x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 2013
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from______to_______
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Ohio
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34-0577130
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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1835 Dueber Avenue, S.W., Canton, Ohio
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44706
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Name of each exchange on which registered
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Common Stock, without par value
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New York Stock Exchange
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Large accelerated filer
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x
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Accelerated filer
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o
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Non-accelerated filer
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o
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Smaller reporting company
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o
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Class
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Outstanding at January 31, 2014
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Common Shares, without par value
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92,781,376 shares
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Document
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Parts Into Which Incorporated
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Proxy Statement for the Annual Meeting of Shareholders to be held on or about May 13, 2014 (Proxy Statement)
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Part III
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PAGE
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I.
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Item 4A.
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II.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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III.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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IV.
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Item 15.
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Exhibit 4.1
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First Amendment to Credit Agreement and Waiver
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Exhibit 10.1
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Time-Based Restricted Stock Unit Agreement
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Exhibit 12
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Computation of Ratio of Earnings to Fixed Charges
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Exhibit 21
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Subsidiaries of the Registrant
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Exhibit 23
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Consent of Independent Registered Public Accounting Firm
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Exhibit 24
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Power of Attorney
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Exhibit 31.1
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Principal Executive Officer’s Certifications
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Exhibit 31.2
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Principal Financial Officer’s Certifications
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Exhibit 32
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Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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Exhibit 101
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Extensible Business Reporting Language (XBRL)
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December 31,
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(Dollars in millions)
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2013
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2012
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||||
Segment:
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Mobile Industries
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$
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562.7
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$
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708.5
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Process Industries
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370.8
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387.8
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Aerospace
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382.4
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404.7
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Steel
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285.7
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311.6
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Total Company
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$
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1,601.6
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$
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1,812.6
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•
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changes in tariff regulations, which may make our products more costly to export or import;
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•
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difficulties establishing and maintaining relationships with local original equipment manufacturers (OEMs), distributors and dealers;
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•
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import and export licensing requirements;
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•
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compliance with a variety of foreign laws and regulations, including unexpected changes in taxation and environmental or other regulatory requirements, which could increase our operating and other expenses and limit our operations;
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•
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disadvantages of competing against companies from countries that are not subject to U.S. laws and regulations, including the Foreign Corrupt Practices Act;
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•
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difficulty in staffing and managing geographically diverse operations; and
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•
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tax exposures related to cross-border intercompany transfer pricing and other tax risks unique to international operations.
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•
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execution of the proposed spinoff will require significant time and attention from management, which may distract management from the operation of our businesses and the execution of other initiatives that may have been beneficial to us;
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•
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our employees may be distracted due to uncertainty about their future roles with each of the separate companies pending the completion of the spinoff;
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•
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we will be required to pay certain costs and expenses relating to the spinoff, such as legal, accounting and other professional fees, whether or not it is completed; and
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•
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we may experience negative reactions from the financial markets if we fail to complete the spinoff.
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Name
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Age
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Current Position and Previous Positions During Last Five Years
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Ward J. Timken, Jr.
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46
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2005 Chairman of the Board
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James W. Griffith
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60
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2002 President and Chief Executive Officer; Director
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William R. Burkhart
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48
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2000 Senior Vice President and General Counsel
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Christopher A. Coughlin
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53
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2012 Group President
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2011 President - Process Industries
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2010 President - Process Industries & Supply Chain
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2009 President - Process Industries
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Glenn A. Eisenberg
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52
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2002 Executive Vice President—Finance and Administration
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Philip D. Fracassa
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45
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2014 Chief Financial Officer
(1)
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2012 Senior Vice President - Planning and Development
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2010 Senior Vice President and Controller - BP&T
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2009 Senior Vice President - Tax and Treasury
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Richard G. Kyle
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48
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2013 Chief Operating Officer - B&PT; Director
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2012 Group President
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2011 President - Mobile Industries & Aerospace
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2009 President - Mobile Industries
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J. Ted Mihaila
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59
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2006 Senior Vice President and Controller
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Donald L. Walker
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57
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2004 Senior Vice President - Human Resources and Organizational
Advancement
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(1)
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Effective March 1, 2014
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2013
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2012
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||||||||||||||||
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Stock prices
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Dividends
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Stock prices
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Dividends
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||||||||||||||
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High
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Low
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per share
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High
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Low
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per share
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||||||||||||
First quarter
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$
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58.50
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$
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47.67
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$
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0.23
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$
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54.87
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$
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38.92
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$
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0.23
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Second quarter
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$
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59.44
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$
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50.22
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$
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0.23
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$
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57.94
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$
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41.81
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$
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0.23
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Third quarter
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$
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64.35
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$
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55.00
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$
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0.23
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$
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46.49
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$
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32.59
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$
|
0.23
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Fourth quarter
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$
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61.57
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$
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50.22
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$
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0.23
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$
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48.12
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$
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36.15
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$
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0.23
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Period
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Total number
of shares purchased
(1)
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Average
price paid per share
(2)
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Total number of
shares purchased as
part of publicly
announced
plans or programs
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Maximum number
of shares that may
yet be purchased
under the
plans or programs
(3)
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10/1/2013 - 10/31/2013
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9,323
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$
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52.69
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—
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5,627,807
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11/1/2013 - 11/30/2013
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1,191,987
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53.12
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1,190,000
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4,437,807
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12/1/2013 - 12/31/2013
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358,345
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52.15
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357,000
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4,080,807
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Total
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1,559,655
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$
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52.90
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1,547,000
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4,080,807
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(1)
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Of the shares purchased in October, November and December, 9,323, 1,987 and 1,345, 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 and vesting of restricted shares.
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(2)
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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 share price at the time the options are exercised.
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(3)
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On February 10, 2012, the Board of Directors of the Company approved a new share purchase plan pursuant to which the Company may purchase up to ten million of its common shares in the aggregate. This new share purchase plan replaced the Company’s 2006 common share purchase plan and this authorization expires on December 31, 2015. 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.
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|||||||||||||||
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2009
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2010
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2011
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2012
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2013
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||||||||||
Timken
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$
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124
|
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$
|
254
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$
|
210
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$
|
264
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$
|
309
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S&P 500
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126
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|
145
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|
149
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|
172
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|
228
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|||||
S&P 400 Industrials
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132
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172
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|
170
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|
207
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|
299
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(Dollars in millions, except per share and per employee data)
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2013
|
2012
|
2011
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2010
|
2009
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||||||||||
Statements of Income
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||||||||||
Net sales
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$
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4,341.2
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$
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4,987.0
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$
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5,170.2
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$
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4,055.5
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$
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3,141.6
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Gross profit
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1,092.0
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1,366.3
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1,369.7
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1,021.7
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582.7
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|||||
Selling, general and administrative expenses
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626.6
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643.9
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626.2
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563.8
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|
472.7
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|||||
Impairment and restructuring charges
|
16.4
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|
29.5
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|
14.4
|
|
21.7
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|
164.1
|
|
|||||
Operating income (loss)
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436.0
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|
692.9
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|
729.1
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|
436.2
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(54.1
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)
|
|||||
Other income (expense), net
|
3.6
|
|
101.3
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|
(1.1
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)
|
3.8
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|
(0.1
|
)
|
|||||
Interest expense, net
|
22.5
|
|
28.2
|
|
31.2
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|
34.5
|
|
40.0
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|
|||||
Income (loss) from continuing operations
|
263.0
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|
495.9
|
|
456.6
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269.5
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(66.0
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)
|
|||||
Income (loss) from discontinued operations, net of income taxes
|
—
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—
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—
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7.4
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(72.6
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)
|
|||||
Net income (loss) attributable to The Timken Company
|
$
|
262.7
|
|
$
|
495.5
|
|
$
|
454.3
|
|
$
|
274.8
|
|
$
|
(134.0
|
)
|
Balance Sheets
|
|
|
|
|
|
||||||||||
Inventories, net
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$
|
809.9
|
|
$
|
862.1
|
|
$
|
964.4
|
|
$
|
828.5
|
|
$
|
671.2
|
|
Property, plant and equipment, net
|
1,558.1
|
|
1,405.3
|
|
1,308.9
|
|
1,267.7
|
|
1,335.2
|
|
|||||
Total assets
|
4,477.9
|
|
4,244.2
|
|
4,327.4
|
|
4,180.4
|
|
4,006.9
|
|
|||||
Total debt:
|
|
|
|
|
|
||||||||||
Short-term debt
|
18.6
|
|
14.3
|
|
22.0
|
|
22.4
|
|
26.3
|
|
|||||
Current portion of long-term debt
|
250.7
|
|
9.6
|
|
14.3
|
|
9.6
|
|
17.1
|
|
|||||
Long-term debt
|
206.6
|
|
455.1
|
|
478.8
|
|
481.7
|
|
469.3
|
|
|||||
Total debt
|
$
|
475.9
|
|
$
|
479.0
|
|
$
|
515.1
|
|
$
|
513.7
|
|
$
|
512.7
|
|
Net debt (cash)
|
|
|
|
|
|
||||||||||
Total debt
|
475.9
|
|
479.0
|
|
515.1
|
|
513.7
|
|
512.7
|
|
|||||
Less: cash and cash equivalents and restricted cash
|
(399.7
|
)
|
(601.5
|
)
|
(468.4
|
)
|
(877.1
|
)
|
(755.5
|
)
|
|||||
Net debt (cash):
(1)
|
$
|
76.2
|
|
$
|
(122.5
|
)
|
$
|
46.7
|
|
$
|
(363.4
|
)
|
$
|
(242.8
|
)
|
Total liabilities
|
1,829.3
|
|
1,997.6
|
|
2,284.9
|
|
2,238.6
|
|
2,411.3
|
|
|||||
Shareholders’ equity
|
$
|
2,648.6
|
|
$
|
2,246.6
|
|
$
|
2,042.5
|
|
$
|
1,941.8
|
|
$
|
1,595.6
|
|
Capital:
|
|
|
|
|
|
||||||||||
Net debt (cash)
|
76.2
|
|
(122.5
|
)
|
46.7
|
|
(363.4
|
)
|
(242.8
|
)
|
|||||
Shareholders’ equity
|
2,648.6
|
|
2,246.6
|
|
2,042.5
|
|
1,941.8
|
|
1,595.6
|
|
|||||
Net debt (cash) + shareholders’ equity (capital)
|
$
|
2,724.8
|
|
$
|
2,124.1
|
|
$
|
2,089.2
|
|
$
|
1,578.4
|
|
$
|
1,352.8
|
|
Other Comparative Data
|
|
|
|
|
|
||||||||||
Income (loss) from continuing operations / Net sales
|
6.1
|
%
|
9.9
|
%
|
8.8
|
%
|
6.6
|
%
|
(2.1
|
)%
|
|||||
Net income (loss) attributable to The Timken Company / Net sales
|
6.1
|
%
|
9.9
|
%
|
8.8
|
%
|
6.8
|
%
|
(4.3
|
)%
|
|||||
Return on equity
(2)
|
9.9
|
%
|
22.1
|
%
|
22.4
|
%
|
13.9
|
%
|
(4.1
|
)%
|
|||||
Net sales per employee
(3)
|
$
|
223.7
|
|
$
|
243.5
|
|
$
|
253.5
|
|
$
|
222.2
|
|
$
|
168.8
|
|
Capital expenditures
|
325.8
|
|
297.2
|
|
205.3
|
|
115.8
|
|
114.1
|
|
|||||
Depreciation and amortization
|
194.6
|
|
198.0
|
|
192.5
|
|
189.7
|
|
201.5
|
|
|||||
Capital expenditures / Net sales
|
7.5
|
%
|
6.0
|
%
|
4.0
|
%
|
2.9
|
%
|
3.6
|
%
|
|||||
Dividends per share
|
$
|
0.92
|
|
$
|
0.92
|
|
$
|
0.78
|
|
$
|
0.53
|
|
$
|
0.45
|
|
Basic earnings (loss) per share - continuing operations
(4)
|
$
|
2.76
|
|
$
|
5.11
|
|
$
|
4.65
|
|
$
|
2.76
|
|
$
|
(0.64
|
)
|
Diluted earnings (loss) per share - continuing operations
(4)
|
$
|
2.74
|
|
$
|
5.07
|
|
$
|
4.59
|
|
$
|
2.73
|
|
$
|
(0.64
|
)
|
Basic earnings (loss) per share
(5)
|
$
|
2.76
|
|
$
|
5.11
|
|
$
|
4.65
|
|
$
|
2.83
|
|
$
|
(1.39
|
)
|
Diluted earnings (loss) per share
(5)
|
$
|
2.74
|
|
$
|
5.07
|
|
$
|
4.59
|
|
$
|
2.81
|
|
$
|
(1.39
|
)
|
Net debt (cash) to capital
(1)
|
2.8
|
%
|
(5.8
|
)%
|
2.2
|
%
|
(23.0
|
)%
|
(17.9
|
)%
|
|||||
Number of employees at year-end
(6)
|
19,052
|
|
19,769
|
|
20,954
|
|
19,839
|
|
16,667
|
|
|||||
Number of shareholders
(7)
|
52,218
|
|
50,783
|
|
44,238
|
|
39,118
|
|
27,127
|
|
(1)
|
The Company presents net debt (cash) because it believes net debt (cash) is more representative of the Company’s financial position than total debt due to the amount of cash and cash equivalents.
|
(2)
|
Return on equity is defined as income from continuing operations divided by ending shareholders’ equity.
|
(3)
|
Based on average number of employees employed during the year.
|
(4)
|
Based on average number of shares outstanding during the year.
|
(5)
|
Based on average number of shares outstanding during the year and includes discontinued operations for all periods presented.
|
(6)
|
Adjusted to exclude Needle Roller Bearings operations (which was sold to JTEKT in 2009) for all periods.
|
(7)
|
Includes an estimated count of shareholders having common shares held for their accounts by banks, brokers and trustees for benefit plans.
|
•
|
Mobile Industries
provides bearings, power transmission components, engineered chain, lubrication devices and systems, augers and related products and services to OEMs and suppliers of agricultural, construction and mining equipment; passenger cars, light trucks, medium- and heavy-duty trucks; rail cars and locomotives. Aftermarket sales are handled through the Company's extensive network of authorized automotive and heavy truck distributors.
|
•
|
Process Industries
supplies bearings, power transmission components, engineered chains, and related products and services to OEMs and suppliers of power transmission, energy and heavy industrial machinery and equipment. This includes rolling mills, cement and aggregate processing equipment, paper mills, sawmills, printing presses, cranes, hoists, drawbridges, wind energy turbines, gear drives, drilling equipment, coal conveyors, coal crushers, marine equipment and food processing equipment. This segment also supports aftermarket needs through its global network of authorized industrial distributors as well as through its industrial services team, which offers end users a broad portfolio of capabilities that include bearing, gearbox and electric motor repair and services.
|
•
|
Aerospace
provides bearings, helicopter transmission systems, rotor head assemblies, turbine engine components, gears and other precision flight-critical components for commercial and military aviation applications. It also provides aftermarket services, including repair and overhaul of engines, transmissions and fuel controls, as well as aerospace bearing repair and component reconditioning. Additionally, this segment manufactures precision bearings, complex assemblies and sensors for manufacturers of health and critical motion control equipment.
|
•
|
Steel
manufactures alloy steel as well as carbon and micro-alloy steel. Included in its portfolio are SBQ bars and seamless mechanical tubing. In addition, this segment supplies machining and thermal treatment services, as well as manages raw material recycling programs. This segment's metallurgical expertise and unique operational capabilities drive customized, high-value solutions for the mobile, industrial and energy sectors.
|
•
|
Applying its knowledge of metallurgy, friction management and mechanical power transmission to create unique solutions used in demanding applications that create value for its customers. The Company seeks to grow in attractive market sectors, with particular emphasis on those industrial markets that value the reliability and efficiency offered by the Company's products and that create significant aftermarket demand, thereby providing a lifetime of opportunity in both product sales and services.
|
•
|
Differentiating its businesses and its products, offering a broad array of mechanical power transmission components, high-performance steel and related solutions and services. In 2013 the Company announced the opening of its new industrial service center in Raipur, India, which will provide gear drive and bearing repair and upgrade services to meet growing customer demand for Timken industrial services outside the United States. Additionally, the Company expanded its product portfolio, launching new Timken
®
SNT plummer blocks and seals, adding new Timken
®
encoders and designing two new high-performance Timken
®
alloy steels to meet specific needs of the oil and gas industry.
|
•
|
Performing with excellence, delivering exceptional results with a passion for superior execution. The Company drives execution by embracing a continuous improvement culture that is charged with lowering costs, eliminating waste, increasing efficiency, encouraging organizational agility and building greater brand equity. As part of this effort, the Company may also reposition underperforming product lines and segments and divest non-strategic assets.
|
•
|
In the fourth quarter of 2013, the Company implemented a strategy to repatriate approximately $365 million of cash, incurring tax expense of approximately $26 million. The Company repatriated $123 million of cash in January 2014, with the remaining portion expected to be repatriated in future periods.
|
•
|
On September 5, 2013, the Company announced that its Board of Directors had approved a plan to pursue a separation of its steel business from the rest of the Company through a spinoff, creating a new independent, publicly traded steel company, TimkenSteel Corporation. The transaction is expected to be tax-free to shareholders and should be completed in mid-2014, subject to customary regulatory approvals, the receipt of a legal opinion regarding the tax-free nature of the transaction, the execution of intercompany agreements between the Company and the new steel company, final approval of the Company's Board of Directors and other customary matters. One-time transaction costs in connection with the separation of the two companies are expected to be approximately $105 million.
|
•
|
On May 13, 2013, the Company completed the acquisition of Hamilton Gear Ltd., d/b/a Standard Machine (Standard Machine), which provides new gearboxes, gearbox service and repair, open gearing, large gear fabrication, machining and field technical services to end users in Canada and the western United States, for approximately $37.0 million in cash, including cash acquired of approximately $0.1 million that was subject to a post-closing indebtedness adjustment. Based in Saskatoon, Saskatchewan, Canada, Standard Machine employs approximately 125 associates and serves a wide variety of industrial sectors including mining, oil and gas, and pulp and paper. In 2012, Standard Machine reported sales of approximately $31 million. The results for Standard Machine are reported in the Process Industries segment.
|
•
|
On April 11, 2013, the Company completed the acquisition of substantially all of the assets of Smith Services, Inc. (Smith Services), an electric motor repair specialist, for approximately $13.2 million. Based in Princeton, West Virginia and employing approximately 140 associates, Smith Services had 2012 sales of approximately $17 million. The results for Smith Services are reported in the Process Industries segment.
|
•
|
On March 11, 2013, the Company completed the acquisition of Interlube Systems Ltd. (Interlube), which makes and markets automated lubrication delivery systems and related components to end-market sectors, including commercial vehicles, construction, mining, and heavy and general industries, for approximately $14.5 million, including cash acquired of approximately $0.3 million, that was subject to a post-closing indebtedness adjustment. Based in Plymouth, United Kingdom, Interlube employs about 90 associates and had 2012 sales of approximately $13 million. The results of Interlube are reported in the Mobile Industries segment.
