#1Investor Presentation ••mks February 5, 2019#2о о ° 0 Safe Harbor for Forward Looking Statements о 0 © O Statements in this presentation regarding the future financial and operating results of MKS Instruments, Inc. ("MKS"), MKS' future business prospects, MKS' future growth, - MKS' proposed acquisition of Electro Scientific Industries, Inc. ("ESI"), the expected timetable for completing the acquisition, benefits and synergies of the acquisition, future opportunities for the combined company and any other statements about MKS' or ESI's managements' future expectations, beliefs, goals, plans or prospects constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that are not statements of historical fact (including statements containing the words "will," "projects," "intends," "believes," "plans," "anticipates," "expects," "estimates," "forecasts," "continues" and similar expressions) should also be considered to be forward-looking statements. These statements are only predictions based on current assumptions and expectations. Actual events or results may differ materially from those in the forward- looking statements set forth herein. Among the important factors that could cause actual events to differ materially from those in the forward-looking statements are: the conditions affecting the markets in which MKS and ESI operate, including the fluctuations in capital spending in the semiconductor industry and other advanced manufacturing markets, the economy in general as well as fluctuations in net sales to MKS' and ESI's existing and prospective customers; the ability of the parties to complete the ESI acquisition; the risk that the conditions to the closing of the ESI acquisition, including receipt of required regulatory approvals and approval of ESI shareholders, are not satisfied in a timely manner or at all; litigation relating to the ESI acquisition; unexpected costs, charges or expenses resulting from the ESI acquisition; the risk that disruption from the proposed ESI acquisition materially and adversely affects the respective businesses and operations of MKS and ESI; the ability of MKS to realize the anticipated synergies, cost savings and other benefits of the proposed ESI acquisition, including the risk that the anticipated benefits from the proposed ESI acquisition may not be realized within the expected time period or at all; competition from larger or more established companies in the companies' respective markets; MKS' ability to successfully grow ESI's business; potential adverse reactions or changes to business relationships resulting from the announcement, pendency or completion of the ESI acquisition; the challenges, risks and costs involved with integrating the operations of the companies we have previously acquired, including MKS' most recently completed acquisition of Newport Corporation; the ability of MKS to retain and hire key employees; legislative and regulatory developments; potential fluctuations in quarterly results, the terms of our term loan and the availability and terms of the financing to be incurred in connection with the ESI acquisition; dependence on new product development, rapid technological and market change, acquisition strategy, manufacturing and sourcing risks, volatility of stock price, international operations, financial risk management, and the other factors described in MKS' most recent Annual Report on Form 10- K for the fiscal year ended December 31, 2017 and its most recent quarterly report filed with the SEC and in ESI's Annual Report on Form 10-K for the fiscal year ended March 31, 2018 and its most recent quarterly report filed with the SEC. MKS and ESI are under no obligation to, and expressly disclaim any obligation to, update or