Timken Responds to 13D Filing from CalSTRS, Relational Investors

The Timken Company(NYSE: TKR) commented on the Schedule 13D filed today byCalifornia State Teachers' Retirement System (CalSTRS) and RelationalInvestors LLC with the U.S. Securities and Exchange Commission.  In thefiling, CalSTRS and Relational disclosed that their group owns 6.15 percent ofTimken shares and urged the company to spin off its Steel Business into aseparate company."Timken is always open to constructive input from shareholders and has hadmeetings with Relational to listen to their views," said James W. Griffith,president and CEO of The Timken Company.  "The Board and our management teamregularly evaluate the optimal allocation of capital to generate shareholdervalue, including capital expenditures, pension funding, acquisitions,divestitures and returning capital to shareholders in the form of dividendsand share repurchases.  As part of this process, over the years we havecarefully evaluated separating the steel and bearing businesses.  Thisincludes a thorough review with our Board this summer of Relational'sproposal, with input from outside financial advisors."As a market leader in high-quality engineered steel products, our SteelBusiness leverages the same expertise and know-how that we apply across ourbusinesses.  We have significant technology, cost and revenue synergiesbetween our bearing and steel businesses as well as diversification benefitsin continuing to operate under our current structure," Griffith said. "Thesesynergies and benefits, coupled with a potential reduction in financialflexibility, among other factors, led the Board to conclude that theseparation of the businesses at this time would not be in the best interestsof Timken shareholders."