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As Of Filer Filing For·On·As Docs:Size 11/01/23 Timken Co. 10-Q 9/30/23 103:11M |
Document/Exhibit Description Pages Size 1: 10-Q Quarterly Report HTML 1.94M 2: EX-31.1 Certification -- §302 - SOA'02 HTML 30K 3: EX-31.2 Certification -- §302 - SOA'02 HTML 30K 4: EX-32 Certification -- §906 - SOA'02 HTML 28K 10: R1 Cover HTML 77K 11: R2 Consolidated Statements of Income (Unaudited) HTML 107K 12: R3 Consolidated Statements of Comprehensive Income HTML 65K (Unaudited) 13: R4 Consolidated Balance Sheets HTML 172K 14: R5 Consolidated Balance Sheets (Parenthetical) HTML 42K 15: R6 Consolidated Statements of Cash Flows (Unaudited) HTML 135K 16: R7 Basis of Presentation HTML 30K 17: R8 Significant Accounting Policies HTML 32K 18: R9 Acquisitions and Divestitures HTML 97K 19: R10 Segment Information HTML 74K 20: R11 Revenue HTML 95K 21: R12 Income Taxes HTML 41K 22: R13 Earnings Per Share HTML 51K 23: R14 Inventories HTML 39K 24: R15 Goodwill and Other Intangible Assets HTML 74K 25: R16 Other Current Liabilities HTML 42K 26: R17 Financing Arrangements HTML 67K 27: R18 Supply Chain Financing HTML 34K 28: R19 Contingencies HTML 40K 29: R20 Equity HTML 144K 30: R21 Impairment and Restructuring Charges HTML 80K 31: R22 Retirement Benefit Plans HTML 81K 32: R23 Other Postretirement Benefit Plans HTML 48K 33: R24 Accumulated Other Comprehensive Income (Loss) HTML 103K 34: R25 Fair Value HTML 80K 35: R26 Derivatives Instruments and Hedging Activities HTML 45K 36: R27 Subsequent Events HTML 29K 37: R28 Pay vs Performance Disclosure HTML 38K 38: R29 Insider Trading Arrangements HTML 32K 39: R30 Significant Accounting Policies (Policies) HTML 30K 40: R31 Acquisitions and Divestitures (Tables) HTML 87K 41: R32 Segment Information (Tables) HTML 71K 42: R33 Revenue (Tables) HTML 91K 43: R34 Income Taxes (Tables) HTML 37K 44: R35 Earnings Per Share (Tables) HTML 50K 45: R36 Inventories (Tables) HTML 39K 46: R37 Goodwill and Other Intangible Assets (Tables) HTML 112K 47: R38 Other Current Liabilities (Tables) HTML 42K 48: R39 Financing Arrangements (Tables) HTML 65K 49: R40 Supply Chain Financing (Tables) HTML 32K 50: R41 Contingencies (Tables) HTML 35K 51: R42 Equity (Tables) HTML 139K 52: R43 Impairment and Restructuring Charges (Tables) HTML 72K 53: R44 Retirement Benefit Plans (Tables) HTML 77K 54: R45 Other Postretirement Benefit Plans (Tables) HTML 46K 55: R46 Accumulated Other Comprehensive Income (Loss) HTML 102K (Tables) 56: R47 Fair Value (Tables) HTML 72K 57: R48 Derivatives Instruments and Hedging Activities HTML 37K (Tables) 58: R49 Acquisitions and Divestitures - Acquisitions HTML 99K Narrative (Details) 59: R50 Acquisitions and Divestitures - Summary of ARB HTML 75K Assets and Liabilities (Details) 60: R51 Acquisitions and Divestitures - Purchase Price HTML 43K Allocation (Details) 61: R52 Acquisitions and Divestitures - Initial Purchase HTML 104K Price Allocation (Details) 62: R53 Acquisitions and Divestitures - Divestitures HTML 73K Narrative (Details) 63: R54 Segment Information (Details) HTML 75K 64: R55 Revenue - Disaggregation of Revenue (Details) HTML 72K 65: R56 Revenue - Narrative (Details) HTML 44K 66: R57 Revenue - Schedule of Contract with Customer, HTML 36K Asset and Liability (Details) 67: R58 Revenue - Schedule of Deferred Revenue (Details) HTML 32K 68: R59 Income Taxes - Schedule of Components of Income HTML 32K Tax Expense (Benefit) (Details) 69: R60 Income Taxes - Narrative (Details) HTML 28K 70: R61 Earnings Per Share - Denominator of Basic and HTML 64K Diluted Earnings Per Share (Details) 71: R62 Earnings Per Share - Narrative (Details) HTML 28K 72: R63 Inventories - Components of Inventories (Details) HTML 41K 73: R64 Inventories - Narrative (Details) HTML 31K 74: R65 Goodwill and Other Intangible Assets - Narrative HTML 53K (Details) 75: R66 Goodwill and Other Intangible Assets - Carrying HTML 44K Value of Goodwill (Details) 76: R67 Goodwill and Other Intangible Assets - Intangible HTML 64K Assets (Details) 77: R68 Other Current Liabilities (Details) HTML 54K 78: R69 Financing Arrangements - Schedule of Short-term HTML 39K Debt (Details) 79: R70 Financing Arrangements - Narrative (Details) HTML 85K 80: R71 Financing Arrangements - Schedule of Long-term HTML 82K Debt (Details) 81: R72 Financing Arrangements - Schedule of Maturities of HTML 47K Long-term Debt (Details) 82: R73 Supply Chain Financing (Details) HTML 36K 83: R74 Contingencies - Narrative (Details) HTML 32K 84: R75 Contingencies - Schedule of Product Warranty HTML 33K Liability (Details) 85: R76 Equity - Schedule of Stockholders Equity (Details) HTML 111K 86: R77 Equity - Narrative (Details) HTML 34K 87: R78 Impairment and Restructuring Charges - HTML 45K Restructuring Charges by Segment (Details) 88: R79 Impairment and Restructuring Charges - Narrative HTML 95K (Details) 89: R80 Impairment and Restructuring Charges - HTML 34K Consolidated Restructuring Accrual (Details) 90: R81 Retirement Benefit Plans - Components of Net HTML 57K Periodic Benefit Cost (Details) 91: R82 Retirement Benefit Plans - Narrative (Details) HTML 34K 92: R83 Other Postretirement Benefit Plans (Details) HTML 40K 93: R84 Accumulated Other Comprehensive Income (Loss) HTML 89K (Details) 94: R85 Fair Value - Fair Value on Recurring Basis HTML 70K (Details) 95: R86 Fair Value - Narrative (Details) HTML 48K 96: R87 Derivatives Instruments and Hedging Activities - HTML 56K Narrative (Details) 97: R88 Derivatives Instruments and Hedging Activities - HTML 29K Cash Flow Hedging Strategy (Details) 98: R89 Subsequent Events (Details) HTML 40K 101: XML IDEA XML File -- Filing Summary XML 188K 99: XML XBRL Instance -- tkr-20230930_htm XML 2.83M 100: EXCEL IDEA Workbook of Financial Report Info XLSX 181K 6: EX-101.CAL XBRL Calculations -- tkr-20230930_cal XML 274K 7: EX-101.DEF XBRL Definitions -- tkr-20230930_def XML 758K 8: EX-101.LAB XBRL Labels -- tkr-20230930_lab XML 2.07M 9: EX-101.PRE XBRL Presentations -- tkr-20230930_pre XML 1.29M 5: EX-101.SCH XBRL Schema -- tkr-20230930 XSD 194K 102: JSON XBRL Instance as JSON Data -- MetaLinks 609± 892K 103: ZIP XBRL Zipped Folder -- 0000098362-23-000135-xbrl Zip 844K
tkr-20230930 |
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, 2023 | |||||||||||||
Common Shares, without par value | i 70,551,394 shares |
PAGE | |||||||||||
I. | |||||||||||
Item 1. | |||||||||||
Item 2. | |||||||||||
Item 3. | |||||||||||
Item 4. | |||||||||||
II. | |||||||||||
Item 1. | |||||||||||
Item1A. | |||||||||||
Item 2. | |||||||||||
Item 5. | |||||||||||
Item 6. |
Three
Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
(Dollars in millions, except per share data) | |||||||||||||||||||||||
Net sales | $ | i 1,142.7 | $ | i 1,136.4 | $ | i 3,677.8 | $ | i 3,414.7 | |||||||||||||||
Cost of products sold | i 787.1 | i 802.9 | i 2,500.0 | i 2,390.5 | |||||||||||||||||||
Selling, general and administrative expenses | i 179.6 | i 159.8 | i 551.3 | i 469.8 | |||||||||||||||||||
Amortization of intangible assets | i 17.5 | i 10.7 | i 48.3 | i 32.2 | |||||||||||||||||||
Impairment and restructuring charges | i 8.9 | i 31.3 | i 40.3 | i 42.3 | |||||||||||||||||||
Operating Income | i 149.6 | i 131.7 | i 537.9 | i 479.9 | |||||||||||||||||||
Interest expense | ( i 27.5) | ( i 19.3) | ( i 79.9) | ( i 51.9) | |||||||||||||||||||
Interest income | i 2.6 | i 1.1 | i 6.0 | i 2.7 | |||||||||||||||||||
Non-service pension and other postretirement (expense) income | ( i 0.9) | i 1.3 | ( i 0.8) | ( i 5.3) | |||||||||||||||||||
Other income, net | i 0.4 | i 2.3 | i 5.8 | i 1.4 | |||||||||||||||||||
Income Before Income Taxes | i 124.2 | i 117.1 | i 469.0 | i 426.8 | |||||||||||||||||||
Provision for income taxes | i 33.3 | i 26.7 | i 122.9 | i 108.9 | |||||||||||||||||||
