BARNES GROUP INC, 10-Q filed on 10/27/2015
Quarterly Report
Document and Entity Information
9 Months Ended
Sep. 30, 2015
Oct. 21, 2015
Document and Entity Information [Abstract]
 
 
Document Type
10-Q 
 
Amendment Flag
false 
 
Document Period End Date
Sep. 30, 2015 
 
Document Fiscal Year Focus
2015 
 
Document Fiscal Period Focus
Q3 
 
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
 
54,901,368 
Consolidated Statements of Income (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Income Statement [Abstract]
 
 
 
 
Net sales
$ 291,434 
$ 317,659 
$ 906,949 
$ 951,832 
Cost of sales
191,132 
206,410 
593,609 
632,671 
Selling and administrative expenses
56,555 
60,364 
175,049 
187,770 
Total operating costs and expenses
247,687 
266,774 
768,658 
820,441 
Operating income
43,747 
50,885 
138,291 
131,391 
Interest expense
2,637 
2,435 
7,944 
8,558 
Other (income) expense, net
(545)
741 
(228)
1,768 
Income from continuing operations before income taxes
41,655 
47,709 
130,575 
121,065 
Income taxes
7,984 
13,407 
33,601 
33,782 
Income from continuing operations
33,671 
34,302 
96,974 
87,283 
Loss from discontinued operations, net of income taxes
(425)
(425)
Net income
$ 33,671 
$ 33,877 
$ 96,974 
$ 86,858 
Basic:
 
 
 
 
Income from continuing operations (in dollars per share)
$ 0.61 
$ 0.63 
$ 1.76 
$ 1.60 
Loss from discontinued operations, net of income taxes (in dollars per share)
$ 0.00 
$ (0.01)
$ 0.00 
$ (0.01)
Basic (in dollars per share)
$ 0.61 
$ 0.62 
$ 1.76 
$ 1.59 
Diluted:
 
 
 
 
Income from continuing operations (in dollars per share)
$ 0.61 
$ 0.62 
$ 1.74 
$ 1.57 
Loss from discontinued operations, net of income taxes (in dollars per share)
$ 0.00 
$ (0.01)
$ 0.00 
$ (0.01)
Diluted (in dollars per share)
$ 0.61 
$ 0.61 
$ 1.74 
$ 1.56 
Dividends (in dollars per share)
$ 0.12 
$ 0.11 
$ 0.36 
$ 0.33 
Weighted average common shares outstanding:
 
 
 
 
Basic (in shares)
55,199,315 
54,879,329 
55,140,774 
54,756,794 
Diluted (in shares)
55,588,092 
55,509,658 
55,647,971 
55,803,370 
Consolidated Statements of Comprehensive Income (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Statement of Comprehensive Income [Abstract]
 
 
 
 
Net income
$ 33,671 
$ 33,877 
$ 96,974 
$ 86,858 
Other comprehensive income (loss), net of tax
 
 
 
 
Unrealized (loss) gain on hedging activities, net of tax (1)
(174)1
564 1
127 1
33 1
Foreign currency translation adjustments, net of tax (2)
(22,722)2
(41,279)2
(38,847)2
(51,837)2
Defined benefit pension and other postretirement benefits, net of tax (3)
3,592 3
2,863 3
9,043 3
(1,518)3
Total other comprehensive loss, net of tax
(19,304)
(37,852)
(29,677)
(53,322)
Total comprehensive income (loss)
14,367 
(3,975)
67,297 
33,536 
Unrealized (loss) income on hedging activities, tax
(96)
256 
(64)
62 
Foreign currency translation adjustment, tax
(188)
(1,376)
(1,569)
(2,143)
Defined benefit pension and other postretirement benefits, tax
$ 1,383 
$ 869 
$ 4,150 
$ (2,121)
Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2015
Dec. 31, 2014
Current assets
 
 
Cash and cash equivalents
$ 65,763 
$ 46,039 
Accounts receivable, less allowances (2015 - $3,487; 2014 - $3,873)
275,055 
275,890 
Inventories
213,321 
212,044 
Deferred income taxes
27,759 
31,849 
Prepaid expenses and other current assets
28,969 
22,574 
Total current assets
610,867 
588,396 
Deferred income taxes
2,750 
10,061 
Property, plant and equipment
697,902 
672,225 
Less accumulated depreciation
(387,682)
(372,790)
Property, plant and equipment, net
310,220 
299,435 
Goodwill
595,131 
594,949 
Other intangible assets, net
528,051 
554,694 
Other assets
31,059 
26,350 
Total assets
2,078,078 
2,073,885 
Current liabilities
 
 
Notes and overdrafts payable
10,509 
8,028 
Accounts payable
105,413 
94,803 
Accrued liabilities
131,356 
161,397 
Long-term debt - current
1,523 
862 
Total current liabilities
248,801 
265,090 
Long-term debt
467,962 
495,844 
Accrued retirement benefits
107,564 
115,057 
Deferred income taxes
69,946 
70,147 
Other liabilities
22,254 
15,954 
Commitments and contingencies (Note 14)
   
   
Stockholders' equity
 
 
Common stock - par value $0.01 per share Authorized: 150,000,000 shares Issued: at par value (2015 - 62,057,230 shares; 2014 - 61,229,980 shares)
620 
612 
Additional paid-in capital
424,979 
405,525 
Treasury stock, at cost (2015 - 7,156,256 shares; 2014 - 6,729,438 shares)
(186,386)
(169,405)
Retained earnings
1,051,468 
974,514 
Accumulated other non-owner changes to equity
(129,130)
(99,453)
Total stockholders' equity
1,161,551 
1,111,793 
Total liabilities and stockholders' equity
$ 2,078,078 
$ 2,073,885 
Consolidated Balance Sheets (Parenthetical) (USD $)
In Thousands, except Share data, unless otherwise specified
Sep. 30, 2015
Dec. 31, 2014
Allowance for doubtful accounts
$ 3,487 
$ 3,873 
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)
62,057,230 
61,229,980 
Treasury stock, at cost (in shares)
7,156,256 
6,729,438 
Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Operating activities:
 
 
Net income
$ 96,974 
$ 86,858 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
Depreciation and amortization
59,249 
62,556 
Amortization of convertible debt discount
731 
(Gain) loss on disposition of property, plant and equipment
(1,269)
103 
Stock compensation expense
6,934 
5,453 
Withholding taxes paid on stock issuances
(4,898)
(4,357)
Loss on the sale of businesses
1,586 
Changes in assets and liabilities, net of the effect of acquisitions:
 
 
Accounts receivable
2,221 
(26,648)
Inventories
(3,593)
(8,481)
Prepaid expenses and other current assets
(7,617)
(3,074)
Accounts payable
8,667 
8,237 
Accrued liabilities
(10,647)
8,630 
Deferred income taxes
4,741 
(6,942)
Long-term retirement benefits
(166)
(6,400)
Other
2,481 
3,519 
Net cash provided by operating activities
153,077 
121,771 
Investing activities:
 
 
Proceeds from disposition of property, plant and equipment
3,311 
627 
Payments for the sale of businesses
(1,181)
Change in restricted cash
4,886 
Capital expenditures
(31,412)
(43,594)
Business acquisitions, net of cash acquired
(43,485)
Component Repair Program payments
(19,000)
(41,000)
Other
(1,030)
Net cash used by investing activities
(90,586)
(81,292)
Financing activities:
 
 
Net change in other borrowings
2,491 
24,663 
Payments on long-term debt
(137,699)
(183,673)
Proceeds from the issuance of long-term debt
107,766 
158,883 
Payment of assumed liability to Otto Männer Holding AG
(19,796)
Premium paid on convertible debt redemption
(14,868)
Proceeds from the issuance of common stock
11,183 
10,323 
Common stock repurchases
(12,082)
(8,389)
Dividends paid
(19,713)
(17,925)
Excess tax benefit on stock awards
2,621 
4,625 
Other
6,341 
(185)
Net cash used by financing activities
(39,092)
(46,342)
Effect of exchange rate changes on cash flows
(3,675)
(1,986)
Increase (decrease) in cash and cash equivalents
19,724 
(7,849)
Cash and cash equivalents at beginning of period
46,039 
70,856 
Cash and cash equivalents at end of period
65,763 
63,007 
Intangible assets acquired
 
$ 39,000 
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, 2014 has been derived from the 2014 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, 2014. In the opinion of management, all adjustments, including normal recurring accruals considered necessary for a fair statement of the results, have been included. Operating results for the nine-month period ended September 30, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015.
Acquisitions
Acquisitions
Acquisition

On August 7, 2015, the Company, through one of its subsidiaries, completed the acquisition of the Thermoplay business ("Thermoplay") by acquiring all of the capital stock of privately held HPE S.p.A., the parent company through which Thermoplay operates. Thermoplay’s headquarters and manufacturing facility are located in Pont-Saint-Martin in Aosta, Italy, with technical service capabilities in China, India, France, Germany, United Kingdom, Portugal, and Brazil. Thermoplay, which is being integrated into our Industrial segment, specializes in the design, development, and manufacturing of hot runner solutions for plastic injection molding, primarily in the packaging, automotive, and medical end markets. The Company acquired Thermoplay for an aggregate cash purchase price of €58,903 ($64,608), which is subject to post closing adjustments under the terms of the Sale and Purchase Agreement ("SPA"). The Company paid €56,700 ($62,191) in cash, using cash on hand and borrowings under the Company's revolving credit facility and recorded a liability of €2,203 ($2,416) related to the estimated post closing adjustments. The purchase price includes adjustments under the terms of the SPA, including approximately €17,054 ($18,706) related to cash acquired. In connection with the acquisition, the Company recorded $14,770 of intangible assets and $20,249 of goodwill. See Note 5 to the Consolidated Financial Statements. Pro forma operating results for the Thermoplay acquisition are not presented as the results would not be significantly different than historical results.
 
