What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-08-04 compared with 2026-05-06 · 202 added, 81 removed, 348 unchanged (45% of the section changed)

17 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®, 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.

19 unchanged sentences

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:

The following items highlight some of the Company's more significant strategic accomplishments during the three and six months ended June 30, 2026:

• On April 29, 2026, the Company entered into a definitive agreement to sell certain assets of its belts business to Gates.

The transaction, which is subject to customary closing conditions, is expected to close in the third quarter of 2026.

Operating results of the belts business are included in the Industrial Motion segment.

• 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.

Founded in 1872, Bijur Delimon operates manufacturing locations in the U.S., Europe and Asia Pacific.

The acquisition of Bijur Delimon expands the Company's position in automated lubrication systems and operating results for the business are included in the Industrial Motion segment.

• The Company increased its quarterly dividend by 3% and paid its 416 th consecutive quarterly dividend on May 29, 2026.

The Company also repurchased 437,000 common shares during the six months ended June 30, 2026.

Three Months Ended

6 unchanged sentences

Average number of shares – diluted 70,090,431 70,075,084 — — %

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.

Six Months Ended

2026 2025 $ Change % Change

Net sales $ 2,492.2 $ 2,313.7 $ 178.5 7.7 %

Net income 143.1 177.1 (34.0) (19.2 %)

Net income attributable to noncontrolling interest 16.0 20.3 (4.3) (21.2 %)

Net income attributable to The Timken Company $ 127.1 $ 156.8 $ (29.7) (18.9 %)

Diluted earnings per share $ 1.81 $ 2.23 $ (0.42) (18.8 %)

Average number of shares – diluted 70,152,767 70,283,847 — (0.2 %)

Net sales increased for the three months ended June 30, 2026 compared with the three months ended June 30, 2025.

The increase was primarily driven by higher volume in both segments, the benefit of acquisitions, the favorable impact of foreign currency and favorable pricing.

Net sales increased for the six months ended June 30, 2026 compared with the six months ended June 30, 2025.

The increase was primarily driven by the favorable impact of higher end-market demand across both segments, foreign currency, favorable pricing and the benefit of acquisitions.

Net income decreased for the three months ended June 30, 2026 compared with the three months ended June 30, 2025 primarily due to higher impairment charges and higher SG&A expense, partially offset by favorable price/mix, higher volume, lower tax expense, and the favorable impact of International Emergency Economic Powers Act (“IEEPA”) tariff refunds.

Net income decreased for the six months ended June 30, 2026 compared with the six months ended June 30, 2025 primarily due to higher impairment charges, incremental tariff costs, higher SG&A expense and higher manufacturing costs, partially offset by favorable price/mix, higher volume and the favorable impact of foreign currency exchange rates.

The Company expects 2026 full-year revenues to be up approximately 5% to 6% 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 down slightly in 2026 compared with 2025 due to higher impairment charges, mostly offset by the impact of higher organic sales volume and favorable price/mix.

The Company expects to generate a comparable amount of cash from operating activities, with $550 million in 2026 compared to $554.3 million in 2025.

The Company expects capital expenditures in 2026 to be approximately 3.3% 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

6 unchanged sentences

Amortization of intangible assets 20.7 19.9 0.8 4.0%

Impairment and restructuring charges 87.9 2.9 85.0 NM

Operating income $ 84.8 $ 147.8 $ (63.0) (42.6%)

Operating income % to net sales 6.7 % 12.6 % (590) bps

Six Months Ended

2026 2025 $ Change Change

Net sales $ 2,492.2 $ 2,313.7 $ 178.5 7.7%

Cost of products sold 1,698.9 1,594.7 104.2 6.5%

Selling, general and administrative expenses 407.1 374.5 32.6 8.7%

Amortization of intangible assets 41.3 38.9 2.4 6.2%

Impairment and restructuring charges 91.5 13.8 77.7 563.0%

1 unchanged sentence

Operating income % to net sales 10.2 % 12.6 % (240) bps

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.

