Greetings. Welcome to Parker Hannifin Corporation's Fiscal 2024 third quarter earnings conference call and webcast. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. If anyone today should require operator assistance during the conference, please press star zero from your telephone keypad. Please note that today's conference is being recorded. At this time, I'll now turn the conference over to Todd Leombruno, Chief Financial Officer. Mr. Leombruno, you may now begin your presentation. Thank you, Rob. Good day, everyone. As Rob said, this is Parker's fiscal year 2024 third quarter earnings release webcast. This is Todd Leombruno, Chief Financial Officer, speaking. With me on the call today is our Chairman and Chief Executive Officer, Jenny Parmentier. We appreciate your interest in Parker, and we thank you for joining us today. If we move to slide 2, you will find our disclosures on our forward-looking projections and non-GAAP financial measures. Actual results could vary from our forecast based on the items listed here. The press release, this presentation, and reconciliations for all non-GAAP measures that we will discuss today were released this morning and are available under the Investors section on parker.com. We're going to start today with Jenny reviewing the highlights of our strong third quarter performance, and then she's going to highlight how, the competitive advantage of our high-performance culture is guiding our global team members to deliver consistent margin expansion. I will follow up then with some color on the, financial results of the quarter, and I will provide some, assumptions to our increase in the fiscal year 2024 guidance. We're going to end the call with a Q&A session, and we'll try to take as many questions as we possibly can. Just a reminder, please try to limit your questions to one and a follow-up, if needed, so we can get to all of those in the queue. With that, I now draw your attention to slide 3, and Jenny, I will hand it over to you. Thank you, Todd. Q3 was another quarter where the team delivered outstanding results executing the Win Strategy. Starting with safety, a 17% reduction in recordable incidents over prior Q3. Safety has been and will remain our top priority. Record sales of $5.1 billion in the quarter, with organic growth of 1.2%. Record adjusted segment operating margin of 24.7%. That's a 150 basis point improvement over prior year, with all segments expanding margins. Adjusted EPS growth of 10%, along with 12.6% year-to-date free cash flow margin. Aerospace demand remains robust and was again, a significant driver of our performance in the quarter. Our transformed portfolio and strong performance are driving an increase to full-year guidance. Next slide, please. Those of you who know us well know this is the Win Strategy. This is our business system, focused on the fundamentals. It is a proven strategy. We trust the process, and this is how we deliver results. Very simply put, this strategy works. I first used the Win Strategy when I joined Parker 16 years ago as a plant manager. I very quickly learned that it wasn't just words written on a piece of paper. I was trusted, empowered, and expected to use the tools in the Win Strategy to improve my plant. I've since used it as a general manager, group president, and as an executive officer of the company. Based on a solid foundation of culture and values, we pursue four goals: engaged people, customer experience, profitable growth, and financial performance. Engaged people is the first and most important pillar. As I mentioned on the previous slide, safety is our top priority, and it sits in the first position of this first pillar. One of the keys to our success is our decentralized operating structure. High-performance teams at our 85 operating divisions utilize all the tools in the Win Strategy to deliver results. Our culture drives an ownership and entrepreneurial mindset, one that I appreciated as a general manager and respect today. We are excited to show you some examples of the Win Strategy in action at our upcoming Investor Day on May 16. Next slide, please. Embedded in the Win Strategy is our high-performance culture. This is a competitive advantage that has allowed us to build a better and more resilient Parker. The structure of high-performance teams increases engagement and commitment at all levels of the organization. This, coupled with a disciplined operating cadence, drives top-quartile performance. Our approach is strength-based, focused on building relationships and team member development. This structure reinforces our customer-centric mindset and drives continuous improvement across the enterprise. Next slide, please. Our people, our high-performance culture that I just spoke about, our strategy, the Win Strategy, and our transformed portfolio have driven the performance you see on this page. This is a snapshot from FY 2019 through our FY 2024 guide. 7% revenue CAGR, from $14.3 billion to our FY 2024 guide of $19.8 billion. 600 basis points increase in adjusted operating margin from 18.6% to our guide of 24.6%. 14% adjusted EPS CAGR from $13.10 to our FY 2024 guide of $24.75, and 2x the amount of free cash flow dollars, $1.5 billion in fiscal year 2019 to our FY 2024 guide of $3 billion. A lot of hard work. We are very proud of the global team delivering these results, and we have a very promising future ahead of us, and we're not done.... I'll hand it over to Todd for the summary of our third quarter highlights. Thank you, Jenny. It's great to see those results. Let's take a look at the quarter. This is just a high-level financial summary for the company. As Jenny said, Q3 was another strong quarter for Parker. Once again, every number in that gold highlighted box is a Q3 record for the company. If you'll see total sales, we did grow. It's up slightly from prior year. We reached $5.1 billion in sales. Organic growth was just over 1% positive. Slight negative impact from divestitures, that's just 0.3% of sales, and currency did shift to a slight headwind this quarter. Not terrible, it's 0.6%, but it's the first time this year currency has been a headwind. If you look at the adjusted segment operating margins, that's an improvement of 150 basis points versus prior year. We did finish at 24.7. Similar story on EBITDA margins. We finished at 25.5. That is an increase of 130 basis points from prior year. Moving to adjusted net income, we generated $851 