Good morning, everyone. Thank you for joining us. My name is Mick Dobre. I'm the Baird analyst covering machinery and diversified industrials. It is my pleasure to host today Parker-Hannifin Corporation. Parker is the global leader in industrial and aerospace motion, process control, and material technologies. To update us with Parker's current strategy, we are joined by Chief Executive Officer Jenny Parmentier. Jenny, I'm going to turn it over to you, and then we'll do some Q&A. Thank you, Mick. And thank you, everyone, for attending today and for your interest in Parker-Hannifin. I have just a few slides that I want to go through with you for those of you who may not be as familiar with Parker, so starting off, we have our forward-looking statements and non-GAAP financial measures. I won't leave it here for you all to read, but I think you're all familiar. And here's Parker-Hannifin at a glance, so we ended our last fiscal year at $20 billion in revenue, FY24, at the end of June. On the left side of the screen are our three segments, our three business segments: Diversified Industrial International, Diversified Industrial North America, and Aerospace Systems. On the right side of our screen are our four technology platforms: Motion Systems, Aerospace Systems, Filtration and Engineered Materials, and Flow and Process Control. As many of you may be aware, the Win Strategy is our business system. We have a technology powerhouse of interconnected solutions, a global distribution network that is the envy of the competition and the best in the world, and a decentralized operating structure that has allowed us to perform at the level that we do today. And this is why we win. We have strong competitive advantages. I already mentioned the Parker business system, the Win Strategy, the decentralized operating structure. We have 85 divisions that are run by general managers who are P&L owners, running their business every day, working with their customers, growing their businesses, and delivering great customer experiences. We have application engineering expertise. These engineers just excel at applying our interconnected technologies across all of our customer base. And again, our distribution network, which I already mentioned. It took us 60 years to build this, and it is the strongest and the best in the world. We have a number one position in the motion and control industry. At Investor Day in May, we rolled out these six market verticals, and I told everybody this was the way that I was going to talk about the company from now on. 90% of our sales comes from these six market verticals. Our interconnected technologies, again, you hear me say that a lot. You'll continue to hear me say that a lot in the future. It cuts across these market verticals, and we provide excellent solutions for our customers. Two-thirds of our revenue comes from customers who buy four or more of these technologies, and our growth is focused on faster-growing, longer-cycle markets and the secular trends. This is one of my favorite slides. Using FY19 pre-COVID as a baseline and the fiscal year that we just finished, FY24, this slide is evidence of how our people, our strategy, and our portfolio drive performance. From FY19 to FY24, a 7% revenue CAGR, 630 basis points of Adjusted operating margin expansion, 14% Adjusted EPS CAGR, and two times the free cash flow growth from $1.5 billion to $3 billion. All of this allowing us to launch at Investor Day our new FY29 targets. We increased margin and cash flow targets and remained committed to our organic growth CAGR of 4% to 6% over the cycle and Adjusted EPS growth CAGR of 10% +. Our new target for Adjusted operating margin is 27%, 28% for Adjusted EBITDA margin, and 17% for free cash flow. And my final slide, as a reminder, what drives Parker and what has allowed all this performance? First, it's our team members, the safety and engagement and ownership of all of our team members, living up to their purpose on a daily basis, delivering top quartile performance, and being great generators and deployers of cash. Okay. All right. Would you mind taking us back to slide two, just back to your business mix? It'd be nice to have in the background as we're getting into our discussion here. Perfect. Thank you so much. Where I'd like to start is perhaps with the most predictable of all questions in the wake of this election. As you look at your business and do the various scenario and planning and analysis that I'm sure you've done prior to the election, how do you think about the outcome here? And I'm not just referring to the removal of uncertainty, which I would imagine that helps, but the potential for tariffs and how that might impact your cost of goods sold and potentially your manufacturing strategy. Yeah, so we've been here before, right? We experienced tariffs in the past, and we were able to deal with them very effectively, and I'll point to our local-for-local strategy that we've had in place for decades. We have a strategy to be in the region for the region and to have a primary local supply base, so when we were here before, this was immaterial for Parker. We were able to get through it, and we were able to be very successful at doing so. I would say that we fared better than our competition because it was immaterial, so we'll see what happens. That remains to be seen, but we are very confident in, first of all, the visibility we have