Linda Hasenfratz - CEO Roger Fulton - General Counsel Ted Mahood - CFO Jim Jarrell - President and COO

Nick Morgan - RBC Capital Markets Kelvin Cheung - National Bank Financial David Tyerman - Scotia Capital Peter Sklar - BMO Michael Willemse - CIBC World Markets

Thank you. Good afternoon, everyone.

Welcome to our fourth quarter and year-end conference call. Joining me this afternoon is my executive team of Jim Jarrell, Ted Mahood, Roger Fulton, Mark Stoddart, and Mike Annable, and some members of our corporate finance team.

Before I begin, our General Counsel, Roger Fulton, will make a brief statement regarding forward-looking statements provided on this call.

Thank you, Linda. Certain information regarding Linamar discussed in this teleconference, including management's assessment of the company's future plans and operations may constitute forward-looking statements.

This information is based on current expectations that are subject to significant risks and uncertainties that are difficult to predict. Our actual results may differ materially from those anticipated in the forward-looking statements due to factors, such as customer demand and timing of buying decisions, product mix, competitive products and pricing pressure.

In addition, uncertainties and difficulties in domestic and foreign financial markets and economies could adversely affect demand from customers. These factors, as well as, general economic and political conditions, may in turn have a material adverse effect on the company's financial results.

The company assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward-looking statements. Linda.

Thanks, Roger. I'll start off with sales, earnings, and content.

Total sales for the year were $2.31 billion compared to $2.26 billion in 2006, an improvement of 2.3%. Sales for the quarter were $528.2 million, a 2.8% decline over Q4 '06 results of $543.6 million.

Powertrain/Driveline segment sales, which accounted for 81% of total sales for the quarter, were down $20.5 million or 4.6% to $428.1 million compared to the same quarter in '06, due to a negative variance in medium and heavy truck volumes and some extended plant shutdowns at OEM customers in the quarter, offset by new sales on a variety of programs. Industrial segment sales, which accounted for 19% of total sales in the quarter, were up $5 million or 5.3% to $100.1 million compared to the same quarter in '06, due mainly to continued growth in the UK, our [overseas] products and the introduction of our Boom and Telehandler products, offset by the seasonality of the fourth quarter and from the unfavorable mix of products.

Net earnings from continuing operations in '07 were $109 million, compared to $105.3 million last year. In both the years, we recognized several unusual cost credits.

In 2007, we outsourced our several non-cash adjustments on money held in escrow in Hungary for the privatization of Linamar Hungary due to the strengthening of the Hungarian forint. The money was repatriated in the first quarter of 2008.

2007 also saw an unusual credit due to recognition of government plans related to expenses in '05 and '06. Adjusted for all of these items, net earnings from continuing operations for the full year were $100.6 million compared to $87 million in '06 an improvement of 15.6%.

EPS improved 18% from $1.22 to $1.44. We are very pleased to report another year of double digit earnings growth in turbulent times for our industry.

Net earnings, from continuing operations in Q4 '07, were $25.1 million compared to '06 results of $31.9 million. Adjusted for the unusual items described in each quarter, net earnings from continuing operations in Q4 were $17.3 million compared to $17.1 million in '06.

Powertrain/Driveline segment operating earnings were $105 million in '07, up 1.5% from the prior year despite a very tough year in the medium and heavy truck market. Powertrain/Driveline operating earnings were $16.9 million this quarter down marginally over last year.

Q4 was a very tough quarter for volumes with our traditional big three customers and heavy truck remains down. Our performance in Europe was strong and launched business sales higher and therefore doing a better job of absorbing overhead than in prior year.

Industrial segment operating earnings were $67.1 million for '07, up 22.2% over '06. Industrial segment earnings were $8.1 million in the quarter, down over Q4 '06.

Q4 last year if you recall had an extremely positive mix resulting in extremely high licensing earnings whereas this quarter was at the other end of the scale was a negative mix due apparently to new Boom sales not yet at mature gross margin levels, amortization of intangibles from our Carelift purchase and a seasonal slowdown. This segment also includes results for our OROS division in Hungary and our consumer products division, which also had a negative variance for last year and last quarter.

