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September 30, 2014 | December 31, 2013 | ||||||
Inventories, net: | |||||||
Manufacturing supplies | $36.0 | $32.8 | |||||
Raw materials | 58.2 | 42.9 | |||||
Work in process | 103.2 | 81.6 | |||||
Finished products | 78.1 | 71.6 | |||||
Subtotal | 275.5 | 228.9 | |||||
Allowance for surplus and obsolete inventory | (2.4 | ) | (1.9 | ) | |||
Total Inventories, net | $273.1 | $227.0 |
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September 30, 2014 | December 31, 2013 | ||||||
Property, Plant and Equipment, net: | |||||||
Land and buildings | $288.8 | $250.3 | |||||
Machinery and equipment | 1,200.5 | 1,159.7 | |||||
Construction-in-progress | 276.1 | 220.0 | |||||
Subtotal | 1,765.4 | 1,630.0 | |||||
Less allowances for depreciation | (1,007.9 | ) | (947.4 | ) | |||
Property, Plant and Equipment, net | $757.5 | $682.6 |
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September 30, 2014 | December 31, 2013 | ||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||
Intangible Assets Subject to Amortization: | |||||||||||||||||||||||
Customer relationships | $6.8 | $2.3 | $4.5 | $6.8 | $2.0 | $4.8 | |||||||||||||||||
Technology use | 9.0 | 3.9 | 5.1 | 9.0 | 3.5 | 5.5 | |||||||||||||||||
Non-compete agreements | 1.0 | 1.0 | — | 1.0 | 1.0 | — | |||||||||||||||||
16.8 | 7.2 | 9.6 | 16.8 | 6.5 | 10.3 | ||||||||||||||||||
Intangible Assets not Subject to Amortization: | |||||||||||||||||||||||
Tradename | 0.9 | — | 0.9 | 0.9 | — | 0.9 | |||||||||||||||||
0.9 | — | 0.9 | 0.9 | — | 0.9 | ||||||||||||||||||
Total Intangible Assets | $17.7 | $7.2 | $10.5 | $17.7 | $6.5 | $11.2 |
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September 30, 2014 | December 31, 2013 | ||||||
Variable-rate State of Ohio Water Development Revenue Refunding Bonds, maturing on November 1, 2025 (0.04% as of September 30, 2014) | $12.2 | $12.2 | |||||
Variable-rate State of Ohio Air Quality Development Revenue Refunding Bonds, maturing on November 1, 2025 (0.04% as of September 30, 2014) | 9.5 | 9.5 | |||||
Variable-rate State of Ohio Pollution Control Revenue Refunding Bonds, maturing on June 1, 2033 (0.04% as of September 30, 2014) | 8.5 | 8.5 | |||||
Revolving credit facility, due 2019 (LIBOR plus applicable spread) | 100.0 | — | |||||
Total Long-Term Debt | $130.2 | $30.2 |
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Foreign Currency Translation Adjustments | Pension and Postretirement Liability Adjustments | Total | |||||||||
Balance at June 30, 2014 | ($3.2 | ) | ($231.0 | ) | ($234.2 | ) | |||||
Other comprehensive income before reclassifications, before income tax | (0.6 | ) | 0.7 | 0.1 | |||||||
Amounts reclassified from accumulated other comprehensive loss, before income tax | — | 7.4 | 7.4 | ||||||||
Income tax benefit | — | (2.6 | ) | (2.6 | ) | ||||||
Net current period other comprehensive income, net of income tax | (0.6 | ) | 5.5 | 4.9 | |||||||
Balance at September 30, 2014 | ($3.8 | ) | ($225.5 | ) | ($229.3 | ) |
Foreign Currency Translation Adjustments | Pension and Postretirement Liability Adjustments | Total | |||||||||
Balance at December 31, 2013 | ($0.4 | ) | $— | ($0.4 | ) | ||||||
Net transfer from Timken | (3.2 | ) | (233.9 | ) | (237.1 | ) | |||||
Other comprehensive income before reclassifications, before income tax | (0.2 | ) | 0.7 | 0.5 | |||||||
Amounts reclassified from accumulated other comprehensive loss, before income tax | — | 12.0 | 12.0 | ||||||||
Income tax benefit | — | (4.3 | ) | (4.3 | ) | ||||||
Net current period other comprehensive income, net of income tax | (0.2 | ) | 8.4 | 8.2 | |||||||
Balance at September 30, 2014 | ($3.8 | ) | ($225.5 | ) | ($229.3 | ) |
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Total | Additional Paid-in Capital | Net Parent Investment | Retained Earnings | Treasury Shares | Accumulated Other Comprehensive Loss | ||||||||||||||||||