and our ability to get through it. So to that point of visibility, when you look at your suppliers, tier two, tier three, and so on, do you sort of have a good grasp, if you would, in terms of their cost structures and kind of how they're sourcing on their end? Yes, we do. We do have visibility into several layers of the supply chain, and like I said, because we have the strategy of local-for-local and we also have a dual sourcing strategy that we've been working on for many years, we don't feel that the impact is going to be material, so we'll see how it plays out, but we have the visibility and the tools and the team members that know how to handle this. From your perspective, is the solution here pricing and passing this on to the OEM customer or the end user itself, or is this more Parker-oriented in reshuffling and adjusting the supply chain? Yeah. I don't anticipate that we're going to adjust the supply chain or make any major changes to the supply chain. In the past, we did pass this through to the customers. We did pass the tariffs on to our customers. Our customers understand that. We've always been very good at price-cost, very strong at strategic pricing. And again, we have the tools to get it done should that come to pass. That's great to hear. Maybe moving on to talking about the business, and I know you've just reported the quarter. The thing that's been talked about again and again in recent quarters has been the relative resilience of your industrial business. Obviously, we're not growing. We're still having the cyclical struggles. But this cycle has felt different. When I'm looking at the various platforms that you have, Filtration and Engineered Materials have certainly been a stabilizing force. Maybe Motion Systems have behaved more similarly, if you would, to prior cycles. What's different here? What's working? Yeah. Well, first, I would say, since you ended with Motion Systems, first, I would say that if you look in the past, some of that would have been mid-teens negative. And it's not that today. It's even different today in some of those businesses where we haven't really shifted the portfolio. But what you're really seeing is part of our on-purpose strategy to double the size of Engineered Materials, Filtration, and Aerospace. And the power of that portfolio and making those changes is why it is different today. You see more resilience, longer cycle, higher aftermarket in those businesses. And the portfolio is stronger than it's ever been. And we're still in a position, obviously, with the new targets, but we're still in a position that even in this downturn, we're able to expand margins. So since you brought up motion systems, and yes, that's fair, it's been less cyclical than it's been in the past. Can you talk a little bit about what happened there? Because in some ways, I can understand filtration, right? It's been a function of M&A. We think about CLARCOR. That's a more stable business. But what about pure motion systems itself? The Motion Systems business is following electrification, one of the secular trends, right? They have a lot of business with some of our big OEM customers on electrifying equipment and different vehicles. So they're participating in that. That's evidence of how we have the right portfolio today, interconnected technologies within Motion Systems and across the whole business that really we're going to benefit from these secular trends. And Motion Systems is already seeing that. There's a question from the audience here that I think pretty much applies to both your industrial as well as your aerospace business, the switching costs that customers have, and I think it's obviously on the OE side. Once you're specked into various platforms in aerospace, I would imagine the answer is they're extremely high. What about industrial? How has that changed over time? Well, it's not negligent, right? There is a cost to switching. And we take a lot of pride in delivering not only a quality product, but a product that performs well and that is very efficient and provides a lot of value to the customer. So it all comes with giving good quality and good service and that engineering application expertise. We're familiar with the equipment. We have the right products for what they're building currently, and we're partnering with them for the future. So there's a cost to switching, but we work hard to stay ahead of that. Maybe one last item on industrial demand, trying to get your view as to how you think we move forward here in 2025 based on what you're hearing from your OEM customers, based on where you see channel inventories, and if there's some geographic color that you want to provide. I think that'd be helpful too. Yeah. So we've been very positive about the channel sentiment now for several quarters. Having said that, we just did complete our seventh quarter of flat or negative orders. And history tells us that we go five to seven quarters, right? So outside of all the other external things going on, I think it's time for that to turn. And the channel is very, very positive about that. They describe what's going on now as a bit of a pause or a delay. In meeting with a couple of our big distributors over the last couple of months, they'll tell you that quoting activity is high, projects are not being canceled, they're just being delayed. So I would tell you that I don't think distribution is destocking anymore. I