What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-05-06 compared with 2025-10-29 · 100 added, 257 removed, 329 unchanged (52% of the section changed)

4 unchanged sentences

With more than a century of knowledge and innovation, the Company continuously improves the reliability and efficiency of global machinery and equipment to move the world forward.

The Company’s growing product and services portfolio features many strong industrial brands, such as Timken®, GGB®, Philadelphia Gear®, Cone Drive®, Rollon®, Nadella®, Diamond®, Drives®, Groeneveld®, BEKA®, Des-Case®, Lovejoy® and Lagersmit®.

Timken employs approximately 19,000 people globally in 44 countries.

10 unchanged sentences

Industrial Motion also includes industrial services, which return equipment and components to like-new condition.

The Industrial Motion portfolio features many strong brands, including Philadelphia Gear®, Cone Drive®, Spinea®, Rollon®, Nadella®, Groeneveld®, BEKA®, Des-Case®, Diamond®, Drives®, Timken® Belts, Lovejoy®, PT Tech®, Lagersmit® and CGI®.

The Industrial Motion portfolio features many strong brands, including Philadelphia Gear®, Cone Drive®, Spinea®, Rollon®, Nadella®, Groeneveld®, BEKA®, Bijur Delimon®, Des-Case®, Diamond®, Drives®, Timken® Belts, Lovejoy®, PT Tech®, Lagersmit® and CGI®.

Industrial Motion products are used across a broad range of industries, including automation, solar energy, construction, agriculture and turf, passenger rail, marine, aerospace, packaging and logistics, medical and more.

10 unchanged sentences

Operational Excellence.

Timken operates with a relentless drive for exceptional results and a passion for superior execution.

The Company embraces a continuous improvement culture that is charged with increasing efficiency, lowering costs, eliminating waste, increasing cash flow, driving organizational advancement and agility, and building greater brand equity to fuel growth.

The Company embraces a continuous improvement culture that is charged with increasing efficiency, lowering costs, reducing waste, increasing cash flow, driving organizational advancement and agility, and building greater brand equity to fuel growth.

This requires the Company’s ongoing commitment to attract, retain and develop the best talent across the world.

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As part of this framework, the Company may also restructure, reposition or divest underperforming product lines or assets.

The following items highlight some of the Company's more significant strategic accomplishments during the three months ended March 31, 2026:

• On March 18, 2026, the Company acquired the assets and related businesses of Bijur Delimon, a leading global designer and manufacturer of automated lubrication systems.

Founded in 1872, Bijur Delimon operates manufacturing locations in the United States, Europe and Asia Pacific.

The acquisition of Bijur Delimon expands the Company's position in automated lubrication systems.

• The Company paid its 415 th consecutive quarterly dividend in the first quarter.

The Company also repurchased 0.3 million common shares during the three months ended March 31, 2026.

Three Months Ended

September 30,

2026 2025 $ Change % Change

5 unchanged sentences

Average number of shares – diluted 70,204,689 70,513,937 — (0.4 %)

Nine Months Ended

September 30,

2025 2024 $ Change % Change

Net sales $ 3,470.8 $ 3,499.4 $ (28.6) (0.8 %)

Net income 251.4 300.2 (48.8) (16.3 %)

Net income attributable to noncontrolling interest 25.3 18.7 6.6 35.3 %

Net income attributable to The Timken Company $ 226.1 $ 281.5 $ (55.4) (19.7 %)

Diluted earnings per share $ 3.22 $ 3.98 $ (0.76) (19.1 %)

Average number of shares – diluted 70,233,259 70,793,086 — (0.8 %)

Net sales increased for the three months ended September 30, 2025 compared with the three months ended September 30, 2024.

The increase was primarily driven by favorable pricing, the favorable impact of foreign currency and the benefit of acquisitions, partially offset by lower end-market demand in the Industrial Motion segment.

Net sales decreased for the nine months ended September 30, 2025 compared with the nine months ended September 30, 2024.

The decrease was primarily driven by lower end-market demand in both segments and the unfavorable impact of foreign currency, partially offset by the benefit of acquisitions and favorable pricing.

Net income decreased for the three months ended September 30, 2025 compared with the three months ended September 30, 2024 primarily due to incremental tariff costs and a gain on the sale of real estate in 2024 that did not repeat in 2025, partially offset by favorable pricing.

Net income decreased for the nine months ended September 30, 2025 compared with the nine months ended September 30, 2024 primarily due to lower volume, incremental tariff costs, higher manufacturing costs, a gain on the sale of real estate in 2024 that did not repeat in 2025 and higher restructuring costs, partially offset by favorable pricing, lower tax expense, the benefit of acquisitions and lower net interest expense.

Throughout 2025, the United States government announced the imposition of import tariffs on all countries.

The baseline reciprocal tariff is 10%, with higher tariffs imposed on certain countries like China, Mexico and Canada, and sectors like steel, aluminum and automotive.

The Company is taking steps to mitigate the increased costs from incremental tariffs through pricing, surcharges and other actions.

Timken is also monitoring the impact that tariffs could have on global economic demand.

The Company currently anticipates that tariffs and the related macroeconomic effects will adversely impact operating income in 2025.

As a result, the Company expects 2025 full-year revenues to be down approximately 0.75% compared to 2024, primarily driven by lower demand across both segments, partially offset by favorable pricing, the benefit of acquisitions completed during 2024 and the favorable impact of foreign currency rate changes.

