Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2023 | Jul. 31, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
Document Transition Report | 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 | 71,041,023 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0000098362 | |
Current Fiscal Year End Date | --12-31 |
Consolidated Statements of Inco
Consolidated Statements of Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Statement [Abstract] | ||||
Net sales | $ 1,272.3 | $ 1,153.7 | $ 2,535.1 | $ 2,278.3 |
Cost of products sold | 866.9 | 801.3 | 1,712.9 | 1,587.6 |
Selling, general and administrative expenses | 184.9 | 155.9 | 371.7 | 310 |
Amortization of intangible assets | 17.3 | 10.6 | 30.8 | 21.5 |
Impairment and restructuring charges | 2.5 | 10 | 31.4 | 11 |
Operating Income | 200.7 | 175.9 | 388.3 | 348.2 |
Interest expense | (28.3) | (18.3) | (52.4) | (32.6) |
Interest income | 1.9 | 1 | 3.4 | 1.6 |
Non-service pension and other postretirement (expense) income | 0 | (7.9) | 0.1 | (6.6) |
Other income (expense), net | 2.3 | (1.1) | 5.4 | (0.9) |
Income Before Income Taxes | 176.6 | 149.6 | 344.8 | 309.7 |
Provision for income taxes | 47.1 | 44 | 89.6 | 82.2 |
Net Income | 129.5 | 105.6 | 255.2 | 227.5 |
Less: Net income attributable to noncontrolling interest | 4.3 | 0.6 | 7.7 | 4.3 |
Net Income Attributable to The Timken Company | $ 125.2 | $ 105 | $ 247.5 | $ 223.2 |
Net Income per Common Share Attributable to The Timken Company Common Shareholders | ||||
Basic earnings per share (in dollars per share) | $ 1.74 | $ 1.43 | $ 3.43 | $ 3.01 |
Diluted earnings per share (in dollars per share) | $ 1.73 | $ 1.42 | $ 3.39 | $ 2.98 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Income | $ 129.5 | $ 105.6 | $ 255.2 | $ 227.5 |
Other comprehensive loss, net of tax: | ||||
Foreign currency translation adjustments | (27.9) | (113.1) | (0.2) | (135.7) |
Pension and postretirement liability adjustments | (1.6) | (1.4) | (3.1) | (2.9) |
Change in fair value of derivative financial instruments | (0.3) | 2.2 | (1.1) | 4.2 |
Other comprehensive loss, net of tax | (29.8) | (112.3) | (4.4) | (134.4) |
Comprehensive income (loss), net of tax | 99.7 | (6.7) | 250.8 | 93.1 |
Less: comprehensive income attributable to noncontrolling interest | 4 | 1.7 | 7.7 | 2.8 |
Comprehensive income (loss) attributable to The Timken Company | $ 95.7 | $ (8.4) | $ 243.1 | $ 90.3 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Current Assets | ||
Cash and cash equivalents | $ 344.3 | $ 331.6 |
Restricted cash | 8 | 9.1 |
Accounts receivable, less allowances (2023 – $17.9 million; 2022 – $17.9 million) | 811.9 | 699.6 |
Unbilled receivables | 121.8 | 103.9 |
Inventories, net | 1,251.7 | 1,191.3 |
Deferred charges and prepaid expenses | 45.4 | 44.4 |
Other current assets | 127.7 | 124.1 |
Total Current Assets | 2,710.8 | 2,504 |
Property, Plant and Equipment, net | 1,255.5 | 1,207.4 |
Other Assets | ||
Goodwill | 1,198.4 | 1,098.3 |
Other intangible assets | 876.1 | 765.3 |
Operating lease assets | 111.9 | 101.4 |
Deferred income taxes | 70.3 | 71 |
Other non-current assets | 28.3 | 25 |
Total Other Assets | 2,285 | 2,061 |
Total Assets | 6,251.3 | 5,772.4 |
Current Liabilities | ||
Accounts payable, trade | 392.2 | 403.9 |
Short-term debt, including current portion of long-term debt | 53.2 | 49 |
Salaries, wages and benefits | 135.2 | 155.3 |
Income taxes payable | 77.8 | 51.3 |
Other current liabilities | 364 | 352.9 |
Total Current Liabilities | 1,022.4 | 1,012.4 |
Non-Current Liabilities | ||
Long-term debt | 2,046.5 | 1,914.2 |
Accrued pension benefits | 161.3 | 160.3 |
Accrued postretirement benefits | 31.5 | 31.4 |
Long-term operating lease liabilities | 70.3 | 65.2 |
Deferred income taxes | 167.3 | 139.8 |
Other non-current liabilities | 102 | 96.2 |
Total Non-Current Liabilities | 2,578.9 | 2,407.1 |
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 | 1,058.4 | 829.6 |
Retained earnings | 2,132.2 | 1,932.1 |
Accumulated other comprehensive loss | (178.2) | (181.9) |
Treasury shares at cost (2023 – 7,304,483 shares; 2022 – 5,188,257 shares) | (521.8) | (352.2) |
Total Shareholders’ Equity | 2,531.3 | 2,268.3 |
Noncontrolling Interest | 118.7 | 84.6 |
Total Equity | 2,650 | 2,352.9 |
Total Liabilities and Equity | $ 6,251.3 | $ 5,772.4 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Allowances for accounts receivable | $ 17.9 | $ 17.9 |
Common stock authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock issued (in shares) | 78,546,583 | 77,767,640 |
Treasury stock (in shares) | 7,304,483 | 5,188,257 |
Preferred Class A | ||
Preferred stock authorized (Class I & Class II Preferred stock) (in shares) | 10,000,000 | 10,000,000 |
Preferred stock issued (Class I & Class II Preferred stock) (in shares) | 0 | 0 |
Preferred Class B | ||
Preferred stock authorized (Class I & Class II Preferred stock) (in shares) | 10,000,000 | 10,000,000 |
Preferred stock issued (Class I & Class II Preferred stock) (in shares) | 0 | 0 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Operating Activities | ||
Net Income | $ 255.2 | $ 227.5 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 96.8 | 82.1 |
Impairment charges | 28.3 | 8.8 |
Loss on sale of assets | 1.2 | 0.8 |
Gain (loss) on derivatives | (3.6) | 0 |
Deferred income tax provision | 2.8 | 1.7 |
Stock-based compensation expense | 17.1 | 15.6 |
Pension and other postretirement expense | 1.1 | 11.2 |
Pension and other postretirement benefit contributions and payments | (7.2) | (8.1) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (87.4) | (149.3) |
Unbilled receivables | (17.7) | (2.9) |
Inventories | 15.3 | (126.1) |
Accounts payable, trade | (14.9) | (6.1) |
Other accrued expenses | (29.1) | 16.6 |
Income taxes | (32.3) | 12.1 |
Other, net | (3) | (6.8) |
Net Cash Provided by Operating Activities | 222.6 | 77.1 |
Investing Activities | ||
Capital expenditures | (91.3) | (75.2) |
Acquisitions, net of cash acquired | (324.6) | (152.3) |
Proceeds from disposal of property, plant and equipment | 0.3 | 0 |
Proceeds from divestitures, net of cash divested | 4.5 | 3.1 |
Investments in short-term marketable securities, net | (0.8) | 23.4 |
Other, net | (0.1) | 2.3 |
Net Cash Used in Investing Activities | (412) | (198.7) |
Financing Activities | ||
Cash dividends paid to shareholders | (47.4) | (46.4) |
Purchase of treasury shares | (154.5) | (144.3) |
Proceeds from exercise of stock options | 17.2 | 1.6 |
Payments related to tax withholding for stock-based compensation | (15.1) | (8.1) |
Borrowings on accounts receivable facility | 29 | 122 |
Payments on accounts receivable facility | (29) | (122) |
Proceeds from long-term debt | 768.9 | 684.5 |
Payments on long-term debt | (643.5) | (344.8) |
Deferred financing costs | 0 | (3.5) |
Short-term debt activity, net | (1.4) | 31.9 |
Proceeds from the sale of shares in Timken India Limited | 284.8 | 0 |
Other | 0 | 6.5 |
Net Cash Provided by Financing Activities | 209 | 177.4 |
Effect of exchange rate changes on cash | (8) | (7.7) |
Increase in Cash, Cash Equivalents and Restricted Cash | 11.6 | 48.1 |
Cash, cash equivalents and restricted cash at beginning of year | 340.7 | 257.9 |
Cash, Cash Equivalents and Restricted Cash at End of Period | $ 352.3 | $ 306 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2023 | |
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, 2022. The Company previously classified intangible asset amortization expense within cost of products sold in the Company's Consolidated Statements of Income. Intangible asset amortization expense is now classified separately. The 2022 presentation has been revised to conform to the 2023 presentation resulting in a reduction in the cost of products sold for the three and six months ended June 30, 2022. |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2023 | |
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, 2022. Recent Accounting Pronouncements: New Accounting Guidance Adopted: In September 2022, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2022-04, "Liabilities - Supplier Finance Programs (Subtopic 405-50)." ASU 2022-04 is intended to establish disclosures that enhance the transparency of a supplier finance program used by an entity in connection with the purchase of goods and services. Supplier finance programs, which also may be referred to as reverse factoring, payables finance or structured payables arrangements, allow a buyer to offer its suppliers the option for access to payment in advance of an invoice due date, which is paid by a third-party finance provider or intermediary. Under the guidance, a buyer in a supplier finance program would disclose qualitative and quantitative information about its supplier finance programs. The new guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the amendment on rollforward information, which is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted. Refer to Note 12 - Supply Chain Financing in the Notes to the Consolidated Financial Statements for additional information. |
Acquisitions and Divestitures
Acquisitions and Divestitures | 6 Months Ended |
Jun. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions and Divestitures | Note 3 - Acquisitions and Divestitures Acquisitions: During the first six months of 2023, the Company completed two acquisitions. On April 4, 2023, the Company acquired Leonardo Top S.a.r.l. ("Nadella"), a leading European manufacturer of linear guides, telescopic rails, actuators and systems and other specialized industrial motion solutions, from ICG plc. Based in Italy, Nadella employs approximately 450 people and operates manufacturing facilities in Europe and China. Nadella reported revenue of approximately €100 million in 2022. Results for Nadella are reported in the Industrial Motion segment. On January 31, 2023, the Company acquired the assets of American Roller Bearing Company ("ARB"), a North Carolina-based manufacturer of industrial bearings. ARB, which boasts a large U.S. installed base and strong aftermarket business, operates manufacturing facilities in Hiddenite and Morganton, North Carolina. ARB reported revenue of approximately $35 million in 2022. Results for ARB are reported in the Engineered Bearings segment. The total purchase price for these acquisitions was $326.9 million, net of cash acquired of $21.0 million. The Company incurred acquisition-related costs of $2.7 million to complete these acquisitions. The following table presents the preliminary purchase price allocation at fair value for the 2023 acquisitions as of June 30, 2023. Initial Purchase Assets: Accounts receivable $ 25.0 Inventories 72.6 Other current assets 5.3 Property, plant and equipment 34.1 Goodwill 121.3 Other intangible assets 136.7 Other non-current assets 4.9 Total assets acquired $ 399.9 Liabilities: Accounts payable, trade $ 15.3 Salaries, wages and benefits 4.7 Income taxes payable 4.1 Other current liabilities 6.4 Short-term debt 5.0 Long-term debt 6.0 Deferred income taxes 27.7 Other non-current liabilities 3.8 Total liabilities assumed $ 73.0 Net assets acquired $ 326.9 In determining the fair value of the amounts above, the Company utilized various forms of the income, cost and market approaches depending on the asset or liability being valued. The estimation of fair value required judgement related to future net cash flows, discount rates, competitive trends, market comparisons and other factors. Inputs were generally determined by taking into account independent appraisals and historical data, supplemented by current and anticipated market conditions. Note 3 - Acquisitions and Divestitures (continued) The amounts in the table above represent the preliminary purchase price allocation for the 2023 acquisitions. This purchase price allocation, including the residual amount allocated to goodwill, is based on preliminary information and is subject to change as additional information concerning final asset and liability valuations are obtained and management completes its reassessment of the measurement period procedures based on the results of the preliminary valuation. As of June 30, 2023, no elements of the purchase price allocation have been finalized. During the applicable measurement period, the Company will adjust assets and liabilities if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in revised estimated values of those assets or liabilities as of that date. The effect of measurement period adjustments to the estimated fair values will be reflected as if the adjustments has been completed on the acquisition date. The following table summarizes the preliminary purchase price allocation at fair value for identifiable intangible assets acquired in 2023. 2023 Weighted- Trade names $ 18.8 15 years Technology and know-how 29.4 15 years Customer relationships 88.4 9 years Capitalized software 0.1 2 years Total intangible assets $ 136.7 On November 4, 2022, the Company completed the acquisition of GGB Bearing Technology ("GGB"), a global technology and market leader of premium engineered metal-polymer plain bearings, for $300.2 million, net of cash acquired of $19.7 million. GGB's revenue was approximately $200 million for the full year 2022. GGB's products are used mainly in industrial applications, including pumps and compressors, HVAC, off-highway, energy, material handling and aerospace. With manufacturing facilities across the United States, Europe and China, GGB employs approximately 900 people and has a global engineering, distribution and sales footprint. Results for GGB are reported in the Engineered Bearings segment. On May 31, 2022, the Company completed the acquisition of Spinea, s.r.o. ("Spinea"), a European technology leader and manufacturer of highly engineered cycloidal reduction gears and actuators, with full year 2022 sales of approximately $40 million. Spinea’s solutions primarily serve high-precision automation and robotics applications in the factory automation platform. Spinea is located in Presov, Slovakia. The purchase price for this acquisition was $151.2 million, net of cash acquired of $0.2 million. Results for Spinea are reported in the Industrial Motion segment. Note 3 - Acquisitions and Divestitures (continued) The following table presents the updated purchase price allocation at fair value, net of cash acquired, for the 2022 acquisitions, as of June 30, 2023: Initial Purchase Price Allocation Adjustments Updated Purchase Price Allocation Assets: Accounts receivable $ 30.6 $ 0.1 $ 30.7 Inventories 52.3 (0.3) 52.0 Other current assets 7.6 — 7.6 Property, plant and equipment 153.6 (4.7) 148.9 Goodwill 106.9 (1.4) 105.5 Other intangible assets 182.6 (0.8) 181.8 Other assets 12.1 3.9 16.0 Total assets acquired $ 545.7 $ (3.2) $ 542.5 Liabilities: Accounts payable, trade $ 16.8 $ (0.5) $ 16.3 Salaries, wages and benefits 11.8 — 11.8 Income taxes payable 3.2 — 3.2 Other current liabilities 7.0 (1.0) 6.0 Accrued pension benefits 3.2 0.3 3.5 Deferred income taxes 30.0 — 30.0 Other non-current liabilities 20.0 0.3 20.3 Total liabilities assumed $ 92.0 $ (0.9) $ 91.1 Net assets acquired $ 453.7 $ (2.3) $ 451.4 The above purchase price allocation, including the residual amount allocated to goodwill, is based on preliminary information and is subject to change as additional information concerning final asset and liability valuations is obtained. The purchase price allocation for Spinea was finalized during the second quarter of 2023. The purchase price allocation for GGB is preliminary pending the continued evaluation of real estate and other property, plant and equipment assets, as well as the related impacts on deferred income taxes. During the measurement period, the Company will adjust assets and liabilities if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in revised estimated values of those assets or liabilities as of that date. The effect of measurement period adjustments to the estimated fair values will be reflected as if the adjustments had been completed on the acquisition date. Divestitures: On February 28, 2023, the Company completed the sale of all of its membership interests in S.E. Setco Services Company, LLC ("SE Setco"), a 50% owned joint venture. The Company had accounted for SE Setco as an equity method investment prior to the sale. The Company received $5.7 million in cash proceeds for SE Setco and recognized a pretax gain of $4.8 million on the sale. The gain was reflected in other income, net in the Consolidated Statement of Income. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Segment Information | Note 4 - 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"). Effective January 1, 2023, the Company began operating under new reportable segments. The Company’s two reportable segments are Engineered Bearings and Industrial Motion. Segment results for 2022 have been revised to conform to the 2023 presentation of segments. Three Months Ended Six Months Ended 2023 2022 2023 2022 Net sales: Engineered Bearings $ 857.2 $ 798.3 $ 1,757.9 $ 1,570.7 Industrial Motion 415.1 355.4 777.2 707.6 Net sales $ 1,272.3 $ 1,153.7 $ 2,535.1 $ 2,278.3 Segment EBITDA: Engineered Bearings $ 185.5 $ 167.5 $ 390.5 $ 335.8 Industrial Motion 80.9 65.1 129.1 127.5 Total EBITDA, for reportable segments $ 266.4 $ 232.6 $ 519.6 $ 463.3 Unallocated corporate expense (13.2) (13.4) (30.9) (26.3) Corporate pension and other postretirement benefit related income (expense) (1) 1.0 (11.6) 1.9 (14.2) Depreciation and amortization (51.2) (40.7) (96.8) (82.1) Interest expense (28.3) (18.3) (52.4) (32.6) Interest income 1.9 1.0 3.4 1.6 Income before income taxes $ 176.6 $ 149.6 $ 344.8 $ 309.7 (1) Corporate pension and other postretirement benefit related income (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. June 30, December 31, 2022 Assets by Segment: Engineered Bearings $ 3,387.3 $ 3,270.3 Industrial Motion 2,435.7 2,070.1 Corporate (2) 428.3 432.0 $ 6,251.3 $ 5,772.4 (2) Corporate assets include corporate buildings and cash and cash equivalents. |
