Good morning and welcome to Carpenter Technology’s fourth quarter earnings conference call. My name is Stacey and I will be your conference coordinator for today. At this time, all participants will be in a listen-only mode. After the speakers’ remarks, you will be invited to participate in the question-and-answer session towards the end of the call. If at any time during the call, you require audio assistance, please key star followed by zero and an operator will be happy to assist to. I would now like to turn the call over to your host for today’s call, Mr. Mike Hajost, Vice President and Treasurer. Please proceed.

Thank you, Stacey. Good morning, everyone and welcome to Carpenter’s earnings conference call for the fourth quarter ended June 30, 2010. This call is also being broadcast over the Internet. With us today are Greg Pratt, Chairman, Bill Wulfsohn, President and Chief Executive Officer, Mike Shor, Executive Vice President, AMO and PAO Operations, and Doug Ralph, Senior Vice President and Chief Financial Officer. Statements made by management during this conference call that are forward-looking statements are based on current expectations. Risk factors that could cause actual results to differ materially from these forward-looking statements can be found in Carpenter’s most recent SEC filings including the company’s June 30, 2009 10-K, its September 30, 2009, December 31, 2009, and March 31, 2010 10-Qs and the exhibits attached to those filings. I will now turn the call over to Greg.

Thank you, Mike. Good morning everyone and thank you for joining us on our fourth quarter earnings call. Let me start by saying that we are encouraged by the strength and the momentum in our business. Our foreword order book is robust, our utilization rates are increasing, and we are hiring production workers. It is critical that we position ourselves appropriately in order to meet the growing customer demand as the lumpy recovery unfolds. To this point, we made a decision during the fourth quarter to increase our production and inventory levels. This Lean Forward initiative enables us to respond more quickly to near-term customer demand for shorter lead times. This was the right decision for the business but contributed to lower operating margins in the fourth quarter. We estimate the impact from these actions to be about $0.10 per share. Adjusting for Lean Forward impacts, and $2.6 million in fixed asset write-offs, our operating margin would have met our previously communicated 10% goal. Our top financial goals for the year were to deliver positive peak cash flow and protect the strength of our balance sheet. We exceeded our expectations in this area and generated $23 million of free cash flow in the fourth quarter and $40 million for the full year. Taking into account the challenging market conditions we faced at the beginning of the year, and the senior leadership changes we endured, I speak for the whole management team when I say we are very proud of what we accomplished and how well the company is positioned for future growth. For example, we increased our share in key markets by enhancing our relationships with key customers and diversifying our customer base. We invested further in R&D, which will lead to a more robust new product pipeline and make an important contribution to overall growth. We have increased our external collaboration efforts to position ourselves at the forefront of new technology and innovation. This will help us grow the strategic parts of our business. And finally, we strengthened our financial position, which enables us to be more choiceful in pursuing growth opportunities. Looking forward as a management team, we have never been more excited about the outlook for our business. We are especially enthusiastic about the demand curve we see stretching out ahead of us in our key aerospace and energy markets. At this point, I’m going to turn the call over to the person who will lead the company into the future, our new President and Chief Executive Officer, Bill Wulfsohn.

Thank you Greg, and good morning. I am really excited to be heading up Carpenter Technology. And like Greg, I’m very enthusiastic about the company’s prospects for the future. I started my new role as CEO on July 1, and since then I have been spending my time on the job listening; listening to employees, listening to customers, to our suppliers and to our investors. I believe this feedback is essential to determining where I should put my focus in the future to enable Carpenter to grow possibly and to deliver strong shareholder value. Today I would like to share with you the reasons why I decided to join Carpenter. There are three. First, I believe Carpenter’s strengths and market focus match the global megatrends in manufacturing today. Having spent my career working in specialty materials, I understand the Carpenter’s competitive advantages, its people, its world-class manufacturing capabilities, its focus on technology differentiation and its global presence position the company extremely well for the future. Leveraging these strengths along with Carpenter’s strong financial position, I believe that we have tremendous opportunities to compete more aggressively and grow rapidly in the future. The second reason I joined Carpenter is it has a great team. And my beliefs in this area have only grown stronger since I’ve joined the company. During the past several weeks I have spent a great deal of time meeting with Carpenter employees at all levels. I have learned that these are people of character who possess unique skills and experience. They care deeply about what they do and they have a strong competitive spirit. I truly believe that with such strong committed team, we have a bright future. Finally, I’ve had the good fortune to been a member of the Carpenter Board of Directors since April 2009. So I have had the benefit of getting to know the company from a perspective that few CEOs experience before leading an enterprise. From my time on the Board, I have learned that we have sound strategies for differentiating through product technology and capturing that growth through market share gains and geographical expansion. Perhaps most importantly, as I previously mentioned, I have also learned that Carpenter has a team which can implement a vision to create real value for shareholders. Now with that let me turn the call over to Mike Shor, who will review the status of our end markets.