The Company's earnings are expected to be down in 2025 compared with 2024, primarily due to the impact of lower organic sales volume, unfavorable mix, incremental tariff costs and a gain on the sale of real estate in 2024 that did not repeat in 2025, offset partially by favorable pricing, lower operating costs and the favorable impact of acquisitions.

The Company expects to generate a higher amount of cash from operating activities in 2025 compared to 2024, driven by improved working capital performance and lower cash taxes, partially offset by higher pension and other postretirement benefit contributions and payments.

The Company expects capital expenditures in 2025 to be in the range of 3.5% of sales.

Net sales increased for the three months ended March 31, 2026 compared with the three months ended March 31, 2025.

The increase was primarily driven by the favorable impact of foreign currency, favorable pricing, and higher end-market demand in the Industrial Motion segment.

Net income increased for the three months ended March 31, 2026 compared with the three months ended March 31, 2025 primarily due to favorable price/mix, higher volume and the favorable impact of foreign currency exchange rates, partially offset by the incremental tariff costs, higher manufacturing costs, and higher tax expense.

The Company expects 2026 full-year revenues to be up approximately 5% compared to 2025, primarily driven by higher demand across both segments, favorable pricing, the benefit of acquisitions, and the favorable impact of foreign currency rate changes.

The Company's earnings are expected to be up in 2026 compared with 2025, primarily due to the impact of higher organic sales volume, favorable price/mix, and favorable material, partially offset by incremental tariff costs and higher manufacturing costs.

The Company expects to generate approximately $530 million of cash from operating activities in 2026 compared to $554.3 million in 2025, driven by higher working capital to support increased demand and higher cash taxes, partially offset by higher net income.

The Company expects capital expenditures in 2026 to be approximately 3.4% of sales.

Throughout 2025 and the first quarter of 2026, the United States government has announced the imposition of additional import tariffs on all countries.

The Company has been taking steps to mitigate the increased costs from incremental tariffs through pricing, surcharges and other actions.

Timken also continues to monitor the impact that tariffs could have on global economic demand.

On February 20, 2026, the United States Supreme Court issued a decision invalidating the broad-based tariffs imposed under the International Emergency Economic Powers Act (IEEPA).

On March 4, 2026, the U.S.

Court of International Trade ordered the U.S.

Customs and Border Protection (“CBP”) to process refunds of the IEEPA tariffs, although the Court immediately suspended the order while the CBP determines a refund process.

The IEEPA tariffs remain subject to ongoing litigation between the United States government and other parties.

In response to the U.S.

Supreme Court ruling mentioned above, the United States government announced plans to implement new tariffs under alternative statutory authority.

The full impact of the U.S.

Supreme Court’s ruling and the United States government’s response, including the timing and extent of any refunds and the impact of the new tariffs, remain uncertain.

THE STATEMENT OF INCOME

1 unchanged sentence

Three Months Ended

September 30,

2026 2025 $ Change Change

4 unchanged sentences

Impairment and restructuring charges 3.6 10.9 (7.3) (67.0%)

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

Operating income $ 168.6 $ 144.0 $ 24.6 17.1%

Operating income % to net sales 13.7 % 12.6 % 110 bps

Nine Months Ended

September 30,

2025 2024 $ Change Change

Net sales $ 3,470.8 $ 3,499.4 $ (28.6) (0.8%)

Cost of products sold 2,402.8 2,383.8 19.0 0.8%

Selling, general and administrative expenses 560.9 564.5 (3.6) (0.6%)

Amortization of intangible assets 59.1 58.7 0.4 0.7%

Impairment and restructuring charges 16.8 8.1 8.7 107.4%

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

Operating income $ 431.2 $ 498.1 $ (66.9) (13.4%)

Operating income % to net sales 12.4 % 14.2 % (180) bps

Net sales increased for the three months ended September 30, 2025 compared with the three months ended September 30, 2024.

The increase was driven by the favorable impact of foreign currency exchange rate changes of $12 million, the favorable impact of acquisitions of $11 million, and higher organic revenue of $7 million.

Net sales decreased for the nine months ended September 30, 2025 compared with the nine months ended September 30, 2024.

The decrease was driven by lower organic revenue of $60 million and the unfavorable impact of foreign currency exchange rate changes of $6 million, partially offset by the favorable impact of acquisitions of $38 million.

Operating income decreased for the three months ended September 30, 2025 compared with the three months ended September 30, 2024, due to incremental tariff costs and the gain on the sale of a former bearing manufacturing plant in the three months ended September 30, 2024, partially offset by favorable pricing and lower material and logistics costs.

Operating income decreased for the nine months ended September 30, 2025 compared with the nine months ended September 30, 2024, due to the impact of lower volume, incremental tariff costs, and higher manufacturing costs, partially offset by favorable pricing.

• Cost of products sold increased for the three months ended September 30, 2025 compared with the three months ended September 30, 2024, due to incremental tariff costs of $20 million, unfavorable foreign currency exchange rate changes of $12 million and the incremental cost of goods sold from acquisitions of $7 million, partially offset by favorable material and logistics costs of $8 million and the impact of lower production volume of $4 million.

Cost of products sold increased for the nine months ended September 30, 2025 compared with the nine months ended September 30, 2024, due to incremental tariff costs of $35 million, incremental cost of goods sold from acquisitions of $17 million and higher manufacturing costs of $6 million, partially offset by the impact of lower production volume of $28 million and favorable material and logistics costs of $11 million.

• Selling, general and administrative ("SG&A") expenses decreased for the three months ended September 30, 2025 compared with the three months ended September 30, 2024, primarily due to lower bad debt expense and professional services expenses, partially offset by the unfavorable impact from currency and higher CEO transition expenses.