think they're out of that pretty much. But they're not restocking yet either. So they're still waiting for that pull on them. And I do think that lead times have gotten better, so they're not carrying as much inventory as they used to. But they're prepared and they're ready. If you think about it from a regional standpoint, we did see in the first quarter of this year, we saw orders in international go from -1% to +1%, pretty much all because of Asia-Pacific. Asia-Pacific growth came in a little bit higher than we thought it would, came in at about 3%, still negative in China. Orders went positive against easier comps, but in the right direction, and mostly because of Semicon and industrial and some in-plant and automation, transportation, excuse me. The mobile markets are still compressed over there. Yeah. OEMs are still destocking. We've had some, we're always constantly analyzing our demand, analyzing our orders, looking at what their production schedules are. So we've seen some additional shutdowns. We've seen some reduction in production schedules. So still very much destocking, particularly in off-highway. We were having a dinner last night with a group of investors, and somebody was asking the PMI question, right? Why is it that there's been this divergence in your trends relative to PMI? And is there a point in time in which this gap kind of closes again? And you're going to have to put a forecasting cap on, I guess. But I'm curious how you'd answer that question for this audience, and I'll have a margin follow-up on that. Yeah. So somebody asked the question, I think, we can't really use PMI for Parker, and we always used to, and I said, I don't think you can do that anymore. I mean, we're a different company than we were. We're more resilient. The portfolio has changed. We're participating in not only the secular trends, but early days for some of these mega CapEx projects, so we're just in a different position than we were in the past and even a better position for what's yet to come. And that leads us into the margin discussion because the margins have been incredibly resilient in your industrial businesses. In a future recovery, whenever that may occur, what's the right way for investors to think about incremental margins? I think the thing I say is we're all going to really like it on the other side, right, for the industrial business. Volume is always our friend. We're never waiting for a recession, and we're never waiting for an upturn. We are very much of the mindset that continuous improvement is part of our DNA. We have very strong incremental margins forecasted for this fiscal year. We're going to continue to use the tools and the win strategy to drive that margin expansion. It's an expectation of all of our businesses. Okay. So it's not, I guess, the traditional model of where we're dealing with some sort of volume compression that would, in turn, lead to abnormally high incremental margins when things are recovering. It's more of a, call it, steady state, if you would, maybe mid-30s. I think that's kind of how you typically think of it. Yeah. I mean, I still think that that's very, very good incremental margin, right? No doubt. That's what we strive for. We've done better than that, and I think we still have the potential to do better than that. The expectation is 30 or above. The last question on industrial for me is around your distribution strategy. Maybe we can talk about that a little bit. I'm curious, are you seeing any M&A within your distributor base? And how is that sort of changing and maybe changing your relationship with your distributors? And then conversely, what are some of the things that you're doing to expand your reach, especially globally from a distribution standpoint? So you've heard me say several times that our distributors are our business partners, right? They're an extension of our engineering team. So we have very close relationships with them. There has been consolidation. There has been M&A that has happened. I think it will continue to. But we are very much part of that succession planning with our distributors and very much part of what it takes to be a Parker distributor and remain a Parker distributor. So we rely heavily on those relationships and making sure that we honor all of distribution with how that is structured. So I think we're in a good position, and we'll continue to be in a good position. You've seen more of that M&A and roll-up in consolidation in North America. In the international side of the business, much like the on-purpose strategy to double the size of a couple of groups through acquisition, there was a very focused strategy on increasing international distribution, taking the playbook, the recipes, shall we say, that we've been very successful with in North America and really doubling down on them. And the goal was to improve at 100 basis points a year, starting back in 2015, I believe. And we've done just that. International distribution has grown significantly, 800 basis points to 900 basis points over that time frame. And we think there's still room to grow it. Understood. Before I move to aerospace, I did want to ask a question on backlog, your industrial backlog. It's just running higher than where it has historically. By my math, you're running about a month of production in excess of where you typically did before. So I'm curious as to why that is. Is that a function of