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☒
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
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Ohio
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34-0577130
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|
(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
|
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4500 Mount Pleasant Street NW
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North Canton
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Ohio
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44720-5450
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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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Trading Symbol
|
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Name of each exchange on which registered
|
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Common Shares, without par value
|
|
TKR
|
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The New York Stock Exchange
|
|
Large accelerated filer
|
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☒
|
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Accelerated filer
|
☐
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Non-accelerated filer
|
|
☐
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Smaller reporting company
|
☐
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Emerging growth company
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☐
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Class
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Outstanding at June 30, 2019
|
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Common Shares, without par value
|
|
76,041,513 shares
|
|
|
|
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PAGE
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I.
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Item 1.
|
||
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Item 2.
|
||
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Item 3.
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||
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Item 4.
|
||
II.
|
|
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Item 1.
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||
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Item1A.
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||
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Item 2.
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||
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Item 6.
|
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Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
(Dollars in millions, except per share data)
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
1,000.0
|
|
|
$
|
906.3
|
|
|
$
|
1,979.7
|
|
|
$
|
1,789.4
|
|
Cost of products sold
|
694.3
|
|
|
638.9
|
|
|
1,371.4
|
|
|
1,257.1
|
|
||||
Gross Profit
|
305.7
|
|
|
267.4
|
|
|
608.3
|
|
|
532.3
|
|
||||
Selling, general and administrative expenses
|
158.7
|
|
|
141.8
|
|
|
311.4
|
|
|
290.4
|
|
||||
Impairment and restructuring charges
|
1.9
|
|
|
0.3
|
|
|
1.9
|
|
|
0.5
|
|
||||
Operating Income
|
145.1
|
|
|
125.3
|
|
|
295.0
|
|
|
241.4
|
|
||||
Interest expense
|
(19.3
|
)
|
|
(10.7
|
)
|
|
(37.3
|
)
|
|
(20.7
|
)
|
||||
Interest income
|
1.1
|
|
|
0.5
|
|
|
2.4
|
|
|
0.9
|
|
||||
Non-service pension and other postretirement income
|
0.2
|
|
|
4.1
|
|
|
0.3
|
|
|
5.7
|
|
||||
Other income, net
|
1.4
|
|
|
2.9
|
|
|
4.7
|
|
|
3.6
|
|
||||
Income Before Income Taxes
|
128.5
|
|
|
122.1
|
|
|
265.1
|
|
|
230.9
|
|
||||
Provision for income taxes
|
33.6
|
|
|
30.2
|
|
|
74.9
|
|
|
58.5
|
|
||||
Net Income
|
94.9
|
|
|
91.9
|
|
|
190.2
|
|
|
172.4
|
|
||||
Less: Net income attributable to noncontrolling interest
|
2.4
|
|
|
0.9
|
|
|
5.8
|
|
|
1.2
|
|
||||
Net Income Attributable to The Timken Company
|
$
|
92.5
|
|
|
$
|
91.0
|
|
|
$
|
184.4
|
|
|
$
|
171.2
|
|
|
|
|
|
|
|
|
|
||||||||
Net Income per Common Share Attributable to The Timken Company
Common Shareholders
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share
|
$
|
1.22
|
|
|
$
|
1.18
|
|
|
$
|
2.43
|
|
|
$
|
2.21
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per share
|
$
|
1.20
|
|
|
$
|
1.16
|
|
|
$
|
2.39
|
|
|
$
|
2.17
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
(Dollars in millions)
|
|
|
|
|
|
|
|
||||||||
Net Income
|
$
|
94.9
|
|
|
$
|
91.9
|
|
|
$
|
190.2
|
|
|
$
|
172.4
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
5.1
|
|
|
(46.6
|
)
|
|
0.9
|
|
|
(38.2
|
)
|
||||
Pension and postretirement liability adjustment
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
||||
Change in fair value of derivative financial instruments
|
(0.8
|
)
|
|
3.6
|
|
|
(1.4
|
)
|
|
4.4
|
|
||||
Other comprehensive income (loss), net of tax
|
4.3
|
|
|
(43.0
|
)
|
|
(0.6
|
)
|
|
(33.8
|
)
|
||||
Comprehensive Income, net of tax
|
99.2
|
|
|
48.9
|
|
|
189.6
|
|
|
138.6
|
|
||||
Less: comprehensive income (loss) attributable to noncontrolling interest
|
3.1
|
|
|
(1.4
|
)
|
|
7.4
|
|
|
(1.7
|
)
|
||||
Comprehensive Income Attributable to The Timken Company
|
$
|
96.1
|
|
|
$
|
50.3
|
|
|
$
|
182.2
|
|
|
$
|
140.3
|
|
|
(Unaudited)
|
|
|
||||
|
June 30,
2019 |
|
December 31,
2018 |
||||
(Dollars in millions)
|
|
|
|
||||
ASSETS
|
|
|
|
||||
Current Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
166.8
|
|
|
$
|
132.5
|
|
Restricted cash
|
0.6
|
|
|
0.6
|
|
||
Accounts receivable, less allowances (2019 – $19.7 million; 2018 – $21.9 million)
|
589.9
|
|
|
546.6
|
|
||
Unbilled receivables
|
153.3
|
|
|
116.6
|
|
||
Inventories, net
|
843.8
|
|
|
835.7
|
|
||
Deferred charges and prepaid expenses
|
29.3
|
|
|
28.2
|
|
||
Other current assets
|
83.0
|
|
|
77.0
|
|
||
Total Current Assets
|
1,866.7
|
|
|
1,737.2
|
|
||
Property, Plant and Equipment, net
|
912.0
|
|
|
912.1
|
|
||
Operating Lease Assets
|
117.3
|
|
|
—
|
|
||
Other Assets
|
|
|
|
||||
Goodwill
|
969.4
|
|
|
960.5
|
|
||
Other intangible assets
|
731.5
|
|
|
733.2
|
|
||
Non-current pension assets
|
10.9
|
|
|
6.2
|
|
||
Deferred income taxes
|
49.4
|
|
|
59.0
|
|
||
Other non-current assets
|
17.0
|
|
|
37.0
|
|
||
Total Other Assets
|
1,778.2
|
|
|
1,795.9
|
|
||
Total Assets
|
$
|
4,674.2
|
|
|
$
|
4,445.2
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Current Liabilities
|
|
|
|
||||
Short-term debt
|
$
|
37.3
|
|
|
$
|
33.6
|
|
Current portion of long-term debt
|
9.0
|
|
|
9.4
|
|
||
Short-term operating lease liabilities
|
29.5
|
|
|
—
|
|
||
Accounts payable, trade
|
291.6
|
|
|
273.2
|
|
||
Salaries, wages and benefits
|
134.3
|
|
|
174.9
|
|
||
Income taxes payable
|
26.4
|
|
|
23.5
|
|
||
Other current liabilities
|
168.2
|
|
|
171.0
|
|
||
Total Current Liabilities
|
696.3
|
|
|
685.6
|
|
||
Non-Current Liabilities
|
|
|
|
||||
Long-term debt
|
1,642.6
|
|
|
1,638.6
|
|
||
Accrued pension cost
|
162.6
|
|
|
161.3
|
|
||
Accrued postretirement benefits cost
|
109.3
|
|
|
108.7
|
|
||
