, 2012
Net sales
$
262,120

Income from continuing operations
18,897

Net income
23,514

 
 
Per common share:
 
Basic:
 
     Income from continuing operations
$
0.35

     Net income
$
0.43

Diluted:
 
     Income from continuing operations
$
0.34

     Net income
$
0.42

Net Income Per Common Share
Net Income Per Common Share
Net Income Per Common Share

For the purpose of computing diluted income from continuing operations and net income per common share, the weighted-average number of common shares outstanding is increased for the potential dilutive effects of stock-based incentive plans and convertible senior subordinated notes. For the purpose of computing diluted income from continuing operations and net income per common share, the weighted-average number of common shares was increased by 785,095 and 649,943 for the three-month periods ended March 31, 2013 and 2012, respectively, to account for the potential dilutive effect of stock-based incentive plans. There were no adjustments to income from continuing operations or net income for the purposes of computing income available to common stockholders for those periods.

The calculation of weighted-average diluted shares outstanding excludes all shares that would have been anti-dilutive. During the three month periods ended March 31, 2013 and 2012, the Company excluded 366,349 and 307,113 stock options, respectively, from the calculation of weighted average diluted shares outstanding as the stock options would have been anti-dilutive.

The Company granted 130,600 stock options, 161,295 restricted stock unit awards and 135,055 performance share awards in February 2013 as part of its annual grant awards. All of the stock options and the restricted stock unit awards vest upon meeting certain service conditions. The restricted stock unit awards are included in basic average common shares outstanding as they contain nonforfeitable rights to dividend payments. The performance share awards are part of a long-term Relative Measure program, which is designed to assess the Company's performance relative to the performance of companies included in the Russell 2000 Index over the three-year term of the program ending December 31, 2015. The performance goals are independent of each other and based on three metrics: the Company's total shareholder return ("TSR"), basic earnings per share growth and operating income before depreciation and amortization growth (weighted equally). The participants can earn from zero to 250% of the target award and the award includes a forfeitable right to dividend equivalents, which are not included in the aggregate target award numbers. The fair value of the TSR portion of the performance share awards was determined using a Monte Carlo valuation method as the award contains a market condition.

In the first quarter of 2013, the Board of Directors of the Company approved a Transition and Resignation Agreement (the "Agreement") for its former Chief Executive Officer (“Former CEO”) in connection with his resignation of the CEO role and his assumption of a Vice Chairman role. The Agreement provides that, in exchange for the Former CEO's delivery of an effective release of claims, his adherence to certain restrictive covenants, and the successful provision of transition services, including with regard to certain equity grants, the successful sale of the Barnes Distribution North America business, the Former CEO's outstanding equity awards are modified to increase the post-termination exercise period for stock options until the earlier of ten years from the date of grant or five years from the retirement date and made non-forfeitable all outstanding stock options, restricted stock units awards and performance share awards that remained unvested on the day of his agreed to resignation date from the company.  The original vesting dates of the equity awards serve as the delivery dates and the performance metrics continue to apply to the performance share awards. The Company recorded $10,492 of stock compensation expense in the first quarter of 2013 as a result of the modifications.

The 3.375% convertible senior subordinated notes due in March 2027 (the “Notes”) are convertible, under certain circumstances, into a combination of cash and common stock of the Company. The conversion price as of March 31, 2013 was approximately $28.31 per share of common stock. The dilutive effect of the Notes is determined based on the average closing price of the Company's stock for the last 30 trading days of the quarter as compared to the conversion price of the Notes. Under the net share settlement method, there were no potential shares issuable under the Notes as the Notes would have been anti-dilutive for the three-month periods ended March 31, 2013 and 2012.
Inventories
Inventories
Inventories

The components of inventories consisted of:
 
March 31, 2013
 
December 31, 2012
Finished goods
$
73,974

 
$
126,139

Work-in-process
61,495

 
56,186

Raw material and supplies
43,673

 
43,895

 
$
179,142

 
$
226,220


As of March 31, 2013, BDNA held inventories of $47,408 which is included in assets held for sale in the accompanying consolidated balance sheet as of March 31, 2013. See Note 2.
Goodwill and Other Intangible Assets
Goodwill and Other Intangible Assets
Goodwill and Other Intangible Assets

Goodwill:
The following table sets forth the change in the carrying amount of goodwill for each reportable segment and for the Company as of and for the period ended March 31, 2013:
 
Aerospace
 
Industrial
 
Other
 
Total Company
January 1, 2013
$
30,786

 
$
414,244

 
$
134,875

 
$
579,905

Transfer to assets held for sale

 

 
(134,715
)
 
(134,715
)
Foreign currency translation

 
(5,790
)
 
(160
)
 
(5,950
)
March 31, 2013
$
30,786

 
$
408,454

 
$

 
$
439,240



In the first quarter of 2013, the Company realigned its reportable business segments by transferring the Associated Spring Raymond business ("Raymond"), its remaining business within the former Distribution segment, to the Industrial segment. The goodwill related to BDNA ("BDNA goodwill"), also a business within the former Distribution segment, was $134,875 at December 31, 2012. At March 31, 2013, the BDNA goodwill was included within assets held for sale on the consolidated balance sheet. See Note 2. The BDNA and Raymond businesses represent individual reporting units as of December 31, 2012 and March 31, 2013.















Other Intangible Assets:
Other intangible assets consisted of:
 
 
 
March 31, 2013
 
December 31, 2012
 
Range of
Life -Years
 
Gross Amount
 
Accumulated Amortization
 
Gross Amount
 
Accumulated Amortization
Amortized intangible assets:
 
 
 
 
 
 
 
 
 
Revenue sharing programs (RSPs)
Up to 30
 
$
293,700

 
$
(57,313
)
 
$
293,700

 
$
(54,638
)
Customer lists/relationships
10-15
 
91,306

 
(12,088
)
 
102,806

 
(21,727
)
Patents and technology
7-14
 
41,972

 
(9,261
)
 
41,972

 
(7,758
)
Trademarks/trade names
5-30
 
11,950

 
(6,930
)
 
12,750

 
(7,497
)
Other
Up to 15
 
12,692

 
(7,202
)
 
12,692

 
(6,927
)
 
 
 
451,620

 
(92,794
)
 
463,920

 
(98,547
)
Unamortized intangible asset:
 
 
 
 
 
 
 
 
 
Trade name
 
 
10,000

 


 
10,000

 


 
 
 
 
 
 
 
 
 
 
Foreign currency translation
 
 
6,837

 

 
8,599

 

Other intangible assets
 
 
$
468,457

 
$
(92,794
)
 
$
482,519

 
$
(98,547
)

Gross amounts of $11,500 and $800 that were included within customer lists and trademarks, respectively, at December 31, 2012, were related to BDNA, and are therefore classified within assets held for sale as of March 31, 2013. The gross amounts were fully amortized at March 31, 2013.
Estimated amortization of intangible assets for future periods is as follows: 2013 - $24,000 ; 2014 - $24,000; 2015 - $24,000; 2016 - $23,000 and 2017 - $24,000.
Debt
Debt
Debt

The Company's debt agreements contain financial covenants that require the maintenance of interest coverage and leverage ratios. The Company is in compliance with its debt covenants as of March 31, 2013, and closely monitors its future compliance based on current and anticipated future economic conditions.

Long-term debt and notes and overdrafts payable at March 31, 2013 and December 31, 2012 consisted of:
 
 
March 31, 2013
 
December 31, 2012
 
 
Carrying
Amount
 
Fair
Value
 
Carrying
Amount
 
Fair
Value
3.375% Convertible Notes
 
$
55,636

 
$
61,240

 
$
55,636

 
$
57,977

Unamortized debt discount – 3.375% Convertible Notes
 
(2,540
)
 

 
(3,122
)
 

Revolving credit agreement
 
604,100

 
614,965

 
589,200

 
599,172

Borrowings under lines of credit and overdrafts
 
12,095

 
12,095

 
3,380

 
3,380

Foreign bank borrowings
 
810

 
812

 
945

 
947

Other
 
589

 
587

 
574

 
574

 
 
670,690

 
689,699

 
646,613

 
662,050

Less current maturities
 
(66,320
)
 
 
 
(4,494
)
 
 
Long-term debt
 
$
604,370

 
 
 
$
642,119

 
 


The 3.375% Convertible Notes are subject to redemption at their par value at any time, at the option of the Company, on or after March 20, 2014. The note holders may also require the Company to redeem some or all of the notes at their par value on March 15th of 2014, 2017 and 2022. As such, the balance of these Notes of $53,096 ($55,636 par value) and the related deferred tax balances are classified as current in the accompanying balance sheet as of March 31, 2013. The 3.375% Convertible Notes are also eligible for conversion upon meeting certain conditions as provided in the indenture agreement. The eligibility for conversion is determined quarterly. During the first quarter of 2013, the 3.375% Convertible Notes were not eligible for conversion. During the second quarter of 2013, the 3.375% Convertible Notes will not be eligible for conversion. The fair value of the Notes was determined using quoted market prices that represent Level 2 observable inputs.

