☒
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Ohio
|
|
34-0577130
|
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
|
|
4500 Mount Pleasant Street NW
|
|
|
|
North Canton
|
Ohio
|
|
44720-5450
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Title of each class
|
|
Trading Symbol
|
|
Name of each exchange on which registered
|
Common Shares, without par value
|
|
TKR
|
|
New York Stock Exchange
|
Large accelerated filer
|
☒
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☐
|
Emerging growth company
|
☐
|
Class
|
|
Outstanding at January 31, 2020
|
Common Shares, without par value
|
|
75,565,361 shares
|
Document
|
|
Parts Into Which Incorporated
|
Proxy Statement for the Annual Meeting of Shareholders to be held on or about May 8, 2020 (Proxy Statement)
|
|
Part III
|
|
|
|
PAGE
|
I.
|
|
|
|
|
Item 1.
|
||
|
Item 1A.
|
||
|
Item 1B.
|
||
|
Item 2.
|
||
|
Item 3.
|
||
|
Item 4.
|
||
|
Item 4A.
|
||
II.
|
|
|
|
|
Item 5.
|
||
|
Item 6.
|
||
|
Item 7.
|
||
|
Item 7A.
|
||
|
Item 8.
|
||
|
Item 9.
|
||
|
Item 9A.
|
||
|
Item 9B.
|
||
III.
|
|
|
|
|
Item 10.
|
||
|
Item 11.
|
||
|
Item 12.
|
||
|
Item 13.
|
||
|
Item 14.
|
||
IV.
|
|
|
|
|
Item 15.
|
|
December 31,
|
|||||
(Dollars in millions)
|
2019
|
2018
|
||||
Segment:
|
|
|
||||
Mobile Industries
|
$
|
952.9
|
|
$
|
955.0
|
|
Process Industries
|
782.5
|
|
699.3
|
|
||
Total Company
|
$
|
1,735.4
|
|
$
|
1,654.3
|
|
•
|
changes in international treaties or trade unions (e.g., the UK's probable withdrawal from the European Union, commonly referred to as "Brexit"), which may make our products or our customers' products more costly to export or import;
|
•
|
changes in tariff regulations, which may make our products more costly to export or import;
|
•
|
difficulties establishing and maintaining relationships with local OEMs, distributors and dealers;
|
•
|
import and export licensing requirements;
|
•
|
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;
|
•
|
disadvantages of competing against companies from countries that are not subject to U.S. laws and regulations, including the Foreign Corrupt Practices Act ("FCPA");
|
•
|
difficulty in staffing and managing geographically diverse operations; and
|
•
|
tax exposures related to cross-border intercompany transfer pricing and other tax risks unique to international operations.
|
Name
|
|
Age
|
|
Current Position and Previous Positions During Last Five Years
|
Christopher A. Coughlin
|
|
59
|
|
2014 Executive Vice President, Group President
|
Philip D. Fracassa
|
|
51
|
|
2014 Executive Vice President and Chief Financial Officer
|
Richard G. Kyle
|
|
54
|
|
2014 President and Chief Executive Officer
|
Hans Landin
|
|
47
|
|
2018 Group Vice President
|
|
|
|
|
2017 Vice President - Mechanical Power Transmission
|
|
|
|
|
2014 Vice President - Power Transmission and Engineering Systems
|
Ronald J. Myers
|
|
61
|
|
2017 Executive Vice President - Human Resources
|
|
|
|
|
2015 Vice President of Human Resources
|
|
|
|
|
2014 Vice President - Organizational Advancement
|
Hansal N. Patel
|
|
39
|
|
2019 Vice President, General Counsel and Secretary
|
|
|
|
|
2019 Vice President - Legal and Corporate Secretary
|
|
|
|
|
2018 Director - Legal and Corporate Secretary
|
|
|
|
|
2016 Managing Attorney - M&A, Securities and Assistant Corporate Secretary
|
|
|
|
|
2014 Senior Corporate Attorney, Securities and Finance
|
Andreas Roellgen
|
|
52
|
|
2016 Vice President - Europe, Asia and Africa
|
|
|
|
|
2014 Vice President - Process Industries and Managing Director, Europe
|
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)
|
|||||
10/1/2019 - 10/31/2019
|
154,253
|
|
$
|
42.75
|
|
153,668
|
|
5,357,042
|
|
11/1/2019 - 11/30/2019
|
26,432
|
|
52.81
|
|
—
|
|
5,357,042
|
|
|
12/1/2019 - 12/31/2019
|
1,301
|
|
55.21
|
|
—
|
|
5,357,042
|
|
|
Total
|
181,986
|
|
$
|
44.30
|
|
153,668
|
|
—
|
|
(1)
|
Of the shares purchased in October, November and December, 585, 26,432 and 1,301, 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.
|
(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 share price at the time the options are exercised.
|
(3)
|
On February 6, 2017, the Company's Board of Directors approved a share repurchase plan pursuant to which the Company may purchase up to ten million of its common shares, in the aggregate. This share purchase plan expires on February 28, 2021. Under this plan the Company purchased shares from time to time in open market purchases or privately negotiated transactions and was able to make all or part of the purchases pursuant to accelerated share repurchases or Rule 10b5-1 plans.
|
|
|||||||||||||||
|
2015
|
2016
|
2017
|
2018
|
2019
|
||||||||||
Timken
|
$
|
69
|
|
$
|
99
|
|
$
|
125
|
|
$
|
97
|
|
$
|
151
|
|
S&P 500
|
101
|
|
114
|
|
138
|
|
132
|
|
174
|
|
|||||
S&P 400 Industrials
|
97
|
|
125
|
|
154
|
|
131
|
|
175
|
|
(Dollars in millions, except per share, shareholder and per employee data)
|
2019
|
2018
|
2017
|
2016
|
2015
|
||||||||||
Statements of Income
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
3,789.9
|
|
$
|
3,580.8
|
|
$
|
3,003.8
|
|
$
|
2,669.8
|
|
$
|
2,872.3
|
|
Gross profit
|
1,141.8
|
|
1,040.1
|
|
812.1
|
|
706.3
|
|
803.8
|
|
|||||
Operating income
|
516.4
|
|
454.5
|
|
299.5
|
|
244.4
|
|
333.2
|
|
|||||
Net income
|
374.7
|
|
305.5
|
|
202.3
|
|
141.1
|
|
191.4
|
|
|||||
Net income attributable to The Timken Company
|
$
|
362.1
|
|
$
|
302.8
|
|
$
|
203.4
|
|
$
|
140.8
|
|
$
|
188.6
|
|
Balance Sheets
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
4,859.9
|
|
$
|
4,445.2
|
|
$
|
3,402.4
|
|
$
|
2,763.2
|
|
$
|
2,789.0
|
|
Total debt
|
1,730.1
|
|
1,681.6
|
|
962.3
|
|
659.2
|
|
656.5
|
|
|||||
Total liabilities
|
2,905.1
|
|
2,802.5
|
|
1,927.5
|
|
1,452.3
|
|
1,439.4
|
|
|||||
Total equity
|
$
|
1,954.8
|
|
$
|
1,642.7
|
|
$
|
1,474.9
|
|
$
|
1,310.9
|
|
$
|
1,349.6
|
|
Other Comparative Data
|
|
|
|
|
|
||||||||||
Net income / net sales
|
9.9
|
%
|
8.5
|
%
|
6.7
|
%
|
5.3
|
%
|
6.7
|
%
|
|||||
Net income attributable to The Timken Company / net sales
|
9.6
|
%
|
8.5
|
%
|
6.8
|
%
|
5.3
|
%
|
6.6
|
%
|
|||||
Return on equity (1)
|
19.2
|
%
|
18.6
|
%
|
13.7
|
%
|
10.8
|
%
|
14.2
|
%
|
|||||
Net sales per employee (2)
|
$
|
208.8
|
|
$
|
220.5
|
|
$
|
206.3
|
|
$
|
185.3
|
|
$
|
197.5
|
|
Capital expenditures
|
140.6
|
|
112.6
|
|
104.7
|
|
137.5
|
|
105.6
|
|
|||||
Capital expenditures / net sales
|
3.7
|
%
|
3.1
|
%
|
3.5
|
%
|
5.2
|
%
|
3.7
|
%
|
|||||
Depreciation and amortization
|
160.6
|
|
146.0
|
|
137.7
|
|
131.7
|
|
130.8
|
|
|||||
Basic earnings per share (3)
|
4.78
|
|
3.93
|
|
2.62
|
|
1.79
|
|
2.23
|
|
|||||
Diluted earnings per share (4)
|
4.71
|
|
3.86
|
|
2.58
|
|
1.78
|
|
2.21
|
|
|||||
Dividends per share
|
$
|
1.12
|
|
$
|
1.11
|
|
$
|
1.07
|
|
$
|
1.04
|
|
$
|
1.03
|
|
Weighted average number of shares outstanding - basic
|
75,758,123
|
|
77,119,602
|
|
77,736,398
|
|
78,516,029
|
|
84,631,778
|
|
|||||
Weighted average number of shares outstanding - diluted
|
76,896,565
|
|
78,337,481
|
|
78,911,149
|
|
79,234,324
|
|
85,346,246
|
|
|||||
Number of employees at year-end
|
18,829
|
|
17,477
|
|
15,006
|
|
14,111
|
|
14,709
|
|
(1)
|
Return on equity is defined as net income divided by ending total equity.
|
(2)
|
Dollars in thousands, based on average number of employees employed during the year.
|
(3)
|
Based on weighted average number of shares outstanding during the year.
|
(4)
|
Based on weighted average number of shares outstanding during the year, assuming dilution of stock options and awards.
|
•
|
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 distributors.
|
•
|
Process Industries serves OEM and end-user customers in industries that place heavy demands on the fixed operating equipment they make or use in heavy and other general industrial sectors. This includes metals, cement and aggregate production; power generation and renewable energy sources; oil and gas extraction and refining; pulp and paper and food processing; automation and robotics; and health and critical motion control equipment. Other applications include marine equipment, gear drives, cranes, hoists and conveyors. This segment also supports aftermarket sales and service needs through its global network of authorized industrial distributors and through the provision of services directly to end users.
|
•
|
On November 1, 2019, the Company completed the acquisition of BEKA Lubrication ("BEKA"), a leading global supplier of automatic lubrications systems serving a diverse range of industrial sectors including wind, food and beverage, rail, on- and off-highway and other process industries. BEKA, located in Pegnitz, Germany, employs approximately 900 people, and had annual sales at the time of the acquisition of approximately $135 million. The acquisition was funded with cash on hand and through borrowings under existing credit facilities.
|
•
|
On April 1, 2019, the Company acquired Diamond Chain Company ("Diamond Chain"), a leading supplier of high-performance roller chains for industrial markets. Diamond Chain serves a diverse range of sectors, including industrial distribution, material handling, food and beverage, agriculture, construction and other process industries. At the time of the acquisition, Diamond had annual sales of approximately $60 million. Diamond Chain has manufacturing operations in the U.S. and China and employs approximately 370 people. The acquisition was funded with cash on hand and through borrowings under existing credit facilities.
|
|
2019
|
2018
|
$ Change
|
% Change
|
|||||||
Net sales
|
$
|
3,789.9
|
|
$
|
3,580.8
|
|
$
|
209.1
|
|
5.8
|
%
|
Net income
|
374.7
|
|
305.5
|
|
69.2
|
|
22.7
|
%
|
|||
Net income attributable to noncontrolling interest
|
12.6
|
|
2.7
|
|
9.9
|
|
366.7
|
%
|
|||
Net income attributable to The Timken Company
|
$
|
362.1
|
|
$
|
302.8
|
|
$
|
59.3
|
|
19.6
|
%
|
Diluted earnings per share
|
$
|
4.71
|
|
$
|
3.86
|
|
$
|
0.85
|
|
22.0
|
%
|
Average number of diluted shares
|
76,896,565
|
|
78,337,481
|
|
—
|
|
(1.8
|
%)
|
|
2019
|
2018
|
$ Change
|
% Change
|
|||||||
Net sales
|
$
|
3,789.9
|
|
$
|
3,580.8
|
|
$
|
209.1
|
|
5.8
|
%
|
|
2019
|
2018
|
$ Change
|
Change
|
|||||||
Gross profit
|
$
|
1,141.8
|
|
$
|
1,040.1
|
|
$
|
101.7
|
|
9.8
|
%
|
Gross profit % to net sales
|
30.1
|
%
|
29.0
|
%
|
—
|
|
110
|
bps
|
|
2019
|
2018
|
$ Change
|
Change
|
||||||
Selling, general and administrative expenses
|
$
|
618.6
|
|
$
|
580.7
|
|
$
|
37.9
|
|
6.5%
|
Selling, general and administrative expenses % to net sales
|
16.3
|
%
|
16.2
|
%
|
—
|
|
10 bps
|
|
2019
|
2018
|
$ Change
|
% Change
|
|||||||
Interest expense
|
$
|
(72.1
|
)
|
$
|
(51.7
|
)
|
$
|
(20.4
|
)
|
39.5
|
%
|
Interest income
|
4.9
|
|
2.1
|
|
2.8
|
|
133.3
|
%
|
|
2019
|
2018
|
$ Change
|
% Change
|
|||||||
Non-service pension and other postretirement income (expense)
|
$
|
10.2
|
|
$
|
(6.2
|
)
|
$
|
16.4
|
|
(264.5
|
%)
|
Other income, net
|
13.0
|
|
9.4
|
|
3.6
|
|
38.3
|
%
|
|
2019
|
2018
|
$ Change
|
Change
|
|||||||
Income tax expense
|
$
|
97.7
|
|
$
|
102.6
|
|
$
|
(4.9
|
)
|
(4.8
|
%)
|
Effective tax rate
|
20.7
|
%
|
25.1
|
%
|
—
|
|
(440
|
) bps
|
•
|
The Company acquired BEKA during the fourth quarter of 2019. The majority of the results for BEKA are reported in the Mobile Industries segment.
|
•
|
The Company acquired Diamond Chain during the second quarter of 2019. The majority of the results for Diamond Chain are reported in the Process Industries segment.
|
•
|
The Company acquired ABC Bearings Limited ("ABC Bearings"), Apiary Investments Holding Limited ("Cone Drive"), and Rollon S.p.A. ("Rollon") during the third quarter of 2018. Substantially all of the results for ABC Bearings are reported in the Mobile Industries segment. Results for Cone Drive and Rollon are reported in the Mobile Industries and Process Industries segments based on customers and underlying market sectors served.
|
•
|
The Company divested Groeneveld Information Technology Holding B.V. (the "ICT Business") on September 19, 2018. The Company acquired the ICT Business in July 2017 as part of the Groeneveld Group ("Groeneveld") acquisition. The ICT Business is separate from the Groeneveld lubrication solutions business and was considered non-core to the operations. Results for the ICT Business were reported in the Mobile Industries segment.
