|
|
|
|
|
|
|
Increase (decrease) | |||
Statement of Operations | |||
Cost of products sold | $44.1 | ||
Selling, general and administrative expenses | 5.5 | ||
Provision for income taxes | — | ||
Net (loss) income | (49.6 | ) | |
Diluted earnings (loss) per share | ($1.12 | ) |
Statement of Comprehensive (Loss) Income, net of tax | |||
Foreign currency translation adjustments | $2.3 | ||
Pension and postretirement adjustment | 47.3 |
Balance Sheet | |||
Additional paid in capital | ($229.4 | ) | |
Retained deficit | ($80.5 | ) | |
Accumulated other comprehensive loss | 309.9 |
Statement of Cash Flows | |||
Net (loss) income | ($49.6 | ) | |
Pension and postretirement expense | 49.6 |
Statement of Operations | 2015 | 2014 | |||||||||||||||||
As Reported | Adjustments | Adjusted | As Reported | Adjustments | Adjusted | ||||||||||||||
Net sales | $1,106.2 | $— | $1,106.2 | $1,674.2 | $— | $1,674.2 | |||||||||||||
Cost of products sold | 1,097.4 | (37.4 | ) | 1,060.0 | 1,400.4 | 72.7 | 1,473.1 | ||||||||||||
Gross Profit | 8.8 | 37.4 | 46.2 | 273.8 | (72.7 | ) | 201.1 | ||||||||||||
Selling, general and administrative expenses | 111.0 | (5.9 | ) | 105.1 | 112.1 | 16.8 | 128.9 | ||||||||||||
Impairment and restructuring charges | 6.5 | — | 6.5 | 1.2 | — | 1.2 | |||||||||||||
Operating (Loss) Income | (108.7 | ) | 43.3 | (65.4 | ) | 160.5 | (89.5 | ) | 71.0 | ||||||||||
Interest expense | 3.4 | — | 3.4 | 0.9 | — | 0.9 | |||||||||||||
Other expenses, net | 2.9 | — | 2.9 | 1.4 | — | 1.4 | |||||||||||||
(Loss) Income Before Income Taxes | (115.0 | ) | 43.3 | (71.7 | ) | 158.2 | (89.5 | ) | 68.7 | ||||||||||
(Benefit) provision for income taxes | (42.6 | ) | 15.9 | (26.7 | ) | 53.8 | (31.2 | ) | 22.6 | ||||||||||
Net (Loss) Income | ($72.4 | ) | $27.4 | ($45.0 | ) | $104.4 | ($58.3 | ) | $46.1 | ||||||||||
Per Share Data: | |||||||||||||||||||
Basic (loss) earnings per share | ($1.63 | ) | $0.62 | ($1.01 | ) | $2.29 | ($1.28 | ) | $1.01 | ||||||||||
Diluted (loss) earnings per share | ($1.63 | ) | $0.62 | ($1.01 | ) | $2.27 | ($1.27 | ) | $1.00 |
Statement of Comprehensive (Loss) Income, net of tax | 2015 | 2014 | |||||||||||||||||
As Reported | Adjustments | Adjusted | As Reported | Adjustments | Adjusted | ||||||||||||||
Net (loss) income | ($72.4 | ) | $27.4 | ($45.0 | ) | $104.4 | ($58.3 | ) | $46.1 | ||||||||||
Other comprehensive income (loss), net of tax | |||||||||||||||||||
Foreign currency translation adjustments | (1.5 | ) | 0.4 | (1.1 | ) | (1.2 | ) | 0.9 | (0.3 | ) | |||||||||
Pension and postretirement adjustment | 35.0 | (29.7 | ) | 5.3 | (58.6 | ) | 59.2 | 0.6 | |||||||||||
Correction of pension and postretirement adjustment (1) | — | (4.3 | ) | (4.3 | ) | — | — | — | |||||||||||
Total pension and postretirement liability adjustments, net of tax | 35.0 | (34.0 | ) | 1.0 | (58.6 | ) | 59.2 | 0.6 | |||||||||||
Other comprehensive income (loss), net of tax | 33.5 | (33.6 | ) | (0.1 | ) | (59.8 | ) | 60.1 | 0.3 | ||||||||||
Comprehensive (Loss) Income, net of tax | ($38.9 | ) | ($6.2 | ) | ($45.1 | ) | $44.6 | $1.8 | $46.4 |
Balance Sheet | 2015 | ||||||||
As Reported | Adjustments | Adjusted | |||||||
Other Assets | |||||||||
Correction to non-current pension assets (1) | $20.0 | $0.7 | $20.7 | ||||||
Non-Current Liabilities | |||||||||
Deferred income taxes | $26.9 | $— | $26.9 | ||||||
Correction to deferred income taxes (1) | — | 5.1 | 5.1 | ||||||
Total deferred income taxes | $26.9 | $5.1 | $32.0 | ||||||
Shareholders’ Equity | |||||||||
Additional paid-in-capital | $1,058.2 | ($229.4 | ) | $828.8 | |||||
Retained earnings (deficit) | ($61.7 | ) | ($30.9 | ) | ($92.6 | ) | |||
Accumulated other comprehensive income | ($263.8 | ) | $260.2 | ($3.6 | ) | ||||
Correction to accumulated other comprehensive loss (1) | — | (4.3 | ) | (4.3 | ) | ||||
Total accumulated other comprehensive income | ($263.8 | ) | $255.9 | ($7.9 | ) |
Cash Flows from Operating Activities | 2015 | 2014 | |||||||||||||||||
As Reported | Adjustments | Adjusted | As Reported | Adjustments | Adjusted | ||||||||||||||
Net (loss) income | ($72.4 | ) | $27.4 | ($45.0 | ) | $104.4 | ($58.3 | ) | $46.1 | ||||||||||
Deferred income taxes | (41.5 | ) | 15.9 | (25.6 | ) | 1.4 | (31.2 | ) | (29.8 | ) | |||||||||
Pension and postretirement expense | 30.7 | (46.2 | ) | (15.5 | ) | 14.9 | 92.3 | 107.2 | |||||||||||
Changes in operating assets and liabilities: | |||||||||||||||||||
Inventories, net | 119.9 | 2.8 | 122.7 | (66.8 | ) | (2.8 | ) | (69.6 | ) | ||||||||||
Net Cash Provided by Operating Activities | 107.1 | — | 107.1 | 93.9 | — | 93.9 |
|
Year Ended | |||
December 31, 2014 | |||
Net transfer (to)/from Timken and affiliates - Equity | ($62.0 | ) | |
Dividend paid to Timken | 50.0 | ||
Net transfer of (assets) and liabilities from Timken | 25.0 | ||
Settlement of (assets) and liabilities with Timken | (9.2 | ) | |
Cash received from Timken for settlement of separation | 3.0 | ||
Net transfers from/(to) Timken and affiliates - Cash Flow | $6.8 |
Standard | Effective Date | |
2015-05 | Internal-Use Software: Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement | January 1, 2016 |
2016-09 | Stock Compensation: Improvements to Employee Share-Based Payment Accounting - See Note 10 | January 1, 2016 |
2015-03 | Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs - See Note 6 | March 31, 2016 |
|
December 31, | |||||||
2016 | 2015 | ||||||
Inventories, net: | |||||||
Manufacturing supplies | $37.9 | $43.3 | |||||
Raw materials | 16.2 | 14.6 | |||||
Work in process | 58.6 | 59.5 | |||||
Finished products | 59.6 | 64.9 | |||||
Subtotal | 172.3 | 182.3 | |||||
Allowance for surplus and obsolete inventory | (8.1 | ) | (8.4 | ) | |||
Total Inventories, net | $164.2 | $173.9 |
|