The Company maintains an amended and restated revolving credit agreement (the "Credit Agreement") with Bank of America, N.A. as the administrative agent. The $750,000 Credit Agreement matures in September 2016. Borrowings under the Credit Agreement bear interest at LIBOR plus a spread ranging from 1.10% to 1.70%. The fair value of the borrowings is based on observable Level 2 inputs using discounted cash flows based upon the Company's estimated interest costs for similar types of borrowings.

In addition, the Company has available approximately $15,000 in uncommitted short-term bank credit lines ("Credit Lines"), of which $11,200 was borrowed at March 31, 2013 at an interest rate of 2.16% and $2,800 was borrowed at December 31, 2012 at an interest rate of 2.16%. The Company had also borrowed $895 and $580 under overdraft facilities at March 31, 2013 and December 31, 2012, respectively. Repayments under the Credit Lines are due within 7 days after being borrowed. Repayments of the overdrafts are generally due within 2 days after being borrowed. The carrying amounts of the Credit Lines and overdrafts approximate fair value due to the short maturities of these financial instruments.

The Company also has foreign bank borrowings. The fair value of the foreign bank borrowings are based on observable Level 2 inputs. These instruments are valued using discounted cash flows based upon the Company's estimated interest costs for similar types of borrowings.

Other debt consists primarily of bank acceptances which are used to pay certain vendors. Bank acceptances represent financial instruments accepted by certain Chinese vendors in lieu of cash paid on receivables, generally range from 3 to 6 months in maturity and are guaranteed by banks. The fair value of the bank acceptances are based on observable Level 2 inputs and their carrying amounts approximate fair value due to their short maturities.
Derivatives
Derivatives
Derivatives

The Company has manufacturing, sales and distribution facilities around the world and thus makes investments and conducts business transactions denominated in various currencies. The Company is also exposed to fluctuations in interest rates and commodity price changes. These financial exposures are monitored and managed by the Company as an integral part of its risk management program.

Financial instruments have been used by the Company to hedge its exposure to fluctuations in interest rates. In April 2012, the Company entered into five-year interest rate swap agreements transacted with three banks which together convert the interest on the first $100,000 of the Company's one-month LIBOR-based borrowings from a variable rate plus the borrowing spread to a fixed rate of 1.03% plus the borrowing spread. These interest rate swap agreements were accounted for as cash flow hedges.

The Company also uses financial instruments to hedge its exposures to fluctuations in foreign currency exchange rates. The Company has various contracts outstanding which primarily hedge recognized assets or liabilities, and anticipated transactions in various currencies including the British pound sterling, U.S. dollar, Euro, Singapore dollar, Swedish kroner and Swiss franc. Certain foreign currency derivative instruments are treated as cash flow hedges of forecasted transactions.  All foreign exchange contracts are due within two years.

The Company does not use derivatives for speculative or trading purposes or to manage commodity exposures.

Changes in the fair market value of derivatives that qualify as fair value hedges or cash flow hedges are recorded directly to earnings or accumulated other non-owner changes to equity, depending on the designation. Amounts recorded to accumulated other non-owner changes to equity are reclassified to earnings in a manner that matches the earnings impact of the hedged transaction. Any ineffective portion, or amounts related to contracts that are not designated as hedges, are recorded directly to earnings.

The following table sets forth the fair value amounts of derivative instruments held by the Company.
 
March 31, 2013
 
December 31, 2012
 
Asset Derivatives
 
Liability Derivatives
 
Asset Derivatives
 
Liability Derivatives
Derivatives designated as hedging instruments:
 
 
 
 
 
 
 
Interest rate contracts
$

 
$
(1,551
)
 
$

 
$
(1,818
)
Foreign exchange contracts
1,293

 

 
945

 

 
 
 
 
 
 
 
 
Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
Foreign exchange contracts
35

 
(1,609
)
 
2,370

 
(152
)
Total derivatives
$
1,328

 
$
(3,160
)
 
$
3,315

 
$
(1,970
)

Asset derivatives are recorded in prepaid expenses and other current assets in the accompanying consolidated balance sheets. Liability derivatives related to interest rate contracts and foreign exchange contracts are recorded in other liabilities and accrued liabilities, respectively, in the accompanying consolidated balance sheets.

The following table sets forth the gain, net of tax, recorded in accumulated other non-owner changes to equity for the three-month periods ended March 31, 2013 and 2012 for derivatives held by the Company and designated as hedging instruments.
 
Three months ended March 31,
 
2013
 
2012
Cash flow hedges:
 
 
 
Interest rate contracts
$
156

 
$

Foreign exchange contracts
271

 
236

 
$
427

 
$
236


Amounts included within accumulated other non-owner changes to equity that were reclassified to expense during the first three months of 2013 related to the interest rate swaps resulted in a fixed rate of interest of 1.03% plus the borrowing spread for the first $100,000 of one-month LIBOR borrowings. The amounts reclassified for the foreign exchange contracts were not material in any period presented. Additionally, there were no amounts recognized in income for hedge ineffectiveness during the three months ended March 31, 2013 and 2012.

The following table sets forth the (losses) gains recorded in other expense (income), net in the consolidated statements of income for the three month periods ended March 31, 2013 and 2012 for non-designated derivatives held by the Company. Such amounts were substantially offset by gains (losses) recorded on the underlying hedged asset or liability.
 
Three months ended March 31,
 
2013
 
2012
Foreign exchange contracts
$
(3,906
)
 
$
1,057

Fair Value Measurements
Fair Value Measurements
Fair Value Measurements

The provisions of the accounting standard for fair value define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This standard classifies the inputs used to measure fair value into the following hierarchy:

Level 1
Unadjusted quoted prices in active markets for identical assets or liabilities

Level 2
Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability

Level 3
Unobservable inputs for the asset or liability

The following table provides the financial assets and financial liabilities reported at fair value and measured on a recurring basis:
 
 
 
Fair Value Measurements Using
Description
Total
 
Quoted Prices in Active Markets for
Identical Assets
(Level 1)
 
Significant Other Observable Inputs
(Level 2)
 
Significant Unobservable Inputs
(Level 3)
March 31, 2013
 
 
 
 
 
 
 
Asset derivatives
$
1,328

 
$

 
$
1,328

 
$

Liability derivatives
(3,160
)
 

 
(3,160
)
 

Bank acceptances
3,151

 

 
3,151

 

Rabbi trust assets
1,896

 
1,896

 

 

 
$
3,215

 
$
1,896

 
$
1,319

 
$

 
 
 
 
 
 
 
 
December 31, 2012
 
 
 
 
 
 
 
Asset derivatives
$
3,315

 
$

 
$
3,315

 
$

Liability derivatives
(1,970
)
 

 
(1,970
)
 

Bank acceptances
3,441

 

 
3,441

 

Rabbi trust assets
1,831

 
1,831

 

 

 
$
6,617

 
$
1,831

 
$
4,786

 
$



The derivative contracts are valued using observable current market information as of the reporting date such as the prevailing LIBOR-based and U.S. treasury interest rates and foreign currency spot and forward rates. Bank acceptances represent financial instruments accepted from certain Chinese customers in lieu of cash paid on receivables, generally range from 3 to 6 months in maturity and are guaranteed by banks. The carrying amounts of the bank acceptances, which are included within prepaid expenses and other current assets, approximate fair value due to their short maturities. The fair values of rabbi trust assets are based on quoted market prices from various financial exchanges.
Pension and Other Postretirement Benefits
Pension and Other Postretirement Benefits
Pension and Other Postretirement Benefits

Pension and other postretirement benefits expenses consisted of the following:
 
Three months ended March 31,
Pensions
2013
 
2012
Service cost
$
1,984

 
$
1,613

Interest cost
4,987

 
5,322

Expected return on plan assets
(8,276
)
 
(8,033
)
Amortization of prior service cost
203

 
211

Recognized losses
4,075

 
2,759

Curtailment loss
199

 

Net periodic benefit cost
$
3,172

 
$
1,872

 
 
 
 
 
Three months ended March 31,
Other Postretirement Benefits
2013
 
2012
Service cost
$
77

 
$
77

Interest cost
543

 
680

Amortization of prior service credit
(395
)
 
(396
)
Recognized losses
290

 
286

Net periodic benefit cost
$
515

 
$
647



The curtailment loss during the first quarter of 2013 relates to the defined benefit pension plans that were impacted by the planned sale of BDNA. The Company also expects that its defined benefit pension and other post retirement benefit plans may be impacted by curtailments and settlements related to the sale of BDNA during the second quarter of 2013. See Note 2.

