Please note, this conference is being recorded. I will now turn the conference over to your host, Todd Leombruno, Chief Financial Officer. Thank you. You may begin. Thank you, Diego. I'd like to welcome everyone to Parker's Fiscal Year 2025 Third Quarter Earnings Release Webcast. As Diego said, this is Todd Leombruno, Chief Financial Officer speaking. As usual, with me today is Jenny Parmentier, our Chairman and Chief Executive Officer. We really do appreciate your interest in Parker, and thank you for joining us today. If we could move to slide two, this slide addresses all of our disclosures on forward-looking projections and non-GAAP financial measures. Obviously, the items listed here could cause actual results to vary from our forecasts. The press release of this presentation, "All Reconciliations for All Non-GAAP Measures," were released this morning and are available under the Investor section on our website at parker.com. The agenda for today has Jenny starting with the highlights to our record third quarter performance. She's also going to reiterate the strengths of our transformed portfolio and how the tools of our Win Strategy allow us to drive performance in all economic climates. I'm going to follow Jenny with some more details on our third quarter financial results, and then we're going to provide an update to our FY 2025 outlook, including market verticals and, of course, updated financial guidance. We're going to conclude the session with the normal question- and- answer portion of our call, and we are going to do our best to address as many questions as possible. We know it is a busy day out there. With that, I would ask everyone to move to slide three, and Jenny, the floor is yours. Thank you, Todd, and thank you to everyone for attending our call today. Our third quarter performance demonstrates the strength of our business and our global team's ability to continue to deliver record results. We produced top quartile safety performance again this quarter, aligned with our goal to be the safest industrial company in the world. Record adjusted segment operating margin of 26.3%. This is our first quarter surpassing 26%. Record adjusted EBITDA margin of 27% and year-to-date cash flow from operations of $2.3 billion. Parker order rates increased to 9%, reflecting our transformed portfolio and long-cycle strength. This team is continuing to expand margins and EPS in a most dynamic environment. Next slide, please. This is how we do it. Our business system, the Win Strategy, has enabled us to consistently deliver strong results through business cycles. Safety, engagement, and ownership are the foundation of our culture. With our decentralized structure and the agility of our global team, we are confident in our ability to manage through macroeconomic uncertainty, including tariffs. Every tool in this business system expands margins. Next slide, please. Our portfolio is more resilient than ever. We have the number one position in the motion and control industry with interconnected technologies and solutions across our key market verticals. The acquisitions of CLARCOR, LORD, Exotic, and Meggitt have doubled the size of our filtration, engineered materials, and aerospace businesses, giving us greater exposure to longer cycle and secular growth trends. Next slide, please. Dedicated use of our simplification tools drives margin expansion across cycles. Today, we have a more agile operating structure than we have ever had before. Through use of Kaizen and the Parker Lean system, we evaluate and adjust our structure and footprint to ensure continuous improvement and optimization of our resources. Disciplined use of our 80/20 tools has made us successful in reducing revenue complexity. Leveraging our distribution channel and rationalizing product allows us to serve our customers better. Our simplified design tools further reduce product and related manufacturing complexity that enables growth and efficiency in our operations. We are using all of these tools to expand margins no matter what phase of the business cycle we are in. Next slide, please. Supply chain leadership is a competitive differentiator for Parker. The addition of enhanced demand and capacity tools, as well as dual sourcing strategies, has increased visibility and resilience, reduced lead times, and improved the customer experience. We have always had a local-for-local model driven by our desire to be close to our customers. This has also allowed us to leverage global capacity to better serve all of our customers. We have dealt with tariffs before and are extremely grateful for our excellent pricing and supply chain teams. Tariffs are a lot of noise and work, but our teams are leveraging analytics and robust processes to navigate and act quickly through these dynamic and challenging times. Announced tariffs are approximately 3% of cost of goods sold or $375 million on an annualized basis, fully offset by mitigation actions and designed to protect earnings per share. I'll now turn it back over to Todd to review the third quarter highlights. Thank you, Jenny. I am on slide nine, and I'm going to just run through the financial results very quickly. As Jenny said, this was a strong quarter, a record-setting quarter, in fact. It was another quarter of continued margin expansion and EPS growth. Sales were down 2% versus prior. Organic growth was positive at 1%. Currency remained unfavorable at - 1%. The main driver really of the overall decline is the result of those previously announced divestitures that we've made this year. That accounted for 2% of the decline, which is essentially the entire decline. As Jenny mentioned, adjusted segment operating margins were up 160 basis points to 26.3%. That is a record. Adjusted EBITDA margins were up 150 basis points to 27%. Obviously, the first time we've ever done that, that is a record. Net income is $904 million. That's 18.2% return on sales. Both of those numbers are records. Adjusted earnings