SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

Quarterly Report Under Section 13 or 15(d)

of the Securities Exchange Act of 1934

For the Quarter Ended December 30,
2007

Commission File No. 1-10348

Precision Castparts Corp.

An Oregon Corporation

IRS Employer Identification No. 93-0460598

4650 S.W. Macadam Avenue

Suite 400

Portland,
Oregon 97239-4254

Telephone: (503) 417-4800

Indicate by checkmark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  x    No   ̈

Indicate by check
mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act.

Large accelerated filer  x            Accelerated
filer   ̈            Non-accelerated filer   ̈

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes   ̈    No  x

Number of shares of Common Stock, no par value, outstanding as of
January 30, 2008: 138,933,502

Note: This 10-Q was filed electronically via EDGAR with the Securities and Exchange Commission.









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PART 1: FINANCIAL INFORMATION



|Item 1. | Financial Statements
|------- | --------------------

Precision Castparts Corp. and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited)

(In millions, except per share data)



|                                                       |  |                    |         |   |          |   |         |  
|------------------------------------------------------ |  | ------------------ | ------- | - | -------- | - | ------- | -
|                                                       |  | Three Months Ended |        
|                                                       |  | 12/30/07           |         |   | 12/31/06 |  
|Net sales                                              |  | $                  | 1,696.6 |   |          | $ | 1,382.6 |  
|Cost of goods sold                                     |  |                    | 1,232.3 |   |          |   | 1,049.5 |  
|Selling and administrative expenses                    |  |                    | 90.8    |   |          |   | 86.9    |  
|Interest expense, net                                  |  |                    | 10.1    |   |          |   | 12.3    |  
|                                                       |  |                    |         |   |          |   |         |  
|Income before income taxes and minority interest       |  |                    | 363.4   |   |          |   | 233.9   |  
|Income tax expense                                     |  |                    | 120.9   |   |          |   | 75.6    |  
|Minority interest in earnings of consolidated entities |  |                    | (0.3    | ) |          |   | (0.4    | )
|                                                       |  |                    |         |   |          |   |         |  
|Net income from continuing operations                  |  |                    | 242.2   |   |          |   | 157.9   |  
|Net income from discontinued operations                |  |                    | 4.3     |   |          |   | 0.8     |  
|                                                       |  |                    |         |   |          |   |         |  
|Net income                                             |  | $                  | 246.5   |   |          | $ | 158.7   |  
|                                                       |  |                    |         |   |          |   |         |  
|Net income per common share  basic:                   |  |                    |         |   |          |   |         |  
|Net income from continuing operations                  |  | $                  | 1.75    |   |          | $ | 1.16    |  
|Net income from discontinued operations                |  |                    | 0.03    |   |          |   | 0.01    |  
|                                                       |  |                    |         |   |          |   |         |  
|                                                       |  | $                  | 1.78    |   |          | $ | 1.17    |  
|                                                       |  |                    |         |   |          |   |         |  
|Net income per common share  diluted:                 |  |                    |         |   |          |   |         |  
|Net income from continuing operations                  |  | $                  | 1.73    |   |          | $ | 1.14    |  
|Net income from discontinued operations                |  |                    | 0.03    |   |          |   | 0.01    |  
|                                                       |  |                    |         |   |          |   |         |  
|                                                       |  | $                  | 1.76    |   |          | $ | 1.15    |  
|                                                       |  |                    |         |   |          |   |         |  
|Weighted average common shares outstanding:            |  |                    |         |   |          |   |         |  
|Basic                                                  |  |                    | 138.3   |   |          |   | 136.1   |  
|Diluted                                                |  |                    | 140.4   |   |          |   | 138.1   |  

See Notes to the Condensed Consolidated Financial Statements.



2



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Precision Castparts Corp. and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited)

(In millions, except per share data)



|                                                       |  |                   |         |   |          |   |         |  
|------------------------------------------------------ |  | ----------------- | ------- | - | -------- | - | ------- | -
|                                                       |  | Nine Months Ended |        
|                                                       |  | 12/30/07          |         |   | 12/31/06 |  
|Net sales                                              |  | $                 | 5,078.7 |   |          | $ | 3,810.2 |  
|Cost of goods sold                                     |  |                   | 3,704.9 |   |          |   | 2,897.0 |  
|Selling and administrative expenses                    |  |                   | 279.4   |   |          |   | 247.5   |  
|Interest expense, net                                  |  |                   | 36.3    |   |          |   | 40.6    |  
|                                                       |  |                   |         |   |          |   |         |  
|Income before income taxes and minority interest       |  |                   | 1,058.1 |   |          |   | 625.1   |  
|Income tax expense                                     |  |                   | 356.2   |   |          |   | 210.0   |  
|Minority interest in earnings of consolidated entities |  |                   | (0.9    | ) |          |   | (1.2    | )
|                                                       |  |                   |         |   |          |   |         |  
|Net income from continuing operations                  |  |                   | 701.0   |   |          |   | 413.9   |  
|Net income from discontinued operations                |  |                   | 7.3     |   |          |   | 14.7    |  
|                                                       |  |                   |         |   |          |   |         |  
|Net income                                             |  | $                 | 708.3   |   |          | $ | 428.6   |  
|                                                       |  |                   |         |   |          |   |         |  
|Net income per common share  basic:                   |  |                   |         |   |          |   |         |  
|Net income from continuing operations                  |  | $                 | 5.08    |   |          | $ | 3.05    |  
|Net income from discontinued operations                |  |                   | 0.06    |   |          |   | 0.11    |  
|                                                       |  |                   |         |   |          |   |         |  
|                                                       |  | $                 | 5.14    |   |          | $ | 3.16    |  
|                                                       |  |                   |         |   |          |   |         |  
|Net income per common share  diluted:                 |  |                   |         |   |          |   |         |  
|Net income from continuing operations                  |  | $                 | 5.00    |   |          | $ | 3.01    |  
|Net income from discontinued operations                |  |                   | 0.06    |   |          |   | 0.10    |  
|                                                       |  |                   |         |   |          |   |         |  
|                                                       |  | $                 | 5.06    |   |          | $ | 3.11    |  
|                                                       |  |                   |         |   |          |   |         |  
|Weighted average common shares outstanding:            |  |                   |         |   |          |   |         |  
|Basic                                                  |  |                   | 137.9   |   |          |   | 135.6   |  
|Diluted                                                |  |                   | 140.1   |   |          |   | 137.6   |  

See Notes to the Condensed Consolidated Financial Statements.



3



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Precision Castparts Corp. and Subsidiaries

Condensed Consolidated Balance Sheets

(Unaudited)

(In millions)



|                                                                                                                   |  |          |         |   |         |   |         |  
|------------------------------------------------------------------------------------------------------------------ |  | -------- | ------- | - | ------- | - | ------- | -
|                                                                                                                   |  | 12/30/07 |         |   | 4/01/07 |  
|ASSETS                                                                                                             |  |          |         |   |         |   |         |  
|Current assets:                                                                                                    |  |          |         |   |         |   |         |  
|Cash and cash equivalents                                                                                          |  | $        | 176.5   |   |         | $ | 150.4   |  
|Receivables, net                                                                                                   |  |          | 961.5   |   |         |   | 846.8   |  
|Inventories                                                                                                        |  |          | 956.7   |   |         |   | 872.6   |  
|Prepaid expenses                                                                                                   |  |          | 25.4    |   |         |   | 22.9    |  
|Deferred income taxes                                                                                              |  |          | 93.9    |   |         |   | 109.1   |  
|Discontinued operations                                                                                            |  |          | 40.6    |   |         |   | 35.1    |  
|                                                                                                                   |  |          |         |   |         |   |         |  
|Total current assets                                                                                               |  |          | 2,254.6 |   |         |   | 2,036.9 |  
|                                                                                                                   |  |          |         |   |         |   |         |  
|Property, plant and equipment, at cost                                                                             |  |          | 1,941.7 |   |         |   | 1,757.5 |  
|Less - accumulated depreciation                                                                                    |  |          | (847.8  | ) |         |   | (759.7  | )
|                                                                                                                   |  |          |         |   |         |   |         |  
|Net property, plant and equipment                                                                                  |  |          | 1,093.9 |   |         |   | 997.8   |  
|                                                                                                                   |  |          |         |   |         |   |         |  
|Goodwill                                                                                                           |  |          | 2,349.5 |   |         |   | 2,088.8 |  
|Acquired intangible assets, net                                                                                    |  |          | 8.7     |   |         |   | 10.8    |  
|Other assets                                                                                                       |  |          | 127.6   |   |         |   | 117.1   |  
|Discontinued operations                                                                                            |  |          | 7.9     |   |         |   | 7.3     |  
|                                                                                                                   |  |          |         |   |         |   |         |  
|                                                                                                                   |  | $        | 5,842.2 |   |         | $ | 5,258.7 |  
|                                                                                                                   |  |          |         |   |         |   |         |  
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                               |  |          |         |   |         |   |         |  
|Current liabilities:                                                                                               |  |          |         |   |         |   |         |  
|Short-term borrowings                                                                                              |  | $        | 150.1   |   |         | $ | 383.1   |  
|Long-term debt currently due                                                                                       |  |          | 20.5    |   |         |   | 170.7   |  
|Accounts payable                                                                                                   |  |          | 566.2   |   |         |   | 580.2   |  
|Accrued liabilities                                                                                                |  |          | 420.0   |   |         |   | 435.9   |  
|Income taxes payable                                                                                               |  |          | 58.4    |   |         |   | 67.1    |  
|Discontinued operations                                                                                            |  |          | 25.3    |   |         |   | 21.2    |  
|                                                                                                                   |  |          |         |   |         |   |         |  
|Total current liabilities                                                                                          |  |          | 1,240.5 |   |         |   | 1,658.2 |  
|Long-term debt                                                                                                     |  |          | 476.1   |   |         |   | 319.2   |  
|Pension and other postretirement benefit obligations                                                               |  |          | 278.7   |   |         |   | 320.5   |  
|Other long-term liabilities                                                                                        |  |          | 158.3   |   |         |   | 94.5    |  
|Deferred tax liability                                                                                             |  |          | 21.9    |   |         |   | 25.4    |  
|Discontinued operations                                                                                            |  |          | 4.3     |   |         |   | 4.7     |  
|                                                                                                                   |  |          |         |   |         |   |         |  
|Total liabilities                                                                                                  |  |          | 2,179.8 |   |         |   | 2,422.5 |  
|                                                                                                                   |  |          |         |   |         |   |         |  
|Shareholders equity:                                                                                              |  |          |         |   |         |   |         |  
|Common stock: $1 stated value, authorized: 450,000,000 shares; issued and outstanding: 138,542,833 and 137,208,948 |  |          | 138.5   |   |         |   | 137.2   |  
|Paid-in capital                                                                                                    |  |          | 977.0   |   |         |   | 878.5   |  
|Retained earnings                                                                                                  |  |          | 2,598.6 |   |         |   | 1,903.2 |  
|Accumulated other comprehensive loss                                                                               |  |          | (51.7   | ) |         |   | (82.7   | )
|                                                                                                                   |  |          |         |   |         |   |         |  
|Total shareholders equity                                                                                         |  |          | 3,662.4 |   |         |   | 2,836.2 |  
|                                                                                                                   |  |          |         |   |         |   |         |  
|                                                                                                                   |  | $        | 5,842.2 |   |         | $ | 5,258.7 |  
|                                                                                                                   |  |          |         |   |         |   |         |  

See Notes to the Condensed Consolidated Financial Statements.



4



---

Precision Castparts Corp. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In millions)



|                                                                                                     |  |                   |        |   |          |   |        |  
|---------------------------------------------------------------------------------------------------- |  | ----------------- | ------ | - | -------- | - | ------ | -
|                                                                                                     |  | Nine Months Ended |       
|                                                                                                     |  | 12/30/07          |        |   | 12/31/06 |  
|Cash flows from operating activities:                                                                |  |                   |        |   |          |   |        |  
|Net income                                                                                           |  | $                 | 708.3  |   |          | $ | 428.6  |  
|Net income from discontinued operations                                                              |  |                   | (7.3   | ) |          |   | (14.7  | )
|Non-cash items included in net income:                                                               |  |                   |        |   |          |   |        |  
|Depreciation and amortization                                                                        |  |                   | 97.8   |   |          |   | 83.2   |  
|Stock-based compensation expense                                                                     |  |                   | 26.9   |   |          |   | 17.7   |  
|Deferred income taxes                                                                                |  |                   | 36.4   |   |          |   | (3.2   | )
|Excess tax benefits on equity instruments issued under share-based payment arrangements              |  |                   | (38.9  | ) |          |   | (20.7  | )
|Changes in assets and liabilities, excluding effects of acquisitions and dispositions of businesses: |  |                   |        |   |          |   |        |  
|Receivables                                                                                          |  |                   | (101.9 | ) |          |   | (106.8 | )
|Inventories                                                                                          |  |                   | (15.7  | ) |          |   | 70.5   |  
|Other current assets                                                                                 |  |                   | 1.3    |   |          |   | (4.0   | )
|Payables, accruals and current taxes                                                                 |  |                   | (59.6  | ) |          |   | 42.9   |  
|Retirement benefit obligations                                                                       |  |                   | (38.4  | ) |          |   | 18.8   |  
|Other non-current assets and liabilities                                                             |  |                   | (31.6  | ) |          |   | (49.0  | )
|Net cash (used) provided by operating activities of discontinued operations                          |  |                   | (1.6   | ) |          |   | 3.5    |  
|                                                                                                     |  |                   |        |   |          |   |        |  
|Net cash provided by operating activities                                                            |  |                   | 575.7  |   |          |   | 466.8  |  
|                                                                                                     |  |                   |        |   |          |   |        |  
|Cash flows from investing activities:                                                                |  |                   |        |   |          |   |        |  
|Acquisitions of businesses                                                                           |  |                   | (254.2 | ) |          |   | (542.0 | )
|Capital expenditures                                                                                 |  |                   | (154.9 | ) |          |   | (152.6 | )
|Proceeds from the sale of businesses                                                                 |  |                   |       |   |          |   | 34.3   |  
|Other                                                                                                |  |                   | 7.8    |   |          |   | 27.1   |  
|Net cash used by investing activities of discontinued operations                                     |  |                   | (0.3   | ) |          |   | (1.5   | )
|                                                                                                     |  |                   |        |   |          |   |        |  
|Net cash used by investing activities                                                                |  |                   | (401.6 | ) |          |   | (634.7 | )
|                                                                                                     |  |                   |        |   |          |   |        |  
|Cash flows from financing activities:                                                                |  |                   |        |   |          |   |        |  
|Net change in short-term borrowings                                                                  |  |                   | 149.8  |   |          |   | 297.9  |  
|Net change in long-term debt                                                                         |  |                   | (376.4 | ) |          |   | (122.5 | )
|Common stock issued                                                                                  |  |                   | 37.6   |   |          |   | 24.6   |  
|Excess tax benefits on equity instruments issued under share-based payment arrangements              |  |                   | 38.9   |   |          |   | 20.7   |  
|Cash dividends                                                                                       |  |                   | (12.4  | ) |          |   | (12.2  | )
|Other                                                                                                |  |                   | (2.1   | ) |          |   | 2.3    |  
|Net cash provided by financing activities of discontinued operations                                 |  |                   |       |   |          |   | 2.7    |  
|                                                                                                     |  |                   |        |   |          |   |        |  
|Net cash (used) provided by financing activities                                                     |  |                   | (164.6 | ) |          |   | 213.5  |  
|                                                                                                     |  |                   |        |   |          |   |        |  
|Effect of exchange rate changes on cash and cash equivalents                                         |  |                   | 16.6   |   |          |   | 19.8   |  
|                                                                                                     |  |                   |        |   |          |   |        |  
|Net increase in cash and cash equivalents                                                            |  |                   | 26.1   |   |          |   | 65.4   |  
|Cash and cash equivalents at beginning of period                                                     |  |                   | 150.4  |   |          |   | 59.9   |  
|                                                                                                     |  |                   |        |   |          |   |        |  
|Cash and cash equivalents at end of period                                                           |  | $                 | 176.5  |   |          | $ | 125.3  |  
|                                                                                                     |  |                   |        |   |          |   |        |  

See Notes to the Condensed Consolidated Financial Statements.