Net sales increased for the three months ended June 30, 2026 compared with the three months ended June 30, 2025.

The increase was driven by the favorable impact of higher organic revenue of $52 million, the benefit of acquisitions of $21 million and foreign currency exchange rate changes of $15 million.

Net sales increased for the six months ended June 30, 2026 compared with the six months ended June 30, 2025.

The increase was driven by the favorable impact of higher organic revenue of $101 million, foreign currency exchange rate changes of $54 million, and the benefit of acquisitions of $24 million.

Operating income decreased for the three months ended June 30, 2026 compared with the three months ended June 30, 2025, due to higher impairment charges, higher SG&A expense, and higher manufacturing costs, partially offset by favorable price/mix, higher volume and IEEPA tariff refunds.

Operating income decreased for the six months ended June 30, 2026 compared with the six months ended June 30, 2025, due to higher impairment charges, incremental tariff costs, higher SG&A expense and higher manufacturing costs, partially offset by favorable price/mix, higher volume, favorable impact of foreign currency exchange rates and IEEPA tariff refunds.

• Cost of products sold increased for the three months ended June 30, 2026 compared with the three months ended June 30, 2025, primarily due to the incremental cost of goods sold from acquisitions of $16 million, higher volume of $11 million, an inventory adjustment of $10 million related to the belts business and unfavorable foreign currency exchange rate changes of $10 million.

Cost of products sold increased for the six months ended June 30, 2026 compared with the six months ended June 30, 2025, due to unfavorable foreign currency exchange rate changes of $38 million, the incremental cost of goods sold from acquisitions of $18 million, the impact of higher manufacturing costs of $16 million, incremental tariff costs, net of IEEPA tariff refunds, of $14 million, higher volume of $11 million and an inventory adjustment of $10 million related to belts business.

• SG&A expenses increased for the three months ended June 30, 2026 compared with the three months ended June 30, 2025, primarily due to higher employee compensation, the impact of acquisitions, higher discretionary spending and the unfavorable impact from foreign currency exchange rates.

SG&A expenses increased for the six months ended June 30, 2026 compared with the six months ended June 30, 2025, primarily due to the unfavorable impact from foreign currency exchange rates, higher employee compensation, the impact of acquisitions and higher discretionary spending.

• Impairment and restructuring charges were higher for the three and six months ended June 30, 2026 compared with the three and six months ended June 30, 2025, primarily due to impairment charges for certain assets related to the planned belts divestiture recorded during the three months ended June 30, 2026.

Interest Income and Expense:

4 unchanged sentences

Interest expense, net $ (23.7) $ (26.8) $ 3.1 (11.6 %)

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.

Six Months Ended

2026 2025 $ Change % Change

Interest expense $ (50.5) $ (56.3) $ 5.8 (10.3 %)

Interest income 4.2 5.3 (1.1) (20.8 %)

Interest expense, net $ (46.3) $ (51.0) $ 4.7 (9.2 %)

The decrease in interest expense for the three and six months ended June 30, 2026 compared with the three and six months ended June 30, 2025 was primarily due to lower interest rates and lower average debt levels.

Income Tax Expense:

3 unchanged sentences

Effective tax rate 35.8 % 26.4 % 940 bps

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.

Six Months Ended

2026 2025 $ Change Change

Provision for income taxes $ 57.7 $ 57.6 $ 0.1 0.2 %

Effective tax rate 28.7 % 24.5 % 420 bps

Income tax expense decreased $10.0 million for the three months ended June 30, 2026 compared with the three months ended June 30, 2025 primarily due to lower pre-tax earnings as a result of the agreement to sell certain assets of the belts business and the impact of beneficial provisions effective in 2026 from the OBBBA.

This increase was partially offset by favorable discrete items recognized in the prior period related to the reversal of accruals for uncertain tax positions to account for the expiration of statutes of limitation in jurisdictions outside of the U.S.

