This spreadsheet supports STUDENT analysis of the case,

"Timken Company" (UVA -F- 1472)

Copyright (C) 2008, by the University of Virginia Darden School Foundation.

Timken Corporate Income Statements, 200102

($ millions, except percentages)
2001
Total Operating Revenue
$2,447.2
Cost of Goods Sold
(2,046.5)
Gross Profit
400.7
Sales, General & Administrative
(363.7)
Impairment and Restructuring Expenses
(54.7)
Operating Profit
(17.7)
Interest Expense (net of interest income)
(31.3)
Receipt of Continued Dumping & Subsidy Offs
29.5
Other non-operating expenses
(7.5)
Income Before Tax
(27.0)
Income Taxes
(14.8)
Net Income before Cumulative Effect of Accou ($41.7)
Cumulative Effect of Accounting Change
0.0
Net Income
($41.7)
EBIT (before non-recurring)
Depreciation
Capital Expenditures

37.0
152.5
102.3

2002
$2,550.1
(2,080.5)
469.6
(358.9)
(32.1)
78.6
(29.9)
50.2
(13.4)
85.5
(34.1)
$51.4
(12.7)
$38.7
110.7
146.5
90.7

2001
100.0%

2002
100.0%

16.4%

18.4%

-0.7%

3.1%

-1.7%

2.0%

`1

Timken Balance Sheet

($ millions)
Assets
Cash
Receivables
Inventory
Other Current Assets
Total Current Assets
Net Property Plant & Equipment
Other Assets
Total Assets

2001
33.4
307.8
429.2
58.0
828.4
1,305.3
399.4
2,533.1

2002
82.1
361.3
488.9
36.0
968.3
1,226.2
553.9
2,748.4

Liabilities
Accounts Payable
Current Portion of Long Term Debt
Notes Payable
Other Current Liabilities
Total Current Liabilities
Long Term Debt
Deferred Tax Liability
Total Liabilities
Shareholders' Equity
Total Liabilities & Owners Equity.

258.0
42.4
2.0
338.8
641.2
368.2
742.0
1,751.3
781.7
2,533.1

296.5
111.1
0.0
226.5
634.1
350.1
1,155.1
2,139.3
609.1
2,748.4

Ingersoll-Rand and Torrington Comparative Income Statements, 200102

($ millions, except percentages)
Ingersoll-Rand

Net sales
Cost of goods sold
Gross profit
Selling and administrative expenses
Restructuring charges
Operating income
Net interest expense
Minority interests
Earnings before income taxes
(Benefit)/provision for income taxes
Earnings from continuing operations
Discontinued operations (net of tax)
Cumulative effect of accounting changes
Net earnings

2001
2002
$8,604.2 $8,951.3
6,736.5
6,826.5
1,867.7
2,124.8
1,370.5
1,439.8
73.7
41.9
423.5
643.1
(268.8)
(241.0)
(20.7)
(14.4)
134.0
387.7
(48.1)
20.3
182.1
367.4
64.1
0.0
$246.2

93.6
(634.5)
($173.5)

2001
100.0%

2002
100.0%

21.7%

23.7%

4.9%

7.2%

2.9%

-1.9%

Torrington

Sales
Operating Income

2001
$1,004.3
$78.0

2002
$1,204
$85.2

2001
100.0%
7.8%

2002
100.0%
7.1%

Ingersoll-Rand Balance Sheet

($ millions)
Assets
Cash
Receivables
Inventory
Deferred Tax Asset
Other Current Assets
Total Current Assets
Net Property Plant & Equipment
Goodwill
Intangible Assets
Other Assets
Total Assets

2001
$114.0
1,359.8
1,143.9
321.2
760.2
3,699.1
1,289.5
4,807.5
848.1
489.6
$11,133.8

2002
$342.2
1,405.3
1,983.8
0.0
381.1
4,112.4
1,279.9
4,005.5
890.9
520.9
$10,809.6

Liabilities
Accounts Payable
Accrued Expenses
Short Term Debt
Other Current Liabilities
Total Current Assets
Long Term Debt
Minority Interests
Other Noncurrent Liabilities
Total Liabilities
Shareholders' Equity
Total Liabilities & Owners Equity

$701.6
1,470.7
561.9
249.3
2,983.5
2,900.7
107.6
1,225.4
7,217.2
3,916.6
$11,133.8

$2,347.4
1,155.5
0.0
295.2
3,798.1
2,092.1
115.1
1,326.1
7,331.4
3,478.2
$10,809.6

This data was extracted by EdgarScan from the PricewaterhouseCoopers Global Technology Centre.

ology Centre.

