What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2025-02-26 compared with 2024-02-27 · 263 added, 235 removed, 1267 unchanged (28% of the section changed)

5 unchanged sentences

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f).

Under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of the effectiveness of internal control over financial reporting as of December 31, 2023 based on the 2013 framework in "Internal Control – Integrated Framework" issued by the Committee of Sponsoring Organizations of the Treadway Commission.

on the 2013 framework in "Internal Control – Integrated Framework" issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on the Company’s evaluation under such framework, management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2024.

During 2024, the Company completed the acquisitions of RedViking, Inrotech and Vanair (“Acquisitions”).

The Company is currently integrating the Acquisitions into its operations, compliance programs and internal control processes.

As permitted by guidance issued by the Securities and Exchanges Commission, the Company has excluded these acquisitions from management's evaluation of internal controls over financial reporting as of December 31, 2024.

These acquisitions constituted approximately 8% of the Company’s total assets (inclusive of acquired intangible assets and goodwill) as of December 31, 2024 and 2.5% of the Company’s net sales for the fiscal year ended December 31, 2024.

The effectiveness of the Company’s internal control over financial reporting as of December 31, 2024 has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report, which is included elsewhere in this Annual Report on Form 10-K.

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0-1402, and incorporated herein by reference and made a part hereof).

Second Amended and Restated Credit Agreement, dated as of April 23, 2021, by and among Lincoln Electric Holdings, Inc., The Lincoln Electric Company, Lincoln Electric International Holding Company, J.W.

Harris Co., Inc., Lincoln Electric Automation, Inc., Lincoln Global, Inc., the Lenders and KeyBank National Association (filed as Exhibit 10.4 to Form 10-Q of Lincoln Electric Holdings, Inc.

for the quarter ended March 31, 2021, SEC File No.

0-1402, and incorporated herein by reference and made a part hereof).

First Amendment to Second Amendment and Restated Credit Agreement, dated as of March 8, 2023, by and among Lincoln Electric Holdings, Inc., The Lincoln Electric Company, Lincoln Electric International Holding Company, J.W.

Harris Co., Inc., Lincoln Electric Automation, Inc., Lincoln Global, Inc., the Lenders and KeyBank National Association (filed as Exhibit 10.1 to Form 10-Q of Lincoln Electric Holdings, Inc.

for the quarter ended March 31, 2023, SEC File No.

0-1402, and incorporated herein by reference and made a part hereof).

Credit Agreement, dated as of November 29, 2022, by and among Lincoln Electric Holdings, Inc., The Lincoln Electric Company, Lincoln Electric International Holding Company, J.W.

Harris Co., Inc., Lincoln Electric Automation, Inc., Lincoln Global, Inc., the Lenders and PNC Bank, National Association (filed as Exhibit 10.1 to form 8-K of Lincoln Electric Holdings, Inc.

filed on December 1, 2022, SEC File No.

0-1402 and incorporated herein by reference and made a part hereof).

Credit Agreement, dated as of June 20, 2024, by and among Lincoln Electric Holdings, Inc., The Lincoln Electric Company, Lincoln Electric International Holding Company, J.W.

Harris Co., Inc., Lincoln Global, Inc., Lincoln Electric Automation, Inc., the financial institutions from time to time party thereto, as lenders, PNC Bank, National Association, as lead administrative agent, and KeyBank National Association, as co-administrative agent (filed as Exhibit 10.2 to Form 8-K of Lincoln Electric Holdings, Inc., filed on June 24, 2024, SEC File No.

0-1402, and incorporated herein by reference and made part hereof).

Note Purchase Agreement, dated as of April 1, 2015, by and among Lincoln Electric Holdings, Inc., The Lincoln Electric Company, Lincoln Electric International Holding Company, J.W.

9 unchanged sentences

0- 1402, and incorporated herein by reference and made a part hereof).

Amendment No.

2 to Note Purchase Agreement, dated as of April 1, 2015, by and among Lincoln Electric Holdings, Inc., The Lincoln Electric Company, Lincoln Electric International Holding Company, J.W.

Harris Co., Inc., Lincoln Global, Inc., Lincoln Electric Automation, Inc.

and the purchasers party thereto, dated June 20, 2024 (filed as Exhibit 10.3 to Form 10-Q of Lincoln Electric Holdings, Inc.

for the quarter ended June 30, 2024, SEC File No.

0-1402, and incorporated herein by reference and made part hereof).

Note Purchase Agreement, dated as of October 20, 2016, by and among Lincoln Electric Holdings, Inc., The Lincoln Electric Company, Lincoln Electric International Holding Company, J.W.

1 unchanged sentence

and Wayne Trail Technologies, Inc.

and the purchaser party thereto (filed as Exhibit 10.4 to Form 10-K of Lincoln Electric Holdings, Inc.

and the purchasers party thereto (filed as Exhibit 10.4 to Form 10-K of Lincoln Electric Holdings, Inc.

for the year ended December 31, 2016, SEC File No.

0-1402, and incorporated herein by reference and made a part hereof).

Amendment No.

1 to Note Purchase Agreement, dated as of October 20, 2016, by an among Lincoln Electric Holdings, Inc., The Lincoln Electric Company, Lincoln Electric International Holding Company, J.W.

Harris Co., Inc., Lincoln Global, Inc., Lincoln Electric Automation, Inc.

and the purchasers party thereto, dated June 20, 2024 (filed as Exhibit 10.4 to Form 10-Q of Lincoln Electric Holdings, Inc.

for the quarter ended June 30, 2024, SEC File No.

0-1402, and incorporated herein by reference and made part hereof).

Note Purchase Agreement, dated as of June 20, 2024, by and among Lincoln Electric Holdings, Inc., The Lincoln Electric Company, Lincoln Electric International Holding Company, J.W.

Harris Co., Inc., Lincoln Global, Inc, Lincoln Electric Automation, Inc.

and the purchasers party thereto (filed as Exhibit 10.1 to Form 8-K of Lincoln Electric Holdings, Inc., filed on June 24, 2024, SEC File No.

0-1402, and incorporated herein by reference and made part hereof).

Non-Employee Directors’ Deferred Compensation Plan (Amended and Restated as of January 1, 2021) (filed as Exhibit 10.18 to Form 10-K of Lincoln Electric Holdings, Inc.

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0-1402, and incorporated herein by reference and made a part hereof).

The Lincoln Electric Company Employee Savings Plan As Amended and Restated Effective April 25, 2022 (filed herewith).

Amendment No.

1 to The Lincoln Electric Company Employee Savings Plan As Amended and Restated Effective April 25, 2022 (filed herewith).

Amendment No.

2 to The Lincoln Electric Company Employee Savings Plan As Amended and Restated Effective April 25, 2022 (filed herewith).

The Lincoln Electric Company Employee Savings Plan As Amended and Restated Effective January 1, 2025 (filed herewith).

Form of Change in Control Severance Agreement (as entered into by the Company and its executive officers) (filed as Exhibit 10.1 to Form 8-K of Lincoln Electric Holdings, Inc.

24 unchanged sentences

0-1402, and incorporated herein by reference and made a part hereof).

Form of Restricted Stock Unit Agreement for Non-Employee Directors (filed as Exhibit 10.31 to Form 10-K of Lincoln Electric Holdings, Inc.

for the year ended December 31, 2022, SEC File No.

0-1402, and incorporated herein by reference and made a part hereof).

Form of Restricted Stock Unit Agreement for Non-Employee Directors under 2023 Stock Plan for Non-Employee Directors (filed as Exhibit 10.1 to Form 10-Q of Lincoln Electric Holdings, Inc.

1 unchanged sentence

0-1402, and incorporated herein by reference and made a part hereof).

Form of Restricted Stock Unit Agreement for Non-Employee Directors under 2023 Stock Plan for Non-Employee Directors (filed herewith).

Form of Restricted Stock Unit Agreement for Non-Employee Directors under 2023 Stock Plan for Non-Employee Directors (filed as Exhibit 10.24 to Form 10-K of Lincoln Electric Holdings, Inc.

for the year ended December 31, 2023, SEC File No.