Margins of 8.1% are lower than our target range of 11% to 13% due to these factors. We still believe this margin target range is a reasonable target for the segment.

In North America content per vehicle for the quarter was $92.76, down marginally from a year ago due to the decline in medium/heavy truck sales over last year, which affected us in the quarter at a level of more than $50 million as well as the extended shutdown of certain OEM customers as mentioned. Q4 automotive sales in North America were down 6.7%, 340.1 million on production down 3.7% to 3.7 million units.

Content growth offsetting the heavy truck decline was driven by new product launches in both the engine and transmission business, notably [60] transmission programs sales and the new V-6 and diesel engine program sales. In Europe content per vehicle for the quarter was $9.30, up 28% over 2006.

European sales in the quarter were up, 34.6% the last year of $38.2 million on production of 5.2%, on 4.1 million units. Content increases were driven mainly by increased sales in our German plant, our new camshaft and head and block program.

It's great to see Europe picking up momentum in terms of growth after several years of relationship building. Asia-Pacific content per vehicle for the quarter was $0.70 from automotive sales of $3.9 million on production in the region of 5.6 million.

More meaningful sales are scheduled by our customers to begin this year. Other sales in the quarter increased 8.2%, from $121.4 million in Q4 '06 to $131.4 million in Q4 '07, driven mainly by increased Skyjack sales in Europe and in new products.

Turning now to our market outlook for our Powertrain/Driveline business, industry experts are predicting a decline in light vehicle volumes in North America this year, an increase in light vehicle volumes in Europe and an increase in light vehicle volumes in Asia. Despite expected volume declines and continued market share lapse of the traditional big three OEM, supplier price reduction pressure remains particularly in line.

As always, we managed these expectations with a great deal of discipline, always trying to help our customers meet their goals at a reasonable level that can be funded through cost reductions and improvements. Significant speculation has occurred since the Big Three automakers signed their new deal with their unions last summer and to the ramifications of that agreement.

With new lower labor costs the speculation is that the OEMs may in-source products or outsource less. To be clear, OEM outsourcing is a decision based on the variety of factors from labor rates to capital expenditures required, to in-house expertise, to supplier technology attractiveness versus in-house design.

It is a fact that labor rates are not the only factor considered in these decisions, as is evidenced by the hundreds of millions of dollars of business awarded to us by these customers in low cost countries such as China and Mexico, where OEM labor rates are already at a very competitive level. In-sourcing is only a risk in situations when OEM already has installed capacity for a program.

These situations are extremely rare as normally a program is 100% outsourced to the supplier base once the decision is taken to outsource. The takeover program we have been discussing over the past year which we recently saw personally kept in-house is unfortunately one of those rare examples.

This customer had equipment already in-house [still to] be capable to do this business and therefore decided to retain a portion. Probably, we were able to hold acquisition of additional capital equipment necessary to do this job, helping to mitigate the negative affects of not realizing these sales to some extent.

I do not believe there is significant risk of in-sourcing of Powertrain programs currently outsourced towards the supplier base where the OEM must spend money on new capital equipments and undergo rigorous re-qualification processes. I also believe that OEMs will continue to outsource new programs in the Powertrain areas and in fact accelerate the incidents as such.

These types of products tend to be capital intensive and the OEMs would in general prefer to have a supply base with expertise in that area, make that investment so that they can focus their tasks on their own R&D and new products. [Case in] point again, in countries such as China and Mexico where significantly more Powertrain machine components and sub assemblies are being done by the supply base than one would typically see in the North American plants.

Industry experts are predicting a stable year for medium and heavy truck volumes, although we have seen somewhat positive signs in the market earlier, early in this year. Pre-buys to the 2010 emissions change should begin to build up some point late this year.

Turning to the industrial market, industry experts predict the aerial work platform market will see stability in 2008, although their outlook is cautionary in light of current economic conditions, with softness expected, as discussed prior, in 2009. As you know, we are strategizing to offset any softness by increasing our market share, a strategy that has played out very successfully for us in 2007.

