Exhibit 99.1 Lincoln Electric Holdings, Inc. Update Morgan Stanley Virtual Laguna Conference September 16, 2020Exhibit 99.1 Lincoln Electric Holdings, Inc. Update Morgan Stanley Virtual Laguna Conference September 16, 2020
Safe Harbor and Regulation G Disclosures Forward-Looking Statements: Statements made during this presentation which are not historical facts may be considered forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause actual events or results to differ materially from those expressed or implied. Forward-looking statements generally can be identified by the use of words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “forecast,” “guidance” or words of similar meaning. For further information concerning issues that could materially affect financial performance related to forward-looking statements, please refer to Lincoln Electric’s quarterly earnings releases and periodic filings with the Securities and Exchange Commission, which can be found on www.sec.gov or on www.lincolnelectric.com. Non-GAAP Measures: Our management uses non-GAAP financial measures in assessing and evaluating the Company’s performance, which exclude items we consider unusual or special items. We believe the use of such financial measures and information may be useful to investors. Non-GAAP financial measures should be read in conjunction with the GAAP financial measures, as non- GAAP measures are a supplement to, and not a replacement for, GAAP financial measures. Please refer to the attached schedule for a reconciliation of non-GAAP financial measures to the related GAAP financial measures. 2Safe Harbor and Regulation G Disclosures Forward-Looking Statements: Statements made during this presentation which are not historical facts may be considered forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause actual events or results to differ materially from those expressed or implied. Forward-looking statements generally can be identified by the use of words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “forecast,” “guidance” or words of similar meaning. For further information concerning issues that could materially affect financial performance related to forward-looking statements, please refer to Lincoln Electric’s quarterly earnings releases and periodic filings with the Securities and Exchange Commission, which can be found on www.sec.gov or on www.lincolnelectric.com. Non-GAAP Measures: Our management uses non-GAAP financial measures in assessing and evaluating the Company’s performance, which exclude items we consider unusual or special items. We believe the use of such financial measures and information may be useful to investors. Non-GAAP financial measures should be read in conjunction with the GAAP financial measures, as non- GAAP measures are a supplement to, and not a replacement for, GAAP financial measures. Please refer to the attached schedule for a reconciliation of non-GAAP financial measures to the related GAAP financial measures. 2
Operating Globally and Positioned to Respond to COVID-19 Challenges » Remain focused on safety: Implemented CDC and WHO best practice measures to protect employee health – Heightened hygiene and sanitation practices – Social distancing and safety protocols – Maximizing flexible and remote work arrangements » Lincoln facilities are operating as “essential businesses” focused on serving customers – Sufficient inventory levels have been built to maintain high service levels to support a recovery – Reopened our HQ Cleveland facility in Mid-May for customer visits – Launching and investing in new products 3Operating Globally and Positioned to Respond to COVID-19 Challenges » Remain focused on safety: Implemented CDC and WHO best practice measures to protect employee health – Heightened hygiene and sanitation practices – Social distancing and safety protocols – Maximizing flexible and remote work arrangements » Lincoln facilities are operating as “essential businesses” focused on serving customers – Sufficient inventory levels have been built to maintain high service levels to support a recovery – Reopened our HQ Cleveland facility in Mid-May for customer visits – Launching and investing in new products 3
Order Rates Continue to Improve in the Third Quarter (QTD) » Q3: July order rates trended down high-teens percent and August order rates continue to improve » All reportable segments recovering from the April trough » Energy and Heavy Industries sectors are the most challenged » Q2 order rates improved through the quarter from a low -40% April trough (Q2 organic sales performance -24.8%) » Shape of the recovery remains unknown with the risk of new shutdowns 4Order Rates Continue to Improve in the Third Quarter (QTD) » Q3: July order rates trended down high-teens percent and August order rates continue to improve » All reportable segments recovering from the April trough » Energy and Heavy Industries sectors are the most challenged » Q2 order rates improved through the quarter from a low -40% April trough (Q2 organic sales performance -24.8%) » Shape of the recovery remains unknown with the risk of new shutdowns 4
Expanded Our 2020 Cost Reduction Initiatives and Estimated Benefits » Achieved $27 million in cost saving benefits in Q2 and $33 million in H1-2020, primarily from temporary cost reductions Expect $55 to $65 million of » Implemented cost reduction actions: realized cost savings in 2020 – Reduced work hours, overtime, headcount and contractor use – Reduced discretionary spending and travel Approximately 35% of 2020 cost – Suspended new hiring savings are permanent – Initiated five facility rationalizations year to date – Deferring annual wage increases Expect to exit 2020 at $8 to $9 – Limited capital investments to cost savings projects and growth initiatives million in permanent cost savings per quarter » Realized $23.2 million in pre-tax rationalization and asset impairment charges in Q2-2020 5Expanded Our 2020 Cost Reduction Initiatives and Estimated Benefits » Achieved $27 million in cost saving benefits in Q2 and $33 million in H1-2020, primarily from temporary cost reductions Expect $55 to $65 million of » Implemented cost reduction actions: realized cost savings in 2020 – Reduced work hours, overtime, headcount and contractor use – Reduced discretionary spending and travel Approximately 35% of 2020 cost – Suspended new hiring savings are permanent – Initiated five facility rationalizations year to date – Deferring annual wage increases Expect to exit 2020 at $8 to $9 – Limited capital investments to cost savings projects and growth initiatives million in permanent cost savings per quarter » Realized $23.2 million in pre-tax rationalization and asset impairment charges in Q2-2020 5
Solid Balance Sheet and Increased Liquidity in Q2 (Data as of June 30, 2020) » Investment grade profile balance » Ample Liquidity of $545M as we sheet reduced debt by $83M in Q2 ‒ Cash: $143M ‒ Total debt/EBITDA: 1.97x 1 ‒ Net debt /EBITDA: 1.46x ‒ Available lines of credit: $402M » Total debt: $765M // Net debt: $622M » Expect continued generation of cash flows 2 from reductions in working capital in 2020 » Debt Covenant: 3.5x Total Debt/EBITDA » $700M in private Notes » >100% cash conversion expected in 2020 ‒ 3.3% interest rate with 14-year tenor ‒ First maturity August, 2025 » $25M annual interest expense in 2020 1 Net Debt is defined as Total debt less Cash and cash equivalents 6 2 Debt covenant ratios use a credit agreement adjusted EBITDA definition which differs slightly from standard EBITDA calculationsSolid Balance Sheet and Increased Liquidity in Q2 (Data as of June 30, 2020) » Investment grade profile balance » Ample Liquidity of $545M as we sheet reduced debt by $83M in Q2 ‒ Cash: $143M ‒ Total debt/EBITDA: 1.97x 1 ‒ Net debt /EBITDA: 1.46x ‒ Available lines of credit: $402M » Total debt: $765M // Net debt: $622M » Expect continued generation of cash flows 2 from reductions in working capital in 2020 » Debt Covenant: 3.5x Total Debt/EBITDA » $700M in private Notes » >100% cash conversion expected in 2020 ‒ 3.3% interest rate with 14-year tenor ‒ First maturity August, 2025 » $25M annual interest expense in 2020 1 Net Debt is defined as Total debt less Cash and cash equivalents 6 2 Debt covenant ratios use a credit agreement adjusted EBITDA definition which differs slightly from standard EBITDA calculations