0-1402, and incorporated herein by reference and made a part hereof).

Form of Stock Option Agreement for Executive Officers (filed as Exhibit 10.27 to Form 10-K of Lincoln Electric Holdings, Inc.

22 unchanged sentences

0-1402, and incorporated herein by reference and made a part hereof).

Form of Stock Option Agreement for Executive Officers (filed as Exhibit 10.1 to Form 10-Q of Lincoln Electric Holdings, Inc.

for the quarter ended March 31, 2024, SEC File No.

0-1402, and incorporated herein by reference and made part hereof).

Form of Restricted Stock Unit Agreement for Executive Officers (filed as Exhibit 10.33 to Form 10-K of Lincoln Electric Holdings, Inc.

13 unchanged sentences

0-1402, and incorporated herein by reference and made a part hereof).

Form of Restricted Stock Unit Agreement for Executive Officers under 2023 Equity and Incentive Compensation Plan (filed as Exhibit 10.2 to Form 10-Q of Lincoln Electric Holdings, Inc.

for the quarter ended March 31, 2024, SEC File No.

0-1402, and incorporated herein by reference and made part hereof).

Form of Performance Share Award Agreement for Executive Officers (filed as Exhibit 10.3 to Form 10-Q of Lincoln Electric Holdings, Inc., for the quarter ended March 31, 2021, SEC File No.

6 unchanged sentences

0-1402, and incorporated herein by reference and made a part hereof).

Form of Performance Share Award Agreement for Executive Officers (filed as Exhibit 10.3 to Form 10-Q of Lincoln Electric Holdings, Inc.

for the quarter ended March 31, 2024, SEC File No.

0-1402, and incorporated herein by reference and made part hereof).

Form of Officer Indemnification Agreement (effective February 23, 2012) (filed as Exhibit 10.1 to Form 8-K of Lincoln Electric Holdings, Inc.

4 unchanged sentences

0-1402, and incorporated herein by reference and made a part hereof) .

Lincoln Electric Holdings, Inc.

Securities Trading Policy for Covered Persons (Effective July 17, 2024) (filed herewith).

Subsidiaries of the Registrant (filed herewith).

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Lincoln Electric Holdings, Inc.

Clawback Policy (Effective October 2, 2023) (filed herewith).

Clawback Policy (Effective October 2, 2023) (filed as Exhibit 97 to Form 10-K of Lincoln Electric Holdings, Inc.

for the year ended December 31, 2023, SEC File No.

0-1402, and incorporated herein by reference and made a part hereof).

Inline XBRL Instance Document

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Gabriel Bruno,

President and Chief Executive Officer

Chair, President and Chief Executive Officer

Executive Vice President, Chief Financial Officer and

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Kathryn Jo Lincoln, Director

Christopher L.

Mapes, Executive Chairman of the Board

Walker, Director

February 26, 2025

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February 26, 2025

/s/ Gabriel Bruno

Gabriel Bruno as

Attorney-in-Fact for

Runtagh, Director

Walker, Director

February 27, 2024

Joy Falotico, Director

February 26, 2025

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The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosures to which it relates.

Goodwill impairment evaluation – Reporting Unit within Americas Welding Segment

Purchase price allocation related to the acquisition of Superior Controls, LLC (“RedViking”)

Description of the Matter

As disclosed in Note 5 to the consolidated financial statements, at December 31, 2023, the Company’s total goodwill was $694.5 million, of that, $497.6 million relates to the Americas Welding segment.

As disclosed in Note 1 to the consolidated financial statements, goodwill is tested for impairment in the fourth quarter using the same date each year or more frequently if changes in circumstances or the occurrence of events indicate potential impairment.

The Company first assesses qualitative factors to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount and whether it is necessary to perform a quantitative goodwill impairment test.

The Company may perform a quantitative test in instances where the more-likely-than-not threshold has not been met, including when general macroeconomic conditions or changes to the reporting unit warrant a refresh of the baseline used in a qualitative test.

The Company performed a quantitative assessment for a reporting unit within the Americas Welding segment and determined that the fair value of the reporting unit was in excess of the carrying value.

Auditing the annual goodwill impairment test for the aforementioned reporting unit under the quantitative assessment was complex and judgmental due to the significant estimation required in determining the fair value of the reporting unit.

In particular, the fair value estimate using the income approach was sensitive to significant assumptions such as the weighted average cost of capital and the terminal period revenue growth rate.

Elements of these significant assumptions are forward-looking and could be affected by future economic conditions.

As disclosed in Note 4 to the consolidated financial statements, on April 1, 2024, the Company acquired 100% ownership of RedViking.

The purchase price, net of cash acquired, in connection with the acquisition was $108,844, of which a portion was allocated to goodwill.

The Company accounted for the acquisition as a business combination.

Auditing the Company’s purchase price allocation was complex due to the significant estimation required to determine the fair value of three of the identifiable intangible assets, which were a significant input in determining the amount of the total purchase price allocated to goodwill.

These fair value estimates were sensitive to certain significant assumptions, specifically the revenue growth rates and discount rates.

Elements of these significant assumptions are forward-looking and could be affected by future market or economic conditions.

How We Addressed the Matter in Our Audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s goodwill impairment evaluation, including controls over the significant assumptions mentioned above.

To test the estimated fair value used in the Company’s annual goodwill impairment test for the reporting unit within the Americas Welding segment, our audit procedures included, among others, assessing the valuation methodology, testing the significant assumptions discussed above, and testing the completeness and accuracy of the underlying data used by the Company in its analysis.

As it pertains to the terminal period revenue growth rate, we compared the significant assumptions used by management to third party industry data and economic trends, changes to the Company’s business model, customer base or product mix, as applicable.

We involved valuation specialists to assist with our evaluation of the methodology applied and the reasonableness of certain assumptions selected by management, including, the weighted average cost of capital.

Specifically, we evaluated the components of the weighted average cost of capital assumptions used by performing an independent corroborative analysis with involvement of valuation specialists.

We performed sensitivity analyses of assumptions to evaluate the changes in the fair value of the reporting unit that would result from changes in the significant assumptions.

We obtained an understanding, evaluated the design and tested the operating effectiveness of management’s controls over the Company’s purchase price allocation process.

For example, we tested controls over management’s review of the significant assumptions described above along with the completeness and accuracy of the data used in these fair value estimates.

To test the estimated fair value of the relevant identifiable intangible assets, we performed audit procedures that included, among others, assessing the fair value methodologies, testing the significant assumptions described above, and testing the completeness and accuracy of the underlying data used by the Company in its analysis.

As it pertains to the revenue growth rates, we compared the significant assumptions used by management to historical results of the acquired business, third party industry data and economic trends.

Specifically, we evaluated the components of the discount rate assumptions used by performing an independent corroborative analysis with involvement of valuation specialists.

We performed sensitivity analyses of significant assumptions to evaluate any hypothetical changes in the fair values of the relevant identifiable intangible assets that would result from changes in the significant assumptions.

/s/ Ernst & Young LLP

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(the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria.

As indicated in the accompanying Management’s Report on Internal Control Over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Superior Controls, LLC (“RedViking”), Inrotech A/S (“Inrotech”) and Vanair Manufacturing, LLC (“Vanair”), which are included in the 2024 consolidated financial statements of the Company and constituted approximately 8% of total assets as of December 31, 2024 and 2.5% of net sales for the year then ended.

Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of RedViking, Inrotech or Vanair.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the 2024 consolidated financial statements of the Company and our report dated February 26, 2025 expressed an unqualified opinion thereon.

