Financing Arrangements

3 Months Ended

Mar. 31, 2024

Debt Disclosure [Abstract]

Financing Arrangements

Note 11 - Financing Arrangements

Short-term debt at March 31, 2024 and December 31, 2023 was as follows:

	March 31, 2024		December 31, 2023
Variable-rate Term Loan(1), maturing on August 16, 2024, with an interest rate of 5.10% at March 31, 2024 and 5.11% at December 31, 2023	$	215.8	$	220.8
Borrowings under lines of credit for certain of the Company’s foreign subsidiaries with various banks with interest rates ranging from 4.51% to 5.51% at March 31, 2024 and 4.35% to 7.33% at December 31, 2023	26.8		25.4
Short-term debt	$	242.6	$	246.2

On August 16, 2023, the Company entered into a €200 million variable-rate term loan ("2024 Term Loan"), maturing on August 16, 2024. The Company currently intends to refinance the 2024 Term Loan prior to its maturity.

Lines of credit for certain of the Company's foreign subsidiaries provide for short-term borrowings. Most of these lines of credit are uncommitted. At March 31, 2024, the Company’s foreign subsidiaries had borrowings outstanding of $26.8 million and bank guarantees of $1.7 million.

Long-term debt at March 31, 2024 and December 31, 2023 was as follows:

	March 31, 2024		December 31, 2023
Variable-rate Senior Credit Facility with an average interest rate on U.S. Dollar of 6.43% and Euro of 4.86% at March 31, 2024 and U.S. Dollar of 6.48% and Euro of 4.85% at December 31, 2023	$	251.1	$	247.4
Variable-rate Accounts Receivable Facility with an interest rate of 6.30% at March 31, 2024 and 6.42% at December 31, 2023	75.0		67.0
Variable-rate Term Loan(1), maturing on December 5, 2027, with an interest rate of 6.56% at March 31, 2024 and 6.58% at December 31, 2023	399.4		399.3
Fixed-rate Senior Unsecured Notes(1), maturing on September 1, 2024, with an interest rate of 3.875%	350.0		350.0
Fixed-rate Euro Senior Unsecured Notes(1), maturing on September 7, 2027, with an interest rate of 2.02%	161.8		165.5
Fixed-rate Senior Unsecured Notes(1), maturing on December 15, 2028, with an interest rate of 4.50%	397.8		397.7
Fixed-rate Medium-Term Notes, Series A(1), maturing at various dates through May 2028, with interest rates ranging from 6.74% to 7.76%	154.8		154.8
Fixed-rate Senior Unsecured Notes(1), maturing on April 1, 2032, with an interest rate of 4.125%	344.1		343.7
Fixed-rate Euro Bank Loan, maturing on June 30, 2033, with an interest rate of 2.15%	12.1		12.7
Other	11.1		11.6
Total debt	$	2,157.2	$	2,149.7
Less: current maturities	359.3		359.4
Long-term debt	$	1,797.9	$	1,790.3

(1) Net of discounts and fees

Note 11 - Financing Arrangements (continued)

The Company has a $100 million Amended and Restated Asset Securitization Agreement (the "Accounts Receivable Facility"), which matures on November 30, 2026. Under the terms of the Accounts Receivable Facility, the Company sells, on an ongoing basis, certain domestic trade receivables to Timken Receivables Corporation, a wholly-owned consolidated subsidiary that, in turn, uses the trade receivables to secure borrowings that are funded through a vehicle that issues commercial paper in the short-term market. Borrowings under the Accounts Receivable Facility may be limited to certain borrowing base limitations; however, availability under the Accounts Receivable Facility was not reduced by any such borrowing base limitations at March 31, 2024. As of March 31, 2024, there were $75.0 million in outstanding borrowings under the Accounts Receivable Facility, which reduced the availability under this facility to $25.0 million. The cost of this facility, which is the prevailing commercial paper rate plus facility fees, is considered a financing cost and is included in interest expense in the Consolidated Statements of Income.

On December 5, 2022, the Company entered into the Fifth Amended and Restated Credit Agreement ("Credit Agreement"), which is comprised of a $750 million unsecured revolving credit facility ("Senior Credit Facility") and a $400 million unsecured term loan facility ("2027 Term Loan") that each mature on December 5, 2027. The interest rates under the Credit Agreement are based on Secured Overnight Financing Rate ("SOFR"). At March 31, 2024, the Company had $251.1 million of outstanding borrowings and $0.1 million of letters of credit under the Senior Credit Facility, which reduced the availability under this facility to $498.8 million. The Credit Agreement has two financial covenants: a consolidated leverage ratio and a consolidated interest coverage ratio.

The Company has outstanding fixed-rate unsecured notes ("2024 Notes") in the aggregate principal amount of $350 million with an interest rate of 3.875%, maturing on September 1, 2024. The Company currently intends to refinance the 2024 Notes prior to their maturity.

At March 31, 2024, the Company was in full compliance with all applicable covenants on its outstanding debt.

In the ordinary course of business, the Company utilizes standby letters of credit issued by financial institutions to guarantee certain obligations, most of which relate to insurance contracts and certain indirect taxes. At March 31, 2024, outstanding letters of credit totaled $59.5 million, most with expiration dates within 12 months.

The maturities of long-term debt (including $6.0 million of finance leases) subsequent to March 31, 2024 are as follows:

Year
2024	$	359.0
2025	29.4
2026	128.6
2027	770.4
2028	522.0
2029	1.7
Thereafter	355.1

The table above excludes $8.9 million of unamortized premiums and fees that are netted against long-term debt at March 31, 2024.