5



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Precision Castparts Corp. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

(In millions, except share and per share data)



|(1) | Basis of Presentation
|--- | ---------------------

The condensed consolidated financial
statements have been prepared by Precision Castparts Corp. (PCC or the Company), without audit and subject to year-end adjustment, in accordance with accounting principles generally accepted in the United States of America,
except that certain information and footnote disclosures made in the latest annual report on Form 10-K have been condensed or omitted for the interim statements. Certain costs are estimated for the full year and allocated in interim periods based on
estimates of operating time expired, benefit received, or activity associated with the interim period. The condensed consolidated financial statements reflect all adjustments, which are, in the opinion of management, necessary for a fair
representation of the results for the interim periods. Certain reclassifications have been made to prior year amounts to conform to the current year presentation. The year-end condensed balance sheet data was derived from audited financial
statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America.



|(2) | Stock-based compensation
|--- | ------------------------

During the three and nine months ended
December 30, 2007 and December 31, 2006, the Company recorded stock-based compensation expense under its stock option, employee stock purchase, deferred stock unit and deferred compensation plans. A detailed description of the awards under
these plans and the respective accounting treatment is included in the Notes to the Consolidated Financial Statements included in the Companys Annual Report on Form 10-K for the year ended April 1, 2007.

The following table sets forth total stock-based compensation expense and the related tax benefit recognized in the Condensed Consolidated Statements of Operations:



|                                                          |  |                    |      |   |                   |   |      |          |  |   |          |   |  |   |      |  
|--------------------------------------------------------- |  | ------------------ | ---- | - | ----------------- | - | ---- | -------- |  | - | -------- | - |  | - | ---- | -
|                                                          |  | Three Months Ended |      |   | Nine Months Ended |  
|                                                          |  | 12/30/07           |      |   | 12/31/06          |   |      | 12/30/07 |  |   | 12/31/06 |  
|Cost of goods sold                                        |  | $                  | 3.1  |   |                   | $ | 2.0  |          |  | $ | 8.0      |   |  | $ | 5.6  |  
|Selling, general and administrative                       |  |                    | 5.7  |   |                   |   | 5.5  |          |  |   | 18.9     |   |  |   | 12.1 |  
|                                                          |  |                    |      |   |                   |   |      |          |  |   |          |   |  |   |      |  
|Stock-based compensation expense before income taxes      |  |                    | 8.8  |   |                   |   | 7.5  |          |  |   | 26.9     |   |  |   | 17.7 |  
|Income tax benefit                                        |  |                    | (2.7 | ) |                   |   | (2.0 | )        |  |   | (8.4     | ) |  |   | (4.6 | )
|                                                          |  |                    |      |   |                   |   |      |          |  |   |          |   |  |   |      |  
|Total stock-based compensation expense after income taxes |  | $                  | 6.1  |   |                   | $ | 5.5  |          |  | $ | 18.5     |   |  | $ | 13.1 |  
|                                                          |  |                    |      |   |                   |   |      |          |  |   |          |   |  |   |      |  



|(3) | Acquisition
|--- | -----------

On July 5, 2007, PCC acquired the stock of
Caledonian Alloys Group Limited (Caledonian) for approximately $208.1 million in cash, of which $165.1 million was paid at close, and two additional contingent payments of approximately $21.5 million each will be paid over the two years
subsequent to acquisition. Caledonian is a market leader in providing nickel superalloy and titanium revert management solutions for the aerospace and industrial gas turbine (IGT) industries. Revert includes metal chips, casting gates,
bar ends, forging flash, and other byproducts from casting, forging, and fastener manufacturing processes that can be re-melted and reused. Headquartered in Livingston, Scotland, Caledonian employs approximately 300 people and operates nine revert
processing facilities in six countries. The Caledonian acquisition is



6



---

a stock purchase for tax purposes and operates as part of the Forged Products segment. This transaction resulted in
$191.5 million of goodwill and other intangibles. As of December 30, 2007, the purchase price allocation is subject to further refinement as analyses are completed, including the valuation of intangibles. The impact of this acquisition was not
material to the Companys consolidated results of operations; consequently, pro forma information has not been included.

On April 3, 2007, PCC
acquired the assets of McWilliams Forge Company, Inc. (McWilliams), a privately held company headquartered in Rockaway, New Jersey, for $91.4 million in cash. Founded in 1880, McWilliams is a manufacturer of titanium, nickel and steel
forgings, primarily for commercial and military aerospace applications. McWilliams, which employs approximately 120 people at its New Jersey facility, operates both hammer and screw presses for open and closed die forging. The McWilliams acquisition
is an asset purchase for tax purposes and operates as part of the Forged Products segment. This transaction resulted in $57.6 million of goodwill and other intangibles. As of December 30, 2007, the purchase price allocation is subject to
further refinement as analyses are completed, including the valuation of intangibles. The impact of this acquisition was not material to the Companys results of operations; consequently, pro forma information has not been included.

On February 23, 2007, PCC acquired the LLC membership interests of Cherry Aerospace LLC (Cherry) from Acument Global Technologies, Inc.
(Acument) for $298.1 million in cash. Founded in 1939, Cherry encompasses the aerospace operations of Acument, formerly Textron Fastening Systems, and is a manufacturer of aerospace rivets and blind bolts. Cherry employs approximately
500 people at its facility in Santa Ana, California. The Cherry acquisition is an asset purchase for tax purposes and operates as part of the Fastener Products segment. This transaction resulted in $250.4 million of goodwill and other intangibles.
As of December 30, 2007, the purchase price allocation is subject to further refinement as analyses are completed, including the valuation of intangibles.

On February 2, 2007, PCC acquired the stock of GSC Foundries, Inc. (GSC), a manufacturer of aluminum and steel structural investment castings for aerospace, energy, medical, and other end markets for $77.1 million in cash.
GSC employs approximately 375 people at its operations in Ogden, Utah, and Saltillo, Mexico. The Mexico operation was closed subsequent to the acquisition. The GSC acquisition is an asset purchase for tax purposes and operates as part of the
Investment Cast Products segment. This transaction resulted in $55.4 million of goodwill and other intangibles. As of December 30, 2007, the purchase price allocation is subject to further refinement as analyses are completed, including the
valuation of intangibles.

On May 25, 2006, PCC completed the acquisition of Special Metals Corporation (SMC), a manufacturer of
high-performance nickel-based alloys and super alloys. SMC currently provides our forging operations with a limited quantity of nickel-based alloys for manufacturing aerospace components, and it is expected that this internal supply will continue to
grow over time. The aggregate purchase price was $548.1 million, which principally includes $310.6 million for the purchase of shares and $240.1 million for the repayment of SMCs outstanding debt and related termination costs, partially offset
by $22.3 million of cash acquired. The transaction was funded through the Companys credit facilities. The SMC acquisition is a stock purchase for tax purposes and operates as part of the Forged Products segment.

The allocation of SMCs purchase price is summarized below:



|                                                 |  |         |      
|------------------------------------------------ |  | ------- | -----
|                                                 |  | 5/25/06
|Current assets                                   |  | $       | 627.2
|Property, plant and equipment                    |  |         | 165.9
|Goodwill                                         |  |         | 118.9
|Intangible assets                                |  |         | 5.5  
|Other assets                                     |  |         | 16.6 
|                                                 |  |         |      
|Total assets acquired                            |  |         | 934.1
|                                                 |  |         |      
|Notes payable and current portion long-term debt |  |         | 1.2  



7



---

|                                               |  |   |      
|---------------------------------------------- |  | - | -----
|Accounts payable and other current liabilities |  |   | 236.4
|Long-term debt                                 |  |   | 1.6  
|Other long-term liabilities                    |  |   | 146.8
|                                               |  |   |      
|Total liabilities assumed                      |  |   | 386.0
|                                               |  |   |      
|Net assets acquired                            |  | $ | 548.1
|                                               |  |   |      

Acquired intangible assets of $5.5 million include patents totaling $5.2 million with an 8-year weighted average
useful life and a license agreement valued at $0.3 million with a 3-year useful life. The $118.9 million of goodwill was assigned to the Forged Products segment and is not deductible for tax purposes.

The operating results for the fiscal 2007 acquisitions, including SMC, GSC and Cherry, have been included in the Companys consolidated statement of operations
since the closing date of each acquisition. The following pro forma information presents a summary of the results of operations of the Company assuming these acquisitions had occurred at the beginning of the periods presented. The unaudited pro
forma information is not necessarily indicative of the results that would have occurred had these acquisitions been completed at the beginning of the periods presented, nor is it necessarily indicative of future results.



|                             |  |                   |         |                  |   |        
|---------------------------- |  | ----------------- | ------- | ---------------- | - | -------
|                             |  | Three MonthsEnded |         | Nine MonthsEnded
|                             |  | 12/31/06          |         | 12/31/06        
|Net sales                    |  | $                 | 1,421.4 |                  | $ | 4,062.8
|Net income                   |  | $                 | 163.3   |                  | $ | 444.0  
|Net income per share-basic   |  | $                 | 1.20    |                  | $ | 3.27   
|Net income per share-diluted |  | $                 | 1.19    |                  | $ | 3.23   



|(4) | Discontinued Operations
|--- | -----------------------

In the third quarter of fiscal 2008, the
Company entered into an agreement to sell the Shape Memory Alloys (SMA) business that was purchased with the SMC acquisition. SMA has been reclassified from the Forged Products segment to discontinued operations. The sale of SMA was
completed in the fourth quarter of fiscal 2008.

Also subsequent to quarter-end, PCC completed the sale of Rescal, a small foreign business held-for-sale
from the acquisition of SMC.

In the second quarter of fiscal 2007, the Company sold its interest in Wyman-Gordon FRISA to its 50% joint venture partner.
PCC received $30.0 million in cash for the sale. In addition, the buyer assumed and subsequently paid off $17.4 million of debt upon closing. At the time of the closing, the joint venture entity operated a manufacturing facility located in Mexico
that was engaged in the manufacture of forged products using the ring rolling process. FRISA has been reclassified from the Forged Products segment to discontinued operations.

In the first quarter of fiscal 2007, the Company decided to sell the refiner rebuild business of J&L Fiber Services and to close its AFT Composites business. These businesses have been reclassified from the former
Industrial Products segment to discontinued operations. Both transactions were completed by the third quarter of fiscal 2007.

These businesses meet the
criteria as a component of an entity under Statement of Financial Accounting Standards (SFAS) No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. Accordingly, any operating results of these
businesses are presented in the Companys Condensed Consolidated Statements of Operations as discontinued operations, net of income tax, and all prior periods have been reclassified. In addition, gains and losses on operations discontinued in
prior periods are also included below.



8



---

The components of discontinued operations for the periods presented are as follows:



|                                                            |  |                   |      |   |                  |   |      |          |  |   |          |   |  |   |     
|----------------------------------------------------------- |  | ----------------- | ---- | - | ---------------- | - | ---- | -------- |  | - | -------- | - |  | - | ----
|                                                            |  | Three MonthsEnded |      |   | Nine MonthsEnded
|                                                            |  | 12/30/07          |      |   | 12/31/06         |   |      | 12/30/07 |  |   | 12/31/06
|Net sales                                                   |  | $                 | 13.2 |   |                  | $ | 10.7 |          |  | $ | 43.3     |   |  | $ | 44.7
|Cost of goods sold                                          |  |                   | 10.8 |   |                  |   | 8.2  |          |  |   | 33.2     |   |  |   | 33.9
|Selling and administrative expenses                         |  |                   | 1.6  |   |                  |   | 0.7  |          |  |   | 3.7      |   |  |   | 4.1 
|Interest (income) expense                                   |  |                   | (0.1 | ) |                  |   |     |          |  |   | (0.1     | ) |  |   | 0.5 
|                                                            |  |                   |      |   |                  |   |      |          |  |   |          |   |  |   |     
|Net income from discontinued operations before income taxes |  |                   | 0.9  |   |                  |   | 1.8  |          |  |   | 6.5      |   |  |   | 6.2 
|Income tax expense                                          |  |                   | 0.3  |   |                  |   | 3.0  |          |  |   | 2.3      |   |  |   | 3.8 
|                                                            |  |                   |      |   |                  |   |      |          |  |   |          |   |  |   |     
|Net income (loss) from discontinued operations              |  |                   | 0.6  |   |                  |   | (1.2 | )        |  |   | 4.2      |   |  |   | 2.4 
|Net gain on disposal                                        |  |                   | 3.7  |   |                  |   | 2.0  |          |  |   | 3.1      |   |  |   | 12.3
|                                                            |  |                   |      |   |                  |   |      |          |  |   |          |   |  |   |     
|Net income from discontinued operations                     |  | $                 | 4.3  |   |                  | $ | 0.8  |          |  | $ | 7.3      |   |  | $ | 14.7
|                                                            |  |                   |      |   |                  |   |      |          |  |   |          |   |  |   |     

Included in the Condensed Consolidated Balance Sheets are the following major classes of assets and liabilities
associated with the discontinued operations after adjustment for write-downs to fair value less cost to sell:



|                                       |  |          |      |         |   |     
|-------------------------------------- |  | -------- | ---- | ------- | - | ----
|                                       |  | 12/30/07 |      | 4/01/07
|Assets of discontinued operations      |  |          |      |         |   |     
|Current assets                         |  | $        | 40.6 |         | $ | 35.1
|Net property, plant and equipment      |  |          | 7.9  |         |   | 7.3 
|                                       |  |          |      |         |   |     
|                                       |  | $        | 48.5 |         | $ | 42.4
|                                       |  |          |      |         |   |     
|Liabilities of discontinued operations |  |          |      |         |   |     
|Current liabilities                    |  | $        | 25.3 |         | $ | 21.2
|Other liabilities                      |  |          | 4.3  |         |   | 4.7 
|                                       |  |          |      |         |   |     
|                                       |  | $        | 29.6 |         | $ | 25.9
|                                       |  |          |      |         |   |     



|(5) | Income Taxes
|--- | ------------

On April 2, 2007, PCC adopted the provisions of
Financial Accounting Standards Board (FASB) Interpretation No. 48, Accounting for Uncertainty in Income Taxes  an interpretation of FASB Statement No. 109 (FIN 48). FIN 48 establishes a single
model to address accounting for uncertainty in income tax positions. It prescribes a minimum recognition threshold that an income tax position is required to meet before being recognized in the financial statements. To recognize the financial
statement benefits of a particular income tax filing position, it must be determined that it is more likely than not that based on the technical merits of the filing position, the filing position would be sustained upon examination. FIN 48 also
provides guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure, and transition of uncertain tax positions.

As a result of adopting FIN 48, PCC had a decrease in retained earnings of $0.5 million. After considering the impact of FIN 48, the Companys liability for unrecognized tax benefits on April 2, 2007 was
$40.6 million. Of the total amount of liabilities for unrecognized tax benefits, $14.8 million would affect the tax rate if recognized.



9



---

The reserve for unrecognized tax benefits as of April 2, 2007 included an accrual for interest and penalties of $6.2
million. The Companys policy is to recognize interest and penalties accrued on uncertain tax positions as part of the provision for income taxes.

As
of adoption, the Company reasonably anticipated $14.0 million of the unrecognized tax benefits would be resolved within one year. These primarily relate to settlement of an audit with the state of Oregon covering fiscal years 1995 through 2005,
resolution of certain nexus issues through voluntary disclosure with various states, and settlement of other state audit issues.

The Company and its
subsidiaries file income tax returns with the Internal Revenue Service (IRS), as well as various state, local, and foreign jurisdictions. As of adoption, the IRS has completed examination of tax years through April 3, 2005. For
other significant jurisdictions, the statutes are closed for all tax years through March 31, 2002.

During the quarter ended December 30, 2007,
the Company had a net decrease in the liability for unrecognized tax benefits of $3.0 million, primarily related the settlement of foreign country and domestic state audits. The amount anticipated to be resolved within the next 12 months is $3.5
million. These are primarily issues that PCC is in the process of negotiating resolution with various taxing jurisdictions.



|(6) | Inventories
|--- | -----------

Inventories consisted of the following:



|                           |  |          |         |   |         |   |       |  
|-------------------------- |  | -------- | ------- | - | ------- | - | ----- | -
|                           |  | 12/30/07 |         |   | 4/01/07 |  
|Finished goods             |  | $        | 222.9   |   |         | $ | 178.0 |  
|Work-in-process            |  |          | 502.0   |   |         |   | 508.2 |  
|Raw materials and supplies |  |          | 292.6   |   |         |   | 252.8 |  
|                           |  |          |         |   |         |   |       |  
|                           |  |          | 1,017.5 |   |         |   | 939.0 |  
|LIFO provision             |  |          | (60.8   | ) |         |   | (66.4 | )
|                           |  |          |         |   |         |   |       |  
|Total inventory            |  | $        | 956.7   |   |         | $ | 872.6 |  
|                           |  |          |         |   |         |   |       |  



|(7) | Goodwill and Acquired Intangibles
|--- | ---------------------------------

The Company performs its annual
goodwill assessment test during the second quarter of each fiscal year. For fiscal 2008, it was determined that the fair value of the related operations was greater than book value and that there was no impairment of goodwill. There were no
triggering events during the current quarter requiring a goodwill impairment test in accordance with SFAS No. 142, Goodwill and Other Intangible Assets.