The Company contributes to a multi-employer defined benefit pension plan under the terms of a collective bargaining agreement. This multi-employer plan provides pension benefits to certain union-represented employees at BDNA. The Company has determined that a withdrawal from this multi-employer plan, following its entry into a definitive agreement to sell BDNA, is probable. The Company has estimated that its assessment of a withdrawal liability, on a pre-tax discounted basis, is $2,788. The expense has been recorded within discontinued operations.
Income Taxes
Income Taxes
Income Taxes

The Company's effective tax rate from continuing operations for the first quarter of 2013 was 21.4% compared with 17.8% in the first quarter of 2012 and 13.5% for the full year 2012. The increase in the first quarter 2013 effective tax rate from the full year 2012 rate of 13.5% is due to the absence of the 2012 reversal of certain foreign valuation allowances and tax rate decreases in certain foreign jurisdictions, the increase in the Company's Swedish effective tax rate and the projected change in the mix of earnings attributable to higher-taxing jurisdictions or jurisdictions where losses cannot be benefited in 2013.

The Company was previously awarded a number of multi-year Pioneer tax status certificates (the "certificates") by the Ministry of Trade and Industry in Singapore. No certificates are scheduled to expire in 2013.
Changes in Accumulated Other Comprehensive Income by Component
Changes in Accumulated Other Comprehensive Income by Component
Changes in Accumulated Other Comprehensive Income by Component

The following table sets forth the changes in accumulated other comprehensive income by component for the period ended March 31, 2013:
 
Gains and Losses on Cash Flow Hedges
 
Pension and Other Postretirement Benefit Items
 
Foreign Currency Items
 
Total
January 1, 2013
$
(432
)
 
$
(146,441
)
 
$
80,121

 
$
(66,752
)
Other comprehensive income before reclassifications to consolidated statements of income
525

 
(388
)
 
(14,505
)
 
(14,368
)
Amounts reclassified from accumulated other comprehensive income to the consolidated statements of income
(98
)
 
2,798

 

 
2,700

Net current-period other comprehensive income
427

 
2,410

 
(14,505
)
 
(11,668
)
March 31, 2013
$
(5
)
 
$
(144,031
)
 
$
65,616

 
$
(78,420
)























The following table sets forth the reclassifications out of accumulated other comprehensive income by component for the period ended March 31, 2013:
Details about Accumulated Other Comprehensive Income Components
 
Amount Reclassified from Accumulated Other Comprehensive Income
 
Affected Line Item in the Consolidated Statements of Income
Gains and losses on cash flow hedges
 
 
 

     Interest rate contracts
 
$
(199
)
 
Interest expense
     Foreign exchange contracts
 
284

 
Net sales
 
 
85

 
Total before tax
 
 
13

 
Tax benefit
 
 
$
98

 
Net of tax
 
 
 
 
 
Pension and other postretirement benefit items
 
 
 
 
     Amortization of prior-service credits
 
$
192

 
(A)
Amortization of actuarial losses
 
(4,365
)
 
(A)
Curtailment
 
(199
)
 
(A)
 
 
(4,372
)
 
Total before tax
 
 
1,574

 
Tax benefit
 
 
(2,798
)
 
Net of tax
Total reclassifications in the period
 
$
(2,700
)
 
 


(A) These accumulated other comprehensive income components are included within the computation of net periodic pension cost. See Note 10.
Information on Business Segments
Information on Business Segments
Information on Business Segments

The Company is organized based upon the nature of its products and services. Segment information is consistent with how management reviews the businesses, makes investing and resource allocation decisions and assesses operating performance. The Company has not aggregated operating segments for purposes of identifying reportable segments.

In the first quarter of 2013, the Company changed its organizational structure to align its strategic business units into two reportable segments: Aerospace and Industrial. The Company has transferred the Associated Spring Raymond business ("Raymond"), its remaining business within the former Distribution segment, to the Industrial segment. Raymond sells, among other products, springs that are manufactured by one of the Industrial businesses. All previously reported financial information has been adjusted on a retrospective basis to reflect the segment realignment.

The Aerospace segment produces precision-machined and fabricated components and assemblies for original equipment manufacturers (“OEM”) of commercial jet engines, airframes and industrial gas turbines throughout the world, and for the military. Aerospace also provides jet engine component overhaul and repair services for many of the world's major jet engine manufacturers, commercial airlines and the military. In addition, Aerospace manufactures and provides aerospace aftermarket spare parts. The Industrial segment is a global supplier of high quality manufactured precision components for critical applications, and a leading designer and manufacturer of highly engineered and customized hot runner systems and components, serving diverse industrial end-markets such as transportation, energy, electronics, medical devices and consumer products. The Industrial segment also participates in the design, assembly and distribution of engineered supplies for the global industrial base.

The following tables, adjusted on a retrospective basis to reflect the segment alignment, set forth information about the Company's operations by its two reportable segments:
 
Three months ended March 31,
 
2013
 
2012
Net sales
 
 
 
   Aerospace
$
98,045

 
$
97,250

   Industrial
165,502

 
125,545

   Intersegment sales
(2
)
 

Total net sales
$
263,545

 
$
222,795

 
 
 
 
Operating profit
 
 
 
   Aerospace
$
10,346

 
$
12,654

   Industrial
14,609

 
11,964

Total operating profit
24,955

 
24,618

   Interest expense
4,357

 
2,368

   Other expense (income), net
966

 
859

Income from continuing operations before income taxes
$
19,632

 
$
21,391



 
March 31, 2013
 
December 31, 2012
Assets
 
 
 
   Aerospace
$
531,920

 
$
533,465

   Industrial
907,505

 
907,124

   Other (A)
436,183

 
428,007

Total assets
$
1,875,608

 
$
1,868,596


(A) "Other" assets include corporate-controlled assets, the majority of which are cash and deferred tax assets, as well as the assets of BDNA which are classified as held for sale in the accompanying consolidated balance sheet as of March 31, 2013. See Note 2.
Commitments and Contingencies
Commitments and Contingencies
Commitments and Contingencies

Product Warranties

The Company provides product warranties in connection with the sale of certain products. From time to time, the Company is subject to customer claims with respect to product warranties. Product warranty liabilities were not material as of March 31, 2013 and December 31, 2012.

The Company was named in a lawsuit arising out of an alleged breach of contract and implied warranty by a customer of Toolcom Suppliers Limited (“Toolcom”), a business previously included within the former Logistics and Manufacturing Services segment, related to the sale of certain products prior to the Company’s 2005 acquisition of Toolcom. In 2006, the plaintiff filed the lawsuit in civil court in Scotland and asserted that certain products sold were not fit for a particular use. The Company settled the lawsuit during the first quarter of 2013 with an outcome that did not have a material effect on the consolidated financial statements. The final settlement expense is included within the loss from operations of discontinued businesses in the consolidated statements of income for the quarter ended March 31, 2013.

Income Taxes

On April 16, 2013, the United States Tax Court rendered an unfavorable decision in the matter Barnes Group Inc. and Subsidiaries v. Commissioner of Internal Revenue (“April 2013 Tax Court Decision”). The Tax Court rejected the Company's objections and imposed penalties. The case involved IRS proposed adjustments of approximately $16,500, plus a 20% penalty and interest for the tax years 1998, 2000 and 2001. The proposed IRS cash tax assessment (after utilization of a portion of the Company's existing net operating losses) is estimated to be approximately $13,000 including penalties and interest.