Long-term operating lease liabilities
|
73.0
|
|
|
—
|
|
||
Deferred income taxes
|
128.7
|
|
|
138.0
|
|
||
Other non-current liabilities
|
78.1
|
|
|
70.3
|
|
||
Total Non-Current Liabilities
|
2,194.3
|
|
|
2,116.9
|
|
||
Shareholders’ Equity
|
|
|
|
||||
Class I and II Serial Preferred Stock, without par value:
|
|
|
|
||||
Authorized – 10,000,000 shares each class, none issued
|
—
|
|
|
—
|
|
||
Common shares, without par value:
|
|
|
|
||||
Authorized – 200,000,000 shares
|
|
|
|
||||
Issued (including shares in treasury) (2019 – 98,375,135 shares;
2018 – 98,375,135 shares) |
|
|
|
||||
Stated capital
|
53.1
|
|
|
53.1
|
|
||
Other paid-in capital
|
941.3
|
|
|
951.9
|
|
||
Earnings invested in the business
|
1,772.0
|
|
|
1,630.2
|
|
||
Accumulated other comprehensive loss
|
(97.5
|
)
|
|
(95.3
|
)
|
||
Treasury shares at cost (2019 – 22,333,622 shares; 2018 – 22,421,213 shares)
|
(957.6
|
)
|
|
(960.3
|
)
|
||
Total Shareholders’ Equity
|
1,711.3
|
|
|
1,579.6
|
|
||
Noncontrolling Interest
|
72.3
|
|
|
63.1
|
|
||
Total Equity
|
1,783.6
|
|
|
1,642.7
|
|
||
Total Liabilities and Equity
|
$
|
4,674.2
|
|
|
$
|
4,445.2
|
|
|
Six Months Ended
June 30, |
||||||
|
2019
|
|
2018
|
||||
(Dollars in millions)
|
|
|
|
||||
CASH PROVIDED (USED)
|
|
|
|
||||
Operating Activities
|
|
|
|
||||
Net income
|
$
|
190.2
|
|
|
$
|
172.4
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
81.2
|
|
|
70.8
|
|
||
Impairment charges
|
0.7
|
|
|
—
|
|
||
(Gain) loss on sale of assets
|
(1.6
|
)
|
|
0.9
|
|
||
Deferred income tax provision
|
1.8
|
|
|
0.1
|
|
||
Stock-based compensation expense
|
14.9
|
|
|
17.8
|
|
||
Pension and other postretirement expense
|
5.8
|
|
|
1.6
|
|
||
Pension and other postretirement benefit contributions and payments
|
(8.9
|
)
|
|
(8.8
|
)
|
||
Operating lease expense
|
18.7
|
|
|
—
|
|
||
Operating lease payments
|
(17.7
|
)
|
|
—
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
(35.9
|
)
|
|
(86.4
|
)
|
||
Unbilled receivables
|
(36.6
|
)
|
|
(27.8
|
)
|
||
Inventories
|
16.6
|
|
|
(79.9
|
)
|
||
Accounts payable, trade
|
13.4
|
|
|
(8.4
|
)
|
||
Other accrued expenses
|
(45.1
|
)
|
|
(2.4
|
)
|
||
Income taxes
|
0.6
|
|
|
(3.8
|
)
|
||
Other, net
|
11.8
|
|
|
11.7
|
|
||
Net Cash Provided by Operating Activities
|
209.9
|
|
|
57.8
|
|
||
Investing Activities
|
|
|
|
||||
Capital expenditures
|
(39.2
|
)
|
|
(39.6
|
)
|
||
Acquisitions, net of cash received
|
(83.0
|
)
|
|
—
|
|
||
Other
|
2.4
|
|
|
3.6
|
|
||
Net Cash Used in Investing Activities
|
(119.8
|
)
|
|
(36.0
|
)
|
||
Financing Activities
|
|
|
|
||||
Cash dividends paid to shareholders
|
(42.6
|
)
|
|
(42.7
|
)
|
||
Purchase of treasury shares
|
(23.6
|
)
|
|
(49.6
|
)
|
||
Proceeds from exercise of stock options
|
8.9
|
|
|
10.6
|
|
||
Payments related to tax withholding for stock-based compensation
|
(8.1
|
)
|
|
(5.0
|
)
|
||
Accounts receivable facility borrowings
|
25.0
|
|
|
52.1
|
|
||
Accounts receivable facility payments
|
—
|
|
|
(18.6
|
)
|
||
Proceeds from long-term debt
|
292.0
|
|
|
130.0
|
|
||
Payments on long-term debt
|
(310.4
|
)
|
|
(94.2
|
)
|
||
Deferred financing costs
|
(1.9
|
)
|
|
—
|
|
||
Short-term debt activity, net
|
3.8
|
|
|
26.3
|
|
||
Other
|
—
|
|
|
(1.0
|
)
|
||
Net Cash (Used in) Provided by Financing Activities
|
(56.9
|
)
|
|
7.9
|
|
||
Effect of exchange rate changes on cash
|
1.1
|
|
|
(8.5
|
)
|
||
Increase in Cash, Cash Equivalents and Restricted Cash
|
34.3
|
|
|
21.2
|
|
||
Cash, cash equivalents and restricted cash at beginning of year
|
133.1
|
|
|
125.4
|
|
||
Cash, Cash Equivalents and Restricted Cash at End of Period
|
$
|
167.4
|
|
|
$
|
146.6
|
|
|
Balance at December 31, 2018
|
Effect of Accounting Change
|
Balance at
January 1, 2019
|
||||||
Operating lease assets
|
$
|
—
|
|
$
|
114.1
|
|
$
|
114.1
|
|
Other intangible assets
|
733.2
|
|
0.7
|
|
733.9
|
|
|||
Other non-current assets (1)
|
37.0
|
|
(15.3
|
)
|
21.7
|
|
|||
Total Assets
|
4,445.2
|
|
99.5
|
|
4,544.7
|
|
|||
|
|
|
|
||||||
Short-term operating lease liability
|
—
|
|
29.8
|
|
29.8
|
|
|||
Long-term operating lease liability
|
—
|
|
69.7
|
|
69.7
|
|
|||
Total Liabilities
|
$
|
2,802.5
|
|
$
|
99.5
|
|
$
|
2,902.0
|
|
|
Initial Purchase
Price Allocation
|
||
Assets:
|
|
||
Accounts receivable, net
|
$
|
6.7
|
|
Inventories, net
|
24.1
|
|
|
Other current assets
|
2.4
|
|
|
Property, plant and equipment, net
|
19.4
|
|
|
Operating lease assets
|
2.1
|
|
|
Goodwill
|
17.7
|
|
|
Other intangible assets
|
26.7
|
|
|
Other non-current assets
|
0.5
|
|
|
Total assets acquired
|
$
|
99.6
|
|
Liabilities:
|
|
||
Accounts payable, trade
|
$
|
5.6
|
|
Other current liabilities
|
4.1
|
|
|
Long-term operating lease liabilities
|
2.1
|
|
|
Other non-current liabilities
|
1.1
|
|
|
Total liabilities assumed
|
$
|
12.9
|
|
Noncontrolling interest acquired
|
1.8
|
|
|
Net assets and noncontrolling interest acquired
|
$
|
84.9
|
|
|
Preliminary Purchase
Price Allocation |
|||
|
|
Weighted -
Average Life |
||
Trade names (indefinite life)
|
$
|
12.3
|
|
Indefinite
|
Technology and know-how
|
5.2
|
|
14 years
|
|
Customer relationships
|
9.2
|
|
16 years
|
|
Total intangible assets
|
$
|
26.7
|
|
|
|
Initial Purchase
Price Allocation |
Adjustments
|
Preliminary Purchase
Price Allocation
|
||||||
Assets:
|
|
|
|
||||||
Accounts receivable, net
|
$
|
42.5
|
|
|
|
$
|
42.5
|
|
|
Inventories, net
|
61.6
|
|
(0.1
|
)
|
61.5
|
|
|||
Other current assets
|
8.5
|
|
1.0
|
|
9.5
|
|
|||
Property, plant and equipment, net
|
71.7
|
|
(6.3
|
)
|
65.4
|
|
|||
Goodwill
|
468.2
|
|
(5.0
|
)
|
463.2
|
|
|||
Other intangible assets
|
372.6
|
|
2.7
|
|
375.3
|
|
|||
Other non-current assets
|
20.2
|
|
(3.7
|
)
|
16.5
|
|
|||
Total assets acquired
|
$
|
1,045.3
|
|
$
|
(11.4
|
)
|
$
|
1,033.9
|
|
Liabilities:
|
|
|
|
||||||
Accounts payable, trade
|
$
|
35.2
|
|
|
|
$
|
35.2
|
|
|
Salaries, wages and benefits
|
9.1
|
|
|
|
9.1
|
|
|||
Income taxes payable
|
2.5
|
|
0.4
|
|
2.9
|
|
|||
Other current liabilities
|
8.2
|
|
0.2
|
|
8.4
|
|
|||
Short-term debt
|
2.5
|
|
(0.6
|
)
|
1.9
|
|
|||
Long-term debt
|
3.0
|
|
(2.9
|
)
|
0.1
|
|
|||
Accrued pension cost
|
5.7
|
|
|
|
5.7
|
|
|||
Accrued postretirement benefits cost
|
11.7
|
|
|
|
11.7
|
|
|||
Deferred income taxes
|
116.2
|
|
(3.7
|
)
|
112.5
|
|
|||
Other non-current liabilities
|
16.9
|
|
|
|
16.9
|
|
|||
Total liabilities assumed
|
$
|
211.0
|
|
$
|
(6.6
|
)
|
$
|
204.4
|
|
Net assets acquired
|
$
|
834.3
|
|
$
|
(4.8
|
)
|
$
|
829.5
|
|
|
June 30,
2019 |
December 31,
2018 |
||||
Manufacturing supplies
|
$
|
33.5
|
|
$
|
32.4
|
|
Raw materials
|
107.3
|
|
102.4
|
|
||
Work in process
|
294.9
|
|
287.7
|
|
||
Finished products
|
451.6
|
|
452.7
|
|
||
Subtotal
|
887.3
|
|
875.2
|
|
||
Allowance for obsolete and surplus inventory
|
(43.5
|
)
|
(39.5
|
)
|
||
Total Inventories, net
|
$
|
843.8
|
|
$
|
835.7
|
|
|
Mobile
Industries
|
Process
Industries
|
Total
|
||||||
Beginning balance
|
$
|
349.7
|
|
$
|
610.8
|
|
$
|
960.5
|
|
Acquisitions
|
(1.1
|
)
|
13.8
|
|
12.7
|
|
|||
Foreign currency translation adjustments and other changes