Our strategy has been to add products to our lineup, such as new Boom line, our newly acquired Telehandler line and the global expansion of our popular Scissor lift products. We've seen great realization of this strategy over the past couple of quarters with 2007 sales to Europe up more than 100% over 2006 and rest of world sales increasing sharply as well.

Boom sales are picking up, and our Telehandler expansion is very well received as well. We planned to start production of our next Boom model the 60 and 66 in March.

Launch of this product at a recent trade show was very well received. Key factors to consider in forecasting the aerial work platform market include GDP growth, nonresidential construction and residential housing starts, interest rates and consumer confidence indices.

To summarize, in assessing sales and earnings performance for 2008, you should consider the industry expectations around like industry volumes in each of our key markets, the industry expectation of work to stable year in medium and heavy-duty truck volume, additional ramping of sales on our [60] launches which are forecast by the industry experts for transmission volumes to increase by 60% to 70% in 2008 over last year to reach a run-rate of 30% to 40% of mature levels. You should also consider additional ramping in sales on our Engine group launches, volumes on these mainly V-6 and diesel engine platforms are expected by industry forecasters to increase 20% to 30% in 2008, reaching also 30% to 40% of mature volumes.

You should also consider the industry forecast for stable market conditions for the aerial work platform market in North America and growth in Europe again though with a measure of caution in light of economic conditions. And finally consider new product sales at Skyjack due to product line expansion through development and our position.

Turning now to new business, we saw another great quarter for international business wins. In fact although international business today represents only 10% of our sales in the Powertrain/Driveline segments business outside of North America represented more than 30% of total new business won last year.

In Europe, we saw another exciting quarter for our growing fuel systems business with another $15 million in new orders. We also signed new head and block business for our 5C Center in Germany totaling more than $20 million.

Our fuel system component expertise has grown international as well with the win in China for a fuel rev contract representing more than 500,000 units per year. This job will start into production mid next year.

Our success in business with China has met the existing footprint and has been successful with business wins at full volumes. Accordingly, we will be initiating an expansion in China for this facility in the next one month.

Turning to M&A activity, I'm very pleased to announce the signing of a non-binding MoU with Volvo, to acquire assets associated with their Telehandler and Rough Terrain Forklift business. This deal gives us product designs, the manufacturing assets and inventory for Volvo's Telehandler and RT Forklift product formally branded Ingersoll-Rand.

The strategy is to use the manufacturing assets as well consolidate with our existing Telehandler asset to optimize manufacturing efficiency, add capacity and improve throughput of our existing products as well. The Telehandler models being acquired are very complimentary to those acquired in our Carelift acquisition last year giving us a broader product range to offer our customers as well as access to the [Bauble] store, Telehandler and RT Forklift need.

Bauble currently produces between 350 and 400 Telehandlers a year. At the moment, Ingersoll-Rand had been producing close to a 1,000 units per year, prior to divesting the business.

They also manufacture between 75 and 100 RT forklifts. [Deal terms] is currently still under final negotiations.

We are in the process of consolidating our expanding Boom and expanding Telehandler business in a larger facility at Guelph and while the house market demand we are seeing and expecting in both product lines. It is into this facility that the Bauble assets would move.

Our existing Boom and Telehandler businesses will move from existing locations in [Guelph] and (inaudible). The Guelph facility freed up in the move will now house our growing energy and heavy machining business named [Linergy] currently produced in two other Guelph plants.

Finally, we announced last quarter the signing of a non-binding MoU with Visteon around the acquisition of a portion of their driveline business in Wales. This 220,000 square foot plant located in Swansea, Wales currently employs about 400 people, and to remind you manufactures PTUs, transfer cases and axles and has a long history in other Powertrain product production, such as critical engine components.

We are still in the process of negotiating with the labor union, with Board and Visteon to develop a solid business case for this business, based on competitive labor rates and at least a $100 million of annual business for the plant over the long-term. Our GenNext strategy here is threefold to deepen our PTU market share globally, to increase our critical mass in Europe, and to increase our content per vehicle in Europe.

With that I will turn it over to our new CFO, Ted Mahood, to lead us through a more in-depth financial review.

Okay. Thank you, Linda.

To start with, please note that gross margin for the year was $288.2 million or 12.5% of sales compared to $270 million or 11.9% of sales for 2006. The fourth quarter of 2007 saw an $8.7 million reduction in gross margins from 2006, 52.8 million or 10% of sales.

The 6.7% increase in gross margin year-over-year is the result of the industrial segment, increased portion of overall sales versus last year up to 22.4% from 18.2%. Fourth quarter of 2007 gross margin declined compared with the same quarter in 2006 as a result of a 2.8% decline in sales, a weaker product mix, plus an increase in fixed amortization costs associated with the new product launches in the Powertrain/Driveline segment.

Selling, general and administrative costs remained stable at 5% of sales for 2007. Note that included in the SG&A costs for this year are foreign exchange losses attributed to the Hungarian forint held in escrow related to the privatization bid totaling $3 million.

The effective tax rate for fiscal year '07 is 28.8% up from 19.9% in fiscal '06. You will remember that the tax rate for fiscal '06 was unusually low due to the utilization of previously unrecognized tax loss carry forwards in credits in both Mexico and Hungary.

Our cash position, net of un-presented checks at December 31st is $103.7 million up $65.5 million for the year. Net debt at the end of the year is $369.3 million up $96.1 million from a year ago.

The majority of this increase was used to finance acquisitions which totaled $108.6 million for the year. Cash from operations before changes in non-cash working capital was $74.2 million for the fourth quarter compared to $76.8 million last year.

For the fiscal year this amounted to $287.7 million up $23 million. Non-cash working capital went up $70.9 million this year of which accounts receivable accounted for $23.1 million of the increase.

This was due to higher sales in the industrial segment, which have longer collection terms. Inventories are also up for the year, $64.3 million from fiscal year '06.

This increase is a result of build-up of inventory in the industrial segment, including the Carelift acquisition. Cash provided by financing activities was $140.3 million for the year, with short and long-term debt being up at the end of the year from 2006.

In the fourth quarter short-term borrowings decreased $102.9 million, while long-term debt increased $59.6 million. This reflects the conversion of $6 million from a variable rate to a fixed rate obligation in November.

Investing activities for the year were $288.7 million and $55.3 million for the quarter. Capital expenditure activities accounted for $185.5 million for the year and $52.3 million for the quarter.

The balance of the funds went to the previously mentioned acquisition activity, including $15.7 million spent acquiring the additional shares of Linamar Hungary. At the end of the year we have $210.8 million available under the credit facility.

Great. With that we are going to turn to questions.

Good afternoon. Well, I'm glad, I am on the phone, I can't catch that cold.

We are also in here Nick.

And they are all scared. They all are sitting really far away from me.

20 feet away.

Great. I wonder if the Skyjack results in the fourth quarter might be a little bit of year-end adjustment to earlier estimates in the year, or it was the quarter really as disappointing as it looked?

Yeah, the quarter, again, there were several factors acting here. One is seasonality because the fourth quarter is typically the softest quarter for the Skyjack business.

Secondly, again with Skyjack, we had a mix of products that were a little lower margin than we would normally see, just like last year in the fourth quarter, we had an unusually profitable mix of products. The product mix this time was in the other direction, and then lastly at Skyjack the BOOM products are in a wrap up mode.

So they are not at mature growth margin levels as yet, and as we pick up sales, they are starting to impact on the margin side.

Okay.

As well, the segment does include our consumer product division and our Hungarian agriculture business. Overall most divisions also show the negative variance over last year, so it's not just Skyjack, you should be aware of that.

I still believe that the 11% to 13% range is a good one to use in terms of your expectations for performance in this segment.

Okay, and do we expect sales growth in 2008 from Skyjack?

Well, as you know, we don’t offer forward-looking statements in terms of that kind of outlook, but what I could tell you is that the market appears to be stable and our strategies of increasing sales through globalization, and examine products the new BOOM product, the tele-handler, the deal with Volvo will bring even more tele-handlers into the product mix. It is clearly a way that we can do strategies to continue to grow.