During the nine months ended September 30, 2015, the Company incurred $2,239 of acquisition-related costs related to the Thermoplay acquisition. These costs include due diligence costs and transaction costs to complete the acquisition and have been recognized in the Consolidated Statements of Income as selling and administrative expenses.
The operating results of Thermoplay have been included in the Consolidated Statements of Income since the date of acquisition. The Company reported $4,595 in net sales for the period from the acquisition date through September 30, 2015. Thermoplay results have been included within the Industrial segment's operating profit.
Net Income Per Common Share
Net Income Per Common Share
Net Income Per Common Share

For the purpose of computing diluted 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 net income per common share, the weighted-average number of common shares outstanding was increased by 388,777 and 630,329 for the three-month periods ended September 30, 2015 and 2014, respectively, and 507,197 and 1,046,576 for the nine-month periods ended September 30, 2015 and 2014, respectively, to account for the potential dilutive effect of stock-based incentive plans and for 2014 the effect of the Company's 3.375% Senior Subordinated Convertible Notes (the "3.375% Notes"). The decrease in potentially issuable shares in the nine-months ended September 30, 2015 was due primarily to the redemption of the 3.375% Notes, which occurred during 2014. There were no adjustments to 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 September 30, 2015 and 2014, the Company excluded 209,102 and 92,049 stock options, respectively, from the calculation of weighted-average diluted shares outstanding as the stock options would have been anti-dilutive. During the nine-month periods ended September 30, 2015 and 2014, the Company excluded 203,001 and 92,049 stock options, respectively, from the calculation of weighted-average diluted shares outstanding as the stock options would have been anti-dilutive.
  
The Company granted 122,700 stock options, 106,685 restricted stock unit awards and 85,465 performance share awards in February 2015 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 weighted-average common shares outstanding as they contain nonforfeitable rights to dividend payments. The performance share awards are part of a long-term incentive program and are based on performance goals that are driven by three independently measured metrics: the Company's total shareholder return ("TSR"), return on invested capital ("ROIC") and operating income before depreciation and amortization growth (each metric weighted equally). The TSR and operating income before depreciation and amortization growth metrics are 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, 2017. The ROIC metric is measured based on pre-established Company targets over the same period. 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.
Inventories
Inventories
Inventories

The components of inventories consisted of:
 
September 30, 2015
 
December 31, 2014
Finished goods
$
78,712


$
83,905

Work-in-process
80,099

 
79,563

Raw material and supplies
54,510

 
48,576

 
$
213,321


$
212,044

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 September 30, 2015:
 
Industrial
 
Aerospace
 
Total Company
January 1, 2015
$
564,163

 
$
30,786

 
$
594,949

Goodwill acquired
20,249

 

 
20,249

Foreign currency translation
(20,067
)
 

 
(20,067
)
September 30, 2015
$
564,345

 
$
30,786

 
$
595,131



The changes recorded at Industrial include $20,249 of goodwill resulting from the acquisition of Thermoplay in August 2015. The amount allocated to goodwill reflects the benefits that the Company expects to realize from geographical expansion, new end-market applications within the plastics market, future enhancements to technology and Thermoplay’s assembled workforce. None of the recognized goodwill is expected to be deductible for income tax purposes. The final purchase price allocation is subject to post-closing adjustments pursuant to the SPA.

In the second quarter of 2015, management performed its annual impairment testing of goodwill. Based on this assessment, there was no goodwill impairment recognized.









Other Intangible Assets:
Other intangible assets consisted of:
 
 
 
September 30, 2015
 
December 31, 2014
 
Range of
Life -Years
 
Gross Amount
 
Accumulated Amortization
 
Gross Amount
 
Accumulated Amortization
Amortized intangible assets:
 
 
 
 
 
 
 
 
 
Revenue sharing programs (RSPs)
Up to 30
 
$
293,700

 
$
(82,137
)
 
$
293,700

 
$
(72,958
)
Component repair programs (CRPs)
Up to 30
 
106,639

 
(4,996
)
 
106,639

 
(1,941
)
Customer lists/relationships
10-16
 
193,266

 
(38,978
)
 
183,406

 
(30,731
)
Patents and technology
6-14
 
66,152

 
(27,619
)
 
62,972

 
(22,356
)
Trademarks/trade names
10-30
 
11,950

 
(9,215
)
 
11,950

 
(8,552
)
Other
Up to 15
 
16,552

 
(15,101
)
 
19,292

 
(14,806
)
 
 
 
688,259

 
(178,046
)
 
677,959

 
(151,344
)
Unamortized intangible asset:
 
 
 
 
 
 
 
 
 
Trade names
 
 
38,370

 

 
36,900

 

Foreign currency translation
 
 
(20,532
)
 

 
(8,821
)
 

Other intangible assets
 
 
$
706,097

 
$
(178,046
)
 
$
706,038

 
$
(151,344
)


Estimated amortization of intangible assets for future periods is as follows: 2015 - $41,000; 2016 - $36,000; 2017 - $36,000; 2018 - $37,000 and 2019 - $35,000.

In connection with the acquisition of Thermoplay in August 2015, the Company recorded intangible assets of $14,770 which includes $9,860 of customer relationships, $3,180 of patents and technology, $1,470 of an indefinite life trade name and $260 of customer backlog. The weighted-average useful lives of the acquired assets were 13 years, 6 years and less than one year, respectively.

During the second quarter of 2015, the Company changed its annual impairment testing of its trade names, indefinite-lived intangible assets, from July 1 to April 1. The Company believes this timing is preferable as it better aligns with its annual testing of goodwill impairment. The Company completed its annual testing in the second quarter of 2015 and determined that there were no impairments recognized.

In June 2014, the Company entered into a second Component Repair Program ("CRP") with its customer, General Electric ("GE"). This CRP provides for, among other items, the right to sell certain aftermarket component repair services for CFM56 engines directly to other customers as one of a few GE licensed suppliers. In addition, this CRP extends existing contracts under which the Company currently provides these services directly to GE. As consideration for these rights, the Company agreed to pay $80,000. The Company paid $61,000 during 2014 and $19,000 during the second quarter of 2015. The length of the program rights are for the remaining life of all CFM56 engine lines and the amortization of the intangible will be recognized as a reduction to sales over this life.
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 financial covenants as of September 30, 2015, and continues to monitor its future compliance based on current and anticipated future economic conditions.











Long-term debt and notes and overdrafts payable at September 30, 2015 and December 31, 2014 consisted of:
 
 
September 30, 2015
 
December 31, 2014
 
 
Carrying
Amount
 
Fair
Value
 
Carrying
Amount
 
Fair
Value
Revolving credit agreement
 
$
361,312

 
$
357,962

 
$
393,518

 
$
394,917

3.97% Senior Notes
 
100,000

 
105,551

 
100,000

 
102,859

Borrowings under lines of credit and overdrafts
 
10,509

 
10,509

 
8,028

 
8,028

Other foreign bank borrowings
 
449

 
447

 

 

Capital leases
 
7,724

 
8,256

 
3,188

 
3,479

 
 
479,994

 
482,725

 
504,734

 
509,283

Less current maturities
 
(12,032
)
 
 
 
(8,890
)
 
 
Long-term debt
 
$
467,962

 
 
 
$
495,844

 
 

In September 2013, the Company entered into a second amendment to its fifth amended and restated revolving credit agreement (the "Amended Credit Agreement") and retained Bank of America, N.A. as the administrative agent for the lenders. The $750,000 Amended Credit Agreement matures in September 2018 with an option to extend the maturity date for an additional year, subject to certain conditions. The Amended Credit Agreement adds a new foreign subsidiary borrower in Germany, Barnes Group Acquisition GmbH, and includes an accordion feature to increase the borrowing availability of the Company to $1,000,000. The Company may exercise the accordion feature upon request to the Administrative Agent as long as an event of default has not occurred or is continuing. The borrowing availability of $750,000, pursuant to the terms of the Amended Credit Agreement, allows for Euro-denominated borrowings equivalent to $500,000. Borrowings under the Amended Credit Agreement bear interest at LIBOR plus a spread ranging from 1.10% to 1.70% depending on the Company's leverage ratio at prior quarter end.

Borrowings and availability under the Amended Credit Agreement were $361,312 and $388,688, respectively, at September 30, 2015 and $393,518 and $356,482, respectively, at December 31, 2014. Borrowings included Euro-denominated borrowings of €900 ($1,012) at September 30, 2015 and €30,945 ($37,618) at December 31, 2014. The interest rate on these borrowings was 1.30% and 1.33% on September 30, 2015 and December 31, 2014, respectively. The fair value of the borrowings is based on observable Level 2 inputs. The borrowings are valued using discounted cash flows based upon the Company's estimated interest costs for similar types of borrowings.

On October 15, 2014, the Company entered into a Note Purchase Agreement (“Note Purchase Agreement”), among the Company and New York Life Insurance Company, New York Life Insurance and Annuity Corporation and New York Life Insurance and Annuity Corporation Institutionally Owned Life Insurance Separate Account (BOLI 30C), as purchasers, for the issuance of $100,000 aggregate principal amount of 3.97% senior notes due October 17, 2024 (the “3.97% Senior Notes”). The Company completed funding of the transaction and issued the 3.97% Senior Notes on October 17, 2014.

