10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2011

OR

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

For the transition period from                      to                     

Commission file number: 1-1169

THE TIMKEN COMPANY

(Exact name of registrant as specified in its charter)

OHIO	34-0577130
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1835 Dueber Ave., SW, Canton, OH	44706-2798
(Address of principal executive offices)	(Zip Code)

330.438.3000

(Registrant’s telephone number, including area code)

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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer þ Accelerated filer o Non-accelerated filer o (Do not check if a smaller reporting company) Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding at June 30, 2011
Common Stock, without par value	98,144,509 shares

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION
	Item 1. Financial Statements
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 3. Quantitative and Qualitative Disclosures about Market Risk
	Item 4. Controls and Procedures
PART II. OTHER INFORMATION
	Item 1. Legal Proceedings
	Item 1A. Risk Factors
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
	Item 6. Exhibits
SIGNATURES
EX-10.1
EX-12
EX-31.1
EX-31.2
EX-32
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

THE TIMKEN COMPANY AND SUBSIDIARIES

Consolidated Statements of Income

(Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
(Dollars in millions, except per share data)
Net sales	$	1,329.6		$	1,011.4		$	2,583.7		$	1,925.1
Cost of products sold		979.1			743.1			1,899.9			1,434.1
Gross Profit		350.5			268.3			683.8			491.0
Selling, general and administrative expenses		153.7			140.7			304.0			273.7
Impairment and restructuring charges		6.2			1.0			7.3			6.5
Operating Income		190.6			126.6			372.5			210.8
Interest expense		(9.3	)		(10.0	)		(19.1	)		(19.6	)
Interest income		1.4			0.9			2.9			1.5
Other income (expense), net		1.1			2.7			(1.3	)		2.1
Income From Continuing Operations Before Income Taxes		183.8			120.2			355.0			194.8
Provision for income taxes		61.5			38.2			118.9			84.1
Income From Continuing Operations		122.3			82.0			236.1			110.7
Income from discontinued operations, net of income taxes		—			4.2			—			4.5
Net Income		122.3			86.2			236.1			115.2
Less: Net income attributable to noncontrolling interest		0.8			0.6			1.9			1.0
Net Income Attributable to The Timken Company	$	121.5		$	85.6		$	234.2		$	114.2
Amounts Attributable to The Timken Company’s Common Shareholders:
Income from continuing operations, net of income taxes	$	121.5		$	81.4		$	234.2		$	109.7
Income from discontinued operations, net of income taxes		—			4.2			—			4.5
Net Income Attributable to The Timken Company	$	121.5		$	85.6		$	234.2		$	114.2
Net Income per Common Share Attributable to The Timken Company’s Common Shareholders
Earnings per share — Continuing Operations	$	1.24		$	0.84		$	2.39		$	1.13
Earnings per share — Discontinued Operations		—			0.04			—			0.05
Basic earnings per share	$	1.24		$	0.88		$	2.39		$	1.18
Diluted earnings per share — Continuing Operations	$	1.22		$	0.84		$	2.36		$	1.13
Diluted earnings per share — Discontinued Operations		—			0.04			—			0.04
Diluted earnings per share	$	1.22		$	0.88		$	2.36		$	1.17
Dividends per share	$	0.20		$	0.13		$	0.38		$	0.22

See accompanying Notes to the Consolidated Financial Statements.

2

Consolidated Balance Sheets

	(Unaudited)
	June 30,			December 31,
	2011			2010
(Dollars in millions, except share data)
ASSETS
Current Assets
Cash and cash equivalents	$	632.8		$	877.1
Restricted cash		4.8			—
Accounts receivable, less allowances: 2011 - $21.8 million; 2010 - $27.6 million		718.8			516.6
Inventories, net		928.9			828.5
Deferred income taxes		100.5			100.4
Deferred charges and prepaid expenses		12.4			11.3
Other current assets		72.6			65.3
Total Current Assets		2,470.8			2,399.2
Property, Plant and Equipment — Net		1,243.1			1,267.7
Other Assets
Goodwill		226.5			224.4
Other intangible assets		124.2			129.2
Deferred income taxes		68.0			121.5
Other non-current assets		42.5			38.4
Total Other Assets		461.2			513.5
Total Assets	$	4,175.1		$	4,180.4
LIABILITIES AND EQUITY
Current Liabilities
Short-term debt	$	22.9		$	22.4
Accounts payable		314.6			263.5
Salaries, wages and benefits		203.1			233.4
Income taxes payable		23.5			14.0
Deferred income taxes		0.9			0.7
Other current liabilities		183.5			176.3
Current portion of long-term debt		7.4			9.6
Total Current Liabilities		755.9			719.9
Non-Current Liabilities
Long-term debt		490.6			481.7
Accrued pension cost		154.0			394.5
Accrued postretirement benefits cost		448.7			531.2
Deferred income taxes		6.2			6.0
Other non-current liabilities		113.4			105.3
Total Non-Current Liabilities		1,212.9			1,518.7
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) (2011 - 98,375,135 shares; 2010 - 98,153,317 shares)
Stated capital		53.1			53.1
Other paid-in capital		883.2			881.7
Earnings invested in the business		1,823.5			1,626.4
Accumulated other comprehensive loss		(559.4	)		(624.7	)
Treasury shares at cost (2011 - 230,626 shares; 2010 - 350,201 shares)		(11.7	)		(11.5	)
Total Shareholders’ Equity		2,188.7			1,925.0
Noncontrolling interest		17.6			16.8
Total Equity		2,206.3			1,941.8
Total Liabilities and Equity	$	4,175.1		$	4,180.4

See accompanying Notes to the Consolidated Financial Statements.

3

Consolidated Statements of Cash Flows

(Unaudited)

	Six Months Ended
	June 30,
	2011			2010
(Dollars in millions)
CASH PROVIDED (USED)
Operating Activities
Net income attributable to The Timken Company	$	234.2		$	114.2
Earnings from discontinued operations		—			(4.5	)
Net income attributable to noncontrolling interest		1.9			1.0
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		93.8			95.2
Impairment charges		3.2			—
(Gain) loss on sale of assets		(0.6	)		2.3
Gain on divestiture		(0.5	)		—
Deferred income tax provision		42.2			17.1
Stock-based compensation expense		9.2			8.5
Pension and other postretirement expense		37.2			45.9
Pension and other postretirement benefit contributions and payments		(331.8	)		(133.6	)
Changes in operating assets and liabilities:
Accounts receivable		(191.7	)		(103.8	)
Inventories		(86.6	)		(45.7	)
Trade accounts payable		46.9			67.5
Other accrued expenses		(38.8	)		15.4
Income taxes		19.8			66.1
Other — net		(1.3	)		13.9
Net Cash (Used) Provided by Operating Activities — Continuing Operations		(162.9	)		159.5
Net Cash Provided by Operating Activities — Discontinued Operations		—			4.5
Net Cash (Used )Provided By Operating Activities		(162.9	)		164.0
Investing Activities
Capital expenditures		(59.6	)		(39.0	)
Proceeds from disposals of property, plant and equipment		5.2			0.5
Divestitures		4.8			—
Investments in short-term marketable securities		(13.3	)		—
Other		1.9			1.1
Net Cash Used by Investing Activities		(61.0	)		(37.4	)
Financing Activities
Cash dividends paid to shareholders		(37.1	)		(21.3	)
Net proceeds from common share activity		23.2			19.4
Purchase of treasury shares — net		(25.3	)		(29.2	)
Proceeds from issuance of long-term debt		9.2			11.0
Payments on long-term debt		(3.1	)		(9.0	)
Short-term debt activity — net		0.1			(20.8	)
Increase in restricted cash		(4.8	)		—
Other		(4.1	)		—
Net Cash Used by Financing Activities		(41.9	)		(49.9	)
Effect of exchange rate changes on cash		21.5			(36.0	)
(Decrease) Increase In Cash and Cash Equivalents		(244.3	)		40.7
Cash and cash equivalents at beginning of year		877.1			755.5
Cash and Cash Equivalents at End of Period	$	632.8		$	796.2

See accompanying Notes to the Consolidated Financial Statements.

4

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(Dollars in millions, except share and per share data)

Note 1 — Basis of Presentation

The accompanying Consolidated Financial Statements (unaudited) for The Timken Company (Timken or the Company) have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and notes required by accounting principles generally accepted in the United States (U.S. GAAP) for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) and disclosures considered necessary for a fair presentation have been included. For further information, refer to the Consolidated Financial Statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010. Certain amounts in the 2010 Consolidated Financial Statements have been reclassified to conform to the 2011 presentation.

Note 2 — Recently Issued Accounting Pronouncements

In June 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2011-05 Comprehensive Income (Topic 220): Presentation of Comprehensive Income, which includes new accounting rules related to the presentation of comprehensive income. The new accounting rules require that entities present a statement of other comprehensive income within the consolidated financial statements in one of two manners: a single statement approach or a two-statement approach. The single statement approach consists of a single statement presenting the components of net income and total net income, the components of other comprehensive income and a total for other comprehensive income. The two-statement approach allows for the components of net income and total net income to be presented in a financial statement, immediately followed by another financial statement presenting the components of other comprehensive income and a total for comprehensive income. The new accounting rules are effective, on a retrospective basis, for fiscal years beginning after December 15, 2011. The adoption of the new accounting rules related to the presentation of other comprehensive income is not expected to have a material impact on the Company’s results of operations and financial condition, but it will affect how the Company reports other comprehensive income. Management is currently evaluating which presentation method to adopt after the new rules are effective.

In May 2011, the FASB issued new accounting guidance updating ASU No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. The new accounting rules do not extend the use of fair value accounting; they only provide additional guidance on the application and disclosure of fair value accounting where its use is currently permitted. The new accounting rules also expand the required disclosures about fair value measurement. The provisions for the new accounting rules are effective, on a prospective basis, for interim and fiscal periods beginning after December 15, 2011. The adoption of the new accounting rules for fair value measurements is not expected to have a material impact on the Company’s results of operations and financial condition.

Note 3 — Inventories

	June 30,		December 31,
	2011		2010
Inventories, net:
Manufacturing supplies	$	59.0	$	57.9
Work in process and raw materials		425.9		371.9
Finished products		444.0		398.7
Inventories, net	$	928.9	$	828.5

An actual valuation of the inventory under the last-in, first-out (LIFO) method can be made only at the end of each year based on the inventory levels and costs at that time. Accordingly, interim LIFO calculations must be based on management’s estimates of expected year-end inventory levels and costs. Because these calculations are subject to many factors beyond management’s control, annual results may differ from interim results as they are subject to the final year-end LIFO inventory valuation. The LIFO reserve at June 30, 2011 and December 31, 2010 was $280.3 million and $264.6 million, respectively. The Company recognized an increase in its LIFO reserve of $9.7 million and $15.7 million during the second quarter and first six months of 2011 compared to an increase in its LIFO reserve of $0.5 million and $6.6 million during the second quarter and first six months of 2010.

5

Note 3 — Inventories (continued)

Based on current expectations of inventory levels and costs, the Company expects to recognize approximately $32 million in LIFO expense for the year ended December 31, 2011. The expected increase in the LIFO reserve for 2011 is a result of higher costs, especially scrap steel costs, as well as higher quantities. A 1.0% increase in costs would increase the current LIFO expense estimate for 2011 by approximately $5.9 million. A 1.0% increase in inventory quantities would only have a minor effect on the current LIFO expense estimate for 2011.

Note 4 — Property, Plant and Equipment

The components of property, plant and equipment were as follows:

	June 30,			December 31,
	2011			2010
Property, Plant and Equipment:
Land and buildings	$	634.9		$	623.2
Machinery and equipment		2,872.7			2,830.8
Subtotal		3,507.6			3,454.0
Less allowances for depreciation		(2,264.5	)		(2,186.3	)
Property, Plant and Equipment — net	$	1,243.1		$	1,267.7

At June 30, 2011 and December 31, 2010, machinery and equipment included approximately $92.9 million and $99.7 million, respectively, of capitalized software. Depreciation expense for the three months ended June 30, 2011 and 2010 was $44.1 million and $44.9 million, respectively. Depreciation expense for the six months ended June 30, 2011 and 2010 was $89.2 million and $90.2 million, respectively. Depreciation expense on capitalized software for the three months ended June 30, 2011 and 2010 was approximately $3.6 million and $5.1 million, respectively. Depreciation expense on capitalized software for the six months ended June 30, 2011 and 2010 was approximately $10.5 million and $10.4 million, respectively.

Note 5 — Goodwill and Other Intangible Assets

The change in the carrying amount of goodwill for the six months ended June 30, 2011 was as follows:

	Process		Aerospace
	Industries		and Defense		Steel		Total
Beginning Balance	$	50.0	$	162.3	$	12.1	$	224.4
Other		1.3		0.3		0.5		2.1
Total	$	51.3	$	162.6	$	12.6	$	226.5

Other primarily includes foreign currency translation adjustments.

6

Note 5 — Goodwill and Other Intangible Assets (continued)

The following table displays intangible assets as of June 30, 2011 and December 31, 2010:

	As of June 30, 2011						As of December 31, 2010
	Gross				Net		Gross				Net
	Carrying		Accumulated		Carrying		Carrying		Accumulated		Carrying
	Amount		Amortization		Amount		Amount		Amortization		Amount
Intangible assets subject to amortization:
Customer relationships	$	81.5	$	20.8	$	60.7	$	82.0	$	18.6	$	63.4
Engineering drawings		2.0		2.0		—		2.0		2.0		—
Know-how		2.1		1.1		1.0		2.1		1.0		1.1
Industrial license agreements		0.4		0.1		0.3		0.4		0.1		0.3
Land-use rights		8.4		3.6		4.8		8.2		3.3		4.9
Patents		4.4		3.4		1.0		4.4		3.3		1.1
Technology use		38.9		7.3		31.6		39.0		6.3		32.7
Trademarks		6.0		5.1		0.9		6.0		5.0		1.0
PMA licenses		8.8		2.9		5.9		8.8		2.7		6.1
Non-compete agreements		2.7		2.1		0.6		2.7		1.9		0.8
Unpatented technology		7.6		6.4		1.2		7.6		6.0		1.6
	$	162.8	$	54.8	$	108.0	$	163.2	$	50.2	$	113.0
Intangible assets not subject to amortization:
Tradename	$	2.0			$	2.0	$	2.0			$	2.0
FAA air agency certificates		14.2				14.2		14.2				14.2
	$	16.2			$	16.2	$	16.2			$	16.2
Total intangible assets	$	179.0	$	54.8	$	124.2	$	179.4	$	50.2	$	129.2

Amortization expense for intangible assets for the three months and six months ended June 30, 2011 was $2.3 million and $4.6 million, respectively. Amortization expense for intangible assets for the three months and six months ended June 30, 2010 was $2.4 million and $4.8 million, respectively. Amortization expense for intangible assets is estimated to be approximately $9.5 million for 2011; $9.1 million in 2012; $7.6 million in 2013; $7.4 million in 2014 and $7.4 million in 2015.

Note 6 — Financing Arrangements

Short-term debt at June 30, 2011 and December 31, 2010 was as follows:

	June 30,		December 31,
	2011		2010
Variable-rate lines of credit for certain of the Company’s foreign subsidiaries with various banks with interest rates ranging from 2.44% to 6.72% and 2.40% to 5.10% at June 30, 2011 and December 31, 2010, respectively	$	22.9	$	22.4
Short-term debt	$	22.9	$	22.4

The lines of credit for certain of the Company’s foreign subsidiaries provide for borrowings up to $304.0 million. At June 30, 2011, the Company had borrowings outstanding of $22.9 million and guarantees of $2.8 million, which reduced the availability under these facilities to $278.3 million.

7

Note 6 — Financing Arrangements (continued)

The Company has a $150 million Accounts Receivable Securitization Financing Agreement (Asset Securitization Agreement), which matures November 10, 2012. Under the terms of the Asset Securitization Agreement, the Company sells, on an ongoing basis, certain domestic trade receivables to Timken Receivables Corporation, a wholly-owned consolidated subsidiary, that in turn uses the trade receivables to secure borrowings, which are funded through a vehicle that issues commercial paper in the short-term market. Borrowings under the agreement are limited to certain borrowing base calculations. Any amounts outstanding under this Asset Securitization Agreement would be reported in short-term debt on the Company’s Consolidated Balance Sheet. As of June 30, 2011, there were no outstanding borrowings under the Asset Securitization Agreement. The cost of this facility, which is the commercial paper rate plus program fees, is considered a financing cost and is included in interest expense in the Consolidated Statement of Income.

Long-term debt at June 30, 2011 and December 31, 2010 was as follows:

	June 30,		December 31,
	2011		2010
Fixed-rate Medium-Term Notes, Series A, due at various dates through May 2028, with interest rates ranging from 6.74% to 7.76%	$	175.0	$	175.0
Fixed-rate Senior Unsecured Notes, due September 15, 2014, with an interest rate of 6.0%		249.8		249.7
Variable-rate State of Ohio Water Development Revenue Refunding Bonds, maturing on November 1, 2025 (0.18% at June 30, 2011)		12.2		12.2
Variable-rate State of Ohio Air Quality Development Revenue Refunding Bonds, maturing on November 1, 2025 (0.47% at June 30, 2011)		9.5		9.5
Variable-rate State of Ohio Pollution Control Revenue Refunding Bonds, maturing on June 1, 2033 (0.47% at June 30, 2011)		17.0		17.0
Variable-rate credit facility with US Bank for Advanced Green Components, LLC, maturing on July 17, 2011 (1.35% at June 30, 2011)		6.1		8.3
Other		28.4		19.6
		498.0		491.3
Less current maturities		7.4		9.6
Long-term debt	$	490.6	$	481.7

On May 11, 2011, the Company entered into a $500 million Amended and Restated Credit Agreement (Senior Credit Facility). This Senior Credit Facility amended and restated the former senior credit facility, which was due to expire on July 10, 2012. The Senior Credit Facility now matures on May 11, 2016. At June 30, 2011, the Company had no outstanding borrowings under the Senior Credit Facility but had letters of credit outstanding totaling $17.2 million, which reduced the availability under the Senior Credit Facility to $482.8 million. Under the Senior Credit Facility, the Company has two financial covenants: a consolidated leverage ratio and a consolidated interest coverage ratio. At June 30, 2011, the Company was in full compliance with the covenants under the Senior Credit Facility.

Advanced Green Components, LLC (AGC) is a joint venture of the Company. As of June 30, 2011, the Company had reserved cash of $4.8 million in a collateral account to secure up to $4.8 million of the indebtedness between AGC and US Bank in the event AGC defaults on its credit facility with US Bank. The $4.8 million collateral account is classified as restricted cash on the Consolidated Balance Sheet as of June 30, 2011.

Certain of the Company’s foreign subsidiaries have facilities that also provide for long-term borrowings up to $27.3 million. At June 30, 2011, the Company had borrowings outstanding of $27.1 million, which reduced the availability under these long-term facilities to $0.2 million.

8

Note 7 — Product Warranty

The Company provides limited warranties on certain of its products. The Company accrues liabilities for warranty based upon specific claims and a review of historical warranty claim experience in accordance with accounting rules for contingent liabilities. Should the Company become aware of a specific potential warranty claim for which liability is probable and reasonably estimable, a specific charge is recorded and accounted for accordingly. Adjustments are made quarterly to the accruals as claim data and historical experience change.

The following is a rollforward of the warranty accruals for the six months ended June 30, 2011 and the twelve months ended December 31, 2010:

	June 30,			December 31,
	2011			2010
| |
Beginning balance, January 1	$	8.0		$	5.4
Expense		2.4			6.0
Payments		(0.8	)		(3.4	)
Ending balance	$	9.6		$	8.0

The product warranty accrual at June 30, 2011 and December 31, 2010 was included in other current liabilities on the Consolidated Balance Sheets.

Note 8 — Equity

				The Timken Company Shareholders
									Earnings			Accumulated
						Other			Invested			Other
				Stated		Paid-In			in the			Comprehensive			Treasury			Noncontrolling
	Total			Capital		Capital			Business			(Loss)			Stock			Interest
Balance at December 31, 2010	$	1,941.8		$	53.1	$	881.7		$	1,626.4		$	(624.7	)	$	(11.5	)	$	16.8
Net income		236.1								234.2									1.9
Foreign currency translation adjustment		46.5											46.5
Pension and postretirement liability adjustment (net of the income tax benefit of $11.6 million)		18.5											18.5
Unrealized gain on marketable securities (net of the income tax benefit of $0.1 million)		0.3											0.2						0.1
Change in fair value of derivative financial instruments, net of reclassifications		0.1											0.1
Total comprehensive income		301.5
Change in ownership of noncontrolling interests		(1.2	)																(1.2	)
Dividends — $0.38 per share		(37.1	)							(37.1	)
Tax benefit from stock compensation		10.0					10.0
Stock-based compensation expense		9.2					9.2
Stock purchased at cost		(25.3	)													(25.3	)
Stock option exercise activity		16.3					(17.0	)								33.3
Restricted shares (issued) surrendered		(0.6	)				(0.7	)								0.1
Shares surrendered for taxes		(8.3	)													(8.3	)
Balance at June 30, 2011	$	2,206.3		$	53.1	$	883.2		$	1,823.5		$	(559.4	)	$	(11.7	)	$	17.6

9

Note 8 — Equity (continued)

The total comprehensive income for the three months ended June 30, 2011 was $148.1 million. The total comprehensive income for the three months and six months ended June 30, 2010 was $41.7 million and $88.5 million, respectively.

Note 9 — Earnings Per Share

The following table sets forth the reconciliation of the numerator and the denominator of basic earnings per share and diluted earnings per share for the three months and six months ended June 30, 2011 and June 30, 2010:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2011		2010		2011		2010
Numerator:
Income from continuing operations attributable to The Timken Company	$	121.5	$	81.4	$	234.2	$	109.7
Less: undistributed earnings allocated to nonvested stock		0.4		0.4		0.9		0.5
Income from continuing operations available to common shareholders for basic earnings per share and diluted earnings per share	$	121.1	$	81.0	$	233.3	$	109.2
Denominator:
Weighted average number of shares outstanding — basic		97,644,773		96,305,087		97,552,528		96,336,974
Effect of dilutive options		1,255,219		716,085		1,353,328		608,675
Weighted average number of shares outstanding, assuming dilution of stock options		98,899,992		97,021,172		98,905,856		96,945,649
Basic earnings per share from continuing operations	$	1.24	$	0.84	$	2.39	$	1.13
Diluted earnings per share from continuing operations	$	1.22	$	0.84	$	2.36	$	1.13

The exercise prices for certain stock options that the Company has awarded may exceed the average market price of the Company’s common stock. Such stock options are anti-dilutive and were not included in the computation of diluted earnings per share. There were no anti-dilutive stock options outstanding for the three months ended June 30, 2011 and 1,554,605 anti-dilutive stock options outstanding for the three months ended June 30, 2010. The anti-dilutive stock options outstanding were 176,500 and 1,960,955 for the six months ended June 30, 2011 and June 30, 2010, respectively.

10

Note 10 — Segment Information

The primary measurement used by management to measure the financial performance of each segment is EBIT (earnings before interest and taxes).

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
Net sales to external customers:
Mobile Industries	$	465.1		$	400.4		$	908.0		$	767.9
Process Industries		307.5			211.0			591.6			416.9
Aerospace and Defense		83.5			82.7			162.6			174.8
Steel		473.5			317.3			921.5			565.5
	$	1,329.6		$	1,011.4		$	2,583.7		$	1,925.1
Intersegment sales:
Mobile Industries	$	0.1		$	—		$	0.2		$	—
Process Industries		0.8			0.6			1.7			1.3
Steel		31.6			20.8			65.1			42.9
	$	32.5		$	21.4		$	67.0		$	44.2
Segment EBIT:
Mobile Industries	$	66.8		$	68.6		$	134.8		$	108.2
Process Industries		70.3			28.3			137.0			52.4
Aerospace and Defense		3.3			6.1			5.5			18.0
Steel		72.1			43.0			132.1			62.9
Total EBIT for reportable segments	$	212.5		$	146.0		$	409.4		$	241.5
Unallocated corporate expenses		(20.4	)		(17.8	)		(38.4	)		(32.2	)
Interest expense		(9.3	)		(10.0	)		(19.1	)		(19.6	)
Interest income		1.4			0.9			2.9			1.5
Intersegment adjustments		(0.4	)		1.1			0.2			3.6
Income from continuing operations before income taxes	$	183.8		$	120.2		$	355.0		$	194.8

Intersegment sales represent sales between the segments. These sales are eliminated upon consolidation.

11

Note 11 — Impairment and Restructuring Charges

Impairment and restructuring charges by segment are comprised of the following:

For the three months ended June 30, 2011:

	Mobile		Process		Aerospace
	Industries		Industries		& Defense		Steel		Corporate		Total
| | | | | |
Impairment charges	$	0.1	$	0.2	$	0.1	$	—	$	—	$	0.4
Severance expense and related benefit costs		0.2		—		—		—		—		0.2
Exit costs		5.4		0.2		—		—		—		5.6
Total	$	5.7	$	0.4	$	0.1	$	—	$	—	$	6.2

For the three months ended June 30, 2010:

	Mobile			Process		Aerospace
	Industries			Industries		& Defense		Steel			Corporate		Total
| | | | | |
Severance expense and related benefit costs	$	(0.6	)	$	—	$	0.8	$	(0.1	)	$	—	$	0.1
Exit costs		0.5			0.2		0.2		—			—		0.9
Total	$	(0.1	)	$	0.2	$	1.0	$	(0.1	)	$	—	$	1.0

For the six months ended June 30, 2011:

	Mobile		Process		Aerospace
	Industries		Industries		& Defense		Steel		Corporate		Total
Impairment charges	$	0.1	$	0.2	$	0.1	$	—	$	—	$	0.4
Severance expense and related benefit costs		0.1		—		—		—		—		0.1
Exit costs		6.6		0.2		—		—		—		6.8
Total	$	6.8	$	0.4	$	0.1	$	—	$	—	$	7.3

For the six months ended June 30, 2010:

	Mobile		Process		Aerospace
	Industries		Industries		& Defense		Steel			Corporate		Total
Severance expense and related benefit costs	$	1.6	$	1.6	$	1.4	$	(0.1	)	$	0.6	$	5.1
Exit costs		0.9		0.2		0.3		—			—		1.4
Total	$	2.5	$	1.8	$	1.7	$	(0.1	)	$	0.6	$	6.5

The following discussion explains the major impairment and restructuring charges recorded for the periods presented; however, it is not intended to reflect a comprehensive discussion of all amounts in the tables above.

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Note 11 — Impairment and Restructuring Charges (continued)

Mobile Industries

In March 2007, the Company announced the closure of its manufacturing facility in Sao Paulo, Brazil. The Company has substantially completed the closure of this facility as of June 30, 2011. Pretax costs associated with the closure could be as high as approximately $60 million, which includes restructuring costs and rationalization costs recorded in cost of products sold and selling, general and administrative expenses. The increase in costs from $40 million to $60 million was due to uncertainty around higher environmental remediation costs. Mobile Industries has incurred pretax costs of approximately $40.7 million as of June 30, 2011. During the second quarter and first six months of 2011, the Company recorded $4.9 million and $6.0 million, respectively, of exit costs associated with the closure of this facility. The exit costs were primarily related to environmental remediation costs and workers compensation claims for former associates. The Company accrues environmental remediation costs and workers compensation claims when they become probable and estimable.

Workforce Reductions

In 2009, the Company began the realignment of its organization to improve efficiency and reduce costs as a result of the economic downturn that began during the latter part of 2008. This initiative was completed in 2010. During the first six months of 2010, the Company recorded $4.8 million of severance and related benefit costs related to this initiative, which included both selling and administrative cost reductions, as well as manufacturing workforce reductions. Of the $4.8 million charge recorded during the first six months of 2010, $1.5 million related to the Mobile Industries segment, $1.3 million related to the Process Industries segment, $1.3 million related to the Aerospace and Defense segment and $0.7 million related to Corporate positions.

The following is a rollforward of the consolidated restructuring accrual for the six months ended June 30, 2011 and the twelve months ended December 31, 2010:

	June 30,			December 31,
	2011			2010
| |
Beginning balance, January 1	$	22.1		$	34.0
Expense		6.9			17.0
Payments		(4.2	)		(28.9	)
Ending balance	$	24.8		$	22.1

The restructuring accrual at June 30, 2011 and December 31, 2010 was included in other current liabilities on the Consolidated Balance Sheets. The accrual at June 30, 2011 included $5.6 million of severance and related benefits, which are expected to be paid by the end of 2011. The accrual for severance and related benefits at June 30, 2011 primarily related to the closure of the distribution center in Bucyrus, Ohio, which was completed during the second quarter of 2011, and the closure of the manufacturing facility in Sao Paulo, Brazil. The remainder of the restructuring accrual at June 30, 2011 primarily represented environmental exit costs, which are principally related to Sao Paulo, Brazil. As of June 30, 2011, the Company has $10.9 million reserved for environmental matters in Sao Paulo, Brazil, which is its best estimate of its environmental liability at this time. The Company adjusts environmental remediation accruals based on the best available estimate of costs to be incurred, the timing and extent of remedial actions required by governmental authorities and the amount of the Company’s liability in proportion to other responsible parties. The Company’s estimated total liability for this site ranges from a minimum of $10.9 million to a maximum of $20.9 million. It is possible that the estimate may change in the near term.

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Note 12 — Retirement and Postretirement Benefit Plans

The following table sets forth the net periodic benefit cost for the Company’s retirement and postretirement benefit plans. The amounts for the three months and six months ended June 30, 2011 are based on updated actuarial calculations prepared during the second quarter of 2011. The net periodic benefit cost recorded for the three months ended and six months ended June 30, 2011 is the Company’s best estimate of each period’s proportionate share of the amounts to be recorded for the year ended December 31, 2011.

	Pension						Postretirement
	Three Months Ended						Three Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
Components of net periodic benefit cost
Service cost	$	7.9		$	7.0		$	0.7		$	0.4
Interest cost		39.6			39.3			7.5			8.4
Expected return on plan assets		(57.5	)		(50.8	)		(1.5	)		—
Amortization of prior service cost (credit)		2.3			2.4			0.2			(0.4	)
Amortization of net actuarial loss		15.2			13.7			0.5			0.7
Net periodic benefit cost	$	7.5		$	11.6		$	7.4		$	9.1

	Pension						Postretirement
	Six Months Ended						Six Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
Components of net periodic benefit cost
Service cost	$	16.2		$	16.5		$	1.2		$	1.1
Interest cost		79.4			79.0			16.2			17.5
Expected return on plan assets		(107.6	)		(100.1	)		(2.2	)		—
Amortization of prior service cost (credit)		4.7			4.7			(0.2	)		(0.7	)
Amortization of net actuarial loss		28.0			25.9			1.5			2.0
Net periodic benefit cost	$	20.7		$	26.0		$	16.5		$	19.9

Note 13 — Income Taxes

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
Provision for income taxes	$	61.5		$	38.2		$	118.9		$	84.1
Effective tax rate		33.4	%		31.8	%		33.5	%		43.2	%

The Company’s provision for income taxes in interim periods is computed by applying the appropriate annual effective tax rates to income or loss before income taxes for the period. In addition, non-recurring or discrete items, including interest on prior year tax liabilities, are recorded during the period(s) in which they occur.

The effective tax rate for the second quarter of 2011 was lower than the U.S. Federal statutory tax rate of 35% primarily as a result of lower taxes related to non-U.S. earnings, and the net impact of other U.S. tax benefits, such as the U.S. research tax credit and U.S. manufacturing deduction, partially offset by U.S. state and local taxes and the net impact of other items.

14

Note 13 — Income Taxes (continued)

The effective tax rate on the pretax income for the second quarter of 2010 was favorable relative to the U.S. federal statutory tax rate of 35% primarily due to earnings in certain foreign jurisdictions where the effective tax rate is less than 35% and the U.S. manufacturing deduction, partially offset by losses at certain foreign subsidiaries where no tax benefit could be recorded, U.S. state and local tax and the net effect of other U.S. tax items.

The effective tax rate for the first six months of 2011 was lower than the U.S. Federal statutory tax rate of 35% primarily as a result of lower taxes related to non-U.S. earnings, and the net impact of other U.S. tax benefits, such as the U.S. research tax credit and U.S. manufacturing deduction, partially offset by U.S. state and local taxes and the net impact of other items.

The effective tax rate on the pretax income for the first six months of 2010 was unfavorable relative to the U.S. federal statutory tax rate of 35% primarily due to a $21.6 million charge recorded to reflect the deferred tax impact of the enactment of the U.S. Patient Protection and Affordable Care Act (as amended) enacted in the first quarter of 2010, losses at certain foreign subsidiaries where no tax benefit could be recorded, U.S. state and local taxes and the net effect of other U.S. tax items. These increases were partially offset by the earnings in certain foreign jurisdictions where the effective tax rate is less than 35%.

Note 14 — Fair Value

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The FASB provides accounting rules that classify the inputs used to measure fair value into the following hierarchy:

Level 1	— Unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2	— Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability.
Level 3	— Unobservable inputs for the asset or liability.

The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of June 30, 2011:

	Fair Value at June 30, 2011
	Total		Level 1		Level 2		Level 3
| | | |
Assets:
Cash and cash equivalents	$	632.8	$	632.8	$	—	$	—
Short-term investments		29.0		29.0		—		—
Foreign currency hedges		0.5		—		0.5		—
Total Assets	$	662.3	$	661.8	$	0.5	$	—
Liabilities:
Foreign currency hedges	$	5.8	$	—	$	5.8	$	—
Total Liabilities	$	5.8	$	—	$	5.8	$	—

Cash and cash equivalents are highly liquid investments with maturities of three months or less when purchased and are valued at redemption value. Short-term investments are investments with maturities between four months and one year and are valued at amortized cost. The Company uses publicly available foreign currency forward and spot rates to measure the fair value of its foreign currency forward contracts.

The Company does not believe it has significant concentrations of risk associated with the counterparts to its financial instruments.

15

Note 14 — Fair Value (continued)

The following table presents the fair value hierarchy for those assets measured at fair value on a nonrecurring basis for the six months ended June 30, 2011 using Level 3 inputs:

	Carrying		Fair Value
	Value		Adjustment			Fair Value
Assets held for sale:
Inventories	$	4.7	$	(3.2	)	$	1.5
Equity investments		6.9		(2.8	)		4.1
Total assets held for sale	$	11.6	$	(6.0	)	$	5.6
Long-lived assets held and used:
Fixed Assets	$	0.4	$	(0.4	)	$	—
Total assets	$	12.0	$	(6.4	)	$	5.6

During the second quarter of 2011, the Company made a strategic decision to exit certain non-strategic aftermarket product lines. The Company plans to exit these product lines within twelve months. The Company wrote-down inventory with a carrying value of $4.7 million to $1.5 million, which reflects management’s best estimate of the value it would receive in a sale to a third party given the quantity and timing of the plan to exit these product lines.

The Company’s equity investment in International Component Supply LTDA (ICS) was reviewed for impairment during the first quarter of 2011. This equity investment was written down to its fair value of $4.1 million, resulting in an impairment charge of $1.8 million recognized in other expense, net for the first six months of 2011. The fair value of this investment was based on the estimated sales proceeds to be received from a third party if the Company were to sell its interest in the joint venture. During the second quarter of 2011, the Company sold its investment in ICS for $4.8 million, resulting in a gain of $0.5 million. The Company’s equity investment in Endorsia International.com (Endorsia) was also reviewed for impairment during the second quarter of 2011. This equity investment was completely written down, resulting in an impairment charge of $1.0 million recognized in other expense, net for the second quarter of 2011. The fair value of this investment was based on the estimated proceeds to be received by the parties that own Endorsia from the liquidation of this joint venture.

Financial Instruments

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 long-term fixed-rate debt, based on quoted market prices, was $478.8 million and $468.7 million at June 30, 2011 and December 31, 2010, respectively. The carrying value of this debt was $434.3 million and $430.4 million at June 30, 2011 and December 31, 2010, respectively.

Note 15 — Subsequent Event

In July 2011, the Company completed the acquisition of the assets of Philadelphia Gear Corp. (Philadelphia Gear), a leading provider of high-performance gear drives and components with a strong focus on value-added aftermarket capabilities in the industrial and military marine sectors, for $200 million. Based in King of Prussia, Pennsylvania and employing approximately 220 people, Philadelphia Gear had trailing 12-month sales through March 2011 of approximately $85 million. The Company will report Philadelphia Gear within the Process Industries segment.

16

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

Introduction

The Timken Company (Timken or the Company) designs, manufactures, sells and services highly-engineered anti-friction bearings and assemblies, high-quality alloy steels and power transmission systems, as well as provides a broad spectrum of related products and services. The Company has four operating segments: (1) Mobile Industries; (2) Process Industries; (3) Aerospace and Defense; and (4) Steel. The following is a description of the Company’s operating segments:

• Mobile Industries provides bearings, power transmission components and related products and services to original equipment manufacturers and suppliers of agricultural, construction and mining equipment, passenger cars, light trucks, medium and heavy-duty trucks, rail cars and locomotives, as well as to automotive and heavy truck aftermarket distributors.

• Process Industries provides bearings, power transmission components and related products and services to original equipment manufacturers and suppliers of power transmission, energy and heavy industries machinery and equipment. This includes rolling mills, cement and aggregate processing equipment, paper mills, sawmills, printing presses, cranes, hoists, drawbridges, wind energy turbines, gear drives, drilling equipment, coal conveyors, coal crushers and food processing equipment. This segment also serves the industrial aftermarket through its global network of authorized distributors.

• Aerospace and Defense provides bearings, helicopter transmission systems, rotor head assemblies, turbine engine components, gears and other precision flight-critical components for commercial and military aviation applications and also provides aftermarket services, including repair and overhaul of engines, transmissions and fuel controls, as well as aerospace bearing repair and component reconditioning. Additionally, this segment manufactures precision bearings, higher-level assemblies and sensors for equipment manufacturers of health and positioning control equipment.

• Steel produces more than 450 grades of carbon and alloy steel, which are sold in both solid and tubular sections in a variety of chemistries, lengths and finishes. This segment’s metallurgical expertise and operational capabilities result in solutions for the automotive, industrial and energy sectors. Timken^® specialty steels feature prominently in a wide variety of end products including oil country drill pipe, bits and collars, gears, hubs, axles, crankshafts and connecting rods, bearing races and rolling elements, and bushings, fuel injectors and wind energy shafts.

The Company’s strategy balances corporate aspirations for sustained growth and optimization of its business portfolio with the objective of generating strong profits and cash flows.

Specifically, the growth element of this strategy addresses differentiation and expansion.

• For differentiation, the Company undertakes investments in new technologies to enhance existing products and services and to create new products that capture value for its customers. The Company recently broadened its product offering by introducing new housed bearings, adding to its spherical and cylindrical bearing line, developing new products and services for the wind energy market sector — including a new Timken^® UltraWind P1 seal — and introducing several new grades of steel.

• Regarding expansion, the Company’s strategy is to grow in attractive sectors, with particular emphasis on those industrial markets that test the limits of the Company’s products and create significant aftermarket, thereby providing a lifetime of opportunity in both product sales and services. The Company’s strategy also encompasses expanding its portfolio in new geographic spaces with an emphasis in Asia. The Company’s acquisition strategy is directed at complementing its existing portfolio and expanding the Company’s market position.

Simultaneously, the Company works to optimize its existing business with specific initiatives aimed at transformation and execution. This includes transforming the overall portfolio of businesses and products to create further value and profitability, which can include addressing or repositioning underperforming product lines and segments, revising market sector or geographic strategies and divesting non-strategic assets. The Company drives execution by embracing a continuous improvement culture that is charged with lowering costs, increasing efficiency, encouraging organizational agility and building greater brand equity.

17

The following items highlight certain of the Company’s recent significant strategic accomplishments:

• In May 2011, the Company announced an agreement to acquire the assets of Philadelphia Gear Corp. (Philadelphia Gear), a leading provider of high-performance gear drives and components with a strong focus on value-added aftermarket capabilities in the industrial and military marine sectors, for $200 million. Based in King of Prussia, Pennsylvania and employing approximately 220 people, Philadelphia Gear had trailing 12-month sales through March 2011 of approximately $85 million. The Company completed this acquisition on July 1, 2011. Philadelphia Gear will be part of the Process Industries segment.

• In May 2011, the Company sold its equity investment in International Components Supply LTDA (ICS) to the SKF Group for approximately $4.8 million. The Company and the SKF Group had previously purchased their 50% equity investments in ICS in early 2001. Located in Sao Paulo, Brazil, ICS manufactures forged and turned steel rings for tapered roller and ball bearings. The Company recorded a gain of approximately $0.5 million on the sale of its equity investment in ICS.

• In May 2011, the Company announced plans to build an 18,000 square foot Wind Energy Research and Development Center in Canton, Ohio. The cost is expected to be approximately $11.8 million. This new center will be focused on advanced development of bearing systems in wind turbines.

• In April 2011, the Company announced it will increase its annual steelmaking capacity by 120,000 tons across its steel manufacturing facilities in Canton, Ohio. The Company is achieving this increase through a series of improvements at its Harrison Steel Plant. Additional investments and crew additions will enable a further increase in output and will allow the Company to optimize production loads between its Harrison and Faircrest plants. These changes will effectively create new capacity at both of these steel facilities to support growing demand for finished bar products and billets for tubing product which serve customers in the global industrial, oil and gas, and mobile markets.

18

Financial Overview:

Overview :

	Three Months Ended
	June 30,
	2011		2010		$ Change			% Change
Net sales	$	1,329.6	$	1,011.4	$	318.2			31.5	%
Income from continuing operations		122.3		82.0		40.3			49.1	%
Income from discontinued operations		—		4.2		(4.2	)		(100.0	)%
Income attributable to noncontrolling interest		0.8		0.6		0.2			33.3	%
Net income attributable to The Timken Company		121.5		85.6		35.9			41.9	%
Diluted earnings per share:
Continuing operations	$	1.22	$	0.84	$	0.38			45.2	%
Discontinued operations		—		0.04		(0.04	)		(100.0	)%
Diluted earnings per share	$	1.22	$	0.88	$	0.34			38.6	%
Average number of shares — diluted		98,899,992		97,021,172		—			1.9	%

	Six Months Ended
	June 30,
	2011		2010		$ Change			% Change
Net sales	$	2,583.7	$	1,925.1	$	658.6			34.2	%
Income from continuing operations		236.1		110.7		125.4			113.3	%
Income from discontinued operations		—		4.5		(4.5	)		(100.0	)%
Income attributable to noncontrolling interest		1.9		1.0		0.9			90.0	%
Net income attributable to The Timken Company		234.2		114.2		120.0			105.1	%
Diluted earnings per share:
Continuing operations	$	2.36	$	1.13	$	1.23			108.8	%
Discontinued operations		—		0.04		(0.04	)		(100.0	)%
Diluted earnings per share	$	2.36	$	1.17	$	1.19			101.7	%
Average number of shares — diluted		98,905,856		96,945,649		—			2.0	%

The Company reported net sales for the second quarter of 2011 of $1.3 billion, compared to $1.0 billion in the second quarter of 2010, an increase of 31.5%. Net sales for the first six months of 2011 were $2.6 billion, compared to $1.9 billion in the first six months of 2010, an increase of 34.2%. Higher sales for the second quarter and first six months of 2011 were primarily driven by strong demand from all business segments except the Aerospace and Defense segment, as well as higher surcharges, pricing and the effect of currency rate changes. For the second quarter of 2011, net income per diluted share was $1.22, compared to $0.88 per diluted share for the second quarter of 2010. For the first six months of 2011, net income per diluted share was $2.36, compared to $1.17 per diluted share for the first six months of 2010.

The Company’s second quarter and first six months results reflect the continued improvement in the end market sectors served by the Mobile Industries, Process Industries and Steel segments. In addition, the second quarter and first six months results reflect higher surcharges, higher pricing and favorable sales mix, partially offset by higher raw material and logistics costs and selling, general and administrative expenses. Results for the first six months of 2010 reflect a one-time charge of $21.6 million to record the deferred tax impact of U.S. health care legislation enacted in the first quarter of 2010.

19

The income from discontinued operations recognized in the second quarter and first six months of 2010 was the result of working capital adjustments related to the divestiture of the Company’s Needle Roller Bearings (NRB) operations, which was completed on December 31, 2009.

Outlook

The Company’s outlook for 2011 reflects continued improvement in the global economy following the economic recovery in 2010. The Company expects sales to be approximately 25% to 30% higher than in 2010, primarily driven by stronger sales volume in all segments, as well as the impact of the acquisition of Philadelphia Gear. The Company expects to leverage sales growth to drive improved operating performance for 2011, compared to 2010. However, the strengthening margins will be partially offset by slightly higher selling, general and administrative expenses to support increased sales.

From a liquidity standpoint, the Company expects to generate cash from operations of approximately $275 million in 2011, which is a decrease of 12% from 2010. The decrease is due to higher working capital to support increased sales volume, as well as higher pension and other postretirement contributions, partially offset by improved margins across all segments. Pension and other postretirement contributions are expected to be approximately $320 million in 2011, compared to $230 million in 2010. The Company expects to increase capital expenditures to approximately $210 million in 2011, compared to $115 million in 2010. Dividends are also expected to increase to approximately $76 million in 2011, compared to $51 million in 2010, reflecting the full-year impact of the current quarterly dividend rate of $0.20 per share that was increased in the second quarter of 2011.

Sales by Segment :

	Three Months Ended
	June 30,
	2011		2010		$ Change		% Change
Mobile Industries	$	465.1	$	400.4	$	64.7		16.2	%
Process Industries		307.5		211.0		96.5		45.7	%
Aerospace and Defense		83.5		82.7		0.8		1.0	%
Steel		473.5		317.3		156.2		49.2	%
Total Company	$	1,329.6	$	1,011.4	$	318.2		31.5	%

	Six Months Ended
	June 30,
	2011		2010		$ Change			% Change
Mobile Industries	$	908.0	$	767.9	$	140.1			18.2	%
Process Industries		591.6		416.9		174.7			41.9	%
Aerospace and Defense		162.6		174.8		(12.2	)		(7.0	)%
Steel		921.5		565.5		356.0			63.0	%
Total Company	$	2,583.7	$	1,925.1	$	658.6			34.2	%

Net sales for the second quarter of 2011 increased $318.2 million, or 31.5%, compared to the second quarter of 2010, due to higher volume of approximately $185 million primarily driven by the Steel business segment, the Process Industries’ distribution channel and the Mobile Industries’ off-highway and heavy truck market sectors. In addition, the increase reflects higher surcharges of approximately $55 million, higher pricing and favorable sales mix of approximately $50 million and the effect of currency rate changes of approximately $30 million.

20

Net sales for the first six months of 2011 increased $658.6 million, or 34.2%, compared to the first six months of 2010, primarily due to higher volume of approximately $395 million across all business segments except the Aerospace and Defense segment. In addition, the increase in sales reflects higher surcharges of approximately $130 million, higher pricing and favorable sales mix of approximately $95 million and the effect of currency rate changes of approximately $40 million.

Gross Profit :

	Three Months Ended
	June 30,
	2011			2010			$ Change		Change
Gross profit	$	350.5		$	268.3		$	82.2		30.6	%
Gross profit % to net sales		26.4	%		26.5	%		—	(10) bps

	Six Months Ended
	June 30,
	2011			2010			$ Change		Change
Gross profit	$	683.8		$	491.0		$	192.8		39.3	%
Gross profit % to net sales		26.5	%		25.5	%		—	100 bps

Gross profit increased in the second quarter of 2011 compared to the second quarter of 2010 primarily due to the impact of higher sales volume of approximately $85 million, an increase in surcharges of approximately $55 million and the impact of pricing and sales mix of approximately $40 million, partially offset by higher raw material and logistics costs of approximately $105 million.

Gross profit increased in the first six months of 2011 compared to the first six months of 2010 primarily due to the impact of higher sales volume of approximately $175 million, an increase in surcharges of approximately $130 million and the impact of higher pricing and sales mix of approximately $100 million, partially offset by higher raw material and logistics costs of approximately $230 million.

Selling, General and Administrative Expenses:

	Three Months Ended
	June 30,
	2011			2010			$ Change		Change
Selling, general and administrative expenses	$	153.7		$	140.7		$	13.0		9.2	%
Selling, general and administrative expenses % to net sales		11.6	%		13.9	%		—	(230) bps

	Six Months Ended
	June 30,
	2011			2010			$ Change		Change
Selling, general and administrative expenses	$	304.0		$	273.7		$	30.3		11.1	%
Selling, general and administrative expenses % to net sales		11.8	%		14.2	%		—	(240) bps

21

The increase in selling, general and administrative expenses in the second quarter of 2011 compared to the second quarter of 2010 was primarily due to higher salaries and related costs to support higher sales volume, as well as higher expense related to incentive compensation plans of approximately $3 million. The increase in selling, general and administrative expenses in the first six months of 2011 compared to the first six months of 2010 was primarily due to higher salaries and related costs to support higher sales volume, as well as higher expense related to incentive compensation plans of approximately $9 million. Selling, general and administrative expenses, as a percentage of sales, decreased in the second quarter and first six months of 2011 compared to the respective periods in 2010 as a result of the Company’s ability to leverage these costs against higher sales.

Impairment and Restructuring Charges:

	Three Months Ended
	June 30,
	2011		2010		$ Change
Impairment charges	$	0.4	$	—	$	0.4
Severance and related benefit costs		0.2		0.1		0.1
Exit costs		5.6		0.9		4.7
Total	$	6.2	$	1.0	$	5.2

	Six Months Ended
	June 30,
	2011		2010		$ Change
Impairment charges	$	0.4	$	—	$	0.4
Severance and related benefit costs		0.1		5.1		(5.0	)
Exit costs		6.8		1.4		5.4
Total	$	7.3	$	6.5	$	0.8

Impairment and restructuring charges increased $5.2 million in the second quarter of 2011 compared to the second quarter of 2010 primarily due to the recognition of $4.9 million of exit costs related to the Company’s former manufacturing facility in Sao Paulo, Brazil. The exit costs were primarily related to environmental remediation costs and workers compensation claims by former associates. Refer to Note 11 — Impairment and Restructuring Charges in the Notes to the Consolidated Financial Statements for further detail on the Sao Paulo, Brazil environmental remediation costs.

Impairment and restructuring charges increased $0.8 million in the first six months of 2011 compared to the first six months of 2010. The Company recognized $6.0 million of exit costs in the first six months of 2011 for the former manufacturing facility in Sao Paulo, Brazil relating to environmental remediation costs and workers compensation claims by former associates. The Company recognized $4.8 million of severance and related benefit costs in the first six months of 2010 related to restructuring programs that began in 2009 to realign the Company’s organization, improve efficiency and reduce costs. These programs included both selling and administrative cost reductions, as well as manufacturing workforce reductions.

22

Interest Expense and Income:

	Three Months Ended
	June 30,
	2011		2010		$ Change			% Change
Interest expense	$	9.3	$	10.0	$	(0.7	)		(7.0	)%
Interest income	$	1.4	$	0.9	$	0.5			55.6	%

	Six Months Ended
	June 30,
	2011		2010		$ Change			% Change
Interest expense	$	19.1	$	19.6	$	(0.5	)		(2.6	)%
Interest income	$	2.9	$	1.5	$	1.4			93.3	%

Interest expense for the second quarter of 2011 and the first six months of 2011 decreased compared to the respective periods in 2010 primarily due to reduced fees and costs associated with the refinancing of the Company’s $500 million Amended and Restated Credit Agreement (Senior Credit Facility) in May 2011. The Company incurred $2.9 million of deferred financing costs related to the Senior Credit Facility. The Company expects to incur approximately $1.3 million of deferred financing costs on an annualized basis compared to $3.0 million under the previous credit facility. Interest income for the second quarter and the first six months of 2011 increased compared to the same periods in the prior year primarily due to higher interest rates on invested cash balances.

Income Tax Expense:

	Three Months Ended
	June 30,
	2011			2010			$ Change		Change
Income tax expense	$	61.5		$	38.2		$	23.3		61.0	%
Effective tax rate		33.4	%		31.8	%		—	160 bps

	Six Months Ended
	June 30,
	2011			2010			$ Change		Change
Income tax expense	$	118.9		$	84.1		$	34.8		41.4	%
Effective tax rate		33.5	%		43.2	%		—	(970) bps

The effective tax rate for the second quarter of 2011 was lower than the U.S. Federal statutory tax rate of 35% primarily as a result of lower taxes related to non-U.S. earnings, and the net impact of other U.S. tax benefits, such as the U.S. research tax credit and U.S. manufacturing deduction, partially offset by U.S. state and local taxes and the net impact of other items. The change in the effective tax rate compared to the second quarter of 2010 was primarily due to certain discrete tax expense items recognized in the second quarter of 2011 compared to certain discrete tax benefit items recognized in the second quarter of 2010, and the net impact of other items.

23

The effective tax rate for the first six months of 2011 was lower than the U.S. Federal statutory tax rate of 35% primarily as a result of lower taxes related to non-U.S. earnings, and the net impact of other U.S. tax benefits, such as the U.S. research tax credit and U.S. manufacturing deduction, partially offset by U.S. state and local taxes and the net impact of other items. The change in the effective tax rate compared to the first six months of 2010 was primarily due to the $21.6 million charge to income tax expense to record the deferred tax impact of the U.S. Patient Protection and Affordable Care Act (as amended) in the first quarter of 2010, partially offset by higher U.S. earnings and higher state and local taxes.

Discontinued Operations:

	Three Months Ended
	June 30,
	2011		2010		$ Change			% Change
Gain on disposal, net of tax	$	—	$	4.2	$	(4.2	)		(100.0	)%
Income from discontinued operations, net of taxes	$	—	$	4.2	$	(4.2	)		(100.0	)%

	Six Months Ended
	June 30,
	2011		2010		$ Change			% Change
Gain on disposal, net of tax	$	—	$	4.5	$	(4.5	)		(100.0	)%
Income from discontinued operations, net of taxes	$	—	$	4.5	$	(4.5	)		(100.0	)%

In December 2009, the Company completed the divestiture of its NRB operations to JTEKT Corporation. In the second quarter and first six months of 2010, the Company recognized a gain of $4.2 million and $4.5 million, respectively, on the disposal of the NRB operations. The gain, net of tax, primarily represents a working capital adjustment related to net retained receivables.

Business Segments:

Effective January 1, 2011, the primary measurement used by management to measure the financial performance of each segment is EBIT (earnings before interest and taxes). Prior to January 1, 2011, the primary measurement used by management to measure the financial performance of each segment was adjusted EBIT (earnings before interest and taxes, excluding the effect of impairment and restructuring, manufacturing rationalization and integration charges, one-time gains or losses on the disposal of non-strategic assets, allocated receipts received or payments made under the U.S. Continued Dumping Subsidy Offset Act (CDSOA) and gains and losses on the dissolution of subsidiaries). Refer to Note 10 — Segment Information in the Notes to the Consolidated Financial Statements for the reconciliation of EBIT by segment to consolidated income before income taxes.

The presentations of segment results include a reconciliation of the changes in net sales for each segment reported in accordance with U.S. GAAP to net sales adjusted to remove the effects of acquisitions made in 2010 and currency exchange rates. The effects of acquisitions made in 2010 and currency exchange rates are removed to allow investors and the Company to meaningfully evaluate the percentage change in net sales on a comparable basis from period to period. During the third quarter of 2010, the Company completed the acquisition of QM Bearings and Power Transmissions, Inc. (QM Bearings). QM Bearings is part of the Process Industries segment. During the fourth quarter of 2010, the Company completed the acquisition of substantially all of the assets of City Scrap and Salvage Co. (City Scrap). City Scrap is part of the Steel segment. No acquisitions were completed in the first six months of 2011. The year 2010 represents the base year for which the effects of currency are measured; as such, currency is assumed to be zero for 2010.

24

Mobile Industries Segment:

	Three Months Ended
	June 30,
	2011			2010			$ Change			Change
Net sales, including intersegment sales	$	465.2		$	400.4		$	64.8			16.2	%
EBIT	$	66.8		$	68.6		$	(1.8	)		(2.6	)%
EBIT margin		14.4	%		17.1	%		—		(270) bps

	Three Months Ended
	June 30,
	2011		2010		$ Change		% Change
Net sales, including intersegment sales	$	465.2	$	400.4	$	64.8		16.2	%
Currency		19.4		—		19.4	NM
Net sales, excluding the impact of currency	$	445.8	$	400.4	$	45.4		11.3	%

	Six Months Ended
	June 30,
	2011			2010			$ Change		Change
Net sales, including intersegment sales	$	908.2		$	767.9		$	140.3		18.3	%
EBIT	$	134.8		$	108.2		$	26.6		24.6	%
EBIT margin		14.8	%		14.1	%		—	70 bps

	Six Months Ended
	June 30,
	2011		2010		$ Change		% Change
Net sales, including intersegment sales	$	908.2	$	767.9	$	140.3		18.3	%
Currency		25.1		—		25.1	NM
Net sales, excluding the impact of currency	$	883.1	$	767.9	$	115.2		15.0	%

The Mobile Industries segment’s net sales, excluding the effects of currency rate changes, increased 11.3% for the second quarter of 2011 compared to the second quarter of 2010, due to higher volume of approximately $35 million and pricing, surcharges and sales mix of $10 million. The volume increases were seen across most of the Mobile Industries segment’s market sectors, led by a 47% increase in off-highway demand, a 32% increase in heavy truck demand and a 20% increase in rail demand. EBIT was down slightly in the second quarter of 2011 compared to the second quarter of 2010 primarily due to higher raw material and logistics costs of approximately $15 million and a charge of approximately $5 million related to the closure of the former manufacturing facility in Sao Paulo, Brazil, which more than offset the impact of higher volume of approximately $15 million and the impact of pricing, surcharges and sales mix of approximately $5 million. The second quarter of 2010 represented a peak in the Mobile Industries segment’s financial results, as the light vehicle sector was performing strongly during the economic recovery in 2010.

The Mobile Industries segment’s net sales, excluding the effects of currency rate changes, increased 15.0% for the first six months of 2011 compared to the first six months of 2010, primarily due to higher volume of approximately $95 million and pricing, surcharges and sales mix of approximately $20 million. The volume increases were seen across most of the Mobile Industries segment’s market sectors, led by a 49% increase in off-highway demand, a 31% increase in rail demand and a 28% increase in heavy truck demand. EBIT was higher in the first six months of 2011 compared to the first six months of 2010 primarily due to higher volume of approximately $35 million and the impact of pricing, surcharges and sales mix of approximately $20 million, partially offset by increased raw material and logistics costs of approximately $30 million.

25

Sales for the Mobile Industries segment are expected to increase approximately 10% to 15% for 2011 compared to 2010, primarily due to higher demand across most of the Mobile Industries’ market sectors, led by increases in off- highway and rail demand of approximately 30% each and heavy truck demand of approximately 20%, partially offset by lower light vehicle demand. EBIT for the Mobile Industries segment for 2011 is expected to increase compared to 2010, primarily due to higher volume and pricing and sales mix, partially offset by higher material costs.

Process Industries Segment:

	Three Months Ended
	June 30,
	2011			2010			$ Change		Change
Net sales, including intersegment sales	$	308.3		$	211.6		$	96.7		45.7	%
EBIT	$	70.3		$	28.3		$	42.0		148.4	%
EBIT margin		22.8	%		13.4	%		—	940 bps

	Three Months Ended
	June 30,
	2011		2010		$ Change		% Change
Net sales, including intersegment sales	$	308.3	$	211.6	$	96.7		45.7	%
Acquisitions		7.5		—		7.5	NM
Currency		11.3		—		11.3	NM
Net sales, excluding the impact of acquisitions and currency	$	289.5	$	211.6	$	77.9		36.8	%

	Six Months Ended
	June 30,
	2011			2010			$ Change		Change
Net sales, including intersegment sales	$	593.3		$	418.2		$	175.1		41.9	%
EBIT	$	137.0		$	52.4		$	84.6		161.5	%
EBIT margin		23.1	%		12.5	%		—	1,060 bps

	Six Months Ended
	June 30,
	2011		2010		$ Change		% Change
Net sales, including intersegment sales	$	593.3	$	418.2	$	175.1		41.9	%
Acquisitions		13.0		—		13.0	NM
Currency		15.0		—		15.0	NM
Net sales, excluding the impact of acquisitions and currency	$	565.3	$	418.2	$	147.1		35.2	%

The Process Industries segment’s net sales, excluding the effects of acquisitions and currency rate changes, increased 36.8% in the second quarter of 2011 compared to the same period in the prior year, primarily due to higher volume of approximately $65 million and pricing of approximately $10 million. The higher sales were primarily due to a 53% increase in sales to industrial distributors. In addition, original equipment demand increased 31%, led by the wind energy and gear drive sectors. EBIT was higher in the second quarter of 2011 compared to the second quarter of 2010, primarily due to the impact of higher volume of approximately $35 million and the impact of pricing of approximately $10 million, partially offset by higher raw material costs of approximately $10 million.

26

The Process Industries segment’s net sales, excluding the effects of acquisitions and currency rate changes, increased 35.2% in the first six months of 2011 compared to the same period in the prior year, primarily due to higher volume of approximately $130 million and pricing of approximately $20 million. The higher volume resulted from a 53% increase in volume to industrial distributors. In addition, the Process Industries sales to original equipment customers increased 21%, led by the wind energy and gear drive sectors. EBIT increased in the first six months of 2011 compared to the first six months of 2010, primarily due to higher sales volume of approximately $70 million and pricing of approximately $30 million, partially offset by higher raw material costs of approximately $15 million.

The Company expects sales in the Process Industries segment to increase approximately 30% to 35% in 2011 compared to 2010. The increase in sales reflects strengthening global industrial distribution, growth in Asia, the expected impact of the acquisition of Philadelphia Gear and sales of new product lines. EBIT for the Process Industries segment is expected to increase in 2011 compared to 2010, primarily due to the impact of higher volume, pricing and sales mix, as well as the impact of acquisitions, partially offset by higher raw material costs.

Aerospace and Defense Segment:

	Three Months Ended
	June 30,
	2011			2010			$ Change			Change
Net sales, including intersegment sales	$	83.5		$	82.7		$	0.8			1.0	%
EBIT	$	3.3		$	6.1		$	(2.8	)		(45.9	)%
EBIT margin		4.0	%		7.4	%		—		(340) bps

	Three Months Ended
	June 30,
	2011		2010		$ Change			% Change
Net sales, including intersegment sales	$	83.5	$	82.7	$	0.8			1.0	%
Currency		1.1		—		1.1		NM
Net sales, excluding the impact of currency	$	82.4	$	82.7	$	(0.3	)		(0.4	)%

	Six Months Ended
	June 30,
	2011			2010			$ Change			Change
Net sales, including intersegment sales	$	162.6		$	174.8		$	(12.2	)		(7.0	)%
EBIT	$	5.5		$	18.0		$	(12.5	)		(69.4	)%
EBIT margin		3.4	%		10.3	%		—		(690) bps

	Six Months Ended
	June 30,
	2011		2010		$ Change			% Change
Net sales, including intersegment sales	$	162.6	$	174.8	$	(12.2	)		(7.0	)%
Currency		1.5		—		1.5		NM
Net sales, excluding the impact of currency	$	161.1	$	174.8	$	(13.7	)		(7.8	)%

27

The Aerospace and Defense segment’s net sales, excluding the impact of currency rate changes, were flat in the second quarter of 2011 compared to the second quarter of 2010 as increased commercial demand was offset by lower demand for the Company’s defense-related products. EBIT for the second quarter of 2011 declined compared to the second quarter of 2010 due to an inventory write-down of approximately $3 million related to management’s decision to exit certain non-strategic aftermarket products.

The Aerospace and Defense segment’s net sales, excluding the impact of currency rate changes, decreased 7.8% in the first six months of 2011 compared to the first six months of 2010, primarily due to a decrease in volume. The decrease in volume was driven by reduced demand from defense and aviation customers. EBIT declined for the first six months of 2011 compared to the first six months of 2010 primarily due to the impact of lower volume of approximately $5 million and manufacturing utilization of $5 million, as well as the inventory write-down of $3 million in the second quarter of 2011.

The Company expects the Aerospace and Defense segment to experience a slight increase in sales in 2011 compared to 2010, as a result of strengthening in the commercial aerospace and health and positioning control market sectors, partially offset by lower demand for the Company’s defense-related products. EBIT for 2011 is expected to increase from 2010 levels, as a result of higher commercial aerospace demand, partially offset by weakness in defense demand.

Steel Segment:

	Three Months Ended
	June 30,
	2011			2010			$ Change		Change
Net sales, including intersegment sales	$	505.1		$	338.1		$	167.0		49.4	%
EBIT	$	72.1		$	43.0		$	29.1		67.7	%
EBIT margin		14.3	%		12.7	%		—	160 bps

	Three Months Ended
	June 30,
	2011		2010		$ Change		% Change
Net sales, including intersegment sales	$	505.1	$	338.1	$	167.0		49.4	%
Acquisitions		2.0		—		2.0	NM
Currency		0.5		—		0.5	NM
Net sales, excluding the impact of acquisitions and currency	$	502.6	$	338.1	$	164.5		48.7	%

28

	Six Months Ended
	June 30,
	2011			2010			$ Change		Change
Net sales, including intersegment sales	$	986.6		$	608.4		$	378.2		62.2	%
EBIT	$	132.1		$	62.9		$	69.2		110.0	%
EBIT margin		13.4	%		10.3	%		—	310 bps

	Six Months Ended
	June 30,
	2011		2010		$ Change		% Change
Net sales, including intersegment sales	$	986.6	$	608.4	$	378.2		62.2	%
Acquisitions		3.7		—		3.7	NM
Currency		0.8		—		0.8	NM
Net sales, excluding the impact of acquisitions and currency	$	982.1	$	608.4	$	373.7		61.4	%

The Steel segment’s net sales for the second quarter of 2011, excluding the effects of acquisitions and currency rate changes, increased 48.7% compared to the second quarter of 2010, primarily due to higher volume of approximately $85 million across all market sectors, higher surcharges of approximately $50 million and pricing and sales mix of approximately $30 million. The higher volume was primarily driven by increases in oil and gas demand and industrial demand. Surcharges increased to $146.9 million in the second quarter of 2011 from $94.8 million in the second quarter of 2010. Surcharges are a pricing mechanism that the Company uses to recover scrap steel, energy and certain alloy costs, which are derived from published monthly indices. The average scrap index for the second quarter of 2011 was $474 per ton, compared to $471 per ton for the second quarter of 2010. Steel shipments for the second quarter of 2011 were approximately 333,200 tons, compared to approximately 246,300 tons for the second quarter of 2010, an increase of 35.3%. The Steel segment’s average selling price, including surcharges, was $1,516 per ton for the second quarter of 2011, compared to an average selling price of $1,372 per ton in the second quarter of 2010. The increase in the average selling prices was primarily the result of higher base prices, higher surcharges and sales mix. The higher surcharges were a result of higher market prices for certain input raw materials, especially scrap steel, nickel and molybdenum.

The Steel segment’s EBIT increased $29.1 million in the second quarter of 2011 compared to the second quarter of 2010, primarily due to higher surcharges of approximately $50 million, the impact of higher sales volume of approximately $30 million and pricing and sales mix of approximately $25 million, partially offset by higher raw material costs of approximately $70 million and higher LIFO expense. In the second quarter of 2011, the Steel segment recognized LIFO expense of $5.0 million, compared to LIFO expense of $0.3 million in the second quarter of 2010. Raw material costs consumed in the manufacturing process, including scrap steel and alloys, increased 16.5% in the second quarter of 2011 over the comparable period in the prior year to an average cost of $523 per ton.

The Steel segment’s net sales for the first six months of 2011, excluding the effects of acquisitions and currency rate changes, increased 61.4% compared to the first six months of 2010 primarily due to higher volume of approximately $190 million, higher surcharges of approximately $125 million, higher pricing of approximately $35 million and sales mix of approximately $25 million. The higher volume was seen across all market sectors, particularly in the oil and gas and industrial market sectors. Surcharges increased to $280.2 million in the first six months of 2011 from $154.2 million in the first six months of 2010. The average scrap index for the first six months of 2011 was $468 per ton, compared to $422 per ton for the first six months of 2010. Steel shipments for the first six months of 2011 were approximately 663,300 tons, compared to approximately 464,400 tons for the first six months 2010, an increase of 42.8%. The Steel segment’s average selling price, including surcharges, was $1,487 per ton for the first six months of 2011, compared to an average selling price of $1,310 per ton in the first six months of 2010. The increase in the average selling prices was primarily the result of higher surcharges and base prices. The higher surcharges were the result of higher market prices for certain input raw materials, especially scrap steel, nickel and molybdenum.

29

The Steel segment’s EBIT increased $69.2 million in the first six months of 2011 compared to the first six months of 2010 primarily due to higher surcharges of $125 million, the impact of higher sales volume of approximately $70 million and pricing of approximately $35 million, partially offset by the impact of higher raw materials costs of $160 million and higher LIFO expense. In the first six months of 2011, the Steel segment recognized LIFO expense of $8.6 million, compared to LIFO expense of $0.7 million in the first six months of 2010. Raw material costs consumed in the manufacturing process, including scrap steel, alloys and energy, increased 24% in the first six months of 2011 over the comparable period in the prior year to an average cost of $513 per ton.

The Company expects the Steel segment to experience a 40% to 45% increase in sales for 2011 compared to 2010, due to higher volume and higher average selling prices. The higher average selling prices are primarily driven by higher surcharges as scrap steel and alloy prices are expected to increase in 2011. The Company expects stronger demand across most market sectors, primarily driven by an 85% increase in oil and gas market sectors and a 25% increase in industrial market sectors. The Company expects the Steel segment’s EBIT to increase in 2011 compared to 2010, primarily due to higher sales, higher average selling prices and favorable sales mix, partially offset by higher raw material costs. Scrap, alloy and energy costs are expected to increase in the near term from current levels as global industrial production improves and then levels off.

Corporate:

	Three Months Ended
	June 30,
	2011			2010			$ Change		Change
Corporate expenses	$	20.4		$	17.8		$	2.6		14.6	%
Corporate expenses % to net sales		1.5	%		1.8	%		—	(30) bps

	Six Months Ended
	June 30,
	2011			2010			$ Change		Change
Corporate expenses	$	38.4		$	32.2		$	6.2		19.3	%
Corporate expenses % to net sales		1.5	%		1.7	%		—	(20) bps

Corporate expenses increased for the second quarter and first six months of 2011 compared to the second quarter and first six months of 2010, respectively, primarily due to higher performance-based compensation of approximately $1.7 million and $3.6 million, respectively.

30

The Balance Sheet:

Total assets as shown on the Consolidated Balance Sheet at June 30, 2011 decreased $5.3 million compared to December 31, 2010. The decrease as of June 30, 2011 was primarily due to lower cash and cash equivalents as a result of contributions to the Company’s global defined benefit pension plans and postretirement benefit plans, as well as lower deferred income taxes, mostly offset by higher working capital as a result of higher volumes. The following discussion is a comparison of the Consolidated Balance Sheets at June 30, 2011 and December 31, 2010.

Current Assets:

	June 30,		December 31,
	2011		2010		$ Change			% Change
Cash and cash equivalents	$	632.8	$	877.1	$	(244.3	)		(27.9	)%
Restricted cash		4.8		—		4.8		NM
Accounts receivable, net		718.8		516.6		202.2			39.1	%
Inventories, net		928.9		828.5		100.4			12.1	%
Deferred income taxes		100.5		100.4		0.1			0.1	%
Deferred charges and prepaid expenses		12.4		11.3		1.1			9.7	%
Other current assets		72.6		65.3		7.3			11.2	%
Total current assets	$	2,470.8	$	2,399.2	$	71.6			3.0	%

Refer to the Consolidated Statements of Cash Flows for a discussion of the decrease in cash and cash equivalents. Accounts receivable, net increased as a result of the higher sales in the second quarter of 2011 compared to the fourth quarter of 2010, as well as a $5.8 million decrease in the allowance for doubtful accounts. Inventories increased primarily to support higher sales and expected future demand. The increase in other current assets is primarily due to an increase in short-term marketable securities of $13.3 million, partially offset by the sale of the Company’s equity investment in ICS, which had been classified as assets held for sale.

Property, Plant and Equipment — Net:

	June 30,			December 31,
	2011			2010			$ Change			% Change
Property, plant and equipment	$	3,507.6		$	3,454.0		$	53.6			1.6	%
Less: allowances for depreciation		(2,264.5	)		(2,186.3	)		(78.2	)		(3.6	)%
Property, plant and equipment — net	$	1,243.1		$	1,267.7		$	(24.6	)		(1.9	)%

The decrease in property, plant and equipment — net in the first six months of 2011 was primarily due to current-year depreciation expense exceeding capital expenditures, partially offset by the impact of foreign currency translation.

Other Assets:

	June 30,		December 31,
	2011		2010		$ Change			% Change
Goodwill	$	226.5	$	224.4	$	2.1			0.9	%
Other intangible assets		124.2		129.2		(5.0	)		(3.9	)%
Deferred income taxes		68.0		121.5		(53.5	)		(44.0	)%
Other non-current assets		42.5		38.4		4.1			10.7	%
Total other assets	$	461.2	$	513.5	$	(52.3	)		(10.2	)%

The decrease in deferred income taxes was primarily due to current-year contributions to the Company’s global defined benefit pension plans and other postretirement benefit plans.

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Current Liabilities:

	June 30,		December 31,
	2011		2010		$ Change			% Change
Short-term debt	$	22.9	$	22.4	$	0.5			2.2	%
Accounts payable		314.6		263.5		51.1			19.4	%
Salaries, wages and benefits		203.1		233.4		(30.3	)		(13.0	)%
Income taxes payable		23.5		14.0		9.5			67.9	%
Deferred income taxes		0.9		0.7		0.2			28.6	%
Other current liabilities		183.5		176.3		7.2			4.1	%
Current portion of long-term debt		7.4		9.6		(2.2	)		(22.9	)%
Total current liabilities	$	755.9	$	719.9	$	36.0			5.0	%

The increase in accounts payable was primarily due to higher volume. The decrease in accrued salaries, wages and benefits was the result of the payout of the 2010 performance-based compensation in the first quarter of 2011, partially offset by accrued 2011 performance-based compensation. The increase in income taxes payable was primarily due to the increase in net income in the first six months of 2011, partially offset by income tax payments in the first six months of 2011.

Non-Current Liabilities:

	June 30,		December 31,
	2011		2010		$ Change			% Change
Long-term debt	$	490.6	$	481.7	$	8.9			1.8	%
Accrued pension cost		154.0		394.5		(240.5	)		(61.0	)%
Accrued postretirement benefits cost		448.7		531.2		(82.5	)		(15.5	)%
Deferred income taxes		6.2		6.0		0.2			3.3	%
Other non-current liabilities		113.4		105.3		8.1			7.7	%
Total non-current liabilities	$	1,212.9	$	1,518.7	$	(305.8	)		(20.1	)%

The decrease in accrued pension cost during the first half of 2011 was primarily due to the Company’s contributions of approximately $233.8 million to its global defined benefit pension plans. The decrease in accrued postretirement benefits cost during the first half of 2011 was primarily due to a contribution of $75 million to a Voluntary Employee Benefit Association (VEBA) trust to fund healthcare benefits.

Shareholders’ Equity:

	June 30,			December 31,
	2011			2010			$ Change			% Change
Common stock	$	936.3		$	934.8		$	1.5			0.2	%
Earnings invested in the business		1,823.5			1,626.4			197.1			12.1	%
Accumulated other comprehensive loss		(559.4	)		(624.7	)		65.3			10.5	%
Treasury shares		(11.7	)		(11.5	)		(0.2	)		(1.7	)%
Noncontrolling interest		17.6			16.8			0.8			4.8	%
Total shareholders’ equity	$	2,206.3		$	1,941.8		$	264.5			13.6	%

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Earnings invested in the business increased in the first six months of 2011 by net income of $234.2 million, partially offset by dividends declared of $37.1 million. The decrease in accumulated other comprehensive loss was primarily due to the effect of foreign currency translation adjustments of $46.5 million due to the weakening of the U.S. dollar relative to other currencies, such as the Euro and the Romanian lei. See “Foreign Currency” for further discussion regarding the impact of foreign currency translation. In addition, the decrease in accumulated other comprehensive loss was due to the recognition of prior year service costs and actuarial losses for defined benefit pension and postretirement benefit plans.

Cash Flow:

	For the Six Months Ended June 30,
	2011			2010			$ Change
Net cash (used) provided by operating activities	$	(162.9	)	$	164.0		$	(326.9	)
Net cash used by investing activities		(61.0	)		(37.4	)		(23.6	)
Net cash used by financing activities		(41.9	)		(49.9	)		8.0
Effect of exchange rate changes on cash		21.5			(36.0	)		57.5
Increase in cash and cash equivalents	$	(244.3	)	$	40.7		$	(285.0	)

Operating activities used net cash of $162.9 million in the first six months of 2011, after providing net cash of $164.0 million in the first six months of 2010. This change was primarily due to higher pension contributions and other postretirement benefit payments, as well as higher cash used by working capital items, partially offset by higher net income. Pension and other postretirement benefit contributions and payments were $331.8 million for the first six months of 2011, compared to $133.6 million for the first six months of 2010.

The following chart displays the impact of working capital items on cash during the first six months of 2011 and 2010:

	For the Six Months Ended
	June 30,
	2011			2010
Cash Provided (Used):
Accounts receivable	$	(191.7	)	$	(103.8	)
Inventories		(86.6	)		(45.7	)
Trade accounts payable		46.9			67.5
Other accrued expenses		(38.8	)		15.4

Accounts receivable, inventories and trade accounts payable increased in the first six months of 2011 primarily due to higher volumes compared to the first six months of 2010. Other accrued expenses used cash in 2011 after providing cash in 2010 due to the payout of the 2010 performance-based compensation in the first quarter of 2011.

The net cash used by investing activities of $61.0 million for the first six months of 2011 increased from the same period in 2010 as a result of an increase in capital expenditures of $20.6 million and an increase in short-term investments of $13.3 million, partially offset by higher proceeds from the disposals of property, plant and equipment and proceeds from the disposal of the Company’s equity investment in ICS. The Company expects capital expenditures to be approximately $210 million in 2011, compared to $115 million in 2010.

The net cash used by financing activities was $41.9 million in the first six months of 2011, after using cash of $49.9 million in the first six months of 2010. The Company increased its net borrowings by $1.4 million, net of restricted cash, during the first six months of 2011 after reducing its net borrowings by $18.8 million during the first six months of 2010. This change was partially offset by a $15.8 million increase in cash dividends paid to shareholders in the first six months of 2011.

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Liquidity and Capital Resources:

At June 30, 2011, cash and cash equivalents of $632.8 million exceeded total debt of $520.9 million. At December 31, 2010, cash and cash equivalents of $877.1 million exceeded total debt of $513.7 million. Cash in excess of debt as a percentage of total capital was 5.6% and 23.0%, respectively, at June 30, 2011 and December 31, 2010.

Reconciliation of total debt to net debt and the ratio of net debt to capital:

Net Debt:

	June 30,			December 31,
	2011			2010
Short-term debt	$	22.9		$	22.4
Current portion of long-term debt		7.4			9.6
Long-term debt		490.6			481.7
Total debt		520.9			513.7
Less: Cash and cash equivalents		(632.8	)		(877.1	)
Restricted cash		(4.8	)		—
Net (cash) debt	$	(116.7	)	$	(363.4	)

Ratio of Net Debt to Capital:

	June 30,			December 31,
	2011			2010
Net (cash) debt	$	(116.7	)	$	(363.4	)
Shareholders’ equity		2,206.3			1,941.8
Net (cash) debt + shareholders’ equity (capital)	$	2,089.6		$	1,578.4
Ratio of net (cash) debt to capital		(5.6	)%		(23.0	)%

The Company presents net (cash) debt because it believes net (cash) debt is more representative of the Company’s financial position than total debt.

At June 30, 2011, the Company had no outstanding borrowings under its two-year Asset Receivable Securitization Financing Agreement (Asset Securitization Agreement), which provides for borrowings up to $150 million, subject to certain borrowing base limitations, and is secured by certain domestic trade receivables of the Company. The Company had full availability under the Asset Securitization Agreement at June 30, 2011.

On May 11, 2011, the Company amended and restated its Senior Credit Facility, replacing the former senior credit facility, which was due to expire on July 10, 2012. The Senior Credit Facility now matures on May 11, 2016. At June 30, 2011, the Company had no outstanding borrowings under the Senior Credit Facility but had letters of credit outstanding totaling $17.2 million, which reduced the availability under the Senior Credit Facility to $482.8 million. Under the Senior Credit Facility, the Company has two financial covenants: a consolidated leverage ratio and a consolidated interest coverage ratio. At June 30, 2011, the Company was in full compliance with the covenants under the Senior Credit Facility and its other debt agreements. The maximum consolidated leverage ratio permitted under the Senior Credit Facility is 3.25 to 1.0. As of June 30, 2010, the Company’s consolidated leverage ratio was 0.63 to 1.0. The minimum consolidated interest coverage ratio permitted under the Senior Credit Facility is 4.0 to 1.0. As of June 30, 2011, the Company’s consolidated interest coverage ratio was 24.34 to 1.0.

The interest rate under the Senior Credit Facility is based on the Company’s consolidated leverage ratio. In addition, the Company pays a facility fee based on the consolidated leverage ratio multiplied by the aggregate commitments of all of the lenders under the Senior Credit Facility.

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Other sources of liquidity include lines of credit for certain of the Company’s foreign subsidiaries, which provide for borrowings up to $331.3 million. The majority of these lines are uncommitted. At June 30, 2011, the Company had borrowings outstanding of $50 million and guarantees of $2.8 million, which reduced the availability under these facilities to $278.5 million.

The Company expects that any cash requirements in excess of cash on hand and cash generated from operating activities will be met by the committed funds available under its Asset Securitization Agreement and the Senior Credit Facility. The Company believes it has sufficient liquidity to meet its obligations through at least the term of the Senior Credit Facility.

The Company expects to remain in compliance with its debt covenants. However, the Company may need to limit its borrowings under the Senior Credit Facility or other facilities in order to remain in compliance. As of June 30, 2011, the Company could have borrowed the full amounts available under the Senior Credit Facility and Asset Securitization Agreement and would have still been in compliance with its debt covenants.

The Company expects to continue to generate cash from operations of approximately $200 million in 2011, as the Company continues to experience improved operating margins. In addition, the Company expects to increase capital expenditures by approximately $95 million in 2011 compared to 2010. The Company also expects to make approximately $245 million in pension contributions in 2011, compared to $230 million in 2010, of which $233.8 million has been contributed to date.

Financing Obligations and Other Commitments:

During the first six months of 2011, the Company made cash contributions of approximately $233.8 million to its global defined benefit pension plans, of which $226.4 million was discretionary. The Company also contributed $75 million to a VEBA trust to fund retiree healthcare costs. The Company currently expects to make contributions to its global defined benefit pension plans totaling approximately $245 million in 2011. The Company may consider making additional discretionary contributions to either its global defined benefit pension plans or its postretirement benefit plans during 2011. Returns for the Company’s global defined benefit pension plan assets in 2010 were significantly above the expected rate of return assumption of 8.75% due to broad increases in global equity markets. These favorable returns positively impacted the funded status of the plans at the end of 2010 and are expected to result in lower pension expense in 2011. However, the impact of these favorable returns will be offset by the impact of the lower discount rate for expense in 2011, compared to 2010. Returns for the Company’s U.S. defined benefit plan pension assets for the first six months of 2011 were approximately 4.75%.

During the first six months of 2011, the Company purchased 500,000 shares of common stock for approximately $25.3 million under the Company’s 2006 common stock purchase plan. This plan authorizes the Company to buy, in the open market or in privately negotiated transactions, up to four million shares of common stock, which are to be held as treasury shares and used for specified purposes, for up to an aggregate amount of $180 million. The authorization expires on December 31, 2012. As of June 30, 2011, the Company had purchased 1.5 million shares of its common stock for an aggregate amount of approximately $54.6 million under this plan.

The Company does not have any off-balance sheet arrangements with unconsolidated entities or other persons.

Critical Accounting Policy and Estimates:

The Company’s financial statements are prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. The Company reviews its critical accounting policies throughout the year and believes the following critical policy affects management’s significant judgments and estimates used in preparation of the Consolidated Financial Statements and should be read in conjunction with the critical accounting policies and estimates included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.

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Other Matters:

Foreign Currency:

Assets and liabilities of subsidiaries 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 quarter. Related translation adjustments are reflected as a separate component of accumulated other comprehensive loss. Foreign currency gains and losses resulting from transactions are included in the Consolidated Statement of Income.

Foreign currency exchange losses included in the Company’s operating results for the second quarter of 2011 were $0.6 million, compared to a gain of $6.9 million during the second quarter of 2010. Foreign currency exchange losses included in the Company’s operating results for the six months ended June 30, 2011 were $2.7 million, compared to a gain of $5.3 million during the six months ended June 30, 2010. For the six months ended June 30, 2011, the Company recorded a positive non-cash foreign currency translation adjustment of $46.5 million that increased shareholders’ equity, compared to a negative non-cash foreign currency translation adjustment of $71.0 million that decreased shareholders’ equity for the six months ended June 30, 2010. The foreign currency translation adjustments for the six months ended June 30, 2011 were positively impacted by the weakening of the U.S. dollar relative to other currencies, such as the Euro and the Romanian lei.

Quarterly Dividend:

On August 2, 2011, the Company’s Board of Directors declared a quarterly cash dividend of $0.20 per share. The dividend will be paid on September 2, 2011 to shareholders of record as of August 19, 2011. This will be the 357th consecutive dividend paid on the common stock of the Company.

Forward-Looking Statements

Certain statements set forth in this Form 10-Q and in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 (including the Company’s forecasts, beliefs and expectations) that are not historical in nature are “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. In particular, Management’s Discussion and Analysis contains numerous forward-looking statements. Forward-looking statements generally will be accompanied by words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “guidance,” “intend,” “may,” “possible,” “potential,” “predict,” “project” or other similar words, phrases or expressions. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this Form 10-Q. The Company cautions readers that actual results may differ materially from those expressed or implied in forward-looking statements made by or on behalf of the Company due to a variety of factors, such as:

• deterioration in world economic conditions, including additional adverse effects from the global economic slowdown, terrorism or hostilities. This includes: political risks associated with the potential instability of governments and legal systems in countries in which the Company or its customers conduct business, and changes in currency valuations;

• the effects of fluctuations in customer demand on sales, product mix and prices in the industries in which the Company operates. This includes: the ability of the Company to respond to the rapid changes in customer demand, the effects of customer bankruptcies or liquidations, the impact of changes in industrial business cycles and whether conditions of fair trade continue in the U.S. markets;

• competitive factors, including changes in market penetration, increasing price competition by existing or new foreign and domestic competitors, the introduction of new products by existing and new competitors and new technology that may impact the way the Company’s products are sold or distributed;

• changes in operating costs. This includes: the effect of changes in the Company’s manufacturing processes; changes in costs associated with varying levels of operations and manufacturing capacity; higher cost and availability of raw materials and energy; the Company’s ability to mitigate the impact of fluctuations in raw materials and energy costs and the operation of the Company’s surcharge mechanism; changes in the expected costs associated with product warranty claims; changes resulting from inventory management and cost reduction initiatives and different levels of customer demands; the effects of unplanned work stoppages; and changes in the cost of labor and benefits;

36

• the success of the Company’s operating plans; the ability to integrate acquired companies; the ability of acquired companies to achieve satisfactory operating results, including Philadelphia Gear’s results being accretive to earnings; and the Company’s ability to maintain appropriate relations with unions that represent Company associates in certain locations in order to avoid disruptions of business;

• unanticipated litigation, claims or assessments. This includes, but is not limited to, claims or problems related to intellectual property, product liability or warranty, environmental issues, and taxes;

• changes in worldwide financial markets, including availability of financing and interest rates, which affect: the Company’s cost of funds and/or ability to raise capital; the Company’s pension obligations and investment performance; and/or customer demand and the ability of customers to obtain financing to purchase the Company’s products or equipment that contain the Company’s products; and

• those items identified under Item 1A. Risk Factors in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.

Additional risks relating to the Company’s business, the industries in which the Company operates or the Company’s common stock may be described from time to time in the Company’s filings with the Securities and Exchange Commission. All of these risk factors are difficult to predict, are subject to material uncertainties that may affect actual results and may be beyond the Company’s control.

Readers are cautioned that it is not possible to predict or identify all of the risks, uncertainties and other factors that may affect future results and that the above list should not be considered to be a complete list. Except as required by the federal securities laws, the Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

37

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Refer to information appearing under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Form 10-Q. Furthermore, a discussion of market risk exposures is included in Part II, Item 7A. Quantitative and Qualitative Disclosure about Market Risk, of the Company’s Annual Report on Form 10-K for the year ended December 31, 2010. There have been no material changes in exposures to market risk since the discussion included in the Company’s Annual Report on Form 10-K referenced above.

Item 4. Controls and Procedures

(a)	Disclosure Controls and Procedures
	As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s principal executive officer and principal financial officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)). Based upon that evaluation, the principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report.
(b)	Changes in Internal Control Over Financial Reporting
	During the Company’s most recent fiscal quarter, there have been no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The Company is involved in various claims and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters is not expected to have a materially adverse effect on the Company’s consolidated financial position or results of operations.

Item 1A. Risk Factors

Our Annual Report on Form 10-K for the fiscal year ended December 31, 2010 includes a detailed discussion of our risk factors. There have been no material changes to the risk factors included the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Issuer of Purchases of Common Stock

The following table provides information about purchases by the Company during the quarter ended June 30, 2011 of its common stock.

					Total number		Maximum
					of shares		number of
					purchased as		shares that
					part of publicly		may yet
	Total number		Average		announced		be purchased
	of shares		price paid		plans or		under the plans
Period	purchased(1)		per share(2)		programs		or programs(3)
4/1/11 — 4/30/11		21,636	$	55.92		—		2,500,000
5/1/11 — 5/31/11		2,940		52.62		—		2,500,000
6/1/11 — 6/30/11		1,010		48.61		—		2,500,000
Total		25,586	$	55.25		—		2,500,000

(1)	The shares purchased represent shares of the Company’s common stock that are owned and tendered by employees to exercise stock options, and to satisfy withholding obligations in connection with the exercise of stock options and vesting of restricted shares.
(2)	For shares tendered in connection with the vesting of restricted shares, the average price paid per share is an average calculated using the daily high and low of the Company’s common stock as quoted on the New York Stock Exchange at the time of vesting. For shares tendered in connection with the exercise of stock options, the price paid is the real-time trading stock price at the time the options are exercised.
(3)	Pursuant to the Company’s 2006 common stock purchase plan, the Company may purchase up to four million shares of common stock at an amount not to exceed $180 million in the aggregate. The Company may purchase shares under its 2006 common stock purchase plan until December 31, 2012. The Company may purchase shares from time to time in open market purchases or privately negotiated transactions. The Company may make all or part of the purchases pursuant to accelerated share purchases or Rule 10b5-1 plans.

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Item 6. Exhibits

10.1	Form of Employee Excess Benefits Agreement, entered into with certain Executive Officers and certain key employees of the Company on or after January 1, 2011.
12	Computation of Ratio of Earnings to Fixed Charges
31.1	Certification of James W. Griffith, President and Chief Executive Officer (principal executive officer) of The Timken Company, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Glenn A. Eisenberg, Executive Vice President — Finance and Administration (principal financial officer) of The Timken Company, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Certifications of James W. Griffith, President and Chief Executive Officer (principal executive officer) and Glenn A. Eisenberg, Executive Vice President — Finance and Administration (principal financial officer) of The Timken Company, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	Financial statements from the quarterly report on Form 10-Q of The Timken Company for the quarter ended June 30, 2011, filed on August 4, 2011, formatted in XBRL: (i) the Consolidated Statements of Income, (ii) the Consolidated Balance Sheets, (iii) the Consolidated Statements of Cash Flows and (iv) the Notes to the Consolidated Financial Statements.

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SIGNATURES

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

	THE TIMKEN COMPANY
Date: August 4, 2011	By	/s/ James W. Griffith
		James W. Griffith
		President, Chief Executive Officer and Director (Principal Executive Officer)
Date: August 4, 2011	By	/s/ Glenn A. Eisenberg
		Glenn A. Eisenberg
		Executive Vice President — Finance and Administration (Principal Financial Officer)

EX-10.1

Exhibit 10.1

EMPLOYEE EXCESS BENEFITS AGREEMENT

          THIS AGREEMENT, made this ____ day of _______, 201_, by and between _____________________ (the “Employee”), and THE TIMKEN COMPANY (“Timken”), an Ohio corporation having its principal offices at Canton, Ohio.

          WHEREAS, the Employee has been employed by Timken since ____________________ and is currently serving as ____________________ in a capable and efficient manner; and

          WHEREAS, Timken desires to retain the services of the Employee and to provide additional retirement compensation (hereinafter referred to as “Excess Benefits”) to the Employee for his services; and

          WHEREAS, the Employee is willing to continue in the employ of Timken until his retirement, provided that Timken will pay Excess Benefits to the Employee upon the Employee’s retirement and/or to the Employee’s Spouse upon the Employee’s death.

          NOW, THEREFORE, the parties covenant and agree as follows:

1. Timken shall provide the following Excess Benefits:

(a) Except as provided in Section 2(a), if, under the Amended and Restated Supplemental Pension Plan of The Timken Company (the “Supplemental Plan”), the Employee would be eligible for a benefit pursuant to paragraph 2(a) of the Supplemental Plan but for this Agreement and the Employee Terminates Employment (as defined in Section 4(a) of this Agreement) after having been an elected officer of Timken for five or more years, the Employee shall be eligible to receive a benefit in an amount equal to the difference between

(i)

the monthly pension the Employee would be entitled to receive under the 1984 Retirement Plan for Salaried Employees of The Timken Company, the Retirement Plan for Salaried Employees of The Timken Company and the Timken-Latrobe-MPB-Torrington Retirement Plan (hereinafter the “Retirement Plans”) were it not for the limitations imposed by the Employee Retirement Income Security Act of 1974, as amended, (“ERISA”) and Sections 401 and 415 of the Internal Revenue Code of 1986, as amended (hereinafter collectively referred to as “the Code Limitations”), and

(ii)

the monthly pension he would actually receive under the Retirement Plans.

	If any portion of the Employee’s benefit under the Retirement Plans is not payable at the same time the Employee’s Excess Benefits are payable, the corresponding portion of the Excess Benefit under this Section 1(a) shall be determined by calculating such corresponding portion of the Excess Benefit that would be payable under Section 1(a) and that portion of the benefit that would be payable under the Retirement Plans at age 65 and then actuarially reducing such Excess Benefit from age 65 to the commencement date provided under this Agreement for the Excess Benefits. Any actuarial adjustments under this Section 1(a) shall be based on the “applicable mortality table,” as defined in Section 417(e)(3) of the Internal Revenue Code of 1986 (the “Code”) and the “applicable interest rate” as defined in Section 417(e)(3) of the Code, during the third calendar month (October) immediately preceding the first day of the calendar year in which the determination is made.
	The Excess Benefits to which the Employee is entitled under this Section 1(a) shall commence, subject to Section 3, on the first day of the month following the later of (A) the Employee’s Termination of Employment or (B) the Employee’s ____ birthday1. The form of payment of the Excess Benefits to which the Employee is entitled under this Section 1(a) shall be as specified under the provisions applicable to Participants under the Supplemental Plan.
(b)	If a married Employee dies after having been an elected officer of Timken for five or more years but prior to commencement of the Employee’s benefit payments and the Employee’s Spouse is entitled to a monthly pension under the Retirement Plans, Timken shall pay to the Employee’s Spouse an amount equal to the difference between the monthly pension the Employee’s Spouse would be entitled to receive under the Retirement Plans, were it not for the Code Limitations, and the monthly pension the Employee’s Spouse would actually receive under the Retirement Plans. Monthly payments shall be made until the Spouse’s death. A Spouse’s benefit under this Section 1(b), shall commence on the first day of the month following the later of (A) the Employee’s death, or (B) the date on which the Employee would have reached age 55.
(c)	Except as provided in Section 2(a), if the Employee Terminates Employment after having been an elected officer of Timken for five or more years, the Employee shall be entitled to a monthly benefit under this Agreement equal to 60% of one-twelfth of Final Average Earnings (as defined in the Retirement Plans without consideration of the pay limitation under Internal Revenue Code (“Code”) Section 401(a)(17) and based on a five non-consecutive year average), multiplied by the following ratio:

Years of Continuous Service (to a maximum of 15)

15

¹ This age should be 55 or the date elected by the participant under the Supplement Plan prior to Jan. 1, 2009 to be consistent with the Supplemental Plan and to avoid impermissible changes to timing of payment under Section 409A.

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reduced by each of the following:

(i)	the monthly payment from the Retirement Plans before any adjustments for optional forms of benefits are made but after any adjustment for early commencement,
(ii)	the monthly payment under subsection (a) above before any adjustments for optional forms of benefits are made but after any adjustment for early commencement, and
(iii)	the monthly annuity value of the account balance the employee would have accumulated under the Savings and Investment Pension (SIP) Plan and any other qualified defined contribution plans sponsored by Timken and the Post-Tax Savings Plan (the “Savings Plans”) on the date that Excess Benefits are to commence under this Section 1(c), but excluding amounts contributed by the Employee, such account balance being determined in the manner set forth in the next to last paragraph of this Section 1(c).

The benefit to which the Employee is entitled to receive under this Section 1(c) shall commence, subject to Section 3, on the first day of the month following the later of (A) the Employee’s Termination of Employment, or (B) the Employee’s ___ birthday,² and shall be paid in the form of a monthly annuity for the life of the Employee. “Continuous Service” shall mean the Employee’s years of ‘Continuous Service’ as determined under the applicable Retirement Plans or Savings Plans as of the Employee’s Termination of Employment or, if earlier, death. Notwithstanding any provision to the contrary, for purposes of the ratio set forth in the first paragraph of this Section 1(c), if an Employee who has been an elected officer of Timken for five or more years but who has less than 15 years of Continuous Service experiences an involuntary Termination of Employment as a result of a layoff and such Termination of Employment is not for Cause (as defined in Section 2(b), below), the Employee will be credited, as of Employee’s Termination of Employment, with the lesser of (C) two additional years of Continuous Service or (D) the number of years of Continuous Service necessary for the Employee’s total years of Continuous Service to equal 15.

In the event the benefits described in Sections 1(c)(i) and 1(c)(ii) are not payable immediately because the Employee has not met the service requirements in the Retirement Plans, for purposes of this section, the benefits will be reduced for early commencement in the same manner as if the Employee met the service requirement for immediate commencement.

For purposes of Section 1(c)(iii), the account balances related to the Savings Plans will be determined by (A) assuming the Employee received in an account held for the Employee under the Savings Plans the maximum amount of matching contributions at the rate specified for matching contributions in Exhibit B for each year he was an employee and eligible to participate in the Savings Plans and (B) assuming Timken’s contributions to the account held for the Employee under the Savings Plan, in addition to the matching

² See Footnote No. 1.

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	contributions described in (A), consisted only of the Core Contributions (as defined in the Savings Plans) under the Savings Plans at the rate specified for Core Contributions in Exhibit B for each year he was an employee and eligible for Core Contributions in the Savings Plans. Interest will be credited to such account at a rate of eight percent (8%) per annum beginning at the end of the year to which the contributions are attributable. The monthly annuity will be that which could be purchased on the date of the Employee’s Termination of Employment with the account balance at the date that Excess Benefits are to commence under this Section 1(c) from an insurance company which at the time of purchase has the highest rating by A. M. Best assuming that the annuity is purchased with assets from a qualified retirement plan, is based on group rates, is on a no commission basis and is payable for the Employee’s lifetime, with no continuation after the Employee’s death.
	Notwithstanding the foregoing provisions of this subsection (c), if the Employee’s benefit payable under this subsection (c) commences prior to attaining age 62, such benefit (before the reductions described in Sections 1(c)(i), 1(c)(ii) and 1(c)(iii) are made) shall be reduced by 4% for each year by which the commencement date of the benefit precedes age 62.
(d)	If a married Employee is eligible for a benefit under Section 1(c), his surviving spouse shall be entitled to a monthly benefit after the death of the Employee as follows:

(i)	If a married Employee dies after the Employee has started to receive the benefit provided for under Section 1(c), the Employee’s surviving spouse shall be entitled to receive an immediate monthly benefit equal to 50% of the amount the Employee was receiving pursuant to Section 1(c). Such benefit will commence on the first day of the month next following the month of the Employee’s death.
(ii)	If a married Employee dies before the Employee has started to receive the benefit provided for under Section 1(c) but after having been an elected officer of Timken for five or more years, the Employee’s Surviving Spouse shall be entitled to a monthly benefit equal to 50% of the amount the Employee would have received pursuant to Section 1(c) if the Employee had commenced to receive that monthly benefit at the Surviving Spouse’s benefit commencement date specified below, determined by taking into account the Employee’s Final Average Earnings and years of Continuous Service as of the Employee’s date of death. The surviving spouse’s benefit payments pursuant to this subsection (ii) will commence on the first day of the month next following the later of (A) the Employee’s death, or (B) the date on which the Employee would have reached age 55.
(iii)	Monthly payments to a surviving spouse pursuant to this Section 1(d) shall be made until the spouse’s death.

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2. (a) If (i) the Employee voluntarily terminates employment with Timken prior to having been an elected officer of Timken for five or more years, (ii) Timken discharges the Employee or requests that he resign his employment, prior to the Employee having been an elected officer of Timken for five or more years, or (iii) the Employee’s employment with Timken terminates for Cause, no Excess Benefits shall become due and payable to the Employee and this Agreement shall be considered terminated.

(b) For purposes of this Section 2, a termination shall be deemed to have been for “Cause” only if based on the fact that the Employee has done any of the following acts and such is materially harmful to Timken:

(i)	An intentional act of fraud, embezzlement or theft in connection with the Employee’s duties with Timken and resulting or intended to result directly or indirectly in substantial personal gain to the Employee at the expense of Timken;
(ii)	Intentional wrongful disclosure of secret processes or confidential information of Timken or any of its subsidiaries; or
(iii)	Intentional wrongful engagement in any Competitive Activity which would constitute a material breach of the Employee’s duty of loyalty to Timken.
	For purposes of this Section 2, the term “Competitive Activity” shall mean the Employee’s participation, without the written consent of an officer of Timken, in the management of any business enterprise if such enterprise engages in substantial and direct competition with Timken and such enterprise’s sales of any product or service competitive with any product or service of Timken amounted to 25% of such enterprise’s net sales for its most recently completed fiscal year and if Timken’s net sales of said product or service amounted to 25% of Timken’s net sales for its most recently completed fiscal year. “Competitive Activity” shall not include (A) the mere ownership of securities in any enterprise and exercise of rights appurtenant thereto or (B) participation in the management of any enterprise or business operation thereof other than in connection with the competitive operation of such enterprise.
	For purposes of this Section 2(b), no act, or failure to act, on the part of the Employee shall be deemed “intentional” unless done, or omitted to be done, by the Employee not in good faith and without reasonable belief that his action or omission was in or not opposed to the best interest of Timken. Notwithstanding the foregoing, the Employee shall not be deemed to have been terminated for “Cause” hereunder unless and until there shall have been delivered to the Employee a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the

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Directors then in office at a meeting of the Directors called and held for such purpose (after reasonable notice to the Employee and an opportunity for the Employee, together with his counsel, to be heard before the Directors), finding that, in the good faith opinion of the Directors, the Employee had committed an act set forth in subsection (b) of this Section and specifying the particulars thereof in detail. Nothing herein shall limit the right of the Employee or his beneficiaries to contest the validity or propriety of any such determination.

3. Notwithstanding any provision of this Agreement to the contrary, if the Employee is a “specified employee,” determined pursuant to procedures adopted by Timken in compliance with Section 409A of the Code, on the date the Employee Terminates Employment and if any portion of the payments to be received by the Employee are by reason of his Termination of Employment, then to the extent necessary to comply with Section 409A, amounts that would otherwise be payable pursuant to this Agreement during the six-month period immediately following the Employee’s Termination of Employment will instead be paid or made available on the earlier of (i) the first business day of the seventh month after the date of the Employee’s Termination of Employment, or (ii) the Employee’s death. Any benefit payments that are scheduled to be paid more than six months after such Employee’s Termination of Employment shall not be delayed and shall be paid in accordance with the schedule prescribed by Sections 1(a) and 1(c), as applicable.

4. (a) For purposes of this Agreement, “Terminates Employment” and “Termination of Employment” shall mean a termination of employment (within the meaning of Treasury Regulation Section 1.409A-1(h)(1)(ii)) with Timken and any member of its controlled group (as such term is used for purposes of ERISA and the Code, except that a 50% ownership or common control threshold shall be used to determine controlled group status instead of an 80% ownership or common control threshold). For purposes of the preceding sentence a termination of employment shall also include a permanent decrease in the level of bona fide services performed by the Employee after a certain date to a level that is 20% or less of the average level of bona fide services performed by the Employee over the immediately preceding 36-month period.

(b) Any references to the Employee’s Spouse herein shall mean the Employee’s Spouse at the time of the Employee’s death or commencement of the Employee’s Excess Benefits, whichever is applicable, under the Retirement Plans or Savings Plans if the Employee is not a participant in the Retirement Plans, provided that if a qualified domestic relations order provides that a former spouse of the Employee is to be considered the Employee’s Spouse for purposes of pension benefits, Timken shall consider such former spouse of the Employee to be the Employee’s Spouse for purposes of this Agreement.

5. This Agreement shall be binding upon and shall inure to the benefit of Timken and the Employee and their respective successors and assigns; provided, however, that, except as set forth herein, no rights to any benefit under this Agreement shall be transferable or assignable by the Employee or any other person, or be subject to alienation, encumbrance, garnishment,

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	attachment, execution or levy of any kind, voluntary or involuntary. Any such attempted assignment or transfer shall terminate this Agreement and Timken shall have no further liability hereunder.
6.	Timken is hereby designated as the Named Fiduciary of this Agreement, in accordance with ERISA. The Named Fiduciary shall have the authority to control and manage the operation and administration of this Agreement and is hereby designated as the Agreement Administrator.
7.	The obligations of Timken hereunder constitute an unsecured promise of Timken to make payment of the amounts provided for in this Agreement. No property of Timken is or shall be, by reason of this Agreement, held in trust for the Employee, or any other person, and neither the Employee nor any other person shall have, by reason of this Agreement, any rights, title or interest of any kind in or to any property of Timken.
	Notwithstanding the foregoing paragraph, upon the earlier to occur of (i) a Change of Control that involves a transaction that was not approved by the Board of Directors, and was not recommended to Timken’s shareholders by the Board of Directors, (ii) a declaration by the Board of Directors that the trusts under the Employee Excess Benefits Agreements should be funded in connection with a Change of Control that involves a transaction that was approved by the Board of Directors, or was recommended to shareholders by the Board of Directors, or (iii) a declaration by the Board of Directors that a Change of Control is imminent, Timken shall promptly, to the extent it has not previously done so, and in any event within five business days fund a trust established for the sole purpose of the payment of the amounts payable under this Agreement. The amount to be contributed by Timken prior to the Change of Control shall be calculated, using the actuarial assumptions set forth in Exhibit A, by Towers Watson or another independent actuary appointed by Timken. Notwithstanding any provision of this Agreement to the contrary, no amount shall be transferred to a trust in accordance with this paragraph if, pursuant to Section 409A(b)(3)(A) of the Code, such amount would, for purposes of Section 83 of the Code, be treated as property transferred in connection with the performance of services. Upon a Change of Control, the rights of the Employee under this Agreement shall be fully vested and shall be forfeited only if the Employee voluntarily terminates his employment prior to completing five years of service as an elected officer of Timken.
	For purposes of this Agreement, “Change of Control” shall mean the occurrence of any of the following events:

(a) The sale or transfer of all or substantially all of the assets of Timken; or the merger, consolidation or reorganization of Timken with or into another corporation or entity with the result that upon the completion of the transaction, less than 51% of the outstanding securities entitled to vote generally in the election of directors or other capital interests of the surviving corporation or entity are owned, directly or indirectly, by the pre-transaction shareholders of Timken;

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(b)	A Schedule 13D or 14D-1F report (or any successor schedule, form or report promulgated pursuant to the Securities Exchange Act of 1934 (the “Exchange Act”)), is filed with the United States Securities and Exchange Commission (the “SEC”) disclosing that any person (including a person as defined in Sections 13(d)(3) or 14(d)(2) of the Exchange Act) has become the beneficial owner (as defined in SEC Rule 13d-3) of securities representing 30% or more of the combined voting power of the outstanding shares of Timken;
(c)	Timken files a report or proxy statement with the SEC that includes a disclosure, including, but not limited to, a disclosure in Item 1 of Form 8-K or Item 6(e) of Schedule 14A, that a change of control of Timken has or may have occurred or will or may occur in the future pursuant to any existing contract or transaction; and
(d)	The individuals who at the beginning of any two consecutive calendar year period constituted the Board of Directors cease for any reason to constitute a majority of the Board of Directors; provided, however, this subsection (d) shall not apply if the nomination of each new Director elected during such two-year period was approved by the vote of at least two-thirds of the Directors of Timken still in office who were Directors of Timken on the first day of such two-year period.

8.	In the event that, in its discretion, Timken purchases an insurance policy or policies insuring the life of the Employee to allow Timken to recover in whole or in part, the cost of providing the benefits under this Agreement, neither the Employee nor any beneficiary shall have any right whatsoever therein; Timken shall be the sole owner and beneficiary of such insurance policy or policies and shall possess and may exercise all incidents of ownership therein.
9.	All questions of interpretation, construction or application arising under this Agreement shall be decided by the Board of Directors of Timken and its decision shall be final and conclusive upon all parties. Timken, in its discretion, shall make all determinations as to rights to benefits under this Agreement. Any decision by Timken denying a claim for benefits under this Agreement shall be stated in writing and delivered or mailed to the Employee or the Employee’s Spouse. Such decision shall (i) be made and issued in accordance with the claims regulations issued by the Department of Labor, (ii) set forth the specific reasons for the denial of the claim, and (iii) state that the decision may be appealed by the Employee.
10.	Nothing contained in this Agreement shall be construed to be a contract of employment nor as conferring upon the Employee the right to continue in the employ of Timken in any capacity. It is expressly understood by the parties hereto that this Agreement relates exclusively to Excess Benefits and is not intended to be an employment contract.
11.	This Agreement may not be amended, altered or modified, except by a written instrument signed by the parties hereto. If Timken and the Employee previously entered into an Employee Excess Benefits Agreement, this Agreement shall supersede the provisions of the prior agreement and the Employee shall be entitled to benefits solely under this Agreement.

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12.	Following Termination of Employment, the Employee shall comply with the Restriction on Competition in paragraph 9 of the Supplemental Plan. If the Employee engages in activity prohibited by this Section, then in addition to all other remedies available to Timken, Timken shall be released from any obligation under this Agreement to pay benefits to the Employee or the Employee’s Spouse under this Agreement. Any such cessation of payments shall not reduce any monetary damages that may be available to Timken as a result of the Employee’s breach.
13.	The failure at any time to require performance of any provision expressed herein shall in no way affect the right thereafter to enforce such provision; nor shall the waiver of any breach of any provision expressed herein be taken or held to be a waiver of any succeeding breach of any such provision or as a waiver of a provision itself.
	In the event that any provision or term of this Agreement is finally determined by any judicial, quasi-judicial or administrative body to be void or not enforceable for any reason, it is the agreed upon intent of the parties hereto that all other provisions or terms of the Agreement shall remain in full force and effect and that the Agreement shall be enforceable as if such void or unenforceable provision or term had never been included herein.
14.	Every designation, election, revocation or notice authorized or required hereunder shall be deemed delivered to Timken: (a) on the date it is personally delivered to Timken offices at 1835 Dueber Avenue, S.W., Canton, OH 44706-0927 or (b) three business days after it is sent by registered or certified mail, postage prepaid, addressed to Timken at the offices indicated above. Every designation, election, revocation or notice authorized or required hereunder which is to be delivered to the Employee or a beneficiary shall be deemed delivered to the Employee or beneficiary: (a) on the date it is personally delivered to such individual (either physically or through interactive electronic communication), or (b) three business days after it is sent by registered or certified mail, postage prepaid, addressed to such individual at the last address shown for him on Timken records. Any notice required hereunder may be waived by the person entitled thereto.
15.	In the event the Employee or the Employee’s Spouse is declared incompetent and a guardian, conservator or other person is appointed and legally charged with the care of the person or the person’s estate, the payments under this Agreement to which the Employee or the Employee’s Spouse is entitled shall be paid to such guardian, conservator or other person legally charged with the care of the person or the estate. Except as provided hereinabove, when Timken, in its sole discretion, determines that the Employee or the Employee’s Spouse is unable to manage his financial affairs, Timken may make distribution(s) of the amounts payable to the Employee or the Employee’s Spouse to any one or more of the spouse, lineal ascendants or descendants or other closest living relatives of the Employee or the Employee’s Spouse who demonstrate to the satisfaction of Timken the propriety of making such distribution(s). Any payment so made shall be made at the same time and in the same form as such benefit would be made to the Employee and shall be in complete discharge of

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	any liability under this Agreement for such payment. Timken shall not be required to see to the application of any such distribution made under this Section 15.
16.	This Agreement shall be subject to and construed under the laws of the State of Ohio.

17. (a) To the extent applicable, it is intended that this Agreement (including all amendments thereto) comply with the requirements of Section 409A of the Code and the Treasury regulations and other authoritative guidance issued thereunder (“Section 409A”). This Agreement shall be administered in a manner consistent with this intent.

(b) Notwithstanding any provision of this Agreement to the contrary, in light of the uncertainty with respect to the proper application of Section 409A, Timken reserves the right to make amendments to this Agreement as Timken deems necessary or desirable to avoid the imposition of taxes or penalties under Section 409A of the Code. In any case, the Employee shall be solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on the Employee or for the Employee’s account in connection with this Agreement and neither Timken nor any of its affiliates shall have any obligation to indemnify or otherwise hold Employee harmless from any or all of such taxes or penalties.

               IN WITNESS WHEREOF, the parties hereto have executed this Agreement on this ____ day of ______________,201__.

	THE TIMKEN COMPANY
Employee	By: William R. Burkhart
	Its: Senior Vice President & General Counsel

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EXHIBIT A

The amount to be contributed to a trust fund pursuant to Section 7 of this Agreement to insure the performance of Timken’s obligations under this Agreement in the event of a Change of Control shall be calculated using the “applicable mortality table,” and the “applicable interest rate” as defined in Code Section 417(e)(3), during the third calendar month immediately preceding the date in which the contribution to the trust fund occurs.

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EXHIBIT B

Assumptions for Determination of Savings Plans Account Balances

Matching Contributions Rate:

4.5% of the Employee’s Gross Earnings (as defined in Timken’s Savings and Investment Pension (SIP) Plan as of January 1, 2011³ for purposes of matching contributions for highly compensated employees)

Core Contributions Rate:

The contribution percentage rate of the Core Contribution is based on the sum of the Employee’s full years of Credited Service and age as of December 31 of the previous calendar year with any fractional portion of a year of Credited Service or age disregarded, and calculated as follows:

Age Plus Years of Credited Service*	Contribution Percentage Rate
0-34	1.00% of Gross Earnings**
35-44	2.00% of Gross Earnings**
45-54	3.00% of Gross Earnings**
55-64	3.50% of Gross Earnings**
65-74	4.00% of Gross Earnings**
75+	4.50% of Gross Earnings**

*	“Credited Service” has the meaning given to such term in Timken’s Savings and Investment Pension (SIP) Plan as of January 1, 2011.4
**	“Gross Earnings” has the meaning given to such term in Timken’s Savings and Investment Pension (SIP) Plan as of January 1, 20115 for purposes of matching contributions for highly compensated employees.
3	If the restatement of the Savings and Investment Plan effective January 1, 2011 has been amended, this date should be reviewed to determine if a more recent version of the Savings and Investment Plan should be cross-referenced. Any changes to the Savings and Investment Plan should be considered to ensure compliance with Section 409A in light of the cross-reference.
4	See footnote 3.
5	See footnote 3.

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EX-12

EXHIBIT 12

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

(Dollars in millions, except ratio amounts)

	Six Months Ended June 30,				Years Ended December 31,
	2011		2010		2010			2009			2008			2007		2006
Income (loss) from continuing operations before tax		355.0		194.8		405.5			(94.2	)		439.6			264.7		208.6
Share of undistributed (losses) income from 50%-or-less-owned affiliates, excluding affiliates with guaranteed debt		0.3		—		(0.2	)		0.9			(1.4	)		1.3		5.7
Amortization of capitalized interest		1.0		1.5		2.0			1.9			1.8			1.4		1.2
Interest expense		19.1		19.6		38.2			41.9			44.4			42.3		49.0
Interest portion of rental expense		3.6		4.0		8.0			8.5			8.7			7.5		5.0
Earnings (loss)		379.0		219.9		453.5			(41.0	)		493.1			317.2		269.5
Interest		19.3		19.8		38.9			43.7			47.4			48.0		52.3
Interest portion of rental expense		3.6		4.0		8.0			8.5			8.7			7.5		5.0
Fixed Charges		22.9		23.8		46.9			52.2			56.1			55.5		57.3
Ratio of Earnings to Fixed Charges		16.55		9.24		9.67			(0.79	)		8.79			5.72		4.70

EX-31.1

EXHIBIT 31.1

     PRINCIPAL EXECUTIVE OFFICER’S CERTIFICATIONS
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, James W. Griffith, certify that:

1. I have reviewed this Form 10-Q of The Timken Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting: and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 4, 2011	By	/s/ James W. Griffith
		James W. Griffith,
		President and Chief Executive Officer (Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

     PRINCIPAL FINANCIAL OFFICER’S CERTIFICATIONS
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Glenn A. Eisenberg, certify that:

1. I have reviewed this Form 10-Q of The Timken Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting: and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 4, 2011	By	/s/ Glenn A. Eisenberg
		Glenn A. Eisenberg
		Executive Vice President — Finance and Administration (Principal Financial Officer)

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     In connection with the Quarterly Report of The Timken Company (the “Company”) on Form 10-Q for the period ended June 30, 2011, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned officers of the Company certifies, pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley Act of 2002, that, to such officer’s knowledge:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.

Date: August 4, 2011	By	/s/ James W. Griffith
		Name:	James W. Griffith
		Title:	President and Chief Executive Officer (Principal Executive Officer)
	By	/s/ Glenn A. Eisenberg
		Name:	Glenn A. Eisenberg
		Title:	Executive Vice President — Finance and Administration (Principal Financial Officer)

     The foregoing certification is being furnished solely pursuant to 18 U.S.C. 1350 and is not being filed as part of the Report or as a separate disclosure document.

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Fair Value (Details Textuals) (USD $) In Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2011	Dec. 31, 2010
Schedule of Equity Method Investments [Line Items]
Impairment charges recognized on equity investment		$ (2.8)
Inventories at carrying value	4.7	4.7
Inventories, fair value	1.5	1.5
Equity investments, fair value	4.1	4.1
Long-term fixed-rate debt, fair value	478.8	478.8	468.7
Long-term fixed-rate debt, carrying value	434.3	434.3	430.4
The Company sold its Investment in ICS	4.8
Gain in Investment	0.5
ICS [Member]
Schedule of Equity Method Investments [Line Items]
Impairment charges recognized on equity investment		1.8
Endorsia [Member]
Schedule of Equity Method Investments [Line Items]
Impairment charges recognized on equity investment		$ 1.0

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Consolidated Balance Sheets (June 30, 2011 balances are unaudited) (USD $) In Millions	Jun. 30, 2011	Dec. 31, 2010
Current Assets
Cash and cash equivalents	$ 632.8	$ 877.1
Restricted cash	4.8	0
Accounts receivable, less allowances: 2011 - $21.8 million; 2010 - $27.6 million	718.8	516.6
Inventories, net	928.9	828.5
Deferred income taxes	100.5	100.4
Deferred charges and prepaid expenses	12.4	11.3
Other current assets	72.6	65.3
Total Current Assets	2,470.8	2,399.2
Property, Plant and Equipment - Net	1,243.1	1,267.7
Other Assets
Goodwill	226.5	224.4
Other intangible assets	124.2	129.2
Deferred income taxes	68.0	121.5
Other non-current assets	42.5	38.4
Total Other Assets	461.2	513.5
Total Assets	4,175.1	4,180.4
Current Liabilities
Short-term debt	22.9	22.4
Accounts payable	314.6	263.5
Salaries, wages and benefits	203.1	233.4
Income taxes payable	23.5	14.0
Deferred income taxes	0.9	0.7
Other current liabilities	183.5	176.3
Current portion of long-term debt	7.4	9.6
Total Current Liabilities	755.9	719.9
Non-Current Liabilities
Long-term debt	490.6	481.7
Accrued pension cost	154.0	394.5
Accrued postretirement benefits cost	448.7	531.2
Deferred income taxes	6.2	6.0
Other non-current liabilities	113.4	105.3
Total Non-Current Liabilities	1,212.9	1,518.7
Shareholders' Equity
Class I and II Serial Preferred Stock without par value: Authorized - 10,000,000 shares each class, none issued	0	0
Common stock without par value: Authorized - 200,000,000 shares Issued (including shares in treasury) (2011 - 98,375,135 shares; 2010 - 98,153,317 shares) Stated capital	53.1	53.1
Other paid-in capital	883.2	881.7
Earnings invested in the business	1,823.5	1,626.4
Accumulated other comprehensive loss	(559.4)	(624.7)
Treasury shares at cost (2011 - 230,626 shares; 2010 - 350,201 shares)	(11.7)	(11.5)
Total Shareholders' Equity	2,188.7	1,925.0
Noncontrolling interest	17.6	16.8
Total Equity	2,206.3	1,941.8
Total Liabilities and Equity	$ 4,175.1	$ 4,180.4

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Consolidated Balance Sheets (June 30, 2011 balances are unaudited) (Parenthetical) (USD $) In Millions, except Share data	Jun. 30, 2011	Dec. 31, 2010
Current Assets
Allowances for accounts receivable	$ 21.8	$ 27.6
Shareholders' Equity
Preferred stock, no par value (Class I & Class II Preferred stock)	$ 0	$ 0
Preferred stock, shares authorized (Class I & Class II Preferred stock)	10,000,000	10,000,000
Preferred stock, shares issued (Class I & Class II Preferred stock)	0	0
Common stock, no par value	$ 0	$ 0
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	98,375,135	98,153,317
Treasury shares	230,626	350,201

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Goodwill and Other Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2011

Goodwill and Other Intangible Assets (Tables) [Abstract]

Change in the carrying amount of goodwill

	Process		Aerospace
	Industries		and Defense		Steel		Total
Beginning Balance	$	50.0	$	162.3	$	12.1	$	224.4
Other		1.3		0.3		0.5		2.1
Total	$	51.3	$	162.6	$	12.6	$	226.5

Intangible assets

	As of June 30, 2011						As of December 31, 2010
	Gross				Net		Gross				Net
	Carrying		Accumulated		Carrying		Carrying		Accumulated		Carrying
	Amount		Amortization		Amount		Amount		Amortization		Amount
Intangible assets subject to amortization:
Customer relationships	$	81.5	$	20.8	$	60.7	$	82.0	$	18.6	$	63.4
Engineering drawings		2.0		2.0		—		2.0		2.0		—
Know-how		2.1		1.1		1.0		2.1		1.0		1.1
Industrial license agreements		0.4		0.1		0.3		0.4		0.1		0.3
Land-use rights		8.4		3.6		4.8		8.2		3.3		4.9
Patents		4.4		3.4		1.0		4.4		3.3		1.1
Technology use		38.9		7.3		31.6		39.0		6.3		32.7
Trademarks		6.0		5.1		0.9		6.0		5.0		1.0
PMA licenses		8.8		2.9		5.9		8.8		2.7		6.1
Non-compete agreements		2.7		2.1		0.6		2.7		1.9		0.8
Unpatented technology		7.6		6.4		1.2		7.6		6.0		1.6
	$	162.8	$	54.8	$	108.0	$	163.2	$	50.2	$	113.0
Intangible assets not subject to amortization:
Tradename	$	2.0			$	2.0	$	2.0			$	2.0
FAA air agency certificates		14.2				14.2		14.2				14.2
	$	16.2			$	16.2	$	16.2			$	16.2
Total intangible assets	$	179.0	$	54.8	$	124.2	$	179.4	$	50.2	$	129.2

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Document and Entity Information (USD $)	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Document and Entity Information [Abstract]
Entity Registrant Name	TIMKEN CO
Entity Central Index Key	0000098362
Document Type	10-Q
Document Period End Date	Jun. 30, 2011
Amendment Flag	false
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	Yes
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float		$ 2,269,831,634
Entity Common Stock, Shares Outstanding	98,144,509

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Fair Value (Details) (USD $) In Millions	Jun. 30, 2011
Assets measured at fair value on a recurring basis
Cash and cash equivalents	$ 632.8
Short-term investments	29.0
Foreign currency hedges	0.5
Total Assets	662.3
Liabilities measured at fair value on a recurring basis
Foreign currency hedges	5.8
Total Liabilities	5.8
Level 1 [Member]
Assets measured at fair value on a recurring basis
Cash and cash equivalents	632.8
Short-term investments	29.0
Foreign currency hedges	0
Total Assets	661.8
Level 1 [Member]
Liabilities measured at fair value on a recurring basis
Foreign currency hedges	0
Total Liabilities	0
Level 2 [Member]
Assets measured at fair value on a recurring basis
Cash and cash equivalents	0
Short-term investments	0
Foreign currency hedges	0.5
Total Assets	0.5
Level 2 [Member]
Liabilities measured at fair value on a recurring basis
Foreign currency hedges	5.8
Total Liabilities	5.8
Level 3 [Member]
Assets measured at fair value on a recurring basis
Cash and cash equivalents	0
Short-term investments	0
Foreign currency hedges	0
Total Assets	0
Level 3 [Member]
Liabilities measured at fair value on a recurring basis
Foreign currency hedges	0
Total Liabilities	$ 0

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Equity (Tables)

6 Months Ended

Jun. 30, 2011

Equity (Tables) [Abstract]

Shareholding pattern

				The Timken Company Shareholders
									Earnings			Accumulated
						Other			Invested			Other
				Stated		Paid-In			in the			Comprehensive			Treasury			Noncontrolling
	Total			Capital		Capital			Business			(Loss)			Stock			Interest
Balance at December 31, 2010	$	1,941.8		$	53.1	$	881.7		$	1,626.4		$	(624.7	)	$	(11.5	)	$	16.8
Net income		236.1								234.2									1.9
Foreign currency translation adjustment		46.5											46.5
Pension and postretirement liability adjustment (net of the income tax benefit of $11.6 million)		18.5											18.5
Unrealized gain on marketable securities (net of the income tax benefit of $0.1 million)		0.3											0.2						0.1
Change in fair value of derivative financial instruments, net of reclassifications		0.1											0.1
Total comprehensive income		301.5
Change in ownership of noncontrolling interests		(1.2	)																(1.2	)
Dividends — $0.38 per share		(37.1	)							(37.1	)
Tax benefit from stock compensation		10.0					10.0
Stock-based compensation expense		9.2					9.2
Stock purchased at cost		(25.3	)													(25.3	)
Stock option exercise activity		16.3					(17.0	)								33.3
Restricted shares (issued) surrendered		(0.6	)				(0.7	)								0.1
Shares surrendered for taxes		(8.3	)													(8.3	)
Balance at June 30, 2011	$	2,206.3		$	53.1	$	883.2		$	1,823.5		$	(559.4	)	$	(11.7	)	$	17.6

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Income Taxes (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
IncomeTaxes
Provision for income taxes	$ 61.5	$ 38.2	$ 118.9	$ 84.1
Effective Income Tax Rate, Continuing Operations	33.40%	31.80%	33.50%	43.20%
Income Taxes (Textuals) [Abstract]
Effective tax rate on the pretax income relative to U.S. federal statutory	35.00%	35.00%	35.00%	35.00%
Effective tax rate due to earnings in certain foreign jurisdictions	less than 35%	less than 35%	less than 35%	less than 35%
Charge Recorded To Reflect Deferred Tax Impact				$ 21.6

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Product Warranty

6 Months Ended

Jun. 30, 2011

Product Warranty [Abstract]

Product Warranty

Note 7 — Product Warranty

The Company provides limited warranties on certain of its products. The Company accrues liabilities for warranty based upon specific claims and a review of historical warranty claim experience in accordance with accounting rules for contingent liabilities. Should the Company become aware of a specific potential warranty claim for which liability is probable and reasonably estimable, a specific charge is recorded and accounted for accordingly. Adjustments are made quarterly to the accruals as claim data and historical experience change.

The following is a rollforward of the warranty accruals for the six months ended June 30, 2011 and the twelve months ended December 31, 2010:

	June 30,			December 31,
	2011			2010
| |
Beginning balance, January 1	$	8.0		$	5.4
Expense		2.4			6.0
Payments		(0.8	)		(3.4	)
Ending balance	$	9.6		$	8.0

The product warranty accrual at June 30, 2011 and December 31, 2010 was included in other current liabilities on the Consolidated Balance Sheets.

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2011

Earnings Per Share (Tables) [Abstract]

Reconciliation of the numerator and the denominator of basic earnings per share and diluted earnings per share

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2011		2010		2011		2010
Numerator:
Income from continuing operations attributable to The Timken Company	$	121.5	$	81.4	$	234.2	$	109.7
Less: undistributed earnings allocated to nonvested stock		0.4		0.4		0.9		0.5
Income from continuing operations available to common shareholders for basic earnings per share and diluted earnings per share	$	121.1	$	81.0	$	233.3	$	109.2
Denominator:
Weighted average number of shares outstanding — basic		97,644,773		96,305,087		97,552,528		96,336,974
Effect of dilutive options		1,255,219		716,085		1,353,328		608,675
Weighted average number of shares outstanding, assuming dilution of stock options		98,899,992		97,021,172		98,905,856		96,945,649
Basic earnings per share from continuing operations	$	1.24	$	0.84	$	2.39	$	1.13
Diluted earnings per share from continuing operations	$	1.22	$	0.84	$	2.36	$	1.13

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Impairment and Restructuring Charges (Details) (USD $) In Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Impairment And Restructuring Charges By Segment
Impairment charges	$ 0.4		$ 0.4
Severance expense and related benefit costs	0.2	0.1	0.1	5.1
Exit costs	5.6	0.9	6.8	1.4
Total	6.2	1.0	7.3	6.5
Mobile Industries [Member]
Impairment And Restructuring Charges By Segment
Impairment charges	0.1		0.1
Severance expense and related benefit costs	0.2	(0.6)	0.1	1.6
Exit costs	5.4	0.5	6.6	0.9
Total	5.7	(0.1)	6.8	2.5
Process Industries [Member]
Impairment And Restructuring Charges By Segment
Impairment charges	0.2		0.2
Severance expense and related benefit costs				1.6
Exit costs	0.2	0.2	0.2	0.2
Total	0.4	0.2	0.4	1.8
Aerospace and Defense [Member]
Impairment And Restructuring Charges By Segment
Impairment charges	0.1		0.1
Severance expense and related benefit costs		0.8		1.4
Exit costs		0.2	0	0.3
Total	0.1	1.0	0.1	1.7
Steel [Member]
Impairment And Restructuring Charges By Segment
Severance expense and related benefit costs		(0.1)		(0.1)
Total		(0.1)		(0.1)
Corporate [Member]
Impairment And Restructuring Charges By Segment
Severance expense and related benefit costs				0.6
Total				$ 0.6

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Financing Arrangements (Details 1) (USD $) In Millions, unless otherwise specified	6 Months Ended																				6 Months Ended			6 Months Ended
	Jun. 30, 2011	Dec. 31, 2010	Jun. 30, 2011 Fixed-rate Medium-Term Notes [Member]	Jun. 30, 2011 Fixed-rate Senior Unsecured Notes [Member]	Jun. 30, 2011 Corporate Joint Venture [Member]	Jun. 30, 2011 Foreign Subsidiary Long Term Borrowings [Member]	Jun. 30, 2011 Other long term debt [Member]	Dec. 31, 2010 Other long term debt [Member]	Jun. 30, 2011 Credit Facility With US Bank For Agc [Member]	Dec. 31, 2010 Credit Facility With US Bank For Agc [Member]	Jun. 30, 2011 Ohio Pollution Control Revenue Refunding Bonds [Member]	Dec. 31, 2010 Ohio Pollution Control Revenue Refunding Bonds [Member]	Jun. 30, 2011 Ohio Air Quality Development Revenue Refunding Bonds [Member]	Dec. 31, 2010 Ohio Air Quality Development Revenue Refunding Bonds [Member]	Jun. 30, 2011 Ohio Water Development Revenue Refunding Bonds [Member]	Dec. 31, 2010 Ohio Water Development Revenue Refunding Bonds [Member]	Jun. 30, 2011 Senior Unsecured Notes [Member]	Dec. 31, 2010 Senior Unsecured Notes [Member]	Jun. 30, 2011 Series A Medium Term Note [Member]	Dec. 31, 2010 Series A Medium Term Note [Member]	Jun. 30, 2011 Senior Credit Facility [Member]	May 11, 2011 Senior Credit Facility [Member]	May 11, 2011 Letter of Credit [Member]	Jun. 30, 2011 Amended Senior Credit Facility [Member]
Long-term debt
Total Long-term debt	$ 498.0	$ 491.3					$ 28.4	$ 19.6	$ 6.1	$ 8.3	$ 17.0	$ 17.0	$ 9.5	$ 9.5	$ 12.2	$ 12.2	$ 249.8	$ 249.7	$ 175.0	$ 175.0
Current portion of long-term debt	7.4	9.6
Long-term debt	490.6	481.7
Schedule of Long-term Debt Instruments (Textuals) [Abstract]
Debt Instruments Interest Rate Stated Percentage Rate Range Minimum			6.74%
Debt Instruments Interest Rate Stated Percentage Rate Range Maximum			7.76%
Debt Instruments Maturity Date			May 01, 2028	Sep. 15, 2014					Jul. 17, 2011		Jun. 01, 2033		Nov. 01, 2025		Nov. 01, 2025
Debt Instrument, Interest rate			6.00%						1.35%		0.47%		0.47%		0.18%
Line Of Credit Facility [Line Items]
Maximum borrowing capacity under line of credit	150.0					27.3																500.0
Borrowings outstanding	0					27.1																0	17.2
Remaining availability under the Senior Credit Facility						0.2																482.8
Line of credit expiration date	2012-11-10																				2012-07-10			2016-05-11
Restricted cash as Collateral account for Credit Facility of AGC from US Bank	4.8	0
Credit Facility with AGC from US Bank					4.8
Number of Financial Covenant under senior Credit Facility																					2
Amount Reserved In Collateral Account	$ 4.8

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Product Warranty (Tables)

6 Months Ended

Jun. 30, 2011

Product Warranty (Tables) [Abstract]

Roll forward of product warranty accruals

	June 30,			December 31,
	2011			2010
| |
Beginning balance, January 1	$	8.0		$	5.4
Expense		2.4			6.0
Payments		(0.8	)		(3.4	)
Ending balance	$	9.6		$	8.0

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Retirement and Postretirement Benefit Plans

6 Months Ended

Jun. 30, 2011

Retirement and Postretirement Benefit Plans [Abstract]

Retirement and Postretirement Benefit Plans

Note 12 — Retirement and Postretirement Benefit Plans

The following table sets forth the net periodic benefit cost for the Company’s retirement and postretirement benefit plans. The amounts for the three months and six months ended June 30, 2011 are based on updated actuarial calculations prepared during the second quarter of 2011. The net periodic benefit cost recorded for the three months ended and six months ended June 30, 2011 is the Company’s best estimate of each period’s proportionate share of the amounts to be recorded for the year ended December 31, 2011.

	Pension						Postretirement
	Three Months Ended						Three Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
Components of net periodic benefit cost
Service cost	$	7.9		$	7.0		$	0.7		$	0.4
Interest cost		39.6			39.3			7.5			8.4
Expected return on plan assets		(57.5	)		(50.8	)		(1.5	)		—
Amortization of prior service cost (credit)		2.3			2.4			0.2			(0.4	)
Amortization of net actuarial loss		15.2			13.7			0.5			0.7
Net periodic benefit cost	$	7.5		$	11.6		$	7.4		$	9.1

	Pension						Postretirement
	Six Months Ended						Six Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
Components of net periodic benefit cost
Service cost	$	16.2		$	16.5		$	1.2		$	1.1
Interest cost		79.4			79.0			16.2			17.5
Expected return on plan assets		(107.6	)		(100.1	)		(2.2	)		—
Amortization of prior service cost (credit)		4.7			4.7			(0.2	)		(0.7	)
Amortization of net actuarial loss		28.0			25.9			1.5			2.0
Net periodic benefit cost	$	20.7		$	26.0		$	16.5		$	19.9

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Inventories

6 Months Ended

Jun. 30, 2011

Inventories [Abstract]

Inventories

Note 3 — Inventories

	June 30,		December 31,
	2011		2010
Inventories, net:
Manufacturing supplies	$	59.0	$	57.9
Work in process and raw materials		425.9		371.9
Finished products		444.0		398.7
Inventories, net	$	928.9	$	828.5

An actual valuation of the inventory under the last-in, first-out (LIFO) method can be made only at the end of each year based on the inventory levels and costs at that time. Accordingly, interim LIFO calculations must be based on management’s estimates of expected year-end inventory levels and costs. Because these calculations are subject to many factors beyond management’s control, annual results may differ from interim results as they are subject to the final year-end LIFO inventory valuation. The LIFO reserve at June 30, 2011 and December 31, 2010 was $280.3 million and $264.6 million, respectively. The Company recognized an increase in its LIFO reserve of $9.7 million and $15.7 million during the second quarter and first six months of 2011 compared to an increase in its LIFO reserve of $0.5 million and $6.6 million during the second quarter and first six months of 2010.

Based on current expectations of inventory levels and costs, the Company expects to recognize approximately $32 million in LIFO expense for the year ended December 31, 2011. The expected increase in the LIFO reserve for 2011 is a result of higher costs, especially scrap steel costs, as well as higher quantities. A 1.0% increase in costs would increase the current LIFO expense estimate for 2011 by approximately $5.9 million. A 1.0% increase in inventory quantities would only have a minor effect on the current LIFO expense estimate for 2011.

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Goodwill and Other Intangible Assets (Details) (USD $) In Millions	6 Months Ended
	Jun. 30, 2011
Change in the carrying amount of Goodwill
Goodwill, Beginning Balance	$ 224.4
Goodwill, Other	2.1
Goodwill, Ending Balance	226.5
Process Industries [Member]
Change in the carrying amount of Goodwill
Goodwill, Beginning Balance	50.0
Goodwill, Other	1.3
Goodwill, Ending Balance	51.3
Aerospace and Defense [Member]
Change in the carrying amount of Goodwill
Goodwill, Beginning Balance	162.3
Goodwill, Other	0.3
Goodwill, Ending Balance	162.6
Steel [Member]
Change in the carrying amount of Goodwill
Goodwill, Beginning Balance	12.1
Goodwill, Other	0.5
Goodwill, Ending Balance	$ 12.6

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Earnings Per Share

6 Months Ended

Jun. 30, 2011

Earnings Per Share [Abstract]

Earnings Per Share

Note 9 — Earnings Per Share

The following table sets forth the reconciliation of the numerator and the denominator of basic earnings per share and diluted earnings per share for the three months and six months ended June 30, 2011 and June 30, 2010:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2011		2010		2011		2010
Numerator:
Income from continuing operations attributable to The Timken Company	$	121.5	$	81.4	$	234.2	$	109.7
Less: undistributed earnings allocated to nonvested stock		0.4		0.4		0.9		0.5
Income from continuing operations available to common shareholders for basic earnings per share and diluted earnings per share	$	121.1	$	81.0	$	233.3	$	109.2
Denominator:
Weighted average number of shares outstanding — basic		97,644,773		96,305,087		97,552,528		96,336,974
Effect of dilutive options		1,255,219		716,085		1,353,328		608,675
Weighted average number of shares outstanding, assuming dilution of stock options		98,899,992		97,021,172		98,905,856		96,945,649
Basic earnings per share from continuing operations	$	1.24	$	0.84	$	2.39	$	1.13
Diluted earnings per share from continuing operations	$	1.22	$	0.84	$	2.36	$	1.13

The exercise prices for certain stock options that the Company has awarded may exceed the average market price of the Company’s common stock. Such stock options are anti-dilutive and were not included in the computation of diluted earnings per share. There were no anti-dilutive stock options outstanding for the three months ended June 30, 2011 and 1,554,605 anti-dilutive stock options outstanding for the three months ended June 30, 2010. The anti-dilutive stock options outstanding were 176,500 and 1,960,955 for the six months ended June 30, 2011 and June 30, 2010, respectively.

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Fair Value

6 Months Ended

Jun. 30, 2011

Fair Value [Abstract]

Fair Value

Note 14 — Fair Value

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The FASB provides accounting rules that classify the inputs used to measure fair value into the following hierarchy:

Level 1	— Unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2	— Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability.
Level 3	— Unobservable inputs for the asset or liability.

The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of June 30, 2011:

	Fair Value at June 30, 2011
	Total		Level 1		Level 2		Level 3
| | | |
Assets:
Cash and cash equivalents	$	632.8	$	632.8	$	—	$	—
Short-term investments		29.0		29.0		—		—
Foreign currency hedges		0.5		—		0.5		—
Total Assets	$	662.3	$	661.8	$	0.5	$	—
Liabilities:
Foreign currency hedges	$	5.8	$	—	$	5.8	$	—
Total Liabilities	$	5.8	$	—	$	5.8	$	—

Cash and cash equivalents are highly liquid investments with maturities of three months or less when purchased and are valued at redemption value. Short-term investments are investments with maturities between four months and one year and are valued at amortized cost. The Company uses publicly available foreign currency forward and spot rates to measure the fair value of its foreign currency forward contracts.

The Company does not believe it has significant concentrations of risk associated with the counterparts to its financial instruments.

The following table presents the fair value hierarchy for those assets measured at fair value on a nonrecurring basis for the six months ended June 30, 2011 using Level 3 inputs:

	Carrying		Fair Value
	Value		Adjustment			Fair Value
Assets held for sale:
Inventories	$	4.7	$	(3.2	)	$	1.5
Equity investments		6.9		(2.8	)		4.1
Total assets held for sale	$	11.6	$	(6.0	)	$	5.6
Long-lived assets held and used:
Fixed Assets	$	0.4	$	(0.4	)	$	—
Total assets	$	12.0	$	(6.4	)	$	5.6

During the second quarter of 2011, the Company made a strategic decision to exit certain non-strategic aftermarket product lines. The Company plans to exit these product lines within twelve months. The Company wrote-down inventory with a carrying value of $4.7 million to $1.5 million, which reflects management’s best estimate of the value it would receive in a sale to a third party given the quantity and timing of the plan to exit these product lines.

The Company’s equity investment in International Component Supply LTDA (ICS) was reviewed for impairment during the first quarter of 2011. This equity investment was written down to its fair value of $4.1 million, resulting in an impairment charge of $1.8 million recognized in other expense, net for the first six months of 2011. The fair value of this investment was based on the estimated sales proceeds to be received from a third party if the Company were to sell its interest in the joint venture. During the second quarter of 2011, the Company sold its investment in ICS for $4.8 million, resulting in a gain of $0.5 million. The Company’s equity investment in Endorsia International.com (Endorsia) was also reviewed for impairment during the second quarter of 2011. This equity investment was completely written down, resulting in an impairment charge of $1.0 million recognized in other expense, net for the second quarter of 2011. The fair value of this investment was based on the estimated proceeds to be received by the parties that own Endorsia from the liquidation of this joint venture.

Financial Instruments

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 long-term fixed-rate debt, based on quoted market prices, was $478.8 million and $468.7 million at June 30, 2011 and December 31, 2010, respectively. The carrying value of this debt was $434.3 million and $430.4 million at June 30, 2011 and December 31, 2010, respectively.

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Segment Information

6 Months Ended

Jun. 30, 2011

Segment Information [Abstract]

Segment Information

Note 10 — Segment Information

The primary measurement used by management to measure the financial performance of each segment is EBIT (earnings before interest and taxes).

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
Net sales to external customers:
Mobile Industries	$	465.1		$	400.4		$	908.0		$	767.9
Process Industries		307.5			211.0			591.6			416.9
Aerospace and Defense		83.5			82.7			162.6			174.8
Steel		473.5			317.3			921.5			565.5
	$	1,329.6		$	1,011.4		$	2,583.7		$	1,925.1
Intersegment sales:
Mobile Industries	$	0.1		$	—		$	0.2		$	—
Process Industries		0.8			0.6			1.7			1.3
Steel		31.6			20.8			65.1			42.9
	$	32.5		$	21.4		$	67.0		$	44.2
Segment EBIT:
Mobile Industries	$	66.8		$	68.6		$	134.8		$	108.2
Process Industries		70.3			28.3			137.0			52.4
Aerospace and Defense		3.3			6.1			5.5			18.0
Steel		72.1			43.0			132.1			62.9
Total EBIT for reportable segments	$	212.5		$	146.0		$	409.4		$	241.5
Unallocated corporate expenses		(20.4	)		(17.8	)		(38.4	)		(32.2	)
Interest expense		(9.3	)		(10.0	)		(19.1	)		(19.6	)
Interest income		1.4			0.9			2.9			1.5
Intersegment adjustments		(0.4	)		1.1			0.2			3.6
Income from continuing operations before income taxes	$	183.8		$	120.2		$	355.0		$	194.8

Intersegment sales represent sales between the segments. These sales are eliminated upon consolidation.

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Fair Value (Tables)

6 Months Ended

Jun. 30, 2011

Fair Value (Tables) [Abstract]

Assets and liabilities measured at fair value on a recurring basis

	Fair Value at June 30, 2011
	Total		Level 1		Level 2		Level 3
| | | |
Assets:
Cash and cash equivalents	$	632.8	$	632.8	$	—	$	—
Short-term investments		29.0		29.0		—		—
Foreign currency hedges		0.5		—		0.5		—
Total Assets	$	662.3	$	661.8	$	0.5	$	—
Liabilities:
Foreign currency hedges	$	5.8	$	—	$	5.8	$	—
Total Liabilities	$	5.8	$	—	$	5.8	$	—

Assets measured at fair value on a nonrecurring basis

	Carrying		Fair Value
	Value		Adjustment			Fair Value
Assets held for sale:
Inventories	$	4.7	$	(3.2	)	$	1.5
Equity investments		6.9		(2.8	)		4.1
Total assets held for sale	$	11.6	$	(6.0	)	$	5.6
Long-lived assets held and used:
Fixed Assets	$	0.4	$	(0.4	)	$	—
Total assets	$	12.0	$	(6.4	)	$	5.6

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Equity

6 Months Ended

Jun. 30, 2011

Equity [Abstract]

Equity

Note 8 — Equity

				The Timken Company Shareholders
									Earnings			Accumulated
						Other			Invested			Other
				Stated		Paid-In			in the			Comprehensive			Treasury			Noncontrolling
	Total			Capital		Capital			Business			(Loss)			Stock			Interest
Balance at December 31, 2010	$	1,941.8		$	53.1	$	881.7		$	1,626.4		$	(624.7	)	$	(11.5	)	$	16.8
Net income		236.1								234.2									1.9
Foreign currency translation adjustment		46.5											46.5
Pension and postretirement liability adjustment (net of the income tax benefit of $11.6 million)		18.5											18.5
Unrealized gain on marketable securities (net of the income tax benefit of $0.1 million)		0.3											0.2						0.1
Change in fair value of derivative financial instruments, net of reclassifications		0.1											0.1
Total comprehensive income		301.5
Change in ownership of noncontrolling interests		(1.2	)																(1.2	)
Dividends — $0.38 per share		(37.1	)							(37.1	)
Tax benefit from stock compensation		10.0					10.0
Stock-based compensation expense		9.2					9.2
Stock purchased at cost		(25.3	)													(25.3	)
Stock option exercise activity		16.3					(17.0	)								33.3
Restricted shares (issued) surrendered		(0.6	)				(0.7	)								0.1
Shares surrendered for taxes		(8.3	)													(8.3	)
Balance at June 30, 2011	$	2,206.3		$	53.1	$	883.2		$	1,823.5		$	(559.4	)	$	(11.7	)	$	17.6

The total comprehensive income for the three months ended June 30, 2011 was $148.1 million. The total comprehensive income for the three months and six months ended June 30, 2010 was $41.7 million and $88.5 million, respectively.

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Basis of Presentation

6 Months Ended

Jun. 30, 2011

Basis of Presentation [Abstract]

Basis of Presentation

Note 1 — Basis of Presentation

The accompanying Consolidated Financial Statements (unaudited) for The Timken Company (Timken or the Company) have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and notes required by accounting principles generally accepted in the United States (U.S. GAAP) for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) and disclosures considered necessary for a fair presentation have been included. For further information, refer to the Consolidated Financial Statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010. Certain amounts in the 2010 Consolidated Financial Statements have been reclassified to conform to the 2011 presentation.

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Property, Plant and Equipment

6 Months Ended

Jun. 30, 2011

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

Note 4 — Property, Plant and Equipment

The components of property, plant and equipment were as follows:

	June 30,			December 31,
	2011			2010
Property, Plant and Equipment:
Land and buildings	$	634.9		$	623.2
Machinery and equipment		2,872.7			2,830.8
Subtotal		3,507.6			3,454.0
Less allowances for depreciation		(2,264.5	)		(2,186.3	)
Property, Plant and Equipment — net	$	1,243.1		$	1,267.7

At June 30, 2011 and December 31, 2010, machinery and equipment included approximately $92.9 million and $99.7 million, respectively, of capitalized software. Depreciation expense for the three months ended June 30, 2011 and 2010 was $44.1 million and $44.9 million, respectively. Depreciation expense for the six months ended June 30, 2011 and 2010 was $89.2 million and $90.2 million, respectively. Depreciation expense on capitalized software for the three months ended June 30, 2011 and 2010 was approximately $3.6 million and $5.1 million, respectively. Depreciation expense on capitalized software for the six months ended June 30, 2011 and 2010 was approximately $10.5 million and $10.4 million, respectively.

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Equity (Details) (USD $) In Millions, except Per Share data	3 Months Ended		6 Months Ended				6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011 Stated Capital [Member]	Dec. 31, 2010 Stated Capital [Member]	Jun. 30, 2011 Other Paid-In Capital [Member]	Jun. 30, 2011 Earnings Invested in the Business [Member]	Jun. 30, 2011 Accumulated Other Comprehensive Income [Member]	Jun. 30, 2011 Treasury Stock [Member]	Jun. 30, 2011 Noncontrolling Interest [Member]
Beginning Balance			$ 1,941.8		$ 53.1	$ 53.1	$ 881.7	$ 1,626.4	$ (624.7)	$ (11.5)	$ 16.8
Net income	122.3	86.2	236.1	115.2				234.2			1.9
Foreign currency translation adjustment			46.5						46.5
Pension and postretirement liability adjustment (net of the income tax benefit of $11.6 million)			18.5						18.5
Unrealized loss on marketable securities (net of the income tax benefit of $0.1 million)			0.3						0.2		0.1
Change in fair value of derivative financial instruments, net of reclassifications			0.1						0.1
Total Comprehensive Income	148.1	41.7	301.5	88.5
Change in ownership of noncontrolling interests			(1.2)								(1.2)
Dividends - $0.38 per share			(37.1)					(37.1)
Tax benefit from stock compensation			10.0				10.0
Stock-based compensation expense			9.2				9.2
Stock purchased at cost			(25.3)							(25.3)
Stock option exercise activity			16.3				(17.0)			33.3
Restricted shares (issued) surrendered			(0.6)				(0.7)			0.1
Shares surrendered for taxes			(8.3)							(8.3)
Ending Balance	2,206.3		2,206.3		53.1	53.1	883.2	1,823.5	(559.4)	(11.7)	17.6
Equity (Textuals) [Abstract]
Total Comprehensive Income	148.1	41.7	301.5	88.5
Unrealized gain on marketable securities, tax			0.1						0.1
Pension and postretirement liability adjustment, Tax			$ 11.6						$ 11.6
Dividend per share			$ 0.38					$ 0.38

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Income Taxes (Tables)

6 Months Ended

Jun. 30, 2011

Income Taxes (Tables) [Abstract]

Income Taxes

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
Provision for income taxes	$	61.5		$	38.2		$	118.9		$	84.1
Effective tax rate		33.4	%		31.8	%		33.5	%		43.2	%

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Subsequent Event (Details) (Philadelphia Gear [Member], USD $) In Millions, unless otherwise specified	1 Months Ended	12 Months Ended
	Jul. 31, 2011	Mar. 31, 2011
Philadelphia Gear [Member]
Subsequent Event (Textuals) [Abstract]
Cost of acquiring assets of Philadelphia Gear Corp	$ 200
Number of employees employed	220
Amount of sales by Philadelphia Gear		$ 85

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Goodwill and Other Intangible Assets

6 Months Ended

Jun. 30, 2011

Goodwill and Other Intangible Assets [Abstract]

Goodwill and Other Intangible Assets

Note 5 — Goodwill and Other Intangible Assets

The change in the carrying amount of goodwill for the six months ended June 30, 2011 was as follows:

	Process		Aerospace
	Industries		and Defense		Steel		Total
Beginning Balance	$	50.0	$	162.3	$	12.1	$	224.4
Other		1.3		0.3		0.5		2.1
Total	$	51.3	$	162.6	$	12.6	$	226.5

Other primarily includes foreign currency translation adjustments.

The following table displays intangible assets as of June 30, 2011 and December 31, 2010:

	As of June 30, 2011						As of December 31, 2010
	Gross				Net		Gross				Net
	Carrying		Accumulated		Carrying		Carrying		Accumulated		Carrying
	Amount		Amortization		Amount		Amount		Amortization		Amount
Intangible assets subject to amortization:
Customer relationships	$	81.5	$	20.8	$	60.7	$	82.0	$	18.6	$	63.4
Engineering drawings		2.0		2.0		—		2.0		2.0		—
Know-how		2.1		1.1		1.0		2.1		1.0		1.1
Industrial license agreements		0.4		0.1		0.3		0.4		0.1		0.3
Land-use rights		8.4		3.6		4.8		8.2		3.3		4.9
Patents		4.4		3.4		1.0		4.4		3.3		1.1
Technology use		38.9		7.3		31.6		39.0		6.3		32.7
Trademarks		6.0		5.1		0.9		6.0		5.0		1.0
PMA licenses		8.8		2.9		5.9		8.8		2.7		6.1
Non-compete agreements		2.7		2.1		0.6		2.7		1.9		0.8
Unpatented technology		7.6		6.4		1.2		7.6		6.0		1.6
	$	162.8	$	54.8	$	108.0	$	163.2	$	50.2	$	113.0
Intangible assets not subject to amortization:
Tradename	$	2.0			$	2.0	$	2.0			$	2.0
FAA air agency certificates		14.2				14.2		14.2				14.2
	$	16.2			$	16.2	$	16.2			$	16.2
Total intangible assets	$	179.0	$	54.8	$	124.2	$	179.4	$	50.2	$	129.2

Amortization expense for intangible assets for the three months and six months ended June 30, 2011 was $2.3 million and $4.6 million, respectively. Amortization expense for intangible assets for the three months and six months ended June 30, 2010 was $2.4 million and $4.8 million, respectively. Amortization expense for intangible assets is estimated to be approximately $9.5 million for 2011; $9.1 million in 2012; $7.6 million in 2013; $7.4 million in 2014 and $7.4 million in 2015.

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Segment Information (Details) (USD $) In Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Net sales to external customers:
Total Net sales to external customers	$ 1,329.6	$ 1,011.4	$ 2,583.7	$ 1,925.1
Intersegment sales:
Total Intersegment sales	32.5	21.4	67.0	44.2
Segment EBIT:
Total EBIT for reportable segments	212.5	146.0	409.4	241.5
Unallocated corporate expenses	(20.4)	(17.8)	(38.4)	(32.2)
Interest expense	(9.3)	(10.0)	(19.1)	(19.6)
Interest income	1.4	0.9	2.9	1.5
Intersegment adjustments	(0.4)	1.1	0.2	3.6
Income From Continuing Operations Before Income Taxes	183.8	120.2	355.0	194.8
Mobile Industries [Member]
Net sales to external customers:
Total Net sales to external customers	465.1	400.4	908.0	767.9
Intersegment sales:
Total Intersegment sales	0.1		0.2
Segment EBIT:
Total EBIT for reportable segments	66.8	68.6	134.8	108.2
Process Industries [Member]
Net sales to external customers:
Total Net sales to external customers	307.5	211.0	591.6	416.9
Intersegment sales:
Total Intersegment sales	0.8	0.6	1.7	1.3
Segment EBIT:
Total EBIT for reportable segments	70.3	28.3	137.0	52.4
Aerospace and Defense [Member]
Net sales to external customers:
Total Net sales to external customers	83.5	82.7	162.6	174.8
Segment EBIT:
Total EBIT for reportable segments	3.3	6.1	5.5	18.0
Steel [Member]
Net sales to external customers:
Total Net sales to external customers	473.5	317.3	921.5	565.5
Intersegment sales:
Total Intersegment sales	31.6	20.8	65.1	42.9
Segment EBIT:
Total EBIT for reportable segments	$ 72.1	$ 43.0	$ 132.1	$ 62.9

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2011

Segment Information (Tables) [Abstract]

Segmentwise financial performance

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
Net sales to external customers:
Mobile Industries	$	465.1		$	400.4		$	908.0		$	767.9
Process Industries		307.5			211.0			591.6			416.9
Aerospace and Defense		83.5			82.7			162.6			174.8
Steel		473.5			317.3			921.5			565.5
	$	1,329.6		$	1,011.4		$	2,583.7		$	1,925.1
Intersegment sales:
Mobile Industries	$	0.1		$	—		$	0.2		$	—
Process Industries		0.8			0.6			1.7			1.3
Steel		31.6			20.8			65.1			42.9
	$	32.5		$	21.4		$	67.0		$	44.2
Segment EBIT:
Mobile Industries	$	66.8		$	68.6		$	134.8		$	108.2
Process Industries		70.3			28.3			137.0			52.4
Aerospace and Defense		3.3			6.1			5.5			18.0
Steel		72.1			43.0			132.1			62.9
Total EBIT for reportable segments	$	212.5		$	146.0		$	409.4		$	241.5
Unallocated corporate expenses		(20.4	)		(17.8	)		(38.4	)		(32.2	)
Interest expense		(9.3	)		(10.0	)		(19.1	)		(19.6	)
Interest income		1.4			0.9			2.9			1.5
Intersegment adjustments		(0.4	)		1.1			0.2			3.6
Income from continuing operations before income taxes	$	183.8		$	120.2		$	355.0		$	194.8

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Inventories (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010	Dec. 31, 2011	Dec. 31, 2010
Inventory net items net of reserve alternative
Manufacturing supplies	$ 59.0		$ 59.0			$ 57.9
Work in process and raw materials	425.9		425.9			371.9
Finished products	444.0		444.0			398.7
Total Inventories, net	928.9		928.9			828.5
Inventories (Textuals) [Abstract]
Inventory Reserve (LIFO)	280.3		280.3			264.6
Increase (decrease) in inventory reserve (LIFO)	9.7	0.5	15.7	6.6
Amount expected to be recognized in LIFO expense by the end of the year					32
The percentage increase in costs creating the increase to the current LIFO expense estimate					1.00%
Increase in current LIFO expense estimate due to one percent increase in costs					$ 5.9
The percentage increase in inventory quantities that would have an effect on the current LIFO expense estimate					1.00%

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Earnings Per Share (Details) (USD $) In Millions, except Share data	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Numerator:
Income from continuing operations, net of income taxes	$ 121.5	$ 81.4	$ 234.2	$ 109.7
Less: undistributed earnings (loss) allocated to nonvested stock	0.4	0.4	0.9	0.5
Income (Loss) from continuing operations available to common shareholders for basic earnings (loss) per share and diluted earnings (loss) per share	$ 121.1	$ 81.0	$ 233.3	$ 109.2
Denominator:
Weighted average number of shares outstanding - basic	97,644,773	96,305,087	97,552,528	96,336,974
Effect of dilutive options	1,255,219	716,085	1,353,328	608,675
Weighted average number of shares outstanding, assuming dilution of stock options	98,899,992	97,021,172	98,905,856	96,945,649
Basic earnings (loss) per share from continuing operations	$ 1.24	$ 0.84	$ 2.39	$ 1.13
Diluted earnings (loss) per share from continuing operations	$ 1.22	$ 0.84	$ 2.36	$ 1.13
Earnings Per Share (Textuals) [Abstract]
Antidilutive stock options outstanding	0	1,554,605	176,500	1,960,955

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Retirement and Postretirement Benefit Plans (Tables)

6 Months Ended

Jun. 30, 2011

Retirement and Postretirement Benefit Plans (Tables) [Abstract]

Net periodic benefit cost for the Company's retirement and postretirement benefit plans

	Pension						Postretirement
	Three Months Ended						Three Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
Components of net periodic benefit cost
Service cost	$	7.9		$	7.0		$	0.7		$	0.4
Interest cost		39.6			39.3			7.5			8.4
Expected return on plan assets		(57.5	)		(50.8	)		(1.5	)		—
Amortization of prior service cost (credit)		2.3			2.4			0.2			(0.4	)
Amortization of net actuarial loss		15.2			13.7			0.5			0.7
Net periodic benefit cost	$	7.5		$	11.6		$	7.4		$	9.1

	Pension						Postretirement
	Six Months Ended						Six Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
Components of net periodic benefit cost
Service cost	$	16.2		$	16.5		$	1.2		$	1.1
Interest cost		79.4			79.0			16.2			17.5
Expected return on plan assets		(107.6	)		(100.1	)		(2.2	)		—
Amortization of prior service cost (credit)		4.7			4.7			(0.2	)		(0.7	)
Amortization of net actuarial loss		28.0			25.9			1.5			2.0
Net periodic benefit cost	$	20.7		$	26.0		$	16.5		$	19.9

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Income Taxes

6 Months Ended

Jun. 30, 2011

Income Taxes [Abstract]

Income Taxes

Note 13 — Income Taxes

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
Provision for income taxes	$	61.5		$	38.2		$	118.9		$	84.1
Effective tax rate		33.4	%		31.8	%		33.5	%		43.2	%

The Company’s provision for income taxes in interim periods is computed by applying the appropriate annual effective tax rates to income or loss before income taxes for the period. In addition, non-recurring or discrete items, including interest on prior year tax liabilities, are recorded during the period(s) in which they occur.

The effective tax rate for the second quarter of 2011 was lower than the U.S. Federal statutory tax rate of 35% primarily as a result of lower taxes related to non-U.S. earnings, and the net impact of other U.S. tax benefits, such as the U.S. research tax credit and U.S. manufacturing deduction, partially offset by U.S. state and local taxes and the net impact of other items.

The effective tax rate on the pretax income for the second quarter of 2010 was favorable relative to the U.S. federal statutory tax rate of 35% primarily due to earnings in certain foreign jurisdictions where the effective tax rate is less than 35% and the U.S. manufacturing deduction, partially offset by losses at certain foreign subsidiaries where no tax benefit could be recorded, U.S. state and local tax and the net effect of other U.S. tax items.

The effective tax rate for the first six months of 2011 was lower than the U.S. Federal statutory tax rate of 35% primarily as a result of lower taxes related to non-U.S. earnings, and the net impact of other U.S. tax benefits, such as the U.S. research tax credit and U.S. manufacturing deduction, partially offset by U.S. state and local taxes and the net impact of other items.

The effective tax rate on the pretax income for the first six months of 2010 was unfavorable relative to the U.S. federal statutory tax rate of 35% primarily due to a $21.6 million charge recorded to reflect the deferred tax impact of the enactment of the U.S. Patient Protection and Affordable Care Act (as amended) enacted in the first quarter of 2010, losses at certain foreign subsidiaries where no tax benefit could be recorded, U.S. state and local taxes and the net effect of other U.S. tax items. These increases were partially offset by the earnings in certain foreign jurisdictions where the effective tax rate is less than 35%.

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Financing Arrangements

6 Months Ended

Jun. 30, 2011

Financing Arrangements [Abstract]

Financing Arrangements

Note 6 — Financing Arrangements

Short-term debt at June 30, 2011 and December 31, 2010 was as follows:

	June 30,		December 31,
	2011		2010
Variable-rate lines of credit for certain of the Company’s foreign subsidiaries with various banks with interest rates ranging from 2.44% to 6.72% and 2.40% to 5.10% at June 30, 2011 and December 31, 2010, respectively	$	22.9	$	22.4
Short-term debt	$	22.9	$	22.4

The lines of credit for certain of the Company’s foreign subsidiaries provide for borrowings up to $304.0 million. At June 30, 2011, the Company had borrowings outstanding of $22.9 million and guarantees of $2.8 million, which reduced the availability under these facilities to $278.3 million.

The Company has a $150 million Accounts Receivable Securitization Financing Agreement (Asset Securitization Agreement), which matures November 10, 2012. Under the terms of the Asset Securitization Agreement, the Company sells, on an ongoing basis, certain domestic trade receivables to Timken Receivables Corporation, a wholly-owned consolidated subsidiary, that in turn uses the trade receivables to secure borrowings, which are funded through a vehicle that issues commercial paper in the short-term market. Borrowings under the agreement are limited to certain borrowing base calculations. Any amounts outstanding under this Asset Securitization Agreement would be reported in short-term debt on the Company’s Consolidated Balance Sheet. As of June 30, 2011, there were no outstanding borrowings under the Asset Securitization Agreement. The cost of this facility, which is the commercial paper rate plus program fees, is considered a financing cost and is included in interest expense in the Consolidated Statement of Income.

Long-term debt at June 30, 2011 and December 31, 2010 was as follows:

	June 30,		December 31,
	2011		2010
Fixed-rate Medium-Term Notes, Series A, due at various dates through May 2028, with interest rates ranging from 6.74% to 7.76%	$	175.0	$	175.0
Fixed-rate Senior Unsecured Notes, due September 15, 2014, with an interest rate of 6.0%		249.8		249.7
Variable-rate State of Ohio Water Development Revenue Refunding Bonds, maturing on November 1, 2025 (0.18% at June 30, 2011)		12.2		12.2
Variable-rate State of Ohio Air Quality Development Revenue Refunding Bonds, maturing on November 1, 2025 (0.47% at June 30, 2011)		9.5		9.5
Variable-rate State of Ohio Pollution Control Revenue Refunding Bonds, maturing on June 1, 2033 (0.47% at June 30, 2011)		17.0		17.0
Variable-rate credit facility with US Bank for Advanced Green Components, LLC, maturing on July 17, 2011 (1.35% at June 30, 2011)		6.1		8.3
Other		28.4		19.6
		498.0		491.3
Less current maturities		7.4		9.6
Long-term debt	$	490.6	$	481.7

On May 11, 2011, the Company entered into a $500 million Amended and Restated Credit Agreement (Senior Credit Facility). This Senior Credit Facility amended and restated the former senior credit facility, which was due to expire on July 10, 2012. The Senior Credit Facility now matures on May 11, 2016. At June 30, 2011, the Company had no outstanding borrowings under the Senior Credit Facility but had letters of credit outstanding totaling $17.2 million, which reduced the availability under the Senior Credit Facility to $482.8 million. Under the Senior Credit Facility, the Company has two financial covenants: a consolidated leverage ratio and a consolidated interest coverage ratio. At June 30, 2011, the Company was in full compliance with the covenants under the Senior Credit Facility.

Advanced Green Components, LLC (AGC) is a joint venture of the Company. As of June 30, 2011, the Company had reserved cash of $4.8 million in a collateral account to secure up to $4.8 million of the indebtedness between AGC and US Bank in the event AGC defaults on its credit facility with US Bank. The $4.8 million collateral account is classified as restricted cash on the Consolidated Balance Sheet as of June 30, 2011.

Certain of the Company’s foreign subsidiaries have facilities that also provide for long-term borrowings up to $27.3 million. At June 30, 2011, the Company had borrowings outstanding of $27.1 million, which reduced the availability under these long-term facilities to $0.2 million.

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Inventories (Tables)

6 Months Ended

Jun. 30, 2011

Inventories (Tables) [Abstract]

Inventory net items net of reserve alternative

	June 30,		December 31,
	2011		2010
Inventories, net:
Manufacturing supplies	$	59.0	$	57.9
Work in process and raw materials		425.9		371.9
Finished products		444.0		398.7
Inventories, net	$	928.9	$	828.5

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Product Warranty (Details) (USD $) In Millions	6 Months Ended	12 Months Ended
	Jun. 30, 2011	Dec. 31, 2010
Roll forward of Product warranty accruals
Beginning Balance	$ 8.0	$ 5.4
Expense	2.4	6.0
Payments	(0.8)	(3.4)
Ending Balance	$ 9.6	$ 8.0

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Impairment and Restructuring Charges (Tables)

6 Months Ended

Jun. 30, 2011

Impairment and Restructuring Charges (Tables) [Abstract]

Impairment and Restructuring Charges By Segment

	Mobile		Process		Aerospace
	Industries		Industries		& Defense		Steel		Corporate		Total
| | | | | |
Impairment charges	$	0.1	$	0.2	$	0.1	$	—	$	—	$	0.4
Severance expense and related benefit costs		0.2		—		—		—		—		0.2
Exit costs		5.4		0.2		—		—		—		5.6
Total	$	5.7	$	0.4	$	0.1	$	—	$	—	$	6.2

	Mobile			Process		Aerospace
	Industries			Industries		& Defense		Steel			Corporate		Total
| | | | | |
Severance expense and related benefit costs	$	(0.6	)	$	—	$	0.8	$	(0.1	)	$	—	$	0.1
Exit costs		0.5			0.2		0.2		—			—		0.9
Total	$	(0.1	)	$	0.2	$	1.0	$	(0.1	)	$	—	$	1.0

	Mobile		Process		Aerospace
	Industries		Industries		& Defense		Steel		Corporate		Total
Impairment charges	$	0.1	$	0.2	$	0.1	$	—	$	—	$	0.4
Severance expense and related benefit costs		0.1		—		—		—		—		0.1
Exit costs		6.6		0.2		—		—		—		6.8
Total	$	6.8	$	0.4	$	0.1	$	—	$	—	$	7.3

	Mobile		Process		Aerospace
	Industries		Industries		& Defense		Steel			Corporate		Total
Severance expense and related benefit costs	$	1.6	$	1.6	$	1.4	$	(0.1	)	$	0.6	$	5.1
Exit costs		0.9		0.2		0.3		—			—		1.4
Total	$	2.5	$	1.8	$	1.7	$	(0.1	)	$	0.6	$	6.5

Roll Forward consolidated restructuring accrual

	June 30,			December 31,
	2011			2010
| |
Beginning balance, January 1	$	22.1		$	34.0
Expense		6.9			17.0
Payments		(4.2	)		(28.9	)
Ending balance	$	24.8		$	22.1

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Consolidated Statements of Cash Flows (Unaudited) (USD $) In Millions	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Operating Activities
Net income attributable to The Timken Company	$ 234.2	$ 114.2
Earnings from discontinued operations	0	(4.5)
Net income attributable to noncontrolling interest	1.9	1.0
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	93.8	95.2
Impairment charges	3.2	0
(Gain) loss on sale of assets	(0.6)	2.3
Gain on divestiture	(0.5)	0
Deferred income tax provision	42.2	17.1
Stock-based compensation expense	9.2	8.5
Pension and other postretirement expense	37.2	45.9
Pension and other postretirement benefit contributions and payments	(331.8)	(133.6)
Changes in operating assets and liabilities:
Accounts receivable	(191.7)	(103.8)
Inventories	(86.6)	(45.7)
Trade accounts payable	46.9	67.5
Other accrued expenses	(38.8)	15.4
Income taxes	19.8	66.1
Other - net	(1.3)	13.9
Net Cash (Used) Provided by Operating Activities - Continuing Operations	(162.9)	159.5
Net Cash Provided by Operating Activities - Discontinued Operations	0	4.5
Net Cash (Used) Provided By Operating Activities	(162.9)	164.0
Investing Activities
Capital expenditures	(59.6)	(39.0)
Proceeds from disposals of property, plant and equipment	5.2	0.5
Divestitures	4.8	0
Investments in short-term marketable securities	(13.3)	0
Other	1.9	1.1
Net Cash Used by Investing Activities	(61.0)	(37.4)
Financing Activities
Cash dividends paid to shareholders	(37.1)	(21.3)
Net proceeds from common share activity	23.2	19.4
Purchase of treasury shares - net	(25.3)	(29.2)
Proceeds from issuance of long-term debt	9.2	11.0
Payments on long-term debt	(3.1)	(9.0)
Short-term debt activity - net	0.1	(20.8)
Increase in restricted cash	(4.8)	0
Other	(4.1)	0
Net Cash Used by Financing Activities	(41.9)	(49.9)
Effect of exchange rate changes on cash	21.5	(36.0)
(Decrease) Increase In Cash and Cash Equivalents	(244.3)	40.7
Cash and cash equivalents at beginning of year	877.1	755.5
Cash and Cash Equivalents at End of Period	$ 632.8	$ 796.2

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Property, Plant and Equipment (Tables)

6 Months Ended

Jun. 30, 2011

Property, Plant and Equipment (Tables) [Abstract]

Components of property, plant and equipment

	June 30,			December 31,
	2011			2010
Property, Plant and Equipment:
Land and buildings	$	634.9		$	623.2
Machinery and equipment		2,872.7			2,830.8
Subtotal		3,507.6			3,454.0
Less allowances for depreciation		(2,264.5	)		(2,186.3	)
Property, Plant and Equipment — net	$	1,243.1		$	1,267.7

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Impairment and Restructuring Charges (Details 1) (USD $) In Millions	6 Months Ended	12 Months Ended
	Jun. 30, 2011	Dec. 31, 2010
Roll Forward consolidated restructuring accrual
Beginning Balance	$ 22.1	$ 34.0
Expense	6.9	17.0
Payments	(4.2)	(28.9)
Ending Balance	$ 24.8	$ 22.1

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Financing Arrangements (Tables)

6 Months Ended

Jun. 30, 2011

Financing Arrangements (Tables) [Abstract]

Short-term debt

	June 30,		December 31,
	2011		2010
Variable-rate lines of credit for certain of the Company’s foreign subsidiaries with various banks with interest rates ranging from 2.44% to 6.72% and 2.40% to 5.10% at June 30, 2011 and December 31, 2010, respectively	$	22.9	$	22.4
Short-term debt	$	22.9	$	22.4

Long-term debt

	June 30,		December 31,
	2011		2010
Fixed-rate Medium-Term Notes, Series A, due at various dates through May 2028, with interest rates ranging from 6.74% to 7.76%	$	175.0	$	175.0
Fixed-rate Senior Unsecured Notes, due September 15, 2014, with an interest rate of 6.0%		249.8		249.7
Variable-rate State of Ohio Water Development Revenue Refunding Bonds, maturing on November 1, 2025 (0.18% at June 30, 2011)		12.2		12.2
Variable-rate State of Ohio Air Quality Development Revenue Refunding Bonds, maturing on November 1, 2025 (0.47% at June 30, 2011)		9.5		9.5
Variable-rate State of Ohio Pollution Control Revenue Refunding Bonds, maturing on June 1, 2033 (0.47% at June 30, 2011)		17.0		17.0
Variable-rate credit facility with US Bank for Advanced Green Components, LLC, maturing on July 17, 2011 (1.35% at June 30, 2011)		6.1		8.3
Other		28.4		19.6
		498.0		491.3
Less current maturities		7.4		9.6
Long-term debt	$	490.6	$	481.7

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Recently Issued Accounting Pronouncements

6 Months Ended

Jun. 30, 2011

New Recently Issued Accounting Pronouncements [Abstract]

Recently Issued Accounting Pronouncements

Note 2 — Recently Issued Accounting Pronouncements

In June 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2011-05 Comprehensive Income (Topic 220): Presentation of Comprehensive Income, which includes new accounting rules related to the presentation of comprehensive income. The new accounting rules require that entities present a statement of other comprehensive income within the consolidated financial statements in one of two manners: a single statement approach or a two-statement approach. The single statement approach consists of a single statement presenting the components of net income and total net income, the components of other comprehensive income and a total for other comprehensive income. The two-statement approach allows for the components of net income and total net income to be presented in a financial statement, immediately followed by another financial statement presenting the components of other comprehensive income and a total for comprehensive income. The new accounting rules are effective, on a retrospective basis, for fiscal years beginning after December 15, 2011. The adoption of the new accounting rules related to the presentation of other comprehensive income is not expected to have a material impact on the Company’s results of operations and financial condition, but it will affect how the Company reports other comprehensive income. Management is currently evaluating which presentation method to adopt after the new rules are effective.

In May 2011, the FASB issued new accounting guidance updating ASU No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. The new accounting rules do not extend the use of fair value accounting; they only provide additional guidance on the application and disclosure of fair value accounting where its use is currently permitted. The new accounting rules also expand the required disclosures about fair value measurement. The provisions for the new accounting rules are effective, on a prospective basis, for interim and fiscal periods beginning after December 15, 2011. The adoption of the new accounting rules for fair value measurements is not expected to have a material impact on the Company’s results of operations and financial condition.

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Impairment and Restructuring Charges

6 Months Ended

Jun. 30, 2011

Impairment and Restructuring Charges [Abstract]

Impairment and Restructuring Charges

Note 11 — Impairment and Restructuring Charges

Impairment and restructuring charges by segment are comprised of the following:

For the three months ended June 30, 2011:

	Mobile		Process		Aerospace
	Industries		Industries		& Defense		Steel		Corporate		Total
| | | | | |
Impairment charges	$	0.1	$	0.2	$	0.1	$	—	$	—	$	0.4
Severance expense and related benefit costs		0.2		—		—		—		—		0.2
Exit costs		5.4		0.2		—		—		—		5.6
Total	$	5.7	$	0.4	$	0.1	$	—	$	—	$	6.2

For the three months ended June 30, 2010:

	Mobile			Process		Aerospace
	Industries			Industries		& Defense		Steel			Corporate		Total
| | | | | |
Severance expense and related benefit costs	$	(0.6	)	$	—	$	0.8	$	(0.1	)	$	—	$	0.1
Exit costs		0.5			0.2		0.2		—			—		0.9
Total	$	(0.1	)	$	0.2	$	1.0	$	(0.1	)	$	—	$	1.0

For the six months ended June 30, 2011:

	Mobile		Process		Aerospace
	Industries		Industries		& Defense		Steel		Corporate		Total
Impairment charges	$	0.1	$	0.2	$	0.1	$	—	$	—	$	0.4
Severance expense and related benefit costs		0.1		—		—		—		—		0.1
Exit costs		6.6		0.2		—		—		—		6.8
Total	$	6.8	$	0.4	$	0.1	$	—	$	—	$	7.3

For the six months ended June 30, 2010:

	Mobile		Process		Aerospace
	Industries		Industries		& Defense		Steel			Corporate		Total
Severance expense and related benefit costs	$	1.6	$	1.6	$	1.4	$	(0.1	)	$	0.6	$	5.1
Exit costs		0.9		0.2		0.3		—			—		1.4
Total	$	2.5	$	1.8	$	1.7	$	(0.1	)	$	0.6	$	6.5

The following discussion explains the major impairment and restructuring charges recorded for the periods presented; however, it is not intended to reflect a comprehensive discussion of all amounts in the tables above.

Mobile Industries

In March 2007, the Company announced the closure of its manufacturing facility in Sao Paulo, Brazil. The Company has substantially completed the closure of this facility as of June 30, 2011. Pretax costs associated with the closure could be as high as approximately $60 million, which includes restructuring costs and rationalization costs recorded in cost of products sold and selling, general and administrative expenses. The increase in costs from $40 million to $60 million was due to uncertainty around higher environmental remediation costs. Mobile Industries has incurred pretax costs of approximately $40.7 million as of June 30, 2011. During the second quarter and first six months of 2011, the Company recorded $4.9 million and $6.0 million, respectively, of exit costs associated with the closure of this facility. The exit costs were primarily related to environmental remediation costs and workers compensation claims for former associates. The Company accrues environmental remediation costs and workers compensation claims when they become probable and estimable.

Workforce Reductions

In 2009, the Company began the realignment of its organization to improve efficiency and reduce costs as a result of the economic downturn that began during the latter part of 2008. This initiative was completed in 2010. During the first six months of 2010, the Company recorded $4.8 million of severance and related benefit costs related to this initiative, which included both selling and administrative cost reductions, as well as manufacturing workforce reductions. Of the $4.8 million charge recorded during the first six months of 2010, $1.5 million related to the Mobile Industries segment, $1.3 million related to the Process Industries segment, $1.3 million related to the Aerospace and Defense segment and $0.7 million related to Corporate positions.

The following is a rollforward of the consolidated restructuring accrual for the six months ended June 30, 2011 and the twelve months ended December 31, 2010:

	June 30,			December 31,
	2011			2010
| |
Beginning balance, January 1	$	22.1		$	34.0
Expense		6.9			17.0
Payments		(4.2	)		(28.9	)
Ending balance	$	24.8		$	22.1

The restructuring accrual at June 30, 2011 and December 31, 2010 was included in other current liabilities on the Consolidated Balance Sheets. The accrual at June 30, 2011 included $5.6 million of severance and related benefits, which are expected to be paid by the end of 2011. The accrual for severance and related benefits at June 30, 2011 primarily related to the closure of the distribution center in Bucyrus, Ohio, which was completed during the second quarter of 2011, and the closure of the manufacturing facility in Sao Paulo, Brazil. The remainder of the restructuring accrual at June 30, 2011 primarily represented environmental exit costs, which are principally related to Sao Paulo, Brazil. As of June 30, 2011, the Company has $10.9 million reserved for environmental matters in Sao Paulo, Brazil, which is its best estimate of its environmental liability at this time. The Company adjusts environmental remediation accruals based on the best available estimate of costs to be incurred, the timing and extent of remedial actions required by governmental authorities and the amount of the Company’s liability in proportion to other responsible parties. The Company’s estimated total liability for this site ranges from a minimum of $10.9 million to a maximum of $20.9 million. It is possible that the estimate may change in the near term.

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Property, Plant and Equipment (Details) (USD $) In Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010	Dec. 31, 2010
Components of property, plant and equipment
Land and Buildings	$ 634.9		$ 634.9		$ 623.2
Machinery and equipment	2,872.7		2,872.7		2,830.8
Subtotal	3,507.6		3,507.6		3,454.0
Less allowances for depreciation	(2,264.5)		(2,264.5)		(2,186.3)
Property, Plant and Equipment - net	1,243.1		1,243.1		1,267.7
Property, Plant and Equipment (Textuals) [Abstract]
The carrying amount of capitalized computer software included in Machinery and equipment	92.9		92.9		99.7
Depreciation expense	44.1	44.9	89.2	90.2
Depreciation expense on capitalized software	$ 3.6	$ 5.1	$ 10.5	$ 10.4

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Subsequent Event

6 Months Ended

Jun. 30, 2011

Subsequent Event [Abstract]

Subsequent Event

Note 15 — Subsequent Event

In July 2011, the Company completed the acquisition of the assets of Philadelphia Gear Corp. (Philadelphia Gear), a leading provider of high-performance gear drives and components with a strong focus on value-added aftermarket capabilities in the industrial and military marine sectors, for $200 million. Based in King of Prussia, Pennsylvania and employing approximately 220 people, Philadelphia Gear had trailing 12-month sales through March 2011 of approximately $85 million. The Company will report Philadelphia Gear within the Process Industries segment.

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Consolidated Statements of Income (Unaudited) (USD $) In Millions, except Per Share data	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Consolidated Statement of Income [Abstract]
Net sales	$ 1,329.6	$ 1,011.4	$ 2,583.7	$ 1,925.1
Cost of products sold	979.1	743.1	1,899.9	1,434.1
Gross Profit	350.5	268.3	683.8	491.0
Selling, general and administrative expenses	153.7	140.7	304.0	273.7
Impairment and restructuring charges	6.2	1.0	7.3	6.5
Operating Income	190.6	126.6	372.5	210.8
Interest expense	(9.3)	(10.0)	(19.1)	(19.6)
Interest income	1.4	0.9	2.9	1.5
Other income (expense) , net	1.1	2.7	(1.3)	2.1
Income From Continuing Operations Before Income Taxes	183.8	120.2	355.0	194.8
Provision for income taxes	61.5	38.2	118.9	84.1
Income From Continuing Operations	122.3	82.0	236.1	110.7
Income from discontinued operations, net of income taxes		4.2	0	4.5
Net Income	122.3	86.2	236.1	115.2
Less: Net income attributable to noncontrolling interest	0.8	0.6	1.9	1.0
Net Income Attributable to The Timken Company	121.5	85.6	234.2	114.2
Amounts Attributable to The Timken Company's Common Shareholders:
Income from continuing operations, net of income taxes	121.5	81.4	234.2	109.7
Income from discontinued operations, net of income taxes		4.2	0	4.5
Net Income Attributable to The Timken Company	$ 121.5	$ 85.6	$ 234.2	$ 114.2
Net Income per Common Share Attributable to The Timken Company's Common Shareholders
Earnings per share - Continuing Operations	$ 1.24	$ 0.84	$ 2.39	$ 1.13
Earnings per share - Discontinued Operations		$ 0.04		$ 0.05
Basic earnings per share	$ 1.24	$ 0.88	$ 2.39	$ 1.18
Diluted earnings per share - Continuing Operations	$ 1.22	$ 0.84	$ 2.36	$ 1.13
Diluted earnings per share - Discontinued Operations		$ 0.04		$ 0.04
Diluted earnings per share	$ 1.22	$ 0.88	$ 2.36	$ 1.17
Dividends per share	$ 0.20	$ 0.13	$ 0.38	$ 0.22

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Goodwill and Other Intangible Assets (Details 1) (USD $) In Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010	Dec. 31, 2010
Intangible assets subject to amortization:
Intangible assets, Gross Carrying Amount	$ 162.8		$ 162.8		$ 163.2
Intangible assets, Accumulated Amortization	54.8		54.8		50.2
Intangible assets, Net Carrying Amount	108.0		108.0		113.0
Intangible assets not subject to amortization:
Tradename	2.0		2.0		2.0
Indefinite Lived Faa Air Agency Certificates	14.2		14.2		14.2
Indefinite Lived Intangible Assets Net	16.2		16.2		16.2
Total intangible assets, Gross Carrying Amount	179.0		179.0		179.4
Total intangible assets, Net Carrying Amount	124.2		124.2		129.2
Goodwill and Other Intangible Assets (Textuals) [Abstract]
Amortization expense for intangible assets	2.3	2.4	4.6	4.8
Future Amortization Expense Year 2011			9.5
Future Amortization Expense Year 2012			9.1
Future Amortization Expense Year 2013			7.6
Future Amortization Expense Year 2014			7.4
Future Amortization Expense Year 2015			7.4
Customer Relationships [Member]
Intangible assets subject to amortization:
Intangible assets, Gross Carrying Amount	81.5		81.5		82.0
Intangible assets, Accumulated Amortization	20.8		20.8		18.6
Intangible assets, Net Carrying Amount	60.7		60.7		63.4
Engineering drawings [Member]
Intangible assets subject to amortization:
Intangible assets, Gross Carrying Amount	2.0		2.0		2.0
Intangible assets, Accumulated Amortization	2.0		2.0		2.0
Intangible assets, Net Carrying Amount	0		0		0
Know-how [Member]
Intangible assets subject to amortization:
Intangible assets, Gross Carrying Amount	2.1		2.1		2.1
Intangible assets, Accumulated Amortization	1.1		1.1		1.0
Intangible assets, Net Carrying Amount	1.0		1.0		1.1
Industrial license agreements [Member]
Intangible assets subject to amortization:
Intangible assets, Gross Carrying Amount	0.4		0.4		0.4
Intangible assets, Accumulated Amortization	0.1		0.1		0.1
Intangible assets, Net Carrying Amount	0.3		0.3		0.3
Land-use rights [Member]
Intangible assets subject to amortization:
Intangible assets, Gross Carrying Amount	8.4		8.4		8.2
Intangible assets, Accumulated Amortization	3.6		3.6		3.3
Intangible assets, Net Carrying Amount	4.8		4.8		4.9
Patents [Member]
Intangible assets subject to amortization:
Intangible assets, Gross Carrying Amount	4.4		4.4		4.4
Intangible assets, Accumulated Amortization	3.4		3.4		3.3
Intangible assets, Net Carrying Amount	1.0		1.0		1.1
Technology use [Member]
Intangible assets subject to amortization:
Intangible assets, Gross Carrying Amount	38.9		38.9		39.0
Intangible assets, Accumulated Amortization	7.3		7.3		6.3
Intangible assets, Net Carrying Amount	31.6		31.6		32.7
Trademarks [Member]
Intangible assets subject to amortization:
Intangible assets, Gross Carrying Amount	6.0		6.0		6.0
Intangible assets, Accumulated Amortization	5.1		5.1		5.0
Intangible assets, Net Carrying Amount	0.9		0.9		1.0
PMA licenses [Member]
Intangible assets subject to amortization:
Intangible assets, Gross Carrying Amount	8.8		8.8		8.8
Intangible assets, Accumulated Amortization	2.9		2.9		2.7
Intangible assets, Net Carrying Amount	5.9		5.9		6.1
Noncompete Agreements [Member]
Intangible assets subject to amortization:
Intangible assets, Gross Carrying Amount	2.7		2.7		2.7
Intangible assets, Accumulated Amortization	2.1		2.1		1.9
Intangible assets, Net Carrying Amount	0.6		0.6		0.8
Unpatented Technology [Member]
Intangible assets subject to amortization:
Intangible assets, Gross Carrying Amount	7.6		7.6		7.6
Intangible assets, Accumulated Amortization	6.4		6.4		6.0
Intangible assets, Net Carrying Amount	$ 1.2		$ 1.2		$ 1.6

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Fair Value (Details 1) (USD $) In Millions	6 Months Ended
	Jun. 30, 2011
Long-lived assets adjusted to fair value
Inventories at carrying value	$ 4.7
Inventories at fair value adjustment	(3.2)
Inventories, fair value	1.5
Equity Method Investments at carrying value	6.9
Equity Method Investment at fair value adjustment	(2.8)
Equity investments, fair value	4.1
Assets held for sale at carrying value	11.6
Assets held for sale fair value adjustment	(6.0)
Assets held for sale fair value	5.6
Long lived fixed assets held and used at carrying value	0.4
Long lived fixed assets held and used at fair value adjustment	(0.4)
Long lived fixed assets held and used at fair value	0
Total Assets Prior to Adjustment to Fair Value	12.0
Fair value adjustment for total assets written down during the period	(6.4)
Fair value of total assets adjusted during the period	$ 5.6

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Impairment and Restructuring Charges (Details Textuals) (USD $) In Millions	3 Months Ended		6 Months Ended							3 Months Ended		6 Months Ended		1 Months Ended	3 Months Ended	6 Months Ended	3 Months Ended		6 Months Ended		3 Months Ended	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2010 Process Industries [Member] Workforce Reductions [Member]	Jun. 30, 2010 Aerospace and Defense [Member] Workforce Reductions [Member]	Jun. 30, 2010 Mobile Industries [Member] Workforce Reductions [Member]	Jun. 30, 2010 Workforce Reductions [Member]	Jun. 30, 2010 Workforce Reductions [Member] Corporate [Member]	Jun. 30, 2011 Mobile Industries [Member]	Jun. 30, 2010 Mobile Industries [Member]	Jun. 30, 2011 Mobile Industries [Member]	Jun. 30, 2010 Mobile Industries [Member]	Mar. 31, 2007 Mobile Industries [Member] Sao Paulo [Member]	Jun. 30, 2011 Mobile Industries [Member] Sao Paulo [Member]	Jun. 30, 2011 Mobile Industries [Member] Sao Paulo [Member]	Jun. 30, 2011 Process Industries [Member]	Jun. 30, 2010 Process Industries [Member]	Jun. 30, 2011 Process Industries [Member]	Jun. 30, 2010 Process Industries [Member]	Jun. 30, 2010 Aerospace and Defense [Member]	Jun. 30, 2011 Aerospace and Defense [Member]	Jun. 30, 2010 Aerospace and Defense [Member]	Jun. 30, 2010 Corporate [Member]	Jun. 30, 2011 Sao Paulo [Member]
Impairment and Restructuring Charges (Textuals) [Abstract]
Severance and related benefit costs	$ 0.2	$ 0.1	$ 0.1	$ 5.1	$ 1.3	$ 1.3	$ 1.5	$ 4.8	$ 0.7	$ 0.2	$ (0.6)	$ 0.1	$ 1.6							$ 1.6	$ 0.8		$ 1.4	$ 0.6
Accrual for Severance Costs	5.6		5.6
Expected pretax costs approximately														60
Original Expected pretax costs approximately														40
Pretax cost incurred															40.7	40.7
Exit costs	5.6	0.9	6.8	1.4						5.4	0.5	6.6	0.9		4.9	6.0	0.2	0.2	0.2	0.2	0.2	0	0.3
Loss Contingency, Range of Possible Loss																									10.9
Minimum estimated liability for the site																									10.9
Maximum estimated liability for the site																									$ 20.9

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Retirement and Postretirement Benefit Plans (Details) (USD $) In Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Pension [Member]
Components of net periodic benefit cost
Service cost	$ 7.9	$ 7.0	$ 16.2	$ 16.5
Interest cost	39.6	39.3	79.4	79.0
Expected return on plan assets	(57.5)	(50.8)	(107.6)	(100.1)
Amortization of prior service cost (credit)	2.3	2.4	4.7	4.7
Amortization of net actuarial loss	15.2	13.7	28.0	25.9
Net periodic benefit cost	7.5	11.6	20.7	26.0
Postretirement [Member]
Components of net periodic benefit cost
Service cost	0.7	0.4	1.2	1.1
Interest cost	7.5	8.4	16.2	17.5
Expected return on plan assets	(1.5)		(2.2)
Amortization of prior service cost (credit)	0.2	(0.4)	(0.2)	(0.7)
Amortization of net actuarial loss	0.5	0.7	1.5	2.0
Net periodic benefit cost	$ 7.4	$ 9.1	$ 16.5	$ 19.9

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Financing Arrangements (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2011	Dec. 31, 2010
Short-term debt
Short-term debt	$ 22.9	$ 22.4
Schedule of Short term Debt (Textuals) [Abstract]
Maximum borrowing capacity under line of credit	150.0
Borrowings outstanding	0
Additional Financing Arrangements (Textuals) [Abstract]
Maximum borrowing capacity under line of credit	150.0
Line of credit expiration date	2012-11-10
Outstanding borrowing under Securitization Agreement	0
Line of Credit [Member] | Foreign Subsidiary [Member]
Short-term debt
Short-term debt	22.9	22.4
Variable-rate lines of credit [Member]
Schedule of Short term Debt (Textuals) [Abstract]
Line of Credit stated variable interest rate, Low Range	2.44%	2.40%
Line of Credit stated variable interest rate, High Range	6.72%	5.10%
Foreign Subsidiary [Member]
Schedule of Short term Debt (Textuals) [Abstract]
Maximum borrowing capacity under line of credit	304.0
Borrowings outstanding	22.9
Borrowings guarantees	2.8
Remaining Borrowing Capacity under Line of Credit Facility of Company's foreign subsidiaries	278.3
Additional Financing Arrangements (Textuals) [Abstract]
Maximum borrowing capacity under line of credit	304.0
Outstanding borrowing under Securitization Agreement	$ 22.9