December 31, | |||||||
2016 | 2015 | ||||||
Property, Plant and Equipment, net: | |||||||
Land | $13.3 | $13.4 | |||||
Buildings and improvements | 420.6 | 418.2 | |||||
Machinery and equipment | 1,352.0 | 1,298.2 | |||||
Construction-in-progress | 63.9 | 74.9 | |||||
Subtotal | 1,849.8 | 1,804.7 | |||||
Less allowances for depreciation | (1,107.9 | ) | (1,035.4 | ) | |||
Property, Plant and Equipment, net | $741.9 | $769.3 |
|
December 31, 2016 | December 31, 2015 | |||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||||
Intangible Assets Subject to Amortization: | ||||||||||||||||||||||||
Customer relationships | $6.3 | $3.7 | $2.6 | $6.8 | $3.7 | $3.1 | ||||||||||||||||||
Technology use | 9.0 | 5.2 | 3.8 | 9.0 | 4.7 | 4.3 | ||||||||||||||||||
Capitalized software | 58.9 | 40.3 | 18.6 | 57.9 | 34.7 | 23.2 | ||||||||||||||||||
Total Intangible Assets | $74.2 | $49.2 | $25.0 | $73.7 | $43.1 | $30.6 |
Year | Amortization Expense | ||
2017 | $6.3 | ||
2018 | 5.1 | ||
2019 | 4.0 | ||
2020 | 2.9 | ||
2021 | 1.0 |
|
Principal | $86.3 | ||
Less: Debt issuance costs, net of amortization | (2.1 | ) | |
Less: Debt discount, net of amortization | (17.8 | ) | |
Convertible notes, net | $66.4 |
Contractual interest expense | $3.0 | ||
Amortization of debt issuance costs | 0.2 | ||
Amortization of debt discount | 1.7 | ||
Total | $4.9 |
December 31, | |||||||
2016 | 2015 | ||||||
Variable-rate State of Ohio Water Development Revenue Refunding Bonds, maturing on November 1, 2025 (0.71% as of December 31, 2016) | $12.2 | $12.2 | |||||
Variable-rate State of Ohio Air Quality Development Revenue Refunding Bonds, maturing on November 1, 2025 (0.70% as of December 31, 2016) | 9.5 | 9.5 | |||||
Variable-rate State of Ohio Pollution Control Revenue Refunding Bonds, maturing on June 1, 2033 (0.70% as of December 31, 2016) | 8.5 | 8.5 | |||||
Amended Credit Agreement, due 2019 (LIBOR plus applicable spread) | 40.0 | 170.0 | |||||
Total Other Long-Term Debt | $70.2 | $200.2 |
|
Foreign Currency Translation Adjustments | Pension and Postretirement Liability Adjustments | Total | |||||||||
Balance at December 31, 2014 | ($3.9 | ) | ($3.9 | ) | ($7.8 | ) | |||||
Other comprehensive (loss) income before reclassifications, before income tax | (1.1 | ) | — | (1.1 | ) | ||||||
Amounts reclassified from accumulated other comprehensive loss, before income tax | — | 1.7 | 1.7 | ||||||||
Income tax (expense) | — | (0.7 | ) | (0.7 | ) | ||||||
Net current period other comprehensive income, net of income taxes | (1.1 | ) | 1.0 | (0.1 | ) | ||||||
Balance at December 31, 2015 | (5.0 | ) | (2.9 | ) | (7.9 | ) | |||||
Other comprehensive (loss) income before reclassifications, before income tax | (2.0 | ) | (0.9 | ) | (2.9 | ) | |||||
Amounts reclassified from accumulated other comprehensive loss, before income tax | — | 1.7 | 1.7 | ||||||||
Income tax (expense) | — | (0.3 | ) | (0.3 | ) | ||||||
Net current period other comprehensive (loss) income, net of income taxes | (2.0 | ) | 0.5 | (1.5 | ) | ||||||
Balance at December 31, 2016 | (7.0 | ) | (2.4 | ) | (9.4 | ) |
|
Pension | Postretirement | ||||||||||||
Change in benefit obligation: | 2016 | 2015 | 2016 | 2015 | |||||||||
Benefit obligation at the beginning of year | $1,163.5 | $1,257.5 | $215.3 | $243.3 | |||||||||
Service cost | 15.6 | 16.8 | 1.5 | 1.7 | |||||||||
Interest cost | 52.4 | 51.3 | 9.4 | 9.4 | |||||||||
Actuarial losses (gains) | 81.1 | (88.2 | ) | 6.6 | (19.9 | ) | |||||||
Benefits paid | (79.1 | ) | (70.2 | ) | (19.5 | ) | (19.2 | ) | |||||
Plan amendment | — | — | 0.9 | — | |||||||||
Foreign currency translation adjustment | (13.2 | ) | (3.7 | ) | — | — | |||||||
Benefit obligation at the end of year | $1,220.3 | $1,163.5 | $214.2 | $215.3 |
Pension | Postretirement | ||||||||||||
Change in plan assets: | 2016 | 2015 | 2016 | 2015 | |||||||||
Fair value of plan assets at the beginning of year | $1,144.3 | $1,230.0 | $137.9 | $142.6 | |||||||||
Actual return on plan assets | 78.7 | (12.0 | ) | 6.1 | (0.6 | ) | |||||||
Company contributions / payments | 2.2 | 0.5 | 2.7 | 15.1 | |||||||||
Benefits paid | (79.1 | ) | (70.2 | ) | (19.5 | ) | (19.2 | ) | |||||
Reimbursement from postretirement plan assets | — | — | (13.3 | ) | — | ||||||||
Foreign currency translation adjustment | (14.4 | ) | (4.0 | ) | — | — | |||||||
Fair value of plan assets at end of year | $1,131.7 | $1,144.3 | $113.9 | $137.9 | |||||||||
Funded status at end of year | ($88.6 | ) | ($19.2 | ) | ($100.3 | ) | ($77.4 | ) |
Pension | Postretirement | ||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||
Non-current assets | $6.2 | $20.7 | $— | $— | |||||||||
Current liabilities | (0.6 | ) | (0.6 | ) | (2.4 | ) | (2.6 | ) | |||||
Non-current liabilities | (94.2 | ) | (39.3 | ) | (97.9 | ) | (74.8 | ) | |||||
($88.6 | ) | ($19.2 | ) | ($100.3 | ) | ($77.4 | ) |
Pension | Postretirement | ||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||
Unrecognized prior service cost | $1.5 | $2.1 | $2.1 | $2.4 |
Pension | Postretirement | ||||||
Prior service cost | $0.5 | $1.0 |
Pension | Postretirement | ||||||||
Assumptions: | 2016 | 2015 | 2016 | 2015 | |||||
Discount rate | 4.17 | % | 4.67 | % | 4.09 | % | 4.51 | % | |
Future compensation assumption | 3.09 | % | 2.76 | % | n/a | n/a |
Pension | Postretirement | ||||||||
Assumptions: | 2016 | 2015 | 2016 | 2015 | |||||
Discount rate | 4.67 | % | 4.21 | % | 4.51 | % | 4.05 | % | |
Future compensation assumption | 3.08 | % | 3.09 | % | n/a | n/a | |||
Expected long-term return on plan assets | 6.46 | % | 6.98 | % | 5.00 | % | 5.00 | % |
Pension | Postretirement | ||||||||||||||||||||||
Years Ended December 31, | Years Ended December 31, | ||||||||||||||||||||||
