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As Of Filer Filing For·On·As Docs:Size 10/31/19 Timken Co 10-Q 9/30/19 83:11M |
Document/Exhibit Description Pages Size 1: 10-Q Quarterly Report HTML 1.41M 2: EX-31.1 Certification -- §302 - SOA'02 HTML 26K 3: EX-31.2 Certification -- §302 - SOA'02 HTML 26K 4: EX-32 Certification -- §906 - SOA'02 HTML 24K 58: R1 Cover Document HTML 73K 31: R2 Consolidated Statements of Income (Unaudited) HTML 67K 43: R3 Consolidated Statements of Comprehensive Income HTML 54K (Unaudited) 81: R4 Consolidated Balance Sheets HTML 172K 57: R5 Consolidated Balance Sheets (Parenthetical) HTML 43K 30: R6 Consolidated Statements of Cash Flows (Unaudited) HTML 131K 42: R7 Basis of Presentation HTML 25K 80: R8 Significant Accounting Policies HTML 79K 59: R9 Acquisitions (Notes) HTML 92K 56: R10 Inventories HTML 36K 78: R11 Property, Plant and Equipment HTML 35K 33: R12 Goodwill and Other Intangible Assets HTML 78K 21: R13 Leases (Notes) HTML 70K 55: R14 Contingencies (Notes) HTML 34K 77: R15 Financing Arrangements HTML 63K 32: R16 Equity HTML 196K 20: R17 Accumulated Other Comprehensive Income HTML 118K 54: R18 Earnings Per Share HTML 53K 79: R19 Revenue (Notes) HTML 82K 50: R20 Segment Information HTML 56K 19: R21 Retirement Benefit Plans HTML 81K 68: R22 Postretirement Benefit Plans HTML 45K 74: R23 Fair Value HTML 83K 49: R24 Derivatives and Hedging Activities (Notes) HTML 40K 18: R25 Recent Accounting Pronouncements New Accounting HTML 44K Pronouncements (Policies) 67: R26 Acquisitions (Tables) HTML 89K 73: R27 Inventories (Tables) HTML 35K 51: R28 Property, Plant and Equipment (Tables) HTML 35K 17: R29 Goodwill and Other Intangible Assets (Tables) HTML 77K 22: R30 Leases (Tables) HTML 60K 35: R31 Financing Arrangements (Tables) HTML 56K 75: R32 Equity (Tables) HTML 196K 52: R33 Accumulated Other Comprehensive Income (Tables) HTML 115K 23: R34 Earnings Per Share (Tables) HTML 51K 36: R35 Revenue (Tables) HTML 74K 76: R36 Segment Information (Tables) HTML 57K 53: R37 Retirement Benefit Plans (Tables) HTML 80K 25: R38 Postretirement Benefit Plans (Tables) HTML 48K 34: R39 Income Taxes (Tables) HTML 47K 10: R40 Fair Value (Tables) HTML 74K 45: R41 Derivatives and Hedging Activities (Table) HTML 33K 71: R42 Recent Accounting Pronouncements Table (Details) HTML 189K 65: R43 Acquisitions (Details) HTML 194K 11: R44 Inventories (Details) HTML 39K 46: R45 Inventories (Details Textual) HTML 25K 72: R46 Property, Plant and Equipment (Details) HTML 36K 66: R47 Property, Plant and Equipment (Details Textual) HTML 24K 13: R48 Goodwill and Other Intangible Assets (Details) HTML 36K 44: R49 Goodwill and Other Intangible Assets (Details 1) HTML 58K 39: R50 Goodwill and Other Intangible Assets (Details HTML 57K Textual) 28: R51 Leases (Details) HTML 107K 61: R52 Contingencies (Details) HTML 26K 83: R53 Financing Arrangements (Details) HTML 50K 37: R54 Financing Arrangements (Details 1) HTML 65K 27: R55 Financing Arrangements (Details Textual) HTML 138K 60: R56 Equity (Details) HTML 134K 82: R57 Equity (Details Textual) HTML 33K 40: R58 Accumulated Other Comprehensive Income (Details) HTML 78K 26: R59 Earnings Per Share (Details) HTML 50K 64: R60 Earnings Per Share (Details Textual) HTML 24K 70: R61 Revenue Disaggregation of Revenue (Details) HTML 75K 48: R62 Segment Information (Details) HTML 49K 15: R63 Retirement Benefit Plans (Details) HTML 56K 63: R64 Postretirement Benefit Plans (Details) HTML 46K 69: R65 Income Taxes (Details Textual) HTML 35K 47: R66 Fair Value (Details) HTML 57K 14: R67 Fair Value (Details Textual) HTML 25K 62: R68 Derivatives and Hedging Activities (Details) HTML 27K 12: R9999 Uncategorized Items - tkr10-q93019.htm HTML 22K 24: XML IDEA XML File -- Filing Summary XML 150K 41: XML XBRL Instance -- tkr10-q93019_htm XML 3.04M 38: EXCEL IDEA Workbook of Financial Reports XLSX 94K 6: EX-101.CAL XBRL Calculations -- tkr-20190930_cal XML 222K 7: EX-101.DEF XBRL Definitions -- tkr-20190930_def XML 915K 8: EX-101.LAB XBRL Labels -- tkr-20190930_lab XML 1.79M 9: EX-101.PRE XBRL Presentations -- tkr-20190930_pre XML 1.20M 5: EX-101.SCH XBRL Schema -- tkr-20190930 XSD 140K 16: JSON XBRL Instance as JSON Data -- MetaLinks 384± 562K 29: ZIP XBRL Zipped Folder -- 0000098362-19-000115-xbrl Zip 617K
Document |
i ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
i ☐ | TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
i Ohio | i 34-0577130 | ||
(State
or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||
i 4500 Mount Pleasant Street NW | |||
i North
Canton | i Ohio | i 44720-5450 | |
(Address
of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||
i Common
Shares, without par value | i TKR | i The New York Stock Exchange |
i Large
accelerated filer | ☒ | Accelerated filer | ☐ | ||
Non-accelerated filer | ☐ | Smaller
reporting company | i ☐ | ||
Emerging
growth company | i ☐ |
Class | Outstanding at September
30, 2019 | |||
Common Shares, without par value | i 75,324,189 shares |
PAGE | |||
I. | |||
Item
1. | |||
Item 2. | |||
Item
3. | |||
Item 4. | |||
II. | |||
Item 1. | |||
Item1A. | |||
Item
2. | |||
Item 6. |
Three
Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(Dollars in millions, except per share data) | |||||||||||||||
Net
sales | $ | i 914.0 | $ | i 881.3 | $ | i 2,893.7 | $ | i 2,670.7 | |||||||
Cost
of products sold | i 636.5 | i 628.0 | i 2,007.9 | i 1,885.1 | |||||||||||
Gross
Profit | i 277.5 | i 253.3 | i 885.8 | i 785.6 | |||||||||||
Selling,
general and administrative expenses | i 148.0 | i 142.0 | i 459.4 | i 432.4 | |||||||||||
Impairment
and restructuring charges | i 1.6 | i 2.6 | i 3.5 | i 3.1 | |||||||||||
Operating
Income | i 127.9 | i 108.7 | i 422.9 | i 350.1 | |||||||||||
Interest
expense | ( i 18.2 | ) | ( i 12.5 | ) | ( i 55.5 | ) | ( i 33.2 | ) | |||||||
Interest
income | i 1.1 | i 0.6 | i 3.5 | i 1.5 | |||||||||||
Non-service
pension and other postretirement (expense) income | ( i 14.4 | ) | ( i 3.2 | ) | ( i 14.1 | ) | i 2.5 | ||||||||
Other
income, net | i 5.8 | i 3.7 | i 10.5 | i 7.3 | |||||||||||
Income
Before Income Taxes | i 102.2 | i 97.3 | i 367.3 | i 328.2 | |||||||||||
Provision
for income taxes | i 35.5 | i 25.0 | i 110.4 | i 83.5 | |||||||||||
Net
Income | i 66.7 | i 72.3 | i 256.9 | i 244.7 | |||||||||||
Less:
Net income attributable to noncontrolling interest | i 2.5 | i 0.7 | i 8.3 | i 1.9 | |||||||||||
Net
Income Attributable to The Timken Company | $ | i 64.2 | $ | i 71.6 | $ | i 248.6 | $ | i 242.8 | |||||||
Net
Income per Common Share Attributable to The Timken Company Common Shareholders | |||||||||||||||
Basic earnings per share | $ | i 0.85 | $ | i 0.93 | $ | i 3.28 | $ | i 3.14 | |||||||
Diluted
earnings per share | $ | i 0.84 | $ | i 0.91 | $ | i 3.23 | $ | i 3.09 |
Three
Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(Dollars in millions) | |||||||||||||||
Net
Income | $ | i 66.7 | $ | i 72.3 | $ | i 256.9 | $ | i 244.7 | |||||||
Other
comprehensive income (loss), net of tax: | |||||||||||||||
Foreign currency translation adjustments | ( i 63.0 | ) | ( i 24.3 | ) | ( i 62.1 | ) | ( i 62.5 | ) | |||||||
Pension
and postretirement liability adjustment | i 76.7 | i — | i 76.6 | i — | |||||||||||
Change
in fair value of derivative financial instruments | i 1.9 | ( i 0.4 | ) | i 0.5 | i 4.0 | ||||||||||
Other
comprehensive income (loss), net of tax | i 15.6 | ( i 24.7 | ) | i 15.0 | ( i 58.5 | ) | |||||||||