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Selling, general & administrative expenses

Rationalization and asset impairment charges (Note 7)

Rationalization and asset impairment net charges (Note 7)

Operating income

Interest expense, net

Other income (expense) (Note 12)

Other income (Note 12)

Income before income taxes

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Year Ended December 31,

Other comprehensive income (loss), net of tax:

Other comprehensive (loss) income, net of tax:

Unrealized gain on derivatives designated and qualifying as cash flow hedges

Defined pension plan activity

Defined benefit pension plan activity

Currency translation adjustment

Other comprehensive income (loss):

Other comprehensive (loss) income:

Comprehensive income

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Total Current Assets

Property, plant and equipment, net (Note 1)

Property, plant and equipment (Note 1)

Intangibles, net (Note 5)

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( 2,309,941 )

Unrecognized amounts from defined benefit pension plans, net of tax

Defined benefit pension plan activity, net of tax

Unrealized gain on derivatives designated and qualifying as cash flow hedges, net of tax

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( 2,488,776 )

Unrecognized amounts from defined benefit pension plans, net of tax

Defined benefit pension plan activity, net of tax

Unrealized gain on derivatives designated and qualifying as cash flow hedges, net of tax

5 unchanged sentences

( 2,682,554 )

Unrecognized amounts from defined benefit pension plans, net of tax

Defined benefit pension plan activity, net of tax

Unrealized gain on derivatives designated and qualifying as cash flow hedges, net of tax

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CASH FLOWS FROM FINANCING ACTIVITIES

(Payments on) proceeds from short-term borrowings

(Payments on) proceeds from long-term borrowings

Proceeds from (payments on) on short-term borrowings

Proceeds from long-term borrowings

Payments on long-term borrowings

Proceeds from exercise of stock options

4 unchanged sentences

Effect of exchange rate changes on Cash and cash equivalents

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS

Cash and cash equivalents at beginning of period

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In March 2022, in response to Russia’s invasion of Ukraine, the Company announced it was ceasing operations in Russia and implementing plans to support its Russian employees.

Although the Company’s Net sales and Total assets in Russia are less than 1 % of consolidated Net sales and Total assets as of December 31, 2023 and 2022, the Russia-Ukraine conflict and sanctions imposed globally may result in economic and supply chain disruptions, the ultimate financial impact of which cannot be reasonably estimated at this time.

The Company continues to monitor the Russia-Ukraine conflict and its potential impacts.

In May 2024, the Company disposed of its Russian entity and completed its exit from the Russian market.

As a result, $ 22,566 of cumulative translation adjustment previously recognized within Other comprehensive income (loss) was recorded to Rationalization and asset impairment charges on the Consolidated Statements of Income in the year ended December 31, 2024.

Translation of Foreign Currencies

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For subsidiaries operating in highly inflationary economies, both historical and current exchange rates are used in translating balance sheet accounts and translation adjustments are included in Net income.

An economy is considered highly inflationary under GAAP if the cumulative inflation rate for a three-year period meets or exceeds 100 percent.

An economy is considered highly inflationary under generally accepted accounting principles in the United States (“GAAP”) if the cumulative inflation rate for a three-year period meets or exceeds 100 percent.

The Turkish economy exceeded the three-year cumulative inflation rate of 100 percent during the second quarter of 2022.

1 unchanged sentence

Under highly inflationary accounting, the financial statements of the Company’s Turkish operation have been remeasured into the Company’s reporting currency (U.S.

Beginning April 1, 2022, the exchange gains and losses from the remeasurement of monetary assets and liabilities are reflected in current earnings, rather than “Accumulated other comprehensive loss” on the balance sheet.

For the years ended December 31, 2024, 2023 and 2022, this impact was not significant to the Company’s results.

3 unchanged sentences

dollar value of the net equity of its foreign operations to shareholders.

Foreign currency transaction gains and losses are included in Selling, general & administrative expenses and were losses of $ 1,744 in 2023 and gains of $ 3,633 and $ 1,332 in 2022 and 2021, respectively.

Foreign currency transaction net (gains) losses are included in Selling, general & administrative expenses and were ($ 1,406 ), $ 1,744 and ($ 3,633 ) in 2024, 2023 and 2022, respectively.

Cash Equivalents

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Refer to Note 16 for additional details.

Reserves are maintained for estimated obsolescence or excess inventory equal to the difference between the cost of inventory and the estimated net realizable value based upon assumptions about future demand and market conditions.

Reserves are maintained for estimated obsolescence or excess inventory equal to the difference between the cost of inventory and the estimated net realizable value based upon historical usage, future demand and market conditions.

The reserve for excess and obsolete inventory was $ 31,072 and $ 31,881 at December 31, 2024 and 2023, respectively.

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For quantitative testing, the Company compares the fair value of each reporting unit with its carrying amount.

If the carrying amount exceeds the fair value, an impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to that reporting unit.

If the carrying amount exceeds the fair

value, an impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to that reporting unit.

Fair values are determined using established business valuation techniques and models developed by the Company, estimates of market participant assumptions of future cash flows, future growth rates and discount rates to value estimated cash flows.

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The cumulative impact of revisions to total estimated costs is reflected in the period of the change, including anticipated losses.

Less than 10 % of the Company’s Net sales are recognized over time.

Approximately 10 % of the Company’s Net sales are recognized over time.

The Company recognizes any discounts, credits, returns, rebates and incentive programs based on reasonable estimates as a reduction of sales to arrive at Net sales at the same time the related revenue is recorded.

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The Company’s payment terms vary by the type and location of the customer and the products or services offered.

The Company does not offer any payment terms that would meet the requirements for consideration as a financing component under Topic 606.

The Company does not offer any payment terms that would meet the requirements for consideration as a financing component under Accounting Standards Codification Topic 606.

Refer to Note 2 for additional details.

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The ineffective portion on cash flow hedges is recognized in current earnings.

In anticipation of future debt issuance associated with the Notes referenced in Note 9, the Company has interest rate forward starting swap agreements to hedge the variability of future changes in interest rates.

The forward starting swap agreements were qualified and designated as a cash flow hedge.

The changes in fair value are recorded as part of AOCI, and upon completion of debt issuance and termination of the swaps, are amortized to interest expense over the life of the underlying debt.

Fair value hedges

Certain interest rate swap agreements were qualified and designated as fair value hedges.

The interest rate swap agreements designated as fair value hedges meet the shortcut method requirements under accounting standards for derivatives and hedging.

Accordingly, changes in the fair value of these agreements are considered to exactly offset changes in the fair value of the underlying long-term debt.

Changes in fair value are recorded in Other assets or Other liabilities with offsetting amounts recorded as a fair value adjustment to the carrying value of Long-term debt, less current portion.

Net investment hedges

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Research and Development

Research and development costs are charged to Selling, general & administrative expenses as incurred and totaled $ 71,235 , $ 63,207 and $ 55,969 in 2023, 2022 and 2021, respectively.

The Company’s discretionary employee bonus programs, which for certain U.S.-based employees are net of medical costs, are included in Selling, general & administrative expenses.

Research and development costs are charged to Selling, general and administrative expenses as incurred and totaled $ 81,821 , $ 71,235 and $ 63,207 in 2024, 2023 and 2022, respectively.

The Company’s discretionary employee bonus programs, which for certain U.S.-based employees are net of medical costs, are included in Selling, general and administrative expenses.

Bonus costs were $ 166,554 , $ 192,498 and $ 159,281 in 2024, 2023 and 2022, respectively.

6 unchanged sentences

Refer to Note 13 for additional details.

Upon acquisition of a business, the Company uses the income, market or cost approach (or a combination thereof) for the valuation as appropriate.

The acquisition of a business is accounted for as a business combination, which requires the assets acquired and liabilities assumed be recognized at their respective fair values as of the acquisition date.

The process of estimating the fair values of certain tangible assets, identifiable intangible assets and assumed liabilities requires the use of judgment in determining the appropriate assumptions and estimates.

The Company uses the income, market or cost approach (or a combination thereof) for the valuation as appropriate.

The valuation inputs in these models and analyses are based on market participant assumptions.

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The following ASUs were adopted as of January 1, 2024 and did not have a significant financial impact on the Company’s consolidated financial statements unless otherwise described within the table below:

2022-04, Liabilities-Supplier Finance Programs (Subtopic 405-50) , issued September 2022.

Requires disclosure about a company’s supplier finance program, including key terms, amount outstanding, assets pledged as applicable, and presentation on the balance sheet.