|
|
2019
|
2018
|
$ Change
|
Change
|
|||||||
Net sales
|
$
|
1,893.9
|
|
$
|
1,903.7
|
|
$
|
(9.8
|
)
|
(0.5
|
%)
|
EBITDA
|
$
|
284.9
|
|
$
|
272.2
|
|
$
|
12.7
|
|
4.7
|
%
|
EBITDA margin
|
15.0
|
%
|
14.3
|
%
|
—
|
|
70
|
bps
|
|||
|
|
|
|
|
|||||||
|
2019
|
2018
|
$ Change
|
% Change
|
|||||||
Net sales
|
$
|
1,893.9
|
|
$
|
1,903.7
|
|
$
|
(9.8
|
)
|
(0.5
|
%)
|
Less: Acquisitions
|
82.5
|
|
—
|
|
82.5
|
|
NM
|
|
|||
Divestitures
|
(8.5
|
)
|
—
|
|
(8.5
|
)
|
NM
|
|
|||
Currency
|
(36.0
|
)
|
—
|
|
(36.0
|
)
|
NM
|
|
|||
Net sales, excluding the impact of acquisitions, divestitures and currency
|
$
|
1,855.9
|
|
$
|
1,903.7
|
|
$
|
(47.8
|
)
|
(2.5
|
%)
|
|
2019
|
2018
|
$ Change
|
Change
|
|||||||
Net sales
|
$
|
1,896.0
|
|
$
|
1,677.1
|
|
$
|
218.9
|
|
13.1
|
%
|
EBITDA
|
$
|
466.6
|
|
$
|
405.7
|
|
$
|
60.9
|
|
15.0
|
%
|
EBITDA margin
|
24.6
|
%
|
24.2
|
%
|
—
|
|
40
|
bps
|
|||
|
|
|
|
|
|||||||
|
2019
|
2018
|
$ Change
|
% Change
|
|||||||
Net sales
|
$
|
1,896.0
|
|
$
|
1,677.1
|
|
$
|
218.9
|
|
13.1
|
%
|
Less: Acquisitions
|
196.4
|
|
—
|
|
196.4
|
|
NM
|
|
|||
Currency
|
(36.5
|
)
|
—
|
|
(36.5
|
)
|
NM
|
|
|||
Net sales, excluding the impact of acquisitions and currency
|
$
|
1,736.1
|
|
$
|
1,677.1
|
|
$
|
59.0
|
|
3.5
|
%
|
|
2019
|
2018
|
$ Change
|
Change
|
|||||||
Corporate expenses
|
$
|
56.2
|
|
$
|
62.0
|
|
$
|
(5.8
|
)
|
(9.4
|
%)
|
Corporate expenses % to net sales
|
1.5
|
%
|
1.7
|
%
|
—
|
|
(20
|
) bps
|
|
2018
|
2017
|
$ Change
|
% Change
|
|||||||
Net sales
|
$
|
3,580.8
|
|
$
|
3,003.8
|
|
$
|
577.0
|
|
19.2
|
%
|
Net income
|
305.5
|
|
202.3
|
|
103.2
|
|
51.0
|
%
|
|||
Income (loss) attributable to noncontrolling interest
|
2.7
|
|
(1.1
|
)
|
3.8
|
|
(345.5
|
%)
|
|||
Net income attributable to The Timken Company
|
$
|
302.8
|
|
$
|
203.4
|
|
$
|
99.4
|
|
48.9
|
%
|
Diluted earnings per share
|
$
|
3.86
|
|
$
|
2.58
|
|
$
|
1.28
|
|
49.6
|
%
|
Average number of diluted shares
|
78,337,481
|
|
78,911,149
|
|
—
|
|
(0.7
|
%)
|
|
2018
|
2017
|
$ Change
|
% Change
|
|||||||
Net sales
|
$
|
3,580.8
|
|
$
|
3,003.8
|
|
$
|
577.0
|
|
19.2
|
%
|
|
2018
|
2017
|
$ Change
|
Change
|
|||||||
Gross profit
|
$
|
1,040.1
|
|
$
|
812.1
|
|
$
|
228.0
|
|
28.1
|
%
|
Gross profit % to net sales
|
29.0
|
%
|
27.0
|
%
|
—
|
|
200
|
bps
|
|
2018
|
2017
|
$ Change
|
Change
|
|||||||
Selling, general and administrative expenses
|
$
|
580.7
|
|
$
|
508.3
|
|
$
|
72.4
|
|
14.2
|
%
|
Selling, general and administrative expenses % to net sales
|
16.2
|
%
|
16.9
|
%
|
—
|
|
(70
|
) bps
|
|
2018
|
2017
|
$ Change
|
% Change
|
|||||||
Interest expense
|
$
|
(51.7
|
)
|
$
|
(37.1
|
)
|
$
|
(14.6
|
)
|
39.4
|
%
|
Interest income
|
$
|
2.1
|
|
$
|
2.9
|
|
$
|
(0.8
|
)
|
(27.6
|
%)
|
|
2018
|
2017
|
$ Change
|
% Change
|
|||||||
Non-service pension and other postretirement expense
|
(6.2
|
)
|
(15.0
|
)
|
8.8
|
|
(58.7
|
%)
|
|||
Other income (expense), net
|
$
|
9.4
|
|
$
|
9.6
|
|
$
|
(0.2
|
)
|
(2.1
|
)%
|
|
2018
|
2017
|
$ Change
|
Change
|
|||||||
Income tax expense
|
$
|
102.6
|
|
$
|
57.6
|
|
$
|
45.0
|
|
78.1
|
%
|
Effective tax rate
|
25.1
|
%
|
22.2
|
%
|
—
|
|
290
|
bps
|
•
|
The Company acquired ABC Bearings, Cone Drive and Rollon during the third quarter of 2018. Substantially all of the results for ABC Bearings are reported in the Mobile Industries segment. Results for Cone Drive and Rollon are reported in the Mobile Industries and Process Industries segments based on customers and underlying market sectors served.
|
•
|
The Company acquired Groeneveld during the third quarter of 2017. Substantially all of the results for Groeneveld are reported in the Mobile Industries segment.
|
•
|
The Company acquired Torsion Control Products, Inc. ("Torsion Control Products") and PT Tech, Inc. ("PT Tech") during the second quarter of 2017. Results for Torsion Control Products and PT Tech are reported in the Mobile Industries and Process Industries segments based on customers and underlying market sectors served.
|
|
2018
|
2017
|
$ Change
|
Change
|
|||||||
Net sales
|
$
|
1,903.7
|
|
$
|
1,640.0
|
|
$
|
263.7
|
|
16.1
|
%
|
EBITDA
|
$
|
272.2
|
|
$
|
209.9
|
|
$
|
62.3
|
|
29.7
|
%
|
EBITDA margin
|
14.3
|
%
|
12.8
|
%
|
—
|
|
150
|
bps
|
|
2018
|
2017
|
$ Change
|
% Change
|
||||||
Net sales
|
$
|
1,903.7
|
|
$
|
1,640.0
|
|
$
|
263.7
|
|
16.1
|
Less: Acquisitions
|
98.6
|
|
—
|
|
98.6
|
|
NM
|
|||
Currency
|
(2.3
|
)
|
—
|
|
(2.3
|
)
|
NM
|
|||
Net sales, excluding the impact of acquisitions and currency
|
$
|
1,807.4
|
|
$
|
1,640.0
|
|
$
|
167.4
|
|
10.2
|
|
2018
|
2017
|
$ Change
|
Change
|
|||||||
Net sales
|
$
|
1,677.1
|
|
$
|
1,363.8
|
|
$
|
313.3
|
|
23.0
|
%
|
EBITDA
|
$
|
405.7
|
|
$
|
288.6
|
|
$
|
117.1
|
|
40.6
|
%
|
EBITDA margin
|
24.2
|
%
|
21.2
|
%
|
—
|
|
300
|
bps
|
|||
|
|
|
|
|
|||||||
|
2018
|
2017
|
$ Change
|
% Change
|
|||||||
Net sales
|
$
|
1,677.1
|
|
$
|
1,363.8
|
|
$
|
313.3
|
|
23.0
|
%
|
Less: Acquisitions
|
78.7
|
|
—
|
|
78.7
|
|
NM
|
|
|||
Currency
|
6.0
|
|
—
|
|
6.0
|
|
NM
|
|
|||
Net sales, excluding the impact of acquisitions and currency
|
$
|
1,592.4
|
|
$
|
1,363.8
|
|
$
|
228.6
|
|
16.8
|
%
|
|
2018
|
2017
|
$ Change
|
Change
|
|||||||
Corporate expenses
|
$
|
62.0
|
|
$
|
49.1
|
|
$
|
12.9
|
|
26.3
|
%
|
Corporate expenses % to net sales
|
1.7
|
%
|
1.6
|
%
|
—
|
|
10
|
bps
|
|
December 31,
|
|
|
||||||||
|
2019
|
2018
|
$ Change
|
% Change
|
|||||||
Cash and cash equivalents
|
$
|
209.5
|
|
$
|
132.5
|
|
$
|
77.0
|
|
58.1
|
%
|
Restricted cash
|
6.7
|
|
0.6
|
|
6.1
|
|
NM
|
|
|||
Accounts receivable, net
|
545.1
|
|
546.6
|
|
(1.5
|
)
|
(0.3
|
%)
|
|||
Unbilled receivables
|
129.2
|
|
$
|
116.6
|
|
12.6
|
|
10.8
|
%
|
||
Inventories, net
|
842.0
|
|
835.7
|
|
6.3
|
|
0.8
|
%
|
|||
Deferred charges and prepaid expenses
|
36.7
|
|
28.2
|
|
8.5
|
|
30.1
|
%
|
|||
Other current assets
|
105.4
|
|
77.0
|
|
28.4
|
|
36.9
|
%
|
|||
Total current assets
|
$
|
1,874.6
|
|
$
|
1,737.2
|
|
$
|
137.4
|
|
7.9
|
%
|
|
December 31,
|
|
|
||||||||
|
2019
|
2018
|
$ Change
|
% Change
|
|||||||
Property, plant and equipment, net
|
$
|
989.2
|
|
$
|
912.1
|
|
$
|
77.1
|
|
8.5
|
%
|
|
December 31,
2019 |
December 31,
2018 |
$ Change
|
% Change
|
||||||
Operating lease assets
|
$
|
114.1
|
|
$
|
—
|
|
$
|
114.1
|
|
NM
|
|
December 31,
|
|
|
||||||||
|
2019
|
2018
|
$ Change
|
% Change
|
|||||||
Goodwill
|
$
|
993.7
|
|
$
|
960.5
|
|
$
|
33.2
|
|
3.5
|
%
|
Other intangible assets
|
758.5
|
|
733.2
|
|
25.3
|
|
3.5
|
%
|
|||
Non-current pension assets
|
3.4
|
|
6.2
|
|
(2.8
|
)
|
(45.2
|
%)
|
|||
Non-current other postretirement benefit assets
|
36.6
|
|
—
|
|
36.6
|
|
NM
|
|
|||
Deferred income taxes
|
71.8
|
|
59.0
|
|
12.8
|
|
21.7
|
%
|
|||
Other non-current assets
|
18.0
|
|
37.0
|
|
(19.0
|
)
|
(51.4
|
%)
|
|||
Total other assets
|
$
|
1,882.0
|
|
$
|
1,795.9
|
|
$
|
86.1
|
|
4.8
|
%
|
|
December 31,
|
|
|
||||||||
|
2019
|
2018
|
$ Change
|
% Change
|
|||||||
Short-term debt
|
$
|
17.3
|
|
$
|
33.6
|
|
$
|
(16.3
|
)
|
(48.5
|
%)
|
Current portion of long-term debt
|
64.7
|
|
9.4
|
|
55.3
|
|
NM
|
|
|||
Accounts payable
|
301.7
|
|
273.2
|
|
28.5
|
|
10.4
|
%
|
|||
Salaries, wages and benefits
|
134.5
|
|
174.9
|
|
(40.4
|
)
|
(23.1
|
%)
|
|||
Income taxes payable
|
17.8
|
|
23.5
|
|
(5.7
|
)
|
(24.3
|
%)
|
|||
Other current liabilities
|
172.3
|
|
171.0
|
|
1.3
|
|
0.8
|
%
|
|||
Total current liabilities
|
$
|
708.3
|
|
$
|
685.6
|
|
$
|
22.7
|
|
3.3
|
%
|
|
December 31,
|
|
|
||||||||
|
2019
|
2018
|
$ Change
|
% Change
|
|||||||
Long-term debt
|
$
|
1,648.1
|
|
$
|
1,638.6
|
|
$
|
9.5
|
|
0.6
|
%
|
Accrued pension benefits
|
165.1
|
|
161.3
|
|
3.8
|
|
2.4
|
%
|
|||
Accrued postretirement benefits
|
31.8
|
|
108.7
|
|
(76.9
|
)
|
(70.7
|
%)
|
|||
Long-term operating lease liabilities
|
71.3
|
|
—
|
|
71.3
|
|
NM
|
|
|||
Deferred income taxes
|
168.2
|
|
138.0
|
|
30.2
|
|
21.9
|
%
|
|||
Other non-current liabilities
|
84.0
|
|
70.3
|
|
13.7
|
|
19.5
|
%
|
|||
Total non-current liabilities
|
$
|
2,168.5
|
|
$
|
2,116.9
|
|
$
|
51.6
|
|
2.4
|
%
|
|
December 31,
|
|
|
||||||||
|
2019
|
2018
|
$ Change
|
% Change
|
|||||||
Common stock
|
$
|
990.7
|
|
$
|
1,005.0
|
|
$
|
(14.3
|
)
|
(1.4
|
%)
|
Earnings invested in the business
|
1,907.4
|
|
1,630.2
|
|
277.2
|
|
17.0
|
%
|
|||
Accumulated other comprehensive loss
|
(50.1
|
)
|
(95.3
|
)
|
45.2
|
|
(47.4
|
%)
|
|||
Treasury shares
|
(979.8
|
)
|
(960.3
|
)
|
(19.5
|
)
|
(2.0
|
%)
|
|||
Noncontrolling interest
|
86.6
|
|
63.1
|
|
23.5
|
|
37.2
|
%
|
|||
Total equity
|
$
|
1,954.8
|
|
$
|
1,642.7
|
|
$
|
312.1
|
|
19.0
|
%
|
|
2019
|
2018
|
$ Change
|
||||||
Net cash provided by operating activities
|
$
|
550.1
|
|
$
|
332.5
|
|
$
|
217.6
|
|
Net cash used in investing activities
|
(364.9
|
)
|
(865.2
|
)
|
500.3
|
|
|||
Net cash (used) provided by financing activities
|
(100.7
|
)
|
553.1
|
|
(653.8
|
)
|
|||
Effect of exchange rate changes on cash
|
(1.4
|
)
|
(12.7
|
)
|
11.3
|
|
|||
Increase (decrease) in cash and cash equivalents
|
$
|
83.1
|
|
$
|
7.7
|
|
$
|
75.4
|
|
|
2019
|
2018
|
$ Change
|
||||||
Cash (used) provided:
|
|
|
|
||||||
Accounts receivable
|
$
|
24.1
|
|
$
|
(66.4
|
)
|
$
|
90.5
|
|
Unbilled receivables
|
(12.6
|
)
|
(21.8
|
)
|
9.2
|
|
|||
Inventories
|
50.7
|
|
(87.1
|
)
|
137.8
|
|
|||
Trade accounts payable
|
19.9
|
|
(20.2
|
)
|
40.1
|
|
|||
Other accrued expenses
|
(26.8
|
)
|
32.2
|
|
(59.0
|
)
|
|||
Cash used in working capital items
|
$
|
55.3
|
|
$
|
(163.3
|
)
|
$
|
218.6
|
|
|
2019
|
2018
|
$ Change
|
||||||
Accrued income tax expense
|
$
|
97.7
|
|
$
|
102.6
|
|
$
|
(4.9
|
)
|
Income tax payments
|
(118.6
|
)
|
(121.3
|
)
|
2.7
|
|
|||
Other miscellaneous
|
(2.2
|
)
|
(0.8
|
)
|
(1.4
|
)
|
|||
Change in income taxes
|
$
|
(23.1
|
)
|
$
|
(19.5
|
)
|
$
|
(3.6
|
)
|
|
December 31,
|
|||||
|
2019
|
2018
|
||||
Short-term debt
|
$
|
17.3
|
|
$
|
33.6
|
|
Current portion of long-term debt
|
64.7
|
|
9.4
|
|
||
Long-term debt
|
1,648.1
|
|
1,638.6
|
|
||
Total debt
|
$
|
1,730.1
|
|
$
|
1,681.6
|
|
Less: Cash and cash equivalents
|
209.5
|
|
132.5
|
|
||
Net debt
|
$
|
1,520.6
|
|
$
|
1,549.1
|
|
|
December 31,
|
|||||
|
2019
|
2018
|
||||
Net debt
|
$
|
1,520.6
|
|
$
|
1,549.1
|
|
Total equity
|
1,954.8
|
|
1,642.7
|
|
||
Capital (net debt + total equity)
|
$
|
3,475.4
|
|
$
|
3,191.8
|
|
Ratio of net debt to capital
|
43.8
|
%
|
48.5
|
%
|
Contractual Obligations
|
Total
|
Less than
1 Year
|
1-3 Years
|
3-5 Years
|
More than
5 Years
|
||||||||||
Interest payments
|
$
|
380.6
|
|
$
|
61.8
|
|
$
|
117.9
|
|
$
|
94.0
|
|
$
|
106.9
|
|
Long-term debt, including current portion
|
1,712.8
|
|
64.7
|
|
120.8
|
|
797.3
|
|
730.0
|
|
|||||
Short-term debt
|
17.3
|
|
17.3
|
|
—
|
|
—
|
|
—
|
|
|||||
Purchase commitments
|
50.5
|
|
44.6
|
|
4.9
|
|
1.0
|
|
—
|
|
|||||
Operating leases
|
110.4
|
|
31.7
|
|
39.1
|
|
19.6
|
|
20.0
|
|
|||||
Retirement benefits
|
165.8
|
|
14.4
|
|
38.7
|
|
27.2
|
|
85.5
|
|
|||||
Total
|
$
|
2,437.4
|
|
$
|
234.5
|
|
$
|
321.4
|
|
$
|
939.1
|
|
$
|
942.4
|
|
|
|
|
|
+ / - Change at December 31, 2019
|
|
Change to
|
||||
|
|
Change
|
|
PBO
|
|
2019 Expense
|
||||
Assumption:
|
|
|
|
|
|
|
||||
Discount rate
|
|
+ 0.25%
|
|
$
|
20.2
|
|
|
$
|
20.2
|
|
Overall return on plan assets
|
|
+ 0.25%
|
|
N/A
|
|
|
1.1
|
|
|
|
|
|
+ / - Change at December 31, 2019
|
|
Change to
|
||||
|
|
Change
|
|
APBO
|
|
2019 Expense
|
||||
Assumption:
|
|
|
|
|
|
|
||||
Discount rate
|
|
+ 0.25%
|
|
$
|
1.3
|
|
|
$
|
1.3
|
|
Overall return on plan assets
|
|
+ 0.25%
|
|
N/A
|
|
|
0.2
|
|
(a)
|
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, pandemics 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;
|
(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 or supplier bankruptcies or liquidations, the impact of changes in industrial business cycles, the effects of distributor inventory corrections reflecting de-stocking of the supply chain and whether conditions of fair trade continue in our 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 or services by existing and new competitors, and new technology that may impact the way the Company’s products are produced, 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 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 or natural disasters; 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; and the ability of acquired companies to achieve satisfactory operating results, including results being accretive to earnings;
|
(f)
|
the Company’s ability to maintain appropriate relations with unions or works councils that represent Company employees in certain locations in order to avoid disruptions of business and to maintain the continued service of our management and other key employees;
|
(g)
|
unanticipated litigation, claims or assessments. This includes: claims, investigations or problems related to intellectual property, product liability or warranty, foreign export and trade laws, competition and anti-bribery laws, environmental or health and safety issues, data privacy and taxes;
|
(h)
|
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;
|
(i)
|
the Company's ability to satisfy its obligations under its debt agreements and maintain favorable credit ratings, as well as its ability to renew or refinance borrowings on favorable terms;
|
(j)
|
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
|
(k)
|
those items identified under Item 1A. Risk Factors on pages 6 through 11.
