Ladies and gentlemen, thank you for standing by and welcome to the Parker-Hannifin Analysis Offer to acquire Meggitt PLC. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question- and- answer session. To ask a question during the session, you need to press star one on your telephone. If you require any further assistance, please press star then zero. I would now like to turn the call over to your host, Todd Leombruno, Chief Financial Officer. You may begin. Thank you, Kevin. Good morning, everyone, thanks for joining this webcast in which Parker is announcing a recommended offer, all-cash acquisition of Meggitt PLC. As Kevin said, this is Todd Leombruno, Chief Financial Officer. Here with me today is Chairman and Chief Executive Officer, Tom Williams, and President and Chief Operating Officer, Lee Banks. If I could direct you to slide two, our usual practice of announcing an acquisition is a little bit different today, so I want to discuss this first. As Meggitt is a public listed company on the London Stock Exchange, this acquisition falls under the rules of the UK Takeover Code. Under the UK Takeover Code, once an acquirer has a firm intention to make an offer, they issue what is commonly referred to as a Rule 2.7 announcement, which contains the terms and conditions of the offer. That announcement was released in the U.K. earlier this morning. The Takeover Code sets out various requirements which govern such offers and which we will need to comply with. The U.K. Takeover Code also requires Parker to only share information that has been already released within that announcement, and that requirement applies to information on our slides, what we share during today's call, or in any discussions we may have later. No additional material information about this transaction can be shared. Slide two includes a disclaimer language related to these requirements. On slide three, you'll find our company's Safe Harbor disclosure statement addressing forward-looking statements as well as non-GAAP financial measures. Reconciliations to any non-GAAP measures are included in today's materials. These reconciliations, our presentation, and additional information about this transaction, including the Rule 2.7 announcement, are available at aerospacegrowth.com. On slide four, I'll touch on the agenda today. We'll begin with Tom providing the specifics of the offer and the strategic rationale of this combination. He'll give an overview of the Meggitt business, show the strong fit, and touch on expected synergies. Tom will then close with highlighting the compelling value for shareholders. Tom, Lee, and I will allow some time for Q&A that falls within the details of the Rule 2.7 announcement. With that, I'll ask you to direct your attention to slide five. I'll turn it over to Tom. Thank you, Todd. Good morning, good afternoon, good evening to everybody that's joining in. It's an exciting day for Parker and for Meggitt. I'd like to welcome all of our shareholders, analysts, Parker team members, and a special welcome to all the Meggitt team members that might be listening in. Meggitt is a great company with a great history and heritage, and we've admired you for a long time, and we really look forward to you joining the Parker team. On this page, I want to cover some of the highlights on the strategy and expected financial benefits. First, this acquisition will nearly double the size of the Aerospace System Segment with highly complementary technologies, which I'll highlight later on in the presentation. It is well-positioned on premier programs with our key customers, 70% sole sourced with proprietary products. It's going to expand our system and component capabilities. A nice recurring revenue. It's going to add 500 basis points to our aftermarket mix, and a very strong, sustainable portfolio with some attractive electrification and low carbon technologies. It's nicely positioned for growth potential with a combination of the aerospace commercial recovery as well as the synergies, which we'll talk about a little bit later on. This will be accretive to our organic sales growth, EPS and cash flow. If you go to slide six, some details on a offer overview. We're offering to acquire 100% of the Meggitt PLC stock. Has some statistics on calendar 2020 and calendar 2019. $2.3 billion in sales for 2020, $3.2 billion sales in 2019, so this would be pre-COVID, which would be probably more indicative of normal business conditions for Meggitt. EBITDA margins, a little over 14% in 2020, a little over 19% in 2019. The transaction is GBP 8.00 offer per share. This results in a transaction value of about $9.9 billion. You can see the multiples there. We did this on a pre-COVID basis. We think that's the best way to look at these multiples, as it's more indicative of an ongoing normal state of the business, 16.3x. Then 10.9x when you put in the cost and just so the synergized EBITDA being 10.9x, very similar to where we were with the CLARCOR acquisition. The financial impact, EPS accretive in the first 