Components of net periodic benefit cost: | 2016 | 2015 | 2014 | 2016 | 2015 | 2014 | |||||||||||||||||
Service cost | $15.6 | $16.8 | $10.2 | $1.5 | $1.7 | $1.1 | |||||||||||||||||
Interest cost | 52.4 | 51.3 | 33.3 | 9.4 | 9.4 | 6.5 | |||||||||||||||||
Expected return on plan assets | (71.1 | ) | (82.8 | ) | (54.6 | ) | (5.8 | ) | (7.1 | ) | (4.6 | ) | |||||||||||
Amortization of prior service cost | 0.6 | 0.6 | 0.5 | 1.1 | 1.1 | 0.6 | |||||||||||||||||
Net remeasurement losses (gains) | 73.4 | 5.7 | 98.3 | 6.3 | (12.2 | ) | 15.9 | ||||||||||||||||
Allocated benefit cost from Timken | — | — | 5.2 | — | — | 2.2 | |||||||||||||||||
Net Periodic Benefit Cost | $70.9 | ($8.4 | ) | $92.9 | $12.5 | ($7.1 | ) | $21.7 |
Level 1 - | Unadjusted quoted prices in active markets for identical assets or liabilities. |
Level 2 - | 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. |
Total | Level 1 | Level 2 | Level 3 | |||||||||
Assets: | ||||||||||||
Cash and cash equivalents | $45.2 | $4.6 | $40.6 | $— | ||||||||
U.S government and agency securities | 220.3 | 214.2 | 6.1 | — | ||||||||
Corporate bonds | 105.2 | — | 105.2 | — | ||||||||
Equity securities | 52.2 | 52.2 | — | — | ||||||||
Mutual fund - equity | 15.3 | — | 15.3 | — | ||||||||
Mutual fund - real estate | 24.8 | 24.8 | — | — | ||||||||
Total Assets in the fair value hierarchy | $463.0 | $295.8 | $167.2 | $— | ||||||||
Assets measured at net asset value (1) | 668.7 | — | — | — | ||||||||
Total Assets | $1,131.7 | $295.8 | $167.2 | $— |
Total | Level 1 | Level 2 | Level 3 | |||||||||
Assets: | ||||||||||||
Cash and cash equivalents | $27.8 | $2.1 | $25.7 | $— | ||||||||
U.S government and agency securities | 220.7 | 213.1 | 7.6 | — | ||||||||
Corporate bonds | 125.6 | — | 125.6 | — | ||||||||
Equity securities | 78.8 | 78.8 | — | — | ||||||||
Mutual fund - equity | 16.1 | — | 16.1 | — | ||||||||
Mutual fund - real estate | 33.9 | 33.9 | — | — | ||||||||
Total Assets in the fair value hierarchy | $502.9 | $327.9 | $175.0 | $— | ||||||||
Assets measured at net asset value (1) | 641.4 | — | — | — | ||||||||
Total Assets | $1,144.3 | $327.9 | $175.0 | $— |
Total | Level 1 | Level 2 | Level 3 | |||||||||
Assets: | ||||||||||||
Cash and cash equivalents | $1.4 | $1.4 | $— | $— | ||||||||
Total Assets in the fair value hierarchy | $1.4 | $1.4 | $— | $— | ||||||||
Assets measured at net asset value (1) | 112.5 | — | — | — | ||||||||
Total Assets | $113.9 | $1.4 | $— | $— |
Total | Level 1 | Level 2 | Level 3 | |||||||||
Assets: | ||||||||||||
Cash and cash equivalents | $1.0 | $1.0 | $— | $— | ||||||||
Total Assets in the fair value hierarchy | $1.0 | $1 | $— | $— | ||||||||
Assets measured at net asset value (1) | 136.9 | — | — | — | ||||||||
Total Assets | $137.9 | $1.0 | $— | $— |
Postretirement | |||||||||||
Benefit Payments: | Pension | Gross | Medicare Part D Subsidy Receipts | ||||||||
2017 | $78.2 | $20.3 | $0.7 | ||||||||
2018 | 88.1 | 19.8 | 0.7 | ||||||||
2019 | 76.2 | 19.3 | 0.8 | ||||||||
2020 | 75.2 | 18.4 | 0.9 | ||||||||
2021 | 75.8 | 17.6 | 0.9 | ||||||||
2022-2026 | 373.8 | 77.2 | 5.0 |
|
• | Vested and unvested stock options were adjusted so that the grantee holds options to purchase both Timken and TimkenSteel common shares. |
• | The adjustment to the Timken and TimkenSteel stock options, when combined, were intended to generally preserve the intrinsic value of each original option grant and the ratio of the exercise price to the fair market value of Timken common shares on June 30, 2014. |
• | Unvested restricted stock awards were replaced with adjusted, substitute awards for restricted shares or units, as applicable, of Timken and TimkenSteel common shares. The new awards of restricted stock were intended to generally preserve the intrinsic value of the original award determined as of June 30, 2014. |
• | Vesting periods of awards were unaffected by the adjustment and substitution. |
2016 | 2015 | 2014 Subsequent to Spinoff | 2014 Prior to Spinoff | ||||
Weighted-average fair value per option | $3.32 | $11.21 | $18.43 | $23.17 | |||
Risk-free interest rate | 1.34% | 1.47% | 1.78% | 1.80% | |||
Dividend yield | —% | 1.93% | 1.22% | 1.75% | |||
Expected stock volatility | 41.71% | 47.10% | 47.00% | 50.35% | |||
Expected life - years | 6 | 6 | 6 | 6 |
Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value (millions) | ||||
Outstanding as of December 31, 2015 | 1,617,503 | $28.68 | |||||
Granted | 644,580 | $7.47 | |||||
Exercised | (6,825 | ) | $11.24 | ||||
Canceled, forfeited or expired | (35,861 | ) | $24.05 | ||||
Outstanding as of December 31, 2016 | 2,219,397 | $22.64 | 6.22 | $5.5 | |||
Options expected to vest | 968,982 | $15.90 | 8.53 | $5.1 | |||
Options exercisable | 1,239,280 | $27.82 | 4.41 | $0.4 |
Number of Shares | Weighted Average Grant Date Fair Value | ||||
Outstanding as of December 31, 2015 | 339,410 | $30.31 | |||
Granted | 426,090 | $7.16 | |||
Vested | (38,641 | ) | $30.60 | ||
Canceled, forfeited or expired | (30,706 | ) | $3.93 | ||
Outstanding as of December 31, 2016 | 696,153 | $17.57 |
|
Years Ended December 31, | |||||||
2016 | 2015 | ||||||
Net Sales: | |||||||
United States | $763.4 | $979.5 | |||||
Foreign | 106.1 | 126.7 | |||||
$869.5 | $1,106.2 |
December 31, | ||||||
2016 | 2015 | |||||
Long-lived Assets: | ||||||
United States | $766.6 | $799.3 | ||||
Foreign | 0.3 | 0.6 | ||||
$766.9 | $799.9 |
|
Years Ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
United States | ($136.2 | ) | ($82.2 | ) | $69.0 | ||||||
Non-United States | (5.8 | ) | 10.5 | (0.3 | ) | ||||||
(Loss) income from operations before income taxes | ($142.0 | ) | ($71.7 | ) | $68.7 |
Years Ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Current: | |||||||||||
Federal | $— | $— | $32.3 | ||||||||