The changes in the carrying amount of goodwill by reportable segment for the nine months ended December 30, 2007, were as follows:



|                         |  |                   |         |          |   |                              |  |   |                    |   |  |   |        
|------------------------ |  | ----------------- | ------- | -------- | - | ---------------------------- |  | - | ------------------ | - |  | - | -------
|                         |  | Balance at4/01/07 |         | Acquired |   | CurrencyTranslationand Other |  |   | Balance at12/30/07
|Investment Cast Products |  | $                 | 347.3   |          | $ |                             |  | $ | 1.7                |   |  | $ | 349.0  
|Forged Products          |  |                   | 643.2   |          |   | 249.1                        |  |   | 10.6               |   |  |   | 902.9  
|Fastener Products        |  |                   | 1,098.3 |          |   |                             |  |   | (0.7               | ) |  |   | 1,097.6
|                         |  |                   |         |          |   |                              |  |   |                    |   |  |   |        
|Total                    |  | $                 | 2,088.8 |          | $ | 249.1                        |  | $ | 11.6               |   |  | $ | 2,349.5
|                         |  |                   |         |          |   |                              |  |   |                    |   |  |   |        



10



---

The gross carrying amount and accumulated amortization of the Companys acquired intangible assets were as follows:



|                              |  |                           |      |                           |   |        |  |              |      |  |   |    
|----------------------------- |  | ------------------------- | ---- | ------------------------- | - | ------ |  | ------------ | ---- |  | - | ---
|                              |  | 12/30/07                  |      | 4/01/07                  
|                              |  | Gross CarryingAccumulated |      | Gross CarryingAccumulated
|                              |  | Amount                    |      | Amortization              |   | Amount |  | Amortization
|Patents                       |  | $                         | 9.0  |                           | $ | 3.1    |  | $            | 9.0  |  | $ | 2.2
|Proprietary technology        |  |                           | 2.3  |                           |   | 0.6    |  |              | 2.3  |  |   | 0.5
|Tradenames                    |  |                           | 1.2  |                           |   | 0.4    |  |              | 1.2  |  |   | 0.3
|Long-term customer agreements |  |                           | 0.2  |                           |   | 0.2    |  |              | 0.2  |  |   | 0.2
|Backlog                       |  |                           | 1.5  |                           |   | 1.2    |  |              | 1.5  |  |   | 0.2
|                              |  |                           |      |                           |   |        |  |              |      |  |   |    
|                              |  | $                         | 14.2 |                           | $ | 5.5    |  | $            | 14.2 |  | $ | 3.4
|                              |  |                           |      |                           |   |        |  |              |      |  |   |    

Amortization expense for acquired intangible assets for the three and nine months ended December 30, 2007 was
$0.7 million and $2.1 million, respectively. Amortization expense for acquired intangible assets for the three and nine months ended December 31, 2006 was $0.3 million and $0.9 million, respectively. Amortization expense related to finite-lived
intangible assets is projected to total $2.8 million for fiscal 2008. Projected amortization expense for the succeeding five fiscal years is as follows:



|            |  |                              |    
|----------- |  | ---------------------------- | ---
|Fiscal Year |  | EstimatedAmortizationExpense
|2009        |  | $                            | 1.3
|2010        |  |                              | 1.2
|2011        |  |                              | 0.9
|2012        |  |                              | 0.8
|2013        |  |                              | 0.8



|(8) | Guarantees
|--- | ----------

In the ordinary course of business, the Company
generally warrants that its products will conform to its customers specifications over various time periods. The warranty accrual as of December 30, 2007 and April 1, 2007 is immaterial to the financial position of the Company, and
the change in the accrual for the current quarter is immaterial to the Companys results of operations and cash flows.

In conjunction with certain
transactions, primarily divestitures, the Company may provide routine indemnifications (e.g., retention of previously existing environmental and tax liabilities) with terms that range in duration and often are not explicitly defined. Where
appropriate, an obligation for such indemnifications is recorded as a liability. Because the obligated amounts of these types of indemnifications often are not explicitly stated, the overall maximum amount of the obligation under such
indemnifications cannot be reasonably estimated. Other than obligations recorded as liabilities at the time of divestiture, the Company has not historically made significant payments for these indemnifications.



11



---

|(9) | Earnings per share
|--- | ------------------

The weighted average number of shares
outstanding used to compute earnings per share were as follows (in millions):



|                                             |  |                    |  |                   |  |          |  |         
|-------------------------------------------- |  | ------------------ |  | ----------------- |  | -------- |  | --------
|                                             |  | Three Months Ended |  | Nine Months Ended
|                                             |  | 12/30/07           |  | 12/31/06          |  | 12/30/07 |  | 12/31/06
|Basic weighted average shares outstanding    |  | 138.3              |  | 136.1             |  | 137.9    |  | 135.6   
|Dilutive stock options                       |  | 2.1                |  | 2.0               |  | 2.2      |  | 2.0     
|                                             |  |                    |  |                   |  |          |  |         
|Average shares outstanding assuming dilution |  | 140.4              |  | 138.1             |  | 140.1    |  | 137.6   
|                                             |  |                    |  |                   |  |          |  |         

Basic earnings per share are calculated based on the weighted average number of shares outstanding. Diluted
earnings per share are computed based on that same number of shares plus additional dilutive shares representing stock distributable under stock option and employee stock purchase plans computed using the treasury stock method.

For the three and nine months ended December 30, 2007, stock options to purchase 0.6 million shares and 0.2 million shares of common stock, respectively,
were not dilutive. For the three and nine months ended December 31, 2006, stock options to purchase 0.9 million and 0.3 million shares of common stock, respectively, were not dilutive. These shares were excluded from the computation
of diluted earnings per share because to do so would have been antidilutive. These options could be dilutive in the future.



|(10) | Comprehensive Income
|---- | --------------------

Total comprehensive income consisted of the
following:



|                                                                                                                                  |  |                    |       |   |                   |   |       |          |  |   |          |   |  |   |      
|--------------------------------------------------------------------------------------------------------------------------------- |  | ------------------ | ----- | - | ----------------- | - | ----- | -------- |  | - | -------- | - |  | - | -----
|                                                                                                                                  |  | Three Months Ended |       |   | Nine Months Ended
|                                                                                                                                  |  | 12/30/07           |       |   | 12/31/06          |   |       | 12/30/07 |  |   | 12/31/06
|Net income                                                                                                                        |  | $                  | 246.5 |   |                   | $ | 158.7 |          |  | $ | 708.3    |   |  | $ | 428.6
|Other comprehensive (loss) income, net of tax:                                                                                    |  |                    |       |   |                   |   |       |          |  |   |          |   |  |   |      
|Unrealized translation adjustments                                                                                                |  |                    | (0.4  | ) |                   |   | 29.9  |          |  |   | 33.1     |   |  |   | 57.6 
|Unrealized (loss) gain on derivatives:                                                                                            |  |                    |       |   |                   |   |       |          |  |   |          |   |  |   |      
|Periodic revaluations (net of income tax of $0.7, $(2.2), $0.9 and $(2.3), respectively)                                          |  |                    | (2.0  | ) |                   |   | (5.1  | )        |  |   | (2.6     | ) |  |   | 1.4  
|Reclassification to net income of previously deferred gains and loss (net of income tax of $0.1, $0.2, $0.2 and $0,
respectively) |  |                    |      |   |                   |   | 0.8   |          |  |   | 0.5      |   |  |   | 0.9  
|                                                                                                                                  |  |                    |       |   |                   |   |       |          |  |   |          |   |  |   |      
|Other comprehensive (loss) income                                                                                                 |  |                    | (2.4  | ) |                   |   | 25.6  |          |  |   | 31.0     |   |  |   | 59.9 
|                                                                                                                                  |  |                    |       |   |                   |   |       |          |  |   |          |   |  |   |      
|Total comprehensive income                                                                                                        |  | $                  | 244.1 |   |                   | $ | 184.3 |          |  | $ | 739.3    |   |  | $ | 488.5
|                                                                                                                                  |  |                    |       |   |                   |   |       |          |  |   |          |   |  |   |      

Accumulated other comprehensive loss consisted of the following:



|                                                         |  |          |        |   |         |   |        |  
|-------------------------------------------------------- |  | -------- | ------ | - | ------- | - | ------ | -
|                                                         |  | 12/30/07 |        |   | 4/01/07 |  
|Cumulative unrealized foreign currency translation gains |  | $        | 140.1  |   |         | $ | 107.0  |  
|Pension and postretirement obligations                   |  |          | (190.1 | ) |         |   | (190.1 | )
|Unrealized (loss) gain on derivatives                    |  |          | (1.7   | ) |         |   | 0.4    |  
|                                                         |  |          |        |   |         |   |        |  
|Accumulated other comprehensive loss                     |  | $        | (51.7  | ) |         | $ | (82.7  | )
|                                                         |  |          |        |   |         |   |        |  



12



---

|(11) | Financing Arrangements
|---- | ----------------------

In the first quarter of fiscal 2008, the
Company amended its $1.0 billion bank revolving credit facility. The amendment, among other things, reduced the facility fee and borrowing spread under the Credit Agreement, extended the maturity date of the Credit Agreement to May 2012, with an
option, exercisable by the Company, to request up to two one-year extensions in the maturity date, subject to the approval of each lender, and permits the Company to request increases in the aggregate principal amount available under the Credit
Agreement to a maximum of $1.5 billion, subject to the agreement of each lender to increase their respective commitment.

In the third quarter of fiscal
2008, PCC repaid its $150.0 million 6.75% Senior Notes, which matured December 17, 2007.

During the third quarter of fiscal 2007, PCC initiated its
Commercial Paper (CP) program in which the Company may issue CP in an amount not to exceed the amount available to be drawn under its Credit Agreement. Outstanding balances under the CP program totaled $166.6 million and $382.9 million
as of December 30, 2007 and April 1, 2007, respectively. The CP balance is classified as long-term debt as of December 30, 2007 as the Company has the intent and ability to refinance the obligation on a long-term basis through its
existing Credit Agreement.

Also available to the Company is a 364-day Credit and Security Agreement (Receivable Facility), under which
allowable borrowings are based on the level of eligible trade accounts receivable, which cannot exceed $150.0 million. Included in short-term borrowings were outstanding amounts under this Receivable Facility totaling $150.0 million as of
December 30, 2007. There was no amount outstanding under this facility as of April 1, 2007.



|(12) | Pensions and Other Postretirement Benefit Plans
|---- | -----------------------------------------------

The Company and
its subsidiaries sponsor many domestic and foreign defined benefit pension plans. In addition, the Company offers postretirement medical benefits for certain eligible employees. These plans are more fully described in the Notes to the
Consolidated Financial Statements included in the Companys Annual Report on Form 10-K for the year ended April 1, 2007.

The net periodic
benefit cost for the Companys pension plans consisted of the following components:



|                                   |  |                    |       |   |                   |   |       |          |  |   |          |   |  |   |       |  
|---------------------------------- |  | ------------------ | ----- | - | ----------------- | - | ----- | -------- |  | - | -------- | - |  | - | ----- | -
|                                   |  | Three Months Ended |       |   | Nine Months Ended |  
|                                   |  | 12/31/06           |       |   | 12/30/07          |   |       | 12/31/06 |  |   | 12/30/07 |  
|Service cost                       |  | $                  | 9.1   |   |                   | $ | 8.7   |          |  | $ | 27.7     |   |  | $ | 26.6  |  
|Interest cost                      |  |                    | 19.7  |   |                   |   | 17.2  |          |  |   | 60.1     |   |  |   | 52.4  |  
|Expected return on plan assets     |  |                    | (25.2 | ) |                   |   | (20.9 | )        |  |   | (76.6    | ) |  |   | (63.7 | )
|Recognized net actuarial loss      |  |                    | 3.0   |   |                   |   | 4.3   |          |  |   | 9.1      |   |  |   | 13.1  |  
|Amortization of prior service cost |  |                    | 0.8   |   |                   |   | 0.6   |          |  |   | 2.4      |   |  |   | 1.8   |  
|                                   |  |                    |       |   |                   |   |       |          |  |   |          |   |  |   |       |  
|Net periodic benefit cost          |  | $                  | 7.4   |   |                   | $ | 9.9   |          |  | $ | 22.7     |   |  | $ | 30.2  |  
|                                   |  |                    |       |   |                   |   |       |          |  |   |          |   |  |   |       |  

The net periodic benefit cost of postretirement benefits other than pensions consisted of the following
components:



|                                   |  |                    |      |   |                   |   |      |          |  |   |          |   |  |   |      |  
|---------------------------------- |  | ------------------ | ---- | - | ----------------- | - | ---- | -------- |  | - | -------- | - |  | - | ---- | -
|                                   |  | Three Months Ended |      |   | Nine Months Ended |  
|                                   |  | 12/31/06           |      |   | 12/30/07          |   |      | 12/31/06 |  |   | 12/30/07 |  
|Service cost                       |  | $                  | 0.4  |   |                   | $ | 0.3  |          |  | $ | 1.2      |   |  | $ | 0.8  |  
|Interest cost                      |  |                    | 2.0  |   |                   |   | 1.6  |          |  |   | 5.8      |   |  |   | 4.7  |  
|Recognized net actuarial loss      |  |                    |     |   |                   |   | 0.3  |          |  |   |         |   |  |   | 0.9  |  
|Amortization of prior service cost |  |                    | (0.1 | ) |                   |   | (0.1 | )        |  |   | (0.3     | ) |  |   | (0.3 | )
|                                   |  |                    |      |   |                   |   |      |          |  |   |          |   |  |   |      |  
|Net periodic benefit cost          |  | $                  | 2.3  |   |                   | $ | 2.1  |          |  | $ | 6.7      |   |  | $ | 6.1  |  
|                                   |  |                    |      |   |                   |   |      |          |  |   |          |   |  |   |      |  



13



---

The Company made contributions to the defined benefit pension plans of $4.2 million and $70.8 million for the three and
nine months ended December 30, 2007, respectively. Projected contributions are expected to total approximately $75.0 million for fiscal year 2008, of which $58.0 million will be voluntary.



|(13) | Commitments and contingencies
|---- | -----------------------------

Various lawsuits arising during the
normal course of business are pending against PCC. In the opinion of management, the outcome of these lawsuits, either individually or in the aggregate, will not have a material adverse effect on PCCs consolidated financial position, results
of operations, cash flows or business.



|(14) | New Accounting Pronouncements
|---- | -----------------------------

On December 4, 2007, the FASB
issued SFAS No. 141(Revised), Business Combinations (SFAS No. 141(R)), and SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51 (SFAS
No. 160). These new standards are the U.S. GAAP outcome of a joint project with the International Accounting Standards Board (IASB). SFAS No. 141(R) and SFAS No. 160 introduce significant changes in the accounting
for and reporting of business acquisitions and noncontrolling interests in a subsidiary. SFAS No. 141(R) and SFAS No. 160 continue the movement toward the greater use of fair values in financial reporting and increased transparency through
expanded disclosures. SFAS No. 141(R) changes how business acquisitions are accounted for and will impact financial statements at the acquisition date and in subsequent periods. SFAS No. 160 requires noncontrolling interests (previously
referred to as minority interests) to be reported as a component of equity, which changes the accounting for transactions with noncontrolling interest holders. SFAS No. 141(R) and SFAS No. 160 are effective for the Companys fiscal
2010. The Company is currently evaluating the impact of the adoption of SFAS No. 141(R) and SFAS No. 160 on its consolidated financial position, results of operations and cash flows.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (SFAS No. 157). SFAS No. 157 defines fair value,
establishes a framework for measuring fair value in accordance with generally accepted accounting principles, and also expands disclosures about fair value measurements. SFAS No. 157 is effective for the Companys fiscal 2009. The Company
is currently evaluating the impact of the adoption of SFAS No. 157 on its consolidated financial position, results of operations and cash flows.

In
February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities (SFAS No. 159). SFAS No. 159 permits entities to choose to measure many financial assets and
financial liabilities at fair value. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings. SFAS No. 159 is effective for the Companys fiscal 2009. The Company is currently
evaluating the impact of the adoption of SFAS No. 159 on its consolidated financial position, results of operations and cash flows.