|
|
2013
|
2012
|
$ Change
|
% Change
|
|||||||
Net sales
|
$
|
4,341.2
|
|
$
|
4,987.0
|
|
$
|
(645.8
|
)
|
(12.9
|
)%
|
Income from continuing operations
|
263.0
|
|
495.9
|
|
(232.9
|
)
|
(47.0
|
)%
|
|||
Income attributable to noncontrolling interest
|
0.3
|
|
0.4
|
|
(0.1
|
)
|
(25.0
|
)%
|
|||
Net income attributable to The Timken Company
|
$
|
262.7
|
|
$
|
495.5
|
|
$
|
(232.8
|
)
|
(47.0
|
)%
|
Diluted earnings per share
|
$
|
2.74
|
|
$
|
5.07
|
|
$
|
(2.33
|
)
|
(46.0
|
)%
|
Average number of shares—diluted
|
95,823,728
|
|
97,602,481
|
|
—
|
|
(1.8
|
)%
|
|
2013
|
2012
|
$ Change
|
% Change
|
|||||||
(Excludes intersegment sales)
|
|
|
|
|
|||||||
Mobile Industries
|
$
|
1,474.3
|
|
$
|
1,675.0
|
|
$
|
(200.7
|
)
|
(12.0
|
)%
|
Process Industries
|
1,231.7
|
|
1,337.6
|
|
(105.9
|
)
|
(7.9
|
)%
|
|||
Aerospace
|
329.5
|
|
346.9
|
|
(17.4
|
)
|
(5.0
|
)%
|
|||
Steel
|
1,305.7
|
|
1,627.5
|
|
(321.8
|
)
|
(19.8
|
)%
|
|||
Total Company
|
$
|
4,341.2
|
|
$
|
4,987.0
|
|
$
|
(645.8
|
)
|
(12.9
|
)%
|
|
2013
|
2012
|
$ Change
|
Change
|
|||||||
Gross profit
|
$
|
1,092.0
|
|
$
|
1,366.3
|
|
$
|
(274.3
|
)
|
(20.1
|
%)
|
Gross profit % to net sales
|
25.2
|
%
|
27.4
|
%
|
—
|
|
(220
|
) bps
|
|||
Rationalization expenses included in cost of products sold
|
$
|
5.9
|
|
$
|
8.3
|
|
$
|
(2.4
|
)
|
(28.9
|
%)
|
|
2013
|
2012
|
$ Change
|
Change
|
|||||||
Selling, general and administrative expenses
|
$
|
626.6
|
|
$
|
643.9
|
|
$
|
(17.3
|
)
|
(2.7)%
|
|
Selling, general and administrative expenses % to net
sales
|
14.4
|
%
|
12.9
|
%
|
—
|
|
150
|
bps
|
|
2013
|
2012
|
$ Change
|
||||||
Impairment charges
|
$
|
0.7
|
|
$
|
6.6
|
|
$
|
(5.9
|
)
|
Severance and related benefit costs
|
16.3
|
|
18.4
|
|
(2.1
|
)
|
|||
Exit costs
|
(0.6
|
)
|
4.5
|
|
(5.1
|
)
|
|||
Total
|
$
|
16.4
|
|
$
|
29.5
|
|
$
|
(13.1
|
)
|
|
2013
|
2012
|
$ Change
|
||||||
Severance and related benefit costs
|
$
|
5.7
|
|
$
|
—
|
|
$
|
5.7
|
|
Professional fees
|
7.3
|
|
—
|
|
7.3
|
|
|||
Total
|
$
|
13.0
|
|
$
|
—
|
|
$
|
13.0
|
|
|
2013
|
2012
|
$ Change
|
% Change
|
|||||||
Interest (expense)
|
$
|
(24.4
|
)
|
$
|
(31.1
|
)
|
$
|
6.7
|
|
(21.5
|
)%
|
Interest income
|
1.9
|
|
2.9
|
|
(1.0
|
)
|
(34.5
|
)%
|
|
2013
|
2012
|
$ Change
|
% Change
|
|||||||
CDSOA (expense) receipts, net
|
$
|
(2.8
|
)
|
$
|
108.0
|
|
$
|
(110.8
|
)
|
(102.6
|
)%
|
|
|
|
|
|
|||||||
Gain on sale of real estate in Brazil
|
5.4
|
|
—
|
|
5.4
|
|
NM
|
|
|||
Other income (expense), net
|
1.0
|
|
(6.7
|
)
|
7.7
|
|
114.9
|
%
|
|||
Total
|
$
|
6.4
|
|
$
|
(6.7
|
)
|
$
|
13.1
|
|
(195.5
|
)%
|
|
2013
|
2012
|
$ Change
|
Change
|
|||||||
Income tax expense
|
$
|
154.1
|
|
$
|
270.1
|
|
$
|
(116.0
|
)
|
(42.9)%
|
|
Effective tax rate
|
36.9
|
%
|
35.3
|
%
|
—
|
|
160 bps
|
|
|
2013
|
2012
|
$ Change
|
Change
|
|||||||
Net sales, including intersegment sales
|
$
|
1,475.4
|
|
$
|
1,675.5
|
|
$
|
(200.1
|
)
|
(11.9)%
|
|
EBIT
|
$
|
164.7
|
|
$
|
208.1
|
|
$
|
(43.4
|
)
|
(20.9)%
|
|
EBIT margin
|
11.2
|
%
|
12.4
|
%
|
—
|
|
(120) bps
|
|
|||
|
|
|
|
|
|||||||
|
|
|
|
|
|||||||
|
2013
|
2012
|
$ Change
|
% Change
|
|||||||
Net sales, including intersegment sales
|
$
|
1,475.4
|
|
$
|
1,675.5
|
|
$
|
(200.1
|
)
|
(11.9)%
|
|
Less: Acquisitions
|
27.0
|
|
—
|
|
27.0
|
|
NM
|
|
|||
Currency
|
(11.5
|
)
|
—
|
|
(11.5
|
)
|
NM
|
|
|||
Net sales, excluding the impact of acquisitions and currency
|
$
|
1,459.9
|
|
$
|
1,675.5
|
|
$
|
(215.6
|
)
|
(12.9)%
|
|
|
2013
|
2012
|
$ Change
|
Change
|
|||||||
Net sales, including intersegment sales
|
$
|
1,235.6
|
|
$
|
1,343.3
|
|
$
|
(107.7
|
)
|
(8.0)%
|
|
EBIT
|
$
|
201.9
|
|
$
|
274.9
|
|
$
|
(73.0
|
)
|
(26.6)%
|
|
EBIT margin
|
16.3
|
%
|
20.5
|
%
|
—
|
|
(420
|
) bps
|
|||
|
|
|
|
|
|||||||
|
|
|
|
|
|||||||
|
2013
|
2012
|
$ Change
|
% Change
|
|||||||
Net sales, including intersegment sales
|
$
|
1,235.6
|
|
$
|
1,343.3
|
|
$
|
(107.7
|
)
|
(8.0)%
|
|
Less: Acquisitions
|
59.0
|
|
—
|
|
59.0
|
|
NM
|
|
|||
Currency
|
0.7
|
|
—
|
|
0.7
|
|
NM
|
|
|||
Net sales, excluding the impact of acquisitions and currency
|
$
|
1,175.9
|
|
$
|
1,343.3
|
|
$
|
(167.4
|
)
|
(12.5)%
|
|
|
2013
|
2012
|
$ Change
|
Change
|
|||||||
Net sales, including intersegment sales
|
$
|
329.5
|
|
$
|
346.9
|
|
$
|
(17.4
|
)
|
(5.0)%
|
|
EBIT
|
$
|
26.6
|
|
$
|
36.3
|
|
$
|
(9.7
|
)
|
(26.7)%
|
|
EBIT margin
|
8.1
|
%
|
10.5
|
%
|
—
|
|
(240
|
) bps
|
|||
|
2013
|
2012
|
$ Change
|
% Change
|
|||||||
Net sales, including intersegment sales
|
$
|
329.5
|
|
$
|
346.9
|
|
$
|
(17.4
|
)
|
(5.0)%
|
|
Less: Currency
|
0.5
|
|
—
|
|
0.5
|
|
NM
|
|
|||
Net sales, excluding the impact of currency
|
$
|
329.0
|
|
$
|
346.9
|
|
$
|
(17.9
|
)
|
(5.2)%
|
|
|
2013
|
2012
|
$ Change
|
Change
|
|||||||
Net sales, including intersegment sales
|
$
|
1,380.8
|
|
$
|
1,728.7
|
|
$
|
(347.9
|
)
|
(20.1)%
|
|
EBIT
|
$
|
140.2
|
|
$
|
251.8
|
|
$
|
(111.6
|
)
|
(44.3)%
|
|
EBIT margin
|
10.2
|
%
|
14.6
|
%
|
—
|
|
(440
|
) bps
|
|||
|
2013
|
2012
|
$ Change
|
% Change
|
|||||||
Net sales, including intersegment sales
|
$
|
1,380.8
|
|
$
|
1,728.7
|
|
$
|
(347.9
|
)
|
(20.1)%
|
|
Less: Currency
|
1.1
|
|
—
|
|
1.1
|
|
NM
|
|
|||
Net sales, excluding the impact of currency
|
$
|
1,379.7
|
|
$
|
1,728.7
|
|
$
|
(349.0
|
)
|
(20.2)%
|
|
Amounts are shown in whole values
|
2013
|
2012
|
Change
|
% Change
|
|||||||
Scrap index per ton
|
$
|
405
|
|
$
|
429
|
|
$
|
(24
|
)
|
(5.6)%
|
|
Shipments (in tons)
|
919,000
|
|
1,070,000
|
|
(151,000
|
)
|
(14.1)%
|
|
|||
Average selling price per ton, including surcharges
|
$
|
1,503
|
|
$
|
1,615
|
|
$
|
(112
|
)
|
(6.9)%
|
|
|
2013
|
2012
|
$ Change
|
Change
|
|||||||
Corporate expenses
|
$
|
79.7
|
|
$
|
84.4
|
|
$
|
(4.7
|
)
|
(5.6) %
|
|
Corporate expenses % to net sales
|
1.8
|
%
|
1.7
|
%
|
—
|
|
10
|
bps
|
|
2012
|
2011
|
$ Change
|
% Change
|
|||||||
Net sales
|
$
|
4,987.0
|
|
$
|
5,170.2
|
|
$
|
(183.2
|
)
|
(3.5
|
)%
|
Income from continuing operations
|
495.9
|
|
456.6
|
|
39.3
|
|
8.6
|
%
|
|||
Income attributable to noncontrolling interest
|
0.4
|
|
2.3
|
|
(1.9
|
)
|
(82.6
|
)%
|
|||
Net income attributable to The Timken Company
|
$
|
495.5
|
|
$
|
454.3
|
|
$
|
41.2
|
|
9.1
|
%
|
Diluted earnings per share
|
$
|
5.07
|
|
$
|
4.59
|
|
$
|
0.48
|
|
10.5
|
%
|
Average number of shares - diluted
|
97,602,481
|
|
98,655,513
|
|
—
|
|
(1.1
|
)%
|
|
2012
|
2011
|
$ Change
|
% Change
|
|||||||
(Excludes intersegment sales)
|
|
|
|
|
|||||||
Mobile Industries
|
$
|
1,675.0
|
|
$
|
1,768.9
|
|
$
|
(93.9
|
)
|
(5.3
|
)%
|
Process Industries
|
1,337.6
|
|
1,240.5
|
|
97.1
|
|
7.8
|
%
|
|||
Aerospace
|
346.9
|
|
324.1
|
|
22.8
|
|
7.0
|
%
|
|||
Steel
|
1,627.5
|
|
1,836.7
|
|
(209.2
|
)
|
(11.4
|
)%
|
|||
Total Company
|
$
|
4,987.0
|
|
$
|
5,170.2
|
|
$
|
(183.2
|
)
|
(3.5
|
)%
|
|
2012
|
2011
|
$ Change
|
Change
|
|||||||
Gross profit
|
$
|
1,366.3
|
|
$
|
1,369.7
|
|
$
|
(3.4
|
)
|
(0.2) %
|
|
Gross profit % to net sales
|
27.4
|
%
|
26.5
|
%
|
—
|
|
90
|
bps
|
|||
Rationalization expenses included in cost of products sold
|
$
|
8.3
|
|
$
|
6.7
|
|
$
|
1.6
|
|
23.9 %
|
|
|
2012
|
2011
|
$ Change
|
Change
|
|||||||
Selling, general and administrative expenses
|
$
|
643.9
|
|
$
|
626.2
|
|
$
|
17.7
|
|
2.8 %
|
|
Selling, general and administrative expenses % to net sales
|
12.9
|
%
|
12.1
|
%
|
—
|
|
80
|
bps
|
|
2012
|
2011
|
$ Change
|
||||||
Impairment charges
|
$
|
6.6
|
|
$
|
0.5
|
|
$
|
6.1
|
|
Severance and related benefit costs
|
18.4
|
|
0.1
|
|
18.3
|
|
|||
Exit costs
|
4.5
|
|
13.8
|
|
(9.3
|
)
|
|||
Total
|
$
|
29.5
|
|
$
|
14.4
|
|
$
|
15.1
|
|
|
2012
|
2011
|
$ Change
|
% Change
|
|||||||
Interest (expense)
|
$
|
(31.1
|
)
|
$
|
(36.8
|
)
|
$
|
5.7
|
|
(15.5
|
)%
|
Interest income
|
$
|
2.9
|
|
$
|
5.6
|
|
$
|
(2.7
|
)
|
(48.2
|
)%
|
|
2012
|
2011
|
$ Change
|
% Change
|
||||||
CDSOA receipts (expense), net
|
$
|
108.0
|
|
$
|
(1.1
|
)
|
$
|
109.1
|
|
NM
|
Other (expense), net
|
(6.7
|
)
|
—
|
|
(6.7
|
)
|
NM
|
|
2012
|
2011
|
$ Change
|
Change
|
|||||||
Income tax expense
|
$
|
270.1
|
|
$
|
240.2
|
|
$
|
29.9
|
|
12.4 %
|
|
Effective tax rate
|
35.3
|
%
|
34.5
|
%
|
—
|
|
80
|
bps
|
|
2012
|
2011
|
$ Change
|
Change
|
|||||||
Net sales, including intersegment sales
|
$
|
1,675.5
|
|
$
|
1,769.4
|
|
$
|
(93.9
|
)
|
(5.3
|
)%
|
EBIT
|
$
|
208.1
|
|
$
|
261.8
|
|
$
|
(53.7
|
)
|
(20.5
|
)%
|
EBIT margin
|
12.4
|
%
|
14.8
|
%
|
—
|
|
(240) bps
|
|
2012
|
2011
|
$ Change
|
% Change
|
|||||||
Net sales, including intersegment sales
|
$
|
1,675.5
|
|
$
|
1,769.4
|
|
$
|
(93.9
|
)
|
(5.3
|
)%
|
Less: Acquisitions
|
65.4
|
|
—
|
|
65.4
|
|
NM
|
|
|||
Currency
|
(53.5
|
)
|
—
|
|
(53.5
|
)
|
NM
|
|
|||
Net sales, excluding the impact of acquisitions and currency
|
$
|
1,663.6
|
|
$
|
1,769.4
|
|
$
|
(105.8
|
)
|
(6.0
|
)%
|
|
2012
|
2011
|
$ Change
|
Change
|
|||||||
Net sales, including intersegment sales
|
$
|
1,343.3
|
|
$
|
1,244.6
|
|
$
|
98.7
|
|
7.9 %
|
|
EBIT
|
$
|
274.9
|
|
$
|
274.2
|
|
$
|
0.7
|
|
0.3 %
|
|
EBIT margin
|
20.5
|
%
|
22.0
|
%
|
—
|
|
(150
|
) bps
|
|||
|
|
|
|
|
|||||||
|
2012
|
2011
|
$ Change
|
% Change
|
|||||||
Net sales, including intersegment sales
|
$
|
1,343.3
|
|
$
|
1,244.6
|
|
$
|
98.7
|
|
7.9 %
|
|
Less: Acquisitions
|
94.2
|
|
—
|
|
94.2
|
|
NM
|
|
|||
Currency
|
(21.4
|
)
|
—
|
|
(21.4
|
)
|
NM
|
|
|||
Net sales, excluding the impact of acquisitions and currency
|
$
|
1,270.5
|
|
$
|
1,244.6
|
|
$
|
25.9
|
|
2.1 %
|
|
|
2012
|
2011
|
$ Change
|
Change
|
|||||||
Net sales, including intersegment sales
|
$
|
346.9
|
|
$
|
324.1
|
|
$
|
22.8
|
|
7.0 %
|
|
EBIT
|
$
|
36.3
|
|
$
|
5.1
|
|
$
|
31.2
|
|
NM
|
|
EBIT margin
|
10.5
|
%
|
1.6
|
%
|
—
|
|
890
|
bps
|
|||
|
|
|
|
|
|||||||
|
|
|
|
|
|||||||
|
2012
|
2011
|
$ Change
|
% Change
|
|||||||
Net sales, including intersegment sales
|
$
|
346.9
|
|
$
|
324.1
|
|
$
|
22.8
|
|
7.0 %
|
|
Less: Currency
|
(1.1
|
)
|
—
|
|
(1.1
|
)
|
NM
|
|
|||
Net sales, excluding the impact of currency
|
$
|
348.0
|
|
$
|
324.1
|
|
$
|
23.9
|
|
7.4 %
|
|
|
2012
|
2011
|
$ Change
|
Change
|
|||||||
Net sales, including intersegment sales
|
$
|
1,728.7
|
|
$
|
1,956.5
|
|
$
|
(227.8
|
)
|
(11.6) %
|
|
EBIT
|
$
|
251.8
|
|
$
|
267.4
|
|
$
|
(15.6
|
)
|
(5.8) %
|
|
EBIT margin
|
14.6
|
%
|
13.7
|
%
|
—
|
|
90
|
bps
|
|||
|
|
|
|
|
|||||||
|
|
|
|
|
|||||||
|
2012
|
2011
|
$ Change
|
% Change
|
|||||||
Net sales, including intersegment sales
|
$
|
1,728.7
|
|
$
|
1,956.5
|
|
$
|
(227.8
|
)
|
(11.6) %
|
|
Currency
|
(1.0
|
)
|
—
|
|
(1.0
|
)
|
NM
|
|
|||
Net sales, excluding the impact of currency
|
$
|
1,729.7
|
|
$
|
1,956.5
|
|
$
|
(226.8
|
)
|
(11.6) %
|
|
Amounts are shown in whole values
|
2012
|
2011
|
Change
|
% Change
|
|||||||
Scrap index per ton
|
$
|
429
|
|
$
|
485
|
|
$
|
(56
|
)
|
(11.5)%
|
|
Shipments (in tons)
|
1,070,000
|
|
1,286,000
|
|
(216,000
|
)
|
(16.8)%
|
|
|||
Average selling price per ton, including
surcharges
|
$
|
1,615
|
|
$
|
1,522
|
|
$
|
93
|
|
6.1%
|
|
|
2012
|
2011
|
$ Change
|
Change
|
|||||||
Corporate expenses
|
$
|
84.4
|
|
$
|
80.8
|
|
$
|
3.6
|
|
4.5%
|
|
Corporate expenses % to net sales
|
1.7
|
%
|
1.6
|
%
|
—
|
|
10
|
bps
|
|
December 31,
|
|
|
||||||||
|
2013
|
2012
|
$ Change
|
% Change
|
|||||||
Cash and cash equivalents
|
$
|
384.6
|
|
$
|
586.4
|
|
(201.8
|
)
|
(34.4
|
)%
|
|
Restricted cash
|
15.1
|
|
15.1
|
|
—
|
|
NM
|
|
|||
Accounts receivable, net
|
566.7
|
|
546.7
|
|
20.0
|
|
3.7
|
%
|
|||
Inventories, net
|
809.9
|
|
862.1
|
|
(52.2
|
)
|
(6.1
|
)%
|
|||
Deferred income taxes
|
69.8
|
|
86.5
|
|
(16.7
|
)
|
(19.3
|
)%
|
|||
Deferred charges and prepaid expenses
|
27.6
|
|
12.6
|
|
15.0
|
|
119.0
|
%
|
|||
Other current assets
|
63.8
|
|
52.6
|
|
11.2
|
|
21.3
|
%
|
|||
Total current assets
|
$
|
1,937.5
|
|
$
|
2,162.0
|
|
$
|
(224.5
|
)
|
(10.4
|
)%
|
|
December 31,
|
|
|
||||||||
|
2013
|
2012
|
$ Change
|
% Change
|
|||||||
Property, plant and equipment
|
$
|
4,078.1
|
|
$
|
3,792.1
|
|
$
|
286.0
|
|
7.5
|
%
|
Less: allowances for depreciation
|
(2,520.0
|
)
|
(2,386.8
|
)
|
(133.2
|
)
|
(5.6
|
)%
|
|||
Property, plant and equipment, net
|
$
|
1,558.1
|
|
$
|
1,405.3
|
|
$
|
152.8
|
|
10.9
|
%
|
|
December 31,
|
|
|
||||||||
|
2013
|
2012
|
$ Change
|
% Change
|
|||||||
Goodwill
|
$
|
358.7
|
|
$
|
338.9
|
|
$
|
19.8
|
|
5.8
|
%
|
Non-current pension assets
|
342.6
|
|
0.2
|
|
342.4
|
|
NM
|
|
|||
Other intangible assets
|
219.1
|
|
224.7
|
|
(5.6
|
)
|
(2.5
|
)%
|
|||
Deferred income taxes
|
10.1
|
|
74.1
|
|
(64.0
|
)
|
(86.4
|
)%
|
|||
Other non-current assets
|
51.8
|
|
39.0
|
|
12.8
|
|
32.8
|
%
|
|||
Total other assets
|
$
|
982.3
|
|
$
|
676.9
|
|
$
|
305.4
|
|
45.1
|
%
|
|
December 31,
|
|
|
||||||||
|
2013
|
2012
|
$ Change
|
% Change
|
|||||||
Short-term debt
|
$
|
18.6
|
|
$
|
14.3
|
|
$
|
4.3
|
|
30.1
|
%
|
Accounts payable
|
222.5
|
|
216.2
|
|
6.3
|
|
2.9
|
%
|
|||
Salaries, wages and benefits
|
183.1
|
|
213.9
|
|
(30.8
|
)
|
(14.4
|
)%
|
|||
Income taxes payable
|
107.1
|
|
33.5
|
|
73.6
|
|
219.7
|
%
|
|||
Deferred income taxes
|
7.6
|
|
2.8
|
|
4.8
|
|
171.4
|
%
|
|||
Other current liabilities
|
190.5
|
|
177.5
|
|
13.0
|
|
7.3
|
%
|
|||
Current portion of long-term debt
|
250.7
|
|
9.6
|
|
241.1
|
|
2,511.5
|
%
|
|||
Total current liabilities
|
$
|
980.1
|
|
$
|
667.8
|
|
$
|
312.3
|
|
46.8
|
%
|
|
December 31,
|
|
|
||||||||
|
2013
|
2012
|
$ Change
|
% Change
|
|||||||
Long-term debt
|
$
|
206.6
|
|
$
|
455.1
|
|
$
|
(248.5
|
)
|
(54.6
|
)%
|
Accrued pension cost
|
179.0
|
|
391.4
|
|
(212.4
|
)
|
(54.3
|
)%
|
|||
Accrued postretirement benefits cost
|
233.9
|
|
371.8
|
|
(137.9
|
)
|
(37.1
|
)%
|
|||
Deferred income taxes
|
166.9
|
|
4.5
|
|
162.4
|
|
NM
|
|
|||
Other non-current liabilities
|
62.8
|
|
107.0
|
|
(44.2
|
)
|
(41.3
|
)%
|
|||
Total non-current liabilities
|
$
|
849.2
|
|
$
|
1,329.8
|
|
$
|
(480.6
|
)
|
(36.1
|
)%
|
|
December 31,
|
|
|
||||||||
|
2013
|
2012
|
$ Change
|
% Change
|
|||||||
Common stock
|
$
|
949.5
|
|
$
|
944.5
|
|
$
|
5.0
|
|
0.5
|
%
|
Earnings invested in the business