Revenue
Revenue | 6 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Note 5 - Revenue The following table presents details deemed most relevant to the users of the financial statements about total revenue for the three and six months ended June 30, 2023 and 2022: Three Months Ended Three Months Ended June 30, 2023 June 30, 2022 Engineered Bearings Industrial Motion Total Engineered Bearings Industrial Motion Total United States $ 317.6 $ 218.8 $ 536.4 $ 302.0 $ 197.7 $ 499.7 Americas excluding the United States 96.0 27.9 123.9 104.6 24.3 128.9 Europe / Middle East / Africa 175.6 136.6 312.2 155.7 104.0 259.7 China 156.5 22.9 179.4 133.3 21.7 155.0 Asia-Pacific excluding China 111.5 8.9 120.4 102.7 7.7 110.4 Net sales $ 857.2 $ 415.1 $ 1,272.3 $ 798.3 $ 355.4 $ 1,153.7 Six Months Ended Six Months Ended June 30, 2023 June 30, 2022 Engineered Bearings Industrial Motion Total Engineered Bearings Industrial Motion Total United States $ 658.5 $ 413.1 $ 1,071.6 $ 591.8 $ 396.5 $ 988.3 Americas excluding the United States 188.2 55.8 244.0 197.0 45.1 242.1 Europe / Middle East / Africa 359.5 250.4 609.9 318.3 206.5 524.8 China 314.9 39.2 354.1 262.6 43.8 306.4 Asia-Pacific excluding China 236.8 18.7 255.5 201.0 15.7 216.7 Net sales $ 1,757.9 $ 777.2 $ 2,535.1 $ 1,570.7 $ 707.6 $ 2,278.3 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 approximate percent of revenue by sales channel for the six months ended June 30, 2023 and 2022: Six Months Ended Six Months Ended Revenue by sales channel June 30, 2023 June 30, 2022 Original equipment manufacturers 60% 60% Distribution/end users 40% 40% 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 six months ended June 30, 2023 and June 30, 2022, approximately 8% and 9%, 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% of total net sales represented service revenue during the six months ended June 30, 2023 and June 30, 2022. Finally, business with the United States ("U.S.") government or its contractors represented approximately 6% of total net sales during each of the six months ended June 30, 2023 and June 30, 2022. 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 approximately $216.0 million a t June 30, 2023. Note 5 - Revenue (continued) Unbilled Receivables: The following table contains a rollforward of unbilled receivables for the six months ended June 30, 2023 and the twelve months ended December 31, 2022: June 30, December 31, Beginning balance, January 1 $ 103.9 $ 104.5 Additional unbilled revenue recognized 207.6 396.2 Less: amounts billed to customers (189.7) (370.5) Less: unbilled receivables reclassified to assets held for sale — (26.3) Ending balance $ 121.8 $ 103.9 There were no impairment losses recorded on unbilled receivables for the six months ended June 30, 2023 and the twelve months ended December 31, 2022. Deferred Revenue: The following table contains a rollforward of deferred revenue for the six months ended June 30, 2023 and the twelve months ended December 31, 2022: June 30, December 31, Beginning balance, January 1 $ 54.3 $ 35.8 Revenue (cash) received in advance 105.7 54.8 Less: revenue recognized (104.6) (36.3) Ending balance $ 55.4 $ 54.3 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2023 | |
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 Six Months Ended 2023 2022 2023 2022 Provision for income taxes $ 47.1 $ 44.0 $ 89.6 $ 82.2 Effective tax rate 26.7 % 29.4 % 26.0 % 26.5 % Income tax expense for the three and six months ended June 30, 2023 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 projected mix of earnings in non-U.S. jurisdictions with relatively higher tax rates. The effective tax rate of 26.7% for the three months ended June 30, 2023 was lower than the effective tax rate for the three months ended June 30, 2022 primarily due to the net favorable impact of discrete tax items in comparison to the year ago period, partially offset by an increase in the mix of earnings in non-U.S. jurisdictions with relatively higher tax rates. The effective tax rate of 26.0% for the six months ended June 30, 2023 was lower than the effective tax rate for the six months ended June 30, 2022 primarily due to the net favorable impact of discrete tax items in comparison to the year ago period, partially offset by an increase in the mix of earnings in non-U.S. jurisdictions with relatively higher tax rates. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2023 | |
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 and six months ended June 30, 2023 and 2022, respectively: Three Months Ended Six Months Ended 2023 2022 2023 2022 Numerator: Net income attributable to The Timken Company $ 125.2 $ 105.0 $ 247.5 $ 223.2 Denominator: Weighted average number of shares outstanding - basic 71,882,843 73,660,410 72,162,267 74,234,300 Effect of dilutive securities: Stock options and awards - based on the treasury 630,148 522,383 745,537 642,948 Weighted average number of shares outstanding assuming 72,512,991 74,182,793 72,907,804 74,877,248 Basic earnings per share $ 1.74 $ 1.43 $ 3.43 $ 3.01 Diluted earnings per share $ 1.73 $ 1.42 $ 3.39 $ 2.98 The dilutive effect of performance-based restricted stock units are included once they meet minimum performance thresholds. The dilutive effect of stock options includes all outstanding stock options except stock options that are considered antidilutive. Stock options are antidilutive when the exercise price exceeds the average market price of the Company’s common shares during the periods presented. There were no antidilutive stock options outstanding during the three and six months ended June 30, 2023 and 2022. |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Inventories | Note 8 - Inventories The components of inventories at June 30, 2023 and December 31, 2022 were as follows: June 30, December 31, Manufacturing supplies $ 42.8 $ 41.7 Raw materials 140.9 132.0 Work in process 502.4 491.2 Finished products 642.8 584.8 Subtotal 1,328.9 1,249.7 Allowance for obsolete and surplus inventory (77.2) (58.4) Total inventories, net $ 1,251.7 $ 1,191.3 Inventories are valued at net realizable value, with approximately 61% valued on the first-in, first-out ("FIFO") method and the remaining 39% valued on the last-in, first-out ("LIFO") method. The majority of the Company's U.S. inventories are valued on the LIFO method. The Company's non-U.S. inventories are valued on the FIFO method. The LIFO reserve at June 30, 2023 and December 31, 2022 was $236.1 million and $235.4 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 are 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. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Note 9 - Goodwill and Other Intangible Assets The Company tests goodwill and indefinite-lived intangible assets for impairment at least annually, performing its annual impairment test as of October 1 st . Furthermore, goodwill and indefinite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. In connection with the adoption of new reportable segments, goodwill was reallocated to new reporting units based on relative fair value at the reporting unit level. The Engineered Bearings segment has one reporting unit and the Industrial Motion segment has six reporting units. The changes in the carrying amount of goodwill for the six months ended June 30, 2023 were as follows: Engineered Bearings Industrial Motion Total Beginning balance $ 679.8 $ 418.5 $ 1,098.3 Acquisitions — 121.3 121.3 Impairment loss — (28.3) (28.3) Foreign currency translation adjustments and other changes 2.6 4.5 7.1 Ending balance $ 682.4 $ 516.0 $ 1,198.4 During the first quarter of 2023, the Company reviewed goodwill for impairment for its reporting units due to the change in reporting segments that went into effect January 1, 2023. The Company utilizes both an income approach and a market approach in testing goodwill for impairment. The Company utilized updated forecasts for the income approach as part of the goodwill impairment review. Based on the earnings and cash flow forecasts for the Belts and Chain reporting unit within the Industrial Motion segment, the Company determined that the reporting unit could not support the carrying value of its goodwill. As a result, the Company recorded a pretax impairment loss of $28.3 million during the first quarter of 2023, which was reported in impairment and restructuring charges on the Consolidated Statement of Income. The following table displays intangible assets as of June 30, 2023 and December 31, 2022: Balance at June 30, 2023 Balance at December 31, 2022 Gross Accumulated Net Gross Accumulated Net Intangible assets Customer relationships $ 655.8 $ (201.3) $ 454.5 $ 561.5 $ (183.2) $ 378.3 Technology and know-how 301.2 (90.1) 211.1 273.1 (80.4) 192.7 Trade names 50.6 (9.8) 40.8 18.4 (8.7) 9.7 Capitalized software 290.0 (267.0) 23.0 288.4 (266.3) 22.1 Other 7.6 (5.4) 2.2 3.3 (2.3) 1.0 $ 1,305.2 $ (573.6) $ 731.6 $ 1,144.7 $ (540.9) $ 603.8 Intangible assets not subject to amortization: Trade names $ 135.8 $ 135.8 $ 152.8 $ 152.8 FAA air agency certificates 8.7 8.7 8.7 8.7 $ 144.5 $ 144.5 $ 161.5 $ 161.5 Total intangible assets $ 1,449.7 $ (573.6) $ 876.1 $ 1,306.2 $ (540.9) $ 765.3 |
Other Current Liabilities
Other Current Liabilities | 6 Months Ended |
Jun. 30, 2023 | |
Other Liabilities Disclosure [Abstract] | |
Other Current Liabilities | Note 10 - Other Current Liabilities The following table displays other current liabilities as of June 30, 2023 and December 31, 2022: (Dollars in millions) June 30, December 31, Sales rebates $ 72.0 $ 82.9 Deferred revenue 55.4 54.3 Product warranty 27.1 23.5 Operating lease liabilities 24.7 24.1 Current derivative liability 30.2 19.8 Taxes other than income and payroll taxes 24.2 18.7 Freight and duties 16.1 21.7 Interest 15.3 15.0 Professional fees 17.3 17.4 Restructuring 4.1 3.1 Other 77.6 72.4 Total other current liabilities $ 364.0 $ 352.9 |
Financing Arrangements
Financing Arrangements | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Financing Arrangements | Note 11 - Financing Arrangements Short-term debt at June 30, 2023 and December 31, 2022 was as follows: June 30, December 31, Borrowings under lines of credit for certain of the Company’s foreign subsidiaries with various banks with interest rates ranging from 4.00% to 10.07% at June 30, 2023 and 2.38% to 5.50% at December 31, 2022 $ 49.8 $ 46.3 Short-term debt $ 49.8 $ 46.3 Lines of credit for certain of the Company's foreign subsidiaries provide for short-term borrowings up to $246.1 million in the aggregate. Most of these lines of credit are uncommitted. At June 30, 2023, the Company’s foreign subsidiaries had borrowings outstanding of $49.8 million and bank guarantees of $2.7 million, which reduced the aggregate availability under these facilities to $193.6 million. Long-term debt at June 30, 2023 and December 31, 2022 was as follows: June 30, December 31, Variable-rate Senior Credit Facility with an average interest rate on U.S. Dollar of 6.27% and Euro of 4.07% at June 30, 2023 and U.S. Dollar of 5.10% and Euro of 2.21% at December 31, 2022 $ 133.2 $ 8.5 Variable-rate Accounts Receivable Facility with an interest rate of 5.98% at June 30, 2023 and 5.01% at December 31, 2022 85.0 85.0 Variable-rate Term Loan (1) , maturing on December 5, 2027, with an interest rate of 6.33% at June 30, 2023 and 5.55% at December 31, 2022 399.2 399.1 Fixed-rate Senior Unsecured Notes (1) , maturing on September 1, 2024, with an interest rate of 3.875% 349.9 349.8 Fixed-rate Euro Senior Unsecured Notes (1) , maturing on September 7, 2027, with an interest rate of 2.02% 163.5 160.4 Fixed-rate Senior Unsecured Notes (1) , maturing on December 15, 2028, with an interest rate of 4.50% 397.4 397.2 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% 154.8 154.8 Fixed-rate Senior Unsecured Notes (1) , maturing on April 1, 2032, with an interest rate of 4.125% 342.9 342.1 Fixed-rate Euro Bank Loan, maturing on June 30, 2033, with an interest rate of 2.15% 13.2 13.6 Other 10.8 6.4 Total debt $ 2,049.9 $ 1,916.9 Less: current maturities 3.4 2.7 Long-term debt $ 2,046.5 $ 1,914.2 (1) Net of discounts and fees Note 11 - Financing Arrangements (continued) The Company has a $100 million Amended and Restated Asset Securitization Agreement (the "Accounts Receivable Facility"), which matures on November 30, 2024. 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 June 30, 2023. As of June 30, 2023, there were $85.0 million in outstanding borrowings under the Accounts Receivable Facility, which reduced the availability under this facility to $15.0 million. 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. On December 5, 2022, the Company entered into the Fifth Amended and Restated Credit Agreement ("Credit Agreement"), which is comprised of the $750.0 million unsecured revolving credit facility ("Senior Credit Facility") and a $400.0 million unsecured term loan facility ("2027 Term Loan") that each mature on December 5, 2027. The Credit Agreement amended and restated the Company's previous revolving credit agreement that was set to mature on June 25, 2024, and replaced the $350.0 million term loan that was set to mature on September 11, 2023 ("2023 Term Loan"). The Credit Agreement also replaced interest rates based on LIBOR with interest rates based on Secured Overnight Financing Rate ("SOFR"). At June 30, 2023, the Company had $133.2 million of outstanding borrowings and $1.8 million of letters of credit under the Senior Credit Facility, which reduced the availability under this facility to $615.0 million. The Credit Agreement has two financial covenants: a consolidated leverage ratio and a consolidated interest coverage ratio. On March 28, 2022, the Company issued fixed-rate unsecured senior notes ("2032 Notes") in the aggregate principal amount of $350 million with an interest rate of 4.125%, maturing on April 1, 2032. Proceeds from the 2032 Notes were used for general corporate purposes, which included the repayment of borrowings under the Company's previous senior credit facility and the Accounts Receivable Facility outstanding at the time of issuance. At June 30, 2023, 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 June 30, 2023, outstanding letters of credit totaled $59.1 million, most with expiration dates within 12 months. The maturities of long-term debt (including $4.9 million of finance leases) subsequent to June 30, 2023 are as follows: Year 2023 $ 3.0 2024 444.0 2025 28.9 2026 52.7 2027 654.5 2028 522.0 Thereafter 356.9 The table above excludes $12.0 million of unamortized premiums and fees that are netted against long-term debt at June 30, 2023. |
