10-K

                                                                       1
                        SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, D.C.  20549
                                     FORM 10-K

                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                     THE SECURITIES AND EXCHANGE ACT OF 1934

For the Fiscal Year Ended                     Commission File Number 1-1169
December 31, 2000
                               THE TIMKEN COMPANY
              ______________________________________________________
              (Exact name of registrant as specified in its charter)

             Ohio                                             34-0577130
________________________________________                ___________________
(State or other jurisdiction of                          (I.R.S. Employer
 incorporation or organization)                         Identification No.)

1835 Dueber Avenue, S.W., Canton, Ohio                       44706-2798
________________________________________                ___________________
(Address of principal executive offices)                      (Zip Code)

Registrants telephone number, including area code          (330)438-3000
                                                        ___________________

Securities registered pursuant to Section 12(b) of the Act:

                                                      Name of Each Exchange
      Title of Each Class                              on Which Registered
______________________________                      _______________________
Common Stock without par value                      New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:  None.

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months, and (2) has been subject to such
filing requirements for the past 90 days.    YES  X                  NO
                                                 ___                    ___

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X].

                                                                      2

The aggregate market value of the voting stock held by all shareholders
other than shareholders identified under item 12 of this Form 10-K as of
February 16, 2001, was $794,442,208 (representing 49,313,607 shares).

Indicate the number of shares outstanding of each of the issuer's classes
of Common Stock, as of February 16, 2001.

Common Stock without par value--59,990,140 shares (representing a market
value of $966,441,155).

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Annual Report to Shareholders for the year ended
December 31, 2000, are incorporated by reference into Parts I and II.

Portions of the proxy statement for the annual meeting of shareholders to
be held on April 17, 2001, are incorporated by reference into parts III
and IV.

Exhibit Index may be found on Pages 19 through 23.

                                                                      3

PART I
______
   Item 1.  Description of Business
   ________________________________

   The statements set forth in this document that are not historical in nature
   are forward-looking statements.  The company cautions readers that actual
   results may differ materially from those projected or implied in forward-
   looking statements made by or on behalf of the company due to a variety of
   important factors, such as:

    a)  changes in world economic conditions.  This includes, but is not
        limited to, the potential instability of governments and legal systems
        in countries in which the company conducts business and significant
        changes in currency valuations.

    b)  the effects of changes in customer demand on sales, product mix and
        prices.  This includes the effects of customer strikes, the impact of
        changes in industrial business cycles, whether conditions of fair
        trade continue in the U.S. market,in light of the ITC voting in second
        quarter 2000 to revoke the antidumping orders on imports of tapered
        roller bearings from Japan, Romania and Hungary.

    c)  competitive factors, including changes in market penetration, 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.

    d)  changes in operating costs.  This includes the effect of changes in
        the company's manufacturing processes; changes in costs associated
        with varying levels of operations; changes resulting from inventory
        management and cost reduction initiatives and different levels of
        customer demands; the effects of unplanned work stoppages; changes in
        the cost of labor and benefits; and the cost and availability of raw
        materials and energy.

    e)  the success of the company's operating plans, including its ability to
        achieve the benefits from its global restructuring as well as its
        ongoing continuous improvement and rationalization programs; its
        ability to integrate acquisitions into company operations; the ability
        of recently acquired companies to achieve satisfactory operating
        results; its ability to maintain appropriate relations with unions that
        represent company associates in certain locations in order to avoid
        disruptions of business and its ability to successfully implement its
        new organizational structure.

    f)  unanticipated litigation, claims or assessments.  This includes, but
        is not limited to, claims or problems related to product warranty and
        environmental issues.

    g)  changes in worldwide financial markets to the extent they (1) affect
        the company's ability or costs to raise capital, (2) have an impact on
        the overall performance of the company's pension fund investments and
        (3) cause changes in the economy which affect customer demand.
                                                                      4

   General
   _______

   As used herein the term "Timken" or the "company" refers to The Timken
   Company and its subsidiaries unless the context otherwise requires.  Timken,
   an outgrowth of a business originally founded in 1899, was incorporated
   under the laws of Ohio in 1904.

   Products
   ________

   Timken's products are divided into two industry segments.  The first
   includes anti-friction bearings; the second industry segment is steel.

   Anti-friction bearings constitute Timken's principal industry product.
   Basically, the tapered roller bearing made by Timken is its principal
   product in the anti-friction industry segment.  It consists of four
   components:  (1) the cone or inner race, (2) the cup or outer race, (3)
   the tapered rollers which roll between the cup and cone, and (4) the cage
   which serves as a retainer and maintains proper spacing between the rollers.
   These four components are manufactured or purchased and are sold in a wide
   variety of configurations and sizes.  Sensing devices are added to the basic
   tapered roller bearing and sold for sport utility vehicle and light truck
   applications.

   Matching bearings to service requirements of customers' applications re-
   quires engineering, and oftentimes sophisticated analytical techniques.
   The design of every tapered roller bearing made by Timken permits
   distribution of unit pressures over the full length of the roller.  This
   fact, coupled with its tapered design, high precision tolerance and pro-
   prietary internal geometry and premium quality material, provides a bearing
   with high load carrying capacity, excellent friction-reducing qualities and
   long life.

   Timken also produces super precision ball and roller bearings for use in
   aerospace, medical/dental, computer disk drives and other industries having
   high precision applications.  These bearings are mostly produced at Timken
   Aerospace & Super Precision Bearings, a subsidiary of the company.  They
   utilize ball and straight rolling elements and are in the super precision
   end of the general ball and straight roller bearing product range in the
   bearing industry.  A majority of Timken Aerospace & Super Precision
   Bearings' products are special custom-designed bearings and spindle
   assemblies.  They often involve specialized materials and coatings for use
   in applications that subject the bearings to extreme operating conditions
   of speed and temperature.

   Other bearing products manufactured by Timken include cylindrical,
   spherical, straight and ball bearings for industrial customers.  These
   bearings feature non-tapered rolling elements.  In addition, Timken produces
   custom-designed products called SpexxTM performance Bearings.  The product
   line includes both tapered and cylindrical roller bearings and provides
   cost-effective solutions for selective applications.  The company produces
   the Timken IsoClassTM brand of tapered roller bearings, which gives Timken
   access to 95% of the demand for ISO tapered roller bearings, which are about
   one half of today's total tapered roller bearing sales.
                                                                      5

   Products (cont.)
   ________________

   In addition to bearing products, Timken provides bearing reconditioning
   services for industrial and railroad customers, both globally and
   domestically.

   Steel products include steels of low and intermediate alloy, vacuum-
   processed alloys, tool steel and some carbon grades.  These are available
   in a wide range of solid and tubular sections with a variety of finishes.

   The company also produces custom-made steel products including precision
   steel components for automotive and industrial customers.  The development
   of the precision steel components business has provided the company with
   the opportunity to further expand its market for tubing and capture more
   higher-value steel sales.  This also enables the company's traditional
   tubing customers in the automotive and bearing industries to take advantage
   of higher-performing components that cost less than those they now use.
   This activity is a growing portion of the Steel business.

   Sales and Distribution
   ______________________

   Timken's products in the bearing industry segment are sold principally by
   its own sales organization.  A major portion of the shipments are made
   directly from Timken's warehouses located in a number of cities in the
   United States, Canada, England, France, Mexico, Singapore, Argentina and
   Australia.  A growing number of shipments are made directly from plant
   locations.  The warehouse inventories are augmented by authorized
   distributor and jobber inventories throughout the world that provide local
   availability when service is required.

   The company operates an Export Service Center in Atlanta, Georgia, which
   specializes in the export of tapered roller bearings for the replacement
   markets in the Caribbean, Central and South America and other regions.
   Timken's tapered roller bearings and other bearing types are used in general
   industry and in a wide variety of products including passenger cars, trucks,
   railroad cars and locomotives, machine tools, rolling mills and farm and
   construction equipment.  Timken Aerospace & Super Precision Bearings' pro-
   ducts, which are at the super precision end of the general ball and straight
   roller bearing segment, are used in aircraft, missile guidance systems,
   computer peripherals, and medical/dental instruments.

   Consolidation of the European distribution operation was undertaken in 2000
   to reduce logistics costs through greater distribution efficiencies.
   However, operational issues resulted in the suspension of the project;
   currently an intense review is in progress to re-evaluate the implemen-
   tation.  Relocation of the Haan, Germany, warehouse to France occurred
   in 2000.  Additional consolidation of warehousing and shipping facilities
   has been delayed.

   A significant portion of Timken's steel production is consumed in its
   bearing operations.  In addition, sales are made to other anti-friction
   bearing companies and to the aircraft, automotive and truck,
                                                                      6

   Sales and Distribution (cont.)
   ______________________________

   construction, forging, oil and gas drilling and tooling industries.
   Sales are also made to steel service centers.  Timken's steel products
   are sold principally by its own sales organization.  Most orders are
   custom made to satisfy specific customer applications and are shipped
   directly to customers from Timken's steel manufacturing plants.

   Timken has a number of customers in the automotive industry, including
   both manufacturers and suppliers.  However, Timken feels that because of
   the size of that industry, the diverse bearing applications, and the
   fact that its business is spread among a number of customers, both
   foreign and domestic, in original equipment manufacturing and
   aftermarket distribution, its relationship with the automotive industry
   is well diversified.

   Timken has entered into individually negotiated contracts with some of
   its customers in both the bearing and steel segments.  These contracts
   may extend for one or more years and, if a price is fixed for any period
   extending beyond current shipments, customarily include a commitment by
   the customer to purchase a designated percentage of its requirements
   from Timken.  Contracts extending beyond one year that are not subject
   to price adjustment provisions do not represent a material portion of
   Timken's sales.  Timken does not believe that there is any significant
   loss of earnings risk associated with any given contract.

   Industry Segments
   _________________

   The company has two reportable segments:  Bearings and Steel.  Segment
   information in Note 12 of the Notes to Consolidated Financial
   Statements and Information by Industry and Geographic Area on pages 36
   and 37 of the Annual Report to Shareholders for the year ended
   December 31, 2000, are incorporated herein by reference.  Export sales
   from the U.S. and Canada are not separately stated since such sales
   amount to less than 10% of revenue.  The company's Bearings business has
   historically participated in the worldwide bearing markets while
   Steel has concentrated on U.S. customers.

   Timken's non-U.S. operations are subject to normal international
   business risks not generally applicable to domestic business.  These
   risks include currency fluctuation, changes in tariff restrictions, and
   restrictive regulations by foreign governments, including price and
   exchange controls.

   Both the anti-friction bearing business and the steel business are
   extremely competitive.  The principal competitive factors involved, both
   in the United States and in foreign markets, include price, product
   quality, service, delivery, order lead times and technological
   innovation.
                                                                    7

   Competition
   ___________

   Timken manufactures an anti-friction bearing known as the tapered roller
   bearing.  The tapered principle of bearings made by Timken permits ready
   absorption of both radial and axial loads in combination.  For this
   reason, they are particularly well-adapted to reducing friction where
   shafts, gears or wheels are used.  Timken also produces super precision
   ball and straight roller bearings at its Timken Aerospace & Super
   Precision Bearings subsidiary.  With recent acquisitions, the company has
   selectively expanded its product line to include other bearing types.
   However, since the invention of the tapered roller bearing by its founder,
   Timken has maintained primary focus in its product and process technology
   on the tapered roller bearing segment.  This has been important to its
   ability to remain one of the leaders in the world's bearing industry.
   This contrasts with the majority of Timken's major competitors who focus
   more heavily on other bearing types such as ball, straight roller,
   spherical roller and needle for the general industrial and automotive
   markets and are, therefore, less specialized in the tapered roller bearing
   segment.  Timken competes with domestic manufacturers and many foreign
   manufacturers of anti-friction bearings.

   The anti-friction bearing business is intensely competitive in every
   country in which Timken sells products.  With the collapse of the former
   Soviet Union and the modernization of existing capacity in many
   countries, there remain substantial downward pricing pressures in the
   United States and other countries even during periods of significant
   demand in the United States and other countries.  Imports of tapered roller
   bearings into the United States in 2000 were $250 million or approximately
   16 percent of the domestic tapered roller bearing market.  In addition,
   Timken estimates the tapered roller bearings contained as components of
   foreign automobiles and heavy equipment produced outside the United States
   and imported into this country to be approximately $200 million in 2000.

   In the second quarter of 2000, the U.S. International Trade Commission
   (ITC) voted to revoke the industry's antidumping orders on imports of
   tapered roller bearings from Japan, Romania and Hungary.  The ITC deter-
   mined that revocation of the antidumping duty orders on tapered roller
   bearings from those countries was not likely to lead to continuation or
   recurrence of material injury to the domestic industry within a reasonably
   foreseeable time.  The ITC upheld the antidumping duty order against
   China.  The company has filed an appeal of the ITC's decision regarding
   Japan.  If, following the revocation of the orders and contrary to the
   ITC's finding, injurious dumping from these countries continues or
   recurs, the improved conditions of trade of tapered roller bearings in
   the U.S., which resulted from the orders, could deteriorate.  If injurious
   dumping does occur, such dumping could have a material adverse effect on
   the company's business, financial condition or results of operations.  The
   company would explore alternatives to remedy this material adverse effect
   as the law provides for expedited investigations in cases where an order
   was revoked as a result of this review.

   The ITC separately extended the antidumping duty orders on ball bearings
   from Germany, France, Japan and several other countries.  These extended
                                                                      8

   Competition (cont.)
   ___________________

   orders should continue to provide the company's Aerospace business with
   fair competition for these products in the U.S.

   Timken manufactures carbon and alloy seamless tubing, carbon and alloy
   steel solid bars, tool steels and other custom-made specialty steel
   products.  Specialty steels are characterized by special chemistry,
   tightly controlled melting and precise processing.

   Maintaining high standards of product quality and reliability while
   keeping production costs competitive is essential to Timken's ability to
   compete with domestic and foreign manufacturers in both the anti-friction
   bearing and steel businesses.

   Backlog
   _______

   The backlog of orders of Timken's domestic and overseas operations is
   estimated to have been $1.13 billion at December 31, 2000, and
   $1.04 billion at December 31, 1999.  Actual shipments are dependent upon
   ever-changing production schedules of the customer.  Accordingly, Timken
   does not believe that its backlog data and comparisons thereof as of
   different dates are reliable indicators of future sales or shipments.

   Raw Materials
   _____________

   The principal raw materials used by Timken in its North American plants
   to manufacture bearings are its own steel tubing and bars and purchased
   strip steel. Outside North America the company purchases raw materials
   from local sources with whom it has worked closely to assure steel
   quality according to its demanding specifications.  In addition, Timken
   Desford Steel, in Leicester, England is a major source of raw materials
   for many Timken plants in Europe.

   The principal raw materials used by Timken in steel manufacturing are
   scrap metal, nickel and other alloys.  Timken believes that the
   availability of raw materials and alloys are adequate for its needs,
   and, in general, it is not dependent on any single source of supply.

   In the second half of 2000, the company's steel plants in the U.S. were
   impacted by higher energy costs, which was primarily attributed to higher
   natural gas prices.

   Research
   ________

   Timken's major research center, located in Stark County, Ohio near its
   worldwide headquarters, is engaged in research on bearings, steels,
   manufacturing methods and related matters.  Research facilities are also
   located at the Timken Aerospace & Super Precision Bearings New Hampshire
   plants, the Duston, England plant, the Latrobe, Pennsylvania plant and
                                                                      9

   Research (cont.)
   ________________

   the facility in Bangelore, India.  Expenditures for research, development
   and testing amounted to approximately $52,000,000 in 2000, $50,000,000 in
   1999, and $48,000,000 in 1998.  The company's research program is committed
   to the development of new and improved bearing and steel products, as well
   as more efficient manufacturing processes and techniques and the expansion
   of application of existing products.

   Environmental Matters
   _____________________

   The company continues to protect the environment and comply with
   environmental protection laws.  Additionally, it has invested in pollution
   control equipment and updated plant operational practices.  In 1999, the
   company committed to becoming certified under the ISO 14001 environmental
   management system within the next several years.  The company believes it
   has established adequate reserves to cover its environmental expenses and
   has a well-established environmental compliance audit program, which in-
   cludes a proactive approach to bringing its domestic and international
   units to higher standards of environmental performance.  This program
   measures performance against local laws as well as to standards that have
   been established for all units worldwide.

   It is difficult to assess the possible effect of compliance with future
   requirements that differ from existing ones.  As previously reported,
   the company is unsure of the future financial impact to the company that
   could result from the United States Environmental Protection Agency's
   (EPA's) final rules to tighten the National Ambient Air Quality Standards
   for fine particulate and ozone.

   The company and certain of its U.S. subsidiaries have been designated as
   potentially responsible parties (PRP's) by the United States EPA for
   site investigation and remediation at certain sites under the
   Comprehensive Environmental Response, Compensation and Liability Act
   (Superfund).  The claims for remediation have been asserted against
   numerous other entities, which are believed to be financially solvent
   and are expected to fulfill their proportionate share of the obligation.
   Management believes any ultimate liability with respect to all pending
   actions will not materially affect the company's operations, cash flows
   or consolidated financial position.

   Patents, Trademarks and Licenses
   ________________________________

   Timken owns a number of United States and foreign patents, trademarks
   and licenses relating to certain of its products.  While Timken regards
   these as items of importance, it does not deem its business as a whole,
   or either industry segment, to be materially dependent upon any one
   item or group of items.
                                                                      10

   Employment
   __________

   At December 31, 2000, Timken had 20,474 associates. Thirty-five percent
   of Timken's U.S. associates are covered under collective bargaining
   agreements.  Three percent Timken's U.S. associates are covered under
   collective bargaining agreements that expire within one year.

   Executive Officers of the Registrant
   ____________________________________

   The officers are elected by the Board of Directors normally for a term
   of one year and until the election of their successors.  All officers,
   except for one, have been employed by Timken or by a subsidiary of the
   company during the past five-year period.  The Executive Officers of the
   company as of February 16, 2001, are as follows:

                                       Current Position and Previous
   Name                Age             Positions During Last Five Years
   ___________________ ___     ____________________________________________

   W. R. Timken, Jr.   62      1995  Chairman - Board of Directors;
                               1997  Chairman, President and Chief
                                        Executive Officer; Director;
                               1999  Chairman and Chief Executive Officer;
                                        Director; Officer since 1968.

