UNITED STATES

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 28, 2008

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, large accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.

Large
accelerated filer  x            Accelerated filer   ̈            Non-accelerated filer   ̈            Smaller reporting company   ̈

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 28, 2009: 139,935,050

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 Income

(Unaudited)

(In millions, except per share data)



|                                                       |  |                    |         |   |          |   |         |  
|------------------------------------------------------ |  | ------------------ | ------- | - | -------- | - | ------- | -
|                                                       |  | Three Months Ended |        
|                                                       |  | 12/28/08           |         |   | 12/30/07 |  
|Net sales                                              |  | $                  | 1,614.7 |   |          | $ | 1,668.2 |  
|Cost of goods sold                                     |  |                    | 1,146.9 |   |          |   | 1,207.4 |  
|Selling and administrative expenses                    |  |                    | 93.2    |   |          |   | 88.9    |  
|Restructuring and asset impairment                     |  |                    | 11.8    |   |          |   |        |  
|Interest expense                                       |  |                    | 4.4     |   |          |   | 11.4    |  
|Interest income                                        |  |                    | (2.4    | ) |          |   | (1.3    | )
|                                                       |  |                    |         |   |          |   |         |  
|Income before income taxes and minority interest       |  |                    | 360.8   |   |          |   | 361.8   |  
|Income tax expense                                     |  |                    | 124.0   |   |          |   | 120.3   |  
|Minority interest in earnings of consolidated entities |  |                    |        |   |          |   | (0.3    | )
|                                                       |  |                    |         |   |          |   |         |  
|Net income from continuing operations                  |  |                    | 236.8   |   |          |   | 241.2   |  
|Net income from discontinued operations                |  |                    | 2.3     |   |          |   | 5.3     |  
|                                                       |  |                    |         |   |          |   |         |  
|Net income                                             |  | $                  | 239.1   |   |          | $ | 246.5   |  
|                                                       |  |                    |         |   |          |   |         |  
|Net income per common share  basic:                   |  |                    |         |   |          |   |         |  
|Net income from continuing operations                  |  | $                  | 1.70    |   |          | $ | 1.74    |  
|Net income from discontinued operations                |  |                    | 0.02    |   |          |   | 0.04    |  
|                                                       |  |                    |         |   |          |   |         |  
|                                                       |  | $                  | 1.72    |   |          | $ | 1.78    |  
|                                                       |  |                    |         |   |          |   |         |  
|Net income per common share  diluted:                 |  |                    |         |   |          |   |         |  
|Net income from continuing operations                  |  | $                  | 1.69    |   |          | $ | 1.72    |  
|Net income from discontinued operations                |  |                    | 0.01    |   |          |   | 0.04    |  
|                                                       |  |                    |         |   |          |   |         |  
|                                                       |  | $                  | 1.70    |   |          | $ | 1.76    |  
|                                                       |  |                    |         |   |          |   |         |  
|Weighted average common shares outstanding:            |  |                    |         |   |          |   |         |  
|Basic                                                  |  |                    | 139.4   |   |          |   | 138.3   |  
|Diluted                                                |  |                    | 140.3   |   |          |   | 140.4   |  

See Notes to the Condensed Consolidated Financial Statements.



2



---

Precision Castparts Corp. and Subsidiaries

Condensed Consolidated Statements of Income

(Unaudited)

(In millions, except per share data)



|                                                       |  |                   |         |   |          |   |         |  
|------------------------------------------------------ |  | ----------------- | ------- | - | -------- | - | ------- | -
|                                                       |  | Nine Months Ended |        
|                                                       |  | 12/28/08          |         |   | 12/30/07 |  
|Net sales                                              |  | $                 | 5,223.5 |   |          | $ | 4,983.5 |  
|Cost of goods sold                                     |  |                   | 3,732.6 |   |          |   | 3,624.7 |  
|Selling and administrative expenses                    |  |                   | 290.4   |   |          |   | 273.5   |  
|Restructuring and asset impairment                     |  |                   | 11.8    |   |          |   |        |  
|Interest expense                                       |  |                   | 13.9    |   |          |   | 40.4    |  
|Interest income                                        |  |                   | (6.9    | ) |          |   | (4.1    | )
|                                                       |  |                   |         |   |          |   |         |  
|Income before income taxes and minority interest       |  |                   | 1,181.7 |   |          |   | 1,049.0 |  
|Income tax expense                                     |  |                   | 406.2   |   |          |   | 353.1   |  
|Minority interest in earnings of consolidated entities |  |                   | (0.4    | ) |          |   | (0.9    | )
|                                                       |  |                   |         |   |          |   |         |  
|Net income from continuing operations                  |  |                   | 775.1   |   |          |   | 695.0   |  
|Net income from discontinued operations                |  |                   | 9.1     |   |          |   | 13.3    |  
|                                                       |  |                   |         |   |          |   |         |  
|Net income                                             |  | $                 | 784.2   |   |          | $ | 708.3   |  
|                                                       |  |                   |         |   |          |   |         |  
|Net income per common share  basic:                   |  |                   |         |   |          |   |         |  
|Net income from continuing operations                  |  | $                 | 5.56    |   |          | $ | 5.04    |  
|Net income from discontinued operations                |  |                   | 0.07    |   |          |   | 0.10    |  
|                                                       |  |                   |         |   |          |   |         |  
|                                                       |  | $                 | 5.63    |   |          | $ | 5.14    |  
|                                                       |  |                   |         |   |          |   |         |  
|Net income per common share  diluted:                 |  |                   |         |   |          |   |         |  
|Net income from continuing operations                  |  | $                 | 5.50    |   |          | $ | 4.96    |  
|Net income from discontinued operations                |  |                   | 0.07    |   |          |   | 0.10    |  
|                                                       |  |                   |         |   |          |   |         |  
|                                                       |  | $                 | 5.57    |   |          | $ | 5.06    |  
|                                                       |  |                   |         |   |          |   |         |  
|Weighted average common shares outstanding:            |  |                   |         |   |          |   |         |  
|Basic                                                  |  |                   | 139.3   |   |          |   | 137.9   |  
|Diluted                                                |  |                   | 140.8   |   |          |   | 140.1   |  

See Notes to the Condensed Consolidated Financial Statements.



3



---

Precision Castparts Corp. and Subsidiaries

Condensed Consolidated Balance Sheets

(Unaudited)

(In millions)



|                                                       |  |          |         |   |         |   |         |  
|------------------------------------------------------ |  | -------- | ------- | - | ------- | - | ------- | -
|                                                       |  | 12/28/08 |         |   | 3/30/08 |  
|ASSETS                                                 |  |          |         |   |         |   |         |  
|Current assets:                                        |  |          |         |   |         |   |         |  
|Cash and cash equivalents                              |  | $        | 276.9   |   |         | $ | 221.3   |  
|Receivables, net                                       |  |          | 896.5   |   |         |   | 1,013.3 |  
|Inventories                                            |  |          | 1,217.4 |   |         |   | 986.2   |  
|Prepaid expenses                                       |  |          | 23.1    |   |         |   | 21.6    |  
|Deferred income taxes                                  |  |          | 70.9    |   |         |   | 83.0    |  
|Discontinued operations                                |  |          | 21.2    |   |         |   | 46.9    |  
|                                                       |  |          |         |   |         |   |         |  
|Total current assets                                   |  |          | 2,506.0 |   |         |   | 2,372.3 |  
|                                                       |  |          |         |   |         |   |         |  
|Property, plant and equipment, at cost                 |  |          | 2,024.8 |   |         |   | 1,959.5 |  
|Less - accumulated depreciation                        |  |          | (890.8  | ) |         |   | (853.1  | )
|                                                       |  |          |         |   |         |   |         |  
|Net property, plant and equipment                      |  |          | 1,134.0 |   |         |   | 1,106.4 |  
|                                                       |  |          |         |   |         |   |         |  
|Goodwill                                               |  |          | 2,464.1 |   |         |   | 2,282.4 |  
|Acquired intangible assets, net                        |  |          | 114.5   |   |         |   | 55.4    |  
|Other assets                                           |  |          | 207.9   |   |         |   | 203.2   |  
|Discontinued operations                                |  |          | 22.2    |   |         |   | 30.4    |  
|                                                       |  |          |         |   |         |   |         |  
|                                                       |  | $        | 6,448.7 |   |         | $ | 6,050.1 |  
|                                                       |  |          |         |   |         |   |         |  
|LIABILITIES AND SHAREHOLDERS EQUITY                   |  |          |         |   |         |   |         |  
|Current liabilities:                                   |  |          |         |   |         |   |         |  
|Long-term debt currently due and short-term borrowings |  | $        | 52.5    |   |         | $ | 19.5    |  
|Accounts payable                                       |  |          | 596.7   |   |         |   | 679.0   |  
|Accrued liabilities                                    |  |          | 396.1   |   |         |   | 416.4   |  
|Income taxes payable                                   |  |          | 56.7    |   |         |   | 65.4    |  
|Discontinued operations                                |  |          | 14.9    |   |         |   | 24.5    |  
|                                                       |  |          |         |   |         |   |         |  
|Total current liabilities                              |  |          | 1,116.9 |   |         |   | 1,204.8 |  
|Long-term debt                                         |  |          | 259.3   |   |         |   | 334.4   |  
|Pension and other postretirement benefit obligations   |  |          | 280.7   |   |         |   | 274.5   |  
|Other long-term liabilities                            |  |          | 96.8    |   |         |   | 142.5   |  
|Deferred income taxes                                  |  |          | 79.9    |   |         |   | 45.0    |  
|Discontinued operations                                |  |          | 2.0     |   |         |   | 3.9     |  
|Commitments and contingencies (See Notes)              |  |          |         |   |         |   |         |  
|Shareholders equity:                                  |  |          |         |   |         |   |         |  
|Common stock                                           |  |          | 139.4   |   |         |   | 139.0   |  
|Paid-in capital                                        |  |          | 1,073.7 |   |         |   | 1,016.6 |  
|Retained earnings                                      |  |          | 3,645.1 |   |         |   | 2,873.4 |  
|Accumulated other comprehensive (loss) income          |  |          | (245.1  | ) |         |   | 16.0    |  
|                                                       |  |          |         |   |         |   |         |  
|Total shareholders equity                             |  |          | 4,613.1 |   |         |   | 4,045.0 |  
|                                                       |  |          |         |   |         |   |         |  
|                                                       |  | $        | 6,448.7 |   |         | $ | 6,050.1 |  
|                                                       |  |          |         |   |         |   |         |  

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 |       
|                                                                                                     |  | 12/28/08          |        |   | 12/30/07 |  
|Operating activities:                                                                                |  |                   |        |   |          |   |        |  
|Net income                                                                                           |  | $                 | 784.2  |   |          | $ | 708.3  |  
|Net income from discontinued operations                                                              |  |                   | (9.1   | ) |          |   | (13.3  | )
|Non-cash items:                                                                                      |  |                   |        |   |          |   |        |  
|Depreciation and amortization                                                                        |  |                   | 103.7  |   |          |   | 93.9   |  
|Stock-based compensation expense                                                                     |  |                   | 29.3   |   |          |   | 26.9   |  
|Deferred income taxes                                                                                |  |                   | 45.4   |   |          |   | 36.3   |  
|Excess tax benefits from share-based payment arrangements                                            |  |                   | (10.5  | ) |          |   | (38.9  | )
|Other non-cash items                                                                                 |  |                   | 2.2    |   |          |   |       |  
|Changes in assets and liabilities, excluding effects of acquisitions and dispositions of businesses: |  |                   |        |   |          |   |        |  
|Receivables                                                                                          |  |                   | 137.6  |   |          |   | (105.0 | )
|Inventories                                                                                          |  |                   | (155.7 | ) |          |   | (12.1  | )
|Other current assets                                                                                 |  |                   | 0.4    |   |          |   | 1.3    |  
|Payables, accruals and current taxes                                                                 |  |                   | (120.4 | ) |          |   | (57.4  | )
|Retirement benefit obligations                                                                       |  |                   | 11.2   |   |          |   | (38.7  | )
|Other non-current assets and liabilities                                                             |  |                   | (30.6  | ) |          |   | (32.1  | )
|Net cash provided by operating activities of discontinued operations                                 |  |                   | 6.3    |   |          |   | 6.5    |  
|                                                                                                     |  |                   |        |   |          |   |        |  
|Net cash provided by operating activities                                                            |  |                   | 794.0  |   |          |   | 575.7  |  
|                                                                                                     |  |                   |        |   |          |   |        |  
|Investing activities:                                                                                |  |                   |        |   |          |   |        |  
|Acquisitions of businesses                                                                           |  |                   | (490.7 | ) |          |   | (254.2 | )
|Capital expenditures                                                                                 |  |                   | (149.5 | ) |          |   | (152.9 | )
|Dispositions of businesses and other                                                                 |  |                   | 14.9   |   |          |   | 7.8    |  
|Net cash provided (used) by investing activities of discontinued operations                          |  |                   | 4.0    |   |          |   | (2.3   | )
|                                                                                                     |  |                   |        |   |          |   |        |  
|Net cash used by investing activities                                                                |  |                   | (621.3 | ) |          |   | (401.6 | )
|                                                                                                     |  |                   |        |   |          |   |        |  
|Financing activities:                                                                                |  |                   |        |   |          |   |        |  
|Net change in commercial paper and short-term borrowings                                             |  |                   | 2.4    |   |          |   | 149.8  |  
|Net change in long-term debt                                                                         |  |                   | (46.1  | ) |          |   | (376.1 | )
|Common stock issued                                                                                  |  |                   | 12.7   |   |          |   | 37.6   |  
|Excess tax benefits from share-based payment arrangements                                            |  |                   | 10.5   |   |          |   | 38.9   |  
|Cash dividends                                                                                       |  |                   | (12.5  | ) |          |   | (12.4  | )
|Other                                                                                                |  |                   |       |   |          |   | (2.1   | )
|Net cash used by financing activities of discontinued operations                                     |  |                   | (0.6   | ) |          |   | (0.3   | )
|                                                                                                     |  |                   |        |   |          |   |        |  
|Net cash used by financing activities                                                                |  |                   | (33.6  | ) |          |   | (164.6 | )
|                                                                                                     |  |                   |        |   |          |   |        |  
|Effect of exchange rate changes on cash and cash equivalents                                         |  |                   | (83.5  | ) |          |   | 16.6   |  
|                                                                                                     |  |                   |        |   |          |   |        |  
|Net increase in cash and cash equivalents                                                            |  |                   | 55.6   |   |          |   | 26.1   |  
|Cash and cash equivalents at beginning of period                                                     |  |                   | 221.3  |   |          |   | 150.4  |  
|                                                                                                     |  |                   |        |   |          |   |        |  
|Cash and cash equivalents at end of period                                                           |  | $                 | 276.9  |   |          | $ | 176.5  |  
|                                                                                                     |  |                   |        |   |          |   |        |  

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 28, 2008 and December 30, 2007, we recorded stock-based compensation expense under our 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 our Annual Report on Form 10-K for the year ended March 30, 2008.

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



|                                                          |  |                    |      |   |                   |   |      |          |  |   |          |   |  |   |      |  
|--------------------------------------------------------- |  | ------------------ | ---- | - | ----------------- | - | ---- | -------- |  | - | -------- | - |  | - | ---- | -
|                                                          |  | Three Months Ended |      |   | Nine Months Ended |  
|                                                          |  | 12/28/08           |      |   | 12/30/07          |   |      | 12/28/08 |  |   | 12/30/07 |  
|Cost of goods sold                                        |  | $                  | 4.4  |   |                   | $ | 3.1  |          |  | $ | 10.6     |   |  | $ | 8.0  |  
|Selling, general and administrative                       |  |                    | 7.7  |   |                   |   | 5.7  |          |  |   | 18.7     |   |  |   | 18.9 |  
|                                                          |  |                    |      |   |                   |   |      |          |  |   |          |   |  |   |      |  
|Stock-based compensation expense before income taxes      |  |                    | 12.1 |   |                   |   | 8.8  |          |  |   | 29.3     |   |  |   | 26.9 |  
|Income tax benefit                                        |  |                    | (3.7 | ) |                   |   | (2.7 | )        |  |   | (8.7     | ) |  |   | (8.4 | )
|                                                          |  |                    |      |   |                   |   |      |          |  |   |          |   |  |   |      |  
|Total stock-based compensation expense after income taxes |  | $                  | 8.4  |   |                   | $ | 6.1  |          |  | $ | 20.6     |   |  | $ | 18.5 |  
|                                                          |  |                    |      |   |                   |   |      |          |  |   |          |   |  |   |      |  



6



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|(3) | Business Acquisitions
|--- | ---------------------

Fiscal 2009

In the third quarter of fiscal 2009, we acquired the following three entities for a total cost of approximately $469.5 million, which was primarily paid in cash. These
transactions resulted in $343.5 million of goodwill (of which $215.9 million is deductible for tax purposes) and other intangible assets. The impact of these acquisitions was not material to our consolidated results of operations; consequently, pro
forma information has not been included. As of December 28, 2008, the purchase price allocations are subject to further refinement as analyses are completed, including the valuation of intangible assets.

On December 4, 2008, we acquired Hackney Ladish Holding Corp. (Hackney Ladish), a leading producer of forged pipe fittings for critical energy
infrastructure and related applications. With more than 80 years of experience manufacturing pipe fittings, Hackney Ladish offers the widest range of product types and sizes in the industry. Fittings are used in piping systems throughout
the energy value chain, from drilling through processing and storage. Hackney Ladishs products connect pipe, change the direction of flow, increase or reduce pipe sizes, join or separate flow, or cap pipe ends. Headquartered in
Dallas, Texas, Hackney Ladish operates manufacturing facilities in Russellville, Arkansas and Enid, Oklahoma. The Hackney Ladish acquisition is a stock purchase for tax purposes and operates as part of the Forged Products segment.

On November 21, 2008, we acquired Fatigue Technology, Inc. (FTI), headquartered in Seattle, Washington. FTI pioneered the cold expansion process in
1969 and is the technology leader in fatigue life extension for both metal and composite airframe fastener holes. The FTI acquisition is an asset purchase for tax purposes and operates as part of the Fastener Products segment.

On September 30, 2008, we acquired Airdrome Holdings, LLC (Airdrome), which consists of Airdrome Precision Components (APC) and AF Aerospace
Ltd. (AFA). APC, located in Long Beach, California, is a leading supplier of hydraulic and pneumatic fluid fittings primarily for airframe applications. AFA, located in Rugby, England, manufactures a variety of machined components for
aerospace applications, including fittings and other fluid conveyance products, ultra-high tensile bolts, and machined details. Fluid fittings, manufactured in nickel, titanium, and stainless steel alloys, are the critical connectors for hoses
transporting fuel, hydraulic fluid, and pneumatic pressure throughout an aircraft. The Airdrome acquisition is an asset purchase for tax purposes and operates as part of the Fastener Products segment.

Fiscal 2008

On July 5, 2007, we acquired Caledonian Alloys
Group Limited (Caledonian) for approximately $208.1 million in cash, of which $165.1 million was paid at close, and $21.2 million was paid in the second quarter of fiscal 2009. We expect to pay one additional contingent payment of
approximately $21.2 million in the second quarter of fiscal 2010. 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. The acquisition of Caledonian provides us with the infrastructure and
capabilities needed to create a closed loop system for the retention and reuse of internally-generated revert. In addition, Caledonian provides access to new sources of material outside the Company and helps determine optimal utilization of revert
streams throughout our melting operations worldwide. Headquartered in Livingston, Scotland, Caledonian employs approximately 300 people and operates nine revert processing facilities in six countries as of the date of acquisition. The Caledonian
acquisition is a stock purchase for tax purposes and operates as part of the Forged Products segment. This transaction resulted in $154.8 million of goodwill (which is not deductible for tax purposes) and other intangibles. The impact of this
acquisition was not material to our consolidated results of operations; consequently, pro forma information has not been included.



7



---

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

In the third quarter of fiscal 2009, we
decided to dispose of two automotive fastener operations. The decision to discontinue these automotive fastener operations resulted from their non-core nature coupled with further erosion in the automotive market. These operations have been
reclassified from the Fasteners Products segment to discontinued operations in the third quarter of fiscal 2009.

In the first quarter of fiscal 2009, we
sold the stock of our Technova entities, a foreign operation held for sale and previously recorded as discontinued from our former Flow Technologies pumps and valves business. The transaction resulted in a gain of approximately $3.0 million.

In the fourth quarter of fiscal 2008, we entered into an agreement to sell the Unbrako fastener business headquartered in Shannon, Ireland. The sale was
completed in the second quarter of fiscal 2009, resulting in a gain of approximately $3.5 million. Unbrako was reclassified from the Fastener Products segment to discontinued operations in the fourth quarter of fiscal 2008.

Also in the fourth quarter of fiscal 2008, we decided to sell the Kladno alloy manufacturing business located in the Czech Republic. Kladno primarily supplied steel
ingots to Wyman-Gordons Grafton, Massachusetts operation. Kladno was reclassified from the Forged Products segment to discontinued operations in the fourth quarter of fiscal 2008 and continues to be marketed.

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 our Condensed Consolidated Statements of Income 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.

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



|                                                                                           |  |                    |      |   |                   |   |      |          |  |   |          |   |  |   |       |  
|------------------------------------------------------------------------------------------ |  | ------------------ | ---- | - | ----------------- | - | ---- | -------- |  | - | -------- | - |  | - | ----- | -
|                                                                                           |  | Three Months Ended |      |   | Nine Months Ended |  
|                                                                                           |  | 12/28/08           |      |   | 12/30/07          |   |      | 12/28/08 |  |   | 12/30/07 |  
|Net sales                                                                                  |  | $                  | 18.0 |   |                   | $ | 41.6 |          |  | $ | 76.1     |   |  | $ | 138.5 |  
|Cost of goods sold                                                                         |  |                    | 17.7 |   |                   |   | 35.8 |          |  |   | 74.2     |   |  |   | 113.4 |  
|Selling and administrative expenses                                                        |  |                    | 1.0  |   |                   |   | 3.4  |          |  |   | 1.6      |   |  |   | 9.6   |  
|Interest income                                                                            |  |                    |     |   |                   |   | (0.1 | )        |  |   | (0.1     | ) |  |   | (0.1  | )
|                                                                                           |  |                    |      |   |                   |   |      |          |  |   |          |   |  |   |       |  
|(Loss) income from operations before income taxes                                          |  |                    | (0.7 | ) |                   |   | 2.5  |          |  |   | 0.4      |   |  |   | 15.6  |  
|Income tax (benefit) expense                                                               |  |                    | (0.4 | ) |                   |   | 0.9  |          |  |   | 0.8      |   |  |   | 5.4   |  
|                                                                                           |  |                    |      |   |                   |   |      |          |  |   |          |   |  |   |       |  
|Net (loss) income from operations                                                          |  |                    | (0.3 | ) |                   |   | 1.6  |          |  |   | (0.4     | ) |  |   | 10.2  |  
|Gain on disposal, net of $(0.3), $4.2, $(0.6) and $4.4 tax (expense) benefit, respectively |  |                    | 2.6  |   |                   |   | 3.7  |          |  |   | 9.5      |   |  |   | 3.1   |  
|                                                                                           |  |                    |      |   |                   |   |      |          |  |   |          |   |  |   |       |  
|Net income from discontinued operations                                                    |  | $                  | 2.3  |   |                   | $ | 5.3  |          |  | $ | 9.1      |   |  | $ | 13.3  |  
|                                                                                           |  |                    |      |   |                   |   |      |          |  |   |          |   |  |   |       |  



8



---

Included in our 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:



|                                       |  |          |      |         |   |     
|-------------------------------------- |  | -------- | ---- | ------- | - | ----
|                                       |  | 12/28/08 |      | 3/30/08
|Assets of discontinued operations      |  |          |      |         |   |     
|Current assets                         |  | $        | 21.2 |         | $ | 46.9
|Net property, plant and equipment      |  |          | 20.3 |         |   | 29.8
|Other assets                           |  |          | 1.9  |         |   | 0.6 
|                                       |  |          |      |         |   |     
|                                       |  | $        | 43.4 |         | $ | 77.3
|                                       |  |          |      |         |   |     
|Liabilities of discontinued operations |  |          |      |         |   |     
|Long term debt currently due           |  | $        | 0.5  |         | $ | 0.6 
|Other current liabilities              |  |          | 14.4 |         |   | 23.9
|Long term debt                         |  |          |     |         |   | 0.5 
|Other liabilities                      |  |          | 2.0  |         |   | 3.4 
|                                       |  |          |      |         |   |     
|                                       |  | $        | 16.9 |         | $ | 28.4
|                                       |  |          |      |         |   |     



|(5) | Inventories
|--- | -----------

Inventories consisted of the following:



|                           |  |          |         |         |   |         |  
|-------------------------- |  | -------- | ------- | ------- | - | ------- | -
|                           |  | 12/28/08 |         | 3/30/08 |  
|Finished goods             |  | $        | 292.5   |         | $ | 236.2   |  
|Work-in-process            |  |          | 547.3   |         |   | 540.3   |  
|Raw materials and supplies |  |          | 344.9   |         |   | 263.8   |  
|                           |  |          |         |         |   |         |  
|                           |  |          | 1,184.7 |         |   | 1,040.3 |  
|LIFO provision             |  |          | 32.7    |         |   | (54.1   | )
|                           |  |          |         |         |   |         |  
|Total inventory            |  | $        | 1,217.4 |         | $ | 986.2   |  
|                           |  |          |         |         |   |         |  



|(6) | Goodwill and Acquired Intangibles
|--- | ---------------------------------

We perform our annual goodwill
assessment test during the second quarter of each fiscal year. For fiscal 2009, 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 other than the change in the reporting units within the Fasteners operating segment as discussed
in our Critical Accounting Policies.

The changes in the carrying amount of goodwill by reportable segment for the nine months ended December 28,
2008, were as follows:



|                         |  |                   |         |          |   |                               |  |   |                    |   |  |   |        
|------------------------ |  | ----------------- | ------- | -------- | - | ----------------------------- |  | - | ------------------ | - |  | - | -------
|                         |  | Balance at3/30/08 |         | Acquired |   | CurrencyTranslationand Other* |  |   | Balance at12/28/08
|Investment Cast Products |  | $                 | 349.1   |          | $ |                              |  | $ | (6.4               | ) |  | $ | 342.7  
|Forged Products          |  |                   | 884.4   |          |   | 105.5                         |  |   | (126.7             | ) |  |   | 863.2  
|Fastener Products        |  |                   | 1,048.9 |          |   | 211.2                         |  |   | (1.9               | ) |  |   | 1,258.2
|                         |  |                   |         |          |   |                               |  |   |                    |   |  |   |        
|Total                    |  | $                 | 2,282.4 |          | $ | 316.7                         |  | $ | (135.0             | ) |  | $ | 2,464.1
|                         |  |                   |         |          |   |                               |  |   |                    |   |  |   |        



|* | Includes final purchase price allocations of Caledonian and McWilliams Forge Company acquisitions, which increased acquired intangibles and decreased goodwill.
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------



9



---

The gross carrying amount and accumulated amortization of our acquired intangible assets were as follows:



|                                 |  |                     |      |                         |   |                     |  |                         |      |  |   |    
|-------------------------------- |  | ------------------- | ---- | ----------------------- | - | ------------------- |  | ----------------------- | ---- |  | - | ---
|                                 |  | 12/28/08            |      | 3/30/08                
|                                 |  | GrossCarryingAmount |      | AccumulatedAmortization |   | GrossCarryingAmount |  | AccumulatedAmortization
|Patents                          |  | $                   | 10.3 |                         | $ | 4.1                 |  | $                       | 9.7  |  | $ | 3.3
|Proprietary technology           |  |                     | 2.3  |                         |   | 0.8                 |  |                         | 2.3  |  |   | 0.7
|Tradenames                       |  |                     | 2.9  |                         |   | 0.4                 |  |                         | 0.5  |  |   | 0.3
|Long-term customer relationships |  |                     | 20.5 |                         |   | 2.4                 |  |                         | 9.4  |  |   | 0.5
|Backlog                          |  |                     | 6.5  |                         |   | 4.7                 |  |                         | 2.7  |  |   | 1.7
|                                 |  |                     |      |                         |   |                     |  |                         |      |  |   |    
|                                 |  | $                   | 42.5 |                         | $ | 12.4                |  | $                       | 24.6 |  | $ | 6.5
|                                 |  |                     |      |                         |   |                     |  |                         |      |  |   |    
|Unamortized intangible assets:   |  |                     |      |                         |   |                     |  |                         |      |  |   |    
|Tradenames                       |  | $                   | 84.4 |                         |   |                     |  | $                       | 37.3 |  |   |    
|                                 |  |                     |      |                         |   |                     |  |                         |      |  |   |    

Amortization expense for acquired intangible assets for the three and nine months ended December 28, 2008 was
$2.2 million and $5.9 million, respectively. 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 related to finite-lived
intangible assets is projected to total $8.5 million for fiscal 2009. Projected amortization expense for the succeeding five fiscal years is as follows:



|            |  |                              |    
|----------- |  | ---------------------------- | ---
|Fiscal Year |  | EstimatedAmortizationExpense
|2010        |  | $                            | 6.8
|2011        |  |                              | 5.9
|2012        |  |                              | 4.8
|2013        |  |                              | 4.1
|2014        |  |                              | 2.7

The amortization could change in future periods if other intangible assets are acquired, existing intangibles are
disposed or impairments are recognized.



|(7) | Guarantees
|--- | ----------

In the ordinary course of business, we generally
warrant that our products will conform to our customers specifications over various time periods. The warranty accrual as of December 28, 2008 and March 30, 2008 is immaterial to our financial position, and the change in the accrual
for the current quarter is immaterial to our results of operations and cash flows.

In conjunction with certain transactions, primarily divestitures, we
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, we have not historically made significant payments for these indemnifications.



10



---

|(8) | Earnings per share
|--- | ------------------

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



|                                                        |  |                   |  |                  |  |          |  |         
|------------------------------------------------------- |  | ----------------- |  | ---------------- |  | -------- |  | --------
|                                                        |  | Three MonthsEnded |  | Nine MonthsEnded
|                                                        |  | 12/28/08          |  | 12/30/07         |  | 12/28/08 |  | 12/30/07
|Basic weighted average shares outstanding               |  | 139.4             |  | 138.3            |  | 139.3    |  | 137.9   
|Dilutive stock options and employee stock purchase plan |  | 0.9               |  | 2.1              |  | 1.5      |  | 2.2     
|                                                        |  |                   |  |                  |  |          |  |         
|Average shares outstanding assuming dilution            |  | 140.3             |  | 140.4            |  | 140.8    |  | 140.1   
|                                                        |  |                   |  |                  |  |          |  |         

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 28, 2008, stock options to purchase 3.3 million shares and 1.2 million shares of common stock, respectively,
were not dilutive. For the three and nine months ended December 30, 2007, stock options to purchase 0.6 million and 0.2 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.



|(9) | Comprehensive Income
|--- | --------------------

Total comprehensive income consisted of the
following:



|                                                                                                                                                          |  |                    |        |   |                   |   |       |          |  |   |          |   |  |   |       |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------ | ------ | - | ----------------- | - | ----- | -------- |  | - | -------- | - |  | - | ----- | -
|                                                                                                                                                          |  | Three Months Ended |        |   | Nine Months Ended |  
|                                                                                                                                                          |  | 12/28/08           |        |   | 12/30/07          |   |       | 12/28/08 |  |   | 12/30/07 |  
|Net income                                                                                                                                                |  | $                  | 239.1  |   |                   | $ | 246.5 |          |  | $ | 784.2    |   |  | $ | 708.3 |  
|Other comprehensive (loss) income, net of tax:                                                                                                            |  |                    |        |   |                   |   |       |          |  |   |          |   |  |   |       |  
|Unrealized translation adjustments                                                                                                                        |  |                    | (167.2 | ) |                   |   | (0.4  | )        |  |   | (255.2   | ) |  |   | 33.1  |  
|Pension and postretirement obligations                                                                                                                    |  |                    | 0.3    |   |                   |   |      |          |  |   | 2.1      |   |  |   |      |  
|Unrealized (loss) gain on derivatives:                                                                                                                    |  |                    |        |   |                   |   |       |          |  |   |          |   |  |   |       |  
|Periodic revaluations (net of income tax benefit of $4.0, $0.7, $2.4 and $0.9, respectively)                                                              |  |                    | (9.1   | ) |                   |   | (2.0  | )        |  |   | (5.0     | ) |  |   | (2.6  | )
|Reclassification to net income of previously deferred (losses) gains (net of income tax (benefit) expense of $(0.6), $0.1, $(2.0) and $0.2,
respectively) |  |                    | (1.2   | ) |                   |   |      |          |  |   | (3.0     | ) |  |   | 0.5   |  
|                                                                                                                                                          |  |                    |        |   |                   |   |       |          |  |   |          |   |  |   |       |  
|Other comprehensive (loss) income                                                                                                                         |  |                    | (177.2 | ) |                   |   | (2.4  | )        |  |   | (261.1   | ) |  |   | 31.0  |  
|                                                                                                                                                          |  |                    |        |   |                   |   |       |          |  |   |          |   |  |   |       |  
|Total comprehensive income                                                                                                                                |  | $                  | 61.9   |   |                   | $ | 244.1 |          |  | $ | 523.1    |   |  | $ | 739.3 |  
|                                                                                                                                                          |  |                    |        |   |                   |   |       |          |  |   |          |   |  |   |       |  

Accumulated other comprehensive (loss) income consisted of the following:



|                                                                  |  |          |        |   |         |   |        |  
|----------------------------------------------------------------- |  | -------- | ------ | - | ------- | - | ------ | -
|                                                                  |  | 12/28/08 |        |   | 3/30/08 |  
|Cumulative unrealized foreign currency translation (losses) gains |  | $        | (97.3  | ) |         | $ | 157.9  |  
|Pension and postretirement obligations                            |  |          | (136.2 | ) |         |   | (138.3 | )
|Unrealized loss on derivatives                                    |  |          | (11.6  | ) |         |   | (3.6   | )
|                                                                  |  |          |        |   |         |   |        |  
|Accumulated other comprehensive (loss) income                     |  | $        | (245.1 | ) |         | $ | 16.0   |  
|                                                                  |  |          |        |   |         |   |        |  



11



---

|(10) | Fair Value Measurements
|---- | -----------------------

On March 31, 2008, we adopted SFAS
No. 157, Fair Value Measurements (SFAS No. 157), as it relates to financial assets and financial liabilities. SFAS No. 157 defines fair value, establishes a framework for measuring fair value in accordance with
generally accepted accounting principles, and expands disclosures about fair value measurements. In February 2008, the Financial Accounting Standards Board (FASB) issued FSP No. 157-2, Effective Date of FASB Statement
No. 157, which delayed the effective date of SFAS No. 157 for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at
least annually). The adoption of SFAS No. 157 as it relates to financial assets and financial liabilities did not have a material impact on our consolidated financial position, results of operations or cash flows.

SFAS No. 157 defines fair value as the exchange price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or
most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. SFAS No. 157 also establishes a fair value hierarchy which requires an entity to maximize the use of observable
inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:



|        |  |                                                                                                                                                                                                                                                                                                       
|------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        | 
|Level 1 |  | Quoted prices in active markets for identical assets or liabilities.                                                                                                                                                                                                                                  
|        | 
|Level 2 |  | Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be
corroborated by observable market data for substantially the full term of the assets or liabilities.
|        | 
|Level 3 |  | Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.                                                                                                                                                       

Assets and liabilities measured at fair value on a recurring basis



|                     |  |                               |   |         |   |         |  |                                 |   |  |   |     
|-------------------- |  | ----------------------------- | - | ------- | - | ------- |  | ------------------------------- | - |  | - | ----
|December 28, 2008   
|                     |  | Fair Value Measurements Using |   |        
|(in millions)        |  | Level 1                       |   | Level 2 |   | Level 3 |  | Assets/Liabilitiesat Fair Value
|Assets:              |  |                               |   |         |   |         |  |                                 |   |  |   |     
|Derivative contracts |  | $                             |  |         | $ | 2.4     |  | $                               |  |  | $ | 2.4 
|Liabilities:         |  |                               |   |         |   |         |  |                                 |   |  |   |     
|Derivative contracts |  | $                             |  |         | $ | 18.6    |  | $                               |  |  | $ | 18.6
|                     |  |                               |   |         |   |         |  |                                 |   |  |   |     

Derivative contracts consist of foreign currency forward contracts accounted for as either cash flow hedges or
fair value hedges. Cash flow hedges are used to hedge the variability in cash flows from forecasted receipts or expenditures denominated in currencies other than the functional currency. Fair value hedges are used to hedge against the risk of change
in the fair value of sales and purchase commitments denominated in foreign currencies attributable to fluctuations in exchange rates.

Derivative
contracts value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data. There were no changes in our valuation techniques used to measure
assets and liabilities at fair value on a recurring basis.

We believe that there is no significant credit risk associated with the potential
non-performance of any counterparty to perform under the terms of any derivative financial instrument.



12



---

On March 31, 2008, we adopted SFAS No. 159, The Fair Value Option for Financial Assets and Financial
Liabilities. SFAS No. 159 permits entities to elect to measure eligible financial instruments at fair value on an instrument-by-instrument basis. The adoption of SFAS No. 159 had no impact on our consolidated financial position,
results of operations or cash flows as we did not elect to measure any eligible financial instruments at fair value under this guidance.



|(11) | Pensions and Other Postretirement Benefit Plans
|---- | -----------------------------------------------

We sponsor many
domestic and foreign defined benefit pension plans. In addition, we offer postretirement medical benefits for certain eligible employees. These plans are more fully described in the Notes to the Consolidated Financial Statements included
in our Annual Report on Form 10-K for the year ended March 30, 2008.

The net periodic benefit cost for our pension plans consisted of the following
components:



|                                   |  |                    |       |   |                   |   |       |          |  |   |          |   |  |   |       |  
|---------------------------------- |  | ------------------ | ----- | - | ----------------- | - | ----- | -------- |  | - | -------- | - |  | - | ----- | -
|                                   |  | Three Months Ended |       |   | Nine Months Ended |  
|                                   |  | 12/28/08           |       |   | 12/30/07          |   |       | 12/28/08 |  |   | 12/30/07 |  
|Service cost                       |  | $                  | 9.2   |   |                   | $ | 9.1   |          |  | $ | 29.6     |   |  | $ | 27.7  |  
|Interest cost                      |  |                    | 22.4  |   |                   |   | 19.7  |          |  |   | 72.3     |   |  |   | 60.1  |  
|Expected return on plan assets     |  |                    | (27.7 | ) |                   |   | (25.2 | )        |  |   | (89.4    | ) |  |   | (76.6 | )
|Recognized net actuarial loss      |  |                    | 0.2   |   |                   |   | 3.0   |          |  |   | 2.9      |   |  |   | 9.1   |  
|Amortization of prior service cost |  |                    | 1.7   |   |                   |   | 0.8   |          |  |   | 4.4      |   |  |   | 2.4   |  
|                                   |  |                    |       |   |                   |   |       |          |  |   |          |   |  |   |       |  
|Net periodic benefit cost          |  | $                  | 5.8   |   |                   | $ | 7.4   |          |  | $ | 19.8     |   |  | $ | 22.7  |  
|                                   |  |                    |       |   |                   |   |       |          |  |   |          |   |  |   |       |  

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



|                                   |  |                    |     |          |                   |      |          |  |          |     |  |   |      |  
|---------------------------------- |  | ------------------ | --- | -------- | ----------------- | ---- | -------- |  | -------- | --- |  | - | ---- | -
|                                   |  | Three Months Ended |     |          | Nine Months Ended |     
|                                   |  | 12/28/08           |     | 12/30/07 |                   |      | 12/28/08 |  | 12/30/07 |    
|Service cost                       |  | $                  | 0.4 |          | $                 | 0.4  |          |  | $        | 1.2 |  | $ | 1.2  |  
|Interest cost                      |  |                    | 2.1 |          |                   | 2.0  |          |  |          | 6.3 |  |   | 5.8  |  
|Recognized net actuarial loss      |  |                    | 0.2 |          |                   |     |          |  |          | 0.3 |  |   |     |  
|Amortization of prior service cost |  |                    |    |          |                   | (0.1 | )        |  |          | 0.1 |  |   | (0.3 | )
|                                   |  |                    |     |          |                   |      |          |  |          |     |  |   |      |  
|Net periodic benefit cost          |  | $                  | 2.7 |          | $                 | 2.3  |          |  | $        | 7.9 |  | $ | 6.7  |  
|                                   |  |                    |     |          |                   |      |          |  |          |     |  |   |      |  

We made contributions to the defined benefit pension plans of $2.9 million and $10.6 million for the three and
nine month periods ended December 28, 2008, respectively. Projected contributions are expected to total approximately $26.5 million for fiscal year 2009, of which $11.0 million will be voluntary.



|(12) | Commitments and contingencies
|---- | -----------------------------

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



13



---

|(13) | New Accounting Pronouncements
|---- | -----------------------------

In October 2008, the FASB issued FSP
No. FAS 157-3, Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active (FSP No. FAS 157-3). This FSP clarifies the application of SFAS No. 157 as it relates to the valuation of
financial assets in a market that is not active for those financial assets. This FSP is effective immediately and includes prior periods for which financial statements have not been issued. We currently do not hold any financial assets subject to
measurement under SFAS No. 157 for which there is an inactive market, and as such there is no impact on our consolidated financial position, results of operations or cash flows.

In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles (SFAS No. 162). SFAS No. 162 identifies the sources of accounting principles
and establishes the framework for selecting the principles used in the preparation of financial statements that are presented in conformity with Generally Accepted Accounting Principles (GAAP). SFAS No. 162 will be effective 60 days
following the SECs approval of the Public Company Accounting Oversight Board (PCAOB) amendments to AU Section 411, The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles. The
adoption will not have a material impact on our consolidated financial position, results of operations or cash flows.

In April 2008, the FASB issued FSP
No. FAS 142-3, Determination of the Useful Life of Intangible Assets (FSP No. FAS 142-3). This FSP amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life
of a recognized intangible asset under SFAS No. 142, Goodwill and Other Intangible Assets (SFAS 142). The objective of this FSP is to improve the consistency between the useful life of a recognized intangible asset under
SFAS 142 and the period of expected cash flows used to measure the fair value of the asset under SFAS No. 141(Revised), Business Combinations (SFAS No. 141(R)) and other U.S. GAAP. This FSP is effective for periods
beginning in the first quarter of fiscal 2010, and will be applied prospectively to intangible assets acquired after the effective date.

On March 19,
2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities-an amendment of FASB Statement No. 133 (SFAS No. 161). This new standard requires enhanced disclosures for
derivative instruments, including those used in hedging activities. SFAS No. 161 is effective for periods beginning in the fourth quarter of fiscal 2009. The adoption of SFAS No. 161 will not have a material impact on our consolidated
financial position, results of operations or cash flows.

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. 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, including expensing acquisition costs as incurred, 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 business combinations for which the
acquisition date is on or after the beginning of our fiscal year 2010. We are currently evaluating the impact of the adoption of SFAS No. 141(R) and SFAS No. 160 on our consolidated financial position, results of operations and cash flows.

On April 1, 2007, we adopted SFAS No. 158, Employers Accounting for Defined Benefit Pension and Other Postretirement Plans  an
amendment of FASB Statements No. 87, 88, 106 and 132(R) (SFAS No. 158), which required that our Consolidated Balance Sheets reflect the funded status of the pension and postretirement plans. We have historically used
a December 31 measurement date for our pension and postretirement plans. Effective for our fiscal year 2009, SFAS No. 158 will require us to measure plan assets and obligations as of March 29, 2009, the end of our fiscal year,
eliminating the option in SFAS No. 87, Employers Accounting for Pensions and SFAS No. 106 Employers Accounting for Postretirement Benefits Other Than Pensions, to measure up to three months prior to the
financial statement date.



14



---

|(14) | Restructuring, asset impairment and other non-recurring charges
|---- | ---------------------------------------------------------------

In
the third quarter of fiscal 2009, we incurred restructuring and impairment charges of $11.8 million pursuant to plans to downsize operations across all segments. We had been gearing up for aerospace growth into fiscal 2010, whereas future
demand now appears to be flattening out, particularly in the casting and forging aerospace markets. The charges consisted of $9.2 million for employee severance expenses and $2.6 million for impairments and relocation expenses related to long
lived assets. These restructuring plans provide for terminations of approximately 550 employees in the third and fourth quarters of fiscal 2009. The restructuring and impairment charges recorded by the Investment Cast Products segment, Forged
Products segment and Fastener Products segment were $4.9 million, $4.9 million and $2.0 million, respectively, during the three and nine month periods ended December 28, 2008. As of December 28, 2008, $9.2 million remained in accrued
liabilities related to the restructuring plans.



15



---

|(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, our operations are classified into three reportable business segments: Investment
Cast Products, Forged Products and Fastener Products. The Investment Cast Products and Forged Products segments are comprised of more than one operating segments, which are aggregated in accordance with paragraph 17 of SFAS No. 131 in our
determination of reportable segments.



|                                                              |  |                    |         |   |          |   |         |  
|------------------------------------------------------------- |  | ------------------ | ------- | - | -------- | - | ------- | -
|                                                              |  | Three Months Ended |        
|                                                              |  | 12/28/08           |         |   | 12/30/07 |  
|Net sales:                                                    |  |                    |         |   |          |   |         |  
|Investment Cast Products                                      |  | $                  | 541.5   |   |          | $ | 540.9   |  
|Forged Products                                               |  |                    | 702.8   |   |          |   | 771.6   |  
|Fastener Products                                             |  |                    | 370.4   |   |          |   | 355.7   |  
|                                                              |  |                    |         |   |          |   |         |  
|Consolidated net sales                                        |  | $                  | 1,614.7 |   |          | $ | 1,668.2 |  
|                                                              |  |                    |         |   |          |   |         |  
|Intersegment sales1:                                          |  |                    |         |   |          |   |         |  
|Investment Cast Products                                      |  | $                  | 5.4     |   |          | $ | 7.0     |  
|Forged Products                                               |  |                    | 24.0    |   |          |   | 12.0    |  
|Fastener Products                                             |  |                    | 1.0     |   |          |   | 0.2     |  
|                                                              |  |                    |         |   |          |   |         |  
|Total intersegment sales                                      |  | $                  | 30.4    |   |          | $ | 19.2    |  
|                                                              |  |                    |         |   |          |   |         |  
|Segment operating income (loss):                              |  |                    |         |   |          |   |         |  
|Investment Cast Products                                      |  | $                  | 135.8   |   |          | $ | 131.6   |  
|Forged Products                                               |  |                    | 154.8   |   |          |   | 169.1   |  
|Fastener Products                                             |  |                    | 109.4   |   |          |   | 96.7    |  
|Corporate expense                                             |  |                    | (25.4   | ) |          |   | (25.5   | )
|                                                              |  |                    |         |   |          |   |         |  
|Total segment operating income                                |  |                    | 374.6   |   |          |   | 371.9   |  
|Restructuring and asset impairment                            |  |                    | 11.8    |   |          |   |        |  
|Interest expense                                              |  |                    | 4.4     |   |          |   | 11.4    |  
|Interest income                                               |  |                    | (2.4    | ) |          |   | (1.3    | )
|                                                              |  |                    |         |   |          |   |         |  
|Consolidated income before income taxes and minority interest |  | $                  | 360.8   |   |          | $ | 361.8   |  
|                                                              |  |                    |         |   |          |   |         |  



|1 | Intersegment sales consist of sales between reportable segments.
|- | ----------------------------------------------------------------



16



---

|                                                              |  |                   |         |   |          |   |         |  
|------------------------------------------------------------- |  | ----------------- | ------- | - | -------- | - | ------- | -
|                                                              |  | Nine Months Ended |        
|                                                              |  | 12/28/08          |         |   | 12/30/07 |  
|Net sales:                                                    |  |                   |         |   |          |   |         |  
|Investment Cast Products                                      |  | $                 | 1,751.2 |   |          | $ | 1,581.4 |  
|Forged Products                                               |  |                   | 2,300.4 |   |          |   | 2,358.1 |  
|Fastener Products                                             |  |                   | 1,171.9 |   |          |   | 1,044.0 |  
|                                                              |  |                   |         |   |          |   |         |  
|Consolidated net sales                                        |  | $                 | 5,223.5 |   |          | $ | 4,983.5 |  
|                                                              |  |                   |         |   |          |   |         |  
|Intersegment sales1:                                          |  |                   |         |   |          |   |         |  
|Investment Cast Products                                      |  | $                 | 18.7    |   |          | $ | 21.9    |  
|Forged Products                                               |  |                   | 44.6    |   |          |   | 24.1    |  
|Fastener Products                                             |  |                   | 2.5     |   |          |   | 1.7     |  
|                                                              |  |                   |         |   |          |   |         |  
|Total intersegment sales                                      |  | $                 | 65.8    |   |          | $ | 47.7    |  
|                                                              |  |                   |         |   |          |   |         |  
|Segment operating income (loss):                              |  |                   |         |   |          |   |         |  
|Investment Cast Products                                      |  | $                 | 442.9   |   |          | $ | 376.8   |  
|Forged Products                                               |  |                   | 490.7   |   |          |   | 515.0   |  
|Fastener Products                                             |  |                   | 340.5   |   |          |   | 267.8   |  
|Corporate expense                                             |  |                   | (73.6   | ) |          |   | (74.3   | )
|                                                              |  |                   |         |   |          |   |         |  
|Total segment operating income                                |  |                   | 1,200.5 |   |          |   | 1,085.3 |  
|Restructuring and asset impairment                            |  |                   | 11.8    |   |          |   |        |  
|Interest expense                                              |  |                   | 13.9    |   |          |   | 40.4    |  
|Interest income                                               |  |                   | (6.9    | ) |          |   | (4.1    | )
|                                                              |  |                   |         |   |          |   |         |  
|Consolidated income before income taxes and minority interest |  | $                 | 1,181.7 |   |          | $ | 1,049.0 |  
|                                                              |  |                   |         |   |          |   |         |  



|1 | Intersegment sales consist of sales between reportable segments.
|- | ----------------------------------------------------------------



17



---

|(16) | Condensed Consolidating Financial Information
|---- | ---------------------------------------------

Certain of our
subsidiaries guarantee our registered securities consisting of $200 million 5.6% Senior Notes due 2013, as well as our private notes, bank credit facilities and commercial paper (CP). The following condensed consolidating financial
statements present, 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 28,
2008 and March 30, 2008, statements of income for the three and nine months ended December 28, 2008 and December 30, 2007 and statements of cash flows for the nine months ended December 28, 2008 and December 30, 2007. 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 our 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 100% owned and
the guarantees are full and unconditional, joint and several.



18



---

Condensed Consolidating Statements of Income

Three Months Ended December 28, 2008

(Unaudited)



|                                                      |  |                         |        |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |        
|----------------------------------------------------- |  | ----------------------- | ------ | - | --------------------- | - | ------- | ------------------------- |  | - | ------------ | - |  | ----- | ------ | - |  | - | -------
|                                                      |  | PrecisionCastpartsCorp. |        |   | GuarantorSubsidiaries |   |         | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | Total
|Net sales                                             |  | $                       |       |   |                       | $ | 1,349.6 |                           |  | $ | 335.4        |   |  | $     | (70.3  | ) |  | $ | 1,614.7
|Cost of goods sold                                    |  |                         | 4.4    |   |                       |   | 958.9   |                           |  |   | 253.9        |   |  |       | (70.3  | ) |  |   | 1,146.9
|Selling and administrative expenses                   |  |                         | 20.9   |   |                       |   | 52.8    |                           |  |   | 19.5         |   |  |       |       |   |  |   | 93.2   
|Restructuring and asset impairment                    |  |                         |       |   |                       |   | 8.4     |                           |  |   | 3.4          |   |  |       |       |   |  |   | 11.8   
|Other (income) expense                                |  |                         | (0.4   | ) |                       |   | (2.6    | )                         |  |   | 3.0          |   |  |       |       |   |  |   |       
|Interest (income) expense, net                        |  |                         | (18.0  | ) |                       |   | 20.7    |                           |  |   | (0.7         | ) |  |       |       |   |  |   | 2.0    
|Equity in earnings of subsidiaries                    |  |                         | (254.7 | ) |                       |   | (7.4    | )                         |  |   |             |   |  |       | 262.1  |   |  |   |       
|                                                      |  |                         |        |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |        
|Income (loss) before income tax and minority interest |  |                         | 247.8  |   |                       |   | 318.8   |                           |  |   | 56.3         |   |  |       | (262.1 | ) |  |   | 360.8  
|Income tax expense (benefit)                          |  |                         | 8.7    |   |                       |   | 103.3   |                           |  |   | 12.0         |   |  |       |       |   |  |   | 124.0  
|Minority interest                                     |  |                         |       |   |                       |   |        |                           |  |   |             |   |  |       |       |   |  |   |       
|                                                      |  |                         |        |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |        
|Net income (loss) from continuing operations          |  |                         | 239.1  |   |                       |   | 215.5   |                           |  |   | 44.3         |   |  |       | (262.1 | ) |  |   | 236.8  
|Net income from discontinued operations               |  |                         |       |   |                       |   | 0.3     |                           |  |   | 2.0          |   |  |       |       |   |  |   | 2.3    
|                                                      |  |                         |        |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |        
|Net income (loss)                                     |  | $                       | 239.1  |   |                       | $ | 215.8   |                           |  | $ | 46.3         |   |  | $     | (262.1 | ) |  | $ | 239.1  
|                                                      |  |                         |        |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |        



19



---

Condensed Consolidating Statements of Income

Three Months Ended December 30, 2007

(Unaudited)



|                                                      |  |                         |        |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |         |  
|----------------------------------------------------- |  | ----------------------- | ------ | - | --------------------- | - | ------- | ------------------------- |  | - | ------------ | - |  | ----- | ------ | - |  | - | ------- | -
|                                                      |  | PrecisionCastpartsCorp. |        |   | GuarantorSubsidiaries |   |         | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | Total |       
|Net sales                                             |  | $                       |       |   |                       | $ | 1,342.1 |                           |  | $ | 401.8        |   |  | $     | (75.7  | ) |  | $ | 1,668.2 |  
|Cost of goods sold                                    |  |                         | 1.4    |   |                       |   | 966.9   |                           |  |   | 314.8        |   |  |       | (75.7  | ) |  |   | 1,207.4 |  
|Selling and administrative expenses                   |  |                         | 22.4   |   |                       |   | 47.0    |                           |  |   | 19.5         |   |  |       |       |   |  |   | 88.9    |  
|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  |   |                       |   | 310.3   |                           |  |   | 74.7         |   |  |       | (260.1 | ) |  |   | 361.8   |  
|Income tax (benefit) expense                          |  |                         | (9.6   | ) |                       |   | 108.2   |                           |  |   | 21.7         |   |  |       |       |   |  |   | 120.3   |  
|Minority interest                                     |  |                         |       |   |                       |   | 0.3     |                           |  |   | (0.6         | ) |  |       |       |   |  |   | (0.3    | )
|                                                      |  |                         |        |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |         |  
|Net income (loss) from continuing operations          |  |                         | 246.5  |   |                       |   | 202.4   |                           |  |   | 52.4         |   |  |       | (260.1 | ) |  |   | 241.2   |  
|Net income from discontinued operations               |  |                         |       |   |                       |   | 2.5     |                           |  |   | 2.8          |   |  |       |       |   |  |   | 5.3     |  
|                                                      |  |                         |        |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |         |  
|Net income (loss)                                     |  | $                       | 246.5  |   |                       | $ | 204.9   |                           |  | $ | 55.2         |   |  | $     | (260.1 | ) |  | $ | 246.5   |  
|                                                      |  |                         |        |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |         |  



20



---

Condensed Consolidating Statements of Income

Nine Months Ended December 28, 2008

(Unaudited)



|                                                      |  |                         |        |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |         |  
|----------------------------------------------------- |  | ----------------------- | ------ | - | --------------------- | - | ------- | ------------------------- |  | - | ------------ | - |  | ----- | ------ | - |  | - | ------- | -
|                                                      |  | PrecisionCastpartsCorp. |        |   | GuarantorSubsidiaries |   |         | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | Total |       
|Net sales                                             |  | $                       |       |   |                       | $ | 4,234.6 |                           |  | $ | 1,214.9      |   |  | $     | (226.0 | ) |  | $ | 5,223.5 |  
|Cost of goods sold                                    |  |                         | 10.6   |   |                       |   | 2,999.4 |                           |  |   | 948.6        |   |  |       | (226.0 | ) |  |   | 3,732.6 |  
|Selling and administrative expenses                   |  |                         | 62.8   |   |                       |   | 158.5   |                           |  |   | 69.1         |   |  |       |       |   |  |   | 290.4   |  
|Restructuring and asset impairment                    |  |                         |       |   |                       |   | 8.4     |                           |  |   | 3.4          |   |  |       |       |   |  |   | 11.8    |  
|Other (income) expense                                |  |                         | (1.7   | ) |                       |   | (4.9    | )                         |  |   | 6.6          |   |  |       |       |   |  |   |        |  
|Interest (income) expense, net                        |  |                         | (47.6  | ) |                       |   | 56.0    |                           |  |   | (1.4         | ) |  |       |       |   |  |   | 7.0     |  
|Equity in earnings of subsidiaries                    |  |                         | (808.5 | ) |                       |   | (22.5   | )                         |  |   |             |   |  |       | 831.0  |   |  |   |        |  
|                                                      |  |                         |        |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |         |  
|Income (loss) before income tax and minority interest |  |                         | 784.4  |   |                       |   | 1,039.7 |                           |  |   | 188.6        |   |  |       | (831.0 | ) |  |   | 1,181.7 |  
|Income tax (benefit) expense                          |  |                         | 0.2    |   |                       |   | 353.2   |                           |  |   | 52.8         |   |  |       |       |   |  |   | 406.2   |  
|Minority interest                                     |  |                         |       |   |                       |   |        |                           |  |   | (0.4         | ) |  |       |       |   |  |   | (0.4    | )
|                                                      |  |                         |        |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |         |  
|Net income (loss) from continuing operations          |  |                         | 784.2  |   |                       |   | 686.5   |                           |  |   | 135.4        |   |  |       | (831.0 | ) |  |   | 775.1   |  
|Net income from discontinued operations               |  |                         |       |   |                       |   | 1.9     |                           |  |   | 7.2          |   |  |       |       |   |  |   | 9.1     |  
|                                                      |  |                         |        |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |         |  
|Net income (loss)                                     |  | $                       | 784.2  |   |                       | $ | 688.4   |                           |  | $ | 142.6        |   |  | $     | (831.0 | ) |  | $ | 784.2   |  
|                                                      |  |                         |        |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |         |  