|
(1.4
|
)
|
(2.4
|
)
|
(3.8
|
)
|
|||
Ending balance
|
$
|
347.2
|
|
$
|
622.2
|
|
$
|
969.4
|
|
|
Balance at June 30, 2019
|
Balance at December 31, 2018
|
||||||||||||||||
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Net
Carrying
Amount
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Net
Carrying
Amount
|
||||||||||||
Intangible assets
subject to amortization:
|
|
|
|
|
|
|
||||||||||||
Customer relationships
|
$
|
490.9
|
|
$
|
114.3
|
|
$
|
376.6
|
|
$
|
481.5
|
|
$
|
99.8
|
|
$
|
381.7
|
|
Technology and know-how
|
250.1
|
|
47.6
|
|
202.5
|
|
245.0
|
|
40.4
|
|
204.6
|
|
||||||
Trade names
|
12.0
|
|
5.3
|
|
6.7
|
|
11.3
|
|
4.8
|
|
6.5
|
|
||||||
Capitalized software
|
268.4
|
|
241.4
|
|
27.0
|
|
266.4
|
|
236.5
|
|
29.9
|
|
||||||
Other
|
40.8
|
|
37.2
|
|
3.6
|
|
40.8
|
|
35.2
|
|
5.6
|
|
||||||
|
$
|
1,062.2
|
|
$
|
445.8
|
|
$
|
616.4
|
|
$
|
1,045.0
|
|
$
|
416.7
|
|
$
|
628.3
|
|
Intangible assets not subject to amortization:
|
|
|
|
|
|
|
||||||||||||
Trade names
|
$
|
106.4
|
|
|
$
|
106.4
|
|
$
|
96.2
|
|
|
$
|
96.2
|
|
||||
FAA air agency certificates
|
8.7
|
|
|
8.7
|
|
8.7
|
|
|
8.7
|
|
||||||||
|
$
|
115.1
|
|
|
|
$
|
115.1
|
|
$
|
104.9
|
|
|
|
$
|
104.9
|
|
||
Total intangible assets
|
$
|
1,177.3
|
|
$
|
445.8
|
|
$
|
731.5
|
|
$
|
1,149.9
|
|
$
|
416.7
|
|
$
|
733.2
|
|
|
Three Months Ended
|
Six Months Ended
|
||||
|
June 30, 2019
|
June 30, 2019
|
||||
Operating lease expense
|
$
|
8.3
|
|
$
|
18.7
|
|
Amortization of right-of-use assets on finance leases
|
0.2
|
|
0.6
|
|
||
Total lease expense
|
$
|
8.5
|
|
$
|
19.3
|
|
Operating Leases
|
June 30, 2019
|
||
Lease assets:
|
|
||
Operating lease assets
|
$
|
117.3
|
|
Lease liabilities:
|
|
||
Short-term operating lease liabilities
|
$
|
29.5
|
|
Long-term operating lease liabilities
|
73.0
|
|
|
Total operating lease liabilities
|
$
|
102.5
|
|
Finance Leases
|
June 30, 2019
|
||
Lease assets:
|
|
||
Property, plant and equipment, net
|
$
|
3.6
|
|
Lease liabilities:
|
|
||
Current portion of long-term debt
|
$
|
0.4
|
|
Long-term debt
|
2.5
|
|
|
Total finance lease liabilities
|
$
|
2.9
|
|
|
Operating Leases
|
Finance Leases
|
||||
Year Ending December 31,
|
|
|
||||
2019
|
$
|
17.6
|
|
$
|
0.4
|
|
2020
|
29.4
|
|
0.9
|
|
||
2021
|
19.4
|
|
0.8
|
|
||
2022
|
13.7
|
|
0.7
|
|
||
2023
|
10.1
|
|
0.2
|
|
||
Thereafter
|
24.1
|
|
—
|
|
||
Total future minimum lease payments
|
114.3
|
|
3.0
|
|
||
Less: imputed interest
|
(11.8
|
)
|
(0.1
|
)
|
||
Total
|
$
|
102.5
|
|
$
|
2.9
|
|
|
Three Months Ended
|
Six Months Ended
|
||||
|
June 30, 2019
|
June 30, 2019
|
||||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
||||
Operating cash flows from operating leases
|
$
|
8.8
|
|
$
|
17.7
|
|
Financing cash flows from finance leases
|
0.1
|
|
1.1
|
|
||
Lease assets added in the period:
|
|
|
||||
Operating leases
|
$
|
23.7
|
|
$
|
39.4
|
|
Finance leases
|
0.2
|
|
0.8
|
|
|
June 30, 2019
|
|
Weighted-average remaining lease term:
|
|
|
Operating leases
|
5.3 years
|
|
Finance leases
|
3.6 years
|
|
Weighted-average discount rate:
|
|
|
Operating leases
|
4.10
|
%
|
Finance leases
|
2.58
|
%
|
|
June 30,
2019 |
December 31,
2018 |
||||
Borrowings under variable-rate lines of credit for certain of the Company’s foreign subsidiaries with various banks with interest rates ranging from 0.34% to 3.50% at June 30, 2019 and 0.29% to 1.00% at December 31, 2018
|
$
|
37.3
|
|
$
|
33.6
|
|
Short-term debt
|
$
|
37.3
|
|
$
|
33.6
|
|
|
June 30,
2019 |
December 31,
2018 |
||||
Variable-rate Senior Credit Facility with an average interest rate on U.S. Dollar of 3.57% and Euro of 1.09% at June 30, 2019 and 3.40% and 1.10%, respectively, at December 31, 2018
|
$
|
54.6
|
|
$
|
43.9
|
|
Variable-rate Euro Term Loan(1), maturing on September 18, 2020, with an interest rate of 1.13% at June 30, 2019 and December 31, 2018
|
81.8
|
|
107.1
|
|
||
Variable-rate Accounts Receivable Facility, with an interest rate of 3.32% at June 30, 2019 and 3.22% at December 31, 2018
|
100.0
|
|
75.0
|
|
||
Variable-rate Term Loan(1), maturing on September 11, 2023, with an interest rate of 3.65% at June 30, 2019 and 3.77% at December 31, 2018
|
342.8
|
|
347.1
|
|
||
Fixed-rate Senior Unsecured Notes(1), maturing on September 1, 2024, with an interest rate of 3.875%
|
348.1
|
|
347.7
|
|
||
Fixed-rate Euro Senior Unsecured Notes(1), maturing on September 7, 2027, with an interest rate of 2.02%
|
170.1
|
|
171.4
|
|
||
Fixed-rate Senior Unsecured Notes(1), maturing on December 15, 2028, with an interest rate of 4.50%
|
395.9
|
|
395.8
|
|
||
Fixed-rate Medium-Term Notes, Series A(1), maturing at various dates through May 2028, with interest rates ranging from 6.74% to 7.76%
|
154.6
|
|
154.6
|
|
||
Other
|
3.7
|
|
5.4
|
|
||
|
1,651.6
|
|
1,648.0
|
|
||
Less: Current maturities
|
9.0
|
|
9.4
|
|
||
Long-term debt
|
$
|
1,642.6
|
|
$
|
1,638.6
|
|
|
|
The Timken Company Shareholders
|
|
||||||||||||||||||
|
Total
|
Stated
Capital
|
Other
Paid-In
Capital
|
Earnings
Invested
in the
Business
|
Accumulated
Other
Comprehensive
(Loss)
|
Treasury
Stock
|
Non
controlling
Interest
|
||||||||||||||
Balance at March 31, 2019
|
$
|
1,705.9
|
|
$
|
53.1
|
|
$
|
938.2
|
|
$
|
1,700.8
|
|
$
|
(101.1
|
)
|
$
|
(952.5
|
)
|
$
|
67.4
|
|
Net income
|
94.9
|
|
|
|
92.5
|
|
|
|
2.4
|
|
|||||||||||
Foreign currency translation adjustment
|
5.1
|
|
|
|
|
4.4
|
|
|
0.7
|
|
|||||||||||
Change in fair value of derivative financial
instruments, net of reclassifications |
(0.8
|
)
|
|
|
|
(0.8
|
)
|
|
|
||||||||||||
Noncontrolling interest acquired
|
1.8
|
|
|
|
|
|
|
1.8
|
|
||||||||||||
Dividends – $0.28 per share
|
(21.3
|
)
|
|
|
(21.3
|
)
|
|
|
|
||||||||||||
Stock-based compensation expense
|
7.1
|
|
|
7.1
|
|
|
|
|
|
||||||||||||
Stock purchased at fair market value
|
(15.3
|
)
|
|
|
|
|
(15.3
|
)
|
|
||||||||||||
Stock option exercise activity
|
7.9
|
|
|
(2.8
|
)
|
|
|
10.7
|
|
|
|||||||||||
Restricted share activity
|
—
|
|
|
(1.2
|
)
|
|
|
1.2
|
|
|
|||||||||||
Payments related to tax withholding for
stock-based compensation |
(1.7
|
)
|
|
|
|
|
(1.7
|
)
|
|
||||||||||||
Balance at June 30, 2019
|
$
|
1,783.6
|
|
$
|
53.1
|
|
$
|
941.3
|
|
$
|
1,772.0
|
|
$
|
(97.5
|
)
|
$
|
(957.6
|
)
|
$
|
72.3
|
|
|
|
The Timken Company Shareholders
|
|
||||||||||||||||||
|
Total
|
Stated
Capital
|
Other
Paid-In
Capital
|
Earnings
Invested
in the
Business
|
Accumulated
Other
Comprehensive
(Loss)
|
Treasury
Stock
|
Non
controlling
Interest
|
||||||||||||||
Balance at December 31, 2018
|
$
|
1,642.7
|
|
$
|
53.1
|
|
$
|
951.9
|
|
$
|
1,630.2
|
|
$
|
(95.3
|
)
|
$
|
(960.3
|
)
|
$
|
63.1
|
|
Net income
|
190.2
|
|
|
|
184.4
|
|
|
|
5.8
|
|
|||||||||||
Foreign currency translation adjustment
|
0.9
|
|
|
|
|
(0.7
|
)
|
|
1.6
|
|
|||||||||||
Pension and postretirement liability
adjustments |
(0.1
|
)
|
|
|
|
(0.1
|
)
|
|
|
||||||||||||
Change in fair value of derivative financial
instruments, net of reclassifications |
(1.4
|
)
|
|
|
|
(1.4
|
)
|
|
|
||||||||||||
Noncontrolling interest acquired
|
1.8