A Pioneer with Market-Leading Technology A global manufacturer and market leader with 125 years of expertise. Distinguished by an unwavering commitment to customers, employees and shareholders. » Founded in 1895 » HQ in Cleveland, Ohio, U.S.A. » $3.0B in revenue in 2019 » 59 manufacturing facilities in 18 countries » Market cap of ~$5.4B » Distribution to over 160 countries » Nasdaq Listed: ‘LECO’ » 11,000 employees worldwide 7A Pioneer with Market-Leading Technology A global manufacturer and market leader with 125 years of expertise. Distinguished by an unwavering commitment to customers, employees and shareholders. » Founded in 1895 » HQ in Cleveland, Ohio, U.S.A. » $3.0B in revenue in 2019 » 59 manufacturing facilities in 18 countries » Market cap of ~$5.4B » Distribution to over 160 countries » Nasdaq Listed: ‘LECO’ » 11,000 employees worldwide 7
Lincoln Electric Investment Highlights Predictable Solid cash Disciplined Leader in Track record model enables conversion capital complete of defending higher dividend ratio deployment solutions and margins even payout delivers top application in a down cycle quartile returns expertise 13.7% 13.6% #1 Global 18.9% 101% Adj. Operating 1 CAGR Provider of ROIC 1 3-Year Avg. Income Margin Solutions 2011-2020 3-Year Avg. (5-Yr Average) 1 8 Adjusted operating income margin excludes special items. Please refer to the appendix for definitions and reconciliations of non-GAAP financial measures.Lincoln Electric Investment Highlights Predictable Solid cash Disciplined Leader in Track record model enables conversion capital complete of defending higher dividend ratio deployment solutions and margins even payout delivers top application in a down cycle quartile returns expertise 13.7% 13.6% #1 Global 18.9% 101% Adj. Operating 1 CAGR Provider of ROIC 1 3-Year Avg. Income Margin Solutions 2011-2020 3-Year Avg. (5-Yr Average) 1 8 Adjusted operating income margin excludes special items. Please refer to the appendix for definitions and reconciliations of non-GAAP financial measures.
Diversified Products and Reach 1 1 Net Sales by Product Area Net Sales by Segment International 28% Welding Equipment 43% Americas Welding Consumables 11% 61% The Harris (filler metals) Products Group 57% 9 1 Reflects FY2019 revenueDiversified Products and Reach 1 1 Net Sales by Product Area Net Sales by Segment International 28% Welding Equipment 43% Americas Welding Consumables 11% 61% The Harris (filler metals) Products Group 57% 9 1 Reflects FY2019 revenue
Leading Provider Across Diverse End Markets $22B Global Arc Welding, Brazing & Cutting Lincoln Electric Revenue Mix by 1 2 Industry Market Share Estimates End Market Sector 10% Construction & LECO Infrastructure Others 33% 17% General Automotive & Colfax Fabrication Transportation 18% ITW Heavy 22% 3 Kemppi Industries Energy & Hyundai Process OTC Big Bridge Hypertherm Industries Atlantic Kobelco Fronius Golden Bridge Panasonic Bohler LECO is one of only three global providers to offer a complete solution 1 Amounts based on Company estimates of the 2018 market and includes sales of equity affiliates 10 2 Reflects revenue mix estimates from Lincoln Electric (direct & distributor channels) 3 Heavy Industries includes heavy fabrication, ship building and maintenance & repairLeading Provider Across Diverse End Markets $22B Global Arc Welding, Brazing & Cutting Lincoln Electric Revenue Mix by 1 2 Industry Market Share Estimates End Market Sector 10% Construction & LECO Infrastructure Others 33% 17% General Automotive & Colfax Fabrication Transportation 18% ITW Heavy 22% 3 Kemppi Industries Energy & Hyundai Process OTC Big Bridge Hypertherm Industries Atlantic Kobelco Fronius Golden Bridge Panasonic Bohler LECO is one of only three global providers to offer a complete solution 1 Amounts based on Company estimates of the 2018 market and includes sales of equity affiliates 10 2 Reflects revenue mix estimates from Lincoln Electric (direct & distributor channels) 3 Heavy Industries includes heavy fabrication, ship building and maintenance & repair
Innovation Drivers Automated Joining & Large-Scale Metal Equipment Efficiency & Industry-Driven Industry 4.0 & Data Cutting Systems and Additive Solutions Proprietary Waveforms Solutions Cell Components Standard weld start Weld start Uses robotic arc and laser Automated arc welding, using LECO’s hot wire additive process laser, laser hot wire & advanced plasma solutions technologies (flexible & mechanized) 11Innovation Drivers Automated Joining & Large-Scale Metal Equipment Efficiency & Industry-Driven Industry 4.0 & Data Cutting Systems and Additive Solutions Proprietary Waveforms Solutions Cell Components Standard weld start Weld start Uses robotic arc and laser Automated arc welding, using LECO’s hot wire additive process laser, laser hot wire & advanced plasma solutions technologies (flexible & mechanized) 11
Innovation Investments Drive Growth R&D Spend 1 Solid Vitality Index 1.9% 2.0% 1.9% ($ millions) 1.8% $55 2.0% 1.8% 1.5% $45 1.5% 1.4% ~34% of 2019 1.5% 1.3% 1.2% $35 consolidated sales from new $57 $54 $25 1.0% $48 $47 $44 $42 $43 products $37 $33 $15 $29 0.5% $5 ~53% of 2019 equipment $(5) 0.0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 sales from new products R&D Spend % of Sales New HyperFill™ Process Next Generation Engine Drive ® » Patent-pending dual wire MIG process uses new » New Ranger 330MPX engine drive accessories and software to increase productivity and » More efficient: 31% smaller; 25% lighter; 60% simplicity quieter vs. prior model » Increases welding productivity by 50+% » Quick set up simplifies the user’s experience » Designed for both manual and automated welding ® » CrossLinc enhances safety and productivity operations in general and heavy fabrication applications 1 12 Vitality Index reflects percent of product sales from new products in the Company, excluding the International Welding Segment. New products are defined as solutions launched within the last five years and excludes customized automation sales.Innovation Investments Drive Growth R&D Spend 1 Solid Vitality Index 1.9% 2.0% 1.9% ($ millions) 1.8% $55 2.0% 1.8% 1.5% $45 1.5% 1.4% ~34% of 2019 1.5% 1.3% 1.2% $35 consolidated sales from new $57 $54 $25 1.0% $48 $47 $44 $42 $43 products $37 $33 $15 $29 0.5% $5 ~53% of 2019 equipment $(5) 0.0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 sales from new products R&D Spend % of Sales New HyperFill™ Process Next Generation Engine Drive ® » Patent-pending dual wire MIG process uses new » New Ranger 330MPX engine drive accessories and software to increase productivity and » More efficient: 31% smaller; 25% lighter; 60% simplicity quieter vs. prior model » Increases welding productivity by 50+% » Quick set up simplifies the user’s experience » Designed for both manual and automated welding ® » CrossLinc enhances safety and productivity operations in general and heavy fabrication applications 1 12 Vitality Index reflects percent of product sales from new products in the Company, excluding the International Welding Segment. New products are defined as solutions launched within the last five years and excludes customized automation sales.