12 months after closing. Strong incremental sales growth on top line margins and cash flow. High single digit ROIC in year five, continued expansion. I'll touch on the synergies, $300 million in the third full year. We'll be funded with cash and debt, and we are committed to maintaining our investment-grade rating through the process. Closing, pending normal regulatory filings, is in approximately 12 months. You go to slide seven, give you a quick introduction to Meggitt. Upper left-hand corner provides proprietary cont ent for airframe and engines, and I'll give you more details on that as we go through the next several slides. You can see their aftermarket mix at 45%, quite a bit higher than what we are, and I'll touch on what that does with the combination. Lower left is sales by application. I would just point out that we like the fact that they're very diversified as far as the applications that they're on. On the right-hand side is two pie charts on sales by division and then sales by geography. Sales by division, you can see there's four divisions. I'll go through the three product divisions with pictures. The Service and Support division is a cross-company, full service aftermarket organization providing customer experience, smart support planning for all their technologies. They have three global hubs, one in Miami, s upporting the United States, Ansty Park support, which is in England, supporting EMEIA, and Singapore supporting Asia Pacific. If you look at the sales by region, you can see the largest region being the U.S. at 61%. Go on to slide eight. In the next several slides, I'm going to talk about the various products that they have by division, starting with the airframe system products. They provide braking systems, which really can do the whole system. They can go from the control system to the brakes, as well as provide brake system components at the component level. A lot of pictures on this page. I would just orientate you to start at the nose of the plane. I'm going to kind of give you natural groupings of their products. The nose of the plane, you see the nose wheel. They also provide the main wheel. A variety of wheel technology. Across the brakes, you can see carbon ceramic brakes, electric and steel. Various valve technologies from the brake control valve to the servo control for anti-skid control. They have control systems and monitoring systems as well. If you go on to the next slide nine, continue on with the airframe system products. They have a grouping of products around power and motion, really power generation, conversion, and distribution highlighted in the pictures that you see on the bottom of that page on the left. On the avionics and sensors, they have a very strong sensor offering, providing sensor technology for air temperature, outside pressure, ice detection, position of the aircraft, which is very attractive for us. It's an adjacency that we're not in, and it helps support the quote, the digital products across the entire airframe or engine. If you go on to slide 10, again, the last slide for the Airframe System business, there's fuel products and composites. They have composite radomes. If you're not familiar with what that is, that's the structure that protects the radar equipment. Anti-icing structures, heated elements that would go into preventing ice buildup. You see that picture on the rotor blades on the bottom of that slide. Fuel bladders that are self-sealing fuel bladders, primarily for military applications. Then in our right, polymer seals, which is exciting for us because this offers additional adjacent complementary technology for our engine materials portfolio. They have structured sealing, like the picture down at the bottom for door seals. They also have compartment seals for a landing gear compartment door. Then fire-rated solutions. You see a picture of the engine seal there, is a technology we do not have. Again, an adjacency that's very attractive. Slide 11, move into a new division, different division, engine system products. Everything on the left, fire protection and safety systems, are all, again, complementary technologies. This would be both for the engine and the airframe, so smoke and fire detection, bleed air leak detection. They have an environmentally friendly fire suppression that would be fighting fire suppression for the engine, the APU, and cargo compartment. On the right, valve sensors and thermal management. Again, the sensors would be both for airframe as well as the engine. On the engine, it's providing really health monitoring. In particular, the area they're looking at here is for vibration control to check for out of balance conditions. On the valves, again, the more distinct difference between our valve technology, which I'll highlight here in a minute. A very nice portfolio of thermal management. Heat exchangers, again, which becomes much more important for the higher heat loads that aircraft and engines will be enduring in the future. Go to the next slide, on slide 12, energy and