Cover Document
Cover Document | 3 Months Ended |
Mar. 31, 2021shares | |
Cover [Abstract] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Mar. 31, 2021 |
Document Transition Report | false |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2021 |
Document Fiscal Period Focus | Q1 |
Entity Central Index Key | 0000098362 |
Amendment Flag | false |
Entity File Number | 1-1169 |
Entity Registrant Name | TIMKEN CO |
Entity Incorporation, State or Country Code | OH |
Entity Tax Identification Number | 34-0577130 |
Entity Address, Address Line One | 4500 Mount Pleasant Street NW |
Entity Address, City or Town | North Canton |
Entity Address, State or Province | OH |
Entity Address, Postal Zip Code | 44720-5450 |
City Area Code | 234 |
Local Phone Number | 262.3000 |
Title of 12(b) Security | Common Shares, without par value |
Trading Symbol | TKR |
Security Exchange Name | NYSE |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 75,983,473 |
Consolidated Statements of Inco
Consolidated Statements of Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Statement [Abstract] | ||
Net sales | $ 1,025.4 | $ 923.4 |
Cost of products sold | 726.2 | 644.5 |
Gross Profit | 299.2 | 278.9 |
Selling, general and administrative expenses | 144.5 | 153.6 |
Impairment and restructuring charges | 4 | 3.6 |
Operating Income | 150.7 | 121.7 |
Interest expense | (14.9) | (17.1) |
Interest income | 0.5 | 1.5 |
Non-service pension and other postretirement income | 4 | 3.4 |
Other income, net | 1 | 4.1 |
Income Before Income Taxes | 141.3 | 113.6 |
Provision for income taxes | 25.3 | 29.6 |
Net Income | 116 | 84 |
Less: Net income attributable to noncontrolling interest | 2.7 | 3.3 |
Net Income Attributable to The Timken Company | $ 113.3 | $ 80.7 |
Net Income per Common Share Attributable to The Timken Company Common Shareholders | ||
Basic earnings per share (in dollars per share) | $ 1.49 | $ 1.07 |
Diluted earnings per share (in dollars per share) | $ 1.47 | $ 1.06 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Net Income | $ 116 | $ 84 |
Other comprehensive income, net of tax: | ||
Foreign currency translation adjustments | (44.4) | (78.8) |
Pension and postretirement liability adjustments | (1.6) | (1.3) |
Change in fair value of marketable securities | (0.4) | |
Change in fair value of derivative financial instruments, net of reclassifications | 2.2 | 4.2 |
Other comprehensive loss, net of tax | (43.8) | (76.3) |
Comprehensive Income, net of tax | 72.2 | 7.7 |
Less: comprehensive income (loss) attributable to noncontrolling interest | 2.3 | (4.2) |
Comprehensive Income Attributable to The Timken Company | $ 69.9 | $ 11.9 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Current Assets | ||
Cash and cash equivalents | $ 302.3 | $ 320.3 |
Restricted cash | 0.8 | 0.8 |
Accounts receivable, less allowances (2021 – $16.8 million; 2020 – $16.5 million) | 712.3 | 581.1 |
Unbilled receivables | 113.3 | 110.9 |
Inventories, net | 864.8 | 841.3 |
Deferred charges and prepaid expenses | 40.3 | 39.9 |
Other current assets | 109.8 | 106 |
Total Current Assets | 2,143.6 | 2,000.3 |
Property, Plant and Equipment, net | 1,020.6 | 1,035.6 |
Other Assets | ||
Goodwill | 1,028.4 | 1,047.6 |
Other intangible assets | 712.6 | 741.4 |
Operating lease assets | 113.1 | 118.2 |
Non-current pension assets | 0.1 | 2 |
Deferred income taxes | 69.8 | 77 |
Other non-current assets | 18 | 19.5 |
Total Other Assets | 1,942 | 2,005.7 |
Assets, Total | 5,106.2 | 5,041.6 |
Current Liabilities | ||
Short-term debt | 167.5 | 119.8 |
Current portion of long-term debt | 10.8 | 10.9 |
Short-term operating lease liabilities | 26.2 | 27.2 |
Accounts payable, trade | 362.6 | 351.4 |
Salaries, wages and benefits | 120.2 | 135.7 |
Income taxes payable | 24.9 | 16.1 |
Other current liabilities | 204.6 | 186.9 |
Total Current Liabilities | 916.8 | 848 |
Non-Current Liabilities | ||
Long-term debt | 1,423.7 | 1,433.9 |
Accrued pension benefits | 157.4 | 163 |
Accrued postretirement benefits | 52.1 | 41.3 |
Long-term operating lease liabilities | 70.9 | 75.5 |
Deferred income taxes | 138.3 | 148.7 |
Other non-current liabilities | 96.9 | 106 |
Total Non-Current Liabilities | 1,939.3 | 1,968.4 |
Shareholders' Equity | ||
Class I and II Serial Preferred Stock, without par value: Authorized – 10,000,000 shares each class, none issued | 0 | 0 |
Stated capital | 40.7 | 40.7 |
Other paid-in capital | 761.3 | 740.7 |
Retained earnings | 1,429 | 1,339.5 |
Accumulated other comprehensive (loss) income | (2.1) | 41.3 |
Treasury shares at cost (2021 – 746,378 shares; 2020 – 158,836 shares) | 53.4 | 9.3 |
Total Shareholders’ Equity | 2,175.5 | 2,152.9 |
Noncontrolling Interest | 74.6 | 72.3 |
Total Equity | 2,250.1 | 2,225.2 |
Total Liabilities and Equity | $ 5,106.2 | $ 5,041.6 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Allowances for accounts receivable | $ 16.8 | $ 16.5 |
Company common shares shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common shares, shares issued (in shares) | 76,729,850 | 75,834,668 |
Treasury shares (in shares) | 746,378 | 158,836 |
Preferred Class A | ||
Preferred stock, shares authorized (Class I & Class II Preferred stock) (in shares) | 10,000,000 | 10,000,000 |
Preferred Class B | ||
Preferred stock, shares authorized (Class I & Class II Preferred stock) (in shares) | 10,000,000 | 10,000,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Operating Activities | ||
Net Income | $ 116 | $ 84 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 43 | 42.3 |
Impairment charges | 3.4 | 0.1 |
Loss on sale of assets | 0.3 | 1.2 |
Deferred income tax benefit | (2) | (5.1) |
Stock-based compensation expense | 6.5 | 5.6 |
Pension and other postretirement income | (1) | (0.3) |
Pension and other postretirement benefit contributions and payments | 2.5 | 5.5 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (138.9) | (47.6) |
Unbilled receivables | (2.5) | (8.3) |
Inventories | (33.3) | 0.3 |
Accounts payable, trade | 19.9 | 0 |
Other accrued expenses | 17 | (34.3) |
Income taxes | 3.6 | 12.5 |
Other, net | 2.8 | 11.3 |
Net Cash Provided by Operating Activities | 31.7 | 56.2 |
Investing Activities | ||
Capital expenditures | (29.4) | (31.8) |
Other | (0.1) | 0 |
Net Cash Used in Investing Activities | (39.4) | (31.6) |
Financing Activities | ||
Cash dividends paid to shareholders | (23.8) | (22.9) |
Purchase of treasury shares | (26.3) | (42.3) |
Proceeds from exercise of stock options | 14.1 | 7.5 |
Payments related to tax withholding for stock-based compensation | (17.8) | (10.2) |
Accounts receivable facility borrowings | 66.1 | 10 |
Accounts receivable facility payments | (24.1) | (10) |
Proceeds from long-term debt | 70 | 200 |
Payments on long-term debt | (73.4) | (37.9) |
Short-term debt activity, net | 8.8 | 72.3 |
Net Cash (Used in) Provided by Financing Activities | (6.4) | 166.5 |
Effect of exchange rate changes on cash | (3.9) | (13.3) |
(Decrease) Increase in Cash, Cash Equivalents and Restricted Cash | (18) | 177.8 |
Cash, cash equivalents and restricted cash at beginning of year | 321.1 | 216.2 |
Cash, Cash Equivalents and Restricted Cash at End of Period | 303.1 | 394 |
Payments for (Proceeds from) Investments | 9.9 | (0.2) |
Bargain purchase price gain | $ (0.6) | $ 0 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Note 1 - Basis of Presentation The accompanying Consolidated Financial Statements (unaudited) for The Timken Company (the "Company" or "Timken") have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and notes required by the accounting principles generally accepted in the United States ("U.S. GAAP") for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) and disclosures considered necessary for a fair presentation have been included. For further information, refer to the Consolidated Financial Statements and accompanying Notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Note 2 - Significant Accounting Policies The Company's significant accounting policies are detailed in " Note 1 - Significant Accounting Policies" of the Annual Report on Form 10-K for the year ended December 31, 2020. Recent Accounting Pronouncements: New Accounting Guidance Adopted: In December 2019, the Financial Accounting Standards Board ("FASB") issued ASU 2019-12, “Income Taxes (ASC 740) – Simplifying the Accounting for Income Taxes,” which is intended to reduce complexity in the accounting for income taxes while maintaining or improving the usefulness of information provided to financial statement users. The guidance amends certain existing provisions under ASC 740 to address a number of distinct items. This standard is effective for public companies in fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted, including adoption in any interim period for which financial statements have not yet been issued. The Company adopted ASU 2019-12 effective January 1, 2021, and the impact of the adoption was not material to the Company's results of operations and financial condition. New Accounting Guidance Issued and Not Yet Adopted: |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2021 | |
Business Combinations [Abstract] | |
Acquisitions | Note 3 - Acquisitions The Company completed one acquisition in 2020. On November 30, 2020, the Company completed the acquisition of the assets of Aurora Bearing Company ("Aurora"). With annual sales of approximately $30 million, Aurora serves a diverse range of industrial sectors, including aerospace and defense, racing, off-highway equipment and packing. Aurora is headquartered in Montgomery, Illinois. The total purchase price for this acquisition was $17.3 million, including a post-closing net working capital adjustment. Based on markets and customers served, results for Aurora are reported in both the Mobile Industries segment and the Process Industries segment. The following table presents the purchase price allocation at fair value, net of cash acquired, for the Aurora acquisition as of March 31, 2021: Initial Purchase Adjustments Purchase Assets: Accounts receivable, net $ 2.7 $ — $ 2.7 Inventories, net 16.4 — 16.4 Other current assets 0.1 0.2 0.3 Property, plant and equipment, net 10.9 — 10.9 Total assets acquired $ 30.1 $ 0.2 $ 30.3 Liabilities: Accounts payable, trade $ 0.8 $ — $ 0.8 Other current liabilities 0.9 (0.4) 0.5 Total liabilities assumed 1.7 (0.4) 1.3 Net assets acquired $ 28.4 $ 0.6 $ 29.0 |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Note 4 - Revenue The following table presents details deemed most relevant to the users of the financial statements about total revenue for the three months ended March 31, 2021 and 2020, respectively: Three Months Ended Three Months Ended March 31, 2021 March 31, 2020 Mobile Process Total Mobile Process Total United States $ 242.9 $ 186.2 $ 429.1 $ 238.2 $ 192.6 $ 430.8 Americas excluding United States 48.8 43.2 92.0 48.8 35.0 83.8 Europe / Middle East / Africa 127.1 127.2 254.3 108.7 115.6 224.3 China 34.4 124.3 158.7 21.8 81.0 102.8 Asia-Pacific excluding China 51.3 40.0 91.3 49.2 32.5 81.7 Net sales $ 504.5 $ 520.9 $ 1,025.4 $ 466.7 $ 456.7 $ 923.4 When reviewing revenue by sales channel, the Company separates net sales to original equipment manufacturers ("OEMs") from sales to distributors and end users. The following table presents the percent of revenue by sales channel for the three months ended March 31, 2021 and 2020, respectively: Three Months Ended Three Months Ended Revenue by sales channel March 31, 2021 March 31, 2020 Original equipment manufacturers 61% 59% Distribution/end users 39% 41% In addition to disaggregating revenue by segment, geography and by sales channel as shown above, the Company believes information about the timing of transfer of goods or services, type of customer and distinguishing service revenue from product sales is also relevant. During the three months ended March 31, 2021 and March 31, 2020, approximatel y 9% and 12%, respectively, of total net sales were recognized on an over-time basis because of the continuous transfer of control to the customer, with the remainder recognized as of a point in time. Approximately 4% and 5% of total net sales represented service revenue during each of the three months ended March 31, 2021 and March 31, 2020, respectively. Finally, the United States ("U.S.") government or its contractors represented approximately 7% and 8% of total net sales during the three months ended March 31, 2021 and March 31, 2020, respectively. Remaining Performance Obligations: Remaining performance obligations represent the transaction price of orders meeting the definition of a contract for which work has not been performed and excludes unexercised contract options. Performance obligations having a duration of more than one year are concentrated in contracts for certain products and services provided to the U.S. government or its contractors. The aggregate amount of the transaction price allocated to remaining performance obligations for such contracts with a duration of more than one year was approxim ately $388.5 million at March 31, 2021. Unbilled Receivables: The following table contains a rollforward of unbilled receivables for the three months ended March 31, 2021: March 31, 2021 Beginning balance, January 1 $ 110.9 Additional unbilled revenue recognized 91.3 Less: amounts billed to customers (88.9) Ending balance $ 113.3 There were no impairment losses recorded on unbilled receivables for the three months ended March 31, 2021. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment Information | Note 5 - Segment Information The primary measurement used by management to measure the financial performance of each segment is earnings before interest, taxes, depreciation and amortization ("EBITDA"). Three Months Ended 2021 2020 Net sales: Mobile Industries $ 504.5 $ 466.7 Process Industries 520.9 456.7 Net sales $ 1,025.4 $ 923.4 Segment EBITDA: Mobile Industries $ 79.6 $ 75.1 Process Industries 131.0 107.5 Total EBITDA, for reportable segments $ 210.6 $ 182.6 Unallocated corporate expense (11.6) (11.1) Corporate pension and other postretirement benefit related expense (1) (0.9) — Acquisition-related gain (2) 0.6 — Depreciation and amortization (43.0) (42.3) Interest expense (14.9) (17.1) Interest income 0.5 1.5 Income before income taxes $ 141.3 $ 113.6 (1) Corporate pension and other postretirement benefit related expense represents actuarial gains and (losses) that resulted from the remeasurement of pension and other postretirement plan assets and obligations as a result of changes in assumptions or experience. (2) The acquisition-related gain represents measurement period adjustments to the bargain purchase gain on the acquisition of Aurora, which closed on November 30, 2020. See Note 3 - Acquisitions for additional information. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 6 - Income Taxes The Company's provision for income taxes in interim periods is computed by applying the estimated annual effective tax rates to income or loss before income taxes for the period. In addition, non-recurring or discrete items are recorded during the period(s) in which they occur. Three Months Ended 2021 2020 Provision for income taxes $ 25.3 $ 29.6 Effective tax rate 17.9 % 26.1 % Income tax expense for the three months ended March 31, 2021 was calculated using forecasted multi-jurisdictional annual effective tax rates to determine a blended annual effective tax rate. The effective tax rate differs from the U.S. federal statutory rate of 21% primarily due to the release of accruals for uncertain tax positions from the settlement of the 2017 and 2018 U.S. federal tax years, and favorable U.S. permanent book-tax differences. This is partially offset by the projected mix of earnings in international jurisdictions with relatively higher tax rates. The effective tax rate of 17.9% for the three months ended March 31, 2021 w as lower than the rate for the three months ended March 31, 2020 primarily due to the release of accruals for uncertain tax positions and favorable U.S. permanent book-tax differences, including new elective Global Intangible Low Tax Income ("GILTI") high tax exemption rules. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 7 - Earnings Per Share The following table sets forth the reconciliation of the numerator and the denominator of basic earnings per share and diluted earnings per share for the three months ended March 31, 2021 and 2020, respectively: Three Months Ended 2021 2020 Numerator: Net income attributable to The Timken Company $ 113.3 $ 80.7 Less: undistributed earnings allocated to nonvested stock — — Net income available to common shareholders for basic and diluted earnings per share $ 113.3 $ 80.7 Denominator: Weighted average number of shares outstanding - basic 75,820,157 75,461,254 Effect of dilutive securities: Stock options and awards - based on the treasury stock method 1,444,484 847,302 Weighted average number of shares outstanding assuming dilution of stock options 77,264,641 76,308,556 Basic earnings per share $ 1.49 $ 1.07 Diluted earnings per share $ 1.47 $ 1.06 The exercise prices for certain stock options that the Company has awarded exceeded the average market price of the Company’s common shares during certain periods presented. Such stock options are antidilutive and were not included in the computation of diluted earnings per share. The antidilutive stock options outstanding during the three months ended March 31, 2021 and 2020 were zero and 1,367,821, respectively. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Inventories | Note 8 - Inventories The components of inventories at March 31, 2021 and December 31, 2020 were as follows: March 31, December 31, Manufacturing supplies $ 35.2 $ 34.8 Raw materials 107.3 99.5 Work in process 332.9 320.3 Finished products 444.4 441.2 Subtotal 919.8 895.8 Allowance for obsolete and surplus inventory (55.0) (54.5) Total Inventories, net $ 864.8 $ 841.3 Inventories are valued at net rea lizable value, with approximately 61% valued on the first-in, first-out ("FIFO") method and the remaining 39% v alued on the last-in, first-out ("LIFO") method. The majority of the Company's domestic inventories are valued on the LIFO method, and all the Company's international inventories are valued on the FIFO method. The LIFO reserve at March 31, 2021 and December 31, 2020 was $179.6 million and $172.1 million, respectively. An actual valuation of the inventory under the LIFO method can be made only at the end of each year based on the inventory levels and costs at that time. Accordingly, interim LIFO calculations must be based on management’s estimates of expected year-end inventory levels and costs. Because these calculations are subject to many factors beyond management’s control, annual results may differ from interim results as they are subject to the final year-end LIFO inventory valuation. |
Financing Arrangements
Financing Arrangements | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Financing Arrangements | Note 10 - Financing Arrangements Short-term debt at March 31, 2021 and December 31, 2020 was as follows: March 31, December 31, Variable-rate Accounts Receivable Facility with an interest rate of 0.96% at March 31, 2021 and of 0.96% at December 31, 2020 $ 100.0 $ 58.0 Borrowings under lines of credit for certain of the Company’s foreign subsidiaries with various banks with interest rates ranging fro m 0.50% to 1.75% a t March 31, 2021 and 0.24% to 1.75% at December 31, 2020 67.5 61.8 Short-term debt $ 167.5 $ 119.8 The Company has a $100 million Amended and Restated Asset Securitization Agreement (the "Accounts Receivable Facility"), which matures on November 30, 2021. The Company currently intends to renew or replace the Accounts Receivable Facility prior to its maturity. Under the terms of the Accounts Receivable Facility, the Company sells, on an ongoing basis, certain domestic trade receivables to Timken Receivables Corporation, a wholly-owned consolidated subsidiary that, in turn, uses the trade receivables to secure borrowings that are funded through a vehicle that issues commercial paper in the short-term market. Borrowings under the Accounts Receivable Facility may be limited to certain borrowing base limitations; however, availability under the Accounts Receivable Facility was not reduced by any such borrowing base limitations at March 31, 2021. As of March 31, 2021, there were outstanding borrowings of $100 million under the Accounts Receivable Facility, which reduced the availability under this facility to zero. A ll of the borrowings under the Accounts Receivable Facility were classified as short-term due to its upcoming maturity in November 2021. The cost of this facility, which is the prevailing commercial paper rate plus facility fees, is considered a financing cost and is included in interest expense in the Consolidated Statements of Income. The lines of credit for certain of the Company's foreign subsidiaries provide for short-term borrowings up to $270.6 million in the aggregate. Most of these lines of credit are uncommitted. At March 31, 2021, the Company’s foreign subsidiaries had borrowings outstanding of $67.5 million and bank guarantees of $0.5 million, which reduced the aggregate availability under these facilities to $202.6 million. Long-term debt at March 31, 2021 and December 31, 2020 was as follows: March 31, December 31, Variable-rate Senior Credit Facility with an average interest rate on U.S. Dollar of 1.43% and Euro of 1.48% at March 31, 2021 and U.S. Dollar of 2.01% and Euro of 1.48% at December 31, 2020 $ 9.3 $ 9.7 Variable-rate Term Loan (1) , maturing on September 11, 2023, with an interest rate of 1.63% at March 31, 2021 and 1.63% at December 31, 2020 327.5 329.6 Fixed-rate Senior Unsecured Notes (1) , maturing on September 1, 2024, with an interest rate of 3.875% 349.2 349.0 Fixed-rate Euro Senior Unsecured Notes (1) , maturing on September 7, 2027, with an interest rate of 2.02% 175.6 182.9 Fixed-rate Senior Unsecured Notes (1) , maturing on December 15, 2028, with an interest rate of 4.50% 396.6 396.5 Fixed-rate Medium-Term Notes, Series A (1) , maturing at various dates through May 2028, with interest rates ranging from 6.74% to 7.76% 154.7 154.7 Fixed-rate Bank Loan, maturing on June 30, 2033, with an interest rate of 2.15% 17.7 18.8 Other 3.9 3.6 1,434.5 1,444.8 Less: Current maturities 10.8 10.9 Long-term debt $ 1,423.7 $ 1,433.9 (1) Net of discounts and fees Note 10 - Financing Arrangements (continued) The Company entered into the Fourth Amended and Restated Credit Agreement ("Senior Credit Facility") on June 25, 2019. The Senior Credit Facility is a $650.0 million unsecured revolving credit facility, which matures on June 25, 2024. At March 31, 2021, the Co mpany had $9.3 million of outstanding borrowings under the Senior Credit Facility, which reduced the availability under this facility to $640.7 million . The Senior Credit Facility has two financial covenants: a consolidated leverage ratio and a consolidated interest coverage ratio. On May 27, 2020, the Senior Credit Facility was amended to, among other things, effectively increase the limit with respect to the consolidated leverage ratio. As amended, the consolidated leverage ratio is calculated using a net debt construct, netting unrestricted cash in excess of $25 million, instead of total debt. This change to the consolidated leverage ratio calculation is effective through June 30, 2021, after which the calculation of the consolidated leverage ratio under the Senior Credit Facility will revert back to using a total debt construct. On November 1, 2019, the Company assumed certain fixed-rate debt of €16 million associated with the BEKA Lubrication ("BEKA") acquisition that matures on June 30, 2033. On September 11, 2018, the Company entered into a $350 million variable-rate term loan that matures on September 11, 2023 (the "2023 Term Loan"). Proceeds from the 2023 Term Loan were used to fund the acquisitions of Apiary Investments Holding Limited and Rollon S.p.A., which closed on September 1, 2018 and September 18, 2018, respectively. On July 12, 2019, the Company amended the 2023 Term Loan agreement to, among other things, align covenants and other terms with the Senior Credit Facility. On May 27, 2020, the 2023 Term Loan agreement was further amended to align the calculation of the consolidated leverage ratio and other terms with the Senior Credit Facility. At March 31, 2021, the Company was in full compliance with all applicable covenants on its outstanding debt. In the ordinary course of business, the Company utilizes standby letters of credit issued by financial institutions to guarantee certain obligations, most of which relate to insurance contracts. At March 31, 2021, outstanding letters of credit tot aled $41.2 million, most with expiration dates within 12 months. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Note 9 - Goodwill and Other Intangible Assets The changes in the carrying amount of goodwill for the three months ended March 31, 2021 were as follows: Mobile Process Total Beginning balance $ 384.6 $ 663.0 $ 1,047.6 Foreign currency translation adjustments and other changes (8.1) (11.1) (19.2) Ending balance $ 376.5 $ 651.9 $ 1,028.4 The following table displays intangible assets as of March 31, 2021 and December 31, 2020: Balance at March 31, 2021 Balance at December 31, 2020 Gross Accumulated Net Gross Accumulated Net Intangible assets Customer relationships $ 523.6 $ (168.6) $ 355.0 $ 532.2 $ (161.9) $ 370.3 Technology and know-how 272.4 (75.3) 197.1 277.2 (72.0) 205.2 Trade names 14.2 (9.0) 5.2 14.2 (8.8) 5.4 Capitalized software 276.5 (256.1) 20.4 276.4 (254.6) 21.8 Other 4.6 (3.8) 0.8 4.7 (3.7) 1.0 $ 1,091.3 $ (512.8) $ 578.5 $ 1,104.7 $ (501.0) $ 603.7 Intangible assets not subject to amortization: Trade names $ 125.4 $ 125.4 $ 129.0 $ 129.0 FAA air agency certificates 8.7 8.7 8.7 8.7 $ 134.1 $ 134.1 $ 137.7 $ 137.7 Total intangible assets $ 1,225.4 $ (512.8) $ 712.6 $ 1,242.4 $ (501.0) $ 741.4 Amortization expense for intangible assets was $14.1 million and $14.2 million for the three months ended March 31, 2021 and 2020, respectively. Amortization expense for intangible assets is projected to be $55.7 million in 2021; $48.7 million in 2022; $45.6 million in 2023; $43.1 million in 2024; and $42.5 million in 2025. |
Contingencies
Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Note 11 - Contingencies The Company and certain of its subsidiaries have been identified as potentially responsible parties for investigation and remediation under the Comprehensive Environmental Response, Compensation and Liability Act, known as the Superfund, or similar state laws with respect to certain sites. Claims for investigation and remediation have been asserted against numerous other entities, which are believed to be financially solvent and are expected to fulfill their proportionate share of the obligation. On December 28, 2004, the United States Environmental Protection Agency (“USEPA”) sent Lovejoy, Inc. ("Lovejoy") a Special Notice Letter that identified Lovejoy as a potentially responsible party, together with at least 14 other companies, at the Ellsworth Industrial Park Site, Downers Grove, DuPage County, Illinois (the “Site”). The Company acquired Lovejoy in 2016. Lovejoy’s Downers Grove property is situated within the Ellsworth Industrial Complex. The USEPA and the Illinois Environmental Protection Agency (“IEPA”) allege there have been one or more releases or threatened releases of hazardous substances, allegedly including, but not limited to, a release or threatened release on or from Lovejoy's property, at the Site. The relief sought by the USEPA and IEPA includes further investigation and potential remediation of the Site and reimbursement of response costs. Lovejoy’s allocated share of past and future costs related to the Site, including for investigation and/or remediation, could be significant. All previously pending property damage and personal injury lawsuits against Lovejoy related to the Site were settled or dismissed prior to our acquisition of Lovejoy. The Company had total environmental accruals of $5.3 million for various known environmental matters that are probable and reasonably estimable at March 31, 2021 and December 31, 2020, respectively, which includes the Lovejoy matter discussed above. These accruals were recorded based upon the best estimate of costs to be incurred in light of the progress made in determining the magnitude of remediation costs, the timing and extent of remedial actions required by governmental authorities and the amount of the Company’s liability in proportion to other responsible parties. Product Warranties: In addition to the contingencies above, the Company provides limited warranties on certain of its products. The product warranty liability included in "Other current liabilities" on the Consolidated Balance Sheets was $10.2 million and $9.4 million at March 31, 2021 and December 31, 2020, respectively. The increase in the liability since year end primarily relates to accruals that are based on the best estimate of costs for future claims based on products sold that are still under warranty. The estimate of these accruals is based on historical claims and expected trends that continue to mature. Any significant change to these assumptions may be material to the results of operations in any particular period in which that change occurs. |
Equity
Equity | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Equity | Note 12 - Equity The following tables present the changes in the components of equity for the three months ended March 31, 2021 and 2020, respectively: The Timken Company Shareholders Total Stated Other Retained Earnings Accumulated Treasury Non Balance at December 31, 2020 $ 2,225.2 $ 40.7 $ 740.7 $ 1,339.5 $ 41.3 $ (9.3) $ 72.3 Net income 116.0 113.3 2.7 Foreign currency translation adjustment (44.4) (44.0) (0.4) Pension and other postretirement liability adjustments (net of income tax benefit of $0.6 million) (1.6) (1.6) Change in fair value of derivative financial 2.2 2.2 Dividends – $0.29 per share (23.8) (23.8) Stock-based compensation expense 6.5 6.5 Stock purchased at fair market value (26.3) (26.3) Stock option exercise activity 14.1 14.1 Payments related to tax withholding for (17.8) (17.8) Balance at March 31, 2021 $ 2,250.1 $ 40.7 $ 761.3 $ 1,429.0 $ (2.1) $ (53.4) $ 74.6 The Timken Company Shareholders Total Stated Other Earnings Accumulated Treasury Non Balance at December 31, 2019 $ 1,954.8 $ 53.1 $ 937.6 $ 1,907.4 $ (50.1) $ (979.8) $ 86.6 Cumulative effect of ASU 2016-13 (net of income tax benefit of $0.2 million) (0.4) (0.4) Net income 84.0 80.7 3.3 Foreign currency translation adjustment (78.8) (71.3) (7.5) Pension and other postretirement liability adjustments (net of income tax benefit of $0.5 million) (1.3) (1.3) Unrealized loss on marketable securities (0.4) (0.4) Change in fair value of derivative financial 4.2 4.2 Change in ownership of noncontrolling 0.5 0.5 Dividends – $0.28 per share (22.9) (22.9) Stock-based compensation expense 5.6 5.6 Stock purchased at fair market value (42.3) (42.3) Stock option exercise activity 7.5 (0.9) 8.4 Restricted share activity — (22.2) 22.2 Payments related to tax withholding for (10.2) (10.2) Balance at March 31, 2020 $ 1,900.3 $ 53.1 $ 920.1 $ 1,964.8 $ (118.9) $ (1,001.7) $ 82.9 |
Impairment and Restructuring Ch
Impairment and Restructuring Charges | 3 Months Ended |
Mar. 31, 2021 | |
Restructuring Charges [Abstract] | |
Impairment and Restructuring Charges | Note 13 - Impairment and Restructuring Charges Impairment and restructuring charges by segment are comprised of the following: For the three months ended March 31, 2021: Mobile Industries Process Industries Unallocated Corporate Total Impairment charges $ 0.1 $ 3.3 $ — $ 3.4 Severance and related benefit costs — 0.5 — 0.5 Exit costs 0.1 — — 0.1 Total $ 0.2 $ 3.8 $ — $ 4.0 For the three months ended March 31, 2020: Mobile Industries Process Industries Unallocated Corporate Total Impairment charges $ — $ 0.1 $ — $ 0.1 Severance and related benefit costs 0.1 2.5 0.1 2.7 Exit costs 0.6 0.2 — 0.8 Total $ 0.7 $ 2.8 $ 0.1 $ 3.6 The following discussion explains the impairment and restructuring charges recorded for the periods presented; however, it is not intended to reflect a comprehensive discussion of all amounts in the tables above. Mobile Industries: On October 16, 2019, the Company announced the reorganization of its bearing plant in Gaffney, South Carolina. The Company transferred its high-volume bearing production and roller production to other Timken manufacturing facilities in the U.S. The transfer of these operations was substantially completed by the end of the third quarter of 2020 and affected approximately 150 employees. The Company expected to incur approximately $8 million to $10 million of pretax costs in total related to this reorganization. During the three months ended March 31, 2020, the Company recognized exit costs of $0.6 million related to this reorganization. The Company incurred cumulative pretax costs related to this reorganization of $7.7 million as of March 31, 2021, including rationalization costs recorded in cost of products sold. Process Industries: On February 4, 2020, the Company announced the closure of its chain plant in Indianapolis, Indiana. This plant was part of the Diamond Chain Company ("Diamond Chain") acquisition completed on April 1, 2019. The Company will be transferring the manufacturing of its Diamond Chain product line to its chain facility in Fulton, Illinois. The chain plant is expected to close by the end of the fourth quarter of 2021 and is expected to affect approximately 240 employees. The Company expects to hire approximately 130 full-time positions in Fulton, Illinois and expects to incur approximately $10 million to $12 million of expenses related to this closure. During the three months ended March 31, 2021 and March 31, 2020, the Company recorded severance and related benefit costs of $0.3 million and $1.9 million, respectively, related to this closure. The Company has incurred cumulative pretax costs related to this closure of $7.3 million as of March 31, 2021, including rationalization costs recorded in cost of products sold. In addition, the Company recorded impairment charges of $3.3 million related to certain engineering-related assets used in the business during the three months ended March 31, 2021. Management concluded no further investment would be made in these assets and as a result, reduced the value to zero. Note 13 - Impairment and Restructuring Charges (continued) Consolid ated Restructuring Accrual: The following is a rollforward of the consolidated restructuring accrual for the three months ended March 31, 2021 and twelve months ended December 31, 2020: March 31, December 31, Beginning balance, January 1 $ 8.0 $ 2.7 Expense 0.6 20.8 Payments (1.2) (15.5) Ending balance $ 7.4 $ 8.0 The restructuring accrual at March 31, 2021 was included in other current liabilities on the Consolidated Balance Sheets. |
Retirement Benefit Plans
Retirement Benefit Plans | 3 Months Ended |
Mar. 31, 2021 | |
Pension Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Retirement Benefit Plans | Note 14 - Retirement Benefit Plans The following table sets forth the net periodic benefit cost for the Company’s defined benefit pension plans. The amounts for the three months ended March 31, 2021 are based on calculations prepared by the Company's actuaries and represent the Company’s best estimate of that period’s proportionate share of the amounts to be recorded for the year ending December 31, 2021. U.S. Plans International Plans Total Three Months Ended Three Months Ended Three Months Ended 2021 2020 2021 2020 2021 2020 Components of net periodic benefit Service cost $ 2.5 $ 2.7 $ 0.5 $ 0.4 $ 3.0 $ 3.1 Interest cost 4.4 5.2 1.1 1.5 5.5 6.7 Expected return on plan assets (6.1) (6.3) (2.5) (2.2) (8.6) (8.5) Amortization of prior service cost 0.3 0.4 — — 0.3 0.4 Recognition of net actuarial losses 0.9 — — — 0.9 — Net periodic benefit cost (credit) $ 2.0 $ 2.0 $ (0.9) $ (0.3) $ 1.1 $ 1.7 The Company currently expects to make lump sum payments to new retirees in 2021 in excess of annual interest and service costs for three of the Company's U.S. defined benefit pension plans as of March 31, 2021. This expectation triggered a remeasurement of assets and obligations for these plans. As a result of this remeasurement, the Company recognized net actuarial losses of $0.9 million during the three months ended March 31, 2021. |