The 3.97% Senior Notes are senior unsecured obligations of the Company and will pay interest semi-annually on April 17 and October 17 of each year at an annual rate of 3.97%. The 3.97% Senior Notes will mature on October 17, 2024 unless earlier prepaid in accordance with their terms. Subject to certain conditions, the Company may, at its option, prepay all or any part of the 3.97% Senior Notes in an amount equal to 100% of the principal amount of the 3.97% Senior Notes so prepaid, plus any accrued and unpaid interest to the date of prepayment, plus the Make-Whole Amount, as defined in the Note Purchase Agreement, with respect to such principal amount being prepaid. The fair value of the 3.97% Senior Notes was determined using the US Treasury yield and a long-term credit spread for similar types of borrowings, that represent Level 2 observable inputs.
The Company's borrowing capacity may be limited by various debt covenants in the Amended Credit Agreement and the Note Purchase Agreement (the "Agreements"). The Agreements contain customary affirmative and negative covenants, including, among others, limitations on indebtedness, liens, investments, restricted payments, dispositions and business activities. The Agreements require the Company to maintain a ratio of Consolidated Senior Debt, as defined, to Consolidated EBITDA, as defined, of not more than 3.25 times at the end of each fiscal quarter, provided that such ratio may increase to 3.50 times following the consummation of certain acquisitions. In addition, the Agreements require the Company to maintain (i) a ratio of Consolidated Total Debt, as defined, to Consolidated EBITDA of not more than 4.00 times at the end of each fiscal quarter, provided that such ratio may increase to 4.25 times following the consummation of certain acquisitions, and (ii) a ratio of Consolidated EBITDA to Consolidated Cash Interest Expense, as defined, of not less than 4.25 times at the end of any fiscal quarter.

In addition, the Company has available approximately $56,000 in uncommitted short-term bank credit lines ("Credit Lines") and overdraft facilities. Under the Credit Lines, $10,500 was borrowed at September 30, 2015 at an average interest rate of 1.41% and $7,550 was borrowed at December 31, 2014 at an average interest rate of 1.23%. The Company had also borrowed $9 and $478 under the overdraft facilities at September 30, 2015 and December 31, 2014, respectively. Repayments under the Credit Lines are due within a month after being borrowed. Repayments of the overdrafts are generally due within two 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 other foreign bank borrowings. The fair value of the other foreign bank borrowings is 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.

The Company has capital leases including capital leases at Thermoplay which was acquired on August 7, 2015. The fair value of the capital leases is 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.
Business Reorganization
Business Reorganization
Business Reorganization

The Company authorized the closure of production operations ("Saline operations") at its Associated Spring facility located in Saline, Michigan (the "Closure") during the first quarter of 2014.  The Saline operations, which included approximately 50 employees, primarily manufactured certain automotive engine valve springs, a highly commoditized product. Based on changing market dynamics and increased customer demands for commodity pricing, several customers advised the Company of their intent to transition these specific springs to other suppliers, which led to the decision of the Closure. The Closure occurred during the second quarter of 2014, however certain other facility Closure costs, including the transfer of machinery and equipment, continued during the remainder of 2014. The Company recorded restructure and related costs of $5,552 during the first nine months of 2014. This balance included $2,167 of employee termination costs, primarily employee severance expense and defined benefit pension and other postretirement plans (the "Plans") costs related to the accelerated recognition of actuarial losses and special termination benefits, and $3,385 of other facility costs, primarily related to asset write-downs and depreciation on assets that had been utilized through the Closure. See Note 10 for costs associated with the Plans that were impacted by the Closure during the first nine months of 2014. The Closure was completed as of December 31, 2014. Closure costs were recorded primarily within Cost of Sales in the accompanying Consolidated Statements of Income and are reflected in the results of the Industrial segment.
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 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 Euro, British pound sterling, U.S. dollar, Japanese yen, 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 Company's policy for classifying cash flows from derivatives is to report the cash flows consistent with the underlying hedged item. Other financing cash flows during the first nine months of 2015, as presented on the consolidated statements of cash flows, include $6,761 of net cash proceeds from the settlement of foreign currency hedges related to intercompany financing.

The following table sets forth the fair value amounts of derivative instruments held by the Company.
 
September 30, 2015
 
December 31, 2014
 
Asset Derivatives
 
Liability Derivatives
 
Asset Derivatives
 
Liability Derivatives
Derivatives designated as hedging instruments:
 
 
 
 
 
 
 
Interest rate contracts
$

 
$
(805
)
 
$

 
$
(295
)
Foreign exchange contracts

 
(79
)
 

 
(652
)
 
 
 
 
 
 
 
 
Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
Foreign exchange contracts
148

 
(410
)
 
460

 
(699
)
Total derivatives
$
148

 
$
(1,294
)
 
$
460

 
$
(1,646
)


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 (loss) gain, net of tax, recorded in accumulated other non-owner changes to equity for the three- and nine- month periods ended September 30, 2015 and 2014 for derivatives held by the Company and designated as hedging instruments.
 
Three months ended September 30,
 
Nine months ended September 30,
 
2015
 
2014
 
2015
 
2014
Cash flow hedges:
 
 
 
 
 
 
 
Interest rate contracts
$
(151
)
 
$
312

 
$
(320
)
 
$
169

Foreign exchange contracts
(23
)
 
252

 
447

 
(136
)
 
$
(174
)
 
$
564

 
$
127

 
$
33



Amounts related to the interest rate swaps included within accumulated other non-owner changes to equity that were reclassified to expense during the first nine months of 2015 and 2014 resulted in a fixed rate of interest of 1.03% plus the borrowing spread for the first $100,000 of one-month LIBOR borrowings. Additionally, there were no amounts recognized in income for hedge ineffectiveness during the three- and nine- month periods ended September 30, 2015 and 2014.

The following table sets forth the net (loss) gain recorded in other (income) expense, net in the consolidated statements of income for the three- and nine- month periods ended September 30, 2015 and 2014 for non-designated derivatives held by the Company. Such amounts were substantially offset by the net (gain) loss recorded on the underlying hedged asset or liability, also recorded in other (income) expense, net.
 
Three months ended September 30,
 
Nine months ended September 30,
 
2015
 
2014
 
2015
 
2014
Foreign exchange contracts
$
(2,431
)
 
$
141

 
$
4,514

 
$
(847
)
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)
September 30, 2015
 
 
 
 
 
 
 
 
Asset derivatives
 
$
148

 
$

 
$
148

 
$

Liability derivatives
 
(1,294
)
 

 
(1,294
)
 

Bank acceptances
 
14,732

 

 
14,732

 

Rabbi trust assets
 
2,065

 
2,065

 

 

 
 
$
15,651

 
$
2,065

 
$
13,586

 
$

 
 
 
 
 
 
 
 
 
December 31, 2014
 
 
 
 
 
 
 
 
Asset derivatives
 
$
460

 
$

 
$
460

 
$

Liability derivatives
 
(1,646
)
 

 
(1,646
)
 

Bank acceptances
 
10,785

 

 
10,785

 

Rabbi trust assets
 
2,092

 
2,092

 

 

 
 
$
11,691


$
2,092

 
$
9,599

 
$



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 three to six 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
Curtailment losses and special termination benefits during the first nine months of 2014 relate to certain defined benefit pension and other postretirement benefit plans that were impacted by the closure of production operations at an Associated Spring facility located in Saline, Michigan. The settlement loss during the first nine months of 2014 reflects payments that were made to certain participants within one of the Company's defined benefit pension plans.

In September 2015, the Company announced a limited-time program offering (the "Program") to certain eligible, vested, terminated participants ("eligible participants") for a voluntary lump-sum pension payout or reduced annuity option (the "payout") that, if accepted, would settle the Company's pension obligation to them. The Program provides the eligible participants with a limited time opportunity of electing to receive a lump-sum settlement of their remaining pension benefit, or reduced annuity. The eligible participants must notify the Company by November 20, 2015 if they elect a lump-sum payout or reduced annuity, scheduled for a December 2015 payout. Upon settlement during the fourth quarter of 2015, the Company will record a non-cash settlement charge resulting from the accelerated amortization of actuarial losses within Other Comprehensive Income.
Income Taxes
Income Taxes
Income Taxes

The Company's effective tax rate from continuing operations for the first nine months of 2015 was 25.7% compared with 27.9% in the first nine months of 2014 and 27.6% for the full year 2014. The decrease in the first nine months of 2015 effective tax rate from the full year 2014 rate is primarily due to the recognition of a tax benefit recorded in the third quarter related to a refund of withholding taxes that were previously paid and included in tax expense in prior years, partially offset by the expiration of certain tax holidays.