|
Consolidated Statements of Income
|
|||||||||
|
Year Ended December 31,
|
||||||||
|
2019
|
2018
|
2017
|
||||||
(Dollars in millions, except per share data)
|
|
|
|
||||||
Net sales
|
$
|
3,789.9
|
|
$
|
3,580.8
|
|
$
|
3,003.8
|
|
Cost of products sold
|
2,648.1
|
|
2,540.7
|
|
2,191.7
|
|
|||
Gross Profit
|
1,141.8
|
|
1,040.1
|
|
812.1
|
|
|||
Selling, general and administrative expenses
|
618.6
|
|
580.7
|
|
508.3
|
|
|||
Impairment and restructuring charges
|
6.8
|
|
4.9
|
|
4.3
|
|
|||
Operating Income
|
516.4
|
|
454.5
|
|
299.5
|
|
|||
Interest expense
|
(72.1
|
)
|
(51.7
|
)
|
(37.1
|
)
|
|||
Interest income
|
4.9
|
|
2.1
|
|
2.9
|
|
|||
Non-service pension and other postretirement income (expense)
|
10.2
|
|
(6.2
|
)
|
(15.0
|
)
|
|||
Other income, net
|
13.0
|
|
9.4
|
|
9.6
|
|
|||
Income Before Income Taxes
|
472.4
|
|
408.1
|
|
259.9
|
|
|||
Provision for income taxes
|
97.7
|
|
102.6
|
|
57.6
|
|
|||
Net Income
|
374.7
|
|
305.5
|
|
202.3
|
|
|||
Less: Net income (loss) attributable to noncontrolling interest
|
12.6
|
|
2.7
|
|
(1.1
|
)
|
|||
Net Income Attributable to The Timken Company
|
$
|
362.1
|
|
$
|
302.8
|
|
$
|
203.4
|
|
|
|
|
|
||||||
Net Income per Common Share Attributable to The Timken Company
Common Shareholders
|
|
|
|
||||||
Basic earnings per share
|
$
|
4.78
|
|
$
|
3.93
|
|
$
|
2.62
|
|
|
|
|
|
||||||
Diluted earnings per share
|
$
|
4.71
|
|
$
|
3.86
|
|
$
|
2.58
|
|
Consolidated Statements of Comprehensive Income
|
|||||||||
|
Year Ended December 31,
|
||||||||
|
2019
|
2018
|
2017
|
||||||
(Dollars in millions)
|
|
|
|
||||||
Net Income
|
$
|
374.7
|
|
$
|
305.5
|
|
$
|
202.3
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
||||||
Foreign currency translation adjustments
|
(19.9
|
)
|
(67.4
|
)
|
47.1
|
|
|||
Pension and postretirement liability adjustments
|
66.9
|
|
0.4
|
|
(1.8
|
)
|
|||
Change in fair value of derivative financial instruments
|
(2.0
|
)
|
3.8
|
|
(3.3
|
)
|
|||
Other comprehensive income (loss), net of tax
|
45.0
|
|
(63.2
|
)
|
42.0
|
|
|||
Comprehensive Income, net of tax
|
419.7
|
|
242.3
|
|
244.3
|
|
|||
Less: comprehensive income (loss) attributable to noncontrolling interest
|
12.4
|
|
(4.2
|
)
|
1.3
|
|
|||
Comprehensive Income Attributable to The Timken Company
|
$
|
407.3
|
|
$
|
246.5
|
|
$
|
243.0
|
|
Consolidated Balance Sheets
|
||||||
|
December 31,
|
|||||
|
2019
|
2018
|
||||
(Dollars in millions)
|
|
|
||||
ASSETS
|
|
|
||||
Current Assets
|
|
|
||||
Cash and cash equivalents
|
$
|
209.5
|
|
$
|
132.5
|
|
Restricted cash
|
6.7
|
|
0.6
|
|
||
Accounts receivable, less allowances: (2019 - $18.1 million; 2018 - $21.9 million)
|
545.1
|
|
546.6
|
|
||
Unbilled receivables
|
129.2
|
|
116.6
|
|
||
Inventories, net
|
842.0
|
|
835.7
|
|
||
Deferred charges and prepaid expenses
|
36.7
|
|
28.2
|
|
||
Other current assets
|
105.4
|
|
77.0
|
|
||
Total Current Assets
|
1,874.6
|
|
1,737.2
|
|
||
Property, Plant and Equipment, Net
|
989.2
|
|
912.1
|
|
||
Operating Lease Assets
|
114.1
|
|
—
|
|
||
Other Assets
|
|
|
||||
Goodwill
|
993.7
|
|
960.5
|
|
||
Other intangible assets
|
758.5
|
|
733.2
|
|
||
Non-current pension assets
|
3.4
|
|
6.2
|
|
||
Non-current other postretirement benefit assets
|
36.6
|
|
—
|
|
||
Deferred income taxes
|
71.8
|
|
59.0
|
|
||
Other non-current assets
|
18.0
|
|
37.0
|
|
||
Total Other Assets
|
1,882.0
|
|
1,795.9
|
|
||
Total Assets
|
$
|
4,859.9
|
|
$
|
4,445.2
|
|
LIABILITIES AND EQUITY
|
|
|
||||
Current Liabilities
|
|
|
||||
Short-term debt
|
$
|
17.3
|
|
$
|
33.6
|
|
Current portion of long-term debt
|
64.7
|
|
9.4
|
|
||
Short-term operating lease liabilities
|
28.3
|
|
—
|
|
||
Accounts payable, trade
|
301.7
|
|
273.2
|
|
||
Salaries, wages and benefits
|
134.5
|
|
174.9
|
|
||
Income taxes payable
|
17.8
|
|
23.5
|
|
||
Other current liabilities
|
172.3
|
|
171.0
|
|
||
Total Current Liabilities
|
736.6
|
|
685.6
|
|
||
Non-Current Liabilities
|
|
|
||||
Long-term debt
|
1,648.1
|
|
1,638.6
|
|
||
Accrued pension benefits
|
165.1
|
|
161.3
|
|
||
Accrued postretirement benefits
|
31.8
|
|
108.7
|
|
||
Long-term operating lease liabilities
|
71.3
|
|
—
|
|
||
Deferred income taxes
|
168.2
|
|
138.0
|
|
||
Other non-current liabilities
|
84.0
|
|
70.3
|
|
||
Total Non-Current Liabilities
|
2,168.5
|
|
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 stock 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
|
937.6
|
|
951.9
|
|
||
Earnings invested in the business
|
1,907.4
|
|
1,630.2
|
|
||
Accumulated other comprehensive loss
|
(50.1
|
)
|
(95.3
|
)
|
||
Treasury shares at cost (2019 – 22,836,180 shares; 2018 – 22,421,213 shares)
|
(979.8
|
)
|
(960.3
|
)
|
||
Total Shareholders’ Equity
|
1,868.2
|
|
1,579.6
|
|
||
Noncontrolling interest
|
86.6
|
|
63.1
|
|
||
Total Equity
|
1,954.8
|
|
1,642.7
|
|
||
Total Liabilities and Equity
|
$
|
4,859.9
|
|
$
|
4,445.2
|
|
Consolidated Statements of Cash Flows
|
|||||||||
|
Year Ended December 31,
|
||||||||
|
2019
|
2018
|
2017
|
||||||
(Dollars in millions)
|
|
|
|
||||||
CASH PROVIDED (USED)
|
|
|
|
||||||
Operating Activities
|
|
|
|
||||||
Net income
|
$
|
374.7
|
|
$
|
305.5
|
|
$
|
202.3
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||||
Depreciation and amortization
|
160.6
|
|
146.0
|
|
137.7
|
|
|||
Impairment charges
|
2.6
|
|
1.3
|
|
0.1
|
|
|||
Loss (gain) on sale of assets
|
(3.6
|
)
|
0.3
|
|
(2.1
|
)
|
|||
Gain on disposal of lease assets
|
(0.4
|
)
|
—
|
|
—
|
|
|||
Loss on divestitures
|
—
|
|
0.8
|
|
—
|
|
|||
Deferred income tax benefit
|
(8.9
|
)
|
(21.4
|
)
|
(0.4
|
)
|
|||
Stock-based compensation expense
|
27.1
|
|
32.3
|
|
24.7
|
|
|||
Pension and other postretirement expense
|
2.2
|
|
20.7
|
|
28.9
|
|
|||
Pension and other postretirement benefit contributions and payments
|
(43.4
|
)
|
(18.7
|
)
|
(23.9
|
)
|
|||
Operating lease expense
|
36.6
|
|
—
|
|
—
|
|
|||
Operating lease payments
|
(35.6
|
)
|
—
|
|
—
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
||||||
Accounts receivable
|
24.1
|
|
(66.4
|
)
|
(42.3
|
)
|
|||
Unbilled receivables
|
(12.6
|
)
|
(21.8
|
)
|
—
|
|
|||
Inventories
|
50.7
|
|
(87.1
|
)
|
(132.1
|
)
|
|||
Accounts payable, trade
|
19.9
|
|
(20.2
|
)
|
70.7
|
|
|||
Other accrued expenses
|
(26.8
|
)
|
32.2
|
|
36.3
|
|
|||
Income taxes
|
(14.2
|
)
|
1.9
|
|
(36.2
|
)
|
|||
Other, net
|
(2.9
|
)
|
27.1
|
|
(26.9
|
)
|
|||
Net Cash Provided by Operating Activities
|
550.1
|
|
332.5
|
|
236.8
|
|
|||
|
|
|
|
||||||
Investing Activities
|
|
|
|
||||||
Capital expenditures
|
(140.6
|
)
|
(112.6
|
)
|
(104.7
|
)
|
|||
Acquisitions, net of cash acquired of $5.9 million in 2019, $30.1 million in 2018
and $35.4 million in 2017
|
(226.5
|
)
|
(765.4
|
)
|
(346.8
|
)
|
|||
Proceeds from disposals of property, plant and equipment
|
6.3
|
|
1.5
|
|
7.1
|
|
|||
Proceeds from divestitures
|
—
|
|
14.0
|
|
—
|
|
|||
Investments in short-term marketable securities, net
|
(4.2
|
)
|
(2.8
|
)
|
(3.6
|
)
|
|||
Other
|
0.1
|
|
0.1
|
|
(0.7
|
)
|
|||
Net Cash Used in Investing Activities
|
(364.9
|
)
|
(865.2
|
)
|
(448.7
|
)
|
|||
|
|
|
|
||||||
Financing Activities
|
|
|
|
||||||
Cash dividends paid to shareholders
|
(84.9
|
)
|
(85.7
|
)
|
(83.3
|
)
|
|||
Purchase of treasury shares
|
(62.7
|
)
|
(98.5
|
)
|
(43.4
|
)
|
|||
Proceeds from exercise of stock options
|
27.5
|
|
12.8
|
|
32.9
|
|
|||
Payments related to tax withholding for stock-based compensation
|
(15.4
|
)
|
(5.4
|
)
|
(11.4
|
)
|
|||
Proceeds from long-term debt
|
662.8
|
|
1,391.1
|
|
927.8
|
|
|||
Payments on long-term debt
|
(633.8
|
)
|
(663.8
|
)
|
(684.5
|
)
|
|||
Deferred financing costs
|
(1.9
|
)
|
(1.2
|
)
|
(1.2
|
)
|
|||
Accounts receivable facility financing borrowings
|
25.0
|
|
152.0
|
|
56.7
|
|
|||
Accounts receivable facility financing payments
|
—
|
|
(139.9
|
)
|
(42.7
|
)
|
|||
Short-term debt activity, net
|
(17.0
|
)
|
(6.7
|
)
|
19.9
|
|
|||
Other
|
(0.3
|
)
|
(1.6
|
)
|
(2.6
|
)
|
|||
Net Cash (Used in) Provided by Financing Activities
|
(100.7
|
)
|
553.1
|
|
168.2
|
|
|||
Effect of exchange rate changes on cash
|
(1.4
|
)
|
(12.7
|
)
|
17.6
|
|
|||
Increase (decrease) In Cash, Cash Equivalents and Restricted Cash
|
83.1
|
|
7.7
|
|
(26.1
|
)
|
|||
Cash, cash equivalents and restricted cash at beginning of year
|
133.1
|
|
125.4
|
|
151.5
|
|
|||
Cash, Cash Equivalents and Restricted Cash at End of Year
|
$
|
216.2
|
|
$
|
133.1
|
|
$
|
125.4
|
|
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
Shares
|
Non-
controlling
Interest
|
||||||||||||||
(Dollars in millions, except per share data)
|
|
|
|
|
|
|
|
||||||||||||||
Year Ended December 31, 2017
|
|
|
|
|
|
|
|
||||||||||||||
Balance at January 1, 2017
|
$
|
1,310.9
|
|
$
|
53.1
|
|
$
|
906.9
|
|
$
|
1,289.3
|
|
$
|
(77.9
|
)
|
$
|
(891.7
|
)
|
$
|
31.2
|
|
Cumulative effect of ASU 2016-09
|
0.5
|
|
|
1.5
|
|
(1.0
|
)
|
|
|
|
|||||||||||
Net income (loss)
|
202.3
|
|
|
|
203.4
|
|
|
|
(1.1
|
)
|
|||||||||||
Foreign currency translation adjustments
|
47.1
|
|
|
|
|
44.7
|
|
|
2.4
|
|
|||||||||||
Pension and other postretirement liability adjustments
(net of income tax benefit of $1.1 million) |
(1.8
|
)
|
|
|
|
(1.8
|
)
|
|
|
||||||||||||
Change in fair value of derivative financial
instruments, net of reclassifications
|
(3.3
|
)
|
|
|
|
(3.3
|
)
|
|
|
||||||||||||
Dividends declared to noncontrolling interest
|
(0.3
|
)
|
|
|
|
|
|
(0.3
|
)
|
||||||||||||
Dividends – $1.07 per share
|
(83.3
|
)
|
|
|
(83.3
|
)
|
|
|
|
||||||||||||
Stock-based compensation expense
|
24.7
|
|
|
24.7
|
|
|
|
|
|
||||||||||||
Purchase of treasury shares
|
(43.4
|
)
|
|
|
|
|
(43.4
|
)
|
|
||||||||||||
Stock option exercise activity
|
32.9
|
|
|
(10.7
|
)
|
|
|
43.6
|
|
|
|||||||||||
Restricted share activity
|
—
|
|
|
(18.6
|
)
|
|
|
18.6
|
|
|
|||||||||||
Payments related to tax withholding for stock-based
compensation
|
(11.4
|
)
|
|
|
|
|
(11.4
|
)
|
|
||||||||||||
Balance at December 31, 2017
|
$
|
1,474.9
|
|
$
|
53.1
|
|
$
|
903.8
|
|
$
|
1,408.4
|
|
$
|
(38.3
|
)
|
$
|
(884.3
|
)
|
$
|
32.2
|
|
Year Ended December 31, 2018
|
|
|
|
|
|
|
|
||||||||||||||
Cumulative effect of the revenue standard
(net of income tax benefit of $1.5 million) |
4.0
|
|
|
|
4.0
|
|
|
|
|
||||||||||||
Cumulative effect of ASU 2018-02
|
—
|
|
|
|
0.7
|
|
(0.7
|
)
|
|
|
|||||||||||
Net income
|
305.5
|
|
|
|
302.8
|
|
|
|
2.7
|
|
|||||||||||
Foreign currency translation adjustments
|
(67.4
|
)
|
|
|
|
(60.5
|
)
|
|
(6.9
|
)
|
|||||||||||
Pension and other postretirement liability adjustments
(net of $0.5 income tax expense) |
0.4
|
|
|
|
|
0.4
|
|
|
|
||||||||||||
Change in fair value of derivative financial
instruments, net of reclassifications
|
3.8
|
|
|
|
|
3.8
|
|
|
|
||||||||||||
Shares issued for the acquisition of ABC Bearings
|
66.0
|
|
|
30.9
|
|
|
|
|
35.1
|
|
|||||||||||
Dividends – $1.11 per share
|
(85.7
|
)
|
|
|
(85.7
|
)
|
|
|
|
||||||||||||
Stock-based compensation expense
|
32.3
|
|
|
32.3
|
|
|
|
|
|
||||||||||||
Purchase of treasury shares
|
(98.5
|
)
|
|
|
|
|
(98.5
|
)
|
|
||||||||||||
Stock option exercise activity
|
12.8
|
|
|
(3.8
|
)
|
|
|
16.6
|
|
|
|||||||||||
Restricted share activity
|
—
|
|
|
(11.3
|
)
|
|
|
11.3
|
|
|
|||||||||||
Payments related to tax withholding for stock-based
compensation
|
(5.4
|
)
|
|
|
|
|
(5.4
|
)
|
|
||||||||||||
Balance at December 31, 2018
|
$
|
1,642.7
|
|
$
|
53.1
|
|
$
|
951.9
|
|
$
|
1,630.2
|
|
$
|
(95.3
|
)
|
$
|
(960.3
|
)
|
$
|
63.1
|
|
Year Ended December 31, 2019
|
|
|
|
|
|
|
|
||||||||||||||
Net income
|
374.7
|
|
|
|
362.1
|
|
|
|
12.6
|
|
|||||||||||
Foreign currency translation adjustments
|
(19.9
|
)
|
|
|
|
(19.7
|
)
|
|
(0.2
|
)
|
|||||||||||
Pension and other postretirement liability adjustments
(net of $22.2 income tax expense) |
66.9
|
|
|
|
|
66.9
|
|
|
|
||||||||||||
Change in fair value of derivative financial
instruments, net of reclassifications
|
(2.0
|
)
|
|
|
|
(2.0
|
)
|
|
|
||||||||||||
Change in ownership of noncontrolling interest
|
(0.5
|
)
|
|
(10.3
|
)
|
|
|
|
9.8
|
|
|||||||||||
Noncontrolling interest acquired
|
1.8
|
|
|
|
|
|
|
1.8
|
|
||||||||||||
Dividends declared to noncontrolling interest
|
(0.5
|
)
|
|
|
|
|
|
(0.5
|
)
|
||||||||||||
Dividends – $1.12 per share
|
(84.9
|
)
|
|
|
(84.9
|
)
|
|
|
|
||||||||||||
Stock-based compensation expense
|
27.1
|
|
|
27.1
|
|
|
|
|
|
||||||||||||
Purchase of treasury shares
|
(62.7
|
)
|
|
|
|
|
(62.7
|
)
|
|
||||||||||||
Stock option exercise activity
|
27.5
|
|
|
(7.8
|
)
|
|
|
35.3
|
|
|
|||||||||||
Restricted share activity
|
—
|
|
|
(23.3
|
)
|
|
|
23.3
|
|
|
|||||||||||
Payments related to tax withholding for stock-based
compensation
|
(15.4
|
)
|
|
|
|
|
(15.4
|
)
|
|
||||||||||||
Balance at December 31, 2019
|
$
|
1,954.8
|
|
$
|
53.1
|
|
$
|
937.6
|
|
$
|
1,907.4
|
|
$
|
(50.1
|
)
|
$
|
(979.8
|
)
|
$
|
86.6
|
|
•
|
For certain service contracts, this continuous transfer of control to the customer occurs as the Company's service enhances assets that the customer owns and controls at all times and the Company is contractually entitled to payment for work performed to date plus a reasonable margin.