Supply Chain Financing
Supply Chain Financing | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Supply Chain Financing | Note 12 - Supply Chain Financing The Company offers a supplier finance program with two different financial institutions where suppliers may receive early payment from the financial institutions on invoices issued to the Company. The Company and each financial institution entered into arrangements providing for the Company to pay the financial institution per the terms of any supplier invoice paid early under the program and to pay an annual fee for the supplier finance platform subscription and related support. The Company and the financial institutions may terminate participation in the program with 90 days’ written notice. The supplier finance programs are unsecured and are not guaranteed by the Company. The financial institutions enter into separate arrangements with suppliers directly to participate in the program. The Company does not determine the terms or conditions of such arrangements or participate in the transactions between the suppliers and the financial institutions. The supplier invoice terms under the program typically require payment in full within 90 days of the invoice date. The following table is a rollforward of the outstanding obligations for the Company’s supplier finance program for the six months ended June 30, 2023: June 30, Confirmed obligations outstanding, January 1 $ 14.4 Invoices confirmed 45.4 Confirmed invoices paid (41.3) Confirmed obligations outstanding, ending balance $ 18.5 The obligations outstanding at June 30, 2023 were included in accounts payable, trade on the Consolidated Balance Sheet. |
Contingencies
Contingencies | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Note 13 - Contingencies The Company is responsible for environmental remediation at various manufacturing facilities presently or formerly operated by the Company. In addition, the Company, through one of its subsidiaries, has currently been identified as a potentially responsible party for investigation and remediation under the Comprehensive Environmental Response, Compensation and Liability Act, known as the Superfund, or similar state laws with respect to one site. Claims for investigation and remediation have been asserted against numerous other unrelated 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, LLC. ("Lovejoy") a Special Notice Letter that identified Lovejoy as a potentially responsible party, together with at least 14 unrelated parties, 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 $4.7 million and $4.8 million for various known environmental matters that are probable and reasonably estimable at June 30, 2023 and December 31, 2022, respectively, which includes the Lovejoy matter described 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 $27.1 million and $23.5 million at June 30, 2023 and December 31, 2022, respectively. The balances at the end of each respective period represent the best estimates of costs for future claims for products that are still under warranty. The increase in the liability for the first six months of 2023 primarily relates to additional accruals for certain products sold into the automotive and renewable energy sectors. Accrual estimates are based on actual claims and expected trends that continue to mature. Management believes that any significant change to these assumptions will not have a material effect on the Company's consolidated financial position; however, the effect of any such change may be material to the results of operations of any particular period in which such change occurs. The following is a rollforward of the consolidated product warranty accrual for the six months ended June 30, 2023 and twelve months ended December 31, 2022: June 30, December 31, Beginning balance, January 1 $ 23.5 $ 11.7 Expense 5.0 14.7 Payments (1.4) (2.9) Ending balance $ 27.1 $ 23.5 |
Equity
Equity | 6 Months Ended |
Jun. 30, 2023 | |
Equity [Abstract] | |
Equity | Note 14 - Equity The following tables present the changes in the components of equity for the three and six months ended June 30, 2023 and 2022, respectively: The Timken Company Shareholders Total Stated Other Retained Earnings Accumulated Treasury Non Balance at March 31, 2023 $ 2,436.3 $ 40.7 $ 853.3 $ 2,030.8 $ (156.8) $ (420.0) $ 88.3 Net income 129.5 125.2 4.3 Foreign currency translation adjustment (27.9) (27.6) (0.3) Pension and other postretirement liability adjustments (net of income tax benefit of $0.5 million) (1.6) (1.6) Change in fair value of derivative financial (0.3) (0.3) Dividends declared to noncontrolling interest — Dividends - $0.33 per share (23.8) (23.8) Sale of shares of Timken India Limited 229.0 194.5 8.1 26.4 Stock-based compensation expense 6.1 6.1 Stock purchased at fair market value (100.5) (100.5) Stock option exercise activity 4.5 4.5 Payments related to tax withholding for (1.3) (1.3) Balance at June 30, 2023 $ 2,650.0 $ 40.7 $ 1,058.4 $ 2,132.2 $ (178.2) $ (521.8) $ 118.7 The Timken Company Shareholders Total Stated Other Retained Earnings Accumulated Treasury Non Balance at December 31, 2022 $ 2,352.9 $ 40.7 $ 829.6 $ 1,932.1 $ (181.9) $ (352.2) $ 84.6 Net income 255.2 247.5 7.7 Foreign currency translation adjustment (0.2) (0.2) Pension and other postretirement liability adjustments (net of income tax benefit of $1.0 million) (3.1) (3.1) Change in fair value of derivative financial (1.1) (1.1) Dividends - $0.64 per share (47.4) (47.4) Sale of shares of Timken India Limited 229.0 194.5 8.1 26.4 Stock-based compensation expense 17.1 17.1 Stock purchased at fair market value (154.5) (154.5) Stock option exercise activity 17.2 17.2 Payments related to tax withholding for (15.1) (15.1) Balance at June 30, 2023 $ 2,650.0 $ 40.7 $ 1,058.4 $ 2,132.2 $ (178.2) $ (521.8) $ 118.7 On June 20, 2023, the Company completed the sale of 7.6 million shares of Timken India Limited (“TIL”), a subsidiary of the Company, generating net proceeds of $229 million after estimated income taxes of $55 million and transaction costs. The sale reduced the Company’s ownership in TIL from 67.8 percent to 57.7 percent. Note 14 - Equity (continued) The Timken Company Shareholders Total Stated Other Retained Earnings Accumulated Treasury Non Balance at March 31, 2022 $ 2,355.0 $ 40.7 $ 795.4 $ 1,711.1 $ (42.5) $ (233.6) $ 83.9 Net income 105.6 105.0 0.6 Foreign currency translation adjustment (113.1) (114.2) 1.1 Pension and other postretirement liability adjustments (net of income tax benefit of $0.5 million) (1.4) (1.4) Change in fair value of derivative financial 2.2 2.2 Dividends - $0.31 per share (22.9) (22.9) Stock-based compensation expense 8.5 8.5 Stock purchased at fair market value (44.3) (44.3) Stock option exercise activity 0.2 0.2 Payments related to tax withholding for (0.6) (0.6) Balance at June 30, 2022 $ 2,289.2 $ 40.7 $ 804.1 $ 1,793.2 $ (155.9) $ (278.5) $ 85.6 The Timken Company Shareholders Total Stated Other Retained Earnings Accumulated Treasury Non Balance at December 31, 2021 $ 2,377.7 $ 40.7 $ 786.9 $ 1,616.4 $ (23.0) $ (126.1) $ 82.8 Net income 227.5 223.2 4.3 Foreign currency translation adjustment (135.7) (134.2) (1.5) Pension and other postretirement liability adjustments (net of income tax benefit of $1.0 million) (2.9) (2.9) Change in fair value of derivative financial 4.2 4.2 Dividends - $0.61 per share (46.4) (46.4) Stock-based compensation expense 15.6 15.6 Stock purchased at fair market value (144.3) (144.3) Stock option exercise activity 1.6 1.6 Payments related to tax withholding for (8.1) (8.1) Balance at June 30, 2022 $ 2,289.2 $ 40.7 $ 804.1 $ 1,793.2 $ (155.9) $ (278.5) $ 85.6 |
Impairment and Restructuring Ch
Impairment and Restructuring Charges | 6 Months Ended |
Jun. 30, 2023 | |
Restructuring Charges [Abstract] | |
Impairment and Restructuring Charges | Note 15 - Impairment and Restructuring Charges Impairment and restructuring charges by segment are comprised of the following: For the three months ended June 30, 2023: Engineered Bearings Industrial Motion Total Severance and related benefit costs $ 1.5 $ 0.8 $ 2.3 Exit costs 0.2 — 0.2 Total $ 1.7 $ 0.8 $ 2.5 For the six months ended June 30, 2023: Engineered Bearings Industrial Motion Total Impairment charges $ — $ 28.3 $ 28.3 Severance and related benefit costs 2.2 0.7 2.9 Exit costs 0.2 — 0.2 Total $ 2.4 $ 29.0 $ 31.4 For the three months ended June 30, 2022: Engineered Bearings Industrial Motion Total Impairment charges $ 8.8 $ — $ 8.8 Severance and related benefit costs 0.6 0.4 1.0 Exit costs 0.2 — 0.2 Total $ 9.6 $ 0.4 $ 10.0 For the six months ended June 30, 2022: Engineered Bearings Industrial Motion Total Impairment charges $ 8.8 $ — $ 8.8 Severance and related benefit costs 1.0 0.3 1.3 Exit costs 0.8 0.1 0.9 Total $ 10.6 $ 0.4 $ 11.0 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. Engineered Bearings: On January 16, 2023, the Company announced the closure of its bearing plant in Gaffney, South Carolina. The Company expects to transfer its remaining operations to other bearing manufacturing facilities in North America. The closure of this facility is expected to occur by the end of the fourth quarter of 2023 and is expected to affect approximately 225 employees. The Company expects to incur approximately $10 million to $12 million of pretax costs in total related to this closure. During the three months and six months ended June 30, 2023, the Company recorded severance and related benefits of $0.9 million and $1.7 million, respectively, related to this closure. The Company incurred cumulative pretax costs related to this closure of $6.1 million as of June 30, 2023, including rationalization costs recorded in cost of products sold. Note 15 - Impairment and Restructuring Charges (continued) During the three months ended June 30, 2022, the Company recorded impairment charges of $8.8 million related to certain assets of its joint venture in Russia. As a result of Russia's invasion of Ukraine (and associated sanctions), the Company suspended its operations in Russia. Refer to Russia Operations in Management's Discussion and Analysis for additional information. On July 19, 2021, the Company announced the closure of its bearing manufacturing facility in Villa Carcina, Italy. The Company transferred the manufacturing of its single-row tapered roller bearing production to other bearing facilities in Europe, Asia and the United States. The Company completed the closure of the facility on October 31, 2022, and it affected approximately 110 employees. During the three months ended June 30, 2022, the Company recorded severance and related benefits of $0.4 million and exit costs of $0.4 million related to this closure. During the six months ended June 30, 2022, the Company recorded severance and related benefits of $0.8 million and exit costs of $1.0 million related to this closure. The Company incurred cumulative pretax costs related to this closure of $9.8 million as of June 30, 2023, including rationalization costs recorded in cost of products sold. On November 1, 2022, the Company completed the sale of this facility. Industrial Motion: During the third quarter of 2022, the Company announced certain organizational changes, which included the appointment of executive leaders for its Engineered Bearings and Industrial Motion product groups. After evaluating the impact from the organizational changes and revising segment results through the balance of 2022, the Company concluded that it will operate under two new reportable segments, Engineered Bearings and Industrial Motion, effective January 1, 2023. In conjunction with this change in segmented results, the Company reallocated its goodwill to new reporting units under these two segments. In addition, the Company was required to review goodwill for impairment under these new reporting units. As a result of this goodwill impairment review, the Company recognized a pretax goodwill impairment loss of $28.3 million during the three months ended March 31, 2023. On February 4, 2020, the Company announced the closure of its chain manufacturing facility in Indianapolis, Indiana. This facility was part of the Diamond Chain Company ("Diamond Chain") acquisition completed on April 1, 2019. The Company transferred the majority of its Diamond Chain product line to its chain manufacturing facility in Fulton, Illinois. The chain plant ceased operations on April 30, 2023 and affected approximately 240 employees at the Indianapolis facility. The Company hired approximately 130 full-time positions in Fulton, Illinois related to this closure. The Company incurred cumulative pretax costs related to this closure of $14.8 million as of June 30, 2023, including rationalization costs recorded in cost of products sold. Consolidated Restructuring Accrual: The following is a rollforward of the consolidated restructuring accrual for the six months ended June 30, 2023 and twelve months ended December 31, 2022: June 30, December 31, Beginning balance, January 1 $ 3.1 $ 7.0 Expense 3.1 5.8 Payments (2.1) (9.7) Ending balance $ 4.1 $ 3.1 The restructuring accrual at June 30, 2023 and December 31, 2022 was included in other current liabilities on the Consolidated Balance Sheets. |
Retirement Benefit Plans
Retirement Benefit Plans | 6 Months Ended |
Jun. 30, 2023 | |
