Phil Anderson - Treasurer and VP of IR Jeff Turner - President and CEO Rick Schmidt - EVP and CFO

Robert Stallard - Macquarie Research Equities Doug Harned - Sanford Bernstein Cai von Rumohr - Cowen & Company David Strauss - UBS Joseph Nadol - J.P. Morgan Troy Lahr - Stifel Nicolaus Ronald Epstein - Merrill Lynch Robert Spingarn - Credit Suisse Howard Rubel - Jeffries & Company Richard Safran - Goldman Sachs

Good day ladies and gentlemen and welcome to the Third Quarter 2008 Spirit AeroSystems Holdings Earnings Conference Call. My name is Francis [ph], and I will be your coordinator today. At this time, all participants are in listen-only mode. We will be facilitating a question-and-answer session towards the end of the conference. [Operator Instructions]. As a reminder, this conference is being recorded for replay purposes. I would now turn the presentation over to your host for today's call Mr. Phil Anderson, Treasurer and Vice President of Investor Relations. Please proceed, sir. Phil Anderson - Treasurer and Vice President of Investor Relations: Good morning and welcome to Spirit's third 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. And in order to allow everyone to participate in the question and answer segment, we ask you to limit yourself to one or two questions this morning. Before we begin, I need to remind you that any projections or goals we may include in our discussions today are likely to involve risks which are detailed in our new release, in our SEC filings and in the forward-looking statement at the end of this presentation. And as a reminder, you can follow today's broadcast and slide presentation on our website at spiritaero.com. I will now turn the presentation over to Jeff Turner. Jeff Turner - President and Chief Executive Officer: Thank you Phil and good morning everyone. Let me welcome you to our third quarter earnings call and let's begin on slide two. We continue to execute well across our company during the third quarter, as we responded to the machinist strike at the Boeing Company, Spirits largest customer. While we were clearly disappointed by the on set of the strike, I am extremely pleased with the performance of our team as we quickly responded taking the necessary and prudent steps to deal with this work stoppage. Our efforts have been intensely focused on maintaining a healthy business and meeting customer requirements, while managing the impact to our employees and shareholders. The actions we have taken thus for were well planned and coordinated in advance and are working well. As you know when the strike commenced on September 6th, Spirit immediately implemented to reduced work weak production schedule on effected Boeing products. This approach service well in a similar situation in 2008 and continues to do so now. We are meeting our customers' expectations well our employees remain productive and prepare to resume full production after the strike concludes. As you would expect our results for the third quarter 2008, reflecting impact of the strike, however, our balance sheet and our liquidity remained strong. Rick will provide you more details on the strike impact in his presentation. So let me spend a few moments to give you an update on other parts of our business. We have made solid progress on our long-term strategy as we continue to execute well on our Airbus programs, progress on our development programs and have won new business. Early in the quarter our Spirit Europe team were content on the A350 XWB program by capturing a win component package. Our work content on the A350 XWB program is now in the $4 to $5 million per ship set at range. More recently we announced our participation on the Gulfstream G250 business jet. We captured new business on the Mitsubishi Regional Jet and continue to advance our aftermarket business by securing spare part agreements with South West and Continental Airlines. Our backlog grew again in the third quarter and is now approximately $31.8 billion. While Spirit is doing well overall, we remain mindful of the challenges facing airlines in businesses both domestically and internationally, as they cope with the difficulties in the world financial markets and the impact on economies around the world. We are closely watching and evaluating the potential impact of these developments. Let's spend a moment and talk about some of the specific highlights across the businesses during the quarter. We'll begin on slide three. All three of our business segments were impacted by the machinist strike at Boeing during the third quarter. The strike impacted both revenues and earnings. We delivered nine fewer ship sets in the third quarter as a result of the strike and booked an $18 million unfavorable cumulative catch-up adjustment. Most of which is reflected in the fuselage segment. We also continue to improve productivity during the quarter as we realized a $5 million favorable cumulative catch-up adjustment, which helped offset some of the strike related impact. These improvements were realized in both the fuselage and propulsion segments. The fuselage team continues to execute well across programs, while making good progress on development programs. On slide four, you see the propulsion team's results for the third quarter. Operating margins remain at solid 16.2% as the team manages through the effects of the strike. Aftermarket sales for propulsion products increased over the third quarter of 2007 as we continue to penetrate that market. The team also made good progress on development programs and just lastly week announced their participation as the engine pylon provider to the Mitsubishi Regional Jet. On slide five you see the wing systems segment which is comprised of our Spirit Europe and Oklahoma operations. Both operations have Boeing products that were impacted by the strike, while our Airbus products remain on track. Our Spirit Europe and aftermarket teams opened the Spirit European repair station during the quarter. This is part of our ongoing effort to expand Spirit's presence in the aftermarket business around the globe. And recently we announced our participation on the Gulfstream G250 program. Spirit's designing and manufacturing the fully integrated wing at our Tulsa Oklahoma facility. We commenced to work on the design and manufacturing planning for this Gulfstream product since 2006. Now let me turn the slide six and give you a brief update on the 787. As you would expect deliveries to Boeing on the 787 are also impacted by the strike. We did deliver aircraft number four during the quarter and met the customers' condition of assembly requirements on aircraft number five. Aircraft number six, the last slide test aircraft is progressing through the systems installation process. Overall product quality remains high and we continue to work with the supply base to unable a smooth production ramp up. We are continuing to work closely with our customer on a cooperating necessary engine changes on flight test aircraft and the first in service aircraft. Our internal efforts remain focus on productivity improvements and increased asset utilization. 