per share is up 7% to $6.94. Being able to grow earnings per share 7% with top- line down 2% is just another indicator of just how different Parker is today. This was another quarter of strong performance that was consistent across all of the businesses. Each contributed to the margin expansion and cash flow performance that Jenny mentioned. This performance that we had in Q3 continues to support the expectations we have for another record year. If we could go to the next slide, slide 10, this just shows the walk of the $0.43 increase in adjusted earnings per share. Q3, really the same story that we had in the first half of the year. Unbelievably disciplined operating performance. Segment operating income dollars are up $53 million. That is $0.32 of the increase in earnings per share. Aerospace continues to be the primary driver of our segment operating margin dollar growth. The industrial businesses also delivered record segment operating margin percentages despite the pressures on the top- line in those businesses. Interest expense continues to be down. That is a $0.17 favorable result this year. That is really the result of our commitment to reducing debt. Corporate G&A is favorable, $0.08. That really is related to lower market-based benefits and just great discretionary cost controls across the businesses. Other expense was a drag of $0.13. That really is a combination of just less favorable pension expense versus prior year and obviously some currency translation just based on FX rates and volatility. Lastly, share count and income tax basically offset each other. That is how we got to the $6.94 adjusted EPS for the quarter. Really just want to commend our teams around the world for just great cost diligence and unbelievable operating performance that drove these strong results. Okay, if we go to 11, we'll just dive into the segments a little bit. Order trend continues to be positive for the company. Orders are + 9% versus prior year. Really, this is driven by longer cycle strength. That continues to drive order rates and backlog higher. Once again, every business delivered record segment operating margins. The total company is up 160 basis points. Specifically in the diversified North American businesses, sales were $2 billion. Organic growth was down 3% versus prior. That did improve sequentially from Q2, but the result was lower than we expected going into the quarter. We continue to just see softness in the transportation, off-highway, and energy markets. Distribution sentiment remains positive. What is really nice here is adjusted segment operating margins are up 110 basis points to a record 25.2%, really just driven by great operating performance and, like I said before, cost controls. Gradual improvement in distribution kept orders in North America positive at +3% versus prior. We were happy to see that. This is the second quarter in a row of positive order entry results for North America. If we look at the international businesses, order rates improved really to a double-digit + 11% here. That is really driven by a nice recovery and the long-cycle exposure there. Sales were $1.4 billion. Organically, that was also down 3%. Asia-Pacific specifically was up 2%. Organically, Latin America continues to be very robust at +8%, while the EMEA region remains challenged at -7%. Our international teams really are remaining agile and focused on cost controls and reductions and really efficiency improvements. The evidence is clear in their margin performance. Adjusted segment operating margins here were 25.1% and expanded by 160 basis points versus prior year. Aerospace continues to be the standout. Unbelievable inspiring results here. Sales were a record $1.6 billion in aerospace. That's up 12% versus prior year. Once again, this quarter, they exceeded our expectations on the top- line. All of that growth was organic. Organic growth is 12%, really continued to be driven by the aftermarket strength in both defense and commercial end markets. This is the ninth consecutive quarter of double-digit organic growth for aerospace. Just unbelievably stellar performance. Margins are up 200 basis points and reached a record 28.7%. We are certainly pleased that aerospace is now a third of the company. Aerospace orders continue to be positive at + 14%. If we go to the next slide, slide 12, it is just some comments on cash flow. Strong cash flow performance from the corporation. Cash flow from operations on a year-to-date basis is 15.8%. That equates to $2.3 billion. That is up 8% versus prior year. The $2.3 billion is a year-to-date record. Year-to-date free cash flow is also up 8% versus prior. That is about $2 billion or 13.7% of sales. Just great cash flow performance across the company. You may have noticed last Wednesday, our board approved a 10% increase to our quarterly dividend as a result of their confidence in the company's ability to continue to generate strong cash flows no matter what the business cycle brings us. Our dividend per share on a quarterly basis is now $1.80. The action will extend our record of increasing annual dividends paid per share to an amazing 69 years. Lastly, during the quarter, we purchased $600 million of shares in addition to the usual $50 million that we purchased as part of our 10b5-1 program. Total repurchases in the quarter equated to $650 million. On a year-to-date basis, repurchases now total $750 million. Moving on to guidance, let's move to slide 14. Jenny, I'm going to hand it back to you to start with the update on market verticals. Thank you, Todd. Taking a look at our FY 2025 sales forecast by market vertical. For aerospace and defense, Todd just went over some strong results. We are raising full-year organic growth to 12% on continued aftermarket strength and gradual OEM recovery. Previous guidance was 11%. We are lowering implant and industrial equipment growth to be negative low single digits. This was previously slightly positive low single digits, but