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Tuesday, November 5, 2024

11:00 a.m. Eastern Time

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(Call in 10 minutes prior to be included.)

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The Timken Company

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Dollars in millions, except share data) (Unaudited)

Three Months Ended
September 30,

Nine Months Ended
September 30,

2024

2023

2024

2023

Net sales

$

1,126.8

$

1,142.7

$

3,499.4

$

3,677.8

Cost of products sold

782.4

787.1

2,383.8

2,500.0

Selling, general & administrative expenses

189.7

179.6

564.5

551.3

Amortization of intangible assets

19.7

17.5

58.7

48.3

Impairment and restructuring charges

2.5

8.9

8.1

40.3

Gain on sale of real estate

(13.8)

—

(13.8)

—

Operating Income

146.3

149.6

498.1

537.9

Non-service pension and other postretirement expense

(0.9)

(0.9)

(2.9)

(0.8)

Other (expense) income, net

(6.3)

0.4

(6.0)

5.8

Interest expense, net

(26.9)

(24.9)

(85.8)

(73.9)

Income Before Income Taxes

112.2

124.2

403.4

469.0

Provision for income taxes

24.6

33.3

103.2

122.9

Net Income

87.6

90.9

300.2

346.1

Less: Net income attributable to noncontrolling interest

5.8

3.0

18.7

10.7

Net Income Attributable to The Timken Company

$

81.8

$

87.9

$

281.5

$

335.4

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

    Basic Earnings per share

$

1.17

$

1.24

$

4.01

$

4.68

    Diluted Earnings per share

$

1.16

$

1.23

$

3.98

$

4.63

Average Shares Outstanding

70,120,860

70,878,673

70,246,103

71,740,846

Average Shares Outstanding - assuming dilution

70,663,741

71,535,609

70,793,086

72,456,849

BUSINESS SEGMENTS

(Unaudited)

Three Months Ended
September 30,

Nine Months Ended
September 30,

(Dollars in millions)

2024

2023

2024

2023

Engineered Bearings

Net sales

$

740.7

$

775.6

$

2,326.6

$

2,533.5

Earnings before interest, taxes, depreciation and amortization (EBITDA) ⁽¹⁾

$

150.0

$

148.2

$

492.0

$

538.7

EBITDA Margin ⁽¹⁾

20.3

%

19.1

%

21.1

%

21.3

%

Industrial Motion

Net sales

$

386.1

$

367.1

$

1,172.8

$

1,144.3

Earnings before interest, taxes, depreciation and amortization (EBITDA) ⁽¹⁾

$

70.9

$

70.3

$

223.8

$

199.4

EBITDA Margin ⁽¹⁾

18.4

%

19.2

%

19.1

%

17.4

%

Unallocated corporate expense

$

(25.7)

$

(17.0)

$

(61.0)

$

(47.9)

Corporate pension and other postretirement benefit related income (expense)⁽²⁾

—

(0.2)

—

1.7

Consolidated

Net sales

$

1,126.8

$

1,142.7

$

3,499.4

$

3,677.8

Earnings before interest, taxes, depreciation and amortization (EBITDA) ⁽¹⁾

$

195.2

$

201.3

$

654.8

$

691.9

EBITDA Margin ⁽¹⁾

17.3

%

17.6

%

18.7

%

18.8

%

⁽¹⁾ EBITDA is a non-GAAP measure defined as operating income plus other income (expense) and excluding depreciation and amortization. EBITDA Margin is a non-GAAP measure defined as EBITDA as a percentage of net sales. EBITDA and EBITDA Margin are important financial measures used in the management of the business, including decisions concerning the allocation of resources and assessment of performance. Management believes that reporting EBITDA and EBITDA Margin is useful to investors as these measures are representative of the core operations of the segments and Company, respectively.

