ITEM 6.sElECTEd FINANCIAl dATA 16 THE TIMKEN COMPANY 2011 2010 2009 2008 2007 (Dollars in millions, except per share data) statements of Income Net sales $ 5,170.2 $ 4,055.5 $ 3,141.6 $ 5,040.8 $ 4,532.1 Gross profit 1,369.7 1,021.7 582.7 1,151.9 955.0 Selling, administrative and general expenses 626.2 563.8 472.7 657.1 631.2 Impairment and restructuring charges 14.4 21.7 164.1 32.8 28.4 Operating income (loss) 729.1 436.2 (54.1) 462.0 294.9 Other income (expense), net (1.1) 3.8 (0.1) 16.2 5.1 Interest expense, net 31.2 34.5 40.0 38.6 42.3 Income (loss) from continuing operations 456.6 269.5 (66.0) 282.6 210.7 Income (loss) from discontinued operations,  net of income taxes – 7.4 (72.6) (11.3) 12.9 Net income (loss) attributable to The Timken Company $ 454.3 $ 274.8 $ (134.0) $ 267.7 $ 220.1 balance sheets Inventories, net $ 964.4 $ 828.5 $ 671.2 $ 1,000.5 $ 936.0 Property, plant and equipment – net 1,308.9 1,267.7 1,335.2 1,517.0 1,452.8 Total assets 4,352.1 4,180.4 4,006.9 4,536.0 4,379.2 Total debt: Short-term debt 22.0 22.4 26.3 91.5 108.4 Current portion of long-term debt 14.3 9.6 17.1 17.1 33.9 Long-term debt 478.8 481.7 469.3 515.3 580.6 Total debt 515.1 513.7 512.7 623.9 722.9 Net debt: Total debt 515.1 513.7 512.7 623.9 722.9 Less: cash and cash equivalents and restricted cash (468.4) (877.1) (755.5) (133.4) (42.9) Net debt:  (1) 46.7 (363.4) (242.8) 490.5 680.0 Total liabilities 2,309.6 2,238.6 2,411.3 2,873.0 2,399.2 Shareholders’ equity $ 2,042.5 $ 1,941.8 $ 1,595.6 $ 1,663.0 $ 1,980.0 Capital: Net debt $ 46.7 $ (363.4) $ (242.8) $ 490.5 $ 680.0 Shareholders’ equity 2,042.5 1,941.8 1,595.6 1,663.0 1,980.0 Net debt + shareholders’ equity (capital) $ 2,089.2 $ 1,578.4 $ 1,352.8 $ 2,153.5 $ 2,660.0 Other comparative Data Income (loss) from continuing operations/Net sales 8.8% 6.6% (2.1)% 5.6% 4.6% Net income (loss) attributable to  The Timken Company/Net sales 8.8% 6.8% (4.3)% 5.3% 4.9% Return on equity  (2) 22.4% 13.9% (4.1)% 17.0% 10.6% Net sales per employee  (3) $ 253.5 $ 222.2 $ 168.8 $ 244.3 $ 216.0 Capital expenditures $ 205.3 $ 115.8 $ 114.1 $ 258.1 $ 289.8 Depreciation and amortization $ 192.5 $ 189.7 $ 201.5 $ 200.8 $ 187.9 Capital expenditures/Net sales 4.0% 2.9% 3.6% 5.1% 6.4% Dividends per share $ 0.78 $ 0.53 $ 0.45 $ 0.70 $ 0.66 Basic earnings (loss) per share – continuing operations  (4) $ 4.65 $ 2.76 $ (0.64) $ 2.90 $ 2.17 Diluted earnings (loss) per share – continuing operations  (4) $ 4.59 $ 2.73 $ (0.64) $ 2.89 $ 2.16 Basic earnings (loss) per share  (5) $ 4.65 $ 2.83 $ (1.39) $ 2.78 $ 2.31 Diluted earnings (loss) per share  (5) $ 4.59 $ 2.81 $ (1.39) $ 2.77 $ 2.29 Net debt to capital  (1) 2.2% (23.0)% (17.9)% 22.8% 25.6% Number of employees at year-end  (6) 20,954 19,839 16,667 20,550 20,720 Number of shareholders  (7) 44,238 39,118 27,127 47,742 49,012 suMMArY OF OPErATIONs ANd OTHEr COMPArATIvE dATA (1)  The Company presents net debt because it believes net debt is more representative of the Company’s financial position than total debt due to  the amount of cash and cash equivalents. (2)  Return on equity is defined as income from continuing operations divided by ending shareholders’ equity. (3)  Based on average number of employees employed during the year. (4)  Based on average number of shares outstanding during the year. (5)  Based on average number of shares outstanding during the year and includes discontinued operations for all periods presented. (6)  Adjusted to exclude NRB operations and Latrobe Steel for all periods. (7)  Includes an estimated count of shareholders having common stock held for their accounts by banks, brokers and trustees for benefit plans.