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Precision Castparts Corp. (NYSE:PCP)

F3Q09 Earnings Call

January 20, 2009 10:00 am ET

Executives

Mark Donegan – Chairman, Chief Executive Officer

Analysts

Robert Stallard - Macquarie Research Equities

Joseph Nadol - J.P. Morgan

[Unidentified Analyst] - D. A. Davidson & Co.

Ronald Epstein - Bank of America Securities

Cai von Rumohr - Cowen and Company

Eric Hugel - Stephens Inc.

Howard Rubel - Jefferies & Co.

David Strauss - UBS

Robert Spingarn - Credit Suisse

Peter Arment - Broadpoint Am Tech

Operator

Good morning and welcome to Precision Castparts webcast and conference call to discuss its third quarter earnings for fiscal 2009. As a reminder, you may listen to this morning’s presentation and view the accompanying sides in real time by going to www.vcall.com and locating Precision Castparts Corp. in the Investor Events calendar.

Additionally, this event is being recorded and will be available on Precision Castparts website at www.precast.com shortly after the conclusion of the presentation and discussion. Following remarks by members of PCC management, the dial-in access lines will be open for questions. (Operator Instructions)

Now I will turn the call over to Mr. Mark Donegan, Chairman and Chief Executive Officer of Castparts.

Mark Donegan

Thank you operator. I want to thank you all for listening in to our Q3 results. I’m sure you’re all familiar with the forward-looking statement and you need to take this into consideration while analyzing the following information.

As you can imagine, Q3 certainly provided us with a number of challenges to overcome, and we’ll get into the detail on the following pages. But looking at the company in total, we saw sales year-over-year decrease by 3.2% from $1.67 billion last year to $1.65 this year. But as I’ve been saying all along, even with the sales drop we saw operating income increase from just under $372 million last year to $374.6 million this year. And again, with the decrease in sales we were able to see margins expand from 22.3 last year to 23.2 this year.

All this generating EPS of $1.69 per share, which did include a restructuring impairment charge of $0.05 versus $1.72 last year and that restructuring impairment was basically taken in the forging and castings operations.

As I look at the key components and the main drivers beginning with sales, certainly one of the biggest lost opportunities we had was the effect of the Boeing strike which across the company was roughly $129 million in the quarter. Another significant contributor versus last year was the strengthening of the dollar that negatively affected our foreign operations, mainly in the UK by $70 million versus last year and in foraging which we’ll get into in greater detail, it was roughly a $75 million change versus last year driven by a lower, nickel selling price of external sales and the increased internal sales.

Mitigating all this at the sales line, we continue to see strong growth and demand on the IGT side and certainly seem to have extruded pipe again saw a very solid quarter. And on the fastener side, we went into the Boeing strike with a fairly significant backlog and so that was a benefit to us in the quarter also.

On the operating income side, looking at the key drivers for the corporation again surely the lost opportunity was additional levering we would have had from the Boeing volume, and that is really across all of our aerospace operations. And to a smaller degree, on the 29,000 ton press we were able to meet customer deliveries and customer demand, but certainly taking the highest efficiency press and offloading that to other presses, you know, gave us some inefficiencies and we began to see some of the initial costs of repairing that.

And then kind of the last one comparing last year to this year was the negative effects on that lower currency was roughly $14 million on the operating income line.

Offsetting these significant events, I think the operations aggressively responded to the opportunities, so what we tried to do is focus very quickly and rapidly on those items that we could control and we saw good improvements in the items like productivity, scrap and rework material utilization, so we were able to continue to drive that. And again, we’ve only just kind of tapped into the opportunities that are out there.

You’re never happy with the opportunity that you leave on the table, and I would say that’s still with us quarter, but overall I think the operations were able to deliver solid margins and again it’s kind of baseline of where we want to move forward.

Charts that we’ve had in the last couple of quarters on this kind of our sales by market, before I kind of go through with that, in the quarter we did take two non-core continuously eroding auto businesses to discontinued operations. So as a result, we have such a limited number or limited amount of auto sales that we’ve now rolled that into the general industrial.

If I look at the sales now by end market, aerospace generated $53 million, 63% of the sales in the quarter. Power was second at 27% and general industrial, which again now includes the remaining piece of automotive was 20% for the quarter.

Taking a closer look at each segment beginning with investment Cast Products, investment Cast Products even with kind of a headwind saw kind of flat sales year-on-year, from just under

$541 million last year to $541.5 million this year. We saw operating income growth of roughly 3.2% in that flat environment, from $131.6 last year to $135.8 million this year. And we saw margins expand from 24.3 last year to 25.1.

If I look at the key drivers in the investment cast, certainly on the kind of the lost side was the losses of Boeing and that impacted investment cast by roughly $73 million, but helping them mitigate that was the still continuing strong, growing demand on the IGT, where we saw roughly a 17% increase year-on-year.

As we look forward to the balance solely of the calendar year, we do continue to see increasing demand on the IGT side and again the fact that we did complete our facility in the quarter in Ohio, we do need that facility moving forth on the balance of the year. And this was completed on time and to budget. So again I think the team did a good job in roughly 10, 11 months going from dirt to a completed factory.

On the operating income side, again the drivers of the lost opportunity was the additional leverage we would have received from the Boeing volume and going into the quarter we certainly had all the assets and all the resources in place to handle that growth, so we had to kind of overcome that net loss absorption. And again I think it came down to the operations doing a good job of responding and driving productivity scrap and rework to kind of mitigate the offsets of that, and again having a positive impact.

When I look at Q4, and again this is kind of the investment cast but it kind of holds true for the balance of the company, and I see where we are right now, certainly I think the Boeing strike we had anticipated kind of the effects ending in that February timeframe and right now it looks like it will pretty much go through Q4, and we see ourselves kind of back to that normalcy level at the beginning of Q1.

But offsetting that, we do continue to see solid demand in Q4 kind of moving through calendar year ’10 on the IGT growth. I’m going to say this over and over again and you know the number of opportunities we have in all of our casting operations, I mean if I kind of look at what this quarterly review process that we’re in the middle of right now certainly is going to be to extract every ounce of dust and energy that we can get that’s going to drive this.

But you know the good news is at least I think our operating systems really focus quickly on where those opportunities are. And certainly you’ve got a group that’s going to stay focused on that. So I think we do have opportunity in this environment to keep continued to improve our operating margins.

Moving on to Forged , we will get into details as we go through. We saw the sales decrease from just under 9% going from $771.6 million last year to just under $703 million this year. We saw operating income decrease from $169 million last year to just under $155 million this year. And we saw margins basically flat year-in-year going from 21.9 last year to 22 this year.

As I look at the key drivers, again beginning with sales I’ve put into the lost category the effect of the Boeing strike in forgings was roughly $48 million. But if I look at some of the real key drivers compared to last year, the lower nickel and alloy selling price and increased internal sales as I said in effect were $75 million. We have $15 million less in material contractual pass through in the lime and [Gordon] operations.

In currency in the [fording] side, it was roughly negative $37 million. So if I take really last year and compare apples to apples with the same pass through, same nickel sales and the same currency, we would have seen an operation that kind of would have been $830 million range and seeing growth. And on then on top of that we’ve put in the lost Boeing opportunity.

Helping to mitigate kind of those items, we saw another very strong quarter in pipe sales where we grew year-on-year by 65%. The backlog is still holding strong. Our backlog is still in that

$1 billion range so we’re continuing to see both strong output and a strong backlog at this point in time.

If I look at the effects on the operating income, you know again as with Casting certainly there’s the lost leverage when we had the resources in place. And again, in addition to this even though we may not support the customer we did have costs associated to 29,000 ton and again we’re putting product on less efficient, we’ve been moving it to other operations and that had roughly a $2 million impact in the quarter. Kind of a combination of all of those.

And the effect of currency in the quarter, operating income was roughly $6 million. Offsetting these items certainly were the benefits of the additional pipe volume through our Forged complex and again as with [chasms] we continue to see improved efficiencies in terms of productivity, yield, and even though we’re not anywhere near where we want to be certainly the ability to move and tap into a lower revert streams continues to have benefit really across all of our operations.

If I look at Q4 on the Forging side again as with Castings we’re looking really at back to Q1 until we get to the kind of run rate we were as a result of the Boeing. And again in the quarter really this quarter we kind of take the brunt of the 29,000 in terms of qualification costs. We’re going to be running more product across the assets that are not quite as efficient. And last quarter where we basically kind of got the press in the situation where we could do the repairs, we’ll have to do the repairs this quarter.

We expect that to be completed somewhere in the last week of March and looks like now the cost of all this in terms of efficiency and of maintenance and the repair will be roughly

$7 million in the quarter. On the other side, we are seeing stable commodity prices now which at least gives us a good baseline to move off of.

And again, as with Casting, in this environment we still have a number of opportunities to continue to attack margins. So we are by no means tapped out of either ideas or opportunities. And that’s kind of the goal we’re going to go after.

Finally moving onto Fasteners, in general they saw sales increase by 4.1% year-on-year going from $356 million last year to $370 million this year. They saw operating income growth 13.1% year-on-year going from $96.7 million last year to $109.4 million this year. And we saw continued expansion of the margins going to 29.5 versus last year of 27.2.

If I look at the primary drivers in Fasteners, on the sales front the key continues to be the growth in the aerospace side of the business, where we saw an 11% year-on-year growth. Certainly going into the strike we had a very strong backlog. Again I think that kind of the expanding market presence we’ve gotten kind of positioned ourselves well. So in a way we used some of that down time to do some catch-up and were certainly able to offset the Boeing strike from there.

And we also did receive in the quarter some benefit from the date of our closure from both Airdrome and Fatigue Technologies.

On the operating income side, I think the team, Steve, the general managers, everyone involved in those operations continues to do a very solid job of staying focused on both the top and the bottom line. We’ve been getting very solid leverage on the incremental volume driven to the bottom line and they continue to stay clearly focused on the key drivers in their business productivity yields.

The nice thing about the Fasteners side as compared to the Forging or Casting, the investment is relatively low to get incremental sales and I think the team does a very good job of making sure that when they add something, they get the volume to support it.

Looking at Q4 for the Fasteners, at this point in time across the bulk of our aerospace we continue to see solid backlogs. On the flip side, we do see pressure on the non-aero side of the operations as you’d expect from just the overall market.

And as with all of our other operations we do continue to have opportunities. So there again even on the Fastener side of the business we don’t have an operation where I can sit back and say we’re tapped out, either. The thing I think is Fasteners continue to be an area that we’ve worked hard to kind of expand our market presence through our positions and this continues to be an area we’ll continue to stay focused on in moving forward.

And in as with the other ones, even in today’s environment we still have an opportunity to drive both the top line and the bottom line. You know there’s still market share opportunities and we’ve got to stay focused on these as they come up and continue the approach and the attack we’ve done over the course of the last four or five years.

Leaving the operations and now moving on to cash, if I look at where we began the quarter with

$532 million cash on hand, in the quarter we completed three acquisitions with a combined price of $469.5 million. And we ended the quarter with all that with $277 million cash on hand. At the same time, our debt went from $309 million to $312 million. And our primary goal, as I’ve stated a number of times, is to stay positioned with our cash that we can take advantage of these opportunities as they come up. I don’t think these are the only three.

I think there will be other ones there and making sure that any reasonable financial situations we can take advantage of what’s out there certainly is key and was a piece to the puzzle as to why we got some of the acquisitions last quarter.

So, in summary, you’re never happy with what opportunities you leave on the table. But I think the team responded quickly and aggressively to the challenges of Q3. Q4 I kind of stated that, you know, we have somewhat similar effects. The Boeing strike really starts to wean out. It’s not as great as it was. In Q4 we’re probably about 60% of the effect of where it was in Q3 versus where it’ll come in Q4. But the hangover really goes on to Q1 until we’re done.

We will not have the 29k press back in operation until really the last week of March. So again we’ll face inefficiencies. I kind of went through the costs. But we’re able to meet the customer demand.

So again I think the team has done a very good job and we were prepared in case of this press outage to where we’re going to move the products, how we’re going to move them, and we were prepared that two major columns snapped and be back up and running at the end of this quarter. Again at least from the standpoint our contingency plans have certainly been executed. You wish we never had to execute them, but they were in place to do what they needed to do.

In Q4 we do have more manufacturing days which will get the benefit of increased leverage and we will get the benefit of our restructuring that was basically a workforce reduction in terms of severance. And where we had been gearing for really the growth coming into ’10, looking at more of a flat aero and a growth in IGT, we took out roughly 450, 500 people. And we’ll sort of continue to stay focused on all of the cost drivers.

Looking beyond Q4, again at this time for us, our aerospace sales appear to be relatively flat to Q2 levels. We continue to see growth in IGT, and there are two drivers. We continue to see growth in our kind of our base customer business and the work we’ve done over the course of the last year-and-a-half of expanding that customer base, getting those new tools in, will play key in being able to continue to grow as we look over the next 12 months.

And it seems extruded pipe continues to be an area of opportunity. As I said the backlogs are still holding strong. And then in our non-aerospace, we do see and are getting traction in our non-aerospace opportunities. So we still see areas you know of growth kind of in our non-aerospace world.

You know, and I’ve stated again and I kind of want to finish with this, you know, we have a manufacturing system that you get one page out of 24 that says, you know, what you did and the next 23 pages kind of attack every opportunity that’s left on the table. So certainly this transition that we’re going to be going through will be to extract every ounce of energy that we can, and stay focused on the opportunities.

You’ve got a management team that understands clearly where we are, what the challenges are, and what we need to do. I think you have a team that’s also demonstrated that this is kind of the time that we step up to.

So with that, that’s all I have, and we’ll open it up to questions.

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from Robert Stallard - Macquarie Research Equities.

Robert Stallard - Macquarie Research Equities

Mark, first question on margins. The zero margin pass-through coming down, how much of a benefit was that in this quarter? And how much of a benefit do you see that going forward?

Mark Donegan

Well, there’s roughly $15 million – excuse me, $19 million of zero margin. So you know in terms of the whole, you know, ratio in mathematics it’s relatively insignificant. Most of the margins that came through was truly productivity operational improvement.

Robert Stallard - Macquarie Research Equities

And given what the nickel price has done, presuming it’s a lag effect with the pass-throughs, you said this could be a [pulsive] trend for margins since that –

Mark Donegan

Yes, it will be, but again it takes a while to unroll it. You know, there’s a number of overlaid hedges in material out there, you know, that kind of our customers have done. So it will take really the next six to nine months to kind of unravel and get to the kind of levels we’re at. So we’ll kind of be either this number or a little less is what it will feel like moving forward for quarter.

Robert Stallard - Macquarie Research Equities

And you mentioned the three growth areas – gas turbines, the pipe and non-aerospace nickel sales. Has the same or do you think the growth in these areas is likely to be given the economic pressures that are going on around the world?

Mark Donegan

Well, you know, I can only go by what I have in front of me right now. But you know again, if I look at the biggest piece of the puzzle, certainly the [same] in pipe that backlog has stayed there. And from that standpoint, you know, I think that’s a good indication. When we tend to get into it, you know, there are plans that are identified and we kind of attached to a specific application. So I think that put in move in or around a little bit, but again we have a – but depending on our backlog, we have a couple years of load sitting in front of us.

So I think that’s going to pose pretty well. On the IGT side, I think that the fact that we have really worked hard over the course of the last year-and-a-half to make sure that we kind of cover all the customers is the key part of why we’re going to be able to keep growing to the question next year. So we’re going to be basically getting share that we didn’t have over the course of the last two or three years. So again I think that’s a key piece of the puzzle.

So I feel good from the standpoint that there’s enough there between our base business and the increasing share in the new customer base that we can kind of sustain that. And then on the non-aerospace, kind of the SMC side, some of the areas we’re seeing good traction. And again, when you’re looking at 20% market share even if the market falls off, there’s still share to get. So you’re not in an environment where we get 85, 90% share and you’re chasing 1 or 2% and then when the market rolls over, you’re going to feel the effect of that.

You know, the market can fall off 15, 20% and we still should have opportunity to grow. So that’s a little different than structural Castings that kind of has a large source of Castings and a fairly solid market position. So we’re probably more susceptible saying whatever the market does, we’re going to do. So on that SMC side, I think that there is continued opportunity to grow, even if the market would shrink, we still get a share of percentage to go get.

Robert Stallard - Macquarie Research Equities

You have some changes in your divisional heads this year. Has this required a change in your allocation of time? Maybe you’re spending more time with the operations and less looking at strategic stuff and [M&A]?

Mark Donegan

No, no. We – the system the way it works is it takes basically nine to ten weeks of my time, period. And if I look at some of the people that have stepped up significantly, I mean, Ken Buck who’s basically taken over the Forging group I think has demonstrated that he understands clearly what the task is. Ken and I worked together for years. Ken probably feels like it’s been two lifetimes. But so the fact that, Ken now, I mean he and I know how to operate.

So it’s not as though we’re kind of dealing in an environment where okay, we’re going to feel each other out; we’re going to figure out where we are. I mean, again I’ve said a number of times, this is a full contact sport here and it’s an easy transition from there. You know, what’s actually interesting is I get to spend my time with Ken is I get to spend time not over and above operationally, but kind of working with him on strategic. Where are we going to go? What’s it look like? How are you going to look out through the years?

So it’s almost the reverse, that I spend more conscious time with the changes. Where are we going to be? What does two years look from now? What does five years look from now? What business makes sense? What acquisitions are out there? And then kind of educating that. But the operational time, it is what it is. It doesn’t take a whole lot more time from there.

On the flip side, in terms of the acquisitions or the strategic, we know where we’re going. We know businesses make sense. I’ll take Fatigue Technologies. That was a two-and-a-half year transaction. So I think the fact that we surgically know what makes sense for us and where we want to go sometimes feels to the outside world that jeez, they don’t have ideas or they’re kind of not knowing where to go. We know exactly where we’re going to go, but we know what it looks like, what it feels like, what the price, what the multiples and kind of all that piece of puzzle is.

I think it’s being patient that does that. So to answer your question in a roundabout way, no, it’s not taking more time. And I like developing people. It’s kind of the fun part of the job.

Operator

Your next question comes from Joseph Nadol - J.P. Morgan.

Joseph Nadol - J.P. Morgan

My first question, Mark, is on the Forged margins which were really snapped back in the quarter relative to what we’ve seen the last couple. I guess if we look at this sequentially from Q2 to Q3, I’m just wondering if you could give any better sense as to why we saw such an improvement. Was this really the revert situation or was it elsewhere?

Mark Donegan

Well, I think you had a couple of things. Number one, you know, Q2 certainly is its own challenges. I mean, when you take these presses down, you know, as we planned to do, there’s a huge cost associated with that. Not only the maintenance cost, but when you bring down a 29 and a 50,000 ton press, you lose a lot of lost leverage. So again I think some of the Q2 is certainly a relationship of that.

What I would add to that though, and this is kind of a general rule, Joe, for all of the operations when you find yourself in an environment, you know, when you’re accelerating sales, you’re going double-digits, a lot of times you’re chasing. You’re bringing on people, you’re hiring, you’re training, you’re working overtime. What I feel as though my goal is and these operations goal is right now is to clearly understand that kind of that is not the game we’re playing right now.

The game is to identify very quickly where it is, what’s there, what productivity and in the case of Forging what revert streams are there, and we actually now are breaking out every single pound of material that we pour and watch our revert, how much we get, and what do we approve. Were we short? And we’re scouring the world for that particular material. So you kind of become a scavenger is what you become.

And my goal, and I think we started delivering it in Q3, is to make sure that we don’t just look for the big things, that we get all of them. So it’s a combination of everything. It’s a combination of Q2 being a tough quarter doing the repair, and then moving into Q3 where I think the operations did a good job with striking the value, and then having things like revert and all that. So I don’t think it was one thing, I think it’s kind of a combination of both.

Joseph Nadol - J.P. Morgan

On the $75 million of headwind on in-sourcing and pricing on the special metals side, could you break that down into the two components? And it was down from last quarter which I believe was an $85 million headwind. Just wondering, given the accelerating decline in nickel why that was lower.

Mark Donegan

Yes. It was 59, basically, was the delta of the external nickel price and roughly 20, 21 was internal. I’m not sure what the other piece of question is. Nickel is pretty straightforward. It’s just the price of nickel coming down. So ask the second piece of your question.

Joseph Nadol - J.P. Morgan

Well, the rate of decline in nickel actually accelerated during the most recent quarter relative to the prior one. I think the year-over-year decline was more like a two-thirds decline, whereas the previous quarter it was more like a one-third decline. And so I was just wondering why that didn’t impact the numbers even more

Mark Donegan

It’s just going to be a kind of a delta change to where the price was the year before. I can’t –

Joseph Nadol - J.P. Morgan

Could be the lag effect goes in there, that I’m not capturing.

Mark Donegan

That is all it is. It’s just kind of a mass formula.

Joseph Nadol - J.P. Morgan

And then on the pipe, you mentioned very strong backlog, around a billion still. Just wondering if you could give any color as to the security of the backlog, to what degree do you have deposits? Who’s in there? And how good do you feel about the – can that backlog disappear?

Mark Donegan

We do not have any deposits. We certainly have orders that the customer is required to take. There would be termination charges or cancellation charges. So there are things like that. The bulk of the work is still going to China and that’s where the bulk of the work is going today. Could there be some softening? I probably wouldn’t be in my job unless I said, “Yes, there could be.” I think that the backlog is so substantial that at least we have the opportunity. It’s kind of like we over-booked.

We wouldn’t be able to sell pretty much what the customer wanted, had they taken everything. So I think we do have some room in there, if there is some softening, that we can still kind of support our growth needs without kind of struggling at that point in time. They get up to see a significant, significant retraction in terms of the power needs of Asia/China that you see them really throttling back of where we see okay, it’s going to start impacting us like right now.

Joseph Nadol - J.P. Morgan

And you certainly have seen significant declines in power generation in China, and I guess we’re all expecting to see a little bit more softness. Just surprised to see the continued strength in the business, but –

Mark Donegan

Like I said, we had been overbooking and then we actually stopped overbooking. And so I mean, I think there’s still a lot of opportunity. And again, I think that group of people, so I think the whole team down in Houston and Livingston and really that whole power side of the business continues to do a really, really, really good job of finding additional places to go, kind of expanding and attacking every market opportunity.

So it’s not as though they’re just sitting back, waiting for the phones to ring. I mean it’s an aggressive sales group that’s over there that knows your market extremely well. Again, I think there’s still opportunity to continue to move from that standpoint. So it’s not as though we’re getting 100% of the market. We have to build up market share to get 2.

Joseph Nadol - J.P. Morgan

You did three acquisitions in the quarter. They’re a pretty good size net net, almost half a billion. Any more detail on the financials that you can give at this point so we don’t have to wait for the 10Q, just in terms of I guess sales multiples and relatively speaking which of these were larger than the others? And any inclination on margins?

Mark Donegan

I think the multiple range that we’re in was certainly on the lower side of where we set our targets for, so obviously we’re 8 to 9.5. I think we’re certainly on the lower, lower side of that. The largest one in terms of sales was Hackney Ladish was probably the largest one, followed by Fatigue and then followed by Airdrome.

If I kind of give a little more color to them, Hackney Ladish opens up a market that we haven’t been able to shift to today, so if you look at their product offering it kind of goes into an area we don’t. And kind of the value to us that we saw is as I said on our power side with our alloys we basically go outside today to buy all that. Certainly over time we’ll be able to move Hackney Ladish into those alloys and be able to either eliminate buying them on the outside or offer additional products.

And Fatigue Technologies has got a tremendous engineering solution to a lot of problems. So a lot of where our Fasteners go, they do work kind of to prep the hole and then subsequent to that if an airline or either Boeing or Airbus, whoever is facing problems, they come in with quite a bit of solutions. So it’s a great business in terms of not only OEM [bell] rates but continuing to find solutions. And certainly as an aircraft ages kind of plays well from that standpoint.

And the last one, Airdrome, again it’s just kind of moving further down the road and into the Fastener market. That fittings market is about a $250 million. They’re probably tied for first or second. So the market’s kind of broke up into three or four pieces and that kind of gives you an idea of where their sales are.

Operator

Your next question comes from [Unidentified Analyst] - D. A. Davidson & Co.

Unidentified Analyst - D. A. Davidson & Co.

Are you guys still running about $5 million on 787?

Mark Donegan

No, we’re pretty much – if I look at last quarter, we’re pretty much at a standstill on 787.

Unidentified Analyst - D. A. Davidson & Co.

And per ship set as well?

Mark Donegan

Per ship set, yes, we’re probably a little more at the $5 million now.

Unidentified Analyst - D. A. Davidson & Co.

And are you guys seeing private companies valuations become more realistic?

Mark Donegan

We are. Again, if I look at some of the – so if I look at kind of again where I answered the multiples certainly on the lower side kind of what we’ve seen over the past. And if I look at our Cast position that enabled us to get in and get Hackney Ladish. We had looked at Hackney Ladish in the summer. The multiples were too high for us. Kind of fell out of it. As the financial crisis hit, the to the best of our knowledge, the existing deal kind of fell apart quickly and our ability to have cash on the balance sheet kind of let us step in and get kind of a very reasonable deal done in a short period of time.

Yes, I think we are seeing more reasonableness come to the whole transaction world. And again the fact that we have cash, it’s kind of nice to be able to stand look at an acquisition and say we can do the deal and we don’t need to go out and try to raise financing. I think that will tend to hopefully play key moving forward, too.

Unidentified Analyst - D. A. Davidson & Co.

I was wondering if you guys could comment on how you’re seeing the [back streams] in the auto divisions switch to aerospace?

Mark Donegan

The ones that we took the discontinued on the North American side were the ones we’re going to do that. What we actually found is it was actually cheaper and faster for us to go ahead equipment into our existing to get the qualifications. So that’s really what was the key driver for us to kind of say we’re going to take those into discontinued operations.

On the Brazil side it’s a different story where we have [Embry Air] that’s certainly appears to want to have a Brazilian manufacturer. So it is truly a we want to get our Fasteners manufactured here, so I think in the long haul that is a business that does extremely well in the automotive world and has the opportunity and the technology to support Embry Air, and that’s kind of the role we’re moving. So that’s kind of the one that still is out there playing that will move into the aerospace from the automotive.

Operator

Your next question comes from Ronald Epstein - Bank of America Securities.

Ronald Epstein - Bank of America Securities

Can you dig down a little bit deeper in the Fastener segment because the margins were pretty fair to good. Is that sustainable at that level? Was there any one-time things that happened during the quarter? And what do you do in that business to keep them at that level?

Mark Donegan

Well, in answer to your question backwards, no there’s nothing that happened that was a one [off]. I mean there was operational performance out of those. I think the one thing that that team just does and I think as a company we’re pretty relentless. And I take great pride in that. But I think that entire team is kind of like the height of relentless. So they really do a good job of being extremely stingy and adding capital. They make sure that they’re utilizing across all other operations.

I think in the past we probably if Jake in town needed something, we probably wouldn’t have had the capacity. I think Steve and the team look very clearly and say can [EIC] do it? Can TJ Brooks do it? I mean, we had a situation where AIC was kind of falling behind at Boeing and we worked with Boeing to get TJ Brooks qualified to do the heading which is where we’re really struggling getting past in AIC. They handed us blanks, sent them back over to AIC to finish. So I think they’ve done a very good job of utilizing the assets across all the business.

Fortunately they’ve added very, very, very little capital. And I think that’s probably been a key piece. And then what they have added, when we bought the business five years ago, they did a good job of identifying for instance we took out some older equipment and were able to put in new machining lines so they’re getting three, four, five times of [inaudible] with the same employee basis. So I think that they’ve done a good job of identifying what they need to be cost competitive and are able to do that.

So it’s kind of a combination of all that. There’s nothing that was a one off.

Ronald Epstein - Bank of America Securities

If we do end up in a more prolonged economic downturn, how would your strategy change?

Mark Donegan

Well, I think it doesn’t change to some degree. I mean, if I look – I kind of came in – we used to talk about the quarterly reviews quite a bit. But I came into these quarterly reviews understanding they were going to be one gut-wrenching process for me and for all the people I was going to be associated with, because I was going to shift the blame from one of growth to one again from hunger and saying we’re just going to get everything.

So you shift in identifying every single solitary opportunity, so operationally I think that that shift is occurring very quickly and kind of saying hey, listen, this is what the expectations are. We still have opportunities. We’re not going to sit back and be a victim. We’re going to drive the value. So that is one piece of the puzzle that we’re changing.

That would kind of carry us through to a 10%. I think that certainly carries us very well through that timeframe. The other thing that changes I think we circle back around from an acquisition standpoint, and we keep kind of touching those businesses that we think makes good sense for us. We get cash, a little cash on the balance sheet. I think there’s some great assets that are out there. I think we look at an opportunity to continue to grow and expand our presence.

So those are probably the two things that I’d say that would change. They aren’t that different. It’s just how we utilize that toolbox. We’ve used the toolbox probably in the last three years probably to respond to the growth and hitting the kind of cost side would be second. And I think we split very quickly to say we’re going to attack the cost side and that’s where the bulk of your energy and your assets go to.

Ronald Epstein - Bank of America Securities

In the last downtown in the Forging business, the margins suffered worse than some of the other businesses. Would you expect that to happen again or I mean do you have tools in your toolbox now where you can address that in Forging?

Mark Donegan

Well I think that that’s certainly where we face the biggest challenge. You know, it’s the most capital intensive piece of the business. There’s very little variable in there. But I think that we also have the fact that we have an S&C that has opportunity to grow. Again there’s very few elements to their market that I would consider they’re a dominant market player. They’re one of two or three. They’re 20, 25% market share. Although I do think there’s opportunity to go and attack the market, but it’s always there we’re going to face the biggest challenge in.

But I do think we have at least more leverage to pull this go-round than we did the last time. And we have pipe. We didn’t have pipe nearly the size it is right now. I mean, pipe was just beginning to get its traction during the last downturn so we have a really, really big piece of the puzzle right now that we didn’t have the last time. So the last time we were basically kind of an aero disk, landing gear type of company. Now we’re an aero disk, landing gear, pipe, extruded shapes, flats, rounds, plates, sheet, bar, chemicals – so we have a lot more leverage to pull.

It doesn’t mean the challenge – it’s not as though we’re not facing a lot of challenges, but at least we have the opportunity to do something about it.

Operator

Your next question comes from Cai von Rumohr - Cowen and Company.

Cai von Rumohr - Cowen and Company

FX, you mentioned $70 million. You told us where 37 is. Where’s the rest of it?

Mark Donegan

It was $37 million in Forged, it was $20 million in Fasteners and it was $13, $14 in Castings.

Cai von Rumohr - Cowen and Company

Could you tell us what were foreign denominated sales in the quarter? And what are the key currencies? I assume the pound is the biggest, but –

Mark Donegan

I can’t tell you the first question, but if I look in order of importance certainly the dollar to the pound is number one, the dollar to the euro was number two and the dollar to the Australian was number three. Those are the three primary drivers, but the pound is by far the biggest piece of the puzzle.

Cai von Rumohr - Cowen and Company

So this is going to be another impact in the fourth quarter because those currencies are probably south.

Mark Donegan

Correct.

Cai von Rumohr - Cowen and Company

And it looks like you’ve got pretty much of a full flow through of your margins, so it doesn’t have a real margin impact.

Mark Donegan

Correct. Depending on the business, but I think your statement was certainly true for last quarter.

Cai von Rumohr - Cowen and Company

And then if we go back to M&A, by my numbers it looks like Hackney and Fatigue are about

$150 million in sales roundly and therefore you know looks like you paid over two times sales. Is that correct? And if you paid eight times, therefore their margins are substantially higher than yours. Is that –

Mark Donegan

I’m not trying to dodge your question. I don’t look at what it is for sales. I can tell you that we paid less than eight times, so I think the second piece of your puzzle is probably a more accurate assessment.

Cai von Rumohr - Cowen and Company

But I mean anyway it looks like these are solidly profitable businesses, and your prior acquisitions have essentially been buy mismanaged companies and –

Mark Donegan

No, no, no, no. I would disagree. Certainly if you look at mismanaged some of the previous management may have a problem with that. Certainly operations that we think we can extract more value. I would say that’s true for SPS and SMC, but if you look at an AIC, a Cherry, no, they were very profitable, very well run. I think we improved them but no, I think the basic platforms we get your scenario would hold true.

But the tuck-ins I would say the bulk of the tuck-ins tend to be fairly profitable, you know, kind of in line with what they do and then we’ve been able to accelerate them from there. But no, I wouldn’t pay AIC, [Sherlock], Cherry, AFT in any of those categories. They’re all pretty comparable on how they were run at the time we got them.

Cai von Rumohr - Cowen and Company

Any [life-o] adjustment impact in the quarter and any expected in the fourth?

Mark Donegan

Yes, there’s some income. As material prices come down, we pick up some income. So as that unravels again on the way up we had headwind and on the way down we kind of get the benefit, so as that continues to unravel over the next three, four quarters we’ll pick up some. But it’s not huge. It’s not a massive number.

Cai von Rumohr - Cowen and Company

Can you quantify it approximately?

Mark Donegan

No.

Cai von Rumohr - Cowen and Company

You mentioned kind of general industrial. Can you give us some color on some of the industrial businesses? A, how much was auto down? And B, what other businesses got hit? For example, the powdered metal business that goes to medical, I assume that’s been seeing some weakness.

Mark Donegan

Yes, but the bulk – let me try to answer the best I can. If I haven’t answered, you can swing back around, but certainly the ones that got hit the hardest on the recap, certainly the hardest still falls under the metal act which is down in Brazil probably took a 25, 30% whack year-over-year. That was kind of the [digitally] an automotive market. J&L which kind of does the pulp and paper was flat to down a little bit.

AFT which is a powder metallurgy is kind of a significant automotive. It basically injects turbo-charger vein segments, is its primary market. That was probably down double-digits as driven by, and then the last one is SNS which relates of course to automotive and the kind of the mining world was in that 15 to 20% down. So those would be the key drivers. But again in terms of the overall sales, they’re not a huge, huge number but they were down.

Operator

Your next question comes from Eric Hugel - Stephens Inc.

Eric Hugel - Stephens Inc.

I just wanted to clarify with regards to next year with regards to your auto exposure, you’re not calling necessarily for flat year-over-year, you’re just calling for flat in comparable to your 2Q results. Correct?

Mark Donegan

Well, let me kind of rephrase. When I kind of break from the categories, right now aerospace for us looks flat to Q2. IGT continues to show growth. And the automotive probably is going to continue to show some softening from Q3, but I think the biggest whack we took was certainly Q2 to Q3 where probably we were 15 to 20%. You probably looking at something off of Q3 kind of more in the single-digit type of number.

Eric Hugel - Stephens Inc.

But if you’re looking at auto, and really aero as we go into the back half of the year, I guess you’re really talking about aero because of the Boeing strike being down, something like a little over $200 million. Right? You should be up relative year-over-year because the back half is going to be a much easier comp. Correct?

Mark Donegan

Again, let me try to answer what I think you’re asking. If I kind of look at the way the year, we had Q1, Q2 we grew. And then we fell off Q3, Q4 the Boeing strike is not as big but it still will be down from Q2. And then Q1 feels like Q2 and that’s kind of the level that we see Q3, Q1, Q3 moving forward.

Eric Hugel - Stephens Inc.

Can you tell us about the organic sales growth for the quarter?

Mark Donegan

Well, the only – the combination of – I know what it is for Fatigue and Airdrome. I’m not sure if I know what Hackney Ladish – give me one second. There was roughly $20 million of acquisitions in Q3 and everything else would have been kind of what happened organically.

Eric Hugel - Stephens Inc.

Can you talk about your CapEx plans for this year, next year? Is it still around $200 million for this year and what are you thinking at?

Mark Donegan

I think $200 million probably is the high side at this point in time and I’m going to be one stingy Jose’ come next year. I mean, we will do what we need to do to keep our people safe and to support our customer, but we will make sure that it has a very reasonable, quick payback. So I would expect capital to be down next year versus this year.

Eric Hugel - Stephens Inc.

Any improvement since 787 sort of consistency as a build rate? I’m sorry, in the 8380?

Mark Donegan

Not really. It looks like probably June-ish of this year is when it kind of gets some stability to it. We are getting some effect, but it’s kind of hit-and-miss, hit-and-miss.

Operator

Your next question comes from Howard Rubel - Jefferies & Co.

Howard Rubel - Jefferies & Co.

First, you talked a little bit about the start up challenges to Plainsville. On the other hand, it doesn’t look like they were very big and going forward how do you see those costs falling?

Mark Donegan

I think that what we did is in Q3 we basically finished the build. That’s when we were supposed to finish. We had minimal, minimal - $1 million of sales go through there. But we had the costs in there. So what should happen now is over the course of the next two or three quarters we should start ramping up and then better absorbing those costs. But we did actually have the costs that were in there. We had to bring the people on, we had to train them. We had to bring the equipment in.

We had to run the place. So we were actually had the resources to qualify the assets. We’ve done that, so we’ll be moving into production Q4 and then moving beyond.

Howard Rubel - Jefferies & Co.

You used Hackney Ladish I think as a means of taking some of your mill product and running it through some of – I mean, it’s an output for some of your mill product. I mean, is that a fair way to think about it?

Mark Donegan

It is not today. They don’t do those alloys that we do. And again, as we look at future synergies, certainly doing what you suggested is a key piece of the puzzle. So taking either our mill products out of the S&C side of business, or taking some of the pipe that we’ve extruded in Houston and then putting a bend or a T into it, that would be the next step for them.

So today they’re not taking, because they don’t do a lot of the higher nickel, but that would be our goal over the course of the next 12 to 24 months would be to move them into that higher end to support that. So no, in the past; yes in the future to your question.

Howard Rubel - Jefferies & Co.

With respect to pass through revenues overall, I mean they’re coming down gradually. If we saw prices just stay where they are today in terms of commodities, and I know there’s some that are off as well as down, do we saw another – I mean, is it $15 million or $20 million a quarter that it erodes? Or do we see one quarter out there where it’s down maybe double that and then stabilizes?

Mark Donegan

It’s going to take another three quarters or so to unravel. And as you approach the unraveling, it will get tighter and tighter. So basically you can kind of take the dot where we are today, move it up three quarters, and it’s somewhat a linear type of progression, assuming no change.

Howard Rubel - Jefferies & Co.

Last on scrap, you emphasized that in a number of cases as really being a meaningful change. Are we talking by cutting scrap costs by a third?

Mark Donegan

No. I mean, scrap for us is still a big number. Again, proportion – as a percent, it continues to come down but as hard dollars it’s still a significant opportunity, and especially on the Casting side of the business. We probably picked up a 8, 10% improvement over where we were, but it is still a big number.

Howard Rubel - Jefferies & Co.

I’ve recognized it’s a nice, fat, single-digit number and it’s just given the impressive results in Forging, I thought that some of it – you’re really saying no, there’s also opportunities –

Mark Donegan

No, it’s there, but again it’s hard for me to see the benefit we get because the only thing I see is the negative. So like I said, as a – I hope none of my people are even hearing this conversation. I think they did a good job of bringing it down, but it’s still such an area of opportunity for us. There’s just no other way to put it.

Operator

Your next question comes from David Strauss – UBS.

David Strauss – UBS

Mark, the latest 787 delay, how does that impact you and maybe just talk about some implications if we get another delay beyond this one?

Mark Donegan

Yes, kind of what today if I look at the numbers, what it looks like to us again is kind of going back to what I’ve been saying Q1, Q2, Q3 have in the aero world today looks flat to kind of where Q2 is and then with kind of the latest announcement is we start seeing in our Q4 of next year, so January, February, March we start moving into supporting a build rate. So with the latest information we have, that’s kind of what it looks like as we’re basically zero, zero, zero, Q1, Q4, Q1, Q2 and Q3. So a year of flat, of nothing on this 787 and then we start picking it up in Q1.

And then based on what the ramp up rate is we would accelerate at that.

David Strauss – UBS

So your aero plan non-787 knows to get back to pre-strike rates in Q1 and then just hold there.

Mark Donegan

Correct.

David Strauss – UBS

Could you just give us an update on S&C and how much is going internally at this point and how much of [inaudible] and Gordon’s needs are being met through S&C?

Mark Donegan

They’re probably doing 60%-ish of Wyman’s needs are being done by S&C.

David Strauss – UBS

And then on Forged, you had talked to us about –

Mark Donegan

Excuse me, Dave, while on that that would be bill it. Obviously our internal sales continue to grow substantially in the revert side of the business where we support Castings, we support air foils, structurals, Fasteners, in the revert side. So the count ability side of the business and the Greenbelt metal side, but on the S&C side bill going to Wyman Gordon we’re about 60%.

David Strauss – UBS

And then Forged, you had talked about once we got past the Boeing strike, kind of resetting to Q1 levels. But we were basically there in the third quarter. What are you thinking about? Is it fair for us to kind of bump our expectation once we get back to –

Mark Donegan

The only thing I would add to that is I think your statement would have been true, but we’re going to face the headwind of the press this quarter, so we only had $2 million last quarter. We’re looking at about $7 million this quarter, and they still have some of the currency in there that they’re going to have to overcome. So I’d say that you probably need to reset kind of Q1 because we can’t do anything about that 29 being down.

David Strauss – UBS

I guess I was talking more about when we get to Q1 and the press -

Mark Donegan

I think certainly there’s an opportunity to reset there, yes.

Operator

Your next question comes from Robert Spingarn - Credit Suisse.

Robert Spingarn - Credit Suisse

On your M&A when you talk about eight times, is that a forward number assuming you’re synergies or is that?

Mark Donegan

It would be current number operating. That’s kind of what we say. So we do not – when we do those calculations, we do not include synergies. Never have, and we would avoid that at all costs.

Robert Spingarn - Credit Suisse

When you say current, is it forward or trailing?

Mark Donegan

It would be a three months past, three months forward. It would be kind of a six month snapshot surrounding where we were.

Robert Spingarn - Credit Suisse

Then on the pipe, which you already talked about being predominantly in China, how much is that pipe business exposed to a single customer?

Mark Donegan

Oh, it’s not just a single customer. We spread over a wide array of customers, a wide array of design [inaudible] so it’s not a single person. I don’t know the exact number of that, Rob. I’ll tell you what I’ll do, I’ll be down in Houston – I’m leaving right after this call, so I will if it’s okay with you I’ll have Dwight get back to you on that. How many customers we kind of support in that China, because I don’t want to give you a flippant answer on that.

Robert Spingarn - Credit Suisse

Okay. And then just going back to the last what David was asking on the rates, should we think about when you say aerospace is relatively flat, you’ve already talked about quarter-versus-quarter and those comparisons, but as 787 ramps and I was trying to follow the timing on that, you said in the release you’re six to nine months ahead of Boeing? On the ramp. Boeing is going to start delivering in the beginning of 2010 or at least that’s their latest plan, on a calendar basis. So does your ramp, assuming it starts this coming summer or fall, which I’m tying in on that basis – I don’t know if that ties to what you –

Mark Donegan

The only thing I would add to that, and again there are sets that are out there, so I think to us what we’re seeing of the customers and everybody bouncing off what they have, what the scrap was, what their initial trials were, we show the demand kicking in in our Q4 fiscal ’10 is when we start seeing kind of that growth rate re-accelerate. Assuming the flat rate on the balance of the business, 787 kick in, that’s when we start re-accelerating again.

Robert Spingarn - Credit Suisse

So your ramp is really when their starts, just because of the terms of where the inventory is.

Mark Donegan

Correct.

Robert Spingarn - Credit Suisse

Does that to some extent in your discussion about flattish going forward, does that to some extent offset any expected weakness in triple 7 and 737?

Mark Donegan

That’s the $50 million question. If the – if I take what’s out there today, and again we don’t have a whole lot of inside privy, pretty much the information you have. So if we take what Airbus has announced, which basically says the narrow bodies today stay flat through calendar year ’09 and today they’re saying through calendar year ’10, and the wide bodies grow and I think it’s the 380 grow through calendar year ’09 and flatten out in ’10, and assuming Boeing gets back to the pre-strike level for this, I think the timing works out very well.

If there is any softening in ‘010, I think now the 787 starts to kick in and do exactly what we wanted it to do. If there’s any change to ’09, actual bill rates, the 787 wouldn’t come in in time to rescue it or if the 787 gets another six, nine month push-out it may not be. But right now, the way it overlaps, it looks as though the timing could work out well for us. But there’s a lot of ifs in there.

Robert Spingarn - Credit Suisse

So it would be fair to conclude that you see a possibility that rates in the core lines could come down.

Mark Donegan

I can only go with the data there is, so right now I tell you that a race we have what the customer said for calendar year ’09, we’re okay. And the way it looks like it fit us in. But I’d be – again, I don’t have any great insight any more than you do. I watch the news and read reports and all that, but today what it feels like at least the data we have and the schedules we have support kind of that flat, flat, flat growth Q4. That’s kind of what the schedules support today.

Robert Spingarn - Credit Suisse

And then just a sort of similar question on IGT, GE talks about modest growth, but I think there’s some uncertainty as to whether the energy CapEx is out there to support that. And you mentioned share gain before. So is your growth coming on the OE side where you’re gaining share? Is it coming from unit volumes rising in G or is it spares?

Mark Donegan

It is today a combination thereof, but what we have is we have enough of an expanded customer base that we can support even flattening or softening to some degree and kind of have that expanding customer base coming up and the market share gains we’re getting will certainly give us growth curve at this point in time. Now, if it rolls over, we’ll have to look at that point in time. But again, the schedules we see today it’s a combination of. There’s some spare parts, it’s – the program is GE is winning, it’s new share with [Seimens], Westinghouse, [Austin], so it’s kind of a blend of all that.

And again, the fact that we have that expanding customer base is kind of a nice backdrop for us.

Robert Spingarn - Credit Suisse

Is it fair to say there’s kind of a silver lining for you in this – in a pressured economic environment where you’re more likely to take share because you might be in a better position to concede on price?

Mark Donegan

Well, it’s hard to say there’s a silver lining anywhere right now. What we as a company try to do is we try to drive our operations operationally and then if we have an opportunity to take a longer term look with our customers and there’s an opportunity there, and we can again drive the cost structure down, yes. History says that that’s kind of the platform we’ll do.

Robert Spingarn - Credit Suisse

Because I would think that now is the time when customers are generally asking for more help than they might have been a year or two ago.

Mark Donegan

That’s a true statement.

Operator

Your last question comes from Peter Arment - Broadpoint Am Tech.

Peter Arment - Broadpoint Am Tech

So quickly, Mark, you know you have evidence by your margin performance you’ve got this toolbox on productivity and attacking the cost side, can you talk a little bit about headcounts and basically provide us some more color by segment how you’ve gone about previous downturns adjusting that or right sizing that to the business?

Mark Donegan

Yes, let me kind of break it out. If you kind of look at the variable piece, the headcount piece, certainly Castings has the largest number of employees. Again, based on the work and what it is, it’s kind of the way it works. And then you kind of go Fasteners would be next and then Forging would be the last piece of the puzzle in terms of kind of the variable piece. So from that standpoint, we look at very, very excruciating detail in sales per employee, salary, hourly. We look at productivities. We look at labor utilization by department, by area. W

We make sure that we are adjusting and we pretty much take a 16 week rolling forecast as to what that looks like. And then we if we see any sustained patterns, we’ll kind of move effectively. Like I said we took about 450, 500 people out of roughly 22,000. I think what we did is we adjusted fairly well. We have been gearing for the growth, again if we go that Casting where we’ve got to bring on people six to nine months ahead of time to handle the growth.

So I think the last kind of snapshot that we did was to readjust to kind of what we see today. And that was what that is. But it’s just – and then on the flip side, on the human capital side of the fix, we certainly start off at the baseline and say okay, that’s variable too. And we need to make sure that every fix, myself and every person here is truly adding value. So we actually have a way of looking at the value that each fixed person adds. And if they’re adding what the cost of employing them is, great, and if they’re not we certainly re-evaluate what the situation is.

So we tend to treat that fixed side of the equation as a variable, too.

Peter Arment - Broadpoint Am Tech

So that 16 month rolling average, is that with current assumptions on build rates following Airbus?

Mark Donegan

Right.

Peter Arment - Broadpoint Am Tech

And you don’t get a chance to move other than just basically what you’re seeing there in advance.

Mark Donegan

Well, we get also – we support it by the schedules, so we keep slicing and dicing it. So we’ll look at the longer range, we’ll look for four quarters, then we’ll look at a 16 week actual schedules. And we’ll keep overlaying and correlating it by plant. And if I look at – the plants will look at it by department. So it kind of keeps breaking its way down is what basically happens, constantly taking a week and dropping in a week.

Peter Arment - Broadpoint Am Tech

So then comparing it to the last downturn which was much more dramatic in terms of its dash and the downturn, that was more I assume of a dramatic cut.

Mark Donegan

Yes. This one I think – again, this one to date, and again the ramp up’s been totally different and at least today what we’ve been able to do is get what I think – it’s not as though – I mean, if I look at the last downturn, every week we’d get schedule reductions, schedule reductions, schedule reductions. To date our customers have been much better at saying hey, this is what the next two, three quarters look like. So I think that we’re able to take a good snapshot today and kind of restructure with that.

So the schedules seem to be holding up. Again, Q4 is looking the way it is and Q1 kind of bumps back up and that’s kind of what we’ve been able – so it’s not that every week push-out, cancel; push-out, cancel.

Operator

And that does conclude today’s question-and-answer session. On behalf of Precision Castparts,

Mr. Donegan and PCC management I would like to thank you for joining the call today. As a reminder, the webcast and call have been recorded and will be available on Precision Castparts website at www.precast.com for approximately 30 days. This concludes today’s meeting.

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Source: Precision Castparts Corp. F3Q09 (Qtr End 12/28/08) Earnings Call Transcript
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