CANTON,
Ohio, July 13, 2022 /PRNewswire/ -- TimkenSteel
(NYSE: TMST), a leader in high-quality specialty steel,
manufactured components, and supply chain solutions, on
July 7, 2022, entered into an
agreement to purchase a group annuity contract from The Prudential
Insurance Company of America ("Prudential") to settle approximately
$250 million of the company's
approximate $800 million in U.S.
pension obligations under the TimkenSteel Corporation Bargaining
Unit Pension Plan (the "Pension Plan").
In connection with the agreement, Prudential will pay future
benefits under the group annuity contract starting October 1, 2022, for a specified group of
approximately 1,900 retirees and beneficiaries who are currently
receiving payments from the Pension Plan. Prudential is a highly
rated insurance company and was selected by the Pension Plan's
fiduciary, with the advice of an independent expert.
"Prudential was carefully selected as a highly rated and
experienced retirement benefits provider," said Kristopher R. Westbrooks, TimkenSteel's
executive vice president and chief financial officer. "This
transaction is a significant step to further strengthen the
Company's balance sheet and de-risk our pension plan."
Benefits payable to the retirees and beneficiaries and to
other Pension Plan participants will not be reduced as a result of
this transaction. The group annuity contract is an
irrevocable commitment by Prudential to make annuity payments to
participants and beneficiaries covered under the contract.
TimkenSteel is notifying by mail those individuals who are covered
by the forthcoming change and will provide a customer service
number to address any questions that covered participants and
beneficiaries may have.
The group annuity contract will be purchased using existing
assets of the Pension Plan and requires no cash contribution from
the company. Once finalized, this annuity purchase is expected to
reduce TimkenSteel's U.S. pension obligation by approximately
$250 million, or 25% percent. The
company expects to realize a non-cash pension settlement gain of
approximately $2 million in the third
quarter.
The Pension Plan's fiduciaries, with the assistance of an
independent expert, conducted an objective and thorough analysis of
potential insurance companies with sufficient capacity,
creditworthiness, and administrative claims-paying capabilities so
that the Pension Plan could purchase the group annuity contract in
accordance with applicable law and U.S. Department of Labor
guidelines. Following this process, the Pension Plan fiduciaries
selected Prudential to provide the group annuity contract.
ABOUT PRUDENTIAL
Prudential Financial, Inc. (NYSE: PRU), a global financial
services leader and premier active global investment manager with
more than $1.5 trillion in assets
under management as of March 31,
2022, has operations in the United
States, Asia, Europe, and Latin
America. Prudential's diverse and talented employees help
make lives better and create financial opportunity for more people
by expanding access to investing, insurance, and retirement
security. Prudential's iconic Rock symbol has stood for strength,
stability, expertise, and innovation for more than a century. For
more information, please visit news.prudential.com.
ABOUT TIMKENSTEEL
CORPORATION
TimkenSteel (NYSE: TMST) manufactures high-performance carbon
and alloy steel products from recycled scrap metal in Canton, OH, serving demanding applications in
mobile, energy and a variety of industrial end markets. The company
is a premier U.S. producer of alloy steel bars (up to 16 inches in
diameter), seamless mechanical tubing and manufactured components.
In the business of making high-quality steel for more than 100
years, TimkenSteel's proven expertise contributes to the
performance of our customers' products. The company employs
approximately 1,800 people and had sales of $1.3 billion in 2021. For more information,
please visit us at www.timkensteel.com.
