EX-99.1

FORWARD-LOOKING

STATEMENTS

SAFE

HARBOR

AND

NON-GAAP

FINANCIAL

INFORMATION

Certain statements in this presentation (including statements regarding the company's forecasts, beliefs, estimates and

expectations) that are not historical in nature are "forward-looking" statements within the meaning of the Private

Securities Litigation Reform Act of 1995. In particular, the statements related to Timken’s plans, outlook, future

financial performance, targets, projected sales, cash flows, and

liquidity, including the information under the headings

“Attractiveness/Strategic Priorities”, “Sales”, “Earnings Per Share”, “Free Cash Flow”, “Capital Spending”, “Pension”,

“2012 Capital Allocation Highlights”

and “Return on Invested Capital”

are forward-looking. The company cautions that

actual results may differ materially from those projected or implied in forward-looking statements due to a variety of

important factors, including: the company’s ability to respond to the changes in its end markets that could affect

demand for the company’s products; unanticipated changes in business relationships with

customers or their purchases

from the company; changes in the financial health of the company’s customers, which may have an impact on the

company’s revenues, earnings and impairment charges; fluctuations in raw-material and energy costs and their impact

on the operation of the company’s surcharge mechanisms; the impact of the company’s last-in, first-out accounting;

weakness in global or regional economic conditions and financial

markets; changes in the expected costs associated

with product warranty claims; the ability to integrate acquired companies to achieve satisfactory operating results; the

impact on operations of general economic conditions, higher or lower raw-material and energy costs, fluctuations in

customer demand, the company’s ability to achieve the benefits of its ongoing programs, initiatives & capital

investments, and

retention of CDSOA distributions. Additional factors are discussed in the company’s filings with the

Securities and Exchange Commission, including the company’s annual report on Form 10-K for the year ended Dec. 31,

2011, quarterly reports on Form 10-Q and current reports on Form 8-K. The company undertakes no obligation to

update or revise any forward-looking statement.

This presentation includes certain non-GAAP financial measures as defined by the rules and regulations of the Securities

and Exchange Commission. A reconciliation of those measures to the most directly comparable GAAP equivalent is

provided in the Appendix to this presentation.

Process --

Global growth

beyond bearings, diversified,

strong aftermarket

Sales: $1.0 Billion

EBIT Margin: 21.3%

Mobile --

Transformed portfolio,

more aftermarket focus

Sales: $1.3 Billion

EBIT Margin: 13.2%

Aerospace & Defense

Diversified into transmissions

and aftermarket

Sales: $263 million

EBIT Margin: 10.0%

Steel

High-performance,

customized alloy steels

Sales: $1.4 Billion

EBIT Margin: 16.0%

THE

TIMKEN

COMPANY

TODAY

Note: Based on September 30, 2012 YTD financial results. Steel segment sales include $82.6 million of inter-segment sales.

Process

Industries

Steel

Aerospace

& Defense

Mobile

Industries

25%

33%

35%

Nine Months 2012

Total Sales: $3.9 Billion

STRONG

TIES

BETWEEN

BUSINESSES

DRIVE

VALUE

•

Best in class provider of high performance

products for demanding conditions

•

Technical knowledge

•

Research synergies

•

Production capabilities

•

Application engineering

•

Supply-chain efficiencies

•

Manufacturing efficiencies

•

Value-based pricing

•

Ability to leverage investments

across platform

•

Customer service and delivery

Process Industries | Mobile Industries

Steel | Aerospace & Defense

•

Automotive

Common End-

Market Sectors

•

Construction

•

Energy

Shared

Customers

Shared

Expertise

Operating

Efficiencies

Combined platform drives performance and value

•

Aerospace & Defense

•

Mining

•

Agriculture

•

Industrial Machinery

•

Rail

•

Heavy Truck

THE

STRATEGY

WORKING:

TIMKEN

HAS

DELIVERED

TOP

QUARTILE

PERFORMANCE

Timken has delivered top

quartile performance

versus comparable

companies in:

EBITDA margin

Return on invested

capital (ROIC)

(1)

Source: Company filings and Factset as of October 26, 2012. Represents average of 2008 through LTM 2012. Tax rate assumed at 35%. Results exclude

U.S. Continued Dumping Subsidy Offset Act (CDSOA) receipts and impairment and restructuring expense. See Appendix for reconciliation of EBITDA and

ROIC to the most directly comparable GAAP equivalents. EBITDA and ROIC are not defined under U.S. GAAP and should not be considered in isolation or as

a substitute for measures of our performance prepared in accordance with GAAP. Because not all companies use identical calculations, the presentation of

EBITDA and ROIC may not be comparable to other similarly titled measures of other companies.

