UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 30, 2022~~March 31, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 1-1169

THE TIMKEN COMPANY

(Exact name of registrant as specified in its charter)


Ohio		34-0577130
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

4500 Mount Pleasant Street NW
North Canton	Ohio	44720-5450
(Address of principal executive offices)		(Zip Code)

234.262.3000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Shares, without par value

TKR

The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer's classes of common shares, as of the latest practicable date.

Class

Outstanding at ~~September 30, 2022~~March 31, 2023

Common Shares, without par value

~~72,743,592~~72,395,215 shares

Table of Contents

THE TIMKEN COMPANY

INDEX TO FORM 10-Q REPORT


			PAGE
I.	PART I.
	Item 1.	Financial Statements	1
	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	2825
	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	4742
	Item 4.	Controls and Procedures	4742
II.	PART II.
	Item 1.	Legal Proceedings	4843
	Item1A.	Risk Factors	4843
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4843
	Item 6.	Exhibits	4944

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

THE TIMKEN COMPANY AND SUBSIDIARIES

Consolidated Statements of Income

(Unaudited)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021				2023		2022
(Dollars in millions, except per share data)	(Dollars in millions, except per share data)									(Dollars in millions, except per share data)
Net sales	Net sales	$	1,136.4	$	1,037.3	$	3,414.7	$	3,125.6	Net sales		$	1,262.8	$	1,124.6
Cost of products sold	Cost of products sold	813.6		769.4		2,422.7		2,256.2		Cost of products sold		846.0		786.3
Gross Profit		322.8		267.9		992.0		869.4

Selling, general and administrative expenses	Selling, general and administrative expenses	159.8		140.7		469.8		434.2		Selling, general and administrative expenses		186.8		154.1

Amortization of intangible assets										Amortization of intangible assets		13.5		10.9
Impairment and restructuring charges	Impairment and restructuring charges	31.3		2.9		42.3		8.2		Impairment and restructuring charges		28.9		1.0

Operating Income	Operating Income	131.7		124.3		479.9		427.0		Operating Income		187.6		172.3
Interest expense	Interest expense	(19.3)		(14.8)		(51.9)		(45.0)		Interest expense		(24.1)		(14.3)
Interest income	Interest income	1.1		0.5		2.7		1.7		Interest income		1.5		0.6

Non-service pension and other postretirement income (expense)		1.3		0.5		(5.3)		5.9
Non-service pension and other postretirement income										Non-service pension and other postretirement income		0.1		1.3
Other income, net	Other income, net	2.3		1.5		1.4		0.3		Other income, net		3.1		0.2
Income Before Income Taxes	Income Before Income Taxes	117.1		112.0		426.8		389.9		Income Before Income Taxes		168.2		160.1
Provision for income taxes	Provision for income taxes	26.7		20.4		108.9		75.1		Provision for income taxes		42.5		38.2
Net Income	Net Income	90.4		91.6		317.9		314.8		Net Income		125.7		121.9
Less: Net income attributable to noncontrolling interest	Less: Net income attributable to noncontrolling interest	3.4		3.5		7.7		8.6		Less: Net income attributable to noncontrolling interest		3.4		3.7
Net Income Attributable to The Timken Company	Net Income Attributable to The Timken Company	$	87.0	$	88.1	$	310.2	$	306.2	Net Income Attributable to The Timken Company		$	122.3	$	118.2

Net Income per Common Share Attributable to The Timken Company Common Shareholders	Net Income per Common Share Attributable to The Timken Company Common Shareholders									Net Income per Common Share Attributable to The Timken Company Common Shareholders
Basic earnings per share	Basic earnings per share	$	1.19	$	1.16	$	4.20	$	4.03	Basic earnings per share		$	1.69	$	1.58

Diluted earnings per share	Diluted earnings per share	$	1.18	$	1.14	$	4.16	$	3.97	Diluted earnings per share		$	1.67	$	1.56

See accompanying Notes to the Consolidated Financial Statements.

Consolidated Statements of Comprehensive Income

(Unaudited)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021				2023		2022
(Dollars in millions)	(Dollars in millions)									(Dollars in millions)
Net Income	Net Income	$	90.4	$	91.6	$	317.9	$	314.8	Net Income		$	125.7	$	121.9
Other comprehensive (loss) income, net of tax:
Other comprehensive income (loss), net of tax:										Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	Foreign currency translation adjustments	(136.8)		(32.9)		(272.5)		(54.1)		Foreign currency translation adjustments		27.7		(22.6)
Pension and postretirement liability adjustments	Pension and postretirement liability adjustments	(1.4)		(1.5)		(4.3)		(4.8)		Pension and postretirement liability adjustments		(1.5)		(1.5)

Change in fair value of derivative financial instruments	Change in fair value of derivative financial instruments	1.8		2.5		6.0		4.5		Change in fair value of derivative financial instruments		(0.8)		2.0
Other comprehensive loss, net of tax		(136.4)		(31.9)		(270.8)		(54.4)
Comprehensive income (loss), net of tax		(46.0)		59.7		47.1		260.4
Other comprehensive income (loss), net of tax										Other comprehensive income (loss), net of tax		25.4		(22.1)
Comprehensive income, net of tax										Comprehensive income, net of tax		151.1		99.8
Less: comprehensive income attributable to noncontrolling interest	Less: comprehensive income attributable to noncontrolling interest	0.1		3.7		2.9		7.8		Less: comprehensive income attributable to noncontrolling interest		3.7		1.1
Comprehensive income (loss) attributable to The Timken Company		$	(46.1)	$	56.0	$	44.2	$	252.6
Comprehensive income attributable to The Timken Company										Comprehensive income attributable to The Timken Company		$	147.4	$	98.7

See accompanying Notes to the Consolidated Financial Statements.

Table of Contents

Consolidated Balance Sheets


		(Unaudited)					(Unaudited)
(Dollars in millions)	(Dollars in millions)	September 30, 2022		December 31, 2021		(Dollars in millions)	March 31, 2023		December 31, 2022
ASSETS	ASSETS					ASSETS
Current Assets	Current Assets					Current Assets
Cash and cash equivalents	Cash and cash equivalents	$	300.9	$	257.1	Cash and cash equivalents	$	330.5	$	331.6
Restricted cash	Restricted cash	0.7		0.8		Restricted cash	8.6		9.1
Accounts receivable, less allowances (2022 – $16.1 million; 2021 – $16.9 million)		735.5		626.4
Accounts receivable, less allowances (2023 – $17.6 million; 2022 – $17.9 million)						Accounts receivable, less allowances (2023 – $17.6 million; 2022 – $17.9 million)	758.1		699.6
Unbilled receivables	Unbilled receivables	83.6		104.5		Unbilled receivables	115.1		103.9
Inventories, net	Inventories, net	1,132.6		1,042.7		Inventories, net	1,209.4		1,191.3
Deferred charges and prepaid expenses	Deferred charges and prepaid expenses	40.1		32.2		Deferred charges and prepaid expenses	47.8		44.4
Other current assets	Other current assets	160.1		149.8		Other current assets	122.8		124.1

Total Current Assets	Total Current Assets	2,453.5		2,213.5		Total Current Assets	2,592.3		2,504.0
Property, Plant and Equipment, net	Property, Plant and Equipment, net	1,069.0		1,055.3		Property, Plant and Equipment, net	1,228.5		1,207.4
Other Assets	Other Assets					Other Assets
Goodwill	Goodwill	979.1		1,022.7		Goodwill	1,075.8		1,098.3
Other intangible assets	Other intangible assets	594.7		668.8		Other intangible assets	755.3		765.3
Operating lease assets	Operating lease assets	102.4		118.9		Operating lease assets	108.2		101.4

Deferred income taxes	Deferred income taxes	56.7		67.6		Deferred income taxes	67.2		71.0
Other non-current assets	Other non-current assets	26.5		23.9		Other non-current assets	25.7		25.0

Total Other Assets	Total Other Assets	1,759.4		1,901.9		Total Other Assets	2,032.2		2,061.0
Total Assets	Total Assets	$	5,281.9	$	5,170.7	Total Assets	$	5,853.0	$	5,772.4
LIABILITIES AND EQUITY	LIABILITIES AND EQUITY					LIABILITIES AND EQUITY
Current Liabilities	Current Liabilities					Current Liabilities

Accounts payable, trade	Accounts payable, trade	373.4		430.0		Accounts payable, trade	390.5		403.9
Short-term debt, including current portion of long-term debt	Short-term debt, including current portion of long-term debt	371.8		53.8		Short-term debt, including current portion of long-term debt	48.6		49.0
Salaries, wages and benefits	Salaries, wages and benefits	142.8		136.0		Salaries, wages and benefits	131.9		155.3
Income taxes payable	Income taxes payable	27.6		26.2		Income taxes payable	31.9		51.3

Other current liabilities	Other current liabilities	293.4		250.6		Other current liabilities	337.1		352.9

Total Current Liabilities	Total Current Liabilities	1,209.0		896.6		Total Current Liabilities	940.0		1,012.4
Non-Current Liabilities	Non-Current Liabilities					Non-Current Liabilities
Long-term debt	Long-term debt	1,411.3		1,411.1		Long-term debt	1,978.8		1,914.2
Accrued pension benefits	Accrued pension benefits	162.0		155.6		Accrued pension benefits	160.1		160.3
Accrued postretirement benefits	Accrued postretirement benefits	44.2		45.8		Accrued postretirement benefits	31.5		31.4
Long-term operating lease liabilities	Long-term operating lease liabilities	67.1		77.6		Long-term operating lease liabilities	67.6		65.2
Deferred income taxes	Deferred income taxes	114.0		121.4		Deferred income taxes	138.0		139.8
Other non-current liabilities	Other non-current liabilities	95.5		84.9		Other non-current liabilities	100.7		96.2

Total Non-Current Liabilities	Total Non-Current Liabilities	1,894.1		1,896.4		Total Non-Current Liabilities	2,476.7		2,407.1
Shareholders’ Equity	Shareholders’ Equity					Shareholders’ Equity
Class I and II Serial Preferred Stock, without par value:	Class I and II Serial Preferred Stock, without par value:					Class I and II Serial Preferred Stock, without par value:
Authorized – 10,000,000 shares each class, none issued	Authorized – 10,000,000 shares each class, none issued	—		—		Authorized – 10,000,000 shares each class, none issued	—		—
Common shares, without par value:	Common shares, without par value:					Common shares, without par value:
Authorized – 200,000,000 shares	Authorized – 200,000,000 shares					Authorized – 200,000,000 shares
Issued (including shares in treasury) (2022 – 77,665,364 shares; 2021 – 77,090,104 shares)
Issued (including shares in treasury) (2023 – 78,417,035 shares; 2022 – 77,767,640 shares)						Issued (including shares in treasury) (2023 – 78,417,035 shares; 2022 – 77,767,640 shares)
Stated capital	Stated capital	40.7		40.7		Stated capital	40.7		40.7
Other paid-in capital	Other paid-in capital	817.2		786.9		Other paid-in capital	853.3		829.6
Retained earnings	Retained earnings	1,857.4		1,616.4		Retained earnings	2,030.8		1,932.1
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(289.0)		(23.0)		Accumulated other comprehensive loss	(156.8)		(181.9)
Treasury shares at cost (2022 – 4,921,772 shares; 2021 – 1,715,282 shares)		(332.7)		(126.1)
Treasury shares at cost (2023 – 6,021,820 shares; 2022 – 5,188,257 shares)						Treasury shares at cost (2023 – 6,021,820 shares; 2022 – 5,188,257 shares)	(420.0)		(352.2)
Total Shareholders’ Equity	Total Shareholders’ Equity	2,093.6		2,294.9		Total Shareholders’ Equity	2,348.0		2,268.3
Noncontrolling Interest	Noncontrolling Interest	85.2		82.8		Noncontrolling Interest	88.3		84.6
Total Equity	Total Equity	2,178.8		2,377.7		Total Equity	2,436.3		2,352.9
Total Liabilities and Equity	Total Liabilities and Equity	$	5,281.9	$	5,170.7	Total Liabilities and Equity	$	5,853.0	$	5,772.4

See accompanying Notes to the Consolidated Financial Statements.

Table of Contents

Consolidated Statements of Cash Flows

(Unaudited)


		Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021			2023		2022
(Dollars in millions)	(Dollars in millions)					(Dollars in millions)
CASH PROVIDED (USED)	CASH PROVIDED (USED)					CASH PROVIDED (USED)
Operating Activities	Operating Activities					Operating Activities
Net income	Net income	$	317.9	$	314.8	Net income	$	125.7	$	121.9
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	122.0		126.5		Depreciation and amortization	45.6		41.4
Impairment charges	Impairment charges	38.3		4.5		Impairment charges	28.3		—
Loss on sale of assets	Loss on sale of assets	1.0		1.0		Loss on sale of assets	0.2		0.6

Loss on divestiture		2.1		—
Acquisition-related gain		—		(0.9)
Deferred income tax provision (benefit)		4.1		(6.4)
Gain on divestitures						Gain on divestitures	(4.0)		—

Deferred income tax provision						Deferred income tax provision	2.8		1.8
Stock-based compensation expense	Stock-based compensation expense	22.3		15.6		Stock-based compensation expense	11.0		7.1
Pension and other postretirement expense	Pension and other postretirement expense	11.9		2.9		Pension and other postretirement expense	0.4		1.0
Pension and other postretirement benefit contributions and payments	Pension and other postretirement benefit contributions and payments	(11.5)		(18.2)		Pension and other postretirement benefit contributions and payments	(4.8)		(5.2)

Changes in operating assets and liabilities:	Changes in operating assets and liabilities:					Changes in operating assets and liabilities:
Accounts receivable	Accounts receivable	(157.0)		(127.5)		Accounts receivable	(50.3)		(118.2)
Unbilled receivables	Unbilled receivables	(5.2)		25.1		Unbilled receivables	(11.1)		16.1
Inventories	Inventories	(147.1)		(144.2)		Inventories	6.1		(70.2)
Accounts payable, trade	Accounts payable, trade	(12.6)		60.5		Accounts payable, trade	(9.4)		7.7
Other accrued expenses	Other accrued expenses	45.8		50.2		Other accrued expenses	(44.8)		(19.5)
Income taxes	Income taxes	3.2		(0.3)		Income taxes	(15.0)		6.3
Other, net	Other, net	(12.9)		(19.0)		Other, net	(2.1)		8.0

Net Cash Provided by Operating Activities		222.3		284.6
Net Cash Provided by (Used in) Operating Activities						Net Cash Provided by (Used in) Operating Activities	78.6		(1.2)
Investing Activities	Investing Activities					Investing Activities
Capital expenditures	Capital expenditures	(122.5)		(103.6)		Capital expenditures	(41.7)		(34.3)
Acquisitions, net of cash acquired of $0.2 million		(152.4)		(7.2)
Proceeds from disposal of property, plant and equipment		3.3		—
Acquisitions, net of cash acquired						Acquisitions, net of cash acquired	(29.2)		—

Proceeds from divestitures, net of cash divested	Proceeds from divestitures, net of cash divested	1.0		—		Proceeds from divestitures, net of cash divested	5.7		—
Investments in short-term marketable securities, net	Investments in short-term marketable securities, net	27.8		(5.4)		Investments in short-term marketable securities, net	0.8		(0.8)
Other, net	Other, net	0.8		0.3		Other, net	(0.1)		0.1

Net Cash Used in Investing Activities	Net Cash Used in Investing Activities	(242.0)		(115.9)		Net Cash Used in Investing Activities	(64.5)		(35.0)
Financing Activities	Financing Activities					Financing Activities
Cash dividends paid to shareholders	Cash dividends paid to shareholders	(69.2)		(69.5)		Cash dividends paid to shareholders	(23.6)		(23.5)
Purchase of treasury shares	Purchase of treasury shares	(193.3)		(56.6)		Purchase of treasury shares	(54.0)		(100.0)
Proceeds from exercise of stock options	Proceeds from exercise of stock options	4.2		25.4		Proceeds from exercise of stock options	12.7		1.4
Payments related to tax withholding for stock-based compensation	Payments related to tax withholding for stock-based compensation	(9.5)		(23.5)		Payments related to tax withholding for stock-based compensation	(13.8)		(7.5)
Borrowings on accounts receivable facility	Borrowings on accounts receivable facility	197.0		186.1		Borrowings on accounts receivable facility	29.0		100.0
Payments on accounts receivable facility	Payments on accounts receivable facility	(197.0)		(244.1)		Payments on accounts receivable facility	(14.0)		(100.0)
Proceeds from long-term debt	Proceeds from long-term debt	684.5		215.0		Proceeds from long-term debt	137.0		524.3
Payments on long-term debt	Payments on long-term debt	(347.7)		(224.4)		Payments on long-term debt	(82.7)		(182.7)
Deferred financing costs	Deferred financing costs	(3.5)		—		Deferred financing costs	—		(2.6)
Short-term debt activity, net	Short-term debt activity, net	17.0		(30.3)		Short-term debt activity, net	(8.1)		(11.1)
Noncontrolling interest dividends paid		(0.5)		(0.5)

Other	Other	6.5		—		Other	—		6.4

Net Cash Provided by (Used in) Financing Activities		88.5		(222.4)
Net Cash (Used in) Provided by Financing Activities						Net Cash (Used in) Provided by Financing Activities	(17.5)		204.7
Effect of exchange rate changes on cash	Effect of exchange rate changes on cash	(25.1)		(4.8)		Effect of exchange rate changes on cash	1.8		(1.2)
Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash		43.7		(58.5)
(Decrease) Increase in Cash, Cash Equivalents and Restricted Cash						(Decrease) Increase in Cash, Cash Equivalents and Restricted Cash	(1.6)		167.3
Cash, cash equivalents and restricted cash at beginning of year	Cash, cash equivalents and restricted cash at beginning of year	257.9		321.1		Cash, cash equivalents and restricted cash at beginning of year	340.7		257.9
Cash, Cash Equivalents and Restricted Cash at End of Period	Cash, Cash Equivalents and Restricted Cash at End of Period	$	301.6	$	262.6	Cash, Cash Equivalents and Restricted Cash at End of Period	$	339.1	$	425.2

See accompanying Notes to the Consolidated Financial Statements.

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(Dollars in millions, except per share data)

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, ~~2021.~~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 months ended March 31, 2022.

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, ~~2021.~~2022.

Recent Accounting Pronouncements:

New Accounting Guidance Adopted:

In ~~October 2021,~~September 2022, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") ASU 2021-08, "Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers." ASU 2021-08 requires contract assets and contract liabilities acquired in a business combination to be recognized in accordance with ASC Topic 606 as if the acquirer had originated the contracts. This new guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted. The Company adopted ASU 2021-08 effective January 1, 2022, and the impact of the adoption was not material to the Company's results of operations and financial condition.

~~New Accounting Guidance Issued and Not Yet Adopted:~~

~~In September 2022, the FASB issued 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. ~~The Company is currently evaluating~~ Refer to Note 12 - Supply Chain Financing inthe ~~impact of~~Notes to the ~~new guidance.~~

In November 2021, the FASB issued ASU 2021-10, "Government Assistance (Topic 832)." ASU 2021-10 is intended to increase transparency of government assistance by requiring entities to disclose the types of government assistance, the entity's accountingConsolidated Financial Statements for government assistance, and the effect of the government assistance on an entity's financial statements. This new guidance is effective for all entities for annual reporting periods beginning after December 15, 2021. The Company is currently evaluating the impact of the new guidance.additional information.

Table of Contents

~~Note 2 - Significant Accounting Policies (continued)~~

In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting." ASU 2020-04 is intended to provide temporary optional expedients and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burden related to the expected market transition from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates. This guidance is available immediately and may be implemented in any period prior to the guidance expiration on December 31, 2022. The Company is currently assessing which of its various contracts will require an update for a new reference rate and will determine the timing for implementation of this guidance after completing that analysis. The Company continues to monitor future amendments, such as the current proposal by the FASB to defer the sunset date of reference rate reform relief by two years to December 31, 2024, after which entities would no longer be permitted to apply the relief in Topic 848.

Note 3 - Acquisitions and Divestitures

Acquisitions:

On ~~May~~January 31, ~~2022,~~2023, the Company ~~completed~~acquired the ~~acquisition~~assets of ~~Spinea, s.r.o.~~American Roller Bearing Company ("~~Spinea"~~ARB"), a ~~European technology leader and~~North Carolina-based manufacturer of ~~highly engineered cycloidal reduction gears~~industrial bearings. ARB, which boasts a large U.S. installed base and ~~actuators, with estimated 2022 full year sales of approximately $40.0 million. Spinea’s solutions primarily serve high-precision automation~~strong aftermarket business, operates manufacturing facilities in Hiddenite and ~~robotics applications in the factory automation sector. Spinea is located in Presov, Slovakia.~~Morganton, North Carolina. The total purchase price for this acquisition was ~~$152.4~~$32.0 million, ~~net~~including $0.5 million of the purchase price that was held back for the post-closing settlement of working capital. ARB generated sales of approximately $35 million in 2022 and the transaction was funded with cash ~~acquired of $0.2 million, subject to customary post-closing adjustments. Based~~ on ~~markets and customers served, results~~hand. Results for ~~Spinea~~ARB are reported in the ~~Process Industries~~Engineered Bearings segment.

The following table presents the purchase price allocation at fair value for the ~~Spinea~~ARB acquisition as of ~~September 30, 2022.~~March 31, 2023.

