We listened carefully to the recent Boeing call on the 787 schedule push out. Our present slightly-positive projection of Free Cash Flow at $5 million continues to assume that we will be paid for our work on the 787 before the end of our fiscal year.

Taxes

Our effective tax rate in the first quarter was 34.8%. That's up slightly from a year ago. During this most recent quarter we completed our FIN 48 implementation review. In the course of this review we identified some tax exposures related to our operations in China and increased our tax liabilities by $1.2 million in this quarter. In future quarters we are projecting some tax benefits associated with foreign tax credits and R&D credits to give us an effective rate of 31.5% for the year.

Other items

Our non-cash stock compensation expense in the quarter was $1.6 million. Loss reserves declined by $1.4 million over the quarter, reflecting the transition of business jet programs from development into production.

At the end of December our Net Debt to Total Capitalization stood at 39%.