⁽²⁾ Corporate pension and other postretirement benefit related income (expense) primarily represents actuarial gains and (losses) that resulted from the remeasurement of plan assets and obligations as a result of changes in assumptions or experience. The Company recognizes actuarial gains and losses in connection with the annual remeasurement in the fourth quarter, or if specific events trigger a remeasurement. Refer to the Retirement Benefit Plans and Other Postretirement Benefit Plans footnotes within the Company's annual reports on Form 10-K and quarterly reports on Form 10-Q for additional discussion.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in millions)

(Unaudited)

September 30,
2024

December 31,
2023

ASSETS

Cash and cash equivalents

$

412.7

$

418.9

Restricted cash

0.7

0.4

Accounts receivable, net

762.0

671.7

Unbilled receivables

162.6

144.5

Inventories, net

1,255.3

1,229.1

Other current assets

138.6

170.3

Total Current Assets

2,731.9

2,634.9

Property, plant and equipment, net

1,314.8

1,311.9

Operating lease assets

119.7

119.7

Goodwill and other intangible assets

2,525.0

2,401.0

Other assets

76.0

74.2

Total Assets

$

6,767.4

$

6,541.7

LIABILITIES

Accounts payable

$

344.6

$

367.2

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

49.7

605.6

Income taxes

30.8

19.9

Accrued expenses

485.2

478.6

Total Current Liabilities

910.3

1,471.3

Long-term debt

2,189.2

1,790.3

Accrued pension benefits

160.9

172.3

Accrued postretirement benefits

30.3

30.2

Long-term operating lease liabilities

75.5

78.7

Other non-current liabilities

310.5

296.5

Total Liabilities

3,676.7

3,839.3

EQUITY

The Timken Company shareholders' equity

2,933.3

2,582.4

Noncontrolling interest

157.4

120.0

Total Equity

3,090.7

2,702.4

Total Liabilities and Equity

$

6,767.4

$

6,541.7

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Three Months Ended
September 30,

Nine Months Ended
September 30,

(Dollars in millions)

2024

2023

2024

2023

Cash Provided by (Used in)

OPERATING ACTIVITIES

Net Income

$

87.6

$

90.9

$

300.2

$

346.1

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

Depreciation and amortization

56.1

52.2

165.6

149.0

Impairment charges

0.1

4.9

2.0

33.2

Gain on divestitures

—

(0.1)

—

(3.7)

Stock-based compensation expense

5.2

5.8

16.7

22.9

Pension and other postretirement expense

1.6

1.5

4.9

2.6

Pension and other postretirement benefit contributions and payments

(6.8)

(16.9)

(22.9)

(24.1)

Changes in operating assets and liabilities:

  Accounts receivable

42.7

100.4

(88.5)

13.0

  Unbilled receivables

(14.5)

(14.6)

(18.3)

(32.3)

  Inventories

8.1

32.3

(12.5)

47.6

  Accounts payable

(30.5)

(43.9)

(16.7)

(58.8)

  Accrued expenses

31.6

14.7

11.1

(14.4)

  Income taxes

(55.5)

(33.7)

(29.0)

(63.2)

  Other, net

(2.5)

0.8

(15.5)

(1.0)

Net Cash Provided by Operating Activities

$

123.2

$

194.3

$

297.1

$

416.9

INVESTING ACTIVITIES

Capital expenditures

$

(35.0)

$

(43.6)

$

(116.4)

$

(134.9)

Acquisitions, net of cash received

(167.3)

(140.1)

(167.7)

(464.7)

Investments in short-term marketable securities, net

(4.3)

(4.8)

16.5

(5.6)

Other, net

16.0

1.4

17.6

6.1

Net Cash Used in Investing Activities

$

(190.6)

$

(187.1)

$

(250.0)

$

(599.1)

FINANCING ACTIVITIES

Cash dividends paid to shareholders

$

(23.8)

$

(23.4)

$

(72.2)

$

(70.8)

Purchase of treasury shares

(1.7)

(63.9)

(31.4)

(218.4)

Proceeds from exercise of stock options

0.1

4.1

5.5

21.3

Payments related to tax withholding for stock-based compensation

—

(1.3)

(10.0)

(16.4)

Net proceeds (payments) from credit facilities

25.4

(88.9)

(456.1)

37.7

Net (payments) proceeds on long-term debt

(1.1)

201.1

285.5

198.5

Proceeds on sale of shares in Timken India Limited

—

—

232.3

284.8

Other, net

(1.1)

(1.1)

(7.8)

(1.1)

Net Cash (Used in) Provided by Financing Activities

$

(2.2)