|
2,586.4
|
|
2,411.2
|
|
175.2
|
|
7.3
|
%
|
|||
Accumulated other comprehensive loss
|
(626.1
|
)
|
(1,013.2
|
)
|
387.1
|
|
(38.2
|
)%
|
|||
Treasury shares
|
(273.2
|
)
|
(110.3
|
)
|
(162.9
|
)
|
(147.7
|
)%
|
|||
Noncontrolling interest
|
12.0
|
|
14.4
|
|
(2.4
|
)
|
(16.7
|
)%
|
|||
Total equity
|
$
|
2,648.6
|
|
$
|
2,246.6
|
|
$
|
402.0
|
|
17.9
|
%
|
|
2013
|
2012
|
$ Change
|
||||||
Net cash provided by operating activities
|
$
|
430.0
|
|
$
|
624.1
|
|
$
|
(194.1
|
)
|
Net cash used by investing activities
|
(376.0
|
)
|
(297.7
|
)
|
(78.3
|
)
|
|||
Net cash used by financing activities
|
(249.3
|
)
|
(208.6
|
)
|
(40.7
|
)
|
|||
Effect of exchange rate changes on cash
|
(6.5
|
)
|
3.8
|
|
(10.3
|
)
|
|||
(Decrease) increase in cash and cash equivalents
|
$
|
(201.8
|
)
|
$
|
121.6
|
|
$
|
(323.4
|
)
|
|
2013
|
2012
|
||||
Cash Provided (Used):
|
|
|
||||
Accounts receivable
|
$
|
(13.4
|
)
|
$
|
103.0
|
|
Inventories
|
62.5
|
|
102.5
|
|
||
Trade accounts payable
|
3.5
|
|
(73.2
|
)
|
||
Other accrued expenses
|
(38.5
|
)
|
(54.0
|
)
|
|
December 31,
|
|||||
|
2013
|
2012
|
||||
Short-term debt
|
$
|
18.6
|
|
$
|
14.3
|
|
Current portion of long-term debt
|
250.7
|
|
9.6
|
|
||
Long-term debt
|
206.6
|
|
455.1
|
|
||
Total debt
|
$
|
475.9
|
|
$
|
479.0
|
|
Less: Cash and cash equivalents
|
384.6
|
|
586.4
|
|
||
Restricted cash
|
15.1
|
|
15.1
|
|
||
Net debt (cash)
|
$
|
76.2
|
|
$
|
(122.5
|
)
|
|
December 31,
|
|||||
|
2013
|
2012
|
||||
Net debt (cash)
|
$
|
76.2
|
|
$
|
(122.5
|
)
|
Total equity
|
2,648.6
|
|
2,246.6
|
|
||
Capital (net debt (cash) + total equity)
|
$
|
2,724.8
|
|
$
|
2,124.1
|
|
Ratio of net debt (cash) to capital
|
2.8
|
%
|
(5.8
|
)%
|
Contractual Obligations
|
Total
|
Less than
1 Year
|
1-3 Years
|
3-5 Years
|
More than
5 Years
|
||||||||||
Interest payments
|
$
|
165.9
|
|
$
|
20.2
|
|
$
|
24.1
|
|
$
|
21.9
|
|
$
|
99.7
|
|
Long-term debt, including current portion
|
457.3
|
|
250.7
|
|
16.4
|
|
5.0
|
|
185.2
|
|
|||||
Short-term debt
|
18.6
|
|
18.6
|
|
—
|
|
—
|
|
—
|
|
|||||
Operating leases
|
125.7
|
|
37.9
|
|
52.5
|
|
22.7
|
|
12.6
|
|
|||||
Purchase commitments
|
121.3
|
|
93.1
|
|
25.8
|
|
2.4
|
|
—
|
|
|||||
Retirement benefits
|
2,689.8
|
|
284.3
|
|
574.1
|
|
546.1
|
|
1,285.3
|
|
|||||
Total
|
$
|
3,578.6
|
|
$
|
704.8
|
|
$
|
692.9
|
|
$
|
598.1
|
|
$
|
1,582.8
|
|
Net actuarial losses at December 31, 2007
|
|
|
$
|
500.1
|
|
||
|
|
|
|
||||
Plus/minus actuarial gains and losses recognized:
|
|
|
|
||||
Net actuarial losses recognized in 2008
|
|
$
|
743.5
|
|
|
||
Net actuarial gains recognized in 2009
|
|
(90.7
|
)
|
|
|||
Net actuarial gains recognized in 2010
|
|
(51.1
|
)
|
|
|||
Net actuarial losses recognized in 2011
|
|
404.6
|
|
|
|||
Net actuarial losses recognized in 2012
|
|
263.1
|
|
|
|||
Net actuarial gains recognized in 2013
|
|
(376.3
|
)
|
|
|||
|
|
|
893.1
|
|
|||
Minus amortization of net actuarial losses:
|
|
|
|
||||
Amortization of net actuarial losses in 2008
|
|
$
|
(29.6
|
)
|
|
||
Amortization of net actuarial losses in 2009
|
|
(35.8
|
)
|
|
|||
Amortization of net actuarial losses in 2010
|
|
(51.9
|
)
|
|
|||
Amortization of net actuarial losses in 2011
|
|
(56.0
|
)
|
|
|||
Amortization of net actuarial losses in 2012
|
|
(83.3
|
)
|
|
|||
Amortization of net actuarial losses in 2013
|
|
(116.8
|
)
|
|
|||
|
|
|
(373.4
|
)
|
|||
Curtailment loss recognized in 2012
|
|
|
(9.5
|
)
|
|||
Settlement loss recognized in 2013
|
|
|
(7.2
|
)
|
|||
Foreign Currency Impact
|
|
|
(14.0
|
)
|
|||
Net actuarial losses at December 31, 2013
|
|
|
$
|
989.1
|
|
|
|
|
|
+ / - Change at December 31, 2014
|
||||||||||
|
|
Change
|
|
PBO
|
|
Equity
|
|
2014 Expense
|
||||||
Assumption:
|
|
|
|
|
|
|
|
|
||||||
Discount rate
|
|
+/- 0.25%
|
|
$
|
74.3
|
|
|
$
|
74.3
|
|
|
$
|
5.3
|
|
Actual return on plan assets
|
|
+/- 0.25%
|
|
N/A
|
|
|
6.7
|
|
|
0.2
|
|
|||
Expected return on assets
|
|
+/- 0.25%
|
|
N/A
|
|
|
N/A
|
|
|
6.6
|
|
|
|
|
|
+ / - Change at December 31, 2014
|
||||||||||
|
|
Change
|
|
ABO
|
|
Equity
|
|
2014 Expense
|
||||||
Assumption:
|
|
|
|
|
|
|
|
|
||||||
Discount rate
|
|
+/- 0.25%
|
|
$
|
13.0
|
|
|
$
|
13.0
|
|
|
$
|
0.5
|
|
Actual return on plan assets
|
|
+/- 0.25%
|
|
N/A
|
|
|
0.6
|
|
|
—
|
|
|||
Expected return on assets
|
|
+/- 0.25%
|
|
N/A
|
|
|
N/A
|
|
|
0.6
|
|
(a)
|
deterioration in world economic conditions, or in economic conditions in any of the geographic regions in which the Company conducts business, including additional adverse effects from the 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 conduct business, and changes in currency valuations;
|
(b)
|
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 bankruptcies or liquidations, the impact of changes in industrial business cycles, and whether conditions of fair trade continue in the U.S. markets;
|
(c)
|
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;
|
(d)
|
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 of raw materials and energy; the Company’s ability to mitigate the impact of fluctuations in raw materials and energy costs and the operation of the Company’s surcharge mechanism; changes in the expected costs associated with product warranty claims; changes resulting from inventory management and cost reduction initiatives and different levels of customer demands; the effects of unplanned work stoppages; and changes in the cost of labor and benefits;
|
(e)
|
the success of the Company’s operating plans, announced programs, initiatives and capital investments; the ability to integrate acquired companies; the ability of acquired companies to achieve satisfactory operating results, including results being accretive to earnings; and the Company’s ability to maintain appropriate relations with unions that represent Company associates in certain locations in order to avoid disruptions of business;
|
(f)
|
unanticipated litigation, claims or assessments. This includes: claims or problems related to intellectual property, product liability or warranty, environmental issues, and taxes;
|
(g)
|
changes in worldwide financial markets, including availability of financing and interest rates, which affect: the Company’s cost of funds and/or ability to raise capital; the Company’s pension obligations and investment performance; and/or customer demand and the ability of customers to obtain financing to purchase the Company’s products or equipment that contain the Company’s products;
|
(h)
|
retention of CDSOA distributions;
|
(i)
|
the taxable nature of the previously announced plan to pursue a spinoff of the Company's steel business and the Company's ability to successfully complete such spinoff; and
|
(j)
|
those items identified under Item 1A. Risk Factors on pages
7
through
14
.
|
Consolidated Statements of Income
|
|||||||||
|
Year Ended December 31,
|
||||||||
|
2013
|
2012
|
2011
|
||||||
(Dollars in millions, except per share data)
|
|
|
|
||||||
Net sales
|
$
|
4,341.2
|
|
$
|
4,987.0
|
|
$
|
5,170.2
|
|
Cost of products sold
|
3,249.2
|
|
3,620.7
|
|
3,800.5
|
|
|||
Gross Profit
|
1,092.0
|
|
1,366.3
|
|
1,369.7
|
|
|||
Selling, general and administrative expenses
|
626.6
|
|
643.9
|
|
626.2
|
|
|||
Impairment and restructuring charges
|
16.4
|
|
29.5
|
|
14.4
|
|
|||
Separation costs
|
13.0
|
|
—
|
|
—
|
|
|||
Operating Income
|
436.0
|
|
692.9
|
|
729.1
|
|
|||
Interest expense
|
(24.4
|
)
|
(31.1
|
)
|
(36.8
|
)
|
|||
Interest income
|
1.9
|
|
2.9
|
|
5.6
|
|
|||
Continued Dumping and Subsidy Offset Act (expenses) receipts, net
|
(2.8
|
)
|
108.0
|
|
(1.1
|
)
|
|||
Other income (expense), net
|
6.4
|
|
(6.7
|
)
|
—
|
|
|||
Income Before Income Taxes
|
417.1
|
|
766.0
|
|
696.8
|
|
|||
Provision for income taxes
|
154.1
|
|
270.1
|
|
240.2
|
|
|||
Net Income
|
263.0
|
|
495.9
|
|
456.6
|
|
|||
Less: Net income attributable to noncontrolling interest
|
0.3
|
|
0.4
|
|
2.3
|
|
|||
Net Income Attributable to The Timken Company
|
$
|
262.7
|
|
$
|
495.5
|
|
$
|
454.3
|
|
|
|
|
|
||||||
Net Income per Common Share Attributable to The Timken Company
Common Shareholders
|
|
|
|
||||||
Basic earnings per share
|
$
|
2.76
|
|
$
|
5.11
|
|
$
|
4.65
|
|
|
|
|
|
||||||
Diluted earnings per share
|
$
|
2.74
|
|
$
|
5.07
|
|
$
|
4.59
|
|
|
|
|
|
||||||
Dividends per share
|
$
|
0.92
|
|
$
|
0.92
|
|
$
|
0.78
|
|
Consolidated Statements of Comprehensive Income
|
|||||||||
|
Year Ended December 31,
|
||||||||
|
2013
|
2012
|
2011
|
||||||
(Dollars in millions)
|
|
|
|
||||||
Net Income
|
$
|
263.0
|
|
$
|
495.9
|
|
$
|
456.6
|
|
Other comprehensive income, net of tax:
|
|
|
|
||||||
Foreign currency translation adjustments
|
(19.0
|
)
|
10.5
|
|
(48.5
|
)
|
|||
Unrealized (loss) gain on marketable securities
|
—
|
|
(0.8
|
)
|
0.7
|
|
|||
Pension and postretirement liability adjustment
|
398.3
|
|
(133.2
|
)
|
(218.1
|
)
|
|||
Change in fair value of derivative financial instruments
|
0.3
|
|
(0.4
|
)
|
1.3
|
|
|||
Other comprehensive income, net of tax
|
379.6
|
|
(123.9
|
)
|
(264.6
|
)
|
|||
Comprehensive Income, net of tax
|
642.6
|
|
372.0
|
|
192.0
|
|
|||
Less: comprehensive income attributable to noncontrolling interest
|
(7.2
|
)
|
0.2
|
|
2.5
|
|
|||
Comprehensive Income Attributable to The Timken Company
|
$
|
649.8
|
|
$
|
371.8
|
|
$
|
189.5
|
|
Consolidated Balance Sheets
|
||||||
|
December 31,
|
|||||
|
2013
|
2012
|
||||
(Dollars in millions)
|
|
|
||||
ASSETS
|
|
|
||||
Current Assets
|
|
|
||||
Cash and cash equivalents
|
$
|
384.6
|
|
$
|
586.4
|
|
Restricted cash
|
15.1
|
|
15.1
|
|
||
Accounts receivable, less allowances (2013 - $10.3 million; 2012 - $12.1 million)
|
566.7
|
|
546.7
|
|
||
Inventories, net
|
809.9
|
|
862.1
|
|
||
Deferred income taxes
|
69.8
|
|
86.5
|
|
||
Deferred charges and prepaid expenses
|
27.6
|
|
12.6
|
|
||
Other current assets
|
63.8
|
|
52.6
|
|
||
Total Current Assets
|
1,937.5
|
|
2,162.0
|
|
||
Property, Plant and Equipment, Net
|
1,558.1
|
|
1,405.3
|
|
||
Other Assets
|
|
|
||||
Goodwill
|
358.7
|
|
338.9
|
|
||
Non-current pension assets
|
342.6
|
|
0.2
|
|
||
Other intangible assets
|
219.1
|
|
224.7
|
|
||
Deferred income taxes
|
10.1
|
|
74.1
|
|
||
Other non-current assets
|
51.8
|
|
39.0
|
|
||
Total Other Assets
|
982.3
|
|
676.9
|
|
||
Total Assets
|
$
|
4,477.9
|
|
$
|
4,244.2
|
|
LIABILITIES AND EQUITY
|
|
|
||||
Current Liabilities
|
|
|
||||
Short-term debt
|
$
|
18.6
|
|
$
|
14.3
|
|
Accounts payable, trade
|
222.5
|
|
216.2
|
|
||
Salaries, wages and benefits
|
183.1
|
|
213.9
|
|
||
Income taxes payable
|
107.1
|
|
33.5
|
|
||
Deferred income taxes
|
7.6
|
|
2.8
|
|
||
Other current liabilities
|
190.5
|
|
177.5
|
|
||
Current portion of long-term debt
|
250.7
|
|
9.6
|
|
||
Total Current Liabilities
|
980.1
|
|
667.8
|
|
||
Non-Current Liabilities
|
|
|
||||
Long-term debt
|
206.6
|
|
455.1
|
|
||
Accrued pension cost
|
179.0
|
|
391.4
|
|
||
Accrued postretirement benefits cost
|
233.9
|
|
371.8
|
|
||
Deferred income taxes
|
166.9
|
|
4.5
|
|
||
Other non-current liabilities
|
62.8
|
|
107.0
|
|
||
Total Non-Current Liabilities
|
849.2
|
|
1,329.8
|
|
||
Shareholders’ Equity
|
|
|
||||
Class I and II Serial Preferred Stock without par value:
|
|
|
||||
Authorized - 10,000,000 shares each class, none issued
|
—
|
|
—
|
|
||
Common stock without par value:
|
|
|
||||
Authorized - 200,000,000 shares
|
|
|
||||
Issued (including shares in treasury) (2013 - 98,375,135; 2012 - 98,375,135 shares)
|
|
|
||||
Stated capital
|
53.1
|
|
53.1
|
|
||
Other paid-in capital
|
896.4
|
|
891.4
|
|
||
Earnings invested in the business
|
2,586.4
|
|
2,411.2
|
|
||
Accumulated other comprehensive loss
|
(626.1
|
)
|
(1,013.2
|
)
|
||
Treasury shares at cost (2013 - 5,252,441; 2012 - 2,476,921 shares)
|
(273.2
|
)
|
(110.3
|
)
|
||
Total Shareholders’ Equity
|
2,636.6
|
|
2,232.2
|
|
||
Noncontrolling interest
|
12.0
|
|
14.4
|
|
||
Total Equity
|
2,648.6
|
|
2,246.6
|
|
||
Total Liabilities and Equity
|
$
|
4,477.9
|
|
$
|
4,244.2
|
|
Consolidated Statements of Cash Flows
|
|||||||||
|
Year Ended December 31,
|
||||||||
|
2013
|
2012
|
2011
|
||||||
(Dollars in millions)
|
|
|
|
||||||
CASH PROVIDED (USED)
|
|
|
|
||||||
Operating Activities
|
|
|
|
||||||
Net income attributable to The Timken Company
|
$
|
262.7
|
|
$
|
495.5
|
|
$
|
454.3
|
|
Net income attributable to noncontrolling interest
|
0.3
|
|
0.4
|
|
2.3
|
|
|||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||||
Depreciation and amortization
|
194.6
|
|
198.0
|
|
192.5
|
|
|||
Impairment charges
|
0.7
|
|
6.6
|
|
3.3
|
|
|||
Loss on sale of assets
|
1.9
|
|
5.8
|
|
0.6
|
|
|||
Deferred income tax provision
|
0.5
|
|
123.1
|
|
124.5
|
|
|||
Stock-based compensation expense
|
18.6
|
|
18.0
|
|
16.9
|
|
|||
Excess tax benefits related to stock-based compensation
|
(10.9
|
)
|
(9.9
|
)
|
(9.5
|
)
|
|||
Pension and other postretirement expense
|
85.3
|
|
91.5
|
|
74.9
|
|
|||
Pension and other postretirement benefit contributions and payments
|
(158.0
|
)
|
(412.7
|
)
|
(456.0
|
)
|
|||
Changes in operating assets and liabilities:
|
|
|
|
||||||
Accounts receivable
|
(13.4
|
)
|
103.0
|
|
(111.6
|
)
|
|||
Inventories
|
62.5
|
|
102.5
|
|
(125.6
|
)
|
|||
Accounts payable, trade
|
3.5
|
|
(73.2
|
)
|
14.9
|
|
|||
Other accrued expenses
|
(38.5
|
)
|
(54.0
|
)
|
29.1
|
|
|||
Income taxes
|
34.3
|
|
21.7
|
|
9.2
|
|
|||
Other, net
|
(14.1
|
)
|
7.8
|
|
(10.4
|
)
|
|||
Net Cash Provided by Operating Activities
|
430.0
|
|
624.1
|
|
209.4
|
|
|||
Investing Activities
|
|
|
|
||||||
Capital expenditures
|
(325.8
|
)
|
(297.2
|
)
|
(205.3
|
)
|
|||
Acquisitions, net of cash acquired of $0.4 million in 2013
|
(64.2
|
)
|
(20.7
|
)
|
(292.1
|
)
|
|||
Proceeds from disposals of property, plant and equipment
|
7.3
|
|
2.0
|
|
5.7
|
|
|||
Divestitures, net of cash divested of $0.9 million in 2012
|
—
|
|
1.2
|
|
4.8
|
|
|||
Investments in short-term marketable securities, net
|
5.5
|
|
14.3
|
|
(22.7
|
)
|
|||
Other
|
1.2
|
|
2.7
|
|
1.6
|
|