Comprehensive
Income, net of tax | i 82.3 | i 47.6 | i 271.9 | i 186.2 | |||||||||||
Less:
comprehensive income (loss) attributable to noncontrolling interest | i 0.7 | ( i 5.1 | ) | i 8.1 | ( i 6.8 | ) | |||||||||
Comprehensive
Income Attributable to The Timken Company | $ | i 81.6 | $ | i 52.7 | $ | i 263.8 | $ | i 193.0 |
(Unaudited) | |||||||
(Dollars in millions) | |||||||
ASSETS | |||||||
Current Assets | |||||||
Cash
and cash equivalents | $ | i 181.4 | $ | i 132.5 | |||
Restricted
cash | i 0.5 | i 0.6 | |||||
Accounts
receivable, less allowances (2019 – $17.8 million; 2018 – $21.9 million) | i 548.3 | i 546.6 | |||||
Unbilled
receivables | i 151.6 | i 116.6 | |||||
Inventories,
net | i 805.3 | i 835.7 | |||||
Deferred
charges and prepaid expenses | i 30.1 | i 28.2 | |||||
Other
current assets | i 90.2 | i 77.0 | |||||
Total
Current Assets | i 1,807.4 | i 1,737.2 | |||||
Property,
Plant and Equipment, net | i 906.8 | i 912.1 | |||||
Operating
Lease Assets | i 115.0 | i — | |||||
Other
Assets | |||||||
Goodwill | i 954.7 | i 960.5 | |||||
Other
intangible assets | i 702.8 | i 733.2 | |||||
Non-current
pension assets | i 11.8 | i 6.2 | |||||
Non-current
other postretirement benefit assets | i 23.5 | i — | |||||
Deferred
income taxes | i 27.3 | i 59.0 | |||||
Other
non-current assets | i 16.0 | i 37.0 | |||||
Total
Other Assets | i 1,736.1 | i 1,795.9 | |||||
Total
Assets | $ | i 4,565.3 | $ | i 4,445.2 | |||
LIABILITIES
AND EQUITY | |||||||
Current Liabilities | |||||||
Short-term debt | $ | i 34.8 | $ | i 33.6 | |||
Current
portion of long-term debt | i 61.8 | i 9.4 | |||||
Short-term
operating lease liabilities | i 28.0 | i — | |||||
Accounts
payable, trade | i 265.2 | i 273.2 | |||||
Salaries,
wages and benefits | i 116.9 | i 174.9 | |||||
Income
taxes payable | i 23.2 | i 23.5 | |||||
Other
current liabilities | i 174.7 | i 171.0 | |||||
Total
Current Liabilities | i 704.6 | i 685.6 | |||||
Non-Current
Liabilities | |||||||
Long-term debt | i 1,553.5 | i 1,638.6 | |||||
Accrued
pension benefits | i 167.8 | i 161.3 | |||||
Accrued
postretirement benefits | i 36.9 | i 108.7 | |||||
Long-term
operating lease liabilities | i 72.3 | i — | |||||
Deferred
income taxes | i 131.7 | i 138.0 | |||||
Other
non-current liabilities | i 81.0 | i 70.3 | |||||
Total
Non-Current Liabilities | i 2,043.2 | i 2,116.9 | |||||
Shareholders’
Equity | |||||||
Class I and II Serial Preferred Stock, without par value: | |||||||
Authorized – 10,000,000 shares each class, none issued | i — | i — | |||||
Common
shares, without par value: | |||||||
Authorized – 200,000,000 shares | |||||||
Issued (including shares in treasury) (2019 – 98,375,135 shares; 2018 – 98,375,135 shares) | |||||||
Stated
capital | i 53.1 | i 53.1 | |||||
Other
paid-in capital | i 945.5 | i 951.9 | |||||
Earnings
invested in the business | i 1,815.0 | i 1,630.2 | |||||
Accumulated
other comprehensive loss | ( i 80.1 | ) | ( i 95.3 | ) | |||
Treasury
shares at cost (2019 – 23,050,946 shares; 2018 – 22,421,213 shares) | ( i 988.7 | ) | ( i 960.3 | ) | |||
Total
Shareholders’ Equity | i 1,744.8 | i 1,579.6 | |||||
Noncontrolling
Interest | i 72.7 | i 63.1 | |||||
Total
Equity | i 1,817.5 | i 1,642.7 | |||||
Total
Liabilities and Equity | $ | i 4,565.3 | $ | i 4,445.2 |
Nine
Months Ended September 30, | |||||||
2019 | 2018 | ||||||
(Dollars in millions) | |||||||
CASH PROVIDED (USED) | |||||||
Operating
Activities | |||||||
Net income | $ | i 256.9 | $ | i 244.7 | |||
Adjustments
to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | i 120.4 | i 105.9 | |||||
Impairment
charges | i 0.8 | i 0.6 | |||||
(Gain)
loss on sale of assets | ( i 1.0 | ) | i 0.2 | ||||
Gain
on disposal of lease assets | ( i 0.4 | ) | i — | ||||
Loss
on divestiture | i — | i 0.6 | |||||
Deferred
income tax provision | i 1.7 | i 2.2 | |||||
Stock-based
compensation expense | i 20.7 | i 25.5 | |||||
Pension
and other postretirement expense | i 23.2 | i 8.5 | |||||
Pension
and other postretirement benefit contributions and payments | ( i 37.1 | ) | ( i 12.4 | ) | |||
Operating
lease expense | i 27.7 | i — | |||||
Operating
lease payments | ( i 26.8 | ) | i — | ||||
Changes
in operating assets and liabilities: | |||||||
Accounts receivable | ( i 6.4 | ) | ( i 65.7 | ) | |||
Unbilled
receivables | ( i 35.0 | ) | ( i 37.6 | ) | |||
Inventories | i 37.8 | ( i 94.3 | ) | ||||
Accounts
payable, trade | ( i 7.4 | ) | ( i 9.9 | ) | |||
Other
accrued expenses | ( i 28.7 | ) | i 10.2 | ||||
Income
taxes | i 9.0 | ( i 0.5 | ) | ||||
Other,
net | ( i 0.6 | ) | i 17.0 | ||||
Net
Cash Provided by Operating Activities | i 354.8 | i 195.0 | |||||
Investing
Activities | |||||||
Capital expenditures | ( i 82.9 | ) | ( i 62.8 | ) | |||
Acquisitions,
net of cash received | ( i 82.7 | ) | ( i 765.4 | ) | |||
Proceeds
from divestitures | i — | i 14.0 | |||||
Other | i 3.4 | i 3.9 | |||||
Net
Cash Used in Investing Activities | ( i 162.2 | ) | ( i 810.3 | ) | |||
Financing
Activities | |||||||
Cash dividends paid to shareholders | ( i 63.8 | ) | ( i 64.2 | ) | |||
Purchase
of treasury shares | ( i 56.1 | ) | ( i 63.0 | ) | |||
Proceeds
from exercise of stock options | i 9.9 | i 12.7 | |||||
Payments
related to tax withholding for stock-based compensation | ( i 9.3 | ) | ( i 5.4 | ) | |||
Accounts
receivable facility borrowings | i 25.0 | i 145.2 | |||||
Accounts
receivable facility payments | i — | ( i 114.9 | ) | ||||
Proceeds
from long-term debt | i 451.0 | i 1,286.1 | |||||
Payments
on long-term debt | ( i 481.7 | ) | ( i 533.1 | ) | |||
Deferred
financing costs | ( i 1.9 | ) | ( i 0.9 | ) | |||
Short-term
debt activity, net | ( i 10.2 | ) | ( i 3.9 | ) | |||
Other | ( i 0.3 | ) | ( i 1.3 | ) | |||
Net
Cash (Used in) Provided by Financing Activities | ( i 137.4 | ) | i 657.3 | ||||
Effect
of exchange rate changes on cash | ( i 6.4 | ) | ( i 12.4 | ) | |||
Increase
in Cash, Cash Equivalents and Restricted Cash | i 48.8 | i 29.6 | |||||
Cash,
cash equivalents and restricted cash at beginning of year | i 133.1 | i 125.4 | |||||
Cash,
Cash Equivalents and Restricted Cash at End of Period | $ | i 181.9 | $ | i 155.0 |
Balance at December 31, 2018 | Effect of Accounting Change | Balance at | |||||||
Operating lease assets | $ | i — | $ | i 114.1 | $ | i 114.1 | |||
Other
intangible assets | i 733.2 | i 0.7 | i 733.9 | ||||||
Other
non-current assets (1) | i 37.0 | ( i 15.3 | ) | i 21.7 | |||||
Total
Assets | i 4,445.2 | i 99.5 | i 4,544.7 | ||||||
Short-term
operating lease liability | i — | i 29.8 | i 29.8 | ||||||
Long-term
operating lease liability | i — | i 69.7 | i 69.7 | ||||||
Total
Liabilities | $ | i 2,802.5 | $ | i 99.5 | $ | i 2,902.0 |
Purchase Price Allocation | |||
Assets: | |||
Accounts receivable, net | $ | i 6.7 | |
Inventories,
net | i 23.6 | ||
Other current assets | i 2.4 | ||
Property,
plant and equipment, net | i 17.2 | ||
Operating lease assets | i 2.8 | ||
Goodwill | i 18.6 | ||
Other
intangible assets | i 28.1 | ||
Other non-current assets | i 0.5 | ||
Total
assets acquired | $ | i 99.9 | |
Liabilities: | |||
Accounts
payable, trade | $ | i 5.7 | |
Other current liabilities | i 4.8 | ||
Long-term
operating lease liabilities | i 2.1 | ||
Other non-current liabilities | i 0.9 | ||
Total
liabilities assumed | $ | i 13.5 | |
Noncontrolling interest acquired | i 1.8 | ||
Net