SG&A expenses decreased for the nine months ended September 30, 2025 compared with the nine months ended September 30, 2024, due to decreased discretionary spending, reduced employee compensation and lower bad debt expense, partially offset by the impact of acquisitions and higher CEO transition expenses.

• Impairment and restructuring charges were higher for the nine months ended September 30, 2025 compared with the nine months ended September 30, 2024, primarily due to severance and other costs related to the CEO transition during the nine months ended September 30, 2025.

• Gain on sale of real estate for the three and nine months ended September 30, 2024 was due to the sale of the Company's former bearing manufacturing 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.

Net sales increased for the three months ended March 31, 2026 compared with the three months ended March 31, 2025.

The increase was driven by the favorable impact of higher organic revenue of $49 million and foreign currency exchange rate changes of $39 million.

Operating income increased for the three months ended March 31, 2026 compared with the three months ended March 31, 2025, due to favorable price/mix, higher volume, and the favorable impact of foreign currency exchange rate changes, partially offset by incremental tariff costs and higher manufacturing costs.

• Cost of products sold increased for the three months ended March 31, 2026 compared with the three months ended March 31, 2025, due to unfavorable foreign currency exchange rate changes of $28 million, incremental tariff costs of $20 million, and the impact of higher manufacturing costs of $12 million, partially offset by lower material and logistics costs of $6 million.

• Selling, general and administrative ("SG&A") expenses increased for the three months ended March 31, 2026 compared with the three months ended March 31, 2025, primarily due to the unfavorable impact from foreign currency exchange rates, higher employee compensation, and higher discretionary spending.

• Impairment and restructuring charges were lower for the three months ended March 31, 2026 compared with the three months ended March 31, 2025, primarily due to severance and other costs related to the CEO transition during the three months ended March 31, 2025.

Interest Income and Expense:

Three Months Ended

September 30,

2026 2025 $ Change % Change

2 unchanged sentences

Interest expense, net $ (22.6) $ (24.2) $ 1.6 (6.6 %)

Nine Months Ended

September 30,

2025 2024 $ Change % Change

Interest expense $ (83.6) $ (97.1) $ 13.5 (13.9 %)

Interest income 7.7 11.3 (3.6) (31.9 %)

Interest expense, net $ (75.9) $ (85.8) $ 9.9 (11.5 %)

The decrease in interest expense for the three and nine months ended September 30, 2025 compared with the three and nine months ended September 30, 2024 was primarily due to lower average debt levels and lower interest rates.

Other Income (Expense):

Three Months Ended

September 30,

2025 2024 $ Change % Change

Non-service pension and other postretirement expense $ (1.3) $ (0.9) $ (0.4) 44.4 %

Other expense, net (5.7) (6.3) 0.6 (9.5 %)

Total other expense, net $ (7.0) $ (7.2) $ 0.2 (2.8 %)

Nine Months Ended

September 30,

2025 2024 $ Change % Change

Non-service pension and other postretirement expense $ (3.7) $ (2.9) $ (0.8) 27.6 %

Other expense, net (9.4) (6.0) (3.4) 56.7 %

Total other expense, net $ (13.1) $ (8.9) $ (4.2) 47.2 %

The decrease in interest expense for the three months ended March 31, 2026 compared with the three months ended March 31, 2025 was primarily due to lower interest rates and lower average debt levels.

Income Tax Expense:

Three Months Ended

September 30,

2026 2025 $ Change Change

1 unchanged sentence

Effective tax rate 25.9 % 22.7 % 320 bps

Nine Months Ended

September 30,

2025 2024 $ Change Change

Provision for income taxes $ 90.8 $ 103.2 $ (12.4) (12.0 %)

Effective tax rate 26.5 % 25.6 % 90 bps

Income tax expense increased $8.6 million for the three months ended September 30, 2025 compared with the three months ended September 30, 2024 primarily due to the discrete impact of withholding taxes on dividend distributions in 2025.

This was partially offset by lower pre-tax earnings.

Income tax expense decreased $12.4 million for the nine months ended September 30, 2025 compared with the nine months ended September 30, 2024 primarily due to lower pre-tax earnings and a decrease in the mix of earnings in Non-U.S.

jurisdictions with relatively higher tax rates.

This was partially offset by the net unfavorable impact of discrete items in comparison to the year ago period.

On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted in the U.S.

The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act of 2017, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions.

The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through future years.

The Company has included the impact on its Consolidated Financial Statements and the impact was not material to the Company's results of operations and financial condition.

Income tax expense increased $10.1 million for the three months ended March 31, 2026 compared with the three months ended March 31, 2025 primarily due to higher pre-tax earnings and lower net favorable impact of discrete items in comparison to the year ago period.

The favorable discrete items in the prior period primarily related to the reversal of accruals for uncertain tax positions to account for the expiration of statutes of limitation in jurisdictions outside the United States.

This was partially offset by the mix of earnings in non-U.S.

jurisdictions with relatively higher tax rates and the impact of beneficial provisions effective in 2026 from the OBBBA.

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

4 unchanged sentences

The presentation of segment results below includes a reconciliation of the changes in net sales for each segment reported in accordance with U.S.

GAAP to net sales adjusted to remove the effects of the acquisitions completed in 2024 and foreign currency exchange rate changes.

GAAP to net sales adjusted to remove the effects of the acquisition completed in 2026 and foreign currency exchange rate changes.

