What changed in this filing

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Item 1. Financial Statements

2024-07-31 compared with 2024-04-30 · 271 added, 117 removed, 621 unchanged (38% of the section changed)

3 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

(Dollars in millions, except per share data)

8 unchanged sentences

Non-service pension and other postretirement (expense) income ( 1.0 ) — ( 2.0 ) 0.1

Other (expense) income, net ( 0.9 ) 3.1

Other income, net 1.2 2.3 0.3 5.4

Income Before Income Taxes 137.9 176.6 291.2 344.8

10 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

(Dollars in millions)

Net Income $ 102.0 $ 129.5 $ 212.6 $ 255.2

Other comprehensive (loss) income, net of tax:

Other comprehensive loss, net of tax:

Foreign currency translation adjustments ( 29.3 ) ( 27.9 ) ( 80.0 ) ( 0.2 )

1 unchanged sentence

Change in fair value of derivative financial instruments ( 0.8 ) ( 0.3 ) 0.3 ( 1.1 )

Other comprehensive (loss) income, net of tax ( 51.1 ) 25.4

Other comprehensive loss, net of tax ( 31.6 ) ( 29.8 ) ( 82.7 ) ( 4.4 )

Comprehensive income, net of tax 70.4 99.7 129.9 250.8

3 unchanged sentences

Consolidated Balance Sheets

(Dollars in millions) March 31,

(Dollars in millions) June 30,

2024 December 31,

53 unchanged sentences

Consolidated Statements of Cash Flows

Three Months Ended

Six Months Ended

(Dollars in millions)

5 unchanged sentences

Impairment charges 1.9 28.3

Loss on sale of assets 0.1 0.2

(Gain) loss on sale of assets ( 1.1 ) 1.2

Gain on divestitures — ( 3.6 )

15 unchanged sentences

Acquisitions, net of cash acquired ( 0.4 ) ( 324.6 )

Proceeds from disposal of property, plant and equipment 1.5 0.3

Proceeds from divestitures, net of cash divested 0.3 4.5

11 unchanged sentences

Payments on long-term debt ( 1,221.3 ) ( 643.5 )

Deferred financing costs ( 5.5 ) —

Short-term debt activity, net ( 213.1 ) ( 1.4 )

Net Cash Used in Financing Activities ( 15.0 ) ( 17.5 )

Proceeds from the sale of shares in Timken India Limited 232.3 284.8

Other ( 1.2 ) —

Net Cash (Used in) Provided by Financing Activities ( 52.0 ) 209.0

Effect of exchange rate changes on cash ( 10.8 ) ( 8.0 )

Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash 3.0 ( 1.6 )

Increase in Cash, Cash Equivalents and Restricted Cash 51.7 11.6

Cash, cash equivalents and restricted cash at beginning of year 419.3 340.7

18 unchanged sentences

Early adoption is permitted.

The Company is currently evaluating the impact of adopting this guidance.

The Company is preparing to adopt this guidance in 2025.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280).

4 unchanged sentences

The other segment items category is the difference between segment revenue less the segment expenses disclosed and each reported measure of segment profit or loss.

For public entities, the new guidance is effective for annual periods beginning after December 15, 2023.

Early adoption is permitted.

The Company is currently evaluating the impact of adopting this guidance.

For public entities, the new guidance is effective for annual periods beginning after December 15, 2023, and for interim periods beginning after December 15, 2024.

The Company is p reparing to adopt this guidance later in 2024 (annual period) and in 2025 (interim periods).

Note 3 - Acquisitions and Divestitures

23 unchanged sentences

Note 3 - Acquisitions and Divestitures (continued)

The following table presents the updated purchase price allocation at fair value, net of cash acquired, for the 2023 acquisitions, as of December 31, 2023 and March 31, 2024:

The following table presents the updated purchase price allocation at fair value, net of cash acquired, for the 2023 acquisitions, as of December 31, 2023 and June 30, 2024:

Purchase Price Allocation at December 31, 2023 2024

Adjustments Updated Purchase Price Allocation at March 31, 2024

Adjustments Updated Purchase Price Allocation at June 30, 2024

Accounts receivable $ 44.7 $ ( 0.9 ) $ 43.8

35 unchanged sentences

The purchase price allocations for Lagersmit, iMECH, Rosa and Des-Case are preliminary.

The purchase price allocation for Nadella is substantially complete.

The purchase price allocation for ARB is complete.

The purchase price allocations for Nadella and ARB are complete.

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.

9 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Engineered Bearings $ 783.4 $ 857.2 $ 1,585.9 $ 1,757.9

6 unchanged sentences

Unallocated corporate expense ( 17.3 ) ( 13.2 ) ( 35.3 ) ( 30.9 )

Corporate pension and other postretirement benefit related income (1)

Corporate pension and other postretirement

benefit related income (1)

Depreciation and amortization ( 54.2 ) ( 51.2 ) ( 109.5 ) ( 96.8 )

11 unchanged sentences

Note 5 - Revenue

The following table presents details deemed most relevant to the users of the financial statements about total revenue for the three months ended March 31, 2024 and 2023:

The following table presents details deemed most relevant to the users of the financial statements about total revenue for the three and six months ended June 30, 2024 and 2023:

Three Months Ended Three Months Ended

March 31, 2024 March 31, 2023

June 30, 2024 June 30, 2023

Engineered Bearings Industrial Motion Total Engineered Bearings Industrial Motion Total

5 unchanged sentences

Net sales $ 783.4 $ 398.9 $ 1,182.3 $ 857.2 $ 415.1 $ 1,272.3

Six Months Ended Six Months Ended

June 30, 2024 June 30, 2023

Engineered Bearings Industrial Motion Total Engineered Bearings Industrial Motion Total