|
•
|
For U.S. government contracts, the customer is allowed to unilaterally terminate the contract for convenience, and is required to pay the Company for costs incurred plus a reasonable margin and can take control of any work in process.
|
•
|
For certain non-U.S. government contracts involving customer-specific products, the customer controls the work in process based on contractual termination clauses or restrictions on the Company's use of the product and the Company possesses a right to payment for work performed to date plus a reasonable margin.
|
|
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
|
|
|
2019
|
2018
|
||||
Assets:
|
|
|
||||
Accounts receivable
|
$
|
26.3
|
|
$
|
42.5
|
|
Inventories
|
62.9
|
|
61.6
|
|
||
Other current assets
|
4.9
|
|
8.5
|
|
||
Property, plant and equipment
|
57.4
|
|
71.7
|
|
||
Operating lease assets
|
4.7
|
|
—
|
|
||
Goodwill
|
44.2
|
|
468.2
|
|
||
Other intangible assets
|
84.4
|
|
372.6
|
|
||
Other non-current assets
|
0.7
|
|
20.2
|
|
||
Total assets acquired
|
$
|
285.5
|
|
$
|
1,045.3
|
|
Liabilities:
|
|
|
||||
Accounts payable, trade
|
$
|
10.8
|
|
$
|
35.2
|
|
Salaries, wages and benefits
|
6.8
|
|
9.1
|
|
||
Income taxes payable
|
2.1
|
|
2.5
|
|
||
Other current liabilities
|
6.7
|
|
8.2
|
|
||
Short-term debt
|
0.8
|
|
2.5
|
|
||
Long-term debt
|
17.2
|
|
3.0
|
|
||
Accrued pension cost
|
0.5
|
|
5.7
|
|
||
Accrued postretirement liability
|
0.1
|
|
11.7
|
|
||
Long-term operating lease liabilities
|
4.1
|
|
—
|
|
||
Deferred taxes
|
5.1
|
|
116.2
|
|
||
Other non-current liabilities
|
1.1
|
|
16.9
|
|
||
Total liabilities assumed
|
$
|
55.3
|
|
$
|
211.0
|
|
Noncontrolling interest acquired
|
1.8
|
|
—
|
|
||
Net assets acquired
|
$
|
228.4
|
|
$
|
834.3
|
|
Cash flow reconciling items:
|
|
|
||||
Indemnification payment (accrual)
|
$
|
2.9
|
|
$
|
(2.9
|
)
|
Working capital purchase price adjustment
|
(4.8
|
)
|
—
|
|
||
Shares issued for the acquisition of ABC Bearings
|
—
|
|
(66.0
|
)
|
||
Cash paid for acquisitions, net of cash acquired
|
$
|
226.5
|
|
$
|
765.4
|
|
|
2019
|
2018
|
||||||
|
|
Weighted-
Average Life
|
|
Weighted-
Average Life
|
||||
Trade names (indefinite life)
|
$
|
28.2
|
|
Indefinite
|
$
|
45.3
|
|
Indefinite
|
Trade names (finite life)
|
—
|
|
|
4.4
|
|
10 years
|
||
Technology and know-how
|
22.4
|
|
17 years
|
122.3
|
|
17 years
|
||
Customer relationships
|
33.3
|
|
19 years
|
201.5
|
|
18 years
|
||
Other
|
—
|
|
|
0.2
|
|
6 years
|
||
Capitalized software
|
0.5
|
|
2 years
|
1.7
|
|
5 years
|
||
Total intangible assets
|
$
|
84.4
|
|
|
$
|
375.4
|
|
|
|
December 31, 2019
|
||||||||
|
Mobile
|
Process
|
Total
|
||||||
United States
|
$
|
1,007.1
|
|
$
|
821.0
|
|
$
|
1,828.1
|
|
Americas excluding United States
|
209.6
|
|
167.7
|
|
377.3
|
|
|||
Europe / Middle East / Africa
|
390.8
|
|
489.2
|
|
880.0
|
|
|||
Asia-Pacific
|
286.4
|
|
418.1
|
|
704.5
|
|
|||
Net sales
|
$
|
1,893.9
|
|
$
|
1,896.0
|
|
$
|
3,789.9
|
|
|
|
|
|
||||||
|
December 31, 2018
|
||||||||
|
Mobile
|
Process
|
Total
|
||||||
United States
|
$
|
1,028.8
|
|
$
|
769.5
|
|
$
|
1,798.3
|
|
Americas excluding United States
|
208.9
|
|
176.7
|
|
385.6
|
|
|||
Europe / Middle East / Africa
|
382.5
|
|
380.2
|
|
762.7
|
|
|||
Asia-Pacific
|
283.5
|
|
350.7
|
|
634.2
|
|
|||
Net sales
|
$
|
1,903.7
|
|
$
|
1,677.1
|
|
$
|
3,580.8
|
|
|
|
|
|
||||||
|
December 31, 2017
|
||||||||
|
Mobile
|
Process
|
Total
|
||||||
United States
|
$
|
938.4
|
|
$
|
664.6
|
|
$
|
1,603.0
|
|
Americas excluding United States
|
182.5
|
|
150.7
|
|
333.2
|
|
|||
Europe / Middle East / Africa
|
305.0
|
|
265.3
|
|
570.3
|
|
|||
Asia-Pacific
|
214.1
|
|
283.2
|
|
497.3
|
|
|||
Net sales
|
$
|
1,640.0
|
|
$
|
1,363.8
|
|
$
|
3,003.8
|
|
Revenue by sales channel
|
December 31, 2019
|
December 31, 2018
|
Original equipment manufacturers
|
56%
|
56%
|
Distribution/end users
|
44%
|
44%
|
|
December 31,
2019 |
||
Beginning balance, January 1
|
$
|
116.6
|
|
Additional unbilled revenue recognized
|
444.0
|
|
|
Less: amounts billed to customers
|
(431.4
|
)
|
|
Ending balance
|
$
|
129.2
|
|
|
2019
|
2018
|
2017
|
||||||
Net sales to external customers:
|
|
|
|
||||||
Mobile Industries
|
$
|
1,893.9
|
|
$
|
1,903.7
|
|
$
|
1,640.0
|
|
Process Industries
|
1,896.0
|
|
1,677.1
|
|
1,363.8
|
|
|||
|
$
|
3,789.9
|
|
$
|
3,580.8
|
|
$
|
3,003.8
|
|
Segment EBITDA:
|
|
|
|
||||||
Mobile Industries
|
$
|
284.9
|
|
$
|
272.2
|
|
$
|
209.9
|
|
Process Industries
|
466.6
|
|
405.7
|
|
288.6
|
|
|||
Total EBITDA, for reportable segments
|
$
|
751.5
|
|
$
|
677.9
|
|
$
|
498.5
|
|
Corporate EBITDA
|
(55.4
|
)
|
(61.4
|
)
|
(48.6
|
)
|
|||
Corporate pension-related charges (1)
|
4.1
|
|
(12.8
|
)
|
(18.1
|
)
|
|||
Depreciation and amortization
|
(160.6
|
)
|
(146.0
|
)
|
(137.7
|
)
|
|||
Interest expense, net
|
(67.2
|
)
|
(49.6
|
)
|
(34.2
|
)
|
|||
Income before income taxes
|
$
|
472.4
|
|
$
|
408.1
|
|
$
|
259.9
|
|
|
2019
|
2018
|
2017
|
||||||
Capital expenditures:
|
|
|
|
||||||
Mobile Industries
|
$
|
74.2
|
|
$
|
48.3
|
|
$
|
57.3
|
|
Process Industries
|
65.3
|
|
63.3
|
|
46.2
|
|
|||
Corporate
|
1.1
|
|
1.0
|
|
1.2
|
|
|||
|
$
|
140.6
|
|
$
|
112.6
|
|
$
|
104.7
|
|
Depreciation and amortization:
|
|
|
|
||||||
Mobile Industries
|
$
|
73.6
|
|
$
|
73.5
|
|
$
|
70.9
|
|
Process Industries
|
86.2
|
|
71.9
|
|
66.3
|
|
|||
Corporate
|
0.8
|
|
0.6
|
|
0.5
|
|
|||
|
$
|
160.6
|
|
$
|
146.0
|
|
$
|
137.7
|
|
|
2019
|
2018
|
||||
Property, Plant and Equipment, net:
|
|
|
||||
United States
|
$
|
391.7
|
|
$
|
371.7
|
|
Americas excluding United States
|
28.1
|
|
13.7
|
|
||
Europe / Middle East / Africa
|
252.6
|
|
236.6
|
|
||
Asia-Pacific
|
316.8
|
|
290.1
|
|
||
|
$
|
989.2
|
|
$
|
912.1
|
|
|
2019
|
2018
|
2017
|
||||||
United States
|
$
|
190.7
|
|
$
|
202.0
|
|
$
|
107.4
|
|
Non-United States
|
281.7
|
|
206.1
|
|
152.5
|
|
|||
Income before income taxes
|
$
|
472.4
|
|
$
|
408.1
|
|
$
|
259.9
|
|
|
2019
|
2018
|
2017
|
||||||
Current:
|
|
|
|
||||||
Federal
|
$
|
20.8
|
|
$
|
46.1
|
|
$
|
9.1
|
|
State and local
|
4.8
|
|
9.9
|
|
4.6
|
|
|||
Foreign
|
81.0
|
|
68.0
|
|
44.3
|
|
|||
|
$
|
106.6
|
|
$
|
124.0
|
|
$
|
58.0
|
|
Deferred:
|
|
|
|
||||||
Federal
|
$
|
39.8
|
|
$
|
(19.9
|
)
|
$
|
13.6
|
|
State and local
|
6.5
|
|
(0.7
|
)
|
(4.6
|
)
|
|||
Foreign
|
(55.2
|
)
|
(0.8
|
)
|
(9.4
|
)
|
|||
|
$
|
(8.9
|
)
|
$
|
(21.4
|
)
|
$
|
(0.4
|
)
|
United States and foreign tax provision on income
|
$
|
97.7
|
|
$
|
102.6
|
|
$
|
57.6
|
|
|
2019
|
2018
|
2017
|
||||||
Income tax at the U.S. federal statutory rate
|
$
|
99.2
|
|
$
|
85.7
|
|
$
|
91.0
|
|
Adjustments:
|
|
|
|
||||||
State and local income taxes, net of federal tax benefit
|
7.4
|
|
6.8
|
|
3.1
|
|
|||
Tax on foreign remittances and U.S. tax on foreign income
|
26.4
|
|
21.1
|
|
93.0
|
|
|||
Tax expense related to undistributed earnings of foreign subsidiaries
|
6.0
|
|
—
|
|
—
|
|
|||
Foreign losses without current tax benefits
|
3.2
|
|
3.7
|
|
8.9
|
|
|||
Foreign earnings taxed at different rates including tax holidays
|
12.6
|
|
11.1
|
|
(18.0
|
)
|
|||
U.S. domestic manufacturing deduction
|
—
|
|
—
|
|
(3.9
|
)
|
|||
U.S. foreign tax credit
|
(18.3
|
)
|
(21.2
|
)
|
(104.2
|
)
|
|||
Accruals and settlements related to tax audits
|
11.1
|
|
(3.8
|
)
|
(34.4
|
)
|
|||
Valuation allowance changes
|
(44.5
|
)
|
—
|
|
(12.6
|
)
|
|||
Deferred taxes related to branch operations
|
5.3
|
|
—
|
|
—
|
|
|||
U.S. Tax Reform
|
—
|
|
(10.6
|
)
|
35.3
|
|
|||
Other tax rate change
|
(5.0
|
)
|
(2.4
|
)
|
—
|
|
|||
Other items, net
|
(5.7
|
)
|
12.2
|
|
(0.6
|
)
|
|||
Provision for income taxes
|
$
|
97.7
|
|
$
|
102.6
|
|
$
|
57.6
|
|
Effective income tax rate
|
20.7
|
%
|
25.1
|
%
|
22.2
|
%
|
|
2019
|
2018
|
||||
Deferred tax assets:
|
|
|
||||
Accrued postretirement benefits cost
|
$
|
0.1
|
|
$
|
28.9
|
|
Accrued pension cost
|
55.1
|
|
59.5
|
|
||
Other employee benefit accruals
|
10.9
|
|
16.8
|
|
||
Tax loss and credit carryforwards
|
86.0
|
|
86.1
|
|
||
Other, net
|
46.9
|
|
42.9
|
|
||
Valuation allowances
|
(33.7
|
)
|
(77.5
|
)
|
||
|
$
|
165.3
|
|
$
|
156.7
|
|
Deferred tax liabilities - principally depreciation and amortization
|
(261.6
|
)
|
(235.7
|
)
|
||
Net deferred tax (liabilities) assets
|
$
|
(96.3
|
)
|
$
|
(79.0
|
)
|
|
2019
|
2018
|
2017
|
||||||
Beginning balance, January 1
|
$
|
26.0
|
|
$
|
14.0
|
|
$
|
39.2
|
|
Tax positions related to the current year:
|
|
|
|
||||||
Additions
|
3.6
|
|
0.4
|
|
2.7
|
|
|||
Tax positions related to prior years:
|
|
|
|
||||||
Additions
|
11.7
|
|
17.8
|
|
6.9
|
|
|||
Reductions
|
(1.1
|
)
|
(2.9
|
)
|
(5.2
|
)
|
|||
Settlements with tax authorities
|
(1.2
|
)
|
(2.2
|
)
|
—
|
|
|||
Lapses in statutes of limitation
|
(0.1
|
)
|
(1.1
|
)
|
(29.6
|
)
|
|||
Ending balance, December 31
|
$
|
38.9
|
|
$
|
26.0
|
|
$
|
14.0
|
|
|
2019
|
2018
|
2017
|
||||||
Numerator:
|
|
|
|
||||||
Net income attributable to The Timken Company
|
$
|
362.1
|
|
$
|
302.8
|
|
$
|
203.4
|
|
Less: undistributed earnings allocated to nonvested stock
|
—
|
|
—
|
|
—
|
|
|||
Net income available to common shareholders for basic and diluted earnings per share
|
$
|
362.1
|
|
$
|
302.8
|
|
$
|
203.4
|
|
Denominator:
|
|
|
|
||||||
Weighted average number of shares outstanding - basic
|
75,758,123
|
|
77,119,602
|
|
77,736,398
|
|
|||
Effect of dilutive securities:
|
|
|
|
||||||
Stock options and awards - based on the treasury stock method
|
1,138,442
|
|
1,217,879
|
|
1,174,751
|
|
|||
Weighted average number of shares outstanding, assuming dilution of stock options and awards
|
76,896,565
|
|
78,337,481
|
|
78,911,149
|
|
|||
Basic earnings per share
|
$
|
4.78
|
|
$
|
3.93
|
|
$
|
2.62
|
|
Diluted earnings per share
|
$
|
4.71
|
|
$
|
3.86
|
|
$
|
2.58
|
|
|
2019
|
2018
|
||||
Manufacturing supplies
|
$
|
34.2
|
|
$
|
32.4
|
|
Raw materials
|
99.8
|
|
102.4
|
|
||
Work in process
|
307.2
|
|
287.7
|
|
||
Finished products
|