The case arose out of an Internal Revenue Service (“IRS”) audit for the tax years 2000 through 2002. The adjustment relates to the federal taxation of foreign income of certain foreign subsidiaries. The Company filed an administrative protest of these adjustments.  In the third quarter of 2009, the Company was informed that its protest was denied and a tax assessment was received from the Appeals Office of the IRS.  Subsequently, in November 2009, the Company filed a petition against the IRS in the United States Tax Court, contesting the tax assessment. A trial was held and all briefs were filed in 2012. In April 2013 the Tax Court Decision was then issued rendering an unfavorable decision against the Company and imposing penalties.

The Company expects the Tax Court to enter an order reflecting the tax assessment, interest and penalties due (“Court Approved Assessment”) in the second quarter 2013. Following entry of that order, both parties have 90 days to decide whether or not to appeal the April 2013 Tax Court Decision. At the end of the 90 day period, or earlier if an appeal is filed by the Company, the Court Approved Assessment becomes due. 

The Company continues to believe that its tax position is correct and the Company is evaluating its options including an appeal of the decision. The April Tax Court Decision is not expected to have a material effect on the Company's consolidated financial position, but could be material to both the consolidated results of operations and cash flows in any one period. The Company now expects the cash flows to be negatively impacted by approximately $13,000 in the third quarter of 2013 in connection with the Court Approved Assessment. In addition, in the second quarter of 2013, following the Company's evaluation, the Company could record an income tax charge of up to approximately $20,000 and a reduction in its deferred tax assets to reflect the utilization of a portion of the Company's net operating loss carryforwards.
Accounting Changes
Accounting Changes
Accounting Changes
In February 2013, the Financial Accounting Standards Board amended its guidance related to the presentation of other comprehensive income. The amended guidance requires that companies present information related to reclassification adjustments from accumulated other comprehensive income in their consolidated financial statements within a single note or on the face of the financial statements. The Company has adopted the provisions of the amended accounting standard within Note 12.
Subsequent Event
Subsequent Event
Subsequent Event

On April 22, 2013, the Company completed the previously announced sale of BDNA to MSC pursuant to the terms of the Asset Purchase Agreement dated February 22, 2013 (the "APA") between the Company and MSC. Pursuant to the terms of the APA, the total cash consideration paid for BDNA was approximately $550,000, subject to certain working capital and post closing adjustments set forth in the APA. The after-tax proceeds and net gain on sale from the transaction are expected to be approximately $400,000 and $200,000, respectively. Taxes will be payable during 2013. The Credit Facility does not require that the Company use the proceeds from the sale of BDNA to reduce its outstanding borrowings. The Company will utilize a portion of the proceeds to reduce debt, repurchase common shares, invest in profitable growth initiatives including potential acquisitions, and for general corporate purposes. In April 2013, the Company initially utilized approximately $480,000 to reduce borrowings under the Credit Facility.

On April 16, 2013, the United States Tax Court rendered an unfavorable decision in a case against the Company. See Note 14.
Discontinued Operations (Tables)
Schedule of Disposal Groups, Including Discontinued Operations
The following amounts related to BDE and BDNA were derived from historical financial information. The amounts have been segregated from continuing operations and reported as discontinued operations within the consolidated financial statements:

 
Three months ended March 31,
 
2013
 
2012
Net sales
$
75,821

 
$
80,301

(Loss) income before income taxes
(1,778
)
 
8,401

Income tax expense
183

 
3,017

(Loss) income from operations of discontinued businesses, net of income taxes
(1,961
)
 
5,384

Loss on transaction

 
(780
)
Income tax benefit on loss on sale

 
13

Loss on the sale of businesses

 
(767
)
(Loss) income from discontinued operations, net of income taxes
$
(1,961
)
 
$
4,617



The BDNA assets and liabilities held for sale will be sold or otherwise disposed of and are comprised of the following:
Assets
 
Accounts receivable, less allowance of $801
$
38,752

Inventories
47,408

Prepaid expenses and other current assets
2,179

Property, plant and equipment, net
17,861

Goodwill
134,715

Other assets
396

     Assets held for sale
$
241,311

 
 
Liabilities
 
Accounts payable
$
20,676

Accrued liabilities
2,964

Accrued retirement benefits
66

Other liabilities
103

     Liabilities held for sale
$
23,809

Acquisition (Tables)
Schedule of Unaudited Pro Forma Operating Results
The following table reflects the unaudited pro forma operating results of the Company for the three months ended March 31, 2012, which gives effect to the acquisition of Synventive as if it had occurred on January 1, 2011. The pro forma results are based on assumptions that the Company believes are reasonable under the circumstances. The pro forma results are not necessarily indicative of the operating results that would have occurred had the acquisition been effective January 1, 2011, nor are they intended to be indicative of results that may occur in the future. The underlying pro forma information includes the historical financial results of the Company and Synventive adjusted for certain items including depreciation and amortization expense associated with the assets acquired and the Company’s expense related to financing arrangements, with the related tax effects. The pro forma information does not include the effects of any synergies or cost reduction initiatives related to the acquisition.
 
(Unaudited Pro Forma)
Three months ended March 31, 2012
Net sales
$
262,120

Income from continuing operations
18,897

Net income
23,514

 
 
Per common share:
 
Basic:
 
     Income from continuing operations
$
0.35

     Net income
$
0.43

Diluted:
 
     Income from continuing operations
$
0.34

     Net income
$
0.42



Inventories (Tables)
Schedule of Inventory
The components of inventories consisted of:
 
March 31, 2013
 
December 31, 2012
Finished goods
$
73,974

 
$
126,139

Work-in-process
61,495

 
56,186

Raw material and supplies
43,673

 
43,895

 
$
179,142

 
$
226,220

Goodwill and Other Intangible Assets (Tables)
The following table sets forth the change in the carrying amount of goodwill for each reportable segment and for the Company as of and for the period ended March 31, 2013:
 
Aerospace
 
Industrial
 
Other
 
Total Company
January 1, 2013
$
30,786

 
$
414,244

 
$
134,875

 
$
579,905

Transfer to assets held for sale

 

 
(134,715
)
 
(134,715
)
Foreign currency translation

 
(5,790
)
 
(160
)
 
(5,950
)
March 31, 2013
$
30,786

 
$
408,454

 
$

 
$
439,240

Other intangible assets consisted of:
 
 
 
March 31, 2013
 
December 31, 2012
 
Range of
Life -Years
 
Gross Amount
 
Accumulated Amortization
 
Gross Amount
 
Accumulated Amortization
Amortized intangible assets:
 
 
 
 
 
 
 
 
 
Revenue sharing programs (RSPs)
Up to 30
 
$
293,700

 
$
(57,313
)
 
$
293,700

 
$
(54,638
)
Customer lists/relationships
10-15
 
91,306

 
(12,088
)
 
102,806

 
(21,727
)
Patents and technology
7-14
 
41,972

 
(9,261
)
 
41,972

 
(7,758
)
Trademarks/trade names
5-30
 
11,950

 
(6,930
)
 
12,750

 
(7,497
)
Other
Up to 15
 
12,692

 
(7,202
)
 
12,692

 
(6,927
)
 
 
 
451,620

 
(92,794
)
 
463,920

 
(98,547
)
Unamortized intangible asset:
 
 
 
 
 
 
 
 
 
Trade name
 
 
10,000

 


 
10,000

 


 
 
 
 
 
 
 
 
 
 
Foreign currency translation
 
 
6,837

 

 
8,599

 

Other intangible assets
 
 
$
468,457

 
$
(92,794
)
 
$
482,519

 
$
(98,547
)
Debt (Tables)
Schedule of Debt
Long-term debt and notes and overdrafts payable at March 31, 2013 and December 31, 2012 consisted of:
 
 
March 31, 2013
 
December 31, 2012
 
 
Carrying
Amount
 
Fair
Value
 
Carrying
Amount
 
Fair
Value
3.375% Convertible Notes
 
$
55,636

 
$
61,240

 
$
55,636

 
$
57,977

Unamortized debt discount – 3.375% Convertible Notes
 
(2,540
)
 

 
(3,122
)
 

Revolving credit agreement
 
604,100

 
614,965

 
589,200

 
599,172

Borrowings under lines of credit and overdrafts
 
12,095

 
12,095

 
3,380

 
3,380

Foreign bank borrowings
 
810

 
812

 
945

 
947

Other
 
589

 
587

 
574

 
574

 
 
670,690

 
689,699

 
646,613

 
662,050

Less current maturities
 
(66,320
)
 
 
 
(4,494
)
 
 
Long-term debt
 
$
604,370

 
 
 
$
642,119

 
 
Derivatives (Tables)
The following table sets forth the (losses) gains recorded in other expense (income), net in the consolidated statements of income for the three month periods ended March 31, 2013 and 2012 for non-designated derivatives held by the Company. Such amounts were substantially offset by gains (losses) recorded on the underlying hedged asset or liability.
 
