What changed in this filing

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Item 1. Financial Statements

2024-11-05 compared with 2024-07-31 · 263 added, 181 removed, 711 unchanged (38% of the section changed)

3 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

5 unchanged sentences

Impairment and restructuring charges 2.5 8.9 8.1 40.3

Gain on sale of real estate ( 13.8 ) — ( 13.8 ) —

Operating Income 146.3 149.6 498.1 537.9

1 unchanged sentence

Interest income 3.4 2.6 11.3 6.0

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

Other income, net 1.2 2.3 0.3 5.4

Non-service pension and other postretirement expense ( 0.9 ) ( 0.9 ) ( 2.9 ) ( 0.8 )

Other (expense) income, net ( 6.3 ) 0.4 ( 6.0 ) 5.8

Income Before Income Taxes 112.2 124.2 403.4 469.0

10 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

1 unchanged sentence

Net Income $ 87.6 $ 90.9 $ 300.2 $ 346.1

Other comprehensive loss, net of tax:

Other comprehensive income (loss), net of tax:

Foreign currency translation adjustments 78.7 ( 65.1 ) ( 1.3 ) ( 65.3 )

1 unchanged sentence

Change in fair value of derivative financial instruments ( 1.6 ) 2.0 ( 1.3 ) 0.9

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

Other comprehensive income (loss), net of tax 75.5 ( 64.5 ) ( 7.2 ) ( 68.9 )

Comprehensive income, net of tax 163.1 26.4 293.0 277.2

3 unchanged sentences

Consolidated Balance Sheets

(Dollars in millions) June 30,

(Dollars in millions) September 30,

2024 December 31,

53 unchanged sentences

Consolidated Statements of Cash Flows

Six Months Ended

Nine Months Ended

September 30,

(Dollars in millions)

5 unchanged sentences

Impairment charges 2.0 33.2

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

Gain on sale of assets ( 14.6 ) —

Gain on divestitures — ( 3.7 )

31 unchanged sentences

Short-term debt activity, net ( 216.3 ) 202.1

Noncontrolling interest dividends paid ( 1.1 ) ( 0.6 )

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

2 unchanged sentences

Effect of exchange rate changes on cash 1.2 ( 19.0 )

Increase in Cash, Cash Equivalents and Restricted Cash 51.7 11.6

(Decrease) Increase in Cash, Cash Equivalents and Restricted Cash ( 5.9 ) 34.4

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

26 unchanged sentences

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).

The Company is preparing to adopt the new disclosure requirements beginning with its Annual Report on Form 10-K for the year ended December 31, 2024.

Note 3 - Acquisitions and Divestitures

Acquisitions:

On September 9, 2024, the Company acquired 100 % of the capital stock of CGI, Inc.

("CGI"), a Nevada-based manufacturer of precision drive systems serving a broad range of automation markets with a concentration in medical robotics.

CGI employs approximately 130 people and has its headquarters and manufacturing facilities in Carson City, Nevada.

The acquisition of CGI enhances the Company's product portfolio.

The total purchase price for this acquisition was $ 167.4 million, net of cash acquired of $ 8.9 million, subject to customary post-closing adjustments.

Results for CGI are reported in the Industrial Motion segment.

The Company incurred acquisition-related costs of $ 1.4 million to complete this acquisition.

The following table presents the purchase price allocation at fair value for the CGI acquisition as of September 30, 2024:

Initial Purchase

Price Allocation

Accounts receivable $ 4.2

Inventories 13.4

Other current assets 0.2

Property, plant and equipment 10.0

Operating lease assets 1.8

Goodwill 79.8

Other intangible assets 88.4

Other non-current assets 3.0

Total assets acquired $ 200.8

Accounts payable, trade $ 0.6

Salaries, wages and benefits 1.4

Other current liabilities 2.8

Deferred income taxes 23.4

Other non-current liabilities 5.2

Total liabilities assumed $ 33.4

Net assets acquired $ 167.4

The following table summarizes the preliminary purchase price allocation at fair valu e for identifiable intangible assets acquired in 2024:

Trade names $ 17.6 19 years

Technology and know-how 21.6 15 years

Customer relationships 49.2 15 years

Total intangible assets $ 88.4

Note 3 - Acquisitions and Divestitures (continued)

In determining the fair value of amounts above, the Company utilized a benchmarking approach based on the Company's prior acquisitions to determine the preliminary fair values for identified intangibles assets and inventory.