assets and noncontrolling interest acquired | $ | i 84.6 |
Purchase Price Allocation | ||||
Weighted - Average Life | ||||
Trade names (indefinite life) | $ | i 12.3 | Indefinite | |
Technology
and know-how | i 5.2 | i 14
years | ||
Customer relationships | i 10.6 | i 17
years | ||
Total intangible assets | $ | i 28.1 |
Initial Purchase Price Allocation | Adjustments | Purchase Price Allocation | |||||||
Assets: | |||||||||
Accounts
receivable, net | $ | i 42.5 | $ | i 42.5 | |||||
Inventories,
net | i 61.6 | ( i 0.1 | ) | i 61.5 | |||||
Other
current assets | i 8.5 | i 1.0 | i 9.5 | ||||||
Property,
plant and equipment, net | i 71.7 | ( i 6.3 | ) | i 65.4 | |||||
Goodwill | i 468.2 | i 1.8 | i 470.0 | ||||||
Other
intangible assets | i 372.6 | i 2.8 | i 375.4 | ||||||
Other
non-current assets | i 20.2 | ( i 4.1 | ) | i 16.1 | |||||
Total
assets acquired | $ | i 1,045.3 | $ | ( i 4.9 | ) | $ | i 1,040.4 | ||
Liabilities: | |||||||||
Accounts
payable, trade | $ | i 35.2 | $ | i 35.2 | |||||
Salaries,
wages and benefits | i 9.1 | i 9.1 | |||||||
Income
taxes payable | i 2.5 | i 0.4 | i 2.9 | ||||||
Other
current liabilities | i 8.2 | i 0.2 | i 8.4 | ||||||
Short-term
debt | i 2.5 | ( i 0.6 | ) | i 1.9 | |||||
Long-term
debt | i 3.0 | ( i 2.9 | ) | i 0.1 | |||||
Accrued
pension benefits | i 5.7 | i 5.7 | |||||||
Accrued
postretirement benefits | i 11.7 | i 11.7 | |||||||
Deferred
income taxes | i 116.2 | ( i 0.6 | ) | i 115.6 | |||||
Other
non-current liabilities | i 16.9 | i 3.4 | i 20.3 | ||||||
Total
liabilities assumed | $ | i 211.0 | $ | ( i 0.1 | ) | $ | i 210.9 | ||
Net
assets acquired | $ | i 834.3 | $ | ( i 4.8 | ) | $ | i 829.5 |
Manufacturing supplies | $ | i 31.9 | $ | i 32.4 | ||
Raw
materials | i 102.4 | i 102.4 | ||||
Work
in process | i 289.0 | i 287.7 | ||||
Finished
products | i 426.5 | i 452.7 | ||||
Subtotal | i 849.8 | i 875.2 | ||||
Allowance
for obsolete and surplus inventory | ( i 44.5 | ) | ( i 39.5 | ) | ||
Total
Inventories, net | $ | i 805.3 | $ | i 835.7 |
Mobile Industries | Process Industries | Total | |||||||
Beginning balance | $ | i 349.7 | $ | i 610.8 | $ | i 960.5 | |||
Acquisitions | i 0.7 | i 19.7 | i 20.4 | ||||||
Foreign
currency translation adjustments and other changes | ( i 10.9 | ) | ( i 15.3 | ) | ( i 26.2 | ) | |||
Ending
balance | $ | i 339.5 | $ | i 615.2 | $ | i 954.7 |
Balance
at September 30, 2019 | Balance at December 31, 2018 | |||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||
Intangible
assets subject to amortization: | ||||||||||||||||||
Customer relationships | $ | i 481.7 | $ | i 120.6 | $ | i 361.1 | $ | i 481.5 | $ | i 99.8 | $ | i 381.7 | ||||||
Technology
and know-how | i 244.9 | i 50.7 | i 194.2 | i 245.0 | i 40.4 | i 204.6 | ||||||||||||
Trade
names | i 11.9 | i 5.6 | i 6.3 | i 11.3 | i 4.8 | i 6.5 | ||||||||||||
Capitalized
software | i 268.6 | i 243.6 | i 25.0 | i 266.4 | i 236.5 | i 29.9 | ||||||||||||
Other | i 41.1 | i 37.2 | i 3.9 | i 40.8 | i 35.2 | i 5.6 | ||||||||||||
$ | i 1,048.2 | $ | i 457.7 | $ | i 590.5 | $ | i 1,045.0 | $ | i 416.7 | $ | i 628.3 | |||||||
Intangible
assets not subject to amortization: | ||||||||||||||||||
Trade names | $ | i 103.6 | $ | i 103.6 | $ | i 96.2 | $ | i 96.2 | ||||||||||
FAA
air agency certificates | i 8.7 | i 8.7 | i 8.7 | i 8.7 | ||||||||||||||
$ | i 112.3 | $ | i 112.3 | $ | i 104.9 | $ | i 104.9 | |||||||||||
Total
intangible assets | $ | i 1,160.5 | $ | i 457.7 | $ | i 702.8 | $ | i 1,149.9 | $ | i 416.7 | $ | i 733.2 |
Three Months Ended | Nine Months Ended | |||||
Operating lease expense | $ | i 9.0 | $ | i 27.7 | ||
Amortization
of right-of-use assets on finance leases | i 0.3 | i 0.9 | ||||
Total
lease expense | $ | i 9.3 | $ | i 28.6 |
Operating Leases | |||
Lease assets: | |||
Operating lease assets | $ | i 115.0 | |
Lease
liabilities: | |||
Short-term operating lease liabilities | $ | i 28.0 | |
Long-term operating lease liabilities | i 72.3 | ||
Total
operating lease liabilities | $ | i 100.3 |
Finance Leases | |||
Lease assets: | |||
Property, plant and equipment, net | $ | i 3.6 | |
Lease liabilities: | |||
Current
portion of long-term debt | $ | i 0.3 | |
Long-term debt | i 2.5 | ||
Total
finance lease liabilities | $ | i 2.8 |
Operating Leases | Finance Leases | |||||
Year Ending December 31, | ||||||
2019 | $ | i 8.5 | $ | i 0.3 | ||
2020 | i 29.3 | i 0.9 | ||||
2021 | i 20.5 | i 0.9 | ||||
2022 | i 15.0 | i 0.7 | ||||
2023 | i 11.2 | i 0.2 | ||||
Thereafter | i 26.6 | i — | ||||
Total
future minimum lease payments | i 111.1 | i 3.0 | ||||
Less:
imputed interest | ( i 10.8 | ) | ( i 0.2 | ) | ||
Total | $ | i 100.3 | $ | i 2.8 |
Three Months Ended | Nine
Months Ended | |||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||||
Operating cash flows from operating leases | $ | i 9.1 | $ | i 26.8 | ||
Financing
cash flows from finance leases | i 0.2 | i 1.3 | ||||
Lease
assets added in the period: | ||||||
Operating leases | $ | i 14.6 | $ | i 54.0 | ||
Finance
leases | i 0.3 | i 1.1 |
Weighted-average remaining lease term: | ||
Operating leases | i 5.4 years | |
Finance leases | i 3.4
years | |
Weighted-average discount rate: | ||
Operating leases | i 3.90 | % |
Finance
leases | i 2.70 | % |
Variable-rate Accounts Receivable Facility with an interest rate of 3.09% at September 30, 2019 | $ | i 12.8 | $ | i — | ||
Borrowings
under variable-rate lines of credit for certain of the Company’s foreign subsidiaries with various banks with interest rates ranging from 0.23% to 2.28% at September 30, 2019 and 0.29% to 1.00% at December 31, 2018 | i 22.0 | i 33.6 | ||||
Short-term
debt | $ | i 34.8 | $ | i 33.6 |
Variable-rate Senior Credit Facility with
an average interest rate on U.S. Dollar of 3.26% and Euro of 1.00% at September 30, 2019 and 3.40% and 1.10%, respectively, at December 31, 2018 | $ | i 69.3 | $ | i 43.9 | ||
Variable-rate
Euro Term Loan(1), maturing on September 18, 2020, with an interest rate of 1.13% at September 30, 2019 and December 31, 2018 | i 52.8 | i 107.1 | ||||
Variable-rate
Accounts Receivable Facility, with an interest rate of 3.09% at September 30, 2019 and 3.22% at December 31, 2018 | i 87.2 | i 75.0 | ||||
Variable-rate
Term Loan(1), maturing on September 11, 2023, with an interest rate of 3.17% at September 30, 2019 and 3.77% at December 31, 2018 | i 340.7 | i 347.1 | ||||
Fixed-rate
Senior Unsecured Notes(1), maturing on September 1, 2024, with an interest rate of 3.875% | i 348.3 | i 347.7 | ||||
Fixed-rate
Euro Senior Unsecured Notes(1), maturing on September 7, 2027, with an interest rate of 2.02% | i 163.0 | i 171.4 | ||||
i 396.1 | i 395.8 | |||||
Fixed-rate
Medium-Term Notes, Series A(1), maturing at various dates through May 2028, with interest rates ranging from 6.74% to 7.76% | i 154.6 | i 154.6 | ||||
Other | i 3.3 | i 5.4 | ||||
i 1,615.3 | i 1,648.0 | |||||
Less:
Current maturities | i 61.8 | i 9.4 | ||||
Long-term
debt | $ | i 1,553.5 | $ | i 1,638.6 |
The
Timken Company Shareholders | |||||||||||||||||||||
Total | Stated Capital | Other Paid-In Capital | Earnings Invested in the Business | Accumulated Other Comprehensive (Loss) | Treasury Stock | Non controlling Interest | |||||||||||||||
Balance
at June 30, 2019 | $ | i 1,783.6 | $ | i 53.1 | $ | i 941.3 | $ | i 1,772.0 | $ | ( i 97.5 | ) | $ | ( i 957.6 | ) | $ | i 72.3 | |||||
Net
income | i 66.7 | i 64.2 | i 2.5 | ||||||||||||||||||
Foreign