alter these forward-looking statements, whether as a result of new information, future events or otherwise after the date of this presentation. ••mks MKS PROPRIETARY 2#3Important Additional Information Will be Filed with the SEC ESI plans to file with the SEC and mail to its stockholders a Proxy Statement in connection with the transaction. Additionally, MKS and ESI will file other relevant documents with the SEC in connection with the transaction. The Proxy Statement and other documents to be filed with the SEC by MKS and ESI will contain important information about MKS, ESI, the transaction and related matters. Investors and security holders are urged to read the Proxy Statement and other documents to be filed with the SEC by MKS and ESI carefully when they are available. Investors and security holders will be able to obtain free copies of the Proxy Statement and other documents filed with the SEC by MKS and ESI through the web site maintained by the SEC at www.sec.gov. In addition, investors and security holders will be able to obtain free copies of the Proxy Statement from ESI by visiting the Investor Relations section of ESI website (www.esi.com) or by directing a request to ESI, Attn: Investor Relations, at 13900 N.W. Science Park Drive, Portland, Oregon 97229. MKS and ESI, and their respective directors and executive officers, may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding MKS' directors and executive officers is contained in MKS' Form 10-K for the fiscal year ended December 31, 2017 and its proxy statement dated March 28, 2018, which are filed with the SEC. Information regarding ESI's directors and executive officers is contained in ESI's Form 10-K for the fiscal year ended March 31, 2018 and its proxy statement dated July 10, 2018, which are filed with the SEC. To the extent holdings of securities by such directors or executive officers have changed since the amounts disclosed in each company's respective proxy statement, such changes have been or will be reflected on Statements of Change in Ownership on Form 4 filed with the SEC. Additional information regarding the participants in the solicitation of proxies in respect of the proposed transaction and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the Proxy Statement and other documents to be filed with the SEC by MKS and ESI when they are available. ••mks MKS PROPRIETARY 3#4о о Non-GAAP Measures ° 0 о 0 © O This presentation includes measures that are not in accordance with U.S. generally accepted accounting principles ("non-GAAP measures"). Non-GAAP measures exclude amortization of acquired intangible assets, asset impairments, costs associated with completed and announced acquisitions, acquisition integration costs, an inventory step-up adjustment related to an acquisition, restructuring charges, certain excess and obsolete inventory charges, fees and expenses related to the repricing of MKS' term loan, amortization of debt issuance costs, net proceeds from an insurance policy, costs associated with the sale of a business, the tax effect of the 2017 Tax Cut and Jobs Act, the tax effect of legal entity restructurings, other discrete tax benefits and charges, and the related tax effect of these adjustments. These non-GAAP measures should be viewed in addition to, and not as a substitute for, MKS' reported results, and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. MKS management believes the presentation of these non-GAAP measures is useful to investors for comparing prior periods and analyzing ongoing business trends and operating results. Please see the Appendix entitled "GAAP to Non-GAAP Reconciliations" at the end of this presentation for reconciliations of our non-GAAP measures to the comparable GAAP measures and the definitions of terms used in this presentation. 