|||
Net Cash Used by Investing Activities
|
(376.0
|
)
|
(297.7
|
)
|
(508.0
|
)
|
|||
Financing Activities
|
|
|
|
||||||
Cash dividends paid to shareholders
|
(87.5
|
)
|
(89.0
|
)
|
(76.0
|
)
|
|||
Purchase of treasury shares
|
(189.2
|
)
|
(112.3
|
)
|
(43.8
|
)
|
|||
Proceeds from exercise of stock options
|
13.1
|
|
13.8
|
|
16.6
|
|
|||
Excess tax benefits related to stock-based compensation
|
10.9
|
|
9.9
|
|
9.5
|
|
|||
Proceeds from issuance of long-term debt
|
1.9
|
|
—
|
|
9.5
|
|
|||
Deferred financing costs
|
—
|
|
—
|
|
(3.0
|
)
|
|||
Payments on long-term debt
|
(9.9
|
)
|
(26.9
|
)
|
(8.9
|
)
|
|||
Short-term debt activity, net
|
4.8
|
|
(7.7
|
)
|
1.0
|
|
|||
Decrease (increase) in restricted cash
|
—
|
|
3.6
|
|
(3.6
|
)
|
|||
Other
|
6.6
|
|
—
|
|
(5.6
|
)
|
|||
Net Cash Used by Financing Activities
|
(249.3
|
)
|
(208.6
|
)
|
(104.3
|
)
|
|||
Effect of exchange rate changes on cash
|
(6.5
|
)
|
3.8
|
|
(9.4
|
)
|
|||
(Decrease) Increase In Cash and Cash Equivalents
|
(201.8
|
)
|
121.6
|
|
(412.3
|
)
|
|||
Cash and cash equivalents at beginning of year
|
586.4
|
|
464.8
|
|
877.1
|
|
|||
Cash and Cash Equivalents at End of Year
|
$
|
384.6
|
|
$
|
586.4
|
|
$
|
464.8
|
|
Consolidated Statements of Shareholders’ Equity
|
|||||||||||||||||||||
|
|
The Timken Company Shareholders
|
|
||||||||||||||||||
|
Total
|
Stated
Capital
|
Other
Paid-In
Capital
|
Earnings
Invested
in the
Business
|
Accumulated
Other
Comprehensive
Income (Loss)
|
Treasury
Stock
|
Non-
controlling
Interest
|
||||||||||||||
(Dollars in millions, except per share data)
|
|
|
|
|
|
|
|
||||||||||||||
Year Ended December 31, 2011
|
|
|
|
|
|
|
|
||||||||||||||
Balance at January 1, 2011
|
$
|
1,941.8
|
|
53.1
|
|
881.7
|
|
1,626.4
|
|
(624.7
|
)
|
(11.5
|
)
|
16.8
|
|
||||||
Net income
|
456.6
|
|
|
|
454.3
|
|
|
|
2.3
|
|
|||||||||||
Foreign currency translation adjustments
|
(48.5
|
)
|
|
|
|
(48.5
|
)
|
|
|
||||||||||||
Pension and postretirement liability adjustment
(net of income tax of $130.1 million)
|
(218.1
|
)
|
|
|
|
(218.2
|
)
|
|
0.1
|
|
|||||||||||
Unrealized loss on marketable securities
|
0.7
|
|
|
|
|
0.6
|
|
|
0.1
|
|
|||||||||||
Change in fair value of derivative financial
instruments, net of reclassifications
|
1.3
|
|
|
|
|
1.3
|
|
|
|
||||||||||||
Change in ownership of noncontrolling interest
|
(0.5
|
)
|
|
(0.5
|
)
|
|
|
|
|
||||||||||||
Dividends declared to noncontrolling interest
|
(5.1
|
)
|
|
|
|
|
|
(5.1
|
)
|
||||||||||||
Dividends – $0.78 per share
|
(76.0
|
)
|
|
|
(76.0
|
)
|
|
|
|
||||||||||||
Excess tax benefit from stock compensation
|
9.5
|
|
|
9.5
|
|
|
|
|
|
||||||||||||
Stock-based compensation expense
|
16.9
|
|
|
16.9
|
|
|
|
|
|
||||||||||||
Stock purchased at cost
|
(43.8
|
)
|
|
|
|
|
(43.8
|
)
|
|
||||||||||||
Stock option exercise activity
|
16.6
|
|
|
(17.5
|
)
|
|
|
34.1
|
|
|
|||||||||||
Restricted shares (issued) surrendered
|
(0.3
|
)
|
|
(0.9
|
)
|
|
|
0.6
|
|
|
|||||||||||
Shares surrendered for taxes
|
(8.6
|
)
|
|
|
|
|
(8.6
|
)
|
|
||||||||||||
Balance at December 31, 2011
|
$
|
2,042.5
|
|
$
|
53.1
|
|
$
|
889.2
|
|
$
|
2,004.7
|
|
$
|
(889.5
|
)
|
$
|
(29.2
|
)
|
$
|
14.2
|
|
Year Ended December 31, 2012
|
|
|
|
|
|
|
|
||||||||||||||
Net income
|
495.9
|
|
|
|
495.5
|
|
|
|
0.4
|
|
|||||||||||
Foreign currency translation adjustments
|
10.5
|
|
|
|
|
10.5
|
|
|
|
||||||||||||
Pension and postretirement liability adjustment
(net of income tax of $55.3 million)
|
(133.2
|
)
|
|
|
|
(133.2
|
)
|
|
|
|
|||||||||||
Unrealized gain on marketable securities
|
(0.8
|
)
|
|
|
|
(0.6
|
)
|
|
(0.2
|
)
|
|||||||||||
Change in fair value of derivative financial
instruments, net of reclassifications
|
(0.4
|
)
|
|
|
|
(0.4
|
)
|
|
|
||||||||||||
Dividends – $0.92 per share
|
(89.0
|
)
|
|
|
(89.0
|
)
|
|
|
|
||||||||||||
Excess tax benefit from stock compensation
|
9.9
|
|
|
9.9
|
|
|
|
|
|
||||||||||||
Stock-based compensation expense
|
18.0
|
|
|
18.0
|
|
|
|
|
|
||||||||||||
Stock purchased at cost
|
(112.3
|
)
|
|
|
|
|
(112.3
|
)
|
|
||||||||||||
Stock option exercise activity
|
13.4
|
|
|
(21.9
|
)
|
|
|
35.3
|
|
|
|||||||||||
Restricted shares (issued) surrendered
|
0.2
|
|
|
(3.8
|
)
|
|
|
4.0
|
|
|
|||||||||||
Shares surrendered for taxes
|
(8.1
|
)
|
|
|
|
|
(8.1
|
)
|
|
||||||||||||
Balance at December 31, 2012
|
$
|
2,246.6
|
|
$
|
53.1
|
|
$
|
891.4
|
|
$
|
2,411.2
|
|
$
|
(1,013.2
|
)
|
$
|
(110.3
|
)
|
$
|
14.4
|
|
Year Ended December 31, 2013
|
|
|
|
|
|
|
|
||||||||||||||
Net income
|
263.0
|
|
|
|
262.7
|
|
|
|
0.3
|
|
|||||||||||
Foreign currency translation adjustments
|
(19.0
|
)
|
|
|
|
(11.5
|
)
|
|
(7.5
|
)
|
|||||||||||
Pension and postretirement liability adjustment
(net of income tax of $226.5 million)
|
398.3
|
|
|
|
|
398.3
|
|
|
|
|
|||||||||||
Change in fair value of derivative financial
instruments, net of reclassifications
|
0.3
|
|
|
|
|
0.3
|
|
|
|
||||||||||||
Change in ownership of noncontrolling interest
|
8.9
|
|
|
1.3
|
|
|
|
|
7.6
|
|
|||||||||||
Dividends declared to noncontrolling interest
|
(2.8
|
)
|
|
|
|
|
|
(2.8
|
)
|
||||||||||||
Dividends – $0.92 per share
|
(87.5
|
)
|
|
|
(87.5
|
)
|
|
|
|
||||||||||||
Excess tax benefit from stock compensation
|
10.9
|
|
|
10.9
|
|
|
|
|
|
||||||||||||
Stock-based compensation expense
|
18.6
|
|
|
18.6
|
|
|
|
|
|
||||||||||||
Stock purchased at cost
|
(189.2
|
)
|
|
|
|
|
(189.2
|
)
|
|
||||||||||||
Stock option exercise activity
|
7.8
|
|
|
(22.0
|
)
|
|
|
29.8
|
|
|
|||||||||||
Restricted shares (issued) surrendered
|
1.0
|
|
|
(3.8
|
)
|
|
|
4.8
|
|
|
|||||||||||
Shares surrendered for taxes
|
(8.3
|
)
|
|
|
|
|
(8.3
|
)
|
|
||||||||||||
Balance at December 31, 2013
|
$
|
2,648.6
|
|
$
|
53.1
|
|
$
|
896.4
|
|
$
|
2,586.4
|
|
$
|
(626.1
|
)
|
$
|
(273.2
|
)
|
$
|
12.0
|
|
|
2013
|
2012
|
2011
|
||||||
Assets:
|
|
|
|
||||||
Accounts receivable, net
|
$
|
10.6
|
|
$
|
4.7
|
|
$
|
25.6
|
|
Inventories, net
|
12.7
|
|
2.3
|
|
23.6
|
|
|||
Deferred charges and prepaid expenses
|
0.3
|
|
0.1
|
|
0.9
|
|
|||
Other current assets
|
0.1
|
|
0.2
|
|
0.1
|
|
|||
Property, plant and equipment, net
|
19.5
|
|
3.0
|
|
32.1
|
|
|||
Goodwill
|
18.1
|
|
7.1
|
|
83.3
|
|
|||
Other intangible assets
|
13.0
|
|
7.7
|
|
146.9
|
|
|||
Other non-current assets
|
—
|
|
—
|
|
0.6
|
|
|||
Total assets acquired
|
$
|
74.3
|
|
$
|
25.1
|
|
$
|
313.1
|
|
Liabilities:
|
|
|
|
||||||
Accounts payable, trade
|
$
|
3.3
|
|
$
|
2.3
|
|
$
|
10.7
|
|
Salaries, wages and benefits
|
1.4
|
|
0.3
|
|
5.1
|
|
|||
Other current liabilities
|
0.9
|
|
1.8
|
|
5.2
|
|
|||
Other non-current liabilities
|
4.5
|
|
—
|
|
—
|
|
|||
Total liabilities assumed
|
$
|
10.1
|
|
$
|
4.4
|
|
$
|
21.0
|
|
Net assets acquired
|
$
|
64.2
|
|
$
|
20.7
|
|
$
|
292.1
|
|
|
Purchase
Price Allocation
|
|||
|
|
Weighted-
Average Life
|
||
Trade name
|
$
|
1.1
|
|
13 years
|
Technology / Know-how
|
5.2
|
|
18 years
|
|
All customer relationships
|
6.4
|
|
20 years
|
|
Non-compete agreements
|
0.3
|
|
4 years
|
|
Total intangible assets
|
$
|
13.0
|
|
|
|
Initial Purchase
Price Allocation
|
Adjusted Purchase
Price Allocation
|
||||||
|
|
Weighted-
Average Life
|
|
Weighted-
Average Life
|
||||
Trade name
|
1.2
|
|
8 years
|
0.8
|
|
6 years
|
||
Know how
|
3.5
|
|
20 years
|
3.4
|
|
20 years
|
||
All customer relationships
|
2.5
|
|
10 years
|
3.5
|
|
9 years
|
||
Non-compete agreements
|
0.5
|
|
5 years
|
—
|
|
|
||
Total intangible assets
|
$
|
7.7
|
|
|
$
|
7.7
|
|
|
|
2013
|
2012
|
2011
|
||||||
Numerator:
|
|
|
|
||||||
Net Income Attributable to The Timken Company
|
$
|
262.7
|
|
$
|
495.5
|
|
$
|
454.3
|
|
Less: undistributed earnings allocated to nonvested stock
|
(0.3
|
)
|
(1.5
|
)
|
(1.6
|
)
|
|||
Net income available to common shareholders for basic earnings
per share and diluted earnings per share
|
$
|
262.4
|
|
$
|
494.0
|
|
$
|
452.7
|
|
Denominator:
|
|
|
|
||||||
Weighted-average number of shares outstanding – basic
|
94,989,561
|
|
96,671,613
|
|
97,451,064
|
|
|||
Effect of dilutive securities:
|
|
|
|
||||||
Stock options and awards - based on the treasury
stock method
|
834,167
|
|
930,868
|
|
1,204,449
|
|
|||
Weighted-average number of shares outstanding, assuming
dilution of stock options and awards |
95,823,728
|
|
97,602,481
|
|
98,655,513
|
|
|||
Basic earnings per share
|
$
|
2.76
|
|
$
|
5.11
|
|
$
|
4.65
|
|
Diluted earnings per share
|
$
|
2.74
|
|
$
|
5.07
|
|
$
|
4.59
|
|
|
Foreign currency
translation adjustments
|
Pension and postretirement
liability adjustments
|
Change in fair value of
derivative financial instruments
|
Total
|
||||||||
Balance at December 31, 2012
|
$
|
49.0
|
|
$
|
(1,061.5
|
)
|
$
|
(0.7
|
)
|
$
|
(1,013.2
|
)
|
Other comprehensive (loss) income before
reclassifications, before income tax
|
(19.0
|
)
|
494.2
|
|
0.7
|
|
475.9
|
|
||||
Amounts reclassified from accumulated other
comprehensive income (loss), before income tax
|
—
|
|
130.6
|
|
(0.4
|
)
|
130.2
|
|
||||
Income tax benefit
|
—
|
|
(226.5
|
)
|
—
|
|
(226.5
|
)
|
||||
Net current period other comprehensive (loss) income,
net of income taxes
|
(19.0
|
)
|
398.3
|
|
0.3
|
|
379.6
|
|
||||
Non-controlling interest
|
7.5
|
|
—
|
|
—
|
|
7.5
|
|
||||
Net current period comprehensive (loss) income, net of
income taxes and non-controlling interest
|
(11.5
|
)
|
398.3
|
|
0.3
|
|
387.1
|
|
||||
Balance at December 31, 2013
|
$
|
37.5
|
|
$
|
(663.2
|
)
|
$
|
(0.4
|
)
|
$
|
(626.1
|
)
|
|
Foreign currency
translation adjustments
|
Pension and postretirement
liability adjustments
|
Change in fair value of
marketable securities
|
Change in fair value of
derivative financial instruments
|
Total
|
||||||||||
Balance, December 31, 2011
|
$
|
38.5
|
|
$
|
(928.3
|
)
|
$
|
0.6
|
|
$
|
(0.3
|
)
|
$
|
(889.5
|
)
|
Other comprehensive income (loss) before
reclassifications, before income tax
|
10.5
|
|
(288.9
|
)
|
—
|
|
0.4
|
|
(278.0
|
)
|
|||||
Amounts reclassified from accumulated
other comprehensive income (loss), before
income tax
|
—
|
|
100.4
|
|
(1.2
|
)
|
(0.8
|
)
|
98.4
|
|
|||||
Income tax expense
|
—
|
|
55.3
|
|
0.4
|
|
—
|
|
55.7
|
|
|||||
Net current period other comprehensive
(loss) income, net of income taxes
|
10.5
|
|
(133.2
|
)
|
(0.8
|
)
|
(0.4
|
)
|
(123.9
|
)
|
|||||
Non-controlling interest
|
—
|
|
—
|
|
0.2
|
|
—
|
|
0.2
|
|
|||||
Net current period comprehensive (loss)
income, net of income taxes and
non-controlling interest
|
10.5
|
|
(133.2
|
)
|
(0.6
|
)
|
(0.4
|
)
|
(123.7
|
)
|
|||||
Balance at December 31, 2012
|
$
|
49.0
|
|
$
|
(1,061.5
|
)
|
$
|
—
|
|
$
|
(0.7
|
)
|
$
|
(1,013.2
|
)
|
|
2013
|
2012
|
||||
Manufacturing supplies
|
$
|
59.7
|
|
$
|
64.3
|
|
Raw materials
|
94.5
|
|
110.7
|
|
||
Work in process
|
294.5
|
|
278.1
|
|
||
Finished products
|
381.5
|
|
430.4
|
|
||
Subtotal
|
$
|
830.2
|
|
$
|
883.5
|
|
Allowance for surplus and obsolete inventory
|
(20.3
|
)
|
(21.4
|
)
|
||
Total Inventories, net
|
$
|
809.9
|
|
$
|
862.1
|
|
|
2013
|
2012
|
||||
Land and buildings
|
$
|
685.0
|
|
$
|
653.8
|
|
Machinery and equipment
|
3,393.1
|
|
3,138.3
|
|
||
Subtotal
|
$
|
4,078.1
|
|
$
|
3,792.1
|
|
Less allowances for depreciation
|
(2,520.0
|
)
|
(2,386.8
|
)
|
||
Property, Plant and Equipment, net
|
$
|
1,558.1
|
|
$
|
1,405.3
|
|
|
Mobile Industries
|
Process
Industries
|
Aerospace
|
Steel
|
Total
|
||||||||||
Beginning Balance
|
$
|
17.7
|
|
$
|
146.4
|
|
$
|
162.2
|
|
$
|
12.6
|
|
$
|
338.9
|
|
Acquisitions
|
4.3
|
|
13.8
|
|
—
|
|
—
|
|
18.1
|
|
|||||
Other
|
0.3
|
|
1.2
|
|
0.2
|
|
—
|
|
1.7
|
|
|||||
Ending Balance
|
$
|
22.3
|
|
$
|
161.4
|
|
$
|
162.4
|
|
$
|
12.6
|
|
$
|
358.7
|
|
|
Mobile Industries
|
Process
Industries
|
Aerospace
|
Steel
|
Total
|
||||||||||
Beginning Balance
|
$
|
16.9
|
|
$
|
141.1
|
|
$
|
162.1
|
|
$
|
12.6
|
|
$
|
332.7
|
|
Acquisitions
|
0.8
|
|
6.3
|
|
—
|
|
—
|
|
7.1
|
|
|||||
Other
|
—
|
|
(1.0
|
)
|
0.1
|
|
—
|
|
(0.9
|
)
|
|||||
Ending Balance
|
$
|
17.7
|
|
$
|
146.4
|
|
$
|
162.2
|
|
$
|
12.6
|
|
$
|
338.9
|
|
|
2013
|
2012
|
||||||||||||||||
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Net
Carrying
Amount
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Net
Carrying
Amount
|
||||||||||||
Intangible assets subject
to amortization:
|
|
|
|
|
|
|
||||||||||||
Customer relationships
|
$
|
167.3
|
|
$
|
51.3
|
|
$
|
116.0
|
|
$
|
159.6
|
|
$
|
38.1
|
|
$
|
121.5
|
|
Know-how
|
31.4
|
|
4.4
|
|
27.0
|
|
26.1
|
|
2.8
|
|
23.3
|
|
||||||
Industrial license agreements
|
0.1
|
|
0.1
|
|
—
|
|
0.2
|
|
0.1
|
|
0.1
|
|
||||||
Land-use rights
|
8.9
|
|
4.5
|
|
4.4
|
|
8.6
|
|
4.1
|
|
4.5
|
|
||||||
Patents
|
2.3
|
|
1.8
|
|
0.5
|
|
2.5
|
|
1.8
|
|
0.7
|
|
||||||
Technology use
|
46.2
|
|
13.5
|
|
32.7
|
|
47.0
|
|
11.5
|
|
35.5
|
|
||||||
Trademarks
|
4.6
|
|
2.7
|
|
1.9
|
|
4.2
|
|
3.4
|
|
0.8
|
|
||||||
PMA licenses
|
8.8
|
|
4.0
|
|
4.8
|
|
8.8
|
|
3.6
|
|
5.2
|
|
||||||
Non-compete agreements
|
4.2
|
|
3.8
|
|
0.4
|
|
4.4
|
|
3.3
|
|
1.1
|
|
||||||
Unpatented technology
|
7.2
|
|
7.2
|
|
—
|
|
7.2
|
|
6.7
|
|
0.5
|
|
||||||
|
$
|
281.0
|
|
$
|
93.3
|
|
$
|
187.7
|
|
$
|
268.6
|
|
$
|
75.4
|
|
$
|
193.2
|
|
Intangible assets not
subject to amortization:
|
|
|
|
|
|
|
||||||||||||
Tradename
|
$
|
17.2
|
|
$
|
—
|
|
$
|
17.2
|
|
$
|
17.3
|
|
$
|
—
|
|
$
|
17.3
|
|
FAA air agency
certificates
|
14.2
|
|
—
|
|
14.2
|
|
14.2
|
|
—
|
|
14.2
|
|
||||||
|
$
|
31.4
|
|
$
|
—
|
|
$
|
31.4
|
|
$
|
31.5
|
|
$
|
—
|
|
$
|
31.5
|
|
Total intangible assets
|
$
|
312.4
|
|
$
|
93.3
|
|
$
|
219.1
|
|
$
|
300.1
|
|
$
|
75.4
|
|
$
|
224.7
|
|
|
2013
|
2012
|
||||
Variable-rate lines of credit for certain of the Company’s foreign subsidiaries with
various banks with interest rates ranging from 0.87% to 4.86% and 0.61% to
2.28% at December 31, 2013 and 2012, respectively
|
$
|
18.6
|
|
$
|
14.3
|
|
Short-term debt
|
$
|
18.6
|
|
$
|
14.3
|
|
|
2013
|
2012
|
||||
Fixed-rate Medium-Term Notes, Series A, mature at various dates through
May 2028, with interest rates ranging from 6.74% to 7.76% |
$
|
175.0
|
|
$