(2)

Comparable

Companies

include:

Steel,

Allegheny

Technologies,

Altra,

Carpenter

Technology,

JTEKT,

Kennametal,

NSK,

NTN,

Nucor,

SKF,

Steel

Dynamics,

and

Steel.

(77.4%)

(47.3%)

(42.0%)

(21.8%)

(16.5%)

(15.6%)

(4.8%)

9.0%

42.9%

52.1%

63.2%

67.8%

100.9%

(120.0%)

(80.0%)

(40.0%)

0.0%

40.0%

80.0%

120.0%

160.0%

(88.9%)

(76.5%)

(74.7%)

(67.3%)

(57.9%)

(44.0%)

(40.1%)

(27.2%)

(7.8%)

8.0%

11.6%

45.1%

71.2%

(120.0%)

(80.0%)

(40.0%)

0.0%

40.0%

80.0%

Source:

Factset as of November 23, 2012.

(1)

Bearings

Power

Transmission

(B&PT)

comparables

include:

Altra,

JTEKT,

Kennametal,

NSK,

NTN,

and

SKF.

(2)

Steel

comparable

companies

include:

Steel,

Allegheny

Technologies,

Carpenter

Technology,

Nucor,

Steel

Dynamics,

and

Steel.

B&PT

(1)

Steel

(2)

Timken

SKF

Timken

Altra

Carpenter

Nucor

Kennametal

Steel Dynamics

NSK

JTEKT

Allegheny

US Steel

NTN

AK Steel

Carpenter

Kennametal

Timken

SKF

Altra

NSK

Nucor

Steel Dynamics

Allegheny

JTEKT

NTN

US Steel

AK Steel

Last 5 Years –

Total Shareholder Return

Last 3 Years –

Total Shareholder Return

DELIVERING

STRONG

TOTAL

SHAREHOLDER

RETURNS

NEW

ACQUISITIONS, NEW

CAPABILITIES

Differentiated performance •

Industrial focus •

Strong aftermarket •

Supply chain synergy

Sales/Timing

Product

Offering

Growth

Synergies

Sales: $85M

Purchase date: July ‘11

Sales: $100M

Purchase date: Oct. ‘11

2011 Sales: $23M

Purchase date: Sept. ‘10

Gear drive repair

Engineered chains

and augers

Mounted spherical roller

bearings and couplings

Capture lifetime of revenue opportunity

Leverage distribution channel

Opportunities for cross-selling and development of product lines

Global expansion

NOTE:

Sales

for

Philadelphia

Gear

and

Drives

reflect

last

12-month

sales

time

purchase.

Sales

for

Bearings

reflect

both

Mobile

Industries

and

Process

Industries

sales.

MOBILE

INDUSTRIES

Bearings, power transmission components

and related products and services

Serves diverse market sectors

Customers: OEM and aftermarket distributors

Portfolio shift toward attractive markets;