The effects of acquisitions and foreign currency exchange rate changes on net sales are removed to allow investors and the Company to meaningfully evaluate the percentage change in net sales on a comparable basis from period to period.

The following item highlights the Company's acquisition completed in 2026:

• The Company acquired CGI, Inc.

("CGI") during the third quarter of 2024.

Results for CGI are reported in the Industrial Motion segment.

• The Company acquired Bijur Delimon during the first quarter of 2026.

Results for Bijur Delimon are reported in the Industrial Motion segment.

Engineered Bearings Segment:

Three Months Ended

September 30,

2026 2025 $ Change Change

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Three Months Ended

September 30,

2026 2025 $ Change % Change

2 unchanged sentences

Net sales, excluding the impact of currency $ 783.3 $ 760.7 $ 22.6 3.0 %

Nine Months Ended

September 30,

2025 2024 $ Change Change

Net sales $ 2,303.9 $ 2,326.6 $ (22.7) (1.0 %)

Cost of products sold (1,612.2) (1,604.9) (7.3) 0.5 %

Selling, general and administrative expenses (309.7) (314.4) 4.7 (1.5 %)

Other segment items 1.7 6.5 (4.8) (73.8 %)

Depreciation and amortization 73.1 72.2 0.9 1.2 %

Adjusted EBITDA $ 456.8 $ 486.0 $ (29.2) (6.0 %)

Adjusted EBITDA margin 19.8 % 20.9 % (110) bps

Nine Months Ended

September 30,

2025 2024 $ Change % Change

Net sales $ 2,303.9 $ 2,326.6 $ (22.7) (1.0 %)

Currency (14.3) — (14.3) NM

Net sales, excluding the impact of currency $ 2,318.2 $ 2,326.6 $ (8.4) (0.4 %)

The Engineered Bearings segment's net sales, excluding the effects of foreign currency exchange rate changes, increased $20.2 million or 2.7% in the three months ended September 30, 2025 compared with the three months ended September 30, 2024.

The increase was primarily driven by higher pricing and higher renewable energy demand.

Adjusted EBITDA for the Engineered Bearings segment increased for the three months ended September 30, 2025 by $5.8 million or 4.2% compared with the three months ended September 30, 2024, due to favorable pricing and lower material and logistics costs, partially offset by the unfavorable impact of tariffs.

• Cost of products sold increased for the three months ended September 30, 2025 compared with the three months ended September 30, 2024 due to incremental tariff costs of $17 million, unfavorable foreign currency exchange rate changes and the impact of higher production volume, partially offset by lower material and logistics costs of $11 million.

The Engineered Bearings segment's net sales, excluding the effects of foreign currency exchange rate changes, decreased $8.4 million or 0.4% in the nine months ended September 30, 2025 compared with the nine months ended September 30, 2024.

The decrease was primarily driven by lower demand across most market sectors, with the auto/truck and heavy industry sectors posting the largest declines, partially offset by higher renewable energy demand and favorable pricing.

Adjusted EBITDA for the Engineered Bearings segment decreased for the nine months ended September 30, 2025 by $29.2 million or 6.0% compared with the nine months ended September 30, 2024, due to the unfavorable impact of tariffs, lower volume, unfavorable foreign currency exchange rate changes, and higher manufacturing costs, partially offset by lower material and logistics costs and favorable pricing.

• Cost of products sold increased for the nine months ended September 30, 2025 compared with the nine months ended September 30, 2024 due to incremental tariff costs of $29 million, partially offset by lower material and logistics costs of $15 million and the impact of favorable foreign currency exchange rate changes of $6 million.

• SG&A expenses decreased for the nine months ended September 30, 2025 compared with the nine months ended September 30, 2024 driven primarily by reduced discretionary spending.

The Engineered Bearings segment's net sales, excluding the effects of foreign currency exchange rate changes, increased $22.6 million or 3.0% in the three months ended March 31, 2026 compared with the three months ended March 31, 2025.

The increase was primarily driven by higher pricing.

Adjusted EBITDA for the Engineered Bearings segment decreased slightly for the three months ended March 31, 2026 by $0.2 million or 0.1% compared with the three months ended March 31, 2025, due to the unfavorable impact of tariffs and higher operating costs, offset by favorable price/mix.

• Cost of products sold increased for the three months ended March 31, 2026 compared with the three months ended March 31, 2025 due to unfavorable foreign currency exchange rate changes of $17 million, incremental tariff costs of $16 million, and higher operating costs of $12 million, partially offset by lower material and logistics costs of $5 million.

• SG&A expenses increased for the three months ended March 31, 2026 compared with the three months ended March 31, 2025 primarily due to higher compensation expense and the unfavorable impact of foreign currency exchange rates.

Industrial Motion Segment:

Three Months Ended

September 30,

2026 2025 $ Change Change

2 unchanged sentences

Selling, general and administrative expenses (72.6) (68.0) (4.6) 6.8 %

Other segment items (0.2) (0.3) 0.1 (33.3 %)

Other segment items (0.1) — (0.1) NM

Depreciation and amortization 12.8 12.1 0.7 5.8 %

2 unchanged sentences

Three Months Ended

September 30,

2026 2025 $ Change % Change

4 unchanged sentences

and currency $ 406.3 $ 379.6 $ 26.7 7.0 %

Nine Months Ended

September 30,

2025 2024 $ Change Change

Net sales $ 1,166.9 $ 1,172.8 $ (5.9) (0.5 %)

Cost of products sold (785.2) (765.2) (20.0) 2.6 %

Selling, general and administrative expenses (204.6) (204.0) (0.6) 0.3 %

Other segment items (0.2) (0.3) 0.1 (33.3 %)