21



---

Condensed Consolidating Statements of Income

Nine Months Ended December 30, 2007

(Unaudited)



|                                                      |  |                         |        |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |         |  
|----------------------------------------------------- |  | ----------------------- | ------ | - | --------------------- | - | ------- | ------------------------- |  | - | ------------ | - |  | ----- | ------ | - |  | - | ------- | -
|                                                      |  | PrecisionCastpartsCorp. |        |   | GuarantorSubsidiaries |   |         | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | Total |       
|Net sales                                             |  | $                       |       |   |                       | $ | 4,030.9 |                           |  | $ | 1,160.2      |   |  | $     | (207.6 | ) |  | $ | 4,983.5 |  
|Cost of goods sold                                    |  |                         | 8.0    |   |                       |   | 2,924.5 |                           |  |   | 899.8        |   |  |       | (207.6 | ) |  |   | 3,624.7 |  
|Selling and administrative expenses                   |  |                         | 66.2   |   |                       |   | 152.7   |                           |  |   | 54.6         |   |  |       |       |   |  |   | 273.5   |  
|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  |   |                       |   | 902.1   |                           |  |   | 226.3        |   |  |       | (765.6 | ) |  |   | 1,049.0 |  
|Income tax (benefit) expense                          |  |                         | (22.1  | ) |                       |   | 310.4   |                           |  |   | 64.8         |   |  |       |       |   |  |   | 353.1   |  
|Minority interest                                     |  |                         |       |   |                       |   | 2.6     |                           |  |   | (3.5         | ) |  |       |       |   |  |   | (0.9    | )
|                                                      |  |                         |        |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |         |  
|Net income (loss) from continuing operations          |  |                         | 708.3  |   |                       |   | 594.3   |                           |  |   | 158.0        |   |  |       | (765.6 | ) |  |   | 695.0   |  
|Net income from discontinued operations               |  |                         |       |   |                       |   | 9.3     |                           |  |   | 4.0          |   |  |       |       |   |  |   | 13.3    |  
|                                                      |  |                         |        |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |         |  
|Net income (loss)                                     |  | $                       | 708.3  |   |                       | $ | 603.6   |                           |  | $ | 162.0        |   |  | $     | (765.6 | ) |  | $ | 708.3   |  
|                                                      |  |                         |        |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |         |  



22



---

Condensed Consolidating Balance Sheets

December 28, 2008

(Unaudited)



|                                                       |  |                         |         |   |                       |   |         |                           |  |   |              |   |  |       |          |   |  |   |         |  
|------------------------------------------------------ |  | ----------------------- | ------- | - | --------------------- | - | ------- | ------------------------- |  | - | ------------ | - |  | ----- | -------- | - |  | - | ------- | -
|                                                       |  | PrecisionCastpartsCorp. |         |   | GuarantorSubsidiaries |   |         | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | Total |         
|Assets                                                 |  |                         |         |   |                       |   |         |                           |  |   |              |   |  |       |          |   |  |   |         |  
|Current assets:                                        |  |                         |         |   |                       |   |         |                           |  |   |              |   |  |       |          |   |  |   |         |  
|Cash and cash equivalents                              |  | $                       | 133.7   |   |                       | $ | 1.7     |                           |  | $ | 141.5        |   |  | $     |         |   |  | $ | 276.9   |  
|Receivables                                            |  |                         | 45.2    |   |                       |   | 1,807.0 |                           |  |   | 121.1        |   |  |       | (1,076.8 | ) |  |   | 896.5   |  
|Inventories                                            |  |                         |        |   |                       |   | 989.5   |                           |  |   | 227.9        |   |  |       |         |   |  |   | 1,217.4 |  
|Prepaid expenses                                       |  |                         | 0.6     |   |                       |   | 9.5     |                           |  |   | 13.0         |   |  |       |         |   |  |   | 23.1    |  
|Deferred income taxes                                  |  |                         | 20.9    |   |                       |   | 24.9    |                           |  |   | 25.1         |   |  |       |         |   |  |   | 70.9    |  
|Discontinued operations                                |  |                         |        |   |                       |   | 44.6    |                           |  |   | 87.4         |   |  |       | (110.8   | ) |  |   | 21.2    |  
|                                                       |  |                         |         |   |                       |   |         |                           |  |   |              |   |  |       |          |   |  |   |         |  
|Total current assets                                   |  |                         | 200.4   |   |                       |   | 2,877.2 |                           |  |   | 616.0        |   |  |       | (1,187.6 | ) |  |   | 2,506.0 |  
|                                                       |  |                         |         |   |                       |   |         |                           |  |   |              |   |  |       |          |   |  |   |         |  
|Property, plant and equipment, net                     |  |                         | 40.0    |   |                       |   | 845.1   |                           |  |   | 248.9        |   |  |       |         |   |  |   | 1,134.0 |  
|Goodwill, net                                          |  |                         |        |   |                       |   | 1969.9  |                           |  |   | 494.2        |   |  |       |         |   |  |   | 2,464.1 |  
|Deferred income taxes                                  |  |                         | 20.0    |   |                       |   |        |                           |  |   |             |   |  |       | (20.0    | ) |  |   |        |  
|Investments in subsidiaries                            |  |                         | 5,954.4 |   |                       |   | 447.4   |                           |  |   |             |   |  |       | (6,401.8 | ) |  |   |        |  
|Other assets                                           |  |                         | 129.4   |   |                       |   | 108.6   |                           |  |   | 66.1         |   |  |       | 18.3     |   |  |   | 322.4   |  
|Discontinued operations                                |  |                         |        |   |                       |   | 15.5    |                           |  |   | 6.7          |   |  |       |         |   |  |   | 22.2    |  
|                                                       |  |                         |         |   |                       |   |         |                           |  |   |              |   |  |       |          |   |  |   |         |  
|                                                       |  | $                       | 6,344.2 |   |                       | $ | 6,263.7 |                           |  | $ | 1,431.9      |   |  | $     | (7,591.1 | ) |  | $ | 6,448.7 |  
|                                                       |  |                         |         |   |                       |   |         |                           |  |   |              |   |  |       |          |   |  |   |         |  
|Liabilities and Shareholders Investment                |  |                         |         |   |                       |   |         |                           |  |   |              |   |  |       |          |   |  |   |         |  
|Current liabilities:                                   |  |                         |         |   |                       |   |         |                           |  |   |              |   |  |       |          |   |  |   |         |  
|Long-term debt currently due and short-term borrowings |  | $                       | 48.7    |   |                       | $ | 0.6     |                           |  | $ | 3.2          |   |  | $     |         |   |  | $ | 52.5    |  
|Accounts payable                                       |  |                         | 1,239.2 |   |                       |   | 428.3   |                           |  |   | 116.8        |   |  |       | (1,187.6 | ) |  |   | 596.7   |  
|Accrued liabilities                                    |  |                         | 27.1    |   |                       |   | 294.2   |                           |  |   | 75.9         |   |  |       | (1.1     | ) |  |   | 396.1   |  
|Income taxes payable                                   |  |                         | 19.5    |   |                       |   | 2.7     |                           |  |   | 34.5         |   |  |       |         |   |  |   | 56.7    |  
|Discontinued operations                                |  |                         |        |   |                       |   | 11.2    |                           |  |   | 3.7          |   |  |       |         |   |  |   | 14.9    |  
|                                                       |  |                         |         |   |                       |   |         |                           |  |   |              |   |  |       |          |   |  |   |         |  
|Total current liabilities                              |  |                         | 1,334.5 |   |                       |   | 737.0   |                           |  |   | 234.1        |   |  |       | (1,188.7 | ) |  |   | 1,116.9 |  
|                                                       |  |                         |         |   |                       |   |         |                           |  |   |              |   |  |       |          |   |  |   |         |  
|Long-term debt                                         |  |                         | 252.2   |   |                       |   | 6.6     |                           |  |   | 0.5          |   |  |       |         |   |  |   | 259.3   |  
|Pension and other postretirement benefit obligations   |  |                         | 139.8   |   |                       |   | 135.3   |                           |  |   | 5.6          |   |  |       |         |   |  |   | 280.7   |  
|Deferred income taxes                                  |  |                         |        |   |                       |   | 81.3    |                           |  |   | 18.6         |   |  |       | (20.0    | ) |  |   | 79.9    |  
|Other long-term liabilities                            |  |                         | 4.6     |   |                       |   | 81.7    |                           |  |   | 10.5         |   |  |       |         |   |  |   | 96.8    |  
|Discontinued operations                                |  |                         |        |   |                       |   | 1.2     |                           |  |   | 0.8          |   |  |       |         |   |  |   | 2.0     |  
|Commitments and contingencies (See Notes)              |  |                         |         |   |                       |   |         |                           |  |   |              |   |  |       |          |   |  |   |         |  
|Shareholders equity:                                  |  |                         |         |   |                       |   |         |                           |  |   |              |   |  |       |          |   |  |   |         |  
|Common stock and paid-in capital                       |  |                         | 1,213.1 |   |                       |   | 2,818.3 |                           |  |   | 919.9        |   |  |       | (3,738.2 | ) |  |   | 1,213.1 |  
|Retained earnings                                      |  |                         | 3,645.1 |   |                       |   | 2,447.1 |                           |  |   | 413.5        |   |  |       | (2,860.6 | ) |  |   | 3,645.1 |  
|Accumulated other comprehensive (loss) income          |  |                         | (245.1  | ) |                       |   | (44.8   | )                         |  |   | (171.6       | ) |  |       | 216.4    |   |  |   | (245.1  | )
|                                                       |  |                         |         |   |                       |   |         |                           |  |   |              |   |  |       |          |   |  |   |         |  
|Total shareholders investment                         |  |                         | 4,613.1 |   |                       |   | 5,220.6 |                           |  |   | 1,161.8      |   |  |       | (6,382.4 | ) |  |   | 4,613.1 |  
|                                                       |  |                         |         |   |                       |   |         |                           |  |   |              |   |  |       |          |   |  |   |         |  
|                                                       |  | $                       | 6,344.2 |   |                       | $ | 6,263.7 |                           |  | $ | 1,431.9      |   |  | $     | (7,591.1 | ) |  | $ | 6,448.7 |  
|                                                       |  |                         |         |   |                       |   |         |                           |  |   |              |   |  |       |          |   |  |   |         |  



23



---

Condensed Consolidating Balance Sheets

March 30, 2008

(Unaudited)



|                                                       |  |                         |         |                       |   |         |                           |  |              |         |  |       |          |   |  |   |        
|------------------------------------------------------ |  | ----------------------- | ------- | --------------------- | - | ------- | ------------------------- |  | ------------ | ------- |  | ----- | -------- | - |  | - | -------
|                                                       |  | PrecisionCastpartsCorp. |         | GuarantorSubsidiaries |   |         | Non-GuarantorSubsidiaries |  | Eliminations |         |  | Total
|ASSETS                                                 |  |                         |         |                       |   |         |                           |  |              |         |  |       |          |   |  |   |        
|Current assets:                                        |  |                         |         |                       |   |         |                           |  |              |         |  |       |          |   |  |   |        
|Cash and cash equivalents                              |  | $                       | 69.6    |                       | $ | 0.8     |                           |  | $            | 150.9   |  | $     |         |   |  | $ | 221.3  
|Receivables, net                                       |  |                         | 35.1    |                       |   | 1,148.6 |                           |  |              | 560.8   |  |       | (731.2   | ) |  |   | 1,013.3
|Inventories                                            |  |                         |        |                       |   | 716.7   |                           |  |              | 269.5   |  |       |         |   |  |   | 986.2  
|Prepaid expenses                                       |  |                         | 3.1     |                       |   | 8.0     |                           |  |              | 10.5    |  |       |         |   |  |   | 21.6   
|Deferred income taxes                                  |  |                         | 29.1    |                       |   | 29.4    |                           |  |              | 24.5    |  |       |         |   |  |   | 83.0   
|Discontinued operations                                |  |                         |        |                       |   | 28.8    |                           |  |              | 75.4    |  |       | (57.3    | ) |  |   | 46.9   
|                                                       |  |                         |         |                       |   |         |                           |  |              |         |  |       |          |   |  |   |        
|Total current assets                                   |  |                         | 136.9   |                       |   | 1,932.3 |                           |  |              | 1,091.6 |  |       | (788.5   | ) |  |   | 2,372.3
|                                                       |  |                         |         |                       |   |         |                           |  |              |         |  |       |          |   |  |   |        
|Property, plant and equipment, net                     |  |                         | 42.2    |                       |   | 770.3   |                           |  |              | 293.9   |  |       |         |   |  |   | 1,106.4
|Goodwill                                               |  |                         |        |                       |   | 1,659.9 |                           |  |              | 622.5   |  |       |         |   |  |   | 2,282.4
|Deferred income taxes                                  |  |                         | 55.1    |                       |   |        |                           |  |              |        |  |       | (55.1    | ) |  |   |       
|Investments in subsidiaries                            |  |                         | 4,954.3 |                       |   | 421.0   |                           |  |              |        |  |       | (5,375.3 | ) |  |   |       
|Other assets                                           |  |                         | 121.5   |                       |   | 86.6    |                           |  |              | 36.4    |  |       | 14.1     |   |  |   | 258.6  
|Discontinued operations                                |  |                         |        |                       |   | 15.7    |                           |  |              | 14.7    |  |       |         |   |  |   | 30.4   
|                                                       |  |                         |         |                       |   |         |                           |  |              |         |  |       |          |   |  |   |        
|                                                       |  | $                       | 5,310.0 |                       | $ | 4,885.8 |                           |  | $            | 2,059.1 |  | $     | (6,204.8 | ) |  | $ | 6,050.1
|                                                       |  |                         |         |                       |   |         |                           |  |              |         |  |       |          |   |  |   |        
|LIABILITIES AND SHAREHOLDERS EQUITY                   |  |                         |         |                       |   |         |                           |  |              |         |  |       |          |   |  |   |        
|Current liabilities:                                   |  |                         |         |                       |   |         |                           |  |              |         |  |       |          |   |  |   |        
|Long-term debt currently due and short-term borrowings |  | $                       | 19.0    |                       | $ | 0.3     |                           |  | $            | 0.2     |  | $     |         |   |  | $ | 19.5   
|Accounts payable                                       |  |                         | 699.3   |                       |   | 475.5   |                           |  |              | 292.7   |  |       | (788.5   | ) |  |   | 679.0  
|Accrued liabilities                                    |  |                         | 27.3    |                       |   | 291.5   |                           |  |              | 98.7    |  |       | (1.1     | ) |  |   | 416.4  
|Income taxes payable                                   |  |                         | 32.7    |                       |   | 2.4     |                           |  |              | 30.3    |  |       |         |   |  |   | 65.4   
|Discontinued operations                                |  |                         |        |                       |   | 11.6    |                           |  |              | 12.9    |  |       |         |   |  |   | 24.5   
|                                                       |  |                         |         |                       |   |         |                           |  |              |         |  |       |          |   |  |   |        
|Total current liabilities                              |  |                         | 778.3   |                       |   | 781.3   |                           |  |              | 434.8   |  |       | (789.6   | ) |  |   | 1,204.8
|                                                       |  |                         |         |                       |   |         |                           |  |              |         |  |       |          |   |  |   |        
|Long-term debt                                         |  |                         | 327.3   |                       |   | 6.8     |                           |  |              | 0.3     |  |       |         |   |  |   | 334.4  
|Pension and other postretirement benefit obligations   |  |                         | 133.9   |                       |   | 134.2   |                           |  |              | 6.4     |  |       |         |   |  |   | 274.5  
|Deferred income taxes                                  |  |                         |        |                       |   | 80.2    |                           |  |              | 19.9    |  |       | (55.1    | ) |  |   | 45.0   
|Other long-term liabilities                            |  |                         | 25.5    |                       |   | 82.2    |                           |  |              | 34.8    |  |       |         |   |  |   | 142.5  
|Discontinued operations                                |  |                         |        |                       |   | 3.5     |                           |  |              | 0.4     |  |       |         |   |  |   | 3.9    
|Commitments and contingencies (See Notes)              |  |                         |         |                       |   |         |                           |  |              |         |  |       |          |   |  |   |        
|Shareholders equity:                                  |  |                         |         |                       |   |         |                           |  |              |         |  |       |          |   |  |   |        
|Common stock and paid-in capital                       |  |                         | 1,155.6 |                       |   | 2,084.4 |                           |  |              | 1,201.3 |  |       | (3,285.7 | ) |  |   | 1,155.6
|Retained earnings                                      |  |                         | 2,873.4 |                       |   | 1,758.7 |                           |  |              | 270.9   |  |       | (2,029.6 | ) |  |   | 2,873.4
|Accumulated other comprehensive income (loss)          |  |                         | 16.0    |                       |   | (45.5   | )                         |  |              | 90.3    |  |       | (44.8    | ) |  |   | 16.0   
|                                                       |  |                         |         |                       |   |         |                           |  |              |         |  |       |          |   |  |   |        
|Total shareholders equity                             |  |                         | 4,045.0 |                       |   | 3,797.6 |                           |  |              | 1,562.5 |  |       | (5,360.1 | ) |  |   | 4,045.0
|                                                       |  |                         |         |                       |   |         |                           |  |              |         |  |       |          |   |  |   |        
|                                                       |  | $                       | 5,310.0 |                       | $ | 4,885.8 |                           |  | $            | 2,059.1 |  | $     | (6,204.8 | ) |  | $ | 6,050.1
|                                                       |  |                         |         |                       |   |         |                           |  |              |         |  |       |          |   |  |   |        