New “Higher Standard 2025” Strategy Builds on Prior Achievements Customer Focused Continued Focus on • Make it easier to do business with us Best-in-Class Financial • Invest in industry segment teams and global weld Performance tech centers to improve engagement Employee Development Sales Growth • Improve opportunities to learn and grow (organic & inorganic) • Expand development programming and employee resource groups Improving Average Operating Income Margin Solutions & Value Through the Cycle • Improve customers’ ability to make their products better, safer and easier 1 Top Quartile ROIC • Target $1B in automation & additive sales by 2025 • Enhance software solutions (IoT, AI) Top Decile Average • Expand differentiated solutions Operating Working 1 Operational Excellence Capital Ratio • Improve our quality, costs & processes 2 • Achieve our environmental, health & safety goals • Maximize the Lincoln Business System • Digitize operations and processes 1 13 Versus proxy peers 2 2025 environmental and safety goals are presented on slide 23 New “Higher Standard 2025” Strategy Builds on Prior Achievements Customer Focused Continued Focus on • Make it easier to do business with us Best-in-Class Financial • Invest in industry segment teams and global weld Performance tech centers to improve engagement Employee Development Sales Growth • Improve opportunities to learn and grow (organic & inorganic) • Expand development programming and employee resource groups Improving Average Operating Income Margin Solutions & Value Through the Cycle • Improve customers’ ability to make their products better, safer and easier 1 Top Quartile ROIC • Target $1B in automation & additive sales by 2025 • Enhance software solutions (IoT, AI) Top Decile Average • Expand differentiated solutions Operating Working 1 Operational Excellence Capital Ratio • Improve our quality, costs & processes 2 • Achieve our environmental, health & safety goals • Maximize the Lincoln Business System • Digitize operations and processes 1 13 Versus proxy peers 2 2025 environmental and safety goals are presented on slide 23
Disciplined M&A is Expanding Growth Opportunities $22 Billion $45 Billion Expanding the Arc Welding, Brazing & market size Cutting potential for Automation & 1 future growth Additive/Surfacing 1 Based on company estimates $715 Million Cumulative M&A Investment 2010 - 2019 9.1% 8.0% Sales growth 5.8% 5.3% 4.9% 4.3% attributed to 4.6% Average 3.2% acquisitions 2.2% 2.0% 1.5% (%) 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 14Disciplined M&A is Expanding Growth Opportunities $22 Billion $45 Billion Expanding the Arc Welding, Brazing & market size Cutting potential for Automation & 1 future growth Additive/Surfacing 1 Based on company estimates $715 Million Cumulative M&A Investment 2010 - 2019 9.1% 8.0% Sales growth 5.8% 5.3% 4.9% 4.3% attributed to 4.6% Average 3.2% acquisitions 2.2% 2.0% 1.5% (%) 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 14
Focused on Higher Margin Opportunities and Operational Excellence While Mitigating Impact of Lower Demand 1,2 Adjusted Operating Income Margin vs. Net Sales 15.3% 14.9% 14.7% 3 14.3% 14.0% 15.0% 13.6% 13.4% 12.9% $3,000 11.7% 11.4% 13.5% 9.8% 10.0% 8.4% $2,000 $1,536 5.0% $1,000 $1,729 $2,070 $2,695 $2,853 $2,853 $2,813 $2,536 $2,275 $2,624 $3,029 $3,003 $1,293 $- 0.0% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 H1-2020 Net Sales Adjusted Operating Income Margin 1 Adjusted operating income margin excludes special items. Please refer to the appendix for a reconciliation of non-GAAP financial measures. 2 Adjusted operating income margin results reflect the 2018 reclassification of pension costs, other than service costs, to Other income (expense). 15 3 Excluding the Air Liquide Welding acquisition, legacy company adj, operating income margin would have been 14.3% in 2017. 4 As reference, adjusted operating income margin was 12.2% in 2008.Focused on Higher Margin Opportunities and Operational Excellence While Mitigating Impact of Lower Demand 1,2 Adjusted Operating Income Margin vs. Net Sales 15.3% 14.9% 14.7% 3 14.3% 14.0% 15.0% 13.6% 13.4% 12.9% $3,000 11.7% 11.4% 13.5% 9.8% 10.0% 8.4% $2,000 $1,536 5.0% $1,000 $1,729 $2,070 $2,695 $2,853 $2,853 $2,813 $2,536 $2,275 $2,624 $3,029 $3,003 $1,293 $- 0.0% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 H1-2020 Net Sales Adjusted Operating Income Margin 1 Adjusted operating income margin excludes special items. Please refer to the appendix for a reconciliation of non-GAAP financial measures. 2 Adjusted operating income margin results reflect the 2018 reclassification of pension costs, other than service costs, to Other income (expense). 15 3 Excluding the Air Liquide Welding acquisition, legacy company adj, operating income margin would have been 14.3% in 2017. 4 As reference, adjusted operating income margin was 12.2% in 2008.