$

26.6

$

(54.2)

$

235.6

Effect of exchange rate changes on cash

12.0

(11.0)

1.2

(19.0)

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

$

(57.6)

$

22.8

$

(5.9)

$

34.4

Cash, Cash Equivalents and Restricted Cash at Beginning of Period

471.0

352.3

419.3

340.7

Cash, Cash Equivalents and Restricted Cash at End of Period

$

413.4

$

375.1

$

413.4

$

375.1

Reconciliations of Adjusted Net Income to GAAP Net Income and Adjusted Earnings Per Share to GAAP Earnings Per Share:

(Unaudited)

The following reconciliation is provided as additional relevant information about the Company's performance deemed useful to investors. Management believes that the non-GAAP measures of adjusted net income and adjusted diluted earnings per share are important financial measures used in the management of the business, including decisions concerning the allocation of resources and assessment of performance. Management believes that reporting adjusted net income and adjusted diluted earnings per share is useful to investors as these measures are representative of the Company's core operations.

(Dollars in millions, except share data)

Three Months Ended
September 30,

Nine Months Ended
September 30,

2024

EPS

2023

EPS

2024

EPS

2023

EPS

Net Income Attributable to The Timken Company

$

81.8

$

1.16

$

87.9

$

1.23

$

281.5

$

3.98

$

335.4

$

4.63

Adjustments: ⁽¹⁾

  Acquisition intangible amortization

$

19.7

$

17.5

$

58.7

$

48.3

  Impairment, restructuring and reorganization charges ⁽²⁾

3.4

11.6

12.8

47.9

  Corporate pension and other postretirement benefit related (income) expense ⁽³⁾

—

0.2

—

(1.7)

  Acquisition-related charges ⁽⁴⁾

3.1

4.3

10.8

12.8

  Gain on divestitures and sale of certain assets ⁽⁵⁾

(13.8)

(1.5)

(14.7)

(5.9)

  CEO succession expenses ⁽⁶⁾

1.5

—

2.7

—

  Property losses and related expenses ⁽⁷⁾

0.9

—

1.1

—

  Noncontrolling interest of above adjustments

(0.1)

(1.8)

(0.2)

(2.0)

  Provision for income taxes ⁽⁸⁾

(9.5)

(7.0)

(24.8)

(24.0)

      Total Adjustments:

5.2

0.07

23.3

0.32

46.4

0.65

75.4

1.04

Adjusted Net Income Attributable to The Timken Company

$

87.0

$

1.23

$

111.2

$

1.55

$

327.9

$

4.63

$

410.8

$

5.67

⁽¹⁾ Adjustments are pre-tax, with the net tax provision listed separately.

⁽²⁾ 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; and (v) related depreciation and amortization. Impairment, restructuring and reorganization charges for 2023 included $28.3 million related to the impairment of goodwill. 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 (income) expense represents actuarial (gains) and losses that resulted from the remeasurement of plan assets and obligations as a result of changes in assumptions or experience. The Company recognizes actuarial gains and losses in connection with the annual remeasurement in the fourth quarter, or if specific events trigger a remeasurement. Refer to the Retirement Benefit Plans and Other Postretirement Benefit Plans footnotes within the Company's annual reports on Form 10-K and quarterly reports on Form 10-Q for additional discussion.

⁽⁴⁾ Acquisition-related charges represent deal-related expenses associated with completed transactions and any resulting inventory step-up impact.

⁽⁵⁾ Represents the net gain resulting from divestitures and sale of certain assets. Gain on divestitures and sale of certain assets for the third quarter of 2024 included $13.8 million gain related to the sale of the Gaffney, South Carolina plant.

⁽⁶⁾ On March 26, 2024, the Company announced that Richard G. Kyle, President and Chief Executive Officer ("CEO") of the Company would be retiring from his position as CEO and that Tarak Mehta would be appointed CEO on September 5, 2024. CEO succession expenses include the acceleration of certain stock compensation awards for Mr. Kyle and other one-time costs associated with the transition.

⁽⁷⁾ Represents property loss and related expenses incurred during the periods presented resulting from property loss that occurred during the second quarter of 2024 at one of the Company's plants in Slovakia.