currency translation adjustment | ( i 63.0 | ) | ( i 61.2 | ) | ( i 1.8 | ) | |||||||||||||||
Pension
and other postretirement liability adjustments (net of income tax expense of $25.4 million) | i 76.7 | i 76.7 | |||||||||||||||||||
Change
in fair value of derivative financial instruments, net of reclassifications | i 1.9 | i 1.9 | |||||||||||||||||||
Dividends
paid to noncontrolling interest | ( i 0.3 | ) | ( i 0.3 | ) | |||||||||||||||||
Dividends
– $0.28 per share | ( i 21.2 | ) | ( i 21.2 | ) | |||||||||||||||||
Stock-based
compensation expense | i 5.8 | i 5.8 | |||||||||||||||||||
Stock
purchased at fair market value | ( i 32.5 | ) | ( i 32.5 | ) | |||||||||||||||||
Stock
option exercise activity | i 1.0 | ( i 1.0 | ) | i 2.0 | |||||||||||||||||
Restricted
share activity | i — | ( i 0.6 | ) | i 0.6 | |||||||||||||||||
Payments
related to tax withholding for stock-based compensation | ( i 1.2 | ) | ( i 1.2 | ) | |||||||||||||||||
Balance
at September 30, 2019 | $ | i 1,817.5 | $ | i 53.1 | $ | i 945.5 | $ | i 1,815.0 | $ | ( i 80.1 | ) | $ | ( i 988.7 | ) | $ | i 72.7 |
The
Timken Company Shareholders | |||||||||||||||||||||
Total | Stated Capital | Other Paid-In Capital | Earnings Invested in the Business | Accumulated Other Comprehensive (Loss) | Treasury Stock | Non controlling Interest | |||||||||||||||
Balance
at December 31, 2018 | $ | i 1,642.7 | $ | i 53.1 | $ | i 951.9 | $ | i 1,630.2 | $ | ( i 95.3 | ) | $ | ( i 960.3 | ) | $ | i 63.1 | |||||
Net
income | i 256.9 | i 248.6 | i 8.3 | ||||||||||||||||||
Foreign
currency translation adjustment | ( i 62.1 | ) | ( i 61.9 | ) | ( i 0.2 | ) | |||||||||||||||
Pension
and other postretirement liability adjustments (net of income tax expense of $25.3 million) | i 76.6 | i 76.6 | |||||||||||||||||||
Change
in fair value of derivative financial instruments, net of reclassifications | i 0.5 | i 0.5 | |||||||||||||||||||
Dividends
paid to noncontrolling interest | ( i 0.3 | ) | ( i 0.3 | ) | |||||||||||||||||
Noncontrolling
interest acquired | i 1.8 | i 1.8 | |||||||||||||||||||
Dividends
– $0.84 per share | ( i 63.8 | ) | ( i 63.8 | ) | |||||||||||||||||
Stock-based
compensation expense | i 20.7 | i 20.7 | |||||||||||||||||||
Stock
purchased at fair market value | ( i 56.1 | ) | ( i 56.1 | ) | |||||||||||||||||
Stock
option exercise activity | i 9.9 | ( i 4.4 | ) | i 14.3 | |||||||||||||||||
Restricted
share activity | i — | ( i 22.7 | ) | i 22.7 | |||||||||||||||||
Payments
related to tax withholding for stock-based compensation | ( i 9.3 | ) | ( i 9.3 | ) | |||||||||||||||||
Balance
at September 30, 2019 | $ | i 1,817.5 | $ | i 53.1 | $ | i 945.5 | $ | i 1,815.0 | $ | ( i 80.1 | ) | $ | ( i 988.7 | ) | $ | i 72.7 |
The Timken Company Shareholders | |||||||||||||||||||||
Total | Stated Capital | Other Paid-In Capital | Earnings Invested in
the Business | Accumulated Other Comprehensive (Loss) | Treasury Stock | Non controlling Interest | |||||||||||||||
Balance at June 30, 2018 | $ | i 1,552.3 | $ | i 53.1 | $ | i 907.2 | $ | i 1,545.3 | $ | ( i 69.9 | ) | $ | ( i 913.9 | ) | $ | i 30.5 | |||||
Net
income | i 72.3 | i 71.6 | i 0.7 | ||||||||||||||||||
Foreign
currency translation adjustment | ( i 24.3 | ) | ( i 18.5 | ) | ( i 5.8 | ) | |||||||||||||||
Change
in fair value of derivative financial instruments, net of reclassifications | ( i 0.4 | ) | ( i 0.4 | ) | |||||||||||||||||
Shares
issued for the acquisition of ABC Bearings | i 66.0 | i 30.9 | i 35.1 | ||||||||||||||||||
Dividends
– $0.28 per share | ( i 21.5 | ) | ( i 21.5 | ) | |||||||||||||||||
Stock-based
compensation expense | i 7.7 | i 7.7 | |||||||||||||||||||
Stock
purchased at fair market value | ( i 13.4 | ) | ( i 13.4 | ) | |||||||||||||||||
Stock
option exercise activity | i 2.1 | ( i 0.6 | ) | i 2.7 | |||||||||||||||||
Restricted
share activity | i — | ( i 0.1 | ) | i 0.1 | |||||||||||||||||
Payments
related to tax withholding for stock-based compensation | ( i 0.4 | ) | ( i 0.4 | ) | |||||||||||||||||
Balance
at September 30, 2018 | $ | i 1,640.4 | $ | i 53.1 | $ | i 945.1 | $ | i 1,595.4 | $ | ( i 88.8 | ) | $ | ( i 924.9 | ) | $ | i 60.5 |
The
Timken Company Shareholders | |||||||||||||||||||||
Total | Stated Capital | Other Paid-In Capital | Earnings Invested in the Business | Accumulated Other Comprehensive (Loss) | Treasury Stock | Non controlling Interest | |||||||||||||||
Balance
at December 31, 2017 | $ | i 1,474.9 | $ | i 53.1 | $ | i 903.8 | $ | i 1,408.4 | $ | ( i 38.3 | ) | $ | ( i 884.3 | ) | $ | i 32.2 | |||||
Cumulative
effect of the new revenue standard (net of income tax benefit of $2.6 million)(1) | i 7.7 | — | i 7.7 | ||||||||||||||||||
Cumulative
effect of ASU 2018-02 | i — | i 0.7 | ( i 0.7 | ) | |||||||||||||||||
Net
income | i 244.7 | i 242.8 | i 1.9 | ||||||||||||||||||
Foreign
currency translation adjustment | ( i 62.5 | ) | ( i 53.8 | ) | ( i 8.7 | ) | |||||||||||||||
Change
in fair value of derivative financial instruments, net of reclassifications | i 4.0 | i 4.0 | |||||||||||||||||||
Shares
issued for the acquisition of ABC Bearings | i 66.0 | i 30.9 | i 35.1 | ||||||||||||||||||
Dividends
– $0.83 per share | ( i 64.2 | ) | ( i 64.2 | ) | |||||||||||||||||
Stock-based
compensation expense | i 25.5 | i 25.5 | |||||||||||||||||||
Stock
purchased at fair market value | ( i 63.0 | ) | ( i 63.0 | ) | |||||||||||||||||
Stock
option exercise activity | i 12.7 | ( i 3.7 | ) | i 16.4 | |||||||||||||||||
Restricted
share activity | i — | ( i 11.4 | ) | i 11.4 | |||||||||||||||||
Payments
related to tax withholding for stock-based compensation | ( i 5.4 | ) | ( i 5.4 | ) | |||||||||||||||||
Balance
at September 30, 2018 | $ | i 1,640.4 | $ | i 53.1 | $ | i 945.1 | $ | i 1,595.4 | $ | ( i 88.8 | ) | $ | ( i 924.9 | ) | $ | i 60.5 |
Foreign currency translation adjustments | Pension
and other postretirement liability adjustments | Change in fair value of derivative financial instruments | Total | |||||||||
Balance at June 30, 2019 | $ | ( i 96.3 | ) | $ | ( i 0.1 | ) | $ | ( i 1.1 | ) | $ | ( i 97.5 | ) |
Other
comprehensive income (loss) before reclassifications and income taxes | ( i 63.0 | ) | i 103.7 | i 3.2 | i 43.9 | |||||||
Amounts
reclassified from accumulated other comprehensive (loss) income before income taxes | i — | ( i 1.6 | ) | ( i 1.0 | ) | ( i 2.6 | ) | |||||
Income
tax expense | i — | ( i 25.4 | ) | ( i 0.3 | ) | ( i 25.7 | ) | |||||
Net
current period other comprehensive income (loss), net of income taxes | ( i 63.0 | ) | i 76.7 | i 1.9 | i 15.6 | |||||||
Noncontrolling
interest | i 1.8 | i — | i — | i 1.8 | ||||||||
Net
current period comprehensive (loss) income, net of income taxes and noncontrolling interest | ( i 61.2 | ) | i 76.7 | i 1.9 | i 17.4 | |||||||
Balance
at September 30, 2019 | $ | ( i 157.5 | ) | $ | i 76.6 | $ | i 0.8 | $ | ( i 80.1 | ) |
Foreign
currency translation adjustments | Pension and other postretirement liability adjustments | Change in fair value of derivative financial instruments | Total | |||||||||
Balance at December 31, 2018 | $ | ( i 95.6 | ) | $ | i — | $ | i 0.3 | $ | ( i 95.3 | ) | ||
Other
comprehensive income (loss) before reclassifications and income tax | ( i 62.1 | ) | i 103.7 | i 3.4 | i 45.0 | |||||||
Amounts
reclassified from accumulated other comprehensive (loss) income before income taxes | i — | ( i 1.8 | ) | ( i 2.9 | ) | ( i 4.7 | ) | |||||
Income