Postretirement Benefit Plans
Postretirement Benefit Plans | 3 Months Ended |
Mar. 31, 2021 | |
Postretirement Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Other Postretirement Benefit Plans | Note 15 - Other Postretirement Benefit Plans The following table sets forth the net periodic benefit cost for the Company’s other postretirement benefit plans. The amounts for the three months ended March 31, 2021 are based on calculations prepared by the Company's actuaries and represent the Company’s best estimate of that period’s proportionate share of the amounts to be recorded for the year ending December 31, 2021. Three Months Ended 2021 2020 Components of net periodic benefit credit: Interest cost $ 0.4 $ 0.5 Expected return on plan assets — (0.1) Amortization of prior service credit (2.5) (2.4) Net periodic benefit credit $ (2.1) $ (2.0) In January 2021, the Company transferred the remaining $11.1 million in the existing Voluntary Employee Beneficiary Association ("VEBA") trust for certain retiree medical benefits to a second VEBA trust for the payment of certain active employees’ medical benefits. The Company utilized all of the assets in the second trust during the three months ended March 31, 2021. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Mar. 31, 2021 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | The following tables present details about components of accumulated other comprehensive income (loss) for the three months ended March 31, 2021 and 2020, respectively: Foreign currency translation adjustments Pension and other postretirement liability adjustments Unrealized gain (loss) on marketable securities Change in fair value of derivative financial instruments Total Balance at December 31, 2020 $ (18.0) $ 63.4 $ — $ (4.1) $ 41.3 Other comprehensive (loss) income before (44.4) — — 1.4 (43.0) Amounts reclassified from accumulated other — (2.2) — 1.7 (0.5) Income tax (expense) benefit — 0.6 — (0.9) (0.3) Net current period other comprehensive (44.4) (1.6) — 2.2 (43.8) Noncontrolling interest 0.4 — — — 0.4 Net current period comprehensive (loss) income, (44.0) (1.6) — 2.2 (43.4) Balance at March 31, 2021 $ (62.0) $ 61.8 $ — $ (1.9) $ (2.1) Foreign currency translation adjustments Pension and other postretirement liability adjustments Unrealized gain (loss) on marketable securities Change in fair value of derivative financial instruments Total Balance at December 31, 2019 $ (115.3) $ 66.9 $ — $ (1.7) $ (50.1) Other comprehensive (loss) income before (78.8) 0.2 (0.5) 6.4 (72.7) Amounts reclassified from accumulated other — (2.0) — (0.6) (2.6) Income tax (expense) benefit — 0.5 0.1 (1.6) (1.0) Net current period other comprehensive (78.8) (1.3) (0.4) 4.2 (76.3) Noncontrolling interest 7.5 — — — 7.5 Net current period comprehensive (loss) income, (71.3) (1.3) (0.4) 4.2 (68.8) Balance at March 31, 2020 $ (186.6) $ 65.6 $ (0.4) $ 2.5 $ (118.9) Other comprehensive income (loss) before reclassifications and income taxes includes the effect of foreign currency. |
Fair Value
Fair Value | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Note 17 - Fair Value Fair value is defined as the price that would be expected to be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The FASB provides accounting rules that classify the inputs used to measure fair value into the following hierarchy: 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. The following tables present the fair value hierarchy for those financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2021 and December 31, 2020: March 31, 2021 Total Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 302.3 $ 301.4 $ 0.9 $ — Restricted cash 0.8 0.8 — — Short-term investments 47.2 — 47.2 — Foreign currency forward contracts 1.1 — 1.1 — Total Assets $ 351.4 $ 302.2 $ 49.2 $ — Liabilities: Foreign currency forward contracts $ 2.0 $ — $ 2.0 $ — Total Liabilities $ 2.0 $ — $ 2.0 $ — December 31, 2020 Total Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 320.3 $ 318.6 $ 1.7 $ — Restricted cash 0.8 0.8 — — Short-term investments 37.6 — 37.6 — Foreign currency forward contracts 1.1 — 1.1 — Total Assets $ 359.8 $ 319.4 $ 40.4 $ — Liabilities: Foreign currency forward contracts $ 8.1 $ — $ 8.1 $ — Total Liabilities $ 8.1 $ — $ 8.1 $ — Cash and cash equivalents are highly liquid investments with maturities of three months or less when purchased and are valued at the redempti on value. Short-term investments are investments with maturities between four months and one year, and generally are valued at amortized cost, which approximates fair value. A portion of the cash and cash equivalents and short-term investments are valued based on net asset value. The Company uses publicly available foreign currency fo rward and spot rates to measure the fair value of its foreign currency forward contracts. In addition, the Company remeasures certain assets at fair value, using Level 3 inputs, as a result of the occurrence of triggering events such as purchase accounting for acquisitions. See Note 3 - Acquisitions for further discussion. No other material assets were measured at fair value on a nonrecurring basis during the three months ended March 31, 2021 and 2020, respectively. Note 17 - Fair Value (continued) Financial Instruments: The Company’s financial instruments consist primarily of cash and cash equivalents, short-term investments, accounts receivable, trade accounts payable, short-term borrowings and long-term debt. Due to their short-term nature, the carrying value of cash and cash equivalents, short-term investments, accounts receivable, trade accounts payable and short-term borrowings are a reasonable estimate of their fair value. Due to the nature of fair value calculati ons for variable-rate debt, the carrying value of the Company's long-term variable-rate debt is a reasonable estimate of its fair value. The fair value of the Company’s long-term fixed-rate debt, based on quoted market prices, was $1,184.0 million and $1,220.7 million at March 31, 2021 and December 31, 2020, respectively. The carrying value of this debt was $1,096.7 million and $1,103.2 million at March 31, 2021 and December 31, 2020, respectively. The fair value of long-term fixed-rate debt w as measured using Level 2 inputs. The Company does not believe it has significant concentrations of risk associated with the counterparties to its financial instruments. |
Derivatives Instruments and Hed
Derivatives Instruments and Hedging Activities | 3 Months Ended |
Mar. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | Note 18 - Derivative Instruments and Hedging Activities The Company is exposed to certain risks relating to its ongoing business operations. The primary risks managed by using derivative instruments are foreign currency exchange rate risk and interest rate risk. Forward contracts on various foreign currencies are entered into in order to manage the foreign currency exchange rate risk associated with certain of the Company's commitments denominated in foreign currencies. From time to time, interest rate swaps are used to manage interest rate risk associated with the Company’s fixed and floating-rate borrowings. The Company designates certain foreign currency forward contracts as cash flow hedges of forecasted revenues and certain interest rate hedges as cash flow hedges of fixed-rate borrowings. On September 8, 2020, the Company entered into a $100 million floating-to-fixed rate swap on the 2023 Term Loan, which hedges the change in the 1-month LIBOR rate between October 30, 2020 and September 11, 2023 to a fixed rate. The Company’s risk management objective is to hedge the risk of changes in the monthly interest expense attributable to changes in the benchmark interest rate. On September 15, 2020, the Company designated €54.5 million of its €150.0 million fixed-rate senior unsecured notes, maturing on September 7, 2027 (the "2027 Notes") as a hedge against its net investment in one of its European affiliates. The objective of the hedge transaction is to protect the net investment in the foreign operations against changes in the exchange rate between the US dollar and the Euro. The net impact for the three months ended March 31, 2021 was to record a gain of $2.6 million to accumulated comprehensive loss with a corresponding offset to other (expense) income, which partially offsets the impact of the foreign currency adjustment on the 2027 Notes. The Company does not purchase or hold any derivative financial instruments for trading purposes. As of March 31, 2021 and December 31, 2020, the Company had $122.0 million a nd $173.2 million, respectively, of outstanding foreign currency forward contracts at notional value. Refer to Note 17 - Fair Value for the fair value disclosure of derivative financial instruments. Cash Flow Hedging Strategy: For certain derivative instruments that are designated and qualify as cash flow hedges ( i.e ., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the gain or loss on the derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the same line item associated with the forecasted transaction and in the same period or periods during which the hedged transaction affects earnings. Note 18 - Derivative Instruments and Hedging Activities (continued) To protect against a reduction in the value of forecasted foreign currency cash flows resulting from export sales, the Company has instituted a foreign currency cash flow hedging program. The Company hedges portions of its forecasted cash flows denominated in foreign currencies with forward contracts. When the dollar strengthens significantly against foreign currencies, the decline in the present value of future foreign currency revenue is offset by gains in the fair value of the forward contracts designated as hedges. Co nversely, when the dollar weakens, the increase in the present value of future foreign currency cash flows is offset by losses in the fair value of the forward contracts. As of March 31, 2021 and December 31, 2020, the Company had $82.9 million and $86.9 million, respectively, of outstanding foreign currency forward contracts at notional value that were classified as cash flow hedges. The maximum length of time over which the Company hedges its exposure to the variability in future cash flows for forecast transactions is generally eighteen months or less. Purpose for Derivative Instruments not designated as Hedging Instruments: For derivative instruments that are not designated as hedging instruments, the instruments are typically forward contracts. In general, the practice is to reduce volatility by selectively hedging transaction exposures including intercompany loans, accounts payable and accounts receivable. Intercompany loans between entities with different functional currencies typically are hedged with a forward contract at the inception of the loan with a maturity date corresponding to the maturity of the loan. The revaluation of these contracts, as well as the revaluation of the underlying balance sheet items, is recorded directly to the income statement so the adjustment generally offsets the revaluation of the underlying balance sheet items to protect cash payments and reduce income statement volatility. As of March 31, 2021 and December 31, 2020 , the Comp any had $39.1 million and $86.2 million, respectively, of outstanding foreign currency forward contracts at notional value that were not designated as hedging instruments. The following table presents the impact of derivative instruments not designated as hedging instruments for the three months ended March 31, 2021 and 2020, respectively, and the related location within the Consolidated Statements of Income: Amount of gain recognized in income Three Months Ended Derivatives not designated as hedging instruments: Location of gain or (loss) recognized in income 2021 2020 Foreign currency forward contracts Other income (expense), net $ 0.2 $ 5.5 |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