equipment products. On the left-hand side, the military applications is really a combination of actuation solutions and thermal management. If you go to that picture on the lower left, you see a weapons system actuation. This would be for an Apache helicopter in this particular example. Thermal management system, this example is for an M1 tank. This will be providing cooling for the electronics and for the soldiers as well. Think of this as supplemental cooling to the existing cooling system on that particular application. Like most aerospace companies, they take aeroderivative technologies and go into similar applications, primarily in power generation and industrial. The heat exchanger technologies that they have, the turbine health monitoring technologies they have, going on to gas turbines, and looking at pressure and temperature in those applications. If you go to slide 13, one of the things that's very attractive in the strategy that the Meggitt team has had in place is two-thirds of their innovation is targeted towards clean technology. The move to a more sustainable aviation portfolio, something that's very much in coalescence with us, fits with our strategy, and we're going to continue this as we move forward. Just to highlight some of the areas that they're doing on sustainable aviation. Clearly, all the sensor technologies that they have is creating a more efficient engine. The capabilities they have for more electric aircraft is very attractive. I mentioned how important thermal management is as aircraft and engines become hotter and hotter. They have a portfolio of lightweight materials to help with the weight reduction for fuel consumption. They have environmental friendly fire suppression, which I've mentioned earlier. They have technology to replace, over time, the halon systems that are used in today's fire suppression systems. Go to slide 14. They're on all the right programs. You can see in both commercial and military, the right programs, the marquee lineup of applications, with a growing bill of material that they've developed over a period of time. Go to slide 15. A blue-chip customer list, longstanding relationships, that's 70% sole source position, very similar to Parker, this customer list. Part of what we really like, if I think about prior acquisitions that we've done, we like acquisitions that have common customers, common end markets with complementary technologies, which is exactly what Meggitt has with this application. What's really important on slide 16 is that success in a lot of acquisitions are tied around a common shared vision on values, culture, and heritage. We have very much that when we look at Meggitt and Parker. Both companies, engineering-led companies, strong innovation reputations. When you look at the Win Strategy, when you look at the Meggitt business system, a lot of similarity. Both companies focused on safety and a high-performance culture. As I mentioned earlier, a shared commitment to sustainability and their technology development and how they run their factories and what we do for society. Both of us are trusted defense partners. Both businesses have strong content with the US Department of Defense, U.K. MOD, as well as other international defense partners. We view very strongly that this creates a long-term future that is very bright for the combined organization. On slide 17, this gets at the aftermarket mix. I talked about this at the beginning. If you look at where on the left-hand pie, Parker today is 35% MRO, Meggitt being 45%. When you put that together, you end up with a 40% MRO. A 500 basis point improvement. I think everybody understands what that means. It means less cyclicality, higher margins than the OEM, and a recurring revenue stream that's very attractive as we go forward. On slide 18, really when we do 18 and 19, we try to put as many of the technologies as we could on a page without making it too complicated. This first one is on the airframe. In blue is all the Parker technologies, and in green are highlights of the Meggitt technology. You can just see how this fits very nicely hand in glove, how complementary they are, and what a very strong offering we'll be able to give to customers, which will enable us to solve more problems and create more value for them. Then if you go to slide 19, similar type of format to the slide, just showing engine products. Again, Parker in blue, including the new acquisition technologies with Exotic and Air, then Meggitt in green. Again, a very strong offering for our engine customers as well. On slide 20, really gets at the heart of what makes this so attractive is the complementary technologies. We did the other slides because we couldn't list, it got very complicated to list all the Parker technologies on a slide. Really here we're focusing on those pages on Meggitt technologies and how they compare to what Parker has with that particular product area. You can see on braking systems, they have a much stronger offering. They add larger aircraft, regional jets, business