Carpenter Technology (CRS)

Selling, General and Administrative Expenses

Selling, general and administrative expenses of $31.0 million were 9.4 percent of net sales (11.6 percent of net sales excluding surcharges) as compared with $33.8 million or 6.7 percent of net sales (9.6 percent of net sales excluding surcharges) in the same quarter a year ago. Excluding the impact of changes in net pension expense discussed above, expenses improved by 12 percent over last year’s third quarter principally as a result of reductions in costs associated with compensation expense, outside services and travel-related expenses.

Selling, General and Administrative Expenses

Selling, general and administrative expenses of $100.5 million for the nine months ended March 31, 2009 were 9.1 percent of net sales (11.9 percent of net sales excluding surcharges) as compared with $103.5 million or 7.4 percent of net sales (10.6 percent of net sales excluding surcharges) in the same period a year ago. Selling, general and administrative expenses decreased by 7 percent during the current nine-month period relative to the comparable period a year ago after excluding the impact of changes in net pension expense discussed above. The decline reflects reductions in compensation expense, outside services and travel-related expenses during the current year.

Selling, General and Administrative Expenses

Selling, general and administrative expenses of $36.2 million were 10.0 percent of net sales (13.2 percent of net sales excluding surcharges) as compared with $36.6 million or 8.3 percent of net sales (11.6 percent of net sales excluding surcharges) in the same quarter a year ago. The relatively total flat levels of selling, general and administrative expenses reflect an increase in the net pension expense during the recent quarter that served to offset reductions in compensation expense, outside services and travel-related expenses.

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Selling, General and Administrative Expenses

Selling, general and administrative expenses of $69.5 million for the six months ended December 31, 2008 were 9.0 percent of net sales (12.1 percent of net sales excluding surcharges) as compared with $69.8 million or 7.8 percent of net sales (11.2 percent of net sales excluding surcharges) in the same period a year ago. The relatively flat levels of selling, general and administrative expenses reflect an increase in the net pension expense that served to offset reductions in compensation expense, outside services and travel-related expenses during the current year.

Selling, General and Administrative Expenses

Selling, general and administrative expenses of $33.4 million were 8.1 percent of net sales as compared with $33.2 million or 7.4 percent of net sales in the same quarter a year ago. The relatively flat levels of selling, general and administrative expenses reflect an increase in the net pension expense during the recent quarter being offset by reductions in compensation expense.

Based on the decline in the market value of the securities in our defined benefit pension plans as of June 30, 2008, the Company will experience a pre-tax net pension expense during fiscal 2009 of $20.1 million. This is a non-cash expense that will be amortized equally during the fiscal year. The pension expense equates to a year-to-year difference in reported earnings of $0.28 per share, with a first quarter pre-tax impact of $5.1 million or $0.06 per share.

Selling, General and Administrative Expenses

Selling, general and administrative expenses in fiscal year 2008 were $163.6 million, or 8.4 percent of net sales, compared to $123.1 million, or 6.7 percent of net sales, in fiscal year 2007. The increase is primarily attributable to investments in systems and resources needed to drive our future growth initiatives as well as the $21.0 million charge recorded in the fourth quarter of fiscal year 2008 related to the Boarhead Farms matter discussed later below. Fiscal year 2007 included $4.4 million related to executive transition costs and $1.6 million associated with the review of a possible acquisition.

Selling, General and Administrative Expenses

SIZE="2">Selling, general and administrative expenses in fiscal year 2008 were $163.6 million, or 8.4 percent of net sales, compared to $123.1 million, or 6.7 percent of net sales, in fiscal year 2007. The increase is primarily attributable to
investments in systems and resources needed to drive our future growth initiatives as well as the $21.0 million charge recorded in the fourth quarter of fiscal year 2008 related to the Boarhead Farms matter discussed later below. Fiscal year 2007
included $4.4 million related to executive transition costs and $1.6 million associated with the review of a possible acquisition.

Selling, General and Administrative Expenses

Selling, general and administrative expenses of $104.4 million were 7.4 percent of net sales as compared with $90.6 million or 6.9 percent of net sales in the same period a year ago. The nine months ended March 31, 2007 included $3.6 million of executive separation obligations, $1.6 million of costs associated with the review of an acquisition and $0.8 from executive recruitment fees. The increase in the nine months ended March 31, 2008 is primarily attributable to investments in systems and resources needed to drive our future growth initiatives.

Selling, General and Administrative Expenses

Selling, general and administrative expenses of $70.4 million were 7.8 percent of net sales as compared with $60.7 million or 7.6 percent of net sales in the same period a year ago. The six months ended December 31, 2006 included $3.6 million of executive separation obligations, $1.6 million of costs associated with the review of an acquisition and $0.8 from executive recruitment fees. The increase in the six months ended December 31, 2007 is primarily attributable to higher accruals for our performance based variable compensation as well as increased personnel and other costs associated with driving the Company’s future growth initiatives.