Initial Purchase
Price Allocation

Assets:

Accounts receivable

~~2.1~~4.7

Inventories

~~20.9~~19.2

Other current assets

~~2.9~~0.6

Property, plant and equipment

~~82.0~~12.8

~~Goodwill~~

~~39.2~~

Other intangible assets

~~32.1~~0.1

Total assets acquired

~~179.2~~37.4

Liabilities:

Accounts payable, trade

~~7.4~~2.8

Salaries, wages and benefits

~~1.5~~0.1

Other current liabilities

~~1.2~~

~~Long-term debt~~

~~0.2~~3.0

~~Deferred income taxes~~

~~1.0~~

~~Other non-current liabilities~~

~~15.5~~

Total liabilities assumed

~~26.8~~5.9

Net assets acquired

~~152.4~~31.5

~~Table of Contents~~

~~Note 3 - Acquisitions and Divestitures (continued)~~

~~The following table summarizes the preliminary purchase price allocation for identifiable intangible assets acquired in 2022:~~


	~~Preliminary Purchase Price Allocation~~
			~~Weighted - Average Life~~
~~Trade names~~	$	~~8.2~~	~~20 years~~
~~Technology and know-how~~	~~6.1~~		~~6 years~~
~~Customer relationships~~	~~17.2~~		~~17 years~~
~~Capitalized software~~	~~0.6~~		~~2 years~~
~~Total intangible assets~~	$	~~32.1~~

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.

The amounts in the table above represent the preliminary purchase price allocation for ~~Spinea.~~ARB. This purchase price allocation, including the residual amount allocated to goodwill or the recognition of a bargain purchase price gain, is based on preliminary information and is subject to change as additional information concerning final asset and liability valuations are ~~obtained.~~obtained and management completes its reassessment of the measurement period procedures based on the results of the preliminary valuation. As of ~~September 30, 2022,~~March 31, 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.

On ~~August 20, 2021,~~November 4, 2022, the Company completed the acquisition of the assets of Intelligent Machine Solutions ("iMS"), a manufacturer of industrial robotics and automation solutions, with annual sales of approximately $6.0 million. iMS is headquartered in Norton Shores, Michigan. The total purchase price for this acquisition was ~~$7.7 million, including post-closing adjustments. In addition, the seller has the opportunity to earn~~ $3.0 million of contingent performance-based consideration between January 1, 2022 and June 30, 2024. This additional component will be accounted for as compensation expense over that period. Based on markets and customers served, results for iMS are primarily reported in the Process Industries segment.

~~The following table presents the final purchase price allocation at fair value for the iMS acquisition:~~


	~~Final Purchase Price Allocation~~
~~Total assets acquired~~	$	~~9.8~~
~~Total liabilities assumed~~	~~2.1~~
~~Net assets acquired~~	$	~~7.7~~

~~On September 6, 2022, the Company entered into an agreement to acquire~~ GGB Bearing Technology ("~~GGB Bearings"~~GGB"), ~~a division of Enpro, Industries and~~ a global technology and market leader of premium engineered metal-polymer plain bearings, for ~~$305~~$302.5 million, net of cash acquired of $19.2 million, subject to customary post-closing adjustments. ~~GGB Bearings~~GGB's revenue ~~is estimated to be~~was approximately $200 million for the full year 2022. ~~GGB Bearings'~~GGB's products are used mainly in industrial applications, including pumps and ~~the acquisition has~~compressors, HVAC, off-highway, energy, material handling and aerospace. With manufacturing facilities across the United States, Europe and ~~China.~~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 ~~transaction, which is~~purchase price for this acquisition was $151.2 million, net of cash acquired of $0.2 million, subject to customary ~~closing conditions, is expected to close~~post-closing adjustments. Results for Spinea are reported in the ~~fourth quarter of 2022 and will be funded with cash on hand and borrowings from existing credit facilities.~~

Industrial Motion segment.

Table of Contents

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 March 31, 2023:


	Initial Purchase Price Allocation		Adjustments		Updated Purchase Price Allocation
Assets:

Accounts receivable	$	30.6	$	—	$	30.6
Inventories	52.3		(0.6)		51.7
Other current assets	7.6		—		7.6
Property, plant and equipment	153.6		(3.5)		150.1

Goodwill	106.9		(2.4)		104.5
Other intangible assets	182.6		(0.8)		181.8
Other assets	12.1		3.5		15.6
Total assets acquired	$	545.7	$	(3.8)	$	541.9
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		—		3.2

Deferred income taxes	30.0		—		30.0
Other non-current liabilities	20.0		—		20.0
Total liabilities assumed	$	92.0	$	(1.5)	$	90.5
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 is preliminary pending the continued evaluation of operating leases, which is expected to be finalized during the second quarter of 2023. The purchase price allocation for GGB is preliminary pending the continued evaluation of certain working capital accounts, real estate and other intangible assets, as well 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.

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. Nadella operates manufacturing facilities in Europe and China and reported revenue of approximately €100 million in 2022.

Divestitures:

On ~~September 1, 2022,~~February 28, 2023, the Company completed the ~~divestiture~~sale of ~~Timken-Rus Service Company ooo ("Timken Russia"), one~~all of its ~~two subsidiaries~~membership interests in ~~Russia. Timken Russia~~S.E. Setco Services Company, LLC ("SE Setco"), a 50% owned joint venture. The Company had ~~net sales~~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 and $19.6 million in 2022 and 2021, respectively. The results of operations of Timken Russia were reported in the Mobile Industries and Process Industries segments based on customers and underlying market sectors served. The Company recorded proceeds of $1.0 million, net of cash divested of $5.3 million, and recognized a loss of $2.1 million on the ~~sale of the business.~~sale. The ~~loss~~gain was reflected in other income, net in the Consolidated Statement of Income.

The Company made the decision to sell its Timken Aerospace Drive Systems, LLC ("ADS") business, located in Manchester, Connecticut. On October 7, 2022, the Company entered into a definitive agreement to sell the ADS business. During the third quarter of 2022, the business met the held for sale criteria, and the Company reclassified its assets and liabilities accordingly. Assets held for sale of $40.1 million are included in other current assets, and liabilities held for sale of $7.3 million are included in other current liabilities on the Consolidated Balance Sheet. As a result of the carrying value of the business exceeding the estimated sales price less costs to sell, the Company recorded an impairment charge of $29.3 million. The impairment charge is included in the impairment and restructuring line on the Consolidated Statement of Income. The Company expects to complete the sale during the fourth quarter of 2022, subject to customary closing conditions. Operating results of the ADS business are included the Mobile Industries segment.

~~The following table provides the major captions of assets and liabilities held for sale at September 30, 2022:~~



~~Assets:~~
~~Accounts receivable, net~~	$	~~6.0~~
~~Unbilled receivables~~	~~25.4~~
~~Inventories, net~~	~~13.4~~
~~Property, plant and equipment, net~~	~~4.4~~
~~Operating lease assets~~	~~3.7~~
~~Intangible assets, net~~	~~16.2~~
~~Other assets~~	~~0.3~~
~~Total assets~~	~~69.4~~
~~Less: impairment charge~~	~~(29.3)~~
~~Assets held for sale~~	$	~~40.1~~

~~Liabilities:~~
~~Accounts payable, trade~~	$	~~2.1~~
~~Salaries, wages and benefits~~	~~1.1~~
~~Other current liabilities~~	~~1.0~~
~~Long-term operating lease liabilities~~	~~3.1~~
~~Liabilities held for sale~~	$	~~7.3~~

Table of Contents

~~Note 4 - Revenue~~

~~The following table presents details deemed most relevant to the users of the financial statements about total revenue for the three and nine months ended September 30, 2022 and 2021, respectively:~~

Three Months Ended Three Months Ended
September 30, 2022 September 30, 2021
Mobile Process Total Mobile Process Total
United States $ 276.3 $ 238.7 $ 515.0 $ 235.3 $ 194.2 $ 429.5
Americas excluding the United States 59.2 65.1 124.3 54.9 47.4 102.3
Europe / Middle East / Africa 105.2 124.7 229.9 118.2 137.5 255.7
China 30.4 129.5 159.9 27.7 125.9 153.6
Asia-Pacific excluding China 55.8 51.5 107.3 51.2 45.0 96.2
Net sales $ 526.9 $ 609.5 $ 1,136.4 $ 487.3 $ 550.0 $ 1,037.3

Nine Months Ended Nine Months Ended
September 30, 2022 September 30, 2021
Mobile Process Total Mobile Process Total
United States $ 808.8 $ 695.2 $ 1,504.0 $ 715.6 $ 582.0 $ 1,297.6
Americas excluding the United States 181.0 184.8 365.8 156.0 139.7 295.7
Europe / Middle East / Africa 352.7 402.1 754.8 369.6 401.9 771.5
China 92.3 373.9 466.2 94.3 388.6 482.9
Asia-Pacific excluding China 176.1 147.8 323.9 150.5 127.4 277.9
Net sales $ 1,610.9 $ 1,803.8 $ 3,414.7 $ 1,486.0 $ 1,639.6 $ 3,125.6

When reviewing revenue by sales channel, the Company separates net sales to original equipment manufacturers ("OEMs") from sales to distributors and end users. The following table presents the percent of revenue by sales channel for the nine months ended September 30, 2022 and 2021, respectively:

Nine Months Ended Nine Months Ended
Revenue by sales channel September 30, 2022 September 30, 2021
Original equipment manufacturers 60% 61%
Distribution/end users 40% 39%

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 nine months ended September 30, 2022 and September 30, 2021, approximately ~~9% and 8%, respectively,~~ ~~of total net sales were recognized on an over-time basis because of the continuous transfer of control to the customer, with the remainder recognized as of a point in time. Approximately 4% and~~ ~~4% of t~~otal net sales represented service revenue during the nine months ended September 30, 2022 and September 30, 2021, respectively. Finally, business with the United States ("U.S.") government or its contractors represented approximately 7% of total net sales during each of the nine months ended September 30, 2022 and September 30, 2021.

~~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 ~~$170.7 million at September 30, 2022.~~

~~Table of Contents~~

~~Note 4 - Revenue(continued)~~

~~Unbilled Receivables:~~

~~The following table contains a rollforward of unbilled receivables for the nine months ended September 30, 2022 and the twelve months ended December 31, 2021:~~

September 30,
2022 December 31,
2021
Beginning balance, January 1 $ 104.5 $ 110.9
Additional unbilled revenue recognized 301.9 383.0
Less: amounts billed to customers (297.4) (389.4)
Less: unbilled receivables reclassified to assets held for sale (25.4) —
Ending balance $ 83.6 $ 104.5

~~There were no impairment losses recorded on unbilled receivables for the nine months ended September 30, 2022 and September 30, 2021.~~

~~Table of Contents~~

Note 54 - Segment Information

The primary measurement used by management to measure the financial performance of each segment is earnings before interest, taxes, depreciation and amortization ("EBITDA").

Three Months Ended
September 30, Nine Months Ended
September 30,
2022 2021 2022 2021
Net sales:
Mobile Industries $ 526.9 $ 487.3 $ 1,610.9 $ 1,486.0
Process Industries 609.5 550.0 1,803.8 1,639.6
Net sales $ 1,136.4 $ 1,037.3 $ 3,414.7 $ 3,125.6
Segment EBITDA:
Mobile Industries $ 20.0 $ 53.2 $ 164.2 $ 200.1
Process Industries 165.3 129.7 484.4 401.9
Total EBITDA, for reportable segments $ 185.3 $ 182.9 $ 648.6 $ 602.0
Unallocated corporate expense (9.1) (11.7) (35.4) (34.9)
Corporate pension and other postretirement benefit related expense (1)
(1.0) (3.9) (15.2) (8.3)
Acquisition-related gain (2)
— 0.3 — 0.9
Depreciation and amortization (39.9) (41.3) (122.0) (126.5)
Interest expense (19.3) (14.8) (51.9) (45.0)
Interest income 1.1 0.5 2.7 1.7
Income before income taxes $ 117.1 $ 112.0 $ 426.8 $ 389.9
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 March 31,
		2023		2022
Net sales:
Engineered Bearings		$	900.7	$	772.4
Industrial Motion		362.1		352.2
Net sales		$	1,262.8	$	1,124.6
Segment EBITDA:
Engineered Bearings		$	205.0	$	168.3
Industrial Motion		48.2		62.4
Total EBITDA, for reportable segments		$	253.2	$	230.7
Unallocated corporate expense		(17.7)		(12.9)
Corporate pension and other postretirement benefit related income (expense) (1)		0.9		(2.6)

Depreciation and amortization		(45.6)		(41.4)
Interest expense		(24.1)		(14.3)
Interest income		1.5		0.6
Income before income taxes		$	168.2	$	160.1

(1) Corporate pension and other postretirement benefit related expense represents actuarial (losses) and gains that resulted from the remeasurement of pension and other postretirement plan assets and obligations as a result of changes in assumptions or experience.


	March 31, 2023		December 31, 2022
Assets by Segment:
Engineered Bearings	$	3,384.3	$	3,270.3
Industrial Motion	2,044.4		2,070.1
Corporate (2)	424.3		432.0
	$	5,853.0	$	5,772.4

(2) Corporate assets include corporate buildings and cash and cash equivalents.

Table of Contents

Note 5 - Revenue

The ~~acquisition-related gain represents measurement period adjustments~~following table presents details deemed most relevant to the ~~bargain purchase gain~~users of the financial statements about total revenue for the three months ended March 31, 2023 and 2022:


	Three Months Ended						Three Months Ended
	March 31, 2023						March 31, 2022
	Engineered Bearings		Industrial Motion		Total		Engineered Bearings		Industrial Motion		Total
United States	$	340.9	$	194.3	$	535.2	$	289.8	$	198.8	$	488.6
Americas excluding the United States	92.2		27.9		120.1		92.4		20.8		113.2
Europe / Middle East / Africa	183.9		113.8		297.7		162.6		102.5		265.1
China	158.4		16.3		174.7		129.3		22.1		151.4
Asia-Pacific excluding China	125.3		9.8		135.1		98.3		8.0		106.3
Net sales	$	900.7	$	362.1	$	1,262.8	$	772.4	$	352.2	$	1,124.6

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 three months ended March 31, 2023 and 2022:


	Three Months Ended	Three Months Ended
Revenue by sales channel	March 31, 2023	March 31, 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 three months ended March 31, 2023 and March 31, 2022, approximately 8% and 9%, respectively, of total net sales were recognized on an over-time basis because of the ~~acquisition~~continuous transfer of ~~Aurora Bearing Company~~control to the customer, with the remainder recognized as of a point in time. Approximately 4% and 5% of total net sales represented service revenue during the three months ended March 31, 2023 and March 31, 2022, respectively. Finally, business with the United States ("~~Aurora"~~U.S."), government or its contractors represented approximately 5% and 7% of total net sales during each of the three months ended March 31, 2023 and March 31, 2022, respectively.

Remaining Performance Obligations:

Remaining performance obligations represent the transaction price of orders meeting the definition of a contract for which ~~closed~~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 $126.0 million at March 31, 2023.

Table of Contents

Note 5 - Revenue(continued)

Unbilled Receivables:

The following table contains a rollforward of unbilled receivables for the three months ended March 31, 2023 and the twelve months ended December 31, 2022:


	March 31, 2023		December 31, 2022
Beginning balance, January 1	$	103.9	$	104.5
Additional unbilled revenue recognized	96.3		396.2
Less: amounts billed to customers	(85.1)		(370.5)
Less: unbilled receivables reclassified to assets held for sale	—		(26.3)

Ending balance	$	115.1	$	103.9

There were no impairment losses recorded on ~~November 30, 2020.~~unbilled receivables for the three months ended March 31, 2023 and the twelve months ended December 31, 2022.

Deferred Revenue:

The following table contains a rollforward of deferred revenue for the three months ended March 31, 2023 and the twelve months ended December 31, 2022:


	March 31, 2023		December 31, 2022
Beginning balance, January 1	$	54.3	$	35.8
Revenue (cash) received in advance	7.8		54.8
Less: revenue recognized	(16.3)		(36.3)
Ending balance	$	45.8	$	54.3

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 September 30,						Nine Months Ended September 30,							Three Months Ended March 31,
		2022			2021			2022			2021				2023			2022
Provision for income taxes	Provision for income taxes	$	26.7		$	20.4		$	108.9		$	75.1		Provision for income taxes	$	42.5		$	38.2
Effective tax rate	Effective tax rate	22.8		%	18.2		%	25.5		%	19.3		%	Effective tax rate	25.3		%	23.9		%

Income tax expense for the three ~~and nine~~ months ended ~~September 30, 2022~~March 31, 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 international jurisdictions with relatively higher tax rates.

The effective tax rate of ~~22.8%~~25.3% for the three months ended ~~September 30, 2022~~March 31, 2023 was higher than the effective tax rate for the three months ended ~~September 30, 2021 primarily due to the net unfavorable impact of discrete tax items in comparison to the year ago period.~~

~~The effective tax rate of 25.5% for the nine months ended September 30,~~March 31, 2022 ~~was higher than the rate for the nine months ended September 30, 2021~~ primarily due to an ~~unfavorable~~increase in the mix of earnings in international jurisdictions with relatively higher tax rate jurisdictions, the net unfavorable impact of discrete tax items, including a discrete tax benefits in the year ago period in connection with the settlement of the 2017 and 2018 U.S. federal tax years during the nine months ended September 30, 2021, and lower deductions for stock-based compensation.rates.

109

Table of Contents

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 nine~~ months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ respectively:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
Numerator:	Numerator:									Numerator:
Net income attributable to The Timken Company	Net income attributable to The Timken Company	$	87.0	$	88.1	$	310.2	$	306.2	Net income attributable to The Timken Company	$	122.3	$	118.2
Less: undistributed earnings allocated to nonvested stock		—		—		—		—
Net income available to common shareholders for basic and diluted earnings per share		$	87.0	$	88.1	$	310.2	$	306.2

Denominator:	Denominator:									Denominator:
Weighted average number of shares outstanding - basic	Weighted average number of shares outstanding - basic	73,177,956		76,068,582		73,890,483		75,980,355		Weighted average number of shares outstanding - basic	72,499,928		74,782,153
Effect of dilutive securities:	Effect of dilutive securities:									Effect of dilutive securities:
Stock options and awards - based on the treasury stock method	Stock options and awards - based on the treasury stock method	688,787		955,391		658,228		1,177,259		Stock options and awards - based on the treasury stock method	860,926		763,512
Weighted average number of shares outstanding assuming dilution of stock options and awards	Weighted average number of shares outstanding assuming dilution of stock options and awards	73,866,743		77,023,973		74,548,711		77,157,614		Weighted average number of shares outstanding assuming dilution of stock options and awards	73,360,854		75,545,665
Basic earnings per share	Basic earnings per share	$	1.19	$	1.16	$	4.20	$	4.03	Basic earnings per share	$	1.69	$	1.58
Diluted earnings per share	Diluted earnings per share	$	1.18	$	1.14	$	4.16	$	3.97	Diluted earnings per share	$	1.67	$	1.56

The dilutive effect of performance-based restricted stock units are included once they meet minimum performance thresholds. The dilutive effect of stock options ~~and awards~~ includes all outstanding stock options ~~and awards~~ 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 nine~~ months ended ~~September 30, 2022~~March 31, 2023 and ~~2021.~~2022.

Note 8 - Inventories

The components of inventories at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 were as follows:


		September 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
Manufacturing supplies	Manufacturing supplies	$	39.7	$	38.0	Manufacturing supplies	$	42.5	$	41.7
Raw materials	Raw materials	115.9		121.8		Raw materials	138.1		132.0
Work in process	Work in process	454.8		418.4		Work in process	498.6		491.2
Finished products	Finished products	588.2		527.8		Finished products	598.1		584.8
Subtotal	Subtotal	1,198.6		1,106.0		Subtotal	1,277.3		1,249.7
Allowance for obsolete and surplus inventory	Allowance for obsolete and surplus inventory	(66.0)		(63.3)		Allowance for obsolete and surplus inventory	(67.9)		(58.4)
Total inventories, net	Total inventories, net	$	1,132.6	$	1,042.7	Total inventories, net	$	1,209.4	$	1,191.3

Inventories are valued at net realizable value, with approximately ~~56%~~60% valued on the first-in, first-out ("FIFO") method and the remaining ~~44%~~40% valued on the last-in, first-out ("LIFO") method. The majority of the Company's domestic inventories are valued on the LIFO ~~method, and all the~~method. The Company's international inventories are valued on the FIFO method.

The LIFO reserve at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 was ~~$229.1~~$234.2 million and ~~$199.4~~$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.

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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 1st. 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 ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 were as follows:


		Mobile Industries		Process Industries		Total			Engineered Bearings		Industrial Motion		Total
Beginning balance	Beginning balance	$	371.7	$	651.0	$	1,022.7	Beginning balance	$	679.8	$	418.5	$	1,098.3
Acquisitions		—		39.2		39.2

Impairment loss								Impairment loss	—		(28.3)		(28.3)
Foreign currency translation adjustments and other changes	Foreign currency translation adjustments and other changes	(33.8)		(49.0)		(82.8)		Foreign currency translation adjustments and other changes	(0.5)		6.3		5.8
Ending balance	Ending balance	$	337.9	$	641.2	$	979.1	Ending balance	$	679.3	$	396.5	$	1,075.8

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 ~~acquisition~~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 ~~Spinea added $39.2~~the goodwill impairment review. Based on the earnings and cash flow forecasts for the Belts & 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 ~~goodwill. The goodwill is expected to be 100% tax deductible.~~2023, which was reported in impairment and restructuring charges on the Consolidated Statement of Income.