Income tax expense increased by $0.1 million for the six months ended June 30, 2026 compared with the six months ended June 30, 2025 primarily due to favorable discrete items recognized in the prior period related to the reversal of accruals for uncertain tax positions to account for the expiration of statutes of limitation in jurisdictions outside of U.S.

This increase was mostly offset by lower pre-tax earnings as a result of the agreement to sell certain assets of the belts business 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.

6 unchanged sentences

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

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

15 unchanged sentences

Net sales, excluding the impact of currency $ 797.2 $ 777.4 $ 19.8 2.5 %

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.

Six Months Ended

2026 2025 $ Change Change

Net sales $ 1,613.2 $ 1,538.1 $ 75.1 4.9 %

Cost of products sold (1,124.0) (1,069.3) (54.7) 5.1 %

Selling, general and administrative expenses (220.4) (205.7) (14.7) 7.1 %

Other segment items 1.8 1.5 0.3 20.0 %

Depreciation and amortization 49.7 48.0 1.7 3.5 %

Adjusted EBITDA $ 320.3 $ 312.6 $ 7.7 2.5 %

Adjusted EBITDA margin 19.9 % 20.3 % (40) bps

Six Months Ended

2026 2025 $ Change % Change

Net sales $ 1,613.2 $ 1,538.1 $ 75.1 4.9 %

Currency 32.7 — 32.7 NM

Net sales, excluding the impact of currency $ 1,580.5 $ 1,538.1 $ 42.4 2.8 %

The Engineered Bearings segment's net sales, excluding the effects of foreign currency exchange rate changes, increased $19.8 million or 2.5% in the three months ended June 30, 2026 compared with the three months ended June 30, 2025.

The increase was primarily driven by higher volume across most sectors and higher pricing.

Adjusted EBITDA for the Engineered Bearings segment increased for the three months ended June 30, 2026 by $7.9 million or 5.1% compared with the three months ended June 30, 2025, due to favorable price/mix and higher volume, partially offset by higher SG&A expense and higher manufacturing costs.

• Cost of products sold increased for the three months ended June 30, 2026 compared with the three months ended June 30, 2025 due to higher volume of $7 million, unfavorable foreign currency exchange rate changes of $5 million and higher operating costs of $5 million.

• SG&A expenses increased for the three months ended June 30, 2026 compared with the three months ended June 30, 2025 primarily due to higher compensation expense and higher discretionary spending.

The Engineered Bearings segment's net sales, excluding the effects of foreign currency exchange rate changes, increased $42.4 million or 2.8% in the six months ended June 30, 2026 compared with the six months ended June 30, 2025.

The increase was primarily driven by higher pricing and higher volume.

Adjusted EBITDA for the Engineered Bearings segment increased for the six months ended June 30, 2026 by $7.7 million or 2.5% compared with the three months ended June 30, 2025, due to favorable price/mix, partially offset by incremental tariff costs, net of IEEPA tariff refunds, and higher operating costs.

• Cost of products sold increased for the six months ended June 30, 2026 compared with the six months ended June 30, 2025 due to unfavorable foreign currency exchange rate changes of $22 million, higher operating costs of $17 million and incremental tariff costs, net of IEEPA tariff refunds, of $13 million.

• SG&A expenses increased for the six months ended June 30, 2026 compared with the six months ended June 30, 2025 primarily due to higher compensation expense and the unfavorable impact of foreign currency exchange rates.

Industrial Motion Segment:

15 unchanged sentences

and currency $ 428.0 $ 396.0 $ 32.0 8.1 %

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.