Cash Generation a Top Strategic Priority Q2-2020 Strategic Inventory Build Initiated to Service a Recovery Operating Working Capital to Net Cash Flow From Operations 1 Sales Ratio 390 bps reduction ($ in millions) 2010-2019 402 403 23.2% 22.4% 21.0% 20.7% 339 335 329 327 18.8% 311 313 17.6% 17.1% 17.1% 16.8% 16.5% 15.9% 15.6% 250 194 157 152 126 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 H1-20 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Q2-20 16 1 Operating working capital to net sales ratio is defined as operating working (AR plus Inventory less AP) divided by annualized rolling three months of sale16 s.Cash Generation a Top Strategic Priority Q2-2020 Strategic Inventory Build Initiated to Service a Recovery Operating Working Capital to Net Cash Flow From Operations 1 Sales Ratio 390 bps reduction ($ in millions) 2010-2019 402 403 23.2% 22.4% 21.0% 20.7% 339 335 329 327 18.8% 311 313 17.6% 17.1% 17.1% 16.8% 16.5% 15.9% 15.6% 250 194 157 152 126 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 H1-20 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Q2-20 16 1 Operating working capital to net sales ratio is defined as operating working (AR plus Inventory less AP) divided by annualized rolling three months of sale16 s.
Predictable Model Enables a Growing Dividend Payout Dividend History $1.96 $1.88 13.4% CAGR $1.56 $1.40 2011 - 2020 $1.28 $1.16 $0.92 $0.80 $0.68 $0.62 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 4.3% Increase in the 2020 Dividend Payout Rate th 24 Consecutive Annual Dividend Increase 17Predictable Model Enables a Growing Dividend Payout Dividend History $1.96 $1.88 13.4% CAGR $1.56 $1.40 2011 - 2020 $1.28 $1.16 $0.92 $0.80 $0.68 $0.62 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 4.3% Increase in the 2020 Dividend Payout Rate th 24 Consecutive Annual Dividend Increase 17
Capital Allocation and 2020 Priority Uses of Cash Cash Flows From Operations Strong Through the Cycle ($ in millions) Capital Allocation » Cap-ex: Narrowing $616 spend to cost reduction Acquisitions, net of cash acquired $574 Cap Ex $551 projects, new products & Share Repurchase $37 $135 $477 $477 Dividend $72 $51 growth initiatives $24 $50 $70 $102 $73 $346 $342 » M&A: Opportunistic $71 $53 $270 $399 $135 $293 $221 $342 $76 $198 $201 $72 $307 » Dividend: Maintaining $167 $202 $66 $25 $53 $44 1 $62 $19 program $108 $168 $72 $66 $61 $113 $81 $43 $25 $37 $40 $42 $38 $118 $102 $92 $87 $87 $73 $73 $60 $52 $49 $43 $45 $47 » Share repurchases: 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 H1 2020 Temporarily suspending ($M) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 H1-20 repurchases 2 $257 $250 $157 $194 $327 $339 $402 $311 $313 $335 $329 $403 $126 CFO 18 1 Q1/2013 dividend paid in Q4/2012 2 CFO is defined as Cash Flows from OperationsCapital Allocation and 2020 Priority Uses of Cash Cash Flows From Operations Strong Through the Cycle ($ in millions) Capital Allocation » Cap-ex: Narrowing $616 spend to cost reduction Acquisitions, net of cash acquired $574 Cap Ex $551 projects, new products & Share Repurchase $37 $135 $477 $477 Dividend $72 $51 growth initiatives $24 $50 $70 $102 $73 $346 $342 » M&A: Opportunistic $71 $53 $270 $399 $135 $293 $221 $342 $76 $198 $201 $72 $307 » Dividend: Maintaining $167 $202 $66 $25 $53 $44 1 $62 $19 program $108 $168 $72 $66 $61 $113 $81 $43 $25 $37 $40 $42 $38 $118 $102 $92 $87 $87 $73 $73 $60 $52 $49 $43 $45 $47 » Share repurchases: 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 H1 2020 Temporarily suspending ($M) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 H1-20 repurchases 2 $257 $250 $157 $194 $327 $339 $402 $311 $313 $335 $329 $403 $126 CFO 18 1 Q1/2013 dividend paid in Q4/2012 2 CFO is defined as Cash Flows from Operations
Disciplined Capital Deployment Delivers Top Quartile Returns 1 Return on Invested Capital 22.9% 21.1% 20.7% 20.2% 19.9% 19.3% 18.6% 2 16.6% 16.6% 16.2% 10.6% 6.3% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Q2-2020 1 Please refer to the appendix for the definition and reconciliation of this non-GAAP financial measure. 19 2 2016 ROIC reflects the impact of $350 million of senior notes in October 2016. Disciplined Capital Deployment Delivers Top Quartile Returns 1 Return on Invested Capital 22.9% 21.1% 20.7% 20.2% 19.9% 19.3% 18.6% 2 16.6% 16.6% 16.2% 10.6% 6.3% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Q2-2020 1 Please refer to the appendix for the definition and reconciliation of this non-GAAP financial measure. 19 2 2016 ROIC reflects the impact of $350 million of senior notes in October 2016.
