What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-02-13 compared with 2025-02-20 · 400 added, 490 removed, 1171 unchanged (43% of the section changed)

2 unchanged sentences

Financial Statements Page

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Statements of Income

4 unchanged sentences

Notes to Consolidated Financial Statements

Report of an Independent Registered Public Accounting Firm (PCAOB ID:

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of The Timken Company

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of The Timken Company and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S.

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 13, 2026 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

United States Pension Benefit Obligations

Description of the Matter At December 31, 2025, the Company’s pension benefit obligation was $555.1 million.

The three plans with the largest pension benefit obligations, covering certain employees in the United States, comprised 52 % of the total projected benefit obligation as of December 31, 2025.

As explained in Note 1 to the consolidated financial statements, the Company recognizes actuarial gains and losses immediately through net periodic benefit cost upon the annual remeasurement in the fourth quarter, or on an interim basis if specific events trigger a remeasurement.

Auditing the pension benefit obligations of these three plans was complex and required the involvement of specialists due to the estimation uncertainty involved in determining the discount rates used in the measurement of these benefit obligations.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s accounting for the measurement of the pension benefit obligations.

For example, we tested controls over management’s review of the discount rates used in the measurement of these benefit obligations.

To test the pension benefit obligation, our audit procedures included, among others, evaluating the methodology used and the significant actuarial assumptions discussed above.

We compared the actuarial assumptions used by management to historical trends and we involved actuarial specialists to assist with our procedures.

For example, we evaluated management’s methodology for determining the discount rate that reflects the maturity and duration of the benefit payments and is used to measure the pension benefit obligations.

In certain instances, as part of this assessment, we compared the projected cash flows to prior year and compared the current year benefits paid to the prior year projected cash flows.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 1910.

Cleveland, Ohio

February 13, 2026

Consolidated Statements of Income

11 unchanged sentences

Interest income 10.3 14.9 9.3

Non-service pension and other postretirement (expense) income ( 2.6 ) ( 24.0 ) 9.3

Other (expense) income, net ( 4.1 ) ( 1.2 ) 5.5

Non-service pension and other postretirement expense ( 15.8 ) ( 2.6 ) ( 24.0 )

Other expense, net ( 8.8 ) ( 4.1 ) ( 1.2 )

Income Before Income Taxes 416.0 494.2 530.5

17 unchanged sentences

Change in fair value of derivative financial instruments ( 4.2 ) 2.0 ( 0.8 )

Other comprehensive (loss) income, net of tax ( 165.2 ) 26.6 ( 166.2 )

Other comprehensive income (loss), net of tax 196.1 ( 165.2 ) 26.6

Comprehensive Income, net of tax 513.4 210.1 434.6

7 unchanged sentences

Restricted cash 1.0 0.4

Accounts receivable, less allowances:

(2024 - $ 21.5 million;

2023 - $ 17.1 million)

Accounts receivable, net 689.4 664.6

Unbilled receivables 137.6 140.8

57 unchanged sentences

(Gain) loss on sale of assets ( 1.8 ) ( 14.4 ) 1.3

(Gain) loss on acquisitions and divestitures — ( 2.9 ) 3.5

Gain on acquisitions and divestitures — — ( 2.9 )

Deferred income tax benefit ( 27.2 ) ( 35.3 ) ( 11.6 )

Stock-based compensation expense 28.3 25.9 30.6

Pension and other postretirement expense (income) 5.3 26.5 ( 0.6 )

Pension and other postretirement expense 18.4 5.3 26.5

Pension and other postretirement benefit contributions and payments ( 38.7 ) ( 26.1 ) ( 29.8 )

10 unchanged sentences

Capital expenditures ( 148.2 ) ( 170.0 ) ( 187.8 )

Acquisitions, net of cash acquired of $ 8.9 million in 2024;

$ 30.0 million in 2023;

and $ 19.4 million in 2022

Acquisitions, net of cash acquired of $ 8.9 million in 2024 and $ 30.0 million in 2023

