eet Yells } OUR NEW ENTERPRISE Tae) afl) lel March, 2009esate Dee) een Steve Tschiegg, Director - Capital Markets & Investor Relations Where You Turn aCe eonSAFE HARBOR STATEMENT: Certain statements inthis presentation (Including statements regarding the company's forecasts. boliofs, ostimates and expectations) that are not historical er Chr ee CC a ak haar et) fe eek A el ee er ey eMac PL Con ae ee ee results may differ materially from those projected or implied in forward-looking statements due en ce eee ae eerie Lent Remi iceman net ieee ie eter) ete eee agi ee Ita ene Li eee ak eee mechanisms; the Impact of the company's LIFO accounting; changes in global economic Senne nae ie ere are ‘changes in the expected costs associatod with product warranty claims; tho results of the Se ae ete ne eae cee osa eee eter Cue y manufacturing facies; the impact on operations of general economic conditions, higher or ea ere i eS Rae Len eee ser ec eeu eae n nea a re ee ce) Pee Rue ta teeta tote eran cree ae) eee oe eer Leng eo err ee et a ce oe on Peer eae re esgO A About The Timken Company + Aleading provider of friction management and power transmission solutions to diverse markets, including: Aerospace — ~ Construction — Mining ~ Truck — Energy — Automotive — Rall = Distribution + Established in 1899 + 2008 sales: $5.7 billion + 25,000 associates in 26 countries + Global network of 12 technology centers TO oo eer LLbeta Vision, Values & Aspiration Our Vision We are dedicated to improving our customers’ performance by applying our knowledge of friction management and power transmission to deliver unparalleled value and innovation all around the world Our Values Ethics & Integrity Quality Innovation Independence Our Financial Aspiration Top Quartile Shareholder Returns The Core of Who We AreOur Strategy Model Where You Turn + Enhance existing products + Industrial markets and services + Geographies + Leverage technology to create value + Channels, + Capture lifetime of opportunity + Structure portfolio + Improve efficiency for value creation + Lower cost structure performing sectors + Increase agility + Deliver greater profitability and build on brand promi ‘Shaping Our New EnterpriseOur New Enterprise Where You Turn ‘Aerospace & Defense + Dyers growth in defense, commorcit anche afermarket.. beyond bears Mobile Industries Process «Peco rasiomaten/ Industries vauerpased preng + Slot grown, aversten, song atermarier Stee! Group + Ennancng market leadership postion where performance demands ae Note: Seqmeriatie bases on 208 sales, Steel Group ses exc intr segment aso 8158 rion, Leveraging our Capabilities in New Ways.Where You Turn End Markets 2002 2008 Sales: $2.6B Sales: $5.7B Aepeture Mere at constuction Aerospace 8 Detense Irsusrial Light Tuck, Markets Passenger Car ‘A, Mtermaret Automotive Light Vehicle: 40% Automotive Light Vehicle: 27% anna UCU [— bere Trick Passenger car [Ato Ntermarkst = nausea ache [— Eneray [— Hea ectim TrickGeographic Sales Diversification Where You Turn 2002 2008 $2.6 ion $5.7 Billion Asia Asia 5% 8% United States uns United 4 Bt Europe 1 — pest ot World Europe tng a Sales Outside een United States: 26% 8% Sales Outside United States: 36% ‘Note:2002 sles nce conrad cpa, CMe uobeta Portfolio Shift 2002 - 2008 Revenue Impact ($Millions) $1,500 Acquired $1.48 of protit-enhancing business: $1,000 Torrington Turbo Engines Alcor Engine Purdy SES Tech. Services Boxing Speciatios (8S!) Bearing Inspection Inc. (Bi). -EXTEX $500 Turbo Technologies Divested $650M non-strategic / underperforming business: (500) Airframe business Precision Stoo! Components - Europe Kilian Bearings Latrobe Stee!