|
175.0
|
|
Fixed-rate Senior Unsecured Notes, maturing on September 15, 2014, with an
interest rate of 6.0% |
249.9
|
|
249.9
|
|
||
Variable-rate State of Ohio Water Development Revenue Refunding Bonds,
maturing on November 1, 2025 (0.06% at December 31, 2013) |
12.2
|
|
12.2
|
|
||
Variable-rate State of Ohio Air Quality Development Revenue Refunding Bonds,
maturing on November 1, 2025 (0.15% at December 31, 2013) |
9.5
|
|
9.5
|
|
||
Variable-rate State of Ohio Pollution Control Revenue Refunding Bonds, maturing
on June 1, 2033 (0.15% at December 31, 2013) |
8.5
|
|
8.5
|
|
||
Other
|
2.2
|
|
9.6
|
|
||
Total debt
|
$
|
457.3
|
|
$
|
464.7
|
|
Less current maturities
|
250.7
|
|
9.6
|
|
||
Long-term debt
|
$
|
206.6
|
|
$
|
455.1
|
|
|
2013
|
2012
|
||||
Beginning balance, January 1
|
$
|
4.3
|
|
$
|
11.7
|
|
Expense (Income)
|
4.8
|
|
(0.9
|
)
|
||
Payments
|
(4.8
|
)
|
(6.5
|
)
|
||
Ending balance, December 31
|
$
|
4.3
|
|
$
|
4.3
|
|
|
Mobile
Industries
|
Process
Industries
|
Aerospace
|
Steel
|
Total
|
||||||||||
Impairment charges
|
$
|
—
|
|
$
|
0.1
|
|
$
|
—
|
|
$
|
0.6
|
|
$
|
0.7
|
|
Severance expense and related benefit costs
|
12.5
|
|
2.6
|
|
1.2
|
|
—
|
|
16.3
|
|
|||||
Exit costs
|
(1.5
|
)
|
0.9
|
|
—
|
|
—
|
|
(0.6
|
)
|
|||||
Total
|
$
|
11.0
|
|
$
|
3.6
|
|
$
|
1.2
|
|
$
|
0.6
|
|
$
|
16.4
|
|
|
Mobile
Industries
|
Process
Industries
|
Aerospace
|
Steel
|
Total
|
||||||||||
Impairment charges
|
$
|
6.5
|
|
$
|
0.1
|
|
$
|
—
|
|
$
|
—
|
|
$
|
6.6
|
|
Severance expense and related benefit costs
|
16.8
|
|
1.6
|
|
—
|
|
—
|
|
18.4
|
|
|||||
Exit costs
|
4.2
|
|
0.3
|
|
—
|
|
—
|
|
4.5
|
|
|||||
Total
|
$
|
27.5
|
|
$
|
2.0
|
|
$
|
—
|
|
$
|
—
|
|
$
|
29.5
|
|
|
Mobile
Industries
|
Process
Industries
|
Aerospace
|
Steel
|
Total
|
||||||||||
Impairment charges
|
$
|
0.2
|
|
$
|
0.3
|
|
$
|
—
|
|
$
|
—
|
|
$
|
0.5
|
|
Severance expense and related benefit costs
|
0.2
|
|
(0.1
|
)
|
—
|
|
|
|
0.1
|
|
|||||
Exit costs
|
13.0
|
|
0.3
|
|
0.5
|
|
—
|
|
13.8
|
|
|||||
Total
|
$
|
13.4
|
|
$
|
0.5
|
|
$
|
0.5
|
|
$
|
—
|
|
$
|
14.4
|
|
|
2013
|
2012
|
||||
Beginning balance, January 1
|
$
|
17.6
|
|
$
|
21.8
|
|
Expense
|
8.7
|
|
12.2
|
|
||
Payments
|
(15.5
|
)
|
(16.4
|
)
|
||
Ending balance, December 31
|
$
|
10.8
|
|
$
|
17.6
|
|
|
2013
|
||
Severance expense and related benefit costs
|
$
|
5.6
|
|
Professional fees
|
7.3
|
|
|
Exit costs
|
0.1
|
|
|
Total
|
$
|
13.0
|
|
|
2013
|
||
Beginning balance, January 1
|
$
|
—
|
|
Expense
|
13.0
|
|
|
Payments
|
(7.3
|
)
|
|
Ending balance, December 31
|
$
|
5.7
|
|
|
2013
|
2012
|
2011
|
||||||
Weighted-average fair value per option
|
$
|
21.17
|
|
$
|
20.16
|
|
$
|
19.93
|
|
Risk-free interest rate
|
1.09
|
%
|
1.15
|
%
|
2.76
|
%
|
|||
Dividend yield
|
2.29
|
%
|
1.94
|
%
|
2.00
|
%
|
|||
Expected stock volatility
|
50.66
|
%
|
50.00
|
%
|
48.10
|
%
|
|||
Expected life - years
|
6
|
|
6
|
|
6
|
|
|
Number of
Shares
|
Weighted-average
Exercise Price |
Weighted-average
Remaining Contractual Term |
Aggregate Intrinsic Value
(millions)
|
|||||
Outstanding - beginning of year
|
3,717,340
|
|
$
|
33.59
|
|
|
|
||
Granted
|
614,480
|
|
56.27
|
|
|
|
|||
Exercised
|
(928,803
|
)
|
23.09
|
|
|
|
|||
Canceled or expired
|
(18,330
|
)
|
49.86
|
|
|
|
|||
Outstanding - end of year
|
3,384,687
|
|
$
|
40.50
|
|
7 years
|
$
|
49.5
|
|
Options expected to vest
|
2,740,589
|
|
$
|
36.93
|
|
6 years
|
$
|
49.0
|
|
Options exercisable
|
1,711,482
|
|
$
|
32.94
|
|
5 years
|
$
|
37.9
|
|
|
Number of Shares
|
Weighted-average
Grant Date Fair Value |
|||
Outstanding - beginning of year
|
524,064
|
|
$
|
36.23
|
|
Granted
|
111,640
|
|
55.95
|
|
|
Vested
|
(221,542
|
)
|
32.16
|
|
|
Canceled or expired
|
(17,110
|
)
|
47.24
|
|
|
Outstanding - end of year
|
397,052
|
|
$
|
43.57
|
|
|
2013
|
2012
|
2011
|
||||||
Components of net periodic benefit cost:
|
|
|
|
||||||
Service cost
|
$
|
38.5
|
|
$
|
34.7
|
|
$
|
32.2
|
|
Interest cost
|
134.7
|
|
151.1
|
|
158.6
|
|
|||
Expected return on plan assets
|
(232.0
|
)
|
(221.1
|
)
|
(214.9
|
)
|
|||
Amortization of prior service cost
|
4.5
|
|
9.3
|
|
9.4
|
|
|||
Amortization of net actuarial loss
|
116.8
|
|
83.3
|
|
56.0
|
|
|||
Pension curtailments and settlements
|
7.2
|
|
11.6
|
|
—
|
|
|||
Net periodic benefit cost
|
$
|
69.7
|
|
$
|
68.9
|
|
$
|
41.3
|
|
Assumptions
|
2013
|
2012
|
2011
|
|||
U.S. Plans:
|
|
|
|
|||
Discount rate
|
4.00
|
%
|
5.00
|
%
|
5.75
|
%
|
Future compensation assumption
|
2.00% to 3.00%
|
|
2.00% to 3.00%
|
|
2.00% to 3.00%
|
|
Expected long-term return on plan assets
|
8.00
|
%
|
8.25
|
%
|
8.50
|
%
|
International Plans:
|
|
|
|
|||
Discount rate
|
2.75% to 9.0%
|
|
4.75% to 9.50%
|
|
4.75% to 9.00%
|
|
Future compensation assumption
|
2.30% to 8.00%
|
|
2.5% to 8.00%
|
|
2.50% to 8.84%
|
|
Expected long-term return on plan assets
|
3.25% to 8.50%
|
|
3.25% to 9.00%
|
|
3.50% to 9.00%
|
|
|
2013
|
2012
|
||||
Change in benefit obligation:
|
|
|
||||
Benefit obligation at beginning of year
|
$
|
3,496.3
|
|
$
|
3,124.6
|
|
Service cost
|
38.5
|
|
34.7
|
|
||
Interest cost
|
134.7
|
|
151.1
|
|
||
Amendments
|
—
|
|
(0.3
|
)
|
||
Actuarial (gains) losses
|
(274.4
|
)
|
394.1
|
|
||
Employee contributions
|
0.2
|
|
0.2
|
|
||
International plan exchange rate change
|
5.3
|
|
18.2
|
|
||
Curtailment loss
|
—
|
|
9.5
|
|
||
Benefits paid
|
(267.1
|
)
|
(235.8
|
)
|
||
Benefit obligation at end of year
|
$
|
3,133.5
|
|
$
|
3,496.3
|
|
Change in plan assets:
|
|
|
||||
Fair value of plan assets at beginning of year
|
$
|
3,098.4
|
|
$
|
2,631.9
|
|
Actual return on plan assets
|
334.0
|
|
361.7
|
|
||
Employee contributions
|
0.2
|
|
0.2
|
|
||
Company contributions / payments
|
120.7
|
|
325.8
|
|
||
International plan exchange rate change
|
4.4
|
|
14.6
|
|
||
Benefits paid
|
(267.1
|
)
|
(235.8
|
)
|
||
Fair value of plan assets at end of year
|
3,290.6
|
|
3,098.4
|
|
||
Funded status at end of year
|
$
|
157.1
|
|
$
|
(397.9
|
)
|
Amounts recognized on the Consolidated Balance Sheets:
|
|
|
||||
Non-current assets
|
$
|
342.6
|
|
$
|
0.3
|
|
Current liabilities
|
(6.5
|
)
|
(6.8
|
)
|
||
Non-current liabilities
|
(179.0
|
)
|
(391.4
|
)
|
||
|
$
|
157.1
|
|
$
|
(397.9
|
)
|
Amounts recognized in accumulated other comprehensive loss:
|
|
|
||||
Net actuarial loss
|
$
|
989.1
|
|
$
|
1,489.4
|
|
Net prior service cost
|
19.0
|
|
23.5
|
|
||
Accumulated other comprehensive loss
|
$
|
1,008.1
|
|
$
|
1,512.9
|
|
Changes in plan assets and benefit obligations recognized in accumulated other comprehensive loss (AOCL):
|
2013
|
2012
|
||||
AOCI at beginning of year
|
$
|
1,512.9
|
|
$
|
1,348.2
|
|
Net actuarial (gain) loss
|
(376.3
|
)
|
263.1
|
|
||
Prior service cost
|
—
|
|
(0.3
|
)
|
||
Recognized net actuarial loss
|
(116.8
|
)
|
(83.3
|
)
|
||
Recognized prior service cost
|
(4.5
|
)
|
(9.3
|
)
|
||
Loss recognized due to curtailment
|
(7.2
|
)
|
(11.6
|
)
|
||
Foreign currency impact
|
—
|
|
6.1
|
|
||
Total recognized in accumulated other comprehensive loss at December 31
|
$
|
1,008.1
|
|
$
|
1,512.9
|
|
Assumptions
|
2013
|
2012
|
||
U.S. Plans:
|
|
|
||
Discount rate
|
5.02
|
%
|
4.00
|
%
|
Future compensation assumption
|
2.00% to 3.00%
|
|
2.00% to 3.00%
|
|
International Plans:
|
|
|
||
Discount rate
|
3.25% to 9.75%
|
|
2.75% to 9.5%
|
|
Future compensation assumption
|
2.30% to 8.00%
|
|
2.3% to 8.0%
|
|
|
Current Target
Allocation
|
Percentage of Pension Plan
Assets at December 31,
|
|||
Asset Category
|
|
|
|
2013
|
2012
|
Equity securities
|
35%
|
to
|
52%
|
43%
|
47%
|
Debt securities
|
35%
|
to
|
50%
|
45%
|
40%
|
Other
|
9%
|
to
|
19%
|
12%
|
13%
|
Total
|
|
|
|
100%
|
100%
|
Level 1 -
|
Unadjusted quoted prices in active markets for identical assets or liabilities.
|
Level 2 -
|
Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability.
|
Level 3 -
|
Unobservable inputs for the asset or liability.
|
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||
Assets:
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
364.0
|
|
$
|
3.3
|
|
$
|
360.7
|
|
$
|
—
|
|
Government and agency securities
|
188.4
|
|
175.0
|
|
13.4
|
|
—
|
|
||||
Corporate bonds - investment grade
|
301.1
|
|
—
|
|
301.1
|
|
—
|
|
||||
Corporate bonds - non-investment grade
|
110.1
|
|
—
|
|
110.1
|
|
—
|
|
||||
Equity securities - U.S. companies
|
300.6
|
|
299.2
|
|
1.4
|
|
—
|
|
||||
Equity securities - international companies
|
311.5
|
|
311.5
|
|
—
|
|
—
|
|
||||
Asset backed securities
|
38.2
|
|
—
|
|
38.2
|
|
—
|
|
||||
Common collective funds - domestic equities
|
195.6
|
|
—
|
|
195.6
|
|
—
|
|
||||
Common collective funds - international equities
|
387.5
|
|
—
|
|
387.5
|
|
—
|
|
||||
Common collective funds - fixed income
|
625.4
|
|
—
|
|
625.4
|
|
—
|
|
||||
Common collective funds - other
|
87.2
|
|
—
|
|
87.2
|
|
—
|
|
||||
Limited partnerships
|
78.8
|
|
—
|
|
—
|
|
78.8
|
|
||||
Real estate partnerships
|
145.6
|
|
—
|
|
124.5
|
|
21.1
|
|
||||
Mutual funds - real estate
|
155.9
|
|
155.9
|
|
—
|
|
—
|
|
||||
Other assets
|
0.7
|
|
—
|
|
0.7
|
|
—
|
|
||||
Total Assets
|
$
|
3,290.6
|
|
$
|
944.9
|
|
$
|
2,245.8
|
|
$
|
99.9
|
|
|
Limited Partnerships
|
Real Estate
|
Total
|
||||||
Beginning balance, January 1
|
$
|
79.9
|
|
$
|
16.3
|
|
$
|
96.2
|
|
Purchases
|
5.3
|
|
3.5
|
|
8.8
|
|
|||
Sales
|
(11.5
|
)
|
(0.6
|
)
|
(12.1
|
)
|
|||
Realized losses
|
(6.2
|
)
|
(0.1
|
)
|
(6.3
|
)
|
|||
Unrealized gains
|
11.3
|
|
2.0
|
|
13.3
|
|
|||
Ending balance, December 31
|
$
|
78.8
|
|
$
|
21.1
|
|
$
|
99.9
|
|
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||
Assets:
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
80.0
|
|
$
|
3.1
|
|
$
|
76.9
|
|
$
|
—
|
|
Government and agency securities
|
226.2
|
|
193.9
|
|
32.3
|
|
—
|
|
||||
Corporate bonds - investment grade
|
263.7
|
|
—
|
|
263.7
|
|
—
|
|
||||
Corporate bonds - non-investment grade
|
103.9
|
|
—
|
|
103.9
|
|
—
|
|
||||
Equity securities - U.S. companies
|
347.6
|
|
347.2
|
|
0.4
|
|
—
|
|
||||
Equity securities - international companies
|
273.6
|
|
273.6
|
|
—
|
|
—
|
|
||||
Asset backed securities
|
55.4
|
|
—
|
|
55.4
|
|
—
|
|
||||
Common collective funds - domestic equities
|
350.1
|
|
—
|
|
350.1
|
|
—
|
|
||||
Common collective funds - international equities
|
365.3
|
|
—
|
|
365.3
|
|
—
|
|
||||
Common collective funds - fixed income
|
620.1
|
|
—
|
|
620.1
|
|
—
|
|
||||
Common collective funds - other
|
39.7
|
|
—
|
|
39.7
|
|
—
|
|
||||
Limited partnerships
|
79.9
|
|
—
|
|
—
|
|
79.9
|
|
||||
Real estate partnerships
|
128.6
|
|
—
|
|
112.3
|
|
16.3
|
|
||||
Mutual funds - real estate
|
163.6
|
|
163.6
|
|
—
|
|
—
|
|
||||
Other assets
|
0.7
|
|
—
|
|
0.7
|
|
—
|
|
||||
Total Assets
|
$
|
3,098.4
|
|
$
|
981.4
|
|
$
|
2,020.8
|
|
$
|
96.2
|
|
|
Limited Partnerships
|
Real Estate
|
Total
|
||||||
Beginning balance, January 1
|
$
|
83.6
|
|
$
|
6.6
|
|
$
|
90.2
|
|
Purchases
|
7.1
|
|
11.3
|
|
18.4
|
|
|||
Sales
|
(8.5
|
)
|
(1.5
|
)
|
(10.0
|
)
|
|||
Realized losses
|
(3.4
|
)
|
—
|
|
(3.4
|
)
|
|||
Unrealized gains (losses)
|
1.1
|
|
(0.1
|
)
|
1.0
|
|
|||
Ending balance, December 31
|
$
|
79.9
|
|
$
|
16.3
|
|
$
|
96.2
|
|
|
2013
|
2012
|
2011
|
||||||
Components of net periodic benefit cost:
|
|
|
|
||||||
Service cost
|
$
|
2.9
|
|
$
|
2.5
|
|
$
|
2.5
|
|
Interest cost
|
21.7
|
|
28.4
|
|
32.9
|
|
|||
Expected return on plan assets
|
(11.1
|
)
|
(10.6
|
)
|
(4.4
|
)
|
|||
Amortization of prior service credit
|
(0.2
|
)
|
(0.2
|
)
|
(0.3
|
)
|
|||
Amortization of net actuarial loss
|
2.3
|
|
2.5
|
|
2.9
|
|
|||
Net periodic benefit cost
|
$
|
15.6
|
|
$
|
22.6
|
|
$
|
33.6
|
|
Assumptions:
|
2013
|
2012
|
2011
|
|||
Discount rate
|
3.80
|
%
|
4.85
|
%
|
5.50
|
%
|
Rate of return
|
5.00
|
%
|
5.00
|
%
|
5.00
|
%
|
|
2013
|
2012
|
||||
Change in benefit obligation:
|
|
|
||||
Benefit obligation at beginning of year
|
$
|
639.2
|
|
$
|
628.6
|
|
Service cost
|
2.9
|
|
2.5
|
|
||
Interest cost
|
21.7
|
|
28.4
|
|
||
Amendments
|
—
|
|
0.9
|
|
||
Actuarial (gains) losses
|
(101.9
|
)
|
24.5
|
|
||
Benefits paid
|
(46.3
|
)
|
(45.7
|
)
|
||
Benefit obligation at end of year
|
$
|
515.6
|
|
$
|
639.2
|
|
Change in plan assets:
|
|
|
||||
Fair value of plan assets at beginning of year
|
$
|
221.9
|
|
$
|
170.9
|
|
Actual return on plan assets
|
27.2
|
|
9.8
|
|
||
Company contributions / payments
|
37.3
|
|
86.9
|
|
||
Benefits paid
|
(46.3
|
)
|
(45.7
|
)
|
||
Fair value of plan assets at end of year
|
240.1
|
|
221.9
|
|
||
Funded status at end of year
|
$
|
(275.5
|
)
|
$
|
(417.3
|
)
|
Changes in plan assets and benefit obligations recognized in AOCL:
|
|
|
||||
AOCI at beginning of year
|
$
|
133.3
|
|
$
|
109.5
|
|
Net actuarial (gain) loss
|
(117.9
|
)
|
25.2
|
|
||
Prior service cost
|
—
|
|
0.9
|
|
||
Recognized net actuarial loss
|
(2.3
|
)
|
(2.5
|
)
|
||
Recognized prior service credit
|
0.2
|
|
0.2
|
|
||
Total recognized in accumulated other comprehensive loss at December 31
|
$
|
13.3
|
|
$
|
133.3
|
|
Assumptions:
|
2013
|
2012
|
||
Discount rate
|
4.59
|
%
|
3.80
|
%
|
Rate of return
|
5.00
|
%
|
5.00
|
%
|
|
Current Target
Allocation
|
Percentage of VEBA Assets
at December 31,
|
|||
Asset Category
|
|
|
|
2013
|
2012
|
Equity securities
|
45%
|
to
|
55%
|
55%
|
49%
|
Debt securities
|
45%
|
to
|
55%
|
45%
|
51%
|
Total
|
|
|
|
100%
|
100%
|
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||
Assets:
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
2.9
|
|
$
|
—
|
|
$
|
2.9
|
|
$
|
—
|
|
Common Collective fund - U.S. equities
|
82.7
|
|
—
|
|
82.7
|
|
—
|
|
||||
Common Collective fund - international equities
|
49.7
|
|
—
|
|
49.7
|
|
—
|
|
||||
Common collective funds - fixed income
|
104.8
|
|
—
|
|
104.8
|
|
—
|
|
||||
Total Assets
|
$
|
240.1
|
|
$
|
—
|
|
$
|
240.1
|
|
$
|
—
|
|
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||
Assets:
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
2.1
|
|
$
|
—
|
|
$
|
2.1
|
|
$
|
—
|
|
Common Collective fund - U.S. equities
|
65.6
|
|
—
|
|
65.6