Six Months Ended

2026 2025 $ Change Change

Net sales $ 879.0 $ 775.6 $ 103.4 13.3 %

Cost of products sold (558.6) (521.7) (36.9) 7.1 %

Selling, general and administrative expenses (149.1) (138.8) (10.3) 7.4 %

Other segment items (0.2) — (0.2) NM

Depreciation and amortization 25.8 24.6 1.2 4.9 %

Adjusted EBITDA $ 196.9 $ 139.7 $ 57.2 40.9 %

Adjusted EBITDA margin 22.4 % 18.0 % 440 bps

Six Months Ended

2026 2025 $ Change % Change

Net sales $ 879.0 $ 775.6 $ 103.4 13.3 %

Acquisitions 23.7 — 23.7 NM

Currency 21.1 — 21.1 NM

Net sales, excluding the impact of acquisitions

and currency $ 834.2 $ 775.6 $ 58.6 7.6 %

The Industrial Motion segment's net sales, excluding the effects of acquisitions and foreign currency exchange rate changes, increased $32.0 million or 8.1% in the three months ended June 30, 2026 compared with the three months ended June 30, 2025.

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

Adjusted EBITDA increased $33.0 million or 45.5% for the three months ended June 30, 2026 compared with the three months ended June 30, 2025, driven primarily by favorable price/mix and higher volume.

• Cost of products sold increased for the three months ended June 30, 2026 compared with the three months ended June 30, 2025 due to the impact of acquisitions of $13 million, higher volume of $4 million and unfavorable foreign currency exchange rate changes of $4 million.

• SG&A expenses increased for the three months ended June 30, 2026 compared with the three months ended June 30, 2025 primarily due to the incremental SG&A expense from acquisitions and the unfavorable impact of foreign currency exchange rates.

The Industrial Motion segment's net sales, excluding the effects of acquisitions and foreign currency exchange rate changes, increased $58.6 million or 7.6% in the six months ended June 30, 2026 compared with the six months ended June 30, 2025.

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

Adjusted EBITDA increased $57.2 million or 40.9% for the six months ended June 30, 2026 compared with the six months ended June 30, 2025.

Favorable price/mix and higher volume were partially offset by the unfavorable impact of incremental tariff costs, net of IEEPA tariff refunds.

• Cost of products sold increased for the six months ended June 30, 2026 compared with the six months ended June 30, 2025 due to the unfavorable foreign currency exchange rate changes of $16 million, the impact of acquisitions of $15 million and higher volume of $6 million.

• SG&A expenses increased for the six months ended June 30, 2026 compared with the six months ended June 30, 2025 primarily due to the incremental SG&A expense from acquisitions and the unfavorable impact of foreign currency exchange rates.

Unallocated Corporate

3 unchanged sentences

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

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

Six Months Ended

2026 2025 $ Change Change

Unallocated corporate expense $ (39.0) $ (36.0) $ (3.0) 8.3 %

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

Unallocated corporate expense increased for the three and six months ended June 30, 2026 compared with the three and six months ended June 30, 2025 primarily due to higher compensation expense.

Six Months Ended

2026 2025 $ Change

3 unchanged sentences

Effect of exchange rate changes on cash (5.5) 23.8 (29.3)

(Decrease) increase in cash and cash equivalents

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

Increase in cash and cash equivalents and restricted cash $ 35.1 $ 47.2 $ (12.1)

Op erating Activities:

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.

The decrease in net cash provided by operating activities for the first six months of 2026 compared with the first six months of 2025 was primarily due to the unfavorable impact of working capital items of $92.1 million and a decrease in net income of $34.0 million, partially offset by higher impairment charges of $79.0 million, the favorable impact of income taxes on cash of $13.0 million and lower pension contributions of $10.3 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 three months of 2026 and 2025:

Three Months Ended

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

Six Months Ended

2026 2025 $ Change

6 unchanged sentences

Cash used in working capital items $ (180.1) $ (88.0) $ (92.1)

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

Three Months Ended

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

Six Months Ended

2026 2025 $ Change

4 unchanged sentences

Investing Activities:

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.

The increase in net cash used in investing activities for the first six months of 2026 compared with the first six months of 2025 was due to an increase in cash used for acquisitions of $124.4 million.

Financing Activities:

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.

The change in net cash provided by (used in) financing activities for the first six months of 2026 compared with the first six months of 2025 was due to the favorable change in net debt borrowings/payments of $158.5 million.