436.6
|
|
452.7
|
|
||
Subtotal
|
$
|
877.8
|
|
$
|
875.2
|
|
Allowance for surplus and obsolete inventory
|
(35.8
|
)
|
(39.5
|
)
|
||
Total Inventories, net
|
$
|
842.0
|
|
$
|
835.7
|
|
|
2019
|
2018
|
||||
Land and buildings
|
$
|
510.9
|
|
$
|
484.1
|
|
Machinery and equipment
|
2,093.3
|
|
2,002.4
|
|
||
Subtotal
|
$
|
2,604.2
|
|
$
|
2,486.5
|
|
Less: accumulated depreciation
|
(1,615.0
|
)
|
(1,574.4
|
)
|
||
Property, Plant and Equipment, net
|
$
|
989.2
|
|
$
|
912.1
|
|
|
Mobile Industries
|
Process
Industries
|
Total
|
||||||
Beginning Balance
|
$
|
349.7
|
|
$
|
610.8
|
|
$
|
960.5
|
|
Acquisitions
|
18.2
|
|
27.9
|
|
46.1
|
|
|||
Foreign currency translation adjustments and other changes
|
(6.6
|
)
|
(6.3
|
)
|
(12.9
|
)
|
|||
Ending Balance
|
$
|
361.3
|
|
$
|
632.4
|
|
$
|
993.7
|
|
|
Mobile Industries
|
Process
Industries
|
Total
|
||||||
Beginning Balance
|
$
|
254.3
|
|
$
|
257.5
|
|
$
|
511.8
|
|
Acquisitions
|
108.4
|
|
356.6
|
|
465.0
|
|
|||
Divestiture
|
(5.1
|
)
|
—
|
|
(5.1
|
)
|
|||
Foreign currency translation adjustments and other changes
|
(7.9
|
)
|
(3.3
|
)
|
(11.2
|
)
|
|||
Ending Balance
|
$
|
349.7
|
|
$
|
610.8
|
|
$
|
960.5
|
|
|
2019
|
2018
|
||||||||||||||||
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Net
Carrying
Amount
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Net
Carrying
Amount
|
||||||||||||
Intangible assets subject
to amortization: |
|
|
|
|
|
|
||||||||||||
Customer relationships
|
$
|
510.9
|
|
$
|
(128.8
|
)
|
$
|
382.1
|
|
$
|
481.5
|
|
$
|
(99.8
|
)
|
$
|
381.7
|
|
Technology and know-how
|
265.1
|
|
(54.7
|
)
|
210.4
|
|
245.0
|
|
(40.4
|
)
|
204.6
|
|
||||||
Trade names
|
12.7
|
|
(6.1
|
)
|
6.6
|
|
11.3
|
|
(4.8
|
)
|
6.5
|
|
||||||
Capitalized Software
|
270.3
|
|
(245.8
|
)
|
24.5
|
|
266.4
|
|
(236.5
|
)
|
29.9
|
|
||||||
Other
|
13.8
|
|
(9.1
|
)
|
4.7
|
|
40.8
|
|
(35.2
|
)
|
5.6
|
|
||||||
|
$
|
1,072.8
|
|
$
|
(444.5
|
)
|
$
|
628.3
|
|
$
|
1,045.0
|
|
$
|
(416.7
|
)
|
$
|
628.3
|
|
Intangible assets not
subject to amortization: |
|
|
|
|
|
|
||||||||||||
Trade names
|
$
|
121.5
|
|
|
|
$
|
121.5
|
|
$
|
96.2
|
|
|
|
$
|
96.2
|
|
||
FAA air agency certificates
|
8.7
|
|
|
|
8.7
|
|
8.7
|
|
|
|
8.7
|
|
||||||
|
$
|
130.2
|
|
|
$
|
130.2
|
|
$
|
104.9
|
|
|
$
|
104.9
|
|
||||
Total intangible assets
|
$
|
1,203.0
|
|
$
|
(444.5
|
)
|
$
|
758.5
|
|
$
|
1,149.9
|
|
$
|
(416.7
|
)
|
$
|
733.2
|
|
|
2019
|
||
Operating lease expense
|
$
|
36.6
|
|
Amortization of right-of-use assets on finance leases
|
1.2
|
|
|
Total lease expense
|
$
|
37.8
|
|
Operating Leases
|
December 31, 2019
|
||
Lease assets:
|
|
||
Operating lease assets
|
$
|
114.1
|
|
Lease liabilities:
|
|
||
Short-term operating lease liabilities
|
$
|
28.3
|
|
Long-term operating lease liabilities
|
71.3
|
|
|
Total operating lease liabilities
|
$
|
99.6
|
|
Finance Leases
|
December 31, 2019
|
||
Lease assets:
|
|
||
Property, plant and equipment, net
|
$
|
5.0
|
|
Lease liabilities:
|
|
||
Current portion of long-term debt
|
$
|
0.5
|
|
Long-term debt
|
2.9
|
|
|
Total finance lease liabilities
|
$
|
3.4
|
|
|
Operating Leases
|
Finance Leases
|
||||
Year Ending December 31,
|
|
|
||||
2020
|
$
|
31.7
|
|
$
|
1.1
|
|
2021
|
22.5
|
|
1.1
|
|
||
2022
|
16.6
|
|
1.0
|
|
||
2023
|
11.8
|
|
0.3
|
|
||
2024
|
7.8
|
|
—
|
|
||
Thereafter
|
20.0
|
|
—
|
|
||
Total future minimum lease payments
|
$
|
110.4
|
|
$
|
3.5
|
|
Less: imputed interest
|
(10.8
|
)
|
(0.1
|
)
|
||
Total
|
$
|
99.6
|
|
$
|
3.4
|
|
|
December 31, 2019
|
|
Weighted-average remaining lease term:
|
|
|
Operating leases
|
5.3 years
|
|
Finance leases
|
3.3 years
|
|
Weighted-average discount rate:
|
|
|
Operating leases
|
3.87
|
%
|
Finance leases
|
2.55
|
%
|
|
2019
|
2018
|
||||
Variable-rate Accounts Receivable Facility with an interest rate of 2.77% at December 31, 2019
|
$
|
1.8
|
|
$
|
—
|
|
Borrowings under lines of credit for certain of the Company’s foreign subsidiaries with various banks with interest rates ranging from 0.27% to 1.75% at December 31, 2019 and 0.29% to 1.00% at December 31, 2018
|
15.5
|
|
33.6
|
|
||
Short-term debt
|
$
|
17.3
|
|
$
|
33.6
|
|
Year
|
|
||
2020
|
$
|
64.7
|
|
2021
|
110.2
|
|
|
2022
|
10.6
|
|
|
2023
|
313.6
|
|
|
2024
|
483.7
|
|
|
Thereafter
|
730.0
|
|
|
2019
|
2018
|
2017
|
||||||
Weighted-average fair value per option
|
$
|
9.58
|
|
$
|
10.29
|
|
$
|
10.60
|
|
Risk-free interest rate
|
2.46
|
%
|
2.62
|
%
|
1.96
|
%
|
|||
Dividend yield
|
2.52
|
%
|
2.30
|
%
|
2.96
|
%
|
|||
Expected stock volatility
|
28.29
|
%
|
27.78
|
%
|
32.25
|
%
|
|||
Expected life - years
|
5
|
|
5
|
|
5
|
|
|
Number of
Shares
|
Weighted-average
Exercise Price |
Weighted-average
Remaining Contractual Term |
Aggregate Intrinsic Value
(millions)
|
|||||
Outstanding - beginning of year
|
3,189,950
|
|
$
|
38.21
|
|
|
|
||
Granted - new awards
|
558,760
|
|
42.61
|
|
|
|
|||
Exercised
|
(803,604
|
)
|
34.25
|
|
|
|
|||
Canceled or expired
|
(31,834
|
)
|
42.36
|
|
|
|
|||
Outstanding - end of year
|
2,913,272
|
|
$
|
40.10
|
|
6 years
|
$
|
47.2
|
|
Options expected to vest
|
2,913,272
|
|
$
|
40.10
|
|
6 years
|
$
|
47.2
|
|
Options exercisable
|
1,676,248
|
|
$
|
38.91
|
|
5 years
|
$
|
29.2
|
|
|
Expected to be Settled in Equity
|
Expected to be Settled in Cash
|
Total Awards Granted
|
|||
Performance-based restricted stock units
|
296,597
|
|
7,241
|
|
303,838
|
|
Time-based restricted stock units
|
157,465
|
|
3,940
|
|
161,405
|
|
Deferred shares
|
14,870
|
|
0
|
|
14,870
|
|
|
Number of Shares
|
Weighted-average
Grant Date Fair Value |
|||
Outstanding - beginning of year
|
1,196,492
|
|
$
|
38.76
|
|
Granted - new awards
|
468,932
|
|
41.57
|
|
|
Vested
|
(539,396
|
)
|
32.08
|
|
|
Canceled or expired
|
(19,304
|
)
|
43.31
|
|
|
Outstanding - end of year
|
1,106,724
|
|
$
|
43.13
|
|
|
U.S. Plans
|
International Plans
|
||||||||||||||||
|
2019
|
2018
|
2017
|
2019
|
2018
|
2017
|
||||||||||||
Components of net periodic benefit cost:
|
|
|
|
|
|
|
||||||||||||
Service cost
|
$
|
10.7
|
|
$
|
12.6
|
|
$
|
12.2
|
|
$
|
1.5
|
|
$
|
1.7
|
|
$
|
1.6
|
|
Interest cost
|
23.5
|
|
24.0
|
|
$
|
24.6
|
|
7.3
|
|
7.2
|
|
$
|
7.5
|
|
||||
Expected return on plan assets
|
(25.8
|
)
|
(29.3
|
)
|
$
|
(28.0
|
)
|
(10.2
|
)
|
(11.6
|
)
|
$
|
(11.1
|
)
|
||||
Amortization of prior service cost
|
1.6
|
|
1.7
|
|
1.4
|
|
0.2
|
|
0.1
|
|
$
|
—
|
|
|||||
Recognition of net actuarial (gains)
losses
|
(3.5
|
)
|
30.0
|
|
23.1
|
|
17.4
|
|
8.8
|
|
$
|
0.1
|
|
|||||
Curtailment gains
|
—
|
|
(10.2
|
)
|
(1.1
|
)
|
—
|
|
—
|
|
$
|
—
|
|
|||||
Net periodic benefit cost (credit)
|
$
|
6.5
|
|
$
|
28.8
|
|
$
|
32.2
|
|
$
|
16.2
|
|
$
|
6.2
|
|
$
|
(1.9
|
)
|
Assumptions
|
2019
|
2018
|
2017
|
||
U.S. Plans:
|
|
|
|
||
Discount rate
|
3.67% to 4.43%
|
|
3.75% to 3.94%
|
|
4.34% to 4.50%
|
Future compensation assumption
|
2.50
|
%
|
2.50
|
%
|
2.50% to 3.00%
|
Expected long-term return on plan assets
|
5.35% to 6.25%
|
|
5.75% to 6.50%
|
|
5.75% to 6.50%
|
International Plans:
|
|
|
|
||
Discount rate
|
1.50% to 11.00%
|
|
1.25% to 9.00%
|
|
1.25% to 9.00%
|
Future compensation assumption
|
2.00% to 8.23%
|
|
2.00% to 8.00%
|
|
2.00% to 8.00%
|
Expected long-term return on plan assets
|
2.50% to 9.00%
|
|
2.50% to 9.00%
|
|
0.75% to 9.25%
|
|
U.S. Plans
|
International Plans
|
||||||||||
|
2019
|
2018
|
2019
|
2018
|
||||||||
Change in benefit obligation:
|
|
|
|
|
||||||||
Benefit obligation at beginning of year
|
$
|
586.6
|
|
$
|
643.0
|
|
$
|
300.3
|
|
$
|
335.2
|
|
Service cost
|
10.7
|
|
12.6
|
|
1.5
|
|
1.7
|
|
||||
Interest cost
|
23.5
|
|
24.0
|
|
7.3
|
|
7.2
|
|
||||
Plan amendments
|
—
|
|
—
|
|
—
|
|
3.6
|
|
||||
Actuarial losses (gains)
|
74.9
|
|
(36.7
|
)
|
29.1
|
|
(7.4
|
)
|
||||
International plan exchange rate change
|
—
|
|
—
|
|
7.6
|
|
(17.2
|
)
|
||||
Curtailments
|
—
|
|
(10.2
|
)
|
—
|
|
—
|
|
||||
Benefits paid
|
(61.0
|
)
|
(95.8
|
)
|
(17.4
|
)
|
(24.8
|
)
|
||||
Acquisitions
|
—
|
|
49.7
|
|
0.4
|
|
2.0
|
|
||||
Benefit obligation at end of year
|
$
|
634.7
|
|
$
|
586.6
|
|
$
|
328.8
|
|
$
|
300.3
|
|
|
U.S. Plans
|
International Plans
|
||||||||||
|
2019
|
2018
|
2019
|
2018
|
||||||||
Change in plan assets:
|
|
|
|
|
||||||||
Fair value of plan assets at beginning of year
|
$
|
448.3
|
|
$
|
531.9
|
|
$
|
254.6
|
|
$
|
292.4
|
|
Actual return on plan assets
|
104.2
|
|
(37.5
|
)
|
21.9
|
|
(5.1
|
)
|
||||
Company contributions / payments
|
28.7
|
|
5.3
|
|
6.7
|
|
6.0
|
|
||||
International plan exchange rate change
|
—
|
|
—
|
|
8.9
|
|
(15.4
|
)
|
||||
Acquisitions
|
—
|
|
44.4
|
|
—
|
|
1.5
|
|
||||
Benefits paid
|
(61.0
|
)
|
(95.8
|
)
|
(17.4
|
)
|
(24.8
|
)
|
||||
Fair value of plan assets at end of year
|
520.2
|
|
448.3
|
|
274.7
|
|
254.6
|
|
||||
Funded status at end of year
|
$
|
(114.5
|
)
|
$
|
(138.3
|
)
|
$
|
(54.1
|
)
|
$
|
(45.7
|
)
|
Amounts recognized in accumulated other comprehensive loss:
|
|
|
|
|
||||||||
Net prior service cost
|
$
|
4.8
|
|
$
|
6.4
|
|
$
|
3.9
|
|
$
|
4.0
|
|
Accumulated other comprehensive loss
|
$
|
4.8
|
|
$
|
6.4
|
|
$
|
3.9
|
|
$
|
4.0
|
|
Changes in prior service cost recognized in accumulated other comprehensive loss:
|
|
|
|
|
||||||||
Accumulated other comprehensive loss at beginning of year
|
$
|
6.4
|
|
$
|
8.1
|
|
$
|
4.0
|
|
$
|
0.5
|
|
Prior service cost
|
—
|
|
—
|
|
—
|
|
3.6
|
|
||||
Recognized prior service cost
|
(1.6
|
)
|
(1.7
|
)
|
(0.2
|
)
|
(0.1
|
)
|
||||
Foreign currency impact
|
—
|
|
—
|
|
0.1
|
|
—
|
|
||||
Total recognized in accumulated other comprehensive loss at December 31
|
$
|
4.8
|
|
$
|
6.4
|
|
$
|
3.9
|
|
$
|
4.0
|
|
|
Current Target
Allocation
|
Percentage of Pension Plan
Assets at December 31,
|
|||
Asset Category
|
|
|
|
2019
|
2018
|
Equity securities
|
16%
|
to
|
22%
|
21%
|
18%
|
Fixed income securities
|
70%
|
to
|
80%
|
74%
|
76%
|
Other investments
|
4%
|
to
|
8%
|
5%
|
6%
|
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.
