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The eBearing News
January 23, 2004
Timken Set to Receive $44 Million
CDSOA Payout for Torrington
copyright © 2004 eBearing Inc.
The Timken Company (USA) is likely to soon receive approximately USD $43.75 million in payouts under the
Continued Dumping and Subsidy Offset Act related to its Torrington operation. Timken acquired Torrington
from Ingersoll-Rand Corp. (Bermuda) in early 2003. The payout covers U.S. Government fiscal year 2003.
News of the Torrington payout came, not from Timken, but from Ingersoll-Rand Corp.
I-R reported today it is expecting a Torrington CDSOA payout of approximately $35 million to arrive shortly,
covering fiscal 2003.
As part of its acquisition, Timken agreed to rebate Ingersoll-Rand 80% of all Torrington-related CDSOA payouts
received for fiscal 2003 and 2004.
Working from the Ingersoll-Rand statement, the total fiscal 2003 CDSOA payout related to Torrington
works out to approximately $43.75 million.
With 80% or $35 million, going to Ingersoll-Rand, Timken nets the remaining 20%, or $8.75 million.
Only yesterday, during the company's third quarter and fiscal year earnings call with analysts, Timken
executives professed no knowledge of the Torrington payout amount or timing. Timken President and CEO
Jim Griffith said in response to an inquiry about the Torrington CDSOA, "There have been no payments
made on that Torrington piece as of yet; we are still encouraged that that payment will come in 2004 -- that
payment for what would have, let's say have been earned if you will, in 2003. But we just don't know that or
the timing of it. So once that does come about, we will absolutely let you know about it."
According to eBearing's contacts at U.S.
Customs (now U.S. Bureau of Customs and Border Protection), no payout announcements were made yesterday.
Ingersoll-Rand did not respond eBearing's inquiry as to how it knew what the Torrington payout would be while
Timken apparently did not.
One possibility is that Ingersoll-Rand is reporting only its expected payout, not an actual value given
by Customs. I-R could calculate an expected 2003 payout based on assumptions from its
previous claim filings and payouts, referencing Customs' database of 2003 CDSOA classifications and amounts
available to be paid out in each classification.
In December 2003, Timken netted $68.4 million in CDSOA payouts related to its own Timken operations.
The company had to repay $2.8 million of 2002's payout due to a miscalculation by U.S. Customs.
For fiscal 2002, Torrington received $68 million, while Timken received $54 million (reduced to $51.2 million).
In 2001, the first year of the CDSOA program, Torrington received $50 million and Timken received $31 million.
Update: February 16, 2004
Timken reported it is receiving $7.7 million of the Torrington CDSOA payout; Ingersoll-Rand still says it is
receiving $35 million.
A person knowledgable about
the Ingersoll-Rand situation told eBearing the calculated difference is likely due to the timing
of when Timken took over Torrington.
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- by Bruce A. Carr
from individual research,
tips and commercial sources.
Bruce Carr edited this content.
Copyrighted material; unauthorized reproduction prohibited.
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eBearing.com ... for everything that moves™
Entire contents Copyright © 1999-2011, eBearing Inc. All rights reserved.
eBearing.com and "... for everything that moves" are registered trademarks of eBearing Inc.
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