Three months ended March 31,
 
2013
 
2012
Foreign exchange contracts
$
(3,906
)
 
$
1,057

The following table sets forth the fair value amounts of derivative instruments held by the Company.
 
March 31, 2013
 
December 31, 2012
 
Asset Derivatives
 
Liability Derivatives
 
Asset Derivatives
 
Liability Derivatives
Derivatives designated as hedging instruments:
 
 
 
 
 
 
 
Interest rate contracts
$

 
$
(1,551
)
 
$

 
$
(1,818
)
Foreign exchange contracts
1,293

 

 
945

 

 
 
 
 
 
 
 
 
Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
Foreign exchange contracts
35

 
(1,609
)
 
2,370

 
(152
)
Total derivatives
$
1,328

 
$
(3,160
)
 
$
3,315

 
$
(1,970
)

Asset derivatives are recorded in prepaid expenses and other current assets in the accompanying consolidated balance sheets. Liability derivatives related to interest rate contracts and foreign exchange contracts are recorded in other liabilities and accrued liabilities, respectively, in the accompanying consolidated balance sheets.

The following table sets forth the gain, net of tax, recorded in accumulated other non-owner changes to equity for the three-month periods ended March 31, 2013 and 2012 for derivatives held by the Company and designated as hedging instruments.
 
Three months ended March 31,
 
2013
 
2012
Cash flow hedges:
 
 
 
Interest rate contracts
$
156

 
$

Foreign exchange contracts
271

 
236

 
$
427

 
$
236


Amounts included within accumulated other non-owner changes to equity that were reclassified to expense during the first three months of 2013 related to the interest rate swaps resulted in a fixed rate of interest of 1.03% plus the borrowing spread for the first $100,000 of one-month LIBOR borrowings. The amounts reclassified for the foreign exchange contracts were not material in any period presented. Additionally, there were no amounts recognized in income for hedge ineffectiveness during the three months ended March 31, 2013 and 2012.
Fair Value Measurements (Tables)
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis
The following table provides the financial assets and financial liabilities reported at fair value and measured on a recurring basis:
 
 
 
Fair Value Measurements Using
Description
Total
 
Quoted Prices in Active Markets for
Identical Assets
(Level 1)
 
Significant Other Observable Inputs
(Level 2)
 
Significant Unobservable Inputs
(Level 3)
March 31, 2013
 
 
 
 
 
 
 
Asset derivatives
$
1,328

 
$

 
$
1,328

 
$

Liability derivatives
(3,160
)
 

 
(3,160
)
 

Bank acceptances
3,151

 

 
3,151

 

Rabbi trust assets
1,896

 
1,896

 

 

 
$
3,215

 
$
1,896

 
$
1,319

 
$

 
 
 
 
 
 
 
 
December 31, 2012
 
 
 
 
 
 
 
Asset derivatives
$
3,315

 
$

 
$
3,315

 
$

Liability derivatives
(1,970
)
 

 
(1,970
)
 

Bank acceptances
3,441

 

 
3,441

 

Rabbi trust assets
1,831

 
1,831

 

 

 
$
6,617

 
$
1,831

 
$
4,786

 
$

Pension and Other Postretirement Benefits (Tables)
Schedule of Net Benefit Costs
Pension and other postretirement benefits expenses consisted of the following:
 
Three months ended March 31,
Pensions
2013
 
2012
Service cost
$
1,984

 
$
1,613

Interest cost
4,987

 
5,322

Expected return on plan assets
(8,276
)
 
(8,033
)
Amortization of prior service cost
203

 
211

Recognized losses
4,075

 
2,759

Curtailment loss
199

 

Net periodic benefit cost
$
3,172

 
$
1,872

 
 
 
 
 
Three months ended March 31,
Other Postretirement Benefits
2013
 
2012
Service cost
$
77

 
$
77

Interest cost
543

 
680

Amortization of prior service credit
(395
)
 
(396
)
Recognized losses
290

 
286

Net periodic benefit cost
$
515

 
$
647

Changes in Accumulated Other Comprehensive Income by Component (Tables)
The following table sets forth the changes in accumulated other comprehensive income by component for the period ended March 31, 2013:
 
Gains and Losses on Cash Flow Hedges
 
Pension and Other Postretirement Benefit Items
 
Foreign Currency Items
 
Total
January 1, 2013
$
(432
)
 
$
(146,441
)
 
$
80,121

 
$
(66,752
)
Other comprehensive income before reclassifications to consolidated statements of income
525

 
(388
)
 
(14,505
)
 
(14,368
)
Amounts reclassified from accumulated other comprehensive income to the consolidated statements of income
(98
)
 
2,798

 

 
2,700

Net current-period other comprehensive income
427

 
2,410

 
(14,505
)
 
(11,668
)
March 31, 2013
$
(5
)
 
$
(144,031
)
 
$
65,616

 
$
(78,420
)
The following table sets forth the reclassifications out of accumulated other comprehensive income by component for the period ended March 31, 2013:
Details about Accumulated Other Comprehensive Income Components
 
Amount Reclassified from Accumulated Other Comprehensive Income
 
Affected Line Item in the Consolidated Statements of Income
Gains and losses on cash flow hedges
 
 
 

     Interest rate contracts
 
$
(199
)
 
Interest expense
     Foreign exchange contracts
 
284

 
Net sales
 
 
85

 
Total before tax
 
 
13

 
Tax benefit
 
 
$
98

 
Net of tax
 
 
 
 
 
Pension and other postretirement benefit items
 
 
 
 
     Amortization of prior-service credits
 
$
192

 
(A)
Amortization of actuarial losses
 
(4,365
)
 
(A)
Curtailment
 
(199
)
 
(A)
 
 
(4,372
)
 
Total before tax
 
 
1,574

 
Tax benefit
 
 
(2,798
)
 
Net of tax
Total reclassifications in the period
 
$
(2,700
)
 
 
Information on Business Segments (Tables)
Schedule of Segment Reporting Information, by Segment
The following tables, adjusted on a retrospective basis to reflect the segment alignment, set forth information about the Company's operations by its two reportable segments:
 
Three months ended March 31,
 
2013
 
2012
Net sales
 
 
 
   Aerospace
$
98,045

 
$
97,250

   Industrial
165,502

 
125,545

   Intersegment sales
(2
)
 

Total net sales
$
263,545

 
$
222,795

 
 
 
 
Operating profit
 
 
 
   Aerospace
$
10,346

 
$
12,654

   Industrial
14,609

 
11,964

Total operating profit
24,955

 
24,618

   Interest expense
4,357

 
2,368

   Other expense (income), net
966

 
859

Income from continuing operations before income taxes
$
19,632

 
$
21,391



 
March 31, 2013
 
December 31, 2012
Assets
 
 
 
   Aerospace
$
531,920

 
$
533,465

   Industrial
907,505

 
907,124

   Other (A)
436,183

 
428,007

Total assets
$
1,875,608

 
$
1,868,596


(A) "Other" assets include corporate-controlled assets, the majority of which are cash and deferred tax assets, as well as the assets of BDNA which are classified as held for sale in the accompanying consolidated balance sheet as of March 31, 2013. See Note 2.
Summary of Significant Accounting Policies (Details) (USD $)
In Thousands, unless otherwise specified
0 Months Ended 3 Months Ended
Feb. 22, 2013
Mar. 31, 2013
Accounting Policies [Abstract]
 
 
Number of reportable segments (in segments)
 
Barnes Distribution North America [Member]
 
 
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
Proceeds from divestiture of businesses
$ 550,000 
$ 550,000 
Discontinued Operations (Details)
In Thousands, unless otherwise specified
3 Months Ended 0 Months Ended 9 Months Ended 0 Months Ended 3 Months Ended
Mar. 31, 2013
USD ($)
Mar. 31, 2012
USD ($)
Dec. 31, 2012
USD ($)
Dec. 30, 2011
Barnes Distribution Europe [Member]
USD ($)
Sep. 30, 2012
Barnes Distribution Europe [Member]
EUR (€)
Mar. 31, 2013
Barnes Distribution Europe [Member]
USD ($)
Mar. 31, 2013
Barnes Distribution Europe [Member]
EUR (€)
Dec. 30, 2011
Barnes Distribution Europe [Member]
EUR (€)
Feb. 22, 2013
Barnes Distribution North America [Member]
USD ($)
Mar. 31, 2013
Barnes Distribution North America [Member]
USD ($)
Mar. 31, 2013
Barnes Distribution Europe and Barnes Distribution North America [Member]
USD ($)
Mar. 31, 2012
Barnes Distribution Europe and Barnes Distribution North America [Member]
USD ($)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Proceeds from divestiture of businesses
 