million of net income. That is a ROS of 16.8%. Adjusted earnings per share were $6.51. That's a 58-cent or 10% increase from prior year. Net income is also an increase of 10% from prior year. Q3 was really just a solid quarter. When you look at the sales, when you look at segment operating income, when you look at net income and earnings per share, each one of those generated the highest levels that we produced this fiscal year. So very strong quarter. If we can move to slide 9, this just shows the walk of that $0.58 or 10% increase in adjusted EPS. I'm really glad to say, again, the main driver is segment operating income dollars increasing. We increased by $76 million in the quarter. That accounted for $0.45 of the EPS growth. That's nearly 80% of the EPS growth in the quarter. Again, Jenny mentioned this, but it's just impressive operating performance across the company. But specifically, the strength in our aerospace system segment was, again, a main contributor this quarter. Interest expense is again favorable. That really is the result of our successful efforts to deleverage after the Meggitt transaction. Tax was favorable, $0.06 versus prior year. Simply, that's just a few discretes that are certainly hard to predict. Corporate G&A was higher from prior year, but really, that's just more a result of prior year favorable items not repeating this fiscal year, and you can see other expense and share count were just a little bit higher than prior year. So the theme really remains the same this quarter as it has in the first half of the year. Our team members are generating strong operating performance that is driving margin expansion, really in a tepid top-line industrial environment. And our debt pay down efforts are really reducing our interest costs. So it's just great to see the team work together to generate those results. If we go to slide 10, this is the segment performance. You can see, we continue to see positive growth as a result of the higher concentration of aerospace in our portfolio. Margin expansion does continue across all of our businesses. That is great to see. Order dollars did remain strong against a very tough comp in the prior year. Order dollars did improve sequentially from last quarter, so we're happy to see that. If you look at the North American businesses, sales volume reached $2.2 billion. Organic growth was down 4.6%, as you can see on the slide, but that was in line with our expectations. It was driven by softness in off-highway and transportation markets, specifically. We did continue to see destocking throughout the quarter, but I will say it did continue at a decelerating rate. Despite the down volume, margins increased 100 basis points to a third quarter record of 24.1% in the North American business. This just really is a shining example of operational excellence and how the teams continue to see opportunities to drive margins even higher. Order rates in North America did remain constant with last quarter. They finished at minus four in the quarter. If we move to the international businesses, you can see sales volume reached $1.4 billion. Organic growth was down 3.1% on those businesses, but again, that was in line with our guidance. If you look at EMEA, that was the most negative at -5.1, and just some contraction, again, in off-highway, transportation, and in-plant industrial markets. Asia PAC growth was -2.8. China remains generally soft. Latin America is a strong point. They continue to be positive at 19%, versus prior year. What we're really proud about is the team, even on that lower volume, expanded margins by 10 basis points, and they also generated a third quarter record of 23.5%. Focus remains on productivity improvements and cost controls, in these businesses with orders in the international businesses at -8. In EMEA, we are seeing some choppiness on orders, while Asia PAC, we are seeing some improvements. If we look at aerospace, aerospace delivered another stellar quarter for the company. Sales reached a record of $1.4 billion. That's the highest we've ever had in the aerospace business. Organic growth was 18% across every market segment we have in aerospace. This is the fifth quarter of double-digit organic growth within aerospace. Aftermarket strength continues to be outstanding. This quarter, we were up 26% in the commercial aftermarket area, and operating margins are fantastic, reaching a new record, increasing by 320 basis points versus prior year to come in at 26.7%. Demand just remains robust, aftermarket strength continues, and the team is just doing great driving margins ever higher. Order rates in aerospace continue to be very strong at +15%. Just great performance across all of our businesses. If we go to slide 11, let's talk about cash flow. First of all, I think most of you have probably seen this. Last week, our board approved a quarterly dividend payout of $1.63 per share. That is a 10% increase over the prior dividend payout. With that increase, this does increase our annual record of paying higher dividend dollars per year from 67 years to now 68 years. Just an unbelievably impressive record. Looking at cash flow, we've got a record on cash flow, $2.1 billion of cash flow from operations. That's 14.6% of sales. That is a 20% increase over prior year. I said it already, but it is a record. When you look at free cash flow, we did $1.9 billion. That's 12.6% to sales, and that also is a 22% increase versus prior year. The team really remains focused on being great generators and great deployers of cash. We are reaffirming our full year target of free cash flow dollars of over $3 billion, and we certainly are committed to free cash flow conversion of over 100% for the full fiscal year. So great performance on cash. Let's move to slide 12. I'm happy to give an update on our deleveraging progress. We did reduce debt by over $420 million in the quarter. You know, since we closed the Meggitt transaction, you know, it was just 6 quarters ago, we have reduced debt by over $2.6 billion. That, coupled with the continued expansion in EBITDA growth, we have reduced our leverage by over 40% just since the close. Both of those are ahead of our original commitment, and you can see on the slide here, gross debt to adjusted EBITDA is now 2.3 times, and net debt is down to 2.2 times. We still feel confident that we will get the $2 billion of debt paid down in this fiscal year, and we certainly are on track to achieve net leverage of 2 times by June of this fiscal year, just in 2 months. So if we go to slide 13, just some color on our guidance. We are reaffirming our full year organic growth midpoint and increasing our margin and earnings per share expectations for the year. Our reported sales growth for the year is expected to be 4% at the midpoint, and on organic growth, we are increasing aerospace once again. We're increasing it by 300 basis points to 15% for the full year. Both North America and international diversified industrial businesses, organic growth is now forecasted to be negative 2.5. But for the company, full year organic growth remains the same, at 1.5% positive. So you can see how aerospace is helping the portfolio, on our top line. We're raising adjusted segment operating margins. We're raising that to 24.6. That's 30 basis points higher than prior guidance, and, that now forces the full year margin expansion to be approximately 170 basis points versus prior year. Corporate G&A and interest, unchanged from prior guide. Tax rate is down a little bit, just really based on Q3's actual results. We expect that to be 22% now. Full year as reported, EPS is increased to $20.90, and full year adjusted EPS is increased to $24.75. Both of those are at the midpoint, and there's a range of narrowed to ±$0.10 for the fourth quarter. Finally, if you look at the fourth quarter, our adjusted EPS is expected to be $6.13 at the midpoint. So as usual, we've got some more specifics in the appendix, if needed. And now I'm going to hand it back to you, Jenny, and I ask everyone to turn to slide 14. Thank you, Todd. A few key messages to close us out as we near the end of our fiscal year 2024. Our high-performance culture builds a better and more resilient Parker. We will continue to drive operational excellence through the Win Strategy. And as mentioned a couple of times already, aerospace demand remains robust, and our transformed portfolio drives growth. And finally, Parker is and will continue to be a great generator and deployer of cash. Next slide, please. We are looking forward to sharing our story at our investor meeting on May 16. I will be joined by our President and Chief Operating Officer, Andy Ross, our Chief Financial Officer, Todd Leombruno, and our Vice President of Investor Relations, Jeff Miller. Our key themes for the meeting are transforming the company, how we are positioned for growth from secular trends, operational excellence, and financial performance. Thank you again for joining the call today, and I'll turn it back over to Todd for Q&A. Rob, we're ready to open the lines for Q&A, and we'll take whoever you got first in the queue. Thank you. Our first questioner in the queue today is Scott Davis with Melius Research. Please proceed with your question. Hey, good morning, Jenny and Todd and Jeff, and- Morning, Scott. Morning. Look forward to seeing you in a couple of weeks. I got a bunch of questions, but I'll try to keep it here brief and pass it on. Just as it relates to M&A, what... Just mark-to-market a little bit on what you guys are thinking on your pipeline, what your comfort level in stepping forward right now, kind of what good looks like, and are we more, you know, are we looking at more bolt-on-ish type stuff at this point, or are there other kind of Meggitt-type deals that are out there? Well, I often say, Scott, we really like Meggitt, and we wish there were a lot of Meggitt-like deals out there for us. You know, listen, we first and foremost talking about, you know, we're committed to paying this debt down, right? We're doing it earlier than we said we would. We're forecasting to be at 2 times by the end of this fiscal year. But, you know, we're always working on that pipeline, building the relationships. The pipeline is robust. There are, you know, targets in there of various sizes, some bolt-ons, some larger ones. Really, it's about making sure that we have the right one. It has to be accretive to growth, margins, follow the secular trends, and really be the right fit for Parker, fit with our interconnected technologies, and be the right business. So, we continue to work that pipeline, and you know, we'll have more to talk about that in the future. Okay, look forward to that. And a smaller issue, but when you think about commercial air aftermarket and AERO being up 26%, I think that those are big numbers. And help us understand, you know, at the customer level, are they taking on more inventory? How do they generally manage their inventory? Or how do you guys at least help them manage their inventory so that, just so that you don't experience double ordering and things like that, and perhaps just making sure we understand the risk profile of those types of growth rates and the sustainability. Thanks. Yeah, I... It's a good question, Scott. I haven't heard of any concerns of double ordering in aerospace. I think there's still, you know, supply chain constraints out there that, you know, everybody has their orders. There's long lead times, but no, I've heard nothing about double ordering. You know, as, as we go through this balance of, air traffic returning to pre-COVID levels, you know, different manufacturers ramping up to higher rates, you know, it's, it's a balance, and, and MRO, I believe, will continue to be strong. So, you know, for the foreseeable future, we see that as strong. Hey,[audio distortion] Scott, one thing I would say- Thanks a lot, Dion. You probably know this, Scott, but you know, with Meggitt, specifically in the quarter, our aftermarket business is 47% of the total aerospace business, so it's up. Jenny mentioned the air traffic is you know, back to pre-COVID numbers, and it's really a combination of the expanded aftermarket mix within the company. Yeah. Well, it looks like they certainly need to replace some wheels and brakes based on what we read out there, so good luck, guys. Thank you. Thanks. Thanks, Scott. Our next question is from the line of Andrew Obin with Bank of America. Please just give us your questions. Yes, good morning. Morning, Andrew. Just to follow up on aerospace and aero margins. You know, you guys have really emphasized one-time mix over the past- one-time mix benefits over the past couple of quarters, I guess, highest spare impact. But, you know, we're up sequentially from 1Q to 2Q. What's going so well? Well, as we were just talking about, you know, the, the mix, Q3 was actually aftermarket mix, was actually 48%. Year to date, we're at 47%. Okay. So, you know, the combination of what we had in our portfolio and adding to what we got with Meggitt, it's been a big increase, and it is excellent growth from our braking business and other areas. Also, military aftermarket growth is higher because of the public-private partnerships we have with the Department of Defense. So a lot of things going well, really pleased and well-positioned with this, you know, this portfolio of complementary technologies, so really positive about this going well into the future. Gotcha. Just a question on orders in North America. I think you highlighted softness in off highway and transportation. Maybe you could just walk us through what are you seeing on a mobile, and I mean, it's been a while since we used those terms, but mobile and stationary. Am I correct just to think that it's a lot of ag and Class A trucks? Just how much visibility do you have? Because you are saying the stock can continue at a decelerating rate, but where do you see the bottom? Thank you. Yeah. Okay, so I'll just do a little run-through of the markets. Obviously, we know aerospace is very strong, and we've raised our guidance because of that. If you take a look at energy, oil and gas, that remains positive. In plant, industrial equipment, low single digit negative, more negative in Europe, less in North America. Transportation, mid single digit negative. Automotive is down globally, and I would again say that Europe is more negative there. Off-highway, high single digit negative, primarily construction and ag, and both of them, you know, are equally negative, Andrew. Okay. Again, Europe, a little more negative. When we take a look at HVAC and refrigeration, it is still double digit negative, but it's some pretty tough comps to prior. It was you know quite positive this time last year, mainly driven by the residential business. It is improving. There's an improvement in commercial. And as you were just mentioning, destocking. Distribution is slightly negative, and we saw that destocking lingering through the quarter. So when we take a look at you know where we're at today, industrial North America orders have been negative for five quarters now, and we're still you know very proud of this, still guiding to 1.5% organic growth for the company. And historically you would see that orders go negative for an average of six quarters. And old portfolio, total Parker went negative same quarter as Industrial North America. So big difference here. What I would also say is the backlog remains strong. Backlog dollars are at near record levels, and, as we've spoke about in quarters past, consistent coverage, really holding in there, as we've talked about before, pretty much double what they've been historically. And while we have Q3 order conditions, reflected in the guide, I would have to say that April orders are off to a better start, and, we might be seeing the end of destocking here. Well, I'll take that. Thanks so much. Yeah. Thank you. Our next question is from the line of David Brasso with Evercore ISI. Please go ahead with your questions. Hi, thank you. The implied fourth quarter for international, the organic growth rate weakening from the third quarter. Can you just help us, maybe geographically or however you'd like to take us through that cadence? And is there any, you know, sort of visibility on when those declines start to lessen? Yeah. Thank you, David. So, you know, obviously, orders went from -5 in Q2 to -8 in the international. So, that is, you know, definitely what is reflected in the guide. Destocking continued. As I was mentioning earlier, you know, softness in off-highway and transportation, and industrial equipment. You know, we just really see that the macroeconomic indicators are still in contraction in Europe. You know, really, the sales for the quarter were in line with our expectations, but the orders in the quarter are really what has driven us to take that down in Q4 and slightly for the year. We had it at a -2 for the year, and now we have it at a -2.5. So, you know, we're not, we're not seeing the same thing that we're seeing in North America at the start of this quarter. So, you know, not signaling any turn there yet, but, we're keeping a close eye on it. Okay. I'm just trying to get a sense of when, if North America, you sound a little more encouraged, for April. I'm just making sure the international doesn't sort of dampen, I would suspect you think maybe North America organic can turn positive in a couple quarters. Maybe sort of if you kind of address that thought, if you could? Well, so like I said, we usually- International, yeah. Usually, North America, you know, historically, the average has been six quarters, and then we see a turn, right? You know, international has just—it's been choppy. It's been really choppy over the last several quarters, so it's hard to call, you know, at what point that would follow North America. We're just gonna have to keep a close eye on it, and we'll have a better update for you next quarter. Then lastly, price costs. Can you give us an update on how that's trending? And I'll, I'll hop off. Thank you. Yeah. So we're, you know, we're back to what we would call, a normal pricing environment with doing our, our twice-a-year price increases. You know, as a reminder, with price, you know, we went out early and often. We believe that price to be sticky. You know, we still have inflation out there, and, you know, I think we've done a really good job, the teams have done a good job at, maintaining, you know, our margin neutrality. So we're back to, more of a normal environment right now. Thank you. Thanks, David. Thanks, David. Our next question is from the line of Joe Ritchie with Goldman Sachs. Please proceed with your questions. Hi, good morning. Good morning. Yeah, so we're getting lots of questions, obviously, on the turn in North America. And I'm just curious, as you know, so really helpful to hear that April's a little bit better and that we maybe work towards the end of destocking. Just curious, like, how do you think that this, you know, potential inflection actually will work? And what I'm asking specifically is, you know, with your distributors, you know, what are the conversations like? Do you feel like it, you know, if things could be low and slow, just given we've seen this destocking now for several quarters? Just any comment around that would be really helpful. Well, I would tell you that the distributors have been, you know, positive for a couple quarters now, right? You know, they've been sharing with us how they've been able to participate in, you know, some nice work with some reinvestment in some factories, you know, maybe some early days on some of these mega CapEx projects. But, you know, just really, really a positive sentiment. I wouldn't tell you that at this point, anybody's indicating a slow move or a steep climb. It's just what we're seeing, you know, early in this quarter. It's just really kind of looking like we might be seeing bottom. Okay. Yeah, no, that's, that's. Look, that's great to hear. I guess, you know, and maybe just kind of thinking through also that the questions around the industrial international business as well. Like, you guys have done a really good job of expanding margins, even at a time when things haven't, you know, volumes have been negative. I'm just curious, like, if it's slower to pick up in the international business, how do you feel about, you know, the margin trajectory of that business from here? I have a lot of confidence in these teams. I mean, in this, you know, in this environment for the last several quarters, they've just done a great job with cost control and expanding margins. You know, these teams, as I mentioned earlier, you know, they, they're practitioners of the Win Strategy, and they know what levers to pull. We've commented in the past, we're never waiting for a downturn or a recession or anything that might happen. We're constantly looking at making sure that we expand margins. Awesome. Thanks, Jenny. Look forward to seeing you in a couple of weeks. Same here. Thank you. Our next question is from the line of Jamie Cook with Truist Securities. Please proceed with your question. Hi, good morning, and congratulations on a nice quarter. I guess, you know, Jenny, if you look at your implied margins for this year, the 24.6%, we're sort of already at, you know, your, your targeted margins, which I'm assuming, which we- you guys will address in, at your Analyst Day. But I'm just thinking as, as you're focused on, you know, igniting organic growth, you know, for Parker Hannifin in total, just broad across the portfolio, to what degree do you have to balance the ability to improve margins much more from here? Just for, you know, most industrial companies having a, you know, 25% margin or whatever is pretty good. I'm just wondering if we have to put a ceiling sort of on the margins to, to get the organic growth. And then my second question is, or, or would you, too, I guess? You don't have to, but would you consider that strategy? And then my second question, you know, just back to the M&A question again. I mean, obviously, Meggitt, it's been a big positive for you guys. You know, longer cycle business has given you guys the ability to grow them organically as industrial is weaker. Do we need sort of more long, late cycle aerospace businesses, do you think, to have a more balanced portfolio? Thanks, and I'll get back in queue after that. Thanks, Jamie. So, first of all, I would say, you know, we're really proud of our teams in this margin expansion that we have achieved. And as I mentioned earlier, you know, we're not done. We feel like there's still a lot of runway, no pun intended, in Win Strategy 3.0, a lot of opportunity to expand margins. We feel very strongly about our ability to grow differently with this portfolio and with the secular trends. And, you know, we'll have some more updates for you at the investor meeting here in a few weeks. But we're not pulling together a strategy right now that limits us on one or the other. We're just gonna stay focused on margin expansion and growing that top line organically. On your acquisition question for, you know, more aerospace or what the mix needs to be, you know, it does need to be that longer cycle business, accretive to growth, accretive to margins, EPS, complementary technologies. All of those things, you know, have encompassed the last couple acquisitions that we've done. You know, it's one of the reasons that I believe that we've been so successful with them. So that's the kind of business we're looking for. No magic number on a percentage of aerospace. We obviously like the aerospace business, but we like all of our technologies. We think there's real power in these technologies being together, and that's why we often talk about them being interconnected, and, you know, most of our customers buying four or more of these at a time. Our next question is from the line of Nathan Jones with Stifel. Please just proceed with your question. Good morning, everyone. I guess a bit of a follow-up on some of the questions on the order rates and expected, you know, improvement in those in the short term. I think for me, by historical standards, this has been a relatively shallow downturn in the industrial businesses for Parker as well. So I was just interested in your commentary on on how you envision the shape of that recovery as well, just given that it's been a relatively shallow downturn, should that lead to maybe a shallow or upturn? Or just kind of your expectations on on what the recovery looks like when it comes? Yeah, I think, you know, I think it's been to use your terms, you know, more shallow than the past, obviously, because we've changed the portfolio. We do have longer lead time business in the industrial part of our business today. We have higher aftermarket with Clarcor. We have longer lead time business with LORD, and, you know, as a reminder, we have some aerospace business that sits in the industrial segment, where it belongs with some of those technologies in those groups. So, I think the portfolio is a reason that it's, it's not as deep as maybe as it has been in the past. Going forward, it's hard to say how that's gonna move, but I do believe with the secular trends, with some of these projects that are out there, that, you know, we're gonna like the way we grow differently. So, no real indication for you today on, you know, if it's gonna be slow and steady or, you know, some spikes, but just, you know, really wanted to share with everybody today that, you know, the start of the quarter looks better, and we might be finally seeing an end to this lingering destocking. That would be good to see. A couple questions on margins or a question on margins. You know, obviously, North America margins up 120 basis points on down revenue, and industrial- and international margins up 10 points on a 6% decline in revenue are very strong margin performance. As we envision the return to growth and the end to this, you know, destocking and down cycle here, what kind of incremental margins should we be expecting as you see those industrial businesses return to growth? I think you're gonna, you're gonna see the normal incrementals that you've seen from us. We, you know, we target 30%. We still think that that's a good number, but, you've seen us, outperform that in the past. But I think going forward, that's a, a good number for us. Okay. Thanks very much for taking my questions. Thank you. Our next questions are from the line of Julian Mitchell with Barclays. Please proceed with your questions. Hi, good morning. ... Maybe, apologies, I just wanted to revisit the, DI North America sort of top line, color just one more time, if that's okay. And it was really sort of relating to the point around, you know, seems like destocking may be nearing an end in the order intake, but you did take down your, fourth quarter, organic sales assumption for North America. So is that really reflecting the fact that, you know, you've had a five-quarter orders decline behind you, but you've only had a two-quarter revenue decline behind you in that region? And so we should expect, you know, several quarters of revenue decline, commensurate with the, the longevity of the orders decline. Is that the right way to think about it, or there's something moving around with the backlog that means, no, that's the wrong answer, we should have a much shorter revenue downturn than the orders downturn? Thank you. Yeah, yeah, Julian, we're not expecting that to linger like that. What we really were just trying to signal was that, you know, things look better in the month of April than the way we finished Q3. So no, there's no, you know, long lingering expectation for negative growth in North America. Understood. Thank you. And then just, my second question, you know, trying to look at revenue in another way, perhaps in industrial, would be on the sort of technology, platforms basis. So we saw, you know, around, I think, high single digit declines in, in motion and, and flow and process control in the quarter, and sort of flattish in filtration and engineered materials. Realize there's, you know, different moving parts geographically and so forth, but on the filtration and, and engineered materials side, do you think that that can sort of hold in there better than what happened in the other two industrial tech platforms? Or did it sort of follow them down and, and then back up just with a lag? Thank you. Julian, we do. Thanks for pointing that out. We do believe that those businesses could and should grow differently than the motion systems and the flow and process platform. You know, those businesses, motion systems and flow and process, those are the most levered to the distribution network, highest percentage of distribution sales. You've seen the destocking continue over the last couple quarters in that space. We do think that that's kind of nearing an end. Jenny already mentioned it, but, you know, filtration, heavy aftermarket, engineered materials, a little bit more longer cycle business, both in automotive end markets and then some of the transportation markets. So, you know, it kind of supports our strategy over the last many, many years to help the company perform differently, no matter what's going on in the global industrial market, that we could perform differently. And I think if you look back over the last 18 months, that's why the order downturn has been less shallow. That's why we've been able to post organic growth as a positive, even in industrial, in light of some negative orders. So, you know, I think it's part of our shaping of the portfolio. Yeah, I mean, it's the portfolio is more resilient, and you know, the teams across all these businesses are doing a great job using the tools to expand margins. So it's you know, it's the reason why you know, with 1.5% organic growth, we can expand margins 170 basis points. So it's you know, like I said before, we're really proud of the whole team. That's great. Thank you. Thanks, Julian. Our next questions are from the line of Mig Dobré with Baird. Please proceed with your questions. Thank you for taking the questions. Good morning. I also sort of wanna talk a little bit about industrial and the orders there. I'm curious, when you kind of examine your business and you look at the last four or five quarters, how you think about the OEM versus distributor demand. It seems to me that in this down cycle, we had lower distributor demand occur maybe earlier than what's been going on with OEMs. You know, the destocking process started earlier for distributors, and we're just maybe now really starting to see the OEM production cuts. I'm wondering if that's sort of your experience as well, and if that somehow implies that while the down cycle is shallower, it could actually be longer than the traditional six quarters that you've seen in the past where things were more synchronized. I would say that I do think we saw destocking start earlier for distribution. But, you know, as we've seen with many of our large OEs, you know, they've talked about higher dealer inventories, right? And so that's kind of a sense of their own destocking. When the dealer inventories are high, they're not, you know, placing as big orders as they had in the past. But I would tell you, though, Mig, there's nobody canceling orders or pushing them, you know, pushing them out to any great extent. So, I don't feel like this is gonna last longer. We're not seeing any signs that are telling us that right now. Just the early Q4 signs here that it looks different than it has. You know, Mig, that mix really still remains the same, you know, that 50/50 mix that we talk about in the industrial segment. So, you know, we think there's a nice balance there. Okay. And, you know, on capital deployment, and maybe you'll comment on this at your upcoming Investor Day, but I'm sort of curious, as you're evaluating M&A, if there's something to be said about expanding the portfolio outside of the core areas that you've been targeting over the past couple of years. So more expansive strategy, or if, you know, sort of the lanes that you've been active in are still the areas that you're looking to build? Thank you. ... I would tell you that we're not, we're not looking to expand outside of the technologies we have. As I've commented, you know, a couple of times externally, we really like this set of technologies. They have a connectivity to them, and we think they're the right ones for our portfolio. All right, appreciate it. Thanks, Mig. Our next questions are from the line of Jeffrey Sprague, with Vertical Research Partners. Please proceed with your questions. Hey, thank you. Good morning, everyone. I guess you can tell we're all, like, hyper-focused on orders, right, Jenny? We are, too. We are, too, Jeff. We are alone. Yeah. And I may be even a little more hyper-focused, given the way I'm gonna phrase my question. It rhymes a little bit with what a couple of other people brought up. But, you know, it is interesting when you look at North America, right? Sales growth has outpaced order growth, I think, for seven quarters until this quarter, and it looks like we've kind of recoupled. You know, you mentioned some backlog, but should we be thinking really that, you know, sales and orders are gonna be much more tightly correlated here as we try to glean where the upturn might be? No, I don't think so, Jeff. I don't think we should be thinking that way. I think that, again, if I go back to the strength of the backlog and the change in the portfolio, it's different than it was in the past. It's a different company than it was 10 years ago, five years ago, right? And you know, we really believe that, you know, once this turns, we're gonna grow differently because of that. Okay. Yeah, Jeff, I would add, you know, obviously, every one of these things we go through is a little bit different. We did come off two years of double-digit organic growth, right? So, there was a significant amount of demand that we had to deliver through those industrial businesses. I think if you've seen that, inventory levels moderate throughout the year, we've kind of reduced that thing. But as Jenny said, the backlog really remains pretty strong. Yeah. It's at, you know, near all-time levels. We continue to pressure test that to make sure that it's real and legitimate. I think it's just a part of having a longer cycle mix within that portfolio. Great. If you have the numbers handy, can you just tick through the kind of the four aero buckets? We got aero, you know, commercial aftermarket up 25, but just OE and then military aftermarket and OE, what those numbers were in the quarter? For Q3, Jeff, you're asking? Yeah, for Q3. Yeah. Commercial OEM was up 18%, and that was mainly, you know, based on strong narrow and widebody growth. MRO, up 26%. You know, same thing, air traffic recovery, things we've talked about. Military OEM, 7%, and MRO, 14%. Thanks a lot. I'll leave it there. Yeah, Jeff, I would just remind everyone, that's all organic at this point, too. Yes. Thank you, Jeff. All organic. Thank you. Our next questions are from the line of Joe O'dea with Wells Fargo. Please proceed with your questions. Hi, good morning. Sorry to bore you, but I'll stick with the common theme. Just wanted to get a little color around, I mean, certainly encouraging commentary on kind of North America sort of cycle and demand. I guess, as it relates to what's implied for fourth quarter, I mean, it looks like a larger kind of sequential revenue decline from Q3 to Q4 than, you know, what we've seen over the last number of years outside of COVID. So, you know, just kind of sequentially, you know, what you're anticipating there, you know, the orders seemed like they were stable from Q3 to Q4. I think you said, or from Q2 to Q3, I think you said dollars up. And so just what's kind of driving maybe a little bit softer sequential trend there? Because it sounds like otherwise, things are holding and even improving. Yeah. So as I mentioned earlier, you know, the guide is based off of Q3 order rates, and they-- you are right, they did stay at -4. But if you look at the sales dollars, Q4 dollars are in line with Q3. So, that's why we're signaling that -4 versus approximately -1 that we had previously. Got it. Okay. That's, that's helpful. And then just a question in terms of kind of pricing sensitivity and just to kind of understand customer experience. I mean, when a customer walks into a distributor, are they typically walking in knowing exactly what they want to buy in a Parker product, or are they kind of looking at prices and shopping between Parker and competitors? Just trying to understand how much price shopping goes on versus how much is kind of predetermined and brand loyal. Yeah, first of all, I think the Parker brand is very strong, and people are looking for Parker products when they walk into a Parker distributor. And they need a part, and they need it now, right? So, it's not what I would characterize as price shopping, it's availability, and then having that person standing behind the counter who knows how to apply that part, how to help them get the right part if they don't know exactly what they need or they don't know exactly what replacement is in order. So, they're walking in to get help, and they're walking in to get a product. And that really is, you know, what is so special about the partnership that we have with our distributors. They're just an extension of our engineering team, and they provide a great value and service to many customers. That's helpful. Thank you. Thank you. Our next question is from the line of Joe Giordano with TD Cowen. Please proceed with your question. Hey, guys. Thanks for taking my questions. Hey, Joe. Hi, Joe. Hey, on the aerospace side, so, you know, given all that's happening, I know your aerospace portfolio is very broad, but if we just kind of narrow into, like, OEM commercial, like, given what's going on with Boeing and the reduction in rates there, like, it doesn't sound like they've told any of their suppliers anywhere to slow down what they're shipping to them, given supply chains. But, like, is there... At what point do you see risk to that dynamic, where build rates are down, but everyone's still shipping the same and inventories must be building over there? You know, we stay in close contact with all the airframe manufacturers, and our aerospace team, you know, talks to the Boeing team on a regular basis. So, you know, what we're seeing is consistent with what they've talked about most recently, production in the 30s. You know, they have signaled that the rate increase isn't going to happen