MANAgEMENT’s dIsCussION ANd ANAlYsIs OF FINANCIAl CONdITION ANd rEsulTs OF OPErATIONs  THE TIMKEN COMPANY 41 Quarterly Dividend Continued Dumping and Subsidy Offset Act The CDSOA provides for distribution of monies collected by U.S. Customs from anti-dumping cases to qualifying domestic producers  where the domestic producers have continued to invest in their technology, equipment and people. The Company received CDSOA  receipts of $3.5 million, $5.2 million and $6.2 million in 2011, 2010 and 2009, respectively. In 2011, the Company reported expenses in  excess of CDSOA receipts of $1.1 million. The Company reported CDSOA receipts, net of expenses, of $2.0 million and $3.6 million in  2010 and 2009, respectively. In September 2002, the World Trade Organization (WTO) ruled that CDSOA payments are not consistent with international trade rules.  In February 2006, U.S. legislation was enacted that would end CDSOA distributions for dumped imports covered by anti-dumping duty  orders entering the United States after September 30, 2007. Instead, any such anti-dumping duties collected would remain with the U.S.  Treasury. This legislation would be expected to eventually reduce any distributions in years beyond 2007, with distributions eventually  ceasing. Several countries have objected that this U.S. legislation is not consistent with WTO rulings, and have been granted retaliation  rights by the WTO, typically in the form of increased tariffs on some imported goods from the United States. The European Union and  Japan have been retaliating in this fashion against the operation of U.S. law. In 2006, the U.S. Court of International Trade (CIT) ruled, in two separate decisions, that the procedure for determining recipients eligible  to receive CDSOA distributions is unconstitutional. In February 2009, the U.S. Court of Appeals for the Federal Circuit reversed both  decisions of the CIT. In December 2009, a plaintiff petitioned the U.S. Supreme Court to hear a further appeal, but the Supreme Court  declined the petition, allowing the appellate court reversals to stand. There are, however, several remaining constitutional challenges to  the CDSOA law that are now before the CIT. The Company is unable to determine, at this time, what the ultimate outcome of litigation  regarding CDSOA will be. There are a number of factors that can affect whether the Company receives any CDSOA distributions and the amount of such  distributions in any given year. These factors include, among other things, potential additional changes in the law, ongoing and potential  additional legal challenges to the law and the administrative operation of the law. Accordingly, the Company cannot reasonably estimate  the amount of CDSOA distributions it will receive in future years, if any. It is possible that court rulings might prevent the Company from  receiving any CDSOA distributions in 2012 and beyond. Any reduction of CDSOA distributions would reduce the Company’s earnings  and cash flow. On February 10, 2012, the Company’s Board of Directors declared a quarterly cash dividend of $0.23 per share. The dividend will be paid  on March 2, 2012 to shareholders of record as of February 21, 2012. This will be the 359th consecutive dividend paid on the common  stock of the Company.