FORM 10-K
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ý
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TIMKENSTEEL CORPORATION
(Exact name of registrant as specified in its charter)
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Ohio
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46-4024951
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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1835 Dueber Avenue SW, Canton, OH
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44706
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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o
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Accelerated filer
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ý
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Non-accelerated filer
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o
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Smaller reporting company
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o
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Emerging growth company
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o
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Class
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Outstanding at February 15, 2020
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Common Shares, without par value
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44,821,588
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Document
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Parts Into Which Incorporated
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Proxy Statement for the 2020 Annual Meeting of Shareholders
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Part III
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PAGE
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PART I.
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PART II.
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•
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Deep and experienced management and technical team.
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Close and trusted working relationship with customers across diverse end markets.
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Leadership position in niche markets with differentiated products.
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Track record of innovation rooted in a deep technical knowledge of steel materials, manufacturing processes and a focus on end-user applications. Our research and development efforts focus on creating solutions for our customers’ toughest challenges.
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make it more difficult for us to satisfy our financial obligations under our indebtedness and our contractual and commercial commitments and increase the risk that we may default on our debt obligations;
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require us to use a substantial portion of our cash flow from operations to pay interest and principal on our debt, which would reduce the funds available for working capital, capital expenditures and other general corporate purposes;
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limit our ability to obtain additional financing for working capital, capital expenditures, acquisitions and other investments, or general corporate purposes, which may limit the ability to execute our business strategy and affect the market price of our common shares;
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heighten our vulnerability to downturns in our business, our industry or in the general economy and restrict us from exploiting business opportunities or making acquisitions;
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place us at a competitive disadvantage compared to those of our competitors that may have less debt;
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limit management’s discretion in operating our business;
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limit our flexibility in planning for, or reacting to, changes in our business, the industry in which we operate or the general economy; and
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result in higher interest expense if interest rates increase and we have outstanding floating rate borrowings.
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actual or anticipated changes in operating results or business prospects;
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changes in financial estimates by securities analysts;
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an inability to meet or exceed securities analysts’ estimates or expectations;
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conditions or trends in our industry or sector;
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the performance of other companies in our industry or sector and related market valuations;
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announcements by us or our competitors of significant acquisitions, strategic partnerships, divestitures, joint ventures or other strategic initiatives;
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general financial, economic or political instability;
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hedging or arbitrage trading activity in our common shares;
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changes in interest rates;
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capital commitments;
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additions or departures of key personnel; and
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future sales of our common shares or securities convertible into, or exchangeable or exercisable for, our common shares.
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providing that our board of directors fixes the number of members of the board;
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providing for the division of our board of directors into three classes with staggered terms;
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establishing advance notice requirements for nominations of candidates for election to our board of directors or for proposing matters that can be acted on by shareholders at shareholder meetings; and
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authorizing the issuance of “blank check” preferred shares, which could be issued by our board of directors to increase the number of outstanding securities of ours with voting rights and thwart a takeover attempt.
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Name
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Age
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Current Position
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Terry L. Dunlap
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60
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Interim Chief Executive Officer and President
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Kristopher R. Westbrooks
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41
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Executive Vice President and Chief Financial Officer
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Frank A. DiPiero
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63
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Executive Vice President, General Counsel and Secretary
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Thomas D. Moline
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57
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Executive Vice President, Commercial Operations
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William P. Bryan
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60
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Executive Vice President, Manufacturing, Supply Chain and Information Technology
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Date
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TimkenSteel Corporation
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S&P MidCap 400 Index
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S&P 500 Steel Index
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July 1, 2014
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$100.00
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$100.00
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$100.00
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December 31, 2014
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$96.71
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$102.11
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$95.49
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December 31, 2015
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$22.29
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$99.89
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$80.49
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December 31, 2016
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$41.18
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$120.61
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$122.43
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December 31, 2017
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$37.59
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$131.51
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$135.49
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December 31, 2018
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$21.63
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$115.08
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$127.04
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December 31, 2019
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$19.95
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$142.75
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$107.22
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Year Ended December 31,
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(dollars and shares in millions, except per share data)
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2019
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2018 (3)
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2017 (3)
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2016 (3)
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2015(3)
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Statement of Operations Data:
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Net sales
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$1,208.8
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$1,610.6
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$1,329.2
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$869.5
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$1,106.2
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Net (loss) income
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(110.0
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)
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(10.0
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)
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(31.3
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)
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(105.5
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)
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(45.0
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)
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Earnings (loss) per share(1):
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Basic
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($2.46
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)
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($0.22
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)
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($0.70
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)
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($2.39
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)
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($1.01
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)
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Diluted
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($2.46
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)
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($0.22
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)
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($0.70
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)
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($2.39
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)
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($1.01
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)