Net Income | i 90.9 | i 90.4 | i 346.1 | i 317.9 | |||||||||||||||||||
Less: Net income attributable to noncontrolling interest | i 3.0 | i 3.4 | i 10.7 | i 7.7 | |||||||||||||||||||
Net Income Attributable to The Timken Company | $ | i 87.9 | $ | i 87.0 | $ | i 335.4 | $ | i 310.2 | |||||||||||||||
Net
Income per Common Share Attributable to The Timken Company Common Shareholders | |||||||||||||||||||||||
Basic earnings per share | $ | i 1.24 | $ | i 1.19 | $ | i 4.68 | $ | i 4.20 | |||||||||||||||
Diluted earnings per share | $ | i 1.23 | $ | i 1.18 | $ | i 4.63 | $ | i 4.16 | |||||||||||||||
Three
Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||
Net Income | $ | i 90.9 | $ | i 90.4 | $ | i 346.1 | $ | i 317.9 | |||||||||||||||
Other comprehensive loss, net of tax: | |||||||||||||||||||||||
Foreign currency translation adjustments | ( i 65.1) | ( i 136.8) | ( i 65.3) | ( i 272.5) | |||||||||||||||||||
Pension and postretirement liability adjustments | ( i 1.4) | ( i 1.4) | ( i 4.5) | ( i 4.3) | |||||||||||||||||||
Change in fair value of derivative financial instruments | i 2.0 | i 1.8 | i 0.9 | i 6.0 | |||||||||||||||||||
Other comprehensive loss, net of tax | ( i 64.5) | ( i 136.4) | ( i 68.9) | ( i 270.8) | |||||||||||||||||||
Comprehensive income (loss), net of tax | i 26.4 | ( i 46.0) | i 277.2 | i 47.1 | |||||||||||||||||||
Less: comprehensive income attributable to noncontrolling interest | i 1.2 | i 0.1 | i 8.9 | i 2.9 | |||||||||||||||||||
Comprehensive income (loss) attributable to The Timken Company | $ | i 25.2 | $ | ( i 46.1) | $ | i 268.3 | $ | i 44.2 |
(Unaudited) | |||||||||||
(Dollars in millions) | September 30, 2023 | December 31, 2022 | |||||||||
ASSETS | |||||||||||
Current Assets | |||||||||||
Cash and cash equivalents | $ | i 367.9 | $ | i 331.6 | |||||||
Restricted cash | i 7.2 | i 9.1 | |||||||||
Accounts
receivable, less allowances (2023 – $ i 17.2 million; 2022 – $ i 17.9 million) | i 706.5 | i 699.6 | |||||||||
Unbilled receivables | i 136.1 | i 103.9 | |||||||||
Inventories, net | i 1,202.4 | i 1,191.3 | |||||||||
Deferred charges and prepaid expenses | i 41.9 | i 44.4 | |||||||||
Other current assets | i 144.9 | i 124.1 | |||||||||
Total Current Assets | i 2,606.9 | i 2,504.0 | |||||||||
Property, Plant and Equipment, net | i 1,245.9 | i 1,207.4 | |||||||||
Other Assets | |||||||||||
Goodwill | i 1,257.6 | i 1,098.3 | |||||||||
Other intangible assets | i 935.3 | i 765.3 | |||||||||
Operating lease assets | i 112.8 | i 101.4 | |||||||||
Deferred income taxes | i 57.6 | i 71.0 | |||||||||
Other non-current assets | i 28.6 | i 25.0 | |||||||||
Total Other Assets | i 2,391.9 | i 2,061.0 | |||||||||
Total Assets | $ | i 6,244.7 | $ | i 5,772.4 | |||||||
LIABILITIES AND EQUITY | |||||||||||
Current Liabilities | |||||||||||
Accounts payable, trade | i 344.2 | i 403.9 | |||||||||
Short-term debt, including current portion of long-term debt | i 598.4 | i 49.0 | |||||||||
Salaries, wages and benefits | i 154.3 | i 155.3 | |||||||||
Income taxes payable | i 46.0 | i 51.3 | |||||||||
Other current liabilities | i 361.0 | i 352.9 | |||||||||
Total Current Liabilities | i 1,503.9 | i 1,012.4 | |||||||||
Non-Current Liabilities | |||||||||||
Long-term debt | i 1,601.6 | i 1,914.2 | |||||||||
Accrued pension benefits | i 147.1 | i 160.3 | |||||||||
Accrued postretirement benefits | i 31.6 | i 31.4 | |||||||||
Long-term operating lease liabilities | i 72.7 | i 65.2 | |||||||||
Deferred income taxes | i 190.3 | i 139.8 | |||||||||
Other non-current liabilities | i 100.4 | i 96.2 | |||||||||
Total Non-Current Liabilities | i 2,143.7 | i 2,407.1 | |||||||||
Shareholders’ Equity | |||||||||||
Class I and II Serial Preferred Stock, without par value: | |||||||||||
Authorized – i i i i 10,000,000 / / /
shares each class, i i i i none / / /
issued | i — | i — | |||||||||
Common shares, without par value: | |||||||||||
Authorized – i i 200,000,000 /
shares | |||||||||||
Issued (including shares in treasury) (2023 – i 78,648,194 shares; 2022 – i 77,767,640
shares) | |||||||||||
Stated capital | i 40.7 | i 40.7 | |||||||||
Other paid-in capital | i 1,068.3 | i 829.6 | |||||||||
Retained earnings | i 2,196.7 | i 1,932.1 | |||||||||
Accumulated other comprehensive loss | ( i 240.9) | ( i 181.9) | |||||||||
Treasury
shares at cost (2023 – i 8,096,800 shares; 2022 – i 5,188,257 shares) | ( i 587.0) | ( i 352.2) | |||||||||
Total Shareholders’ Equity | i 2,477.8 | i 2,268.3 | |||||||||
Noncontrolling Interest | i 119.3 | i 84.6 | |||||||||
Total Equity | i 2,597.1 | i 2,352.9 | |||||||||
Total Liabilities and Equity | $ | i 6,244.7 | $ | i 5,772.4 |
Nine
Months Ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
(Dollars in millions) | |||||||||||
CASH PROVIDED (USED) | |||||||||||
Operating Activities | |||||||||||
Net income | $ | i 346.1 | $ | i 317.9 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | i 149.0 | i 122.0 | |||||||||
Impairment charges | i 33.2 | i 38.3 | |||||||||
Loss on sale of assets | i — | i 1.0 | |||||||||
Gain on divestitures | ( i 3.7) | i 2.1 | |||||||||
Deferred income tax provision | i 3.4 | i 4.1 | |||||||||
Stock-based compensation expense | i 22.9 | i 22.3 | |||||||||
Pension and other postretirement expense | i 2.6 | i 11.9 | |||||||||
Pension and other postretirement benefit contributions and payments | ( i 24.1) | ( i 11.5) | |||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | i 13.0 | ( i 157.0) | |||||||||
Unbilled receivables | ( i 32.3) | ( i 5.2) | |||||||||
Inventories | i 47.6 | ( i 147.1) | |||||||||
Accounts payable, trade | ( i 58.8) | ( i 12.6) | |||||||||
Other accrued expenses | ( i 14.4) | i 45.8 | |||||||||
Income taxes | ( i 66.6) | i 3.2 | |||||||||
Other, net | ( i 1.0) | ( i 12.9) | |||||||||
Net Cash Provided by Operating Activities | i 416.9 | i 222.3 | |||||||||
Investing Activities | |||||||||||
Capital expenditures | ( i 134.9) | ( i 122.5) | |||||||||
Acquisitions, net of cash acquired | ( i 464.7) | ( i 152.4) | |||||||||
Proceeds from disposal of property, plant and equipment | i 1.7 | i 3.3 | |||||||||
Proceeds from divestitures, net of cash divested | i 4.5 | i 1.0 | |||||||||
Investments in short-term marketable securities, net | ( i 5.6) | i 27.8 | |||||||||
Other, net | ( i 0.1) | i 0.8 | |||||||||
Net Cash Used in Investing Activities | ( i 599.1) | ( i 242.0) | |||||||||
Financing Activities | |||||||||||
Cash dividends paid to shareholders | ( i 70.8) | ( i 69.2) | |||||||||
Purchase of treasury shares | ( i 218.4) | ( i 193.3) | |||||||||
Proceeds from exercise of stock options | i 21.3 | i 4.2 | |||||||||
Payments related to tax withholding for stock-based compensation | ( i 16.4) | ( i 9.5) | |||||||||
Borrowings on accounts receivable facility | i 82.0 | i 197.0 | |||||||||
Payments on accounts receivable facility | ( i 89.0) | ( i 197.0) | |||||||||
Proceeds from long-term debt | i 1,192.3 | i 684.5 | |||||||||
Payments on long-term debt | ( i 1,151.2) | ( i 347.7) | |||||||||
Deferred financing costs | ( i 0.5) | ( i 3.5) | |||||||||
Short-term debt activity, net | i 202.1 | i 17.0 | |||||||||
Noncontrolling interest dividends paid | ( i 0.6) | ( i 0.5) | |||||||||
Proceeds from the sale of shares in Timken India Limited | i 284.8 | i — | |||||||||
Other | i — | i 6.5 | |||||||||
Net Cash Provided by Financing Activities | i 235.6 | i 88.5 | |||||||||
Effect of exchange rate changes on cash | ( i 19.0) | ( i 25.1) | |||||||||
Increase in Cash, Cash Equivalents and Restricted Cash | i 34.4 | i 43.7 | |||||||||
Cash, cash equivalents and restricted cash at beginning of year | i 340.7 | i 257.9 | |||||||||
Cash, Cash Equivalents and Restricted Cash at End of Period | $ | i 375.1 | $ | i 301.6 |
Initial
Purchase Price Allocation | |||||||||||
Assets: | |||||||||||
Accounts receivable | $ | i 32.8 | |||||||||
Inventories | i 79.6 | ||||||||||
