Timken Reports Record Second-Quarter Results

Reconciliation of GAAP income from continuing operations and EPS - diluted.
This reconciliation is provided as additional relevant information about the company's performance. Management believes adjusted income from continuing operations and adjusted earnings
per share are more representative of the company's performance and therefore useful to investors. Management also believes that it is appropriate to compare GAAP income from continuing
operations to adjusted income from continuing operations in light of special items related to impairment and restructuring and manufacturing rationalization/reorganization costs, Continued
Dumping and Subsidy Offset Act (CDSOA) receipts, and gain/loss on the sale of non-strategic assets.
Second Quarter Six Months
2008 2007 2008 2007
(Dollars in thousands, except per share data) (Unaudited) $ EPS $ EPS (1) $ EPS (1) $ EPS (1)
Income from continuing operations $ 88,943 $ 0.92 $ 55,601 $ 0.58
$173,408 $1.80 $129,855 $1.36
Pre-tax special items:
Manufacturing rationalization/reorganization expenses -
cost of products sold 868
Manufacturing rationalization/reorganization expenses - SG&A 1,251
(Gain) loss on divestiture -
Impairment and restructuring 1,807
Special items - other (income) (191)
Provision for income taxes (2) (273)
0.01
0.01
-
0.02
-
-
Adjusted income from continuing operations $ 92,405 $ 0.96 $ 69,726 $ 0.73
$171,268 $1.78 $132,201 $1.39
(1) EPS amounts will not sum due to rounding differences.
(2) Provision for income taxes includes the tax effect of pre-tax special items on our effective tax rate, as well as the impact of discrete tax items recorded during the quarter.
Reconciliation of Outlook Information.
Expected earnings per diluted share for the 2008 full year and third quarter exclude special items. Examples of such special items include impairment and restructuring, manufacturing rationalization/
reorganization expenses, gain/loss on the sale of non-strategic assets and payments under the CDSOA. It is not possible at this time to identify the potential amount or significance of
these special items. Management cannot predict whether the company will receive any additional payments under the CDSOA in 2008 and if so, in what amount.
10,720
649
(38)
7,254
(2,029)
(2,431)
0.11
0.01
-
0.08
(0.02)
(0.03)
2,242
2,059
(8)
4,683
(20,545)
9,429
0.02
0.02
-
0.05
(0.21)
0.10
22,563
1,979
316
21,030
(2,372)
(41,170)
0.24
0.02
-
0.22
(0.02)
(0.43)