2023-07, Segment Reporting (Topic 280) , issued November 2023.

Requires enhanced disclosures about significant segment expenses, including significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”), the title and position of the CODM, an amount for other segment items by reportable segment, and disclosures about segment profit or loss and assets on an annual and interim basis.

The amendments are effective for annual periods beginning January 1, 2024, and interim periods beginning January 1, 2025.

Refer to Note 6 for the impacts on the Company’s consolidated financial statements.

2021-08, Business Combinations (Subtopic 805) , issued October 2021.

Requires the acquirer in a business combination to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606.

The adoption did not have a material impact on the Company’s consolidated financial statements.

2023-01, Leases-Common Control Arrangements (Topic 842) , issued March 2023

Requires a lessee in a common-control arrangement to amortize leasehold improvements that it owns over the improvements’ useful life, regardless of the lease term.

The requirements of the ASU are effective January 1, 2024.

2022-04, Liabilities-Supplier Finance Programs (Subtopic 405-50) , issued September 2022.

Requires disclosure about a company’s supplier finance programs, including a period-over-period balance roll forward.

This requirement of the ASU is effective January 1, 2024 and should be applied prospectively.

Refer to Note 19.

The Company is currently evaluating the impact on its financial statements of the following ASUs:

2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures , issued November 2024

Requires enhanced disclosures of specified information about certain costs and expenses.

The amendments are effective for annual periods beginning January 1, 2027, and interim periods beginning January 1, 2028.

Early adoption is prohibited.

2023-06, Disclosure Improvements , issued October 2023

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Early adoption is prohibited.

2023-01, Leases-Common Control Arrangements (Topic 842) , issued March 2023

Requires a lessee in a common-control arrangement to amortize leasehold improvements that it owns over the improvements’ useful life, regardless of the lease term.

The requirement of the ASU is effective January 1, 2024.

2023-07, Segment Reporting (Topic 280) , issued November 2023.

The amendments are effective for annual periods beginning January 1, 2024, and interim periods beginning January 1, 2025.

Early adoption is permitted.

2023-09, Income Taxes (Topic 740) , issued December 2023.

1 unchanged sentence

The amendments are effective January 1, 2025 and early adoption is permitted.

2022-04, Liabilities-Supplier Finance Programs (Subtopic 405-50) , issued September 2022.

Requires disclosure about a company’s supplier finance programs, including a period-over-period balance roll forward.

This requirement of the ASU is effective January 1, 2024 and should be applied prospectively.

NOTE 2 — REVENUE RECOGNITION

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The Company generally determines the standalone selling price based on the prices charged to customers or using expected cost plus margin.

Less than 10 % of the Company’s Net sales are recognized over time.

Approximately 10 % of the Company’s Net sales are recognized over time.

At December 31, 2024, the Company recorded $ 63,473 related to advance customer payments and $ 57,960 related to billings in excess of revenue recognized.

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NOTE 4 – ACQUISITIONS

The acquired companies are accounted for as business combinations and are included in the consolidated financial statements as of the date of acquisition.

The acquired companies discussed below are not material individually, or in the aggregate, to the actual or pro forma Consolidated Statements of Income or Consolidated Statements of Cash Flows;

as such, pro forma information related to these acquisitions has not been presented.

On July 30, 2024, the Company acquired 100 % ownership of Vanair Manufacturing, LLC (“Vanair”), a privately held, Michigan City, Indiana-based, manufacturer for a total purchase price of $ 109,993 , net of cash acquired and certain debt-like items.

In 2023, Vanair generated sales of approximately $ 100,000 (unaudited).

Vanair offers a comprehensive portfolio of mobile power solutions, including vehicle-mounted compressors, generators, welders, hydraulics, chargers/boosters, and electrified power equipment.

On June 3, 2024, the Company acquired 100 % ownership of Inrotech A/S (“Inrotech”), a privately held automation system integration and technology firm headquartered in Odense, Denmark.

The purchase price was $ 42,352 , net of cash acquired.

Inrotech specializes in automated welding systems that are differentiated by proprietary adaptive intelligence software and computer vision which guides and optimizes the welding process without the need for programming or the use of computer aided design files.

The state-of-the-art vision-based technology is used in the shipbuilding, energy, and heavy industry sectors, where welding accessibility can be challenging for traditional automated systems, but precision and quality are mission critical.

On April 1, 2024, the Company acquired 100 % ownership of Superior Controls, LLC (“RedViking”), a privately held automation system integrator based in Plymouth, Michigan.

The purchase price was $ 108,844 , net of cash acquired.

In 2023, RedViking generated sales of approximately $ 70,000 (unaudited).

RedViking specializes in the development and integration of state-of-the-art autonomous guided vehicles and mobile robots, custom assembly and dynamic test systems, and proprietary manufacturing execution system software.

The acquisition broadened the Company’s portfolio of automation solutions and extends the Company’s ability to serve customers in the growing aerospace and defense industries.

On May 3, 2023, the Company acquired 100 % ownership of Powermig Automação e Soldagem Ltda.

(“Powermig”), a privately held automation engineering firm headquartered in Caxias do Sul, Rio Grande do Sul, in Brazil.

The net purchase price was $ 29,572 , net of cash acquired, and it was accounted for as a business combination.

In 2022, Powermig generated sales of approximately $ 15,000 (unaudited).

Beginning May 3, 2023, the Company’s Consolidated Statement of Income includes the results of Powermig, which were not material for the year ended December 31, 2023.

The purchase price was $ 29,572 , net of cash acquired.

Powermig specializes in designing and engineering industrial welding automation solutions for the heavy industry and transportation sectors.

The acquisition broadened the Company’s automation portfolio and capabilities.

On December 1, 2022, the Company acquired 100 % ownership of Fori Automation, LLC (“Fori”) for an agreed upon purchase price of $ 427,000 , which was adjusted for certain debt like obligations, for total purchase price consideration of $ 468,683 or $ 416,353 net of cash acquired, before final and customary adjustments.

In 2022, the Company recognized $ 5,196 in acquisition costs related to Fori and were expensed as incurred and included in “Selling, general, and administrative expenses” in the Consolidated Statements of Income .

Fori is a leading designer and manufacturer of complex, multi-armed automated welding systems, with an extensive range of automated assembly systems, automated material handling solutions, automated large-scale, industrial guidance vehicles, and end of line testing systems.

The acquisition of Fori extended the Company’s market presence within the automotive sector as well as its automation footprint in the International Welding segment.

For the twelve months ended December 31, 2023, the Company’s Consolidated Statements of Income include the results of Fori, including Net Sales of $ 263,203 while net income for the year was not material.

The acquisition of Fori has been accounted for as a business combination, which requires the assets acquired and liabilities assumed be recognized at their respective fair values as of the acquisition date.

The process of estimating the fair values of certain tangible assets, identifiable intangible assets and assumed liabilities requires the use of judgment in

determining the appropriate assumptions and estimates.

The acquisition of Fori was accounted for as a business combination, which required the assets acquired and liabilities assumed be recognized at their respective fair values as of the acquisition date.

The process of estimating the fair values of certain tangible assets, identifiable intangible assets and assumed liabilities required the use of judgment in determining the appropriate assumptions and estimates.

The table below summarizes the final fair values of the assets acquired and liabilities assumed on the acquisition date.

For the twelve months ended December 31, 2023, the adjustments to the preliminary purchase price allocation did not have a material impact on the Consolidated Balance Sheets or Consolidated Statements of Income.

Assets Acquired and Liabilities Assumed

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(“Kestra”), a privately held manufacturer headquartered in Atibaia, Sao Paulo State, Brazil.

The net purchase price was $ 22,294 , net of cash acquired and accounted for as a business combination.

In 2022, the Company recognized $ 365 in acquisition costs related to Kestra and were expensed as incurred and included in “Selling, general, and administrative expenses” in the Consolidated Statements of Income.

The purchase price was $ 22,294 , net of cash acquired.