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Cash dividends declared per share
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$—
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$—
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$—
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$—
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$0.42
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Weighted average shares outstanding, diluted
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44.8
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44.6
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44.4
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44.2
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44.5
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Balance Sheet Data:
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Total assets
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$1,085.2
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$1,275.3
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$1,212.6
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$1,069.9
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$1,142.5
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Long-term debt
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168.6
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189.1
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165.3
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136.6
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200.2
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Total shareholders’ equity
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563.1
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612.9
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616.7
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597.4
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682.0
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Other Data:
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Book value per share(2)
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$12.57
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$13.74
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$13.89
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$13.52
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$15.33
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Year Ended December 31,
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2019
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2018
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$ Change
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Pension and postretirement non-service benefit income
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$17.5
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$25.2
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($7.7
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)
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Loss from remeasurement of benefit plans
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(40.6
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)
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(43.5
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)
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2.9
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Foreign currency exchange gain (loss)
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—
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(0.2
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)
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0.2
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Miscellaneous income (expense)
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(0.2
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)
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(0.1
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(0.1
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)
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Total other income (expense), net
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($23.3
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)
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($18.6
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)
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($4.7
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)
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Year Ended December 31,
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2018
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2017
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$ Change
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Pension and postretirement non-service benefit income
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$25.2
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$17.5
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$7.7
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Loss from remeasurement of benefit plans
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(43.5
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)
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(21.8
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)
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(21.7
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)
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Foreign currency exchange gain (loss)
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(0.2
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)
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0.3
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(0.5
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)
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Miscellaneous income (expense)
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(0.1
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)
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(0.1
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)
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—
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Total other income (expense), net
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($18.6
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)
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($4.1
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)
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($14.5
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)
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Year Ended December 31,
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2019
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2018
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$ Change
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Provision (benefit) for income taxes
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($16.1
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)
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$1.8
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($17.9
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)
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Effective tax rate
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12.8
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%
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(5.9
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)%
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NM
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Year Ended December 31,
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2018
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2017
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$ Change
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Provision (benefit) for income taxes
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$1.8
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$1.5
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$0.3
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Effective tax rate
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(5.9
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)%
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(3.7
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)%
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NM
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Net Sales adjusted to exclude surcharges
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(dollars in millions, tons in thousands)
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2019
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|||||||||||||||
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Mobile
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Industrial
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Energy
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Other
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Total
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Tons
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397.6
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348.2
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90.6
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61.9
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898.3
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|||||
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Net Sales
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$479.3
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$486.3
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$166.4
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$76.8
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$1,208.8
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Less: Surcharges
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104.1
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99.9
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32.8
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16.7
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253.5
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Base Sales
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$375.2
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$386.4
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$133.6
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$60.1
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$955.3
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Net Sales / Ton
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$1,205
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$1,397
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$1,837
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$1,241
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$1,346
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Base Sales / Ton
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$944
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$1,110
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$1,475
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$971
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$1,063
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2018
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|||||||||||||||
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Mobile
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Industrial
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Energy
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Other
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Total
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||||||||||
Tons
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428.3
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462.7
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152.8
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155.6
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1,199.4
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|||||
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|
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||||||||||
Net Sales
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$553.9
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|
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$637.5
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|
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$265.6
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$153.6
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|
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$1,610.6
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Less: Surcharges
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134.4
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|
161.5
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61.2
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|
48.3