Positioned For Long Term Value Creation Top Market Position in Arc Welding #1 Global Provider » Differentiated by comprehensive product portfolio & automation ® » Renowned Welding Experts with industry-leading engineers Innovative R&D and Pragmatic M&A Driving Growth Driving Growth and » Focused investments driving higher margins and returns » ~34% of sales from new products Richening Mix » M&A initiatives contributing to annual revenue growth Solid Execution Increasing Returns » Operational excellence is optimizing the cost structure Top Quartile ROIC » Working capital efficiency supporting cash flow generation » ROIC-driven model Predictable Model Accelerating Shareholder Returns $1.8B Returned to » Business model resilient through economic cycles » Strategy improving margin performance vs. 2008 peak Shareholders 2015-2019 » Dividend increased annually for 24 consecutive years 20Positioned For Long Term Value Creation Top Market Position in Arc Welding #1 Global Provider » Differentiated by comprehensive product portfolio & automation ® » Renowned Welding Experts with industry-leading engineers Innovative R&D and Pragmatic M&A Driving Growth Driving Growth and » Focused investments driving higher margins and returns » ~34% of sales from new products Richening Mix » M&A initiatives contributing to annual revenue growth Solid Execution Increasing Returns » Operational excellence is optimizing the cost structure Top Quartile ROIC » Working capital efficiency supporting cash flow generation » ROIC-driven model Predictable Model Accelerating Shareholder Returns $1.8B Returned to » Business model resilient through economic cycles » Strategy improving margin performance vs. 2008 peak Shareholders 2015-2019 » Dividend increased annually for 24 consecutive years 20
Sustainability Overview 21Sustainability Overview 21
Governance Highlights At Lincoln Electric, we are committed to effective corporate governance and high ethical standards. We adhere to our ethical commitments in every aspect of our business, including our commitments to each other, in the marketplace and in the global, governmental and political arenas. These commitments are spelled out in our Code of Corporate Conduct and Ethics, which applies to all of our employees (including our principal executive and senior financial officers) and Board of Directors. Lincoln Electric has a solid track record of integrity and corporate governance practices that promote thoughtful World’s Most Ethical Companies” and “Ethisphere” names and marks are registered trademarks of management by its officers and Board of Directors facilitating profitable growth while strategically balancing risks to Ethisphere LLC. maximize shareholder value. Summary of our Board of Governance Practices and Policies: Size of Board 11 Number of fully independent Board committees 4 Double-trigger change-in-control provision Yes Number of Independent Directors 10 Independent Directors meet without management Yes Anti-Hedging and Anti-Pledging Policy Yes Average age of Directors 63 Director attendance at Board & committee meetings >75% Supplier Code of Conduct Yes Percent diverse (independent) 30% Mandatory retirement age (75) Yes Human Rights Policy Yes Board meetings held in 2019 5 Stock ownership requirements for Directors Yes Anti-Corruption Policy Yes New Directors in the last 5 years 3 Annual Board and committee self-assessments Yes No Harassment Policy Yes Average tenure (years) 12.2 Code of Ethics for Directors, officers & employees Yes Environmental, Health & Safety Policy Yes Annual election of Directors Yes Succession planning and implementation process Yes Environmental and Safety goals Yes Majority voting policy for Directors Yes Environmental, risk management and D&I review Yes Lead Independent Director Yes Directors over boarded per ISS or Glass Lewis No 22 For more information, refer to our 2020 Proxy Statement at https://ir.lincolnelectric.comGovernance Highlights At Lincoln Electric, we are committed to effective corporate governance and high ethical standards. We adhere to our ethical commitments in every aspect of our business, including our commitments to each other, in the marketplace and in the global, governmental and political arenas. These commitments are spelled out in our Code of Corporate Conduct and Ethics, which applies to all of our employees (including our principal executive and senior financial officers) and Board of Directors. Lincoln Electric has a solid track record of integrity and corporate governance practices that promote thoughtful World’s Most Ethical Companies” and “Ethisphere” names and marks are registered trademarks of management by its officers and Board of Directors facilitating profitable growth while strategically balancing risks to Ethisphere LLC. maximize shareholder value. Summary of our Board of Governance Practices and Policies: Size of Board 11 Number of fully independent Board committees 4 Double-trigger change-in-control provision Yes Number of Independent Directors 10 Independent Directors meet without management Yes Anti-Hedging and Anti-Pledging Policy Yes Average age of Directors 63 Director attendance at Board & committee meetings >75% Supplier Code of Conduct Yes Percent diverse (independent) 30% Mandatory retirement age (75) Yes Human Rights Policy Yes Board meetings held in 2019 5 Stock ownership requirements for Directors Yes Anti-Corruption Policy Yes New Directors in the last 5 years 3 Annual Board and committee self-assessments Yes No Harassment Policy Yes Average tenure (years) 12.2 Code of Ethics for Directors, officers & employees Yes Environmental, Health & Safety Policy Yes Annual election of Directors Yes Succession planning and implementation process Yes Environmental and Safety goals Yes Majority voting policy for Directors Yes Environmental, risk management and D&I review Yes Lead Independent Director Yes Directors over boarded per ISS or Glass Lewis No 22 For more information, refer to our 2020 Proxy Statement at https://ir.lincolnelectric.com
Safety & Environmental Goals and Performance Energy GHG Recycling & Safety Water Use Intensity Emissions Landfill Avoidance 15% 30% 75% 2020 70% recycle/reuse rate reduction reduction reduction of (All waste materials) (metric tons (Gigajoules per Goal DART rate CO e) hour worked) 2 (vs. 2011) 74.3% recycle rate 25.9% 31.7% 24.1% Achieved 74.6% 94.8% landfill 2019 v. 2011 reduction reduction reduction reduction avoidance (eligible waste) 14% 52% 10% 16% 80% recycle rate 2025 reduction of reduction reduction reduction 97% landfill avoidance Goal (-2.1% YoY) (-1.5% YoY) (-2.5% YoY) TRCR (vs. 2018) For definitions and details on our sustainability programs, please visit 23 https://sustainability.lincolnelectric.comSafety & Environmental Goals and Performance Energy GHG Recycling & Safety Water Use Intensity Emissions Landfill Avoidance 15% 30% 75% 2020 70% recycle/reuse rate reduction reduction reduction of (All waste materials) (metric tons (Gigajoules per Goal DART rate CO e) hour worked) 2 (vs. 2011) 74.3% recycle rate 25.9% 31.7% 24.1% Achieved 74.6% 94.8% landfill 2019 v. 2011 reduction reduction reduction reduction avoidance (eligible waste) 14% 52% 10% 16% 80% recycle rate 2025 reduction of reduction reduction reduction 97% landfill avoidance Goal (-2.1% YoY) (-1.5% YoY) (-2.5% YoY) TRCR (vs. 2018) For definitions and details on our sustainability programs, please visit 23 https://sustainability.lincolnelectric.com
Contact: Amanda Butler Vice President, Investor Relations & Communications * Amanda_Butler@lincolnelectric.com ) 216.383.2534 24Contact: Amanda Butler Vice President, Investor Relations & Communications * Amanda_Butler@lincolnelectric.com ) 216.383.2534 24