   J. W. Griffith      47      1995  Vice President - Manufacturing -
                                        Bearings - North America;
                               1996  Vice President - Bearings - North
                                        American Automotive, Rail, Asia
                                        Pacific and Latin America;
                               1998  Group Vice President - Bearings -
                                        North American Automotive, Asia
                                        Pacific and Latin America;
                               1999  President and Chief Operating Officer;
                                        Officer since 1996.

   B. J. Bowling       59      1995  President - Latrobe Steel Company;
                               1996  Executive Vice President and President
                                        - Steel;
                               1997  Executive Vice President, Chief
                                        Operating Officer and President
                                        - Steel; Officer since 1996.

   C. J. Andersson     39      1995  Manager of Global Sourcing and Asset
                                        Management, Power Generation Manu-
                                        facturing (General Electric Company);
                               1997  General Manager - Mexico Sourcing and
                                        Business Development, GE International
                                        Mexico (General Electric Company);
                               1999  General Manager - Aviation Information
                                        Services, GE Aircraft Engines (General
                                        Electric Company);
                               2000  Senior Vice President - e-Business; The
                                        Timken Company, Officer since 2000.
                                                                     11

   Executive Officers of the Registrant (cont.)
   ____________________________________________
                                       Current Position and Previous
   Name                Age             Positions During Last Five Years
   ___________________ ___     ____________________________________________

   M. C. Arnold        44      1995  General Manager - Asheboro Plant;
                               1996  Director - Manufacturing and Technology -
                                        Europe, Africa and West Asia;
                               1997  Director - Bearing Business Process
                                        Advancement;
                               1998  Vice President - Bearings - Business
                                        Process Advancement;
                               2000  President - Industrial; Officer since
                                        2000.

   S. B. Bailey        41      1995  Director - Finance;
                               1999  Director - Finance and Treasurer;
                               2000  Treasurer; Officer since 1999.

   W. R. Burkhart      35      1995  Attorney
                               1996  Corporate Attorney
                               1997  Legal Counsel - Europe, Africa and West
                                        Asia;
                               1998  Director of Affiliations and Acquisitions
                               2000  Senior Vice President and General Counsel
                                        Officer since 2000.

   V. K. Dasari        34      1995  Project Manager - Global Industrial
                                        Segment Strategy;
                               1996  Director - Manufacturing and Technology -
                                        Tata Timken Limited;
                               1998  Deputy Managing Director - Tata Timken
                                        Limited;
                               1999  Managing Director - Tata Timken Limited;
                               2000  President - Rail; Officer since 2000.

   D. J. Demerling     50      1995  General Manager - Bucyrus Operations;
                               1996  Stanford Sloan Fellow;
                               1997  President - MPB Corporation;
                               2000  President - Aerospace and Super Precision;
                                        Officer since 2000.

   J. T. Elsasser      48      1995  Managing Director - Bearings - Europe,
                                        Africa and West Asia;
                               1996  Vice President - Bearings - Europe,
                                        Africa and West Asia;
                               1998  Group Vice President - Bearings -
                                        Rail, Europe, Africa and West Asia;
                               1999  Senior Vice President - Corporate
                                        Development; Officer since 1996.
                                                                     12
   Executive Officers of the Registrant (cont.)
   ____________________________________________
                                       Current Position and Previous
   Name                Age             Positions During Last Five Years
   ___________________ ___     ____________________________________________

   K. P. Kimmerling    43      1995  President - Canadian Timken Ltd.;
                               1996  Vice President - Manufacturing -
                                        Steel;
                               1998  Group Vice President - Alloy Steel;
                               1999  President - Automotive; Officer since
                                        1998.

   G. E. Little        57      1995  Vice President - Finance; Treasurer;
                               1998  Senior Vice President - Finance;
                                        Treasurer;
                               1999  Senior Vice President - Finance; Officer
                                        since 1990.

   S. J. Miraglia, Jr. 50      1995  Director - Manufacturing - Europe,
                                        Africa and West Asia;
                               1996  Vice President - Bearings - North
                                        American Industrial and Super
                                        Precision;
                               1998  Group Vice President - Bearings -
                                        North American Industrial and Super
                                        Precision;
                               1999  Senior Vice President - Technology;
                                        Officer since 1996.

   S. A. Perry         55      1995  Vice President - Human Resources and
                                        Logistics;
                               1998  Senior Vice President - Human
                                        Resources, Purchasing and
                                        Communications; Officer since 1993.

   H. J. Sack          47      1995  Vice President - Manufacturing -
                                        Steel;
                               1996  President - Latrobe Steel Company;
                               1998  Group Vice President - Specialty Steel
                                        and President - Latrobe Steel
                                        Company;
                               1999  Group Vice President - Specialty Steel
                                        and President - Timken Latrobe Steel;
                               2000  President - Specialty Steel; Officer
                                        since 1998.

   M. J. Samolczyk     45      1995  General Manager - Sales and Marketing -
                                        Bearings - North America - Mobile
                                        Industrial;
                               1995  General Manager - Sales and Marketing -
                                        Bearings - North America - Industrial;
                               1996  Vice President - Sales and Marketing -
                                        Industrial - Original Equipment;
                               1998  Vice President and General Manager -
                                        Precision Steel Components;
                               2000  President - Precision Steel Components;
                                        Officer since 2000.
                                                                     13

   Executive Officers of the Registrant (cont.)
   ____________________________________________
                                        Current Position and Previous
   Name                Age             Positions During Last Five Years
   ___________________ ___     ____________________________________________

   S. A. Scherff       47      1995  Director - Legal Services and Assistant
                                        Secretary;
                               1999  Corporate Secretary;
                               2000  Corporate Secretary and Assistant General
                                        Counsel; Officer since 1999.

   W. J. Timken        58      1995  Vice President; Director; Officer
                                        since 1992.

   W. J. Timken, Jr.   33      1995  Principal Strategic Management Analyst;
                               1995  Market Manager - Distribution;
                               1996  Market Manager - Original Equipment
                                        Distribution - Europe, Africa and West
                                        Asia
                               1998  Vice President - Latin America
                               2000  Corporate Vice President - Office of the
                                        Chairman; Officer since 2000.

                                                                     14
   Item 2.  Properties
   ___________________

   Timken has bearing and steel manufacturing facilities at multiple
   locations in the United States.  Timken also has bearing and steel manu-
   facturing facilities in a number of countries outside the United States.
   The aggregate floor area of these facilities worldwide is approximately
   14,377,000 square feet, all of which, except for approximately 468,000
   square feet, is owned in fee.  The facilities not owned in fee are leased.
   The buildings occupied by Timken are principally of brick, steel, reinforced
   concrete and concrete block construction.  All buildings are in satisfactory
   operating condition in which to conduct business.

   Timken's bearing manufacturing facilities in the United States are
   located in Ashland, Bucyrus, Canton, Columbus and New Philadelphia,
   Ohio; Altavista, Virginia; Randleman and Iron Station, North
   Carolina; Carlyle, Illinois; South Bend, Indiana; Gaffney, South
   Carolina; Keene and Lebanon, New Hampshire; Winchester, Kentucky;
   Knoxville, Tennessee; Lenexa, Kansas; North Little Rock, Arkansas;
   Ogden, Utah and Orange, California.  These facilities, including the
   research facility in Canton, Ohio, and warehouses at plant locations,
   have an aggregate floor area of approximately 4,882,000 square feet.

   Timken's bearing manufacturing plants outside the United States are
   located in Benoni, South Africa; Brescia, Italy; Colmar, France; Duston,
   Northampton and Wolverhampton, England; Medemblik, The Netherlands;
   Ploesti, Romania; Sao Paulo, Brazil; Singapore; Jamshedpur, India;
   Sosnowiec, Poland; St. Thomas, Canada and Yantai, China.  The
   facilities, including warehouses at plant locations, have an aggregate
   floor area of approximately 3,765,000 square feet.

   Timken's steel manufacturing facilities in the United States are located
   in Canton, Eaton, Wauseon and Wooster, Ohio; Columbus, North Carolina;
   Franklin and Latrobe, Pennsylvania.  These facilities have an aggregate
   floor area of approximately 5,017,000 square feet.

   Timken's steel manufacturing facility outside the United States is
   located in Leicester, England.  This facility has an aggregate floor
   area of approximately 590,000 square feet.  Timken also has a tool
   steel finishing and distribution facility in Sheffield, England.  This
   facility has an aggregate floor area of approximately 124,000 square feet.
   In the fourth quarter of 2000, the company agreed to sell the flat-ground
   tool steel business of Timken Latrobe Steel - Europe in Sheffield, England
   to a group of private investors.  This sale was completed in late February,
   2001.  Of the total aggregate floor area of 124,000 square feet, approx-
   imately 45,000 square feet was not included in the sale and is owned by the
   company.

   In addition to the manufacturing and distribution facilities discussed
   above, Timken owns warehouses and steel distribution facilities in the
   United States, Canada, England, France, Singapore, Germany, Mexico,
   Argentina and Australia, and leases several relatively small warehouse
   facilities in cities throughout the world.  In 2000, the Haan, Germany
   warehouse was relocated to France.

   During the first half of 2000, plant utilization in the Bearings business'
   plants continued at relatively stable levels.  By midyear, North American
   automotive demand started to decline and industrial business stagnated.
                                                                      15
   Properties (cont.)
   __________________

   Plant utilization declined in response to the changing economic conditions.
   Utilization was curtailed even further as the Bearings business' took
   actions to control inventory.  Steel plant utilization decreased in the
   second half of 2000 compared to the first half.  This was primarily a
   result of the reduction in orders from automotive, bearing and service
   center customers.

   In the first quarter of 2000, the company announced plans to refocus
   bearing manufacturing in Duston, England, to specialize in products for the
   automotive industry and shift manufacturing of other products to facilities
   in Eastern Europe and the United States.  A consolidation of European
   distribution operations was also launched.  However, operational issues
   associated with this consolidation of distribution operations have resulted
   in the suspension of the project.  Currently, an intense review is in
   progress to re-evaluate the implementation.

   In the second quarter of 2000, operations of three rail bearing recondition-
   ing facilities were consolidated into one new facility in Knoxville,
   Tennessee.  The closing of another rail bearing reconditioning facility in
   Little Rock, Arkansas, was announced in December.

   In January 2001, the company announced a buyout of its Chinese joint-venture
   partner in Yantai Timken Company Limited.  This transaction was completed at
   the end of February 2001.  Also in January, the company announced that it
   had acquired the assets of Score International, Inc., a manufacturer of
   dental handpiece repair tools located in Sanford, Florida.  This leased
   facility has an aggregate floor area of approximately 4,800 square feet.

   Item 3.  Legal Proceedings
   __________________________

   Not Applicable

   Item 4.  Submission of Matters to a Vote of Security Holders
   ____________________________________________________________

   No matters were submitted to a vote of security holders during the
   fourth quarter ended December 31, 2000.
                                                                      16
PART II
_______
   Item 5.  Market for Registrant's Common Equity and Related Stockholder
   ______________________________________________________________________
            Matters
            _______

   The company's common stock is traded on the New York Stock Exchange
   (TKR).  The estimated number of record holders of the company's common
   stock at December 31, 2000, was 8,366.  The estimated number of
   shareholders at December 31, 1999, was 42,661.

   High and low stock prices and dividends for the last two years are
   presented in the Quarterly Financial Data schedule on Page 1 of the
   Annual Report to Shareholders for the year ended December 31, 2000, and
   are incorporated herein by reference.

   Item 6.  Selected Financial Data
   ________________________________

   The Summary of Operations and Other Comparative Data on Pages 40-41
   of the Annual Report to Shareholders for the year ended December 31,
   2000, is incorporated herein by reference.

   Item 7.  Management's Discussion and Analysis of Financial Condition and
   ________________________________________________________________________
            Results of Operations
            _____________________

   Management's Discussion and Analysis of Financial Condition and Results
   of Operations on Pages 20-27 of the Annual Report to Shareholders for
   the year ended December 31, 2000, is incorporated herein by reference.

   Industrial market weakness reflecting less capital investment has negatively
   impacted the North American manufacturing sector over the past few months.
   Lower than expected demand from Industrial customers in 2001 has caused
   lower operational levels.  Earnings before income taxes (EBIT) is lower than
   expected for the Industrial business due to lower volumes.  North American
   rail sales were projected to remain weak in 2001.  However, sales in 2001
   have been even lower than projected and have further impacted Bearings'
   EBIT.  The company continues to evaluate opportunities to rationalize
   bearing operations around the world to reduce fixed costs and improve
   operating efficiencies.

   On December 31, 1998, certain countries that are members of the European
   Union irrevocably fixed the conversion rates between their national
   currencies and a common currency, the "Euro."  The participating countries'
   former national currencies will continue to exist as denominations of the
   Euro until January 1, 2002.  The company has been evaluating the business
   implications of conversion to the Euro, including the need to adapt internal
   systems to accommodate the various Euro-denominated transactions, the com-
   petitive implications of cross-border pricing and other strategic issues.
   The company established a Euro project team to manage the changes required
   to conduct business operations in compliance with Euro-related regulations.
   The company does not expect the conversion to the Euro to have a material
   effect on its financial condition or results of operations.
                                                                      17

    Item 7.  Management's Discussion and Analysis of Financial Condition and
   ________________________________________________________________________
            Results of Operations (cont.)
            _____________________________

   In February 2001, the company announced that it has completed the previously
   announced sale of the tool and die steel operations of Timken Latrobe
   Steel - Europe.

   The company announced in March, 2001 the opening of a bearing reconditioning
   facility in Mexico City as part of its Timken de Mexico operations  The
   bearing service facility will remanufacture railroad bearigs used in
   locomotives and freight cars.

   Item 7A.  Quantitative and Qualitative Disclosures About Market Risk
   ____________________________________________________________________

   Information appearing under the caption "Management's Discussion and
   Analysis of Other Information" appearing on page 27 of the Annual
   Report to Shareholders for the year ended December 31, 2000, is
   incorporated herein by reference.

   Item 8.  Financial Statements and Supplementary Data
   ____________________________________________________

   The Quarterly Financial Data schedule included on Page 1, the
   Consolidated Financial Statements of the registrant and its subsidiaries
   on Pages 20-28, the Notes to Consolidated Financial Statements on Pages
   29-38, and the Report of Independent Auditors on Page 39 of the Annual
   Report to Shareholders for the year ended December 31, 2000, are
   incorporated herein by reference.

   Item 9.  Changes in and Disagreements with Accountants on Accounting
   ____________________________________________________________________
            and Financial Disclosure
            ________________________

   Not applicable.

                                                                     18
PART III
________

   Item 10.  Directors and Executive Officers of the Registrant
   ____________________________________________________________

   Required information is set forth under the caption "Election of
   Directors" on Pages 4-7 of the proxy statement issued in connection with
   the annual meeting of shareholders to be held April 17, 2001, and is
   incorporated herein by reference.  Information regarding the executive
   officers of the registrant is included in Part I hereof.

   Item 11.  Executive Compensation
   ________________________________

   Required information is set forth under the caption "Executive
   Compensation" on Pages 10-21 of the proxy statement issued in connection
   with the annual meeting of shareholders to be held April 17, 2001, and
   is incorporated herein by reference.

   Item 12.  Security Ownership of Certain Beneficial Owners and Management
   ________________________________________________________________________

   Required information regarding Security Ownership of Certain Beneficial
   Owners and Management, including institutional investors owning more
   than 5% of the company's Common Stock, is set forth under the caption
   "Beneficial Ownership of Common Stock" on Pages 8-9 of the proxy
   statement issued in connection with the annual meeting of shareholders
   to be held April 17, 2001, and is incorporated herein by reference.

   Item 13.  Certain Relationships and Related Transactions
   ________________________________________________________

   Required information is set forth under the caption "Election of
   Directors" on Pages 4-7 of the proxy statement issued in connection with
   the annual meeting of shareholders to be held April 17, 2001, and is
   incorporated herein by reference.

                                                                     19
PART IV
_______

   Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
   ___________________________________________________________________________

   (a)(1) and (2) - The response to this portion of Item 14 is submitted
                    as a separate section of this report.

      (3)  Listing of Exhibits

               Exhibit
               _______

          (3)(i)    Amended Articles of Incorporation of The Timken Company
                    (Effective April 16, 1996) were filed with Form S-8
                    dated April 16, 1996 and are incorporated herein by
                    reference.

          (3)(ii)   Amended Regulations of The Timken Company effective
                    April 21, 1987, were filed with Form 10-K for the
                    period ended December 31, 1992, and are incorporated
                    herein by reference.

          (4)       Credit Agreement dated as of July 10, 1998 among The
                    Timken Company, as Borrower, Various Financial
                    Institutions, as Banks, and Keybank National
                    Association, as Agent was filed with Form 10-Q for the
                    period ended June 30, 1998, and is incorporated herein by
                    reference.

          (4.1)     Indenture dated as of April 24, 1998, between The Timken
                    Company and The Bank of New York, which was filed with
                    Timken's Form S-3 registration statement which became
                    effective April 24, 1998, and is incorporated herein by
                    reference.

          (4.2)     Indenture dated as of July 1, 1990, between Timken and
                    Ameritrust Company of New York, which was filed with
                    Timken's Form S-3 registration statement dated July 12,
                    1990, and is incorporated herein by reference.

          (4.3)     First Supplemental Indenture, dated as of July 24,
                    1996, by and between The Timken Company and Mellon
                    Bank, N.A. was filed with Form 10-Q for the period
                    ended September 30, 1996, and is incorporated herein by
                    reference.

          (4.4)     The company is also a party to agreements with respect
                    to other long-term debt in total amount less than 10%
                    of the registrant's consolidated total assets.  The
                    registrant agrees to furnish a copy of such agreements
                    upon request.


                                                                      20
     Listing of Exhibits (cont.)
     ___________________________

                    Management Contracts and Compensation Plans
                    ___________________________________________

          (10)      The Management Performance Plan of The Timken Company
                    for Officers and Certain Management Personnel.

          (10.1)    The form of Deferred Compensation Agreement entered
                    into with James W. Griffith, W. R. Timken, Jr., R. L.
                    Leibensperger and B. J. Bowling was filed with Form
                    10-Q for the period ended September 30, 1995, and is
                    incorporated herein by reference.

          (10.2)    The Timken Company 1996 Deferred Compensation Plan for
                    officers and other key employees, amended and restated as
                    of April 20, 1999 was filed with Form 10-Q for the period
                    ended March 31, 1999, and is incorporated herein by
                    reference.

          (10.3)    The Timken Company Long-Term Incentive Plan As Amended And
                    Restated As Of December 16, 1999, and approved by share-
                    holders April 18, 2000 was filed as Appendix A to Proxy
                    Statement dated February 23, 2000, and is incorporated
                    herein by reference.

          (10.4)    The 1985 Incentive Plan of The Timken Company for
                    Officers and other key employees as amended through
                    December 17, 1997 was filed with Form 10-K for the
                    period ended December 31, 1997, and is incorporated
                    herein by reference.

          (10.5)    The form of Severance Agreement entered into with all
                    Executive Officers of the company was filed with
                    Form 10-K for the period ended December 31, 1996, and
                    is incorporated herein by reference.  Each differs only
                    as to name and date executed.

          (10.6)    The form of Death Benefit Agreement entered into with
                    all Executive Officers of the company was filed with
                    Form 10-K for the period ended December 31, 1993, and
                    is incorporated herein by reference.  Each differs only
                    as to name and date executed.

          (10.7)    The form of Indemnification Agreements entered into
                    with all Directors who are not Executive Officers of
                    the company was filed with Form 10-K for the period
                    ended December 31, 1990, and is incorporated herein by
                    reference.  Each differs only as to name and date
                    executed.

          (10.8)    The form of Indemnification Agreements entered into
                    with all Executive Officers of the company who are not
                    Directors of the company was filed with Form 10-K for
                    the period ended December 31, 1990, and is incorporated
                    herein by reference.  Each differs only as to name and
                    date executed.


                                                                       21
     Listing of Exhibits (cont.)
     ___________________________

          (10.9)    The form of Indemnification Agreements entered into
                    with all Executive Officers of the company who are also
                    Directors of the company was filed with Form 10-K for
                    the period ended December 31, 1990, and is incorporated
                    herein by reference.  Each differs only as to name and
                    date executed.

          (10.10)   The form of Employee Excess Benefits Agreement entered
                    into with all active Executive Officers, certain
                    retired Executive Officers, and certain other key
                    employees of the company was filed with Form 10-K for
                    the period ended December 31, 1991, and is incorporated
                    herein by reference.  Each differs only as to name and
                    date executed.

          (10.11)   The Amended and Restated Supplemental Pension Plan of
                    The Timken Company as adopted March 16, 1998 was filed
                    with Form 10-K for the period ended December 31, 1997,
                    and is incorporated herein by reference.

          (10.12)   Amendment to the Amended and Restated Supplemental Pension
                    Plan of the Timken Company executed on December 29, 1998
                    was filed with Form 10-K for the period ended December 31,
                    1998, and is incorporated herein by reference.

          (10.13)   The form of The Timken Company Nonqualified Stock Option
                    Agreement for nontransferable options as adopted on April
                    18, 2000 was filed with Form 10-Q for the period ended
                    March 31, 2000, and is incorporated herein by reference.

          (10.14)   The form of The Timken Company Nonqualified Stock
                    Option Agreement for transferable options as adopted on
                    April 18, 2000 was filed with Form 10-Q for the period
                    ended March 31, 2000, and is incorporated herein by
                    reference.

          (10.15)   The form of The Timken Company Nonqualified Stock Option
                    Agreement for special award options as adopted on April 18,
                    2000 was filed with Form 10-Q for the period ended March
                    31, 2000, and is incorporated herein by reference.

          (10.16)   The Timken Company Deferral of Stock Option Gains Plan
                    effective as of April 21, 1998 was filed with Form 10-Q
                    for the period ended March 31, 1998, and is incorporated
                    herein by reference.

          (10.17)   The Consulting Agreement entered into with Joseph F.
                    Toot, Jr., effective January 1, 2001.


                                                                       22
     Listing of Exhibits (cont.)
     ___________________________

          (10.18)   The form of The Timken Company Performance Share
                    Agreement entered into with W. R. Timken, Jr.,
                    R. L. Leibensperger and B. J. Bowling was filed with
                    Form 10-K for the period ended December 31, 1997, and is
                    incorporated herein by reference.

          (10.19)   The Timken Company Senior Executive Management Performance
                    Plan effective January 1, 1999, and approved by
                    shareholders April 20, 1999 was filed as Appendix A to
                    Proxy Statement dated February 24, 1999, and is
                    incorporated herein by reference.

          (10.20)   The Timken Company Nonqualified Stock Option Agreement
                    entered into with James W. Griffith and adopted on
                    December 16, 1999 was filed with Form 10-K for the period
                    ended December 31, 1999, and is incorporated herein by
                    reference.

          (10.21)   The Timken Company Promissory Note entered into with
                    James W. Griffith and dated December 17, 1999 was filed
                    with Form 10-K for the period ended December 31, 1999, and
                    is incorporated herein by reference.

          (10.22)   The Timken Company Director Deferred Compensation Plan
                    effective as of February 4, 2000 was filed with Form 10-Q
                    for the period ended March 31, 2000, and is incorporated
                    herein by reference.

          (10.23)   The form of The Timken Company Deferred Shares Agreement
                    as adopted on April 18, 2000 was filed with Form 10-Q for
                    the period ended March 31, 2000, and is incorporated herein
                    by reference.

          (10.24)   Amendment to Employee Excess Benefits Agreement was filed
                    with Form 10-Q for the period ended March 31, 2000, and is
                    incorporated herein by reference.

          (10.25)   Consulting agreement entered into with Robert L.
                    Leibensperger was filed with Form 10-Q for the period ended
                    June 30, 2000, and is incorporated herein by reference.

          (10.26)   Consulting agreement entered into with John Schubach was
                    filed with Form 10-Q for the period ended June 30, 2000,
                    and is incorporated herein by reference.

          (10.27)   Consulting agreement entered into with e-Solutions, LLC
                    (Thomas W. Strouble, Owner and principal) was filed with
                    Form 10-Q for the period ended September 30, 2000, and is
                    incorporated herein by reference.

          (10.28)   First Amendment to Consulting agreement (with e-Solutions,
                    LLC).
                                                                      23
     Listing of Exhibits (cont.)
     ___________________________

          (12)      Ratio of Earnings to Fixed Charges

          (13)      Annual Report to Shareholders for the year ended
                    December 31, 2000, (only to the extent expressly
                    incorporated herein by reference).

          (21)      A list of subsidiaries of the registrant.

          (23)      Consent of Independent Auditors.

          (24)      Power of Attorney

   (b)  Reports on Form 8-K:

                On March 8, 2001, the company filed a Form 8-K regarding Other
                Events and Regulation FD Disclosure, which contained estimated
                market data and industry trend information relating to a number
                of industry segments in which the company sells bearing and
                steel products.  No financial statements were filed.

   (c) and (d)  The exhibits are contained in a separate section of this
                report.

                                SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the company has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

                             THE TIMKEN COMPANY

By   /s/ W. R. Timken, Jr.              By  /s/ G. E. Little
     ________________________________       ________________________________
     W. R. Timken, Jr.,                     G. E. Little
     Director and Chairman and Chief        Senior Vice President - Finance
     Executive Officer                      (Principal Financial and
                                             Accounting Officer)
Date          March 30, 2001            Date            March 30, 2001
     ________________________________        _______________________________

Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed by the following persons on behalf of the registrant
and in the capacities and on the dates indicated.

By  /s/ Stanley C. Gault*                By  /s/ John M. Timken, Jr.*
    ______________________________           _______________________________
    Stanley C. Gault      Director           John M. Timken, Jr.    Director
Date          March 30, 2001             Date           March 30, 2001

By  /s/ J. Clayburn La Force, Jr.*       By  /s/ W. J. Timken*
    ______________________________           _______________________________
    J. Clayburn La Force, Jr., Director      W. J. Timken           Director
Date          March 30, 2001             Date           March 30, 2001

By  /s/ James W. Griffith*               By /s/ Joseph F. Toot, Jr.*
    ______________________________           _______________________________
    James W. Griffith,    Director           Joseph F. Toot, Jr.    Director
Date          March 30, 2001             Date          March 30, 2001

By  /s/ John A. Luke, Jr.*               By  /s/ Martin D. Walker*
    ______________________________           _______________________________
    John A. Luke, Jr.     Director           Martin D. Walker       Director
Date          March 30, 2001             Date           March 30, 2001

By  /s/ Robert W. Mahoney*               By  /s/ Jacqueline F. Woods*
    ______________________________           _______________________________
    Robert W. Mahoney     Director           Jacqueline F. Woods,   Director
Date          March 30, 2001             Date           March 30, 2001

By  /s/ Jay A. Precourt*
    ______________________________
    Jay A. Precourt       Director
Date          March 30, 2001

                                         By  /s/ G. E. Little
                                         ___________________________________
                                         G. E. Little, attorney-in-fact
                                         By authority of Power of Attorney
                                         filed as Exhibit 24 hereto
                                         Date          March 30, 2001


                                   Listing of Exhibits

               Exhibit
               _______

          (3)(i)    Amended Articles of Incorporation of The Timken Company
                    (Effective April 16, 1996) were filed with Form S-8
                    dated April 16, 1996 and are incorporated herein by
                    reference.

          (3)(ii)   Amended Regulations of The Timken Company effective
                    April 21, 1987, were filed with Form 10-K for the
                    period ended December 31, 1992, and are incorporated
                    herein by reference.

          (4)       Credit Agreement dated as of July 10, 1998 among The
                    Timken Company, as Borrower, Various Financial
                    Institutions, as Banks, and Keybank National
                    Association, as Agent was filed with Form 10-Q for the
                    period ended June 30, 1998, and is incorporated herein by
                    reference.

          (4.1)     Indenture dated as of April 24, 1998, between The Timken
                    Company and The Bank of New York, which was filed with
                    Timken's Form S-3 registration statement which became
                    effective April 24, 1998, and is incorporated herein by
                    reference.

          (4.2)     Indenture dated as of July 1, 1990, between Timken and
                    Ameritrust Company of New York, which was filed with
                    Timken's Form S-3 registration statement dated July 12,
                    1990, and is incorporated herein by reference.

          (4.3)     First Supplemental Indenture, dated as of July 24,
                    1996, by and between The Timken Company and Mellon
                    Bank, N.A. was filed with Form 10-Q for the period
                    ended September 30, 1996, and is incorporated herein by
                    reference.

          (4.4)     The company is also a party to agreements with respect
                    to other long-term debt in total amount less than 10%
                    of the registrant's consolidated total assets.  The
                    registrant agrees to furnish a copy of such agreements
                    upon request.


     Listing of Exhibits (cont.)
     ___________________________

                    Management Contracts and Compensation Plans
                    ___________________________________________

          (10)      The Management Performance Plan of The Timken Company
                    for Officers and Certain Management Personnel.

          (10.1)    The form of Deferred Compensation Agreement entered
                    into with James W. Griffith, W. R. Timken, Jr., R. L.
                    Leibensperger and B. J. Bowling was filed with Form
                    10-Q for the period ended September 30, 1995, and is
                    incorporated herein by reference.

          (10.2)    The Timken Company 1996 Deferred Compensation Plan for
                    officers and other key employees, amended and restated as
                    of April 20, 1999 was filed with Form 10-Q for the period
                    ended March 31, 1999, and is incorporated herein by
                    reference.

          (10.3)    The Timken Company Long-Term Incentive Plan As Amended And
                    Restated As Of December 16, 1999, and approved by share-
                    holders April 18, 2000 was filed as Appendix A to Proxy
                    Statement dated February 23, 2000, and is incorporated
                    herein by reference.

          (10.4)    The 1985 Incentive Plan of The Timken Company for
                    Officers and other key employees as amended through
                    December 17, 1997 was filed with Form 10-K for the
                    period ended December 31, 1997, and is incorporated
                    herein by reference.

          (10.5)    The form of Severance Agreement entered into with all
                    Executive Officers of the company was filed with
                    Form 10-K for the period ended December 31, 1996, and
                    is incorporated herein by reference.  Each differs only
                    as to name and date executed.

          (10.6)    The form of Death Benefit Agreement entered into with
                    all Executive Officers of the company was filed with
                    Form 10-K for the period ended December 31, 1993, and
                    is incorporated herein by reference.  Each differs only
                    as to name and date executed.

          (10.7)    The form of Indemnification Agreements entered into
                    with all Directors who are not Executive Officers of
                    the company was filed with Form 10-K for the period
                    ended December 31, 1990, and is incorporated herein by
                    reference.  Each differs only as to name and date
                    executed.

          (10.8)    The form of Indemnification Agreements entered into
                    with all Executive Officers of the company who are not
                    Directors of the company was filed with Form 10-K for
                    the period ended December 31, 1990, and is incorporated
                    herein by reference.  Each differs only as to name and
                    date executed.


     Listing of Exhibits (cont.)
     ___________________________

          (10.9)    The form of Indemnification Agreements entered into
                    with all Executive Officers of the company who are also
                    Directors of the company was filed with Form 10-K for
                    the period ended December 31, 1990, and is incorporated
                    herein by reference.  Each differs only as to name and
                    date executed.

          (10.10)   The form of Employee Excess Benefits Agreement entered
                    into with all active Executive Officers, certain
                    retired Executive Officers, and certain other key
                    employees of the company was filed with Form 10-K for
                    the period ended December 31, 1991, and is incorporated
                    herein by reference.  Each differs only as to name and
                    date executed.

          (10.11)   The Amended and Restated Supplemental Pension Plan of
                    The Timken Company as adopted March 16, 1998 was filed
                    with Form 10-K for the period ended December 31, 1997,
                    and is incorporated herein by reference.

          (10.12)   Amendment to the Amended and Restated Supplemental Pension
                    Plan of the Timken Company executed on December 29, 1998
                    was filed with Form 10-K for the period ended December 31,
                    1998, and is incorporated herein by reference.

          (10.13)   The form of The Timken Company Nonqualified Stock Option
                    Agreement for nontransferable options as adopted on April
                    18, 2000 was filed with Form 10-Q for the period ended
                    March 31, 2000, and is incorporated herein by reference.

          (10.14)   The form of The Timken Company Nonqualified Stock
                    Option Agreement for transferable options as adopted on
                    April 18, 2000 was filed with Form 10-Q for the period
                    ended March 31, 2000, and is incorporated herein by
                    reference.

          (10.15)   The form of The Timken Company Nonqualified Stock Option
                    Agreement for special award options as adopted on April 18,
                    2000 was filed with Form 10-Q for the period ended March
                    31, 2000, and is incorporated herein by reference.

          (10.16)   The Timken Company Deferral of Stock Option Gains Plan
                    effective as of April 21, 1998 was filed with Form 10-Q
                    for the period ended March 31, 1998, and is incorporated
                    herein by reference.

          (10.17)   The Consulting Agreement entered into with Joseph F.
                    Toot, Jr., effective January 1, 2001.


     Listing of Exhibits (cont.)
     ___________________________

          (10.18)   The form of The Timken Company Performance Share
                    Agreement entered into with W. R. Timken, Jr.,
                    R. L. Leibensperger and B. J. Bowling was filed with
                    Form 10-K for the period ended December 31, 1997, and is
                    incorporated herein by reference.

          (10.19)   The Timken Company Senior Executive Management Performance
                    Plan effective January 1, 1999, and approved by
                    shareholders April 20, 1999 was filed as Appendix A to
                    Proxy Statement dated February 24, 1999, and is
                    incorporated herein by reference.

          (10.20)   The Timken Company Nonqualified Stock Option Agreement
                    entered into with James W. Griffith and adopted on
                    December 16, 1999 was filed with Form 10-K for the period
                    ended December 31, 1999, and is incorporated herein by
                    reference.

          (10.21)   The Timken Company Promissory Note entered into with
                    James W. Griffith and dated December 17, 1999 was filed
                    with Form 10-K for the period ended December 31, 1999, and
                    is incorporated herein by reference.

          (10.22)   The Timken Company Director Deferred Compensation Plan
                    effective as of February 4, 2000 was filed with Form 10-Q
                    for the period ended March 31, 2000, and is incorporated
                    herein by reference.

          (10.23)   The form of The Timken Company Deferred Shares Agreement
                    as adopted on April 18, 2000 was filed with Form 10-Q for
                    the period ended March 31, 2000, and is incorporated herein
                    by reference.

          (10.24)   Amendment to Employee Excess Benefits Agreement was filed
                    with Form 10-Q for the period ended March 31, 2000, and is
                    incorporated herein by reference.

          (10.25)   Consulting agreement entered into with Robert L.
                    Leibensperger was filed with Form 10-Q for the period ended
                    June 30, 2000, and is incorporated herein by reference.

          (10.26)   Consulting agreement entered into with John Schubach was
                    filed with Form 10-Q for the period ended June 30, 2000,
                    and is incorporated herein by reference.

          (10.27)   Consulting agreement entered into with e-Solutions, LLC
                    (Thomas W. Strouble, Owner and principal) was filed with
                    Form 10-Q for the period ended September 30, 2000, and is
                    incorporated herein by reference.

          (10.28)   First Amendment to Consulting agreement (with e-Solutions,
                    LLC).


     Listing of Exhibits (cont.)
     ___________________________

          (12)      Ratio of Earnings to Fixed Charges

          (13)      Annual Report to Shareholders for the year ended
                    December 31, 2000, (only to the extent expressly
                    incorporated herein by reference).

          (21)      A list of subsidiaries of the registrant.

          (23)      Consent of Independent Auditors.

          (24)      Power of Attorney

EX-10

                             EXHIBIT 10

                                                 January 1, 2001

                         THE TIMKEN COMPANY
                     MANAGEMENT PERFORMANCE PLAN

Purpose

The purpose of The Timken Company (the "Company") Management Performance
Plan (the "Plan") is to promote the profitable growth of the Company by:

       Providing rewards for achieving increasing levels of return on
       capital.

       Recognizing corporate, business unit and individual performance
       achievement.

       Attracting, motivating and retaining superior executive talent.

Administration

It is the responsibility of senior management of the Company to execute
the provisions of the Plan.  Based on senior management recommendations,
the Compensation Committee (the "Committee") approves financial goals,
participation, target bonus awards, actual bonus awards, timing of payment
and other actions necessary to the administration of the Plan.

Participation

The participant group includes Company executive officers and other key
employees of the Company and its subsidiaries in positions assigned to Grades
6 or higher (i.e., 750 or more points) based on the Company's job evaluation
process.

Bonus Opportunity

Each position is assigned a target bonus expressed as a percentage of annual
base salary.  The targets are based on market data for companies that are
similar for compensation purposes, including companies of similar size and
similar industries.  The targets are reviewed annually by management, and
the Committee will approve all targetbonuses for officers.

The full target bonus opportunity represents an appropriate bonus award if
performance standards are met for Corporate, Business Unit and Individual
results.

Bonus funds for the three components-Corporate, Business Unit and Individual-
will be developed independently based on performance achievement versus
the goal(s) for


each component.  The actual value of each component can range from 0% to
200% of target based on performance.

For most participants, the total bonus will be the sum of the amounts for
Corporate, Business Unit and Individual performance.  In general, the more
senior participants will have greater weight placed on corporate results,
while other participants will have a greater weight placed on business
unit and individual performance results.

The allocations to corporate, business unit and individual performance
will be reviewed annually and changes to the allocations will be determined
by senior management.

Performance Measures

Corporate/Business Unit Components

The primary Corporate and Business Unit performance measure is Return
on Invested Capital, one measure of which is Earnings Before Interest
and Taxes (EBIT) divided by Beginning Invested Capital (BIC).

At the beginning of each year, the Committee will specify the EBIT/BIC
and other financial or non-financial performance measures to be used to
evaluate Corporate and Business Unit performance for the coming year.
Potential performance measures include, but are not limited to:

          Cash flow (including free cash flow)
          Continuous improvement
          Cost of capital
          Customer satisfaction
          Debt reduction
          Earnings growth (including earnings per share and
           earnings before interest and taxes)
          Financial performance exceeding that of peer/competitor
           companies
          Improvement of shareholder return
          Inventory management
          Net income
          Productivity improvement
          Profit after taxes
          Quality
          Recruitment and development of excellent associates
           with emphasis on diversity
          Reduction of fixed costs
          Return on assets
          Return on equity
          Return on invested capital (EBIT/BIC)
          Sales from new products
          Sales growth
                                                                         2


          Successful start-up of new facility
          Successful acquisition/divestiture

For the Corporate, Business Unit and Individual components of the Plan,
the size of the award will be determined by the degree to which targets
are achieved for each measure within that component.  Awards for
performance that falls between threshold, target and maximum will be
interpolated.

Individual Component

Individual performance goals will be established for each participant
consistent with the Company's performance management process.  The
participant's supervisor will assess the participant's performance against
these goals and make a determination of the amount of bonus to be earned for
the individual component of the Plan.  While the value of the individual
component can range from 0% to 200% of target for a specific individual,
the sum of individual award components for all participants must not exceed
100% of target.

Award Determination

A participant's bonus award will be determined by adding the value of each
of the applicable components (corporate, business unit, individual) once
performance is considered.  The sum of all participant bonus determinations
will equal the Total Fund.

Minimum Performance Requirement

For a payment to be earned for any portion of this Plan, the Company must
report a predetermined net profit for the Plan year after taking into account
all Plan payments for that year.  Once the predetermined profit level is
achieved, the Plan will function as outlined.  If the predetermined profit
level is not achieved, no awards will be paid under the Corporate, Business
Unit or Individual component of the Plan.

Bonus Payments

At the end of the year, senior management will determine whether Corporate
performance has exceeded the minimum performance requirement for paying
bonuses.  Senior management will recommend to the Committee the Total Fund
based on its assessment of performance achievement at Corporate, Business
Unit and individual levels and the resulting individual awards.  The
Committee may make further adjustments to the fund or any individual bonus
amount based on its assessment of financial and non-financial performance.

Awards under the Plan will be paid in cash and/or stock.

One hundred percent of awards under the Plan will be included in pension
earnings and earnings for the purpose of calculating 401(k) plan benefits.
Awards will not be included for purposes of any other employee benefits
plans, except long term disability.
                                                                        3


mpplan01.doc

                                                                        4

EX-10.17

                                EXHIBIT 10.17

                             CONSULTING AGREEMENT
                         ___________________________

 This consulting agreement (hereinafter referred to as "Agreement") is
 entered into as of the 1st day of January, 2001, by and between Joseph
 F. Toot, Jr., (hereinafter referred to as "Consultant") and The Timken
 Company (hereinafter referred to as "Company"), a corporation organized
 and existing under the laws of the State of Ohio.

 WHEREAS, Consultant was employed for many years as an officer of the
 Company and has acquired extensive experience and developed important
 relationships which the Company wishes to utilize by retaining Consultant
 to perform certain services as described herein; and

 WHEREAS, Consultant resigned as an officer and retired as an employee on
 December 31, 1997, under the Company's retirement program.

 NOW, THEREFORE, in consideration of the mutual promises and covenants,
 it is hereby agreed by and between the parties as follows:

 1.   In consideration for Consultant's services as hereinafter described,
      the Company agrees to pay Consultant $100,000.00 per year payable in
      quarterly payments of $25,000.00 to be paid on the last day of each
      calendar quarter beginning March 31, 2001.

 2.   The services to be performed by Consultant shall consist of
      the following:
      (1) Provide counsel and advice to the Company on various matters from
      time to time as requested by the Chairman and CEO and either of the
      Chief Operating Officers of the Company; (2) continue his relation-
      ships with customers and others in the bearing and steel industry and
      make calls on and entertain such persons on behalf of the Company;
      (3) continue mentoring program with senior executives; and (4) work
      with the President and COO of the Company to enhance contacts in Europe.

 3.   It is anticipated that Consultant will devote the equivalent of approx-
      imately four days per month to the performance of the services described
      above.  The days on which Consultant will perform services under this
      Agreement, and the number of hours devoted to the performance of such
      services on any given day, will be determined by Consultant in his sole
      discretion.

 4.   The Company will provide an office and secretarial services for the
      Consultant to assist him in performing the services described in this
      Agreement.  Consultant is not required to make use of such office or
      secretarial assistance and may perform the services requested under
      this Agreement at any location of his choice, whether inside or
      outside of Ohio.


 5.   Consultant shall be entitled to the use of Company aircraft in
      connection with performing services under this Agreement, provided,
      however, that commercial aviation will be used when practical and
      that scheduling for Corporate Officers shall take precedence to
      the extent practical.  Consultant shall be entitled to use first
      class air travel.

 6.   The Company will reimburse Consultant for all reasonable and necessary
      expenses incurred in the performance of the services described in
      this Agreement.

 7.   Consultant agrees that he shall treat confidentially any material,
      non-public information, trade secrets, or proprietary data of the
      Company that he obtains during the course of performing his services
      under this Agreement.

 8.   Consultant agrees that, during the term of this Agreement and for three
      years after the termination of this Agreement, he shall not provide
      services to any third party that is a direct competitor of the Company.
      Subject to the foregoing, Consultant may provide consulting or other
      services to other parties during the term of this Agreement and at
      anytime thereafter.

 9.   It is agreed that Consultant shall render his services as an independent
      contractor and that no relationship of employer-employee shall result
      from the execution of this Agreement or from the performance of any
      services hereunder.

 10.  Consultant shall have the right to determine when, where, how and in
      what manner he will perform the services under this Agreement.  It is
      understood that as an independent contractor, Consultant is not under
      the direction or control of the Company when rendering the services
      requested of him under this Agreement and is expected to exercise
      independent judgment when providing services under this Agreement.
      Moreover, Consultant shall not be entitled to any Company benefits as
      a result of performing services under this Agreement, and the Company
      shall not pay or withhold any federal, state, or local income tax or
      payroll tax of any kind on behalf of the Consultant.

 11.  This Agreement shall be for a term of two years terminating on December
      31, 2002, provided, however, that either party may cancel and terminate
      this Agreement at any time by giving a sixty-day written notice to the
      other party of its the desire to do so.  Moreover, this Agreement will
      terminate immediately if Consultant dies, becomes permanently disabled,
      or breaches any material term of this Agreement.  If this Agreement is
      terminated prior to December 31, 2002, the quarterly payment to which
      Consultant would otherwise be entitled to receive will be pro-rated
      based on the number of days the Agreement was in effect during the
      calendar quarter in which the Agreement was terminated.  The provisions
      of Paragraphs 8 and 9 hereof shall continue in full force and effect
      notwithstanding the termination of this Agreement.


 12.  This Agreement constitutes the entire agreement between the parties
      relative to the services referred to herein and supersedes all previous
      negotiations and understandings, oral or written, relative to such
      services.  Notwithstanding the foregoing, nothing contained herein shall
      affect or adversely impact any compensation or benefits to which
      Consultant is entitled as a result of his employment by the Company
      prior to December 31, 1997, and his retirement on said date.

 13.  This Agreement shall be construed, interpreted and applied, and the
      legal relationship created herein shall be determined, in accordance
      with the laws of the State of Ohio.

 In witness whereof, the parties have executed this Agreement as of the date
 first above written.

                              THE TIMKEN COMPANY

                              By: /s/ W. R. Timken, Jr.
                                  ____________________________________

                                  Chairman and Chief Executive Officer
                                  ____________________________________
                                   (Title)

                                  /s/ Joseph F. Toot, Jr.
                                  ____________________________________
                                   Joseph F. Toot, Jr.

EX-10.28

                                    EXHIBIT 10.28

                         First Amendment to Consulting Agreement

        In consideration of the receipt of mutual promises of the companies and
        other good and valuable consideration, the receipt and sufficiency of
        which is hereby acknowledged, the companies set forth below hereby
        agree:

        To amend the Consulting Agreement among the companies dated September
        30, 2000 to substitute "e-Solutions.biz, LLC" as the Consultant in the
        opening paragraph for "e-Solutions, LLC.

        All other terms and provisions of the Consulting Agreement shall remain
        unchanged.

        AGREED and effective as of the 2nd day of January, 2001.

        Signatures

        The Timken Company                       e-Solutions.biz

        /s/ James W. Griffith                    /s/ Thomas W. Strouble
        __________________________               ___________________________

        January 2, 2001                          January 2, 2001
        __________________________               ___________________________
        Date                                     Date

EX-12

                                  EXHIBIT 12
               COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

                                                Year Ended December 31,
                                             2000        1999        1998
                                           --------    --------    --------
                                                 (Thousands of Dollars)

Income before income taxes,
      extraordinary item and cumulative
      effect of accounting changes         $ 70,597    $ 98,991    $185,350
Amortization of capitalized interest          2,444       2,432       2,437
Interest expense                             31,922      27,225      26,502
Interest portion of rental expense            3,254       3,401       3,260

Earnings                                   $108,217    $132,049    $217,549
                                           ========    ========    ========

Interest                                    $33,500     $30,877     $31,265
Interest portion of rental expense            3,254       3,401       3,260
                                           --------    --------    --------
Fixed Charges                               $36,754     $34,278     $34,525
                                           ========    ========    ========

Ratio of Earnings to Fixed Charges             2.94        3.85        6.30
                                           ========    ========    ========

EX-13

Exhibit 13

financial summary

2000		1999
(Thousands of dollars, except per share data)
Net sales Impairment and restructuring charges Income before income taxes Provision for income taxes Net income Earnings per share Earnings per share - assuming dilution Dividends per share	$ 2,643,008 27,754 70,597 24,709 $ 45,888 $ .76 $ .76 $ .72	$ 2,495,034 - 98,991 36,367 $ 62,624 $ 1.01 $ 1.01 $ .72

quarterly financial data

2000	Net Sales	Gross Profit	Impairment & Restructuring	Net Income	Earnings per Share(1)		Dividends per Share
					Basic	Diluted
(Thousands of dollars, except per share data)
Q1 Q2 Q3 Q4	$ 685,791 693,263 632,243 631,711	$ 144,965 142,476 109,545 103,887	$ 14,759 3,322 3,453 6,220	$ 16,040 21,240 7,685 923	$ .26 .35 .13 .02	$ .26 .35 .13 .02	$ .18 .18 .18 .18
	$ 2,643,008	$ 500,873	$ 27,754	$ 45,888	$ .76	$ .76	$ .72
1999
(Thousands of dollars, except per share data)
Q1 Q2 Q3 Q4	$ 625,370 636,099 601,703 631,862	$ 126,559 119,601 116,341 130,167	$         - - - -	$ 16,579 12,264 12,442 21,339	$ .27 .20 .20 .35	$ .27 .20 .20 .35	$ .18 $ .18 $ .18 $ .18
	$ 2,495,034	$ 492,668	$         -	$ 62,624	$ 1.01	$ 1.01	$ .72

(1) Annual earnings per share do not equal the sum of the individual quarters due to differences in the average number of shares outstanding during the respective periods.

2000 Stock Prices		1999 Stock Prices
High	Low	High	Low
$ 20 3/16 20 13/16 20 1/2 15 13/16	$ 14 15 1/2 13 9/16 12 5/8	$ 22 3/16 25 13/16 19 11/16 20 9/16	$ 16 1/8 15 15/16 15 3/4 15 5/8

1

consolidated Statement of Income

	Year Ended December 31
2000		1999	1998
(Thousands of dollars, except per share data)
Net sales Cost of products sold	$ 2,643,008 2,142,135	$ 2,495,034 2,002,366	$ 2,679,841 2,098,186
Gross Profit   Selling, administrative and general expenses Impairment and restructuring charges	500,873   367,499 27,754	492,668   359,910 -0-	581,655   356,672 -0-
Operating Income   Interest expense Interest income Other expense	105,620   (31,922) 3,479 (6,580)	132,758   (27,225) 3,096 (9,638)	224,983   (26,502) 2,986 (16,117)
Income Before Income Taxes Provision for income taxes	70,597 24,709	98,991 36,367	185,350 70,813
Net Income	$ 45,888	$ 62,624	$ 114,537
Earnings Per Share	$ 0.76	$ 1.01	$ 1.84
Earnings Per Share - Assuming Dilution	$ 0.76	$ 1.01	$ 1.82

See accompanying Notes to Consolidated Financial Statements on pages 29 through 38.

MD&A summary

Despite a slowing global economy and weakening of North American automotive markets, The Timken Company reported solid increases in sales and earnings in 2000, excluding special charges. In 2000, net sales were the second highest in the company’s history at $2.643 billion compared to $2.495 billion in 1999. Through the end of 2000, the company recorded $38.9 million in pretax charges for impairment, restructuring and reorganization to streamline operations, reduce costs and realign businesses with global industries. Excluding these charges, after-tax earnings in 2000 were $74.6 million. Including these charges, earnings were $45.9 million, down from $62.6 million a year ago. Debt increased to $514.6 million at the end of 2000, from $449.9 million in 1999, as the company increased working capital, funded growth initiatives and repurchased shares of its common stock. Strong automotive demand and recovery of North American industrial markets boosted sales of bearing products in the first half of 2000, but weaker automotive demand slowed sales in the second half. Demand for industrial products slowed and Asia Pacific and European markets weakened in the last three months of 2000, while aerospace demand continued to strengthen. Net sales of steel products increased during 2000, but profitability in the steel businesses was hurt by the Euro's devaluation, higher energy prices and inventory corrections late in the year. In 2000, the company rationalized operations, improved operating efficiencies and created alliances to expand product offerings and market reach. As a result of the restructuring, the company reduced its workforce by 612 positions by the end of 2000. In the first quarter, the company announced plans to refocus bearing manufacturing in Duston, England, to specialize in products for the automotive industry and shift manufacturing of other products to facilities in Eastern Europe and the United States. A consolidation of European distribution operations was also launched. In the second quarter, operations of three rail bearing reconditioning facilities were consolidated into one new facility in Knoxville, Tennessee. The closing of another rail bearing reconditioning facility in Little Rock, Arkansas, was announced in December. In the third quarter, the company entered into a joint venture to bring advanced technology to the rail industry with a "smart" top-of-rail lubrication system that is designed to reduce fuel costs and improve productivity. In the fourth quarter, the company agreed to sell the flat-ground tool steel business of Timken Latrobe Steel – Europe in Sheffield, England, to a group of private investors, and it refocused its high-speed steel business in the United Kingdom as part of Timken Desford Steel. The completion of this sale is expected by the end of the first quarter, 2001. Three initiatives and an acquisition aimed at accelerating growth in specific markets were announced during the first part of January 2001. The company entered into a joint venture with another bearing manufacturer to produce forged and turned steel rings in Brazil, which is expected to reduce costs and create a local, high-quality source for these bearing components. The company entered into an e-business joint venture with three other manufacturing companies to provide North American distributors of industrial products with Web-based access and integrated logistics for premium brands. The company also joined these three companies and a fourth manufacturing company in forming a joint venture to provide e-business services for European distributors. It also acquired a manufacturer of dental handpiece repair equipment, and announced a buyout of its joint-venture partner in Yantai Timken Company Limited.

20

Management’s Discussion and Analysis of the Statement of Income

2000 compared to 1999

Net sales were $2.643 billion, 5.9% above 1999’s $2.495 billion. Although sales increased during 2000 as compared to 1999, they were lower in the second half of 2000 than the first half. North American light vehicle demand remained steady through October 2000, but began to decline during the fourth quarter and fell sharply in December as manufacturers lowered production and worked down inventories. Heavy truck demand weakened significantly in the second half of 2000. Industrial markets, which began recovering in 1999’s fourth quarter, have stagnated or shown slight weakening during the second half of 2000. Also, while the Euro strengthened in late 2000, its earlier devaluation against the U.S. dollar and British pound enabled European producers, especially steel manufacturers, to export into North America with lower prices, which has put more pressure on prices and operating margins. In addition, the Euro’s earlier depressed value substantially eroded margins on products manufactured in the U.S. and the United Kingdom and sold throughout the rest of Europe. The North American rail industry has been weak since mid-1999, while aerospace and super precision markets have strengthened slightly in the second half of 2000. Latin America remained strong during 2000, but it showed some signs of weakening in the last few months. Sales in Asia Pacific were up slightly over 1999’s levels. Gross profit in 2000 was $500.9 million (19.0% of net sales), up from $492.7 million (19.7% of net sales). Gross profit in 2000 would have been higher except for $4.1 million in reorganization costs related to the company’s global restructuring and reorganization. The stronger performance in 2000 was driven by changes in sales mix, with growth in higher margin industrial sales offsetting weakening automotive sales. Additionally, higher manufacturing volumes and cost improvements made during the year offset higher contract wage and benefit costs in the U.S. In March 2000, the company announced an acceleration of its global restructuring to position itself for profitable growth, to streamline operations, to reduce costs and to improve European profitability. These initiatives also are to improve competitiveness and transform the company into global business units. Implementation, employee severance and non-cash impairment charges of $55 million are expected through the first quarter of 2001, with $38.9 million recorded during 2000. The originally announced $35 million in annual savings has been revised to $29 million. This reduction is primarily driven by the cancellation of certain tax initiatives and problems experienced in the consolidation of European distribution operations. Of the $38.9 million of charges recorded by the company in 2000, about $16.8 million related to non-cash asset impairment and abandoned acquisition expenses. Severance expenses accounted for $11.0 million, and reorganization implementation costs were $11.1 million. The company had originally announced that 600 positions would be eliminated worldwide. Through the 2000 year-end, the workforce has been reduced by 612 positions. The impairment charges of $16.8 million were primarily the result of the consolidation of Steel business operations. The Steel business consolidation was in three areas: small bar finish equipment related to the exit of the small bar business; the write-off of excess equipment as a result of the successful operation of the new bar mill; and the idling of rotoroll equipment as a result of product rationalization between the Wooster Steel plant and Timken Desford Steel. Also included were $4.0 million related to abandoned acquisition, affiliation and divestiture efforts by the Steel business. Additionally, $2.1 million in impairment charges related to bearing operations. Projects undertaken by the Bearings business to shift manufacturing, consolidate European distribution and streamline management structure accounted for $10.3 million of the $11.0 million in severance. A key component of the manufacturing shift is the company’s bearing manufacturing facility in Duston, England. It will be refocused to specialize and fuel growth in advanced automotive bearings, roller production and formed products and to transfer manufacturing to lower cost facilities in Romania, Poland and the United States. During 2000, the company reduced staff in Duston by 102, incurring separation costs of $2.8 million. An additional 54 position reductions are expected in 2001. In China, as announced in January 2001, the company is buying out its Chinese joint-venture partner in Yantai Timken Company, Limited, to obtain total management control, achieve greater productivity and efficiency, and grow export sales. To achieve efficiencies, Yantai Timken completed a labor management program, which reduced the workforce by 403 associates. The severance costs incurred were $2.4 million. Consolidation of the European distribution operation was undertaken in 2000 to reduce logistics costs through greater distribution efficiencies. However, operational issues resulted in the suspension of the project; currently, an intense review is in progress to re-evaluate the implementation. Relocation of the Haan, Germany, warehouse to France occurred in 2000, and restructuring costs include $1.1 million for the separation expenses of 47 operative associates. Additional consolidation of warehousing and shipping facilities have been delayed; accordingly, $0.8 million of severance charges were reversed in the fourth quarter of 2000.

21

Management’s Discussion and Analysis of the Statement of Income (Continued)

The company’s reorganization into global business units drove the streamlining of the management structure. Severance costs of $4.0 million in the Bearings business and $0.7 million in Steel were recorded in 2000 related to 60 administrative staff reductions. Reorganization and implementation expenses of $11.1 million represent professional fees, relocation expenses, and the write-off of obsolete inventory. Cash expenditures relating to the restructuring efforts in 2000 amounted to $8.0 million and were paid from operations. Additional cash expenditures of $3.0 million in 2001 are anticipated to pay out severance liabilities at December 31, 2000. Operating income decreased to $105.6 million in 2000 compared to $132.8 million in 1999. Operating income in 2000 would have been higher, except for $27.8 million in restructuring costs as well as $11.1 million in reorganization costs. Selling, administrative and general expenses increased to $367.5 million (13.9% of net sales) in 2000 as compared to $359.9 million (14.4% of net sales) in 1999, largely because of reorganization costs, which totaled $7.0 million. As a percentage of sales, selling, administrative and general expenses decreased in 2000. Other expense decreased in 2000 as a result of lower foreign currency exchange losses in 2000. The company’s subsidiary in Romania operates in a highly inflationary economy. During 2000, translational losses relating to Timken Romania declined by $5.0 million. Other expense in 1999 was higher, primarily as a result of the January 1999 devaluation of the Brazilian real and transaction losses recorded by the company’s operations in France and the United Kingdom. Taxes in 2000 represented 35.0% of income before taxes compared to 36.7% in 1999. The lower effective tax rate in 2000 was due primarily to use of foreign and state tax credits, as well as benefits derived from settlement of federal income tax issues and amended foreign sales corporation income tax returns. Bearings’ net sales in 2000 were $1.763 billion, about even with $1.760 billion in 1999. Global Automotive sales decreased by approximately 5%, while global Industrial sales increased by 11%. In the first half of 2000, net sales benefited from continued automotive demand for sport utility vehicles and strong production levels in the light and heavy truck industry, as well as recovery of the North American industrial sector (original equipment and aftermarket). However, in the second half of 2000, demand for cars and trucks weakened and recovery in the industrial sector stalled. Sales for the global Rail business were down 12% compared to 1999. Although Aerospace and Super Precision sales declined 3% from 1999, the business unit experienced strengthening sales during the second half of 2000. Emerging Markets’ sales increased 12% as compared to 1999. The company anticipates that the global light vehicle industry will remain sluggish during the first part of 2001, but it should improve as the year progresses. Additionally, the company anticipates heavy truck demand in 2001 will be comparable to second half 2000 levels. The Industrial business in Europe is expected to have moderate growth, while North American rail sales are expected to remain weak in 2001. The Aerospace and Super Precision business, which showed signs of recovery in 2000, is expected to show modest growth in 2001. Excluding $21.1 million in restructuring, impairment and reorganization charges, Bearings’ earnings before interest and income taxes (EBIT) in 2000 increased 24% to $100.0 million, compared to $80.5 million in 1999. Including those charges, Bearings’ EBIT was $78.9 million, down 2% from 1999. Bearings’ EBIT in 2000 was positively impacted in the first half by the profitable changes in the sales mix, with the growth in higher margin industrial sales as well as increased aftermarket business fueled by the recovery in Latin America and North America. In addition, higher manufacturing volumes in 2000 compared to 1999 and cost improvements made during the year offset the effect of higher contract wage and benefit costs in the U.S. Selling, administrative and general expenses were higher in 2000, primarily due to $5.6 million in reorganization expenses. Steel’s net sales, including intersegment sales, increased in 2000 by 13.6% to $1.076 billion versus $947 million in 1999. They included Precision Steel Components sales, which were $166.7 million in 2000. Sales to external customers increased about 10%. In 2000, sales to the automotive industry increased, primarily as a result of 18% sales growth in Precision Steel Components. Automotive demand weakened in the fourth quarter of 2000. Softer automotive demand is expected to continue in early 2001, with some improvements expected

22

throughout the year. Industrial steel sales strengthened significantly during the year. This reflects increased demand in the North American industrial sector throughout the year. Sales to the aerospace industry increased by about 16%. Sales to oil country customers more than doubled in 2000 because of higher energy prices, which caused an increase in active drilling rigs. Although sales to service centers approached 1998 levels after experiencing a decline in 1999, a slight weakening was noted late in 2000 as customers continued to adjust excess inventories. Steel’s net sales were negatively impacted by the Euro’s devaluation throughout much of 2000. This enabled European and other overseas producers to export into North America at lower prices, exerting downward pressure on pricing and operating margins. Although price increases were announced in the first half of 2000, they affected only a small percentage of the total business and were not enough to offset these pricing pressures. The company expects overall demand for steel products in 2001 to be stable, with slight increases in the industrial and aerospace sectors. Late in 2000, the automotive and service center industries began inventory corrections. Excluding $17.8 million in restructuring, impairment and reorganization charges, Steel’s EBIT in 2000 decreased about 16% to $37.1 million, compared to $44.0 million in 1999. Including restructuring, impairment and reorganization charges, Steel’s EBIT was $19.3 million, a decrease of 56%. Adjusting Steel’s EBIT in 1999 for the favorable LIFO impact of $10 million, EBIT in 2000 would have decreased 43%. Due to pressure from imports, alloy steel had to lower prices to maintain penetration in certain markets, which resulted in lower margins in 2000. In addition, Steel EBIT was negatively impacted in the second half of the year by higher energy costs, especially in the last quarter of 2000, as well as low capacity utilization and inventory reductions. Energy costs increased by more than $0.5 million per month during the fourth quarter. This was primarily attributed to higher natural gas prices. Higher energy costs are expected to continue in early 2001. A portion of these energy cost increases were reflected in higher prices for non-contract customers. Although Steel’s inventory reduction during 2000 resulted in fewer days’ supply compared to year-end 1999, it reduced profitability due to lower manufacturing volumes. Selling, administrative and general expenses were higher in 2000 as a result of $1.4 million in reorganization expenses. 1999 compared to 1998
Net sales decreased in 1999 by 6.9% to $2.495 billion. Although the North American automotive industry continued to show strength, industrial sales, including original equipment and aftermarket, were down significantly, as were sales in rail and aerospace. Steel’s oil country and service center businesses remained weak. Asia Pacific region sales continued to improve throughout the year from 1998’s extremely depressed levels. Sales in Europe were well below 1998’s levels; however, markets there showed some signs of improvement during the last half of the year. Sales from Timken Desford Steel and Timken India Limited, acquired in December 1998 and consolidated in March 1999, respectively, added about $54 million to 1999’s sales. Gross profit decreased 15.3% from $581.7 million (21.7% of net sales) in 1998 to $492.7 million (19.7% of net sales) in 1999. Lower sales volumes (particularly of industrial and aftermarket products), a less favorable product mix, weakening prices and lower production levels resulting in higher unabsorbed fixed costs contributed to the decline in profits. These factors, along with substantial inventory reductions and exchange rate changes, contributed to weaker performance in the company’s European operations. Gross profit in 1998 included approximately $15.0 million of expense related to unusual occurrences and $15.4 million related to structural changes and cost-reduction initiatives. Operating income also declined in 1999. Selling, administrative and general expenses were up slightly from $356.7 million (13.3% of net sales) in 1998 to $359.9 million (14.4% of net sales) in 1999. Excluding the $6.0 million of expense recorded in 1998 related to severance costs and abandoned potential business opportunities, the year-to-year change in expenses would have reflected an increase of 2.6%. Normal administrative expenses for Timken Desford Steel and Timken India Limited, acquisitions completed during 1999, account for most of the year-to-year increase. Other expense decreased in 1999 as a result of the company recording $7.4 million of expense in 1998 for the disposal of certain fixed assets related to a company-initiated internal fixed asset review conducted approximately every five years. Taxes represented 36.7% of income before taxes compared to 38.2% in 1998. The company’s effective tax rate in 1999 was lower due primarily to greater utilization of foreign and state tax credits.

23

consolidated Balance Sheet

	December 31
2000		1999
(Thousands of dollars) ASSETS Current Assets    Cash and cash equivalents    Accounts receivable, less allowances: 2000–$11,259; 1999–$9,497    Deferred income taxes    Inventories:       Manufacturing supplies       Work in process and raw materials       Finished products	$ 10,927 354,972 43,094   40,515 247,806 201,228	$ 7,906 339,326 39,706   38,655 235,251 172,682
Total Inventories	489,549	446,588
Total Current Assets   Property, Plant and Equipment    Land and buildings    Machinery and equipment	898,542     489,254 2,485,125	833,526     483,810 2,428,923
Less allowances for depreciation	2,974,379 1,610,607	2,912,733 1,531,259
Property, Plant and Equipment-Net	1,363,772	1,381,474
Other Assets    Costs in excess of net assets of acquired businesses, less      accumulated amortization: 2000–$41,228; 1999–$34,879    Intangible pension asset    Miscellaneous receivables and other assets    Deferred charges and prepaid expenses	151,487 88,405 43,974 17,925	153,847 840 43,668 27,963
Total Other Assets	301,791	226,318
Total Assets	$ 2,564,105	$ 2,441,318

Management’s Discussion and Analysis of the Balance Sheet

Maintaining a strong balance sheet and strong credit ratings are important objectives for the company. During 2000, the company maintained a single A rating on its long-term debt by two rating agencies. Total assets increased by $122.8 million. This increase is a function of changes in working capital and accounting for pensions throughout the year. Accounts receivable increased by $15.6 million since December 31, 1999. Bearings’ and Steel’s number of days’ sales in receivables increased four and six days, respectively, compared to December 31, 1999. The increase is due primarily to the temporary slowing of customer payments in December. The increase in inventories between years was $43.0 million. Although the number of days’ supply in inventory for the consolidated company was comparable to last year, Bearings’ increased by approximately ten days while Steel’s decreased approximately 14 days from December 31, 1999. The increase in Bearings’ inventories was primarily a result of reduced shipments in December and temporary buildup of industrial customer inventory for anticipated increase in demand. Steel’s inventories decreased due to concerted efforts to bring inventories more in line with customer demand. The company uses the LIFO method of accounting for approximately 77% of its inventories. Under this method, the cost of products sold approximates current costs and, therefore, reduces distortion in reporting due to inflation. Depreciation charged to operations is based on historical cost and is significantly less than if it were based on replacement value.

24

	December 31
2000		1999
(Thousands of dollars) LIABILITIES AND SHAREHOLDERS’ EQUITY Current Liabilities    Commercial paper    Short-term debt    Accounts payable and other liabilities    Salaries, wages and benefits    Income taxes    Current portion of long-term debt	$ 76,930 105,519 239,182 137,320 1,527 26,974	$ 35,937 81,296 236,602 120,295 5,627 5,314
Total Current Liabilities   Non-Current Liabilities    Long-term debt    Accrued pension cost    Accrued postretirement benefits cost    Deferred income taxes    Other non-current liabilities	587,452     305,181 237,952 394,097 11,742 22,999	485,071     327,343 148,595 394,084 6,147 34,097
Total Non-Current Liabilities	971,971	910,266
Shareholders’ Equity    Class I and II Serial Preferred Stock without par value:       Authorized–10,000,000 shares each class, none issued    Common stock without par value:       Authorized–200,000,000 shares       Issued (including shares in treasury) 63,082,626 shares       Stated capital       Other paid-in capital    Earnings invested in the business    Accumulated other comprehensive income    Treasury shares at cost (2000 – 3,117,469 shares; 1999 – 1,886,537 shares)	-0-       53,064 256,873 839,242 (84,913) (59,584)	-0-       53,064 258,287 836,916 (64,134) (38,152)
Total Shareholders’ Equity	1,004,682	1,045,981
Total Liabilities and Shareholders’ Equity	$ 2,564,105	$ 2,441,318

See accompanying Notes to Consolidated Financial Statements on pages 29 through 38.

The intangible pension asset increased by $87.6 million from December 31, 1999. In 2000, the company recorded $86.8 million in additional pension liability, which is included in accrued pension cost and is offset by the intangible pension asset. The increase in the pension liability is due to improvements to the U.S. bargaining unit contract ratified in 2000. The 33.9% debt-to-total-capital ratio was higher than the 30.1% at the end of 1999. Debt increased by $64.7 million for the year, from $449.9 million at the end of 1999 to $514.6 million at December 31, 2000. The increase in debt was used primarily to fund increases to working capital and fund capital expenditures. Capital spending in 2000 was slightly lower than 1999’s spending levels, which was curtailed to conserve cash. Shareholders’ equity decreased primarily as a result of the repurchase of common shares under the company’s 1998 common stock purchase plan, payment of dividends to shareholders, which remained at $0.72 per share for the year, and foreign currency translation adjustments related to the company’s foreign units.

25

consolidated Statement of Cash Flows

	Year Ended December 31
2000		1999	1998
(Thousands of dollars) CASH PROVIDED (USED) Operating Activities    Net income    Adjustments to reconcile net income to net cash       provided by operating activities:          Depreciation and amortization          Deferred income tax provision          Common stock issued in lieu of cash to benefit plans          Non-cash portion of impairment and restructuring charges          Changes in operating assets and liabilities: Accounts receivable Inventories Other assets Accounts payable and accrued expenses Foreign currency translation (gain) loss	$ 45,888     151,047 10,585 1,303 16,813   (22,536) (52,566) (172) 4,046 (1,296)	$ 62,624     149,949 20,760 467 -0-   12,390 6,551 13,307 13,291 (1,921)	$ 114,537     139,833 6,935 46,396 -0-   13,037 2,478 (5,046) (27,223) 919
Net Cash Provided by Operating Activities   Investing Activities    Purchases of property, plant and equipment–net    Acquisitions	153,112     (152,506) -	277,418     (164,872) (29,240)	291,866     (237,835) (41,667)
Net Cash Used by Investing Activities   Financing Activities    Cash dividends paid to shareholders    Purchases of treasury shares    Proceeds from issuance of long-term debt    Payments on long-term debt    Short-term debt activity–net	(152,506)     (43,562) (24,149) 3,478 (3,595) 70,865	(194,112)     (44,502) (14,271) 4,076 (20,867) (411)	(279,502)     (44,776) (80,462) 139,666 (23,333) (12,918)
Net Cash Provided (Used) by Financing Activities Effect of exchange rate changes on cash	3,037 (622)	(75,975) 255	(21,823) (45)
Increase (Decrease) In Cash and Cash Equivalents Cash and cash equivalents at beginning of year	3,021 7,906	7,586 320	(9,504) 9,824
Cash and Cash Equivalents at End of Year	$ 10,927	$ 7,906	$ 320

See accompanying Notes to Consolidated Financial Statements on pages 29 through 38.

Management’s Discussion and Analysis of the Statement of Cash Flows

2000 compared to 1999
Cash and cash equivalents increased $3.0 million in 2000. Net cash provided by operating activities in 2000 was $153.1 million compared to $277.4 million in 1999. Cash generated from income in 2000 was used to fund working capital changes and capital expenditures. Accounts receivable used $22.5 million in cash. The increase in inventories required $52.6 million of cash during 2000. Cash was provided by a $4.0 million increase in accounts payable and accrued expenses, which resulted primarily from increases in amounts payable to suppliers. Purchases of property, plant and equipment – net during the twelve months ended December 31, 2000, were $152.5 million compared to $164.9 million in 1999. The company continued to support activities consistent with its strategies to fund growth initiatives and improve the core businesses. The company also used funds during the year to repurchase shares of the company’s common stock and, by November 3, 2000, completed the 1998 common stock purchase plan. During 2000, the company acquired 1,354,000 shares to be held in treasury as authorized under the 1998 plan. Also in November, the company announced board approval of a new 2000 common stock purchase plan. The 2000 common stock purchase plan authorizes the company to buy in the open market or in privately negotiated transactions up to 4 million shares of common stock, which are to be held as treasury shares and used for specified purposes. The company may exercise this authorization until December 31, 2006. The company expects that any cash requirements in excess of cash generated from operating activities (such as those which may be required for potential future acquisitions and affiliations as well as cash contributions to the company’s pension plans) could be met by short-term borrowing and issuance of medium-term notes.

26

Management’s Discussion and Analysis of Other Information

In the second quarter of 2000, the U.S. International Trade Commission (ITC) voted to revoke the industry’s antidumping orders on imports of tapered roller bearings from Japan, Romania and Hungary. The ITC determined that revocation of the antidumping duty orders on tapered roller bearings from those countries was not likely to lead to continuation or recurrence of material injury to the domestic industry within a reasonably foreseeable time. The ITC upheld the antidumping duty order against China. The company has filed an appeal of the ITC’s decision regarding Japan. If, following the revocation of the orders and contrary to the ITC’s finding, injurious dumping from these countries continues or recurs, the improved conditions of trade of tapered roller bearings in the U.S., which resulted from the orders, could deteriorate. If injurious dumping does occur, such dumping could have a material adverse effect on the company’s business, financial condition or results of operations. The company would explore alternatives to remedy this material adverse effect as the law provides for expedited investigations in cases where an order was revoked as a result of this review. The ITC separately extended the antidumping duty orders on ball bearings from Germany, France, Japan and several other countries. These extended orders should continue to provide the company’s Aerospace business with fair competition for these products in the U.S. In 2000, the company decreased its discount rate for U.S.-based pension and postretirement benefit plans from 8.25% to 8.0% to reflect the decrease in year-end interest rates. The company also increased its health care cost trend rate assumptions for its postretirement benefit plans effective on 2001 expense. The expected long-term return on plan assets was increased from 9.25% to 9.5% to be consistent with the expected long-term market returns. Primarily due to plan amendments, the combined expense for U.S.-based pension and postretirement benefits plans is expected to increase by about $24 million in 2001. Changes in short-term interest rates related to three separate funding sources impact the company’s earnings. These sources are commercial paper issued in the United States, floating rate tax-exempt U.S. municipal bonds with a weekly reset mode and short-term bank borrowings at international subsidiaries. If the market rates for short-term borrowings changed by 1% around the globe, the impact would be a change in interest expense of $2.2 million with the corresponding change in income before taxes of the same amount. The company determined this amount by considering the impact of hypothetical interest rates on the company’s borrowing cost, year-end debt balances by category and an estimated impact on the tax-exempt municipal bonds’ interest rates. Fluctuations in the value of the U.S. dollar compared to foreign currencies, predominately in European countries, also impact the company’s earnings. The greatest risk relates to product shipped between the company’s European operations and the United States. Foreign currency forward contracts and options are used to hedge these intracompany transactions. Additionally, hedges are used to cover third-party purchases of product and equipment. As of December 31, 2000, there were $10.9 million of hedges in place. A uniform 10% revaluing of the dollar against all currencies would have resulted in a change of $0.2 million on these hedges. In addition to the direct impact of the hedged amounts, changes in exchange rates also affect the volume of sales or the foreign currency sales price, as competitors’ products become more or less attractive. The Occupational Safety and Health Administration issued a far-reaching and potentially costly final standard on ergonomics on November 14, 2000. It became effective January 13, 2001 with a compliance date for the majority of the requirements of October 14, 2001. The company is in the process of reviewing the standard and developing and/or modifying programs and procedures to comply with the standard. It is not possible at this time to develop any estimate of the cost of compliance. The company continues to protect the environment and comply with environmental protection laws. Additionally, it has invested in pollution control equipment and updated plant operational practices. In 1999, the company committed to becoming certified under the ISO 14001 environmental management system within the next several years. The company believes it has established adequate reserves to cover its environmental expenses and has a well-established environmental compliance audit program, which includes a proactive approach to bringing its domestic and international units to higher standards of environmental performance. This program measures performance against local laws as well as to standards that have been established for all units worldwide. It is difficult to assess the possible effect of compliance with future requirements that differ from existing ones. As previously reported, the company is unsure of the future financial impact to the company that could result from the United States Environmental Protection Agency’s (EPA’s) final rules to tighten the National Ambient Air Quality Standards for fine particulate and ozone. The U.S. Supreme Court is expected to rule by Spring 2001. The company and certain of its U.S. subsidiaries have been designated as potentially responsible parties (PRP’s) by the United States EPA for site investigation and remediation at certain sites under the Comprehensive Environmental Response, Compensation and Liability Act (Superfund). The claims for remediation have been asserted against numerous other entities, which are believed to be financially solvent and are expected to fulfill their proportionate share of the obligation. Management believes any ultimate liability with respect to all pending actions will not materially affect the company’s operations, cash flows or consolidated financial position.

27

consolidated Statement of Shareholders’ Equity

		Common Stock
	Total	Stated Capital	Other Paid-In Capital	Earnings Invested in the Business	Accumulated Other Comprehensive Income	Treasury Stock
(Thousands of dollars) Year Ended December 31, 1998 Balance at January 1, 1998 Net income Foreign currency translation adjustments   (net of income tax of $1,315) Minimum pension liability adjustment   (net of income tax of $2,106) Total comprehensive income Dividends–$0.72 per share Purchase of 3,012,900 shares for treasury Issuance of 1,981,065 shares from treasury(1)	$ 1,032,076 114,537   (8,096)        (3,594) 102,847 (44,776) (80,462) 46,396	$ 53,064	$ 273,873                   (12,717)	$ 749,033 114,537           (44,776)	$ (38,026)     (8,096)   (3,594)	$ (5,868)               (80,462) 59,113
Balance at December 31, 1998	$ 1,056,081	$ 53,064	$ 261,156	$ 818,794	$ (49,716)	$ (27,217)
Year Ended December 31, 1999 Net income Foreign currency translation adjustments   (net of income tax of $2,829) Minimum pension liability adjustment   (net of income tax of $274) Total comprehensive income Dividends–$0.72 per share Purchase of 804,500 shares for treasury Issuance of 152,425 shares from treasury(1)	62,624   (13,952)         (466) 48,206 (44,502) (14,271) 467		(2,869)	62,624           (44,502)	(13,952)   (466)	(14,271) 3,336
Balance at December 31, 1999	$ 1,045,981	$ 53,064	$ 258,287	$ 836,916	$ (64,134)	$ (38,152)
Year Ended December 31, 2000 Net income Foreign currency translation adjustments   (net of income tax of $1,137) Minimum pension liability adjustment   (net of income tax of $301) Total comprehensive income Dividends–$0.72 per share Purchase of 1,354,000 shares for treasury Issuance of 123,068 shares from treasury(1)	45,888   (21,293)           514 25,109 (43,562) (24,149) 1,303		(1,414)	45,888           (43,562)	(21,293)   514	(24,149) 2,717
Balance at December 31, 2000	$ 1,004,682	$ 53,064	$ 256,873	$ 839,242	$ (84,913)	$ (59,584)

(1) Share activity was in conjunction with employee benefit and stock option plans. See accompanying Notes to Consolidated Financial Statements on pages 29 through 38.

28

Notes to consolidated financial statements

1 Significant Accounting Policies

Principles of Consolidation: The consolidated financial statements include the accounts and operations of the company and its subsidiaries. All significant intercompany accounts and transactions are eliminated upon consolidation. Revenue Recognition: The company recognizes revenue when title passes to the customer, which is FOB shipping point except for certain exported goods, which is FOB destination. Revenue relating to services is recognized when services are rendered. Cash Equivalents: The company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Inventories: Inventories are valued at the lower of cost or market, with 77% valued by the last-in, first-out (LIFO) method. If all inventories had been valued at current costs, inventories would have been $140,473,000 and $142,806,000 greater at December 31, 2000 and 1999, respectively. Property, Plant and Equipment: Property, plant and equipment is valued at cost less accumulated depreciation. Provision for depreciation is computed principally by the straight-line method based upon the estimated useful lives of the assets. The useful lives are approximately 30 years for buildings, 5 to 7 years for computer software and 3 to 20 years for machinery and equipment. Costs in Excess of Net Assets of Acquired Businesses: Costs in excess of net assets of acquired businesses (goodwill) are amortized on the straight-line method over 25 years for businesses acquired after 1991 and over 40 years for those acquired before 1991. The carrying value of goodwill is reviewed for recoverability based on the undiscounted cash flows of the businesses acquired over the remaining amortization period. Should the review indicate that goodwill is not recoverable, the company’s carrying value of the goodwill would be reduced to the acquired company’s fair value. In addition, the company assesses long-lived assets for impairment under Financial Accounting Standards Board’s (FASB) Statement of Financial Accounting Standards (SFAS) No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of." Under those rules, goodwill associated with assets acquired in a purchase business combination is included in impairment evaluations when events or circumstances exist that indicate the carrying amount of those assets may not be recoverable. Income Taxes: Deferred income taxes are provided for the temporary differences between the financial reporting basis and tax basis of the company’s assets and liabilities. The company plans to reinvest undistributed earnings of its non-U.S. subsidiaries. The amount of undistributed earnings that is considered to be indefinitely reinvested for this purpose was approximately $34,000,000 at December 31, 2000. Accordingly, U.S. income taxes have not been provided on such earnings. While the amount of any U.S. income taxes on these reinvested earnings – if distributed in the future – is not presently determinable, it is anticipated that they would be reduced substantially by the utilization of tax credits or deductions. Such distributions would be subject to withholding taxes. Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. These estimates and assumptions are reviewed and updated regularly to reflect recent experience. Foreign Currency Translation: Assets and liabilities of subsidiaries, other than those located in highly inflationary countries, are translated at the rate of exchange in effect on the balance sheet date; income and expenses are translated at the average rates of exchange prevailing during the year. The related translation adjustments are reflected as a separate component of accumulated other comprehensive income. Foreign currency gains and losses resulting from transactions and the translation of financial statements of subsidiaries in highly inflationary countries are included in results of operations. The company recorded foreign currency exchange losses of $1,467,000 in 2000, $9,856,000 in 1999 and $1,332,000 in 1998. Earnings Per Share: Earnings per share are computed by dividing net income by the weighted-average number of common shares outstanding during the year. Earnings per share - assuming dilution are computed by dividing net income by the weighted-average number of common shares outstanding adjusted for the dilutive impact of potential common shares for options. Derivative Instruments: In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivatives and Hedging Activities." SFAS No. 133 establishes accounting and reporting standards for derivative instruments, including certain derivative instruments imbedded in other contracts, and hedging activities. It requires recognition of all derivatives as either assets or liabilities on the balance sheet and measurement of those instruments at fair value. SFAS No. 133, as amended, is effective for fiscal years beginning after June 15, 2000. In June 2000, the FASB issued SFAS No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging Activities." This pronouncement amended portions of SFAS No. 133 and will be applied prospectively as the cumulative effect of an accounting change with SFAS No. 133 effective January 1, 2001. The company has completed its review to determine the impact of the new standard on income and equity and has determined the adoption to be insignificant. Reclassifications: Certain amounts reported in the 1999 financial statements have been reclassified to conform to the 2000 presentation.

29

Notes to consolidated financial statements

2 Impairment and Restructuring Charges

It is the company’s policy to recognize restructuring costs in accordance with Emerging Issues Task Force Issue No. 94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)" and the SEC Staff Accounting Bulletin No. 100, "Restructuring and Impairment Charges." Impairment charges are recognized to write down assets to their fair value when assets that are identified have a history of negative operating results or cash flows, have limited or no future strategic use, or when it is probable that the undiscounted cash flows of an asset are less than the current net book value. In March 2000, the company initiated a global restructuring and reorganization to position itself for profitable growth, streamline operations, reduce costs and improve European profitability. Implementation, employee severance, exit costs and non-cash impairment charges of $55,000,000 are expected to be recorded by the end of the first quarter of 2001. Of the $38,870,000 in charges recorded through December 31, 2000, $27,754,000 were impairment and restructuring charges, and $11,116,000 were reorganization charges. The company recorded $7,008,000 of reorganization charges as selling, administrative and general expenses with the remaining $4,108,000 recorded in cost of products sold. Impairment charges of $16,813,000 were primarily the result of the consolidation of the Steel business operations and included $4,000,000 related to abandoned acquisition, affiliation and divestiture efforts by the Steel business. The majority of the restructuring provision of $10,941,000 related to severance costs associated with the termination of 612 operative and administrative positions in Asia, Europe and North America. The separation costs are comprised of severance payments and outplacement benefits associated with the terminations. The consolidation of the company’s European distribution operations experienced start-up problems, which resulted in the suspension of the project in the fourth quarter and resulted in a reversal of expense in the amount of $780,000. Payments charged against the restructuring liability were $7,981,000, resulting in an accrual balance of $2,960,000 at December 31, 2000.

Activity against the restructuring provision is summarized as follows:

	Separation Costs Operations	Separation Costs Administration	Exit Costs	Total
(Thousands of dollars) Restructuring:    Current year provision    Less: Adjustments    Less: Payments	$ 7,619 (780) (4,640)	$ 4,055   (3,315)	$ 47   (26)	$ 11,721 (780) (7,981)
Balance at December 31, 2000	$ 2,199	$ 740	$ 21	$ 2,960

3 Comprehensive Income

Accumulated other comprehensive income consists of the following:

2000		1999	1998
(Thousands of dollars) Foreign currency translation adjustment Minimum pension liability adjustment	$ (78,656) (6,257)	$ (57,363) (6,771)	$ (43,411) (6,305)
	$ (84,913)	$ (64,134)	$ (49,716)

30

4 Acquisitions

In March 1999, the company increased its ownership of Timken India Limited (formerly Tata Timken Limited) from 40% to 80%. Prior to the additional investment, the company accounted for Timken India using the equity method. As a result of the transaction, the Timken India financial position and operating results are consolidated into the company’s financial statements. In December 1998, the company purchased Desford Steel Tubes Ltd. of Leicester, England, to form Timken Desford Steel, a manufacturer of seamless mechanical tubing for bearing, automotive, off-highway and defense applications. During 1998, the company completed the acquisition of Bearing Repair Specialists, an industrial bearing repair business that reconditions or modifies a wide variety of bearing types for industrial customers in the United States and Canada. The total cost of these acquisitions amounted to $29,240,000 in 1999 and $41,667,000 in 1998. A portion of the purchase price has been allocated to the assets and liabilities acquired based on their fair values at the dates of acquisition. The fair value of the assets was $30,425,000 in 1999 and $50,115,000 in 1998; the fair value of liabilities assumed was $9,790,000 in 1999 and $13,026,000 in 1998. The excess of the purchase price over the fair value of the net assets acquired has been allocated to goodwill. All of the acquisitions were accounted for as purchases. The company’s consolidated financial statements include the results of operations of the acquired businesses for the period subsequent to the effective date of these acquisitions. Pro forma results of operations have not been presented because the effect of these acquisitions was not significant. In January 2001, the company announced the buyout of its Chinese joint-venture partner in Yantai Timken Company Limited. This transaction is expected to be completed in the first quarter of 2001.

5 Earnings Per Share

The following table sets forth the reconciliation of the numerator and the denominator of earnings per share and earnings per share - assuming dilution for the years ended December 31:

2000		1999	1998
(Thousands of dollars, except per share data) Numerator:   Net income for earnings per share and earnings per share - assuming     dilution – income available to common shareholders Denominator:   Denominator for earnings per share – weighted-average shares   Effect of dilutive securities:     Stock options and awards – based on the treasury stock method	$ 45,888   60,556,595   166,577	$ 62,624   61,795,162   230,651	$ 114,537   62,244,097   565,672
Denominator for earnings per share - assuming dilution – adjusted   weighted-average shares	60,723,172	62,025,813	62,809,769
Earnings per share	$ 0.76	$ 1.01	$ 1.84
Earnings per share - assuming dilution	$ 0.76	$ 1.01	$ 1.82

31

Notes to consolidated financial statements

6 Financing Arrangements

Long-term debt at December 31, 2000 and 1999 was as follows:

2000		1999
(Thousands of dollars) Fixed-rate Medium-Term Notes, Series A, due at various dates through   May 2028, with interest rates ranging from 6.20% to 7.76% Variable-rate State of Ohio Air Quality and Water Development   Revenue Refunding Bonds, maturing on June 1, 2001     (5.00% at December 31, 2000) Variable-rate State of Ohio Pollution Control Revenue Refunding   Bonds, maturing on July 1, 2003 (5.00% at December 31, 2000) Variable-rate State of Ohio Water Development Revenue   Refunding Bonds, maturing May 1, 2007 (5.00% at December 31, 2000) Variable-rate State of Ohio Water Development Authority Solid Waste   Revenue Bonds, maturing on July 2, 2032 (5.10% at December 31, 2000) Other	$ 252,000     21,700   17,000   8,000   24,000 9,455	$ 252,000     21,700   17,000   8,000   24,000 9,957
Less current maturities	332,155 26,974	332,657 5,314
	$ 305,181	$ 327,343

The aggregate maturities of long-term debt for the five years subsequent to December 31, 2000, are as follows: 2001– $26,974,000; 2002–$36,996,000; 2003–$18,090,000; 2004– $5,871,000; and 2005–$224,000. Interest paid in 2000, 1999 and 1998 approximated $33,000,000, $32,000,000 and $28,000,000, respectively. This differs from interest expense due to timing of payments and interest capitalized of $1,600,000 in 2000; $3,700,000 in 1999; and $4,800,000 in 1998 as a part of major capital additions. The weighted-average interest rate on commercial paper borrowings during the year was 6.5% in 2000, 5.2% in 1999 and 5.6% in 1998. The weighted-average interest rate on short-term debt during the year was 6.3% in 2000 as well as 1999, and 7.4% in 1998. At December 31, 2000, the company had available $223,000,000 through an unsecured $300,000,000 revolving or competitive bid credit agreement with a group of banks. The agreement, which expires in June 2003, bears interest based upon any one of four rates at the company’s option–adjusted prime, Eurodollar, competitive bid Eurodollar, or the competitive bid absolute rate. Also, the company has a shelf registration filed with the Securities and Exchange Commission which, as of December 31, 2000, enables the company to issue up to an additional $200,000,000 of long-term debt securities in the public markets. The company and its subsidiaries lease a variety of real property and equipment. Rent expense under operating leases amounted to $14,719,000, $17,724,000 and $16,934,000 in 2000, 1999 and 1998, respectively. At December 31, 2000, future minimum lease payments for noncancelable operating leases totaled $61,406,000 and are payable as follows: 2001–$12,056,000; 2002–$9,714,000; 2003–$8,385,000 ; 2004–$7,008,000; 2005–$5,516,000; and $18,727,000 thereafter.