|
|
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405.4
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Base Sales
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$419.5
|
|
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$476.0
|
|
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$204.4
|
|
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$105.3
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|
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$1,205.2
|
|
|
|
|
|
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Net Sales / Ton
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$1,293
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|
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$1,378
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|
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$1,738
|
|
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$987
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|
|
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$1,343
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Base Sales / Ton
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$979
|
|
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$1,029
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|
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$1,338
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$677
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$1,005
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2017
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Mobile
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Industrial
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Energy
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Other
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Total
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Tons
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428.1
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413.4
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97.0
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211.7
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1,150.2
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|||||
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Net Sales
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$528.6
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|
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$486.4
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|
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$141.7
|
|
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$172.5
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|
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$1,329.2
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Less: Surcharges
|
105.1
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|
106.6
|
|
23.5
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|
56.1
|
|
|
291.3
|
|
|||||
Base Sales
|
|
$423.5
|
|
|
$379.8
|
|
|
$118.2
|
|
|
$116.4
|
|
|
|
$1,037.9
|
|
|
|
|
|
|
|
|
||||||||||
Net Sales / Ton
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|
$1,235
|
|
|
$1,177
|
|
|
$1,461
|
|
|
$815
|
|
|
|
$1,156
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|
Base Sales / Ton
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|
$989
|
|
|
$919
|
|
|
$1,219
|
|
|
$550
|
|
|
|
$902
|
|
|
December 31,
2019 |
December 31,
2018 |
||||
Cash and cash equivalents
|
|
$27.1
|
|
|
$21.6
|
|
|
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|
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Credit Agreement:
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|
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Maximum availability
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$400.0
|
|
|
$300.0
|
|
Suppressed availability(1)
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(103.0
|
)
|
—
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Availability
|
297.0
|
|
300.0
|
|
||
Credit facility amount borrowed
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(90.0
|
)
|
(115.0
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)
|
||
Letter of credit obligations
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(3.8
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)
|
(2.6
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)
|
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Availability not borrowed
|
203.2
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|
182.4
|
|
||
|
|
|
||||
Total liquidity
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$230.3
|
|
|
$204.0
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Net cash provided (used) by operating activities
|
|
$70.3
|
|
|
|
$18.5
|
|
|
|
$8.1
|
|
Net cash provided (used) by investing activities
|
(38.0
|
)
|
|
(39.0
|
)
|
|
(33.0
|
)
|
|||
Net cash provided (used) by financing activities
|
(26.8
|
)
|
|
17.6
|
|
|
23.8
|
|
|||
Increase (Decrease) in Cash and Cash Equivalents
|
|
$5.5
|
|
|
|
($2.9
|
)
|
|
|
($1.1
|
)
|
Contractual Obligations
|
Total
|
|
Less than
1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More than
5 Years
|
|||||||||||
Convertible notes and other long-term debt
|
|
$176.3
|
|
|
|
$—
|
|
|
|
$86.3
|
|
|
|
$90.0
|
|
|
|
$—
|
|
|
Interest payments
|
24.9
|
|
|
8.2
|
|
|
13.4
|
|
|
3.3
|
|
—
|
|
—
|
|
|||||
Operating leases
|
15.4
|
|
|
6.8
|
|
|
6.8
|
|
|
1.8
|
|
|
—
|
|
||||||
Purchase commitments
|
143.0
|
|
|
33.6
|
|
|
28.7
|
|
|
27.4
|
|
|
53.3
|
|
||||||
Retirement benefits
|
171.1
|
|
|
3.2
|
|
|
24.8
|
|
|
67.7
|
|
|
75.4
|
|
||||||
Total
|
|
$530.7
|
|
|
|
$51.8
|
|
|
|
$160.0
|
|
|
|
$190.2
|
|
|
|
$128.7
|
|
|
Hypothetical Rate
|
||||||
|
Increase (decrease)
|
||||||
|
0.25%
|
|
(0.25)%
|
||||
Discount Rate
|
|
|
|
||||
Net periodic benefit cost, prior to annual remeasurement gains or losses
|
|
$1.0
|
|
|
|
$1.1
|
|
Benefit obligation
|
|
($39.5
|
)
|
|
|
$41.5
|
|
|
|
|
|
||||
Return on plan assets
|
|
|
|
||||
Net periodic benefit cost, prior to annual remeasurement gains or losses
|
|
($2.7
|
)
|
|
|
$2.7
|
|
•
|
deterioration in world economic conditions, or in economic conditions in any of the geographic regions in which we conduct business, including additional adverse effects from global economic slowdown, terrorism or hostilities. This includes: political risks associated with the potential instability of governments and legal systems in countries in which we or our customers conduct business, and changes in currency valuations;
|
•
|
the effects of fluctuations in customer demand on sales, product mix and prices in the industries in which we operate. This includes: our ability to respond to rapid changes in customer demand; the effects of customer bankruptcies or liquidations; the impact of changes in industrial business cycles; and whether conditions of fair trade exist in the U.S. markets;
|
•
|
competitive factors, including changes in market penetration; increasing price competition by existing or new foreign and domestic competitors; the introduction of new products by existing and new competitors; and new technology that may impact the way our products are sold or distributed;
|
•
|
changes in operating costs, including the effect of changes in our manufacturing processes; changes in costs associated with varying levels of operations and manufacturing capacity; availability of raw materials and energy; our ability to mitigate the impact of fluctuations in raw materials and energy costs and the effectiveness of our surcharge mechanism; changes in the expected costs associated with product warranty claims; changes resulting from inventory management, cost reduction initiatives and different levels of customer demands; the effects of unplanned work stoppages; and changes in the cost of labor and benefits;
|
•
|
the success of our operating plans, announced programs, initiatives and capital investments; and our ability to maintain appropriate relations with unions that represent our associates in certain locations in order to avoid disruptions of business;
|
•
|
unanticipated litigation, claims or assessments, including claims or problems related to intellectual property, product liability or warranty, and environmental issues and taxes, among other matters;
|
•
|
the availability of financing and interest rates, which affect our cost of funds and/or ability to raise capital; our pension obligations and investment performance; and/or customer demand and the ability of customers to obtain financing to purchase our products or equipment that contain our products; and the amount of any dividend declared by our Board of Directors on our common shares;
|
•
|
The overall impact of the pension and postretirement mark-to-market accounting; and
|
•
|
Those items identified under the caption Risk Factors in this Annual Report on Form 10-K.
|
|
PAGE
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018 ADJUSTED
|
|
2017 ADJUSTED
|
||||||
(Dollars in millions, except per share data)
|
|
|
|
|
|
||||||
Net sales
|
|
$1,208.8
|
|
|
|
$1,610.6
|
|
|
|
$1,329.2
|
|
Cost of products sold
|
1,186.2
|
|
|
1,484.0
|
|
|
1,248.9
|
|
|||
Gross Profit
|
22.6
|
|
|
126.6
|
|
|
80.3
|
|
|||
|
|
|
|
|
|
||||||
Selling, general and administrative expenses
|
91.8
|
|
|
98.2
|
|
|
90.5
|
|
|||
Restructuring charges
|
8.6
|
|
|
—
|
|
|
—
|
|
|||
Impairment charges and loss on sale or disposal of assets
|
9.3
|
|
|
0.9
|
|
|
0.7
|
|
|||
Interest expense
|
15.7
|
|
|
17.1
|
|
|
14.8
|
|
|||
Other income (expense), net
|
(23.3
|
)
|
|
(18.6
|
)
|
|
(4.1
|
)
|
|||
Income (Loss) Before Income Taxes
|
(126.1
|
)
|
|
(8.2
|
)
|
|
(29.8
|
)
|
|||
Provision (benefit) for income taxes
|
(16.1
|
)
|
|
1.8
|
|
|
1.5
|
|
|||
Net Income (Loss)
|
|
($110.0
|
)
|
|
|
($10.0
|
)
|
|
|
($31.3
|
)
|
|
|
|
|
|
|
||||||
Per Share Data:
|
|
|
|
|
|
||||||
Basic earnings (loss) per share
|
|
($2.46
|
)
|
|
|
($0.22
|
)
|
|
|
($0.70
|
)
|
Diluted earnings (loss) per share
|
|
($2.46
|
)
|
|
|
($0.22
|
)
|
|
|
($0.70
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018 ADJUSTED
|
|
2017 ADJUSTED
|
||||||
(Dollars in millions)
|
|
|
|
|
|
||||||
Net income (loss)
|
|
($110.0
|
)
|
|
|
($10.0
|
)
|
|
|
($31.3
|
)
|
Other comprehensive income (loss), net of tax of $16.7 million in 2019:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
0.5
|
|
|
(1.4
|
)
|
|
1.1
|
|
|||
Pension and postretirement liability adjustments
|
53.1
|
|
|
0.1
|
|
|
0.7
|
|
|||
Other comprehensive income (loss), net of tax
|
53.6
|
|
|
(1.3
|
)
|
|
1.8
|
|
|||
Comprehensive Income (Loss), net of tax
|
|
($56.4
|
)
|
|
|
($11.3
|
)
|
|
|
($29.5
|
)
|
|
December 31,
|
||||||
|
2019
|
|
2018 ADJUSTED
|
||||
(Dollars in millions)
|
|
|
|
||||
ASSETS
|
|
|
|
||||
Current Assets
|
|
|
|
||||
Cash and cash equivalents
|
|
$27.1
|
|
|
|
$21.6
|
|
Accounts receivable, net of allowances (2019 - $1.5 million; 2018 - $1.7 million)
|
77.5
|
|
|
163.4
|
|
||
Inventories, net
|
281.9
|
|
|
374.5
|
|
||
Deferred charges and prepaid expenses
|
3.3
|
|
|
3.5
|
|
||
Assets held for sale
|
4.1
|
|
|
—
|
|
||
Other current assets
|
7.8
|
|
|
6.1
|
|
||
Total Current Assets
|
401.7
|
|
|
569.1
|
|
||
|
|
|
|
||||
Property, plant and equipment, net
|
626.4
|
|
|
674.4
|
|
||
Operating lease right-of-use assets
|
14.3
|
|
|
—
|
|
||
Pension assets
|
25.2
|
|
|
10.5
|
|
||
Intangible assets, net
|
14.3
|
|
|
17.8
|
|
||
Other non-current assets
|
3.3
|
|
|
3.5
|
|
||
Total Assets
|
|
$1,085.2
|
|
|
|
$1,275.3
|
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Current Liabilities
|
|
|
|
||||
Accounts payable
|
|
$69.3
|
|
|
|
$160.6
|
|
Salaries, wages and benefits
|
13.9
|
|
|
36.8
|
|
||
Accrued pension and postretirement costs
|
3.0
|
|
|
3.0
|
|
||
Current operating lease liabilities
|
6.2
|
|
|
—
|
|
||
Other current liabilities
|
19.9
|
|
|
20.4
|
|
||
Total Current Liabilities
|
112.3
|
|
|
220.8
|
|
||
|
|
|
|
||||
Convertible notes, net
|
78.6
|
|
|
74.1
|
|
||
Credit Agreement
|
90.0
|
|
|
115.0
|
|
||
Non-current operating lease liabilities
|
8.2
|
|
|
—
|
|
||
Accrued pension and postretirement costs
|
222.1
|
|
|
240.0
|
|
||
Deferred income taxes
|
0.9
|
|
|
0.8
|
|
||
Other non-current liabilities
|
10.0
|
|
|
11.7
|
|
||
Total Liabilities
|
522.1
|
|
|
662.4
|
|
||
|
|
|
|
||||
Shareholders’ Equity
|
|
|
|
||||
Preferred shares, without par value; authorized 10.0 million shares, none issued
|
—
|
|
|
—
|
|
||
Common shares, without par value; authorized 200.0 million shares;
issued 2019 and 2018 - 45.7 million shares
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
844.8
|
|
|
846.3
|
|
||
Retained deficit
|
(301.5
|
)
|
|
(191.5
|
)
|
||
Treasury shares - 2019 - 0.9 million; 2018 - 1.1 million
|
(24.9
|
)
|
|
(33.0
|
)
|
||
Accumulated other comprehensive income (loss)
|
44.7
|
|
|
(8.9
|
)
|
||
Total Shareholders’ Equity
|
563.1
|
|
|
612.9
|
|
||
Total Liabilities and Shareholders’ Equity
|
|
$1,085.2
|
|
|
|
$1,275.3
|
|
(Dollars in millions)
