TO OUr ShArEhOLDErS: TODAY, ThE TiMKEN COMPANY STANDS STrONG, WiTh ANOThEr YEAr  OF PErFOrMANCE AChiEvEMENTS ThAT UNDErSCOrE ThE MAGNiTUDE  OF OUr TrANSFOrMATiON.  OVER THE LAST DECADE,WE SHARPENED OUR STRATEGIC FOCUS AND  GREW PROFITABLY WITH A MORE ATTRACTIVE PORTFOLIO. OUR EVOLUTION  EXPANDED OUR FIELD OF VISION FROM A RELATIVELY NARROW PRODUCT  VIEW WITH SOMEWHAT LIMITED GEOGRAPHIC BREADTH TO A TRULY GLOBAL  ENTERPRISE, OFFERING A MORE ROBUST PRODUCT PORTFOLIO ORGANIZED  AROUND RAPIDLY GROWING, DIVERSIFIED INDUSTRIAL MARKETS. WE CONTINUE TO APPLY OUR ENGINEERING KNOW-HOW, BUT TODAY CREATE  SUBSTANTIAL AND SUSTAINABLE VALUE IN COUNTLESS NEW WAYS.  FOR OUR CUSTOMERS AND OUR SHAREHOLDERS ALIKE,TIMKEN WORKS  DILIGENTLY TO PROVIDE RELIABLE PERFORMANCE WITH EXCELLENT  PROSPECTS FOR ONGOING GROWTH AND STABILITY, DESPITE THE INEVITABLE SWINGS IN THE GLOBAL ECONOMY. y nearly every measure, 2011 stands out as a banner year for Timken. We delivered record  results, recovering from the downturn faster than any other time in the company’s history. By August, our earnings surpassed all previous years, and we ended the year by setting new  records on many fronts: sales, gross profit, net income and earnings per share, as well as in safety,  productivity, shipments and customer service.  B We experienced unprecedented demand, particularly for our Steel business, which stands  distinctly apart from other steelmakers. Our ability to produce custom-designed steels used in  demanding mechanical applications flows from our metallurgical prowess and unparalleled know- how. This allows us to differentiate components and systems with strength where it matters. More than half of our specialized steel products cannot be competitively replicated elsewhere in North America.  The company’s new revolutionary ADAPT bearings feature a  unique design that provides optimal ease of installation, reliability  and performance for metal-industry manufacturers. Augers, new  to the Timken  product portfolio,  strengthen the  world’s most  respected heavy  equipment and  consumer brands.