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 eight summarizes our financial results for the third quarter, which as just said were negatively impacted by the IAM strike at Boeing. Despite that revenues were up about 6% over the prior year period driven by slightly higher unit deliveries to Airbus and Hawker Beechcraft, favorable volume base pricing and a more than doubling of our aftermarket sales. Boeing deliveries were flat year-over-year. We estimate the strike impacted third quarter deliveries by nine units or about $53 million of revenues. Operating profit at a $111 million with up 4% as margins were largely flat year-over-year. The strike impacted operating profit by an estimated $26 million, so absent this event operating margins would have improved by about a 170 basis points over the prior year period and would have been about the same as the second quarter. Fully diluted earnings per share of $0.53 for the quarter were down 12% from earnings of $0.60 per share on the prior year period, largely due to the strike impact of an estimated $0.13. The prior year period benefited by $0.09 from the recognition of higher research and experimentation in safe tax credits. The current year period have similar benefits of about $0.02 per share. Cash flow from operation was $68 million and capital expenditures of $56 million for the quarter reflect our continued investment in the 787 program and another new programs revised 787 payment terms negotiated earlier this year and strike related inventory build. Slide nine highlights our progression on key P&L metrics over the trailing four quarters. Third quarter revenues grew 6% year-over-year but were down 3% sequentially from the second quarter due to the $53 million dollar strike impact. Absent the strike revenues would have grown 2% the continuation of the growth sub trend we experienced for eight straight quarters. Total 787 revenues in the quarter were approximately $15 million about the same as the second quarter, as we delivered one forward fuselage unit in both periods. Operating income margins were 10.8% in the quarter slightly below the prior year period due to the strike impact mentioned earlier. On a sequential quarterly basis operating margins were down about 200 basis points due almost entirely to the strike. Lastly, third quarter fully diluted EPS of $0.53 was down 12% from the prior year period due to the $0.13 strike impact, which also caused sequential earnings... quarterly earnings to decline. Our effective tax rate of 29.5% in the current quarter was higher than the prior year period due to the increased level state and R&D credits recognized in the prior year period. Turning to slide 10, R&D expense in the third quarter was $13 million, about flat with the prior year period in absolute dollars but a lower percentage of sales as the business continues to grow. Sequentially R&D spending grew slightly from the second quarter as we began a modest ramp up in spending for some of our recently announced new program wins. SG&A expense for the quarter was $39 million about 9% below the prior year period due primarily to lower non-cash stock compensation expense. Sequentially, SG&A was down slightly from the second quarter, as we continued to tightly control the administrative expenses in this uncertain market environment. Declining to flat absolute dollars of R&D and SG&A expense combined with rising sales continues to be 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 third quarter of '07 to 5% in the third quarter of '08 an 80 basis point improvement in operating margins. Slide 11 summarizes the P&L for the third quarter and the year-to-date versus the same periods in the prior year. During the quarter, Spirit realized approximately $13 million of net unfavorable changes in contract estimates versus no net change in the prior year period and a $4 million favorable change in the second quarter. Boeing IAM strike contributed $18 million to the current quarter performance, so absent the strike Spirit would have recognized the $5 million favorable cumulative cum catch adjustment. The strike has an unfavorable impact on Spirit's contract block profitability, because it extends the timeframe for reaching the end of the block, which is measured in a fix number of units delivered rather than time. This incorporates more fixed costs into the current blocks thus reducing the profitability. Profitability the current block is also impacted by the lower productivity and related disruption associated with the shortened work week we're experiencing. Most of the current period unfavorable cumulative catch was realized in a fuselage segment. It should be noted that the $18 million strike related adjustment assumes the strike ends with a favorable ratification work and a return to work by early next week followed by an approximately 90 day transition period that's there. If this strike were to extend beyond that point or the ramp up period is longer and additional negative cum catch adjustment could result in the fourth quarter. Slide 12, summarizes the recent quarterly changes in our cash and debt balances. Cash balances at the end of the third quarter of a $178 million increased $31 million or 21% from the prior quarter end largely due to improving cash flow from operations. The third quarter included $55 million of customer cash advances for the 787. Total debt balances decreased slightly in the quarter due to some minor schedules of repayments. Driven by consistent profitability and growing shareholders equity Spirit capital structure continues to improve. At the end of the quarter, our net debt to capital ratio was under 22% versus 27% at year-end 2007. And our net debt to 2008 EBITDA ratio continues to be well below one. Additionally, at the end of the third quarter the company had over $800 million of short-term liquidity available through our revolving credit agreements and available cash balances which we continue to believe is fully adequate to fund projected cash flow needs. Slide 13 details our cash flow for the first nine months of 2008 versus the same prior year period. Year-to-date cash flow from operations was positive a $147 million as higher customers advanced payments that improved profitability continue to offset working capital growth. The year-to-date working capital build was largely driven by the reschedule of the 787 deliveries earlier this year and preproduction and non-recurring engineering spending for some of our other new programs including the 747-8 and our two new Gulfstream programs. Inventory growth includes an increase in capitalized development costs of $41 million for the quarter entirely for new program unrelated to the 787. At the end of the quarter the capitalized development costs were $375 million in total including $237 million for the 787. Capitalized developments for the 787 were largely completed in the third quarter of 2007. The strike also contributed the higher inventory balances at the end of the quarter due to the timing lag of rebalancing our supply chain due reduced delivery schedules. The decline in our accounts favorable balance at the end of the quarter results of a function of reduced incoming material from the supply base. Capital expenditures of $56 million in the third quarter and $175 million year-to-date were down 19% and 23% respectively from the prior year periods, as the installation of production capacity for the 787-8 program continues to wind down. Lastly, I would like update our expectations for financial guidance. As you know, Spirit withdrew its 2008 guidance at the start to Boeing IAM strike knowing it would have a material impact on our 2008 results. Given the remaining uncertainty for the final return to work date and more importantly the pace of the ramp up after the strike concludes, we're not in a position to update our guidance today. We plan to update 2008 and issue our initial 2009 guidance as soon as practical after the strike concludes and we have better visibility into the post strike delivery schedules. Post strike delivery schedule will dictate how quickly Spirit can burn down the units built during the strike in advance of customer requirements. We currently expect to provide 2008 and 2009 guidance no later than the end of November. If the strike ends early next week, we estimate the post strike transition period would extend approximately 90 days so the impact on 2009 revenues and earnings is not expected to be significant. I would 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 14 with a few brief comments. The core business is performing well and we are financially strong as we manage through the challenges of this work stoppage at Boeing. Our continuous focus is on meeting our customer commitments while growing and diversifying our business in what we firmly believe to be good long term markets for commercial aerospace products. However there is no question that these are extraordinary times for people, for employees, for governments and businesses around the globe. At Spirit, we're working closely with our customers, our employees, our business partners and our communities as we navigate through these challenges. Let me just add here a special note of appreciation and recognition to the Spirit AeroSystems team. They have and continue to perform with distinction throughout the course of these disruptive times. I have the utmost confidence in their abilities, their teamwork, their perseverance and ultimately their performance. We'll be glad now to take your questions. Question And Answer