Other current assets | i 4.4 | ||||||||||
Property, plant and equipment | i 35.2 | ||||||||||
Operating lease assets | i 4.2 | ||||||||||
Goodwill | i 207.5 | ||||||||||
Other intangible assets | i 220.8 | ||||||||||
Other non-current assets | i 6.3 | ||||||||||
Total assets acquired | $ | i 590.8 | |||||||||
Liabilities: | |||||||||||
Accounts payable, trade | $ | i 19.4 | |||||||||
Salaries, wages and benefits | i 11.7 | ||||||||||
Income taxes payable | i 4.8 | ||||||||||
Other current liabilities | i 8.6 | ||||||||||
Short-term debt | i 5.5 | ||||||||||
Long-term debt | i 6.2 | ||||||||||
Long-term operating lease liabilities | i 2.1 | ||||||||||
Deferred income taxes | i 61.5 | ||||||||||
Other non-current liabilities | i 4.1 | ||||||||||
Total liabilities assumed | $ | i 123.9 | |||||||||
Net assets acquired | $ | i 466.9 |
2023 | ||||||||
Weighted- Average Life | ||||||||
Trade names | $ | i 32.2 | i 18 years | |||||
Technology and know-how | i 50.2 | i 15 years | ||||||
Customer relationships | i 137.9 | i 14 years | ||||||
Capitalized software | i 0.5 | i 2 years | ||||||
Total intangible assets | $ | i 220.8 |
Initial Purchase Price Allocation | Adjustments | Updated Purchase Price Allocation | |||||||||
Assets: | |||||||||||
Accounts receivable | $ | i 30.6 | $ | i 0.1 | $ | i 30.7 | |||||
Inventories | i 52.3 | — | i 52.3 | ||||||||
Other current assets | i 7.6 | i 0.4 | i 8.0 | ||||||||
Property, plant and equipment | i 153.6 | ( i 4.9) | i 148.7 | ||||||||
Goodwill | i 106.9 | i 0.7 | i 107.6 | ||||||||
Other intangible assets | i 182.6 | ( i 0.6) | i 182.0 | ||||||||
Other assets | i 12.1 | ( i 4.8) | i 7.3 | ||||||||
Total assets acquired | $ | i 545.7 | $ | ( i 9.1) | $ | i 536.6 | |||||
Liabilities: | |||||||||||
Accounts payable, trade | $ | i 16.8 | $ | ( i 0.6) | $ | i 16.2 | |||||
Salaries, wages and benefits | i 11.8 | i 0.1 | i 11.9 | ||||||||
Income taxes payable | i 3.2 | — | i 3.2 | ||||||||
Other current liabilities | i 7.0 | ( i 1.0) | i 6.0 | ||||||||
Accrued pension benefits | i 3.2 | i 0.3 | i 3.5 | ||||||||
Deferred income taxes | i 30.0 | ( i 6.0) | i 24.0 | ||||||||
Other non-current liabilities | i 20.0 | i 0.3 | i 20.3 | ||||||||
Total liabilities assumed | $ | i 92.0 | $ | ( i 6.9) | $ | i 85.1 | |||||
Net assets acquired | $ | i 453.7 | $ | ( i 2.2) | $ | i 451.5 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Net sales: | |||||||||||||||||||||||
Engineered Bearings | $ | i 775.6 | $ | i 779.7 | $ | i 2,533.5 | $ | i 2,350.4 | |||||||||||||||
Industrial Motion | i 367.1 | i 356.7 | i 1,144.3 | i 1,064.3 | |||||||||||||||||||
Net sales | $ | i 1,142.7 | $ | i 1,136.4 | $ | i 3,677.8 | $ | i 3,414.7 | |||||||||||||||
Segment EBITDA: | |||||||||||||||||||||||
Engineered Bearings | $ | i 148.2 | $ | i 150.4 | $ | i 538.7 | $ | i 486.2 | |||||||||||||||
Industrial Motion | i 70.3 | i 34.9 | i 199.4 | i 162.4 | |||||||||||||||||||
Total EBITDA, for reportable segments | $ | i 218.5 | $ | i 185.3 | $ | i 738.1 | $ | i 648.6 | |||||||||||||||
Unallocated corporate expense | ( i 17.0) | ( i 9.1) | ( i 47.9) | ( i 35.4) | |||||||||||||||||||
Corporate
pension and other postretirement benefit related (expense) income (1) | ( i 0.2) | ( i 1.0) | i 1.7 | ( i 15.2) | |||||||||||||||||||
Depreciation and amortization | ( i 52.2) | ( i 39.9) | ( i 149.0) | ( i 122.0) | |||||||||||||||||||
Interest expense | ( i 27.5) | ( i 19.3) | ( i 79.9) | ( i 51.9) | |||||||||||||||||||
Interest income | i 2.6 | i 1.1 | i 6.0 | i 2.7 | |||||||||||||||||||
Income before income taxes | $ | i 124.2 | $ | i 117.1 | $ | i 469.0 | $ | i 426.8 |
September 30, 2023 | December 31, 2022 | ||||||||||
Assets by Segment: | |||||||||||
Engineered Bearings | $ | i 3,283.8 | $ | i 3,270.3 | |||||||
Industrial Motion | i 2,511.9 | i 2,070.1 | |||||||||
Corporate (2) | i 449.0 | i 432.0 | |||||||||
$ | i 6,244.7 | $ | i 5,772.4 |
Three Months Ended | Three Months Ended | |||||||||||||||||||
September 30, 2023 | September 30, 2022 | |||||||||||||||||||
Engineered Bearings | Industrial Motion | Total | Engineered Bearings | Industrial Motion | Total | |||||||||||||||
United States | $ | i 307.4 | $ | i 190.6 | $ | i 498.0 | $ | i 310.4 | $ | i 205.3 | $ | i 515.7 | ||||||||
Americas excluding the United States | i 96.1 | i 26.5 | i 122.6 | i 98.4 | i 25.3 | i 123.7 | ||||||||||||||
Europe / Middle East / Africa | i 158.6 | i 125.9 | i 284.5 | i 129.1 | i 100.9 | i 230.0 | ||||||||||||||
China | i 110.7 | i 18.3 | i 129.0 | i 143.0 | i 16.8 | i 159.8 | ||||||||||||||
Asia-Pacific excluding China | i 102.8 | i 5.8 | i 108.6 | i 98.8 | i 8.4 | i 107.2 | ||||||||||||||
Net sales | $ | i 775.6 | $ | i 367.1 | $ | i 1,142.7 | $ | i 779.7 | $ | i 356.7 | $ | i 1,136.4 | ||||||||
Nine Months Ended | Nine Months Ended | |||||||||||||||||||
September 30, 2023 | September 30, 2022 | |||||||||||||||||||
Engineered Bearings | Industrial Motion | Total | Engineered Bearings | Industrial Motion | Total | |||||||||||||||
United States | $ | i 965.9 | $ | i 603.7 | $ | i 1,569.6 | $ | i 902.2 | $ | i 601.8 | $ | i 1,504.0 | ||||||||
Americas excluding the United States | i 284.3 | i 82.3 | i 366.6 | i 295.4 | i 70.4 | i 365.8 | ||||||||||||||
Europe / Middle East / Africa | i 518.1 | i 376.3 | i 894.4 | i 447.4 | i 307.4 | i 754.8 | ||||||||||||||
China | i 425.6 | i 57.5 | i 483.1 | i 405.6 | i 60.6 | i 466.2 | ||||||||||||||
Asia-Pacific excluding China | i 339.6 | i 24.5 | i 364.1 | i 299.8 | i 24.1 | i 323.9 | ||||||||||||||
Net sales | $ | i 2,533.5 | $ | i 1,144.3 | $ | i 3,677.8 | $ | i 2,350.4 | $ | i 1,064.3 | $ | i 3,414.7 |
Nine Months Ended | Nine Months Ended | |||||||
Revenue by sales channel | September 30, 2023 | September 30, 2022 | ||||||
Original equipment manufacturers | i 60% | i 60% | ||||||
Distribution/end users | i 40% | i 40% |
September
30, 2023 | December 31, 2022 | |||||||
Beginning balance, January 1 | $ | i 103.9 | $ | i 104.5 | ||||
Additional unbilled revenue recognized | i 314.3 | i 396.2 | ||||||
Less: amounts billed to customers | ( i 282.1) | ( i 370.5) | ||||||
Less: unbilled receivables reclassified to assets held for sale | i — | ( i 26.3) | ||||||
Ending balance | $ | i 136.1 | $ | i 103.9 |
September 30, 2023 | December
31, 2022 | |||||||
Beginning balance, January 1 | $ | i 54.3 | $ | i 35.8 | ||||
Revenue (cash) received in advance | i 147.9 | i 54.8 | ||||||
Less: revenue recognized | ( i 146.8) | ( i 36.3) | ||||||
Ending balance | $ | i 55.4 | $ | i 54.3 |
Three
Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||
Provision for income taxes | $ | i 33.3 | $ | i 26.7 | $ | i 122.9 | $ | i 108.9 | |||||||||
Effective tax rate | i 26.8 | % | i 22.8 | % | i 26.2 | % | i 25.5 | % |
Three
Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Numerator: | |||||||||||||||||||||||
Net income attributable to The Timken Company | $ | i 87.9 | $ | i 87.0 | $ | i 335.4 | $ | i 310.2 | |||||||||||||||
Denominator: | |||||||||||||||||||||||
Weighted average number of shares outstanding - basic | i 70,878,673 | i 73,177,956 | i 71,740,846 | i 73,890,483 | |||||||||||||||||||
Effect of dilutive securities: | |||||||||||||||||||||||
Stock options and awards - based on the treasury stock method | i 656,936 | i 688,787 | i 716,003 | i 658,228 | |||||||||||||||||||
Weighted
average number of shares outstanding assuming dilution of stock options and awards | i 71,535,609 | i 73,866,743 | i 72,456,849 | i 74,548,711 | |||||||||||||||||||
Basic earnings per share | $ | i 1.24 | $ | i 1.19 | $ | i 4.68 | $ | i 4.20 | |||||||||||||||
Diluted earnings per share | $ | i 1.23 | $ | i 1.18 | $ | i 4.63 | $ | i 4.16 |
September 30, 2023 | December 31, 2022 | ||||||||||
Manufacturing supplies | $ | i 43.4 | $ | i 41.7 | |||||||
Raw materials | i 138.8 | i 132.0 | |||||||||
