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Financial Highlights($ in thousands, except per share amounts)2011 2010 % IncreaseRevenue $2,192,663 $1,917,045 14.4%Gross Margin 508,759 466,320 9.1%Operating Income 334,831 309,500 8.2%Net Income 235,658 200,531 17.5%Diluted Earnings Per Share $2.16 $1.82 18.7%For 2011 Oceaneering reported record earnings and EPS. We achieved best ever operating income from our ROV andSubsea Products segments. Our ability to produce outstanding results was largely attributable to our global focus ondeepwater and subsea completion activity.2011 ReviewOperationsWe achieved record ROV operatingincome for the eighth consecutive year.We funded organic growth andacquisition opportunities at a recordsettingpace. Our capital expenditureswere almost two-and-a-half times theaverage we invested during the previousfive years.Our investment in acquisitions wasthree times what we spent in totalduring the 2006 through 2010 period.These included the largest acquisitionin the history of the company.We secured a term field support vesselservices contract for work offshoreAngola commencing in February 2012.This contract represents a significantgeographic expansion with considerablebacklog for our Subsea Projects business.Share PerformanceOur share price rose 25% duringthe year.Our 2011 share price percentageincrease was larger than any of theother companies in the Oil ServiceSector Index (OSX), which bycomparison declined 12%.Our annual year-end share pricepercentage change has outperformedthe OSX in eight of the past ten years.Over this decade our stock price hasincreased on average 32% per year,twice that of the OSX.Our market capitalization reached$5 billion for the first time duringthe year.We initiated a regular quarterly cashdividend in May.2011 Annual Report 1