Depreciation and amortization 37.3 32.7 4.6 14.1 %

Adjusted EBITDA $ 214.2 $ 236.0 $ (21.8) (9.2 %)

Adjusted EBITDA margin 18.4 % 20.1 % (170) bps

Nine Months Ended

September 30,

2025 2024 $ Change % Change

Net sales $ 1,166.9 $ 1,172.8 $ (5.9) (0.5 %)

Acquisitions 37.6 — 37.6 NM

Currency 8.0 — 8.0 NM

Net sales, excluding the impact of acquisitions

and currency $ 1,121.3 $ 1,172.8 $ (51.5) (4.4 %)

The Industrial Motion segment's net sales, excluding the effects of acquisitions and foreign currency exchange rate changes, decreased $13.4 million or 3.5% in the three months ended September 30, 2025 compared with the three months ended September 30, 2024.

The decrease reflects lower demand, driven primarily by lower renewable energy and industrial services demand, partially offset by higher pricing.

Adjusted EBITDA increased $0.3 million or 0.4% for the three months ended September 30, 2025 compared with the three months ended September 30, 2024.

Favorable price/mix, lower SG&A expenses, and the benefit of acquisitions were partially offset by lower volume and incremental tariff costs.

• Cost of products sold increased for the three months ended September 30, 2025 compared with the three months ended September 30, 2024 due to the incremental cost of goods sold from acquisitions of $8 million, unfavorable foreign currency exchange rate changes of $5 million, higher material and logistics costs and incremental tariff costs, partially offset by the impact of lower production volume of $9 million.

• SG&A expenses decreased for the three months ended September 30, 2025 compared with the three months ended September 30, 2024 primarily due to reduced bad debt expense.

The Industrial Motion segment's net sales, excluding the effects of acquisitions and foreign currency exchange rate changes, decreased $51.5 million or 4.4% in the nine months ended September 30, 2025 compared with the nine months ended September 30, 2024.

The decrease reflects lower demand across most platforms, with industrial services, belts and chain, and lubrication systems experiencing the largest declines.

Adjusted EBITDA decreased $21.8 million or 9.2% for the nine months ended September 30, 2025 compared with the nine months ended September 30, 2024 due to the impact of lower volume, higher manufacturing costs, and the incremental costs of tariffs, partially offset by favorable pricing and the benefit of acquisitions.

• Cost of products sold increased for the nine months ended September 30, 2025 compared with the nine months ended September 30, 2024 due to the incremental cost of goods sold from acquisitions of $25 million, unfavorable foreign currency exchange rate changes of $6 million, incremental tariff costs of $6 million, higher manufacturing costs of $5 million and higher material and logistics cost (net), partially offset by the impact of lower production volume of $26 million.

The Industrial Motion segment's net sales, excluding the effects of acquisitions and foreign currency exchange rate changes, increased $26.7 million or 7.0% in the three months ended March 31, 2026 compared with the three months ended March 31, 2025.

The increase reflects higher demand across most sectors and higher pricing.

Adjusted EBITDA increased $24.2 million or 36.1% for the three months ended March 31, 2026 compared with the three months ended March 31, 2025.

Favorable price/mix and higher volume were partially offset by incremental tariff costs.

• Cost of products sold increased for the three months ended March 31, 2026 compared with the three months ended March 31, 2025 due to the unfavorable foreign currency exchange rate changes of $12 million and incremental tariff costs.

• SG&A expenses increased for the three months ended March 31, 2026 compared with the three months ended March 31, 2025 primarily due to the unfavorable impact of foreign currency exchange rates.

Unallocated Corporate

Three Months Ended

September 30,

2026 2025 $ Change Change

1 unchanged sentence

Unallocated corporate expense % to net sales (1.6 %) (1.6 %) — bps

Nine Months Ended

September 30,

2025 2024 $ Change Change

Unallocated corporate expense $ (53.0) $ (55.4) $ 2.4 (4.3 %)

Unallocated corporate expense % to net sales (1.5 %) (1.6 %) 10 bps

Unallocated corporate expense decreased for the three and nine months ended September 30, 2025 compared with the three and nine months ended September 30, 2024 primarily due to lower foreign currency exchange losses and reduced corporate compensation expenses, partially offset by higher charitable donations.

Nine Months Ended

September 30,

Unallocated corporate expense increased for the three months ended March 31, 2026 compared with the three months ended March 31, 2025 primarily due to higher discretionary spending.

Three Months Ended

2026 2025 $ Change

1 unchanged sentence

Net cash used in investing activities (157.0) (32.5) (124.5)

Net cash used in financing activities (206.8) (54.2) (152.6)

Net cash provided by (used in) financing activities 102.1 (30.6) 132.7

Effect of exchange rate changes on cash (4.3) 7.4 (11.7)

Increase (decrease) in cash and cash equivalents

(Decrease) increase in cash and cash equivalents

and restricted cash $ (19.9) $ 2.9 $ (22.8)

Op erating Activities:

The increase in net cash provided by operating activities for the first nine months of 2025 compared with the first nine months of 2024 was primarily due to the favorable impact of working capital items of $99.1 million and the favorable impact of income taxes on cash of $10.9 million, partially offset by a decrease in net income of $48.8 million.

The decrease in net cash provided by operating activities for the first three months of 2026 compared with the first three months of 2025 was primarily due to the unfavorable impact of working capital items of $61.4 million, partially offset by an increase in net income of $14.5 million, lower pension contributions of $13.0 million and the favorable impact of income taxes on cash of $12.5 million.

Refer to the tables below for additional detail of the impact of each line item on net cash provided by operating activities.

The following table displays the impact of working capital items on cash during the first nine months of 2025 and 2024:

Nine Months Ended

September 30,

The following table displays the impact of working capital items on cash during the first three months of 2026 and 2025:

Three Months Ended

2026 2025 $ Change

6 unchanged sentences

Cash used in working capital items $ (130.9) $ (69.5) $ (61.4)

The following table displays the impact of income taxes on cash during the first nine months of 2025 and 2024:

Nine Months Ended

September 30,

The following table displays the impact of income taxes on cash during the first three months of 2026 and 2025:

Three Months Ended

2026 2025 $ Change

4 unchanged sentences

Investing Activities:

The decrease in net cash used in investing activities for the first nine months of 2025 compared with the first nine months of 2024 was due to a decrease in cash used for acquisitions of $167.7 million, partially offset by an increase in cash used for the net increase in short-term marketable securities of $20.7 million.

The increase in net cash used in investing activities for the first three months of 2026 compared with the first three months of 2025 was due to an increase in cash used for acquisitions of $124.3 million.

Financing Activities:

The change in net cash used in financing activities for the first nine months of 2025 compared with the first nine months of 2024 was due to proceeds received from the sale of shares of TIL in 2024 of $232.3 million that did not repeat in 2025, as well as an increase in the purchase of treasury shares of $14.3 million and an increase in dividends paid to non-controlling shareholders of $13.9 million, partially offset by the favorable change in net debt borrowings/payments of $107.2 million.

The change in net cash provided by (used in) financing activities for the first three months of 2026 compared with the first three months of 2025 was due to the favorable change in net debt borrowings/payments of $134.9 million, partially offset by an increase in the purchase of treasury shares of $4.9 million.

LIQUIDITY AND CAPITAL RESOURCES

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

September 30,

2026 December 31,

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Ratio of Net Debt to Capital:

September 30,

2026 December 31,

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

At September 30, 2025, the Company had strong liquidity with $449.1 million of cash and cash equivalents on the Consolidated Balance Sheet, as well as $850.0 million available under committed credit lines.

At March 31, 2026, the Company had strong liquidity with $344.7 million of cash and cash equivalents on the Consolidated Balance Sheet, as well as $670.3 million available under committed credit lines.

Of the $344.7 million of cash and cash equivalents, $320.2 million resided in jurisdictions outside the United States.

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dollar borrowings.

At September 30, 2025, the Company had no outstanding borrowings under the Senior Credit Facility.

At March 31, 2026, the Company had $79.7 million of outstanding borrowings under the Senior Credit Facility.

The Credit Agreement has two defined financial covenants:

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The maximum consolidated net leverage ratio permitted under the Senior Credit Facility is 3.5 to 1.0.

As of September 30, 2025, the Company's consolidated net leverage ratio was 2.13 to 1.0.

As of March 31, 2026, the Company's consolidated net leverage ratio was 2.15 to 1.0.

The minimum consolidated interest coverage ratio permitted under the Senior Credit Facility is 3.0 to 1.0.

As of September 30, 2025, the Company's consolidated interest coverage ratio was 7.76 to 1.0.

As of March 31, 2026, the Company's consolidated interest coverage ratio was 8.18 to 1.0.

The interest rate under the Senior Credit Facility is variable with a spread based on the Company's debt rating.

There were no USD or Euro borrowings during the quarter.

The average rate on outstanding U.S.

dollar borrowings was 4.78% and the average rate on outstanding Euro borrowings was 2.94% as of March 31, 2026.

In addition, the Company pays a facility fee based on the applicable rate, which is variable with a spread based on the Company's debt rating, multiplied by the aggregate commitments of all of the lenders under the Senior Credit Facility.

As of September 30, 2025, the Company carried investment-grade credit ratings with both Moody's (Baa2) and S&P Global (BBB-).

As of March 31, 2026, the Company carried investment-grade credit ratings with both Moody's (Baa2) and S&P Global (BBB-).

The Company has a $100 million Accounts Receivable Facility, which matures on November 30, 2028.

The Accounts Receivable Facility is subject to certain borrowing base limitations and is secured by certain domestic trade accounts receivable of the Company.

The Accounts Receivable Facility had no borrowing base limitations at September 30, 2025, and the Company had no outstanding borrowings.

As of March 31, 2026, the Company had $100 million of outstanding borrowings under the Accounts Receivable Facility, which reduced the availability to zero.

Other sources of liquidity include uncommitted short-term lines of credit for certain of the Company's foreign subsidiaries, which currently provide for borrowings of up to $250.5 million.

At September 30, 2025, the Company had borrowings outstanding of $12.0 million and bank guarantees of $5.1 million, which reduced the aggregate availability under these facilities to $229.1 million.

On May 23, 2024, the Company issued the 2034 Notes in the aggregate principal amount of €600 million with an interest rate of 4.13%, maturing on May 23, 2034.

Proceeds from the 2034 Notes were used for the redemption of the 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 the issuance.

At September 30, 2025, the Company was in full compliance with all applicable covenants on its outstanding debt.

The Company expects capital expenditures in 2025 to be in the range of 3.5% of sales.

At March 31, 2026, the Company had borrowings outstanding of $28.8 million and bank guarantees of $5.8 million, which reduced the aggregate availability under these facilities to $215.9 million.

At March 31, 2026, the Company was in full compliance with all applicable covenants on its outstanding debt.

The Company expects capital expenditures in 2026 to be approximately 3.4% of sales.

Financing Obligations and Other Commitments:

During the first nine months of 2025, the Company made cash contributions and payments of $33.7 million to its global defined benefit pension plans and $1.4 million to its other postretirement benefit plans.

During the first three months of 2026, the Company made cash contributions and payments of $10.4 million to its global defined benefit pension plans and $0.4 million to its other postretirement benefit plans.

In 2026, the Company expects to make contributions to its global defined benefit pension plans of approximately $32 million and to make payments of approximately $3 million to its other postretirement benefit plans.

Excluding actuarial gains and losses, the Company expects higher pension and other postretirement benefits expense in 2025 compared to 2024 primarily due to lower expected returns on pension plan assets and higher interest expense.

Excluding actuarial gains and losses, the Company expects lower pension and other postretirement benefits expense in 2026 compared to 2025 primarily due to higher expected returns on pension plan assets and lower interest expense.

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

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The Company reviews its critical accounting policies throughout the year.

The Company has concluded that there have been no significant changes to its critical accounting policies or estimates, as described in its Annual Report on Form 10-K for the year ended December 31, 2024, during the nine months ended September 30, 2025.

OTHER MATTERS

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

For the nine months ended September 30, 2025, the Company recorded positive foreign currency translation adjustments of $199.7 million that increased shareholders' equity, compared with negative foreign currency translation adjustments of $0.2 million that decreased shareholders' equity for the nine months ended September 30, 2024.

The foreign currency translation adjustments for the nine months ended September 30, 2025 were impacted by the weakening of the U.S.

dollar relative to other foreign currencies, including the Euro, the Chinese Renminbi, the Mexican Peso and the Romanian Leu.

Foreign currency exchange gains and losses, net of hedging activity, resulting from transactions included in the Company's operating results for the three months ended September 30, 2025 totaled $4.9 million of net losses, compared with $6.3 million of net losses during the three months ended September 30, 2024.

Foreign currency exchange gains and losses, net of hedging activity, resulting from transactions included in the Company's operating results for the nine months ended September 30, 2025 totaled $8.1 million of net losses, compared with $9.9 million of net losses during the nine months ended September 30, 2024.

For the three months ended March 31, 2026, the Company recorded negative foreign currency translation adjustments of $21.9 million that decreased shareholders' equity, compared with positive foreign currency translation adjustments of $66.5 million that increased shareholders' equity for the three months ended March 31, 2025.

The foreign currency translation adjustments for the three months ended March 31, 2026 were impacted by the weakening of the U.S.

dollar relative to other foreign currencies, including the Euro and the Indian Rupee, partially offset by strengthening against the Chinese Yuan.

Foreign currency exchange gains and losses, net of hedging activity, resulting from transactions included in the Company's operating results for the three months ended March 31, 2026 totaled $3.3 million of net losses, compared with $1.1 million of net gains during the three months ended March 31, 2025.

CEO Transition:

On September 5, 2024, the Company's Board appointed Tarak B.

Mehta President and CEO and appointed Richard G.

Kyle Advisor to the CEO.

Mehta succeeded Mr.

Kyle, who had served as Timken’s President and CEO since 2014.

On March 31, 2025, Timken announced that the Company and Mr.

Mehta had mutually agreed that Mr.

On March 31, 2025, Timken announced that the Company and Tarak B.

Mehta, the former President and CEO, had mutually agreed that Mr.

Mehta would depart from the Company, including resigning as a member of the Company’s Board, effective immediately.

The Company also announced that the Board had appointed Mr.

The Company also announced that the Board had appointed Richard G.

Kyle as the interim President and CEO of the Company.

On September 1, 2025, the Company's Board appointed Lucian Boldea President and CEO and appointed Mr.

Kyle Advisor to the CEO.

During the three months ended March 31, 2025, the Company recorded severance of $9.3 million, plus related taxes, for Mr.

Mehta's settlement arrangement and release of claims for his termination without cause.

Approximately two-thirds of this amount is expected to be paid in 2025, with the remaining amounts paid in 2026 and 2027.

In addition, the Company recorded incremental stock compensation expense related to stock compensation awards issued to Mr.

Kyle during the nine months ended September 30, 2025, as well as other one-time costs associated with the transition in 2025.

$7.3 million of this amount was paid in 2025 and 2026, with the remaining amount to be paid in 2027.

NON-GAAP MEASURES

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Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Net Sales $ 1,231.3 $ 1,140.3

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Impairment, restructuring and reorganization charges (1)

4.8 3.4 13.0 12.8

Acquisition-related charges (2)

Gain on sale of certain assets (3)

(0.5) (13.8) (1.8) (14.7)

CEO transition expenses (4)

6.7 1.5 18.5 2.7

Property losses and related expenses (5)

Noncontrolling interest of above adjustments (0.1) 3.8

Provision for income taxes (7)

(4.3) (9.5) (25.6) (24.8)

Adjusted Net Income $ 117.3 $ 98.6

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Depreciation and amortization expense (5)

58.3 55.8 170.2 164.7

Acquisition intangible amortization 20.6 19.0

Noncontrolling interest (6)

— (0.1) 4.8 (0.2)

Provision for income taxes (7)

(4.3) (9.5) (25.6) (24.8)

Adjusted EBITDA $ 231.0 $ 208.1

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(3) Represents the net gain resulting from the sale of certain assets.

Gain on sale of certain assets for the third quarter 2024 included a $13.8 million gain related to the sale of the Gaffney, South Carolina plant .