United States $ 671.0 $ 396.2 $ 1,067.2 $ 658.5 $ 413.1 $ 1,071.6

Americas excluding the United States 191.0 51.1 242.1 188.2 55.8 244.0

Europe / Middle East / Africa 320.5 277.8 598.3 359.5 250.4 609.9

China 152.6 39.3 191.9 314.9 39.2 354.1

Asia-Pacific excluding China 250.8 22.3 273.1 236.8 18.7 255.5

Net sales $ 1,585.9 $ 786.7 $ 2,372.6 $ 1,757.9 $ 777.2 $ 2,535.1

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, 2024 and 2023:

Three Months Ended Three Months Ended

Revenue by sales channel March 31, 2024 March 31, 2023

The following table presents the approximate percent of revenue by sales channel for the six months ended June 30, 2024 and 2023:

Six Months Ended Six Months Ended

Revenue by sales channel June 30, 2024 June 30, 2023

Original equipment manufacturers 60 % 60 %

1 unchanged sentence

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, 2024 and March 31, 2023, approximately 7 % 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 5 % and 4 % of total net sales represented service revenue during the three months ended March 31, 2024 and March 31, 2023, respectively.

Finally, business with the United States ("U.S.") government or its contractors represented approximately 6 % and 5 % of total net sales during the three months ended March 31, 2024 and March 31, 2023, respectively.

During the six months ended June 30, 2024 and June 30, 2023, approximately 7 % and 8 %, respectively, of total net sales were recognized over-time because of the continuous transfer of control to the customer, with the remainder recognized as of a point in time.

Approximately 5 % and 4 % of total net sales represented service revenue during the six months ended June 30, 2024 and June 30, 2023, respectively.

Finally, business with the United States ("U.S.") government or its contractors represented approximately 6 % of total net sales during the six months ended June 30, 2024 and June 30, 2023.

Remaining Performance Obligations:

2 unchanged sentences

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 $ 153.0 million at March 31, 2024.

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 $ 129.0 million at June 30, 2024.

Note 5 - Revenue (continued)

Unbilled Receivables:

The following table contains a rollforward of unbilled receivables for the three months ended March 31, 2024 and the twelve months ended December 31, 2023:

The following table contains a rollforward of unbilled receivables for the six months ended June 30, 2024 and the twelve months ended December 31, 2023:

2024 December 31,

3 unchanged sentences

Ending balance $ 148.1 $ 144.5

There were no impairment losses recorded on unbilled receivables for the three months ended March 31, 2024 and the twelve months ended December 31, 2023.

There were no impairment losses recorded on unbilled receivables for the six months ended June 30, 2024 and the twelve months ended December 31, 2023.

Deferred Revenue:

The following table contains a rollforward of deferred revenue for the three months ended March 31, 2024 and the twelve months ended December 31, 2023:

The following table contains a rollforward of deferred revenue for the six months ended June 30, 2024 and the twelve months ended December 31, 2023:

2024 December 31,

8 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Provision for income taxes $ 35.9 $ 47.1 $ 78.6 $ 89.6

Effective tax rate 26.0 % 26.7 % 27.0 % 26.0 %

Income tax expense for the three months ended March 31, 2024 was calculated using forecasted multi-jurisdictional annual effective tax rates to determine a blended annual effective tax rate.

Income tax expense for the three and six months ended June 30, 2024 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.

1 unchanged sentence

jurisdictions with relatively higher tax rates.

The effective tax rate of 27.9 % for the three months ended March 31, 2024 was higher than the effective tax rate for the three months ended March 31, 2023 primarily due to an increase in the mix of earnings in non-U.S.

jurisdictions with relatively higher tax rates and the net favorable impact of discrete items in the year ago period.

The effective tax rate of 26.0 % for the three months ended June 30, 2024 was lower than the effective tax rate for the three months ended June 30, 2023 primarily due to the net favorable impact of discrete items versus the year ago period.

The effective tax rate of 27.0 % for the six months ended June 30, 2024 was higher than the effective tax rate for the six months ended June 30, 2023 primarily due to an increase in the mix of earnings in non-U.S.

jurisdictions with relatively higher tax rates and the net unfavorable impact of discrete items versus the year ago period.

On December 20, 2021, the Organization for Economic Co-operation and Development (“OECD”) released Pillar Two model rules defining the global minimum tax, which calls for the taxation of large corporations at a minimum rate of 15%.

3 unchanged sentences

Note 7 - Earnings Per Share

The following table sets forth the reconciliation of the numerator and the denominator of basic earnings per share and diluted earnings per share for the three months ended March 31, 2024 and 2023:

The following table sets forth the reconciliation of the numerator and the denominator of basic earnings per share and diluted earnings per share for the three and six months ended June 30, 2024 and 2023:

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Net income attributable to The Timken Company $ 96.2 $ 125.2 $ 199.7 $ 247.5

10 unchanged sentences

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 months ended March 31, 2024 and 2023.

There were no antidilutive stock options outstanding during the three and six months ended June 30, 2024 and 2023.

Note 8 - Inventories

The components of inventories at March 31, 2024 and December 31, 2023 were as follows:

The components of inventories at June 30, 2024 and December 31, 2023 were as follows:

2024 December 31,

11 unchanged sentences

inventories are valued on the FIFO method.

The LIFO reserve at March 31, 2024 and December 31, 2023 was $ 234.7 million and $ 232.1 million, respectively.

The LIFO reserves as of June 30, 2024 and December 31, 2023 were $ 240.6 million and $ 234.7 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.

11 unchanged sentences

As a result, the Company recorded a pretax impairment loss of $ 28.3 million during the first three months of 2023, which was reported in impairment and restructuring charges on the Consolidated Statement of Income.

