Good day ladies and gentlemen and welcome to Spirits AeroSystems Holdings Incorporated Fourth Quarter and Full Year 2009 Earnings Conference Call. My name is Jerry and I'll be your coordinator today. At this all participants are in listen-only mode. We will be facilitating a question-and-answer session towards the end of the conference. (Operator Instructions). I would now like to turn the presentation over to your Mr. Alan Hermanson, Director of Investor Relations. Please proceed sir.

Good morning. Welcome to Spirit's fourth quarter and full year of 2009 earnings call. I am Alan Herminson and with me today are Jeff Turner, Spirit's President and Chief Executive Officer and Phil Anderson, Spirit’s Vice President and Interim Chief Financial Officer. After brief comments by Jeff and Phil regarding our performance and outlook, we’ll be glad to take your questions. In order to allow everyone to participate in the question and answer segment, we do ask that you to limit yourself to one or two questions. Before we begin, I need to remind you that any projections or goals we may include in the discussions today are likely to involve risks which are detailed in our news release, in our SEC filings, and in the forward-looking statement 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. With that I would like to turn the call over to our Chief Executive Officer, Jeff Turner.

Thank you, Alan and good morning. Let me welcome you to Spirit’s fourth quarter and full year earnings call. I'll begin with a look at our business and associated performance and Phil will walk us through the financial results and guidance and after that we’ll be glad to take your questions. First let me say I’m disappointed with our fourth quarter and full year 2009 results, we’ve fallen short of our projections. 2009 has clearly been a year filled with disruption and challenges nonetheless our performance has not measured to my expectations. Having said that over the past 4 and half years our team has been aggressively executing our long-term strategy for growth and diversification and our vision has matured. Our core businesses are funding significant portions of our growth, as we start to see some of our new programs enter their initial stages of production. In particular four of Spirit’s new programs entered the flight test base in the fourth quarter of 2009. Programs now in the flight test development phase include the Boeing 787, the Gulfstream G250, Gulfstream G650 and the Rolls-Royce BR725. Additionally we have two more programs scheduled to enter flight test this year. Its truly exciting to be part of the progress our customers are making and to be part of the next generation of large commercial and business jet products. 2009 marked key milestones for Spirit as our core businesses delivered significant ship sets (ph). But we have made good progress over the last four years on improving costs and efficiencies. We did not capture all the anticipated cost improvements, largely in the 737 and 747 accounting blocks as they concluded in the fourth quarter of 2009. This resulted in an unfavorable adjustment to these initial accounting blocks. Over, approximately $26 million or $0.13 per share, also included in the $26 million charge, with 5 million of absolute in surplus inventory that was identified prior to block closure. Additionally the CH- 53K program, which is in the systems development and demonstration or SDD phase, accounted for $8 million or $0.04 per share charge, due to additional development costs supporting our weight improvement plans. As our initial design has required refinement to meet our weight commitments. As we work through the design elements of this program, the program forecast continued to be profitable and we have expectation of significant following work. As our development programs mature over the next couple of years, we will continue to focus on program execution while addressing typical development challenges including design evolution, change in weight management and scheduled compliance. We’re tackling these challenges by working with our customers, fulfilling program requirements and ensuring solid action plan during place that will yield the desired results. While executing our development efforts during the quarter we continue to support the 787 program with the restarted of the composite fabrication area, while preparing our supply chain for production ramp-up. The team is excited to see the 787 in flight test and is beginning a regular production pace. While global economic conditions show signs of improvement and we see stabled nutured in demand for our products. We continue to remain cautious regarding the outlook for commercial Aerospace. Our focus is on supporting our customers while staying poised to react to market changes, overall our backlog remains substantial at 28 billion. Our balance sheet is strong with robust liquidity and we are well positioned to react quickly to market change. Now let’s talk about some of those specific accomplishments across the business, during the quarter, beginning on slide 3. These slide systems delivered operating margins of 11.5% on $506 million of revenue, during the fourth quarter of 2009. The revenues were up, margins were