this lowering is due to a prolonged delay in industrial recovery. It is worth noting that the quoting activity remains strong despite the project delays that are being seen. We are lowering transportation growth to be negative low single digits. This was previously neutral. This is primarily due to lower automotive production forecast in North America and EMEA. Work truck demand does remain stronger than on- highway, same as last quarter. Off-highway improved slightly to negative low- teens. This was previously negative mid- teens. OEM desocking and end market weakness does persist, but it is partially offset by stronger aftermarket. Ag weakness continues. No real sign of recovery here yet. Lowered energy to negative low single digits. This was previously neutral. This is due to lower oil prices and a disciplined approach to capital spending. We have increased HVAC/ R to high single digits. This was previously mid single digits and driven primarily by strength in residential air conditioning. I'll hand it back to you, Todd, to go over the guidance update. Okay, thank you, Jenny. Moving to slide 15, I'm just going to go through some of the details for the guide. Reported sales growth for the year is now forecasted to be approximately -1%. In respect to organic growth for the full year, we expect organic growth to be about +1%. We have raised aerospace organic growth to 12% for the year. We have lowered the industrial segment to -3%. Industrial North America organic growth is now forecasted to be approximately -4%. Industrial international organic growth is now forecasted to be approximately -2.5%. The previously announced divestitures on a full-year basis will be -1.5%. 100% of those divestitures were reported within the industrial North American businesses. Currency is now expected to be just a slight -0.5% headwind. Those are based on March 31 exchange rates. In respect to segment operating margins, we are raising guidance by 10 basis points for the full year. That will now be 25.9% segment operating margin. That forecast will be a full-year margin expansion of 100 basis points versus prior year. Of course, that improvement is being contributed by all businesses. Assumptions for corporate G&A, interest, and other, as usual, we've provided those in the appendix. We expect full-year tax rate to be 21.5%. When you look at adjusted EPS, we now see the full-year, excuse me, as reported EPS, the full-year is now $26.02 at the midpoint. We are maintaining our adjusted EPS guide of $26.70 at the midpoint. On both of those numbers, there's a range of ± $0.10 on both the as reported and the adjusted figures. In respect to tariffs, Jenny mentioned this earlier, but we expect to fully mitigate any additional cost associated with all the announced tariffs. Our EPS guidance does include cost and mitigation actions with all announced tariffs. Those will be fully offset within the quarter. For Parker, on an annualized basis, we have targeted the announced tariff cost to be about $375 million. That equates to roughly 3% of our cost of goods sold. We foresee full-year free cash flow to be $3.1 billion. Of course, free cash flow conversion is expected to be greater than 100%. For Q4, the last quarter of our fiscal year, more specifically, we expect reported sales to be $5.1 billion. Organic growth of + 0.5%. Adjusted segment operating margin is expected to be approximately 26.1%. We have modeled a tax rate of 22% for the quarter. Adjusted EPS is expected to be $7.05. That also includes all announced tariffs and our mitigating actions. That is it for the details on the guide. Jenny, I will hand it back to you and ask everyone to move to slide 16. Thanks, Todd. A final reminder on what drives Parker. I said it at the beginning of the presentation. Safety, engagement, and ownership are the foundation of our culture. It's our people and living up to our purpose that drives top quartile performance. We remain committed to being great generators and deployers of cash. We are actively focused in extending our track record, deploying capital to deliver the best shareholder value possible. Back to you, Todd. Okay, Diego, we are ready to start the Q&A portion of the call. We will take whoever you have in queue. Thank you. A reminder to the audience to ask a question, press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from Mig Dobre with Baird. Please state your question. Thank you for taking the question. Good morning, everyone. I guess the orders, at least to me, were quite surprising in the quarter. It's been, what, more than three years since we've seen international orders up 14% positive in North America as well. I guess my question is this: when you talk about longer cycle, can you maybe talk a little bit more about that? How do these orders actually get to convert to revenues? What's kind of the time cycle here? Related to this, and I recognize that you don't provide fiscal 2026 guidance now, but given this inflection that we've seen in orders, is it fair for us to expect positive organic growth in fiscal 2026 in your industrial business? Sure, Mig. To answer your last question first, I think it is fair to say that we should get some positive industrial growth in FY 2026. These orders that we're talking about, long cycle, are definitely beyond this last quarter here in fiscal year 2025. As Todd went through, and you said, the rates did increase to 9% for total Parker. When you look at North America, this was the second consecutive quarter of positive orders and stayed the same at 3%. Remember, we have aerospace and defense business in our industrial segment. We saw some strong orders there. We also saw HVAC and refrigeration orders remain strong. There was some gradual improvement from the distribution channel, not anything that I would call restocking. Their sentiment is positive, and they are awaiting the recovery. When you look at international order growth, it definitely accelerated on long cycle strength. Europe's