Torrington Financial Summary and Projections, 19992007

($ millions)
1999
Net sales
Operating income

2000

$1,239.5 $1,161.0 $1,004.3

$145.7
$172.6 $78.0

Operating Margin

11.8%

-6.3%
14.9%

Capital Expenditures

$84.0
$75.0

$85.0
$77.0

Sales Growth

Depreciation Expense

2001

2002

2003E

2004E

2005E

2006E

2007E

$1,204 $1,282.0 $1,365.3 $1,454.1 $1,548.6 $1,649.2

$85.2
$90.7
$96.6
$102.9
$109.5
$116.7

-13.5%
7.8%

19.9%
7.1%

6.5%
7.1%

6.5%
7.1%

6.5%
7.1%

6.5%
7.1%

6.5%
7.1%

$45.0
$79.0

$41.0
$80.0

$175.0
$84.2

$130.0
$90.0

$140.0
$96.0

$150.0
$102.0

$160.0
$108.5

Select Financial Ratios by S&P Credit-Rating Categories

(Median value for industrial companies, 20002002)

EBIT interest coverage (x)

EBITDA interest coverage (x)
EBITDA/sales (%)
Total debt/capital (%)

AAA
23.4
25.3
23.4%
5.0%

AA
13.3
16.9
24.0%
35.9%

A
6.3
8.5
18.1%
42.6%

BBB
3.9
5.4
15.5%
47.0%

BB
2.2
3.2
15.4%
57.7%

B
1.0
1.7
14.7%
75.1%

CCC
0.1
0.7
8.8%
91.7%

Ratio Definitions:

EBIT interest coverage = EBIT/interest expense

EBITDA interest coverage = EBITDA/interest expense
EBITDA/sales = EBITDA/sales
Total debt/capital = (Long-term debt plus current maturities and other short-term borrowings)/(Long-term debt plus current maturities and other short-term

maturities and other short-term borrowings + Shareholders equity)

Financial Data on Companies in Bearing Industry

Bearing Companies
Kaydon Corp.
NN Inc.
Timken
Commercial Metals
Metals Usa Inc.
Mueller Industries
Precision Castparts Corp
Quanex Corp.
Worthington Industries

* Millions

Beta
1.25
0.85
1.10
0.63
0.38
1.08
1.10
0.75
0.49

Debt*
72.4
53.1
461.2
255.6
128.7
18.2
612.4
75.6
290.9

Sales*
279.4
180.2
2,550.1
2,441.5
943.7
955.3
2,117.2
994.4
2,219.9

EBITDA
60.1
26.2
257.2
138.2
4.0
123.9
389.6
127.0
188.0

Net
Income*
25.4
4.7
51.5
40.5
48.8
71.2
159.4
55.5
75.2

EBITDA
Interest
# of
Coverage Shares*
3.6
30.3
6.5
15.4
7.5
63.4
5.2
28.0
0.2
20.2
84.9
34.3
6.2
52.8
5.2
16.4
2.4
85.9

Price
Per
Share
20.0
9.3
16.8
17.9
25.9
21.7
34.7
18.7

Enterprise
EBITDA
Value/
% of Sales EBITDA
21.5%
11.3
14.5%
7.5
10.1%
5.9
5.7%
5.5
0.4%
13.0%
7.3
18.4%
4.5
12.8%
5.1
8.5%
10.1

Debt
Rating

BBB
BBB

BBBBBB

Capital-Market Information
(December 2002)
Government
Yield
Short Term
1.86%
Intermediate 3.55%
Long Term
4.97%
Industrials
AAA
AA
A
BBB
BB
B

5.22%
5.38%
5.84%
7.23%
9.69%
10.84%