Good day and welcome to the Hexcel Corporation 2016 Third Quarter Earnings Conference. Today's conference is being recorded. Hosting today's conference are Mr. Wayne Pensky, Chief Financial Officer; and Mr. Nick Stanage, Chairman, Chief Executive Officer, and President. At this time, I would like to turn the conference over to Mr. Wayne Pensky. Please go ahead.

Good morning, everyone. Welcome to Hexcel Corporation's third quarter 2016 earnings conference call on October 20, 2016. Before beginning, let me cover the formalities. First, I want to remind everyone about the Safe Harbor provisions related to any forward-looking statements we may make during the course of this call. Certain statements contained in this call may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. They involve estimates, assumptions, judgments and uncertainties caused by a variety of factors that could cause future actual results or outcomes to differ materially from our forward-looking statements today. Such factors are detailed in the Company's SEC filings and last night's Press Release. Lastly, this call is being recorded by Hexcel Corporation and is copyrighted material. It cannot be recorded or rebroadcasted without our expressed permission. Your participation on this call constitutes our consent to that request. With me today are Nick Stanage, our Chairman, CEO and President; and Michael Bacal, our Investor Relations Manager. The purpose of the call is to review our third quarter 2016 results detailed in our press release issued yesterday. Now let me turn the call over to Nick.

Thanks, Wayne. Good morning, everyone, and thank you for joining us today. As you have seen in the last night's release, we had a strong third quarter with sales of $500 million, 12% above the third quarter of 2015 sales in constant currency. Our key growth programs remain on-track and performed as expected. Our operations continue to perform well delivering third quarter operating income of $89 million with a solid operating income margin of 17.8%. Our adjusted diluted EPS of $0.65 was 18% better than the third quarter of 2015. For the first nine months of the year, revenues are up about 9% to $1.520 billion as we remain on pace to achieve our first $2 billion sales year. Our adjusted diluted EPS for the first nine months is $1.94, 10% better than last year's period. Besides the strong commercial aerospace sales growth and 18% increase in adjusted diluted EPS this quarter, we also did a great job of generating cash. After generating $76 million of free cash flow this quarter, we are now at a positive $55 million of free cash flow for the first nine months of 2016. Wayne will provide more information on cash. Now let me briefly provide more detail on our markets. As usual, I will discuss year-over-year comparisons in constant currency. As you are aware, currency movements influence our reported results and some of this impact is not intuitive but the bottom line is that when the dollar is strong, our sales translate lower while our income increases and so our margin percentages improve. Commercial Aerospace now accounts for 72% of our total sales and our third quarter sales increased 15% versus 2015. Total revenue from new Airbus and Boeing programs, which include the 787, A350, A320neo and 737 MAX increased by about 40%…

Thanks, Nick. For the quarter, gross margin was 27.1% and for the first nine months of the year, gross margin was 28.2%. These strong results included start-up execution of several new production lines for additional capacity to support our forecasted growth. Exchange rates had nominal impact on the third quarter gross margin as compared to the third quarter of 2015. For the quarter, selling, general and administrative expenses of $35 million was slightly lower than the third quarter of 2015. As you recall, the third quarter of 2015 was our peak spend for the implementation of our new ERP systems and we did benefit from those system spends this quarter as compared to last year. Research and technology expenses were nearly $1 million higher than last year's third quarter; and for the first nine months of the year, these expenses are now 4% more than the comparable 2015 period and 7% higher in constant currency. I would remind you that the timing of our research and technology spend can be lumpy and we expect the fourth quarter to be the largest quarter for the year driven by development initiatives. For the quarter, operating income as a percentage of sales was 17.8% as compared to 17.4% in 2015. And for the first nine months operating income is $273 million, or 18% of the sales. Exchange rates contributed about 20 basis points to 2016s operating income percentage and 400 basis points to our year-to-date performance as compared to respective 2015 periods. Depreciation and amortization continued on a planned ramp with the expense for the first nine months of 2016, about $14 million higher in constant currency than the comparable 2015 period. In the recorder, we recognized a net benefit of $6.6 million or $0.07 per diluted share from the release of reserves…

Thanks, Wayne. Our strong performance year-to-date demonstrates we are executing on plan and we are on-track for another record year. We have increased our adjusted earnings guidance for the third quarter $0.03 tax benefit, so the range is now $2.52 to $2.58 per share. Our sales in total for the year remain on-track with our initial guidance. Accordingly, we are simply narrowing the range on full year sales guidance to $2.0 billion to $2.03 billion. With strong improvement in our free cash flow, we now expect to be at the high end of our guidance for both, free cash flow of $20 million to $60 million and CapEx of $280 million to $320 million. Looking ahead, I'd like to let you -- that we expect to issue our 2017 outlook on December 13 and we look forward to discussing it with you at that time. Also I would be remised if I didn't take a moment to talk about the extension and expansion of our agreements with Airbus that we announced last week. Our contract for the primary structure of the A350 was extended from 2028 through 2030. Additionally, we amended our contract for virtually all other products with the Airbus group including all commercial aircraft, rotorcraft, military programs and launch vehicles. So we now are covered for the entire A320 and A330 families and derivatives. This secures the business through 2030. Hexcel is proud to be a key partner to Airbus, and we look forward to further enhancing our strong long-term relationship as we support full Airbus suite of products. We believe these are mutually beneficial agreement that are excellent for Hexcel and our commitment of delivering strong returns to our shareholders. We now be happy to take your questions.

Thank you [Operator Instructions] And we'll take our first question from Myles Walton with Deutsche Bank please go ahead sir.

Thanks, good morning and good numbers. Can we start with a cash-flow which is terrific year-to-date and maybe why the lack of more upside in a full year, of course usually seasonal, is there anything in the working capital, where it looks maybe closer to a neutral in the fourth quarter versus this quarter historically then you can point us to.

Well, Myles we certainly hope that we're being a little bit conservative, having said that the seasonality we have and certainly the usage in the first half, especially the first quarter. I also point out that we've invested in system improvement and process improvements to help us manage our working capital day-to-day verses big end of month or quarter swing, so we've made a lot of those improvements. In the third quarter for example areas like accounts receivable, we ended September extremely strong. And it would be hard press to improve much there, our challenge will be to hold that for the balance of the year. And at the same time we got some opportunity to pull some CapEx in for efficiency and we're probably going to air towards the higher end our CapEx range. So all included, we're happy with the progress, we're certainly not going to give up. And maybe there is a little conservatism in there.

Okay. And then congratulations on the move with a contract for Airbus is there anything to read into as related to pricing or other aspects of the contract that we have that with the consider well in terms of the extension of timing.

We had contracts with Airbus, long-term contracts and as with most of our contracts and how we deal with our customers. we have continual cost reduction initiatives built into those contracts, where we drive cost out we share part of that with our customers, these contracts are no different, the great thing about these are the continuation obviously of our primary position on the A350 and up the debt 1000 as well as the legacy programs where we actually add in components and pieces to the agreement, to the tune of about 10% additional business within that contract. So securing both of those contracts up through 20-30. With very reasonable and acceptable terms from our perspective, just excites us on our path forward.

And then Wayne the adjusted incremental margins, of the adjusted for Max 24% about that, is that right for incremental?

That is correct.

Okay, thank you.

And we'll take our next question from Gautam Khanna from Cowen & Company. Please go ahead.

Yes, thanks good morning. You mentioned in December you're going to give us 2017 guidance, I was wondering if you had any plans to update the 2020 guidance, then if so what are the variance used to be already to what you previously put out there.

Yes, so we're going to release guidance so we are actually going to have an investor day on that same date in New York City, we’ll provide guidance and will also update our longer-term view. I would point out that there are some headwinds that will address and quantify in much more detail with respect to foreign exchange, quite different today purses where it was when we provided that vision. As well as Space & Defense looks little different specifically rotorcraft, and then there's even some white body reductions as I am sure you are well aware of. So we'll summarize that and put good packages together for December.

Okay. And maybe could you comment, you did say in your prepared remark that the BIZ [ph] regional stuff was the compare issue, kind of relatively stable quarter-to-quarter but year-over-year, you know the up 20 -- was just a function of dropping off last year in Q3?

Yes, last year it was very lumpy. First half of the year was extremely strong and the second half was extremely weak, so if you just look at the average quarterly sales last year compared this year, it's pretty much comparable, maybe just a little different.

Can you talk a little bit about your visibility in that part of the end market, are you seeing any incremental pressures you look at your order book Q4-Q1?

Well, I would say clearly Gulf Stream, [indiscernible] and Ambriar [ph] are three of the biggest, and there is no specific program that really drives that segment. I would tell you a Gulf Stream has been a particularly strong in the third quarter but going forward there is really nothing that jumps out, that really lead us to believe it will be much different.

Okay. And last one A350 inventories, what are you seeing in the supply chain characterized in the destocking or overstocking or why do feel about the balances of the material in the supply chain?