|
|
—
|
|
||||
Common Collective fund - international equities
|
43.4
|
|
—
|
|
43.4
|
|
—
|
|
||||
Common collective funds - fixed income
|
110.8
|
|
—
|
|
110.8
|
|
—
|
|
||||
Total Assets
|
$
|
221.9
|
|
$
|
—
|
|
$
|
221.9
|
|
$
|
—
|
|
2012
|
$
|
50.0
|
|
2013
|
—
|
|
|
2014 (planned)
|
—
|
|
|
Gross
|
Expected
Medicare
Subsidies
|
Net Including
Medicare
Subsidies
|
||||||
2014
|
$
|
53.6
|
|
$
|
2.7
|
|
$
|
50.9
|
|
2015
|
52.0
|
|
2.9
|
|
49.1
|
|
|||
2016
|
50.5
|
|
3.1
|
|
47.4
|
|
|||
2017
|
49.0
|
|
3.2
|
|
45.8
|
|
|||
2018
|
47.6
|
|
3.2
|
|
44.4
|
|
|||
2019-2023
|
206.6
|
|
15.7
|
|
190.9
|
|
|
2013
|
2012
|
2011
|
||||||
Net sales:
|
|
|
|
||||||
United States
|
$
|
2,887.7
|
|
$
|
3,420.3
|
|
$
|
3,494.6
|
|
Canada & Mexico
|
258.9
|
|
275.1
|
|
268.4
|
|
|||
South America
|
141.8
|
|
153.5
|
|
186.0
|
|
|||
Europe / Middle East / Africa
|
574.0
|
|
594.2
|
|
652.3
|
|
|||
Asia-Pacific
|
478.8
|
|
543.9
|
|
568.9
|
|
|||
|
$
|
4,341.2
|
|
$
|
4,987.0
|
|
$
|
5,170.2
|
|
Long-lived assets:
|
|
|
|
||||||
United States
|
$
|
1,199.4
|
|
$
|
1,055.7
|
|
$
|
963.1
|
|
Canada & Mexico
|
12.6
|
|
6.1
|
|
16.3
|
|
|||
South America
|
2.1
|
|
4.4
|
|
6.2
|
|
|||
Europe / Middle East / Africa
|
105.5
|
|
101.6
|
|
102.0
|
|
|||
Asia-Pacific
|
238.5
|
|
237.5
|
|
221.3
|
|
|||
|
$
|
1,558.1
|
|
$
|
1,405.3
|
|
$
|
1,308.9
|
|
|
2013
|
2012
|
2011
|
||||||
Net sales to external customers:
|
|
|
|
||||||
Mobile Industries
|
$
|
1,474.3
|
|
$
|
1,675.0
|
|
$
|
1,768.9
|
|
Process Industries
|
1,231.7
|
|
1,337.6
|
|
1,240.5
|
|
|||
Aerospace
|
329.5
|
|
346.9
|
|
324.1
|
|
|||
Steel
|
1,305.7
|
|
1,627.5
|
|
1,836.7
|
|
|||
|
$
|
4,341.2
|
|
$
|
4,987.0
|
|
$
|
5,170.2
|
|
Intersegment sales:
|
|
|
|
||||||
Mobile Industries
|
$
|
1.1
|
|
$
|
0.5
|
|
$
|
0.5
|
|
Process Industries
|
3.9
|
|
5.7
|
|
4.1
|
|
|||
Steel
|
75.1
|
|
101.2
|
|
119.8
|
|
|||
|
$
|
80.1
|
|
$
|
107.4
|
|
$
|
124.4
|
|
Segment EBIT:
|
|
|
|
||||||
Mobile Industries
|
$
|
164.7
|
|
$
|
208.1
|
|
$
|
261.8
|
|
Process Industries
|
201.9
|
|
274.9
|
|
274.2
|
|
|||
Aerospace
|
26.6
|
|
36.3
|
|
5.1
|
|
|||
Steel
|
140.2
|
|
251.8
|
|
267.4
|
|
|||
Total EBIT, for reportable segments
|
$
|
533.4
|
|
$
|
771.1
|
|
$
|
808.5
|
|
Unallocated corporate expenses
|
(82.5
|
)
|
(84.4
|
)
|
(80.8
|
)
|
|||
CDSOA receipts, net of expense
|
—
|
|
108.0
|
|
—
|
|
|||
Separation costs
|
(13.0
|
)
|
—
|
|
—
|
|
|||
Interest expense
|
(24.4
|
)
|
(31.1
|
)
|
(36.8
|
)
|
|||
Interest income
|
1.9
|
|
2.9
|
|
5.6
|
|
|||
Intersegment adjustments
|
1.7
|
|
(0.5
|
)
|
0.3
|
|
|||
Income before income taxes
|
$
|
417.1
|
|
$
|
766.0
|
|
$
|
696.8
|
|
|
2013
|
2012
|
2011
|
||||||
Assets employed at year-end:
|
|
|
|
||||||
Mobile Industries
|
$
|
1,051.4
|
|
$
|
1,052.9
|
|
$
|
1,233.7
|
|
Process Industries
|
1,096.7
|
|
1,056.2
|
|
979.3
|
|
|||
Aerospace
|
555.8
|
|
480.6
|
|
526.6
|
|
|||
Steel
|
1,198.9
|
|
921.4
|
|
954.2
|
|
|||
Corporate
|
575.1
|
|
733.1
|
|
633.6
|
|
|||
|
$
|
4,477.9
|
|
$
|
4,244.2
|
|
$
|
4,327.4
|
|
Capital expenditures:
|
|
|
|
||||||
Mobile Industries
|
$
|
40.3
|
|
$
|
32.1
|
|
$
|
39.5
|
|
Process Industries
|
80.1
|
|
72.4
|
|
54.4
|
|
|||
Aerospace
|
7.8
|
|
14.0
|
|
10.6
|
|
|||
Steel
|
192.6
|
|
175.5
|
|
99.8
|
|
|||
Corporate
|
5.0
|
|
3.2
|
|
1.0
|
|
|||
|
$
|
325.8
|
|
$
|
297.2
|
|
$
|
205.3
|
|
Depreciation and amortization:
|
|
|
|
||||||
Mobile Industries
|
$
|
50.2
|
|
$
|
60.8
|
|
$
|
70.2
|
|
Process Industries
|
67.4
|
|
62.2
|
|
51.8
|
|
|||
Aerospace
|
20.5
|
|
23.1
|
|
23.2
|
|
|||
Steel
|
53.8
|
|
49.7
|
|
45.8
|
|
|||
Corporate
|
2.7
|
|
2.2
|
|
1.5
|
|
|||
|
$
|
194.6
|
|
$
|
198.0
|
|
$
|
192.5
|
|
|
2013
|
2012
|
2011
|
||||||
United States
|
$
|
314.5
|
|
$
|
680.8
|
|
$
|
527.6
|
|
Non-United States
|
102.6
|
|
85.2
|
|
169.2
|
|
|||
Income before income taxes
|
$
|
417.1
|
|
$
|
766.0
|
|
$
|
696.8
|
|
|
2013
|
2012
|
2011
|
||||||
Current:
|
|
|
|
||||||
Federal
|
$
|
99.9
|
|
$
|
103.5
|
|
$
|
53.8
|
|
State and local
|
14.4
|
|
7.2
|
|
6.8
|
|
|||
Foreign
|
39.3
|
|
36.3
|
|
55.1
|
|
|||
|
$
|
153.6
|
|
$
|
147.0
|
|
$
|
115.7
|
|
Deferred:
|
|
|
|
||||||
Federal
|
$
|
(3.4
|
)
|
$
|
105.2
|
|
$
|
117.7
|
|
State and local
|
2.9
|
|
18.1
|
|
11.7
|
|
|||
Foreign
|
1.0
|
|
(0.2
|
)
|
(4.9
|
)
|
|||
|
$
|
0.5
|
|
$
|
123.1
|
|
$
|
124.5
|
|
United States and foreign tax expense on income
|
$
|
154.1
|
|
$
|
270.1
|
|
$
|
240.2
|
|
|
2013
|
2012
|
2011
|
||||||
Income tax at the U.S. federal statutory rate
|
$
|
146.0
|
|
$
|
268.1
|
|
$
|
243.9
|
|
Adjustments:
|
|
|
|
||||||
State and local income taxes, net of federal tax benefit
|
10.9
|
|
15.6
|
|
11.2
|
|
|||
Tax on foreign remittances and U.S. tax on foreign income
|
41.0
|
|
9.5
|
|
15.3
|
|
|||
Tax expense related to undistributed earnings of foreign subsidiaries
|
8.7
|
|
—
|
|
—
|
|
|||
Foreign losses without current tax benefits
|
9.5
|
|
16.1
|
|
7.7
|
|
|||
Foreign earnings taxed at different rates including tax holidays
|
(4.4
|
)
|
(18.1
|
)
|
(26.4
|
)
|
|||
U.S. domestic manufacturing deduction
|
(11.3
|
)
|
(7.5
|
)
|
(6.6
|
)
|
|||
U.S. foreign tax credit
|
(25.9
|
)
|
(13.7
|
)
|
—
|
|
|||
U.S. research tax credit
|
(3.8
|
)
|
(0.4
|
)
|
(1.5
|
)
|
|||
Accruals and settlements related to tax audits
|
(16.9
|
)
|
4.3
|
|
1.2
|
|
|||
Other items, net
|
0.3
|
|
(3.8
|
)
|
(4.6
|
)
|
|||
Provision for income taxes
|
$
|
154.1
|
|
$
|
270.1
|
|
$
|
240.2
|
|
Effective income tax rate
|
36.9
|
%
|
35.3
|
%
|
34.5
|
%
|
|
2013
|
2012
|
||||
Deferred tax assets:
|
|
|
||||
Accrued postretirement benefits cost
|
$
|
130.1
|
|
$
|
185.0
|
|
Accrued pension cost
|
—
|
|
137.1
|
|
||
Inventory
|
4.0
|
|
15.4
|
|
||
Other employee benefit accruals
|
20.3
|
|
26.6
|
|
||
Tax loss and credit carryforwards
|
166.7
|
|
145.1
|
|
||
Other, net
|
52.6
|
|
59.9
|
|
||
Valuation allowances
|
(195.9
|
)
|
(183.9
|
)
|
||
|
$
|
177.8
|
|
$
|
385.2
|
|
Pension assets
|
(33.4
|
)
|
—
|
|
||
Deferred tax liabilities - principally depreciation and amortization
|
(239.0
|
)
|
(231.9
|
)
|
||
Net deferred tax (liabilities) assets
|
$
|
(94.6
|
)
|
$
|
153.3
|
|
|
2013
|
2012
|
||||
Beginning balance, January 1
|
$
|
112.6
|
|
$
|
87.2
|
|
Tax positions related to the current year:
|
|
|
||||
Additions
|
9.3
|
|
20.6
|
|
||
Tax positions related to prior years:
|
|
|
||||
Additions
|
6.9
|
|
7.0
|
|
||
Reductions
|
(1.4
|
)
|
(1.7
|
)
|
||
Settlements with tax authorities
|
(77.9
|
)
|
—
|
|
||
Lapses in statutes of limitation
|
—
|
|
(0.5
|
)
|
||
Ending balance, December 31
|
$
|
49.5
|
|
$
|
112.6
|
|
|
December 31, 2013
|
|||||||||||
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||
Assets:
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
384.6
|
|
$
|
320.4
|
|
$
|
64.2
|
|
$
|
—
|
|
Restricted Cash
|
15.1
|
|
—
|
|
15.1
|
|
—
|
|
||||
Short-term investments
|
13.9
|
|
—
|
|
13.9
|
|
—
|
|
||||
Foreign currency hedges
|
0.9
|
|
—
|
|
0.9
|
|
—
|
|
||||
Total Assets
|
$
|
414.5
|
|
$
|
320.4
|
|
$
|
94.1
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
||||||||
Foreign currency hedges
|
$
|
9.3
|
|
$
|
—
|
|
$
|
9.3
|
|
$
|
—
|
|
Total Liabilities
|
$
|
9.3
|
|
$
|
—
|
|
$
|
9.3
|
|
$
|
—
|
|
|
December 31, 2012
|
|||||||||||
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||
Assets:
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
586.4
|
|
$
|
303.9
|
|
$
|
282.5
|
|
$
|
—
|
|
Restricted Cash
|
15.1
|
|
—
|
|
15.1
|
|
—
|
|
||||
Short-term investments
|
17.3
|
|
—
|
|
17.3
|
|
—
|
|
||||
Foreign currency hedges
|
1.2
|
|
—
|
|
1.2
|
|
—
|
|
||||
Total Assets
|
$
|
620.0
|
|
$
|
303.9
|
|
$
|
316.1
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
||||||||
Foreign currency hedges
|
$
|
1.9
|
|
$
|
—
|
|
$
|
1.9
|
|
$
|
—
|
|
Total Liabilities
|
$
|
1.9
|
|
$
|
—
|
|
$
|
1.9
|
|
$
|
—
|
|
|
2013
|
||||||||||||||
|
1st
|
2nd
|
3rd
|
4th
|
Total
|
||||||||||
Net sales
|
$
|
1,089.9
|
|
$
|
1,126.5
|
|
$
|
1,061.5
|
|
$
|
1,063.3
|
|
$
|
4,341.2
|
|
Gross profit
|
274.5
|
|
302.1
|
|
251.7
|
|
263.7
|
|
1,092.0
|
|
|||||
Impairment and restructuring charges
(1)
|
1.2
|
|
6.7
|
|
3.7
|
|
4.8
|
|
16.4
|
|
|||||
Separation costs
(2)
|
—
|
|
—
|
|
—
|
|
13.0
|
|
13.0
|
|
|||||
Net income
(3)
|
75.0
|
|
82.8
|
|
52.5
|
|
52.7
|
|
263.0
|
|
|||||
Net income (loss) attributable to noncontrolling interests
|
(0.1
|
)
|
—
|
|
0.3
|
|
0.1
|
|
0.3
|
|
|||||
Net income attributable to The Timken Company
|
75.1
|
|
82.8
|
|
52.2
|
|
52.6
|
|
262.7
|
|
|||||
Net income per share - Basic:
|
|
|
|
|
|
||||||||||
Total net income per share
|
$
|
0.78
|
|
$
|
0.86
|
|
$
|
0.55
|
|
$
|
0.56
|
|
$
|
2.76
|
|
Net income per share - Diluted:
|
|
|
|
|
|
||||||||||
Total net income per share
|
$
|
0.77
|
|
$
|
0.86
|
|
$
|
0.54
|
|
$
|
0.55
|
|
$
|
2.74
|
|
Dividends per share
|
$
|
0.23
|
|
$
|
0.23
|
|
$
|
0.23
|
|
$
|
0.23
|
|
$
|
0.92
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
||||||||||
|
2012
|
||||||||||||||
|
1st
|
2nd
|
3rd
|
4th
|
Total
|
||||||||||
Net sales
|
$
|
1,421.0
|
|
$
|
1,343.2
|
|
$
|
1,142.5
|
|
$
|
1,080.3
|
|
$
|
4,987.0
|
|
Gross profit
|
411.6
|
|
377.3
|
|
298.9
|
|
278.5
|
|
1,366.3
|
|
|||||
Impairment and restructuring charges
(4)
|
0.2
|
|
16.7
|
|
11.9
|
|
0.7
|
|
29.5
|
|
|||||
Net income
(5)
|
156.0
|
|
183.4
|
|
81.1
|
|
75.4
|
|
495.9
|
|
|||||
Net income (loss) attributable to noncontrolling interests
|
0.3
|
|
(0.2
|
)
|
0.2
|
|
0.1
|
|
0.4
|
|
|||||
Net income attributable to The Timken Company
|
155.7
|
|
183.6
|
|
80.9
|
|
75.3
|
|
495.5
|
|
|||||
Net income per share - Basic:
|
|
|
|
|
|
||||||||||
Total net income per share
|
$
|
1.59
|
|
$
|
1.88
|
|
$
|
0.84
|
|
$
|
0.79
|
|
$
|
5.11
|
|
Net income per share - Diluted:
|
|
|
|
|
|
||||||||||
Total net income per share
|
$
|
1.58
|
|
$
|
1.86
|
|
$
|
0.83
|
|
$
|
0.78
|
|
$
|
5.07
|
|
Dividends per share
|
$
|
0.23
|
|
$
|
0.23
|
|
$
|
0.23
|
|
$
|
0.23
|
|
$
|
0.92
|
|
(1)
|
Impairment and restructuring charges for the second quarter of 2013 included severance and related benefit costs of
$6.0 million
, including pension settlement costs of
$5.2 million
, and exit costs of
$0.7 million
. Impairment and restructuring charges for the third quarter of 2013 included severance and related benefit costs of
$3.2 million
, including pension settlement costs of
$1.5 million
, and exit costs of
$0.5 million
. Impairment and restructuring charges for the fourth quarter of 2013 included severance and related benefit costs of
$6.0 million
, including pension settlement costs of
$0.4 million
, impairment charges of
$0.7 million
and a favorable adjustment for exit costs of
$1.9 million
.
|
(2)
|
Separation costs of
$13.0 million
for the fourth quarter of 2013 related to the planned spinoff of the steel business.
|
(3)
|
Net income for the fourth quarter of 2013 included a gain of
$5.4 million
on the sale of real estate in Brazil.
|
(4)
|
Impairment and restructuring charges for the second quarter of 2012 included severance and related benefit costs of
$16.5 million
, including a curtailment of pension benefits of
$10.7 million
, and exit costs of
$0.2 million
. Impairment and restructuring charges for the third quarter of 2012 included impairment charges of
$6.4 million
, severance and related benefit costs of
$1.3 million
and exit costs of
$4.2 million
.
|
(5)
|
Net income for the second quarter of 2012 included CDSOA receipts of
$109.5 million
, net of expenses.
|
Exhibit
|
|
|
|
|
|
|
|
(3.1
|
)
|
|
Amended Articles of Incorporation of The Timken Company, (effective May 31, 2013) were filed on July 31, 2013 with Form 10-Q (Commission File No. 1-1169) and are incorporated herein by reference.
|
|
|
|
|
(3.2
|
)
|
|
Amended Regulations of The Timken Company adopted on February 14, 2014, were filed on February 14, 2014 with Form 8-K (Commission File No. 1-1169) and are incorporated herein by reference.
|
|
|
|
|
(4.1
|
)
|
|
Second Amended and Restated Credit Agreement, dated as of May 11, 2011, by and among: The Timken Company together with certain of its subsidiaries as Guarantors; Bank of America, N.A. and KeyBank National Association as Co-Administrative Agents; KeyBank National Association as Paying Agent, L/C Issuer and Swing Line Lender; and the other Lenders party thereto, was filed on May 12, 2011 with Form 8-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
(4.2
|
)
|
|
First Amendment to Credit Agreement and Waiver, dated as of November 6, 2013, by and among: The Timken Company, together with certain of its subsidiaries as Guarantors; Bank of America, N.A. and KeyBank National Association as Co-Administrative Agents and the other Lenders party thereto is attached hereto as Exhibit 4.1.
|
|
|
|
|
(4.3
|
)
|
|
Indenture dated as of July 1, 1990, between The Timken Company and Ameritrust Company of New York, was filed with Form S-3 dated July 12, 1990 (Registration No. 333-35773) and is incorporated herein by reference.
|
|
|
|
|
(4.4
|
)
|
|
First Supplemental Indenture, dated as of July 24, 1996, by and between The Timken Company and Mellon Bank, N.A. was filed on November 13, 1996 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
(4.5
|
)
|
|
Indenture, dated as of February 18, 2003, between The Timken Company and The Bank of New York, as Trustee, providing for Issuance of Notes in Series was filed on March 27, 2003 with Form 10-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
(4.6
|
)
|
|
First Supplemental Indenture, dated as of September 14, 2009, by and between The Timken Company and The Bank of New York Mellon Trust Company, N.A. (successor to The Bank of New York Mellon (formerly known as The Bank of New York)), was filed on November 11, 2009 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
(4.7
|
)
|
|
The Company is also a party to agreements with respect to other long-term debt in total amount less than 10% of the Registrant's consolidated total assets. The Registrant agrees to furnish a copy of such agreements upon request.