jets, military, and bring electric brake technology and have a stronger control system to component suite of technologies than we do. On advanced sensors scenario, completely adjacent. We don't have any activity there. Very attractive again, for the whole IoT movement, the digitization of everything, but also the ability to create more sustainable solutions for customers. Safety systems, another adjacent application, both fire detection and suppression. On the engine piece, a very distinct difference between our offerings. We primarily do fuel hydraulic valves, which would be using high pressure fuel to actuate the valve, and their offering is more on the pneumatic side. A distinct difference there, as well as they have more of a concentration on the engine bleed air application. On electric power, basically we have very little there, so this is another adjacency, adding to more electric capabilities going forward. Thermal management, we have very little. We have a little thermal spray activity there, and they have high capacity cooling and heat exchangers, which we find very attractive. Again, highly complementary to what we're offering. On slide 21, if you lift it up and look at what does this do for the total company? On the left-hand side is, would be before Meggitt, the three external reporting segments that we have today. On the right-hand side would be with Meggitt. You can see that clearly it balances it out, the portfolio between the three, Aerospace Systems, Diversified Industrial North America, and Diversified International. If you lifted higher and think about what we've been doing the last seven years and the strategic acquisitions we've been doing to transform the portfolio, and all of you are familiar with these, CLARCOR and Filtration, LORD and Engine Materials, Exotic in aerospace, and now Meggitt again in aerospace, creating a portfolio that over the last seven years is clearly less cyclical with higher growth rates, higher cash flow, and higher margins. You've seen that through our performance over the last seven years, which has been a combination of the Win Strategy and our portfolios strategy. We're very excited in the fact that this is going to almost double the aerospace business and continue the capital deployment strategy in transforming the portfolio. Moving to slide 22, to talk about synergies. These are pre-tax synergies, and this is an estimate. At $300 million, this would be all cost synergies. This will be at the end of the third full year, it's approximately 10% of sales. You can see the anticipated areas, the Win Strategy, supply chain, lean productivity and SG&A, continued footprint optimization. Our focus on footprint is going to be to execute Meggitt's footprint plan that they have in place. They've been public about this. 2016, they laid out a vision for their footprint strategy. At that time, they had 56 facilities, they had a vision to reduce that in half. Their last public annual report, they were at 37 for 2020. They made a lot of progress, we will just continue to execute the plan that they have in place. All these synergies, when you put it together, will be margin accretive within the synergy period, which is what we're going to illustrate on 2023 on the next page. If you take where they were in calendar 2019, again, a more normal state for the business pre-COVID, and you apply these $300 million of cost synergies, you would get to an approximate 30% EBITDA with these synergies, which is very attractive, which fits with the strategy you've heard me talk about as far as being accretive within the synergy period on growth, margins, and cash flow. This will enable us to do that. Lastly for me, just to sum up before we turn it over to Q&A. A compelling value story for our shareholders. W e'll be EPS accretive within the first 12 months. Strong cost synergies of $300 million by the third full year. This will generate high single-digit ROIC by year five with continuing expansion. This is a business that is positioned well with leading programs, with marquee customers, and positioned for strong growth as the industry turns. Strong capital deployment, again, part of the strategies that we've laid out, very much in our wheelhouse, and part of what we've been articulating for a number of years. We'll create long-term shareholder value. On the dividend, we will maintain our payout ratio that we've articulated before, net 35% net income, and continue our annual dividend track record. We're committed to a strong balance sheet and maintaining an investment-grade rating as we go through this process. With that, I just want to say thank you for your attention. I'm going to turn it over to Kevin to open up the Q&A. Ladies and gentlemen if you have a question or a comment at this time please press star and the one key on your touch-tone telephone. If your question has been answered and you wish to remove yourself from the queue press the pound key. Our first question comes from Andrew Obin with Bank of America. Hi, guys. Good morning. Can