Good morning and welcome to Carpenter Technology’s Third Quarter Earnings Conference call. My name is Chris and I will be your conference moderator 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 a question-and-answer session towards the end of this call. (Operator Instructions) At this time I would now like to turn the call over to your host for today, Mr. Mike Hajost, Vice President of Investor Relations and Treasurer. Sir, you may proceed.

Thank you, Chris. Good morning, everyone, and welcome to Carpenter’s earnings conference call for the third quarter ended March 31, 2012. This call is also being broadcast over the Internet. With us today are Bill Wulfsohn, President and Chief Executive Officer; and Doug Ralph, Senior Vice President and Chief Financial Officer. Also participating on the call are Dave Strobel, Senior Vice President of Global Operations; Mark Kamon, Senior Vice President of Specialty Alloys Operations; Andy Ziolkowsk, Senior Vice President of Latrobe Operations; and Sanjay Guglani, Vice President of Performance Engineered Products, as well as other members of the management team. 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, 2011 10-K, September 30, and December 31, 2011 10-Q and the exhibits attached to those filings. I will now turn the call over to Bill.

Thank you, Mike and good morning, everyone. This is a very exciting time here at Carpenter. And I am very proud of what the team has accomplished this quarter. In summary, we’ve posted another quarter of strong results. We also closed on the Latrobe transaction and we took steps to increase production capacity which will enable near and long-term growth. Before Doug gives you details about our operating results, I would like to take a few moments to comment on each of these three areas. Let me start with the results of our legacy Carpenter business. In summary, our end-market demands remain strong. Within Aerospace, we are experiencing continued strong demand for super alloys used in aerospace engines, significantly increased demand for our titanium, nickel, and stainless materials used for fasteners and we are seeing increased participation in aerospace structural applications. More specifically we are seeing higher adoption of our proprietary customs series of stainless materials for flap track, engine mounts, landing-gear components on new platforms such as the A380, A350, 747-8, 787 and the future 737 MAX. In addition Latrobe’s portfolio broadens our participation in complementary aerospace applications such as commercial landing-gear and bearing steel. Within Energy, there remains strong demand for our materials used in oil and gas explorations as directional drill rig activities remained high. And it is now shifting from natural gas to oil exploration. We also see increased demand in materials for industrial gas turbines. And finally, as we’ve discussed in past calls, we are diversifying our product offerings within the energy markets. Note, we are also seeing good growth and movement for higher value product opportunities in other strategic areas such as transportation, plus in the act to get the demand for our premium product has enabled us to sustain a very strong backlog.…

Thank you, Bill. We had another good quarter of results. We’ve included the chart and exhibits in our press release that hopefully will help you follow the plusses and minuses this quarter and also going forward. Overall, we delivered earnings per share of $0.69 which included a total of $0.15 from final Latrobe transaction cost and a fair value cost adjustment on beginning inventory that we’ll experience this quarter and next quarter. Excluding these impacts, we would have been at $0.84. The Latrobe business delivered about $5 million or $0.07 per share from operating results and the impact from share dilution was $0.04. The Latrobe is accretive on an operating basis right from the start we expect. Before I get deeper into Latrobe, I want to highlight our strong performance on the legacy Carpenter business. This is the fifth quarter in a row that we a saw a strong positive spread between our revenue growth rate and volume growth rate and an improvement in our average SAO copper per pound. This reflects good execution of our strategies that drives premium products growth and improves our pricing and product mix. Our average SAO or mills profit per pound is up over 50% in the past year which was our internal goal and increased by another $0.12 from the second quarter. Overall, operating income on the legacy Carpenter business is still tracking to exceed the 50% improvement goal that we set at the beginning of the year. In our trailing 12 months EBITDA of about $310 million excluding Latrobe, using the definition that we’ve communicated of operating income, depreciation [ph] and amortization plus non-cash pension expense continues on a pace to achieve our goal of returning to our prior peak level of EBITDA on the early end of our communicated three to…

Thank you. (Operator Instructions) Our first question comes from the line of Steve Levenson with Stifel. You may proceed. Steve Levenson – Stifel Nicolaus: Thanks, good morning everybody.