In 2005 passenger car and light truck was

54% of the portfolio versus 35% in 2011

Profitability turn-around; achieving returns

in excess of cost of capital

Capitalizing on mining, agricultural and

commercial transportation demand while

managing strategic pricing initiative

Strategy –

provide high-value power

transmission products and services focused

on demanding applications to global OE

and aftermarket channels

Sector Profile

Segment Overview

Attractiveness / Strategic Priorities

Geographic Sales

PROCESS

INDUSTRIES

Precision-engineered bearings and related

mechanical components and services for

diverse industrial markets

Diverse and global customer base

~65% aftermarket in 2011; consistent,

profitable business

Diversified product portfolio

56% tapered roller bearings in 2011 versus 96% in

2000

Growing market share in spherical & cylindrical roller

bearings, housed units, other bearings & services

Sector Profile

Segment Overview

2011 sales: $1.2B

Attractiveness / Strategic Priorities

Extensive global portfolio of differentiated

mechanical power transmission products

and services

Strong distribution channels to maximize

lifetime profit

Aggressive annual sales growth; gaining

share and unlocking new mechanical

power transmission opportunities

Strategy -

focus on end-user value chain

and needs

Geographic Sales

AEROSPACE

& DEFENSE

Sector Profile

Segment Overview

Power transmission systems and

flight-critical components for civil

and military aircraft

Top 10 aerospace platforms represent

38% of sales in 2011

Aftermarket engine overhaul,

replacement parts, bearing

and component repair

Aftermarket channel represents

approximately 70% of sales in 2011

Health and positioning control applications

2011 sales: $0.3B

Product Offering Beyond Bearings

Attractiveness / Strategic Priorities

Leverage strong commercial and improving

general aviation market sectors serving

diverse platforms while defense market

sectors have bottomed

Strong execution combined with improving

markets and targeted channels have led to

growth and a return to attractive

profitability

Strategy –

provide a globally diverse

portfolio focused on growing platforms

through OE & aftermarket channels

STEEL

Sector Profile

Segment Overview

Market leadership position in high quality

air-melted alloy steel bars, tubes, precision

components and value-added services

Bars: 1”

to 16”

Serving niche high-end applications where

demands on performance are significant

Special machining characteristics

Resistance to heat, stresses or wear

High strength or other traits

Tubes: 2”

to 13”

2011 sales: $2.0B

Differentiated Solutions

Attractiveness / Strategic Priorities

An improved variable cost structure

More than half of our specialized products

cannot be competitively replicated in

North America today

450 grades of high-performance steels;

for power transmission applications

Know-how to design custom solutions with

strength where it matters

Efficient supply chains

2012 RESULTS

–

FIRST

NINE

MONTHS

Sales of $3.9B, up slightly from prior year

Driven by acquisitions, pricing & mix, partially offset by

lower sales volume and the impact of currency

EBIT of $684M, or 17.5% of sales

Includes CDSOA receipts of $109M & St. Thomas plant

closure costs of $26M

Earnings benefited from improved pricing, lower material

costs and acquisitions, partially offset by lower volume,

surcharges and higher SG&A

EPS of $4.28 per diluted share, up from prior

year’s $3.48

Includes CDSOA receipts of $0.70 per share & St. Thomas

plant closure costs of $0.27 per share

Note:

See Appendix for reconciliation of EBIT to the most directly comparable GAAP equivalent. CDSOA is a reference to

the US Continued Dumping Subsidy and Offset Act.

Free Cash Flow of $112M vs. $(230)M use of cash in prior year

From operating activities after pension contributions, capital expenditures

and dividends

Includes $245M of discretionary pension and post-retirement benefit

contributions and $68M of CDSOA receipts, both net of tax

Strong Balance Sheet

Cash position of $486M and debt of $489M, or $3M net debt

Pension & post-retirement benefits unfunded liability of $560 million,

down $400 million from 2011 year-end

Repurchased 2.5 million shares; 7.5 million shares remaining

under the authorization

Liquidity of $1.4B

Note:

Free

cash

flow

defined

net

cash

provided

operating

activities

(includes

pension

contributions)

minus

capital

expenditures

and

dividends.

Net

debt

not

GAAP

measure.

See

Appendix

for

reconciliation

Free

Cash

Flow

and

Net

Debt

the

most

directly

comparable

GAAP

equivalents.

2012 RESULTS

–

FIRST

NINE

MONTHS

Outlook

2012 Sales Estimate:

down 3 to 5%

Weakening demand,

including exited light

vehicle business as

well as lower

surcharges, to be

partially offset by

price & acquisitions

2014 Sales Target:

3-Year

CAGR

12%

global GDP recovery/

growth in 2013-2014

of 3.5% to 4%

includes inorganic

growth

SALES

Note:

2003 includes Torrington acquisition as acquired February 2003.

Historical results exclude the discontinued operations of Latrobe

Steel (2006 divestment) and the Needle Roller Bearings (NRB) business (2009 divestment). NRB discontinued operations for 2003 and 2004

are based on internal estimates.

Net Sales

($ Mils.)

*Rolling 3-year targets are typically

provided annually and were last

updated Feb. 14, 2012.

EARNINGS

PER

Earnings Per

Net Sales

($ Mils.)