[Operator Instructions]. And your first question is from the line of Robert Stallard from Macquarie. Please proceed. Robert Stallard - Macquarie Research Equities: Good morning. Jeff Turner - President and Chief Executive Officer: Good morning. Rick Schmidt - Executive Vice President and Chief Financial Officer: Hi Rob. Rick Schmidt - Executive Vice President and Chief Financial Officer: The first question I'd like to ask you is on the timing of the catch up after the strike. I know that there is a lot of uncertainty here but Rick I was wondering if you could give us some idea of how you're expecting the revenues, earning and cash flow to come backup in Q4 and Q1 as Boeing gets back online? Rick Schmidt - Executive Vice President and Chief Financial Officer: Sure. Well as we said Rob, we expect there to be a 90 day transition period after the conclusion of the strike and we need to add periods to burn... as we said burn-off the units that we've been building during the strike. I mean if you look at very high level math prior to the strike, Boeing was producing about 40 units a month. We've continued to produce at a rate of about 60% of that, so roughly 24 units a month and by the time Boeing returns to... assuming that the ratifications both this weekend and return to work fairly soon. We'll have about 2.5 months of time that we were producing at that rate versus Boeing's production rate obviously where they go in producing so that would translate into somewhere around 55 to 60 units that we're ahead of Boeing in terms of delivery. So those are the units that obviously we will not deliver. We saw the first part of that already in the third quarter and you'll see the remainder of that into the fourth quarter and probably into the first couple of weeks of 2009. Robert Stallard - Macquarie Research Equities: So, basically you could be at this sort of 24 months rates through the whole of this quarter and then steadily start to see things move back up to the sort of 40 months may be in to some February or something like that. Rick Schmidt - Executive Vice President and Chief Financial Officer: Yes, good analysis Rob. Robert Stallard - Macquarie Research Equities: Yes. And is there anything on the cash flow side. Is that fairly equivalent to what you see in revenues and earnings or that the inventory would wind down at a similar sort of rates, is nothing unusual there. Jeff Turner - President and Chief Executive Officer: We would certainly expect some inventory burn-off as... we obviously have slow down or incoming material. We noted that there is a lag when you do that so we probably did have some inventory build in the third quarter that we weren't expecting, but it will take us some time to burn that off. I would expect that it will be longer than the 90 day period, but certainly during the first part of 2009, we'll burn off that inventory. Robert Stallard - Macquarie Research Equities: Okay. Just as a follow up, you mentioned that, you had been delaying some of the inbound deliveries from supplies. How do you look at your supply chain, has there been any impact of the wider financial crises on your supply chain in terms of liquidity or financing or other sort of problems? Jeff Turner - President and Chief Executive Officer: As yet, we work very closely with our supply to keep them healthy as well to be able to support it. So, as yet there is nothing out of the ordinary that we've had to deal with. We do very closely monitor that Rob, and pay attention to it on virtually a daily basis as you can appreciate. Robert Stallard - Macquarie Research Equities: That's great. Thank you very much. Jeff Turner - President and Chief Executive Officer: Thank you.

Your next question is from the line of Doug Harned with Sanford Bernstein. Please proceed. Doug Harned - Sanford Bernstein: Good morning. Jeff Turner - President and Chief Executive Officer: Good morning, Doug. Doug Harned - Sanford Bernstein: I was interested in understanding how the strike impact to each of the units. Obviously, Fuselage Systems that was quite important. But, can you talk about in Propulsion and Wing Systems, what happened there? Jeff Turner - President and Chief Executive Officer: In general, across all of our products that we're shipping to Boeing. We went immediately to two or three day work week, which amounted to 60% production. And basically, what happened in the fuselage area, you have much larger pieces of equipments so they tend to take a lot more space a lot quicker than in some of the component areas. But, in general, it was pretty consistent across the segments and that we're supporting Boeing programs in terms of going to 60% production rate. Rick Schmidt - Executive Vice President and Chief Financial Officer: As we mentioned Doug, the majority of the kind of the net $13 million unfavorable adjustment a quarter was reflected in fuselage because as I just said, the 737 fuselage is our biggest program, and it's a very high value add, has a long labor content. So it tends to be more impacted proportionally than some of the other programs. The propulsion business was basically kind of a net zero in cum catch adjustment, so they actually had some favorable adjustments on other programs or on other activities that offset the strike impact and the Wing Systems had a small negative cum catch on the order of about a couple of million dollars. Doug Harned - Sanford Bernstein: Well, on Wing Systems, you talked about operational efficiency improvement and... does that comes from... and there is also discussion of lower R&D there as well and given that there is a fair amount of new work you've got in Wing Systems. I am interest in how we look at this going forward both, in terms of the lower... where R&D would likely go there. But also, and when you look at this at the operational improvements, is this reflect better performance that Prestwick, Tulsa or expectations of what you're going to see in Malaysia? Rick Schmidt - Executive Vice President and Chief Financial Officer: Well, it reflects better performance at both of those locations. The R&D expense is a major contributor. If you look at the year-over-year improvements in margins, we had about a 160 basis point improvement in margins in Wings System, and that was in the face of a the negative cum catch that I mentioned earlier. So the improvements are coming from lower R&D expense. We had fairly higher levels of R&D expense in 2007 for the two Gulfstream programs in those periods. Those are now largely completed in their R&D phase. And some of the newer programs that we've won there again, we have different contract terms. And as we've said previously, we don't expect to see as much R&D in those programs. So, to your question of sustainability, I do believe that, kind of margins improvements that we're seeing in both, Tulsa and in Prestwick are certainly are sustainable going forward. Doug Harned - Sanford Bernstein: Butthe R&D I mean, that's in contrast with what you're seeing in Fuselage Systems, which was up? Rick Schmidt - Executive Vice President and Chief Financial Officer: Fuselage was up a little bit for some of the new programs that we've won there but it wasn't up dramatically. Doug Harned - Sanford Bernstein: Okay, great. Thank you.

Your next question is from the line of Cai von Rumohr with Cowen & Company. Please proceed. Cai von Rumohr - Cowen & Company: Yes, thanks so much. The $18 million cum catch may be tell us a what does that assume in terms of when the strike was going end and your recovery. And secondly, how much if any of that is recoverable from Boeing? Rick Schmidt - Executive Vice President and Chief Financial Officer: In terms of assumptions Cai, the strike.... the $18 million reflects the strike ending about now and or early next week as we said. So about in this timeframe, and assumes the 90 day ramp up period that we talked about earlier. So, if our crystal ball is clear enough, and the events happen kind on that schedule, then that should be the progress [ph] of the expense that we'll recognize is related to the strike in terms of looking backward on the revenues. But obviously our revenues going forward will reflect slightly lower profitability because of the cum catch adjustment that we referenced. In terms of recoverability, we do have the opportunity to discuss with Boeing the disruption cost associated with the strike and I'm certainly we'll have those discussions. Cai von Rumohr - Cowen & Company: Okay. And lastly R&D increased this quarter and the new programs are ramping. Could you tell us just qualitatively will that continue and are you seeing any indications that customers may delay some of those programs given the change in environment we're operating in? Rick Schmidt - Executive Vice President and Chief Financial Officer: To take the second question first Cai, we have seen no indication at all from our customers that they would delay. We continue to talk to him about that. I think our customers as well as we believe strongly in the long-term viability of this market space. So what we've seen is actually some caution maybe on production type programs, but still a very strong commitment to the new development programs. Jeff Turner - President and Chief Executive Officer: Cai we've mentioned in prior calls that we did expect a modest ramp up in R&D from what we had experienced earlier this week... this year and I think that's what we're seeing now and I would continue to describe it as a modest ramp. I don't personally see R&D going up significantly from where we are today. Cai von Rumohr - Cowen & Company: Thanks. Jeff Turner - President and Chief Executive Officer: Thank you Cai.

Your next question is from the line of David Strauss with UBS. Please proceed. David Strauss - UBS: Good morning. Rick Schmidt - Executive Vice President and Chief Financial Officer: Good morning David. Jeff Turner - President and Chief Executive Officer: Good morning. David Strauss - UBS: Rick could you just give us a little bit more detail in terms of the negative cum adjustment. It sounds like you've extended the time to get through the block. So are you assuming that none of these deliveries that Boeing has effectively missed, that they're going to make those up. Rick Schmidt - Executive Vice President and Chief Financial Officer: Right. Well remember our blocks are defined in terms of the number of units, not time. So the number units in the block is going to be unaffected by the strike. I mean if there is a recovery of the units that we've lost, that would manifest itself in future blocks. And David clearly we're not projecting that in the timeframe of the current blocks. David Strauss - UBS: Okay and what... Rick Schmidt - Executive Vice President and Chief Financial Officer: David just a way to think about the impact on average again the blocks are going to extend roughly on the order of the length of the strike, so on average we're adding roughly two months, maybe a little bit more than two months to the average length of our contract blocks. David Strauss - UBS: Okay. So we're now looking to get into the new blocks may be early 2010 and late 2009? Rick Schmidt - Executive Vice President and Chief Financial Officer: That's exactly right David. David Strauss - UBS: Okay. And on 787, I might have missed it but I heard you delivered ship sets four and I think as of last call you had in progress or through 22. Can you just maybe give a little bit more color beyond four and five where you are with things? Jeff Turner - President and Chief Executive Officer: Sure. I think we did ship number four. We talked about number five meeting the condition of assembly and ready to go number six. It is also in the final installation process. I think seven and eight are as well. And I think we told you previously that the process ... the early fabrication process on the barrels had been shut down. It has not restarted. We had originally planned to restart it early in the fourth quarter that of course is being extended by the strike. So, our focus has been on making sure that we work in all of the productivity issues that we can think of the work. We're working very closely with our supply base to make sure we win. When we begin the ramp up that are both internal capability and our supply base are ready to support that. David Strauss - UBS: Okay. Thanks guys. Jeff Turner - President and Chief Executive Officer: Thank you.

Your next question is from the line of Carter Copeland [ph] with Barclays Capital. Please proceed.

Good morning gentlemen. Jeff Turner - President and Chief Executive Officer: Good morning Carter. Rick Schmidt - Executive Vice President and Chief Financial Officer: Hi Carter.

Just want to be totally clear on this. Rick the $26 million in op profit impact that you stated. Does that include or exclude the $18 million cum catch. Rick Schmidt - Executive Vice President and Chief Financial Officer: Yes, it includes it.

Includes it? Rick Schmidt - Executive Vice President and Chief Financial Officer: Right. So the reminder of the difference between 26 and 18 is just the normal profit.

Yes, margin on net deliveries. Rick Schmidt - Executive Vice President and Chief Financial Officer: That's exactly right.

Right. At the end of last quarter, you had basically an excess... a negative deferred production and excess under average cost if you will on several programs. I think the amount was $44 million. Does this adjustment now mean that that amount has been eliminated within inventory? Rick Schmidt - Executive Vice President and Chief Financial Officer: We say eliminated. I mean actually....

So, presumably you were... so your cost performance was running 44 million ahead of what you had originally assumed as of the end of last quarter but now you've taken this adjustment. Have you just taken an $18 million adjustment or did we then adjust all the way back that negative deferred production amount as well. Rick Schmidt - Executive Vice President and Chief Financial Officer: Well, the 18 million in effect we calculate the profitability on all the revenue that we've already recognized on all the programs. So and that, as you remember our current blocks go all the way back to the start of Sprit in the middle of 2005,

Yes, '05. Rick Schmidt - Executive Vice President and Chief Financial Officer: So we've got about $10 billion with the revenue roughly that we have already recognized behind it, so that $18 million represents the profit adjustments on that $10 billion plus revenues. So if you kind of do the math on that that would indicate that our total profitability, the impact is relatively small it's about 17 basis points over the entire length of the blocks.

Okay. But the amount that you reported last quarter of being essentially better cost performance, the $44 million of negative deferred production, wouldn't that then need to be applied over the same group, so wouldn't we get 18 plus 44 and that would be the adjustment over the revenue pool you're talking about? Rick Schmidt - Executive Vice President and Chief Financial Officer: Well remember most of this is the adjustment of cost that are still in front of us, not behind us. So, what we're adjusting now is the cost that we expect between the end of the third quarter in end of the contract loss. So actually deferred production actually was largely flat, was up a little in the quarter on a net basis but that's after recognizing the 18 million adjustment.

Okay. Thanks a lot. Jeff Turner - President and Chief Executive Officer: Thank you Carter.

Your next question is from the line of Joseph Nadol with J. P. Morgan. Please proceed. Joseph Nadol - J.P. Morgan: Thanks, good morning. Jeff Turner - President and Chief Executive Officer: Good morning. Joseph Nadol - J.P. Morgan: My question is on the $5 million positive cum catch up. I am wondering if you could share, if any color on that, what program or at least is that at least in non-Boeing. Rick Schmidt - Executive Vice President and Chief Financial Officer: No, actually it's across all of our programs which would indicated that it's primarily four Boeing programs. That's a continuation of the blocking and tackling that we've seen on the operational side for quite some time. We continue every quarter, we continue to operationally become more efficient, find other opportunities to control our cost and what we saw in the third quarter, absent the strike would have reflected a continuation of those trends. Joseph Nadol - J.P. Morgan: Okay. And how do we think about overhead absorption here in terms of the other parts of you business. You took the negative cum adjustment that was I guess specific to the Boeing programs impacted by the strike. Part of fives offset was, its sounds was Boeing programs but to this no negative impact on other programs in terms absorbing the fixed costs. Rick Schmidt - Executive Vice President and Chief Financial Officer: The $18 million includes all programs. Joseph Nadol - J.P. Morgan: Okay. Rick Schmidt - Executive Vice President and Chief Financial Officer: Its the loss of fixed costs across the board because a lot of those costs as you can probably appreciate are allocate it to all programs. So it does have an impact across board but obviously it impacts the larger programs more immediately. Joseph Nadol - J.P. Morgan: Okay. And then secondly you did note in your press release that you're still generating some non-recurring revenue I guess particularly in fuselage? Rick Schmidt - Executive Vice President and Chief Financial Officer: Right. Joseph Nadol - J.P. Morgan: Any color on... is that 787, or any color on that? Rick Schmidt - Executive Vice President and Chief Financial Officer: It's a number of programs. Its 747-A, its 777 Freighter. I think there is some P8 money in there. So it's crossing a number our large derivative programs. Joseph Nadol - J.P. Morgan: Okay. Alright, thanks guys. Jeff Turner - President and Chief Executive Officer: Thank you.

Your next question is from the line of Troy Lahr from Stifel Nicolaus. Please proceed. Troy Lahr - Stifel Nicolaus: Thanks. Jeff, I think you talked, you said the OEMs were cautious on production programs. Can you may be talk about your thoughts on the out years for kind of balancing supply with demand and how do you see production schedules working. I mean do you think that schedules needs to come down a little bit given the macro environment here? Jeff Turner - President and Chief Executive Officer: That's a great question Troy and I think the one we're all asking ourselves. Clearly, we all know the strength of the backlog and any number of scenarios that talk about some level even in melt away of those backlogs still has a very, very high demand. We saw some airlines continuing the order in the middle of all this uncertainty in the markets. I am a huge fan of steady stable production rate in an environment like this. I think there is arguments to do that. We know we have to respond to what our customers want to do. We saw airbus make announcement about what they were going to do with A320 rates that kind of follow the steady state pieces here. Boeing has not announced what they're going to do, so we will clearly follow and support with the customer needs. But I think we've got a period here we're '09 looks to be pretty stable from everything we're hearing from the marketplace and we'll see, I'm... like I said I am a huge fan of stable production rates and the long term demand certainly seems to be there. So Troy we'll see I think, we see... more wait and see than we see a strong lobbying within the customer base to do one thing or the other. Troy Lahr - Stifel Nicolaus: Okay. And then on the aftermarket side, can you maybe talk about the Southwest and the Continental program windows should really start rolling in. Should we... and how does that impact margins. Is there a learning curve associated with those or pretty good margins right away. Jeff Turner - President and Chief Executive Officer: Those would be solid right away. They're spares... spares contracts primarily. We remember we've talked about aftermarket as a good piece of business that we want to go get adds to our, clearly adds to our values. Its not huge and we've talked about in terms of above 5% of our total company, but we have seen very strong, very strong moves there with both the repairs... the repair business as well as the spare business. So those should be good, solid margin producing programs, and it shouldn't take long to ramp them up, because it's catalog spares and the two examples that you gave. Troy Lahr - Stifel Nicolaus: So still 5% in '09 is the quite the way we should think about it? Jeff Turner - President and Chief Executive Officer: In terms of our total... the total percent of our company? Troy Lahr - Stifel Nicolaus: Right. Aftermarket as a percentage of total sales? Jeff Turner - President and Chief Executive Officer: I think we've talked about 5% as the aspiration where we'd like to achieve it. Its somewhere south of that right now. Troy Lahr - Stifel Nicolaus: Okay. Thanks guys.

Your next question is from the line of Ron Epstein with Merrill Lynch Please proceed. Ronald Epstein - Merrill Lynch: Hey good morning guys. Jeff Turner - President and Chief Executive Officer: Good morning Ron. Ronald Epstein - Merrill Lynch: Jeff, a question for you. What is the SPEEA guys walk out. What impact would that have on you guys? Jeff Turner - President and Chief Executive Officer: I assume you're talking in Seattle. Ronald Epstein - Merrill Lynch: Yes. Jeff Turner - President and Chief Executive Officer: Well as you can appreciate Ron, that's certainly a scenario that we've looked at. It will... it would have some impact because duration with timing and duration would be a very important factors here. Frankly, if you look at what happened in the past, it has disruptive impact, but not to the extent of the full production shut down. So we're looking at contingency plans now. Clearly we're hopeful that doesn't occur. And we would have some impact though in my estimation, it would be less impact than what we've seen with the IAM. Ronald Epstein - Merrill Lynch: And... what was the major limit of the Legacy 7 series programs is continued kind of going to that? Jeff Turner - President and Chief Executive Officer: Yes, it would clearly depend on what the customer chose to do and where the customer was in their recovery from the IAM. Ronald Epstein - Merrill Lynch: Okay, okay, okay. And then Rick, just two quick little questions for you on the financials. When we go into Q4, what do you think about tax rate? Rick Schmidt - Executive Vice President and Chief Financial Officer: Well our tax rate should be quite low in the fourth quarter, because of the reinstatement of the R&D tax credit. That legislation was passed after the third quarter ended, so our nine month results don't include any benefit from that tax credit,. For the whole year, that's about roughly $8 million for us. So all of that would be booked in the fourth quarter, so we will have a quite a low tax rate in Q4. Ronald Epstein - Merrill Lynch: Okay, okay. And then for the year in terms of CapEx accretion, do we have any of that this year, and would that be booked in Q4? Rick Schmidt - Executive Vice President and Chief Financial Officer: Yes. Now we continue to book a modest amount of CapEx accretion in our results. I mean its declining all the time obviously, because the actual cash payments associated with that are now coming in. So what you'll see in the fourth quarter is roughly what you've seen in the first three quarter's of 2009. Then we'll record a diminishing amount in 2009 and then after 2009 it will be zero, as we would have recovered all the cash by the cash by the end of 2009. Ronald Epstein - Merrill Lynch: Okay, super. Thank you.

Your next question is from the line of Robert Spingarn with Credit Suisse. Please proceed. Robert Spingarn - Credit Suisse: Good morning guys. Jeff Turner - President and Chief Executive Officer: Good morning Rob. Robert Spingarn - Credit Suisse: Just want to go back to the strike delay and make sure I understand what Jeff said at the outset of the Q&A, which is you had nine aircraft delayed in Q3, so part one of my question is that would imply at least to me that you were still shipping to Boeing above and beyond the number of delays that Boeing had. Lead time you may explain that, could you talk a little bit about how that process worked. Did product actually move to Seattle or stay in Wichita and do I have this right and that the magnitude of the revenue impact of the strike would be about five times... four to five times in Q4 or what was it in Q3? Rick Schmidt - Executive Vice President and Chief Financial Officer: Let me try to answer your first question first. As we did I think I misstated maybe in my comments earlier. We follow the similar pattern of what we did in 2005, where we cut to a three days a week work and shipped in place primarily about 60% of normal volume. So, that's what we have been doing. We have been shipping in place, completing the units have them completely ready to ship and ship in place with Boeing. So that books is revenue for us and profit for us as well at that point now you.... In terms of the impact on Q4, I think your math is roughly right, we said the impact that we built ahead about 55 to 60 units ahead of Boeing's requirements. We reflected nine that impact within the third quarter, so that says we're some where around the mid 40s, mid to high 40 units that will have to get burned off between the fourth quarter and the first part of 2009. So it is roughly on the order of overtime. That's correct. Robert Spingarn - Credit Suisse: So Rick, and that mean, it's about, my math says it's about half a penny an airplane. But how we think about absorption, there have been a lot of talk about cum catch up and so on, but those get complicated, how should we think about absorption? Your fixed cost base in the quarter, and how that might magnify the per aircraft impact relative to what it was in Q3? Rick Schmidt - Executive Vice President and Chief Financial Officer: Sure. Well, as I said earlier the 18 million assumed that 90 day ramp up period after the strike concludes. So to the extent that our ability to forecast is accurate and I believe we've reflected as much of that impact already within the $18 million. That's really where the majority of 18 million comes from as you've got that fixed costs and again because as I mentioned earlier, our blocks are measured in units. So you get... in effect add a couple of months to the ends of our blocks, which drags more fixed cost into those blocks. And that's really the fixed cost that we're going to see over the course of the next three or four quarter... three or four months, sorry. Robert Spingarn - Credit Suisse: Okay. Rick Schmidt - Executive Vice President and Chief Financial Officer: Now, in terms of things like period costs, SG&A, R&D, those obviously are period costs. The absolute dollars don't change there much, and will reflect lower revenues. So as a percentage of sales, those will look a little bit higher in Q4 than they have previously. Robert Spingarn - Credit Suisse: And those aircrafts that shipped in place in Q3, there was cash flow on those or how do you booked those on the balance sheet? Rick Schmidt - Executive Vice President and Chief Financial Officer: Absolutely. Now those were just other than being shipped in place. Those units were delivered to Boeing title passed and Boeing continued to pay for them. Robert Spingarn - Credit Suisse: Okay, excellent. And then just a final question on 787 jets, what kind of rate, assuming we get back post this transition phase; what kind of rate where you guys capable of at this point, or are you capable of at this point? Rick Schmidt - Executive Vice President and Chief Financial Officer: That... that's a complex question in terms of... are you talking about.... Robert Spingarn - Credit Suisse: On 787. Rick Schmidt - Executive Vice President and Chief Financial Officer: For what time period? Robert Spingarn - Credit Suisse: Once we get back to normal. Rick Schmidt - Executive Vice President and Chief Financial Officer: Well, I think the key is early in the program, it's also a pull, so its a pull signal from the customers, so the giving up on the step I call it, and getting to a drum beat rate, is still out in front of its way. And we fully see ourselves as capable of supporting that, and we've said all along we facilitate for seven a month, so... and of course the key there is to manage smoothly the supply chain and reach those kind of rates. But, our facilities and our capabilities is well beyond demand at this point. Robert Spingarn - Credit Suisse: And the reason I asked the question is, there has been this presumption all along throughout the strike that at least it's giving suppliers some additional time to get that production ramp up. Do you feel that you've made significant progress during the last two months and whatever you might have needed to do. And how about those lower tier [ph] guys? Rick Schmidt - Executive Vice President and Chief Financial Officer: We have clearly Rob, we used the time, we've used the time to engineering change, required engineering change into the product to watch the supply base and to work with the supply base where necessary. And time will tell if that was, how successful that was. Robert Spingarn - Credit Suisse: Okay. Rick, just a final thing, is there a reason since you don't frame some kind of guidance given that you know what the per aircraft impact is and where you can just give some kind of sensitivity analysis? Rick Schmidt - Executive Vice President and Chief Financial Officer: Well it's really two variables Rob. The one first obvious one is the strike's not over yet. Hopefully there'll be a ratification both this weekend and the strike will conclude next week, but certainly that we're not taking that for granted. And then secondly, and what's more important is really what is the pace of the ramp up once the strike concludes because we articulated what we thought the ramp up would be. We obviously had to make certain assumptions on the ramp up in order to properly reflect it in our financial statements. But what the actual ramp up is could be faster, it could be slower than what we projected. So does that still is the variable but we need to have the dialog with the customer and determine exactly what that ramp up looks like then we can build our guidance around that. Robert Spingarn - Credit Suisse: Okay. Thanks, guys. Rick Schmidt - Executive Vice President and Chief Financial Officer: Thank you.

Your next question is from the line of Deane Mower [ph] with UBS. Please proceed.

Hi it's the GMP Securities. But in any of that sort of hammer on this guy's words, I just want to make sure I'm following Jeff's initial comments here in the Q&A. With the 50 and 60 units that include the ship in place units from the third quarter so some of those units have already... you've already booked revenue on. Is that correct? Jeff Turner - President and Chief Executive Officer: That is correct, yes. Rick Schmidt - Executive Vice President and Chief Financial Officer: Yes, that's correct.

Okay so... Jeff Turner - President and Chief Executive Officer: That's the net of what we've built in excess of what Boeing has delivered to airlines.

Okay. So effectively then that if I'm just trying to reconcile that generally your deliveries on a quarterly basis will mirror those Boeings, so you obviously delivered more than Boeing actually did in this quarter? Rick Schmidt - Executive Vice President and Chief Financial Officer: Right. That's take out of the ship in place.

Okay, exactly. That's what I wanted to check. Thank you. Rick Schmidt - Executive Vice President and Chief Financial Officer: Yes.

And your next question is from the line of Howard Rubel with Jeffries. Please proceed. Howard Rubel - Jeffries & Company: Thank you very much. The dollar has up strength in relative to the Euro and if we go forward Rick there's a fair amount of business doing on segment that have to is impacted by that. How fast will with that benefit of fourth review? Rick Schmidt - Executive Vice President and Chief Financial Officer: Well we actually have a relatively small foreign currency exposure because our largest contract out at press the A320 contract is actually denominated in pounds. So our net currency exposure is relatively small. That's why the impact is either strengthening or weakening of the dollar we've always said as it really immaterial impact on our results. The recent strengthening of the dollar obviously as we translate those pound revenues back in to dollars creates fewer dollars so there's a little bit of headwind there but its really not material to our results, Howard. Howard Rubel - Jeffries & Company: Alright that's fine. And then the other follow up which is the one that a little harder is, you addressed working capital, can you help me a little bit understand how I mean you've added $400 million in inventory and volume lag Boeing on the way up for the next six we'll call it 90 to 120 days. How do you think about what will happen to working capital and especially inventory from here assuming kind of we do get back to some reasonable drum beats towards the end of March? Rick Schmidt - Executive Vice President and Chief Financial Officer: Right. Yes, you really have to segregate the kind of the preproduction development costs associated with our new programs because all of our new programs will have that. So those are cost that we recover over the life of the contracts. So we will see some additional inventory build overtime to reflect that pre-production investment. On the other side though you see the actual physical inventory that we have and the inventory that we have for things like non-recurring cost that we have incurred and those will overtime be burned off as we talked about as we absorb the inventory that we built with the strike and deliver those units and rebalance our supply chain. So you have really got those two opposing dynamics. How those will net out in our 2009 numbers will obviously reflect that in the guidance that we'll provide before the end of November. Howard Rubel - Jeffries & Company: You had I think your other preproduction costs were up about $40 or $50 million in the quarter. Are we at a point where we're close to seeing that peeking or and then just related to that, you still have some recovery I guess on 747-8, it looks like you got some of the 78 recovery you still have some more there I mean just add some color and then I'll be done. Rick Schmidt - Executive Vice President and Chief Financial Officer: We do have some additional non-recurring recovery that we expect to get in the fourth quarter and in early 2009, but, on your other question on preproduction costs, the bill that you've seen in the last couple of quarters is primarily related to our two Gulfstream programs. Those now, we've been incurring those costs now for probably on the order of five or six quarters from the point we started. So, I mean those are approaching there at their peaks. But obviously, we have other new programs now that are starting to generate some spending as well. So, we're starting to see some A356 costs come in for both, the Section 15 and for the leading edge, and we'll start to see a little bit assessment cost overtime. So, the nature of the program will change as some mature in complete development. But, I think, overtime we will for... another year or two, we will see some continued growth in that account. Again, we hope that, and expect that it will be somewhat more modest going forward because there is customer recovery that goes along with a lot of that as well. But we will see some growth in that part of our inventory. For us, the opportunity for us, is to be able reduce inventory in other parts, and our physical inventory by improving efficiencies and turnover rates and billing some of the non-recurring which you've mentioned and getting the 787 delivered. You might remember too that we entered 2008 with the expectation of building substantially more and delivering substantially more 787 units than we have. And we're still carrying a lot of that inventory, so if that program starts to ramp up, we should certainly see that inventory start to come down as well. Howard Rubel - Jeffries & Company: Thank you. Jeff Turner - President and Chief Executive Officer: Thank you, Howard.

And your next question is from the line of Richard Safran from Goldman Sachs. Please proceed. Richard Safran - Goldman Sachs: Good morning. Rick Schmidt - Executive Vice President and Chief Financial Officer: Good morning, Rich. Richard Safran - Goldman Sachs: Just, first on the 787, I was wondering if you could comment on the status of Boeing compensating you for changes on the program and also, I'd like to see the expect that number changes should be falling off significantly by now, I just want to know if that's the case, and what you are seeing? Rick Schmidt - Executive Vice President and Chief Financial Officer: First question, as we on the assertion process, that continues to move forward, we are in active dialog on that, I've nothing to report at this point and... but it does continue to move and continue to have fruitful dialog there. And the second question was, as there continues to be changes... our own manufacturing guys, so any changes too many, but I think the program will get to getting the flight test programs going in the first unit, and we should see a slackening after that. Richard Safran - Goldman Sachs: Okay. And just one another, just quick, I noticed you very slightly dipped into the revolver, I was wondering if you expect any more borrowings under that going forward? Rick Schmidt - Executive Vice President and Chief Financial Officer: We actually didn't dip into the revolver in the third quarter. Richard Safran - Goldman Sachs: Okay. Okay, my mistake there, I am sorry. Thank you. Jeff Turner - President and Chief Executive Officer: Operator we have time for one more question please.

Thank you. And that question come from a line of Doug Harned with Sanford Bernstein. Please proceed. Doug Harned - Sanford Bernstein: Hi I have one more question related to R&D, could you talk about what your engineering head count looks like right now, and how you're projecting that going forward, is this flat or are you planning to take that up at all in any of the units? Jeff Turner - President and Chief Executive Officer: It's, Doug, it's relatively flat right now. We continue to have really a continually hiring some key engineering resources there. Those tend to offset contract engineers or contract houses that we use for the heavy load periods of new program. But through time, we're looking at a flat to slightly up as we look at our internal resources and then mitigate the total requirements with partners coming in industry. Jeff Turner - President and Chief Executive Officer: Okay.

That concludes the question-and-answer session. And ladies and gentlemen thank you all for your participation in today's conference. This concludes the presentation. And you may now disconnect and have a good day. .