The Timken Company Sends Letter to Shareholders

               The Timken Company Sends Letter to Shareholders

Recommends Shareholders Reject Proposal To Spin-Off the Steel Business

Company Discusses Proposal's Flaws with CalSTRS and Relational Investors

PR Newswire

CANTON, Ohio, April 2, 2013

CANTON, Ohio, April 2, 2013 /PRNewswire/ --The Timken Company(NYSE: TKR; today announced that it sent a letter urging shareholders to
support the company's proven strategy of creating shareholder value and to
vote AGAINST Item No. 6 of its proxy statement, the shareholder proposal to
spin-off the Steel business. Timken also announced that members of its board
and management team met with The California State Teachers' Retirement System
(CalSTRS) and Relational Investors today to discuss the flaws in the analysis
behind the proposal and articulate the reasons why Timken believes its
comprehensive strategic plan is the best path to create long-term value for

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"As we have in the past, we outlined for CalSTRS and Relational Investors the
benefits of our integrated platform and comprehensive strategic plan to drive
value for shareholders as well as the flaws in the analysis of a spin-off of
our Steel business," said James W. Griffith, Timken president and chief
executive officer. "It is clear to us that our proven business model and
strategy to create shareholder value represent the best path forward for all
Timken shareholders."

Included below is the full text of the letter to Timken shareholders, which
can also be found at

April 2, 2013

Dear Fellow Timken Shareholder:




Your Board and management team are successfully executing a carefully
considered plan to deliver long-term value to Timken shareholders. Over the
last several years, we have transformed Timken into a global industrial
technology leader with products designed to improve the efficiency and
reliability of the machinery that keeps industry in motion. Our product
portfolio features mechanical components and engineered steel products used in
some of the world's most demanding applications.

The success of this effort leverages strengths across The Timken Company's
businesses, including shared research and technical expertise and supply chain
and operating efficiencies between our Steel business and our Bearing and
Power Transmission (B&PT) business, to deliver solutions across common end
markets and customers. A separation of Timken Steel from the rest of the
enterprise would compromise the Company's competitive advantage and our
ability to leverage these benefits to deliver higher financial returns.

The shareholder proposal by The California State Teachers' Retirement System
(CalSTRS) and Relational Investors that you are being asked to vote on would
derail our strategy and deprive shareholders of the opportunity for long-term
value — all in a misguided attempt to create illusory short-term gains through
financial engineering. Your Board and management team have carefully reviewed
a separation of the businesses, with input from outside advisors, in the past
and have met with Relational Investors multiple times, most recently on April
2, 2013, in a meeting that also included CalSTRS. Based on its careful
review, the Board has determined that maintaining The Timken Company's current
integrated strategy is in the best interests of shareholders at this time.

The strength of our operating performance as an integrated company has
produced superior value for you — with total shareholder returns of 111% over
the last three years^[i]. This puts Timken at the top of our peer group and
well above the returns for the overall market.


Timken is committed to continuing to deliver value by executing our strategic
plan, which includes:

  oStrengthen Margins. The Timken transformation has resulted in a leaner,
    more variable cost structure and the increased ability to tightly control
    the supply chain in response to market variability. These actions,
    together with the expansion of the Timken portfolio to include
    complementary products and services across the Steel and B&PT businesses,
    have resulted in stronger margins.
  oImprove Cash Flow and Pension Funding. The Company projects that its
    defined benefit pension plans will be substantially fully funded in 2013.
    In addition, we expect improved working capital management and lower
    projected capital spending beyond 2013 to result in increased cash flow.
  oLeverage Growth Opportunities. Timken expects to generate annual sales
    growth of 6% to 11% through 2015, driven by new products and geographic
    expansion as well as targeted acquisitions.
  oReturn Capital. Timken has paid a dividend to shareholders in every
    quarter since the Company became public in 1922. In addition, your Board
    has authorized the repurchase of up to 10 million shares. Returning
    capital to shareholders through ongoing dividends and the continued
    execution of the share repurchase program is an integral part of the
    Company's plan for delivering value.

The Timken Steel and B&PT businesses are tightly integrated and synergies
related to the supply chain, shared research and technical expertise yield
important benefits for customers and shareholders. Over the past five years,
on average 58% of B&PT's steel requirements were sourced from Timken-produced
steel. These supply chain efficiencies make possible lower costs, faster lead
times and higher customer satisfaction levels as our B&PT business goes to
market. Additionally, by combining shared R&D with 100 years of metallurgy
and application knowledge across our businesses, we are able to provide
customers the highest quality bearings and steel products for some of the
toughest mechanical power transmission applications, an advantage that none of
our competitors have. These capabilities translate into benefits for Timken
shareholders in the form of higher margins driven by value-based pricing and
enhanced market competitiveness and responsiveness due to our greater insights
into customers and our targeted end markets.

The shareholder proposal to spin-off the Steel business is based on a flawed
analysis that suggests the combined value of separate Steel and B&PT companies
would be substantially higher than the value of Timken today — simply as a
result of separating the two businesses. Relational Investors asks you to
believe that the market would give a separate B&PT business a price/earnings
ratio 33% higher than the median price/earnings ratio of Timken B&PT's
peers^[ii]. Does that make sense to you?