— ( 167.4 ) ( 638.8 )

Proceeds from disposals of property, plant and equipment 4.5 17.6 1.8

Proceeds from divestitures, net of cash divested of $ 0.7 million in 2023 and

$ 5.3 million in 2022

0.3 13.5 33.9

Proceeds from divestitures, net of cash divested of $ 0.7 million in 2023

Investments in short-term marketable securities, net ( 4.5 ) 15.2 5.7

40 unchanged sentences

( 94.0 ) ( 94.0 )

Sale of shares of Timken India Limited 229.0 194.5 8.1 26.4

Other ownership changes ( 4.0 ) ( 1.5 ) ( 2.5 )

Stock-based compensation expense 30.6 30.6

Purchase of treasury shares ( 250.9 ) ( 250.9 )

Shares surrendered for stock option activity — 3.8 ( 3.8 )

Stock option exercise activity 21.8 21.8

20 unchanged sentences

compensation ( 10.0 ) ( 10.0 )

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

Balance at December 31, 2024 $ 2,984.1 $ 40.7 $ 1,269.3 $ 2,488.8 $ ( 301.7 ) $ ( 670.6 ) $ 157.6

Year Ended December 31, 2025

9 unchanged sentences

( 98.3 ) ( 98.3 )

Sale of shares of Timken India Limited 186.8 161.3 5.6 19.9

Other ownership changes ( 1.3 ) ( 1.3 )

43 unchanged sentences

The amount of consideration to which the Company expects to be entitled in exchange for the goods and services is not generally subject to significant variations.

However, the Company does offer certain customers rebates, prompt payment discounts, end-user discounts, the right to return eligible products, and/or other forms of variable consideration.

However, the Company does offer certain customers rebates, prompt payment discounts, the right to return eligible products, and/or other forms of variable consideration.

The Company estimates this variable consideration using the expected value amount, which is based on historical experience.

5 unchanged sentences

The Company considers contract modifications to exist when the modification either creates new enforceable rights and obligations or changes existing ones.

Substantially all of the Company's contract modifications are for goods or services that are distinct from the existing contract.

Therefore, the effect of a contract modification on the transaction price and the Company's measure of progress for the performance obligation to which it relates is generally recognized on a prospective basis.

Certain of the Company's contract modifications are for goods or services that are distinct from the existing contract, in which case, the effect of the modification on the transaction price and the Company's measure of progress for the performance obligation to which it relates is generally recognized on a prospective basis.

Cash Equivalents:

1 unchanged sentence

Restricted Cash:

Cash and cash equivalents of $ 0.4 million were restricted at December 31, 2024 and 2023.

Accounts Receivable, Less Allowances:

Accounts receivable, less allowances on the Consolidated Balance Sheets include amounts billed and currently due from customers.

Cash and cash equivalents of $ 1.0 million and $ 0.4 million were restricted at December 31, 2025 and 2024.

Note 1 - Significant Accounting Policies (continued)

Accounts Receivable, Net:

Accounts receivable, net on the Consolidated Balance Sheets include amounts billed and currently due from customers.

The amounts due are stated at their net estimated realizable value.

The Company maintains an allowance for doubtful accounts, which represents an estimate of the losses expected from the accounts receivable portfolio, to reduce accounts receivable to their net realizable value.

The Company maintains an allowance for expected credit losses, which represents an estimate of the losses expected from the accounts receivable portfolio, to reduce accounts receivable to their net realizable value.

The allowance is based upon historical trends in collections and write-offs, management's judgment of the probability of collecting accounts and management's evaluation of business risk.

1 unchanged sentence

The Company believes it has limited concentration of credit risk due to the diversity of its customer base.

