Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

     Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Note 1 — Basis of Presentation

The accompanying consolidated condensed financial statementsCondensed Consolidated Financial Statements (unaudited) for The Timken Company (the company) have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by the accounting principlesU.S. generally accepted in the United Statesaccounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) and disclosures considered necessary for a fair presentation have been included. For further information, refer to the Consolidated Financial Statements and footnotes included in the company’s Annual Report on Form 10-K for the year ended December 31, 2005. Certain amounts in the 2005 Condensed Consolidated Financial Statements have been reclassified to conform to the 2006 presentation.

On January 1, 2006, the company adopted the provisions of Statement of Financial Accounting Standards (SFAS) No. 123(R), “Share-Based Payment,” and elected to use the modified prospective transition method. The modified prospective method requires that compensation cost be recognized in the financial statements for all stock option awards granted after the date of adoption and for all unvested stock option awards granted prior to the date of adoption. In accordance with SFAS No. 123(R), prior period amounts were not restated. Prior to the adoption of SFAS No. 123(R), the company utilized the intrinsic-value based method of accounting under APB Opinion No. 25, “Accounting for Stock Issued to Employees”Employees,” and related interpretations, and adopted the disclosure requirements of SFAS No. 123, “Accounting for Stock-Based Compensation.”

Under the company’s long-term incentive plan, shares of common stock have been made available to grant at the discretion of the Compensation Committee of the Board of Directors to officers and key associates in the form of stock option awards. Stock option awards have a ten yearten-year term and vest in 25% increments annually beginning on the date of grant. In addition to stock option awards, the company has granted restricted shares under the long-term incentive plan. Restricted shares vest in 25% increments annually beginning on the date of grant and have historically been expensed over the vesting period.

Prior to January 1, 2006, no stock-based compensation expense was recognized for stock option awards under the intrinsic-value based method. As a result of theThe adoption of SFAS No. 123(R), reduced operating income for the company recognized additional compensation expensesecond quarter of $1.62006 by $1.5 million, before taxes, which reduced net income for the second quarter of 2006 by $0.9 million ($.01 per basic and diluted earnings per share by $0.01share), reduced operating income for the threefirst six months ended March 31, 2006. of 2006 by $3.1 million and reduced net income for the first six months of fiscal 2006 by $2.0 million ($.02 per basic and diluted share).

The effect of net income and earnings per share as if the company had applied the fair value recognition provisions of SFAS No. 123 to all outstanding and nonvested stock option awards is as follows for the three months and six months ended March 31,June 30, 2005:

Nonvested shares consist primarily of restricted shares for key employees and directors, and also include deferred shares.

The company recognized compensation expense of $2.2$5.1 million and $1.3$3.0 million for the three monthssix-month periods ended March 31,June 30, 2006 and 2005, respectively, related to nonvested shares.

In January 2006, the company repaid, in full, the $23,000$23.0 million balance outstanding of the revenue bonds held by PEL Technologies LLC (PEL), an equity investment of the company. In June 2006, the company continued to liquidate assets of PEL with land and buildings exchanged for the fixed-rate mortgage. Refer to Note 10 — Equity Investments for additional discussion of PEL’s debt, which is included above.discussion.

Borrowings under the Accounts Receivable Securitization financing agreement (Asset Securitization), which provides for borrowings up to $200 million subject to certain borrowing base limitations, are secured by certain trade receivables. Under the terms of the Asset Securitization, the company sells, on an ongoing basis, certain domestic trade receivables to Timken Receivables Corporation, a wholly owned consolidated subsidiary, thatwhich in turn uses the trade receivables to secure the borrowings, which are funded through a vehicle that issues commercial paper in the short-term market. As of March 31,June 30, 2006, there were no outstanding borrowings under this facility. AAn outstanding balance outstanding related to the Asset Securitization would be reflected on the company’s Condensed Consolidated Condensed Balance Sheet in short-term debt. The yield on the commercial paper, which is the commercial paper rate plus program fees, is considered a financing cost and is included in interest expense on the Consolidated Statement of Income. As of March 31,June 30, 2006, there were letters of credit totaling $15.3$19.8 million, which reduced the availability under the Asset Securitization to $184.7$180.2 million.

The lines of credit of the company’s European and Asian subsidiaries provide for borrowings up to $159.8$165.6 million. At March 31,June 30, 2006, the company had borrowings outstanding of $92.6$36.1 million, which reduced the availability under these facilities to $67.2$129.5 million.