Okay. Just on that press release you put out a couple of weeks ago on some work going back to the OEM or staying at the OEM.

You haven't given guidance in the past that is specific, and I just wondered why you did it that time, is it a warning that the first and second quarters of this year will be very disappointing or how am I to interpret that?

Well, I don't think you should read anymore into it than what it was. And I think it's a bit of a concern that seems to happen from that press release.

The way we looked at it, we had been talking point a bit about the $235 million in takeover business that was awarded to us and was due to ramp up by the end of the first quarter of this year. And we knew that it was something that was central in the minds of our investors because if it then, because we had talked about it and I know that various analysts had talked about it as well.

So, when we realized that we weren't going to hit those levels, we decided that we needed to let the market know sooner than later from our legal disclosure perspective. So in consultation with our lawyers, we decided, we needed to make that announcement.

Okay. But it's not a signal then that you saw something happening in a big picture for your company that you wanted to sort of tamper peoples expectations a bit?

It was exactly what…

What you said.

What I said. That is it.

Okay.

So that job is not going to have the same level of sales as we thought it would, and that's it.

Okay.

And as I talked about in my formal comments a moment ago, we still believe that outsourcing is an extremely viable business strategy, that we will see more and more outsourcing. We do not think that in-sourcing is a significant risk.

It allows for some reason that our customer has installed capacity as they did on this job. For a customer to go out on a job that they have already outsourced, that they got us to back and running production on it, decided how, and shift that in-house and then have to go out and spend tens of hundreds of millions on capital is not going to happen.

Okay. Great.

Well, thank you very much.

Oh. Hello.

Sorry, I had it on mute. Good afternoon.

Why don’t you delve into the North American or at least the Powertrain operating margin? I thought that the big three production volumes in, I am just looking sequentially, in Q4 versus Q3, were pretty flat.

And just the decline in the operating profit was quite a large sum. I am wondering if that’s right and then if it's really owing to the medium and heavy-duty business?

The medium and heavy-duty was definitely -- if you went to the various year-over-year by Q4, in respect Q4 of 07, it was the biggest hit of the year, in terms of lower sales and earnings because of lower truck volumes. So that was certainly an important part of the picture.

Okay. And if I could just maybe ask about your hedging on foreign exchange, Linda?

Do you have a hedge rate for the quarter? Like what you hedged your exposure at?

You mean in the fourth quarter of last year?

In Q4 '07?

Well, as you know, we try to have this not show hedge if possible. And then, formally hedge anything that we think will have in excess U.S.

dollars. I should point out that for the year 2007, net U.S.

dollar inflows were almost exactly zero. So we didn't have excess U.S.

dollars to sell.

So that was zero for the year?

Zero for the full year.

Do you have that for Q4?

For Q4, I will have to get back to you to what the actual hedge rate is. It's a small effect because the natural hedge is working quite well at the moment.

So the actual impact of the hedge money would have been pretty small.

Okay. Okay, great.

And just moving over to Skyjack, with the product mix, Linda I was wondering, do you provide parts and service for your (inaudible)? And is that part of the margin swing that occurs?

We certainly provide parts and service and it would be part of the fourth quarter. How much it was down, it might be relative to the same amount of the seasonal mix.

So that was not a key factor?

No.

Okay. So all right, so that's not part of your -- ?

It wouldn’t be material.

Okay. And just on Skyjack, Europe growing that business there.

Do you have a year-over-year growth number for that for the quarter or for the year?

For -- I am sorry- new business wins?

Skyjack Europe?

Skyjack, yes.

Skyjack Europe. I mentioned in my comments that for the full year we were up 100% in sales over prior year.

I didn't give a specific dollar value for sales to Europe.

Okay, great. That's helpful to highlight, and just lastly, Linda, other income 1.6 million, I believe in Q4?

I was wondering what that pertained to, because I think in Q2, Q3 there is only about 0.2 million, 0.3 million? It's a single jump up in Q4?