tax expense | i — | ( i 25.3 | ) | i — | ( i 25.3 | ) | ||||||
Net
current period other comprehensive income (loss), net of income taxes | ( i 62.1 | ) | i 76.6 | i 0.5 | i 15.0 | |||||||
Noncontrolling
interest | i 0.2 | i — | i — | i 0.2 | ||||||||
Net
current period comprehensive (loss) income, net of income taxes and noncontrolling interest | ( i 61.9 | ) | i 76.6 | i 0.5 | i 15.2 | |||||||
Balance
at September 30, 2019 | $ | ( i 157.5 | ) | $ | i 76.6 | $ | i 0.8 | $ | ( i 80.1 | ) |
Foreign currency translation adjustments | Pension and other postretirement liability adjustments | Change in fair value of derivative financial instruments | Total | |||||||||
Balance
at June 30, 2018 | $ | ( i 70.4 | ) | $ | ( i 0.4 | ) | $ | i 0.9 | $ | ( i 69.9 | ) | |
Other
comprehensive (loss) income before reclassifications and income taxes | ( i 24.3 | ) | i — | i 1.0 | ( i 23.3 | ) | ||||||
Amounts
reclassified from accumulated other comprehensive (loss) income before income taxes | i — | i — | ( i 1.5 | ) | ( i 1.5 | ) | ||||||
Income
tax benefit | i — | i — | i 0.1 | i 0.1 | ||||||||
Net
current period other comprehensive loss, net of income taxes | ( i 24.3 | ) | i — | ( i 0.4 | ) | ( i 24.7 | ) | |||||
Noncontrolling
interest | i 5.8 | i — | i — | i 5.8 | ||||||||
Net
current period comprehensive loss, net of income taxes and noncontrolling interest | ( i 18.5 | ) | i — | ( i 0.4 | ) | ( i 18.9 | ) | |||||
Balance
at September 30, 2018 | $ | ( i 88.9 | ) | $ | ( i 0.4 | ) | $ | i 0.5 | $ | ( i 88.8 | ) |
Foreign
currency translation adjustments | Pension and other postretirement liability adjustments | Change in fair value of derivative financial instruments | Total | |||||||||
Balance at December 31, 2017 | $ | ( i 35.1 | ) | $ | ( i 0.3 | ) | $ | ( i 2.9 | ) | $ | ( i 38.3 | ) |
Cumulative
effect of ASU 2018-02 | i — | ( i 0.1 | ) | ( i 0.6 | ) | ( i 0.7 | ) | |||||
Balance
at January 1, 2018 | ( i 35.1 | ) | ( i 0.4 | ) | ( i 3.5 | ) | ( i 39.0 | ) | ||||
Other
comprehensive (loss) income before reclassifications and income taxes | ( i 62.5 | ) | i — | i 5.0 | ( i 57.5 | ) | ||||||
Amounts
reclassified from accumulated other comprehensive (loss) income before income taxes | i — | i — | i 0.3 | i 0.3 | ||||||||
Income
tax expense | i — | i — | ( i 1.3 | ) | ( i 1.3 | ) | ||||||
Net
current period other comprehensive (loss) income, net of income taxes | ( i 62.5 | ) | i — | i 4.0 | ( i 58.5 | ) | ||||||
Noncontrolling
interest | i 8.7 | i — | i — | i 8.7 | ||||||||
Net
current period comprehensive (loss) income, net of income taxes and noncontrolling interest | ( i 53.8 | ) | ( i 0.1 | ) | i 3.4 | ( i 50.5 | ) | |||||
Balance
at September 30, 2018 | $ | ( i 88.9 | ) | $ | ( i 0.4 | ) | $ | i 0.5 | $ | ( i 88.8 | ) |
Three
Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||
Numerator: | ||||||||||||
Net
income attributable to The Timken Company | $ | i 64.2 | $ | i 71.6 | $ | i 248.6 | $ | i 242.8 | ||||
Less:
undistributed earnings allocated to nonvested stock | i — | i — | i — | i — | ||||||||
Net
income available to common shareholders for basic and diluted earnings per share | $ | i 64.2 | $ | i 71.6 | $ | i 248.6 | $ | i 242.8 | ||||
Denominator: | ||||||||||||
Weighted
average number of shares outstanding - basic | i 75,628,410 | i 76,903,395 | i 75,864,544 | i 77,332,209 | ||||||||
Effect
of dilutive securities: | ||||||||||||
Stock options and awards - based on the treasury stock method | i 964,284 | i 1,524,710 | i 1,037,882 | i 1,313,294 | ||||||||
Weighted
average number of shares outstanding assuming dilution of stock options and awards | i 76,592,694 | i 78,428,105 | i 76,902,426 | i 78,645,503 | ||||||||
Basic
earnings per share | $ | i 0.85 | $ | i 0.93 | $ | i 3.28 | $ | i 3.14 | ||||
Diluted
earnings per share | $ | i 0.84 | $ | i 0.91 | $ | i 3.23 | $ | i 3.09 |
Three
Months Ended | Three Months Ended | |||||||||||||||||
Mobile | Process | Total | Mobile | Process | Total | |||||||||||||
United
States | $ | i 245.8 | $ | i 196.0 | $ | i 441.8 | $ | i 255.3 | $ | i 192.9 | $ | i 448.2 | ||||||
Americas
excluding United States | i 54.7 | i 41.1 | i 95.8 | i 51.6 | i 42.9 | i 94.5 | ||||||||||||
Europe
/ Middle East / Africa | i 85.3 | i 120.2 | i 205.5 | i 89.3 | i 86.0 | i 175.3 | ||||||||||||
Asia-Pacific | i 69.3 | i 101.6 | i 170.9 | i 68.0 | i 95.3 | i 163.3 | ||||||||||||
Net
sales | $ | i 455.1 | $ | i 458.9 | $ | i 914.0 | $ | i 464.2 | $ | i 417.1 | $ | i 881.3 |
Nine
Months Ended | Nine Months Ended | |||||||||||||||||
Mobile | Process | Total | Mobile | Process | Total | |||||||||||||
United
States | $ | i 778.1 | $ | i 632.6 | $ | i 1,410.7 | $ | i 774.4 | $ | i 561.5 | $ | i 1,335.9 | ||||||
Americas
excluding United States | i 160.4 | i 125.5 | i 285.9 | i 160.3 | i 132.0 | i 292.3 | ||||||||||||
Europe
/ Middle East / Africa | i 288.2 | i 374.3 | i 662.5 | i 292.5 | i 266.4 | i 558.9 | ||||||||||||
Asia-Pacific | i 222.1 | i 312.5 | i 534.6 | i 214.6 | i 269.0 | i 483.6 | ||||||||||||
Net
sales | $ | i 1,448.8 | $ | i 1,444.9 | $ | i 2,893.7 | $ | i 1,441.8 | $ | i 1,228.9 | $ | i 2,670.7 |
Nine
Months Ended | Nine Months Ended | |
Revenue by sales channel | ||
Original equipment manufacturers | i 56% | i 58% |
Distribution/end
users | i 44% | i 42% |
Beginning balance, January 1 | $ | i 116.6 | |
Additional unbilled revenue recognized | i 320.0 | ||
Less:
amounts billed to customers | ( i 285.0 | ) | |
Ending balance | $ | i 151.6 |
Three
Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||
Net sales: | ||||||||||||
Mobile
Industries | $ | i 455.1 | $ | i 464.2 | $ | i 1,448.8 | $ | i 1,441.8 | ||||
Process
Industries | i 458.9 | i 417.1 | i 1,444.9 | i 1,228.9 | ||||||||
Net
sales | $ | i 914.0 | $ | i 881.3 | $ | i 2,893.7 | $ | i 2,670.7 | ||||
Segment
EBIT: | ||||||||||||
Mobile Industries | $ | i 52.0 | $ | i 50.6 | $ | i 172.5 | $ | i 156.2 | ||||
Process
Industries | i 95.6 | i 81.8 | i 304.8 | i 254.0 | ||||||||
Total
EBIT, for reportable segments | $ | i 147.6 | $ | i 132.4 | $ | i 477.3 | $ | i 410.2 | ||||
Corporate
expenses | ( i 11.4 | ) | ( i 17.9 | ) | ( i 41.1 | ) | ( i 47.2 | ) | ||||
Corporate
pension and other postretirement benefit related charges | ( i 16.9 | ) | ( i 5.3 | ) | ( i 16.9 | ) | ( i 3.1 | ) | ||||
Interest
expense | ( i 18.2 | ) | ( i 12.5 | ) | ( i 55.5 | ) | ( i 33.2 | ) | ||||
Interest
income | i 1.1 | i 0.6 | i 3.5 | i 1.5 | ||||||||
Income
before income taxes | $ | i 102.2 | $ | i 97.3 | $ | i 367.3 | $ | i 328.2 |
U.S.
Plans | International Plans | Total | ||||||||||||||||
Three Months Ended September 30, | Three Months Ended September 30, | Three Months Ended September 30, | ||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | |||||||||||||
Components
of net periodic benefit cost: | ||||||||||||||||||
Service cost | $ | i 2.6 | $ | i 3.3 | $ | i 0.4 | $ | i 0.4 | $ | i 3.0 | $ | i 3.7 | ||||||
Interest
cost | i 5.7 | i 6.0 | i 1.8 | i 1.8 | i 7.5 | i 7.8 | ||||||||||||
Expected
return on plan assets | ( i 6.4 | ) | ( i 7.6 | ) | ( i 2.4 | ) | ( i 2.9 | ) | ( i 8.8 | ) | ( i 10.5 | ) | ||||||
Amortization
of prior service cost | i 0.4 | i 0.4 | i — | i 0.1 | i 0.4 | i 0.5 | ||||||||||||
Recognition
of actuarial losses | i 7.0 | i 4.8 | i — | i — | i 7.0 | i 4.8 | ||||||||||||
Net
periodic benefit cost | $ | i 9.3 | $ | i 6.9 | $ | ( i 0.2 | ) | $ | ( i 0.6 | ) | $ | i 9.1 | $ | i 6.3 |
U.S.