|
|
December 31, 2019
|
December 31, 2018
|
||||||||||||||||||||||
|
Level 1
|
Level 2
|
Level 3
|
Total
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash and cash equivalents
|
$
|
17.1
|
|
$
|
—
|
|
$
|
—
|
|
$
|
17.1
|
|
$
|
19.4
|
|
$
|
—
|
|
$
|
—
|
|
$
|
19.4
|
|
Government and agency securities
|
35.8
|
|
3.0
|
|
—
|
|
38.8
|
|
29.9
|
|
2.7
|
|
—
|
|
32.6
|
|
||||||||
Corporate bonds - investment grade
|
—
|
|
79.5
|
|
—
|
|
79.5
|
|
—
|
|
71.7
|
|
—
|
|
71.7
|
|
||||||||
Equity securities - U.S. companies
|
0.1
|
|
—
|
|
—
|
|
0.1
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||
Common collective funds - fixed income
|
42.0
|
|
—
|
|
—
|
|
42.0
|
|
36.0
|
|
—
|
|
—
|
|
36.0
|
|
||||||||
Mutual funds - fixed income
|
66.9
|
|
—
|
|
—
|
|
66.9
|
|
60.8
|
|
—
|
|
—
|
|
60.8
|
|
||||||||
Mutual funds - international equity
|
36.0
|
|
—
|
|
—
|
|
36.0
|
|
24.0
|
|
—
|
|
—
|
|
24.0
|
|
||||||||
Mutual funds - domestic equity
|
3.2
|
|
—
|
|
—
|
|
3.2
|
|
2.6
|
|
—
|
|
—
|
|
2.6
|
|
||||||||
Mutual funds - other assets
|
1.4
|
|
—
|
|
—
|
|
1.4
|
|
1.2
|
|
—
|
|
—
|
|
1.2
|
|
||||||||
Other assets
|
—
|
|
—
|
|
—
|
|
—
|
|
0.1
|
|
—
|
|
—
|
|
0.1
|
|
||||||||
|
$
|
202.5
|
|
$
|
82.5
|
|
$
|
—
|
|
$
|
285.0
|
|
$
|
174.0
|
|
$
|
74.4
|
|
$
|
—
|
|
$
|
248.4
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Investments measured at net asset value:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash and cash equivalents
|
|
|
|
$
|
0.2
|
|
|
|
|
$
|
0.2
|
|
||||||||||||
Equity securities - international companies
|
|
|
|
1.0
|
|
|
|
|
2.2
|
|
||||||||||||||
Common collective funds - domestic equities
|
|
|
|
76.3
|
|
|
|
|
54.0
|
|
||||||||||||||
Common collective funds - international equities
|
|
|
|
31.9
|
|
|
|
|
23.0
|
|
||||||||||||||
Common collective funds - fixed income
|
|
|
|
202.5
|
|
|
|
|
177.5
|
|
||||||||||||||
Common collective funds - diversified growth
|
|
|
|
17.9
|
|
|
|
|
18.5
|
|
||||||||||||||
Limited partnerships
|
|
|
|
18.7
|
|
|
|
|
24.0
|
|
||||||||||||||
Real estate partnerships
|
|
|
|
11.2
|
|
|
|
|
11.8
|
|
||||||||||||||
Other liability-driven investments
|
|
|
|
128.2
|
|
|
|
|
122.9
|
|
||||||||||||||
Other assets
|
|
|
|
22.0
|
|
|
|
|
20.4
|
|
||||||||||||||
Total Assets
|
|
|
|
$
|
794.9
|
|
|
|
|
$
|
702.9
|
|
Employer Contributions to Defined Benefit Plans
|
|
||
2018
|
$
|
11.3
|
|
2019
|
35.4
|
|
|
2020 (planned)
|
11.8
|
|
|
2019
|
2018
|
2017
|
||||||
Components of net periodic benefit (credit) cost:
|
|
|
|
||||||
Service cost
|
$
|
0.2
|
|
$
|
0.2
|
|
$
|
0.1
|
|
Interest cost
|
5.9
|
|
7.6
|
|
9.1
|
|
|||
Expected return on plan assets
|
(3.2
|
)
|
(3.7
|
)
|
(5.6
|
)
|
|||
Amortization of prior service credit
|
(5.4
|
)
|
(1.7
|
)
|
(1.0
|
)
|
|||
Recognition of net actuarial gains
|
(18.0
|
)
|
(16.7
|
)
|
(4.0
|
)
|
|||
Net periodic benefit (credit) cost
|
$
|
(20.5
|
)
|
$
|
(14.3
|
)
|
$
|
(1.4
|
)
|
Assumptions:
|
2019
|
2018
|
2017
|
|||
Discount rate
|
3.48% to 4.30%
|
|
3.57
|
%
|
3.97
|
%
|
Rate of return
|
4.85
|
%
|
4.50
|
%
|
6.00
|
%
|
Assumptions:
|
2019
|
2018
|
||
Discount rate
|
3.43
|
%
|
4.30
|
%
|
|
2019
|
2018
|
||||
Change in benefit obligation:
|
|
|
||||
Benefit obligation at beginning of year
|
$
|
186.9
|
|
$
|
219.8
|
|
Service cost
|
0.2
|
|
0.2
|
|
||
Interest cost
|
5.9
|
|
7.6
|
|
||
Plan amendments
|
(92.8
|
)
|
(4.4
|
)
|
||
Actuarial gains
|
(14.4
|
)
|
(20.7
|
)
|
||
International plan exchange rate change
|
0.2
|
|
(0.1
|
)
|
||
Benefits paid
|
(22.7
|
)
|
(27.2
|
)
|
||
Acquisitions
|
0.1
|
|
11.7
|
|
||
Benefit obligation at end of year
|
$
|
63.4
|
|
$
|
186.9
|
|
Change in plan assets:
|
|
|
||||
Fair value of plan assets at beginning of year
|
$
|
72.3
|
|
$
|
92.4
|
|
Company contributions / payments
|
8.0
|
|
7.4
|
|
||
Return on plan assets
|
6.8
|
|
(0.3
|
)
|
||
Benefits paid
|
(22.7
|
)
|
(27.2
|
)
|
||
Fair value of plan assets at end of year
|
64.4
|
|
72.3
|
|
||
Funded status at end of year
|
$
|
1.0
|
|
$
|
(114.6
|
)
|
Amounts recognized on the Consolidated Balance Sheets:
|
|
|
||||
Non-current assets
|
$
|
36.6
|
|
$
|
—
|
|
Current liabilities
|
(3.8
|
)
|
(5.9
|
)
|
||
Non-current liabilities
|
(31.8
|
)
|
(108.7
|
)
|
||
|
$
|
1.0
|
|
$
|
(114.6
|
)
|
|
2019
|
2018
|
||||
Amounts recognized in accumulated other comprehensive income:
|
|
|
||||
Net prior service credit
|
$
|
(98.2
|
)
|
$
|
(10.8
|
)
|
Accumulated other comprehensive income
|
$
|
(98.2
|
)
|
$
|
(10.8
|
)
|
Changes to prior service credit recognized in accumulated other comprehensive (income) loss:
|
|
|
||||
Accumulated other comprehensive income at beginning of year
|
$
|
(10.8
|
)
|
$
|
(8.1
|
)
|
Prior service credit
|
(92.8
|
)
|
(4.4
|
)
|
||
Recognized prior service credit
|
5.4
|
|
1.7
|
|
||
Total recognized in accumulated other comprehensive income at December 31
|
$
|
(98.2
|
)
|
$
|
(10.8
|
)
|
|
Current Target
Allocation
|
Percentage of VEBA Assets
at December 31,
|
|||
Asset Category
|
|
|
|
2019
|
2018
|
Equity securities
|
14%
|
to
|
20%
|
18%
|
17%
|
Fixed income securities
|
80%
|
to
|
86%
|
82%
|
83%
|
Total
|
|
|
|
100%
|
100%
|
|
2019
|
2018
|
||||
Assets:
|
|
|
||||
Cash and cash equivalents
|
$
|
9.4
|
|
$
|
9.9
|
|
Common collective fund - U.S. equities
|
7.4
|
|
6.8
|
|
||
Common collective fund - international equities
|
4.2
|
|
5.2
|
|
||
Common collective fund - fixed income
|
43.4
|
|
50.4
|
|
||
Total Assets
|
$
|
64.4
|
|
$
|
72.3
|
|
|
Future Benefit Payments
|
||
2020
|
$
|
7.3
|
|
2021
|
5.9
|
|
|
2022
|
5.2
|
|
|
2023
|
4.9
|
|
|
2024
|
4.6
|
|
|
2025-2029
|
19.9
|
|
|
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 (loss) income before reclassifications and income taxes
|
(19.9
|
)
|
92.7
|
|
1.2
|
|
74.0
|
|
||||
Amounts reclassified from accumulated other comprehensive (loss) income, before income tax
|
—
|
|
(3.6
|
)
|
(3.8
|
)
|
(7.4
|
)
|
||||
Income tax (expense) benefit
|
—
|
|
(22.2
|
)
|
0.6
|
|
(21.6
|
)
|
||||
Net current period other comprehensive (loss) income, net of income taxes
|
(19.9
|
)
|
66.9
|
|
(2.0
|
)
|
45.0
|
|
||||
Noncontrolling interest
|
0.2
|
|
—
|
|
—
|
|
0.2
|
|
||||
Net current period comprehensive (loss) income, net of income taxes and noncontrolling interest
|
(19.7
|
)
|
66.9
|
|
(2.0
|
)
|
45.2
|
|
||||
Balance at December 31, 2019
|
$
|
(115.3
|
)
|
$
|
66.9
|
|
$
|
(1.7
|
)
|
$
|
(50.1
|
)
|
|
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
|
(67.4
|
)
|
0.8
|
|
6.4
|
|
(60.2
|
)
|
||||
Amounts reclassified from accumulated other comprehensive (loss) income, before income tax
|
—
|
|
0.1
|
|
(1.3
|
)
|
(1.2
|
)
|
||||
Income tax expense
|
—
|
|
(0.5
|
)
|
(1.3
|
)
|
(1.8
|
)
|
||||
Net current period other comprehensive (loss) income, net of income taxes
|
(67.4
|
)
|
0.4
|
|
3.8
|
|
(63.2
|
)
|
||||
Noncontrolling interest
|
6.9
|
|
—
|
|
—
|
|
6.9
|
|
||||
Net current period comprehensive (loss) income, net of income taxes, noncontrolling interest and cumulative effect of accounting change
|
(60.5
|
)
|
0.3
|
|
3.2
|
|
(57.0
|
)
|
||||
Balance at December 31, 2018
|
$
|
(95.6
|
)
|
$
|
—
|
|
$
|
0.3
|
|
$
|
(95.3
|
)
|
|
December 31, 2019
|
|||||||||||
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||
Assets:
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
160.7
|
|
$
|
158.2
|
|
$
|
2.5
|
|
$
|
—
|
|
Cash and cash equivalents measured at net
asset value |
48.8
|
|
|
|
|
|
|
|
||||
Restricted cash
|
6.7
|
|
6.7
|
|
—
|
|
—
|
|
||||
Short-term investments
|
25.7
|
|
—
|
|
25.7
|
|
—
|
|
||||
Short-term investments measured at net asset value
|
0.1
|
|
|
|
|
|
|
|
||||
Foreign currency hedges
|
7.6
|
|
—
|
|
7.6
|
|
—
|
|
||||
Total Assets
|
$
|
249.6
|
|
$
|
164.9
|
|
$
|
35.8
|
|
$
|
—
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
||||||||
Foreign currency hedges
|
$
|
1.4
|
|
$
|
—
|
|
$
|
1.4
|
|
$
|
—
|
|
Total Liabilities
|
$
|
1.4
|
|
$
|
—
|
|
$
|
1.4
|
|
$
|
—
|
|
|
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
|
|
—
|
|
||||
Short-term investments measured at net asset value
|
—
|
|
|
|
|
|
|
|
||||
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
|
||||||||
|
|
Year Ended December 31,
|
||||||||
Derivatives not designated as hedging instruments
|
Location of gain or (loss) recognized in income
|
2019
|
2018
|
2017
|
||||||
Foreign currency forward contracts
|
Other income (expense), net
|
$
|
5.9
|
|
$
|
5.1
|
|
$
|
(10.2
|
)
|
|
2019
|
||||||||||||||
|
1st
|
2nd
|
3rd
|
4th
|
Total
|
||||||||||
Net sales
|
$
|
979.7
|
|
$
|
1,000.0
|
|
$
|
914.0
|
|
$
|
896.2
|
|
$
|
3,789.9
|
|
Gross profit
|
302.6
|
|
305.7
|
|
277.5
|
|
256.0
|
|
1,141.8
|
|
|||||
Selling, general and administrative expenses
|
152.7
|
|
158.7
|
|
148.0
|
|
159.2
|
|
618.6
|
|
|||||
Impairment and restructuring charges
|
—
|
|
1.9
|
|
1.6
|
|
3.3
|
|
6.8
|
|
|||||
Net income (1)
|
95.3
|
|
94.9
|
|
66.7
|
|
117.8
|
|
374.7
|
|
|||||
Net income attributable to noncontrolling interests
|
3.4
|
|
2.4
|
|
2.5
|
|
4.3
|
|
12.6
|
|
|||||
Net income attributable to The Timken Company
|
91.9
|
|
92.5
|
|
64.2
|
|
113.5
|
|
362.1
|
|
|||||
Net income per share - Basic:
|
$
|
1.21
|
|
$
|
1.22
|
|
$
|
0.85
|
|
$
|
1.51
|
|
$
|
4.78
|
|
Net income per share - Diluted:
|
$
|
1.19
|
|
$
|
1.20
|
|
$
|
0.84
|
|
$
|
1.48
|
|
$
|
4.71
|
|
Dividends per share
|
$
|
0.28
|
|
$
|
0.28
|
|
$
|
0.28
|
|
$
|
0.28
|
|
$
|
1.12
|
|
|
|
|
|
|
|
||||||||||
|
2018
|
||||||||||||||
|
1st
|
2nd
|
3rd
|
4th
|
Total
|
||||||||||
Net sales
|
$
|
883.1
|
|
$
|
906.3
|
|
$
|
881.3
|
|
$
|
910.1
|
|
$
|
3,580.8
|
|
Gross profit
|
264.9
|
|
267.4
|
|
253.3
|
|
254.5
|
|
1,040.1
|
|
|||||
Selling, general and administrative expenses
|
148.6
|
|
141.8
|
|
142.0
|
|
148.3
|
|
580.7
|
|
|||||
Impairment and restructuring charges
|
0.2
|
|
0.3
|
|
2.6
|
|
1.8
|
|
4.9
|
|
|||||
Net income (2)
|
80.5
|
|
91.9
|
|
72.3
|
|
60.8
|
|
305.5
|
|
|||||
Net income attributable to noncontrolling interests
|
0.3
|
|
0.9
|
|
0.7
|
|
0.8
|
|
2.7
|
|
|||||
Net income attributable to The Timken Company
|
80.2
|
|
91.0
|
|
71.6
|
|
60.0
|
|
302.8
|
|
|||||
Net income per share - Basic:
|
$
|
1.03
|
|
$
|
1.18
|
|
$
|
0.93
|
|
$
|
0.78
|
|
$
|
3.93
|
|
Net income per share - Diluted:
|
$
|
1.02
|
|
$
|
1.16
|
|
$
|
0.91
|
|
$
|
0.77
|
|
$
|
3.86
|
|
Dividends per share
|
$
|
0.27
|
|
$
|
0.28
|
|
$
|
0.28
|
|
$
|
0.28
|
|
$
|
1.11
|
|
(1)
|
Net income for the third quarter of 2019 included net actuarial losses of $16.9 million. Net income for the fourth quarter of 2019 included the reversal of tax valuation allowances of $44.5 million and net actuarial gains of $21.1 million.
|
(2)
|
Net income for the fourth quarter of 2018 included net actuarial losses of $19.7 million, partially offset by curtailment gains of $10.2 million.
|
|
Accounting for Acquisitions - BEKA
|
Description of the Matter
|
As described in Note 2, Acquisitions and Divestitures, to the consolidated financial statements, during 2019 the Company completed two acquisitions for net cash consideration of $228.4 million. The most significant acquisition was the acquisition of all the outstanding stock of BEKA Lubrication (“BEKA”). As part of the allocation of the purchase price under ASC 805, this acquisition resulted in the identification and recognition of $55.1 million of intangible assets, which consisted principally of a trade name, customer relationships, and technology and know-how (collectively “the identifiable intangible assets”), with the remainder allocated to goodwill.
Auditing the Company’s accounting for the 2019 acquisition of BEKA was complex because the identifiable intangible assets recognized were material to the consolidated financial statements and the estimates of fair value involved a high degree of subjectivity. The high degree of subjectivity was primarily due to the sensitivity of the respective fair values to underlying assumptions about the future performance of the acquired business. The Company used a discounted cash flow model to measure the trade name, customer relationships, and technology and know-how-related intangible assets. The significant assumptions used to estimate the fair value of the identifiable intangible assets included discount rates and certain assumptions that form the basis of the future net cash flows (e.g., revenue and EBITDA growth rates and royalty rates). These significant assumptions are forward looking and consider anticipated market conditions.
|
How We Addressed the Matter in Our Audit
|
We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s accounting for the acquisition, including recognition and measurement of the identifiable intangible assets acquired. For example, we tested controls over the recognition and measurement of the trade name, customer relationships, and technology and know-how-related intangible assets, including the valuation models and underlying assumptions used to develop such estimates.
Our audit procedures included, among others, reading the executed purchase agreement, evaluating the significant assumptions and methods used in developing fair value estimates, and testing the recognition of (1) the net assets acquired at fair value; (2) the identifiable acquired intangible assets at fair value; and (3) goodwill measured as a residual.