Balance as of December 31, 2013 | $800.8 | $— | $801.2 | $— | $— | ($0.4 | ) | ||||||||||||||||
Net income | 88.0 | — | 62.3 | 25.7 | — | — | |||||||||||||||||
Pension and postretirement adjustment, net of tax | 8.4 | — | — | — | — | 8.4 | |||||||||||||||||
Foreign currency translation adjustments | (0.2 | ) | — | — | — | — | (0.2 | ) | |||||||||||||||
Stock-based compensation expense | 4.3 | 2.3 | 2.0 | — | — | — | |||||||||||||||||
Dividends – $0.14 per share | (6.4 | ) | — | — | (6.4 | ) | — | — | |||||||||||||||
Net transfer (to)/from Parent and affiliates | (71.2 | ) | — | 165.9 | — | — | (237.1 | ) | |||||||||||||||
Reclassification of net parent investment to additional paid-in capital | — | 1,031.4 | (1,031.4 | ) | — | — | — | ||||||||||||||||
Settlement of asset and liability transfer with Timken | 1.7 | 1.7 | — | — | — | — | |||||||||||||||||
Stock option exercise activity | 5.8 | 5.8 | — | — | — | — | |||||||||||||||||
Shares surrendered for taxes | (4.1 | ) | — | — | — | (4.1 | ) | — | |||||||||||||||
Balance as of September 30, 2014 | $827.1 | $1,041.2 | $— | $19.3 | ($4.1 | ) | ($229.3 | ) |
Nine Months Ended | |||
September 30, 2014 | |||
Net transfer (to)/from Parent and affiliates - Equity | ($71.2 | ) | |
Dividend paid to Parent | 50.0 | ||
Net transfer of assets and liabilities from Parent | 25.0 | ||
Net transfers from/(to) Parent and affiliates - Cash Flow | $3.8 |
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Three Months Ended September 30, 2014 | Three Months Ended September 30, 2013 | ||||||||||||||
Components of net periodic benefit cost: | Pension | Postretirement | Pension | Postretirement | |||||||||||
Service cost | $3.8 | $0.4 | $— | $— | |||||||||||
Interest cost | 12.7 | 2.4 | — | — | |||||||||||
Expected return on plan assets | (19.3 | ) | (1.6 | ) | — | — | |||||||||
Amortization of prior service cost | 0.2 | 0.2 | — | — | |||||||||||
Amortization of net actuarial loss | 7.0 | — | — | — | |||||||||||
Allocated benefit cost from Timken | — | — | 6.0 | 1.6 | |||||||||||
Net Periodic Benefit Cost | $4.4 | $1.4 | $6.0 | $1.6 |
Nine Months Ended September 30, 2014 | Nine Months Ended September 30, 2013 | ||||||||||||||
Components of net periodic benefit cost: | Pension | Postretirement | Pension | Postretirement | |||||||||||
Service cost | $6.4 | $0.7 | $— | $— | |||||||||||
Interest cost | 20.5 | 4.0 | — | — | |||||||||||
Expected return on plan assets | (31.4 | ) | (2.7 | ) | — | — | |||||||||
Amortization of prior service cost | 0.3 | 0.3 | — | — | |||||||||||
Amortization of net actuarial loss | 11.4 | — | — | — | |||||||||||
Allocated benefit cost from Timken | 5.2 | 2.2 | 17.9 | 4.8 | |||||||||||
Net Periodic Benefit Cost | $12.4 | $4.5 | $17.9 | $4.8 |
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Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Net Sales: | |||||||||||||||
Industrial & Mobile | $240.8 | $218.9 | $727.3 | $660.8 | |||||||||||
Energy & Distribution | 193.4 | 131.6 | 538.6 | 390.1 | |||||||||||
$434.2 | $350.5 | $1,265.9 | $1,050.9 | ||||||||||||
Segment EBIT: | |||||||||||||||
Industrial & Mobile | $20.3 | $21.5 | $67.7 | $67.6 | |||||||||||
Energy & Distribution | 27.8 | 12.8 | 84.2 | 45.8 | |||||||||||
Total Segment EBIT | $48.1 | $34.3 | $151.9 | $113.4 | |||||||||||
Unallocated (1) | (8.2 | ) | (7.5 | ) | (16.1 | ) | (15.7 | ) | |||||||
Interest expense | (0.2 | ) | (0.2 | ) | (0.9 | ) | (0.2 | ) | |||||||
Income Before Income Taxes | $39.7 | $26.6 | $134.9 | $97.5 |
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Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Provision for income taxes | $14.0 | $9.5 | $46.9 | $34.1 | |||||||||||
Effective tax rate | 35.3 | % | 35.7 | % | 34.8 | % | 35.0 | % |