New Accounting Pronouncements | New Accounting Guidance Adopted: In December 2019, the Financial Accounting Standards Board ("FASB") issued ASU 2019-12, “Income Taxes (ASC 740) – Simplifying the Accounting for Income Taxes,” which is intended to reduce complexity in the accounting for income taxes while maintaining or improving the usefulness of information provided to financial statement users. The guidance amends certain existing provisions under ASC 740 to address a number of distinct items. This standard is effective for public companies in fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted, including adoption in any interim period for which financial statements have not yet been issued. The Company adopted ASU 2019-12 effective January 1, 2021, and the impact of the adoption was not material to the Company's results of operations and financial condition. New Accounting Guidance Issued and Not Yet Adopted: |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table presents the purchase price allocation at fair value, net of cash acquired, for the Aurora acquisition as of March 31, 2021: Initial Purchase Adjustments Purchase Assets: Accounts receivable, net $ 2.7 $ — $ 2.7 Inventories, net 16.4 — 16.4 Other current assets 0.1 0.2 0.3 Property, plant and equipment, net 10.9 — 10.9 Total assets acquired $ 30.1 $ 0.2 $ 30.3 Liabilities: Accounts payable, trade $ 0.8 $ — $ 0.8 Other current liabilities 0.9 (0.4) 0.5 Total liabilities assumed 1.7 (0.4) 1.3 Net assets acquired $ 28.4 $ 0.6 $ 29.0 |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table presents details deemed most relevant to the users of the financial statements about total revenue for the three months ended March 31, 2021 and 2020, respectively: Three Months Ended Three Months Ended March 31, 2021 March 31, 2020 Mobile Process Total Mobile Process Total United States $ 242.9 $ 186.2 $ 429.1 $ 238.2 $ 192.6 $ 430.8 Americas excluding United States 48.8 43.2 92.0 48.8 35.0 83.8 Europe / Middle East / Africa 127.1 127.2 254.3 108.7 115.6 224.3 China 34.4 124.3 158.7 21.8 81.0 102.8 Asia-Pacific excluding China 51.3 40.0 91.3 49.2 32.5 81.7 Net sales $ 504.5 $ 520.9 $ 1,025.4 $ 466.7 $ 456.7 $ 923.4 When reviewing revenue by sales channel, the Company separates net sales to original equipment manufacturers ("OEMs") from sales to distributors and end users. The following table presents the percent of revenue by sales channel for the three months ended March 31, 2021 and 2020, respectively: Three Months Ended Three Months Ended Revenue by sales channel March 31, 2021 March 31, 2020 Original equipment manufacturers 61% 59% Distribution/end users 39% 41% |
Contract with Customer, Asset and Liability | The following table contains a rollforward of unbilled receivables for the three months ended March 31, 2021: March 31, 2021 Beginning balance, January 1 $ 110.9 Additional unbilled revenue recognized 91.3 Less: amounts billed to customers (88.9) Ending balance $ 113.3 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment wise financial performance | The primary measurement used by management to measure the financial performance of each segment is earnings before interest, taxes, depreciation and amortization ("EBITDA"). Three Months Ended 2021 2020 Net sales: Mobile Industries $ 504.5 $ 466.7 Process Industries 520.9 456.7 Net sales $ 1,025.4 $ 923.4 Segment EBITDA: Mobile Industries $ 79.6 $ 75.1 Process Industries 131.0 107.5 Total EBITDA, for reportable segments $ 210.6 $ 182.6 Unallocated corporate expense (11.6) (11.1) Corporate pension and other postretirement benefit related expense (1) (0.9) — Acquisition-related gain (2) 0.6 — Depreciation and amortization (43.0) (42.3) Interest expense (14.9) (17.1) Interest income 0.5 1.5 Income before income taxes $ 141.3 $ 113.6 (1) Corporate pension and other postretirement benefit related expense represents actuarial gains and (losses) that resulted from the remeasurement of pension and other postretirement plan assets and obligations as a result of changes in assumptions or experience. (2) The acquisition-related gain represents measurement period adjustments to the bargain purchase gain on the acquisition of Aurora, which closed on November 30, 2020. See Note 3 - Acquisitions for additional information. |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The Company's provision for income taxes in interim periods is computed by applying the estimated annual effective tax rates to income or loss before income taxes for the period. In addition, non-recurring or discrete items are recorded during the period(s) in which they occur. Three Months Ended 2021 2020 Provision for income taxes $ 25.3 $ 29.6 Effective tax rate 17.9 % 26.1 % |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Reconciliation of the numerator and the denominator of basic earnings per share and diluted earnings per share | The following table sets forth the reconciliation of the numerator and the denominator of basic earnings per share and diluted earnings per share for the three months ended March 31, 2021 and 2020, respectively: Three Months Ended 2021 2020 Numerator: Net income attributable to The Timken Company $ 113.3 $ 80.7 Less: undistributed earnings allocated to nonvested stock — — Net income available to common shareholders for basic and diluted earnings per share $ 113.3 $ 80.7 Denominator: Weighted average number of shares outstanding - basic 75,820,157 75,461,254 Effect of dilutive securities: Stock options and awards - based on the treasury stock method 1,444,484 847,302 Weighted average number of shares outstanding assuming dilution of stock options 77,264,641 76,308,556 Basic earnings per share $ 1.49 $ 1.07 Diluted earnings per share $ 1.47 $ 1.06 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Components of inventories | The components of inventories at March 31, 2021 and December 31, 2020 were as follows: March 31, December 31, Manufacturing supplies $ 35.2 $ 34.8 Raw materials 107.3 99.5 Work in process 332.9 320.3 Finished products 444.4 441.2 Subtotal 919.8 895.8 Allowance for obsolete and surplus inventory (55.0) (54.5) Total Inventories, net $ 864.8 $ 841.3 |
Financing Arrangements (Tables)
Financing Arrangements (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Short-term debt | Short-term debt at March 31, 2021 and December 31, 2020 was as follows: March 31, December 31, Variable-rate Accounts Receivable Facility with an interest rate of 0.96% at March 31, 2021 and of 0.96% at December 31, 2020 $ 100.0 $ 58.0 Borrowings under lines of credit for certain of the Company’s foreign subsidiaries with various banks with interest rates ranging fro m 0.50% to 1.75% a t March 31, 2021 and 0.24% to 1.75% at December 31, 2020 67.5 61.8 Short-term debt $ 167.5 $ 119.8 |
Long-term debt | Long-term debt at March 31, 2021 and December 31, 2020 was as follows: March 31, December 31, Variable-rate Senior Credit Facility with an average interest rate on U.S. Dollar of 1.43% and Euro of 1.48% at March 31, 2021 and U.S. Dollar of 2.01% and Euro of 1.48% at December 31, 2020 $ 9.3 $ 9.7 Variable-rate Term Loan (1) , maturing on September 11, 2023, with an interest rate of 1.63% at March 31, 2021 and 1.63% at December 31, 2020 327.5 329.6 Fixed-rate Senior Unsecured Notes (1) , maturing on September 1, 2024, with an interest rate of 3.875% 349.2 349.0 Fixed-rate Euro Senior Unsecured Notes (1) , maturing on September 7, 2027, with an interest rate of 2.02% 175.6 182.9 Fixed-rate Senior Unsecured Notes (1) , maturing on December 15, 2028, with an interest rate of 4.50% 396.6 396.5 Fixed-rate Medium-Term Notes, Series A (1) , maturing at various dates through May 2028, with interest rates ranging from 6.74% to 7.76% 154.7 154.7 Fixed-rate Bank Loan, maturing on June 30, 2033, with an interest rate of 2.15% 17.7 18.8 Other 3.9 3.6 1,434.5 1,444.8 Less: Current maturities 10.8 10.9 Long-term debt $ 1,423.7 $ 1,433.9 (1) Net of discounts and fees |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Change in the carrying amount of goodwill | The changes in the carrying amount of goodwill for the three months ended March 31, 2021 were as follows: Mobile Process Total Beginning balance $ 384.6 $ 663.0 $ 1,047.6 Foreign currency translation adjustments and other changes (8.1) (11.1) (19.2) Ending balance $ 376.5 $ 651.9 $ 1,028.4 |
Intangible assets | The following table displays intangible assets as of March 31, 2021 and December 31, 2020: Balance at March 31, 2021 Balance at December 31, 2020 Gross Accumulated Net Gross Accumulated Net Intangible assets Customer relationships $ 523.6 $ (168.6) $ 355.0 $ 532.2 $ (161.9) $ 370.3 Technology and know-how 272.4 (75.3) 197.1 277.2 (72.0) 205.2 Trade names 14.2 (9.0) 5.2 14.2 (8.8) 5.4 Capitalized software 276.5 (256.1) 20.4 276.4 (254.6) 21.8 Other 4.6 (3.8) 0.8 4.7 (3.7) 1.0 $ 1,091.3 $ (512.8) $ 578.5 $ 1,104.7 $ (501.0) $ 603.7 Intangible assets not subject to amortization: Trade names $ 125.4 $ 125.4 $ 129.0 $ 129.0 FAA air agency certificates 8.7 8.7 8.7 8.7 $ 134.1 $ 134.1 $ 137.7 $ 137.7 Total intangible assets $ 1,225.4 $ (512.8) $ 712.6 $ 1,242.4 $ (501.0) $ 741.4 |
Equity (Tables)
Equity (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Equity | The following tables present the changes in the components of equity for the three months ended March 31, 2021 and 2020, respectively: The Timken Company Shareholders Total Stated Other Retained Earnings Accumulated Treasury Non Balance at December 31, 2020 $ 2,225.2 $ 40.7 $ 740.7 $ 1,339.5 $ 41.3 $ (9.3) $ 72.3 Net income 116.0 113.3 2.7 Foreign currency translation adjustment (44.4) (44.0) (0.4) Pension and other postretirement liability adjustments (net of income tax benefit of $0.6 million) (1.6) (1.6) Change in fair value of derivative financial 2.2 2.2 Dividends – $0.29 per share (23.8) (23.8) Stock-based compensation expense 6.5 6.5 Stock purchased at fair market value (26.3) (26.3) Stock option exercise activity 14.1 14.1 Payments related to tax withholding for (17.8) (17.8) Balance at March 31, 2021 $ 2,250.1 $ 40.7 $ 761.3 $ 1,429.0 $ (2.1) $ (53.4) $ 74.6 The Timken Company Shareholders Total Stated Other Earnings Accumulated Treasury Non Balance at December 31, 2019 $ 1,954.8 $ 53.1 $ 937.6 $ 1,907.4 $ (50.1) $ (979.8) $ 86.6 Cumulative effect of ASU 2016-13 (net of income tax benefit of $0.2 million) (0.4) (0.4) Net income 84.0 80.7 3.3 Foreign currency translation adjustment (78.8) (71.3) (7.5) Pension and other postretirement liability adjustments (net of income tax benefit of $0.5 million) (1.3) (1.3) Unrealized loss on marketable securities (0.4) (0.4) Change in fair value of derivative financial 4.2 4.2 Change in ownership of noncontrolling 0.5 0.5 Dividends – $0.28 per share (22.9) (22.9) Stock-based compensation expense 5.6 5.6 Stock purchased at fair market value (42.3) (42.3) Stock option exercise activity 7.5 (0.9) 8.4 Restricted share activity — (22.2) 22.2 Payments related to tax withholding for (10.2) (10.2) Balance at March 31, 2020 $ 1,900.3 $ 53.1 $ 920.1 $ 1,964.8 $ (118.9) $ (1,001.7) $ 82.9 |
Impairment and Restructuring _2
Impairment and Restructuring Charges (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Restructuring Charges [Abstract] | |
Restructuring and Related Costs | For the three months ended March 31, 2021: Mobile Industries Process Industries Unallocated Corporate Total Impairment charges $ 0.1 $ 3.3 $ — $ 3.4 Severance and related benefit costs — 0.5 — 0.5 Exit costs 0.1 — — 0.1 Total $ 0.2 $ 3.8 $ — $ 4.0 For the three months ended March 31, 2020: Mobile Industries Process Industries Unallocated Corporate Total Impairment charges $ — $ 0.1 $ — $ 0.1 Severance and related benefit costs 0.1 2.5 0.1 2.7 Exit costs 0.6 0.2 — 0.8 Total $ 0.7 $ 2.8 $ 0.1 $ 3.6 The following is a rollforward of the consolidated restructuring accrual for the three months ended March 31, 2021 and twelve months ended December 31, 2020: March 31, December 31, Beginning balance, January 1 $ 8.0 $ 2.7 Expense 0.6 20.8 Payments (1.2) (15.5) Ending balance $ 7.4 $ 8.0 The restructuring accrual at March 31, 2021 was included in other current liabilities on the Consolidated Balance Sheets. |
Retirement Benefit Plans (Table