you guys hear me? Yes, Andrew, we can hear you fine. Yeah. Thanks a lot. I guess the first question is, with the previous deals, the path was you're ready to do the next deal after two years. Clearly, this one is bigger, but there are more synergy opportunities. What is the delevering path for Parker-Hannifin over the next two to three years? Andrew, I would expect you to see the same deleveraging, this is Tom, by the way, that we saw with the last several deals. With the Rule 2.7, we really can't go into specific quantities as we go forward, I think you could just see the track record we had before. The leverage as we come out of this, it obviously will depend exactly when it closes, will be very similar to where we started our initial leverage with[audio distortion] with just LORD and Exotic, I would expect to see a very similar flight path as far as reducing that debt load. Yeah, no, that's great. Thank you. The second question, as far as your exposure to engine manufacturers, GE, Pratt, Rolls, can you just tell us where we were prior to the deal, and how does Meggitt change your exposure to various engine manufacturers? I would say with this transaction, probably more pure turbofan applications. In general, if you would just look at the bill of material content, if you put Meggitt and Parker together, it is just going to offer a stronger bill of material, whether it is on the airframe side or on the engine side. Exotic built out more of the Pratt & Whitney exposure to us, which was very attractive, and I think this does the same kind of looking across really all three engine makers. Well, congratulations. Thank you, Andrew. Thanks, Andrew. Our next question comes from Joe Ritchie with Goldman Sachs. Hey. Good morning, guys. Congrats. My first question is really just around the synergies. My understanding of Meggitt is that they've been going along the path of some footprint consolidation. I think in the prior call that you guys did this morning, you talked about some supplier consolidation. If you think about the buckets of the $300 million, maybe just help provide a little bit more clarity of how you expect to get after it. That's an area we won't be able to go into detail on. The Rule 2.7 does not discuss that, so I'm not at liberty to discuss that as well. I would just maybe reference that Meggitt has recognized their supply chain opportunities already, and this is part of their public vision that they've had as far as looking to consolidate that supply chain, and clearly, we'll look for opportunities to put both of our supply chains together. I can't go into detail on the various buckets that make up the $300 million. Okay, fair. Maybe my second question, as I think about where we are in the cycle, and you think about Aero hopefully being at the bottom of the cycle and hopefully starting to see some better growth in the months and quarters to come. I can't help but think of when you guys did the CLARCOR acquisition, and there were some hiccups along the way, partly because of how strong the cycle was, and you had kind of a bit of a pig and the python problem back then. I would love to hear some thoughts on how you plan to manage the upturn while also going after some of the synergies that you've highlighted today. Yeah, Joe, it's Tom again. Clearly, one of the things that is, if you're in the aerospace industry today, ourselves and Meggitt, the worst is behind you, and the opportunity is in front of us, and that you're going to see better times. That's very attractive. One of the things that is different, if you take CLARCOR, CLARCOR was a very heavy, heavy footprint consolidation type of acquisition. This will be nowhere near like that. We're going to execute Meggitt's plan, which has been very thoughtfully laid out, and will be very digestible, while we go through what is expected to be a recovery over a period of time going forward. That's how I would contrast the difference. One of the challenges we have at CLARCOR is we were doing all the footprint, and we had volume going up, and we won't have the same level of challenges with this. Great to hear. Joe, one thing I'll just add is we're looking at a 12-month close period, both companies will remain separate for the 12 months, and we'll both deal with that spike over the next 12 months. Got it. Very helpful. Thanks, guys. Thanks, Joe. Our next question comes from Jeff Sprague with Vertical Research. Hi, Jeff. Hey, good morning. Thanks, and congrats everyone. Hey, maybe just a little bit more, just thinking about the synergies from a different angle, Tom. I understand your hands are somewhat tied, but to what degree does this allow you to also just kind of further reevaluate your own supply chain on the Parker-Hannifin side of the house? What you might be able to do different. Perhaps that's rolled up in the $300 million anyhow. Could you comment on that to any degree? Well, clearly, these synergies are not just looking at Meggitt per se. It's looking at where it makes sense with the combination. That would