Good morning.

Good morning. Steve Levenson – Stifel Nicolaus: Could you talk a little bit about how pricing on nickel based super alloys works relative to capacity, and what if any relationship it really has with LME nickel prices?

This is Mark Kamon. The pricing on nickel alloys for our business occurs in two different ways primarily. We have transactional business and we have what we call annual contractor long-term agreements, where we have price arrangements. So on our transactional business and on our LTA business, we have hedging and/or let’s call it a raw material surcharge strategy that moves with nickel, so as nickel moves up and down, that responding action moves up and down. So we think over time we’re neutral as nickel moves. Steve Levenson – Stifel Nicolaus: Okay, thanks. And then in relation to the transactional business, not subject to long-term agreements, I guess what as you continue to use up the capacity, you’re able to raise those prices?

Sure. That’s – there is supply demand, than it is on transactional business but we’re also are looking to grow our new products and use our capacity to enhance our customers’ ability to compete and complete as well. Steve Levenson – Stifel Nicolaus: Got it, thank you very much.

Our next question comes from the line of Gautam Khanna with Cowen & Company. You may proceed. Gautam Khanna – Cowen & Company: Hi, thanks great results guys.

Thank you.

Thank you. Gautam Khanna – Cowen & Company: So could you talk about a couple of things. First, I think you were doing a study on the fastener side of the business to see what actually is going on. So could you clarify what you’re seeing with respect to nickel stainless and titanium fasteners? And then I have a couple of follow-ups.

So for the titanium – this is Sanjay Guglani. Gautam Khanna – Cowen & Company: Yes.

For the titanium fasteners, we are seeing increased demand from most supply chains. There are some isolated sections of the supply chain where the take up is not that fast. And I would say that is true for both nickel and titanium. Gautam Khanna – Cowen & Company: Could you comment really on the differences between Boeing and Airbus?

So our perception is that the Airbus supply chain is pulling materials on a consistent basis. It seems that on the Boeing supply chain, they might be isolated incidence of burning down of excess inventory from previous build ups on titanium side. On the nickel side...

Yes, on the nickel side of the business – this is Mark again. On the nickel side of the business, as we’ve reported over the last few quarters, we’ve seen significant double-digit increases in fastener demand and that continues through the third quarter as we’ve just experienced. And we comment in general that when you think about fasteners, the fastener demand is really a function of the number of planes that are rolling off at the end of assembly line over a long period of time. So the number of planes is growing and the size of those planes is growing. So we should see consistent fastener growth consistent with the airplane builds and we’ll see from time to time some quarters that are higher in demand and some quarters that are little lower but growing steadily further as we go through the decade. Gautam Khanna – Cowen & Company: Mark, I mean to follow-up on that, are you seeing any differences between the major fastener OEM, I mean because obviously Boeing went for these new long-term agreements January 1, and presumably shifted share along the way and I just wanted if you’re seeing any notable differences between the three major?

I couldn’t comment on the nature of their business because I don’t know the details internally, but sufficed to say our overall fastener demand, we participate with the entire fastener community, continues to grow. Gautam Khanna – Cowen & Company: Okay. The other thing, Doug, you mentioned inventory I think the step up goes away in the September quarter, so is that at zero, I thought it was going to be over six months, did I hear you right?

Yes, we’re anticipating the beyond the charge that we booked this quarter similar $3 million a month, $9 million-ish type of charge in the fourth quarter and really then it becomes a function of – this is part of LIFO nickel pool. And when we’re reducing inventory, we’ll have these kind of cost impact, but if inventory is leveled to increase and we wouldn’t – and right now we would not anticipate having any carryover of the inventory cost adjustment into our fiscal year ‘13 or back in September quarter. Gautam Khanna – Cowen & Company: Okay. Could you also spring for us, you mentioned 4,000 tons of incremental capacity. Does that relate apples-to-apples to 40,000 that you currently have? Could you just talk about what specifically your premium melt capacity will rise by, first, ex Latrobe and then with Latrobe?

This is Dave Strobel. Gautam Khanna – Cowen & Company: Yes.