|
Common Shares Outstanding
|
|
Additional Paid-in Capital
|
|
Retained Deficit
|
|
Treasury Shares
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Total
|
|||||||||||
Balance as of December 31, 2016
|
44,228,213
|
|
|
|
$845.6
|
|
|
|
($193.9
|
)
|
|
|
($44.9
|
)
|
|
|
($9.4
|
)
|
|
|
$597.4
|
|
Cumulative effect of change in accounting principle (Note 1)
|
—
|
|
|
—
|
|
|
43.5
|
|
|
—
|
|
|
—
|
|
|
43.5
|
|
|||||
Net income (loss)
|
—
|
|
|
—
|
|
|
(31.3
|
)
|
|
—
|
|
|
—
|
|
|
(31.3
|
)
|
|||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.8
|
|
|
1.8
|
|
|||||
Stock-based compensation expense
|
—
|
|
|
6.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6.5
|
|
|||||
Stock option activity
|
—
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|||||
Issuance of treasury shares
|
300,130
|
|
|
(8.6
|
)
|
|
(0.3
|
)
|
|
8.9
|
|
|
—
|
|
|
—
|
|
|||||
Shares surrendered for taxes
|
(82,596
|
)
|
|
—
|
|
|
—
|
|
|
(1.4
|
)
|
|
—
|
|
|
(1.4
|
)
|
|||||
Balance as of December 31, 2017 ADJUSTED
|
44,445,747
|
|
|
|
$843.7
|
|
|
|
($182.0
|
)
|
|
|
($37.4
|
)
|
|
|
($7.6
|
)
|
|
|
$616.7
|
|
Net income (loss)
|
—
|
|
|
—
|
|
|
(10.0
|
)
|
|
—
|
|
|
—
|
|
|
(10.0
|
)
|
|||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.3
|
)
|
|
(1.3
|
)
|
|||||
Adoption of new accounting standard (Note 2)
|
—
|
|
|
—
|
|
|
0.7
|
|
|
—
|
|
|
—
|
|
|
0.7
|
|
|||||
Stock-based compensation expense
|
—
|
|
|
7.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7.3
|
|
|||||
Stock option activity
|
—
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|||||
Issuance of treasury shares
|
176,454
|
|
|
(4.9
|
)
|
|
(0.2
|
)
|
|
5.1
|
|
|
—
|
|
|
—
|
|
|||||
Shares surrendered for taxes
|
(37,533
|
)
|
|
—
|
|
|
—
|
|
|
(0.7
|
)
|
|
—
|
|
|
(0.7
|
)
|
|||||
Balance as of December 31, 2018 ADJUSTED
|
44,584,668
|
|
|
|
$846.3
|
|
|
|
($191.5
|
)
|
|
|
($33.0
|
)
|
|
|
($8.9
|
)
|
|
|
$612.9
|
|
Net income (loss)
|
—
|
|
|
—
|
|
|
(110.0
|
)
|
|
—
|
|
|
—
|
|
|
(110.0
|
)
|
|||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
53.6
|
|
|
53.6
|
|
|||||
Stock-based compensation expense
|
—
|
|
|
7.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7.4
|
|
|||||
Stock option activity
|
—
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|||||
Issuance of treasury shares
|
321,739
|
|
|
(9.1
|
)
|
|
—
|
|
|
9.1
|
|
|
—
|
|
|
—
|
|
|||||
Shares surrendered for taxes
|
(86,254
|
)
|
|
—
|
|
|
—
|
|
|
(1.0
|
)
|
|
—
|
|
|
(1.0
|
)
|
|||||
Balance at December 31, 2019
|
44,820,153
|
|
|
|
$844.8
|
|
|
|
($301.5
|
)
|
|
|
($24.9
|
)
|
|
|
$44.7
|
|
|
|
$563.1
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
ADJUSTED
|
|
2017
ADJUSTED
|
||||||
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|||
CASH PROVIDED (USED)
|
|
|
|
|
|
|
|
|
|||
Operating Activities
|
|
|
|
|
|
|
|
|
|||
Net income (loss)
|
|
($110.0
|
)
|
|
|
($10.0
|
)
|
|
|
($31.3
|
)
|
Adjustments to reconcile net loss to net cash provided (used) by operating activities:
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization
|
73.5
|
|
|
73.0
|
|
|
74.9
|
|
|||
Amortization of deferred financing fees and debt discount
|
5.1
|
|
|
5.5
|
|
|
4.0
|
|
|||
Impairment charges and loss on sale or disposal of assets
|
9.3
|
|
|
0.9
|
|
|
1.6
|
|
|||
Deferred income taxes
|
(16.6
|
)
|
|
0.8
|
|
|
(0.3
|
)
|
|||
Stock-based compensation expense
|
7.4
|
|
|
7.3
|
|
|
6.5
|
|
|||
Pension and postretirement expense (benefit), net
|
41.6
|
|
|
37.4
|
|
|
24.7
|
|
|||
Pension and postretirement contributions and payments
|
(3.8
|
)
|
|
(13.1
|
)
|
|
(4.3
|
)
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|||
Accounts receivable, net
|
85.9
|
|
|
(13.6
|
)
|
|
(58.2
|
)
|
|||
Inventories, net
|
92.6
|
|
|
(94.5
|
)
|
|
(72.3
|
)
|
|||
Accounts payable
|
(87.7
|
)
|
|
24.4
|
|
|
45.7
|
|
|||
Other accrued expenses
|
(26.0
|
)
|
|
(3.8
|
)
|
|
18.3
|
|
|||
Deferred charges and prepaid expenses
|
0.2
|
|
|
0.4
|
|
|
(0.5
|
)
|
|||
Other, net
|
(1.2
|
)
|
|
3.8
|
|
|
(0.7
|
)
|
|||
Net Cash Provided (Used) by Operating Activities
|
70.3
|
|
|
18.5
|
|
|
8.1
|
|
|||
|
|
|
|
|
|
|
|
|
|||
Investing Activities
|
|
|
|
|
|
|
|
|
|||
Capital expenditures
|
(38.0
|
)
|
|
(40.0
|
)
|
|
(33.0
|
)
|
|||
Proceeds from disposals of property, plant and equipment
|
—
|
|
|
1.0
|
|
|
—
|
|
|||
Net Cash Provided (Used) by Investing Activities
|
(38.0
|
)
|
|
(39.0
|
)
|
|
(33.0
|
)
|
|||
|
|
|
|
|
|
|
|
|
|||
Financing Activities
|
|
|
|
|
|
|
|
|
|||
Proceeds from exercise of stock options
|
0.2
|
|
|
0.2
|
|
|
0.2
|
|
|||
Shares surrendered for employee taxes on stock compensation
|
(1.0
|
)
|
|
(0.7
|
)
|
|
(1.4
|
)
|
|||
Refunding Bonds repayments
|
—
|
|
|
(30.2
|
)
|
|
—
|
|
|||
Repayments on credit agreements
|
(65.0
|
)
|
|
(105.0
|
)
|
|
(5.0
|
)
|
|||
Borrowings on credit agreements
|
40.0
|
|
|
155.0
|
|
|
30.0
|
|
|||
Debt issuance costs
|
(1.0
|
)
|
|
(1.7
|
)
|
|
—
|
|
|||
Net Cash Provided (Used) by Financing Activities
|
(26.8
|
)
|
|
17.6
|
|
|
23.8
|
|
|||
Increase (Decrease) in Cash and Cash Equivalents
|
5.5
|
|
|
(2.9
|
)
|
|
(1.1
|
)
|
|||
Cash and cash equivalents at beginning of period
|
21.6
|
|
|
24.5
|
|
|
25.6
|
|
|||
Cash and Cash Equivalents at End of Period
|
|
$27.1
|
|
|
|
$21.6
|
|
|
|
$24.5
|
|
For the Year Ended December 31, 2019
|
As Computed under LIFO
|
As Reported under FIFO
|
Effect of Change
|
||||||
Statement of Operations
|
|
|
|
||||||
Cost of products sold
|
|
$1,160.5
|
|
|
$1,186.2
|
|
|
$25.7
|
|
Gross profit
|
48.3
|
|
22.6
|
|
(25.7
|
)
|
|||
Income (loss) before income taxes
|
(100.4
|
)
|
(126.1
|
)
|
(25.7
|
)
|
|||
Net income (loss)
|
(84.3
|
)
|
(110.0
|
)
|
(25.7
|
)
|
|||
|
|
|
|
||||||
Per Share Data:
|
|
|
|
||||||
Basic earnings (loss) per share
|
(1.89
|
)
|
(2.46
|
)
|
(0.57
|
)
|
|||
Diluted earnings (loss) per share
|
(1.89
|
)
|
(2.46
|
)
|
(0.57
|
)
|
For the Year Ended December 31, 2019
|
As Computed under LIFO
|
As Reported under FIFO
|
Effect of Change
|
||||||
Statement of Comprehensive Income (Loss)
|
|
|
|
||||||
Net (loss) income
|
|
($84.3
|
)
|
|
($110.0
|
)
|
|
($25.7
|
)
|
Comprehensive income (loss), net of tax
|
(30.7
|
)
|
(56.4
|
)
|
(25.7
|
)
|
As of December 31, 2019
|
As Computed under LIFO
|
As Reported under FIFO
|
Effect of Change
|
||||||
Balance Sheet
|
|
|
|
||||||
Inventories, net
|
|
$229.8
|
|
|
$281.9
|
|
|
$52.1
|
|
Retained deficit
|
(249.4
|
)
|
(301.5
|
)
|
(52.1
|
)
|
For the Year Ended December 31, 2019
|
As Computed under LIFO
|
As Reported under FIFO
|
Effect of Change
|
||||||
Statement of Cash Flows
|
|
|
|
||||||
Net (loss) income
|
|
($84.3
|
)
|
|
($110.0
|
)
|
|
($25.7
|
)
|
Changes in operating assets and liabilities:
|
|
|
|
||||||
Inventories, net
|
66.9
|
|
92.6
|
|
25.7
|
|
Consolidated Statement of Operations
|
|
2018
|
|
2017
|
||||||||||||||||
|
|
As Reported
|
Adjustments
|
As Adjusted
|
|
As Reported
|
Adjustments
|
As Adjusted
|
||||||||||||
Cost of products sold
|
|
$
|
1,505.7
|
|
$
|
(21.7
|
)
|
$
|
1,484.0
|
|
|
$
|
1,261.4
|
|
$
|
(12.5
|
)
|
$
|
1,248.9
|
|
Gross profit
|
|
104.9
|
|
21.7
|
|
126.6
|
|
|
67.8
|
|
12.5
|
|
80.3
|
|
||||||
Income (loss) before income taxes
|
|
(29.9
|
)
|
21.7
|
|
(8.2
|
)
|
|
(42.3
|
)
|
12.5
|
|
(29.8
|
)
|
||||||
Net income (loss)
|
|
(31.7
|
)
|
21.7
|
|
(10.0
|
)
|
|
(43.8
|
)
|
12.5
|
|
(31.3
|
)
|
||||||
|
|
|
|
|
|
|
|
|
||||||||||||
Per Share Data:
|
|
|
|
|
|
|
|
|
||||||||||||
Basic earnings (loss) per share
|
|
$
|
(0.71
|
)
|
$
|
0.49
|
|
$
|
(0.22
|
)
|
|
$
|
(0.99
|
)
|
$
|
0.29
|
|
$
|
(0.70
|
)
|
Diluted earnings (loss) per share
|
|
$
|
(0.71
|
)
|
$
|
0.49
|
|
$
|
(0.22
|
)
|
|
$
|
(0.99
|
)
|
$
|
0.29
|
|
$
|
(0.70
|
)
|
Consolidated Statement of Comprehensive Income (Loss)
|
|
|
2018
|
|
|
|
2017
|
|
||||||||||||
|
|
As Reported
|
Adjustments
|
As Adjusted
|
|
As Reported
|
Adjustments
|
As Adjusted
|
||||||||||||
Net income (loss)
|
|
$
|
(31.7
|
)
|
$
|
21.7
|
|
$
|
(10.0
|
)
|
|
$
|
(43.8
|
)
|
$
|
12.5
|
|
$
|
(31.3
|
)
|
Comprehensive income (loss), net of tax
|
|
(33.0
|
)
|
21.7
|
|
(11.3
|
)
|
|
(42.0
|
)
|
12.5
|
|
(29.5
|
)
|
Consolidated Balance Sheet
|
2018
|
||||||||
|
As Reported
|
Adjustments
|
As Adjusted
|
||||||
Inventories, net
|
$
|
296.8
|
|
$
|
77.7
|
|
$
|
374.5
|
|
Retained deficit (1)
|
(269.2
|
)
|
77.7
|
|
(191.5
|
)
|
Consolidated Statement of Cash Flows
|
|
2018
|
|
2017
|
||||||||||||||||
|
|
As Reported
|
Adjustments
|
As Adjusted
|
|
As Reported
|
Adjustments
|
As Adjusted
|
||||||||||||
Net income (loss)
|
|
$
|
(31.7
|
)
|
$
|
21.7
|
|
$
|
(10.0
|
)
|
|
$
|
(43.8
|
)
|
$
|
12.5
|
|
$
|
(31.3
|
)
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
||||||||||||
Inventories, net
|
|
(72.8
|
)
|
(21.7
|
)
|
(94.5
|
)
|
|
(59.8
|
)
|
(12.5
|
)
|
(72.3
|
)
|
Standards Adopted
|
Description
|
ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting
|
The standard provides an expanded scope of Topic 718, to include share-based payment transactions for acquiring goods and services from nonemployees.
|
ASU 2018-02, Reporting Comprehensive Income: Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income
|
The standard permits entities to reclassify tax effects stranded in accumulated other comprehensive income as a result of tax reform to retained earnings.
|
ASU 2017-11, Distinguishing Liabilities from Equity; Derivatives and Hedging
|
The standard eliminates the requirement to consider “down round” features when determining whether certain equity-linked financial instruments or embedded features are indexed to an entity’s own stock.
|
•
|
A package of practical expedients to not reassess:
|
◦
|
Whether a contract is or contains a lease
|
◦
|
Lease classification
|
◦
|
Initial direct costs
|
•
|
A practical expedient to not reassess certain land easements
|
Standard Pending Adoption
|
Description
|
Effective Date
|
Anticipated Impact
|
ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40)
|
The standard aligns the requirements for capitalizing implementation costs in cloud computing software arrangements with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software.
|
January 1, 2020
|
The Company evaluated the impact of the adoption of this ASU on its results of operations and financial condition and determined that the impact is immaterial.
|
ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20)
|
The standard eliminates, modifies and adds disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans.
|
January 1, 2021
|
The Company is currently evaluating the impact of the adoption of this ASU on its results of operations and financial condition.
|
ASU 2018-13, Fair Value Measurement (Topic 820)
|
The standard eliminates, modifies and adds disclosure requirements for fair value measurements.
|
January 1, 2020
|
The Company evaluated the impact of the adoption of this ASU on its results of operations and financial condition and determined that the impact is immaterial.
|
ASU 2016-13, Measurement of Credit Losses on Financial Instruments
|
The standard changes how entities will measure credit losses for most financial assets, including trade and other receivables and replaces the current incurred loss approach with an expected loss model.
|
January 1, 2020
|
The Company evaluated the impact of the adoption of this ASU on its results of operations and financial condition and determined that the impact is immaterial.
|
ASU 2019-12, Income Taxes (Topic 740)
|
The standard simplifies the accounting for income taxes by removing various exceptions.
|
January 1, 2021
|
The Company is currently evaluating the impact of the adoption of this ASU on its results of operations and financial condition.
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Mobile
|
|
$479.3
|
|
|
|
$553.9
|
|
|
|
$528.6
|
|
Industrial
|
486.3
|
|
|
637.5
|
|
|
486.4
|
|
|||
Energy
|
166.4
|
|
|
265.6
|
|
|
141.7
|
|
|||
Other(1)
|
76.8
|
|
|
153.6
|
|
|
172.5
|
|
|||
Total Net Sales
|
|
$1,208.8
|
|
|
|
$1,610.6
|
|
|
|
$1,329.2
|
|
Balance at December 31, 2018
|
|
$—
|
|
Expenses (1)
|
8.6
|
|
|
Payments
|
(2.6
|
)
|
|
Balance at December 31, 2019
|
|
$6.0
|
|
•
|
Restructuring charges of approximately $0.7 million, primarily related to severance and other employee termination charges;
|
•
|
Inventory write-downs of $4.8 million, which represents the difference between the expected selling price and carrying value of the related inventory. The expected selling price was based upon the Company’s most recently published price lists related to this inventory;
|
•
|
Accelerated depreciation and amortization on TMS assets of $2.8 million in the fourth quarter of 2019, with an additional $1.6 million of accelerated depreciation to be recorded in the first quarter of 2020. Accelerated depreciation was recorded to reduce the carrying value of the assets to expected liquidation value at the end of the phase-down period in the first quarter of 2020. The liquidation value was based on initial broker estimates of fair value obtained in conjunction with the plan to close this facility.