Plans | International Plans | Total | ||||||||||||||||
Nine Months Ended September 30, | Nine Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | |||||||||||||
Components
of net periodic benefit cost: | ||||||||||||||||||
Service cost | $ | i 7.8 | $ | i 9.7 | $ | i 1.2 | $ | i 1.2 | $ | i 9.0 | $ | i 10.9 | ||||||
Interest
cost | i 17.7 | i 17.7 | i 5.5 | i 5.5 | i 23.2 | i 23.2 | ||||||||||||
Expected
return on plan assets | ( i 19.2 | ) | ( i 22.2 | ) | ( i 7.6 | ) | ( i 8.8 | ) | ( i 26.8 | ) | ( i 31.0 | ) | ||||||
Amortization
of prior service cost | i 1.2 | i 1.2 | i 0.1 | i 0.1 | i 1.3 | i 1.3 | ||||||||||||
Recognition
of actuarial losses | i 7.0 | i 2.4 | i — | i — | i 7.0 | i 2.4 | ||||||||||||
Net
periodic benefit cost | $ | i 14.5 | $ | i 8.8 | $ | ( i 0.8 | ) | $ | ( i 2.0 | ) | $ | i 13.7 | $ | i 6.8 |
Three
Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||
Components of net periodic benefit cost: | ||||||||||||
Service
cost | $ | i — | $ | i — | $ | i 0.1 | $ | i 0.1 | ||||
Interest
cost | i 1.2 | i 1.9 | i 5.0 | i 5.6 | ||||||||
Expected
return on plan assets | ( i 0.8 | ) | ( i 0.9 | ) | ( i 2.4 | ) | ( i 2.8 | ) | ||||
Amortization
of prior service credit | ( i 2.0 | ) | ( i 0.4 | ) | ( i 3.1 | ) | ( i 1.2 | ) | ||||
Recognition
of net actuarial losses | i 9.9 | i — | i 9.9 | i — | ||||||||
Net
periodic benefit cost | $ | i 8.3 | $ | i 0.6 | $ | i 9.5 | $ | i 1.7 |
Three
Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||
Provision for income taxes | $ | i 35.5 | $ | i 25.0 | $ | i 110.4 | $ | i 83.5 | ||||
Effective
tax rate | i 34.7 | % | i 25.7 | % | i 30.1 | % | i 25.4 | % |
Total | Level
1 | Level 2 | Level 3 | |||||||||
Assets: | ||||||||||||
Cash and cash equivalents | $ | i 134.6 | $ | i 133.2 | $ | i 1.4 | $ | i — | ||||
Cash
and cash equivalents measured at net asset value | i 46.8 | |||||||||||
Restricted
cash | i 0.5 | i 0.5 | i — | i — | ||||||||
Short-term
investments | i 20.8 | i — | i 20.8 | i — | ||||||||
Short-term
investments measured at net asset value | i 0.1 | |||||||||||
Foreign
currency hedges | i 11.7 | i — | i 11.7 | i — | ||||||||
Total
Assets | $ | i 214.5 | $ | i 133.7 | $ | i 33.9 | $ | i — | ||||
Liabilities: | ||||||||||||
Foreign
currency hedges | $ | i 0.3 | $ | i — | $ | i 0.3 | $ | i — | ||||
Total
Liabilities | $ | i 0.3 | $ | i — | $ | i 0.3 | $ | i — |
Total | Level 1 | Level 2 | Level 3 | |||||||||
Assets: | ||||||||||||
Cash and cash equivalents | $ | i 105.9 | $ | i 104.4 | $ | i 1.5 | $ | i — | ||||
Cash
and cash equivalents measured at net asset value | i 26.6 | |||||||||||
Restricted
cash | i 0.6 | i 0.6 | i — | i — | ||||||||
Short-term
investments | i 21.8 | i — | i 21.8 | i — | ||||||||
Foreign
currency hedges | i 4.6 | i — | i 4.6 | i — | ||||||||
Total
Assets | $ | i 159.5 | $ | i 105.0 | $ | i 27.9 | $ | i — | ||||
Liabilities: | ||||||||||||
Foreign
currency hedges | $ | i 0.7 | $ | i — | $ | i 0.7 | $ | i — | ||||
Total
Liabilities | $ | i 0.7 | $ | i — | $ | i 0.7 | $ | i — |
Amount
of gain or (loss) recognized in income | |||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||
Derivatives not designated as hedging instruments: | Location of gain or (loss) recognized in income | 2019 | 2018 | 2019 | 2018 | ||||||||
Foreign
currency forward contracts | Other income (expense), net | $ | i 6.3 | $ | ( i 0.8 | ) | $ | i 9.0 | $ | i 6.4 |
• | Mobile
Industries serves OEM customers that manufacture off-highway equipment for the agricultural, mining and construction markets; on-highway vehicles including passenger cars, light trucks, and medium- and heavy-duty trucks; rail cars and locomotives; outdoor power equipment; rotorcraft and fixed-wing aircraft; and other mobile equipment. Beyond service parts sold to OEMs, aftermarket sales and services to individual end users, equipment owners, operators and maintenance shops are handled directly or through the Company's extensive network of authorized automotive and heavy-truck distributors. |
• | Process Industries serves
OEM and end-user customers in industries that place heavy demands on the fixed operating equipment they make or use in heavy and other general industrial sectors. This includes metals, cement and aggregate production; power generation and renewable energy sources; oil and gas extraction and refining; pulp and paper and food processing; automation and robotics; and health and critical motion control equipment. Other applications include marine equipment, gear drives, cranes, hoists and conveyors. This segment also supports aftermarket sales and service needs through its global network of authorized industrial distributors and through the provision of services directly to end users. |
• | On September 16, 2019, the Company announced it had reached an agreement to acquire BEKA, a leading global supplier of automatic lubrication systems, for approximately $165 million. With expected 2019 annual sales of approximately $135 million, BEKA serves a diverse range of industrial sectors, including wind, food and beverage, rail,
on- and off-highway and other process industries. Headquartered in Pegnitz, Germany, BEKA has manufacturing and research and development based in Germany, and assembly facilities and sales offices around the world. This transaction is subject to customary closing conditions and is expected to close during the fourth quarter of this year. |
Three
Months Ended September 30, | |||||||||||
2019 | 2018 | $ Change | % Change | ||||||||
Net sales | $ | 914.0 | $ | 881.3 | $ | 32.7 | 3.7 | % | |||
Net
income | 66.7 | 72.3 | (5.6 | ) | (7.7 | )% | |||||
Net income attributable to noncontrolling interest | 2.5 | 0.7 | 1.8 | 257.1 | % | ||||||
Net
income attributable to The Timken Company | $ | 64.2 | $ | 71.6 | $ | (7.4 | ) | (10.3 | )% | ||
Diluted earnings per share | $ | 0.84 | $ | 0.91 | $ | (0.07 | ) | (7.7 | )% | ||
Average
number of shares – diluted | 76,592,694 | 78,428,105 | — | (2.3 | )% |
Nine
Months Ended September 30, | |||||||||||
2019 | 2018 | $ Change | % Change | ||||||||
Net sales | $ | 2,893.7 | $ | 2,670.7 | $ | 223.0 | 8.3 | % | |||
Net
income | 256.9 | 244.7 | 12.2 | 5.0 | % | ||||||
Net income attributable to noncontrolling interest | 8.3 | 1.9 | 6.4 | 336.8 | % | ||||||
Net
income attributable to The Timken Company | $ | 248.6 | $ | 242.8 | $ | 5.8 | 2.4 | % | |||
Diluted earnings per share | $ | 3.23 | $ | 3.09 | $ | 0.14 | 4.5 | % | |||
Average
number of shares – diluted | 76,902,426 | 78,645,503 | — | (2.2 | )% |
Three Months Ended September 30, | |||||||||||
2019 | 2018 | $ Change | % Change | ||||||||
Net
Sales | $ | 914.0 | $ | 881.3 | $ | 32.7 | 3.7 | % |
Nine
Months Ended September 30, | |||||||||||
2019 | 2018 | $ Change | % Change | ||||||||
Net Sales | $ | 2,893.7 | $ | 2,670.7 | $ | 223.0 | 8.3 | % |
Three
Months Ended September 30, | |||||||||||
2019 | 2018 | $ Change | Change | ||||||||
Gross profit | $ | 277.5 | $ | 253.3 | $ | 24.2 | 9.6 | % | |||
Gross
profit % to net sales | 30.4 | % | 28.7 | % | 170 | bps |
Nine
Months Ended September 30, | |||||||||||
2019 | 2018 | $ Change | Change | ||||||||
Gross profit | $ | 885.8 | $ | 785.6 | $ | 100.2 | 12.8 | % | |||
Gross
profit % to net sales | 30.6 | % | 29.4 | % | 120 | bps |
Three Months Ended September 30, | |||||||||||
2019 | 2018 | $ Change | Change | ||||||||
Selling,
general and administrative expenses | $ | 148.0 | $ | 142.0 | $ | 6.0 | 4.2 | % | |||
Selling, general and administrative expenses % to net sales | 16.2 | % | 16.1 | % | 10 | bps |
Nine
Months Ended September 30, | |||||||||||
2019 | 2018 | $ Change | Change | ||||||||
Selling, general and administrative expenses | $ | 459.4 | $ | 432.4 | $ | 27.0 | 6.2 | % | |||
Selling,
general and administrative expenses % to net sales | 15.9 | % | 16.2 | % | — | (30 | ) bps |
Three Months Ended September 30, | |||||||||||
2019 | 2018 | $ Change | % Change | ||||||||
Interest expense | $ | (18.2 | ) | $ | (12.5 | ) | $ | (5.7 | ) | 45.6 | % |
Interest
income | $ | 1.1 | $ | 0.6 | $ | 0.5 | 83.3 | % |
Nine
Months Ended September 30, | |||||||||||
2019 | 2018 | $ Change | % Change | ||||||||
Interest (expense) | $ | (55.5 | ) | $ | (33.2 | ) | $ | (22.3 | ) | 67.2 | % |
Interest
income | $ | 3.5 | $ | 1.5 | $ | 2.0 | 133.3 | % |
Three
Months Ended September 30, | |||||||||||
2019 | 2018 | $ Change | % Change | ||||||||
Non-service pension and other postretirement expense | $ | (14.4 | ) | $ | (3.2 | ) | $ | (11.2 | ) | 350.0 | % |
