Total stated capital Other Paid-In capital Earnings Invested in the business accumulated Other comprehensive Income (loss) Treasury stock Non- controlling Interest (Dollars in millions, except per share data) Year Ended December 31, 2009  Balance at January 1, 2009  $ 1,663.0  $ 53.1 $ 838.3 $ 1,580.1  $ (819.7) $ (11.6) $ 22.8 Net loss  (138.6)  (134.0)  (4.6) Foreign currency translation adjustments  39.8   39.8  Pension and postretirement liability adjustment (net of income tax of $64.6 million)  62.0   62.1   (0.1) Change in fair value of derivative financial instruments, net of reclassifications  0.7   0.7  Total comprehensive loss   (36.1) Change in ownership of noncontrolling interest   1.0   1.0  Dividends declared to noncontrolling interest   (1.1)  (1.1) Dividends – $0.45 per share  (43.2)  (43.2) Excess tax benefit from stock compensation   0.1   0.1  Stock-based compensation expense   14.9   14.9  Stock option exercise activity  10.4  0.8  9.6  Restricted shares (issued) surrendered  (11.6)  (10.7) (0.9) Shares surrendered for taxes  (1.8)   (1.8) Balance at December 31, 2009  $ 1,595.6  $ 53.1 $ 843.4  $ 1,402.9  $ (717.1) $ (4.7) $ 18.0  Year Ended December 31, 2010  Net income  276.9  274.8  2.1  Foreign currency translation adjustments  (5.2)  (5.2) Pension and postretirement liability adjustment (net of income tax of $22.1 million)  98.5   98.6   (0.1) Unrealized loss on marketable securities   (0.2)  (0.2) Change in fair value of derivative financial instruments, net of reclassifications  (0.8)  (0.8) Total comprehensive income  369.2  Change in ownership of noncontrolling interest   (3.5)  (1.0)  (2.5) Dividends declared to noncontrolling interest   (0.7)  (0.7) Dividends – $0.53 per share  (51.3)  (51.3) Excess tax benefit from stock compensation   5.8  5.8 Stock-based compensation expense   16.9  16.9 Stock purchased at fair market value (29.2) (29.2) Stock option exercise activity  45.0 14.5 30.5  Restricted shares (issued) surrendered 0.7 2.1 (1.4) Shares surrendered for taxes  (6.7)  (6.7) Balance at December 31, 2010  $ 1,941.8  $ 53.1 $ 881.7 $ 1,626.4  $ (624.7) $ (11.5) $ 16.8 year Ended December 31, 2011 Net income  456.6  454.3 2.3 Foreign currency translation adjustments  (48.5)  (48.5) Pension and postretirement liability adjustment  (net of income tax of $130.1 million)   (218.1) (218.2) 0.1  unrealized gain on marketable securities   0.7   0.6   0.1  change in fair value of derivative financial  instruments, net of reclassifications  1.3   1.3  Total comprehensive income  192.0  change in ownership of noncontrolling interest   (0.5)  (0.5) Dividends declared to noncontrolling interest   (5.1)  (5.1) Dividends – $.78 per share  (76.0)  (76.0) Excess tax benefit from stock compensation   9.5   9.5  stock-based compensation expense   16.9   16.9  stock purchased at fair market value   (43.8)  (43.8) stock option exercise activity   16.6   (17.5)  34.1  Restricted shares (issued) surrendered   (0.3)  (0.9)  0.6  shares surrendered for taxes   (8.6)  (8.6) balance at December 31, 2011  $ 2,042.5  $ 53.1 $ 889.2  $ 2,004.7 $ (889.5) $ (29.2) $ 14.2 The Timken company shareholders FINANCIAls ANd FOOTNOTEs 47$^{ }$ THE TIMKEN COMPANY See accompanying Notes to the Consolidated Financial Statements. CONsOlIdATEd sTATEMENTs OF sHArEHOldErs’ EquITY