relatively flat, due to unfavorable contract adjustments and lower CH-53K profitability, due to additional costs supporting the weight improvements, weight continues to be an area of focus as we work closely with our customer to meet program goals. We made good progress with this activity while continuing to grow our partnership with Sikorsky. The Fuselage segments celebrated a historical milestone with the completion of aligned unit 3132 of the 737 next generation Fuselages. This amount was significant for us because of its comparative history in which we built a total of 3132, 737 classic Fuselages during its production line from 1967 to 2000, a span of 34 years. In comparison, it has taken us only 13 years to build the equivalent number of 3132 next generation Fuselage, which truly demonstrates our design and build strength. The core business continues to perform well as we deliver newer derivatives. We shipped the 24777 crater for Fuselages, 13, 747-8 crater, and continued to support test activities for the P-8A Poseidon. The team was progressing on the AirBus A350 XWB program and construction sites for both Kinston, North Carolina and Saint-Nazaire, France are well underway, and our development teams continue to partner with their bests focussing on technical and schedule requirements. On slide four, you see the Propulsion team delivered operating margins at 9.8% on $258 million in revenue during the fourth quarter of 2009. These margins were lower than the same period in 2008 due to unfavorable contract adjustments and lower aftermarket volumes. The core business continues to perform and produce some of our newer customer hardware. In particular, we’ve delivered our 15 shifts that of 787 engine pile on, our fourth 747-8 engine inlet and our eight 747-8 pylon shift sets. The Propulsion segment continued to make progress on development programs by delivering the third and fourth inlet and thus reversed with flight test units for the Rolls-Royce BR725 engine on the Gulf Stream G650 business jet. Our team continues to work with the customer supporting certification activities as well as transitioning from development to initial stages of production. As with all new programs, as we bring this BR725 into production, we are focussed on a smooth ramp up and achieving our cost curves. Additionally, our pylon teams supporting the design and build of Bombardier C series jet and the Mitsubishi Regional Jet continued to progress well in their early stages of development. On slide five, you see the Wing System segment which is comprised of our Spirit Europe, Spirit Malaysia, and Oklahoma operations. The wing team delivered improved margins with increased revenues from the year ago quarter on additional volumes. The core business at Spirit Europe continues to execute well and they are making good progress on the development of the A320 XWB Wings power package. Activities in Spirit Malaysia continue progressing well with another milestone reached as we are now in full rate with simple production of the A320 composite wing components. Our Aerostructures team in Tulsa continues delivering high volumes of core products along with new programs. Particularly, the group delivered the 12, 747-8 fixed leading edge wing section. The Tulsa team is also progressing with development programs and now has three of their four new programs in the flight test phase as they develop. Our focus continues to be after filling our customers schedule and technical needs with emphasis on cost improvements and weight reduction activities. We continue to work closely with our customers as we move from development activity into production. Although, the overall aftermarket industry has been depressed, we have continued to expand our aftermarket business to new areas of opportunity, which positioned us for growth as the market returns. In November, we announced the opening of the joint venture repair station in Jinjiang, China, which will provide composite repairs and overall services across the Asia Pacific Regions complimenting our North American and European repair centers. Additionally at year end, we launched our global sales and distribution of aftermarket spareparts, which will allow spare to strengthen relationships with our international customers and respond directly to their spare parts requirements. Now, let me turn to slide six and give you brief update on the 787. We delivered 54 Fuselages in the fourth quarter and 11 unit by the year with unit number 15 shipping before year end. Our 787 team began to restart the composite four Fuselagic fabrication areas. The team continues to focus on production readiness to ensure both internal processes and our supply bases are prepared for a smooth ramp up of production. Overall product quality remains high. As we continue to incorporate the necessary engineering changes on the initial in-service air plans. Our internal efforts remain focussed on productivity improvements and increased utilization of the capability and capacity that we have put in place. The key is billing the production line and driving rhythm into our backward flow so that efficiencies can be realized. Now, let me turn it over to Phil who will provide more details on our financial outlet and results.