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Pension and postretirement non-service benefit income
|
|
$17.5
|
|
|
|
$25.2
|
|
|
|
$17.5
|
|
Loss from remeasurement of benefit plans
|
(40.6
|
)
|
|
(43.5
|
)
|
|
(21.8
|
)
|
|||
Foreign currency exchange gain (loss)
|
—
|
|
|
(0.2
|
)
|
|
0.3
|
|
|||
Miscellaneous income (expense)
|
(0.2
|
)
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|||
Total other income (expense), net
|
|
($23.3
|
)
|
|
|
($18.6
|
)
|
|
|
($4.1
|
)
|
|
Years Ended December 31,
|
||||||||||
|
2019
|
|
2018 ADJUSTED
|
|
2017 ADJUSTED
|
||||||
United States
|
|
($130.8
|
)
|
|
|
($10.1
|
)
|
|
|
($37.0
|
)
|
Non-United States
|
4.7
|
|
|
1.9
|
|
|
7.2
|
|
|||
Loss from operations before income taxes
|
|
($126.1
|
)
|
|
|
($8.2
|
)
|
|
|
($29.8
|
)
|
|
Years Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
|
$—
|
|
|
|
$—
|
|
|
|
$1.1
|
|
State and local
|
0.1
|
|
|
0.3
|
|
|
0.1
|
|
|||
Foreign
|
0.4
|
|
|
0.7
|
|
|
0.6
|
|
|||
Total current tax expense (benefit)
|
|
$0.5
|
|
|
|
$1.0
|
|
|
|
$1.8
|
|
Deferred:
|
|
|
|
|
|
||||||
Federal
|
|
($14.4
|
)
|
|
|
$0.4
|
|
|
|
($0.4
|
)
|
State and local
|
(2.0
|
)
|
|
—
|
|
|
—
|
|
|||
Foreign
|
(0.2
|
)
|
|
0.4
|
|
|
0.1
|
|
|||
Total deferred tax expense (benefit)
|
(16.6
|
)
|
|
0.8
|
|
|
(0.3
|
)
|
|||
Provision (benefit) for incomes taxes
|
|
($16.1
|
)
|
|
|
$1.8
|
|
|
|
$1.5
|
|
|
Years Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Tax at the U.S. federal statutory rate
|
|
($26.5
|
)
|
|
|
($6.3
|
)
|
|
|
($14.8
|
)
|
Adjustments:
|
|
|
|
|
|
||||||
State and local income taxes, net of federal tax benefit
|
(1.3
|
)
|
|
(0.5
|
)
|
|
(0.7
|
)
|
|||
Foreign earnings taxed at different rates
|
—
|
|
|
0.2
|
|
|
(0.2
|
)
|
|||
U.S. research tax credit
|
0.2
|
|
|
(0.2
|
)
|
|
(0.2
|
)
|
|||
Valuation allowance
|
10.2
|
|
|
7.5
|
|
|
6.3
|
|
|||
Global intangible low-taxed income
|
0.2
|
|
|
0.5
|
|
|
—
|
|
|||
Tax reform impact - transition tax and rate change
|
—
|
|
|
—
|
|
|
10.2
|
|
|||
Permanent differences
|
1.3
|
|
|
0.8
|
|
|
0.3
|
|
|||
Other items, net
|
(0.2
|
)
|
|
(0.2
|
)
|
|
0.6
|
|
|||
Provision (benefit) for income taxes
|
|
($16.1
|
)
|
|
|
$1.8
|
|
|
|
$1.5
|
|
Effective tax rate
|
12.8
|
%
|
|
(5.9
|
)%
|
|
(3.7
|
)%
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
|
|
|
||||
Deferred tax liabilities:
|
|
|
|
||||
Depreciation
|
|
($98.6
|
)
|
|
|
($101.4
|
)
|
Inventory
|
(24.3
|
)
|
|
(9.9
|
)
|
||
Convertible debt
|
(1.7
|
)
|
|
(2.6
|
)
|
||
Lease liability
|
(3.4
|
)
|
|
—
|
|
||
Other, net
|
(0.7
|
)
|
|
(0.7
|
)
|
||
Deferred tax liabilities
|
|
($128.7
|
)
|
|
|
($114.6
|
)
|
|
|
|
|
||||
Deferred tax assets:
|
|
|
|
||||
Pension and postretirement benefits
|
|
$47.9
|
|
|
|
$55.2
|
|
Other employee benefit accruals
|
7.2
|
|
|
7.1
|
|
||
Tax loss carryforwards
|
86.0
|
|
|
82.0
|
|
||
Intangible assets
|
1.1
|
|
|
1.1
|
|
||
Inventory
|
5.4
|
|
|
1.2
|
|
||
State decoupling
|
4.5
|
|
|
5.1
|
|
||
Leases - right-of-use asset
|
3.4
|
|
|
—
|
|
||
Interest limitation
|
6.0
|
|
|
3.2
|
|
||
Other, net
|
1.2
|
|
|
2.6
|
|
||
Deferred tax assets subtotal
|
|
$162.7
|
|
|
|
$157.5
|
|
Valuation allowances
|
(34.9
|
)
|
|
(43.7
|
)
|
||
Deferred tax assets
|
127.8
|
|
|
113.8
|
|
||
Net deferred tax assets (liabilities)
|
|
($0.9
|
)
|
|
|
($0.8
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018 ADJUSTED
|
|
2017 ADJUSTED
|
||||||
Numerator:
|
|
|
|
|
|
||||||
Net income (loss)
|
|
($110.0
|
)
|
|
|
($10.0
|
)
|
|
|
($31.3
|
)
|
|
|
|
|
|
|
||||||
Denominator:
|
|
|
|
|
|
||||||
Weighted average shares outstanding, basic
|
44.8
|
|
|
44.6
|
|
|
44.4
|
|
|||
Weighted average shares outstanding, diluted
|
44.8
|
|
|
44.6
|
|
|
44.4
|
|
|||
|
|
|
|
|
|
||||||
Basic earnings (loss) per share
|
|
($2.46
|
)
|
|
|
($0.22
|
)
|
|
|
($0.70
|
)
|
Diluted earnings (loss) per share
|
|
($2.46
|
)
|
|
|
($0.22
|
)
|
|
|
($0.70
|
)
|
|
December 31,
|
||||||
|
2019
|
|
2018 ADJUSTED
|
||||
Manufacturing supplies
|
|
$49.8
|
|
|
|
$46.9
|
|
Raw materials
|
26.0
|
|
|
35.2
|
|
||
Work in process
|
123.7
|
|
|
155.7
|
|
||
Finished products
|
93.1
|
|
|
142.8
|
|
||
Gross inventory
|
292.6
|
|
|
380.6
|
|
||
Allowance for inventory reserves
|
(10.7
|
)
|
|
(6.1
|
)
|
||
Total inventories, net
|
|
$281.9
|
|
|
|
$374.5
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Land
|
|
$13.3
|
|
|
|
$14.1
|
|
Buildings and improvements
|
419.0
|
|
|
424.4
|
|
||
Machinery and equipment
|
1,404.6
|
|
|
1,404.2
|
|
||
Construction in progress
|
30.9
|
|
|
28.5
|
|
||
Subtotal
|
1,867.8
|
|
|
1,871.2
|
|
||
Less allowances for depreciation
|
(1,241.4
|
)
|
|
(1,196.8
|
)
|
||
Property, plant and equipment, net
|
|
$626.4
|
|
|
|
$674.4
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
||||||||||||
Customer relationships
|
|
$6.3
|
|
|
|
$5.0
|
|
|
|
$1.3
|
|
|
|
$6.3
|
|
|
|
$4.6
|
|
|
|
$1.7
|
|
Technology use
|
9.0
|
|
|
8.0
|
|
|
1.0
|
|
|
9.0
|
|
|
6.5
|
|
|
2.5
|
|
||||||
Capitalized software
|
61.1
|
|
|
49.1
|
|
|
12.0
|
|
|
61.6
|
|
|
48.0
|
|
|
13.6
|
|
||||||
Total intangible assets
|
|
$76.4
|
|
|
|
$62.1
|
|
|
|
$14.3
|
|
|
|
$76.9
|
|
|
|
$59.1
|
|
|
|
$17.8
|
|
|
Year Ended December 31, 2019
|
||
Cash paid for amounts included in the measurement of operating lease liabilities
|
|
$7.5
|
|
Right-of-use assets obtained in exchange for operating lease obligations
|
|
$4.3
|
|
2020
|
|
$6.8
|
|
2021
|
4.6
|
|
|
2022
|
2.2
|
|
|
2023
|
1.3
|
|
|
After 2023
|
0.5
|
|
|
Total future minimum lease payments
|
15.4
|
|
|
Less amount of lease payment representing interest
|
(1.0
|
)
|
|
Total present value of lease payments
|
|
$14.4
|
|
2019
|
|
$6.3
|
|
2020
|
5.2
|
|
|
2021
|
3.3
|
|
|
2022
|
1.0
|
|
|
2023
|
0.6
|
|
|
After 2023
|
—
|
|
|
Total future minimum lease payments
|
|
$16.4
|
|
|
Year Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
Principal
|
|
$86.3
|
|
|
|
$86.3
|
|
Less: Debt issuance costs, net of amortization
|
(0.7
|
)
|
|
(1.2
|
)
|
||
Less: Debt discount, net of amortization
|
(7.0
|
)
|
|
(11.0
|
)
|
||
Convertible notes, net
|
|
$78.6
|
|
|
|
$74.1
|
|
|
Year Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
Contractual interest expense
|
|
$5.2
|
|
|
|
$5.2
|
|