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September 30, 2014 | December 31, 2013 | ||||||
Inventories, net: | |||||||
Manufacturing supplies | $36.0 | $32.8 | |||||
Raw materials | 58.2 | 42.9 | |||||
Work in process | 103.2 | 81.6 | |||||
Finished products | 78.1 | 71.6 | |||||
Subtotal | 275.5 | 228.9 | |||||
Allowance for surplus and obsolete inventory | (2.4 | ) | (1.9 | ) | |||
Total Inventories, net | $273.1 | $227.0 |
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September 30, 2014 | December 31, 2013 | ||||||
Property, Plant and Equipment, net: | |||||||
Land and buildings | $288.8 | $250.3 | |||||
Machinery and equipment | 1,200.5 | 1,159.7 | |||||
Construction-in-progress | 276.1 | 220.0 | |||||
Subtotal | 1,765.4 | 1,630.0 | |||||
Less allowances for depreciation | (1,007.9 | ) | (947.4 | ) | |||
Property, Plant and Equipment, net | $757.5 | $682.6 |
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September 30, 2014 | December 31, 2013 | ||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||
Intangible Assets Subject to Amortization: | |||||||||||||||||||||||
Customer relationships | $6.8 | $2.3 | $4.5 | $6.8 | $2.0 | $4.8 | |||||||||||||||||
Technology use | 9.0 | 3.9 | 5.1 | 9.0 | 3.5 | 5.5 | |||||||||||||||||
Non-compete agreements | 1.0 | 1.0 | — | 1.0 | 1.0 | — | |||||||||||||||||
16.8 | 7.2 | 9.6 | 16.8 | 6.5 | 10.3 | ||||||||||||||||||
Intangible Assets not Subject to Amortization: | |||||||||||||||||||||||
Tradename | 0.9 | — | 0.9 | 0.9 | — | 0.9 | |||||||||||||||||
0.9 | — | 0.9 | 0.9 | — | 0.9 | ||||||||||||||||||
Total Intangible Assets | $17.7 | $7.2 | $10.5 | $17.7 | $6.5 | $11.2 |
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September 30, 2014 | December 31, 2013 | ||||||
Variable-rate State of Ohio Water Development Revenue Refunding Bonds, maturing on November 1, 2025 (0.04% as of September 30, 2014) | $12.2 | $12.2 | |||||
Variable-rate State of Ohio Air Quality Development Revenue Refunding Bonds, maturing on November 1, 2025 (0.04% as of September 30, 2014) | 9.5 | 9.5 | |||||
Variable-rate State of Ohio Pollution Control Revenue Refunding Bonds, maturing on June 1, 2033 (0.04% as of September 30, 2014) | 8.5 | 8.5 | |||||
Revolving credit facility, due 2019 (LIBOR plus applicable spread) | 100.0 | — | |||||
Total Long-Term Debt | $130.2 | $30.2 |
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Foreign Currency Translation Adjustments | Pension and Postretirement Liability Adjustments | Total | |||||||||
Balance at June 30, 2014 | ($3.2 | ) | ($231.0 | ) | ($234.2 | ) | |||||
Other comprehensive income before reclassifications, before income tax | (0.6 | ) | 0.7 | 0.1 | |||||||
Amounts reclassified from accumulated other comprehensive loss, before income tax | — | 7.4 | 7.4 | ||||||||
Income tax benefit | — | (2.6 | ) | (2.6 | ) | ||||||
Net current period other comprehensive income, net of income tax | (0.6 | ) | 5.5 | 4.9 | |||||||
Balance at September 30, 2014 | ($3.8 | ) | ($225.5 | ) | ($229.3 | ) |
Foreign Currency Translation Adjustments | Pension and Postretirement Liability Adjustments | Total | |||||||||
Balance at December 31, 2013 | ($0.4 | ) | $— | ($0.4 | ) | ||||||
Net transfer from Timken | (3.2 | ) | (233.9 | ) | (237.1 | ) | |||||
Other comprehensive income before reclassifications, before income tax | (0.2 | ) | 0.7 | 0.5 | |||||||
Amounts reclassified from accumulated other comprehensive loss, before income tax | — | 12.0 | 12.0 | ||||||||
Income tax benefit | — | (4.3 | ) | (4.3 | ) | ||||||
Net current period other comprehensive income, net of income tax | (0.2 | ) | 8.4 | 8.2 | |||||||
Balance at September 30, 2014 | ($3.8 | ) | ($225.5 | ) | ($229.3 | ) |
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Total | Additional Paid-in Capital | Net Parent Investment | Retained Earnings | Treasury Shares | Accumulated Other Comprehensive Loss | ||||||||||||||||||