a structural change in your business? Or am I to interpret that, hey, we've got maybe six or seven points of growth that could come out of that backlog as it gets converted to something that's more normalized? Yeah. So previously, the industrial side of the business was mid-teens, 15% backlog coverage. And what it has been now for quite some time is mid- to high-20%. And I think there's a couple of reasons for that. I think the biggest reason is the transformation of the portfolio. You have longer cycle business. You have a longer, what I call, demand fence, demand horizon, longer lead time, right? So you're going to have a higher backlog with that business. There's also some aerospace business that sits inside of the industrial businesses, which is going to be longer backlog. And I think there's a little bit of it that has to do with I think people have gotten a little bit smarter about the supply chain, right? They've been a little bit smarter about their ordering, a little bit more intentional about forecasting. No one wants to go through what we went through coming out of the pandemic, which is one of the reasons why you hear us talk a lot about how we're investing in the supply chain. We're making sure that we keep the supply chain going strong. But I would say the primary reason is the portfolio transformation. So it's fair for us to expect backlog to continue to run? I believe it will. Yeah. I've said in the past that it was high 20s, and I thought it would come down a couple of points. Some of that is coming down because of a recent divestiture that we had. But I think we're going to stay in this area where we're at. Okay. So let's move on to aerospace here. I personally found it interesting that you were able to raise guidance a bit in this segment, even though obviously the sector, especially on the commercial side, has been some of your OEMs have been struggling. So talk a little bit about that. I mean, is there a point in time where some of these disruptions on the commercial OE space come to bite us, for lack of a better term? Right now, I would say we feel very confident in the guidance that we have out there, right? We stay very close to the airframe builders. We know exactly what they're going to build. We know what they're trying to achieve. We're very committed to making sure that the supply is consistent. So we've already taken that into consideration, some of the things that are going on. I think our guide is very good right now. I think aftermarket is going to remain strong in both commercial and defense and military. So right now, I think it's a good guide, and it's very well positioned. I don't see anything in commercial OEM right now that I think would cause us to change our minds about that right now. What about on the military side of the business? It's strong. It's strong. We picked up some really nice complementary technologies with the Meggitt acquisition. We were able to bring those to what has been a very successful public-private partnership with us, with the military, supplying different bases. So we've increased the content and the products that we provide. So that's what's really helped us grow at a higher rate than a lot of our competition. So we see that it's good business for the foreseeable future. Yeah. That would carry into calendar 2025. Absolutely. Aftermarket has also been a big contributor here. Right. How do you think about that part of the business? Very strong, right? We think aftermarket is going to continue to be strong as we try to get back to the rates on the commercial side and then eventually get to those rates, so our aftermarket at the end of fiscal year 2024 was 47%, so we're closely approaching the 50/50 with our Q1, which was a record aftermarket quarter for aerospace, and I think commercial OEM is going to be gradual, low single-digit growth. That's what we lowered it to with our last guide update, but aftermarket's going to remain at a nice level. And can you talk about your aftermarket capture? How happy are you with that at this point? And is there any room for improvement? Yeah. I mean, we're very happy with it. We picked up a lot of aftermarket with the Meggitt acquisition and bringing those aftermarket teams together and all that expertise. We've been able to find some new opportunities. And I think there's still even a bit of upside there. Speaking of Meggitt, you've had now quite a bit of runway in understanding that business, delivering synergies. I'm curious, what do you learn that surprised you either positively or negatively looking back? Things seem to have worked out quite well. So I would imagine that you're going to say there's a lot of good things. But yeah. Yeah. I mean, it's just a great team, first of all. The talent that we acquired with that acquisition has just been fantastic. Great business, great products. You're right. I don't have anything negative to say. One of the best things I wouldn't say was a surprise because we've had a lot of success integrating the Win Strategy with other deals. But Meggitt had a high-performance team culture, which is something that is in the first pillar of our Win Strategy under engaged people. And it was just really great to see how quickly the team latched on to that and really wanted to be part of the Win Strategy, saw the similarities to where they were. So it's been really great to see how fast that we could get that integrated, get that implemented. And there was the ability to pull some of those synergies ahead once we closed and we saw different layers that could be removed to make it more efficient. So it's just been one great thing after another. This question doesn't just apply to aerospace. It's more broadly, I guess, for your company. Research and development, new product development in general, as a percentage of sales, that has declined. And it's frankly a little bit lower than what I'm typically accustomed to seeing. I think it's running what, 1.3%? 