Slide 1: Timken 2Q 2014 Earnings, July 31, 2014
Exhibit 99.2 Exhibit THE 2Q JULY 2014 TIMKEN 31, 99.2 EARNINGS 2014 COMPANY
Slide 2: 2Q 2014 Earnings Call Details
EARNINGS Timken 11:00 (Call Conference Replay: 888-203-1112 (Replay Replay 2Live Webcast: Dial-In: in a.m. Passcode: 10 2Q Replay available Eastern minutes 2014 Call: ID: CALL 800-344-6698 or www.timken.com/investors Timken Dial-In 719-457-0820 Thursday Conference approx. 2219857 Time prior DETAILS
Slide 3: Forward-Looking Statements and Non-GAAP Financial Information
FORWARD-LOOKING NON-GAAP Certain of Private the company in company’s weakness operating performance, potential factors current future This 3GAAP its the future presentation end events equivalents are reports Securities statements benefits cautions markets results; in financial discussed customers, g
Slide 4: Agenda
AGENDA 2Q Q Rich Phil 4Steve &Financial Business Fracassa AKyle Tschiegg with– Timken President & Review – –CFO Strategy Director, Management & Update CEOCapital Markets & Investor Relations
Slide 5: 2Q 2014 Highlights
2Q 2014 Sales Lower Net After Adjusted Completed Communicated Additional Purchased Announced Acquired 5Note: income adjustments, of up See shipments $789 in HIGHLIGHTS EBIT the page approximately 10 TimkenSteel Process intent the per assets million, million Appendix margins DeltaX Capital diluted in
Slide 6: DeltaX Multi-year Initiative
Multi-year INITIATIVE Objective Enhance XSell, $22 6Expand million a our project Timken’s toinitiative global project firmly within reach collaborative position will to the accelerate leverage DeltaX Timken technical the product initiative, among SAP infrastructure development sales its will custome
Slide 7: Schulz Group Acquisition
SCHULZ Industrial U.S. 2013 Based Strategic 7The acquisitions Markets sales in New Fit: Services: GROUP of advances approx. Sectors Haven, ofACQUISITION Philadelphia provides Served: $18 CT, industrial million with electric nuclear, ~125 Gear, services motor employees hydro Wazee, capabilities, &and
Slide 8: Financial Review
TIMKEN FINANCIAL REVIEW Stronger. Commitment. Stronger. Value. Stronger. Worldwide. Stronger. Together. | Stronger. By Design.
Slide 9: 2Q Financial Highlights
2Qof ($ Sales Gross SG&A % Impairment Other Charges Adjustments: and EBIT 9Note: Millions) 2014 plant sales $789.2 $89.9 after Margins See income, Profit 136.8 for FINANCIAL rationalizations Appendix 29.6% 17.3% adjustments & cost-reduction $92.6 2Q 233.6 $791.3 139.4 restructuring net 11.4% 12.2% ’
Slide 10: 2Q Sales Comparison
Stronger Excluding Sales $26 2Q Note: 10 2014 2013 $(30) -of Certain ($789 demand SALES Organic Millions) $791 program data million, $4COMPARISON from Growth contained $(2) exits essentially Process $789 inMobile Mobile in Industries, theunchanged Planned graph Industries, above Acquisitions offset
Slide 11: Geographic Sales vs. Prior-Year 2Q
2Q (Sales Flat EMEA (+9% +5% LatAm Spain Mexico U.S. Canada (4)% NA impact South Argentina Brazil U.K. Czech U.A.E. Japan +13% APAC Australia Indonesia Singapore 11-4% 2014 Germany of excluding China Africa (+16% Republic of Russia $789 GEOGRAPHIC currency) South excluding million, Poland France imp
Slide 12: EBIT Comparison
EBIT Strong Adjusted $100 Other Brazil Aerospace valuation 2Q Note: Costs plant 12 2014 2013 rationalizations. $(6) of Certain includes: VAT manufacturing $90 Volume/Mix EARNINGS EBIT adjustment $9 inventory tax million, $3 data ~$ -of$(10) ($96 (4) contained Millions) ~$ or M See Manufacturing per
Slide 13: Net Income and Diluted Earnings Per Share
DILUTED $2Q Tax Charges plant Provision Net Adjusted 13in’14 NET Income Income, rate Millions rationalizations 2Q 32.4% for INCOME Tax for ’13 EARNINGS cost-reduction from after EPS income rate 36.3% Continuing adjustments 34.0% $AND in(pre-tax) taxes Millions PER 35.1% initiatives (3.3) Operations
Slide 14: Mobile Industries
MOBILE EBIT Adjusted(1): Margin $400 $375 11.1% $350 $300 $325 1Q-14 8% Sales (~$30M), Decrease Adjusted 2014 Down Light (1) primarily 2Q 14345 See YOY vs. Performance increase 2013 12.0% $ 11.0% 10.0% Full-Year $370.8 EBIT decrease Vehicle $39.7 $43.7 22Q-14 1Q 371 Appendix 10.7% 11.8% toCommentar
Slide 15: Process Industries