State and local | 0.1 | (1.2 | ) | 5.3 | |||||||
Foreign | 0.2 | 0.1 | 0.5 | ||||||||
$0.3 | ($1.1 | ) | $38.1 | ||||||||
Deferred: | |||||||||||
Federal | ($32.9 | ) | ($28.7 | ) | ($10.4 | ) | |||||
State and local | (3.6 | ) | 0.2 | (3.5 | ) | ||||||
Foreign | (0.3 | ) | 2.9 | (1.6 | ) | ||||||
(36.8 | ) | (25.6 | ) | (15.5 | ) | ||||||
United States and foreign tax (benefit) expense on (loss) income | ($36.5 | ) | ($26.7 | ) | $22.6 |
Years Ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Tax at the U.S. federal statutory rate | ($49.7 | ) | ($25.2 | ) | $24.2 | ||||||
Adjustments: | |||||||||||
State and local income taxes, net of federal tax benefit | (3.5 | ) | (2.2 | ) | 1.1 | ||||||
Foreign earnings taxed at different rates including tax holidays | (0.1 | ) | — | — | |||||||
U.S. domestic manufacturing deduction | — | — | (3.2 | ) | |||||||
U.S. research tax credit | (0.4 | ) | (0.5 | ) | (0.6 | ) | |||||
Valuation allowance | 15.6 | — | — | ||||||||
Other items, net | 1.6 | 1.2 | 1.1 | ||||||||
(Benefit) provision for income taxes | ($36.5 | ) | ($26.7 | ) | $22.6 | ||||||
Effective income tax rate | 25.7 | % | 37.2 | % | 32.9 | % |
December 31, | |||||||
2016 | 2015 | ||||||
Deferred tax assets: | |||||||
Pension and postretirement benefits | $70.3 | $34.6 | |||||
Other employee benefit accruals | 9.1 | 7.2 | |||||
Tax loss carryforwards | 107.4 | 63.7 | |||||
Intangible assets | 2.5 | 2.9 | |||||
Inventory | 2.9 | 2.9 | |||||
State decoupling | 0.5 | 1.6 | |||||
Other, net | 5.3 | 3.7 | |||||
Deferred tax assets subtotal | $198.0 | $116.6 | |||||
Valuation allowances | (24.4 | ) | (10.2 | ) | |||
Deferred tax assets | 173.6 | 106.4 | |||||
Deferred tax liabilities: | |||||||
Depreciation | ($156.8 | ) | ($136.3 | ) | |||
Inventory | (9.7 | ) | (1.0 | ) | |||
Convertible debt | (6.6 | ) | — | ||||
Other, net | (0.2 | ) | (1.1 | ) | |||
Deferred tax liabilities subtotal | (173.3 | ) | (138.4 | ) | |||
Net deferred tax assets (liabilities) | $0.3 | ($32.0 | ) |
Years Ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Beginning balance, January 1 | $— | $— | $0.7 | ||||||||
Tax positions related to prior years: | |||||||||||
Reductions | — | — | (0.7 | ) | |||||||
Ending balance, December 31 | $— | $— | $— |
|
Beginning balance, January 1, 2015 | $1.3 | ||
Expenses | — | ||
Payments | (0.5 | ) | |
Ending balance, December 31, 2015 | $0.8 | ||
Expenses | — | ||
Payments | (0.2 | ) | |
Ending balance, December 31, 2016 | $0.6 |
|
Beginning balance, January 1, 2015 | $— | ||
Expenses | 5.6 | ||
Payments | (3.3 | ) | |
Ending balance, December 31, 2015 | $2.3 | ||
Expenses | 0.3 | ||
Payments | (2.5 | ) | |
Ending balance, December 31, 2016 | $0.1 |
|
|
Quarters Ended | |||||||||||||||
December 31 | September 30 | June 30 | March 31 | ||||||||||||
2016 | |||||||||||||||
Net Sales | $214.7 | $213.8 | $223.1 | $217.9 | |||||||||||
Gross (Loss) Profit | (44.7 | ) | (6.2 | ) | 15.3 | 8.5 | |||||||||
Net (Loss) Income (1) | (67.0 | ) | (22.2 | ) | (6.6 | ) | (9.7 | ) | |||||||
Per Share Data: (2) | |||||||||||||||
Basic (loss) earnings per share | ($1.52 | ) | ($0.50 | ) | ($0.15 | ) | ($0.22 | ) | |||||||
Diluted (loss) earnings per share | ($1.52 | ) | ($0.50 | ) | ($0.15 | ) | ($0.22 | ) |
Quarters Ended | |||||||||||||||
December 31 | September 30 | June 30 | March 31 | ||||||||||||
2015 | |||||||||||||||
Net Sales | $206.6 | $232.7 | $278.2 | $388.7 | |||||||||||
Gross Profit | 9.3 | (12.3 | ) | 2.1 | 47.1 | ||||||||||
Net Income (1) | (13.8 | ) | (24.5 | ) | (18.1 | ) | 11.4 | ||||||||
Per Share Data: (2) | |||||||||||||||
Basic earnings per share | ($0.31 | ) | ($0.55 | ) | ($0.40 | ) | $0.25 | ||||||||
Diluted earnings per share | ($0.31 | ) | ($0.55 | ) | ($0.40 | ) | $0.25 |
Quarters Ended | |||||||||||
September 30 | June 30 | March 31 | |||||||||
2016 | |||||||||||
Net Sales | $213.8 | $223.1 | $217.9 | ||||||||
Gross (Loss) Profit | 2.5 | 10.2 | 3.4 | ||||||||
Net Loss (1) | (16.6 | ) | (10.5 | ) | (13.6 | ) | |||||
Per Share Data: (2) | |||||||||||
Basic loss per share | ($0.38 | ) | ($0.24 | ) | ($0.31 | ) | |||||
Diluted loss per share | ($0.38 | ) | ($0.24 | ) | ($0.31 | ) |
Quarters Ended | |||||||||||||||
December 31 | September 30 | June 30 | March 31 | ||||||||||||
2015 | |||||||||||||||
Net Sales | $206.6 | $232.7 | $278.2 | $388.7 | |||||||||||
Gross (Loss) Profit | (6.2 | ) | (20.5 | ) | (6.1 | ) | 41.6 | ||||||||
Net (Loss) Income (1) | (24.2 | ) | (30.8 | ) | (24.3 | ) | 6.9 | ||||||||
Per Share Data: (2) | |||||||||||||||
Basic (loss) earnings per share | ($0.55 | ) | ($0.69 | ) | ($0.54 | ) | $0.15 | ||||||||
Diluted (loss) earnings per share | ($0.55 | ) | ($0.69 | ) | ($0.54 | ) | $0.15 |
|
Allowance for uncollectible accounts: | 2016 | 2015 | 2014 | ||||||
Balance at Beginning of Period | $1.5 | $0.2 | $0.2 | ||||||
Additions: | |||||||||
Charged to Costs and Expenses (1) | 0.7 | 1.3 | — | ||||||
Deductions (2) | (0.1 | ) | — | — | |||||
Balance at End of Period | $2.1 | $1.5 | $0.2 | ||||||
Allowance for surplus and obsolete inventory: | 2016 | 2015 | 2014 | ||||||
Balance at Beginning of Period | $8.4 | $2.9 | $1.9 | ||||||
Additions: | |||||||||
Charged to Costs and Expenses (3) | 1.5 | 7.2 | 1.6 | ||||||
Deductions (4) | (1.8 | ) | (1.7 | ) | (0.6 | ) | |||
Balance at End of Period | $8.1 | $8.4 | $2.9 | ||||||
Valuation allowance on deferred tax assets: | 2016 | 2015 | 2014 | ||||||
Balance at Beginning of Period | $10.2 | $11.7 | $14.1 | ||||||
Additions: | |||||||||
Charged to Costs and Expenses (5) | 15.6 | — | — | ||||||
Charged to Other Accounts (6) | — | — | — | ||||||
Deductions (7) | (1.4 | ) | (1.5 | ) | (2.4 | ) | |||
Balance at End of Period | $24.4 | $10.2 | $11.7 |
(1) | Provision for uncollectible accounts included in expenses. |