Retirement Benefit Plans (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Pension Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Net periodic benefit cost for the Company's retirement benefit plans | The following table sets forth the net periodic benefit cost for the Company’s defined benefit pension plans. The amounts for the three months ended March 31, 2021 are based on calculations prepared by the Company's actuaries and represent the Company’s best estimate of that period’s proportionate share of the amounts to be recorded for the year ending December 31, 2021. U.S. Plans International Plans Total Three Months Ended Three Months Ended Three Months Ended 2021 2020 2021 2020 2021 2020 Components of net periodic benefit Service cost $ 2.5 $ 2.7 $ 0.5 $ 0.4 $ 3.0 $ 3.1 Interest cost 4.4 5.2 1.1 1.5 5.5 6.7 Expected return on plan assets (6.1) (6.3) (2.5) (2.2) (8.6) (8.5) Amortization of prior service cost 0.3 0.4 — — 0.3 0.4 Recognition of net actuarial losses 0.9 — — — 0.9 — Net periodic benefit cost (credit) $ 2.0 $ 2.0 $ (0.9) $ (0.3) $ 1.1 $ 1.7 |
Postretirement Benefit Plans (T
Postretirement Benefit Plans (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Postretirement Plan | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Schedule of Defined Benefit Plans Disclosures | The following table sets forth the net periodic benefit cost for the Company’s other postretirement benefit plans. The amounts for the three months ended March 31, 2021 are based on calculations prepared by the Company's actuaries and represent the Company’s best estimate of that period’s proportionate share of the amounts to be recorded for the year ending December 31, 2021. Three Months Ended 2021 2020 Components of net periodic benefit credit: Interest cost $ 0.4 $ 0.5 Expected return on plan assets — (0.1) Amortization of prior service credit (2.5) (2.4) Net periodic benefit credit $ (2.1) $ (2.0) |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following tables present details about components of accumulated other comprehensive income (loss) for the three months ended March 31, 2021 and 2020, respectively: Foreign currency translation adjustments Pension and other postretirement liability adjustments Unrealized gain (loss) on marketable securities Change in fair value of derivative financial instruments Total Balance at December 31, 2020 $ (18.0) $ 63.4 $ — $ (4.1) $ 41.3 Other comprehensive (loss) income before (44.4) — — 1.4 (43.0) Amounts reclassified from accumulated other — (2.2) — 1.7 (0.5) Income tax (expense) benefit — 0.6 — (0.9) (0.3) Net current period other comprehensive (44.4) (1.6) — 2.2 (43.8) Noncontrolling interest 0.4 — — — 0.4 Net current period comprehensive (loss) income, (44.0) (1.6) — 2.2 (43.4) Balance at March 31, 2021 $ (62.0) $ 61.8 $ — $ (1.9) $ (2.1) Foreign currency translation adjustments Pension and other postretirement liability adjustments Unrealized gain (loss) on marketable securities Change in fair value of derivative financial instruments Total Balance at December 31, 2019 $ (115.3) $ 66.9 $ — $ (1.7) $ (50.1) Other comprehensive (loss) income before (78.8) 0.2 (0.5) 6.4 (72.7) Amounts reclassified from accumulated other — (2.0) — (0.6) (2.6) Income tax (expense) benefit — 0.5 0.1 (1.6) (1.0) Net current period other comprehensive (78.8) (1.3) (0.4) 4.2 (76.3) Noncontrolling interest 7.5 — — — 7.5 Net current period comprehensive (loss) income, (71.3) (1.3) (0.4) 4.2 (68.8) Balance at March 31, 2020 $ (186.6) $ 65.6 $ (0.4) $ 2.5 $ (118.9) |
Fair Value (Tables)
Fair Value (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Assets and liabilities measured at fair value on a recurring basis | The following tables present the fair value hierarchy for those financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2021 and December 31, 2020: March 31, 2021 Total Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 302.3 $ 301.4 $ 0.9 $ — Restricted cash 0.8 0.8 — — Short-term investments 47.2 — 47.2 — Foreign currency forward contracts 1.1 — 1.1 — Total Assets $ 351.4 $ 302.2 $ 49.2 $ — Liabilities: Foreign currency forward contracts $ 2.0 $ — $ 2.0 $ — Total Liabilities $ 2.0 $ — $ 2.0 $ — December 31, 2020 Total Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 320.3 $ 318.6 $ 1.7 $ — Restricted cash 0.8 0.8 — — Short-term investments 37.6 — 37.6 — Foreign currency forward contracts 1.1 — 1.1 — Total Assets $ 359.8 $ 319.4 $ 40.4 $ — Liabilities: Foreign currency forward contracts $ 8.1 $ — $ 8.1 $ — Total Liabilities $ 8.1 $ — $ 8.1 $ — |
Derivatives Instruments and H_2
Derivatives Instruments and Hedging Activities (Table) | 3 Months Ended |
Mar. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives Not Designated as Hedging Instruments | The following table presents the impact of derivative instruments not designated as hedging instruments for the three months ended March 31, 2021 and 2020, respectively, and the related location within the Consolidated Statements of Income: Amount of gain recognized in income Three Months Ended Derivatives not designated as hedging instruments: Location of gain or (loss) recognized in income 2021 2020 Foreign currency forward contracts Other income (expense), net $ 0.2 $ 5.5 |
Acquisitions (Details)
Acquisitions (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($)acquisition | |
Business Acquisition [Line Items] | |||
Bargain purchase price gain | $ 0.6 | $ 0 | |
Operating lease assets | 113.1 | $ 118.2 | |
Goodwill | 1,028.4 | 1,047.6 | |
Aurora | |||
Business Acquisition [Line Items] | |||
Revenue reported by acquired entity | $ 30 | ||
2020 Acquisitions | |||
Business Acquisition [Line Items] | |||
Number of acquisitions | acquisition | 1 | ||
Consideration transferred | $ 17.3 | ||
Bargain purchase price gain | 11.7 | ||
Accounts receivable, net | 2.7 | ||
Inventories, net | 16.4 | ||
Other current assets | 0.3 | ||
Property, plant and equipment, net | 10.9 | ||
Total assets acquired | 30.3 | ||
Accounts payable, trade | 0.8 | ||
Total liabilities assumed | 1.3 | ||
Net assets acquired | 29 | ||
2020 Acquisitions | Previously Reported | |||
Business Acquisition [Line Items] | |||
Accounts receivable, net | 2.7 | ||
Inventories, net | 16.4 | ||
Other current assets | 0.1 | ||
Property, plant and equipment, net | 10.9 | ||
Total assets acquired | 30.1 | ||
Accounts payable, trade | 0.8 | ||
Total liabilities assumed | 1.7 | ||
Net assets acquired | 28.4 | ||
2020 Acquisitions | Revision of Prior Period, Adjustment | |||
Business Acquisition [Line Items] | |||
Accounts receivable, net | 0 | ||
Inventories, net | 0 | ||
Other current assets | 0.2 | ||
Property, plant and equipment, net | 0 | ||
Total assets acquired | 0.2 | ||
Accounts payable, trade | 0 | ||
Total liabilities assumed | (0.4) | ||
Net assets acquired | 0.6 | ||
2020 Acquisitions | Other current liabilities | |||
Business Acquisition [Line Items] | |||
Other current liabilities | 0.5 | ||
2020 Acquisitions | Other current liabilities | Previously Reported | |||
Business Acquisition [Line Items] | |||
Other current liabilities | 0.9 | ||
2020 Acquisitions | Other current liabilities | Revision of Prior Period, Adjustment | |||
Business Acquisition [Line Items] | |||
Other current liabilities | $ (0.4) |
Revenue Disaggregation of Reven
Revenue Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 1,025.4 | $ 923.4 |
Amount of revenue for remaining performance obligations | 388.5 | |
Unbilled receivables | 110.9 | |
Additional unbilled revenue recognized | 91.3 | |
Less: amounts billed to customers | 88.9 | |
Unbilled receivables | $ 113.3 | |
U.S. Government | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk percentage | 7.00% | 8.00% |
Original equipment manufacturers | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk percentage | 61.00% | 59.00% |
Distribution/end users | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk percentage | 39.00% | 41.00% |
Transferred over Time | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk percentage | 9.00% | 12.00% |
United States | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 429.1 | $ 430.8 |
Americas excluding United States | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 92 | 83.8 |
Europe / Middle East / Africa | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 254.3 | 224.3 |
China | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 158.7 | 102.8 |
Asia-Pacific excluding China | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 91.3 | 81.7 |
Mobile Industries | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 504.5 | 466.7 |
Mobile Industries | United States | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 242.9 | 238.2 |
Mobile Industries | Americas excluding United States | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 48.8 | 48.8 |
Mobile Industries | Europe / Middle East / Africa | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 127.1 | 108.7 |
Mobile Industries | China | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 34.4 | 21.8 |
Mobile Industries | Asia-Pacific excluding China | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 51.3 | 49.2 |
Process Industries | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 520.9 | 456.7 |
Process Industries | United States | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 186.2 | 192.6 |
Process Industries | Americas excluding United States | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 43.2 | 35 |
Process Industries | Europe / Middle East / Africa | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 127.2 | 115.6 |
Process Industries | China | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 124.3 | 81 |
Process Industries | Asia-Pacific excluding China | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 40 | $ 32.5 |
Service Revenue | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk percentage | 4.00% | 5.00% |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Segment Reporting Information [Line Items] | ||
Net sales | $ 1,025.4 | $ 923.4 |
Segment EBIT: | ||
Segment EBITDA | 210.6 | 182.6 |
Recognition of net actuarial losses (gains) | (0.9) | 0 |
Depreciation and amortization | (43) | (42.3) |
Interest expense | (14.9) | (17.1) |
Interest income | 0.5 | 1.5 |
Income before income taxes | 141.3 | 113.6 |
Bargain purchase price gain | 0.6 | 0 |
Mobile Industries | ||
Segment Reporting Information [Line Items] | ||
Net sales | 504.5 | 466.7 |
Segment EBIT: | ||
Segment EBITDA | 79.6 | 75.1 |
Process Industries | ||
Segment Reporting Information [Line Items] | ||
Net sales | 520.9 | 456.7 |
Segment EBIT: | ||
Segment EBITDA | 131 | 107.5 |
Corporate Segment | ||
Segment EBIT: | ||
Corporate EBITDA | $ (11.6) | $ (11.1) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Provision for income taxes | $ 25.3 | $ 29.6 |
Effective tax rate | 17.90% | 26.10% |
Federal statutory rate, percent | 21.00% |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Numerator: | ||
Net income attributable to The Timken Company | $ 113.3 | $ 80.7 |
Less: undistributed earnings allocated to nonvested stock | 0 | 0 |
Net income available to common shareholders for basic and diluted earnings per share | $ 113.3 | $ 80.7 |
Denominator: | ||
Weighted-average number of shares outstanding - basic (in shares) | 75,820,157 | 75,461,254 |
Stock options and awards - based on the treasury stock method (in shares) | 1,444,484 | 847,302 |
Weighted-average number of shares outstanding, assuming dilution of stock options and awards (in shares) | 77,264,641 | 76,308,556 |
Basic earnings per share (in dollars per share) | $ 1.49 | $ 1.07 |
Diluted earnings per share (in dollars per share) | $ 1.47 | $ 1.06 |
Antidilutive stock options outstanding | 0 | 1,367,821 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Inventories, net: | ||
Manufacturing supplies | $ 35.2 | $ 34.8 |
Raw materials | 107.3 | 99.5 |
Work in process | 332.9 | 320.3 |
Inventory, Finished Goods, Gross | 444.4 | 441.2 |
Subtotal | 919.8 | 895.8 |
Allowance for obsolete and surplus inventory | (55) | (54.5) |
Total Inventories, net | $ 864.8 | $ 841.3 |
Inventories - Narrative (Detail
Inventories - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Percentage of FIFO inventory | 61.00% | |
Percentage of LIFO inventory | 39.00% | |