PROCESS EBIT Adjusted(1): Margin $350 $337 $325 20.0% 18.0% $275 16.0% $300 1Q-14 9% manufacturing 2014 Sales up Industrial Gears See 2Q 15310 10 YOY vs. Performance increase Appendix 2013 22.0% 20.7% 14.0% Full-Year $336.6 EBIT increase expected $67.9 $69.7 to &2Q-14 16.7% 1Q 20.2% 20.7% 12% Servi
Slide 16: Aerospace
AEROSPACE EBIT Adjusted(1): Margin Performance Focus level An are in and 2Q most Decline 2014 relatively Defense (1) Sales 16 3Q-14 See YOY expected Performance analysis approved of end-market 2013 Full-Year $81.8 were expected $2.8 $3.2 on Appendix 3.4% 3.9% performance in Civil Commentary as achie
Slide 17: Capital Structure at a Glance
CAPITAL Strong Liquidity Return Repurchased Dividend ($ 2Q Cash Debt % Shareholders’ Note: Net 17 Millions) Debt Net ‘14 Debt $491 position $310 Net debt Balance of 4Q toto $181 of Capital Debt capital STRUCTURE $446 $400 ‘13 to its $0.25 $1.1 approximately of equity capital most $46 is Sheet $310 b
Slide 18: Cash Flow Overview
CASH ($ Net Change Pension Depreciation Income Other Cash Capital Free Note: of 18 Millions) free Income cash from OPEB 74.1 cash FLOW Expenditures taxes in &flow working operations OPEB (9.4) flow $57.6 2Q is & (58.4) OVERVIEW $40.9 defined Amortization ‘14 to expense contributions $55.4 capital it
Slide 19: Full-Year 2014 Outlook
Salesestimate July Mobile Process Aerospace Expected Includes: Cost-reduction Gain Earnings unusual Cash Less: Free Sales: Driven Assumes Includes Relates Consistent EPS Reflects 2014 Note: Notes: 19 expenditures. Estimate: Cash on FULL-YEAR FCF from (vs. CapEx Outlook up The by Industries to Indust
Slide 20: 2Q 2014 Earnings, July 31, 2014
2Q 2014 JULY 31,EARNINGS 2014
Slide 21: Appendix
TIMKEN Appendix Stronger. Commitment. Stronger. Value. Stronger. Worldwide. Stronger. Together. | Stronger. By Design.
Slide 22: GAAP Reconciliation of EBIT and EBIT Margin
GAAP Reconciliation The core Three (Dollars Percentage 2014 Net Income Provision Interest Consolidated Gain Adjustments: Cost-reduction Total adjustments (1) (2) Ontario, 22 Gain Cost-reduction Sales Income following operations on Adjustments toMonths RECONCILIATION From expense income(1.1)(0.1)%(0.
Slide 23: GAAP Reconciliation of EBIT and EBIT Margin
GAAP Reconciliation The core Three (Dollars Percentage 2014 Net Income Provision Interest Gain Adjustments: Cost-reduction Total Consolidated (1) (2) Ontario, 23 Gain Cost-reduction Sales Income following operations on Adjustments(17.6)(2.4)% 2013 Months RECONCILIATION From expense income(1.0)(0.1)%
Slide 24: Segment EBIT Reconciliation
SEGMENT Reconciliation The EBIT Mobile Gain Process Three Aerospace Ended (Dollars Cost-reduction Earnings (1) (2) and 24 Gain Cost-reduction severance following on and Months Percentage Industries Industries sale in on before EBIT millions) the GAAP ofThree related reconciliation of initiatives sal
Slide 25: Segment EBIT Reconciliation
SEGMENT Reconciliation The segment operations Mobile Gain Process Three Aerospace Ended (Dollars Cost-reduction Earnings (1) (2) Thomas, 25 Gain Cost-reduction following on Months Percentage Industries Industries sale in performance. on Ontario, before and millions) the GAAP ofThree reconciliation o
Slide 26: GAAP Reconciliation of Net Income and EPS
GAAP Reconciliation Earnings This Timken rationalization Three (Dollars 2014 Income $Less: Gain Adjustments: Cost-reduction Provision Total Net (1) (2) Ontario, (3) adjustments 2656.5 Gain Cost-reduction Provision Income reconciliation on Adjustments: EPS Net Months $RECONCILIATION from Company sale
Slide 27: Reconciliation of Net Debt
GAAP Reconciliation This ratio capital, Debt (Dollars June 2014 Short-term Long-term Less: Net Total Ratio 27 Debt reconciliation of 30, is 2013 Debt equity Cash, ofRECONCILIATION an is total Total Net in December $defined important $debt millions) 180.7 cash $debt Debt 490.8 Debt 1,804.1 of176.2 $e
Slide 28: Reconciliation of Free Cash Flow
GAAP Reconciliation Management the (Dollars Three June 2014 Net continuing Less: Free 28 execution cash cash 30, 2013 capital Months RECONCILIATION in June provided flow 2014 operations millions) expenditures(29.5)(42.0)(48.5)(63.9) believes of 30, Ended of $ its 2013 40.9 Free by business (Unaudite
Slide 29: Timken
TIMKEN Commitment. r. Value. Str Worldwide. St Togeth Stronger.