In addition, Relational assumes Timken would lose only $25 million in annual
pre-tax earnings from a separation of the businesses — while our analysis
shows we would expect to lose $60-80 million in annual pre-tax earnings from
duplicative costs and loss of synergies. Moreover, Relational ignores the
fact that a standalone Steel business would be one of the smallest publicly
traded steel companies. Given its small size and scale, the rating agencies
would likely assign non-investment grade credit ratings to the company. This
would increase its cost of capital and reduce its financial flexibility to
take on important, high-return projects like the Faircrest expansion, which we
are currently implementing to improve profitability across industry cycles
through reduced costs while expanding the market capabilities of the Steel

In summary, once the flaws in Relational's analysis are corrected, it is clear
that the Company's proven business model and strategy to create shareholder
value represent the best path forward for all of the Company's shareholders.

Your Board and management team have carefully reviewed the shareholder
proposal and have concluded it is not in the best interests of shareholders at
this time. It amounts to a self-interested attempt to generate illusory
short-term profits at the expense of long-term value creation. Support the
Timken strategy to achieve long-term value through the continued successful
execution of our strategic plan. Please cast your vote today AGAINST this
shareholder proposal. For more information, please visit Thank you for your continued support of The Timken

On behalf of the Board of Directors of The Timken Company,

Joseph W. Ralston
Lead Independent Director

Your Vote Is Important, No Matter How Many Shares You Own.
If you have questions about how to vote your shares,
or need additional assistance, please contact the firm assisting us in the
solicitation of proxy votes:

Stockholders Call Toll-Free: 888-666-2594
Banks and Brokers Call: 800-223-2064

We urge you to vote AGAINST Item No. 6. 

About The Timken Company
The Timken Company (NYSE: TKR;, a global industrial technology
leader, applies its deep knowledge of materials, friction management and power
transmission to improve the reliability and efficiency of machinery and
equipment all around the world. The company engineers, manufactures and
markets mechanical components and high-performance steel. Timken^® bearings,
engineered steel bars and tubes—as well as transmissions, gearboxes, chain,
related products and services—support diversified markets worldwide. With
sales of $5.0billion in 2012 and approximately 20,000 people operating from
30 countries, Timken makes the world more productive and keeps industry in

Certain statements in this news release (including statements regarding the
company's forecasts, beliefs, estimates and expectations) that are not
historical in nature are "forward-looking" statements within the meaning of
the Private Securities Litigation Reform Act of 1995. In particular, the
statements related to The Timken Company's plans, outlook, future financial
performance, targets, projected sales, cash flows and liquidity are
forward-looking. The company cautions that actual results may differ
materially from those projected or implied in forward-looking statements due
to a variety of important factors, including: the company's ability to respond
to the changes in its end markets that could affect demand for the company's
products; unanticipated changes in business relationships with customers or
their purchases from the company; changes in the financial health of the
company's customers, which may have an impact on the company's revenues,
earnings and impairment charges; fluctuations in raw-material and energy costs
and their impact on the operation of the company's surcharge mechanisms; the
impact of the company's last-in, first-out accounting; weakness in global or
regional economic conditions and financial markets; changes in the expected
costs associated with product warranty claims; the ability to integrate
acquired companies to achieve satisfactory operating results; the impact on
operations of general economic conditions; higher or lower raw-material and
energy costs; fluctuations in customer demand; the company's ability to
achieve the benefits of its ongoing programs, initiatives & capital
investments; the timing and amount of common share repurchases; and retention
of CDSOA distributions. Additional factors are discussed in the company's
filings with the Securities and Exchange Commission, including the company's
annual report on Form 10-K for the year ended Dec. 31, 2012, quarterly reports
on Form 10-Q and current reports on Form 8-K. The company undertakes no
obligation to update or revise any forward-looking statement.

Important Additional Information
The Timken Company, its directors, and certain of its officers are
participants in the solicitation of proxies from Timken shareholders in
connection with the Company's 2013 Annual Meeting of Shareholders. Important
information concerning the identity and interests of these persons is
available in the definitive proxy statement that Timken filed with the SEC on
March 21, 2013.

The definitive proxy statement, any other relevant documents and other
materials filed with the SEC concerning Timken are available free of charge at and Shareholders should carefully read
the definitive proxy statement before making any voting decision.

Media Contact:               Investor Contact:
Pat Carlson                  Steve Tschiegg
Global Media Manager         Director – Capital Markets & Investor Relations
1835 Dueber Avenue, S.W.     1835 Dueber Avenue, S.W.
Canton, OH 44706-0927 U.S.A. Canton, OH 44706-0927 U.S.A.
Telephone: (330) 471-3514    Telephone: (330) 471-7446

^[i] Source: Factset as of December 31, 2012.
^[ii] Comparison based on the median price / earnings ratio of B&PT peers
which include Kennametal, Altra Holdings, SKF, NSK and JTEKT as of February
26, 2013.

SOURCE The Timken Company

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