7 Financial Instruments

As a result of the company’s worldwide operating activities, it is exposed to changes in foreign currency exchange rates, which affect its results of operations and financial condition. The company and certain subsidiaries enter into forward exchange contracts to manage exposure to currency rate fluctuations primarily related to the purchases of inventory and equipment. The purpose of these foreign currency hedging activities is to minimize the effect of exchange rate fluctuations on business decisions and the resulting uncertainty on future financial results. At December 31, 2000 and 1999, the company had forward foreign exchange contracts, all having maturities of less than one year, with notional amounts of $10,948,000 and $27,393,000, respectively, which approximates their fair value. The forward foreign exchange contracts were primarily entered into by the company’s European subsidiaries to manage Euro, U.S. dollar and British pound exposures. The realized and unrealized gains and losses on these contracts are deferred and included in inventory or property, plant and equipment depending on the transaction. These deferred gains and losses are recognized in earnings when the future sales occur, or through depreciation expense. The carrying value of cash and cash equivalents, accounts receivable, commercial paper, short-term borrowings and accounts payable are a reasonable estimate of their fair value due to the short-term nature of these instruments. The fair value of the company's fixed-rate debt, based on discounted cash flow analysis, was $255,000,000 and $241,000,000 at December 31, 2000 and 1999, respectively. The carrying value of this debt was $270,000,000 and $264,000,000.

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8 Stock Compensation Plans

The company has elected to follow Accounting Principles Board (APB) Opinion No. 25, "Accounting for Stock Issued to Employees," and related interpretations in accounting for its stock options to key associates and directors. Under APB Opinion No. 25, because the exercise price of the company’s stock options equals the market price of the underlying common stock on the date of grant, no compensation expense is recognized. Under the company’s stock option plans, shares of common stock have been made available to grant at the discretion of the Compensation Committee of the Board of Directors to officers and key associates in the form of stock options, stock appreciation rights, restricted shares and deferred shares. In addition, shares can be awarded to directors not employed by the company. The options have a ten-year term and vest in 25% increments annually beginning twelve months after the date of grant. Pro forma information regarding net income and earnings per share is required by SFAS No. 123, and has been determined as if the company had accounted for its associate stock options under the fair value method of SFAS No. 123. The fair value for these options was estimated at the date of grant using a Black-Scholes option pricing model. For purposes of pro forma disclosures, the estimated fair value of the options granted under the plan is amortized to expense over the options’ vesting periods. The pro forma information indicates a decrease in net income of $6,014,000 in 2000; $5,056,000 in 1999; and $3,787,000 in 1998.

Following is the pro forma information and the related assumptions under the Black-Scholes method:

2000		1999	1998
(Thousands of dollars except per share data) Pro forma net income Earnings per share Earnings per share - assuming dilution Assumptions: Risk-free interest rate Dividend yield Expected stock volatility Expected life - years	$ 39,874 $ 0.66 $ 0.66   6.31% 3.01% 0.481 8	$ 57,568 $ 0.93 $ 0.93   5.33% 2.79% 0.444 8	$ 110,750 $ 1.78 $ 1.76   5.74% 2.78% 0.271 8

A summary of activity related to stock options for the above plans is as follows for the years ended December 31:

	2000		1999		1998
	Options	Weighted- Average Exercise Price	Options	Weighted- Average Exercise Price	Options	Weighted- Average Exercise Price
Outstanding - beginning of year Granted Exercised Canceled or expired	4,515,676 1,356,400 (88,761) (62,325)	$22.90 15.88 12.96 21.28	3,526,301 1,186,100 (186,774) (9,951)	$23.73 19.45 16.72 22.13	3,180,136 861,900 (510,635) (5,100)	$20.15 33.35 17.71 21.47
Outstanding - end of year	5,720,990	$21.41	4,515,676	$22.90	3,526,301	$23.73
Options exercisable	2,910,271		2,171,996		1,710,031

The company sponsors a performance target option plan that is contingent upon the company’s common shares reaching specified fair market values. Under the plan, no awards were issued nor was compensation expense recognized during 2000, 1999 or 1998. Exercise prices for options outstanding as of December 31, 2000, range from $12.88 to $33.75; the weighted-average remaining contractual life of these options is 7 years. The estimated weighted-average fair values of stock options granted during 2000, 1999 and 1998 were $7.01, $8.11 and $10.19, respectively. At December 31, 2000, a total of 207,293 restricted stock rights, restricted shares or deferred shares have been awarded under the above plans and are not vested. The company distributed 100,832, 87,206 and 78,831 common shares in 2000, 1999 and 1998, respectively, as a result of awards of restricted stock rights, restricted shares and deferred shares. The number of shares available for future grants for all plans at December 31, 2000, including stock options, is 1,982,514.

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Notes to consolidated financial statements

9 Retirement and Postretirement Benefit Plans

The company sponsors defined contribution retirement and savings plans covering substantially all associates in the United States and certain salaried associates at non-U.S. locations. The company contributes Timken Company common stock to certain plans based on formulas established in the respective plan agreements. At December 31, 2000, the plans had 12,109,175 shares of Timken Company common stock with a fair value of $183,151,000. Company contributions to the plans, including performance sharing, amounted to $14,384,000 in 2000; $14,891,000 in 1999; and $16,380,000 in 1998. The company paid dividends totaling $7,958,000 in 2000; $6,838,000 in 1999; and $5,519,000 in 1998, to plan participants holding common shares. The company and its subsidiaries sponsor several unfunded postretirement plans that provide health care and life insurance benefits for eligible retirees and dependents. Depending on retirement date and associate classification, certain health care plans contain contributions and cost-sharing features such as deductibles and coinsurance. The remaining health care plans and the life insurance plans are noncontributory. The company and its subsidiaries sponsor a number of defined benefit pension plans, which cover many of their associates except those at certain locations who are covered by government plans.

The following tables set forth the change in benefit obligation, change in plan assets, funded status and amounts recognized in the consolidated balance sheet of the defined benefit pension and postretirement benefits as of December 31, 2000 and 1999:

	Defined Benefit Pension Plans		Postretirement Plans
	2000	1999	2000	1999
(Thousands of dollars) Change in benefit obligation Benefit obligation at beginning of year Service cost Interest cost Amendments Actuarial losses (gains) Associate contributions Acquisition International plan exchange rate change Benefits paid	$ 1,451,729 33,328 119,943 76,602 72,869 1,845 -0- (14,890) (99,467)	$ 1,496,111 35,876 103,232 27,514 (135,485) 1,371 12,155 (3,997) (85,048)	$ 466,307 4,309 40,043 8,563 105,987 -0- -0- 74 (36,459)	$ 463,385 4,857 33,525 -0- (833) -0- -0- (109) (34,518)
Benefit obligation at end of year	$ 1,641,959	$ 1,451,729	$ 588,824	$ 466,307
Change in plan assets(1) Fair value of plan assets at beginning of year Actual return on plan assets Associate contributions Company contributions Acquisition International plan exchange rate change Benefits paid	$ 1,457,453 (17,703) 1,845 56,843 -0- (15,288) (99,467)	$ 1,314,158 171,566 1,371 46,673 12,155 (3,422) (85,048)
Fair value of plan assets at end of year	$ 1,383,683	$ 1,457,453
Funded status Projected benefit obligation (in excess of) or less than plan assets Unrecognized net actuarial (gain) loss Unrecognized net asset at transition dates, net of amortization Unrecognized prior service cost (benefit)	$ (258,276) (55,482) (4,219) 168,181	$ 5,724 (261,711) (6,253) 115,066	$ (588,824) 181,173 -0- (23,077)	$ (466,307) 78,708 -0- (35,370)
Accrued benefit cost	$ (149,796)	$ (147,174)	$ (430,728)	$ (422,969)
Amounts recognized in the consolidated balance sheet Accrued benefit liability Intangible asset Minimum pension liability included in accumulated other comprehensive income	$ (248,126) 88,405   9,925	$ (158,754) 840   10,740	$ (430,728) -0-   -0-	$ (422,969) -0-   -0-
Net amount recognized	$ (149,796)	$ (147,174)	$ (430,728)	$ (422,969)

(1) Plan assets are primarily invested in listed stocks and bonds and cash equivalents.

34

Due to plan amendments, changes in plan participant demographics and lower capital market performance, the benefit obligations at December 31, 2000, exceeded the market value of plan assets for the majority of the company’s U.S. based plans. For these plans, the projected benefit obligation was $1,358,892,000; the accumulated benefit obligation was $1,303,026,000, and the fair value of plan assets was $1,100,309,000 at December 31, 2000.

The following table summarizes the assumptions used by the consulting actuary and the related benefit cost information:

	Pension Benefits			Postretirement Benefits
	2000	1999	1998	2000	1999	1998
Assumptions Discount rate Future compensation assumption Expected long-term return on plan assets	8.00% 3% to 4% 9.50%	8.25% 3% to 4% 9.25%	7.00% 3% to 4% 9.25%	8.00%	8.25%	7.00%
Components of net periodic benefit cost (Thousands of dollars) Service cost Interest cost Expected return on plan assets Amortization of prior service cost Recognized net actuarial (gain) loss Amortization of transition asset	$ 33,328 119,943 (116,302) 21,995 (556) (1,002)	$ 35,876 103,232 (102,148) 16,412 1,724 (1,951)	$ 32,441 95,520 (95,083) 16,033 1,646 (2,143)	$ 4,309 40,043 -0- (3,730) 3,670 -0-	$ 4,857 33,525 -0- (4,474) 3,796 -0-	$ 4,562 30,188 -0- (4,489) 544 -0-
Net periodic benefit cost	$ 57,396	$ 53,145	$ 48,414	$ 44,292	$ 37,704	$ 30,805

For measurement purposes, the company assumed a weighted-average annual rate of increase in the per capita cost (health care cost trend rate) for medical benefits of 9.00% for 2000 through 2002 declining gradually to 6.00% in 2006 and thereafter for pre-65 benefits, 6.00% for post-65 benefits for all years, and 15.00% for 2000 through 2002, declining gradually to 6.00% in 2014 and thereafter for prescription drug benefits.

The assumed health care cost trend rate has a significant effect on the amounts reported. A one percentage point increase in the assumed health care cost trend rate would increase the 2000 total service and interest cost components by $2,340,000 and would increase the postretirement benefit obligation by $27,418,000. A one percentage point decrease would provide corresponding reductions of $2,122,000 and $24,800,000, respectively.

10 Research and Development

Expenditures committed to research and development amounted to approximately $52,000,000 in 2000; $50,000,000 in 1999; and $48,000,000 in 1998. Such expenditures may fluctuate from year to year depending on special projects and needs.

11 Contingencies

The company and certain of its U.S. subsidiaries have been designated as potentially responsible parties (PRPs) by the United States Environmental Protection Agency for site investigation and remediation under the Comprehensive Environmental Response, Compensation and Liability Act (Superfund) with respect to certain sites. The claims for remediation have been asserted against numerous other entities which are believed to be financially solvent and are expected to fulfill their proportionate share of the obligation. In addition, the company is subject to various lawsuits, claims and proceedings which arise in the ordinary course of its business. The company accrues costs associated with environmental and legal matters when they become probable and reasonably estimable. Environmental costs include compensation and related benefit costs associated with associates expected to devote significant amounts of time to the remediation effort and post-monitoring costs. Accruals are established based on the estimated undiscounted cash flows to settle the obligations and are not reduced by any potential recoveries from insurance or other indemnification claims. Management believes that any ultimate liability with respect to these actions, in excess of amounts provided, will not materially affect the company’s operations, cash flows or consolidated financial position.

35

Notes to consolidated financial statements

12 Segment Information

Description of types of products and services from which each reportable segment derives its revenues
The company has two reportable segments: Bearings and Steel. The company’s Bearings business sells directly to customers in the automotive, railroad, aerospace, industrial and service replacement markets. The company’s tapered roller bearings
are used in a wide variety of products including passenger cars, trucks, railroad cars and locomotives, aircraft wheels, machine tools, rolling mills, and farm and construction equipment. Super precision bearings are used in aircraft, missile guidance systems, computer peripherals and medical instruments. Other bearing products manufactured by the company include cylindrical,
spherical, straight and ball bearings for industrial markets. Steel products include steels of intermediate alloy, vacuum processed alloys, tool steel and some carbon grades. These are available in a wide range of solid and tubular sections with a variety of finishes. The company also manufactures custom-made steel products, including precision steel components. A significant portion of the company’s steel is consumed in its bearing operations. In addition, sales are made to other anti-friction bearing companies and to aircraft, automotive, forging, tooling, oil and gas drilling industries and steel service centers. Tool steels are sold through the company’s distribution facilities. Measurement of segment profit or loss and segment assets
The company evaluates performance and allocates resources based on return on capital and profitable growth. Specifically, the company measures segment profit or loss based on earnings before interest and income taxes (EBIT). The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies. Intersegment sales and transfers are recorded at values based on market prices, which creates intercompany profit on intersegment sales or transfers.
Factors used by management to identify the enterprise’s reportable segments
The company’s reportable segments are business units that offer different products. Each reportable segment is managed separately because each manufactures and distributes distinct products with different production processes.
Geographical entities as defined here are not reflective of how the Bearings and Steel businesses are operated by the company. Europe information presented reflects shipments from European locations. The information does not include product manufactured by facilities located outside Europe and shipped directly to customers located in Europe.

Geographic Financial Information	United States	Europe(1)	Other Countries	Consolidated
(Thousands of dollars) 2000 Net sales Impairment and restructuring Income (loss) before income taxes Non-current assets	$ 2,062,306 18,073 84,988 1,391,080	$ 361,649 6,645 (35,065)(1) 204,135	$ 219,053 3,036 20,674 70,348	$ 2,643,008 27,754 70,597 1,665,563
1999 Net sales Impairment and restructuring Income (loss) before income taxes Non-current assets	$ 1,922,092 -0- 112,556 1,303,980	$ 364,380 -0- (28,936) 240,020	$ 208,562 -0- 15,371 63,792	$ 2,495,034 -0- 98,991 1,607,792
1998 Net sales Impairment and restructuring Income before income taxes Non-current assets	$ 2,118,529 -0- 172,388 1,319,043	$ 373,877 -0- 10,757 254,056	$ 187,435 -0- 2,205 26,595	$ 2,679,841 -0- 185,350 1,599,694

(1) Excluding $6,645,000 of impairment and restructuring costs and reorganization costs of $3,444,000, Europe’s
loss before income taxes equals $24,976,000.

36

Segment Financial Information	2000	1999	1998
(Thousands of dollars) Bearings Net sales to external customers Depreciation and amortization Impairment and restructuring charges Earnings before interest and taxes Interest expense Interest income Capital expenditures Assets employed at year-end	$ 1,763,325 83,541 12,642 78,899 (25,430) 3,254 109,922 1,577,307	$ 1,759,871 83,255 -0- 80,548 (21,817) 3,018 116,569 1,476,545	$ 1,797,745 80,175 -0- 133,318 (22,425) 2,086 145,613 1,514,780
Steel Net sales to external customers Intersegment sales Depreciation and amortization Impairment and restructuring charges Earnings before interest and taxes Interest expense Interest income Capital expenditures Assets employed at year-end	$ 879,683 196,500 67,506 15,112 19,349 (12,034) 5,767 52,795 986,798	$ 735,163 211,870 66,694 -0- 44,039 (9,347) 4,017 56,653 964,773	$ 882,096 200,911 59,658 -0- 73,825 (7,714) 4,537 113,008 935,251
Total Net sales to external customers Depreciation and amortization Impairment and restructuring charges Earnings before interest and taxes Interest expense Interest income Capital expenditures Assets employed at year-end	$ 2,643,008 151,047 27,754 98,248 (37,464) 9,021 162,717 2,564,105	$ 2,495,034 149,949 -0- 124,587 (31,164) 7,035 173,222 2,441,318	$ 2,679,841 139,833 -0- 207,143 (30,139) 6,623 258,621 2,450,031
Income Before Income Taxes Total EBIT for reportable segments Interest expense Interest income Intersegment adjustments	$ 98,248 (31,922) 3,479 792	$ 124,587 (27,225) 3,096 (1,467)	$ 207,143 (26,502) 2,986 1,723
Income before income taxes	$ 70,597	$ 98,991	$ 185,350

Segment interest expense and income include intersegment amounts. Both intersegment interest expense and income of $5,542,000, $3,939,000 and $3,637,000 incurred in 2000, 1999 and 1998, respectively, were deducted from combined segment amounts to reconcile consolidated amounts.

37

Notes to consolidated financial statements

13 Income Taxes

The provision (credit) for income taxes consisted of the following:

	2000		1999		1998
	Current	Deferred	Current	Deferred	Current	Deferred
(Thousands of dollars) United States:    Federal    State and local Foreign	$ (1,093) 1,775 13,442	$ 13,093 (995) (1,513)	$ 9,988 (552) 6,171	$ 20,884 2,835 (2,959)	$ 50,056 6,212 7,610	$ 5,173 (1,384) 3,146
	$ 14,124	$ 10,585	$ 15,607	$ 20,760	$ 63,878	$ 6,935

The company made income tax payments of approximately $17,520,000 in 2000; $14,760,000 in 1999; and $62,190,000 in 1998. Taxes paid differ from current taxes provided, primarily due to the timing of payments.