The following table displays intangible assets as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021:~~2022:


		Balance at September 30, 2022						Balance at December 31, 2021							Balance at March 31, 2023						Balance at December 31, 2022
		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount			Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Intangible assets subject to amortization:	Intangible assets subject to amortization:													Intangible assets subject to amortization:
Customer relationships	Customer relationships	$	459.4	$	(172.0)	$	287.4	$	518.1	$	(189.3)	$	328.8	Customer relationships	$	567.1	$	(190.6)	$	376.5	$	561.5	$	(183.2)	$	378.3
Technology and know-how	Technology and know-how	230.7		(74.2)		156.5		270.7		(86.6)		184.1		Technology and know-how	272.0		(85.3)		186.7		273.1		(80.4)		192.7
Trade names	Trade names	18.5		(7.3)		11.2		14.3		(9.6)		4.7		Trade names	31.8		(9.1)		22.7		18.4		(8.7)		9.7
Capitalized software	Capitalized software	283.6		(264.3)		19.3		280.0		(261.3)		18.7		Capitalized software	290.0		(268.0)		22.0		288.4		(266.3)		22.1
Other	Other	3.1		(2.4)		0.7		4.7		(3.6)		1.1		Other	7.7		(4.3)		3.4		3.3		(2.3)		1.0
		$	995.3	$	(520.2)	$	475.1	$	1,087.8	$	(550.4)	$	537.4		$	1,168.6	$	(557.3)	$	611.3	$	1,144.7	$	(540.9)	$	603.8
Intangible assets not subject to amortization:	Intangible assets not subject to amortization:													Intangible assets not subject to amortization:
Trade names	Trade names	$	110.9			$	110.9	$	122.7			$	122.7	Trade names	$	135.3			$	135.3	$	152.8			$	152.8
FAA air agency certificates	FAA air agency certificates	8.7				8.7		8.7				8.7		FAA air agency certificates	8.7				8.7		8.7				8.7
		$	119.6			$	119.6	$	131.4			$	131.4		$	144.0			$	144.0	$	161.5			$	161.5
Total intangible assets	Total intangible assets	$	1,114.9	$	(520.2)	$	594.7	$	1,219.2	$	(550.4)	$	668.8	Total intangible assets	$	1,312.6	$	(557.3)	$	755.3	$	1,306.2	$	(540.9)	$	765.3

Amortization expense for intangible assets was ~~$37.4~~$15.1 million and ~~$41.7~~$12.7 million for the ~~nine~~three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ respectively. Amortization expense ~~included $32.2 million~~ ~~and $35.8 million~~ related to intangible assets acquired as part of a business combination ~~for~~is reported in amortization of intangible assets on the ~~nine~~ ~~months ended September 30, 2022~~Consolidated Statement of Income, and ~~2021, respectively.~~amortization expense related to capitalized software is reported in cost of products sold or selling, general and administrative expenses on the Consolidated Statement of Income. Amortization expense for intangible assets is projected to be ~~$49.7 million in 2022; $42.2~~$56.2 million in 2023; ~~$40.3~~$51.5 million in 2024; ~~$38.3~~$50.6 million in 2025; ~~and $36.9~~$49.1 million in ~~2026. Substantially all amortization expense for intangible assets is recorded~~2026; and $47.3 million in ~~Cost of product sold on the Consolidated Statement of Income.~~2027.

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Note 10 - Other Current Liabilities

The following table displays other current liabilities as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021:~~2022:


(Dollars in millions)	(Dollars in millions)	September 30, 2022		December 31, 2021		(Dollars in millions)	March 31, 2023		December 31, 2022
Sales rebates	Sales rebates	$	67.7	$	70.3	Sales rebates	$	64.8	$	82.9
Deferred revenue						Deferred revenue	45.8		54.3
Product warranty						Product warranty	25.4		23.5
Operating lease liabilities						Operating lease liabilities	25.3		24.1
Current derivative liability						Current derivative liability	23.1		19.8
Taxes other than income and payroll taxes						Taxes other than income and payroll taxes	21.0		18.7
Freight and duties	Freight and duties	24.5		25.5		Freight and duties	17.3		21.7
Operating lease liabilities		22.2		26.2
Product warranty		19.6		11.7
Interest						Interest	16.9		15.0
Professional fees	Professional fees	16.4		10.8		Professional fees	16.5		17.4
Restructuring	Restructuring	4.1		7.0		Restructuring	3.0		3.1
Taxes other than income and payroll taxes		18.0		16.0
Interest		15.8		10.8
Other	Other	105.1		72.3		Other	78.0		72.4
Total other current liabilities	Total other current liabilities	$	293.4	$	250.6	Total other current liabilities	$	337.1	$	352.9

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Note 11 - Financing Arrangements

Short-term debt at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 was as follows:


		September 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022

Borrowings under lines of credit for certain of the Company’s foreign subsidiaries with various banks with interest rates ranging from 1.18% to 2.75% at September 30, 2022 and 0.50% to 2.00% at December 31, 2021		$	50.9	$	42.6
Variable-rate Accounts Receivable Facility with an interest rate of 5.54% at March 31, 2023						Variable-rate Accounts Receivable Facility with an interest rate of 5.54% at March 31, 2023	$	7.1	$	—
Borrowings under lines of credit for certain of the Company’s foreign subsidiaries with various banks with interest rates ranging from 3.42% to 4.90% at March 31, 2023 and 2.38% to 5.50% at December 31, 2022						Borrowings under lines of credit for certain of the Company’s foreign subsidiaries with various banks with interest rates ranging from 3.42% to 4.90% at March 31, 2023 and 2.38% to 5.50% at December 31, 2022	38.7		46.3
Short-term debt	Short-term debt	$	50.9	$	42.6	Short-term debt	$	45.8	$	46.3

The lines of credit for certain of the Company's foreign subsidiaries provide for short-term borrowings up to $235.8 million in the aggregate. Most of these lines of credit are uncommitted. At September 30, 2022, the Company’s foreign subsidiaries had borrowings outstanding of $50.9 million and bank guarantees of $2.6 million, which reduced the aggregate availability under these facilities to $182.3 million.

~~Long-term debt at September 30, 2022 and December 31, 2021 was as follows:~~

September 30,
2022 December 31,
2021
Variable-rate Senior Credit Facility with an average interest rate on Euro of 1.00% at September 30, 2022 and U.S. Dollar of 1.09% and Euro of 1.00% at December 31, 2021 $ 7.8 $ 9.0
Variable-rate Accounts Receivable Facility — —
Variable-rate Term Loan(1), maturing on September 11, 2023, with an interest rate of 4.24% at September 30, 2022 and 1.23% at December 31, 2021
314.8 321.1
Fixed-rate Senior Unsecured Notes(1), maturing on September 1, 2024, with an interest rate of 3.875%
349.7 349.5
Fixed-rate Euro Senior Unsecured Notes(1), maturing on September 7, 2027, with an interest rate of 2.02%
146.8 170.3
Fixed-rate Senior Unsecured Notes(1), maturing on December 15, 2028, with an interest rate of 4.50%
397.1 396.9
Fixed-rate Medium-Term Notes, Series A(1), maturing at various dates through May 2028, with interest rates ranging from 6.74% to 7.76%
154.7 154.7
Fixed-rate Senior Unsecured Notes(1), maturing on April 1, 2032, with an interest rate of 4.125%
341.7 —
Fixed-rate Euro Bank Loan, maturing on June 30, 2033, with an interest rate of 2.15% 12.7 15.8
Other 6.9 5.0
Total debt $ 1,732.2 $ 1,422.3
Less: Current maturities 320.9 11.2
Long-term debt $ 1,411.3 $ 1,411.1

~~(1)~~ ~~Net of discounts and fees~~

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 ~~September 30, 2022.~~March 31, 2023. As of ~~September 30, 2022,~~March 31, 2023, there were no$100.0 million in outstanding borrowings under the Accounts Receivable Facility, ~~and~~which reduced the ~~entire~~ ~~$100~~availability under this facility to zero. $7.1 million of the outstanding borrowings under the Accounts Receivable Facility was ~~available~~.classified as short-term at March 31, 2023, which reflects the Company's expectations over the next 12 months relative to the minimum borrowing base. 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.

Lines of credit for certain of the Company's foreign subsidiaries provide for short-term borrowings up to $237.4 million in the aggregate. Most of these lines of credit are uncommitted. At March 31, 2023, the Company’s foreign subsidiaries had borrowings outstanding of $38.7 million and bank guarantees of $3.7 million, which reduced the aggregate availability under these facilities to $195.0 million.

Long-term debt at March 31, 2023 and December 31, 2022 was as follows:


	March 31, 2023		December 31, 2022
Variable-rate Senior Credit Facility with an average interest rate on U.S. Dollar of 5.72% and Euro of 3.46% at March 31, 2023 and U.S. Dollar of 5.10% and Euro of 2.21% at December 31, 2022	$	63.6	$	8.5

Variable-rate Accounts Receivable Facility with an interest rate of 5.54% at March 31, 2023 and 5.01% at December 31, 2022	92.9		85.0
Variable-rate Term Loan(1), maturing on December 5, 2027, with an interest rate of 5.54% at March 31, 2023 and 5.55% at December 31, 2022	399.1		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%	162.4		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%	342.5		342.1
Fixed-rate Euro Bank Loan, maturing on June 30, 2033, with an interest rate of 2.15%	13.4		13.6

Other	5.6		6.4
Total debt	$	1,981.6	$	1,916.9
Less: current maturities	2.8		2.7
Long-term debt	$	1,978.8	$	1,914.2

(1) Net of discounts and fees

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Note 11 - Financing Arrangements (continued)

~~The~~On December 5, 2022, the Company entered into the ~~Fourth~~Fifth Amended and Restated Credit Agreement ("~~Senior~~ Credit ~~Facility"~~Agreement") ~~on June 25, 2019. The Senior Credit Facility~~, which is ~~a $650.0~~comprised of the $750.0 million unsecured revolving credit facility ~~which matures~~("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.~~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 ~~September 30, 2022,~~March 31, 2023, the Company had ~~$7.8~~$63.6 million of outstanding borrowings under the Senior Credit Facility, which reduced the availability under this facility to ~~$642.2~~$686.4 million. The ~~Senior~~ Credit ~~Facility~~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~~.2032. Proceeds from the 2032 Notes were used to for general corporate purposes, which included the repayment of borrowings under the Senior Credit Facility and the Accounts Receivable Facility outstanding at the time of issuance.

On September 11, 2018, the Company entered into a $350 million variable-rate term loan that matures on September 11, 2023 (the "2023 Term Loan"). Proceeds from the 2023 Term Loan were used to fund the acquisitions of Apiary Investments Holding Limited and Rollon S.p.A., which closed on September 1, 2018 and September 18, 2018, respectively. On July 12, 2019, the Company amended the ~~2023 Term Loan agreement to, among other things, align covenants and other terms with the Senior Credit Facility.~~

At ~~September 30, 2022,~~March 31, 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 ~~September 30, 2022,~~March 31, 2023, outstanding letters of credit totaled ~~$43.5~~$52.0 million, most with expiration dates within 12 months.

The maturities of long-term debt (including ~~$3.1~~$3.5 million of finance leases) subsequent to ~~September 30, 2022~~March 31, 2023 are as follows:


Year	Year			Year
2022		$	3.7
2023	2023	318.6		2023	$	2.5
2024	2024	359.4		2024	450.2
2025	2025	1.5		2025	26.9
2026	2026	11.3		2026	51.6
2027	2027	172.6		2027	584.6
2028				2028	521.3
Thereafter	Thereafter	865.1		Thereafter	355.9

The table above excludes $11.4 million of unamortized premiums and fees that are netted against long-term debt at March 31, 2023.

Table of Contents

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 three months ended March 31, 2023:


	March 31, 2023
Confirmed obligations outstanding, January 1	$	14.4
Invoices confirmed	20.4
Confirmed invoices paid	(19.3)
Confirmed obligations outstanding, ending balance	$	15.5

The obligations outstanding at March 31, 2023 were included in accounts payable, trade on the Consolidated Balance Sheet.

Table of Contents

Note 1213 - Contingencies

The Company and certain of its subsidiaries have been identified as potentially responsible parties for investigation and remediation under the Comprehensive Environmental Response, Compensation and Liability Act, known as the Superfund, or similar state laws with respect to certain sites. Claims for investigation and remediation have been asserted against numerous other entities, which are believed to be financially solvent and are expected to fulfill their proportionate share of the obligation.

On December 28, 2004, the United States Environmental Protection Agency (“USEPA”) sent Lovejoy, ~~Inc.~~LLC. ("Lovejoy") a Special Notice Letter that identified Lovejoy as a potentially responsible party, together with at least 14 other companies, at the Ellsworth Industrial Park Site, Downers Grove, DuPage County, Illinois (the “Site”). The Company acquired Lovejoy in 2016. Lovejoy’s Downers Grove property is situated within the Ellsworth Industrial Complex. The USEPA and the Illinois Environmental Protection Agency (“IEPA”) allege there have been one or more releases or threatened releases of hazardous substances, allegedly including, but not limited to, a release or threatened release on or from Lovejoy's property, at the Site. The relief sought by the USEPA and IEPA includes further investigation and potential remediation of the Site and reimbursement of response costs. Lovejoy’s allocated share of past and future costs related to the Site, including for investigation and/or remediation, could be significant. All previously pending property damage and personal injury lawsuits against Lovejoy related to the Site were settled or dismissed prior to our acquisition of Lovejoy.

The Company had total environmental accruals of $~~5.0~~4.7 million and ~~$6.0~~$4.8 million for various known environmental matters that are probable and reasonably estimable at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~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 $~~19.6~~25.4 million and ~~$11.7~~$23.5 million at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~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 ~~nine~~three months of ~~2022~~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. ~~Any significant change~~The Company is currently evaluating claims raised by certain customers with respect to the performance of bearings sold into the wind energy sector. Management believes that the outcome of these ~~assumptions~~claims will not have a material effect on the Company's consolidated financial position; however, the effect of any such outcome may be material to the results of operations inof any particular period in which ~~such change occurs.~~

costs in excess of amounts provided, if any, are recognized.

The following is a rollforward of the consolidated product warranty accrual for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 and twelve months ended December 31, ~~2021:~~2022:


		September 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
Beginning balance, January 1	Beginning balance, January 1	$	11.7	$	9.4	Beginning balance, January 1	$	23.5	$	11.7
Expense	Expense	10.5		10.1		Expense	2.2		14.7
Payments	Payments	(2.6)		(7.8)		Payments	(0.3)		(2.9)
Ending balance	Ending balance	$	19.6	$	11.7	Ending balance	$	25.4	$	23.5

Table of Contents

Note 1314 - Equity

The following tables present the changes in the components of equity for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ respectively:


				The Timken Company Shareholders															The Timken Company Shareholders
		Total		Stated Capital		Other Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Non controlling Interest			Total		Stated Capital		Other Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Non controlling Interest
Balance at June 30, 2022		$	2,289.2	$	40.7	$	804.1	$	1,793.2	$	(155.9)	$	(278.5)	$	85.6
Balance at December 31, 2022																Balance at December 31, 2022	$	2,352.9	$	40.7	$	829.6	$	1,932.1	$	(181.9)	$	(352.2)	$	84.6
Net income	Net income	90.4						87.0						3.4		Net income	125.7						122.3						3.4
Foreign currency translation adjustment	Foreign currency translation adjustment	(136.8)								(133.5)				(3.3)		Foreign currency translation adjustment	27.7								27.4				0.3
Pension and other postretirement liability adjustments (net of income tax benefit of $0.6 million)		(1.4)								(1.4)
Pension and other postretirement liability adjustments (net of income tax benefit of $0.5 million)																Pension and other postretirement liability adjustments (net of income tax benefit of $0.5 million)	(1.5)								(1.5)
Change in fair value of derivative financial instruments, net of reclassifications																Change in fair value of derivative financial instruments, net of reclassifications	(0.8)								(0.8)
Dividends - $0.31 per share																Dividends - $0.31 per share	(23.6)						(23.6)

Change in fair value of derivative financial instruments, net of reclassifications		1.8								1.8
Dividends declared to noncontrolling interest		(0.5)												(0.5)
Dividends – $0.31 per share		(22.8)						(22.8)
Stock-based compensation expense	Stock-based compensation expense	6.7				6.7										Stock-based compensation expense	11.0				11.0
Stock purchased at fair market value	Stock purchased at fair market value	(49.0)										(49.0)				Stock purchased at fair market value	(54.0)										(54.0)
Stock option exercise activity	Stock option exercise activity	2.6				2.6										Stock option exercise activity	12.7				12.7

Shares surrendered for stock option activity		—				3.8						(3.8)

Payments related to tax withholding for stock-based compensation	Payments related to tax withholding for stock-based compensation	(1.4)										(1.4)				Payments related to tax withholding for stock-based compensation	(13.8)										(13.8)
Balance at September 30, 2022		$	2,178.8	$	40.7	$	817.2	$	1,857.4	$	(289.0)	$	(332.7)	$	85.2
Balance at March 31, 2023																Balance at March 31, 2023	$	2,436.3	$	40.7	$	853.3	$	2,030.8	$	(156.8)	$	(420.0)	$	88.3

The Timken Company Shareholders
Total Stated
Capital Other
Paid-In
Capital Retained Earnings Accumulated
Other
Comprehensive
Loss Treasury
Stock Non
controlling
Interest
Balance at December 31, 2021 $ 2,377.7 $ 40.7 $ 786.9 $ 1,616.4 $ (23.0) $ (126.1) $ 82.8
Net income 317.9 310.2 7.7
Foreign currency translation adjustment (272.5) (267.7) (4.8)
Pension and other postretirement liability
   adjustments (net of income tax benefit
   of $1.5 million)
(4.3) (4.3)
Change in fair value of derivative financial
   instruments, net of reclassifications 6.0 6.0
Dividends - $0.92 per share (69.2) (69.2)
Dividends declared to noncontrolling interest (0.5) (0.5)
Stock-based compensation expense 22.3 22.3
Stock purchased at fair market value (193.3) (193.3)
Stock option exercise activity 4.2 4.2
Shares surrendered for stock option activity — 3.8 (3.8)
Payments related to tax withholding for
   stock-based compensation (9.5) (9.5)
Balance at September 30, 2022 $ 2,178.8 $ 40.7 $ 817.2 $ 1,857.4 $ (289.0) $ (332.7) $ 85.2


			The Timken Company Shareholders
	Total		Stated Capital		Other Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income		Treasury Stock		Non controlling Interest
Balance at December 31, 2021	$	2,377.7	$	40.7	$	786.9	$	1,616.4	$	(23.0)	$	(126.1)	$	82.8
Net income	121.9						118.2						3.7
Foreign currency translation adjustment	(22.6)								(20.0)				(2.6)
Pension and other postretirement liability adjustments (net of income tax benefit of $0.5 million)	(1.5)								(1.5)
Change in fair value of derivative financial instruments, net of reclassifications	2.0								2.0

Dividends - $0.30 per share	(23.5)						(23.5)
Stock-based compensation expense	7.1				7.1
Stock purchased at fair market value	(100.0)										(100.0)
Stock option exercise activity	1.4				1.4

Payments related to tax withholding for stock-based compensation	(7.5)										(7.5)
Balance at March 31, 2022	$	2,355.0	$	40.7	$	795.4	$	1,711.1	$	(42.5)	$	(233.6)	$	83.9

~~Table of Contents~~

~~Note 13 - Equity (continued)~~

The Timken Company Shareholders
Total Stated
Capital Other
Paid-In
Capital Retained Earnings Accumulated
Other
Comprehensive
Income (Loss) Treasury
Stock Non
controlling
Interest
Balance at June 30, 2021 $ 2,367.3 $ 40.7 $ 778.6 $ 1,510.9 $ 19.8 $ (59.1) $ 76.4
Net income 91.6 88.1 3.5
Foreign currency translation adjustment (32.9) (33.1) 0.2
Pension and other postretirement liability
   adjustments (net of income tax benefit of
   $0.5 million)
(1.5) (1.5)
Change in fair value of derivative financial
   instruments, net of reclassifications 2.5 2.5
Dividends paid to noncontrolling interest (0.6) (0.6)
Dividends - $0.30 per share (22.8) (22.8)
Stock-based compensation expense 3.1 3.1
Stock purchased at fair market value (30.3) (30.3)
Balance at September 30, 2021 $ 2,376.4 $ 40.7 $ 781.7 $ 1,576.2 $ (12.3) $ (89.4) $ 79.5

The Timken Company Shareholders
Total Stated
Capital Other
Paid-In
Capital Retained Earnings Accumulated
Other
Comprehensive
Income Treasury
Stock Non
controlling
Interest
Balance at December 31, 2020 $ 2,225.2 $ 40.7 $ 740.7 $ 1,339.5 $ 41.3 $ (9.3) $ 72.3
Net income 314.8 306.2 8.6
Foreign currency translation adjustment (54.1) (53.3) (0.8)
Pension and other postretirement liability
   adjustments (net of income tax benefit
   of $1.6 million)
(4.8) (4.8)
Change in fair value of derivative financial
   instruments, net of reclassifications 4.5 4.5
Dividends paid to noncontrolling interest (0.6) (0.6)
Dividends - $0.89 per share (69.5) (69.5)
Stock-based compensation expense 15.6 15.6
Stock purchased at fair market value (56.6) (56.6)
Stock option exercise activity 25.4 25.4
Payments related to tax withholding for
   stock-based compensation (23.5) (23.5)
Balance at September 30, 2021 $ 2,376.4 $ 40.7 $ 781.7 $ 1,576.2 $ (12.3) $ (89.4) $ 79.5

Table of Contents

Note 1415 - Impairment and Restructuring Charges

Impairment and restructuring charges by segment are comprised of the following:

For the three months ended ~~September 30, 2022:~~March 31, 2023:


		Mobile Industries		Process Industries		Total			Engineered Bearings		Industrial Motion		Total
Impairment charges	Impairment charges	$	29.5	$	—	$	29.5	Impairment charges	$	—	$	28.3	$	28.3
Severance and related benefit costs	Severance and related benefit costs	1.3		0.1		1.4		Severance and related benefit costs	0.7		(0.1)		0.6
Exit costs		0.3		0.1		0.4

Total	Total	$	31.1	$	0.2	$	31.3	Total	$	0.7	$	28.2	$	28.9

~~For the nine months ended September 30, 2022:~~

Mobile Industries Process Industries Total
Impairment charges $ 38.3 $ — $ 38.3
Severance and related benefit costs 2.4 0.4 2.8
Exit costs 1.1 0.1 1.2
Total $ 41.8 $ 0.5 $ 42.3

For the three months ended ~~September 30, 2021:~~March 31, 2022:

Mobile Industries Process Industries Total
Severance and related benefit costs $ 2.2 $ 0.3 $ 2.5
Exit costs 0.4 — 0.4
Total $ 2.6 $ 0.3 $ 2.9

~~For the nine months ended September 30, 2021:~~


		Mobile Industries		Process Industries		Total			Engineered Bearings		Industrial Motion		Total
Impairment charges		$	1.1	$	3.4	$	4.5

Severance and related benefit costs	Severance and related benefit costs	2.2		0.9		3.1		Severance and related benefit costs	$	0.4	$	(0.1)	$	0.3
Exit costs	Exit costs	0.6		—		0.6		Exit costs	0.7		—		0.7
Total	Total	$	3.9	$	4.3	$	8.2	Total	$	1.1	$	(0.1)	$	1.0

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.