⁽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 in interim periods.

Reconciliation of EBITDA to GAAP Net Income, EBITDA Margin to Net Income as a Percentage of Sales, and EBITDA Margin, After Adjustments, to Net Income as a Percentage of Sales, and EBITDA, After Adjustments, to Net Income:

(Unaudited)

The following reconciliation is provided as additional relevant information about the Company's performance deemed useful to investors.  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 adjusted EBITDA, adjusted EBITDA margin and EBITDA margin 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.

(Dollars in millions)

Three Months Ended
September 30,

Nine Months Ended
September 30,

2024

Percentage
to
Net Sales

2023

Percentage
to
Net Sales

2024

Percentage
to
Net Sales

2023

Percentage
to
Net Sales

Net Income

$

87.6

7.8

%

$

90.9

8.0

%

$

300.2

8.6

%

$

346.1

9.4

%

Provision for income taxes

24.6

33.3

103.2

122.9

Interest expense

30.3

27.5

97.1

79.9

Interest income

(3.4)

(2.6)

(11.3)

(6.0)

Depreciation and amortization

56.1

52.2

165.6

149.0

Consolidated EBITDA

$

195.2

17.3

%

$

201.3

17.6

%

$

654.8

18.7

%

$

691.9

18.8

%

Adjustments:

  Impairment, restructuring and reorganization charges ⁽¹⁾

$

3.1

$

11.5

$

11.9

$

47.2

  Corporate pension and other postretirement benefit related (income)
     expense ⁽²⁾

—

0.2

—

(1.7)

  Acquisition-related charges ⁽³⁾

3.1

4.3

10.8

12.8

  Gain on divestitures and sale of certain assets ⁽⁴⁾

(13.8)

(1.5)

(14.7)

(5.9)

  CEO succession expenses ⁽⁵⁾

1.5

—

2.7

—

  Property losses and related expenses ⁽⁶⁾

0.9

—

1.1

—

     Total Adjustments

(5.2)

(0.4)

%

14.5

1.3

%

11.8

0.3

%

52.4

1.4

%

Adjusted EBITDA

$

190.0

16.9

%

$

215.8

18.9

%

$

666.6

19.0

%

$

744.3

20.2

%

⁽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. Impairment, restructuring and reorganization charges for 2023 included $28.3 million related to the impairment of goodwill. 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 (income) expense represents actuarial (gains) and losses that resulted from the remeasurement of plan assets and obligations as a result of changes in assumptions or experience. The Company recognizes actuarial gains and losses in connection with the annual remeasurement in the fourth quarter, or if specific events trigger a remeasurement. Refer to the Retirement Benefit Plans and Other Postretirement Benefit Plans footnotes within the Company's annual reports on Form 10-K and quarterly reports on Form 10-Q for additional discussion.

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

⁽⁴⁾ Represents the net gain resulting from divestitures and sale of certain assets. Gain on divestitures and sale of certain assets for the third quarter of 2024 included $13.8 million gain related to the sale of the Gaffney, South Carolina plant.

⁽⁵⁾ On March 26, 2024, the Company announced that Richard G. Kyle, President and CEO of the Company would be retiring from his position as CEO and that Tarak Mehta would be appointed CEO on September 5, 2024. CEO succession expenses include the acceleration of certain stock compensation awards for Mr. Kyle and other one-time costs associated with the transition.

⁽⁶⁾ Represents property loss and related expenses incurred during the periods presented resulting from property loss that occurred during the second quarter of 2024 at one of the Company's plants in Slovakia.

Reconciliation of segment EBITDA, after adjustments, to segment EBITDA, and segment EBITDA, after adjustments, as a percentage of sales to segment EBITDA, as a percentage of sales:

(Unaudited)

The following reconciliation is provided as additional relevant information about the Company's Engineered Bearings and Industrial Motion segment performance deemed useful to investors. Management believes that non-GAAP measures of adjusted EBITDA and adjusted EBITDA margin for the segments are useful to investors as they are representative of each segment's core operations and are used in the management of the business, including decisions concerning the allocation of resources and assessment of performance.

