Timken Receiving $70 Million CDSOA Payout
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Dec 16,2003
The Timken Company (USA) announced it will be receiving at least USD $70 million this year in its largest-ever payout under the Continued Dumping and Subsidy Offset Act (CDSOA). This is the third year of CDSOA payouts.
In 2001, Timken's CDSOA payout was $31 million.
In 2002, Timken's CDSOA payout was $54 million.
Ultimately, however, the total amount Timken collects is going to be far higher because it will now include a portion of the payouts to Torrington, acquired by Timken in February 2003.
Torrington's 2003 payout schedule has not yet been released, but the company's payout in 2002 was $68 million, up from $50 million in 2001. Timken hinted in its third quarter conference call that Torrington's payout might be lower in 2003 due to cyclicality. The larger factor is that, as part of the acquisition agreement, Timken has agreed to give Torrington's former owners, Ingersoll-Rand, 80% of Torrington's CDSOA payouts in 2003 and 2004.
For example, if Torrington's CDSOA payout this year is $60 million, Timken would end up receiving its own $70 million, plus $12 million (20% of Torrington's $60 million), for a total of $82 million.
In 2001, Timken and Torrington combined to collect $81 million, or 35% of the total $230 million distributed. The average CDSOA payout last year was approximately $165,000. For 2002, the two bearing industry recipients pulled in $122 million in CDSOA payouts, by far the largest industry collection. Together, Timken and Torrington accounted for 37% of the total $329 million paid in 2002 to all claimants from all U.S. industries.
In 2001, Timken allocated $2.5 million (8.5% of the total) to Automotive Bearings and $27.1 million (91.5% of the total) to Industrial Bearings. For 2002, those allocations changed dramatically, with Automotive receiving $10.8 million (21.5% of the total) and Industrial receiving $39.4 million (78.5% of the total).
This year, Timken said it will use the CDSOA money exclusively to pay down debt, which it incurred to fund the Torrington acquisition. The debt level and payback schedule also played a role in its recent debt downgrade by Moody's. In the third quarter, Timken paid down debt by $78 million, then used $55 million from an October 2003 share offering to pay it down further.
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1.The news above mentioned with detailed source are from internet.We are trying our best to assure they are accurate ,timely and safe so as to let bearing users and sellers read more related info.However, it doesn't mean we agree with any point of view referred in above contents and we are not responsible for the authenticity. If you want to publish the news,please note the source and you will be legally responsible for the news published.
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