|
|
|
|
|
|
|
1.8
|
|
||||||||||||
Dividends – $0.56 per share
|
(42.6
|
)
|
|
|
(42.6
|
)
|
|
|
|
||||||||||||
Stock-based compensation expense
|
14.9
|
|
|
14.9
|
|
|
|
|
|
||||||||||||
Stock purchased at fair market value
|
(23.6
|
)
|
|
|
|
|
(23.6
|
)
|
|
||||||||||||
Stock option exercise activity
|
8.9
|
|
|
(3.4
|
)
|
|
|
12.3
|
|
|
|||||||||||
Restricted share activity
|
—
|
|
|
(22.1
|
)
|
|
|
22.1
|
|
|
|||||||||||
Payments related to tax withholding for
stock-based compensation |
(8.1
|
)
|
|
|
|
|
(8.1
|
)
|
|
||||||||||||
Balance at June 30, 2019
|
$
|
1,783.6
|
|
$
|
53.1
|
|
$
|
941.3
|
|
$
|
1,772.0
|
|
$
|
(97.5
|
)
|
$
|
(957.6
|
)
|
$
|
72.3
|
|
|
|
The Timken Company Shareholders
|
|
||||||||||||||||||
|
Total
|
Stated
Capital
|
Other
Paid-In
Capital
|
Earnings
Invested
in the
Business
|
Accumulated
Other
Comprehensive
(Loss)
|
Treasury
Stock
|
Non
controlling
Interest
|
||||||||||||||
Balance at March 31, 2018
|
$
|
1,542.8
|
|
$
|
53.1
|
|
$
|
901.5
|
|
$
|
1,475.9
|
|
$
|
(29.2
|
)
|
$
|
(890.4
|
)
|
$
|
31.9
|
|
Net income
|
91.9
|
|
|
|
91.0
|
|
|
|
0.9
|
|
|||||||||||
Foreign currency translation adjustment
|
(46.6
|
)
|
|
|
|
(44.3
|
)
|
|
(2.3
|
)
|
|||||||||||
Change in fair value of derivative financial
instruments, net of reclassifications |
3.6
|
|
|
|
|
3.6
|
|
|
|
||||||||||||
Dividends – $0.28 per share
|
(21.6
|
)
|
|
|
(21.6
|
)
|
|
|
|
||||||||||||
Stock-based compensation expense
|
7.5
|
|
|
7.5
|
|
|
|
|
|
||||||||||||
Stock purchased at fair market value
|
(26.9
|
)
|
|
|
|
|
(26.9
|
)
|
|
||||||||||||
Stock option exercise activity
|
2.2
|
|
|
(1.7
|
)
|
|
|
3.9
|
|
|
|||||||||||
Restricted share activity
|
—
|
|
|
(0.1
|
)
|
|
|
0.1
|
|
|
|||||||||||
Payments related to tax withholding for
stock-based compensation |
(0.6
|
)
|
|
|
|
|
|
(0.6
|
)
|
|
|||||||||||
Balance at June 30, 2018
|
$
|
1,552.3
|
|
$
|
53.1
|
|
$
|
907.2
|
|
$
|
1,545.3
|
|
$
|
(69.9
|
)
|
$
|
(913.9
|
)
|
$
|
30.5
|
|
|
|
The Timken Company Shareholders
|
|
||||||||||||||||||
|
Total
|
Stated
Capital
|
Other
Paid-In
Capital
|
Earnings
Invested
in the
Business
|
Accumulated
Other
Comprehensive
(Loss)
|
Treasury
Stock
|
Non
controlling
Interest
|
||||||||||||||
Balance at December 31, 2017
|
$
|
1,474.9
|
|
$
|
53.1
|
|
$
|
903.8
|
|
$
|
1,408.4
|
|
$
|
(38.3
|
)
|
$
|
(884.3
|
)
|
$
|
32.2
|
|
Cumulative effect of adopting ASU 2014-09
(net of income tax benefit of $2.6 million)(1)
|
7.7
|
|
|
|
7.7
|
|
|
|
|
||||||||||||
Cumulative effect of adopting ASU 2018-02
|
—
|
|
|
|
0.7
|
|
(0.7
|
)
|
|
|
|||||||||||
Net income
|
172.4
|
|
|
|
171.2
|
|
|
|
1.2
|
|
|||||||||||
Foreign currency translation adjustment
|
(38.2
|
)
|
|
|
|
(35.3
|
)
|
|
(2.9
|
)
|
|||||||||||
Change in fair value of derivative financial
instruments, net of reclassifications
|
4.4
|
|
|
|
|
4.4
|
|
|
|
||||||||||||
Dividends – $0.55 per share
|
(42.7
|
)
|
|
|
(42.7
|
)
|
|
|
|
||||||||||||
Stock-based compensation expense
|
17.8
|
|
|
17.8
|
|
|
|
|
|
||||||||||||
Stock purchased at fair market value
|
(49.6
|
)
|
|
|
|
|
(49.6
|
)
|
|
||||||||||||
Stock option exercise activity
|
10.6
|
|
|
(3.1
|
)
|
|
|
13.7
|
|
|
|||||||||||
Restricted share activity
|
—
|
|
|
(11.3
|
)
|
|
|
11.3
|
|
|
|||||||||||
Payments related to tax withholding for
stock-based compensation
|
(5.0
|
)
|
|
|
|
|
|
(5.0
|
)
|
|
|||||||||||
Balance at June 30, 2018
|
$
|
1,552.3
|
|
$
|
53.1
|
|
$
|
907.2
|
|
$
|
1,545.3
|
|
$
|
(69.9
|
)
|
$
|
(913.9
|
)
|
$
|
30.5
|
|
|
Foreign currency translation adjustments
|
Pension and postretirement liability adjustments
|
Change in fair value of derivative financial instruments
|
Total
|
||||||||
Balance at March 31, 2019
|
$
|
(100.7
|
)
|
$
|
(0.1
|
)
|
$
|
(0.3
|
)
|
$
|
(101.1
|
)
|
Other comprehensive income (loss) before
reclassifications and income taxes |
5.1
|
|
—
|
|
(0.2
|
)
|
4.9
|
|
||||
Amounts reclassified from accumulated other
comprehensive (loss) income before income taxes |
—
|
|
(0.1
|
)
|
(0.7
|
)
|
(0.8
|
)
|
||||
Income tax expense
|
—
|
|
0.1
|
|
0.1
|
|
0.2
|
|
||||
Net current period other comprehensive
income (loss), net of income taxes
|
5.1
|
|
—
|
|
(0.8
|
)
|
4.3
|
|
||||
Noncontrolling interest
|
(0.7
|
)
|
—
|
|
—
|
|
(0.7
|
)
|
||||
Net current period comprehensive income (loss),
net of income taxes and noncontrolling interest
|
4.4
|
|
—
|
|
(0.8
|
)
|
3.6
|
|
||||
Balance at June 30, 2019
|
$
|
(96.3
|
)
|
$
|
(0.1
|
)
|
$
|
(1.1
|
)
|
$
|
(97.5
|
)
|
|
Foreign currency translation adjustments
|
Pension and postretirement liability adjustments
|
Change in fair value of derivative financial instruments
|
Total
|
||||||||
Balance at December 31, 2018
|
$
|
(95.6
|
)
|
$
|
—
|
|
$
|
0.3
|
|
$
|
(95.3
|
)
|
Other comprehensive income before
reclassifications and income tax |
0.9
|
|
—
|
|
0.2
|
|
1.1
|
|
||||
Amounts reclassified from accumulated other
comprehensive (loss) income before income taxes |
—
|
|
(0.2
|
)
|
(1.9
|
)
|
(2.1
|
)
|
||||
Income tax expense
|
—
|
|
0.1
|
|
0.3
|
|
0.4
|
|
||||
Net current period other comprehensive (loss)
income, net of income taxes |
0.9
|
|
(0.1
|
)
|
(1.4
|
)
|
(0.6
|
)
|
||||
Noncontrolling interest
|
(1.6
|
)
|
—
|
|
—
|
|
(1.6
|
)
|
||||
Net current period comprehensive loss, net
of income taxes and noncontrolling interest
|
(0.7
|
)
|
(0.1
|
)
|
(1.4
|
)
|
(2.2
|
)
|
||||
Balance at June 30, 2019
|
$
|
(96.3
|
)
|
$
|
(0.1
|
)
|
$
|
(1.1
|
)
|
$
|
(97.5
|
)
|
|
Foreign currency translation adjustments
|
Pension and postretirement liability adjustments
|
Change in fair value of derivative financial instruments
|
Total
|
||||||||
Balance at March 31, 2018
|
$
|
(26.1
|
)
|
$
|
(0.4
|
)
|
$
|
(2.7
|
)
|
$
|
(29.2
|
)
|
Other comprehensive (loss) income before
reclassifications and income taxes |
(46.6
|
)
|
—
|
|
4.4
|
|
(42.2
|
)
|
||||
Amounts reclassified from accumulated other
comprehensive income (loss) before income taxes |
—
|
|
—
|
|
0.4
|
|
0.4
|
|
||||
Income tax benefit
|
—
|
|
—
|
|
(1.2
|
)
|
(1.2
|
)
|
||||
Net current period other comprehensive
(loss) income, net of income taxes |
(46.6
|
)
|
—
|
|
3.6
|
|
(43.0
|
)
|
||||
Noncontrolling interest
|
2.3
|
|
—
|
|
—
|
|
2.3
|
|
||||
Net current period comprehensive (loss) income,
net of income taxes and noncontrolling interest
|
(44.3
|
)
|
—
|
|
3.6
|
|
(40.7
|
)
|
||||
Balance at June 30, 2018
|
$
|
(70.4
|
)
|
$
|
(0.4
|
)
|
$
|
0.9
|
|
$
|
(69.9
|
)
|
|
Foreign currency translation adjustments
|
Pension and postretirement liability adjustments
|
Change in fair value of derivative financial instruments
|
Total
|
||||||||
Balance at December 31, 2017
|
$
|
(35.1
|
)
|
$
|
(0.3
|
)
|
$
|
(2.9
|
)
|
$
|
(38.3
|
)
|
Cumulative effect of ASU 2018-02
|
—
|
|
(0.1
|
)
|
(0.6
|
)
|
(0.7
|
)
|
||||
Balance at January 1, 2018
|
(35.1
|
)
|
(0.4
|
)
|
(3.5
|
)
|
(39.0
|
)
|
||||
Other comprehensive (loss) income before
reclassifications and income taxes |
(38.2
|
)
|
—
|
|
4.0
|
|
(34.2
|
)
|
||||
Amounts reclassified from accumulated other
comprehensive income (loss) before income taxes |
—
|
|
—
|
|