Note:

Earnings

are

reported

GAAP

basis

and

include

the

impact

special

items,

such

restructuring

and

reorganization

expenses,

CDSOA

payments

and

goodwill

amortization.

EPS

assumes

dilution.

2003

includes

Torrington

acquisition

acquired

February

2003.

Historical

results

exclude

the

discontinued

operations

Latrobe

Steel

(2006

divestment)

and

the

Needle

Roller

Bearings

(NRB)

business

(2009

divestment).

NRB

discontinued

operations

for

2003

and

2004

are

based

internal

estimates.

Outlook

2012 EPS Estimate:

$4.75 to $4.95 per

diluted share

includes CDSOA

receipts of $0.70

and St. Thomas

closure costs of

$(0.30)

2014 EPS Target:

$6.50 to $7.00 per

diluted share

redeployment of

capital including

inorganic growth

Net Sales Midpoint Estimate

($ Mils.)

*Rolling 3-year targets are typically

provided annually and were last

updated Feb. 14, 2012.

FREE

CASH

FLOW

Free Cash Flow

($ Mils.)

’91-’01 Cycle Avg: $16M

’02-’09 Cycle Avg: $87M

Note:

Free cash flow is defined as net cash provided by operating activities (includes pension contributions) minus capital expenditures and

dividends. Results include discontinued operations until divested. See Appendix for reconciliation of Free Cash Flow to the most directly

comparable GAAP equivalent. VEBA is in reference to the company’s voluntary employee benefit association trust.

2014 FCF

Target*

2012 FCF

Estimate

Outlook

2012 FCF Estimate:

$145M

after,

CapEx of $300M

dividends of $90M

discretionary

2014 FCF Target:

$250 to $300M

CapEx above

*Rolling 3-year targets are typically

provided annually and were last

updated Feb. 14, 2012.

pension / VEBA trust

contributions of

$245M

(net of tax)

targeted range,

increased dividends

and lower pension /

VEBA contributions

INCENTIVE

COMPENSATION

Annual

Long-Term

Objective

Short-term Operational

Business Priorities

3-Year Strategic Business

Priorities

Long-term Shareholder

Value Creation

Participants

6,000 Associates Globally

160 Senior Leadership

Associates

265 Mid-level

Managers

160 Senior

Leadership

Associates

Time Horizon

1 Year

3 Years

4 Year Vesting with

a 10 Year Term

4 Year Vesting with

a 10 Year Term

Metrics

40%

Corporate EBIT/BIC

50% EPS

50% ROIC

Share Price

30%

Business Unit EBIT/BIC

15%

BU Working Capital % of Sales

15%

Customer Service or

New Business Sales Ratio

Note:

EBIT/BIC is a pre-tax return on invested capital (ROIC) measure. BIC denotes beginning invested capital. The incentive compensation plan depicted

above is effective January 2012.

Award

Cash

Restricted Stock Units

(in cash or shares)

Equity –

Restricted

Stock Units

Equity –

Non

Qualified Stock

Options

GAAP

RECONCILIATION

EBIT

AND

EBITDA

Mils.)

12-Months Ended

9/30/2012

12/31/2011

12/31/2010

12/31/2009

12/31/2008

Net Income

$528.8

$456.6

$276.9

($139)

$271

Income from discontinued operations, net of tax

0.0

(7.4)

72.6

11.3

Provision for income taxes

292.2

240.2

136.0

(28.2)

157.1

Interest Expense

32.6

36.8

38.2

41.9

44.4

Interest Income

(3.2)

(5.6)

(3.7)

(1.9)

(5.8)

Impairment and Restructuring

34.7

14.4

21.7

164.1

32.8

Receipt of CDSOA Distribution

(107.5)

1.1

(2.0)

(3.6)

(9.1)

EBIT

$777.6

$743.5

$459.7

$106.3

$501.9

Revenue

$5,171.4

$5,170.2

$4,055.5

$3,141.6

$5,663.7

% EBIT Margin

15.0%

14.4%

11.3%

3.4%

8.9%

Depreciation and Amortization

198.4

192.5

189.7

201.5

200.8

EBITDA

$976.0

$936.0

$649.4

$307.8

$702.7

% EBITDA Margin

18.9%

18.1%

16.0%

9.8%

12.4%

Average EBITDA Margin

15.0%

12-Months Ended

9-Months Ended

12-Months Ended

12/31/2011

Plus: 9/30/2012

Less: 9/30/2011

9/30/2012

Net Income

$456.6

$420.5

$348.3

$528.8

Income from discontinued operations, net of tax

0.0

Provision for income taxes

240.2

241.0

189.0

292.2

Interest Expense

36.8

24.0

28.2

32.6

Interest Income

(5.6)