(2) | Actual accounts written off against the allowance-net of recoveries. |
(3) | Provisions for surplus and obsolete inventory included in expenses. |
(4) | Inventory items written off against the allowance. |
(5) | Increase in valuation allowance is recorded as a component of the provision for income taxes. |
(6) | Includes valuation allowances recorded against other comprehensive income/loss or goodwill. |
(7) | Amount primarily relates to foreign currency translation adjustments, the removal of losses not carried over to TimkenSteel and a decrease in U.K. tax rates. |
|
Standard | Effective Date | |
2015-05 | Internal-Use Software: Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement | January 1, 2016 |
2016-09 | Stock Compensation: Improvements to Employee Share-Based Payment Accounting - See Note 10 | January 1, 2016 |
2015-03 | Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs - See Note 6 | March 31, 2016 |
|
Increase (decrease) | |||
Statement of Operations | |||
Cost of products sold | $44.1 | ||
Selling, general and administrative expenses | 5.5 | ||
Provision for income taxes | — | ||
Net (loss) income | (49.6 | ) | |
Diluted earnings (loss) per share | ($1.12 | ) |
Statement of Comprehensive (Loss) Income, net of tax | |||
Foreign currency translation adjustments | $2.3 | ||
Pension and postretirement adjustment | 47.3 |
Balance Sheet | |||
Additional paid in capital | ($229.4 | ) | |
Retained deficit | ($80.5 | ) | |
Accumulated other comprehensive loss | 309.9 |
Statement of Cash Flows | |||
Net (loss) income | ($49.6 | ) | |
Pension and postretirement expense | 49.6 |
Standard | Effective Date | |
2015-05 | Internal-Use Software: Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement | January 1, 2016 |
2016-09 | Stock Compensation: Improvements to Employee Share-Based Payment Accounting - See Note 10 | January 1, 2016 |
2015-03 | Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs - See Note 6 | March 31, 2016 |
Statement of Operations | 2015 | 2014 | |||||||||||||||||
As Reported | Adjustments | Adjusted | As Reported | Adjustments | Adjusted | ||||||||||||||
Net sales | $1,106.2 | $— | $1,106.2 | $1,674.2 | $— | $1,674.2 | |||||||||||||
Cost of products sold | 1,097.4 | (37.4 | ) | 1,060.0 | 1,400.4 | 72.7 | 1,473.1 | ||||||||||||
Gross Profit | 8.8 | 37.4 | 46.2 | 273.8 | (72.7 | ) | 201.1 | ||||||||||||
Selling, general and administrative expenses | 111.0 | (5.9 | ) | 105.1 | 112.1 | 16.8 | 128.9 | ||||||||||||
Impairment and restructuring charges | 6.5 | — | 6.5 | 1.2 | — | 1.2 | |||||||||||||
Operating (Loss) Income | (108.7 | ) | 43.3 | (65.4 | ) | 160.5 | (89.5 | ) | 71.0 | ||||||||||
Interest expense | 3.4 | — | 3.4 | 0.9 | — | 0.9 | |||||||||||||
Other expenses, net | 2.9 | — | 2.9 | 1.4 | — | 1.4 | |||||||||||||
(Loss) Income Before Income Taxes | (115.0 | ) | 43.3 | (71.7 | ) | 158.2 | (89.5 | ) | 68.7 | ||||||||||
(Benefit) provision for income taxes | (42.6 | ) | 15.9 | (26.7 | ) | 53.8 | (31.2 | ) | 22.6 | ||||||||||
Net (Loss) Income | ($72.4 | ) | $27.4 | ($45.0 | ) | $104.4 | ($58.3 | ) | $46.1 | ||||||||||
Per Share Data: | |||||||||||||||||||
Basic (loss) earnings per share | ($1.63 | ) | $0.62 | ($1.01 | ) | $2.29 | ($1.28 | ) | $1.01 | ||||||||||
Diluted (loss) earnings per share | ($1.63 | ) | $0.62 | ($1.01 | ) | $2.27 | ($1.27 | ) | $1.00 |
Statement of Comprehensive (Loss) Income, net of tax | 2015 | 2014 | |||||||||||||||||
As Reported | Adjustments | Adjusted | As Reported | Adjustments | Adjusted | ||||||||||||||
Net (loss) income | ($72.4 | ) | $27.4 | ($45.0 | ) | $104.4 | ($58.3 | ) | $46.1 | ||||||||||
Other comprehensive income (loss), net of tax | |||||||||||||||||||
Foreign currency translation adjustments | (1.5 | ) | 0.4 | (1.1 | ) | (1.2 | ) | 0.9 | (0.3 | ) | |||||||||
Pension and postretirement adjustment | 35.0 | (29.7 | ) | 5.3 | (58.6 | ) | 59.2 | 0.6 | |||||||||||
Correction of pension and postretirement adjustment (1) | — | (4.3 | ) | (4.3 | ) | — | — | — | |||||||||||
Total pension and postretirement liability adjustments, net of tax | 35.0 | (34.0 | ) | 1.0 | (58.6 | ) | 59.2 | 0.6 | |||||||||||
Other comprehensive income (loss), net of tax | 33.5 | (33.6 | ) | (0.1 | ) | (59.8 | ) | 60.1 | 0.3 | ||||||||||
Comprehensive (Loss) Income, net of tax | ($38.9 | ) | ($6.2 | ) | ($45.1 | ) | $44.6 | $1.8 | $46.4 |
Balance Sheet | 2015 | ||||||||
As Reported | Adjustments | Adjusted | |||||||
Other Assets | |||||||||
Correction to non-current pension assets (1) | $20.0 | $0.7 | $20.7 | ||||||
Non-Current Liabilities | |||||||||
Deferred income taxes | $26.9 | $— | $26.9 | ||||||
Correction to deferred income taxes (1) | — | 5.1 | 5.1 | ||||||
Total deferred income taxes | $26.9 | $5.1 | $32.0 | ||||||
Shareholders’ Equity | |||||||||
Additional paid-in-capital | $1,058.2 | ($229.4 | ) | $828.8 | |||||
Retained earnings (deficit) | ($61.7 | ) | ($30.9 | ) | ($92.6 | ) | |||
Accumulated other comprehensive income | ($263.8 | ) | $260.2 | ($3.6 | ) | ||||
Correction to accumulated other comprehensive loss (1) | — | (4.3 | ) | (4.3 | ) | ||||
Total accumulated other comprehensive income | ($263.8 | ) | $255.9 | ($7.9 | ) |
Cash Flows from Operating Activities | 2015 | 2014 | |||||||||||||||||
As Reported | Adjustments | Adjusted | As Reported | Adjustments | Adjusted | ||||||||||||||
Net (loss) income | ($72.4 | ) | $27.4 | ($45.0 | ) | $104.4 | ($58.3 | ) | $46.1 | ||||||||||
Deferred income taxes | (41.5 | ) | 15.9 | (25.6 | ) | 1.4 | (31.2 | ) | (29.8 | ) | |||||||||
Pension and postretirement expense | 30.7 | (46.2 | ) | (15.5 | ) | 14.9 | 92.3 | 107.2 | |||||||||||
Changes in operating assets and liabilities: | |||||||||||||||||||