1.8
|
|
1.8
|
|
||||
Income tax benefit
|
—
|
|
—
|
|
(1.4
|
)
|
(1.4
|
)
|
||||
Net current period other comprehensive
(loss) income, net of income taxes |
(38.2
|
)
|
—
|
|
4.4
|
|
(33.8
|
)
|
||||
Noncontrolling interest
|
2.9
|
|
—
|
|
—
|
|
2.9
|
|
||||
Net current period comprehensive (loss) income,
net of income taxes and noncontrolling interest
|
(35.3
|
)
|
(0.1
|
)
|
3.8
|
|
(31.6
|
)
|
||||
Balance at June 30, 2018
|
$
|
(70.4
|
)
|
$
|
(0.4
|
)
|
$
|
0.9
|
|
$
|
(69.9
|
)
|
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||
|
2019
|
2018
|
2019
|
2018
|
||||||||
Numerator:
|
|
|
|
|
||||||||
Net income attributable to The Timken Company
|
$
|
92.5
|
|
$
|
91.0
|
|
$
|
184.4
|
|
$
|
171.2
|
|
Less: undistributed earnings allocated to nonvested
stock |
—
|
|
—
|
|
—
|
|
—
|
|
||||
Net income available to common shareholders for basic
and diluted earnings per share
|
$
|
92.5
|
|
$
|
91.0
|
|
$
|
184.4
|
|
$
|
171.2
|
|
Denominator:
|
|
|
|
|
||||||||
Weighted average number of shares outstanding - basic
|
76,085,358
|
|
77,360,159
|
|
76,024,301
|
|
77,544,365
|
|
||||
Effect of dilutive securities:
|
|
|
|
|
||||||||
Stock options and awards - based on the treasury stock
method |
1,123,074
|
|
1,136,139
|
|
1,074,681
|
|
1,207,586
|
|
||||
Weighted average number of shares outstanding
assuming dilution of stock options and awards |
77,208,432
|
|
78,496,298
|
|
77,098,982
|
|
78,751,951
|
|
||||
Basic earnings per share
|
$
|
1.22
|
|
$
|
1.18
|
|
$
|
2.43
|
|
$
|
2.21
|
|
Diluted earnings per share
|
$
|
1.20
|
|
$
|
1.16
|
|
$
|
2.39
|
|
$
|
2.17
|
|
|
Three Months Ended
|
Three Months Ended
|
||||||||||||||||
|
June 30, 2019
|
June 30, 2018
|
||||||||||||||||
|
Mobile
|
Process
|
Total
|
Mobile
|
Process
|
Total
|
||||||||||||
United States
|
$
|
258.6
|
|
$
|
226.9
|
|
$
|
485.5
|
|
$
|
261.7
|
|
$
|
190.0
|
|
$
|
451.7
|
|
Americas excluding United States
|
57.2
|
|
40.8
|
|
98.0
|
|
53.5
|
|
42.4
|
|
95.9
|
|
||||||
Europe / Middle East / Africa
|
101.2
|
|
129.1
|
|
230.3
|
|
100.3
|
|
92.4
|
|
192.7
|
|
||||||
Asia-Pacific
|
76.7
|
|
109.5
|
|
186.2
|
|
73.6
|
|
92.4
|
|
166.0
|
|
||||||
Net sales
|
$
|
493.7
|
|
$
|
506.3
|
|
$
|
1,000.0
|
|
$
|
489.1
|
|
$
|
417.2
|
|
$
|
906.3
|
|
|
Six Months Ended
|
Six Months Ended
|
||||||||||||||||
|
June 30, 2019
|
June 30, 2018
|
||||||||||||||||
|
Mobile
|
Process
|
Total
|
Mobile
|
Process
|
Total
|
||||||||||||
United States
|
$
|
532.3
|
|
$
|
436.6
|
|
$
|
968.9
|
|
$
|
519.1
|
|
$
|
368.6
|
|
$
|
887.7
|
|
Americas excluding United States
|
105.7
|
|
84.4
|
|
190.1
|
|
108.7
|
|
89.1
|
|
197.8
|
|
||||||
Europe / Middle East / Africa
|
202.9
|
|
254.1
|
|
457.0
|
|
203.2
|
|
180.4
|
|
383.6
|
|
||||||
Asia-Pacific
|
152.8
|
|
210.9
|
|
363.7
|
|
146.6
|
|
173.7
|
|
320.3
|
|
||||||
Net sales
|
$
|
993.7
|
|
$
|
986.0
|
|
$
|
1,979.7
|
|
$
|
977.6
|
|
$
|
811.8
|
|
$
|
1,789.4
|
|
|
Six Months Ended
|
Six Months Ended
|
Revenue by sales channel
|
June 30, 2019
|
June 30, 2018
|
Original equipment manufacturers
|
57%
|
57%
|
Distribution/end users
|
43%
|
43%
|
|
June 30, 2019
|
||
Beginning balance, January 1
|
$
|
116.6
|
|
Additional unbilled revenue recognized
|
219.2
|
|
|
Less: amounts billed to customers
|
(182.5
|
)
|
|
Ending balance
|
$
|
153.3
|
|
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||
|
2019
|
2018
|
2019
|
2018
|
||||||||
Net sales:
|
|
|
|
|
||||||||
Mobile Industries
|
$
|
493.7
|
|
$
|
489.1
|
|
$
|
993.7
|
|
$
|
977.6
|
|
Process Industries
|
506.3
|
|
417.2
|
|
986.0
|
|
811.8
|
|
||||
Net sales
|
$
|
1,000.0
|
|
$
|
906.3
|
|
$
|
1,979.7
|
|
$
|
1,789.4
|
|
Segment EBIT:
|
|
|
|
|
||||||||
Mobile Industries
|
$
|
59.1
|
|
$
|
54.5
|
|
$
|
120.5
|
|
$
|
105.6
|
|
Process Industries
|
103.0
|
|
90.6
|
|
209.2
|
|
172.2
|
|
||||
Total EBIT, for reportable segments
|
$
|
162.1
|
|
$
|
145.1
|
|
$
|
329.7
|
|
$
|
277.8
|
|
Corporate expenses
|
(15.4
|
)
|
(15.2
|
)
|
(29.7
|
)
|
(29.3
|
)
|
||||
Corporate pension-related charges
|
—
|
|
2.4
|
|
—
|
|
2.2
|
|
||||
Interest expense
|
(19.3
|
)
|
(10.7
|
)
|
(37.3
|
)
|
(20.7
|
)
|
||||
Interest income
|
1.1
|
|
0.5
|
|
2.4
|
|
0.9
|
|
||||
Income before income taxes
|
$
|
128.5
|
|
$
|
122.1
|
|
$
|
265.1
|
|
$
|
230.9
|
|
|
U.S. Plans
|
International Plans
|
Total
|
|||||||||||||||
|
Three Months Ended
June 30, |
Three Months Ended
June 30, |
Three Months Ended
June 30, |
|||||||||||||||
|
2019
|
2018
|
2019
|
2018
|
2019
|
2018
|
||||||||||||
Components of net periodic
benefit cost:
|
|
|
|
|
|
|
||||||||||||
Service cost
|
$
|
2.6
|
|
$
|
3.2
|
|
$
|
0.4
|
|
$
|
0.4
|
|
$
|
3.0
|
|
$
|
3.6
|
|
Interest cost
|
6.0
|
|
5.8
|
|
1.8
|
|
1.8
|
|
7.8
|
|
7.6
|
|
||||||
Expected return on plan assets
|
(6.4
|
)
|
(7.3
|
)
|
(2.6
|
)
|
(2.9
|
)
|
(9.0
|
)
|
(10.2
|
)
|
||||||
Amortization of prior service cost
|
0.4
|
|
0.4
|
|
0.1
|
|
—
|
|
0.5
|
|
0.4
|
|
||||||
Recognition of actuarial gains
|
—
|
|
(2.4
|
)
|
—
|
|
—
|
|
—
|
|
(2.4
|
)
|
||||||
Net periodic benefit cost
|
$
|
2.6
|
|
$
|
(0.3
|
)
|
$
|
(0.3
|
)
|
$
|
(0.7
|
)
|
$
|
2.3
|
|
$
|
(1.0
|
)
|
|
U.S. Plans
|
International Plans
|
Total
|
|||||||||||||||
|
Six Months Ended
June 30, |
Six Months Ended
June 30, |
Six Months Ended
June 30, |
|||||||||||||||
|
2019
|
2018
|
2019
|
2018
|
2019
|
2018
|
||||||||||||
Components of net periodic benefit cost:
|
|
|
|
|
|
|
||||||||||||
Service cost
|
$
|
5.2
|
|
$
|
6.4
|
|
$
|
0.8
|
|
$
|
0.8
|
|
$
|
6.0
|
|
$
|
7.2
|
|
Interest cost
|
12.0
|
|
11.7
|
|
3.7
|
|
3.7
|
|
15.7
|
|
15.4
|
|
||||||
Expected return on plan assets
|
(12.8
|
)
|
(14.6
|
)
|
(5.2
|
)
|
(5.9
|
)
|
(18.0
|
)
|
(20.5
|
)
|
||||||
Amortization of prior service cost
|
0.8
|
|
0.8
|
|
0.1
|
|
—
|
|
0.9
|
|
0.8
|
|
||||||
Recognition of actuarial gains
|
—
|
|
(2.4
|
)
|
—
|
|
—
|
|
—
|
|
(2.4
|
)
|
||||||
Net periodic benefit cost
|
$
|
5.2
|
|
$
|
1.9
|
|
$
|
(0.6
|
)
|
$
|
(1.4
|
)
|
$
|
4.6
|
|
$
|
0.5
|
|
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||
|
2019
|
2018
|
2019
|
2018
|
||||||||
Components of net periodic benefit cost:
|
|
|
|
|
||||||||
Service cost
|
$
|
0.1
|
|
$
|
0.1
|
|
$
|
0.1
|
|
$
|
0.1
|
|
Interest cost
|
1.9
|
|
1.9
|
|
3.8
|
|
3.7
|
|
||||
Expected return on plan assets
|
(0.8
|
)
|
(1.0
|
)
|
(1.6
|
)
|
(1.9
|
)
|
||||
Amortization of prior service credit
|
(0.6
|
)
|
(0.4
|
)
|
(1.1
|
)
|
(0.8
|
)
|
||||
Net periodic benefit cost
|
$
|
0.6
|
|
$
|
0.6
|
|
$
|
1.2
|
|
$
|
1.1
|
|
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||
|
2019
|
2018
|
2019
|
2018
|
||||||||
Provision for income taxes
|
$
|
33.6
|
|
$
|
30.2
|
|
$
|
74.9
|
|
$
|
58.5
|
|
Effective tax rate
|
26.1
|
%
|
24.7
|
%
|
28.3
|
%
|
25.3
|
%
|
|
June 30, 2019
|
|||||||||||
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||
Assets:
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
129.7
|
|
$
|
128.6
|
|
$
|
1.1
|
|
$
|
—
|
|
Cash and cash equivalents measured at net asset value
|
37.1
|
|
|
|
|
|
|
|
||||
Restricted cash
|
0.6
|
|
0.6
|
|
—
|
|
—
|
|
||||
Short-term investments
|
20.8
|
|
—
|
|
20.8