 
 
$ 33,358 
 
 
 
 
$ 550,000 
$ 550,000 
 
 
Proceeds from the sale of businesses, net of cash sold
 
 
 
22,492 
 
 
 
 
 
 
 
 
Proceeds in escrow
 
 
 
 
 
6,537 
5,100 
9,000 
 
 
 
 
Decrease in restricted cash
 
 
 
 
(3,900)
 
 
 
 
 
 
 
Net sales
 
 
 
 
 
 
 
 
 
 
75,821 
80,301 
(Loss) income before income taxes
 
 
 
 
 
 
 
 
 
 
(1,778)
8,401 
Income tax expense
 
 
 
 
 
 
 
 
 
 
183 
3,017 
(Loss) income from operations of discontinued businesses, net of income taxes
 
 
 
 
 
 
 
 
 
 
(1,961)
5,384 
Loss on transaction
 
 
 
 
 
 
 
 
 
 
(780)
Income tax benefit on loss on sale
 
 
 
 
 
 
 
 
 
 
13 
Loss on the sale of businesses
 
 
 
 
 
 
 
 
 
 
(767)
(Loss) income from discontinued operations, net of income taxes
(1,961)
4,617 
 
 
 
 
 
 
 
 
(1,961)
4,617 
Assets
 
 
 
 
 
 
 
 
 
 
 
 
Accounts receivable, less allowance of $801
 
 
 
 
 
 
 
 
 
38,752 
 
 
Accounts receivable, allowance
 
 
 
 
 
 
 
 
 
801 
 
 
Inventories
 
 
 
 
 
 
 
 
 
47,408 
 
 
Prepaid expenses and other current assets
 
 
 
 
 
 
 
 
 
2,179 
 
 
Property, plant and equipment, net
 
 
 
 
 
 
 
 
 
17,861 
 
 
Goodwill
 
 
 
 
 
 
 
 
 
134,715 
 
 
Other assets
 
 
 
 
 
 
 
 
 
396 
 
 
Assets held for sale
241,311 
 
 
 
 
 
 
 
241,311 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
Accounts payable
 
 
 
 
 
 
 
 
 
20,676 
 
 
Accrued liabilities
 
 
 
 
 
 
 
 
 
2,964 
 
 
Accrued retirement benefits
 
 
 
 
 
 
 
 
 
66 
 
 
Other liabilities
 
 
 
 
 
 
 
 
 
103 
 
 
Liabilities held for sale
$ 23,809 
 
$ 0 
 
 
 
 
 
 
$ 23,809 
 
 
Acquisition (Details) (Synventive [Member], USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2012
Synventive [Member]
 
Business Acquisition [Line Items]
 
Net sales
$ 262,120 
Income from continuing operations
18,897 
Net income
$ 23,514 
Basic:
 
Income from continuing operations (in dollars per share)
$ 0.35 
Net income (in dollars per share)
$ 0.43 
Diluted:
 
Income from continuing operations (in dollars per share)
$ 0.34 
Net income (in dollars per share)
$ 0.42 
Net Income Per Common Share (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
1 Months Ended 3 Months Ended
Feb. 28, 2013
Mar. 31, 2013
Mar. 31, 2012
Net Income Per Common Share [Line Items]
 
 
 
Weighted average number of diluted shares outstanding adjustment (in shares)
 
785,095 
649,943 
Adjustments to net income for purposes of computing income available to common stockholders
 
$ 0 
$ 0 
Stock compensation expense
 
12,657 
2,100 
3.375% Convertible Notes [Member]
 
 
 
Net Income Per Common Share [Line Items]
 
 
 
Potential shares issuable under net share settlement method (in shares)
 
Convertible Debt [Member] |
3.375% Convertible Notes [Member]
 
 
 
Net Income Per Common Share [Line Items]
 
 
 
Convertible notes stated interest rate
 
3.375% 
 
Conversion price (in dollars per share)
 
$ 28.31 
 
Term used to compute average closing price of stock for dilutive effect comparison
 
30 days 
 
Stock Options [Member]
 
 
 
Net Income Per Common Share [Line Items]
 
 
 
Antidilutive securities excluded from computation of EPS
 
366,349 
307,113 
Options, granted (in shares)
130,600 
 
 
Exercise period of stock options from date of grant
 
10 years 
 
Exercise period of stock options from date of retirement
 
5 years 
 
Restricted Stock Units (RSUs) [Member]
 
 
 
Net Income Per Common Share [Line Items]
 
 
 
Other than options, granted (in shares)
161,295 
 
 
Performance Share Awards [Member]
 
 
 
Net Income Per Common Share [Line Items]
 
 
 
Other than options, granted (in shares)
135,055 
 
 
Award vesting period
 
3 years 
 
Minimum range of target award of stock plan
 
0.00% 
 
Maximum range of target award of stock plan
 
250.00% 
 
Equity Award Modification [Member]
 
 
 
Net Income Per Common Share [Line Items]
 
 
 
Stock compensation expense
 
$ 10,492 
 
Inventories (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2013
Dec. 31, 2012
Inventory Disclosure [Abstract]
 
 
Finished goods
$ 73,974 
$ 126,139 
Work-in-process
61,495 
56,186 
Raw material and supplies
43,673 
43,895 
Inventories
179,142 
226,220 
Barnes Distribution North America [Member]
 
 
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
Inventory held for sale
$ 47,408 
 
Goodwill and Other Intangible Assets (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Dec. 31, 2012
Goodwill:
 
 
Goodwill, beginning of period
$ 579,905 
 
Transfer to assets held for sale
(134,715)
 
Foreign currency translation
(5,950)
 
Goodwill, end of period
439,240 
 
Other Intangible Assets:
 
 
Finite Lived Intangible Assets Before Foreign Currency Translation Adjustment
451,620 
463,920 
Finite Lived Intangible Assets Foreign Currency Translation Adjustment
6,837 
8,599 
Accumulated Amortization
(92,794)
(98,547)
Gross Amount
468,457 
482,519 
Intangible Assets, Future Amortization Expense
 
 
Amortization of intangible assets expected in 2013
24,000 
 
Amortization of intangible assets expected in 2014
24,000 
 
Amortization of intangible assets expected in 2015
24,000 
 
Amortization of intangible assets expected in 2016
23,000 
 
Amortization of intangible assets expected in 2017
24,000 
 
Aerospace [Member]
 
 
Goodwill:
 
 
Goodwill, beginning of period
30,786 
 
Transfer to assets held for sale
 
Foreign currency translation
 
Goodwill, end of period
30,786 
 
Industrial [Member]
 
 
Goodwill:
 
 
Goodwill, beginning of period
414,244 
 
Transfer to assets held for sale
 
Foreign currency translation
(5,790)
 
Goodwill, end of period
408,454 
 
Other [Member]
 
 
Goodwill:
 
 
Goodwill, beginning of period
134,875 
 
Transfer to assets held for sale
(134,715)
 
Foreign currency translation
(160)
 
Goodwill, end of period
 
Revenue sharing programs (RSPs) [Member]
 
 
Other Intangible Assets:
 
 
Range of life - maximum (in years)
30 
 
Finite Lived Intangible Assets Before Foreign Currency Translation Adjustment
293,700 
293,700 
Accumulated Amortization
(57,313)
(54,638)
Customer lists/relationships [Member]
 
 
Other Intangible Assets:
 
 
Range of life - minimum (in years)
10 
 
Range of life - maximum (in years)
15 
 
Finite Lived Intangible Assets Before Foreign Currency Translation Adjustment
91,306 
102,806 
Accumulated Amortization
(12,088)
(21,727)
Patents and technology [Member]
 
 
Other Intangible Assets:
 
 
Range of life - minimum (in years)
 
Range of life - maximum (in years)
14 
 
Finite Lived Intangible Assets Before Foreign Currency Translation Adjustment
41,972 
41,972 
Accumulated Amortization
(9,261)
(7,758)
Trademarks/trade names [Member]
 