4 ••mks MKS PROPRIETARY#5MKS Key Messages о ° 0 0 0 о © O о GLOBAL TECHNOLOGY LEADER in served markets • Leveraged to attractive HIGH GROWTH MARKETS Track record of SUSTAINABLE & PROFITABLE GROWTH • ROBUST & DISCIPLINED business process ••mks MKS PROPRIETARY UT 5#6Enabling Technology for 50+ Years о о ° 0 0 0 0 1990 2000 2010 2017 2018+ 90 7M $327M $853M $1.9B $2.1B Well positioned for sustainable & profitable growth by solving complex problems ••mks MKS PROPRIETARY 6#7Focused on High Growth Markets 254821 31.2540 ••mks 31.2590 B12540 142.1327 32% $670M 2013 68% 25.98217 5 Year CAGR VA Advanced 34% Semiconductor 20% Total 25% MKS PROPRIETARY о о ° 0 со © O O о 0 о 61.2590 45% $2.1B 2018 55% 29.1598 42.1256 7#8Market Leader with Broad Technology Portfolio ° 0 0 0 о о © O PRESSURE VACUUM VACUUM COMPONENTS FLOW GAS ANALYSIS PLASMA POWER DIGITAL CONTROL PHOTONICS LASERS OPTICS Direct/ Flow Vacuum Control & Indirect & Gas RGA FTIR Comps Iso Valves Reactive Gas RF Gauging Delivery Tool, Safety Chamber, Instruments Network Vibration Motion Control Opto- Laser Mechanics Measuremt Lasers Laser Gratings/ IR Optics Filters Integrated Optics Solutions 3 2 1 2 1-2 1-3 3 1 2 1-3 1-2 1-2 2-3 2-3 ••mks ADVANCED ENERGY AEROTECH BROOKS COHERENT CVI MELLES GRIOT 1 1 2 3 DAIHEN EBARA GENTEC HORIBA HUTTINGER II-VI INFICON IPG PHOTONICS LUMENTUM NEWPOWER PLASMA PI QIOPTIQ SEMROCK SIGMA KOKI SUMITOMO THORLABS ULVAC VAT Source: Company information ••mks . MKS PROPRIETARY . . .. 8#9Multiple Growth Opportunities ••mks#10Our Focus: Technology-Intensive Markets • • SEMICONDUCTOR Deposition Equipment Etch Equipment Lithography Inspection Packaging ••mks о о ° 0 0 0 0 RESEARCH & DEFENSE Atomic & Molecular Physics Spectroscopy High Energy Physics INDUSTRIAL TECHNOLOGIES • Electronic Thin Film Industrial Manufacturing Electronic Component Manufacturing Process Industries Telecom/Datacom LIFE & HEALTH SCIENCES Analytical & Medical Instrumentation Bio-Pharmaceutical Medical & Bioimaging Medical Devices Ophthalmic Surgery • • MKS PROPRIETARY Ultrafast Laser Studies Infrared Technology • Surveillance 10#11Extended Leadership in the Semiconductor Market Beam Profiler Thermopile Optical Sensor ••mks QUASI-CW Laser Water Positioning Stage LITHOGRAPHY & INSPECTION FRONT END Fab Network (APC) Mass Flow Verifier Beam Profiling Camera Gases In Excimer Laser Mirrors Digital Control Network Chamber Controller Connectivity Internet (e-Diagnostics) fr fr fr fp Gas Box Pressure Transducers Service, Training, and Calibration Mass Flow Controllers Flow Ratio Controller Remote Plasma Source Gas Composition Monitor Process Chamber Ozone Generator Materials Delivery System Gate Valve Endpoint Detection UW Power Generator RF Power Generator Helium Cooling Subsystem RF Matchi DC Power Generator DEPOSITION, ETCH & CLEAN MKS PROPRIETARY Process Monitor Indirect Gauge Linear Stages Direct Gauge Pressure Controller 0 0 UV Laser о BACK END Control Valve Indirect Gauge Isolation Valve To Pump Rotation Stages Vacuum Components/ Subsystems Exhaust Monitor Heater Air-Bearing Stage PACKAGING & INSPECTION Precision Optics I Vibration Isolation Table 1 11#12о о High Growth Semiconductor Opportunity ° 0 0 0 о о ATOMIC LAYER PROCESSING New process technologies create opportunities to expand SAM and gain share • Ozone • Pressure, Flow, Valves • Power Solutions HIGH ASPECT RATIO In logic and memory, device architectures require more power and control to process tomorrow's most critical features High power, high finesse RF • On-wafer remote plasma processing KEY ENABLING TECHNOLOGIES Across our diverse portfolio, we have several key technologies that enable our customers Power/Match • • Remote Plasma Processing • Reactive Gas • Vacuum Measurement ••mks MKS PROPRIETARY 12#13Surround the WorkpieceSM ••mks Beam Delivery & Conditioning Mirror 1/4 Wave Polarization Plate Optics Collimator Isolator Beam Splitting Cube Laser Source Femto IceFure Pico Nano Talon Translation Stage Controller Registration Camera 44410 о о ° 0 0 0 © O о Process Control Beam Profiling Focusing Lens 06666606 99999999 Active Vibration Control Motion & Positioning Isolation Table Positioning Stage(s) MKS PROPRIETARY H Power Measurement Focal Spot Analyzer Beam Quality (M2) Power Meter Monitoring Software 13#14Industrial Microprocessing: Paradigm Shift 2007-2010. THEN 2014-2018 NOW о о ° 0 0 0 о о 2020+ TOUCHSCREEN PATTERNING PC BOARD DEPANELING PACKAGE CUTTING FLEX PCB DRILLING GLASS CUTTING TOUCHSCREEN 1 PATTERNING PC BOARD CAMERA DEPANELING WINDOW CUTTING PACKAGE CUTTING FILM CUTTING FLEX PCB DRILLING CAMERA WINDOW CUTTING COMPOSITE MATERIALS PROCESSING GLASS CUTTING TOUCHSCREEN PATTERNING PC BOARD DEPANELING PACKAGE CUTTING ENCLOSURE MARKING CERAMIC SCRIBING ENCLOSURE MARKING ENCLOSURE DRILLING & CUTTING ••mks MOBILE TOUCH DISPLAYS MOBILE | IOT | TOUCH DISPLAYS MKS PROPRIETARY ENCLOSURE MARKING CERAMIC SCRIBING ENCLOSURE DRILLING & CUTTING RESISTOR TRIMMING SURFACE FUNCTIONALIZATION © O FUTURE NANOMATERIAL PROCESSING FILM CUTTING FLEX PCB DRILLING CAMERA WINDOW CUTTING CERAMIC SCRIBING RESISTOR TRIMMING BATTERY PROCESSING DRILLING MOBILE | IOT | AUTOMOTIVE | ENERGY VR/AR FLEXIBLE DISPLAYS 14#15Industrial Microprocessing: Paradigm Shift 2007-20THEN 2014-2018 NOW TOUCHSCREEN PATTERNING PC BOARD DEPANELING PACKAGE CUTTING 100s COMPONENTS/DEVICE ENCLOSURE MARKING ••mks MOBILE TOUCH DISPLAYS о о ° 0 0 0 © O о 2020+ FUTURE GLASS FLEX PCB DRILLING CUTTING TOUCHSCREEN PATTERNING PC BOARD DEPANELING CAMERA WINDOW CUTTING PACKAGE CUTTING CERAMIC SCRIBING ENCLOSURE MARKING ENCLOSURE DRILLING & CUTTING 1,000s COMPONENTS/DEVICE FILM CUTTING FLEX PCB DRILLING CAMERA WINDOW CUTTING COMPOSITE MATERIALS PROCESSING GLASS CUTTING TOUCHSCREEN PATTERNING PC BOARD DEPANELIN PACKAGE CUTTING NANOMATERIAL PROCESSING 10,000s ENCLOSURE MARKING FILM CUTTING FLEX PCB DRILLING CAMERA WINDOW CUTTING COMPONENTS/DEVICE CERAMIC CERAMIC SCRIBING ENCLOSURE DRILLING & CUTTING RESISTOR TRIMMING SURFACE FUNCTIONALIZATION SCRIBING RESISTOR TRIMMING BATTERY PROCESSING DRILLING MOBILE | IOT | TOUCH DISPLAYS MKS PROPRIETARY MOBILE | IoT | AUTOMOTIVE | ENERGY VR/AR FLEXIBLE DISPLAYS 15#16о о ° 0 High Growth Industrial Technology Segments 0 0 ELECTRONICS MANUFACTURING Electronics and electrical component manufacturing including flexible circuits, printed circuit boards and all electrical components Lasers Power Vibration Control ELECTRONIC THIN FILM Thin film applications with similar manufacturing requirements to Semi • Lasers • Pressure, Flow, Valves • Power, Plasma, Ozone INDUSTRIAL MANUFACTURING Material processing in applications such as cutting, welding, embossing; discrete assembly operations Lasers Power Motion Pressure, Flow ••mks MKS PROPRIETARY 16#17ESI Announcement ••mks#18о о MKS to Acquire Electro Scientific Industries (ESI) esi. EXECUTING ON A 0 0 0 0 Key Strategy for MKS • Acquiring a market leading technology company that serves common markets with complementary customer solutions Expands Industrial segments of PCB, Electronic Thin Film, and Electronic Component manufacturing • Expands MKS' addressable market by $2.2B and adds $304M in CY17 Revenue Expected to be accretive to Non-GAAP earnings and free cash flow in the first 12 months ••mks MKS PROPRIETARY 18#19Complementary Technology Leaders ••mks Founded 1961 Headquarters in Andover, MA CY 2017 Revenue of $1.9B 4,900+ Employees . 