Thank you, Bill and good morning everyone. Following our usual practice, I’ll review the markets in the order of their contribution to net sales. Our aerospace sales were $154 million in the fourth quarter. Excluding surcharge revenue, aerospace sales were up 16% on 22% higher volume. The fourth quarter represents the ninth consecutive quarter of strong demand for engine components where we have been gaining share. Overall, aerospace volumes increased 3% sequentially. Looking forward, airplane builds continue to grow and the latest revisions in build projections are encouraging. We expect to grow faster than the market build rate based on the types of planes that are becoming a larger part of the mix and the increased amount of Carpenter materials that they require. Normally fastener demand lags engines by six months. However, in this cycle, fastener demand has been delayed since parts of the finished fastener supply chain continue to have excess inventory. We are beginning to see our fastener customers making channel checks and increase about capacity and readiness. This supports the view that fastener demand will increase in the second half of our fiscal year. Sales for the industrial market were $88 million in the fourth quarter. Excluding surcharge revenue, industrial sales increased 40% on 72% higher volume. The year-over-year result reflects continued higher demand for lower value products that includes stainless redraw rod and stainless bar sold to distributors. Quarterly sequential volumes were up 3%. Industrial markets continue to show signs of steady improvement. We expect that this segment will follow GDP level growth rates of approximately 4.5% in fiscal ‘11. With many of our larger customers, their first and quarter orders are already completely entered. Consumer market sales were $39 million in the fourth quarter. Excluding surcharge revenue, sales were 62% higher on 73% higher volume.…

Thanks Mike. Overall, we had a pretty good year of results with most things tracking well versus our longer term targets. We continue to experience encouraging top-line momentum as our end markets recover and we benefit from efforts to improve our positions with key customers and drive our growth strategies. The Lean Forward initiative will help us continue strong growth into this fiscal year. We exceeded our goal for cash generation and also achieved the operating goals we set for ourselves in areas like safety, quality processes, delivery, and cost performance. Our earnings for the quarter were impacted by the Lean Forward strategy and about $2.6 million of asset write-offs. Excluding these items, our business was performing in-line with the 10% operating margin level we expected at the end of the year. The Lean Forward impact, which we estimated about $6.5 million or $0.10 per share comes from stepping up production and inventory levels at a time when nickel prices were at their recent peak. Building inventories when raw material prices are increasing result in an unfavorable LIFO impact. We had previously expected that inventory would be below the prior year’s level, which would’ve produced a positive effect. The unfavorable LIFO impact was partially offset by operating efficiencies related to the higher production levels. Beyond the impacts of Lean Forward and year-end asset write-offs, our fourth quarter profit was also negatively impacted by a weaker product mix and a negative lag effect from our surcharge pricing mechanism. The weaker product mix in the short-term is both the function of some of over premium product market segments like aerospace fasteners and power generation that have not yet returned to normal market growth rates, as well as increasing volume to meet certain customer demand and certain more commodity product applications like automotive…

(Operator Instructions). Your first question comes from the line of Chris Olin with Cleveland Research. Please proceed. Chris Olin – Cleveland Research: How are you doing?

Good morning Chris. Chris Olin – Cleveland Research: Wanted to dig a little bit into the commodity stainless market, if you look back the past few months, seem like orders peaked around that April-May time period and June was down substantially, July looks like it’s probably off. I am wondering if that’s kind of what you saw and what are you seeing for August in terms of the momentum, has it stabilized yet?