Inventories, net | 119.9 | 2.8 | 122.7 | (66.8 | ) | (2.8 | ) | (69.6 | ) | ||||||||||
Net Cash Provided by Operating Activities | 107.1 | — | 107.1 | 93.9 | — | 93.9 |
|
Year Ended | |||
December 31, 2014 | |||
Net transfer (to)/from Timken and affiliates - Equity | ($62.0 | ) | |
Dividend paid to Timken | 50.0 | ||
Net transfer of (assets) and liabilities from Timken | 25.0 | ||
Settlement of (assets) and liabilities with Timken | (9.2 | ) | |
Cash received from Timken for settlement of separation | 3.0 | ||
Net transfers from/(to) Timken and affiliates - Cash Flow | $6.8 |
Increase (decrease) | |||
Statement of Operations | |||
Cost of products sold | $44.1 | ||
Selling, general and administrative expenses | 5.5 | ||
Provision for income taxes | — | ||
Net (loss) income | (49.6 | ) | |
Diluted earnings (loss) per share | ($1.12 | ) |
Statement of Comprehensive (Loss) Income, net of tax | |||
Foreign currency translation adjustments | $2.3 | ||
Pension and postretirement adjustment | 47.3 |
Balance Sheet | |||
Additional paid in capital | ($229.4 | ) | |
Retained deficit | ($80.5 | ) | |
Accumulated other comprehensive loss | 309.9 |
Statement of Cash Flows | |||
Net (loss) income | ($49.6 | ) | |
Pension and postretirement expense | 49.6 |
Standard | Effective Date | |
2015-05 | Internal-Use Software: Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement | January 1, 2016 |
2016-09 | Stock Compensation: Improvements to Employee Share-Based Payment Accounting - See Note 10 | January 1, 2016 |
2015-03 | Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs - See Note 6 | March 31, 2016 |
|
December 31, | |||||||
2016 | 2015 | ||||||
Inventories, net: | |||||||
Manufacturing supplies | $37.9 | $43.3 | |||||
Raw materials | 16.2 | 14.6 | |||||
Work in process | 58.6 | 59.5 | |||||
Finished products | 59.6 | 64.9 | |||||
Subtotal | 172.3 | 182.3 | |||||
Allowance for surplus and obsolete inventory | (8.1 | ) | (8.4 | ) | |||
Total Inventories, net | $164.2 | $173.9 |
|
December 31, | |||||||
2016 | 2015 | ||||||
Property, Plant and Equipment, net: | |||||||
Land | $13.3 | $13.4 | |||||
Buildings and improvements | 420.6 | 418.2 | |||||
Machinery and equipment | 1,352.0 | 1,298.2 | |||||
Construction-in-progress | 63.9 | 74.9 | |||||
Subtotal | 1,849.8 | 1,804.7 | |||||
Less allowances for depreciation | (1,107.9 | ) | (1,035.4 | ) | |||
Property, Plant and Equipment, net | $741.9 | $769.3 |
|
December 31, 2016 | December 31, 2015 | |||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||||
Intangible Assets Subject to Amortization: | ||||||||||||||||||||||||
Customer relationships | $6.3 | $3.7 | $2.6 | $6.8 | $3.7 | $3.1 | ||||||||||||||||||
Technology use | 9.0 | 5.2 | 3.8 | 9.0 | 4.7 | 4.3 | ||||||||||||||||||
Capitalized software | 58.9 | 40.3 | 18.6 | 57.9 | 34.7 | 23.2 | ||||||||||||||||||
Total Intangible Assets | $74.2 | $49.2 | $25.0 | $73.7 | $43.1 | $30.6 |
Year | Amortization Expense | ||
2017 | $6.3 | ||
2018 | 5.1 | ||
2019 | 4.0 | ||
2020 | 2.9 | ||
2021 | 1.0 |
|
Principal | $86.3 | ||
Less: Debt issuance costs, net of amortization | (2.1 | ) | |
Less: Debt discount, net of amortization | (17.8 | ) | |
Convertible notes, net | $66.4 |
Contractual interest expense | $3.0 | ||
Amortization of debt issuance costs | 0.2 | ||
Amortization of debt discount | 1.7 | ||
Total | $4.9 |
December 31, | |||||||
2016 | 2015 | ||||||
Variable-rate State of Ohio Water Development Revenue Refunding Bonds, maturing on November 1, 2025 (0.71% as of December 31, 2016) | $12.2 | $12.2 | |||||
Variable-rate State of Ohio Air Quality Development Revenue Refunding Bonds, maturing on November 1, 2025 (0.70% as of December 31, 2016) | 9.5 | 9.5 | |||||
Variable-rate State of Ohio Pollution Control Revenue Refunding Bonds, maturing on June 1, 2033 (0.70% as of December 31, 2016) | 8.5 | 8.5 | |||||
Amended Credit Agreement, due 2019 (LIBOR plus applicable spread) | 40.0 | 170.0 | |||||
Total Other Long-Term Debt | $70.2 | $200.2 |
|
Foreign Currency Translation Adjustments | Pension and Postretirement Liability Adjustments | Total | |||||||||
Balance at December 31, 2014 | ($3.9 | ) | ($3.9 | ) | ($7.8 | ) | |||||
Other comprehensive (loss) income before reclassifications, before income tax | (1.1 | ) | — | (1.1 | ) | ||||||
Amounts reclassified from accumulated other comprehensive loss, before income tax | — | 1.7 | 1.7 | ||||||||
Income tax (expense) | — | (0.7 | ) | (0.7 | ) | ||||||
Net current period other comprehensive income, net of income taxes | (1.1 | ) | 1.0 | (0.1 | ) | ||||||
Balance at December 31, 2015 | (5.0 | ) | (2.9 | ) | (7.9 | ) | |||||
Other comprehensive (loss) income before reclassifications, before income tax | (2.0 | ) | (0.9 | ) | (2.9 | ) | |||||
Amounts reclassified from accumulated other comprehensive loss, before income tax | — | 1.7 | 1.7 | ||||||||
Income tax (expense) | — | (0.3 | ) | (0.3 | ) | ||||||
Net current period other comprehensive (loss) income, net of income taxes | (2.0 | ) | 0.5 | (1.5 | ) | ||||||
Balance at December 31, 2016 | (7.0 | ) | (2.4 | ) | (9.4 | ) |
|
Pension | Postretirement | ||||||||||||
Change in benefit obligation: | 2016 | 2015 | 2016 | 2015 | |||||||||
Benefit obligation at the beginning of year | $1,163.5 | $1,257.5 | $215.3 | $243.3 | |||||||||
Service cost | 15.6 | 16.8 | 1.5 | 1.7 | |||||||||
Interest cost | 52.4 | 51.3 | 9.4 | 9.4 | |||||||||
Actuarial losses (gains) | 81.1 | (88.2 | ) | 6.6 | (19.9 | ) | |||||||
Benefits paid | (79.1 | ) | (70.2 | ) | (19.5 | ) | (19.2 | ) | |||||
Plan amendment | — | — | 0.9 | — | |||||||||
Foreign currency translation adjustment | (13.2 | ) | (3.7 | ) | — | — | |||||||
Benefit obligation at the end of year | $1,220.3 | $1,163.5 | $214.2 | $215.3 |
Pension | Postretirement | ||||||||||||