1,500+ Global Patents R&D Spending ~$133M R&D Headcount ~750+ Leadership in UV and ultrafast lasers Motion, photonics & optics RF power & plasma Vacuum processing; precise control of pressure, flow & composition esi Founded 1944 Headquarters in Portland, OR CY 2017 Revenue of $304M 600+ Employees* 1,000+ Global Patents* R&D Spending ~$35M R&D Headcount ~140+* Leadership in Laser-based process equipment - Advanced PCB processing - Semi manufacturing - Component manufacturing ••mks Source 2017 MKSI 10K * Fiscal Year 2018 ESIO 10K MKS PROPRIETARY о о о ° 0 0 0 © O 19#20Advancing Our Strategy о о ° 0 0 0 о о Surround the Workpiece" Beam Delivery & Conditioning Laser Source Fanta Pico Process Control Mirror 1/4 Wave Polarization Plate Optics Collimator Isolator Beam Splitting Cube Nano Translation Stage Controller Registration Camera Focusing 1317 Active Vibration Control Motion Positioning Positioning Isolation Table Stage(s) Beam Profiling Power Measurement Focal Spot Analyzer Beam Quality (M2) Power Meter Monitoring Software EXTEND and differentiate leadership in the use of UV lasers for advanced manufacturing COMBINE applications knowledge (beam / Workpiece) with systems and technologies DRIVE opportunities within both the Systems and Component businesses ACCELERATE pursuit of additional Industrial applications of laser processing ••.mks MKS PROPRIETARY 20 20#21о о Significant Potential Growth Opportunities INDUSTRIAL MACHINING $1.0B MARKING ENGRAVING FINE METAL DRILLING EXPANDS MKS SAM BY ° 0 0 0 © O PRINTED CIRCUIT BOARDS $1.0B FLEX PCB VIA DRILLING HDI PCB VIA DRILLING IC PACKAGING VIA DRILLING SEMICONDUCTOR $170M WAFER MARKING WAFER SCRIBING/DICING WAFER TRIM ••mks $2.2B MKS PROPRIETARY ELECTRONIC COMPONENTS $100M MLCC TESTING RESISTOR TRIM 21#22Balanced and Diversified End Markets MKSI by End Market in 2018 о о ° 0 0 0 © O о Pro Forma Combined in 2018 ••mks 11% 8% 26% $2.1B 9% 7% 55% 34% Semi Industrial $2.45B 49% Research & Defense LHS MKS PROPRIETARY 22#23Strengthens Advanced Market Growth MKSI by End Market in 2018 о о ° 0 0 0 © O о Pro Forma Combined in 2018 $930M ADVANCED MARKETS SEMI $1.2B ADVANCED MARKETS SEMI ••mks 34% increase in Advanced Market revenue MKS PROPRIETARY * Revenue is combined 2018 data from MKSI and ESI 23#24Transaction Overview Per Share Consideration $30.00 all cash transaction Transaction Consideration $1 billion о о ° 0 0 0 © O Synergies and EPS Impact Pro Forma Capitalization (as if the transaction had closed on June 30, 2018) • $15M within 18-36 months Accretive to Non-GAAP EPS and free cashflow in first 12 months after closing Cash of approximately $400M Up to $650M of new debt, total term loan debt of ~$1.0B Pro forma gross debt/EBITDA at closing 1.3X(1) Pro forma net debt/EBITDA at closing 0.8X(1) (1) Based upon $650M in debt financing and combined Pro Forma June 30, 2018 adjusted EBITDA as calculated in Appendix ••mks Financial and Capital Return Policy Expected Closing MKS PROPRIETARY • . Focus on de-levering This transaction does not impact our ability to continue quarterly dividend payments First quarter 2019 24#25MKS and ESI • UV and ultrafast lasers • Motion, photonics and optics • RF power and plasma • Vacuum processing; precise control of pressure, flow and composition ⚫mks esi • Laser-based process equipment Advanced PCB processing - Semi manufacturing Component manufacturing ••mks MKS PROPRIETARY о о ° 0 0 0 0 о O O O © O 25#26Strong Financial Execution & Performance ••mks#27Focused Financial Management ••mks TRACK RECORD OF STRONG PERFORMANCE о о ° 0 0 0 о Multiyear record of strong financial performance and operating leverage ⚫ Significant operating leverage in business model о CAPITAL DEPLOYMENT FOCUSED ON VALUE CREATION Strong emphasis toward generating organic growth and funding M&A strategy • Successful execution of disciplined acquisition strategy CULTURE OF CONTINUOUS IMPROVEMENTS Deep culture of continuous profitability improvement Resulting in over 760% increase in Non-GAAP EPS from 2013 to 2018 MKS PROPRIETARY 27#28о о Multiyear Record of Strong Financial Performance REVENUE AS REPORTED (in millions) NON-GAAP EPS ° 0 0 © O о 0 о C 25% CAGR $1,295 $2,075 $1,916 54% CAGR $5.96 $7.83 $814 $781 $669 $3.03 $2.22 $1.89 $0.90 FY13 FY14 FY15 FY16 FY17 FY18 FY13 FY14 FY15 FY16 FY17 FY18 ••mks MKS PROPRIETARY 28#29Successful Execution of Disciplined Acquisition Strategy PRESSURE/ VACUUM VACUUM FLOW GAS ANALYSIS PLASMA POWER COMPONENTS DIGITAL CONTROL PHOTONICS LASERS OPTICS Direct/ Flow Vacuum Control & Indirect & Gas RGA FTIR Comps Iso Valves Reactive Gas RF Gauging Delivery Tool, Safety Chamber, Instruments Network Vibration Control Motion Opto- Laser Mechanics Measuremt Lasers Laser Gratings/ IR Integrated Optics Filters Optics Solutions ●omks 1 1 2 3 3 2 1 2 1 1-2 1-3 3 1 2 1-3 1-2 1-2 2-3 2-3 ••mks MKS CORE PRODUCT PORTFOLIO IN 2000 MARKET LEADING TECHNOLOGY EXPANSION INTO HIGH GROWTH MARKETS INNOVATIVE CUSTOMER SOLUTIONS DRIVE SHAREHOLDER VALUE CREATION Completed Over 15 Acquisitions Since 2000 MKS PROPRIETARY 29#30Strong Post-Acquisition Performance from Newport Newport, now our Light and Motion ($M) © O O O 0 © © O L&M Revenue Division, has experienced a 34% increase in quarterly revenues • Since closing, L&M has delivered a 206% increase in quarterly non- GAAP operating income on a pro forma basis • Synergy expectations for the Newport acquisition were revised upward from $35 million to $40 million two years post-acquisition $151 Q2'16 $202 Q4'18 34% L&M Non-GAAP Operating Income ($M) $16 $49 206% ••mks MKS PROPRIETARY Q2'16 Q4'18 30#31о о ° 0 0 © O о Track Record of Increasing Dividends $0.205 $0.200 $0.195 $0.190 $0.185 $0.180 $0.175 $0.170 $0.165 $0.160 $0.155 $0.150 $0.145 2011 Quarterly Cash Dividend Per Share о Increased dividend 6 times for a 33% increase ••mks 2012 2013 2014 2015 2016 2017 Q1'18 Q2'18 Q3'18 Dividend growth is a reflection of confidence in Free Cash Flow generation MKS PROPRIETARY 31#32Strong Balance Sheet Supports Growth ROBUST FREE CASH FLOW (2) GENERATION (in millions) SIGNIFICANT о о о ° 0 0 о о C DELEVERAGING ACHIEVED $64 FY13 448% increase $89 $126 FY14 FY15 $161 3.0 $351 $324 FY16 FY17 FY18 4/16(1) (1) Acquisition of Newport Corporation closed on April 29, 2016. April, June and December 2016 periods are pro forma as if the acquisition of Newport Corporation closed on January 1, 2016. (2) Free Cash Flow equals cash flow from operations less capital expenditures. ••mks MKS PROPRIETARY 2.1 83% REDUCTION IN GROSS LEVERAGE RATIO 0.8 0.5 Q4' 16 Q4' 17 Q4' 18 32#33GAAP to Non-GAAP Reconciliations & Pro-forma Information ••mks#34Combined Pro Forma Income Statement(¹) Trailing twelve months ended June 30,2018 ••mks (1) (2) ลล Net Revenues Gross Profit Operating Expenses Other Expenses, net Operating Income Interest Income (Expense) and Other, net Profit before Tax Income Tax Expense (Benefit) Net Income EBITDA Interest Income (Expense), net Income Tax Expense (Benefit) Depreciation Amortization EBITDA Non-GAAP Items (excluding Amortization) (2) Stock Compensation Adjusted EBITDA MKS ESI Combined $ 2,125 $ 406 2,531 1,004 188 1,192 440 79 520 51 3 53 513 105 619 (25) (25) 488 105 593 106 (38) 68 $ 382 $ 144 $ 525 20 20 106 (38) 68 37 7 44 44 44 588 112 700 10 11 21 26 5 31 $ 624 $ 128 $ 752 Pro forma combined results do not include transaction related adjustments or synergies. Non-GAAP items include restructurings, costs associated with completed and announced acquisitions, certain excess and obsolete inventory charges and sale of