Amortization of debt issuance costs
|
0.4
|
|
|
0.4
|
|
||
Amortization of debt discount
|
4.0
|
|
|
3.6
|
|
||
Total
|
|
$9.6
|
|
|
|
$9.2
|
|
|
Pension
|
|
Postretirement
|
||||||||||
Change in benefit obligation:
|
2019
|
2018
|
|
2019
|
2018
|
||||||||
Benefit obligation at the beginning of year
|
|
$1,178.3
|
|
|
$1,282.1
|
|
|
|
$194.7
|
|
|
$216.2
|
|
Service cost
|
17.4
|
|
17.2
|
|
|
1.1
|
|
1.6
|
|
||||
Interest cost
|
48.9
|
|
45.6
|
|
|
5.9
|
|
7.6
|
|
||||
Actuarial (gains) losses
|
145.7
|
|
(70.4
|
)
|
|
11.4
|
|
(11.7
|
)
|
||||
Benefits paid
|
(72.3
|
)
|
(92.4
|
)
|
|
(14.4
|
)
|
(19.0
|
)
|
||||
Plan amendment
|
(0.7
|
)
|
0.5
|
|
|
(72.5
|
)
|
—
|
|
||||
Curtailments
|
(8.9
|
)
|
—
|
|
|
—
|
|
—
|
|
||||
Foreign currency translation adjustment
|
3.0
|
|
(4.3
|
)
|
|
—
|
|
—
|
|
||||
Benefit obligation at the end of year
|
|
$1,311.4
|
|
|
$1,178.3
|
|
|
|
$126.2
|
|
|
$194.7
|
|
|
Pension
|
|
Postretirement
|
||||||||||
Change in plan assets:
|
2019
|
2018
|
|
2019
|
2018
|
||||||||
Fair value of plan assets at the beginning of year
|
|
$1,054.4
|
|
|
$1,186.6
|
|
|
|
$86.1
|
|
|
$104.0
|
|
Actual return on plan assets
|
167.7
|
|
(45.5
|
)
|
|
8.9
|
|
(1.3
|
)
|
||||
Company contributions / payments
|
2.0
|
|
10.6
|
|
|
1.7
|
|
2.4
|
|
||||
Benefits paid
|
(72.3
|
)
|
(92.4
|
)
|
|
(14.4
|
)
|
(19.0
|
)
|
||||
Foreign currency translation adjustment
|
3.6
|
|
(4.9
|
)
|
|
—
|
|
—
|
|
||||
Fair value of plan assets at end of year
|
|
$1,155.4
|
|
|
$1,054.4
|
|
|
|
$82.3
|
|
|
$86.1
|
|
Funded status at end of year
|
|
($156.0
|
)
|
|
($123.9
|
)
|
|
|
($43.9
|
)
|
|
($108.6
|
)
|
|
Pension
|
|
Postretirement
|
||||||||||
|
2019
|
2018
|
|
2019
|
2018
|
||||||||
Non-current assets
|
|
$25.2
|
|
|
$10.5
|
|
|
|
$—
|
|
|
$—
|
|
Current liabilities
|
(0.6
|
)
|
(0.6
|
)
|
|
(2.4
|
)
|
(2.4
|
)
|
||||
Non-current liabilities
|
(180.6
|
)
|
(133.8
|
)
|
|
(41.5
|
)
|
(106.2
|
)
|
||||
Total
|
|
($156.0
|
)
|
|
($123.9
|
)
|
|
|
($43.9
|
)
|
|
($108.6
|
)
|
|
Pension
|
|
Postretirement
|
||||||||||
|
2019
|
2018
|
|
2019
|
2018
|
||||||||
Unrecognized prior service (benefit) cost
|
|
$0.5
|
|
|
$1.6
|
|
|
|
($67.8
|
)
|
|
$0.9
|
|
|
Pension
|
|
Postretirement
|
||||
Prior service (benefit) cost
|
|
$0.3
|
|
|
|
($6.0
|
)
|
|
Pension
|
|
Postretirement
|
||||||
Assumptions:
|
2019
|
2018
|
|
2019
|
2018
|
||||
Discount rate
|
3.42
|
%
|
4.30
|
%
|
|
3.42
|
%
|
4.34
|
%
|
Future compensation assumption
|
2.32
|
%
|
2.36
|
%
|
|
n/a
|
|
n/a
|
|
|
Pension
|
|
Postretirement
|
||||||||||||||||||||
|
Years Ended December 31,
|
|
Years Ended December 31,
|
||||||||||||||||||||
Components of net periodic benefit cost (income):
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||
Service cost
|
|
$17.4
|
|
|
|
$17.2
|
|
|
|
$18.2
|
|
|
|
$1.1
|
|
|
|
$1.6
|
|
|
|
$1.6
|
|
Interest cost
|
48.9
|
|
|
45.6
|
|
|
49.1
|
|
|
5.9
|
|
|
7.6
|
|
|
|
$8.4
|
|
|||||
Expected return on plan assets
|
(65.0
|
)
|
|
(74.0
|
)
|
|
(70.7
|
)
|
|
(3.9
|
)
|
|
(4.8
|
)
|
|
(5.2
|
)
|
||||||
Amortization of prior service cost
|
0.4
|
|
|
0.5
|
|
|
0.5
|
|
|
(3.8
|
)
|
|
0.2
|
|
|
1.0
|
|
||||||
Curtailment
|
(8.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net remeasurement losses (gains)
|
43.1
|
|
|
49.1
|
|
|
12.5
|
|
|
6.4
|
|
|
(5.6
|
)
|
|
9.3
|
|
||||||
Net Periodic Benefit Cost (Income)
|
|
$35.9
|
|
|
|
$38.4
|
|
|
|
$9.6
|
|
|
|
$5.7
|
|
|
|
($1.0
|
)
|
|
|
$15.1
|
|
Level 1 -
|
Unadjusted quoted prices in active markets for identical assets or liabilities.
|
Level 2 -
|
Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability.
|
Level 3 -
|
Unobservable inputs for the asset or liability.
|
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||
Assets:
|
|
|
|
|
||||||||
Cash and cash equivalents
|
|
$12.2
|
|
|
$0.9
|
|
|
$11.3
|
|
|
$—
|
|
U.S government and agency securities
|
250.3
|
|
246.1
|
|
4.2
|
|
—
|
|
||||
Corporate bonds
|
102.7
|
|
—
|
|
102.7
|
|
—
|
|
||||
Equity securities
|
49.8
|
|
49.8
|
|
—
|
|
—
|
|
||||
Mutual fund - fixed income
|
56.4
|
|
56.4
|
|
—
|
|
—
|
|
||||
Total Assets in the fair value hierarchy
|
|
$471.4
|
|
|
$353.2
|
|
|
$118.2
|
|
|
$—
|
|
Assets measured at net asset value (1)
|
684.0
|
|
—
|
|
—
|
|
—
|
|
||||
Total Assets
|
|
$1,155.4
|
|
|
$353.2
|
|
|
$118.2
|
|
|
$—
|
|
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||
Assets:
|
|
|
|
|
||||||||
Cash and cash equivalents
|
|
$22.5
|
|
|
$0.6
|
|
|
$21.9
|
|
|
$—
|
|
U.S government and agency securities
|
234.2
|
|
229.1
|
|
5.1
|
|
—
|
|
||||
Corporate bonds
|
97.4
|
|
—
|
|
97.4
|
|
—
|
|
||||
Equity securities
|
37.1
|
|
37.1
|
|
—
|
|
—
|
|
||||
Mutual fund - fixed income
|
33.1
|
|
33.1
|
|
—
|
|
—
|
|
||||
Mutual fund - real estate
|
7.7
|
|
7.7
|
|
—
|
|
—
|
|
||||
Total Assets in the fair value hierarchy
|
|
$432.0
|
|
|
$307.6
|
|
|
$124.4
|
|
|
$—
|
|
Assets measured at net asset value (1)
|
622.4
|
|
—
|
|
—
|
|
—
|
|
||||
Total Assets
|
|
$1,054.4
|
|
|
$307.6
|
|
|
$124.4
|
|
|
$—
|
|
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||
Assets:
|
|
|
|
|
||||||||
Cash and cash equivalents
|
|
$3.0
|
|
|
$3.0
|
|
|
$—
|
|
|
$—
|
|
Mutual fund - fixed income
|
15.8
|
|
15.8
|
|
—
|
|
—
|
|
||||
Total Assets in the fair value hierarchy
|
|
$18.8
|
|
|
$18.8
|
|
|
$—
|
|
|
$—
|
|
Assets measured at net asset value (1)
|
63.5
|
|
—
|
|
—
|
|
—
|
|
||||
Total Assets
|
|
$82.3
|
|
|
$18.8
|
|
|
$—
|
|
|
$—
|
|
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||
Assets:
|
|
|
|
|
||||||||
Cash and cash equivalents
|
|
$5.6
|
|
|
$5.6
|
|
|
$—
|
|
|
$—
|
|
Mutual fund - fixed income
|
8.9
|
|
8.9
|
|
—
|
|
—
|
|
||||
Total Assets in the fair value hierarchy
|
|
$14.5
|
|
|
$14.5
|
|
|
$—
|
|
|
$—
|
|
Assets measured at net asset value (1)
|
71.6
|
|
—
|
|
—
|
|
—
|
|
||||
Total Assets
|
|
$86.1
|
|
|
$14.5
|
|
|
$—
|
|
|
$—
|
|
Benefit Payments:
|
Pension
|
|
Postretirement
|
||||
2020
|
|
$78.8
|
|
|
|
$11.9
|
|
2021
|
79.2
|
|
|
11.0
|
|
||
2022
|
85.6
|
|
|
10.3
|
|
||
2023
|
76.5
|
|
|
9.6
|
|
||
2024
|
76.0
|
|
|
9.0
|
|
||
2025-2029
|
374.3
|
|
|
39.3
|
|
•
|
Vested and unvested stock options were adjusted so that the grantee holds options to purchase both The Timken Company and TimkenSteel common shares.