|
|
—
|
|
||||
Short-term investments measured at net asset value
|
0.8
|
|
|
|
|
|
|
|||||
Foreign currency hedges
|
4.8
|
|
—
|
|
4.8
|
|
—
|
|
||||
Total Assets
|
$
|
193.8
|
|
$
|
129.2
|
|
$
|
26.7
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
||||||||
Foreign currency hedges
|
$
|
0.7
|
|
$
|
—
|
|
$
|
0.7
|
|
$
|
—
|
|
Total Liabilities
|
$
|
0.7
|
|
$
|
—
|
|
$
|
0.7
|
|
$
|
—
|
|
|
December 31, 2018
|
|||||||||||
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||
Assets:
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
105.9
|
|
$
|
104.4
|
|
$
|
1.5
|
|
$
|
—
|
|
Cash and cash equivalents measured at net asset value
|
26.6
|
|
|
|
|
|
|
|
||||
Restricted cash
|
0.6
|
|
0.6
|
|
—
|
|
—
|
|
||||
Short-term investments
|
21.8
|
|
—
|
|
21.8
|
|
—
|
|
||||
Foreign currency hedges
|
4.6
|
|
—
|
|
4.6
|
|
—
|
|
||||
Total Assets
|
$
|
159.5
|
|
$
|
105.0
|
|
$
|
27.9
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
||||||||
Foreign currency hedges
|
$
|
0.7
|
|
$
|
—
|
|
$
|
0.7
|
|
$
|
—
|
|
Total Liabilities
|
$
|
0.7
|
|
$
|
—
|
|
$
|
0.7
|
|
$
|
—
|
|
|
|
Amount of gain or (loss) recognized in income
|
|||||||||||
|
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||
Derivatives not designated as hedging instruments:
|
Location of gain or (loss) recognized in income
|
2019
|
2018
|
2019
|
2018
|
||||||||
Foreign currency forward contracts
|
Other income (expense), net
|
$
|
(0.3
|
)
|
$
|
11.0
|
|
$
|
2.7
|
|
$
|
6.7
|
|
•
|
Mobile Industries serves OEM customers that manufacture off-highway equipment for the agricultural, mining and construction markets; on-highway vehicles including passenger cars, light trucks, and medium- and heavy-duty trucks; rail cars and locomotives; outdoor power equipment; rotorcraft and fixed-wing aircraft; and other mobile equipment. Beyond service parts sold to OEMs, aftermarket sales and services to individual end users, equipment owners, operators and maintenance shops are handled directly or through the Company's extensive network of authorized automotive and heavy-truck distributors.
|
•
|
Process Industries serves OEM and end-user customers in industries that place heavy demands on the fixed operating equipment they make or use in heavy and other general industrial sectors. This includes metals, cement and aggregate production; coal power generation and renewable energy sources; oil and gas extraction and refining; pulp and paper and food processing; automation and robotics; and health and critical motion control equipment. Other applications include marine equipment, gear drives, cranes, hoists and conveyors. This segment also supports aftermarket sales and service needs through its global network of authorized industrial distributors and through the provision of services directly to end users.
|
•
|
On April 1, 2019, the Company completed the acquisition of Diamond Chain, a leading supplier of high-performance roller chains for industrial markets. Diamond Chain serves a diverse range of market sectors, including industrial distribution, material handling, food and beverage, agriculture, construction and other process industries. Diamond Chain, based in Indianapolis, Indiana, operates primarily in the United States and China and had annual sales of approximately $60 million for the twelve months ended March 31, 2019.
|
|
Three Months Ended
June 30, |
|
|
||||||||
|
2019
|
2018
|
$ Change
|
% Change
|
|||||||
Net sales
|
$
|
1,000.0
|
|
$
|
906.3
|
|
$
|
93.7
|
|
10.3
|
%
|
Net income
|
94.9
|
|
91.9
|
|
3.0
|
|
3.3
|
%
|
|||
Net income attributable to noncontrolling interest
|
2.4
|
|
0.9
|
|
1.5
|
|
166.7
|
%
|
|||
Net income attributable to The Timken Company
|
$
|
92.5
|
|
$
|
91.0
|
|
$
|
1.5
|
|
1.6
|
%
|
Diluted earnings per share
|
$
|
1.20
|
|
$
|
1.16
|
|
$
|
0.04
|
|
3.4
|
%
|
Average number of shares – diluted
|
77,208,432
|
|
78,496,298
|
|
—
|
|
(1.6
|
)%
|
|
Three Months Ended
June 30, |
|
|
||||||||
|
2019
|
2018
|
$ Change
|
% Change
|
|||||||
Net Sales
|
$
|
1,000.0
|
|
$
|
906.3
|
|
$
|
93.7
|
|
10.3
|
%
|
|
Six Months Ended
June 30, |
|
|
||||||||
|
2019
|
2018
|
$ Change
|
% Change
|
|||||||
Net Sales
|
$
|
1,979.7
|
|
$
|
1,789.4
|
|
$
|
190.3
|
|
10.6
|
%
|
|
Three Months Ended
June 30, |
|
|
||||||||
|
2019
|
2018
|
$ Change
|
Change
|
|||||||
Gross profit
|
$
|
305.7
|
|
$
|
267.4
|
|
$
|
38.3
|
|
14.3
|
%
|
Gross profit % to net sales
|
30.6
|
%
|
29.5
|
%
|
|
|
110
|
bps
|
|
Six Months Ended
June 30, |
|
|
||||||||
|
2019
|
2018
|
$ Change
|
Change
|
|||||||
Gross profit
|
$
|
608.3
|
|
$
|
532.3
|
|
$
|
76.0
|
|
14.3
|
%
|
Gross profit % to net sales
|
30.7
|
%
|
29.7
|
%
|
|
100
|
bps
|
|
Three Months Ended
June 30, |
|
|
||||||||
|
2019
|
2018
|
$ Change
|
Change
|
|||||||
Selling, general and administrative expenses
|
$
|
158.7
|
|
$
|
141.8
|
|
$
|
16.9
|
|
11.9
|
%
|
Selling, general and administrative expenses % to net sales
|
15.9
|
%
|
15.6
|
%
|
|
30
|
bps
|
|
Six Months Ended
June 30, |
|
|
||||||||
|
2019
|
2018
|
$ Change
|
Change
|
|||||||
Selling, general and administrative expenses
|
$
|
311.4
|
|
$
|
290.4
|
|
$
|
21.0
|
|
7.2
|
%
|
Selling, general and administrative expenses % to net sales
|
15.7
|
%
|
16.2
|
%
|
—
|
|
(50
|
) bps
|
|
Three Months Ended
June 30, |
|
|
||||||||
|
2019
|
2018
|
$ Change
|
% Change
|
|||||||
Interest expense
|
$
|
(19.3
|
)
|
$
|
(10.7
|
)
|
$
|
(8.6
|
)
|
80.4
|
%
|
Interest income
|
$
|
1.1
|
|
$
|
0.5
|
|
$
|
0.6
|
|
120.0
|
%
|
|
Three Months Ended
June 30, |
|
|
||||||||
|
2019
|
2018
|
$ Change
|
% Change
|
|||||||
Non-service pension and other postretirement income
|
$
|
0.2
|
|
$
|
4.1
|
|
$
|
(3.9
|
)
|
(95.1
|
)%
|
Other income, net
|
1.4
|
|
2.9
|
|
(1.5
|
)
|
(51.7
|
)%
|
|||
Total other income, net
|
$
|
1.6
|
|
$
|
7.0
|
|
$
|
(5.4
|
)
|
(77.1
|
)%
|
|
Six Months Ended
June 30, |
|
|
||||||||
|
2019
|
2018
|
$ Change
|
% Change
|
|||||||
Non-service pension and other postretirement income
|
$
|
0.3
|
|
$
|
5.7
|
|
$
|
(5.4
|
)
|
(94.7
|
)%
|
Other income, net
|
4.7
|
|
3.6
|
|
1.1
|
|
30.6
|
%
|
|||
Total other income, net
|
$
|
5.0
|
|
$
|
9.3
|
|
$
|
(4.3
|
)
|
(46.2
|
)%
|
|
Three Months Ended
June 30, |
|
|
||||||||
|
2019
|
2018
|
$ Change
|
% Change
|
|||||||
Provision for income taxes
|
$
|
33.6
|
|
$
|
30.2
|
|
$
|
3.4
|
|
11.3
|
%
|
Effective tax rate
|
26.1
|
%
|
24.7
|
%
|
|
140 bps
|
|
Six Months Ended
June 30, |
|
|
||||||||
|
2019
|
2018
|
$ Change
|
Change
|
|||||||
Provision for income taxes
|
$
|
74.9
|
|
$
|
58.5
|
|
$
|
16.4
|
|
28.0
|
%
|
Effective tax rate
|
28.3
|
%
|
25.3
|
%
|
|
300 bps
|
•
|
The Company acquired Diamond Chain during the second quarter of 2019. Substantially all of the results for Diamond Chain are reported in the Process Industries segment.
|
•
|
The Company acquired Rollon, Cone Drive and ABC Bearings during the third quarter of 2018. Substantially all of the results for Cone Drive and Rollon are reported in the Process Industries segment. Substantially all of the results for ABC Bearings are reported in the Mobile Industries segment.