Change in plan assets: | 2016 | 2015 | 2016 | 2015 | |||||||||
Fair value of plan assets at the beginning of year | $1,144.3 | $1,230.0 | $137.9 | $142.6 | |||||||||
Actual return on plan assets | 78.7 | (12.0 | ) | 6.1 | (0.6 | ) | |||||||
Company contributions / payments | 2.2 | 0.5 | 2.7 | 15.1 | |||||||||
Benefits paid | (79.1 | ) | (70.2 | ) | (19.5 | ) | (19.2 | ) | |||||
Reimbursement from postretirement plan assets | — | — | (13.3 | ) | — | ||||||||
Foreign currency translation adjustment | (14.4 | ) | (4.0 | ) | — | — | |||||||
Fair value of plan assets at end of year | $1,131.7 | $1,144.3 | $113.9 | $137.9 | |||||||||
Funded status at end of year | ($88.6 | ) | ($19.2 | ) | ($100.3 | ) | ($77.4 | ) |
Pension | Postretirement | ||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||
Non-current assets | $6.2 | $20.7 | $— | $— | |||||||||
Current liabilities | (0.6 | ) | (0.6 | ) | (2.4 | ) | (2.6 | ) | |||||
Non-current liabilities | (94.2 | ) | (39.3 | ) | (97.9 | ) | (74.8 | ) | |||||
($88.6 | ) | ($19.2 | ) | ($100.3 | ) | ($77.4 | ) |
Pension | Postretirement | ||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||
Unrecognized prior service cost | $1.5 | $2.1 | $2.1 | $2.4 |
Pension | Postretirement | ||||||
Prior service cost | $0.5 | $1.0 |
Pension | Postretirement | ||||||||
Assumptions: | 2016 | 2015 | 2016 | 2015 | |||||
Discount rate | 4.17 | % | 4.67 | % | 4.09 | % | 4.51 | % | |
Future compensation assumption | 3.09 | % | 2.76 | % | n/a | n/a |
Pension | Postretirement | ||||||||
Assumptions: | 2016 | 2015 | 2016 | 2015 | |||||
Discount rate | 4.67 | % | 4.21 | % | 4.51 | % | 4.05 | % | |
Future compensation assumption | 3.08 | % | 3.09 | % | n/a | n/a | |||
Expected long-term return on plan assets | 6.46 | % | 6.98 | % | 5.00 | % | 5.00 | % |
Pension | Postretirement | ||||||||||||||||||||||
Years Ended December 31, | Years Ended December 31, | ||||||||||||||||||||||
Components of net periodic benefit cost: | 2016 | 2015 | 2014 | 2016 | 2015 | 2014 | |||||||||||||||||
Service cost | $15.6 | $16.8 | $10.2 | $1.5 | $1.7 | $1.1 | |||||||||||||||||
Interest cost | 52.4 | 51.3 | 33.3 | 9.4 | 9.4 | 6.5 | |||||||||||||||||
Expected return on plan assets | (71.1 | ) | (82.8 | ) | (54.6 | ) | (5.8 | ) | (7.1 | ) | (4.6 | ) | |||||||||||
Amortization of prior service cost | 0.6 | 0.6 | 0.5 | 1.1 | 1.1 | 0.6 | |||||||||||||||||
Net remeasurement losses (gains) | 73.4 | 5.7 | 98.3 | 6.3 | (12.2 | ) | 15.9 | ||||||||||||||||
Allocated benefit cost from Timken | — | — | 5.2 | — | — | 2.2 | |||||||||||||||||
Net Periodic Benefit Cost | $70.9 | ($8.4 | ) | $92.9 | $12.5 | ($7.1 | ) | $21.7 |
Total | Level 1 | Level 2 | Level 3 | |||||||||
Assets: | ||||||||||||
Cash and cash equivalents | $45.2 | $4.6 | $40.6 | $— | ||||||||
U.S government and agency securities | 220.3 | 214.2 | 6.1 | — | ||||||||
Corporate bonds | 105.2 | — | 105.2 | — | ||||||||
Equity securities | 52.2 | 52.2 | — | — | ||||||||
Mutual fund - equity | 15.3 | — | 15.3 | — | ||||||||
Mutual fund - real estate | 24.8 | 24.8 | — | — | ||||||||
Total Assets in the fair value hierarchy | $463.0 | $295.8 | $167.2 | $— | ||||||||
Assets measured at net asset value (1) | 668.7 | — | — | — | ||||||||
Total Assets | $1,131.7 | $295.8 | $167.2 | $— |
Total | Level 1 | Level 2 | Level 3 | |||||||||
Assets: | ||||||||||||
Cash and cash equivalents | $27.8 | $2.1 | $25.7 | $— | ||||||||
U.S government and agency securities | 220.7 | 213.1 | 7.6 | — | ||||||||
Corporate bonds | 125.6 | — | 125.6 | — | ||||||||
Equity securities | 78.8 | 78.8 | — | — | ||||||||
Mutual fund - equity | 16.1 | — | 16.1 | — | ||||||||
Mutual fund - real estate | 33.9 | 33.9 | — | — | ||||||||
Total Assets in the fair value hierarchy | $502.9 | $327.9 | $175.0 | $— | ||||||||
Assets measured at net asset value (1) | 641.4 | — | — | — | ||||||||
Total Assets | $1,144.3 | $327.9 | $175.0 | $— |
Total | Level 1 | Level 2 | Level 3 | |||||||||
Assets: | ||||||||||||
Cash and cash equivalents | $1.4 | $1.4 | $— | $— | ||||||||
Total Assets in the fair value hierarchy | $1.4 | $1.4 | $— | $— | ||||||||
Assets measured at net asset value (1) | 112.5 | — | — | — | ||||||||
Total Assets | $113.9 | $1.4 | $— | $— |
Total | Level 1 | Level 2 | Level 3 | |||||||||
Assets: | ||||||||||||
Cash and cash equivalents | $1.0 | $1.0 | $— | $— | ||||||||
Total Assets in the fair value hierarchy | $1.0 | $1 | $— | $— | ||||||||
Assets measured at net asset value (1) | 136.9 | — | — | — | ||||||||
Total Assets | $137.9 | $1.0 | $— | $— |
Postretirement | |||||||||||
Benefit Payments: | Pension | Gross | Medicare Part D Subsidy Receipts | ||||||||
2017 | $78.2 | $20.3 | $0.7 | ||||||||
2018 | 88.1 | 19.8 | 0.7 | ||||||||
2019 | 76.2 | 19.3 | 0.8 | ||||||||
2020 | 75.2 | 18.4 | 0.9 | ||||||||
2021 | 75.8 | 17.6 | 0.9 | ||||||||
2022-2026 | 373.8 | 77.2 | 5.0 |
|
2016 | 2015 | 2014 Subsequent to Spinoff | 2014 Prior to Spinoff | ||||
Weighted-average fair value per option | $3.32 | $11.21 | $18.43 | $23.17 | |||
Risk-free interest rate | 1.34% | 1.47% | 1.78% | 1.80% | |||
Dividend yield | —% | 1.93% | 1.22% | 1.75% | |||
Expected stock volatility | 41.71% | 47.10% | 47.00% | 50.35% | |||
Expected life - years | 6 | 6 | 6 | 6 |
Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value (millions) | ||||
Outstanding as of December 31, 2015 | 1,617,503 | $28.68 | |||||
Granted | 644,580 | $7.47 | |||||
Exercised | (6,825 | ) | $11.24 | ||||
Canceled, forfeited or expired | (35,861 | ) | $24.05 | ||||
Outstanding as of December 31, 2016 | 2,219,397 | $22.64 | 6.22 | $5.5 | |||
Options expected to vest | 968,982 | $15.90 | 8.53 | $5.1 | |||
Options exercisable | 1,239,280 | $27.82 | 4.41 | $0.4 |