Well, obviously we -- it's a huge program for us and we're very vested in A350 and we stay very close in our line. So as we've said before, we're producing at a rate of about seven per month. We track Airbus's build rate, we're excited with the fact that they've delivered 26 to-date, actually 14 aircraft in Q3. So clearly the ramping up and better aligning the output with the delivery cycle. And I'm certainly a fan and supporter for them to continue to ramp up and try to get to or at least close to their objective to hit 50 for the year. So we don't -- we've got close to 50 ship-to locations and we ship about six months in advance, so it's a pretty complex supply chain, there is some that are a little low, some that are a little high, some that are right on; but in total if we do our top level checks and look at the build rate we're pretty much aligned.

Thanks a lot, Nick.

Yes, thank you.

And we'll take our next question from Howard Rubel with Jefferies. Your line is open sir, please go ahead.

Thank, thank you very much, excuse me. Nick, you spent a bunch of time addressing CapEx. Is there any way for you to provide us with some insights into how you've been able to improve the productivity of the capital SU and assets?

Well, that's a big question for big investment; as you know we are going to be pushing a high end. In the last couple of years we've had high CapEx and this has been really an unprecedented time period for Hexcel. If you look at the new lines we have brought on, the new plants and the building expansions through this year, it's clearly an unprecedented time for us with respect bringing new lines on. I can tell you we've enhanced our team; where we manage the projects, where we tracked the projects, where we manage the cash, where we manage the schedules and the team continues to perform extremely well, I'm also very excited that we're not only delivering the programs on cost and on budget but at/or above our expected throughput. So from the perspective of balancing our cash and our capital investment, we're constantly looking at our new throughput rates, and putting that into our equation Howard, because as you know what continuous flow operation; you want those lines running full and when you're bringing on new lines, the objective is to fill them up as quick as you can before you bring on the next tranche. So I think I'm excited with our performance to date on up and I'm even more excited with the opportunities going forward. We've got more technology, we see more data with online inspection from a throughput, and up time, a scrap and overall of productivity for line. So we're certainly not done driving improvements in that area as well.

Okay. I mean I guess that sort of goes to the point you're trying, you've made that your -- what excluding maintenance CapEx, you can talked about a cash conversion ratio that's -- how should I say it, a different way of looking at cash conversion and maybe more appropriate. Is that point you're trying to address?

Exactly. We look at our maintenance capital in the $50 million to $60 million per year range, and basically a balance or $250 million plus is to put in capacity for secure programs where we have long-term contracts. So from our perspective that it's really our acquisition; our organic acquisition strategy where we're going to grow. And I think we've demonstrated over the years we're very good at it and its very low risk and when you're replicating assets, you get a nice volume leverage within our plants to continue to expand our margins, which is certainly our objective.

Just to stay on, something else you talked about this new product and I think in the queue you addressed what appears to be new engineering products startups, I know the markets become more competitive but how are you going about battling the competition. And then second can you address some of the new programs that you've captured.

Well, I'd rather hold off on the new programs because I don't want to steal our funder for December, we're going to show some of them which we're really excited about, that go in our internal core business and some of the new platforms like the 737 MAX. I will tell you they are engineered products business. We've had some big mature programs come out like the C-17, and we're bringing them some new programs for like the 777-X and the MAX; is what was other helicopter rotorcraft blades. It is more competitive, it is more global, but having said that with our partnership in Malaysia, we're in a great position to basically position ourselves for the lower value or lower technology products into Malaysia and keeping the higher technical products in the Kent and into our U.S. based engineer products business. So yes it's more competitive yes there's some learning curve there but we're very happy at a 12% plus up income, the return on invested capital continues to be fantastic.

And then last Wayne, I think you talk about a 2017 debt issuance. And you have some form of the hedge how do we think about what that will do to interest expense. I mean you brought it up in the queue so I figured '17 is now -- I can talk about it or you could talk about it.

Absolutely. So we've talked a lot about you know our debt-to-EBITDA ratio, I'm trying to get it up and we still steadily increased it at the end of the quarter about 1.5 times. As we continue to try to increase that ratio as earnings growth that just means we're going to be borrowing more money. And so what the references do, we've entered into the treasury lock, $450 million as part of the first step in the process to lock in rates for next year. So as we look out to our next opportunity increase our debt, we got part of those rates already hedged in. And so you always see us increasing our debt, the issue will be we're going to need to proceed and proceeds – we've always been fairly clear, first is always to fund our organic growth, obviously can do that on our own. Second, will be M&A which you may or not be able to control of the action. And third will be return to shareholders; so we'll look at those rates in the combination together and we'll continue to just increase our debt out.