be supply chain. We did call out in the Rule 2.7 that with the footprint, we'll be executing their plan, it means that we'll also look at where it makes sense when we look at the total combined footprint as well. Yes, the $300 million is looking at opportunities for both businesses. Just to understand, just on the accounting side, the difference between the GAAP and IFRS, I think is the capitalized R&D on wheels and brakes. Is that it? Is there just anything else from a modeling standpoint we should be thinking about as we kind of try to piece this together? Yeah, Jeff, this is Todd. That's a good point. You're right, that's the biggest piece of it. There's also treatment of leases, and to a smaller extent, the pension side of it. We've got a reconciliation in the deck, so that should be able to help you out. Okay, great. Thank you. Our next question comes from David Raso with Evercore ISI. Hi. Thank you for the time. I was just curious if you can give us some color on how this deal came together, any key regulatory hurdles we should be thinking about, and milestones of how to get to closing from here. Thank you. David, hi. It's Tom. The how, I would say we've been admiring Meggitt for a long time. This has been part of our capital deployment strategy that we would look at opportunities to be the consolidator of choice within motion and control. You've heard me talk about the kind of the priorities within that motion control portfolio was aerospace, filtration, engineered materials, and instrumentation. You've seen us do transactions all in those areas that we focused on. The other part that we've been clear on is we like companies that have a common customer list, common end market exposures with complementary technologies, and that's exactly what Meggitt has. It's something we've been looking at for a while. I won't go into the details of our discussions, but we did approach them, and this has been in what I would say, a very friendly, highly respectful manner, and we have full support from the Meggitt Board on this transaction. As far as regulatory, we'll be doing all the necessary filings. By the nature of these two businesses being very complementary, we feel very good about it. Lastly, regarding some of the challenges that are greater or opportunities that are easier, when you look at the roughly 10% of revenues that you expect to take out in cost synergies, I know you mentioned a footprint heavy lifting you had on CLARCOR. The targeted initial synergies about 10% of revenue. It is sort of the same baseline assumption of how much you could take out. How would you rank the challenge to take out this 10% versus LORD in particular? I assume CLARCOR was. Obviously that was more challenging, right? You were trying to close a lot of factories just when demand was surprising to the upside. I would like to think this one is maybe a little easier than CLARCOR, but maybe compare it versus LORD, if you could. Yeah, David, I would say this is very similar to LORD Corporation as far as how this approach will go. We always approach these things in a collaborative fashion. We have, obviously, to build these models and to decide what would be appropriate for our shareholders. We have to come up with our own thoughts on this, but as we go forward, we'll be doing this jointly with the Meggitt PLC team and coming up with what makes sense for both businesses. The idea here is with every acquisition is to take the best of both companies, the one plus one equals three strategy, and that's the approach we'll take with this. All right. Thank you very much. Appreciate it. Our next question comes from Julian Mitchell with Barclays. Hello, Julian. Thanks. Good morning, and congratulations. My first question on the synergy aspect. Clarify your confidence around getting those growth synergies while balancing those commitments to the U.K. government that you've laid out this morning in terms of reinvestment in Meggitt. Is that Meggitt facility reduction program, the savings from that, are they included in the $300 million? Or perhaps you'd said they were additive. The $300 million, what percent do you think drops through? I know in defense synergies, often the customer can get a good chunk of the synergies. Yeah. Julian, their footprint consolidation is included in this $300 million, and this is Parker- Meggitt's $300 million, not something that is shared outside. This is what Parker- Meggitt will enjoy. What was the first part of your question again? Oh, say again, Julian. Yes, Tom, thank you. Just around balancing, you've got some sort of commitments around things like R&D. Obviously the U.K. government's very sensitive to takeovers right now of domestic assets. Yeah, thank you. I couldn't remember your first part. We feel very strongly about both of those. We feel strongly about the ability to achieve these synergies, and they were done with their eyes wide open with the binding commitments that we're making to the government. We feel equally strong about making those commitments. We respect