Non-GAAP Financial Measures Adjusted operating income, Adjusted net income, Adjusted diluted earnings per share, Return on invested capital and EBITDA are non-GAAP financial measures that management believes are important to investors to evaluate and compare the Company’s financial performance from period to period. Management uses this information in assessing and evaluating the Company’s underlying operating performance. Non-GAAP financial measures should be read in conjunction with the GAAP financial measures, as non-GAAP measures are a supplement to, and not a replacement for, GAAP financial measures. Reconciliation of Operating Income and Operating Income Margin to Non-GAAP Adjusted Operating Income and Adjusted Operating Income Margin ($ in thousands) Period Ended December 31, 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 H1-2020 Operating income: 115,252 200,182 305,719 376,801 413,705 367,080 324,582 283,614 376,942 $375,539 $370,910 $120,838 Special items: Rationalization and asset impairment 29,897 (384) 282 9,354 8,463 30,053 19,958 - 6,590 25,285 15,188 29,759 charges / (gains) (Gains) or losses on asset - - - - 705 - - - - - (3,045) - disposals Venezuelan devaluation and deconsolidation charges - 3,123 - 1,381 12,198 21,133 27,214 34,348 - - - - (gains) Acquisition transaction costs - - - - - - - - 15,002 4,498 1,804 - Amortization of step up in value of acquired - - - - - - - - 4,578 - 3,008 806 inventories Bargain purchase gain - - - - - - - - (49,650) - - - Adjusted operating $145,149 $202,921 $306,001 $387,536 $435,071 $418,266 $371,754 $317,962 $353,462 $405,322 $387,865 $151,403 income: Net sales $ 1,729,285 $ 2,070,172 $ 2,694,609 $ 2,853,367 $ 2,852,671 $ 2,813,324 $ 2,535,791 $2,274,614 $2,624,431 $3,028,674 $3,003,272 $1,292,718 Op income margin 6.7% 9.7% 11.3% 13.2% 14.5% 13.0% 12.8% 12.5% 14.4% 12.4% 12.4% 9.3% Adjusted operating 8.4% 9.8% 11.4% 13.6% 15.3% 14.9% 14.7% 14.0% 13.5% 13.4% 12.9% 11.7% income margin:Non-GAAP Financial Measures Adjusted operating income, Adjusted net income, Adjusted diluted earnings per share, Return on invested capital and EBITDA are non-GAAP financial measures that management believes are important to investors to evaluate and compare the Company’s financial performance from period to period. Management uses this information in assessing and evaluating the Company’s underlying operating performance. Non-GAAP financial measures should be read in conjunction with the GAAP financial measures, as non-GAAP measures are a supplement to, and not a replacement for, GAAP financial measures. Reconciliation of Operating Income and Operating Income Margin to Non-GAAP Adjusted Operating Income and Adjusted Operating Income Margin ($ in thousands) Period Ended December 31, 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 H1-2020 Operating income: 115,252 200,182 305,719 376,801 413,705 367,080 324,582 283,614 376,942 $375,539 $370,910 $120,838 Special items: Rationalization and asset impairment 29,897 (384) 282 9,354 8,463 30,053 19,958 - 6,590 25,285 15,188 29,759 charges / (gains) (Gains) or losses on asset - - - - 705 - - - - - (3,045) - disposals Venezuelan devaluation and deconsolidation charges - 3,123 - 1,381 12,198 21,133 27,214 34,348 - - - - (gains) Acquisition transaction costs - - - - - - - - 15,002 4,498 1,804 - Amortization of step up in value of acquired - - - - - - - - 4,578 - 3,008 806 inventories Bargain purchase gain - - - - - - - - (49,650) - - - Adjusted operating $145,149 $202,921 $306,001 $387,536 $435,071 $418,266 $371,754 $317,962 $353,462 $405,322 $387,865 $151,403 income: Net sales $ 1,729,285 $ 2,070,172 $ 2,694,609 $ 2,853,367 $ 2,852,671 $ 2,813,324 $ 2,535,791 $2,274,614 $2,624,431 $3,028,674 $3,003,272 $1,292,718 Op income margin 6.7% 9.7% 11.3% 13.2% 14.5% 13.0% 12.8% 12.5% 14.4% 12.4% 12.4% 9.3% Adjusted operating 8.4% 9.8% 11.4% 13.6% 15.3% 14.9% 14.7% 14.0% 13.5% 13.4% 12.9% 11.7% income margin:
1 Non-GAAP Financial Measures: Return on Invested Capital ($ in thousands) Period Ended December 31, TTM 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Q2-2020 Net income: $48,576 $130,244 $217,186 $257,411 $293,780 $254,686 $127,478 $198,399 $247,503 $287,066 $293,109 $218,735 Special items: Rationalization and asset impairment charges / (gains) 29,897 (384) 282 9,354 8,463 30,053 19,958 - 6,590 25,285 15,188 40,105 (Gains) or losses on asset disposals (5,667) - - - 705 - - - - - (3,554) - Loss associated with an acquisition 7,943 - - - - - - - - - - - Loss on deconsolidation of Venezuela & devaluation - 3,123 - 1,381 1 2,198 21,133 27,214 34,348 - - - - charges Pension settlement loss (gain) (2,144) - - - - - 142,738 - 8,150 6,686 - $3,334 Non-controlling interests 601 1,782 - - (1,068) (805) - - - - - - Acquisition transaction & integration costs - - - - - - - - 15,002 4,498 1,804 - Amortization of step in value of acquired inventories, - - - - - - - - 4,578 - 3,008 2,415 net of tax Gain on change in control - - - - - - - - - - (7,601) (7,601) Bargain purchase gain - - - - - - - - (49,650) - - - Tax effect of Special items (6,108) (5,165) (4,889) (2,387) (890) 861 (57,204) (8,293) 20,536 (6,896) (7,386) (9,374) Adj. Net income: $ 73,098 $ 129,600 $ 212,579 $ 265,759 $ 313,188 $ 305,928 $ 260,184 $ 224,454 $252,709 $316,639 $294,568 $247,614 Plus: Interest expense (after-tax) 5,293 4,156 4,164 2,597 1,767 6,439 13,469 11,775 14,947 18,386 19,465 19,348 Less: Interest income (after-tax) 2,150 1,479 1,938 2,471 2.049 1,909 1,675 1,291 2,955 5,206 1,896 1,691 Adjusted net income before tax effected interest 76,241 132,277 214,805 265,885 312,906 310,458 271,978 234,938 264,701 329,819 312,137 265,271 2 Invested Capital 1,209,392 1,247,183 1,296,620 1,378,596 1,549,775 1,356,435 1,287,073 1,417,799 1,638,720 1,590,252 1,566,348 1,425,525 ROIC: 6.3% 10.6% 16.6% 19.3% 20.2% 22.9% 21.1% 16.6% 16.2% 20.7% 19.9% 18.6% 1 Return on Invested Capital is defined as rolling 12 months of Adjusted Net Income excluding tax-effected interest income and expense divided by Invested Capital. 2 Invested Capital is defined as Total Debt plus Total Equity.1 Non-GAAP Financial Measures: Return on Invested Capital ($ in thousands) Period Ended December 31, TTM 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Q2-2020 Net income: $48,576 $130,244 $217,186 $257,411 $293,780 $254,686 $127,478 $198,399 $247,503 $287,066 $293,109 $218,735 Special items: Rationalization and asset impairment charges / (gains) 29,897 (384) 282 9,354 8,463 30,053 19,958 - 6,590 25,285 15,188 40,105 (Gains) or losses on asset disposals (5,667) - - - 705 - - - - - (3,554) - Loss associated with an acquisition 7,943 - - - - - - - - - - - Loss on deconsolidation of Venezuela & devaluation - 3,123 - 1,381 1 2,198 21,133 27,214 34,348 - - - - charges Pension settlement loss (gain) (2,144) - - - - - 142,738 - 8,150 6,686 - $3,334 Non-controlling interests 601 1,782 - - (1,068) (805) - - - - - - Acquisition transaction & integration costs - - - - - - - - 15,002 4,498 1,804 - Amortization of step in value of acquired inventories, - - - - - - - - 4,578 - 3,008 2,415 net of tax Gain on change in control - - - - - - - - - - (7,601) (7,601) Bargain purchase gain - - - - - - - - (49,650) - - - Tax effect of Special items (6,108) (5,165) (4,889) (2,387) (890) 861 (57,204) (8,293) 20,536 (6,896) (7,386) (9,374) Adj. Net income: $ 73,098 $ 129,600 $ 212,579 $ 265,759 $ 313,188 $ 305,928 $ 260,184 $ 224,454 $252,709 $316,639 $294,568 $247,614 Plus: Interest expense (after-tax) 5,293 4,156 4,164 2,597 1,767 6,439 13,469 11,775 14,947 18,386 19,465 19,348 Less: Interest income (after-tax) 2,150 1,479 1,938 2,471 2.049 1,909 1,675 1,291 2,955 5,206 1,896 1,691 Adjusted net income before tax effected interest 76,241 132,277 214,805 265,885 312,906 310,458 271,978 234,938 264,701 329,819 312,137 265,271 2 Invested Capital 1,209,392 1,247,183 1,296,620 1,378,596 1,549,775 1,356,435 1,287,073 1,417,799 1,638,720 1,590,252 1,566,348 1,425,525 ROIC: 6.3% 10.6% 16.6% 19.3% 20.2% 22.9% 21.1% 16.6% 16.2% 20.7% 19.9% 18.6% 1 Return on Invested Capital is defined as rolling 12 months of Adjusted Net Income excluding tax-effected interest income and expense divided by Invested Capital. 2 Invested Capital is defined as Total Debt plus Total Equity.