So just to close the loop on this, if you did just $150 million it's maybe -- kind of in the $4 million to $6 million increase in in your cost of money versus what you have now?

Yes, it obviously depends on what you do with that money really going to proper return to cover those interest costs.

Okay, thank you.

I hope would be that we do that.

Thanks, Howard.

And we'll take our next question from Rob Spingarn with Credit Suisse. Please go ahead.

Good morning. So just on the CapEx, at the higher end of the range, is that an increase from our earlier expected spending? Did you bring next year spending forward? How do we think about that?

Well, original guidance was 280 to 320, so it's in the range but as we get in the end of the year we like some flexibilities, that we can balance our workload and our resources, and in sometime -- in some cases some supplier end of the year discounts. So really, it is right in line with what we had expected that goes into our whole CapEx plan, it is really not a material change.

So maybe a function, the working capital came in better and freed up some cash and so you take advantage of those discounted in timing?

I would say independent of our working cash on capital performance; we probably would have done the same thing.

Okay. And then just a couple questions on the revenue outlook. I know you're going to go long term what we see you in December but just of ranges that you're contemplating for the fourth quarter here, by virtue of the full year guidance I think it's something like 2% growth in the quarter up to the low teens depending on what the end number is. What are some of the levers there and specifically can you talk a little bit about the organic decline industrial and how that transported and also what is driving Space & Defense.

Okay, so number of different questions. In terms of if you look at the mid-point of our guidance, that puts the fourth quarter sales just under what the third quarter came in at. And if you look at we have terms of now; when you go to compare that to the prior year, the fourth quarter of last year was a little bit higher than the third quarter of last year. So, for example of Space & Defense the comparative will be a little bit tougher. And so while we had growth this year we could do the same Space & Defense sales in the fourth quarter there will not be growth if you look at year-over-year reimbursement for the fourth quarter, gotten a little bit tougher comparison. On the industrial side, I wouldn't say aggressive; and two in particular that you know you're and you always have a little bit of people deciding whether to move stuff out and the following year or not, so it doesn't take much to move those sales. And then on commercial aerospace you know worked again thinking a number that's sort of in the same range as what we did in the third quarter.

Okay. And then all on the Space & Defense side; how is B-22 trending for you. Because I think about what Textron said earlier this morning that number that they did the quarter was six but I don't know that's a sustainable number, Based on the U.S. and Japanese rates, that that we're going to have.

So our B-22 sales are actually held pretty steady all year and they are online with what we expected. So there has not been thrust in his surprises.

So that steady going forward?

Yes, I will not make any commitment just going forward now, but for now, it has been holding.

Okay, and then just to -- then again the organic decline in industrial when it take out the acquisition.

Correct. Yes it's not a huge number but it's across -- well it's not any one particular but its be like our recreation businessmen and the all other which is really to distributors items not -- not necessarily was going to -- lately automotive part has been held up fine, it's been the recreation

And wind as well.

And wind is also fine as well.

Okay. And then last question but any more color on content on Max.

We probably will give guidance on both the 33 NEO [ph] and the 737-MAX in December, since they're going to enter service next year, it's still a little early on the 777-X, so I don't know yet if will give that but it's still a little early today.

Okay, thank you.

Thank you.

And we'll take our next question from Michael Sison with KeyBanc. Please go ahead.

Hey guys, nice quarter, almost as nice as the Indians win. I just needed -- so Nick, when you think about the new contract with Airbus, can you maybe -- and I think you highlighted some efforts but what opportunities within that does it give you to grow the business there, will it give you an edge in certain parts, or primary parts longer term and is there anything on the R&D front that you're working on that, you know for them that really them helps you out longer term in terms of growth?

Yes, okay. So I'll try to capture all the responses there if I don't Michael come back to me, so first off our focus with Airbus is continued to provide perfect delivery, perfect quality every time so it's operational execution and that's paramount especially as we're ramping up. The other thing is we're constantly working innovation and R&D collaboration on the next new opportunity, the next new opportunity to convert a heavier part to a lighter power to help them achieve their weight objectives, to help them achieve their noise in sound and environmental objectives. So, it's a heavy technology push. You know the contract that we amended they are virtually equal in size and by 2020; they will be well over $1 billion of an annual revenue. So it gives us an opportunity to take advantage out of the volume and drive continued the efficiency and productivity, while we deliver what they need as well as deliver what our shareholders expect.

Okay great, and then as a as a quick follow up. You talked about some factors that may influence the your outlook to 2020 and then going to give us an update in December, can you maybe just give us your thoughts on clearly folks; I worry about the cycle and given where stocks that then your strong performance this year, it seems to be laying [ph] in if you think about where their space cycle is overall deliveries. How much would that influence your growth potential if at all given where we're at?

Well, I first look at a couple of things; one I look at air traffic and whether it's going down, going up or it's trending towards the 25 historical, which from what I seen it is so. Air passenger traffic continues to grow high then look at the backlog in the backlog I believe last time I looked and Wayne will correct me over 12,000 aircraft or close to nine years of production. It's true that book-to-bill so far this year are below one, that did not surprise me as when you have a backlog as big as it is, at some point in time burning up some of that off is inevitable. Having said that, the other thing the commercial aerospace market is going through now, is really a transformation, with new aircraft coming online, new derivatives and new engines and new NEO and MAX is coming online, and those transitions are not simple they're very complex supply chains, and in some cases rate come down a little bit as others ramp up. But overall I like the position we're in, it's not only the rate that excite us, but we have the secular penetration. Where we have gained positions replacing heavier materials and we have new opportunities to replace even more. So I just feel good about the cycle and again our objective is to execute and continue innovate, which I can tell you were focused on and are working on every day.

Great, thank you.

Thanks, Michael.

And we'll take the next question from David Strauss with UBS. Please go ahead sir, your line is open.

Can you hear me now?

Yes, we can hear you David.

Okay, sorry about that technical difficulties. Good morning; I want to ask you about on the word by side [ph], you highlight or lower rate there on a go forward basis. are you actually see any of that impact yet in your numbers, so specifically talking about the A380 and some 4-7 stuff being down to lower rate.

So we have started to see some of the A380 and that was expected, and we've included that into our full year and certainly will be included in our guidance for next year. 747 has been going down so we've seen a little impact but the strength in the other programs that are ramping up have more than offset them. Again A380, if you remember went from 10 to 6 and now it's coming back up to 7, so there is some puts and takes there but we have seen the A380.

Okay, all right. Wayne, I guess a couple of question for you; SG&A as a percentage of sales, I think this is as low as we've ever seen it. Can you talk about kind of on a go forward basis where that should be? And then thinking a little bit about 2017 are we looking at a similar step-up in DNA in '17 relative to what we've seen in 2016?

So with respect to DNA obviously we'll give guidance on actually both your question in December but in general yes, the answer is it will be going up whether it's exactly the same as this year or not, we'll get to later but it will be a double-digit million increase. With respect to SG&A, our goal is to leverage SG&A as our sales grow and we would expect it's inflation or less in terms of how it increases and that's our target.

Okay. And then last one for me, can you give us a currency update hedging where you stand relative to '17? Thanks.

Sure. We're probably as of today 70% to 75% hedged for 2017. We'll give specific numbers in December but in general the hedged rate for '17 is better than the hedged rate for '16. So FX will be a little tailwind.

Right, Okay. Tailwind again but probably not as big of -- kind of incremental tailwind is what you saw in '16, right?

Yes, probably not but we'll get to specific in December.

All right, thanks guys.

Thanks, David.

And we'll take out next question from Ken Herbert with Canaccord. Please go ahead sir.

Hi good morning. Nick and Wayne, I just wanted to dig into the gross margin a little bit. Can you quantify in terms of your -- say output either in the quarter or year-to-date? What percent is coming from the new capacity you've added versus I guess what's been in place and the nature of the question is really some of your comments earlier on Wayne when you highlighted some of the startup costs being a bit of a head wind to the gross margin; I'm just trying to get a better sense as to how we should think about that from the size or impact standpoint?

That's a difficult question to answer. So let me start it this way, so if you look at the first quarter of last year when we didn't have any startups and anything like that, well that's probably as good as you are going to get. So if you're like adverse today where we've had a number of different line startups during the course of the year and during the quarter, as you go through the process you obviously start depreciation, you hire and train a workforce to run it, you go through the qualification process and you recurring all these costs without actually generating a whole lot of revenue and then obviously the lines are full day one because you got to -- you have to ramp up because of the capacity requirement. So in the grand scheme of things if anyone thing is not huge but you know we're down one or two points percentage in total from our peak and maybe that's probably the best way to think about it.

Okay, now that's helpful. And as you look at -- obviously, as you're bringing the capacity online; for all those items you mentioned has there been any part of these that -- obviously they are small individually but as a collective any aspect that have been either better that you expected or we're maybe seeing certainly a little better drop down than you may have thought initially or any areas where you're seeing maybe a little more headwind?

Again, overall I think our performance has been very good and nothing stands out, certainly nothing on the downside just incremental opportunity to continue to drive productivity and increase throughput. So we pretty much executed as we had hoped or better.

Okay, and then as you've typically said, I imagine volume going forward I mean clearly the biggest driver when you think about desorption from this standpoint, is that still the right way to think about it?

Yes, that's correct. I mean, Nick mentioned, we're always trying to get more throughput and increase better yield, etcetera, when we'll always push for that but volume always helps.

And then just finally have you seen anything – I mean the last quarter or two relative to material costs or anything else that's moved one way or the other against you?

Not I really remember, most of our materials are under long-term agreement as well, line up with our long-term agreements with our customers. The one night item for us that's always up and down is the growing nitro [ph] which is the raw ingredient but that's -- for to make carbon fiber I should say but that's actually been fairly stable over the last few quarters, and then absolute dollar, it's not that big.

Okay, great. And just one final clarification, you mentioned on the new Airbus contract I think you said -- Nick, 10% on the -- sort of non-primarily A350 contract is -- was that sort of incremental share gain or content should one as part of that contract, I just want to make sure that I capture that correctly.

Well, some of that is items that were not include with the original contract and there are some items in there that are incremental where parts have been converted.

Okay, great. Thank you very much, nice quarter.

Thanks.

Thank you.

And we'll take our next question from Noah Poponak from Goldman Sachs.

Hi good morning, this is [indiscernible] on for Noah. You reported mostly higher year-on-year sales on helicopters. Could you provide color on commercial in the [indiscernible] platform sales compared to the last quarters? Some companies have different exposures to ONG [ph], do you still refer deteriorating business environment; so if you could provide any color here it would be great.

Just to make sure I understand the question, it's regarding helicopter. We're up a little bit year-over-year but again, if you go back to last year, the first half of the year even for helicopters is strong and the second half was weak. If you look for the first three quarters of this year, I'll say it's a little bit relatively stable and we've sort of even for the last four quarters have run kind of at the same level. So it's little above the third quarter of last year, much lower than the first half of last year but it's been about the same level through last quarters.

And I'd just add, if you look at Airbus or Augusta Westland, none of them standout, its much across the board with respect to the movement.

And remember commercial is probably…

You don't have any different from commercial to defense platforms?

Not really. I mean commercial now is 15% of the total rotorcrafts, so this is built mostly about military.

Okay. And then another question, if you exclude the A350 what would the Aerospace business growth has been this quarter?

Small. So just to be clear, most of the growth -- that come from the A350, a little bit from the A320neo but those are the two primarily reasons for the growth.

Okay, perfect, thank you.

And we'll take our final question from Ron [ph] from Bank of America Merrill Lynch. Please go ahead.

Good morning guys, its actually Kristine Liwag calling in for Ron [ph]. Nick, I just wanted to get a little bit of better understanding for the amendment of your Airbus contract. Can you provide a little bit more color on why the contracts were amended now? Is it something that Airbus approached you to amend or is there something that you approached to Airbus to change?

Well, I'd like to think it was mutual and you can imagine we're constantly working new programs and new technologies with Airbus. This -- it just is the culmination of years and years of work and with new programs coming into play with NEOs and the -1000 [ph], it's just a matter of timing. So a lot of these positions, most of these positions are sole-sourced and have security of supply, it's good for our customers, its good for us, it's good for our supply base and it helps us optimize our supply chain. So if you're asking why did we announce it last week, it's a function of when I had an opportunity to go over and sign it with Airbus which was a few days before that; nothing other than timing and working through very complex and detailed contracts.

And then can you remind us, are your Boeing contracts similarly structured to Airbus contract? And if there is a master one and there are different program ones? And also are there any milestones that we should watch in the next few years with regard to your contracts with Boeing?

I wouldn't say any of our contracts are the same, they're all unique and Boeing is no different. So I don't want to get specifically but we have multiple contracts with Boeing that we continue to work and we will continue to work.

Okay. And are there any contact expirations that we should watch in the near-term?

So the Boeing contract is clearly are shorter in duration than the Airbus ones but there is nothing -- if you're thinking of milestones there is no particular milestone that we need to worry about.

Great, thank you.

Thank you.

And with there being no further questions that concludes todays call. Thank you for your participation. You may now disconnect.