The following table provides a rollforward of the allowance for credit losses for the years ended December 31, 2025 and 2024:

Beginning balance $ 17.2 $ 12.4

Expense, net of recoveries 0.2 7.3

Write-offs ( 6.0 ) ( 1.8 )

Foreign currency translation adjustments and other changes 0.9 ( 0.7 )

Ending balance $ 12.3 $ 17.2

Unbilled Receivables:

Unbilled receivables on the Consolidated Balance Sheets primarily include unbilled amounts typically resulting from sales under long-term contracts when the following conditions exist:

(i) cost-to-cost method of revenue recognition is utilized;

(ii) the revenue recognized exceeds the amount billed to the customer;

and (iii) the right to payment is generally subject to the passage of time as milestones are achieved.

Unbilled receivables on the Consolidated Balance Sheets primarily include unbilled amounts typically resulting from sales under long-term contracts and are recognized when the Company's conditional right to consideration has transferred to the customer, for which additional performance obligations associated with the contract have not yet been satisfied.

The amounts recorded for unbilled receivables do not exceed their net realizable value.

Note 1 - Significant Accounting Policies (continued)

Inventories are valued at the lower of cost or net realizable value, with approximately 58 % valued by the first-in, first-out ("FIFO") method and the remaining 42 % valued by the last-in, first-out ("LIFO") method.

8 unchanged sentences

The impairment of long-lived assets is evaluated when events or changes in circumstances indicate that the carrying amount of the asset or related group of assets may not be recoverable.

If the expected future undiscounted cash flows are less than the carrying amount of the asset, an impairment loss is recognized at that time to reduce the asset to the lower of its fair value or its net book value.

If the expected future undiscounted cash flows are less than the carrying amount of the asset, an impairment loss is recognized at that time to reduce the asset to its fair value.

Note 1 - Significant Accounting Policies (continued)

The Company determines if any arrangement is a lease at the inception of a contract.

16 unchanged sentences

The Company may refine these estimates and record adjustments to an asset or liability with the offset to goodwill during the measurement period, which may be up to one year from the acquisition date.

Upon the conclusion of the measurement period or final determination of the values of the assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded in the Company’s Consolidated Statements of Income.

Note 1 - Significant Accounting Policies (continued)

Upon the conclusion of the measurement period or final determination of the values of the assets acquired and liabilities assumed, whichever comes first, any subsequent adjustments are recorded in the Company’s Consolidated Statements of Income.

Product Warranties:

3 unchanged sentences

Adjustments are made quarterly to the accruals as claim data and historical experience change.

Deferred Revenue:

Deferred revenue on the Consolidated Balance Sheets primarily includes the Company's obligation to transfer goods or services to a customer where the Company has received consideration (advance payments) from the customer or billings to customers are in excess of revenue recognized.

Note 1 - Significant Accounting Policies (continued)

Income Taxes:

9 unchanged sentences

Foreign currency gains and losses resulting from transactions are included in the Consolidated Statements of Income.

Net of related derivative activity, the Company recognized a foreign currency exchange loss resulting from transactions of $ 9.3 million for the year ended December 31, 2024 and recognized a loss of $ 14.8 million and a gain of $ 15.4 million for the years ended December 31, 2023 and 2022, respectively.

Net of related derivative activity, the Company recognized foreign currency exchange losses resulting from transactions of $ 14.0 million, $ 9.3 million, and $ 14.8 million for the years ended December 31, 2025, 2024 and 2023, respectively.

Pension and Other Postretirement Benefits:

3 unchanged sentences

The Company recognizes stock-based compensation expense over the related vesting period of the awards based on the fair value on the grant date.

Stock options are issued with an exercise price equal to the opening market price of Timken common shares on the date of grant.

Stock options, when issued, are issued with an exercise price equal to the opening market price of Timken common shares on the date of grant.

The fair value of stock options is determined using a Black-Scholes option pricing model, which incorporates assumptions regarding the expected volatility, the expected option life, the risk-free interest rate and the expected dividend yield.