Chris, Mike Shor. Good morning. First, from the distributor side, we see inventories seem to be more imbalanced with some fairly positive demand signals. There’s still a tight buying environment out there. And so from lower end distributor side of the business, the remainder of the year, there is cautious now. Coming more to the markets that we serve directly, we see strength in the industrial market continuing. We see some fairly strong backlogs there. Even on the consumer and auto side, we have seen some leveling out, but we certainly haven’t seen any decreases at all. And even on aerospace, obviously as aerospace grows, some of that being stainless, we see some strength there also. Chris Olin – Cleveland Research: Given what nickel did, the commodity nickel price, would you’ve said that the pause was less severe or more severe than expected?

We certainly saw a pause, and I would say more again on the distributor side than anywhere else in June, as the surcharge moved around. But we expect that as nickel prices begin to, or at least appear at a level out where they are now, for that to come back. Chris Olin – Cleveland Research: On the nickel alloy or specialty alloy side, we have been hearing some concerns that maybe certain jet engine channels were disruptive in some sense, were not buying to the level that they were earlier in the second quarter. Have you seen anything changing with the way they are buying right now?

No, we see on the engine side significant strength. We continue to see that lag we’ve talked about on the fastener side, but we’re very encouraged by what we see on the engine side. We’ve seen nine quarters of growth there. The recent airline monitor has looked very strong and we are seeing plane builds occurring in the types of engines which are much more intensive (inaudible) types of materials. So, still see good. Builds are increasing. Chris Olin – Cleveland Research: Okay and then lastly, just anything new on the 787 and let’s say the deliveries hold as is, when would you expect to see the fasteners business really tick off in terms of orders, I know you kind of mentioned that, but I missed what you said.

I am glad you asked the follow-up because I just want to correct one thing. I said we have seen nine months of increased or active engine products. As far as the 787, I think everyone is saying pretty much the same thing which is we are expecting deliveries by the end of 2010. We all know that may slide a little into 2011. The 787 though when you look at the material usage for (arid) types of material on a 787 versus for example the 737, it’s 1.8 times the usage of (arid) types of materials 787 versus 737. So, we all know there is some inventory left that supply chain, but we feel good about what’s coming in the builds that are coming. Chris Olin – Cleveland Research: Okay thanks.

Your next question comes from the line of Edward Marshall with Sidoti & Company. Please proceed. Edward Marshall – Sidoti & Company: Good morning everyone. My first question is on the PAO margin. I think going back to previous calls, we discussed that that would see a little bit of a degradation; it did in the quarter. Just looking for basically your comments, I mean, is there anything to do with the fact that energy took a bigger piece of the pie there or did your LIFO expense kind of run through that line as well?

Yes, I think our Lean Forward was mainly focused on that PAO business and making sure that we can meet the demand need for the premium melted products and so disproportionately I think that would have been impacted by our Lean Forward. Edward Marshall – Sidoti & Company: Can you give us kind of an update of the trends through the quarter, was April the strongest and did it ebb down from now or were you seeing steady improvement across most of your markets throughout the quarter?

As far as the topline, it was steady through the quarter. Edward Marshall – Sidoti & Company: What about the order book, though?

Order book, it’s Mike, order book has continued to increase. Our customers are placing orders as I noted in my comments, lot of our major customers are now booked pretty much two quarters up. Edward Marshall – Sidoti & Company: And you said – you mentioned the inventory has leaned out on the fasteners side of the business now. Did you say back half of the year you expect that to continue to pick up?

The quick answer is yes. We are getting a fair number of channels checks now as far as readiness and we do see that, we anticipate that coming back in the back end of the year. Edward Marshall – Sidoti & Company: Okay. Thank you very much.

Your next question comes from the line of Steve Levenson with Stifel Nicolaus. Please proceed. Steve Levenson – Stifel Nicolaus: Thanks. Good morning everybody.

Good morning. Steve Levenson – Stifel Nicolaus: In the commentary, you mentioned that you expect your aerospace related revenue to grow at a faster rate than the overall build rate. Could you give us a percentage, or is that something you are sort of keeping proprietary right now?

No the way we’ve talked about that generally is that we would expect it to grow at 50% in excess of the market growth rate due to the mix of the planes in the Carpenter material content in those planes. Steve Levenson – Stifel Nicolaus: Okay, that’s great. Thank you. In relations to the energy market, do you think the gulf disaster is going to create some new regulations for the metals that go into things that are sent down below the surface that’s going to impact Carpenter?

We believe that there is definite – out of this tragedy – potential positives as far as the types of materials that are being used. So, I would say the opportunity there is significant for us. Steve Levenson – Stifel Nicolaus: Okay thanks, and last, I know you said nickel is leveling out. Do you think there is still some – for the lack of a better term, fish tailing in the pricing as the market finds the appropriate level or do you think you are at a fairly stable level now?

Yeah, I am not sure what fish tailing means but the prices have strengthened a bit over the last month. The Vale Inco strike ended recently and so that ought to help on the supply side of things. So, I think the general view of the market from the experts that we talked about is stable to slightly down, but, you know, but that could of course change. Steve Levenson – Stifel Nicolaus: Great. Thank you very much.

You are welcome.

Your next question comes from the line of Gautam Khanna with Cowen & Co. Please proceed. Gautam Khanna – Cowen & Co: Yes, could you help me understand where the asset write-off was, was it at premium or AMO?

Yes, Gautam, I would just describe it as normal business that towards the year-end you know you step up activities at making sure that you’ve, you know, as we’ve spent capital during the year, taking the right decisions on the asset write-offs, and so it was just a function of that. And if anything would skew a little bit more on the AMO side, but because our premium assets, as you know, are new. So, if anything, it’s skewed towards AMO. Gautam Khanna – Cowen & Co: Okay, and so, if we just trying to disaggregate the margins that PAO ex the inventory effect and whatever amount of the asset write-off was allocated there, was it flat sequentially? I mean was it around 23%? Is that how we should think about it?

Our PAO margin, and we always look at it excluding the revenue surcharge. So, we reported 26% in the quarter and for the full year 29% and last year it was 25%. So, I think there’s been good overall stability on the PAO margin. Gautam Khanna – Cowen & Co: Okay, and so when you talk about stabilizing – margins relatively stable, is that in the first half of fiscal ‘11 and then increasing from there? Is that what’s the Q4 level?

Yes, so that comment in regard to our fiscal ‘11 outlook is really on the corporate operating margin, again excluding revenue surcharge. And what we would expect in terms of stability is over the first half of the year margins to remain at about their current level. And as you know there, we reported 9% in the third quarter, reported 7% in the fourth quarter, which excluding Lean Forward and the asset write-offs would be at 10%. So, we are talking about stability at that level which is mix and cost savings as positives offsetting a bit lower seasonal volume in the first half of the year but this is what we have been running in the second half. Gautam Khanna – Cowen & Co: Got it. And can you tell us what your sales to Precision Castparts were in the fourth quarter as a percentage of the total, and if you are seeing any sort of impact from their threat of insourcing? Thanks.

The number, Gautam and then I will turn it over to Mike for additional perspective. But I don’t have a number in front of me for the fourth quarter, but Precision is a customer that we consistently had to report as above 10% of our overall revenue and we would expect to do that again in our upcoming 10-K for all of fiscal year ‘10. And Mike in terms of trends we are seeing there.

Gautam, to-date we have seen very little, in fact no volume decrease from Carlton. We do expect obviously, as this moves forward, to see some decrease. Fiscal ‘11 we will see a volume decrease in the range of about 20%. That’s our latest estimate. However, we are securing business elsewhere that obviously is making up for this loss. And I think a key point is we will remain a significant supplier to Carlton and obviously we are eager to continue to find ways to work with PCC not only on their engine side but in the fastener side of their business. Gautam Khanna – Cowen & Co: Okay.

Your next question comes from the line of Mark Parr with KeyBanc Capital Markets. Please proceed. Mark Parr – KeyBanc Capital Markets: Thanks very much. Good morning.

Good morning. Mark Parr – KeyBanc Capital Markets: And Bill, I haven’t had a chance to say welcome, so but anyway welcome.

Oh, thank you. Start to working with you. Mark Parr – KeyBanc Capital Markets: I have, hopefully you can join us in September. I have a couple of questions. It looks like you have raised your revenue guidance for fiscal ‘11. And I guess I would like to get here some color on the especially given what’s happened with nickel. You know, nickel has come off in the last 90 days from where it was. And I think Doug said that your thought process is just over the near term, nickel is flat to down a little more. And what’s the mix in fiscal ‘11 revenue guidance in terms of volume versus pricing?

We would expect, Mark, our mix to continue to modestly improve. So, it improved between third and quarter and we would expect to see that trend continuing into fiscal ‘11. Mark Parr – KeyBanc Capital Markets: Talk about the change, I mean, let’s just say if the revenue guidance for fiscal ‘11 and just pick a number, let’s just say it’s 17%, I mean how much of that is volume and how of much of that is related to underlying price momentum?

It’s predominantly volume and there would be some contribution from the price increases that we have implemented and would contemplate implementing going forward. But most of that revenue growth is going to come out of volume. Mark Parr – KeyBanc Capital Markets: Okay, all right. I guess and again, I would like to, you had started talking about mix, you know, that mix has been improving modestly. Do you think it’s going to improve some more? I really like to get some more color around that. You know, you guys have done a great job, you have been enhancing your high-end manufacturing with a new VIM furnace and some other things that you have done. And could you talk about specifically how you see the mix improving over the course of 2011? And then maybe you did some of that already with the talk about the power gen and the aero fasteners and maybe that’s what I need to be focusing on then. Is there anything else that you can add to that discussion?

Yes, I would break that into two stories really. And part of the story is the return of all of our premium melted products during the course of the year. So, aerospace engines is very strong right now and as aerospace fasteners picks up in the second half of our fiscal year, and power generation coming back a little bit, it’s the return of the premium melted products back to normal market growth rates, that’s part of our mix story during fiscal ‘11. And then the other part that’s driving our mix is that, you know, we made some choices and some right choices in the short term to meet customer demand in some of the lower value applications on the stainless side. So, auto valve steel, some of the other commodities, stainless applications in consumer and industrial. And some part of those decisions is based on the belief that as we work with those customers it’s going to open up opportunities for higher end higher value stainless products and we would expect to see that also unfold during the course of fiscal year ‘11. Mark Parr – KeyBanc Capital Markets: Okay, terrific. Can you hear me okay, because I have put you on speakerphone?

Yeah we can hear you fine. Mark Parr – KeyBanc Capital Markets: Okay fine. I had one other question if I could. I don’t want to monopolize this. But when you talk about the first half margins being in line with the June quarter, is that on an adjusted basis, adjusted for LIFO and for the asset write-offs, or is that on an as reported basis?

Yes, those adjustments come up during the periods. So I would always have to – it’s our rough expectation, subject to some of the inherent volatility that we have on mix and elements like LIFO, but incorporating our best current knowledge of all those, it’s the kind of margin that we would expect to report for the period. Mark Parr – KeyBanc Capital Markets: So, what’s you are saying is if, you know, the margin guidance that you are giving for the first half, I mean to just to kind of – to make sure I have got this right. The margin guidance would be comparable to the June quarter excluding LIFO or excluding the asset write-offs?

Right, as I mentioned in response to Gautam’s question, we reported 9% in the third quarter, reported 7% that would have 10% without the Lean Forward and asset write-offs in the fourth quarter. So, continuing forward at that near 10% level for the first half of the year. Mark Parr – KeyBanc Capital Markets: Okay perfect. I just wanted to make sure I heard that right, so that’s really helpful. Thank you very much.

You are welcome. Mark Parr – KeyBanc Capital Markets: And good luck.

Thank you.

(Operator Instructions). Your next question comes from the line of Chris Olin with Cleveland Research. Please proceed. Chris Olin – Cleveland Research: Just wanted to circle back. One of the expectations I had was there were a number of special alloy contracts that could be won this year. Specifically I was hearing something about a power generation contract in India and some other deals on the energy side. Can you give us an update on the deals out there? Can you win them? Do you have the capacity to service that? I just want an update on what you are thinking.

Chris this is Mike. First as far as the capacity is serviced, I think the great news for us is investment that we have made in VIM VAR and ESR. We’ve expanded our VIM capacity by 25,000 tons with our new furnace. That furnace is up and running. It’s running a couple of weeks a month now. We are actually adding another crew for utilizing the (inaudible) VAR. So the whole purpose for that expansion was to be able to take on more and more premium products, which we have done. As far as contracts in general, we’ve had good success with negotiations with our top customers who obviously stand very close to Carlton and the issues there. But we continue to wrap up our agreements with our customers, whether it’s fasteners, it’s in the industrial side, automotive, the engines, and we’ve done well there. So, we think things are going very well on the contract side. Chris Olin – Cleveland Research: Okay, is there any big global deals out there to be won?

There are engine manufacturing deals which are coming up – engine deals which are coming up but they are couple of years or a year to two years out. But we are pursuing those items that are out there to fill this capacity. Chris Olin – Cleveland Research: And Mike, did you give out an operating rate that you are running at currently?

No, and with us being both on the stainless side and on the super alloy side in a variety of different work centers, let me give you a – I see in general if you are looking for one number, be in terms of about 75%, (inaudible) capacity is probably closer to 80%, our VIM is little less than 75% probably 65%. Our remount furnaces are filling up that’s good. There’s plenty of opportunity to put in more as needed. And our finishing I see again is in that 75%. Chris Olin – Cleveland Research: Is there a number you are using in terms of the long term outlook, how much of the business has already been contracted out in terms of the capacity, how much is still available?

Well, from an availability standpoint, given our available capacity, our key is getting, as Greg mentioned in his comments, is getting the manpower in here, which we are doing to make sure that we are able to handle the increased demand that comes at us. So, theirs is open capacity available. It’s not necessarily demand and that’s why we’ve got as part of Lean Forward is bringing the people in here to man any open shifts we have. Chris Olin – Cleveland Research: Okay and then just switching gears quickly. Titanium scrap seems to moving very quickly. I guess I am surprised by the six plus quote out there I am seeing for some the (64) products. What are you seeing on the (e-Gate) right now. And I just want to make sure there is – is it a full passthrough for the fabrication business or is there some margin risks?

We incorporate the price of our (inaudible) to the pricing of our product obviously and spot prices and as you know Dynamet is not a melter, so we do acquire spot prices for Dynamet right now in the range of $9.50 to $10. I would say it’s closer to 10 than 9.50. We are seeing prices published that are in a $10.50 to $11.50 and in general, they probably been up about $0.50 or less amount or so. Chris Olin – Cleveland Research: Do you think it’s seasonal. Can it hit $13 type of a number by year end.

I don’t know. I could not – that’s one that I really couldn’t even comment on. Chris Olin – Cleveland Research: Okay. Good. Great effort. Thanks a lot.

Your next question comes from the line of Dan Valine (ph) with Capstone Investments. Please proceed. Dan Valine – Capstone Investments: Good morning.

Good morning. Dan Valine – Capstone Investments: As the broader market fundamentals continue to improve, is your appetite for acquisitions increasing at all? Are potential sellers more willing to chat?

This is Bill and certainly we have the financial flexibility to consider and move forward on strategic acquisitions which could help to broaden our offering in the marketplace, and we of course will be looking with an keen eye in the future to grow, and to grow in this area would be a great dimension to add to Carpenter. Dan Valine – Capstone Investments: If there has been any real change in the past quarter or so or you are focused more on your internal expansions?

I think it’s quite balanced actually. We have a very disciplined process pursuing acquisitions and I think the one thing that maybe has changed is just in general, we see a strengthening, stabilization and strengthening of the core market demand. Obviously that gives us some more confidence to also look outside as well as inside. Dan Valine – Capstone Investments: Okay great. Thanks.

And at this time, I would like to turn the presentation back to you, Mr. Greg Pratt for closing remarks.

Thank you very much Stacey. Ladies and gentlemen, as you know, my combined role as Chairman and Interim President and CEO changed effectively July 1. I would like to share with you that the on-boarding process for Bill is progressing seamlessly. And over the next few weeks, my daily presence at the company will end. Appropriately, this will be last direct participation on these calls. Bill and the team look forward to speaking with you next quarter. Thanks again for your continued interest and support of Carpenter Technology Corporation. Good bye.

We thank you for your participation in today’s conference. This does conclude your presentation. You may now disconnect and have a great day.