Work in process | i 497.7 | i 491.2 | |||||||||
Finished products | i 602.4 | i 584.8 | |||||||||
Subtotal | i 1,282.3 | i 1,249.7 | |||||||||
Allowance for obsolete and surplus inventory | ( i 79.9) | ( i 58.4) | |||||||||
Total inventories, net | $ | i 1,202.4 | $ | i 1,191.3 |
Engineered Bearings | Industrial Motion | Total | ||||||||||||
Beginning balance | $ | i 679.8 | $ | i 418.5 | $ | i 1,098.3 | ||||||||
Acquisitions | i 0.1 | i 207.4 | i 207.5 | |||||||||||
Impairment loss | i — | ( i 28.3) | ( i 28.3) | |||||||||||
Foreign currency translation adjustments and other changes | ( i 4.5) | ( i 15.4) | ( i 19.9) | |||||||||||
Ending balance | $ | i 675.4 | $ | i 582.2 | $ | i 1,257.6 |
Balance at September 30, 2023 | Balance at December 31, 2022 | |||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||
Intangible
assets subject to amortization: | ||||||||||||||||||||
Customer relationships | $ | i 698.7 | $ | ( i 209.4) | $ | i 489.3 | $ | i 561.5 | $ | ( i 183.2) | $ | i 378.3 | ||||||||
Technology and know-how | i 318.2 | ( i 93.8) | i 224.4 | i 273.1 | ( i 80.4) | i 192.7 | ||||||||||||||
Trade names | i 74.9 | ( i 10.4) | i 64.5 | i 18.4 | ( i 8.7) | i 9.7 | ||||||||||||||
Capitalized software | i 294.7 | ( i 270.0) | i 24.7 | i 288.4 | ( i 266.3) | i 22.1 | ||||||||||||||
Other | i 7.8 | ( i 6.7) | i 1.1 | i 3.3 | ( i 2.3) | i 1.0 | ||||||||||||||
$ | i 1,394.3 | $ | ( i 590.3) | $ | i 804.0 | $ | i 1,144.7 | $ | ( i 540.9) | $ | i 603.8 | |||||||||
Intangible assets not subject to amortization: | ||||||||||||||||||||
Trade names | $ | i 122.6 | $ | i 122.6 | $ | i 152.8 | $ | i 152.8 | ||||||||||||
FAA air agency certificates | i 8.7 | i 8.7 | i 8.7 | i 8.7 | ||||||||||||||||
$ | i 131.3 | $ | i 131.3 | $ | i 161.5 | $ | i 161.5 | |||||||||||||
Total intangible assets | $ | i 1,525.6 | $ | ( i 590.3) | $ | i 935.3 | $ | i 1,306.2 | $ | ( i 540.9) | $ | i 765.3 |
(Dollars in millions) | September
30, 2023 | December 31, 2022 | ||||||
Sales rebates | $ | i 73.6 | $ | i 82.9 | ||||
Deferred revenue | i 55.4 | i 54.3 | ||||||
Product warranty | i 22.0 | i 23.5 | ||||||
Operating lease liabilities | i 23.9 | i 24.1 | ||||||
Current derivative liability | i 24.1 | i 19.8 | ||||||
Taxes other than income and payroll taxes | i 24.1 | i 18.7 | ||||||
Freight and duties | i 14.9 | i 21.7 | ||||||
Interest | i 17.0 | i 15.0 | ||||||
Professional fees | i 15.4 | i 17.4 | ||||||
Restructuring | i 5.4 | i 3.1 | ||||||
Other | i 85.2 | i 72.4 | ||||||
Total other current liabilities | $ | i 361.0 | $ | i 352.9 |
September
30, 2023 | December 31, 2022 | |||||||
Variable-rate Term Loan(1), maturing on August 16, 2024, with an interest rate of i 4.95% at September 30, 2023 | $ | i 211.5 | $ | i — | ||||
Borrowings
under lines of credit for certain of the Company’s foreign subsidiaries with various banks with interest rates ranging from i 4.45% to i 7.33%
at September 30, 2023 and i 2.38% to i 5.50% at December 31, 2022 | i 30.1 | i 46.3 | ||||||
Short-term debt | $ | i 241.6 | $ | i 46.3 |
September 30, 2023 | December
31, 2022 | |||||||
Variable-rate Senior Credit Facility with an average interest rate on U.S. Dollar of i 6.42% and Euro of i 4.51% at September 30, 2023
and U.S. Dollar of i 5.10% and Euro of i 2.21% at December 31, 2022 | $ | i 49.1 | $ | i 8.5 | ||||
Variable-rate
Accounts Receivable Facility with an interest rate of i 6.29% at September 30, 2023 and i 5.01%
at December 31, 2022 | i 78.0 | i 85.0 | ||||||
Variable-rate Term Loan(1),
maturing on December 5, 2027, with an interest rate of i 6.54% at September 30, 2023 and i 5.55% at December 31,
2022 | i 399.3 | i 399.1 | ||||||
Fixed-rate Senior Unsecured Notes(1), maturing on September 1,
2024, with an interest rate of i i 3.875 / % | i 349.9 | i 349.8 | ||||||
Fixed-rate
Euro Senior Unsecured Notes(1), maturing on September 7, 2027, with an interest rate of i i 2.02 / % | i 158.5 | i 160.4 | ||||||
Fixed-rate
Senior Unsecured Notes(1), maturing on December 15, 2028, with an interest rate of i i 4.50 / % | i 397.6 | i 397.2 | ||||||
Fixed-rate
Medium-Term Notes, Series A(1), maturing at various dates through May 2028, with interest rates ranging from i i 6.74 / %
to i i 7.76 / % | i 154.8 | i 154.8 | ||||||
Fixed-rate
Senior Unsecured Notes(1), maturing on April 1, 2032, with an interest rate of i i 4.125 / % | i 343.3 | i 342.1 | ||||||
Fixed-rate
Euro Bank Loan, maturing on June 30, 2033, with an interest rate of i i 2.15 / % | i 12.4 | i 13.6 | ||||||
Other | i 15.5 | i 6.4 | ||||||
Total debt | $ | i 1,958.4 | $ | i 1,916.9 | ||||
Less: current maturities | i 356.8 | i 2.7 | ||||||
Long-term debt | $ | i 1,601.6 | $ | i 1,914.2 |
Year | |||||
2023 | $ | i 3.3 | |||
2024 | i 438.7 | ||||
2025 | i 29.5 | ||||
2026 | i 53.3 | ||||
2027 | i 564.8 | ||||
2028 | i 521.6 | ||||
Thereafter | i 357.3 |
September 30, 2023 | |||||||||||
Confirmed obligations outstanding, January 1 | $ | i 14.4 | |||||||||
Invoices confirmed | i 69.1 | ||||||||||
Confirmed invoices paid | ( i 63.8) | ||||||||||
Confirmed obligations outstanding, ending balance | $ | i 19.7 |
September 30, 2023 | December 31, 2022 | ||||||||||
Beginning balance, January 1 | $ | i 23.5 | $ | i 11.7 | |||||||
Expense | i 6.6 | i 14.7 | |||||||||
Payments | ( i 8.1) | ( i 2.9) | |||||||||
Ending balance | $ | i 22.0 | $ | i 23.5 |
The Timken Company Shareholders | |||||||||||||||||||||||
Total | Stated Capital | Other Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Non controlling Interest | |||||||||||||||||
Balance at June 30, 2023 | $ | i 2,650.0 | $ | i 40.7 | $ | i 1,058.4 | $ | i 2,132.2 | $ | ( i 178.2) | $ | ( i 521.8) | $ | i 118.7 | |||||||||
Net income | i 90.9 | i 87.9 | i 3.0 | ||||||||||||||||||||
Foreign currency translation adjustment | ( i 65.1) | ( i 63.3) | ( i 1.8) | ||||||||||||||||||||
Pension
and other postretirement liability adjustments (net of income tax benefit of $ i 0.5 million) | ( i 1.4) | ( i 1.4) | |||||||||||||||||||||
Change
in fair value of derivative financial instruments, net of reclassifications | i 2.0 | i 2.0 | |||||||||||||||||||||
Dividends declared to noncontrolling interest | ( i 0.6) | ( i 0.6) | |||||||||||||||||||||
Dividends
- $ i 0.33 per share | ( i 23.4) | ( i 23.4) | |||||||||||||||||||||
Stock-based compensation expense | i 5.8 | i 5.8 | |||||||||||||||||||||
Stock purchased at fair market value | ( i 63.9) | ( i 63.9) | |||||||||||||||||||||
Stock option exercise activity | i 4.1 | i 4.1 | |||||||||||||||||||||
Payments
related to tax withholding for stock-based compensation | ( i 1.3) | ( i 1.3) | |||||||||||||||||||||
Balance at September 30, 2023 | $ | i 2,597.1 | $ | i 40.7 | $ | i 1,068.3 | $ | i 2,196.7 | $ | ( i 240.9) | $ | ( i 587.0) | $ | i 119.3 |
The Timken Company Shareholders | |||||||||||||||||||||||
Total | Stated Capital | Other Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Non controlling Interest | |||||||||||||||||
Balance at December 31, 2022 | $ | i 2,352.9 | $ | i 40.7 | $ | i 829.6 | $ | i 1,932.1 | $ | ( i 181.9) | $ | ( i 352.2) | $ | i 84.6 | |||||||||
Net income | i 346.1 | i 335.4 | i 10.7 | ||||||||||||||||||||
Foreign currency translation adjustment | ( i 65.3) | ( i 63.5) | ( i 1.8) | ||||||||||||||||||||
Pension
and other postretirement liability adjustments (net of income tax benefit of $ i 1.5 million) | ( i 4.5) | ( i 4.5) | |||||||||||||||||||||
Change
in fair value of derivative financial instruments, net of reclassifications | i 0.9 | i 0.9 | |||||||||||||||||||||
Dividends
- $ i 0.97 per share | ( i 70.8) | ( i 70.8) | |||||||||||||||||||||
Dividends declared to noncontrolling interest | ( i 0.6) | ( i 0.6) | |||||||||||||||||||||
Sale of shares of Timken India Limited | i 229.0 | i 194.5 | i 8.1 | i 26.4 | |||||||||||||||||||
Stock-based compensation expense | i 22.9 | i 22.9 | |||||||||||||||||||||
