This Annual Report on Form 10-K contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  Statements contained anywhere in this Annual Report on Form 10-K that are not limited to historical information are considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including, without limitation, statements regarding:

These forward-looking statements are based largely on management's expectations which are subject to a number of known and unknown risks, uncertainties and other factors discussed in this report and in other documents filed by us with the Securities and Exchange Commission, which may cause actual results, financial or otherwise, to be materially different from those anticipated, expressed or implied by the forward-looking statements.  All forward-looking statements included in this document are based on information available to us on the date hereof, and we assume no obligation to update any such forward-looking statements to reflect future events or circumstances.  You can identify these statements by forward-looking words such as "expect", "believe", “anticipate”, "goal", "plan", "intend", "estimate", "may", "will", “should” and similar expressions.

In addition to the risks and uncertainties identified elsewhere herein and in other documents filed by us with the Securities and Exchange Commission, the risk factors described in this document under the caption "Risk Factors" should be carefully considered when evaluating our business and future prospects.

Astec Industries, Inc. (the "Company") is a Tennessee corporation which was incorporated in 1972.  The Company designs, engineers, manufactures and markets equipment and components used primarily in road building utility and related construction activities as well as other products discussed below.  The Company's products are used in each phase of road building, from quarrying and crushing the aggregate to application of the road surface. The Company also manufactures certain equipment and components unrelated to road construction, including trenching, auger boring, directional drilling,equipment for the mining, quarrying, construction and demolition industries; gas and oil drilling rigs,rigs; water well and geothermal drilling rigs,rigs; industrial heat transfer equipment,equipment; whole-tree pulpwood chippers,chippers; horizontal grindersgrinders; and blower trucks.  The Company also manufactures a line of multiple use plants for cement treated base, roller compacted concrete and ready-mix concrete.  The Company is developing and marketing pelletizing equipment used to compress wood and other products into dense pellets for the renewable energy market among other applications.  The Company's subsidiaries hold 9783 United States patents and 3840 foreign patents with 6373 patent applications pending and have been responsible for many technological and engineering innovations in the industry.industries in which they operate.  The Company's products are marketed both domestically and internationally.  In addition to equipment sales, the Company manufactures and sells replacement parts for equipment in each of its product lines and replacement parts for some competitors' equipment.  The distribution and sale of replacement parts is an integral part of the Company's business.

The Company's strategy is to be the industry's most cost-efficient producer in each of its product lines while continuing to develop innovative new products and provide first class service for its customers.  Management believes that the Company is the technological innovator in the markets in which it operates and is well positioned to capitalize on the need to rebuild and enhance roadway and utility infrastructure as well as in other areas in which it offers products and services, both in the United States and abroad.

The Company's business units have their own decentralized management teams and offer different products and services.  The business units have been aggregated into four reportable business segments based upon the nature of the product or services produced, the type of customer for the products, the similarity of economic characteristics, the manner in which management reviews results and the nature of the production process, among other considerations.  The reportable business segments are (i) Asphalt Group, (ii) Aggregate and Mining Group, (iii) Mobile Asphalt Paving Group and (iv) Underground Group.  All remaining companies, including the Company, Astec Insurance Company, Peterson Pacific Corp. and Astec Australia Pty Ltd, as well as U.S. federal income tax expenses for all business segments, are included in the "Other Business Units" category for reporting.

Financial information in connection with the Company's financial reporting for segments of a business and for geographic areas under FASB Accounting Standards Codification (ASC) 280 is included in Note 17, Operations by Industry Segment and Geographic Area, to "Notes to Consolidated Financial Statements” presented in Appendix A of this report.

The Asphalt Group segment is made up of three business units: Astec, Inc. ("Astec"), Heatec, Inc. ("Heatec") and CEI Enterprises, Inc. ("CEI").  These business units design, engineer, manufacture and market a complete line of asphalt plants, concrete mixing plants, wood pellet plants, and related components of each, heating and heat transfer processing equipment and storage tanks for the asphalt paving and other non-related industries.  The company is currently developing a new wood pellet plant and has the goal of becoming the world’s first sole source provider of wood pellet production plants.  Components of the wood pellet plant are expected to be produced by several of the Company’s operating segments.

Astec developed a Double Barrel Green System (patent pending), which allows the asphalt mix to be prepared and placed at lower temperatures than conventional systems and operates with a substantial reduction in smoke emissions during paving and load-out.  Previous technologies for warm mix production rely on expensive additives, procedures and/or special asphalt cement delivery systems that add significant costs to the cost per ton of mix.  The Company’s new Astec multi-nozzle device eliminates the need for the expensive additives by mixing a small amount of water and asphalt cement together to create microscopic bubbles that reduce the viscosity of the asphalt mix coating on the rock, thereby allowing the mix to be handled and worked at lower temperatures.

The components in Astec's asphalt mixing plants are fully automated and use both microprocessor-based and programmable logic control systems for efficient operation.  The plants are manufactured to meet or exceed federal and state clean air standards.  Astec also builds batch type asphalt plants and has developed specialized asphalt recycling equipment for use with its hot-mix asphalt plants.

Astec’s concrete production equipment is designed to be easy to operate and maintain.  Materials are managed with continuous blending using belt scales and variable frequency conveyor drives.  Shaft-driven mixers with high-torque folding action deliver a uniform concrete mix.  Astec’s tower plants, which are designed in modular configurations for either dry or wet arrangements.  Modular components such as aggregate bins, screen decks, discharge chutes and mixer decks are all universally matched andarrangements, provide aan exciting new alternative in vertical stationary concrete plants.

Astec markets its hot-mix asphalt products both domestically and internationally. Dillman Equipment, Inc., a manufacturer of asphalt production equipment in Prairie du Chien, Wisconsin, was acquired by Astec in October 2008 and now operates as a division of Astec. The Dillman line of equipment is offered to the market as an addition to the Astec product line. The principal purchasers of asphalt and related equipment are highway contractors. Asphalt equipment, including Dillman products, is sold directly to the customers through Astec's domestic and international sales departments, although independent agents are also used to market asphalt plants and their components in international markets. The Dillman line of equipment is produced by Astec in its Dillman division facility located in Prairie du Chien, Wisconsin, and is offered to the market as an addition to the Astec product line.

Heatec and CEI equipment is marketed through both direct sales and dealer sales.  Manufacturers' representatives also sell heating products for applications in several industries other than the asphalt industry.

In total, the products of the Asphalt Group segment are marketed by approximately 5251 direct sales employees, 1918 domestic independent distributors and 4453 international independent distributors.