Upon completion of the final valuation and purchase price allocation, the final fair values of the assets acquired, liabilities assumed and resulting goodwill may differ materially from the preliminary assessment.

Any changes to the initial estimates of the fair value of the assets acquired and liabilities assumed will be recorded to those assets and liabilities and any residual amounts will be allocated to goodwill.

The amounts in the table above represent the preliminary purchase price allocation for CGI.

This purchase price allocation, including the residual amount allocated to goodwill, is subject to change as additional information concerning final asset and liability valuations are obtained and management completes its reassessment of the measurement period procedures based on the results of the preliminary valuation.

Given the proximity of the acquisition date to September 30, 2024, no elements of the purchase price allocation have been finalized as of September 30, 2024.

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 for 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.

During 2023, Timken completed six acquisitions, which enhanced the Company's capabilities and product portfolio.

21 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 June 30, 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 September 30, 2024:

Purchase Price Allocation at December 31, 2023 2024

Adjustments Updated Purchase Price Allocation at June 30, 2024

Adjustments Updated Purchase Price Allocation at September 30, 2024

Accounts receivable $ 44.7 $ ( 0.8 ) $ 43.9

5 unchanged sentences

Other intangible assets 306.7 ( 7.2 ) 299.5

Other assets 6.7 ( 1.6 ) 5.1

Other non-current assets 6.7 ( 1.6 ) 5.1

Total assets acquired $ 815.5 $ ( 1.5 ) $ 814.0

23 unchanged sentences

As a result, the Company utilized third-party valuation specialists to assist in determining the fair value of certain assets.

Inputs were generally determined by taking into account independent appraisals and historical data, supplemented by current and anticipated market conditions.

Inputs were generally determined by considering independent appraisals and historical data, supplemented by current and anticipated market conditions.

The amounts in the table above represent the purchase price allocation for the 2023 acquisitions as of the dates noted above.

This purchase price allocation, including the residual amount allocated to goodwill, is based on preliminary information in most cases and is subject to change as additional information concerning final asset and liability valuations are obtained and management completes its reassessment of the measurement period procedures based on the results of the preliminary valuation.

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

The purchase price allocations for Nadella and ARB are complete.

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.

This purchase price allocation, including the residual amount allocated to goodwill, has been adjusted as additional information concerning final asset and liability valuations have been obtained, and management has completed its reassessment of the measurement period procedures.

The purchase price allocation for Lagersmit is preliminary with respect to the valuation of inventory and intangible assets and any impact to the related deferred taxes, as well as changes to the residual amount allocated to goodwill.

The purchase price allocations for iMECH, Rosa, Des-Case, Nadella and ARB are complete.

The effect of measurement period adjustments to the estimated fair values will be reflected as if the adjustments had been completed on the acquisition date.

Divestitures:

On February 28, 2023, the Company completed the sale of all of its membership interests in S.E.

On September 20, 2023, the Company entered into a definitive agreement to sell Jiangsu TWB Bearings Co., Ltd.

During the third quarter of 2023, the business met the held for sale criteria, and the Company reclassified its assets and liabilities accordingly.

As a result of the carrying value of the legal entity exceeding the estimated sales price less costs to sell, the Company recorded an impairment charge of $ 1.0 million for the three months ended September 30, 2023.

The impairment charge is included in the impairment and restructuring line on the Consolidated Statement of Income.

The sale of TWB was completed on October 16, 2023.

On February 28, 2023, the Company completed the sale of all of its membership interest in S.E.

Setco Services Company, LLC ("SE Setco"), a 50 % owned joint venture.

2 unchanged sentences

The gain was reflected in other income, net in the Consolidated Statement of Income.