|
•
|
The adjustment to The Timken Company and TimkenSteel stock options, when combined, were intended to generally preserve the intrinsic value of each original option grant and the ratio of the exercise price to the fair market value of The Timken Company common shares on June 30, 2014.
|
•
|
Unvested restricted stock awards were replaced with adjusted, substitute awards for restricted shares or units, as applicable, of The Timken Company and TimkenSteel common shares. The new awards of restricted stock were intended to generally preserve the intrinsic value of the original award determined as of June 30, 2014.
|
•
|
Vesting periods of awards were unaffected by the adjustment and substitution.
|
|
Number of Shares
|
Weighted Average Exercise Price
|
Weighted Average Remaining Contractual Term
|
Aggregate Intrinsic Value (millions)
|
|||
Outstanding as of December 31, 2018
|
2,532,669
|
|
|
$21.33
|
|
|
|
Granted
|
329,720
|
|
|
$12.45
|
|
|
|
Exercised
|
(25,039
|
)
|
|
$8.83
|
|
|
|
Canceled, forfeited or expired
|
(195,780
|
)
|
|
$17.33
|
|
|
|
Outstanding as of December 31, 2019
|
2,641,570
|
|
|
$20.64
|
|
5.27
|
$0.2
|
Options expected to vest
|
403,774
|
|
|
$13.43
|
|
8.30
|
$—
|
Options exercisable
|
2,237,796
|
|
|
$21.94
|
|
4.73
|
$0.2
|
|
Number of Shares
|
Weighted Average Grant Date Fair Value
|
|||
Outstanding as of December 31, 2018
|
817,884
|
|
|
$14.15
|
|
Granted
|
833,220
|
|
|
$9.86
|
|
Vested
|
(365,800
|
)
|
|
$10.23
|
|
Canceled, forfeited or expired
|
(111,635
|
)
|
|
$13.79
|
|
Outstanding as of December 31, 2019
|
1,173,669
|
|
|
$11.94
|
|
|
Foreign Currency Translation Adjustments
|
|
Pension and Postretirement Liability Adjustments
|
|
Total
|
||||||
Balance as of December 31, 2018
|
|
($7.3
|
)
|
|
|
($1.6
|
)
|
|
|
($8.9
|
)
|
Other comprehensive income before reclassifications, before income tax
|
0.5
|
|
|
—
|
|
|
0.5
|
|
|||
Amounts reclassified from accumulated other comprehensive income (loss), before income tax
|
—
|
|
|
(2.4
|
)
|
|
(2.4
|
)
|
|||
Amounts deferred to accumulated other comprehensive income (loss), before income tax
|
—
|
|
|
72.2
|
|
|
72.2
|
|
|||
Tax effect
|
—
|
|
|
(16.7
|
)
|
|
(16.7
|
)
|
|||
Net current period other comprehensive income, net of income taxes
|
0.5
|
|
|
53.1
|
|
|
53.6
|
|
|||
Balance as of December 31, 2019
|
|
($6.8
|
)
|
|
|
$51.5
|
|
|
|
$44.7
|
|
|
|
|
|
|
|
||||||
|
Foreign Currency Translation Adjustments
|
|
Pension and Postretirement Liability Adjustments
|
|
Total
|
||||||
Balance at December 31, 2017
|
|
($5.9
|
)
|
|
|
($1.7
|
)
|
|
|
($7.6
|
)
|
Other comprehensive income before reclassifications, before income tax
|
(1.4
|
)
|
|
(0.5
|
)
|
|
(1.9
|
)
|
|||
Amounts reclassified from accumulated other comprehensive loss, before income tax
|
—
|
|
|
0.7
|
|
|
0.7
|
|
|||
Tax effect
|
—
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|||
Net current period other comprehensive income, net of income taxes
|
(1.4
|
)
|
|
0.1
|
|
|
(1.3
|
)
|
|||
Balance as of December 31, 2018
|
|
($7.3
|
)
|
|
|
($1.6
|
)
|
|
|
($8.9
|
)
|
|
Quarters ended
|
||||||||||||
|
December 31, 2019
|
|
September 30. 2019
|
||||||||||
|
|
|
As Reported
|
Adjustments
|
As Adjusted
|
||||||||
|
|
|
|
|
|
||||||||
Net sales
|
|
$226.9
|
|
|
|
$274.2
|
|
|
$—
|
|
|
$274.2
|
|
Gross profit
|
(18.0
|
)
|
|
13.2
|
|
(15.8
|
)
|
(2.6
|
)
|
||||
Net income (loss)
|
(84.6
|
)
|
|
(4.6
|
)
|
(12.4
|
)
|
(17.0
|
)
|
||||
Per share data:
|
|
|
|
|
|
|
|||||||
Basic earnings (loss) per share
|
|
($1.89
|
)
|
|
|
($0.10
|
)
|
|
($0.28
|
)
|
|
($0.38
|
)
|
Diluted earnings (loss) per share
|
|
($1.89
|
)
|
|
|
($0.10
|
)
|
|
($0.28
|
)
|
|
($0.38
|
)
|
|
Quarters ended
|
||||||||||||||||||
|
June 30, 2019
|
|
March 31, 2019
|
||||||||||||||||
|
As Reported
|
Adjustments
|
As Adjusted
|
|
As Reported
|
Adjustments
|
As Adjusted
|
||||||||||||
|
|
|
|
|
|
|
|
||||||||||||
Net sales
|
|
$336.7
|
|
|
$—
|
|
|
$336.7
|
|
|
|
$371.0
|
|
|
$—
|
|
|
$371.0
|
|
Gross profit
|
25.4
|
|
(10.6
|
)
|
14.8
|
|
|
29.1
|
|
(0.7
|
)
|
28.4
|
|
||||||
Net income (loss)
|
(4.4
|
)
|
(7.5
|
)
|
(11.9
|
)
|
|
4.2
|
|
(0.7
|
)
|
3.5
|
|
||||||
Per share data:
|
|
|
|
|
|
|
|
||||||||||||
Basic earnings (loss) per share
|
|
($0.10
|
)
|
|
($0.17
|
)
|
|
($0.27
|
)
|
|
|
$0.09
|
|
|
($0.01
|
)
|
|
$0.08
|
|
Diluted earnings (loss) per share
|
|
($0.10
|
)
|
|
($0.17
|
)
|
|
($0.27
|
)
|
|
|
$0.09
|
|
|
($0.01
|
)
|
|
$0.08
|
|
|
Quarters ended
|
||||||||||||||||||
|
December 31, 2018
|
|
September 30, 2018
|
||||||||||||||||
|
As Reported
|
Adjustments
|
As Adjusted
|
|
As Reported
|
Adjustments
|
As Adjusted
|
||||||||||||
|
|
|
|
|
|
|
|
||||||||||||
Net sales
|
|
$406.4
|
|
|
$—
|
|
|
$406.4
|
|
|
|
$409.9
|
|
|
$—
|
|
|
$409.9
|
|
Gross profit
|
27.1
|
|
10.2
|
|
37.3
|
|
|
24.6
|
|
3.8
|
|
28.4
|
|
||||||
Net income (loss)
|
(39.6
|
)
|
10.2
|
|
(29.4
|
)
|
|
1.4
|
|
3.8
|
|
5.2
|
|
||||||
Per share data:
|
|
|
|
|
|
|
|
||||||||||||
Basic earnings (loss) per share
|
|
($0.89
|
)
|
|
$0.23
|
|
|
($0.66
|
)
|
|
|
$0.03
|
|
|
$0.09
|
|
|
$0.12
|
|
Diluted earnings (loss) per share
|
|
($0.89
|
)
|
|
$0.23
|
|
|
($0.66
|
)
|
|
|
$0.03
|
|
|
$0.09
|
|
|
$0.12
|
|
|
Quarters ended
|
||||||||||||||||||
|
June 30, 2018
|
|
March 31, 2018
|
||||||||||||||||
|
As Reported
|
Adjustments
|
As Adjusted
|
|
As Reported
|
Adjustments
|
As Adjusted
|
||||||||||||
|
|
|
|
|
|
|
|
||||||||||||
Net sales
|
|
$413.5
|
|
|
$—
|
|
|
$413.5
|
|
|
|
$380.8
|
|
|
$—
|
|
|
$380.8
|
|
Gross profit
|
32.1
|
|
6.4
|
|
38.5
|
|
|
21.1
|
|
1.3
|
|
22.4
|
|
||||||
Net income (loss)
|
8.4
|
|
6.4
|
|
14.8
|
|
|
(1.9
|
)
|
1.3
|
|
(0.6
|
)
|
||||||
Per share data:
|
|
|
|
|
|
|
|
||||||||||||
Basic earnings (loss) per share
|
|
$0.19
|
|
|
$0.14
|
|
|
$0.33
|
|
|
|
($0.04
|
)
|
|
$0.03
|
|
|
($0.01
|
)
|
Diluted earnings (loss) per share
|
|
$0.19
|
|
|
$0.14
|
|
|
$0.33
|
|
|
|
($0.04
|
)
|
|
$0.03
|
|
|
($0.01
|
)
|
Exhibit Number
|
|
|
Exhibit Description
|
2.1†
|
|
|
|
3.1
|
|
|
|
3.2
|
|
|
|
4.1
|
|
|
|
4.2
|
|
|
|
4.3*
|
|
|
|
10.1†
|
|
|
|
10.2†
|
|
|
|
10.3
|
|
|
|
10.4†
|
|
|
|
10.5
|
|
|
|
10.6
|
|
|
|
10.7
|
|
|
|
10.8
|
|
|
|
10.9††
|
|
|
|
10.10††
|
|
|
|
10.11††
|
|
|
|
10.12
|
|
|
|
10.13
|
|
|
|
10.14
|
|
|
Allowance for uncollectible accounts:
|
2019
|
2018
|
2017
|
||||||
Balance at Beginning of Period
|
|
$1.7
|
|
|
$1.4
|
|
|
$2.1
|
|
Additions:
|
|
|
|
||||||
Charged to Costs and Expenses (1)
|
—
|
|
0.3
|
|
—
|
|
|||
Deductions (2)
|
(0.2
|
)
|
—
|
|
(0.7
|
)
|
|||
Balance at End of Period
|
|
$1.5
|
|
|
$1.7
|
|
|
$1.4
|
|
|
|
|
|
||||||
Allowance for inventory reserves
|
2019
|
2018
Adjusted(8)
|
2017
Adjusted(8) |
||||||
Balance at Beginning of Period
|
|
$6.1
|
|
|
$8.9
|
|
|
$8.1
|
|
Additions:
|
|
|
|
||||||
Charged to Costs and Expenses (3)
|
9.0
|
|
1.6
|
|
2.1
|
|
|||
Deductions (4)
|
(4.4
|
)
|
(4.4
|
)
|
(1.3
|
)
|
|||
Balance at End of Period
|
|
$10.7
|
|
|
$6.1
|
|
|
$8.9
|
|
|
|
|
|
||||||
Valuation allowance on deferred tax assets:
|
2019
|
2018
|
2017
|
||||||
Balance at Beginning of Period
|
|
$43.7
|
|
|
$36.6
|
|
|
$24.4
|
|
Additions:
|
|
|
|
||||||
Charged to Costs and Expenses (5)
|
—
|
|
7.1
|
|
12.2
|
|
|||
Charged to Other Accounts (6)
|
16.7
|
|
—
|
|
—
|
|
|||
Deductions (7)
|
(25.5
|
)
|
—
|
|
—
|
|
|||
Balance at End of Period
|
|
$34.9
|
|
|
$43.7
|
|
|
$36.6
|
|
(1)
|
Provision for uncollectible accounts included in expenses.