| Linear Mation Systems - Automotive Steering NAB Bearings JV (India) - Timken NSK Bearings JV (81,000) .. and completed multiple facility rationalizations Transforming for ValueSegment Profitability 2002-2008 Where You Turn Sales EBIT ‘Automotive Bearings 753 SHY Industrial Bearings, se72 873 Steel seet $38 Consolidated Company $2550 S115, Sales = EBIT Margin Mobile Industries $2264 SIT orm Transform Process Industries $1278 $287 19.3% Grow ‘Aerospace & Defense saat $50 17% Grow ‘Steel Group $1,852 $284 14.3% Differentiate Unalocated Corporate Expense (s68) Consolidated Company $5664 $505 8% BESTT Rm Ce 0Mobile Industries Market Sector Profile + A group of diverse market sectors with similar buying behaviors * OE and aftermarket bearings for engine valve trains, transmissions, and wheel-ends Facing Challenging Markets 2008 Sales: $2.3 Billion Auto ‘Aftermarket 10% Light Truck Rail 25% Off-Highway 23 Passenger Car 17%gO A Mobile Industries Strategic Focus Achievements: + Improved pricing and cost reductions + Improved material cost recovery + Managed dramatic reduction in demand + Exited some unprofitable business + Reduced S&A expenses Key areas of focus: + Pricing and contracts + Managing demand reduction + Fix or exit unprofitable business + Expand aftermarket opportunity URC acyWhere You Turn Process Industries Market Sector Profile + Diverse markets 2008 Sales: $1.3 Billion + Diverse customer base ; Services: = 1,400+ original a = lnenenl equipment ‘cuss otis! Machinery 1 35% manufacturers = 2,000 distributors — 100,000+ end users + Approximately ery 65% aftermarket; eT providing more stable \ profitable business _——= Inggerocie — 21% eu Runes ea rE}gO A Process Industries Strategic Focus Achievements: + Profitable growth in key market areas of focus: - cement, metals, wind + Asian growth initiative progress + Improved protit margin + Installation and ramp-up of capacity - Xiangtan JV, Wuxi, Chennai Key areas of focus: + Align operations with lower demand + Cost / cash management + Strengthen market position ~ energy markets and Asian infrastructure - continue to develop and grow global aftermarket + Broaden power transmission product offering & equipment maintenance services Cr eco eae Pe aedWhere You Turn Aerospace and Defense Market Sector Profile + Focused on growth beyond 2008 Sales: $0.4 Billion bearings vor Defense + OE and aftermarket seeomner solutions zon — helicopter transmissions oe — OE bearings — parts reconditioning — overhaul products & services + Health positioning and controls Gener ‘vation ee Commercial, ‘Aerospace 2H ecu tua iTgO A Aerospace and Defense Strategic Focus Achievements: + Growth beyond bearings in new markets ~ power transmission parts & services now nearly half of portfolio. + Stronger aftermarket presence * Higher margins and growing demand + Increased capacity + Integrated Purdy and acquired EXTEX Key areas of focus: + Extend powertrain system & service offerings ~ Asia, related products, aftermarket + Leverage Purdy and EXTEX acquisitions + Ramp-up capacity Bren eC ken muWhere You Turn Steel Group Market Sector Profile + High quality air-melted alloy steel bars, tubes, precision components and value-added services + High-end applications where demands on performance are significant Contributor of steel technology to Timken Bearings & Power Transmission Group 2008 Sales: $1.9 Billion ‘Automotive Distribution 17% 24% +? Energy 19% Industrial Boaring 2% 2% Note: 2008 sales icc 158 lien inter sagen sl. Differentiating has Reduced Cyclicality regO A Steel Group Strategic Focus Achievements: + Record sales, profitability, strong cash generation + Managed raw-material input cost volatility * Grow / Differentiate ~ acquired BSI: oil and gas industry focused ~ expansion of thermal treatment capabilities: strengthening competitive position - opened new small-bar rolling mill: highly specialized power transmission applications Key areas of focus: + Align operations with lower demand + Continuous improvement, cost saving initiatives + USW contract negotiation + Ramp-up of small-bar mill Earning Above Cost of Capital through the CyclegO A Our Priorities Execution + Balance manufacturing output to demand + Focus on cash flow generation - S&A cost reductions, reduce employment levels ~ lower Capex ~ better working capital management Implement lean operating model, leveraging Project O.N.E. investment Maintain financial strength; strong balance sheet & ample liquidity Manage legacy pension & post-retirement benefit abilities + Strengthen leadership capability Focused Growth + Fix or exit underperforming businesses - pricing and contract terms + Continue growth in targeted industrial markets & geographies - aerospace, energy, industrial aftermarket, heavy industries, Asia SR ec iTFinancial OverviewgO A 2008 — Year In Review + Record Sales of $5.7 billion, up 8% from prior year + Record EPS of $3.26 (excluding special items), up 36% from prior year ~ Special items of $0.48 per share; primarily goodwill impairment charge + ROIC of 11.9%, exceeding cost of capital + Record Free Cash Flow of $230 million + Strong Balance Sheet — Improved debt rating from Moody's (Baa3) Net debtcapital of 23.6%: provides financial flexibility Note: EPS excudes heimpsct ol rpakment ad resus, marviacuingraierateatnineation reerpariaaton and spec chaps mm OC ces me NPAT nage aes Cap ve now cee a rom yori hes ue pesca) mcg mcs a NEAT. Se igpurck GaN Recor NR Ue eeAWivicil| Liquidity — as of 12/31/2008 (in Millions) Cash $116 US. Senior Credit Facility $458 {$600 milion commited: une 2010 U.S. Accounts Receivable Securitization $115 $175 milion comm*ted; Dee. 2008 Foreign Facilities $395 $426 milion primarly on-demand ‘Sub-Total credit availabilty $908 $1,024 Same Total Debt 20002010 2014 & attor S624 sis $9028 214 BO Mes ne}BU aay Sales Continuing Operations Net Sales (in Millions) 2011 Target ‘Approaching 2008 Level bcsny omen &nerene ge Saceai CcAGR 2002-2008: 165 35,000 4000 $3,000 ‘CAGR 1901-2001: 45% $2,000 $1,000 1961 1965 1905 1967 1860 001 2003 2005 2007 20082017 Noe: 2008 inches Toningonacquison as acquteé February 2008, Bern rowth Exceeding Prior CyclegO A Earnings Per Share Continuing Operations Net Sales ll —= Earnings (in Mitions) Per Share 2000 Earnings Outlook: 2011 EPS Target $1.30 $1.80, Approaching 2008 Level becsny omen &nerene ge | 39,000 35,000 $250 2.00 $3,000 $1.50 2.000 $1.00 1,000 $0.50 SoTyoet 1992 1mm 1997 1999 2001 2003 200s oor zoos SOP Note: Exckcoe spi ers, such a resisting arreorgrieaion expenses, COO paymerts ar goad amore, EPS esaumas on. 2003 ndaes Tanah asain as esque Fay 2003 Te ce SC eegO A Free Cash Flow (in Millions) £2009 Outlook: Lower eamings S08 hg a + Higher pension ‘contrbutons “e101 Avg 6m + Lower Capex + Reduced working capita + Strong cash flow ‘generation in 2008; second best year ee ee Note: Free cas ow dine as cash odd by operating avin ches person contre) minus canal fiperatires aa cvtend. Co Result he Cue Re)gO A Net Debt Net Debt ll = Net Debt! (in Millions) Capital 000 8700 600 800 sé0o 8300 200 100 30 woer 1962 10051967 196020012002 2005 zor 200820 Note: 2008ice Taringtonacoieion as acute Febmanry 2008, Net Debt Capa veragn) deed as Net Debt Nt abt + Eau) Su cur) Ebeta Return on Invested Capital ROIC = Cost of Target Range 10 12% sine en Avg 2626 "02008 Ag. 8% 18% 10% nl 10% ont of Capa 9% ow 0% % % ow joc 1962 1005 ©1967 1969 zon 2003 2005 2007 200920 Note:The conpary uses NOPAT Avra rvesind Capa a a yp aa tance ean on capil ROI) [Rrecanlinor 9 GAAP ane Gesspton oe messi canbe foun ne Aopen eee eke LeogO A Capital Allocation Internal growth initiatives + Capacity expansions in targeted industrial market sectors — wind, aerospace, heavy industries + Asian growth + Project O.N.E. (business processes & systems) Acquisitions and divestitures * Criteria Industrial focus ~ Market-leading position — Strong management team — International focus ~ Accretive to earnings / cash in year one Ear cost of capital within three years Dividends and share repurchase + 347" consecutive quarterly dividend paid in March 2009 + Authorized share repurchase program to purchase up to 4 million shares or $180 million SCN eta)Incentive Compensation ‘Short-Term Intermediate (asm (cast Annual Pertormance Award | nermediateIncaniive Pian (APA) Pan 6) ‘Sharer operational ‘Miao goals rom Langeem shares snes raites ‘Susie "va creation 700 Sacior Manages and above agers & above] coupled wih cerian ownership Foquromonis a Capea Fa aD‘ Gusess Ua E51 TSE BU wong capil a ‘gy, Customer service or New business les 50 7500 Associees obaly [200 General Panieipanta “Time Horizon 50% Eemings growth S0%ROIe NO Pune ecu ue mayOur Strategy Model Where You Turn + Enhance existing products + Industrial markets and services + Geographies + Leverage technology to create value + Channels, + Capture lifetime of opportunity + Structure portfolio + Improve efficiency for value creation + Lower cost structure performing sectors + Increase agility + Deliver greater profitability and build on brand promi ‘Shaping Our New EnterprisedE A GooWhere You Turn AppendixgO A Segment — Financial Performance Net Sales (in Milions) (2005 2007 2000 1.000 Mie Prost Tetospace ADelense Stet Gioup EBIT Margin ote Steel Group rt sabe hide aver sagmart sale of $359!nalon 2008, $1.47 weno 2007 art alone 2006, GIT margin nhs that of pan an rec, raring alone“ wvegraion ans spe thargs ad rae ard uralacatd cara expe, 33gO ITA Reconciliation to GAAP (continued next page) (Unaudtos} CONDENSED CONSOLIDATED STATEMENT OF INCOME [AS REPORTED ADJUSTED (1) (Dollars in thousands, except share data) FullYoar 2008 FulVoor2007_ Full Year 2008 Full Year 2007 ‘Net snes F Saeoses0 —§ spss020 “$ —sease50 —§ 523500 Cost of products salt aat7.g6t 4.150911 4ar7.961 450911 Manufacturing ralonallzionreorganizaton expenses - ‘ns of products sold 4230 31.275 7 ‘Gross Profit Faas § Tassase “$_apase00 $085,108 Seling, adinitratve & general expenses (SG&A) 723,463, ‘992,007 "729,463 5921097 Manufacniingrationalizatonieorgarizaton fempenses - SGA 1524 3.248 : : Gain} loss on dvestiuzes ® 528 : - Impairment and restructuring 64,68 40378 : - ‘Operating Income (Loss) $as2,107§ si7.eis "§__s2az35 $0072 otha (expense) (16.367) (12.88) (16.857) (12988) Special tems other income 23319 13239 - - "Eamings Before interest and Taxes (EBM) (2) Fdeasso §_sivees “§__s0sseo § __seo8t Interest expense, net (98,963) (35.539) (98,069) (95.699) Income (Loss) From Continuing Operations: Before Income Taxes 425,508 282.257 456,006 344.405, Provision for income taxa 157,925 62.088 152982 14520 Income (Loss) From Continuing Operations: S__ 267.670 § 01989 “S__si3aga__§ 229917 Treome from clsoortinued operations nal of incom taxes, spacial tors (3) 7 605 : : Net income (Loss) 3267.70 S_eeo.084 “Sia VSTbed Reconciliation to GAAP (Uraustesy [CONDENSED CONSOLIDATED STATEMENT OF INCOME AS REPORTED. ADSUSTED (1) (Dots in thousands, excopt share data) Full Year 2008 Ful Your 2007 Fuller 2006 Full Yeo 2007 ‘Enminge Per Share - Cornung Operasons . 200 $a OS sz sew Eamings Per Share - Discontinued Operations : oot 7 Etmings Por Share ¥ 30S ass 38 Diuted Earnings Pee Share -Cartouns Operations 5 2m $2 8 32 5 owe Dilute Eamings Per Share -Disorinses Operators : oot 7 Diluted Eamings Per Share ¥ 20 Fae ‘verage Shares Outsansing aessoi0g 9.635005 aen0,104 94,595,085 ‘Average Shares Quand assuming sion pe272763 05 612255 96272753 95.512.255 (1) "Agusie sttererts exe he impact of impatmont ar resiucusing, marufacusingratonalzationtecrgariation ars special arges ar rds er patos oan, (2) EBIT scetned as operating income pis oF cane (exgense), EBIT Margin is EBIT asi percetiage of net sales, EST and E3IT margin ora sepnent bass ‘elude cra specal toms 2 foth above. E8IT and E2T Margin ae importer! tearcal measues usec inthe managemerto! fe business, wcucirg decisions ‘anon he locaton of resources ana assessment of pesoemance,Wlaragement beleves thal repoing EBT arc EBIT Margin bes elect ihe peromance o ‘he companys busress segmeris are SIT eisclosues are responsive vests, (9) Discorsinued Opeiatons eects the Dec. 8, 2006 ale of Timken Latiobe Stel, Stel Group Net sales and Achat ESIT have beer changed techie “Tinker Latrobe Stel oral eis, Income From Discortirue’ Opeation Net of come Taxes, Special lems incu the ga on soe (4 vergoupekminaona eprasert intergroup grotto loss between the See Gaoup andthe Bearings and Power Tranamieion Coup,bed Reconciliation to GAAP Reconciliation of Total Debt to Net Debt and the Ratio of Net Debt to Capital: ‘(Dollars in thousands) (Unaudited) Deo.31,2008 Doc. 31, 2007 ‘Short-term debt $ 108.590 $ 142,568 Long-term debt 515,250 580,587 Total Dobt 623,840 723,155 Less: Casi and cash equivalents (416,306) (30,144) Not Debt $ 507,534 _$ 693.017 ‘Shareholders’ equity $ 1,640,297 $ 1,960,669, Ratio of Total Debt to Capital 27.6% 26.9% Ratio of Net Debt to Capital (Leverage) 5%, % This reconciation is provided as additional relevant information about Timken's financial position. Capital is defined as total debi plus shareholder's equity. ‘Management bolioves Not Dobt is more indicative of Timkor's financial position, {due to the amount of cash and cash equivalents.bed Reconciliation to GAAP Faconeilatn of GAAP heer om contin operations and EPS- ed ‘Thsrecaraiin fps atoll ernst She caren porancs. Nerecaantbokees este weet tam cong operons reds srs share maser to conpery peters adalah w vss. Maran ko bales nts cers cutate GAAP Rare om CalTUeG sors waded Fete onc sorte Hi 3 spacklkarlal aiman fd asnucuirg england exer eancos, Carnd uroy ard Stony OF Aa (COSA cls and gets onto slo orate: aa, “Tae Month Zar Dales essa ha ca) rae) Bai Ea econ run crue operons ssrsr0 sam wero see ‘Satara sz a eoactsn anasororsrzaten exonsns-SO8A 28 nse 268 a0 {Ges} on roar o soot palmer and cio ones usr soa oae ‘Space ta afer iors fe) aie) om (528) oe Prove hate ae) sou nos S180) (055) ‘suse cme tom contr pees aye ss eer ee {EPS eure nl not sum de eu xeross, (2) Pein orn tic ra ncaa rsh neces tol tesa ome nur ast naam econeatin of Oulook tration Eipesod aang por dhe aharo rho 2009 fu you exthdb ops lama. Exmpb of auch spall one cd ingen nd wakucuing, ranwtcahgrlortzatn? ‘eorgelesion gone, ives onto all ra ag eaves paymrts athe COSA. Ne rat ada ato tolety to paral mentor aes ot reco ary COSA pps hy i el ay ba awd th abed Reconciliation to GAAP a Boy hn Sop an ane £9 Sit S89 By Gay Bon sy Gy aap hin Bin bar Oss “aM eH aT “1/9 “Em “ese —V12 “101 07e “ey “04 —04? ia? “Ew “ta? ea “BR ESS eee eee eee ete 5% G7 BS) 36 Gebed Reconciliation to GAAP NeoneDaisreRecniacbed Reconciliation to GAAP Non GAAP Disclosure Reconciliations USS Mion 1991 1992 1993 1994 1905 1996 1997 1998 1999 2000 GAAP Net Cash Provided by Operating Activities “140.116. 154147 224 186. G12. 292277157 GAAP Capttal expenditures (140) (136) (88) (114) (128) (151) (233) (298) (165) (159) GAAP Gash dividends paid to shareholders, (23) (22) (25) (26) (28) (90) _(38)_(45)_—(45)_(44) Free Cash Flow” @3)_@) 39 6 67 5 40 9 68 (06) 2001 2002 2003 2004 2005 2006 2007 2008 Not Cash Provided by Oporating Activitios 178 206 204 121 319 337 937 569 Capital expenditures (81) (85) (118) (155) (221) (296) (B14) (272) Cash dividends paid to shareholders (40) (32) (42)_(47)_(65)_(68)_(63)_(67) Free Cash Flow” Tass @) 2 230 (1) Froo cash flow dofinod as not cash provided by operating activitios (incld. ponsion contributions) minus capital expenditures and dividends.