ManageMent’s Discussion anDanalysis of financial conDition anD Results of opeRations The Process Industries segment’s net sales, excluding the effect of acquisitions and currency-rate changes, increased 10.9% for 2010  compared to 2009, primarily due to higher volume of approximately $80 million. The increased sales resulted from a 20% increase in  the industrial distribution channel, a 116% increase in global wind energy and a 10% increase in gear drives. These increases were  partially offset by a 26% decline in the metals sector. EBIT was higher in 2010 compared to 2009 due to the impact of increased  volume of approximately $45 million, lower impairment and restructuring charges of approximately $40 million and better manufacturing  utilization of approximately $35 million. These increases were partially offset by higher selling, general and administrative expenses of  approximately $30 million and higher raw material costs and related LIFO expense of $25 million. The Aerospace and Defense segment’s net sales, excluding the effect currency-rate changes, decreased 18.7% for 2010 compared to  2009. The decline was due to a decrease in volume of approximately $90 million, partially offset by favorable pricing. Volume was down  across most market sectors within the Aerospace and Defense segment, especially the defense and civil aviation market sectors.  EBIT decreased 74.5% in 2010 compared to 2009, primarily due to lower volume of approximately $35 million, higher manufacturing  costs of approximately $20 million and higher LIFO expense of approximately $10 million, partially offset by cost reductions, pricing  and sales mix. 30 THE TIMKEN COMPANY aEROsPacE aND DEFENsE sEGMENT: PROcEss INDusTRIEs sEGMENT: 2010 2009 $ Change  Change  Net sales, including intersegment sales  $ 903.4 $ 808.7 $ 94.7 11.7%  EBIT $ 133.6 $ 72.6 $ 61.0 84.0%  EBIT margin  14.8% 9.0% – 580 bps 2010 2009 $ Change  % Change  Net sales, including intersegment sales  $ 903.4 $ 808.7 $ 94.7 11.7%  Acquisitions  4.9  –  4.9  NM Currency  1.7  –  1.7  NM Net sales, excluding the impact of acquisitions and currency $ 896.8 $ 808.7 $ 88.1 10.9%  2010 2009 $ Change  Change  Net sales, including intersegment sales  $ 338.3 $ 417.7 $ (79.4) (19.0)% EBIT $ 16.7 $ 65.4 $ (48.7) (74.5)% EBIT margin  4.9% 15.7% – (1,080) bps 2010 2009 $ Change  % Change  Net sales, including intersegment sales  $ 338.3 $ 417.7 $ (79.4) (19.0)% Currency  (1.4) –  (1.4) NM Net sales, excluding the impact of currency  $ 339.7 $ 417.7 $ (78.0) (18.7)%