~~Mobile Industries:~~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 ended September 30, 2022, the Company classified the ADS business as assets held for sale and recorded an impairment charges of $29.3 million. The Company anticipates the sale of ADS business to be completed during the fourth quarter of 2022.

~~During the nine months ended September 30, 2022,~~March 31, 2023, the Company recorded ~~impairment charges~~severance and related benefits of ~~$9.0~~$0.8 million related to ~~certain assets~~this closure. The Company incurred cumulative pretax costs related to this closure of ~~its joint venture~~$2.0 million as of March 31, 2023, including rationalization costs recorded in ~~Russia. As a result~~cost 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.~~

products sold.

~~Table of Contents~~

~~Note 14 - Impairment and Restructuring Charges (continued)~~

On July 19, 2021, the Company announced the closure of its bearing manufacturing facility in Villa Carcina, Italy. The Company ~~will be transferring~~transferred the manufacturing of its single-row tapered roller bearing production to other bearing facilities in Europe, Asia and the United States. The Company ~~expects to complete~~completed the closure of the facility ~~by the end of~~on October 31, 2022, and ~~is expected to affect~~it affected approximately 110 employees. ~~The Company expects to incur approximately $9 million to $11 million of expenses related to this closure.~~ During the three months ended ~~September 30,~~March 31, 2022, the Company recorded severance and related benefits of $0.4 million and exit costs of $0.3 million associated with this closure, and during the nine months ended September 30, 2022, the Company recorded severance and related benefits of $1.2 million and exit costs of $1.3 million associated with this closure. During ~~the three months ended September 30, 2021, the Company recorded severance and related benefits of $2.2~~$0.6 million related to this closure. ~~In addition to the severance and related benefits, the~~The Company ~~recorded impairment charges of $1.0 million during the nine months ended September 30, 2021. The Company has~~ incurred cumulative pretax costs related to this closure of ~~$9.1~~$9.8 million as of ~~September 30, 2022,~~March 31, 2023, including rationalization costs recorded in cost of products sold. On ~~January 31,~~November 1, 2022, the Company ~~entered into an agreement to sell this facility with~~completed the sale ~~expected to close in~~of this facility.

Industrial Motion:

During the ~~fourth~~third quarter of ~~2022.~~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 had to reallocate goodwill to new reporting units under these two segments. In addition, the Company had 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.

Table of Contents

~~Process Industries:~~Note 15 - Impairment and Restructuring Charges (continued)

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 ~~will be transferring~~transferred the ~~manufacturing~~majority of its Diamond Chain product line to its chain manufacturing facility in Fulton, Illinois. The chain plant is expected to cease operations by the end of ~~the first quarter of~~April 2023 and is expected to affect approximately 240 employees. The Company expects to hire approximately 130 full-time positions in Fulton, Illinois and expects to incur approximately ~~$11~~$12 million to ~~$14~~$15 million of expenses ~~related to this closure. During the three months and nine months ended September 30, 2021, the Company recorded severance and related benefit costs of $0.3 million and $0.9 million, respectively,~~ related to this closure. The Company has incurred cumulative pretax costs related to this closure of ~~$12.9~~$14.4 million as of ~~September 30, 2022,~~March 31, 2023, including rationalization costs recorded in cost of products sold.

~~In addition, the Company recorded impairment charges of $3.3 million related to certain engineering-related assets used in the business during the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2021. Management concluded no further investment would be made in these assets and as a result, reduced the value to zero.~~

Consolidated Restructuring Accrual:

The following is a rollforward of the consolidated restructuring accrual for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 and twelve months ended December 31, ~~2021:~~2022:


		September 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
Beginning balance, January 1	Beginning balance, January 1	$	7.0	$	8.0	Beginning balance, January 1	$	3.1	$	7.0
Expense	Expense	4.0		4.4		Expense	0.6		5.8
Payments	Payments	(6.9)		(5.4)		Payments	(0.7)		(9.7)
Ending balance	Ending balance	$	4.1	$	7.0	Ending balance	$	3.0	$	3.1

The restructuring accrual at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 was included in other current liabilities on the Consolidated Balance Sheets.

2019

Table of Contents

Note 1516 - 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 nine~~ months ended ~~September 30, 2022~~March 31, 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, ~~2022.~~2023.

U.S. Plans International Plans Total
Three Months Ended
September 30, Three Months Ended
September 30, Three Months Ended
September 30,
2022 2021 2022 2021 2022 2021
Components of net periodic benefit cost (credit):
Service cost $ 1.6 $ 2.4 $ 0.4 $ 0.5 $ 2.0 $ 2.9
Interest cost 4.7 4.3 1.4 1.1 6.1 5.4
Expected return on plan assets (4.3) (5.5) (2.2) (2.5) (6.5) (8.0)
Amortization of prior service cost 0.3 0.4 — — 0.3 0.4
Recognition of net actuarial losses 1.0 3.9 — — 1.0 3.9
Net periodic benefit cost (credit) $ 3.3 $ 5.5 $ (0.4) $ (0.9) $ 2.9 $ 4.6


		U.S. Plans				International Plans				Total					U.S. Plans				International Plans				Total
		Nine Months Ended September 30,													Three Months Ended March 31,
		2022		2021		2022		2021		2022		2021			2023		2022		2023		2022		2023		2022
Components of net periodic benefit cost (credit):	Components of net periodic benefit cost (credit):													Components of net periodic benefit cost (credit):
Service cost	Service cost	$	5.3	$	7.2	$	1.2	$	1.5	$	6.5	$	8.7	Service cost	$	0.2	$	1.9	$	0.3	$	0.4	$	0.5	$	2.3
Interest cost	Interest cost	12.9		13.2		4.3		3.3		17.2		16.5		Interest cost	4.5		4.1		2.4		1.5		6.9		5.6
Expected return on plan assets	Expected return on plan assets	(14.5)		(17.7)		(7.1)		(7.6)		(21.6)		(25.3)		Expected return on plan assets	(2.1)		(5.2)		(2.5)		(2.5)		(4.6)		(7.7)
Amortization of prior service cost	Amortization of prior service cost	0.9		1.0		0.1		0.1		1.0		1.1		Amortization of prior service cost	—		0.3		0.1		—		0.1		0.3
Recognition of net actuarial losses		15.2		8.3		—		—		15.2		8.3
Recognition of net actuarial (gains) losses														Recognition of net actuarial (gains) losses	(0.9)		2.6		—		—		(0.9)		2.6

Net periodic benefit cost (credit)	Net periodic benefit cost (credit)	$	19.8	$	12.0	$	(1.5)	$	(2.7)	$	18.3	$	9.3	Net periodic benefit cost (credit)	$	1.7	$	3.7	$	0.3	$	(0.6)	$	2.0	$	3.1

~~The Company expects full year 2022~~For the three months ended March 31, 2023, lump sum payments related to new retirees ~~to exceed~~exceeded annual interest and service costs for ~~two~~one of the Company's U.S. defined benefit pension plans, ~~in 2022. This expectation triggered~~triggering a remeasurement of assets and obligations for ~~both plans.~~this plan. As a result of ~~these remeasurements,~~this remeasurement, the Company recognized a net actuarial ~~losses~~gain ("mark-to-market charges") of ~~$1.0 million and $15.2~~$0.9 million during the three ~~and nine~~ months ended ~~September 30, 2022, respectively.~~March 31, 2023.

For the three ~~and nine~~ months ended ~~September 30, 2021,~~March 31, 2022, the Company expected to make lump sum payments related to new retirees in excess of annual interest and service costs for ~~three~~one of the Company's U.S. defined benefit pension ~~plans in 2021.~~plans. This expectation ~~along with the payout of deferred compensation to a former executive officer of the Company in June 2021,~~ triggered a remeasurement of assets and obligations for ~~these plans.~~this plan. As a result of this remeasurement, the Company recognized a net actuarial ~~losses~~loss of ~~$3.9 million and $8.3~~$2.6 million during the three ~~and nine~~ months ended ~~September 30, 2021, respectively.~~

March 31, 2022.

~~Table of Contents~~

Note 1617 - 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 nine~~ months ended ~~September 30, 2022~~March 31, 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, ~~2022.~~2023.


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021				2023		2022
Net periodic benefit credit:	Net periodic benefit credit:									Net periodic benefit credit:
Service Cost		$	—	$	—	$	0.1	$	0.1

Interest cost	Interest cost	0.4		0.4		1.1		1.1		Interest cost		$	0.5	$	0.4

Amortization of prior service credit	Amortization of prior service credit	(2.6)		(2.6)		(7.6)		(7.6)		Amortization of prior service credit		(2.1)		(2.5)

Net periodic benefit credit	Net periodic benefit credit	$	(2.2)	$	(2.2)	$	(6.4)	$	(6.4)	Net periodic benefit credit		$	(1.6)	$	(2.1)

2220

Table of Contents

Note 1718 - Accumulated Other Comprehensive Income (Loss)

The following tables present details about components of accumulated other comprehensive (loss) income for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ respectively:

Foreign currency translation adjustments Pension and other postretirement liability adjustments Change in fair value of derivative financial instruments Total
Balance at June 30, 2022 $ (214.5) $ 53.7 $ 4.9 $ (155.9)
Other comprehensive (loss) income before
   reclassifications and income taxes (136.8) 0.3 3.3 (133.2)
Amounts reclassified from accumulated other
   comprehensive (loss) income before income
   taxes — (2.3) (0.8) (3.1)
Income tax (expense) benefit — 0.6 (0.7) (0.1)
Net current period other comprehensive (loss)
   income, net of income taxes (136.8) (1.4) 1.8 (136.4)
Noncontrolling interest 3.3 — — 3.3
Net current period other comprehensive (loss)
income, net of income taxes and noncontrolling
interest (133.5) (1.4) 1.8 (133.1)
Balance at September 30, 2022 $ (348.0) $ 52.3 $ 6.7 $ (289.0)

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
   reclassifications and income taxes (272.5) 0.8 10.4 (261.3)
Amounts reclassified from accumulated other
   comprehensive (loss) income before income
   taxes — (6.6) (2.4) (9.0)
Income tax (expense) benefit — 1.5 (2.0) (0.5)
Net current period other comprehensive (loss)
   income, net of income taxes (272.5) (4.3) 6.0 (270.8)
Noncontrolling interest 4.8 — — 4.8
Net current period other comprehensive (loss)
income, net of income taxes and noncontrolling
interest (267.7) (4.3) 6.0 (266.0)
Balance at September 30, 2022 $ (348.0) $ 52.3 $ 6.7 $ (289.0)


	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)
Other comprehensive income (loss) before reclassifications and income taxes	27.7		—		(0.8)		26.9
Amounts reclassified from accumulated other comprehensive (loss) income before income taxes	—		(2.0)		(0.3)		(2.3)
Income tax benefit	—		0.5		0.3		0.8
Net current period other comprehensive income (loss), net of income taxes	27.7		(1.5)		(0.8)		25.4
Noncontrolling interest	(0.3)		—		—		(0.3)
Net current period other comprehensive income (loss), net of income taxes and noncontrolling interest	27.4		(1.5)		(0.8)		25.1
Balance at March 31, 2023	$	(208.3)	$	49.3	$	2.2	$	(156.8)

~~Table of Contents~~

~~Note 17 - 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 June 30, 2021 $ (38.2) $ 60.1 $ (2.1) $ 19.8
Other comprehensive (loss) income before
    reclassifications and income taxes (32.9) 0.2 2.7 (30.0)
Amounts reclassified from accumulated other
   comprehensive (loss) income before income
   taxes — (2.2) 0.9 (1.3)
Income tax benefit (expense) — 0.5 (1.1) (0.6)
Net current period other comprehensive (loss)
   income, net of income taxes (32.9) (1.5) 2.5 (31.9)
Noncontrolling interest (0.2) — — (0.2)
Net current period comprehensive (loss) income,
   net of income taxes and noncontrolling interest (33.1) (1.5) 2.5 (32.1)
Balance at September 30, 2021 $ (71.3) $ 58.6 $ 0.4 $ (12.3)


		Foreign currency translation adjustments		Pension and other postretirement liability adjustments		Change in fair value of derivative financial instruments		Total			Foreign currency translation adjustments		Pension and other postretirement liability adjustments		Change in fair value of derivative financial instruments		Total
Balance at December 31, 2020		$	(18.0)	$	63.4	$	(4.1)	$	41.3
Balance at December 31, 2021										Balance at December 31, 2021	$	(80.3)	$	56.6	$	0.7	$	(23.0)
Other comprehensive (loss) income before reclassifications and income taxes	Other comprehensive (loss) income before reclassifications and income taxes	(54.1)		0.1		2.0		(52.0)		Other comprehensive (loss) income before reclassifications and income taxes	(22.6)		0.2		3.2		(19.2)
Amounts reclassified from accumulated other comprehensive (loss) income before income taxes	Amounts reclassified from accumulated other comprehensive (loss) income before income taxes	—		(6.5)		4.3		(2.2)		Amounts reclassified from accumulated other comprehensive (loss) income before income taxes	—		(2.2)		(0.9)		(3.1)
Income tax benefit (expense)	Income tax benefit (expense)	—		1.6		(1.8)		(0.2)		Income tax benefit (expense)	—		0.5		(0.3)		0.2
Net current period other comprehensive (loss) income, net of income taxes	Net current period other comprehensive (loss) income, net of income taxes	(54.1)		(4.8)		4.5		(54.4)		Net current period other comprehensive (loss) income, net of income taxes	(22.6)		(1.5)		2.0		(22.1)
Noncontrolling interest	Noncontrolling interest	0.8		—		—		0.8		Noncontrolling interest	2.6		—		—		2.6
Net current period comprehensive (loss) income, net of income taxes and noncontrolling interest		(53.3)		(4.8)		4.5		(53.6)
Balance at September 30, 2021		$	(71.3)	$	58.6	$	0.4	$	(12.3)
Net current period other comprehensive (loss) income, net of income taxes and noncontrolling interest										Net current period other comprehensive (loss) income, net of income taxes and noncontrolling interest	(20.0)		(1.5)		2.0		(19.5)
Balance at March 31, 2022										Balance at March 31, 2022	$	(100.3)	$	55.1	$	2.7	$	(42.5)

Other comprehensive (loss) income before reclassifications and income taxes includes the effect of foreign currency.

2421

Table of Contents

Note 1819 - 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 ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021:~~2022:


		September 30, 2022									March 31, 2023
		Total		Level 1		Level 2		Level 3			Total		Level 1		Level 2		Level 3
Assets:	Assets:									Assets:
Cash and cash equivalents	Cash and cash equivalents	$	267.3	$	266.5	$	0.8	$	—	Cash and cash equivalents	$	295.3	$	294.5	$	0.8	$	—
Cash and cash equivalents measured at net asset value	Cash and cash equivalents measured at net asset value	33.5		—		—		—		Cash and cash equivalents measured at net asset value	35.2
Restricted cash	Restricted cash	0.7		0.7		—		—		Restricted cash	8.6		8.6		—		—
Short-term investments	Short-term investments	24.7		—		24.7		—		Short-term investments	38.6		—		38.6		—

Interest rate swap contract	Interest rate swap contract	3.7		—		3.7		—		Interest rate swap contract	2.1		—		2.1		—
Foreign currency forward contracts	Foreign currency forward contracts	15.0		—		15.0		—		Foreign currency forward contracts	3.0		—		3.0		—
Total assets	Total assets	$	344.9	$	267.2	$	44.2	$	—	Total assets	$	382.8	$	303.1	$	44.5	$	—
Liabilities:	Liabilities:									Liabilities:
Foreign currency forward contracts	Foreign currency forward contracts	$	11.0	$	—	$	11.0	$	—	Foreign currency forward contracts	$	23.1	$	—	$	23.1	$	—

Total liabilities	Total liabilities	$	11.0	$	—	$	11.0	$	—	Total liabilities	$	23.1	$	—	$	23.1	$	—


		December 31, 2021									December 31, 2022
		Total		Level 1		Level 2		Level 3			Total		Level 1		Level 2		Level 3
Assets:	Assets:									Assets:
Cash and cash equivalents	Cash and cash equivalents	$	257.1	$	244.8	$	12.3	$	—	Cash and cash equivalents	$	292.1	$	289.3	$	2.8	$	—

Cash and cash equivalents measured at net asset value										Cash and cash equivalents measured at net asset value	39.5
Restricted cash	Restricted cash	0.8		0.8		—		—		Restricted cash	9.1		9.1		—		—
Short-term investments	Short-term investments	56.9		—		56.9		—		Short-term investments	39.2		—		39.2		—

Interest rate swap contract										Interest rate swap contract	3.1		—		3.1		—
Foreign currency forward contracts	Foreign currency forward contracts	5.6		—		5.6		—		Foreign currency forward contracts	4.5		—		4.5		—
Total assets	Total assets	$	320.4	$	245.6	$	74.8	$	—	Total assets	$	387.5	$	298.4	$	49.6	$	—
Liabilities:	Liabilities:									Liabilities:
Foreign currency forward contracts	Foreign currency forward contracts	$	1.0	$	—	$	1.0	$	—	Foreign currency forward contracts	$	19.8	$	—	$	19.8	$	—
Total liabilities	Total liabilities	$	1.0	$	—	$	1.0	$	—	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 the redemption value. Short-term investments are investments with maturities between four months and one year, and generally are valued at amortized cost, which approximates fair value. A portion of the cash and cash equivalents and short-term investments are valued based on net asset value. The Company uses publicly available 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.

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Note 1819 - 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.~~

During the three months ended September 30, 2022, the Company's ADS business. located in Manchester, Connecticut, was reclassified to assets held for sale. In conjunction with this reclassification, the ADS business with a carrying value of $62.1 million, was written down to its estimated fair value less cost to sell of $32.8 million, resulting in an impairment charge of $29.3 million. The fair value for these net assets was determined based on an estimate of the value expected to be received upon the sale of this business. ~~Refer to Note 3 - Acquisitions and Divestituresfor more information on the expected sale of ADS.~~

During the nine months ended September 30, 2022, property, plant and equipment at the Company's joint venture in Russia, with a carrying value of $16.1 million, were written down to their fair value of $7.1 million, resulting in an impairment charge of $9.0 million. The fair value for these assets was determined based on an estimate of the best price that would be received in a current transaction to sell the assets to a third party.acquisitions or goodwill impairment.

No other material assets were measured at fair value on a nonrecurring basis during the ~~nine~~three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ 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 calculations for variable-rate debt, the carrying value of the Company's long-term variable-rate debt is a reasonable estimate of its fair value. The fair value of the Company’s long-term fixed-rate debt, based on quoted market prices, was ~~$1,320.6~~$1,381.7 million and ~~$1,171.1~~$1,353.5 million at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively. The carrying value of this debt was ~~$1,402.8~~$1,420.3 million and ~~$1,087.5~~$1,417.9 million at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively. The fair value of long-term fixed-rate debt was measured using Level 2 inputs.

The Company does not believe it has significant concentrations of risk associated with the counterparties to its financial instruments.

Note 1920 - 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 (the "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 nine~~ months ended ~~September 30, 2022,~~March 31, 2023, respectively, was a ~~gain~~loss of ~~$3.7 million and a gain of $8.5~~$0.7 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.

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~~Note 19 - Derivative Instruments and Hedging Activities (continued)~~

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 derivative financial instruments for trading purposes. As of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, the Company had ~~$419.4~~$674.0 million and ~~$300.8~~$635.6 million, respectively, of outstanding foreign currency forward contracts at notional value. Refer to Note 1819 - Fair Value for the fair value disclosure of derivative financial instruments.

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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 foreign currencies with forward contracts. When the dollar strengthens significantly against foreign currencies, the decline in the present value of future foreign currency revenue is offset by gains in the fair value of the forward contracts designated as hedges. Conversely, 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 ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, the Company had ~~$71.6~~$79.7 million and ~~$80.0~~$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 ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, the Company had ~~$347.8~~$594.3 million and ~~$220.8~~$553.3 million, respectively, of outstanding foreign currency forward contracts at notional value that were not designated as hedging instruments. The following table presents the impact of derivative instruments not designated as hedging instruments for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ respectively, and the related location within the Consolidated Statements of Income:


			Amount of gain or (loss) recognized in income										Amount of gain or (loss) recognized in income
			Three Months Ended September 30,				Nine Months Ended September 30,						Three Months Ended March 31,
Derivatives not designated as hedging instruments:	Derivatives not designated as hedging instruments:	Location of gain or (loss) recognized in income	2022		2021		2022		2021		Derivatives not designated as hedging instruments:	Location of gain or (loss) recognized in income	2023		2022

Foreign currency forward contracts	Foreign currency forward contracts	Other expense, net	$	(1.1)	$	1.2	$	(8.0)	$	0.5	Foreign currency forward contracts	Other income, net	$	(2.6)	$	(1.0)

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(Dollars in millions, except per share data)

OVERVIEW

Introduction:

The Timken Company designs and ~~manages~~manufactures a growing portfolio of engineered bearings and ~~power transmission products.~~industrial motion products, and related services. With more than a century of ~~innovation~~knowledge and ~~increasing knowledge,~~innovation, the Company continuously improves the reliability and efficiency of global machinery and equipment to move the world forward. The Company’s growing product and services portfolio features many strong industrial brands, such as Timken®, Philadelphia Gear®, GGB®, Drives®, Cone Drive®, Rollon®, Lovejoy®, Diamond®, BEKA®, Groeneveld®, Nadella® and Spinea®. Timken employs more than ~~18,000~~19,000 people globally in 4346 countries. The Company operates under two reportable segments: (1) ~~Mobile Industries~~Engineered Bearings and (2) ~~Process Industries.~~Industrial Motion. The following further describes these business segments:

•~~Mobile Industries~~Timken’s Engineered Bearings segment features a broad range of product designs serving original equipment manufacturers (OEMs) and end-users worldwide. Timken is a leading authority on tapered roller bearings and leverages its position by applying engineering know-how and technology across its entire bearing portfolio, which includes tapered, spherical and cylindrical roller bearings; plain bearings, metal-polymer bearings and rod end bearings; thrust and specialty ball bearings; and housed bearings. The Engineered Bearings portfolio features Timken® and GGB® brands and serves ~~OEM~~ customers ~~that manufacture off-highway equipment for the agricultural,~~across global industries, including wind energy, agriculture, construction, food and beverage, metals and mining, and construction markets; on-highway vehicles including passenger cars, light trucks, and medium- and heavy-duty trucks; rail cars and locomotives; outdoor power equipment; rotorcraft and fixed-wing aircraft; and other mobile equipment. Beyond service parts sold to OEMs, aftermarket sales and services to individual end users, equipment owners, operators and maintenance shops are handled directly or through the Company's extensive network of authorized automotive and ~~heavy-truck distributors.~~truck, aerospace, rail and more.

•~~Process Industries~~ ~~serves OEM~~Timken’s Industrial Motion segment includes a diverse and ~~end-user customers in~~growing portfolio of engineered products, including industrial drives, automatic lubrication systems, linear motion products and systems, chains, belts, couplings and industrial clutches and brakes that keep systems running efficiently. Industrial Motion also includes industrial drivetrain services, which return equipment to like-new condition. The Industrial Motion portfolio features many strong brands: Philadelphia Gear®, Cone Drive®, Spinea®, Rollon®, Nadella®, Groeneveld®, BEKA®, Diamond®, Drives®, Timken® Belts, Lovejoy® and PT Tech®. Industrial Motion products are used across a broad range of industries, ~~that place heavy demands on the fixed operating equipment they make or use in heavy~~including solar energy, automation, construction, agriculture and ~~other general industrial sectors. This includes metals, cement~~turf, passenger rail, marine, aerospace, packaging and ~~aggregate production; power generation~~logistics, medical and renewable energy sources; oil and gas extraction and refining; pulp and paper and food processing; automation and robotics; and health and critical motion control equipment. Other applications include marine equipment, gear drives, cranes, hoists and conveyors. This segment also supports aftermarket sales and service needs through its global network of authorized industrial distributors and through the provision of services directly to end users.more.

Timken creates value by understanding customer needs and applying its know-how to serve a broad range of customers in attractive markets and industries across the globe. The Company’s business strengths include its product technology, end-market diversity, geographic reach and aftermarket mix. Timken collaborates with OEMs to improve equipment efficiency with its engineered products and captures subsequent equipment replacement cycles by selling largely through independent channels in the aftermarket. Timken focuses its international efforts and footprint in regions of the world where strong macroeconomic factors such as urbanization, infrastructure development and sustainability create demand for its products and services.

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The Company's ~~long-term~~ strategy has three primary elements:

Profitable Growth. The Company intends to expand into new and existing markets by leveraging its collective knowledge of metallurgy, friction management and ~~power transmission~~industrial motion to create value for Timken customers. Using a highly collaborative technical selling approach, the Company places particular emphasis on creating unique solutions for challenging and/or demanding applications. The Company intends to grow in attractive market sectors around the world, emphasizing those spaces that are highly fragmented, demand high service and value the reliability and efficiency offered by Timken products. The Company also targets applications that offer significant aftermarket demand, thereby providing product and services revenue throughout the equipment’s lifetime.

Operational Excellence. Timken operates with a relentless drive for exceptional results and a passion for superior execution. The Company embraces a continuous improvement culture that is charged with increasing efficiency, lowering costs, eliminating waste, encouraging organizational agility and building greater brand equity to fuel growth. This requires the Company’s ongoing commitment to attract, retain and develop the best talent across the world.

Capital Deployment to Drive Shareholder Value. The Company is intently focused on providing the highest returns for shareholders through its capital allocation framework, which includes: (1) investing in the core business through capital expenditures, research and development and ~~other~~ initiatives to drive profitable organic growth; (2) pursuing strategic acquisitions to broaden its portfolio and capabilities across diverse markets, with a focus on bearings, adjacent ~~power transmission~~industrial motion products and related services; (3) returning capital to shareholders through dividends and share repurchases; and (4) maintaining a strong balance sheet and sufficient liquidity. As part of this framework, the Company may also restructure, reposition or divest underperforming product lines or assets.

~~Table of Contents~~

Overview:


		Three Months Ended September 30,									Three Months Ended March 31,
		2022		2021		$ Change		% Change			2023		2022		$ Change		% Change
Net sales	Net sales	$	1,136.4	$	1,037.3	$	99.1	9.6	%	Net sales	$	1,262.8	$	1,124.6	$	138.2	12.3	%
Net income	Net income	90.4		91.6		(1.2)		(1.3)	%	Net income	125.7		121.9		3.8		3.1	%

Net income attributable to noncontrolling interest	Net income attributable to noncontrolling interest	3.4		3.5		(0.1)		(2.9)	%	Net income attributable to noncontrolling interest	3.4		3.7		(0.3)		(8.1)	%
Net income attributable to The Timken Company	Net income attributable to The Timken Company	$	87.0	$	88.1	$	(1.1)	(1.2)	%	Net income attributable to The Timken Company	$	122.3	$	118.2	$	4.1	3.5	%

Diluted earnings per share	Diluted earnings per share	$	1.18	$	1.14	$	0.04	3.5	%	Diluted earnings per share	$	1.67	$	1.56	$	0.11	7.1	%
Average number of shares – diluted	Average number of shares – diluted	73,866,743		77,023,973		—		(4.1)	%	Average number of shares – diluted	73,360,854		75,545,665		—		(2.9)	%

Nine Months Ended
September 30,
2022 2021 $ Change % Change
Net sales $ 3,414.7 $ 3,125.6 $ 289.1 9.2 %
Net income 317.9 314.8 3.1 1.0 %
Net income attributable to noncontrolling interest 7.7 8.6 (0.9) (10.5) %
Net income attributable to The Timken Company $ 310.2 $ 306.2 $ 4.0 1.3 %
Diluted earnings per share $ 4.16 $ 3.97 $ 0.19 4.8 %
Average number of shares – diluted 74,548,711 77,157,614 — (3.4) %

The increase in net sales for the three months ended ~~September 30, 2022~~March 31, 2023 compared with the three months ended ~~September 30, 2021~~March 31, 2022 was ~~primarily~~ driven by strong organic growth ~~(including positive pricing)~~in both the Engineered Bearings and Industrial Motion segments and the favorable impact of acquisitions (net of divestitures), partially offset by the unfavorable impact of foreign currency exchange rate changes. The ~~slight decrease~~increase in net income for the three months ended ~~September 30, 2022~~March 31, 2023 compared with the three months ended ~~September 30, 2021~~March 31, 2022 was primarily due to ~~higher material, logistics and other operating costs, higher impairment and restructuring charges and a higher tax rate, partially offset by favorable price/mix and~~ the ~~impact of higher volume. The higher impairment and restructuring charges were primarily related to the anticipated divestiture of the Company's ADS business.~~

~~The increase in net sales for the~~ ~~nine~~ ~~months ended September 30, 2022 compared with the~~ ~~nine~~ ~~months ended September 30, 2021 was primarily driven by strong organic growth (including positive pricing), partially offset by the unfavorable impact of foreign currency exchange rate changes. The increase in net income for the nine months ended September 30, 2022 compared with the nine months ended September 30, 2021 was primarily due to~~ favorable price/mix and the impact of higher volume, partially offset by higher ~~material, logistics and other~~ operating costs and higher impairment and restructuring ~~charges, higher pension mark-to-market charges and a higher tax rate.~~charges.

Outlook:

The Company expects ~~2022~~2023 full-year revenue to be up ~~approximately 9%~~between 8% and 11% compared to ~~2021, primarily due to higher demand across most end markets, positive pricing~~2022, driven by organic growth and the ~~continued execution~~benefit of ~~growth initiatives, partially offset by the net unfavorable impact~~acquisitions (net of ~~foreign currency exchange rates.~~divestitures). The Company's earnings are expected to be up in ~~2022~~2023 compared with ~~2021, primarily~~2022, due to the favorable impact of price/mix and higher sales volume, as well as lower material and logistics costs, partially offset by higher ~~material, logistics and other~~ operating costs, ~~as well as~~higher impairment and restructuring charges, the unfavorable impact of foreign currency exchange rate changes and higher interest ~~costs and a higher tax rate.~~expense.

The Company expects to generate a higher amount of cash from operating activities in 2023 compared to 2022, ~~above 2021 levels~~primarily driven by higher ~~earnings.~~earnings and improved working capital performance. The Company expects higher capital expenditures ~~of roughly 4.0%~~in 2023 compared to 2022, but relatively in line with 2022 spending as a percentage of sales ~~in 2022, compared with 3.6% of sales ($148 million) in 2021.~~(4.0%).

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THE STATEMENT OF INCOME

~~Sales:~~Operating Income:

Three Months Ended
September 30,
2022 2021 $ Change % Change
Net sales $ 1,136.4 $ 1,037.3 $ 99.1 9.6 %

Nine Months Ended
September 30,
2022 2021 $ Change % Change
Net sales $ 3,414.7 $ 3,125.6 $ 289.1 9.2 %


	Three Months Ended March 31,
	2023			2022			$ Change		Change
Net sales	$	1,262.8		$	1,124.6		$	138.2	12.3%
Cost of products sold	846.0			786.3			59.7		7.6%
Selling, general and administrative expenses	186.8			154.1			32.7		21.2%
Amortization of intangible assets	13.5			10.9			2.6		23.9%
Impairment and restructuring charges	28.9			1.0			27.9		NM
Operating income	$	187.6		$	172.3		15.3		8.9%
Operating income % to net sales	14.9		%	15.3		%			(40)	bps

Net sales increased for the three months ended ~~September 30, 2022~~March 31, 2023 compared with the three months ended ~~September 30, 2021.~~March 31, 2022. The increase was ~~primarily due to~~driven by strong organic growth of ~~$141~~$123 million and the benefit of acquisitions (net of $5divestitures) of $45 million, partially offset by the unfavorable impact of foreign currency exchange rate changes of ~~$47~~$30 million. The higher organic revenue was driven by higher demand and positive pricing in both the ~~Mobile~~Engineered Bearings and ~~Process Industries segments, and higher net pricing.~~Industrial Motion segments.

~~Net sales~~Operating income increased for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 compared with the ~~nine~~three months ended ~~September 30, 2021. The increase was primarily~~March 31, 2022, due to ~~strong organic growth~~the favorable net impact of ~~$376~~higher sales volume (including pricing), less cost of products sold, partially offset by higher selling, general and administrative ("SG&A") expenses, higher impairment and restructuring charges and increased amortization expense.

•Cost of products sold increased for the three months ended March 31, 2023 compared with the three months ended March 31, 2022, due to higher manufacturing costs, net of favorable mix impact, of $57 million, and the ~~benefit~~incremental cost of goods sold from acquisitions (net of ~~$10~~divestitures) of $34 million, partially offset by the ~~unfavorable~~ impact of foreign currency exchange rate changes of ~~$97~~$16 million and lower material and logistics costs of $14 million. The higher ~~organic revenue was driven by higher demand~~manufacturing costs reflect continued labor and input cost inflation, as well as the impact of reduced inventory build in the ~~Mobile and Process Industries segments, and higher net pricing.~~current quarter compared to a year ago.

~~Gross Profit:~~

Three Months Ended
September 30,
2022 2021 $ Change Change
Gross profit $ 322.8 $ 267.9 $ 54.9 20.5%
Gross profit % to net sales 28.4 % 25.8 % 260 bps

Nine Months Ended
September 30,
2022 2021 $ Change Change
Gross profit $ 992.0 $ 869.4 $ 122.6 14.1%
Gross profit % to net sales 29.1 % 27.8 % 130 bps

~~Gross profit~~•SG&A expenses increased for the three months ended ~~September 30, 2022~~March 31, 2023 compared with the three months ended ~~September 30, 2021,~~ primarily due to favorable price/mix of $103 million and the impact of higher volume of $27 million, partially offset by higher material and logistics costs of $35 million, unfavorable manufacturing performance of $35 million and the unfavorable impact of foreign currency exchange rate changes of $4 million.

Gross profit increased for the nine months ended September 30, 2022 compared with the nine months ended September 30, 2021, primarily due to favorable price/mix of $221 million and the impact of higher volume of $81 million, partially offset by higher material and logistics costs of $124 million, unfavorable manufacturing performance of $43 million and the unfavorable impact of foreign currency exchange rate changes of $9 million.

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~~Selling, General and Administrative ("SG&A") Expenses:~~

Three Months Ended
September 30,
2022 2021 $ Change Change
Selling, general and administrative expenses $ 159.8 $ 140.7 $ 19.1 13.6 %
Selling, general and administrative expenses % to net sales 14.1 % 13.6 % 50 bps

Nine Months Ended
September 30,
2022 2021 $ Change Change
Selling, general and administrative expenses $ 469.8 $ 434.2 $ 35.6 8.2 %
Selling, general and administrative expenses % to net sales 13.8 % 13.9 % (10) bps

~~SG&A expenses increased for the~~ ~~three and nine~~ ~~months ended September 30, 2022 compared with the~~ ~~three and nine~~ ~~months ended September 30, 2021.~~March 31, 2022. The increase for the three ~~and nine~~ months ended ~~September 30, 2022,~~March 31, 2023, as compared to the year-ago ~~periods,~~period was ~~primari~~lyprimarily due to higher compensation costs (including incentive-based compensation) and increased spending to support the higher sales and business activity levels.

~~Impairment and Restructuring:~~

Three Months Ended
September 30,
2022 2021 $ Change % Change
Impairment charges $ 29.5 $ — $ 29.5 NM
Severance and related benefit costs 1.4 2.5 (1.1) NM
Exit costs 0.4 0.4 — — %
Total $ 31.3 $ 2.9 $ 28.4 NM

Nine Months Ended
September 30,
2022 2021 $ Change % Change
Impairment charges $ 38.3 $ 4.5 $ 33.8 751.1 %
Severance and related benefit costs 2.8 3.1 (0.3) (9.7) %
Exit costs 1.2 0.6 0.6 100.0 %
Total $ 42.3 $ 8.2 $ 34.1 415.9 %

~~Impairment and restructuring charges~~•Amortization of ~~$31.3 million during~~intangible assets increased for the three months ended September 30, 2022 were primarily due to impairment charges of $29.3 million related to the anticipated divestiture of the Company's ADS business. In addition, the Company incurred severance and related benefits, and exit costs associatedMarch 31, 2023 compared with ~~the closure of the Company's Villa Carcina, Italy bearing plant during~~ the three months ended ~~September 30, 2022. This initiative was undertaken to reduce headcount and continue to right-size the Company's manufacturing footprint.~~

~~Impairment and restructuring charges of $42.3 million during the nine months ended September 30,~~March 31, 2022, ~~were comprised~~ primarily ~~of impairment charges related~~due to the ~~anticipated divestiture~~addition of intangible assets from the ~~ADS business and property, plant and equipment at~~GGB acquisition, which was completed in the ~~Company's joint venture in Russia. In addition, the Company incurred severance and related benefits, and exit costs associated with the closure~~fourth quarter of ~~the Company's Villa Carcina, Italy bearing plant during the nine months ended September 30,~~ 2022.

•Impairment and restructuring charges ~~of $2.9 million and $8.2 million during~~were higher for the three ~~and nine~~ months ended ~~September 30, 2021 were comprised~~March 31, 2023 compared with the three months ended March 31, 2022 primarily ~~of severance and related benefits related~~due to the ~~planned closures~~impairment of goodwill. 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. As a result of this analysis the Company determined that one of the ~~Company's Villa Carcina, Italy bearing plant~~new reporting units within the Industrial Motion segment could not support the carrying value of its goodwill, and ~~Indianapolis, Indiana chain plant. These initiatives were expected to reduce headcount and right-size the Company's manufacturing footprint. In addition,~~subsequently recorded a pretax impairment ~~charges during the~~ ~~nine~~ ~~September 30, 2021 were related to certain engineering-related assets used~~loss of $28.3 million in the ~~business. Management concluded no further investment would be made in the engineering-related assets and as a result, reduced the value to zero.~~first quarter of 2023.

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Interest Income and Expense:


	Three Months Ended March 31,
	2023		2022		$ Change		% Change
Interest expense	$	(24.1)	$	(14.3)	$	(9.8)	68.5	%
Interest income	1.5		0.6		$	0.9	150.0	%

The increase in interest expense for the three months ended March 31, 2023 compared with the three months ended March 31, 2022 was due to increased debt levels and higher average interest rates.

Other Income (Expense):


	Three Months Ended March 31,
	2023		2022		$ Change		% Change

Non-service pension and other postretirement income	$	0.1	$	1.3	$	(1.2)	(92.3)	%
Other income, net	3.1		0.2		2.9		NM
Total other income	$	3.2	$	1.5	$	1.7	113.3	%

~~Refer~~Non-service pension and other postretirement income decreased for the three months ended March 31, 2023 compared with the three months ended March 31, 2022, primarily due to a lower expected return on pension plan assets and higher interest expense on pension plan obligations. In addition, the Company recognized a pension remeasurement gain in 2023, compared to pension remeasurement loss in 2022. Refer to Note 1416 - ~~Impairment~~ Retirement Benefit Plans and ~~Restructuring Charges~~ Note 17 - Other Postretirement Benefit Plans in the Notes to the Consolidated Financial Statements for additional information.

Other income, net increased for the three months ended March 31, 2023 compared with the three months ended March 31, 2022, due to gains on divestitures of $4.0 million primarily related to the sale of SE Setco, a 50% owned joint venture, partially offset foreign currency losses of $0.2 million, net of derivative activity, during the three months ended March 31, 2023, compared to foreign currency gains of $0.5 million, net of derivative activity, during the three months ended March 31, 2022.

~~Interest~~ Income ~~and~~Tax Expense:

Three Months Ended
September 30,
2022 2021 $ Change % Change
Interest expense $ (19.3) $ (14.8) $ (4.5) 30.4 %
Interest income 1.1 0.5 $ 0.6 120.0 %


	Three Months Ended March 31,
	2023			2022			$ Change		Change
Provision for income taxes	$	42.5		$	38.2		$	4.3	11.3	%
Effective tax rate	25.3		%	23.9		%			140	bps

Nine Months Ended
September 30,
2022 2021 $ Change % Change
Interest expense $ (51.9) $ (45.0) $ (6.9) 15.3 %
Interest income 2.7 1.7 $ 1.0 58.8 %
Income tax expense increased $4.3 million for the three months ended March 31, 2023 compared with the three months ended March 31, 2022 primarily due to an increase in the mix of earnings in international jurisdictions with relatively higher tax rates.

Refer to Note 6 - Income Taxes for more information on the computation of the income tax expense in interim periods.

Table of Contents

BUSINESS SEGMENTS

The Company's reportable segments are product-based business groups that serve customers in diverse industrial markets. The primary measurement used by management to measure the financial performance of each segment is EBITDA. Refer to Note 4 - Segment Informationin the Notes to the Consolidated Financial Statements for the reconciliation of EBITDA by segment to consolidated income before income taxes.

The presentation of segment results below includes a reconciliation of the changes in net sales for each segment reported in accordance with U.S. GAAP to net sales adjusted to remove the effects of acquisitions and divestitures completed in 2023 and 2022 and foreign currency exchange rate changes. The effects of acquisitions, divestitures and foreign currency exchange rate changes on net sales are removed to allow investors and the Company to meaningfully evaluate the percentage change in net sales on a comparable basis from period to period.

The following item represents the Company's acquisitions and divestitures completed in 2023 and 2022:

•The Company acquired ARB during the first quarter of 2023. Results for ARB are reported in the Engineered Bearings segment.

•The Company acquired GGB during the fourth quarter of 2022. Results for GGB are reported in the Engineered Bearings segment.

•The Company completed the sale of Timken Aerospace Drive Systems ("ADS") during the fourth quarter of 2022. Results for ADS were reported in the Industrial Motion segment.

•The Company completed the sale of Timken-Rus Service Company ooo ("Timken Russia") during the third quarter of 2022. Results for Timken Russia were reported in the Engineered Bearings segment.

•The Company acquired Spinea during the second quarter of 2022. Results for Spinea are reported in the Industrial Motion segment.

Engineered Bearings Segment:


	Three Months Ended March 31,
	2023			2022			$ Change		Change
Net sales	$	900.7		$	772.4		$	128.3	16.6%
EBITDA	$	205.0		$	168.3		$	36.7	21.8%
EBITDA margin	22.8		%	21.8		%			100	bps


	Three Months Ended March 31,
	2023		2022		$ Change		% Change
Net sales	$	900.7	$	772.4	$	128.3	16.6	%

Less: Acquisitions	55.7				55.7		NM
Divestitures	(3.5)				(3.5)		NM
Currency	(22.1)				(22.1)		NM
Net sales, excluding the impacts of acquisitions, divestitures and currency	$	811.4	$	772.4	$	39.0	5.0	%

The Engineered Bearings segment's net sales, excluding the effects of acquisitions, divestitures and foreign currency exchange rate changes, increased $39.0 million or 5.0% in the three months ended March 31, 2023 compared with the three months ended March 31, 2022. The increase reflects organic growth (including pricing) across most sectors, led by renewable energy, distribution, rail and heavy industries. EBITDA increased by $36.7 million or 21.8% for the three months ended March 31, 2023 compared with the three months ended March 31, 2022, primarily due to favorable price/mix, the impact of higher sales volume, lower material and logistics costs and the benefit of acquisitions, partially offset by higher manufacturing costs and SG&A expenses, and the unfavorable impact of foreign currency exchange rate changes.

Table of Contents

Industrial Motion Segment:


	Three Months Ended March 31,
	2023			2022			$ Change		Change
Net sales	$	362.1		$	352.2		$	9.9	2.8%
EBITDA	$	48.2		$	62.4		$	(14.2)	(22.8%)
EBITDA margin	13.3		%	17.7		%			(440)	bps


	Three Months Ended March 31,
	2023		2022		$ Change		% Change
Net sales	$	362.1	$	352.2	$	9.9	2.8	%
Less: Acquisitions	5.3				5.3		NM
Divestitures	(12.8)				(12.8)		NM
Currency	(7.5)				(7.5)		NM
Net sales, excluding the impact of acquisitions, divestitures and currency	$	377.1	$	352.2	$	24.9	7.1	%

The Industrial Motion segment's net sales, excluding the effects of acquisitions, divestitures and foreign currency exchange rate changes, increased $24.9 million or 7.1% in the three months ended March 31, 2023 compared with the three months ended March 31, 2022. The increase reflects organic growth (including pricing) across the portfolio, with the automatic lubrication systems platform posting the strongest growth. EBITDA decreased $14.2 million or 22.8% for the three months ended March 31, 2023 compared with the three months ended March 31, 2022 primarily due to higher impairment and restructuring charges, as well as higher manufacturing costs and SG&A expenses, partially offset by favorable price/mix and the impact of higher sales volume. The higher impairment and restructuring charges were primarily related to the impairment of goodwill for one of the segment's reporting units.

Unallocated Corporate


	Three Months Ended March 31,
	2023			2022			$ Change		Change
Unallocated corporate expense	$	(17.7)		$	(12.9)		$	(4.8)	37.2	%
Unallocated corporate expense % to net sales	(1.4)		%	(1.1)		%			(30)	bps

The increase in ~~interest~~unallocated corporate expense for ~~the three and nine months ended September 30, 2022 compared with the three and nine months ended September 30, 2021 was primarily due to higher average debt outstanding due to the~~ ~~issuance of the $350 million 2032 Notes in March 2022~~. Proceeds from the 2032 Notes were used for general corporate purposes, which included repayment of borrowings under the Senior Credit Facility and the Accounts Receivable Facility outstanding at the time of issuance. In addition, a portion of the proceeds from the 2032 Notes was used to fund the Spinea acquisition, which closed in the second quarter of 2022.

~~Other Income (Expense):~~

Three Months Ended
September 30,
2022 2021 $ Change % Change
Non-service pension and other postretirement
income $ 1.3 $ 0.5 $ 0.8 NM
Other income, net 2.3 1.5 0.8 53.3 %
Total other income $ 3.6 $ 2.0 $ 1.6 NM

Nine Months Ended
September 30,
2022 2021 $ Change % Change
Non-service pension and other postretirement
(expense) income $ (5.3) $ 5.9 $ (11.2) (189.8) %
Other income, net 1.4 0.3 1.1 366.7 %
Total other (expense) income $ (3.9) $ 6.2 $ (10.1) (162.9) %

Non-service pension and other postretirement income increased for the three months ended September 30, 2022 compared with the three months ended September 30, 2021, primarily due to lower pension remeasurement losses in 2022. Non-service pension and other postretirement (expense) income decreased for the nine months ended September 30, 2022 compared with the nine months ended September 30, 2021, primarily due to higher pension remeasurement losses in 2022. The remeasurements were triggered by expected lump sum payments to new retirees exceeding annual service and interest costs for two of the Company's U.S. defined benefit pension plans in 2022. As a result of the remeasurements, the Company recognized net actuarial losses of $1.0 million and $3.9 million during the three months ended ~~September 30, 2022 and September 30, 2021, respectively, and $15.2 million and $8.3 million during the~~ ~~nine months ended~~ ~~September 30, 2022 and September 30, 2021, respectively. In addition, the decrease was due to a lower expected return on plan assets in 2022. Refer to~~ ~~Note 15 - Retirement Benefit Plans~~ ~~and~~ ~~Note 16 - Other Postretirement Benefit Plans~~ in~~the Notes to the Consolidated Financial Statements for additional information.~~

~~Table of Contents~~

~~Income Tax Expense:~~

Three Months Ended
September 30,
2022 2021 $ Change Change
Provision for income taxes $ 26.7 $ 20.4 $ 6.3 30.9 %
Effective tax rate 22.8 % 18.2 % 460 bps

Nine Months Ended
September 30,
2022 2021 $ Change Change
Provision for income taxes $ 108.9 $ 75.1 $ 33.8 45.0 %
Effective tax rate 25.5 % 19.3 % 620 bps

Income tax expense increased $6.3 million for the three months ended September 30, 2022 compared with the three months ended September 30, 2021 primarily due to the net unfavorable impact of discrete tax items in comparison to the year ago period.

Income tax expense increased $33.8 million for the nine months ended September 30, 2022 compared with the nine months ended September 30, 2021 primarily due to an unfavorable mix of earnings in higher tax rate jurisdictions, the net unfavorable impact of discrete tax items, including a discrete tax benefits in the year ago period, and lower deductions for stock-based compensation.

~~Refer to~~ ~~Note 6 - Income Taxes~~ ~~for more information on the computation of the income tax expense in interim periods.~~

~~BUSINESS SEGMENTS~~

~~The Company~~'s reportable segments are business units that serve different industry sectors. While the segments operate using shared infrastructure, each reportable segment is managed to address specific customer needs in these diverse market sectors. The primary measurement used by management to measure the financial performance of each segment is EBITDA. Refer to ~~Note 5 - Segment Informationin the Notes to the Consolidated Financial Statements for the reconciliation of EBITDA by segment to consolidated income before income taxes.~~

In August 2022, the Company announced organizational changes, which included the appointment of executive leaders for its Engineered Bearings and Industrial Motion product groups. The Company is currently evaluating whether these changes will affect its reportable segments.

The presentation of segment results below includes a reconciliation of the changes in net sales for each segment reported in accordance with U.S. GAAP to net sales adjusted to remove the effects of acquisitions and divestitures completed in 2022 and 2021 and foreign currency exchange rate changes. The effects of acquisitions, divestitures and foreign currency exchange rate changes on net sales are removed to allow investors and the Company to meaningfully evaluate the percentage change in net sales on a comparable basis from period to period.

~~The following item represents the Company's acquisitions and divestitures completed in 2022 and 2021:~~

•The Company completed the sale of Timken Russia during the third quarter of 2022. Results for Timken Russia were reported in the Mobile Industries and Process Industries segments based on customers and underlying market sectors served.

•~~The Company acquired Spinea during the second quarter of 2022. The majority of the results for Spinea are reported~~ ~~in the Process Industries segment.~~

•~~The Company acquired iMS during the third quarter of 2021. The majority of the results for iMS are reported~~ ~~in the Process Industries segment.~~

~~Table of Contents~~

~~Mobile Industries Segment:~~

Three Months Ended
September 30,
2022 2021 $ Change Change
Net sales $ 526.9 $ 487.3 $ 39.6 8.1%
EBITDA $ 20.0 $ 53.2 $ (33.2) (62.4%)
EBITDA margin 3.8 % 10.9 % (710) bps

Three Months Ended
September 30,
2022 2021 $ Change % Change
Net sales $ 526.9 $ 487.3 $ 39.6 8.1 %
Less: Divestitures (0.3) — (0.3) NM
Currency (20.1) — (20.1) NM
Net sales, excluding the impacts of divestitures and currency $ 547.3 $ 487.3 $ 60.0 12.3 %

Nine Months Ended
September 30,
2022 2021 $ Change Change
Net sales $ 1,610.9 $ 1,486.0 $ 124.9 8.4%
EBITDA $ 164.2 $ 200.1 $ (35.9) (17.9%)
EBITDA margin 10.2 % 13.5 % (710) bps

Nine Months Ended
September 30,
2022 2021 $ Change % Change
Net sales $ 1,610.9 $ 1,486.0 $ 124.9 8.4 %
Less: Divestitures (0.3) (0.3) NM
Currency (45.0) — (45.0) NM
Net sales, excluding the impacts of divestitures and currency $ 1,656.2 $ 1,486.0 $ 170.2 11.5 %

The Mobile Industries segment's net sales, excluding the effects of divestitures and foreign currency exchange rate changes, increased $60.0 million or 12.3% in the three months ended September 30, 2022 compared with the three months ended September 30, 2021, ~~reflecting increased shipments in the off-highway and automotive sectors, as well as higher net pricing.~~ EBITDA decreased by $33.2 million or 62.4% for the three months ended September 30, 2022 compared with the three months ended September 30, 2021, primarily due to higher impairment and restructuring charges, higher material, logistics and other operating costs, partially offset by favorable price/mix and the impact of higher volume.

The Mobile Industries segment's net sales, excluding the effects of divestitures and foreign currency exchange rate changes, increased $170.2 million or 11.5% in the nine months ended September 30, 2022 compared with the nine months ended September 30, 2021, reflecting increased shipments in the off-highway, heavy truck, rail and automotive and aerospace sectors, as well as higher net pricing. EBITDA decreased by $35.9 million or 17.9% for the nine months ended September 30, 2022 compared with the nine months ended September 30, 2021, primarily due to higher material, logistics and other operating costs, higher impairment and restructuring charges, partially offset by favorable price/mix and the impact of higher volume.

~~Table of Contents~~

~~Process Industries Segment:~~

Three Months Ended
September 30,
2022 2021 $ Change Change
Net sales $ 609.5 $ 550.0 $ 59.5 10.8%
EBITDA $ 165.3 $ 129.7 $ 35.6 27.4%
EBITDA margin 27.1 % 23.6 % 350 bps

Three Months Ended
September 30,
2022 2021 $ Change % Change
Net sales $ 609.5 $ 550.0 $ 59.5 10.8 %
Less: Acquisitions 7.0 — 7.0 NM
         Divestitures (1.5) — (1.5) NM
         Currency (27.1) — (27.1) NM
Net sales, excluding the impact of acquisitions,
   divestitures and currency $ 631.1 $ 550.0 $ 81.1 14.7 %

Nine Months Ended
September 30,
2022 2021 $ Change Change
Net sales $ 1,803.8 $ 1,639.6 $ 164.2 10.0%
EBITDA $ 484.4 $ 401.9 $ 82.5 20.5%
EBITDA margin 26.9 % 24.5 % 240 bps

Nine Months Ended
September 30,
2022 2021 $ Change % Change
Net sales $ 1,803.8 $ 1,639.6 $ 164.2 10.0 %
Less: Acquisitions 12.1 — 12.1 NM
         Divestitures (1.5) — (1.5) NM
         Currency (52.1) — (52.1) NM
Net sales, excluding the impact of acquisitions,
   divestitures and currency $ 1,845.3 $ 1,639.6 $ 205.7 12.5 %

The Process Industries segment's net sales, excluding the effects of acquisitions, divestitures and foreign currency exchange rate changes, increased $81.1 million or 14.7% in the three months ended September 30, 2022 compared with the three months ended September 30, 2021. The increase was primarily driven by increased demand in the distribution, heavy industries, general industrial and marine sectors, as well as higher net pricing, partially offset by lower revenue in the renewable energy sector. ~~EBITDA increased $35.6 million or 27.4% for the three months ended September 30, 2022 compared with the three months ended September 30, 2021~~ ~~primarily due to favorable price/mix and the impact of higher volume, partially offset by higher material, logistics and other operating costs.~~

~~The Process Industries segment's net sales, excluding the effects of acquisitions, divestitures and foreign currency exchange rate changes, increased $205.7 million or 12.5% in the~~ ~~nine~~ ~~months ended September 30, 2022~~March 31, 2023 compared with the ~~nine~~three months ended ~~September 30, 2021~~. The increase was primarily driven by increased demand in the distribution, general industrial, heavy industries, marine and services sectors, as well as higher net pricing, partially offset by lower revenue in the renewable energy sector. ~~EBITDA increased $82.5 million or 20.5% for the~~ ~~nine~~ ~~months ended September 30,~~March 31, 2022 ~~compared with the~~ ~~nine~~ ~~months ended September 30, 2021~~ ~~primarily due to favorable price/mix and the impact of higher volume, partially offset by higher material, logistics and other operating costs.~~

~~Table of Contents~~

~~Unallocated Corporate:~~

Three Months Ended
September 30,
2022 2021 $ Change Change
Unallocated corporate expense $ (9.1) $ (11.7) $ 2.6 (22.2 %)
Unallocated corporate expense % to net sales (0.8) % (1.1) % 30 bps

Nine Months Ended
September 30,
2022 2021 $ Change Change
Unallocated corporate expense $ (35.4) $ (34.9) $ (0.5) 1.4 %
Unallocated corporate expense % to net sales (1.0) % (1.1) % 10 bps

~~The decrease in unallocated corporate expense for the three months ended September 30, 2022 compared with the three months ended September 30, 2021~~ was primarily due to ~~foreign currency exchange gains recorded in 2022, compared to foreign currency exchange losses in the prior year, partially offset by~~ higher compensation expense and other spending to support increased business activity levels.

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CASH FLOW

Nine Months Ended
September 30,
2022 2021 $ Change
Net cash provided by operating activities $ 222.3 $ 284.6 $ (62.3)
Net cash used in investing activities (242.0) (115.9) (126.1)
Net cash provided by (used in) financing activities 88.5 (222.4) 310.9
Effect of exchange rate changes on cash (25.1) (4.8) (20.3)
Increase (decrease) in cash and cash equivalents
and restricted cash $ 43.7 $ (58.5) $ 102.2


	Three Months Ended March 31,
	2023		2022		$ Change


Net cash provided by (used in) operating activities	$	78.6	$	(1.2)	$	79.8


Net cash used in investing activities	(64.5)		(35.0)		(29.5)


Net cash (used in) provided by financing activities	(17.5)		204.7		(222.2)
Effect of exchange rate changes on cash	1.8		(1.2)		3.0
(Decrease) Increase in cash and cash equivalents and restricted cash	$	(1.6)	$	167.3	$	(168.9)

Operating Activities:

The ~~decrease~~increase in net cash provided by operating activities for the first ~~nine~~three months of ~~2022~~2023 compared with the first ~~nine~~three months of ~~2021~~2022 was primarily due to ~~an increase~~a decrease in cash used for working capital items of ~~$140.2 million, partially offset by an increase in the~~$74.6 million. ~~benefit~~ ~~of incom~~e taxes on cash of $14.0 million, a decrease in pension and other postretirement benefit contributions and payments of $6.6 million and a net increase in non-cash charges included in net income, including impairment charges, pension expense and stock-based compensation expense. Refer to the tables below for additional detail of the impact of each line item on net cash provided by operating activities.

The following table displays the impact of working capital items on cash during the ~~nine~~three months of ~~2022~~2023 and ~~2021,~~2022, respectively:


		Nine Months Ended September 30,							Three Months Ended March 31,
		2022		2021		$ Change			2023		2022		$ Change
Cash (used in) provided by:	Cash (used in) provided by:							Cash (used in) provided by:
Accounts receivable	Accounts receivable	$	(157.0)	$	(127.5)	$	(29.5)	Accounts receivable	$	(50.3)	$	(118.2)	$	67.9
Unbilled receivables	Unbilled receivables	(5.2)		25.1		(30.3)		Unbilled receivables	(11.1)		16.1		(27.2)
Inventories	Inventories	(147.1)		(144.2)		(2.9)		Inventories	6.1		(70.2)		76.3
Trade accounts payable	Trade accounts payable	(12.6)		60.5		(73.1)		Trade accounts payable	(9.4)		7.7		(17.1)
Other accrued expenses	Other accrued expenses	45.8		50.2		(4.4)		Other accrued expenses	(44.8)		(19.5)		(25.3)
Cash used in working capital items	Cash used in working capital items	$	(276.1)	$	(135.9)	$	(140.2)	Cash used in working capital items	$	(109.5)	$	(184.1)	$	74.6

The following table displays the impact of income taxes on cash during the first ~~nine~~three months of ~~2022~~2023 and ~~2021,~~2022, respectively:


		Nine Months Ended September 30,							Three Months Ended March 31,
		2022		2021		$ Change			2023		2022		$ Change
Accrued income tax expense	Accrued income tax expense	$	108.9	$	75.1	$	33.8	Accrued income tax expense	$	42.5	$	38.2	$	4.3
Income tax payments	Income tax payments	(98.8)		(80.0)		(18.8)		Income tax payments	(54.8)		(25.3)		(29.5)
Other items	Other items	(2.8)		(1.8)		(1.0)		Other items	0.1		(4.8)		4.9
Change in income taxes	Change in income taxes	$	7.3	$	(6.7)	$	14.0	Change in income taxes	$	(12.2)	$	8.1	$	(20.3)

Investing Activities:

The increase in net cash used in investing activities for the first ~~nine~~three months of ~~2022~~2023 compared with the first ~~nine~~three months of ~~2021~~2022 was primarily due to an increase in cash used for acquisitions of ~~$145.2 million and an increase in capital expenditures of $18.9 million, partially offset by a decrease in cash used for investments in short-term marketable securities of $33.2~~$29.2 million.

Financing Activities:

The change in net cash used in financing activities for the first ~~nine~~three months of ~~2022~~2023 compared with the first ~~nine~~three months of ~~2021~~2022 was primarily due to an increase in net borrowings of ~~$451.5~~$269.3 million, partially offset by an ~~increase~~decrease in the purchases of treasury shares of ~~$136.7~~$46.0 million.

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LIQUIDITY AND CAPITAL RESOURCES

Reconciliation of total debt to net debt and the ratio of net debt to capital:

Net Debt:


		September 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
Short-term debt, including current portion of long-term debt	Short-term debt, including current portion of long-term debt	$	371.8	$	53.8	Short-term debt, including current portion of long-term debt	$	48.6	$	49.0

Long-term debt	Long-term debt	1,411.3		1,411.1		Long-term debt	1,978.8		1,914.2
Total debt	Total debt	$	1,783.1	$	1,464.9	Total debt	$	2,027.4	$	1,963.2
Less: Cash and cash equivalents	Less: Cash and cash equivalents	300.9		257.1		Less: Cash and cash equivalents	330.5		331.6
Net debt	Net debt	$	1,482.2	$	1,207.8	Net debt	$	1,696.9	$	1,631.6

Ratio of Net Debt to Capital:


		September 30, 2022			December 31, 2021				March 31, 2023			December 31, 2022
Net debt	Net debt	$	1,482.2		$	1,207.8		Net debt	$	1,696.9		$	1,631.6
Total equity	Total equity	2,178.8			2,377.7			Total equity	2,436.3			2,352.9
Net debt plus total equity (capital)	Net debt plus total equity (capital)	$	3,661.0		$	3,585.5		Net debt plus total equity (capital)	$	4,133.2		$	3,984.5
Ratio of net debt to capital	Ratio of net debt to capital	40.5		%	33.7		%	Ratio of net debt to capital	41.1		%	40.9		%

The Company presents net debt because it believes net debt is more representative of the Company's financial position than total debt due to the amount of cash and cash equivalents held by the Company and the ability to utilize such cash and cash equivalents to reduce debt if needed.

At ~~September 30, 2022,~~March 31, 2023, the Company had strong liquidity with ~~$300.9~~$330.5 million of cash and cash equivalents on the Consolidated Balance Sheet, as well as ~~$742.2~~$686.4 million of available ~~resources from~~under committed credit lines. Of the ~~$300.9~~$330.5 million of cash and cash equivalents, ~~$267.2~~$327.9 million resided in jurisdictions outside the United States. Repatriation of non-U.S. cash could be subject to taxes and some portion may be subject to governmental restrictions. ~~As of September 30, 2022, Timken had $10.6 million of cash in Russia, which the Company is presently unable to repatriate.~~ Part of the Company's strategy is to grow in attractive market sectors, many of which are outside the United States. This strategy includes making investments in facilities, equipment and potential new acquisitions. The Company plans to fund these investments, as well as meet working capital requirements, with cash and cash equivalents and unused lines of credit within the geographic location of these investments where feasible.

On ~~June 25, 2019,~~December 5, 2022, the Company entered into the Credit Agreement, which is comprised of the $750.0 million Senior Credit Facility and the $400.0 million 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 2023 Term Loan. The Credit Agreement also replaced interest rates based on LIBOR with interest rates based on SOFR. At March 31, 2023, the Company had $63.6 million of outstanding borrowings under the Senior Credit Facility, which ~~is a $650.0 million unsecured revolving credit facility that matures on June 25, 2024. At September 30, 2022, the Senior Credit Facility had outstanding borrowings of $7.8 million, which~~ reduced the availability under this facility to ~~$642.2~~$686.4 million. The ~~Senior~~ Credit ~~Facility~~Agreement has two financial covenants: a consolidated leverage ratio and a consolidated interest coverage ratio. The maximum consolidated leverage ratio permitted under the Senior Credit Facility is 3.5 to 1.0. As of ~~September 30, 2022,~~March 31, 2023, the Company's consolidated leverage ratio was ~~2.22~~1.84 to 1.0. The minimum consolidated interest coverage ratio permitted under the Senior Credit Facility is 3.0 to 1.0. As of ~~September 30, 2022,~~March 31, 2023, the Company's consolidated interest coverage ratio was ~~12.45~~11.33 to 1.0.

The interest rate under the Senior Credit Facility is variable with a spread based on the Company's debt rating. The average rate on outstanding U.S. dollar borrowings was 5.72% and the average rate on outstanding Euro borrowings was ~~1.00%~~3.46% as of ~~September 30, 2022.~~March 31, 2023. In addition, the Company pays a facility fee based on the applicable rate, which is variable with a spread based on the Company's debt rating, multiplied by the aggregate commitments of all of the lenders under the Senior Credit Facility. As of ~~September 30, 2022,~~March 31, 2023, the Company carried investment-grade credit ratings with both Moody's (Baa2) and S&P Global (BBB-).

Table of Contents

The Company has a $100 million Accounts Receivable Facility, which matures on November 30, 2024. The Accounts Receivable Facility is subject to certain borrowing base limitations and is secured by certain domestic trade accounts receivable of the Company. As of ~~September 30, 2022,~~March 31, 2023, the Company had no$100 million outstanding borrowings under the Accounts Receivable Facility and no borrowing base limitations. ~~Availability~~There was no availability under the Accounts Receivable Facility ~~was $100 million~~ as of ~~September 30, 2022.~~

~~Table of Contents~~

March 31, 2023.

Other sources of liquidity include uncommitted short-term lines of credit for certain of the Company's foreign subsidiaries, which provide for borrowings of up to ~~approximately $235.8~~$237.4 million. At ~~September 30, 2022,~~March 31, 2023, the Company had borrowings outstanding of ~~$50.9~~$38.7 million and bank guarantees of ~~$2.6~~$3.7 million, which reduced the aggregate availability under these facilities to ~~approximately $182.3~~$195.0 million.

On March 28, 2022, the Company issued the 2032 Notes in the aggregate principal amount of $350 million with an interest rate of 4.125%, maturing on April 1, ~~2032~~.2032. Proceeds from the 2032 Notes were used for general corporate purposes, which included repayment of borrowings under the Senior Credit Facility and the Accounts Receivable Facility outstanding at the time of issuance. ~~In addition, a portion of the proceeds from the 2032 Notes was used to fund the Spinea acquisition, which closed in the second quarter of 2022.~~

At ~~September 30, 2022,~~March 31, 2023, the Company was in full compliance with all applicable covenants on its outstanding debt.

The Company expects to generate higher amount of cash from operating activities in 2023 compared to 2022, ~~above 2021 levels~~ driven by higher ~~earnings.~~earnings and improved working capital performance. The Company expects higher capital expenditures ~~of roughly 4.0%~~in 2023 compared to 2022, but relatively in line with 2022 spending as a percentage of sales ~~in 2022, compared with 3.6% of sales ($148 million) in 2021.~~(4.0%).

Financing Obligations and Other Commitments:

During the first ~~nine~~three months of ~~2022,~~2023, the Company made cash contributions and payments of ~~$8.9~~$4.4 million to its global defined benefit pension plans and ~~$2.7~~$0.4 million to its other postretirement benefit plans. The Company expects to make contributions to its global defined benefit plans of approximately ~~$11~~$25 million in ~~2022.~~2023. The Company expects to make payments of approximately $4 million to its other postretirement benefit plans in ~~2022.~~2023. Excluding mark-to-market charges, the Company expects higher pension and other postretirement benefits expense in ~~2022~~2023 compared to ~~2021~~2022 primarily due to lower expected returns on pension plan ~~assets and higher interest expense, partially offset by lower service costs.~~assets.

The Company does not have any off-balance sheet arrangements with unconsolidated entities or other persons.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The Company's financial statements are prepared in accordance with U.S. GAAP. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. The Company reviews its critical accounting policies throughout the year. The Company has concluded that there have been no significant changes to its critical accounting policies or estimates, as described in its Annual Report on Form 10-K for the year ended December 31, ~~2021,~~2022, during the ~~nine~~three months ended ~~September 30, 2022.~~March 31, 2023.

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OTHER MATTERS

Foreign Currency:

Assets and liabilities of subsidiaries are translated at the rate of exchange in effect on the balance sheet date; income and expenses are translated at the average rates of exchange prevailing during the reporting period. Related translation adjustments are reflected as a separate component of accumulated other comprehensive loss. Foreign currency gains and losses resulting from transactions, and the related hedging activity, are included in the Consolidated Statements of Income.

For the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, the Company recorded ~~negative~~positive foreign currency translation adjustments of ~~$267.7~~$27.4 million that ~~decreased~~increased shareholders' equity, compared with negative foreign currency translation adjustments of ~~$53.3~~$20.0 million that decreased shareholders' equity for the ~~nine~~three months ended ~~September 30, 2021.~~March 31, 2022. The foreign currency translation adjustments for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 were ~~negatively~~favorably impacted by the ~~strengthening~~weakening of the U.S. dollar relative to other foreign currencies, including the Euro, Mexican Peso and Chinese ~~Yuan and Indian Rupee.~~Yuan.

Foreign currency exchange gains and losses, net of hedging activity, resulting from transactions included in the Company's operating results for the three months ended ~~September 30, 2022~~March 31, 2023 totaled ~~$9.1 million of net gains,~~ ~~compared with~~ ~~$3.2~~$3.0 million of net losses, ~~durin~~gcompared with $2.2 million of net gains during the three months ended September 30, 2021. Foreign currency exchange gains and losses, net of hedging activity, resulting from transactions included in the Company's operating results for the nine months ended September 30, 2022 totaled $13.7 million of n~~et gains,~~ ~~compared with~~ ~~$8.8 million of net losses during the nine months ended September 30, 2021.~~March 31, 2022.

Russia Operations:

The Company had two subsidiaries in Russia prior to Russia's invasion of Ukraine in February 2022, including Timken Russia, which was 100% owned by Timken and a 51%-owned joint venture to serve the Russian rail market ("Rail JV"). As a result of Russia's invasion of Ukraine (and associated sanctions), the Company suspended operations and recorded property, plant and equipment impairment charges of $9.0 million and inventory write-downs of $4.1 million during the ~~nine months~~year ended ~~September 30,~~December 31, 2022. During the third quarter of 2022, the Company sold its Timken Russia business resulting in a loss of ~~$2.1~~$2.7 million on the sale. During the first quarter of 2023, the Company recorded additional inventory write-downs of $0.4 million. After giving effect to these impairments and write-downs, as well as the sale of Timken Russia, as of ~~September 30, 2022,~~March 31, 2023, the Company has net assets (net of noncontrolling interest of ~~$7.4~~$5.2 million), totaling ~~$8.1~~$7.2 million on its Consolidated Balance Sheet related to its Rail JV. Net assets include ~~$10.6~~$7.9 million of cash and cash ~~equivalents.~~equivalents that the Company has classified as restricted as the Company is presently unable to repatriate these funds to one of its subsidiaries outside of Russia. The Company will continue to monitor the events in Russia and Ukraine and may record additional asset impairments or write-offs in the future.

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NON-GAAP MEASURES

Supplemental Non-GAAP Measures:

In addition to results reported in accordance with U.S. GAAP, the Company provides information on non-GAAP financial measures. These non-GAAP financial measures include adjusted net income, adjusted earnings per share, adjusted EBITDA and adjusted EBITDA margins, segment adjusted EBITDA and segment adjusted EBITDA margins, ratio of net debt to adjusted EBITDA (for the trailing 12 months), net debt, ratio of net debt to capital and free cash flow. This information is intended to supplement GAAP financial measures and is not intended to replace GAAP financial measures. Net debt and the ratio of net debt to capital is disclosed in the "Liquidity and Capital Resources" section of Management's Discussion and Analysis of Financial Condition and Results of Operations.

Adjusted Net Income and Adjusted EBITDA:

Adjusted net income and adjusted earnings per share represent net income attributable to The Timken Company and diluted earnings per share, respectively, adjusted for intangible amortization, impairment, restructuring and reorganization charges, acquisition costs, including transaction costs and the amortization of the inventory step-up, property losses and recoveries, actuarial gains and losses associated with the remeasurement of the Company's defined benefit pension and other postretirement benefit plans, gains and losses on the sale of real estate, gains and losses on divestitures, the income tax impact of these adjustments, as well as other discrete income tax ~~discrete~~ items, and other items from time to time that are not part of the Company's core operations. Management believes adjusted net income and adjusted earnings per share are useful to investors as they are representative of the Company's core operations and are used in the management of the business.

Adjusted EBITDA represents earnings before interest, taxes, depreciation and amortization, adjusted for items that are not part of the Company's core operations. These items include intangible amortization, impairment, restructuring and reorganization charges, acquisition costs, including transaction costs and the amortization of the inventory step-up, property losses and recoveries, actuarial gains and losses associated with the remeasurement of the Company's defined benefit pension and other postretirement benefit plans, gains and losses on the sale of real estate, gains and losses on divestitures, and other items from time to time that are not part of the Company's core operations. Management believes adjusted EBITDA is useful to investors as it is representative of the Company's core operations and is used in the management of the business, including decisions concerning the allocation of resources and assessment of performance.

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Reconciliation of net income attributable to The Timken Company to adjusted net income, adjusted EBITDA and adjusted EBITDA Margin:


		Three Months Ended September 30,						Nine Months Ended September 30,							Three Months Ended March 31,
		2022			2021			2022			2021					2023			2022
Net Sales	Net Sales	$	1,136.4		$	1,037.3		$	3,414.7		$	3,125.6		Net Sales		$	1,262.8		$	1,124.6
Net Income Attributable to The Timken Company	Net Income Attributable to The Timken Company	87.0			88.1			310.2			306.2			Net Income Attributable to The Timken Company		122.3			118.2
Net Income Attributable to The Timken Company as a Percentage of Sales														Net Income Attributable to The Timken Company as a Percentage of Sales		9.7		%	10.5		%
Adjustments:														Adjustments:
Acquisition intangible amortization														Acquisition intangible amortization		13.5			10.9
Impairment, restructuring and reorganization charges (1)	Impairment, restructuring and reorganization charges (1)	32.1			5.9			35.7			13.3			Impairment, restructuring and reorganization charges (1)		30.0			1.6
Corporate pension and other postretirement benefit related expense (2)		1.0			3.9			15.2			8.3
Corporate pension and other postretirement benefit related (income) expense (2)														Corporate pension and other postretirement benefit related (income) expense (2)		(0.9)			2.6
Russia-related charges (3)	Russia-related charges (3)	2.3			—			15.3			—			Russia-related charges (3)		0.3			4.6
Acquisition-related charges (4)	Acquisition-related charges (4)	3.0			1.5			5.7			2.1			Acquisition-related charges (4)		4.7			1.1

Gain on divestitures and sale of real estate (5)														Gain on divestitures and sale of real estate (5)		(4.8)			—

Noncontrolling interest of above adjustments	Noncontrolling interest of above adjustments	0.1			—			(5.7)			0.2			Noncontrolling interest of above adjustments		(0.2)			(1.3)
Provision for income taxes (5)		(12.9)			(8.4)			(18.2)			(26.3)
Provision for income taxes (6)														Provision for income taxes (6)		(11.4)			(8.0)
Adjusted Net Income	Adjusted Net Income	$	112.6		$	91.0		$	358.2		$	303.8		Adjusted Net Income		$	153.5		$	129.7
Net income attributable to noncontrolling interest	Net income attributable to noncontrolling interest	3.4			3.5			7.7			8.6			Net income attributable to noncontrolling interest		3.4			3.7
Provision for income taxes (as reported)	Provision for income taxes (as reported)	26.7			20.4			108.9			75.1			Provision for income taxes (as reported)		42.5			38.2
Interest expense	Interest expense	19.3			14.8			51.9			45.0			Interest expense		24.1			14.3
Interest income	Interest income	(1.1)			(0.5)			(2.7)			(1.7)			Interest income		(1.5)			(0.6)
Depreciation and amortization expense (6)		39.9			41.0			122.0			125.7
Depreciation and amortization expense (7)														Depreciation and amortization expense (7)		45.4			41.4
Less: Acquisition intangible amortization														Less: Acquisition intangible amortization		13.5			10.9
Less: Noncontrolling interest	Less: Noncontrolling interest	0.1			—			(5.7)			0.2			Less: Noncontrolling interest		(0.2)			(1.3)
Less: Provision for income taxes (5)		(12.9)			(8.4)			(18.2)			(26.3)
Less: Provision for income taxes (6)														Less: Provision for income taxes (6)		(11.4)			(8.0)
Adjusted EBITDA	Adjusted EBITDA	$	213.6		$	178.6		$	669.9		$	582.6		Adjusted EBITDA		$	265.5		$	225.1
Adjusted EBITDA Margin (% of net sales)	Adjusted EBITDA Margin (% of net sales)	18.8		%	17.2		%	19.6		%	18.6		%	Adjusted EBITDA Margin (% of net sales)		21.0		%	20.0		%

Diluted earnings and adjusted earnings per share in the table below are based on net income attributable to The Timken Company and adjusted net income, respectively, in the table above.


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021				2023		2022
Diluted earnings per share (EPS)	Diluted earnings per share (EPS)	$	1.18	$	1.14	$	4.16	$	3.97	Diluted earnings per share (EPS)		$	1.67	$	1.56
Adjusted EPS	Adjusted EPS	$	1.52	$	1.18	$	4.80	$	3.94	Adjusted EPS		$	2.09	$	1.72
Diluted Shares	Diluted Shares	73,866,743		77,023,973		74,548,711		77,157,614		Diluted Shares		73,360,854		75,545,665

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Reconciliation of segment EBITDA to segment adjusted EBITDA and segment adjusted EBITDA margin:

Three Months Ended September 30, 2022
Mobile Process Unallocated Corporate Total
Net Sales $ 526.9 $ 609.5 $ — $ 1,136.4
EBITDA 20.0 165.3 (10.1) 175.2
Impairment, restructuring and reorganization
charges (1)
31.0 1.1 — 32.1
Corporate pension and other postretirement benefit
related expense (2)
— — 1.0 1.0
Russia-related charges (3)
4.1 (1.8) — 2.3
Acquisition-related charges (4)
— 2.1 0.9 3.0
Adjusted EBITDA $ 55.1 $ 166.7 $ (8.2) $ 213.6
Adjusted EBITDA Margin (% of net sales) 10.5 % 27.4 % NM 18.8 %

~~Table of Contents~~


		Three Months Ended September 30, 2021												Three Months Ended March 31, 2023
		Mobile			Process			Unallocated Corporate		Total				Engineered Bearings			Industrial Motion			Unallocated Corporate		Total
Net Sales	Net Sales	$	487.3		$	550.0		$	—	$	1,037.3		Net Sales	$	900.7		$	362.1		$	—	$	1,262.8
EBITDA	EBITDA	53.2			129.7			(15.3)		167.6			EBITDA	205.0			48.2			(16.8)		236.4
Impairment, restructuring and reorganization charges (1)	Impairment, restructuring and reorganization charges (1)	4.8			0.8			—		5.6			Impairment, restructuring and reorganization charges (1)	1.1			28.7			—		29.8
Corporate pension and other postretirement benefit related expense (2)		—						3.9
Acquisition-related charges (3)		0.2						1.1		1.5
Corporate pension and other postretirement benefit related income (2)													Corporate pension and other postretirement benefit related income (2)	—			—			(0.9)		(0.9)
Russia-related charges (3)													Russia-related charges (3)	0.3						—		0.3
Acquisition-related charges (4)													Acquisition-related charges (4)	2.2			—			2.5		4.7

Gain on divestitures and sale of real estate (5)													Gain on divestitures and sale of real estate (5)	(4.8)			—			—		(4.8)
Adjusted EBITDA	Adjusted EBITDA	$	58.2		$	130.7		$	(10.3)	$	178.6		Adjusted EBITDA	$	203.8		$	76.9		$	(15.2)	$	265.5
Adjusted EBITDA Margin (% of net sales)	Adjusted EBITDA Margin (% of net sales)	11.9		%	23.7		%	NM		17.2		%	Adjusted EBITDA Margin (% of net sales)	22.6		%	21.2		%	NM		21.0		%

Nine Months Ended September 30, 2022
Mobile Process Unallocated Corporate Total
Net Sales $ 1,610.9 $ 1,803.8 $ — $ 3,414.7
EBITDA 164.2 484.4 (50.6) 598.0
Impairment, restructuring and reorganization
charges (1)
33.0 2.7 — 35.7
Corporate pension and other postretirement benefit
related expense (2)
— — 15.2 15.2
Russia-related charges (3)
16.6 (1.3) — 15.3
Acquisition-related charges (4)
— 3.5 2.2 5.7
Adjusted EBITDA $ 213.8 $ 489.3 $ (33.2) $ 669.9
Adjusted EBITDA Margin (% of net sales) 13.3 % 27.1 % NM 19.6 %


		Nine Months Ended September 30, 2021												Three Months Ended March 31, 2022
		Mobile			Process			Unallocated Corporate		Total				Engineered Bearings			Industrial Motion			Unallocated Corporate		Total
Net Sales	Net Sales	$	1,486.0		$	1,639.6		$	—	$	3,125.6		Net Sales	$	772.4		$	352.2		$	—	$	1,124.6
EBITDA	EBITDA	200.1			401.9			(42.3)		559.7			EBITDA	168.3			62.4			(15.5)		215.2
Impairment, restructuring and reorganization charges (1)	Impairment, restructuring and reorganization charges (1)	6.3			6.2			—		12.5			Impairment, restructuring and reorganization charges (1)	1.0			0.6			—		1.6
Corporate pension and other postretirement benefit related expense (2)	Corporate pension and other postretirement benefit related expense (2)	—						8.3					Corporate pension and other postretirement benefit related expense (2)	—			—			2.6		2.6
Acquisition-related charges (3)		0.6			0.5			1.0		2.1
Russia-related charges (3)													Russia-related charges (3)	4.6			—			—		4.6
Acquisition-related charges (4)													Acquisition-related charges (4)	—			0.4			0.7		1.1
Adjusted EBITDA	Adjusted EBITDA	$	207.0		$	408.6		$	(33.0)	$	582.6		Adjusted EBITDA	$	173.9		$	63.4		$	(12.2)	$	225.1
Adjusted EBITDA Margin (% of net sales)	Adjusted EBITDA Margin (% of net sales)	13.9		%	24.9		%	NM		18.6		%	Adjusted EBITDA Margin (% of net sales)	22.5		%	18.0		%	NM		20.0		%

(1) Impairment, restructuring and reorganization charges (including items recorded in cost of products sold) relate to: (i) plant closures; (ii) the rationalization of certain plants; (iii) severance related to cost reduction initiatives; and (iv) impairment of ~~assets held for sale.~~assets. Impairment, restructuring and reorganization charges for ~~the third quarter of 2022~~2023 included ~~$29.3~~$28.3 million related to ~~ADS.~~the impairment of goodwill. The Company re-assesses its operating footprint and cost structure periodically, and makes adjustments as needed that result in restructuring charges. However, management believes these actions are not representative of the Company’s core ~~operations.~~ operations.

(2) Corporate pension and other postretirement benefit related (income) expense represents actuarial (gains) and losses ~~(gains)~~ that resulted from the remeasurement of plan assets and obligations as a result of changes in assumptions or experience. The Company recognizes actuarial ~~losses~~(gains) and ~~(gains)~~losses in connection with the annual remeasurement in the fourth quarter, or if specific events trigger a remeasurement. Refer to Note 1516 - Retirement Benefit Plans and Note 1617 - Other Postretirement Benefit Plans for additional discussion.

(3) Russia-related charges include impairments and allowances recorded against certain property, plant and equipment, inventory and trade receivables to reflect the current impact of Russia's invasion of Ukraine (and associated sanctions) on the Company's operations. In addition to impairments and allowances recorded, the Company recorded a loss on the divestiture of its Timken Russia business during the ~~third~~fourth quarter of 2022. Refer to Russia Operations on page 4034 above for additional information.

(4) Acquisition-related charges represent ~~the contingent consideration related to the acquisition of iMS that closed on August 20, 2021, and~~ deal-related expenses associated with completed ~~and certain unsuccessful~~ transactions ~~as well as~~and any resulting inventory step-up impact. ~~In addition, the 2021 acquisition-related charges includes measurement period adjustments to the bargain purchase gain on the acquisition of the assets of Aurora that closed on November 30, 2020.~~

(5) Represents the net gain resulting from divestitures and the sale of real estate.

~~Table of Contents~~

~~(5)~~(6) Provision for income taxes includes the net tax impact on pre-tax adjustments (listed above), the impact of discrete tax items recorded during the respective periods as well as other adjustments to reflect the use of one overall effective tax rate on adjusted pre-tax income in interim periods.

~~(6)~~(7) Depreciation and amortization shown excludes depreciation recognized in reorganization charges, if any.

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Free Cash Flow:

Free cash flow represents net cash provided by (used in) operating activities less capital expenditures. Management believes free cash flow is useful to investors because it is a meaningful indicator of cash generated from operating activities available for the execution of its business strategy.

Reconciliation of net cash provided by operating activities to free cash flow:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021				2023		2022
Net cash provided by operating activities		$	145.2	$	105.8	$	222.3	$	284.6
Net cash provided by (used in) operating activities										Net cash provided by (used in) operating activities		$	78.6	$	(1.2)
Capital expenditures	Capital expenditures	(47.3)		(43.1)		(122.5)		(103.6)		Capital expenditures		(41.7)		(34.3)
Free cash flow	Free cash flow	$	97.9	$	62.7	$	99.8	$	181.0	Free cash flow		$	36.9	$	(35.5)

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Ratio of Net Debt to Adjusted EBITDA:

The ratio of net debt to adjusted EBITDA for the trailing twelve months represents total debt less cash and cash equivalents divided by adjusted EBITDA for the trailing twelve months. The Company presents net debt to adjusted EBITDA because it believes it is more representative of the Company's financial position as it is reflective of the Company's ability to cover its net debt obligations with results from its core operations. Net income for the trailing twelve months ended ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 was ~~$384.6~~$420.8 million and ~~$381.5~~$417.0 million, respectively. Net debt to adjusted EBITDA for the trailing twelve months was ~~1.8~~1.9 at ~~September 30, 2022, compared with 1.7 at~~March 31, 2023 and December 31, ~~2021.~~2022.

Reconciliation of Net income to Adjusted EBITDA for the trailing twelve months:


		Twelve Months Ended					Twelve Months Ended
		September 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
Net income	Net income	$	384.6	$	381.5	Net income	$	420.8	$	417.0
Provision for income taxes	Provision for income taxes	128.9		95.1		Provision for income taxes	138.2		133.9
Interest expense	Interest expense	65.7		58.8		Interest expense	84.4		74.6
Interest income	Interest income	(3.3)		(2.3)		Interest income	(4.7)		(3.8)
Depreciation and amortization	Depreciation and amortization	163.3		167.8		Depreciation and amortization	168.2		164.0
Consolidated EBITDA	Consolidated EBITDA	739.2		700.9		Consolidated EBITDA	806.9		785.7
Adjustments:	Adjustments:					Adjustments:
Impairment, restructuring and reorganization charges (1)	Impairment, restructuring and reorganization charges (1)	$	37.5	$	14.3	Impairment, restructuring and reorganization charges (1)	$	67.7	$	39.5
Corporate pension and other postretirement benefit related expense (2)		7.2		0.3
Corporate pension and other postretirement benefit related (income) expense (2)						Corporate pension and other postretirement benefit related (income) expense (2)	(0.6)		2.9
Acquisition-related charges (3)	Acquisition-related charges (3)	5.9		2.3		Acquisition-related charges (3)	18.4		14.8

Gain on divestitures and sale of real estate (4)						Gain on divestitures and sale of real estate (4)	(7.7)		(2.9)

Russia-related charges ~~(4)~~(5)	Russia-related charges ~~(4)~~(5)	15.3		—		Russia-related charges ~~(4)~~(5)	11.3		15.6
Tax indemnification and related items	Tax indemnification and related items	0.2		0.2		Tax indemnification and related items	0.3		0.3
Total adjustments	Total adjustments	66.1		17.1		Total adjustments	89.4		70.2
Adjusted EBITDA	Adjusted EBITDA	$	805.3	$	718.0	Adjusted EBITDA	$	896.3	$	855.9
Net Debt	Net Debt	$	1,482.2	$	1,207.8	Net Debt	$	1,696.9	$	1,631.6
Ratio of Net Debt to Adjusted EBITDA	Ratio of Net Debt to Adjusted EBITDA	1.8		1.7		Ratio of Net Debt to Adjusted EBITDA	1.9		1.9

(1) Impairment, restructuring and reorganization charges (including items recorded in cost of products sold) relate to: (i) plant closures; (ii) the rationalization of certain plants; (iii) severance related to cost reduction initiatives; and (iv) impairment of ~~assets held for sale.~~assets. Impairment, restructuring and reorganization charges for the twelve months ended ~~September 30,~~December 31, 2022 and March 31, 2023 included $29.3 million related to the sale of ADS. In addition, impairment, restructuring and reorganization charges for the twelve months ended March 31, 2023 included $28.3 million related to the impairment of goodwill. The Company re-assesses its operating footprint and cost structure periodically, and makes adjustments as needed that result in restructuring charges. However, management believes these actions are not representative of the Company’s core operations.

(2) Corporate pension and other postretirement benefit related (income) expense represents actuarial ~~losses~~(gains) and ~~(gains)~~losses that resulted from the remeasurement of plan assets and obligations as a result of changes in assumptions or experience. The Company recognizes actuarial ~~losses~~(gains) and ~~(gains)~~losses in connection with the annual remeasurement in the fourth quarter, or if specific events trigger a remeasurement.

(3) Acquisition-related charges represent ~~contingent consideration related to the acquisition of iMS that closed on August 20, 2021, and~~ deal-related expenses associated with completed ~~and certain unsuccessful~~ transactions ~~as well as~~and any resulting inventory step-up impact. ~~Also included is the acquisition-related gain related to measurement period adjustments to the bargain purchase gain on the acquisition of the assets of Aurora that closed on November 30, 2020.~~

(4) Represents the net gain resulting from divestitures and the sale of real estate.

(5) Russia-related charges include allowances and impairments recorded against certain trade receivables, inventory and other assets to reflect the current impact of Russia's invasion of Ukraine (and associated sanctions) on the Company's operations. In addition to impairments and allowances recorded, the Company recorded a loss on the divestiture of its Timken Russia business during the ~~third~~fourth quarter of 2022. Refer to Russia Operations on page 4034 in Management Discussion and Analysis for additional information.

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FORWARD-LOOKING STATEMENTS

Certain statements set forth in this Form 10-Q and in the Company's Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022 that are not historical in nature (including the Company's forecasts, beliefs and expectations) are “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. In particular, Management's Discussion and Analysis contains numerous forward-looking statements. Forward-looking statements generally will be accompanied by words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “outlook,” “intend,” “may,” “possible,” “potential,” “predict,” “project” or other similar words, phrases or expressions. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this Form 10-Q. The Company cautions readers that actual results may differ materially from those expressed or implied in forward-looking statements made by or on behalf of the Company due to a variety of factors, such as:

•deterioration in world economic conditions, or in economic conditions in any of the geographic regions in which the Company or its customers or suppliers conduct business, including adverse effects from a global economic slowdown or recession, terrorism, or hostilities. This includes: political risks associated with the potential instability of governments and legal systems in countries in which the Company or its customers or suppliers conduct business, changes in currency valuations and recent world events that have increased the risks posed by international trade disputes, tariffs and sanctions;

•negative impacts to the Company's business, results of operations, financial position or liquidity, disruption to the Company's supply chains, negative impacts to customer demand or operations, and availability and health of employees, as a result of COVID-19 or other pandemics and associated governmental measures such as restrictions on travel and manufacturing operations;

•the effects of fluctuations in customer demand on sales, product mix and prices in the industries in which the Company operates. This includes: the ability of the Company to respond to rapid changes in customer demand, disruptions to the Company's supply chain, logistical issues associated with port closures or congestion, delays or increased costs, the effects of customer or supplier bankruptcies or liquidations, the impact of changes in industrial business cycles, the effects of distributor inventory corrections reflecting de-stocking of the supply chain and whether conditions of fair trade continue in the Company's markets;

•competitive factors, including changes in market penetration, increasing price competition by existing or new foreign and domestic competitors, the introduction of new products or services by existing and new competitors, competition for skilled labor and new technology that may impact the way the Company’s products are produced, sold or distributed;

•changes in operating costs. This includes: the effect of changes in the Company’s manufacturing processes; changes in costs associated with varying levels of operations and manufacturing capacity; availability and cost of raw materials and energy; disruptions to the Company's supply chain and logistical issues associated with port closures or congestion, delays or increased costs; changes in the expected costs associated with product warranty claims; changes resulting from inventory management and cost reduction initiatives; the effects of unplanned plant shutdowns; the effects of government-imposed restrictions, ~~and~~ commercial requirements ~~meant to address~~and Company goals associated with climate ~~change;~~change and emissions or other waste reduction initiatives; and changes in the cost of labor and benefits;

•the impact of inflation on employee expenses, shipping costs, raw material costs, energy and fuel costs and other production costs;

•the success of the Company’s operating plans, announced programs, initiatives and capital investments; the ability to integrate acquired companies and to address material issues both identified and not uncovered during the Company's due diligence review; and the ability of acquired companies to achieve satisfactory operating results, including results being accretive to earnings, realization of synergies and expected cash flow generation;

•the Company’s ability to maintain appropriate relations with unions or works councils that represent Company associates in certain locations in order to avoid disruptions of ~~business and to maintain~~business; the continued ~~service~~attraction, retention and development of ~~our~~ management and other key ~~employees;~~employees, the successful development and execution of succession plans and management of other human capital matters;

•unanticipated litigation, claims, investigations or assessments. This includes: claims, investigations or problems related to intellectual property, product liability or warranty, foreign export and trade laws, government procurement regulations, competition and anti-bribery laws, climate change, environmental or health and safety issues, data privacy and taxes;

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•changes in worldwide financial and capital markets ~~including~~impacting the availability of financing ~~and interest rates~~ on satisfactory terms, inas a result of financial stress affecting the banking system or otherwise, and the rising interest rate environment, which affect the Company’s cost of funds and/or ability to raise capital, as well as customer demand and the ability of customers to obtain financing to purchase the Company’s products or equipment that contain the Company’s products;

•the Company's ability to satisfy its obligations and comply with covenants under its debt agreements, maintain favorable credit ratings and its ability to renew or refinance borrowings on favorable terms;

•the impact on the Company's pension obligations and assets due to changes in interest rates, investment performance and other tactics designed to reduce risk; and

•those items identified under Item 1A. "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022 or this Form 10-Q.

Additional risks relating to the Company's business, the industries in which the Company operates, or the Company's common shares may be described from time to time in the Company's filings with the Securities and Exchange Commission. All of these risk factors are difficult to predict, are subject to material uncertainties that may affect actual results and may be beyond the Company's control.

Readers are cautioned that it is not possible to predict or identify all of the risks, uncertainties and other factors that may affect future results and that the above list should not be considered to be a complete list. Except as required by the federal securities laws, the Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Refer to information appearing under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Form 10-Q. Furthermore, a discussion of market risk exposures is included in Part II, Item 7A. Quantitative and Qualitative Disclosure about Market Risk, of the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022. There have been no material changes in reported market risk since the inclusion of this discussion in the Company’s Annual Report on Form 10-K referenced above.

ITEM 4. CONTROLS AND PROCEDURES

(a)Disclosure Controls and Procedures

As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s principal executive officer and principal financial officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)). Based upon that evaluation, the principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report.

(b)Changes in Internal Control Over Financial Reporting

During the Company’s fiscal quarter ended ~~September 30, 2022,~~March 31, 2023, there have been no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

On ~~May~~January 31, ~~2022,~~2023, the Company completed the acquisition of ~~Spinea.~~ARB. The results of this acquisition are included in the Company's consolidated financial statements for the first ~~nine~~three months of ~~2022.~~2023. The total and net assets of ~~Spinea represent 3%~~ARB represented less than 1% of the Company's total assets and ~~6% of the Company's~~ net assets as of ~~September 30, 2022.~~March 31, 2023. The net sales ~~and net income~~ of ~~Spinea~~ARB represented less than 1% of the Company's consolidated net sales ~~and consolidated net income~~ for the first ~~nine~~three months of ~~2022.~~ 2023

The scope of the Company's assessment of the effectiveness of internal control over financial reporting will not include ~~this acquisition.~~the ARB acquisition noted above. This exclusion is in accordance with the SEC's general guidance that an assessment of a recently acquired business may be omitted from the Company's scope in the year of acquisition.

On November 4, 2022, the Company completed the acquisition of GGB. The results of this acquisition are included in the Company's consolidated financial statements for the first three months of 2023. The total and net assets of GGB represented 7% of the Company's total assets and 14% of the Company's net assets as of March 31, 2023. The net sales of GGB represented 4% of the Company's consolidated net sales for the first three months of 2023.

On May 31, 2022, the Company completed the acquisition of Spinea. The results of this acquisition are included in the Company's consolidated financial statements for the first three months of 2023. The total and net assets of Spinea represented 3% of the Company's total assets and 6% of the Company's net assets as of March 31, 2023. The net sales of Spinea represented less than 1% of the Company's consolidated net sales for the first three months of 2023.

The Company is currently integrating these acquisitions into its internal control framework and processes, and as prescribed by U.S Securities and Exchange Commission rules and regulations, the Company will include Spinea and GGB in the internal control over financial reporting assessment as of December 31, 2023.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The Company is involved in various claims and legal actions arising in the ordinary course of business. U.S. Securities and Exchange Commission ("SEC") regulations require us to disclose certain information about environmental proceedings when a governmental authority is a party to the proceedings if we reasonably believe that such proceedings may result in monetary sanctions above a stated threshold. Pursuant to such regulations, the Company uses the maximum permitted threshold of $1 million or more for purposes of determining whether disclosure of any such proceedings is required. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company’s consolidated financial position or results of operations.

Item 1A. Risk Factors

The Company's Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021,~~2022, included a detailed discussion of our risk factors. There have been no material changes to the risk factors included in the Company's Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022. Investors should not interpret the disclosure of any risk factor to imply that the risk has not already materialized.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Issuer Purchases of Common Shares

The following table provides information about purchases by the Company of its common shares during the quarter ended ~~September 30, 2022.~~March 31, 2023.

Period
Total number
of shares
purchased (1)
Average
price paid
per share (2)
Total number
of shares
purchased as
part of publicly
announced
plans or
programs
Maximum
number of
shares that
may yet
be purchased
under the plans
or programs (3)
7/1/2022 - 7/31/2022 — $ — — 6,800,000
8/1/2022 - 8/31/2022 430,147 66.03 420,000 6,380,000
9/1/2022 - 9/30/2022 330,000 64.47 330,000 6,050,000
Total 760,147 750,000 —


Period	Total number of shares purchased (1)	Average price paid per share (2)		Total number of shares purchased as part of publicly announced plans or programs	Maximum number of shares that may yet be purchased under the plans or programs (3)
1/1/2023 - 1/31/2023	202,205	$	74.58	200,000	5,600,000
2/1/2023 - 2/28/2023	340,256	84.77		190,000	5,410,000
3/1/2023 - 3/31/2023	291,102	81.54		281,010	5,128,990
Total	833,563	$	81.17	671,010	—

(1)Of the shares purchased in ~~August,~~January, February and March, 2,205, ~~10,147~~150,256 and 10,092, respectively, represent common shares of the Company that were owned and tendered by employees to exercise stock options and to satisfy withholding obligations in connection with the exercise of stock options or vesting of restricted shares.

(2)For shares tendered in connection with the vesting of restricted shares, the average price paid per share is an average calculated using the daily high and low of the Company's common shares as quoted on the New York Stock Exchange at the time of vesting. For shares tendered in connection with the exercise of stock options, the price paid is the real-time trading stock price at the time the options are exercised.

(3)On February 12, 2021, the Company's Board of Directors approved a new share purchase plan, effective March 1, 2021, pursuant to which the Company may purchase up to ten million of its common shares, in the aggregate. This share purchase plan expires on February 28, 2026. Under this plan, the Company may purchase shares from time to time in open market purchases or privately negotiated transactions, and it may make all or part of the purchases pursuant to accelerated share repurchases or Rule 10b5-1 plans.

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Item 6. Exhibits










































































~~10.1~~			~~The Timken Company 1996 Deferred Compensation Plan for officers and other key employees, amended and restated effective as of August 2, 2022.~~

31.1			Certification of Richard G. Kyle, President and Chief Executive Officer (principal executive officer) of The Timken Company, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2			Certification of Philip D. Fracassa, Executive Vice President and Chief Financial Officer (principal financial officer and principal accounting officer) of The Timken Company, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32			Certifications of Richard G. Kyle, President and Chief Executive Officer (principal executive officer) and Philip D. Fracassa, Executive Vice President and Chief Financial Officer (principal financial officer and principal accounting officer) of The Timken Company, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101			Financial statements from the quarterly report on Form 10-Q of The Timken Company for the quarter ended ~~September 30, 2022~~March 31, 2023 filed on ~~October 26, 2022,~~May 3, 2023, formatted in Inline XBRL: (i) the Consolidated Statements of Income, (ii) the Consolidated Statements of Comprehensive Income, (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Cash Flows and (v) the Notes to the Consolidated Financial Statements.

104			Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


						THE TIMKEN COMPANY

Date: ~~October 26, 2022~~May 3, 2023						By: /s/ Richard G. Kyle
						Richard G. Kyle President and Chief Executive Officer (Principal Executive Officer)

Date: ~~October 26, 2022~~May 3, 2023						By: /s/ Philip D. Fracassa
						Philip D. Fracassa Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

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	Nine Months Ended						Nine Months Ended
	September 30, 2022						September 30, 2021
	Mobile		Process		Total		Mobile		Process		Total
United States	$	808.8	$	695.2	$	1,504.0	$	715.6	$	582.0	$	1,297.6
Americas excluding the United States	181.0		184.8		365.8		156.0		139.7		295.7
Europe / Middle East / Africa	352.7		402.1		754.8		369.6		401.9		771.5
China	92.3		373.9		466.2		94.3		388.6		482.9
Asia-Pacific excluding China	176.1		147.8		323.9		150.5		127.4		277.9
Net sales	$	1,610.9	$	1,803.8	$	3,414.7	$	1,486.0	$	1,639.6	$	3,125.6


	Three Months Ended September 30, 2022
	Mobile			Process			Unallocated Corporate		Total
Net Sales	$	526.9		$	609.5		$	—	$	1,136.4
EBITDA	20.0			165.3			(10.1)		175.2
Impairment, restructuring and reorganization charges (1)	31.0			1.1			—		32.1
Corporate pension and other postretirement benefit related expense (2)	—			—			1.0		1.0
Russia-related charges (3)	4.1			(1.8)			—		2.3
Acquisition-related charges (4)	—			2.1			0.9		3.0

Adjusted EBITDA	$	55.1		$	166.7		$	(8.2)	$	213.6
Adjusted EBITDA Margin (% of net sales)	10.5		%	27.4		%	NM		18.8		%


	Nine Months Ended September 30, 2022
	Mobile			Process			Unallocated Corporate		Total
Net Sales	$	1,610.9		$	1,803.8		$	—	$	3,414.7
EBITDA	164.2			484.4			(50.6)		598.0
Impairment, restructuring and reorganization charges (1)	33.0			2.7			—		35.7
Corporate pension and other postretirement benefit related expense (2)	—			—			15.2		15.2
Russia-related charges (3)	16.6			(1.3)			—		15.3
Acquisition-related charges (4)	—			3.5			2.2		5.7
Adjusted EBITDA	$	213.8		$	489.3		$	(33.2)	$	669.9
Adjusted EBITDA Margin (% of net sales)	13.3		%	27.1		%	NM		19.6		%