Kestra manufactures and provides specialty welding consumables, wear plates and maintenance and repair services for alloy and wear-resistant products commonly used in mining, steel, agricultural and industrial mill applications.

The acquisition broadened the Company’s specialty alloys portfolio and services.

On July 28, 2021, the Company acquired 100 % ownership of Overstreet-Hughes Company, Inc.

and Shoals Tubular, Inc.

The net purchase price was $ 71,716 , net of cash acquired and accounted for as a business combination.

The Company recognized $ 346 in acquisition transaction costs in 2021 which were expensed as incurred and included in “Selling, general, and administrative expenses” in the Consolidated Statements of Income.

FTP manufactures copper and aluminum headers, distributor assemblies and manifolds in the United States and Mexico for the heating, ventilation, and air conditioning sector (“HVAC”).

The acquisition further differentiated The Harris Products Group’s competitive position serving HVAC original equipment manufacturers with a comprehensive portfolio of solutions for the fabrication of HVAC coils and accelerates growth in this market.

On April 1, 2021, the Company acquired 100 % ownership of Zeman Bauelemente Produktionsgesellschaft m.b.H.

(“Zeman"), a division of the Zeman Group.

The net purchase price was $ 84,390 , net of cash acquired and accounted for as a business combination.

The Company recognized $ 1,577 in acquisition transaction costs in 2021, which were expensed as incurred and included in “Selling, general, and administrative expenses” in the Consolidated Statements of Income.

Zeman, based in Vienna, Austria, is a leading designer and manufacturer of robotic assembly and arc welding

systems that automate the tacking and welding of steel beams.

The acquisition expanded the Company’s international automation capabilities to serve customers in the structural steel and infrastructure sectors.

The acquired companies discussed above are not material individually, or in the aggregate, to the actual or pro forma Consolidated Statements of Income or Consolidated Statements of Cash Flows;

as such, pro forma information related to these acquisitions have not been presented.

During the years ended December 31, 2024, 2023 and 2022, the Company recognized acquisition costs of $ 7,042 , $ 0 and $ 6,003 , respectively, which are included in Selling, general and administrative expenses on the Consolidated Statements of Income and are expensed as incurred.

NOTE 5 – GOODWILL AND INTANGIBLES

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Balance as of December 31, 2024

(1) Additions to Americas Welding reflect goodwill recognized in the acquisition of Fori and Kestra in 2022.

International Welding reflect goodwill recognized in the acquisition of Fori in 2022.

(1) Adjustments to Americas Welding reflect goodwill recognized in the acquisition of Powermig offset by Fori purchase accounting adjustments in 2023.

Ad ditions to International Welding reflect Fori purchase accounting adjustments in 2023.

Additions to International Welding reflect Fori purchase accounting adjustments in 2023.

(2) Additions to Americas Welding reflect goodwill recognized in the acquisitions of Vanair and RedViking.

Additions to International Welding reflect goodwill recognized in the acquisition of Inrotech.

Gross carrying values and accumulated amortization of intangible assets other than goodwill by asset class were as follows:

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Customer relationships

Technology and know-how

Total intangible assets subject to amortization

During 2023, the Company acquired intangible assets either individually or as part of a group of assets, with an initial purchase price allocation and weighted-average as follows:

During 2024, the Company acquired intangible assets either individually or as part of a group of assets, with an initial purchase price allocation and weighted-average useful-life as follows:

Year Ended December 31, 2024

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Customer relationships

Technology and know-how

Total acquired intangible assets subject to amortization

Aggregate amortization expense was $ 27,075 , $ 25,983 and $ 21,908 for 2024, 2023 and 2022, respectively.

During 2023 and 2022, the Company determined that for certain intangible assets, the carrying value of the assets exceeded the fair value resulting in an impairment.

The Company recognized non-cash impairment charges of $ 1,564 and $ 1,018 in 2023 and 2022, respectively, which is recorded in Rationalization and asset impairment charges in the Company’s Consolidated Statements of Income.

During 2023, the Company Estimated annual amortization expense for intangible assets for each of the next five years is $ 31,245 in 2024, $ 30,322 in 2025, $ 28,621 in 2026, $ 26,332 in 2027 and $ 23,550 in 2028.

During 2023, the Company determined that for certain intangible assets, the carrying value of the assets exceeded the fair value

resulting in an impairment.

The Company recognized non-cash impairment charges of $ 1,564 in 2023 which is recorded in Rationalization and asset impairment charges in the Company’s Consolidated Statements of Income.

At December 31, 2024, the Company’s estimated annual amortization expense for intangible assets for each of the next five years is $ 27,172 in 2025, $ 25,821 in 2026, $ 24,936 in 2027, $ 24,142 in 2028 and $ 20,570 in 2029.

NOTE 6 – SEGMENT INFORMATION

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Segment EBIT is adjusted for special items as determined by management such as the impact of rationalization activities, certain asset impairment charges and gains or losses on disposals of assets.

The Company’s chief operating decision maker (“CODM”) is the Chief Executive Officer.

The CODM uses segment Adjusted EBIT to allocate resources for each segment predominantly in establishing the Company’s long-term strategy and in developing the annual budget.

The CODM considers actual performance using Adjusted EBIT when making decisions about allocating capital and resources to the segments.

The accounting principles applied at the operating segment level are generally the same as those applied at the consolidated financial statement level with the exception of LIFO.

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Inter-segment sales

Cost of goods sold

Other segment expenses (5)

Special items charge

Adjusted EBIT

Special items charge (gain)

Special items charge

Interest income

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Inter-segment sales

Adjusted EBIT

Cost of goods sold

Other segment expenses (5)

Special items charge (gain)

Adjusted EBIT

Special items charge

Interest income

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Inter-segment sales

Cost of goods sold

Other segment expenses (5)

Special items (gain) charge

Adjusted EBIT

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Depreciation and amortization

(1) 2024 special items reflect Rationalization and asset impairment net charges of $ 18,840 , an amortization of step up in value of acquired inventories of $ 4,776 and a pension settlement net charge of $ 4,205 .

2023 special items reflect Rationalization and asset impairment net charges of $ 468 and amortization of step up in value of acquired inventories of $ 9,390 .

2022 special items reflect Rationalization and asset impairment net gains of $ 431 , final settlement gains related to the termination of a pension plan of $ 3,735 and amortization of step up in value of acquired inventories of $ 1,106 .

2021 special items reflect pension settlement charges of $ 123,091 .

(2) 2024 special items reflect Rationalization and asset impairment net charges of $ 32,960 including the impact of the Company’s disposition of its Russian entity, a loss on asset disposal of $ 4,950 , an amortization of step up in value of acquired inventories of $ 250 and a pension settlement gain of $ 413 .

2023 special items reflect Rationalization and asset impairment net gains of $ 11,782 , amortization of step up in value of acquired inventories of $ 2,862 , gain on asset disposal of $ 1,646 , and pension settlement charges of $ 845 .

2022 special items reflect Rationalization and asset impairment charges of $ 11,681 .

2021 special items reflect Rationalization and asset impairment charges of $ 9,804 , pension settlement charges of $ 446 and amortization of step up in value of acquired inventories of $ 4,984 .

(3) 2021 special items reflect pension settlement charges of $ 2,965 and amortization of step up in value of acquired inventories of $ 820 .

(4) 2022 special items reflect acquisition transaction and integration costs of $ 6,003 related acquisitions as discussed in Note 4 to the consolidated financial statements.

2021 special items reflect acquisition transaction and integration costs of $ 1,923 related acquisitions as discussed in Note 4 to the consolidated financial statements.

(3) 2024 special items reflect Rationalization and asset impairment net charges of $ 3,955 .

(4) 2024 special items reflect transaction costs of $ 7,042 related to acquisitions as discussed in Note 4 to the consolidated financial statements.

2022 special items reflect transaction costs of $ 6,003 related acquisitions as discussed in Note 4 to the consolidated financial statements.

(5) Other segment expenses primarily include:

Selling, general and administrative expenses – including bonus and research and development expenses.