 
Other Intangible Assets:
 
 
Range of life - minimum (in years)
 
Range of life - maximum (in years)
30 
 
Finite Lived Intangible Assets Before Foreign Currency Translation Adjustment
11,950 
12,750 
Accumulated Amortization
(6,930)
(7,497)
Other [Member]
 
 
Other Intangible Assets:
 
 
Range of life - maximum (in years)
15 
 
Finite Lived Intangible Assets Before Foreign Currency Translation Adjustment
12,692 
12,692 
Accumulated Amortization
(7,202)
(6,927)
Unamoritized Trade name [Member]
 
 
Other Intangible Assets:
 
 
Finite Lived Intangible Assets Before Foreign Currency Translation Adjustment
10,000 
10,000 
Accumulated Amortization
   
   
Barnes Distribution North America [Member]
 
 
Goodwill:
 
 
Goodwill, beginning of period
 
134,875 
Goodwill, end of period
 
134,875 
Barnes Distribution North America [Member] |
Customer Lists [Member]
 
 
Other Intangible Assets:
 
 
Gross Amount
 
11,500 
Barnes Distribution North America [Member] |
Trademarks [Member]
 
 
Other Intangible Assets:
 
 
Gross Amount
 
$ 800 
Debt (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Dec. 31, 2012
Debt Instrument [Line Items]
 
 
Fair value of debt
$ 689,699 
$ 662,050 
Borrowings under lines of credit and overdrafts
12,539 
3,795 
Total debt, net of unamortized discounts
670,690 
646,613 
Less current maturities
(66,320)
(4,494)
Long-term debt
604,370 
642,119 
Convertible Debt [Member] |
3.375% Convertible Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Carrying amount of debt
55,636 
55,636 
Fair value of debt
61,240 
57,977 
Unamortized debt discount
(2,540)
(3,122)
Convertible notes stated interest rate
3.375% 
 
Convertible notes balance
53,096 
 
Revolving Credit Agreement [Member]
 
 
Debt Instrument [Line Items]
 
 
Carrying amount of debt
604,100 
589,200 
Fair value of debt
614,965 
599,172 
Line of credit facility, maximum borrowing capacity
750,000 
 
Lines of Credit and Overdrafts [Member]
 
 
Debt Instrument [Line Items]
 
 
Fair value of debt
12,095 
3,380 
Borrowings under lines of credit and overdrafts
12,095 
3,380 
Foreign Bank Borrowings [Member]
 
 
Debt Instrument [Line Items]
 
 
Carrying amount of debt
810 
945 
Fair value of debt
812 
947 
Other Debt Obligations [Member]
 
 
Debt Instrument [Line Items]
 
 
Carrying amount of debt
589 
574 
Fair value of debt
587 
574 
Lines of Credit [Member]
 
 
Debt Instrument [Line Items]
 
 
Borrowings under lines of credit and overdrafts
11,200 
2,800 
Line of credit facility, maximum borrowing capacity
15,000 
 
Line of credit, interest rate at period end
2.16% 
2.16% 
Repayment period
7 days 
 
Bank Overdrafts [Member]
 
 
Debt Instrument [Line Items]
 
 
Borrowings under lines of credit and overdrafts
$ 895 
$ 580 
Repayment period
2 days 
 
Minimum [Member]
 
 
Debt Instrument [Line Items]
 
 
Maturity of bank acceptances
3 months 
 
Minimum [Member] |
Revolving Credit Agreement [Member]
 
 
Debt Instrument [Line Items]
 
 
Debt instrument basis spread on LIBOR
1.10% 
 
Maximum [Member]
 
 
Debt Instrument [Line Items]
 
 
Maturity of bank acceptances
6 months 
 
Maximum [Member] |
Revolving Credit Agreement [Member]
 
 
Debt Instrument [Line Items]
 
 
Debt instrument basis spread on LIBOR
1.70% 
 
Derivatives (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2013
Dec. 31, 2012
Derivative Assets (Liabilities), at Fair Value, Net, by Balance Sheet Classification [Abstract]
 
 
Derivative Assets
$ 1,328 
$ 3,315 
Derivative Liabilities
(3,160)
(1,970)
Designated as Hedging Instrument [Member] |
Interest Rate Contracts [Member]
 
 
Derivative Assets (Liabilities), at Fair Value, Net, by Balance Sheet Classification [Abstract]
 
 
Derivative Assets
Derivative Liabilities
(1,551)
(1,818)
Designated as Hedging Instrument [Member] |
Foreign Exchange Contracts [Member]
 
 
Derivative Assets (Liabilities), at Fair Value, Net, by Balance Sheet Classification [Abstract]
 
 
Derivative Assets
1,293 
945 
Derivative Liabilities
Not Designated as Hedging Instrument [Member] |
Foreign Exchange Contracts [Member]
 
 
Derivative Assets (Liabilities), at Fair Value, Net, by Balance Sheet Classification [Abstract]
 
 
Derivative Assets
35 
2,370 
Derivative Liabilities
$ (1,609)
$ (152)
Derivatives (Details 1) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 1 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Mar. 31, 2013
Designated as Hedging Instrument [Member]
Cash Flow Hedging [Member]
Mar. 31, 2012
Designated as Hedging Instrument [Member]
Cash Flow Hedging [Member]
Mar. 31, 2013
Designated as Hedging Instrument [Member]
Cash Flow Hedging [Member]
Interest Rate Contracts [Member]
Mar. 31, 2012
Designated as Hedging Instrument [Member]
Cash Flow Hedging [Member]
Interest Rate Contracts [Member]
Mar. 31, 2013
Designated as Hedging Instrument [Member]
Cash Flow Hedging [Member]
Foreign Exchange Contracts [Member]
Mar. 31, 2012
Designated as Hedging Instrument [Member]
Cash Flow Hedging [Member]
Foreign Exchange Contracts [Member]
Mar. 31, 2013
Not Designated as Hedging Instrument [Member]
Foreign Exchange Contracts [Member]
Mar. 31, 2012
Not Designated as Hedging Instrument [Member]
Foreign Exchange Contracts [Member]
Apr. 30, 2012
Interest Rate Swap [Member]
Designated as Hedging Instrument [Member]
Cash Flow Hedging [Member]
Bank
Derivative [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Term of interest rate derivatives
 
 
 
 
 
 
 
 
 
 
5 years 
Number of banks transacted with for interest rate swap agreements (in banks)
 
 
 
 
 
 
 
 
 
 
Derivative amount of hedge
 
 
 
 
 
 
 
 
 
 
$ 100,000 
Variable rate basis
 
 
 
 
 
 
 
 
 
 
one-month LIBOR 
Fixed interest rate
 
 
 
 
 
 
 
 
 
 
1.03% 
Maximum remaining maturity of foreign currency derivatives
2 years 
 
 
 
 
 
 
 
 
 
 
Derivative, Net Hedge Ineffectiveness Gain (Loss)
 
 
 
 
 
 
 
 
 
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net
 
 
427 
236 
156 
271 
236 
 
 
 
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net
 
 
 
 
 
 
 
 
$ (3,906)
$ 1,057 
 
Fair Value Measurements (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Dec. 31, 2012
Mar. 31, 2013
Quoted Prices in Active Markets for Identical Assets (Level 1)
Dec. 31, 2012
Quoted Prices in Active Markets for Identical Assets (Level 1)
Mar. 31, 2013
Significant Other Observable Inputs (Level 2)
Dec. 31, 2012
Significant Other Observable Inputs (Level 2)
Mar. 31, 2013
Significant Unobservable Inputs (Level 3)
Dec. 31, 2012
Significant Unobservable Inputs (Level 3)
Mar. 31, 2013
Estimate of Fair Value, Fair Value Disclosure [Member]
Dec. 31, 2012
Estimate of Fair Value, Fair Value Disclosure [Member]
Mar. 31, 2013
Minimum [Member]
Mar. 31, 2013
Maximum [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Asset derivatives
$ 1,328 
$ 3,315 
$ 0 
$ 0 
$ 1,328 
$ 3,315 
$ 0 
$ 0 
$ 1,328 
$ 3,315 
 
 
Liability derivatives
(3,160)
(1,970)
(3,160)
(1,970)
(3,160)
(1,970)
 