Other
income, net | 5.8 | 3.7 | 2.1 | 56.8 | % | ||||||
Total other (expense) income, net | $ | (8.6 | ) | $ | 0.5 | $ | (9.1 | ) | NM |
Nine
Months Ended September 30, | |||||||||||
2019 | 2018 | $ Change | % Change | ||||||||
Non-service pension and other postretirement (expense) income | $ | (14.1 | ) | $ | 2.5 | $ | (16.6 | ) | (664.0 | )% | |
Other
income, net | 10.5 | 7.3 | 3.2 | 43.8 | % | ||||||
Total other (expense) income, net | $ | (3.6 | ) | $ | 9.8 | $ | (13.4 | ) | (136.7 | )% |
Three Months Ended September 30, | |||||||||||
2019 | 2018 | $ Change | %
Change | ||||||||
Provision for income taxes | $ | 35.5 | $ | 25.0 | $ | 10.5 | 42.0 | % | |||
Effective tax rate | 34.7 | % | 25.7 | % | 900
bps |
Nine Months Ended September 30, | |||||||||||
2019 | 2018 | $ Change | Change | ||||||||
Provision
for income taxes | $ | 110.4 | $ | 83.5 | $ | 26.9 | 32.2 | % | |||
Effective tax rate | 30.1 | % | 25.4 | % | 470
bps |
• | The Company acquired Diamond Chain during the second quarter of 2019. Substantially all of the results for Diamond Chain are reported in the Process Industries segment. |
• | The
Company acquired Rollon, Cone Drive and ABC Bearings during the third quarter of 2018. Substantially all of the results for Cone Drive and Rollon are reported in the Process Industries segment. Substantially all of the results for ABC Bearings are reported in the Mobile Industries segment. |
• | The Company divested Groeneveld Information Technology Holding B.V. (the "ICT Business") on September 19, 2018. Results for the ICT Business were reported in the Mobile Industries segment. |
Three Months Ended September 30, | |||||||||||
2019 | 2018 | $ Change | Change | ||||||||
Net
sales | $ | 455.1 | $ | 464.2 | $ | (9.1 | ) | (2.0 | %) | ||
EBIT | $ | 52.0 | $ | 50.6 | $ | 1.4 | 2.8 | % | |||
EBIT
margin | 11.4 | % | 10.9 | % | 50 | bps |
Three
Months Ended September 30, | |||||||||||
2019 | 2018 | $ Change | % Change | ||||||||
Net sales | $ | 455.1 | $ | 464.2 | $ | (9.1 | ) | (2.0 | %) | ||
Less:
Acquisitions | 20.2 | — | 20.2 | NM | |||||||
Divestitures | (2.0 | ) | — | (2.0 | ) | NM | |||||
Currency | (5.2 | ) | — | (5.2 | ) | NM | |||||
Net
sales, excluding the impact of acquisitions, divestitures and currency | $ | 442.1 | $ | 464.2 | $ | (22.1 | ) | (4.8 | %) |
Nine
Months Ended September 30, | |||||||||||
2019 | 2018 | $ Change | % Change | ||||||||
Net sales | $ | 1,448.8 | $ | 1,441.8 | $ | 7.0 | 0.5 | % | |||
EBIT | $ | 172.5 | $ | 156.2 | $ | 16.3 | 10.4 | % | |||
EBIT
margin | 11.9 | % | 10.8 | % | — | 110 | bps |
Nine
Months Ended September 30, | |||||||||||
2019 | 2018 | $ Change | % Change | ||||||||
Net sales | $ | 1,448.8 | $ | 1,441.8 | $ | 7.0 | 0.5 | % | |||
Less:
Acquisitions | 67.0 | — | 67.0 | NM | |||||||
Divestitures | (8.5 | ) | — | (8.5 | ) | NM | |||||
Currency | (32.7 | ) | — | (32.7 | ) | NM | |||||
Net
sales, excluding the impact of acquisitions, divestitures and currency | $ | 1,423.0 | $ | 1,441.8 | $ | (18.8 | ) | (1.3 | %) |
Three Months Ended September 30, | |||||||||||
2019 | 2018 | $ Change | Change | ||||||||
Net
sales | $ | 458.9 | $ | 417.1 | $ | 41.8 | 10.0 | % | |||
EBIT | $ | 95.6 | $ | 81.8 | $ | 13.8 | 16.9 | % | |||
EBIT
margin | 20.8 | % | 19.6 | % | 120 bps |
Three
Months Ended September 30, | |||||||||||
2019 | 2018 | $ Change | % Change | ||||||||
Net sales | $ | 458.9 | $ | 417.1 | $ | 41.8 | 10.0 | % | |||
Less:
Acquisitions | 52.1 | — | 52.1 | NM | |||||||
Currency | (6.5 | ) | — | (6.5 | ) | NM | |||||
Net
sales, excluding the impact of acquisitions and currency | $ | 413.3 | $ | 417.1 | $ | (3.8 | ) | (0.9 | )% |
Nine Months Ended September 30, | |||||||||||
2019 | 2018 | $ Change | Change | ||||||||
Net
sales | $ | 1,444.9 | $ | 1,228.9 | $ | 216.0 | 17.6 | % | |||
EBIT | $ | 304.8 | $ | 254.0 | $ | 50.8 | 20.0 | % | |||
EBIT
margin | 21.1 | % | 20.7 | % | 40 | bps |
Nine
Months Ended September 30, | |||||||||||
2019 | 2018 | $ Change | % Change | ||||||||
Net sales | $ | 1,444.9 | $ | 1,228.9 | $ | 216.0 | 17.6 | % | |||
Less:
Acquisitions | 181.0 | — | 181.0 | NM | |||||||
Currency | (32.0 | ) | — | (32.0 | ) | NM | |||||
Net
sales, excluding the impact of acquisitions and currency | $ | 1,295.9 | $ | 1,228.9 | $ | 67.0 | 5.5 | % |
Three Months Ended September 30, | ||||||||||
2019 | 2018 | $ Change | Change | |||||||
Corporate
expenses | $ | 11.4 | $ | 17.9 | $ | (6.5 | ) | (36.3%) | ||
Corporate expenses % to net sales | 1.2 | % | 2.0 | % | (80)
bps |
Nine Months Ended September 30, | ||||||||||
2019 | 2018 | $ Change | Change | |||||||
Corporate
expenses | $ | 41.1 | $ | 47.2 | $ | (6.1 | ) | (12.9%) | ||
Corporate expenses % to net sales | 1.4 | % | 1.8 | % | (40)
bps |
$ Change | % Change | ||||||||||
Cash and cash equivalents | $ | 181.4 | $ | 132.5 | $ | 48.9 | 36.9 | % | |||
Restricted
cash | 0.5 | 0.6 | (0.1 | ) | (16.7 | )% | |||||
Accounts receivable, net | 548.3 | 546.6 | 1.7 | 0.3 | % | ||||||
Unbilled
receivables | 151.6 | 116.6 | 35.0 | 30.0 | % | ||||||
Inventories, net | 805.3 | 835.7 | (30.4 | ) | (3.6 | )% | |||||
Deferred
charges and prepaid expenses | 30.1 | 28.2 | 1.9 | 6.7 | % | ||||||
Other current assets | 90.2 | 77.0 | 13.2 | 17.1 | % | ||||||
Total
current assets | $ | 1,807.4 | $ | 1,737.2 | $ | 70.2 | 4.0 | % |
$ Change | % Change | ||||||||||
Property, plant and equipment, net | $ | 906.8 | $ | 912.1 | $ | (5.3 | ) | (0.6 | )% |
$ Change | % Change | |||||||||
Operating lease assets | $ | 115.0 | $ | — | $ | 115.0 | NM |
$ Change | % Change | ||||||||||
Goodwill | $ | 954.7 | $ | 960.5 | $ | (5.8 | ) | (0.6 | )% | ||
Other
intangible assets | 702.8 | 733.2 | (30.4 | ) | (4.1 | )% | |||||
Non-current pension assets | 11.8 | 6.2 | 5.6 | 90.3 | % | ||||||
Non-current
other postretirement benefit assets | 23.5 | — | 23.5 | NM | |||||||
Deferred income taxes | 27.3 | 59.0 | (31.7 | ) | (53.7 | )% | |||||
Other
non-current assets | 16.0 | 37.0 | (21.0 | ) | (56.8 | )% | |||||
Total other assets | $ | 1,736.1 | $ | 1,795.9 | $ | (59.8 | ) | (3.3 | )% |
$ Change | % Change | ||||||||||
Short-term debt | $ | 34.8 | $ | 33.6 | $ | 1.2 | 3.6 | % | |||
Current
portion of long-term debt | 61.8 | 9.4 | 52.4 | 557.4 | % | ||||||
Short-term operating lease liabilities | 28.0 | — | 28.0 | NM | |||||||
Accounts
payable | 265.2 | 273.2 | (8.0 | ) | (2.9 | )% | |||||
Salaries, wages and benefits | 116.9 | 174.9 | (58.0 | ) | (33.2 | )% | |||||
Income
taxes payable | 23.2 | 23.5 | (0.3 | ) | (1.3 | )% | |||||
Other current liabilities | 174.7 | 171.0 | 3.7 | 2.2 | % | ||||||
Total
current liabilities | $ | 704.6 | $ | 685.6 | $ | 19.0 | 2.8 | % |
$ Change | % Change | ||||||||||
Long-term debt | $ | 1,553.5 | $ | 1,638.6 | $ | (85.1 | ) | (5.2 | )% | ||
Accrued
pension benefits | 167.8 | 161.3 | 6.5 | 4.0 | % | ||||||
Accrued postretirement benefits | 36.9 | 108.7 | (71.8 | ) | (66.1 | )% | |||||
Long-term
operating lease liabilities | 72.3 | — | 72.3 | NM | |||||||
Deferred income taxes | 131.7 | 138.0 | (6.3 | ) | (4.6 | )% | |||||
Other
non-current liabilities | 81.0 | 70.3 | 10.7 | 15.2 | % | ||||||
Total non-current liabilities | $ | 2,043.2 | $ | 2,116.9 | $ | (73.7 | ) | (3.5 | )% |
$ Change | % Change | ||||||||||
Common shares | $ | 998.6 | $ | 1,005.0 | $ | (6.4 | ) | (0.6 | )% | ||
Earnings
invested in the business | 1,815.0 | 1,630.2 | 184.8 | 11.3 | % | ||||||
Accumulated other comprehensive loss | (80.1 | ) | (95.3 | ) | 15.2 | (15.9 | )% | ||||
Treasury
shares | (988.7 | ) | (960.3 | ) | (28.4 | ) | 3.0 | % | |||
Noncontrolling interest | 72.7 | 63.1 | 9.6 | 15.2 | % | ||||||
Total
shareholders’ equity | $ | 1,817.5 | $ | 1,642.7 | $ | 174.8 | 10.6 | % |
Nine
Months Ended September 30, | |||||||||
2019 | 2018 | $ Change | |||||||
Net cash provided by operating activities | $ | 354.8 | $ | 195.0 | $ | 159.8 | |||
Net
cash used in investing activities | (162.2 | ) | (810.3 | ) | 648.1 | ||||
Net cash (used in) provided by financing activities | (137.4 | ) | 657.3 | (794.7 | ) | ||||
Effect
of exchange rate changes on cash | (6.4 | ) | (12.4 | ) | 6.0 | ||||
Increase in cash, cash equivalents and restricted cash | $ | 48.8 | $ | 29.6 | $ | 19.2 |
Nine Months Ended September 30, | |||||||||
2019 | 2018 | $
Change | |||||||
Cash (Used) Provided: | |||||||||
Accounts receivable | $ | (6.4 | ) | $ | (65.7 | ) | $ | 59.3 | |
Unbilled
receivables | (35.0 | ) | (37.6 | ) | 2.6 | ||||