That comes from interest that we've earned from our deposits in escrow in Hungary, the $60 million that we had.

Okay, so that would rise going forward pretty much.

Yeah, that's a fair call, we have repatriated the money.

You brought it back. Okay, that's great.

That's all I have thank you.

Okay.

Good afternoon. I am wondering -- I want to go back to the sequential margin, so from Q3 to Q4, I'm wondering what changed in that area.

The volumes were fairly similar, and yet the margins in Powertrain were down quite a bit? And in Skyjack is the -- well I'll come back to Skyjack, if you're going to start with Powertrain.

So the fourth quarter of last year compared to…

No, no, sequentially from Q3, and Q3 your EBIT margin was around 6% excluding unusuals from Q3 and Q4. It looks like it's closer to 3% excluding unusuals, and I'm wondering, if the volumes are the same, why are you down so much?

Well, the volumes are the same in aggregate, but we did experience some significant OEM slowdowns and plant shutdowns in the fourth quarter that would exceed what we experienced in the third quarter. So, in aggregate their productions volumes may look similar but the reality is the plants and the programs that we supplied were different.

Okay. So it's a mix that you're experiencing.

Is that kind of mix continuing at this point or was this an unusual development in Q4?

Well, we're still seeing softness in the first quarter and I mean I'm sure you've seen industry projections as to volumes report of GM, Chrysler this year. They are expecting to cut productions.

I think they are adjusting to the inventory levels, David, and with the recent activity at American Axle that that's put some different numbers into the system as well. And I think they are changing schedule based off what their sales are.

Correct.

And perhaps it's the reality.

Okay.

Yes. We also had some normal year-end assets write downs as, you know, at the end of every year we look at all the equipments and each year we apply some discretion to that, and we certainly thought that in the fourth quarter.

So that will be difference to the third quarter.

Right.

The other thing about the third quarter is you will remember we recognized some oasis claims in the period of back for 2005 and 2006.

I remember that.

Okay.

That's fine. Would those unusuals- are up too much or are they pretty small?

I am sorry.

The unusual items like you're truing up of this amount which I actually…?

You mean the assets.

Yes. Will they be very significant or not?

I mean they are not material in the overall picture, but when you have it all in one quarter and you compare it to the prior quarter it's going to look significant. You can see it on the financial statements.

Yes. I guess what I am driving at here Linda is, I am trying to get an idea of what your base line margin is here and with that moving around the way as it is, it's hard to do any sum, that’s what I am driving at.

It sounds like you are saying Q4 was unusually low?

Well, it was certainly impacted by the asset write-down that I just described and more so by the OEM shutdown on material programs.

Okay. And then, on the Skyjack, I am sorry, I should call it industrial.

On the industrial, the seasonality that we saw this year, or I guess I should say, the amount of decline, how much of that was from the mix? And now I am thinking sales, and how much of it was from normal seasonality?

For the last couple of years you haven't gone down at all from Q3 to Q4.

Yeah. And again, that was because of the mix.

Right? So the mix that we saw last year absorbed any of the normal seasonal slowdown that you might see.

So I can't split it up for you, but I can tell you that all of those factors are certainly at play. The Boom, the lower margin mix on the Scissors, just because of the products that happen to be sold and the seasonality eased as well.

Right. And would the mix affect both the margin and sales?

Yes.

Okay. What would be a normal seasonal drop off would you think then?

20% from the summer to the Q4?

Yeah. 15%, 20% would be about right.

Okay. That’s helpful.

And then I just wanted to ask about the business launches. I think you said for the 60 that you announced expecting 30% to 40% at mature levels in '08.

Is that correct?

Yes.

Okay. So you are reducing that from last quarter's guidance?

That's right, that's a strictly on OEM volume reduction for '08.

Okay. So the volume reductions, I am wondering, are we losing sales here?

Are you losing sales because GM, Ford and Chrysler, they are losing market share and so the $750 million you thought you were getting is actually going to be a lower number? I guess this is the way or is this actually volume driven just because it is weak volume right now?

Well, it's because it’s a weak volume right now. So whether we had the $750 million depends whether they come out to the volume with which they awarded the platform.

Right.

I mean it's strictly volume related. I mean they are expecting volume declines this year and if I look at forecast or for GM, they are forecasting production volumes down 9%, Chrysler down 14%, Ford down like 2.5%, 3%.

So this year versus last year is obviously the fixed piece, all that has to be [backdated], because they are going across a lot of different platforms.

Right.

Yes, so it affects sales.

So those are their numbers for the full year?

Those are their production, while it is not their--

Using this…

This [PS Zaimler]. I mean right now, that is predicting.

Okay. And could you just outline the other launches, so you got [60], you have some engine stuff, which doesn't… it's very big actually.

And then the other takeover business, is that the bulk of the launches for this year?

And that’s Asia and Europe.

Okay. Are either of those other ones very large, or are they embedded in any of the other stuff?

They are not embedded in the other stuff, it has the [60] in the engine stuff from North America.

Right.

So we've got new sales filling in, in Asia, and we've got additional ramps in Europe.

Can you give us any idea of what size these are?

It's a variety of programs, but I can't give you the same kind of guidance as I gave on [60] unfortunately.

Okay. Okay, I'll let someone else go.

Thank you.

When I read the write off, and they were talking about the Powertrain division, there was some language in there about revenues were down year-over-year because of the maturation or re-sourcing of business, so it sounded like there was some particular contract you had that’s matured and you were not awarded the replacement programs, was there anything significant in there?

If you go back, our view is outlined every quarter Peter. So it's just a reflection of normal course business, I mean contract, and sometimes a replacement business doesn't materialize because maybe the technology obtained from that particular product [flip] ends are being utilized or what have you.

So nothing other than normal course during this quarter?

No.

Okay on the ramp of these 60 programs, would there have been any uptick in volume in the fourth quarter versus the third quarter?

On strictly the 60th?

Yeah.

Or -- I'm sorry the fourth quarter compared to…

Third quarter, I'm just wondering -- I'm just trying to get at when are we going to see the next step up in the ramp and if there was any step up in the fourth quarter?

The fourth quarter was actually down somewhat from the third quarter, again related to this volume issue that we've just been discussing.

Okay.

So the next step up in terms of sales is going to be coming this year as described.

Okay. How is your backlog for Skyjack?

Is that stable, growing, shrinking?

It is at a much higher level than it was last year.

I mean versus the end of the third quarter?

It's in a very strong position. It's actually probably a little bit stronger than it was at the end of the third quarter.

Okay.

And if I look at last year it's at a stronger level than it was last year.

Okay. And Ted, on the $1.583 million of other income that someone queried you about, is part of that the $1 million foreign exchange gain on the Hungarian currency in escrow?

No that's on a different line, that's in SG&A.

Okay. And lastly, Ted, if you back out the $6.8 million future income tax benefit, you had a very low tax rate during the quarter, what's going on there?

Again I think that's just a result of some truing up at the end of the year in the fourth quarter. There is also the Federal -- Canadian Federal tax rate reduction, that’s also put through in that quarter.

Okay. Thanks very much.

Hi. Just a couple of small things.

The foreign exchange gain on the foreign, is that embedded in the Powertrain segment?

It is split, I believe, between the Powertrain and the industrial.

Okay. On sales or something like that?

I think its two-thirds and one-third.

Okay. Okay that's helpful.

The $2.2 million stock based compensation, where is that embedded? Is it also with it or…?

It is in SG&A.

Right. In your segment there is no SG&A?

Yes. That is also split.

Okay. Same sort of split I should do it?

I think roughly.

Okay. Do you have any kind of budget idea for CapEx for this year?

We don’t disclose any forward-looking, including CapEx.

Okay. And then on the Volvo, the products, I think you mentioned Telehandlers, 350 to 400 a year.

What would they go for roughly?

Telehandler, average selling price $80,000.

Okay. And was it -- would the other item -- I am sorry, I missed that, what it was?

It's a Rough Terrain Forklift.

Okay.

And they probably sell for about $40,000.

Okay. And you said Ingersoll has actually been doing the Telehandlers at a 1,000 per year?

That’s right.

Why was it lower under Volvo? Any idea?

Yes. Volvo wasn't really interested in this aspect of the business.

They had bought a much bigger business from Ingersoll-Rand.

Right.

And this wasn't an area that really was part of their strategy, so they immediately set out to rush it about.

Right.

They weren't really focused on the market. The product is very good, very solid design, really well accepted by the market, great reputation.

So we were quite optimistic at being able to ramp this back up in a pretty significant manner.

Alright. And so the Rough Terrain Forklift, what was the volume you said on that?

Between 75 and 100.

Per year?

Yes.

Okay. So it's pretty minor product.

It is, it's a minor product and it's a pretty small market too.

Great, okay. Thank you.

Great, thank you. Linda just going back to the comments on lower operating earnings in the Powertrain/Driveline, you mentioned asset impairments.

On the cash flow statement it looks like there is some loss and disposal of equipment of about $4.8 million. Is that about the right number?

All of that was in the Powertrain/Driveline business?

That’s right.

Okay. Okay, and then, on the comment on Skyjack, you said something about the product mix impacted the margins.

On page 30 there is a comment, lower operating earnings due to the addition of the new Boom products, which have not yet reached their mature gross margins. So is this just a matter of the Boom lift having a lower gross margin?

And then the next question would be when do you think you will hit mature gross margin levels?

The management team now does believe they can reach the same gross margin levels on this vis-à-vis as they do on the Boom lift. It will obviously take a lot of time to get there, sales are quite well at the moment.

We expect to see as good an offshoot to market penetration this year as we bring on the 6066 model because it gives our customer the opportunity there to buy what they -- they tend to like to buy more from the range than just one product. We think that will be very helpful.

Okay, and then just going back to your comments on the currency for whole of 2007, it seems like you are pretty close to naturally hedged, so I guess if we were to look at the fourth quarter individually, I mean the Canadian dollar was really strong, the US dollar is really weak, would you suggest that the Canadian dollar had really very little impact on operating earnings in the fourth quarter, even with our kind of currency swing?

That's right, but overall company effect is pretty much zero, because they are not a natural hedge adopted to our best- that's true in any quarter. The impact is minimal because the net US inflow position tends to be small and then anything that we expect to have excess, we formally hedge.

Okay, Ford PTU business in Mexico, I recall, I think when you said made the acquisition that was going to have the negative impact on earnings in the near-term, was that the case in the fourth quarter?

We don’t disclose the financials by plant, but we're on track on where we thought we would be in terms of that business.

Okay. And then just one last question on this Volvo acquisition, is this a competitive bidding process or is it just -- are you the only one negotiating now, now that you've signed this LOI?

We are the only ones right now.

Okay. Okay, thank you very much.

I just had one last question on an item on the cash flow statement. Stock-based compensation $2.2 million wasn't there last year.

I was just wondering if you had any comments on that?

Well, we issued stock options to some members of senior management in the fourth quarter of last year that we didn't in '06.

And at what strike prices?

Well, it's a price of the day.

Okay.

They were issued in December, so the strike price was around $22.

Okay.

I think 21, sorry…

21. Okay, that's great.

Thank you, Linda.

Welcome.

I'm sorry, just had one more follow-up question. The share buyback it says you bought back almost a million shares since the buyback was announced.

This maybe not a question I am just curious how are you able to buy back stock if I would assume you were in a blackout period since January 28th.

Well, because we always have inside knowledge on what's happening in the company, we had never precluded from buying share even in the blackout period, as a company.

Okay. Thanks.

Great. So to conclude this evening, I would like to leave you with three key messages.

First, we're very pleased to see adjusted double-digit earnings growth in 2007, in spite of tough circumstances with our big three customers. Second, it is great to see our strategies around diversification and global growth paying off with continued penetration of global markets in both our Powertrain/Driveline and industrial businesses, through continued new business wins.

And finally, we are very pleased to see good cash management paying off with a very good quarter of free cash flow. Thanks and have a great evening.