certain inventory previously reduced to its net realizable value. MKS PROPRIETARY о ° 0 0 0 о о о C 34#35GAAP Net Income Per Share to Non-GAAP Earnings Per Share Reconciliations о ° 0 0 0 о (in thousands, except per share data) Year Ended December 31, 2018 2017 2016 2015 2014 2013 Net income per share $ 7.15 $ 6.16 $ 1.94 $ 2.28 $ 2.16 $ 0.67 Adjustments (net of tax, if applicable) Acquisition and integration costs (0.02) 0.10 0.50 Acquisition inventory step-up 0.28 0.01 0.04 Expenses related to sale of a business 0.02 Excess and obsolete inventory charge 0.02 0.12 Sale of previously written down inventory (0.04) Fees and expenses related to repricing of term loan 0.01 0.01 0.02 Amortization of debt issuance costs 0.07 0.17 0.13 Restructuring 0.06 0.07 0.01 0.04 0.05 0.03 Executive retirement costs 0.05 Environmental costs Asset impairment 0.02 0.12 0.12 0.09 Gain on sale of business (1.36) Net proceeds from an insurance policy (0.02) (0.02) Amortization of intangible assets 0.79 0.83 0.66 0.13 0.09 0.04 Windfall tax benefit on stock-based compensation (0.15) (0.20) Withholding tax on dividends (0.05) 0.25 0.02 Special tax (benefit)/expense (0.14) (0.39) 0.05 Tax benefit from legal entity restructuring (0.09) Effect of US tax reform Pro forma tax adjustments Non-GAAP net earnings per share Weighted average shares outstanding 0.08 (0.21) (0.31) (0.51) (0.05) (0.07) (0.04) $ 7.79 $ 5.96 $ 3.03 $ 2.22 $ 1.89 $ 0.90 55,000 55,074 54,051 53,560 53,515 53,481 ••mks MKS PROPRIETARY 35#36Light & Motion Division GAAP Operating Income to Non-GAAP Operating Income Reconciliation о о ° 0 о 0 O O C Q2'16 Q3'16 Q4'16 Q1'17 Income from operations Adjustments: ($23.7) $5.1 $11.0 $18.2 Q2'17 $13.9 Q3'17 $28.9 Q4'17 $40.4 Q1 '18 Q2'18 Q3'18 $43.4 $47.5 $42.3 Acquisition and integration costs (Note 1) 21.7 0.7 (0.3) 0.4 0.2 (0.3) (1.2) Acquisition inventory step-up (Note 2) 10.1 5.0 Excess and obsolete inventory charge (Note 3) Restructuring (Note 4) Asset impairment (Note 5) 1.2 (0.1) 2.0 6.7 0.8 0.2 0.2 0.7 Environmental costs (Note 6) Amortization of intangible assets Non-GAAP income from operations Sales % of Sales 1.0 7.9 $16.0 10.8 $21.6 11.0 $21.7 10.8 $29.3 9.8 9.3 $33.8 $38.3 9.1 $50.0 9.5 9.2 9.0 $54.1 $55.7 $52.0 $ 151 $ 10.6% 151 $ 14.3% 153 $ 14.2% 159 $ 18.4% 171 $ 19.8% 178 $ 21.5% 201 $ 24.9% 206 $ 205 $ 201 26.2% 27.2% 25.8% ••mks Note 1: Acquisition and integration costs related to the acquisition of Newport Corporation by MKS Instruments, Inc. (the "Newport Merger"), which closed during the second quarter of 2016. During the second quarter of 2018, we reversed a portion of these costs due to severance provisions that were not met. Note 2: Step-up adjustments recorded in cost of sales relate to the step-up of inventory to fair value as a result of the Newport Merger. Note 3: Adjustment recorded in cost of sales related to excess and obsolete inventory charges related to the discontinuation of a product line in connection with the consolidation of two manufacturing sites. Note 4: Restructuring costs recorded during fiscal year 2017, primarily relate to the consolidation of two manufacturing plants. Restructuring costs recorded during fiscal year 2018 primarily relate to severance costs related to a reduction in workforce and also include severance costs related to transferring a portion of our shared accounting functions in the United States to a third party. Note 5: An impairment charge was recorded, primarily related to the write-off of goodwill and intangible assets in conjunction with the consolidation of two manufacturing plants. Note 6: Environmental costs recorded relate to an EPA-designated Superfund site, which was acquired as part of the Newport Merger. MKS PROPRIETARY 36#37••mks