The Aerospace and Industrial segments were previously awarded international tax holidays. The tax holidays awarded to Industrial have expired. The remaining tax holidays for which the Company currently receives benefit relate to Aerospace, the majority of which are due to expire in the second half of 2016.
Changes in Accumulated Other Comprehensive Income (Loss) by Component
Changes in Accumulated Other Comprehensive Income by Component
Changes in Accumulated Other Comprehensive Income (Loss) by Component

The following table sets forth the changes in accumulated other comprehensive income (loss), net of tax, by component for the nine- month periods ended September 30, 2015 and 2014:
 
Gains and Losses on Cash Flow Hedges
 
Pension and Other Postretirement Benefit Items
 
Foreign Currency Items
 
Total
January 1, 2015
$
(732
)
 
$
(115,289
)
 
$
16,568

 
$
(99,453
)
Other comprehensive (loss) income before reclassifications to consolidated statements of income
(665
)
 
1,412

 
(38,847
)
 
(38,100
)
Amounts reclassified from accumulated other comprehensive income (loss) to the consolidated statements of income
792

 
7,631

 

 
8,423

Net current-period other comprehensive income (loss)
127

 
9,043

 
(38,847
)
 
(29,677
)
September 30, 2015
$
(605
)
 
$
(106,246
)
 
$
(22,279
)
 
$
(129,130
)


 
Gains and Losses on Cash Flow Hedges
 
Pension and Other Postretirement Benefit Items
 
Foreign Currency Items
 
Total
January 1, 2014
$
(519
)
 
$
(73,273
)
 
$
99,736

 
$
25,944

Other comprehensive loss before reclassifications to consolidated statements of income
(585
)
 
(7,081
)
 
(51,837
)
 
(59,503
)
Amounts reclassified from accumulated other comprehensive income (loss) to the consolidated statements of income
618

 
5,563

 

 
6,181

Net current-period other comprehensive income (loss)
33

 
(1,518
)
 
(51,837
)
 
(53,322
)
September 30, 2014
$
(486
)
 
$
(74,791
)
 
$
47,899

 
$
(27,378
)


The following table sets forth the reclassifications out of accumulated other comprehensive income (loss) by component for the three-and nine- month periods ended September 30, 2015 and 2014:

Details about Accumulated Other Comprehensive Income (Loss) Components
 
Amount Reclassified from Accumulated Other Comprehensive Income (Loss)
Affected Line Item in the Consolidated Statements of Income
 
 
Three months ended September 30, 2015
 
Three months ended September 30, 2014
 
 
Gains and losses on cash flow hedges
 
 
 
 
 
 
     Interest rate contracts
 
$
(214
)
 
$
(224
)
 
Interest expense
     Foreign exchange contracts
 
(137
)
 
(239
)
 
Net sales
 
 
(351
)
 
(463
)
 
Total before tax
 
 
110

 
136

 
Tax benefit
 
 
(241
)
 
(327
)
 
Net of tax
 
 
 
 
 
 
 
Pension and other postretirement benefit items
 
 
 
 
 
 
     Amortization of prior-service credits, net
 
$
65

 
$
66

 
(A)
Amortization of actuarial losses
 
(3,983
)
 
(2,409
)
 
(A)
Settlement loss
 

 
(281
)
 
(A)
 
 
(3,918
)
 
(2,624
)
 
Total before tax
 
 
1,383

 
814

 
Tax benefit
 
 
(2,535
)
 
(1,810
)
 
Net of tax
 
 
 
 
 
 
 
Total reclassifications in the period
 
$
(2,776
)
 
$
(2,137
)
 
 
(A) These accumulated other comprehensive income (loss) components are included within the computation of net periodic pension cost. See Note 10.

Details about Accumulated Other Comprehensive Income (Loss) Components
 
Amount Reclassified from Accumulated Other Comprehensive Income (Loss)
Affected Line Item in the Consolidated Statements of Income
 
 
Nine months ended September 30, 2015
 
Nine months ended September 30, 2014
 
 
Gains and losses on cash flow hedges
 
 
 
 
 

     Interest rate contracts
 
$
(642
)
 
$
(663
)
 
Interest expense
     Foreign exchange contracts
 
(499
)
 
(259
)
 
Net sales
 
 
(1,141
)
 
(922
)
 
Total before tax
 
 
349

 
304

 
Tax benefit
 
 
(792
)
 
(618
)
 
Net of tax
 
 
 
 
 
 
 
Pension and other postretirement benefit items
 
 
 
 
 
 
     Amortization of prior-service credits, net
 
$
192

 
$
167

 
(A)
Amortization of actuarial losses
 
(11,973
)
 
(7,125
)
 
(A)
Curtailment loss
 

 
(223
)
 
(A)
Settlement loss
 

 
(863
)
 
(A)
 
 
(11,781
)
 
(8,044
)
 
Total before tax
 
 
4,150

 
2,481

 
Tax benefit
 
 
(7,631
)
 
(5,563
)
 
Net of tax
 
 
 
 
 
 
 
Total reclassifications in the period
 
$
(8,423
)
 
$
(6,181
)
 
 

(A) These accumulated other comprehensive income (loss) 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 and reports under two global business segments: Industrial and Aerospace. 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 these two reportable segments.

The Industrial segment is a global manufacturer of highly-engineered, high-quality precision parts, products and systems for critical applications serving a diverse customer base in end-markets such as transportation, industrial equipment, consumer products, packaging, electronics, medical devices, and energy. Focused on innovative custom solutions, Industrial participates in the design phase of components and assemblies whereby the customers receive the benefits of application and systems engineering, new product development, testing and evaluation, and the manufacturing of final products. Industrial designs and manufactures customized hot runner systems and precision mold assemblies - the enabling technologies for many complex injection molding applications. It is a leading manufacturer and supplier of precision mechanical products, including precision mechanical springs and nitrogen gas products. Industrial also manufactures high-precision punched and fine-blanked components used in transportation and industrial applications, nitrogen gas springs and manifold systems used to precisely control stamping presses, and retention rings that position parts on a shaft or other axis. Industrial is equipped to produce virtually every type of precision spring, from fine hairsprings for electronics and instruments to large heavy-duty springs for machinery.

The Aerospace segment produces precision-machined and fabricated components and assemblies for original equipment manufacturer ("OEM") turbine engine, airframe and industrial gas turbine builders throughout the world, and the military. Aerospace Aftermarket provides jet engine component overhaul and repair ("MRO") services, including the CRP's, for many of the world's major turbine engine manufacturers, commercial airlines and militaries. Aerospace Aftermarket activities also include the manufacture and delivery of spare parts, including the RSPs under which the Company receives an exclusive right to supply designated aftermarket parts over the life of the related aircraft engine program, and component repairs.

The following tables set forth information about the Company's operations by its two reportable segments:
 
Three months ended September 30,
 
Nine months ended September 30,
 
2015
 
2014
 
2015
 
2014
Net sales
 
 
 
 
 
 
 
   Industrial
$
189,106

 
$
207,230

 
$
592,044

 
$
623,886

   Aerospace
102,329

 
110,429

 
314,910

 
327,951

   Intersegment sales
(1
)
 

 
(5
)
 
(5
)
Total net sales
$
291,434

 
$
317,659

 
$
906,949

 
$
951,832

 
 
 
 
 
 
 
 
Operating profit
 
 
 
 
 
 
 
   Industrial
$
27,304

 
$
33,205

 
$
88,262

 
$
81,344

   Aerospace
16,443

 
17,680

 
50,029

 
50,047

Total operating profit
43,747

 
50,885

 
138,291

 
131,391

   Interest expense
2,637

 
2,435

 
7,944

 
8,558

   Other (income) expense, net
(545
)
 
741

 
(228
)
 
1,768

Income from continuing operations before income taxes
$
41,655

 
$
47,709

 
$
130,575

 
$
121,065



 
September 30, 2015
 
December 31, 2014
Assets
 
 
 
   Industrial (A)
$
1,282,039

 
$
1,281,974

   Aerospace
645,555

 
655,042

   Other (B)
150,484

 
136,869

Total assets
$
2,078,078

 
$
2,073,885


(A) The change in assets within the Industrial segment primarily reflects an increase in assets resulting from the acquisition of Thermoplay partially offset by a reduction caused by a change in foreign exchange rates.
(B) "Other" assets include corporate-controlled assets, the majority of which are cash and deferred tax assets.
Commitments and Contingencies
Commitments and Contingencies
Commitments and Contingencies

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 September 30, 2015 and December 31, 2014.

During the third quarter of 2015 the Company recorded a $2,788 charge related to a contract termination dispute following a customer decision to re-source work. The Company has assessed recoverability of related working capital and long lived assets and has filed an arbitration demand for recovery under the provisions of the contract. The Company believes the ultimate resolution will not have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flow.
Subsequent Event Subsequent Event
Subsequent Event
Subsequent Event

On October 1, 2015, the Company, itself and through two of its subsidiaries, completed the acquisition of privately held Priamus System Technologies AG and two of its subsidiaries (collectively, "Priamus") from Growth Finance AG for a purchase price of CHF 9,000 ($9,211), which is subject to certain adjustments. Priamus, which has approximately 40 employees, is headquartered in Schaffhausen, Switzerland and has direct sales and service offices in the U.S. and Germany. Priamus is a technology leader in the development of advanced process control systems for the plastic injection molding industry and services many of the world's highest quality plastic injection molders in the medical, automotive, consumer goods, electronics and packaging markets. Priamus is being integrated into our Industrial segment.
Inventories (Tables)
Schedule of Inventory
The components of inventories consisted of:
 
September 30, 2015
 
December 31, 2014
Finished goods
$
78,712


$
83,905

Work-in-process
80,099

 
79,563

Raw material and supplies
54,510

 
48,576

 
$
213,321


$
212,044

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 September 30, 2015:
 
Industrial
 
Aerospace
 
Total Company
January 1, 2015
$
564,163

 
$
30,786

 
$
594,949

Goodwill acquired
20,249

 

 
20,249

Foreign currency translation
(20,067
)
 

 
(20,067
)
September 30, 2015
$
564,345

 
$
30,786

 
$
595,131

Other intangible assets consisted of:
 
 
 
September 30, 2015
 
December 31, 2014
 
Range of
Life -Years
 
Gross Amount
 
Accumulated Amortization
 
Gross Amount
 
Accumulated Amortization
Amortized intangible assets:
 
 
 
 
 
 
 
 
 
Revenue sharing programs (RSPs)
Up to 30
 
$
293,700

 
$
(82,137
)
 
$
293,700

 
$
(72,958
)
Component repair programs (CRPs)
Up to 30
 
106,639

 
(4,996
)
 
106,639

 
(1,941
)
Customer lists/relationships
10-16
 
193,266

 
(38,978
)
 
183,406

 
(30,731
)
Patents and technology
6-14
 
66,152

 
(27,619
)
 
62,972

 
(22,356
)
Trademarks/trade names
10-30
 
11,950

 
(9,215
)
 
11,950

 
(8,552
)
Other
Up to 15
 
16,552

 
(15,101
)
 
19,292

 
(14,806
)
 
 
 
688,259

 
(178,046
)
 