The changes in the carrying amount of goodwill for the three months ended March 31, 2024 were as follows:

The changes in the carrying amount of goodwill for the six months ended June 30, 2024 were as follows:

Engineered Bearings Industrial Motion Total

2 unchanged sentences

Ending balance $ 696.4 $ 653.3 $ 1,349.7

The following table displays intangible assets as of March 31, 2024 and December 31, 2023:

Balance at March 31, 2024 Balance at December 31, 2023

The following table displays intangible assets as of June 30, 2024 and December 31, 2023:

Balance at June 30, 2024 Balance at December 31, 2023

Amount Accumulated

15 unchanged sentences

Total intangible assets $ 1,619.0 $ ( 651.3 ) $ 967.7 $ 1,647.8 $ ( 616.4 ) $ 1,031.4

Amortization expense for intangible assets was $ 21.6 million and $ 15.1 million for the three months ended March 31, 2024 and 2023, respectively.

Amortization expense for intangible assets was $ 42.6 million and $ 33.9 million for the six months ended June 30, 2024 and 2023, respectively.

Amortization expense for intangible assets is projected to be approximately $ 80 million in 2024;

4 unchanged sentences

Note 10 - Other Current Liabilities

The following table displays other current liabilities as of March 31, 2024 and December 31, 2023:

(Dollars in millions) March 31,

The following table displays other current liabilities as of June 30, 2024 and December 31, 2023:

(Dollars in millions) June 30,

2024 December 31,

3 unchanged sentences

Taxes other than income and payroll taxes 23.1 17.8

Interest 17.7 16.4

Product warranty 17.5 15.2

Freight and duties 15.4 13.4

Interest 13.2 16.4

Professional fees 11.6 12.5

4 unchanged sentences

Note 11 - Financing Arrangements

Short-term debt at March 31, 2024 and December 31, 2023 was as follows:

Short-term debt at June 30, 2024 and December 31, 2023 was as follows:

2024 December 31,

Variable-rate Term Loan (1) , maturing on August 16, 2024, with an interest rate of 5.10 % at March 31, 2024 and 5.11 % at December 31, 2023

$ 215.8 $ 220.8

Borrowings under lines of credit for certain of the Company’s foreign subsidiaries with various banks with interest rates ranging from 4.51 % to 5.51 % at March 31, 2024 and 4.35 % to 7.33 % at December 31, 2023

Variable-rate Term Loan, maturing on August 16, 2024, with an interest rate of 5.11 % at December 31, 2023

Borrowings under lines of credit for certain of the Company’s foreign subsidiaries with various banks with interest rates ranging from 4.28 % to 4.73 % at June 30, 2024 and 4.35 % to 7.33 % at December 31, 2023

Short-term debt $ 27.7 $ 246.2

On August 16, 2023, the Company entered into a € 200 million variable-rate term loan ("2024 Term Loan"), maturing on August 16, 2024.

The Company currently intends to refinance the 2024 Term Loan prior to its maturity.

The Company repaid the 2024 Term Loan during the second quarter of 2024.

Lines of credit for certain of the Company's foreign subsidiaries provide for short-term borrowings.

Most of these lines of credit are uncommitted.

At March 31, 2024, the Company’s foreign subsidiaries had borrowings outstanding of $ 26.8 million and bank guarantees of $ 1.7 million.

Long-term debt at March 31, 2024 and December 31, 2023 was as follows:

At June 30, 2024, the Company’s foreign subsidiaries had borrowings outstanding of $ 27.7 million and bank guarantees of $ 2.1 million.

Long-term debt at June 30, 2024 and December 31, 2023 was as follows:

2024 December 31,

Variable-rate Senior Credit Facility with an average interest rate on U.S.

Dollar of 6.43 % and Euro of 4.86 % at March 31, 2024 and U.S.

Dollar of 6.42 % and Euro of 4.80 % at June 30, 2024 and U.S.

Dollar of 6.48 % and Euro of 4.85 % at December 31, 2023

$ 40.7 $ 247.4

Variable-rate Accounts Receivable Facility with an interest rate of 6.30 % at March 31, 2024 and 6.42 % at December 31, 2023

Variable-rate Term Loan (1) , maturing on December 5, 2027, with an interest rate of 6.56 % at March 31, 2024 and 6.58 % at December 31, 2023

Variable-rate Accounts Receivable Facility with an interest rate of 6.42 % at December 31, 2023

Variable-rate Term Loan (1) , maturing on December 5, 2027, with an interest rate of 6.57 % at June 30, 2024 and 6.58 % at December 31, 2023

Fixed-rate Senior Unsecured Notes (1) , maturing on September 1, 2024, with an interest rate of 3.875 %

Fixed-rate Euro Senior Unsecured Notes (1) , maturing on September 7, 2027, with an interest rate of 2.02 %

Fixed-rate Euro Senior Unsecured Notes (1) , maturing on May 23, 2034, with an interest rate of 4.125 %

Fixed-rate Senior Unsecured Notes (1) , maturing on December 15, 2028, with an interest rate of 4.50 %

11 unchanged sentences

Borrowings under the Accounts Receivable Facility may be limited to certain borrowing base limitations;

however, availability under the Accounts Receivable Facility was not reduced by any such borrowing base limitations at March 31, 2024.

As of March 31, 2024, there were $ 75.0 million in outstanding borrowings under the Accounts Receivable Facility, which reduced the availability under this facility to $ 25.0 million.

however, availability under the Accounts Receivable Facility was not reduced by any such borrowing base limitations at June 30, 2024.

As of June 30, 2024, there were no outstanding borrowings under the Accounts Receivable Facility.

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.

1 unchanged sentence

The interest rates under the Credit Agreement are based on Secured Overnight Financing Rate ("SOFR").

At March 31, 2024, the Company had $ 251.1 million of outstanding borrowings and $ 0.1 million of letters of credit under the Senior Credit Facility, which reduced the availability under this facility to $ 498.8 million.

At June 30, 2024, the Company had $ 40.7 million outstanding borrowings under the Senior Credit Facility, which reduced the availability under this facility to $ 709.3 million.

The Credit Agreement has two financial covenants:

a consolidated leverage ratio and a consolidated interest coverage ratio.

The Company has outstanding fixed-rate unsecured notes ("2024 Notes") in the aggregate principal amount of $ 350 million with an interest rate of 3.875 %, maturing on September 1, 2024.

The Company currently intends to refinance the 2024 Notes prior to their maturity.

At March 31, 2024, the Company was in full compliance with all applicable covenants on its outstanding debt.

On May 23, 2024, the Company issued fixed-rate unsecured senior notes ("2034 Notes") in the aggregate principal amount of € 600 million with an interest rate of 4.125 %, maturing on May 23, 2034.

Proceeds from the 2034 Notes were used for the redemption of the Company's outstanding fixed-rate unsecured senior notes ("2024 Notes") in the aggregate principal amount of $ 350 million, that were due to mature on September 1, 2024, as well as the repayment of other debt outstanding at the time of issuance.

At June 30, 2024, 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 and certain indirect taxes.

At March 31, 2024, outstanding letters of credit totaled $ 59.5 million, most with expiration dates within 12 months.

The maturities of long-term debt (including $ 6.0 million of finance leases) subsequent to March 31, 2024 are as follows:

At June 30, 2024, outstanding letters of credit totaled $ 60.6 million, most with expiration dates within 12 months.

The maturities of long-term debt (including $ 8.7 million of finance leases) subsequent to June 30, 2024 are as follows:

Thereafter 997.5

The table above excludes $ 8.9 million of unamortized premiums and fees that are netted against long-term debt at March 31, 2024.

The table above excludes $ 21.2 million of unamortized discounts and fees that are netted against long-term debt at June 30, 2024.

Note 12 - Supply Chain Financing

6 unchanged sentences

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, 2024 and twelve months ended December 31, 2023:

The following table is a rollforward of the outstanding obligations for the Company’s supplier finance program for the six months ended June 30, 2024 and twelve months ended December 31, 2023:

2024 December 31,

3 unchanged sentences

Confirmed obligations outstanding, ending balance $ 18.6 $ 21.3

The obligations outstanding at March 31, 2024 and December 31, 2023 were included in accounts payable, trade on the Consolidated Balance Sheet.

The obligations outstanding at June 30, 2024 and December 31, 2023 were included in accounts payable, trade on the Consolidated Balance Sheet.

Note 13 - Contingencies

The Company is responsible for environmental remediation at various manufacturing facilities presently or formerly operated by the Company.

Governmental authorities in the United States and the European Union are increasingly focused on regulating per- and polyfluoroalkyl substances (“PFAS”).

PFAS regulations are applicable to portions of the Company's products, and future conditions may develop, arise or be discovered that create environmental compliance or remediation liabilities at certain of its facilities.

In addition, the Company, through one of its subsidiaries, has currently been identified as a potentially responsible party for investigation and remediation under the Comprehensive Environmental Response, Compensation and Liability Act, known as the Superfund, or similar state laws with respect to one site.

Claims for investigation and remediation have been asserted against numerous other unrelated entities, which are believed to be financially solvent and are expected to fulfill their proportionate share of the obligation.

On December 28, 2004, the United States Environmental Protection Agency (“USEPA”) sent Lovejoy, LLC.

("Lovejoy") a Special Notice Letter that identified Lovejoy as a potentially responsible party, together with at least 14 unrelated parties, at the Ellsworth Industrial Park Site, Downers Grove, DuPage County, Illinois (the “Site”).

On December 28, 2004, the United States Environmental Protection Agency (“USEPA”) sent Lovejoy, LLC ("Lovejoy") a Special Notice Letter that identified Lovejoy as a potentially responsible party, for investigation and remediation obligations at the Ellsworth Industrial Park Site, Downers Grove, DuPage County, Illinois (the “Site”) under the Comprehensive Environmental Response, Compensation and Liability Act, known as the Superfund, or similar state laws.

Claims for investigation and remediation have been asserted against Lovejoy and at least 14 unrelated parties, which are believed to be financially solvent and are expected to fulfill their proportionate share of the obligation.

The Company acquired Lovejoy in 2016.

1 unchanged sentence

The USEPA and the Illinois Environmental Protection Agency (“IEPA”) allege there have been one or more releases or threatened releases of hazardous substances, including, but not limited to, a release or threatened release on or from Lovejoy's property at the Site.

The relief sought by the USEPA and IEPA includes further investigation and potential remediation of the Site and reimbursement of response costs.

Lovejoy’s allocated share of past and future costs related to the Site, including for investigation and/or remediation, could be significant.

All previously pending property damage and personal injury lawsuits against Lovejoy related to the Site were settled or dismissed prior to our acquisition of Lovejoy.

The Company had total environmental accruals of $ 4.6 million and $ 4.7 million for various known environmental matters that are probable and reasonably estimable at March 31, 2024 and December 31, 2023, respectively, which includes the Lovejoy matter described above.

In addition, governmental authorities in the United States and the European Union are increasingly focused on regulating per- and polyfluoroalkyl substances (“PFAS”).

PFAS regulations are applicable to portions of the Company's products, and conditions may develop, arise or be discovered that create environmental compliance or remediation liabilities at certain of its facilities.

The Company had total environmental accruals of $ 4.6 million and $ 4.7 million for various known environmental matters that are probable and reasonably estimable at June 30, 2024 and December 31, 2023, respectively, which includes the Lovejoy matter described above.

These accruals were recorded based upon the best estimate of costs to be incurred considering 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.

The ultimate resolution of these matters could result in actual costs that exceed amounts accrued.

Note 13 - Contingencies (continued)

Legal Matter:

On June 11, 2024, the Company's subsidiary, Timken India Limited ("TIL"), received a government order claiming damages (penalties and interest) totaling approximately $ 12.4 million.

The order relates to the closure of TIL’s retirement trust for employees and subsequent transfer of trust assets to the government-administered Employees’ Provident Fund Organization ("EFPO").

The order alleges that the surrender of trust assets did not follow applicable EFPO timing guidelines.

TIL believes it fully complied with EFPO requirements and guidelines under the circumstances.

TIL is disputing the merits of the order and has filed an appeal with the high court in India having jurisdiction over the matter.

Management believes that relief will be provided to TIL once the matter is fully adjudicated;

accordingly, no liability has been recorded.

While no assurance can be given as to the ultimate outcome of this matter, the Company does not believe that the final resolution will have a material effect on the Company's consolidated financial position or liquidity;

however, the effect of any future outcome may be material to the results of operations of any particular period in which costs, if any, are recognized.

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 $ 16.3 million and $ 15.2 million at March 31, 2024 and December 31, 2023, respectively.

The product warranty liability included in "Other current liabilities" on the Consolidated Balance Sheets was $ 17.5 million and $ 15.2 million at June 30, 2024 and December 31, 2023, respectively.

The balances at the end of each respective period represent the best estimates of costs for existing and future claims for products that are still under warranty.

The liability primarily relates to accruals for products sold into the automotive and renewable energy sectors.

The liability primarily relates to accruals for products sold into the automotive and wind energy sectors.

Accrual estimates are based on actual claims and expected trends that continue to mature.

The Company continues to evaluate claims raised by certain customers with respect to the performance of bearings sold into the automotive and wind energy sectors.

The Company continues to evaluate potential claims raised by certain customers with respect to the performance of bearings sold into the automotive and wind energy sectors.

Management believes that the outcome of these claims will not have a material effect on the Company's consolidated financial position;

however, the effect of any such change may be material to the results of operations of any particular period in which such change occurs.

The following is a rollforward of the consolidated product warranty accrual for the three months ended March 31, 2024 and twelve months ended December 31, 2023:

however, the effect of a change in our assessment may be material to the results of operations of any particular period in which such change occurs.

The following is a rollforward of the consolidated product warranty accrual for the six months ended June 30, 2024 and twelve months ended December 31, 2023:

2024 December 31,

4 unchanged sentences

Note 14 - Equity

The following tables present the changes in the components of equity for the three months ended March 31, 2024 and 2023, respectively:

The following tables present the changes in the components of equity for the three and six months ended June 30, 2024 and 2023, respectively:

The Timken Company Shareholders

3 unchanged sentences

Loss Treasury

Balance at December 31, 2023 $ 2,702.4 $ 40.7 $ 1,076.5 $ 2,232.2 $ ( 146.9 ) $ ( 620.1 ) $ 120.0

Balance at March 31, 2024 $ 2,735.0 $ 40.7 $ 1,083.0 $ 2,311.2 $ ( 197.6 ) $ ( 629.0 ) $ 126.7

Net income 102.0 96.2 5.8

8 unchanged sentences

( 23.9 ) ( 23.9 )

Sale of shares of Timken India Limited 188.0 162.5 5.6 19.9

Noncontrolling interest acquired 1.0 1.0

Stock-based compensation expense 7.0 7.0

Stock purchased at fair market value ( 29.7 ) ( 29.7 )

Stock option exercise activity 3.4 3.4

1 unchanged sentence

stock-based compensation ( 1.1 ) ( 1.1 )

Balance at March 31, 2024 $ 2,735.0 $ 40.7 $ 1,083.0 $ 2,311.2 $ ( 197.6 ) $ ( 629.0 ) $ 126.7

Balance at June 30, 2024 $ 2,950.1 $ 40.7 $ 1,255.9 $ 2,383.5 $ ( 223.5 ) $ ( 659.8 ) $ 153.3

The Timken Company Shareholders

7 unchanged sentences

Pension and other postretirement liability

adjustments (net of income tax benefit

of $ 0.9 million)

( 3.0 ) ( 3.0 )

Change in fair value of derivative financial

instruments, net of reclassifications 0.3 0.3

Dividends - $ 0.67 per share

( 48.4 ) ( 48.4 )

Sale of shares of Timken India Limited 188.0 162.5 5.6 19.9

Noncontrolling interest acquired 1.0 1.0

Stock-based compensation expense 11.5 11.5

Stock purchased at fair market value ( 29.7 ) ( 29.7 )

Stock option exercise activity 5.4 5.4

Payments related to tax withholding for

stock-based compensation ( 10.0 ) ( 10.0 )

Balance at June 30, 2024 $ 2,950.1 $ 40.7 $ 1,255.9 $ 2,383.5 $ ( 223.5 ) $ ( 659.8 ) $ 153.3

On May 28, 2024, the Company completed the sale of 5.0 million shares of TIL, generating net proceeds of $ 188 million after estimated income taxes of $ 44 million and transaction costs.

The sale reduced the Company’s ownership in TIL from 57.70 percent to 51.05 percent.

The India market remains strategically important to Timken, and the Company is not planning on any further sale transactions.

The Timken Company Shareholders

Capital Other

Capital Retained Earnings Accumulated

Comprehensive

Loss Treasury

Balance at March 31, 2023 $ 2,436.3 $ 40.7 $ 853.3 $ 2,030.8 $ ( 156.8 ) $ ( 420.0 ) $ 88.3

Net income 129.5 125.2 4.3

Foreign currency translation adjustment ( 27.9 ) ( 27.6 ) ( 0.3 )

Pension and other postretirement liability

adjustments (net of income tax benefit of

5 unchanged sentences

( 23.8 ) ( 23.8 )

Sale of shares of Timken India Limited 229.0 194.5 8.1 26.4

Stock-based compensation expense 6.1 6.1

3 unchanged sentences

stock-based compensation ( 1.3 ) ( 1.3 )

Balance at March 31, 2023 $ 2,436.3 $ 40.7 $ 853.3 $ 2,030.8 $ ( 156.8 ) $ ( 420.0 ) $ 88.3

Balance at June 30, 2023 $ 2,650.0 $ 40.7 $ 1,058.4 $ 2,132.2 $ ( 178.2 ) $ ( 521.8 ) $ 118.7

The Timken Company Shareholders

Capital Other

Capital Retained Earnings Accumulated

Comprehensive Loss Treasury

Balance at December 31, 2022 $ 2,352.9 $ 40.7 $ 829.6 $ 1,932.1 $ ( 181.9 ) $ ( 352.2 ) $ 84.6

Net income 255.2 247.5 7.7

Foreign currency translation adjustment ( 0.2 ) ( 0.2 )

Pension and other postretirement liability

adjustments (net of income tax benefit

of $ 1.0 million)

( 3.1 ) ( 3.1 )

Change in fair value of derivative financial

instruments, net of reclassifications ( 1.1 ) ( 1.1 )

Dividends - $ 0.64 per share

( 47.4 ) ( 47.4 )

Sale of shares of Timken India Limited 229.0 194.5 8.1 26.4

Stock-based compensation expense 17.1 17.1

Stock purchased at fair market value ( 154.5 ) ( 154.5 )

Stock option exercise activity 17.2 17.2

Payments related to tax withholding for

stock-based compensation ( 15.1 ) ( 15.1 )

Balance at June 30, 2023 $ 2,650.0 $ 40.7 $ 1,058.4 $ 2,132.2 $ ( 178.2 ) $ ( 521.8 ) $ 118.7

On June 20, 2023, the Company completed the sale of 7.6 million shares of TIL, generating net proceeds of $ 229 million after estimated income taxes of $ 55 million and transaction costs.

The sale reduced the Company’s ownership in TIL from 67.80 percent to 57.70 percent.

Note 15 - Impairment and Restructuring Charges

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

For the three months ended March 31, 2024:

For the three months ended June 30, 2024:

Engineered Bearings Industrial Motion Total

Impairment charges $ 1.9 $ — $ 1.9

Severance and related benefit costs 0.2 1.2 1.4

Total $ 2.1 $ 1.2 $ 3.3

For the six months ended June 30, 2024:

Engineered Bearings Industrial Motion Total

Impairment charges $ 1.9 $ — $ 1.9

Severance and related benefit costs 0.8 2.5 3.3

Exit costs 0.3 0.1 0.4

Total $ 3.0 $ 2.6 $ 5.6

For the three months ended March 31, 2023:

For the three months ended June 30, 2023:

Engineered Bearings Industrial Motion Total

Severance and related benefit costs $ 1.5 $ 0.8 $ 2.3

Exit costs 0.2 — 0.2

Total $ 1.7 $ 0.8 $ 2.5

For the six months ended June 30, 2023:

Engineered Bearings Industrial Motion Total

Impairment charges $ — $ 28.3 $ 28.3

Severance and related benefit costs 2.2 0.7 2.9

Exit costs 0.2 — 0.2

Total $ 2.4 $ 29.0 $ 31.4

6 unchanged sentences

The Company expects to incur approximately $ 12 million to $ 14 million of pretax costs in total related to this closure.

During the three months ended March 31, 2024, the Company recorded exit costs of $ 0.3 million, related to this closure.

During the three months ended March 31, 2023, the Company recorded severance and related benefits of $ 0.8 million related to this closure.

The Company has incurred cumulative pretax costs related to this closure of $ 12.7 million as of March 31, 2024, including rationalization costs recorded in cost of products sold.

In addition, during the three months ended March 31, 2024, the Company recorded severance and related benefits of $ 0.6 million related to one of its bearing facilities in Europe.

During the six months ended June 30, 2024, the Company recorded exit costs of $ 0.3 million, related to this closure.

During the three and six months ended June 30, 2023, the Company recorded severance and related benefits of $ 0.9 million and $ 1.7 million, respectively, related to this closure.

The Company has incurred cumulative pretax costs related to this closure of $ 12.9 million as of June 30, 2024, including rationalization costs recorded in cost of products sold.

During the three months ended June 30, 2024, the Company recorded impairment charges of $ 1.9 million related to certain engineering-related assets used in the business.

Management concluded no further investment would be made in these assets and as a result, reduced the value to $ 0.2 million.

Note 15 - Impairment and Restructuring Charges (continued)

Industrial Motion:

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The Company expects to transfer its operations to other belts manufacturing facilities.

The closure of this facility is expected to occur by the end of the fourth quarter of 2024 and is expected to affect approximately 155 employees.

The closure of this facility is expected to occur by the end of the first quarter of 2025 and is expected to affect approximately 155 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 March 31, 2024, the Company recorded severance and related benefits of $ 0.8 million, related to this closure.

The Company has incurred cumulative pretax costs related to this closure of $ 2.5 million as of March 31, 2024, including rationalization costs recorded in cost of products sold.

During the three and six months ended June 30, 2024, the Company recorded severance and related benefits of $ 0.7 million and $ 1.5 million, respectively, related to this closure.

The Company has incurred cumulative pretax costs related to this closure of $ 3.4 million as of June 30, 2024, including rationalization costs recorded in cost of products sold.

Effective January 1, 2023, the Company began operating under two new reportable segments, Engineered Bearings and Industrial Motion.

1 unchanged sentence

In addition, the Company was required to review goodwill for impairment under these new reporting units.

As a result of this goodwill impairment review, the Company recognized a pretax goodwill impairment loss of $ 28.3 million during the three months ended March 31, 2023.

Note 15 - Impairment and Restructuring Charges (continued)

As a result of this goodwill impairment review, the Company recognized a pretax goodwill impairment loss of $ 28.3 million during the six months ended June 30, 2023.

Consolidated Restructuring Accrual:

The following is a rollforward of the consolidated restructuring accrual for the three months ended March 31, 2024 and twelve months ended December 31, 2023:

The following is a rollforward of the consolidated restructuring accrual for the six months ended June 30, 2024 and twelve months ended December 31, 2023:

2024 December 31,

3 unchanged sentences

Ending balance $ 3.5 $ 5.8

The restructuring accrual at March 31, 2024 and December 31, 2023 was included in other current liabilities on the Consolidated Balance Sheets.

The restructuring accrual at June 30, 2024 and December 31, 2023 was included in other current liabilities on the Consolidated Balance Sheets.

Note 16 - Retirement Benefit Plans

The following table sets forth the net periodic benefit cost for the Company’s defined benefit pension plans.

The amounts for the three months ended March 31, 2024 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, 2024.

The amounts for the three and six months ended June 30, 2024 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, 2024.

Plans International Plans Total

Three Months Ended

March 31, Three Months Ended

June 30, Three Months Ended

2024 2023 2024 2023 2024 2023

6 unchanged sentences

Net periodic benefit cost (credit) $ 2.7 $ 1.7 $ 0.6 $ 0.6 $ 3.3 $ 2.3

For the three months ended March 31, 2023, lump sum payments related to new retirees exceeded annual service and interest costs for one of the Company's U.S.

defined pension plans, triggering a remeasurement of assets and obligations for this plan.

As a result of this remeasurement, the Company recognized a net actuarial gain ("mark-to-market charges") of $ 0.9 million during the three months ended March 31, 2023.

Plans International Plans Total

Six Months Ended

June 30, Six Months Ended

2024 2023 2024 2023 2024 2023

Components of net periodic benefit cost (credit):

Service cost $ 0.4 $ 0.4 $ 0.9 $ 0.8 $ 1.3 $ 1.2

Interest cost 8.5 9.0 5.1 5.3 13.6 14.3

Expected return on plan assets ( 3.8 ) ( 4.2 ) ( 4.8 ) ( 5.3 ) ( 8.6 ) ( 9.5 )

Amortization of prior service cost 0.1 0.1 0.1 0.1 0.2 0.2

Recognition of net actuarial gains — ( 1.9 ) — — — ( 1.9 )

Net periodic benefit cost (credit) $ 5.2 $ 3.4 $ 1.3 $ 0.9 $ 6.5 $ 4.3

For the three and six months ended June 30, 2023, lump sum payments related to new retirees exceeded annual service and interest costs for one of the Company's U.S.

defined benefit pension plans, triggering a remeasurement of assets and obligations for this plan.

As a result of this remeasurement, the Company recognized net actuarial ("mark-to-market") gains of $ 1.0 million and $ 1.9 million during the three and six months ended June 30, 2023.

Note 17 - Other Postretirement Benefit Plans

The following table sets forth the net periodic benefit cost for the Company’s other postretirement benefit plans.

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Net periodic benefit credit:

3 unchanged sentences

Note 18 - Accumulated Other Comprehensive Income (Loss)

The following tables present details about components of accumulated other comprehensive (loss) income for the three months ended March 31, 2024 and 2023, respectively:

The following tables present details about components of accumulated other comprehensive (loss) income for the three and six months ended June 30, 2024 and 2023, respectively:

Foreign currency translation adjustments Pension and other postretirement liability adjustments Change in fair value of derivative financial instruments Total

Balance at March 31, 2024 $ ( 244.1 ) $ 43.2 $ 3.3 $ ( 197.6 )

Sale of shares of Timken India Limited 5.6 — — 5.6

Other comprehensive loss (income) before

reclassifications and income taxes ( 29.3 ) — 0.7 ( 28.6 )

Amounts reclassified from accumulated other

comprehensive (loss) income before income

taxes — ( 1.9 ) ( 1.6 ) ( 3.5 )

Income tax benefit — 0.4 0.1 0.5

Net current period other comprehensive (loss)

income, net of income taxes ( 29.3 ) ( 1.5 ) ( 0.8 ) ( 31.6 )

Noncontrolling interest 0.1 — — 0.1

Net current period other comprehensive (loss)

income, net of income taxes, noncontrolling

interest and sale of shares of Timken India

Limited ( 23.6 ) ( 1.5 ) ( 0.8 ) ( 25.9 )

Balance at June 30, 2024 $ ( 267.7 ) $ 41.7 $ 2.5 $ ( 223.5 )

Foreign currency translation adjustments Pension and other postretirement liability adjustments Change in fair value of derivative financial instruments Total

Balance at December 31, 2023 $ ( 193.8 ) $ 44.7 $ 2.2 $ ( 146.9 )

Sale of shares of Timken India Limited 5.6 — — 5.6

Other comprehensive loss (income) before

9 unchanged sentences

interest ( 73.9 ) ( 3.0 ) 0.3 ( 76.6 )

Balance at March 31, 2024 $ ( 244.1 ) $ 43.2 $ 3.3 $ ( 197.6 )

Balance at June 30, 2024 $ ( 267.7 ) $ 41.7 $ 2.5 $ ( 223.5 )

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 )

Balance at March 31, 2023 $ ( 208.3 ) $ 49.3 $ 2.2 $ ( 156.8 )

Sale of shares of Timken India Limited 8.1 — — 8.1

Other comprehensive income (loss) before

9 unchanged sentences

interest ( 19.5 ) ( 1.6 ) ( 0.3 ) ( 21.4 )

Balance at March 31, 2023 $ ( 208.3 ) $ 49.3 $ 2.2 $ ( 156.8 )

Balance at June 30, 2023 $ ( 227.8 ) $ 47.7 $ 1.9 $ ( 178.2 )

Foreign currency translation adjustments Pension and other postretirement liability adjustments Change in fair value of derivative financial instruments Total

Balance at December 31, 2022 $ ( 235.7 ) $ 50.8 $ 3.0 $ ( 181.9 )

Sale of shares of Timken India Limited 8.1 — — 8.1

Other comprehensive (loss) income before

reclassifications and income taxes ( 0.2 ) ( 0.1 ) ( 1.7 ) ( 2.0 )

Amounts reclassified from accumulated other

comprehensive (loss) income before income

taxes — ( 4.0 ) 0.1 ( 3.9 )

Income tax benefit — 1.0 0.5 1.5

Net current period other comprehensive (loss)

income, net of income taxes ( 0.2 ) ( 3.1 ) ( 1.1 ) ( 4.4 )

Noncontrolling interest — — — —

Net current period other comprehensive (loss)

income, net of income taxes and noncontrolling

interest 7.9 ( 3.1 ) ( 1.1 ) 3.7

Balance at June 30, 2023 $ ( 227.8 ) $ 47.7 $ 1.9 $ ( 178.2 )

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

5 unchanged sentences

Level 3 – Unobservable inputs for the asset or liability.

The following tables present the fair value hierarchy for those financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2024 and December 31, 2023:

March 31, 2024

The following tables present the fair value hierarchy for those financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2024 and December 31, 2023:

June 30, 2024

Total Level 1 Level 2 Level 3

13 unchanged sentences

Short-term investments 31.6 — 31.6 —

Interest rate swap contracts — — 0 —

Foreign currency forward contracts 3.3 — 3.3 —

9 unchanged sentences

In addition, the Company remeasures certain assets at fair value, using Level 3 inputs, as a result of the occurrence of triggering events such as purchase accounting for acquisitions or goodwill impairment.

No other material assets were measured at fair value on a nonrecurring basis during the three months ended March 31, 2024 and 2023, respectively.

During the three months ended June 30, 2024, certain engineering-related assets used in the business, with a carrying value of $ 2.1 million, were written down to their fair value of $ 0.2 million, resulting in an impairment charge of $ 1.9 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.

No other material assets were measured at fair value on a nonrecurring basis during the six months ended June 30, 2024 and 2023, respectively.

Financial Instruments:

2 unchanged sentences

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 Level 2 inputs (quoted market prices), was $ 1,386.5 million and $ 1,387.7 million at March 31, 2024 and December 31, 2023, respectively.

The carrying value of this debt was $ 1,420.4 million and $ 1,424.3 million at March 31, 2024 and December 31, 2023, respectively.

The fair value of the Company’s long-term fixed-rate debt, based on Level 2 inputs (quoted market prices), was $ 1,655.6 million and $ 1,387.7 million at June 30, 2024 and December 31, 2023, respectively.

The carrying value of this debt was $ 1,699.4 million and $ 1,424.3 million at June 30, 2024 and December 31, 2023, respectively.

The difference between fair value and carrying value primarily reflects the net impact of changes in prevailing interest rates and credit spreads since the fixed-rate debt was issued.

6 unchanged sentences

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 May 23, 2024, the Company designated its 2034 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 change in the exchange rate between the U.S.

dollar and the Euro.

The net impact for the three and six months ended June 30, 2024 were both a gain of $ 6.1 million to accumulated comprehensive (loss) income.

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.

1 unchanged sentence

dollar and the Euro.

The net impact for the three months ended March 31, 2024 was a gain of $ 1.4 million to accumulated comprehensive (loss) income with a corresponding offset to other income (expense), which partially offsets the impact of the foreign currency adjustment on the 2027 Notes.

The net impact for the three and six months ended June 30, 2024 was a gain of $ 0.4 million and $ 1.8 million to accumulated comprehensive (loss) income.

The Company does not purchase or hold any derivative financial instruments for trading purposes.

As of March 31, 2024 and December 31, 2023, the Company had $ 579.4 million and $ 591.8 million, respectively, of outstanding foreign currency forward contracts at notional value.

As of June 30, 2024 and December 31, 2023, the Company had $ 648.1 million and $ 591.8 million, respectively, of outstanding foreign currency forward contracts at notional value.

Refer to Note 19 - Fair Value for the fair value disclosure of derivative financial instruments.

5 unchanged sentences

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 March 31, 2024 and December 31, 2023, the Company had $ 69.7 million and $ 73.8 million, respectively, of outstanding foreign currency forward contracts at notional value that were classified as cash flow hedges.

As of June 30, 2024 and December 31, 2023, the Company had $ 68.0 million and $ 73.8 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.

5 unchanged sentences

The revaluation of these contracts, as well as the revaluation of the underlying balance sheet items, is recorded directly to the income statement so the adjustment generally offsets the revaluation of the underlying balance sheet items to protect cash payments and reduce income statement volatility.

As of March 31, 2024 and December 31, 2023, the Company had $ 509.7 million and $ 518.0 million, respectively, of outstanding foreign currency forward contracts at notional value that were not designated as hedging instruments.

The following table presents the impact of derivative instruments not designated as hedging instruments for the three months ended March 31, 2024 and 2023, respectively, and the related location within the Consolidated Statements of Income:

Amount of gain or (loss) recognized in income

As of June 30, 2024 and December 31, 2023, the Company had $ 580.1 million and $ 518.0 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 six months ended June 30, 2024 and 2023, 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

June 30, Six Months Ended

Derivatives not designated as hedging instruments:

2 unchanged sentences

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-Q

Item 1. Financial Statements