Impairment and Restructuring Charges

12 Months Ended

Dec. 31, 2024

Note 16 - Impairment and Restructuring Charges

Impairment and restructuring charges by segment were as follows:

Year ended December 31, 2024:


	Engineered Bearings		Industrial Motion		Total
Impairment charges	$	2.0	$	1.5	$	3.5
Severance and related benefit costs	2.6		5.0		7.6
Exit costs	2.0		0.3		2.3
Total	$	6.6	$	6.8	$	13.4

Year ended December 31, 2023:


	Engineered Bearings		Industrial Motion		Total
Impairment charges	$	4.9	$	28.3	$	33.2
Severance and related benefit costs	5.5		5.6		11.1
Exit costs	0.9		0.3		1.2
Total	$	11.3	$	34.2	$	45.5

Year ended December 31, 2022:


	Engineered Bearings		Industrial Motion		Total
Impairment charges	$	9.0	$	29.3	$	38.3
Severance and related benefit costs	2.7		1.5		4.2
Exit costs	1.4		0.2		1.6
Total	$	13.1	$	31.0	$	44.1

The following discussion explains the major impairment and restructuring charges recorded for the periods presented; however, it is not intended to reflect a comprehensive discussion of all amounts in the tables above.

Engineered Bearings:

On January 16, 2023, the Company announced the closure of its bearing plant in Gaffney, South Carolina. The facility ceased operations at the end of the fourth quarter of 2023 and affected approximately 225 employees. The Company transferred its operations to other bearing manufacturing facilities. During 2024, the Company recorded severance and related benefits of $0.2 million and exit costs of $1.7 million related to this closure. During 2023, the Company recorded severance and related benefits of $3.6 million and exit costs of $0.6 million related to this closure. During 2022, the Company recorded severance and related benefits of $0.9 million related to this closure. The Company incurred cumulative pretax costs related to this closure of $16.8 million as of December 31, 2024, including rationalization costs recorded in cost of products sold.

During 2024, the Company recorded impairment charges of $2.0 million related to certain engineering-related assets used in the business. Management concluded no further investment would be made in these assets and as a result, reduced the value to zero.

As a result of Russia's invasion of Ukraine (and associated sanctions), the Company suspended its operations in Russia in 2022. During the year ended December 31, 2023, the Company recorded impairment charges of $3.9 million related to certain assets of its Russian JV. During the year ended December 31, 2022, the Company recorded impairment charges of $9.0 million related to certain assets of its Russian JV. During the fourth quarter of 2023, after evaluating various plans for the Russian JV and the Company's ability to control and influence the joint venture, the Company concluded it should deconsolidate its Russian JV and wrote-down the remaining investment of $4.7 million to zero.

Note 16 - Impairment and Restructuring Charges (continued)

During the year ended December 31, 2023 the Company classified TWB as assets held for sale and recorded impairment charges of $1.0 million. The Company subsequently completed the sale of TWB on October 16, 2023.

On July 19, 2021, the Company announced the closure of its bearing manufacturing facility in Villa Carcina, Italy. The Company transferred the manufacturing of its single-row tapered roller bearing production to other bearing facilities. The Company completed the closure of the facility on October 31, 2022, and it affected approximately 110 employees. During 2022, the Company recorded severance and related benefits of $1.4 million and exit costs of $1.6 million related to this closure. The exit costs recognized in 2022 primarily related to environmental remediation. The Company incurred cumulative pretax costs related to this closure of $9.9 million as of December 31, 2022, including rationalization costs recorded in cost of products sold. On November 1, 2022, the Company completed the sale of this facility and recognized a pretax gain of $3.6 million.

Industrial Motion:

On December 6, 2024, the Company announced a reduction in force for its belts manufacturing facility in Springfield, Missouri. The reorganization of this facility is expected to affect approximately 100 employees and be completed during the first half of 2026. On November 30, 2023, the Company announced the closure of its belts manufacturing facility in Fort Scott, Kansas. The Company expects to transfer its operations to other belts manufacturing facilities. The closure of this facility is expected to occur by the end of the second quarter of 2025 and is expected to affect approximately 155 employees. The Company expects to incur approximately $12 million to $14 million of pretax costs in total related to the closure of the Fort Scott facility and the reorganization of the Springfield facility. During the twelve months ended December 31, 2024, the Company recorded severance and related benefits of $2.5 million, related to the closure and reorganization. The Company has incurred cumulative pretax costs related to this closure of $6.8 million as of December 31, 2024, including rationalization costs recorded in cost of products sold.

During 2022, the Company announced certain organizational changes, which included the appointment of executive leaders for its Engineered Bearings and Industrial Motion product groups. After evaluating the impact from the organizational changes and related segmentation implications through the balance of 2022, the Company concluded that it would begin operating under two new reportable segments, Engineered Bearings and Industrial Motion, effective January 1, 2023. In conjunction with this change in segmented results, the Company reallocated its goodwill to new reporting units under these two segments. In addition, the Company was required to review goodwill for impairment under these new reporting units. As a result of this goodwill impairment review, the Company recognized a pretax goodwill impairment loss of $28.3 million during the three months ended March 31, 2023 for its Belts and Chain reporting unit. In 2024, the Company recognized a pretax goodwill impairment loss of $1.5 million for its Belts and Chain reporting unit.

In 2022, the Company classified the Timken Aerospace Drives Systems, LLC ("ADS") business as assets held for sale and recorded impairment charges of $29.3 million. The Company subsequently completed the sale of the ADS business on November 1, 2022.

During the year ended December 31, 2023, the Company recorded severance and related benefits of $2.2 million related to one of its automatic lubrication systems facilities in Europe and $1.5 million related to its gear drive manufacturing facility in Europe to align current employment levels with current demand.

Consolidated Restructuring Accrual:

The following is a rollforward of the consolidated restructuring accrual for the years ended December 31, 2024 and 2023:


	2024		2023
Beginning balance, January 1	$	5.8	$	3.1
Expense	9.9		12.3
Payments	(12.0)		(9.6)
Ending balance, December 31	$	3.7	$	5.8

The restructuring accrual at December 31, 2024 and 2023 is included in other current liabilities on the Consolidated Balance Sheets.