Process Industries  achieved record financial performance with sales of $1.2 billion and an  operating margin of 22.6 percent. Throughout the year, we seized opportunities to enhance this  business through investments in new products and acquisitions and expanded sales in Asia by  24 percent over the prior year. in  Aerospace and Defense , late-cycle recovery finally gained traction toward the end of the  year although overall sales remained weak. Despite this year’s lackluster performance, we remain  confident about the business’ underlying strength and future prospects. Leveraging the downturn,  we have rationalized resources and set a solid foundation for future growth. Our  Steel  segment delivered strong performance with sales of $2 billion and a 13.8 percent  operating return on sales. To serve record demand — particularly in the energy and machinery  sectors — we took steps to strategically allocate resources across our manufacturing base to  satisfy these customer requests. Across the company, efficient business processes and more cost-effective  operations directly attributable to our new enterprise system allowed us to  successfully serve customers in diverse industries around the world. For example,  although we continued to leverage working capital, we ended the year with  aftermarket product availability greater than 95 percent, a key performance metric for the distribution channel. in 2011, we also redeployed cash to shareholders with $76 million in dividends,  an increase of 48 percent over 2010, and $44 million in share repurchases. in  addition, we invested $292 million in acquisitions and another $205 million in  capital improvements. We also continued to fund the company’s pension and post-retiree medical plans, contributing $401 million.  The acquisitions Timken made in the past year broaden  our portfolio with capabilities that complement our core product lines. Specifically, we added two  companies that present Timken with ripe opportunities for diversification and global expansion: iNvESTiNG iN GrOWTh • In July, we acquired Philadelphia Gear Corp.,  a leading gear-drive services company, offering a diverse range of industrial and marine gear services. • In October, we added Drives LLC, a  manufacturer of engineered chain, roller chain and conveyor augers, complementing Timken’s established capabilities. 4 In high-speed and high-torque  environments,  Philadelphia Gear ® components and  services consistently  offer resilience.  The world’s energy,  infrastructure and  marine industries rely on Timken to  design, manufacture  and maintain complex gear drive  systems that power the world. Drives business  brings significant  expertise in precision- engineered chain  and related products,  especially among  global equipment  manufacturers in  agricultural and food  processing. $292M $76M DEPLOYED iN DiviDENDS TO ShArEhOLDErS iNvESTED iN ACqUiSiTiONS