The effect of temporary differences giving rise to deferred tax assets and liabilities at December 31, 2000 and 1999 was as follows:

2000		1999
(Thousands of dollars) Deferred tax assets:    Accrued postretirement benefits cost    Accrued pension cost    Benefit accruals    Tax loss and credit carryforwards    Other–net    Valuation allowance	$ 159,014 31,920 25,603 16,439 12,960 (18,084)	$ 156,777 27,949 24,051 15,041 17,160 (15,041)
Deferred tax liability–depreciation	227,852 (196,500)	225,937 (192,378)
Net deferred tax asset	$ 31,352	$ 33,559

Following is the reconciliation between the provision for income taxes and the amount computed by applying U.S. federal income tax rate of 35% to income before taxes:

2000		1999	1998
(Thousands of dollars) Income tax at the statutory federal rate Adjustments:    State and local income taxes, net of federal tax benefit    Tax on foreign remittances    Non-deductible unrealized exchange losses    Foreign tax credits    Losses without current tax benefits    Settlements and claims for prior years    Valuation allowance     Other items	$ 24,709   507 1,617 587 (2,702) 5,177 (5,125) (1,402) 1,341	$ 34,647   1,484 1,216 1,548 (2,205) -0- -0- -0- (323)	$ 64,873   3,138 -0- -0- -0- 2,307 -0- -0- 495
Provision for income taxes	$ 24,709	$ 36,367	$ 70,813
Effective income tax rate	35%	37%	38%

38

Report of Independent Auditors

To the Board of Directors and Shareholders of
The Timken Company

We have audited the accompanying consolidated balance sheets of The Timken Company and subsidiaries as of December 31, 2000 and 1999, and the related consolidated statements of income, shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2000. These financial statements are the responsibility of the company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of The Timken Company and subsidiaries at December 31, 2000 and 1999 and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2000, in conformity with accounting principles generally accepted in the United States. Ernst & Young LLP
Canton, Ohio
February 1, 2001

Forward-Looking Statements

The statements set forth in this annual report that are not historical in nature are forward-looking. In particular the Corporate Profile on pages 16 through 18 and Management’s Discussion and Analysis on pages 20 through 27 contain numerous forward-looking statements. The company cautions readers that actual results may differ materially from those projected or implied in forward-looking statements made by or on behalf of the company due to a variety of important factors, such as: a) changes in world economic conditions. This includes, but is not limited to, the potential instability of governments and legal systems in countries in which the company conducts business and significant changes in currency valuations. b) the effects of changes in customer demand on sales, product mix and prices. This includes the effects of customer strikes, the impact of changes in industrial business cycles and whether conditions of fair trade continue in the U.S. market, in light of the ITC voting in second quarter 2000 to revoke the antidumping orders on imports of tapered roller bearings from Japan, Romania and Hungary. c) competitive factors, including changes in market penetration, 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. d) changes in operating costs. This includes the effect of changes in the company's manufacturing processes; changes in costs associated with varying levels of operations; changes resulting from inventory management and cost reduction initiatives and different levels of customer demands; the effects of unplanned work stoppages; changes in the cost of labor and benefits; and the cost and availability of raw materials and energy. e) the success of the company's operating plans, including its ability to achieve the benefits from its global restructuring as well as its ongoing continuous improvement and rationalization programs; its ability to integrate acquisitions into company operations; the ability of recently acquired companies to achieve satisfactory operating results; its ability to maintain appropriate relations with unions that represent company associates in certain locations in order to avoid disruptions of business and its ability to successfully implement its new organizational structure. f) unanticipated litigation, claims or assessments. This includes, but is not limited to, claims or problems related to product warranty and environmental issues. g) changes in worldwide financial markets to the extent they (1) affect the company's ability or costs to raise capital, (2) have an impact on the overall performance of the company's pension fund investments and (3) cause changes in the economy which affect customer demand.

39

Summary of Operations and other comparative data

(Thousands of dollars, except per share data)

	2000	1999	1998	1997
Statements of Income Net sales:    Bearings    Steel	$ 1,763,325 879,683	$ 1,759,871 735,163	$ 1,797,745 882,096	$ 1,718,876 898,686
Total net sales	2,643,008	2,495,034	2,679,841	2,617,562
Cost of products sold Selling, administrative and general expenses Impairment and restructuring charges Operating income (loss) Earnings before interest and taxes (EBIT) Interest expense Income (loss) before income taxes Provisions for income taxes (credit) Income (loss) before cumulative effect of    accounting changes Net income (loss)	2,142,135 367,499 27,754 105,620 99,040 31,922 70,597 24,709   45,888 $ 45,888	2,002,366 359,910 -0- 132,758 123,120 27,225 98,991 36,367   62,624 $ 62,624	2,098,186 356,672 -0- 224,983 208,866 26,502 185,350 70,813   114,537 $ 114,537	2,005,374 332,419 -0- 279,769 286,766 21,432 266,592 95,173   171,419 $ 171,419
Balance Sheets Inventory Current assets Working capital Property, plant and equipment   (less depreciation) Total assets Total debt Total liabilities Shareholders’ equity	$ 489,549 898,542 311,090   1,363,772 2,564,105 514,064 1,559,423 $ 1,004,682	$ 446,588 833,526 348,455   1,381,474 2,441,318 449,890 1,395,337 $ 1,045,981	$ 457,246 850,337 359,914   1,349,539 2,450,031 469,398 1,393,950 $ 1,056,081	$ 445,853 855,171 275,607   1,220,516 2,326,550 359,431 1,294,474 $ 1,032,076
Other Comparative Data Net income (loss)/Total assets Net income (loss)/Net sales EBIT/Beginning invested capital (1) Inventory days (FIFO) Net sales per associate (2) Capital expenditures Depreciation and amortization Capital expenditures/Depreciation Dividends per share Earnings per share (3) Earnings per share - assuming dilution (3) Debt to total capital Number of associates at year-end Number of shareholders (4)	1.8% 1.7% 4.7% 108.5 $ 127.9 $ 162,717 $ 151,047 112.4% $ 0.72 $ 0.76 $ 0.76 33.9% 20,474 42,661	2.6% 2.5% 5.6% 108.4 $ 119.1 $ 173,222 $ 149,949 120.3% $ 0.72 $ 1.01 $ 1.01 30.1% 20,856 42,907	4.7% 4.3% 10.5% 109.4 $ 127.5 $ 258,621 $ 139,833 192.5% $ 0.72 $ 1.84 $ 1.82 30.8% 21,046 45,942	7.4% 6.5% 16.1% 111.5 $ 130.5 $ 229,932 $ 134,431 177.3% $ 0.66 $ 2.73 $ 2.69 25.8% 20,994 46,394

(1)EBIT/Beginning invested capital, a type of return on asset ratio, is used internally to measure the company’s
performance. In broad terms, invested capital is total assets minus non-interest-bearing current liabilities.
(2)Based on the average number of associates employed during the year.

40

1996	1995	1994	1993	1992	1991
$ 1,598,040 796,717	$ 1,524,728 705,776	$ 1,312,323 618,028	$ 1,153,987 554,774	$ 1,169,035 473,275	$ 1,128,972 518,453
2,394,757	2,230,504	1,930,351	1,708,761	1,642,310	1,647,425
1,828,394 319,458 -0- 246,905 242,304 17,899 225,259 86,322   138,937 $ 138,937	1,723,463 304,046 -0- 202,995 197,957 19,813 180,174 67,824   112,350 $ 112,350	1,514,098 283,727 -0- 132,526 134,674 24,872 111,323 42,859   68,464 $ 68,464	1,369,711 276,928 48,000 14,122 7,843 29,619 (20,919) (3,250)   (17,669) $ (271,932)	1,300,744 299,305 -0- 42,261 40,606 28,660 13,431 8,979   4,452 $ 4,452	1,315,290 300,274 41,000 (9,139) (16,724) 26,673 (41,950) (6,263)   (35,687) $ (35,687)
$ 419,507 793,633 265,685   1,094,329 2,071,338 302,665 1,149,110 $ 922,228	$ 367,889 710,258 247,895   1,039,382 1,925,925 211,232 1,104,747 $ 821,178	$ 332,304 657,180 178,5560   1,030,451 1,858,734 279,519 1,125,843 $ 732,891	$ 299,783 586,384 153,971   1,024,664 1,789,719 276,476 1,104,407 $ 685,312	$ 310,947 556,017 165,553   1,049,004 1,738,450 320,515 753,387 $ 985,063	$ 320,076 562,496 148,950   1,058,872 1,759,139 273,104 740,168 $ 1,018,971
6.7% 5.8% 15.1% 117.5 $ 132.4 $ 155,925 $ 126,457 127.0% $ 0.60 $ 2.21 $ 2.19 24.7% 19,130 31,813	5.8% 5.0% 12.6% 112.2 $ 134.2 $ 131,188 $ 123,409 109.1% $ 0.555 $ 1.80 $ 1.78 20.5% 17,034 26,792	3.7% 3.5% 9.0% 118.0 $ 119.9 $ 119,656 $ 119,255 102.6% $ 0.50 $ 1.11 $ 1.10 27.6% 16,202 49,968	(15.2)% (15.9)% 0.5% 122.5 $ 104.5 $ 92,940 $ 118,403 80.2% $ 0.50 $ (0.29) $ (0.29) 28.7% 15,985 28,767	0.3% 0.3% 2.5% 137.8 $ 95.3 $ 139,096 $ 114,433 124.4% $ 0.50 $ 0.07 $ 0.07 24.5% 16,729 31,395	(2.0)% (2.2)% (1.0)% 139.9 $ 90.0 $ 144,678 $ 109,252 135.6% $ 0.50 $ (0.60) $ (0.60) 21.1% 17,740 26,048

(3)Based on the average number of shares outstanding during the year and excludes the cumulative effect of accounting changes in 1993, which related to the adoption of FAS No. 106, 109 and 112.
(4)Includes an estimated count of shareholders having common stock held for their accounts by banks, brokers and trustees for benefit plans.

41

APPENDIX TO EXHIBIT 13

On page 1 of the printed document, three bar charts were shown which contain the following information:

(1)	Net Sales ($ Millions)
	1996 1997 1998 1999 2000	2,395 2,618 2,680 2,495 2,643
(2)	Gross Profit ($ Thousands)
	1996 1997 1998 1999 2000	566,383 612,188 581,655 492,668 500,873
(3)	Inventory Days
	1991 1994 1997 2000	139.9 118.0 111.5 108.5

On page 37 of the printed document, three pie charts were shown that contain the following information:

(1)	Timken Net Sales to Customers
	Bearings Steel	67% 33%
(2)	Timken Net Sales by Geographic Area
	United States Europe Other	78% 14% 8%
(3)	Steel Net Sales - Total
	Customers Intersegment	82% 18%

On page 40 of the printed document, two bar charts were shown that contain the following information:

(1)	Total Net Sales to Customers (Billions of dollars)
		Bearings	Steel
	1991 1992 1993 1994 1995 1996 1997 1998 1999 2000	1.129 1.169 1.154 1.312 1.525 1.598 1.719 1.798 1.760 1.763	0.518 0.473 0.555 0.618 0.706 0.797 0.899 0.882 0.735 0.880
(2)	Return on Net Sales*
		Operating Income (Loss)	Income(Loss)
	1991 1992 1993 1994 1995 1996 1997 1998 1999 2000	(0.6)% 2.6% 0.8% 6.9% 9.1% 10.3% 10.7% 8.4% 5.3% 4.0%	(2.2)% 0.3% (1.0)% 3.5% 5.0% 5.8% 6.5% 4.3% 2.5% 1.7%
	*Before cumulative effect of accounting changes

On page 41 of the printed document, two bar charts were shown that contain the following information:

(1)	Earnings* and Dividends per Share
		Earnings Per Share	Dividends Per Share
	1991 1992 1993 1994 1995 1996 1997 1998 1999 2000	(0.60) 0.07 (0.29) 1.10 1.78 2.19 2.69 1.82 1.01 0.76	0.500 0.500 0.500 0.500 0.555 0.600 0.660 0.720 0.720 0.720
	*Assuming dilution and before cumulative effect of accounting changes
(2)	EBIT/Beginning Invested Capital
	1991 1992 1993 1994 1995 1996 1997 1998 1999 2000	(1.0)% 2.5% 0.5% 9.0% 12.6% 15.1% 16.1% 10.5% 5.6% 4.7%

EX-21

     Exhibit 21.  Subsidiaries of the Registrant
     ___________________________________________

     The Timken Company has no parent company.

     The active subsidiaries of the Company (all of which are included
     in the consolidated financial statements of the Company and its
     subsidiaries) are as follows:
                                                     Percentage of
                                                     voting securities
                                 State or sovereign  owned directly
                                 power under laws    or indirectly
     Name                        of which organized  by Company
     __________________________________________________________________
     Timken Aerospace & Super
       Precision Bearings             Delaware              100%
     Timken Aerospace & Super
       Precision Bearings-Europa B.V. Netherlands           100%
     Timken Aerospace & Super
       Precision Bearings-
       Singapore Pte. Ltd.            Singapore             100%
     Timken Aerospace & Super
       Precision Bearings-UK, Ltd.    England               100%
     Australian Timken Proprietary,
       Limited                        Victoria, Australia   100%
     Timken do Brasil
       Comercio e Industria, Ltda.    Sao Paulo, Brazil     100%
     British Timken Limited           England               100%
     Canadian Timken, Limited         Ontario, Canada       100%
     Timken Communications Company    Ohio                  100%
     Timken Desford Steel Limited     England               100%
     EDC, Inc.                        Ohio                  100%
     Timken Engineering and Research -
       India Private Limited          India                 100%
     Timken Espana, S.L.              Spain                 100%
     Timken Europa GmbH               Germany               100%
     Timken Europe B.V.               Netherlands           100%
     Timken Finance Europe B.V.       Netherlands           100%
     Handpiece Headquarters Corp.     Delaware              100%
     Timken India Limited             India                  80%
     Timken Italia, S.R.L.            Italy                 100%
     Timken Latrobe Steel             Pennsylvania          100%
     Timken Latrobe Steel
       Distribution                   Delaware              100%
     Timken Latrobe Steel-Europe Ltd. England               100%
     Timken de Mexico S.A. de C.V.    Mexico                100%
     MPB Export Corporation           Delaware              100%
     Nihon Timken K.K.                Japan                 100%
     Timken Polska Sp.z.o.o.          Poland                100%
     Rail Bearing Service Corporation Virginia              100%
     Timken Romania S.A.              Romania                92%
     The Timken Corporation           Ohio                  100%
     The Timken Service & Sales Co.   Ohio                  100%
     Timken Servicios Administrativos
       S.A. de C.V.                   Mexico                100%
     Timken Singapore Pte. Ltd.       Singapore             100%


     Exhibit 21.  Subsidiaries of the Registrant (cont).
     _______________________________________________

                                                     Percentage of
                                                     voting securities
                                 State or sovereign  owned directly
                                 power under laws    or indirectly
     Name                        of which organized  by Company
     __________________________________________________________________
     Timken South Africa (Pty.) Ltd.  South Africa          100%
     Timken de Venezuela C.A.         Venezuela             100%
     Yantai Timken Company Limited    China                 100%

     The Company also has a number of inactive subsidiaries which were
     incorporated for name-holding purposes and a foreign sales
     corporation subsidiary.

EX-23

                                Exhibit 23
                      Consent of Independent Auditors

We consent to the incorporation by reference of our report dated February 1,
2001, with respect to the consolidated financial statements and schedule of
The Timken Company included in this Annual Report (Form 10-K) for the year
ended December 31, 2000, in the following Registration Statements and in
the related Prospectuses:

Registration                                                       Filing
   Number           Description of Registration Statement           Date

  2-97340     1985 Incentive Plan of The Timken Company -    November 19, 1990
              Post-effective Amendment No. 1 to Form S-8

333-17503     The Timken Company Dividend Reinvestment        December 9, 1996
              Plan - Form S-3

333-41155     OH&R Investment Plan - Form S-8                November 26, 1997

333-43847     The Timken Company International Stock           January 7, 1998
              Ownership Plan - Form S-8

333-45753     Rail Bearing Service Employee Savings           February 6, 1998
              Plan - Form S-8

333-45891     $300,000,000 Medium-Term Notes, Series            April 23, 1998
              A - Amendment No. 4 to Form S-3

333-62481     The Company Savings Plan for the Employees       August 28, 1998
              of Timken France - Form S-8

333-66907     The MPB Employees' Savings Plan - Form S-8      November 6, 1998

333-69129     The Timken Company - Latrobe Steel Company      December 17,1998
              Savings and Investment Pension Plan -
              Form S-8

333-35154     The Timken Company Long-Term Incentive Plan        April 19,2000
              - Form S-8

333-35152     The Hourly Pension Investment Plan - Form S-8      April 19,2000

333-52866     Voluntary Investment Pension Plan for Hourly   December 28, 2000
              Employees of The Timken Company - Form S-8

                                                 ERNST & YOUNG LLP
Canton, Ohio
March 28, 2001

EX-24

                                  EXHIBIT 24
                               POWER OF ATTORNEY

         Each of the undersigned Directors and/or Officers of The Timken
     Company, an Ohio corporation (the "Company"), hereby constitutes and
     appoints W. R. Timken, Jr., Gene E. Little and William R. Burkhart,
     and each of them, his true and lawful attorney-in-fact, with full power
     of substitution and resubstitution, for him and in his name, place
     and stead, to sign on his behalf as a Director and/or Officer of the
     Company, an Annual Report pursuant to Section 13 or 15(d) of the
     Securities Exchange Act of 1934, as amended, on Form 10-K for the
     fiscal year ended December 31, 2000 and to sign any and all amendments
     to such Annual Report, and to file the same, with all exhibits thereto,
     and any other documents in connection therewith, with the Securities
     and Exchange Commission, granting unto said attorney-in-fact full power
     and authority to do and perform any and all other acts and deeds
     whatsoever that may be necessary or required in connection with the
     foregoing, as fully to all intents and purposes as he might or could
     do in person, hereby ratifying and confirming all that said attorney-
     in-fact may lawfully do or cause to be done by virtue thereof.

          EXECUTED this 2nd day of February, 2001.

     /s/ Stanley C. Gault           /s/ John M. Timken, Jr.
     ____________________________   _____________________________
     Stanley C. Gault, Director     John M. Timken, Jr., Director

     /s/ J. Clayburn LaForce, Jr.   /s/ Ward J. Timken
     ____________________________   _____________________________
     J. Clayburn LaForce, Jr.,      Ward J. Timken, Director and
     Director                       Vice President

     /s/ James W. Griffith          /s/ W. R. Timken, Jr.
     ____________________________   _____________________________
     James W. Griffith, Director    W. R. Timken, Jr., Director
     and President and Chief        and Chairman and Chief
     Operating Officer              Executive Officer

     /s/ Gene E. Little             /s/ Joseph F. Toot, Jr.
     ____________________________   _____________________________
     Gene E. Little, Senior Vice    Joseph F. Toot, Jr., Director
     President - Finance
     (Principal Financial
      Accounting Officer

     /s/ John A. Luke, Jr.          /s/ Martin D. Walker
     ____________________________   _____________________________
     John A. Luke, Jr., Director    Martin D. Walker, Director

     /s/ Robert W. Mahoney          /s/ Jacqueline F. Woods
     ____________________________   _____________________________
     Robert W. Mahoney, Director    Jacqueline F. Woods, Director

     /s/ Jay A. Precourt
     ____________________________
     Jay A. Precourt, Director