If you take a look at our premium melt capacity, the key area that is – key two areas that have been inhibiting our growth areas and the remelt capacity is also up. We’re taking some actions within Reading operations to approve that with two ESR furnaces. The first has started up, the second is starting up this coming quarter, and the addition of three VARs out in the Latrobe operations. And that will help from a remelt capacity. The hot work capacity long-term obviously will be the focus facility in Alabama. Short-term we’re making some changes with the products between Reading and Latrobe to open up positional hoppers in that. So between the two operations, we feel very comfort with 4,000 tons FY13 and another 4,000 over FY14. Gautam Khanna – Cowen & Company: Okay, and lastly just a general one maybe, if you could talk about any areas of the portfolio that are actually softening?

Well this is Bill Wulfsohn. Gautam Khanna – Cowen & Company: Yes.

And I would say that it’s not that we’re seeing softening per se, but there are some areas as we’ve discussed in previous calls where strategically we have made the decision that we needed to either get more price or exit certain parts of our business that would be kind of lowering our overall profitability and mix and yet going through constrained operations. And so you see that in parts of our operations, part of our SAO business. Maybe I would comment that in Europe we are seeing a little bit of softness on the powder side in the marketplace. So that would be one specific case, but beyond that we’re seeing in general strong and robust demand. Gautam Khanna – Cowen & Company: Thank you guys.

Thank you.

Our next question comes from the line of Chris Olin with Cleveland Research. You may proceed. Chris Olin – Cleveland Research: Good morning.

Good morning.

Hi Chris. Chris Olin – Cleveland Research: Why don’t you just make sure I am clear on the 2013 guidance, the incremental $70 million that does include Latrobe?

Yes, it does. Chris Olin – Cleveland Research: Great. In terms of the nickel based alloys market, is there going to be a time where you could see some type of benefit from contract rollovers or the favorable pricing that seems to be in the market today?

Yes, this is Bill Wulfsohn. I would say a couple of things, I mean certainly the dynamics at this point in time have been reasonable for having new contracts and extending contracts, but I really try to emphasize that is what we’re trying to establish is long-term supply relationships with our customers. So there probably is some thought opportunity if you were to take things from more of a transactional viewpoint to push price even harder, but those couldn’t have long-term implications and consequences in terms of our supply relationships to those customers. So what we’ve been focused on is trying to find what we think are very good returns for our shareholders and very sustainable pricing positions for our customers. And trying to strike that balance accordingly and I think you’re seeing that reflected in our results. Chris Olin – Cleveland Research: Last question, I have two back at 2013 guidance, does that include a potential impact from the new incremental capacity that you’ve talked about in your market?

Yes, it would. But obviously not the focus facility because of the timing that that will come online. Chris Olin – Cleveland Research: Okay, thanks.

Our next question comes from the line of Josh Sullivan with Sterne Agee. You may proceed. Josh Sullivan – Sterne Agee: Good morning, great quarter.

Thank you. Josh Sullivan – Sterne Agee: I know that you said that cash flow is going to be slightly negative as you invest in the new facilities. So kind of in a similar way to how you expect to proceed your previous EBITDA targets, and do you expect cash flows return that kind of 100% knocking income level on the facilities up and running long-term?

We will have made the structural investments that we believe will give us significant capacities to meet the demand, the cost of that in for example in the nickel area incremental capacity will be structurally much lower because the base investment we’re making now will not only give us capacity gains but will set the seeds for further growth. We can’t predict what time the acquisition opportunities might be out there and what other types of growth opportunities we would want to pursue, but we believe that from an operating cash flow, we’re making the structural investments right now to get the capacity and capabilities we’re looking for. And so are any of those other caveats, we should see very strong cash flow coming up from business after those investments are completed. Josh Sullivan – Sterne Agee: Thanks. And then just kind of that M&A outlook, I mean are you looking more kind of on the energy side, in the PEP segment, where might that be targeting?

I think the PEP segment would be the very logical area to extend ourselves. We’re very excited. We feel very good about our momentum but have of course an execution agenda on the SAO portion of the business with integrating Latrobe and expanding our capacity. PEP business is and that’s one of the reasons why we structured it in a separate operating group, it doesn’t have some of those execution agenda, challenges that the SAO businesses face with. So that’s an area which would be very logical for incremental and additional acquisitions. Josh Sullivan – Sterne Agee: Great, thanks. I’ll get back in the queue.