677,959

 
(151,344
)
Unamortized intangible asset:
 
 
 
 
 
 
 
 
 
Trade names
 
 
38,370

 

 
36,900

 

Foreign currency translation
 
 
(20,532
)
 

 
(8,821
)
 

Other intangible assets
 
 
$
706,097

 
$
(178,046
)
 
$
706,038

 
$
(151,344
)
Debt (Tables)
Schedule of Debt
Long-term debt and notes and overdrafts payable at September 30, 2015 and December 31, 2014 consisted of:
 
 
September 30, 2015
 
December 31, 2014
 
 
Carrying
Amount
 
Fair
Value
 
Carrying
Amount
 
Fair
Value
Revolving credit agreement
 
$
361,312

 
$
357,962

 
$
393,518

 
$
394,917

3.97% Senior Notes
 
100,000

 
105,551

 
100,000

 
102,859

Borrowings under lines of credit and overdrafts
 
10,509

 
10,509

 
8,028

 
8,028

Other foreign bank borrowings
 
449

 
447

 

 

Capital leases
 
7,724

 
8,256

 
3,188

 
3,479

 
 
479,994

 
482,725

 
504,734

 
509,283

Less current maturities
 
(12,032
)
 
 
 
(8,890
)
 
 
Long-term debt
 
$
467,962

 
 
 
$
495,844

 
 
Derivatives (Tables)
The following table sets forth the net (loss) gain recorded in other (income) expense, net in the consolidated statements of income for the three- and nine- month periods ended September 30, 2015 and 2014 for non-designated derivatives held by the Company. Such amounts were substantially offset by the net (gain) loss recorded on the underlying hedged asset or liability, also recorded in other (income) expense, net.
 
Three months ended September 30,
 
Nine months ended September 30,
 
2015
 
2014
 
2015
 
2014
Foreign exchange contracts
$
(2,431
)
 
$
141

 
$
4,514

 
$
(847
)
The following table sets forth the (loss) gain, net of tax, recorded in accumulated other non-owner changes to equity for the three- and nine- month periods ended September 30, 2015 and 2014 for derivatives held by the Company and designated as hedging instruments.
 
Three months ended September 30,
 
Nine months ended September 30,
 
2015
 
2014
 
2015
 
2014
Cash flow hedges:
 
 
 
 
 
 
 
Interest rate contracts
$
(151
)
 
$
312

 
$
(320
)
 
$
169

Foreign exchange contracts
(23
)
 
252

 
447

 
(136
)
 
$
(174
)
 
$
564

 
$
127

 
$
33

The following table sets forth the fair value amounts of derivative instruments held by the Company.
 
September 30, 2015
 
December 31, 2014
 
Asset Derivatives
 
Liability Derivatives
 
Asset Derivatives
 
Liability Derivatives
Derivatives designated as hedging instruments:
 
 
 
 
 
 
 
Interest rate contracts
$

 
$
(805
)
 
$

 
$
(295
)
Foreign exchange contracts

 
(79
)
 

 
(652
)
 
 
 
 
 
 
 
 
Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
Foreign exchange contracts
148

 
(410
)
 
460

 
(699
)
Total derivatives
$
148

 
$
(1,294
)
 
$
460

 
$
(1,646
)
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)
September 30, 2015
 
 
 
 
 
 
 
 
Asset derivatives
 
$
148

 
$

 
$
148

 
$

Liability derivatives
 
(1,294
)
 

 
(1,294
)
 

Bank acceptances
 
14,732

 

 
14,732

 

Rabbi trust assets
 
2,065

 
2,065

 

 

 
 
$
15,651

 
$
2,065

 
$
13,586

 
$

 
 
 
 
 
 
 
 
 
December 31, 2014
 
 
 
 
 
 
 
 
Asset derivatives
 
$
460

 
$

 
$
460

 
$

Liability derivatives
 
(1,646
)
 

 
(1,646
)
 

Bank acceptances
 
10,785

 

 
10,785

 

Rabbi trust assets
 
2,092

 
2,092

 

 

 
 
$
11,691


$
2,092

 
$
9,599

 
$

Pension and Other Postretirement Benefits (Tables)
Schedule of Net Benefit Costs
Pension and other postretirement benefits expenses consisted of the following:
 
Three months ended September 30,
 
Nine months ended September 30,
Pensions
2015
 
2014
 
2015
 
2014
Service cost
$
1,374

 
$
1,132

 
$
4,126

 
$
3,439

Interest cost
4,976

 
5,455

 
14,968

 
16,432

Expected return on plan assets
(8,048
)
 
(8,476
)
 
(24,207
)
 
(25,529
)
Amortization of prior service cost
76

 
152

 
231

 
486

Amortization of actuarial losses
3,730

 
2,141

 
11,215

 
6,374

Curtailment loss

 

 

 
219

Settlement loss

 
281

 

 
863

Special termination benefits

 

 

 
715

Net periodic benefit cost
$
2,108

 
$
685

 
$
6,333

 
$
2,999

 
 
 
 
 
 
 
 

 
Three months ended September 30,
 
Nine months ended September 30,
Other Postretirement Benefits
2015
 
2014
 
2015
 
2014
Service cost
$
36

 
$
29

 
$
109

 
$
110

Interest cost
459

 
540

 
1,377

 
1,638

Amortization of prior service credit
(141
)
 
(218
)
 
(423
)
 
(653
)
Amortization of actuarial losses
253

 
268

 
758

 
751

Curtailment loss

 

 

 
4

Net periodic benefit cost
$
607

 
$
619

 
$
1,821

 
$
1,850

Changes in Accumulated Other Comprehensive Income (Loss) by Component (Tables)
The following table sets forth the changes in accumulated other comprehensive income (loss), net of tax, by component for the nine- month periods ended September 30, 2015 and 2014:
 
Gains and Losses on Cash Flow Hedges
 
Pension and Other Postretirement Benefit Items
 
Foreign Currency Items
 
Total
January 1, 2015
$
(732
)
 
$
(115,289
)
 
$
16,568

 
$
(99,453
)
Other comprehensive (loss) income before reclassifications to consolidated statements of income
(665
)
 
1,412

 
(38,847
)
 
(38,100
)
Amounts reclassified from accumulated other comprehensive income (loss) to the consolidated statements of income
792

 
7,631

 

 
8,423

Net current-period other comprehensive income (loss)
127

 
9,043

 
(38,847
)
 
(29,677
)
September 30, 2015
$
(605
)
 
$
(106,246
)
 
$
(22,279
)
 
$
(129,130
)


 
Gains and Losses on Cash Flow Hedges
 
Pension and Other Postretirement Benefit Items
 
Foreign Currency Items
 
Total
January 1, 2014
$
(519
)
 
$
(73,273
)
 
$
99,736

 
$
25,944

Other comprehensive loss before reclassifications to consolidated statements of income
(585
)
 
(7,081
)
 
(51,837
)
 
(59,503
)
Amounts reclassified from accumulated other comprehensive income (loss) to the consolidated statements of income
618

 
5,563

 

 
6,181

Net current-period other comprehensive income (loss)
33

 
(1,518
)
 
(51,837
)
 
(53,322
)
September 30, 2014
$
(486
)
 
$
(74,791
)
 
$
47,899

 
$
(27,378
)
The following table sets forth the reclassifications out of accumulated other comprehensive income (loss) by component for the three-and nine- month periods ended September 30, 2015 and 2014:

Details about Accumulated Other Comprehensive Income (Loss) Components
 
Amount Reclassified from Accumulated Other Comprehensive Income (Loss)
Affected Line Item in the Consolidated Statements of Income
 
 
Three months ended September 30, 2015
 
Three months ended September 30, 2014
 
 
Gains and losses on cash flow hedges
 
 
 
 
 
 
     Interest rate contracts
 
$
(214
)
 
$
(224
)
 
Interest expense
     Foreign exchange contracts
 
(137
)
 
(239
)
 
Net sales
 
 
(351
)
 
(463
)
 
Total before tax
 
 
110

 
136

 
Tax benefit
 
 
(241
)
 
(327
)
 
Net of tax
 
 
 
 
 
 
 
Pension and other postretirement benefit items
 
 
 
 
 
 
     Amortization of prior-service credits, net
 
$
65

 
$
66

 
(A)
Amortization of actuarial losses
 
(3,983
)
 
(2,409
)
 
(A)
Settlement loss
 

 
(281
)
 
(A)
 
 
(3,918
)
 
(2,624
)
 
Total before tax
 
 
1,383

 
814

 
Tax benefit
 
 
(2,535
)
 
(1,810
)
 
Net of tax
 
 
 
 
 
 
 
Total reclassifications in the period
 
$
(2,776
)
 
$
(2,137
)
 
 
(A) These accumulated other comprehensive income (loss) components are included within the computation of net periodic pension cost. See Note 10.