FORWARD-LOOKING
STATEMENTS
This news release includes "forward-looking" statements
within the meaning of the federal securities laws. You can
generally identify the company's forward-looking statements by
words such as "will," "anticipate," "aspire," "believe," "could,"
"estimate," "expect," "forecast," "outlook," "intend," "may,"
"plan," "possible," "potential," "predict," "project," "seek,"
"target," "should," "would," "strategy," or "strategic direction"
or other similar words, phrases or expressions that convey the
uncertainty of future events or outcomes. The company cautions
readers that actual results may differ materially from those
expressed or implied in forward-looking statements made by or on
behalf of the company due to a variety of factors, such as: the
potential impact of the COVID-19 pandemic on the company's
operations and financial results, including cash flows and
liquidity; whether the company is able to successfully implement
actions designed to improve profitability on anticipated terms and
timetables and whether the company is able to fully realize the
expected benefits of such actions; deterioration in world economic
conditions, or in economic conditions in any of the geographic
regions in which the company conducts business, including
additional adverse effects from global economic slowdown, terrorism
or hostilities, including political risks associated with the
potential instability of governments and legal systems in countries
in which the company or its customers conduct business, and changes
in currency valuations; climate-related risks, including
environmental and severe weather caused by climate changes, and
legislative and regulatory initiatives addressing global climate
change or other environmental concerns; the effects of fluctuations
in customer demand on sales, product mix and prices in the
industries in which the company operates, including the ability of
the company to respond to rapid changes in customer demand
including but not limited to changes in customer operating
schedules due to supply chain constraints, the effects of customer
bankruptcies or liquidations, the impact of changes in industrial
business cycles, and whether conditions of fair trade exist in U.S.
markets; competitive factors, including changes in market
penetration, increasing price competition by existing or new
foreign and domestic competitors, the introduction of new products
by existing and new competitors, and new technology that may impact
the way the company's products are sold or distributed; changes in
operating costs, including the effect of changes in the company's
manufacturing processes, changes in costs associated with varying
levels of operations and manufacturing capacity, availability of
raw materials and energy, the company's ability to mitigate the
impact of fluctuations in raw materials and energy costs and the
effectiveness of its surcharge mechanism, changes in the expected
costs associated with product warranty claims, changes resulting
from inventory management, cost reduction initiatives and different
levels of customer demands, the effects of unplanned work
stoppages, and changes in the cost of labor and benefits; the
success of the company's operating plans, announced programs,
initiatives and capital investments, and the company's ability to
maintain appropriate relations with the union that represents its
associates in certain locations in order to avoid disruptions of
business; unanticipated litigation, claims or assessments,
including claims or problems related to intellectual property,
product liability or warranty, employment matters, and
environmental issues and taxes, among other matters; cyber-related
risks, including information technology system failures,
interruptions and security breaches; the company's ability to
achieve its environmental, social, and governance ("ESG") goals,
including its 2030 ESG goals; the availability of financing and
interest rates, which affect the company's cost of funds and/or
ability to raise capital, including the ability of the company to
refinance or repay at maturity the convertible notes due
December 1, 2025; the company's
pension obligations and investment performance, and/or customer
demand and the ability of customers to obtain financing to purchase
the company's products or equipment that contain its products; the
overall impact of pension and other postretirement benefit
mark-to-market accounting; the effects of the conditional
conversion feature of the convertible notes due December 1, 2025, which, if triggered, entitles
holders to convert the notes at any time during specified periods
at their option and therefore could result in potential dilution if
the holder elects to convert and the company elects to satisfy a
portion or all of the conversion obligation by delivering common
shares instead of cash; and the impacts from any repurchases of our
common shares, including the timing and amount of any repurchases.
Further, this news release represents our current policy and intent
and is not intended to create legal rights or obligations. Certain
standards of measurement and performance contained in this news
release are developing and based on assumptions, and no assurance
can be given that any plan, objective, initiative, projection,
goal, mission, commitment, expectation, or prospect set forth in
this news release can or will be achieved. Inclusion of information
in this news release is not an indication that the subject or
information is material to our business or operating
results.
Additional risks relating to the company's business, the
industries in which the company operates, or the company's common
shares may be described from time to time in the company's filings
with the SEC. All of these risk factors are difficult to predict,
are subject to material uncertainties that may affect actual
results and may be beyond the company's control. Readers are
cautioned that it is not possible to predict or identify all of the
risks, uncertainties and other factors that may affect future
results and that the above list should not be considered to be a
complete list. Except as required by the federal securities laws,
the company undertakes no obligation to publicly update or revise
any forward-looking statement, whether as a result of new
information, future events or otherwise.
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SOURCE TimkenSteel Corp.