Engineered Bearings

Three Months Ended
September 30,

Nine Months Ended
September 30,

(Dollars in millions)

2024

Percentage
to Net
Sales

2023

Percentage
to Net
Sales

2024

Percentage
to Net
Sales

2023

Percentage
to Net
Sales

Earnings before interest, taxes, depreciation and amortization (EBITDA)

$

150.0

20.3

%

$

148.2

19.1

%

$

492.0

21.1

%

$

538.7

21.3

%

  Impairment, restructuring and reorganization charges ⁽¹⁾

1.3

9.0

6.4

14.4

  Acquisition-related charges ⁽²⁾

—

0.9

1.2

3.2

  Property losses and related expenses ⁽³⁾

0.9

—

1.1

—

  Gain on divestitures and sale of certain assets ⁽⁴⁾

(13.8)

(1.4)

(14.7)

(6.2)

Adjusted EBITDA

$

138.4

18.7

%

$

156.7

20.2

%

$

486.0

20.9

%

$

550.1

21.7

%

Industrial Motion

Three Months Ended
September 30,

Nine Months Ended
September 30,

(Dollars in millions)

2024

Percentage
to Net
Sales

2023

Percentage
to Net
Sales

2024

Percentage
to Net
Sales

2023

Percentage
to Net
Sales

Earnings before interest, taxes, depreciation and amortization (EBITDA)

$

70.9

18.4

%

$

70.3

19.2

%

$

223.8

19.1

%

$

199.4

17.4

%

  Impairment, restructuring and reorganization charges ⁽¹⁾

1.8

2.5

5.5

32.7

  Acquisition-related charges ⁽²⁾

1.5

2.5

6.7

5.8

  Loss (gain) on divestitures and sale of certain assets ⁽⁴⁾

—

(0.1)

—

0.3

Adjusted EBITDA

$

74.2

19.2

%

$

75.2

20.5

%

$

236.0

20.1

%

$

238.2

20.8

%

⁽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. Impairment, restructuring and reorganization charges for 2023 included $28.3 million related to the impairment of goodwill. 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⁾ The acquisition-related charges represent the inventory step-up impact of the completed acquisitions.

⁽³⁾ Represents property loss and related expenses incurred during the periods presented resulting from property loss that occurred during the second quarter of 2024 at one of the Company's plants in Slovakia.

⁽⁴⁾ Represents the net (gain) loss resulting from divestitures and sale of certain assets. (Gain) loss on divestitures and sale of certain assets for the third quarter of 2024 included $13.8 million gain related to the sale of the Gaffney, South Carolina plant.

Reconciliation of Total Debt to Net Debt, the Ratio of Net Debt to Capital, and the Ratio of Net Debt to Adjusted EBITDA:

(Unaudited)

These reconciliations are provided as additional relevant information about the Company's financial position deemed useful to investors. Capital, used for the ratio of net debt to capital, is a non-GAAP measure defined as total debt less cash and cash equivalents plus total shareholders' equity. Management believes Net Debt, the Ratio of Net Debt to Capital, Adjusted EBITDA (see next page), and the Ratio of Net Debt to Adjusted EBITDA are important measures of the Company's financial position, due to the amount of cash and cash equivalents on hand. 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 ability to cover its net debt obligations with results from its core operations.

(Dollars in millions)

September 30,
2024

December 31,
2023

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

$

49.7

$

605.6

Long-term debt

2,189.2

1,790.3

  Total Debt

$

2,238.9

$

2,395.9

Less: Cash and cash equivalents

(412.7)

(418.9)

Net Debt

$

1,826.2

$

1,977.0

Total Equity

$

3,090.7

$

2,702.4

Ratio of Net Debt to Capital

37.1

%

42.2

%

Adjusted EBITDA for the Twelve Months Ended

$

862.0

$

939.7

Ratio of Net Debt to Adjusted EBITDA

2.1

2.1

Reconciliation of Free Cash Flow to GAAP Net Cash Provided by Operating Activities:

(Unaudited)

Management believes that free cash flow is a non-GAAP measure that is useful to investors because it is a meaningful indicator of cash generated from operating activities available for the execution of its business strategy.

(Dollars in millions)

Three Months Ended
September 30,

Nine Months Ended
September 30,

2024

2023

2024

2023

Net cash provided by operating activities

$

123.2

$

194.3

$

297.1

$

416.9

Less: capital expenditures

(35.0)

(43.6)

(116.4)

(134.9)

Free cash flow

$

88.2

$

150.7

$

180.7

$

282.0

Reconciliation of EBITDA, After Adjustments, to GAAP Net Income:

(Unaudited)

The following reconciliation is provided as additional relevant information about the Company's performance deemed useful to investors. 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 the non-GAAP measure of 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.

(Dollars in millions)

Twelve Months Ended
September 30, 2024

Twelve Months Ended
December 31, 2023

Net Income

$

362.1

$

408.0

Provision for income taxes

102.8

122.5

Interest expense

127.9

110.7

Interest income

(14.6)

(9.3)

Depreciation and amortization

217.9

201.3

Consolidated EBITDA

$

796.1

$

833.2

Adjustments:

  Impairment, restructuring and reorganization charges ⁽¹⁾

$

24.0

$

59.3

  Corporate pension and other postretirement benefit related expense ⁽²⁾

22.3

20.6

  Acquisition-related charges ⁽³⁾

29.8

31.8

  Gain on divestitures and sale of certain assets ⁽⁴⁾

(14.0)

(5.2)

  Property losses and related expenses ⁽⁵⁾

1.1

—

  CEO succession expenses ⁽⁶⁾

2.7

—

     Total Adjustments

65.9

106.5

Adjusted EBITDA

$

862.0

$

939.7

⁽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. Impairment, restructuring and reorganization charges for the twelve months ended December 31, 2023 included $28.3 million related to the impairment of goodwill. 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 represents actuarial losses that resulted from the remeasurement of plan assets and obligations as a result of changes in assumptions or experience. The Company recognizes actuarial losses and gains in connection with the annual remeasurement in the fourth quarter, or if specific events trigger a remeasurement.

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

⁽⁴⁾ Represents the net gain resulting from divestitures and sale of certain assets. (Gain) loss on divestitures and sale of certain assets included $13.8 million gain related to the sale of the Gaffney plant.

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

⁽⁶⁾ On March 26, 2024, the Company announced that Richard G. Kyle, President and CEO of the Company would be retiring from his position as CEO and that Tarak Mehta would be appointed CEO on September 5, 2024. CEO Succession expenses include the acceleration of certain stock compensation awards for Mr. Kyle and other one-time costs associated with the transition.

Reconciliation of Net Sales to Organic Sales

(Unaudited)

The following reconciliation is provided as additional relevant information about the Company's performance deemed useful to investors. Management believes that net sales, excluding the impact of acquisitions, divestitures and foreign currency exchange rate changes, allow investors and the Company to meaningfully evaluate the percentage change in net sales on a comparable basis from period to period.

Three Months Ended
September 30, 2024

Three Months Ended
September 30, 2023

$ Change

% Change

Net sales

$

1,126.8

$

1,142.7

$

(15.9)

(1.4)

%

Less: Acquisitions and divestitures

20.5

—

20.5

NM

         Currency

(3.2)

—

(3.2)

NM

Net sales, excluding the impact of acquisitions, divestitures and currency

$

1,109.5

$

1,142.7

$

(33.2)

(2.9)

%

Reconciliation of Adjusted Earnings per Share to GAAP Earnings per Share for Full Year 2024 Outlook:

(Unaudited)

The following reconciliation is provided as additional relevant information about the Company's outlook deemed useful to investors. Forecasted full year adjusted diluted earnings per share is an important financial measure that management believes is useful to investors as it is representative of the Company's expectation for the performance of its core business operations.

Low End Earnings
Per Share

High End Earnings
Per Share

Forecasted full year GAAP diluted earnings per share

$

4.65

$

4.75

Forecasted Adjustments:

  Impairment, restructuring and other special items, net ⁽¹⁾

0.10

0.10

  Acquisition-related intangible amortization expense, net

0.80

0.80

Forecasted full year adjusted diluted earnings per share

$

5.55

$

5.65

⁽¹⁾ Impairment, restructuring and other special items, net do not include the impact of any potential future mark-to-market pension and other postretirement remeasurement adjustments, because the amounts will not be known until incurred.