Number of Shares | Weighted Average Grant Date Fair Value | ||||
Outstanding as of December 31, 2015 | 339,410 | $30.31 | |||
Granted | 426,090 | $7.16 | |||
Vested | (38,641 | ) | $30.60 | ||
Canceled, forfeited or expired | (30,706 | ) | $3.93 | ||
Outstanding as of December 31, 2016 | 696,153 | $17.57 |
|
Years Ended December 31, | |||||||
2016 | 2015 | ||||||
Net Sales: | |||||||
United States | $763.4 | $979.5 | |||||
Foreign | 106.1 | 126.7 | |||||
$869.5 | $1,106.2 |
December 31, | ||||||
2016 | 2015 | |||||
Long-lived Assets: | ||||||
United States | $766.6 | $799.3 | ||||
Foreign | 0.3 | 0.6 | ||||
$766.9 | $799.9 |
|
Years Ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
United States | ($136.2 | ) | ($82.2 | ) | $69.0 | ||||||
Non-United States | (5.8 | ) | 10.5 | (0.3 | ) | ||||||
(Loss) income from operations before income taxes | ($142.0 | ) | ($71.7 | ) | $68.7 |
Years Ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Current: | |||||||||||
Federal | $— | $— | $32.3 | ||||||||
State and local | 0.1 | (1.2 | ) | 5.3 | |||||||
Foreign | 0.2 | 0.1 | 0.5 | ||||||||
$0.3 | ($1.1 | ) | $38.1 | ||||||||
Deferred: | |||||||||||
Federal | ($32.9 | ) | ($28.7 | ) | ($10.4 | ) | |||||
State and local | (3.6 | ) | 0.2 | (3.5 | ) | ||||||
Foreign | (0.3 | ) | 2.9 | (1.6 | ) | ||||||
(36.8 | ) | (25.6 | ) | (15.5 | ) | ||||||
United States and foreign tax (benefit) expense on (loss) income | ($36.5 | ) | ($26.7 | ) | $22.6 |
Years Ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Tax at the U.S. federal statutory rate | ($49.7 | ) | ($25.2 | ) | $24.2 | ||||||
Adjustments: | |||||||||||
State and local income taxes, net of federal tax benefit | (3.5 | ) | (2.2 | ) | 1.1 | ||||||
Foreign earnings taxed at different rates including tax holidays | (0.1 | ) | — | — | |||||||
U.S. domestic manufacturing deduction | — | — | (3.2 | ) | |||||||
U.S. research tax credit | (0.4 | ) | (0.5 | ) | (0.6 | ) | |||||
Valuation allowance | 15.6 | — | — | ||||||||
Other items, net | 1.6 | 1.2 | 1.1 | ||||||||
(Benefit) provision for income taxes | ($36.5 | ) | ($26.7 | ) | $22.6 | ||||||
Effective income tax rate | 25.7 | % | 37.2 | % | 32.9 | % |
December 31, | |||||||
2016 | 2015 | ||||||
Deferred tax assets: | |||||||
Pension and postretirement benefits | $70.3 | $34.6 | |||||
Other employee benefit accruals | 9.1 | 7.2 | |||||
Tax loss carryforwards | 107.4 | 63.7 | |||||
Intangible assets | 2.5 | 2.9 | |||||
Inventory | 2.9 | 2.9 | |||||
State decoupling | 0.5 | 1.6 | |||||
Other, net | 5.3 | 3.7 | |||||
Deferred tax assets subtotal | $198.0 | $116.6 | |||||
Valuation allowances | (24.4 | ) | (10.2 | ) | |||
Deferred tax assets | 173.6 | 106.4 | |||||
Deferred tax liabilities: | |||||||
Depreciation | ($156.8 | ) | ($136.3 | ) | |||
Inventory | (9.7 | ) | (1.0 | ) | |||
Convertible debt | (6.6 | ) | — | ||||
Other, net | (0.2 | ) | (1.1 | ) | |||
Deferred tax liabilities subtotal | (173.3 | ) | (138.4 | ) | |||
Net deferred tax assets (liabilities) | $0.3 | ($32.0 | ) |
Years Ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Beginning balance, January 1 | $— | $— | $0.7 | ||||||||
Tax positions related to prior years: | |||||||||||
Reductions | — | — | (0.7 | ) | |||||||
Ending balance, December 31 | $— | $— | $— |
|
Beginning balance, January 1, 2015 | $1.3 | ||
Expenses | — | ||
Payments | (0.5 | ) | |
Ending balance, December 31, 2015 | $0.8 | ||
Expenses | — | ||
Payments | (0.2 | ) | |
Ending balance, December 31, 2016 | $0.6 |
|
Beginning balance, January 1, 2015 | $— | ||
Expenses | 5.6 | ||
Payments | (3.3 | ) | |
Ending balance, December 31, 2015 | $2.3 | ||
Expenses | 0.3 | ||
Payments | (2.5 | ) | |
Ending balance, December 31, 2016 | $0.1 |
|
Quarters Ended | |||||||||||||||
December 31 | September 30 | June 30 | March 31 | ||||||||||||
2016 | |||||||||||||||
Net Sales | $214.7 | $213.8 | $223.1 | $217.9 | |||||||||||
Gross (Loss) Profit | (44.7 | ) | (6.2 | ) | 15.3 | 8.5 | |||||||||
Net (Loss) Income (1) | (67.0 | ) | (22.2 | ) | (6.6 | ) | (9.7 | ) | |||||||
Per Share Data: (2) | |||||||||||||||
Basic (loss) earnings per share | ($1.52 | ) | ($0.50 | ) | ($0.15 | ) | ($0.22 | ) | |||||||
Diluted (loss) earnings per share | ($1.52 | ) | ($0.50 | ) | ($0.15 | ) | ($0.22 | ) |
Quarters Ended | |||||||||||||||
December 31 | September 30 | June 30 | March 31 | ||||||||||||
2015 | |||||||||||||||
Net Sales | $206.6 | $232.7 | $278.2 | $388.7 | |||||||||||
Gross Profit | 9.3 | (12.3 | ) | 2.1 | 47.1 | ||||||||||
Net Income (1) | (13.8 | ) | (24.5 | ) | (18.1 | ) | 11.4 | ||||||||
Per Share Data: (2) | |||||||||||||||
Basic earnings per share | ($0.31 | ) | ($0.55 | ) | ($0.40 | ) | $0.25 | ||||||||
Diluted earnings per share | ($0.31 | ) | ($0.55 | ) | ($0.40 | ) | $0.25 |
Quarters Ended | |||||||||||
September 30 | June 30 | March 31 | |||||||||
2016 | |||||||||||
Net Sales | $213.8 | $223.1 | $217.9 | ||||||||
Gross (Loss) Profit | 2.5 | 10.2 | 3.4 | ||||||||
Net Loss (1) | (16.6 | ) | (10.5 | ) | (13.6 | ) | |||||
Per Share Data: (2) | |||||||||||
Basic loss per share | ($0.38 | ) | ($0.24 | ) | ($0.31 | ) | |||||
Diluted loss per share | ($0.38 | ) | ($0.24 | ) | ($0.31 | ) |
Quarters Ended | |||||||||||||||
December 31 | September 30 | June 30 | March 31 | ||||||||||||
2015 | |||||||||||||||
Net Sales | $206.6 | $232.7 | $278.2 | $388.7 | |||||||||||
Gross (Loss) Profit | (6.2 | ) | (20.5 | ) | (6.1 | ) | 41.6 | ||||||||
Net (Loss) Income (1) | (24.2 | ) | (30.8 | ) | (24.3 | ) | 6.9 | ||||||||
Per Share Data: (2) | |||||||||||||||
Basic (loss) earnings per share | ($0.55 | ) | ($0.69 | ) | ($0.54 | ) | $0.15 | ||||||||
Diluted (loss) earnings per share | ($0.55 | ) | ($0.69 | ) | ($0.54 | ) | $0.15 |
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