To test the estimated fair value of the trade name, customer relationships and technology and know-how-related intangible assets, we performed audit procedures that included, among others, evaluating the Company's selection of the valuation methodology, evaluating the methods and significant assumptions (including revenue and EBITDA growth rates and royalty rates), used by the Company, and evaluating the completeness and accuracy of the underlying data supporting the significant assumptions and estimates. We involved our valuation specialists to assist with our evaluation of the methodology used by the Company and significant assumptions included in the fair value estimates. For example, when evaluating the assumptions related to the revenue and EBITDA growth rates, we compared the assumptions to the past performance of BEKA, peer companies within the industry, similar acquisitions made by the Company and expected industry trends and considered whether they were consistent with evidence obtained in other areas of the audit. Additionally, when evaluating the assumptions related to discount and royalty rates, we compared the significant assumptions to current industry, market and economic trends, to the assumptions used to value similar assets in other acquisitions, to the historical results of the acquired business and to other guidelines used by companies within the same industry. Furthermore, we assessed the appropriateness of the disclosures in the consolidated financial statements regarding the acquisition.
|
Exhibit
|
|
|
|
|
|
|
|
|
|
Share Purchase Agreement Dated June 27, 2017, between Mr. H.J. Groeneveld and Timken Europe B.V., was filed on July 3, 2017 with Form 8-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
|
|
Amended Articles of Incorporation of Registrant, (effective May 7, 2013) were filed on July 31, 2013 with Form 10-Q (Commission File No. 1-1169) and are incorporated herein by reference.
|
|
|
|
|
|
|
|
Amended Regulations of the Registrant adopted on May 10, 2016, were filed on July 28, 2016 with Form 10-Q (Commission File No. 1-1169) and are incorporated herein by reference.
|
|
|
|
|
|
|
|
Fourth Amended and Restated Credit Agreement, dated as of June 25, 2019, among The Timken Company, Bank of America, N.A. and KeyBank National Association, as Co-Administrative Agent, and the Lenders party thereto, was filed on June 25, 2019 with Form 8-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
|
|
Credit Agreement, dated as of September 11, 2018, among The Timken Company, KeyBank National Association, as Administrative Agent, and the Lenders party thereto, was filed on September 14, 2018 with Form 8-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
|
|
First Amendment to Credit Agreement, dated as of July 12, 2019, among The Timken Company, KeyBank National Association, as Administrative Agent, and the Lenders party thereto was filed on July 12, 2019 with Form 8-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
|
|
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.
|
|
|
|
|
|
|
|
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.
|
|
|
|
|
|
|
|
Indenture, dated as of August 20, 2014, by and between The Timken Company and The Bank of New York Mellon Trust Company, N.A., was filed on August 20, 2014 with Form 8-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
|
|
Indenture, dated as of September 6, 2018, by and between The Timken Company and The Bank of New York Mellon Trust Company, N.A., as Trustee, was filed on September 6, 2018 with Form 8-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
|
|
First Supplemental Indenture, dated as of September 6, 2018, by and between The Timken Company and The Bank of New York Mellon Trust Company, N.A., as Trustee (including Form of Note), was filed on September 6, 2018 with Form 8-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
(4.9
|
)
|
|
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.
|
|
|
|
|
|
|
Description of The Timken Company Common Shares is attached hereto as Exhibit 4.1.
|
Management Contracts and Compensation Plans
|
||
|
The Timken Company 1996 Deferred Compensation Plan for officers and other key employees, amended and restated effective as of January 1, 2019 was filed on May 1, 2019 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
.
|
|
|
|
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.
|
|
|
|
|
|
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.
|
Management Contracts and Compensation Plans
|
||
|
|
|
|
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.
|
|
|
|
|
|
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.
|
|
|
|
|
|
The Timken Company 2011 Long-Term Incentive Plan, as amended and restated as of February 13, 2015 for directors, officers and other key employees as approved by the shareholders on May 7, 2015 was filed on March 27, 2015 with Definitive Proxy Statement on Schedule 14A (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
The Timken Company 2019 Equity and Incentive Compensation Plan for directors, officers and other key employees as approved by the shareholders on May 10, 2019 was filed on March 22, 2019 as Appendix B to Definitive Proxy Statement on Schedule 14A (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
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.
|
|
|
|
|
|
Amended and Restated Supplemental Pension Plan of The Timken Company, effective as of June 30, 2014, was filed on October 30, 2018 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Amendment No. 1 to the Amended and Restated Supplemental Pension Plan of The Timken Company, effective as of June 30, 2014, was filed on October 30, 2018 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Amended and Restated Supplemental Pension Plan of The Timken Company, effective as of October 1, 2018, was filed on October 30, 2018 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
The Timken Company Senior Executive Management Performance Plan, as amended and restated as of February 13, 2015 and approved by shareholders on May 7, 2015, was filed on March 27, 2015 with Definitive Proxy Statement on Schedule 14A (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Severance Agreement (for Executive Officers appointed on or after November 12, 2015), as adopted on November 12, 2015, was filed on February 24, 2016 with Form 10-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Severance Agreement 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.
|
|
|
|
|
|
Severance Agreement with Andreas Roellgen, dated as of July 18, 2016, was filed on July 31, 2019 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Indemnification Agreement for Directors is attached hereto as Exhibit 10.1.
|
|
|
|
|
|
Form of Indemnification Agreement for Executive Officers is attached hereto as Exhibit 10.2.
|
|
|
|
|
|
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
|
|
|
|
|
|
Form of Amended and Restated Employee Excess Benefits Agreement entered into with the Chief Executive Officer, was filed on February 26, 2009 with Form 10-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
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.
|
|
|
|
|
|
Amendment No. 1 to the Employee Excess Benefits Agreement, dated January 1, 2011, entered into with Richard G. Kyle, approved as of November 8, 2018 was filed on February 15, 2019 with Form 10-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
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
|
||
|
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.
|
|
|
|
|
|
Amendment No. 2 to the Amended and Restated Employee Excess Benefits Agreement, dated December 17, 2008, entered into with Christopher A. Coughlin, approved as of November 8, 2018 was filed on February 15, 2019 with Form 10-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Amendment No. 3 to the Amended and Restated Employee Excess Benefits Agreement, dated December 18, 2008, entered into with Philip D. Fracassa, approved as of November 8, 2018 was filed on February 15, 2019 with Form 10-K (Commission File No. 1-1169) and is incorporated herein by reference
|
|
|
|
|
|
Form of Amendment No. 1 to The Amended and Restated Employee Excess Benefits Agreement entered into with the Chief Executive Officer, 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.
|
|
|
|
|
|
Form of Amendment No. 2 to The Amended and Restated Employee Excess Benefits Agreement entered into with the Chief Executive Officer, 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.
|
|
|
|
|
|
Form of Nonqualified Stock Option Agreement for transferable options for Officers, as adopted on August 12, 2015, was filed on February 24, 2016 with Form 10-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
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.
|
|
|
|
|
|
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.
|
|
|
|
|
|
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.
|
|
|
|
|
|
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.
|
|
|
|
|
|
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.
|
|
|
|
|
|
Form of Nonqualified Stock Option Agreement, as adopted on February 8, 2018, was filed on May 1, 2018 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Nonqualified Stock Option Agreement (U.S), as adopted on September 24, 2018, was filed on October 30, 2018 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Nonqualified Stock Option Agreement (Non-U.S), as adopted on September 24, 2018, was filed on October 30, 2018 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Nonqualified Stock Option Agreement (U.S.), as adopted February 7, 2019 and pursuant to the Timken Company 2011 Long-Term Incentive Plan, was filed on May 1, 2019 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Nonqualified Stock Option Agreement (non-U.S.), as adopted February 7, 2019 and pursuant to the Timken Company 2011 Long-Term Incentive Plan, was filed on May 1, 2019 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Nonqualified Stock Option Agreement (U.S., retirement age 62), as adopted February 7, 2019 and pursuant to the Timken Company 2011 Long-Term Incentive Plan, was filed on May 1, 2019 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Nonqualified Stock Option Agreement (non-U.S., retirement age 62), as adopted February 7, 2019 and pursuant to the Timken Company 2011 Long-Term Incentive Plan, was filed on May 1, 2019 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Nonqualified Stock Option Agreement (U.S.) as adopted February 7, 2019 and to be granted pursuant to the Timken Company 2019 Equity and Incentive Compensation Plan, was filed on May 1, 2019 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Nonqualified Stock Option Agreement (non-U.S.) as adopted February 7, 2019 and to be granted pursuant to the Timken Company 2019 Equity and Incentive Compensation Plan, was filed on May 1, 2019 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
Management Contracts and Compensation Plans
|
||
|
Form of Nonqualified Stock Option Agreement (U.S., retirement age 62), as adopted February 7, 2019 and to be granted pursuant to the Timken Company 2019 Equity and Incentive Compensation Plan, was filed on May 1, 2019 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Nonqualified Stock Option Agreement (non-U.S., retirement age 62), as adopted February 7, 2019 and to be granted pursuant to the Timken Company 2019 Equity and Incentive Compensation Plan, was filed on May 1, 2019 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Restricted Share Agreement for Non-Employee Directors (ratable vesting over five years), as adopted on August 12, 2015, was filed on February 24, 2016 with Form 10-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Restricted Share Agreement for Non-Employee Directors (one year vesting), as adopted on February 12, 2015, was filed on February 24, 2016 with Form 10-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Deferred Shares Agreement (five year cliff vesting) 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.
|
|
|
|
|
|
Form of Deferred Shares Agreement (five year cliff vesting) entered into with employees after August 12, 2015, as adopted on August 12, 2015, was filed on February 24, 2016 with Form 10-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Deferred Shares Agreement (three year cliff vesting) entered into with employees after November 12, 2015, as adopted on November 12, 2015, was filed on February 24, 2016 with Form 10-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Deferred Shares Agreement (three year cliff vesting), as adopted on February 8, 2018, was filed on May 1, 2018 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Deferred Shares Agreement (five year cliff vesting), as adopted on February 8, 2018, was filed on May 1, 2018 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Deferred Shares Agreement (three year cliff vesting), as adopted on September 24, 2018, was filed on October 30, 2018 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Deferred Shares Agreement (five year cliff vesting), as adopted on September 24, 2018, was filed on October 30, 2018 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Deferred Shares Agreement (three year cliff vesting), as adopted February 7, 2019 and pursuant to the Timken Company 2011 Long-Term Incentive Plan, was filed on May 1, 2019 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Deferred Shares Agreement (five year cliff vesting), as adopted February 7, 2019 and pursuant to the Timken Company 2011 Long-Term Incentive Plan, was filed on May 1, 2019 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Deferred Shares Agreement (three year cliff vesting, retirement age 62), as adopted February 7, 2019 and pursuant to the Timken Company 2011 Long-Term Incentive Plan, was filed on May 1, 2019 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Deferred Shares Agreement (five year cliff vesting, retirement age 62), as adopted February 7, 2019 and pursuant to the Timken Company 2011 Long-Term Incentive Plan, was filed on May 1, 2019 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Deferred Share Equivalents Agreement (three year cliff vesting), as adopted February 7, 2019 and pursuant to the Timken Company 2011 Long-Term Incentive Plan, was filed on May 1, 2019 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Deferred Share Equivalents Agreement five year cliff vesting), as adopted February 7, 2019 and pursuant to the Timken Company 2011 Long-Term Incentive Plan, was filed on May 1, 2019 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Deferred Share Equivalents Agreement (three year cliff vesting, retirement age 62), as adopted February 7, 2019 and pursuant to the Timken Company 2011 Long-Term Incentive Plan, was filed on May 1, 2019 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Deferred Share Equivalents Agreement (five year cliff vesting, retirement age 62), as adopted February 7, 2019 and pursuant to the Timken Company 2011 Long-Term Incentive Plan, was filed on May 1, 2019 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Deferred Shares Agreement (three year cliff vesting), as adopted February 7, 2019 and to be granted pursuant to the Timken Company 2019 Equity and Incentive Compensation Plan, was filed on May 1, 2019 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
Management Contracts and Compensation Plans
|
||
|
Form of Deferred Shares Agreement (five year cliff vesting), as adopted February 7, 2019 and to be granted pursuant to the Timken Company 2019 Equity and Incentive Compensation Plan, was filed on May 1, 2019 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Deferred Shares Agreement (three year cliff vesting, retirement age 62), as adopted February 7, 2019 and to be granted pursuant to the Timken Company 2019 Equity and Incentive Compensation Plan, was filed on May 1, 2019 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Deferred Shares Agreement (five year cliff vesting, retirement age 62), as adopted February 7, 2019 and to be granted pursuant to the Timken Company 2019 Equity and Incentive Compensation Plan, was filed on May 1, 2019 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Deferred Share Equivalents Agreement (three year cliff vesting), as adopted February 7, 2019 and to be granted pursuant to the Timken Company 2019 Equity and Incentive Compensation Plan, was filed on May 1, 2019 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Deferred Share Equivalents Agreement (five year cliff vesting, as adopted February 7, 2019 and to be granted pursuant to the Timken Company 2019 Equity and Incentive Compensation Plan, was filed on May 1, 2019 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Deferred Share Equivalents Agreement (three year cliff vesting, retirement age 62), as adopted February 7, 2019 and to be granted pursuant to the Timken Company 2019 Equity and Incentive Compensation Plan, was filed on May 1, 2019 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Deferred Share Equivalents Agreement (five year cliff vesting, retirement age 62), as adopted February 7, 2019 and to be granted pursuant to the Timken Company 2019 Equity and Incentive Compensation Plan, was filed on May 1, 2019 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Performance-Based Restricted Stock Unit Agreement entered into with key employees was filed on May 2, 2012 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Performance-Based Restricted Stock Unit Agreement, as adopted on February 8, 2018, was filed on May 1, 2018 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Performance-Based Restricted Stock Unit Agreement, as adopted February 7, 2019 and pursuant to the Timken Company 2011 Long-Term Incentive Plan, was filed on May 1, 2019 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Performance-Based Restricted Stock Unit Agreement (retirement age 62), as adopted February 7, 2019 and pursuant to the Timken Company 2011 Long-Term Incentive Plan, was filed on May 1, 2019 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Performance-Based Restricted Stock Unit Agreement, as adopted February 7, 2019 and to be granted pursuant to the Timken Company 2019 Equity and Incentive Compensation Plan, was filed on May 1, 2019 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Performance-Based Restricted Stock Unit Agreement (retirement age 62), as adopted February 7, 2019 and to be granted pursuant to the Timken Company 2019 Equity and Incentive Compensation Plan, was filed on May 1, 2019 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Time-Based Restricted Stock Unit Agreement entered into with key employees was filed on May 2, 2012 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Time-Based Restricted Stock Unit Agreement (Cliff Vesting) entered into with key employees was filed on February 28, 2014 with Form 10-K (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Time-Based Restricted Stock Unit Agreement, as adopted on February 8, 2018, was filed on May 1, 2018 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Time-Based Restricted Stock Unit Agreement for Nonemployee Directors (annual grant), as adopted February 8, 2018, was filed on May 1, 2018 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Time-Based Restricted Stock Unit Agreement for Nonemployee Directors (new member grant), as adopted February 8, 2018, was filed on May 1, 2018 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Time-Based Restricted Stock Unit Agreement, as adopted February 7, 2019 and pursuant to the Timken Company 2011 Long-Term Incentive Plan, was filed on May 1, 2019 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Time-Based Restricted Stock Unit Agreement (retirement age 62), as adopted February 7, 2019 and pursuant to the Timken Company 2011 Long-Term Incentive Plan, was filed on May 1, 2019 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
Management Contracts and Compensation Plans
|
||
|
Form of Time-Based Restricted Stock Unit Agreement, as adopted February 7, 2019 and to be granted pursuant to the Timken Company 2019 Equity and Incentive Compensation Plan, was filed on May 1, 2019 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Time-Based Restricted Stock Unit Agreement (retirement age 62), as adopted February 7, 2019 and to be granted pursuant to the Timken Company 2019 Equity and Incentive Compensation Plan, was filed on May 1, 2019 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Time-Based Restricted Stock Unit Agreement for Nonemployee Directors (new member grant), as adopted February 7, 2019, was filed on May 1, 2019 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Time-Based Restricted Stock Unit Agreement for Nonemployee Directors (annual grant), as adopted February 7, 2019, was filed on May 1, 2019 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.
|
|
|
|
|
|
Form of Associate Non-Compete Agreement entered into with key employees was filed on December 3, 2012 with Form 10-Q/A (Commission File No. 1-1169) and is incorporated herein by reference.
|
Listing of Exhibits (continued)
|
||
|
|
|
|
Description of The Timken Company Common Shares.
|
|
|
|
|
|
Form of Indemnification Agreement entered into for Directors.
|
|
|
|
|
|
Form of Indemnification Agreement entered into for Executive Officers.
|
|
|
|
|
|
A list of subsidiaries of the Registrant.
|
|
|
|
|
|
Consent of Independent Registered Public Accounting Firm.
|
|
|
|
|
|
Power of Attorney.
|
|
|
|
|
|
Principal Executive Officer's Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
Principal Financial Officer's Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
Financial statements from the Annual Report on Form 10-K of The Timken Company for the year ended December 31, 2019, formatted in Inline XBRL: (i) the Consolidated Statements of Income, (ii) the Consolidated Statements of Comprehensive Income (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Cash Flows, (v) the Consolidated Statements of Shareholders' Equity and (vi) the Notes to the Consolidated Financial Statements.