|
|
|
|
|
(4.8
|
)
|
|
Amended and Restated Receivables Purchase Agreement, dated as of November 30, 2012, by and among: Timken Receivables Corporation; The Timken Corporation; the Purchasers from time to time parties thereto; SunTrust Bank and the Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch was filed on November 30, 2012 with Form 8-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
(4.9
|
)
|
|
Second Amended and Restated Receivables Sale Agreement, dated as of November 10, 2010, between The Timken Corporation and Timken Receivables Corporation was filed on November 10, 2010 with Form 8-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
(4.10
|
)
|
|
Receivables Sale Agreement, dated as of November 10, 2010, between MPB Corporation and Timken Receivables Corporation was filed on November 10, 2010 with Form 8-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
(4.11
|
)
|
|
Amendment No. 1 to Second Amended and Restated Receivables Sale Agreement dated as of November 30, 2012 between The Timken Corporation and Timken Receivables Corporation was filed on November 30, 2012 with Form 8-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
(4.12
|
)
|
|
Amendment No. 1 to Receivables Sale Agreement dated as of November 30, 2012 between MPB Corporation and Timken Receivables Corporation was filed on November 30, 2012 with Form 8-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
Management Contracts and Compensation Plans
|
|||
(10.1
|
)
|
|
The Timken Company 1996 Deferred Compensation Plan for officers and other key employees, amended and restated effective December 31, 2010, was filed on February 17, 2012 with Form 10-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
(10.2
|
)
|
|
The Timken Company Director Deferred Compensation Plan, amended and restated effective December 31, 2008, was filed on February 25, 2010 with Form 10-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
(10.3
|
)
|
|
Form of The Timken Company 1996 Deferred Compensation Plan Election Agreement, amended and restated as of January 1, 2008, was filed on February 25, 2010 with Form 10-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
(10.4
|
)
|
|
Form of The Timken Company Director Deferred Compensation Plan Election Agreement, amended and restated as of January 1, 2008, was filed on February 25, 2010 with Form 10-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
(10.5
|
)
|
|
The Timken Company Long-Term Incentive Plan for directors, officers and other key employees as amended and restated as of February 5, 2008 and approved by the shareholders on May 1, 2008 was filed on March 18, 2008 as Appendix A to the Registrant's Definitive Proxy Statement on Schedule 14A (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
(10.6
|
)
|
|
The Timken Company 2011 Long-Term Incentive Plan for directors, officers and other key employees as approved by the shareholders on May 10, 2011 was filed on May 12, 2011 with Form 8-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
(10.7
|
)
|
|
Amended and Restated Supplemental Pension Plan of The Timken Company, amended and restated effective as of January 1, 2011, was filed on February 17, 2012 with Form 10-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
(10.8
|
)
|
|
The Timken Company Senior Executive Management Performance Plan, as amended and restated as of February 8, 2010 and approved by shareholders May 11, 2010, was filed on May 12, 2010 with Form 8-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
(10.9
|
)
|
|
Form of Amended and Restated Severance Agreement (for Executive Officers appointed prior to January 1, 2011) was filed on December 18, 2009 with Form 8-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
(10.10
|
)
|
|
Form of Severance Agreement (for Executive Officers appointed on or after January 1, 2011 and other officers) as adopted on December 9, 2010 was filed on February 22, 2011 with Form 10-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
(10.11
|
)
|
|
Amendment No. 1 to the Amended and Restated Severance Agreement (for Executive Officers appointed prior to January 1, 2011) as adopted on December 9, 2010 was filed on February 22, 2011 with Form 10-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
(10.12
|
)
|
|
Form of Indemnification Agreement entered into with all Directors who are not Executive Officers of the Company was filed on July 31, 2013 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
(10.13
|
)
|
|
Form of Indemnification Agreement entered into with all Executive Officers of the Company who are not Directors of the Company was filed on July 31, 2013 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
(10.14
|
)
|
|
Form of Indemnification Agreement entered into with all Executive Officers of the Company who are also Directors of the Company was filed on July 31, 2013 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
(10.15
|
)
|
|
Form of Amended and Restated Employee Excess Benefits Agreement entered into with certain Executive Officers and certain key employees of the Company, was filed on February 26, 2009 with Form 10-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
(10.16
|
)
|
|
Form of Amended and Restated Employee Excess Benefits Agreement entered into with the Chief Executive Officer and the President of Steel, was filed on February 26, 2009 with Form 10-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
(10.17
|
)
|
|
Form of Employee Excess Benefits Agreement, entered into with all Executive Officers after January 1, 2011, was filed on August 4, 2011 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
(10.18
|
)
|
|
Form of Amendment No. 1 to The Amended and Restated Employee Excess Benefit Agreement, entered into with certain Executive Officers and certain key employees of the Company, was filed on September 2, 2009 with Form 8-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
Management Contracts and Compensation Plans
|
|||
(10.19
|
)
|
|
Form of Amendment No. 1 to The Amended and Restated Employee Excess Benefits Agreement with all Executive Officers after January 1, 2011 and Form of Amendment No. 2 to the Amended and Restated Excess Benefits Agreement with certain Executive Officers and certain key employees of the Company, as adopted December 8, 2011, was filed on February 17, 2012 with Form 10-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
(10.20
|
)
|
|
Form of Amendment No. 1 to The Amended and Restated Employee Excess Benefits Agreement entered into with the Chief Executive Officer and the President of Steel, as adopted December 8, 2011, was filed on February 17, 2012 with Form 10-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
(10.21
|
)
|
|
Form of Amendment No. 2 to The Amended and Restated Employee Excess Benefits Agreement entered into with the Chief Executive Officer and the President of Steel, as adopted December 8, 2011, was filed on February 17, 2012 with Form 10-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
(10.22
|
)
|
|
Form of Nonqualified Stock Option Agreement for nontransferable options without dividend credit, as adopted on April 17, 2001, was filed on May 14, 2001 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
(10.23
|
)
|
|
Form of Nonqualified Stock Option Agreement for Officers, as adopted on January 31, 2005, was filed on February 4, 2005 with Form 8-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
(10.24
|
)
|
|
Form of Nonqualified Stock Option Agreement for Non-Employee Directors, as adopted on January 31, 2005, was filed on March 15, 2005 with Form 10-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
(10.25
|
)
|
|
Form of Nonqualified Stock Option Agreement for Officers, as adopted on February 6, 2006, was filed on February 10, 2006 with Form 8-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
(10.26
|
)
|
|
Form of Nonqualified Stock Option Agreement for Officers, as adopted on November 6, 2008, was filed on February 26, 2009 with Form 10-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
(10.27
|
)
|
|
Form of Nonqualified Stock Option Agreement for Officers, as adopted on December 10, 2009, was filed on February 25, 2010 with Form 10-K (Commission File No. 1-1169), and is incorporated herein by reference.
|
|
|
|
|
(10.28
|
)
|
|
Form of Nonqualified Stock Option Agreement for Non-Employee Directors, as adopted on December 8, 2011, was filed on February 17, 2012 with Form 10-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
(10.29
|
)
|
|
Form of Nonqualified Stock Option Agreement for transferable options for Officers, as adopted on December 8, 2011, was filed on February 17, 2012 with Form 10-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
(10.30
|
)
|
|
Form of Nonqualified Stock Option Agreement for non-transferable options for Non-Officer Employees, as adopted on December 8, 2011, was filed on February 17, 2012 with Form 10-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
(10.31
|
)
|
|
Form of Restricted Share Agreement for Non-Employee Directors, as adopted on January 31, 2005, was filed on March 15, 2005 with Form 10-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
(10.32
|
)
|
|
Form of Restricted Shares Agreement, as adopted on November 6, 2008, was filed on February 17, 2012 with Form 10-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
(10.33
|
)
|
|
Form of Restricted Share Agreement for Non-Employee Directors, as adopted on December 8, 2011, was filed on February 17, 2012 with Form 10-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
(10.34
|
)
|
|
Form of Performance Unit Agreement, as adopted on February 4, 2008, was filed on February 7, 2008 with Form 8-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
(10.35
|
)
|
|
Form of Performance Shares Agreement was filed on February 11, 2010 with Form 8-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
(10.36
|
)
|
|
Form of Deferred Shares Agreement, as adopted on February 2, 2009, was filed on February 17, 2012 with Form 10-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
(10.37
|
)
|
|
Form of Deferred Shares Agreement entered into with employees after January 1, 2012, as adopted on December 8, 2011, was filed on February 17, 2012 with Form 10-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
By: /s/ James W. Griffith
|
|
By: /s/ Glenn A. Eisenberg
|
James W. Griffith
|
|
Glenn A. Eisenberg
|
President, Chief Executive Officer and Director
|
|
Executive Vice President - Finance
|
(Principal Executive Officer)
|
|
and Administration (Principal Financial Officer)
|
Date: February 28, 2014
|
|
Date: February 28, 2014
|
|
|
|
|
|
By: /s/ J. Ted Mihaila
|
|
|
J. Ted Mihaila
|
|
|
Senior Vice President and Controller
|
|
|
(Principal Accounting Officer)
|
|
|
Date: February 28, 2014
|
By: /s/ John M. Ballbach *
|
|
By: /s/ John P. Reilly *
|
John M. Ballbach, Director
|
|
John P. Reilly, Director
|
Date: February 28, 2014
|
|
Date: February 28, 2014
|
|
|
|
By: /s/ Phillip R. Cox *
|
|
By: /s/ Frank C. Sullivan *
|
Phillip R. Cox, Director
|
|
Frank C. Sullivan, Director
|
Date: February 28, 2014
|
|
Date: February 28, 2014
|
|
|
|
By: /s/ Diane C. Creel *
|
|
By: /s/ John M. Timken, Jr.*
|
Diane C. Creel, Director
|
|
John M. Timken, Jr., Director
|
Date: February 28, 2014
|
|
Date: February 28, 2014
|
|
|
|
By: /s/ Richard G. Kyle *
|
|
By: /s/ Ward J. Timken *
|
Richard G. Kyle, Director
|
|
Ward J. Timken, Director
|
Date: February 28, 2014
|
|
Date: February 28, 2014
|
|
|
|
By: /s/ John A. Luke, Jr.*
|
|
By: /s/ Ward J. Timken, Jr.*
|
John A. Luke, Jr., Director
|
|
Ward J. Timken, Jr., Director
|
Date: February 28, 2014
|
|
Date: February 28, 2014
|
|
|
|
|
|
By: /s/ Jacqueline F. Woods *
|
Christopher L. Mapes, Director
|
|
Jacqueline F. Woods, Director
|
|
|
Date: February 28, 2014
|
|
|
|
By: /s/ Joseph W. Ralston *
|
|
* By: /s/ Glenn A. Eisenberg
|
Joseph W. Ralston, Director
|
|
Glenn A. Eisenberg, attorney-in-fact
|
Date: February 28, 2014
|
|
By authority of Power of Attorney
|
|
|
filed as Exhibit 24 hereto
|
|
|
Date: February 28, 2014
|
Allowance for uncollectible accounts:
|
2013
|
2012
|
2011
|
||||||
Balance at Beginning of Period
|
$
|
12.1
|
|
$
|
19.0
|
|
$
|
27.6
|
|
Additions:
|
|
|
|
||||||
Charged to Costs and Expenses
(1)
|
1.5
|
|
7.6
|
|
14.4
|
|
|||
Charged to Other Accounts
(2)
|
—
|
|
(0.6
|
)
|
(2.5
|
)
|
|||
Deductions
(3)
|
3.3
|
|
13.9
|
|
20.5
|
|
|||
Balance at End of Period
|
$
|
10.3
|
|
$
|
12.1
|
|
$
|
19.0
|
|
|
|
|
|
||||||
Allowance for surplus and obsolete inventory:
|
2013
|
2012
|
2011
|
||||||
Balance at Beginning of Period
|
$
|
21.4
|
|
$
|
30.9
|
|
$
|
30.8
|
|
Additions:
|
|
|
|
||||||
Charged to Costs and Expenses
(4)
|
11.2
|
|
10.8
|
|
12.2
|
|
|||
Charged to Other Accounts
(2)
|
0.2
|
|
1.2
|
|
5.2
|
|
|||
Deductions
(5)
|
12.5
|
|
21.5
|
|
17.3
|
|
|||
Balance at End of Period
|
$
|
20.3
|
|
$
|
21.4
|
|
$
|
30.9
|
|
|
|
|
|
||||||
Valuation allowance on deferred tax assets:
|
2013
|
2012
|
2011
|
||||||
Balance at Beginning of Period
|
$
|
183.9
|
|
$
|
179.7
|
|
$
|
174.9
|
|
Additions
|
|
|
|
||||||
Charged to Costs and Expenses
(6)
|
32.1
|
|
13.8
|
|
22.6
|
|
|||
Charged to Other Accounts
(7)
|
(4.2
|
)
|
13.8
|
|
(3.9
|
)
|
|||
Deductions
(8)
|
15.9
|
|
23.4
|
|
13.9
|
|
|||
Balance at End of Period
|
$
|
195.9
|
|
$
|
183.9
|
|
$
|
179.7
|
|
(1)
|
Provision for uncollectible accounts included in expenses.
|
(2)
|
Currency translation and change in reserves due to acquisitions, net of divestitures.
|
(3)
|
Actual accounts written off against the allowance—net of recoveries.
|
(4)
|
Provisions for surplus and obsolete inventory included in expenses.
|
(5)
|
Inventory items written off against the allowance.
|
(6)
|
Increase in valuation allowance is recorded as a component of the provision for income taxes.
|
(7)
|
Includes valuation allowances recorded against other comprehensive income/loss or goodwill.
|
(8)
|
Amount primarily relates to the reversal of valuation allowances due to the realization of net operating loss carryforwards.
|
GUARANTORS:
|
TIMKEN US LLC
,
|
1.
|
Payment of RSUs
. The RSUs will become payable if the Restriction Period lapses and Grantee’s right to receive payment for the RSUs becomes nonforfeitable (“Vest,” “Vesting” or “Vested”) in accordance with Section 3 and Section 4 of this Agreement.
|
2.
|
RSUs Not Transferrable
. None of the RSUs nor any interest therein or in any Common Shares underlying such RSUs will be transferable other than by will or the laws of descent and distribution prior to payment.
|
3.
|
Vesting of RSUs
. Subject to the terms and conditions of Section 4 and Section 5 of this Agreement, the RSUs will Vest on the third anniversary of the Date of Grant if the Grantee shall have been in the continuous employ of the Company or a Subsidiary from the Date of Grant until the third anniversary of the Date of Grant. For purposes of this Agreement, the continuous employment of Grantee with the Company or a Subsidiary will not be deemed to have been interrupted, and Grantee shall not be deemed to have ceased to be an employee of the Company or a Subsidiary, by reason of the transfer of Grantee’s employment among the Company and its Subsidiaries.
|
4.
|
Alternative Vesting of RSUs
. Notwithstanding the provisions of Section 3 of this Agreement, and subject to the payment provisions of Section 6 hereof, the RSUs will Vest earlier than the times provided for in Section 3 under the following circumstances:
|
(a)
|
Death or Disability
: If Grantee should die or become permanently disabled while in the employ of the Company or a Subsidiary, then the RSUs will immediately Vest in full. If Grantee should die or become permanently disabled during the period that Grantee is deemed to be in the continuous employ of the Company or a Subsidiary pursuant to Section 4(b), 4(d) or 4(e), then the RSUs will immediately Vest in full, except that to the extent that Section 4(e) applies, the RSUs will immediately Vest only to the extent that the RSUs would have become Vested pursuant to Section 4(e). For purposes of this Agreement, “permanently disabled” means that Grantee has qualified for long-term disability benefits under a disability plan or program of the Company or, in the absence of a disability plan or program of the Company, under a government-sponsored disability program and is “disabled” within the meaning of Section 409A(a)(2)(C) of the Code.
|
(b)
|
Retirement
: If Grantee should retire with the Company’s consent, then Grantee shall Vest in the RSUs in accordance with the terms and conditions of Section 3 as if Grantee had remained in the continuous employ of the Company or a Subsidiary from the Date of Grant until the third anniversary of the Date of Grant as described in Section 3 or the occurrence of a circumstance referenced in Section 4(a) or Section 4(c), whichever occurs first. For purposes of this Agreement, “retire with the Company’s consent” means: (i) the retirement of Grantee prior to age 62 under a retirement plan of the Company or a Subsidiary, if the Board or the Committee determines that Grantee’s retirement is for the convenience of the Company or a Subsidiary; or (ii) the retirement of Grantee at or after age 62 under a retirement plan of the Company or a Subsidiary.
|
(c)
|
Change in Control
:
|
(i)
|
Upon a Change in Control occurring during the Restriction Period while Grantee is an employee of the Company or a Subsidiary, to the extent the RSUs have not been forfeited, the RSUs will immediately Vest in full (except to the extent that a Replacement Award is provided to Grantee for the RSUs). If Grantee is deemed to be in the continuous employ of the Company or a Subsidiary pursuant to Section 4(b), 4(d) or 4(e), upon a Change in Control during the Restriction Period, then the RSUs will immediately Vest in full, except that to the extent that Section 4(e) applies, the RSUs will Vest only to the extent that the RSUs would have become Vested pursuant to Section 4(e).
|
(ii)
|
For purposes of this Agreement, a “Replacement Award” means an award (A) of restricted stock units, (B) that has a value at least equal to the value of the RSUs, (C) that relates to publicly traded equity securities of the Company or its successor in the Change in Control (or another entity that is affiliated with the Company or its successor following the Change in Control), (D) the tax consequences of which, under the Code, if Grantee is subject to U.S. federal income tax under the Code, are not less favorable to Grantee than the tax consequences of the RSUs, (E) that vests in full upon a termination of Grantee’s employment with Company or its successor in the Change in Control (or another entity that is affiliated with the Company or its successor following the Change in Control) for Good Reason by Grantee or without Cause by such employer within a period of two years after the Change in Control, and (F) the other terms and conditions of which are not less favorable to Grantee than the terms and conditions of the RSUs (including the provisions that would apply in the event of a subsequent Change in Control). A Replacement Award may be granted only to the extent it conforms to the requirements of Treasury Regulation 1.409A-3(i)(5)(iv)(B) or otherwise does not result in the RSUs or Replacement Award failing to comply with Section 409A of the Code. Without limiting the generality of the foregoing, the Replacement Award may take the form of a continuation of the RSUs if the requirements of the preceding sentence are satisfied. The determination of whether the conditions of this Section 4(c)(ii) are satisfied will be made by the Committee, as constituted immediately before the Change in Control, in its sole discretion.
|
(iii)
|
For purposes of Section 4(c)(ii), “Cause” will be defined not less favorably with respect to Grantee than: any intentional act of fraud, embezzlement or theft in connection with the Grantee’s duties with the Company, any intentional wrongful disclosure of secret processes or confidential information of the Company or a Subsidiary, or any intentional wrongful engagement in any competitive activity that would constitute a material breach of Grantee’s duty of loyalty to the Company, and no act, or failure to act, on the part of Grantee shall be deemed “intentional” unless done or omitted to be done by Grantee not in good faith and without reasonable belief that Grantee’s action or omission was in or not opposed to the best interest of the Company;
provided
, that for any Grantee who is party to an individual severance or employment agreement defining Cause, “Cause” will have the meaning set forth in such agreement. For purposes of Section 4(c)(ii), “Good Reason” will be defined to mean a material reduction in the nature or scope of the responsibilities, authorities or duties of Grantee attached to Grantee’s position held immediately prior to the Change in Control, a change of more than 60 miles in the location of Grantee’s principal office immediately prior to the Change in Control, or a material reduction in Grantee’s remuneration upon or after the Change in Control;
provided
, that no later than 90 days following an event constituting Good Reason Grantee gives notice to the Company of the occurrence of such event and the Company fails to cure the event within 30 days following the receipt of such notice.
|
(iv)
|
If a Replacement Award is provided, notwithstanding anything in this Agreement to the contrary, any outstanding RSUs which at the time of the Change in Control are not subject to a “substantial risk of forfeiture” (within the meaning of Section 409A of the Code) will be deemed to be Vested at the time of such Change in Control.
|
(d)
|
Divestiture
: If Grantee’s employment with the Company or a Subsidiary terminates as the result of a divestiture, then Grantee shall Vest in the RSUs in accordance with the terms and conditions of Section 3 as if Grantee had remained in the continuous employ of the Company or a Subsidiary from the Date of Grant until the third anniversary of the Date of Grant as described in Section 3 or the occurrence of a circumstance referenced in Section 4(a) or Section 4(c), whichever occurs first. For the purposes of this Agreement, the term “divestiture” shall mean a permanent disposition to a Person other than the Company or any Subsidiary of a plant or other facility or property at which Grantee performs a majority of Grantee’s services whether such disposition is effected by means of a sale of assets, a sale of Subsidiary stock or otherwise.
|
(e)
|
Layoff
: If (i) Grantee’s employment with the Company or a Subsidiary terminates as the result of a layoff and (ii) Grantee is entitled to receive severance pay pursuant to the terms of any severance pay plan of the Company in effect at the time of Grantee’s termination of employment that provides for severance pay calculated by multiplying Grantee’s base compensation by a specified severance period, then Grantee shall Vest in a number of RSUs equal to the product of (x) the number of RSUs in which Grantee would have Vested in accordance with the terms and conditions of Section 3 if Grantee had remained in the continuous employ of the Company or a Subsidiary from the Date of Grant until the third anniversary of the Date of Grant or the occurrence of a circumstance referenced in Section 4(a) or Section 4(c), whichever occurs first, multiplied by (y) a fraction (in no case greater than 1), the numerator of which is the number of whole months from the Date of Grant through the end of the specified severance period and the denominator of which is 36. For purposes of this Agreement, a “layoff” shall mean the involuntary termination by the Company or any Subsidiary of Grantee’s employment with the Company or any Subsidiary due to (A) a reduction in force leading to a permanent downsizing of the salaried workforce, (B) a permanent shutdown of the plant, department or subdivision in which Grantee works, or (C) an elimination of position.
|
5.
|
Forfeiture of RSUs
. Any RSUs that have not Vested pursuant to Section 3 or Section 4 by the third anniversary of the Date of Grant will be forfeited automatically and without further notice on such date (or earlier if, and on such date that, Grantee ceases to be an employee of the Company or a Subsidiary prior to the third anniversary of the Date of Grant for any reason other than as described in Section 4
|
6.
|
Form and Time of Payment of RSUs
.
|
(a)
|
General
: Subject to Section 5 and Section 6(b), payment for Vested RSUs will be made in cash or Common Shares (as determined by the Committee) within 10 days following the Vesting date specified in Section 3.
|
(b)
|
Other Payment Events
. Notwithstanding Section 6(a), to the extent that the RSUs are Vested on the dates set forth below, payment with respect to the RSUs will be made as follows:
|
(i)
|
Change in Control
. Upon a Change in Control, Grantee is entitled to receive payment for Vested RSUs in cash or Common Shares (as determined by the Committee) on the date of the Change in Control;
provided
,
however
, that if such Change in Control would not qualify as a permissible date of distribution under Section 409A(a)(2)(A) of the Code, and the regulations thereunder, and where Section 409A of the Code applies to such distribution, Grantee is entitled to receive the corresponding payment on the date that would have otherwise applied pursuant to Sections 6(a) or 6(b)(ii) as though such Change in Control had not occurred.