1%. 1%. Like 1.5%. Is that sustainable? Is that enough in a world in which obviously technology is evolving very, very rapidly? Yeah. So if you go back 10 years, it was about 3%. And that was primarily driven by aerospace and some of the supercycle. I think it's enough for now. I don't think we're doing anything negative to the business at the current spend. I remember we have some pretty powerful tools, Simple by Design, our market innovation metric of Product Vitality. We have really worked hard to make sure that we use our engineering resources in the right places. And with those tools, we've been able to provide the customers what they need with the products that we have or a slight engineering iteration of them. So I do think that the spending is at the right level. We have had for quite some time a relatively low R&D need. And I think that will go until we have something, future big platforms in aerospace. But I don't expect to see it return to as high as it was in the previous cycle. Understood. Your stock has performed incredibly well over the past year. I'm sure all the Parker team is happy with that. But as you talk to investors, I mean, I can tell you my perspective, people now do appreciate that your business mix is different, right? They do appreciate that you have lower cyclicality. They do appreciate what aerospace is bringing. Is there anything left about the business that you think maybe it's not fully understood at this point? Yeah. I do think that I say it a lot, but I don't know that everybody understands just how powerful and what a competitive advantage it is to have this diversified portfolio of interconnected technologies. And one of the reasons that we wanted to start talking about the business in those six market verticals was not only so we could simplify it, but we could show how these technologies cut across these market verticals and how we can really provide solutions to our customers in a way that others can't. And these technologies directly follow the secular trends in these mega CapEx projects. We are participating. It's still early days, but we get to participate at many different stages of projects because we have all these different technologies. So I think that sometimes maybe the powerful, the technology powerhouse that we have is not as understood as we would like it to be. So to translate it to things that all of us with spreadsheets care about, is it fair to say that you think the organic growth potential of the company is perhaps misunderstood? We get the cyclicality, but maybe we don't appreciate the growth potential. Yeah. And that's one of the reasons that we came out with our 4%-6% organic growth over the cycle. We believe we're going to grow differently. We are growing differently with the transformation of the portfolio. We have several growth enablers out there. One very powerful one is strategic positioning at the division level. Those general managers that are accountable to the P&L are accountable for their own positioning in the market and with the customers that they serve. I already talked about market innovation, some of these other tools that we have. And we did change the compensation structure for almost all 62,000 employees. We went from a return on net assets structure to an annual compensation incentive plan. And what's really, really powerful about that is it's easy to be understood from all of our team members. And it's sales, earnings, and cash. We just finished our second full year of it. It's been very, very powerful. One of the best things about it is now we have all these team members out in the field who understand not only what they have to do, how their targets every day in their location feed into their compensation, but they understand cash, right? People are very aware of the impact of too much inventory, not getting shipments out the door, scrap issues, throughput issues. They celebrate when they beat that sales target, right? We think it's a real driver. We have one minute left, and I want to squeeze the M&A question in here. Higher margins, right? The technology aspect that you talked about, I'm curious how that changes the way you think about M&A. Yeah. So you hear me say a lot that we have a robust pipeline. We've built many relationships with what we think are very attractive targets. We have to see a path to accretive margins, EPS, cash flow with synergies, right? We have to see that we can implement the win strategy and get the business to where we expect the rest of our businesses to be to achieve those targets for FY29. So we look at it through that lens. If you look at where Meggitt was and where it is today, we didn't shy away from that because of where it was. We saw a path to get it there. And that's how we look at the deals that are in the pipeline today. Perfect place to end. Everyone, please join me in thanking Jenny. Oh, thank you.