(2.0)

(4.4)

(3.2)

Impairment and Restructuring

14.4

28.8

8.5

34.7

Receipt of CDSOA Distribution

1.1

(108.6)

0.0

(107.5)

EBIT

$743.5

$603.7

$569.6

$777.6

Revenue

$5,170.2

$3,906.7

$3,905.5

$5,171.4

% EBIT Margin

14.4%

15.5%

14.6%

15.0%

Depreciation and Amortization

192.5

148.8

142.9

198.4

EBITDA

$936.0

$752.5

$712.5

$976.0

% EBITDA Margin

18.1%

19.3%

18.2%

18.9%

Source: Company filings and Factset as of October 26, 2012.

This

reconciliation

provided

additional

relevant

information

about

the

Company’s

performance.

Management

believes

consolidated

earnings

before

interest

and

taxes

(EBIT)

are

representative

the

Company’s

performance

and

therefore

useful

investors.

Consolidated

earnings

before

interest,

taxes,

depreciation

and

amortization

(EBITDA)

are

another

important

measure

financial

performance

and

cash

generation

the

business

and

therefore

useful

investors.

Management

also

believes

that

appropriate

compare

GAAP

net

income

consolidated

EBIT

and

EBITDA.

12-Months Ended

9/30/2012

12/31/2011

12/31/2010

12/31/2009

12/31/2008

GAAP Operating Income

$748.2

$729.1

$436.2

($54.1)

$462.0

GAAP Other Income / Expenses

102.2

(1.1)

3.8

(0.1)

16.2

Impairment and Restructuring

34.7

14.4

21.7

164.1

32.8

Receipt of CDSOA Distribution

(107.5)

1.1

(2.0)

(3.6)

(9.1)

EBIT

$777.6

$743.5

$459.7

$106.3

$501.9

Tax Rate

35.0%

Provision for Income taxes

$272.2

$260.2

$160.9

$37.2

$175.7

NOPAT

$505.4

$483.3

$298.8

$69.1

$326.2

Total Debt

$488.9

$515.1

$513.7

$512.7

$623.9

Shareholder's Equity

2,345.8

2,042.5

1,941.8

1,595.6

1,663.0

Invested Capital

2,834.7

2,557.6

2,455.5

2,108.3

2,286.9

Average Invested Capital

2,696.2

2,506.6

2,281.9

2,197.6

2,485.4

ROIC

(1)

18.7%

19.3%

13.1%

3.1%

13.1%

Average 3-Year ROIC

17.0%

Average 5-Year ROIC

13.5%

Source: Company filings and Factset as of October 26, 2012.

(1)

Return on Invested Capital calculated as Net Operating Profit After Taxes / (Average Total Debt + Average Shareholders’

Equity). Tax rate assumed at 35%.

GAAP

RECONCILIATION

ROIC

($ Mils.)

12-Months Ended

9-Months Ended

12-Months Ended

12/31/2011

Plus: 9/30/2012

Less: 9/30/2011

9/30/2012

GAAP Operating Income

$729.1

$578.6

$559.5

$748.2

GAAP Other Income / Expenses

(1.1)

104.9

1.6

102.2

Impairment and Restructuring

14.4

28.8

8.5

34.7

Receipt of CDSOA Distribution

1.1

(108.6)

0.0

(107.5)

EBIT

$743.5

$603.7

$569.6

$777.6

$0.0

Tax Rate

35.0%

Provision for Income taxes

$260.2

$211.3

$199.4

$272.2

NOPAT

$483.3

$392.4

$370.2

$505.4

Reconciliation of ROIC to GAAP Operating Income

Management believes ROIC is representative of the company’s performance and therefore useful to investors.

GAAP RECONCILIATION

SEGMENT

ROIC

($ Mils.)

Reconciliation of ROIC to GAAP Operating Income

Management believes ROIC is representative of the company’s performance and therefore useful to investors.