Details about Accumulated Other Comprehensive Income (Loss) Components
 
Amount Reclassified from Accumulated Other Comprehensive Income (Loss)
Affected Line Item in the Consolidated Statements of Income
 
 
Nine months ended September 30, 2015
 
Nine months ended September 30, 2014
 
 
Gains and losses on cash flow hedges
 
 
 
 
 

     Interest rate contracts
 
$
(642
)
 
$
(663
)
 
Interest expense
     Foreign exchange contracts
 
(499
)
 
(259
)
 
Net sales
 
 
(1,141
)
 
(922
)
 
Total before tax
 
 
349

 
304

 
Tax benefit
 
 
(792
)
 
(618
)
 
Net of tax
 
 
 
 
 
 
 
Pension and other postretirement benefit items
 
 
 
 
 
 
     Amortization of prior-service credits, net
 
$
192

 
$
167

 
(A)
Amortization of actuarial losses
 
(11,973
)
 
(7,125
)
 
(A)
Curtailment loss
 

 
(223
)
 
(A)
Settlement loss
 

 
(863
)
 
(A)
 
 
(11,781
)
 
(8,044
)
 
Total before tax
 
 
4,150

 
2,481

 
Tax benefit
 
 
(7,631
)
 
(5,563
)
 
Net of tax
 
 
 
 
 
 
 
Total reclassifications in the period
 
$
(8,423
)
 
$
(6,181
)
 
 

(A) These accumulated other comprehensive income (loss) components are included within the computation of net periodic pension cost. See Note 10.
Information on Business Segments (Tables)
Schedule of Segment Reporting Information, by Segment
The following tables set forth information about the Company's operations by its two reportable segments:
 
Three months ended September 30,
 
Nine months ended September 30,
 
2015
 
2014
 
2015
 
2014
Net sales
 
 
 
 
 
 
 
   Industrial
$
189,106

 
$
207,230

 
$
592,044

 
$
623,886

   Aerospace
102,329

 
110,429

 
314,910

 
327,951

   Intersegment sales
(1
)
 

 
(5
)
 
(5
)
Total net sales
$
291,434

 
$
317,659

 
$
906,949

 
$
951,832

 
 
 
 
 
 
 
 
Operating profit
 
 
 
 
 
 
 
   Industrial
$
27,304

 
$
33,205

 
$
88,262

 
$
81,344

   Aerospace
16,443

 
17,680

 
50,029

 
50,047

Total operating profit
43,747

 
50,885

 
138,291

 
131,391

   Interest expense
2,637

 
2,435

 
7,944

 
8,558

   Other (income) expense, net
(545
)
 
741

 
(228
)
 
1,768

Income from continuing operations before income taxes
$
41,655

 
$
47,709

 
$
130,575

 
$
121,065



 
September 30, 2015
 
December 31, 2014
Assets
 
 
 
   Industrial (A)
$
1,282,039

 
$
1,281,974

   Aerospace
645,555

 
655,042

   Other (B)
150,484

 
136,869

Total assets
$
2,078,078

 
$
2,073,885


(A) The change in assets within the Industrial segment primarily reflects an increase in assets resulting from the acquisition of Thermoplay partially offset by a reduction caused by a change in foreign exchange rates.
(B) "Other" assets include corporate-controlled assets, the majority of which are cash and deferred tax assets.
Acquisitions (Details)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended 0 Months Ended 2 Months Ended 9 Months Ended
Sep. 30, 2015
USD ($)
Sep. 30, 2014
USD ($)
Sep. 30, 2015
USD ($)
Sep. 30, 2014
USD ($)
Aug. 7, 2015
USD ($)
Dec. 31, 2014
USD ($)
Aug. 7, 2015
Thermoplay [Member]
USD ($)
Aug. 7, 2015
Thermoplay [Member]
EUR (€)
Sep. 30, 2015
Thermoplay [Member]
USD ($)
Sep. 30, 2015
Thermoplay [Member]
USD ($)
Aug. 7, 2015
Thermoplay [Member]
USD ($)
Aug. 7, 2015
Thermoplay [Member]
EUR (€)
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Purchase price
 
 
 
 
 
 
$ 64,608 
€ 58,903 
 
 
 
 
Cash payments
 
 
 
 
 
 
62,191 
56,700 
 
 
 
 
Payables to seller
 
 
 
 
 
 
2,416 
2,203 
 
 
 
 
Cash acquired
 
 
 
 
 
 
 
 
 
 
18,706 
17,054 
Intangible assets acquired
 
 
 
 
14,770 
 
 
 
 
 
14,770 
 
Goodwill acquired
595,131 
 
595,131 
 
 
594,949 
 
 
 
 
20,249 
 
Acquisition-related costs
 
 
 
 
 
 
 
 
 
2,239 
 
 
Net sales
$ 291,434 
$ 317,659 
$ 906,949 
$ 951,832 
 
 
 
 
$ 4,595 
 
 
 
Net Income Per Common Share (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
1 Months Ended 3 Months Ended 9 Months Ended
Feb. 28, 2015
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Net Income Per Common Share [Line Items]
 
 
 
 
 
Weighted average number of diluted shares outstanding adjustment (in shares)
 
388,777 
630,329 
507,197 
1,046,576 
Adjustments to net income for purposes of computing income available to common stockholders
 
$ 0 
$ 0 
$ 0 
$ 0 
Convertible Notes [Member] |
3.375% Convertible Notes
 
 
 
 
 
Net Income Per Common Share [Line Items]
 
 
 
 
 
Stated interest rate
 
3.375% 
 
3.375% 
 
Stock Options [Member]
 
 
 
 
 
Net Income Per Common Share [Line Items]
 
 
 
 
 
Antidilutive securities excluded from computation of EPS
 
209,102 
92,049 
203,001 
92,049 
Options, granted (in shares)
122,700 
 
 
 
 
Restricted Stock Units (RSUs) [Member]
 
 
 
 
 
Net Income Per Common Share [Line Items]
 
 
 
 
 
Other than options, granted (in shares)
106,685 
 
 
 
 
Performance Share Awards [Member]
 
 
 
 
 
Net Income Per Common Share [Line Items]
 
 
 
 
 
Other than options, granted (in shares)
85,465 
 
 
 
 
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% 
 
Inventories (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2015
Dec. 31, 2014
Inventory Disclosure [Abstract]
 
 
Finished goods
$ 78,712 
$ 83,905 
Work-in-process
80,099 
79,563 
Raw material and supplies
54,510 
48,576 
Inventories
$ 213,321 
$ 212,044 
Goodwill and Other Intangible Assets (Details) (USD $)
3 Months Ended 9 Months Ended 12 Months Ended 1 Months Ended 1 Months Ended 9 Months Ended 1 Months Ended 9 Months Ended
Jun. 30, 2015
Sep. 30, 2015
Sep. 30, 2014
Dec. 31, 2014
Aug. 7, 2015
Sep. 30, 2015
Trade name [Member]
Aug. 7, 2015
Trade name [Member]
Dec. 31, 2014
Trade name [Member]
Sep. 30, 2015
Revenue sharing programs (RSPs) [Member]
Dec. 31, 2014
Revenue sharing programs (RSPs) [Member]
Sep. 30, 2015
Component repair programs (CRPs) [Member]
Dec. 31, 2014
Component repair programs (CRPs) [Member]
Sep. 30, 2015
Customer lists/relationships [Member]
Dec. 31, 2014
Customer lists/relationships [Member]
Aug. 31, 2015
Patents and technology [Member]
Sep. 30, 2015
Patents and technology [Member]
Aug. 7, 2015
Patents and technology [Member]
Dec. 31, 2014
Patents and technology [Member]
Sep. 30, 2015
Trademarks/trade names [Member]
Dec. 31, 2014
Trademarks/trade names [Member]
Sep. 30, 2015
Other [Member]
Dec. 31, 2014
Other [Member]
Aug. 31, 2015
Customer relationships [Member]
Aug. 7, 2015
Customer relationships [Member]
Aug. 7, 2015
Customer backlog [Member]
Sep. 30, 2015
Minimum [Member]
Customer lists/relationships [Member]
Sep. 30, 2015
Minimum [Member]
Patents and technology [Member]
Sep. 30, 2015
Minimum [Member]
Trademarks/trade names [Member]
Sep. 30, 2015
Maximum [Member]
Revenue sharing programs (RSPs) [Member]
Sep. 30, 2015
Maximum [Member]
Component repair programs (CRPs) [Member]
Sep. 30, 2015
Maximum [Member]
Customer lists/relationships [Member]
Sep. 30, 2015
Maximum [Member]
Patents and technology [Member]
Sep. 30, 2015
Maximum [Member]
Trademarks/trade names [Member]
Sep. 30, 2015
Maximum [Member]
Other [Member]
Aug. 31, 2015
Maximum [Member]
Customer backlog [Member]
Sep. 30, 2015
Industrial [Member]
Sep. 30, 2015
Aerospace [Member]
Goodwill:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill, beginning of period
 
$ 594,949,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 564,163,000 
$ 30,786,000 
Goodwill acquired
 
20,249,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
20,249,000 
Foreign currency translation
 
(20,067,000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(20,067,000)
Goodwill, end of period
 
595,131,000 
 
594,949,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
564,345,000 
30,786,000 
Goodwill impairment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Intangible Assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Range of life
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10 years 
7 years 
10 years 
30 years 
30 years 
16 years 
14 years 
30 years 
15 years 
 
 
 
Gross Amount
 
688,259,000 
 
677,959,000 
 
 
 
 
293,700,000 
293,700,000 
106,639,000 
106,639,000 
193,266,000 
183,406,000 
 
66,152,000 
 
62,972,000 
11,950,000 
11,950,000 
16,552,000 
19,292,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accumulated Amortization
 
(178,046,000)
 
(151,344,000)
 
 
 
 
(82,137,000)
(72,958,000)
(4,996,000)
(1,941,000)
(38,978,000)
(30,731,000)
 
(27,619,000)
 
(22,356,000)
(9,215,000)
(8,552,000)
(15,101,000)
(14,806,000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unamortized intangible asset
 
 
 
 
 
38,370,000 
 
36,900,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency translation
 
(20,532,000)
 
(8,821,000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other intangible assets
 
706,097,000 
 
706,038,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Intangible Assets, Future Amortization Expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of intangible assets expected in 2015
 
41,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of intangible assets expected in 2016
 
36,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of intangible assets expected in 2017
 
36,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of intangible assets expected in 2018
 
37,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of intangible assets expected in 2019
 
35,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Intangible assets acquired
 
 
 
 
14,770,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Finite-lived intangibles acquired
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3,180,000 
 
 
 