Rationalization and asset impairment net charges – refer to Note 7 for further discussion.

Export sales (excluding inter-company sales) from the United States were $ 244,334 in 2024, $ 238,704 in 2023 and $ 173,033 in 2022.

No individual customer comprised more than 10% of the Company’s total revenues for any of the three years ended December 31, 2023.

No individual customer comprised more than 10% of the Company’s total revenues in 2024, 2023 and 2022.

The geographic split of the Company’s Net sales, based on the location of the customer, and property, plant and equipment were as follows:

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NOTE 7 – RATIONALIZATION AND ASSET IMPAIRMENTS

The Company has rationalization plans primarily within the International Welding segment.

The plans include headcount restructuring and the consolidation of manufacturing facilities to better align the cost structure with economic conditions and operating needs.

At December 31, 2023, liabilities of $ 15,086 for International Welding were recognized in Other current liabilities in the Company's Consolidated Balance Sheet.

During 2024, the Company initiated rationalization plans within International Welding, Americas Welding and The Harris Products Group.

During 2023, the Company also initiated rationalization plans within International Welding.

The plans in both years impacted headcount and included the consolidation of manufacturing facilities to better align with the cost structure, economic conditions and operating needs.

As a result of these plans, in 2024 the Company recorded Rationalization and asset impairment net charges of $ 32,960 in International Welding, of which $ 22,566 is associated with the disposal of the Company’s Russian entity.

The Company also incurred Rationalization and asset impairment net charges of $ 18,840 and $ 3,955 in Americas Welding and The Harris Products Group, respectively, in 2024.

In 2023, the Company recorded a Rationalization and asset impairment net gain of $ 11,782 in International Welding and a net charge $ 468 in Americas Welding.

In 2022, the Company recorded Rationalization and asset impairment net charge of $ 11,788 primarily related to International Welding.

At December 31, 2024 and 2023, liabilities of $ 14,146 and $ 15,086 , respectively, were recognized in Other current liabilities in the Company's Consolidated Balance Sheet.

The Company does not anticipate significant additional charges related to the completion of these plans.

The Company recorded rationalization and asset impairment net gain of $ 11,314 for the year ended December 31, 2023 and net charges of $ 11,788 and $ 9,827 for the years ended December 31, 2022 and 2021, respectively, related to these plans.

The charges are primarily related to employee severance, asset impairments and gains or losses on the disposal of assets.

The Company believes the rationalization actions will positively impact future results of operations and will not have a material effect on liquidity and sources and uses of capital.

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The following table summarizes the activity related to the rationalization liabilities:

International

Americas Welding

Products Group

Balance at December 31, 2022

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NOTE 8 – ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) ("AOCI")

The following tables set forth the total changes in accumulated other comprehensive income (loss) ("AOCI") by component, net of taxes:

The following tables set forth the total changes in AOCI by component, net of taxes:

Unrealized gain

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Long-term debt

Senior Unsecured Notes due through 2045, interest at 2.8 % to 4.0 % (net of debt issuance costs of $ 1,270 and $ 1,585 at December 31, 2023 and 2022, respectively)

Term Loan due through 2025, interest at SOFR plus a 0.85 % margin, swapped $ 150,000 to a fixed interest rate of 3.55 % plus a 0.85 % margin

Other borrowings due through 2030, interest up to 7.97 %

Interest Rate

Senior Unsecured Notes

2015 Notes - Series A due August 20, 2025

2015 Notes - Series B due August 20, 2030

2015 Notes - Series C due April 1, 2035

2015 Notes - Series D due April 1, 2045

2016 Notes - Series A due October 20, 2028

2016 Notes - Series B due October 20, 2033

2016 Notes - Series C due October 20, 2037

2016 Notes - Series D due October 20, 2041

2024 Notes - Series A due August 22, 2029

2024 Notes - Series B due August 22, 2031

2024 Notes - Series C due June 20, 2034

Term Loan due through 2025

Other borrowings due through 2030

Plus interest rate swap adjustment

Less current portion

Less debt issuance costs

Long-term debt, less current portion

Short-term debt

Amounts due banks, weighted average interest at 47.7 % in 2023 and 4.0 % in 2022

Amounts due banks

Current portion long-term debt

Total short-term debt

At December 31, 2023 and 2022, the fair value of long-term debt, including the current portion, was approximately $ 1,013,795 and $ 1,009,020 , respectively, which was determined using available market information and methodologies requiring judgment.

(1) Interest is calculated at the secured overnight finance rate (“SOFR”) plus a 0.85 % margin.

(2) Interest rate was 7.97 % for both years ended December 31, 2024 and 2023.

(3) Weighted average interest of Other borrowings related to liquidity needs in a hyperinflationary country was 47.8 % in 2024 and 47.7 % in 2023.

At December 31, 2024 and 2023, the fair value of long-term debt, including the current portion, was approximately $ 1,184,313 and $ 1,013,795 , respectively.

The approximate fair value of the Company’s long-term debt, including current maturities, was based on a valuation model using Level 2 observable inputs using available market information and methodologies requiring judgment.

The carrying value of this debt at such dates was $ 1,250,555 and $ 1,102,771 , respectively.

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Senior Unsecured Notes

On June 20, 2024, the Company entered into a Note Purchase Agreement (the “NPA”) pursuant to which it agreed to issue new senior unsecured notes (“2024 Notes”) in an aggregate principal amount of $ 550,000 , at par.

Pursuant to the NPA, the Company issued one series of the 2024 Notes in the aggregate principal amount of $ 400,000 on June 20, 2024, and two series of the 2024 Notes each in the aggregate principal amount of $ 75,000 on August 22, 2024.

On April 1, 2015 and October 20, 2016, the Company entered into separate Note Purchase Agreements pursuant to which it issued senior unsecured notes (the "Notes") through a private placement.

Interest on the Notes is paid semi-annually.

The proceeds of the Notes were used for general corporate purposes.

The Notes contain certain affirmative and negative covenants.

As of December 31, 2023, the Company was in compliance with all of its debt covenants relating to the Notes.

The maturity and interest rates of the 2015 Notes and 2016 Notes are as follows:

Maturity Date

Interest Rate

August 20, 2025

August 20, 2030

April 1, 2035

April 1, 2045

October 20, 2028

October 20, 2033

October 20, 2037

October 20, 2041

The Company’s total weighted average effective interest rate and remaining weighted average term, inclusive of the 2015 Notes and 2016 Notes, is 3.3 % and 10.4 years, respectively.

The 2015 and 2016 Notes each have an aggregate principal amount of $ 350,000 .

The Company’s total weighted average effective interest rate and remaining weighted average tenure of the senior unsecured notes is 4.1 %, including the impact from terminated swap agreements as discussed in Note 14, and 8.9 years, respectively.

Interest on the senior unsecured notes is paid semi-annually.

The senior unsecured notes contain certain affirmative and negative covenants.

As of December 31, 2024, the Company was in compliance with all of its debt covenants relating to the senior unsecured notes.

On November 29, 2022, the Company entered into a term loan in the aggregate principal amount of $ 400,000 (the “Term Loan”), which was borrowed in full.

The Term Loan matures on November 29, 2025.

The Term Loan bears an interest at a rate based on SOFR, plus a margin ranging from 0.75 % to 1.75 % based on the Company’s consolidated net leverage ratio.

The proceeds of the Term Loan were used to pay a portion of the purchase price in connection with the acquisition of Fori.

The agreement governing the Term Loan (the “Term Loan Credit Agreement”) contains representations and warranties, as well as customary affirmative, negative and financial covenants for credit facilities of this type, including limitations on the Company and its subsidiaries with respect to liens, investments, distributions, mergers and acquisitions, dispositions of assets and transactions with affiliates.

The Term Loan Credit Agreement requires the Company to maintain a minimum consolidated fixed charges coverage ratio and maximum consolidated net leverage ratio.

As of December 31, 2023, the Company was in compliance with all of its covenants.

Revolving Credit Agreement

On April 23, 2021, the Company amended and restated the agreement governing its line of credit by entering into the Second Amended and Restated Credit Agreement (“Credit Agreement”).