LTM

2010

2011

2012

2010

2011

2012

2010

2011

2012

2010

2011

2012

GAAP Operating Income

183

218

196

118

261

254

(3)

129

251

279

Impairment/Restructuring

(0)

EBIT

197

232

230

122

262

255

(3)

129

251

279

Tax Rate

35%

Provision for Taxes

(1)

NOPAT

128

151

149

170

165

(2)

163

181

Invested Capital

879

840

864

553

692

829

391

362

516

632

663

625

Avg Invested Capital

860

852

511

623

761

378

377

439

533

647

644

ROIC

14.9%

17.5%

15.5%

27.3%

21.7%

1.8%

-0.4%

2.1%

15.7%

25.2%

28.1%

Average ROIC

LTM

Q4 11

YTD 12

2012

Q4 11

YTD 12

2012

Q4 11

YTD 12

2012

Q4 11

YTD 12

2012

EBIT

173

222

214

278

227

297

Allocation of Corp

(6)

(19)

(26)

(6)

(19)

(25)

(4)

(12)

(15)

(5)

(14)

(19)

Impairment/Restructuring

Adjusted EBIT

182

230

196

255

(1)

213

279

Tax Rate

35%

Provision for Taxes

(0)

NOPAT

118

149

127

165

(0)

138

181

Invested Capital

864

829

516

625

Avg Invested Capital

852

761

439

644

ROIC

17.5%

21.7%

2.1%

28.1%

Mobile

Process

Aerospace & Defense

Steel

Mobile

Process

Aerospace & Defense

Steel

17%

22%

24%

($ Mils.)

GAAP RECONCILIATION

EBIT

Nine Months

Ended

September 30,

2012

(Dollars in millions) (Unaudited)

Net Income

420.5

Provision for income taxes

241.0

Interest expense

24.0

Interest income

(2.0)

Consolidated earnings before interest and taxes (EBIT)

683.5

This

reconciliation

provided

additional

relevant

information

about

the

Company's

performance.

Management

believes

consolidated

earnings

before

interest

and

taxes

(EBIT)

are

representative

the

Company's

performance

and

therefore

useful

to investors. Management also believes that it is appropriate to compare GAAP net income to consolidated EBIT.

($ Mils.)

GAAP RECONCILIATION

FREE

CASH

FLOW

2012

2011

366.5

(67.4)

(187.3)

(106.0)

(66.8)

(56.6)

112.4

(230.0)

Nine Months Ended

September 30,

(Dollars in millions) (Unaudited)

Reconciliation of Free Cash Flow to GAAP Net Cash Provided (Used) by Operating Activities:

Management

believes

that

free

cash

flow

useful

investors

because

meaningful

indicator

cash

generated

from

operating

activities available for the execution of its business strategy.

Free cash flow

Less: cash dividends paid to shareholders

Net cash provided (used) by operating activities

Less: capital expenditures

($ Mils.)

GAAP RECONCILIATION

NET

DEBT

September 30,

2012

27.5

461.4

488.9

(485.5)

3.4

This

reconciliation

provided

additional

relevant

information

about

The

Timken

Company's

financial

position.

Capital

defined

total

debt

plus

total

shareholders'

equity.

Management

believes

Net

Debt

important

measure

Timken's

financial

position,

due

the amount of cash and cash equivalents.

Reconciliation of Total Debt to Net Debt

(Dollars in millions) (Unaudited)

Net Debt

Short-term debt

Long-term debt

Total Debt

Less: Cash, cash equivalents and restricted cash

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

Total Debt (a)

273

321

277

280

211

303

359

469

450

514

Less: Cash

Net Debt

271

313

271

267

204

297

350

469

442

503

Equity

1,019

985

685

733

821

922

1,032

1,056

1,046

1,005

Total Debt to Capital

21.1%

24.5%

28.7%

27.6%

20.5%

24.7%

25.8%

30.8%

30.1%

33.8%

Net Debt to Capital

21.0%

24.1%

28.4%

26.7%

19.9%

24.4%

25.3%

30.8%

29.7%

33.4%

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Total Debt (a)

497

461

735

779

721

598

723

624

513

514

515

Less: Cash

101

133

756

877

468

Net Debt

464

379

706

728

656

497

693

490

(243)

(363)

Equity

782

609

1,090

1,270

1,497

1,476

1,961

1,663

1,596

1,942

2,043

Total Debt to Capital

38.9%

43.1%

40.3%

38.0%

32.5%

28.8%

26.9%

27.3%

24.3%

20.9%

20.1%

Net Debt to Capital

37.2%

38.4%

39.3%

36.5%

30.5%

25.2%

26.1%

22.8%

-18.0%

-23.0%

2.2%

GAAP RECONCILIATION

NET

DEBT

($ Mils.)