Inventories | 37.8 | (94.3 | ) | 132.1 | |||||
Trade
accounts payable | (7.4 | ) | (9.9 | ) | 2.5 | ||||
Other accrued expenses | (28.7 | ) | 10.2 | (38.9 | ) | ||||
Cash
used in working capital items | $ | (39.7 | ) | $ | (197.3 | ) | $ | 157.6 |
Nine Months Ended September 30, | |||||||||
2019 | 2018 | $ Change | |||||||
Accrued
income tax expense | $ | 110.4 | $ | 83.5 | $ | 26.9 | |||
Income tax payments | (97.5 | ) | (82.0 | ) | (15.5 | ) | |||
Other
miscellaneous items | (2.2 | ) | 0.2 | (2.4 | ) | ||||
Change in income taxes | $ | 10.7 | $ | 1.7 | $ | 9.0 |
Short-term debt | $ | 34.8 | $ | 33.6 | ||
Current portion of long-term debt | 61.8 | 9.4 | ||||
Long-term
debt | 1,553.5 | 1,638.6 | ||||
Total debt | $ | 1,650.1 | $ | 1,681.6 | ||
Less: Cash and cash equivalents | 181.4 | 132.5 | ||||
Restricted
cash | 0.5 | 0.6 | ||||
Net debt | $ | 1,468.2 | $ | 1,548.5 |
Net debt | $ | 1,468.2 | $ | 1,548.5 | ||
Total
equity | 1,817.5 | 1,642.7 | ||||
Net debt plus total equity (capital) | $ | 3,285.7 | $ | 3,191.2 | ||
Ratio of net debt to capital | 44.7 | % | 48.5 | % |
• | deterioration in world economic conditions, or in economic conditions in any of the geographic
regions in which the Company or its customers or suppliers conduct business, including adverse effects from a global economic slowdown, terrorism or hostilities. This includes: political risks associated with the potential instability of governments and legal systems in countries in which the Company or its customers or suppliers conduct business, changes in currency valuations and recent world events that have increased the risks posed by international trade disputes, tariffs and sanctions; |
• | the effects of fluctuations in customer demand on sales, product mix and prices in the
industries in which the Company operates. This includes: the ability of the Company to respond to rapid changes in customer demand, the effects of customer or supplier bankruptcies or liquidations, the impact of changes in industrial business cycles and whether conditions of fair trade continue in the Company's markets; |
• | competitive factors, including changes in market penetration, increasing price competition by existing or new foreign and domestic competitors, the introduction of new products
by existing and new competitors and new technology that may impact the way the Company’s products are sold or distributed; |
• | changes in operating costs. This includes: the effect of changes in the Company’s manufacturing processes; changes in costs associated with varying levels of operations and manufacturing capacity; availability and cost of raw materials and energy; changes in the expected costs associated with product warranty claims; changes resulting from inventory management and cost reduction initiatives; the effects of unplanned plant shutdowns; and changes in the cost
of labor and benefits; |
• | the success of the Company’s operating plans, announced programs, initiatives and capital investments; the ability to integrate acquired companies; and the ability of acquired companies to achieve satisfactory operating results, including results being accretive to earnings; |
• | the Company’s ability to maintain appropriate relations
with unions or works councils that represent Company associates in certain locations in order to avoid disruptions of business; |
• | unanticipated litigation, claims, investigations or assessments. This includes: claims or problems related to intellectual property, product liability or warranty, environmental issues and taxes; |
• | changes in worldwide financial and capital markets, including availability of financing and interest rates on satisfactory terms, which affect the
Company’s cost of funds and/or ability to raise capital, as well as customer demand and the ability of customers to obtain financing to purchase the Company’s products or equipment that contain the Company’s products; |
• | the Company's ability to satisfy its obligations under its debt agreements, as well as its ability to renew or refinance borrowings on favorable terms; |
• | the
impact on the Company's pension obligations and assets due to changes in interest rates, investment performance and other tactics designed to reduce risk; and |
• | those items identified under Item 1A. Risk Factors in the Company's Annual Report on Form 10-K for the year ended December 31, 2018. |
(a) | Disclosure Controls and Procedures |
(b) | Changes in Internal Control Over Financial Reporting |
Period | Total number of
shares purchased (1) | Average price paid per share (2) | Total number of shares purchased as part of publicly announced plans or programs | Maximum number
of shares that may yet be purchased under the plans or programs (3) | |||||
7/1/19 - 7/31/19 | 250,328 | $ | 48.54 | 250,000 | 6,010,710 | ||||
8/1/19
- 8/31/19 | 456,649 | 40.90 | 452,500 | 5,558,210 | |||||
9/1/19 - 9/30/19 | 47,500 | 39.85 | 47,500 | 5,510,710 | |||||
Total | 754,477 | $ | 43.37 | 750,000 |
(1) | Of
the shares purchased in July and August, 328 and 4,149, respectively, represent common shares of the Company that were owned and tendered by employees to exercise stock options and to satisfy withholding obligations in connection with the exercise of stock options or vesting of restricted shares. |
(2) | For shares tendered in connection with the vesting of restricted shares, the average price paid per share is an average calculated using the daily high and low of the Company's common shares as quoted on the New York Stock Exchange at the time of vesting. For shares tendered in connection
with the exercise of stock options, the price paid is the real-time trading stock price at the time the options are exercised. |
(3) | On February 6, 2017, the Company announced that its Board of Directors approved a share purchase plan pursuant to which the Company may purchase up to ten million of its common shares in the aggregate. This share repurchase plan expires on February 28, 2021. The Company
may purchase shares from time to time in open market purchases or privately negotiated transactions. The Company may make all or part of the purchases pursuant to accelerated share repurchases or Rule 10b5-1 plans. |
Certification
of Richard G. Kyle, President and Chief Executive Officer (principal executive officer) of The Timken Company, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
Certification of Philip D. Fracassa, Executive Vice President and Chief Financial Officer (principal financial officer) of The Timken Company, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
Certifications
of Richard G. Kyle, President and Chief Executive Officer (principal executive officer) and Philip D. Fracassa, Executive Vice President and Chief Financial Officer (principal financial officer) of The Timken Company, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
Financial statements from the quarterly report on Form 10-Q of The Timken Company for the quarter ended September 30, 2019, filed on October
31, 2019, formatted in Inline XBRL: (i) the Consolidated Statements of Income, (ii) the Consolidated Statements of Comprehensive Income, (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Cash Flows and (v) the Notes to the Consolidated Financial Statements. | |
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
THE TIMKEN COMPANY | ||
Date:
October 31, 2019 | By: /s/ Richard G. Kyle | |
President and Chief Executive Officer (Principal Executive Officer) | ||
Date:
October 31, 2019 | By: /s/ Philip D. Fracassa | |
Executive Vice President and Chief Financial Officer (Principal Financial Officer) |
This ‘10-Q’ Filing | Date | Other Filings | ||
---|---|---|---|---|
12/15/28 | ||||
9/7/27 | ||||
9/1/24 | ||||
6/25/24 | ||||
9/11/23 | ||||
11/30/21 | ||||
2/28/21 | ||||
9/18/20 | ||||
1/1/20 | ||||
12/31/19 | 10-K, SD | |||
12/15/19 | ||||
Filed on: | 10/31/19 | |||
For Period end: | 9/30/19 | |||
9/16/19 | ||||
7/12/19 | 8-K | |||
6/30/19 | 10-Q | |||
6/25/19 | 11-K, 8-K | |||
4/1/19 | 8-K | |||
3/31/19 | 10-Q | |||
1/1/19 | ||||
12/31/18 | 10-K, 5, SD | |||
12/15/18 | ||||
9/30/18 | 10-Q | |||
9/19/18 | ||||
9/18/18 | ||||
9/11/18 | ||||
9/6/18 | 8-K | |||
9/1/18 | ||||
8/30/18 | ||||
6/30/18 | 10-Q | |||
1/1/18 | ||||
12/31/17 | 10-K, 5, SD | |||
9/18/17 | ||||
9/7/17 | ||||
2/6/17 | ||||
6/19/15 | 8-K | |||
12/28/04 | ||||
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