right now. But, you know, we are committed to make sure that we are at pace with them and that we continue to supply product them to help them reach their goals. So we're not seeing any signs of, you know, that slowing down right now. You know, Joe, too, I—we talked about it, but, you know, you think about that mix, it's nearly 50/50 aftermarket versus OEM in the aerospace business, so, you know, that's helpful as well. Yeah, for sure. Just on price, you mentioned you're, you're back to, like, normalized situation here. I guess inflation is kind of tough to figure. You have some things going up, like copper, some things going down. If we get into a situation where inflation is more consistently rising than falling again, how do you think about your customers' either willingness or ability to accept price to the same extent that they did last cycle? Well, you know, I think we you know, we've talked about how, you know, our our pricing team, our pricing muscle is strong. And one of the things that I think we even got stronger during these last couple of years is really looking at the total cost of inflation. So it's not just material, right? It's all of those things that just hit extraordinary levels all at once. And while those aren't, you know, easy conversations, you know, they're conversations that we had, and if we would need to have them again, we would. You know, they're based on facts, they're based on data, and, you know, we would cross that bridge when we come to it. But as I mentioned earlier, we're back in more of a normal pricing environment, but I believe it's, it's sticky because inflation's still out there. Thank you, guys. Thank you. Our next question is from the line of Brett Lindzey with Mizuho. Please proceed with your questions. Hi, good morning, all. Morning, Brett. Good morning. Yeah, yeah, first question is on business realignment charges. So it looks like the 2024 expectation dropped to $57 million from $70. Anything to glean there? Is it just timing on projects, or is there, you know, some cost to achieve, perhaps moving lower? Any thoughts there? Yeah, it's just a minor, minor tweak. I would call it more timing than anything. Maybe getting some of those done at a little bit of a lower cost as well. So we just kind of updated it based on, you know, the best look we had from the team. Okay, great. And then, just on pricing, I know you don't disclose actual price, but was it positive in both those industrial segments? And I'm just curious on any, you know, competitive behavior on price in some of the more challenged regions like Europe or Asia. No, you're right. We don't, we don't comment on the exact price. And as I mentioned earlier, you know, we went out early and often, so, we've protected our margin to make sure that it maintains neutral going through everything that's gone on the last couple of years. And that's where we stand today with price. Yeah, I mean, if you're asking about rolling price back, we've not done that, right? Jenny mentioned it. We're still in a inflationary environment, and a lot of those costs that went up, you know, have not gone back down. So, we feel very much tied to the price. We don't do it randomly. We do it when we need to, and that's kind of what our process has been. Okay, great. Congrats on the performance. Thanks so much. Thank you. Hey, Rob, I think we've got time for one more. We got time for one more question here, if we've got somebody. Sure, sure. Okay. Our next question will be from Nigel, line of Nigel Coe with Wolfe Research. Nigel, are you there? Thanks. Yeah, I'm here. Can you hear me? Good to hear you. Yeah? Yeah, good. Thanks. Excuse me again. Okay, so coming back to April, let's talk about April again. Maybe could you just hone in on North America, you know, where you're seeing the improving trends? And the spirit of the question is that it feels like in your off-highway and on- even in the on-highway customers, things aren't necessarily getting better. So I'd be curious on, you know, which pockets of customer groups are you seeing that improvement? And then if we zoom over to Europe, are we seeing a similar degree of improvement over there, or do we still see pretty negative trends? You know, I would, I would say, Nigel, at this point, I'm, you know, just, commenting on how I see it, you know, better in April. You know, I don't really want to go into any detail in, in markets or specifics, but I would say that, you know, where we're seeing it is mainly North America. It's not to say that there's nothing positive in Europe or Asia, but the comments about April are, are mainly North America, where we're seeing, you know, quite- you know, might be that this destocking is coming to an end and, that we'll see a turn here. Yeah, it's got to come to an end at some point, I suppose. And then, switching over to margin and SG&A productivity is really impressive. I think underlying SG&A came in at 13.5% this quarter. So I think for the full year, we're sort of in that 14% zone. Is that the right range going forward? Do you think you can maintain sort of sub-15% SG&A to sales? That's the question, really. You know, is there anything sort of like discretionary that you're controlling at this point, or is this a good range going forward? You know, Nigel, thanks for recognizing that. You know, we have always prided ourselves on being frugal when it comes to SG&A expenses. Quite honestly, we think we can do better. I wouldn't say that there's anything that we've been holding off on, right? I mean, the overall level of the business remains extremely high, right? These sales levels are record levels. But we hold our team to constantly assessing and making sure we're making the best investments in the business. So, we think we can do better when it comes to SG&A, there's no doubt. Great. Okay, thanks. Thanks so much. I think that's all we have in time for. So, I want to thank everyone for joining us today. As usual, Jeff Miller, our VP of Investor Relations, and Yan Huo, our Director of Investor Relations, will be available if anyone needs any follow-ups. As always, we appreciate your time, your attention, and your interest. So, this concludes our FY 2024 Q3 earnings release webcast, and I wish everyone a great day. Thank you. Thank you. Today's conference and webcast has concluded. You may now disconnect your lines at this time and log off your computers. Thank you for your participation, and have a wonderful day.