Pension Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Retirement Benefit Plans | Note 16 - 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 and six months ended June 30, 2023 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, 2023. U.S. Plans International Plans Total Three Months Ended Three Months Ended Three Months Ended 2023 2022 2023 2022 2023 2022 Components of net periodic benefit cost (credit): Service cost $ 0.2 $ 1.8 $ 0.5 $ 0.4 $ 0.7 $ 2.2 Interest cost 4.5 4.1 2.9 1.4 7.4 5.5 Expected return on plan assets (2.1) (5.0) (2.8) (2.4) (4.9) (7.4) Amortization of prior service cost 0.1 0.3 — 0.1 0.1 0.4 Recognition of net actuarial (1.0) 11.6 — — (1.0) 11.6 Net periodic benefit cost (credit) $ 1.7 $ 12.8 $ 0.6 $ (0.5) $ 2.3 $ 12.3 U.S. Plans International Plans Total Six Months Ended Six Months Ended Six Months Ended 2023 2022 2023 2022 2023 2022 Components of net periodic benefit cost (credit): Service cost $ 0.4 $ 3.7 $ 0.8 $ 0.8 $ 1.2 $ 4.5 Interest cost 9.0 8.2 5.3 2.9 14.3 11.1 Expected return on plan assets (4.2) (10.2) (5.3) (4.9) (9.5) (15.1) Amortization of prior service cost 0.1 0.6 0.1 0.1 0.2 0.7 Recognition of net actuarial (1.9) 14.2 — — (1.9) 14.2 Net periodic benefit cost (credit) $ 3.4 $ 16.5 $ 0.9 $ (1.1) $ 4.3 $ 15.4 For the three and six months ended June 30, 2023, lump sum payments related to new retirees exceeded annual interest and service costs for one of the Company's U.S. defined benefit pension plans, triggering a remeasurement of assets and obligations for this plan. As a result of this remeasurement, the Company recognized net actuarial ("mark-to-market") gains of $1.0 million and $1.9 million during the three and six months ended June 30, 2023. For the three and six months ended June 30, 2022, the Company expected to make lump sum payments related to new retirees in excess of annual interest and service costs for two of the Company's U.S. defined pension plans. This triggered a remeasurement of assets and obligations for these plans. As a result of these remeasurements, the Company recognized net actuarial ("mark-to-market") losses of $11.6 million and $14.2 million during the three and six months ended June 30, 2022. |
Other Postretirement Benefit Pl
Other Postretirement Benefit Plans | 6 Months Ended |
Jun. 30, 2023 | |
Postretirement Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Other Postretirement Benefit Plans | Note 17 - 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 and six months ended June 30, 2023 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, 2023. Three Months Ended Six Months Ended 2023 2022 2023 2022 Net periodic benefit credit: Service cost $ — $ 0.1 $ — $ 0.1 Interest cost 0.5 0.3 1.0 0.7 Amortization of prior service credit (2.1) (2.5) (4.2) (5.0) Net periodic benefit credit $ (1.6) $ (2.1) $ (3.2) $ (4.2) |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 6 Months Ended |
Jun. 30, 2023 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Note 18 - Accumulated Other Comprehensive Income (Loss) The following tables present details about components of accumulated other comprehensive (loss) income for the three and six months ended June 30, 2023 and 2022, respectively: Foreign currency translation adjustments Pension and other postretirement liability adjustments Change in fair value of derivative financial instruments Total Balance at March 31, 2023 $ (208.3) $ 49.3 $ 2.2 $ (156.8) Sale of shares of Timken India Limited 8.1 — — 8.1 Other comprehensive loss before (27.9) (0.1) (0.9) (28.9) Amounts reclassified from accumulated other — (2.0) 0.4 (1.6) Income tax benefit — 0.5 0.2 0.7 Net current period other comprehensive loss, (27.9) (1.6) (0.3) (29.8) Noncontrolling interest 0.3 — — 0.3 Net current period other comprehensive loss, (19.5) (1.6) (0.3) (21.4) Balance at June 30, 2023 $ (227.8) $ 47.7 $ 1.9 $ (178.2) Foreign currency translation adjustments Pension and other postretirement liability adjustments Change in fair value of derivative financial instruments Total Balance at December 31, 2022 $ (235.7) $ 50.8 $ 3.0 $ (181.9) Sale of shares of Timken India Limited 8.1 — — 8.1 Other comprehensive loss before (0.2) (0.1) (1.7) (2.0) Amounts reclassified from accumulated other — (4.0) 0.1 (3.9) Income tax benefit — 1.0 0.5 1.5 Net current period other comprehensive loss, (0.2) (3.1) (1.1) (4.4) Noncontrolling interest — — — — Net current period other comprehensive income 7.9 (3.1) (1.1) 3.7 Balance at June 30, 2023 $ (227.8) $ 47.7 $ 1.9 $ (178.2) Note 18 - Accumulated Other Comprehensive Income (Loss) (continued) Foreign currency translation adjustments Pension and other postretirement liability adjustments Change in fair value of derivative financial instruments Total Balance at March 31, 2022 $ (100.3) $ 55.1 $ 2.7 $ (42.5) Other comprehensive (loss) income before (113.1) 0.2 3.9 (109.0) Amounts reclassified from accumulated other — (2.1) (0.7) (2.8) Income tax benefit (expense) — 0.5 (1.0) (0.5) Net current period other comprehensive (loss) (113.1) (1.4) 2.2 (112.3) Noncontrolling interest (1.1) — — (1.1) Net current period other comprehensive (loss) (114.2) (1.4) 2.2 (113.4) Balance at June 30, 2022 $ (214.5) $ 53.7 $ 4.9 $ (155.9) Foreign currency translation adjustments Pension and other postretirement liability adjustments Change in fair value of derivative financial instruments Total Balance at December 31, 2021 $ (80.3) $ 56.6 $ 0.7 $ (23.0) Other comprehensive (loss) income before (135.7) 0.4 7.1 (128.2) Amounts reclassified from accumulated other — (4.3) (1.6) (5.9) Income tax benefit (expense) 1.0 (1.3) (0.3) Net current period other comprehensive (loss) (135.7) (2.9) 4.2 (134.4) Noncontrolling interest 1.5 — — 1.5 Net current period other comprehensive (loss) (134.2) (2.9) 4.2 (132.9) Balance at June 30, 2022 $ (214.5) $ 53.7 $ 4.9 $ (155.9) Other comprehensive (loss) income before reclassifications and income taxes includes the effect of foreign currency. |
Fair Value
Fair Value | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Note 19 - 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 June 30, 2023 and December 31, 2022: June 30, 2023 Total Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 304.2 $ 304.2 $ — $ — Cash and cash equivalents measured at net asset value 40.0 Restricted cash 8.0 8.0 — — Short-term investments 38.2 — 38.2 — Interest rate swap contracts 1.0 — 1.0 — Foreign currency forward contracts 1.7 — 1.7 — Total assets $ 393.1 $ 312.2 $ 40.9 $ — Liabilities: Foreign currency forward contracts $ 30.2 $ — $ 30.2 $ — Total liabilities $ 30.2 $ — $ 30.2 $ — December 31, 2022 Total Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 292.1 $ 289.3 $ 2.8 $ — Cash and cash equivalents measured at net asset value 39.5 Restricted cash 9.1 9.1 — — Short-term investments 39.2 — 39.2 — Interest rate swap contracts 3.1 — 3.1 — Foreign currency forward contracts 4.5 — 4.5 — Total assets $ 387.5 $ 298.4 $ 49.6 $ — Liabilities: Foreign currency forward contracts $ 19.8 $ — $ 19.8 $ — Total liabilities $ 19.8 $ — $ 19.8 $ — Cash and cash equivalents are highly liquid investments with maturities of three months or less when purchased and are valued at redempti on value. Short-term investments are investments with maturities between four months and one year, and generally are valued at amortized cost, which approximat es 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 market interest rates to measure the fair value of its interest rate swap contracts. The Company uses publicly available foreign currency forward and spot rates to measure the fair value of its foreign currency forward contracts. Note 19 - Fair Value (continued) 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 or goodwill impairment. No other material assets w ere measured at fair value on a nonrecurring basis during the six months ended June 30, 2023 and 2022, respectively. 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 estima te of its fair value. The fair value of the Company’s long-term fixed-rate debt, based on Level 2 inputs (quoted market prices), was $1,361.3 million and $1,353.5 million at June 30, 2023 and December 31, 2022, respectively. The carrying value of this debt was $1,421.7 million and $1,417.9 million at June 30, 2023 and December 31, 2022, respectively. The difference between fair value and carrying value primarily reflects the net impact of changes in prevailing interest rates and credit spreads since the fixed-rate debt was issued. 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 | 6 Months Ended |
Jun. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | Note 20 - 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 repaid the LIBOR-based 2023 Term Loan on December 5, 2022 and replaced it with the SOFR-based 2027 Term Loan. The Company amended the interest rate for the swap from LIBOR to SOFR commencing January 2023. 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 (th e "2027 Notes"), as a hedge against its net investment in one of its European subsidiaries. The objective of the hedge transaction is to protect the net investment in the foreign operations against changes in the exchange rate between the U.S. dollar and the Euro. The net impact for the three and six months ended June 30, 2023, respectively, was a loss of $0.4 million and $1.1 million to accumulated comprehensive (loss) income with a corresponding offset to other income (expense), which partially offsets the impact of the foreign currency adjustment on the 2027 Notes. The Company entered into $350 million of floating-to-fixed 10-year Treasury rate locks during the first quarter of 2022, prior to issuing the 2032 Notes. This fixed the 10-year Treasury yield and settled at pricing of the 2032 Notes, resulting in $6.5 million of cash proceeds received by the Company. This amount was recorded to accumulated comprehensive income and will be amortized as a reduction in interest expense over the 10-year tenor of the 2032 Notes. The Company does not purchase or hold any derivativ e financial instruments for trading purposes. As of June 30, 2023 and December 31, 2022, the Company had $573.1 million and $635.6 million, respectively, of outstanding foreign currency forward contracts at notional value. Refer to Note 19 - Fair Value for the fair value disclosure of derivative financial instruments. Note 20 - Derivative Instruments and Hedging Activities (continued) 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. 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 certain foreign currencies with forward contracts. When the dollar strengthens significantly against these 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 nverse ly, 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 June 30, 2023 and December 31, 2022, the Company had $74.8 million and $82.3 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 June 30, 2023 and December 31, 2022, the Company had $498.3 million and $553.3 million, respectively, of outstanding foreign currency forward contracts at notional value that were not d esignated as hedging instruments. The following table presents the impact of derivative instruments not designated as hedging instruments for the three and six months ended June 30, 2023 and 2022, respectively, and the related location within the Consolidated Statements of Income: Amount of gain or (loss) recognized in income Three Months Ended Six Months Ended Derivatives not designated as hedging instruments: Location of gain or (loss) recognized in income 2023 2022 2023 2022 Foreign currency forward contracts Other expense, net $ (13.9) $ (6.0) $ (16.5) $ (7.0) |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net Income (Loss) Attributable to Parent | $ 125.2 | $ 105 | $ 247.5 | $ 223.2 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jun. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements: New Accounting Guidance Adopted: In September 2022, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2022-04, "Liabilities - Supplier Finance Programs (Subtopic 405-50)." ASU 2022-04 is intended to establish disclosures that enhance the transparency of a supplier finance program used by an entity in connection with the purchase of goods and services. Supplier finance programs, which also may be referred to as reverse factoring, payables finance or structured payables arrangements, allow a buyer to offer its suppliers the option for access to payment in advance of an invoice due date, which is paid by a third-party finance provider or intermediary. Under the guidance, a buyer in a supplier finance program would disclose qualitative and quantitative information about its supplier finance programs. The new guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the amendment on rollforward information, which is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted. Refer to Note 12 - Supply Chain Financing in the Notes to the Consolidated Financial Statements for additional information. |
Acquisitions and Divestitures (
Acquisitions and Divestitures (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table presents the preliminary purchase price allocation at fair value for the 2023 acquisitions as of June 30, 2023. Initial Purchase Assets: Accounts receivable $ 25.0 Inventories 72.6 Other current assets 5.3 Property, plant and equipment 34.1 Goodwill 121.3 Other intangible assets 136.7 Other non-current assets 4.9 Total assets acquired $ 399.9 Liabilities: Accounts payable, trade $ 15.3 Salaries, wages and benefits 4.7 Income taxes payable 4.1 Other current liabilities 6.4 Short-term debt 5.0 Long-term debt 6.0 Deferred income taxes 27.7 Other non-current liabilities 3.8 Total liabilities assumed $ 73.0 Net assets acquired $ 326.9 The following table presents the updated purchase price allocation at fair value, net of cash acquired, for the 2022 acquisitions, as of June 30, 2023: Initial Purchase Price Allocation Adjustments Updated Purchase Price Allocation Assets: Accounts receivable $ 30.6 $ 0.1 $ 30.7 Inventories 52.3 (0.3) 52.0 Other current assets 7.6 — 7.6 Property, plant and equipment 153.6 (4.7) 148.9 Goodwill 106.9 (1.4) 105.5 Other intangible assets 182.6 (0.8) 181.8 Other assets 12.1 3.9 16.0 Total assets acquired $ 545.7 $ (3.2) $ 542.5 Liabilities: Accounts payable, trade $ 16.8 $ (0.5) $ 16.3 Salaries, wages and benefits 11.8 — 11.8 Income taxes payable 3.2 — 3.2 Other current liabilities 7.0 (1.0) 6.0 Accrued pension benefits 3.2 0.3 3.5 Deferred income taxes 30.0 — 30.0 Other non-current liabilities 20.0 0.3 20.3 Total liabilities assumed $ 92.0 $ (0.9) $ 91.1 Net assets acquired $ 453.7 $ (2.3) $ 451.4 |
Summary of Purchase Price Allocation at Fair Value for Identifiable Intangible Assets Acquired | The following table summarizes the preliminary purchase price allocation at fair value for identifiable intangible assets acquired in 2023. 2023 Weighted- Trade names $ 18.8 15 years Technology and know-how 29.4 15 years Customer relationships 88.4 9 years Capitalized software 0.1 2 years Total intangible assets $ 136.7 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Segment Wise Financial Performance | Effective January 1, 2023, the Company began operating under new reportable segments. The Company’s two reportable segments are Engineered Bearings and Industrial Motion. Segment results for 2022 have been revised to conform to the 2023 presentation of segments. Three Months Ended Six Months Ended 2023 2022 2023 2022 Net sales: Engineered Bearings $ 857.2 $ 798.3 $ 1,757.9 $ 1,570.7 Industrial Motion 415.1 355.4 777.2 707.6 Net sales $ 1,272.3 $ 1,153.7 $ 2,535.1 $ 2,278.3 Segment EBITDA: Engineered Bearings $ 185.5 $ 167.5 $ 390.5 $ 335.8 Industrial Motion 80.9 65.1 129.1 127.5 Total EBITDA, for reportable segments $ 266.4 $ 232.6 $ 519.6 $ 463.3 Unallocated corporate expense (13.2) (13.4) (30.9) (26.3) Corporate pension and other postretirement benefit related income (expense) (1) 1.0 (11.6) 1.9 (14.2) Depreciation and amortization (51.2) (40.7) (96.8) (82.1) Interest expense (28.3) (18.3) (52.4) (32.6) Interest income 1.9 1.0 3.4 1.6 Income before income taxes $ 176.6 $ 149.6 $ 344.8 $ 309.7 (1) Corporate pension and other postretirement benefit related income (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. June 30, December 31, 2022 Assets by Segment: Engineered Bearings $ 3,387.3 $ 3,270.3 Industrial Motion 2,435.7 2,070.1 Corporate (2) 428.3 432.0 $ 6,251.3 $ 5,772.4 (2) Corporate assets include corporate buildings and cash and cash equivalents. |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table presents details deemed most relevant to the users of the financial statements about total revenue for the three and six months ended June 30, 2023 and 2022: Three Months Ended Three Months Ended June 30, 2023 June 30, 2022 Engineered Bearings Industrial Motion Total Engineered Bearings Industrial Motion Total United States $ 317.6 $ 218.8 $ 536.4 $ 302.0 $ 197.7 $ 499.7 Americas excluding the United States 96.0 27.9 123.9 104.6 24.3 128.9 Europe / Middle East / Africa 175.6 136.6 312.2 155.7 104.0 259.7 China 156.5 22.9 179.4 133.3 21.7 155.0 Asia-Pacific excluding China 111.5 8.9 120.4 102.7 7.7 110.4 Net sales $ 857.2 $ 415.1 $ 1,272.3 $ 798.3 $ 355.4 $ 1,153.7 Six Months Ended Six Months Ended June 30, 2023 June 30, 2022 Engineered Bearings Industrial Motion Total Engineered Bearings Industrial Motion Total United States $ 658.5 $ 413.1 $ 1,071.6 $ 591.8 $ 396.5 $ 988.3 Americas excluding the United States 188.2 55.8 244.0 197.0 45.1 242.1 Europe / Middle East / Africa 359.5 250.4 609.9 318.3 206.5 524.8 China 314.9 39.2 354.1 262.6 43.8 306.4 Asia-Pacific excluding China 236.8 18.7 255.5 201.0 15.7 216.7 Net sales $ 1,757.9 $ 777.2 $ 2,535.1 $ 1,570.7 $ 707.6 $ 2,278.3 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 approximate percent of revenue by sales channel for the six months ended June 30, 2023 and 2022: Six Months Ended Six Months Ended Revenue by sales channel June 30, 2023 June 30, 2022 Original equipment manufacturers 60% 60% Distribution/end users 40% 40% |
Schedule of Unbilled Receivables and Deferred Revenue | The following table contains a rollforward of unbilled receivables for the six months ended June 30, 2023 and the twelve months ended December 31, 2022: June 30, December 31, Beginning balance, January 1 $ 103.9 $ 104.5 Additional unbilled revenue recognized 207.6 396.2 Less: amounts billed to customers (189.7) (370.5) Less: unbilled receivables reclassified to assets held for sale — (26.3) Ending balance $ 121.8 $ 103.9 The following table contains a rollforward of deferred revenue for the six months ended June 30, 2023 and the twelve months ended December 31, 2022: June 30, December 31, Beginning balance, January 1 $ 54.3 $ 35.8 Revenue (cash) received in advance 105.7 54.8 Less: revenue recognized (104.6) (36.3) Ending balance $ 55.4 $ 54.3 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
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 Six Months Ended 2023 2022 2023 2022 Provision for income taxes $ 47.1 $ 44.0 $ 89.6 $ 82.2 Effective tax rate 26.7 % 29.4 % 26.0 % 26.5 % |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of 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 and six months ended June 30, 2023 and 2022, respectively: Three Months Ended Six Months Ended 2023 2022 2023 2022 Numerator: Net income attributable to The Timken Company $ 125.2 $ 105.0 $ 247.5 $ 223.2 Denominator: Weighted average number of shares outstanding - basic 71,882,843 73,660,410 72,162,267 74,234,300 Effect of dilutive securities: Stock options and awards - based on the treasury 630,148 522,383 745,537 642,948 Weighted average number of shares outstanding assuming 72,512,991 74,182,793 72,907,804 74,877,248 Basic earnings per share $ 1.74 $ 1.43 $ 3.43 $ 3.01 Diluted earnings per share $ 1.73 $ 1.42 $ 3.39 $ 2.98 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Current Inventories | The components of inventories at June 30, 2023 and December 31, 2022 were as follows: June 30, December 31, Manufacturing supplies $ 42.8 $ 41.7 Raw materials 140.9 132.0 Work in process 502.4 491.2 Finished products 642.8 584.8 Subtotal 1,328.9 1,249.7 Allowance for obsolete and surplus inventory (77.2) (58.4) Total inventories, net $ 1,251.7 $ 1,191.3 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The changes in the carrying amount of goodwill for the six months ended June 30, 2023 were as follows: Engineered Bearings Industrial Motion Total Beginning balance $ 679.8 $ 418.5 $ 1,098.3 Acquisitions — 121.3 121.3 Impairment loss — (28.3) (28.3) Foreign currency translation adjustments and other changes 2.6 4.5 7.1 Ending balance $ 682.4 $ 516.0 $ 1,198.4 |
Schedule of Finite-Lived Intangible Assets | The following table displays intangible assets as of June 30, 2023 and December 31, 2022: Balance at June 30, 2023 Balance at December 31, 2022 Gross Accumulated Net Gross Accumulated Net Intangible assets Customer relationships $ 655.8 $ (201.3) $ 454.5 $ 561.5 $ (183.2) $ 378.3 Technology and know-how 301.2 (90.1) 211.1 273.1 (80.4) 192.7 Trade names 50.6 (9.8) 40.8 18.4 (8.7) 9.7 Capitalized software 290.0 (267.0) 23.0 288.4 (266.3) 22.1 Other 7.6 (5.4) 2.2 3.3 (2.3) 1.0 $ 1,305.2 $ (573.6) $ 731.6 $ 1,144.7 $ (540.9) $ 603.8 Intangible assets not subject to amortization: Trade names $ 135.8 $ 135.8 $ 152.8 $ 152.8 FAA air agency certificates 8.7 8.7 8.7 8.7 $ 144.5 $ 144.5 $ 161.5 $ 161.5 Total intangible assets $ 1,449.7 $ (573.6) $ 876.1 $ 1,306.2 $ (540.9) $ 765.3 |
Schedule of Indefinite-Lived Intangible Assets | The following table displays intangible assets as of June 30, 2023 and December 31, 2022: Balance at June 30, 2023 Balance at December 31, 2022 Gross Accumulated Net Gross Accumulated Net Intangible assets Customer relationships $ 655.8 $ (201.3) $ 454.5 $ 561.5 $ (183.2) $ 378.3 Technology and know-how 301.2 (90.1) 211.1 273.1 (80.4) 192.7 Trade names 50.6 (9.8) 40.8 18.4 (8.7) 9.7 Capitalized software 290.0 (267.0) 23.0 288.4 (266.3) 22.1 Other 7.6 (5.4) 2.2 3.3 (2.3) 1.0 $ 1,305.2 $ (573.6) $ 731.6 $ 1,144.7 $ (540.9) $ 603.8 Intangible assets not subject to amortization: Trade names $ 135.8 $ 135.8 $ 152.8 $ 152.8 FAA air agency certificates 8.7 8.7 8.7 8.7 $ 144.5 $ 144.5 $ 161.5 $ 161.5 Total intangible assets $ 1,449.7 $ (573.6) $ 876.1 $ 1,306.2 $ (540.9) $ 765.3 |
Other Current Liabilities (Tabl
Other Current Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Current Liabilities | The following table displays other current liabilities as of June 30, 2023 and December 31, 2022: (Dollars in millions) June 30, December 31, Sales rebates $ 72.0 $ 82.9 Deferred revenue 55.4 54.3 Product warranty 27.1 23.5 Operating lease liabilities 24.7 24.1 Current derivative liability 30.2 19.8 Taxes other than income and payroll taxes 24.2 18.7 Freight and duties 16.1 21.7 Interest 15.3 15.0 Professional fees 17.3 17.4 Restructuring 4.1 3.1 Other 77.6 72.4 Total other current liabilities $ 364.0 $ 352.9 |
Financing Arrangements (Tables)
Financing Arrangements (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Short-term Debt | Short-term debt at June 30, 2023 and December 31, 2022 was as follows: June 30, December 31, Borrowings under lines of credit for certain of the Company’s foreign subsidiaries with various banks with interest rates ranging from 4.00% to 10.07% at June 30, 2023 and 2.38% to 5.50% at December 31, 2022 $ 49.8 $ 46.3 Short-term debt $ 49.8 $ 46.3 |
Schedule of Long-term Debt | Long-term debt at June 30, 2023 and December 31, 2022 was as follows: June 30, December 31, Variable-rate Senior Credit Facility with an average interest rate on U.S. Dollar of 6.27% and Euro of 4.07% at June 30, 2023 and U.S. Dollar of 5.10% and Euro of 2.21% at December 31, 2022 $ 133.2 $ 8.5 Variable-rate Accounts Receivable Facility with an interest rate of 5.98% at June 30, 2023 and 5.01% at December 31, 2022 85.0 85.0 Variable-rate Term Loan (1) , maturing on December 5, 2027, with an interest rate of 6.33% at June 30, 2023 and 5.55% at December 31, 2022 399.2 399.1 Fixed-rate Senior Unsecured Notes (1) , maturing on September 1, 2024, with an interest rate of 3.875% 349.9 349.8 Fixed-rate Euro Senior Unsecured Notes (1) , maturing on September 7, 2027, with an interest rate of 2.02% 163.5 160.4 Fixed-rate Senior Unsecured Notes (1) , maturing on December 15, 2028, with an interest rate of 4.50% 397.4 397.2 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% 154.8 154.8 Fixed-rate Senior Unsecured Notes (1) , maturing on April 1, 2032, with an interest rate of 4.125% 342.9 342.1 Fixed-rate Euro Bank Loan, maturing on June 30, 2033, with an interest rate of 2.15% 13.2 13.6 Other 10.8 6.4 Total debt $ 2,049.9 $ 1,916.9 Less: current maturities 3.4 2.7 Long-term debt $ 2,046.5 $ 1,914.2 |
Schedule of Maturities of Long-term Debt | The maturities of long-term debt (including $4.9 million of finance leases) subsequent to June 30, 2023 are as follows: Year 2023 $ 3.0 2024 444.0 2025 28.9 2026 52.7 2027 654.5 2028 522.0 Thereafter 356.9 |
Supply Chain Financing (Tables)
Supply Chain Financing (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Supplier Finance Program Obligations | The following table is a rollforward of the outstanding obligations for the Company’s supplier finance program for the six months ended June 30, 2023: June 30, Confirmed obligations outstanding, January 1 $ 14.4 Invoices confirmed 45.4 Confirmed invoices paid (41.3) Confirmed obligations outstanding, ending balance $ 18.5 |
Contingencies (Tables)
Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Product Warranty Liability | The following is a rollforward of the consolidated product warranty accrual for the six months ended June 30, 2023 and twelve months ended December 31, 2022: June 30, December 31, Beginning balance, January 1 $ 23.5 $ 11.7 Expense 5.0 14.7 Payments (1.4) (2.9) Ending balance $ 27.1 $ 23.5 |
Equity (Tables)
Equity (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Equity [Abstract] | |
Schedule of Stockholders Equity | The following tables present the changes in the components of equity for the three and six months ended June 30, 2023 and 2022, respectively: The Timken Company Shareholders Total Stated Other Retained Earnings Accumulated Treasury Non Balance at March 31, 2023 $ 2,436.3 $ 40.7 $ 853.3 $ 2,030.8 $ (156.8) $ (420.0) $ 88.3 Net income 129.5 125.2 4.3 Foreign currency translation adjustment (27.9) (27.6) (0.3) Pension and other postretirement liability adjustments (net of income tax benefit of $0.5 million) (1.6) (1.6) Change in fair value of derivative financial (0.3) (0.3) Dividends declared to noncontrolling interest — Dividends - $0.33 per share (23.8) (23.8) Sale of shares of Timken India Limited 229.0 194.5 8.1 26.4 Stock-based compensation expense 6.1 6.1 Stock purchased at fair market value (100.5) (100.5) Stock option exercise activity 4.5 4.5 Payments related to tax withholding for (1.3) (1.3) Balance at June 30, 2023 $ 2,650.0 $ 40.7 $ 1,058.4 $ 2,132.2 $ (178.2) $ (521.8) $ 118.7 The Timken Company Shareholders Total Stated Other Retained Earnings Accumulated Treasury Non Balance at December 31, 2022 $ 2,352.9 $ 40.7 $ 829.6 $ 1,932.1 $ (181.9) $ (352.2) $ 84.6 Net income 255.2 247.5 7.7 Foreign currency translation adjustment (0.2) (0.2) Pension and other postretirement liability adjustments (net of income tax benefit of $1.0 million) (3.1) (3.1) Change in fair value of derivative financial (1.1) (1.1) Dividends - $0.64 per share (47.4) (47.4) Sale of shares of Timken India Limited 229.0 194.5 8.1 26.4 Stock-based compensation expense 17.1 17.1 Stock purchased at fair market value (154.5) (154.5) Stock option exercise activity 17.2 17.2 Payments related to tax withholding for (15.1) (15.1) Balance at June 30, 2023 $ 2,650.0 $ 40.7 $ 1,058.4 $ 2,132.2 $ (178.2) $ (521.8) $ 118.7 The Timken Company Shareholders Total Stated Other Retained Earnings Accumulated Treasury Non Balance at March 31, 2022 $ 2,355.0 $ 40.7 $ 795.4 $ 1,711.1 $ (42.5) $ (233.6) $ 83.9 Net income 105.6 105.0 0.6 Foreign currency translation adjustment (113.1) (114.2) 1.1 Pension and other postretirement liability adjustments (net of income tax benefit of $0.5 million) (1.4) (1.4) Change in fair value of derivative financial 2.2 2.2 Dividends - $0.31 per share (22.9) (22.9) Stock-based compensation expense 8.5 8.5 Stock purchased at fair market value (44.3) (44.3) Stock option exercise activity 0.2 0.2 Payments related to tax withholding for (0.6) (0.6) Balance at June 30, 2022 $ 2,289.2 $ 40.7 $ 804.1 $ 1,793.2 $ (155.9) $ (278.5) $ 85.6 The Timken Company Shareholders Total Stated Other Retained Earnings Accumulated Treasury Non Balance at December 31, 2021 $ 2,377.7 $ 40.7 $ 786.9 $ 1,616.4 $ (23.0) $ (126.1) $ 82.8 Net income 227.5 223.2 4.3 Foreign currency translation adjustment (135.7) (134.2) (1.5) Pension and other postretirement liability adjustments (net of income tax benefit of $1.0 million) (2.9) (2.9) Change in fair value of derivative financial 4.2 4.2 Dividends - $0.61 per share (46.4) (46.4) Stock-based compensation expense 15.6 15.6 Stock purchased at fair market value (144.3) (144.3) Stock option exercise activity 1.6 1.6 Payments related to tax withholding for (8.1) (8.1) Balance at June 30, 2022 $ 2,289.2 $ 40.7 $ 804.1 $ 1,793.2 $ (155.9) $ (278.5) $ 85.6 |
Impairment and Restructuring _2
Impairment and Restructuring Charges (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Restructuring Charges [Abstract] | |
Schedule of Restructuring and Related Costs | Impairment and restructuring charges by segment are comprised of the following: For the three months ended June 30, 2023: Engineered Bearings Industrial Motion Total Severance and related benefit costs $ 1.5 $ 0.8 $ 2.3 Exit costs 0.2 — 0.2 Total $ 1.7 $ 0.8 $ 2.5 For the six months ended June 30, 2023: Engineered Bearings Industrial Motion Total Impairment charges $ — $ 28.3 $ 28.3 Severance and related benefit costs 2.2 0.7 2.9 Exit costs 0.2 — 0.2 Total $ 2.4 $ 29.0 $ 31.4 For the three months ended June 30, 2022: Engineered Bearings Industrial Motion Total Impairment charges $ 8.8 $ — $ 8.8 Severance and related benefit costs 0.6 0.4 1.0 Exit costs 0.2 — 0.2 Total $ 9.6 $ 0.4 $ 10.0 For the six months ended June 30, 2022: Engineered Bearings Industrial Motion Total Impairment charges $ 8.8 $ — $ 8.8 Severance and related benefit costs 1.0 0.3 1.3 Exit costs 0.8 0.1 0.9 Total $ 10.6 $ 0.4 $ 11.0 The following is a rollforward of the consolidated restructuring accrual for the six months ended June 30, 2023 and twelve months ended December 31, 2022: June 30, December 31, Beginning balance, January 1 $ 3.1 $ 7.0 Expense 3.1 5.8 Payments (2.1) (9.7) Ending balance $ 4.1 $ 3.1 |
Retirement Benefit Plans (Table
Retirement Benefit Plans (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Pension Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Schedule of Defined Benefit Plans Disclosures | The following table sets forth the net periodic benefit cost for the Company’s defined benefit pension plans. The amounts for the three and six months ended June 30, 2023 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, 2023. U.S. Plans International Plans Total Three Months Ended Three Months Ended Three Months Ended 2023 2022 2023 2022 2023 2022 Components of net periodic benefit cost (credit): Service cost $ 0.2 $ 1.8 $ 0.5 $ 0.4 $ 0.7 $ 2.2 Interest cost 4.5 4.1 2.9 1.4 7.4 5.5 Expected return on plan assets (2.1) (5.0) (2.8) (2.4) (4.9) (7.4) Amortization of prior service cost 0.1 0.3 — 0.1 0.1 0.4 Recognition of net actuarial (1.0) 11.6 — — (1.0) 11.6 Net periodic benefit cost (credit) $ 1.7 $ 12.8 $ 0.6 $ (0.5) $ 2.3 $ 12.3 U.S. Plans International Plans Total Six Months Ended Six Months Ended Six Months Ended 2023 2022 2023 2022 2023 2022 Components of net periodic benefit cost (credit): Service cost $ 0.4 $ 3.7 $ 0.8 $ 0.8 $ 1.2 $ 4.5 Interest cost 9.0 8.2 5.3 2.9 14.3 11.1 Expected return on plan assets (4.2) (10.2) (5.3) (4.9) (9.5) (15.1) Amortization of prior service cost 0.1 0.6 0.1 0.1 0.2 0.7 Recognition of net actuarial (1.9) 14.2 — — (1.9) 14.2 Net periodic benefit cost (credit) $ 3.4 $ 16.5 $ 0.9 $ (1.1) $ 4.3 $ 15.4 |
Other Postretirement Benefit _2
Other Postretirement Benefit Plans (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