The Credit Agreement has a line of credit totaling $ 500,000 , has a term of 5 years with a maturity date of April 23, 2026 and may be increased, subject to certain conditions including the consent of its lenders, by an additional amount up to $ 150,000 .

On March 8, 2023, the Credit Agreement was amended to replace the LIBOR rate to a term secured overnight finance rate (“SOFR”);

interest rate on borrowings is based on SOFR plus a spread of 0.85 % to 1.85 % based on (1) the Company’s net leverage ratio and (2) a credit spread adjustment.

The Credit Agreement contains customary representations and warranties, as well as customary affirmative, negative and financial covenants for credit facilities of this type (subject to negotiated baskets and exceptions), including limitations on the Company and its subsidiaries with respect to liens, investments, distributions, mergers and acquisitions, dispositions of assets and transactions with affiliates.

As of December 31, 2023, the Company was in compliance with all of its covenants and had no outstanding borrowings under the Credit Agreement.

On June 20, 2024, the Company used the net proceeds from the issuance of the initial series of 2024 Notes to repay the Term Loan in full.

In June 2024, the Company terminated the interest rate swaps that were associated with the Term Loan and realized a gain of $ 2,428 , which is recorded in Other income.

Revolving Credit Agreements

On June 20, 2024, the Company terminated its existing $ 500,000 revolving credit facility and entered into a $ 1 billion revolving credit facility, which may be increased, subject to certain conditions including the consent of its lenders, by an additional amount up to $ 300,000 .

The revolving credit facility matures on June 20, 2029.

The revolving credit facility will initially bear interest on outstanding borrowings at a per annum rate equal to SOFR plus 1.10 % and could fluctuate based on the Company’s total net leverage ratio at a spread ranging from SOFR plus 1.10 % to SOFR plus 1.60 % .

The financial covenants consist of a maximum net leverage ratio of 3.5 x EBITDA and a minimum interest coverage ratio of 2.5 x EBITDA.

The revolving credit facility contains customary representations and warranties, as well as customary affirmative, negative and financial covenants for credit facilities of this type (subject to negotiated baskets and exceptions), including limitations on the Company and its subsidiaries with respect to liens, investments, distributions, mergers and acquisitions, dispositions of assets and transactions with affiliates.

As of December 31, 2024, the Company was in compliance with all of its covenants and had no outstanding borrowings under the revolving credit facility.

The Company has other lines of credit and debt agreements totaling $ 45,608 .

As of December 31, 2023 the Company was in compliance with all of its covenants and had $ 2,435 outstanding at December 31, 2023.

As of December 31, 2024 the Company was in compliance with all of its covenants and had outstanding debt under short-term lines of credit of $ 10,520 .

Maturities of long-term debt, including payments for amounts due banks, for the five years succeeding December 31, 2024 are $ 110,524 in 2025, $ 5 in 2026, $ 0 in 2027, $ 100,000 in 2028, $ 75,000 in 2029 and $ 975,000 thereafter.

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Options exercised

Options canceled

Options forfeited

Balance at end of year

Exercisable at end of year

Options granted under both the 2015 and 2023 Employee Plans and its predecessor plans may be outstanding for a maximum of 10 years from the date of grant.

Options granted under the 2023 Employee Plan and its predecessor plans may be outstanding for a maximum of 10 years from the date of grant.

The majority of options granted vest ratably over a period of 3 years from the grant date.

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The Company issued shares of common stock from treasury upon all exercises of stock options in 2024.

In 2023, all options issued were under the 2015 and 2023 Employee Plans.

In 2024, all options issued were under the 2023 Employee Plan.

The Company uses the Black-Scholes option pricing model for estimating fair values of options.

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These units are reflected within dilutive shares in the calculation of earnings per share.

In 2023, 85,188 RSUs were issued under the 2015 and 2023 Employee Plan and the 2015 and 2023 Director Plan.

In 2024, 74,124 RSUs were issued under the 2023 Employee Plan and the 2023 Director Plan.

The remaining weighted average vesting period of all non-vested RSUs is 1.9 years as of December 31, 2024.

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The Company issues common stock from treasury upon the vesting of PSUs and any earned dividend equivalents.

In 2023, the Company issued 45,643 PSU’s and has 82,089 PSUs outstanding under the 2015 Employee Plan at a weighted average fair value of $ 136.41 per share.

In 2024, the Company issued 53,686 PSUs and has 74,449 PSUs outstanding as of December 31, 2024 under the 2015 and 2023 Employee Plans at a weighted average

fair value of $ 179.73 per share.

The remaining weighted average vesting period of all non-vested PSUs is 1.7 years as of December 31, 2024.

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Under this plan, 800,000 shares have been authorized to be purchased.

There were no shares purchased in 2023 or 2022, and 9,070 shares purchased in 2021.

There were no shares purchased in 2024, 2023 or 2022.

NOTE 11 – RETIREMENT ANNUITY AND GUARANTEED CONTINUOUS EMPLOYMENT PLANS

The Company maintains a number of defined benefit and defined contribution plans to provide retirement benefits for employees.

These plans are maintained and contributions are made in accordance with the Employee Retirement Income Security Act of 1974 ("ERISA"), local statutory law or as determined by the Board of Directors.

These plans are maintained and contributions are made in accordance with the Employee Retirement Income Security Act of 1974 ("ERISA"), local statutory law or as determined by the Board.

The plans generally provide benefits based upon years of service and compensation.

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Plan participants' contributions

Acquisitions & other adjustments

Benefits paid

Settlements (1)

Currency translation

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Net amount recognized

(1) Actuarial gains in 2022 were primarily the result of an increase in the Company’s pension plan discount rates.

(1) Settlements in 2024 resulting from lump sum pension payments and the purchase of a group annuity contract related to the termination of a pension plan.

The after-tax amounts of unrecognized actuarial net loss, prior service costs and transition assets included in Accumulated other comprehensive loss at December 31, 2024 were $ 1,037 , $( 28 ) and $ 17 , respectively.

The actuarial loss represents changes in the estimated obligation not yet recognized in the Consolidated Income Statement.

In March 2020, the Company approved an amendment to terminate the Lincoln Electric Company Retirement Annuity Program (“RAP”) plan effective as of December 31, 2020.

The Company provided notice to participants of the intent to terminate the plan and applied and received a determination letter.

During 2021, pension obligations were distributed through a combination of lump sum payments to eligible plan participants and through the purchase of a group annuity contract in October 2021.

The lump sum payments and annuity purchase resulted in pre-tax settlement charges of $ 126,056 in the twelve months ended December 31, 2021.

The remaining surplus assets of $ 68,458 at December 31, 2021 were transferred to a suspense account in January 2022 and are being used to fund employer matching contributions in the Company’s Savings Plan.

The surplus assets as of December 31, 2023 were $ 41,849 and are recorded in Other current assets and Other assets in the Company’s Consolidated Balance Sheets.

The Company terminated the Lincoln Electric Company Retirement Annuity Program (“RAP”) plan effective as of December 31, 2020.

The surplus assets were transferred to a suspense account in January 2022 and are being used to fund employer matching contributions in the Company’s Savings Plan.

The surplus assets as of December 31, 2024 and 2023 were $ 27,059 and $ 41,849 , respectively, and are recorded in Other current assets and Other assets in the Company’s Consolidated Balance Sheets.

Amounts Recognized in Consolidated Balance Sheets

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Amortization of prior service cost

Amortization of net loss

Amortization of net loss (gain)

Settlement and curtailment charges (gains) (1)

Defined benefit plans

(1) Pension settlement net charges resulting from lump sum pension payments and the purchase of a group annuity contract in 2021.

The components of Pension cost for defined benefit plans, other than service cost, are included in Other income (expense) in the Company’s Consolidated Statements of Income.

(1) Settlements in 2024 resulting from lump sum pension payments and the purchase of a group annuity contract related to the termination of a pension plan.