Non-GAAP Financial Measures: EBITDA ($ in thousands) Twelve Months Ended June 30, 2020 2019 Net income: $218,735 $314,310 Income taxes 62,955 72,377 Interest expense, net 23,533 19,533 Depreciation and amortization 83,313 75,275 EBITDA $388,536 $481,495 June 30, 2020 June 30, 2019 Total Debt $765,414 $740,568 Total debt / EBITDA 1.97 1.54Non-GAAP Financial Measures: EBITDA ($ in thousands) Twelve Months Ended June 30, 2020 2019 Net income: $218,735 $314,310 Income taxes 62,955 72,377 Interest expense, net 23,533 19,533 Depreciation and amortization 83,313 75,275 EBITDA $388,536 $481,495 June 30, 2020 June 30, 2019 Total Debt $765,414 $740,568 Total debt / EBITDA 1.97 1.54
Non-GAAP Financial Measures Reconciliation of Diluted Earnings Per Common Share (EPS) to Non-GAAP Diluted Adjusted Net Earnings Per Common Share (Adjusted EPS) 2009 2010 2011 2012 2013 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2009 2009 2009 2009 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012 2012 2013 2013 2013 2013 Diluted EPS: $(0.04) $0.18 $0.15 $0.29 $0.28 $0.38 $0.38 $0.49 $0.55 $0.68 $0.66 $0.68 $0.76 $0.79 $0.77 $0.74 $0.80 $0.87 $0.80 $1.07 Special items: Rationalization and asset 0.09 0.08 0.07 0.04 0.01 (0.04) - 0.02 - - - - - 0.01 0.03 0.05 0.01 0.04 0.06 0.02 impairment charges / (gains) Pension settlement gain - (0.02) - - - - - - - - - - - - - - - - - - (Gains) or losses on asset - (0.07) 0.09 - - 0.02 - - - - - - - - - - - - - - disposals Discrete tax item - - - - - - - (0.06) (0.06) - - - - - - - - - - - Venezuela devaluation & - - - - - 0.03 0.01 - - - - - - 0.01 - - 0.11 - - - deconsolidation charges Adjusted Diluted EPS: $0.05 $0.17 $0.32 $0.32 $0.28 $0.39 $0.39 $0.45 $0.49 $0.68 $0.66 $0.68 $0.76 $0.81 $0.80 $0.79 $0.92 $0.91 $0.86 $1.09 2014 2015 2016 2017 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017 2017 2017 2017 Diluted EPS: $0.69 $0.96 $0.57 $0.96 $0.89 $0.94 $(0.82) $0.68 $0.76 $0.45 $0.89 $0.81 $0.84 $0.92 $1.59 $0.36 Special items: Rationalization and asset - 0.01 0.37 - - 0.01 - 0.07 - - - - - - - 0.09 impairment charges / (gains) Acquisition transaction and - - - - - - - - - - - - 0.04 0.05 0.03 0.05 integration costs Bargain purchase gain - - - - - - - - - - - - - - (0.77) 0.02 Venezuela devaluation & 0.22 0.04 - - - - - - - 0.48 - - - - - - deconsolidation charges Pension settlement charges - - - - - - 1.71 - - - - - - - 0.05 0.03 Discrete tax item - - - - - - - - - (0.10) - - - - - - Tax effect of Special items - - - - - - - - - - - - - - - 0.43 Adjusted Diluted EPS: $0.91 $1.01 $0.94 $0.96 $0.89 $0.95 $0.89 $0.75 $0.76 $0.83 $0.89 $0.81 $0.88 $0.97 $0.93 $1.01Non-GAAP Financial Measures Reconciliation of Diluted Earnings Per Common Share (EPS) to Non-GAAP Diluted Adjusted Net Earnings Per Common Share (Adjusted EPS) 2009 2010 2011 2012 2013 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2009 2009 2009 2009 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012 2012 2013 2013 2013 2013 Diluted EPS: $(0.04) $0.18 $0.15 $0.29 $0.28 $0.38 $0.38 $0.49 $0.55 $0.68 $0.66 $0.68 $0.76 $0.79 $0.77 $0.74 $0.80 $0.87 $0.80 $1.07 Special items: Rationalization and asset 0.09 0.08 0.07 0.04 0.01 (0.04) - 0.02 - - - - - 0.01 0.03 0.05 0.01 0.04 0.06 0.02 impairment charges / (gains) Pension settlement gain - (0.02) - - - - - - - - - - - - - - - - - - (Gains) or losses on asset - (0.07) 0.09 - - 0.02 - - - - - - - - - - - - - - disposals Discrete tax item - - - - - - - (0.06) (0.06) - - - - - - - - - - - Venezuela devaluation & - - - - - 0.03 0.01 - - - - - - 0.01 - - 0.11 - - - deconsolidation charges Adjusted Diluted EPS: $0.05 $0.17 $0.32 $0.32 $0.28 $0.39 $0.39 $0.45 $0.49 $0.68 $0.66 $0.68 $0.76 $0.81 $0.80 $0.79 $0.92 $0.91 $0.86 $1.09 2014 2015 2016 2017 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017 2017 2017 2017 Diluted EPS: $0.69 $0.96 $0.57 $0.96 $0.89 $0.94 $(0.82) $0.68 $0.76 $0.45 $0.89 $0.81 $0.84 $0.92 $1.59 $0.36 Special items: Rationalization and asset - 0.01 0.37 - - 0.01 - 0.07 - - - - - - - 0.09 impairment charges / (gains) Acquisition transaction and - - - - - - - - - - - - 0.04 0.05 0.03 0.05 integration costs Bargain purchase gain - - - - - - - - - - - - - - (0.77) 0.02 Venezuela devaluation & 0.22 0.04 - - - - - - - 0.48 - - - - - - deconsolidation charges Pension settlement charges - - - - - - 1.71 - - - - - - - 0.05 0.03 Discrete tax item - - - - - - - - - (0.10) - - - - - - Tax effect of Special items - - - - - - - - - - - - - - - 0.43 Adjusted Diluted EPS: $0.91 $1.01 $0.94 $0.96 $0.89 $0.95 $0.89 $0.75 $0.76 $0.83 $0.89 $0.81 $0.88 $0.97 $0.93 $1.01