Our next question comes from the line of Dan Whalen with Auriga USA. You may proceed. Dan Whalen – Auriga USA: Thank you, first of all, congratulations on the quarter and the acquisition completion. So on the titanium fastener side which has exceeded prior peaks, where do we sit in terms of the nickel and the stainless, I mean if we were to look at a face of the clock, where are those fasteners sit in terms of the cycle?

Well I would see there is a difference in Ti and nickel driven by the aircraft. So if you’re thinking about Boeing staring the 787 production, the 777 increasing some of larger aircraft, the Ti content is much higher, which is why you’re seeing Ti respond faster. Dan Whalen – Auriga USA: Right.

So we’ve seen significant growth on the nickel side, we’re not quite back to peak but frankly it continues to come as I said in double-digit growth, significant double-digit growth quarter after quarter for the last four and we would expect that momentum to continue for some period of time. Dan Whalen – Auriga USA: And what about the stainless?

My comment pertains to both nickel base and stainless, but stainless is a smaller piece of the total I think. Dan Whalen – Auriga USA: Right, okay. Which – as a follow-up, I mean if we were congregate the titanium, nickel and stainless, can you give us a rough estimate in terms of the contribution in terms of total fasteners?

Yes, I am not sure contribution in – this is Doug, contribution in what terms but we… Dan Whalen – Auriga USA: Yes, if we were to look at – take a look at your total fasteners business, how much is titanium, how much is nickel and how much is stainless?

We’ve talked about them all together, aerospace as you know is our largest business representing about 43% of our total revenue and within that, fasteners is about 35% to 40% of that. And we have strong position with majority of market share positions in all three type of fasteners there, and we haven’t really broken down that individually other than what you can infer out of look at our titanium products sales that we report. Dan Whalen – Auriga USA: Right, okay. Fair enough. And then post-Latrobe, can you remind us what your spot versus contract long-term agreement is in terms of pricing?

On what we’ll call the legacy Carpenter business, it’s about 50/50. Where LTA and transactional and then on the Latrobe side, long-term agreement would be a quite a bit of a smaller percentage. Dan Whalen – Auriga USA: Okay. So your spot business went up on a combined basis?

That’s correct. Dan Whalen – Auriga USA: All right. And then lastly this is maybe in your file and so may ask more, but can you just remind us what Latrobe, what the peak EBITDA levels were?

You’d have to refer to Latrobe’s fillings including their F-1, they were private company as you know. Dan Whalen – Auriga USA: Yes.

So all the information on that would in their previous filings. Dan Whalen – Auriga USA: Okay. Well thank you for the color.

Yes.

Our next question comes from the line of Phil Gibbs with KeyBanc Capital Markets. You may proceed. Phil Gibbs – KeyBanc Capital Markets: Hi gentlemen, good morning.

Good morning. Phil Gibbs – KeyBanc Capital Markets: So I just want for clarity purposes the guidance that you’ve provided for operating income excluding EID pension, is that on a GAAP basis?

Yes. Phil Gibbs – KeyBanc Capital Markets: Okay.

It’s in our operating income and that we report on our GAAP statements and it has the pension EID and that’s the number that we’re referencing. Phil Gibbs – KeyBanc Capital Markets: Okay. So for our fiscal ‘11 base level is that $132 million!?

That’s correct. Phil Gibbs – KeyBanc Capital Markets: Okay, perfect. And then over the last couple of calls, we’ve thought that inventories were going to come down a little bit in the back half of the year that would, I think would declining nickel creates some sort of LIFO charge, and just looking to see the outlook on that, I know you mentioned it a little bit but did we have a modest benefit in this quarter?

We had about a $1 million negative, I mean inventories did come down some and we would expect as inventories come down in the fourth quarter to have a little bit more of a negative impact if that’s your question. Phil Gibbs – KeyBanc Capital Markets: Yes.