Sale of Other Assets:

On September 30, 2024, the Company completed the sale of its former bearing plant in Gaffney, South Carolina.

The Company received $ 16.0 million in cash proceeds for the Gaffney plant and recognized a pretax gain of $ 13.8 million on the sale.

The gain was reflected in gain on sale of real estate in the Consolidated Statement of Income.

Note 4 - Segment Information

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

8 unchanged sentences

Corporate pension and other postretirement

benefit related income (1)

benefit related (expense) income (1)

— ( 0.2 ) — 1.7

Depreciation and amortization ( 56.1 ) ( 52.2 ) ( 165.6 ) ( 149.0 )

3 unchanged sentences

(1) Corporate pension and other postretirement benefit related income 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.

September 30,

2024 December 31, 2023

Assets by Segment:

Total Assets by Segment:

Engineered Bearings $ 3,273.4 $ 3,296.8

4 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 and six months ended June 30, 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 nine months ended September 30, 2024 and 2023:

Three Months Ended Three Months Ended

June 30, 2024 June 30, 2023

September 30, 2024 September 30, 2023

Engineered Bearings Industrial Motion Total Engineered Bearings Industrial Motion Total

5 unchanged sentences

Net sales $ 740.7 $ 386.1 $ 1,126.8 $ 775.6 $ 367.1 $ 1,142.7

Six Months Ended Six Months Ended

June 30, 2024 June 30, 2023

Nine Months Ended Nine Months Ended

September 30, 2024 September 30, 2023

Engineered Bearings Industrial Motion Total Engineered Bearings Industrial Motion Total

6 unchanged sentences

When reviewing revenue by sales channel, the Company separates net sales to original equipment manufacturers ("OEMs") from sales to distributors and end users.

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

Six Months Ended Six Months Ended

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

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

Nine Months Ended Nine Months Ended

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

Original equipment manufacturers 55 % 60 %

Distribution/end users 45 % 40 %

In addition to disaggregating revenue by segment, geography and by sales channel as shown above, the Company believes information about the timing of transfer of goods or services, type of customer and distinguishing service revenue from product sales is also relevant.

During the six months ended June 30, 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.

During the nine months ended September 30, 2024 and September 30, 2023, approximately 10 % and 9 %, 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.

Finally, business with the United States ("U.S.") government or its contractors represented approximately 6 % of total net sales during the nine months ended September 30, 2024 and September 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 $ 129.0 million at June 30, 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 $ 178.0 million at September 30, 2024.

Note 5 - Revenue (continued)

Unbilled Receivables:

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:

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

September 30,

2024 December 31,

3 unchanged sentences

Ending balance $ 162.6 $ 144.5

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.

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

Deferred Revenue:

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:

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

September 30,

2024 December 31,

1 unchanged sentence

Acquisitions 0.6 1.4

Revenue (cash) received in advance 78.8 165.2

Revenue received or billed in advance of recognition 133.3 165.2

revenue recognized ( 119.0 ) ( 175.5 )

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

1 unchanged sentence

Effective tax rate 21.9 % 26.8 % 25.6 % 26.2 %

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.

Income tax expense for the three and nine months ended September 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.

federal statutory rate of 21% primarily due to the actual and projected mix of earnings in non-U.S.

jurisdictions with relatively higher tax rates.

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.

federal statutory rate of 21% due to the actual and projected mix of earnings in non-U.S.

jurisdictions with relatively higher tax rates, U.S.

state and local income taxes, and other permanent differences (net).

The effective tax rate of 21.9 % and 25.6 % for the three and nine months ended September 30, 2024, respectively, was lower than the effective tax rate for the three and nine months ended September 30, 2023, respectively, primarily due to the net favorable impact of discrete items versus the year ago periods.

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 and six months ended June 30, 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 nine months ended September 30, 2024 and 2023:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

11 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 and six months ended June 30, 2024 and 2023.

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

Note 8 - Inventories

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

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

September 30,

2024 December 31,

11 unchanged sentences

inventories are valued on the FIFO method.

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

The LIFO reserves as of September 30, 2024 and December 31, 2023 were $ 251.7 million and $ 232.1 million, respectively.

An actual valuation of the inventory under the LIFO method can be made only at the end of each year based on the inventory levels and costs at that time.

Accordingly, interim LIFO calculations are based on management’s estimates of expected year-end inventory levels and costs.

Accordingly, interim LIFO calculations are based on current 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.

1 unchanged sentence

The Company tests goodwill and indefinite-lived intangible assets for impairment at least annually, performing its annual impairment test as of October 1 st .

Furthermore, goodwill and indefinite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable.

Goodwill and indefinite-lived intangible assets are also reviewed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable.

The Company reviews goodwill for impairment at the reporting unit level.

5 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 six months ended June 30, 2024 were as follows:

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

Engineered Bearings Industrial Motion Total

Beginning balance $ 692.3 $ 677.3 $ 1,369.6

Beginning balance, January 1 $ 692.3 $ 677.3 $ 1,369.6

Acquisitions — 79.8 79.8

Foreign currency translation adjustments and other changes 8.2 7.9 16.1

Ending balance $ 700.5 $ 765.0 $ 1,465.5

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

The acquisition of CGI added goodwill of $ 79.8 million in 2024.

Goodwill arising from this acquisition is attributed to the expected synergies, including future cost savings, and other benefits expected to be generated by combining the companies.

The goodwill related to CGI is not deductible for tax purposes.

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

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

Amount Accumulated

15 unchanged sentences

Total intangible assets $ 1,739.6 $ ( 680.1 ) $ 1,059.5 $ 1,647.8 $ ( 616.4 ) $ 1,031.4

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 was $ 64.2 million and $ 53.1 million for the nine months ended September 30, 2024 and 2023, respectively.

Amortization expense for intangible assets is projected to be approximately $ 86 million in 2024;

4 unchanged sentences

Note 10 - Other Current Liabilities

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

(Dollars in millions) June 30,

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

September 30,

2024 December 31,

2 unchanged sentences

Operating lease liabilities 29.6 25.9

Interest 24.8 16.4

Taxes other than income and payroll taxes 21.2 17.8

1 unchanged sentence

Freight and duties 16.5 13.4

Interest 13.2 16.4

Professional fees 13.8 12.5

4 unchanged sentences

Note 11 - Financing Arrangements

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

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

September 30,

2024 December 31,

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

Variable-rate Term Loan, originally due to mature on August 16, 2024;

redeemed on May 29, 2024 $ — $ 220.8

Borrowings under lines of credit for certain of the Company’s foreign subsidiaries with various banks with interest rates ranging from 4.00 % to 4.45 % at September 30, 2024 and 4.35 % to 7.33 % at December 31, 2023

Short-term debt $ 25.9 $ 246.2

3 unchanged sentences

Most of these lines of credit are uncommitted.

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:

At September 30, 2024, the Company’s foreign subsidiaries had borrowings outstanding of $ 25.9 million and bank guarantees of $ 2.4 million.

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

September 30,

2024 December 31,

Variable-rate Senior Credit Facility with an average interest rate on 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 6.42 % 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 %

Variable-rate Accounts Receivable Facility with an interest rate of 6.20 % at September 30, 2024 and 6.42 % at December 31, 2023

Variable-rate Term Loan (1) , maturing on December 5, 2027, with an interest rate of 6.07 % at September 30, 2024 and 6.58 % at December 31, 2023

Fixed-rate Senior Unsecured Notes (1) , originally due to mature on September 1, 2024;

redeemed on June 24, 2024.

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

10 unchanged sentences

Note 11 - Financing Arrangements (continued)

The Company has a $ 100 million Amended and Restated Asset Securitization Agreement (the "Accounts Receivable Facility"), which matures on November 30, 2026.

The Company is party to a $ 100 million Amended and Restated Asset Securitization Agreement (the "Accounts Receivable Facility"), which matures on November 30, 2026.

Under the terms of the Accounts Receivable Facility, the Company sells, on an ongoing basis, certain domestic trade receivables to Timken Receivables Corporation, a wholly-owned consolidated subsidiary that, in turn, uses the trade receivables to secure borrowings that are funded through a vehicle that issues commercial paper in the short-term market.

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

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

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

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

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

As of September 30, 2024, there were $ 72 million outstanding borrowings under the Accounts Receivable Facility, which reduced the availability under this facility to $ 28 million.

The cost of this facility, which is the prevailing commercial paper rate plus facility fees, is considered a financing cost and is included in interest expense in the Consolidated Statements of Income.

1 unchanged sentence

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

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.

At September 30, 2024, the Company had no outstanding borrowings under the Senior Credit Facility.

The Credit Agreement has two financial covenants:

a consolidated leverage ratio and a consolidated interest coverage ratio.

a consolidated net leverage ratio and a consolidated interest coverage ratio.

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 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:

At September 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 certain insurance contracts and indirect taxes.

At September 30, 2024, outstanding letters of credit totaled $ 58.2 million, most with expiration dates within 12 months.

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

Thereafter 1,023.0

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

The table above excludes $ 20.0 million of unamortized discounts and fees that are netted against long-term debt at September 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 six months ended June 30, 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 nine months ended September 30, 2024 and twelve months ended December 31, 2023:

September 30,

2024 December 31,

3 unchanged sentences

Confirmed obligations outstanding, ending balance $ 17.6 $ 21.3

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

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

Note 13 - Contingencies

9 unchanged sentences

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.

The Company had total environmental accruals of $ 4.5 million and $ 4.7 million for various known environmental matters that are probable and reasonably estimable at September 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.

13 unchanged sentences

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 $ 17.5 million and $ 15.2 million at June 30, 2024 and December 31, 2023, respectively.

The product warranty liability included in "Other current liabilities" on the Consolidated Balance Sheets was $ 17.1 million and $ 15.2 million at September 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.

1 unchanged sentence

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

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.

In addition, the Company continues to evaluate claims raised by certain customers with respect to the performance of bearings sold into the wind energy and automotive 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 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:

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

September 30,

2024 December 31,

4 unchanged sentences

Note 14 - Equity

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

The Timken Company Shareholders

3 unchanged sentences

Loss Treasury

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

Net income 87.6 81.8 5.8

6 unchanged sentences

instruments, net of reclassifications ( 1.6 ) ( 1.6 )

Dividends declared to noncontrolling interest ( 1.1 ) ( 1.1 )

Dividends - $ 0.34 per share

1 unchanged sentence

Sale of shares of Timken India Limited ( 1.2 ) ( 1.2 )

Noncontrolling interest acquired 1.0 1.0

Stock-based compensation expense 5.2 5.2

1 unchanged sentence

Stock option exercise activity 0.1 0.1

Payments related to tax withholding for

stock-based compensation ( 1.1 ) ( 1.1 )

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

Balance at September 30, 2024 $ 3,090.7 $ 40.7 $ 1,260.0 $ 2,441.5 $ ( 147.4 ) $ ( 661.5 ) $ 157.4

The Timken Company Shareholders

14 unchanged sentences

( 72.2 ) ( 72.2 )

Dividends declared to noncontrolling interest ( 1.1 ) ( 1.1 )

Sale of shares of Timken India Limited 186.8 161.3 5.6 19.9

5 unchanged sentences

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.

Balance at September 30, 2024 $ 3,090.7 $ 40.7 $ 1,260.0 $ 2,441.5 $ ( 147.4 ) $ ( 661.5 ) $ 157.4

On May 28, 2024, the Company completed the sale of 5.0 million shares of TIL, generating net proceeds of $ 187 million after income taxes of $ 45 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 India market remains strategically important to Timken, and the Company is currently not planning any further sale transactions.

Note 14 - Equity (continued)

The Timken Company Shareholders

3 unchanged sentences

Loss Treasury

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

Net income 90.9 87.9 3.0

6 unchanged sentences

instruments, net of reclassifications 2.0 2.0

Dividends declared to noncontrolling interest ( 0.6 ) ( 0.6 )

Dividends - $ 0.33 per share

( 23.4 ) ( 23.4 )

Sale of shares of Timken India Limited 229.0 194.5 8.1 26.4

Stock-based compensation expense 5.8 5.8

3 unchanged sentences

stock-based compensation ( 1.3 ) ( 1.3 )

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

Balance at September 30, 2023 $ 2,597.1 $ 40.7 $ 1,068.3 $ 2,196.7 $ ( 240.9 ) $ ( 587.0 ) $ 119.3

The Timken Company Shareholders

11 unchanged sentences

instruments, net of reclassifications 0.9 0.9

Dividends declared to noncontrolling interest ( 0.6 ) ( 0.6 )

Dividends - $ 0.97 per share

6 unchanged sentences

stock-based compensation ( 16.4 ) ( 16.4 )

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.

Balance at September 30, 2023 $ 2,597.1 $ 40.7 $ 1,068.3 $ 2,196.7 $ ( 240.9 ) $ ( 587.0 ) $ 119.3

On June 20, 2023, the Company completed the sale of 7.6 million shares of TIL, generating net proceeds of $ 229 million after 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.

1 unchanged sentence

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

For the three months ended June 30, 2024:

For the three months ended September 30, 2024:

Engineered Bearings Industrial Motion Total

1 unchanged sentence

Severance and related benefit costs 0.1 1.3 1.4

Exit costs 0.9 0.1 1.0

Total $ 1.1 $ 1.4 $ 2.5

For the six months ended June 30, 2024:

For the nine months ended September 30, 2024:

Engineered Bearings Industrial Motion Total

3 unchanged sentences

Total $ 4.1 $ 4.0 $ 8.1

For the three months ended June 30, 2023:

For the three months ended September 30, 2023:

Engineered Bearings Industrial Motion Total

Impairment charges $ 4.9 $ — $ 4.9

Severance and related benefit costs $ 1.6 $ 1.8 $ 3.4

1 unchanged sentence

Total $ 6.9 $ 2.0 $ 8.9

For the six months ended June 30, 2023:

For the nine months ended September 30, 2023:

Engineered Bearings Industrial Motion Total

3 unchanged sentences

Total $ 9.3 $ 31.0 $ 40.3

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.

The following discussion explains the more significant impairment and restructuring charges recorded for the periods presented;

however, it is not intended to reflect a comprehensive discussion of all amounts included in the tables above.

Engineered Bearings:

2 unchanged sentences

The facility ceased operations at the end of the fourth quarter of 2023, which affected approximately 225 employees.

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

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.

During the nine months ended September 30, 2024, the Company recorded exit costs of $ 1.2 million, related to this closure.

During the three and nine months ended September 30, 2023, the Company recorded severance and related benefits of $ 1.4 million and $ 3.1 million, respectively, related to this closure.

The Company has incurred cumulative pretax costs related to this closure of $ 16.2 million as of September 30, 2024, including rationalization costs recorded in cost of products sold.

During the nine months ended September 30, 2024, the Company recorded impairment charges of $ 2.0 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 zero.

Note 15 - Impairment and Restructuring Charges (continued)

As a result of Russia's invasion of Ukraine (and associated international sanctions), the Company suspended its operations in Russia in 2022.

During the three months ended September 30, 2023, the Company recorded impairment charges of $ 3.9 million related to certain assets of its joint venture in Russia.

During the three months ended September 30, 2023, the Company classified TWB as assets held for sale and recorded impairment charges of $ 1.0 million.

The Company completed the sale of TWB on October 16, 2023.

Industrial Motion:

1 unchanged sentence

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 first quarter of 2025 and is expected to affect approximately 155 employees.

The closure of this facility is expected to occur by the end of the second 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 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.

During the three and nine months ended September 30, 2024, the Company recorded severance and related benefits of $ 0.6 million and $ 2.1 million, respectively, related to this closure.

The Company has incurred cumulative pretax costs related to this closure of $ 5.5 million as of September 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 six months ended June 30, 2023.

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 September 30, 2023.

In addition, during the three and nine months ended September 30, 2023, the Company recorded severance and related benefits of $ 0.8 million and $ 1.1 million, respectively, related to one of its automatic lubrication systems facilities in Europe.

Consolidated Restructuring Accrual:

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:

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

September 30,

2024 December 31,

3 unchanged sentences

Ending balance $ 3.3 $ 5.8

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

The restructuring accrual at September 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 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.

The amounts for the three and nine months ended September 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

June 30, Three Months Ended

September 30, Three Months Ended

September 30,

2024 2023 2024 2023 2024 2023

4 unchanged sentences

Amortization of prior service cost — 0.1 — — — 0.1

Recognition of net actuarial gains — ( 1.0 ) — — — ( 1.0 )

Recognition of net actuarial losses — 0.2 — — — 0.2

Net periodic benefit cost (credit) $ 2.5 $ 2.8 $ 0.7 $ 0.2 $ 3.2 $ 3.0

Plans International Plans Total

Six Months Ended

June 30, Six Months Ended

Nine Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023 2024 2023

6 unchanged sentences

Net periodic benefit cost (credit) $ 7.7 $ 6.2 $ 2.0 $ 1.1 $ 9.7 $ 7.3

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.

For the three and nine months ended September 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.

As a result of this remeasurement, the Company recognized a net actuarial ("mark-to-market") loss of $ 0.2 million and a gain of $ 1.7 million during the three and nine months ended September 30, 2023 , respectively.

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

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Net periodic benefit credit:

Service cost $ 0.1 $ 0.1 $ 0.1 $ 0.1

Interest cost 0.4 0.4 1.3 1.4

2 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 and six months ended June 30, 2024 and 2023, respectively:

The following tables present details about components of accumulated other comprehensive (loss) income for the three and nine months ended September 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 )

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

Other comprehensive income (loss) before

reclassifications and income taxes 78.7 ( 0.1 ) ( 1.8 ) 76.8

Amounts reclassified from accumulated other

comprehensive loss before income

taxes — ( 2.1 ) ( 0.4 ) ( 2.5 )

Income tax benefit — 0.6 0.6 1.2

Net current period other comprehensive income

(loss), net of income taxes 78.7 ( 1.6 ) ( 1.6 ) 75.5

Noncontrolling interest 0.6 — — 0.6

Net current period other comprehensive income

(loss), net of income taxes and noncontrolling

interest 79.3 ( 1.6 ) ( 1.6 ) 76.1

Balance at September 30, 2024 $ ( 188.4 ) $ 40.1 $ 0.9 $ ( 147.4 )

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

2 unchanged sentences

Amounts reclassified from accumulated other

comprehensive (loss) income before income

taxes — ( 1.9 ) ( 1.6 ) ( 3.5 )

comprehensive loss before income taxes — ( 6.0 ) ( 2.2 ) ( 8.2 )

Income tax benefit — 1.5 0.3 1.8

Net current period other comprehensive loss,

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

net of income taxes ( 1.3 ) ( 4.6 ) ( 1.3 ) ( 7.2 )

Noncontrolling interest 1.1 — — 1.1

Net current period other comprehensive (loss)

income, net of income taxes, noncontrolling

Net current period other comprehensive income

(loss), net of income taxes, noncontrolling

interest and sale of shares of Timken India

Limited 5.4 ( 4.6 ) ( 1.3 ) ( 0.5 )

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

Balance at September 30, 2024 $ ( 188.4 ) $ 40.1 $ 0.9 $ ( 147.4 )

Foreign currency translation adjustments at September 30, 2024 included cumulative losses of $ 15.3 million related to net investment hedges.

Refer to Note 20 - Derivative Instruments and Hedging Activities for additional information on the net investment hedges.

Note 18 - Accumulated Other Comprehensive Income (Loss) (continued)

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

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

Sale of shares of Timken India Limited 5.6 — — 5.6

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

Other comprehensive loss (income) before

1 unchanged sentence

Amounts reclassified from accumulated other

comprehensive loss before income taxes — ( 3.9 ) ( 1.8 ) ( 5.7 )

comprehensive (loss) income before income

taxes — ( 1.9 ) 0.8 ( 1.1 )

Income tax benefit (expense) 0.5 ( 0.9 ) ( 0.4 )

5 unchanged sentences

interest ( 63.3 ) ( 1.4 ) 2.0 ( 62.7 )

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 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

reclassifications and income taxes ( 27.9 ) ( 0.1 ) ( 0.9 ) ( 28.9 )

Amounts reclassified from accumulated other

comprehensive loss before income taxes — ( 2.0 ) 0.4 ( 1.6 )

Income tax benefit — 0.5 0.2 0.7

Net current period other comprehensive income

(loss), net of income taxes ( 27.9 ) ( 1.6 ) ( 0.3 ) ( 29.8 )

Noncontrolling interest 0.3 — — 0.3

Net current period other comprehensive income

(loss), net of income taxes and noncontrolling

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

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

Balance at September 30, 2023 $ ( 291.1 ) $ 46.3 $ 3.9 $ ( 240.9 )

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

6 unchanged sentences

taxes — ( 5.9 ) 0.9 ( 5.0 )

Income tax benefit — 1.0 0.5 1.5

Income tax benefit (expense) — 1.5 ( 0.4 ) 1.1

Net current period other comprehensive (loss)

2 unchanged sentences

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 )

income, net of income taxes, noncontrolling

interest and sale of shares of Timken India

Limited ( 55.4 ) ( 4.5 ) 0.9 ( 59.0 )

Balance at September 30, 2023 $ ( 291.1 ) $ 46.3 $ 3.9 $ ( 240.9 )

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 June 30, 2024 and December 31, 2023:

June 30, 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 September 30, 2024 and December 31, 2023:

September 30, 2024

Total Level 1 Level 2 Level 3

17 unchanged sentences

Total liabilities $ 11.4 $ — $ 11.4 $ —

Cash and cash equivalents are highly liquid investments with maturities of 90 days or less when purchased and are valued at redemption value.

Cash and cash equivalents include highly liquid investments with maturities of 90 days or less when purchased that are valued at redemption value.

Short-term investments are investments with maturities between 91 days 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.

1 unchanged sentence

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.

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.

During the nine months ended September 30, 2024, certain engineering-related assets used in the business, with a carrying value of $ 2.0 million, were written down to their fair value of zero , resulting in an impairment charge of $ 2.0 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 less the cost to sell the assets.

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

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 $ 1,655.6 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 fair value of the Company’s long-term fixed-rate debt, based on Level 2 inputs (quoted market prices), was $ 1,737.4 million and $ 1,387.7 million at September 30, 2024 and December 31, 2023, respectively.

The carrying value of this debt was $ 1,734.4 million and $ 1,424.3 million at September 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.

9 unchanged sentences

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.

The net impact for the three and nine months ended September 30, 2024 was a loss of $ 25.3 million and $ 19.2 million to accumulated comprehensive (loss) income, respectively.

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, as a hedge against its net investment in one of its European subsidiaries.

The objective of the hedge transaction is to protect the net investment in the foreign operations against changes in the exchange rate between the U.S.

dollar and the Euro.

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

The net impact for the three and nine months ended September 30, 2024 was a loss of $ 2.3 million and $ 0.5 million to accumulated comprehensive (loss) income, respectively.

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

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.

As of September 30, 2024 and December 31, 2023, the Company had $ 734.3 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 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.

As of September 30, 2024 and December 31, 2023, the Company had $ 69.1 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 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:

As of September 30, 2024 and December 31, 2023, the Company had $ 665.2 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 nine months ended September 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

September 30, Nine Months Ended September 30, 2024

Derivatives not designated as hedging instruments:

Location of gain or (loss) recognized in income 2024 2023 2024 2023

Foreign currency forward contracts Other expense, net $ ( 3.9 ) $ ( 13.9 ) $ ( 10.0 ) $ ( 16.5 )

Foreign currency forward contracts Other expense (income), net $ 2.6 $ 0.3 $ ( 7.4 ) $ ( 16.2 )

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