 
Bank acceptances
 
 
3,151 
3,441 
3,151 
3,441 
 
 
Rabbi trust assets
 
 
1,896 
1,831 
1,896 
1,831 
 
 
Financial assets and financial liabilities, reported at fair value
 
 
$ 1,896 
$ 1,831 
$ 1,319 
$ 4,786 
$ 0 
$ 0 
$ 3,215 
$ 6,617 
 
 
Maturity of bank acceptances
 
 
 
 
 
 
 
 
 
 
3 months 
6 months 
Pension and Other Postretirement Benefits (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Pensions [Member]
 
 
Pension and other postretirement benefits expenses
 
 
Service cost
$ 1,984 
$ 1,613 
Interest cost
4,987 
5,322 
Expected return on plan assets
(8,276)
(8,033)
Amortization of prior service cost (credit)
203 
211 
Recognized losses
4,075 
2,759 
Curtailment loss
199 
Net periodic benefit cost
3,172 
1,872 
Other Postretirement Benefits [Member]
 
 
Pension and other postretirement benefits expenses
 
 
Service cost
77 
77 
Interest cost
543 
680 
Amortization of prior service cost (credit)
(395)
(396)
Recognized losses
290 
286 
Net periodic benefit cost
515 
647 
Barnes Distribution North America [Member]
 
 
Pension and other postretirement benefits expenses
 
 
Withdrawal from multi-employer post-retirement benefit plan expense
$ 2,788 
 
Income Taxes (Details)
3 Months Ended 12 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Dec. 31, 2012
Income Tax Disclosure [Abstract]
 
 
 
Effective tax rate
21.40% 
17.80% 
13.50% 
Changes in Accumulated Other Comprehensive Income by Component (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Changes in Accumulated Other Comprehensive Income by Component [Roll Forward]
 
 
Accumulated other comprehensive income (loss)
$ (66,752)
 
Unrealized gain (loss) on hedging activities, net of tax
427 1
236 1
Defined benefit pension and other postretirement benefits, net of tax
2,410 2
1,205 2
Foreign currency translation adjustments, net of tax
(14,505)3
14,709 3
Net current-period other comprehensive income
(11,668)
16,150 
Accumulated other comprehensive income (loss)
(78,420)
 
Gains and Losses on Cash Flow Hedges [Member]
 
 
Changes in Accumulated Other Comprehensive Income by Component [Roll Forward]
 
 
Accumulated other comprehensive income (loss)
(432)
 
Unrealized gain (loss) on hedging activities, net of tax
427 1
 
Accumulated other comprehensive income (loss)
(5)
 
Other Comprehensive Income (Loss), Reclassification Adjustment on Derivatives Included in Net Income, before Tax
85 
 
Other Comprehensive Income (Loss), Reclassification Adjustment on Derivatives Included in Net Income, Tax Benefit
13 
 
Pension and Other Postretirement Benefit Items [Member]
 
 
Changes in Accumulated Other Comprehensive Income by Component [Roll Forward]
 
 
Accumulated other comprehensive income (loss)
(146,441)
 
Defined benefit pension and other postretirement benefits, net of tax
2,410 2
 
Accumulated other comprehensive income (loss)
(144,031)
 
Amortization of prior-service credits
192 4
 
Amortization of actuarial losses
(4,365)4
 
Curtailment
(199)4
 
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Adjustment, before Tax
(4,372)
 
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Tax Benefit
1,574 
 
Foreign Currency Items [Member]
 
 
Changes in Accumulated Other Comprehensive Income by Component [Roll Forward]
 
 
Accumulated other comprehensive income (loss)
80,121 
 
Foreign currency translation adjustments, net of tax
(14,505)3
 
Accumulated other comprehensive income (loss)
65,616 
 
Interest Rate Contracts [Member] |
Interest Expense [Member] |
Gains and Losses on Cash Flow Hedges [Member]
 
 
Changes in Accumulated Other Comprehensive Income by Component [Roll Forward]
 
 
Other Comprehensive Income (Loss), Reclassification Adjustment on Derivatives Included in Net Income, before Tax
(199)
 
Foreign Exchange Contracts [Member] |
Sales [Member] |
Gains and Losses on Cash Flow Hedges [Member]
 
 
Changes in Accumulated Other Comprehensive Income by Component [Roll Forward]
 
 
Other Comprehensive Income (Loss), Reclassification Adjustment on Derivatives Included in Net Income, before Tax
284 
 
Before Reclassification [Member]
 
 
Changes in Accumulated Other Comprehensive Income by Component [Roll Forward]
 
 
Net current-period other comprehensive income
(14,368)
 
Before Reclassification [Member] |
Gains and Losses on Cash Flow Hedges [Member]
 
 
Changes in Accumulated Other Comprehensive Income by Component [Roll Forward]
 
 
Unrealized gain (loss) on hedging activities, net of tax
525 
 
Before Reclassification [Member] |
Pension and Other Postretirement Benefit Items [Member]
 
 
Changes in Accumulated Other Comprehensive Income by Component [Roll Forward]
 
 
Defined benefit pension and other postretirement benefits, net of tax
(388)
 
Before Reclassification [Member] |
Foreign Currency Items [Member]
 
 
Changes in Accumulated Other Comprehensive Income by Component [Roll Forward]
 
 
Foreign currency translation adjustments, net of tax
(14,505)
 
Reclassification [Member]
 
 
Changes in Accumulated Other Comprehensive Income by Component [Roll Forward]
 
 
Net current-period other comprehensive income
2,700 
 
Reclassification [Member] |
Gains and Losses on Cash Flow Hedges [Member]
 
 
Changes in Accumulated Other Comprehensive Income by Component [Roll Forward]
 
 
Unrealized gain (loss) on hedging activities, net of tax
(98)
 
Reclassification [Member] |
Pension and Other Postretirement Benefit Items [Member]
 
 
Changes in Accumulated Other Comprehensive Income by Component [Roll Forward]
 
 
Defined benefit pension and other postretirement benefits, net of tax
2,798 
 
Reclassification [Member] |
Foreign Currency Items [Member]
 
 
Changes in Accumulated Other Comprehensive Income by Component [Roll Forward]
 
 
Foreign currency translation adjustments, net of tax
$ 0 
 
Information on Business Segments (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Segment
Mar. 31, 2012
Segment Reporting Information [Line Items]
 
 
Number of reportable segments (in segments)
 
Net sales
$ 263,545 
$ 222,795 
Operating profit
24,955 
24,618 
Interest expense
4,357 
2,368 
Other expense (income), net
966 
859 
Income from continuing operations before income taxes
19,632 
21,391 
Aerospace [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Net sales
98,045 
97,250 
Operating profit
10,346 
12,654 
Industrial [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Net sales
165,502 
125,545 
Operating profit
14,609 
11,964 
Intersegment sales [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Net sales
$ (2)
$ 0 
Information on Business Segments Details 1 (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2013
Dec. 31, 2012
Segment Reporting Information [Line Items]
 
 
Assets
$ 1,875,608 
$ 1,868,596 
Aerospace [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Assets
531,920 
533,465 
Industrial [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Assets
907,505 
907,124 
Other [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Assets
$ 436,183 1
$ 428,007 1
Commitments and Contingencies (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Apr. 16, 2013
Subsequent Event [Member]
Loss Contingencies [Line Items]
 
 
IRS proposed adjustments to tax years 2000 through 2002, before penalty and interest
$ 16,500 
 
Potential penalty, percentage of tax assessment
20.00% 
 
Maximum Term for Option to Appeal
 
90 days 
IRS proposed settlement, including penalties and interest
 
13,000 
Tax Examination, Estimate of Negative Impact on Cash Flows in Third Quarter
 
13,000 
Tax Examination, Estimate of Potential Income Tax Charge in Second Quarter
 
$ 20,000 
Subsequent Event (Details) (Barnes Distribution North America [Member], USD $)
In Thousands, unless otherwise specified
0 Months Ended 3 Months Ended 1 Months Ended
Feb. 22, 2013
Mar. 31, 2013
Apr. 30, 2013
Subsequent Event [Member]
Apr. 22, 2013
Subsequent Event [Member]
Subsequent Event [Line Items]
 
 
 
 
Proceeds from divestiture of businesses
$ 550,000 
$ 550,000 
 
 
Estimated After-Tax Proceeds from Divestiture of Business
 
 
 
400,000 
Estimated Gain on Divesiture of Business
 
 
 
200,000 
Repayments of Lines of Credit
 
 
$ 480,000