14



---

|(15) | Segment Information
|---- | -------------------

Information regarding segments is presented in
accordance with SFAS No. 131, Disclosure about Segments of an Enterprise and Related Information. Based on the criteria outlined in SFAS No. 131, the Companys operations are classified into three reportable business
segments: Investment Cast Products, Forged Products and Fastener Products. Effective in the fourth quarter of fiscal 2007, the former Industrial Products segment was integrated into the Fastener Products segment. Effective in the third quarter of
fiscal 2008, PCCs Greenville Metals, a metal processing operation, was moved from the Investment Cast Products segment to the Forged Products segment. The transfer was a management decision in order to take advantage of synergies with
Caledonian Alloys. All prior periods have been reclassified to reflect the changes in reportable segments.



|                                                              |  |                    |         |   |          |   |         |  
|------------------------------------------------------------- |  | ------------------ | ------- | - | -------- | - | ------- | -
|                                                              |  | Three Months Ended |        
|                                                              |  | 12/30/07           |         |   | 12/31/06 |  
|Net sales:                                                    |  |                    |         |   |          |   |         |  
|Investment Cast Products                                      |  | $                  | 540.9   |   |          | $ | 436.2   |  
|Forged Products                                               |  |                    | 771.8   |   |          |   | 636.6   |  
|Fastener Products                                             |  |                    | 383.9   |   |          |   | 309.8   |  
|                                                              |  |                    |         |   |          |   |         |  
|Consolidated net sales                                        |  | $                  | 1,696.6 |   |          | $ | 1,382.6 |  
|                                                              |  |                    |         |   |          |   |         |  
|Segment operating income (loss):                              |  |                    |         |   |          |   |         |  
|Investment Cast Products                                      |  | $                  | 131.6   |   |          | $ | 96.2    |  
|Forged Products                                               |  |                    | 169.2   |   |          |   | 110.4   |  
|Fastener Products                                             |  |                    | 98.2    |   |          |   | 65.7    |  
|Corporate expense                                             |  |                    | (25.5   | ) |          |   | (26.1   | )
|                                                              |  |                    |         |   |          |   |         |  
|Total segment operating income                                |  |                    | 373.5   |   |          |   | 246.2   |  
|Interest expense, net                                         |  |                    | 10.1    |   |          |   | 12.3    |  
|                                                              |  |                    |         |   |          |   |         |  
|Consolidated income before income taxes and minority interest |  | $                  | 363.4   |   |          | $ | 233.9   |  
|                                                              |  |                    |         |   |          |   |         |  



|                                                              |  |                   |         |   |          |   |         |  
|------------------------------------------------------------- |  | ----------------- | ------- | - | -------- | - | ------- | -
|                                                              |  | Nine Months Ended |        
|                                                              |  | 12/30/07          |         |   | 12/31/06 |  
|Net sales:                                                    |  |                   |         |   |          |   |         |  
|Investment Cast Products                                      |  | $                 | 1,581.4 |   |          | $ | 1,286.2 |  
|Forged Products                                               |  |                   | 2,358.5 |   |          |   | 1,611.6 |  
|Fastener Products                                             |  |                   | 1,138.8 |   |          |   | 912.4   |  
|                                                              |  |                   |         |   |          |   |         |  
|Consolidated net sales                                        |  | $                 | 5,078.7 |   |          | $ | 3,810.2 |  
|                                                              |  |                   |         |   |          |   |         |  
|Segment operating income (loss):                              |  |                   |         |   |          |   |         |  
|Investment Cast Products                                      |  | $                 | 376.8   |   |          | $ | 281.4   |  
|Forged Products                                               |  |                   | 514.7   |   |          |   | 259.9   |  
|Fastener Products                                             |  |                   | 277.2   |   |          |   | 186.7   |  
|Corporate expense                                             |  |                   | (74.3   | ) |          |   | (62.3   | )
|                                                              |  |                   |         |   |          |   |         |  
|Total segment operating income                                |  |                   | 1,094.4 |   |          |   | 665.7   |  
|Interest expense, net                                         |  |                   | 36.3    |   |          |   | 40.6    |  
|                                                              |  |                   |         |   |          |   |         |  
|Consolidated income before income taxes and minority interest |  | $                 | 1,058.1 |   |          | $ | 625.1   |  
|                                                              |  |                   |         |   |          |   |         |  



15



---

|(16) | Subsequent Event
|---- | ----------------

On January 3, 2008, PCC completed the sale
of SMA for $29.4 million in cash. The SMA business was acquired with SMC in the first quarter of fiscal 2007, and was reclassified from the Forged Products segment to discontinued operations during the third quarter of fiscal 2008. PCC is in the
process of calculating the gain on the sale, which will be recognized in the fourth quarter of fiscal 2008.

On January 4, 2008, PCC completed the
sale of Rescal, a small foreign business held-for-sale from the acquisition of SMC. PCC does not anticipate any significant gain or loss on this sale.



|(17) | Condensed Consolidating Financial Information
|---- | ---------------------------------------------

Certain of the
Companys subsidiaries guarantee the Companys registered securities consisting of $200 million and 5.6% Senior Notes due 2013, as well as the Companys private notes, bank credit facilities and CP. The following condensed
consolidating financial information presents, in separate columns, financial information for (i) Precision Castparts Corp. (on a parent only basis) with its investment in its subsidiaries recorded under the equity method, (ii) guarantor
subsidiaries that guarantee the Companys public and private notes, bank credit facilities and CP on a combined basis, with any investments in non-guarantor subsidiaries recorded under the equity method, (iii) direct and indirect
non-guarantor subsidiaries on a combined basis, (iv) the eliminations necessary to arrive at the information for the Company and its subsidiaries on a consolidated basis, and (v) the Company on a consolidated basis, in each case for
balance sheets as of December 30, 2007 and April 1, 2007, statements of operations for the three and nine months ended December 30, 2007 and December 31, 2006, and statement of cash flows for the nine months ended
December 30, 2007 and December 31, 2006. The public and private notes, bank facility and CP are fully and unconditionally guaranteed on a joint and several basis by each guarantor subsidiary. The guarantor subsidiaries include the
Companys domestic subsidiaries within the Investment Cast Products, Forged Products and Fastener Products segments that are 100% owned, directly or indirectly, by the Company within the meaning of Rule 3-10(h)(1) of Regulation S-X. There are
no contractual restrictions limiting transfers of cash from guarantor and non-guarantor subsidiaries to the Company. The condensed consolidating financial information is presented herein, rather than separate financial statements for each of the
guarantor subsidiaries, because guarantors are wholly-owned and the guarantees are full and unconditional, joint and several.

The condensed consolidating
statements of cash flows for the nine months ended December 31, 2006 have been restated to correct the presentation of transactions that are settled, on a net basis, through the Companys intercompany payables and receivables.

The Company had previously presented intercompany payables and receivables transactions between Precision Castparts Corp. (parent) and its guarantor and non-guarantor
subsidiaries as operating activities. These transactions should have been presented in investing and financing activities. As any changes in the classification between operating, investing and financing are eliminated in consolidation, there is no
impact on the consolidated statement of cash flows for the nine months ended December 31, 2006.



16



---

Condensed Consolidating Statements of Operations

Three Months Ended December 30, 2007

(Unaudited)



|                                                      |  |                         |        |   |                       |   |         |                           |  |   |              |   |  |       |        |     |  |         |  
|----------------------------------------------------- |  | ----------------------- | ------ | - | --------------------- | - | ------- | ------------------------- |  | - | ------------ | - |  | ----- | ------ | --- |  | ------- | -
|                                                      |  | PrecisionCastpartsCorp. |        |   | GuarantorSubsidiaries |   |         | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | Total |       
|Net sales                                             |  | $                       |       |   |                       | $ | 1,362.3 |                           |  | $ | 410.0        |   |  | $     | (75.7  | ) $ |  | 1,696.6 |  
|Cost of goods sold                                    |  |                         | 1.4    |   |                       |   | 984.7   |                           |  |   | 321.9        |   |  |       | (75.7  | )   |  | 1,232.3 |  
|Selling and administrative expenses                   |  |                         | 22.4   |   |                       |   | 48.1    |                           |  |   | 20.3         |   |  |       |       |     |  | 90.8    |  
|Other (income) expense                                |  |                         | (0.4   | ) |                       |   | (1.7    | )                         |  |   | 2.1          |   |  |       |       |     |  |        |  
|Interest (income) expense, net                        |  |                         | (12.3  | ) |                       |   | 31.7    |                           |  |   | (9.3         | ) |  |       |       |     |  | 10.1    |  
|Equity in earnings of subsidiaries                    |  |                         | (248.0 | ) |                       |   | (12.1   | )                         |  |   |             |   |  |       | 260.1  |     |  |        |  
|                                                      |  |                         |        |   |                       |   |         |                           |  |   |              |   |  |       |        |     |  |         |  
|Income (loss) before income tax and minority interest |  |                         | 236.9  |   |                       |   | 311.6   |                           |  |   | 75.0         |   |  |       | (260.1 | )   |  | 363.4   |  
|Income tax expense (benefit)                          |  |                         | (9.6   | ) |                       |   | 108.7   |                           |  |   | 21.8         |   |  |       |       |     |  | 120.9   |  
|Minority interest                                     |  |                         |       |   |                       |   | 0.3     |                           |  |   | (0.6         | ) |  |       |       |     |  | (0.3    | )
|                                                      |  |                         |        |   |                       |   |         |                           |  |   |              |   |  |       |        |     |  |         |  
|Net income (loss) from continuing operations          |  |                         | 246.5  |   |                       |   | 203.2   |                           |  |   | 52.6         |   |  |       | (260.1 | )   |  | 242.2   |  
|Net income from discontinued operations               |  |                         |       |   |                       |   | 1.7     |                           |  |   | 2.6          |   |  |       |       |     |  | 4.3     |  
|                                                      |  |                         |        |   |                       |   |         |                           |  |   |              |   |  |       |        |     |  |         |  
|Net income (loss)                                     |  | $                       | 246.5  |   |                       | $ | 204.9   |                           |  | $ | 55.2         |   |  | $     | (260.1 | ) $ |  | 246.5   |  
|                                                      |  |                         |        |   |                       |   |         |                           |  |   |              |   |  |       |        |     |  |         |  



17



---

Condensed Consolidating Statements of Income

Three Months Ended December 31, 2006

(Unaudited)



|                                                      |  |                         |       |   |                       |   |                           |  |   |              |   |  |       |        |     |  |         |  
|----------------------------------------------------- |  | ----------------------- | ----- | - | --------------------- | - | ------------------------- |  | - | ------------ | - |  | ----- | ------ | --- |  | ------- | -
|                                                      |  | PrecisionCastpartsCorp. |       |   | GuarantorSubsidiaries |   | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | Total |       
|Net sales                                             |  | $                       |      |   |                       | $ | 1,143.2                   |  | $ | 289.8        |   |  | $     | (50.4  | ) $ |  | 1,382.6 |  
|Cost of goods sold                                    |  |                         | 2.0   |   |                       |   | 876.0                     |  |   | 221.9        |   |  |       | (50.4  | )   |  | 1,049.5 |  
|Selling and administrative expenses                   |  |                         | 24.1  |   |                       |   | 44.5                      |  |   | 18.3         |   |  |       |       |     |  | 86.9    |  
|Other expense (income)                                |  |                         | (0.4  | ) |                       |   |                          |  |   | 0.4          |   |  |       |       |     |  |        |  
|Interest (income) expense, net                        |  |                         | (8.7  | ) |                       |   | 27.3                      |  |   | (6.3         | ) |  |       |       |     |  | 12.3    |  
|Equity in earnings of subsidiaries                    |  |                         | 160.9 |   |                       |   | 6.9                       |  |   |             |   |  |       | (167.8 | )   |  |        |  
|                                                      |  |                         |       |   |                       |   |                           |  |   |              |   |  |       |        |     |  |         |  
|Income (loss) before income tax and minority interest |  |                         | 143.9 |   |                       |   | 202.3                     |  |   | 55.5         |   |  |       | (167.8 | )   |  | 233.9   |  
|Income tax (benefit) expense                          |  |                         | (14.8 | ) |                       |   | 76.7                      |  |   | 13.7         |   |  |       |       |     |  | 75.6    |  
|Minority interest                                     |  |                         |      |   |                       |   |                          |  |   | (0.4         | ) |  |       |       |     |  | (0.4    | )
|                                                      |  |                         |       |   |                       |   |                           |  |   |              |   |  |       |        |     |  |         |  
|Net income (loss) from continuing operations          |  |                         | 158.7 |   |                       |   | 125.6                     |  |   | 41.4         |   |  |       | (167.8 | )   |  | 157.9   |  
|Net income from discontinued operations               |  |                         |      |   |                       |   | 0.6                       |  |   | 0.2          |   |  |       |       |     |  | 0.8     |  
|                                                      |  |                         |       |   |                       |   |                           |  |   |              |   |  |       |        |     |  |         |  
|Net income (loss)                                     |  | $                       | 158.7 |   |                       | $ | 126.2                     |  | $ | 41.6         |   |  | $     | (167.8 | ) $ |  | 158.7   |  
|                                                      |  |                         |       |   |                       |   |                           |  |   |              |   |  |       |        |     |  |         |  



18



---

Condensed Consolidating Statements of Operations

Nine Months Ended December 30, 2007

(Unaudited)



|                                                      |  |                         |       |   |                       |   |         |                           |  |   |              |   |  |       |        |     |  |         |  
|----------------------------------------------------- |  | ----------------------- | ----- | - | --------------------- | - | ------- | ------------------------- |  | - | ------------ | - |  | ----- | ------ | --- |  | ------- | -
|                                                      |  | PrecisionCastpartsCorp. |       |   | GuarantorSubsidiaries |   |         | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | Total |       
|Net sales                                             |  | $                       |      |   |                       | $ | 4,096.8 |                           |  | $ | 1,189.5      |   |  | $     | (207.6 | ) $ |  | 5,078.7 |  
|Cost of goods sold                                    |  |                         | 8.0   |   |                       |   | 2,980.4 |                           |  |   | 924.1        |   |  |       | (207.6 | )   |  | 3,704.9 |  
|Selling and administrative expenses                   |  |                         | 66.2  |   |                       |   | 155.9   |                           |  |   | 57.3         |   |  |       |       |     |  | 279.4   |  
|Other (income) expense                                |  |                         | (1.3  | ) |                       |   | (1.7    | )                         |  |   | 3.0          |   |  |       |       |     |  |        |  
|Interest (income) expense, net                        |  |                         | (29.7 | ) |                       |   | 89.5    |                           |  |   | (23.5        | ) |  |       |       |     |  | 36.3    |  
|Equity in earnings of subsidiaries                    |  |                         | 729.4 |   |                       |   | 36.2    |                           |  |   |             |   |  |       | (765.6 | )   |  |        |  
|                                                      |  |                         |       |   |                       |   |         |                           |  |   |              |   |  |       |        |     |  |         |  
|Income (loss) before income tax and minority interest |  |                         | 686.2 |   |                       |   | 908.9   |                           |  |   | 228.6        |   |  |       | (765.6 | )   |  | 1,058.1 |  
|Income tax (benefit) expense                          |  |                         | (22.1 | ) |                       |   | 312.9   |                           |  |   | 65.4         |   |  |       |       |     |  | 356.2   |  
|Minority interest                                     |  |                         |      |   |                       |   | 2.6     |                           |  |   | (3.5         | ) |  |       |       |     |  | (0.9    | )
|                                                      |  |                         |       |   |                       |   |         |                           |  |   |              |   |  |       |        |     |  |         |  
|Net income (loss) from continuing operations          |  |                         | 708.3 |   |                       |   | 598.6   |                           |  |   | 159.7        |   |  |       | (765.6 | )   |  | 701.0   |  
|Net income from discontinued operations               |  |                         |      |   |                       |   | 5.0     |                           |  |   | 2.3          |   |  |       |       |     |  | 7.3     |  
|                                                      |  |                         |       |   |                       |   |         |                           |  |   |              |   |  |       |        |     |  |         |  
|Net income (loss)                                     |  | $                       | 708.3 |   |                       | $ | 603.6   |                           |  | $ | 162.0        |   |  | $     | (765.6 | ) $ |  | 708.3   |  
|                                                      |  |                         |       |   |                       |   |         |                           |  |   |              |   |  |       |        |     |  |         |  



19



---

Condensed Consolidating Statements of Income

Nine Months Ended December 31, 2006

(Unaudited)



|                                                      |  |                         |       |   |                       |   |         |                           |  |   |              |   |  |       |        |     |  |         |  
|----------------------------------------------------- |  | ----------------------- | ----- | - | --------------------- | - | ------- | ------------------------- |  | - | ------------ | - |  | ----- | ------ | --- |  | ------- | -
|                                                      |  | PrecisionCastpartsCorp. |       |   | GuarantorSubsidiaries |   |         | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | Total |       
|Net sales                                             |  | $                       |      |   |                       | $ | 3,089.5 |                           |  | $ | 831.0        |   |  | $     | (110.3 | ) $ |  | 3,810.2 |  
|Cost of goods sold                                    |  |                         | 5.6   |   |                       |   | 2,355.1 |                           |  |   | 646.6        |   |  |       | (110.3 | )   |  | 2,897.0 |  
|Selling and administrative expenses                   |  |                         | 56.5  |   |                       |   | 138.0   |                           |  |   | 53.0         |   |  |       |       |     |  | 247.5   |  
|Other expense (income)                                |  |                         | (1.4  | ) |                       |   |        |                           |  |   | 1.4          |   |  |       |       |     |  |        |  
|Interest (income) expense, net                        |  |                         | (18.6 | ) |                       |   | 74.0    |                           |  |   | (14.8        | ) |  |       |       |     |  | 40.6    |  
|Equity in earnings of subsidiaries                    |  |                         | 443.7 |   |                       |   | 16.0    |                           |  |   |             |   |  |       | (459.7 | )   |  |        |  
|                                                      |  |                         |       |   |                       |   |         |                           |  |   |              |   |  |       |        |     |  |         |  
|Income (loss) before income tax and minority interest |  |                         | 401.6 |   |                       |   | 538.4   |                           |  |   | 144.8        |   |  |       | (459.7 | )   |  | 625.1   |  
|Income tax (benefit) expense                          |  |                         | (27.0 | ) |                       |   | 198.6   |                           |  |   | 38.4         |   |  |       |       |     |  | 210.0   |  
|Minority interest                                     |  |                         |      |   |                       |   |        |                           |  |   | (1.2         | ) |  |       |       |     |  | (1.2    | )
|                                                      |  |                         |       |   |                       |   |         |                           |  |   |              |   |  |       |        |     |  |         |  
|Net income (loss) from continuing operations          |  |                         | 428.6 |   |                       |   | 339.8   |                           |  |   | 105.2        |   |  |       | (459.7 | )   |  | 413.9   |  
|Net (loss) income from discontinued operations        |  |                         |      |   |                       |   | (2.7    | )                         |  |   | 17.4         |   |  |       |       |     |  | 14.7    |  
|                                                      |  |                         |       |   |                       |   |         |                           |  |   |              |   |  |       |        |     |  |         |  
|Net income (loss)                                     |  | $                       | 428.6 |   |                       | $ | 337.1   |                           |  | $ | 122.6        |   |  | $     | (459.7 | ) $ |  | 428.6   |  
|                                                      |  |                         |       |   |                       |   |         |                           |  |   |              |   |  |       |        |     |  |         |  



20



---

Condensed Consolidating Balance Sheets

December 30, 2007

(Unaudited)



|                                                     |  |                         |         |   |                       |   |         |                           |  |   |              |   |  |       |          |   |  |   |         |  
|---------------------------------------------------- |  | ----------------------- | ------- | - | --------------------- | - | ------- | ------------------------- |  | - | ------------ | - |  | ----- | -------- | - |  | - | ------- | -
|                                                     |  | PrecisionCastpartsCorp. |         |   | GuarantorSubsidiaries |   |         | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | Total |         
|Assets                                               |  |                         |         |   |                       |   |         |                           |  |   |              |   |  |       |          |   |  |   |         |  
|Current assets:                                      |  |                         |         |   |                       |   |         |                           |  |   |              |   |  |       |          |   |  |   |         |  
|Cash and cash equivalents                            |  | $                       | 6.6     |   |                       | $ |        |                           |  | $ | 169.9        |   |  | $     |         |   |  | $ | 176.5   |  
|Receivables                                          |  |                         | 35.9    |   |                       |   | 1,171.2 |                           |  |   | 709.0        |   |  |       | (954.6   | ) |  |   | 961.5   |  
|Inventories                                          |  |                         |        |   |                       |   | 696.2   |                           |  |   | 260.5        |   |  |       |         |   |  |   | 956.7   |  
|Prepaid expenses                                     |  |                         | 1.5     |   |                       |   | 12.6    |                           |  |   | 11.3         |   |  |       |         |   |  |   | 25.4    |  
|Income tax receivable                                |  |                         |        |   |                       |   |        |                           |  |   |             |   |  |       |         |   |  |   |        |  
|Deferred income taxes                                |  |                         | 21.2    |   |                       |   | 47.9    |                           |  |   | 24.8         |   |  |       |         |   |  |   | 93.9    |  
|Discontinued operations                              |  |                         |        |   |                       |   | 11.7    |                           |  |   | 86.3         |   |  |       | (57.4    | ) |  |   | 40.6    |  
|                                                     |  |                         |         |   |                       |   |         |                           |  |   |              |   |  |       |          |   |  |   |         |  
|Total current assets                                 |  |                         | 65.2    |   |                       |   | 1,939.6 |                           |  |   | 1,261.8      |   |  |       | (1,012.0 | ) |  |   | 2,254.6 |  
|                                                     |  |                         |         |   |                       |   |         |                           |  |   |              |   |  |       |          |   |  |   |         |  
|Property, plant and equipment, net                   |  |                         | 42.7    |   |                       |   | 758.6   |                           |  |   | 292.6        |   |  |       |         |   |  |   | 1,093.9 |  
|Goodwill, net                                        |  |                         |        |   |                       |   | 1,738.7 |                           |  |   | 610.8        |   |  |       |         |   |  |   | 2,349.5 |  
|Deferred income taxes                                |  |                         | 45.0    |   |                       |   |        |                           |  |   | 10.7         |   |  |       | (55.7    | ) |  |   |        |  
|Investments in subsidiaries                          |  |                         | 5,016.1 |   |                       |   | 423.4   |                           |  |   | (12.8        | ) |  |       | (5,426.7 | ) |  |   |        |  
|Other assets                                         |  |                         | 94.7    |   |                       |   | 16.1    |                           |  |   | 25.5         |   |  |       |         |   |  |   | 136.3   |  
|Discontinued operations                              |  |                         |        |   |                       |   |        |                           |  |   | 7.9          |   |  |       |         |   |  |   | 7.9     |  
|                                                     |  |                         |         |   |                       |   |         |                           |  |   |              |   |  |       |          |   |  |   |         |  
|                                                     |  | $                       | 5,263.7 |   |                       | $ | 4,876.4 |                           |  | $ | 2,196.5      |   |  | $     | (6,494.4 | ) |  | $ | 5,842.2 |  
|                                                     |  |                         |         |   |                       |   |         |                           |  |   |              |   |  |       |          |   |  |   |         |  
|Liabilities and Shareholders Investment              |  |                         |         |   |                       |   |         |                           |  |   |              |   |  |       |          |   |  |   |         |  
|Current liabilities:                                 |  |                         |         |   |                       |   |         |                           |  |   |              |   |  |       |          |   |  |   |         |  
|Short-term borrowings                                |  | $                       |        |   |                       | $ |        |                           |  | $ | 150.1        |   |  | $     |         |   |  | $ | 150.1   |  
|Long-term debt currently due                         |  |                         | 19.2    |   |                       |   | 1.1     |                           |  |   | 0.2          |   |  |       |         |   |  |   | 20.5    |  
|Accounts payable                                     |  |                         | 923.6   |   |                       |   | 402.1   |                           |  |   | 252.4        |   |  |       | (1,011.9 | ) |  |   | 566.2   |  
|Accrued liabilities                                  |  |                         | 21.6    |   |                       |   | 293.0   |                           |  |   | 106.5        |   |  |       | (1.1     | ) |  |   | 420.0   |  
|Income taxes payable                                 |  |                         | 18.5    |   |                       |   | 3.6     |                           |  |   | 36.3         |   |  |       |         |   |  |   | 58.4    |  
|Deferred income taxes                                |  |                         |        |   |                       |   |        |                           |  |   |             |   |  |       |         |   |  |   |        |  
|Discontinued operations                              |  |                         | 0.1     |   |                       |   |        |                           |  |   | 25.3         |   |  |       | (0.1     | ) |  |   | 25.3    |  
|                                                     |  |                         |         |   |                       |   |         |                           |  |   |              |   |  |       |          |   |  |   |         |  
|Total current liabilities                            |  |                         | 983.0   |   |                       |   | 699.8   |                           |  |   | 570.8        |   |  |       | (1,013.1 | ) |  |   | 1,240.5 |  
|                                                     |  |                         |         |   |                       |   |         |                           |  |   |              |   |  |       |          |   |  |   |         |  
|Long-term debt                                       |  |                         | 467.6   |   |                       |   | 8.3     |                           |  |   | 0.2          |   |  |       |         |   |  |   | 476.1   |  
|Pension and other postretirement benefit obligations |  |                         | 125.4   |   |                       |   | 142.9   |                           |  |   | 10.4         |   |  |       |         |   |  |   | 278.7   |  
|Deferred tax liability                               |  |                         |        |   |                       |   | 77.6    |                           |  |   |             |   |  |       | (55.7    | ) |  |   | 21.9    |  
|Other long-term liabilities                          |  |                         | 25.2    |   |                       |   | 99.6    |                           |  |   | 33.5         |   |  |       |         |   |  |   | 158.3   |  
|Discontinued operations                              |  |                         | 0.1     |   |                       |   | 2.3     |                           |  |   | 1.9          |   |  |       |         |   |  |   | 4.3     |  
|Shareholders equity:                                |  |                         |         |   |                       |   |         |                           |  |   |              |   |  |       |          |   |  |   |         |  
|Common stock and paid-in capital                     |  |                         | 1,115.5 |   |                       |   | 2,374.2 |                           |  |   | 1,144.9      |   |  |       | (3,519.1 | ) |  |   | 1,115.5 |  
|Retained earnings                                    |  |                         | 2,598.6 |   |                       |   | 1,537.6 |                           |  |   | 377.5        |   |  |       | (1,915.1 | ) |  |   | 2,598.6 |  
|Accumulated other comprehensive loss                 |  |                         | (51.7   | ) |                       |   | (65.9   | )                         |  |   | 57.3         |   |  |       | 8.6      |   |  |   | (51.7   | )
|                                                     |  |                         |         |   |                       |   |         |                           |  |   |              |   |  |       |          |   |  |   |         |  
|Total shareholders investment                       |  |                         | 3,662.4 |   |                       |   | 3,845.9 |                           |  |   | 1,579.7      |   |  |       | (5,425.6 | ) |  |   | 3,662.4 |  
|                                                     |  |                         |         |   |                       |   |         |                           |  |   |              |   |  |       |          |   |  |   |         |  
|                                                     |  | $                       | 5,263.7 |   |                       | $ | 4,876.4 |                           |  | $ | 2,196.5      |   |  | $     | (6,494.4 | ) |  | $ | 5,842.2 |  
|                                                     |  |                         |         |   |                       |   |         |                           |  |   |              |   |  |       |          |   |  |   |         |  



21



---

Condensed Consolidating Balance Sheets

April 1, 2007

(Unaudited)



|                                                     |  |                         |         |   |                       |   |         |                           |  |              |         |  |       |          |   |  |   |         |  
|---------------------------------------------------- |  | ----------------------- | ------- | - | --------------------- | - | ------- | ------------------------- |  | ------------ | ------- |  | ----- | -------- | - |  | - | ------- | -
|                                                     |  | PrecisionCastpartsCorp. |         |   | GuarantorSubsidiaries |   |         | Non-GuarantorSubsidiaries |  | Eliminations |         |  | Total |         
|ASSETS                                               |  |                         |         |   |                       |   |         |                           |  |              |         |  |       |          |   |  |   |         |  
|Current assets:                                      |  |                         |         |   |                       |   |         |                           |  |              |         |  |       |          |   |  |   |         |  
|Cash and cash equivalents                            |  | $                       | 18.1    |   |                       | $ | 7.6     |                           |  | $            | 124.7   |  | $     |         |   |  | $ | 150.4   |  
|Receivables, net                                     |  |                         | 35.5    |   |                       |   | 685.1   |                           |  |              | 576.6   |  |       | (450.4   | ) |  |   | 846.8   |  
|Inventories                                          |  |                         |        |   |                       |   | 662.1   |                           |  |              | 210.5   |  |       |         |   |  |   | 872.6   |  
|Prepaid expenses                                     |  |                         | 4.7     |   |                       |   | 6.9     |                           |  |              | 11.3    |  |       |         |   |  |   | 22.9    |  
|Deferred income taxes                                |  |                         | 7.0     |   |                       |   | 75.9    |                           |  |              | 26.2    |  |       |         |   |  |   | 109.1   |  
|Discontinued operations                              |  |                         |        |   |                       |   | 15.2    |                           |  |              | 71.1    |  |       | (51.2    | ) |  |   | 35.1    |  
|                                                     |  |                         |         |   |                       |   |         |                           |  |              |         |  |       |          |   |  |   |         |  
|Total current assets                                 |  |                         | 65.3    |   |                       |   | 1,452.8 |                           |  |              | 1,020.4 |  |       | (501.6   | ) |  |   | 2,036.9 |  
|                                                     |  |                         |         |   |                       |   |         |                           |  |              |         |  |       |          |   |  |   |         |  
|Property, plant and equipment, net                   |  |                         | 32.5    |   |                       |   | 692.2   |                           |  |              | 273.1   |  |       |         |   |  |   | 997.8   |  
|Goodwill, net                                        |  |                         |        |   |                       |   | 1,651.7 |                           |  |              | 437.1   |  |       |         |   |  |   | 2,088.8 |  
|Deferred income taxes                                |  |                         | 47.7    |   |                       |   |        |                           |  |              | 10.8    |  |       | (58.5    | ) |  |   |        |  
|Investments in subsidiaries                          |  |                         | 4,144.6 |   |                       |   | 320.5   |                           |  |              |        |  |       | (4,465.1 | ) |  |   |        |  
|Other assets                                         |  |                         | 7.4     |   |                       |   | 16.1    |                           |  |              | 92.8    |  |       | 11.6     |   |  |   | 127.9   |  
|Discontinued operations                              |  |                         |        |   |                       |   | 3.7     |                           |  |              | 3.6     |  |       |         |   |  |   | 7.3     |  
|                                                     |  |                         |         |   |                       |   |         |                           |  |              |         |  |       |          |   |  |   |         |  
|                                                     |  | $                       | 4,297.5 |   |                       | $ | 4,137.0 |                           |  | $            | 1,837.8 |  | $     | (5,013.6 | ) |  | $ | 5,258.7 |  
|                                                     |  |                         |         |   |                       |   |         |                           |  |              |         |  |       |          |   |  |   |         |  
|LIABILITIES AND SHAREHOLDERS EQUITY                 |  |                         |         |   |                       |   |         |                           |  |              |         |  |       |          |   |  |   |         |  
|Current liabilities:                                 |  |                         |         |   |                       |   |         |                           |  |              |         |  |       |          |   |  |   |         |  
|Short-term borrowings                                |  | $                       | 382.9   |   |                       | $ |        |                           |  | $            | 0.2     |  | $     |         |   |  | $ | 383.1   |  
|Long-term debt currently due                         |  |                         | 169.4   |   |                       |   | 1.1     |                           |  |              | 0.2     |  |       |         |   |  |   | 170.7   |  
|Accounts payable                                     |  |                         | 374.9   |   |                       |   | 413.7   |                           |  |              | 293.2   |  |       | (501.6   | ) |  |   | 580.2   |  
|                                                     |  |                         | `       |   |                       |   |         |                           |  |              |         |  |       |          |   |  |   |         |  
|Accrued liabilities                                  |  |                         | 33.6    |   |                       |   | 318.0   |                           |  |              | 85.4    |  |       | (1.1     | ) |  |   | 435.9   |  
|Income taxes payable                                 |  |                         | 47.5    |   |                       |   |        |                           |  |              | 19.6    |  |       |         |   |  |   | 67.1    |  
|Deferred income taxes                                |  |                         |        |   |                       |   |        |                           |  |              |        |  |       |         |   |  |   |        |  
|Discontinued operations                              |  |                         |        |   |                       |   | 0.3     |                           |  |              | 20.9    |  |       |         |   |  |   | 21.2    |  
|                                                     |  |                         |         |   |                       |   |         |                           |  |              |         |  |       |          |   |  |   |         |  
|Total current liabilities                            |  |                         | 1,008.3 |   |                       |   | 733.1   |                           |  |              | 419.5   |  |       | (502.7   | ) |  |   | 1,658.2 |  
|                                                     |  |                         |         |   |                       |   |         |                           |  |              |         |  |       |          |   |  |   |         |  
|Long-term debt                                       |  |                         | 310.1   |   |                       |   | 9.0     |                           |  |              | 0.1     |  |       |         |   |  |   | 319.2   |  
|Pension and other postretirement benefit obligations |  |                         | 142.9   |   |                       |   | 164.2   |                           |  |              | 13.4    |  |       |         |   |  |   | 320.5   |  
|Deferred tax liability                               |  |                         |        |   |                       |   | 83.9    |                           |  |              |        |  |       | (58.5    | ) |  |   | 25.4    |  
|Other long-term liabilities                          |  |                         |        |   |                       |   | 83.4    |                           |  |              | 11.1    |  |       |         |   |  |   | 94.5    |  
|Discontinued operations                              |  |                         |        |   |                       |   | 1.3     |                           |  |              | 3.4     |  |       |         |   |  |   | 4.7     |  
|Shareholders equity:                                |  |                         |         |   |                       |   |         |                           |  |              |         |  |       |          |   |  |   |         |  
|Common stock and paid-in capital                     |  |                         | 1,015.7 |   |                       |   | 2,194.3 |                           |  |              | 1,145.2 |  |       | (3,339.5 | ) |  |   | 1,015.7 |  
|Retained earnings                                    |  |                         | 1,903.2 |   |                       |   | 934.0   |                           |  |              | 215.5   |  |       | (1,149.5 | ) |  |   | 1,903.2 |  
|Accumulated other comprehensive loss                 |  |                         | (82.7   | ) |                       |   | (66.2   | )                         |  |              | 29.6    |  |       | 36.6     |   |  |   | (82.7   | )
|                                                     |  |                         |         |   |                       |   |         |                           |  |              |         |  |       |          |   |  |   |         |  
|Total shareholders equity                           |  |                         | 2,836.2 |   |                       |   | 3,062.1 |                           |  |              | 1,390.3 |  |       | (4,452.4 | ) |  |   | 2,836.2 |  
|                                                     |  |                         |         |   |                       |   |         |                           |  |              |         |  |       |          |   |  |   |         |  
|                                                     |  | $                       | 4,297.5 |   |                       | $ | 4,137.0 |                           |  | $            | 1,837.8 |  | $     | (5,013.6 | ) |  | $ | 5,258.7 |  
|                                                     |  |                         |         |   |                       |   |         |                           |  |              |         |  |       |          |   |  |   |         |  



22



---

Condensed Consolidating Statements of Cash Flows

Nine Months Ended December 30, 2007

(Unaudited)



|                                                                                        |  |                         |        |   |                       |   |        |                           |  |   |              |   |  |       |        |   |  |   |        |  
|--------------------------------------------------------------------------------------- |  | ----------------------- | ------ | - | --------------------- | - | ------ | ------------------------- |  | - | ------------ | - |  | ----- | ------ | - |  | - | ------ | -
|                                                                                        |  | PrecisionCastpartsCorp. |        |   | GuarantorSubsidiaries |   |        | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | Total |       
|Net cash (used) provided by operating activities                                        |  | $                       | (115.6 | ) |                       | $ | 538.7  |                           |  | $ | 194.4        |   |  | $     | (41.8  | ) |  | $ | 575.7  |  
|                                                                                        |  |                         |        |   |                       |   |        |                           |  |   |              |   |  |       |        |   |  |   |        |  
|Acquisitions of businesses                                                              |  |                         | (113.3 | ) |                       |   | 1.2    |                           |  |   | (142.1       | ) |  |       |       |   |  |   | (254.2 | )
|Capital expenditures                                                                    |  |                         | (13.2  | ) |                       |   | (105.5 | )                         |  |   | (36.2        | ) |  |       |       |   |  |   | (154.9 | )
|Intercompany advances                                                                   |  |                         |       |   |                       |   | (476.1 | )                         |  |   | (187.4       | ) |  |       | 663.5  |   |  |   |       |  
|Intercompany receivables securitization                                                 |  |                         |       |   |                       |   |       |                           |  |   | (41.8        | ) |  |       | 41.8   |   |  |   |       |  
|Intercompany loans                                                                      |  |                         | (125.0 | ) |                       |   |       |                           |  |   |             |   |  |       | 125.0  |   |  |   |       |  
|Other                                                                                   |  |                         | 0.9    |   |                       |   | 5.1    |                           |  |   | 1.8          |   |  |       |       |   |  |   | 7.8    |  
|Net cash provided (used) by investing activities of discontinued operations             |  |                         |       |   |                       |   | 0.3    |                           |  |   | (0.4         | ) |  |       | (0.2   | ) |  |   | (0.3   | )
|                                                                                        |  |                         |        |   |                       |   |        |                           |  |   |              |   |  |       |        |   |  |   |        |  
|Net cash (used) provided by investing activities                                        |  |                         | (250.6 | ) |                       |   | (575.0 | )                         |  |   | (406.1       | ) |  |       | 830.1  |   |  |   | (401.6 | )
|                                                                                        |  |                         |        |   |                       |   |        |                           |  |   |              |   |  |       |        |   |  |   |        |  
|Net change in short-term borrowings                                                     |  |                         |       |   |                       |   | (0.1   | )                         |  |   | 149.9        |   |  |       |       |   |  |   | 149.8  |  
|Net change in long-term debt                                                            |  |                         | (375.6 | ) |                       |   | (0.5   | )                         |  |   | (0.3         | ) |  |       |       |   |  |   | (376.4 | )
|Common stock issued                                                                     |  |                         | 37.6   |   |                       |   |       |                           |  |   |             |   |  |       |       |   |  |   | 37.6   |  
|Excess tax benefits on equity instruments issued under share-based payment arrangements |  |                         | 38.9   |   |                       |   |       |                           |  |   |             |   |  |       |       |   |  |   | 38.9   |  
|Cash dividends                                                                          |  |                         | (12.4  | ) |                       |   |       |                           |  |   |             |   |  |       |       |   |  |   | (12.4  | )
|Intercompany advances                                                                   |  |                         | 663.3  |   |                       |   |       |                           |  |   |             |   |  |       | (663.3 | ) |  |   |       |  
|Intercompany loans                                                                      |  |                         |       |   |                       |   | 29.7   |                           |  |   | 95.3         |   |  |       | (125.0 | ) |  |   |       |  
|Other                                                                                   |  |                         | 2.9    |   |                       |   | (0.4   | )                         |  |   | (4.6         | ) |  |       |       |   |  |   | (2.1   | )
|                                                                                        |  |                         |        |   |                       |   |        |                           |  |   |              |   |  |       |        |   |  |   |        |  
|Net cash provided (used) by financing activities                                        |  |                         | 354.7  |   |                       |   | 28.7   |                           |  |   | 240.3        |   |  |       | (788.3 | ) |  |   | (164.6 | )
|                                                                                        |  |                         |        |   |                       |   |        |                           |  |   |              |   |  |       |        |   |  |   |        |  
|Effect of exchange rate changes on cash and cash equivalents                            |  |                         |       |   |                       |   |       |                           |  |   | 16.6         |   |  |       |       |   |  |   | 16.6   |  
|                                                                                        |  |                         |        |   |                       |   |        |                           |  |   |              |   |  |       |        |   |  |   |        |  
|Net (decrease) increase in cash and cash equivalents                                    |  |                         | (11.5  | ) |                       |   | (7.6   | )                         |  |   | 45.2         |   |  |       |       |   |  |   | 26.1   |  
|Cash and cash equivalents at beginning of period                                        |  |                         | 18.1   |   |                       |   | 7.6    |                           |  |   | 124.7        |   |  |       |       |   |  |   | 150.4  |  
|                                                                                        |  |                         |        |   |                       |   |        |                           |  |   |              |   |  |       |        |   |  |   |        |  
|Cash and cash equivalents at end of period                                              |  | $                       | 6.6    |   |                       | $ |       |                           |  | $ | 169.9        |   |  | $     |       |   |  | $ | 176.5  |  
|                                                                                        |  |                         |        |   |                       |   |        |                           |  |   |              |   |  |       |        |   |  |   |        |  



23



---

Condensed Consolidating Statements of Cash Flows

Nine Months Ended December 31, 2006 (As Restated)

(Unaudited)



|                                                                                        |  |                         |        |   |                       |   |        |                           |  |   |              |   |  |       |        |   |  |   |        |  
|--------------------------------------------------------------------------------------- |  | ----------------------- | ------ | - | --------------------- | - | ------ | ------------------------- |  | - | ------------ | - |  | ----- | ------ | - |  | - | ------ | -
|                                                                                        |  | PrecisionCastpartsCorp. |        |   | GuarantorSubsidiaries |   |        | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | Total |       
|Net cash provided (used) by operating activities                                        |  | $                       | 13.5   |   |                       | $ | 483.3  |                           |  | $ | (12.4        | ) |  | $     | (17.6  | ) |  | $ | 466.8  |  
|                                                                                        |  |                         |        |   |                       |   |        |                           |  |   |              |   |  |       |        |   |  |   |        |  
|Acquisitions of businesses                                                              |  |                         | (564.3 | ) |                       |   | 12.9   |                           |  |   | 9.4          |   |  |       |       |   |  |   | (542.0 | )
|Capital expenditures                                                                    |  |                         | (29.2  | ) |                       |   | (98.3  | )                         |  |   | (25.1        | ) |  |       |       |   |  |   | (152.6 | )
|Proceeds from the sale of businesses                                                    |  |                         | 34.3   |   |                       |   |       |                           |  |   |             |   |  |       |       |   |  |   | 34.3   |  
|Intercompany advances                                                                   |  |                         |       |   |                       |   | (414.1 | )                         |  |   | 87.6         |   |  |       | 326.5  |   |  |   |       |  
|Intercompany receivables securitization                                                 |  |                         |       |   |                       |   |       |                           |  |   | (17.6        | ) |  |       | 17.6   |   |  |   |       |  
|Intercompany loans                                                                      |  |                         | (38.8  | ) |                       |   |       |                           |  |   |             |   |  |       | 38.8   |   |  |   |       |  
|Other                                                                                   |  |                         | 0.2    |   |                       |   | 21.4   |                           |  |   | 5.5          |   |  |       |       |   |  |   | 27.1   |  
|Net cash (used) provided by investing activities of discontinued operations             |  |                         |       |   |                       |   | (4.0   | )                         |  |   | 1.2          |   |  |       | 1.3    |   |  |   | (1.5   | )
|                                                                                        |  |                         |        |   |                       |   |        |                           |  |   |              |   |  |       |        |   |  |   |        |  
|Net cash (used) provided by investing activities                                        |  |                         | (597.8 | ) |                       |   | (482.1 | )                         |  |   | 61.0         |   |  |       | 384.2  |   |  |   | (634.7 | )
|                                                                                        |  |                         |        |   |                       |   |        |                           |  |   |              |   |  |       |        |   |  |   |        |  
|Net change in short-term borrowings                                                     |  |                         | 345.5  |   |                       |   | (0.2   | )                         |  |   | (47.4        | ) |  |       |       |   |  |   | 297.9  |  
|Net change in long-term debt                                                            |  |                         | (121.3 | ) |                       |   | (1.1   | )                         |  |   | (0.1         | ) |  |       |       |   |  |   | (122.5 | )
|Common stock issued                                                                     |  |                         | 24.6   |   |                       |   |       |                           |  |   |             |   |  |       |       |   |  |   | 24.6   |  
|Excess tax benefits on equity instruments issued under share-based payment arrangements |  |                         | 20.7   |   |                       |   |       |                           |  |   |             |   |  |       |       |   |  |   | 20.7   |  
|Cash dividends                                                                          |  |                         | (12.2  | ) |                       |   |       |                           |  |   |             |   |  |       |       |   |  |   | (12.2  | )
|Intercompany advances                                                                   |  |                         | 327.8  |   |                       |   |       |                           |  |   |             |   |  |       | (327.8 | ) |  |   |       |  
|Intercompany loans                                                                      |  |                         |       |   |                       |   |       |                           |  |   | 48.6         |   |  |       | (48.6  | ) |  |   |       |  
|Other                                                                                   |  |                         | 2.4    |   |                       |   | 0.1    |                           |  |   | (0.2         | ) |  |       |       |   |  |   | 2.3    |  
|Net cash (used) provided by financing activities of discontinued operations             |  |                         |       |   |                       |   |       |                           |  |   | (7.1         | ) |  |       | 9.8    |   |  |   | 2.7    |  
|                                                                                        |  |                         |        |   |                       |   |        |                           |  |   |              |   |  |       |        |   |  |   |        |  
|Net cash provided (used) by financing activities                                        |  |                         | 587.5  |   |                       |   | (1.2   | )                         |  |   | (6.2         | ) |  |       | (366.6 | ) |  |   | 213.5  |  
|                                                                                        |  |                         |        |   |                       |   |        |                           |  |   |              |   |  |       |        |   |  |   |        |  
|Effect of exchange rate changes on cash and cash equivalents                            |  |                         |       |   |                       |   |       |                           |  |   | 19.8         |   |  |       |       |   |  |   | 19.8   |  
|                                                                                        |  |                         |        |   |                       |   |        |                           |  |   |              |   |  |       |        |   |  |   |        |  
|Net increase in cash and cash equivalents                                               |  |                         | 3.2    |   |                       |   |       |                           |  |   | 62.2         |   |  |       |       |   |  |   | 65.4   |  
|Cash and cash equivalents at beginning of period                                        |  |                         | 10.6   |   |                       |   |       |                           |  |   | 49.3         |   |  |       |       |   |  |   | 59.9   |  
|                                                                                        |  |                         |        |   |                       |   |        |                           |  |   |              |   |  |       |        |   |  |   |        |  
|Cash and cash equivalents at end of period                                              |  | $                       | 13.8   |   |                       | $ |       |                           |  | $ | 111.5        |   |  | $     |       |   |  | $ | 125.3  |  
|                                                                                        |  |                         |        |   |                       |   |        |                           |  |   |              |   |  |       |        |   |  |   |        |  



24



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|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------

Consolidated Results of Operations - Comparison Between the Three Months Ended December 30, 2007 and December 31, 2006



|                                                            |  |                    |         |   |                     |   |         |   |  |   |       |   |  |       |  
|----------------------------------------------------------- |  | ------------------ | ------- | - | ------------------- | - | ------- | - |  | - | ----- | - |  | ----- | -
|                                                            |  | Three Months Ended |         |   | Increase/(Decrease) |  
|(In millions, except per share data)                        |  | 12/30/07           |         |   | 12/31/06            |   |         | $ |  |   | %     |  
|Net sales                                                   |  | $                  | 1,696.6 |   |                     | $ | 1,382.6 |   |  | $ | 314.0 |   |  | 22.7  | %
|Cost of goods sold                                          |  |                    | 1,232.3 |   |                     |   | 1,049.5 |   |  |   | 182.8 |   |  | 17.4  |  
|Selling and administrative expenses                         |  |                    | 90.8    |   |                     |   | 86.9    |   |  |   | 3.9   |   |  | 4.5   |  
|Interest expense, net                                       |  |                    | 10.1    |   |                     |   | 12.3    |   |  |   | (2.2  | ) |  | (17.9 | )
|                                                            |  |                    |         |   |                     |   |         |   |  |   |       |   |  |       |  
|Income before income taxes and minority interest            |  |                    | 363.4   |   |                     |   | 233.9   |   |  |   | 129.5 |   |  | 55.4  |  
|Income tax expense                                          |  |                    | 120.9   |   |                     |   | 75.6    |   |  |   | 45.3  |   |  | 59.9  |  
|Effective tax rate                                          |  |                    | 33.3    | % |                     |   | 32.3    | % |  |   |       |   |  |       |  
|Minority interest                                           |  |                    | (0.3    | ) |                     |   | (0.4    | ) |  |   | 0.1   |   |  | 25.0  |  
|                                                            |  |                    |         |   |                     |   |         |   |  |   |       |   |  |       |  
|Net income from continuing operations                       |  |                    | 242.2   |   |                     |   | 157.9   |   |  |   | 84.3  |   |  | 53.4  |  
|Net income from discontinued operations                     |  |                    | 4.3     |   |                     |   | 0.8     |   |  |   | 3.5   |   |  | 437.5 |  
|                                                            |  |                    |         |   |                     |   |         |   |  |   |       |   |  |       |  
|Net income                                                  |  | $                  | 246.5   |   |                     | $ | 158.7   |   |  | $ | 87.8  |   |  | 55.3  | %
|                                                            |  |                    |         |   |                     |   |         |   |  |   |       |   |  |       |  
|Net income per share from continuing operations  diluted   |  | $                  | 1.73    |   |                     | $ | 1.14    |   |  | $ | 0.59  |   |  | 51.8  | %
|Net income per share from discontinued operations  diluted |  |                    | 0.03    |   |                     |   | 0.01    |   |  |   | 0.02  |   |  | 200.0 |  
|                                                            |  |                    |         |   |                     |   |         |   |  |   |       |   |  |       |  
|Net income per share - diluted                              |  | $                  | 1.76    |   |                     | $ | 1.15    |   |  | $ | 0.61  |   |  | 53.0  | %
|                                                            |  |                    |         |   |                     |   |         |   |  |   |       |   |  |       |  

Sales for the third quarter of fiscal 2008 were $1,696.6 million, up $314.0 million from $1,382.6 million in the
same quarter last year. The acquisitions of GSC, Cherry, McWilliams and Caledonian collectively contributed approximately $92 million of the year-over-year increase. The increase in base business sales was principally driven by continuing strong
conditions in PCCs core aerospace and power generation markets. In addition, contractual material pass-through pricing increased sales by approximately $117 million this year versus approximately $71 million last year. With regard to growth in
the commercial aircraft industry, aircraft deliveries increased 9 percent in calendar year 2007 from calendar year 2006 and forecasts from the Airline Monitor as of July 2007 indicate aircraft deliveries are expected to increase approximately 16
percent in calendar year 2008. Because of manufacturing lead times required to support aircraft deliveries, PCC began realizing these forecasted increases during the second half of fiscal 2006.

Net income from continuing operations for the third quarter of fiscal 2008 was $242.2 million, or $1.73 per share (diluted). By comparison, net income from continuing
operations for the third quarter of fiscal 2007 was $157.9 million, or $1.14 per share (diluted). Net income (after discontinued operations) for the third quarter of fiscal 2008 was $246.5 million, or $1.76 per share (diluted), compared with net
income of $158.7 million, or $1.15 per share (diluted), in the same period last year.

Interest and Income Tax

Net interest expense for the third quarter of fiscal 2008 was $10.1 million, compared with $12.3 million for the third quarter of last year. The lower expense is due to
reduced debt levels and lower borrowing rates compared to the same quarter last year.

The effective tax rate for the third quarter of fiscal 2008 was 33.3
percent, 1.0 percentage point higher than the 32.3 percent effective rate in the same quarter last year. The increase in tax rate was principally due to reduced tax benefits from audit settlements in fiscal 2008 compared to fiscal 2007.



25



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Restructuring

PCC regularly assesses its cost structure to ensure that operations are properly sized for prevailing market conditions, taking into consideration current and forecasted conditions in markets served by the Company. There were no
restructuring or asset impairment charges in the periods presented.

Business Acquisitions

On July 5, 2007, PCC acquired the stock of Caledonian Alloys Group Limited (Caledonian) for $208.1 million in cash, of which $165.1 million was paid at
close, and two additional contingent payments of approximately $21.5 million each will be paid over the two years subsequent to acquisition. Caledonian is a market leader in providing nickel superalloy and titanium revert management solutions for
the aerospace and IGT industries. Revert includes metal chips, casting gates, bar ends, forging flash, and other byproducts from casting, forging, and fastener manufacturing processes that can be re-melted and reused. Headquartered in Livingston,
Scotland, Caledonian employs approximately 300 people and operates nine revert processing facilities in six countries. The Caledonian acquisition is a stock purchase for tax purposes and operates as part of the Forged Products segment. PCC financed
the acquisition with cash on hand and its existing credit facilities.

On April 3, 2007, PCC acquired the assets of McWilliams, a privately
held-company headquartered in Rockaway, New Jersey, for $91.4 million in cash. Founded in 1880, McWilliams is a leading manufacturer of titanium, nickel and steel forgings, primarily for commercial and military aerospace applications. The company,
which employs approximately 120 people at its New Jersey facility, operates both hammer and screw presses for open and closed die forging. The McWilliams acquisition is an asset purchase for tax purposes and operates as part of the Forged Products
segment.

On February 23, 2007, PCC acquired the LLC membership interests of Cherry from Acument Global Technologies, Inc. (Acument) for
$298.1 million in cash. Founded in 1939, Cherry encompasses the aerospace operations of Acument, formerly Textron Fastening Systems, and is a manufacturer of aerospace rivets and blind bolts. Cherry employs approximately 500 people at its facility
in Santa Ana, California. Cherry fills a gap in our product line of critical aerospace fasteners and opens up potential synergies and economies of scale with our other fastener operations. The Cherry acquisition is an asset purchase for tax purposes
and operates as part of the Fastener Products segment.

On February 2, 2007, PCC acquired the stock of GSC, a manufacturer of aluminum and steel
structural investment castings for aerospace, energy, medical, and other end markets for $77.1 million in cash. GSC employs approximately 375 people at its operations in Ogden, Utah and Saltillo, Mexico. The Mexico operation was closed subsequent to
the acquisition. GSC enhances our small structural investment casting portfolio with its ability to produce larger components. The GSC acquisition is an asset purchase for tax purposes and operates as part of the Investment Cast Products segment.

On May 25, 2006, PCC completed the acquisition of SMC, a manufacturer of high-performance nickel-based alloys and super alloys. SMC currently
provides our forging operations with a limited quantity of nickel-based alloys for manufacturing aerospace components, and it is expected that this internal supply will continue to grow over time. The aggregate purchase price was $548.1 million,
which principally includes $310.6 million for the purchase of shares and $240.1 million for the repayment of SMCs outstanding debt and related termination costs, partially offset by $22.3 million of cash acquired. The transaction was funded
through the Companys credit facilities. The SMC acquisition is a stock purchase for tax purposes and operates as part of the Forged Products segment.



26



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Discontinued Operations

The Companys financial statements were affected by activities relating to the planned divestiture of a number of our businesses. These businesses have been accounted for under Statement of Financial Accounting
Standards (SFAS) No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. Accordingly, any operating results of these businesses are presented in the Companys Condensed Consolidated Statements of
Operations as discontinued operations, net of tax, and all prior periods have been reclassified.

In the third quarter of fiscal 2008, the Company entered
into an agreement to sell the Shape Memory Alloys (SMA) business that was purchased with the SMC acquisition. SMA has been reclassified from the Forged Products segment to discontinued operations. The sale of SMA was completed in the
fourth quarter of fiscal 2008.

Also subsequent to quarter-end, PCC completed the sale of Rescal, a small foreign business held-for-sale from the
acquisition of SMC.

In the third quarter of fiscal 2007, the Company sold its interest in Wyman-Gordon FRISA to its 50% joint venture partner. PCC
received $30.0 million in cash for the sale. In addition, the buyer assumed and subsequently paid off $17.4 million of debt upon closing. At the time of the closing, the joint venture entity operated a manufacturing facility located in Mexico that
was engaged in the manufacture of forged products using the ring rolling process. FRISA was reclassified from the Forged Products segment to discontinued operations.

In the first quarter of fiscal 2007, the Company decided to sell the refiner rebuild business of J&L Fiber Services and to close its AFT Composites business. These businesses were reclassified from the former
Industrial Products segment (now the Fastener Products segment) to discontinued operations. Both transactions were completed during the third quarter of fiscal 2007.

The net income from discontinued operations was $4.3 million, or $0.03 per share (diluted) in the third quarter of fiscal 2008 compared with net income of $0.8 million, or $0.01 per share (diluted), in the same
quarter last year. The net income from discontinued operations in the current quarter consists primarily of tax benefits resulting from the anticipated sale of SMA, plus operating income from SMA, partially offset by miscellaneous shutdown expenses
at other discontinued operations. The net income from discontinued operations in the third quarter of last year principally reflects the gain on the sale of the Forged Products FRISA business.

Contractual obligations and commercial commitments

Since the
Companys previous disclosure of contractual obligations and commercial commitments, the Company has adopted FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes  an interpretation of FASB Statement
No. 109 (FIN 48). There are no material changes in the contractual obligations as a result of adopting FIN 48 or any other activity in the period.

Subsequent Events

On January 3, 2008, PCC completed the sale of SMA for $29.4 million in cash. The SMA
business was acquired with SMC in the first quarter of fiscal 2007, and was reclassified from the Forged Products segment to discontinued operations during the third quarter of fiscal 2008. PCC is in the process of calculating the gain on the sale,
which will be recognized in the fourth quarter of fiscal 2008.

On January 4, 2008, PCC completed the sale of Rescal, a small foreign business
held-for-sale from the acquisition of SMC. PCC does not anticipate any significant gain or loss on this sale.



27



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Results of Operations by Segment  Comparison Between the Three Months Ended December 30, 2007 and
December 31, 2006



|                                                 |  |                    |         |   |                     |   |         |   |  |   |       |  |      |  
|------------------------------------------------ |  | ------------------ | ------- | - | ------------------- | - | ------- | - |  | - | ----- |  | ---- | -
|                                                 |  | Three Months Ended |         |   | Increase/(Decrease) |  
|(In millions)                                    |  | 12/30/07           |         |   | 12/31/06            |   |         | $ |  | % |      
|Net sales:                                       |  |                    |         |   |                     |   |         |   |  |   |       |  |      |  
|Investment Cast Products                         |  | $                  | 540.9   |   |                     | $ | 436.2   |   |  | $ | 104.7 |  | 24.0 | %
|Forged Products                                  |  |                    | 771.8   |   |                     |   | 636.6   |   |  |   | 135.2 |  | 21.2 |  
|Fastener Products                                |  |                    | 383.9   |   |                     |   | 309.8   |   |  |   | 74.1  |  | 23.9 |  
|                                                 |  |                    |         |   |                     |   |         |   |  |   |       |  |      |  
|Consolidated net sales                           |  | $                  | 1,696.6 |   |                     | $ | 1,382.6 |   |  | $ | 314.0 |  | 22.7 | %
|                                                 |  |                    |         |   |                     |   |         |   |  |   |       |  |      |  
|Segment operating income (loss):                 |  |                    |         |   |                     |   |         |   |  |   |       |  |      |  
|Investment Cast Products                         |  | $                  | 131.6   |   |                     | $ | 96.2    |   |  | $ | 35.4  |  | 36.8 | %
|% of sales                                       |  |                    | 24.3    | % |                     |   | 22.1    | % |  |   |       |  |      |  
|Forged Products                                  |  |                    | 169.2   |   |                     |   | 110.4   |   |  |   | 58.8  |  | 53.3 |  
|% of sales                                       |  |                    | 21.9    | % |                     |   | 17.3    | % |  |   |       |  |      |  
|Fastener Products                                |  |                    | 98.2    |   |                     |   | 65.7    |   |  |   | 32.5  |  | 49.5 |  
|% of sales                                       |  |                    | 25.6    | % |                     |   | 21.2    | % |  |   |       |  |      |  
|Corporate expense                                |  |                    | (25.5   | ) |                     |   | (26.1   | ) |  |   | 0.6   |  | 2.3  |  
|                                                 |  |                    |         |   |                     |   |         |   |  |   |       |  |      |  
|Consolidated segment operating income            |  |                    | 373.5   |   |                     |   | 246.2   |   |  | $ | 127.3 |  | 51.7 | %
|% of sales                                       |  |                    | 22.0    | % |                     |   | 17.8    | % |  |   |       |  |      |  
|Interest expense, net                            |  |                    | 10.1    |   |                     |   | 12.3    |   |  |   |       |  |      |  
|                                                 |  |                    |         |   |                     |   |         |   |  |   |       |  |      |  
|Income before income taxes and minority interest |  | $                  | 363.4   |   |                     | $ | 233.9   |   |  |   |       |  |      |  
|                                                 |  |                    |         |   |                     |   |         |   |  |   |       |  |      |  

Investment Cast Products

Investment Cast Products sales increased 24.0 percent from $436.2 million in the third quarter of fiscal 2007 to $540.9 million this year. Operating income increased 36.8 percent from $96.2 million in the third
quarter of fiscal 2007 to $131.6 million in the same quarter this year, while operating income as a percent of sales increased from 22.1 percent to 24.3 percent of sales. The increase in sales was driven by continued strength in the aerospace and
power generation markets, with improved commercial aerospace build rates and solid aftermarket growth, as well as market share gains and the addition of GSC. Sales also include approximately $22 million of higher contractual pricing related to
pass-through of increased material costs in the third quarter of fiscal 2008 compared to approximately $13 million in the same period last year. Although material prices were lower, primarily nickel, which decreased approximately 6 percent on the
London Metal Exchange (LME) compared to the same quarter last year, the contractual material pass-through increased year-over-year due to the timing of nickel purchases as well as increased volume. The increase in operating income
reflected the impact of the higher sales volume and improved manufacturing performance, partially offset by the impact of higher raw material costs and contractual pass-through pricing. Contractual material pass-through pricing diluted operating
margins by 1.0 percentage point in the third quarter of fiscal 2008 compared to 0.6 percentage points in the same period a year ago.

Sales within this
segment are expected to continue to benefit from increased demand from commercial aerospace customers and renewed strength in the power generation market through the fourth quarter of fiscal 2008. The segment will also benefit from a full year of
operations from GSC. To support higher aerospace and IGT production schedules going forward, the segment is in the process of expanding manufacturing capacity over the next 12 months, including the expansion of an IGT facility in Oregon and a new
IGT plant in Ohio.



28



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Forged Products

Forged Products sales were $771.8 million for the quarter, an increase of 21.2 percent, compared to sales of $636.6 million in the third quarter of fiscal 2007. Operating income increased 53.3 percent from $110.4 million in the third
quarter of fiscal 2007 to $169.2 million in the same quarter this year, while operating income as a percent of sales increased from 17.3 percent to 21.9 percent of sales. The year-over-year increase in sales reflects the addition of sales from the
acquisitions of Caledonian and McWilliams, as well as increased demand for aerospace products and continued penetration into the Asian power generation market. In addition, higher contractual pricing related to pass-through of increased raw material
costs accounted for approximately $91 million of sales in the third quarter of fiscal 2008 compared to $53 million in the same period last year, diluting operating margins by 2.8 percentage points in the current quarter compared to 1.6 percentage
points the same period a year ago. While contractual material pass-through remained high during the quarter due to timing of the contracts, price-in-effect sales agreements related to the sale of alloys at SMC were affected by lower material costs,
primarily nickel, which decreased approximately 6 percent on the LME compared to the same quarter last year. Operating income as a percent of sales continued to benefit from significant margin improvements associated with the SMC businesses, as well
as increased sales volume of higher margin power generation products and the impact of successful cost-reduction initiatives.

Future sales growth for the
Forged Products segment is expected to moderate as the price of nickel continues to decline and as SMC increases the quantity of alloys it provides internally to the Companys forging operations. The segment will benefit from the addition of
the McWilliams and Caledonian acquisitions, in addition to continuing strength in the commercial aerospace and power generation markets, and from SMCs market share gains in non-aerospace markets.

Fastener Products

The Fastener Products segment reported
$383.9 million of sales with operating income of $98.2 million, or 25.6 percent of sales, in the third quarter of fiscal 2008, compared to sales of $309.8 million and operating income of $65.7 million, or 21.2 percent of sales, in the third quarter
of fiscal 2007. The increase in sales, which includes the recent Cherry acquisition, was primarily due to the favorable impact of strong aerospace sales, which increased 22 percent organically over the third quarter of last year. This increase was
partially offset by weaker fastener demand from the automotive and general industrial markets. Operating income as a percent of sales benefited from the higher sales volume and continued efforts to reduce costs and improve manufacturing processes.

Sales within this segment are expected to grow from increased sales volume, market share gains, and extended content from qualification of new fastener
part families within the aerospace market. The segment will also benefit from a full year of operations from Cherry.



29



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Consolidated Results of Operations - Comparison Between the Nine Months Ended December 30, 2007 and
December 31, 2006



|                                                            |  |                   |         |   |                     |   |         |   |  |   |         |   |  |       |  
|----------------------------------------------------------- |  | ----------------- | ------- | - | ------------------- | - | ------- | - |  | - | ------- | - |  | ----- | -
|                                                            |  | Nine Months Ended |         |   | Increase/(Decrease) |  
|(In millions, except per share data)                        |  | 12/30/07          |         |   | 12/31/06            |   |         | $ |  |   | %       |  
|Net sales                                                   |  | $                 | 5,078.7 |   |                     | $ | 3,810.2 |   |  | $ | 1,268.5 |   |  | 33.3  | %
|Cost of goods sold                                          |  |                   | 3,704.9 |   |                     |   | 2,897.0 |   |  |   | 807.9   |   |  | 27.9  |  
|Selling and administrative expenses                         |  |                   | 279.4   |   |                     |   | 247.5   |   |  |   | 31.9    |   |  | 12.9  |  
|Interest expense, net                                       |  |                   | 36.3    |   |                     |   | 40.6    |   |  |   | (4.3    | ) |  | (10.6 | )
|                                                            |  |                   |         |   |                     |   |         |   |  |   |         |   |  |       |  
|Income before income taxes and minority interest            |  |                   | 1,058.1 |   |                     |   | 625.1   |   |  |   | 433.0   |   |  | 69.3  |  
|Income tax expense                                          |  |                   | 356.2   |   |                     |   | 210.0   |   |  |   | 146.2   |   |  | 69.6  |  
|Effective tax rate                                          |  |                   | 33.7    | % |                     |   | 33.6    | % |  |   |         |   |  |       |  
|Minority interest                                           |  |                   | (0.9    | ) |                     |   | (1.2    | ) |  |   | 0.3     |   |  | 25.0  |  
|                                                            |  |                   |         |   |                     |   |         |   |  |   |         |   |  |       |  
|Net income from continuing operations                       |  |                   | 701.0   |   |                     |   | 413.9   |   |  |   | 287.1   |   |  | 69.4  |  
|Net income from discontinued operations                     |  |                   | 7.3     |   |                     |   | 14.7    |   |  |   | (7.4    | ) |  | (50.3 | )
|                                                            |  |                   |         |   |                     |   |         |   |  |   |         |   |  |       |  
|Net income                                                  |  | $                 | 708.3   |   |                     | $ | 428.6   |   |  | $ | 279.7   |   |  | 65.3  | %
|                                                            |  |                   |         |   |                     |   |         |   |  |   |         |   |  |       |  
|Net income per share from continuing operations  diluted   |  | $                 | 5.00    |   |                     |   | 3.01    |   |  | $ | 1.99    |   |  | 66.1  | %
|Net income per share from discontinued operations  diluted |  |                   | 0.06    |   |                     |   | 0.10    |   |  |   | (0.04   | ) |  | (40.0 | )
|                                                            |  |                   |         |   |                     |   |         |   |  |   |         |   |  |       |  
|Net income per share - diluted                              |  | $                 | 5.06    |   |                     | $ | 3.11    |   |  | $ | 1.95    |   |  | 62.7  | %
|                                                            |  |                   |         |   |                     |   |         |   |  |   |         |   |  |       |  

Sales for the first nine months of fiscal 2008 were $5,078.7 million, up $1,268.5 million from $3,810.2 million in
the same period last year. The acquisitions of GSC, Cherry, McWilliams and Caledonian collectively contributed approximately $344 million of the year-over-year increase. In addition, SMC contributed seven months of sales in fiscal 2007 versus a full
nine months in the same period this year. The increase in base business sales benefited from continuing strong conditions in PCCs core aerospace and power generation markets. In addition, material pass-through pricing increased sales by
approximately $340 million this year versus approximately $199 million last year. With regard to growth in the commercial aircraft industry, aircraft deliveries increased 9 percent in calendar 2007 from calendar 2006, and forecasts from The Airline
Monitor as of July 2007 indicate aircraft deliveries are expected to increase approximately 16 percent in calendar year 2008. Because of manufacturing lead times required to support aircraft deliveries, PCC began realizing these forecasted increases
during the second half of fiscal 2006.

Net income from continuing operations for the first nine months of fiscal 2008 was $701.0 million, or $5.00 per
share (diluted), compared to net income from continuing operations for the first nine months of fiscal 2007 of $413.9 million, or $3.01 per share (diluted). Net income (after discontinued operations) for the first nine months of fiscal 2008 was
$708.3 million, or $5.06 per share (diluted), compared with net income of $428.6 million, or $3.11 per share (diluted), in the same period last year.

Interest and Income Tax

Net interest expense for the nine months ended December 30, 2007 was $36.3 million, as compared with
$40.6 million for the same period last year. The lower expense is due to reduced debt levels and lower borrowing rates compared to the same period last year.

The effective tax rate for the first nine months of fiscal 2008 was 33.7 percent, which is not significantly different from the effective tax rate of 33.6 percent for the first nine months of fiscal 2007.



30



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Discontinued Operations

The net income from discontinued operations was $7.3 million, or $0.06 per share (diluted), for the nine months ended December 30, 2007 compared with net income of $14.7 million, or $0.10 per share (diluted), in
the same period last year. The net income from discontinued operations in the first nine months of fiscal 2008 consists primarily of tax benefits resulting from the anticipated sale of SMA, plus operating income from SMA and Rescal, partially offset
by miscellaneous shut-down expenses at other discontinued operations. The net income from discontinued operations in the first nine months of last year principally reflects the gain on the sale of the Forged Products FRISA business.



31



---

Results of Operations by Segment  Comparison Between the Nine Months Ended December 30, 2007 and
December 31, 2006



|                                                 |  |                   |         |   |                     |   |         |   |  |   |         |   |  |       |  
|------------------------------------------------ |  | ----------------- | ------- | - | ------------------- | - | ------- | - |  | - | ------- | - |  | ----- | -
|                                                 |  | Nine Months Ended |         |   | Increase/(Decrease) |  
|(In millions)                                    |  | 12/30/07          |         |   | 12/31/06            |   |         | $ |  |   | %       |  
|Net sales:                                       |  |                   |         |   |                     |   |         |   |  |   |         |   |  |       |  
|Investment Cast Products                         |  | $                 | 1,581.4 |   |                     | $ | 1,286.2 |   |  | $ | 295.2   |   |  | 23.0  | %
|Forged Products                                  |  |                   | 2,358.5 |   |                     |   | 1,611.6 |   |  |   | 746.9   |   |  | 46.3  |  
|Fastener Products                                |  |                   | 1,138.8 |   |                     |   | 912.4   |   |  |   | 226.4   |   |  | 24.8  |  
|                                                 |  |                   |         |   |                     |   |         |   |  |   |         |   |  |       |  
|Consolidated net sales                           |  | $                 | 5,078.7 |   |                     | $ | 3,810.2 |   |  | $ | 1,268.5 |   |  | 33.3  | %
|                                                 |  |                   |         |   |                     |   |         |   |  |   |         |   |  |       |  
|Operating income (loss):                         |  |                   |         |   |                     |   |         |   |  |   |         |   |  |       |  
|Investment Cast Products                         |  | $                 | 376.8   |   |                     | $ | 281.4   |   |  | $ | 95.4    |   |  | 33.9  | %
|% of sales                                       |  |                   | 23.8    | % |                     |   | 21.9    | % |  |   |         |   |  |       |  
|Forged Products                                  |  |                   | 514.7   |   |                     |   | 259.9   |   |  |   | 254.8   |   |  | 98.0  |  
|% of sales                                       |  |                   | 21.8    | % |                     |   | 16.1    | % |  |   |         |   |  |       |  
|Fastener Products                                |  |                   | 277.2   |   |                     |   | 186.7   |   |  |   | 90.5    |   |  | 48.5  |  
|% of sales                                       |  |                   | 24.3    | % |                     |   | 20.5    | % |  |   |         |   |  |       |  
|Corporate expense                                |  |                   | (74.3   | ) |                     |   | (62.3   | ) |  |   | (12.0   | ) |  | (19.3 | )
|                                                 |  |                   |         |   |                     |   |         |   |  |   |         |   |  |       |  
|Consolidated segment operating income            |  |                   | 1,094.4 |   |                     |   | 665.7   |   |  | $ | 428.7   |   |  | 64.4  | %
|% of sales                                       |  |                   | 21.5    | % |                     |   | 17.5    | % |  |   |         |   |  |       |  
|Interest expense, net                            |  |                   | 36.3    |   |                     |   | 40.6    |   |  |   |         |   |  |       |  
|                                                 |  |                   |         |   |                     |   |         |   |  |   |         |   |  |       |  
|Income before income taxes and minority interest |  | $                 | 1,058.1 |   |                     | $ | 625.1   |   |  |   |         |   |  |       |  

Investment Cast Products

Investment Cast Products sales increased 23.0 percent from $1,286.2 million in the first nine months of fiscal 2007 to $1,581.4 million this year. Operating income for the segment increased 33.9 percent, from
$281.4 million, or 21.9 percent of sales, a year ago to $376.8 million, or 23.8 percent of sales, in the first nine months of fiscal 2008. The increase in sales was driven by continued strength in the aerospace and power generation markets, with
improved commercial aerospace build rates and solid aftermarket growth, as well as market share gains and the addition of GSC. The first nine months of fiscal 2008 also included approximately $72 million related to pass-through of higher material
costs versus approximately $33 million in the same period last year. The increase in operating income reflected the impact of the higher sales volume and operating improvements, partially offset by higher raw material costs, mainly nickel, which has
increased approximately 35 percent on the LME compared to the same period last year. The improvement in operating margins as a percentage of sales was mainly due to the leverage from higher sales volume and improved manufacturing performance,
partially offset by the impact of higher raw material costs and pass-through pricing, which diluted operating margins by 1.1 percentage points in the first nine months of fiscal 2008 compared to 0.6 percentage points in the same period a year ago.



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Forged Products

Forged Products sales were $2,358.5 million for the first nine months of fiscal 2008, an increase of 46.3 percent, compared to sales of $1,611.6 million in the same period last year. Operating income increased 98.0 percent from $259.9
million, or 16.1 percent of sales, in the first nine months of fiscal 2007 to $514.7 million, or 21.8 percent of sales, this year. The increase in sales reflects the addition of sales from Caledonian and McWilliams, and a full nine months of SMC, in
addition to increased demand for aerospace products and extruded pipe in the base businesses. The first nine months of fiscal 2008 also included approximately $257 million related to pass-through of higher material costs versus approximately $151
million in the same period last year. Operating income as a percent of sales benefited in the current quarter from the increased sales volume and the impact of successful cost-reduction initiatives, partially offset by higher material costs, mainly
nickel, which has increased approximately 35 percent on the LME since the first nine months of fiscal 2007. Contractual material pass-through pricing diluted operating margins by 2.7 percentage points in the first nine months of fiscal 2008 compared
to 1.7 percentage points in the same period a year ago.

Fastener Products

The Fastener Products segment reported $1,138.8 million of sales with operating income of $277.2 million, or 24.3 percent of sales, in the first nine months of fiscal 2008, compared to sales of $912.4 million and
operating income of $186.7 million, or 20.5 percent of sales, in the same period last year. The increase in sales, which includes the Cherry acquisition, was driven by continued strength in the aerospace markets, resulting in a 23 percent increase
in organic aerospace sales over the same period a year ago. This increase was partially offset by weaker fastener demand from the automotive and general industrial markets. Operating income as a percent of sales benefited from the higher margin
aerospace business and the impact of continued cost take-outs and improved manufacturing processes.

Changes in Financial Condition and Liquidity

Total assets of $5,842.2 million at December 30, 2007 represented a $583.5 million increase from the $5,258.7 million balance at April 1, 2007,
principally reflecting the addition of assets from the McWilliams acquisition ($111.2 million) and the Caledonian acquisition ($264.7 million), as well as higher inventories and receivables to support continuing revenue growth. Total capitalization
at December 30, 2007 was $4,309.1 million, consisting of $646.7 million of debt and $3,662.4 million of equity. The debt-to-capitalization ratio improved to 15.0 percent at December 30, 2007 from 23.5 percent at the end of fiscal 2007.

Cash as of December 30, 2007 was $176.5 million, up $26.1 million from the end of fiscal 2007, and total debt was $646.7 million, down $226.3 million
since the end of fiscal 2007. Debt net of cash, which includes borrowings to finance the acquisitions of SMC, GSC, Cherry, McWilliams and Caledonian, decreased from $722.6 million at the end of fiscal 2007 to $470.2 million at December 30,
2007, reflecting a decrease of $252.4 million. Adjusting this decrease in net debt for the cash paid for acquisitions ($254.2 million), the Company generated $506.6 million of positive net cash flow in the first nine months of the year, consisting
primarily of $575.7 million from operating activities (which includes $58.0 million of voluntary pension contributions) and $76.5 million from the issuance of common stock and related tax benefit, partially offset by capital expenditures of $154.9
million.

Capital spending during fiscal 2008, which is expected to be slightly higher than fiscal 2007 capital spending, will principally provide for
additional capacity expansion, cost reduction, and equipment maintenance and upgrades throughout the Company. Company contributions to its defined benefit pension plans are expected to be approximately $75.0 million during fiscal 2008, which
includes $58.0 million of voluntary contributions made in the first quarter.

Management believes that the Company can fund requirements for at least the
next 12 months for working capital, pension and other postretirement benefit obligations, capital spending, cash dividends, scheduled repayment of debt and potential acquisitions from cash generated from operations, borrowing from existing or new
bank credit facilities, issuance of public or privately placed debt securities, or the issuance of equity instruments.



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Forward-Looking Statements

Information included within this Form 10-Q describing the projected growth and future results and events constitutes forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results in
future periods may differ materially from the forward-looking statements because of a number of risks and uncertainties, including but not limited to fluctuations in the aerospace, power generation, general industrial and automotive cycles; the
relative success of the Companys entry into new markets; competitive pricing; the financial viability of the Companys significant customers; the availability and cost of energy, materials, supplies, and insurance; the cost of pension and
postretirement medical benefits; equipment failures; relations with the Companys employees; the Companys ability to manage its operating costs and to integrate acquired businesses in an effective manner; governmental regulations and
environmental matters; risks associated with international operations and world economies; the relative stability of certain foreign currencies; and implementation of new technologies and process improvements. Any forward-looking statements should
be considered in light of these factors. The Company undertakes no obligation to publicly release any forward-looking information to reflect anticipated or unanticipated events or circumstances after the date of this document.



|Item 3. | Quantitative and Qualitative Disclosures About Market Risk
|------- | ----------------------------------------------------------

There
have been no material changes to the Companys market risk exposure since April 1, 2007.



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|Item 4. | Controls and Procedures
|------- | -----------------------

PCC management, including the Chief
Executive Officer and Chief Financial Officer, have conducted an evaluation of the effectiveness of disclosure controls and procedures as of the end of the period covered by this report pursuant to Exchange Act Rule 13a-15(b). Based on that
evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in reports filed with the Securities and
Exchange Commission is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commissions rules and forms, and is accumulated and communicated to Company management, including its
principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. There have been no changes in internal control over financial reporting that occurred during the last fiscal quarter that
has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting.



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PART II. OTHER INFORMATION



|Item 1. | Legal Proceedings
|------- | -----------------

See Note 13, Commitments and
Contingencies in the Notes to the Condensed Consolidated Financial Statements.



|Item 1A. | Risk Factors
|-------- | ------------

There has been no material change in the
Companys reported risk factors since the filing of the Companys Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission on May 31, 2007.



|Item 2. | Unregistered Sale of Equity Securities and Use of Proceeds
|------- | ----------------------------------------------------------

None.



|Item 3. | Defaults Upon Senior Securities
|------- | -------------------------------

None.



|Item 4. | Submission of Matters to a Vote of Security Holders
|------- | ---------------------------------------------------

None.



|Item 5. | Other Information
|------- | -----------------

None.



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|Item 6. | Exhibits
|------- | --------



|     |  |                                                                                                         
|---- |  | --------------------------------------------------------------------------------------------------------
|31.1 |  | Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes- Oxley Act of 2002.
|     | 
|31.2 |  | Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes- Oxley Act of 2002.
|     | 
|32.1 |  | Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.
|     | 
|32.2 |  | Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.

SIGNATURE

Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



|                       |  |  |  |                                                                     
|---------------------- |  |  |  | --------------------------------------------------------------------
|                       |  |  |  | PRECISION CASTPARTS CORP. Registrant                                
|                       |  | 
|DATE: February 8, 2008 |  |  |  | /s/ William D. Larsson                                              
|                       |  |  |  | William D. Larsson Senior Vice President
and Chief Financial Officer
|                       |  |  |  | (Principal Financial and Accounting Officer)                        



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