(a)

Total

Debt

the

sum

commercial

paper,

short-term

debt,

current

portion

long-term

debt

and

long-term

debt

Reconciliation of Net Debt to Total Debt and the Ratio of Net Debt to Capital

Management believes Net Debt is an important measure of Timken's financial position, due to the amount of

cash and cash equivalents.

GAAP RECONCILIATION

ROIC

($ Mils.)

Reconciliation of ROIC to GAAP Operating Income

Management believes ROIC is representative of the company’s performance and therefore useful to investors.

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

GAAP Operating Income

(1)

(9)

132

203

247

280

225

133

106

GAAP Other Income / (Expenses)

(8)

(2)

(6)

(5)

(16)

(10)

(7)

Earnings Before Interest and Taxes (EBIT)

(2)

(17)

135

198

242

287

209

123

Provision for income taxes

(6)

102

Adjusted tax rate

37.6%

36.9%

38.3%

35.7%

38.2%

36.8%

35.0%

Net Operating Profit After Taxes (NOPAT)

(3)

(10)

125

149

184

129

Invested Capital:

Total Debt

266

273

321

277

280

211

303

359

469

450

514

Shareholders' Equity

1,075

1,019

985

685

733

821

922

1,032

1,056

1,046

1,005

Total

1,341

1,292

1,306

962

1,012

1,032

1,225

1,392

1,526

1,496

1,519

Average Invested Capital

(4)

1,317

1,299

1,134

987

1,022

1,129

1,308

1,459

1,511

1,507

ROIC: NOPAT / Average Invested Capital

(4)

-0.8%

1.9%

0.4%

8.5%

12.2%

13.2%

14.1%

8.9%

5.2%

4.3%

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

GAAP Operating Income

(1)

(18)

237

327

219

295

462

(54)

436

729

GAAP Other Income / (Expenses)

(0)

(1)

Earnings Before Interest and Taxes (EBIT)

(2)

115

108

249

395

299

300

478

(54)

440

728

Provision for income taxes

129

171

(16)

148

251

Adjusted tax rate

39.8%

40.0%

32.1%

32.6%

30.6%

20.4%

35.7%

29.9%

33.5%

34.5%

Net Operating Profit After Taxes (NOPAT)

(3)

169

266

208

239

307

(38)

292

477

Invested Capital:

Total Debt

497

461

735

779

721

598

723

624

513

514

515

Shareholders' Equity

782

609

1,090

1,270

1,497

1,476

1,961

1,623

1,596

1,942

2,043

Total

1,279

1,070

1,824

2,049

2,218

2,074

2,684

2,246

2,108

2,456

2,558

Average Invested Capital

(4)

1,399

1,175

1,447

1,937

2,134

2,146

2,379

2,465

2,177

2,282

2,507

ROIC: NOPAT / Average Invested Capital

(4)

0.2%

5.9%

4.5%

8.7%

12.5%

9.7%

10.0%

12.5%

-1.7%

12.8%

19.0%

(1)

GAAP Operating Income exclude discontinued operations for Latrobe Steel (divested Dec. 8, 2006) for years 2004 through 2006 and

the Needle Roller Bearings business

for years 2007 through 2009 (divested Dec. 31, 2009).

(2)

EBIT is defined as operating income plus other income (expense) -

net.

(3)

NOPAT is defined as EBIT less an estimated provision for income

taxes. This tax provision excludes the tax effect of pre-tax special items on the company's effective tax rate,

as well as the the impact of discrete tax items recorded during the year.

(4)

The company uses NOPAT/Average Invested Capital as a type of ratio that indicates return on invested capital (ROIC). Average Invested Capital is the sum of Total Debt and Share-

holders' Equity taken at the beginning and ending of each year and then averaged. Total Debt is the sum of commercial paper, ST-debt, curr. portion of LT-debt & LT-debt.