|
•
|
The Company divested Groeneveld Information Technology Holding B.V. (the "ICT Business") on September 19, 2018. Results for the ICT Business were reported in the Mobile Industries segment.
|
|
Three Months Ended
June 30, |
|
|
||||||||
|
2019
|
2018
|
$ Change
|
Change
|
|||||||
Net sales
|
$
|
493.7
|
|
$
|
489.1
|
|
$
|
4.6
|
|
0.9
|
%
|
EBIT
|
$
|
59.1
|
|
$
|
54.5
|
|
$
|
4.6
|
|
8.4
|
%
|
EBIT margin
|
12.0
|
%
|
11.1
|
%
|
|
90
|
bps
|
|
Three Months Ended
June 30, |
|
|
||||||||
|
2019
|
2018
|
$ Change
|
% Change
|
|||||||
Net sales
|
$
|
493.7
|
|
$
|
489.1
|
|
$
|
4.6
|
|
0.9
|
%
|
Less: Acquisitions
|
25.0
|
|
—
|
|
25.0
|
|
NM
|
|
|||
Divestitures
|
(3.1
|
)
|
—
|
|
(3.1
|
)
|
NM
|
|
|||
Currency
|
(11.1
|
)
|
—
|
|
(11.1
|
)
|
NM
|
|
|||
Net sales, excluding the impact of acquisitions, divestitures and currency
|
$
|
482.9
|
|
$
|
489.1
|
|
$
|
(6.2
|
)
|
(1.3
|
%)
|
|
Six Months Ended
June 30, |
|
|
||||||||
|
2019
|
2018
|
$ Change
|
% Change
|
|||||||
Net sales
|
$
|
993.7
|
|
$
|
977.6
|
|
$
|
16.1
|
|
1.6
|
%
|
EBIT
|
$
|
120.5
|
|
$
|
105.6
|
|
$
|
14.9
|
|
14.1
|
%
|
EBIT margin
|
12.1
|
%
|
10.8
|
%
|
—
|
|
130
|
bps
|
|
Six Months Ended
June 30, |
|
|
||||||||
|
2019
|
2018
|
$ Change
|
% Change
|
|||||||
Net sales
|
$
|
993.7
|
|
$
|
977.6
|
|
$
|
16.1
|
|
1.6
|
%
|
Less: Acquisitions
|
46.8
|
|
—
|
|
46.8
|
|
NM
|
|
|||
Divestitures
|
(6.5
|
)
|
—
|
|
(6.5
|
)
|
NM
|
|
|||
Currency
|
(27.5
|
)
|
—
|
|
(27.5
|
)
|
NM
|
|
|||
Net sales, excluding the impact of acquisitions, divestitures and currency
|
$
|
980.9
|
|
$
|
977.6
|
|
$
|
3.3
|
|
0.3
|
%
|
|
Three Months Ended
June 30, |
|
|
||||||||
|
2019
|
2018
|
$ Change
|
Change
|
|||||||
Net sales
|
$
|
506.3
|
|
$
|
417.2
|
|
$
|
89.1
|
|
21.4
|
%
|
EBIT
|
$
|
103.0
|
|
$
|
90.6
|
|
$
|
12.4
|
|
13.7
|
%
|
EBIT margin
|
20.3
|
%
|
21.7
|
%
|
|
(140) bps
|
|
Three Months Ended
June 30, |
|
|
||||||||
|
2019
|
2018
|
$ Change
|
% Change
|
|||||||
Net sales
|
$
|
506.3
|
|
$
|
417.2
|
|
$
|
89.1
|
|
21.4
|
%
|
Less: Acquisitions
|
76.4
|
|
—
|
|
76.4
|
|
NM
|
|
|||
Currency
|
(11.4
|
)
|
—
|
|
(11.4
|
)
|
NM
|
|
|||
Net sales, excluding the impact of acquisitions and currency
|
$
|
441.3
|
|
$
|
417.2
|
|
$
|
24.1
|
|
5.8
|
%
|
|
Six Months Ended
June 30, |
|
|
||||||||
|
2019
|
2018
|
$ Change
|
Change
|
|||||||
Net sales
|
$
|
986.0
|
|
$
|
811.8
|
|
$
|
174.2
|
|
21.5
|
%
|
EBIT
|
$
|
209.2
|
|
$
|
172.2
|
|
$
|
37.0
|
|
21.5
|
%
|
EBIT margin
|
21.2
|
%
|
21.2
|
%
|
|
—
|
|
|
Six Months Ended
June 30, |
|
|
||||||||
|
2019
|
2018
|
$ Change
|
% Change
|
|||||||
Net sales
|
$
|
986.0
|
|
$
|
811.8
|
|
$
|
174.2
|
|
21.5
|
%
|
Less: Acquisitions
|
128.9
|
|
—
|
|
128.9
|
|
NM
|
|
|||
Currency
|
(25.5
|
)
|
—
|
|
(25.5
|
)
|
NM
|
|
|||
Net sales, excluding the impact of acquisitions and currency
|
$
|
882.6
|
|
$
|
811.8
|
|
$
|
70.8
|
|
8.7
|
%
|
|
Three Months Ended
June 30, |
|
|
|||||||
|
2019
|
2018
|
$ Change
|
Change
|
||||||
Corporate expenses
|
$
|
15.4
|
|
$
|
15.2
|
|
$
|
0.2
|
|
1.3%
|
Corporate expenses % to net sales
|
1.5
|
%
|
1.7
|
%
|
|
(20) bps
|
|
Six Months Ended
June 30, |
|
|
|||||||
|
2019
|
2018
|
$ Change
|
Change
|
||||||
Corporate expenses
|
$
|
29.7
|
|
$
|
29.3
|
|
$
|
0.4
|
|
1.4%
|
Corporate expenses % to net sales
|
1.5
|
%
|
1.6
|
%
|
|
(10) bps
|
|
June 30,
2019 |
December 31,
2018 |
$ Change
|
% Change
|
|||||||
Cash and cash equivalents
|
$
|
166.8
|
|
$
|
132.5
|
|
$
|
34.3
|
|
25.9
|
%
|
Restricted cash
|
0.6
|
|
0.6
|
|
—
|
|
—
|
%
|
|||
Accounts receivable, net
|
589.9
|
|
546.6
|
|
43.3
|
|
7.9
|
%
|
|||
Unbilled receivables
|
153.3
|
|
116.6
|
|
36.7
|
|
31.5
|
%
|
|||
Inventories, net
|
843.8
|
|
835.7
|
|
8.1
|
|
1.0
|
%
|
|||
Deferred charges and prepaid expenses
|
29.3
|
|
28.2
|
|
1.1
|
|
3.9
|
%
|
|||
Other current assets
|
83.0
|
|
77.0
|
|
6.0
|
|
7.8
|
%
|
|||
Total current assets
|
$
|
1,866.7
|
|
$
|
1,737.2
|
|
$
|
129.5
|
|
7.5
|
%
|
|
June 30,
2019 |
December 31,
2018 |
$ Change
|
% Change
|
|||||||
Property, plant and equipment, net
|
$
|
912.0
|
|
$
|
912.1
|
|
$
|
(0.1
|
)
|
—
|
%
|
|
June 30,
2019 |
December 31,
2018 |
$ Change
|
% Change
|
||||||
Operating lease assets
|
$
|
117.3
|
|
$
|
—
|
|
$
|
117.3
|
|
NM
|
|
June 30,
2019 |
December 31,
2018 |
$ Change
|
% Change
|
|||||||
Goodwill
|
$
|
969.4
|
|
$
|
960.5
|
|
$
|
8.9
|
|
0.9
|
%
|
Non-current pension assets
|
10.9
|
|
6.2
|
|
4.7
|
|
75.8
|
%
|
|||
Other intangible assets
|
731.5
|
|
733.2
|
|
(1.7
|
)
|
(0.2
|
)%
|
|||
Deferred income taxes
|
49.4
|
|
59.0
|
|
(9.6
|
)
|
(16.3
|
)%
|
|||
Other non-current assets
|
17.0
|
|
37.0
|
|
(20.0
|
)
|
(54.1
|
)%
|
|||
Total other assets
|
$
|
1,778.2
|
|
$
|
1,795.9
|
|
$
|
(17.7
|
)
|
(1.0
|
)%
|
|
June 30,
2019 |
December 31,
2018 |
$ Change
|
% Change
|
|||||||
Short-term debt
|
$
|
37.3
|
|
$
|
33.6
|
|
$
|
3.7
|
|
11.0
|
%
|
Current portion of long-term debt
|
9.0
|
|
9.4
|
|
(0.4
|
)
|
(4.3
|
)%
|
|||
Short-term operating lease liabilities
|
29.5
|
|
—
|
|
29.5
|
|
NM
|
|
|||
Accounts payable
|
291.6
|
|
273.2
|
|
18.4
|
|
6.7
|
%
|
|||
Salaries, wages and benefits
|
134.3
|
|
174.9
|
|
(40.6
|
)
|
(23.2
|
)%
|
|||
Income taxes payable
|
26.4
|
|
23.5
|
|
2.9
|
|
12.3
|
%
|
|||
Other current liabilities
|
168.2
|
|
171.0
|
|
(2.8
|
)
|
(1.6
|
)%
|
|||
Total current liabilities
|
$
|
696.3
|
|
$
|
685.6
|
|
$
|
10.7
|
|
1.6
|
%
|
|
June 30,
2019 |
December 31,
2018 |
$ Change
|
% Change
|
|||||||
Long-term debt
|
$
|
1,642.6
|
|
$
|
1,638.6
|
|
$
|
4.0
|
|
0.2
|
%
|
Accrued pension cost
|
162.6
|
|
161.3
|
|
1.3
|
|
0.8
|
%
|
|||
Accrued postretirement benefits cost
|
109.3
|
|
108.7
|
|
0.6
|
|
0.6
|
%
|
|||
Long-term operating lease liabilities
|
73.0
|
|
—
|
|
73.0
|
|
NM
|
|
|||
Deferred income taxes
|
128.7
|
|
138.0
|
|
(9.3
|
)
|
(6.7
|
)%
|
|||
Other non-current liabilities
|
78.1
|
|
70.3
|
|
7.8
|
|
11.1
|
%
|
|||
Total non-current liabilities
|
$
|
2,194.3
|
|
$
|
2,116.9
|
|
$
|
77.4
|
|
3.7
|
%
|
|
June 30,
2019 |
December 31,
2018 |
$ Change
|
% Change
|
|||||||
Common shares
|
$
|
994.4
|
|
$
|
1,005.0
|
|
$
|
(10.6
|
)
|
(1.1
|
)%
|
Earnings invested in the business
|
1,772.0
|
|
1,630.2
|
|
141.8
|
|
8.7
|
%
|
|||
Accumulated other comprehensive loss
|
(97.5
|
)
|
(95.3
|
)
|
(2.2
|
)
|
2.3
|
%
|
|||
Treasury shares
|
(957.6
|
)
|
(960.3
|
)
|
2.7
|
|
(0.3
|
)%
|
|||
Noncontrolling interest
|
72.3
|
|
63.1
|
|
9.2
|
|
14.6
|
%
|
|||
Total shareholders’ equity
|
$
|
1,783.6
|
|
$
|
1,642.7
|
|
$
|
140.9
|
|
8.6
|
%
|
|
Six Months Ended
June 30, |
|
|||||||
|
2019
|
2018
|
$ Change
|
||||||
Net cash provided by operating activities
|
$
|
209.9
|
|
$
|
57.8
|
|
$
|
152.1
|
|
Net cash used in investing activities
|
(119.8
|
)
|
(36.0
|
)
|
(83.8
|
)
|
|||
Net cash (used in) provided by financing activities
|
(56.9
|
)
|
7.9
|
|
(64.8
|
)
|
|||
Effect of exchange rate changes on cash
|
1.1
|
|
(8.5
|
)
|
9.6
|
|
|||
Increase in cash, cash equivalents and restricted cash
|
$
|
34.3
|
|
$
|
21.2
|
|
$
|
13.1
|
|
|
Six Months Ended
June 30, |
|
|||||||
|
2019
|
2018
|
$ Change
|
||||||
Cash (Used) Provided:
|
|
|
|
||||||
Accounts receivable
|
$
|
(35.9
|
)
|
$
|
(86.4
|
)
|
$
|
50.5
|
|
Unbilled receivables
|
(36.6
|
)
|
(27.8
|
)
|
(8.8
|
)
|
|||