5 unchanged sentences

Diluted earnings per share are computed by dividing net income by the weighted-average number of common shares outstanding, adjusted for the dilutive impact of potential common shares for share-based compensation awards.

Note 1 - Significant Accounting Policies (continued)

Derivative Instruments:

3 unchanged sentences

The Company’s holdings of forward foreign currency exchange contracts qualify as derivatives pursuant to the criteria established in derivative accounting guidance, and the Company has designated certain of those derivatives as hedges.

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

Note 1 - Significant Accounting Policies (continued)

Cash Flow Hedging Strategy:

For certain derivative instruments that are designated and qualify as cash flow hedges ( i.e ., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the gain or loss on the derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the same line item associated with the forecasted transaction and in the same period or periods during which the hedged transaction affects earnings.

To protect against a reduction in the value of forecasted foreign currency cash flows resulting from export sales, the Company has instituted a foreign currency cash flow hedging program.

The Company hedges portions of its forecasted cash flows denominated in foreign currencies with forward contracts.

When the dollar strengthens significantly against foreign currencies, the decline in the present value of future foreign currency revenue is offset by gains in the fair value of the forward contracts designated as hedges.

Conversely, when the dollar weakens, the increase in the present value of future foreign currency cash flows is offset by losses in the fair value of the forward contracts.

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 .

Derivative Instruments not designated as Hedging Instruments:

For derivative instruments that are not designated as hedging instruments, the instruments are typically forward contracts.

In general, the practice is to reduce volatility by selectively hedging transaction exposures including intercompany loans, accounts payable and accounts receivable.

Intercompany loans between entities with different functional currencies typically are hedged with a forward contract at the inception of loan with a maturity date at the maturity of the loan.

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

Government Assistance:

From time to time, the Company receives government assistance in the form of grants and other incentives from various governments to support capital projects and other business development.

The amounts received are typically based on the amount of qualifying capital expenditures or business development costs in the countries providing the government assistance.

The Company typically has to meet certain requirements, such as adding or maintaining a specified number of qualifying positions, to retain the government assistance or the funds can be clawed back by the government.

Once the Company determines that it will meet the requirements of the government assistance, the funds are recognized over the life of the related assets or as the costs are incurred.

For amounts that are expected to be paid back, the Company recognizes applicable interest expense.

As of December 31, 2025 and 2024, the Company has recorded $ 0.6 million and $ 1.5 million, respectively, of government assistance in other current liabilities and $ 38.5 million and $ 42.2 million, respectively, in other non-current liabilities .

The Company received government assistance from the Romanian Government for the reimbursement of capital investments for its new production facility, totaling $ 16.5 million.

While the original grants were based on capital investments, the Company was required to pay various taxes, including corporate income tax, payroll taxes and building tax, totaling $ 16.6 million between 2019 and 2024.

During 2025, the Company paid $ 6.8 million, plus interest of $ 3.0 million, to the Romanian Government since it did not meet its requirement to pay various taxes.

The remaining government assistance is being recognized over the life of the related assets.

In 2022, the Company acquired Spinea, s.r.o.

Prior to the acquisition, Spinea began receiving government assistance from the Slovakian government to invest in a new production facility and related machinery and equipment.

As a result, Spinea was required to create 450 new jobs If Spinea is unable to meet these commitments, all or a portion of the incentive could be recaptured with interest by October 2027.

While the Company is hopeful that Spinea will meet it obligation to create the 450 new jobs, the Company has recorded a potential shortfall of $ 20.1 million, including interest, in other non-current liabilities.

Note 1 - Significant Accounting Policies (continued)

Use of Estimates:

4 unchanged sentences

New Accounting Guidance Adopted:

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

ASU 2023-07 requires that a public entity disclose:

(1) on an annual and interim basis, significant segment expenses that are regularly provided to the Chief Operating Decision Maker ("CODM") and included within each reported measure of segment profit or loss;

(2) on an annual and interim basis, an amount for other segment items by reportable segment and a description of its composition;

and (3) the title and position of the CODM and an explanation of how the CODM uses the reported measures of segment profit or loss in assessing segment performance and deciding how to allocate resources.