Inventory reserve (LIFO) | $ 179.6 | $ 172.1 |
Financing Arrangements - Short
Financing Arrangements - Short Term Debt (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 |
Short-term Debt [Line Items] | |||
Short-term debt | $ 167.5 | $ 119.8 | |
Line of Credit Accounts Receivable | |||
Short-term Debt [Line Items] | |||
Line of credit facility, interest rate at period end | 0.96% | 0.96% | |
Short-term debt | 100 | $ 58 | |
Current borrowing capacity | 100 | ||
Foreign Subsidiary | |||
Short-term Debt [Line Items] | |||
Short-term debt | $ 67.5 | $ 61.8 | |
Line of credit stated variable interest rate, low range | 0.50% | 0.24% | |
Line of credit stated variable interest rate, high range | 1.75% | 1.75% |
Financing Arrangements - Narrat
Financing Arrangements - Narrative (Details) - USD ($) $ in Millions | May 27, 2020 | Nov. 01, 2019 | Jun. 25, 2019 | Sep. 18, 2018 | Sep. 11, 2018 | Sep. 01, 2018 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 |
Short-term Debt [Line Items] | |||||||||
Short-term debt | $ 167.5 | $ 119.8 | |||||||
Borrowings guarantees | 41.2 | ||||||||
Fair value of amount outstanding | 1,434.5 | 1,444.8 | |||||||
Cash and cash equivalents | 302.3 | 320.3 | |||||||
Proceeds from long-term debt | 70 | $ 200 | |||||||
Cone Drive | |||||||||
Short-term Debt [Line Items] | |||||||||
Effective date of acquisition | Sep. 1, 2018 | ||||||||
Rollon | |||||||||
Short-term Debt [Line Items] | |||||||||
Effective date of acquisition | Sep. 18, 2018 | ||||||||
Net Debt Construct | |||||||||
Short-term Debt [Line Items] | |||||||||
Cash and cash equivalents | $ 25 | ||||||||
Senior Unsecured Notes - Variable Rate | |||||||||
Short-term Debt [Line Items] | |||||||||
Line of credit expiration date | Jun. 30, 2021 | ||||||||
Debt instrument, issuance date | May 27, 2020 | ||||||||
Senior Unsecured Notes - 4.5% | |||||||||
Short-term Debt [Line Items] | |||||||||
Debt instrument, issuance date | May 27, 2020 | ||||||||
Line of Credit Accounts Receivable | |||||||||
Short-term Debt [Line Items] | |||||||||
Line of credit expiration date | Nov. 30, 2021 | ||||||||
Line of Credit Accounts Receivable | |||||||||
Short-term Debt [Line Items] | |||||||||
Maximum borrowing capacity under line of credit | $ 100 | ||||||||
Line of credit facility, remaining borrowing capacity | 0 | ||||||||
Current borrowing capacity | 100 | ||||||||
Short-term debt | 100 | 58 | |||||||
Foreign Subsidiary | |||||||||
Short-term Debt [Line Items] | |||||||||
Maximum borrowing capacity under line of credit | 270.6 | ||||||||
Line of credit facility, remaining borrowing capacity | 202.6 | ||||||||
Short-term debt | 67.5 | 61.8 | |||||||
Borrowings guarantees | 0.5 | ||||||||
Senior Unsecured Notes - Variable Rate | |||||||||
Short-term Debt [Line Items] | |||||||||
Maximum borrowing capacity under line of credit | $ 650 | ||||||||
Line of credit expiration date | Jun. 25, 2024 | ||||||||
Line of credit facility, remaining borrowing capacity | $ 640.7 | ||||||||
Debt instrument, issuance date | Jun. 25, 2019 | ||||||||
Fair value of amount outstanding | 9.3 | 9.7 | |||||||
Fixed Rate Bank Loan (BEKA) | |||||||||
Short-term Debt [Line Items] | |||||||||
Debt instrument, issuance date | Nov. 1, 2019 | ||||||||
Fair value of amount outstanding | 17.7 | 18.8 | |||||||
Long-term debt | $ 16 | ||||||||
Maturity date | Jun. 30, 2033 | ||||||||
Term Loan - Variable Rate | |||||||||
Short-term Debt [Line Items] | |||||||||
Debt instrument, issuance date | Sep. 11, 2018 | ||||||||
Fair value of amount outstanding | $ 327.5 | $ 329.6 | |||||||
Maturity date | Sep. 11, 2023 | Sep. 11, 2023 | |||||||
Proceeds from long-term debt | $ 350 | ||||||||
Repurchase date | Jul. 12, 2019 |
Financing Arrangements - Long T
Financing Arrangements - Long Term Debt (Details) - USD ($) $ in Millions | Sep. 11, 2018 | Mar. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | |||
Total long-term debt | $ 1,434.5 | $ 1,444.8 | |
Less: Current maturities | 10.8 | 10.9 | |
Long-term debt | $ 1,423.7 | $ 1,433.9 | |
Senior Unsecured Notes - 3.875% | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate, stated percentage | 3.875% | 3.875% | |
Maturity date | Sep. 1, 2024 | ||
Euro Senior Unsecured Notes - 2.02% | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate, stated percentage | 2.02% | 2.02% | |
Series A Medium Term Note | Minimum | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate, stated percentage | 6.74% | 6.74% | |
Series A Medium Term Note | Maximum | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate, stated percentage | 7.76% | 7.76% | |
Senior Unsecured Notes - Variable Rate | |||
Debt Instrument [Line Items] | |||
Total long-term debt | $ 9.3 | $ 9.7 | |
Debt instrument, interest rate, stated percentage | 1.43% | 2.01% | |
Term Loan - Variable Rate | |||
Debt Instrument [Line Items] | |||
Total long-term debt | $ 327.5 | $ 329.6 | |
Long-term debt, percentage bearing variable interest, percentage rate | 1.63% | 1.63% | |
Maturity date | Sep. 11, 2023 | Sep. 11, 2023 | |
Senior Unsecured Notes - 3.875% | |||
Debt Instrument [Line Items] | |||
Total long-term debt | $ 349.2 | $ 349 | |
Euro Senior Unsecured Notes - 2.02% | |||
Debt Instrument [Line Items] | |||
Total long-term debt | $ 175.6 | 182.9 | |
Maturity date | Sep. 7, 2027 | ||
Senior Unsecured Notes - 4.5% | |||
Debt Instrument [Line Items] | |||
Total long-term debt | $ 396.6 | $ 396.5 | |
Debt instrument, interest rate, stated percentage | 4.50% | 4.50% | |
Maturity date | Dec. 15, 2028 | ||
Series A Medium Term Note | |||
Debt Instrument [Line Items] | |||
Total long-term debt | $ 154.7 | $ 154.7 | |
Fixed Rate Bank Loan (BEKA) | |||
Debt Instrument [Line Items] | |||
Total long-term debt | $ 17.7 | $ 18.8 | |
Debt instrument, interest rate, stated percentage | 2.15% | 2.15% | |
Maturity date | Jun. 30, 2033 | ||
Other Long Term Debt | |||
Debt Instrument [Line Items] | |||
Total long-term debt | $ 3.9 | $ 3.6 | |
Euro Member Countries, Euro | Senior Unsecured Notes - Variable Rate | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate, stated percentage | 1.48% | 1.48% |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Change in the carrying amount of Goodwill | |
Beginning balance | $ 1,047.6 |
Foreign currency translation adjustments and other changes | 19.2 |
Ending balance | 1,028.4 |
Mobile Industries | |
Change in the carrying amount of Goodwill | |
Beginning balance | 384.6 |
Foreign currency translation adjustments and other changes | (8.1) |
Ending balance | 376.5 |
Process Industries | |
Change in the carrying amount of Goodwill | |
Beginning balance | 663 |
Foreign currency translation adjustments and other changes | (11.1) |
Ending balance | $ 651.9 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Intangible Assets (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Intangible assets subject to amortization: | ||
Intangible assets, Gross Carrying Amount | $ 1,091.3 | $ 1,104.7 |
Intangible assets, Accumulated Amortization | (512.8) | (501) |
Intangible assets, Net Carrying Amount | 578.5 | 603.7 |
Intangible assets not subject to amortization: | ||
Trade name | 125.4 | 129 |
FAA air agency certificates | 8.7 | 8.7 |
Indefinite Lived Intangible Assets Net | 134.1 | 137.7 |
Total intangible assets, Gross Carrying Amount | 1,225.4 | 1,242.4 |
Total intangible assets, Net Carrying Amount | 712.6 | 741.4 |
Customer relationships | ||
Intangible assets subject to amortization: | ||
Intangible assets, Gross Carrying Amount | 523.6 | 532.2 |
Intangible assets, Accumulated Amortization | (168.6) | (161.9) |
Intangible assets, Net Carrying Amount | 355 | 370.3 |
Technology and know-how | ||
Intangible assets subject to amortization: | ||
Intangible assets, Gross Carrying Amount | 272.4 | 277.2 |
Intangible assets, Accumulated Amortization | (75.3) | (72) |
Intangible assets, Net Carrying Amount | 197.1 | 205.2 |
Trade names | ||
Intangible assets subject to amortization: | ||
Intangible assets, Gross Carrying Amount | 14.2 | 14.2 |
Intangible assets, Accumulated Amortization | (9) | (8.8) |
Intangible assets, Net Carrying Amount | 5.2 | 5.4 |
Capitalized software | ||
Intangible assets subject to amortization: | ||
Intangible assets, Gross Carrying Amount | 276.5 | 276.4 |
Intangible assets, Accumulated Amortization | (256.1) | (254.6) |
Intangible assets, Net Carrying Amount | 20.4 | 21.8 |
Other | ||
Intangible assets subject to amortization: | ||
Intangible assets, Gross Carrying Amount | 4.6 | 4.7 |
Intangible assets, Accumulated Amortization | (3.8) | (3.7) |
Intangible assets, Net Carrying Amount | $ 0.8 | $ 1 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Goodwill [Line Items] | |||
Goodwill | $ 1,028.4 | $ 1,047.6 | |
Amortization expense for intangible assets | 14.1 | $ 14.2 | |
Future amortization expense 2021 | 55.7 | ||
Future amortization expense 2022 | 48.7 | ||
Future amortization expense 2023 | 45.6 | ||
Future amortization expense 2024 | 43.1 | ||
Future amortization expense 2025 | $ 42.5 |
Contingencies (Details)
Contingencies (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Commitments and Contingencies Disclosure [Abstract] | ||
Accrual for environmental loss contingencies | $ 5.3 | |
Standard product warranty accrual | $ 10.2 | $ 9.4 |
Equity (Details)
Equity (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Beginning Balance | $ 2,225.2 | $ 1,954.8 | ||
Stated capital | 40.7 | 53.1 | $ 40.7 | $ 53.1 |
Additional Paid in Capital, Common Stock | 761.3 | 920.1 | 740.7 | 937.6 |
Retained Earnings (Accumulated Deficit) | 1,429 | 1,964.8 | 1,339.5 | 1,907.4 |
Accumulated Other Comprehensive Income (Loss), Net of Tax | (2.1) | (118.9) | 41.3 | (50.1) |
Treasury Stock, Value | (53.4) | (1,001.7) | (9.3) | (979.8) |
Stockholders' Equity Attributable to Noncontrolling Interest | 74.6 | 82.9 | 72.3 | 86.6 |
Stockholders' Equity Roll Forward | ||||
Net Income | 116 | 84 | ||
Foreign currency translation adjustment | (44.4) | (78.8) | ||
Pension and postretirement liability adjustments | (1.6) | (1.3) | ||
Change in fair value of marketable securities | (0.4) | |||
Change in fair value of derivative financial instruments, net of reclassifications | 2.2 | 4.2 | ||
Change in ownership of noncontrolling interest | 0.5 | |||
Dividends | $ (23.8) | $ (22.9) | ||
Dividend per share | $ 0.29 | $ 0.28 | ||
Stock-based compensation expense | $ 6.5 | $ 5.6 | ||
Stock purchased at fair market value | (26.3) | (42.3) | ||
Stock option exercise activity | 14.1 | 7.5 | ||
Restricted shares surrendered (issued) | 0 | |||
Payment, Tax Withholding, Share-based Payment Arrangement | (17.8) | (10.2) | ||
Ending Balance | 2,250.1 | 1,900.3 | ||
Income tax (expense) benefit | (0.3) | (1) | ||
Cumulative Effect, Period of Adoption, Adjustment | ||||
Stockholders' Equity Roll Forward | ||||
Ending Balance | (0.4) | |||
Other Paid-In Capital | ||||
Stockholders' Equity Roll Forward | ||||
Stock-based compensation expense | 6.5 | 5.6 | ||
Stock option exercise activity | 14.1 | 0.9 | ||
Restricted shares surrendered (issued) | (22.2) | |||
Retained Earnings | ||||
Stockholders' Equity Roll Forward | ||||
Net Income | 113.3 | 80.7 | ||
Dividends | (23.8) | (22.9) | ||
Retained Earnings | Cumulative Effect, Period of Adoption, Adjustment | ||||
Stockholders' Equity Roll Forward | ||||
Ending Balance | (0.4) | |||
Accumulated Other Comprehensive Income (Loss) | ||||
Stockholders' Equity Roll Forward | ||||
Foreign currency translation adjustment | (44) | (71.3) | ||
Pension and postretirement liability adjustments | (1.6) | (1.3) | ||
Change in fair value of marketable securities | (0.4) | |||
Change in fair value of derivative financial instruments, net of reclassifications | 2.2 | 4.2 | ||
Treasury Stock | ||||
Stockholders' Equity Roll Forward | ||||
Stock purchased at fair market value | 26.3 | 42.3 | ||
Stock option exercise activity | 8.4 | |||
Restricted shares surrendered (issued) | 22.2 | |||
Payment, Tax Withholding, Share-based Payment Arrangement | (17.8) | (10.2) | ||
Non controlling Interest | ||||
Stockholders' Equity Roll Forward | ||||
Net Income | 2.7 | 3.3 | ||
Foreign currency translation adjustment | (0.4) | (7.5) | ||