 
 
 
9,860,000 
260,000 
 
 
 
 
 
 
 
 
 
 
 
 
Indefinite-lived intangibles acquired
 
 
 
 
 
 
1,470,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted-average useful life
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6 years 
 
 
 
 
 
 
 
13 years 
 
 
 
 
 
 
 
 
 
 
 
1 year 
 
 
Component Repair Program payments consideration
 
 
80,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Component Repair Program payments
$ 19,000,000 
$ 19,000,000 
$ 41,000,000 
$ 61,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt (Details)
0 Months Ended 0 Months Ended 9 Months Ended
Sep. 30, 2015
USD ($)
Dec. 31, 2014
USD ($)
Sep. 30, 2015
Revolving Credit Agreement [Member]
USD ($)
Dec. 31, 2014
Revolving Credit Agreement [Member]
USD ($)
Sep. 27, 2013
Revolving Credit Agreement [Member]
USD ($)
Sep. 30, 2015
Revolving Credit Agreement [Member]
Euro Member Countries, Euro
USD ($)
Sep. 30, 2015
Revolving Credit Agreement [Member]
Euro Member Countries, Euro
EUR (€)
Dec. 31, 2014
Revolving Credit Agreement [Member]
Euro Member Countries, Euro
USD ($)
Dec. 31, 2014
Revolving Credit Agreement [Member]
Euro Member Countries, Euro
EUR (€)
Sep. 27, 2013
Revolving Credit Agreement [Member]
London Interbank Offered Rate (LIBOR) [Member]
Minimum [Member]
Sep. 27, 2013
Revolving Credit Agreement [Member]
London Interbank Offered Rate (LIBOR) [Member]
Maximum [Member]
Oct. 15, 2014
Senior Notes [Member]
Minimum [Member]
Oct. 15, 2014
Senior Notes [Member]
Maximum [Member]
Sep. 30, 2015
Senior Notes [Member]
3.97% Senior Notes [Member]
USD ($)
Dec. 31, 2014
Senior Notes [Member]
3.97% Senior Notes [Member]
USD ($)
Oct. 15, 2014
Senior Notes [Member]
3.97% Senior Notes [Member]
USD ($)
Oct. 15, 2014
Senior Notes [Member]
Adjusted for Certain Acquisitons [Member]
Maximum [Member]
Sep. 27, 2013
Revolving Credit Agreement [Member]
USD ($)
Sep. 27, 2013
Revolving Credit Agreement [Member]
London Interbank Offered Rate (LIBOR) [Member]
Sep. 30, 2015
Lines of Credit and Overdrafts [Member]
USD ($)
Dec. 31, 2014
Lines of Credit and Overdrafts [Member]
USD ($)
Sep. 30, 2015
Foreign bank borrowings [Member]
USD ($)
Dec. 31, 2014
Foreign bank borrowings [Member]
USD ($)
Sep. 30, 2015
Lines of Credit [Member]
USD ($)
Dec. 31, 2014
Lines of Credit [Member]
USD ($)
Sep. 30, 2015
Bank Overdrafts [Member]
USD ($)
Dec. 31, 2014
Bank Overdrafts [Member]
USD ($)
Sep. 30, 2015
Capital Lease Obligations [Member]
USD ($)
Dec. 31, 2014
Capital Lease Obligations [Member]
USD ($)
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Carrying amount of debt
 
 
$ 361,312,000 
$ 393,518,000 
 
$ 1,012,000 
€ 900,000 
$ 37,618,000 
€ 30,945,000 
 
 
 
 
$ 100,000,000 
$ 100,000,000 
 
 
 
 
 
 
$ 449,000 
$ 0 
 
 
 
 
$ 7,724,000 
$ 3,188,000 
Fair value of debt
482,725,000 
509,283,000 
357,962,000 
394,917,000 
 
 
 
 
 
 
 
 
 
105,551,000 
102,859,000 
 
 
 
 
10,509,000 
8,028,000 
447,000 
 
 
 
 
8,256,000 
3,479,000 
Borrowings under lines of credit and overdrafts
10,509,000 
8,028,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10,509,000 
8,028,000 
 
 
10,500,000 
7,550,000 
9,000 
478,000 
 
 
Total debt, net of unamortized discounts
479,994,000 
504,734,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Less current maturities
(12,032,000)
(8,890,000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Long-term debt
467,962,000 
495,844,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stated interest rate
 
 
1.30% 
1.33% 
 
 
 
 
 
 
 
 
 
 
 
3.97% 
 
 
 
 
 
 
 
 
 
 
 
 
 
Converted amount with accrued interest
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
100,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Percent allowed to be prepaid
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
100.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
Line of credit facility, maximum borrowing capacity
 
 
 
 
750,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
500,000,000 
 
 
 
 
 
56,000,000 
 
 
 
 
 
Line of credit facility with accordian feature, maximum borrowing capacity
 
 
 
 
1,000,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Variable rate basis
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LIBOR 
 
 
 
 
 
 
 
 
 
 
Variable basis spread
 
 
 
 
 
 
 
 
 
1.10% 
1.70% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Remaining borrowing capacity
 
 
$ 388,688,000 
$ 356,482,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt covenant ratio of senior debt to EBITDA
 
 
 
 
 
 
 
 
 
 
 
 
3.25 
 
 
 
3.50 
 
 
 
 
 
 
 
 
 
 
 
 
Debt covenant ratio of total debt to EBITDA
 
 
 
 
 
 
 
 
 
 
 
 
4.00 
 
 
 
4.25 
 
 
 
 
 
 
 
 
 
 
 
 
Debt covenant ratio of EBITDA to cash interest expense
 
 
 
 
 
 
 
 
 
 
 
4.25 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Line of credit, interest rate at period end
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1.41% 
1.23% 
 
 
 
 
Repayment period
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2 days 
 
 
 
Business Reorganization (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2014
employee
Sep. 30, 2014
Restructuring Cost and Reserve [Line Items]
 
 
Number of positions eliminated
50 
 
Restructuring charges
 
$ 5,552 
One-time Termination Benefits [Member]
 
 
Restructuring Cost and Reserve [Line Items]
 
 
Restructuring charges
 
2,167 
Facility Closing [Member]
 
 
Restructuring Cost and Reserve [Line Items]
 
 
Restructuring charges
 
$ 3,385 
Derivatives (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2015
Dec. 31, 2014
Derivative Assets (Liabilities), at Fair Value, Net, by Balance Sheet Classification [Abstract]
 
 
Derivative Assets
$ 148 
$ 460 
Derivative Liabilities
(1,294)
(1,646)
Designated as Hedging Instrument [Member] |
Interest Rate Contract [Member]
 
 
Derivative Assets (Liabilities), at Fair Value, Net, by Balance Sheet Classification [Abstract]
 
 
Derivative Assets
Derivative Liabilities
(805)
(295)
Designated as Hedging Instrument [Member] |
Foreign Exchange Contract [Member]
 
 
Derivative Assets (Liabilities), at Fair Value, Net, by Balance Sheet Classification [Abstract]
 
 
Derivative Assets
Derivative Liabilities
(79)
(652)
Not Designated as Hedging Instrument [Member] |
Foreign Exchange Contract [Member]
 
 
Derivative Assets (Liabilities), at Fair Value, Net, by Balance Sheet Classification [Abstract]
 
 
Derivative Assets
148 
460 
Derivative Liabilities
$ (410)
$ (699)
Derivatives (Details 1) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Foreign Exchange Contract [Member]
Sep. 30, 2015
Designated as Hedging Instrument [Member]
Cash Flow Hedging [Member]
Sep. 30, 2014
Designated as Hedging Instrument [Member]
Cash Flow Hedging [Member]
Sep. 30, 2015
Designated as Hedging Instrument [Member]
Cash Flow Hedging [Member]
Sep. 30, 2014
Designated as Hedging Instrument [Member]
Cash Flow Hedging [Member]
Sep. 30, 2015
Designated as Hedging Instrument [Member]
Cash Flow Hedging [Member]
Interest Rate Contract [Member]
Sep. 30, 2014
Designated as Hedging Instrument [Member]
Cash Flow Hedging [Member]
Interest Rate Contract [Member]
Sep. 30, 2015
Designated as Hedging Instrument [Member]
Cash Flow Hedging [Member]
Interest Rate Contract [Member]
Sep. 30, 2014
Designated as Hedging Instrument [Member]
Cash Flow Hedging [Member]
Interest Rate Contract [Member]
Sep. 30, 2015
Designated as Hedging Instrument [Member]
Cash Flow Hedging [Member]
Foreign Exchange Contract [Member]
Sep. 30, 2014
Designated as Hedging Instrument [Member]
Cash Flow Hedging [Member]
Foreign Exchange Contract [Member]
Sep. 30, 2015
Designated as Hedging Instrument [Member]
Cash Flow Hedging [Member]
Foreign Exchange Contract [Member]
Sep. 30, 2014
Designated as Hedging Instrument [Member]
Cash Flow Hedging [Member]
Foreign Exchange Contract [Member]
Sep. 30, 2015
Not Designated as Hedging Instrument [Member]
Foreign Exchange Contract [Member]
Sep. 30, 2014
Not Designated as Hedging Instrument [Member]
Foreign Exchange Contract [Member]
Sep. 30, 2015
Not Designated as Hedging Instrument [Member]
Foreign Exchange Contract [Member]
Sep. 30, 2014
Not Designated as Hedging Instrument [Member]
Foreign Exchange Contract [Member]
Dec. 31, 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
 
 
 
 
 
(174)
564 
127 
33 
(151)
312 
(320)
169 
(23)
252 
447 
(136)
 
 
 
 
 
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(2,431)
141 
4,514 
(847)
 