Impairment and restructuring charges by segment are comprised of the following:

For the three months ended March 31,June 30, 2006:

The primary measurement used by management to measure the financial performance of each Group is adjusted EBIT (earnings before interest and taxes, excluding the effect of amounts related to certain items that management considers not representative of ongoing operations such as impairment and restructuring, manufacturing rationalization expenses,/ reorganization costs, allocated receipts received or payments made under the U.S. Continued Dumping and Subsidy Offset Act (CDSOA) and gain (loss) on the sale of non-strategic assets).

The changes in the carrying amount of goodwill for the threesix months ended March 31,June 30, 2006 are as follows:

The balances related to investments accounted for under the equity method are reported in other non-current assets on the Condensed Consolidated Balance Sheet, which were approximately $20,100$20.8 million and $19,900$19.9 million at March 31,June 30, 2006 and December 31, 2005, respectively.

Equity investments are reviewed for impairment when circumstances (such as lower-than-expected financial performance or change in strategic direction) indicate that the carrying value of the investment may not be recoverable. If impairment does exist, the equity investment is written down to its fair value with a corresponding charge to the Consolidated Statement of Income. No impairments were recorded during the second quarter and first quartersix months of 2006 relating to the company’s equity investments. In March 2006, the company sold a portion of CoLinx, LLC due to the addition of another company to the joint venture. CoLinx, a joint venture founded by Timken, SKF, INA and Rockwell Automation, provides shared e-commerce and logistics services.

During 2000, the company’s Steel Group invested in a joint venture, PEL, to commercialize a proprietary technology that converts iron units into engineered iron oxides for use in pigments, coatings and abrasives. In the fourth quarter of 2003, the company concluded its investment in PEL was impaired due to the following indicators of impairment: history of negative cash flow and losses; 2004 operating plan with continued losses and negative cash flow; and the continued required support from the company or another party.

The company concluded that PEL was a variable interest entity and that the company iswas the primary beneficiary. In accordance with FASB Interpretation No. 46 (FIN 46), “Consolidation of Variable Interest Entities, an interpretation of Accounting Research Bulletin No. 51,” the company consolidated PEL effective March 31, 2004. The adoption of FIN 46 resulted in a charge, representing the cumulative effect of change in accounting principle, of $948,$1.0 million, which iswas reported in other expense — net on the Consolidated Statement of Income. Also,In addition, the adoption of FIN 46 increased the Condensed Consolidated Balance Sheet as follows: current assets by $1,659;$1.7 million; property, plant and equipment by $11,333;$11.3 million; short-term debt by $11,561;$11.6 million; accounts payable and other liabilities by $659;$0.7 million; and other non-current liabilities by $1,720.$1.7 million. All of PEL’s assets are collateral for its obligations. Except for PEL’s indebtedness for which the company is a guarantor, PEL’s creditors havehad no recourse to the general credit of the company.

In the first quarter of 2006, plans were finalized to liquidate the assets of PEL and the company recorded a related gain of approximately $3,550. Fixed assets were sold to third parties through negotiated sales or through auction resulting in a gain on the sale of assets of approximately $1,950. Proceeds from the sales of those assets were used to pay down certain debt facilities with the remaining unpaid balances discharged by the creditors resulting in a gain on the forgiveness of debt of approximately $1,600.$3.6 million. In January 2006, the company repaid, in full, the $23,000$23.0 million balance outstanding of the revenue bonds held by PEL. The remaining assets, approximately $9,500 ofIn June 2006, the company continued to liquidate PEL with land and buildings will be exchanged in satisfactionand the buyer’s assumption of the fixed-rate mortgage, which resulted in a gain of the assets in the third quarter of 2006.$2.8 million.

The following table sets forth the net periodic benefit cost for the company’s retirement and postretirement benefit plans. The amounts for the three and six months ended March 31,June 30, 2006 are based on actuarial calculations prepared during 2005.calculations. Consistent with prior years, these calculations will be updated later in the year. These updated calculations may result in different net periodic benefit cost for 2006. The net periodic benefit cost recorded for the threesix months ended March 31,June 30, 2006 is the company’s best estimate of each period’s proportionate share of the amounts to be recorded for the year ended December 31, 2006.