Raw materials used in the manufacture of products include carbon steel, pipe and various types of alloy steel, which are normally purchased from distributors.  Raw materials for manufacturing are normally readily available.  Most steel is delivered on a "just-in-time" arrangement from the supplier to reduce inventory requirements at the manufacturing facilities, but some steel is bought and occasionally inventoried.

This industry segment faces strong competition in price, service and product performance and competes with both large publicly-held companies with resources significantly greater than those of the Company and with various smaller manufacturers. Domestic hot-mix asphalt plant competitors include Terex Corporation, Gencor Industries, Inc., ADM and Almix.  In the international market the hot-mix asphalt plant competitors include Ammann, Fayat/Marini, Terex/Parker, Cifali, Speco and local manufacturers.  The market for the Company's heat transfer equipment is diverse because of the multiple applications for such equipment.  Competitors for the construction product line of heating equipment include among others, Gencor Industries, Inc., American Heating, Pearson Heating Systems, Reliable Asphalt Products and Meeker. Competitors for the industrial product line of heating equipment include SignalSigma Thermal, Fulton Thermal Corporation and Vapor Power International, NATCO, Fulton and Broach, among others.International.

At December 31, 2011,2012, the Asphalt Group segment employed 1,1141,116 individuals, of which 802792 were engaged in manufacturing, 142144 in engineering and 170180 in selling, general and administrative functions.

The backlog for the Asphalt Group at December 31, 20112012 and 20102011 was approximately $115,775,000$139,828,000 and $108,792,000,$115,775,000, respectively. Management expects substantially all current backlogs to be filled in 2012.2013.

The Company's Aggregate and Mining Group is comprised of sixseven business units focused on the aggregate, metallic mining, quarrying and recycling markets.  These business units achieve their strength by distributing products into niche markets and drawing on the advantages of brand recognition in the global market.  These business units are Telsmith, Inc. ("Telsmith"), Kolberg-Pioneer, Inc. ("KPI"), Astec Mobile Screens, Inc. ("AMS"), Johnson Crushers International, Inc. ("JCI"), Breaker Technology Ltd/Breaker Technology Inc. ("BTI") and, Osborn Engineered Products, SA (Pty) Ltd ("Osborn") and Astec Agregados E Mineracao Do Brasil LTDA (“Astec Brazil”).

Telsmith’s core products are jaw, cone and impact crushers, as well as vibrating feeders and inclined and horizontal screens. Telsmith also provides consulting and engineering services to provide complete “turnkey” processing systems. Both portable and modular plant systems are available in production ranges from 300 tph to 1500 tph.

Telsmith maintains an ISO 9001:2008 certification, an internationally recognized standard of quality assurance. In addition, Telsmith has achieved CE designation (a standard for quality assurance and safety) on its jaw crusher, cone crusher and vibrating screen products marketed into European Union countries.

KPI designs, engineers, manufactures and supports a complete line of aggregate processing equipment for the sand and gravel, mining, quarrying, concrete and asphalt recycling markets under the KPI-JCI product brand name. This equipment, along with the full line of portable and stationary aggregate and ore processing products from JCI and the related screen products from AMS, are all jointly marketed through an extensive network of KPI-JCI and AMS dealers.

Recent additions to theThe KPI-JCI product line was recently expanded to include the Fine Recovery 9400 Plant (“Model 9400P”) and the 5054 Impact Crusher.  The  Model 9400Pa new fine recovery plant which was designed for aggregate producers requiring a mobile fines recovery plant to support their existing operations by reducing the volume of fine material in their settling ponds without the use of flocculants.  The Model 9400Pnew model can be configured to be completely self-contained, eliminating the need for external equipment during plant set-up and tear-down.  The 5054 Impact Crusher features the latest and most up-to-date technology in impact crushing as well as a large expansion chamber, resulting in increased productivity and a more consistent product.

JCI designs, engineers, manufactures and distributes portable and stationary aggregate and ore processing equipment. This equipment is used in the aggregate, mining and recyclerecycling industries. JCI's principal products are cone crushers, three-shaft horizontal screens, portable plants, track-mounted plants and replacement parts for competitive equipment. JCI offers completely re-manufactured cone crushers and screens from its service repair facility.

JCI cone crushers are used primarily in secondary and tertiary crushing applications, and are availablecome in both remotely adjusted and manualmanually adjusted models.  Horizontal screens are low-profile machines for use in both portable and stationary applications to separate aggregate materials by sizes. JCI’sapplications.  JCI incline screens are available for both standard duty and heavy duty needs and are configuredapplications, primarily both for portable andin stationary applications.  JCI has added a new Cascade line of incline screens to its product offering.  JCI also manufactures the Combo Screen, which integratesa combination of an incline feeder withfeed section and a horizontal discharge section.  The Combo Screen utilizes an oval stroke impulse mechanism, and offers increased throughput capacity in scalping applications where the removal of fines is desired.

Portable plants combine various configurations of cone crushers, horizontal screens, and combo screens as well asand conveyors, mounted on tow-awaytow away chassis.  Due to high transportation costs of construction materials, many producers use portable equipment to produce the materialmaterials they need close to their job sites.  Portable plants allow the aggregate producers the ability to quickly and efficiently move their equipment from one location to another as their job needsjobs necessitate.

Track plants combine various configurations of cone crushers, horizontal screens, incline screens and conveyors, all mounted on track chassis.  These units are fully self-contained and allow operators to produce materialbe producing materials within minutes of driving the equipment off of their transport trucks.  The introduction of track mounted crushing and screening plants has providedenabled contractors with the means to perform jobs that in the past were not economically feasible.  JCI’sJCI's track product line is also a valuable tool to JCIfor our dealers, because it allowsallowing them to compete in the large track mounted rental market.market, which had previously not been available to our dealers. 

During 2012, AMS has refinedbolstered its mobile screening plant product line with additionsthe addition of a new competitively priced 5' x 20' mobile screen with the primary target markets being sand and gravel, crushed stone, recycle, and organic screening applications.  AMS also added to its recycle line with the options listaddition of new model originally designed primarily for the tracked products, specifically the FT3620 Fold 'n Go.  The new options include conveyor dust covers, a rinser screen and the ability to track and screen simultaneously.  AMS is also developing retrofits for other alternative throw screens designed specifically for mining markets.  Although the Recycled Asphalt Payment (“RAP”) market was down in 2011, AMS currently has a significant market shareuse in the RAP market, and plans to bolster its position in 2012 with the addition of the ProSizer® 4200 and stationary plants custom designed to meet customer's specific needs.  Thespecifically fractionating; however, this new ProSizer® 4200 will feature a larger horizontal shaft impactor from KPI that will process not only reclaimed asphalt pavement but also concrete and virgin aggregate, thereby expanding the ProSizer® line into additional markets.  AMS has also developed an industrial sands screen that shares much of the same technology with the high frequency screen, only in a modular design.  The screen is a 5' x 12' screen that can be configured in multiple configurations while being fully sealed to keep dust contained for applications screening below 70 mesh.  Additional size offerings in our Multi-Frequency Screensmodel will also be applied in these specialty markets.  These screens are marketedallow us to industrialexpand into concrete, crushed stone and sand companies for frac sands, glass sands, silica, salt and other industrial sands.gravel applications.

