NOTE 14 – sEgMENT INFOrMATION Description of types of products and services from which each reportable segment derives its revenues Measurement of segment profit or loss and segment assets FINANCIAls ANd FOOTNOTEs The Company evaluates performance and allocates resources based on return on capital and profitable growth. Effective January 1,  2011, the primary measurement used by management to measure the financial performance of each segment is EBIT (earnings before  interest and taxes). Prior to January 1, 2011, the primary measurement used by management to measure the financial performance  of each segment was “adjusted EBIT” (earnings before interest and taxes, excluding the effects of amounts related to certain items  that management considered not representative of ongoing operations such as impairment and restructuring charges, manufacturing  rationalization and integration costs, one-time gains and losses on disposal of non-strategic assets, allocated receipts or payments made  under the U.S. Continued Dumping and Subsidy Offset Act (CDSOA), gains and losses on the dissolution of a subsidiary, acquisition- related currency exchange gains, and other items similar in nature). The change in 2011 was primarily due to the completion of most  of the Company’s previously-announced restructuring initiatives. Segment results for 2010 and 2009 have been reclassified to conform  to the 2011 presentation of segments. The accounting policies of the reportable segments are the same as those described in the  summary of significant accounting policies. Intersegment sales and transfers are recorded at values based on market prices, which  creates intercompany profit on intersegment sales or transfers that is eliminated in consolidation. The Steel segment includes sales of low and intermediate alloy and carbon grade steel in a wide range of solid and tubular sections with  a variety of finishes. The Company also manufactures custom-made steel products including precision steel components. Less than  10% of the Company’s steel is consumed in its bearing operations. In addition, sales are made to other anti-friction bearing companies  and to aircraft, automotive, forging, tooling, oil and gas drilling industries and steel service centers. The Aerospace and Defense segment includes sales of bearings, helicopter transmission systems, rotor head assemblies, turbine engine  components, gears and other precision flight-critical components for commercial and military aviation applications. The Aerospace and  Defense segment also provides aftermarket services, including repair and overhaul of engines, transmissions and fuel controls as  well as aerospace bearing repair and component reconditioning. The Aerospace and Defense segment also includes sales of precision  bearings and related products for health and positioning control applications. The Process Industries segment includes global sales of bearings, mechanical power transmission components, industrial chains,  augers and related products and services (other than steel) to a diverse customer base including original equipment manufacturers  in the power transmission, energy and heavy industry market sectors. The Process Industries segment also includes aftermarket  distribution operations for products other than steel and automotive applications. The Mobile Industries segment includes global sales of bearings, mechanical power transmission components, drive-chains,  roller-chains, augers and related products and services (other than steel) to a diverse customer base, including original equipment  manufacturers and their suppliers of passenger cars, light trucks, medium to heavy-duty trucks, rail cars, locomotives, agricultural,  construction and mining equipment. The Mobile Industries segment also includes aftermarket distribution operations for automotive  and heavy truck applications. The Company’s reportable segments are business units that target different industry sectors. Each reportable segment is managed  separately because of the need to specifically address customer needs in these different industries. The Company operates under four reporting segments: (1) Mobile Industries; (2) Process Industries; (3) Aerospace and Defense; and (4) Steel. 75 THE TIMKEN COMPANY