24



---

Condensed Consolidating Statements of Cash Flows

Nine Months Ended December 28, 2008

(Unaudited)



|                                                                            |  |                         |        |   |                       |   |        |                           |  |   |              |   |  |       |        |   |  |   |        |  
|--------------------------------------------------------------------------- |  | ----------------------- | ------ | - | --------------------- | - | ------ | ------------------------- |  | - | ------------ | - |  | ----- | ------ | - |  | - | ------ | -
|                                                                            |  | PrecisionCastpartsCorp. |        |   | GuarantorSubsidiaries |   |        | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | Total |       
|Net cash provided by operating activities                                   |  | $                       | 29.0   |   |                       | $ | 599.6  |                           |  | $ | 165.4        |   |  | $     |       |   |  | $ | 794.0  |  
|                                                                            |  |                         |        |   |                       |   |        |                           |  |   |              |   |  |       |        |   |  |   |        |  
|Acquisitions of businesses                                                  |  |                         | (486.9 | ) |                       |   |       |                           |  |   | (3.8         | ) |  |       |       |   |  |   | (490.7 | )
|Capital expenditures                                                        |  |                         | (1.1   | ) |                       |   | (101.2 | )                         |  |   | (47.2        | ) |  |       |       |   |  |   | (149.5 | )
|Intercompany advances                                                       |  |                         |       |   |                       |   | (544.3 | )                         |  |   | 6.4          |   |  |       | 537.9  |   |  |   |       |  
|Intercompany loans                                                          |  |                         | 3.5    |   |                       |   |       |                           |  |   |             |   |  |       | (3.5   | ) |  |   |       |  
|Disposition of businesses and other                                         |  |                         | 15.5   |   |                       |   | (1.3   | )                         |  |   | 0.7          |   |  |       |       |   |  |   | 14.9   |  
|Net cash (used) provided by investing activities of discontinued operations |  |                         |       |   |                       |   | (1.1   | )                         |  |   | 4.2          |   |  |       | 0.9    |   |  |   | 4.0    |  
|                                                                            |  |                         |        |   |                       |   |        |                           |  |   |              |   |  |       |        |   |  |   |        |  
|Net cash (used) provided by investing activities                            |  |                         | (469.0 | ) |                       |   | (647.9 | )                         |  |   | (39.7        | ) |  |       | 535.3  |   |  |   | (621.3 | )
|                                                                            |  |                         |        |   |                       |   |        |                           |  |   |              |   |  |       |        |   |  |   |        |  
|Net change in commercial paper and short-term borrowings                    |  |                         |       |   |                       |   |       |                           |  |   | 2.4          |   |  |       |       |   |  |   | 2.4    |  
|Net change in long-term debt                                                |  |                         | (45.4  | ) |                       |   | (0.2   | )                         |  |   | (0.5         | ) |  |       |       |   |  |   | (46.1  | )
|Common stock issued                                                         |  |                         | 12.7   |   |                       |   |       |                           |  |   |             |   |  |       |       |   |  |   | 12.7   |  
|Excess tax benefits from share-based payment arrangements                   |  |                         | 10.5   |   |                       |   |       |                           |  |   |             |   |  |       |       |   |  |   | 10.5   |  
|Cash dividends                                                              |  |                         | (12.5  | ) |                       |   |       |                           |  |   |             |   |  |       |       |   |  |   | (12.5  | )
|Intercompany advances                                                       |  |                         | 538.8  |   |                       |   |       |                           |  |   |             |   |  |       | (538.8 | ) |  |   |       |  
|Intercompany loans                                                          |  |                         |       |   |                       |   | 50.0   |                           |  |   | (52.9        | ) |  |       | 2.9    |   |  |   |       |  
|Net cash (used) provided by financing activities of discontinued operations |  |                         |       |   |                       |   | (0.6   | )                         |  |   | (0.6         | ) |  |       | 0.6    |   |  |   | (0.6   | )
|                                                                            |  |                         |        |   |                       |   |        |                           |  |   |              |   |  |       |        |   |  |   |        |  
|Net cash provided (used) by financing activities                            |  |                         | 504.1  |   |                       |   | 49.2   |                           |  |   | (51.6        | ) |  |       | (535.3 | ) |  |   | (33.6  | )
|                                                                            |  |                         |        |   |                       |   |        |                           |  |   |              |   |  |       |        |   |  |   |        |  
|Effect of exchange rate changes on cash and cash equivalents                |  |                         |       |   |                       |   |       |                           |  |   | (83.5        | ) |  |       |       |   |  |   | (83.5  | )
|                                                                            |  |                         |        |   |                       |   |        |                           |  |   |              |   |  |       |        |   |  |   |        |  
|Net increase (decrease) in cash and cash equivalents                        |  |                         | 64.1   |   |                       |   | 0.9    |                           |  |   | (9.4         | ) |  |       |       |   |  |   | 55.6   |  
|Cash and cash equivalents at beginning of period                            |  |                         | 69.6   |   |                       |   | 0.8    |                           |  |   | 150.9        |   |  |       |       |   |  |   | 221.3  |  
|                                                                            |  |                         |        |   |                       |   |        |                           |  |   |              |   |  |       |        |   |  |   |        |  
|Cash and cash equivalents at end of period                                  |  | $                       | 133.7  |   |                       | $ | 1.7    |                           |  | $ | 141.5        |   |  | $     |       |   |  | $ | 276.9  |  
|                                                                            |  |                         |        |   |                       |   |        |                           |  |   |              |   |  |       |        |   |  |   |        |  



25



---

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  | ) |                       |   | (103.5 | )                         |  |   | (36.2        | ) |  |       |       |   |  |   | (152.9 | )
|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 (used) provided by investing activities of discontinued operations             |  |                         |       |   |                       |   | (1.7   | )                         |  |   | (0.4         | ) |  |       | (0.2   | ) |  |   | (2.3   | )
|                                                                                        |  |                         |        |   |                       |   |        |                           |  |   |              |   |  |       |        |   |  |   |        |  
|Net cash (used) provided by investing activities                                        |  |                         | (250.6 | ) |                       |   | (575.0 | )                         |  |   | (406.1       | ) |  |       | 830.1  |   |  |   | (401.6 | )
|                                                                                        |  |                         |        |   |                       |   |        |                           |  |   |              |   |  |       |        |   |  |   |        |  
|Net change in commercial paper and short-term borrowings                                |  |                         |       |   |                       |   | (0.1   | )                         |  |   | 149.9        |   |  |       |       |   |  |   | 149.8  |  
|Net change in long-term debt                                                            |  |                         | (375.6 | ) |                       |   | (0.2   | )                         |  |   | (0.3         | ) |  |       |       |   |  |   | (376.1 | )
|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 used by financing of discontinued operations                                   |  |                         |       |   |                       |   | (0.3   | )                         |  |   |             |   |  |       |       |   |  |   | (0.3   | )
|                                                                                        |  |                         |        |   |                       |   |        |                           |  |   |              |   |  |       |        |   |  |   |        |  
|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  |  
|                                                                                        |  |                         |        |   |                       |   |        |                           |  |   |              |   |  |       |        |   |  |   |        |  



26



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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 28, 2008 and December 30, 2007



|                                                            |          |                    |         |          |                       |   |         |   |  |   |       |   |  |       |   
|----------------------------------------------------------- | -------- | ------------------ | ------- | -------- | --------------------- | - | ------- | - |  | - | ----- | - |  | ----- | --
|                                                            |          | Three Months Ended |         |          | Increase / (Decrease) |  
|(In millions, except per share data)                        |          | 12/28/08           |         |          | 12/30/07              |   |         | $ |  |   | %     |  
|Net sales                                                   |          | $                  | 1,614.7 |          |                       | $ | 1,668.2 |   |  | $ | (53.5 | ) |  | (3.2  | )%
|Cost of goods sold                                          |          |                    | 1,146.9 |          |                       |   | 1,207.4 |   |  |   | (60.5 | ) |  | (5.0  | ) 
|Selling and administrative expenses                         |          |                    | 93.2    |          |                       |   | 88.9    |   |  |   | 4.3   |   |  | 4.8   |   
|Restructuring and asset impairment                          |          |                    | 11.8    |          |                       |   |        |   |  |   | 11.8  |   |  | 100   |   
|Interest expense                                            |          |                    | 4.4     |          |                       |   | 11.4    |   |  |   | (7.0  | ) |  | (61.4 | ) 
|Interest income                                             |          |                    | (2.4    | )        |                       |   | (1.3    | ) |  |   | 1.1   |   |  | 84.6  |   
|                                                            |          |                    |         |          |                       |   |         |   |  |   |       |   |  |       |   
|Income before income taxes and minority interest            |          |                    | 360.8   |          |                       |   | 361.8   |   |  |   | (1.0  | ) |  | (0.3  | ) 
|Income tax expense                                          |          |                    | 124.0   |          |                       |   | 120.3   |   |  |   | 3.7   |   |  | 3.1   |   
|Effective tax rate                                          |          |                    | 34.4    | %        |                       |   | 33.3    | % |  |   |       |   |  |       |   
|Minority interest                                           |          |                    |        |          |                       |   | (0.3    | ) |  |   | 0.3   |   |  | 100   |   
|                                                            |          |                    |         |          |                       |   |         |   |  |   |       |   |  |       |   
|Net income from continuing operations                       |          |                    | 236.8   |          |                       |   | 241.2   |   |  |   | (4.4  | ) |  | (1.8  | ) 
|Net income from discontinued operations                     |          |                    | 2.3     |          |                       |   | 5.3     |   |  |   | (3.0  | ) |  | (56.6 | ) 
|                                                            |          |                    |         |          |                       |   |         |   |  |   |       |   |  |       |   
|Net income                                                  |          | $                  | 239.1   |          |                       | $ | 246.5   |   |  | $ | (7.4  | ) |  | (3.0  | )%
|                                                            |          |                    |         |          |                       |   |         |   |  |   |       |   |  |       |   
|Net income per share from continuing operations  diluted   |          | $                  | 1.69    |          |                       | $ | 1.72    |   |  | $ | (0.03 | ) |  | (1.7  | )%
|Net income per share from discontinued operations  diluted |          |                    | 0.01    |          |                       |   | 0.04    |   |  |   | (0.03 | ) |  | (75.0 | ) 
|                                                            |          |                    |         |          |                       |   |         |   |  |   |       |   |  |       |   
|Net income per share - diluted                              |          | $                  | 1.70    |          |                       | $ | 1.76    |   |  | $ | (0.06 | ) |  | (3.4  | )%
|                                                            |          |                    |         |          |                       |   |         |   |  |   |       |   |  |       |   
|                                                            |          |                   
|Average market price of key metals (per pound)              |          | Three Months Ended |         |          | Increase/ (Decrease)  |  
|                                                            | 12/28/08 |                    |         | 12/30/07 |                       |   | $       |   |  | % |      
|Nickel                                                      |          | $                  | 5.12    |          |                       | $ | 13.54   |   |  | $ | (8.42 | ) |  | (62   | )%
|London Metals Exchange1                                     |          |                    |         |          |                       |   |         |   |  |   |       |   |  |       |   
|Titanium                                                    |          | $                  | 1.53    |          |                       | $ | 5.83    |   |  | $ | (4.30 | ) |  | (74   | )%
|Ti 6-4 bulk, Metalprices.com                                |          |                    |         |          |                       |   |         |   |  |   |       |   |  |       |   
|Cobalt                                                      |          | $                  | 24.06   |          |                       | $ | 33.19   |   |  | $ | (9.13 | ) |  | (28   | )%
|Metal Bulletin COFM.8 Index1                                |          |                    |         |          |                       |   |         |   |  |   |       |   |  |       |   



|1 | Source:Bloomberg
|- | ----------------



27



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Sales for the third quarter of fiscal 2009 were $1,614.7 million, down $53.5 million from $1,668.2 million in the same
quarter last year. The decrease in sales was principally driven by the Boeing strike, which negatively impacted aerospace sales by approximately $129 million in the current quarter, and lower nickel alloy selling prices and increased internal mill
sales, which negatively impacted sales by approximately $75 million. Contractual material pass-through pricing also declined, increasing sales by approximately $96.7 million in the current quarter versus approximately $116.0 million in the same
quarter last year. Contractual material pass-through pricing adjustments are calculated based on market prices shown in the above table in trailing periods from one to twelve months.In addition, our foreign operations reported approximately
$70 million in reduced sales year-over-year due to the strong increase in the value of the U.S. dollar relative to international currencies, primarily the British pound, Euro, Brazilian real and Australian dollar. These decreases were partially
offset by the addition of approximately $21.5 million of quarter sales from the current quarter acquisitions of Airdrome, Fatigue and Hackney Ladish, and from steady improvement in industrial gas turbine (IGT), extruded pipe and
aerospace fasteners sales. With regard to the commercial aircraft industry, aircraft deliveries decreased 3.4 percent in calendar year 2008 and Boeing and Airbus have announced relatively flat growth rates through calendar year 2009. Due to
manufacturing lead times, our production volumes are approximately 6 to 9 months ahead of aircraft deliveries. While Boeing aircraft production rates are resuming after the 58-day machinist strike last fall, we do not expect recovery to pre-strike
levels in fiscal 2009.

Net income from continuing operations for the third quarter of fiscal 2009 was $236.8 million, or $1.69 per share (diluted). By
comparison, net income from continuing operations for the third quarter of fiscal 2008 was $241.2 million, or $1.72 per share (diluted). Net income (after discontinued operations) for the third quarter of fiscal 2009 was $239.1 million, or $1.70 per
share (diluted), compared with net income of $246.5 million, or $1.76 per share (diluted), in the same period last year.

Interest and Income Tax

Net interest expense for the third quarter of fiscal 2009 was $2.0 million, compared with $10.1 million for the third quarter last year. The lower
net expense is primarily due to significantly reduced debt levels and higher interest income resulting from increased cash balances compared to the same quarter last year.

The effective tax rate for the third quarter of fiscal 2009 was 34.4 percent, 1.1 percentage points higher than the 33.3 percent effective rate in the same quarter last year. The increase in tax rate compared to last
year was primarily due to an increase in liabilities for uncertain tax positions and a reduction in benefits from audit settlements compared to the prior year, partially offset by increased benefits from the federal research and development tax
credit in the current quarter.

Restructuring

We regularly assess our cost structure to ensure that operations are properly sized for prevailing market conditions, taking into consideration current and forecasted conditions in the markets we serve.

In the third quarter of fiscal 2009, we incurred restructuring and impairment charges of $11.8 million pursuant to plans to downsize operations across all
segments. The tax-affected impact of these charges was $7.9 million, or $0.05 per share (diluted). We had been gearing up for aerospace growth into fiscal 2010, whereas future demand now appears to be flattening out, particularly in the casting
and forging aerospace markets. The charges consisted of $9.2 million for employee severance expenses and $2.6 million for impairments and relocation expenses related to long lived assets. These restructuring plans provide for terminations
of approximately 550 employees in the third and fourth quarters of fiscal 2009. The restructuring and impairment charges recorded by the Investment Cast Products segment, Forged Products segment and Fastener Products segment were $4.9 million,
$4.9 million and $2.0 million, respectively, during the quarter.



28



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Business Acquisitions

Fiscal 2009

In the third quarter of fiscal 2009, we acquired the following three entities for a total cost of approximately $469.5 million,
which was primarily paid in cash. These transactions resulted in $343.5 million of goodwill (of which $215.9 million is deductible for tax purposes) and other intangible assets. The impact of these acquisitions was not material to our consolidated
results of operations; consequently, pro forma information has not been included. As of December 28, 2008, the purchase price allocations are subject to further refinement as analyses are completed, including the valuation of intangible assets.

On December 4, 2008, we acquired Hackney Ladish Holding Corp. (Hackney Ladish), a leading producer of forged pipe fittings for critical
energy infrastructure and related applications. With more than 80 years of experience manufacturing pipe fittings, Hackney Ladish offers the widest range of product types and sizes in the industry. Fittings are used in piping systems
throughout the energy value chain, from drilling through processing and storage. Hackney Ladishs products connect pipe, change the direction of flow, increase or reduce pipe sizes, join or separate flow, or cap pipe
ends. Headquartered in Dallas, Texas, Hackney Ladish operates manufacturing facilities in Russellville, Arkansas and Enid, Oklahoma. The Hackney Ladish acquisition is a stock purchase for tax purposes and operates as part of the Forged
Products segment.

On November 21, 2008, we acquired Fatigue Technology, Inc. (FTI), headquartered in Seattle, Washington. FTI pioneered
the cold expansion process in 1969 and is the technology leader in fatigue life extension for both metal and composite airframe fastener holes. The FTI acquisition is an asset purchase for tax purposes and operates as part of the Fastener Products
segment.

On September 30, 2008, we acquired Airdrome Holdings, LLC (Airdrome), which consists of Airdrome Precision Components
(APC) and AF Aerospace Ltd. (AFA). APC, located in Long Beach, California, is a leading supplier of hydraulic and pneumatic fluid fittings primarily for airframe applications. AFA, located in Rugby, England, manufactures a
variety of machined components for aerospace applications, including fittings and other fluid conveyance products, ultra-high tensile bolts, and machined details. Fluid fittings, manufactured in nickel, titanium, and stainless steel alloys, are the
critical connectors for hoses transporting fuel, hydraulic fluid, and pneumatic pressure throughout an aircraft. The Airdrome acquisition is an asset purchase for tax purposes and operates as part of the Fastener Products segment.

Fiscal 2008

On July 5, 2007, we acquired Caledonian Alloys
Group Limited (Caledonian) for approximately $208.1 million in cash, of which $165.1 million was paid at close and $21.2 million was paid in the second quarter of fiscal 2009. We expect to pay one additional contingent payment of
approximately $21.2 million in the second quarter of fiscal 2010. 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 as of the date of acquisition.



29



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Discontinued Operations

Our financial statements were impacted 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 Condensed Consolidated Statements of Income as discontinued
operations, net of tax, and all prior periods have been reclassified.

In the third quarter of fiscal 2009, we decided to dispose of two automotive
fastener operations. The decision to discontinue these automotive fastener operations resulted from their non-core nature coupled with further erosion in the automotive market. These operations have been reclassified from the Fastener Products
segment to discontinued operations.

In the first quarter of fiscal 2009, we sold the stock of our Technova entities, a foreign operation held for sale and
previously recorded as discontinued from our former Flow Technologies pumps and valves business. This transaction resulted in a gain of approximately $3.0 million.

In the fourth quarter of fiscal 2008, we entered into an agreement to sell the Unbrako fastener business headquartered in Shannon, Ireland. The sale was completed in the second quarter of fiscal 2009, resulting in a gain of approximately
$3.5 million. Unbrako was reclassified from the Fastener Products segment to discontinued operations in the fourth quarter of fiscal 2008.

Also in the
fourth quarter of fiscal 2008, we decided to sell the Kladno alloy manufacturing business located in the Czech Republic. Kladno primarily supplied steel ingots to Wyman-Gordons Grafton, Massachusetts operation. Kladno was reclassified from the
Forged Products segment to discontinued operations in the fourth quarter of fiscal 2008 and continues to be marketed.

Net income from discontinued
operations was $2.3 million, or $0.01 per share (diluted) in the third quarter of fiscal 2009 compared with net income of $5.3 million, or $0.04 per share (diluted), in the same quarter last year. The net income from discontinued operations in the
current quarter consists primarily of a curtailment gain related to Unbrakos pension plan and a return to tax provision true-up, partially offset by operating losses and shutdown costs associated with Kladno and one of our discontinued
automotive fastener operations. The net income from discontinued operations in the third quarter of last year principally reflects operating results from the Unbrako, Shape Memory Alloys (SMA) and automotive fastener operations,
partially offset by shutdown costs associated with the J&L East business.

Overall Outlook and Impacts of the Global Economic Recession

Recent economic events have created recessionary economic conditions in many industries and created a crisis in global financial markets including
commercial credit markets. While we are not immune to impacts of the current global recession, we believe our strong financial position will enable us to take advantage of opportunities in our markets to win market share from our customers and
continue to make operational improvements in our businesses.

During the recently completed third quarter of fiscal 2009, approximately 53% of our sales
were to customers in the global aerospace markets. Until the recent economic events occurred, we believed, based on customer forecasts, that the aerospace production rates would continue to experience growth throughout fiscal 2010 and possibly
beyond, particularly due to anticipated build rates of major new aerospace programs such as the Boeing 787 and Airbus A380, each of which contains significant per-ship-set revenue for PCC. We had built up our employee base in anticipation of that
growth. We now believe that the aerospace production rates will remain relatively flat with second quarter fiscal 2009 levels, particularly given the lower than anticipated build rates and delays in both the Boeing 787 and Airbus A380 programs. We
still believe that these programs will represent significant future revenue streams for the company, but the revenues will be recognized later than originally anticipated. During the third quarter, we recognized restructuring charges of $11.8
million (before income taxes), which primarily relate to downsizing the workforce in anticipation of the moderating future aerospace growth in the near-term. We have, however, been able to increase our market share in aerospace, particularly in the
Fasteners Products segment. Our most significant customers in the aerospace industry are primarily large, well-financed businesses that we believe have the ability to weather the economic downturn.



30



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Therefore, while there is significant uncertainty as to the direction of the economy in future periods, we do not anticipate significant collection issues
with our accounts receivable or marketability of our in-process inventories. However, our customers depend on demand from their end-use customers, as well as the end-use customers financial viability, of which we are unable to make an
assessment. We must rely on the forecasted information provided from time to time by our customers as guidance with regard to the impacts from the current and future economic environment.

During the third quarter of fiscal 2009, approximately 27% of our sales were to customers in the global power generation markets, which include our IGT business as well
as sales of our seamless extruded pipe. We expect continued growth in both of these product lines due to demand rates, large current sales backlogs and our ability to win further market share. Our most significant customers in the power generation
markets are primarily large, well-financed businesses that we believe should have the ability to weather the economic downturn or are customers for which sales are backed by letters of credit on which we believe there is little risk of default.
Therefore, we do not anticipate significant collection issues with our accounts receivable or marketability of our in-process inventories. However, our customers depend on demand from their end-use customers, as well as the end-use customers
financial viability, of which we are unable to make an assessment. We must rely on the forecasted information provided from time to time by our customers as guidance with regard to the impacts from the current and future economic environment.

The remaining 20% of our sales in the third quarter of fiscal 2009 were into general industrial markets, including the automotive markets. It is difficult
to summarize the opportunities and challenges in these markets, because the circumstances vary widely from one individual market to another. We have taken, and will continue to take, precautionary measures with customers in these markets to limit
our exposure, to the extent possible, to potential bankruptcies and other financial issues experienced by these customers. These measures include shortening cash collection terms, regular updating of credit profiles, discontinuance of further
business with customers not paying in a timely manner and the requirement of cash in advance of shipments, among others. Due to the diversity of markets and customer profiles in these businesses and the precautionary steps referred to previously, we
do not anticipate severe impacts on our business or significant exposure to credit losses in these markets. However, it is reasonably possible that we may experience unanticipated unfavorable impacts.

We follow an investment philosophy of diversified investing and risk mitigation when managing our pension plans. The investments in our pension plans, which totaled
approximately $1.5 billion as of the end of December 2007 (the date of our last actuarial measurement, converted using March 2008 foreign exchange rates), have experienced investment losses that average an estimated 6 to 8 percent through the end of
December 2008. This compares with our weighted average expected long-term annual investment return of 8 percent for US plans and 7.5 percent for non-US plans. We anticipate that the losses on our pension investments will result in increased net
periodic pension expense in fiscal 2010, although we are currently unable to estimate the amount of the increase as our next actuarial measurement date will be at the end of our fiscal year. We may provide additional funding to certain of our
pension plans in fiscal 2010 to mitigate the impact of these pension investment losses on our income in future years. We believe our financial position and liquidity will allow us to make all required pension contributions as well as additional
voluntary contributions that management deems advisable.

See the Changes in Financial Condition and Liquidity section for a discussion of the impact of
the global financial climate and credit shortage on liquidity.



31



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Results of Operations by Segment  Comparison Between the Three Months Ended December 28, 2008 and
December 30, 2007



|                                                 |  |                    |         |   |                      |   |         |   |  |   |       |   |  |      |   
|------------------------------------------------ |  | ------------------ | ------- | - | -------------------- | - | ------- | - |  | - | ----- | - |  | ---- | --
|                                                 |  | Three Months Ended |         |   | Increase/ (Decrease) |  
|(In millions)                                    |  | 12/28/08           |         |   | 12/30/07             |   |         | $ |  |   | %     |  
|Net sales:                                       |  |                    |         |   |                      |   |         |   |  |   |       |   |  |      |   
|Investment Cast Products                         |  | $                  | 541.5   |   |                      | $ | 540.9   |   |  | $ | 0.6   |   |  | 0.1  | % 
|Forged Products                                  |  |                    | 702.8   |   |                      |   | 771.6   |   |  |   | (68.8 | ) |  | (8.9 | ) 
|Fastener Products                                |  |                    | 370.4   |   |                      |   | 355.7   |   |  |   | 14.7  |   |  | 4.1  |   
|                                                 |  |                    |         |   |                      |   |         |   |  |   |       |   |  |      |   
|Consolidated net sales                           |  | $                  | 1,614.7 |   |                      | $ | 1,668.2 |   |  | $ | (53.5 | ) |  | (3.2 | )%
|                                                 |  |                    |         |   |                      |   |         |   |  |   |       |   |  |      |   
|Segment operating income (loss):                 |  |                    |         |   |                      |   |         |   |  |   |       |   |  |      |   
|Investment Cast Products                         |  | $                  | 135.8   |   |                      | $ | 131.6   |   |  | $ | 4.2   |   |  | 3.2  | % 
|% of sales                                       |  |                    | 25.1    | % |                      |   | 24.3    | % |  |   |       |   |  |      |   
|Forged Products                                  |  |                    | 154.8   |   |                      |   | 169.1   |   |  |   | (14.3 | ) |  | (8.5 | ) 
|% of sales                                       |  |                    | 22.0    | % |                      |   | 21.9    | % |  |   |       |   |  |      |   
|Fastener Products                                |  |                    | 109.4   |   |                      |   | 96.7    |   |  |   | 12.7  |   |  | 13.1 |   
|% of sales                                       |  |                    | 29.5    | % |                      |   | 27.2    | % |  |   |       |   |  |      |   
|Corporate expense                                |  |                    | (25.4   | ) |                      |   | (25.5   | ) |  |   | 0.1   |   |  | (0.4 | ) 
|                                                 |  |                    |         |   |                      |   |         |   |  |   |       |   |  |      |   
|Consolidated segment operating income            |  |                    | 374.6   |   |                      |   | 371.9   |   |  | $ | 2.7   |   |  | 0.7  | % 
|% of sales                                       |  |                    | 23.2    | % |                      |   | 22.3    | % |  |   |       |   |  |      |   
|Restructuring and asset impairment               |  |                    | 11.8    |   |                      |   |        |   |  |   |       |   |  |      |   
|Interest expense, net                            |  |                    | 2.0     |   |                      |   | 10.1    |   |  |   |       |   |  |      |   
|                                                 |  |                    |         |   |                      |   |         |   |  |   |       |   |  |      |   
|Income before income taxes and minority interest |  | $                  | 360.8   |   |                      | $ | 361.8   |   |  |   |       |   |  |      |   
|                                                 |  |                    |         |   |                      |   |         |   |  |   |       |   |  |      |   
|                                                 |  |                   
|                                                 |  | Three Months Ended |         |   | Increase/ (Decrease) |  
|Intercompany sales1                              |  | 12/28/08           |         |   | 12/30/07             |   |         | $ |  |   | %     |  
|Investment Cast Products2                        |  | $                  | 50.9    |   |                      | $ | 23.4    |   |  | $ | 27.5  |   |  | 118  | % 
|Forged Products3                                 |  |                    | 216.7   |   |                      |   | 154.7   |   |  |   | 62.0  |   |  | 40   |   
|Fastener Products4                               |  |                    | 27.0    |   |                      |   | 32.3    |   |  |   | (5.3  | ) |  | (16  | ) 
|                                                 |  |                    |         |   |                      |   |         |   |  |   |       |   |  |      |   
|Total intercompany sales                         |  | $                  | 294.6   |   |                      | $ | 210.4   |   |  | $ | 84.2  |   |  | 40   | % 
|                                                 |  |                    |         |   |                      |   |         |   |  |   |       |   |  |      |   



|1 | Intercompany sales consist of each segments total intercompany sales, including intercompany sales within a
segment and between segments.
|- | ------------------------------------------------------------------------------------------------------------------------------------------



|2 | Investment Cast Products: Includes sales between segments of $5.4 million and $7.0 million for the third quarter of
fiscal 2009 and 2008, respectively.
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------



|3 | Forged Products: Includes sales between segments of $24.0 million and $12.0 million for the third quarter of fiscal 2009
and 2008, respectively.
|- | ------------------------------------------------------------------------------------------------------------------------------------------------



|4 | Fastener Products: Includes sales between segments of $1.0 million and $0.2 million for the third quarter of fiscal 2009
and 2008, respectively.
|- | ------------------------------------------------------------------------------------------------------------------------------------------------



32



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Investment Cast Products

Investment Cast Products sales increased 0.1 percent from $540.9 million in the third quarter of fiscal 2008 to $541.5 million this year. Operating income increased 3.2 percent from $131.6 million in the third
quarter of fiscal 2008 to $135.8 million in the same quarter this year, while operating income as a percent of sales increased from 24.3 percent to 25.1 percent of sales. The slight year-over-year increase in sales reflects continuing strength and
increased customer penetration in the global IGT markets, partially offset by reduced commercial aerospace sales resulting from the Boeing strike, which we estimate negatively impacted sales by approximately $73 million in the current quarter. Sales
also include approximately $18.1 million of contractual pricing related to pass-through of increased material costs in the third quarter of fiscal 2009 compared to $22.2 million in the same period last year. In addition, our foreign operations
reported approximately $13 million in reduced sales year-over-year due to the strong increase in the value of the U.S. dollar relative to international currencies, primarily the British pound and Euro. The increase in operating income reflected the
impact of cost reductions and improved productivity, which helped to offset the negative impact of lost sales due to the Boeing strike. The improvement in operating margins as a percent of sales was mainly due to higher productivity, effective
revert usage and lower scrap costs. Contractual material pass-through pricing diluted operating margins by 0.9 percentage points in the third quarter of fiscal 2009 compared to 1.0 percentage point in the same period a year ago.

Sales from this segment are expected to see a continued negative impact of the Boeing strike in the fourth quarter of this year, with production rates not expected to
resume to pre-strike levels during fiscal 2009. While we cannot determine what the total Boeing strike impact will be, we are estimating our fourth quarter sales for the Investment Cast Products segment will be adversely affected by a lesser extent
as compared to the third quarter impact. Continued weakness in international currencies will also impact this segment. We expect sales to benefit from further IGT growth, with additional capacity utilized to support this growth. In addition to the
Deer Creek expansion completed in the second quarter of this year, the new Renaissance Park IGT facility in Painesville, Ohio was completed on time and on budget in the third quarter, with production expected to start to ramp up in the fourth
quarter.

Forged Products

Forged Products
sales were $702.8 million for the quarter, a decrease of 8.9 percent, compared to sales of $771.6 million in the third quarter of fiscal 2008. Operating income decreased 8.5 percent from $169.1 million in the third quarter of fiscal 2008 to $154.8
million in the same quarter this year, while operating income as a percent of sales increased from 21.9 percent to 22.0 percent of sales. The decrease in sales from the prior year reflects the decline in external selling prices of nickel alloy from
the segments three primary mills, which negatively impacted external sales by approximately $59 million in the current quarter versus a year ago. Nickel prices decreased approximately 62 percent on the London Metal Exchange (LME) compared to
the same quarter last year. In addition, we estimate the third quarter was negatively impacted by the Boeing strike in the amount of approximately $48 million. The Forged Products segment continued to dedicate more resources for internal production,
which impacts top-line revenues. In addition, our foreign operations reported approximately $37 million in reduced sales year-over-year due to the strong increase in the value of the U.S. dollar relative to international currencies, primarily the
British pound, Euro and Australian dollar. Intercompany sales for this segment, which includes sales within and between segments, increased from $154.7 million in third quarter of fiscal 2008 to $216.7 million in the current quarter (these sales are
eliminated in consolidation). These declines were partially offset by a $50 million, or 66 percent increase in extruded pipe sales. Operating income was negatively impacted in the third quarter due to reduced margin on lost sales related to the
Boeing strike. Increased efficiencies and improved internal coordination of resources and revert usage helped to offset the negative impact, resulting in a slightly improved operating margin over the prior year. In addition, contractual pricing
related to pass-through of increased raw material costs accounted for approximately $75.1 million of sales in the third quarter of fiscal 2009 compared to $90.2 million in the same period last year, which diluted operating margins by 2.6 percentage
points in the current quarter compared to 2.9 percentage points the same period a year ago.



33



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We expect sales for the Forged Products segment to moderately increase in the fourth quarter of fiscal 2009, but to
continue to be adversely affected by the Boeing strike. While we cannot determine what the total Boeing impact will be, we are estimating our fourth quarter sales for the Forged Products segment will be negatively impacted by a lesser extent as
compared to the third quarter impact. In addition, the fourth quarter will be negatively impacted by the damaged 29,000 ton forging press in Houston, including production inefficiencies, requalification costs at other Wyman-Gordon facilities, and
lost leverage. The press is expected to be back on line at the beginning of fiscal 2010. Continued weakness in international currencies will also impact this segment. Offsetting these events, we expect continuing growth in seamless pipe sales, which
continues to have a robust backlog of over $1.0 billion, and non-aerospace nickel alloy sales from our Special Metals Corporation mills, in addition to a full quarter of sales from Hackney Ladish.

Fastener Products

The Fastener Products segment reported
$370.4 million of sales with operating income of $109.4 million, or 29.5 percent of sales, in the third quarter of fiscal 2009, compared to sales of $355.7 million and operating income of $96.7 million, or 27.2 percent of sales, in the third quarter
of fiscal 2008. The increase in sales primarily resulted from aerospace sales growing approximately $30 million or 11 percent compared to the prior year, including approximately $16 million related to the current quarter acquisitions of Airdrome and
Fatigue. We estimate the Boeing strike accounted for a decrease in Fastener Products sales of approximately $8 million in the third quarter. Additional negative impacts to sales in this segment included the continuation of a depressed North American
automotive market, coupled with softening in both the European and Brazilian automotive markets, as well as weakness in other areas of the general industrial market. In addition, our foreign operations reported approximately $20 million in reduced
sales year-over-year due to the strong increase in the value of the U.S. dollar relative to international currencies, primarily the British pound, Euro and Brazilian real. Despite the challenges, the segment reported record operating income as a
percent of sales, primarily due to continued focus on productivity, improved yields, reduced scrap and rework costs, and increased leverage from higher sales volume.

Projected fourth quarter sales for the Fastener Products segment will be impacted by the Boeing strike by a lesser extent as compared to the third quarter impact, but will benefit from a greater number of
manufacturing days, a full quarter of sales from the acquisitions completed in the third quarter, and solid sales backlog for its products. In addition, continued weakness in international currencies will impact this segment.



34



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Consolidated Results of Operations - Comparison Between the Nine Months Ended December 28, 2008 and
December 30, 2007



|                                                            |  |                   |         |   |                     |   |         |   |  |   |       |   |  |       |   
|----------------------------------------------------------- |  | ----------------- | ------- | - | ------------------- | - | ------- | - |  | - | ----- | - |  | ----- | --
|                                                            |  | Nine Months Ended |         |   | Increase/(Decrease) |  
|(In millions, except per share data)                        |  | 12/28/08          |         |   | 12/30/07            |   |         | $ |  |   | %     |  
|Net sales                                                   |  | $                 | 5,223.5 |   |                     | $ | 4,983.5 |   |  | $ | 240.0 |   |  | 4.8   | % 
|Cost of goods sold                                          |  |                   | 3,732.6 |   |                     |   | 3,624.7 |   |  |   | 107.9 |   |  | 3.0   |   
|Selling and administrative expenses                         |  |                   | 290.4   |   |                     |   | 273.5   |   |  |   | 16.9  |   |  | 6.2   |   
|Restructuring and asset impairment                          |  |                   | 11.8    |   |                     |   |        |   |  |   | 11.8  |   |  | 100   |   
|Interest expense                                            |  |                   | 13.9    |   |                     |   | 40.4    |   |  |   | (26.5 | ) |  | (65.6 | ) 
|Interest income                                             |  |                   | (6.9    | ) |                     |   | (4.1    | ) |  |   | 2.8   |   |  | 68.3  |   
|                                                            |  |                   |         |   |                     |   |         |   |  |   |       |   |  |       |   
|Income before income taxes and minority interest            |  |                   | 1,181.7 |   |                     |   | 1,049.0 |   |  |   | 132.7 |   |  | 12.7  |   
|Income tax expense                                          |  |                   | 406.2   |   |                     |   | 353.1   |   |  |   | 53.1  |   |  | 15.0  |   
|Effective tax rate                                          |  |                   | 34.4    | % |                     |   | 33.7    | % |  |   |       |   |  |       |   
|Minority interest                                           |  |                   | (0.4    | ) |                     |   | (0.9    | ) |  |   | 0.5   |   |  | 55.6  |   
|                                                            |  |                   |         |   |                     |   |         |   |  |   |       |   |  |       |   
|Net income from continuing operations                       |  |                   | 775.1   |   |                     |   | 695.0   |   |  |   | 80.1  |   |  | 11.5  |   
|Net income from discontinued operations                     |  |                   | 9.1     |   |                     |   | 13.3    |   |  |   | (4.2  | ) |  | (31.6 | ) 
|                                                            |  |                   |         |   |                     |   |         |   |  |   |       |   |  |       |   
|Net income                                                  |  | $                 | 784.2   |   |                     | $ | 708.3   |   |  | $ | 75.9  |   |  | 10.7  | % 
|                                                            |  |                   |         |   |                     |   |         |   |  |   |       |   |  |       |   
|Net income per share from continuing operations  diluted   |  | $                 | 5.50    |   |                     |   | 4.96    |   |  | $ | 0.5   |   |  | 10.9  | % 
|Net income per share from discontinued operations  diluted |  |                   | 0.07    |   |                     |   | 0.10    |   |  |   | (0.0  | ) |  | (30.0 | ) 
|                                                            |  |                   |         |   |                     |   |         |   |  |   |       |   |  |       |   
|Net income per share - diluted                              |  | $                 | 5.57    |   |                     | $ | 5.06    |   |  | $ | 0.5   |   |  | 10.1  | % 
|                                                            |  |                   |         |   |                     |   |         |   |  |   |       |   |  |       |   
|                                                            |  |                  
|Average market price of key metals                          |  | Nine Months Ended |         |   | Increase/(Decrease) |  
|(per pound)                                                 |  | 12/28/08          |         |   | 12/30/07            |   |         | $ |  |   | %     |  
|Nickel                                                      |  | $                 | 8.55    |   |                     | $ | 15.96   |   |  | $ | (7.41 | ) |  | (46   | )%
|London Metals Exchange1                                     |  |                   |         |   |                     |   |         |   |  |   |       |   |  |       |   
|Titanium                                                    |  | $                 | 3.23    |   |                     | $ | 7.04    |   |  | $ | (3.81 | ) |  | (54   | )%
|Ti 6-4 bulk, Metalprices.com                                |  |                   |         |   |                     |   |         |   |  |   |       |   |  |       |   
|Cobalt                                                      |  | $                 | 36.12   |   |                     | $ | 29.67   |   |  | $ | 6.45  |   |  | 22    | % 
|Metal Bulletin COFM.8 Index1                                |  |                   |         |   |                     |   |         |   |  |   |       |   |  |       |   



|1 | Source:Bloomberg
|- | ----------------

Sales for the first nine months of fiscal 2009 were $5,223.5 million, up $240.0 million from $4,983.5 million in the same period last year. The increase in sales
benefited from continued strength in the IGT markets and, to a lesser extent the aerospace market. The aerospace market showed strong demand through the first six months of the year. In the third quarter, aerospace sales were hindered by the Boeing
strike, which we estimate resulted in approximately $129 million of decreased sales. Contractual material pass-through pricing increased sales by approximately $317.6 million this year versus approximately $338.0 million last year. Contractual
material pass-through pricing adjustments are calculated based on market prices shown in the above table in trailing periods from one to twelve months. The average market price of nickel and titanium decreased 46 percent and 54 percent,
respectively, compared to the same period last year. With regard to the commercial aircraft industry, aircraft deliveries decreased 3.4 percent in calendar year 2008 and Boeing and Airbus have announced relatively flat growth rates through calendar
year 2009. Due to manufacturing lead times, our production volumes are approximately 6 to 9 months ahead of aircraft deliveries.



35



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Net income from continuing operations for the first nine months of fiscal 2009 was $775.1 million, or $5.50 per share
(diluted), compared to net income from continuing operations for the first nine months of fiscal 2008 of $695.0 million, or $4.96 per share (diluted). Net income (after discontinued operations) for the first nine months of fiscal 2009 was $784.2
million, or $5.57 per share (diluted), compared with net income of $708.3 million, or $5.06 per share (diluted), in the same period last year. The primary drivers of the increased income are discussed in the sections below.

Interest and Income Tax

Net interest expense for the nine
months ended December 28, 2008 was $7.0 million, as compared with $36.3 million for the same period last year. The lower net expense is primarily due to significantly reduced debt levels and higher interest income resulting from increased cash
balances compared to the same period last year.

The effective tax rate for the first nine months of fiscal 2009 was 34.4 percent, 0.7 percentage points
higher than the 33.7 percent effective tax rate in the same period last year. The increase in the tax rate was primarily due to an increase in liabilities for uncertain tax positions for the nine months of fiscal 2009 and from favorable audit
settlements and the reversal of valuation allowances recognized in the first nine months of fiscal 2008.

Discontinued Operations

The net income from discontinued operations was $9.1 million, or $0.07 per share (diluted), for the nine months ended December 28, 2008 compared with net income
of $13.3 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 2009 consists primarily of the gains from the sales of the Unbrako fastener business and the
Technova business, in addition to operating income from the discontinued automotive fastener operations. The net income from discontinued operations in the same period of last year principally reflects operating income from the Unbrako, Rescal, SMA
and automotive fastener operations, partially offset by operating losses from the Kladno business and miscellaneous expenses associated with our former Flow Technologies pumps & valves businesses.



36



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Results of Operations by Segment  Comparison Between the Nine Months Ended December 28, 2008 and
December 30, 2007



|                                                 |  |                   |         |   |                      |   |         |   |  |   |       |   |  |      |  
|------------------------------------------------ |  | ----------------- | ------- | - | -------------------- | - | ------- | - |  | - | ----- | - |  | ---- | -
|                                                 |  | Nine Months Ended |         |   | Increase/ (Decrease) |  
|(In millions)                                    |  | 12/28/08          |         |   | 12/30/07             |   |         | $ |  |   | %     |  
|Net sales:                                       |  |                   |         |   |                      |   |         |   |  |   |       |   |  |      |  
|Investment Cast Products                         |  | $                 | 1,751.2 |   |                      | $ | 1,581.4 |   |  | $ | 169.8 |   |  | 10.7 | %
|Forged Products                                  |  |                   | 2,300.4 |   |                      |   | 2,358.1 |   |  |   | (57.7 | ) |  | (2.4 | )
|Fastener Products                                |  |                   | 1,171.9 |   |                      |   | 1,044.0 |   |  |   | 127.9 |   |  | 12.3 |  
|                                                 |  |                   |         |   |                      |   |         |   |  |   |       |   |  |      |  
|Consolidated net sales                           |  | $                 | 5,223.5 |   |                      | $ | 4,983.5 |   |  | $ | 240.0 |   |  | 4.8  | %
|                                                 |  |                   |         |   |                      |   |         |   |  |   |       |   |  |      |  
|Operating income (loss):                         |  |                   |         |   |                      |   |         |   |  |   |       |   |  |      |  
|Investment Cast Products                         |  | $                 | 442.9   |   |                      | $ | 376.8   |   |  | $ | 66.1  |   |  | 17.5 | %
|% of sales                                       |  |                   | 25.3    | % |                      |   | 23.8    | % |  |   |       |   |  |      |  
|Forged Products                                  |  |                   | 490.7   |   |                      |   | 515.0   |   |  |   | (24.3 | ) |  | (4.7 | )
|% of sales                                       |  |                   | 21.3    | % |                      |   | 21.8    | % |  |   |       |   |  |      |  
|Fastener Products                                |  |                   | 340.5   |   |                      |   | 267.8   |   |  |   | 72.7  |   |  | 27.1 |  
|% of sales                                       |  |                   | 29.1    | % |                      |   | 25.7    | % |  |   |       |   |  |      |  
|Corporate expense                                |  |                   | (73.6   | ) |                      |   | (74.3   | ) |  |   | 0.7   |   |  | 0.9  |  
|Consolidated segment operating income            |  |                   | 1,200.5 |   |                      |   | 1,085.3 |   |  | $ | 115.2 |   |  | 10.6 | %
|                                                 |  |                   |         |   |                      |   |         |   |  |   |       |   |  |      |  
|% of sales                                       |  |                   | 23.0    | % |                      |   | 21.8    | % |  |   |       |   |  |      |  
|Restructuring and asset impairment               |  |                   | 11.8    |   |                      |   |        |   |  |   |       |   |  |      |  
|Interest expense, net                            |  |                   | 7.0     |   |                      |   | 36.3    |   |  |   |       |   |  |      |  
|                                                 |  |                   |         |   |                      |   |         |   |  |   |       |   |  |      |  
|Income before income taxes and minority interest |  | $                 | 1,181.7 |   |                      | $ | 1,049.0 |   |  |   |       |   |  |      |  
|                                                 |  |                   |         |   |                      |   |         |   |  |   |       |   |  |      |  
|                                                 |  |                  
|                                                 |  | Nine Months Ended |         |   | Increase/ (Decrease) |  
|Intercompany sales1                              |  | 12/28/08          |         |   | 12/30/07             |   |         | $ |  |   | %     |  
|Investment Cast Products2                        |  | $                 | 195.2   |   |                      | $ | 85.1    |   |  | $ | 110.1 |   |  | 129  | %
|Forged Products3                                 |  |                   | 655.8   |   |                      |   | 432.5   |   |  |   | 223.3 |   |  | 52   |  
|Fastener Products4                               |  |                   | 87.8    |   |                      |   | 82.3    |   |  |   | 5.5   |   |  | 7    |  
|                                                 |  |                   |         |   |                      |   |         |   |  |   |       |   |  |      |  
|Total intercompany sales                         |  | $                 | 938.8   |   |                      | $ | 599.9   |   |  | $ | 338.9 |   |  | 56   | %
|                                                 |  |                   |         |   |                      |   |         |   |  |   |       |   |  |      |  



|1 | Intercompany sales consist of each segments total intercompany sales, including intercompany sales within a
segment and between segments.
|- | ------------------------------------------------------------------------------------------------------------------------------------------



|2 | Investment Cast Products: Includes sales between segments of $18.7 million and $21.9 million for the first nine months
of fiscal 2009 and 2008, respectively.
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------



|3 | Forged Products: Includes sales between segments of $44.6 million and $24.1 million for the first nine months of fiscal
2009 and 2008, respectively.
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------



|4 | Fastener Products: Includes sales between segments of $2.5 million and $1.7 million for the first nine months of fiscal
2009 and 2008, respectively.
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------



37



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Investment Cast Products

Investment Cast Products sales increased 10.7 percent from $1,581.4 million in the first nine months of fiscal 2008 to $1,751.2 million this year. Operating income for the segment increased 17.5 percent, from
$376.8 million, or 23.8 percent of sales, a year ago to $442.9 million, or 25.3 percent of sales, in the first nine months of fiscal 2009. The increase in sales was driven by continued strength in the IGT markets, and to a lesser extent the
aerospace market. The aerospace market showed strong demand through the first six months of the year. In the third quarter, aerospace sales were hindered by the Boeing strike, which we estimate resulted in approximately $73 million of decreased
sales. The increase in operating income reflected the impact of the higher sales volume and operating improvements. The increase in operating margins as a percentage of sales was mainly due to the leverage from higher sales volume and improved
manufacturing performance. The first nine months of fiscal 2009 included approximately $69.4 million related to contractual pass-through of material costs versus approximately $71.7 million in the same period last year, diluting operating margins by
1.0 percentage point in the first nine months of fiscal 2009 compared to 1.1 percentage points in the same period a year ago.

Forged Products

Forged Products sales were $2,300.4 million for the first nine months of fiscal 2009, a decrease of 2.4 percent, compared to sales of
$2,358.1 million in the same period last year. Operating income decreased 4.7 percent from $515.0 million, or 21.8 percent of sales, in the first nine months of fiscal 2008 to $490.7 million, or 21.3 percent of sales, this year. The decrease in
sales reflects significantly lower external selling prices of alloy from the segments three primary mills, primarily nickel and titanium, which decreased approximately 46 percent and 54 percent, respectively, compared to the same period last
year. In addition, top-line revenues were impacted by increased intercompany sales, which increased 52 percent over the prior year, and we estimate the Boeing strike negatively impacted sales by approximately $48 million. These decreases in sales
were partially offset by increased demand for extruded pipe, which increased $120.6 million or 46 percent year-over-year. Operating income was negatively impacted in the first nine months of fiscal 2009 due to Hurricane Ike, damage to two forging
presses at Wyman-Gordon, and negative leverage from the Boeing strike. These effects were partially offset by successful implementation of cost-reduction initiatives. The first nine months of fiscal 2009 included approximately $237.9 million related
to contractual pass-through of higher material costs versus approximately $255.2 million in the same period last year, diluting operating margins by 2.5 percentage points in the first nine months of fiscal 2009 compared to 2.7 percentage points in
the same period a year ago.

Fastener Products

The Fastener Products segment reported $1,171.9 million of sales with operating income of $340.5 million, or 29.1 percent of sales, in the first nine months of fiscal 2009, compared to sales of $1,044.0 million and operating income of
$267.8 million, or 25.7 percent of sales in the same period last year. The increase in sales was driven by continued strength and market share increases in the aerospace markets, resulting in an approximately 16 percent increase in aerospace sales
over the same period a year ago. This increase was partially offset by a decline in automotive fastener sales, driven by slowing North American, and more recently, European and Brazilian automobile production. Operating income as a percent of sales
benefited from strong aerospace sales and the impact of continued cost take-outs and improved manufacturing processes throughout the segment.

Changes
in Financial Condition and Liquidity

Total assets of $6,448.7 million at December 28, 2008 represented a $398.6 million increase from the $6,050.1
million balance at March 30, 2008, principally reflecting a $496.8 million addition of total assets from the acquisitions of Airdrome, Fatigue and Hackney Ladish, in addition to $55.6 million of higher cash balances. Total capitalization at
December 28, 2008 was $4,925.4 million, consisting of $312.3 million of debt and $4,613.1 million of equity. The debt-to-capitalization ratio declined to 6.3% at December 28, 2008 from 8.1% at the end of fiscal 2008.



38



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Cash as of December 28, 2008 was $276.9 million, up $55.6 million from the end of fiscal 2008, and total debt was
$312.3 million (including $0.5 million from discontinued operations), down $42.7 million since the end of fiscal 2008. Debt, net of cash, decreased from $133.7 million at the end of fiscal 2008 to $35.4 million at December 28, 2008, reflecting
$98.3 million of positive cash flow for the first nine months of the year. The net positive cash flow reflects cash generation from operations of $795.2 million and $23.2 million from the issuance of common stock and related tax benefits, partially
offset by $469.5 million of cash paid for the acquisitions of Airdrome, Fatigue and Hackney Ladish, capital expenditures of $149.5 million, effect of exchange rate changes of $83.5 million, and cash dividends of $12.5 million.

Capital spending during fiscal 2009, which is anticipated to be between approximately $210 million and $230 million, will principally provide for additional capacity
expansion, cost reduction, and equipment upgrades throughout the company. We expect to contribute approximately $26.4 million to the defined benefit pension plans during fiscal year 2009, of which approximately $11.0 million is expected to be
voluntary. In addition, we expect to contribute approximately $11.0 million to the other postretirement benefit plans during fiscal year 2009.

We believe
we will be able to meet our short- and longer-term liquidity needs 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 our existing $1.0 billion revolving credit facility or new bank credit facilities, issuance of public or privately placed debt securities, or the issuance of equity instruments.

As noted above, our revolving bank credit facility (Credit Agreement) provides available borrowing up to $1.0 billion through May 2012. The full amount was
available for borrowings as of the end of the third quarter of fiscal 2009. Early in the fourth quarter, our unused borrowing capacity decreased approximately $16 million as we issued a stand-by letter of credit under the credit facility. The Credit
Agreement contains various standard financial covenants, including maintenance of minimum net worth, interest coverage ratio and leverage ratio. The financial covenants in the Credit Agreement are our most restrictive covenants.

Our covenant requirements and actual ratios as of December 28, 2008 were as follows (dollars in millions):



|                                        |  |                      |  |        |           
|--------------------------------------- |  | -------------------- |  | ------ | ----------
|                                        |  | Covenant Requirement |  | Actual
|Consolidated minimum net worth(1)       |  | $2,488.9 (minimum)   |  | $      | 4,613.1   
|Consolidated interest coverage ratio(1) |  | 2.25:1.00 (minimum)  |  |        | 78.76:1.00
|Consolidated leverage ratio(1)          |  | 3.25:1.00 (maximum)  |  |        | 0.17:1.00 



|(1) | Terms are defined in the Amended and Restated Credit Agreement filed as an exhibit to Form 8-K on October 19,
2005.
|--- | -------------------------------------------------------------------------------------------------------------------

As of December 28, 2008, we were in compliance with all financial covenants of our loan agreements.

Historically, we have also issued commercial paper as a method of raising short-term liquidity. We believe we continue to have the ability to issue commercial paper,
even in the current credit markets, and have issued minor amounts of commercial paper in the third quarter and early in the fourth quarter to cover short-term cash requirements. We do not anticipate any changes in our ability to borrow under our
current credit facility, but changes in the financial condition of the participating financial institutions could negatively impact our ability to borrow funds in the future. Should that circumstance arise, we believe that we would be able to
arrange any needed financing, although we are not able to predict what the terms of any such borrowings would be, or the source of the borrowed funds, due to the current instability in the global credit markets.

Critical Accounting Policies

Our discussion and analysis of our
financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these
financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amount
of revenues and expenses during the reporting period. Actual results may differ from those estimates.

We believe that the estimates, assumptions and
judgments involved in the accounting policies described in the Managements Discussion and Analysis of Financial Condition and Results of Operations section of our most recent Annual Report on Form 10-K are critical to our business
operations and the understanding of our results of operations. There have been no significant changes in our critical accounting policies during the first nine months of fiscal 2009.



39



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The discussion below expands the disclosure from the Annual Report on Form 10-K for the year ended March 30, 2008
with respect to goodwill and acquired intangibles.

Goodwill and acquired intangibles

From time to time, we acquire businesses in purchase transactions that typically result in the recognition of goodwill and other intangible assets. Acquired goodwill is not amortized but is subject to impairment
testing at least annually and as other events and circumstances dictate, as discussed below. Other intangible assets are typically subject to amortization and therefore will likely increase future expenses. The determination of the value of such
intangible assets requires management to make estimates and assumptions.

Goodwill and indefinite-lived intangible assets are tested for impairment at a
minimum each fiscal year in the second quarter or when events or circumstances indicate that the carrying value of these assets may not be recoverable. Our reporting units consist of our Investment Cast Products and Forged Products operating
segments as well as a number of reporting units in our Fasteners Products operating segment. The Fasteners Products operating segment includes several aggregated component units (referred to as the Fasteners Products reporting unit) and three other
reporting units for which the segment manager regularly reviews performance. During the nine months ended December 28, 2008, PCC Precision Tool group (PTG) was included in the Fasteners Group reporting unit as the business is
closely related and integral to the Fasteners Group reporting unit. During fiscal year 2008, PTG was a separate reporting unit. We performed an impairment test for the Fasteners Products reporting unit as a result of this change and no impairment
was indicated. There were no other changes to our reporting units for goodwill impairment testing during the nine months ended December 28, 2008 and fiscal year 2008.

Testing for goodwill impairment involves the estimation of the fair value of the reporting units. Discounted cash flow models are typically used in these valuations. Such models require the use of significant
estimates and assumptions primarily based on future cash flows, expected market growth rates, our estimates of sales volumes, sales prices and related costs, and the discount rate applied, which reflects the weighted average cost of capital.
Management uses the best available information at the time fair values of the reporting units are estimated; however, estimates could be materially impacted by factors such as changes in growth trends and specific industry conditions, with the
potential for a corresponding adverse effect on the consolidated financial statements potentially resulting in impairment of the goodwill. We also consider comparable transactions to estimate the fair value of the reporting units. The cash flow
models used to determine fair value are most sensitive to the expected future cash flows and the discount rate for each reporting unit. We performed a sensitivity analysis on both of these factors and determined that the forecast for future earnings
before interest and taxes used in the cash flow model could decrease by 10% and the discount rate used could increase by a factor of 4% from the rate utilized, and the goodwill of our reporting segments would not be impaired. The reporting unit that
would be most sensitive to worsening economic conditions has $12.4 million of goodwill recorded as of December 28, 2008. Other than the change in reporting units within the Fasteners operating segment, 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.



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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 and general industrial cycles; the relative
success of our entry into new markets; competitive pricing; the financial viability of our significant customers; the impact on the Company of customer labor disputes; demand, timing, and market acceptance of new commercial and military programs;
the availability and cost of energy, materials, supplies, and insurance; the cost of pension and postretirement medical benefits; equipment failures; relations with our employees; our ability to manage our 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; the impact of adverse weather conditions
or natural disasters; the availability and cost of financing; and implementation of new technologies and process improvements. Any forward-looking statements should be considered in light of these factors. We undertake no obligation to update 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 our market risk exposure since March 30, 2008.



|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
have materially affected, or are 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
|------- | -----------------

In October 2008, the West Virginia Department of
Environmental Protection (DEP) filed a lawsuit in the Circuit Court of Cabell County alleging that a Special Metals Corporation subsidiary placed off-site hazardous waste water from its Burnaugh, Kentucky facility into two non-permitted
sumps at its Huntington, West Virginia facility. The waste water was transported in 26 shipments over a three-day period in May-June 2007. The complaint acknowledges the subsidiarys eventual proper treatment and disposal of the waste water.
The complaint does not allege any harm to the environment. The DEP seeks a fine of up to $25,000 per day in statutory civil penalties for each violation, in addition to attorney fees and costs. We are currently investigating the incident and believe
that any resulting judgment or settlement will not have a material adverse effect on our consolidated financial position, results of operations or cash flows.

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



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

Our growth strategy includes business
acquisitions with associated risks.

In fiscal 2009, we completed the acquisition of Airdrome Holdings LLC, Fatigue Technology, Inc. and Hackney
Ladish Holding Corp. We expect that we will continue to make acquisitions of complementary businesses, products and technologies to enable us to add products and services for our core customer base and for related markets, and to expand each of our
businesses geographically. Our ability to continue to engage in acquisitions may be limited if necessary financing is difficult to access, unavailable or too costly to support a transaction. The success of completed transactions will depend on our
ability to integrate assets and personnel and to apply our manufacturing processes and controls to the acquired businesses. Although our acquisition strategy generally emphasizes the retention of key management of the acquired businesses and an
ability of the acquired business to continue to operate independently, various changes may be required to integrate the acquired businesses into our operations, to assimilate new employees and to implement reporting, monitoring and forecasting
procedures. Business acquisitions entail a number of other risks, including:



| |  |  | inaccurate assessment of undisclosed liabilities;
| | - |  | -------------------------------------------------



| |  |  | entry into markets in which we may have limited or no experience;
| | - |  | -----------------------------------------------------------------



| |  |  | diversion of managements attention from our core businesses;
| | - |  | -------------------------------------------------------------



| |  |  | difficulties in realizing projected efficiencies, synergies and cost savings; and
| | - |  | ---------------------------------------------------------------------------------



| |  |  | increase in our indebtedness and a limitation in our ability to access additional capital when needed.
| | - |  | ------------------------------------------------------------------------------------------------------

Our failure to adequately address these acquisition risks could cause us to fail to realize the benefits we anticipated from the transactions.

We operate in cyclical markets.

A significant portion of our
revenues are derived from the highly cyclical aerospace and power generation markets. Our sales to the aerospace industry constituted 55 percent of our total sales in fiscal 2008. Our power generation sales constituted 24 percent of our total sales
in fiscal 2008.

The commercial aerospace industry is historically driven by the demand from commercial airlines for new aircraft. The U.S. and
international commercial aviation industries continue to face challenges arising from competitive pressures and fuel costs. Demand for commercial aircraft is influenced by airline industry profitability, trends in airline passenger traffic, the
state of U.S. and world economies, the ability of aircraft purchasers to obtain required financing and numerous other factors including the effects of terrorism and health and safety concerns. The military aerospace cycle is highly dependent on U.S.
and foreign government funding; however, it is also driven by the effects of terrorism, a changing global political environment, U.S. foreign policy, the retirement of older aircraft and technological improvements to new engines that increase
reliability. Accordingly, the timing, duration and severity of cyclical upturns and downturns cannot be forecast with certainty. Downturns or reductions in demand could have a material adverse effect on our business.



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The power generation market is also cyclical in nature. Demand for power generation products is global and is affected by
the state of the U.S. and world economies, the availability of financing to power generation project sponsors and the political environments of numerous countries. The availability of fuels and related prices also have a large impact on demand.
Reductions in demand for our power generation products could have a material adverse effect on our business.

We also sell products and services to
customers in the automotive, medical, chemical and petrochemical, pulp and paper, and other general industrial markets. Each of these markets is cyclical in nature. Customer demand for our products or services in these markets may fluctuate widely
depending upon U.S. and world economic conditions, the availability of financing and industry-specific factors. Cyclical declines or sustained weakness in any of these markets could have a material adverse effect on our business.

Our business is dependent on a small number of direct and indirect customers.

A substantial portion of our business is conducted with a relatively small number of large direct customers, including General Electric Company, United Technologies Corporation and Rolls Royce plc. General Electric
accounted for approximately 12 percent of our total sales for fiscal 2008. No other customer accounted for more than 10 percent of total sales; however, United Technologies and Rolls Royce are also considered key customers. A financial hardship
experienced by any one of these three customers, the loss of any of them, or a reduction in or substantial delay of orders from any of them, could have a material adverse effect on our business.

Additionally, a significant portion of our aerospace products are ultimately used in the production of new commercial aircraft. There are only two primary manufacturers
of large commercial aircraft in the world, Boeing and Airbus. A significant portion of our aerospace sales are dependent on the number of new aircraft built by these two manufacturers, which is in turn dependent on a number of factors over which we
have little or no control. Those factors include the demand for new aircraft from airlines around the globe and factors that impact manufacturing capabilities such as the availability of raw materials and manufactured components, changes in the
regulatory environment and labor relations between the aircraft manufacturers and their work forces. A significant interruption or slow down of the number of new aircraft built by aircraft manufacturers could have a material adverse effect on our
business.

Sales to the military sector constituted approximately 12 percent of our fiscal 2008 sales. Defense spending is subject to appropriations and to
political pressures that influence which programs are funded and those which are cancelled. Reductions in domestic or foreign defense budgets or military aircraft procurement, delays in funding, or reprioritization of government spending away from
defense programs in which we participate could adversely affect our business.

Our business depends, in part, on the demand for and market acceptance
of new commercial and military aircraft programs.

The success of our business will depend, in part, on the success of new commercial and military
aircraft programs including the Boeing 787 and the Airbus A380 programs. We are currently under contract to supply components for a number of new commercial, general aviation, and military aircraft programs. Cancellation, reductions or delays
of orders or contracts by our customers on any of these programs could have a material adverse effect on our business.

The competitive nature of our
business results in pressure for price concessions to our customers and increased pressure to reduce our costs.

We are subject to substantial
competition in all of the markets we serve, and we expect this competition to continue. As a result, we have made significant long term price concessions to our customers in the aerospace and power generation markets from time to time, and we expect
customer pressure for further long term price concessions to continue. Maintenance of our profitability will depend, in part, on our ability to sustain a cost structure that enables us to be cost-competitive. If we are unable to adjust our costs
relative to our pricing, or if we are unable to continue to compete effectively, our business will suffer. Our effectiveness in managing our cost structure will be a key determinate of future profitability and competitiveness.



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Our business is dependent on a number of raw materials that are subject to volatility in price and availability.

We use a number of raw materials in our products, including certain metals such as cobalt, titanium, nickel, tantalum and molybdenum, which are
found in only a few parts of the world and are available from a limited number of suppliers. The availability and costs of these metals may be influenced by private or government cartels, changes in world politics, unstable governments in exporting
nations and inflation. These metals are required for the alloys used or manufactured in our investment castings, forged products and fasteners segments. We have escalation clauses for nickel, titanium and other metals in a number of our long-term
contracts with major customers, but we are not usually able to fully offset the effects of changes in raw material costs. We also employ price-in-effect metal pricing in our alloy production businesses to lock-in the current cost of
metal at the time of production. The ability of key metal suppliers to meet quality and delivery requirements can also impact our ability to meet commitments to customers. Future shortages or price fluctuations in raw materials could result in
decreased sales as well as margins, or otherwise adversely affect our business. The enactment of new or increased import duties on raw materials imported by us could also increase the costs to us of obtaining the raw materials and might adversely
affect our business.

Our business is affected by federal rules, regulations and orders applicable to government contractors.

A number of our products are manufactured and sold under U.S. government contracts or subcontracts. Consequently, we are directly and indirectly subject to various
federal rules, regulations and orders applicable to government contractors. From time to time, we are also subject to government inquiries and investigations of our business practices due to our participation in government programs. These inquiries
and investigations are costly and consuming of internal resources. Violation of applicable government rules and regulations could result in civil liability, in cancellation or suspension of existing contracts or in ineligibility for future contracts
or subcontracts funded in whole or in part with federal funds, any of which could have a material adverse effect.

Our business is subject to
environmental regulations and related liabilities and liabilities associated with chemicals and substances in the workplace.

We are subject to
various federal, state and foreign environmental laws and regulations concerning, among other things, water discharges, air emissions, hazardous material and waste management and environmental cleanup. Environmental laws and regulations continue to
evolve and we may become subject to increasingly stringent environmental standards in the future, particularly under air quality and water quality laws and standards related to climate control issues such as greenhouse gas emissions. We are required
to comply with environmental laws and the terms and conditions of multiple environmental permits. Failure to comply with these laws or permits could result in fines and penalties or the need to install pollution control equipment that could be
costly. We also may be required to make additional expenditures, which could be significant, relating to environmental matters on an ongoing basis. We also own properties, or conduct or have conducted operations at properties, where hazardous
materials have been used for many years, including during periods before careful management of these materials was required or generally believed to be necessary. Consequently, we will continue to be subject to environmental laws that impose
liability for historical releases of hazardous substances.

Our financial statements include reserves for future costs arising from environmental issues
relating to our properties and operations. Our accruals for known environmental liabilities represent our best estimate of our probable future obligations for the investigation and remediation of known contaminated sites. Our accruals include
asserted and unasserted claims. The estimate of our environmental costs is based on currently available facts, present laws and regulations and current technology and take into consideration our prior experience in site investigation and
remediation, the data available for each site, and the professional judgment of our environmental specialists and consultants. Although recorded liabilities include our best estimate of all probable costs, our total costs for the final settlement of
each site cannot be predicted with certainty due to the variety of factors that make potential costs associated with contaminated sites inherently uncertain, such as: the nature and extent of site contamination, available remediation alternatives,
the extent to which remedial actions will be required, the time period over which costs will be incurred, the number and economic viability of other responsible parties, and whether we have any opportunity of contribution from third parties,
including recovery from insurance policies. In addition, sites that are in the early stages of investigation are subject to greater uncertainties than mature sites that are close to completion. Although the sites we identify vary across the
spectrum, approximately half of our sites could be considered at an early stage of the investigation and remediation process. Therefore, our cost estimates and the accruals associated with those sites are subject to greater uncertainties.
Environmental contingent liabilities are often resolved over a long period of time and the timing of expenditures depends on a number of factors that vary by site. We expect that we will expend present accruals over many years and that remediation
of all currently known sites will be completed within 30 years.



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While it is possible that a significant portion of the accrued costs may be paid out over the next ten years, we anticipate that no individual site will be
considered to be material. We cannot ensure that our reserves are adequate to cover the total cost of remedial measures that may eventually be required by environmental authorities with respect to known environmental matters or the cost of claims
that may be asserted in the future with respect to environmental matters about which we are not yet aware. Accordingly, the costs of environmental claims may exceed the amounts reserved.

We have been named as a PRP at sites identified by the EPA and state regulatory agencies for investigation and remediation under CERCLA and similar state statutes. Under CERCLA, and under similar state statutes,
potentially responsible parties are jointly and severally liable, and therefore we will continue to be potentially liable to the government or third parties for the full cost of remediating contamination at our facilities or former facilities or at
third-party sites where we have been designated a PRP. In estimating our current reserves for environmental matters, we have assumed that we will not bear the entire cost of remediation of every site to the exclusion of other PRPs who may be jointly
and severally liable. It is also possible that we will be designated a PRP at additional sites in the future.

Like many other industrial companies in
recent years, we are defendants in lawsuits alleging personal injury as a result of exposure to chemicals and substances in the workplace, including asbestos. To date, we have been dismissed from a number of these suits and have settled a number of
others. The outcome of litigation such as this is difficult to predict and a judicial decision unfavorable to us could be rendered, possibly having a material adverse effect on our business.

Our business is subject to risks associated with international operations.

We purchase products from and supply products to businesses located outside of the United States. We also have significant operations located outside the United States. In fiscal 2008, approximately 20 percent of our
total sales were attributable to our non-U.S. subsidiaries. A number of risks inherent in international operations could have a material adverse effect on our international operations and, consequently, on our results of operations, including:



| |  |  | currency fluctuations;
| | - |  | ----------------------



| |  |  | difficulties in staffing and managing multi-national operations;
| | - |  | ----------------------------------------------------------------



| |  |  | general economic and political uncertainties and potential for social unrest in countries in which we operate;
| | - |  | --------------------------------------------------------------------------------------------------------------



| |  |  | limitations on our ability to enforce legal rights and remedies;
| | - |  | ----------------------------------------------------------------



| |  |  | restrictions on the repatriation of funds;
| | - |  | ------------------------------------------



| |  |  | changes in trade policies;
| | - |  | --------------------------



| |  |  | tariff regulations;
| | - |  | -------------------



| |  |  | difficulties in obtaining export and import licenses; and
| | - |  | ---------------------------------------------------------



| |  |  | the risk of government financed competition.
| | - |  | --------------------------------------------

We
sell extruded pipe for the power generation market. A majority of these sales are exported to power generation customers in China, some of which are affiliated with the Chinese government. These sales are subject to the risks associated with
international sales generally. In addition, changes in demand could result from a reduction of power plant build rates in China due to economic conditions or otherwise, or to increased competition from Chinese manufacturers who have cost advantages
or who may be preferred suppliers.

Any lower than expected rating of our bank debt and debt securities could adversely affect our business.

Two rating agencies, Moodys and Standard & Poors (S&P), rate our debt securities. S&P upgraded our debt rating
during fiscal 2008 and Moodys upgraded our debt rating during fiscal 2009. If the rating agencies were to reduce their current ratings, our interest expense may increase and the instruments governing our indebtedness could impose additional
restrictions on our ability to make capital expenditures or otherwise limit our flexibility in planning for, or reacting to, changes in our business and the industries in which we operate or our ability to take advantage of potential business
opportunities. These modifications also could require us to meet more stringent financial ratios and tests or could require us to grant a security interest in our assets to secure the indebtedness. Our ability to comply with covenants contained in
the instruments governing our existing and future indebtedness may be affected by events and circumstances beyond our control. If we breach any of these covenants, one or more events of default, including cross-defaults between multiple components
of our indebtedness, could result. These events of default could permit our creditors to declare all amounts owing to be immediately due and payable, and terminate any commitments to make further extensions of credit.



45



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Our business involves risks associated with complex manufacturing processes.

Our manufacturing processes depend on certain sophisticated and high-value equipment, such as some of our forging presses for which there may be only limited or no
production alternatives. Unexpected failures of this equipment could result in production delays, revenue loss and significant repair costs. In addition, equipment failures could result in injuries to our employees. Moreover, the competitive nature
of our businesses requires us to continuously implement process changes intended to achieve product improvements and manufacturing efficiencies or to meet more stringent regulatory requirements. These process changes may at times result in
production delays, quality concerns and increased costs. Any disruption of operations at our facilities due to equipment could have a material adverse effect on our business.

We could be faced with labor shortages, disruptions or stoppages if our relations with our union employees were to deteriorate.

Our operations rely heavily on maintaining good relations with our employees and any labor shortage, disruption or stoppage caused by any deterioration in employee relations, or difficulties in the renegotiation of
labor contracts could reduce our operating margins and income. Approximately 25 percent of our employees are affiliated with unions or covered by collective bargaining agreements. Failure to negotiate a new labor agreement when required could result
in a work stoppage. Although we believe that our labor relations have generally been satisfactory, it is possible that we could become subject to additional work rules imposed by agreements with labor unions, or that work stoppages or other labor
disturbances could occur in the future, any of which could reduce our operating margins and income and place us at a disadvantage relative to non-union competitors.

Product warranty and product liability risks could adversely affect our operating results.

We produce many
critical parts for commercial and military aircraft. Failure of our parts could give rise to substantial product liability claims. We maintain insurance addressing this risk, but there can be no assurance that the insurance coverage will be adequate
or will continue to be available on terms acceptable to us. We manufacture our parts to strict contractually-established standards and tolerances using complex manufacturing processes. If we fail to meet the contractual requirements for a product we
may be subject to product warranty costs and claims. These costs are generally not insured.

We could be required to make additional contributions to
our defined benefit pension and postretirement benefit plans as a result of adverse changes in interest rates and pension investments.

Our
estimates of liabilities and expenses for pensions and other postretirement benefits incorporate significant assumptions including the rate used to discount the future estimated liability, the long-term rate of return on plan assets and assumptions
relating to the employee workforce including salary increases, medical costs, retirement age and mortality. Our results of operations, liquidity, or shareholders equity in a particular period could be affected by a decline in the rate of
return on plan assets, the rate used to discount the future estimated liability, or changes in employee workforce assumptions. We may have to contribute more cash to various pension plans and record higher pension-related expenses in future periods
as a result of decreases in the value of investments held by these plans.

A global recession or continued disruption in global financial markets
could adversely affect us.

A global recession or continued disruption in the global financial markets presents risks and uncertainties that we
currently cannot predict. Currently, these conditions have not materially impaired the demand for our products or our access to credit to finance our operations, but if these conditions continue or worsen, we face risks that may include:



| |  |  | declines in revenues and profitability from reduced or delayed orders by our customers;
| | - |  | ---------------------------------------------------------------------------------------



| |  |  | supply problems associated with any financial constraints faced by our suppliers;
| | - |  | ---------------------------------------------------------------------------------



| |  |  | restrictions on our access to short-term commercial paper borrowings or other credit sources;
| | - |  | ---------------------------------------------------------------------------------------------



| |  |  | reductions to our banking group or to our committed credit availability due to combinations or failures of financial institutions; and
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------



| |  |  | increases in corporate tax rates to finance government spending programs.
| | - |  | -------------------------------------------------------------------------



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|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.



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



|     |  |                                                                                                                                                                                                        
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1  |  | Articles of Amendment to Restated Articles of Incorporation of Precision Castparts Corp. (Incorporated herein by reference to Exhibit 3.1 to the Form 8-K filed December 16,
2008.)                    
|     | 
|3.2  |  | Rights Agreement, dated December 12, 2008, between Precision Castparts Corp. and The Bank of New York Mellon (Incorporated herein by reference to Exhibit 4.1 to the Form 8-K filed December 16,
2008.)
|     | 
|10.1 |  | Form of Change of Control Agreement for Executives of Precision Castparts Corp.                                                                                                                        
|     | 
|10.2 |  | Amendment to William D. Larsson agreement, dated November 13, 2008.                                                                                                                                    
|     | 
|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.                                                                                                



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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 6, 2009 |  |  |  | /s/ Shawn R. Hagel                          
|                       |  |  |  | Shawn R. Hagel                              
|                       |  |  |  | Senior Vice President and                   
|                       |  |  |  | Chief Financial Officer                     
|                       |  |  |  | (Principal Financial and Accounting Officer)



48