Non-GAAP Financial Measures Reconciliation of Diluted Earnings Per Common Share (EPS) to Non-GAAP Diluted Adjusted Net Earnings Per Common Share (Adjusted EPS) 2018 2019 2020 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2018 2018 2018 2018 2019 2019 2019 2019 2020 2020 Diluted EPS: $0.92 $1.04 $1.07 $1.35 $1.12 $1.36 $1.17 $1.03 $0.91 $0.45 Special items: Rationalization and asset impairment 0.12 0.17 0.04 0.01 0.05 0.02 0.02 0.14 0.11 0.31 charges Acquisition transaction and 0.02 0.01 0.01 0.01 0.01 0.01 - - - - integration costs Bargain purchase gain - - - - - - - - - - Pension settlement charges 0.01 - 0.07 0.03 - - - - - 0.04 Amortization of step up in value of - - - - - 0.02 0.03 - 0.01 - acquired inventories (Gains) or losses on asset disposals - - - - - (0.06) - - - - Gain on change of control - - - - - (0.12) - - - Tax effect of Special items 0.03 - 0.02 (0.11) (0.01) (0.07) (0.01) (0.02) (0.03) - Adjusted Diluted EPS: $1.10 $1.22 $1.21 $1.29 $1.17 $1.28 $1.09 $1.15 $1.00 $0.80Non-GAAP Financial Measures Reconciliation of Diluted Earnings Per Common Share (EPS) to Non-GAAP Diluted Adjusted Net Earnings Per Common Share (Adjusted EPS) 2018 2019 2020 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2018 2018 2018 2018 2019 2019 2019 2019 2020 2020 Diluted EPS: $0.92 $1.04 $1.07 $1.35 $1.12 $1.36 $1.17 $1.03 $0.91 $0.45 Special items: Rationalization and asset impairment 0.12 0.17 0.04 0.01 0.05 0.02 0.02 0.14 0.11 0.31 charges Acquisition transaction and 0.02 0.01 0.01 0.01 0.01 0.01 - - - - integration costs Bargain purchase gain - - - - - - - - - - Pension settlement charges 0.01 - 0.07 0.03 - - - - - 0.04 Amortization of step up in value of - - - - - 0.02 0.03 - 0.01 - acquired inventories (Gains) or losses on asset disposals - - - - - (0.06) - - - - Gain on change of control - - - - - (0.12) - - - Tax effect of Special items 0.03 - 0.02 (0.11) (0.01) (0.07) (0.01) (0.02) (0.03) - Adjusted Diluted EPS: $1.10 $1.22 $1.21 $1.29 $1.17 $1.28 $1.09 $1.15 $1.00 $0.80
Diluted Earnings Per Share Progression $800 1.59 $1.50 1.36 1.35 1.29 $700 1.22 1.28 1.17 1.21 1.17 1.15 1.10 1.09 1.09 1.01 1.01 1.12 1.00 1.07 1.07 0.97 0.940.96 1.01 0.92 1.04 $1.00 $600 0.91 0.91 0.88 1.03 0.89 0.89 0.86 0.96 0.89 0.94 0.81 0.92 0.79 0.83 0.92 0.77 0.76 0.80 0.87 0.75 0.84 0.76 0.81 0.91 0.80 0.80 0.68 0.79 0.66 0.74 $500 0.68 0.55 0.69 0.66 0.68 0.50 0.49 0.57 $0.50 0.39 0.39 0.45 0.36 0.45 0.32 0.39 0.45 0.32 $400 0.29 0.38 0.38 0.17 0.29 0.28 0.05 0.15 $300 $0.00 -0.04 $200 -$0.50 $100 -0.82 $0 -$1.00 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2020 2010 2011 2018 2019 2009 2012 2013 2014 2015 2016 2017 Adjusted EPS EPS Sales - Adjusted EPS excludes special items. Please refer to the appendix for a reconciliation of non GAAP financial measures.Diluted Earnings Per Share Progression $800 1.59 $1.50 1.36 1.35 1.29 $700 1.22 1.28 1.17 1.21 1.17 1.15 1.10 1.09 1.09 1.01 1.01 1.12 1.00 1.07 1.07 0.97 0.940.96 1.01 0.92 1.04 $1.00 $600 0.91 0.91 0.88 1.03 0.89 0.89 0.86 0.96 0.89 0.94 0.81 0.92 0.79 0.83 0.92 0.77 0.76 0.80 0.87 0.75 0.84 0.76 0.81 0.91 0.80 0.80 0.68 0.79 0.66 0.74 $500 0.68 0.55 0.69 0.66 0.68 0.50 0.49 0.57 $0.50 0.39 0.39 0.45 0.36 0.45 0.32 0.39 0.45 0.32 $400 0.29 0.38 0.38 0.17 0.29 0.28 0.05 0.15 $300 $0.00 -0.04 $200 -$0.50 $100 -0.82 $0 -$1.00 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2020 2010 2011 2018 2019 2009 2012 2013 2014 2015 2016 2017 Adjusted EPS EPS Sales - Adjusted EPS excludes special items. Please refer to the appendix for a reconciliation of non GAAP financial measures.