Change in ownership of noncontrolling interest | 0.5 | |||
Pension and other postretirement liability adjustments | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | 61.8 | 65.6 | $ 63.4 | $ 66.9 |
Stockholders' Equity Roll Forward | ||||
Income tax (expense) benefit | $ 0.6 | 0.5 | ||
Accounting Standards Update 2016-13 | ||||
Stockholders' Equity Roll Forward | ||||
Cumulative effect of change in accounting | $ 0.2 |
Impairment and Restructuring _3
Impairment and Restructuring Charges - Restructuring Charges by Segment (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Restructuring Cost and Reserve [Line Items] | ||
Impairment charges | $ 3.4 | $ 0.1 |
Severance and related benefit costs | 0.5 | 2.7 |
Exit costs | 0.1 | 0.8 |
Total | 4 | 3.6 |
Mobile Industries | ||
Restructuring Cost and Reserve [Line Items] | ||
Impairment charges | 0.1 | 0 |
Severance and related benefit costs | 0 | 0.1 |
Exit costs | 0.1 | 0.6 |
Total | 0.2 | 0.7 |
Process Industries | ||
Restructuring Cost and Reserve [Line Items] | ||
Impairment charges | 3.3 | 0.1 |
Severance and related benefit costs | 0.5 | 2.5 |
Exit costs | 0 | 0.2 |
Total | 3.8 | 2.8 |
Corporate Segment | ||
Restructuring Cost and Reserve [Line Items] | ||
Impairment charges | 0 | 0 |
Severance and related benefit costs | 0 | 0.1 |
Exit costs | 0 | 0 |
Total | $ 0 | $ 0.1 |
Impairment and Restructuring _4
Impairment and Restructuring Charges - Narrative (Details) | Apr. 01, 2019 | Mar. 31, 2021USD ($)employee | Mar. 31, 2020USD ($) | Dec. 31, 2021employee |
Restructuring Cost and Reserve [Line Items] | ||||
Severance and related benefit costs | $ 500,000 | $ 2,700,000 | ||
Total | 4,000,000 | 3,600,000 | ||
Exit costs | $ 100,000 | 800,000 | ||
Number of Employees Expected to be Hired | employee | 130 | |||
Impairment charges | $ 3,400,000 | 100,000 | ||
Gaffney | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Exit costs | 600,000 | |||
Restructuring charges | 7,700,000 | |||
Diamond Chain | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Severance and related benefit costs | 300,000 | 1,900,000 | ||
Restructuring charges | 7,300,000 | |||
Effective date of acquisition | Apr. 1, 2019 | |||
Mobile Industries | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Severance and related benefit costs | 0 | 100,000 | ||
Total | 200,000 | 700,000 | ||
Exit costs | 100,000 | 600,000 | ||
Impairment charges | 100,000 | 0 | ||
Process Industries | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Severance and related benefit costs | 500,000 | 2,500,000 | ||
Total | 3,800,000 | 2,800,000 | ||
Exit costs | 0 | 200,000 | ||
Impairment charges | 3,300,000 | 100,000 | ||
Corporate Segment | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Severance and related benefit costs | 0 | 100,000 | ||
Total | 0 | 100,000 | ||
Exit costs | 0 | 0 | ||
Impairment charges | $ 0 | $ 0 | ||
Restructuring Charges | Gaffney | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Number of employees affected | employee | 150 | |||
Restructuring Charges | Diamond Chain | Forecast | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Number of employees affected | employee | 240 | |||
Restructuring Charges | Minimum | Gaffney | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total | $ 8,000,000 | |||
Restructuring Charges | Minimum | Diamond Chain | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total | 10,000,000 | |||
Restructuring Charges | Maximum | Gaffney | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total | 10,000,000 | |||
Restructuring Charges | Maximum | Diamond Chain | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total | $ 12,000,000 |
Impairment and Restructuring _5
Impairment and Restructuring Charges - Consolidated Restructuring Accrual (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Restructuring Reserve [Roll Forward] | ||
Beginning balance, January 1 | $ 8 | $ 2.7 |
Expense | 0.6 | 20.8 |
Payments | (1.2) | (15.5) |
Ending balance | $ 7.4 | $ 8 |
Retirement Benefit Plans (Detai
Retirement Benefit Plans (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Components of net periodic benefit cost: | ||
Recognition of net actuarial losses | $ 0.9 | $ 0 |
Pension Plan | ||
Components of net periodic benefit cost: | ||
Service cost | 3 | 3.1 |
Interest cost | 5.5 | 6.7 |
Expected return on plan assets | (8.6) | (8.5) |
Amortization of prior service cost | 0.3 | 0.4 |
Recognition of net actuarial losses | 0.9 | 0 |
Net periodic benefit cost (credit) | 1.1 | 1.7 |
Pension Plan | United States | ||
Components of net periodic benefit cost: | ||
Service cost | 2.5 | 2.7 |
Interest cost | 4.4 | 5.2 |
Expected return on plan assets | (6.1) | (6.3) |
Amortization of prior service cost | 0.3 | 0.4 |
Recognition of net actuarial losses | 0.9 | 0 |
Net periodic benefit cost (credit) | 2 | 2 |
Pension Plan | Foreign Plan | ||
Components of net periodic benefit cost: | ||
Service cost | 0.5 | 0.4 |
Interest cost | 1.1 | 1.5 |
Expected return on plan assets | (2.5) | (2.2) |
Amortization of prior service cost | 0 | 0 |
Recognition of net actuarial losses | 0 | 0 |
Net periodic benefit cost (credit) | $ (0.9) | $ (0.3) |
Postretirement Benefit Plans (D
Postretirement Benefit Plans (Details) - Postretirement Plan - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | |
Jan. 31, 2021 | Mar. 31, 2021 | Mar. 31, 2020 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Interest cost | $ 0.4 | $ 0.5 | |
Expected return on plan assets | 0 | (0.1) | |
Amortization of prior service credit | (2.5) | (2.4) | |
Net periodic benefit credit | $ (2.1) | $ (2) | |
Net periodic benefit cost | $ 11.1 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Accumulated Other Comprehensive Income [Roll Forward] | ||
Beginning Balance | $ 41.3 | $ (50.1) |
Other comprehensive (loss) income before reclassifications and income taxes | (43) | (72.7) |
Amounts reclassified from accumulated other comprehensive (loss) income before income taxes | (0.5) | (2.6) |
Income tax (expense) benefit | (0.3) | (1) |
Net current period other comprehensive (loss) income, net of income taxes | (43.8) | (76.3) |
Noncontrolling interest | 0.4 | 7.5 |
Net current period comprehensive (loss) income, net of income taxes and noncontrolling interest | (43.4) | (68.8) |
Ending Balance | (2.1) | (118.9) |
Foreign currency translation adjustments | ||
Accumulated Other Comprehensive Income [Roll Forward] | ||
Beginning Balance | (18) | (115.3) |
Other comprehensive (loss) income before reclassifications and income taxes | (44.4) | (78.8) |
Amounts reclassified from accumulated other comprehensive (loss) income before income taxes | 0 | 0 |
Income tax (expense) benefit | 0 | 0 |
Net current period other comprehensive (loss) income, net of income taxes | (44.4) | (78.8) |
Noncontrolling interest | 0.4 | 7.5 |
Net current period comprehensive (loss) income, net of income taxes and noncontrolling interest | (44) | (71.3) |
Ending Balance | (62) | (186.6) |
Pension and other postretirement liability adjustments | ||
Accumulated Other Comprehensive Income [Roll Forward] | ||
Beginning Balance | 63.4 | 66.9 |
Other comprehensive (loss) income before reclassifications and income taxes | 0 | 0.2 |
Amounts reclassified from accumulated other comprehensive (loss) income before income taxes | (2.2) | (2) |
Income tax (expense) benefit | 0.6 | 0.5 |
Net current period other comprehensive (loss) income, net of income taxes | (1.6) | (1.3) |
Noncontrolling interest | 0 | 0 |
Net current period comprehensive (loss) income, net of income taxes and noncontrolling interest | (1.6) | (1.3) |
Ending Balance | 61.8 | 65.6 |
Unrealized gain (loss) on marketable securities | ||
Accumulated Other Comprehensive Income [Roll Forward] | ||
Beginning Balance | 0 | 0 |
Other comprehensive (loss) income before reclassifications and income taxes | 0 | (0.5) |
Amounts reclassified from accumulated other comprehensive (loss) income before income taxes | 0 | 0 |
Income tax (expense) benefit | 0 | 0.1 |
Net current period other comprehensive (loss) income, net of income taxes | 0 | (0.4) |
Noncontrolling interest | 0 | 0 |
Net current period comprehensive (loss) income, net of income taxes and noncontrolling interest | 0 | (0.4) |
Ending Balance | 0 | (0.4) |
Change in fair value of derivative financial instruments | ||
Accumulated Other Comprehensive Income [Roll Forward] | ||
Beginning Balance | (4.1) | (1.7) |
Other comprehensive (loss) income before reclassifications and income taxes | 1.4 | 6.4 |
Amounts reclassified from accumulated other comprehensive (loss) income before income taxes | 1.7 | (0.6) |
Income tax (expense) benefit | (0.9) | (1.6) |
Net current period other comprehensive (loss) income, net of income taxes | 2.2 | 4.2 |
Noncontrolling interest | 0 | 0 |
Net current period comprehensive (loss) income, net of income taxes and noncontrolling interest | 2.2 | 4.2 |
Ending Balance | $ (1.9) | $ 2.5 |
Fair Value - Fair Value on Recu
Fair Value - Fair Value on Recurring Basis (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Assets and Liabilities Measured at fair value on a recurring basis | ||
Restricted cash | $ 0.8 | $ 0.8 |
Fair Value, Recurring | ||
Assets and Liabilities Measured at fair value on a recurring basis | ||
Cash and cash equivalents | 302.3 | 320.3 |
Restricted cash | 0.8 | 0.8 |
Short-term investments | 47.2 | 37.6 |
Foreign currency forward contracts | 1.1 | 1.1 |
Total Assets | 351.4 | 359.8 |
Foreign currency forward contracts | 2 | 8.1 |
Total Liabilities | 2 | 8.1 |
Fair Value, Recurring | Level 1 | ||
Assets and Liabilities Measured at fair value on a recurring basis | ||
Cash and cash equivalents | 301.4 | 318.6 |
Restricted cash | 0.8 | 0.8 |
Short-term investments | 0 | 0 |
Foreign currency forward contracts | 0 | 0 |
Total Assets | 302.2 | 319.4 |
Foreign currency forward contracts | 0 | 0 |
Total Liabilities | 0 | 0 |
Fair Value, Recurring | Level 2 | ||
Assets and Liabilities Measured at fair value on a recurring basis | ||
Cash and cash equivalents | 0.9 | 1.7 |
Restricted cash | 0 | 0 |
Short-term investments | 47.2 | 37.6 |
Foreign currency forward contracts | 1.1 | 1.1 |
Total Assets | 49.2 | 40.4 |
Foreign currency forward contracts | 2 | 8.1 |
Total Liabilities | 2 | 8.1 |
Fair Value, Recurring | Level 3 | ||
Assets and Liabilities Measured at fair value on a recurring basis | ||
Cash and cash equivalents | 0 | 0 |
Restricted cash | 0 | 0 |
Short-term investments | 0 | 0 |
Foreign currency forward contracts | 0 | 0 |
Total Assets | 0 | 0 |
Foreign currency forward contracts | 0 | 0 |
Total Liabilities | $ 0 | $ 0 |
Fair Value - Narrative (Details
Fair Value - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Fair Value Disclosures [Abstract] | ||
Long-term fixed-rate debt, fair value | $ 1,184 | $ 1,220.7 |
Long-term fixed-rate debt, carrying value | $ 1,096.7 | $ 1,103.2 |
Derivatives Instruments and H_3
Derivatives Instruments and Hedging Activities - Narrative (Details) € in Millions | Sep. 15, 2020EUR (€) | Mar. 31, 2021USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($) | Sep. 08, 2020USD ($) |
Derivative [Line Items] | |||||
Derivative, amount of hedged item | $ 100,000,000 | ||||
Proceeds from long-term debt | $ 70,000,000 | $ 200,000,000 | |||
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | 500,000 | $ 2,600,000 | |||
Derivative, notional amount | 122,000,000 | $ 173,200,000 | |||
Designated as Hedging Instrument | |||||
Derivative [Line Items] | |||||
Derivative, notional amount | 82,900,000 | 86,900,000 | |||
Not Designated as Hedging Instrument | |||||
Derivative [Line Items] | |||||
Derivative, notional amount | 39,100,000 | $ 86,200,000 | |||
2027 Notes | |||||
Derivative [Line Items] | |||||
Proceeds from long-term debt | € | € 150 | ||||
Net Investment Hedging | |||||
Derivative [Line Items] | |||||
Derivative, amount of hedged item | € | € 54.5 | ||||
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | $ 2,600,000 |
Derivatives Instruments and H_4
Derivatives Instruments and Hedging Activities - Cash Flow Hedging Strategy (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Derivatives not designated as hedging instruments: | $ 0.2 | $ 5.5 |