|LINCOLN ELECTRIC HOLDINGS INC filed this Form 10-Q on 10/30/2017|
LINCOLN ELECTRIC HOLDINGS, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Dollars in thousands, except per share amounts
The maturity and interest rates of the 2016 Notes are as follows:
The Company's total weighted average effective interest rate and weighted average initial tenure, inclusive of the 2015 Notes and 2016 Notes, is 3.3% and 18 years, respectively.
NOTE 11 — RETIREMENT AND POSTRETIREMENT BENEFIT PLANS
The components of total pension cost were as follows:
(1) The amortization of net loss during the nine months ended September 30, 2016 includes a $959 charge resulting from the deconsolidation of the Venezuelan subsidiary.
(3) The increase for the three and nine months ended September 30, 2017 as compared to the prior year periods reflect pension settlement charges and higher defined contribution plan expense related to the Company's amended U.S. defined contribution plan that was effective January 1, 2017, partially offset by lower service cost and lower amortization of net losses related to the defined benefit plan freeze effective December 31, 2016.
NOTE 12 — INCOME TAXES
The Company recognized $69,218 of tax expense on pretax income of $292,508, resulting in an effective income tax rate of 23.7% for the nine months ended September 30, 2017. The effective income tax rate was 27.2% for the nine months ended September 30, 2016. The 2017 effective tax rate was lower than the Company's statutory rate primarily due to the nontaxable bargain purchase gain recorded during the current period in connection with the acquisition of Air Liquide Welding, excess tax benefits resulting from exercising of stock-based compensation awards and income earned in lower tax rate jurisdictions. The 2016 effective tax rate was lower than the Company's statutory rate primarily due to the utilization of U.S. tax credits, income earned in lower tax rate jurisdictions, the reversal of an income tax valuation allowance as a result of a legal entity change and an income tax benefit related to a worthless stock deduction of a foreign subsidiary.
As of September 30, 2017, the Company had $16,006 of unrecognized tax benefits. If recognized, approximately $11,876 would be reflected as a component of income tax expense.