Okay. Phil Gibbs – KeyBanc Capital Markets: Okay. And then last question here for Bill, the PEP sale largely leveled out here over the last three quarters, is that largely because of the powder business?

That would probably relate more specifically to the comments I made a little earlier that the powder weakness in specifically in Europe, the business here in North America has been very strong. Phil Gibbs – KeyBanc Capital Markets: Okay, thanks gentlemen.

Our next question comes from the line of Doug Thomas with JET Research. You may proceed. Doug Thomas – JET Investment Research: Thank you. Good morning, I mean outstanding results and I very much applaud the efforts. Quick question, I think it was Doug, who talked of the – your efforts to try to incorporate your customers views and outlooks in terms of the Alabama facility and so forth. And whether its Bill or Doug I guess my question is going forward, you clearly got much more of a customer facing approach to building this business than at any time I think probably I call recall. I am just wondering how that plays out, how much your customers have an interest in involving themselves in the planning for the new capacity and how much of a – over the long-term, what sort of benefits will that accrue?

Absolutely and I appreciate you for your question and that the theme you picked up on. We’ve looked at it very carefully and we’ve assessed from a kind of macro trend standpoint what we believe will be the aggregate needs in the marketplace versus the aggregate capacity and availability. So we’re trying to be proactive to make sure that we not only have the needed capacity but also that we have the flexibility to meet if you will certain peak that come with demand without having to extend lead times. In fact our goal is dramatically shorten lead times by putting in much more lean production processes. And in terms of aligning the capabilities with our customers, we actually are going through a process by which we’re spending a lot of time with our specific customers sharing with them the details of what it is we’re doing and getting feedback from them as to if there are specific enhancements, nuances that could be beneficial from their perspective. So we want to be the best supplier to the industry. Doug Thomas – JET Investment Research: And then I guess secondarily, I know we’re just coming off the third quarter and people are looking forward to next year but, Bill, again I know that the approach and not a lot of people talk about that but the approach towards aligning management compensation with performance, you’re not going to have a meeting until September by which time there will be another – there will be the proxy out for this year and so forth. But can you give a sort of a state of the nation, sort of just view of how things are working out in terms of the alignment that you’ve put in place there in the last couple of years and what you’re expecting as we head towards next year?

Sure, well I think first of all I think we have excellent team and we’ve rallied around the opportunities we have. We work well together but each individual understands their specific contribution to the core success. From an intensive compensation standpoint, in our short-term compensation and you can find this in our CD&A that we’re primarily focused around what we deliver in terms of operating incomes, so very aligned with the shareholders. We have customer performance and safety performance as part of what’s important for us to deliver. And clearly our long-term incentive compensations are very much aligned to total shareholder returns and stock appreciation. As we look forward to next year, while this is ultimately up to the Board to make the final decision, we’re not looking for our fundamental redesign in terms of our compensation programs. We believe that they are well aligned with the business interest and the shareholder objectives. Doug Thomas – JET Investment Research: Okay. And I apologize, just briefly you mentioned about there is not really a clear path, I guess, in the near-term to acquisitions or things that you find compelling enough to do here until you’ve integrated, made some of the integration of Latrobe and also new capacity and so forth. Can you talk about pricing is an additional consolidation outside of Carpenter as – are deals – are there some deals out there, what’s going on in terms of pricing of potential M&A?

Yes, and I want to be clear maybe I wasn’t before that we are very interested and are active and will pursue acquisition opportunities some times that can be opportunistic because others choose to make transactions available whether it’s on your schedule or not but from a cultivation standpoint, we’re really focused more on acquisitions that relates to the PEP business. And I say that just because of the strong execution focus that we have in the SAO business at this time. In terms of valuations and pricing of potential deals that are out there, I would only comment that it’s not surprising that given the general momentum in earnings growth and the fairly bullish sentiment around some of the segments that we would be focusing on like energy and aerospace and medicals, that people are looking to not just get their current value and historical value but also what they perceive as a future value of their businesses. So it’s not an expensive. Doug Thomas – JET Investment Research: Okay, well said. Listen, thank you very much. Congratulations again, I appreciate.

Thank you.

Our next question comes from the line of Mark Parr with KeyBanc. You may proceed. Mark Parr – KeyBanc: Yes, thanks a lot. Good morning.

Good morning.

Good morning. Mark Parr – KeyBanc: So that was a very nice quarter, congratulations. I am delighted just to see the progress. Most of my questions have been answered and I had one longer term question and it would relate to the new facility in Alabama. And once you get that or once you begin commissioning, there would seem like there would be an opportunity to perhaps move I’ll call non-premium, non super premium material from Reading into that operation, and give you another boost to super premium in your existing operations of Latrobe and Reading. Is there any way that you could quantify that for us in terms of what sort of incremental capacity that might create for the high end products?

Hi Mark, this is Dave. Mark Parr – KeyBanc: Hi Dave.

You are absolutely correct in that a lot of the product that we hope to eventually have down at the Alabama facility going through there will require vendor qualifications that can take fewer more years. And obviously to get that operations up and running, our plan would be to move products that does not have stringent qualifications but you get turned on very quickly down there and allow us to get operating and free up the capacity then within Reading and Latrobe operations to make more of a vendor proof process, while we’re going through the qualification in Alabama. And we feel very confident that as we start up that first fiscal year, we are looking at 10,000 tons plus and being able to grow that over four years up to the 27,000 tons. Does that answer your question? Mark Parr – KeyBanc: Yes, thank you very much.

Welcome. Mark Parr – KeyBanc: And good luck on the June quarter.

And this is Bill. I would only just add and we will see indeed versus the word but in the interactions with customers given the relative limitation tons supplied today and the relatively long lead times, we’ve found that customers are expressing a willingness to move from in terms of qualification in a very productive constructive manner with us. So we’re hoping – and especially when the lead times that we’re looking to offer out of the facility based on the lean approach I think there is going to be some very good incentive for customers to move that process forward in what we hope will be a – of course they are responsible but a fairly quick timeframe. Mark Parr – KeyBanc: Thanks again.

Thank you.

Our next question comes from the line of Chris Olin with Cleveland Research. You may proceed. Chris Olin – Cleveland Research: Hi, I just wanted to follow-up on the 2013 guidance once again just to make sure I understand where you’re coming from. If I take the SAO EBIT number of $66 million annualized, let’s just say $70 million, I get $280 million in 2013. So that’s incremental about $45 million presumably Latrobe, I’ll just say $30 million to $40 million, that’s $70 million incremental there. And that’s just considering all the numbers hold relatively flat. Am I missing something, are you expecting some type of margin erosion next year or is there something in the numbers that were skipped, it should be that conservative?

I mean you’re going a little too quick for me there on the math and the different pieces there but the direct answer, do we expect erosion in any of the pieces. No, we did expect continued progress on our SAO process, on our PEP businesses and with Latrobe. So I’d have to spend some more time in the way that you kind of laid it out your construct with the goal that we’ve established there would represent progress on all three fronts. Chris Olin – Cleveland Research: Have you – did you provide what the average middle lead time is right now versus the fourth quarter?

We’re actually looking some orders out into the end of the calendar year at this point, so we remain very strong as far as the demand. But again as we free up the capacity through the integration efforts that we have, we’ll be able to provide some additional transactional business as we work our way through the calendar year as well. Chris Olin – Cleveland Research: Okay, thanks.

Our next question comes from the line of Gautam Khanna with Cowen & Company. You may proceed. Gautam Khanna – Cowen & Company: Hi guys, I just want to follow-up on the guidance question. So I just want to be clear and in Q4 we’re estimating, you’ve done a $1.74 year-to-date the implied guidance to somewhere around $280 million. So is Q4 on a GAAP basis somewhere north of a dollar, because I just want to be true, we’re talking to same lines with?

I am not sure how to respond to your question Gautam, and the math for Q4 but... Gautam Khanna – Cowen & Company: Okay, maybe we can just talk about some of the items, so interest expense in Q4 will be comparable to Q3, is that fair around $6 million?

We’re not adding any debt to our interest expenses is constant [ph]. Gautam Khanna – Cowen & Company: Is there anything with respect to margins, I mean we saw the PEP margins stepped down a bit, would those rebound, if there is any one-time effect in the March quarter?

Yes, I don’t want to get deeply into providing specific guidance in the fourth quarter. I will point out on Latrobe that we do have – well we have $9 million of further inventory cost of effect, did a purchase accounting on Latrobe. So it’s got to be factored into the equation. And share dilution alone in the quarter is probably about $0.12. Gautam Khanna – Cowen & Company: Yes.

So between those two effects, you’ve got say $0.23 $0.24 headwind that we need to compensate for with the Latrobe operating results and the progress on the legacy Carpenter business. Gautam Khanna – Cowen & Company: Okay. Could you talk about, Kamon, you mentioned the capacity constrains in terms of spot business you were unable to fulfill so far this year, have you – can you quantify for that for us?

Obviously we’ve been expanding our premium capacity output and I think that’s a message I just want to emphasize is yes, there are constrains but we are expanding our output in the premium area. Some of that is through mixed management and some of it though the capacity investments that we’re making in the synergies coming from Latrobe. And we expect that to continue. We’ve tried not to highlight that. Clearly if we had the 27,000 tons that were at the premium facility available today, we think that we would be well utilizing a significant portion of what we’ve said is our first year target for that book. It would be wonderful to have it here today, but as a result, we’ve deferred and had to if you will spend out lead times on some of that business. Gautam Khanna – Cowen & Company: Okay. And then Doug, could you talk about kind of the cash pension requirements next year, fiscal ‘13?

I think we’re looking at roughly it will be our SEC filings, but we’re looking at roughly $55 million on legacy Carpenter and then probably another $15 million on Latrobe, so $70 million in total. Gautam Khanna – Cowen & Company: Thank you.

You’re welcome.

Our next question comes from the line of Alex Cook with Voyant Advisors. You may proceed. Alex Cook – Voyant Advisors: Good morning. Could you speak about the drivers of the increase in inventory?

Sure. Actually we have been working progressively bringing inventory down and we expect to continue that through the fourth quarter through just overall management but what we have done overtime is we’ve specifically built up some of our stock programs, some of our intermediate materials so that we can try to have the flexibility to provide responsiveness back to our customers given that we have relatively longer lead times. In addition to that, we’ve had almost $25 million worth of increase in the value of our inventory just as a result of the fact that there is a richer mix of products that we’re selling at this point in time. So both of those fasteners are contributing to build up between the first half of this year and now we’re working to bring that down. But again responsiveness is the priority right now. Alex Cook – Voyant Advisors: And then how much of that is related to the Latrobe acquisition?

Well there has been really, I would say very, very little as a result of the Latrobe acquisition. Now that we’re working together after the close, we’re obviously running some qualification runs of their product, some of the Reading facility and vice versa. So there might be some incremental effect but we wouldn’t point to that as a major driver. Alex Cook – Voyant Advisors: Okay, thank you very much.

(Operator Instructions) And our next question comes from the line of Tim Hayes with Davenport & Company. You may proceed. Tim Hayes – Davenport & Company: Hi good morning.

Good morning. Tim Hayes – Davenport & Company: Just to clarify on back on Latrobe and the impact from the inventory write-ups. The reported operating income was $2.9 million and how much of the – was there from the inventory write-up in that $2.9 million?

It’s the same number, Tim, $2.9 million if you look at one of that schedules in our press release, it breaks out that the getting from a $2.9 million Latrobe segment operating profit backing out the $2.9 million it’s due to the inventory write-up and then some other adjustments in getting to the little over $5 million of Latrobe operating results contribution in the – will both would effectively amounts to a month. Tim Hayes – Davenport & Company: Okay. So that’s the overall, there is a $2.2 million adjustment?

Right. I wish $2.9 million is the inventory item. Tim Hayes – Davenport & Company: Got it. Okay, thank you.

You’re welcome.

And we have no further questions at this time. I would now like to turn the call back over to the speakers for any closing remarks.

This is Mike Hajost. Thank you, again, for participating on today’s call. We look forward to speaking with you again next quarter. Thank you and Goodbye.

Ladies and gentlemen that concludes today’s conference. Thank you so much for your participation. You may now disconnect. Have a great day.