Thanks Jeff and good morning. I will begin with our key financial metrics for the fourth quarter on slide 8. Revenues for the quarter for 1.78 billion of 67% compared to the fourth quarter of 2008 has the eye in strike at Boeing in late 2008 inversely impacted fourth quarter 2008 deliveries. Operating margins were 7.9% in the quarter above the prior year period, but lower sequentially than the third quarter of 2009, operating margins of 12.4%. As yet mentioned, the fourth quarter of 2009 operating performance included a 34 million unfavorable team of the catchup adjustment reflecting approximately 26 million of cost associated with the initial 737 and 747 block close out and $8 million associated with the profitability adjustment on the CH53K program. You will recall these initial contract accounting blocks began in June of 2005, completed in the fourth quarter of 2009, and represented over a 9 billion contract revenues. Our current contract accounting blocks on these programs represents approximately the next two years forecasted deliveries. Fourth quarter fully Delivered EPS of 0.36 cents with significantly higher than the same period last year primarily due to the higher sales and operating income. Our effective tax rate in the quarter was approximately 31% which was consistent with the other quarters of the year. Lastly, fourth quarter cash flow from operations was 197 million which included anticipated payments for development programs, capital expenditure for $70 million for the quarter. In summary of our full year 2009 results is on slide 8. For year 2009 revenues grew 8% to over 4 billion. up from 3.8 billion in 2008 as total deliveries for large commercial aircraft increased in 2009. For year 2009 operating income was 303 million down from 406 million in 2008.primarily due to the charges recorded in the second quarter. Fully diluted EPS for the year was $1.37 compared to $1.91 in 2008. The benefit of the higher deliveries was more than offset by the unfavorable second quarter adjustments mentioned previously. Cash flow from operations was a negative 14 million for the full year of 2009 compared to a positive 211 million generated for the full year of 2008. The company’s cash flow ship is primarily driven by the change in custom advances and deferred revenue and partially offset by lower net inventory values, increased accounts payable and lower accounts receivable. Capital expenditures for the full year of 2009 were 228 million slightly less than in 2008. Slide 10 summarized the third and fourth quarter of 2009 cash and debt balances. Cash balances at the end of the year were 396 million .up 152 million from a year ago largely reflecting the proceeds generated from the issuance of senior (ph) unsecured notes in the third quarter of 2009 and receipt of unplanned non-recurring payment associated with our development programs in the fourth quarter. So, our debt balances increased slightly in the quarter due to additional borrowings on a Malaysian term loan. At the end of the fourth quarter, our net debt to capital ratio was 25% versus 22% at the year end of 2008. Our total debt to total capital ratio was 36% at the end of the year. The company’s $729 million revolving credit facility was undrawn at the end of the year. This facility will cut down to 409 million in capacity in June of 2010 and a planned maturity of June 2012. We continue to believe that this level is adequate to fund projected cash flow needs. Additionally, we enter 2009 with almost 1.1 billion in short term liquidity available to our revolving credit agreements and available cash balances. Slide 11 details our cash flow for the full year of 2009 versus 2008. Cash flow from operations was a negative 14 million, due to lower customer advance payments and deferred revenue were partially offset by improvements in payables, lower inventory growth as compared to 2008. The current year growth and inventory was primarily driven by Seven-Eight-Seven spending a new program investments partially offset by higher Seven-Eight-Seven unit deliveries. Improvements in accounts payable was driven primarily by improved payment terms with our vendors. Capital expenditures were 228 million for the year down 8 million from 2008. Slide 12 summarizes our guidance for 2010. So, 2010 is a pivotal year as we grow into Respire (ph) business Core of our business remains strong as we work to bring the next generation of large commercial aircraft and business jets to market. During 2010 we expect revenues to range between 4 and 4.2 billion dollars consistent with 2009 levels a demand for single aisle-aircraft remains strong and the 787 as well as other new programs offset lower demand for twin aisle products. Based on this projected revenue fully diluted earnings per share guidance for 2010 was expected to be between $1.50 to $1.70 per share. reflecting continued strong volume of the core business and increased margin pressure in the next contract accounting blocks driven by volume and model mix, increased depreciation expense, and lower pension income. We have also allowed for some conservative newer(ph) outlook given the new program development effort in 2010. Cash flow from operations that of capital expenditures is expected to be a use of 250 million with approximately 325 million in capital expenditures. Cash flow from operations in 2010 includes the liquidation of approximately 250 million in customer advances associated with the 787 program. and investment in other new programs. Included in the 2010 capital expenditures is approximately 100 million in tooling costs related specifically to the Airbus A350 X70B. No additional custom reimbursements are planned for 2010. Looking ahead at 2011 we expect cash flow from operations net of capital expenditures to be significantly stronger than 2010 levels. Slide 13 provides more details into the earnings outlook for sphere (ph). Riding (ph) at the top of the page we see our 2009 fully diluted EPS results for the year ended 2009. 2009 actual adjusted line factors out the significant items that impacted the year. Moving down from the 2009 adjusted line you see the primary headwinds to our profitability in the next contract accounting blocks. These items bring(ph) changes in volume and model mix, increasing depreciation expense and lower pension income. These 3 elements represent some of the margin advantages inherent in the initial contract blocks of Spirit. So, as you would expect we are working on a number or initiatives to improve the long term profitability of the company. First, we are continuing to work on productivity initiatives in our factories, in our support areas, and the supply base. We’ve also increased in our focus and prioritization of R&D investments. And as you know our program management best practice implementation is well underway. This is an area that has challenged our industry during the past decade. We are making good progress, we remain intently focused on improvement in this area as we execute our core business and new programs. Additionally, we will leverage off our new additional capability in Malaysia and North Carolina. As these operations come online and mature they will provide us with opportunities to improve the profitability. And finally, we continue to use a balanced staffing approach to ensure we have the team to support our future growth. You know the right things to do as we implement our long term strategy of growth and diversification. I’d now like to turn the call back over to Jeff for some closing comments.

Thank you Phil. And I’ll wrap up on slide 14. Executing our core business effectively and growing and diversifying our business profitably remains the cornerstone of our strategy. Over the next two years our focus will be on core business performance and execution of new programs while keeping our business healthy and our team for the future intact. We will continue our pursuit of productivity and efficiency as we seek for improvement across the enterprise. 2010 is a pivotal year for Spirit as we manage core business production, ramp up our new programs, support flight test activities on multiple programs and continue new program development. We have accomplished a lot over the last two-and-a-half-years and continue to make significant progress. With a strong backlog and balance sheet, I’m confident in our strategy to remain focused on delivering long term value for our customers, our employees and our shareholders. We’ll now be glad to take your questions.

(Operator Instructions). And your first question comes from the line of Ron Epstein with Bank of America. Please proceed.

Hey, good morning guys.

Good morning Ron.

Good morning, Ron.

Well, could you give us, I guess, some more color around how we should think about the margins in the segments going forward particularly in 2010?

Sure Ron. So, a few things. One, the mix in most of the segments are -- they have some pressure for the reasons we talk about. Right, a pinch in the expense comes there, a pinch in income lower, some more depreciation even in the core business frankly as we refreshed those assets as we go through time, and the (indiscernible) we have mentioned before that is a low margin program for us and that volume is coming up here in 2010 and will continue into 11. So, those are some major items that really put some margin pressure on that we are looking to offset by some of the initiatives that I talked about. And (indiscernible) coming on this year. Now that the R&D line, you know we expect to remain right at the 1.5% of sales quite frankly but nice slice of R&D (indiscernible) development.

Okay, and some of the initiatives you are talking about in terms of trying to save some cost, I mean, when do you think you could see some follow through in the numbers?

Yeah, we had been working on them obviously for a long time, ever since the company was formed. So, many of these aren’t new initiatives, I think as we move into the next quarter, I think, the appetite here is we are going to pick up a little bit of pace as we move through time. You know, that said, but we don’t want to sacrifice the growth that we see coming out of it for the next couple of years, as the market might return and some volume might pick back up on the core business and (indiscernible).

And I think -- let me just jump in there Ron, I think clearly -- ultimately the big lever on our margins is production volumes and getting through these new programs and getting them into production. We will continue to do the things to make improvements, incremental improvements in our core businesses and the more we execute our new programs to our plans, the better that’ll be for our margin expansion across the company.

And then the – really you should talk about cash flow getting better in 2011, although you left it pretty vague. Can you give us any more discussion around that?

Sure, let me just do that, I think I mean clearly we’ve got a stack up of new development programs here in working capital demands to build up some of these programs as well, but we’ve said kind of consistently that they we’re moving through this bubble of development and we think – we’re not going to pinpoint it down because we’re not giving guidance for 2011, but we clearly think if we execute the plans we have on the table today, that we’ll see ourselves moving into the positive side of cash within 2011.

Okay, thank you.

Thanks Ron.

Thank you.

And your next question comes from the line of Doug Harned with Sanford Bernstein, please proceed.

Good morning.

Morning Doug.

It’s actually Finbar Sheehy for Doug. But just wanted to get a little more from you on what happened with those charges at the end of the year. You may reference in your press release to moving resources across from certain mature programs to new development programs and I’m wondering is that part of what happened here? Can you give us a little more sort of detail on where those charges came from in Q4?

(ph) Sure thing bar. So, previously, we mentioned the CH53K, we talked about some clean up in the inventory, in the (ph) stub there’s 21 million kind of left over, which is mainly on 37 and 47 programs, so that 21 million is split roughly half between the two programs for a couple of different reasons though. The 47 was you know in the stage – in late in the third quarter where production was a bit uncertain from the customers, so we were, you know we – at the third quarter call, we were thinking about how we’re going to handle that, so that drove some disruption in the fourth quarter. We didn’t necessarily anticipate that, so that was one piece of it. The second piece was the 737 where we have a common processes in Wichita specifically where – the fabrication’s a good example where the (ph) fab areas supply all the product lines and the 777 fabrication (ph) every kind of started down in the fourth quarter and we held those heads transitioned to the 787 even though there’s a little skill mismatch there, but the goal was to try to transition them to the new programs. That drove a little more cost in the 737 given it’s a bigger part of the base, so again we didn’t necessarily get that in our forecast as we should have, but it was certainly the right thing to do as we moved into 2010 with increased requirements for people. You know, you throw those variables in and you close out (ph) the accounting blocks that have been running for four and a half years and you got to take them in that quarter, so that creates a bit of a challenge too where otherwise might be able to find ways offset some of the costs, so that’s a little more detail for you.

And you roll now onto new accounting blocks for those two programs, will we see a (ph) step as you just start to go onto a new block or is that going to be a fairly continuous transition in terms of margin, setting aside the sort of (ph) throw up that you just did there?

Yeah. So, some of the – if you look, you can normalize all the (ph) cubed catches out, you know, you’d probably see a consistent margin running through, maybe a bit of a step down for the reasons we talked about because the lower pension income and depreciation and mix are real headwinds we have here in the next accounting block.

Oh, thank you.

Sure.

And your next question comes from the line of Carter Leake with Davenport Company, please proceed.

Good morning.

Morning Carter.

All right, let’s see, where to start. How about let’s just start giving us a better understanding of how we could have so much uncertainty in the last quarter of a five-year block because obviously it leads to – we’ve got 777 block, I think coming up in February, do I expect the same issues and we’ve got the (ph) la-ford block, you know, to be blunt, how can we have confidence in your accounting block assumptions in that (ph) four block, it looks like you have 700 units over 23 to 27 months. Does that still holds?

It does. It does Carter. Let me just give you a couple thoughts and then Phil can pipe in here as well if he’d like to. One of the reasons we’ve cut the size of the block going forward in about half what we’ve used in the past is to get more – get a tighter rein on our forecasting in our approach to that. So we pulled it into where it’s about – about a 2 year 700 unit block as opposed to a 4, 4.5 year block so that to try to work out some of the noise that is inherit in the forecasting process of a block and contract accounting like we do. So that’s one thing we’ve done. The second thing is I think we’ve done quite a bit of work as we’ve mentioned in the past on upgrading some of our systems, that continues, we’re not happy yet with the speed with which we can link forecasting and reporting and we’re working on that. And we’ll see some improvements in that, in that as we go forward again. Recall this is – these were our first blocks over a span of a long period of time and I think arguably a fair amount of unusual disruption in them. So I think we’ll shorten them down and that’ll give us better focus as well as improving our systems and our system usage as we go through time. Phil, did you have anything you wanted to add to that?

No, I think that sums it up, I think your point is fair, (ph) you’ve won Carter. I think we left the guidance range somewhat wide at the third quarter, knowing we were closing out some of our largest accounting blocks from the same quarter and I think that’s something me and my team are going to go work on, is just the process, Jeff mentioned (ph) a accelerating improvement of flow time of the forecasting process. So we (ph) tend to get it ahead of the curve and are able to look at these things closer and we’ve already started that process.

How comfortable are you on the 777 block that expires in February, any reason to expect any big surprises?

No, well you can appreciate, Carter, with the surprise we got as we closed these blocks, the amount of additional scrutiny that, that we’re applying to those so, as of right now, we don’t see a big – we don’t see a big surprise coming, but again, I will remind us it’s a – I mean these again are long blocks and there’s some big blocks that are going to close still in front of us in the next few months. We think we’ve adequately taken those into account and of course we’ll know with absolute clarity as we close them.

All right, two quick ones. Do you still expect 6.1 to 6.5 in revenues in the 2013 timeframe, provided the 787 ramps as expected?

Yeah, I guess, we haven’t refreshed – refreshed it that far (ph) I’ve given some of the moving parts, Carter, I think a year ago, 2 years ago, we (ph) would have expected to have 6 flights as (ph) programmed having the 2010 here so. I think we need to go back and take a look at that, the markets moved around, so I wouldn’t (ph) apply on that, clearly you can expect revenue growth as we go through the years, 787 driving it as the business (ph) ship programs come on.

Yeah, I think the time – maybe without being specific on the scale and the timing, we clearly have driven a strategy that says that this is a growing market, these core products are going to grow in volume. The new products are solid, going to be solid performers in their segments in the market. And 2010 is a pivotal year for us, we need to get through, get some of this risky development behind us and get into production ramp ups and, so I think generally – I am very optimistic about where this business is going. I’m not quite as – I’m not clear enough right now to call exactly when we hit the numbers that you mentioned, but clearly our forecasts show growth in our core business and our new programs as they come, as they come in and I think our customers’ forecasts support that.

One last one, how do you view a potential 7378320 (ph) re-engine, positive or negative?

We view that as a great opportunity. A great opportunity for the customers if they decide to do that, those are great airplanes, they have – they enjoy a huge installed base, they’re efficient, they’re effective, we build a lot of parts for them. And we’re ready, willing and able to help with any upgrades that any of our customers’ products need.

Is it a rebid or if it comes up or do you have derivative rights?

There is a variety of options there, we look at each one of them as we need to bring value to the customer and to the customer’s airplane and so, there’s opportunities to expand our business with those and there’s opportunities to protect our business with those.

(ph) Great thanks for taking my questions.

Oh, you bet. Thanks.

And your next question comes from the line of Howard Rubel with Jefferies. You may proceed sir.

Um, thank you. You know one of the challenges you have going forward is going to be negotiating with the unions on new contract and so how do you get comfortable with the factoring in some outlook on that versus your costs and what kind of productivity have you thought about or considered in that process?

Howard, we have focused very – a lot of energy on our workforce, on the unions that represent them, from day one in this company. We view this as a partnership relationship. Our two core – our (ph) mantra if you will as we say we’ve got to keep our company healthy and we got to keep our team for the future intact, that clearly includes good solid relationships with all of our employees and their representatives. And we have taken that very serious, we don’t see this – any of our negotiations as a pop up event, we see it as an ongoing relationship and I think we’ve done the right things. I think we’ve got a great staff of people. I think their hearts are with us in terms of wanting to keep our company healthy and certainly keep our team intact. So, I think those are the attitudes that we’re going to carry into any negotiation and certainly the 2010 negotiations with the IAM are pivotal. I think we’re in a position to drive that partnership solid, certainly into the next contract so I’m – I know all these things are serious. They’re big deals. They’re important to the employees and to the company and the share holders, and we view them that way holistically and I have a measured level of optimism that we’ve done the right thing so far, we’ve got plans to really listen to our employees and make sure that what they need personally, what they need in terms of this company staying healthy and what we all need are in concert going forward. I think they are and I think the negotiation will show that.

Well, I mean maybe another way to ask it is are we at risk of seeing a cost price squeeze because your prices are more or less fixed with (ph) volume for the time being and your costs could go up substantially here or to some degree I mean how do we…

Well Howard, I think if they went up substantially that would in fact cause a squeeze. So, clearly we all see that as a requirement to keep the company healthy is to not allow that to happen. So, clearly any wage or incentive or whatever needs to be paid back if you will with productivity (ph) improvement and I think we all understand that.

Thank you very much.

Yeah. Thank you Howard.

Thanks.

And your next question comes from the line of Troy Lahr with Stifel Nicolaus. Please proceed.

Thanks Jeff. Just going back to Carter’s question real quick. It sounds like your guidance for this year does factor in maybe a more modest unfavorable (ph) if you can catch up on the 777 as you close that out. Is that fair?

Well, I think rather than specifically that, I think you could say our guidance has – I mean we’ve talked about the fact that 2010 has got a lot of issues in it, so we’ve tried to factor in clearly some conservatism if you will for development programs, for these things that are (ph) implied to us, I think you know they’re going well, but you never know what comes out of them until they’re done and some block closure – potential block closure issues as well. So, we clearly tried to be clear eyed about the kinds of things that could hit us in 2010

Okay and then – thanks, and then can you talk about your guidance a little bit? I guess on the low end, it calls for maybe revenues down 2%, the high end is up 3%, maybe you can jus talk about some of your key assumptions that are going to put you at either the high or low end or maybe how many deliveries you think on 77?

Yeah, basically it’s just for bowling around the 78 and some of the other new programs we have got are the biggest movers in a range. Specifically on the 78 I think we are looking to become 25 and 30 aircrafts this year. We will talk you about that. And then of course that will be greater than by the poll because savings – remember the 77 is going to equip break into a slower rate now to meet the customers’ demand. So we are pretty much in sync, not pretty much, we are in sync with our customer demand forecast and that drives out – that will drive out some range to compete some difference. For example, it’s not uncommon for – to get a swing of several aircrafts in a particular category as the detailed schedule changed through the…

Okay, and one of the (indiscernible) inventories and I think that was on 777 or 777 and 737.

It was actually across the board and it was a result of a very focused inventory reduction activity that we had underway. And we have a certain level of (ph) ONS that we expect and because of the (indiscernible) that we have putting on inventory we actually got little more than we had reserved for.

Okay, thanks guys.

Thank you.

And your next question comes from the line of Matt Vittorioso from Barclays Capital. Please proceed.

Good morning. Just a quick question. I appreciate the guidance on cash flow. Could you help us for modeling purposes to think about where inventories going throughout the year and how working capital might buy out over the next four quarters?

Sure, (indiscernible) so I think we will stick to what we earlier said at the third quarter where we expect overall inventory to grow modestly over the next couple of years as we move into development programs through development into production. So that’s still a good outlook. So that basically itself (indiscernible) you like to see it growing modestly quarter-over-quarter in the same profile.

Okay and the same sort of seasonality where the first quarter is fairly large use of cash and getting better through the year.

Yeah, I think that’s a pretty good way to think about Spirit given where we are at in development cycle, that’s right.

Okay. Then just real quick, simple modeling question. When I look at your business, the shift set deliveries versus what Boeing expects to deliver, is that one for one, it didn’t play out that way in 2009. I apologize this is a simple question.

No, it’s okay. There’s actually a fair amount of new (indiscernible) to that depending on the airplane program, where the program is in its maturity and frankly what level of integration we have completed here when we shift it. So for example 747 if you look at the details of the 47 echoes the four fuselage, the 41 section goes in multiple pieces earlier in the build sequence into (indiscernible). So it’s a longer leg between when we ship and when they ship. Then say the 737 which goes as a full complete fuselage and has a much quicker build in (indiscernible) So we are four to six months on the outside if you – just a couple of months on the inside difference between when we ship and we they deliver.

(indiscernible) a bit more on the Airbus side too. There’s always (indiscernible) Airbus I think this year. There’s always some spillover between years. So you might – if you don’t get (indiscernible) you get them in the front end of ’09 so they can move around year to year when you get close to the yearend. And then of course the airplanes or any new products we are going to be shipping well again of deliveries because the production ramp ups are occurring coincident with fly tests and ultimately delivery of the aircraft (indiscernible)

Right, right, so net-net on the (indiscernible) I know there’s a lot of moving parts in a lot of different platforms with new development programs picking up some of the (indiscernible) I think this in platforms that are coming down. Do you expect to be somewhat flattish for actual shift at deliveries or down a bit?

somewhat flattish. It’s going to range. But we could actually be up a little bit, that’s the upside of the guidance.

Perfect. One last quick one for me, it’s just on the aftermarket spares and maintenance stuff that you’ve talked about. Could you tell us what percentage or what piece of revenue that is currently? I don’t know if it’s significant. But what it is currently and where that shows up in the segment and just how fast that can grow?

It’s relatively small. We said all along that’s kind of a niche business for us and just on those products that we are the OE for. And our products don’t tend to be real spares prone. So it’s significantly less than 5% of our total. And it tends to be more in the propulsion part of our business because of the moving parts and stuff in the thrust reversers. And then some in the wings. There’s a few spare parts that come out of our fuselage business for major C&D tech for aircraft. But the majority of it, especially the repair side, is buried in those segments.

Okay, so still much less than 5% of your business, then?

In total, yeah.

Okay. Okay. All right, thanks very much.

Thanks, Matt.

And your next question comes from the line of Noah Poponak with Goldman Sachs. Please proceed.

Hi, good morning.

Hey, Noah.

Good morning, Noah.

What is the average monthly rate on 737 that’s embedded in the new block?

Very precise question there.

How are you going to answer that, Bill?

That’s a tough one.

Well, look. I think Boeing has been our customers guiding bullishly on ’37 this year. Clearly, we anticipate the continued pace at 31. 2010 feels strong as well. I think we remain kind of a little bit watchful of 2011, and we’re pushing it accordingly. But I think it still looks like it’s going to be a strong year as well. So I won’t give you a precise answer there, Noah, but I think between what I said and what Boeing’s giving you, you’ll probably get a good answer.

I mean I guess you guys had told us before that the estimated unit number was 700, I think you just spoke about that again, and I think you said the duration was 23 to 27 months. So the implied rate is 26 to 30. They’re still up 31, 10 looks pretty firm. They sound more encouraging on 11 than they did three, six months ago. If we do stay at 31, is that a clear area of upside to your assumptions?

Yeah, we tend to be – one year out, we’re definitely thinking and when we get past 12 months given the market condition, we’ll be a little bit concerned about their share.

Okay. And the margin performance is mixed here, certainly lower than the average aerospace supplier and their obvious reasons for that. But you guys are giving a lot of different reason and a lot of detail behind how you can improve the margin. What is the longer-term profitability of this business as we look out three to four years?

Well I think we said pretty consistently that we think – as the programs themselves mature (indiscernible) rates remain strong and high, this is a mid-teens kind of business. And of course you get all kinds of moving parts. You get surges for higher rates and you get a drag. If the rates go lower, you get the implications of new programs as you bring them on. They can – frankly, they tend to be less profitable in the early parts in early blocks and more profitable in later blocks, so it has to do with the mix of your programs. Frankly it has to do as we’re seeing here, how many of these new ones you have and if they for some reason or other stack up on top of each other, cause you more challenges than you had in the plan. But ultimately I think production programs, mid-teens is probably a reasonable set of estimates.

Okay. And at the last one, can you maybe just give us a little bit more thorough update on the Gulf Stream programs? We have both of those in the air now, you put a new team in place, just maybe some update on how we’re doing there.

Sure, glad to. Challenging programs, as we’ve talked about solid customer knows what to do and good airplanes looks just like, clearly we’ve talked a lot about ACs we had on the 250, we’ve answered a lot of questions about (ph) bleed over on the 650, our answers I think have been consistent that those haven’t gone as smoothly as we wanted them to, the 650 is really a good airplane program for us. We suffered with some start-up issues and have gotten a team – (ph) had switched out our team as you know in Tulsa. We’ve augmented the new team frankly to keep things moving like they need to move. So I think, we’re going to see 2010, we’re going to see it that smooth out, we’re at the front end of – what looks like a very solid significant program with a good long production run on it so. We’re doing the things in 2010 to stabilize that, make sure, it’s ready to go and deliver what we need to deliver in 2010 and be ready for the first stage of full rate production in 2011.

Thanks a lot.

Yeah. Thank you.

(Operator Instructions) And your next question comes from the line of Lucy Guo from Macquarie. Please proceed. Lucy Guo - Macquarie Capital (USA), Inc. Hi, this is Lucy calling in for Rob.

Hi Lucy. Lucy Guo - Macquarie Capital (USA), Inc. Hi, just a question on 2011 again, I know it’s so early to talk about it, but you may potentially have additional unfavorable volume and next issues again if there were any production cuts and you have uncertainties surrounding the 787 ramp-up. Can you maybe just talk about the challenges and opportunities that lies beyond 2010?

Well, just in general Lucy, I would say that we said early in our remarks that we saw 2010 as a pivotal year, I think we’re going to see a lot of these development programs move into production, we were still going to have some development programs in 2011, clearly if there is depressing impact on the core business, I mean, clearly that would impact this in 2011, we frankly don’t see that, we’re cautiously optimistic. We’ve got what looks like a real solid base for 2010 and some indications is that could move very strongly into 2011. So I would say at this point in time, as I look to the future (ph) in response, I think it was maybe to Carter’s question earlier. I have great optimism for the out years here with this business, 11’s a little hazy, but I’m confident that the upswing’s coming, I just don’t know when it is, if it’s 11 or ’12 or when it is, but clearly a downside in ’11 would hurt us, and we have to adjust for that but right now, it – we focus on 2010 and think it’s going to be really the pivotal year for us. Lucy Guo - Macquarie Capital (USA), Inc. That’s helpful and then looking at the next batch of new aircraft programs, you already announced some work on the C Series. Just was wondering if you have any participation or are you looking at participating on programs like the C-919 or the (ph) rushing jets.

I think, when we look at strategically – we look across the landscape and try to pick those customers and product that a) they want us and b), we see a good partnership that we can make money on. So we have announced those that we are on and we have, and of course we don’t pre-announce anything but what I’ve said consistently, Lucy is, if it’s in our space, and it’s out there you can rest assured that we’re interested in it and having conversations and trying to decide if it makes sense for us to be part of the airplane or not. Lucy Guo - Macquarie Capital (USA), Inc. All right. Thanks.

Thank you.

And your next question comes from the line of Robert Spingarn with Credit Suisse. Please proceed.

Good morning.

Good morning, Rob.

Hey, Rob.

So maybe you can clarify something for me, I just want to make sure I’ve got this right, when I look at the slide 12 at your cash from ops number, and then I reconcile that with page four of your release where you’re (ph) talking about the same thing, I want to be clear your cash from ops would be 75 million and free cash would be minus 250… …or are we starting it cash from ops at minus 250 and going from there?

No, Robert, you are right, cash from ops (ph) only provided would be 75.

Okay, okay. All right, because that's not what it says in the slides if I am reading those correctly.

So we are reviewing the slides

Or maybe it is semantics, yeah.

Okay. I want to be really – obviously it’s a big difference.

So 75 is, (ph) to be clear, 75 cash from ops with a 325 at CapEx.

Okay, good.

(indiscernible) negative…

So free cash is minus 250.

You got it.

Okay, good. Now with cash from ops, this builds on a question from earlier, with cash from ops at plus 75, can we walk through the major accounts and what are you expecting there understanding that the first quarter would be weaker but how do you think about the various working capital accounts, you talked about inventory rising how much? That kind of thing and maybe at the end of that you (ph) control all when we go cash positive on 8, 7, it sounds like mid 11?

Sure, so I think the working capital line largely may (ph) play an (ph) AR role, what kind of ramp backed up your (ph) AP has got some permanent improvements in that as we keep to ‘ 09. (ph) AR will kind of go back up to normal levels as we deliver here into the first quarter and then the inventory will likely just kind of notch up as we go through the next couple of years modestly. (ph) 7A so it’s a great question right, we are liquidating those cash advances this year and most of them actually get liquidated this year there may be some spill over in to 2011 based on the schedule we laid out at 25 to 30 airplanes. So that’s a big headwind for us this year on cash and 2011 cash would restart on the program, so let’s…

But (ph) that about ship set 40, is that about right?

Yeah, it’s right around 45 or 50, Rob.

45 or 50, so it’s well into the year a couple of quarters…

Well, no, I mean I think the plan as we delivered 15 right now, you know 15 and we said 25 to 30 this year…

Okay, so you could do it in the first quarter.

Yeah, kind of get you there, doesn’t it, yeah.

Yeah, it does. Okay last question what in thinking about your range $50 to $70, what are some of the swing factors there? We talked earlier about good block closeout on triple 7 versus bad block closeout, what else is in there?

Yeah, those – that's one of them. Just really (ph) any 787 volume that might, the 25 to 30 range would be in there, but it was not driving a lot of earnings …New program development, we think about that this year. Six flight test programs underway. We hope they all go well, but we are being a little bit conservative on that that regard.

Okay, thanks.

Thank you.

And your next question comes from the line of Joe Nadol with JPMorgan. Please proceed.

Hi, good morning guys, it’s Seth on the line for Joe today.

Hi Seth.

Hi, how are you doing. Quick question about the – you mentioned in the press release that you got the non-recurring contract payments that you had outlined in the third quarter and I was wondering if those were from Airbus and Boeing or if they were just from Airbus? And if so, what’s the status of negotiations is with Boeing given that we’ve seen some other suppliers (ph) you’ve talked about reaching comprehensive agreements with Boeing on 787 cash.

So that was from several customers. And I think really the essence of your question is 787 negotiations. And I would say, I think we’re seeing some moment there and we’ve got teams in place, I think both our sales and the customer are motivated to get some of these things resolved and get them behind us. So I think we will see movement on that this year.

And is there anything for that embedded in your cash flow guidance.

Sure, our forecast for any of those types of items with our customers are in our forecast.

Okay. And then just the second question is about R&D and you talked about, it seems like it’s going to ramp up maybe a few million dollars this year. And I wonder if you can talk just kind of directionally about 2011. I would imagine maybe 787 is going down by then but it seems like activity on the A-350 is picking up. Where does R&D go in 2011.

We should just kind of focus on the 1.5% of sales. I think that’s, we’ve done a lot of work on R&D here in the last several months, just looking at projects and we have a pretty good baseline that we think the 60 million range this year is about 1.5% and that’s what we expect (indiscernible) as we move forward. That’s a good way to think about it.

Great, okay. Thanks very much.

Alright Seth, thanks very much.

And this does conclude the time we have for questions and answers today, we appreciate your participation in today’s conference, this concludes the presentation, you may now disconnect and have a great day.