LIQUIDITY AND CAPITAL RESOURCES

13 unchanged sentences

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 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.

At June 30, 2026, the Company had strong liquidity with $399.1 million of cash and cash equivalents on the Consolidated Balance Sheet, as well as $651.6 million available under committed credit lines.

Of the $399.1 million of cash and cash equivalents, $372.5 million resided in jurisdictions outside the U.S.

Repatriation of non-U.S.

cash could be subject to taxes, and some portion may be subject to governmental restrictions.

Part of the Company's strategy is to grow in attractive market sectors, many of which are outside the United States.

Part of the Company's strategy is to grow in attractive market sectors, many of which are outside the U.S.

This strategy includes making investments in facilities, equipment and potential new acquisitions.

3 unchanged sentences

dollar borrowings.

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

At June 30, 2026, the Company had $118.4 million of outstanding borrowings under the Senior Credit Facility, which reduced the availability to $631.6 million.

The Credit Agreement has two defined financial covenants:

1 unchanged sentence

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

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

As of June 30, 2026, the Company's consolidated net leverage ratio was 2.02 to 1.0.

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

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

As of June 30, 2026, the Company's consolidated interest coverage ratio was 8.78 to 1.0.

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

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.

dollar borrowings was 4.79% and the average rate on outstanding Euro borrowings was 3.03% as of June 30, 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 March 31, 2026, the Company carried investment-grade credit ratings with both Moody's (Baa2) and S&P Global (BBB-).

As of June 30, 2026, the Company carried investment-grade credit ratings with both Moody's (Baa2) and S&P Global (BBB-).

On July 2, 2026, the Company entered into an Amended Credit Agreement, which provides for a $1.2 billion New Senior Credit Facility that will mature on July 2, 2031, with two potential one-year extension options subject to customary terms and conditions.

Upon entering into the Amended Credit Agreement, the Company paid the remaining balance of $85 million of the 2027 Term Loan utilizing the New Senior Credit Facility.

The interest rates under the Amended Credit Agreement are based on SOFR for U.S.

dollar borrowings.

The Amended Credit Agreement has two defined financial covenants:

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

The maximum consolidated net leverage ratio permitted under the new Senior Credit Facility is 3.75 to 1.0.

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

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.

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

As of June 30, 2026, the Company had $80 million of outstanding borrowings under the Accounts Receivable Facility, which reduced the availability to $20 million.

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 $249.4 million.

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.

At June 30, 2026, the Company had borrowings outstanding of $26.3 million and bank guarantees of $7.2 million, which reduced the aggregate availability under these facilities to $215.9 million.

At June 30, 2026, the Company was in full compliance with all applicable covenants on its outstanding debt.

The Company expects to generate a comparable amount of cash from operating activities, with $550 million in 2026 compared to $554.3 million in 2025.

The Company expects capital expenditures in 2026 to be approximately 3.3% of sales.

Financing Obligations and Other Commitments:

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.

During the first six months of 2026, the Company made cash contributions and payments of $17.2 million to its global defined benefit pension plans and $0.9 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.

5 unchanged sentences

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, 2025, during the three months ended March 31, 2026.

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 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.

For the six months ended June 30, 2026, the Company recorded negative foreign currency translation adjustments of $26.2 million that decreased shareholders' equity, compared with positive foreign currency translation adjustments of $210.5 million that increased shareholders' equity for the six months ended June 30, 2025.

The foreign currency translation adjustments for the six months ended June 30, 2026 were impacted by the strengthening of the U.S.

dollar relative to other foreign currencies, including the Euro and the Indian Rupee.

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 June 30, 2026 and June 30, 2025 totaled $4.4 million of net losses in each period.

Foreign currency exchange gains and losses, net of hedging activity, resulting from transactions included in the Company's operating results for the six months ended June 30, 2026 totaled $7.7 million of net losses, compared with $3.3 million of net losses during the six months ended June 30, 2025.