Stock purchased at fair market value | ( i 218.4) | ( i 218.4) | |||||||||||||||||||||
Stock option exercise activity | i 21.3 | i 21.3 | |||||||||||||||||||||
Payments
related to tax withholding for stock-based compensation | ( i 16.4) | ( i 16.4) | |||||||||||||||||||||
Balance at September 30, 2023 | $ | i 2,597.1 | $ | i 40.7 | $ | i 1,068.3 | $ | i 2,196.7 | $ | ( i 240.9) | $ | ( i 587.0) | $ | i 119.3 |
The Timken Company Shareholders | |||||||||||||||||||||||
Total | Stated Capital | Other Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Non controlling Interest | |||||||||||||||||
Balance at June 30, 2022 | $ | i 2,289.2 | $ | i 40.7 | $ | i 804.1 | $ | i 1,793.2 | $ | ( i 155.9) | $ | ( i 278.5) | $ | i 85.6 | |||||||||
Net income | i 90.4 | i 87.0 | i 3.4 | ||||||||||||||||||||
Foreign currency translation adjustment | ( i 136.8) | ( i 133.5) | ( i 3.3) | ||||||||||||||||||||
Pension
and other postretirement liability adjustments (net of income tax benefit of $ i 0.6 million) | ( i 1.4) | ( i 1.4) | |||||||||||||||||||||
Change
in fair value of derivative financial instruments, net of reclassifications | i 1.8 | i 1.8 | |||||||||||||||||||||
Dividends paid to noncontrolling interest | ( i 0.5) | ( i 0.5) | |||||||||||||||||||||
Dividends
- $ i 0.31 per share | ( i 22.8) | ( i 22.8) | |||||||||||||||||||||
Stock-based compensation expense | i 6.7 | i 6.7 | |||||||||||||||||||||
Stock purchased at fair market value | ( i 49.0) | ( i 49.0) | |||||||||||||||||||||
Stock option exercise activity | i 2.6 | i 2.6 | |||||||||||||||||||||
Restricted share activity | i — | i 3.8 | ( i 3.8) | ||||||||||||||||||||
Payments
related to tax withholding for stock-based compensation | ( i 1.4) | ( i 1.4) | |||||||||||||||||||||
Balance at September 30, 2022 | $ | i 2,178.8 | $ | i 40.7 | $ | i 817.2 | $ | i 1,857.4 | $ | ( i 289.0) | $ | ( i 332.7) | $ | i 85.2 |
The Timken Company Shareholders | |||||||||||||||||||||||
Total | Stated Capital | Other Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Non controlling Interest | |||||||||||||||||
Balance at December 31, 2021 | $ | i 2,377.7 | $ | i 40.7 | $ | i 786.9 | $ | i 1,616.4 | $ | ( i 23.0) | $ | ( i 126.1) | $ | i 82.8 | |||||||||
Net income | i 317.9 | i 310.2 | i 7.7 | ||||||||||||||||||||
Foreign currency translation adjustment | ( i 272.5) | ( i 267.7) | ( i 4.8) | ||||||||||||||||||||
Pension
and other postretirement liability adjustments (net of income tax benefit of $ i 1.5 million) | ( i 4.3) | ( i 4.3) | |||||||||||||||||||||
Change
in fair value of derivative financial instruments, net of reclassifications | i 6.0 | i 6.0 | |||||||||||||||||||||
Dividends paid to noncontrolling interest | ( i 0.5) | ( i 0.5) | |||||||||||||||||||||
Dividends
- $ i 0.92 per share | ( i 69.2) | ( i 69.2) | |||||||||||||||||||||
Stock-based compensation expense | i 22.3 | i 22.3 | |||||||||||||||||||||
Stock purchased at fair market value | ( i 193.3) | ( i 193.3) | |||||||||||||||||||||
Stock option exercise activity | i 4.2 | i 4.2 | |||||||||||||||||||||
Restricted share activity | i — | i 3.8 | ( i 3.8) | ||||||||||||||||||||
Payments
related to tax withholding for stock-based compensation | ( i 9.5) | ( i 9.5) | |||||||||||||||||||||
Balance at September 30, 2022 | $ | i 2,178.8 | $ | i 40.7 | $ | i 817.2 | $ | i 1,857.4 | $ | ( i 289.0) | $ | ( i 332.7) | $ | i 85.2 |
Engineered Bearings | Industrial Motion | Total | ||||||||||||
Impairment charges | $ | i 4.9 | $ | i — | $ | i 4.9 | ||||||||
Severance and related benefit costs | i 1.6 | i 1.8 | i 3.4 | |||||||||||
Exit costs | i 0.4 | i 0.2 | i 0.6 | |||||||||||
Total | $ | i 6.9 | $ | i 2.0 | $ | i 8.9 |
Engineered Bearings | Industrial Motion | Total | ||||||||||||
Impairment charges | $ | i 4.9 | $ | i 28.3 | $ | i 33.2 | ||||||||
Severance and related benefit costs | i 3.8 | i 2.5 | i 6.3 | |||||||||||
Exit costs | i 0.6 | i 0.2 | i 0.8 | |||||||||||
Total | $ | i 9.3 | $ | i 31.0 | $ | i 40.3 |
Engineered Bearings | Industrial Motion | Total | ||||||||||||
Impairment charges | $ | i 0.2 | $ | i 29.3 | $ | i 29.5 | ||||||||
Severance and related benefit costs | i 0.7 | i 0.8 | i 1.5 | |||||||||||
Exit costs | i 0.3 | i — | i 0.3 | |||||||||||
Total | $ | i 1.2 | $ | i 30.1 | $ | i 31.3 |
Engineered Bearings | Industrial Motion | Total | ||||||||||||
Impairment charges | $ | i 9.0 | $ | i 29.3 | $ | i 38.3 | ||||||||
Severance and related benefit costs | i 1.7 | i 1.1 | i 2.8 | |||||||||||
Exit costs | i 1.1 | i 0.1 | i 1.2 | |||||||||||
Total | $ | i 11.8 | $ | i 30.5 | $ | i 42.3 |
September
30, 2023 | December 31, 2022 | ||||||||||
Beginning balance, January 1 | $ | i 3.1 | $ | i 7.0 | |||||||
Expense | i 7.1 | i 5.8 | |||||||||
Payments | ( i 4.8) | ( i 9.7) | |||||||||
Ending balance | $ | i 5.4 | $ | i 3.1 |
U.S. Plans | International Plans | Total | ||||||||||||||||||
Three Months Ended September 30, | Three Months Ended September 30, | Three Months Ended September 30, | ||||||||||||||||||
2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||
Components of net periodic benefit cost (credit): | ||||||||||||||||||||
Service cost | $ | i 0.2 | $ | i 1.6 | $ | i 0.3 | $ | i 0.4 | $ | i 0.5 | $ | i 2.0 | ||||||||
Interest cost | i 4.4 | i 4.7 | i 2.4 | i 1.4 | i 6.8 | i 6.1 | ||||||||||||||
Expected return on plan assets | ( i 2.1) | ( i 4.3) | ( i 2.5) | ( i 2.2) | ( i 4.6) | ( i 6.5) | ||||||||||||||
Amortization of prior service cost | i 0.1 | i 0.3 | i — | i — | i 0.1 | i 0.3 | ||||||||||||||
Recognition of net actuarial losses | i 0.2 | i 1.0 | i — | i — | i 0.2 | i 1.0 | ||||||||||||||
Net periodic benefit cost (credit) | $ | i 2.8 | $ | i 3.3 | $ | i 0.2 | $ | ( i 0.4) | $ | i 3.0 | $ | i 2.9 | ||||||||
U.S. Plans | International Plans | Total | ||||||||||||||||||
Nine Months Ended September 30, | Nine Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||
2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||
Components of net periodic benefit cost (credit): | ||||||||||||||||||||
Service cost | $ | i 0.6 | $ | i 5.3 | $ | i 1.1 | $ | i 1.2 | $ | i 1.7 | $ | i 6.5 | ||||||||
Interest cost | i 13.4 | i 12.9 | i 7.7 | i 4.3 | i 21.1 | i 17.2 | ||||||||||||||
Expected return on plan assets | ( i 6.3) | ( i 14.5) | ( i 7.8) | ( i 7.1) | ( i 14.1) | ( i 21.6) | ||||||||||||||
Amortization of prior service cost | i 0.2 | i 0.9 | i 0.1 | i 0.1 | i 0.3 | i 1.0 | ||||||||||||||
Recognition
of net actuarial (gains) losses | ( i 1.7) | i 15.2 | i — | i — | ( i 1.7) | i 15.2 | ||||||||||||||
Net periodic benefit cost (credit) | $ | i 6.2 | $ | i 19.8 | $ | i 1.1 | $ | ( i 1.5) | $ | i 7.3 | $ | i 18.3 |
Three
Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Net periodic benefit credit: | |||||||||||||||||||||||
Service cost | $ | i 0.1 | $ | i — | $ | i 0.1 | $ | i 0.1 | |||||||||||||||
Interest cost | i 0.4 | i 0.4 | i 1.4 | i 1.1 | |||||||||||||||||||
Amortization of prior service credit | ( i 2.0) | ( i 2.6) | ( i 6.2) | ( i 7.6) | |||||||||||||||||||
Net periodic benefit credit | $ | ( i 1.5) | $ | ( i 2.2) | $ | ( i 4.7) | $ | ( i 6.4) |
Foreign currency translation adjustments | Pension and other postretirement liability adjustments | Change in fair value of derivative financial instruments | Total | ||||||||||||||
Balance at June 30, 2023 | $ | ( i 227.8) | $ | i 47.7 | $ | i 1.9 | $ | ( i 178.2) | |||||||||
Other
comprehensive loss (income) before reclassifications and income taxes | ( i 65.1) | i — | i 2.1 | ( i 63.0) | |||||||||||||
Amounts
reclassified from accumulated other comprehensive (loss) income before income taxes | i — | ( i 1.9) | i 0.8 | ( i 1.1) | |||||||||||||
Income tax benefit (expense) | i — | i 0.5 | ( i 0.9) | ( i 0.4) | |||||||||||||
Net
current period other comprehensive (loss) income, net of income taxes | ( i 65.1) | ( i 1.4) | i 2.0 | ( i 64.5) | |||||||||||||