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 and six months ended June 30, 2023 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, 2023. Three Months Ended Six Months Ended 2023 2022 2023 2022 Net periodic benefit credit: Service cost $ — $ 0.1 $ — $ 0.1 Interest cost 0.5 0.3 1.0 0.7 Amortization of prior service credit (2.1) (2.5) (4.2) (5.0) Net periodic benefit credit $ (1.6) $ (2.1) $ (3.2) $ (4.2) |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Components of Accumulated Other Comprehensive (Loss) Income | The following tables present details about components of accumulated other comprehensive (loss) income for the three and six months ended June 30, 2023 and 2022, respectively: Foreign currency translation adjustments Pension and other postretirement liability adjustments Change in fair value of derivative financial instruments Total Balance at March 31, 2023 $ (208.3) $ 49.3 $ 2.2 $ (156.8) Sale of shares of Timken India Limited 8.1 — — 8.1 Other comprehensive loss before (27.9) (0.1) (0.9) (28.9) Amounts reclassified from accumulated other — (2.0) 0.4 (1.6) Income tax benefit — 0.5 0.2 0.7 Net current period other comprehensive loss, (27.9) (1.6) (0.3) (29.8) Noncontrolling interest 0.3 — — 0.3 Net current period other comprehensive loss, (19.5) (1.6) (0.3) (21.4) Balance at June 30, 2023 $ (227.8) $ 47.7 $ 1.9 $ (178.2) Foreign currency translation adjustments Pension and other postretirement liability adjustments Change in fair value of derivative financial instruments Total Balance at December 31, 2022 $ (235.7) $ 50.8 $ 3.0 $ (181.9) Sale of shares of Timken India Limited 8.1 — — 8.1 Other comprehensive loss before (0.2) (0.1) (1.7) (2.0) Amounts reclassified from accumulated other — (4.0) 0.1 (3.9) Income tax benefit — 1.0 0.5 1.5 Net current period other comprehensive loss, (0.2) (3.1) (1.1) (4.4) Noncontrolling interest — — — — Net current period other comprehensive income 7.9 (3.1) (1.1) 3.7 Balance at June 30, 2023 $ (227.8) $ 47.7 $ 1.9 $ (178.2) Note 18 - Accumulated Other Comprehensive Income (Loss) (continued) Foreign currency translation adjustments Pension and other postretirement liability adjustments Change in fair value of derivative financial instruments Total Balance at March 31, 2022 $ (100.3) $ 55.1 $ 2.7 $ (42.5) Other comprehensive (loss) income before (113.1) 0.2 3.9 (109.0) Amounts reclassified from accumulated other — (2.1) (0.7) (2.8) Income tax benefit (expense) — 0.5 (1.0) (0.5) Net current period other comprehensive (loss) (113.1) (1.4) 2.2 (112.3) Noncontrolling interest (1.1) — — (1.1) Net current period other comprehensive (loss) (114.2) (1.4) 2.2 (113.4) Balance at June 30, 2022 $ (214.5) $ 53.7 $ 4.9 $ (155.9) Foreign currency translation adjustments Pension and other postretirement liability adjustments Change in fair value of derivative financial instruments Total Balance at December 31, 2021 $ (80.3) $ 56.6 $ 0.7 $ (23.0) Other comprehensive (loss) income before (135.7) 0.4 7.1 (128.2) Amounts reclassified from accumulated other — (4.3) (1.6) (5.9) Income tax benefit (expense) 1.0 (1.3) (0.3) Net current period other comprehensive (loss) (135.7) (2.9) 4.2 (134.4) Noncontrolling interest 1.5 — — 1.5 Net current period other comprehensive (loss) (134.2) (2.9) 4.2 (132.9) Balance at June 30, 2022 $ (214.5) $ 53.7 $ 4.9 $ (155.9) |
Fair Value (Tables)
Fair Value (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of 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 June 30, 2023 and December 31, 2022: June 30, 2023 Total Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 304.2 $ 304.2 $ — $ — Cash and cash equivalents measured at net asset value 40.0 Restricted cash 8.0 8.0 — — Short-term investments 38.2 — 38.2 — Interest rate swap contracts 1.0 — 1.0 — Foreign currency forward contracts 1.7 — 1.7 — Total assets $ 393.1 $ 312.2 $ 40.9 $ — Liabilities: Foreign currency forward contracts $ 30.2 $ — $ 30.2 $ — Total liabilities $ 30.2 $ — $ 30.2 $ — December 31, 2022 Total Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 292.1 $ 289.3 $ 2.8 $ — Cash and cash equivalents measured at net asset value 39.5 Restricted cash 9.1 9.1 — — Short-term investments 39.2 — 39.2 — Interest rate swap contracts 3.1 — 3.1 — Foreign currency forward contracts 4.5 — 4.5 — Total assets $ 387.5 $ 298.4 $ 49.6 $ — Liabilities: Foreign currency forward contracts $ 19.8 $ — $ 19.8 $ — Total liabilities $ 19.8 $ — $ 19.8 $ — |
Derivatives Instruments and H_2
Derivatives Instruments and Hedging Activities (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivatives Not Designated as Hedging Instruments | The following table presents the impact of derivative instruments not designated as hedging instruments for the three and six months ended June 30, 2023 and 2022, respectively, and the related location within the Consolidated Statements of Income: Amount of gain or (loss) recognized in income Three Months Ended Six Months Ended Derivatives not designated as hedging instruments: Location of gain or (loss) recognized in income 2023 2022 2023 2022 Foreign currency forward contracts Other expense, net $ (13.9) $ (6.0) $ (16.5) $ (7.0) |
Acquisitions and Divestitures -
Acquisitions and Divestitures - Acquisitions Narrative (Details) € in Millions, $ in Millions | 6 Months Ended | 12 Months Ended | |||||
Jan. 31, 2023 USD ($) | Nov. 04, 2022 USD ($) | May 31, 2022 USD ($) | Jun. 30, 2023 USD ($) employee acquisition | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) employee | Dec. 31, 2022 EUR (€) employee | |
Business Acquisition [Line Items] | |||||||
Number of acquisitions completed | acquisition | 2 | ||||||
Acquisitions, net of cash acquired | $ 324.6 | $ 152.3 | |||||
2023 Acquisitions | |||||||
Business Acquisition [Line Items] | |||||||
Acquisition related costs | $ 2.7 | ||||||
Nadella | |||||||
Business Acquisition [Line Items] | |||||||
Revenue reported by acquired entity | € | € 100 | ||||||
ARB | |||||||
Business Acquisition [Line Items] | |||||||
Revenue reported by acquired entity | $ 35 | ||||||
Acquisitions, net of cash acquired | 326.9 | ||||||
Cash acquired from acquisition | $ 21 | ||||||
GGB | |||||||
Business Acquisition [Line Items] | |||||||
Revenue reported by acquired entity | 200 | ||||||
Cash acquired from acquisition | $ 19.7 | ||||||
Payments to acquire business | $ 300.2 | ||||||
Spinea | |||||||
Business Acquisition [Line Items] | |||||||
Revenue reported by acquired entity | $ 40 | ||||||
Acquisitions, net of cash acquired | $ 151.2 | ||||||
Cash acquired from acquisition | $ 0.2 | ||||||
Nadella | |||||||
Business Acquisition [Line Items] | |||||||
Number of employees | employee | 450 | 450 | |||||
GGB | |||||||
Business Acquisition [Line Items] | |||||||
Number of employees | employee | 900 |
Acquisitions and Divestitures_2
Acquisitions and Divestitures - Summary of ARB Assets and Liabilities (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Business Acquisition [Line Items] | ||
Goodwill | $ 1,198.4 | $ 1,098.3 |
2023 Acquisitions | ||
Business Acquisition [Line Items] | ||
Accounts receivable | 25 | |
Inventories | 72.6 | |
Other current assets | 5.3 | |
Property, plant and equipment | 34.1 | |
Goodwill | 121.3 | |
Other intangible assets | 136.7 | |
Other non-current assets | 4.9 | |
Total assets acquired | 399.9 | |
Accounts payable, trade | 15.3 | |
Salaries, wages and benefits | 4.7 | |
Income taxes payable | 4.1 | |
Other current liabilities | 6.4 | |
Short-term debt | 5 | |
Long-term debt | 6 | |
Deferred income taxes | 27.7 | |
Other non-current liabilities | 3.8 | |
Total liabilities assumed | 73 | |
Net assets acquired | $ 326.9 |
Acquisitions and Divestitures_3
Acquisitions and Divestitures - Purchase Price Allocation (Details) - 2023 Acquisitions $ in Millions | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Restructuring Cost and Reserve [Line Items] | |
Finite-lived intangible assets acquired | $ 136.7 |
Trade names | |
Restructuring Cost and Reserve [Line Items] | |
Finite-lived intangible assets acquired | $ 18.8 |
Weighted average useful life (in years) | 15 years |
Technology and know-how | |
Restructuring Cost and Reserve [Line Items] | |
Finite-lived intangible assets acquired | $ 29.4 |
Weighted average useful life (in years) | 15 years |
Customer relationships | |
Restructuring Cost and Reserve [Line Items] | |
Finite-lived intangible assets acquired | $ 88.4 |
Weighted average useful life (in years) | 9 years |
Capitalized software | |
Restructuring Cost and Reserve [Line Items] | |
Finite-lived intangible assets acquired | $ 0.1 |
Weighted average useful life (in years) | 2 years |
Acquisitions and Divestitures_4
Acquisitions and Divestitures - Initial Purchase Price Allocation (Details) - USD ($) $ in Millions | 13 Months Ended | ||
Jun. 30, 2023 | Dec. 31, 2022 | May 31, 2022 | |
Assets: | |||
Goodwill | $ 1,198.4 | $ 1,098.3 | |
2022 Acquisitions | |||
Assets: | |||
Accounts receivable | 30.7 | $ 30.6 | |
Adjustments, accounts receivable | 0.1 | ||
Inventories | 52 | 52.3 | |
Adjustments, inventories | (0.3) | ||
Other current assets | 7.6 | 7.6 | |
Property, plant and equipment | 148.9 | 153.6 | |
Adjustments, property plant and equipment | (4.7) | ||
Goodwill | 105.5 | 106.9 | |
Adjustments, goodwill | (1.4) | ||
Other intangible assets | 181.8 | 182.6 | |
Adjustments, other intangible assets | (0.8) | ||
Other assets | 16 | 12.1 | |
Adjustments, other assets | 3.9 | ||
Total assets acquired | 542.5 | 545.7 | |
Adjustments, total assets acquired | (3.2) | ||
Liabilities: | |||
Accounts payable, trade | 16.3 | 16.8 | |
Adjustments, accounts payable trade | (0.5) | ||
Salaries, wages and benefits | 11.8 | 11.8 | |
Income taxes payable | 3.2 | 3.2 | |
Other current liabilities | 6 | 7 | |
Adjustments, other current liabilities | (1) | ||
Accrued pension benefits | 3.5 | 3.2 | |
Adjustments, accrued pension benefits | 0.3 | ||
Deferred income taxes | 30 | 30 | |
Adjustments, other non-current liabilities | 0.3 | ||
Other non-current liabilities | 20.3 | 20 | |
Total liabilities assumed | 91.1 | 92 | |
Adjustments, total liabilities assumed | (0.9) | ||
Net assets acquired | 451.4 | $ 453.7 | |
Adjustments, net assets acquired | $ (2.3) |
Acquisitions and Divestitures_5
Acquisitions and Divestitures - Divestitures Narrative (Details) - USD ($) $ in Millions | 6 Months Ended | |||
Feb. 28, 2023 | Nov. 01, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Proceeds from divestitures, net of cash divested | $ 4.5 | $ 3.1 | ||
Pretax gain | 3.6 | $ 0 | ||
Disposed of by Sale | S.E. Setco Services Company, LLC | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Joint venture percentage | 50% | |||
Proceeds from divestitures, net of cash divested | $ 5.7 | |||
Pretax gain | $ 4.8 | |||
Disposed of by Sale | ADS | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Proceeds from divestitures, net of cash divested | $ 33 | |||
Pretax gain | $ (1.2) |
Segment Information (Details)
Segment Information (Details) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) segment | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Segment Reporting Information [Line Items] | |||||
Number of reportable segments | segment | 2 | ||||
Net sales | $ 1,272.3 | $ 1,153.7 | $ 2,535.1 | $ 2,278.3 | |
Total EBITDA, for reportable segments | 266.4 | 232.6 | 519.6 | 463.3 | |
Unallocated corporate expense | 176.6 | 149.6 | 344.8 | 309.7 | |
Corporate pension and other postretirement benefit related income (expense) | 1 | (11.6) | 1.9 | (14.2) | |
Depreciation and amortization | (51.2) | (40.7) | (96.8) | (82.1) | |
Interest expense | (28.3) | (18.3) | (52.4) | (32.6) | |
Interest income | 1.9 | 1 | 3.4 | 1.6 | |
Assets by Segment: | |||||
Assets | 6,251.3 | 6,251.3 | $ 5,772.4 | ||
Engineered Bearings | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 857.2 | 798.3 | 1,757.9 | 1,570.7 | |
Total EBITDA, for reportable segments | 185.5 | 167.5 | 390.5 | 335.8 | |
Assets by Segment: | |||||
Assets | 3,387.3 | 3,387.3 | 3,270.3 | ||
Industrial Motion | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 415.1 | 355.4 | 777.2 | 707.6 | |
Total EBITDA, for reportable segments | 80.9 | 65.1 | 129.1 | 127.5 | |
Assets by Segment: | |||||
Assets | 2,435.7 | 2,435.7 | 2,070.1 | ||
Corporate | |||||
Segment Reporting Information [Line Items] | |||||
Unallocated corporate expense | (13.2) | $ (13.4) | (30.9) | $ (26.3) | |
Assets by Segment: | |||||
Assets | $ 428.3 | $ 428.3 | $ 432 |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 1,272.3 | $ 1,153.7 | $ 2,535.1 | $ 2,278.3 |
Revenue Benchmark | Customer Concentration Risk | Original equipment manufacturers | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration risk percentage (as a percent) | 60% | 60% | ||
Revenue Benchmark | Customer Concentration Risk | Distribution/end users | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration risk percentage (as a percent) | 40% | 40% | ||
Engineered Bearings | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 857.2 | 798.3 | $ 1,757.9 | $ 1,570.7 |
Industrial Motion | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 415.1 | 355.4 | 777.2 | 707.6 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 536.4 | 499.7 | 1,071.6 | 988.3 |
United States | Engineered Bearings | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 317.6 | 302 | 658.5 | 591.8 |
United States | Industrial Motion | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 218.8 | 197.7 | 413.1 | 396.5 |
Americas excluding the United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 123.9 | 128.9 | 244 | 242.1 |
Americas excluding the United States | Engineered Bearings | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 96 | 104.6 | 188.2 | 197 |
Americas excluding the United States | Industrial Motion | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 27.9 | 24.3 | 55.8 | 45.1 |
Europe / Middle East / Africa | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 312.2 | 259.7 | 609.9 | 524.8 |
Europe / Middle East / Africa | Engineered Bearings | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 175.6 | 155.7 | 359.5 | 318.3 |
Europe / Middle East / Africa | Industrial Motion | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 136.6 | 104 | 250.4 | 206.5 |
China | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 179.4 | 155 | 354.1 | 306.4 |
China | Engineered Bearings | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 156.5 | 133.3 | 314.9 | 262.6 |
China | Industrial Motion | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 22.9 | 21.7 | 39.2 | 43.8 |
Asia-Pacific excluding China | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 120.4 | 110.4 | 255.5 | 216.7 |
Asia-Pacific excluding China | Engineered Bearings | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 111.5 | 102.7 | 236.8 | 201 |
Asia-Pacific excluding China | Industrial Motion | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 8.9 | $ 7.7 | $ 18.7 | $ 15.7 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Disaggregation of Revenue [Line Items] | |||
Amount of revenue for remaining performance obligations | $ 216,000,000 | ||
Impairment losses | $ 0 | $ 0 | |
Revenue Benchmark | Customer Concentration Risk | U.S. Government | |||
Disaggregation of Revenue [Line Items] | |||
Concentration risk percentage (as a percent) | 6% | 6% | |
Revenue Benchmark | Customer Concentration Risk | Service Revenue | |||
Disaggregation of Revenue [Line Items] | |||
Concentration risk percentage (as a percent) | 4% | 4% | |
Revenue Benchmark | Customer Concentration Risk | Transferred Over Time | |||
Disaggregation of Revenue [Line Items] | |||
Concentration risk percentage (as a percent) | 8% | 9% |
