The Timken Company

2022 ANNUAL REPORT

412691_TKR 2022 AR Cover_Print.indd   1

3/6/23   9:16 PM

2022 Performance

OPERATING DATA

Net Sales

Adjusted EBITDA1

Adjusted EBITDA Margin1

Adjusted Net Income1

Free Cash Flow1

SHAREHOLDER RETURNS

Adjusted EPS1

Dividends

OTHER KEY RATIOS

Net Debt to Capital2

Ratio of Net Debt to Adjusted EBITDA2

Adjusted Return on Invested Capital1

2022

2021

$  4,496.7

$  4,132.9

855.9

19.0%

447.8

285.4

718.0

17.4%

363.4

239.0

$        6.02

$        4.72

1.23

1.19

40.9%

1.9

12.6%

33.7%

1.7

11.0%

REVENUE
Dollars in Millions

ADJUSTED EARNINGS
PER SHARE1

ADJUSTED EBITDA 
MARGIN1

DIVIDENDS 
PER SHARE

,

$
4
1
3
2
9

.

,

$
3
7
8
9
9

.

,

$
3
5
8
0
8

.

,

$
3
5
1
3
2

.

$
4

,

4
9
6
7

.

.

$
4
6
0

.

$
4
1
8

$
4
1
0

.

.

$
4
7
2

.

$
6
0
2

.

1
9
2
%

.

1
8
8
%

.

1
8
1
%

.

1
9
0
%

.

1
7
4
%

.

$
1
2
3

.

$
1
1
9

.

$
1
1
1

.

$
1
1
2

.

$
1
1
3

2018 2019 2020 2021 2022

2018 2019 2020 2021 2022

2018 2019 2020 2021 2022

2018 2019 2020 2021 2022

10-YEAR TOTAL SHAREHOLDER RETURN 3 10.0%

1 See pages 37 through 41 of the company’s Annual Report on Form 10-K for reconciliations to the most directly comparable generally accepted accounting principles 
(cid:11)(cid:42)(cid:36)(cid:36)(cid:51)(cid:12)(cid:3)(cid:403)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:80)(cid:72)(cid:68)(cid:86)(cid:88)(cid:85)(cid:72)(cid:86)(cid:17)(cid:3)(cid:36)(cid:71)(cid:77)(cid:88)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)(cid:53)(cid:72)(cid:87)(cid:88)(cid:85)(cid:81)(cid:3)(cid:82)(cid:81)(cid:3)(cid:44)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)(cid:38)(cid:68)(cid:83)(cid:76)(cid:87)(cid:68)(cid:79)(cid:3)(cid:76)(cid:86)(cid:3)(cid:71)(cid:72)(cid:403)(cid:81)(cid:72)(cid:71)(cid:3)(cid:68)(cid:86)(cid:3)(cid:68)(cid:71)(cid:77)(cid:88)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)(cid:81)(cid:72)(cid:87)(cid:3)(cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:83)(cid:85)(cid:82)(cid:403)(cid:87)(cid:3)(cid:68)(cid:73)(cid:87)(cid:72)(cid:85)(cid:3)(cid:87)(cid:68)(cid:91)(cid:72)(cid:86)(cid:3)(cid:71)(cid:76)(cid:89)(cid:76)(cid:71)(cid:72)(cid:71)(cid:3)(cid:69)(cid:92)(cid:3)(cid:68)(cid:89)(cid:72)(cid:85)(cid:68)(cid:74)(cid:72)(cid:3)(cid:76)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)(cid:70)(cid:68)(cid:83)(cid:76)(cid:87)(cid:68)(cid:79)(cid:17)(cid:3)(cid:41)(cid:85)(cid:72)(cid:72)(cid:3)(cid:38)(cid:68)(cid:86)(cid:75)(cid:3)
(cid:41)(cid:79)(cid:82)(cid:90)(cid:3)(cid:76)(cid:86)(cid:3)(cid:71)(cid:72)(cid:403)(cid:81)(cid:72)(cid:71)(cid:3)(cid:68)(cid:86)(cid:3)(cid:81)(cid:72)(cid:87)(cid:3)(cid:70)(cid:68)(cid:86)(cid:75)(cid:3)(cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:71)(cid:72)(cid:71)(cid:3)(cid:69)(cid:92)(cid:3)(cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:68)(cid:70)(cid:87)(cid:76)(cid:89)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3)(cid:80)(cid:76)(cid:81)(cid:88)(cid:86)(cid:3)(cid:70)(cid:68)(cid:83)(cid:76)(cid:87)(cid:68)(cid:79)(cid:3)(cid:72)(cid:91)(cid:83)(cid:72)(cid:81)(cid:71)(cid:76)(cid:87)(cid:88)(cid:85)(cid:72)(cid:86)(cid:17)

(cid:21)(cid:3) (cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:53)(cid:68)(cid:87)(cid:76)(cid:82)(cid:3)(cid:82)(cid:73)(cid:3)(cid:49)(cid:72)(cid:87)(cid:3)(cid:39)(cid:72)(cid:69)(cid:87)(cid:3)(cid:87)(cid:82)(cid:3)(cid:36)(cid:71)(cid:77)(cid:88)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)(cid:40)(cid:37)(cid:44)(cid:55)(cid:39)(cid:36)(cid:3)(cid:76)(cid:86)(cid:3)(cid:71)(cid:72)(cid:403)(cid:81)(cid:72)(cid:71)(cid:3)(cid:68)(cid:86)(cid:3)(cid:81)(cid:72)(cid:87)(cid:3)(cid:71)(cid:72)(cid:69)(cid:87)(cid:3)(cid:68)(cid:87)(cid:3)(cid:39)(cid:72)(cid:70)(cid:72)(cid:80)(cid:69)(cid:72)(cid:85)(cid:3)(cid:22)(cid:20)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:83)(cid:83)(cid:79)(cid:76)(cid:70)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:3)(cid:71)(cid:76)(cid:89)(cid:76)(cid:71)(cid:72)(cid:71)(cid:3)(cid:69)(cid:92)(cid:3)(cid:68)(cid:71)(cid:77)(cid:88)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)(cid:40)(cid:37)(cid:44)(cid:55)(cid:39)(cid:36)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:87)(cid:90)(cid:72)(cid:79)(cid:89)(cid:72)(cid:3)(cid:80)(cid:82)(cid:81)(cid:87)(cid:75)(cid:86)(cid:3)(cid:72)(cid:81)(cid:71)(cid:72)(cid:71)(cid:3) 
December 31 of the applicable year. See pages 29 and 40 for the reconciliations of net debt, capital, and adjusted EBITDA to the most directly comparable GAAP 
(cid:403)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:80)(cid:72)(cid:68)(cid:86)(cid:88)(cid:85)(cid:72)(cid:86)(cid:17)

3   Total shareholder return for the company was calculated on an annualized basis and assumes quarterly reinvestment of dividends. See Item 5 in the company’s  

Annual Report on Form 10-K for more details on total shareholder return.

(cid:38)(cid:72)(cid:85)(cid:87)(cid:68)(cid:76)(cid:81)(cid:3)(cid:86)(cid:87)(cid:68)(cid:87)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:86)(cid:72)(cid:87)(cid:3)(cid:73)(cid:82)(cid:85)(cid:87)(cid:75)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:76)(cid:86)(cid:3)(cid:36)(cid:81)(cid:81)(cid:88)(cid:68)(cid:79)(cid:3)(cid:53)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3)(cid:87)(cid:82)(cid:3)(cid:54)(cid:75)(cid:68)(cid:85)(cid:72)(cid:75)(cid:82)(cid:79)(cid:71)(cid:72)(cid:85)(cid:86)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:81)(cid:82)(cid:87)(cid:3)(cid:75)(cid:76)(cid:86)(cid:87)(cid:82)(cid:85)(cid:76)(cid:70)(cid:68)(cid:79)(cid:3)(cid:76)(cid:81)(cid:3)(cid:81)(cid:68)(cid:87)(cid:88)(cid:85)(cid:72)(cid:3)(cid:11)(cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:333)(cid:86)(cid:3)(cid:73)(cid:82)(cid:85)(cid:72)(cid:70)(cid:68)(cid:86)(cid:87)(cid:86)(cid:15)(cid:3)(cid:69)(cid:72)(cid:79)(cid:76)(cid:72)(cid:73)(cid:86)(cid:15)(cid:3)(cid:72)(cid:91)(cid:83)(cid:72)(cid:70)(cid:87)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:15)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:87)(cid:68)(cid:85)(cid:74)(cid:72)(cid:87)(cid:86)(cid:12)(cid:3)
are “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on  
forward-looking statements, which speak only as of the date of this report. See the discussion of forward-looking statements in Management’s Discussion and Analysis 
of Financial Condition and Results of Operations in the company’s Annual Report on Form 10-K.

412691_TKR 2022 AR Cover_Print.indd   2

3/6/23   9:16 PM

To Our Valued Shareholders, Customers and Employees: 

(cid:44)(cid:81)(cid:3)(cid:21)(cid:19)(cid:21)(cid:21)(cid:15)(cid:3)(cid:90)(cid:72)(cid:3)(cid:70)(cid:72)(cid:79)(cid:72)(cid:69)(cid:85)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:68)(cid:3)(cid:86)(cid:76)(cid:74)(cid:81)(cid:76)(cid:403)(cid:70)(cid:68)(cid:81)(cid:87)(cid:3)(cid:80)(cid:76)(cid:79)(cid:72)(cid:86)(cid:87)(cid:82)(cid:81)(cid:72)(cid:3)(cid:76)(cid:81)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)
(cid:55)(cid:76)(cid:80)(cid:78)(cid:72)(cid:81)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:333)(cid:86)(cid:3)(cid:86)(cid:87)(cid:82)(cid:85)(cid:76)(cid:72)(cid:71)(cid:3)(cid:75)(cid:76)(cid:86)(cid:87)(cid:82)(cid:85)(cid:92)(cid:3)(cid:331)(cid:3)(cid:20)(cid:19)(cid:19)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:86)(cid:3)(cid:79)(cid:76)(cid:86)(cid:87)(cid:72)(cid:71) 
(cid:82)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:49)(cid:72)(cid:90)(cid:3)(cid:60)(cid:82)(cid:85)(cid:78)(cid:3)(cid:54)(cid:87)(cid:82)(cid:70)(cid:78)(cid:3)(cid:40)(cid:91)(cid:70)(cid:75)(cid:68)(cid:81)(cid:74)(cid:72)(cid:17)(cid:3)(cid:50)(cid:81)(cid:79)(cid:92)(cid:3)(cid:21)(cid:28)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:76)(cid:72)(cid:86)(cid:3)
(cid:70)(cid:88)(cid:85)(cid:85)(cid:72)(cid:81)(cid:87)(cid:79)(cid:92)(cid:3)(cid:82)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:72)(cid:91)(cid:70)(cid:75)(cid:68)(cid:81)(cid:74)(cid:72)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:69)(cid:72)(cid:72)(cid:81)(cid:3)(cid:79)(cid:76)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)(cid:79)(cid:82)(cid:81)(cid:74)(cid:72)(cid:85)(cid:3)
(cid:87)(cid:75)(cid:68)(cid:81)(cid:3)(cid:55)(cid:76)(cid:80)(cid:78)(cid:72)(cid:81)(cid:15)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:72)(cid:89)(cid:72)(cid:81)(cid:3)(cid:73)(cid:72)(cid:90)(cid:72)(cid:85)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:83)(cid:68)(cid:76)(cid:71)(cid:3)(cid:68)(cid:3)(cid:71)(cid:76)(cid:89)(cid:76)(cid:71)(cid:72)(cid:81)(cid:71)(cid:3)
(cid:72)(cid:89)(cid:72)(cid:85)(cid:92)(cid:3)(cid:84)(cid:88)(cid:68)(cid:85)(cid:87)(cid:72)(cid:85)(cid:3)(cid:82)(cid:89)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:70)(cid:72)(cid:81)(cid:87)(cid:88)(cid:85)(cid:92)(cid:3)(cid:68)(cid:86)(cid:3)(cid:55)(cid:76)(cid:80)(cid:78)(cid:72)(cid:81)(cid:3)(cid:75)(cid:68)(cid:86)(cid:17)

(cid:41)(cid:85)(cid:82)(cid:80)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:69)(cid:72)(cid:74)(cid:76)(cid:81)(cid:81)(cid:76)(cid:81)(cid:74)(cid:15)(cid:3)(cid:90)(cid:72)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:70)(cid:82)(cid:81)(cid:86)(cid:76)(cid:86)(cid:87)(cid:72)(cid:81)(cid:87)(cid:79)(cid:92)(cid:3)(cid:90)(cid:82)(cid:81)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)
(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:83)(cid:79)(cid:68)(cid:70)(cid:72)(cid:3)(cid:69)(cid:72)(cid:70)(cid:68)(cid:88)(cid:86)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:70)(cid:82)(cid:80)(cid:80)(cid:76)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:87)(cid:82)(cid:3)(cid:86)(cid:72)(cid:85)(cid:89)(cid:76)(cid:81)(cid:74)(cid:3)
(cid:70)(cid:88)(cid:86)(cid:87)(cid:82)(cid:80)(cid:72)(cid:85)(cid:86)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:75)(cid:76)(cid:74)(cid:75)(cid:72)(cid:86)(cid:87)(cid:3)(cid:84)(cid:88)(cid:68)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3)(cid:83)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:86)(cid:17)(cid:3)(cid:58)(cid:75)(cid:76)(cid:79)(cid:72)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)
(cid:70)(cid:82)(cid:80)(cid:80)(cid:76)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:72)(cid:86)(cid:15)(cid:3)(cid:87)(cid:82)(cid:71)(cid:68)(cid:92)(cid:333)(cid:86)(cid:3)(cid:55)(cid:76)(cid:80)(cid:78)(cid:72)(cid:81)(cid:3)(cid:76)(cid:86)(cid:3)(cid:68)(cid:79)(cid:86)(cid:82)(cid:3)(cid:90)(cid:76)(cid:81)(cid:81)(cid:76)(cid:81)(cid:74)(cid:3)
(cid:331)(cid:3)(cid:69)(cid:82)(cid:87)(cid:75)(cid:3)(cid:86)(cid:87)(cid:85)(cid:68)(cid:87)(cid:72)(cid:74)(cid:76)(cid:70)(cid:68)(cid:79)(cid:79)(cid:92)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:403)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:79)(cid:92)(cid:3)(cid:331)(cid:3)(cid:69)(cid:72)(cid:70)(cid:68)(cid:88)(cid:86)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)
(cid:71)(cid:76)(cid:89)(cid:72)(cid:85)(cid:86)(cid:76)(cid:403)(cid:70)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3)(cid:87)(cid:72)(cid:70)(cid:75)(cid:81)(cid:76)(cid:70)(cid:68)(cid:79)(cid:3)(cid:86)(cid:68)(cid:79)(cid:72)(cid:86)(cid:3)(cid:80)(cid:82)(cid:71)(cid:72)(cid:79)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:69)(cid:72)(cid:86)(cid:87)(cid:16)(cid:76)(cid:81)(cid:16)(cid:70)(cid:79)(cid:68)(cid:86)(cid:86)(cid:3)
(cid:70)(cid:88)(cid:86)(cid:87)(cid:82)(cid:80)(cid:72)(cid:85)(cid:3)(cid:86)(cid:72)(cid:85)(cid:89)(cid:76)(cid:70)(cid:72)(cid:15)(cid:3)(cid:68)(cid:86)(cid:3)(cid:90)(cid:72)(cid:3)(cid:86)(cid:87)(cid:72)(cid:68)(cid:71)(cid:76)(cid:79)(cid:92)(cid:3)(cid:76)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:74)(cid:85)(cid:82)(cid:90)(cid:87)(cid:75)(cid:15)(cid:3)
(cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:72)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:72)(cid:91)(cid:70)(cid:72)(cid:79)(cid:79)(cid:72)(cid:81)(cid:70)(cid:72)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:71)(cid:72)(cid:83)(cid:79)(cid:82)(cid:92)(cid:3)(cid:70)(cid:68)(cid:83)(cid:76)(cid:87)(cid:68)(cid:79)(cid:3)(cid:87)(cid:82)(cid:3)(cid:71)(cid:85)(cid:76)(cid:89)(cid:72)(cid:3)
(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:75)(cid:82)(cid:79)(cid:71)(cid:72)(cid:85)(cid:3)(cid:89)(cid:68)(cid:79)(cid:88)(cid:72)(cid:17)(cid:3)

(cid:53)(cid:76)(cid:70)(cid:75)(cid:68)(cid:85)(cid:71)(cid:3)(cid:42)(cid:17)(cid:3)(cid:46)(cid:92)(cid:79)(cid:72)(cid:15)(cid:3)(cid:51)(cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:50)(cid:73)(cid:403)(cid:70)(cid:72)(cid:85)

(cid:60)(cid:82)(cid:88)(cid:85)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:3)(cid:76)(cid:86)(cid:3)(cid:83)(cid:72)(cid:85)(cid:73)(cid:82)(cid:85)(cid:80)(cid:76)(cid:81)(cid:74)(cid:3)(cid:68)(cid:87)(cid:3)(cid:68)(cid:3)(cid:75)(cid:76)(cid:74)(cid:75)(cid:3)(cid:79)(cid:72)(cid:89)(cid:72)(cid:79)(cid:15)(cid:3)(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3) 
(cid:76)(cid:86)(cid:3)(cid:85)(cid:72)(cid:372)(cid:72)(cid:70)(cid:87)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:21)(cid:19)(cid:21)(cid:21)(cid:3)(cid:83)(cid:72)(cid:85)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:331)(cid:3)(cid:85)(cid:72)(cid:70)(cid:82)(cid:85)(cid:71)(cid:3)(cid:85)(cid:72)(cid:86)(cid:88)(cid:79)(cid:87)(cid:86) 
(cid:76)(cid:81)(cid:3)(cid:68)(cid:3)(cid:71)(cid:92)(cid:81)(cid:68)(cid:80)(cid:76)(cid:70)(cid:3)(cid:80)(cid:68)(cid:70)(cid:85)(cid:82)(cid:72)(cid:70)(cid:82)(cid:81)(cid:82)(cid:80)(cid:76)(cid:70)(cid:3)(cid:72)(cid:81)(cid:89)(cid:76)(cid:85)(cid:82)(cid:81)(cid:80)(cid:72)(cid:81)(cid:87)(cid:17)(cid:3)(cid:58)(cid:72)(cid:3)
(cid:74)(cid:72)(cid:81)(cid:72)(cid:85)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:7)(cid:23)(cid:17)(cid:24)(cid:3)(cid:69)(cid:76)(cid:79)(cid:79)(cid:76)(cid:82)(cid:81)(cid:3)(cid:76)(cid:81)(cid:3)(cid:86)(cid:68)(cid:79)(cid:72)(cid:86)(cid:3)(cid:331)(cid:3)(cid:68)(cid:81)(cid:3)(cid:27)(cid:17)(cid:27)(cid:3)(cid:83)(cid:72)(cid:85)(cid:70)(cid:72)(cid:81)(cid:87)(cid:3)
(cid:76)(cid:81)(cid:70)(cid:85)(cid:72)(cid:68)(cid:86)(cid:72)(cid:3)(cid:73)(cid:85)(cid:82)(cid:80)(cid:3)(cid:21)(cid:19)(cid:21)(cid:20)(cid:3)(cid:331)(cid:3)(cid:90)(cid:75)(cid:76)(cid:79)(cid:72)(cid:3)(cid:71)(cid:72)(cid:79)(cid:76)(cid:89)(cid:72)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3)(cid:85)(cid:72)(cid:70)(cid:82)(cid:85)(cid:71)(cid:3)(cid:68)(cid:71)(cid:77)(cid:88)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)
(cid:72)(cid:68)(cid:85)(cid:81)(cid:76)(cid:81)(cid:74)(cid:86)(cid:3)(cid:83)(cid:72)(cid:85)(cid:3)(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:20)(cid:3)(cid:82)(cid:73)(cid:3)(cid:7)(cid:25)(cid:17)(cid:19)(cid:21)(cid:17) (cid:39)(cid:88)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:15)(cid:3)(cid:90)(cid:72)(cid:3)
(cid:85)(cid:72)(cid:87)(cid:88)(cid:85)(cid:81)(cid:72)(cid:71)(cid:3)(cid:7)(cid:22)(cid:19)(cid:22)(cid:3)(cid:80)(cid:76)(cid:79)(cid:79)(cid:76)(cid:82)(cid:81)(cid:3)(cid:76)(cid:81)(cid:3)(cid:70)(cid:68)(cid:86)(cid:75)(cid:3)(cid:87)(cid:82)(cid:3)(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:75)(cid:82)(cid:79)(cid:71)(cid:72)(cid:85)(cid:86)(cid:3)(cid:87)(cid:75)(cid:85)(cid:82)(cid:88)(cid:74)(cid:75)(cid:3)
(cid:71)(cid:76)(cid:89)(cid:76)(cid:71)(cid:72)(cid:81)(cid:71)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:3)(cid:85)(cid:72)(cid:83)(cid:88)(cid:85)(cid:70)(cid:75)(cid:68)(cid:86)(cid:72)(cid:86)(cid:17)(cid:3)(cid:58)(cid:72)(cid:3)(cid:72)(cid:91)(cid:87)(cid:72)(cid:81)(cid:71)(cid:72)(cid:71)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)
(cid:70)(cid:82)(cid:81)(cid:86)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:71)(cid:76)(cid:89)(cid:76)(cid:71)(cid:72)(cid:81)(cid:71)(cid:3)(cid:83)(cid:68)(cid:92)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:86)(cid:87)(cid:85)(cid:72)(cid:68)(cid:78)(cid:3)(cid:87)(cid:82)(cid:3)(cid:23)(cid:19)(cid:21)(cid:3)(cid:84)(cid:88)(cid:68)(cid:85)(cid:87)(cid:72)(cid:85)(cid:86)(cid:15)(cid:3)

(cid:68)(cid:81)(cid:71)(cid:3)(cid:90)(cid:72)(cid:3)(cid:76)(cid:81)(cid:70)(cid:85)(cid:72)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:68)(cid:81)(cid:81)(cid:88)(cid:68)(cid:79)(cid:3)(cid:71)(cid:76)(cid:89)(cid:76)(cid:71)(cid:72)(cid:81)(cid:71)(cid:86)(cid:3)(cid:83)(cid:68)(cid:76)(cid:71)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)
(cid:87)(cid:75)(cid:72)(cid:3)(cid:81)(cid:76)(cid:81)(cid:87)(cid:75)(cid:3)(cid:70)(cid:82)(cid:81)(cid:86)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:17)(cid:3)(cid:58)(cid:72)(cid:3)(cid:68)(cid:79)(cid:86)(cid:82)(cid:3)(cid:85)(cid:72)(cid:83)(cid:88)(cid:85)(cid:70)(cid:75)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3)
(cid:22)(cid:17)(cid:21)(cid:24)(cid:3)(cid:80)(cid:76)(cid:79)(cid:79)(cid:76)(cid:82)(cid:81)(cid:3)(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:86)(cid:87)(cid:82)(cid:70)(cid:78)(cid:15)(cid:3)(cid:82)(cid:85)(cid:3)(cid:80)(cid:82)(cid:85)(cid:72)(cid:3)(cid:87)(cid:75)(cid:68)(cid:81)(cid:3)(cid:23)(cid:3)(cid:83)(cid:72)(cid:85)(cid:70)(cid:72)(cid:81)(cid:87)(cid:3)
(cid:82)(cid:73)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:82)(cid:88)(cid:87)(cid:86)(cid:87)(cid:68)(cid:81)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:86)(cid:17)(cid:3)(cid:58)(cid:72)(cid:3)(cid:74)(cid:72)(cid:81)(cid:72)(cid:85)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:81)(cid:72)(cid:87)(cid:3)(cid:70)(cid:68)(cid:86)(cid:75)(cid:3)
(cid:73)(cid:85)(cid:82)(cid:80)(cid:3)(cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:68)(cid:83)(cid:83)(cid:85)(cid:82)(cid:91)(cid:76)(cid:80)(cid:68)(cid:87)(cid:72)(cid:79)(cid:92)(cid:3)(cid:7)(cid:23)(cid:25)(cid:22)(cid:17)(cid:27)(cid:3)(cid:80)(cid:76)(cid:79)(cid:79)(cid:76)(cid:82)(cid:81)(cid:3)
(cid:68)(cid:81)(cid:71)(cid:3)(cid:73)(cid:85)(cid:72)(cid:72)(cid:3)(cid:70)(cid:68)(cid:86)(cid:75)(cid:3)(cid:372)(cid:82)(cid:90)(cid:20)(cid:3)(cid:82)(cid:73)(cid:3)(cid:7)(cid:21)(cid:27)(cid:24)(cid:17)(cid:23)(cid:3)(cid:80)(cid:76)(cid:79)(cid:79)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3)(cid:90)(cid:75)(cid:76)(cid:79)(cid:72)(cid:3)(cid:76)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)
(cid:68)(cid:83)(cid:83)(cid:85)(cid:82)(cid:91)(cid:76)(cid:80)(cid:68)(cid:87)(cid:72)(cid:79)(cid:92)(cid:3)(cid:7)(cid:20)(cid:26)(cid:27)(cid:3)(cid:80)(cid:76)(cid:79)(cid:79)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:85)(cid:3)(cid:23)(cid:3)(cid:83)(cid:72)(cid:85)(cid:70)(cid:72)(cid:81)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:85)(cid:72)(cid:89)(cid:72)(cid:81)(cid:88)(cid:72)(cid:3)
(cid:76)(cid:81)(cid:3)(cid:70)(cid:68)(cid:83)(cid:76)(cid:87)(cid:68)(cid:79)(cid:3)(cid:72)(cid:91)(cid:83)(cid:72)(cid:81)(cid:71)(cid:76)(cid:87)(cid:88)(cid:85)(cid:72)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:74)(cid:85)(cid:82)(cid:90)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:76)(cid:80)(cid:83)(cid:85)(cid:82)(cid:89)(cid:72)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)
(cid:70)(cid:82)(cid:80)(cid:83)(cid:72)(cid:87)(cid:76)(cid:87)(cid:76)(cid:89)(cid:72)(cid:81)(cid:72)(cid:86)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:69)(cid:88)(cid:86)(cid:76)(cid:81)(cid:72)(cid:86)(cid:86)(cid:17)

Timken’s Top-Quartile 
(cid:51)(cid:72)(cid:85)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:89)(cid:86)(cid:17)(cid:3)(cid:51)(cid:72)(cid:72)(cid:85)(cid:86) 4
2017 — 20215

As demonstrated at our recent Investor Day, 
(cid:55)(cid:76)(cid:80)(cid:78)(cid:72)(cid:81)(cid:3)(cid:75)(cid:68)(cid:86)(cid:3)(cid:69)(cid:72)(cid:72)(cid:81)(cid:3)(cid:70)(cid:85)(cid:72)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:86)(cid:76)(cid:74)(cid:81)(cid:76)(cid:403)(cid:70)(cid:68)(cid:81)(cid:87)(cid:3)(cid:89)(cid:68)(cid:79)(cid:88)(cid:72)(cid:3)

for shareholders and delivering top-quartile 
(cid:403)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:83)(cid:72)(cid:85)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:82)(cid:89)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:79)(cid:68)(cid:86)(cid:87)(cid:3)(cid:403)(cid:89)(cid:72)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:86)(cid:17)(cid:3)

The company consistently outperformed its 
(cid:83)(cid:72)(cid:72)(cid:85)(cid:86)(cid:3)(cid:331)(cid:3)(cid:20)(cid:27)(cid:3)(cid:80)(cid:76)(cid:71)(cid:16)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:79)(cid:68)(cid:85)(cid:74)(cid:72)(cid:16)(cid:70)(cid:68)(cid:83)(cid:3)(cid:56)(cid:17)(cid:54)(cid:17)(cid:3)(cid:76)(cid:81)(cid:71)(cid:88)(cid:86)(cid:87)(cid:85)(cid:76)(cid:68)(cid:79)(cid:3)

(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:76)(cid:72)(cid:86)(cid:3)(cid:331)(cid:3)(cid:68)(cid:70)(cid:85)(cid:82)(cid:86)(cid:86)(cid:3)(cid:78)(cid:72)(cid:92)(cid:3)(cid:403)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:80)(cid:72)(cid:87)(cid:85)(cid:76)(cid:70)(cid:86)(cid:17)

(cid:53)(cid:72)(cid:89)(cid:72)(cid:81)(cid:88)(cid:72)(cid:3)(cid:38)(cid:36)(cid:42)(cid:53)

(cid:36)(cid:71)(cid:77)(cid:17)(cid:3)(cid:40)(cid:37)(cid:44)(cid:55)(cid:39)(cid:36)(cid:3)(cid:38)(cid:36)(cid:42)(cid:53)

(cid:36)(cid:71)(cid:77)(cid:17)(cid:3)(cid:40)(cid:51)(cid:54)(cid:3)(cid:38)(cid:36)(cid:42)(cid:53)

9.1%
n
e
k
m
i
T

7.8%

e
l
i
t
r
a
u
Q
p
o
T

13.2%
n
e
k
m
i
T

4.1%
n
a
i
d
e
M

r
e
e
P

7.6%

e
l
i
t
r
a
u
Q
p
o
T

6.1%
n
a
i
d
e
M

r
e
e
P

19.1%
n
e
k
m
i
T

16.1%

e
l
i
t
r
a
u
Q
p
o
T

10.5%
n
a
i
d
e
M

r
e
e
P

(cid:23)(cid:3) (cid:3)(cid:54)(cid:72)(cid:72)(cid:3)(cid:83)(cid:68)(cid:74)(cid:72)(cid:3)(cid:23)(cid:23)(cid:3)(cid:82)(cid:73)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:55)(cid:76)(cid:80)(cid:78)(cid:72)(cid:81)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:3)(cid:21)(cid:19)(cid:21)(cid:21)(cid:3)(cid:51)(cid:85)(cid:82)(cid:91)(cid:92)(cid:3)(cid:54)(cid:87)(cid:68)(cid:87)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:68)(cid:3)(cid:79)(cid:76)(cid:86)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:20)(cid:27)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:76)(cid:72)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:21)(cid:19)(cid:21)(cid:21)(cid:3)(cid:83)(cid:72)(cid:72)(cid:85)(cid:3)(cid:74)(cid:85)(cid:82)(cid:88)(cid:83)(cid:17)(cid:3)

(cid:24)(cid:3) (cid:3)(cid:38)(cid:36)(cid:42)(cid:53)(cid:86)(cid:3)(cid:70)(cid:68)(cid:79)(cid:70)(cid:88)(cid:79)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:21)(cid:19)(cid:20)(cid:25)(cid:3)(cid:68)(cid:86)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:69)(cid:68)(cid:86)(cid:72)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:17)(cid:3)(cid:55)(cid:76)(cid:80)(cid:78)(cid:72)(cid:81)(cid:3)(cid:68)(cid:71)(cid:77)(cid:88)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)(cid:40)(cid:37)(cid:44)(cid:55)(cid:39)(cid:36)(cid:3)(cid:38)(cid:36)(cid:42)(cid:53)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:68)(cid:71)(cid:77)(cid:88)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)(cid:40)(cid:51)(cid:54)(cid:3)(cid:38)(cid:36)(cid:42)(cid:53)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:70)(cid:68)(cid:79)(cid:70)(cid:88)(cid:79)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:69)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3)(cid:82)(cid:81)(cid:3)(cid:68)(cid:71)(cid:77)(cid:88)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)(cid:40)(cid:37)(cid:44)(cid:55)(cid:39)(cid:36)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:40)(cid:51)(cid:54)(cid:3)(cid:68)(cid:86)(cid:3)(cid:82)(cid:85)(cid:76)(cid:74)(cid:76)(cid:81)(cid:68)(cid:79)(cid:79)(cid:92)(cid:3)
(cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:72)(cid:71)(cid:3)(cid:11)(cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:69)(cid:72)(cid:73)(cid:82)(cid:85)(cid:72)(cid:3)(cid:68)(cid:71)(cid:82)(cid:83)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:80)(cid:68)(cid:85)(cid:78)(cid:16)(cid:87)(cid:82)(cid:16)(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:83)(cid:72)(cid:81)(cid:86)(cid:76)(cid:82)(cid:81)(cid:18)(cid:50)(cid:51)(cid:40)(cid:37)(cid:3)(cid:76)(cid:81)(cid:3)(cid:21)(cid:19)(cid:20)(cid:25)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:83)(cid:85)(cid:76)(cid:82)(cid:85)(cid:3)(cid:87)(cid:82)(cid:3)(cid:68)(cid:71)(cid:77)(cid:88)(cid:86)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:68)(cid:70)(cid:84)(cid:88)(cid:76)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:16)(cid:85)(cid:72)(cid:79)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:68)(cid:80)(cid:82)(cid:85)(cid:87)(cid:76)(cid:93)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:12)(cid:17)(cid:3)(cid:38)(cid:68)(cid:85)(cid:79)(cid:76)(cid:86)(cid:79)(cid:72)(cid:333)(cid:86)(cid:3) 
(cid:21)(cid:19)(cid:21)(cid:20)(cid:3)(cid:68)(cid:71)(cid:77)(cid:88)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)(cid:40)(cid:51)(cid:54)(cid:3)(cid:70)(cid:68)(cid:79)(cid:70)(cid:88)(cid:79)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:86)(cid:3)(cid:68)(cid:70)(cid:84)(cid:88)(cid:76)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:16)(cid:85)(cid:72)(cid:79)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:68)(cid:80)(cid:82)(cid:85)(cid:87)(cid:76)(cid:93)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:7)(cid:20)(cid:17)(cid:27)(cid:19)(cid:18)(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:80)(cid:68)(cid:78)(cid:72)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:85)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:21)(cid:19)(cid:20)(cid:25)(cid:17)(cid:3)(cid:42)(cid:68)(cid:87)(cid:72)(cid:86)(cid:333)(cid:3)(cid:21)(cid:19)(cid:20)(cid:25)(cid:3)(cid:68)(cid:71)(cid:77)(cid:88)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)(cid:40)(cid:51)(cid:54)(cid:3)(cid:70)(cid:68)(cid:79)(cid:70)(cid:88)(cid:79)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:88)(cid:87)(cid:76)(cid:79)(cid:76)(cid:93)(cid:72)(cid:86)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)
(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:333)(cid:86)(cid:3)(cid:71)(cid:76)(cid:79)(cid:88)(cid:87)(cid:72)(cid:71)(cid:3)(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:86)(cid:3)(cid:82)(cid:88)(cid:87)(cid:86)(cid:87)(cid:68)(cid:81)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:88)(cid:83)(cid:82)(cid:81)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:79)(cid:72)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:44)(cid:51)(cid:50)(cid:3)(cid:76)(cid:81)(cid:3)(cid:72)(cid:68)(cid:85)(cid:79)(cid:92)(cid:3)(cid:21)(cid:19)(cid:20)(cid:27)(cid:17)(cid:3)(cid:39)(cid:82)(cid:89)(cid:72)(cid:85)(cid:333)(cid:86)(cid:3)(cid:21)(cid:19)(cid:20)(cid:25)(cid:3)(cid:68)(cid:71)(cid:77)(cid:88)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)(cid:40)(cid:51)(cid:54)(cid:3)(cid:68)(cid:86)(cid:3)(cid:82)(cid:85)(cid:76)(cid:74)(cid:76)(cid:81)(cid:68)(cid:79)(cid:79)(cid:92)(cid:3)(cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:72)(cid:71)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:72)(cid:91)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:86)(cid:3)(cid:68)(cid:70)(cid:84)(cid:88)(cid:76)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:16)(cid:85)(cid:72)(cid:79)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3) 
(cid:68)(cid:80)(cid:82)(cid:85)(cid:87)(cid:76)(cid:93)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:7)(cid:19)(cid:17)(cid:27)(cid:23)(cid:18)(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:17)(cid:3)(cid:41)(cid:82)(cid:85)(cid:87)(cid:76)(cid:89)(cid:72)(cid:333)(cid:86)(cid:3)(cid:21)(cid:19)(cid:20)(cid:25)(cid:3)(cid:403)(cid:74)(cid:88)(cid:85)(cid:72)(cid:86)(cid:3)(cid:68)(cid:86)(cid:3)(cid:82)(cid:85)(cid:76)(cid:74)(cid:76)(cid:81)(cid:68)(cid:79)(cid:79)(cid:92)(cid:3)(cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:72)(cid:71)(cid:3)(cid:11)(cid:83)(cid:85)(cid:72)(cid:16)(cid:57)(cid:82)(cid:81)(cid:87)(cid:76)(cid:72)(cid:85)(cid:3)(cid:86)(cid:72)(cid:83)(cid:68)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:82)(cid:80)(cid:69)(cid:76)(cid:81)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:76)(cid:87)(cid:86)(cid:3)(cid:36)(cid:9)(cid:54)(cid:3)(cid:83)(cid:79)(cid:68)(cid:87)(cid:73)(cid:82)(cid:85)(cid:80)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:36)(cid:79)(cid:87)(cid:85)(cid:68)(cid:12)(cid:17)(cid:3)(cid:44)(cid:81)(cid:74)(cid:72)(cid:85)(cid:86)(cid:82)(cid:79)(cid:79)(cid:3)(cid:53)(cid:68)(cid:81)(cid:71)(cid:333)(cid:86)(cid:3)(cid:21)(cid:19)(cid:20)(cid:25)(cid:3)(cid:331) 
(cid:21)(cid:19)(cid:20)(cid:28)(cid:3)(cid:403)(cid:74)(cid:88)(cid:85)(cid:72)(cid:86)(cid:3)(cid:88)(cid:87)(cid:76)(cid:79)(cid:76)(cid:93)(cid:72)(cid:3)(cid:42)(cid:68)(cid:85)(cid:71)(cid:81)(cid:72)(cid:85)(cid:3)(cid:39)(cid:72)(cid:81)(cid:89)(cid:72)(cid:85)(cid:333)(cid:86)(cid:3)(cid:86)(cid:87)(cid:68)(cid:81)(cid:71)(cid:68)(cid:79)(cid:82)(cid:81)(cid:72)(cid:3)(cid:85)(cid:72)(cid:86)(cid:88)(cid:79)(cid:87)(cid:86)(cid:17)(cid:3)(cid:54)(cid:72)(cid:72)(cid:3)(cid:83)(cid:68)(cid:74)(cid:72)(cid:86)(cid:3)(cid:22)(cid:26)(cid:3)(cid:87)(cid:75)(cid:85)(cid:82)(cid:88)(cid:74)(cid:75)(cid:3)(cid:22)(cid:27)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:333)(cid:86)(cid:3)(cid:36)(cid:81)(cid:81)(cid:88)(cid:68)(cid:79)(cid:3)(cid:53)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3)(cid:82)(cid:81)(cid:3)(cid:41)(cid:82)(cid:85)(cid:80)(cid:3)(cid:20)(cid:19)(cid:16)(cid:46)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:83)(cid:83)(cid:72)(cid:81)(cid:71)(cid:76)(cid:91)(cid:3)(cid:68)(cid:87)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:72)(cid:81)(cid:71)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:76)(cid:86)(cid:3) 
(cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3)(cid:87)(cid:76)(cid:87)(cid:79)(cid:72)(cid:71)(cid:3)Appendix: Reconciliation of GAAP to Non-GAAP Measures(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:85)(cid:72)(cid:70)(cid:82)(cid:81)(cid:70)(cid:76)(cid:79)(cid:76)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:36)(cid:71)(cid:77)(cid:88)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)(cid:40)(cid:51)(cid:54)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:36)(cid:71)(cid:77)(cid:88)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)(cid:40)(cid:37)(cid:44)(cid:55)(cid:39)(cid:36)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:76)(cid:85)(cid:3)(cid:80)(cid:82)(cid:86)(cid:87)(cid:3)(cid:71)(cid:76)(cid:85)(cid:72)(cid:70)(cid:87)(cid:79)(cid:92)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:85)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:42)(cid:36)(cid:36)(cid:51)(cid:3)
(cid:403)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:80)(cid:72)(cid:68)(cid:86)(cid:88)(cid:85)(cid:72)(cid:86)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:21)(cid:19)(cid:20)(cid:27)(cid:3)(cid:331)(cid:3)(cid:21)(cid:19)(cid:21)(cid:21)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:21)(cid:19)(cid:20)(cid:25)(cid:3)(cid:331)(cid:3)(cid:20)(cid:26)(cid:15)(cid:3)(cid:85)(cid:72)(cid:86)(cid:83)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:79)(cid:92)(cid:17)

2022 ANNUAL REPORT

1

412691_TKR 2022 AR Narrative_Print.indd   1

3/6/23   9:15 PM

 
 
 
 
 
 
(cid:44)(cid:81)(cid:3)(cid:68)(cid:71)(cid:71)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3)(cid:90)(cid:72)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:69)(cid:72)(cid:72)(cid:81)(cid:3)(cid:70)(cid:85)(cid:72)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:86)(cid:76)(cid:74)(cid:81)(cid:76)(cid:403)(cid:70)(cid:68)(cid:81)(cid:87)(cid:3)(cid:89)(cid:68)(cid:79)(cid:88)(cid:72)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)
(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:75)(cid:82)(cid:79)(cid:71)(cid:72)(cid:85)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:87)(cid:82)(cid:83)(cid:16)(cid:84)(cid:88)(cid:68)(cid:85)(cid:87)(cid:76)(cid:79)(cid:72)(cid:3)(cid:403)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:83)(cid:72)(cid:85)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)
(cid:82)(cid:89)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:79)(cid:68)(cid:86)(cid:87)(cid:3)(cid:403)(cid:89)(cid:72)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:86)(cid:17)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:68)(cid:85)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:83)(cid:72)(cid:72)(cid:85)(cid:86)(cid:3)(cid:331)(cid:3) 
(cid:20)(cid:27)(cid:3)(cid:80)(cid:76)(cid:71)(cid:16)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:79)(cid:68)(cid:85)(cid:74)(cid:72)(cid:16)(cid:70)(cid:68)(cid:83)(cid:3)(cid:56)(cid:17)(cid:54)(cid:17)(cid:3)(cid:76)(cid:81)(cid:71)(cid:88)(cid:86)(cid:87)(cid:85)(cid:76)(cid:68)(cid:79)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:76)(cid:72)(cid:86)(cid:3)(cid:331)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)
(cid:85)(cid:72)(cid:86)(cid:88)(cid:79)(cid:87)(cid:86)(cid:3)(cid:73)(cid:88)(cid:85)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:86)(cid:70)(cid:82)(cid:85)(cid:72)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:86)(cid:87)(cid:68)(cid:92)(cid:76)(cid:81)(cid:74)(cid:3)(cid:83)(cid:82)(cid:90)(cid:72)(cid:85)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)
(cid:72)(cid:81)(cid:71)(cid:88)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3)(cid:85)(cid:72)(cid:79)(cid:72)(cid:89)(cid:68)(cid:81)(cid:70)(cid:72)(cid:17)(cid:3)

(cid:55)(cid:75)(cid:85)(cid:82)(cid:88)(cid:74)(cid:75)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:83)(cid:72)(cid:85)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:81)(cid:70)(cid:72)(cid:15)(cid:3)(cid:76)(cid:81)(cid:81)(cid:82)(cid:89)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)
(cid:86)(cid:87)(cid:85)(cid:68)(cid:87)(cid:72)(cid:74)(cid:76)(cid:70)(cid:3)(cid:68)(cid:71)(cid:89)(cid:68)(cid:81)(cid:70)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:15)(cid:3)(cid:90)(cid:72)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:69)(cid:88)(cid:76)(cid:79)(cid:71)(cid:3)(cid:82)(cid:81)(cid:3)
(cid:55)(cid:76)(cid:80)(cid:78)(cid:72)(cid:81)(cid:333)(cid:86)(cid:3)(cid:85)(cid:76)(cid:70)(cid:75)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:79)(cid:82)(cid:81)(cid:74)(cid:3)(cid:75)(cid:76)(cid:86)(cid:87)(cid:82)(cid:85)(cid:92)(cid:17)(cid:3)(cid:50)(cid:88)(cid:85)(cid:3)(cid:89)(cid:68)(cid:79)(cid:88)(cid:72)(cid:3)(cid:83)(cid:85)(cid:82)(cid:83)(cid:82)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)
(cid:75)(cid:68)(cid:86)(cid:3)(cid:81)(cid:72)(cid:89)(cid:72)(cid:85)(cid:3)(cid:69)(cid:72)(cid:72)(cid:81)(cid:3)(cid:86)(cid:87)(cid:85)(cid:82)(cid:81)(cid:74)(cid:72)(cid:85)(cid:15)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:90)(cid:72)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:83)(cid:82)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)
(cid:87)(cid:75)(cid:85)(cid:76)(cid:89)(cid:72)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:81)(cid:72)(cid:91)(cid:87)(cid:3)(cid:20)(cid:19)(cid:19)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:86)(cid:17)

(cid:48)(cid:82)(cid:85)(cid:72)(cid:3)(cid:39)(cid:76)(cid:89)(cid:72)(cid:85)(cid:86)(cid:72)(cid:3)(cid:55)(cid:75)(cid:68)(cid:81)(cid:3)(cid:40)(cid:89)(cid:72)(cid:85)(cid:29)(cid:3)(cid:54)(cid:70)(cid:68)(cid:79)(cid:76)(cid:81)(cid:74)(cid:3)(cid:68)(cid:86)(cid:3)(cid:68)(cid:3)(cid:39)(cid:76)(cid:89)(cid:72)(cid:85)(cid:86)(cid:76)(cid:403)(cid:72)(cid:71)(cid:3)(cid:44)(cid:81)(cid:71)(cid:88)(cid:86)(cid:87)(cid:85)(cid:76)(cid:68)(cid:79)(cid:3)(cid:47)(cid:72)(cid:68)(cid:71)(cid:72)(cid:85)

(cid:55)(cid:82)(cid:71)(cid:68)(cid:92)(cid:3)(cid:55)(cid:76)(cid:80)(cid:78)(cid:72)(cid:81)(cid:3)(cid:76)(cid:86)(cid:3)(cid:83)(cid:72)(cid:85)(cid:73)(cid:82)(cid:85)(cid:80)(cid:76)(cid:81)(cid:74)(cid:3)(cid:68)(cid:86)(cid:3)(cid:68)(cid:3)(cid:71)(cid:76)(cid:89)(cid:72)(cid:85)(cid:86)(cid:76)(cid:403)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:71)(cid:88)(cid:86)(cid:87)(cid:85)(cid:76)(cid:68)(cid:79)(cid:3)
(cid:79)(cid:72)(cid:68)(cid:71)(cid:72)(cid:85)(cid:17)(cid:3)(cid:58)(cid:72)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:86)(cid:87)(cid:85)(cid:82)(cid:81)(cid:74)(cid:79)(cid:92)(cid:3)(cid:83)(cid:82)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:90)(cid:76)(cid:81)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:68)(cid:3) 
(cid:80)(cid:82)(cid:85)(cid:72)(cid:3)(cid:71)(cid:76)(cid:89)(cid:72)(cid:85)(cid:86)(cid:72)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:68)(cid:87)(cid:87)(cid:85)(cid:68)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:3)(cid:80)(cid:76)(cid:91)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:68)(cid:3)(cid:69)(cid:85)(cid:82)(cid:68)(cid:71)(cid:72)(cid:85)(cid:3)
(cid:83)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:3)(cid:83)(cid:82)(cid:85)(cid:87)(cid:73)(cid:82)(cid:79)(cid:76)(cid:82)(cid:17)(cid:3)

(cid:36)(cid:86)(cid:3)(cid:68)(cid:3)(cid:90)(cid:82)(cid:85)(cid:79)(cid:71)(cid:3)(cid:79)(cid:72)(cid:68)(cid:71)(cid:72)(cid:85)(cid:3)(cid:76)(cid:81)(cid:3)(cid:72)(cid:81)(cid:74)(cid:76)(cid:81)(cid:72)(cid:72)(cid:85)(cid:72)(cid:71)(cid:3)(cid:69)(cid:72)(cid:68)(cid:85)(cid:76)(cid:81)(cid:74)(cid:86)(cid:3)(cid:87)(cid:72)(cid:70)(cid:75)(cid:81)(cid:82)(cid:79)(cid:82)(cid:74)(cid:92)(cid:15) 
(cid:90)(cid:72)(cid:3)(cid:85)(cid:72)(cid:80)(cid:68)(cid:76)(cid:81)(cid:3)(cid:73)(cid:82)(cid:70)(cid:88)(cid:86)(cid:72)(cid:71)(cid:3)(cid:82)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:83)(cid:85)(cid:72)(cid:80)(cid:76)(cid:88)(cid:80)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:80)(cid:82)(cid:86)(cid:87)(cid:3)(cid:83)(cid:85)(cid:82)(cid:403)(cid:87)(cid:68)(cid:69)(cid:79)(cid:72) 
(cid:83)(cid:68)(cid:85)(cid:87)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:17)(cid:3)(cid:36)(cid:87)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:86)(cid:68)(cid:80)(cid:72)(cid:3)(cid:87)(cid:76)(cid:80)(cid:72)(cid:15)(cid:3)(cid:90)(cid:72)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3) 
(cid:69)(cid:72)(cid:72)(cid:81)(cid:3)(cid:79)(cid:72)(cid:89)(cid:72)(cid:85)(cid:68)(cid:74)(cid:76)(cid:81)(cid:74)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:74)(cid:79)(cid:82)(cid:69)(cid:68)(cid:79)(cid:3)(cid:79)(cid:72)(cid:68)(cid:71)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:3)(cid:83)(cid:82)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:76)(cid:81)(cid:3)
(cid:72)(cid:81)(cid:74)(cid:76)(cid:81)(cid:72)(cid:72)(cid:85)(cid:72)(cid:71)(cid:3)(cid:69)(cid:72)(cid:68)(cid:85)(cid:76)(cid:81)(cid:74)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:72)(cid:91)(cid:83)(cid:68)(cid:81)(cid:71)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:86)(cid:70)(cid:68)(cid:79)(cid:72)(cid:3)(cid:76)(cid:81)(cid:3)(cid:76)(cid:81)(cid:71)(cid:88)(cid:86)(cid:87)(cid:85)(cid:76)(cid:68)(cid:79)(cid:3)
(cid:80)(cid:82)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:83)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:86)(cid:72)(cid:85)(cid:89)(cid:76)(cid:70)(cid:72)(cid:86)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:82)(cid:89)(cid:72)(cid:85)(cid:3)(cid:68)(cid:3)(cid:71)(cid:72)(cid:70)(cid:68)(cid:71)(cid:72)(cid:17)(cid:3)

(cid:50)(cid:88)(cid:85)(cid:3)(cid:76)(cid:81)(cid:71)(cid:88)(cid:86)(cid:87)(cid:85)(cid:76)(cid:68)(cid:79)(cid:3)(cid:80)(cid:82)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:83)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:3)(cid:82)(cid:73)(cid:73)(cid:72)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3)(cid:76)(cid:86)(cid:3)(cid:81)(cid:82)(cid:90)(cid:3)(cid:74)(cid:85)(cid:72)(cid:68)(cid:87)(cid:72)(cid:85)(cid:3)
(cid:87)(cid:75)(cid:68)(cid:81)(cid:3)(cid:22)(cid:19)(cid:3)(cid:83)(cid:72)(cid:85)(cid:70)(cid:72)(cid:81)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:86)(cid:68)(cid:79)(cid:72)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:86)(cid:3)(cid:79)(cid:76)(cid:81)(cid:72)(cid:68)(cid:85)(cid:3)(cid:80)(cid:82)(cid:87)(cid:76)(cid:82)(cid:81) 
(cid:83)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:86)(cid:15)(cid:3)(cid:68)(cid:88)(cid:87)(cid:82)(cid:80)(cid:68)(cid:87)(cid:76)(cid:70)(cid:3)(cid:79)(cid:88)(cid:69)(cid:85)(cid:76)(cid:70)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:86)(cid:92)(cid:86)(cid:87)(cid:72)(cid:80)(cid:86)(cid:15)(cid:3)(cid:71)(cid:85)(cid:76)(cid:89)(cid:72)(cid:3)(cid:86)(cid:92)(cid:86)(cid:87)(cid:72)(cid:80)(cid:86)(cid:3)
(cid:68)(cid:81)(cid:71)(cid:3)(cid:86)(cid:72)(cid:85)(cid:89)(cid:76)(cid:70)(cid:72)(cid:86)(cid:15)(cid:3)(cid:69)(cid:72)(cid:79)(cid:87)(cid:86)(cid:15)(cid:3)(cid:70)(cid:75)(cid:68)(cid:76)(cid:81)(cid:15)(cid:3)(cid:70)(cid:82)(cid:88)(cid:83)(cid:79)(cid:76)(cid:81)(cid:74)(cid:86)(cid:15)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:76)(cid:81)(cid:71)(cid:88)(cid:86)(cid:87)(cid:85)(cid:76)(cid:68)(cid:79)(cid:3)
(cid:70)(cid:79)(cid:88)(cid:87)(cid:70)(cid:75)(cid:72)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:69)(cid:85)(cid:68)(cid:78)(cid:72)(cid:86)(cid:17)(cid:3)(cid:55)(cid:75)(cid:72)(cid:86)(cid:72)(cid:3)(cid:72)(cid:81)(cid:74)(cid:76)(cid:81)(cid:72)(cid:72)(cid:85)(cid:72)(cid:71)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:82)(cid:81)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)
(cid:68)(cid:85)(cid:72)(cid:3)(cid:74)(cid:72)(cid:81)(cid:72)(cid:85)(cid:68)(cid:79)(cid:79)(cid:92)(cid:3)(cid:73)(cid:82)(cid:88)(cid:81)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:86)(cid:68)(cid:80)(cid:72)(cid:3)(cid:72)(cid:84)(cid:88)(cid:76)(cid:83)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)
(cid:70)(cid:82)(cid:81)(cid:87)(cid:68)(cid:76)(cid:81)(cid:86)(cid:3)(cid:69)(cid:72)(cid:68)(cid:85)(cid:76)(cid:81)(cid:74)(cid:86)(cid:17)(cid:3)(cid:55)(cid:75)(cid:68)(cid:87)(cid:3)(cid:80)(cid:72)(cid:68)(cid:81)(cid:86)(cid:3)(cid:87)(cid:75)(cid:72)(cid:92)(cid:3)(cid:82)(cid:73)(cid:87)(cid:72)(cid:81)(cid:3)(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)
(cid:86)(cid:68)(cid:80)(cid:72)(cid:3)(cid:70)(cid:88)(cid:86)(cid:87)(cid:82)(cid:80)(cid:72)(cid:85)(cid:3)(cid:70)(cid:75)(cid:68)(cid:81)(cid:81)(cid:72)(cid:79)(cid:86)(cid:15)(cid:3)(cid:69)(cid:82)(cid:87)(cid:75)(cid:3)(cid:82)(cid:85)(cid:76)(cid:74)(cid:76)(cid:81)(cid:68)(cid:79)(cid:3)(cid:72)(cid:84)(cid:88)(cid:76)(cid:83)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)
(cid:80)(cid:68)(cid:81)(cid:88)(cid:73)(cid:68)(cid:70)(cid:87)(cid:88)(cid:85)(cid:72)(cid:85)(cid:86)(cid:3)(cid:11)(cid:50)(cid:40)(cid:48)(cid:86)(cid:12)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:71)(cid:76)(cid:86)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:82)(cid:85)(cid:86)(cid:15)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:82)(cid:73)(cid:87)(cid:72)(cid:81)(cid:3)
(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:86)(cid:68)(cid:80)(cid:72)(cid:3)(cid:72)(cid:81)(cid:71)(cid:16)(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:3)(cid:86)(cid:72)(cid:70)(cid:87)(cid:82)(cid:85)(cid:86)(cid:3)(cid:68)(cid:86)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:69)(cid:72)(cid:68)(cid:85)(cid:76)(cid:81)(cid:74)(cid:86)(cid:17)(cid:3)(cid:58)(cid:72)(cid:3)(cid:74)(cid:82) 
(cid:87)(cid:82)(cid:3)(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:3)(cid:71)(cid:76)(cid:85)(cid:72)(cid:70)(cid:87)(cid:79)(cid:92)(cid:3)(cid:87)(cid:82)(cid:3)(cid:50)(cid:40)(cid:48)(cid:86)(cid:3)(cid:68)(cid:86)(cid:3)(cid:87)(cid:75)(cid:72)(cid:76)(cid:85)(cid:3)(cid:87)(cid:85)(cid:88)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)(cid:71)(cid:72)(cid:86)(cid:76)(cid:74)(cid:81)(cid:3)
(cid:83)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:15)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:90)(cid:72)(cid:3)(cid:86)(cid:72)(cid:85)(cid:89)(cid:72)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:68)(cid:73)(cid:87)(cid:72)(cid:85)(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:86)(cid:80)(cid:68)(cid:79)(cid:79)(cid:72)(cid:85)(cid:3)(cid:50)(cid:40)(cid:48) 
(cid:70)(cid:88)(cid:86)(cid:87)(cid:82)(cid:80)(cid:72)(cid:85)(cid:86)(cid:3)(cid:87)(cid:75)(cid:85)(cid:82)(cid:88)(cid:74)(cid:75)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:74)(cid:79)(cid:82)(cid:69)(cid:68)(cid:79)(cid:3)(cid:81)(cid:72)(cid:87)(cid:90)(cid:82)(cid:85)(cid:78)(cid:3)(cid:82)(cid:73)(cid:3)(cid:71)(cid:76)(cid:86)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:82)(cid:85)(cid:86)(cid:17)(cid:3)

Diverse Market Mix 
(cid:58)(cid:72)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:68)(cid:3)(cid:69)(cid:85)(cid:82)(cid:68)(cid:71)(cid:16)(cid:69)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3)(cid:74)(cid:79)(cid:82)(cid:69)(cid:68)(cid:79)(cid:3)(cid:86)(cid:88)(cid:83)(cid:83)(cid:79)(cid:76)(cid:72)(cid:85)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:68)(cid:3)(cid:71)(cid:76)(cid:89)(cid:72)(cid:85)(cid:86)(cid:72)(cid:3)
(cid:72)(cid:81)(cid:71)(cid:16)(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:3)(cid:86)(cid:72)(cid:70)(cid:87)(cid:82)(cid:85)(cid:3)(cid:80)(cid:76)(cid:91)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:76)(cid:86)(cid:3)(cid:82)(cid:81)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:80)(cid:82)(cid:86)(cid:87)(cid:3)(cid:68)(cid:87)(cid:87)(cid:85)(cid:68)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)
(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:76)(cid:81)(cid:71)(cid:88)(cid:86)(cid:87)(cid:85)(cid:92)(cid:17)(cid:3)(cid:58)(cid:72)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:69)(cid:72)(cid:72)(cid:81)(cid:3)(cid:90)(cid:82)(cid:85)(cid:78)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:82)(cid:3)(cid:69)(cid:85)(cid:82)(cid:68)(cid:71)(cid:72)(cid:81)(cid:3) 
(cid:82)(cid:88)(cid:85)(cid:3)(cid:76)(cid:81)(cid:71)(cid:88)(cid:86)(cid:87)(cid:85)(cid:92)(cid:3)(cid:80)(cid:76)(cid:91)(cid:3)(cid:87)(cid:82)(cid:3)(cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:3)(cid:80)(cid:82)(cid:85)(cid:72)(cid:3)(cid:68)(cid:87)(cid:87)(cid:85)(cid:68)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:72)(cid:81)(cid:71)(cid:16)(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:3)
(cid:86)(cid:72)(cid:70)(cid:87)(cid:82)(cid:85)(cid:86)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:86)(cid:87)(cid:85)(cid:82)(cid:81)(cid:74)(cid:3)(cid:74)(cid:85)(cid:82)(cid:90)(cid:87)(cid:75)(cid:3)(cid:80)(cid:68)(cid:70)(cid:85)(cid:82)(cid:86)(cid:15)(cid:3)(cid:74)(cid:82)(cid:82)(cid:71)(cid:3)(cid:83)(cid:85)(cid:82)(cid:403)(cid:87)(cid:3)(cid:83)(cid:82)(cid:82)(cid:79)(cid:86)(cid:3)
(cid:68)(cid:81)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:80)(cid:68)(cid:81)(cid:92)(cid:3)(cid:70)(cid:68)(cid:86)(cid:72)(cid:86)(cid:3)(cid:71)(cid:76)(cid:73)(cid:73)(cid:72)(cid:85)(cid:72)(cid:81)(cid:87)(cid:3)(cid:70)(cid:92)(cid:70)(cid:79)(cid:76)(cid:70)(cid:68)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3)(cid:83)(cid:85)(cid:82)(cid:403)(cid:79)(cid:72)(cid:86)(cid:17)(cid:3) 
(cid:54)(cid:76)(cid:81)(cid:70)(cid:72)(cid:3)(cid:21)(cid:19)(cid:20)(cid:23)(cid:15)(cid:3)(cid:90)(cid:72)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:87)(cid:85)(cid:76)(cid:83)(cid:79)(cid:72)(cid:71)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:68)(cid:81)(cid:81)(cid:88)(cid:68)(cid:79)(cid:3)(cid:85)(cid:72)(cid:89)(cid:72)(cid:81)(cid:88)(cid:72)(cid:3)(cid:76)(cid:81)(cid:3)
(cid:87)(cid:75)(cid:72)(cid:86)(cid:72)(cid:3)(cid:81)(cid:72)(cid:90)(cid:72)(cid:85)(cid:3)(cid:86)(cid:72)(cid:70)(cid:87)(cid:82)(cid:85)(cid:86)(cid:15)(cid:3)(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)(cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:3)(cid:85)(cid:72)(cid:81)(cid:72)(cid:90)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:72)(cid:81)(cid:72)(cid:85)(cid:74)(cid:92)(cid:15)(cid:3)
(cid:68)(cid:88)(cid:87)(cid:82)(cid:80)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3)(cid:80)(cid:68)(cid:85)(cid:76)(cid:81)(cid:72)(cid:15)(cid:3)(cid:73)(cid:82)(cid:82)(cid:71)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:69)(cid:72)(cid:89)(cid:72)(cid:85)(cid:68)(cid:74)(cid:72)(cid:3)(cid:11)(cid:41)(cid:9)(cid:37)(cid:12)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)
(cid:83)(cid:68)(cid:86)(cid:86)(cid:72)(cid:81)(cid:74)(cid:72)(cid:85)(cid:3)(cid:85)(cid:68)(cid:76)(cid:79)(cid:17)(cid:3)

(cid:41)(cid:82)(cid:85)(cid:3)(cid:72)(cid:91)(cid:68)(cid:80)(cid:83)(cid:79)(cid:72)(cid:15)(cid:3)(cid:68)(cid:88)(cid:87)(cid:82)(cid:80)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:76)(cid:86)(cid:3)(cid:68)(cid:3)(cid:74)(cid:85)(cid:82)(cid:90)(cid:76)(cid:81)(cid:74)(cid:3)(cid:72)(cid:81)(cid:71)(cid:16)(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:3)
(cid:86)(cid:72)(cid:70)(cid:87)(cid:82)(cid:85)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:55)(cid:76)(cid:80)(cid:78)(cid:72)(cid:81)(cid:17)(cid:3)(cid:58)(cid:72)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:69)(cid:88)(cid:76)(cid:79)(cid:87)(cid:3)(cid:68)(cid:3)(cid:71)(cid:76)(cid:89)(cid:72)(cid:85)(cid:86)(cid:72)(cid:3)(cid:83)(cid:82)(cid:85)(cid:87)(cid:73)(cid:82)(cid:79)(cid:76)(cid:82)(cid:3)
(cid:82)(cid:73)(cid:3)(cid:83)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:86)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:75)(cid:76)(cid:74)(cid:75)(cid:16)(cid:74)(cid:85)(cid:82)(cid:90)(cid:87)(cid:75)(cid:3)(cid:68)(cid:88)(cid:87)(cid:82)(cid:80)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:76)(cid:81)(cid:71)(cid:88)(cid:86)(cid:87)(cid:85)(cid:76)(cid:72)(cid:86)(cid:15)(cid:3)
(cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:85)(cid:82)(cid:69)(cid:82)(cid:87)(cid:76)(cid:70)(cid:86)(cid:15)(cid:3)(cid:79)(cid:82)(cid:74)(cid:76)(cid:86)(cid:87)(cid:76)(cid:70)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:70)(cid:82)(cid:81)(cid:89)(cid:72)(cid:92)(cid:68)(cid:81)(cid:70)(cid:72)(cid:17)(cid:3)(cid:58)(cid:72)(cid:3)
(cid:68)(cid:71)(cid:71)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:70)(cid:68)(cid:83)(cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:76)(cid:86)(cid:3)(cid:86)(cid:83)(cid:68)(cid:70)(cid:72)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3) 
(cid:21)(cid:19)(cid:21)(cid:21)(cid:3)(cid:68)(cid:70)(cid:84)(cid:88)(cid:76)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:54)(cid:83)(cid:76)(cid:81)(cid:72)(cid:68)(cid:15)(cid:3)(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)(cid:83)(cid:85)(cid:76)(cid:80)(cid:68)(cid:85)(cid:76)(cid:79)(cid:92)(cid:3)(cid:86)(cid:72)(cid:85)(cid:89)(cid:72)(cid:86)(cid:3)
(cid:75)(cid:76)(cid:74)(cid:75)(cid:16)(cid:83)(cid:85)(cid:72)(cid:70)(cid:76)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:68)(cid:88)(cid:87)(cid:82)(cid:80)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:85)(cid:82)(cid:69)(cid:82)(cid:87)(cid:76)(cid:70)(cid:86)(cid:3)(cid:68)(cid:83)(cid:83)(cid:79)(cid:76)(cid:70)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:17)(cid:3)
(cid:58)(cid:72)(cid:3)(cid:68)(cid:79)(cid:86)(cid:82)(cid:3)(cid:82)(cid:73)(cid:73)(cid:72)(cid:85)(cid:3)(cid:68)(cid:88)(cid:87)(cid:82)(cid:80)(cid:68)(cid:87)(cid:76)(cid:70)(cid:3)(cid:79)(cid:88)(cid:69)(cid:85)(cid:76)(cid:70)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:86)(cid:92)(cid:86)(cid:87)(cid:72)(cid:80)(cid:86)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3) 
(cid:86)(cid:72)(cid:85)(cid:89)(cid:72)(cid:3)(cid:68)(cid:3)(cid:89)(cid:68)(cid:85)(cid:76)(cid:72)(cid:87)(cid:92)(cid:3)(cid:82)(cid:73)(cid:3)(cid:72)(cid:81)(cid:71)(cid:16)(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:3)(cid:86)(cid:72)(cid:70)(cid:87)(cid:82)(cid:85)(cid:86)(cid:15)(cid:3)(cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3) 
(cid:90)(cid:76)(cid:81)(cid:71)(cid:3)(cid:72)(cid:81)(cid:72)(cid:85)(cid:74)(cid:92)(cid:17)(cid:3)(cid:49)(cid:82)(cid:87)(cid:68)(cid:69)(cid:79)(cid:92)(cid:15)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:42)(cid:85)(cid:82)(cid:72)(cid:81)(cid:72)(cid:89)(cid:72)(cid:79)(cid:71)(cid:16)(cid:37)(cid:40)(cid:46)(cid:36)(cid:3)(cid:69)(cid:88)(cid:86)(cid:76)(cid:81)(cid:72)(cid:86)(cid:86)(cid:3)
(cid:76)(cid:86)(cid:3)(cid:68)(cid:80)(cid:82)(cid:81)(cid:74)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:90)(cid:82)(cid:85)(cid:79)(cid:71)(cid:333)(cid:86)(cid:3)(cid:79)(cid:68)(cid:85)(cid:74)(cid:72)(cid:86)(cid:87)(cid:3)(cid:83)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:72)(cid:85)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:68)(cid:88)(cid:87)(cid:82)(cid:80)(cid:68)(cid:87)(cid:76)(cid:70)(cid:3)
(cid:79)(cid:88)(cid:69)(cid:85)(cid:76)(cid:70)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:86)(cid:92)(cid:86)(cid:87)(cid:72)(cid:80)(cid:86)(cid:17)(cid:3)

(cid:58)(cid:72)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:68)(cid:79)(cid:86)(cid:82)(cid:3)(cid:86)(cid:70)(cid:68)(cid:79)(cid:76)(cid:81)(cid:74)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:82)(cid:73)(cid:73)(cid:72)(cid:85)(cid:76)(cid:81)(cid:74)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:41)(cid:9)(cid:37)(cid:3)(cid:87)(cid:82)(cid:3)(cid:86)(cid:72)(cid:85)(cid:89)(cid:72)(cid:3)
(cid:87)(cid:75)(cid:72)(cid:3)(cid:86)(cid:72)(cid:70)(cid:87)(cid:82)(cid:85)(cid:333)(cid:86)(cid:3)(cid:70)(cid:75)(cid:68)(cid:79)(cid:79)(cid:72)(cid:81)(cid:74)(cid:76)(cid:81)(cid:74)(cid:3)(cid:68)(cid:83)(cid:83)(cid:79)(cid:76)(cid:70)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:17)(cid:3)(cid:41)(cid:9)(cid:37)(cid:3)(cid:73)(cid:68)(cid:70)(cid:87)(cid:82)(cid:85)(cid:92)(cid:3)
(cid:72)(cid:84)(cid:88)(cid:76)(cid:83)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:75)(cid:68)(cid:86)(cid:3)(cid:80)(cid:68)(cid:81)(cid:92)(cid:3)(cid:85)(cid:82)(cid:87)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:83)(cid:68)(cid:85)(cid:87)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:76)(cid:86)(cid:3)(cid:75)(cid:76)(cid:74)(cid:75)(cid:79)(cid:92)(cid:3)
(cid:85)(cid:72)(cid:74)(cid:88)(cid:79)(cid:68)(cid:87)(cid:72)(cid:71)(cid:17)(cid:3)(cid:44)(cid:87)(cid:86)(cid:3)(cid:70)(cid:88)(cid:86)(cid:87)(cid:82)(cid:80)(cid:72)(cid:85)(cid:86)(cid:3)(cid:71)(cid:72)(cid:80)(cid:68)(cid:81)(cid:71)(cid:3)(cid:74)(cid:85)(cid:72)(cid:68)(cid:87)(cid:3)(cid:87)(cid:72)(cid:70)(cid:75)(cid:81)(cid:76)(cid:70)(cid:68)(cid:79)(cid:3)
(cid:68)(cid:81)(cid:71)(cid:3)(cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:85)(cid:72)(cid:84)(cid:88)(cid:76)(cid:85)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:15)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:92)(cid:3)(cid:71)(cid:82)(cid:81)(cid:333)(cid:87)(cid:3)(cid:73)(cid:82)(cid:79)(cid:79)(cid:82)(cid:90)(cid:3)
(cid:68)(cid:3)(cid:87)(cid:85)(cid:68)(cid:71)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:68)(cid:79)(cid:3)(cid:76)(cid:81)(cid:71)(cid:88)(cid:86)(cid:87)(cid:85)(cid:76)(cid:68)(cid:79)(cid:3)(cid:70)(cid:68)(cid:83)(cid:76)(cid:87)(cid:68)(cid:79)(cid:3)(cid:74)(cid:82)(cid:82)(cid:71)(cid:86)(cid:3)(cid:70)(cid:92)(cid:70)(cid:79)(cid:72)(cid:17)(cid:3)(cid:55)(cid:82)(cid:3)(cid:80)(cid:72)(cid:72)(cid:87)(cid:3)
(cid:87)(cid:75)(cid:72)(cid:76)(cid:85)(cid:3)(cid:81)(cid:72)(cid:72)(cid:71)(cid:86)(cid:15)(cid:3)(cid:90)(cid:72)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:69)(cid:72)(cid:72)(cid:81)(cid:3)(cid:69)(cid:88)(cid:76)(cid:79)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:41)(cid:9)(cid:37)(cid:3)(cid:83)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:3)
(cid:82)(cid:73)(cid:73)(cid:72)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3)(cid:69)(cid:82)(cid:87)(cid:75)(cid:3)(cid:82)(cid:85)(cid:74)(cid:68)(cid:81)(cid:76)(cid:70)(cid:68)(cid:79)(cid:79)(cid:92)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:76)(cid:81)(cid:82)(cid:85)(cid:74)(cid:68)(cid:81)(cid:76)(cid:70)(cid:68)(cid:79)(cid:79)(cid:92)(cid:17)(cid:3)(cid:50)(cid:88)(cid:85)(cid:3) 
(cid:85)(cid:72)(cid:70)(cid:72)(cid:81)(cid:87)(cid:3)(cid:68)(cid:70)(cid:84)(cid:88)(cid:76)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:42)(cid:42)(cid:37)(cid:3)(cid:37)(cid:72)(cid:68)(cid:85)(cid:76)(cid:81)(cid:74)(cid:86)(cid:3)(cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:71)(cid:72)(cid:86)(cid:3)
(cid:68)(cid:71)(cid:71)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:68)(cid:79)(cid:3)(cid:87)(cid:72)(cid:70)(cid:75)(cid:81)(cid:76)(cid:70)(cid:68)(cid:79)(cid:3)(cid:86)(cid:82)(cid:79)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:87)(cid:75)(cid:76)(cid:86)(cid:3)(cid:87)(cid:68)(cid:85)(cid:74)(cid:72)(cid:87)(cid:3)(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:3)
(cid:68)(cid:81)(cid:71)(cid:3)(cid:76)(cid:86)(cid:3)(cid:72)(cid:91)(cid:83)(cid:72)(cid:70)(cid:87)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:69)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3)(cid:81)(cid:72)(cid:90)(cid:3)(cid:70)(cid:88)(cid:86)(cid:87)(cid:82)(cid:80)(cid:72)(cid:85)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:55)(cid:76)(cid:80)(cid:78)(cid:72)(cid:81)(cid:17)(cid:3)

(cid:38)(cid:82)(cid:81)(cid:70)(cid:88)(cid:85)(cid:85)(cid:72)(cid:81)(cid:87)(cid:79)(cid:92)(cid:15)(cid:3)(cid:90)(cid:72)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:80)(cid:68)(cid:76)(cid:81)(cid:87)(cid:68)(cid:76)(cid:81)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:79)(cid:72)(cid:68)(cid:71)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:3)
(cid:76)(cid:81)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:87)(cid:85)(cid:68)(cid:71)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:68)(cid:79)(cid:3)(cid:70)(cid:82)(cid:85)(cid:72)(cid:3)(cid:72)(cid:81)(cid:71)(cid:16)(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:3)(cid:86)(cid:72)(cid:70)(cid:87)(cid:82)(cid:85)(cid:86)(cid:15)(cid:3)(cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)
(cid:82)(cid:73)(cid:73)(cid:16)(cid:75)(cid:76)(cid:74)(cid:75)(cid:90)(cid:68)(cid:92)(cid:15)(cid:3)(cid:75)(cid:72)(cid:68)(cid:89)(cid:92)(cid:3)(cid:76)(cid:81)(cid:71)(cid:88)(cid:86)(cid:87)(cid:85)(cid:76)(cid:72)(cid:86)(cid:15)(cid:3)(cid:74)(cid:72)(cid:81)(cid:72)(cid:85)(cid:68)(cid:79)(cid:3)(cid:76)(cid:81)(cid:71)(cid:88)(cid:86)(cid:87)(cid:85)(cid:76)(cid:68)(cid:79)(cid:15)(cid:3)
(cid:68)(cid:72)(cid:85)(cid:82)(cid:86)(cid:83)(cid:68)(cid:70)(cid:72)(cid:18)(cid:71)(cid:72)(cid:73)(cid:72)(cid:81)(cid:86)(cid:72)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:85)(cid:68)(cid:76)(cid:79)(cid:15)(cid:3)(cid:68)(cid:79)(cid:79)(cid:3)(cid:82)(cid:73)(cid:3)(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)(cid:85)(cid:72)(cid:80)(cid:68)(cid:76)(cid:81)(cid:3)(cid:70)(cid:85)(cid:76)(cid:87)(cid:76)(cid:70)(cid:68)(cid:79)(cid:3)
(cid:87)(cid:82)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:74)(cid:79)(cid:82)(cid:69)(cid:68)(cid:79)(cid:3)(cid:74)(cid:85)(cid:82)(cid:90)(cid:87)(cid:75)(cid:17)(cid:3)(cid:50)(cid:88)(cid:85)(cid:3)(cid:70)(cid:88)(cid:86)(cid:87)(cid:82)(cid:80)(cid:72)(cid:85)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:74)(cid:72)(cid:82)(cid:74)(cid:85)(cid:68)(cid:83)(cid:75)(cid:76)(cid:70)(cid:3)
(cid:69)(cid:85)(cid:72)(cid:68)(cid:71)(cid:87)(cid:75)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:80)(cid:68)(cid:74)(cid:81)(cid:76)(cid:87)(cid:88)(cid:71)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:76)(cid:81)(cid:86)(cid:87)(cid:68)(cid:79)(cid:79)(cid:72)(cid:71)(cid:3)(cid:69)(cid:68)(cid:86)(cid:72)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3) 
(cid:82)(cid:88)(cid:85)(cid:3)(cid:68)(cid:83)(cid:83)(cid:79)(cid:76)(cid:70)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:71)(cid:72)(cid:89)(cid:72)(cid:79)(cid:82)(cid:83)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:83)(cid:76)(cid:83)(cid:72)(cid:79)(cid:76)(cid:81)(cid:72)(cid:3)(cid:68)(cid:79)(cid:79)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:72)(cid:3)
(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:74)(cid:85)(cid:82)(cid:90)(cid:87)(cid:75)(cid:15)(cid:3)(cid:85)(cid:72)(cid:86)(cid:76)(cid:79)(cid:76)(cid:72)(cid:81)(cid:70)(cid:72)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:71)(cid:76)(cid:89)(cid:72)(cid:85)(cid:86)(cid:76)(cid:87)(cid:92)(cid:3)(cid:82)(cid:73)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:83)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:3)
(cid:83)(cid:82)(cid:85)(cid:87)(cid:73)(cid:82)(cid:79)(cid:76)(cid:82)(cid:17)(cid:3)(cid:58)(cid:72)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:81)(cid:82)(cid:87)(cid:3)(cid:71)(cid:72)(cid:83)(cid:72)(cid:81)(cid:71)(cid:72)(cid:81)(cid:87)(cid:3)(cid:82)(cid:81)(cid:3)(cid:68)(cid:81)(cid:92)(cid:3)(cid:82)(cid:81)(cid:72)(cid:3)(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:3) 
(cid:82)(cid:85)(cid:3)(cid:70)(cid:88)(cid:86)(cid:87)(cid:82)(cid:80)(cid:72)(cid:85)(cid:17)(cid:3)(cid:58)(cid:72)(cid:3)(cid:86)(cid:72)(cid:85)(cid:89)(cid:72)(cid:3)(cid:68)(cid:3)(cid:79)(cid:68)(cid:85)(cid:74)(cid:72)(cid:3)(cid:76)(cid:81)(cid:86)(cid:87)(cid:68)(cid:79)(cid:79)(cid:72)(cid:71)(cid:3)(cid:69)(cid:68)(cid:86)(cid:72)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)
(cid:70)(cid:85)(cid:72)(cid:68)(cid:87)(cid:72)(cid:86)(cid:3)(cid:85)(cid:72)(cid:70)(cid:88)(cid:85)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3)(cid:85)(cid:72)(cid:89)(cid:72)(cid:81)(cid:88)(cid:72)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:83)(cid:82)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)
(cid:90)(cid:76)(cid:81)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:70)(cid:88)(cid:86)(cid:87)(cid:82)(cid:80)(cid:72)(cid:85)(cid:16)(cid:71)(cid:85)(cid:76)(cid:89)(cid:72)(cid:81)(cid:3)(cid:76)(cid:81)(cid:81)(cid:82)(cid:89)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:81)(cid:72)(cid:91)(cid:87)(cid:16)
(cid:74)(cid:72)(cid:81)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:68)(cid:83)(cid:83)(cid:79)(cid:76)(cid:70)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:17)(cid:3)

2

THE TIMKEN COMPANY

412691_TKR 2022 AR Narrative_Print.indd   2

3/6/23   9:15 PM

“We have been working to broaden our industry 
mix to include more attractive end-market sectors 
(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:86)(cid:87)(cid:85)(cid:82)(cid:81)(cid:74)(cid:3)(cid:74)(cid:85)(cid:82)(cid:90)(cid:87)(cid:75)(cid:3)(cid:80)(cid:68)(cid:70)(cid:85)(cid:82)(cid:86)(cid:15)(cid:3)(cid:74)(cid:82)(cid:82)(cid:71)(cid:3)(cid:83)(cid:85)(cid:82)(cid:403)(cid:87)(cid:3)(cid:83)(cid:82)(cid:82)(cid:79)(cid:86)(cid:3) 
(cid:68)(cid:81)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:80)(cid:68)(cid:81)(cid:92)(cid:3)(cid:70)(cid:68)(cid:86)(cid:72)(cid:86)(cid:3)(cid:71)(cid:76)(cid:73)(cid:73)(cid:72)(cid:85)(cid:72)(cid:81)(cid:87)(cid:3)(cid:70)(cid:92)(cid:70)(cid:79)(cid:76)(cid:70)(cid:68)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3)(cid:83)(cid:85)(cid:82)(cid:403)(cid:79)(cid:72)(cid:86)(cid:17)(cid:3)

Since 2014, we have tripled our annual revenue 
in these newer sectors, which include renewable 
energy, automation, marine, food and beverage 
(cid:68)(cid:81)(cid:71)(cid:3)(cid:83)(cid:68)(cid:86)(cid:86)(cid:72)(cid:81)(cid:74)(cid:72)(cid:85)(cid:3)(cid:85)(cid:68)(cid:76)(cid:79)(cid:17)(cid:336)

(cid:53)(cid:76)(cid:70)(cid:75)(cid:68)(cid:85)(cid:71)(cid:3)(cid:42)(cid:17)(cid:3)(cid:46)(cid:92)(cid:79)(cid:72)
President & CEO

412691_TKR 2022 AR Narrative_Print.indd   3

3/6/23   9:15 PM

2022 ANNUAL REPORT

3

A Focus on Sustainability 
(cid:54)(cid:88)(cid:86)(cid:87)(cid:68)(cid:76)(cid:81)(cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3)(cid:83)(cid:85)(cid:72)(cid:86)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:68)(cid:81)(cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:80)(cid:68)(cid:77)(cid:82)(cid:85)(cid:3)(cid:82)(cid:83)(cid:83)(cid:82)(cid:85)(cid:87)(cid:88)(cid:81)(cid:76)(cid:87)(cid:92)(cid:3) 
(cid:73)(cid:82)(cid:85)(cid:3)(cid:88)(cid:86)(cid:3)(cid:331)(cid:3)(cid:69)(cid:82)(cid:87)(cid:75)(cid:3)(cid:68)(cid:86)(cid:3)(cid:68)(cid:81)(cid:3)(cid:76)(cid:81)(cid:71)(cid:88)(cid:86)(cid:87)(cid:85)(cid:76)(cid:68)(cid:79)(cid:3)(cid:79)(cid:72)(cid:68)(cid:71)(cid:72)(cid:85)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:68)(cid:3)(cid:85)(cid:72)(cid:86)(cid:83)(cid:82)(cid:81)(cid:86)(cid:76)(cid:69)(cid:79)(cid:72)(cid:3)
(cid:70)(cid:82)(cid:85)(cid:83)(cid:82)(cid:85)(cid:68)(cid:87)(cid:72)(cid:3)(cid:70)(cid:76)(cid:87)(cid:76)(cid:93)(cid:72)(cid:81)(cid:17)

(cid:36)(cid:70)(cid:85)(cid:82)(cid:86)(cid:86)(cid:3)(cid:68)(cid:3)(cid:90)(cid:76)(cid:71)(cid:72)(cid:3)(cid:85)(cid:68)(cid:81)(cid:74)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:72)(cid:81)(cid:71)(cid:16)(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:3)(cid:86)(cid:72)(cid:70)(cid:87)(cid:82)(cid:85)(cid:86)(cid:15)(cid:3)(cid:70)(cid:88)(cid:86)(cid:87)(cid:82)(cid:80)(cid:72)(cid:85)(cid:86)(cid:3)
(cid:90)(cid:82)(cid:85)(cid:79)(cid:71)(cid:90)(cid:76)(cid:71)(cid:72)(cid:3)(cid:89)(cid:68)(cid:79)(cid:88)(cid:72)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:87)(cid:72)(cid:70)(cid:75)(cid:81)(cid:82)(cid:79)(cid:82)(cid:74)(cid:92)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:86)(cid:72)(cid:85)(cid:89)(cid:76)(cid:70)(cid:72)(cid:17)(cid:3)(cid:55)(cid:76)(cid:80)(cid:78)(cid:72)(cid:81)(cid:3)
(cid:76)(cid:86)(cid:3)(cid:87)(cid:82)(cid:83)(cid:3)(cid:82)(cid:73)(cid:3)(cid:80)(cid:76)(cid:81)(cid:71)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:70)(cid:88)(cid:86)(cid:87)(cid:82)(cid:80)(cid:72)(cid:85)(cid:86)(cid:3)(cid:68)(cid:86)(cid:3)(cid:87)(cid:75)(cid:72)(cid:92)(cid:3)(cid:71)(cid:72)(cid:89)(cid:72)(cid:79)(cid:82)(cid:83)(cid:3)(cid:80)(cid:82)(cid:85)(cid:72)(cid:3)
(cid:86)(cid:88)(cid:86)(cid:87)(cid:68)(cid:76)(cid:81)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:72)(cid:84)(cid:88)(cid:76)(cid:83)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:86)(cid:82)(cid:79)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:17)(cid:3)(cid:53)(cid:72)(cid:81)(cid:72)(cid:90)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:72)(cid:81)(cid:72)(cid:85)(cid:74)(cid:92)(cid:3)
(cid:85)(cid:72)(cid:80)(cid:68)(cid:76)(cid:81)(cid:86)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:86)(cid:76)(cid:81)(cid:74)(cid:79)(cid:72)(cid:3)(cid:79)(cid:68)(cid:85)(cid:74)(cid:72)(cid:86)(cid:87)(cid:3)(cid:76)(cid:81)(cid:71)(cid:76)(cid:89)(cid:76)(cid:71)(cid:88)(cid:68)(cid:79)(cid:3)(cid:72)(cid:81)(cid:71)(cid:16)(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:3)(cid:86)(cid:72)(cid:70)(cid:87)(cid:82)(cid:85) 
(cid:68)(cid:87)(cid:3)(cid:68)(cid:85)(cid:82)(cid:88)(cid:81)(cid:71)(cid:3)(cid:20)(cid:19)(cid:3)(cid:83)(cid:72)(cid:85)(cid:70)(cid:72)(cid:81)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:86)(cid:68)(cid:79)(cid:72)(cid:86)(cid:17)(cid:3)

(cid:58)(cid:72)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:72)(cid:3)(cid:86)(cid:76)(cid:74)(cid:81)(cid:76)(cid:403)(cid:70)(cid:68)(cid:81)(cid:87)(cid:79)(cid:92)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:74)(cid:79)(cid:82)(cid:69)(cid:68)(cid:79)(cid:3)
(cid:86)(cid:75)(cid:76)(cid:73)(cid:87)(cid:3)(cid:87)(cid:82)(cid:3)(cid:85)(cid:72)(cid:81)(cid:72)(cid:90)(cid:68)(cid:69)(cid:79)(cid:72)(cid:16)(cid:72)(cid:81)(cid:72)(cid:85)(cid:74)(cid:92)(cid:3)(cid:83)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:83)(cid:85)(cid:82)(cid:88)(cid:71)(cid:3)
(cid:87)(cid:82)(cid:3)(cid:69)(cid:72)(cid:3)(cid:68)(cid:3)(cid:79)(cid:72)(cid:68)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:86)(cid:88)(cid:83)(cid:83)(cid:79)(cid:76)(cid:72)(cid:85)(cid:3)(cid:87)(cid:82)(cid:3)(cid:86)(cid:82)(cid:80)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:90)(cid:82)(cid:85)(cid:79)(cid:71)(cid:333)(cid:86)(cid:3)(cid:80)(cid:82)(cid:86)(cid:87)(cid:3)
(cid:86)(cid:76)(cid:74)(cid:81)(cid:76)(cid:403)(cid:70)(cid:68)(cid:81)(cid:87)(cid:3)(cid:90)(cid:76)(cid:81)(cid:71)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:86)(cid:82)(cid:79)(cid:68)(cid:85)(cid:3)(cid:83)(cid:85)(cid:82)(cid:77)(cid:72)(cid:70)(cid:87)(cid:86)(cid:17)(cid:3)(cid:58)(cid:72)(cid:3)(cid:80)(cid:68)(cid:81)(cid:88)(cid:73)(cid:68)(cid:70)(cid:87)(cid:88)(cid:85)(cid:72)(cid:3)
(cid:72)(cid:81)(cid:74)(cid:76)(cid:81)(cid:72)(cid:72)(cid:85)(cid:72)(cid:71)(cid:3)(cid:69)(cid:72)(cid:68)(cid:85)(cid:76)(cid:81)(cid:74)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:76)(cid:81)(cid:71)(cid:88)(cid:86)(cid:87)(cid:85)(cid:76)(cid:68)(cid:79)(cid:3)(cid:80)(cid:82)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:83)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:86)(cid:3)
(cid:73)(cid:82)(cid:85)(cid:3)(cid:90)(cid:76)(cid:81)(cid:71)(cid:3)(cid:87)(cid:88)(cid:85)(cid:69)(cid:76)(cid:81)(cid:72)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:71)(cid:72)(cid:3)(cid:70)(cid:85)(cid:76)(cid:87)(cid:76)(cid:70)(cid:68)(cid:79)(cid:3)(cid:71)(cid:85)(cid:76)(cid:89)(cid:72)(cid:3)(cid:86)(cid:92)(cid:86)(cid:87)(cid:72)(cid:80)(cid:86)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)
(cid:86)(cid:82)(cid:79)(cid:68)(cid:85)(cid:3)(cid:72)(cid:84)(cid:88)(cid:76)(cid:83)(cid:80)(cid:72)(cid:81)(cid:87)(cid:17)(cid:3)(cid:36)(cid:70)(cid:85)(cid:82)(cid:86)(cid:86)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:69)(cid:82)(cid:68)(cid:85)(cid:71)(cid:15)(cid:3)(cid:55)(cid:76)(cid:80)(cid:78)(cid:72)(cid:81)(cid:3)(cid:87)(cid:72)(cid:70)(cid:75)(cid:81)(cid:82)(cid:79)(cid:82)(cid:74)(cid:92)(cid:3)
(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:72)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:80)(cid:68)(cid:78)(cid:72)(cid:3)(cid:85)(cid:72)(cid:81)(cid:72)(cid:90)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:72)(cid:81)(cid:72)(cid:85)(cid:74)(cid:92)(cid:3)(cid:80)(cid:82)(cid:85)(cid:72)(cid:3)(cid:72)(cid:73)(cid:403)(cid:70)(cid:76)(cid:72)(cid:81)(cid:87)(cid:15)(cid:3)
(cid:80)(cid:82)(cid:85)(cid:72)(cid:3)(cid:85)(cid:72)(cid:79)(cid:76)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:80)(cid:82)(cid:85)(cid:72)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:72)(cid:87)(cid:76)(cid:87)(cid:76)(cid:89)(cid:72)(cid:17)(cid:3)

(cid:37)(cid:88)(cid:87)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:86)(cid:88)(cid:86)(cid:87)(cid:68)(cid:76)(cid:81)(cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3)(cid:73)(cid:82)(cid:70)(cid:88)(cid:86)(cid:3)(cid:74)(cid:82)(cid:72)(cid:86)(cid:3)(cid:90)(cid:72)(cid:79)(cid:79)(cid:3)(cid:69)(cid:72)(cid:92)(cid:82)(cid:81)(cid:71)(cid:3)
(cid:85)(cid:72)(cid:81)(cid:72)(cid:90)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:72)(cid:81)(cid:72)(cid:85)(cid:74)(cid:92)(cid:17)(cid:3)(cid:40)(cid:79)(cid:72)(cid:70)(cid:87)(cid:85)(cid:76)(cid:403)(cid:70)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:76)(cid:86)(cid:3)(cid:68)(cid:3)(cid:74)(cid:85)(cid:82)(cid:90)(cid:76)(cid:81)(cid:74)(cid:3)
(cid:87)(cid:85)(cid:72)(cid:81)(cid:71)(cid:15)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:90)(cid:72)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:90)(cid:76)(cid:81)(cid:81)(cid:76)(cid:81)(cid:74)(cid:3)(cid:76)(cid:81)(cid:3)(cid:72)(cid:79)(cid:72)(cid:70)(cid:87)(cid:85)(cid:76)(cid:403)(cid:70)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)
(cid:75)(cid:92)(cid:69)(cid:85)(cid:76)(cid:71)(cid:3)(cid:71)(cid:72)(cid:86)(cid:76)(cid:74)(cid:81)(cid:86)(cid:3)(cid:68)(cid:70)(cid:85)(cid:82)(cid:86)(cid:86)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:86)(cid:15)(cid:3)(cid:69)(cid:72)(cid:70)(cid:68)(cid:88)(cid:86)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)
(cid:86)(cid:83)(cid:72)(cid:70)(cid:76)(cid:68)(cid:79)(cid:76)(cid:93)(cid:72)(cid:71)(cid:3)(cid:72)(cid:91)(cid:83)(cid:72)(cid:85)(cid:87)(cid:76)(cid:86)(cid:72)(cid:3)(cid:76)(cid:81)(cid:3)(cid:83)(cid:82)(cid:90)(cid:72)(cid:85)(cid:3)(cid:87)(cid:85)(cid:68)(cid:81)(cid:86)(cid:80)(cid:76)(cid:86)(cid:86)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3)(cid:73)(cid:85)(cid:76)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)
(cid:80)(cid:68)(cid:81)(cid:68)(cid:74)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:80)(cid:68)(cid:87)(cid:72)(cid:85)(cid:76)(cid:68)(cid:79)(cid:86)(cid:3)(cid:86)(cid:70)(cid:76)(cid:72)(cid:81)(cid:70)(cid:72)(cid:17)

(cid:48)(cid:82)(cid:85)(cid:72)(cid:3)(cid:69)(cid:85)(cid:82)(cid:68)(cid:71)(cid:79)(cid:92)(cid:15)(cid:3)(cid:50)(cid:40)(cid:48)(cid:86)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:68)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:79)(cid:92)(cid:3)(cid:90)(cid:82)(cid:85)(cid:78)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:82)(cid:3)(cid:76)(cid:80)(cid:83)(cid:85)(cid:82)(cid:89)(cid:72)(cid:3)
(cid:87)(cid:75)(cid:72)(cid:3)(cid:86)(cid:88)(cid:86)(cid:87)(cid:68)(cid:76)(cid:81)(cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:76)(cid:85)(cid:3)(cid:72)(cid:84)(cid:88)(cid:76)(cid:83)(cid:80)(cid:72)(cid:81)(cid:87)(cid:15)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:80)(cid:68)(cid:81)(cid:92)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)
(cid:87)(cid:88)(cid:85)(cid:81)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:82)(cid:3)(cid:88)(cid:86)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:72)(cid:91)(cid:83)(cid:72)(cid:85)(cid:87)(cid:76)(cid:86)(cid:72)(cid:3)(cid:76)(cid:81)(cid:3)(cid:79)(cid:76)(cid:74)(cid:75)(cid:87)(cid:16)(cid:90)(cid:72)(cid:76)(cid:74)(cid:75)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)
(cid:68)(cid:81)(cid:71)(cid:3)(cid:73)(cid:88)(cid:72)(cid:79)(cid:16)(cid:72)(cid:73)(cid:403)(cid:70)(cid:76)(cid:72)(cid:81)(cid:87)(cid:3)(cid:68)(cid:83)(cid:83)(cid:79)(cid:76)(cid:70)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:17)(cid:3)(cid:55)(cid:75)(cid:76)(cid:86)(cid:3)(cid:83)(cid:85)(cid:82)(cid:70)(cid:72)(cid:86)(cid:86)(cid:3)(cid:85)(cid:72)(cid:84)(cid:88)(cid:76)(cid:85)(cid:72)(cid:86)(cid:3)
(cid:72)(cid:81)(cid:74)(cid:76)(cid:81)(cid:72)(cid:72)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3)(cid:71)(cid:72)(cid:86)(cid:76)(cid:74)(cid:81)(cid:86)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:75)(cid:72)(cid:79)(cid:83)(cid:3)(cid:85)(cid:72)(cid:71)(cid:88)(cid:70)(cid:72)(cid:3)(cid:90)(cid:72)(cid:76)(cid:74)(cid:75)(cid:87)(cid:15)(cid:3)(cid:73)(cid:85)(cid:76)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3)
(cid:72)(cid:80)(cid:76)(cid:86)(cid:86)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:86)(cid:76)(cid:93)(cid:72)(cid:15)(cid:3)(cid:90)(cid:75)(cid:76)(cid:79)(cid:72)(cid:3)(cid:88)(cid:86)(cid:76)(cid:81)(cid:74)(cid:3)(cid:71)(cid:76)(cid:73)(cid:73)(cid:72)(cid:85)(cid:72)(cid:81)(cid:87)(cid:3)(cid:86)(cid:82)(cid:88)(cid:85)(cid:70)(cid:72)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)
(cid:72)(cid:81)(cid:72)(cid:85)(cid:74)(cid:92)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:82)(cid:3)(cid:71)(cid:72)(cid:79)(cid:76)(cid:89)(cid:72)(cid:85)(cid:3)(cid:85)(cid:82)(cid:87)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:68)(cid:79)(cid:3)(cid:80)(cid:82)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)
(cid:68)(cid:81)(cid:71)(cid:3)(cid:87)(cid:85)(cid:68)(cid:81)(cid:86)(cid:73)(cid:72)(cid:85)(cid:3)(cid:79)(cid:82)(cid:68)(cid:71)(cid:86)(cid:17)(cid:3)(cid:48)(cid:68)(cid:81)(cid:92)(cid:3)(cid:82)(cid:73)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:85)(cid:72)(cid:70)(cid:72)(cid:81)(cid:87)(cid:3)(cid:68)(cid:70)(cid:84)(cid:88)(cid:76)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:331) 
(cid:38)(cid:82)(cid:81)(cid:72)(cid:3)(cid:39)(cid:85)(cid:76)(cid:89)(cid:72)(cid:15)(cid:3)(cid:42)(cid:85)(cid:82)(cid:72)(cid:81)(cid:72)(cid:89)(cid:72)(cid:79)(cid:71)(cid:16)(cid:37)(cid:40)(cid:46)(cid:36)(cid:15)(cid:3)(cid:53)(cid:82)(cid:79)(cid:79)(cid:82)(cid:81)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:54)(cid:83)(cid:76)(cid:81)(cid:72)(cid:68)(cid:3)(cid:331)(cid:3) 
(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:70)(cid:85)(cid:72)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:82)(cid:83)(cid:83)(cid:82)(cid:85)(cid:87)(cid:88)(cid:81)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:88)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:76)(cid:86)(cid:3)(cid:85)(cid:68)(cid:83)(cid:76)(cid:71)(cid:79)(cid:92)(cid:3)
(cid:72)(cid:89)(cid:82)(cid:79)(cid:89)(cid:76)(cid:81)(cid:74)(cid:3)(cid:86)(cid:83)(cid:68)(cid:70)(cid:72)(cid:17)(cid:3)

(cid:38)(cid:82)(cid:85)(cid:83)(cid:82)(cid:85)(cid:68)(cid:87)(cid:72)(cid:3)(cid:54)(cid:82)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:53)(cid:72)(cid:86)(cid:83)(cid:82)(cid:81)(cid:86)(cid:76)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3)(cid:11)(cid:38)(cid:54)(cid:53)(cid:12) 
(cid:55)(cid:76)(cid:80)(cid:78)(cid:72)(cid:81)(cid:3)(cid:75)(cid:68)(cid:86)(cid:3)(cid:68)(cid:3)(cid:79)(cid:82)(cid:81)(cid:74)(cid:3)(cid:75)(cid:76)(cid:86)(cid:87)(cid:82)(cid:85)(cid:92)(cid:3)(cid:68)(cid:86)(cid:3)(cid:68)(cid:81)(cid:3)(cid:72)(cid:91)(cid:70)(cid:72)(cid:79)(cid:79)(cid:72)(cid:81)(cid:87)(cid:3)(cid:70)(cid:82)(cid:85)(cid:83)(cid:82)(cid:85)(cid:68)(cid:87)(cid:72)(cid:3)
(cid:70)(cid:76)(cid:87)(cid:76)(cid:93)(cid:72)(cid:81)(cid:17)(cid:3)(cid:44)(cid:87)(cid:3)(cid:69)(cid:72)(cid:74)(cid:76)(cid:81)(cid:86)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:73)(cid:82)(cid:88)(cid:81)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:80)(cid:76)(cid:86)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:87)(cid:82)(cid:3)
(cid:70)(cid:85)(cid:72)(cid:68)(cid:87)(cid:72)(cid:3)(cid:86)(cid:88)(cid:86)(cid:87)(cid:68)(cid:76)(cid:81)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:86)(cid:82)(cid:79)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:70)(cid:88)(cid:86)(cid:87)(cid:82)(cid:80)(cid:72)(cid:85)(cid:86)(cid:333)(cid:3)(cid:80)(cid:82)(cid:86)(cid:87)(cid:3)
(cid:70)(cid:75)(cid:68)(cid:79)(cid:79)(cid:72)(cid:81)(cid:74)(cid:76)(cid:81)(cid:74)(cid:3)(cid:83)(cid:85)(cid:82)(cid:69)(cid:79)(cid:72)(cid:80)(cid:86)(cid:17)(cid:3)(cid:58)(cid:72)(cid:3)(cid:68)(cid:83)(cid:83)(cid:79)(cid:92)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:86)(cid:68)(cid:80)(cid:72)(cid:3)(cid:68)(cid:83)(cid:83)(cid:85)(cid:82)(cid:68)(cid:70)(cid:75)(cid:3)
(cid:87)(cid:82)(cid:3)(cid:70)(cid:82)(cid:85)(cid:83)(cid:82)(cid:85)(cid:68)(cid:87)(cid:72)(cid:3)(cid:86)(cid:82)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:85)(cid:72)(cid:86)(cid:83)(cid:82)(cid:81)(cid:86)(cid:76)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:74)(cid:82)(cid:68)(cid:79)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)
(cid:76)(cid:81)(cid:76)(cid:87)(cid:76)(cid:68)(cid:87)(cid:76)(cid:89)(cid:72)(cid:86)(cid:3)(cid:90)(cid:72)(cid:3)(cid:70)(cid:75)(cid:82)(cid:82)(cid:86)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:68)(cid:71)(cid:89)(cid:68)(cid:81)(cid:70)(cid:72)(cid:17)(cid:3)(cid:58)(cid:72)(cid:3)(cid:83)(cid:85)(cid:76)(cid:82)(cid:85)(cid:76)(cid:87)(cid:76)(cid:93)(cid:72)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)
(cid:85)(cid:72)(cid:86)(cid:82)(cid:88)(cid:85)(cid:70)(cid:72)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:76)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:90)(cid:75)(cid:72)(cid:85)(cid:72)(cid:3)(cid:90)(cid:72)(cid:3)(cid:69)(cid:72)(cid:79)(cid:76)(cid:72)(cid:89)(cid:72)(cid:3)(cid:90)(cid:72)(cid:3)

(cid:70)(cid:68)(cid:81)(cid:3)(cid:80)(cid:68)(cid:78)(cid:72)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:74)(cid:85)(cid:72)(cid:68)(cid:87)(cid:72)(cid:86)(cid:87)(cid:3)(cid:76)(cid:80)(cid:83)(cid:68)(cid:70)(cid:87)(cid:15)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:90)(cid:72)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:71)(cid:85)(cid:76)(cid:89)(cid:76)(cid:81)(cid:74)(cid:3)
(cid:86)(cid:88)(cid:86)(cid:87)(cid:68)(cid:76)(cid:81)(cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:83)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:86)(cid:3)(cid:90)(cid:72)(cid:3)(cid:80)(cid:68)(cid:78)(cid:72)(cid:15)(cid:3)(cid:87)(cid:75)(cid:85)(cid:82)(cid:88)(cid:74)(cid:75)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)
(cid:76)(cid:81)(cid:71)(cid:88)(cid:86)(cid:87)(cid:85)(cid:76)(cid:72)(cid:86)(cid:3)(cid:90)(cid:72)(cid:3)(cid:86)(cid:72)(cid:85)(cid:89)(cid:72)(cid:15)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:68)(cid:70)(cid:85)(cid:82)(cid:86)(cid:86)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:74)(cid:79)(cid:82)(cid:69)(cid:68)(cid:79)(cid:3)(cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:17)(cid:3)

(cid:58)(cid:72)(cid:3)(cid:68)(cid:79)(cid:86)(cid:82)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:76)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:71)(cid:72)(cid:89)(cid:72)(cid:79)(cid:82)(cid:83)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)
(cid:82)(cid:88)(cid:85)(cid:3)(cid:83)(cid:72)(cid:82)(cid:83)(cid:79)(cid:72)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:71)(cid:76)(cid:89)(cid:72)(cid:85)(cid:86)(cid:76)(cid:87)(cid:92)(cid:3)(cid:82)(cid:73)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:90)(cid:82)(cid:85)(cid:78)(cid:73)(cid:82)(cid:85)(cid:70)(cid:72)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:86)(cid:68)(cid:73)(cid:72)(cid:87)(cid:92)(cid:3)
(cid:68)(cid:70)(cid:85)(cid:82)(cid:86)(cid:86)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:72)(cid:81)(cid:87)(cid:72)(cid:85)(cid:83)(cid:85)(cid:76)(cid:86)(cid:72)(cid:17)(cid:3)(cid:58)(cid:72)(cid:3)(cid:74)(cid:76)(cid:89)(cid:72)(cid:3)(cid:69)(cid:68)(cid:70)(cid:78)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:80)(cid:68)(cid:78)(cid:72)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)
(cid:70)(cid:82)(cid:80)(cid:80)(cid:88)(cid:81)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3)(cid:86)(cid:87)(cid:85)(cid:82)(cid:81)(cid:74)(cid:72)(cid:85)(cid:3)(cid:90)(cid:75)(cid:76)(cid:79)(cid:72)(cid:3)(cid:79)(cid:72)(cid:68)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:74)(cid:79)(cid:82)(cid:69)(cid:68)(cid:79)(cid:3)
(cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:72)(cid:87)(cid:75)(cid:76)(cid:70)(cid:68)(cid:79)(cid:79)(cid:92)(cid:3)(cid:69)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3)(cid:82)(cid:81)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:86)(cid:87)(cid:85)(cid:82)(cid:81)(cid:74)(cid:3)(cid:70)(cid:82)(cid:85)(cid:83)(cid:82)(cid:85)(cid:68)(cid:87)(cid:72)(cid:3)
(cid:74)(cid:82)(cid:89)(cid:72)(cid:85)(cid:81)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:83)(cid:85)(cid:68)(cid:70)(cid:87)(cid:76)(cid:70)(cid:72)(cid:86)(cid:17)(cid:3)(cid:58)(cid:72)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:75)(cid:82)(cid:81)(cid:82)(cid:85)(cid:72)(cid:71)(cid:3)(cid:331)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:87)(cid:75)(cid:76)(cid:85)(cid:71)(cid:3)
(cid:87)(cid:76)(cid:80)(cid:72)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:85)(cid:72)(cid:72)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:86)(cid:3)(cid:331)(cid:3)(cid:87)(cid:82)(cid:3)(cid:69)(cid:72)(cid:3)(cid:81)(cid:68)(cid:80)(cid:72)(cid:71)(cid:3)(cid:82)(cid:81)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:36)(cid:80)(cid:72)(cid:85)(cid:76)(cid:70)(cid:68)(cid:333)(cid:86)(cid:3)
(cid:80)(cid:82)(cid:86)(cid:87)(cid:3)(cid:85)(cid:72)(cid:86)(cid:83)(cid:82)(cid:81)(cid:86)(cid:76)(cid:69)(cid:79)(cid:72)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:76)(cid:72)(cid:86)(cid:3)(cid:69)(cid:92)(cid:3)Newsweek.(cid:3)(cid:58)(cid:72)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)
(cid:68)(cid:79)(cid:86)(cid:82)(cid:3)(cid:69)(cid:72)(cid:72)(cid:81)(cid:3)(cid:75)(cid:82)(cid:81)(cid:82)(cid:85)(cid:72)(cid:71)(cid:3)(cid:69)(cid:92)(cid:3)Forbes(cid:3)(cid:68)(cid:86)(cid:3)(cid:82)(cid:81)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:36)(cid:80)(cid:72)(cid:85)(cid:76)(cid:70)(cid:68)(cid:333)(cid:86)(cid:3)(cid:69)(cid:72)(cid:86)(cid:87)(cid:3)
(cid:72)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:85)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:69)(cid:72)(cid:72)(cid:81)(cid:3)(cid:70)(cid:82)(cid:81)(cid:86)(cid:76)(cid:86)(cid:87)(cid:72)(cid:81)(cid:87)(cid:79)(cid:92)(cid:3)(cid:85)(cid:72)(cid:70)(cid:82)(cid:74)(cid:81)(cid:76)(cid:93)(cid:72)(cid:71)(cid:3)(cid:68)(cid:86)(cid:3)
(cid:82)(cid:81)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:36)(cid:80)(cid:72)(cid:85)(cid:76)(cid:70)(cid:68)(cid:333)(cid:86)(cid:3)(cid:80)(cid:82)(cid:86)(cid:87)(cid:3)(cid:72)(cid:87)(cid:75)(cid:76)(cid:70)(cid:68)(cid:79)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:76)(cid:72)(cid:86)(cid:17)(cid:3)

Sustainable and Disciplined Capital Allocation 
(cid:54)(cid:88)(cid:86)(cid:87)(cid:68)(cid:76)(cid:81)(cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3)(cid:68)(cid:79)(cid:86)(cid:82)(cid:3)(cid:68)(cid:83)(cid:83)(cid:79)(cid:76)(cid:72)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:75)(cid:82)(cid:90)(cid:3)(cid:90)(cid:72)(cid:3)(cid:80)(cid:68)(cid:81)(cid:68)(cid:74)(cid:72)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)
(cid:74)(cid:79)(cid:82)(cid:69)(cid:68)(cid:79)(cid:3)(cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:331)(cid:3)(cid:90)(cid:72)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:86)(cid:88)(cid:70)(cid:70)(cid:72)(cid:86)(cid:86)(cid:73)(cid:88)(cid:79)(cid:3)(cid:69)(cid:72)(cid:70)(cid:68)(cid:88)(cid:86)(cid:72)(cid:3)(cid:90)(cid:72)(cid:3)
(cid:68)(cid:85)(cid:72)(cid:3)(cid:76)(cid:81)(cid:87)(cid:72)(cid:81)(cid:87)(cid:76)(cid:82)(cid:81)(cid:68)(cid:79)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:86)(cid:72)(cid:79)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:76)(cid:81)(cid:3)(cid:90)(cid:75)(cid:68)(cid:87)(cid:3)(cid:90)(cid:72)(cid:3)(cid:83)(cid:88)(cid:85)(cid:86)(cid:88)(cid:72)(cid:15)(cid:3)(cid:69)(cid:82)(cid:87)(cid:75)(cid:3)
(cid:82)(cid:85)(cid:74)(cid:68)(cid:81)(cid:76)(cid:70)(cid:68)(cid:79)(cid:79)(cid:92)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:76)(cid:81)(cid:82)(cid:85)(cid:74)(cid:68)(cid:81)(cid:76)(cid:70)(cid:68)(cid:79)(cid:79)(cid:92)(cid:17)

(cid:58)(cid:72)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:71)(cid:76)(cid:86)(cid:70)(cid:76)(cid:83)(cid:79)(cid:76)(cid:81)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:70)(cid:68)(cid:83)(cid:76)(cid:87)(cid:68)(cid:79)(cid:3)(cid:68)(cid:79)(cid:79)(cid:82)(cid:70)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3)(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)
(cid:86)(cid:87)(cid:68)(cid:85)(cid:87)(cid:86)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:68)(cid:3)(cid:83)(cid:72)(cid:85)(cid:86)(cid:76)(cid:86)(cid:87)(cid:72)(cid:81)(cid:87)(cid:3)(cid:73)(cid:82)(cid:70)(cid:88)(cid:86)(cid:3)(cid:82)(cid:81)(cid:3)(cid:70)(cid:68)(cid:86)(cid:75)(cid:3)(cid:74)(cid:72)(cid:81)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:76)(cid:81)(cid:3)
(cid:82)(cid:88)(cid:85)(cid:3)(cid:69)(cid:88)(cid:86)(cid:76)(cid:81)(cid:72)(cid:86)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:72)(cid:81)(cid:71)(cid:86)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:71)(cid:72)(cid:83)(cid:79)(cid:82)(cid:92)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:70)(cid:68)(cid:86)(cid:75)(cid:3)(cid:87)(cid:82)(cid:3)
(cid:71)(cid:85)(cid:76)(cid:89)(cid:72)(cid:3)(cid:89)(cid:68)(cid:79)(cid:88)(cid:72)(cid:16)(cid:70)(cid:85)(cid:72)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:75)(cid:82)(cid:79)(cid:71)(cid:72)(cid:85)(cid:86)(cid:17)(cid:3)(cid:58)(cid:72)(cid:3)(cid:76)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:3)(cid:76)(cid:81)(cid:3)
(cid:82)(cid:88)(cid:85)(cid:3)(cid:70)(cid:82)(cid:85)(cid:72)(cid:3)(cid:69)(cid:88)(cid:86)(cid:76)(cid:81)(cid:72)(cid:86)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:71)(cid:85)(cid:76)(cid:89)(cid:72)(cid:3)(cid:82)(cid:85)(cid:74)(cid:68)(cid:81)(cid:76)(cid:70)(cid:3)(cid:74)(cid:85)(cid:82)(cid:90)(cid:87)(cid:75)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:80)(cid:68)(cid:85)(cid:74)(cid:76)(cid:81)(cid:3)
(cid:72)(cid:91)(cid:83)(cid:68)(cid:81)(cid:86)(cid:76)(cid:82)(cid:81)(cid:17)(cid:3)(cid:44)(cid:81)(cid:3)(cid:68)(cid:71)(cid:71)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3)(cid:90)(cid:72)(cid:3)(cid:79)(cid:82)(cid:82)(cid:78)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:82)(cid:83)(cid:83)(cid:82)(cid:85)(cid:87)(cid:88)(cid:81)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)
(cid:72)(cid:91)(cid:83)(cid:68)(cid:81)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:83)(cid:82)(cid:85)(cid:87)(cid:73)(cid:82)(cid:79)(cid:76)(cid:82)(cid:3)(cid:87)(cid:75)(cid:85)(cid:82)(cid:88)(cid:74)(cid:75)(cid:3)(cid:68)(cid:70)(cid:70)(cid:85)(cid:72)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:68)(cid:70)(cid:84)(cid:88)(cid:76)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:17)(cid:3)
(cid:58)(cid:72)(cid:3)(cid:68)(cid:79)(cid:86)(cid:82)(cid:3)(cid:70)(cid:82)(cid:81)(cid:86)(cid:76)(cid:86)(cid:87)(cid:72)(cid:81)(cid:87)(cid:79)(cid:92)(cid:3)(cid:83)(cid:68)(cid:92)(cid:3)(cid:68)(cid:3)(cid:84)(cid:88)(cid:68)(cid:85)(cid:87)(cid:72)(cid:85)(cid:79)(cid:92)(cid:3)(cid:71)(cid:76)(cid:89)(cid:76)(cid:71)(cid:72)(cid:81)(cid:71)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)
(cid:71)(cid:72)(cid:83)(cid:79)(cid:82)(cid:92)(cid:3)(cid:70)(cid:68)(cid:83)(cid:76)(cid:87)(cid:68)(cid:79)(cid:3)(cid:87)(cid:82)(cid:3)(cid:69)(cid:88)(cid:92)(cid:3)(cid:69)(cid:68)(cid:70)(cid:78)(cid:3)(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:86)(cid:17)(cid:3)(cid:58)(cid:72)(cid:3)(cid:71)(cid:82)(cid:3)(cid:68)(cid:79)(cid:79)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:76)(cid:86)(cid:3)
(cid:90)(cid:75)(cid:76)(cid:79)(cid:72)(cid:3)(cid:73)(cid:82)(cid:70)(cid:88)(cid:86)(cid:76)(cid:81)(cid:74)(cid:3)(cid:82)(cid:81)(cid:3)(cid:80)(cid:68)(cid:76)(cid:81)(cid:87)(cid:68)(cid:76)(cid:81)(cid:76)(cid:81)(cid:74)(cid:3)(cid:68)(cid:3)(cid:86)(cid:87)(cid:85)(cid:82)(cid:81)(cid:74)(cid:3)(cid:76)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:16)
(cid:74)(cid:85)(cid:68)(cid:71)(cid:72)(cid:3)(cid:69)(cid:68)(cid:79)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:86)(cid:75)(cid:72)(cid:72)(cid:87)(cid:17)(cid:3)

(cid:58)(cid:72)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:68)(cid:3)(cid:86)(cid:87)(cid:85)(cid:82)(cid:81)(cid:74)(cid:3)(cid:87)(cid:85)(cid:68)(cid:70)(cid:78)(cid:3)(cid:85)(cid:72)(cid:70)(cid:82)(cid:85)(cid:71)(cid:3)(cid:82)(cid:73)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:79)(cid:72)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:86)(cid:87)(cid:85)(cid:68)(cid:87)(cid:72)(cid:74)(cid:76)(cid:70)(cid:3)
(cid:68)(cid:70)(cid:84)(cid:88)(cid:76)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:68)(cid:70)(cid:70)(cid:72)(cid:79)(cid:72)(cid:85)(cid:68)(cid:87)(cid:72)(cid:3)(cid:74)(cid:85)(cid:82)(cid:90)(cid:87)(cid:75)(cid:17)(cid:3)(cid:55)(cid:75)(cid:72)(cid:86)(cid:72)(cid:3)(cid:68)(cid:70)(cid:84)(cid:88)(cid:76)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)
(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:71)(cid:85)(cid:76)(cid:89)(cid:72)(cid:81)(cid:3)(cid:75)(cid:76)(cid:74)(cid:75)(cid:72)(cid:85)(cid:3)(cid:83)(cid:85)(cid:82)(cid:403)(cid:87)(cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3)(cid:90)(cid:75)(cid:76)(cid:79)(cid:72)(cid:3)(cid:85)(cid:72)(cid:71)(cid:88)(cid:70)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)
(cid:70)(cid:68)(cid:83)(cid:76)(cid:87)(cid:68)(cid:79)(cid:3)(cid:76)(cid:81)(cid:87)(cid:72)(cid:81)(cid:86)(cid:76)(cid:87)(cid:92)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:83)(cid:82)(cid:85)(cid:87)(cid:73)(cid:82)(cid:79)(cid:76)(cid:82)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:72)(cid:81)(cid:75)(cid:68)(cid:81)(cid:70)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)
(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:333)(cid:86)(cid:3)(cid:74)(cid:85)(cid:82)(cid:90)(cid:87)(cid:75)(cid:3)(cid:83)(cid:85)(cid:82)(cid:403)(cid:79)(cid:72)(cid:17)(cid:3)(cid:58)(cid:72)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:86)(cid:87)(cid:85)(cid:72)(cid:81)(cid:74)(cid:87)(cid:75)(cid:72)(cid:81)(cid:72)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)
(cid:68)(cid:70)(cid:84)(cid:88)(cid:76)(cid:85)(cid:72)(cid:71)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:76)(cid:72)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:92)(cid:15)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:88)(cid:85)(cid:81)(cid:15)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:69)(cid:85)(cid:82)(cid:88)(cid:74)(cid:75)(cid:87)(cid:3)
(cid:89)(cid:68)(cid:79)(cid:88)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:55)(cid:76)(cid:80)(cid:78)(cid:72)(cid:81)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:73)(cid:82)(cid:85)(cid:80)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:68)(cid:79)(cid:72)(cid:81)(cid:87)(cid:15)(cid:3)(cid:86)(cid:87)(cid:85)(cid:82)(cid:81)(cid:74)(cid:3)(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:3)
(cid:83)(cid:82)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:15)(cid:3)(cid:86)(cid:92)(cid:81)(cid:72)(cid:85)(cid:74)(cid:76)(cid:72)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:81)(cid:72)(cid:90)(cid:3)(cid:82)(cid:83)(cid:83)(cid:82)(cid:85)(cid:87)(cid:88)(cid:81)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:17)(cid:3)

(cid:54)(cid:76)(cid:81)(cid:70)(cid:72)(cid:3)(cid:21)(cid:19)(cid:20)(cid:19)(cid:15)(cid:3)(cid:90)(cid:72)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:79)(cid:72)(cid:87)(cid:72)(cid:71)(cid:3)(cid:68)(cid:87)(cid:3)(cid:79)(cid:72)(cid:68)(cid:86)(cid:87)(cid:3)(cid:82)(cid:81)(cid:72)(cid:3)(cid:68)(cid:70)(cid:84)(cid:88)(cid:76)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)
(cid:72)(cid:89)(cid:72)(cid:85)(cid:92)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:17)(cid:3)(cid:48)(cid:72)(cid:85)(cid:74)(cid:72)(cid:85)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:68)(cid:70)(cid:84)(cid:88)(cid:76)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:11)(cid:48)(cid:9)(cid:36)(cid:12)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)
(cid:86)(cid:76)(cid:74)(cid:81)(cid:76)(cid:403)(cid:70)(cid:68)(cid:81)(cid:87)(cid:79)(cid:92)(cid:3)(cid:72)(cid:91)(cid:83)(cid:68)(cid:81)(cid:71)(cid:72)(cid:71)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:76)(cid:81)(cid:71)(cid:88)(cid:86)(cid:87)(cid:85)(cid:76)(cid:68)(cid:79)(cid:3)(cid:80)(cid:82)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:83)(cid:82)(cid:85)(cid:87)(cid:73)(cid:82)(cid:79)(cid:76)(cid:82)(cid:3)
(cid:68)(cid:81)(cid:71)(cid:3)(cid:72)(cid:81)(cid:68)(cid:69)(cid:79)(cid:72)(cid:71)(cid:3)(cid:88)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:86)(cid:72)(cid:85)(cid:89)(cid:76)(cid:70)(cid:72)(cid:3)(cid:81)(cid:72)(cid:90)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:73)(cid:68)(cid:86)(cid:87)(cid:16)(cid:74)(cid:85)(cid:82)(cid:90)(cid:76)(cid:81)(cid:74)(cid:3)
(cid:76)(cid:81)(cid:71)(cid:88)(cid:86)(cid:87)(cid:85)(cid:76)(cid:72)(cid:86)(cid:17)(cid:3)(cid:55)(cid:75)(cid:68)(cid:87)(cid:3)(cid:86)(cid:75)(cid:76)(cid:73)(cid:87)(cid:3)(cid:75)(cid:68)(cid:86)(cid:3)(cid:69)(cid:72)(cid:72)(cid:81)(cid:3)(cid:68)(cid:3)(cid:78)(cid:72)(cid:92)(cid:3)(cid:71)(cid:85)(cid:76)(cid:89)(cid:72)(cid:85)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)
(cid:86)(cid:87)(cid:85)(cid:82)(cid:81)(cid:74)(cid:72)(cid:85)(cid:3)(cid:83)(cid:72)(cid:85)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:85)(cid:72)(cid:86)(cid:76)(cid:79)(cid:76)(cid:72)(cid:81)(cid:70)(cid:92)(cid:3)(cid:82)(cid:73)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:69)(cid:88)(cid:86)(cid:76)(cid:81)(cid:72)(cid:86)(cid:86)(cid:17)(cid:3)

4

THE TIMKEN COMPANY

412691_TKR 2022 AR Narrative_Print.indd   4

3/6/23   9:15 PM

(cid:48)(cid:9)(cid:36)(cid:3)(cid:54)(cid:87)(cid:85)(cid:68)(cid:87)(cid:72)(cid:74)(cid:92)(cid:29)(cid:3)(cid:38)(cid:85)(cid:72)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:68)(cid:3)(cid:39)(cid:76)(cid:89)(cid:72)(cid:85)(cid:86)(cid:76)(cid:403)(cid:72)(cid:71)(cid:3)(cid:44)(cid:81)(cid:71)(cid:88)(cid:86)(cid:87)(cid:85)(cid:76)(cid:68)(cid:79)(cid:3)(cid:47)(cid:72)(cid:68)(cid:71)(cid:72)(cid:85)

Timken has a strong track record of completing strategic acquisitions to accelerate 
(cid:74)(cid:85)(cid:82)(cid:90)(cid:87)(cid:75)(cid:17)(cid:3)(cid:55)(cid:75)(cid:72)(cid:86)(cid:72)(cid:3)(cid:68)(cid:70)(cid:84)(cid:88)(cid:76)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:68)(cid:71)(cid:71)(cid:72)(cid:71)(cid:3)(cid:81)(cid:72)(cid:90)(cid:3)(cid:83)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:68)(cid:70)(cid:70)(cid:72)(cid:86)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:81)(cid:72)(cid:90)(cid:3)(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:86)(cid:15)(cid:3)(cid:71)(cid:85)(cid:76)(cid:89)(cid:72)(cid:81)(cid:3)
(cid:76)(cid:81)(cid:70)(cid:85)(cid:72)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3)(cid:86)(cid:70)(cid:68)(cid:79)(cid:72)(cid:3)(cid:76)(cid:81)(cid:3)(cid:76)(cid:81)(cid:71)(cid:88)(cid:86)(cid:87)(cid:85)(cid:76)(cid:68)(cid:79)(cid:3)(cid:80)(cid:82)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:75)(cid:76)(cid:74)(cid:75)(cid:72)(cid:85)(cid:3)(cid:82)(cid:89)(cid:72)(cid:85)(cid:68)(cid:79)(cid:79)(cid:3)(cid:83)(cid:85)(cid:82)(cid:403)(cid:87)(cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3)(cid:90)(cid:75)(cid:76)(cid:79)(cid:72)(cid:3)(cid:85)(cid:72)(cid:71)(cid:88)(cid:70)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)
(cid:70)(cid:68)(cid:83)(cid:76)(cid:87)(cid:68)(cid:79)(cid:3)(cid:76)(cid:81)(cid:87)(cid:72)(cid:81)(cid:86)(cid:76)(cid:87)(cid:92)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:83)(cid:82)(cid:85)(cid:87)(cid:73)(cid:82)(cid:79)(cid:76)(cid:82)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:72)(cid:81)(cid:75)(cid:68)(cid:81)(cid:70)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:333)(cid:86)(cid:3)(cid:74)(cid:85)(cid:82)(cid:90)(cid:87)(cid:75)(cid:3)(cid:83)(cid:85)(cid:82)(cid:403)(cid:79)(cid:72)(cid:17)

(cid:51)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:3)(cid:39)(cid:76)(cid:89)(cid:72)(cid:85)(cid:86)(cid:76)(cid:403)(cid:70)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)

(cid:54)(cid:72)(cid:74)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:39)(cid:76)(cid:89)(cid:72)(cid:85)(cid:86)(cid:76)(cid:403)(cid:70)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)

2008

2022

2008

2022

(cid:28)(cid:26)(cid:8)(cid:3) (cid:40)(cid:81)(cid:74)(cid:76)(cid:81)(cid:72)(cid:72)(cid:85)(cid:72)(cid:71)(cid:3)(cid:37)(cid:72)(cid:68)(cid:85)(cid:76)(cid:81)(cid:74)(cid:86)(cid:3) (cid:25)(cid:28)(cid:8)

35%  Process Industries  53%

  3% 

Industrial Motion 

31%

(cid:25)(cid:24)(cid:8)(cid:3) (cid:48)(cid:82)(cid:69)(cid:76)(cid:79)(cid:72)(cid:3)(cid:44)(cid:81)(cid:71)(cid:88)(cid:86)(cid:87)(cid:85)(cid:76)(cid:72)(cid:86)(cid:3) (cid:23)(cid:26)(cid:8)

2022 Strategic Acquisitions 

Spinea is a European technology leader 
and manufacturer of highly engineered 
(cid:70)(cid:92)(cid:70)(cid:79)(cid:82)(cid:76)(cid:71)(cid:68)(cid:79)(cid:3)(cid:85)(cid:72)(cid:71)(cid:88)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:74)(cid:72)(cid:68)(cid:85)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:68)(cid:70)(cid:87)(cid:88)(cid:68)(cid:87)(cid:82)(cid:85)(cid:86)(cid:17)(cid:3)

The company’s solutions primarily serve 
high-precision automation and robotics 
applications in the factory automation 
(cid:86)(cid:72)(cid:70)(cid:87)(cid:82)(cid:85)(cid:17)(cid:3)(cid:54)(cid:83)(cid:76)(cid:81)(cid:72)(cid:68)(cid:3)(cid:73)(cid:88)(cid:85)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:86)(cid:70)(cid:68)(cid:79)(cid:72)(cid:86)(cid:3)(cid:55)(cid:76)(cid:80)(cid:78)(cid:72)(cid:81)(cid:333)(cid:86)(cid:3)

position in automation, which was the 
company’s second-largest end-market 
(cid:86)(cid:72)(cid:70)(cid:87)(cid:82)(cid:85)(cid:3)(cid:68)(cid:73)(cid:87)(cid:72)(cid:85)(cid:3)(cid:85)(cid:72)(cid:81)(cid:72)(cid:90)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:72)(cid:81)(cid:72)(cid:85)(cid:74)(cid:92)(cid:3)(cid:76)(cid:81)(cid:3)(cid:21)(cid:19)(cid:21)(cid:21)(cid:17)

(cid:42)(cid:42)(cid:37)(cid:3)(cid:37)(cid:72)(cid:68)(cid:85)(cid:76)(cid:81)(cid:74)(cid:86)(cid:3)(cid:76)(cid:86)(cid:3)(cid:68)(cid:3)(cid:74)(cid:79)(cid:82)(cid:69)(cid:68)(cid:79)(cid:3)(cid:87)(cid:72)(cid:70)(cid:75)(cid:81)(cid:82)(cid:79)(cid:82)(cid:74)(cid:92)(cid:3)

and market leader of premium 
engineered metal-polymer plain 
(cid:69)(cid:72)(cid:68)(cid:85)(cid:76)(cid:81)(cid:74)(cid:86)(cid:17)(cid:3)(cid:44)(cid:87)(cid:86)(cid:3)(cid:87)(cid:85)(cid:76)(cid:69)(cid:82)(cid:79)(cid:82)(cid:74)(cid:92)(cid:3)(cid:86)(cid:82)(cid:79)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:83)(cid:79)(cid:68)(cid:76)(cid:81)(cid:3)

bearing coatings complement Timken’s 
leading positions in roller and ball 
(cid:69)(cid:72)(cid:68)(cid:85)(cid:76)(cid:81)(cid:74)(cid:86)(cid:17)(cid:3)(cid:42)(cid:42)(cid:37)(cid:3)(cid:37)(cid:72)(cid:68)(cid:85)(cid:76)(cid:81)(cid:74)(cid:86)(cid:333)(cid:3)(cid:83)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:86)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)

used mainly in industrial applications, 
including pumps and compressors, 
HVAC, off-highway, energy, material 
(cid:75)(cid:68)(cid:81)(cid:71)(cid:79)(cid:76)(cid:81)(cid:74)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:68)(cid:72)(cid:85)(cid:82)(cid:86)(cid:83)(cid:68)(cid:70)(cid:72)(cid:17)(cid:3)

Timken recently announced that it will 
(cid:68)(cid:70)(cid:84)(cid:88)(cid:76)(cid:85)(cid:72)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:49)(cid:68)(cid:71)(cid:72)(cid:79)(cid:79)(cid:68)(cid:3)(cid:42)(cid:85)(cid:82)(cid:88)(cid:83)(cid:3)(cid:87)(cid:82)(cid:3)(cid:72)(cid:91)(cid:83)(cid:68)(cid:81)(cid:71)(cid:3)

its linear motion capabilities and the 
(cid:36)(cid:80)(cid:72)(cid:85)(cid:76)(cid:70)(cid:68)(cid:81)(cid:3)(cid:53)(cid:82)(cid:79)(cid:79)(cid:72)(cid:85)(cid:3)(cid:37)(cid:72)(cid:68)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:3)(cid:87)(cid:82)(cid:3)

bolster its industry-leading portfolio of 
(cid:72)(cid:81)(cid:74)(cid:76)(cid:81)(cid:72)(cid:72)(cid:85)(cid:72)(cid:71)(cid:3)(cid:69)(cid:72)(cid:68)(cid:85)(cid:76)(cid:81)(cid:74)(cid:86)(cid:3)(cid:86)(cid:82)(cid:79)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:17)(cid:3)
2022 ANNUAL REPORT

5

412691_TKR 2022 AR Narrative_Print.indd   5

3/6/23   9:16 PM

“From the beginning, we have consistently won in the marketplace because of our 
(cid:70)(cid:82)(cid:80)(cid:80)(cid:76)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:87)(cid:82)(cid:3)(cid:86)(cid:72)(cid:85)(cid:89)(cid:76)(cid:81)(cid:74)(cid:3)(cid:70)(cid:88)(cid:86)(cid:87)(cid:82)(cid:80)(cid:72)(cid:85)(cid:86)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:75)(cid:76)(cid:74)(cid:75)(cid:72)(cid:86)(cid:87)(cid:3)(cid:84)(cid:88)(cid:68)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3)(cid:83)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:86)(cid:17)(cid:3)(cid:58)(cid:75)(cid:76)(cid:79)(cid:72)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:70)(cid:82)(cid:80)(cid:80)(cid:76)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87) 
(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:72)(cid:86)(cid:15)(cid:3)(cid:87)(cid:82)(cid:71)(cid:68)(cid:92)(cid:333)(cid:86)(cid:3)(cid:55)(cid:76)(cid:80)(cid:78)(cid:72)(cid:81)(cid:3)(cid:76)(cid:86)(cid:3)(cid:68)(cid:79)(cid:86)(cid:82)(cid:3)(cid:90)(cid:76)(cid:81)(cid:81)(cid:76)(cid:81)(cid:74)(cid:3)(cid:331)(cid:3)(cid:69)(cid:82)(cid:87)(cid:75)(cid:3)(cid:86)(cid:87)(cid:85)(cid:68)(cid:87)(cid:72)(cid:74)(cid:76)(cid:70)(cid:68)(cid:79)(cid:79)(cid:92)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:403)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:79)(cid:92)(cid:3)(cid:331)(cid:3)(cid:69)(cid:72)(cid:70)(cid:68)(cid:88)(cid:86)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)

(cid:82)(cid:88)(cid:85)(cid:3)(cid:71)(cid:76)(cid:89)(cid:72)(cid:85)(cid:86)(cid:76)(cid:403)(cid:70)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3)(cid:87)(cid:72)(cid:70)(cid:75)(cid:81)(cid:76)(cid:70)(cid:68)(cid:79)(cid:3)(cid:86)(cid:68)(cid:79)(cid:72)(cid:86)(cid:3)(cid:80)(cid:82)(cid:71)(cid:72)(cid:79)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:69)(cid:72)(cid:86)(cid:87)(cid:16)(cid:76)(cid:81)(cid:16)(cid:70)(cid:79)(cid:68)(cid:86)(cid:86)(cid:3)(cid:70)(cid:88)(cid:86)(cid:87)(cid:82)(cid:80)(cid:72)(cid:85)(cid:3)(cid:86)(cid:72)(cid:85)(cid:89)(cid:76)(cid:70)(cid:72)(cid:15)(cid:3)(cid:68)(cid:86)(cid:3)(cid:90)(cid:72)(cid:3)(cid:86)(cid:87)(cid:72)(cid:68)(cid:71)(cid:76)(cid:79)(cid:92)(cid:3)

(cid:76)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:74)(cid:85)(cid:82)(cid:90)(cid:87)(cid:75)(cid:15)(cid:3)(cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:72)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:72)(cid:91)(cid:70)(cid:72)(cid:79)(cid:79)(cid:72)(cid:81)(cid:70)(cid:72)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:71)(cid:72)(cid:83)(cid:79)(cid:82)(cid:92)(cid:3)(cid:70)(cid:68)(cid:83)(cid:76)(cid:87)(cid:68)(cid:79)(cid:3)(cid:87)(cid:82)(cid:3)(cid:71)(cid:85)(cid:76)(cid:89)(cid:72)(cid:3)(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:75)(cid:82)(cid:79)(cid:71)(cid:72)(cid:85)(cid:3)(cid:89)(cid:68)(cid:79)(cid:88)(cid:72)(cid:17)(cid:336)

(cid:47)(cid:82)(cid:82)(cid:78)(cid:76)(cid:81)(cid:74)(cid:3)(cid:36)(cid:75)(cid:72)(cid:68)(cid:71)(cid:29)(cid:3)(cid:40)(cid:89)(cid:72)(cid:81)(cid:3)(cid:42)(cid:85)(cid:72)(cid:68)(cid:87)(cid:72)(cid:85)(cid:3)(cid:57)(cid:68)(cid:79)(cid:88)(cid:72)

(cid:36)(cid:86)(cid:3)(cid:90)(cid:72)(cid:3)(cid:79)(cid:82)(cid:82)(cid:78)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:73)(cid:88)(cid:87)(cid:88)(cid:85)(cid:72)(cid:15)(cid:3)(cid:90)(cid:72)(cid:3)(cid:71)(cid:82)(cid:3)(cid:86)(cid:82)(cid:3)(cid:70)(cid:82)(cid:81)(cid:403)(cid:71)(cid:72)(cid:81)(cid:87)(cid:79)(cid:92)(cid:17)(cid:3)(cid:58)(cid:72)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72) 
(cid:87)(cid:75)(cid:72)(cid:3)(cid:85)(cid:76)(cid:74)(cid:75)(cid:87)(cid:3)(cid:86)(cid:87)(cid:85)(cid:68)(cid:87)(cid:72)(cid:74)(cid:92)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:85)(cid:76)(cid:74)(cid:75)(cid:87)(cid:3)(cid:87)(cid:72)(cid:68)(cid:80)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:85)(cid:76)(cid:74)(cid:75)(cid:87)(cid:3)(cid:83)(cid:82)(cid:85)(cid:87)(cid:73)(cid:82)(cid:79)(cid:76)(cid:82)(cid:3)
(cid:76)(cid:81)(cid:3)(cid:83)(cid:79)(cid:68)(cid:70)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:71)(cid:72)(cid:79)(cid:76)(cid:89)(cid:72)(cid:85)(cid:3)(cid:72)(cid:89)(cid:72)(cid:81)(cid:3)(cid:74)(cid:85)(cid:72)(cid:68)(cid:87)(cid:72)(cid:85)(cid:3)(cid:89)(cid:68)(cid:79)(cid:88)(cid:72)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:82)(cid:80)(cid:76)(cid:81)(cid:74)(cid:3)
(cid:92)(cid:72)(cid:68)(cid:85)(cid:86)(cid:17)(cid:3)(cid:58)(cid:72)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:83)(cid:85)(cid:82)(cid:89)(cid:72)(cid:81)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3)(cid:87)(cid:82)(cid:3)(cid:70)(cid:82)(cid:81)(cid:86)(cid:76)(cid:86)(cid:87)(cid:72)(cid:81)(cid:87)(cid:79)(cid:92)(cid:3)(cid:70)(cid:85)(cid:72)(cid:68)(cid:87)(cid:72)(cid:3)
(cid:89)(cid:68)(cid:79)(cid:88)(cid:72)(cid:3)(cid:87)(cid:75)(cid:85)(cid:82)(cid:88)(cid:74)(cid:75)(cid:3)(cid:89)(cid:68)(cid:85)(cid:76)(cid:82)(cid:88)(cid:86)(cid:3)(cid:76)(cid:81)(cid:71)(cid:88)(cid:86)(cid:87)(cid:85)(cid:76)(cid:68)(cid:79)(cid:3)(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:3)(cid:70)(cid:82)(cid:81)(cid:71)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)
(cid:68)(cid:81)(cid:71)(cid:3)(cid:87)(cid:75)(cid:85)(cid:82)(cid:88)(cid:74)(cid:75)(cid:3)(cid:72)(cid:89)(cid:82)(cid:79)(cid:89)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:72)(cid:70)(cid:75)(cid:81)(cid:82)(cid:79)(cid:82)(cid:74)(cid:76)(cid:72)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:70)(cid:88)(cid:86)(cid:87)(cid:82)(cid:80)(cid:72)(cid:85)(cid:3)
(cid:81)(cid:72)(cid:72)(cid:71)(cid:86)(cid:17)(cid:3)(cid:58)(cid:72)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:86)(cid:76)(cid:74)(cid:81)(cid:76)(cid:403)(cid:70)(cid:68)(cid:81)(cid:87)(cid:79)(cid:92)(cid:3)(cid:76)(cid:80)(cid:83)(cid:85)(cid:82)(cid:89)(cid:72)(cid:71)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:403)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)
(cid:83)(cid:72)(cid:85)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:90)(cid:72)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:73)(cid:88)(cid:85)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:85)(cid:82)(cid:82)(cid:80)(cid:3)(cid:87)(cid:82)(cid:3)(cid:74)(cid:85)(cid:82)(cid:90)(cid:17)(cid:3)

(cid:44)(cid:81)(cid:3)(cid:86)(cid:75)(cid:82)(cid:85)(cid:87)(cid:15)(cid:3)(cid:55)(cid:76)(cid:80)(cid:78)(cid:72)(cid:81)(cid:3)(cid:85)(cid:72)(cid:80)(cid:68)(cid:76)(cid:81)(cid:86)(cid:3)(cid:68)(cid:3)(cid:86)(cid:87)(cid:85)(cid:82)(cid:81)(cid:74)(cid:3)(cid:76)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:17)

(cid:50)(cid:88)(cid:85)(cid:3)(cid:83)(cid:82)(cid:85)(cid:87)(cid:73)(cid:82)(cid:79)(cid:76)(cid:82)(cid:3)(cid:76)(cid:86)(cid:3)(cid:86)(cid:87)(cid:85)(cid:68)(cid:87)(cid:72)(cid:74)(cid:76)(cid:70)(cid:68)(cid:79)(cid:79)(cid:92)(cid:3)(cid:83)(cid:82)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:71)(cid:72)(cid:79)(cid:76)(cid:89)(cid:72)(cid:85)(cid:3)
(cid:75)(cid:76)(cid:74)(cid:75)(cid:72)(cid:85)(cid:3)(cid:74)(cid:85)(cid:82)(cid:90)(cid:87)(cid:75)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:80)(cid:68)(cid:85)(cid:74)(cid:76)(cid:81)(cid:86)(cid:15)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:90)(cid:72)(cid:3)(cid:72)(cid:91)(cid:83)(cid:72)(cid:70)(cid:87)(cid:3)(cid:87)(cid:82)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:72)(cid:3)
(cid:71)(cid:76)(cid:89)(cid:72)(cid:85)(cid:86)(cid:76)(cid:73)(cid:92)(cid:76)(cid:81)(cid:74)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:83)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:76)(cid:81)(cid:71)(cid:88)(cid:86)(cid:87)(cid:85)(cid:76)(cid:72)(cid:86)(cid:3)(cid:76)(cid:81)(cid:87)(cid:82)(cid:3)(cid:68)(cid:87)(cid:87)(cid:85)(cid:68)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)
(cid:68)(cid:81)(cid:71)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:79)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:68)(cid:85)(cid:92)(cid:3)(cid:86)(cid:83)(cid:68)(cid:70)(cid:72)(cid:86)(cid:17)(cid:3)(cid:58)(cid:72)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:76)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:75)(cid:72)(cid:68)(cid:89)(cid:76)(cid:79)(cid:92)(cid:3)
(cid:76)(cid:81)(cid:3)(cid:53)(cid:9)(cid:39)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:68)(cid:83)(cid:83)(cid:79)(cid:76)(cid:70)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:72)(cid:81)(cid:74)(cid:76)(cid:81)(cid:72)(cid:72)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:82)(cid:3)(cid:68)(cid:71)(cid:89)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3) 
(cid:87)(cid:75)(cid:72)(cid:3)(cid:72)(cid:84)(cid:88)(cid:76)(cid:83)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:71)(cid:72)(cid:86)(cid:76)(cid:74)(cid:81)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:82)(cid:80)(cid:82)(cid:85)(cid:85)(cid:82)(cid:90)(cid:17)(cid:3)(cid:50)(cid:88)(cid:85)(cid:3)(cid:68)(cid:83)(cid:83)(cid:79)(cid:76)(cid:70)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)
(cid:83)(cid:76)(cid:83)(cid:72)(cid:79)(cid:76)(cid:81)(cid:72)(cid:3)(cid:76)(cid:86)(cid:3)(cid:86)(cid:87)(cid:85)(cid:82)(cid:81)(cid:74)(cid:15)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:90)(cid:72)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:79)(cid:82)(cid:82)(cid:78)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3) 
(cid:73)(cid:88)(cid:87)(cid:88)(cid:85)(cid:72)(cid:3)(cid:70)(cid:82)(cid:81)(cid:403)(cid:71)(cid:72)(cid:81)(cid:87)(cid:79)(cid:92)(cid:15)(cid:3)(cid:70)(cid:79)(cid:72)(cid:68)(cid:85)(cid:79)(cid:92)(cid:3)(cid:71)(cid:76)(cid:73)(cid:73)(cid:72)(cid:85)(cid:72)(cid:81)(cid:87)(cid:76)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:82)(cid:88)(cid:85)(cid:86)(cid:72)(cid:79)(cid:89)(cid:72)(cid:86)(cid:3)
(cid:73)(cid:85)(cid:82)(cid:80)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:72)(cid:87)(cid:76)(cid:87)(cid:82)(cid:85)(cid:86)(cid:17)(cid:3)

(cid:42)(cid:82)(cid:76)(cid:81)(cid:74)(cid:3)(cid:73)(cid:82)(cid:85)(cid:90)(cid:68)(cid:85)(cid:71)(cid:15)(cid:3)(cid:90)(cid:72)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:73)(cid:82)(cid:70)(cid:88)(cid:86)(cid:72)(cid:71)(cid:3)(cid:82)(cid:81)(cid:3)(cid:73)(cid:88)(cid:85)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:86)(cid:70)(cid:68)(cid:79)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)
(cid:72)(cid:81)(cid:87)(cid:72)(cid:85)(cid:83)(cid:85)(cid:76)(cid:86)(cid:72)(cid:15)(cid:3)(cid:68)(cid:70)(cid:70)(cid:72)(cid:79)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:72)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:83)(cid:85)(cid:82)(cid:403)(cid:87)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)
(cid:74)(cid:85)(cid:82)(cid:90)(cid:87)(cid:75)(cid:3)(cid:86)(cid:87)(cid:85)(cid:68)(cid:87)(cid:72)(cid:74)(cid:92)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:68)(cid:70)(cid:75)(cid:76)(cid:72)(cid:89)(cid:76)(cid:81)(cid:74)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:83)(cid:16)(cid:84)(cid:88)(cid:68)(cid:85)(cid:87)(cid:76)(cid:79)(cid:72)(cid:3)
(cid:403)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:83)(cid:72)(cid:85)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:81)(cid:70)(cid:72)(cid:17)(cid:3)(cid:50)(cid:88)(cid:85)(cid:3)(cid:82)(cid:69)(cid:77)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:76)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:82)(cid:88)(cid:87)(cid:74)(cid:85)(cid:82)(cid:90)(cid:3) 
(cid:87)(cid:75)(cid:72)(cid:3)(cid:76)(cid:81)(cid:71)(cid:88)(cid:86)(cid:87)(cid:85)(cid:76)(cid:72)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)(cid:90)(cid:72)(cid:3)(cid:83)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:87)(cid:72)(cid:3)(cid:87)(cid:82)(cid:71)(cid:68)(cid:92)(cid:3)(cid:90)(cid:75)(cid:76)(cid:79)(cid:72)(cid:3)

(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:82)(cid:3)(cid:86)(cid:75)(cid:76)(cid:73)(cid:87)(cid:3)(cid:87)(cid:82)(cid:3)(cid:75)(cid:76)(cid:74)(cid:75)(cid:72)(cid:85)(cid:16)(cid:74)(cid:85)(cid:82)(cid:90)(cid:87)(cid:75)(cid:3)(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:3)(cid:86)(cid:72)(cid:70)(cid:87)(cid:82)(cid:85)(cid:86)(cid:3)
(cid:68)(cid:81)(cid:71)(cid:3)(cid:87)(cid:72)(cid:70)(cid:75)(cid:81)(cid:82)(cid:79)(cid:82)(cid:74)(cid:76)(cid:72)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:82)(cid:80)(cid:82)(cid:85)(cid:85)(cid:82)(cid:90)(cid:17)(cid:3)(cid:55)(cid:82)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:80)(cid:83)(cid:79)(cid:76)(cid:86)(cid:75)(cid:3)(cid:87)(cid:75)(cid:76)(cid:86)(cid:15)(cid:3) 
(cid:90)(cid:72)(cid:3)(cid:72)(cid:86)(cid:87)(cid:68)(cid:69)(cid:79)(cid:76)(cid:86)(cid:75)(cid:72)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:73)(cid:82)(cid:79)(cid:79)(cid:82)(cid:90)(cid:76)(cid:81)(cid:74)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:72)(cid:79)(cid:79)(cid:76)(cid:81)(cid:74)(cid:3)(cid:79)(cid:82)(cid:81)(cid:74)(cid:16)(cid:87)(cid:72)(cid:85)(cid:80)(cid:3)
(cid:11)(cid:24)(cid:16)(cid:92)(cid:72)(cid:68)(cid:85)(cid:12)(cid:3)(cid:87)(cid:68)(cid:85)(cid:74)(cid:72)(cid:87)(cid:86)(cid:3)(cid:68)(cid:87)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:21)(cid:19)(cid:21)(cid:21)(cid:3)(cid:44)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:82)(cid:85)(cid:3)(cid:39)(cid:68)(cid:92)(cid:29)

• (cid:3)(cid:54)(cid:68)(cid:79)(cid:72)(cid:86)(cid:3)(cid:74)(cid:85)(cid:82)(cid:90)(cid:87)(cid:75)(cid:3)(cid:82)(cid:73)(cid:3)(cid:25)(cid:3)(cid:331)(cid:3)(cid:27)(cid:3)(cid:83)(cid:72)(cid:85)(cid:70)(cid:72)(cid:81)(cid:87)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:82)(cid:88)(cid:81)(cid:71)(cid:72)(cid:71)(cid:3)

(cid:68)(cid:81)(cid:81)(cid:88)(cid:68)(cid:79)(cid:3)(cid:74)(cid:85)(cid:82)(cid:90)(cid:87)(cid:75)(cid:3)(cid:85)(cid:68)(cid:87)(cid:72)(cid:3)(cid:11)(cid:38)(cid:36)(cid:42)(cid:53)(cid:12)

• (cid:3)(cid:36)(cid:71)(cid:77)(cid:88)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)(cid:72)(cid:68)(cid:85)(cid:81)(cid:76)(cid:81)(cid:74)(cid:86)(cid:3)(cid:83)(cid:72)(cid:85)(cid:3)(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:3)(cid:38)(cid:36)(cid:42)(cid:53)(cid:3)(cid:82)(cid:73)(cid:3) 

(cid:80)(cid:82)(cid:85)(cid:72)(cid:3)(cid:87)(cid:75)(cid:68)(cid:81)(cid:3)(cid:20)(cid:19)(cid:3)(cid:83)(cid:72)(cid:85)(cid:70)(cid:72)(cid:81)(cid:87)

• (cid:3)(cid:36)(cid:71)(cid:77)(cid:88)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)(cid:40)(cid:37)(cid:44)(cid:55)(cid:39)(cid:36)(cid:3)(cid:80)(cid:68)(cid:85)(cid:74)(cid:76)(cid:81)(cid:3)(cid:72)(cid:91)(cid:83)(cid:68)(cid:81)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3) 

(cid:21)(cid:19)(cid:19)(cid:3)(cid:69)(cid:68)(cid:86)(cid:76)(cid:86)(cid:3)(cid:83)(cid:82)(cid:76)(cid:81)(cid:87)(cid:86)(cid:3)(cid:82)(cid:89)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:81)(cid:72)(cid:91)(cid:87)(cid:3)(cid:403)(cid:89)(cid:72)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:86)(cid:3)(cid:68)(cid:86)(cid:3)
(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:85)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:79)(cid:68)(cid:86)(cid:87)(cid:3)(cid:403)(cid:89)(cid:72)

• (cid:3)(cid:41)(cid:85)(cid:72)(cid:72)(cid:3)(cid:70)(cid:68)(cid:86)(cid:75)(cid:3)(cid:372)(cid:82)(cid:90)(cid:3)(cid:70)(cid:82)(cid:81)(cid:89)(cid:72)(cid:85)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:82)(cid:89)(cid:72)(cid:85)(cid:3)(cid:20)(cid:19)(cid:19)(cid:3)(cid:83)(cid:72)(cid:85)(cid:70)(cid:72)(cid:81)(cid:87)(cid:3) 

(cid:82)(cid:73)(cid:3)(cid:81)(cid:72)(cid:87)(cid:3)(cid:76)(cid:81)(cid:70)(cid:82)(cid:80)(cid:72)(cid:17)(cid:3)

(cid:44)(cid:81)(cid:3)(cid:70)(cid:79)(cid:82)(cid:86)(cid:76)(cid:81)(cid:74)(cid:15)(cid:3)(cid:55)(cid:76)(cid:80)(cid:78)(cid:72)(cid:81)(cid:3)(cid:76)(cid:86)(cid:3)(cid:86)(cid:87)(cid:85)(cid:82)(cid:81)(cid:74)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:68)(cid:81)(cid:3)(cid:72)(cid:89)(cid:72)(cid:85)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:90)(cid:72)(cid:3)(cid:87)(cid:75)(cid:68)(cid:81)(cid:78)(cid:3)
(cid:68)(cid:79)(cid:79)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:86)(cid:87)(cid:68)(cid:78)(cid:72)(cid:75)(cid:82)(cid:79)(cid:71)(cid:72)(cid:85)(cid:86)(cid:3)(cid:331)(cid:3)(cid:72)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:80)(cid:68)(cid:81)(cid:68)(cid:74)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)
(cid:87)(cid:72)(cid:68)(cid:80)(cid:15)(cid:3)(cid:86)(cid:88)(cid:83)(cid:83)(cid:79)(cid:76)(cid:72)(cid:85)(cid:86)(cid:15)(cid:3)(cid:76)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:82)(cid:85)(cid:86)(cid:15)(cid:3)(cid:80)(cid:72)(cid:80)(cid:69)(cid:72)(cid:85)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:69)(cid:82)(cid:68)(cid:85)(cid:71)(cid:15)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)
(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:82)(cid:80)(cid:80)(cid:88)(cid:81)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3)(cid:90)(cid:72)(cid:3)(cid:70)(cid:68)(cid:79)(cid:79)(cid:3)(cid:75)(cid:82)(cid:80)(cid:72)(cid:3)(cid:331)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:92)(cid:82)(cid:88)(cid:85)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:72)(cid:71)(cid:3)
(cid:76)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:76)(cid:81)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:17)(cid:3)(cid:58)(cid:72)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:90)(cid:72)(cid:79)(cid:79)(cid:3)(cid:83)(cid:82)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:72)(cid:71)(cid:3)
(cid:87)(cid:82)(cid:3)(cid:70)(cid:68)(cid:83)(cid:76)(cid:87)(cid:68)(cid:79)(cid:76)(cid:93)(cid:72)(cid:3)(cid:82)(cid:81)(cid:3)(cid:81)(cid:72)(cid:90)(cid:3)(cid:82)(cid:83)(cid:83)(cid:82)(cid:85)(cid:87)(cid:88)(cid:81)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:15)(cid:3)(cid:68)(cid:70)(cid:75)(cid:76)(cid:72)(cid:89)(cid:72)(cid:3)(cid:86)(cid:87)(cid:85)(cid:82)(cid:81)(cid:74)(cid:72)(cid:85)(cid:3)
(cid:83)(cid:72)(cid:85)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:70)(cid:85)(cid:72)(cid:68)(cid:87)(cid:72)(cid:3)(cid:86)(cid:76)(cid:74)(cid:81)(cid:76)(cid:403)(cid:70)(cid:68)(cid:81)(cid:87)(cid:3)(cid:89)(cid:68)(cid:79)(cid:88)(cid:72)(cid:3)(cid:82)(cid:89)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:81)(cid:72)(cid:91)(cid:87)(cid:3)
(cid:403)(cid:89)(cid:72)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:86)(cid:3)(cid:90)(cid:75)(cid:76)(cid:79)(cid:72)(cid:3)(cid:90)(cid:72)(cid:3)(cid:69)(cid:88)(cid:76)(cid:79)(cid:71)(cid:3)(cid:72)(cid:89)(cid:72)(cid:81)(cid:3)(cid:74)(cid:85)(cid:72)(cid:68)(cid:87)(cid:72)(cid:85)(cid:3)(cid:80)(cid:82)(cid:80)(cid:72)(cid:81)(cid:87)(cid:88)(cid:80)(cid:3)(cid:68)(cid:86)(cid:3)
(cid:87)(cid:75)(cid:72)(cid:3)(cid:90)(cid:82)(cid:85)(cid:79)(cid:71)(cid:3)(cid:73)(cid:82)(cid:70)(cid:88)(cid:86)(cid:72)(cid:86)(cid:3)(cid:82)(cid:81)(cid:3)(cid:86)(cid:88)(cid:86)(cid:87)(cid:68)(cid:76)(cid:81)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:86)(cid:82)(cid:79)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:81)(cid:72)(cid:91)(cid:87)(cid:3)
(cid:74)(cid:72)(cid:81)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:72)(cid:81)(cid:74)(cid:76)(cid:81)(cid:72)(cid:72)(cid:85)(cid:72)(cid:71)(cid:3)(cid:68)(cid:83)(cid:83)(cid:79)(cid:76)(cid:70)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:17)

(cid:54)(cid:76)(cid:81)(cid:70)(cid:72)(cid:85)(cid:72)(cid:79)(cid:92)(cid:15) 

6

THE TIMKEN COMPANY

(cid:53)(cid:76)(cid:70)(cid:75)(cid:68)(cid:85)(cid:71)(cid:3)(cid:42)(cid:17)(cid:3)(cid:46)(cid:92)(cid:79)(cid:72) 
(cid:51)(cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:50)(cid:73)(cid:403)(cid:70)(cid:72)(cid:85)

412691_TKR 2022 AR Narrative_Print.indd   6

3/6/23   9:16 PM

 
 
 
 
 
From the Chairman

Celebrating 100 years on the New York Stock Exchange 
— and declaring our milestone 400th consecutive 
quarterly dividend — was a proud moment in  
The Timken Company’s history. These achievements 
are clear proof of our sustainable performance, 
innovation and impact as a global industrial leader.

In the year, we also delivered consistent, record 
(cid:85)(cid:72)(cid:86)(cid:88)(cid:79)(cid:87)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:70)(cid:85)(cid:72)(cid:68)(cid:87)(cid:72)(cid:3)(cid:86)(cid:76)(cid:74)(cid:81)(cid:76)(cid:403)(cid:70)(cid:68)(cid:81)(cid:87)(cid:3)(cid:89)(cid:68)(cid:79)(cid:88)(cid:72)(cid:3)

for shareholders. This strong performance shows 
that our management team’s focused strategy is 
working. We continue to maintain our position as a 
leader in engineered bearing technology and are 
actively leveraging our position to expand and scale 
in industrial motion products and services to serve 
emerging and growing market sectors. 

A fundamental pillar of our staying power and success 
has always been our unwavering commitment to  
our values of ethics and integrity, quality, teamwork 
and excellence. They have guided us since our 
company’s founding, and we will continue to conduct 
business in the future with honesty, fairness, respect 
and responsibility. 

Board of  
Directors 

John M. Timken Jr., Chairman, Board of Directors 

We recognize our most enduring resource is our 
people. Our accomplishments would not have been 
possible without the expertise and dedication of 
our global team of world-class problem solvers. The 
opportunities before us are great, but they require 
next-generation thinking, innovative applications and 
strong leadership. 

Thank you to our employees, customers and 
shareholders — together we are creating the 
momentum that will propel Timken into another 
century of innovation and progress. As we explore 
new horizons, we have a wealth of experience and 
leadership to guide us. 

John M. Timken Jr. 
Chairman, Board of Directors

Richard G. Kyle
President and  
(cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:50)(cid:73)(cid:403)(cid:70)(cid:72)(cid:85)(cid:3)
The Timken Company

Maria A. Crowe
Retired President of 
Manufacturing Operations 
Eli Lilly and Company

Elizabeth A. Harrell
Retired Major General 
USAF

Sarah C. Lauber
Executive Vice President,  
CFO and Secretary
Douglas Dynamics, Inc.

John A. Luke, Jr.
Retired Chairman WestRock, 
Retired President and  
CEO MeadWestvaco

Christopher L. Mapes
Chairman, President and 
(cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:50)(cid:73)(cid:403)(cid:70)(cid:72)(cid:85)(cid:3)
Lincoln Electric Holdings, Inc.

James F. Palmer
Retired Corporate  
Vice President and  
(cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:41)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:50)(cid:73)(cid:403)(cid:70)(cid:72)(cid:85)(cid:3)
Northrop Grumman  
Corporation

Ajita G. Rajendra
Retired Executive Chairman, 
President and CEO 
A.O. Smith Corporation

Frank C. Sullivan
Chairman and  
(cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:50)(cid:73)(cid:403)(cid:70)(cid:72)(cid:85)(cid:3)
RPM International Inc.

Ward J. Timken, Jr.
Co-founder,  
(cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:50)(cid:73)(cid:403)(cid:70)(cid:72)(cid:85)(cid:3)
McKinley Strategies, LLC

Jacqueline F. Woods
Retired President
AT&T Ohio

2022 ANNUAL REPORT

7

412691_TKR 2022 AR BOD Page 7_R1.indd   7

3/9/23   6:49 PM

(cid:44)(cid:81)(cid:3)(cid:49)(cid:82)(cid:89)(cid:72)(cid:80)(cid:69)(cid:72)(cid:85)(cid:15)(cid:3)(cid:80)(cid:72)(cid:80)(cid:69)(cid:72)(cid:85)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:69)(cid:82)(cid:68)(cid:85)(cid:71)(cid:3)(cid:82)(cid:73)(cid:3)(cid:71)(cid:76)(cid:85)(cid:72)(cid:70)(cid:87)(cid:82)(cid:85)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:72)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:87)(cid:72)(cid:68)(cid:80)(cid:3)(cid:74)(cid:68)(cid:87)(cid:75)(cid:72)(cid:85)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:70)(cid:72)(cid:79)(cid:72)(cid:69)(cid:85)(cid:68)(cid:87)(cid:72)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:55)(cid:76)(cid:80)(cid:78)(cid:72)(cid:81)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:333)(cid:86)(cid:3)(cid:70)(cid:72)(cid:81)(cid:87)(cid:88)(cid:85)(cid:92)(cid:3)(cid:82)(cid:73)(cid:3)

(cid:87)(cid:85)(cid:68)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:82)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:49)(cid:60)(cid:54)(cid:40)(cid:17)(cid:3)

(cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:47)(cid:72)(cid:68)(cid:71)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:3)(cid:55)(cid:72)(cid:68)(cid:80)

(cid:53)(cid:76)(cid:70)(cid:75)(cid:68)(cid:85)(cid:71)(cid:3)(cid:42)(cid:17)(cid:3)(cid:46)(cid:92)(cid:79)(cid:72) 
(cid:51)(cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3) 
(cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:50)(cid:73)(cid:403)(cid:70)(cid:72)(cid:85)(cid:3)

(cid:43)(cid:68)(cid:81)(cid:86)(cid:68)(cid:79)(cid:3)(cid:49)(cid:17)(cid:3)(cid:51)(cid:68)(cid:87)(cid:72)(cid:79) 
(cid:57)(cid:76)(cid:70)(cid:72)(cid:3)(cid:51)(cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:15)(cid:3)(cid:42)(cid:72)(cid:81)(cid:72)(cid:85)(cid:68)(cid:79)(cid:3)(cid:38)(cid:82)(cid:88)(cid:81)(cid:86)(cid:72)(cid:79)(cid:3) 
(cid:68)(cid:81)(cid:71)(cid:3)(cid:54)(cid:72)(cid:70)(cid:85)(cid:72)(cid:87)(cid:68)(cid:85)(cid:92)

(cid:55)(cid:76)(cid:80)(cid:82)(cid:87)(cid:75)(cid:92)(cid:3)(cid:36)(cid:17)(cid:3)(cid:42)(cid:85)(cid:68)(cid:75)(cid:68)(cid:80) 
(cid:57)(cid:76)(cid:70)(cid:72)(cid:3)(cid:51)(cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:15)(cid:3) 
(cid:50)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:15)(cid:3)(cid:40)(cid:81)(cid:74)(cid:76)(cid:81)(cid:72)(cid:72)(cid:85)(cid:72)(cid:71)(cid:3)(cid:37)(cid:72)(cid:68)(cid:85)(cid:76)(cid:81)(cid:74)(cid:86)

(cid:38)(cid:75)(cid:85)(cid:76)(cid:86)(cid:87)(cid:82)(cid:83)(cid:75)(cid:72)(cid:85)(cid:3)(cid:36)(cid:17)(cid:3)(cid:38)(cid:82)(cid:88)(cid:74)(cid:75)(cid:79)(cid:76)(cid:81) 
(cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:57)(cid:76)(cid:70)(cid:72)(cid:3)(cid:51)(cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:15)(cid:3) 
(cid:51)(cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:44)(cid:81)(cid:71)(cid:88)(cid:86)(cid:87)(cid:85)(cid:76)(cid:68)(cid:79)(cid:3)(cid:48)(cid:82)(cid:87)(cid:76)(cid:82)(cid:81)

(cid:51)(cid:75)(cid:76)(cid:79)(cid:76)(cid:83)(cid:3)(cid:39)(cid:17)(cid:3)(cid:41)(cid:85)(cid:68)(cid:70)(cid:68)(cid:86)(cid:86)(cid:68) 
(cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:57)(cid:76)(cid:70)(cid:72)(cid:3)(cid:51)(cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:15)(cid:3) 
(cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:41)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:50)(cid:73)(cid:403)(cid:70)(cid:72)(cid:85)(cid:3)(cid:3)

(cid:36)(cid:81)(cid:71)(cid:85)(cid:72)(cid:68)(cid:86)(cid:3)(cid:53)(cid:82)(cid:72)(cid:79)(cid:79)(cid:74)(cid:72)(cid:81) 
(cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:57)(cid:76)(cid:70)(cid:72)(cid:3)(cid:51)(cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:15)(cid:3) 
(cid:51)(cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:40)(cid:81)(cid:74)(cid:76)(cid:81)(cid:72)(cid:72)(cid:85)(cid:72)(cid:71)(cid:3)(cid:37)(cid:72)(cid:68)(cid:85)(cid:76)(cid:81)(cid:74)(cid:86)(cid:3)

Natasha Pollock 
(cid:57)(cid:76)(cid:70)(cid:72)(cid:3)(cid:51)(cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:15)(cid:3)(cid:43)(cid:88)(cid:80)(cid:68)(cid:81)(cid:3)(cid:53)(cid:72)(cid:86)(cid:82)(cid:88)(cid:85)(cid:70)(cid:72)(cid:86)

(cid:48)(cid:76)(cid:70)(cid:75)(cid:68)(cid:72)(cid:79)(cid:3)(cid:45)(cid:17)(cid:3)(cid:38)(cid:82)(cid:81)(cid:81)(cid:82)(cid:85)(cid:86) 
(cid:57)(cid:76)(cid:70)(cid:72)(cid:3)(cid:51)(cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:15)(cid:3)(cid:42)(cid:79)(cid:82)(cid:69)(cid:68)(cid:79)(cid:3)(cid:48)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)

(cid:36)(cid:77)(cid:68)(cid:92)(cid:3)(cid:46)(cid:17)(cid:3)(cid:39)(cid:68)(cid:86) 
(cid:57)(cid:76)(cid:70)(cid:72)(cid:3)(cid:51)(cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:15)(cid:3) 
(cid:54)(cid:87)(cid:85)(cid:68)(cid:87)(cid:72)(cid:74)(cid:92)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:37)(cid:88)(cid:86)(cid:76)(cid:81)(cid:72)(cid:86)(cid:86)(cid:3)(cid:39)(cid:72)(cid:89)(cid:72)(cid:79)(cid:82)(cid:83)(cid:80)(cid:72)(cid:81)(cid:87)

(cid:54)(cid:68)(cid:81)(cid:77)(cid:68)(cid:92)(cid:3)(cid:46)(cid:82)(cid:88)(cid:79) 
(cid:51)(cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:15)(cid:3)(cid:44)(cid:81)(cid:71)(cid:76)(cid:68)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:54)(cid:82)(cid:88)(cid:87)(cid:75)(cid:72)(cid:68)(cid:86)(cid:87)(cid:3)
(cid:36)(cid:86)(cid:76)(cid:68)(cid:30)(cid:3)(cid:48)(cid:68)(cid:81)(cid:68)(cid:74)(cid:76)(cid:81)(cid:74)(cid:3)(cid:39)(cid:76)(cid:85)(cid:72)(cid:70)(cid:87)(cid:82)(cid:85)(cid:15)(cid:3)(cid:44)(cid:81)(cid:71)(cid:76)(cid:68)(cid:3)

(cid:38)(cid:68)(cid:85)(cid:79)(cid:3)(cid:39)(cid:17)(cid:3)(cid:53)(cid:68)(cid:83)(cid:83) 
(cid:42)(cid:85)(cid:82)(cid:88)(cid:83)(cid:3)(cid:57)(cid:76)(cid:70)(cid:72)(cid:3)(cid:51)(cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:3)(cid:68)(cid:81)(cid:71) 
(cid:57)(cid:76)(cid:70)(cid:72)(cid:3)(cid:51)(cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:15)(cid:3)(cid:51)(cid:82)(cid:90)(cid:72)(cid:85)(cid:3)(cid:54)(cid:92)(cid:86)(cid:87)(cid:72)(cid:80)(cid:86)

(cid:39)(cid:82)(cid:88)(cid:74)(cid:79)(cid:68)(cid:86)(cid:3)(cid:43)(cid:17)(cid:3)(cid:54)(cid:80)(cid:76)(cid:87)(cid:75) 
(cid:57)(cid:76)(cid:70)(cid:72)(cid:3)(cid:51)(cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:15)(cid:3)(cid:55)(cid:72)(cid:70)(cid:75)(cid:81)(cid:82)(cid:79)(cid:82)(cid:74)(cid:92)

(cid:48)(cid:76)(cid:70)(cid:75)(cid:68)(cid:72)(cid:79)(cid:3)(cid:36)(cid:17)(cid:3)(cid:39)(cid:76)(cid:86)(cid:70)(cid:72)(cid:81)(cid:93)(cid:68) 
(cid:57)(cid:76)(cid:70)(cid:72)(cid:3)(cid:51)(cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:15)(cid:3) 
(cid:41)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:42)(cid:85)(cid:82)(cid:88)(cid:83)(cid:3)(cid:38)(cid:82)(cid:81)(cid:87)(cid:85)(cid:82)(cid:79)(cid:79)(cid:72)(cid:85)

(cid:47)(cid:68)(cid:81)(cid:3)(cid:60)(cid:88) 
(cid:51)(cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:15)(cid:3)(cid:38)(cid:75)(cid:76)(cid:81)(cid:68)

8

THE TIMKEN COMPANY

412691_TKR 2022 AR Narrative_Print.indd   8

3/6/23   9:16 PM

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

  ☒ 

  ☐ 

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2022
OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from______to_______ 
Commission file number: 1-1169
THE TIMKEN COMPANY
(Exact name of registrant as specified in its charter)

Ohio 
(State or other jurisdiction of 
incorporation or organization)

4500 Mount Pleasant Street NW

North Canton 

Ohio 

(Address of principal executive offices)

34-0577130
(I.R.S. Employer
Identification No.)

44720-5450
(Zip Code)

234.262.3000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:

Title of each class
Common Shares, without par value

Trading Symbol
TKR

Name of each exchange on which registered
New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes  ☒  No  ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange
Act.   Yes  ☐  No  ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of  
1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to  
such filing requirements for the past 90 days.
Yes  ☒  No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to  
Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes  ☒  No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting  
company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”  
and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer  ☒  Accelerated filer  ☐  Non-accelerated filer  ☐  Smaller reporting company  ☐  Emerging growth company  ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying  
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the Registrant has filed a report on and attestation to its management's assessment of the effectiveness  
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 762(b)) by the registered public  
accounting firm that prepared or issued its audit report

☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the 
filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes  ☐  No  ☒

As of June 30, 2022, the aggregate market value of the registrant’s common shares held by non-affiliates of the registrant was 
$3,382,800,199 based on the closing sale price as reported on the New York Stock Exchange.

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class

Common Shares, without par value

Outstanding at January 31, 2023

72,393,668 shares

DOCUMENTS INCORPORATED BY REFERENCE

Proxy Statement for the Annual Meeting of Shareholders to be held  
on or about May 5, 2023 (Proxy Statement)

Document

Parts Into Which Incorporated
Part III

THE TIMKEN COMPANY 
INDEX TO FORM 10-K REPORT

I. 

PART I.
Item 1. 

Item 1A. 

Item 1B. 

Item 2. 

Item 3. 

Item 4. 

Business  

Risk Factors  

Unresolved Staff Comments  

Properties  

Legal Proceedings  

Mine Safety Disclosures  

Item 4A. 

Information about our Executive Officers  

II. 

PART II.
Item 5. 

Item 6.  

Item 7.  

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer  
Purchases of Equity Securities  

Selected Financial Data  

Management’s Discussion and Analysis of Financial Condition and Results of Operations  

Item 7A.  

Quantitative and Qualitative Disclosures about Market Risk 

Item 8.  

Item 9.  

Item 9A.  

Item 9B.  

Item 9C. 

III.  PART III.
Item 10.  

Item 11.  

Item 12.  

Item 13.  

Item 14.  

IV.  PART IV.
Item 15.  

Financial Statements and Supplementary Data  

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 

Controls and Procedures  

Other Information  

Disclosure Regarding Foreign Jurisdictions that Prevent Inspection 

Directors, Executive Officers and Corporate Governance  

Executive Compensation  

Security Ownership of Certain Beneficial Owners and Management and Related  
Stockholder Matters  

Certain Relationships and Related Transactions, and Director Independence  

Principal Accountant Fees and Services  

Exhibits and Financial Statement Schedules  

Item 16.  

Form 10-K Summary  

PAGE

1

8

17

17

17

17

18

19

21

22

44

45

97

97

100

100

100

100

100

100

100

101

105

 
PART I.

Item 1. Business

General:
As used herein, the term “Timken” or the “Company” refers to The Timken Company and its subsidiaries unless the 
context otherwise requires. Timken designs and manages a portfolio of engineered bearings and industrial motion 
products, and provides related services. The Company’s growing portfolio features many strong brands, including 
Timken®, Philadelphia Gear®, GGB®, Drives®, Cone Drive®, Rollon®, Lovejoy®, Diamond®, BEKA®, Groeneveld® 
and Spinea®. 

The Company was founded in 1899 by Henry Timken, who received two patents on the design of a tapered roller 
bearing. Timken  remains  the  world’s  leading  authority  in  tapered  roller  bearings  and  has  leveraged  that  expertise 
to  develop  a  full  portfolio  of  industry-leading  engineered  bearings  and  industrial  motion  products.  Timken  built  its 
reputation as a global leader by applying its knowledge of metallurgy, friction management and industrial motion to 
increase  the  reliability  and  efficiency  of  its  customers’  equipment  across  a  diverse  range  of  industries. Today,  the 
Company’s global footprint consists of 126 manufacturing facilities/service centers, 28 technology and engineering 
centers, and 70 distribution centers and warehouses, supported by a team comprised of more than 19,000 employees. 
Timken operates in 46 countries around the globe.

Major Customers:
The Company sells products and services to a diverse customer base globally, including customers in the following 
market sectors: industrial distribution, renewable energy, automation, automotive original equipment (“OE”), agriculture/
turf, rail, aerospace, auto/truck aftermarket, construction, services, metals and mining, heavy truck (OE), and marine. 
No single customer accounts for 5% or more of total net sales.

Products:
Timken manufactures and manages global supply chains for multiple product lines including engineered bearings and 
industrial motion products designed  to operate in demanding  environments. The Company leverages its technical 
knowledge,  research  expertise,  and  production  and  engineering  capabilities  across  all  of  its  products  and  end 
markets to deliver high-performance products and services to its customers. Differentiation within these product lines 
is generally based on application engineering, product performance, product quality or customer service.

Engineered Bearings:
The Timken® bearing portfolio features a broad range of engineered bearing products, including tapered, spherical 
and cylindrical roller bearings; plain bearings and rod end bearings; thrust and specialty ball bearings; and housed 
bearings. Timken is a leading authority on tapered roller bearings and leverages its position by applying engineering 
know-how and technology across its entire bearing portfolio.

A bearing is a mechanical device that reduces friction between moving parts. The purpose of a bearing is to carry a 
load while allowing a machine shaft to rotate freely. The basic elements of the bearing generally include two rings, 
called  races;  a  set  of  rolling  elements  that  rotate  around  the  bearing  raceway;  and  a  cage  to  separate  and  guide 
the rolling elements. Bearings come in a number of designs, featuring tapered, spherical, cylindrical or ball rolling 
elements. The various bearing designs accommodate radial and/or thrust loads differently, making certain bearing 
types better suited for specific applications. 

Selection and development of bearings for customer applications and demand for high reliability require sophisticated 
engineering and analytical techniques. High precision tolerances, proprietary internal geometries and quality materials 
provide Timken bearings with high load-carrying capacity, excellent friction-reducing qualities and long service lives. 
The uses for bearings are diverse and can be found in transportation applications that include premium passenger cars 
and trucks, heavy trucks, helicopters, airplanes and trains. Ranging in size from precision bearings the size of a pencil 
eraser to more than roughly three meters in diameter, Timken components are also used in a wide variety of industrial 
applications, including: paper and steel mills, mining, oil and gas extraction and production, agriculture, construction, 
machine tools, gear drives, health and positioning control, wind turbines and food and beverage processing.

1

Tapered Roller Bearings. Timken tapered roller bearings can increase power density and can include customized 
geometries, engineered surfaces and specialized sealing solutions. The Company’s tapered roller bearing line comes 
in  thousands  of  combinations  in  single-,  double-  and  four-row  configurations. Tapered  roller  designs  permit  ready 
absorption of both radial and axial load combinations, which makes them particularly well-adapted to reducing friction 
where shafts, gears or wheels are used. 

Spherical and Cylindrical Roller Bearings. Timken also produces spherical and cylindrical roller bearings that are 
used in gear drives, rolling mills and other industrial and infrastructure development applications. These products are 
sold worldwide to OE manufacturers (“OEMs”) and industrial distributors serving major end-market sectors, including 
construction and mining, natural resources, wind energy, defense, pulp and paper production, rolling mills and general 
industrial goods.

Ball Bearings. Timken radial, angular and precision ball bearings are used by customers in a variety of market sectors, 
including aerospace, agriculture, construction, health, machine tool, the automotive aftermarket and general industries. 
Radial ball bearings are designed to tolerate relatively high-speed operation under a range of load conditions. These 
bearing types consist of an inner and outer ring with a cage containing a complement of precision balls. Angular contact 
ball bearings are designed for a combination of radial and axial loading. Precision ball bearings are manufactured to 
tight tolerances and come in miniature and instrument, thin section and ball screw support designs.

Housed Bearings. Timken markets among the broadest range of housed or mounted bearings in the industry. These 
products deliver durable, heavy-duty components designed to protect spherical, tapered and ball bearings in debris-filled,  
contaminated  or  high-moisture  environments.  Common  housed  unit  applications  include  material  handling  and 
processing equipment.

Plain Bearings. Timken produces a range of plain bearings including rod-ends, spherical plain bearings, metal-polymer 
bearings  and  journal  bearings. These  bearings  are  used  to  support  misalignment  and  oscillating  movements  in  a 
variety  of  applications  and  end-markets  including  aircraft  controls,  packaging  equipment,  off-highway  equipment, 
heavy truck, performance auto racing, robotics and many more. Various combinations of material pairs and engineered 
coatings improve friction management for application specific conditions.

Industrial Motion Products:

Linear Motion Products. The Company designs and manufactures a global portfolio of Rollon® engineered linear 
motion  products,  including  linear  guides,  telescopic  rails,  linear  actuators,  seventh-axis  robotic  transfer  units  and 
gantry  systems.  These  engineered  products  are  highly  customized  to  control  movements  with  different  variability 
and complexity based on the application. Rollon products serve a wide range of industries, including passenger rail, 
aerospace, packaging and logistics, medical and automation.

Industrial  Drives.  The  Company’s  Philadelphia  Gear®  line  of  low-  and  high-speed  gear  drive  designs  are  used 
in  large-scale  industrial  applications  such  as  crushing  and  pulverizing  equipment,  conveyors  and  pumps,  power 
generation  and  military  marine.  These  gear  drive  designs  are  custom  made  to  meet  user  specifications,  offering 
a  wide-array  of  size,  footprint  and  gear  arrangements.  Timken  also  offers  Cone  Drive®  high-torque  worm  gears, 
harmonic solutions and precision slew drives. Cone Drive products can be found in a variety of industrial end-market 
sectors, including solar, oil and gas, aerial platforms, automation and food and beverage. The Company’s Spinea® line 
features highly engineered cycloidal reduction gears and actuators. Spinea’s solutions primarily serve high precision 
automation and robotics applications in the factory automation sector. 

Lubrication  Systems.  The  Company’s  Groeneveld®  and  BEKA®  lubrication  systems  include  a  wide  variety  of 
automatic  lubrication  delivery  devices,  oil  management  systems  and  safety  support  systems  designed  to  reduce 
operational costs for customers while increasing equipment uptime, productivity and safety. These systems support 
many industries, including renewable energy, transportation, construction, mining, port, forestry and agriculture. Timken 
also  offers  over  two  dozen  different  formulations  of  grease,  leveraging  its  knowledge  of  tribology  and  anti-friction 
bearings to enable smooth equipment operation. 

Belts. The Company makes and markets a full line of Timken® belts used in industrial, commercial and consumer 
applications. The portfolio features more than 20,000 parts designed for demanding applications, which are sold to 
original equipment and aftermarket customers. These belts are engineered for maximum performance and durability, 
with  products  available  in  wrap  molded,  raw  edge,  v-ribbed  and  synchronous  belt  designs.  Common  applications 
include agriculture, construction, industrial machinery, outdoor power equipment and powersports.

2

Chain. Timken manufactures precision Diamond® and Drives® roller chain, pintle chain, agricultural conveyor chain, 
engineering class chain and oil field roller chain. These engineered products are used in a wide range of mobile and 
industrial  machinery  applications,  including  agriculture,  oil  and  gas,  aggregate  and  mining,  primary  metals,  forest 
products  and  other  heavy  industries. They  are  also  used  in  the  food  and  beverage  and  packaged  goods  sectors, 
which often require high-end, specialty products, including stainless-steel and corrosion-resistant roller chain.

Couplings.  The  Company  offers  a  full  range  of  industrial  couplings  within  its  industrial  motion  products  portfolio. 
The  Lovejoy  brand  is  widely  known  for  its  flexible  coupling  design  and  as  the  creator  of  the  jaw-style  coupling. 
Lovejoy®  couplings  are  available  in  curved  jaw,  jaw  in-shear,  s-flex,  gear-torsional  and  disc  style  configurations. 
These  components  are  used  in  a  wide  range  of  industries  such  as  steel,  pulp  and  paper,  power  generation,  food 
processing, mining and construction. The Company also offers an extensive line of torsional couplings offered under 
the Torsion Control Products brand.

Industrial Clutches and Brakes. Timken offers a selection of engineered clutches, brakes, hydraulic power take-off units 
and other torque management devices marketed under the PT Tech® brand. These products are custom engineered 
for OEMs and used in marine, mining, aggregate, wood recycling and metals industries.

Other Products. The Company also offers a full line of seals, augers and other industrial motion components. Timken 
industrial  sealing  solutions  come  in  a  variety  of  types  and  material  options  that  are  used  in  manufacturing,  food 
processing, mining, power generation, chemical processing, primary metals, pulp and paper, and oil and gas industry 
applications. The  Company  also  designs  and  manufactures  Drives®  helicoid  and  sectional  augers  for  agricultural 
applications, like conveying, digging and combines. 

Services:

Power Systems. Timken services components in the industrial customer’s drive train, including switch gears, electric 
motors  and  generators,  gearboxes,  bearings,  couplings  and  control  panels.  The  Company’s  Philadelphia  Gear 
services  for  gear  drive  applications  include  onsite  technical  services;  inspection,  repair  and  upgrade  capabilities; 
and manufacturing of parts to specifications. In addition, the Company’s Wazee, Smith Services, Schulz, Standard 
Machine  and  H&N  service  centers  provide  customers  with  services  that  include  motor  and  generator  rewind  and 
repair  and  uptower  wind  turbine  maintenance  and  repair. Timken  Power  Systems  commonly  serves  customers  in 
the power, wind energy, hydro and fossil fuel, water management, paper, mining and general manufacturing sectors.

Bearing  Repair.  Timken  bearing  repair  services  return  worn  bearings  to  like-new  specifications,  which  increases 
bearing  service  life  and  often  can  restore  bearings  in  less  time  than  required  to  manufacture  new.  Bearing 
remanufacturing is available for any bearing type or brand - including competitor products - and is well-suited to heavy 
industrial applications such as paper, metals, mining, power generation and cement; railroad locomotives, passenger 
cars and freight cars; and aerospace engines and gearboxes.

Services accounted for approximately 4% of the Company’s net sales for the year ended December 31, 2022.

Sales and Distribution:

Timken products are sold principally by its internal sales organizations. A portion of each segment’s sales are made 
through authorized distributors. 

Customer  collaboration  is  central  to  the  Company’s  sales  strategy. Therefore, Timken  goes  where  our  customers 
need us, with sales engineers primarily working in close proximity to customers rather than at production sites. The 
Company’s sales force continuously updates the team’s training and knowledge regarding engineered bearings and 
industrial motion products and related market sector trends, and they assist customers during product development 
and implementation phases and provide ongoing service and support.

The  Company  has  a  joint  venture  in  North America  focused  on  joint  logistics  and  e-business  services.  This  joint 
venture, CoLinx, LLC, includes five equity members: Timken, SKF Group, Schaeffler Group, RBC Bearings and Gates 
Industrial Corp. The e-business service focuses on information and business services for authorized distributors in 
the Process Industries segment.

Timken has entered into individually negotiated contracts with some of its customers. These contracts may extend for 
one or more years and, if a price is fixed for any period extending beyond current shipments, customarily include a 
commitment by the customer to purchase a designated percentage of its requirements from Timken. Timken does not 
believe that there is any significant loss of earnings risk associated with any given contract.

3

Competition:

The bearing industry and the industries into which Timken sells its industrial motion products are highly competitive. 
Timken primarily competes based on total value, including price, quality, timeliness of delivery, product design and 
the ability to provide engineering support and service on a global basis. The Company competes with many domestic 
and foreign manufacturers of anti-friction bearings, including SKF Group, Schaeffler Group, NTN Corporation, JTEKT 
Corporation  and  NSK  Ltd.,  and  with  a  diverse  group  of  domestic  and  foreign  manufacturers  of  industrial  motion 
products.

Joint Ventures:

Investments  in  affiliated  companies  accounted  for  under  the  equity  method  were  $1.8  million  and  $2.0  million, 
respectively, at December 31, 2022 and 2021. The investment balance at December 31, 2022 was reported in other 
non-current assets on the Consolidated Balance Sheets. 

Backlog:

The  following  table  provides  the  backlog  of  orders  for  the  Company’s  domestic  and  overseas  operations  at 
December 31, 2022 and 2021: 

(Dollars in millions)
Segment:
Mobile Industries

Process Industries
Total Company

December 31,

2022

2021

$

$

1,297.1

1,193.7
2,490.8

$

$

1,354.9

1,095.0
2,449.9

Approximately 93% of the Company’s backlog at December 31, 2022 is scheduled for delivery in the succeeding 12 
months. Actual shipments depend upon customers’ ever-changing production schedules. Accordingly, Timken does not 
believe that its backlog data and comparisons thereof, as of different dates, reliably indicate future sales or shipments.

Sources and Availability of Raw Materials:
The  principal  raw  materials  used  by  the  Company  to  make  engineered  bearings  are  special  bar  quality  (“SBQ”) 
steel and steel components. SBQ steel and steel components are produced around the world by various suppliers. 
SBQ steel is purchased in bar, tube and wire forms, while steel components are commonly purchased as forgings, 
semi-finished or finished components. The availability and price of SBQ steel are subject to changes in supply and 
demand, commodity prices for ferrous scrap, ore, alloy, electricity, natural gas, transportation fuel, and labor costs. 
The Company manages price variability of commodities by using surcharge mechanisms on some of its contracts with 
its customers that provides for partial recovery of these cost increases in the price of bearing products.

The availability of bearing-quality tubing is relatively limited, and the Company has taken steps to limit its exposure 
to  this  particular  form  of  SBQ  steel.  Overall,  the  Company  believes  that  the  number  of  suppliers  of  SBQ  steel  is 
adequate to support the needs of global bearing production, and, in general, the Company is not dependent on any 
single source of supply.

The Company also purchases a variety of materials and components to produce industrial motion products, such as non-
SBQ steel, synthetic rubber, fabrics, castings and plastics. The Company sources these components from various suppliers 
in the world market. The Company believes its supply base is adequate to support its manufacturing requirements.

4

Research:
Timken operates a network of technology and engineering centers to support its global customers with sites in North 
America, Europe and Asia. This network develops and delivers innovative engineered bearings and industrial motion 
solutions and technical services. Timken's largest technical center is located at the Company's world headquarters in 
North Canton, Ohio. Other smaller sites in the United States ("U.S.") include Los Alamitos, California; Downer's Grove, 
Fulton  and  Montgomery,  Illinois;  Indianapolis,  Indiana;  Norton  Shores,  Rochester  Hills  and Traverse  City,  Michigan; 
Springfield, Missouri; Keene and Lebanon, New Hampshire; Thorofare, New Jersey; and King of Prussia, Pennsylvania. 
Within Europe, the Company has technology facilities in Plymouth, England; Annecy and Colmar, France; Heilbronn, 
Pegnitz and Werdohl, Germany; Valmadrera, Italy; Gorinchem, Netherlands; Porto, Portugal; and Ploiesti, Romania. 
In Asia, Timken operates technology and engineering facilities in Bangalore, India and Shanghai, China.

Compliance with Governmental Regulations:

Environmental Matters

The  Company  continues  its  efforts  to  protect  the  environment  and  comply  with  environmental  protection  laws. 
Additionally, it has invested in pollution control equipment and updated plant operational practices. The Company’s 
manufacturing plants are expected to have an effective environmental management system which follows the ISO 
14001  principles  and  internal  audits  are  performed  against  this  standard.  Where  appropriate  to  meet  or  exceed 
customer  requirements,  we  are  certified  under  the  formal  ISO  14001  certification  process. As  of  the  end  of  2022, 
28 of the Company’s plants had obtained ISO 14001 certification, including the majority of the Company’s bearing 
manufacturing plants.

The  Company  establishes  appropriate  levels  of  reserves  to  cover  its  environmental  expenses  and  has  a  
well-established  environmental  compliance  audit  program  for  its  domestic  and  international  units.  This  program 
measures performance against applicable laws, as well as against internal standards that have been established for 
all units worldwide. It is difficult to assess the possible effect of compliance with future requirements that differ from 
existing requirements.

The  Company  and  certain  of  its  U.S.  subsidiaries  previously  have  been  and  could  in  the  future  be  identified  as 
potentially responsible parties for investigation and remediation at off-site disposal or recycling facilities under the 
Comprehensive  Environmental  Response,  Compensation  and  Liability Act  (“CERCLA”),  known  as  the  Superfund, 
or state laws similar to CERCLA. In general, such claims for investigation and remediation also have been asserted 
against numerous other entities.

Management believes any ultimate liability with respect to pending actions will not materially affect the Company’s 
annual  results  of  operations,  cash  flows  or  consolidated  financial  position.  The  Company  also  is  conducting 
environmental  investigation  and/or  remediation  activities  at  certain  current  or  former  operating  sites. The  costs  of 
such investigation and remediation activities, in the aggregate, are not expected to be material to the operations or 
financial position of the Company.

New laws and regulations, stricter enforcement of existing laws and regulations, the discovery of previously unknown 
contamination  or  the  imposition  of  new  clean-up  requirements  may  require  Timken  to  incur  costs  or  become  the 
basis for new or increased liabilities that could have a materially adverse effect on the Company’s business, financial 
condition or results of operations.

Other Regulations

Because of its global operations, the Company is subject to a wide variety of domestic and foreign laws and regulations, 
including securities laws, tax laws, data privacy, employment and pension-related laws, competition laws, U.S. and 
foreign export and trade laws, the Foreign Corrupt Practices Act (“FCPA”) and similar worldwide anti-bribery laws, 
government procurement regulations and laws governing improper business practices. The Company has policies 
and  procedures  in  place  to  promote  compliance  with  these  laws  and  regulations  and  management  believes  any 
ultimate liability with respect to pending actions will not materially affect the Company’s annual results of operations, 
cash  flows  or  consolidated  financial  position.  In  the  future,  the  Company  may  be  subject  to  both  new  laws  and 
regulations, and changes to existing laws and regulations which may continue to evolve through interpretations by 
courts and regulators. Accordingly, it is difficult to assess the possible effect of compliance with future requirements 
that differ from existing requirements. Such changes may require the Company to incur costs and such changes could 
form the basis for new or increased liabilities that could have a materially adverse effect on the Company’s business, 
financial condition or results of operations. Refer to Item 1.A Risk Factors – Risks Related to Legal, Compliance and 
Regulatory Matters for further discussion.

5

Patents, Trademarks and Licenses:
Timken owns numerous U.S. and foreign patents, trademarks and licenses relating to certain products. While Timken 
regards  these  as  important,  it  does  not  deem  its  business  as  a  whole,  or  any  industry  segment,  to  be  materially 
dependent upon any one item or group of items.

Employment:
At  December  31,  2022,  Timken  had  more  than  19,000  employees  worldwide. Approximately  9%  of  Timken’s  U.S. 
employees are covered under collective bargaining agreements.

Human Capital:
The  Company  believes  that  its  associates  and  their  collective  knowledge  and  experience  are  its  most  valuable 
resource. As a result, the Company is committed to providing a safe work environment, attracting, motivating and 
retaining the best talent in the industry and providing opportunities for its associates to learn and advance their career 
with the Company.

Associate Health and Safety

Associate health and safety remains a top priority for the Company and its commitment to safety starts at the top of the 
organization. Chief Executive Officer, Richard Kyle, was the first-ever chair of the Company’s Environmental Health 
and Safety Steering Committee, which was created in 2009 and continues to drive accountability and responsibility 
for safety throughout the organization. 

The Company’s commitment to the health and safety of its associates is evidenced by its strong safety results in 2021 
and 2022 shown in the charts below:

Global Injury Rates as Calculated Based on OSHA Guidelines

Recordable Rate*

Lost Time Accident Rate*

2.5

2

1.5

1

0.5

0

0.8

0.6

0.4

0.2

0

2021

2022

2021

2022

*Rates calculated as (number of injuries and illnesses x 200,000) / employee hours worked per 100 full-time workers. 2022 rates represent the 
Company's best estimate as of the date of this report

The Company aims to maintain a recordable rate within the top quartile of U.S. metal manufacturers (North American 
Industry  Classification  System  code  332)  based  on  information  provided  by  the  U.S.  Bureau  of  Labor  Statistics. 
While quartile industry data was not available at the time of this report for either 2021 or 2022, the Company’s 2022 
recordable rate of 1.06 and lost time accident rate of 0.27 showed strong improvement over the corresponding 2021 
rates of 1.20 and 0.38, respectively.

6

Attracting, Retaining, and Motivating Highly Qualified Associates

Successful  execution  of  the  Company’s  strategy  continues  to  depend  on  attracting,  retaining,  and  motivating  highly 
qualified  talent.  As  such,  the  Company  believes  it  is  important  to  reward  associates  with  competitive  wages  and 
comprehensive benefits to recognize professional excellence and career progression. The Company also believes it is 
important to provide pay and benefits that are competitive and equitable based on the local markets in which it operates. 

In addition, the Company also believes that having open, honest dialogue with its associates is key to evolving its 
culture and keeping the Company strong. In line with that approach, the Company conducts comprehensive surveys 
on  a  periodic  basis  and  individual  stay  interviews  to  measure  employee  engagement. Additionally,  exit  interviews 
are  conducted  with  employees  who  voluntarily  terminated  their  employment,  which  helps  improve  management 
processes. The Company also deploys regular pulse surveys to gain insights from associates’ recent experiences 
and to better understand how effectively it is engaging, energizing and enabling its workforce.

The Company also provides several professional development and training opportunities to advance our associates’ 
skills and expertise. Some of these opportunities include online-learning platforms, job-specific training, our operations 
development program and our educational reimbursement programs. The Company has recruited and trained many 
of its associates through its engineering co-op program, where engineering students have the opportunity to work 
up to five semesters alongside the Company’s experienced engineers while they complete their bachelor’s degrees. 
Comprehensive leadership, skill and competency assessments are offered to company employees to best identify and 
address individual and team development needs and activities. To better inform its hiring and associate development 
efforts, the Company has partnered with third-party vendors to provide required training for its managers focused on 
diversity and inclusion. 

To further our Company’s diverse and inclusive culture and work environment, Timken associate resource groups 
(“ARGs”) around the world help us understand and address the challenges faced by our diverse workforce and the 
opportunities diversity offers in advancing our collective knowledge. Our associates continue to drive new programming 
and chapter expansion across our five primary ARGs: Women’s International Network (WIN), Multicultural Association 
of  Professionals  (MAP), Young  Professionals  Network  (YPN),  Veteran  Engagement  at Timken  (VET),  and Timken 
PRIDE Network (TPN). Additionally, we partner with an online platform, GlobeSmart®, to help our associates further 
their global competency.

Available Information:
The Company uses its Investor Relations website at http://investors.timken.com, as a channel for routine distribution 
of  important  information,  including  news  releases,  analyst  presentations  and  financial  information.  The  Company 
posts filings as soon as reasonably practicable after they are electronically filed with, or furnished to, the Securities 
and Exchange Commission (the “SEC”), including its annual, quarterly and current reports on Forms 10-K, 10-Q and 
8-K;  its  proxy  statements;  and  any  amendments  to  those  reports  or  statements. All  such  postings  and  filings  are 
available on the Company’s website free of charge. In addition, this website allows investors and other interested 
persons  to  sign  up  to  automatically  receive  e-mail  alerts  when  the  Company  posts  news  releases  and  financial 
information on the Company’s website. The content on any website referred to in this Annual Report on Form 10-K is 
not incorporated by reference into this Annual Report unless expressly noted.

7

Item 1A. Risk Factors

The following are certain risk factors that could affect our business, financial condition and results of operations. The 
risks that are described below are not the only ones that we face. These risk factors should be considered in connection 
with evaluating forward-looking statements contained in this Annual Report on Form 10-K because these factors could 
cause our actual results and financial condition to differ materially from those projected in forward-looking statements. 
Although the risks are organized by headings, and each risk is discussed separately, many are interrelated. If any of 
the following risks actually occur, our business, financial condition or results of operations could be negatively affected. 
Readers should not interpret the disclosure of any risk factor to imply that the risk has not already materialized.

Risk Relating to our Business

The bearing industry and the industries into which we sell our various industrial motion products are highly 
competitive, and this competition results in significant pricing pressure for our products that could affect our 
revenues and profitability.

The  global  bearing  industry  is  highly  competitive  and  consolidated.  We  compete  with  many  domestic  and  foreign 
manufacturers of anti-friction bearings. In addition, the industries into which we sell our industrial motion products 
are also highly competitive and consolidating. Due to competitiveness within these industries, we may not be able to 
increase prices for our products to cover increases in our costs or to achieve desired profitability. In addition, we face 
pressure from our customers to reduce prices, and the contractual nature of business with OEM customers, could 
adversely affect our revenues and profitability. In addition, our customers may choose to purchase products from one 
of our competitors rather than pay the prices we seek for our products, which could adversely affect our revenues 
and profitability.

Our  business  is  capital  intensive,  and  if  there  are  downturns  in  the  industries  that  we  serve,  we  may  be 
forced to significantly curtail or suspend operations with respect to those industries, which could result in 
our recording asset impairment charges, restructuring charges or taking other measures that may adversely 
affect our results of operations and profitability.

Our business  operations  are capital  intensive,  and  we  devote  a significant  amount  of  capital  to  certain  industries. 
Our profitability is dependent on factors such as labor compensation and productivity and inventory and supply chain 
management, which are subject to risks that we may not be able to control. If there are downturns in the industries 
that we serve, including as a result of high inflation or a recession, we may be forced to significantly curtail or suspend 
our operations with respect to those industries, including laying-off employees, reducing production, recording asset 
impairment charges and other measures, which may adversely affect our results of operations and profitability. We 
have taken approximately $86 million in impairment and restructuring charges in the aggregate during the last five 
years. Changes in business or economic conditions, or our business strategy, may result in additional restructuring 
actions and may require us to take additional charges in the future, which could have a material adverse effect on 
our earnings.

Changes  in  customer  preferences  and  inventory  reductions  by  customers  or  distributors  could  adversely 
affect the Company’s business.

The Company has previously experienced distributor inventory corrections reflecting de-stocking of the supply chain 
associated with softer demand in certain markets. The Company’s results in a period may be adversely impacted by 
similar customer inventory adjustments in the future, as well as changes in customer buying preferences.

8

Any  change  in  raw  material  prices,  the  availability  or  cost  of  raw  materials  or  logistics  expenses  could 
adversely affect our results of operations and profit margins.

We require substantial amounts of raw materials, including steel, to operate our business. Our supply of raw materials 
could be and has in the past been interrupted for a variety of reasons, including availability and pricing. Prices for 
raw materials necessary for production have fluctuated significantly in the past, have risen substantially over the past 
few years, and could continue to do so in the future. We generally attempt to manage these fluctuations by passing 
along increased raw material prices to our customers in the form of price increases or surcharges; however, we may 
be unable to increase the price of our products, or may experience a lag in doing so, due to pricing pressure, contract 
terms or other factors, which could adversely impact our revenue and profit margins.

Moreover, future disruptions in the supply of our raw materials could impair our ability to manufacture our products for 
our customers, impact our ability to manufacture and deliver our products on a timely basis, require us to pay higher 
prices in order to obtain these raw materials from other sources or necessitate the use of expedited or more costly 
freight options. Any significant increase in the prices for such raw materials or logistics expenses could adversely 
affect our results of operations and profit margins.

The COVID-19 pandemic has, and could continue to, adversely and materially impact our business.

The  global  outbreak  of  COVID-19  and  associated  variants  has  negatively  impacted  our  business  operations  in  a 
number of ways, including: volatility in economic demand; higher levels of absenteeism, turnover and reduced labor 
availability; shipping and logistics delays; supply chain and manufacturing disruptions; and higher levels of inflation 
for raw material, purchased components, freight and other costs. We could continue to experience these and other 
impacts  from  the  pandemic,  and  collectively  or  individually,  these  factors  could  adversely  and  materially  impact 
our short-term and long-term operations, cost structure, and related results of operations, including revenue, gross 
margins, operating margins and cash flows.

We may not realize the improved operating results that we anticipate from past and future acquisitions, may 
experience difficulties in integrating acquired businesses, and may incur unanticipated liabilities and costs 
associated with such acquired businesses.

We  seek  to  grow,  in  part,  through  strategic  acquisitions,  joint  ventures  and  other  alliances,  which  are  intended  to 
complement  or  expand  our  businesses,  and  expect  to  continue  to  do  so  in  the  future. These  acquisitions  involve 
challenges and risks. In the event that we do not successfully integrate these acquisitions into our existing operations 
so as to realize the expected return on our investment, issues identified in our due diligence review are not addressed 
or the costs associated with such issues are higher than expected, or we uncover material issues (including historical 
environmental, trade, sanctions, or tax compliance violations) that were not identified during our due diligence review, 
our results of operations, cash flow or financial condition could be adversely affected. 

Our operating results depend in part on continued successful research, development and marketing of new 
and/or improved products and services, and there can be no assurance that we will continue to successfully 
introduce new products and services.

The success of new and improved products and services depends on their initial and continued acceptance by our 
customers. Our businesses are affected, to varying degrees, by technological change and corresponding shifts in 
customer demand, which could result in unpredictable product transitions or shortened life cycles, especially as it 
relates to market and technological changes driven by electrification, environmental requirements, automation, the 
continued rising importance of e-commerce and increased digitization. We may experience difficulties or delays in the 
research, development, production, or marketing of new products and services that may prevent us from recouping 
or realizing a return on the investments required to bring new products and services to market. The end result could 
have a negative impact on our operating results.

9

Loss  of  our  rights  to  exclusive  use  of  our  intellectual  property  whether  through  patent  infringement, 
counterfeiting,  theft  of  trade  secrets,  or  otherwise  could  have  a  material  adverse  effect  on  the  Company. 
Third-party claims alleging our infringement of intellectual property rights could also have a material adverse 
effect on the Company.

We rely on a combination of patents, trademarks, trade secret laws, invention assignment agreements, confidentiality 
agreements,  and  other  arrangements  to  protect  our  intellectual  property  rights.  These  rights  are  important  to  our 
business,  and  their  loss,  whether  through  patent  infringement,  counterfeiting,  theft  of  trade  secrets,  or  otherwise, 
could have a material adverse effect on the Company.

Additionally, third parties may bring claims to challenge the validity of our patents or other intellectual property rights 
or  allege  that  we  infringe  their  patents  or  other  intellectual  property  rights.  We  may  incur  substantial  costs  if  our 
competitors or other third parties allege such claims. If the outcomes of any such disputes are unfavorable to us, we 
could be subject to damages and reputational harm and our business could be otherwise adversely affected.

Risks Related to our Capital Structure, the Global Financial Markets, and Currency Exchange Rates

An  increase  in  our  levels  of  debt  and  the  corresponding  impact  to  our  financial  covenants  or  a  failure  to 
maintain our credit ratings could limit our ability to invest in our business.

An increase in our levels of debt might lead us to have less cash flow available for our business operations, capital 
expenditures, and strategic transactions and our ability to service our debt obligations or to obtain future financing 
could  be  negatively  impacted  by  general  adverse  economic  and  industry  conditions  and  interest  rate  trends.  In 
addition, a failure to maintain our credit ratings could adversely affect our cost of borrowing, liquidity and access to 
capital markets.

Some of our debt has variable interest rates, which could increase the cost of servicing such debt.

Interest rates have risen significantly over the past year and may rise in the future due to inflation or other causes. 
As a result, the costs of servicing our variable interest rate debt could further increase even if the amount borrowed 
under such facilities remains the same. Increased servicing costs could in turn negatively impact our profitability and 
cash flow.

The  global  nature  of  our  business  exposes  us  to  foreign  currency  fluctuations  that  may  affect  our  asset 
values, results of operations and competitiveness.

We are exposed to the risks of currency exchange rate fluctuations because a significant portion of our net sales, 
costs, assets and liabilities, are denominated in currencies other than the U.S. dollar. These risks include a reduction 
in our net asset values, net sales, operating income and competitiveness.

For those countries outside the U.S. where we have significant sales, a strengthening in the U.S. dollar as we have seen 
over the past few years or devaluation in the local currency would reduce the value of our local inventory as presented 
in our Consolidated Financial Statements. In addition, a stronger U.S. dollar or a weaker local currency would result 
in reduced revenue, operating profit and shareholders’ equity due to the impact of foreign exchange translation on our 
Consolidated  Financial  Statements.  Fluctuations  in  foreign  currency  exchange  rates  may  make  our  products  more 
expensive for others to purchase or increase our operating costs, affecting our competitiveness and our profitability.

Changes in exchange rates between the U.S. dollar and other currencies and volatile economic, political and market 
conditions in emerging market countries have in the past adversely affected our financial performance and may in 
the future adversely affect the value of our assets located outside the United States, our gross profit and our results 
of operations.

10

Our results of operations may be materially affected by conditions in global financial markets or in any of the 
geographic regions in which we, our customers or our suppliers operate. If an end user cannot obtain financing 
to purchase our products, either directly or indirectly contained in machinery or equipment, demand for our 
products will be reduced, which could have a material adverse effect on our financial condition and earnings.

Global financial markets have experienced volatility in the past, including volatility in securities prices and diminished 
liquidity and credit availability. Our access to the financial markets cannot be assured and is dependent on, among 
other things, market conditions and company performance. Accordingly, we may be forced to delay raising capital, 
issue  shorter  tenors  than  we  prefer  or  pay  unattractive  interest  rates,  which  could  increase  our  interest  expense, 
decrease our profitability and significantly reduce our financial flexibility.

If a customer becomes insolvent or files for bankruptcy, our ability to recover accounts receivable from that customer 
would  be  affected  adversely  and  any  payment  we  received  during  the  preference  period  prior  to  a  bankruptcy 
filing potentially may be recoverable by the bankruptcy estate. Furthermore, if certain of our customers liquidate in 
bankruptcy, we may incur impairment charges relating to obsolete inventory and machinery and equipment.

In  addition,  financial  instability  of  certain  companies  in  the  supply  chain  could  disrupt  production  in  any  particular 
industry. A disruption of production in any of the industries where we participate could have a material adverse effect 
on  our  financial  condition  and  earnings.  If  any  of  our  suppliers  are  unable  or  unwilling  to  provide  the  products  or 
services that we require or materially increase their costs, our ability to offer and deliver our products on a timely and 
profitable basis could be impaired. We cannot assure you that any or all of our relationships will not be terminated 
or that such relationships will continue as presently in effect. Furthermore, if any of our suppliers were to become 
subject to bankruptcy, receivership or similar proceedings, we may be unable to arrange for alternate or replacement 
relationships on favorable terms, which could harm our sales and operating results.

Risks Related to the Global Nature of our Operations

Global  political  instability  and  other  risks  of  international  operations  may  adversely  affect  our  operating 
costs, revenues and the price of our products.

Our international operations expose us to risks not present in a purely domestic business, including primarily:

 •

 •
 •
 •

 •
 •
 •
 •

 •
 •

 •
 •

 •

 •

changes in international treaties or trade unions, which may make our products or our customers’ products 
more costly to export or import;
changes in tariff regulations, which may make our products more costly to export or import;
threatened or actual state seizure of foreign-owned manufacturing assets;
hostilities between countries in which we operate which could limit our ability to manufacture in, sell into, or 
export out of such jurisdictions;
political protests or unrest which could negatively impact our operations;
difficulties establishing and maintaining relationships with local OEMs, distributors and dealers;
import and export licensing requirements;
compliance  with  a  variety  of  foreign  laws  and  regulations,  including  unexpected  changes  in  taxation  and 
environmental or other regulatory requirements, which could increase our operating and other expenses and 
limit our operations;
additional costs, taxes and restrictions related to repatriation of cash in international jurisdictions;
disadvantages  of  competing  against  companies  from  countries  that  are  not  subject  to  U.S.  laws  and 
regulations, including the FCPA;
difficulty in staffing and managing geographically diverse operations; 
disruptions to our global supply chain and logistical issues associated with port closures or congestion, delays 
or increased costs;
tax exposures related to cross-border intercompany transfer pricing and other tax risks unique to international 
operations; and
compliance with data protection regulations.

These and other risks also may increase the relative price of our products compared to those manufactured in other 
countries, reducing the demand for our products in the markets in which we operate, which could have a material 
adverse effect on our revenues and earnings. 

11

We  have  global  operations,  and  changes  to  government  trade  policies  including  the  imposition  of  tariffs 
and  other  trade  barriers,  as  well  as  the  resulting  consequences,  could  adversely  impact  our  revenue  and 
profit margins.

The U.S. government has imposed tariffs on certain foreign goods, including steel and other raw materials as well as 
certain products made from such materials. Changes in U.S. trade policy have resulted in, and could further result 
in, U.S. trading partners adopting responsive trade policies that make it more difficult or costly for us to export our 
products to those countries. In addition, the governments of other countries in which we have substantial operations 
could impose tariffs on, or restrict trade in, the materials and components necessary for the production of our products. 
These measures could result in an increase in our production costs. If we are unable to increase the price of our 
products or otherwise mitigate these increased costs, it could adversely impact our revenue and profit margins.

Risks Related to Human Capital Management and Employee Benefits

If we are unable to attract, retain and develop key personnel and develop and successfully execute succession 
plans, our business could be materially adversely affected.

Our  business  substantially  depends  on  the  continued  service  of  key  members  of  our  management  and  other  key 
employees. The loss of the services of a significant number of members of our management or other key employees 
could have a material adverse effect on our business. Our future success also will depend on our ability to attract, 
retain  and  develop  highly  skilled  personnel,  such  as  engineering,  finance,  marketing  and  senior  management 
professionals, as well as skilled labor. Competition for these types of employees is intense and has increased recently, 
and  we  could  experience  difficulty  from  time  to  time  in  hiring,  developing  and  retaining  the  personnel  necessary 
to  support  our  business.  If  we  do  not  succeed  in  retaining  and  developing  our  current  employees,  attracting  new 
high-quality employees, and developing and successfully executing succession plans, our business could be materially 
adversely affected.

Work stoppages or similar difficulties could significantly disrupt our operations, reduce our revenues and 
materially affect our earnings.

A work stoppage at one or more of our facilities, whether caused by fire, flooding, epidemics, pandemics (including 
the COVID-19 outbreak), military hostilities, government-imposed shutdowns, severe weather, including that caused 
by climate change, other natural disaster or otherwise, could have a material adverse effect on our business, financial 
condition and results of operations. In addition, some of our employees are represented by labor unions or works 
councils  under  collective  bargaining  agreements  with  varying  durations  and  terms.  We  have  experienced  work 
stoppages at certain of our facilities historically at times, and while these stoppages have been short-term in nature, 
no assurances can be made that we will not experience additional work stoppages due to government directives, 
employee health concerns, and other types of conflicts with labor unions, works councils, and other similar groups in 
the future.

A work stoppage at one of our suppliers could also materially and adversely affect our operations if an alternative 
source of supply were not readily available. In addition, if one or more of our customers were to experience a work 
stoppage, that customer could halt or limit purchases of our products, which could have a material adverse effect 
on our business, financial condition and results of operations. In addition, the credit and default risk or bankruptcy 
of customers or suppliers as a result of work stoppages could also materially and adversely affect our operations 
and results.

12

Expenses and contributions related to our defined benefit plans are affected by factors outside our control, 
including the performance of plan assets, interest rates, actuarial data and experience, and changes in laws 
and regulations, all of which could impact our funded status.

Our  future  expense  and  funding  obligations  for  defined  benefit  pension  plans  depend  upon  a  number  of  factors, 
including  the  level  of  benefits  provided  for  by  the  plans,  the  future  performance  of  assets  with  specific  country 
economic  performance  risks  set  aside  in  trust  for  these  plans,  the  level  of  interest  rates  used  to  determine  the 
discount rate to calculate the amount of liabilities, actuarial data and experience, and any changes in government 
laws and regulations. In addition, if the various investments held by our pension trusts do not perform as expected 
or the liabilities increase as a result of discount rate changes and other actuarial changes, our pension expense and 
required contributions would increase and, as a result, could materially adversely affect our business or require us to 
record charges that could be significant and would cause a reduction in our shareholders’ equity. We may be required 
legally  to  make  contributions  to  the  pension  plans  in  the  future  in  excess  of  our  current  expectations,  and  those 
contributions could be material.

Future  actions  involving  our  defined  benefit  and  other  postretirement  plans,  such  as  annuity  purchases, 
lump-sum payouts, and/or plan terminations could cause us to incur significant pension and postretirement 
settlement and curtailment charges, and require cash contributions.

We have purchased annuities and offered lump-sum payouts to defined benefit plan and other postretirement plan 
participants and retirees in the past. If we were to take similar actions in the future, we could incur significant pension 
settlement and curtailment charges related to the reduction in pension and postretirement obligations from annuity 
purchases,  lump-sum  payouts  of  benefits  to  plan  participants,  and/or  plan  terminations.  Pursuing  these  types  of 
actions could require us to make additional contributions to the defined benefit plans to maintain a legally required 
funded status.

Risks Related to Legal, Compliance and Regulatory Matters

If government-imposed restrictions continue, are re-imposed, or are expanded, our business could be further 
adversely impacted.

The  global  outbreaks  of  COVID-19  and  new  variants  of  the  virus  continue  to  create  uncertainty  with  respect  to 
economic demand and operations. The COVID-19 outbreak has resulted in significant governmental measures being 
implemented to control the spread of COVID-19, including, among others, restrictions on travel and manufacturing 
operations in certain regions of the world. To the extent that governments reimpose restrictions that have now lapsed, 
or to the extent that the COVID-19 outbreak intensifies or new dangerous variants develop and new restrictions are 
implemented, we could experience additional material impacts to our short-term and long-term operations, access to 
skilled labor or raw materials, and related results of operations, including revenue, gross margins, operating margins 
and cash flows.

Current and future environmental health and safety laws, regulations, and customer requirements impose 
substantial costs and limitations on our operations and compliance may be more costly than we expect.

We  are  subject  to  the  risk  of  substantial  environmental  liability  and  limitations  on  our  operations  due  to  current 
environmental laws and regulations and future environmental laws and regulations could impose additional risks and 
limitations. We are or may become subject to extensive federal, state, local and foreign environmental, health and 
safety laws and regulations concerning matters such as air emissions, wastewater discharges, the use of per- and 
polyfluoroalkyl  substances  or  other  chemicals  of  concern,  waste  management  (e.g.  storage,  disposal)  and  the 
investigation  and  remediation  of  contamination. The  risks  of  substantial  costs  and  liabilities  related  to  compliance 
with these laws and regulations are an inherent part of our business, and future conditions may develop, arise or be 
discovered that create substantial environmental compliance or remediation liabilities and costs.

13

Compliance with environmental, health and safety legislation and regulatory requirements may prove to be more limiting 
and costly than we anticipate. To date, we have committed significant expenditures in our efforts to manage remediation 
activities  and  maintain  compliance  with  these  requirements  at  our  facilities,  and  we  expect  that  we  will  continue  to 
make significant expenditures related to such compliance in the future. From time to time, we may be subject to legal 
proceedings  brought  by  private  parties  or  governmental  authorities  with  respect  to  environmental  matters,  including 
matters  involving  alleged  noncompliance  with  or  liability  arising  from  environmental,  health  and  safety  laws,  property 
damage or personal injury. Actual or alleged violations of environmental, health and safety laws or environmental permit 
requirements could result in restrictions or prohibitions on operations and substantial civil or criminal fines, as well as, 
under some environmental, health, and safety laws, the assessment of strict liability and/or joint and several liability. New 
laws and regulations, including those that may relate to emissions of greenhouse gases or the use, discharge or disposal 
of chemicals of concern utilized in our manufacturing processes, stricter enforcement of existing laws and regulations, 
new and more stringent customer requirements, the discovery of previously unknown contamination or the imposition 
of new clean-up requirements or standards could require us to incur costs or become the basis for new or increased 
liabilities that could have a material adverse effect on our business, financial condition or results of operations.

We are subject to a wide variety of domestic and foreign laws and regulations that could adversely affect our 
results of operations, cash flow or financial condition.

We are subject to a wide variety of domestic and foreign laws and regulations, and legal compliance risks, including 
securities laws, tax laws, data privacy laws, employment and pension-related laws, competition laws, U.S. and foreign 
export and trade laws, government procurement regulations, and laws governing improper business practices. We 
are affected by both new laws and regulations, and changes to existing laws and regulations which may continue to 
evolve through interpretations by courts and regulators. Furthermore, the laws and regulations to which we are subject 
may differ from jurisdiction to jurisdiction, further increasing the cost of compliance and the risk of noncompliance.

In addition, we could be adversely affected by violations of the FCPA and similar worldwide anti-bribery laws as well 
as export controls and economic sanction laws. The FCPA and similar anti-bribery laws in other jurisdictions generally 
prohibit companies and their intermediaries from making improper payments to non-U.S. government officials for the 
purpose of obtaining or retaining business. Recently, there has been a substantial increase in the global enforcement 
of  anti-corruption  laws.  We  operate  in  many  parts  of  the  world  that  have  experienced  governmental  corruption  to 
some degree and, in certain circumstances, strict compliance with anti-bribery laws may conflict with local customs 
and practices. Our policies mandate compliance with these laws, but we cannot assure you that our internal controls 
and  procedures  will  always  protect  us  from  the  improper  acts  committed  by  our  employees,  agents  or  third-party 
intermediaries.  If  we  are  found  to  be  liable  for  FCPA,  export  control  or  sanction  violations,  we  could  suffer  from 
criminal or civil penalties or other sanctions, including loss of export privileges or authorization needed to conduct 
aspects of our international business, which could have a material adverse effect on our business.

Also,  our  sales  to  public-sector  customers  are  subject  to  complex  regulations.  Noncompliance  with  government 
procurement regulations, information security requirements, or other applicable laws or regulations could result in civil, 
criminal and administrative liability, termination of government contracts or other public-sector customer contracts, 
and suspension, debarment or ineligibility from doing business with governmental entities or other customers in the 
public sector.

Compliance with the laws and regulations described above or with other applicable foreign, federal, state, and local 
laws  and  regulations  currently  in  effect  or  that  may  be  adopted  in  the  future  could  materially  adversely  affect  our 
competitive position, operating results, financial condition and liquidity.

14

New or more stringent government regulations or standards associated with climate change could increase 
our operational costs and severe weather associated with a changing climate could negatively impact our 
operations and those of our customers and suppliers.

We  are  subject  to  domestic  and  foreign  regulations  and  standards  governing  emission  limits  which  are,  in  part, 
designed to address climate change. Due to increasing global concern over the effects of climate change, new or 
more stringent regulations and standards may be mandated. Tighter emissions controls as a result of these actions 
could increase our operational costs and could lead to disruptions in our operations as compliance is attained. In 
addition, environmental activism and initiatives aimed at limiting climate change and reducing global greenhouse gas 
emissions could interfere with our business strategy and operations as well as require material investment in energy 
efficiency projects and renewable energy sourcing. Severe weather associated with a changing climate could also 
negatively impact the operation of our facilities, as well as those of our customers and suppliers.

Responses to corporate social responsibility (“CSR”) topics, including those related to climate change, could 
adversely affect our business and performance.

Investors,  customers,  suppliers,  employees,  regulators  and  other  stakeholders  are  increasingly  focused  on  CSR 
practices and disclosures, and expectations in this area are rapidly evolving and growing. We have announced goals 
covering  certain  CSR  topics,  such  as  those  related  to  reductions  in  greenhouse  gas  emissions  and  maintaining 
employee health and safety. Over time, stakeholder expectations for, and regulatory requirements related to, our CSR 
program and initiatives may change, and our investors, customers, suppliers, employees or regulators may demand 
that we implement additional, or stricter, goals and initiatives related to CSR topics. Greater expectations or legal 
requirements may cause us to undertake costly initiatives to satisfy such new criteria. If we are unable to respond 
effectively, stakeholders may conclude that our CSR program and initiatives are inadequate. If we do not meet, or 
are perceived to have not met, announced CSR goals or do not accurately disclose our progress on such goals, our 
reputation, competitive position, financial condition and operating results could be adversely impacted.

Risks Related to Data Privacy and Information Security

The Company may be subject to risks relating to its information technology systems, including the risk of 
security breaches.

The Company relies on information technology systems to manage and operate its business and to process, transmit 
and store sensitive and confidential data, including its intellectual property and other proprietary business information 
and that of its customers and suppliers. Despite security measures taken by the Company, the Company’s information 
technology systems (both on-premises and third-party managed) may be vulnerable to attacks by hackers or breached 
due to employee error, technological error, supplier error, malfeasance or other disruptions. While we have utilized 
and continue to utilize various controls and systems to mitigate such risks, we cannot assure that the actions we have 
implemented  and  are  implementing,  or  that  we  cause  or  have  caused  third-party  service  providers  to  implement, 
will be sufficient to protect our systems or sensitive and confidential data. We have been and may in the future be 
subject to attempts to gain unauthorized access to our information technology systems. To date, the impacts of prior 
events have not had a material adverse effect on us. Any such breach in security could expose the Company and its 
employees, customers and suppliers to risks of misuse of confidential information, manipulation and destruction of 
data, production downtimes, litigation and operational disruptions, which in turn could adversely affect the Company’s 
reputation, competitive position, business or results of operations.

15

Data privacy and security concerns, as well as evolving government regulation, could adversely affect our 
results of operations and profitability.

We collect, store, access and otherwise process certain confidential or sensitive data, including proprietary business 
information,  personal  data  or  other  information  that  is  subject  to  privacy  and  security  laws,  regulations  and/or 
government or customer-imposed controls. We operate in a global environment in which the data privacy regulatory 
and  legal  framework  is  evolving  quickly.  Moreover,  the  data  privacy  laws  of  the  specific  jurisdictions  in  which  we 
operate may vary and potentially conflict. As such, we cannot predict the cost of compliance with future data privacy 
laws,  regulations  and  standards,  future  interpretations  of  current  laws,  regulations  and  standards,  or  the  potential 
effects on our business. 

Government enforcement actions can be costly and interrupt the regular operation of our business, and a violation of 
data privacy laws or a security breach involving personal or customer data can result in fines, reputational damage, 
loss of business, and civil lawsuits, any of which may adversely affect our results of operations and profitability.

General Risk Factors

Weakness in global economic conditions or in any of the industries or geographic regions in which we or 
our customers operate, as well as the cyclical nature of our customers’ businesses generally or sustained 
uncertainty in financial markets, could adversely impact our revenues and profitability by reducing demand 
and margins.

There has been significant volatility in the capital markets and in the end markets and geographic regions in which we 
and our customers operate, which has negatively affected our revenues. Our revenues also may be negatively affected 
by changes in customer demand, changes in the product mix and negative pricing pressure in the industries in which 
we operate. Margins in those industries are highly sensitive to demand cycles, and our customers in those industries 
historically have tended to delay large capital projects, including expensive maintenance and upgrades during economic 
downturns. As a result, our revenues and earnings are impacted by overall levels of industrial production. 

Rising inflationary pressure has resulted in and could further result in increased employee expenses, shipping 
costs,  raw  material  costs,  energy  and  fuel  costs  and  other  costs  of  production.  If  we  cannot  continue  to 
absorb or pass these increases in our costs of production to our customers, our results of operations, profit 
margins and cash flows could be adversely affected.

Increases  in  compensation,  wage  pressure,  and  other  expenses  for  our  employees  have  adversely  affected  our 
profitability and could continue to do so. These cost increases may result from inflationary pressures that could further 
reduce our sales or profitability. Inflation has led to and could continue to lead to further increases in other operating 
costs, such as shipping costs, costs of raw materials, and energy and fuel prices. If we are unable to increase the 
price of our products to offset further cost increases, or experience a lag in doing so, due to pricing pressure, contract 
terms or other factors, our financial condition, results of operations and cash flows may be adversely affected. 

Warranty, recall, quality or product liability claims could materially adversely affect our earnings.

Warranty, recall, quality or product liability claims could materially adversely affect our earnings and brand reputation. 
In our business, we are exposed to warranty and product liability claims. In addition, we may be required to participate 
in the recall of a product. If we fail to meet customer specifications for their products, we may be subject to product 
quality  costs  and  claims,  as  well  as  adverse  brand  reputational  impacts. A  successful  warranty  or  product  liability 
claim against us, or a requirement that we participate in a product recall, could have a material adverse effect on our 
earnings and brand reputation.

16

If  our  internal  controls  are  found  to  be  ineffective,  our  financial  results  or  our  stock  price  may  be  
adversely affected.

Our  most  recent  evaluation  resulted  in  our  conclusion  that,  as  of  December  31,  2022,  our  internal  control  over 
financial reporting was effective. We believe that we currently have adequate internal control procedures in place for 
future periods, including processes related to newly acquired businesses; however, increased risk of internal control 
breakdowns generally exists in a business environment that is decentralized. In addition, if our internal control over 
financial reporting is found to be ineffective, investors may lose confidence in the reliability of our financial statements, 
which may adversely affect our stock price.

Changes in accounting standards could have an adverse effect on our results of operations, as reported in 
our financial statements.

Our  consolidated  financial  statements  are  prepared  in  accordance  with  U.S.  Generally  Accepted  Accounting 
Principles  (“U.S.  GAAP”),  which  is  periodically  revised  and/or  expanded. Accordingly,  from  time  to  time  we  are 
required to adopt new or revised accounting standards and related interpretations issued by recognized authoritative 
bodies,  including  the  Financial  Accounting  Standards  Board  (“FASB”)  and  the  SEC.  The  impact  of  accounting 
pronouncements that have been issued but not yet implemented is disclosed in this Annual Report on Form 10-K 
and our Quarterly Reports on Form 10-Q. It is possible that future accounting guidance we are required to adopt, 
or  future  changes  in  accounting  principles,  could  change  the  current  accounting  treatment  that  we  apply  to  our 
consolidated financial statements and that such changes could have an adverse effect on our results of operations, 
as reported in our consolidated financial statements.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

The Company’s corporate headquarters is located in North Canton, Ohio, and, at December 31, 2022, the Company 
maintained  77  manufacturing  plants.  The  Company  also  maintains  various  sales  and  administrative  offices  and 
distribution centers throughout the world. None of these manufacturing plants, administrative offices or distribution 
centers are individually material to the Company’s operations. The facilities are situated in the United States, as well 
as 45 other countries, including China, India, and Romania. The Company owns the majority of its manufacturing 
plants, and its leased properties primarily consist of sales and administrative offices and distribution centers.

The  buildings  occupied  by  Timken  are  principally  made  of  brick,  steel,  reinforced  concrete  and  concrete  block 
construction. The  Company  believes  all  buildings  are  in  satisfactory  operating  condition  to  conduct  business. The 
extent to which the Company utilizes its properties varies by property and from time to time. The Company believes 
that its capacity levels are adequate for its present and anticipated future needs. Most of the Company’s manufacturing 
facilities remain capable of handling additional volume increases.

Item 3. Legal Proceedings

The Company is involved in various claims and legal actions arising in the ordinary course of business. SEC regulations 
require  us  to  disclose  certain  information  about  environmental  proceedings  when  a  governmental  authority  is  a 
party to the proceedings if we reasonably believe that such proceedings may result in monetary sanctions above a 
stated threshold. Pursuant to such regulations, the Company uses a threshold of $1 million or more for purposes of 
determining whether disclosure of any such proceedings is required as we believe matters under this threshold are 
not material to the Company. In the opinion of management, the ultimate disposition of these matters will not have a 
material adverse effect on the Company’s consolidated financial position or annual results of operations.

Item 4. Mine Safety Disclosures

Not applicable.

17

Item 4A. Information about our Executive Officers

The executive officers are elected by the Board of Directors normally for a term of one year and until the election of 
their successors. All executive officers have been employed by Timken during the past five-year period. The executive 
officers of the Company as of February 16, 2023 are as follows:

Name
Christopher A. Coughlin

Philip D. Fracassa
Richard G. Kyle
Hansal N. Patel

Natasha Pollock

Andreas Roellgen

Age Current Position and Previous Positions During Last Five Years
62

2022 Executive Vice President and President of Industrial Motion
2014 Executive Vice President and Group President
2014 Executive Vice President and Chief Financial Officer
2014 President and Chief Executive Officer
2019 Vice President, General Counsel and Secretary
2019 Vice President - Legal and Corporate Secretary
2018 Director - Legal and Corporate Secretary
2021 Vice President, Human Resources
2020 Director - Human Resources
2015 General Manager - Human Resources
2022 Executive Vice President and President of Engineered Bearings
2016 Vice President - Europe, Asia and Africa

54
57
42

48

55

18

PART II.

Item  5.  Market  for  Registrant’s  Common  Equity,  Related  Stockholder  Matters  and  Issuer  Purchases  of 
Equity Securities

The Company’s common shares are traded on the New York Stock Exchange under the symbol “TKR”. The estimated 
number of record holders of the Company’s common shares at December 31, 2022 was 3,046. The estimated number 
of beneficial shareholders at December 31, 2022 exceeds 90,000.

Issuer Purchases of Common Shares:
The following table provides information about purchases of its common shares by the Company during the quarter 
ended December 31, 2022.

Period
10/1/2022 - 10/31/2022
11/1/2022 - 11/30/2022

12/1/2022 - 12/31/2022

Total

Total number 
of shares 
purchased (1)

Average  
price paid  
per share (2)
—
72.86

74.55
73.02

$

— $

240,985

25,500
266,485

Total number of  
shares purchased  
as part of publicly 
announced  
plans or programs

Maximum number 
of shares that may 
yet be purchased 
under the plans or 
programs (3)

—
225,000

25,000
250,000

6,050,000
5,825,000

5,800,000
—

(1)   Of  the  shares  purchased  in  November  and  December,  15,985  and  500  respectively,  represent  common 
shares of the Company that were owned and tendered by employees to exercise stock options, and to satisfy 
withholding obligations in connection with the exercise of stock options and vesting of restricted shares.
(2)  For shares tendered in connection with the vesting of restricted shares, the average price paid per share is 
an average calculated using the daily high and low of the Company’s common shares as quoted on the New 
York Stock Exchange at the time of vesting. For shares tendered in connection with the exercise of stock 
options, the price paid is the real-time trading share price at the time the options are exercised.

(3)  On February 12, 2021, the Company's Board of Directors approved a new share repurchase plan, effective 
March  1,  2021,  pursuant  to  which  the  Company  may  purchase  up  to  ten  million  of  its  common  shares,  in 
the aggregate. This share purchase plan expires on February 28, 2026. Under this plan, the Company may 
purchase shares from time to time in open market purchases or privately negotiated transaction, and it may 
make all or part of the purchases pursuant to accelerated share repurchases or Rule 10b5-1 plans.

19

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of 
Equity Securities (continued)

Comparison of Five-Year Cumulative Total Return*
Among The Timken Company, S&P 500 and S&P 400 Industrials

$250

$200

$150

$100

$50

$0

2017

2018

2019

2020

2021

2022

Timken

S&P 500

S&P 400 Industrials

*Total return assumes reinvestment of dividends. Fiscal years ending December 31. 

2018

2019

2020

2021

2022

Timken
S&P 500
S&P 400 Industrials

$

78
96
85

$

120
126
114

$

169
149
132

$

154
192
170

$

160
157
151

The line graph compares the cumulative total shareholder returns over five years for The Timken Company, the S&P 
500 Stock Index and the S&P 400 Industrials Index. The graph assumes, in each case, an initial investment of $100 
on January 1, 2018, in Timken common shares, S&P 500 Index and S&P 400 Industrials Index, based on market prices 
at the end of each fiscal year through and including December 31, 2022, and reinvestment of dividends.

20

Item 6. Selected Financial Data

Summary of Operations and Other Comparative Data:

(Dollars in millions, except per share, shareholder and per  
employee data)

2022

2021

2020

2019

2018

Statements of Income

Net sales

Gross profit

Operating income

Net income

Other Comparative Data

Total assets

Total liabilities

Total equity

$

4,496.7 $

4,132.9 $

3,513.2 $

3,789.9 $

3,580.8

1,288.1

1,102.5

1,009.9

1,141.8

1,040.1

606.9

417.0

513.1

381.5

454.9

292.4

516.4

374.7

454.5

305.5

302.8

3.93

3.86

8.5%

332.5

112.6

3.1%

146.0

1.11

Net income attributable to The Timken Company

$

407.4 $

369.1 $

284.5 $

362.1 $

Basic earnings per share (1)

Diluted earnings per share (2)

5.54

5.48

4.86

4.79

3.78

3.72

4.78

4.71

Weighted average number of shares outstanding - basic

73,602,247

75,885,316

75,354,280

75,758,123

77,119,602

Weighted average number of shares outstanding - diluted

74,323,839

77,006,589

76,401,366

76,896,565

78,337,481

Net income attributable to The Timken Company / net sales

Net cash provided from operating activities

Capital expenditures

Capital expenditures / net sales

Depreciation and amortization

Dividends per share

Number of employees at year-end

Non-GAAP Financial Information (3)

Adjusted earnings per share

Adjusted earnings before interest, taxes, depreciation
   and amortization (EBITDA)

Adjusted EBITDA Margin (% of net sales)

Free cash flow

Adjusted return on invested capital (ROIC)

$

$

$

$

5,772.4 $

5,170.7 $

5,041.6 $

4,859.9 $

4,445.2

2,793.0

2,377.7

2,816.4

2,225.2

2,905.1

1,954.8

2,802.5

1,642.7

3,419.5

2,352.9

9.1%

463.8

178.4

4.0%

164.0

8.9%

387.3

148.3

3.6%

167.8

8.1%

577.6

121.6

3.5%

167.1

9.6%

550.1

140.6

3.7%

160.6

1.23 $

1.19 $

1.13 $

1.12 $

19,404

18,029

17,430

18,829

17,477

6.02 $

4.72 $

4.10 $

4.60 $

4.18

855.9 $

718.0 $

658.9 $

726.3 $

646.5

19.0 %

285.4

12.6 %

17.4 %

239.0

11.0 %

18.8 %

456.0

9.9 %

19.2 %

409.5

11.9 %

18.1 %

219.9

12.8 %

(1)	 Based	on	weighted	average	number	of	shares	outstanding	during	the	year.
(2)	 Based	on	weighted	average	number	of	shares	outstanding	during	the	year,	assuming	dilution	of	stock	options	and	awards.
(3)	 Refer	to	page	38 for reconciliations to the most directly comparable generally accepted accounting principal (“GAAP”) financial measures. 

21

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
(Dollars in millions, except per share data)

OVERVIEW

Introduction:

The Timken Company designs and manufactures a growing portfolio of engineered bearings and industrial motion 
products,  and  provides  related  services.  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. 
Timken	posted	$4.5	billion	in	sales	in	2022	and	employs	more	than	19,000	people	globally,	operating	in	46	countries.	
The	 Company	 has	 historically	 operated	 under	 two	 reportable	 segments:	 (1)	 Mobile	 Industries	 and	 (2)	 Process	
Industries. The following further describes these business segments:

 • Mobile Industries serves OEM customers that manufacture off-highway equipment for the agricultural, mining 
and  construction  markets;  on-highway  vehicles  including  passenger  cars,  light  trucks,  and  medium-  and 
heavy-duty trucks; rail cars and locomotives; outdoor power equipment; rotorcraft and fixed-wing aircraft; and 
other mobile equipment. Beyond service parts sold to OEMs, aftermarket sales and services to individual end 
users, equipment owners, operators and maintenance shops are handled directly or through the Company’s 
extensive network of authorized automotive and heavy-truck distributors.

 •

Process Industries serves OEM and end-user customers in industries that place heavy demands on the 
fixed  operating  equipment  they  make  or  use  in  heavy  and  other  general  industrial  sectors.  This  includes 
metals,  cement  and  aggregate  production;  power  generation  and  renewable  energy  sources;  oil  and  gas 
extraction and refining; pulp and paper and food processing; automation and robotics; and health and critical 
motion  control  equipment.  Other  applications  include  marine  equipment,  gear  drives,  cranes,  hoists  and 
conveyors. This segment also supports aftermarket sales and service needs through its global network of 
authorized industrial distributors and through the provision of services directly to end users.

Timken  creates  value  by  understanding  customer  needs  and  applying  its  know-how  to  serve  a  broad  range  of 
customers in attractive markets and industries across the globe. The Company’s business strengths include its product 
technology, end-market diversity, geographic reach and aftermarket mix. Timken collaborates with OEMs to improve 
equipment efficiency with its engineered products and captures subsequent equipment replacement cycles by selling 
largely  through  independent  channels  in  the  aftermarket.  Timken  focuses  its  international  efforts  and  footprint  in 
regions  of  the  world  where  strong  macroeconomic  factors  such  as  urbanization,  infrastructure  development  and 
sustainability create demand for its products and services. 

The Company’s strategy has three primary elements:

Profitable  Growth.  The  Company  intends  to  expand  into  new  and  existing  markets  by  leveraging  its  collective 
knowledge of metallurgy, friction management and industrial motion to create value for Timken customers. Using a 
highly collaborative technical selling approach, the Company places particular emphasis on creating unique solutions 
for challenging and/or  demanding  applications. The Company intends to grow in attractive  market sectors around 
the world, emphasizing those spaces that are highly fragmented, demand high service and value the reliability and 
efficiency  offered  by  Timken  products.  The  Company  also  targets  applications  that  offer  significant  aftermarket 
demand, thereby providing product and services revenue throughout the equipment’s lifetime.

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, encouraging organizational 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.

Capital Deployment to Drive Shareholder Value. The Company is intently focused on providing the highest returns 
for	shareholders	through	its	capital	allocation	framework,	which	includes:	(1)	investing	in	the	core	business	through	
capital	 expenditures,	 research	 and	 development	 and	 initiatives	 to	 drive	 profitable	 organic	 growth;	 (2)	 pursuing	
strategic  acquisitions  to  broaden  its  portfolio  and  capabilities  across  diverse  markets,  with  a  focus  on  bearings, 
adjacent	industrial	motion	products	and	related	services;	(3)	returning	capital	to	shareholders	through	dividends	and	
share	repurchases;	and	(4)	maintaining	a	strong	balance	sheet	and	sufficient	liquidity.	As	part	of	this	framework,	the	
Company may also restructure, reposition or divest underperforming product lines or assets.

22

The	following	items	highlight	certain	of	the	Company’s	more	significant	strategic	accomplishments	in	2022:

 • On	 November	 4,	 2022,	 the	 Company	 completed	 the	 acquisition	 of	 GGB	 Bearing	 Technology	 (“GGB”),	 a	
global supplier of highly engineered and customized plain bearings and a leader in metal polymer bearings. 
With	 expected	 annual	 sales	 of	 approximately	 $200	 million	 at	 the	 time	 of	 acquisition,	 GGB	 will	 bolster	 the	
Company’s engineered bearings portfolio. 

 • On	May	31,	2022,	the	Company	completed	the	acquisition	of	Spinea,	s.r.o.	(“Spinea”),	which	expanded	its	
robotics  and  automation  offering  in  attractive  end  market  sectors.  Spinea  is  a  technology  leader  in  highly 
engineered cycloidal reduction gears and actuators.

 • On	November	1,	2022,	the	Company	completed	the	divestiture	of	Timken	Aerospace	Drives	Systems,	LLC	
(“ADS”). ADS is a supplier of drive system components and sub-assemblies for military and civil rotorcraft 
applications.	At	the	time	of	the	divestiture,	ADS	had	revenue	of	approximately	$40	million	in	2022.

 • On	September	1,	2022,	the	Company	completed	the	divestiture	of	Timken-Rus	Service	Company	ooo	(“Timken	
Russia”). Refer to Russia operations in Management’s Discussion and Analysis for additional information.

 •

The	Company	repurchased	3.25	million	common	shares,	or	over	4	percent	of	its	outstanding	common	shares,	
and	increased	its	quarterly	dividend	in	the	second	quarter.	In	addition,	the	Company	achieved	100	years	of	
paying  quarterly  dividends  and  marked  its  ninth  consecutive  year  of  higher  annual  dividends.  In  total,  the 
Company	returned	$303	million	to	shareholders	during	the	year	through	dividends	and	share	repurchases.

RESULTS OF OPERATIONS
2022 vs. 2021 

Overview: 

Net sales
Net income
Net income attributable to noncontrolling interest
Net income attributable to The Timken Company
Diluted earnings per share
Average number of diluted shares

$

$
$

2022
4,496.7
417.0
9.6
407.4
5.48
74,323,839

$

$
$

2021
4,132.9
381.5
12.4
369.1
4.79
77,006,589

$

$
$

$ Change % Change

363.8
35.5
(2.8)
38.3
0.69
—

8.8%
9.3%
(22.6%)
10.4%
14.4%
(3.5%)

The  increase  in  net  sales  was  primarily  driven  by  strong  organic  growth  (including  pricing)  and  the  net  benefit  of 
acquisitions and divestitures, partially offset by the unfavorable impact of foreign currency exchange rate changes. 
The increase in net income was primarily due to favorable price/mix and the impact of higher volume, partially offset 
by higher material, logistics and other operating costs, an increase in impairment, restructuring and acquisition-related 
charges, an increase in net interest expense, and a higher tax rate. 

Outlook:

The	Company	expects	2023	full-year	revenue	to	be	up	approximately	6%	at	the	midpoint	compared	to	2022,	driven	
by modest organic growth and the net benefit of acquisitions and divestitures, partially offset by the net unfavorable 
impact	of	foreign	currency	exchange	rates.	The	Company’s	earnings	are	expected	to	be	up	in	2023	compared	with	
2022,	primarily	due	to	the	favorable	impact	of	price/mix	and	lower	material	and	logistics	costs,	partially	offset	by	higher	
manufacturing costs and selling, general and administrative expenses, and higher interest expense.

The	Company	expects	to	generate	a	higher	amount	of	cash	from	operating	activities	in	2023	compared	to	2022,	driven	
by higher earnings and improved working capital performance. The Company expects higher capital expenditures in 
2023	compared	to	2022,	but	relatively	in	line	with	2022	spending	as	a	percentage	of	sales	(4.0%).

23

THE STATEMENTS OF INCOME

Sales:

Net sales

2022

$

4,496.7

$

2021
4,132.9

$ Change
363.8
$

% Change 
8.8%

Net	sales	increased	in	2022	compared	with	2021,	primarily	due	to	strong	organic	growth	of	$478	million	and	the	net	
benefit	of	acquisitions	and	divestitures	of	$28	million,	partially	offset	by	the	unfavorable	impact	of	foreign	currency	
exchange	 rate	 changes	 of	 $142	 million.	 The	 higher	 organic	 revenue	 was	 driven	 by	 higher	 demand	 across	 both	
segments, and higher net pricing. 

Gross Profit:

Gross profit
Gross profit % to net sales

$

2022

1,288.1
28.6%

$

2021
1,102.5
26.7%

$ Change
185.6
$
—

Change
16.8%
190 bps

Gross	profit	increased	in	2022	compared	with	2021,	primarily	due	to	favorable	price/mix	of	$305	million	and	the	impact	
of	higher	volume	of	$102	million,	partially	offset	by	higher	material	and	logistics	costs	of	$126	million,	unfavorable	
manufacturing	 performance	 of	 $67	 million,	 the	 unfavorable	 impact	 of	 foreign	 currency	 exchange	 rate	 changes	 of	
$17	million	and	the	inventory	step-up	impact	from	acquisitions	of	$8	million.

Selling, General and Administrative (“SG&A”) Expenses:

Selling, general and administrative expenses
Selling, general and administrative expenses % to net sales

$

637.1
14.2%

$

580.5
14.0%

2022

2021

$ Change
56.6
$
—

Change
9.8%
20 bps

The	 increase	 in	 SG&A	 expenses	 in	 2022	 compared	 with	 2021	 was	 primarily	 due	 to	 higher	 compensation	 costs	
(including  incentive-based  compensation)  and  increased  spending  to  support  the  higher  sales  and  business 
activity levels.

Impairment and Restructuring Charges:

Impairment charges
Severance and related benefit costs
Exit costs
Total

2022

2021

$

$

38.3
4.2
1.6
44.1

$

$

$ Change
33.8
$
1.6
(0.2)
35.2

$

4.5
2.6
1.8
8.9

Impairment	and	restructuring	charges	of	$44.1	million	in	2022	were	primarily	due	to	impairment	charges	recorded	in	
advance of the ADS divestiture, which was completed in the fourth quarter, and impairment charges recorded against 
property, plant and equipment at the Company’s joint venture in Russia. In addition, the Company incurred severance 
and related benefits, and exit costs associated with the closure of the Company’s Villa Carcina, Italy bearing plant.

Impairment	and	restructuring	charges	of	$8.9	million	in	2021	were	comprised	primarily	of	severance	and	related	benefits	
associated with the planned closures of the Company’s Villa Carcina, Italy bearing plant and Indianapolis, Indiana 
chain  plant.  These  initiatives  were  undertaken  to  reduce  headcount  and  right-size  the  Company’s  manufacturing 
footprint.	 In	 addition,	 impairment	 and	 restructuring	 during	 2021	 included	 impairment	 charges	 related	 to	 certain	
engineering-related assets used in the business. Management concluded no further investment would be made in the 
engineering-related assets and, as a result, reduced value to zero.

24

Interest Expense and Income:

Interest expense
Interest income

2022

2021

$

(74.6) $
3.8

(58.8)
2.3

$ Change
$

(15.8)
1.5

% Change
26.9%
65.2%

Interest	expense	increased	in	2022	compared	to	2021,	primarily	due	to	higher	average	debt	outstanding	and	rising	interest	
rates.	During	the	year,	the	Company	issued	$350	million	of	10-year	fixed-rate	unsecured	senior	notes	(“2032	Notes”).	
Proceeds	from	the	2032	Notes	were	used	for	general	corporate	purposes,	which	included	repayment	of	other	borrowings	
outstanding	at	the	time	of	issuance.	In	addition,	a	portion	of	the	proceeds	from	the	2032	Notes	was	used	to	fund	the	
Spinea	acquisition,	which	closed	in	the	second	quarter	of	2022.

Other Income (Expense):

Non-service pension and other postretirement income
Other income, net

2022

2021

$

9.3
5.5

$

18.3
0.8

$ Change
$

(9.0)
4.7

% Change
(49.2%)
587.5%

The decrease in non-service pension and other postretirement income was primarily due to lower expected returns on 
pension	assets,	as	well	as	higher	net	actuarial	losses	in	2022	compared	to	2021.	In	2022,	$2.9	million	of	net	actuarial	
losses	were	recognized,	compared	to	$0.3	million	of	net	actuarial	losses	in	2021.	Refer	to	Note 16 - Retirement Benefit 
Plans and Note 17 - Other Postretirement Benefit Plans in the Notes to the Consolidated Financial Statements for 
more information.

The  increase  in  other  income  is  primarily  due  to  sale  of  the  Company’s  Villa  Carcina,  Italy  bearing  plant  upon  its 
closure	in	2022.	Refer	to	Note 15 - Impairment and Restructuring Charges in the Notes to the Consolidated Financial 
Statements for more information.

Income Tax Expense:

Income tax expense

Effective tax rate

2022

2021

$ Change

$

133.9

$

95.1

$

24.3 %

20.0%

38.8

—

Change

40.8%

430 bps

The	effective	tax	rate	for	2022	was	24.3%,	which	was	unfavorable	compared	to	the	U.S.	federal	statutory	rate	of	21%,	
primarily due to the unfavorable impact of earnings in foreign jurisdictions where the effective tax rate was higher than 
21%.	This	was	partially	offset	by	the	release	of	accruals	for	uncertain	tax	positions	and	favorable	U.S.	permanent	
book-tax differences. 

The	effective	tax	rate	for	2021	was	20.0%,	which	was	favorable	compared	to	the	U.S.	federal	statutory	rate	of		21%,	
primarily due to the release of accruals for uncertain tax positions, favorable U.S. permanent book-tax differences 
and  the  release  of  a  valuation  allowance  on  certain  non-U.S.  deferred  tax  assets. This  was  partially  offset  by  the 
unfavorable	impact	of	earnings	in	foreign	jurisdictions	where	the	effective	tax	rate	was	higher	than	21%.

The	change	in	the	effective	rate	for	2022	compared	with	2021	was	an	increase	of	4.3%.	The	increase	was	primarily	due	
to the unfavorable impact of earnings in foreign jurisdictions with relatively higher tax rates and the net unfavorable 
impact of discrete tax items, including discrete tax benefits in the prior year related to the release of valuation allowance 
on certain non-U.S. deferred tax assets and lower U.S. permanent book-tax differences.

Refer to Note 5 - Income Taxes in the Notes to the Consolidated Financial Statements for more information on the 
computation of the income tax expense in interim periods.

For	 a	 discussion	 of	 changes	 in	 our	 results	 from	 2021	 to	 2020,	 refer	 to	 Management’s	 Discussion	 and	Analysis	 of	
Financial	Condition	and	Results	of	Operations	in	Part	II,	Item	7	of	our	Annual	Report	on	Form	10-K	for	the	year	ended	
December	31,	2021.	

25

BUSINESS SEGMENTS

The  Company’s  reportable  segments  are  business  units  that  serve  different  industry  sectors.  While  the  segments 
often  operate  using  shared  infrastructure,  each  reportable  segment  is  managed  to  address  specific  customer 
needs in these diverse market sectors. The primary measurement used by management to measure the financial 
performance of each segment is earnings before interest, taxes, depreciation and amortization (“EBITDA”). Refer to  
Note 4 - Segment Information in the Notes to the Consolidated Financial Statements for the reconciliation of EBITDA 
by segment to consolidated income before income taxes.

The	 Company	 has	 historically	 operated	 under	 two	 reportable	 segments:	 (1)	 Mobile	 Industries	 and	 (2)	 Process	
Industries.	During	2022,	the	Company	announced	certain	organizational	changes,	which	included	the	appointment	
of  executive  leaders  for  its  Engineered  Bearings  and  Industrial  Motion  product  groups.  After  evaluation  of  the 
organizational changes and other factors, the Company has concluded that it will operate under two new reportable 
segments,	Engineered	Bearings	and	Industrial	Motion,	beginning	with	the	first	quarter	of	2023.

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 acquisitions and divestitures 
completed	in	2022	and	2021	and	foreign	currency	exchange	rate	changes.	The	effects	of	acquisitions,	divestitures	
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	items	highlight	the	Company’s	acquisitions	and	divestitures	completed	in	2022	and	2021	by	segment	
based on the customers and underlying markets served:

 •

 •

 •

 •

 •

The	Company	acquired	GGB	during	the	fourth	quarter	of	2022.	Results	for	GGB	were	reported	in	the	Mobile	
Industries and Process Industries segments based on customers and underlying market sectors served.

The	Company	completed	the	sale	of	ADS	during	the	fourth	quarter	of	2022.	The	majority	of	the	results	for	ADS	
are reported in the Mobile Industries segment.

The	 Company	 completed	 the	 sale	 of	 Timken	 Russia	 during	 the	 third	 quarter	 of	 2022.	 Results	 for	 Timken	
Russia were reported in the Mobile Industries and Process Industries segments based on customers and 
underlying market sectors served.

The	Company	acquired	Spinea	during	the	second	quarter	of	2022.	The	majority	of	the	results	for	Spinea	are	
reported in the Process Industries segment.

The	Company	acquired	Intelligent	Machine	Solutions	(“iMS”)	during	the	third	quarter	of	2021.The	majority	of	
the results for iMS are reported in the Process Industries segment.

26

Mobile Industries Segment:

Net sales
EBITDA
EBITDA margin

Net sales
Less:	Acquisitions
  Divestitures
  Currency

$
$

$

2022

2,106.5
217.1
10.3%

2022

2,106.5
12.7
(10.4)
(62.6)

$
$

$

2021
1,965.7
240.1
12.2%

2021
1,965.7
—
—
—

$
$

$

$ Change

Change

140.8
(23.0)

7.2%
(9.6%)
— (190) bps

$ Change
140.8
12.7
(10.4)
(62.6)

% Change
7.2%
NM
NM
NM

Net sales, excluding the impact of acquisitions, 

divestitures and currency

$

2,166.8

$

1,965.7

$

201.1

10.2%

The Mobile Industries segment’s net sales, excluding the effects of acquisitions, divestitures and foreign currency 
exchange	rate	changes,	increased	$201.1	million	or	10.2%	in	2022	compared	with	2021,	reflecting	increased	shipments	
in	the	off-highway,	rail,	heavy	truck	and	automotive	sectors,	as	well	as	higher	net	pricing.	EBITDA	decreased	in	2022	
by	$23.0	million	or	9.6%	compared	with	2021,	primarily	due	to	higher	operating	costs,	as	well	as	higher	impairment	
and restructuring charges, partially offset by favorable price/mix and the impact of higher volume.

Process Industries Segment:

Net sales
EBITDA
EBITDA margin

Net sales
Less:	Acquisitions
  Divestitures
  Currency

$
$

$

2022

2,390.2
621.5
26.0%

2022

2,390.2
31.2
(5.3)
(79.8)

$
$

$

2021
2,167.2
506.3
23.4%

2021
2,167.2
—
—
—

$ Change

Change

$
$

$

223.0
115.2
—

$ Change

223.0
31.2
(5.3)
(79.8)

10.3%
22.8%
260 bps

% Change
10.3%
NM
NM
NM

Net sales, excluding the impact of acquisitions, 

divestitures and currency

$

2,444.1

$

2,167.2

$

276.9

12.8%

The Process Industries segment’s net sales, excluding the effects of acquisitions, divestitures and foreign currency 
exchange	rate	changes,	increased	$276.9	million	or	12.8%	in	2022	compared	with	2021.	The	increase	was	primarily	
driven by increased demand in the distribution, general and heavy industrial, marine and service sectors, as well as 
higher	net	pricing,	partially	offset	by	lower	revenue	in	the	renewable	energy	sector.	EBITDA	increased	$115.2	million	
or	22.8%	in	2022	compared	with	2021	primarily	due	to	favorable	price/mix	and	the	impact	of	higher	volume,	partially	
offset by higher operating costs and acquisition-related expenses.

Unallocated Corporate:

Unallocated corporate expense
Unallocated corporate expense % to net sales

2022

2021

$ Change

$

(50.0)
(1.1%)

$

(46.1)
(1.1%)

$

(3.9)
—

Change
8.5%
— bps

Unallocated	corporate	expense	increased	in	2022	compared	with	2021	primarily	due	to	higher	compensation	costs	
(including incentive-based compensation) and other spending to support increased business activity levels, partially 
offset	by	the	impact	of	foreign	currency	exchange	gains	in	2022	as	compared	with	foreign	currency	exchange	losses	
in the prior year.

27

 
 
 
 
  
 
 
 
 
CASH FLOWS

Net cash provided by operating activities
Net cash used in investing activities
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash

Increase (decrease) in cash, cash equivalents and restricted cash

2022

2021

463.8
(573.3)
206.8
(14.5)
82.8

$

$

387.3
(173.8)
(269.3)
(7.4)
(63.2)

$

$

$ Change
76.5
$
(399.5)
476.1
(7.1)
146.0

$

Operating Activities:

The	increase	in	net	cash	provided	by	operating	activities	in	2022	compared	with	2021	was	primarily	due	to	higher	
net	income	of	$35.5	million,	a	net	increase	in	non-cash	charges	of	$44.0	million	included	in	net	income,	including	
impairment	charges	and	stock-based	compensation	expense,	and	the	favorable	impact	of	income	taxes	of	$19.3	million,	
partially	offset	by	an	increase	in	the	cash	used	for	working	capital	items	of	$29.9	million.	Refer	to	the	table	below	for	
additional detail of the impact of each line on net cash provided by operating activities.

The	following	chart	displays	the	impact	of	working	capital	items	on	cash	during	2022	and	2021,	respectively:	

Cash (used in) provided by:
Accounts receivable
Unbilled receivables
Inventories
Trade accounts payable
Other accrued expenses
Cash used in working capital items

2022

2021

$ Change

$

$

(73.5)
(26.0)
(145.6)
(10.2)
91.9
(163.4)

$

$

(55.8)
6.2
(215.8)
76.7
55.2
(133.5)

$

$

(17.7)
(32.2)
70.2
(86.9)
36.7
(29.9)

The	following	table	displays	the	impact	of	income	taxes	on	cash	during	2022	and	2021,	respectively:	

Accrued income tax expense
Income tax payments
Other miscellaneous
 Change in income taxes

Investing Activities:

2022

2021

$

$

133.9
(120.6)
(0.6)
12.7

$

$

95.1
(100.7)
(1.0)
(6.6)

$ Change
38.8
$
(19.9)
0.4
19.3

$

The	increase	in	net	cash	used	in	investing	activities	in	2022	compared	with	2021	was	primarily	due	to	an	increase	in	
cash	used	for	acquisitions	of	$446.2	million,	partially	offset	by	proceeds	from	divestitures	of	$33.9	million.

Financing Activities:

The	change	in	net	cash	provided	by	financing	activities	in	2022	compared	with	2021	was	primarily	due	to	a	decrease	in	
net	payments	of	$598.7	million	on	outstanding	debt,	partially	offset	by	an	increase	in	the	purchase	of	treasury	shares	
of	$118.6	million.

28

 
 
LIQUIDITY AND CAPITAL RESOURCES

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

Net Debt:

Short-term debt, including current portion of long-term debt
Long-term	debt
Total debt
Less:	Cash	and	cash	equivalents
Net debt

Ratio of Net Debt to Capital:

Net debt
Total equity
Net debt plus total equity (capital)
Ratio of net debt to capital

December 31,

2022

2021

49.0
1,914.2
1,963.2
331.6
1,631.6

$

$

$

53.8
1,411.1
1,464.9
257.1
1,207.8

December 31,

2022
1,631.6
2,352.9
3,984.5
40.9%

$

$

2021
1,207.8
2,377.7
3,585.5
33.7%

$

$

$

$

$

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	December	31,	2022,	the	Company	had	strong	liquidity	with	$331.6	million	of	cash	and	cash	equivalents	on	the	
Consolidated	Balance	Sheet,	as	well	as	$828.2	million	available	under	committed	credit	lines.	Of	the	$331.6	million	of	
cash	and	cash	equivalents,	$305.7	million	resided	in	jurisdictions	outside	the	United	States.	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. This strategy includes 
making  investments  in  facilities,  equipment  and  potential  new  acquisitions.  The  Company  plans  to  fund  these 
investments, as well as meet working capital requirements, with cash and cash equivalents and unused lines of credit 
within the geographic location of these investments where feasible.

On	 December	 5,	 2022	 the	 Company	 entered	 into	 the	 Fifth	 Amended	 and	 Restated	 Credit	 Agreement	 (“Credit	
Agreement”),	 which	 is	 comprised	 of	 the	 $750.0	 million	 unsecured	 revolving	 credit	 facility	 (“Senior	 Credit	 Facility”)	
and	a	$400	million	unsecured	term	loan	facility	(“2027	Term	Loan”)	that	mature	on	December	5,	2027.	The	Credit	
Amendment	amended	and	restated	the	Company’s	previous	revolving	credit	agreement,	dated	as	of	June	25,	2019,	
and	replaced	the	$350	million	term	loan	that	was	set	to	mature	on	September	11,	2023	(“2023	Term	Loan”).	The	Credit	
Agreement	also	replaced	interest	rates	based	on	LIBOR	with	interest	rates	based	on	Secured	Overnight	Financing	
Rate	(“SOFR”).	At	December	31,	2022,	the	Senior	Credit	Facility	had	outstanding	borrowings	of	$8.5	million,	which	
reduced	the	availability	to	$741.5	million.	The	Credit	Agreement	has	two	financial	covenants:	a	consolidated	leverage	
ratio and a consolidated interest coverage ratio. The maximum consolidated leverage ratio permitted under the Senior 
Credit	Facility	is	4.0	to	1.0	for	the	next	four	fiscal	quarters	as	there	was	a	leverage	increase	period	following	a	qualified	
acquisition,	 after	 which	 it	 reverts	 to	 3.5	 to	 1.0.	 As	 of	 December	 31,	 2022,	 the	 Company’s	 consolidated	 leverage	
ratio	was	1.85	to	1.0.	The	minimum	consolidated	interest	coverage	ratio	permitted	under	the	Senior	Credit	Facility	is	
3.0	to	1.0.	As	of	December	31,	2022,	the	Company’s	consolidated	interest	coverage	ratio	was	12.02	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	5.10%	and	the	average	rate	on	outstanding	Euro	borrowings	
was	2.21%	as	of	December	31,	2022.	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	 December	 31,	 2022,	 the	 Company	 carried	 investment-grade	 credit	
ratings	with	Moody’s	(Baa2)	and	S&P	Global	(BBB-).

29

  
  
  
  
The	Company	has	a	$100.0	million	Amended	and	Restated	Asset	Securitization	Agreement	(the	“Accounts	Receivable	
Facility”),	which	matures	on	November	30,	2024.	The	Accounts	Receivable	Facility	is	subject	to	certain	borrowing	
base  limitations  and  is  secured  by  certain  domestic  trade  accounts  receivable  of  the  Company. These  limitations 
reduced	the	availability	of	the	Accounts	Receivable	Facility	to	$86.7	million	at	December	31,	2022.	As	of	December	31,	
2022,	there	were	$85.0	million	outstanding	borrowings	under	the	Accounts	Receivable	Facility,	which	reduced	the	
availability	under	this	facility	to	$1.7	million.

Other  sources  of  liquidity  include  uncommitted  short-term  lines  of  credit  for  certain  of  the  Company’s  foreign 
subsidiaries,	which	provide	for	borrowings	of	up	to	approximately	$234.2	million.	At	December	31,	2022,	the	Company	
had	 borrowings	 outstanding	 of	 $46.3	 million	 and	 bank	 guarantees	 of	 $2.8	 million,	 which	 reduced	 the	 aggregate	
availability	under	these	facilities	to	approximately	$185.1	million.	

On	March	28,	2022,	the	Company	issued	the	2032	Notes	in	the	aggregate	principal	amount	of	$350	million	with	an	
interest	rate	of	4.125%,	maturing	on	April	1,	2032.	Proceeds	from	the	2032	Notes	were	used	for	general	corporate	
purposes,  which  included  repayment  of  borrowings  under  the  Senior  Credit  Facility  and  the Accounts  Receivable 
Facility	outstanding	at	the	time	of	issuance.	In	addition,	a	portion	of	the	proceeds	from	the	2032	Notes	was	used	to	
fund	the	Spinea	acquisition,	which	closed	in	the	second	quarter	of	2022.

At	December	31,	2022,	the	Company	was	in	full	compliance	with	all	applicable	covenants	on	its	outstanding	debt.

Timken	expects	higher	net	interest	expense	in	2023	compared	to	2022,	due	to	higher	average	debt	balances	and	
increased interest rates.

The	Company	expects	to	generate	a	higher	amount	of	cash	from	operating	activities	in	2023	compared	to	2022,	driven	
by higher earnings and improved working capital performance. The Company expects higher capital expenditures in 
2023	compared	to	2022,	but	relatively	in	line	with	2022	spending	as	a	percentage	of	sales	(4.0%).

30

FUTURE CONTRACTUAL AND OTHER PAYMENTS

The  Company’s  material  cash  requirements  for  contractual  debt  obligations  and  other  contractual  commitments 
outstanding as of December 31, 2022 were as follows:

Payments due by period:

Future Contractual and Other Payments
Interest payments

Long-term debt

Short-term debt, including current portion of 

long-term debt

Purchase commitments

Operating leases

Retirement benefit plans

Total

Total

Less than
1 Year

1-5 Years

More than
5 Years

$

523.0

$

87.6

$

302.3

$

1,926.1

—

1,049.0

49.0
54.3

99.6

240.8

49.0
35.7

27.0

28.5

—
18.6

54.7

102.8

133.1

877.1

—
—

17.9

109.5

$

2,892.8

$

227.8

$

1,527.4

$

1,137.6

The interest payments beyond five years primarily relate to long-term fixed-rate notes. Refer to Note 12 - Financing 
Arrangements in the Notes to the Consolidated Financial Statements for additional information. 

In  order  to  maintain  minimum  funding  requirements,  the  Company  is  required  to  make  contributions  to  the  trusts 
established for its defined benefit pension plans and other postretirement benefit plans. The table above shows the 
expected  future  minimum  cash  contributions  to  the  trusts  for  the  funded  plans  as  well  as  estimated  future  benefit 
payments  to  participants  for  the  unfunded  plans.  Those  minimum  funding  requirements  and  estimated  benefit 
payments  can  vary  significantly.  The  amounts  in  the  table  above  are  based  on  actuarial  estimates  using  current 
assumptions  for,  among  other  things,  discount  rates,  expected  return  on  assets  and  health  care  cost  trend  rates. 
During 2022, the Company made cash contributions and payments of approximately $11.2 million to its global defined 
benefit pension plans and $3.4 million to its other postretirement benefit plans. Refer to Note 16 - Retirement Benefit 
Plans and Note 17 - Other Postretirement Benefit Plans in the Notes to the Consolidated Financial Statements for 
additional information. 

Refer to Note 5 - Income Taxes and Note 13 - Contingencies in the Notes to the Consolidated Financial Statements 
for additional information regarding the Company’s exposure for certain tax and legal matters.

In the ordinary course of business, the Company utilizes standby letters of credit issued by financial institutions to 
guarantee certain obligations, most of which relate to insurance contracts. At December 31, 2022, outstanding letters 
of credit totaled $50.2 million, primarily having expiration dates within 12 months.

NEW ACCOUNTING GUIDANCE ISSUED AND NOT YET ADOPTED

Information required for this Item is incorporated by reference to Note 1 - Significant Accounting Policies in the Notes 
to the Consolidated Financial Statements.

31

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The  Company’s  financial  statements  are  prepared  in  accordance  with  accounting  principles  generally  accepted 
in  the  United  States. The  preparation  of  these  financial  statements  requires  management  to  make  estimates  and 
assumptions  that  affect  the  reported  amounts  of  assets  and  liabilities  at  the  date  of  the  financial  statements  and 
the reported amounts of revenues and expenses during the periods presented. The following paragraphs include a 
discussion of some critical areas that require a higher degree of judgment, estimates and complexity.

Inventory:
Inventories are valued at the lower of cost or market, with approximately 58% valued by the first-in, first-out (“FIFO”) 
method  and  the  remaining  42%  valued  by  the  last-in,  first-out  (“LIFO”)  method.  The  majority  of  the  Company’s 
domestic inventories are valued by the LIFO method, while all of the Company’s international inventories are valued 
by the FIFO method. An actual valuation of the inventory under the LIFO method can be made only at the end of 
each year based on the inventory levels and costs at that time. Accordingly, interim LIFO calculations are based on 
management’s estimates of expected year-end inventory levels and costs. Because these are subject to many factors 
beyond management’s control, annual results may differ from interim results as they are subject to the final year-end 
LIFO  inventory  valuation.  The  Company  recognized  an  increase  in  its  LIFO  reserve  of  $36.0  million  during  2022 
compared to an increase in its LIFO reserve of $27.3 million during 2021.

Goodwill and Indefinite-lived Intangible Assets:
The  Company  tests  goodwill  and  indefinite-lived  intangible  assets  for  impairment  at  least  annually,  performing  its 
annual impairment test as of October 1st. Furthermore, goodwill and indefinite-lived intangible assets are reviewed for 
impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. 
Each interim period, the Company assesses whether or not an indicator of impairment is present that would necessitate 
a  goodwill  and  indefinite-lived  intangible  assets  impairment  analysis  be  performed  in  an  interim  period  other  than 
during the fourth quarter.

As of December 31, 2022, the Company had $1,098.3 million of goodwill on its Consolidated Balance Sheet, of which 
$390.6 million was attributable to the Mobile Industries segment and $707.7 million was attributable to the Process 
Industries segment. See Note 9 - Goodwill and Other Intangible Assets in the Notes to the Consolidated Financial 
Statements for movements in the carrying amount of goodwill by segment.

The Company reviews goodwill for impairment at the reporting unit level. The Mobile Industries segment has three 
reporting  units  and  the  Process  Industries  segment  has  two  reporting  units. The  reporting  units  within  the  Mobile 
Industries segment are Mobile Industries, Lubrication Systems and Aerospace Bearing Inspection. The reporting units 
within the Process Industries segment are Process Industries and Industrial Services.

Accounting guidance permits an entity to first assess qualitative factors to determine whether additional indefinite-
lived intangible asset impairment testing, including goodwill, is required. The Company chose to utilize this qualitative 
assessment in the annual goodwill impairment testing for all reporting units. Based on the qualitative assessment, 
the Company concluded that it was more likely than not that the fair value of these reporting units exceeded their 
respective carrying values. 

As of December 31, 2022, the Company had $161.5 million of indefinite-lived intangible assets on its Consolidated 
Balance  Sheet.  The  Company’s  indefinite-lived  intangible  assets  primarily  consist  of  acquired  trade  names.  The 
Company  chose  to  perform  a  quantitative  impairment  analysis  in  the  annual  impairment  testing  of  indefinite-lived 
intangible  assets.  The  Company  prepares  its  quantitative  indefinite-lived  intangible  analysis  by  comparing  the 
estimated  fair  value  of  each  indefinite-lived  intangible  asset,  using  a  relief  from  royalty  method,  with  its  carrying 
value. The relief from royalty method requires several assumptions including future sales growth, terminal revenue 
growth rate, royalty rate and discount rate. During the fourth quarter of 2022, the Company used discount rates for its 
indefinite-lived intangible assets in the range of 11.5% to 14.8%, royalty rates in the range of 1.0% to 6.0% and terminal 
growth rates in the range of 1.0% to 3.5%.

Based on the October 1, 2022 quantitative assessment of indefinite-lived intangible assets, there were four indefinite-
lived intangibles with carrying values totaling $78.1 million in which the fair value exceeded the carrying value of the 
assets by 10% or less. 

32

Management  believes  the  future  sales  growth  and  EBITDA  margins  in  the  long-range  plan  and  the  discount  rate 
used in the valuations requires significant use of judgment. If any of the Company’s reporting units or indefinite-lived 
intangible assets do not meet their long-range plan estimates or discount rates increase significantly, the Company 
could be required to perform an interim goodwill or indefinite-lived intangible asset impairment analysis and record 
impairment  charges  in  future  periods.  The  assumptions  used  for  the  indefinite-lived  intangibles  with  fair  values 
exceeding carrying values of 10% or less are more sensitive to future performance and will be monitored accordingly.

Income taxes:
Significant management judgment is required in determining the provision for income taxes, deferred tax assets and 
liabilities, valuation allowances against deferred tax assets, and accruals for uncertain tax positions.

The Company, which is subject to income taxes in the U.S. and numerous non-U.S. jurisdictions, accounts for income 
taxes in accordance with Accounting Standards Codification (“ASC”) Topic 740, “Income Taxes.” Deferred tax assets 
and liabilities are recorded for the future tax consequences attributable to differences between financial statement 
carrying amounts of existing assets and liabilities and their respective tax bases, as well as net operating losses and 
tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply 
to  taxable  income  in  the  years  in  which  temporary  differences  are  expected  to  be  recovered  or  settled.  Deferred 
tax  assets  relate  primarily  to  tax  loss  carryforwards  in  foreign  jurisdictions,  as  well  as  pension  and  postretirement 
benefit obligations in the U.S., which the Company believes are more likely than not to result in future tax benefits. 
In  determining  the  need  for  a  valuation  allowance,  the  historical  and  projected  financial  performance  of  the  entity 
recording the net deferred tax asset is considered along with any other pertinent information. The Company recorded 
$0.9 million in 2022 and $7.8 million in 2021 of tax benefits related to the reversal of valuation allowances. Refer to 
Note 5 - Income Taxes in the Notes to the Consolidated Financial Statements for further discussion on the valuation 
allowance reversals. 

In the ordinary course of the Company’s business, there are many transactions and calculations where the ultimate 
income tax determination is uncertain. The Company is regularly under audit by tax authorities. Accruals for uncertain 
tax  positions  are  provided  for  in  accordance  with  the  requirements  of  ASC  Topic  740.  The  Company  records 
interest and penalties related to uncertain tax positions as a component of income tax expense. In 2022, the Company 
recorded $8.9 million of net tax benefit for uncertain tax positions, which consisted primarily of $14.6 million related 
to the net reversal of accruals for prior year uncertain tax positions and settlements with tax authorities. This benefit 
was partially offset by $5.7 million of interest and increases to current and prior year uncertain tax positions. During 
2022, the Company recorded a $3.1 million decrease of uncertain tax positions related to foreign currency translation 
adjustments and deferred tax liabilities. The Company also recorded $1.9 million of uncertain tax positions related to 
prior years for acquisitions made during 2022.

Purchase accounting and business combinations:
Assets acquired and liabilities assumed as part of a business combination are recognized at their acquisition date 
fair  values.  In  determining  these  fair  values,  the  Company  utilized  various  forms  of  the  income,  cost  and  market 
approaches  depending  on  the  asset  or  liability  being  valued.  The  Company  used  a  discounted  cash  flow  model 
to measure the trade names, customer relationship,  and technology  and know-how-related  intangible  assets. The 
estimation of fair value required significant judgment related to future net cash flows based on assumptions related 
to revenue and EBITDA growth rates and discount rates. Inputs were generally determined by taking into account 
competitive trends, market comparisons, independent appraisals, and historical data, among other factors, and were 
supplemented by current and anticipated market conditions.

Refer to Note 1 - Significant Accounting Policies for further discussion regarding the fair value process.

Revenue recognition:
A  contract  exists  when  it  has  approval  and  commitment  from  both  parties,  the  rights  of  the  parties  are  identified, 
payment terms are identified, the contract has commercial substance and collectability of consideration is probable.

Revenue is generally recognized as performance obligations under the terms of a contract with a customer of the 
Company are satisfied. Refer to Note 1 - Significant Accounting Policies in the Notes to the Consolidated Financial 
Statements for further discussion around the Company’s revenue policy.

33

Benefit Plans:
The Company sponsors a number of defined benefit pension plans that cover eligible employees. The Company also 
sponsors  several  funded  and  unfunded  postretirement  plans  that  provide  health  care  and  life  insurance  benefits 
for  eligible  retirees  and  their  dependents.  These  plans  are  accounted  for  in  accordance  with  ASC  Topic  715-30, 
“Defined Benefit Plans – Pension,” and ASC Topic 715-60, “Defined Benefit Plans – Other Postretirement.”

The measurement of liabilities related to these plans is based on management’s assumptions related to future events, 
including discount rates and health care cost trend rates. Management regularly evaluates these assumptions and 
adjusts them as required and appropriate. Other plan assumptions also are reviewed on a regular basis to reflect 
recent  experience  and  the  Company’s  future  expectations. Actual  experience  that  differs  from  these  assumptions 
may affect future liquidity, expense and the overall financial position of the Company. While the Company believes 
that current assumptions are appropriate, significant differences in actual experience or significant changes in these 
assumptions may affect materially the Company’s pension and other postretirement employee benefit obligations and 
its future expense and cash flow.

The discount rate is used to calculate the present value of expected future pension and postretirement cash flows 
as  of  the  measurement  date.  The  Company  establishes  the  discount  rate  by  constructing  a  notional  portfolio  of 
high-quality corporate bonds and matching the coupon payments and bond maturities to projected benefit payments 
under the Company’s pension and postretirement welfare plans. The bonds included in the portfolio generally are 
non-callable. A lower discount rate will result in a higher benefit obligation; conversely, a higher discount rate will result 
in a lower benefit obligation. The discount rate also is used to calculate the annual interest cost, which is a component 
of net periodic benefit cost.

The expected rate of return on plan assets is determined by analyzing the historical long-term performance of the 
Company’s pension plan assets, as well as the mix of plan assets between equities, fixed-income securities and other 
investments, the expected long-term rate of return expected for those asset classes and long-term inflation rates. 
Short-term asset performance can differ significantly from the expected rate of return, especially in volatile markets. 
A lower-than-expected rate of return on pension plan assets will increase pension expense and future contributions. 

The Company recognizes actuarial gains and losses immediately through net periodic benefit cost upon the annual 
remeasurement in the fourth quarter, or on an interim basis if specific events trigger a remeasurement. 

34

Defined Benefit Pension Plans:
The  Company  recognized  net  periodic  benefit  cost  of $21.0  million  during  2022  for  defined  benefit  pension  plans, 
compared to net periodic benefit cost of $5.9 million during 2021. The Company recognized mark-to-market charges 
of $16.0 million during 2022 compared to $4.4 million during 2021. Mark-to-market charges during 2022 were primarily 
a result of the impact of lower than expected returns on plan assets of $220.6 million, the impact of experience losses 
of $33.0 million, the impact of inflation of $5.4 million and other actuarial losses of $0.2 million, partially offset by the 
net increase in the discount rate used to measure its defined benefit pension obligations of $243.2 million. The impact 
of  the  net  increase  in  the  discount  rate  used  to  measure  the  Company’s  defined  benefit  pension  obligations  was 
primarily driven by a 257 basis point increase in the weighted-average discount rate used to measure its U.S. plan 
obligations, which increased from 3.07% in 2021 to 5.64% in 2022.and a 301 basis point increase in the discount rate 
used to measure its U.K. plan obligations, which increased from 1.80% in 2021 to 4.81% in 2022.

In 2023, the Company expects net periodic benefit cost to be approximately $12 million for defined benefit pension 
plans, compared with net periodic benefit cost of $21.0 million in 2022. Net periodic benefit cost for 2023 does not 
include mark-to-market charges that will be recognized immediately through earnings in the fourth quarter of 2023, or 
on an interim basis if specific events trigger a remeasurement. Excluding the mark-to-market charges of $16.0 million 
recognized in 2022, net periodic benefit cost was $5.0 million in 2022. The expected increase in net periodic benefit 
cost, excluding mark-to-market charges, primarily reflects a lower expected return on plan assets.

The  Company  expects  to  contribute  to  its  defined  benefit  pension  plans  or  pay  directly  to  participants  of  defined 
benefit plans approximately $25 million in 2023 compared with $11.2 million of contributions and payments in 2022. 

For expense purposes in 2022, the Company applied a weighted-average discount rate of 3.07% to its U.S. defined 
benefit pension plans. For expense purposes in 2023, the Company will apply a weighted-average discount rate of 
5.64% to its U.S. defined benefit pension plans. 

For expense purposes in 2022, the Company applied an expected weighted-average rate of return of 4.84% for the 
Company’s U.S. pension plan assets. For expense purposes in 2023, the Company will apply an expected weighted-
average rate of return on plan assets of 4.43%.

The following table presents the sensitivity of the Company’s global projected pension benefit obligation (“PBO”) to 
the indicated increase/decrease in key assumptions:

Assumption:
Discount rate

 + / - Change at 
December 31, 2022
PBO

Change

.25%

$

14.9

In the table above, a 25 basis point decrease in the discount rate will increase the PBO by $14.9 million and decrease 
income before income taxes through the recognition of actuarial losses of $14.9 million. A 25 basis point increase 
in the discount rate will decrease the PBO by $14.9 million and increase income before income taxes through the 
recognition of actuarial gains of $14.9 million. 

35

Other Postretirement Benefit Plans:
The Company recognized net periodic benefit credit of $21.6 million during 2022 for other postretirement benefit plans, 
compared to net periodic benefit credit of $12.5 million during 2021. The Company recognized mark-to-market gains of 
$13.1 million during 2022 compared to mark-to-market gains of $4.1 million during 2021. Mark-to-market gains in 2022 
were primarily due to the impact of a 276 basis point increase in the discount rate used to measure the Company’s 
defined benefit postretirement obligations, which increased from 2.99% in 2021 to 5.75% in 2022. The increase in the 
discount rate resulted in a $8.4 million gain. In addition to the gain from the discount rate increases, the Company 
recognized actuarial gains of $3.0 million due to the impact of a reduction in the rate for Medicare Advantage plans 
and $1.9 million due to lower than expected benefit payments. These actuarial gains were offset by $0.2 million of 
changes to other assumptions.

In 2023, the Company expects net periodic benefit credit of approximately $6 million for other postretirement benefit 
plans, compared to net periodic benefit credit of $21.6 million in 2022. Net periodic benefit credit for 2023 does not 
include mark-to-market charges that will be recognized immediately through earnings in the fourth quarter of 2023, 
or on an interim basis if specific events trigger a remeasurement. Excluding the mark-to-market gains of $13.1 million 
recognized in 2022, the net periodic benefit credit was $8.5 million in 2022.

For  expense  purposes  in  2022,  the  Company  applied  a  discount  rate  of  2.99%  to  its  other  postretirement  benefit 
plans. For expense purposes in 2023, the Company will apply a discount rate of 5.75% to its other postretirement 
benefit plans. 

The  following  table  presents  the  sensitivity  of  the  Company’s  accumulated  other  postretirement  benefit  obligation 
(“APBO”) to the indicated increase/decrease in key assumptions:

Assumption:

Discount rate

+ / - Change at 
December 31, 2022
APBO

Change

.25%

$

0.6

In the table above, a 25 basis point decrease in the discount rate will increase the APBO by $0.6 million and decrease 
income  before  income  taxes  through  the  recognition  of  actuarial  losses  of  $0.6  million. A  25  basis  point  increase 
in the discount rate will decrease the APBO by $0.6 million and increase income before income taxes through the 
recognition of actuarial gains of $0.6 million.

For measurement purposes, the Company assumed a weighted-average annual rate of increase in the per capita 
cost  (health  care  cost  trend  rate)  for  medical  benefits  of  6.5%  for  2023,  declining  gradually  to  5.0%  in  2029  and 
thereafter for medical and prescription drug benefits. For Medicare Advantage benefits, actual contract rates have 
been set for 2023, and are assumed to increase by $5 for 2026 to 2028 and then 6.0% for 2028, declining gradually 
to 5.0% in 2032 and thereafter. The assumed health care cost trend rate may have a significant effect on the amounts 
reported. A  one  percentage  point  increase  in  the  assumed  health  care  cost  trend  rate  would  have  increased  the 
2022 total service and interest cost components by $0.1 million and would have increased the postretirement benefit 
obligation by $0.7 million. A one percentage point decrease would provide corresponding reductions of $0.1 million 
and $0.6 million, respectively.

Other loss reserves:
The Company has a number of loss exposures that are incurred in the ordinary course of business such as environmental 
clean-up, product liability, product warranty, litigation, compliance and accounts receivable reserves. Establishing loss 
reserves for these matters requires management’s judgment with regards to estimating risk exposure and ultimate 
liability or realization. These loss reserves are reviewed periodically and adjustments are made to reflect the most 
recent facts and circumstances.

36

NON-GAAP MEASURES

Supplemental Non-GAAP Measures:
In  addition  to  results  reported  in  accordance  with  U.S.  GAAP,  the  Company  provides  information  on  non-GAAP 
financial measures. These non-GAAP financial measures include adjusted net income, adjusted earnings per share, 
adjusted EBITDA and adjusted EBITDA margins, segment adjusted EBITDA and segment adjusted EBITDA margins, 
ratio of net debt to adjusted EBITDA (for the trailing 12 months), net debt, ratio of net debt to capital, free cash flow and 
return on invested capital. This information is intended to supplement GAAP financial measures and is not intended to 
replace GAAP financial measures. Net debt and the ratio of net debt to capital is disclosed in the “Liquidity and Capital 
Resources” section of Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Adjusted Net Income and Adjusted EBITDA:
Adjusted  net  income  and  adjusted  earnings  per  share  represent  net  income  attributable  to The Timken  Company 
and  diluted  earnings  per  share,  respectively,  adjusted  for  impairment,  restructuring  and  reorganization  charges, 
acquisition  costs,  including  transaction  costs  and  the  amortization  of  the  inventory  step-up,  property  losses  and 
recoveries, actuarial gains and losses associated with the remeasurement of the Company’s defined benefit pension 
and other postretirement benefit plans, gains and losses on the sale of real estate, gains and losses on divestitures, 
the income tax impact of these adjustments, as well as other income tax discrete items, and other items from time 
to time that are not part of the Company’s core operations. Management believes adjusted net income and adjusted 
earnings per share are useful to investors as they are representative of the Company’s core operations and are used 
in the management of the business.

Adjusted EBITDA represents earnings before interest, taxes, depreciation and amortization, adjusted for items that are 
not part of the Company’s core operations. These items include impairment, restructuring and reorganization charges, 
acquisition  costs,  including  transaction  costs  and  the  amortization  of  the  inventory  step-up,  property  losses  and 
recoveries, actuarial gains and losses associated with the remeasurement of the Company’s defined benefit pension 
and other postretirement benefit plans, gains and losses on the sale of real estate, gains and losses on divestitures, 
and other items from time to time that are not part of the Company’s core operations. Management believes adjusted 
EBITDA is useful to investors as it is representative of the Company’s core operations and is used in the management 
of the business, including decisions concerning the allocation of resources and assessment of performance.

37

Reconciliation of net income attributable to The Timken Company to adjusted net income, adjusted EBITDA 
and adjusted EBITDA Margin:

Net Sales
Net Income Attributable to The Timken Company

Impairment, restructuring and 
reorganization charges (1)

Corporate pension and other postretirement 

benefit related expense (income) (2)

Acquisition-related charges (3)
Acquisition-related gain (4)
Russia-related charges (5)
(Gain) loss on divestitures and sale of

real estate (6)

Property losses (recoveries) and 

related expenses (7)

Brazil legal matter
Tax indemnification and related items
Noncontrolling interest of above adjustments
Provision for income taxes (8)

Adjusted Net Income

Net income attributable to
noncontrolling interest

Provision for income taxes (as reported)
Interest expense
Interest income
Depreciation and amortization expense (9)
Less: Noncontrolling interest
Less: Provision for income taxes (8)

Adjusted EBITDA

$

$

2022
$ 4,496.7
407.4

Twelve Months Ended December 31,
2021
$ 4,132.9
369.1

2019
$ 3,789.9
362.1

2020
$ 3,513.2
284.5

39.5

2.9
14.8
—
15.6

(2.9)

—
—

0.3
(5.3)
(24.5)
447.8

9.6
133.9
74.6
(3.8)
164.0
(5.3)
(24.5)
855.9

15.1

0.3
3.2
(0.9)

—

—

—
—

0.2

—
(23.6)
363.4

12.4
95.1
58.8
(2.3)
167.0
—
(23.6)
718.0

$

$

29.0

18.5
3.7
(11.1)
—

9.8

(4.1)
15.5
—
—

(0.4)

(4.5)

(5.5)

—

0.5
(0.1)
(6.0)
313.1

7.9
103.9
67.6
(3.7)
164.0
(0.1)
(6.0)
658.9

$

$

7.6
1.8
0.7
(0.5)
(34.6)
353.8

12.6
97.7
72.1
(4.9)
159.9
(0.5)
(34.6)
726.3

$

$

$

2018
3,580.8
302.8

7.1

12.8
20.6

—
—

—
—

0.8

1.5
(1.3)
(16.8)
327.5

2.7
102.6
51.7
(2.1)
146.0
(1.3)
(16.8)
646.5

$

$

Adjusted EBITDA Margin (% of net sales)

19.0 %

17.4 %

18.8 %

19.2 %

18.1 %

Diluted earnings and adjusted earnings per share in the table below are based on net income attributable to The 
Timken Company and adjusted net income, respectively, in the table above.

2022

Twelve Months Ended December 31,
2020

2019

2021

2018

Diluted earnings per share (EPS)
Adjusted EPS
Diluted Shares

4.71 $ 
4.60 $ 

3.86
4.18
78,337,481

$
$

5.48 $ 
6.02 $ 

4.79   $ 
4.72 $ 

3.72 $ 
4.10 $ 

74,323,839

77,006,589

76,401,366

76,896,565

38

Reconciliation of segment EBITDA to segment adjusted EBITDA and segment adjusted EBITDA margin:

Twelve Months Ended December 31, 2022

Unallocated 
Corporate
$ 

— $ 

Net Sales
EBITDA

Mobile
$  2,106.5
217.1

Process
$  2,390.2
621.5

Impairment, restructuring and reorganization

charges (1)

Corporate pension and other postretirement

benefit related expense (2)
Acquisition-related charges (3)
Russia-related charges (5)
Gain on divestitures and sale of real estate (6)
Tax indemnification and related items

Adjusted EBITDA
Adjusted EBITDA Margin (% of net sales)

$ 

35.4

—
3.1
16.8
(2.7)
0.3
270.0

4.1

—
8.0
(1.2)
(0.2)
—
632.2

$ 

12.8 %

26.4 %

$ 

Total
4,496.7
785.7

39.5

2.9
14.8
15.6
(2.9)
0.3
855.9

19.0 %

(52.9)

—

2.9
3.7
—
—
—
(46.3)
NM

$ 

Net Sales
EBITDA

Twelve Months Ended December 31, 2021

Mobile
$  1,965.7
240.1

Process
$  2,167.2
506.3

Unallocated 
Corporate

Total

$ 

— $  4,132.9
700.9

(45.5)

Impairment, restructuring and reorganization 

charges (1)

Corporate pension and other postretirement 

benefit related expense (2)
Acquisition-related charges (3)
Acquisition-related gain (4)
Tax indemnification and related items

Adjusted EBITDA
Adjusted EBITDA Margin (% of net sales)

$ 

7.3

—
0.7
—
0.2
248.3

$ 

7.0

—
0.6
—
—
513.9

$ 

12.6 %

23.7  %

—

14.3

0.3
1.9
(0.9)
—
(44.2)
NM 

$ 

0.3
3.2
(0.9)
0.2
718.0

17.4 %

(1)  Impairment, restructuring and reorganization charges (including items recorded in cost of products sold) relate to: (i) plant closures; (ii) the 
rationalization of certain plants; (iii) severance related to cost reduction initiatives; (iv) impairment of assets held for sale; and (v) related depreciation 
and amortization. Impairment, restructuring and reorganization charges for 2022 included $29.3 million related to the sale of ADS. The Company 
re-assesses its operating footprint and cost structure periodically, and makes adjustments as needed that result in restructuring charges. However, 
management believes these actions are not representative of the Company’s core operations.
(2)  Corporate  pension  and  other  postretirement  benefit  related  (expense)  income  represents  actuarial  losses  and  (gains)  that  resulted  from 
the  remeasurement  of  plan  assets  and  obligations  as  a  result  of  changes  in  assumptions  or  experience.  The  Company  recognizes  actuarial 
losses  and  (gains)  in  connection  with  the  annual  remeasurement  in  the  fourth  quarter,  or  if  specific  events  trigger  a  remeasurement.  Refer  to 
Note 16 - Retirement Benefit Plans and Note 17 - Other Postretirement Benefit Plans for additional discussion.
(3)  Acquisition-related charges represent deal-related expenses associated with completed transactions and certain unsuccessful transactions, as 
well as any resulting inventory step-up impact. 
(4)  The acquisition-related gain represents a bargain purchase gain on the acquisition of the assets of Aurora Bearing Company (“Aurora”) that 
closed on November 30, 2020.
(5)  Russia-related charges include impairments or allowances recorded against certain property, plant and equipment, inventory and trade receivables 
to reflect the current impact of Russia’s invasion of Ukraine (and associated sanctions) on the Company’s operations. In addition to impairments and 
allowances recorded, the Company recorded a loss on the divestiture of its Timken Russia business during the third quarter of 2022. Refer to Russia 
Operations in Management Discussion and Analysis within the Company’s annual report on Form 10-K for additional information.
(6)  Represents the net gain resulting from divestitures and the sale of real estate.
(7)  Represents  property  loss  and  related  expenses  during  the  periods  presented  (net  of  insurance  recoveries  received  in  2020)  resulting  from 
property loss that occurred during the first quarter of 2019 at one of the Company’s warehouses in Knoxville, Tennessee and during the third quarter 
of 2019 at one of the Company’s warehouses in Yantai, China.
(8)  Provision for income taxes includes the net tax impact on pre-tax adjustments (listed above), the impact of discrete tax items recorded during 
the respective periods as well as other adjustments to reflect the use of one overall effective tax rate on adjusted pre-tax income.
(9)  Depreciation and amortization shown excludes depreciation recognized in reorganization charges, if any. 

39

 
 
 
 
 
 
Free Cash Flow:

Free cash flow represents net cash provided by operating activities less capital expenditures. Management believes 
free cash flow is useful to investors because it is a meaningful indicator of cash generated from operating activities 
available for the execution of its business strategy.

Reconciliation of net cash provided by operating activities to free cash flow:

Net cash provided by operating activities
Capital expenditures
Free cash flow

2022

463.8
(178.4)
285.4

$

$

Ratio of Net Debt to Adjusted EBITDA:

Twelve Months Ended December 31,
2021

2019

2020

$

$

387.3
(148.3)
239.0

$

$

577.6
(121.6)
456.0

$

$

550.1
(140.6)
409.5

2018

332.5
(112.6)
219.9

$

$

The ratio of net debt to adjusted EBITDA for the trailing twelve months represents total debt less cash and cash equivalents 
divided by adjusted EBITDA for the trailing twelve months. 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 
December 31, 2022 and December 31, 2021 was $417.0 million and $381.5 million, respectively. Net debt to adjusted 
EBITDA for the trailing twelve months was 1.9 at December 31, 2022, compared with 1.7 at December 31, 2021. 

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

Net income
Provision for income taxes
Interest expense
Interest income
Depreciation and amortization

Consolidated EBITDA
Adjustments:

Impairment, restructuring and reorganization charges (1)
Corporate pension and other postretirement benefit related expense (2)
Acquisition-related charges (3)
Acquisition-related gain (4)
Russia-related charges (5)
Gain on divestitures and the sale of real estate, net (6)
Tax indemnification and related items

Total Adjustments

Adjusted EBITDA
Net Debt
Ratio of Net Debt to Adjusted EBITDA

Twelve Months Ended December 31,

2022

2021

$ 

$ 

$ 
$ 

417.0
133.9
74.6
(3.8)
164.0
785.7

39.5
2.9
14.8
—
15.6
(2.9)
0.3
70.2
855.9
1,631.6
1.9

$ 

$ 

$ 
$ 

381.5
95.1
58.8
(2.3)
167.8
700.9

14.3
0.3
3.2
(0.9)
—
—
0.2
17.1
718.0
1,207.8
1.7

(1)  Impairment,  restructuring  and  reorganization  charges  (including  items  recorded  in  cost  of  products  sold)  relate  to:  (i)  plant  closures;  (ii) 
the rationalization of certain plants; (iii) severance related to cost reduction initiatives; and (iv) impairment of assets held for sale. Impairment, 
restructuring  and  reorganization  charges  for  2022  included  $29.3  million  related  to  the  sale  of ADS.  The  Company  re-assesses  its  operating 
footprint and cost structure periodically, and makes adjustments as needed that result in restructuring charges. However, management believes 
these actions are not representative of the Company’s core operations.
(2)  Corporate  pension  and  other  postretirement  benefit  related  (expense)  income  represents  actuarial  losses  and  (gains)  that  resulted  from 
the  remeasurement  of  plan  assets  and  obligations  as  a  result  of  changes  in  assumptions  or  experience.  The  Company  recognizes  actuarial 
losses  and  (gains)  in  connection  with  the  annual  remeasurement  in  the  fourth  quarter,  or  if  specific  events  trigger  a  remeasurement.  Refer  to 
Note 16 - Retirement Benefit Plans and Note 17 - Other Postretirement Benefit Plans for additional discussion.
(3)  Acquisition-related charges represent deal-related expenses associated with completed transactions and certain unsuccessful transactions, as 
well as any resulting inventory step-up impact.
(4)  The acquisition-related gain represents a bargain purchase gain on the acquisition of the assets of Aurora that closed on November 30, 2020.
(5)  Russia-related charges include impairments or allowances recorded against certain property, plant and equipment, inventory and trade receivables 
to reflect the current impact of Russia’s invasion of Ukraine (and associated sanctions) on the Company’s operations. In addition to impairments and 
allowances recorded, the Company recorded a loss on the divestiture of its Timken Russia business during the third quarter of 2022. Refer to Russia 
Operations in Management Discussion and Analysis within the Company’s annual report on Form 10-K for additional information.
(6)  Represents the net gain resulting from divestitures and the sale of real estate.

40

Return on Invested Capital:

Return on Invested Capital is defined as adjusted net operating profit after taxes divided by average invested capital. 
The Company uses Average Invested Capital as a type of non-GAAP ratio that indicates return on invested capital, 
which management believes is useful to investors as a measure of return on their investment.

Reconciliation of adjusted net operating profit after taxes, adjusted invested capital and return on adjusted invested capital:

Adjusted Net Operating profit after Taxes (ANOPAT):

Twelve Months Ended December 31,

2022

2021

2020

2019

2018

Adjusted EBITDA (1)
Less: depreciation and amortization expense (2)
Adjusted EBIT
Adjusted tax rate
Calculated income taxes
ANOPAT

$ 

$ 

$ 

855.9
164.0
691.9

25.5  %

176.4
515.5

$ 

$ 

718.0
167.0
551.0

$ 

658.9
164.0
494.9

726.3
159.9
566.4

$ 

646.5
146.0
500.5

24.0  %

25.5 %

26.5  %

26.5 %

132.2
418.8

$ 

126.2
368.7

$ 

150.1
416.3

132.6
367.9

$ 

Adjusted Invested Capital:

Total debt
Total equity
Invested capital  

Twelve Months Ended December 31,

2022

2021

2020

2019

2018

2017

$ 

1,963.2 $ 
2,352.9

1,464.9 $ 
2,377.7

1,564.6 $ 
2,225.2

1,730.1 $ 
1,954.8

1,681.6 $ 
1,642.7

962.3
1,474.9

(total debt + total equity)

Invested capital (two-point average) $ 

4,316.1
4,079.4 $ 

3,842.6
3,816.2 $ 

3,789.8
3,737.4 $ 

3,684.9
3,504.6 $ 

3,324.3
2,880.8

2,437.2

Return on Invested Capital:

Twelve Months Ended December 31,

2022

2021

2020

2019

2018

ANOPAT
Invested capital (two-point average)
Return on invested capital

$ 

515.5
4,079.4

$ 

418.8
3,816.2

$ 

368.7
3,737.4

$ 

416.3
3,504.6

$ 

367.9
2,880.8

12.6 %

11.0  %

9.9  %

11.9  %

12.8  %

(1)  Refer to page 40 for reconciliations to the most directly comparable GAAP financial measures.
(2)  Depreciation and amortization shown excludes depreciation recognized in reorganization charges, if any. 

41

OTHER DISCLOSURES:

Foreign Currency:

Assets  and  liabilities  of  subsidiaries  are  translated  at  the  rate  of  exchange  in  effect  on  the  balance  sheet  date; 
income and expenses are translated at the average rates of exchange prevailing during the reporting period. Related 
translation adjustments are reflected as a separate component of accumulated other comprehensive loss. Foreign 
currency gains and losses resulting from transactions are included in the Consolidated Statements of Income.

Net of related derivative activity, the Company recognized a foreign currency exchange gain resulting from transactions 
of $15.4 million for the year ended December 31, 2022, and recognized losses of $9.4 million and $10.0 million for 
the years ended December 31, 2021 and 2020, respectively. For the year ended December 31, 2022, the Company 
recorded a negative non-cash foreign currency translation adjustment of $155.4 million that decreased shareholders’ 
equity, compared with a negative non-cash foreign currency translation adjustment of $62.3 million that decreased 
shareholders’  equity  for  the  year  ended  December  31,  2021.  The  foreign  currency  translation  adjustments  for  the 
year ended December 31, 2022 were negatively impacted by the strengthening of the U.S. dollar relative to other 
currencies as of December 31, 2022 compared to December 31, 2021.

Russia Operations:

At the beginning of 2022, the Company had two subsidiaries in Russia, Timken Russia, which was 100% owned by 
Timken, and a 51%-owned joint venture company to serve the Russian rail market (“Rail JV”). As a result of Russia’s 
invasion  of  Ukraine  (and  associated  sanctions),  the  Company  suspended  operations  and  recorded  property,  plant 
and  equipment  impairment  charges  of  $9.0  million  and  inventory  write-downs  of  $4.1  million  during  the  year  ended 
December 31, 2022. During the third quarter of 2022, the Company sold its Timken Russia business resulting in a loss of 
$2.7 million on the sale. After giving effect to these impairments and write-downs, as well as the sale of Timken Russia, 
as of December 31, 2022, the Company has net assets (net of noncontrolling interest of $5.9 million), totaling $7.7 million 
on its Consolidated Balance Sheet related to its Rail JV. Net assets related to the Company’s Russia operations include 
$8.5 million of cash and cash equivalents that the Company has classified as restricted as the Company is presently 
unable to repatriate these funds to one of its subsidiaries outside of Russia. The Company will continue to monitor the 
events in Russia and Ukraine and may record additional asset impairments or write-offs in the future. 

Trade Law Enforcement:

The  U.S.  government  has  an  antidumping  duty  order  in  effect  covering  tapered  roller  bearings  from  China.  The 
Company is a producer of these bearings, as well as ball bearings and other bearing types, in the U.S.

Quarterly Dividend:

On February 10, 2023, the Company’s Board of Directors declared a quarterly cash dividend of $0.31 per common 
share. The quarterly dividend will be paid on March 6, 2023 to shareholders of record as of February 21, 2023. This 
will be the 403rd consecutive quarterly dividend paid on the common shares of the Company.

42

Forward-Looking Statements

Certain  statements  set  forth  in  this  Annual  Report  on  Form  10-K  and  in  the  Company’s  2022  Annual  Report  to 
Shareholders  that  are  not  historical  in  nature  (including  the  Company’s  forecasts,  beliefs  and  expectations)  are 
“forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. In particular, 
Management’s Discussion and Analysis contains numerous forward-looking statements. Forward-looking statements 
generally  will  be  accompanied  by  words  such  as  “anticipate,”  “believe,”  “could,”  “estimate,”  “expect,”  “forecast,” 
“outlook,” “intend,” “may,” “possible,” “potential,” “predict,” “project” or other similar words, phrases or expressions. You 
are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this Annual 
Report on Form 10-K. The Company cautions readers that actual results may differ materially from those expressed or 
implied in forward-looking statements made by or on behalf of the Company due to a variety of factors, such as:

(a)  deterioration in world economic conditions, or in economic conditions in any of the geographic regions 
in which the Company or its customers or suppliers conduct business, including adverse effects from a 
global economic slowdown or recession, terrorism, or hostilities. This includes: political risks associated 
with the potential instability of governments and legal systems in countries in which the Company or its 
customers or suppliers conduct business, changes in currency valuations and recent world events that 
have increased the risks posed by international trade disputes, tariffs and sanctions;

(b)  negative impacts to the Company’s business, results of operations, financial position or liquidity, disruption 
to the Company’s supply chains, negative impacts to customer demand or operations, and availability and 
health of employees, as a result of COVID-19 or other pandemics and associated governmental measures 
such as restrictions on travel and manufacturing operations;

(c) 

the effects of fluctuations in customer demand on sales, product mix and prices in the industries in which 
the Company operates. This includes: the ability of the Company to respond to rapid changes in customer 
demand,  disruptions  to  the  Company’s  supply  chain,  logistical  issues  associated  with  port  closures  or 
congestion, delays or increased costs, the effects of customer or supplier bankruptcies or liquidations, the 
impact of changes in industrial business cycles, 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;

(d)  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 that may impact the way the Company’s 
products are produced, sold or distributed;

(e)  changes  in  operating  costs.  This  includes:  the  effect  of  changes  in  the  Company’s  manufacturing 
processes;  changes  in  costs  associated  with  varying  levels  of  operations  and  manufacturing  capacity; 
availability and cost of raw materials and energy; disruptions to the Company’s supply chain and logistical 
issues associated with port closures or congestion, delays or increased costs; changes in the expected 
costs  associated  with  product  warranty  claims;  changes  resulting  from  inventory  management  and 
cost reduction initiatives; the effects of unplanned plant shutdowns; the effects of government-imposed 
restrictions, commercial requirements and Company goals associated with climate change and emissions 
or other waste reduction initiatives; and changes in the cost of labor and benefits;

(f) 

(g) 

(h) 

the impact of inflation on employee expenses, shipping costs, raw material costs, energy and fuel costs 
and other production costs;

the success of the Company’s operating plans, announced programs, initiatives and capital investments; 
the ability to integrate acquired companies and to address material issues both identified and not uncovered 
during the Company’s due diligence review; and the ability of acquired companies to achieve satisfactory 
operating results, including results being accretive to earnings, realization of synergies and expected cash 
flow generation; 

the  Company’s  ability  to  maintain  appropriate  relations  with  unions  or  works  councils  that  represent 
Company associates in certain locations in order to avoid disruptions of business; the continued attraction, 
retention and development of management and other key employees, the successful development and 
execution of succession plans and management of other human capital matters;

(i)  unanticipated  litigation,  claims,  investigations  or  assessments.  This  includes:  claims,  investigations 
or  problems  related  to  intellectual  property,  product  liability  or  warranty,  foreign  export  and  trade  laws, 
government procurement regulations, competition and anti-bribery laws, climate change, environmental 
or health and safety issues, data privacy and taxes;

43

(j)  changes in worldwide financial and capital markets, including availability of financing and interest rates 
on satisfactory terms in a rising interest rate environment, which affect the Company’s cost of funds and/
or ability to raise capital, as well as customer demand and the ability of customers to obtain financing to 
purchase the Company’s products or equipment that contain the Company’s products;

(k) 

(l) 

the  Company’s  ability  to  satisfy  its  obligations  and  comply  with  covenants  under  its  debt  agreements, 
maintain favorable credit ratings and its ability to renew or refinance borrowings on favorable terms; 

the impact on the Company’s pension obligations and assets due to changes in interest rates, investment 
performance and other tactics designed to reduce risk; and

(m)  those items identified under Item 1A. Risk Factors on pages 8 through 17.

Additional risks relating to the Company’s business, the industries in which the Company operates or the Company’s 
common shares may be described from time to time in the Company’s filings with the SEC. All of these risk factors 
are  difficult  to  predict,  are  subject  to  material  uncertainties  that  may  affect  actual  results  and  may  be  beyond  the 
Company’s control.

Readers are cautioned that it is not possible to predict or identify all of the risks, uncertainties and other factors that 
may affect future results and that the above list should not be considered to be a complete list. Except as required by 
the federal securities laws, the Company undertakes no obligation to publicly update or revise any forward-looking 
statement, whether as a result of new information, future events or otherwise.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk:

Changes in short-term interest rates related to several separate funding sources impact the Company’s earnings. 
These sources are borrowings under the Accounts Receivable Facility, borrowings under the Senior Credit Facility and 
short-term bank borrowings by the Company’s international subsidiaries. If the market rates for short-term borrowings 
increased by one-percentage-point around the globe, the impact from our variable rate debt would be an increase in 
interest expense of $5.4 million annually, with a corresponding decrease in income from continuing operations before 
income taxes of the same amount. This amount was determined by considering the impact of hypothetical interest 
rates on the Company’s borrowing cost and year-end debt balances by category.

Foreign Currency Exchange Rate Risk:

Fluctuations  in  the  value  of  the  U.S.  dollar  compared  to  foreign  currencies,  including  the  Euro,  can  impact  the 
Company’s  earnings. The  greatest  risk  relates  to  products  shipped  between  the  Company’s  European  operations 
and the United States, as well as intercompany loans between Timken affiliates. Foreign currency forward contracts 
are used to hedge a portion of these intercompany transactions. Additionally, hedges are used to cover third-party 
purchases of products and equipment. As of December 31, 2022, there were $635.6 million of hedges in place. A 
uniform  10%  weakening  of  the  U.S.  dollar  against  all  currencies  would  have  resulted  in  a  charge  of  $13.8  million 
related to these hedges, which would have partially offset the otherwise favorable impact of the underlying currency 
fluctuation. In addition to the direct impact of the hedged amounts, changes in exchange rates also affect the volume 
of sales or foreign currency sales price as competitors’ products become more or less attractive.

Commodity Price Risk:

In the ordinary course of business, the Company is exposed to market risk with respect to commodity price fluctuations, 
primarily related to our purchases of raw materials and energy, principally steel and natural gas. Whenever possible, 
the  Company  manages  its  exposure  to  commodity  risks  primarily  through  the  use  of  supplier  pricing  agreements 
that enable the Company to establish the purchase prices for certain inputs that are used in our manufacturing and 
distribution business.

44

Item 8. Financial Statements and Supplementary Data
The Timken Company and Subsidiaries

Financial Statements 

Consolidated Statements of Income 

Consolidated Statements of Comprehensive Income 

Consolidated Balance Sheets 

Consolidated Statements of Cash Flows 

Consolidated Statements of Shareholders’ Equity 

Notes to Consolidated Financial Statements 

Report of Independent Registered Public Accounting Firm (PCAOB ID: 42) 

Page   

46

46

47

48

49

50

94

45

Consolidated Statements of Income

(Dollars in millions, except per share data)

Net sales

Cost of products sold

Gross Profit

Selling, general and administrative expenses

Impairment and restructuring charges

Operating Income

Interest expense

Interest income

Non-service pension and other postretirement income (expense)

Other income (expense), net

Acquisition-related gain

Income Before Income Taxes

Provision for income taxes

Net Income

Less: Net income attributable to noncontrolling interest

Net Income Attributable to The Timken Company

Net Income per Common Share Attributable to The Timken Company 
 Common Shareholders

Basic earnings per share

Diluted earnings per share

See accompanying Notes to the Consolidated Financial Statements.

$

$

$

Consolidated Statements of Comprehensive Income

(Dollars in millions)

Net Income

Other comprehensive (loss) income, net of tax:

Foreign currency translation adjustments

Pension and postretirement liability adjustments

Change in fair value of derivative financial instruments

Other comprehensive (loss) income, net of tax

Comprehensive Income, net of tax

Less: comprehensive income attributable to noncontrolling interest

Year Ended December 31,

2022

2021

2020

$

4,496.7

$

4,132.9

$

3,208.6

1,288.1

637.1

44.1

606.9

(74.6)

3.8

9.3

5.5

—

550.9

133.9

417.0

9.6

3,030.4

1,102.5

580.5

8.9

513.1

(58.8)

2.3

18.3

0.8

0.9

476.6

95.1

381.5

12.4

407.4

$

369.1

$

3,513.2

2,503.3

1,009.9

533.8

21.2

454.9

(67.6)

3.7

(4.7)

(1.1)

11.1

396.3

103.9

292.4

7.9

284.5

5.54

5.48

$

$

4.86

4.79

$

$

3.78

3.72

Year Ended December 31,

2022

2021

2020

$

417.0

$

381.5

$

292.4

(162.7)

(5.8)

2.3

(166.2)

250.8

2.3

(63.7)

(6.8)

4.8

(65.7)

315.8

11.0

92.7

(3.5)

(2.4)

86.8

379.2

3.3

375.9

Comprehensive Income Attributable to The Timken Company

$

248.5

$

304.8

$

See accompanying Notes to the Consolidated Financial Statements.

46

Consolidated Balance Sheets

(Dollars in millions)

ASSETS

Current Assets

Cash and cash equivalents

Restricted cash

Accounts receivable, less allowances: (2022 - $17.9 million; 2021 - $16.9 million)

Unbilled receivables

Inventories, net

Deferred charges and prepaid expenses

Other current assets

Total Current Assets

Property, Plant and Equipment, Net

Other Assets

Goodwill

Other intangible assets, net

Operating lease assets

Deferred income taxes

Other non-current assets

Total Other Assets

Total Assets

LIABILITIES AND EQUITY

Current Liabilities

Accounts payable, trade

Short-term debt, including current portion of long-term debt

Salaries, wages and benefits

Income taxes payable

Other current liabilities

Total Current Liabilities

Non-Current Liabilities

Long-term debt

Accrued pension benefits

Accrued postretirement benefits

Long-term operating lease liabilities

Deferred income taxes

Other non-current liabilities

Total Non-Current Liabilities

Shareholders’ Equity

Class I and II Serial Preferred Stock without par value:

Authorized - 10,000,000 shares each class, none issued

Common stock without par value:

Authorized - 200,000,000 shares

Issued (including shares in treasury) (2022 – 77,767,640 shares; 2021 – 77,090,104 shares)

Stated capital

Other paid-in capital

Retained earnings

Accumulated other comprehensive loss

Treasury shares at cost (2022 – 5,188,257 shares; 2021 – 1,715,282 shares)

Total Shareholders’ Equity

Noncontrolling interest

Total Equity

Total Liabilities and Equity

See accompanying Notes to the Consolidated Financial Statements.

47

December 31,

2022

2021

$

331.6

$

9.1

699.6

103.9

1,191.3

44.4

124.1

2,504.0

1,207.4

257.1

0.8

626.4

104.5

1,042.7

32.2

149.8

2,213.5

1,055.3

1,098.3

1,022.7

$

$

765.3

101.4

71.0

25.0

2,061.0

5,772.4

$

403.9

$

49.0

155.3

51.3

352.9

1,012.4

1,914.2

160.3

31.4

65.2

139.8

96.2

668.8

118.9

67.6

23.9

1,901.9

5,170.7

430.0

53.8

136.0

26.2

250.6

896.6

1,411.1

155.6

45.8

77.6

121.4

84.9

2,407.1

1,896.4

—

—

40.7

829.6

1,932.1

(181.9)

(352.2)

2,268.3

84.6

2,352.9

$

5,772.4

$

40.7

786.9

1,616.4

(23.0)

(126.1)

2,294.9

82.8

2,377.7

5,170.7

Consolidated Statements of Cash Flows

(Dollars in millions)

CASH PROVIDED (USED)

Operating Activities

Net income

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

Impairment charges

(Gain) loss on sale of assets

Acquisition-related gain

Loss on divestitures

Deferred income tax benefit

Stock-based compensation expense

Pension and other postretirement (income) expense

Pension and other postretirement benefit contributions and payments

Changes in operating assets and liabilities:

Accounts receivable

Unbilled receivables

Inventories

Accounts payable, trade

Other accrued expenses

Income taxes

Other, net

Net Cash Provided by Operating Activities

Investing Activities

Capital expenditures

Acquisitions, net of cash acquired of $19.4 million in 2022

Proceeds from disposals of property, plant and equipment

Proceeds from divestitures, net of cash divested of $5.3 million in 2022

Investments in short-term marketable securities, net

Other

Net Cash Used in Investing Activities

Financing Activities

Cash dividends paid to shareholders

Purchase of treasury shares

Proceeds from exercise of stock options

Payments related to tax withholding for stock-based compensation

Proceeds from long-term debt

Payments on long-term debt

Deferred financing costs

Accounts receivable facility financing borrowings

Accounts receivable facility financing payments

Short-term debt activity, net

Noncontrolling interest dividends paid

Other

Net Cash Provided by (Used in) Financing Activities

Effect of exchange rate changes on cash

Increase (Decrease) In Cash, Cash Equivalents and Restricted Cash

Cash, cash equivalents and restricted cash at beginning of year

Cash, Cash Equivalents and Restricted Cash at End of Year

$

See accompanying Notes to the Consolidated Financial Statements.

48

Year Ended December 31,

2022

2021

2020

$

417.0

$

381.5

$

292.4

164.0

38.3

(1.9)

—

3.5

(3.6)

30.4

(0.6)

(14.6)

(73.5)

(26.0)

(145.6)

(10.2)

91.9

16.3

(21.6)

463.8

(178.4)

(453.7)

9.6

33.9

14.6

0.7

(573.3)

(91.7)

(211.6)

8.5

(10.7)

1,399.5

(978.5)

(6.6)

297.0

(212.0)

6.9

(0.5)

6.5

206.8

(14.5)

82.8

257.9

340.7

167.8

4.5

1.3

(0.9)

—

(15.1)

20.2

(6.6)

(24.5)

(55.8)

6.2

(215.8)

76.7

55.2

8.5

(15.9)

387.3

(148.3)

(7.5)

0.6

—

(18.0)

(0.6)

(173.8)

(92.2)

(93.0)

26.0

(23.8)

325.0

(338.3)

—

310.9

(368.9)

(14.5)

(0.5)

—

(269.3)

(7.4)

(63.2)

321.1

$

257.9

$

167.1

0.4

0.9

(11.1)

—

(23.2)

23.2

17.4

(20.6)

(20.7)

18.5

27.4

22.6

55.1

8.5

19.7

577.6

(121.6)

(24.0)

1.5

—

(9.4)

—

(153.5)

(87.0)

(49.3)

37.4

(16.0)

562.0

(757.7)

(1.7)

144.0

(186.0)

40.1

(16.9)

—

(331.1)

11.9

104.9

216.2

321.1

Consolidated Statements of Shareholders’ Equity

(Dollars in millions, except per share data)

Total

Stated
Capital

The Timken Company Shareholders
Accumulated
Other
Comprehensive
(Loss) Income

Other
Paid-In
Capital

Retained 
Earnings

Treasury
Shares

Non-
controlling
Interest

Year Ended December 31, 2020
Balance at January 1, 2020

Cumulative effect of ASU 2016-13 (net of $0.2 million 

income tax benefit)

Net income

Foreign currency translation adjustments
Pension and other postretirement liability adjustments  

(net of $1.1 million income tax benefit)
Change in fair value of derivative financial  

instruments, net of reclassifications

Change in ownership of noncontrolling interest

Noncontrolling interest acquired

Dividends declared to noncontrolling interest

Treasury stock retirement

Dividends – $1.13 per share

Stock-based compensation expense

Purchase of treasury shares

Stock option exercise activity

Restricted share activity
Payments related to tax withholding for stock-based  

compensation

$ 1,954.8

$  53.1

$ 937.6

$ 1,907.4 $ 

(50.1) $  (979.8) $ 

86.6

(0.5)

292.4

92.7

(3.5)

(2.4)

0.5

(1.0)

(16.1)

(0.5)

284.5

1.0

97.3

(3.5)

(2.4)

— (12.4)

(213.3)

(764.9)

990.6

(87.0)

23.2

(49.3)

37.4

—

(16.0)

(87.0)

23.2

16.1

(23.9)

(49.3)

21.3

23.9

(16.0)

7.9

(4.6)

0.5

(2.0)

(16.1)

Balance at December 31, 2020

$ 2,225.2

$  40.7

$ 740.7

$ 1,339.5 $ 

41.3

$ 

(9.3) $ 

72.3

Year Ended December 31, 2021

Net income

Foreign currency translation adjustments
Pension and other postretirement liability adjustments  

(net of $2.3 million income tax benefit)
Change in fair value of derivative financial  

instruments, net of reclassifications

Dividends declared to noncontrolling interest

Dividends – $1.19 per share

Stock-based compensation expense

Purchase of treasury shares

Stock option exercise activity
Payments related to tax withholding for stock-based  

compensation
Balance at December 31, 2021

Year Ended December 31, 2022

Net income

Foreign currency translation adjustments
Pension and other postretirement liability adjustments 

(net of $1.9 million income tax benefit)
Change in fair value of derivative financial  

instruments, net of reclassifications

Dividends declared to noncontrolling interest

Dividends – $1.23 per share

Stock-based compensation expense

Purchase of treasury shares

Stock option exercise activity

Shares surrendered for stock option activity

Payments related to tax withholding for stock-based  

compensation

381.5

(63.7)

(6.8)

4.8

(0.5)

(92.2)

20.2

(93.0)

26.0

(23.8)
$ 2,377.7

417.0

(162.7)

(5.8)

2.3

(0.5)

(91.7)

30.4
(211.6)

8.5

—

(10.7)

369.1

(92.2)

(62.3)

(6.8)

4.8

12.4

(1.4)

(0.5)

20.2

26.0

(93.0)

(23.8)

$  40.7

$ 786.9

$ 1,616.4 $ 

(23.0) $  (126.1) $ 

82.8

407.4

(91.7)

(155.4)

(5.8)

2.3

9.6

(7.3)

(0.5)

30.4

8.5

3.8

(211.6)

(3.8)

(10.7)

Balance at December 31, 2022

$ 2,352.9

$  40.7

$ 829.6

$ 1,932.1 $ 

(181.9) $  (352.2) $ 

84.6

See accompanying Notes to the Consolidated Financial Statements.

49

 
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per share data)

Note 1 - Significant Accounting Policies 

Principles of Consolidation: 
The consolidated financial statements include the accounts and operations of the Company in which a controlling 
interest is maintained. Investments in affiliated companies where the Company exercises significant influence, but 
does not control, and the activities of which it is not the primary beneficiary, are accounted for using the equity method. 
All intercompany accounts and transactions are eliminated upon consolidation. 

Revenue: 
A  contract  exists  when  it  has  approval  and  commitment  from  both  parties,  the  rights  of  the  parties  are  identified, 
payment terms are identified, the contract has commercial substance and collectability of consideration is probable.

Revenue is generally recognized as performance obligations under the terms of a contract with a customer of the 
Company  are  satisfied.  Of  the  Company’s  revenue,  approximately  85%  to  90%  is  from  fixed-price  contracts  and 
continues to be recognized as of a point in time when products are shipped from the Company’s manufacturing or 
distribution facilities or at a later point in time when control of the products transfers to the customer. The Company 
recognizes approximately 10% to 15% of revenue over time for services and certain sales of customer-specific product 
as it satisfies the performance obligations because of the continuous transfer of control to the customer, supported 
as follows: 

 •

 •

 •

For certain service contracts, this continuous transfer of control to the customer occurs as the Company’s 
service enhances assets that the customer owns and controls at all times, and the Company is contractually 
entitled to payment for work performed to date plus a reasonable margin. 

For U.S. government contracts, the customer is allowed to unilaterally terminate the contract for convenience, 
and is required to pay the Company for costs incurred plus a reasonable margin and can take control of any 
work in process.

For certain non-U.S. government contracts involving customer-specific products, the customer controls the 
work in process based on contractual termination clauses or restrictions on the Company’s use of the product, 
and the Company possesses a right to payment for work performed to date plus a reasonable margin. 

As a result of control transferring over time for these products and services, revenue is recognized based on progress 
toward completion of the performance obligation. The selection of the method to measure progress towards completion 
requires judgment and is based on the nature of the products or services to be provided. The Company has elected 
to use the cost-to-cost input measure of progress for these contracts because it best depicts the transfer of goods or 
services to the customer based on incurring costs on the contracts. Under the cost-to-cost measure of progress, the 
extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated 
costs at completion of the performance obligation. Revenues are recorded proportionally as costs are incurred. 

The pricing and payment terms for non-U.S. government contracts are based on the Company’s standard terms and 
conditions or the result of specific negotiations with each customer. The Company’s standard terms and conditions 
require payment 45 to 75 days from the invoice date, but the timing of payment for specific negotiated terms may 
vary.  The  Company  also  has  both  prime  and  subcontracts  in  support  of  the  provision  of  goods  and  services  to 
the U.S. government. Certain of these contracts are subject to the Federal Acquisition Regulation (“FAR”) and are 
priced based on competitive market prices. Under the payment terms of certain of those U.S. government fixed-price 
contracts, the customer pays the Company performance-based payments, which are interim payments of up to 90% 
of  the  costs  incurred  to  date  based  on  quantifiable  measures  of  performance  or  on  the  achievement  of  specified 
events or milestones. Because the customer retains a portion of the contract price until completion of such contracts, 
certain  of  these  U.S.  government  fixed-price  contracts  result  in  revenue  recognized  in  excess  of  billings,  which  is 
presented within “Unbilled receivables” on the Consolidated Balance Sheets. The portion of the payments retained 
by the customer until final contract settlement is not considered a significant financing component because the intent 
is to protect the customer.

50

Note 1 - Significant Accounting Policies (continued)

Revenue  is  measured  as  the  amount  of  consideration  the  Company  expects  to  receive  in  exchange  for 
transferring  goods  or  providing  services.  Sales,  value-added,  and  other  taxes  the  Company  collects  concurrent 
with revenue-producing activities are excluded from revenue. As a practical expedient, the Company may exclude 
an assessment of whether promised goods or services are performance obligations, if such promised goods and 
services  are  immaterial  to  the  customer  contract  taken  as  a  whole,  and  combine  these  with  other  performance 
obligations. The Company has also elected not to adjust the promised amount of consideration for the effects of any 
significant financing component where the Company expects, at contract inception, that the period between when 
the  Company  transfers  a  promised  good  or  service  to  a  customer  and  when  the  customer  pays  for  that  good  or 
service will be one year or less. Finally, the Company’s policy is to exclude performance obligations resulting from 
contracts with a duration of one year or less from its disclosures related to remaining performance obligations.

The amount of consideration to which the Company expects to be entitled in exchange for the goods and services is not 
generally subject to significant variations. However, the Company does offer certain customers rebates, prompt payment 
discounts,  end-user  discounts,  the  right  to  return  eligible  products,  and/or  other  forms  of  variable  consideration. The 
Company estimates this variable consideration using the expected value amount, which is based on historical experience. 
The Company includes estimated amounts in the transaction price to the extent it is probable that a significant reversal 
of  cumulative  revenue  recognized  will  not  occur  when  the  uncertainty  associated  with  the  variable  consideration  is 
resolved. The Company adjusts the estimate of revenue at the earlier of when the amount of consideration the Company 
expects to receive changes or when the consideration becomes fixed. The Company recognizes the cost of freight and 
shipping when control of the products or services has transferred to the customer as an expense in “Cost of products 
sold” on the Consolidated Statement of Income, because those are costs incurred to fulfill the promise recognized, not a 
separate performance obligation. To the extent certain freight and shipping fees are charged to customers, the Company 
recognizes the amounts charged to customers as revenues and the related costs as an expense in “Cost of products 
sold” when control of the related products or services has transferred to the customer.

Contracts  are  occasionally  modified  to  account  for  changes  in  contract  specifications,  requirements,  and  pricing. 
The Company considers contract modifications to exist when the modification either creates new enforceable rights 
and obligations or changes existing ones. Substantially all of the Company’s contract modifications are for goods or 
services that are distinct from the existing contract. Therefore, the effect of a contract modification on the transaction 
price and the Company’s measure of progress for the performance obligation to which it relates is generally recognized 
on a prospective basis.

Cash Equivalents:
The Company considers all highly liquid investments with a maturity of three months or less when purchased to be 
cash equivalents.

Restricted Cash:
Cash and cash equivalents of $9.1 million and $0.8 million were restricted at December 31, 2022 and 2021, respectively. 
$8.5 million of this amount at December 31, 2022 is in Russia under the Company’s Rail JV, and the Company is 
presently unable to repatriate these funds to one of its subsidiaries outside of Russia. 

Accounts Receivable, Less Allowances:
Accounts receivable, less allowances on the Consolidated Balance Sheets include amounts billed and currently due 
from  customers. The  amounts  due  are  stated  at  their  net  estimated  realizable  value. The  Company  maintains  an 
allowance for doubtful accounts, which represents an estimate of the losses expected from the accounts receivable 
portfolio, to reduce accounts receivable to their net realizable value. The allowance is based upon historical trends 
in  collections  and  write-offs,  management’s  judgment  of  the  probability  of  collecting  accounts  and  management’s 
evaluation  of  business  risk.  The  Company  extends  credit  to  customers  satisfying  pre-defined  credit  criteria.  The 
Company believes it has limited concentration of credit risk due to the diversity of its customer base.

Unbilled Receivables:
Unbilled receivables on the Consolidated Balance Sheets primarily include unbilled amounts typically resulting from 
sales under long-term contracts when the following conditions exist: (i) cost-to-cost method of revenue recognition 
is utilized; (ii) the revenue recognized exceeds the amount billed to the customer; and (iii) the right to payment is 
generally subject to the passage of time as milestones are achieved. The amounts recorded for unbilled receivables 
do not exceed their net realizable value.

51

Note 1 - Significant Accounting Policies (continued)

Inventories: 
Inventories are valued at the lower of cost or net realizable value, with approximately 58% valued by the FIFO method 
and the remaining 42% valued by the LIFO method. The majority of the Company’s domestic inventories are valued 
by the LIFO method, while all of the Company’s international inventories are valued by the FIFO method.

Investments: 
Short-term investments are investments with maturities between four months and one year and are valued at amortized 
cost, which approximates fair value. The Company held short-term investments as of December 31, 2022 and 2021 
with a fair value and cost basis of $39.2 million and $56.9 million, respectively, which were included in “Other current 
assets” on the Consolidated Balance Sheets.

Property, Plant and Equipment:
Property, plant and equipment, net on the Consolidated Balance Sheets is valued at cost less accumulated depreciation. 
Maintenance  and  repairs  are  charged  to  expense  as  incurred.  The  provision  for  depreciation  is  computed  by  the 
straight-line  method  based  upon  the  estimated  useful  lives  of  the  assets.  The  useful  lives  are  10  to  30  years  for 
buildings, three to 10 years for computer software and three to 20 years for machinery and equipment.

The impairment of long-lived assets is evaluated when events or changes in circumstances indicate that the carrying 
amount of the asset or related group of assets may not be recoverable. If the expected future undiscounted cash flows 
are less than the carrying amount of the asset, an impairment loss is recognized at that time to reduce the asset to 
the lower of its fair value or its net book value.

Leases:
The Company determines if any arrangement is a lease at the inception of a contract. For leases where the Company 
is  the  lessee,  it  recognizes  lease  assets  and  related  lease  liabilities  at  the  lease  commencement  date  based  on 
the present value of lease payments over the lease term. Most of the Company’s leases do not provide an implicit 
interest rate. As a result, the Company uses its incremental borrowing rate based on the information available at the 
commencement date in determining the present value of lease payments. The lease assets also consist of amounts 
for favorable or unfavorable lease terms related to acquisitions. Lease expense for operating leases is recognized on 
a straight-line basis over the lease term as an operating expense while the expense for finance leases is recognized 
as depreciation expense and interest expense using the accelerated interest method of recognition. A lease asset 
and lease liability are not recorded for leases with an initial term of 12 months or less, and the lease expense related 
to these leases is recognized as incurred over the lease term.

Goodwill and Other Intangible Assets: 
Intangible assets subject to amortization are amortized on a straight-line method over their legal or estimated useful 
lives,  with  useful  lives  ranging  from  one  to  20  years.  Goodwill  and  indefinite-lived  intangible  assets  not  subject  to 
amortization  are  tested  for  impairment  at  least  annually. The  Company  performs  its  annual  impairment  test  as  of 
October 1st. Furthermore, goodwill and intangible assets are reviewed for impairment whenever events or changes in 
circumstances indicate that the carrying values may not be recoverable in accordance with accounting rules related 
to goodwill and other intangible assets. 

Purchase Accounting and Business Combinations:
Assets  acquired  and  the  liabilities  assumed  as  part  of  a  business  combination  are  recognized  at  their  acquisition 
date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the 
net of the acquisition date fair values of the assets acquired and the liabilities assumed. The Company considers 
inputs to value the assets and liabilities by taking into account competitive trends, market comparisons, independent 
appraisals, and historical data, among other factors, as supplemented by current and anticipated market conditions. 
The  valuation  inputs  in  these  analyses  are  based  on  market  participant  assumptions.  The  Company  may  refine 
these estimates and record adjustments to an asset or liability with the offset to goodwill during the measurement 
period, which may be up to one year from the acquisition date. Upon the conclusion of the measurement period or 
final determination of the values of the assets acquired or liabilities assumed, whichever comes first, any subsequent 
adjustments are recorded in the Company’s Consolidated Statements of Income. 

52

Note 1 - Significant Accounting Policies (continued)

Product Warranties: 
The Company provides limited warranties on certain of its products. The Company accrues liabilities for warranties 
generally  based  upon  specific  claims  and  in  certain  instances  based  on  historical  warranty  claim  experience  in 
accordance with accounting rules relating to contingent liabilities. When the Company becomes aware of a specific 
potential warranty claim for which liability is probable and reasonably estimable, a specific charge is recorded and 
accounted for accordingly. Adjustments are made quarterly to the accruals as claim data and historical experience 
change.

Income Taxes: 
The  Company  accounts  for  income  taxes  in  accordance  with ASC  740,  “Income Taxes.”  Deferred  tax  assets  and 
liabilities are recorded for the future tax consequences attributable to differences between financial statement carrying 
amounts of existing assets and liabilities and their respective tax bases, as well as net operating loss and tax credit 
carryforwards. The Company recognizes valuation allowances against deferred tax assets by tax jurisdiction when 
it  is  more  likely  than  not  those  assets  will  not  be  realized. Accruals  for  uncertain  tax  positions  are  provided  for  in 
accordance with ASC 740-10. The Company recognizes interest and penalties related to uncertain tax positions as a 
component of income tax expense. The Company has elected to account for Global Intangible Low Tax (“GILTI”) as 
a period cost.

Foreign Currency:
Assets and liabilities of subsidiaries are translated at the rate of exchange in effect on the balance sheet date; income 
and  expenses  are  translated  at  the  average  rates  of  exchange  prevailing  during  the  reporting  period.  Translation 
adjustments for assets and liabilities are reflected as a separate component of accumulated other comprehensive loss 
(income). Foreign currency gains and losses resulting from transactions are included in the Consolidated Statements 
of  Income.  Net  of  related  derivative  activity,  the  Company  recognized  a  foreign  currency  exchange  gain  resulting 
from transactions of $15.4 million for the year ended December 31, 2022 and recognized losses of $9.4 million and 
$10.0 million for the years ended December 31, 2021 and 2020, respectively.

Pension and Other Postretirement Benefits:
The Company recognizes actuarial gains and losses immediately through net periodic benefit cost upon the annual 
remeasurement in the fourth quarter, or on an interim basis if specific events trigger a remeasurement. Actuarial gains 
and losses are excluded from segment results, while all other components of net periodic benefit cost will continue to 
be included within segment results. 

Stock-Based Compensation: 
The Company recognizes stock-based compensation expense over the related vesting period of the awards based 
on the fair value on the grant date. Stock options are issued with an exercise price equal to the opening market price 
of Timken common shares on the date of grant. The fair value of stock options is determined using a Black-Scholes 
option pricing model, which incorporates assumptions regarding the expected volatility, the expected option life, the 
risk-free interest rate and the expected dividend yield. The fair value of stock-based awards that will settle in Timken 
common shares, other than stock options, is based on the opening market price of Timken common shares on the 
grant date. The fair value of stock-based awards that will settle in cash are remeasured at each reporting period until 
settlement of the awards. The Company recognizes forfeitures on stock-based awards as they occur. In addition, the 
Company’s share grants provide for the payment of dividends to employees and the Board of Directors upon vesting; 
these dividends are charged to retained earnings when paid. 

Earnings Per Share: 
Certain  unvested  restricted  share  grants  provide  for  the  payment  of  non-forfeitable  dividends.  The  Company 
considers these awards as participating securities. Earnings per share are computed using the two-class method. 
Basic earnings per share are computed by dividing net income less undistributed earnings allocated to unvested 
restricted shares by the weighted-average number of common shares outstanding during the year. Diluted earnings 
per share are computed by dividing net income less undistributed earnings allocated to unvested restricted shares 
by  the  weighted-average  number  of  common  shares  outstanding,  adjusted  for  the  dilutive  impact  of  outstanding 
stock-based awards. As of December 31, 2022, there are no participating securities outstanding.

53

Note 1 - Significant Accounting Policies (continued)

Derivative Instruments: 
The Company recognizes all derivatives on the Consolidated Balance Sheets at fair value. Derivatives that are not 
designated as hedges are adjusted to fair value through earnings. If the derivative is designated and qualifies as a 
hedge, depending on the nature of the hedge, changes in the fair value of the derivatives are either offset against 
the  change  in  fair  value  of  the  hedged  assets,  liabilities  or  firm  commitments  through  earnings  or  recognized  in 
accumulated other comprehensive loss (income) until the hedged item is recognized in earnings. The Company’s 
holdings of forward foreign currency exchange contracts qualify as derivatives pursuant to the criteria established in 
derivative accounting guidance, and the Company has designated certain of those derivatives as hedges.

Government Assistance:
From  time  to  time,  the  Company  receives  government  assistance  in  the  form  of  grants  and  other  incentives  from 
various governments to support capital projects and other business development. The amount received is typically 
based on the amount of qualifying capital expenditures or business development costs in the countries providing the 
government assistance. The Company typically has to meet certain requirements, such as adding a specified number 
of qualifying positions, to retain the government assistance or the funds can be clawed back by the government. Once 
the Company determines that it will meet the requirements of the government assistance, the funds are recognized 
over the life of the related assets or as the costs are incurred. For amounts that are expected to be paid back, the 
Company recognizes interest expense on those funds.

As of December 31, 2022, the Company has $0.9 million and $33.8 million of government assistance in other current 
liabilities and other non-current liabilities, respectively. In addition, the Company cumulatively recorded $3.3 million 
and  $0.2  million  of  government  assistance  as  a  reduction  to  cost  of  products  sold  and  SG&A,  respectively.  The 
Company also cumulatively recognized interest expense of $0.9 million related to the expected shortfall of incentive 
obligations. The following paragraphs discuss the Company’s most significant government assistance programs.

In 2022, the Company acquired Spinea. Prior to the acquisition, Spinea received incentives totaling $18.0 million from 
the Slovakian Government to invest in a new production facility and related machinery and equipment. As a result, 
Spinea is required to create 450 new jobs. If Spinea is unable to meet these commitments, a portion of the incentive 
and related interest will be paid back in October 2024. The Company is currently accounting for a potential shortfall 
of  $14.7  million,  including  interest.  The  remaining  amount  is  being  amortized  over  the  period  the  costs  are  being 
incurred. In 2022, the Company recorded amortization expense of $0.2 million as a reduction to cost of products sold. 
In addition, the Company recorded total interest expense of $0.1 million due to the expectation of having to pay a 
portion of the incentive back. 

In 2017 and 2018, the Company received grants from the Romanian Government for the reimbursement of capital 
investments  for  its  new  production  facility,  totaling  $16.5  million.  While  the  original  grants  were  based  on  capital 
investments, the Company needs to pay various taxes, including corporate income tax, payroll taxes and building 
tax, totaling $16.5 million between 2019 through 2024. If the total tax obligation is not met, any shortfall will require 
that the grant and related interest will be paid back in December 2024. The Company is currently accounting for a 
potential shortfall of $8.4 million, including interest. The incentive is being amortized over the useful life of the assets. 
Cumulatively as of December 31, 2022, the Company recorded amortization expense of $1.2 million as a reduction to 
cost of products sold. In addition, the Company recorded total interest expense of $0.8 million due to the expectation 
of having to pay a portion of the grant back.

The Company may receive other government assistance that is not described above; however, the total amount of the 
government assistance is immaterial to the Company’s Consolidated Financial Statements.

Use of Estimates: 
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make 
estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying 
notes. Because actual results could differ from these estimates, the Company reviews and updates these estimates 
and assumptions regularly to reflect recent experience.

54

Note 1 - Significant Accounting Policies (continued)

Recent Accounting Pronouncements:

New Accounting Guidance Adopted:
In  November  2021,  the  FASB  issued  Accounting  Standards  Update  (“ASU”)  2021-10,  “Government  Assistance 
(Topic  832).” ASU  2021-10  is  intended  to  increase  transparency  of  government  assistance  by  requiring  entities  to 
disclose  the  types  of  government  assistance,  the  entity’s  accounting  for  government  assistance,  and  the  effect  of 
the  government  assistance  on  an  entity’s  financial  statements.  This  new  guidance  is  effective  for  all  entities  for 
annual reporting periods beginning after December 15, 2021. Refer to the section above “Government Assistance” for 
further discussion.

In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805), Accounting for Contract Assets 
and Contract Liabilities from Contracts with Customers.” ASU 2021-08 requires contract assets and contract liabilities 
acquired in a business combination to be recognized in accordance with ASC Topic 606 as if the acquirer had originated 
the contracts. This new guidance is effective for fiscal years beginning after December 15, 2022, including interim 
periods within those fiscal years. Early adoption is permitted. The Company adopted ASU 2021-08 effective January 1, 
2022, and the impact of the adoption was not material to the Company’s results of operations and financial condition.

In December 2019, the FASB issued ASU 2019-12, “Income Taxes (ASC 740) – Simplifying the Accounting for Income 
Taxes,” which is intended to reduce complexity in the accounting for income taxes while maintaining or improving the 
usefulness  of  information  provided  to  financial  statement  users. The  guidance  amends  certain  existing  provisions 
under ASC  740  to  address  a  number  of  distinct  items.  This  standard  was  effective  for  public  companies  in  fiscal 
years beginning after December 15, 2020, including interim periods within those fiscal years. The Company adopted 
ASU 2019-12 effective January 1, 2021, and the impact of the adoption was not material to the Company’s results of 
operations and financial condition.

New Accounting Guidance Issued and Not Yet Adopted:
In  September  2022,  the  FASB  issued ASU  2022-04,  “Liabilities  -  Supplier  Finance  Programs  (Subtopic  405-50).” 
ASU 2022-04 is intended to establish disclosures that enhance the transparency of a supplier finance program used 
by an entity in connection with the purchase of goods and services. Supplier finance programs, which also may be 
referred  to  as  reverse  factoring,  payables  finance  or  structured  payables  arrangements,  allow  a  buyer  to  offer  its 
suppliers the option for access to payment in advance of an invoice due date, which is paid by a third-party finance 
provider or intermediary. Under the guidance, a buyer in a supplier finance program would disclose qualitative and 
quantitative information about its supplier finance programs. The new guidance is effective for fiscal years beginning 
after December 15, 2022, including interim periods within those fiscal years, except for the amendment on rollforward 
information, which is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted. The 
Company is currently evaluating the impact of the new guidance.

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of 
Reference Rate Reform on Financial Reporting.” ASU 2020-04 is intended to provide temporary optional expedients 
and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial 
reporting burden related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) and 
other  interbank  offered  rates  to  alternative  reference  rates.  In  December  2022,  the  FASB  issued  ASU  2022-06, 
“Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848.” ASU 2022-06 extends the period 
of time financial statement preparers can utilize the reference rate reform relief guidance. The amendments in ASU 
2022-06 defer the sunset date of Topic 848 from December 31, 2022, to December 31, 2024, after which entities will no 
longer be permitted to apply the relief in Topic 848. This guidance is available immediately and may be implemented 
in any period prior to the guidance expiration on December 31, 2024. On December 5, 2022, the Company entered 
into the Senior Credit Facility. The Credit Agreement amended and restated the Company’s previous revolving credit 
agreement,  including  replacing  interest  rates  based  on  LIBOR  to  SOFR.  The  Company’s  remaining  activity  with 
LIBOR is intercompany based which eliminates in total for the Company and will be transitioned during 2023. 

55

Note 2 - Acquisitions and Divestitures 

Acquisitions:
The Company completed two acquisitions in 2022. On November 4, 2022, the Company completed the acquisition of 
GGB, a global technology and market leader of premium engineered metal-polymer plain bearings for $302.5 million, 
net of cash acquired of $19.2 million, subject to customary post-closing adjustments. GGB’s revenue was estimated 
to be approximately $200 million for the full year 2022. GGB’s products are used mainly in industrial applications, 
including pumps and compressors, HVAC, off-highway, energy, material handling and aerospace. With manufacturing 
facilities  across  the  United  States,  Europe  and  China,  GGB  employs  approximately  900  people  and  has  a  global 
engineering, distribution and sales footprint. On May 31, 2022, the Company completed the acquisition of Spinea, 
a European technology leader and manufacturer of highly engineered cycloidal reduction gears and actuators, with 
estimated  2022  full  year  sales  of  approximately  $40.0  million.  Spinea’s  solutions  primarily  serve  high-precision 
automation  and  robotics  applications  in  the  factory  automation  sector.  Spinea  is  located  in  Presov,  Slovakia. The 
purchase price for this acquisition was $151.2 million, net of cash acquired of $0.2 million. The Company incurred 
acquisition-related costs of $3.6 million in 2022 to complete these acquisitions. Based on markets and customers 
served, results for GGB are reported in the Mobile Industries and Process Industries segments, and results for Spinea 
are reported in the Process Industries segment. 

On August 20, 2021, the Company completed the acquisition of the assets of iMS, a manufacturer of industrial robotics 
and automation solutions, with annual sales of approximately $6.0 million. iMS is headquartered in Norton Shores, 
Michigan. The purchase price for this acquisition was $7.7 million. Based on markets and customers served, results 
for iMS are primarily reported in the Process Industries segment. 

56

Note 2 - Acquisitions and Divestitures (continued)

The purchase price allocations at fair value, net of cash acquired, for 2022 and 2021 acquisitions as of December 31, 
2022 and 2021 are presented below:

Assets:

Accounts receivable

Inventories

Other current assets

Property, plant and equipment

Goodwill

Other intangible assets

Other non-current assets

Total assets acquired

Liabilities:

Accounts payable, trade

Salaries, wages and benefits

Income taxes payable

Other current liabilities

Deferred income taxes

Other non-current liabilities

Total liabilities assumed

Net assets acquired

Cash flow reconciling items:

Working capital adjustment related to 2020 acquisitions paid in 2021

Cash paid for acquisitions, net of cash acquired

2022

2021

30.6

52.3

7.6

153.6

106.9

182.6

12.1

545.7

16.8

11.8

3.2

7.0

30.0

23.2

92.0

453.7

$

$

$

$

$

0.2

1.1

—

0.6

5.4

2.2

0.2

9.7

0.3

—

—

1.5

—

0.2

2.0

7.7

—

453.7

$

(0.2)

7.5

$

$

$

$

$

$

The 2022 acquisitions presented above includes goodwill of $63.6 million and intangible assets of $152.0 million for 
GGB, and $43.3 million of goodwill and $30.6 million of intangible assets for Spinea. 

The amounts for 2022 in the table above represent the preliminary purchase price allocations for GGB and Spinea. 
These  purchase  price  allocations,  including  the  residual  amount  allocated  to  goodwill,  is  based  on  preliminary 
information  and  is  subject  to  change  as  additional  information  concerning  final  asset  and  liability  valuations  are 
obtained. The purchase price allocation for GGB is preliminary as a result of the proximity of the acquisition date to 
December 31, 2022, and as a result, no elements of the purchase price allocation has been finalized. The purchase 
price  allocation  for  Spinea  is  preliminary  with  respect  to  certain  working  capital  items,  specifically  inventory,  and 
certain income tax adjustments. During the measurement period for each acquisition, the Company will adjust assets 
and  liabilities  if  new  information  is  obtained  about  facts  and  circumstances  that  existed  as  of  the  acquisition  date 
that, if known, would have resulted in revised estimated values of those assets or liabilities as of that date. The effect 
of  measurement  period  adjustments  to  the  estimated  fair  values  will  be  reflected  as  if  the  adjustments  had  been 
completed on the acquisition date.

57

Note 2 - Acquisitions and Divestitures (continued)

The following table summarizes the preliminary purchase price allocation at fair value for identifiable intangible assets 
acquired in 2022 and 2021:

Trade names (indefinite life)

Trade names (finite life)

Technology and know-how

Customer relationships

Non-competes

Capitalized software

Total intangible assets

2022

Weighted-
Average Life

Indefinite

$

20 years

15 years

16 years
—

2 years

$

35.2

6.2

38.7

100.2

—

2.3

$

182.6

$

2021

Weighted-
Average Life

—

—

1.5

0.5

0.2

—

2.2

—

—

19 years

2 years

5 years

—

Divestitures:
During the third quarter of 2022, the Company made the decision to sell its ADS business, located in Manchester, 
Connecticut.  The  business  met  the  held  for  sale  criteria,  and  the  Company  reclassified  its  assets  and  liabilities 
accordingly. As a result of the carrying value of the business exceeding the estimated sales price less costs to sell, 
the Company recorded an impairment charge of $29.3 million. On November 1, 2022, the Company completed the 
divestiture of the ADS business. ADS had net sales of $39.7 million and $48.8 million in 2022 and 2021, respectively. 
The results of operations of ADS were reported in the Mobile Industries segment based on customers and underlying 
market sectors served. The Company recorded proceeds of $33.0 million on the sale of the business.

On September 1, 2022, the Company completed the divestiture of Timken Russia, one of its two subsidiaries in Russia. 
Timken Russia had net sales of $4.8 million and $19.6 million in 2022 and 2021, respectively. The results of operations 
of  Timken  Russia  were  reported  in  the  Mobile  Industries  and  Process  Industries  segments  based  on  customers 
and  underlying  market  sectors  served.  The  Company  recorded  proceeds  of  $1.0  million,  net  of  cash  divested  of 
$5.3 million, and recognized a loss of $2.7 million on the sale of the business. The loss was reflected in other income 
(expense), net in the Consolidated Statement of Income. 

58

 
Note 3 - Revenue 

The following table presents details deemed most relevant to the users of the financial statements about total revenue 
for the years ended December 31, 2022, 2021 and 2020:

United States

Americas excluding United States

Europe / Middle East / Africa

China

Asia-Pacific excluding China

Net sales

United States

Americas excluding United States

Europe / Middle East / Africa

China

Asia-Pacific excluding China

Net sales

United States

Americas excluding United States

Europe / Middle East / Africa

China

Asia-Pacific excluding China

Net sales

December 31, 2022

Mobile

Process

Total

$ 1,060.0

$

931.7

$ 1,991.7

236.4

463.6

120.1

226.4

240.1

532.6

488.4

197.4

476.5

996.2

608.5

423.8

$ 2,106.5

$ 2,390.2

$ 4,496.7

December 31, 2021

Mobile

Process

Total

$

950.9

$

782.7

$ 1,733.6

207.3

487.8

125.8

193.9

188.4

540.3

486.1

169.7

395.7

1,028.1

611.9

363.6

$ 1,965.7

$ 2,167.2

$ 4,132.9

December 31, 2020

Mobile

Process

Total

$

853.8

$

699.6

$ 1,553.4

168.1

389.9

102.2

157.6

138.0

457.0

421.0

126.0

306.1

846.9

523.2

283.6

$ 1,671.6

$ 1,841.6

$ 3,513.2

When reviewing revenues by sales channel, the Company separates net sales to OEMs from sales to distributors and 
end users. The following table presents the percent of revenues by sales channel for the years ended December 31, 
2022, 2021 and 2020:

Revenue by sales channel

Original equipment manufacturers

Distribution/end users

2022

60%

40%

2021

60%

40%

2020

60%

40%

In addition to disaggregating revenue by segment and geography and by sales channel as shown above, the Company 
believes information about the timing of transfer of goods or services, type of customer and distinguishing service 
revenue from product sales is also relevant. During the years ended December 31, 2022 and December 31, 2021, 
approximately 9% of total net sales were recognized on an over-time basis, compared to 11% in 2020.These sales 
were recognized over-time due to the continuous transfer of control to the customer, with the remainder recognized 
as of a point in time. Approximately 4% of total net sales represented service revenue in 2022, 2021 and 2020. Finally, 
business with the U.S. government or its contractors represented approximately 7% of total net sales for 2022, 2021 
and 2020. 

59

Note 3 - Revenue (continued)

Remaining Performance Obligations:
Remaining performance obligations represent the transaction price of orders meeting the definition of a contract for 
which  work  has  not  been  performed  and  excludes  unexercised  contract  options.  Performance  obligations  having 
a  duration  of  more  than  one  year  are  concentrated  in  contracts  for  certain  products  and  services  provided  to  the 
U.S. government or its contractors. The aggregate amount of the transaction price allocated to remaining performance 
obligations for such contracts with a duration of more than one year was approximately $171 million at December 31, 
2022.  The  decrease  in  the  remaining  performance  obligations  compared  to  December  31,  2021  was  due  to  the 
divestiture of ADS in the fourth quarter of 2022. Refer to Note 2 - Acquisitions and Divestitures for further information 
regarding the divestiture.

Unbilled Receivables:
The following table contains a rollforward of unbilled receivables for the years ended December 31, 2022 and 2021:

Beginning balance, January 1

Additional unbilled revenue recognized

Less: amounts billed to customers

Less: unbilled receivables divested 

Ending balance

$

2022

2021

$

104.5

396.2

(370.5)

(26.3)

110.9

383.0

(389.4)

—

$

103.9

$

104.5

There were no impairment losses recorded on unbilled receivables for the years ended December 31, 2022 and 2021.

60

Note 4 - Segment Information 

The  Company  has  historically  operated  under  two  reportable  segments:  (1)  Mobile  Industries  and  (2)  Process 
Industries.

Description of types of products and services from which each reportable segment derives its revenues:
The Company’s reportable segments are business units that target different industry sectors. While the segments 
often operate using a shared infrastructure, each reportable segment is managed to address specific customer needs 
in these diverse market segments.

Mobile  Industries  offers  an  extensive  portfolio  of  bearings,  seals,  lubrication  devices  and  systems,  as  well  as 
industrial motion components, engineered chain, augers, belts, couplings, clutches, brakes and related products and 
maintenance services, to OEMs and end users of: off-highway equipment for the agricultural, construction, mining, 
outdoor power equipment and powersports markets; on-highway vehicles including passenger cars, light trucks and 
medium- and heavy-duty trucks; rail cars and locomotives. Beyond service parts sold to OEMs, aftermarket sales 
and  services  to  individual  end  users,  equipment  owners,  operators  and  maintenance  shops  are  handled  directly 
or  through  the  Company’s  extensive  network  of  authorized  automotive  and  heavy-truck  distributors,  and  include 
hub  units,  specialty  kits  and  more.  Mobile  Industries  also  provides  power  transmission  systems  and  flight-critical 
components for civil and military aircraft, which include bearings, turbine engine components, gears and housings. 

Process  Industries  supplies  industrial  bearings  and  assemblies,  industrial  motion  components  such  as  gears  and 
gearboxes, linear motion products, couplings, seals, lubricants, chains, belts and related products and services to 
OEMs and end users in industries that place heavy demands on operating equipment they make or use. This includes: 
metals, mining, cement and aggregate production; wind energy and solar; coal power generation and oil and gas; pulp 
and paper in applications including printing presses; packaging and automation; and cranes, hoists, drawbridges, gear 
drives, conveyors, health and critical motion control equipment, marine equipment and food processing equipment. 
This segment also supports aftermarket sales and service needs through its global network of authorized industrial 
distributors and through the provision of services directly to end users. In addition, the Company’s industrial services 
group offers end users a broad portfolio of maintenance support and capabilities that include repair and service for 
bearings and gearboxes as well as electric motor rewind, repair and services. 

Measurement of segment profit or loss and segment assets:
The Company evaluates performance and allocates resources based on return on capital and profitable growth. The 
primary measurement used by management to measure the financial performance of each segment is EBITDA.

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

Factors used by management to identify the enterprise’s reportable segments:
Net sales by geographic area are reported by the destination of net sales, which is reflective of how the Company 
operates its segments. Long-lived assets by geographic area are reported by the location of the subsidiary. 

Timken’s non-U.S. operations are subject to normal international business risks not generally applicable to a domestic 
business.  These  risks  include  currency  fluctuation,  changes  in  tariff  restrictions,  difficulties  in  establishing  and 
maintaining relationships with local distributors and dealers, import and export licensing requirements, difficulties in 
staffing and managing geographically diverse operations and restrictive regulations by foreign governments, including 
price and exchange controls, compliance with a variety of foreign laws and regulations, including unexpected changes 
in  taxation  and  environmental  regulatory  requirements,  and  disadvantages  of  competing  against  companies  from 
countries that are not subject to U.S. laws and regulations, including the FCPA.

61

Note 4 - Segment Information (continued)

Business Segment Information:
The  following  tables  provide  segment  financial  information  and  a  reconciliation  of  segment  results  to  
consolidated results:

Net sales to external customers:

Mobile Industries

Process Industries

Segment EBITDA:

Mobile Industries

Process Industries

Total EBITDA, for reportable segments

Unallocated corporate expense
Corporate pension and other postretirement benefit related expense (1)
Acquisition-related gain (2)
Depreciation and amortization

Interest expense

Interest income

2022

2021

2020

$ 2,106.5

$ 1,965.7

$ 1,671.6

2,390.2

2,167.2

1,841.6

$ 4,496.7

$ 4,132.9

$ 3,513.2

$

$

$

$

217.1

621.5

838.6

(50.0)

(2.9)

—

(164.0)

(74.6)

3.8

$

$

240.1

506.3

746.4

(46.1)

(0.3)

0.9

(167.8)

(58.8)

2.3

232.5

442.9

675.4

(40.7)

(18.5)

11.1

(167.1)

(67.6)

3.7

Income before income taxes

$

550.9

$

476.6

$

396.3

(1)  Corporate  pension  and  other  postretirement  benefit  related  expense  represents  curtailments,  professional  fees  associated  with  pension 
de-risking and actuarial losses that resulted from the remeasurement of pension and other postretirement plan assets and obligations as a result 
of changes in assumptions.
(2)  The  acquisition-related  gain  represents  a  bargain  purchase  price  gain  on  the  acquisition  of  Aurora,  acquired  on  November  30,  2020. 
See Note 2 - Acquisitions and Divestitures for additional information.

Assets employed at year-end:

Mobile Industries

Process Industries
Corporate (2)

(2)  Corporate assets include corporate buildings and cash and cash equivalents.

Capital expenditures:

Mobile Industries

Process Industries

Corporate

Depreciation and amortization:

Mobile Industries

Process Industries

Corporate

2022

2021

$

2,371.6

$

2,216.4

2,963.4

437.4

2,548.3

406.0

$

5,772.4

$

5,170.7

2022

2021

2020

$

$

$

$

71.2

$

105.8

1.4

178.4

75.2

87.6

1.2

$

$

$

$

$

52.3

95.4

0.6

148.3

80.1

86.6

1.1

70.5

50.1

1.0

121.6

79.7

86.6

0.8

164.0

$

167.8

$

167.1

62

 
 
 
 
Note 4 - Segment Information (continued)

Geographic Financial Information:

Property, Plant and Equipment, net:

United States

China 

India

Romania

Rest of world

2022

2021

$

$

418.3

272.5

130.6

101.8

284.2

398.2

235.3

142.9

112.1

166.8

$

1,207.4

$

1,055.3

Refer to Note 3 - Revenue for further information pertaining to geographic net sales information.

63

 
 
Note 5 - Income Taxes 

Income  before  income  taxes,  based  on  geographic  location  of  the  operations  to  which  such  earnings  are 
attributable, is provided below. As the Company has elected to treat certain foreign subsidiaries as branches for 
U.S. income tax purposes, pretax income attributable to the United States shown below may differ from the pretax 
income reported in the Company’s annual U.S. federal income tax return.

Income before income taxes:

United States
Non-United States

Income before income taxes

The provision for income taxes consisted of the following:

Current:
Federal
State and local
Foreign

Deferred:
Federal
State and local
Foreign

United States and foreign tax provision on income

$

2022
86.0
464.9
$ 550.9

2021
$ 125.8
350.8
$ 476.6

2020
$ 144.1
252.2
$ 396.3

2022

2021

2020

$

11.2
6.7
119.6
$ 137.5

$

(7.8)
(0.3)
4.5
$
(3.6)
$ 133.9

$

8.1
3.9
98.2
$ 110.2

$

$
$

(5.2)
(3.4)
(6.5)
(15.1)
95.1

$

40.3
7.9
78.9
$ 127.1

$

(19.5)
(1.3)
(2.4)
$
(23.2)
$ 103.9

The Company made net income tax payments of $120.6 million, $100.7 million and $119.3 million in 2022, 2021 and 
2020, respectively.

The following table is the reconciliation between the provision for income taxes and the amount computed by applying 
the U.S. federal income tax rate of 21% to income before taxes:

Income tax at the U.S. federal statutory rate
Adjustments:

State and local income taxes, net of federal tax benefit
Tax on foreign remittances and U.S. tax on foreign income
Tax expense related to undistributed earnings of foreign subsidiaries
Foreign losses without current tax benefits
Foreign earnings taxed at different rates including tax holidays
U.S. foreign tax credit
Accruals and settlements related to tax audits
Valuation allowance changes
Stock based compensation
Other items, net
Provision for income taxes

Effective income tax rate

2022
$ 115.7

2021
$ 100.1

2020
83.2

$

5.3
19.0
1.0
3.1
19.4
(15.2)
(9.5)
(0.9)
(1.2)
(2.8)
$ 133.9

24.3%

4.0
15.4
0.1
2.6
15.4
(11.5)
(7.7)
(7.8)
(8.1)
(7.4)
95.1
20.0%

4.8
22.5
0.1
2.5
11.1
(13.8)
3.4
(0.7)
(3.1)
(6.1)
$ 103.9

26.2%

$

64

  
 
Note 5 - Income Taxes (continued)

The Company released $7.8 million of foreign valuation allowance for the year ended December 31, 2021, which was 
related to a valuation allowance that was recorded against certain net operating loss carryforwards in China. Once 
established,  a  valuation  allowance  is  released  when,  based  on  the  weight  of  all  available  evidence,  management 
concludes  that  related  deferred  tax  assets  are  more  likely  than  not  to  be  realized.  Management  concluded  in  the 
fourth quarter of 2021 that there was sufficient evidence to release the valuation allowance.

There are no changes to the Company’s assertion about its permanent reinvestment in undistributed foreign earnings. 
The  Company  recorded  $1.0  million  and  $0.1  million  of  income  tax  expense  related  to  foreign  withholding  taxes 
on  planned  one-time  distributions  for  the  years  ended  December  31,  2022  and  2021,  respectively.  No  additional 
deferred  taxes  have  been  recorded  for  any  other  outside  basis  differences  as  these  amounts  continue  to  be 
indefinitely  reinvested  in  foreign  operations.  The  amounts  of  undistributed  foreign  earnings  were  $1,620.0  million 
and $1,249.1 million at December 31, 2022 and December 31, 2021, respectively. It is not practicable to calculate the 
additional taxes that might be payable on such unremitted earnings due to the variety of circumstances and tax laws 
applicable at the time of distribution.

The effect of temporary differences giving rise to deferred tax assets and liabilities at December 31, 2022 and 2021 
was as follows:

Deferred tax assets:
Accrued postretirement benefits cost
Accrued pension cost
Other employee benefit accruals
Tax loss and credit carryforwards
Other, net
Valuation allowances

Deferred tax liabilities - principally depreciation and amortization

Net deferred tax liabilities

2022

2021

$

$

$

8.4 $

46.5
16.1
80.7
61.7
(31.3)
182.1 $
(250.9)

(68.8) $

12.4
49.9
15.7
83.2
63.9
(31.0)
194.1
(247.9)
(53.8)

The  Company  has  U.S.  federal  and  state  tax  credit  and  loss  carryforwards  with  tax  benefits  totaling  $9.8  million, 
portions  of  which  will  expire  in  2023  and  continue  until  2040.  In  addition,  the  Company  has  loss  carryforwards  in 
various non-U.S. jurisdictions with tax benefits totaling $70.9 million, portions of which will expire in 2023 while others 
will be carried forward indefinitely. The Company has provided valuation allowances of $30.6 million against certain of 
these carryforwards and $0.7 million against other deferred tax assets. A majority of the non-U.S. loss carryforwards 
represent  local  country  net  operating  losses  for  branches  of  the  Company  or  entities  treated  as  branches  of  the 
Company under U.S. tax law for which deferred taxes have been recorded. 

As  of  December  31,  2022,  the  Company  had  $26.0  million  of  total  gross  unrecognized  tax  benefits,  $23.3  million 
of which would favorably impact the Company’s effective income tax rate in any future period if such benefits were 
recognized. As of December 31, 2022, the Company believes it is reasonably possible that the amount of unrecognized 
tax positions could decrease by approximately $2.7 million during the next 12 months. The potential decrease would 
primarily be driven by settlements with tax authorities and the expiration of various applicable statutes of limitation. 
As of December 31, 2022, the Company had accrued $8.8 million of interest and penalties related to uncertain tax 
positions. The Company records interest and penalties related to uncertain tax positions as a component of income 
tax expense.

As of December 31, 2021, the Company had $36.1 million of total gross unrecognized tax benefits, $30.7 million of 
which  would  favorably  impact  the  Company’s  effective  income  tax  rate  in  any  future  period  if  such  benefits  were 
recognized. As  of  December  31,  2021,  the  Company  had  accrued  $8.9  million  of  interest  and  penalties  related  to 
uncertain tax positions. The Company records interest and penalties related to uncertain tax positions as a component 
of income tax expense.

As  of  December  31,  2020,  the  Company  had  $45.6  million  of  total  gross  unrecognized  tax  benefits,  $39.2  million 
of which would favorably impact the Company’s effective income tax rate in any future period if such benefits were 
recognized. As  of  December  31,  2020,  the  Company  had  accrued  $8.6  million  of  interest  and  penalties  related  to 
uncertain tax positions.

65

Note 5 - Income Taxes (continued)

The following table reconciles the Company’s total gross unrecognized tax benefits for the years ended December 31, 
2022, 2021 and 2020:

Beginning balance, January 1
Tax positions related to the current year:

Additions

Tax positions related to prior years:

Additions
Reductions
Settlements with tax authorities
Lapses in statutes of limitation

Ending balance, December 31

2022

2021

2020

$

36.1

$

45.6

$

38.9

0.6

1.6

4.0
(4.7)
(1.9)
(8.1)
26.0

$

3.7
(8.1)
(1.7)
(5.0)
36.1

$

2.2

8.7
(1.0)
(0.3)
(2.9)
45.6

$

During 2022, gross unrecognized tax benefits decreased primarily for releases of accruals related to lapses in statute 
of limitations and reductions related to foreign currency for non-U.S. positions. These decreases were partially offset 
by accruals for uncertain tax positions related to prior year tax matters in multiple jurisdictions related to acquisitions.

During 2021, gross unrecognized tax benefits decreased primarily for releases of accruals related to closing agreements 
and lapses in statute of limitations for the U.S. and a favorable non-U.S. transfer pricing settlement. These decreases 
were partially offset by accruals for uncertain tax positions related to non-U.S. non-deductible expenses.

During 2020, gross unrecognized tax benefits increased primarily for additional accruals for uncertain tax positions 
related  to  non-U.S.  transfer  pricing  along  with  prior  year  tax  matters  in  multiple  jurisdictions  related  to  previous 
acquisitions and non-deductible expenses. These increases were partially offset by releases of accrual for lapses in 
statutes of limitations.

As of December 31, 2022, the Company is subject to examination by the IRS for tax years 2017 to the present. The 
Company  also  is  subject  to  tax  examination  in  various  U.S.  state  and  local  tax  jurisdictions  for  tax  years  2015  to 
the present, as well as various foreign tax jurisdictions, including Mexico, China, Poland, France, Germany, India, 
Romania and Slovakia for tax years as early as 2003 to the present. The Company’s unrecognized tax benefits are 
presented on the Consolidated Balance Sheets as a component of other non-current liabilities, or in certain instances, 
as a reduction to deferred income taxes.

66

Note 6 - Earnings Per Share

The following table sets forth the reconciliation of the numerator and the denominator of basic earnings per share and 
diluted earnings per share for the years ended December 31, 2022, 2021 and 2020: 

Numerator:

Net income attributable to The Timken Company

Less: undistributed earnings allocated to nonvested stock

Net income available to common shareholders for basic and 

diluted earnings per share

Denominator:

2022

2021

2020

$

$

407.4 $
—

369.1 $

—

407.4 $

369.1 $

284.5

—

284.5

Weighted average number of shares outstanding - basic

73,602,247

75,885,316

75,324,280

Effect of dilutive securities:

Stock  options  and  awards  -  based  on  the  treasury  stock 
method

721,592

1,121,273

1,047,086

Weighted average number of shares outstanding,  
assuming dilution of stock options and awards

Basic earnings per share

Diluted earnings per share

74,323,839

77,006,589

76,371,366

$

$

5.54 $
5.48 $

4.86 $

4.79 $

3.78

3.72

The dilutive effect of stock options and awards includes all outstanding stock options and awards except stock options 
that are considered antidilutive. Stock options are antidilutive when the exercise price exceeds the average market 
price of the Company’s common shares during the periods presented. The antidilutive stock options outstanding were 
zero during 2022 and 2021, and 676,627 during 2020.

Note 7 - Inventories 

The components of inventories at December 31, 2022 and 2021 were as follows:

Manufacturing supplies
Raw materials
Work in process
Finished products

Subtotal

Allowance for surplus and obsolete inventory

Total Inventories, net

2022

2021

$

$

$

41.7 $

132.0
491.2
584.8
1,249.7 $
(58.4)
1,191.3 $

38.0
121.8
418.4
527.8
1,106.0
(63.3)
1,042.7

Inventories at December 31, 2022 valued on the FIFO cost method were 58% and the remaining 42% were valued by 
the LIFO method. If all inventories had been valued at FIFO, inventories would have been $235.4 million and $199.4 
million greater at December 31, 2022 and 2021, respectively. The Company recognized an increase in its LIFO reserve 
of $36.0 million during 2022, compared to an increase in its LIFO reserve of $27.3 million during 2021. The increase 
in inventories from 2021 was primarily due to higher demand levels.

67

Note 8 - Property, Plant and Equipment 

The components of property, plant and equipment, net at December 31, 2022 and 2021 were as follows:

Land and buildings
Machinery and equipment

Subtotal

Less: accumulated depreciation

Property, Plant and Equipment, net

2022

2021

$

$

$

628.4 $

2,316.5
2,944.9 $
(1,737.5)
1,207.4 $

554.1
2,252.4
2,806.5
(1,751.2)
1,055.3

Total depreciation expense was $113.4 million, $113.3 million and $110.9 million in 2022, 2021 and 2020, respectively. 

Note 9 - Goodwill and Other Intangible Assets 

Goodwill:

The  Company  tests  goodwill  and  indefinite-lived  intangible  assets  for  impairment  at  least  annually,  performing  its 
annual impairment test as of October 1st. Furthermore, goodwill and indefinite-lived intangible assets are reviewed for 
impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. 

The Company reviews goodwill for impairment at the reporting unit level. The Mobile Industries segment has three 
reporting units and the Process Industries segment has two reporting units. Changes in the carrying value of goodwill 
were as follows:

Year ended December 31, 2022:

Beginning Balance

Acquisitions

Foreign currency translation adjustments

Ending Balance

Mobile  
Industries
371.7

Process 
Industries

$

651.0 $

30.5

(11.6)

76.4

(19.7)

Total
1,022.7

106.9

(31.3)

390.6

$

707.7 $

1,098.3

$

$

The acquisition of GGB added $63.6 million of goodwill, and the acquisition of Spinea added $43.3 million of goodwill. 
The Company is still evaluating the tax deductibility of goodwill from the GGB acquisition, but it expects a portion of 
the goodwill to be deductible for tax purposes. The goodwill for Spinea is expected to be 100% tax deductible. 

Year ended December 31, 2021:

Beginning Balance

Acquisitions
Foreign currency translation adjustments and other changes

Ending Balance

$

$

Mobile 
Industries

384.6

—
(12.9)

Process
Industries
663.0
$

5.4
(17.4)

Total
1,047.6

$

5.4
(30.3)

371.7

$

651.0

$

1,022.7

The acquisition of iMS added $5.4 million of goodwill and was 100% tax deductible. 

No material goodwill impairment losses were recorded in 2022, 2021 or 2020.

68

Note 9 - Goodwill and Other Intangible Assets (continued)

Intangible Assets:

The following table displays intangible assets as of December 31, 2022 and 2021:

Gross 
Carrying 
Amount

2022

Accumulated 
Amortization

Net
Carrying
Amount

Gross
Carrying
Amount

2021

Accumulated
Amortization

Net
Carrying
Amount

Intangible assets subject 
to amortization:
Customer relationships
Technology and know-how
Trade names
Capitalized Software
Other

Intangible assets not 
subject to amortization:
Trade names
FAA air agency certificates

Total intangible assets

$

$

$

$
$

561.5 $
273.1
18.4
288.4
3.3
1,144.7 $

152.8
8.7
161.5
1,306.2 $

(183.2) $
(80.4)
(8.7)
(266.3)
(2.3)
(540.9) $

$

$
(540.9) $

378.3 $
192.7
9.7
22.1
1.0
603.8 $

152.8 $
8.7
161.5 $
765.3 $

518.1 $
270.7
14.3
280.0
4.7
1,087.8 $

122.7
8.7
131.4
1,219.2 $

(189.3) $
(86.6)
(9.6)
(261.3)
(3.6)
(550.4) $

$

$
(550.4) $

328.8
184.1
4.7
18.7
1.1
537.4

122.7
8.7
131.4
668.8

Intangible  assets  acquired  in  2022  totaled  $182.6  million.  Intangible  assets  subject  to  amortization  were  assigned 
useful lives of one to 20 years and had a weighted-average amortization period of 16.3 years.

Amortization  expense  for  intangible  assets  was  $50.6  million,  $54.5  million  and  $56.2  million  for  the  years  ended 
December  31,  2022,  2021  and  2020,  respectively. Amortization  expense  included  $43.9  million,  $46.8  million  and 
$47.3 million related to intangible assets acquired as part of a business combination for the years ended December 31, 
2022,  2021  and  2020,  respectively.  Amortization  expense  for  intangible  assets  is  estimated  to  be  approximately 
$54.9 million in 2023, $49.0 million in 2024, $47.5 million in 2025, $45.9 million in 2026 and $44.5 million in 2027. 
Substantially all amortization expense for intangible assets was recorded in Cost of product sold on the Consolidated 
Statements of Income.

Note 10 - Other Current Liabilities

The following table displays other current liabilities as of December 31, 2022 and 2021:

(Dollars in millions)

Sales rebates
Deferred revenue
Operating lease liabilities
Product warranty
Freight and duties
Current derivative liability
Taxes other than income and payroll taxes
Professional fees
Interest
Restructuring
Other

Total other current liabilities

69

2022

2021

$

$

82.9 $
54.3
24.1
23.5
21.7
19.8
18.7
17.4
15.0
3.1
72.4
352.9 $

70.3
3.8
26.2
11.7
25.5
0.9
16.0
10.8
10.8
7.0
67.6
250.6

 
 
Note 11 - Leasing 

The  Company  enters  into  operating  and  finance  leases  for  manufacturing  facilities,  warehouses,  sales  offices, 
information technology equipment, plant equipment, vehicles and certain other equipment. 

Lease expense for the years ended December 31, 2022, 2021 and 2020 as follows: 

Operating lease expense
Amortization of right-of-use assets on finance leases

Total lease expense

2022

2021

2020

$

$

30.3 $
1.7
32.0 $

34.1 $
2.3
36.4 $

36.0
1.5
37.5

Cash flows from operating and financing leases for the years ended December 31, 2022, 2021 and 2020 as follows:

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases
Financing cash flows from finance leases

2022

2021

2020

$

30.1 $
1.2

32.9 $
2.2

35.7
1.2

The following tables present the impact of leasing on the Consolidated Balance Sheets at December 31, 2022 and 
2021:

Operating Leases
Lease assets:

Operating lease assets

Lease liabilities:

Short-term operating lease liabilities
Long-term operating lease liabilities
Total operating lease liabilities

2022

2021

$

$

$

101.4 $

118.9

24.1 $
65.2
89.3 $

26.2
77.6
103.8

Short-term operating lease liabilities at December 31, 2022 and 2021 are included in other current liabilities on the 
Consolidated Balance Sheets. 

Finance Leases
Lease assets:

Property, plant and equipment, net

Lease liabilities:

Current portion of long-term debt
Long-term debt

Total finance lease liabilities

2022

2021

$

$

$

4.0 $

1.3 $
1.9
3.2 $

5.3

1.4
2.9
4.3

70

Note 11 - Leasing (continued)

Future minimum lease payments under non-cancellable leases at December 31, 2022 were as follows:

Operating Leases

Finance Leases

Year Ending December 31,
2023
2024
2025

2026

2027
Thereafter

Total future minimum lease payments

Less: imputed interest

Total

$

$

$

27.0
18.6
15.2

11.4

9.5
17.9
99.6
(10.3)
89.3

$

$

$

1.4
0.9
0.6

0.3

0.1
—
3.3
(0.1)
3.2

The following tables present lease assets added for the periods ended December 31, 2022 and 2021:

Lease assets added in the period:

Operating leases
Finance leases

2022

2021

$

$

22.1
0.9

22.9
1.2

The following tables present other information related to leases at December 31, 2022 and 2021:

Weighted-average remaining lease term:

Operating leases
Finance leases

Weighted-average discount rate:

Operating leases
Finance leases

2022

2021

5.4 years
2.8 years

3.55%
3.07%

5.4 years
2.9 years

3.30%
2.71%

71

Note 12 - Financing Arrangements 

Short-term debt as of December 31, 2022 and 2021 was as follows:

Borrowings under lines of credit for certain of the Company’s foreign subsidiaries with 
various banks with interest rates ranging from 2.38% to 5.50% at December 31, 2022 
and 0.50% to 2.00% at December 31, 2021
Short-term debt

2022

2021

46.3
46.3

$

42.6
42.6

$

The lines of credit for certain of the Company’s foreign subsidiaries provide for short-term borrowings up to $234.2 
million in the aggregate. Most of these lines of credit are uncommitted. At December 31, 2022, the Company’s foreign 
subsidiaries  had  borrowings  outstanding  of  $46.3  million  and  bank  guarantees  of  $2.8  million,  which  reduced  the 
aggregate  availability  under  these  facilities  to  $185.1  million. The  weighted-average  interest  rate  on  these  lines  of 
credit during the year were 1.4%, 0.8% and 0.6% in 2022, 2021 and 2020, respectively. The increase in the weighted-
average interest rate was primarily due to higher borrowing rates. The weighted-average interest rate on lines of credit 
outstanding at December 31, 2022 and 2021 was 1.4% and 0.6%, respectively.

Long-term debt as of December 31, 2022 and 2021 was as follows:

Variable-rate Senior Credit Facility with an average interest rate on U.S. Dollar of 5.10% 
and Euro of 2.21% at December 31, 2022 and 1.09% and 1.00%, respectively, at 
December 31, 2021  
Variable-rate Accounts Receivable Facility, with an interest rate of 5.01% at 
December 31, 2022.
Variable-rate Term Loan(1), maturing on December 5, 2027, with an interest rate  
of 5.55% at December 31, 2022 and of 1.23% at December 31, 2021
Fixed-rate Senior Unsecured Notes(1), maturing on September 1, 2024, with an interest 
rate of 3.875%
Fixed-rate Euro Senior Unsecured Notes(1), maturing on September 7, 2027, with  
an interest rate of 2.02%
Fixed-rate Senior Unsecured Notes(1), maturing on December 15, 2028, with an interest 
rate of 4.50%
Fixed-rate Medium-Term Notes, Series A(1), maturing at various dates through  
May 2028, with interest rates ranging from 6.74% to 7.76%
Fixed-rate Senior Unsecured Notes(1), maturing on April 1, 2032, with an interest rate of 
4.125%
Fixed-rate Euro Bank Loan, maturing on June 30, 2033, with an interest rate of 2.15% 
Other

Total debt
Less current maturities

Long-term debt

(1) Net of discount and fees

2022

2021

$

8.5

$

85.0

9.0

—

399.1

321.1

349.8

349.5

160.4

170.3

397.2

396.9

154.8

154.7

342.1
13.6
6.4
1,916.9
2.7
1,914.2

—
15.8
5.0
$ 1,422.3
11.2
$ 1,411.1

$

$

The  Company  has  a  $100.0  million Accounts  Receivable  Facility  that  matures  on  November  30,  2024.  Under  the 
terms of the Accounts Receivable Facility, the Company sells, on an ongoing basis, certain domestic trade receivables 
to Timken Receivables Corporation, a wholly owned consolidated subsidiary that, in turn, uses the trade receivables 
to  secure  borrowings  that  are  funded  through  a  vehicle  that  issues  commercial  paper  in  the  short-term  market. 
Borrowings  under  the  Accounts  Receivable  Facility  may  be  limited  to  certain  borrowing  base  limitations.  These 
limitations reduced the availability of the Accounts Receivable Facility to $86.7 million at December 31, 2022. As of 
December 31, 2022, there were $85.0 million outstanding borrowings under the Accounts Receivable Facility, which 
reduced the availability under this facility to $1.7 million. The cost of this facility, which is the prevailing commercial 
paper rate plus facility fees, is considered a financing cost and is included in interest expense in the Consolidated 
Statements of Income. The interest rate was 5.0%, 0.9% and 1.0% at December 31, 2022, 2021 and 2020, respectively.

72

Note 12 - Financing Arrangements (continued)

On December 5, 2022, the Company entered into the Credit Agreement, which is comprised of the $750.0 million 
Senior Credit Facility and $400.0 million 2027 Term Loan that mature on December 5, 2027. The Credit Agreement 
amended and restated the Company’s previous revolving credit agreement, dated as of June 25, 2019, and replaced 
the $350.0 million 2023 Term Loan that was set to mature on September 11, 2023. At December 31, 2022, the Senior 
Credit Facility had outstanding borrowings of $8.5 million, which reduced the availability under this facility to $741.5 
million. The Credit Agreement has two financial covenants: a consolidated leverage ratio and a consolidated interest 
coverage ratio.

On March 28, 2022, the Company issued the 2032 Notes in the aggregate principal amount of $350.0 million with 
an interest rate of 4.125%, maturing on April 1, 2032. Proceeds from the 2032 Notes were used for general corporate 
purposes,  which  included  repayment  of  borrowings  under  the  Senior  Credit  Facility  and  the Accounts  Receivable 
Facility outstanding at the time of issuance. In addition, a portion of the proceeds from the 2032 Notes was used to 
fund the Spinea acquisition, which closed in the second quarter of 2022.

At December 31, 2022, the Company was in full compliance with all applicable covenants on its outstanding debt.

In the ordinary course of business, the Company utilizes standby letters of credit issued by financial institutions to 
guarantee certain obligations, most of which relate to insurance contracts. At December 31, 2022, outstanding letters 
of credit totaled $50.2 million, primarily having expiration dates within 12 months.

The maturities of long-term debt (including $3.2 million of finance leases) for the years subsequent to December 31, 
2022 are as follows:

Year
2023
2024
2025
2026
2027
Thereafter

$

2.7
442.0
26.6
51.4
529.0
877.1

Interest  paid  was  $72.5  million  in  2022,  $56.5  million  in  2021  and  $65.2  million  in  2020. This  differs  from  interest 
expense due to the timing of payments, the amortization of deferred financing fees and interest capitalized of $1.0 
million in 2022, $2.6 million in 2021 and $1.5 million in 2020.

73

Note 13 - Contingencies 

The Company and certain of its subsidiaries have been identified as potentially responsible parties for investigation 
and remediation under the Comprehensive Environmental Response, Compensation and Liability Act, known as the 
Superfund,  or  similar  state  laws  with  respect  to  certain  sites.  Claims  for  investigation  and  remediation  have  been 
asserted against numerous other entities, which are believed to be financially solvent and are expected to fulfill their 
proportionate share of the obligation.

On December 28, 2004, the United States Environmental Protection Agency (“USEPA”) sent Lovejoy, Inc. (“Lovejoy”) 
a  Special  Notice  Letter  that  identified  Lovejoy  as  a  potentially  responsible  party,  together  with  at  least  14  other 
companies, at the Ellsworth Industrial Park Site in Downers Grove, DuPage County, Illinois (the “Site”). The Company 
acquired Lovejoy in 2016. Lovejoy’s Downers Grove property is situated within the Ellsworth Industrial Complex. The 
USEPA and the Illinois Environmental Protection Agency (“IEPA”) allege there have been one or more releases or 
threatened releases of hazardous substances, allegedly including, but not limited to, a release or threatened release 
on or from Lovejoy’s property, at the Site. The relief sought by the USEPA and IEPA includes further investigation and 
potential remediation of the Site and reimbursement of response costs. Lovejoy’s allocated share of past and future 
costs related to the Site, including for investigation and/or remediation, could be significant. All previously pending 
property damage and personal injury lawsuits against Lovejoy related to the Site were settled or dismissed prior to 
our acquisition of Lovejoy.

The  Company  had  total  environmental  accruals  of  $4.8  million  and  $6.0  million  for  various  known  environmental 
matters that are probable and reasonably estimable as of December 31, 2022 and 2021, respectively, which includes 
the  Lovejoy  matter  discussed  above. These  accruals  were  recorded  based  upon  the  best  estimate  of  costs  to  be 
incurred in light of the progress made in determining the magnitude of remediation costs, the timing and extent of 
remedial actions required by governmental authorities and the amount of the Company’s liability in proportion to other 
responsible parties. 

Product Warranties:
In  addition  to  the  contingencies  above,  the  Company  provides  limited  warranties  on  certain  of  its  products.  The 
product  warranty  liability  included  in  “Other  current  liabilities”  on  the  Consolidated  Balance  Sheets  for  2022  and 
2021 was $23.5 million and $11.7 million, respectively. The balances at the end of each respective period represent 
the best estimates of costs for future claims for products that are still under warranty. The increase in the liability for 
2022 primarily relates to additional accruals for certain products sold into the automotive and wind energy sectors. 
Accrual estimates are based on actual claims and expected trends that continue to mature. The Company is currently 
evaluating claims raised by certain customers with respect to the performance of bearings sold into the wind energy 
sector.  Management  believes  that  the  outcome  of  these  claims  will  not  have  a  material  effect  on  the  Company’s 
consolidated financial position; however, the effect of any such outcome may be material to the results of operations 
of any particular period in which costs in excess of amounts provided, if any, are recognized. 

The following is a rollforward of the consolidated product warranty accrual at December 31, 2022 and December 31, 
2021, respectively:

Beginning balance, January 1

Expense
Payments

Ending balance

December 31, 
2022

December 31, 
2021

$

$

$

11.7
14.7
(2.9)

23.5

$

9.4
10.1
(7.8)

11.7

74

Note 14 - Stock Compensation 

Under  its  long-term  incentive  plan,  the  Company’s  common  shares  have  been  made  available  for  grant,  at  the 
discretion of the Compensation Committee of the Board of Directors, to officers, directors and other key employees. 
Grants can take the form of performance- or time-based restricted stock units, deferred shares and stock options. 
A summary of the awards granted in 2022 is presented below:

Performance-based restricted stock units
Time-based restricted stock units
Deferred shares

Expected to be 
Settled in Equity
194,875
155,470
  19,500

Expected to be 
Settled in Cash
8,755
5,845
—

Total Awards 
Granted

203,630
161,315
  19,500

Performance-based  restricted  stock  units  are  calculated  and  awarded  based  on  the  achievement  of  specified 
performance objectives and cliff vest three years from the date of grant. Time-based restricted stock units generally 
vest in 25% increments annually beginning on the first anniversary of the grant. Deferred shares generally cliff vest 
in a range of one to five years from the date of grant. For time-based restricted stock units that are expected to settle 
in cash, the Company had $2.9 million and $0.9 million accrued in salaries, wages and benefits as of December 31, 
2022 and 2021, respectively, on the Consolidated Balance Sheets.

A summary of stock award activity, including performance-based restricted stock units, time-based restricted stock 
units and deferred shares that will settle in common shares for the year ended December 31, 2022 is as follows:

Outstanding - beginning of year

Granted - new awards
Adjusted for performance results achieved (1)
Vested
Canceled or expired
Outstanding - end of year

Number of 
Shares
993,971
369,845
(12,836)
(386,594)
(26,415)
937,971

Weighted-average 
Grant Date Fair Value
56.06
$
66.49
42.60
48.33
64.13
63.61

$

(1)  Adjustments for the number of shares vested under the 2019 awards at the end of the three-year period ended December 31, 2021 being slightly 
lower than the target number of shares.

As of December 31, 2022, a total of 937,971 stock awards have been awarded that have not yet vested. The Company 
distributed shares totaling 386,594 in 2022, 577,948 in 2021 and 557,590 in 2020 due to the vesting of stock awards. 
The grant date fair value of these vested shares was $18.7 million, $25.5 million and $24.4 million, respectively. The 
Company  recognized  compensation  expense  of  $29.3  million,  $18.2  million  and  $19.6  million  for  the  years  ended 
December 31, 2022, 2021 and 2020, respectively, relating to performance-based restricted stock units, time-based 
restricted stock units, deferred shares and restricted shares.

In addition to performance-based restricted stock units, time-based restricted stock units and deferred shares, the 
Company has granted stock option awards to officers and key employees. Stock options typically have a ten-year 
term and generally vest in 25% increments beginning annually on the first anniversary date of grant.

75

Note 14 - Stock Compensation (continued)

During  2022,  2021  and  2020,  the  Company  recognized  stock-based  compensation  expense  of  $1.1  million,  $2.0 
million and $3.6 million, respectively, for stock option awards.

Beginning in 2020, the Company discontinued the use of nonqualified stock options. As such, there were no stock 
option awards granted in 2022, 2021 or 2020.

A summary of stock option award activity for the year ended December 31, 2022 is presented below:

Outstanding - beginning of year

Exercised
Canceled or expired
Outstanding - end of year
Options expected to vest
Options exercisable

Number of 
Shares
1,217,945
(295,695)
(940)
921,310
921,310
810,445

Weighted-average 
Exercise Price

Weighted-average 
Remaining 
Contractual Term

Aggregate 
Intrinsic Value 
(millions)

$

$

41.59
41.54
43.44
41.61
41.61
41.37

$

6 years
6 years
6 years

26.8
26.8
23.7

The total intrinsic value of stock option awards exercised during the years ended December 31, 2022, 2021 and 2020 
was $7.3 million, $29.4 million and $20.7 million, respectively. Net cash proceeds from the exercise of stock option 
awards were $8.5 million, $26.0 million and $37.4 million, respectively.

As of December 31, 2022, the Company had unrecognized compensation expense of $32.1 million related to stock 
options and stock awards, which is expected to be recognized over a total weighted-average period of two years. 
There were 4.3 million shares available for future grants for all plans at December 31, 2022.

76

Note 15 - Impairment and Restructuring Charges 

Impairment and restructuring charges by segment were as follows:

Year ended December 31, 2022:

Impairment charges
Severance and related benefit costs
Exit costs
Total

Year ended December 31, 2021:

Impairment charges
Severance and related benefit costs
Exit costs
Total

Year ended December 31, 2020:

Impairment charges
Severance and related benefit costs
Exit costs
Total

Mobile 
Industries

Process 
Industries

Unallocated 
Corporate

Total

38.3 $
3.8
1.5
43.6 $

— $
0.4
0.1
0.5 $

— $
—
—
— $

Mobile 
Industries

Process 
Industries

Unallocated 
Corporate

Total

1.1 $
1.7
1.4
4.2 $

3.4 $
0.9
0.4
4.7 $

— $
—
—
— $

Mobile 
Industries

Process 
Industries

Unallocated 
Corporate

Total

0.2 $
8.2
0.6
9.0 $

0.2 $
11.0
0.6
11.8 $

— $
0.4
—
0.4 $

$

$

$

$

$

$

38.3
4.2
1.6
44.1

4.5
2.6
1.8
8.9

0.4
19.6
1.2
21.2

The following discussion explains the major impairment and restructuring charges recorded for the periods presented; 
however, it is not intended to reflect a comprehensive discussion of all amounts in the tables above.

Mobile Industries: 
In  2022,  the  Company  classified  the ADS  business  as  assets  held  for  sale  and  recorded  impairment  charges  of 
$29.3 million. The Company subsequently completed the sale of the ADS business on November 1, 2022. In addition, 
the Company recorded impairment charges of $9.0 million related to certain assets of its joint venture in Russia. As a 
result of Russia’s invasion of Ukraine (and associated sanctions), the Company suspended its operations in Russia.

On July 19, 2021, the Company announced the closure of its bearing manufacturing facility in Villa Carcina, Italy. The 
Company transferred the manufacturing of its single-row tapered roller bearing production to other bearing facilities 
in Europe, Asia and the United States. The Company completed the closure of the facility on October 31, 2022, and 
it affected approximately 110 employees. The Company expected to incur approximately $9 million to $11 million of 
expenses related to this closure. During 2022, the Company recorded severance and related benefits of $1.4 million 
and  exit  costs  of  $1.6  million  related  to  this  closure.  During  2021,  the  Company  recorded  impairment  charges  of 
$1.0 million, severance and related benefit costs of $1.8 million and exit costs of $1.1 million related to this closure. 
The exit costs recognized in 2022 and 2021 primarily related to environmental remediation. The Company incurred 
cumulative  pretax  costs  related  to  this  closure  of  $9.9  million  as  of  December  31,  2022,  including  rationalization 
costs recorded in cost of products sold. On November 1, 2022, the Company completed the sale of this facility and 
recognized a pretax gain of $3.6 million.

77

Note 15 - Impairment and Restructuring Charges (continued)

On October 16, 2019, the Company announced the reorganization of its bearing plant in Gaffney, South Carolina. The 
Company transferred its high-volume bearing production and roller production to other Timken manufacturing facilities in the 
U.S. The transfer of these operations was completed by the end of the fourth quarter of 2021, and it affected approximately 
150 employees. The Company expected to incur approximately $8 million to $10 million of pretax costs in total related to 
this reorganization. During 2020, the Company recognized severance and related benefits of $0.3 million and exit costs of 
$0.4 million related to this reorganization. The Company has incurred cumulative pretax costs related to this reorganization 
of $7.9 million as of December 31, 2022, including rationalization costs recorded in cost of products sold.

On January 16, 2023, the Company announced the closure of its bearing plant, mentioned above, in Gaffney, South 
Carolina. The Company expects to transfer its remaining operations to other Timken manufacturing facilities in North 
America. The closure of this facility is expected to occur by the end of the fourth quarter of 2023 and is expected 
to affect approximately  225 employees. The Company  expects to incur approximately  $10 million  to $12  million  of 
pretax costs in total related to this closure. During 2022, the Company recognized severance and related benefits  
of $0.9 million under an ongoing benefit arrangement related to this closure.

Process Industries:
On February 4, 2020, the Company announced the closure of its chain plant in Indianapolis, Indiana. This plant was part of 
the Diamond Chain acquisition completed on April 1, 2019. The Company will be transferring the manufacturing of its Diamond 
Chain product line to its chain facility in Fulton, Illinois. The chain plant is expected to cease operations by the end of the 
first quarter of 2023 and is expected to affect approximately 240 employees. The Company expects to hire approximately 
130 full-time positions in Fulton, Illinois and expects to incur approximately $12 million to $15 million of expenses related 
to  this  closure.  During  2021  and  2020,  the  Company  recorded  severance  and  related  benefit  costs  of  $1.2 million  and 
$3.1 million related to this closure, respectively. The Company has incurred cumulative pretax costs related to this closure of 
$14.0 million as of December 31, 2022, including rationalization costs recorded in cost of products sold.

In addition, the Company recorded impairment charges of $3.4 million related to certain engineering-related assets 
used in the business during the year ended December 31, 2021. Management concluded no further investment would 
be made in these assets and as a result, reduced the value to zero.

COVID-19 Pandemic Cost Reduction Initiatives:
During 2020, the Company recorded severance and related benefit costs of $12.0 million to eliminate approximately 
200  salaried  positions  to  align  current  employment  levels  with  customer  demand.  Of  the  $12.0  million  charge, 
$5.8  million  related  to  the  Mobile  Industries  segment,  $5.8  million  related  to  the  Process  Industries  segment  and 
$0.4 million related to Unallocated Corporate.

Consolidated Restructuring Accrual: 
The following is a rollforward of the consolidated restructuring accrual for the years ended December 31, 2022 and 2021:

Beginning balance, January 1

Expense
Payments

Ending balance, December 31

2022

2021

$

7.0
5.8
(9.7)

3.1

$

8.0
4.4
(5.4)

7.0

$

$

The restructuring accrual at December 31, 2022 and 2021 is included in other current liabilities on the Consolidated 
Balance Sheets. 

78

Note 16 - Retirement Benefit Plans 

The Company and its subsidiaries sponsor a number of defined benefit pension plans, which cover eligible employees, 
including certain employees in foreign countries. These plans generally are noncontributory. Pension benefits earned 
generally are based on years of service and compensation during active employment. The cash contributions and 
payments  for  the  Company’s  defined  benefit  pension  plans  were  $11.2  million,  $20.4  million  and  $17.9  million  in 
2022, 2021 and 2020, respectively. The 2021 contributions and payments included a $10 million payout of deferred 
compensation to a former executive officer of the Company.

The following tables summarize the net periodic benefit cost information and the related assumptions used to measure 
the net periodic benefit cost for the years ended December 31:

U.S. Plans

International Plans

2022

2021

2020

2022

2021

2020

Components of net periodic benefit cost:

Service cost

Interest cost

Expected return on plan assets

Amortization of prior service cost

Recognition of net actuarial losses (gains)

Curtailment losses

$

6.9 $

9.5 $

10.7 $

1.6 $

17.7

(18.9)

1.2

22.6

—

17.6

(23.2)

1.2

13.9

—

21.0

(25.3)

1.6

(3.9)

0.9

5.7

(9.3)

0.1

(6.6)

—

2.0 $

4.4

(10.2)

0.2

(9.5)

—

Net periodic benefit cost (credit)

$

29.5 $

19.0 $

5.0 $

(8.5) $

(13.1) $

1.8

5.5

(8.7)

0.2

20.1

—

18.9

Assumptions

U.S. Plans:

Discount rate

2022

2021

2020

3.03% to 4.95%

2.71% to 2.91%

3.04% to 3.55%

Future compensation assumption

2.50% to 3.50%

2.50%

2.50%

Expected long-term return on plan assets

4.35% to 5.65%

4.15% to 4.90%

4.50% to 6.25%

International Plans:

Discount rate

1.00% to 9.50%

0.25% to 7.75%

0.75% to 9.00%

Future compensation assumption

2.10% to 8.00%

1.90% to 8.18%

2.00% to 8.20%

Expected long-term return on plan assets

2.00% to 8.90%

2.00% to 9.00%

1.75% to 9.00%

The following table summarizes assumptions used to measure the benefit obligation for the defined benefit pension 
plans at December 31:

Assumptions

U.S. Plans:

Discount rate

Future compensation assumption

International Plans:

Discount rate

Future compensation assumption

2022

2021

5.62% to 5.74%

3.03% to 3.09%

2.50%

2.50% to 3.50% 

3.70% to 10.70%

1.00% to 9.50%

2.80% to 10.00%

2.10% to 8.00%

79

 
Note 16 - Retirement Benefit Plans (continued)

The  Company  recognized  actuarial  losses  of  $16.0  million  during  2022  primarily  due  to  the  impact  of  lower  than 
expected returns on plan assets of $220.6 million, the impact of experience losses of $33.0 million, the impact of 
inflation  of  $5.4  million  and  other  actuarial  losses  of  $0.2  million,  partially  offset  by  the  favorable  impact  of  a  net 
increase in the discount rate used to measure its defined benefit pension obligations of $243.2 million. The impact 
of  the  net  increase  in  the  discount  rate  used  to  measure  the  Company’s  defined  benefit  pension  obligations  was 
primarily driven by a 257 basis point increase in the weighted-average discount rate used to measure its U.S. plan 
obligations, which increased from 3.07% in 2021 to 5.64% in 2022 and a 301 basis point increase in the discount rate 
used to measure its U.K. plan obligations, which increased from 1.80% in 2021 to 4.81% in 2022.

The  Company  recognized  actuarial  losses  of  $4.4  million  during  2021  primarily  due  to  the  impact  of  lower  than 
expected returns on plan assets of $28.4 million, the impact of experience losses of $9.3 million, the impact of inflation 
of  $8.5  million  and  other  changes  in  actuarial  assumptions  of  $3.2  million,  partially  offset  by  the  favorable  impact 
of a net increase in the discount rate used to measure its defined benefit pension obligations of $45.0 million. The 
impact of the net increase in the discount rate used to measure the Company’s defined benefit pension obligations 
was primarily driven by a 55 basis point increase in the discount rate used to measure its U.K. plan obligations, which 
increased from 1.25% in 2020 to 1.80% in 2021, and a 23 basis point increase in the weighted-average discount rate 
used to measure its U.S. plan obligations, which increased from 2.84% in 2020 to 3.07% in 2021.

The Company recognized actuarial losses of $16.2 million during 2020 primarily due to the impact of a net reduction in 
the discount rate used to measure its defined benefit pension obligations of $88.0 million and the impact of experience 
losses  of  $16.9  million,  partially  offset  by  higher  than  expected  returns  on  plan  assets  of  $84.3  million  and  other 
changes in valuation assumptions of $4.4 million. The impact of the net reduction in the discount rate used to measure 
the Company’s defined benefit pension obligations was primarily driven by a 66 basis point reduction in the weighted-
average discount rate used to measure its U.S. plan obligations, which decreased from 3.50% in 2019 to 2.84% in 2020.

For expense purposes in 2022, the Company applied a weighted-average discount rate of 3.07% to its U.S. defined 
benefit pension plans. For expense purposes in 2023, the Company will apply a weighted-average discount rate of 
5.64% to its U.S. defined benefit pension plans. 

For expense purposes in 2022, the Company applied a weighted-average expected rate of return of 4.84% for the 
Company’s U.S. pension plan assets. For expense purposes in 2023, the Company will apply a weighted-average 
expected rate of return on plan assets of 4.43%. 

80

Note 16 - Retirement Benefit Plans (continued)

The following tables set forth the change in benefit obligation, change in plan assets, funded status and amounts 
recognized  on  the  Consolidated  Balance  Sheets  for  the  defined  benefit  pension  plans  as  of  December  31,  2022 
and 2021:

Change in benefit obligation:
Benefit obligation at beginning of year

Service cost
Interest cost
Plan amendments
Actuarial gains
International plan exchange rate change
Benefits paid
Acquisitions

Benefit obligation at end of year

Change in plan assets:
Fair value of plan assets at beginning of year

Actual return on plan assets
Company contributions / payments
International plan exchange rate change
Benefits paid

Fair value of plan assets at end of year
Funded status at end of year

Amounts recognized on the Consolidated Balance Sheets:
Non-current assets
Current liabilities
Non-current liabilities

Amounts recognized in accumulated other comprehensive 

loss (income):
Net prior service cost

Accumulated other comprehensive loss (income)

Changes in prior service cost recognized in accumulated 
other comprehensive loss (income):
Accumulated other comprehensive loss (income) at 

beginning of year

Prior service cost
Recognized prior service cost
Foreign currency impact

U.S. Plans

2022

2021

International Plans
2021
2022

$

$

$

$

$

$

$
$

$

566.3
6.9
17.7
—
(116.4)
—
(139.2)
—
335.3

$

$

$

455.7
(120.1)
5.2
—
(139.2)
201.6
(133.7) $

663.1
9.5
17.6
—
(4.4)
—
(119.5)
—
566.3

$

$

$

553.3
4.9
17.0
—
(119.5)
455.7
(110.6) $

343.1
1.6
5.7
—
(88.2)
(32.6)
(14.7)
3.2
218.1

$

$

$

296.8
(72.3)
6.0
(30.3)
(14.7)
185.5
(32.6) $

— $

(4.8)
(128.9)
(133.7) $

$

1.1
(4.9)
(106.8)
(110.6) $

$

0.3
(1.5)
(31.4)
(32.6) $

$
$

$

0.3
0.3

1.5
—
(1.2)
—

$
$

$

1.5
1.5

2.7
—
(1.2)
—

$
$

$

3.6
3.6

4.2
—
(0.1)
(0.5)

379.7
2.0
4.4
0.5
(19.6)
(8.7)
(15.2)
—
343.1

312.8
0.1
3.4
(4.3)
(15.2)
296.8
(46.3)

3.9
(1.4)
(48.8)
(46.3)

4.2
4.2

3.9
0.5
(0.2)
—

Total recognized in accumulated other comprehensive 

loss (income) at December 31

$

0.3

$

1.5

$

3.6

$

4.2

81

Note 16 - Retirement Benefit Plans (continued)

The  presentation  in  the  above  tables  for  amounts  recognized  in  accumulated  other  comprehensive  loss  on  the 
Consolidated Balance Sheets is before the effect of income taxes. 

Defined benefit pension plans in the U.S. represent 61% of the benefit obligation and 52% of the fair value of plan 
assets as of December 31, 2022.

Certain  of  the  Company’s  defined  benefit  pension  plans  were  overfunded  as  of  December  31,  2022. As  a  result, 
$0.3 million and $5.0 million at December 31, 2022 and 2021, respectively, are included in other non-current assets 
on  the  Consolidated  Balance  Sheets.  The  current  portion  of  accrued  pension  benefits,  which  was  included  in 
salaries, wages and benefits on the Consolidated Balance Sheets, was $6.3 million at December 31, 2022 and 2021, 
respectively. In 2022, the current portion of accrued pension benefits relates to unfunded plans and represents the 
actuarial present value of expected payments related to the plans to be made over the next 12 months.

The accumulated benefit obligation at December 31, 2022 exceeded the market value of plan assets for several of 
the Company’s pension plans. For these plans, the projected benefit obligation was $544.2 million, the accumulated 
benefit obligation was $539.9 million and the fair value of plan assets was $378.0 million at December 31, 2022.

The total accumulated benefit obligation for all plans was $546.0 million and $897.6 million at December 31, 2022 and 
2021, respectively.

Investment  performance  decreased  the  value  of  the  Company’s  pension  assets  by  26.7%  in  2022  largely  due  to 
increases in bond rates.

As of December 31, 2022, 2021 and 2020, the Company’s defined benefit pension plans did not directly hold any of 
the Company’s common shares.

Plan Assets:

The Company’s target allocation for pension plan assets, as well as the actual pension plan asset allocations as of 
December 31, 2022 and 2021, was as follows:

Asset Category
Equity securities
Fixed income securities
Other investments

Total

Current Target 
Allocation

16% to
72% to
to
2%

22%
82%
6%

Percentage of Pension Plan 
Assets at December 31,
2021
2022

18%
77%
5%
100%

19%
78%
3%
100%

The Company recognizes its overall responsibility to ensure that the assets of its various defined benefit pension plans 
are managed effectively and prudently and in compliance with its policy guidelines and all applicable laws. Preservation 
of capital is important; however, the Company also recognizes that appropriate levels of risk are necessary to allow 
its  investment  managers  to  achieve  satisfactory  long-term  results  consistent  with  the  objectives  and  the  fiduciary 
character of the pension funds. Asset allocations are established in a manner consistent with projected plan liabilities, 
benefit payments and expected rates of return for various asset classes, and are reviewed regularly by management. 
The expected rate of return for the investment portfolio is based on expected rates of return for various asset classes, 
as well as historical asset class and fund performance.

82

Note 16 - Retirement Benefit Plans (continued)

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly 
transaction between market participants at the measurement date (exit price). The FASB provides accounting rules 
that classify the inputs used to measure fair value into the following hierarchy:

Level 1 -

Level 2 -

Unadjusted quoted prices in active markets for identical assets or liabilities.

Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted 
quoted prices for identical or similar assets or liabilities in markets that are not active, or 
inputs other than quoted prices that are observable for the asset or liability.

Level 3 -

Unobservable inputs for the asset or liability.

The following table presents the fair value hierarchy for those investments of the Company’s pension assets measured 
at fair value on a recurring basis:

December 31, 2022

December 31, 2021

Level 1

Level 2

Level 3

Total

Level 1

Level 2

Level 3

Total

Assets:

Cash and cash equivalents

$

22.9 $

— $

— $

13.8 $

— $

— $

Government and agency securities

Corporate bonds - investment grade

Equity securities - U.S. companies

Common collective funds - fixed income

Mutual funds - fixed income

Mutual funds - international equity

10.7

—

0.1

29.9

31.6

21.5

0.9

31.5

—

—

—

—

$ 116.7 $

32.4 $

Investments measured at net asset value:

Equity securities - international companies

Common collective funds - domestic equities

Common collective funds - international equities

Common collective funds - fixed income

Common collective funds - diversified growth

Limited partnerships

Real estate partnerships

Other liability-driven investments

Other assets

Total Assets

22.9 $
11.6

31.5

0.1

29.9

31.6

22.7

—

—

42.5

51.8

—

—

—

—

—

21.5

—
— $ 149.1 $ 171.8 $

41.0

$

0.4

19.9

17.5

82.6

12.1

6.8

5.2

68.6

24.9

2.7

82.7

—

—

—

—

—

—

—

—

—

—

13.8

25.4

82.7

—

42.5

51.8

41.0

85.4 $

— $ 257.2

$

0.3

45.9

33.6

216.6

18.5

10.4

6.6

138.1

25.3

$ 387.1

$ 752.5

International investments measured at net asset value totaled $155.0 million and $253.5 million at December 31, 2022 
and 2021, respectively.

Cash and cash equivalents are valued at redemption value. Government and agency securities are valued at the closing 
price  reported  in  the  active  market  in  which  the  individual  securities  are  traded.  Certain  corporate  bonds  are  valued 
at  the  closing  price  reported  in  the  active  market  in  which  the  bond  is  traded.  Equity  securities  (both  common  and 
preferred stock) are valued at the closing price reported in the active market in which the individual security is traded. 
Common collective funds are valued based on a net asset value per share. Mutual funds classified as Level 1 assets 
include  investments  in  fixed  income  and  international  equities. These  investments  are  comprised  of  securities  listed 
on exchange, market, or automated quotation systems, for which active, quoted prices are available. Mutual funds are 
valued based on a net asset value per share for shares held at year end, as determined by the closing price reported on 
the active market on which the individual securities are traded, or a pricing vendor or the fund family if an active market is 
not available. Asset-backed securities are valued based on quoted prices for similar assets in active markets. When such 
prices are unavailable, the plan trustee determines a valuation from the market maker dealing in the particular security. 

83

Note 16 - Retirement Benefit Plans (continued)

Limited partnerships include investments in funds that invest primarily in private equity, venture capital and distressed 
debt. Limited partnerships are valued based on the ownership interest in the net asset value of the investment, which 
is used as a practical expedient to fair value, per the underlying investment fund, which is based upon the general 
partner’s own assumptions about the assumptions a market participant would use in pricing the assets and liabilities 
of the partnership. Real estate investments include funds that invest in companies that primarily invest in commercial 
and residential properties, commercial mortgage-backed securities, debt and equity securities of real estate operating 
companies,  and  real  estate  investment  trusts.  Other  real  estate  investments  are  valued  based  on  the  ownership 
interest in the net asset value of the investment, which is used as a practical expedient to fair value per the underlying 
investment fund, which is based on appraised values and current transaction prices. 

Other  liability-driven  investments  mainly  include  investments  in  index-linked  open-end  swap  funds.  These  funds 
invest in cash held deposits that reflect the index-linked deferred annuity with payment terms of specific years linked 
to UK inflation measures. The underlying assets in this investment are valued daily.

Common collective funds - diversified growth investments are pooled funds that invest in a multiple underlying asset 
classes, such as equities, fixed income, commodities, alternative investments, and cash in an effort to achieve returns 
on investment through capital appreciation and income. The underlying assets in this investment are valued daily.

Cash Flows:

Employer Contributions to Defined Benefit Plans
2021
2022
2023 (estimated)

$ 

20.4
11.2
25.0

Estimated future benefit payments, including estimated lump sum distributions, are expected to be as follows:

Benefit Payments
2023
2024
2025
2026
2027
2028-2032

$ 

49.6
43.0
44.0
45.3
42.7
203.3

Employee Savings Plans:
The  Company  sponsors  defined  contribution  retirement  and  savings  plans  covering  substantially  all  employees  in 
the  United  States  and  employees  at  certain  non-U.S.  locations.  The  Company  made  contributions  to  its  defined 
contribution  plans  of  $29.4  million,  $27.3  million  and  $27.1  million  in  2022,  2021  and  2020,  respectively.  Effective 
January 1, 2019, the primary U.S. Company sponsored defined contribution plan no longer allowed contributions to 
be made to the Company stock fund in order to align with industry trends to remove investments in company stock 
as an option in a company sponsored defined contribution plan. All participants in this plan were instructed to transfer 
remaining funds in the Company stock fund to other fund options by December 31, 2022. At December 31, 2022, the 
plans held 682,831 of the Company’s common shares with a fair value of $48.3 million. These remaining common 
shares were fully transferred out of the Company stock fund in January 2023. The Company paid dividends totaling 
$1.0 million, $1.2 million and $1.5 million in 2022, 2021 and 2020, respectively, to plans to be disbursed to participant 
accounts holding the Company’s common shares. 

84

Note 17 - Other Postretirement Benefit Plans 

The Company and its subsidiaries sponsor several postretirement plans that provide health care and life insurance 
benefits  for  eligible  retirees  and  dependents.  Depending  on  retirement  date  and  employee  classification,  certain 
health care plans contain contribution and cost-sharing features such as deductibles, coinsurance and limitations on 
employer-provided subsidies. The remaining health care and life insurance plans are noncontributory.

The following tables summarize the net periodic benefit cost information and the related assumptions used to measure 
the net periodic benefit cost for the years ended December 31:

Components of net periodic credit:
Service cost
Interest cost
Expected return on plan assets
Amortization of prior service credit
Recognition of net actuarial (gains) losses
Net periodic credit:

Assumptions:
Discount rate
Rate of return

2022

2021

2020

$

$

$

0.2
1.4
—
(10.1)
(13.1)
(21.6) $

$

0.2
1.5
—
(10.1)
(4.1)
(12.5) $

0.2
2.1
(0.4)
(9.8)
1.4
(6.5)

2022

2021

2020

2.99%
—%

2.62%
—%

3.43%
3.00%

The  following  table  summarizes  assumptions  used  to  measure  the  benefit  obligation  for  the  other  postretirement 
benefit plans at December 31:

Assumptions:
Discount rate

2022

2021

5.75%

2.99%

The  Company  recognized  actuarial  gains  of  $13.1  million  during  2022  primarily  due  to  the  impact  of  a  276  basis 
point increase in the discount rate used to measure the Company’s defined benefit postretirement obligations, which 
increased from 2.99% in 2021 to 5.75% in 2022. The increase in the discount rate resulted in a $8.4 million gain. In 
addition to the gain from the discount rate increases, the Company recognized actuarial gains of $3.0 million due to 
the impact of a reduction in the rate for Medicare Advantage plans and $1.9 million due to lower than expected benefit 
payments. These actuarial gains were offset $0.2 million of changes to other assumptions.

The Company recognized actuarial gains of $4.1 million during 2021 primarily due to the impact of a 37 basis point 
increase  in  the  discount  rate  used  to  measure  the  Company’s  defined  benefit  postretirement  obligations,  which 
increased from 2.62% in 2020 to 2.99% in 2021. The increase in the discount rate resulted in a $1.6 million gain. In 
addition to the gain from the discount rate increases, the Company recognized actuarial gains of $1.1 million due to 
lower than expected benefit payments, $1.0 million due to the impact of a reduction in the rate for Medicare Advantage 
plans and $0.4 million due to changes in other actuarial assumptions.

The Company recognized actuarial losses of $1.4 million during 2020 primarily due to the impact of an 81 basis point 
decrease  in  the  discount  rate  used  to  measure  the  Company’s  defined  benefit  postretirement  obligations,  which 
decreased from 3.43% in 2019 to 2.62% in 2020. The decrease in the discount rate resulted in a $3.9 million loss. 
This actuarial loss was partially offset by actuarial gains of $2.0 million due to the impact of a reduction in the rate for 
Medicare Advantage plans, $0.4 million due to higher than expected returns on plans assets and $0.1 million due to 
changes in other actuarial assumptions.

85

Note 17 - Other Postretirement Benefit Plans (continued)

The  discount  rate  assumption  is  based  on  current  rates  of  high-quality  long-term  corporate  bonds  over  the  same 
period that benefit payments will be required to be made. The expected rate of return on plan assets assumption is 
based on the weighted-average expected return on the various asset classes in the plans’ portfolio. The asset class 
return is developed using historical asset return performance as well as current market conditions such as inflation, 
interest rates and equity market performance.

For  expense  purposes  in  2022,  the  Company  applied  a  discount  rate  of  2.99%  to  its  other  postretirement  benefit 
plans. For expense purposes in 2023, the Company will apply a discount rate of 5.75% to its other postretirement 
benefit plans. 

The following tables set forth the change in benefit obligation, change in plan assets, funded status and amounts 
recognized on the Consolidated Balance Sheets for the other postretirement benefit plans as of December 31, 2022 
and 2021:

2022

2021

51.1
0.2
1.4
(0.6)
(13.1)
(0.1)
(3.4)
35.5

$ 

$ 

— $ 
—
—
(35.5) $ 

(4.1) $ 

(31.4)
(35.5) $ 

57.6
0.2
1.5
—
(4.1)
—
(4.1)
51.1

11.1
(11.1)
—
(51.1)

(5.3)
(45.8)
(51.1)

(71.9) $ 
(71.9) $ 

(81.4)
(81.4)

(81.4) $ 

(0.6)
10.1
(71.9) $ 

(91.5)
—
10.1
(81.4)

$ 

$ 

$ 

$ 

$ 

$ 

$ 
$ 

$ 

$ 

Change in benefit obligation:
Benefit obligation at beginning of year

Service cost
Interest cost
Plan amendments
Actuarial gains
International plan exchange rate change
Benefits paid

Benefit obligation at end of year

Change in plan assets:
Fair value of plan assets at beginning of year

Transfer to VEBA trust for certain active employees’ medical benefits

Fair value of plan assets at end of year
Funded status at end of year

Amounts recognized on the Consolidated Balance Sheets:
Current liabilities
Non-current liabilities

Amounts recognized in accumulated other comprehensive loss:
Net prior service credit
Accumulated other comprehensive loss

Changes to prior service credit recognized in accumulated other comprehensive loss:
Accumulated other comprehensive loss at beginning of year

Prior service credit
Recognized prior service credit

Total recognized in accumulated other comprehensive loss at December 31

86

 
Note 17 - Other Postretirement Benefit Plans (continued)

The  presentation  in  the  above  tables  for  amounts  recognized  in  accumulated  other  comprehensive  loss  on  the 
Consolidated Balance Sheets is before the effect of income taxes.

The current portion of accrued postretirement benefits, which was included in salaries, wages and benefits on the 
Consolidated Balance Sheets, was $4.1 million and $5.3 million at December 31, 2022 and 2021, respectively. In 2022, 
the current portion of accrued postretirement benefits related to unfunded plans and represented the actuarial present 
value of expected payments related to the plans to be made over the next 12 months.

For measurement purposes, the Company assumed a weighted-average annual rate of increase in the per capita cost 
(health care cost trend rate) for medical benefits of 6.5% for 2023, declining gradually to 5.0% in 2029 and thereafter 
for medical and prescription drug benefits. For Medicare Advantage benefits, actual contract rates have been set for 
2023 through 2025, and are assumed to increase by $5 per year for 2026 to 2028 and then 6.0% for 2028, declining 
gradually to 5.0% in 2032 and thereafter.

Plan Assets:

In 2010, the Company established a Voluntary Employee Beneficiary Association (“VEBA”) trust for certain bargained 
associates’ retiree medical benefits. In January 2020, the Company established a second VEBA trust for certain active 
employees’ medical benefits. In January 2020, the Company transferred $50 million from the existing VEBA trust to 
fund  the  second  VEBA  trust.  In  January  2021,  the  Company  transferred  the  remaining  $11.1  million  in  the  existing 
VEBA trust to the second VEBA trust. The Company utilized all of the assets of the second VEBA trust in 2021 and 
2020 for the payment of certain active employees’ medical benefits. As a result of the transfer, the Company expects 
to fund future payments for other postretirement benefit plans, which are expected to be approximately $4 million, 
from the general funds of the Company.

Cash Flows:
Estimated future benefit payments to be funded by the Company are expected to be as follows:

2023
2024
2025
2026
2027
2028-2032

$

Future  
Benefit 
Payments
4.2
3.9
3.7
3.6
3.5
14.7

87

Note 18 - Accumulated Other Comprehensive (Loss) Income 

The following tables present details about components of accumulated other comprehensive (loss) income for the 
years ended December 31, 2022 and December 31, 2021, respectively:

Foreign 
currency 
translation 
adjustments

Pension and 
postretirement 
liability 
adjustments

Change in fair 
value of 
derivative 
financial 
instruments

Total

Balance at December 31, 2021

$ 

(80.3) $ 

56.6 $ 

0.7 $ 

(23.0)

Other comprehensive (loss) income before reclassifications 

and income taxes

Amounts reclassified from accumulated other comprehensive 

(loss) income, before income tax

Income tax benefit (expense)

Net current period other comprehensive (loss) income,  

net of income taxes

Noncontrolling interest

Net current period comprehensive (loss) income, net  

of income taxes and noncontrolling interest

(162.7)

—

—

(162.7)

7.3

(155.4)

Balance at December 31, 2022

$ 

(235.7) $ 

1.1

(8.8)

1.9

(5.8)

—

(5.8)

50.8 $ 

6.6

(3.7)

(0.6)

2.3

—

2.3

3.0 $ 

(155.0)

(12.5)

1.3

(166.2)

7.3

(158.9)

(181.9)

Foreign 
currency 
translation 
adjustments

Pension and 
postretirement 
liability 
adjustments

Change in fair 
value of 
derivative 
financial 
instruments

Total

Balance at December 31, 2020

$ 

(18.0) $ 

63.4 $ 

(4.1) $ 

41.3

Other comprehensive (loss) income before reclassifications 

and income taxes

Amounts reclassified from accumulated other comprehensive 

(loss) income, before income tax

Income tax benefit (expense)

Net current period other comprehensive (loss) income, 

net of income taxes

Noncontrolling interest

Net current period comprehensive (loss) income, net  

of income taxes and noncontrolling interest

(63.7)

—

—

(63.7)

1.4

(62.3)

Balance at December 31, 2021

$ 

(80.3) $ 

(0.4)

(8.7)

2.3

(6.8)

—

(6.8)

56.6 $ 

2.4

4.2

(1.8)

4.8

—

4.8

0.7 $ 

(61.7)

(4.5)

0.5

(65.7)

1.4

(64.3)

(23.0)

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

88

Note 19 - Fair Value 

The  following  tables  present  the  fair  value  hierarchy  for  those  assets  and  liabilities  on  the  Consolidated  Balance 
Sheets measured at fair value on a recurring basis as of December 31, 2022 and 2021:

Assets:
Cash and cash equivalents
Cash and cash equivalents measured at net 

asset value
Restricted cash
Short-term investments
Interest rate swap contract
Foreign currency forward contracts

Total Assets

Liabilities:
Foreign currency forward contracts

Total Liabilities

Assets:
Cash and cash equivalents
Restricted cash
Short-term investments
Foreign currency forward contracts

Total Assets

Liabilities:
Foreign currency forward contracts

Total Liabilities

Total

December 31, 2022
Level 2
Level 1

Level 3

$ 

292.1 $ 

289.3 $ 

2.8 $ 

39.5
9.1
39.2
3.1
4.5
387.5 $ 

19.8 $ 
19.8 $ 

9.1
—
—
—
298.4 $ 

— $ 
— $ 

—
39.2
3.1
4.5
49.6 $ 

19.8 $ 
19.8 $ 

December 31, 2021

Total

Level 1

Level 2

Level 3

257.1 $ 
0.8
56.9
5.6
320.4 $ 

1.0 $ 
1.0 $ 

244.8 $ 
0.8
—
—
245.6 $ 

— $ 
— $ 

12.3 $ 
—
56.9
5.6
74.8 $ 

1.0 $ 
1.0 $ 

$ 

$ 
$ 

$ 

$ 

$ 
$ 

—

—
—
—
—
—

—
—

—
—
—
—
—

—
—

Cash and cash equivalents are highly liquid investments with maturities of three months or less when purchased and 
are valued at redemption value. Short-term investments are investments with maturities between four months and 
one year, and generally are valued at amortized cost, which approximates fair value. A portion of the cash and cash 
equivalents and short-term investments are valued based on net asset value. The Company uses publicly available 
foreign currency forward and spot rates to measure the fair value of its foreign currency forward contracts.

Additionally, the Company remeasures certain assets to fair value, using Level 3 measurements, as a result of the 
occurrence of triggering events such as purchase accounting for acquisitions. 

During the third quarter of 2022, the Company’s ADS business, located in Manchester, Connecticut, was reclassified 
to assets held for sale. In conjunction with this reclassification, the ADS business, with a carrying value of $62.1 million, 
was  written  down  to  its  estimated  fair  value  less  cost  to  sell  of  $32.8  million,  resulting  in  an  impairment  charge 
of  $29.3  million. The  Company  subsequently  sold ADS  on  November  1,  2022. The  fair  value  for  these  net  assets 
was  determined  based  on  an  estimate  of  the  value  expected  to  be  received  upon  the  sale  of  this  business.  See 
Note 2 - Acquisitions and Divestitures for further discussion.

In 2022, property, plant and equipment at the Company’s joint venture in Russia, with a carrying value of $16.1 million, 
were written down to their fair value of $7.1 million, resulting in an impairment charge of $9.0 million. The fair value for 
these assets was determined based on an estimate of the best price that would be received in a current transaction 
to sell the assets to a third party. 

The  Company  does  not  believe  it  has  significant  concentrations  of  risk  associated  with  the  counterparts  to  its 
financial instruments.

89

 
 
Note 19 - Fair Value (continued)

No other material assets were measured at fair value on a nonrecurring basis during the years ended December 31, 
2022 and 2021. 

Financial Instruments:
The  Company’s  financial  instruments  consist  primarily  of  cash  and  cash  equivalents,  short-term  investments,  net 
accounts  receivable,  trade  accounts  payable,  short-term  borrowings  and  long-term  debt.  Due  to  their  short-term 
nature, the carrying value of cash and cash equivalents, short-term investments, accounts receivable, trade accounts 
payable,  and  short-term  borrowings  are  a  reasonable  estimate  of  their  fair  value.  Due  to  the  nature  of  fair  value 
calculations for variable-rate debt, the carrying value of the Company’s long-term variable-rate debt is a reasonable 
estimate of its fair value. The fair value of the Company’s long-term fixed-rate debt, based on quoted market prices, 
was $1,353.5 million and $1,171.1 million at December 31, 2022 and 2021, respectively. The carrying value of this debt 
was $1,417.9 million and $1,087.5 million at December 31, 2022 and 2021, respectively. The fair value of long-term 
fixed-rate debt was measured using Level 2 inputs.

90

Note 20 - Derivative Instruments 

The  Company  is  exposed  to  certain  risks  relating  to  its  ongoing  business  operations. The  primary  risks  managed 
by using derivative instruments are foreign currency exchange rate risk and interest rate risk. Forward contracts on 
various foreign currencies are entered into in order to manage the foreign currency exchange rate risk associated with 
certain of the Company’s commitments denominated in foreign currencies. From time to time, interest rate swaps are 
used to manage interest rate risk associated with the Company’s fixed, and floating-rate borrowings.

The Company designates certain foreign currency forward contracts as cash flow hedges of forecasted revenues and 
certain interest rate hedges as cash flow hedges of fixed-rate borrowings. 

On September 8, 2020, the Company entered into a $100 million floating-to-fixed rate swap on the 2023 Term Loan, 
which hedges the change in the 1-month LIBOR rate October 30, 2020 through September 11, 2023 to a fixed rate. 
The Company repaid the LIBOR based 2023 Term Loan December 5, 2022 and replaced with a SOFR based 2022 
Term Loan. The Company amended the swap from LIBOR to SOFR commencing January 2023. The Company’s risk 
management objective is to hedge the risk of changes in the monthly interest expense attributable to changes in the 
benchmark interest rate.

On September 15, 2020, the Company designated €54.5 million of its €150.0 million fixed-rate senior unsecured notes, 
maturing on September 7, 2027 (the “2027 Notes”) as a hedge against its net investment in one of its European affiliates. 
The objective of the hedge transaction is to protect the net investment in the foreign operations against changes in 
the exchange rate between the U.S. dollar and the Euro. The net impact for the twelve months ended December 31, 
2022 was to record a gain of $3.6 million to accumulated comprehensive loss (income) with a corresponding offset 
to other (expense) income, which partially offsets the impact of the foreign currency adjustment on the 2027 Notes.

The Company does not purchase or hold any derivative financial instruments for trading purposes. As of December 31, 
2022 and 2021, the Company had $635.6 million and $300.8 million, respectively, of outstanding foreign currency forward 
contracts at notional value. Refer to Note 19 - Fair Value for the fair value disclosure of derivative financial instruments.

Cash Flow Hedging Strategy:
For certain derivative instruments that are designated and qualify as cash flow hedges (i.e., hedging the exposure 
to variability in expected future cash flows that is attributable to a particular risk), the effective portion of the gain or 
loss on the derivative instrument is reported as a component of other comprehensive income and reclassified into 
earnings in the same line item associated with the forecasted transaction and in the same period or periods during 
which the hedged transaction affects earnings. The remaining gain or loss on the derivative instrument in excess of 
the cumulative change in the present value of future cash flows of the hedged item, if any (i.e., the ineffective portion), 
or hedge components excluded from the assessment of effectiveness, are recognized in the Consolidated Statement 
of Income during the current period.

To protect against a reduction in the value of forecasted foreign currency cash flows resulting from export sales, the 
Company has instituted a foreign currency cash flow hedging program. The Company hedges portions of its forecasted 
cash flows denominated in foreign currencies with forward contracts. When the dollar strengthens significantly against 
foreign currencies, the decline in the present value of future foreign currency revenue is offset by gains in the fair 
value  of  the  forward  contracts  designated  as  hedges.  Conversely,  when  the  dollar  weakens,  the  increase  in  the 
present value of future foreign currency cash flows is offset by losses in the fair value of the forward contracts. As of 
December 31, 2022 and 2021, the Company had $82.3 million and $80.0 million, respectively, of outstanding foreign 
currency forward contracts at notional value that were classified as cash flow hedges.

The maximum length of time over which the Company hedges it exposure to the variability in future cash flows for 
forecast transactions is generally eighteen months or less.

Derivative Instruments not designated as Hedging Instruments:
For  derivative  instruments  that  are  not  designated  as  hedging  instruments,  the  instruments  are  typically  forward 
 contracts.  In  general,  the  practice  is  to  reduce  volatility  by  selectively  hedging  transaction  exposures  including 
 intercompany loans, accounts payable and accounts receivable. Intercompany loans between entities with  different 
functional  currencies  typically  are  hedged  with  a  forward  contract  at  the  inception  of  loan  with  a  maturity  date  at 
the  maturity  of  the  loan.  The  revaluation  of  these  contracts,  as  well  as  the  revaluation  of  the  underlying  balance 
sheet items, is recorded directly to the income statement so the adjustment generally offsets the revaluation of the 
 underlying balance sheet items to protect cash payments and reduce income statement volatility.

91

Note 20 - Derivative Instruments (continued)

As of December 31, 2022 and 2021, the Company had $553.3 million and $220.8 million, respectively, of outstanding 
foreign currency forward contracts at notional value that were not designated as hedging instruments. The following 
table  presents  the  impact  of  derivative  instruments  not  designated  as  hedging  instruments  for  the  years  ended 
 December 31, 2022, 2021 and 2020, and the related location within the Consolidated Statements of Income.

Amount of gain or (loss) 
recognized in income 

Year Ended December 31,

Derivatives not designated as 
hedging instruments
Foreign currency forward contracts Other income (expense), net

Location of gain or (loss) 
recognized in income

2022

2021

2020

$ 

(25.2) $ 

3.6 $ 

(3.7)

Note 21 - Research and Development 

The  Company  leverages  its  technical  knowledge,  research  expertise,  and  production  and  engineering  capabilities 
across all of its products and end markets to deliver high-performance products and services to its customers. Costs 
included  in  “Research  and  Development  Expense”  primarily  relate  to  new  product  innovation.  Costs  included  in 
“ Engineering  Expense” primarily relate to the technological  enhancement of existing products and services as we 
align with our  customers evolving needs. Expenditures may fluctuate from year-to-year depending on special projects 
and needs. 

Year Ended December 31,
2021

2020

2022

0.8%
1.5%
2.3%

0.9%
1.4%
2.3%

1.2%
1.0%
2.2%

Expenditures as a percentage of sales
Research and Development Expense
Engineering Expense
Total

92

Note 22 - Quarterly Financial Data 

(Unaudited)

Net sales

Gross profit

Selling, general and administrative expenses

Impairment and restructuring charges
Net income (1)
Net income attributable to noncontrolling interests

Net income attributable to The Timken Company

Net income per share - Basic:

Net income per share - Diluted:

Dividends per share

Net sales

Gross profit

Selling, general and administrative expenses

Impairment and restructuring charges
Net income (2)
Net income attributable to noncontrolling interests

Net income attributable to The Timken Company

Net income per share - Basic:

Net income per share - Diluted:

Dividends per share

$ 

$ 

$ 

$ 

$ 
$ 
$ 

1st

2nd

2022
3rd

4th

Total

$ 

1,124.6 $ 

1,153.7 $ 

1,136.4 $ 

1,082.0 $ 

327.4

154.1

1.0

121.9

3.7

118.2

341.8

155.9

10.0

105.6

0.6

105.0

322.8

159.8

31.3

90.4

3.4

87.0

296.1

167.3

1.8

99.1

1.9

97.2

1.58 $ 

1.56 $ 

0.30 $ 

1.43 $ 

1.42 $ 

0.31 $ 

1.19 $ 

1.18 $ 

0.31 $ 

1.34 $ 

1.32 $ 

0.31 $ 

4,496.7

1,288.1

637.1

44.1

417.0

9.6

407.4

5.54

5.48

1.23

2021

1st
1,025.4 $ 
299.2

2nd
1,062.9 $ 
302.3

3rd
1,037.3 $ 
267.9

4th
1,007.3 $ 
233.1

Total

4,132.9

1,102.5

144.5

4.0

116.0

2.7

113.3
1.49 $ 
1.47 $ 
0.29 $ 

149.0

1.3

107.2

2.4

104.8

1.38 $ 
1.36 $ 
0.30 $ 

140.7

2.9

91.6

3.5

88.1
1.16 $ 
1.14 $ 
0.30 $ 

146.3

0.7

66.7

3.8

62.9
0.83 $ 
0.82 $ 
0.30 $ 

580.5

8.9

381.5

12.4

369.1

4.86

4.79

1.19

Earnings per share are computed independently for each of the quarters presented; therefore, the sum of the quarterly 
earnings per share may not equal the total computed for the year.

(1)   Net income for the second quarter of 2022 included net actuarial losses of $11.6 million. Net income for the 
third quarter of 2022 included impairment charges of $29.3 million related to the sale of ADS. Net income  
for the fourth quarter of 2022 included net actuarial gains of $12.3 million. 

(2)  Net income for the second quarter of 2021 included net actuarial losses of $3.5 million. Net income for the 
third quarter of 2021 included net actuarial losses of $3.9 million. Net income for the fourth quarter of 2021 
included net actuarial gains of $8.0 million and the reversal of tax valuation allowances of $7.8 million.

Note 23 - Subsequent Events 

On February 1, 2023, the Company acquired the assets of American Roller Bearing (“ARB”), a North Carolina-based 
manufacturer of industrial bearings. ARB primarily serves the aftermarket sector and operates manufacturing facilities 
in Hiddenite and Morganton, North Carolina. ARB generated sales of more than $30 million in 2022 and the transaction 
was funded with cash on hand.

On January 30, 2023, the Company reached an agreement to acquire Nadella Group (“Nadella”), a leading European 
manufacturer of linear guides, telescopic rails, actuators and systems and other specialized industrial motion solutions, 
from ICG plc. Nadella operates manufacturing facilities in Europe and China and reported revenue of approximately 
€100 million in 2022. The transaction, which is subject to customary closing conditions, is expected to close in the first 
quarter of 2023 and will be funded with cash on hand and borrowings from committed credit facilities.

93

Report of Independent Registered Public Accounting Firm

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

Opinion on the Financial Statements
We  have  audited  the  accompanying  consolidated  balance  sheets  of  The  Timken  Company  and  subsidiaries  (the 
Company)  as  of  December  31,  2022  and  2021,  the  related  consolidated  statements  of  income,  comprehensive 
income, shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2022, and 
the related notes and the financial statement schedule listed in the Index at Item 15(a)(2) (collectively referred to as the 
“consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material 
respects, the financial position of the Company at December 31, 2022 and 2021, and the results of its operations and 
its cash flows for each of the three years in the period ended December 31, 2022, in conformity with U.S. generally 
accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United 
States)  (PCAOB),  the  Company’s  internal  control  over  financial  reporting  as  of  December  31,  2022,  based  on 
criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations 
of the Treadway Commission (2013 framework) and our report dated February 16, 2023 expressed an unqualified 
opinion thereon.

Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an 
opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm 
registered with the PCAOB and are required to be independent with respect to the Company in accordance with the 
U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and 
the PCAOB.

We  conducted  our  audits  in  accordance  with  the  standards  of  the  PCAOB. Those  standards  require  that  we  plan 
and perform the audit to obtain reasonable assurance about whether the financial statements are free of material 
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material 
misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to 
those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in 
the financial statements. Our audits also included evaluating the accounting principles used and significant estimates 
made by management, as well as evaluating the overall presentation of the financial statements. We believe that our 
audits provide a reasonable basis for our opinion.

Critical Audit Matters
The  critical  audit  matters  communicated  below  are  matters  arising  from  the  current  period  audit  of  the  financial 
statements that were communicated or required to be communicated to the audit committee and that: (1) relate to 
accounts  or  disclosures  that  are  material  to  the  financial  statements  and  (2)  involved  our  especially  challenging, 
subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on 
the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters 
below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

94

Description of the Matter

How We Addressed the 
Matter in Our Audit

Pension Benefit Obligation
At December 31, 2022, the Company’s pension benefit obligation was $553.4 million 
and exceeded the fair value of pension plan assets of $387.1 million, resulting in an 
unfunded pension benefit obligation of $166.3 million. As explained in Note 1, Significant 
Accounting  Policies  and  Note  16,  Retirement  Benefit  Plans,  to  the  consolidated 
financial statements, the Company recognizes actuarial gains and losses immediately 
through net periodic benefit cost upon the annual remeasurement in the fourth quarter, 
or on an interim basis if specific events trigger a remeasurement, through updating the 
estimates used to measure the pension benefit obligation and plan assets to reflect the 
actual return on plan assets and updated actuarial assumptions.

Auditing  the  pension  benefit  obligation  is  complex  and  required  the  involvement 
of  specialists  due  to  the  judgmental  nature  of  certain  of  the  actuarial  assumptions 
(e.g.,  discount  rate)  used  in  the  measurement  process.  These  assumptions  had 
a  significant  effect  on  the  projected  benefit  obligation  and  net  periodic  benefit 
costs recognized.
We  obtained  an  understanding,  evaluated  the  design  and  tested  the  operating 
effectiveness  of  controls  over  the  Company’s  accounting  for  the  measurement  of 
the  pension  benefit  obligation.  For  example,  we  tested  controls  over  management’s 
review of the pension benefit obligation calculations, the relevant data inputs and the 
significant actuarial assumptions used in the calculations.

To  test  the  pension  benefit  obligation,  our  audit  procedures  included,  among  others, 
evaluating the methodology used, the significant actuarial assumptions discussed above, 
and the underlying data used by the Company. We compared the actuarial assumptions 
used by management to historical trends and evaluated the change in the pension benefit 
obligation from prior year due to the change in service cost, interest cost, actuarial (gains) 
losses, benefits paid and other activities. In addition, we involved actuarial specialists 
to assist with our procedures. For example, we evaluated management’s methodology 
for  determining  the  discount  rate  that  reflects  the  maturity  and  duration  of  the  benefit 
payments and is used to measure the pension benefit obligation. In certain instances, 
as  part  of  this  assessment,  we  compared  the  projected  cash  flows  to  prior  year  and 
compared the current year benefits paid to the prior year projected cash flows. We also 
tested the completeness and accuracy of the underlying data, including the participant 
data used in the determination of the projected benefit obligation. 

95

Description of the Matter

How We Addressed the 
Matter in Our Audit

Valuation  of  Customer  Relationships,  Technology  and  Know-How  and  Trade 
name Intangible Assets in the Acquisition of GGB
As described in Note 2 to the consolidated financial statements, during November 2022, 
the Company completed the acquisition of GGB for $302.5 million, net of cash acquired 
and subject to customary post-closing adjustments. The acquisition was accounted for 
using the acquisition method of accounting. The consideration paid in the acquisition 
must be allocated to the acquired assets and liabilities assumed generally based on 
their fair value with the excess of the purchase price over those fair values allocated to 
goodwill. The preliminary estimates of the fair value of intangible assets were recorded 
as  third-party  valuations  were  received  resulting  in  the  recognition  of  customer 
relationships, technology and know-how and trade name intangible assets (collectively 
referred to as the intangible assets) of approximately $152 million.

Auditing the Company’s accounting for its acquisition of GGB was complex because 
the intangible assets recognized were material to the consolidated financial statements 
and the estimates of fair value involved subjectivity. The subjectivity was primarily due 
to  the  sensitivity  of  the  respective  fair  values  to  underlying  assumptions  about  the 
future  performance  of  the  acquired  business.  The  Company  used  discounted  cash 
flow  models  to  measure  the  intangible  assets.  The  significant  assumptions  used  to 
estimate the fair value of the intangible assets included the discount rates and certain 
assumptions that form the basis of the forecasted results (e.g., revenue growth rates 
and future EBITDA margins). These significant assumptions are forward looking and 
could be affected by future economic and market conditions.

We  obtained  an  understanding,  evaluated  the  design,  and  tested  the  operating 
effectiveness  of  the  Company’s  controls  over  its  accounting  for  the  acquisition  of 
GGB, including recognition and measurement of the intangible assets acquired. For 
example,  we  tested  controls  over  the  recognition  and  measurement  of  customer 
relationships, technology and know-how and trade name intangible assets, including 
management’s  review  of  the  methods  and  significant  assumptions  used  to  develop 
the fair value estimates. 

To test the estimated fair values of the customer relationships, technology and know-how 
and trade name intangible assets, we performed audit procedures that included, among 
others,  evaluating  the  Company’s  selection  of  the  valuation  methodology,  evaluating 
the methods and significant assumptions used by the Company’s valuation specialist, 
and evaluating the completeness and accuracy of the underlying data supporting the 
significant assumptions and estimates. For example, when evaluating the assumptions 
related  to  the  revenue  growth  rates  and  future  EBITDA  margins,  we  compared  the 
assumptions to the past performance of GGB and expected industry trends or forecasted 
performance of the guideline public companies. We also performed sensitivity analyses 
to evaluate the changes in the fair value of the customer relationships, technology and 
know-how  and  trade  name  intangible  assets  that  would  result  from  changes  in  the 
significant  assumptions.  We  involved  our  EY  valuation  specialists  to  assist  with  our 
evaluation of the methodology used by the Company and certain significant assumptions 
included in the fair value estimates. 

/s/ Ernst & Young LLP

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

Cleveland, Ohio
February 16, 2023

96

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Not applicable.

Item 9A. Controls and Procedures

As of the end of the period covered by this Annual Report on Form 10-K, the Company’s management carried out an 
evaluation, under the supervision and with the participation of the Company’s principal executive officer and principal 
financial officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures 
as defined in Exchange Act Rule 13a-15(e). Based upon that evaluation, the principal executive officer and principal 
financial officer concluded that the Company’s disclosure controls and procedures were effective as of the end of the 
period covered by this Annual Report on Form 10-K.

There have been no changes during the Company’s fourth quarter of 2022 in the Company’s internal control over 
financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal 
control over financial reporting.

Report of Management on Internal Control Over Financial Reporting

The management of The Timken Company is responsible for establishing and maintaining adequate internal control 
over financial reporting for the Company. Timken’s internal control system is designed to provide reasonable assurance 
regarding the preparation and fair presentation of published financial statements. Because of its inherent limitations, 
internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation 
of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in 
conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Timken  management  assessed  the  effectiveness  of  the  Company’s  internal  control  over  financial  reporting  as 
of  December  31,  2022.  In  making  this  assessment,  it  used  the  criteria  set  forth  by  the  Committee  of  Sponsoring 
Organizations of the Treadway Commission (“COSO”). Based on this assessment under COSO’s “Internal Control-
Integrated Framework,” management believes that, as of December 31, 2022, Timken’s internal control over financial 
reporting is effective.

On  May  31,  2022,  the  Company  completed  the  acquisition  of  Spinea,  and  on  November  4,  2022,  the  Company 
completed  the  acquisition  of  GGB.  The  results  of  these  acquisitions  are  included  in  the  Company’s  consolidated 
financial statements for 2022. The total and net assets of Spinea and GGB represent 3% and 7% of the Company’s 
total assets, and 6% and 14% of the Company’s net assets, respectively, as of December 31, 2022. For 2022, the net 
sales of Spinea and GGB each represented less than 1% of the Company’s consolidated net sales and approximately 
2%  of  the  Company’s  consolidated  net  income.  The  scope  of  the  Company’s  assessment  of  the  effectiveness  of 
internal control over financial reporting does not include these acquisitions. This exclusion is in accordance with the 
SEC’s general guidance that an assessment of a recently acquired business may be omitted from the Company’s 
scope in the year of acquisition.

The  effectiveness  of  the  Company’s  internal  control  over  financial  reporting  as  of  December  31,  2022  has  been 
audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which is 
presented in this Annual Report on Form 10-K.

97

Report of Independent Registered Public Accounting Firm

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

Opinion on Internal Control Over Financial Reporting

We  have  audited  The  Timken  Company  and  subsidiaries’  internal  control  over  financial  reporting  as  of 
December 31, 2022, based on criteria established in Internal Control – Integrated Framework issued by the Committee 
of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, The 
Timken Company and subsidiaries (the Company) maintained, in all material respects, effective internal control over 
financial reporting as of December 31, 2022, based on the COSO criteria.

As indicated in the accompanying Report of Management on Internal Control Over Financial Reporting, management’s 
assessment  of  and  conclusion  on  the  effectiveness  of  internal  control  over  financial  reporting  did  not  include  the 
internal controls of Spinea or GGB, which is included in the 2022 consolidated financial statements of the Company.  
The total and net assets of Spinea and GGB represent 3% and 7% of the Company’s total assets and 6% and 14% 
of the Company’s net assets, respectively, as of December 31, 2022. For 2022, the net sales of Spinea and GGB 
each represented less than 1% of the Company’s consolidated net sales and approximately 2% of the Company’s 
consolidated net income. Our audit of internal control over financial reporting of the Company also did not include an 
evaluation of the internal control over financial reporting of Spinea or GGB.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United 
States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2022 and 2021, the related 
consolidated  statements  of  income,  comprehensive  income,  shareholders’  equity  and  cash  flows  for  each  of  the 
three  years  in  the  period  ended  December  31,  2022,  and  the  related  notes  and  the  financial  statement  schedule 
listed in the Index at Item 15(a)(2) of the Company and our report dated February 16, 2023 expressed an unqualified 
opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for 
its assessment of the effectiveness of internal control over financial reporting included in the accompanying Report 
of  Management  on  Internal  Control  Over  Financial  Reporting.  Our  responsibility  is  to  express  an  opinion  on  the 
Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered 
with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal 
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.  

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and 
perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was 
maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a 
material  weakness  exists,  testing  and  evaluating  the  design  and  operating  effectiveness  of  internal  control  based 
on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We 
believe that our audit provides a reasonable basis for our opinion.

98

Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding 
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance 
with generally accepted accounting principles. A company’s internal control over financial reporting includes those 
policies  and  procedures  that  (1)  pertain  to  the  maintenance  of  records  that,  in  reasonable  detail,  accurately  and 
fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that 
transactions are recorded as necessary to permit preparation of financial statements in accordance with generally 
accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance 
with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding 
prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have 
a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, 
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate 
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

Cleveland, Ohio
February 16, 2023 

99

Item 9B. Other Information

Not applicable.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

PART III.

Item 10. Directors, Executive Officers and Corporate Governance

Required information is set forth under the caption “Nominees” in the proxy statement filed in connection with the 
annual meeting of shareholders to be held on or about May 5, 2023 (the “Proxy Statement”), and is incorporated herein 
by reference. Information regarding the executive officers of the registrant is included in Part I hereof. Information 
regarding the Company’s Audit Committee and its Audit Committee Financial Experts is set forth under the caption 
“Audit Committee” in the Proxy Statement, and is incorporated herein by reference.

The  General  Policies  and  Procedures  of  the  Board  of  Directors  of  the  Company  and  the  charters  of  its  Audit 
Committee,  Compensation  Committee  and  Nominating  and  Corporate  Governance  Committee  are  also  available 
on  the  Company’s  website  at  https://investors.timken.com/corporate-governance/documents/default.aspx  and  are 
available to any shareholder upon request to the Vice President, General Counsel and Secretary. The information on 
the Company’s website is not incorporated by reference into this Annual Report on Form 10-K.

The Company has adopted a code of ethics that applies to all of its employees, including its principal executive officer, 
principal financial officer and principal accounting officer, as well as its directors. The Company’s code of ethics, The 
Timken  Company  Standards  of  Business  Ethics  Policy,  is  available  on  its  website  at  https://investors.timken.com/
corporate-governance/documents/default.aspx. The Company intends to disclose any amendment to, or waiver from, 
its code of ethics by posting such amendment or waiver, as applicable, on its website.

Item 11. Executive Compensation

Required  information  is  set  forth  under  the  captions  “Compensation  Discussion  and  Analysis,”  “2022  Summary 
Compensation Table,” “2022 Grants of Plan-Based Awards,” “Outstanding Equity Awards at 2022 Year-End,” “2022 
Option Exercises and Stock Vested,” “2022 Pension Benefits Table,” “2022 Nonqualified Deferred Compensation,” 
“Potential  Payments  Upon  Termination  or  Change  in  Control,”  “Director  Compensation,”  “CEO  Pay  Ratio,” 
“Compensation  Committee,”  and  “Compensation  Committee  Report”  in  the  Proxy  Statement,  and  is  incorporated 
herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters

Required information, including with respect to institutional investors owning more than 5% of the Company’s common 
shares,  is  set  forth  under  the  caption  “Beneficial  Ownership  of  Common  Shares”  in  the  Proxy  Statement,  and  is 
incorporated herein by reference.

Required information is set forth under the caption “Equity Compensation Plan Information” in the Proxy Statement, 
and is incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions, and Director Independence

Required information is set forth under the captions “Nominees,” “Independence Determinations” and “Related Party 
Transactions Approval Policy” in the Proxy Statement, and is incorporated herein by reference.

Item 14. Principal Accountant Fees and Services

Required information regarding fees paid to and services provided by the Company’s independent auditor during the 
years ended December 31, 2022 and 2021 and the pre-approval policies and procedures of the Audit Committee of 
the Company’s Board of Directors is set forth under the caption “Auditor” in the Proxy Statement, and is incorporated 
herein by reference.

100

PART IV.

Item 15. Exhibits and Financial Statement Schedules
(a)(1) - Financial Statements are included in Part II, Item 8 of the Annual Report on Form 10-K. 

(a)(2) - Schedule II - Valuation and Qualifying Accounts is submitted as a separate section of this report. Schedules I, 
III, IV and V are not applicable to the Company and, therefore, have been omitted. 

(a)(3) - Listing of Exhibits 

Exhibit

  (3.1)  Amended Articles of Incorporation of  Registrant, (effective May 7, 2013) were filed on July 31, 2013 with Form 10-Q 

(Commission File No. 1-1169) and are incorporated herein by reference.

  (3.2)  Amended Regulations of the Registrant adopted on May 10, 2016, were filed on July 28, 2016 with Form 10-Q 

(Commission File No. 1-1169) and are incorporated herein by reference.

  (4.1)  Fifth Amended and Restated Credit Agreement, dated as of December 5, 2022, among The Timken Company, 
Bank of America, N.A. and KeyBank National Association, as Co-Administrative Agents, and the Lenders party 
thereto, was filed on December 6, 2022 with Form 8-K (Commission File no. 1-1169) and is incorporated herein 
by reference.*
Indenture,  dated  as  of August  20,  2014,  by  and  between  The  Timken  Company  and  The  Bank  of  New  York 
Mellon Trust Company, N.A., was filed on August 20, 2014 with Form 8-K (Commission File No. 1-1169) and is 
incorporated herein by reference.

  (4.2) 

  (4.3) 

Indenture, dated as of September 6, 2018, by and between The Timken Company and The Bank of New York Mellon 
Trust Company, N.A., as Trustee, was filed on September 6, 2018 with Form 8-K (Commission File No. 1-1169) 
and is incorporated herein by reference.

  (4.4)  First Supplemental Indenture, dated as of September 6, 2018, by and between The Timken Company and The Bank 
of New York Mellon Trust Company, N.A., as Trustee (including Form of Note), was filed on September 6, 2018 
with Form 8-K (Commission File No. 1-1169) and is incorporated herein by reference.

  (4.5) 

Indenture, dated as of March 28, 2022, by and between the Company and U.S. Bank Trust Company, National 
Association,  as  Trustee,  was  filed  on  March  28,  2022  with  Form  8-K  (Commission  File  no.  1-1169)  and  is 
incorporated herein by reference.

  (4.6)  First Supplemental Indenture, dated as of March 28, 2022, by and between the Company and U.S. Bank Trust 
Company, National Association, as Trustee (including Form of Note), was filed on March 28, 2022 with Form 8-K 
(Commission File no. 1-1169) and is incorporated herein by reference.

  (4.7)  Description of The Timken Company Common Shares was filed on February 14, 2020 with Form 10-K (Commission 

File No. 1-1169) and is incorporated herein by reference.

  The  Company  is  also  a  party  to  agreements  with  respect  to  other  long-term  debt  in  total  amount  less  than 
10% of the Registrant’s consolidated total assets. The Registrant agrees to furnish a copy of such agreements 
upon request.*

Management Contracts and Compensation Plans

  (10.1)  The Timken Company 1996 Deferred Compensation Plan for officers and other key employees, amended and 

restated effective as of January 1, 2023, as attached hereto as Exhibit 10.1.

 (10.2)  The  Timken  Company  Director  Deferred  Compensation  Plan,  amended  and  restated  effective  December  31, 
2008, was filed on February 25, 2010 with Form 10-K (Commission File No. 1-1169) and is incorporated herein 
by reference.

 (10.3)  Form of The Timken Company 1996 Deferred Compensation Plan Election Agreement, amended and restated 
as  of  January  1,  2008,  was  filed  on  February  25,  2010  with  Form  10-K  (Commission  File  No.  1-1169)  and  is 
incorporated herein by reference.

 (10.4)  Form of The Timken Company Director Deferred Compensation Plan Election Agreement, amended and restated 
as  of  January  1,  2008,  was  filed  on  February  25,  2010  with  Form  10-K  (Commission  File  No.  1-1169)  and  is 
incorporated herein by reference.

 (10.5)  The Timken  Company  2011  Long-Term  Incentive  Plan,  as  amended  and  restated  as  of  February  13,  2015  for 
directors, officers and other key employees as approved by the shareholders on May 7, 2015 was filed on March 27, 
2015 with Definitive Proxy Statement on Schedule 14A (Commission File No. 1-1169) and is incorporated herein 
by reference.

 (10.6)  The  Timken  Company  2019  Equity  and  Incentive  Compensation  Plan  for  directors,  officers  and  other  key 
employees as approved by the shareholders on May 10, 2019 was filed on March 22, 2019 as Appendix B to 
Definitive Proxy Statement on Schedule 14A (Commission File No. 1-1169) and is incorporated herein by reference.

101

 
 (10.7)  Amended and Restated Supplemental Pension Plan of The Timken Company, amended and restated effective as 
of January 1, 2011, was filed on February 17, 2012 with Form 10-K (Commission File No. 1-1169) and is incorporated 
herein by reference.

 (10.8)  Amended and Restated Supplemental Pension Plan of The Timken Company, effective as of June 30, 2014, was 

filed on October 30, 2018 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.

 (10.9)  Amendment No. 1 to the Amended and Restated Supplemental Pension Plan of The Timken Company, effective as 
of June 30, 2014, was filed on October 30, 2018 with Form 10-Q (Commission File No. 1-1169) and is incorporated 
herein by reference.

 (10.10)  Amended and Restated Supplemental Pension Plan of The Timken Company, effective as of October 1, 2018, was 

filed on October 30, 2018 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.

 (10.11)  The Timken Company Short-Term Incentive Plan Global Plan Document for officers and other key employees, 
amended and restated effective as of January 1, 2021 and pursuant to The Timken Company 2019 Equity and 
Incentive Compensation Plan, was filed on February 15, 2022 with Form 10-K (Commission File No. 1-1169) and 
is incorporated herein by reference.

 (10.12)  Form  of  Severance Agreement  (for  Executive  Officers  appointed  on  or  after  November  12,  2015),  as  adopted 
on  November  12,  2015,  was  filed  on  February  24,  2016  with  Form  10-K  (Commission  File  No.  1-1169)  and  is 
incorporated herein by reference.

 (10.13)  Form of Severance Agreement as adopted on December 9, 2010 was filed on February 22, 2011 with Form 10-K 

(Commission File No. 1-1169) and is incorporated herein by reference.

 (10.14)  Amended  and  Restated  Severance  Agreement  with  Andreas  Roellgen,  dated  as  of  December  9,  2022,  as 

attached hereto as Exhibit 10.2.

 (10.15)  Form of Indemnification Agreement for Directors was filed on February 14, 2020 with Form 10-K (Commission File 

No. 1-1169) and is incorporated herein by reference.

(10.16)  Form  of  Indemnification  Agreement  for  Executive  Officers  was  filed  on  February  14,  2020  with  Form  10-K 

(Commission File No. 1-1169) and is incorporated herein by reference.

(10.17)  Form  of  Amended  and  Restated  Employee  Excess  Benefits  Agreement  entered  into  with  certain  Executive 
Officers and certain key employees of the Company, was filed on February 26, 2009 with Form 10-K (Commission 
File No. 1-1169) and is incorporated herein by reference

(10.18)  Form  of Amended  and  Restated  Employee  Excess  Benefits Agreement  entered  into  with  the  Chief  Executive 
Officer, was filed on February 26, 2009 with Form 10-K (Commission File No. 1-1169) and is incorporated herein 
by reference.

(10.19)  Form of Employee Excess Benefits Agreement, entered into with all Executive Officers after January 1, 2011, was 

filed on August 4, 2011 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.

(10.20)  Amendment No. 1 to the Employee Excess Benefits Agreement, dated January 1, 2011, entered into with Richard 
G. Kyle, approved as of November 8, 2018 was filed on February 15, 2019 with Form 10-K (Commission File No. 
1-1169) and is incorporated herein by reference.

(10.21)  Form of Amendment No. 1 to The Amended and Restated Employee Excess Benefit Agreement, entered into with 
certain Executive Officers and certain key employees of the Company, was filed on September 2, 2009 with Form 
8-K (Commission File No. 1-1169) and is incorporated herein by reference.

(10.22)  Form of Amendment No. 1 to The Amended and Restated Employee Excess Benefits Agreement with all Executive 
Officers  after  January  1,  2011  and  Form  of Amendment  No.  2  to  the Amended  and  Restated  Excess  Benefits 
Agreement with certain Executive Officers and certain key employees of the Company, as adopted December 8, 
2011,  was  filed  on  February  17,  2012  with  Form  10-K  (Commission  File  No.  1-1169)  and  is  incorporated  herein 
by reference.

(10.23)  Amendment No. 2 to the Amended and Restated Employee Excess Benefits Agreement, dated December 17, 2008, 
entered into with Christopher A. Coughlin, approved as of November 8, 2018 was filed on February 15, 2019 with 
Form 10-K (Commission File No. 1-1169) and is incorporated herein by reference.

(10.24)  Amendment No. 3 to the Amended and Restated Employee Excess Benefits Agreement, dated December 18, 2008, 
entered  into  with  Philip  D.  Fracassa,  approved  as  of  November  8,  2018  was  filed  on  February  15,  2019  with 
Form 10-K (Commission File No. 1-1169) and is incorporated herein by reference.

(10.25)  Form of Amendment No. 1 to The Amended and Restated Employee Excess Benefits Agreement entered into 
with the Chief Executive Officer, as adopted December 8, 2011, was filed on February 17, 2012 with Form 10-K 
(Commission File No. 1-1169) and is incorporated herein by reference.

(10.26)  Form of Amendment No. 2 to The Amended and Restated Employee Excess Benefits Agreement entered into 
with the Chief Executive Officer, as adopted December 8, 2011, was filed on February 17, 2012 with Form 10-K 
(Commission File No. 1-1169) and is incorporated herein by reference.

102

(10.27)  Form of Nonqualified Stock Option Agreement for transferable options for Officers, as adopted on August 12, 2015, 
was filed on February 24, 2016 with Form 10-K (Commission File No. 1-1169) and is incorporated herein by reference.

(10.28)  Form  of  Nonqualified  Stock  Option  Agreement  for  non-transferable  options  for  Non-Officer  Employees,  as 
adopted on December 8, 2011, was filed on February 17, 2012 with Form 10-K (Commission File No. 1-1169) and 
is incorporated herein by reference.

(10.29)  Form of Nonqualified Stock Option Agreement, as adopted on February 8, 2018, was filed on May 1, 2018 with 

Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.

(10.30)  Form  of  Nonqualified  Stock  Option  Agreement  (U.S),  as  adopted  on  September  24,  2018,  was  filed  on 
October 30, 2018 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.

(10.31)  Form  of  Nonqualified  Stock  Option Agreement  (Non-U.S),  as  adopted  on  September  24,  2018,  was  filed  on 
October 30, 2018 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.

(10.32)  Form of Nonqualified Stock Option Agreement (U.S.), as adopted February 7, 2019 and pursuant to the Timken 
Company 2011 Long-Term Incentive Plan, was filed on May 1, 2019 with Form 10-Q (Commission File No. 1-1169) 
and is incorporated herein by reference.

(10.33)  Form  of  Nonqualified  Stock  Option Agreement  (non-U.S.),  as  adopted  February  7,  2019  and  pursuant  to  the 
Timken  Company  2011  Long-Term  Incentive  Plan,  was  filed  on  May  1,  2019  with  Form  10-Q  (Commission 
File No. 1-1169) and is incorporated herein by reference.

(10.34)  Form  of  Nonqualified  Stock  Option  Agreement  (U.S.,  retirement  age  62),  as  adopted  February  7,  2019  and 
pursuant  to  the  Timken  Company  2011  Long-Term  Incentive  Plan,  was  filed  on  May  1,  2019  with  Form  10-Q 
(Commission File No. 1-1169) and is incorporated herein by reference.

(10.35)  Form of Nonqualified Stock Option Agreement (non-U.S., retirement age 62), as adopted February 7, 2019 and 
pursuant  to  the  Timken  Company  2011  Long-Term  Incentive  Plan,  was  filed  on  May  1,  2019  with  Form  10-Q 
(Commission File No. 1-1169) and is incorporated herein by reference.

(10.36)  Form of Nonqualified Stock Option Agreement (U.S.) as adopted February 7, 2019 and to be granted pursuant 
to the Timken Company 2019 Equity and Incentive Compensation Plan, was filed on May 1, 2019 with Form 10-Q 
(Commission File No. 1-1169) and is incorporated herein by reference.

(10.37)  Form of Nonqualified Stock Option Agreement (non-U.S.) as adopted February 7, 2019 and to be granted pursuant 
to the Timken Company 2019 Equity and Incentive Compensation Plan, was filed on May 1, 2019 with Form 10-Q 
(Commission File No. 1-1169) and is incorporated herein by reference.

(10.38)  Form  of  Nonqualified  Stock  Option  Agreement  (U.S.,  retirement  age  62),  as  adopted  February  7,  2019  and 
to  be  granted  pursuant  to  the  Timken  Company  2019  Equity  and  Incentive  Compensation  Plan,  was  filed  on 
May 1, 2019 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.

(10.39)  Form of Nonqualified Stock Option Agreement (non-U.S., retirement age 62), as adopted February 7, 2019 and 
to  be  granted  pursuant  to  the  Timken  Company  2019  Equity  and  Incentive  Compensation  Plan,  was  filed  on 
May 1, 2019 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.

(10.40)  Form of Restricted Share Agreement for Non-Employee Directors (ratable vesting over five years), as adopted on 
August 12, 2015, was filed on February 24, 2016 with Form 10-K (Commission File No. 1-1169) and is incorporated 
herein by reference.

(10.41)  Form of Deferred Shares Agreement (five year cliff vesting) entered into with employees after August 12, 2015, as 
adopted on August 12, 2015, was filed on February 24, 2016 with Form 10-K (Commission File No. 1-1169) and is 
incorporated herein by reference.

(10.42)  Form  of  Deferred  Shares  Agreement  (five  year  cliff  vesting),  as  adopted  on  February  8,  2018,  was  filed  on 

May 1, 2018 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.

(10.43)  Form of Deferred Shares Agreement (three year cliff vesting), as adopted on September 24, 2018, was filed on 
October 30, 2018 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.

(10.44)  Form of Deferred Shares Agreement (five year cliff vesting), as adopted on September 24, 2018, was filed on 
October 30, 2018 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.

(10.45)  Form  of  Deferred  Shares Agreement  (three  year  cliff  vesting),  as  adopted  February  7,  2019  and  pursuant  to 
the Timken  Company  2011  Long-Term  Incentive  Plan,  was  filed  on  May  1,  2019  with  Form  10-Q  (Commission 
File No. 1-1169) and is incorporated herein by reference.

(10.46)  Form  of  Deferred  Shares  Agreement  (five  year  cliff  vesting),  as  adopted  February  7,  2019  and  pursuant  to 
the Timken  Company  2011  Long-Term  Incentive  Plan,  was  filed  on  May  1,  2019  with  Form  10-Q  (Commission 
File No. 1-1169) and is incorporated herein by reference.

(10.47)  Form of Deferred Shares Agreement (three year cliff vesting, retirement age 62), as adopted February 7, 2019 
and pursuant to the Timken Company 2011 Long-Term Incentive Plan, was filed on May 1, 2019 with Form 10-Q 
(Commission File No. 1-1169) and is incorporated herein by reference.

(10.48)  Form  of  Deferred  Shares Agreement  (five  year  cliff  vesting,  retirement  age  62),  as  adopted  February  7,  2019 
and pursuant to the Timken Company 2011 Long-Term Incentive Plan, was filed on May 1, 2019 with Form 10-Q 
(Commission File No. 1-1169) and is incorporated herein by reference.

103

(10.49)  Form  of  Deferred  Share  Equivalents  Agreement  (three  year  cliff  vesting),  as  adopted  February  7,  2019  and 
pursuant  to  the  Timken  Company  2011  Long-Term  Incentive  Plan,  was  filed  on  May  1,  2019  with  Form  10-Q 
(Commission File No. 1-1169) and is incorporated herein by reference.

(10.50)  Form of Deferred Share Equivalents Agreement five year cliff vesting), as adopted February 7, 2019 and pursuant 
to the Timken Company 2011 Long-Term Incentive Plan, was filed on May 1, 2019 with Form 10-Q (Commission 
File No. 1-1169) and is incorporated herein by reference.

(10.51)  Form  of  Deferred  Share  Equivalents  Agreement  (three  year  cliff  vesting,  retirement  age  62),  as  adopted 
February 7, 2019 and pursuant to the Timken Company 2011 Long-Term Incentive Plan, was filed on May 1, 2019 
with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.

(10.52)  Form  of  Deferred  Share  Equivalents  Agreement  (five  year  cliff  vesting,  retirement  age  62),  as  adopted 
February 7, 2019 and pursuant to the Timken Company 2011 Long-Term Incentive Plan, was filed on May 1, 2019 
with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.

(10.53)  Form of Deferred Shares Agreement (three year cliff vesting), as adopted February 7, 2019 and to be granted 
pursuant to the Timken Company 2019 Equity and Incentive Compensation Plan, was filed on May 1, 2019 with 
Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.

(10.54)  Form  of  Deferred  Shares Agreement  (five  year  cliff  vesting),  as  adopted  February  7,  2019  and  to  be  granted 
pursuant to the Timken Company 2019 Equity and Incentive Compensation Plan, was filed on May 1, 2019 with 
Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.

(10.55)  Form of Deferred Shares Agreement (three year cliff vesting, retirement age 62), as adopted February 7, 2019 
and to be granted pursuant to the Timken Company 2019 Equity and Incentive Compensation Plan, was filed on 
May 1, 2019 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.

(10.56)  Form  of  Deferred  Shares Agreement  (five  year  cliff  vesting,  retirement  age  62),  as  adopted  February  7,  2019 
and to be granted pursuant to the Timken Company 2019 Equity and Incentive Compensation Plan, was filed on 
May 1, 2019 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.

(10.57)  Form of Deferred Share Equivalents Agreement (three year cliff vesting), as adopted February 7, 2019 and to 
be granted pursuant to the Timken Company 2019 Equity and Incentive Compensation Plan, was filed on May 1, 
2019 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.

(10.58)  Form of Deferred Share Equivalents Agreement (five year cliff vesting, as adopted February 7, 2019 and to be 
granted pursuant to the Timken Company 2019 Equity and Incentive Compensation Plan, was filed on May 1, 2019 
with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.

(10.59)  Form  of  Deferred  Share  Equivalents  Agreement  (three  year  cliff  vesting,  retirement  age  62),  as  adopted 
February 7, 2019 and to be granted pursuant to the Timken Company 2019 Equity and Incentive Compensation 
Plan, was filed on May 1, 2019 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.

(10.60)  Form  of  Deferred  Share  Equivalents  Agreement  (five  year  cliff  vesting,  retirement  age  62),  as  adopted 
February 7, 2019 and to be granted pursuant to the Timken Company 2019 Equity and Incentive Compensation 
Plan, was filed on May 1, 2019 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.

(10.61)  Form  of  Performance-Based  Restricted  Stock  Unit Agreement,  as  adopted  February  7,  2019  and  pursuant  to 
the Timken  Company  2011  Long-Term  Incentive  Plan,  was  filed  on  May  1,  2019  with  Form  10-Q  (Commission 
File No. 1-1169) and is incorporated herein by reference.

(10.62)  Form of Performance-Based Restricted Stock Unit Agreement (retirement age 62), as adopted February 7, 2019 
and pursuant to the Timken Company 2011 Long-Term Incentive Plan, was filed on May 1, 2019 with Form 10-Q 
(Commission File No. 1-1169) and is incorporated herein by reference.

(10.63)  Form of Performance-Based Restricted Stock Unit Agreement, as adopted February 7, 2019 and to be granted 
pursuant to the Timken Company 2019 Equity and Incentive Compensation Plan, was filed on May 1, 2019 with 
Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.

(10.64)  Form of Performance-Based Restricted Stock Unit Agreement (retirement age 62), as adopted February 7, 2019 
and to be granted pursuant to the Timken Company 2019 Equity and Incentive Compensation Plan, was filed on 
May 1, 2019 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.

(10.65)  Form of Time-Based Restricted Stock Unit Agreement, as adopted on February 8, 2018, was filed on May 1, 2018 

with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.

(10.66)  Form  of Time-Based  Restricted  Stock  Unit Agreement  for  Nonemployee  Directors  (annual  grant),  as  adopted 
February 8, 2018, was filed on May 1, 2018 with Form 10-Q (Commission File No. 1-1169) and is incorporated 
herein by reference.

(10.67)  Form of Time-Based Restricted Stock Unit Agreement, as adopted February 7, 2019 and pursuant to the Timken 
Company 2011 Long-Term Incentive Plan, was filed on May 1, 2019 with Form 10-Q (Commission File No. 1-1169) 
and is incorporated herein by reference.

(10.68)  Form  of Time-Based  Restricted  Stock  Unit Agreement  (retirement  age  62),  as  adopted  February  7,  2019  and 
pursuant  to  the  Timken  Company  2011  Long-Term  Incentive  Plan,  was  filed  on  May  1,  2019  with  Form  10-Q 
(Commission File No. 1-1169) and is incorporated herein by reference.

104

(10.69)  Form of Time-Based Restricted Stock Unit Agreement, as adopted February 7, 2019 and to be granted pursuant 
to the Timken Company 2019 Equity and Incentive Compensation Plan, was filed on May 1, 2019 with Form 10-Q 
(Commission File No. 1-1169) and is incorporated herein by reference.

(10.70)  Form of Time-Based Restricted Stock Unit Agreement (retirement age 62), as adopted February 7, 2019 and to 
be granted pursuant to the Timken Company 2019 Equity and Incentive Compensation Plan, was filed on May 1, 
2019 with Form 10-Q (Commission File No. 1-1169) and is incorporated herein by reference.

(10.71)  Form of Time-Based Restricted Stock Unit Agreement for Nonemployee Directors (new member grant), as adopted 
February 7, 2019, was filed on May 1, 2019 with Form 10-Q (Commission  File No. 1-1169) and is incorporated 
herein by reference.

(10.72)  Form  of Time-Based  Restricted  Stock  Unit Agreement  for  Nonemployee  Directors  (annual  grant),  as  adopted 
February 7, 2019, was filed on May 1, 2019 with Form 10-Q (Commission  File No. 1-1169) and is incorporated 
herein by reference.

(10.73)  Form of Associate Non-Compete Agreement entered into with key employees was filed on December 3, 2012 with 

Form 10-Q/A (Commission File No. 1-1169) and is incorporated herein by reference.

*Portions  of  this  exhibit  have  been  omitted,  which  portions  will  be  furnished  to  the  Securities  and  Exchange 
Commission upon request.

Listing of Exhibits (continued)

  (10.1)  The Timken Company 1996 Deferred Compensation Plan for officers and other key employees, amended and 

restated effective as of January 1, 2023.

 (10.2)  Amended and Restated Severance Agreement with Andreas Roellgen, dated as of December 9, 2022.

(21)  A list of subsidiaries of the Registrant. 

  (23)  Consent of Independent Registered Public Accounting Firm. 

  (24)  Power of Attorney. 

  (31.1)  Principal Executive Officer’s Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 (31.2)  Principal Financial Officer’s Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

  (32)  Certification  pursuant  to  18  U.S.C.  Section  1350,  as  adopted  pursuant  to  Section  906  of  the  Sarbanes-Oxley 

Act of 2002. 

  (101)  Financial  statements  from  the  Annual  Report  on  Form  10-K  of  The  Timken  Company  for  the  year  ended 
December 31, 2022, formatted in Inline XBRL: (i) the Consolidated Statements of Income, (ii) the Consolidated 
Statements of Comprehensive Income, (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements 
of Cash Flows, (v) the Consolidated Statements of Shareholders’ Equity and (vi) the Notes to the Consolidated 
Financial Statements.

  (104)  Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

Item 16. Form 10-K Summary

None.

105

 
 
 
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly 
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SIGNATURES

THE TIMKEN COMPANY

By: /s/ Richard G. Kyle

Richard G. Kyle

By: /s/ Philip D. Fracassa

Philip D. Fracassa

President, Chief Executive Officer and Director

Executive Vice President and Chief Financial Officer

(Principal Executive Officer)

(Pri ncipal Financial Officer and Principal  

Date: February 16, 2023

Accounting Officer)
Date: February 16, 2023

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following 
persons on behalf of the registrant and in the capacities and on the dates indicated.

By: /s/ Maria A. Crowe *

Maria A. Crowe, Director

Date: February 16, 2023

By: /s/ Elizabeth A. Harrell *

Elizabeth A. Harrell, Director

Date: February 16, 2023

By: /s/ Richard G. Kyle *

Richard G. Kyle, Director

Date: February 16, 2023

By: /s/ Sarah C. Lauber *

Sarah C.  Lauber, Director

Date: February 16, 2023

By: /s/ John A. Luke, Jr. *

John A. Luke, Jr., Director

Date: February 16, 2023

By: /s/ Christopher L. Mapes *

Christopher L. Mapes, Director

Date: February 16, 2023

By: /s/ James F. Palmer *

James F. Palmer, Director

Date: February 16, 2023

By: /s/ Ajita G. Rajendra *

Ajita G. Rajendra, Director

Date: February 16, 2023

By: /s/ Frank C. Sullivan *

Frank C. Sullivan, Director

Date: February 16, 2023

By: /s/ John M. Timken, Jr.*

John M. Timken, Jr., Director

Date: February 16, 2023

By: /s/ Ward J. Timken, Jr.*

Ward J. Timken, Jr., Director

Date: February 16, 2023

By: /s/ Jacqueline F. Woods *

Jacqueline F. Woods, Director

Date: February 16, 2023

By: /s/ Philip D. Fracassa

Philip D. Fracassa, attorney-in-fact

* By authority of Power of Attorney

filed as Exhibit 24 hereto

Date: February 16, 2023

106

Schedule II—Valuation and Qualifying Accounts

The Timken Company and Subsidiaries

Allowance for uncollectible accounts:
Balance at beginning of period

Additions:

Charged to costs and expenses (1)

Deductions:

Charged to costs and expenses (3)
Charged to other accounts (2)

Balance at end of period

Allowance for surplus and obsolete inventory:

Balance at beginning of period

Additions:

Charged to costs and expenses (4)
Charged to other accounts (2)

Deductions(5)
Balance at end of period

Valuation allowance on deferred tax assets:

Balance at beginning of period

Additions:

Charged to costs and expenses (6)
Charged to other accounts (2)

Deductions

Charged to costs and expenses (7)
Charged to other accounts (2)

Balance at end of period

2022

2021

2020

$

16.9 $

16.5 $

18.1

3.7

0.4

2.3
17.9 $

$

3.5

2.5

0.6

2.8

3.4

1.0

16.9 $

16.5

2022

2021

2020

$

63.3 $

54.5 $

40.1

12.9

1.2

19.0
58.4 $

$

13.4

(0.7)

3.9

63.3 $

11.6

11.8

9.0

54.5

2022

2021

2020

$

31.0 $

36.7 $

33.7

3.1

—

0.9

1.9
31.3 $

$

3.1

—

7.8

1.0

2.7

1.0

0.7

—

31.0 $

36.7

(1)  Provision for uncollectible accounts included in expenses.
(2)  Currency translation and change in reserves due to acquisitions, net of divestitures.
(3)  Actual accounts written off against the allowance, net of recoveries.
(4)  Provision for surplus and obsolete inventory included in expenses.
(5)  Inventory items written off against the allowance.
(6)  Increase in valuation allowance is recorded as a component of the provision for income taxes.
(7)  Amount relates to the reversal of valuation allowances and was recorded as a component of the provision 
for income taxes. The Company released $7.8 million of foreign valuation allowances for the year ended 
December 31, 2021. Refer to Note 5 - Income Taxes in the Notes to the Consolidated Financial Statements 
for further discussion on valuation allowance reversals.

107

Exhibit 31.1

Principal Executive Officer’s Certifications
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Richard G. Kyle, certify that:

1.	

I	have	reviewed	this	annual	report	on	Form	10-K	of	The	Timken	Company;

2.	 Based	on	my	knowledge,	this	report	does	not	contain	any	untrue	statement	of	a	material	fact	or	omit	to	state	a	
material	fact	necessary	to	make	the	statements	made,	in	light	of	the	circumstances	under	which	such	statements	
were	made,	not	misleading	with	respect	to	the	period	covered	by	this	report;

3.	 Based	on	my	knowledge,	the	financial	statements,	and	other	financial	information	included	in	this	report,	fairly	
present	in	all	material	respects	the	financial	condition,	results	of	operations	and	cash	flows	of	the	registrant	as	of,	
and	for,	the	periods	presented	in	this	report;

4.	 The	registrant’s	other	certifying	officer	and	I	are	responsible	for	establishing	and	maintaining	disclosure	controls	
and	procedures	(as	defined	in	Exchange	Act	Rules	13a-15(e)	and	15d-15(e))	and	internal	control	over	financial	
reporting	(as	defined	in	Exchange	Act	Rules	13a-15(f)	and	15d-15(f))	for	the	registrant	and	have:

a.	 		 	Designed	such	disclosure	controls	and	procedures,	or	caused	such	disclosure	controls	and	procedures	to	
be	designed	under	our	supervision,	to	ensure	that	material	information	relating	to	the	registrant,	including	its	
consolidated	subsidiaries,	is	made	known	to	us	by	others	within	those	entities,	particularly	during	the	period	
in	which	this	report	is	being	prepared;

b.	 	 	Designed	such	internal	control	over	financial	reporting,	or	caused	such	internal	control	over	financial	reporting	
to	be	designed	under	our	supervision,	to	provide	reasonable	assurance	regarding	the	reliability	of	financial	
reporting	 and	 the	 preparation	 of	 financial	 statements	 for	 external	 purposes	 in	 accordance	 with	 generally	
accepted	accounting	principles;

c.	 	 	Evaluated	 the	 effectiveness	 of	 the	 registrant’s	 disclosure	 controls	 and	 procedures	 and	 presented	 in	 this	
report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the 
period	covered	by	this	report	based	on	such	evaluation;	and

d.	 	 	Disclosed	in	this	report	any	change	in	the	registrant’s	internal	control	over	financial	reporting	that	occurred	
during	the	registrant’s	most	recent	fiscal	quarter	(the	registrant’s	fourth	fiscal	quarter	in	the	case	of	an	annual	
report)	that	has	materially	affected,	or	is	reasonably	likely	to	materially	affect,	the	registrant’s	internal	control	
over	financial	reporting:	and

5.	 The	registrant’s	other	certifying	officer	and	I	have	disclosed,	based	on	our	most	recent	evaluation	of	internal	control	
over	financial	reporting,	to	the	registrant’s	auditors	and	the	audit	committee	of	registrant’s	board	of	directors	(or	
persons	performing	the	equivalent	functions):

(a)		 	 	All	 significant	 deficiencies	 and	 material	 weaknesses	 in	 the	 design	 or	 operation	 of	 internal	 control	 over	
financial	reporting	which	are	reasonably	likely	to	adversely	affect	the	registrant’s	ability	to	record,	process,	
summarize	and	report	financial	information;	and

(b)		 	 	Any	fraud,	whether	or	not	material,	that	involves	management	or	other	employees	who	have	a	significant	

role	in	the	registrant’s	internal	control	over	financial	reporting.

Date:	February	16,	2023	

By:	/s/	Richard	G.	Kyle
Richard G. Kyle
President	and	Chief	Executive	Officer
(Principal	Executive	Officer)

108

Exhibit 31.2

Principal	Financial	Officer’s	Certifications
Pursuant	to	Section	302	of	the	Sarbanes-Oxley	Act	of	2002

I,	Philip	D.	Fracassa,	certify	that:

1.	

I	have	reviewed	this	annual	report	on	Form	10-K	of	The	Timken	Company;

2.	 Based	on	my	knowledge,	this	report	does	not	contain	any	untrue	statement	of	a	material	fact	or	omit	to	state	a	
material	fact	necessary	to	make	the	statements	made,	in	light	of	the	circumstances	under	which	such	statements	
were	made,	not	misleading	with	respect	to	the	period	covered	by	this	report;

3.	 Based	on	my	knowledge,	the	financial	statements,	and	other	financial	information	included	in	this	report,	fairly	
present	in	all	material	respects	the	financial	condition,	results	of	operations	and	cash	flows	of	the	registrant	as	of,	
and	for,	the	periods	presented	in	this	report;

4.	 The	registrant’s	other	certifying	officer	and	I	are	responsible	for	establishing	and	maintaining	disclosure	controls	
and	procedures	(as	defined	in	Exchange	Act	Rules	13a-15(e)	and	15d-15(e))	and	internal	control	over	financial	
reporting	(as	defined	in	Exchange	Act	Rules	13a-15(f)	and	15d-15(f))	for	the	registrant	and	have:

(a)		 	 		Designed	such	disclosure	controls	and	procedures,	or	caused	such	disclosure	controls	and	procedures	to	
be	designed	under	our	supervision,	to	ensure	that	material	information	relating	to	the	registrant,	including	its	
consolidated	subsidiaries,	is	made	known	to	us	by	others	within	those	entities,	particularly	during	the	period	
in	which	this	report	is	being	prepared;

(b)		 	 	Designed	 such	 internal	 control	 over	 financial	 reporting,	 or	 caused	 such	 internal	 control	 over	 financial	
reporting	to	be	designed	under	our	supervision,	to	provide	reasonable	assurance	regarding	the	reliability	
of	financial	reporting	and	the	preparation	of	financial	statements	for	external	purposes	in	accordance	with	
generally	accepted	accounting	principles;

(c)		 	 	Evaluated	 the	 effectiveness	 of	 the	 registrant’s	 disclosure	 controls	 and	 procedures	 and	 presented	 in	 this	
report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of 
the	period	covered	by	this	report	based	on	such	evaluation;	and

(d)		 	 		Disclosed	in	this	report	any	change	in	the	registrant’s	internal	control	over	financial	reporting	that	occurred	
during	 the	 registrant’s	 most	 recent	 fiscal	 quarter	 (the	 registrant’s	 fourth	 fiscal	 quarter	 in	 the	 case	 of	 an	
annual	report)	that	has	materially	affected,	or	is	reasonably	likely	to	materially	affect,	the	registrant’s	internal	
control	over	financial	reporting:	and

5.	 The	registrant’s	other	certifying	officer	and	I	have	disclosed,	based	on	our	most	recent	evaluation	of	internal	control	
over	financial	reporting,	to	the	registrant’s	auditors	and	the	audit	committee	of	registrant’s	board	of	directors	(or	
persons	performing	the	equivalent	functions):

(a)		 	 		All	 significant	 deficiencies	 and	 material	 weaknesses	 in	 the	 design	 or	 operation	 of	 internal	 control	 over	
financial	reporting	which	are	reasonably	likely	to	adversely	affect	the	registrant’s	ability	to	record,	process,	
summarize	and	report	financial	information;	and

(b)		 	 	Any	fraud,	whether	or	not	material,	that	involves	management	or	other	employees	who	have	a	significant	

role	in	the	registrant’s	internal	control	over	financial	reporting.

Date:	February	16,	2023	

By:	/s/	Philip	D.	Fracassa
Philip	D.	Fracassa
Executive	Vice	President	and	Chief	Financial	Officer
(Principal	Financial	Officer	and	Principal	Accounting	
Officer)

109

Certification Pursuant to
18	U.S.C.	Section	1350,
As Adopted Pursuant to
	Section	906	of	the	Sarbanes-Oxley	Act	of	2002

Exhibit 32

In	connection	with	the	annual	report	of	The	Timken	Company	(the	“Company”)	on	Form	10-K	for	the	period	ended	
December	31,	2022,	as	filed	with	the	Securities	and	Exchange	Commission	on	the	date	hereof	(the	“Report”),	each	
of	the	undersigned	officers	of	the	Company	certifies,	pursuant	to	18	U.S.C.	1350,	as	adopted	pursuant	to	906	of	the	
Sarbanes-Oxley	Act	of	2002,	that,	to	such	officer’s	knowledge:

(1)		 		The	Report	fully	complies	with	the	requirements	of	Section	13(a)	or	15(d)	of	the	Securities	Exchange	Act	of	

1934;	and

(2)		 		The	information	contained	in	the	Report	fairly	presents,	in	all	material	respects,	the	financial	condition	and	

results	of	operations	of	the	Company	as	of	the	dates	and	for	the	periods	expressed	in	the	Report.

Date:	February	16,	2023	

By:	/s/	Richard	G.	Kyle
Richard G. Kyle
President and Chief Executive Officer
(Principal	Executive	Officer)

By:	/s/	Philip	D.	Fracassa
Philip	D.	Fracassa
Executive	Vice	President	and	Chief	Financial	Officer
(Principal	Financial	Officer	and	Principal	Accounting	Officer)

The	foregoing	certification	is	being	furnished	solely	pursuant	to	18	U.S.C.	1350	and	is	not	being	filed	as	part	of	the	
Report	or	as	a	separate	disclosure	document.

110

(This page intentionally left blank.)(This page intentionally left blank.)Appendix: Reconciliation of GAAP to Non-GAAP Measures

Reconciliation of Net Income to Adjusted Net Income,  
EBITDA and Margin1

2017

20166

20167

Net Sales

$

3,003.8

$

2,669.8

$

2,669.8

Net Income Attributable to The Timken Company

Impairment,	restructuring	and	reorganization	charges2

Corporate	pension	and	other	postretirement	 
   benefit related expense3

Acquisition-related	charges4

Gain on divestitures and sale of real estate

Tax	indemnification	and	related	items

Health	care	plan	modification	costs

CDSOA	income,	net	of	expense

Provision	for	income	taxes

203.4

13.1

18.1

9.0

(3.6)

(1.0)

(0.7)

—

(30.8)

140.8

28.0

67.0

4.2

(0.5)

—

2.9

(59.6)

(13.8)

152.6

28.0

28.1

4.2

(0.5)

—

2.9

(59.6)

0.5

Adjusted Net Income

$

207.5

$

169.0

$

156.2

Net	income	attributable	to	noncontrolling	interest

Provision	for	income	taxes	(as	reported)

Interest expense

Interest	income

Depreciation	and	amortization	expense5

Less:	Provision	for	income	taxes

(1.1)

57.6

37.1

(2.9)

135.8

(30.8)

0.3

60.5

33.5

(1.9)

130.2

(13.8)

0.3

69.2

33.5

(1.9)

130.2

0.5

Adjusted EBITDA

$

464.8

$

405.4

$

387.0

Adjusted	EBITDA	Margin	(%	of	net	sales)

15.5%

15.2%

14.5%

Reconciliation of Diluted EPS to Adjusted EPS1

Diluted Earnings Per Share (EPS)

Adjusted EPS

Diluted Shares

$

$

2.58

2.63

$

$

1.78

2.13

$

$

1.92

1.97

78,911,149

79,234,324

79,234,324

1	

	Management	believes	consolidated	earnings	before	interest,	taxes,	depreciation	and	amortization	(EBITDA)	is	a	non-GAAP	measure	
that	is	useful	to	investors	as	it	is	representative	of	the	Company’s	performance	and	that	it	is	appropriate	to	compare	GAAP	net	income	to	
consolidated	EBITDA.	Management	also	believes	that	non-GAAP	measures	of	adjusted	EBITDA,	adjusted	EBITDA	margin,	adjusted	net	
income	and	adjusted	diluted	earnings	per	share	are	useful	to	investors	as	they	are	representative	of	the	Company’s	core	operations	and	are	
used	in	the	management	of	the	business,	including	decisions	concerning	the	allocation	of	resources	and	assessment	of	performance.

2	 	Impairment,	restructuring	and	reorganization	charges	(including	items	recorded	in	cost	of	products	sold)	are	related	to:	(i)	plant	closures;	

(ii)	the	rationalization	of	certain	plants;	(iii)	severance	related	to	cost	reduction	initiatives	and	(iv)	related	depreciation	and	amortization.	The	
Company	re-assesses	its	operating	footprint	and	cost	structure	periodically,	and	makes	adjustments	as	needed	that	result	in	restructuring	
charges.	However,	management	believes	these	actions	are	not	representative	of	the	Company’s	core	operations.

3	 	Corporate	pension	and	other	postretirement	benefit	related	expense	primarily	represents	actuarial	losses	and	(gains)	that	resulted	from	

the	remeasurement	of	plan	assets	and	obligations	as	a	result	of	changes	in	assumptions.	The	Company	recognizes	actuarial	losses	and	
(gains)	through	earnings	in	connection	with	the	annual	remeasurement	in	the	fourth	quarter,	or	on	an	interim	basis	if	specific	events	trigger	a	
remeasurement.	Corporate	pension	and	other	postretirement	benefit	related	expense	also	include	curtailments.

4	 	The	acquisition-related	charges	represent	deal-related	expenses	associated	with	completed	transactions	and	certain	unsuccessful	

transactions,	as	well	as	any	resulting	inventory	step-up	impact.

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

6	 2016	results	depicted	above	are	revised	for	the	adoption	of	mark-to-market	accounting.

7	 2016	results	are	as	originally	reported	prior	to	the	adoption	of	mark-to-market	accounting.

 
 
World Headquarters 

Publications 

Shareholder Information 

The Timken Company 
4500 Mount Pleasant St. NW 
North Canton, OH 44720-5450

234-262-3000

www.timken.com

Stock Listing 

Timken shares are traded on the  
New York Stock Exchange under  
the symbol TKR.

Annual Meeting of Shareholders 

May 5, 2023, 10 a.m.  
Online-only format, with  
attendance via the Internet

Independent Registered  
Public Accounting Firm 

Ernst & Young LLP  
950 Main Ave.  
Suite 1800  
Cleveland, OH 44113-7214

The Annual Meeting Notice  
and Proxy Card are mailed to 
shareholders in March.

Copies of the Annual Report,  
Proxy Statement, Forms 10-K  
and 10-Q may be obtained  
from the company’s website,  
http://investors.timken.com/  
or by written request at no  
charge from:

The Timken Company  
Treasury/Shareholder Relations  
WHQ-03  
4500 Mount Pleasant St. NW  
North Canton, OH 44720-5450

Investor Relations 

Neil Frohnapple  
Director — Investor Relations  
The Timken Company  
4500 Mount Pleasant St. NW  
North Canton, OH 44720-5450

234-262-2310 
neil.frohnapple@timken.com

Dividends on common shares are 
generally payable in March, June, 
September and December.

The Timken Company offers an open 
enrollment dividend reinvestment 
and stock purchase plan through 
its transfer agent EQ. This program 
allows current shareholders and 
new investors the opportunity to 
purchase common shares without  
a broker.

Shareholders of record may increase 
their investment in the company by 
reinvesting their dividends at no  
cost. Shares held in the name of 
a broker must be transferred to 
the shareholder’s name to permit 
reinvestment. Information and 
enrollment materials are available 
online or by contacting EQ.

Inquiries regarding dividend 
reinvestment, dividend payments, 
(cid:70)(cid:75)(cid:68)(cid:81)(cid:74)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:68)(cid:71)(cid:71)(cid:85)(cid:72)(cid:86)(cid:86)(cid:3)(cid:82)(cid:85)(cid:3)(cid:79)(cid:82)(cid:86)(cid:87)(cid:3)(cid:70)(cid:72)(cid:85)(cid:87)(cid:76)(cid:403)(cid:70)(cid:68)(cid:87)(cid:72)(cid:86)(cid:3)

should be directed to:

EQ 
Shareowner Services  
P.O. Box 64874  
St. Paul, MN 55164-0874

800-468-9716 or 
651-450-4064

www.shareowneronline.com

412691_TKR 2022 AR Cover_Print.indd   2

3/6/23   9:16 PM

4.2M 03-20-23 Order No. 11482  |  Timken® is a registered trademark of The Timken Company  |  © 2023 The Timken Company  |  Printed in the U.S.A.

412691_TKR 2022 AR Cover_Print.indd   1

3/6/23   9:16 PM