CEO Transition:

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

IEEPA Tariff Refunds:

Throughout 2025 and the first quarter of 2026, the U.S.

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 U.S.

Supreme Court issued a decision invalidating the broad-based tariffs imposed under 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.

On April 20, 2026, CBP launched Phase 1 of the Consolidated Administration and Processing of Entries ("CAPE") system to process refunds.

Phase 1 eligibility includes IEEPA tariffs that fall within a specific liquidation window.

During the three months ended June 30, 2026, the Company recorded Phase 1 IEEPA tariff refunds, net of contractual payments to customers, of $8 million.

The IEEPA tariffs remain subject to ongoing litigation between the U.S.

government and other parties.

In response to the U.S.

Supreme Court ruling mentioned above, the U.S.

government announced plans to implement new tariffs under alternative statutory authority.

The full impact of the U.S.

Supreme Court’s ruling and the U.S.

government’s response, including the timing and extent of any additional refunds and the impact of the new tariffs, remains uncertain.

NON-GAAP MEASURES

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Three Months Ended

June 30, Six Months Ended

2026 2025 2026 2025

Net Sales $ 1,260.9 $ 1,173.4 $ 2,492.2 $ 2,313.7

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Impairment, restructuring and reorganization charges (1)

9.0 5.0 13.9 8.2

Acquisition-related charges (2)

Belts impairment, restructuring and reorganization

94.4 — 94.4 —

Gain on sale of certain assets (4)

— (0.1) — (1.3)

CEO transition expenses (5)

1 unchanged sentence

Provision for income taxes (8)

(28.4) (8.2) (36.5) (21.3)

Adjusted Net Income $ 128.4 $ 99.3 $ 245.7 $ 197.9

4 unchanged sentences

Depreciation and amortization expense (6)

58.8 56.9 117.6 111.9

Acquisition intangible amortization 20.7 19.9 41.3 38.9

Noncontrolling interest (7)

0.4 1.0 0.3 4.8

Provision for income taxes (8)

(28.4) (8.2) (36.5) (21.3)

Adjusted EBITDA $ 247.2 $ 208.2 $ 478.2 $ 416.3

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

(3) On April 29, 2026, the Company entered into a definitive agreement to sell certain assets of its belts business to Gates.

The transaction, which is subject to customary closing conditions, is expected to close in the third quarter of 2026.

In addition, the Company announced the closure of its belts manufacturing facility in Springfield, Missouri.

As a result, the Company recorded impairment and restructuring charges of $94.4 million during the second quarter of 2026.

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

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Kyle would be serving as interim President and CEO.

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.

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, and incremental stock compensation expense related to a deferred share award issued to Mr.

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

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Three Months Ended

June 30, Six Months Ended

2026 2025 2026 2025

Diluted earnings per share (EPS) $ 0.41 $ 1.12 $ 1.81 $ 2.23

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Three Months Ended

June 30, Six Months Ended

2026 2025 2026 2025

Net cash provided by operating activities $ 107.1 $ 111.3 $ 146.4 $ 169.9

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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 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.

Net income for the trailing twelve months ended June 30, 2026 and December 31, 2025 was $283.3 million and $317.3 million, respectively.

Net debt to adjusted EBITDA for the trailing twelve months was 2.0 at June 30, 2026 and December 31, 2025.

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

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Acquisition-related charges (3)

Belts impairment, restructuring and reorganization charges (4)

Gain on sale of certain assets (5)

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(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.

The Company recognizes actuarial losses and gains 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) On April 29, 2026, the Company entered into a definitive agreement to sell certain assets of its belts business to Gates.

The transaction, which is subject to customary closing conditions, is expected to close in the third quarter of 2026.

In addition, the Company announced the closure of its belts manufacturing facility in Springfield, Missouri.

As a result, the Company recorded impairment and restructuring charges of $94.4 million during the second quarter of 2026.

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

55 unchanged sentences

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis