CONsOlIdATEd sTATEMENTs OF CAsH FlOws year Ended December 31, 2011 2010 2009 (Dollars in millions)  cash PROVIDED (usED) Operating activities Net income (loss) attributable to The Timken Company $ 454.3 $ 274.8 $ (134.0) Net (income) loss from discontinued operations –  (7.4)  72.6  Net income (loss) attributable to noncontrolling interest  2.3   2.1   (4.6) Adjustments to reconcile income from continuing operations to net cash provided by operating activities:  Depreciation and amortization   192.5   189.7   201.5  Impairment charges  3.3   4.7   113.7  Loss on sale of assets  0.6   6.5   6.8  Deferred income tax provision  99.8   58.8   22.8  Stock-based compensation expense  16.9   16.9   14.9  Pension and other postretirement expense  74.9   93.1   96.7  Pension and other postretirement benefit contributions and payments  (456.0)  (337.0)  (113.5) Changes in operating assets and liabilities:  Accounts receivable   (111.6)  (104.8)  174.5  Inventories   (125.6)  (150.0)  356.1  Accounts payable, trade  14.9   105.4   (84.4) Other accrued expenses  29.1   68.3   (71.7) Income taxes  33.9   97.2   (48.6) Other – net  (17.6)  (13.0)  (2.7) Net Cash Provided by Operating Activities – Continuing Operations  211.7   305.3   600.1  Net Cash Provided (Used) by Operating Activities – Discontinued Operations –  7.4   (12.4) Net cash Provided by Operating activities   211.7   312.7   587.7  Investing activities  Capital expenditures  (205.3)  (115.8)  (114.1) Acquisitions, net of cash acquired of $0.8 million in 2010  (292.1)  (22.6)  (0.4) Proceeds from disposals of property, plant and equipment   5.7   1.9   2.6  Divestitures, net of cash divested of $1.2 million in 2009  4.8  –  303.6  Investments in short-term marketable securities, net  (22.7)  (15.0) – Other  1.6   (1.4)  4.9  Net Cash (Used) Provided by Investing Activities – Continuing Operations  (508.0)  (152.9)  196.6  Net Cash Used by Investing Activities – Discontinued Operations  – –  (2.4) Net cash (used) Provided by Investing activities   (508.0)  (152.9)  194.2  Financing activities  Cash dividends paid to shareholders   (76.0)  (51.3)  (43.2) Purchase of treasury shares  (43.8)  (29.2) – Net proceeds from common share activity  23.8   50.4   0.9  Proceeds from issuance of long-term debt   9.5   18.2   255.0  Deferred financing costs  (3.0) –  (10.8) Payments on long-term debt   (8.9)  (13.7)  (305.7) Short-term debt activity – net   1.0   (3.8)  (74.2) Increase in restricted cash  (3.6)  –  – Other  (5.6)  (3.5) –  Net cash used by Financing activities   (106.6)  (32.9)  (178.0) Effect of exchange rate changes on cash   (9.4)  (5.3)  18.2  (Decrease) Increase In cash and cash Equivalents   (412.3)  121.6   622.1  Cash and cash equivalents at beginning of year   877.1   755.5   133.4  cash and cash Equivalents at End of year  $ 464.8 $ 877.1 $ 755.5 See accompanying Notes to the Consolidated Financial Statements. THE TIMKEN COMPANY 46