|
|
|
|
|
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
|
By: /s/ Richard G. Kyle
|
|
By: /s/ Philip D. Fracassa
|
Richard G. Kyle
|
|
Philip D. Fracassa
|
President, Chief Executive Officer and Director
|
|
Executive Vice President and Chief Financial Officer
|
(Principal Executive Officer)
|
|
(Principal Financial Officer)
|
Date: February 14, 2020
|
|
Date: February 14, 2020
|
|
|
|
|
|
By: /s/ Shelly M. Chadwick
|
|
|
Shelly M. Chadwick
|
|
|
Vice President - Finance and Chief
Accounting Officer |
|
|
(Principal Accounting Officer)
|
|
|
Date: February 14, 2020
|
By: /s/ Maria A. Crowe *
|
|
By: /s/ Frank C. Sullivan *
|
Maria A. Crowe, Director
|
|
Frank C. Sullivan, Director
|
Date: February 14, 2020
|
|
Date: February 14, 2020
|
|
|
|
By: /s/ Elizabeth A. Harrell *
|
|
By: /s/ John M. Timken, Jr.*
|
Elizabeth A. Harrell
|
|
John M. Timken, Jr., Director
|
Date: February 14, 2020
|
|
Date: February 14, 2020
|
|
|
|
By: /s/ Richard G. Kyle *
|
|
By: /s/ Ward J. Timken, Jr.*
|
Richard G. Kyle, Director
|
|
Ward J. Timken, Jr., Director
|
Date: February 14, 2020
|
|
Date: February 14, 2020
|
|
|
|
By: /s/ John A. Luke, Jr.*
|
|
By: /s/ Jacqueline F. Woods *
|
John A. Luke, Jr., Director
|
|
Jacqueline F. Woods, Director
|
Date: February 14, 2020
|
|
Date: February 14, 2020
|
|
|
|
By: /s/ Christopher L. Mapes *
|
|
* By: /s/ Philip D. Fracassa
|
Christopher L. Mapes, Director
|
|
Philip D. Fracassa, attorney-in-fact
|
Date: February 14, 2020
|
|
By authority of Power of Attorney
|
|
|
filed as Exhibit 24 hereto
|
By: /s/ James F. Palmer *
|
|
Date: February 14, 2020
|
James F. Palmer, Director
|
|
|
Date: February 14, 2020
|
|
|
|
|
|
By: /s/ Ajita G. Rajendra *
|
|
|
Ajita G. Rajendra, Director
|
|
|
Date: February 14, 2020
|
|
|
|
|
|
Allowance for uncollectible accounts:
|
2019
|
2018
|
2017
|
||||||
Balance at beginning of period
|
$
|
21.9
|
|
$
|
20.3
|
|
$
|
20.2
|
|
Additions:
|
|
|
|
||||||
Charged to costs and expenses (1)
|
1.8
|
|
3.1
|
|
3.8
|
|
|||
Charged to other accounts (2)
|
—
|
|
1.3
|
|
0.4
|
|
|||
Deductions:
|
|
|
|
||||||
Charged to costs and expenses (3)
|
4.9
|
|
2.8
|
|
4.1
|
|
|||
Charged to other accounts (2)
|
0.7
|
|
—
|
|
—
|
|
|||
Balance at end of period
|
$
|
18.1
|
|
$
|
21.9
|
|
$
|
20.3
|
|
|
|
|
|
||||||
Allowance for surplus and obsolete inventory:
|
2019
|
2018
|
2017
|
||||||
Balance at beginning of period
|
$
|
39.5
|
|
$
|
30.0
|
|
$
|
21.1
|
|
Additions:
|
|
|
|
||||||
Charged to costs and expenses (4)
|
5.2
|
|
16.1
|
|
10.3
|
|
|||
Charged to other accounts (2)
|
1.9
|
|
2.3
|
|
6.0
|
|
|||
Deductions (5)
|
10.8
|
|
8.9
|
|
7.4
|
|
|||
Balance at end of period
|
$
|
35.8
|
|
$
|
39.5
|
|
$
|
30.0
|
|
|
|
|
|
||||||
Valuation allowance on deferred tax assets:
|
2019
|
2018
|
2017
|
||||||
Balance at beginning of period
|
$
|
77.5
|
|
$
|
79.4
|
|
$
|
85.5
|
|
Additions
|
|
|
|
||||||
Charged to costs and expenses (6)
|
—
|
|
—
|
|
6.5
|
|
|||
Charged to other accounts (7)
|
2.3
|
|
—
|
|
—
|
|
|||
Deductions (8)
|
46.1
|
|
1.9
|
|
12.6
|
|
|||
Balance at end of period
|
$
|
33.7
|
|
$
|
77.5
|
|
$
|
79.4
|
|
(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)
|
Provision 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 allowance adjustment recorded against goodwill.
|
(8)
|
Amount primarily relates to the reversal of valuation allowances due to the realization of net operating loss carryforwards. The Company released $44.5 million of foreign valuation allowances for the year ended December 31, 2019, $40.7 million of which relates to the valuation allowance that was recorded against German indefinite-lived loss carryforwards and pension deferred tax assets. Refer to Note 5 - Income Taxes in the Notes to the Consolidated Financial Statements for further discussion on valuation allowance reversals.
|
•
|
the articles of incorporation expressly provide that the corporation is not subject to the statute (the Company has not made this election); or
|
•
|
the board of directors of the corporation approves the chapter 1704 transaction or the acquisition of the shares before the date the shares were acquired.
|
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
|
|
|
AIPCF V Feeder CTP Belt, LLC
|
|
Delaware
|
100.0
|
%
|
Bearing Inspection, Inc.
|
|
California
|
100.0
|
%
|
Beka World LP
|
|
Georgia
|
100.0
|
%
|
Beka World Management Inc.
|
|
Georgia
|
100.0
|
%
|
Cone Drive Operations Inc.
|
|
Delaware
|
100.0
|
%
|
Diamond Chain Company, Inc.
|
|
Delaware
|
100.0
|
%
|
Diamond Chain China Company Inc.
|
|
Delaware
|
100.0
|
%
|
Drives Brazil Holdings I, LLC
|
|
Delaware
|
100.0
|
%
|
Drives Brazil Holdings II, LLC
|
|
Delaware
|
100.0
|
%
|
Groeneveld Lubrication Solutions Inc.
|
|
Ohio
|
100.0
|
%
|
Groeneveld USA Holding, Inc.
|
|
Ohio
|
100.0
|
%
|
Groeneveld USA Inc.
|
|
Ohio
|
100.0
|
%
|
Lovejoy, LLC
|
|
Illinois
|
100.0
|
%
|
Lovejoy Curtis, LLC
|
|
Illinois
|
100.0
|
%
|
MPB Corporation
|
|
Delaware
|
100.0
|
%
|
PT Tech, LLC
|
|
Ohio
|
100.0
|
%
|
Rail Bearing Service LLC
|
|
Virginia
|
100.0
|
%
|
Rollon Corporation
|
|
New Jersey
|
100.0
|
%
|
S.E. Setco Service Company, LLC
|
|
Georgia
|
50.0
|
%
|
The Timken Corporation
|
|
Ohio
|
100.0
|
%
|
Timken Aerospace Drive Systems, 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 Industrial Services, LLC
|
|
Delaware
|
100.0
|
%
|
Timken Mex I LLC
|
|
Delaware
|
100.0
|
%
|
Timken Mex II LLC
|
|
Delaware
|
100.0
|
%
|
Timken Motor & Crane Services LLC
|
|
Delaware
|
100.0
|
%
|
Timken Newco I, LLC
|
|
Delaware
|
100.0
|
%
|
Timken Newco Corp.
|
|
Delaware
|
100.0
|
%
|
Timken Receivables Corporation
|
|
Delaware
|
100.0
|
%
|
Timken Service and Sales, LLC
|
|
Ohio
|
100.0
|
%
|
Timken SMO LLC
|
|
Delaware
|
100.0
|
%
|
Timken U.S. Holdings LLC
|
|
Delaware
|
100.0
|
%
|
Timken US LLC
|
|
Delaware
|
100.0
|
%
|
Torsion Control Products, Inc.
|
|
Michigan
|
100.0
|
%
|
|
|
|
|
|
|
International
|
|
|
Apiary Investments Holdings Limited
|
|
United Kingdom
|
100.0
|
%
|
Australian Timken Proprietary Limited
|
|
Australia
|
100.0
|
%
|
Baier & Köppel GmbH & Co. KG
|
|
Germany
|
100.0
|
%
|
BEKA-Geschäftsführungs GmbH
|
|
Germany
|
100.0
|
%
|
Beka-Lube GmbH
|
|
Austria
|
100.0
|
%
|
Beka-Lube N.V.
|
|
Belgium
|
100.0
|
%
|
Beka-Nederland B.V.
|
|
Netherlands
|
100.0
|
%
|
Bekalube France S.A.S.
|
|
France
|
100.0
|
%
|
BEKALUBE IBÉRICA, S.L.U.
|
|
Spain
|
100.0
|
%
|
Bekalube S.R.L.
|
|
Italy
|
100.0
|
%
|
BEKAWORLD Singapore Pte. Ltd.
|
|
Singapore
|
100.0
|
%
|
BEKA Beteiligungs GmbH
|
|
Germany
|
100.0
|
%
|
BEKA Japan Co., Ltd.
|
|
Japan
|
100.0
|
%
|
Beka Lube Products Inc.
|
|
Canada
|
100.0
|
%
|
BEKA Lubrication Systems (Kunshan) Co., Ltd.
|
|
China
|
100.0
|
%
|
B.I.O. Asset Management GmbH
|
|
Germany
|
100.0
|
%
|
British Timken Limited
|
|
United Kingdom
|
100.0
|
%
|
Cone Drive Operations Ltd.
|
|
United Kingdom
|
100.0
|
%
|
Diamond Chain Technology (Suzhou) Co., Ltd.
|
|
China
|
100.0
|
%
|
Diamond (Weifang) Power Transmission Co. Ltd.
|
|
China
|
70.0
|
%
|
Diamond Chain (UK) Limited
|
|
United Kingdom
|
100.0
|
%
|
Dr. Köppel Vermögensverwaltungs GmbH & Co. KG
|
|
Germany
|
100.0
|
%
|
Drives Comercio, Importacoes e Exportacoes Ltda.
|
|
Brazil
|
100.0
|
%
|
Gintec Active Safety Ltd.
|
|
Israel
|
100.0
|
%
|
Greencat GmbH
|
|
Germany
|
100.0
|
%
|
Greencat Sp. Z.o.o.
|
|
Poland
|
100.0
|
%
|
Groeneveld Belgium N.V.
|
|
Belgium
|
100.0
|
%
|
Groeneveld Comercial e Importadora Ltda.
|
|
Brazil
|
100.0
|
%
|
Groeneveld Groep B.V.
|
|
Netherlands
|
100.0
|
%
|
Groeneveld Groep Nederland B.V.
|
|
Netherlands
|
100.0
|
%
|
Groeneveld ICT Solutions Ltd.
|
|
United Kingdom
|
100.0
|
%
|
Groeneveld Immobiliare S.r.l.
|
|
Italy
|
100.0
|
%
|
Groeneveld India Private Limited
|
|
India
|
51.0
|
%
|
Groeneveld Italia S.r.l.
|
|
Italy
|
100.0
|
%
|
Groeneveld Latin America Ltda
|
|
Brazil
|
100.0
|
%
|
Groeneveld Lubrication Solutions GmbH
|
|
Germany
|
100.0
|
%
|
Groeneveld Lubrication Solutions Inc.
|
|
Canada
|
100.0
|
%
|
Groeneveld Lubrication Solutions Limited
|
|
New Zealand
|
100.0
|
%
|
Groeneveld Lubrication Solutions Ltd.
|
|
United Kingdom
|
100.0
|
%
|
Groeneveld Lubrication Solutions Pty Ltd.
|
|
Australia
|
100.0
|
%
|
Groeneveld Lubrication Solutions Sarl
|
|
France
|
100.0
|
%
|
Groeneveld Lubrication Solutions S.r.l.
|
|
Italy
|
100.0
|
%
|
Groeneveld Polska Sp Z.o.o.
|
|
Poland
|
100.0
|
%
|
Groeneveld Pte. Ltd.
|
|
Singapore
|
100.0
|
%
|
Groeneveld s.r.o
|
|
Czech Republic
|
100.0
|
%
|
Groeneveld Trading (Shanghai) Co. Ltd.
|
|
China
|
100.0
|
%
|
Groeneveld Transport Efficiency B.V.
|
|
Netherlands
|
100.0
|
%
|
Groeneveld Transport Efficiency Iberica S.A.
|
|
Spain
|
100.0
|
%
|
Groeneveld Transport Efficiency International Holding B.V.
|
|
Netherlands
|
100.0
|
%
|
Groeneveld UK Limited
|
|
United Kingdom
|
100.0
|
%
|
Interlube UK Limited
|
|
United Kingdom
|
100.0
|
%
|
Jiangsu TWB Bearings Co., Ltd.
|
|
China
|
100.0
|
%
|
Jiangyin Huafang New Energy Hi-Tech Equipment Co., Ltd.
|
|
China
|
100.0
|
%
|
MAW-Maschinenfabrik Wannberg GmbH
|
|
Germany
|
100.0
|
%
|
R+L Hydraulics, GmbH
|
|
Germany
|
100.0
|
%
|
Rollon GmbH
|
|
Germany
|
100.0
|
%
|
Rollon India Pvt. Ltd.
|
|
India
|
100.0
|
%
|
Rollon S.a.r.l.
|
|
France
|
100.0
|
%
|
Rollon (Shanghai) Commerce and Trading Co., Ltd.
|
|
China
|
100.0
|
%
|
Rollon S.p.A.
|
|
Italy
|
100.0
|
%
|
Rollon (Suzhou) Manufacturing Co., Ltd.
|
|
China
|
100.0
|
%
|
Rollon Ltd. UK Limited
|
|
United Kingdom
|
100.0
|
%
|
Timken (Bermuda) L.P.
|
|
Bermuda
|
100.0
|
%
|
Timken (Canada) Holdings II ULC
|
|
Canada
|
100.0
|
%
|
Timken (Canada) Holdings III 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 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 LP
|
|
Canada
|
100.0
|
%
|
Timken Colombia SAS
|
|
Columbia
|
100.0
|
%
|
Timken De Mexico, S.A. De C.V.
|
|
Mexico
|
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 India Limited
|
|
India
|
67.8
|
%
|
Timken Italia S.r.l.
|
|
Italy
|
100.0
|
%
|
Timken Italy Holding 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 Mexico Rodamientios S. de R.L. de C.V.
|
|
Mexico
|
100.0
|
%
|
Timken Middle East FZE
|
|
Dubai
|
100.0
|
%
|
Timken Polska SP z.o.o.
|
|
Poland
|
100.0
|
%
|
Timken PWP SRL
|
|
Romania
|
100.0
|
%
|
Timken Romania SA
|
|
Romania
|
98.9
|
%
|
Timken Rulman ve Guc Aktarma Sistemleri Ticaret Limited Sirketi
|
|
Turkey
|
100.0
|
%
|
Timken-Rus Service Company, ooo
|
|
Russia
|
100.0
|
%
|
(1)
|
Registration Statement (Form S-8 No. 333-43847) pertaining to The Timken Company International Stock Ownership Plan
|
(2)
|
Registration Statement (Form S-8 No. 333-103753) pertaining to The Timken Company Savings and Stock Investment Plan for Torrington Non-Bargaining Associates
|
(3)
|
Registration Statement (Form S-8 No. 333-103754) pertaining to The Timken Company Savings Plan for Torrington Bargaining Associates
|
(4)
|
Registration Statement (Form S-8 No. 333-105333) pertaining to The Timken Share Incentive Plan
|
(5)
|
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
|
(6)
|
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; Form S-8 No. 333-229721) pertaining to The Voluntary Investment Pension Plan for Hourly Employees of The Timken Company
|
(7)
|
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 Savings and Investment Pension Plan
|
(8)
|
Registration Statements (Form S-8 No. 333-45753; 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
|
(9)
|
Registration Statements (Form S-8 No. 333-66907; 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
|
(10)
|
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; Form S-8 No. 333-209677) pertaining to the Company Savings Plan for the Employees of Timken France
|
(11)
|
Registration Statements (Form S-8 No. 333-47185; 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)
|
(12)
|
Registration Statements (Form S-8 No. 333-174093; Form S-8 No. 333-20458) pertaining to The Timken Company 2011 Long-Term Incentive Plan
|
(13)
|
Registration Statement (Form S-3 No. 333-226469) pertaining to The Timken Company’s equity and debt securities
|
(14)
|
Registration Statement (Form S-8 No. 333-231367) pertaining to The Timken Company 2019 Equity and Incentive Compensation Plan
|
/s/ Shelly M. Chadwick
|
|
/s/ James F. Palmer
|
Shelly M. Chadwick
|
|
James F. Palmer
|
(Principal Accounting Officer)
|
|
|
|
|
|
/s/ Phillip D. Fracassa
|
|
/s/ Ajita G. Rajendra
|
Phillip D. Fracassa
|
|
Ajita G. Rajendra
|
(Principal Financial Officer)
|
|
|
|
|
|
/s/ Richard G. Kyle
|
|
/s/ Frank C. Sullivan
|
Richard G. Kyle
|
|
Frank C. Sullivan
|
(Principal Executive Officer)
|
|
|
|
|
|
/s/ Maria A. Crowe
|
|
/s/ John M. Timken, Jr.
|
Maria A. Crowe
|
|
John M. Timken, Jr.
|
|
|
|
/s/ Elizabeth A. Harrell
|
|
/s/ Ward J. Timken, Jr.
|
Elizabeth A. Harrell
|
|
Ward J. Timken, Jr.
|
|
|
|
/s/ John A. Luke, Jr.
|
|
/s/ Jacqueline F. Woods
|
John A. Luke, Jr.
|
|
Jacqueline F. Woods
|
|
|
|
/s/ Christopher L. Mapes
|
|
|
Christopher L. Mapes
|
|
|
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)
|
|