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 business entities, the new guidance is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

In December 2023, the FASB issued Accounting Standards Update ("ASU") 2023-09, Income Taxes (Topic 40).

ASU 2023-09 is intended to enhance the transparency and decision usefulness of income tax disclosures primarily related to the rate reconciliation and income taxes paid.

The amendments in this update require that public entities on an annual basis (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold.

The amendments require that all entities disclose on an annual basis the amount of income taxes paid disaggregated for federal, state, and foreign taxes and further disaggregated for specific jurisdictions to the extent the related amounts exceed a quantitative threshold.

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

The Company adopted the new guidance in the fourth quarter of 2025.

Refer to Note 4 - Segment Information in the Notes to the Consolidated Financial Statements for additional information.

Refer to Note 5 - Income Taxes for additional information.

New Accounting Guidance Issued and Not Yet Adopted:

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40).

ASU 2024-03 requires that a public entity disclose the detailed information about types of expense.

ASU 2024-03 requires that a public entity disclose detailed information about types of expense.

Specifically, a public entity would disclose the amounts of (a) purchases of inventory, (b) employee compensation, (c) depreciation and (d) intangible asset amortization included in each relevant expense caption.

A relevant expense caption is an expense caption presented on the face of the income statement within continuing operations that contains any of the expense categories listed in (a)–(d).

In addition, a public entity should include certain amounts that are already required to be disclosed under current GAAP in the same disclosure as the other disaggregation requirements.

A public entity would also disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively and disclose the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses.

For public business entities, the new guidance is effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted.

The Company is currently evaluating the impact of the new guidance.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 40).

ASU 2023-09 is intended to enhance the transparency and decision to improve the usefulness of income tax disclosures primarily related to the rate reconciliation and income taxes paid information.

The amendments in this update require that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold.

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

In addition, a public entity should include certain amounts that are already required to be disclosed under current U.S.

GAAP in the same disclosure as the other disaggregation requirements.

A public entity would also disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively and disclose the total amounts of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses.

For public entities, the new guidance is effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted.

The Company is preparing to adopt the new guidance in 2025.

Note 2 - Acquisitions and Divestitures

The new guidance should be applied either prospectively to financial statements issued after the effective date of ASU 2024-03 or retrospectively to any or all prior periods presented in the financial statements.

The Company plans to apply the new guidance prospectively upon adoption.

The adoption of ASU 2024-03 is expected to result in enhanced disclosures.

Note 2 - Acquisitions

Acquisitions:

1 unchanged sentence

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

With its concentration on medical robotics, CGI enhances the Company's product portfolio serving this attractive sector.

With its concentration on medical robotics, CGI enhances the Company's product portfolio by serving this attractive sector.

The total purchase price for this acquisition was $ 167.1 million, net of cash acquired of $ 8.9 million.

Results for CGI are reported in the Industrial Motion segment.

The Company incurred acquisition-related costs of $ 2.0 million to complete this acquisition.

Acquisition costs are recorded in selling, general and administrative expenses on the Consolidated Statements of Income.

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

On December 20, 2023, the Company completed the acquisition of 100 % of the capital stock of Lagersmit, a Netherlands-based manufacturer of highly engineered sealing solutions for marine, dredging, water, tidal energy and other industrial applications, for $ 128.2 million, net of cash acquired of $ 6.5 million.

Lagersmit employs approximately 90 people.

Results for Lagersmit are reported in the Industrial Motion segment.

On September 1, 2023, the Company acquired 100 % of the capital stock of Des-Case, a Tennessee-based manufacturer of specialty filtration products for industrial lubricants, for $ 123.2 million, net of cash acquired of $ 1.8 million.

Des-Case has manufacturing facilities in Tennessee and the Netherlands and employs approximately 120 people.

Results for Des-Case are reported in the Industrial Motion segment.

On April 4, 2023, the Company acquired 100 % of the capital stock of Nadella, a leading European manufacturer of linear guides, telescopic rails, actuators and systems and other specialized industrial motion solutions, for $ 293.5 million, net of cash acquired of $ 21.0 million.

Based in Italy, Nadella employs approximately 450 people and operates manufacturing facilities in Europe and China.

Results for Nadella are reported in the Industrial Motion segment.

On November 1, 2023, the Company acquired iMECH.

The Company acquired 100 % of the capital stock in the U.S.

and substantially all of the assets in Canada.

iMECH manufactures thrust bearings, radial bearings, specialty coatings and other components primarily used in the energy industry.

iMECH employs approximately 70 people and has facilities in Houston, Texas and Alberta, Canada.

Results for iMECH are reported in the Engineered Bearings segment.

On September 29, 2023, the Company acquired 100 % of the capital stock of Rosa, a European designer and manufacturer of roller guideways, linear bearings, customized linear systems and actuators, commercialized ball guideways and precision ball screws.

Rosa employs approximately 65 people and has its headquarters, R&D and high-precision manufacturing facility in Milan, Italy.

Results for Rosa are reported in the Industrial Motion segment.

On January 31, 2023, the Company acquired substantially all of the assets of ARB, a North Carolina-based manufacturer of industrial bearings.

ARB, which boasts a large U.S.

installed base and strong aftermarket business, operates manufacturing facilities in Hiddenite and Morganton, North Carolina.

ARB employs approximately 190 people.

Results for ARB are reported in the Engineered Bearings segment.

The total purchase price for these three acquisitions was $ 95.7 million, net of cash acquired of $ 1.4 million.

The Company incurred transaction costs of $ 6.7 million to complete the 2023 acquisitions.

Note 2 - Acquisitions and Divestitures (continued)

The purchase price allocations at fair value, net of cash acquired, for 2024 and 2023 acquisitions as of December 31, 2024 and 2023 are presented below:

The final purchase price allocation at fair value, net of cash acquired, is presented below:

Accounts receivable $ 4.2

11 unchanged sentences

Other current liabilities 1.3

Short-term debt — 4.7

Long-term debt — 6.0

Accrued pension cost — 3.6

Long-term operating lease liabilities 1.9

2 unchanged sentences

Total liabilities assumed $ 38.9

Noncontrolling interest acquired — 6.3

Net assets acquired $ 167.1

1 unchanged sentence

Working capital adjustment related to 2023 acquisitions paid in 2024 0.3

Working capital adjustment related to 2022 acquisition received in 2023 — ( 2.2 )

Cash paid for acquisitions, net of cash acquired $ 167.4

The 2023 acquisitions presented above include goodwill of $ 59.1 million and intangible assets of $ 71.9 million for Lagersmit, goodwill of $ 78.7 million and intangible assets of $ 45.1 million for Des-Case, and goodwill of $ 129.0 million and intangible assets of $ 158.9 million for Nadella.

In determining the fair value of the amounts above, the Company utilized various forms of the income, cost and market approaches depending on the asset or liability being valued.

The estimation of fair value required judgment related to future net cash flows, discount rates, competitive trends, market comparisons and other factors.

The estimation of fair value requires judgment related to future net cash flows, discount rates, competitive trends, market comparisons and other factors.

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 considering independent appraisals and historical data, supplemented by current and anticipated market conditions.

Note 2 - Acquisitions and Divestitures (continued)

The 2024 amounts in the table above represent the preliminary purchase price allocation for the CGI acquisition.

This purchase price allocation, including the residual amount allocated to goodwill, is based on preliminary information and is subject to change as additional information concerning final asset and liability valuations are obtained.

The purchase price allocation for CGI is preliminary as a result of the proximity of the acquisition date to December 31, 2024, and as a result, no elements of the purchase price allocation have been finalized.

During the applicable measurement period, the Company will adjust assets and liabilities if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in revised estimated values 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 had been completed on the acquisition date.

The following table summarizes the preliminary purchase price allocation at fair value for identifiable intangible assets acquired in 2024 and 2023:

Average Life Weighted-

Trade names (finite life) 6.1 18 years 25.6 17 years

Technology and know-how 35.3 16 years 70.5 15 years

Customer relationships 59.0 17 years 201.8 14 years

Non-competes — 1.0 3 years

Capitalized software — 0.6 2 years

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

Weighted-Average Life

Trade names (finite life) $ 6.1 18 years

Technology and know-how 35.3 16 years

Customer relationships 59.0 17 years

Total intangible assets $ 100.4

Divestitures:

During the third quarter of 2023, the Company made the decision to sell its TWB business, located in Jiangsu Province, China.

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 business exceeding the estimated sales price less costs to sell, the Company recorded an impairment charge of $ 1.0 million in 2023.

On October 16, 2023, the Company completed the divestiture of TWB.

TWB had net sales of $ 22.7 million and $ 39.3 million in 2023 and 2022, respectively.

The results of operations of TWB were reported in the Engineered Bearings segment.

The Company recorded proceeds of $ 9.0 million, net of cash divested of $ 0.7 million, on the sale of the business and reported an additional loss of $ 0.6 million in the fourth quarter of 2023.

On February 28, 2023, the Company completed the sale of its 50 % membership interests in SE Setco, a joint venture.

The Company had accounted for SE Setco as an equity method investment prior to the sale.

The Company received $ 5.7 million in proceeds for SE Setco and recognized a pretax gain of $ 4.8 million on the sale.

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

Note 3 - Revenue

The following table presents details deemed most relevant to the users of the financial statements about total revenue for the years ended December 31, 2024, 2023 and 2022:

December 31, 2024

Engineered Bearings Industrial Motion Total

United States $ 1,281.6 $ 795.3 $ 2,076.9

Americas excluding United States 383.1 102.7 485.8

Europe / Middle East / Africa 599.2 520.7 1,119.9

Asia-Pacific 770.4 120.0 890.4

Net sales $ 3,034.3 $ 1,538.7 $ 4,573.0

December 31, 2023

Engineered Bearings Industrial Motion Total

United States $ 1,266.1 $ 789.8 $ 2,055.9

Americas excluding United States 375.6 106.1 481.7

Europe / Middle East / Africa 678.6 499.7 1,178.3

Asia-Pacific 937.4 115.7 1,053.1

Net sales $ 3,257.7 $ 1,511.3 $ 4,769.0

December 31, 2022

Engineered Bearings Industrial Motion Total

United States $ 1,198.1 $ 793.9 $ 1,992.0

Americas excluding United States 383.2 93.0 476.2

Europe / Middle East / Africa 588.9 406.8 995.7

Asia-Pacific 922.4 110.4 1,032.8

Net sales $ 3,092.6 $ 1,404.1 $ 4,496.7

Net sales by geographic area are reported by the destination of net sales.

When reviewing revenues by sales channel, the Company separates net sales to OEMs from sales to distributors and end users.

The following table presents the percent of revenues by sales channel for the years ended December 31, 2024, 2023 and 2022:

Revenue by sales channel 2024 2023 2022

Original equipment manufacturers 55 % 60 % 60 %

Distribution/end users 45 % 40 % 40 %

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

During the year ended December 31, 2024, approximately 10 % of total net sales were recognized on an over-time basis compared to 9 % in 2023 and 2022.

These sales were recognized over-time due to the continuous transfer of control to the customer, with the remainder recognized as of a point in time.

Finally, business with the U.S.

government or its contractors represented approximately 7 % of total net sales in 2024, 6 % of total net sales in 2023, and 7 % of total net sales for 2022.