|
(ii)
|
Death or Disability
. On the date of Grantee’s death or the date Grantee becomes permanently disabled, Grantee is entitled to receive payment for Vested RSUs in cash or Common Shares (as determined by the Committee) on such date.
|
7.
|
Payment of Dividend Equivalents
. With respect to each of the RSUs covered by this Agreement, Grantee shall be credited on the records of the Company with dividend equivalents in an amount equal to the amount per Common Share of any cash dividends declared by the Board on the outstanding Common Shares during the period beginning on the Date of Grant and ending either on the date on which Grantee receives payment for the RSUs pursuant to Section 6 hereof or at the time when the RSUs are forfeited in accordance with Section 5 of this Agreement. These dividend equivalents will accumulate without interest and, subject to the terms and conditions of this Agreement, will be paid at the same time, to the same extent and in the same manner, in cash or Common Shares (as determined by the Committee) as the RSUs for which the dividend equivalents were credited.
|
8.
|
Detrimental Activity and Recapture
.
|
(a)
|
In the event that, as determined by the Committee, Grantee shall engage in Detrimental Activity during employment with the Company or a Subsidiary, the RSUs will be forfeited automatically and without further notice at the time of that determination notwithstanding any other provision of this Agreement.
|
(b)
|
If a Restatement occurs and the Committee determines that Grantee is personally responsible for causing the Restatement as a result of Grantee’s personal misconduct or any fraudulent activity on the part of Grantee, then the Committee has discretion to, based on applicable facts and circumstances and subject to applicable law, cause the Company to recover all or any portion (but no more than 100%) of the RSUs earned or payable to Grantee for some or all of the years covered by the Restatement. The amount of any earned or payable RSUs recovered by the Company shall be limited to the amount by which such earned or payable RSUs exceeded the amount that would have been earned by or paid to Grantee had the Company’s financial statements for the applicable restated fiscal year or years been initially filed as restated, as reasonably determined by the Committee. The Committee shall also determine whether the Company shall effect any recovery under this Section 8(b) by: (i) seeking repayment from Grantee; (ii) reducing, except with respect to any non-qualified deferred compensation under Section 409A of the Code, the amount that would otherwise be payable to Grantee under any compensatory plan, program or arrangement maintained by the Company (subject to applicable law and the terms and conditions of such plan, program or arrangement); (iii) by withholding, except with respect to any non-qualified deferred compensation under Section 409A of the Code, payment of future increases in compensation (including the payment of any discretionary bonus amount) that would otherwise have been made to Grantee in accordance with the Company’s compensation practices; or (iv) by any combination of these alternatives. For purposes of this Agreement, “Restatement” means a restatement of any part of the Company’s financial statements for any fiscal year or years after 2013 due to material noncompliance with any financial reporting requirement under the U.S. securities laws applicable to such fiscal year or years.
|
9.
|
Compliance with Law
. The Company shall make reasonable efforts to comply with all applicable federal and state securities laws;
provided
,
however
, notwithstanding any other provision of this Agreement, the Company shall not be obligated to issue any of the Common Shares covered by this Agreement if the issuance thereof would result in violation of any such law.
|
10.
|
Adjustments
. Subject to Section 12 of the Plan, the Committee shall make any adjustments in the number of RSUs or kind of shares of stock or other securities underlying the RSUs covered by this Agreement that the Committee may determine to be equitably required to prevent any dilution or expansion of Grantee’s rights under this Agreement that otherwise would result from any (a) stock dividend, stock split, combination of shares, recapitalization or other change in the capital structure of the Company, (b) merger, consolidation, separation, reorganization or partial or complete liquidation involving the Company or (c) other transaction or event having an effect similar to any of those referred to in Section 10(a) or 10(b) hereof. Furthermore, in the event that any transaction or event described or referred to in the immediately preceding sentence shall occur, the Committee may provide in substitution of any or all of Grantee’s rights under this Agreement such alternative consideration as the Committee may determine in good faith to be equitable under the circumstances.
|
11.
|
Withholding Taxes
. If the Company is required to withhold federal, state, local, employment, or foreign taxes, or, to the extent permitted under Section 409A of the Code, any other applicable taxes, in connection with Grantee’s right to receive Common Shares under this Agreement (regardless of whether Grantee is entitled to the delivery of any Common Shares at that time), and the amounts available to the Company for such withholding are insufficient, it shall be a condition to the receipt of any Common Shares or any other benefit provided for under this Agreement that Grantee make arrangements satisfactory to the Company for payment of the balance of the taxes. Grantee may satisfy such tax obligation by paying the Company cash via personal check. Alternatively, Grantee may elect that all or any part of such tax obligation be satisfied by the Company’s retention of a portion of the Common Shares provided for under this Agreement or by Grantee’s surrender of a portion of the Common Shares that he or she has owned for at least 6 months. In no event, however, shall the Company accept Common Shares for payment of taxes in excess of required tax withholding rates. If an election is made to satisfy Grantee’s tax obligation with the release or surrender of Common Shares, the Common Shares shall be credited in the following manner: (a) at the Market Value per Share on the date of delivery if the tax obligations arise due to the delivery of Common Shares under this Agreement; or (b) at the Market Value per Share on the date the tax obligation arises, if for a reason other than the delivery of Common Shares under this Agreement.
|
12.
|
Right to Terminate Employment
. No provision of this Agreement will limit in any way whatsoever any right that the Company or a Subsidiary may otherwise have to terminate the employment of Grantee at any time.
|
13.
|
Relation to Other Benefits
. Any economic or other benefit to Grantee under this Agreement or the Plan will not be taken into account in determining any benefits to which Grantee may be entitled under any profit‑sharing, retirement or other benefit or compensation plan maintained by the Company or a Subsidiary and will not affect the amount of any life insurance coverage available to any beneficiary under any life insurance plan covering employees of the Company or a Subsidiary.
|
14.
|
Amendments
. Any amendment to the Plan will be deemed to be an amendment to this Agreement to the extent that the amendment is applicable to this Agreement;
provided
,
however
, that no amendment will adversely affect the rights of Grantee with respect to the Common Shares or other securities covered by this Agreement without Grantee’s consent. Notwithstanding the foregoing, the limitation requiring the consent of Grantee to certain amendments will not apply to any amendment that is deemed necessary by the Company to ensure compliance with Section 409A of the Code.
|
15.
|
Severability
. In the event that one or more of the provisions of this Agreement is invalidated for any reason by a court of competent jurisdiction, any provision so invalidated will be deemed to be separable from the other provisions of this Agreement, and the remaining provisions of this Agreement will continue to be valid and fully enforceable.
|
16.
|
Governing Law
. This Agreement is made under, and shall be construed in accordance with, the internal substantive laws of the State of Ohio.
|
17.
|
Compliance with Section 409A of the Code.
To the extent applicable, it is intended that this Agreement and the Plan comply with the provisions of Section 409A of the Code, so that the income inclusion provisions of Section 409A(a)(1) of the Code do not apply to Grantee. This Agreement and the Plan shall be administered in a manner consistent with this intent. Reference to Section 409A of the Code is to Section 409A of the Internal Revenue Code of 1986, as amended, and will also include any regulations or any other formal guidance promulgated with respect to such Section by the U.S. Department of the Treasury or the Internal Revenue Service.
|
|
|
Years Ended December 31,
|
||||||||||||||
|
|
2013
|
2012
|
2011
|
2010
|
2009
|
||||||||||
Income (loss) from continuing operations before tax
|
|
$
|
417.1
|
|
$
|
766.0
|
|
$
|
696.8
|
|
$
|
405.5
|
|
$
|
(94.2
|
)
|
|
|
|
|
|
|
|
||||||||||
Share of undistributed (losses) income from 50%-or-less-owned affiliates, excluding affiliates with guaranteed debt
|
|
$
|
(0.4
|
)
|
$
|
0.5
|
|
$
|
0.5
|
|
$
|
(0.2
|
)
|
$
|
0.9
|
|
Amortization of capitalized interest
|
|
2.0
|
|
2.0
|
|
2.0
|
|
2.0
|
|
1.9
|
|
|||||
Interest expense
|
|
24.4
|
|
31.1
|
|
36.8
|
|
38.2
|
|
41.9
|
|
|||||
Interest portion of rental expense
|
|
8.0
|
|
8.5
|
|
7.2
|
|
8.0
|
|
8.5
|
|
|||||
Earnings (loss)
|
|
$
|
451.1
|
|
$
|
808.1
|
|
$
|
743.3
|
|
$
|
453.5
|
|
$
|
(41.0
|
)
|
|
|
|
|
|
|
|
||||||||||
Interest
|
|
$
|
37.1
|
|
$
|
36.0
|
|
$
|
38.0
|
|
$
|
38.9
|
|
$
|
43.7
|
|
Interest portion of rental expense
|
|
8.0
|
|
8.5
|
|
7.2
|
|
8.0
|
|
8.5
|
|
|||||
Fixed Charges
|
|
$
|
45.1
|
|
$
|
44.5
|
|
$
|
45.2
|
|
$
|
46.9
|
|
$
|
52.2
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of Earnings to Fixed Charges
|
|
10.00
|
|
18.16
|
|
16.44
|
|
9.67
|
|
(0.79
|
)
|
Exhibit 21. Subsidiaries of the Registrant
|
Name
|
|
State or sovereign power under laws of which organized
|
Percentage of voting securities owned directly or indirectly by Company
|
|
|
|
United States
|
|
|
Bearing Inspection, Inc.
|
|
California
|
100.0
|
%
|
Drives Brazil Holdings I, LLC
|
|
Delaware
|
100.0
|
%
|
Drives Brazil Holdings II, LLC
|
|
Delaware
|
100.0
|
%
|
EDC, Inc.
|
|
Ohio
|
100.0
|
%
|
MPB Corporation
|
|
Delaware
|
100.0
|
%
|
Rail Bearing Service LLC
|
|
Virginia
|
100.0
|
%
|
The Timken Corporation
|
|
Ohio
|
100.0
|
%
|
The Timken Service and Sales Company
|
|
Ohio
|
100.0
|
%
|
Timken Aerospace Transmissions, LLC
|
|
Delaware
|
100.0
|
%
|
Timken Alcor Aerospace Technologies, Inc.
|
|
Delaware
|
100.0
|
%
|
Timken Boring Specialties, LLC
|
|
Delaware
|
100.0
|
%
|
Timken Communications Company
|
|
Ohio
|
100.0
|
%
|
Timken Drives LLC
|
|
Delaware
|
100.0
|
%
|
Timken Gears & Services Inc.
|
|
Ohio
|
100.0
|
%
|
Timken Holdings LLC
|
|
Delaware
|
100.0
|
%
|
Timken Housed Units, Inc.
|
|
Washington
|
100.0
|
%
|
Timken ILS Dayton, Inc.
|
|
Ohio
|
100.0
|
%
|
Timken Industrial Services, LLC
|
|
Delaware
|
100.0
|
%
|
Timken Motor & Crane Services LLC
|
|
Delaware
|
100.0
|
%
|
Timken Motor Services Northeast LLC
|
|
Delaware
|
100.0
|
%
|
Timken Newco Corp.
|
|
Delaware
|
100.0
|
%
|
Timken Receivables Corporation
|
|
Delaware
|
100.0
|
%
|
Timken U.S. Holdings LLC
|
|
Delaware
|
100.0
|
%
|
Timken US LLC
|
|
Delaware
|
100.0
|
%
|
TimkenSteel Corporation
|
|
Ohio
|
100.0
|
%
|
TSB Metal Recycling LLC
|
|
Ohio
|
100.0
|
%
|
|
|
|
|
|
|
|
International
|
|
|
Australian Timken Proprietary Limited
|
|
Australia
|
100.0
|
%
|
Drives do Brasil Participacoes Ltda.
|
|
Brazil
|
100.0
|
%
|
Drive Comerico, Importacoes e Exportacoes Ltda.
|
|
Brazil
|
100.0
|
%
|
FirstBridge (Shanghai) Trading Co., Ltd.
|
|
China
|
100.0
|
%
|
Hamilton Gear ULC
|
|
Canada
|
100.0
|
%
|
Jiangsu TWB Bearings Co., Ltd.
|
|
China
|
100.0
|
%
|
Nihon Timken K.K.
|
|
Japan
|
100.0
|
%
|
PTBridge (Hong Kong) Investment Limited
|
|
Hong Kong
|
100.0
|
%
|
Timken (Anshan) Industrial Services Co., Ltd.
|
|
China
|
60.0
|
%
|
Timken (Bermuda) L.P.
|
|
Bermuda
|
100.0
|
%
|
Timken (Canada) Holdings II ULC
|
|
Canada
|
100.0
|
%
|
Timken (Chengdu) Aerospace and Precision Products Co., Ltd.
|
|
China
|
100.0
|
%
|
Timken (China) Investment Co., Ltd.
|
|
China
|
100.0
|
%
|
Timken (Gibraltar) 2 Limited
|
|
Gibraltar
|
100.0
|
%
|
Timken (Gibraltar) Limited
|
|
Gibraltar
|
100.0
|
%
|
Timken (Hong Kong) Holding Limited
|
|
Hong Kong
|
100.0
|
%
|
Timken Mex Holdings SARL
|
|
Luxembourg
|
100.0
|
%
|
Timken (Shanghai) Distribution and Sales Co., Ltd.
|
|
China
|
100.0
|
%
|
Timken (Wuxi) Bearings Co., Ltd.
|
|
China
|
100.0
|
%
|
Timken Alloy Steel Europe Limited
|
|
England
|
100.0
|
%
|
Timken Argentina Sociedad De Responsabilidad Limitada
|
|
Argentina
|
100.0
|
%
|
Timken Australia Holdings ULC
|
|
Canada
|
100.0
|
%
|
Timken Bermuda Treasury Ltd
|
|
Bermuda
|
100.0
|
%
|
Timken Canada GP ULC
|
|
Canada
|
100.0
|
%
|
Timken Canada Holdings ULC
|
|
Canada
|
100.0
|
%
|
Timken Canada LP
|
|
Canada
|
100.0
|
%
|
Timken Colombia SAS
|
|
Columbia
|
100.0
|
%
|
Timken De Mexico, S.A. De C.V.
|
|
Mexico
|
100.0
|
%
|
Timken De Venezuela C.A.
|
|
Venezuela
|
100.0
|
%
|
Timken Do Brasil Comercial Importadora LTDA.
|
|
Brazil
|
100.0
|
%
|
Timken Engineering and Research - India Private Limited
|
|
India
|
100.0
|
%
|
Timken Espana, S.L.
|
|
Spain
|
100.0
|
%
|
Timken Europe B.V.
|
|
Netherlands
|
100.0
|
%
|
Timken Global Treasury SARL
|
|
Luxembourg
|
100.0
|
%
|
Timken GmbH
|
|
Germany
|
100.0
|
%
|
Timken ILS Cheltenham Limited
|
|
England
|
100.0
|
%
|
Timken ILS Limited
|
|
England
|
100.0
|
%
|
Timken India Limited
|
|
India
|
75.0
|
%
|
Timken Italia S.r.l.
|
|
Italy
|
100.0
|
%
|
Timken Korea Limited Liability Corporation
|
|
South Korea
|
100.0
|
%
|
Timken Lux Holdings II S.A R.L.
|
|
Luxembourg
|
100.0
|
%
|
Timken Luxembourg Holdings SARL
|
|
Luxembourg
|
100.0
|
%
|
Timken Middle East FZE
|
|
Dubai
|
100.0
|
%
|
Timken Polska SP z.o.o.
|
|
Poland
|
100.0
|
%
|
Timken Romania SA
|
|
Romania
|
98.9
|
%
|
Timken-Rus Service Company, ooo
|
|
Russia
|
100.0
|
%
|
Timken SBB S.R.L.
|
|
Romania
|
100.0
|
%
|
Timken Singapore PTE Ltd.
|
|
Singapore
|
100.0
|
%
|
Timken South Africa Holdings
|
|
South Africa
|
100.0
|
%
|
Timken South Africa (PTY) Limited
|
|
South Africa
|
100.0
|
%
|
Timken UK Limited
|
|
England
|
100.0
|
%
|
Timken-XEMC (Hunan) Bearings Co., Ltd.
|
|
China
|
80.0
|
%
|
TTC Asia Limited
|
|
Cayman Islands
|
100.0
|
%
|
Yantai Timken Co., Ltd.
|
|
China
|
100.0
|
%
|
(1)
|
Registration Statements (Form S-8 No. 333-441155; Form S-8 No. 333-157722) pertaining to the OH&R Investment Plan
|
(2)
|
Registration Statement (Form S-8 No. 333-43847) pertaining to The Timken Company International Stock Ownership Plan
|
(3)
|
Registration Statement (Form S-8 No. 333-103753) pertaining to The Timken Company Savings and Stock Investment Plan for Torrington Non-Bargaining Associates
|
(4)
|
Registration Statement (Form S-8 No. 333-103754) pertaining to The Timken Company Savings Plan for Torrington Bargaining Associates
|
(5)
|
Registration Statement (Form S-8 No. 333-105333) pertaining to The Timken Share Incentive Plan
|
(6)
|
Registration Statements (Form S-8 No. 333-66921; Form S-8 No. 333-35152; Form S-8 No. 333-108840; Form S-8 No. 333-157720) pertaining to The Hourly Pension Investment Plan
|
(7)
|
Registration Statement (Form S-8 No. 333-108841) pertaining to the Voluntary Investment Program for Hourly Employees of Latrobe Steel Company
|
(8)
|
Registration Statements (Form S-8 No. 333-66905; Form S-8 No. 333-52866; Form S-8 No. 333-113390; Form S-8 No 333-157721) pertaining to The Voluntary Investment Pension Plan for Hourly Employees of The Timken Company
|
(9)
|
Registration Statements (Form S-8 No. 333-69129; Form S-8 No. 333-113391; Form S-8 No. 333-179564) pertaining to The Timken Company - Latrobe Steel Company Savings and Investment Pension Plan
|
(10)
|
Registration Statements (Form S-8 No. 333-113394; Form S-8 No. 333-141067; Form S-8 No. 333-157718) pertaining to The Timken Company Employee Savings Plan
|
(11)
|
Registration Statements (Form S-8 No. 333-118664; Form S-8 No. 333-141068; Form S-8 No. 333-157717) pertaining to the MPB Corporation Employees’ Savings Plan
|
(12)
|
Registration Statements (Form S-8 No. 333-62481; Form S-8 No. 333-76062; Form S-8 No. 333-150846; Form S-8 No. 333-157719) pertaining to the Company Savings Plan for the Employees of Timken France
|
(13)
|
Registration Statements (Form S-8 No. 333-02553; Form S-8 No. 333-35154; Form S-8 No. 333-86452; Form S-8 No. 333-114647; Form S-8 No. 333-150847) pertaining to The Timken Company Long-Term Incentive Plan (as amended and restated as of February 5, 2008)
|
(14)
|
Registration Statement (Form S-8 No. 333-174093) pertaining to the Timken Company 2011 Long-Term Incentive Plan
|
(15)
|
Registration Statement (Form S-3 No. 333-161798) pertaining to Debt Securities
|
/s/ John M. Ballbach
|
|
/s/ J. Ted Mihaila
|
John M. Ballbach
|
|
J. Ted Mihaila
|
|
|
(Principal Accounting Officer)
|
|
|
|
/s/ Phillip R. Cox
|
|
/s/ Joseph W. Ralston
|
Phillip R. Cox
|
|
Joseph W. Ralston
|
|
|
|
/s/ Glenn A. Eisenberg
|
|
/s/ John P. Reilly
|
Glenn A. Eisenberg
|
|
John P. Reilly
|
(Principal Financial Officer)
|
|
|
|
|
|
/s/ James W. Griffith
|
|
/s/ Frank C. Sullivan
|
James W. Griffith
|
|
Frank C. Sullivan
|
(Principal Executive Officer)
|
|
|
|
|
|
/s/ Diane C. Creel
|
|
/s/ John M. Timken, Jr.
|
Diane C. Creel
|
|
John M. Timken, Jr.
|
|
|
|
/s/ Richard G. Kyle
|
|
/s/ Ward J. Timken
|
Richard G. Kyle
|
|
Ward J. Timken
|
|
|
|
/s/ John A. Luke, Jr.
|
|
/s/ Ward J. Timken, Jr.
|
John A. Luke, Jr.
|
|
Ward J. Timken, Jr.
|
|
|
|
|
|
/s/ Jacqueline F. Woods
|
Christopher L. Mapes
|
|
Jacqueline F. Woods
|
By: /s/ James W. Griffith
|
|
James W. Griffith,
President and Chief Executive Officer
(Principal Executive Officer)
|
|
By: /s/ Glenn A. Eisenberg
|
|
Glenn A. Eisenberg
Executive Vice President –
Finance and Administration
(Principal Financial Officer)
|
|
By: /s/ James W. Griffith
|
|
James W. Griffith
President and Chief Executive Officer
(Principal Executive Officer)
|
|
By: /s/ Glenn A. Eisenberg
|
|
Glenn A. Eisenberg
Executive Vice President-
Finance and Administration
(Principal Financial Officer)
|
|