Noncontrolling interest | i 1.8 | i — | i — | i 1.8 | |||||||||||||
Net
current period other comprehensive (loss) income, net of income taxes, noncontrolling interest and sale of shares of Timken India Limited | ( i 63.3) | ( i 1.4) | i 2.0 | ( i 62.7) | |||||||||||||
Balance at September 30, 2023 | $ | ( i 291.1) | $ | i 46.3 | $ | i 3.9 | $ | ( i 240.9) |
Foreign currency translation adjustments | Pension and other postretirement liability adjustments | Change in fair value of derivative financial instruments | Total | ||||||||||||||
Balance at December 31, 2022 | $ | ( i 235.7) | $ | i 50.8 | $ | i 3.0 | $ | ( i 181.9) | |||||||||
Sale of shares of Timken India Limited | i 8.1 | i — | i — | i 8.1 | |||||||||||||
Other
comprehensive loss (income) before reclassifications and income taxes | ( i 65.3) | ( i 0.1) | i 0.4 | ( i 65.0) | |||||||||||||
Amounts
reclassified from accumulated other comprehensive (loss) income before income taxes | i — | ( i 5.9) | i 0.9 | ( i 5.0) | |||||||||||||
Income tax benefit (expense) | i — | i 1.5 | ( i 0.4) | i 1.1 | |||||||||||||
Net
current period other comprehensive (loss) income, net of income taxes | ( i 65.3) | ( i 4.5) | i 0.9 | ( i 68.9) | |||||||||||||
Noncontrolling interest | i 1.8 | i — | i — | i 1.8 | |||||||||||||
Net
current period other comprehensive (loss) income, net of income taxes, noncontrolling interest and sale of shares of Timken India Limited | ( i 55.4) | ( i 4.5) | i 0.9 | ( i 59.0) | |||||||||||||
Balance at September 30, 2023 | $ | ( i 291.1) | $ | i 46.3 | $ | i 3.9 | $ | ( i 240.9) |
Foreign currency translation adjustments | Pension and other postretirement liability adjustments | Change in fair value of derivative financial instruments | Total | ||||||||||||||
Balance at June 30, 2022 | $ | ( i 214.5) | $ | i 53.7 | $ | i 4.9 | $ | ( i 155.9) | |||||||||
Other
comprehensive (loss) income before reclassifications and income taxes | ( i 136.8) | i 0.3 | i 3.3 | ( i 133.2) | |||||||||||||
Amounts
reclassified from accumulated other comprehensive (loss) income before income taxes | i — | ( i 2.3) | ( i 0.8) | ( i 3.1) | |||||||||||||
Income tax benefit (expense) | i — | i 0.6 | ( i 0.7) | ( i 0.1) | |||||||||||||
Net
current period other comprehensive (loss) income, net of income taxes | ( i 136.8) | ( i 1.4) | i 1.8 | ( i 136.4) | |||||||||||||
Noncontrolling interest | i 3.3 | i — | i — | i 3.3 | |||||||||||||
Net
current period other comprehensive (loss) income, net of income taxes and noncontrolling interest | ( i 133.5) | ( i 1.4) | i 1.8 | ( i 133.1) | |||||||||||||
Balance at September 30, 2022 | $ | ( i 348.0) | $ | i 52.3 | $ | i 6.7 | $ | ( i 289.0) |
Foreign currency translation adjustments | Pension and other postretirement liability adjustments | Change in fair value of derivative financial instruments | Total | ||||||||||||||
Balance at December 31, 2021 | $ | ( i 80.3) | $ | i 56.6 | $ | i 0.7 | $ | ( i 23.0) | |||||||||
Other
comprehensive (loss) income before reclassifications and income taxes | ( i 272.5) | i 0.8 | i 10.4 | ( i 261.3) | |||||||||||||
Amounts
reclassified from accumulated other comprehensive (loss) income before income taxes | i — | ( i 6.6) | ( i 2.4) | ( i 9.0) | |||||||||||||
Income tax benefit (expense) | i — | i 1.5 | ( i 2.0) | ( i 0.5) | |||||||||||||
Net
current period other comprehensive (loss) income, net of income taxes | ( i 272.5) | ( i 4.3) | i 6.0 | ( i 270.8) | |||||||||||||
Noncontrolling interest | i 4.8 | i — | i — | i 4.8 | |||||||||||||
Net
current period other comprehensive (loss) income, net of income taxes and noncontrolling interest | ( i 267.7) | ( i 4.3) | i 6.0 | ( i 266.0) | |||||||||||||
Balance at September 30, 2022 | $ | ( i 348.0) | $ | i 52.3 | $ | i 6.7 | $ | ( i 289.0) |
September 30, 2023 | ||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||
Assets: | ||||||||||||||
Cash and cash equivalents | $ | i 327.9 | $ | i 327.8 | $ | i 0.1 | $ | i — | ||||||
Cash and cash equivalents measured at net asset value | i 40.0 | |||||||||||||
Restricted cash | i 7.2 | i 7.2 | i — | i — | ||||||||||
Short-term investments | i 41.8 | i — | i 41.8 | i — | ||||||||||
Foreign currency forward contracts | i 2.5 | i — | i 2.5 | i — | ||||||||||
Total assets | $ | i 419.4 | $ | i 335.0 | $ | i 44.4 | $ | i — | ||||||
Liabilities: | ||||||||||||||
Foreign currency forward contracts | $ | i 24.1 | $ | i — | $ | i 24.1 | $ | i — | ||||||
Total liabilities | $ | i 24.1 | $ | i — | $ | i 24.1 | $ | i — |
December 31, 2022 | ||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||
Assets: | ||||||||||||||
Cash and cash equivalents | $ | i 292.1 | $ | i 289.3 | $ | i 2.8 | $ | i — | ||||||
Cash and cash equivalents measured at net asset value | i 39.5 | |||||||||||||
Restricted cash | i 9.1 | i 9.1 | i — | i — | ||||||||||
Short-term investments | i 39.2 | i — | i 39.2 | i — | ||||||||||
Interest rate swap contracts | i 3.1 | i — | i 3.1 | i — | ||||||||||
Foreign currency forward contracts | i 4.5 | i — | i 4.5 | i — | ||||||||||
Total assets | $ | i 387.5 | $ | i 298.4 | $ | i 49.6 | $ | i — | ||||||
Liabilities: | ||||||||||||||
Foreign currency forward contracts | $ | i 19.8 | $ | i — | $ | i 19.8 | $ | i — | ||||||
Total liabilities | $ | i 19.8 | $ | i — | $ | i 19.8 | $ | 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 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||
Foreign currency forward contracts | Other expense, net | $ | i 0.3 | $ | ( i 1.1) | $ | ( i 16.2) | $ | ( i 8.0) | |||||||||||||||||
Three Months Ended September 30, | ||||||||||||||
2023 | 2022 | $ Change | % Change | |||||||||||
Net sales | $ | 1,142.7 | $ | 1,136.4 | $ | 6.3 | 0.6 | % | ||||||
Net income | 90.9 | 90.4 | 0.5 | 0.6 | % | |||||||||
Net income attributable to noncontrolling interest | 3.0 | 3.4 | (0.4) | NM | ||||||||||
Net income attributable to The Timken Company | $ | 87.9 | $ | 87.0 | $ | 0.9 | 1.0 | % | ||||||
Diluted earnings per share | $ | 1.23 | $ | 1.18 | $ | 0.05 | 4.2 | % | ||||||
Average number of shares – diluted | 71,535,609 | 73,866,743 | — | (3.2) | % |
Nine
Months Ended September 30, | ||||||||||||||
2022 | 2021 | $ Change | % Change | |||||||||||
Net sales | $ | 3,677.8 | $ | 3,414.7 | $ | 263.1 | 7.7 | % | ||||||
Net income | 346.1 | 317.9 | 28.2 | 8.9 | % | |||||||||
Net income attributable to noncontrolling interest | 10.7 | 7.7 | 3.0 | 39.0 | % | |||||||||
Net income attributable to The Timken Company | $ | 335.4 | $ | 310.2 | $ | 25.2 | 8.1 | % | ||||||
Diluted earnings per share | $ | 4.63 | $ | 4.16 | $ | 0.47 | 11.3 | % | ||||||
Average number of shares – diluted | 72,456,849 | 74,548,711 | — | (2.8) | % | |||||||||
Three
Months Ended September 30, | ||||||||||||||
2023 | 2022 | $ Change | Change | |||||||||||
Net sales | $ | 1,142.7 | $ | 1,136.4 | $ | 6.3 | 0.6% | |||||||
Cost of products sold | 787.1 | 802.9 | (15.8) | (2.0%) | ||||||||||
Selling, general and administrative expenses | 179.6 | 159.8 | 19.8 | 12.4% | ||||||||||
Amortization of intangible assets | 17.5 | 10.7 | 6.8 | 63.6% | ||||||||||
Impairment and restructuring charges | 8.9 | 31.3 | (22.4) | (71.6%) | ||||||||||
Operating income | $ | 149.6 | $ | 131.7 | 17.9 | 13.6% | ||||||||
Operating income % to net sales | 13.1 | % | 11.6 | % | 150 | bps |
Nine
Months Ended September 30, | ||||||||||||||
2023 | 2022 | $ Change | Change | |||||||||||
Net sales | $ | 3,677.8 | $ | 3,414.7 | $ | 263.1 | 7.7% | |||||||
Cost of products sold | 2,500.0 | 2,390.5 | 109.5 | 4.6% | ||||||||||
Selling, general and administrative expenses | 551.3 | 469.8 | 81.5 | 17.3% | ||||||||||
Amortization of intangible assets | 48.3 | 32.2 | 16.1 | 50.0% | ||||||||||
Impairment and restructuring charges | 40.3 | 42.3 | (2.0) | (4.7%) | ||||||||||
Operating income | $ | 537.9 | $ | 479.9 | 58.0 | 12.1% | ||||||||
Operating income % to net sales | 14.6 | % | 14.1 | % | 50 | bps |
Three
Months Ended September 30, | ||||||||||||||
2023 | 2022 | $ Change | % Change | |||||||||||
Interest expense | $ | (27.5) | $ | (19.3) | $ | (8.2) | 42.5 | % | ||||||
Interest income | 2.6 | 1.1 | $ | 1.5 | 136.4 | % |
Nine Months Ended September 30, | ||||||||||||||
2023 | 2022 | $ Change | % Change | |||||||||||
Interest expense | $ | (79.9) | $ | (51.9) | $ | (28.0) | 53.9 | % | ||||||
Interest income | 6.0 | 2.7 | $ | 3.3 | 122.2 | % | ||||||||
Three
Months Ended September 30, | ||||||||||||||
2023 | 2022 | $ Change | % Change | |||||||||||
Non-service pension and other postretirement (expense) income | $ | (0.9) | $ | 1.3 | $ | (2.2) | (169.2) | % | ||||||
Other income, net | 0.4 | 2.3 | (1.9) | (82.6) | % | |||||||||
Total other (expense) income | $ | (0.5) | $ | 3.6 | $ | (4.1) | (113.9) | % |
Nine
Months Ended September 30, | ||||||||||||||
2023 | 2022 | $ Change | % Change | |||||||||||
Non-service pension and other postretirement expense | $ | (0.8) | $ | (5.3) | $ | 4.5 | (84.9) | % | ||||||
Other income, net | 5.8 | 1.4 | 4.4 | NM | ||||||||||
Total other income (expense) | $ | 5.0 | $ | (3.9) | $ | 8.9 | (228.2) | % | ||||||
Three
Months Ended September 30, | ||||||||||||||
2023 | 2022 | $ Change | Change | |||||||||||
Provision for income taxes | $ | 33.3 | $ | 26.7 | $ | 6.6 | 24.7 | % | ||||||
Effective tax rate | 26.8 | % | 22.8 | % | 400 | bps |
Nine Months Ended September 30, | ||||||||||||||
2023 | 2022 | $ Change | Change | |||||||||||
Provision for income taxes | $ | 122.9 | $ | 108.9 | $ | 14.0 | 12.9 | % | ||||||
Effective tax rate | 26.2 | % | 25.5 | % | 70 | bps | ||||||||
Three
Months Ended September 30, | ||||||||||||||
2023 | 2022 | $ Change | Change | |||||||||||
Net sales | $ | 775.6 | $ | 779.7 | $ | (4.1) | (0.5%) | |||||||
EBITDA | $ | 148.2 | $ | 150.4 | $ | (2.2) | (1.5%) | |||||||
EBITDA margin | 19.1 | % | 19.3 | % | (20) | bps |
Three Months Ended September 30, | ||||||||||||||
2023 | 2022 | $ Change | % Change | |||||||||||
Net sales | $ | 775.6 | $ | 779.7 | $ | (4.1) | (0.5 | %) | ||||||
Less: Acquisitions | 55.4 | 55.4 | NM | |||||||||||
Currency | 1.1 | 1.1 | NM | |||||||||||
Net sales, excluding the impact of acquisitions and currency | $ | 719.1 | $ | 779.7 | $ | (60.6) | (7.8 | %) |
Nine
Months Ended September 30, | ||||||||||||||
2023 | 2022 | $ Change | Change | |||||||||||
Net sales | $ | 2,533.5 | $ | 2,350.4 | $ | 183.1 | 7.8% | |||||||
EBITDA | $ | 538.7 | $ | 486.2 | $ | 52.5 | 10.8% | |||||||
EBITDA margin | 21.3 | % | 20.7 | % | 60 | bps |
Nine Months Ended September 30, | ||||||||||||||
2023 | 2022 | $ Change | % Change | |||||||||||
Net sales | $ | 2,533.5 | $ | 2,350.4 | $ | 183.1 | 7.8 | % | ||||||
Less: Acquisitions | 168.6 | 168.6 | NM | |||||||||||
Divestitures | (4.8) | (4.8) | NM | |||||||||||
Currency | (31.2) | (31.2) | NM | |||||||||||
Net
sales, excluding the impact of acquisitions, divestitures and currency | $ | 2,400.9 | $ | 2,350.4 | $ | 50.5 | 2.1 | % |
Three Months Ended September 30, | ||||||||||||||
2023 | 2022 | $ Change | Change | |||||||||||
Net sales | $ | 367.1 | $ | 356.7 | $ | 10.4 | 2.9% | |||||||
EBITDA | $ | 70.3 | $ | 34.9 | $ | 35.4 | 101.4% | |||||||
EBITDA margin | 19.2 | % | 9.8 | % | 940 | bps |
Three
Months Ended September 30, | ||||||||||||||
2023 | 2022 | $ Change | % Change | |||||||||||
Net sales | $ | 367.1 | $ | 356.7 | $ | 10.4 | 2.9 | % | ||||||
Less: Acquisitions | 26.2 | 26.2 | NM | |||||||||||
Divestitures | (12.9) | (12.9) | NM | |||||||||||
Currency | 5.0 | 5.0 | NM | |||||||||||
Net
sales, excluding the impact of acquisitions, divestitures and currency | $ | 348.8 | $ | 356.7 | $ | (7.9) | (2.2) | % |
Nine
Months Ended September 30, | ||||||||||||||
2023 | 2022 | $ Change | Change | |||||||||||
Net sales | $ | 1,144.3 | $ | 1,064.3 | $ | 80.0 | 7.5% | |||||||
EBITDA | $ | 199.4 | $ | 162.4 | $ | 37.0 | 22.8% | |||||||
EBITDA margin | 17.4 | % | 15.3 | % | 210 | bps |
Nine Months Ended September 30, | ||||||||||||||
2023 | 2022 | $ Change | % Change | |||||||||||
Net sales | $ | 1,144.3 | $ | 1,064.3 | $ | 80.0 | 7.5 | % | ||||||
Less: Acquisitions | 62.7 | 62.7 | NM | |||||||||||
Divestitures | (36.0) | (36.0) | NM | |||||||||||
Currency | (3.5) | (3.5) | NM | |||||||||||
Net
sales, excluding the impact of acquisitions, divestitures and currency | $ | 1,121.1 | $ | 1,064.3 | $ | 56.8 | 5.3 | % |
Three Months Ended September 30, | ||||||||||||||
2023 | 2022 | $ Change | Change | |||||||||||
Unallocated corporate expense | $ | (17.0) | $ | (9.1) | $ | (7.9) | 86.8 | % | ||||||
Unallocated corporate expense % to net sales | (1.5) | % | (0.8) | % | (70) | bps |
Nine
Months Ended September 30, | ||||||||||||||
2023 | 2022 | $ Change | Change | |||||||||||
Unallocated corporate expense | $ | (47.9) | $ | (35.4) | $ | (12.5) | 35.3 | % | ||||||
Unallocated corporate expense % to net sales | (1.3) | % | (1.0) | % | (30) | bps | ||||||||
Nine Months Ended September 30, | |||||||||||
2023 | 2022 | $ Change | |||||||||
Net cash provided by operating activities | $ | 416.9 | $ | 222.3 | $ | 194.6 | |||||
Net cash used in investing activities | (599.1) | (242.0) | (357.1) | ||||||||
Net cash provided by financing activities | 235.6 | 88.5 | 147.1 | ||||||||
Effect of exchange rate changes on cash | (19.0) | (25.1) | 6.1 | ||||||||
Increase in cash and cash equivalents and restricted cash | $ | 34.4 | $ | 43.7 | $ | (9.3) |
Nine
Months Ended September 30, | |||||||||||
2023 | 2022 | $ Change | |||||||||
Cash (used in) provided by: | |||||||||||
Accounts receivable | $ | 13.0 | $ | (157.0) | $ | 170.0 | |||||
Unbilled receivables | (32.3) | (5.2) | (27.1) | ||||||||
Inventories | 47.6 | (147.1) | 194.7 | ||||||||
Trade accounts payable | (58.8) | (12.6) | (46.2) | ||||||||
Other accrued expenses | (14.4) | 45.8 | (60.2) | ||||||||
Cash used in working capital items | $ | (44.9) | $ | (276.1) | $ | 231.2 |
Nine
Months Ended September 30, | |||||||||||
2023 | 2022 | $ Change | |||||||||
Accrued income tax expense | $ | 122.9 | $ | 108.9 | $ | 14.0 | |||||
Income tax payments | (186.4) | (98.8) | (87.6) | ||||||||
Other items | 0.3 | (2.8) | 3.1 | ||||||||
Change in income taxes | $ | (63.2) | $ | 7.3 | $ | (70.5) |
September 30, 2023 | December 31, 2022 | |||||||
Short-term debt, including current portion of long-term debt | $ | 598.4 | $ | 49.0 | ||||
Long-term debt | 1,601.6 | 1,914.2 | ||||||
Total debt | $ | 2,200.0 | $ | 1,963.2 | ||||
Less: Cash and cash equivalents | 367.9 | 331.6 | ||||||
Net debt | $ | 1,832.1 | $ | 1,631.6 |
September
30, 2023 | December 31, 2022 | |||||||
Net debt | $ | 1,832.1 | $ | 1,631.6 | ||||
Total equity | 2,597.1 | 2,352.9 | ||||||
Net debt plus total equity (capital) | $ | 4,429.2 | $ | 3,984.5 | ||||
Ratio of net debt to capital | 41.4 | % | 40.9 | % |
Three
Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||
Net Sales | $ | 1,142.7 | $ | 1,136.4 | $ | 3,677.8 | $ | 3,414.7 | ||||||
Net Income Attributable to The Timken Company | 87.9 | 87.0 | 335.4 | 310.2 | ||||||||||
Net Income Attributable to The Timken Company as a Percentage of Sales | 7.7 | % | 7.7 | % | 9.1 | % | 9.1 | % | ||||||
Adjustments: | ||||||||||||||
Acquisition intangible amortization | 17.5 | 10.7 | 48.3 | 32.2 | ||||||||||
Impairment, restructuring and reorganization charges (1) | 8.0 | 32.0 | 44.1 | 35.7 | ||||||||||
Corporate
pension and other postretirement benefit related expense (income) (2) | 0.2 | 1.0 | (1.7) | 15.2 | ||||||||||
Russia-related charges (3) | 3.6 | 2.3 | 3.8 | 15.3 | ||||||||||
Acquisition-related
charges (4) | 4.3 | 3.0 | 12.8 | 5.7 | ||||||||||
(Gain) loss on divestitures and sale of certain assets (5) | (1.5) | 0.1 | (5.9) | — | ||||||||||
Noncontrolling interest of above adjustments | (1.8) | 0.1 | (2.0) | (5.7) | ||||||||||
Provision for income taxes (6) | (7.0) | (15.7) | (24.0) | (26.5) | ||||||||||
Adjusted Net Income | $ | 111.2 | $ | 120.5 | $ | 410.8 | $ | 382.1 | ||||||
Net income attributable to noncontrolling interest | 3.0 | 3.4 | 10.7 | 7.7 | ||||||||||
Provision for income taxes (as reported) | 33.3 | 26.7 | 122.9 | 108.9 | ||||||||||
Interest expense | 27.5 | 19.3 | 79.9 | 51.9 | ||||||||||
Interest income | (2.6) | (1.1) | (6.0) | (2.7) | ||||||||||
Depreciation and amortization expense (7) | 52.1 | 39.9 | 148.3 | 122.0 | ||||||||||
Less: Acquisition intangible amortization | 17.5 | 10.7 | 48.3 | 32.2 | ||||||||||
Less: Noncontrolling interest | (1.8) | 0.1 | (2.0) | (5.7) | ||||||||||
Less: Provision for income taxes (6) | (7.0) | (15.7) | (24.0) | (26.5) | ||||||||||
Adjusted EBITDA | $ | 215.8 | $ | 213.6 | $ | 744.3 | $ | 669.9 | ||||||
Adjusted EBITDA Margin (% of net sales) | 18.9 | % | 18.8 | % | 20.2 | % | 19.6 | % |
Three
Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||
Diluted earnings per share (EPS) | $ | 1.23 | $ | 1.18 | $ | 4.63 | $ | 4.16 | ||||||
Adjusted EPS | $ | 1.55 | $ | 1.63 | $ | 5.67 | $ | 5.12 | ||||||
Diluted Shares | 71,535,609 | 73,866,743 | 72,456,849 | 74,548,711 |
Three Months Ended September 30, 2023 | ||||||||||||||
Engineered Bearings | Industrial Motion | Unallocated Corporate | Total | |||||||||||
Net Sales | $ | 775.6 | $ | 367.1 | $ | — | $ | 1,142.7 | ||||||
EBITDA | 148.2 | 70.3 | (17.2) | 201.3 | ||||||||||
Impairment, restructuring and reorganization charges (1) | 5.4 | 2.5 | — | 7.9 | ||||||||||
Corporate
pension and other postretirement benefit related expense (2) | — | — | 0.2 | 0.2 | ||||||||||
Russia-related charges (3) | 3.6 | — | — | 3.6 | ||||||||||
Acquisition-related charges (4) | 0.9 | 2.5 | 0.9 | 4.3 | ||||||||||
Gain
on divestitures and sale of certain assets (5) | (1.4) | (0.1) | — | (1.5) | ||||||||||
Adjusted EBITDA | $ | 156.7 | $ | 75.2 | $ | (16.1) | $ | 215.8 | ||||||
Adjusted EBITDA Margin (% of net sales) | 20.2 | % | 20.5 | % | NM | 18.9 | % | |||||||
Three Months Ended September 30, 2022 | ||||||||||||||
Engineered Bearings | Industrial Motion | Unallocated Corporate | Total | |||||||||||
Net Sales | $ | 779.7 | $ | 356.7 | $ | — | $ | 1,136.4 | ||||||
EBITDA | 150.4 | 34.9 | (10.1) | 175.2 | ||||||||||
Impairment,
restructuring and reorganization charges (1) | 1.1 | 31.0 | (0.1) | 32.0 | ||||||||||
Corporate pension and other postretirement benefit related expense (2) | — | — | 1.0 | 1.0 | ||||||||||
Russia-related charges (3) | 2.3 | — | — | 2.3 | ||||||||||
Acquisition-related
charges (4) | — | 2.1 | 0.9 | 3.0 | ||||||||||
Loss divestitures and sale of certain assets (5) | — | — | 0.1 | 0.1 | ||||||||||
Adjusted EBITDA | $ | 153.8 | $ | 68.0 | $ | (8.2) | $ | 213.6 | ||||||
Adjusted EBITDA Margin (% of net sales) | 19.7 | % | 19.1 | % | NM | 18.8 | % | |||||||
Nine Months Ended September 30, 2023 | ||||||||||||||
Engineered Bearings | Industrial Motion | Unallocated Corporate | Total | |||||||||||
Net Sales | $ | 2,533.5 | $ | 1,144.3 | $ | — | $ | 3,677.8 | ||||||
EBITDA | 538.7 | 199.4 | (46.2) | 691.9 | ||||||||||
Impairment,
restructuring and reorganization charges (1) | 10.6 | 32.7 | 0.1 | 43.4 | ||||||||||
Corporate pension and other postretirement benefit related income (2) | — | — | (1.7) | (1.7) | ||||||||||
Russia-related
charges (3) | 3.8 | — | — | 3.8 | ||||||||||
Acquisition-related charges (4) | 3.2 | 5.8 | 3.8 | 12.8 | ||||||||||
(Gain)
loss on divestitures and sale of certain assets (5) | (6.2) | 0.3 | — | (5.9) | ||||||||||
Adjusted EBITDA | $ | 550.1 | $ | 238.2 | $ | (44.0) | $ | 744.3 | ||||||
Adjusted EBITDA Margin (% of net sales) | 21.7 | % | 20.8 | % | NM | 20.2 | % |
Nine Months Ended September 30, 2022 | ||||||||||||||
Engineered Bearings | Industrial Motion | Unallocated Corporate | Total | |||||||||||
Net Sales | $ | 2,350.4 | $ | 1,064.3 | $ | — | $ | 3,414.7 | ||||||
EBITDA | 486.2 | 162.4 | (50.6) | 598.0 | ||||||||||
Impairment,
restructuring and reorganization charges (1) | 2.7 | 33.1 | (0.1) | 35.7 | ||||||||||
Corporate pension and other postretirement benefit related expense (2) | — | — | 15.2 | 15.2 | ||||||||||
Russia-related
charges (3) | 15.3 | — | — | 15.3 | ||||||||||
Acquisition-related charges (4) | — | 3.5 | 2.2 | 5.7 | ||||||||||
Loss (gain) divestitures and sale of certain assets (5) | 0.1 | (0.2) | 0.1 | — | ||||||||||
Adjusted EBITDA | $ | 504.3 | $ | 198.8 | $ | (33.2) | $ | 669.9 | ||||||
Adjusted EBITDA Margin (% of net sales) | 21.5 | % | 18.7 | % | NM | 19.6 | % |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||
Net cash provided by operating activities | $ | 194.3 | $ | 145.2 | $ | 416.9 | $ | 222.3 | ||||||
Capital expenditures | (43.6) | (47.3) | (134.9) | (122.5) | ||||||||||
Free cash flow | $ | 150.7 | $ | 97.9 | $ | 282.0 | $ | 99.8 |
Twelve Months Ended | ||||||||
September 30, 2023 | December 31, 2022 | |||||||
Net income | $ | 445.2 | $ | 417.0 | ||||
Provision for income taxes | 147.9 | 133.9 | ||||||
Interest expense | 102.6 | 74.6 | ||||||
Interest income | (7.1) | (3.8) | ||||||
Depreciation and amortization | 191.0 | 164.0 | ||||||
Consolidated EBITDA | 879.6 | 785.7 | ||||||
Adjustments: | ||||||||
Impairment, restructuring and reorganization charges (1) | $ | 47.2 | $ | 39.5 | ||||
Corporate
pension and other postretirement benefit related (income) expense (2) | (14.0) | 2.9 | ||||||
Acquisition-related charges (3) | 21.9 | 14.8 | ||||||
Gain on divestitures and sale of certain assets (4) | (8.8) | (2.9) | ||||||
Russia-related
charges (5) | 4.1 | 15.6 | ||||||
Tax indemnification and related items | 0.3 | 0.3 | ||||||
Total adjustments | 50.7 | 70.2 | ||||||
Adjusted EBITDA | $ | 930.3 | $ | 855.9 | ||||
Net Debt | $ | 1,832.1 | $ | 1,631.6 | ||||
Ratio of Net Debt to Adjusted EBITDA | 2.0 | 1.9 |
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) | ||||||||||
7/1/2023 - 7/31/2023 | 216,032 | $ | 91.80 | 215,000 | 3,648,990 | |||||||||
8/1/2023 - 8/31/2023 | 446,116 | 78.74 | 430,000 | 3,218,990 | ||||||||||
9/1/2023 - 9/30/2023 | 130,169 | 74.66 | 130,000 | 3,088,990 | ||||||||||
Total | 792,317 | $ | 81.63 | 775,000 | — |
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 and principal accounting 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 and principal accounting 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, 2023 filed on November 1, 2023, 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: November 1, 2023 | By: /s/ Richard G. Kyle | |||||||
Richard G. Kyle President and Chief Executive Officer (Principal Executive Officer) | ||||||||
Date: November 1, 2023 | By: /s/ Philip D. Fracassa | |||||||
Philip
D. Fracassa Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) |
This ‘10-Q’ Filing | Date | Other Filings | ||
---|---|---|---|---|
6/30/33 | ||||
4/1/32 | ||||
12/15/28 | ||||
12/5/27 | ||||
9/7/27 | ||||
2/28/26 | ||||
11/30/24 | ||||
9/1/24 | ||||
8/16/24 | ||||
6/25/24 | ||||
12/31/23 | ||||
12/15/23 | ||||
Filed on: | 11/1/23 | 8-K | ||
10/16/23 | ||||
10/12/23 | ||||
For Period end: | 9/30/23 | |||
9/29/23 | ||||
9/20/23 | ||||
9/11/23 | ||||
9/5/23 | ||||
8/16/23 | 4 | |||
6/30/23 | 10-Q | |||
6/20/23 | 8-K | |||
4/30/23 | ||||
4/4/23 | ||||
3/31/23 | 10-Q | |||
2/28/23 | 4 | |||
1/31/23 | ||||
1/16/23 | ||||
1/1/23 | ||||
12/31/22 | 10-K, 11-K, ARS, SD | |||
12/15/22 | ||||
12/5/22 | 8-K | |||
11/4/22 | 4 | |||
11/1/22 | 4 | |||
10/31/22 | 4 | |||
9/30/22 | 10-Q | |||
9/1/22 | ||||
6/30/22 | 10-Q | |||
5/31/22 | 4, SD | |||
3/28/22 | 8-K | |||
12/31/21 | 10-K, 11-K, SD | |||
7/19/21 | ||||
3/1/21 | ||||
2/12/21 | 4, 8-K, SC 13G/A | |||
10/30/20 | ||||
9/15/20 | ||||
9/8/20 | 4 | |||
2/4/20 | ||||
4/1/19 | 8-K | |||
12/28/04 | ||||
List all Filings |