Balance as of December 31, 2013 | $800.8 | $— | $801.2 | $— | $— | ($0.4 | ) | ||||||||||||||||
Net income | 88.0 | — | 62.3 | 25.7 | — | — | |||||||||||||||||
Pension and postretirement adjustment, net of tax | 8.4 | — | — | — | — | 8.4 | |||||||||||||||||
Foreign currency translation adjustments | (0.2 | ) | — | — | — | — | (0.2 | ) | |||||||||||||||
Stock-based compensation expense | 4.3 | 2.3 | 2.0 | — | — | — | |||||||||||||||||
Dividends – $0.14 per share | (6.4 | ) | — | — | (6.4 | ) | — | — | |||||||||||||||
Net transfer (to)/from Parent and affiliates | (71.2 | ) | — | 165.9 | — | — | (237.1 | ) | |||||||||||||||
Reclassification of net parent investment to additional paid-in capital | — | 1,031.4 | (1,031.4 | ) | — | — | — | ||||||||||||||||
Settlement of asset and liability transfer with Timken | 1.7 | 1.7 | — | — | — | — | |||||||||||||||||
Stock option exercise activity | 5.8 | 5.8 | — | — | — | — | |||||||||||||||||
Shares surrendered for taxes | (4.1 | ) | — | — | — | (4.1 | ) | — | |||||||||||||||
Balance as of September 30, 2014 | $827.1 | $1,041.2 | $— | $19.3 | ($4.1 | ) | ($229.3 | ) |
Nine Months Ended | |||
September 30, 2014 | |||
Net transfer (to)/from Parent and affiliates - Equity | ($71.2 | ) | |
Dividend paid to Parent | 50.0 | ||
Net transfer of assets and liabilities from Parent | 25.0 | ||
Net transfers from/(to) Parent and affiliates - Cash Flow | $3.8 |
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Three Months Ended September 30, 2014 | Three Months Ended September 30, 2013 | ||||||||||||||
Components of net periodic benefit cost: | Pension | Postretirement | Pension | Postretirement | |||||||||||
Service cost | $3.8 | $0.4 | $— | $— | |||||||||||
Interest cost | 12.7 | 2.4 | — | — | |||||||||||
Expected return on plan assets | (19.3 | ) | (1.6 | ) | — | — | |||||||||
Amortization of prior service cost | 0.2 | 0.2 | — | — | |||||||||||
Amortization of net actuarial loss | 7.0 | — | — | — | |||||||||||
Allocated benefit cost from Timken | — | — | 6.0 | 1.6 | |||||||||||
Net Periodic Benefit Cost | $4.4 | $1.4 | $6.0 | $1.6 |
Nine Months Ended September 30, 2014 | Nine Months Ended September 30, 2013 | ||||||||||||||
Components of net periodic benefit cost: | Pension | Postretirement | Pension | Postretirement | |||||||||||
Service cost | $6.4 | $0.7 | $— | $— | |||||||||||
Interest cost | 20.5 | 4.0 | — | — | |||||||||||
Expected return on plan assets | (31.4 | ) | (2.7 | ) | — | — | |||||||||
Amortization of prior service cost | 0.3 | 0.3 | — | — | |||||||||||
Amortization of net actuarial loss | 11.4 | — | — | — | |||||||||||
Allocated benefit cost from Timken | 5.2 | 2.2 | 17.9 | 4.8 | |||||||||||
Net Periodic Benefit Cost | $12.4 | $4.5 | $17.9 | $4.8 |
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Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Net Sales: | |||||||||||||||
Industrial & Mobile | $240.8 | $218.9 | $727.3 | $660.8 | |||||||||||
Energy & Distribution | 193.4 | 131.6 | 538.6 | 390.1 | |||||||||||
$434.2 | $350.5 | $1,265.9 | $1,050.9 | ||||||||||||
Segment EBIT: | |||||||||||||||
Industrial & Mobile | $20.3 | $21.5 | $67.7 | $67.6 | |||||||||||
Energy & Distribution | 27.8 | 12.8 | 84.2 | 45.8 | |||||||||||
Total Segment EBIT | $48.1 | $34.3 | $151.9 | $113.4 | |||||||||||
Unallocated (1) | (8.2 | ) | (7.5 | ) | (16.1 | ) | (15.7 | ) | |||||||
Interest expense | (0.2 | ) | (0.2 | ) | (0.9 | ) | (0.2 | ) | |||||||
Income Before Income Taxes | $39.7 | $26.6 | $134.9 | $97.5 |
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Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Provision for income taxes | $14.0 | $9.5 | $46.9 | $34.1 | |||||||||||
Effective tax rate | 35.3 | % | 35.7 | % | 34.8 | % | 35.0 | % |
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