Note 3 - Revenue (continued)

Remaining Performance Obligations:

Remaining performance obligations represent the transaction price of orders meeting the definition of a contract for which work has not been performed and excludes unexercised contract options.

Performance obligations having a duration of more than one year are concentrated in contracts for certain products and services provided to the U.S.

government or its contractors.

The aggregate amount of the transaction price allocated to remaining performance obligations for such contracts with a duration of more than one year was approximately $ 153 million at December 31, 2024.

Unbilled Receivables:

The following table contains a rollforward of unbilled receivables for the years ended December 31, 2024 and 2023:

Beginning balance, January 1 $ 144.5 $ 103.9

Additional unbilled revenue recognized 380.5 424.1

amounts billed to customers ( 384.2 ) ( 383.5 )

Ending balance $ 140.8 $ 144.5

There were no impairment losses recorded on unbilled receivables for the years ended December 31, 2024 and 2023.

Deferred Revenue:

The following table contains a rollforward of deferred revenue for the years ended December 31, 2024 and 2023:

Beginning balance, January 1 $ 45.4 $ 54.3

Acquisitions 0.7 1.4

Revenue (cash) received in advance 153.0 165.2

revenue recognized ( 157.7 ) ( 175.5 )

Ending balance $ 41.4 $ 45.4

Note 3 - Segment Information

16 unchanged sentences

Measurement of segment profit or loss and segment assets:

The Company's CODM is the President and Chief Executive Officer.

The Company's Chief Operating Decision Maker ("CODM") is the President and Chief Executive Officer.

The primary measurement used by the CODM to measure the financial performance of each segment is adjusted EBITDA.

The Company's CODM evaluates financial performance and allocates resources based on return on capital and profitable growth.

The CODM considers actual and budget results provided on a regular basis for both segment's profit measures when making decisions about allocating capital and personnel to the segments.

The Company adopted the new disclosure requirements under ASU 2023-07, which requires that the Company disclose significant segment expenses.

The Company concluded that the significant segment expenses provided to the CODM are:

(1) cost of products sold and (2) selling, general and administrative expenses.

2023 and 2022 have been revised to align with the new presentation guidance.

The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies.

13 unchanged sentences

Impairment, restructuring and reorganization charges ( 20.7 )

Corporate pension and other postretirement benefit income 1.3

Acquisition-related charges ( 13.0 )

Tax indemnification and related items 1.1

Corporate pension and other postretirement benefit related expense ( 10.8 )

Gain on divestitures and sale of certain assets 2.6

CEO succession expenses ( 3.7 )

Property losses and related expenses ( 1.2 )

CEO transition expenses ( 20.8 )

Depreciation and amortization ( 230.1 )

14 unchanged sentences

Impairment, restructuring and reorganization charges ( 17.8 )

Corporate pension and other postretirement benefit expense ( 20.6 )

Corporate pension and other postretirement benefit income 1.3

Acquisition-related charges ( 13.0 )

Tax indemnification and related items 1.1

Gain on divestitures and sale of certain assets 14.7

CEO transition expenses ( 3.7 )

Property losses and related expenses ( 1.2 )

Depreciation and amortization ( 221.8 )

17 unchanged sentences

Acquisition-related charges ( 31.8 )

Tax indemnification and related items ( 0.3 )

Gain on divestitures and sale of certain assets 5.2

4 unchanged sentences

(1) Cost of products sold exclude acquisition-related and reorganization charges, and property losses and related expenses.

(2) Selling, general, and administrative expenses exclude acquisition-related charges.

(3) Other segments items is Other (expense) income, net and exclude gain on divestitures and sale of certain assets, and tax indemnification and

(2) Selling, general, and administrative expenses exclude acquisition-related charges and CEO transition expenses.

(3) Other segment items is Other (expense) income, net and exclude gain on divestitures and sale of certain assets, and tax indemnification and

What changed 10-K

Item 8. Financial Statements and Supplementary Data