BTl designs, engineers, manufactures and markets a complete line of stationary rockbreaker systems for the mining, quarry and recycling industries, and is a world leader in the supply of large scaleit provides large-scale stationary rockbreakers infor open pit mining, as well as mid-sized stationary rock breakers for underground applications.

In addition to supplying equipment for the mining and quarry industries, BTl also designs, manufactures and markets a complete line of hydraulic breakers, compactors and demolition attachments for the North American construction and demolition markets.

BTl maintains ISO9001:2008 and 14001:2004 certifications, internationally recognized standards of quality and environmental assurance. BTl offers an extensive aftermarket sales and service program through a highly qualified and trained dealer network.

Recent or planned additions to the BTI product line include the TRX Stationary Rockbreaking System, the RMS 18 Hammer Scaler on LP15ARW Carriera new stationary rockbreaking system, as well as new models in other product lines including a new hammer scaler, a new multi-purpose mine utility vehicle and a new Hydraulic Wheel Drive Base Carrier.turntable boom.  The TRX Stationary Rockbreaking System, which consist of extra-largenew stationary rockbreakers,  are in the final stages of development.  These systems willrockbreaker system is believed to be the largest systems in the world and was designed to work on new vibratory crusher installations in strip mining applications.  ThreeFour models of this series are planned that offerwith 48 foot, 54 foot, or 58 foot and 64 foot reach alland the series is capable of carrying BTI’s largest breaker, the BXR160.  The RMS18 Hammer Scaler (previously HS18) on LP15ARW Carrierhandling 8,500 to 20,000 FT LB class breakers.  A new hammer scaler was introduced in 2011 and is a new generation, cost effectivecost-effective mobile underground scaling machine, which complements the existing BTI scaler product line and competes better competes with less expensive units infor smaller heading and less demanding applications.  The Hydraulic Wheel Drive Base Carrier has been developed, builtBTI's new multi-purpose mine utility vehicle is a four wheel drive, hydraulic power train, 4 ton capacity supervisor vehicle/utility vehicle and is currentlyslated for manufacturing in the testing phase prior to its planned introduction tofirst quarter of 2013. A new turntable boom was developed with a new light duty swing post for the rental market in early 2012.  This carrier isaggregate market. The design will include a hydraulic wheel drive base carrierturntable bearing allowing for underground mobile mining applications and offersmore compact mounting, a cost effective power train and allows for improved vehicle speeds on grades by providing more consistent power to the wheels over a widegreater range of vehicle speeds.motion and increased swing torque.  BTI is also modifying its series of turntable booms for use in the waste transfer industry.

Osborn maintains ISO:9000; 14000 and 18000 certifications for quality assurance and designs, engineers, manufactures and markets a complete line of bulk material handling and minerals processing equipment. This equipment is used in the aggregate, mining, metallurgical and recycling industries. Osborn has been a licensee of Telsmith's technology for over 60 years. In addition to Telsmith, Osborn also manufactures under license ofproducts pursuant to licenses from American Pulverizer (USA) and Mogensen (UK) and has an in-house brand, Hadfields. Osborn also offers the following equipment: mineral sizers, single and double-toggle jaw crushers; core crushers; rotary breakers; mineral sizers; roll crushers; rolling ring crushers; mills; apron feeders; out-of-balance or exciter-driven screens and feeders; portable, track-mounted or modular crushing and screening plants; and a full range of idlers.

Aggregate processing and mining equipment is marketed by approximately 98105 direct sales employees, 132126 domestic independent distributors and 120143 international independent distributors.  The principal purchasers of aggregate processing equipment include highway and heavy equipment contractors, open mine operators, quarry operators and foreign and domestic governmental agencies.

Raw materials used in the manufacture of products include carbon steel and various types of alloy steel, which are normally purchased from distributors.  Raw materials for manufacturing are normally readily available.  BTI purchases hydraulic breakers under a purchasing arrangement with a South Korean supplier.  The Company believes the South Korean supplier has sufficient capacity to meet the Company's anticipated demand; however, alternative suppliers exist for these components should any supply disruptions occur.

The Aggregate and Mining Group faces strong competition in price, service and product performance.  Aggregate and Mining equipment competitors include Metso, Cedarapids, Powerscreen and Finlay, Pegson, Jacques, subsidiaries of Terex Corporation, Deister, F. L. Smith, McLanahan, Sandvik, Eagle Iron Works, and other smaller manufacturers, both domestic and international.

At December 31, 2011,2012, the Aggregate and Mining Group segment employed 1,4771,599 individuals, of which 1,0431,125 were engaged in manufacturing, 126135 in engineering and engineering support functions and 308341 in selling, general and administrative functions.

Telsmith has a labor agreement covering approximately 174192 manufacturing employees which expires on September 17, 2013.  None of Telsmith's other employees are covered by a collective bargaining agreement. Approximately 123125 of Osborn's manufacturing employees are members of two national labor unions with labor agreements that expire on June 30, 2014.

At December 31, 20112012 and 2010,2011, the backlog for the Aggregate and Mining Group was approximately $98,262,000$88,123,000 and $81,958,000,$98,262,000, respectively.  Management expects all current backlogs to be filled in 2012.2013.

The Mobile Asphalt Paving Group is comprised of Roadtec, Inc. ("Roadtec"), Carlson Paving Products, Inc. ("Carlson") and Astec Mobile Machinery GmbH (“Astec Mobile Machinery”), which began operations in the third quarter of 2011 in Hameln, Germany.  Roadtec designs, engineers, manufactures and markets asphalt pavers, material transfer vehicles, milling machines and a line of asphalt reclaiming and soil stabilizing machinery.  Carlson designs, engineers and manufactures asphalt paver screeds that attach to the asphalt paver to control the width and depth of the asphalt as it is applied to the roadbed.  Carlson also manufactures Windrowwindrow pickup machines which transfer hot mix asphalt from the road bed into the paver's hopper and a heavy duty commercial class 8 ft. asphalt paver designed for parking lots, residential and other secondary roads. Astec Mobile Machinery serves as a distributor for Roadtec’s products in Europe and also designs, manufactures and markets asphalt rollers and screeds primarily for road construction markets outside the United States as well as dirt and asphalt compaction equipment.a small road widener attachment.

Asphalt pavers are used in the application of hot-mix asphalt to the road surface.  Roadtec pavers have been designed to minimize maintenance costs while exceeding road surface smoothness requirements.  Roadtec also manufactures a paver model designed for use with the material transfer vehicle described in the above paragraph.above. This paver model is designed to carry and spray tack coat directly in front of the hot mix asphalt in a single process.

Roadtec manufactures milling machines designed to remove old asphalt from the road surface before new asphalt mix is applied.  Roadtec's milling machine lines, for larger jobs, are manufactured with a simplified control system, wide conveyors, direct drives and a wide range of horsepower and cutting capabilities to provide versatility in product application.  In addition to its larger half-lane and up highway class milling machines, Roadtec also manufactures a smaller, utility class machine for 2 ft. to 4ft. cutting widths. In addition, two new models of cold planers will be introduced in 2012:2013: a dedicated one meter (40”) cutting width machine and a smaller 12” to 24” utility class cold plane, both mounted on wheels.

Roadtec will produce 23 soil stabilizers in 20122013 at configurations of 440HP, 625HP and 755HP.  These machines double as asphalt reclaiming machines for road rehabilitations in addition to their primary rollpurpose of stabilizing soil stabilizing sub-grades with additives to provide an improved base on which to pave.  Other sizes and models areOne additional model is being developed for production beginning in late 2013.

Carlson's patented screeds are part of the asphalt paving machine that places asphalt on the roadbed at a desired thickness and width while smoothing and compacting the surface.  Carlson screeds can be configured to fit many types of asphalt paving machines.  A Carlson screed uses a hydraulic powered generator to electrify elements that heat a screed plate so that asphalt will not stick to it while paving.  A generator is also available to power tools or lights for night paving.  Carlson offers options which allow extended paving widths and the addition of a curb on the road edge.  Carlson’s CP 90 commercial class 8 ft. paver fills the void between competitors commercial pavers, which tend to be lighter and less robust machines and Roadtec’s highway class paver line.

The Mobile Asphalt Paving Group equipment is marketed both domestically and internationally to highway and heavy equipment contractors, utility contractors and foreign and domestic governmental agencies. Mobile construction equipment and factory authorized machine rebuild services are marketed both directly and through dealers.  This segment employs 39 direct sales staff, 7374 domestic independent distributors and 17 international independent distributors.distributors including Astec-owned distributors in Australia and Germany.

Raw materials used in the manufacture of products include carbon steel and various types of alloy steel, which are normally purchased from distributors and other sources.  Raw materials for manufacturing are normally readily available.  Most steel is delivered on a "just-in-time" arrangement from suppliers to reduce inventory requirements at the manufacturing facilities, but some steel is bought and occasionally inventoried.  Components used in the manufacturing process include engines, gearboxes, power transmissions and electronic systems.

The Underground Group segment faces strong competition in price, service and product performance and competes with both large publically held companies with resources significantly greater than those of the Company and with various smaller manufacturers.  Competition for trenching, excavating, vertical and directional drilling, water well drilling rigs and fluid/mud equipmentMajor competitors include Charles Machine Works (Ditch Witch), Vermeer, Atlas/Copco, Schramm, Versa Drill, Schramm, Atlas Copco, National Oil Well, Blohm & Vos, Oil Country, BVM, NOV/Rolligon, Stewart & Stevenson and other smaller manufacturers.  Competition for the auger boring and vertical and directional drilling and fluid/mud equipment includes Charles Machine Works (Ditch Witch), Vermeer, Atlas-Copco, Schramm, Prime Drilling GmbH, The Robins Company, Herrenknecht, AG and other smaller custom manufacturers.Dragon.

At December 31, 2011,2012, the Underground Group segment employed 517351 individuals, of which 390277 were engaged in manufacturing, 4223 in engineering and 8551 in selling, general and administrative functions.  Included in the totals are 190 employees of GEFCO.  GEFCO hadhas a collective bargaining agreement in place for approximately 6580 manufacturing employees prior to the Company acquiring the businessemployees.  The current agreement expires on October 1, 2011 and a similar agreement between GEFCO, Inc. and the employees’ union is expected to be completed in the near future.April 20, 2013.

The backlog for the Underground Group segment at December 31, 20112012 and 20102011 was approximately $32,322,000$13,904,000 and $21,356,000,$21,342,000, respectively.  The amount for 20102011 has been adjusted to includeexclude the GEFCOAmerican Augers backlog for presentation purposes.purposes as the company was sold during 2012.  Management expects all current backlogs to be filled in 2012.2013.

This category consists of the Company's business units that do not meet the requirements for separate disclosure as an operating segment.  At December 31, 2011,2012, these other operating units included  Peterson Pacific Corp. (“Peterson”), Astec Australia Pty Ltd (“Astec Australia”), Astec Insurance Company and Astec Industries, Inc., the parent company.  Peterson designs, engineers, manufactures and distributes whole-tree pulpwood chippers, biomass chippers, horizontal grinders and blower trucks.  Astec Australia was formed in October 2008 and is the sole distributor of many of the company’s product lines in Australia and New Zealand.  As a distributor, Astec Australia sells, installs, services and provides parts support for many of the products produced by the Company’s manufacturing companies. Astec Insurance Company is a captive insurance company.

The primary markets served by Peterson are the wood grinding, chipping and blower truck markets. Peterson produces 3 models of whole-tree pulpwood chippers ranging from 765 to 1200 horsepower, 2 flail delimbers, 2 drum chipper models, 9 horizontal grinder models, 2 blower truck models and 2 self containedself-contained blower trailers.  A deck screen model is produced for Peterson by JCI.  The horizontal grinders range from 475 to 1200 HP.

Since its inception, Astec Australia has marketed relocatable and portable asphalt plants and components produced by Astec, Heatec and CEI, asphalt paving equipment and components produced by Roadtec and Carlson, and trenching equipment produced by Astec Underground.  In 2009, Astec Australia added equipment manufactured by the Company’s Aggregate & Mining Group to its product offerings.  In addition to selling equipment, Astec Australia also installs, services and provides spare parts support for the equipment it sells and for other equipment its customers carry in their fleets.

Peterson markets its machines and spare parts both domestically and internationally in the wood grinding, chipping and blower truck industries.  The disc chippers and debarkers primarily serve the pulp and paper industry.  The drum chippers primarily serve the biomass energy market.  The grinders serve the compost, mulch, biomass energy and construction and demolition recycling markets.  Blower trucks and trailers are used primarily in landscape and erosion control markets.  Domestic sales are accomplished through a combination of 1916 independent distributors and 89 direct sales and support personnel.  The international market is served with 10 independent distributors plus direct sales to customers in some countries.  The principal customers of Peterson products are independent contractors who supply the markets listed above.  Municipal governments also purchase waste grinders.

Astec Australia continues to enjoy strong partnerships with key large corporate customers, but it has expanded its customer base by actively marketing products and services to a broader range of customers.  Astec Australia plans to focus on growing its existing business operations by identifying areas of competitive advantage.  Management believes that these opportunities will provide additional exposure to infrastructure development as well as in the aggregate and mining sectors.  The continuing gradual addition of other Company product lines will allow Astec Australia to access market segments not previously serviced.  Management believes that Astec Australia has the organizational structure (sales professionals, construction personnel, service technicians and administrative personnel) and operating systems, – which are well established, – that will allow the business to continue to grow and expand the number of business locations, sales volume, product offerings and geographical dispersion of equipment sold.  Australia and New Zealand are expected to remain the company’s key markets; however, the company also plans to pursue opportunities in other areas of the Pacific Rim and in Southeast Asia.  Astec Australia opened a new office in WesternTullamarine, Australia in 2011,2012, which gives the company representation on both the east and west coasts of Australia and improved access to Australia’s mining sector, a market that has not been heavily served by the company previously.Australia.

Raw materials used in the manufacture of products include carbon steel and various types of alloy steel, which are normally purchased from distributors and other sources.  Raw materials for manufacturing are normally readily available.  Most steel is delivered on a "just-in-time" arrangement from the supplier to reduce inventory requirements at the manufacturing facilities, but some steel is bought and occasionally inventoried.inventoried after purchase.  Purchased components used in the manufacturing process include engines, gearboxes, power transmissions and electronic control systems.

Peterson has strong competitors based on product performance, price and service. The principal competitors in North America for high speed grinders are Morbark, Vermeer, Bandit, Diamond Z and CBI, along with other smaller competitors. Internationally, Doppstadt, Jenz and other smaller companies compete in the grinder segment. Mobile chipper competitors include Morbark, Precision, Doppstadt and other smaller companies. The principal competitors in the blower truck business are Finn and Express Blower (a division of Finn).

Astec Australia’s competitors in each product line are typically the same companies that compete with the Company in other locations.  Competitors for asphalt plants, mobile asphalt equipment, underground equipment and aggregate and mining equipment are primarily overseas manufacturers who are therefore subject to the same importingimportation issues as Astec Australia.  The price impact of competition between European, American and Asian products is dependent primarily on the relationship between the US dollar and the Euro exchange rate as compared to the Australian dollar.

At December 31, 2011,2012, the Other Business Units segment employed 250285 individuals, of which 171200 were employed by Peterson and 3646 were employed by Astec Australia.  Peterson has 91111 employees engaged in manufacturing, 2631 in engineering and 5458 in selling and general and administrative functions.  Astec Australia has 1722 employees engaged in service and installation work and 1924 in selling and general and administrative functions.  The remaining 4339 employees are engaged in selling and general and administrative functions at the parent company.

The backlog for the Other Business Units segment, all of which is attributable to Peterson and Astec Australia, at December 31, 20112012 and 20102011 was approximately $27,090,000$17,671,000 and $5,925,000,$27,090,000, respectively.  Management expects all current backlogs to be filled in 2012.2013.

Although the Company has four reportable business segments, the following information applies to all operating segments of the Company.

Steel is a major component in the Company’s equipment.  Moderate steel price increases driven primarily by scrap price increases, occurred during the fourth quarter of 2011 and have continued during early 2012.  Steel demand appears relatively weak for the first quarter of 2013 with short mill lead times for most products. Management expects demand to be relatively strong, and management expects this trend to continue throughstrengthen ahead of the second quarter, of 2012.and in balance with this trend, expects steel prices to increase moderately as mill lead times return to more seasonably normal levels. It is uncertain, however, if these trends will continue throughout the balanceremainder of 2012.2013. The Company continues to utilize forward lookingforward-looking contracts coupled with advanced steel purchases to minimize the impact of the price increases.  The Company will review the trends in steel prices as we progress toward the second half of 20122013 and establish future contract pricing accordingly.

The Company is subject to various laws and governmental regulations concerning environmental matters and employee safety and health in the United States and other countries.  The Environmental Protection Agency, the Occupational Safety & Health Administration, other federal agencies and certain state agencies have the authority to promulgate regulations that have an effect on the Company’s operations.  Many of these federal and state agencies may seek fines and penalties for violations of these laws and regulations.  The Company has been able to operate under these laws and regulations without any materially adverse effect on its business.

None of the Company's operating segments operate within highly regulated industries.  However, air pollution control equipment manufactured by the Company, principally for hot-mix asphalt plants, must comply with certain performance standards promulgated by the federal Environmental Protection Agency under the Clean Air Act applicable to "new sources" or new plants.  Management believes that the Company's products meet all material requirements of such regulations and of applicable state pollution standards and environmental protection laws.

In addition, due to the size and weight of certain equipment the Company manufactures, the Company and its customers may encounter conflicting state regulations on maximum weights transportable on highways.  Also, some states have regulations governing the operation of asphalt mixing plants, and most states have regulations relating to the accuracy of weights and measures, which affect some of the control systems manufactured by the Company.

Compliance with these government regulations has no material effect on capital expenditures, earnings, or the Company's competitive position within the market.

At December 31, 2011,2012, the Company and its subsidiaries employed 3,8853,860 individuals, of which 2,6972,658 were engaged in manufacturing, 381373 in engineering, including support staff, and 807829 in selling, administrative and management functions.

Other than the Telsmith and Osborn labor agreements described under the Employee subsection of the Aggregate and Mining Group and the GEFCO labor agreement currently being negotiated described under the Employee subsection of the Underground Group, there are no other collective bargaining agreements applicable to the Company.  The Company considers its employee relations to be good.

The Company manufactures many of the component parts and related equipment for its products, while several large components of its products are purchased "ready-for-use".  Such items include engines, axles, tires and hydraulics.  In many cases, the Company designs, engineers and manufactures custom component parts and equipment to meet the particular needs of individual customers.  Manufacturing operations during 20112012 took place at 20 separate locations.  The Company's manufacturing operations consist primarily of fabricating steel components and the assembly and testing of its products to ensure that the Company achieves quality control standards.

The Company periodically conducts technical and service seminars, which are primarily for dealer representatives, contractors, owners, employees and other users of equipment manufactured by the Company.  In 2011,2012, approximately 475455 representatives of contractors and owners of hot-mix asphalt plants attended seminars held by the Company in Chattanooga, Tennessee.  These seminars, which are taught by Company management and employees, along with select outside speakers and discussion leaders, cover a range of subjects including, but not limited to, technological innovations in the hot-mix asphalt, aggregate processing, paving, milling and recycling markets.

The Company also sponsors executive seminars for the management of the customers of Astec, Heatec, CEI and Roadtec.  Primarily, members of the Company's management conduct the various seminars, but outside speakers and discussion leaders are also utilized.

During 2011,2012, seven service training seminars were also held at the Roadtec facility for approximately 405710 customer representatives, and an additional four remote seminars were conducted at other locations throughout the country.for approximately 200 additional customer personnel.  Telsmith conducted 3three technical seminars for approximately 79116 customer and dealer representatives during 20112012 at its facility in Mequon, Wisconsin.  Osborn conducted 3 seminars for customers at which 79 customer personnel attended.  KPI, JCI and AMS jointly conduct an annual dealer event called NDC (National Dealers Conference)., an annual dealer event. The event offers the entire dealer network a preview of future products, marketing and promotional programs to help dealers operate successful businesses. In addition to this event, the companies also provide factory customer and dealer training and on-site local, regional and national sales training programs throughout the year.

The Company seeks to obtain patents to protect the novel features of its products.products and processes.  The Company's subsidiaries hold 9783 United States patents and 3840 foreign patents.  There are 6373 United States and foreign patent applications pending.

The Company and its subsidiaries have approximately 8682 trademarks registered in the United States, including logos for American Augers, Astec, Astec Dillman, Astec Underground, Carlson Paving, CEI, GEFCO,Gefco, Heatec, JCI, Peterson Pacific, Roadtec, and Telsmith, and Trencor, as well as the names AMERICAN AUGERS, ASTEC, CARLSON, HEATEC, JCI, KOLBERG PIONEER, PETERSON, ROADTEC TELSMITH and TRENCORTELSMITH, as well as a number of other product names.  The Company also has 5253 trademarks registered in foreign countries,jurisdictions, including Australia, Brazil, Canada, China, France, Germany, Great Britain, India, Italy, Mexico, South Africa, South Korea, Thailand, Vietnam and the European Union.  The Company and its subsidiaries have 4947 United States and foreign trademark registration applications pending.

The Company dedicates substantial resources to engineering and product development. At December 31, 2011,2012, the Company and its subsidiaries had 381373 full-time individuals employed in engineering and design capacities.

RecentRevenues for recent years, revenues, adjusted for acquisitions, have been strongest during the first half of the year, with the second half of the year consistently being weaker. We expect future operations in the near term to be typical of this historical trend.  Operations during 2009, 2010 and, to a lesser degree, 2011 were significantly impacted by the various economic factors discussed in the MD&A section of this document.

As of December 31, 2011,2012, the Company had a backlog for delivery of products at certain dates in the future of approximately $279,598,000.$263,791,000.  At December 31, 2010,2011, the total backlog was approximately $233,140,000.  The amount for 2010 has been$268,618,000, as adjusted to includeexclude the GEFCO backlog for presentation purposes.American Augers backlog.  The Company's contracts reflected in the backlog are not, by their terms, subject to termination.  Management believes that the Company is in substantial compliance with all manufacturing and delivery timetables.

Each business segment operates in domestic markets that are highly competitive regarding price, service and product quality.  While specific competitors are named within each business segment discussion above, imports do not generally constitute significant competition for the Company in the United States, except for milling machines and track mounted crushers.  In international sales efforts, however, the Company generallymany times competes with foreign manufacturers that may have a local presence in the market the Company is attempting to penetrate.

In addition, asphalt and concrete are generally considered competitive products as a surface choice for new roads and highways.  A portion of the interstate highway system is paved in concrete, but over 90% of all surfaced roads in the United States are paved with asphalt.  Although concrete is used for some new road surfaces, asphalt is used for most resurfacing.

The Company’s internet website can be found at www.astecindustries.com.  We make available, free of charge on or through our internet website, access to our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after such material is filed with, or furnished to, the Securities and Exchange Commission. Information contained in our website is not part of, and is not incorporated into, this Annual Report on Form 10-K.

General economic downturns, including downturns in the commercial and residential construction industries, could result in a material decrease in our revenues and operating results.  Demand for many of our products, especially in the commercial construction industry, is cyclical.  Sales of our products are sensitive to the states of the U.S., foreign and regional economies in general, and in particular, changes in commercial construction spending and government infrastructure spending.  In addition, many of our costs are fixed and cannot be quickly reduced in response to decreased demand.  The following factors could cause a downturn in the commercial and residential construction industries:

Worldwide economic conditions and the international credit markets have significantly deteriorated in recent years and will possibly remain depressed for the foreseeable future. Continued deterioration of economic conditions and credit markets could adversely impact our earnings as sales of our products are sensitive to general declines in U.S. and foreign economies and the ability of our customers to obtain credit.  In addition, we rely on the capital markets and the banking markets to meet our financial commitments and short-term liquidity needs if internal funds are not available from our operations. Further disruptions in the capital and credit markets, or further deterioration of our creditors' financial condition, could adversely affect the Company's ability to draw on its revolving credit facility.  The Company’s current credit facility expires in May 2012,April 2017, and the restrictions in the credit markets could make it more difficult or expensive for us to replace our current credit facility, enter into a new credit facility or obtain additional financing.

Many of our customers depend on government funding of highway construction and maintenance and other infrastructure projects.  Any decrease or delay in government funding of highway construction and maintenance and other infrastructure projects could cause our net sales and profits to decrease.  FederalHistorically, federal government funding of infrastructure projects is usuallyhas typically been accomplished through bills that establish funding over a multi-year period, such as the Safe, Accountable, Flexible and Efficient Transportation Equity Act - A Legacy for Users (“SAFETEA-LU”), which provided $286.5 billion to fund federal transit projects from 2004 to 2009.  SAFETEA-LU funding expired on September 30, 2009, and federal transportation funding has operated on a number of short-termshorter term appropriations since that date. The currentmost recent funding legislation, fundingcommonly referred to as Map-21, was passed in July 2012 and funds federal transportation expenditures expires on March 31, 2012.  Congress is continuing to work on a number of proposals to continue funding at various levels.through September 30, 2014.

With the current political environment in Washington, the level of funding for federal highway projects is uncertain.  Although continued funding is expected, it may be at lower levels than in the past, and Congress may not enact long-term funding acts in the near future.  In addition, Congress could pass legislation in future sessions that would allow for the diversion of previously appropriated highway funds for other national purposes, or it could restrict funding of infrastructure projects unless states comply with certain federal policies.

We sell equipment primarily to contractors whose demand for equipment depends greatly upon the volume of road or utility construction projects underway or to be scheduled by both government and private entities.  The volume and frequency of road and utility construction projects is cyclical; therefore, demand for many of our products is cyclical.  The equipment we sell is durable and typically lasts for several years, which also contributes to the cyclical nature of the demand for our products.  As a result, we may experience cyclical fluctuations to our revenues and operating results.

A significant portion of our revenues relates to the sale of equipment involved in the production, handling, recycling or installation of asphalt mix.  Liquid asphalt is a byproduct of the refining of oil, and asphalt prices correlate with the price and availability of oil.  An increase in the price of oil or a decrease in the availability of oil would increase the cost of producing asphalt, which would likely decrease demand for asphalt, resulting in decreased demand for many of our products.  This would likely cause our revenues and profits to decrease.  Rising gasoline, diesel fuel and liquid asphalt prices will also adversely impact the operating and raw material costs of our contractor and aggregate producer customers, and if such customers do not properly adjust their pricing, they could experience reduced profits resulting in possible delays in purchasing capital equipment.

Steel is a major component in the Company’s equipment. Steel prices fluctuate routinely and are expected to increase through the first quarter of 2012.during 2013. Our reliance on third-party suppliers for steel and other raw materials exposes us to volatility in the prices and availability of these materials. Price increases or a decrease in the availability of these raw materials could increase our operating costs and adversely affect our financial results.

We have completed several acquisitions in the past, including the acquisition of the GEFCO and STECO divisionsdivision of Blue Tee Corp. and the businesses now operating as Astec Mobile Machinery GmbH in 2011, as well as certain assets and technology of Industrial Mechanical & Integration in 2009.2011.  We may acquire additional businesses in the future.  We may be unable to achieve the benefits expected to be realized from our acquisitions.  In addition, we may incur additional costs and our management's attention may be diverted because of unforeseen expenses, difficulties, complications, delays and other risks inherent in acquiring businesses, including the following:

We currently face strong competition in product performance, price and service.  Some of our domestic and international competitors have greater financial, product development and marketing resources than we have.the Company has.  If competition in our industry intensifies or if our current competitors enhance their products or lower their prices for competing products, we may lose sales or be required to lower the prices we charge for our products.  This may reduce revenue from our products and services, lower our gross margins or cause us to lose market share.

Dr. J. Don Brock, our Chairman and President,Chief Executive Officer, is of significant importance to our business and operations.  The loss of his services may adversely affect our business.  In addition, our ability to attract and retain qualified engineers, skilled manufacturing personnel and other professionals, either through direct hiring or acquisition of other businesses employing such professionals, will also be an important factor in determining our future success.

In 2011,2012, international sales represented approximately 41.2%39.3% of our total sales as compared to 38.2%41.3% in 2010.2011.  We plan to continue our growth efforts in international markets.  In connection with any increase in international sales efforts, we will need to hire, train and retain qualified personnel in countries where language, cultural or regulatory barriers may exist.  Any difficulties in expanding our international sales may divert management's attention from our existing operations.  In addition, international revenues are subject to the following risks:

As of December 31, 2011,2012, we were in compliance with the financial covenants contained in our Credit Agreement, as amended,credit agreement with Wells Fargo Bank, N.A..  However, in the future we may be unable to comply with the financial covenants in our credit facility or to obtain waivers with respect to such financial covenants.  If such violations occur, the Company’s creditors could elect to pursue their contractual remedies under the credit facility, including requiring immediate repayment in full of all amounts then outstanding.  As of December 31, 2011,2012, the Company had no outstanding borrowings but did have $12,360,000$13,113,000 of letters of credit outstanding under the credit agreement.  Additional amounts may be borrowed in the future.  The Company’s Osborn and Astec Australia subsidiaries have their own independent loan agreements in place.

Our quarterly revenues, expenses and operating results have varied significantly in the past and are likely to vary significantly from quarter to quarter in the future.  As a result, our operating results may fall below the expectations of securities analysts and investors in some quarters, which could result in a decrease in the market price of our common stock.  The reasons our quarterly results may fluctuate include:

Period-to-period comparisons of such items should not be relied on as indications of future performance.

We manufacture heavy machinery, which is used by our customers at excavation and construction sites and on high-traffic roads.  Any defect in or improper operation of our equipment can result in personal injury and death, and damage to or destruction of property, any of which could cause product liability claims to be filed against us.  The amount and scope of our insurance coverage may not be adequate to cover all losses or liabilities we may incur in the event of a product liability claim.  We may not be able to maintain insurance of the types or at the levels we deem necessary or adequate or at rates we consider reasonable.  Any liabilities not covered by insurance could reduce our profitability or have an adverse effect on our financial condition.

We hold numerous patents covering technology and applications related to many of our products and systems as well as numerous trademarks and trade names registered with the U.S. Patent and Trademark Office and in foreign countries.  Our existing or future patents or trademarks may not adequately protect us against infringements, and pending patent or trademark applications may not result in issued patents or trademarks.  Our patents, registered trademarks and patent applications, if any, may not be upheld if challenged, and competitors may develop similar or superior methods or products outside the protection of our patents.  This could reduce demand for our products and materially decrease our revenues.  If our products are deemed to infringe upon the patents or proprietary rights of others, we could be required to modify the design of our products, change the name of our products or obtain a license for the use of some of the technologies used in our products.  We may be unable to do any of the foregoing in a timely manner, upon acceptable terms and conditions, or at all, and the failure to do so could cause us to incur additional costs or lose revenues.

Our hot-mix asphalt plants contain air pollution control equipment and several of our other products contain engines that must comply with performance standards promulgated by the Environmental Protection Agency.  These performance standards may increase in the future.  Changes in these requirements could cause us to undertake costly measures to redesign or modify our equipment or otherwise adversely affect the manufacturing processes of our products.  Such changes could have a material adverse effect on our operating results.

Also, due to the size and weight of some of the equipment that we manufacture, we often are required to comply with conflicting state regulations on the maximum weight transportable on highways and roads.  In addition, some states regulate the operation of our component equipment, including asphalt mixing plants and soil remediation equipment, and most states regulate the accuracy of weights and measures, which affect some of the control systems we manufacture.  We may incur material costs or liabilities in connection with the regulatory requirements applicable to our business.

In the past, we have experienced negative margins on certain large, specialized aggregate systems projects.  These large contracts included both existing and innovative equipment designs, on-site construction and minimum production levels.  Since it can be difficult to achieve the expected production results during the project design phase, field testing and redesign may be required during project installation, resulting in added cost. In addition, due to any number of unforeseen circumstances, which can include adverse weather conditions, projects can incur extended construction and testing delays which can cause significant cost overruns.  We may not be able to sufficiently predict the extent of such unforeseen cost overruns and may experience significant losses on specialized projects.  Additionally, the Company typically incurs substantial research and development costs each year and has historically received significant research and development tax credits due to these expenditures.  While these tax credits have been approved through 2013, they may not be approved for future years.

Our charter and bylaws and Tennessee law contain provisions that may delay, deter or inhibit a future acquisition or an attempt to obtain control of us.  This could occur even if our shareholders are offered an attractive value for their shares or if a substantial number or even a majority of our shareholders believe the takeover is in their best interest.  These provisions are intended to encourage any person interested in acquiring us or obtaining control of us to negotiate with and obtain the approval of our Board of Directors in connection with the transaction.  Provisions that could delay, deter or inhibit a future acquisition or an attempt to obtain control of us include the following:

None.

The location, approximate square footage, acreage occupied and principal function and use by the Company’s reporting segments of the properties owned or leased by the Company are set forth below:

The properties above are owned by the Company unless they are indicated as being leased.

Management believes each of the Company's facilities provides office or manufacturing space suitable for its current needs.  Additionaly,Additionally, management considers the terms under which it leases facilities to be reasonable.

The Company is currently a party to various claims and legal proceedings that have arisen in the ordinary course of business.  If management believes that a loss arising from such claims and legal proceedings is probable and can reasonably be estimated, the Company records the amount of the loss (excluding estimated legal costs), or the minimum estimated liability when the loss is estimated using a range and no point within the range is more probable than another.  As management becomes aware of additional information concerning such contingencies, any potential liability related to these matters is assessed and the estimates are revised, if necessary.  If management believes that a material loss arising from such claims and legal proceedings is either (i) probable but cannot be reasonably estimated or (ii) reasonably possible but not probable, the Company does not record the amount of the loss, but does make specific disclosure of such matter.  Based upon currently available information and with the advice of counsel, management believes that the ultimate outcome of its current claims and legal proceedings, individually and in the aggregate, will not have a material adverse effect on the Company's financial position, cash flows or results of operations.  However, claims and legal proceedings are subject to inherent uncertainties and rulings unfavorable to the Company could occur.  If an unfavorable ruling were to occur, there exists the possibility of a material adverse effect on the Company's financial position, cash flows or results of operations.

During 2004 the Company received notice from the Environmental Protection Agency that it may be responsible for a portion of the costs incurred in connection with an environmental cleanup in Illinois.  The discharge of hazardous materials and associated cleanup relate to activities occurring prior to the Company’s acquisition of Barber Greene in 1986.  The Company believes that over 300 other parties have received similar notice.  At this time, the Company is unable to predict whether the EPA will seek to hold the Company liable for a portion of the cleanup costs or the amount of any such liability.

The name, title, ages and business experience of the executive officers of the Company are listed below.

The Company's Common Stock is traded in the Nasdaq National Market under the symbol "ASTE."  The Company has never paid anya special, one-time cash dividends on its Common Stock and the Company does not intend to pay dividendsdividend of $1.00 per share on its Common Stock in the foreseeable future.fourth quarter of 2012.  The Company has never paid any other cash dividends.

The high and low sales prices of the Company's Common Stock as reported on the Nasdaq National Market for each quarter during the last two fiscal years are as follows:

Selected financial data appears in Appendix "A" of this Report.

Management's discussion and analysis of financial condition and results of operations appears in Appendix "A" of this Report.

Information regarding the Company’s market risk appears in Appendix "A" of this Report under the heading "Market Risk and Risk Management Policies."

Financial statements and supplementary financial information appear in Appendix "A" of this Report.

None.

We have established disclosure controls and procedures to ensure that the information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and made known to the officers who certify the Company’s financial reports and to other members of senior management and the Board of Directors as appropriate to allow timely decisions regarding required disclosure.

Based on their evaluation as of December 31, 2011,2012, the principal executive officer and principal financial officer of the Company have concluded that the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) are effective.

Management’s report appears in Appendix A of this Report.

None

Information regarding the Company's directors, director nominating process, audit committee and audit committee financial expert is included under the captions "Certain Information Concerning Nominees and Directors" and “Corporate Governance” in the Company's Proxy Statement to be delivered to the shareholders of the Company in connection with the Annual Meeting of Shareholders to be held on May 3, 2012,April 25, 2013, which is incorporated herein by reference.  Information regarding compliance with Section 16(a) of the Exchange Act is also included under "Section 16(a) Beneficial Ownership Reporting Compliance" in the Company's 20122013 Proxy Statement, which is incorporated herein by reference.  Information with respect to our executive officers is set forth in Part I of this Report under the caption “Executive Officers.”

The Company's Board of Directors has approved a Code of Conduct and Ethics that applies to the Company's employees, directors and officers (including the Company's principal executive officer, principal financial officer and principal accounting officer).  The Code of Conduct and Ethics is available on the Company's website at www.astecindustries.com/investors/.

Our 1998 Non-Employee Directors Stock Incentive Plan provides that annual retainers payable to our non-employee directors will be paid in the form of cash, unless the director elects to receive the annual retainer in the form of common stock, deferred stock or stock options. If the director elects to receive Common Stock, whether on a current or deferred basis, the number of shares to be received is determined by dividing the dollar value of the annual retainer by the fair market value of the Common Stock on the date the retainer is payable. If the director elects to receive stock options, the number of options to be received is determined by dividing the dollar value of the annual retainer by the Black-Scholes value of an option on the date the retainer is payable.

Information included under the captionscaption "Stock Ownership of Certain Beneficial OwnersOwners” in the Company's 20122013 Proxy Statement is incorporated herein by reference.

Information included under the captions “Corporate Governance—Independent Directors” and “Transactions with Related Persons” in the Company’s 20122013 Proxy Statement is incorporated herein by reference.

Information included under the caption “Audit Matters” in the Company’s 20122013 Proxy Statement is incorporated herein by reference.