the heritage and the position that Meggitt has in the British industry, and we're going to continue that role. We have 2,100 people in the U.K. today. We have 18 facilities today. This is even before Meggitt, which is about the same size as far as number of people that Meggitt has. We've been there for 50 years, and we'll be there for 50 more plus. We have a very strong commitment. Those commitments were done as part of these synergies, and we feel strongly about both of them. That's helpful. Thank you. Just one follow-up around any sort of other liabilities coming with Meggitt. I think there's a U.K. pension plan, but with a fairly small net balance. Any detail on the timing of the one-time cost out, the sort of $240 million number? Yeah, Julian, this is Todd. I can't speak too much to the $240 million cost out just by what was in the Rule 2.7. I can speak about the pension plan. As Tom said, we have over 2,000 team members in the U.K. Our team members are part of a U.K. pension plan. We had great conversations with the leadership at Meggitt, the pension trustees, and our advisors. We're including all that in the numbers you're seeing here on the transaction. Great. Thank you. Yep. Our next question comes from Ann Duignan with JP Morgan. Morning, Ann. Hi. Thanks. This is Sean McMullen on for Ann. Most of our questions have been answered already. Can you perhaps discuss your expectations for potential revenue synergies and clarify if you're working on any joint programs with Meggitt? Okay. Sean, it's Tom. Revenue synergies were not included in the $300 million. Obviously, when you put both of our customer lists and our bill of material applications, there's an opportunity to just be able to create more value for a customer, both on new platforms or product improvements to existing platforms or in the aftermarket. We look forward very much to working jointly with them to develop account strategies and platform strategies that would leverage the best of all these technologies. We didn't factor that into the synergy plan. Great. Thank you. That's all I have. Our next question comes from Joel Tiss with BMO. Morning, Joel. Hey, how's it going? Good. I wonder, are you able to speak about any areas of potential overlap where either you have to divest or you could lose a little share as the customers look to diversify? Joel, it's Tom. We see virtually no overlap. That one slide that I referred you to in the deck that had basically the moon charts, these are either completely new adjacencies or distinctly different technologies within the same product area. We feel very good about that and see that as very low risk. Maybe this is an unfair question, but can you give us any sense about opportunities for others to come over the top? I know that there's other companies have been looking at this acquisition as well, and I wonder how tight is your agreement, or is there always room for someone else to come in? Thank you. Sorry about that. Joel, again, it's Tom. I won't comment on that other than I would say part of our discussions with the Meggitt team were to put together a total offering between the financial offering, which is the GBP 8.00 share price, the premium we were paying, which reflected the long-term value creation of the business, and accelerated that and de-risked that for Meggitt shareholders. The combination of all the binding commitments that we made that were around national security, economic, and social commitments to demonstrate a holistic package that would be very compelling for all stakeholders that would view Parker as the absolutely best home for Meggitt, and that's our intention. We went into this discussion and had full support from their board all along the lines that we were the best home for this business. Okay. Thank you. Thanks, Joel. Our next question comes from Jamie Cook with Credit Suisse. Hi, good morning, and congratulations. Most of my questions have been asked. I guess just one. You talked about opportunities on electrification and low carbon technologies. If you could just sort of elaborate how this better positions Parker-Hannifin, and then just also talk about the level of R&D and what's expected going forward to invest in some of these technologies. Thanks. First of all, that one slide that I had on sustainability, the first sensor technology, which allows to basically run the airplane, particularly the engines, more efficiently. The capabilities they have with more electric allows as the airframe moves to more electric, it gives us an opportunity there. The thermal management technologies helps with all the higher heat loads. They have more lightweight type of applications, in particular composites that reduce weight. Their fuel suppression system, they've already designed an alternative to halon, which is out in the marketplace, and then over time will gradually replace halon. We've committed to that part as well, that we've committed to continuing their investment on sustainable applications. Their CapEx, their R&D historically has