The components of Pension cost for defined benefit plans, other than service cost, are included in Other income in the Company’s Consolidated Statements of Income.

Pension Plans with Accumulated Benefit Obligations in Excess of Plan Assets

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The Company has reserved the right to terminate this plan effective at the end of a calendar year by giving notice of such termination not less than six months prior to the end of such year.

NOTE 12 — OTHER INCOME (EXPENSE)

The components of Other income (expense) were as follows:

NOTE 12 — OTHER INCOME

The components of Other income were as follows:

Year Ended December 31,

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Other income (2)

Total Other income (expense)

Total Other income

(1) Other components of net periodic pension (cost) income includes pension settlements and curtailments as discussed in Note 11.

(2) In 2023, Other income primarily relates to non-recurring items such as royalty and other non-operating gains .

(2) In 2024, Other income primarily relates to non-recurring items such as the gain on termination of interest rate swaps, other non-operating gains and a loss on asset disposal.

In 2023, Other income primarily related to non-recurring items such as royalty and other non-operating gains.

NOTE 13 – INCOME TAXES

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Foreign rate variance

Valuation allowances

Research and development credit

Pension plan termination adjustment

tax cost of foreign source income

Effective tax rate

The effective tax rate remained consistent in 2023 and 2022.

The effective tax rate is higher in 2024 as compared to 2023 primarily due to the mix of earnings and discrete items.

Total income tax payments, net of refunds, were $ 157,542 in 2024, $ 180,512 in 2023 and $ 151,818 in 2022.

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The Company recognizes interest and penalties related to unrecognized tax benefits in Income taxes.

Current income tax expense included expense of $ 101 for the year ended December 31, 2023 and benefits of $ 486 for the year ended December 31, 2022 for interest and penalties.

For those same years, the Company’s accrual for interest and penalties related to unrecognized tax benefits totaled $ 2,364 and $ 2,292 , respectively.

Current income tax expense included expense of $ 145 and $ 101 for the years ended December 31, 2024 and 2023, respectively, for interest and penalties.

For those same years,

the Company’s accrual for interest and penalties related to unrecognized tax benefits totaled $ 2,495 and $ 2,364 , respectively.

The following table summarizes the activity related to unrecognized tax benefits:

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Increase related to current year tax provisions

(Decrease)/increase related to prior years' tax positions

Decrease related to prior years' tax positions

Decrease related to settlements with taxing authorities

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Certain foreign currency forward contracts are qualified and designated as cash flow hedges.

The dollar equivalent gross notional amount of these short-term contracts was $ 84,148 at December 31, 2023 and $ 66,296 at December 31, 2022.

The Company has interest rate forward starting swap agreements that are qualified and designated as cash flow hedges.

The dollar equivalent gross notional amount of the long-term contracts was $ 100,000 at December 31, 2023 and 2022 and have a termination date of August 2025.

The Company has commodity contracts that are qualified and designated as cash flow hedges.

The notional amount of these contracts was 200,000 pounds at December 31, 2023 and 875,000 pounds at December 31, 2022.

In March 2023, the Company entered into interest rate swap agreements, which were qualified and designated as cash flow hedges, with an aggregate notional amount of $ 150,000 .

The interest rate swaps will effectively convert the interest rate on $ 150,000 of the Term Loan discussed in Note 9 from a variable rate based on one-month SOFR to a fixed rate.

The dollar equivalent gross notional amount of these short-term contracts was $ 96,444 and $ 84,148 at December 31, 2024 and 2023, respectively.

The Company had interest rate forward starting swap agreements that were qualified and designated as cash flow hedges that were terminated during 2024.

At December 31, 2023, the dollar equivalent gross notional amount of the contracts was $ 100,000 .

Upon termination of the contracts in the second quarter of 2024, the company had a gain of $ 25,852 recorded in AOCI that will be amortized to Interest expense, net over the life of the associated debt.

The Company had commodity contracts that were qualified and designated as cash flow hedges that matured in 2024.

The notional amount of these contracts was 200,000 pounds at December 31, 2023.

The Company had interest rate swap agreements, which were qualified and designated as cash flow hedges.

At December 31, 2023, the aggregate notional amount of the contracts was $ 150,000 .

During 2024, the Company terminated the interest rate swaps that were associated with the Term Loan and realized a gain of $ 2,428 , which is recorded in Other income.

Net investment hedges

The Company has foreign currency forward contracts that qualify and are designated as net investment hedges.

The dollar equivalent gross notional amount of these short-term contracts was $ 119,607 at December 31, 2023.

The dollar equivalent gross notional amount of these contracts were $ 319,450 and $ 119,607 at December 31, 2024 and 2023, respectively.

Derivatives not designated as hedging instruments

1 unchanged sentence

These derivatives are held as hedges of certain balance sheet exposures.

The dollar equivalent gross notional amount of these contracts was $ 492,600 at December 31, 2023 and $ 380,443 at December 31, 2022.

The dollar equivalent gross notional amount of these contracts were $ 421,754 and $ 492,600 at December 31, 2024 and 2023, respectively.

Fair values of derivative instruments in the Company’s Consolidated Balance Sheets follow:

14 unchanged sentences

Derivatives by hedge designation

Classification of gain

Classification of (loss) gain

Not designated as hedges:

Foreign exchange contracts

Selling, general

& administrative expenses

Selling, general & administrative expenses

The effects of designated cash flow hedges on AOCI and the Company’s Consolidated Statements of Income consisted of the following:

Total gain recognized in AOCI, net of tax

December 31, 2023

December 31, 2022

Total (loss) gain recognized in AOCI, net of tax

Foreign exchange contracts

3 unchanged sentences

Commodity contracts

The Company expects a gain of $ 755 related to existing contracts to be reclassified from AOCI, net of tax, to earnings over the next 12 months as the hedged transactions are realized.

The Company expects a loss of $ 812 related to existing contracts to be reclassified from AOCI, net of tax, to earnings over the next 12 months as the hedged transactions are realized.

Year Ended December 31,

6 unchanged sentences

Cost of goods sold

Forward starting swap agreements

Interest expense, net

NOTE 15 – FAIR VALUE

9 unchanged sentences

Foreign exchange contracts

Interest rate swap agreements

Commodity contracts

Forward starting swap agreements

Net investment contracts

Pension surplus

Foreign exchange contracts

Net investment contracts

Deferred compensation

10 unchanged sentences

Foreign exchange contracts

Interest rate swap agreements

Commodity contracts

3 unchanged sentences

Net investment contracts

Commodity contracts

Deferred compensation

14 unchanged sentences

Inventories in the Consolidated Balance Sheet is comprised of the following components:

December 31, 2023

December 31, 2022

Raw materials

5 unchanged sentences

At December 31, 2024 and 2023, approximately 35 % and 37 % of total inventories, respectively, were valued using the LIFO method.

The excess of current cost over LIFO cost was $ 129,946 at December 31, 2023 and $ 133,909 at December 31, 2022, or a b enefit of $ 3,963 in 2023 as compared with charges of $ 19,733 in 2022.

The excess of current cost over LIFO cost was $ 120,633 at December 31, 2024 and $ 129,946 at December 31, 2023, or a b enefit of $ 9,313 in 2024 and $ 3,963 in 2023.

NOTE 17 – LEASES

39 unchanged sentences

The amounts due to the financial institution for suppliers that participate in the supplier financing program are included in Trade accounts payable on the Company’s Consolidated Balance Sheets, and the associated payments are included in operating activities in the Consolidated Statements of Cash Flows.

At December 31, 2023 and December 31, 2022, Trade accounts payable included $ 29,111 and $ 33,475 , respectively, payable to suppliers that have elected to participate in the supplier financing program.

At December 31, 2024 and 2023, Trade accounts payable included $ 29,164 and $ 29,111 , respectively, payable to suppliers that have elected to participate in the supplier financing program.

Twelve Months Ended December 31,

Confirmed obligations at beginning of the period

Invoices confirmed during the period

Confirmed invoices paid during the period

Confirmed obligations outstanding at the end of the period

SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS

53 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures