What changed in this filing

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Item 1. Business

2023-02-16 compared with 2022-02-15 · 46 added, 45 removed, 183 unchanged (33% of the section changed)

As used herein, the term “Timken” or the “Company” refers to The Timken Company and its subsidiaries unless the context otherwise requires.

Timken designs and manages a portfolio of engineered bearings and power transmission products and related services.

The Company’s growing portfolio features many strong brands, including Timken®, Philadelphia Gear®, Drives®, Cone Drive®, Rollon®, Lovejoy®, Diamond®, BEKA® and Groeneveld®.

Timken designs and manages a portfolio of engineered bearings and industrial motion products, and provides related services.

The Company’s growing portfolio features many strong brands, including Timken®, Philadelphia Gear®, GGB®, Drives®, Cone Drive®, Rollon®, Lovejoy®, Diamond®, BEKA®, Groeneveld® and Spinea®.

The Company was founded in 1899 by Henry Timken, who received two patents on the design of a tapered roller bearing.

Timken remains the world's leading authority in tapered roller bearings, and has leveraged that expertise to develop a full portfolio of industry-leading engineered bearings and power transmission products.

Timken built its reputation as a global leader by applying its knowledge of metallurgy, friction management and power transmission to increase the reliability and efficiency of its customers' equipment across a diverse range of industries.

Timken remains the world's leading authority in tapered roller bearings and has leveraged that expertise to develop a full portfolio of industry-leading engineered bearings and industrial motion products.

Timken built its reputation as a global leader by applying its knowledge of metallurgy, friction management and industrial motion to increase the reliability and efficiency of its customers' equipment across a diverse range of industries.

Today, the Company's global footprint consists of 126 manufacturing facilities/service centers, 28 technology and engineering centers, and 70 distribution centers and warehouses, supported by a team comprised of more than 19,000 employees.

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The Company sells products and services to a diverse customer base globally, including customers in the following market sectors:

industrial distribution, automotive, aerospace, rail, renewable energy, agriculture/turf, on-highway aftermarket, mining, construction, heavy truck, metals, fossil fuels and marine.

industrial distribution, renewable energy, automation, automotive original equipment ("OE"), agriculture/turf, rail, aerospace, auto/truck aftermarket, construction, services, metals and mining, heavy truck (OE), and marine.

No single customer accounts for 5% or more of total net sales.

Timken manufactures and manages global supply chains for multiple product lines including engineered bearings and power transmission products designed to operate in demanding environments.

Timken manufactures and manages global supply chains for multiple product lines including engineered bearings and industrial motion products designed to operate in demanding environments.

The Company leverages its technical knowledge, research expertise, and production and engineering capabilities across all of its products and end markets to deliver high-performance products and services to its customers.

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The Timken® bearing portfolio features a broad range of engineered bearing products, including tapered, spherical and cylindrical roller bearings;

spherical plain bearings and rod end bearings;

plain bearings and rod end bearings;

thrust and specialty ball bearings;

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Timken also produces spherical and cylindrical roller bearings that are used in gear drives, rolling mills and other industrial and infrastructure development applications.

These products are sold worldwide to original equipment manufacturers ("OEMs") and industrial distributors serving major end-market sectors, including construction and mining, natural resources, wind energy, defense, pulp and paper production, rolling mills and general industrial goods.

These products are sold worldwide to OE manufacturers ("OEMs") and industrial distributors serving major end-market sectors, including construction and mining, natural resources, wind energy, defense, pulp and paper production, rolling mills and general industrial goods.

Ball Bearings.

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Plain Bearings.

Timken produces a range of plain bearings including rod-ends, spherical plain bearings and journal bearings.

These friction-type bearings are used to support misalignment and oscillating movements in a variety of applications and end-markets including aircraft controls, packaging equipment, off-highway equipment, heavy truck, performance auto racing, robotics and many more.

Power Transmission Products:

Timken produces a range of plain bearings including rod-ends, spherical plain bearings, metal-polymer bearings and journal bearings.

These bearings are used to support misalignment and oscillating movements in a variety of applications and end-markets including aircraft controls, packaging equipment, off-highway equipment, heavy truck, performance auto racing, robotics and many more.

Various combinations of material pairs and engineered coatings improve friction management for application specific conditions.

Industrial Motion Products:

Linear Motion Products.

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Cone Drive products can be found in a variety of industrial end-market sectors, including solar, oil and gas, aerial platforms, automation and food and beverage.

The Company's Spinea® line features highly engineered cycloidal reduction gears and actuators.

Spinea's solutions primarily serve high precision automation and robotics applications in the factory automation sector.

Lubrication Systems.

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They are also used in the food and beverage and packaged goods sectors, which often require high-end, specialty products, including stainless-steel and corrosion-resistant roller chain.

The Company offers a full range of industrial couplings within its power transmission products portfolio.

The Company offers a full range of industrial couplings within its industrial motion products portfolio.

The Lovejoy brand is widely known for its flexible coupling design and as the creator of the jaw-style coupling.

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The Company also offers an extensive line of torsional couplings offered under the Torsion Control Products brand.

Aerospace Drive Systems .

The Company's portfolio of parts, systems and services for the aerospace market sector includes products used in helicopters for military and commercial use.

Timken designs, manufactures and tests a wide variety of power transmission and drive train components, including transmissions, gears and rotor-head assemblies and housings.

In addition to original equipment, Timken provides aftermarket overhaul and repair services for transmissions, gearboxes and other components.

Industrial Clutches and Brakes.

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Other Products.

The Company also offers a full line of seals, augers and other power transmission components.

The Company also offers a full line of seals, augers and other industrial motion components.

Timken industrial sealing solutions come in a variety of types and material options that are used in manufacturing, food processing, mining, power generation, chemical processing, primary metals, pulp and paper, and oil and gas industry applications.

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Power Systems.

Timken services components in the industrial customer's drive train, including switch gears, electric motors and generators, gearboxes, bearings, couplings and central panels.

Timken services components in the industrial customer's drive train, including switch gears, electric motors and generators, gearboxes, bearings, couplings and control panels.

The Company’s Philadelphia Gear services for gear drive applications include onsite technical services;

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Therefore, Timken goes where our customers need us, with sales engineers primarily working in close proximity to customers rather than at production sites.

The Company's sales force continuously updates the team's training and knowledge regarding all friction management products and market sector trends, and Timken employees assist customers during development and implementation phases and provide ongoing service and support.

The Company's sales force continuously updates the team's training and knowledge regarding engineered bearings and industrial motion products and related market sector trends, and they assist customers during product development and implementation phases and provide ongoing service and support.

The Company has a joint venture in North America focused on joint logistics and e-business services.

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Timken does not believe that there is any significant loss of earnings risk associated with any given contract.

The bearing industry and the industries into which Timken sells its power transmission products are highly competitive.

The bearing industry and the industries into which Timken sells its industrial motion products are highly competitive.

Timken primarily competes based on total value, including price, quality, timeliness of delivery, product design and the ability to provide engineering support and service on a global basis.

The Company competes with many domestic and foreign manufacturers of anti-friction bearings, including SKF Group, Schaeffler Group, NTN Corporation, JTEKT Corporation and NSK Ltd., and with a diverse group of domestic and foreign manufacturers of power transmission products.

Joint Ventures:

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Accordingly, Timken does not believe that its backlog data and comparisons thereof, as of different dates, reliably indicate future sales or shipments.

Raw Materials:

Sources and Availability of Raw Materials:

The principal raw materials used by the Company to make engineered bearings are special bar quality ("SBQ") steel and steel components.

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Overall, the Company believes that the number of suppliers of SBQ steel is adequate to support the needs of global bearing production, and, in general, the Company is not dependent on any single source of supply.

The Company also purchases a variety of materials and components to produce industrial motion products, such as non-SBQ steel, synthetic rubber, fabrics, castings and plastics.

The Company sources these components from various suppliers in the world market.

The Company believes its supply base is adequate to support its manufacturing requirements.

Timken operates a network of technology and engineering centers to support its global customers with sites in North America, Europe and Asia.

This network develops and delivers innovative friction management and power transmission solutions and technical services.

This network develops and delivers innovative engineered bearings and industrial motion solutions and technical services.

Timken's largest technical center is located at the Company's world headquarters in North Canton, Ohio.

Other smaller sites in the United States ("U.S.") include Los Alamitos, California;

Manchester, Connecticut;

Downer's Grove, Fulton and Montgomery, Illinois;

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Keene and Lebanon, New Hampshire;

Thorofare, New Jersey;

and King of Prussia, Pennsylvania.

Within Europe, the Company has technology facilities in Plymouth, England;

Colmar, France;

Pegnitz and Werdohl, Germany;

Annecy and Colmar, France;

Heilbronn, Pegnitz and Werdohl, Germany;

Valmadrera, Italy;

Gorinchem, Netherlands;

Porto, Portugal;

and Ploiesti, Romania.

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Other Regulations

Because of its global operations, the Company is subject to a wide variety of domestic and foreign laws and regulations, including securities laws, tax laws, employment and pension-related laws, competition laws, U.S.

Because of its global operations, the Company is subject to a wide variety of domestic and foreign laws and regulations, including securities laws, tax laws, data privacy, employment and pension-related laws, competition laws, U.S.

and foreign export and trade laws, the Foreign Corrupt Practices Act ("FCPA") and similar worldwide anti-bribery laws, government procurement regulations and laws governing improper business practices.

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Human Capital:

The Company believes that its associates and their collective knowledge are its most valuable resource.

As a result, the Company is committed to providing a safe and healthy work environment, attracting, motivating and retaining the best talent in the industry and providing opportunities for its associates to learn and advance their career with the Company.

The Company believes that its associates and their collective knowledge and experience are its most valuable resource.

As a result, the Company is committed to providing a safe work environment, attracting, motivating and retaining the best talent in the industry and providing opportunities for its associates to learn and advance their career with the Company.

Associate Health and Safety

In 2021, the Coronavirus ("COVID-19") pandemic continued to present unique challenges with respect to protecting associate health and safety globally.

Associate health and safety continues to be a top priority for the Company and its commitment to safety starts at the top of the organization.

Associate health and safety remains a top priority for the Company and its commitment to safety starts at the top of the organization.

Chief Executive Officer, Richard Kyle, was the first-ever chair of the Company's Environmental Health and Safety Steering Committee, which was created in 2009 and continues to drive accountability and responsibility for safety throughout the organization .

The Company's commitment to the health and safety of its associates is evidenced by its strong safety results in 2021 and 2022 shown in the charts below:

*Rates calculated as (number of injuries and illnesses x 200,000) / employee hours worked.

2021 rates represent the Company's best estimate at the date of this report

- - - represents the 2020 average (mean) for U.S.

metal manufacturers (North American Industry Classification System ("NAICS") code 332) that employ at least 1,000 employees, based on information provided by the U.S.

Bureau of Labor Statistics at https://www.bls.gov/iif/.

*Rates calculated as (number of injuries and illnesses x 200,000) / employee hours worked per 100 full-time workers.

2022 rates represent the Company's best estimate as of the date of this report

The Company aims to maintain a recordable rate within the top quartile of U.S.

metal manufacturers (NAICS code 332) based on information provided by the U.S.

Bureau of Labor Statistics, and it met that target in 2020 with its 2020 recordable rate of 0.92 representing record performance for the Company.

In 2021, the Company's recordable rate of 1.20 remained strong though industry data for 2021 was not available at the time of this report.

In addition, the Company produced solid lost time accident rates of 0.32 in 2020 and 0.38 in 2021, respectively.

metal manufacturers (North American Industry Classification System code 332) based on information provided by the U.S.

Bureau of Labor Statistics.

While quartile industry data was not available at the time of this report for either 2021 or 2022, the Company's 2022 recordable rate of 1.06 and lost time accident rate of 0.27 showed strong improvement over the corresponding 2021 rates of 1.20 and 0.38, respectively.

Attracting, Retaining, and Motivating Highly Qualified Associates

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As such, the Company believes it is important to reward associates with competitive wages and comprehensive benefits to recognize professional excellence and career progression.

The Company also believes it is important to provide pay and benefits that is competitive and equitable based on the local markets in which it operates.

The Company also believes it is important to provide pay and benefits that are competitive and equitable based on the local markets in which it operates.

In addition, the Company also believes that having open, honest dialogue with its associates is key to evolving its culture and keeping the Company strong.

In line with that approach, the Company conducts comprehensive surveys on a periodic basis to measure employee engagement.

In line with that approach, the Company conducts comprehensive surveys on a periodic basis and individual stay interviews to measure employee engagement.

Additionally, exit interviews are conducted with employees who voluntarily terminated their employment, which helps improve management processes.

The Company also deploys regular pulse surveys to gain insights from associates’ recent experiences and to better understand how effectively it is engaging, energizing and enabling its workforce.

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The Company has recruited and trained many of its associates through its engineering co-op program, where engineering students have the opportunity to work up to five semesters alongside the Company’s experienced engineers while they complete their bachelor’s degrees.

Comprehensive leadership, skill and competency assessments are offered to company employees to best identify and address individual and team development needs and activities.

To better inform its hiring and associate development efforts, the Company has partnered with third-party vendors to provide required training for its managers focused on diversity and inclusion.

To further the Company's goal of inclusiveness, Timken associate resource groups (“ARGs”) around the world help us understand and address the challenges faced by our diverse workforce and the opportunities diversity offers in advancing our collective knowledge.

Since 2009, our associates have driven the expansion of regional chapters across three primary ARGs:

Women’s International Network (WIN), Multicultural Association of Professionals (MAP), and Young Professionals Network (YPN).

To further our Company's diverse and inclusive culture and work environment, Timken associate resource groups (“ARGs”) around the world help us understand and address the challenges faced by our diverse workforce and the opportunities diversity offers in advancing our collective knowledge.

Our associates continue to drive new programming and chapter expansion across our five primary ARGs:

Women’s International Network (WIN), Multicultural Association of Professionals (MAP), Young Professionals Network (YPN), Veteran Engagement at Timken (VET), and Timken PRIDE Network (TPN).

Additionally, we partner with an online platform, GlobeSmart®, to help our associates further their global competency.

Available Information:

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business