kind of been in the 7% range, and I believe last year was around 6% that was publicly available in the public domain. We intend to continue that kind of R&D. Thank you. Our next question comes from Nigel Coe with Wolfe Research. Hi, good morning. Congratulations. How do we think about the cash flow profile for Meggitt over the next few years? Oftentimes, there's big differences between EBITDA and cash flow over the cycle. I'm just curious, how you view the cash flow profile for Meggitt post-close. Nigel. Hey, this is Todd. I'll take that question. Again, we're limited to somewhat to what we can say here on a forward-looking statement just based on the Rule 2.7. Just to give you some color, looking back at calendar year 2019, which Tom has mentioned a couple of times, is a more normal run- rate for the business. Free cash flow as a percent of sales out of Meggitt was 11%. Their free cash flow conversion, 113%. We think that's a good base to start. I would direct you to some of the analyst estimates out there if you're looking for future forecasts, but very similar to some of the businesses that we have in Parker, we're confident that that cash flow profile will be positive going forward. Great. Thank you. My follow-on question is, that difference between U.S. and IFRS GAAP, that GBP 70 million adjustment, I think it was GBP 70 million in 2019. Does that remain fairly constant as the recovery comes through? As EBITDA expands, does that adjustment remain fairly static? Yeah. Nothing that I have right now would tell me that that wouldn't change. I would say it's pretty static. Great. Thank you very much. Our next question comes from Nicole DeBlase with Deutsche Bank. Yeah, thanks. Good morning, guys. Good morning. Congratulations. Thanks. Maybe just on the synergies to the extent that you can give us a sense of how the $300 million phases over year one, two, and three? You know what, Nicole? I think we answered that. We're kind of limited to what we can do there. What we have in the Rule 2.7 is the $300 million. That's at the end of a full third year. Okay. Understood. I guess, looking back at Meggitt's historical results, EBITDA margins have been on a downward trajectory for some time, I think since 2010. Has that pretty much all been driven by mix, or are there other factors there? Nicole, it's Tom. Hard for me to comment about it historically. I would just say that Tony and the team, Tony Wood, their CEO, has done, I think, a very good job, has laid out a great stretch for the business as it has continued to improve, and we look forward to working with them together going forward. It's a company that's got great technologies, great people, and be a great part of our team when we close. Okay. Got it. Thanks, guys. Thanks, Nicole. Our next question comes from Joe Giordano with Cowen. Morning, Joe. Hey, good morning, guys. If you just look back at growth historically, how does the over the cycle growth rate at Meggitt kind of change the profile of Parker legacy aerospace? One is, what's the Meggitt view on when 2019 levels are kind of achievable again? Okay. Joe, it's Tom. I can't comment on when we'll hit 2019 because that would be a poor look in comment. I would refer you to various equity analysts and what other companies have said going forward. If you look at from 2016 to 2019, compare their growth rate to aerospace and to legacy Parker, they grew at about 6%, and we grew at about 4%. In what I would call more normal conditions, they had a slightly faster growth rate. Then just what's the view on how, if you're allowed to comment on this, how Meggitt would be kind of rolled up from an organizational standpoint within the Parker structure? Again, Joe, it's Tom. The four divisions that they have, obviously I won't go into other things that would be evaluated over time, the four divisions will remain in place. Because of the complementary nature of the technologies, it makes sense very much to keep those like they are today. That was part of our commitments we made to the government, we think it makes a lot of sense to do that. Thanks, Tom. Thanks, Joe. I'm not showing any further questions. This time, I'd like to turn the call back over to Todd. Yeah. Thanks, Kevin. First of all, thanks to everyone for joining us today. We appreciate your interest in Parker. We apologize for the short notice. One thing that I want to make note of here, a requirement of the U.K. Takeover Code is that we need to have our financial advisor listen into any conversations we have to just basically confirm that there's no non-public information being disclosed. Just a heads up on that. Robin Davenport and Jeff Miller will be available today if you'd like to schedule a call back, and we'll do our best to accommodate everyone that has interest. Thank you again. Look forward to talking to you on Thursday, where we'll announce our Q4 earnings. Thanks again for your interest. Appreciate it. Ladies and gentlemen, this does conclude today's presentation. You may now disconnect, and have a wonderful day.