Revenue - Schedule of Contract
Revenue - Schedule of Contract with Customer, Asset and Liability (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Contract with Customer, Asset, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | $ 103.9 | $ 104.5 |
Additional unbilled revenue recognized | 207.6 | 396.2 |
Less: amounts billed to customers | (189.7) | (370.5) |
Less: unbilled receivables reclassified to assets held for sale | 0 | (26.3) |
Ending balance | $ 121.8 | $ 103.9 |
Revenue - Schedule of Deferred
Revenue - Schedule of Deferred Revenue (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Deferred Revenue [Roll Forward] | ||
Beginning balance | $ 54.3 | $ 35.8 |
Revenue (cash) received in advance | 105.7 | 54.8 |
Less: revenue recognized | (104.6) | (36.3) |
Ending balance | $ 55.4 | $ 54.3 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Provision for income taxes | $ 47.1 | $ 44 | $ 89.6 | $ 82.2 |
Effective tax rate (as a percent) | 26.70% | 29.40% | 26% | 26.50% |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate (as a percent) | 26.70% | 29.40% | 26% | 26.50% |
Earnings Per Share - Denominato
Earnings Per Share - Denominator of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Numerator: | ||||
Net income attributable to The Timken Company | $ 125.2 | $ 105 | $ 247.5 | $ 223.2 |
Denominator: | ||||
Weighted average number of shares outstanding - basic (in shares) | 71,882,843 | 73,660,410 | 72,162,267 | 74,234,300 |
Effect of dilutive securities: | ||||
Stock options and awards - based on the treasury stock method (in shares) | 630,148 | 522,383 | 745,537 | 642,948 |
Weighted average number of shares outstanding assuming dilution of stock options and awards (in shares) | 72,512,991 | 74,182,793 | 72,907,804 | 74,877,248 |
Basic earnings per share (in dollars per share) | $ 1.74 | $ 1.43 | $ 3.43 | $ 3.01 |
Diluted earnings per share (in dollars per share) | $ 1.73 | $ 1.42 | $ 3.39 | $ 2.98 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Earnings Per Share [Abstract] | ||||
Antidilutive stock options outstanding (in shares) | 0 | 0 | 0 | 0 |
Inventories - Components of Inv
Inventories - Components of Inventories (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Inventories, net: | ||
Manufacturing supplies | $ 42.8 | $ 41.7 |
Raw materials | 140.9 | 132 |
Work in process | 502.4 | 491.2 |
Finished products | 642.8 | 584.8 |
Subtotal | 1,328.9 | 1,249.7 |
Allowance for obsolete and surplus inventory | (77.2) | (58.4) |
Total inventories, net | $ 1,251.7 | $ 1,191.3 |
Inventories - Narrative (Detail
Inventories - Narrative (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Proportion of inventories valued by FIFO method (as a percent) | 61% | |
Proportion of inventories valued by LIFO method (as a percent) | 39% | |
Inventory, LIFO reserve | $ 236.1 | $ 235.4 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Narrative (Details) $ in Millions | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2023 USD ($) | Jun. 30, 2023 USD ($) reporting_unit | Jun. 30, 2022 USD ($) | |
Goodwill [Line Items] | |||
Impairment loss | $ 28.3 | $ 28.3 | |
Amortization of intangible assets, excluding assets acquired | 33.9 | $ 25.3 | |
Future amortization expense 2023 | 67.3 | ||
Future amortization expense 2024 | 66.6 | ||
Future amortization expense 2025 | 66 | ||
Future amortization expense 2026 | 60.3 | ||
Future amortization expense 2027 | $ 58.5 | ||
Engineered Bearings | |||
Goodwill [Line Items] | |||
Number of reporting units | reporting_unit | 1 | ||
Impairment loss | $ 0 | ||
Industrial Motion | |||
Goodwill [Line Items] | |||
Number of reporting units | reporting_unit | 6 | ||
Impairment loss | $ 28.3 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Carrying Value of Goodwill (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Mar. 31, 2023 | Jun. 30, 2023 | |
Goodwill [Roll Forward] | ||
Beginning balance | $ 1,098.3 | $ 1,098.3 |
Acquisitions | 121.3 | |
Impairment loss | (28.3) | (28.3) |
Foreign currency translation adjustments and other changes | 7.1 | |
Ending balance | 1,198.4 | |
Engineered Bearings | ||
Goodwill [Roll Forward] | ||
Beginning balance | 679.8 | 679.8 |
Acquisitions | 0 | |
Impairment loss | 0 | |
Foreign currency translation adjustments and other changes | 2.6 | |
Ending balance | 682.4 | |
Industrial Motion | ||
Goodwill [Roll Forward] | ||
Beginning balance | $ 418.5 | 418.5 |
Acquisitions | 121.3 | |
Impairment loss | (28.3) | |
Foreign currency translation adjustments and other changes | 4.5 | |
Ending balance | $ 516 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Intangible Assets (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Intangible assets subject to amortization: | ||
Gross Carrying Amount | $ 1,305.2 | $ 1,144.7 |
Accumulated Amortization | (573.6) | (540.9) |
Net Carrying Amount | 731.6 | 603.8 |
Intangible assets not subject to amortization: | ||
Intangible assets not subject to amortization | 144.5 | 161.5 |
Gross intangible assets (excluding goodwill) | 1,449.7 | 1,306.2 |
Accumulated Amortization | (573.6) | (540.9) |
Total intangible assets, net carrying amount | 876.1 | 765.3 |
Trade names | ||
Intangible assets not subject to amortization: | ||
Intangible assets not subject to amortization | 135.8 | 152.8 |
FAA air agency certificates | ||
Intangible assets not subject to amortization: | ||
Intangible assets not subject to amortization | 8.7 | 8.7 |
Customer relationships | ||
Intangible assets subject to amortization: | ||
Gross Carrying Amount | 655.8 | 561.5 |
Accumulated Amortization | (201.3) | (183.2) |
Net Carrying Amount | 454.5 | 378.3 |
Intangible assets not subject to amortization: | ||
Accumulated Amortization | (201.3) | (183.2) |
Technology and know-how | ||
Intangible assets subject to amortization: | ||
Gross Carrying Amount | 301.2 | 273.1 |
Accumulated Amortization | (90.1) | (80.4) |
Net Carrying Amount | 211.1 | 192.7 |
Intangible assets not subject to amortization: | ||
Accumulated Amortization | (90.1) | (80.4) |
Trade names | ||
Intangible assets subject to amortization: | ||
Gross Carrying Amount | 50.6 | 18.4 |
Accumulated Amortization | (9.8) | (8.7) |
Net Carrying Amount | 40.8 | 9.7 |
Intangible assets not subject to amortization: | ||
Accumulated Amortization | (9.8) | (8.7) |
Capitalized software | ||
Intangible assets subject to amortization: | ||
Gross Carrying Amount | 290 | 288.4 |
Accumulated Amortization | (267) | (266.3) |
Net Carrying Amount | 23 | 22.1 |
Intangible assets not subject to amortization: | ||
Accumulated Amortization | (267) | (266.3) |
Other | ||
Intangible assets subject to amortization: | ||
Gross Carrying Amount | 7.6 | 3.3 |
Accumulated Amortization | (5.4) | (2.3) |
Net Carrying Amount | 2.2 | 1 |
Intangible assets not subject to amortization: | ||
Accumulated Amortization | $ (5.4) | $ (2.3) |
Other Current Liabilities (Deta
Other Current Liabilities (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Other Liabilities Disclosure [Abstract] | |||
Sales rebates | $ 72 | $ 82.9 | |
Deferred revenue | 55.4 | 54.3 | |
Product warranty | 27.1 | 23.5 | |
Operating lease liabilities | 24.7 | 24.1 | |
Current derivative liability | 30.2 | 19.8 | |
Taxes other than income and payroll taxes | 24.2 | 18.7 | |
Freight and duties | 16.1 | 21.7 | |
Interest | 15.3 | 15 | |
Professional fees | 17.3 | 17.4 | |
Restructuring | 4.1 | 3.1 | $ 7 |
Other | 77.6 | 72.4 | |
Total other current liabilities | $ 364 | $ 352.9 |
Financing Arrangements - Schedu
Financing Arrangements - Schedule of Short-term Debt (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Short-term Debt [Line Items] | ||
Short-term debt | $ 49.8 | $ 46.3 |
Foreign Subsidiary | ||
Short-term Debt [Line Items] | ||
Line of credit stated variable interest rate, low range (as a percent) | 4% | 2.38% |
Line of credit stated variable interest rate, high range (as a percent) | 10.07% | 5.50% |
Short-term debt | $ 49.8 | $ 46.3 |
Financing Arrangements - Narrat
Financing Arrangements - Narrative (Details) € in Millions | 3 Months Ended | 6 Months Ended | |||||
Dec. 05, 2022 USD ($) | Mar. 31, 2022 EUR (€) | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | Mar. 28, 2022 USD ($) | Jun. 25, 2019 covenant | |
Short-term Debt [Line Items] | |||||||
Short-term debt | $ 49,800,000 | $ 46,300,000 | |||||
Borrowings guarantees | 59,100,000 | ||||||
Proceeds from long-term debt | 768,900,000 | $ 684,500,000 | |||||
Fair value of amount outstanding | 2,049,900,000 | 1,916,900,000 | |||||
Unamortized premiums and fees | 12,000,000 | ||||||
Foreign Subsidiary | |||||||
Short-term Debt [Line Items] | |||||||
Maximum borrowing capacity under line of credit | 246,100,000 | ||||||
Short-term debt | 49,800,000 | 46,300,000 | |||||
Borrowings guarantees | 2,700,000 | ||||||
Line of credit facility, remaining borrowing capacity | 193,600,000 | ||||||
Accounts Receivable Facility | |||||||
Short-term Debt [Line Items] | |||||||
Maximum borrowing capacity under line of credit | 100,000,000 | ||||||
Line of credit facility, remaining borrowing capacity | 15,000,000 | ||||||
Long-term line of credit | 85,000,000 | ||||||
Fair value of amount outstanding | 85,000,000 | 85,000,000 | |||||
Senior Credit Facility - Variable Rate | |||||||
Short-term Debt [Line Items] | |||||||
Maximum borrowing capacity under line of credit | $ 750,000,000 | ||||||
Line of credit facility, remaining borrowing capacity | 615,000,000 | ||||||
Fair value of amount outstanding | 133,200,000 | 8,500,000 | |||||
Number of financial covenant | covenant | 2 | ||||||
Senior Credit Facility - Variable Rate | Letter of Credit | |||||||
Short-term Debt [Line Items] | |||||||
Long-term line of credit | 1,800,000 | ||||||
Term Loan - Variable Rate | |||||||
Short-term Debt [Line Items] | |||||||
Proceeds from long-term debt | 400,000,000 | ||||||
Extinguishment of debt, amount | $ 350,000,000 | ||||||
Fair value of amount outstanding | 399,200,000 | 399,100,000 | |||||
Senior Unsecured Notes -4.125% | |||||||
Short-term Debt [Line Items] | |||||||
Proceeds from long-term debt | € | € 6.5 | ||||||
Fair value of amount outstanding | $ 342,900,000 | $ 342,100,000 | |||||
Aggregate principal amount | $ 350,000,000 | ||||||
Debt instrument, interest rate, stated percentage (as a percent) | 4.125% | 4.125% | 4.125% |
Financing Arrangements - Sche_2
Financing Arrangements - Schedule of Long-term Debt (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 | Mar. 28, 2022 |
Debt Instrument [Line Items] | |||
Total debt | $ 2,049.9 | $ 1,916.9 | |
Less: current maturities | 3.4 | 2.7 | |
Long-term debt | $ 2,046.5 | $ 1,914.2 | |
Senior Unsecured Notes - 3.875% | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate, stated percentage (as a percent) | 3.875% | 3.875% | |
Euro Senior Unsecured Notes - 2.02% | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate, stated percentage (as a percent) | 2.02% | 2.02% | |
Series A Medium Term Note | Minimum | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate, stated percentage (as a percent) | 6.74% | 6.74% | |
Series A Medium Term Note | Maximum | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate, stated percentage (as a percent) | 7.76% | 7.76% | |
Senior Credit Facility - Variable Rate | |||
Debt Instrument [Line Items] | |||
Total debt | $ 133.2 | $ 8.5 | |
Debt instrument, interest rate, stated percentage (as a percent) | 6.27% | 5.10% | |
Accounts Receivable Facility - Variable Rate | |||
Debt Instrument [Line Items] | |||
Total debt | $ 85 | $ 85 | |
Long-term debt, percentage bearing variable interest, percentage rate (as a percent) | 5.98% | 5.01% | |
Term Loan - Variable Rate | |||
Debt Instrument [Line Items] | |||
Total debt | $ 399.2 | $ 399.1 | |
Long-term debt, percentage bearing variable interest, percentage rate (as a percent) | 6.33% | 5.55% | |
Senior Unsecured Notes - 3.875% | |||
Debt Instrument [Line Items] | |||
Total debt | $ 349.9 | $ 349.8 | |
Euro Senior Unsecured Notes - 2.02% | |||
Debt Instrument [Line Items] | |||
Total debt | 163.5 | 160.4 | |
Senior Unsecured Notes - 4.5% | |||
Debt Instrument [Line Items] | |||
Total debt | $ 397.4 | $ 397.2 | |
Debt instrument, interest rate, stated percentage (as a percent) | 4.50% | 4.50% | |
Series A Medium Term Note | |||
Debt Instrument [Line Items] | |||
Total debt | $ 154.8 | $ 154.8 | |
Senior Unsecured Notes -4.125% | |||
Debt Instrument [Line Items] | |||
Total debt | $ 342.9 | $ 342.1 | |
Debt instrument, interest rate, stated percentage (as a percent) | 4.125% | 4.125% | 4.125% |
Fixed Rate Bank Loan (BEKA) | |||
Debt Instrument [Line Items] | |||
Total debt | $ 13.2 | $ 13.6 | |
Debt instrument, interest rate, stated percentage (as a percent) | 2.15% | 2.15% | |
Other | |||
Debt Instrument [Line Items] | |||
Total debt | $ 10.8 | $ 6.4 | |
Euro Member Countries, Euro | Senior Credit Facility - Variable Rate | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate, stated percentage (as a percent) | 4.07% | 2.21% |
Financing Arrangements - Sche_3
Financing Arrangements - Schedule of Maturities of Long-term Debt (Details) $ in Millions | Jun. 30, 2023 USD ($) |
Debt Disclosure [Abstract] | |
Total finance lease liabilities | $ 4.9 |
2023 | 3 |
2024 | 444 |
2025 | 28.9 |
2026 | 52.7 |
2027 | 654.5 |
2028 | 522 |
Thereafter | $ 356.9 |
Supply Chain Financing (Details
Supply Chain Financing (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Termination written notice period | 90 days |
Payment term | 90 days |
Purchase Obligation [Roll Forward] | |
Confirmed obligations outstanding, January 1 | $ 14.4 |
Invoices confirmed | 45.4 |
Confirmed invoices paid | (41.3) |
Confirmed obligations outstanding, ending balance | $ 18.5 |
Contingencies - Narrative (Deta
Contingencies - Narrative (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Commitments and Contingencies Disclosure [Abstract] | |||
Accrual for environmental loss contingencies | $ 4.7 | $ 4.8 | |
Standard product warranty accrual | $ 27.1 | $ 23.5 | $ 11.7 |
Contingencies - Schedule of Pro
Contingencies - Schedule of Product Warranty Liability (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Beginning balance, January 1 | $ 23.5 | $ 11.7 |
Expense | 5 | 14.7 |
Payments | (1.4) | (2.9) |
Ending balance | $ 27.1 | $ 23.5 |
Equity - Schedule of Stockholde
Equity - Schedule of Stockholders Equity (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | $ 2,436.3 | $ 2,355 | $ 2,352.9 | $ 2,377.7 |
Net Income | 129.5 | 105.6 | 255.2 | 227.5 |
Foreign currency translation adjustments | (27.9) | (113.1) | (0.2) | (135.7) |
Pension and other postretirement liability adjustments (net of income tax benefits) | (1.6) | (1.4) | (3.1) | (2.9) |
Change in fair value of derivative financial instruments, net of reclassifications | (0.3) | 2.2 | (1.1) | 4.2 |
Dividends declared to noncontrolling interest | 0 | |||
Dividends | (23.8) | (22.9) | (47.4) | (46.4) |
Sale of shares of Timken India Limited | 229 | 229 | ||
Stock-based compensation expense | 6.1 | 8.5 | 17.1 | 15.6 |
Stock purchased at fair market value | (100.5) | (44.3) | (154.5) | (144.3) |
Stock option exercise activity | 4.5 | 0.2 | 17.2 | 1.6 |
Payments related to tax withholding for stock-based compensation | (1.3) | (0.6) | (15.1) | (8.1) |
Ending balance | 2,650 | 2,289.2 | 2,650 | 2,289.2 |
Pension and other postretirement liability adjustment, tax benefit | $ 0.5 | $ 0.5 | $ 1 | $ 1 |
Dividends (in dollars per share) | $ 0.33 | $ 0.31 | $ 0.64 | $ 0.61 |
Stated Capital | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | $ 40.7 | $ 40.7 | $ 40.7 | $ 40.7 |
Ending balance | 40.7 | 40.7 | 40.7 | 40.7 |