Other
 
 
$ 6,341 
$ (185)
$ 6,761 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair Value Measurements (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2015
Dec. 31, 2014
Sep. 30, 2015
Quoted Prices in Active Markets for Identical Assets (Level 1)
Dec. 31, 2014
Quoted Prices in Active Markets for Identical Assets (Level 1)
Sep. 30, 2015
Significant Other Observable Inputs (Level 2)
Dec. 31, 2014
Significant Other Observable Inputs (Level 2)
Sep. 30, 2015
Significant Unobservable Inputs (Level 3)
Dec. 31, 2014
Significant Unobservable Inputs (Level 3)
Sep. 30, 2015
Estimate of Fair Value, Fair Value Disclosure [Member]
Dec. 31, 2014
Estimate of Fair Value, Fair Value Disclosure [Member]
Sep. 30, 2015
Minimum [Member]
Sep. 30, 2015
Maximum [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Asset derivatives
$ 148 
$ 460 
$ 0 
$ 0 
$ 148 
$ 460 
$ 0 
$ 0 
$ 148 
$ 460 
 
 
Liability derivatives
(1,294)
(1,646)
(1,294)
(1,646)
(1,294)
(1,646)
 
 
Bank acceptances
 
 
14,732 
10,785 
14,732 
10,785 
 
 
Rabbi trust assets
 
 
2,065 
2,092 
2,065 
2,092 
 
 
Financial assets and financial liabilities, reported at fair value
 
 
$ 2,065 
$ 2,092 
$ 13,586 
$ 9,599 
$ 0 
$ 0 
$ 15,651 
$ 11,691 
 
 
Maturity of bank acceptances
 
 
 
 
 
 
 
 
 
 
3 months 
6 months 
Pension and Other Postretirement Benefits (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Pensions [Member]
 
 
 
 
Pension and other postretirement benefits expenses
 
 
 
 
Service cost
$ 1,374 
$ 1,132 
$ 4,126 
$ 3,439 
Interest cost
4,976 
5,455 
14,968 
16,432 
Expected return on plan assets
(8,048)
(8,476)
(24,207)
(25,529)
Amortization of prior service cost (credit)
76 
152 
231 
486 
Amortization of actuarial losses
3,730 
2,141 
11,215 
6,374 
Curtailment loss
219 
Settlement loss
281 
863 
Special termination benefits
715 
Net periodic benefit cost
2,108 
685 
6,333 
2,999 
Other Postretirement Benefits [Member]
 
 
 
 
Pension and other postretirement benefits expenses
 
 
 
 
Service cost
36 
29 
109 
110 
Interest cost
459 
540 
1,377 
1,638 
Amortization of prior service cost (credit)
(141)
(218)
(423)
(653)
Amortization of actuarial losses
253 
268 
758 
751 
Curtailment loss
Net periodic benefit cost
$ 607 
$ 619 
$ 1,821 
$ 1,850 
Income Taxes (Details)
9 Months Ended 12 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Dec. 31, 2014
Income Tax Disclosure [Abstract]
 
 
 
Effective tax rate
25.70% 
27.90% 
27.60% 
Changes in Accumulated Other Comprehensive Income (Loss) by Component (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Changes in Accumulated Other Comprehensive Income by Component [Roll Forward]
 
 
 
 
Accumulated other comprehensive income (loss)
 
 
$ (99,453)
$ 25,944 
Other comprehensive (loss) income before reclassifications to consolidated statements of income
 
 
(38,100)
(59,503)
Amounts reclassified from accumulated other comprehensive income (loss) to the consolidated statements of income
 
 
8,423 
6,181 
Net current-period other comprehensive income (loss)
(19,304)
(37,852)
(29,677)
(53,322)
Accumulated other comprehensive income (loss)
(129,130)
(27,378)
(129,130)
(27,378)
Gains and Losses on Cash Flow Hedges
 
 
 
 
Changes in Accumulated Other Comprehensive Income by Component [Roll Forward]
 
 
 
 
Accumulated other comprehensive income (loss)
 
 
(732)
(519)
Other comprehensive (loss) income before reclassifications to consolidated statements of income
 
 
(665)
(585)
Amounts reclassified from accumulated other comprehensive income (loss) to the consolidated statements of income
 
 
792 
618 
Net current-period other comprehensive income (loss)
 
 
127 
33 
Accumulated other comprehensive income (loss)
(605)
(486)
(605)
(486)
Pension and Other Postretirement Benefit Items
 
 
 
 
Changes in Accumulated Other Comprehensive Income by Component [Roll Forward]
 
 
 
 
Accumulated other comprehensive income (loss)
 
 
(115,289)
(73,273)
Other comprehensive (loss) income before reclassifications to consolidated statements of income
 
 
1,412 
(7,081)
Amounts reclassified from accumulated other comprehensive income (loss) to the consolidated statements of income
 
 
7,631 
5,563 
Net current-period other comprehensive income (loss)
 
 
9,043 
(1,518)
Accumulated other comprehensive income (loss)
(106,246)
(74,791)
(106,246)
(74,791)
Foreign Currency Items
 
 
 
 
Changes in Accumulated Other Comprehensive Income by Component [Roll Forward]
 
 
 
 
Accumulated other comprehensive income (loss)
 
 
16,568 
99,736 
Other comprehensive (loss) income before reclassifications to consolidated statements of income
 
 
(38,847)
(51,837)
Amounts reclassified from accumulated other comprehensive income (loss) to the consolidated statements of income
 
 
Net current-period other comprehensive income (loss)
 
 
(38,847)
(51,837)
Accumulated other comprehensive income (loss)
$ (22,279)
$ 47,899 
$ (22,279)
$ 47,899 
Changes in Accumulated Other Comprehensive Income (Loss) by Component (Details 2) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
 
 
 
 
Interest expense
$ (2,637)
$ (2,435)
$ (7,944)
$ (8,558)
Net sales
291,434 
317,659 
906,949 
951,832 
Income from continuing operations before income taxes
41,655 
47,709 
130,575 
121,065 
Tax benefit
(7,984)
(13,407)
(33,601)
(33,782)
Income from continuing operations
33,671 
34,302 
96,974 
87,283 
Total reclassifications in the period
33,671 
33,877 
96,974 
86,858 
Reclassification out of Accumulated Other Comprehensive Income [Member]
 
 
 
 
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
 
 
 
 
Total reclassifications in the period
(2,776)
(2,137)
(8,423)
(6,181)
Reclassification out of Accumulated Other Comprehensive Income [Member] |
Gains and Losses on Cash Flow Hedges
 
 
 
 
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
 
 
 
 
Income from continuing operations before income taxes
(351)
(463)
(1,141)
(922)
Tax benefit
110 
136 
349 
304 
Income from continuing operations
(241)
(327)
(792)
(618)
Reclassification out of Accumulated Other Comprehensive Income [Member] |
Gains and Losses on Cash Flow Hedges |
Interest Rate Contract [Member]
 
 
 
 
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
 
 
 
 
Interest expense
(214)
(224)
(642)
(663)
Reclassification out of Accumulated Other Comprehensive Income [Member] |
Gains and Losses on Cash Flow Hedges |
Foreign Exchange Contract [Member]
 
 
 
 
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
 
 
 
 
Net sales
(137)
(239)
(499)
(259)
Reclassification out of Accumulated Other Comprehensive Income [Member] |
Pension and Other Postretirement Benefit Items
 
 
 
 
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
 
 
 
 
Income from continuing operations before income taxes
(3,918)
(2,624)
(11,781)
(8,044)
Tax benefit
1,383 
814 
4,150 
2,481 
Income from continuing operations
(2,535)
(1,810)
(7,631)
(5,563)
Amortization of prior-service credits, net
65 
66 
192 
167 
Amortization of actuarial losses
(3,983)
(2,409)
(11,973)
(7,125)
Curtailment loss
 
 
(223)
Settlement loss
$ 0 
$ (281)
$ 0 
$ (863)
Information on Business Segments (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Segment
Sep. 30, 2014
Segment Reporting Information [Line Items]
 
 
 
 
Number of reportable segments
 
 
 
Net sales
$ 291,434 
$ 317,659 
$ 906,949 
$ 951,832 
Operating profit
43,747 
50,885 
138,291 
131,391 
Interest expense
2,637 
2,435 
7,944 
8,558 
Other (income) expense, net
(545)
741 
(228)
1,768 
Income from continuing operations before income taxes
41,655 
47,709 
130,575 
121,065 
Aerospace [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Net sales
102,329 
110,429 
314,910 
327,951 
Industrial [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Net sales
189,106 
207,230 
592,044 
623,886 
Operating profit
27,304 
33,205 
88,262 
81,344 
Intersegment sales [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Net sales
$ (1)
$ 0 
$ (5)
$ (5)
Information on Business Segments Details 1 (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2015
Dec. 31, 2014
Segment Reporting Information [Line Items]
 
 
Assets
$ 2,078,078 
$ 2,073,885 
Aerospace [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Assets
645,555 
655,042 
Industrial [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Assets
1,282,039 
1,281,974 
Other [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Assets
$ 150,484 
$ 136,869 
Commitments and Contingencies (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Sep. 30, 2015
Commitments and Contingencies Disclosure [Abstract]
 
Charge related to a contract termination dispute
$ 2,788 
Subsequent Event (Details) (Subsequent Event [Member], Priamus System Technologies AG [Member])
In Thousands, unless otherwise specified
0 Months Ended
Oct. 1, 2015
USD ($)
Oct. 1, 2015
CHF
Oct. 1, 2015
subsidiary
employee
Subsequent Event [Line Items]
 
 
 
Business Combination, Number of Subsidiaries Acquired of Main Acquiree
 
 
Business Combination, Number of Employees
 
 
40 
Purchase price
$ 9,211 
 9,000