Inventories
|
16.6
|
|
(79.9
|
)
|
96.5
|
|
|||
Trade accounts payable
|
13.4
|
|
(8.4
|
)
|
21.8
|
|
|||
Other accrued expenses
|
(45.1
|
)
|
(2.4
|
)
|
(42.7
|
)
|
|||
Cash used in working capital items
|
$
|
(87.6
|
)
|
$
|
(204.9
|
)
|
$
|
117.3
|
|
|
Six Months Ended
June 30, |
|
|||||||
|
2019
|
2018
|
$ Change
|
||||||
Accrued income tax expense
|
$
|
74.9
|
|
$
|
58.5
|
|
$
|
16.4
|
|
Income tax payments
|
(68.7
|
)
|
(59.5
|
)
|
(9.2
|
)
|
|||
Other miscellaneous items
|
(3.8
|
)
|
(2.7
|
)
|
(1.1
|
)
|
|||
Change in income taxes
|
$
|
2.4
|
|
$
|
(3.7
|
)
|
$
|
6.1
|
|
|
June 30,
2019 |
December 31,
2018 |
||||
Short-term debt
|
$
|
37.3
|
|
$
|
33.6
|
|
Current portion of long-term debt
|
9.0
|
|
9.4
|
|
||
Long-term debt
|
1,642.6
|
|
1,638.6
|
|
||
Total debt
|
$
|
1,688.9
|
|
$
|
1,681.6
|
|
Less: Cash and cash equivalents
|
166.8
|
|
132.5
|
|
||
Restricted cash
|
0.6
|
|
0.6
|
|
||
Net debt
|
$
|
1,521.5
|
|
$
|
1,548.5
|
|
|
June 30,
2019 |
December 31,
2018 |
||||
Net debt
|
$
|
1,521.5
|
|
$
|
1,548.5
|
|
Total equity
|
1,783.6
|
|
1,642.7
|
|
||
Net debt plus total equity (capital)
|
$
|
3,305.1
|
|
$
|
3,191.2
|
|
Ratio of net debt to capital
|
46.0
|
%
|
48.5
|
%
|
•
|
deterioration in world economic conditions, or in economic conditions in any of the geographic regions in which the Company or its customers or suppliers conduct business, including adverse effects from a global economic slowdown, terrorism or hostilities. This includes: political risks associated with the potential instability of governments and legal systems in countries in which the Company or its customers or suppliers conduct business, changes in currency valuations and recent world events that have increased the risks posed by international trade disputes, tariffs and sanctions;
|
•
|
the effects of fluctuations in customer demand on sales, product mix and prices in the industries in which the Company operates. This includes: the ability of the Company to respond to rapid changes in customer demand, the effects of customer or supplier bankruptcies or liquidations, the impact of changes in industrial business cycles and whether conditions of fair trade continue in the Company's markets;
|
•
|
competitive factors, including changes in market penetration, increasing price competition by existing or new foreign and domestic competitors, the introduction of new products by existing and new competitors and new technology that may impact the way the Company’s products are sold or distributed;
|
•
|
changes in operating costs. This includes: the effect of changes in the Company’s manufacturing processes; changes in costs associated with varying levels of operations and manufacturing capacity; availability and cost of raw materials and energy; changes in the expected costs associated with product warranty claims; changes resulting from inventory management and cost reduction initiatives; the effects of unplanned plant shutdowns; and changes in the cost of labor and benefits;
|
•
|
the success of the Company’s operating plans, announced programs, initiatives and capital investments; the ability to integrate acquired companies; and the ability of acquired companies to achieve satisfactory operating results, including results being accretive to earnings;
|
•
|
the Company’s ability to maintain appropriate relations with unions or works councils that represent Company associates in certain locations in order to avoid disruptions of business;
|
•
|
unanticipated litigation, claims, investigations or assessments. This includes: claims or problems related to intellectual property, product liability or warranty, environmental issues and taxes;
|
•
|
changes in worldwide financial and capital markets, including availability of financing and interest rates on satisfactory terms, which affect the Company’s cost of funds and/or ability to raise capital, as well as customer demand and the ability of customers to obtain financing to purchase the Company’s products or equipment that contain the Company’s products;
|
•
|
the Company's ability to satisfy its obligations under its debt agreements, as well as its ability to renew or refinance borrowings on favorable terms;
|
•
|
the impact on the Company's pension obligations and assets due to changes in interest rates, investment performance and other tactics designed to reduce risk; and
|
•
|
those items identified under Item 1A. Risk Factors in the Company's Annual Report on Form 10-K for the year ended December 31, 2018.
|
(a)
|
Disclosure Controls and Procedures
|
(b)
|
Changes in Internal Control Over Financial Reporting
|
Period
|
Total number
of shares
purchased (1)
|
|
Average
price paid
per share (2)
|
|
Total number
of shares
purchased as
part of publicly
announced
plans or
programs
|
|
Maximum
number of
shares that
may yet
be purchased
under the plans
or programs (3)
|
|
|
4/1/19 - 4/30/19
|
128
|
|
$
|
47.72
|
|
—
|
|
6,580,710
|
|
5/1/19 - 5/31/19
|
300,334
|
|
48.45
|
|
287,000
|
|
6,293,710
|
|
|
6/1/19 - 6/30/19
|
34,023
|
|
44.20
|
|
33,000
|
|
6,260,710
|
|
|
Total
|
334,485
|
|
$
|
48.02
|
|
320,000
|
|
|
|
(1)
|
Of the shares purchased in April, May and June, 128, 13,334, and 1,023, respectively, represent common shares of the Company that were owned and tendered by employees to exercise stock options and to satisfy withholding obligations in connection with the exercise of stock options or vesting of restricted shares.
|
(2)
|
For shares tendered in connection with the vesting of restricted shares, the average price paid per share is an average calculated using the daily high and low of the Company's common shares as quoted on the New York Stock Exchange at the time of vesting. For shares tendered in connection with the exercise of stock options, the price paid is the real-time trading stock price at the time the options are exercised.
|
(3)
|
On February 6, 2017, the Company announced that its Board of Directors approved a share purchase plan pursuant to which the Company may purchase up to ten million of its common shares in the aggregate. This share repurchase plan expires on February 28, 2021. The Company may purchase shares from time to time in open market purchases or privately negotiated transactions. The Company may make all or part of the purchases pursuant to accelerated share repurchases or Rule 10b5-1 plans.
|
|
|
THE TIMKEN COMPANY
|
Date: July 31, 2019
|
|
By: /s/ Richard G. Kyle
|
|
|
Richard G. Kyle
President and Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
Date: July 31, 2019
|
|
By: /s/ Philip D. Fracassa
|
|
|
Philip D. Fracassa
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|
If to the Company:
|
Timken Europe
|
If to the Employee:
|
Andreas Roellgen
|
By:
|
/s/ Andreas Roellgen
|
By:
|
/s/ Dominique Ohl
|
By: /s/ Richard G. Kyle
|
|
Richard G. Kyle
President and Chief Executive Officer
(Principal Executive Officer)
|
|
By: /s/ Philip D. Fracassa
|
|
Philip D. Fracassa
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|
|
By: /s/ Richard G. Kyle
|
|
Richard G. Kyle
President and Chief Executive Officer
(Principal Executive Officer)
|
|
By: /s/ Philip D. Fracassa
|
|
Philip D. Fracassa
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|
|