A Tribute W.R. Timken, Jr. has served The Timken Company for 41 years. His vision for growth, passion for productive change, pursuit of innovation and the high expectations he sets all have lifted the company to new heights. When he became chairman in 1975, sales were $805 million. Today, Timken is a global $3.8 billion company.

Tim's leadership extends far beyond Timken. He remains a strong voice for manufacturing in U.S. policymaking. He has served as chairman of the National Association of Manufacturers and currently serves as chairman of the Manufacturing Institute. His commitment to ethics and integrity resulted in a Presidential appointment in 2003 to the chairmanship of the Securities Investor Protection Corporation.

At the end of 2003, he retired from day-to-day management at the company but continues as non-executive chairman. Great leaders have a profound impact on those around them. Tim Timken leaves a lasting legacy through his enduring commitment to shareholders, customers and associates.

To thrive in today’s competitive environment, creating value for both customers and shareholders, we are becoming more adaptive to the boundless change in the marketplace. Our transformation is tied to three key strategies:

• Customer-driven innovation;
• A focus on performance; and
• An adaptive management capability.

Boundless Innovation

Innovation has been a strength throughout our history. Our combined knowledge of materials science, friction management and precision manufacturing is unequalled. These core technical competencies provide a globally competitive advantage that allows us to continue to expand the products and services we offer to customers. In 2003, we developed nearly 3,000 new prototypes. We are leveraging our technological competencies and global engineering resources to introduce new solutions – extending beyond the bearing itself to the environment around the bearing. With customer driven innovation, each product addresses a pressing issue, be it fuel efficiency, high performance or debris resistance, or the need for such ancillary offerings as engineered surfaces, sensor products or integrated assemblies.

Industrial Group: We are tapping new opportunities to serve industrial customers with a broader range of globally competitive products and services. A recent example is our support for China’s growing infrastructure, where we are providing large-bore bearings for power generation plants, with the potential to supply future plants.

We complement our product offerings with a growing number of industrial services – from bearing and non-bearing component repair to engineering design and technical consulting services. In 2003, these services provided more than $75 million in revenue.

Our innovative offerings are rapidly expanding our automotive distribution business in North America, which is part of our Industrial Group. Sales to this channel have grown more than 30% in each of the past four years, and we see more opportunity globally.

Automotive Group: Our Automotive Group had a strong year on the customer front. New product launches on the Ford F150, Nissan Pathfinder Armada, Mercedes E-Class, Chevy Colorado and other vehicles brought in approximately $125 million in new sales. Based on the technical competencies created by the combination of Timken and Torrington, many new doors were opened. For example, in 2003 Timken was one of an elite group of suppliers invited to General Motors TechWorld, where we showcased chassis and powertrain applications of our bearing- and steel-based technologies for more than 1,000 GM engineering executives and senior management. This customer interaction is sowing the seeds of opportunity based on new products.