(4) On August 22, 2025, the Company announced the appointment of Lucian Boldea as President and CEO, effective September 1, 2025, and that Richard G.

Kyle would retire from the role of interim President and CEO.

(4) On March 31, 2025, the Company announced that Tarak B.

Mehta, President and CEO of the Company would be departing from the Company, effective immediately, and Mr.

Mehta, President and CEO of the Company would be departing from the Company, effective immediately, and Richard G.

Kyle would be serving as interim President and CEO.

CEO transition expenses primarily relate to the cost of the settlement agreement with Mr.

Mehta in connection with his departure, net of the impact for stock awards forfeited, the acceleration of certain stock compensation awards issued to Mr.

Kyle, and other one-time costs associated with the transition in 2025.

During 2024, the Company announced that Mr.

Kyle, President and CEO of the Company would be retiring from his position as CEO as of February 15, 2025, and that Mr.

Mehta would be appointed President and CEO on September 5, 2024.

CEO transition expenses for 2024 relate to the acceleration of certain stock compensation awards for Mr.

Kyle and other one-time costs associated with the transition in 2024.

(5) Represents property loss and related expenses incurred during the periods presented resulting from property loss that occurred during the second quarter of 2024 at one of the Company's plants in Slovakia.

CEO transition expenses primarily related to the cost of the settlement agreement with Mr.

Mehta in connection with his departure, net of stock compensation expense for stock awards forfeited.

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

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Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Diluted earnings per share (EPS) $ 1.40 $ 1.11

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Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Net cash provided by operating activities $ 39.3 $ 58.6

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The Company presents net debt to adjusted EBITDA because it believes it is more representative of the Company's financial position as it is reflective of the Company's ability to cover its net debt obligations with results from its core operations.

Net income for the trailing twelve months ended September 30, 2025 and December 31, 2024 was $326.5 million and $375.3 million, respectively.

Net debt to adjusted EBITDA for the trailing twelve months was 2.1 and 2.0 at September 30, 2025 and December 31, 2024, respectively.

Net income for the trailing twelve months ended March 31, 2026 and December 31, 2025 was $331.8 million and $317.3 million, respectively.

Net debt to adjusted EBITDA for the trailing twelve months was 2.1 and 2.0 at March 31, 2026 and December 31, 2025, respectively.

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

Twelve Months Ended

September 30,

2026 December 31,

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$ 22.4 $ 20.7

Corporate pension and other postretirement benefit related income (2)

Corporate pension and other postretirement benefit related expense (2)

Acquisition-related charges (3)

Gain on sale of certain assets (4)

Property losses and related expenses (5)

CEO transition expenses (5)

Tax indemnification and related items (1.1) (1.1)

Total adjustments 45.8 49.7

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However, management believes these actions are not representative of the Company’s core operations.

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

The Company recognizes actuarial gains and losses in connection with the annual remeasurement in the fourth quarter, or if specific events trigger a remeasurement.

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

The Company recognizes actuarial losses in connection with the annual remeasurement in the fourth quarter, or if specific events trigger a remeasurement.

(3) Acquisition-related charges represent deal-related expenses associated with completed transactions and any resulting inventory step-up impact.

(4) Represents the net gain resulting from sale of certain assets.

Gain on sale of certain assets for the third quarter of 2024 included a $13.8 million gain related to the sale of the Gaffney, South Carolina plant.

(4) Represents the net gain resulting from the sale of certain assets.

(5) On August 22, 2025, the Company announced the appointment of Lucian Boldea as President and CEO, effective September 1, 2025, and that Richard G.

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Kyle would be serving as interim President and CEO.

CEO transition expenses for the twelve months ended September 30, 2025, primarily relate to the cost of the settlement agreement with Mr.

CEO transition expenses for the twelve months ended December 31, 2025, primarily relate to the cost of the settlement agreement with Mr.

Mehta in connection with his departure, net of the impact for stock awards forfeited, the acceleration of certain stock compensation awards issued to Mr.

Kyle, and other one-time costs associated with the transition in 2025.

During 2024, the Company announced that Mr.

Kyle, President and CEO of the Company would be retiring from his position as CEO as of February 15, 2025, and that Mr.

Mehta would be appointed President and CEO on September 5, 2024.

CEO transition expenses for 2024 relate to the acceleration of certain stock compensation awards for Mr.

Kyle and other one-time costs associated with the transition in 2024.

FORWARD-LOOKING STATEMENTS

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This includes:

the ability of the Company to respond to rapid changes in customer demand, disruptions to the Company's supply chain, the effects of customer or supplier bankruptcies or liquidations, the impact of changes in industrial business cycles, the ability of the Company to effectively adjust the prices for its products in response to changing dynamics, the effects of distributor inventory corrections reflecting de-stocking of the supply chain and whether conditions of fair trade continue in the Company's markets;

the ability of the Company to respond to rapid changes in customer demand, disruptions to the Company's supply chain, the effects of customer or supplier bankruptcies or liquidations, the impact of changes in industrial business cycles, the ability of the Company to effectively adjust the prices for its products in response to changing dynamics, the effects of distributor inventory corrections reflecting de-stocking of the supply chain, changes in customer preferences due to emergent technologies, evolving regulatory landscapes or other factors, and whether conditions of fair trade continue in the Company's markets;

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

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the effects of unplanned plant shutdowns;

costs associated with inclement weather events;

the effects of government-imposed restrictions, commercial requirements and Company goals associated with climate change and emissions or other sustainability initiatives;

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis