Philip D. Anderson - Treasurer and VP of IR Jeff Turner - President and CEO Rick Schmidt - EVP and CFO

David Strauss - UBS Cai von Rumohr - Cowen and Company Joseph Nadol - JPMorgan Benjamin Fidler - Deutsche Bank Howard Rubel - Jefferies & Co. Heidi Wood - Morgan Stanley Doug Harned - Sanford Bernstein Robert Spingarn - Credit Suisse Carter Copeland - Lehman Brothers Dana Merber - Griffiths-McBurney Corporation

Good day, ladies and gentlemen and welcome to the first quarter 2008 Spirit AeroSystems Holdings conference call. My name is Alexis, and I will your coordinator for today. At this time, all participants are in a listen-only mode. We will be facilitating a question-and-answer session towards the end of this conference. [Operator Instructions]. As a reminder ladies and gentlemen, this conference is being recorded for replay purposes. I would now like to turn the presentation over to Mr. Phil Anderson, Treasurer and Vice President of Investor Relations. Please proceed sir. Philip D. Anderson - Treasurer and Vice President of Investor Relations: Good morning and welcome to Spirit's first quarter 2008 earnings call. I am Phil Anderson, and with me today are Jeff Turner, Spirit's President and Chief Executive Officer; and Rick Schmidt, Spirit's Chief Financial Officer. After brief comments by Jeff and Rick regarding our performance and outlook, we will take your questions. Before we begin, I need to remind you that any projections and goals we may include in our discussion today, are likely to involve risks, which are detailed in our news release, in our SEC filings and in the forward-looking statements at the end of this web presentation. And as a reminder, you can follow today's broadcast and slide presentation on our website at spiritaero.com. I have one item to note before we begin today. In our press release issued earlier this morning we haven't correctly noted that the 2008 spare revenue guidance is based on Boeing Commercial Airplanes 2008 delivery guidance, between 480 and 490 aircraft. The correct delivery guidance in which our 2008 revenue guidance is based, is between 475 and 480 aircraft. I would now like to turn the presentation over to Jeff Turner. Jeff Turner - President and Chief Executive Officer: Thank you, Phil and good morning. Let me welcome you to our first quarter earnings call. Let's begin on slide 2. We had a good first quarter as evidenced by our revenue growth and profitability. Our revenues were over $1 billion, an increase of 9% over the same time period of 2007. We achieved this top line growth as volumes increased on the 737 and Airbus products, including the delivery of four A380 ship sets from Spirit Europe. Operating performance was strong across the company, as we expanded our core product operating margins from 10.9% to 12.6%, as improved operating efficiencies in the factory and lower SG&A expenses were realized. Earnings per share increased 22% to $0.61 per share, up from $0.50 a year ago. During the quarter we generated $70 million in cash flow from operations. We reinvested the cash generated from our core products into the 787 program, and achieved an initial advance payment from Boeing in accordance with our amended 787 payment terms. Earlier this month, we received revised 787 production and delivery schedule from Boeing. Both this and the revised payment terms of Boeing are included in our first quarter results and our outlook. During the quarter, we were pleased to announce our participation on the new Cessna Citation Columbus, and the new Gulfstream G650 business jets. These two programs along with the CH-53K helicopter program we won last year, demonstrates the value that Spirit's design and manufacturing capability is providing across the aerospace industry. Our aftermarket business continued to grow during the quarter by securing a contract with Cathay Pacific Airways to provide maintenance services on their fleet of 777 thrust reversers, and just last Friday our aftermarket team announced our participation in a joint venture with HAECO, Hong Kong Aircraft Engineering Company, and several other partners to provide maintenance services to airlines in the Asia-Pacific region. Our backlog at the end of the first quarter was a strong $27.5 billion, which is over six years of backlog based on projected 2008 revenues. We are off to a strong start in 2008 and expect to maintain the momentum going forward. Now on slide 3, let's talk about some of the specific accomplishments across the business during the quarter. Fuselage systems started the year out strong with increased revenues and strong operating margins, as 737 production and deliveries increased. During the first quarter, the team delivered the first P-8A Poseidon Fuselage to Boeing commercial airplanes. P-8A is a unique commercial derivative of the 737 Next Generation, and will be modified into a military configuration by Boeing Integrated Defense Systems for the Unites States Navy. This unique configuration of the 737 was produced on Spirit's high rate commercial production line, thereby reducing the need for expensive post production modification by the customer. The team also delivered the first 777 Freighter sections to Boeing, and was selected by Cessna to provide the fuselage of their new large cabin business jet. On slide 4, you see the propulsion team increased revenue and operating margins from the year ago quarter on additional 737 volumes. During the first quarter, the propulsion team announced that Rolls-Royce had selected Spirit to design and build the BR725 engine nacelle package, and was awarded the repair contract for Cathay Pacific Airways' 777 Trent 800 thrust reversers. Our propulsion team is the sole source designer and builder of 777 engines pylons and nacelle packages, where all three engine types operate on the Boeing 777 aircraft. The team also made good progress on development programs including the 747-8, the P-8A and the 787. On slide 5, the wing systems segment also increased revenues and operating margins during the quarter, as volumes increased for Airbus products and the Boeing 737. During the first quarter, the wing systems team announced that Gulfstream had selected Spirit to design and build the fully integrated wing for the new G650. This is a significant win for Don Carlisle and his team in Tulsa, as they help move Spirit forward focusing on diversification and long term value creation. The Spirit Europe team successfully secured the contract with Cessna, to build the empennage of Cessna's new Citation Columbus. Growth plans for our European MRO service centre and our new Spirit Malaysian facilities are on track. Now let me turn to slide 6 and discuss the 787. First, let me express my confidence that the near term challenges on the 787 program are being addressed by Boeing and their partners. And while there is much work to be done, a great deal has been accomplished. With that confidence, we remain excited about the value that this product will deliver to customers and shareholders for decades to come. During the fourth quarter 2007 and continuing through the first quarter of 2008, we made the decision to slow production rates. This action proved valuable, as we were able to efficiently redeploy people and resources to other existing programs and new programs. Earlier this month, we received a revised production and delivery schedule from Boeing. We have reviewed the new schedule and are confident in our ability to support the requirement and we believe we have taken the necessary actions to mitigate the current block cost impacts on our other programs caused by the delay, through improved operating efficiencies across the company. Near term, we have three main focus areas. One, rebalance our workforce to supply base and capital and tooling plans to align with the revised schedule. As I said, we began rebalancing our people in the fourth quarter of 2007. In the first quarter of 2008, we implemented an interim schedule slowdown. Both of these actions helped avoid additional cost and disruption. Two, support required program engineering changes as efficiently as possible. Changing corporation continues to be a watch item for us at Spirit. Three, maintain efficiencies at a slower production rate. There are operating efficiencies and process yields at higher volumes. We were beginning to see these efficiencies prior to implementing the slowdown. So, the challenge is to not only hold the game, but to find additional improvement that can be made in a lower production rate environment. That would translate into improved efficiencies as volumes increase. We will update you on our progress as we go through the year. Now let me turn it over to Rick, who will provide more details on our financial results and outlook. Rick Schmidt - Executive Vice President and Chief Financial Officer: Thanks Jeff and good morning everyone. Slide 8 summarizes our financial results for the first quarter, starting with revenues up 9% over the prior year period, driven primarily by higher delivery rates to Boeing and Airbus. Operating profit was up 25%, as margins improved significantly year-over-year increasing by 170 basis points. This improvement is largely due to higher unit deliveries, productivity initiatives and lower SG&A and R&D spending. Fully diluted earnings per share of $0.61 for the quarter were 22% higher than earnings of $0.50 in the prior year period, largely due to higher sales and improving our operating margins. Cash flow from operations of $70 million and capital expenditures of $66 million for the quarter, reflect our continuing investment in the 787 program and other new programs as well as revised 787 payment terms. During the quarter we also made significant progress in improving our liquidity position, by increasing the size of our revolver by $250 million and renegotiating certain payment terms for the 787 program. I will describe all of these items in more details in the upcoming slides. Slide 9, highlights our progress on key P&L metrics both year-over-year and sequentially versus the four quarters of 2007. First quarter revenues grew 9% year-over-year and 6% sequentially over Q4, both largely attributable to higher unit deliveries to Boeing and Airbus, as can be seen in the unit delivery chart included with the press release. Total 787 revenues in the quarter, which include both production and non-production elements, were approximately $17 million, as we delivered one forward fuselage unit. Operating income margins were 12.6% in the quarter, 170 basis points above the prior year period. On a sequential quarterly basis, operating margins were also up significantly, due to the benefits of higher volume. Lastly, first quarter fully diluted EPS of $0.61 grew significantly over the prior year period due to the improving operating margins. Our effective tax rate of 33.5% in the current quarter was largely unchanged from the prior year period. Sequentially, EPS was up $0.07 or 13% from Q4, due to higher volumes in the absence of $5 million in acquisition evaluation expenses, which were included in the Q4 results. R&D expense in the fourth quarter was $10 million, slightly below the prior year period and down from Q4 as we complete the R&D phase for several of our recently announced nine 787 related new programs. The lower sequential R&D spending benefited operating margins in both our fuselage and wing system segments. SG&A expense for the quarter was $39 million, about 13% below the prior year period. Reduction is primarily due to lower non-cash stock compensation expense and lower transition expenses, as spending for various transition activities was largely complete in the first half of 2007. Sequentially, SG&A was down about $11 million or 22% from the fourth quarter, largely due to the absence of $5 million of acquisition evaluation related expenses mentioned earlier, and the continuing year-over-year decline in stock compensation expense. Declining absolute dollars of R&D and SG&A expense combined with rising sales, is one of the contributing factors to Spirit's improving operating margins. In the aggregate, SG&A and R&D declined from 5.8% of sales in the first quarter of '07 to 4.7% in the first quarter of '08, a 110 basis points improvement in operating margins. Maintaining tight controls over all forms of overhead spending has been a major focus of management and will continue to benefit future periods as revenues increase. Slide 11 summarizes the P&L for the first quarter versus the same period in the prior year. During the quarter, Spirit realized approximately $2 million of net favorable changes in contract estimates, slightly below the $3.5 million recognized in the fourth quarter of '07. Almost all of the current period benefit was realized in the wing systems segment, due to continuing productivity initiatives in both our Tulsa and Spirit Europe operations. Prior year period included approximately $6 million of favorable cume catch adjustments, again largely recognized within our wing systems segment. After the most recent Boeing announcements of further scheduled slides for the 787, we evaluated the potential impact from loss of manufacturing hours and disruption on the profitability of all of our programs. After extensive review, we concluded that negative impacts would be largely mitigated by certain actions, which is moving current 787 employees to other programs, where production activity is increasing, slowing hiring of new employees, reducing overtime, and other cost reduction activities. Effectively managing the Boeing's new production schedule for the 787 will continue to be a significant watch item for Spirit management. However, as a consequence of the recent delays, we expect profitability of the first 500 unit contract block for the 787, will be further reduced. We now expect gross profit margins below 5%. Turning to slide 12, during the quarter, Spirit concluded two major events that greatly enhanced our liquidity. First was the completion of an amendment to our existing credit agreements that expands the size of our revolver from $400 million previously to $650 million, an increase of $250 million. Second was the renegotiation of payment terms for our 787 deliveries to Boeing. Previously, the initiation of cash payments for 787 deliveries was tied to certification and delivery to airlines. Recent delays in certification resulted in additional working capital build and absorbed available liquidity. Under the new arrangement, Boeing will provide advance payments in 2008 for a specified number of units independent of the actual delivery date. The first payment for $124 million was received in the first quarter. The successful conclusion of these milestones stabilizes our 2008 cash flows and provides adequate dry powder for future financing needs. Both rating agencies responded positively to these developments. S&P by upgrading our credit outlook from negative to stable, and Moody's by reaffirming our current rating. Slide 13, summarizes the changes in our cash and debt balances during the quarter. Cash balances at the end of the quarter of $203 million, increased $70 million or 53% from yearend 2007. The increase was driven by a receipt of $124 million of new advance payments from Boeing and a $75 million draw on our revolving credit agreement, partially offset by further working capital bill. Total debt balance has increased by $70 million in the quarter, due to the $75 million revolver draw offset slightly by scheduled repayments. The $75 million revolver draw was fully repaid in the first week of the second quarter. Driven by consistent profitability and growing shareholder's equity, Spirit's capital structure continues to improve. At the end of the first quarter, our net debt-to-capital ration was under 26% and our net debt to 2008 EBITDA ratio was well below 1. Additionally, at the end of the first quarter, the company had approximately $765 million of short term liquidity available through our amended revolver and available cash balances, which we believe is fully adequate to fund projected cash flow needs. Slide 14 details our cash flow for the first quarter versus the same period in the prior year. Cash flow from operations for the quarter was positive $70 million, with higher customer advanced payments and improving profitability, offset further working capital growth. Working capital build was largely driven by the 787. As inventory from suppliers was received at faster pace than production levels, and our projected deliveries have been rescheduled. Inventory growth includes an increase in capitalized development cost of $21 million for the quarter, entirely for new programs unrelated to the 787. At the end of the quarter, capitalized development costs were $301 million in total, including $238 million for the 787. Capitalized development costs for the 787 were largely complete in the third quarter of 2007. Capital expenditures of $66 million for the quarter were down 25% from the prior year quarter and only slightly above Q4, as the installation of production capacity for the 787-8 program is winding down. Chart 15 details our updated 2008 guidance for revenue and fully diluted earnings per share, which reflects our current estimates for 787 deliveries to Boeing. We project 2008 revenues to be around $4.4 billion, down from the previous estimate of $4.7 billion, due entirely to lower 787 deliveries. We expect these revenues to be recovered in subsequent years. On a $4.4 billion revenue base, we expect fully diluted EPS of $2.25 to $2.35, assuming an effective tax rate of approximately 33% of pre-tax earnings. Projected effective tax rate assumes federal research and development tax credits are available for the entire year, although no benefit was recorded in the first quarter results. With the recent renegotiation of 787 payment terms and a better understanding of our 2008 and 2009 787 production requirements, we are now in a position to provide 2008 cash flow guidance for the first time. For 2008, we expect cash flow from operations of $400 million, capital expenditures of $275 million, and a capital reimbursement of a $116 million. Should be noted that the additional 787 advance payments included in this guidance, on an acceleration of cash receipts previously anticipated in 2009,, and early 2010, upon Aircraft certification. I'd now like to turn it back over to Jeff for some closing comments. Jeff Turner - President and Chief Executive Officer: Thank you, Rick. I will wrap up on slide 16. We had a good first quarter and expect a strong year ahead. As always, our team remains focused on meeting our customer commitments, our core products and our development programs. Growing and diversifying our business profitably, remains the cornerstone of our strategy. We will now be glad to take your questions. Question and Answer

[Operator Instructions]. Your first question comes from the line of David Strauss with UBS. Please proceed. David Strauss - UBS: Good morning. Thank you. Rick, can you just give a little bit more color in terms of what you are thinking about margins as we go forward through the year? Obviously, did the 12.6 the quarter just include a small cume adjustment? 787, while at a mid-low margin, is not going to be ramping up as we go through the year. We are just… if you can hold these kind of margins, it would imply much higher numbers than when you are talking about on the EPS side. So what are kind of the offsets as to why margins won't hold at these levels as we go through the year? Rick Schmidt - Executive Vice President and Chief Financial Officer: Yeah, good question, David. A couple of things. I think, the first quarter is probably going to be the low point in the year for SG&A and R&D spending, with some of the new programs that we have announced and potentially some other things coming online. We would expect R&D spending to increase in the second half. I think, we would also expect some modest increases in SG&A. You mentioned the 787, that obviously the revenues that we do recognize in '08, will be at lower margins as we have said. We are also being cautious about the impact that the changes in 787 schedules are going to have on our business. And as Jeff mentioned, we have done extensive review of this. We believe we have the actions in place to mitigate the impact on all of our programs. But we are being cautious about how that plays out over the course of the next couple of quarters. David Strauss - UBS: Okay. And then on the working capital side, the inventory build. Can you give us a little bit of color, is that going to slow as we go through the year? It seems like that's what you are implying, or is it going to, just kind of gauge that for us, obviously last year you had a pretty big build, is it going to be that big this year as well? Rick Schmidt - Executive Vice President and Chief Financial Officer: Well, I think there again, the first quarter will probably be the high point for increase in working capital; because as you can appreciate with the recent changes, as of just a quarter or two ago, we were expecting to have much higher deliveries of 787s in 2008. So some of that working capital is (inaudible) now. But I do expect the first quarter will be the high point. You know, working capital was up about $150 million in the first quarter. I would expect that the rest of the year, we will see some working capital increase, but probably no more than that for the next three quarters, versus what we did in the first quarter. David Strauss - UBS: Okay. And last one, I know you had some outstaying issues, 2005-07 issues on 787, some recovery you were looking to get from Boeing. Have you had any resolution to those issues? Jeff Turner - President and Chief Executive Officer: Well, clearly with the change in terms that we announced in our 8-K a couple of weeks ago, there has been some change. That reflects an ongoing conversation that we are having with Boeing. As I have mentioned before, and I'll repeat here, this is a long-term program, there are a lot of facets to it, so we anticipate that we will continue to work with them, we have seen some resolutions, we have seen some items that we will continue to work on. David Strauss - UBS: Great. Thanks a lot.

Your next question comes from the line of Cai von Rumohr with Cowen and Company. Please proceed. Cai von Rumohr - Cowen and Company: Thank you. Your SG&A and R&D were fairly light in the quarter, could you give us a little more granularity in term of where they might be for the year and a split on the SG&A of the transition costs and the stock comp cost expenses in the first quarter? Jeff Turner - President and Chief Executive Officer: Sure, sure. In SG&A, there was al most no transition expense to speak of in Q1. Stock comp expense for the quarter was just under $4 million, which was about $2.5 million less than it was last year. In terms of where we see it going, when we originally had issued our 2008 guidance for earnings, we had said at that point that we expected SG&A and R&D to be largely flat year-to-year. I think, at this point, given our current outlook and actual performance in the first quarter, I think in the aggregate, you will see SG&A and R&D just to be down little bit from what we spent in the prior year, and that clearly is one of the reasons that operating margins are improving over 2007. The only point I would make to that is we do have opportunities out there. We are pursuing and depending on the timing of those and the amount of effort, I mean, clearly were projecting that there will be a higher spend in later quarters than there was in the first quarter. Cai von Rumohr - Cowen and Company: Okay. Clearly the SG&A is going to be down, can we say the same for the R&D that the R&D, that the R&D's can be down for the full year? Rick Schmidt - Executive Vice President and Chief Financial Officer: We said the aggregate of the two would be down slightly from 2007. Cai von Rumohr - Cowen and Company: Okay. Could you comment on the R&D, I mean, or at least, is that likely to be down or what are the things we should think about that could cause it to be down or to be up? Rick Schmidt - Executive Vice President and Chief Financial Officer: Well, the primary reason it will be up obviously would be spending on new programs. At this point again, without getting too specific, I do think R&D will be higher in 2008, but I think it will be modestly higher. Cai von Rumohr - Cowen and Company: Okay, great. Thanks so much. Jeff Turner - President and Chief Executive Officer: Thank you, Cai.

Your next question comes from the line of Joseph Nadol with JPMorgan. Please proceed. Joseph Nadol - JPMorgan: Thanks. Good morning. Jeff Turner - President and Chief Executive Officer: Good morning Joe. Joseph Nadol - JPMorgan: On the inventory, you provided us in good detail already. I'm wondering if you could give us what the total 787 inventory, all in, was at the end of the quarter? Rick Schmidt - Executive Vice President and Chief Financial Officer: All in at the end of the quarter, it was about just over a $600 million. Joseph Nadol - JPMorgan: Okay. Rick Schmidt - Executive Vice President and Chief Financial Officer: We can tell you that's almost, it's just slightly over 40% of our total inventory, and that does include capitalized development costs. Joseph Nadol - JPMorgan: Right. And when do you expect that to peak? Rick Schmidt - Executive Vice President and Chief Financial Officer: Well. Certainly as we've said, capitalized development costs are concluded at this point. So that's not growing and as we start to deliver units, obviously that will start amortizing down. I would think the peak, as we've said, our working capital growth is clearly slowing, a lot of that is driven by the 787. But as we move to higher production rates, its hard to say exactly when Joe, but I would think while the increases will be more modest from here, I think the peak is probably some more in early mid '09. Joseph Nadol - JPMorgan: Okay. How many ship sets you do expect to deliver this year in 787? Jeff Turner - President and Chief Executive Officer: We are not providing specific guidance on that, Joe. We will certainly support the flight test units and then… the way it operates is, we operate on pool from Boeing. So this basically will have the units ready and they will pool it. I guess I'd make another point that it's relatively modest impact. In fact it's a modest impact on our '08 guidance, I don't make it will move one way or the other depending on when they do call. Joseph Nadol - JPMorgan: Okay. Have you completed your negotiations? I mean, you got this great cash terms, and you talked about margins sliding a little bit. Is price still an area of negotiation or has that been settled? Jeff Turner - President and Chief Executive Officer: Well, clearly there are a number of areas of continuing dialog that will impact price. So change traffic in configuration that has moved through time, any disruptions, all those things that we have talked about in the past, that… not to mention future rates and derivatives, so there is just a number of items on the table and will continue to be. So as I mentioned a minute or two ago, we have active negotiations and conversations underway continually, we have seen some progress and there are many more conversations to have over the life of this program frankly. Joseph Nadol - JPMorgan: Okay. And then one more, Rick, on 77. I know this is a tough one, but you mentioned that you are pulling cash forward obviously with the change in terms with Boeing on the 87. I am wondering if you could give us some thoughts on free cash flow generation from this program in 2009, 2010. I know that it is hard, but conceptually how should we be thinking about that? Rick Schmidt - Executive Vice President and Chief Financial Officer: Yeah at this point Joe, we are obviously not in a position to provide any cash flow guidance beyond 2008. But there are a lot of moving parts to that equation, as you can appreciate, I mean Jeff just articulated some of the variables that are impacting that. Joseph Nadol - JPMorgan: Yeah. Rick Schmidt - Executive Vice President and Chief Financial Officer: So, I think it is just too early to call at this point of time. Joseph Nadol - JPMorgan: Yeah inventory will be declining. Your payments from Boeing will be cut off for a period during '09, then resuming during 2010. Rick Schmidt - Executive Vice President and Chief Financial Officer: That is correct. That gets to the heart of the number of moving parts that are going to be influencing our cash flows in the next couple of years. Joseph Nadol - JPMorgan: Yeah. All right. Thank you. Rick Schmidt - Executive Vice President and Chief Financial Officer: Thanks Joe. Jeff Turner - President and Chief Executive Officer: Thank you.

Your next question comes from the line of Ben Fidler with Deutsche Bank. Please proceed. Benjamin Fidler - Deutsche Bank: Yes, thank you. A couple of questions. Firstly, just on the wing systems. If we look at the margin for wing systems, even adjusting for that cume catch up, delivered quite impressive margin growth, up to 11.6%. Do you see that as a sustainable base point, or are there any things that will be impacting the margins through remaining quarters of this year? Rick Schmidt - Executive Vice President and Chief Financial Officer: No, we do believe that that is sustainable, Ben. We've seen margins in wing systems increase fairly consistently over the last five or six quarters. As we have disclosed, a significant portion of our favorable cume catch adjustments have been in the wing systems business. So I think what you are starting to see now in the margins is the aggregation of these favorable cume catches, which obviously means that future profitability is improving. So we do think the current levels are sustainable going forward and hopefully will continue to improve. Benjamin Fidler - Deutsche Bank: Okay. Thank you. One also, just on… wonder if you characterize where you are at with discussions with Airbus over A350, and even if there is any potential revisiting of some of those Airbus sites, particularly the German ones with the deal having fallen through, that Airbus was hoping to do in setting those German sites on? Jeff Turner - President and Chief Executive Officer: Sure Ben, I'd be glad to. Clearly we said that we are interested in participating with Airbus on A350. We are continuing to work with them. We've also said that we felt like decision point was mid-year that continues to feel right. Yes, it could be sooner, could be a little longer. So clearly a program that we have expressed interest in, Airbus has expressed interest in having us on the program. So, we will continue to work to see if we can have an agreement there that works for both of us. We have watched with interest some of the news releases on the German site. We were very impressed with the people and the capabilities in those businesses when we visited them. As you know, late last year, we came to the conclusion that we couldn't close the business case for both us and Airbus on that, in order to achieve the necessary value creation for Spirit. So, we didn't pursue that further. We remain open to really any M&A activity that's inline with our strategy, and we believe we will deliver value to our shareholders. Benjamin Fidler - Deutsche Bank: Thanks very much. Jeff Turner - President and Chief Executive Officer: Yes. Thanks Ben.

Your next question comes from the line of Howard Rubel with Jefferies. Please proceed. Howard Rubel - Jefferies & Co.: Thank you very much. Could you address 737, you are now at 31 a month. There were need of positives or negatives it looks like it went smoothly, could add a little color to that Jeff, please? Jeff Turner - President and Chief Executive Officer: Sure. In some ways, Howard, because we like to deck on top of the water, it did run smoothly. I think, probably something noteworthy that people may or may not have recognized as we had that P8A Poseidon, major change fuselage coming through the line at exactly the same time. Buck Buchanan and his fuselage team just did a phenomenal job of making the rate increase and bringing the P8A at homes. So, that is going well. It's going well in both the fuselage and in the wing and propulsion area. So, we've made that step, we are continuing to work to smooth out. There is always issues associated with production step as you know, and we are working hard to smooth all those out. But we are pleased with the progress that the team has made. Howard Rubel - Jefferies & Co.: Second thing is that if we look at the gross margin that Rick articulated on the 787 for the cume program. Frankly, that won't cover your cost to capital. What can you do to make it a little bit more profitable or what other things are going on that would change that either plus or minus from here? Jeff Turner - President and Chief Executive Officer: Well clearly, the delays have had impact on us. And I mentioned it earlier in my prepared remarks, we will continue to very aggressively look at things we can do to improve that production line. We had a plan for certain rates and a rate buildup, clearly that's a different plan now, stretched out a bit. So, we will have to work hard to figure out additional improvements that we can make on the line that will work at a lower rate production, but also not be dragging when we go to higher rate productions. So that will be an ongoing effort, Howard, of continuous improvement that we will focus on, on that program. Howard Rubel - Jefferies & Co.: Jeff, you're tool for seven a month right now, right? Jeff Turner - President and Chief Executive Officer: We have floor space for seven a month, we are close to that. A lot of our equipment will handle seven a month. I don't know if we have all the tooling in place. I don't think we have all the tooling in place yet for seven a month. So we can delay that, which is part of what we have done. But I mean clearly, we were gearing toward the requirement of seven a month and looking at potentially higher rates. Which we will continue to do, Howard, it will just be a little further out to the right. Howard Rubel - Jefferies & Co.: And then finally, could you give us a little more color on some of the other opportunities that you discussed? I mean, either market size or market in particular if you could. Jeff Turner - President and Chief Executive Officer: Well, you know the 350 opportunity that we are in discussions with Airbus over and we have been able to announce a couple of business jets. There are still business jet and regional jet opportunities out there that we are pursuing. Howard Rubel - Jefferies & Co.: Thank you.

Your next question comes from the line of Heidi Wood with Morgan Stanley. Please proceed. Heidi Wood - Morgan Stanley: Great, thanks guys. A couple of questions. Getting back to Howard's question on the 737 rate. Boeing says that they are taking a look at some of their production rate assumptions, given the demand that they have seen. Can you give us an idea of what kind of advanced timing you would need, if they were to choose to raise that rate higher and any additional CapEx you have to engage in? Jeff Turner - President and Chief Executive Officer: Heidi, we usually, especially when we are running at high rates like we are now and the supply base is pretty much at capacity and needing to expand to go faster. We look at 12 to 18 months kind of as a rule of thumb. And again as we continue to talk, there is the incremental investment that we need, is again, constraint relieving capital or constraint relieving tooling. So it's not major changes to our capital requirement. Heidi Wood - Morgan Stanley: Right, because you have gone this far… in some ways in the maturity of the program, you have made the lot of productivity initiatives. At this stage it is a question of CapEx, right? Jeff Turner - President and Chief Executive Officer: It tends to be tooling and CapEx. Heidi Wood - Morgan Stanley: And Rick, you mentioned over time was on the decline now with the 787 slowdown. How much of a margin headwind was that in the quarter and in the fourth quarter for you? Rick Schmidt - Executive Vice President and Chief Financial Officer: I mean it is difficult to quantify for a specific number Heidi. I mean, clearly higher levels of overtime contribute to higher costs for us. So to the extent that overtime is coming down, that is an opportunity for us to lower cost. It is not a significant component of our overall cost picture. Heidi Wood - Morgan Stanley: All right. And then, relative to the competition, the opportunities you had like A350 and perhaps if there is some business jets, how does the profile of opportunities look between '08 to '09? My sense is that, this is sort of a big robust R&D opportunity here for you now. But does that drop off in '09 so, if you win some of the things that you are thinking about, then we would be hitting kind of more of a steady state R&D as opposed to being concerned that that is going to be heading higher. Is that a fair characterization? Jeff Turner - President and Chief Executive Officer: I think it is a fair characterization, Heidi. We have seen a lot of opportunities, we've identified and pursued and won a number of them, as we have announced. So I think there was a bit of plateau out in front of us. Rick Schmidt - Executive Vice President and Chief Financial Officer: I would add to that Heidi, that R&D… the level of R&D spending tends to be dependent on the nature of the contract terms that we negotiate on new programs. In some cases, R&D could be funded by the customer, as opposed to us funding it. So it really just depends on who the customer is, and the nature of the contract terms and depending on how that comes out. That obviously could drive the level of R&D spending that you would see in our financial statements. Heidi Wood - Morgan Stanley: Good, thank you. And then one last, Rick, if you don't mind. I am not sure I heard your comment about the capitalized cost comment on the 747-8, what are the extents of capitalized cost requirements for the -8? Rick Schmidt - Executive Vice President and Chief Financial Officer: The 747? Heidi Wood - Morgan Stanley: Yeah, the 747. Rick Schmidt - Executive Vice President and Chief Financial Officer: Actually we didn't mention the 747 in our prepared remarks, Heidi. Heidi Wood - Morgan Stanley: Alright. Well then, I think… Rick Schmidt - Executive Vice President and Chief Financial Officer: The point I made was related specifically to the 787. Heidi Wood - Morgan Stanley: All right. Then what kind of capitalized cost requirements you have for the 747-8 then, Rick? Rick Schmidt - Executive Vice President and Chief Financial Officer: Relatively modest. Heidi Wood - Morgan Stanley: All right. Good. Thanks very much. Jeff Turner - President and Chief Executive Officer: Thank you.

Your next question comes from the line of Doug Harned with Sanford Bernstein. Please proceed. Doug Harned - Sanford Bernstein: Good morning. Rick Schmidt - Executive Vice President and Chief Financial Officer: Good morning. Jeff Turner - President and Chief Executive Officer: Good morning Doug. Doug Harned - Sanford Bernstein: Looking at the new programs, kind of pursuing the line that you have been discussing here. If you look at engineering headcount today, and you go out this year, next year, how are you thinking about the trajectory? Are you maintaining or are you actually increasing… you look to increase your engineering size? Jeff Turner - President and Chief Executive Officer: Of course, depending on program wins, at kind of minimum, we are looking at maintaining, depending on program wins, we could see some increase in engineering requirements. Doug Harned - Sanford Bernstein: And then separately on Malaysia, you said that things are on track there. So I assume you are looking at that being operational in Q1 of '09. Could you describe where that stands today and the types of activities that we expect to see moving to Malaysia in '09? Jeff Turner - President and Chief Executive Officer: Sure, the billing itself is underway. The groundbreaking is complete. And the activities that will go in there is primarily driven by our Spirit Europe activity and it will be some composite assemblies that will be delivered directly to Airbus. Doug Harned - Sanford Bernstein: But, is this a work that is currently being done in Prestwick? Jeff Turner - President and Chief Executive Officer: Its work is being done in our supply base. Doug Harned - Sanford Bernstein: Okay. Jeff Turner - President and Chief Executive Officer: We are, in fact, brining this work back in house, Doug. Doug Harned - Sanford Bernstein: Oh, I see. And then one last thing, on aftermarket business, with the (inaudible) and the Prestwick work. How large do you see this becoming, in terms of a contributor to Spirit revenues? Jeff Turner - President and Chief Executive Officer: Yes. As we have mentioned, I think many times, it's not a huge impact on us. I mean it's a good business, it's a business that we are obviously pursuing and making inroads in. But I would say good modeling numbers, 5% of our total revenue somewhere plus or minus that range. Doug Harned - Sanford Bernstein: So that's where you are headed, to that sort of level. Jeff Turner - President and Chief Executive Officer: Yeah. Right. Doug Harned - Sanford Bernstein: Okay. Great. Thank you. Jeff Turner - President and Chief Executive Officer: You bet. Thank you.

Your next question comes from the line of Robert Spingarn with Credit Suisse. Please proceed. Robert Spingarn - Credit Suisse: Hi guys. Jeff Turner - President and Chief Executive Officer: Good morning Rob. Robert Spingarn - Credit Suisse: A question on your on the 787 rate. You got asked this earlier, I know you can't get too specific. But you took sales guidance down $300 million for this year. You were at 45 ship sets. So the implication here is you are net-net I don't know 10, 12, 15 somewhere in that neighborhood. Should we expect the test aircraft to deliver about one a month here, starting from the end of April till the call at the end of July? Jeff Turner - President and Chief Executive Officer: I don't have anything quite that specific, but if that's what the numbers work out, it makes sense to use that. I mentioned earlier, we are actually on a pull from Boeing. So we prepare the units, have them ready, get all the changes into them that are coming through, and then have them ready for the pull. So the pull can vary depending on when Boeing's ready to pull it into their line. Robert Spingarn - Credit Suisse: Right. But your guidance suggests that you'll at least have, like I said, about a dozen airplanes pulled by year-end. And… Jeff Turner - President and Chief Executive Officer: That's, that's the reasonable ground rule. Robert Spingarn - Credit Suisse: Okay. And then just taking a step further, Jeff, should we see a pause between aircraft six and seven just because we are ending the test aircraft phase and then going into the customer phase? Jeff Turner - President and Chief Executive Officer: I don't think so, Rob. I guess it could happen depending on what's coming back. But clearly, the desire is to get the program on a drumbeat. Boeing has talked about 25 units end of '09. So that pipeline needs to be full and the rate needs to begin to increase in order to meet demand like that, and then the follow-on years as well. Robert Spingarn - Credit Suisse: Sure. And could you call to give us some color on the evolution of the systems, installation between ship sets one, two and three? Jeff Turner - President and Chief Executive Officer: Every ship set is getting more complete. The changes are being incorporated. Never to the 100% level that we want, but clearly, each is significantly better than the previous. Robert Spingarn - Credit Suisse: Can you get to 100% by four or five? Jeff Turner - President and Chief Executive Officer: Probably not. But it won't and of course a 100% is (inaudible) number. Robert Spingarn - Credit Suisse: Right. Jeff Turner - President and Chief Executive Officer: But very complete. I mean, there is a high degree of completion and it will continue to increase. Robert Spingarn - Credit Suisse: Okay. And then just Rick, if we go back to cash flow for a moment, there are a lot of moving parts. You've talked about the 787 inventory and other components. But from a higher level, could you just walk us through companywide, how we should think about receivables, inventories and payables? Because I noticed the payables were up a bit in the quarter. How we should think about those three items for the full year '08? Rick Schmidt - Executive Vice President and Chief Financial Officer: Sure, I mean payables obviously as volume increases, volume being the amount of purchased material that we buy, the amount of capital equipment that we buy is that increases over time, and our payables will increase roughly in conjunction with our revenues. Receivables obviously did pretty much the same way. You probably notice that in receivables, our receivables were up quite a bit in the first quarter. But that's fairly typical if you go back and you look at the last couple of years, you'll always see a spike up in receivables in Q1, because our balance tends to be the lowest point of the year, tends to be at the very end of the year because of the holiday shutdowns where we don't ship a lot to Boeing in the second half of December. But yet we continue to get paid for units that we delivered earlier the quarter. So, the end of the year tends to be the low point then it spikes up in Q1 and then kind of stays at normal levels until the year end again. Inventory, as I said, inventory we believe will continue to grow, not only for the 787, but for some of our legacy programs as well. But again, as we continue to go to higher rates, some of our new programs come online. But certainly the growth in inventory will be more modest than what we have seen in the last couple of quarters. Robert Spingarn - Credit Suisse: Okay, Thanks Rick. Jeff Turner - President and Chief Executive Officer: Thank you, Rob.

Your next question comes from the line of Carter Copeland with Lehman Brothers. Please proceed. Carter Copeland - Lehman Brothers: Hey, good Morning guys. Jeff Turner - President and Chief Executive Officer: Hi Carter. Carter Copeland - Lehman Brothers: Jeff, I wondered if we could get back to this new production schedule a bit and provide a little color on how much you really plan to slow down. You are already well ahead of where Boeing is. In your new plan, when do you catch up, when does the production that you expect to be doing sync up with delivery with Boeing? Do you have any idea of when that happens? Jeff Turner - President and Chief Executive Officer: Carter, I am not sure I understand you. Carter Copeland - Lehman Brothers: Well, just based on Rob's question you know, if we slow down to one a month let's say and don't stop, it will be late '09, based on the Boeing delivery schedule before your production and their production then (Technical Difficulty). Rick Schmidt - Executive Vice President and Chief Financial Officer: On the installation side, once you get the system, they go in very well. So when we can probably get a lot closer to the actual pull schedule quicker. So, it will vary across our product and across the value chain. Carter Copeland - Lehman Brothers: Okay. And one for Rick. Rick what does the full year cash flow guidance assume in terms of total advances, have you disclosed that at all? Rick Schmidt - Executive Vice President and Chief Financial Officer: No, we haven't Carter. But certainly, it's fully reflected in our guidance. Carter Copeland - Lehman Brothers: Okay, and one last one. On the CapEx the $275 million, it seemed little high relative to last year's 288, especially given that there we had 787 spending that was going to come down. What's behind that level, it seemed kind of high? Rick Schmidt - Executive Vice President and Chief Financial Officer: Well, if you look at what we had in the first quarter, it's is pretty much on that run rate. So as Jeff mentioned, there still is some 787 tooling, little bit of capital that is in front of us for getting to the ultimate production rates. There is some capital for some of our new programs that we have talked about, that we have announced recently. So, I would say those are the primary drivers. There is some capital obviously for the Malaysia facility that we have talked about before. So, there are a number of projects like that, that are contributing to the capital spending level. Carter Copeland - Lehman Brothers: No big items, but a lot of sort of little ones that add up, is what you are saying? Rick Schmidt - Executive Vice President and Chief Financial Officer: I think that is the fair statement Carter. Carter Copeland - Lehman Brothers: Okay, great. Thanks a lot guys. Rick Schmidt - Executive Vice President and Chief Financial Officer: Thank you.

Your next question comes from the line of Dana Merber with Griffiths-McBurney Corporation. Please proceed. Dana Merber - Griffiths-McBurney Corporation: Hi, good morning guys. Rick, just one question. The $124 million that you received in the first quarter from Boeing, how does that flow through the cash flow statement. Rick Schmidt - Executive Vice President and Chief Financial Officer: It ends up in a line called, customer advances. Dana Merber - Griffiths-McBurney Corporation: Okay. So there is some netting going on there as well? Rick Schmidt - Executive Vice President and Chief Financial Officer: There is because the payments that we got in the quarter reflect payments for some of the units we've already delivered. Dana Merber - Griffiths-McBurney Corporation: Okay. Rick Schmidt - Executive Vice President and Chief Financial Officer: So that gets… those are in effect liquidations of those advances and those get added in that customer advances line. Dana Merber - Griffiths-McBurney Corporation: Okay. Great. Thanks. That's it. Jeff Turner - President and Chief Executive Officer: Operator, we have time for one more question. Please?

Yes Sir, your final question comes from the line of David Strauss with UBS. Please proceed. David Strauss - UBS: Thanks. Rick, the CapEx recovery from Boeing, when is that going to come through? Rick Schmidt - Executive Vice President and Chief Financial Officer: Well the $116 million is on scheduled dates, specific dates. And it was intended to be roughly on a quarterly basis, when it was originally setup. But the first one was actually, I think, on March 30th, or something. It came like a day or two after the end of our quarter. So it's pretty much linear on a quarterly basis. David Strauss - UBS: Okay. So similar to what we saw last year, just a chop in the Q1 number? Rick Schmidt - Executive Vice President and Chief Financial Officer: Yeah. David Strauss - UBS: Okay. And then my last one, the investment that you are making on the 650 and the Columbus, I think you kind of talked about the R&D portion of those. You are well into those, are being behind you. Obviously you are going to have capitalized development costs. Can you kind of size where you are looking at, in terms of a total investment on each of those programs or give us some sort of idea, maybe relative to 787. What the spending profile is? Rick Schmidt - Executive Vice President and Chief Financial Officer: Well, they are obviously a lot smaller than the 787. And here again we have, in some cases, some of the development costs and the upfront expenses is funded by Spirit and in some cases it's funded by customers. So the ultimate investment tends to be variable by project. But certainly, the total amount that's funded by Spirit is obviously well below levels that we are seeing in the 787 user, obviously quite a bit smaller airplanes. Jeff Turner - President and Chief Executive Officer: Thanks David.

Ladies and gentlemen, this concludes our Q&A session for today as well as the presentation. You may now disconnect and have a wonderful day.