|
(2)
|
Actual accounts written off against the allowance, net of recoveries.
|
(3)
|
Provisions for surplus and obsolete inventory and lower cost or net realizable value included in expenses.
|
(4)
|
Inventory items written off against the allowance.
|
(5)
|
Increase in valuation allowance is recorded as a component of the provision for income taxes.
|
(6)
|
Includes valuation allowances recorded against other comprehensive income/loss.
|
(7)
|
Amount primarily relates to the change in accounting principle from LIFO to FIFO and a net benefit recorded as a component of income tax.
|
(8)
|
As described on Note 1 - Basis of Presentation, the effects of the change in accounting principle from LIFO to FIFO have been retrospectively applied to all periods presented.
|
|
|
TIMKENSTEEL CORPORATION
|
|
|
|
|
|
|
Date:
|
February 25, 2020
|
/s/ Kristopher R. Westbrooks
|
|
|
Kristopher R. Westbrooks
Executive Vice President and Chief Financial Officer (Principal Financial Officer) |
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Terry L. Dunlap
|
|
Interim Chief Executive Officer and President
(Principal Executive Officer) |
|
February 25, 2020
|
Terry L. Dunlap
|
|
|
|
|
|
|
|
|
|
/s/ Kristopher R. Westbrooks
|
|
Executive Vice President and Chief Financial Officer
(Principal Financial Officer) |
|
February 25, 2020
|
Kristopher R. Westbrooks
|
|
|
|
|
|
|
|
|
|
/s/ Nicholas A. Yacobozzi
|
|
Corporate Controller
(Principal Accounting Officer)
|
|
February 25, 2020
|
Nicholas A. Yacobozzi
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
February 25, 2020
|
Joseph A. Carrabba
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
February 25, 2020
|
Leila L. Vespoli
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
February 25, 2020
|
Diane C. Creel
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
February 25, 2020
|
Randall H. Edwards
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
February 25, 2020
|
Donald T. Misheff
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
February 25, 2020
|
John P. Reilly
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
February 25, 2020
|
Ronald A. Rice
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
February 25, 2020
|
Marvin A. Riley
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
February 25, 2020
|
Randall A. Wotring
|
|
|
|
|
|
|
|
|
|
*Signed by the undersigned as attorney-in-fact and agent for the directors indicated.
|
|
|
|
|
|
|
|
|
|
/s/ Kristopher R. Westbrooks
|
|
Executive Vice President and Chief Financial Officer
(Principal Financial Officer) |
|
February 25, 2020
|
Kristopher R. Westbrooks
|
|
|
|
|
Name
|
|
State or sovereign power under laws of which organized
|
|
Percentage of voting securities owned directly or indirectly by Company
|
United States
|
|
|
|
|
EDC, Inc.
|
|
Ohio
|
|
100.0%
|
TimkenSteel Material Services, LLC
|
|
Delaware
|
|
100.0%
|
TSB Metal Recycling LLC
|
|
Ohio
|
|
100.0%
|
|
|
|
|
|
International
|
|
|
|
|
TimkenSteel UK Limited
|
|
England
|
|
100.0%
|
TimkenSteel de Mexico S. de R.L. de C.V.
|
|
Mexico
|
|
100.0%
|
TimkenSteel (Shanghai) Corporation Limited
|
|
China
|
|
100.0%
|
(1)
|
Registration Statement (Form S-8 No. 333-214297) pertaining to the TimkenSteel Corporation Amended and Restated 2014 Equity and Incentive Compensation Plan;
|
(2)
|
Registration Statement (Form S-8 No. 333-197076) pertaining to the TimkenSteel Corporation Savings Plan for Certain Bargaining Employees;
|
(3)
|
Registration Statement (Form S-8 No. 333-197077) pertaining to the TimkenSteel Corporation Savings and Investment Pension Plan;
|
(4)
|
Registration Statement (Form S-8 No. 333-197078) pertaining to the TimkenSteel Corporation 2014 Equity and Incentive Compensation Plan;
|
(5)
|
Registration Statement (Form S-8 No. 333-197079) pertaining to the TimkenSteel Corporation Voluntary Investment Pension Plan;
|
(6)
|
Registration Statement (Form S-3 No. 333-208930) of TimkenSteel Corporation; and
|
(7)
|
Registration Statement (Form S-3 No. 333-216781) pertaining to the TimkenSteel Corporation Amended and Restated 2014 Equity and Incentive Compensation Plan;
|
/s/ Ernst & Young LLP
|
|
Cleveland, Ohio
|
February 25, 2020
|
|
||
|
|
|
|
/s/ Joseph A. Carrabba
|
|
|
Joseph A. Carrabba, Director
|
|
|
Dated: February 12, 2020
|
|
|
||
|
|
|
|
/s/ Leila L. Vespoli
|
|
|
Leila L. Vespoli, Director
|
|
|
Dated: February 12, 2020
|
|
|
||
|
|
|
|
/s/ Diane C. Creel
|
|
|
Diane C. Creel, Director
|
|
|
Dated: February 12, 2020
|
|
|
||
|
|
|
|
/s/ Randall H. Edwards
|
|
|
Randall H. Edwards, Director
|
|
|
Dated: February 12, 2020
|
|
|
||
|
|
|
|
/s/ Donald T. Misheff
|
|
|
Donald T. Misheff, Director
|
|
|
Dated: February 12, 2020
|
|
|
||
|
|
|
|
/s/ John P. Reilly
|
|
|
John P. Reilly, Director
|
|
|
Dated: February 12, 2020
|
|
|
||
|
|
|
|
/s/ Ronald A. Rice
|
|
|
Ronald A. Rice, Director
|
|
|
Dated: February 12, 2020
|
|
|
||
|
|
|
|
/s/ Marvin A. Riley
|
|
|
Marvin A. Riley, Director
|
|
|
Dated: February 12, 2020
|
|
|
||
|
|
|
|
/s/ Randall A. Wotring
|
|
|
Randall A. Wotring, Director
|
|
|
Dated: February 12, 2020
|
|
1.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
2.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
3.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
4.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
February 25, 2020
|
/s/ Terry L. Dunlap
|
|
|
Terry L. Dunlap
Interim Chief Executive Officer and President
(Principal Executive Officer)
|
1.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
2.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
3.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
4.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
February 25, 2020
|
/s/ Kristopher R. Westbrooks
|
|
|
Kristopher R. Westbrooks
Executive Vice President and Chief Financial Officer (Principal Financial Officer) |
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.
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Date:
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February 25, 2020
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/s/ Terry L. Dunlap
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|
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Terry L. Dunlap
Interim Chief Executive Officer and President
(Principal Executive Officer)
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Date:
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February 25, 2020
|
/s/ Kristopher R. Westbrooks
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|
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Kristopher R. Westbrooks
Executive Vice President and Chief Financial Officer (Principal Financial Officer) |