Other Paid-In Capital | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | 853.3 | 795.4 | 829.6 | 786.9 |
Sale of shares of Timken India Limited | 194.5 | 194.5 | ||
Stock-based compensation expense | 6.1 | 8.5 | 17.1 | 15.6 |
Stock option exercise activity | 4.5 | 0.2 | 17.2 | 1.6 |
Ending balance | 1,058.4 | 804.1 | 1,058.4 | 804.1 |
Retained Earnings | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | 2,030.8 | 1,711.1 | 1,932.1 | 1,616.4 |
Net Income | 125.2 | 105 | 247.5 | 223.2 |
Dividends | (23.8) | (22.9) | (47.4) | (46.4) |
Ending balance | 2,132.2 | 1,793.2 | 2,132.2 | 1,793.2 |
Accumulated Other Comprehensive Income (Loss) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | (156.8) | (42.5) | (181.9) | (23) |
Foreign currency translation adjustments | (27.6) | (114.2) | (0.2) | (134.2) |
Pension and other postretirement liability adjustments (net of income tax benefits) | (1.6) | (1.4) | (3.1) | (2.9) |
Change in fair value of derivative financial instruments, net of reclassifications | (0.3) | 2.2 | (1.1) | 4.2 |
Sale of shares of Timken India Limited | 8.1 | 8.1 | ||
Ending balance | (178.2) | (155.9) | (178.2) | (155.9) |
Treasury Stock | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | (420) | (233.6) | (352.2) | (126.1) |
Stock purchased at fair market value | (100.5) | (44.3) | (154.5) | (144.3) |
Payments related to tax withholding for stock-based compensation | (1.3) | (0.6) | (15.1) | (8.1) |
Ending balance | (521.8) | (278.5) | (521.8) | (278.5) |
Non controlling Interest | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | 88.3 | 83.9 | 84.6 | 82.8 |
Net Income | 4.3 | 0.6 | 7.7 | 4.3 |
Foreign currency translation adjustments | (0.3) | 1.1 | (1.5) | |
Dividends declared to noncontrolling interest | ||||
Sale of shares of Timken India Limited | 26.4 | 26.4 | ||
Ending balance | $ 118.7 | $ 85.6 | $ 118.7 | $ 85.6 |
Equity - Narrative (Details)
Equity - Narrative (Details) - Timken India Limited - USD ($) shares in Millions, $ in Millions | Jun. 20, 2023 | Jun. 19, 2023 |
Stockholders' Equity [Line Items] | ||
Number of shares issued (in shares) | 7.6 | |
Sale of stock, consideration received on transaction | $ 229 | |
Estimated income tax and transaction cost | $ 55 | |
Ownership percentage | 57.70% | 67.80% |
Impairment and Restructuring _3
Impairment and Restructuring Charges - Restructuring Charges by Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Restructuring Cost and Reserve [Line Items] | ||||
Impairment charges | $ 8.8 | $ 28.3 | $ 8.8 | |
Severance and related benefit costs | $ 2.3 | 1 | 2.9 | 1.3 |
Exit costs | 0.2 | 0.2 | 0.2 | 0.9 |
Total | 2.5 | 10 | 31.4 | 11 |
Engineered Bearings | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Impairment charges | 8.8 | 0 | 8.8 | |
Severance and related benefit costs | 1.5 | 0.6 | 2.2 | 1 |
Exit costs | 0.2 | 0.2 | 0.2 | 0.8 |
Total | 1.7 | 9.6 | 2.4 | 10.6 |
Industrial Motion | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Impairment charges | 0 | 28.3 | 0 | |
Severance and related benefit costs | 0.8 | 0.4 | 0.7 | 0.3 |
Exit costs | 0 | 0 | 0 | 0.1 |
Total | $ 0.8 | $ 0.4 | $ 29 | $ 0.4 |
Impairment and Restructuring _4
Impairment and Restructuring Charges - Narrative (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||||||
Jan. 16, 2023 USD ($) employee | Oct. 31, 2022 employee | Feb. 04, 2020 employee | Jun. 30, 2023 USD ($) | Mar. 31, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) segment | Jun. 30, 2022 USD ($) | |
Restructuring Cost and Reserve [Line Items] | ||||||||
Severance and related benefit costs | $ 2.3 | $ 1 | $ 2.9 | $ 1.3 | ||||
Impairment charges | 8.8 | 28.3 | 8.8 | |||||
Exit costs | 0.2 | 0.2 | $ 0.2 | 0.9 | ||||
Number of reportable segments | segment | 2 | |||||||
Impairment loss | $ 28.3 | $ 28.3 | ||||||
Engineered Bearings | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Severance and related benefit costs | 1.5 | 0.6 | 2.2 | 1 | ||||
Impairment charges | 8.8 | 0 | 8.8 | |||||
Exit costs | 0.2 | 0.2 | 0.2 | 0.8 | ||||
Impairment loss | 0 | |||||||
Industrial Motion | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Severance and related benefit costs | 0.8 | 0.4 | 0.7 | 0.3 | ||||
Impairment charges | 0 | 28.3 | 0 | |||||
Exit costs | 0 | 0 | 0 | 0.1 | ||||
Impairment loss | 28.3 | |||||||
Gaffney, South Carolina | Facility Closing | Engineered Bearings | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Number of employees expected to be affected | employee | 225 | |||||||
Severance and related benefit costs | 0.9 | 1.7 | ||||||
Restructuring charges | 6.1 | |||||||
Gaffney, South Carolina | Facility Closing | Engineered Bearings | Minimum | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Expected costs | $ 10 | |||||||
Gaffney, South Carolina | Facility Closing | Engineered Bearings | Maximum | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Expected costs | $ 12 | |||||||
Russia | Facility Closing | Engineered Bearings | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Impairment charges | $ 8.8 | |||||||
Villa Carcina, Italy | Facility Closing | Engineered Bearings | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Severance and related benefit costs | 0.4 | 0.8 | ||||||
Restructuring charges | 9.8 | |||||||
Number of positions eliminated | employee | 110 | |||||||
Exit costs | $ 0.4 | $ 1 | ||||||
Indianapolis, Indiana | Industrial Motion | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Restructuring charges | $ 14.8 | |||||||
Number of employees expected to be hired | employee | 130 | |||||||
Indianapolis, Indiana | Facility Closing | Industrial Motion | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Number of employees expected to be affected | employee | 240 |
Impairment and Restructuring _5
Impairment and Restructuring Charges - Consolidated Restructuring Accrual (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Restructuring Reserve [Roll Forward] | ||
Beginning balance | $ 3.1 | $ 7 |
Expense | 3.1 | 5.8 |
Payments | (2.1) | (9.7) |
Ending Balance | $ 4.1 | $ 3.1 |
Retirement Benefit Plans - Comp
Retirement Benefit Plans - Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Components of net periodic benefit cost (credit): | ||||
Recognition of net actuarial (gains) losses | $ (1) | $ 11.6 | $ (1.9) | $ 14.2 |
Pension Plan | ||||
Components of net periodic benefit cost (credit): | ||||
Service cost | 0.7 | 2.2 | 1.2 | 4.5 |
Interest cost | 7.4 | 5.5 | 14.3 | 11.1 |
Expected return on plan assets | (4.9) | (7.4) | (9.5) | (15.1) |
Amortization of prior service cost | 0.1 | 0.4 | 0.2 | 0.7 |
Recognition of net actuarial (gains) losses | (1) | 11.6 | (1.9) | 14.2 |
Net periodic benefit cost (credit) | 2.3 | 12.3 | 4.3 | 15.4 |
Pension Plan | U.S. Plans | ||||
Components of net periodic benefit cost (credit): | ||||
Service cost | 0.2 | 1.8 | 0.4 | 3.7 |
Interest cost | 4.5 | 4.1 | 9 | 8.2 |
Expected return on plan assets | (2.1) | (5) | (4.2) | (10.2) |
Amortization of prior service cost | 0.1 | 0.3 | 0.1 | 0.6 |
Recognition of net actuarial (gains) losses | (1) | 11.6 | (1.9) | 14.2 |
Net periodic benefit cost (credit) | 1.7 | 12.8 | 3.4 | 16.5 |
Pension Plan | International Plans | ||||
Components of net periodic benefit cost (credit): | ||||
Service cost | 0.5 | 0.4 | 0.8 | 0.8 |
Interest cost | 2.9 | 1.4 | 5.3 | 2.9 |
Expected return on plan assets | (2.8) | (2.4) | (5.3) | (4.9) |
Amortization of prior service cost | 0 | 0.1 | 0.1 | 0.1 |
Recognition of net actuarial (gains) losses | 0 | 0 | 0 | 0 |
Net periodic benefit cost (credit) | $ 0.6 | $ (0.5) | $ 0.9 | $ (1.1) |
Retirement Benefit Plans - Narr
Retirement Benefit Plans - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Recognition of net actuarial gain (loss) | $ 1 | $ (11.6) | $ 1.9 | $ (14.2) |
Pension Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Recognition of net actuarial gain (loss) | 1 | (11.6) | 1.9 | (14.2) |
U.S. Plans | Pension Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Recognition of net actuarial gain (loss) | $ 1 | $ (11.6) | $ 1.9 | $ (14.2) |
Other Postretirement Benefit _3
Other Postretirement Benefit Plans (Details) - Postretirement Plan - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Net periodic benefit credit: | ||||
Service cost | $ 0 | $ 0.1 | $ 0 | $ 0.1 |
Interest cost | 0.5 | 0.3 | 1 | 0.7 |
Amortization of prior service credit | (2.1) | (2.5) | (4.2) | (5) |
Net periodic benefit cost (credit) | $ (1.6) | $ (2.1) | $ (3.2) | $ (4.2) |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | $ 2,436.3 | $ 2,355 | $ 2,352.9 | $ 2,377.7 |
Sale of shares of Timken India Limited | 8.1 | 8.1 | ||
Other comprehensive (loss) income before reclassifications and income taxes | (28.9) | (109) | (2) | (128.2) |
Amounts reclassified from accumulated other comprehensive (loss) income before income taxes | (1.6) | (2.8) | (3.9) | (5.9) |
Income tax benefit | 0.7 | (0.5) | 1.5 | (0.3) |
Other comprehensive loss, net of tax | (29.8) | (112.3) | (4.4) | (134.4) |
Noncontrolling interest | 0.3 | (1.1) | 0 | 1.5 |
Net current period other comprehensive income (loss), net of income taxes, noncontrolling interest and sale of shares of Timken India Limited | (21.4) | (113.4) | 3.7 | (132.9) |
Ending balance | 2,650 | 2,289.2 | 2,650 | 2,289.2 |
Total | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | (156.8) | (42.5) | (181.9) | (23) |
Ending balance | (178.2) | (155.9) | (178.2) | (155.9) |
Foreign currency translation adjustments | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | (208.3) | (100.3) | (235.7) | (80.3) |
Sale of shares of Timken India Limited | 8.1 | 8.1 | ||
Other comprehensive (loss) income before reclassifications and income taxes | (27.9) | (113.1) | (0.2) | (135.7) |
Amounts reclassified from accumulated other comprehensive (loss) income before income taxes | 0 | 0 | 0 | 0 |
Income tax benefit | 0 | 0 | 0 | |
Other comprehensive loss, net of tax | (27.9) | (113.1) | (0.2) | (135.7) |
Noncontrolling interest | 0.3 | (1.1) | 0 | 1.5 |
Net current period other comprehensive income (loss), net of income taxes, noncontrolling interest and sale of shares of Timken India Limited | (19.5) | (114.2) | 7.9 | (134.2) |
Ending balance | (227.8) | (214.5) | (227.8) | (214.5) |
Pension and other postretirement liability adjustments | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | 49.3 | 55.1 | 50.8 | 56.6 |
Sale of shares of Timken India Limited | 0 | 0 | ||
Other comprehensive (loss) income before reclassifications and income taxes | (0.1) | 0.2 | (0.1) | 0.4 |
Amounts reclassified from accumulated other comprehensive (loss) income before income taxes | (2) | (2.1) | (4) | (4.3) |
Income tax benefit | 0.5 | 0.5 | 1 | 1 |
Other comprehensive loss, net of tax | (1.6) | (1.4) | (3.1) | (2.9) |
Noncontrolling interest | 0 | 0 | 0 | 0 |
Net current period other comprehensive income (loss), net of income taxes, noncontrolling interest and sale of shares of Timken India Limited | (1.6) | (1.4) | (3.1) | (2.9) |
Ending balance | 47.7 | 53.7 | 47.7 | 53.7 |
Change in fair value of derivative financial instruments | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | 2.2 | 2.7 | 3 | 0.7 |
Sale of shares of Timken India Limited | 0 | 0 | ||
Other comprehensive (loss) income before reclassifications and income taxes | (0.9) | 3.9 | (1.7) | 7.1 |
Amounts reclassified from accumulated other comprehensive (loss) income before income taxes | 0.4 | (0.7) | 0.1 | (1.6) |
Income tax benefit | 0.2 | (1) | 0.5 | (1.3) |
Other comprehensive loss, net of tax | (0.3) | 2.2 | (1.1) | 4.2 |
Noncontrolling interest | 0 | 0 | 0 | 0 |
Net current period other comprehensive income (loss), net of income taxes, noncontrolling interest and sale of shares of Timken India Limited | (0.3) | 2.2 | (1.1) | 4.2 |
Ending balance | $ 1.9 | $ 4.9 | $ 1.9 | $ 4.9 |
Fair Value - Fair Value on Recu
Fair Value - Fair Value on Recurring Basis (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Assets and Liabilities Measured at fair value on a recurring basis | ||
Restricted cash | $ 8 | $ 9.1 |
Fair Value, Recurring | ||
Assets and Liabilities Measured at fair value on a recurring basis | ||
Restricted cash | 8 | 9.1 |
Short-term investments | 38.2 | 39.2 |
Interest rate swap contracts | 1 | 3.1 |
Foreign currency forward contracts | 1.7 | 4.5 |
Total assets | 393.1 | 387.5 |
Foreign currency forward contracts | 30.2 | 19.8 |
Total liabilities | 30.2 | 19.8 |
Fair Value, Recurring | Level 1, 2 and 3 | ||
Assets and Liabilities Measured at fair value on a recurring basis | ||
Cash and cash equivalents | 304.2 | 292.1 |
Fair Value, Recurring | Level 1 | ||
Assets and Liabilities Measured at fair value on a recurring basis | ||
Cash and cash equivalents | 304.2 | 289.3 |
Restricted cash | 8 | 9.1 |
Short-term investments | 0 | 0 |
Interest rate swap contracts | 0 | 0 |
Foreign currency forward contracts | 0 | 0 |
Total assets | 312.2 | 298.4 |
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 | 2.8 |
Restricted cash | 0 | 0 |
Short-term investments | 38.2 | 39.2 |
Interest rate swap contracts | 1 | 3.1 |
Foreign currency forward contracts | 1.7 | 4.5 |
Total assets | 40.9 | 49.6 |
Foreign currency forward contracts | 30.2 | 19.8 |
Total liabilities | 30.2 | 19.8 |
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 |
Interest rate swap contracts | 0 | 0 |
Foreign currency forward contracts | 0 | 0 |
Total assets | 0 | 0 |
Foreign currency forward contracts | 0 | 0 |
Total liabilities | 0 | 0 |
Fair Value, Recurring | Fair Value Measured at Net Asset Value Per Share | ||
Assets and Liabilities Measured at fair value on a recurring basis | ||
Cash and cash equivalents | $ 40 | $ 39.5 |
Fair Value - Narrative (Details
Fair Value - Narrative (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Fair Value Disclosures [Abstract] | ||
Long-term fixed-rate debt, fair value | $ 1,361.3 | $ 1,353.5 |
Long-term fixed-rate debt, carrying value | $ 1,421.7 | $ 1,417.9 |
Derivatives Instruments and H_3
Derivatives Instruments and Hedging Activities - Narrative (Details) € in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | |||||||
Sep. 15, 2020 EUR (€) | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Mar. 31, 2022 EUR (€) | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | Mar. 31, 2022 USD ($) | Sep. 08, 2020 USD ($) | |
Derivative [Line Items] | |||||||||
Derivative, amount of hedged item | $ 350 | $ 100 | |||||||
Proceeds from long-term debt | $ 768.9 | $ 684.5 | |||||||
Amount reclassified from accumulated other comprehensive loss | $ (1.6) | $ (2.8) | (3.9) | $ (5.9) | |||||
Derivative instrument term | 10 years | ||||||||
Derivative, notional amount | 573.1 | $ 573.1 | $ 635.6 | ||||||
Designated as Hedging Instrument | |||||||||
Derivative [Line Items] | |||||||||
Derivative instrument term | 18 months | ||||||||
Derivative, notional amount | 74.8 | $ 74.8 | 82.3 | ||||||
Not Designated as Hedging Instrument | |||||||||
Derivative [Line Items] | |||||||||
Derivative, notional amount | 498.3 | 498.3 | $ 553.3 | ||||||
2027 Notes | |||||||||
Derivative [Line Items] | |||||||||
Proceeds from long-term debt | € | € 150 | ||||||||
Senior Unsecured Notes -4.125% | |||||||||
Derivative [Line Items] | |||||||||
Proceeds from long-term debt | € | € 6.5 | ||||||||
Net Investment Hedging | |||||||||
Derivative [Line Items] | |||||||||
Derivative, amount of hedged item | € | € 54.5 | ||||||||
Amount reclassified from accumulated other comprehensive loss | $ 0.4 | $ 1.1 |
Derivatives Instruments and H_4
Derivatives Instruments and Hedging Activities - Cash Flow Hedging Strategy (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||
Amount of gain or (loss) recognized in income | $ (13.9) | $ (6) | $ (16.5) | $ (7) |