mainly driven by long- cycle energy orders, power gen, and oil and gas. Todd mentioned Asia orders remain solidly positive. That is primarily driven by electronics and semicon. This is the third quarter in a row of positive orders for international. Aerospace, obviously, I think, well aware of that. The backlog did increase again. Last quarter was a record at $7 billion. This quarter, it went up to $7.3 billion. This is on both strong commercial and defense orders. That is some color on the orders. Great. Thank you. My follow-up, speaking of backlog, very sizable in aerospace, more than a year's worth of business in there. You sized the tariff impact here. I sort of do wonder how you think about the risks that you might have on a cost side, whether it's tariff or any other costs related to this backlog, and your ability to kind of either manage that through or any other mechanisms that you have. As we said, we expect we will fully mitigate the tariff impact. As I was going through in my slides, we have several different actions in place. When you look at the mitigation actions, I would put them in three different buckets: pricing actions, supply chain actions, and what we do all the time with the Win Strategy, reducing costs on an ongoing basis. Those three areas are how we're confident that we're going to fully mitigate this. We're ready. All right. Good luck. Thanks, Mig. Thank you. Our next question comes from Jamie Cook with Truist Securities. Please state your question. Hi, good morning, and congratulations on another nice quarter. I guess my first question, Jenny, just the strength in margins in aerospace and defense. To what degree are you worried that the aftermarket story and the strength in aftermarket's driving the margins that in 2026, I guess, that becomes a headwind as OEMs start to pick up? If you could just break apart if there's anything more structural there in margins besides just aftermarket, right, improving there associated with Meggitt, I guess. That's my first question. My second question, understanding you just put out these targets last June, but if we look at your implied adjusted EBITDA margins as we for the full year, you're targeting 25.9%, I think, versus the target you laid out last year of 27%. Your industrial businesses are still fairly depressed. Again, just trying to understand why that is conservative. Or again, is the concern that aftermarket, sorry, aerospace margins are sort of overearning? You know what I mean? As that normalizes and industrial picks up, 27% is really the right target. Thank you. Okay, Jamie. Starting out with just a little bit of color on aero aftermarket. It has been very strong for us. It was strong in Q3. I mean, year -to- date, our aftermarket is 50% through Q3. Now going into Q4, we're forecasting around 49%. For the full year, it will be 50%. Just a reminder too, we did really gain a lot of aftermarket with the Meggitt acquisition. We are in a higher aftermarket position to begin with. We do see that the gradual recovery on the rates, the OEM rates, are having an impact on that mix. We do feel very confident about our ability to continue to expand margins in aerospace. We have not seen any degradation as a result of some of the reports out there about North America air traffic growth slowing. We're keeping a close eye on that. We still have a very strong aftermarket business here. We see that into the foreseeable future. As far as the targets go, I mean, obviously, Todd mentioned this. We could not be any prouder of these teams and how they have delivered, especially the industrial side of the business, in a negative top-line environment. We really do believe and will continue to expand margins with all the tools in the Win Strategy. Obviously, we would like to see this industrial side of the business turn around. I think we all will enjoy that and benefit from it. Right now, we have a lot of confidence with everything going on in the environment that we are going to hit those targets. That is what we are sticking with. Jamie, I would just add to what Jenny said. Couldn't be happier with the progress we're making on margins. When we set those targets, we also set a 4%-6% growth target. We also set an EPS growth target. We also set a cash flow target. While we are making progress on those, we are far away from achieving those as well. We look at these kind of holistically together. It's not just one of the margins. It's really all of the targets. I'd tell you that's what the global team is focused on right now. Okay. That's helpful. Thank you. Your next question comes from Julian Mitchell with Barclays. Please state your question. Hi, good morning. Maybe first off, just wanted to circle back to the sort of jaws widening between industrial organic orders and sales trends that's been apparent for a couple of quarters. I understand on some level it's natural if orders are meant to lead sales, that there'd be a delta a lot of the time. You mentioned the longer cycle element boosting the orders growth versus sales. Just wondered if there was any other dynamic to be aware of, perhaps sort of the dollar comps that we don't see from the outside. Is there anything notable there on orders versus sales? Maybe sort of allied to that, is there any color you could give us on how that industrial backlog is moving? I think it was $3.5 billion or so at the end of December. Yeah. First of all, I would say that with the way the portfolio has transformed over the last several years, the connection between orders and shipments has extended, right? I mean, we do see more longer cycle business. As you mentioned earlier, aerospace being a third of the business and the aerospace that is sitting inside of our industrial businesses, as well as some other industrial business that we consider longer cycle, it is different than it was in the past. That connection is not as tight as we may have been used to, even on the industrial side of the business. Second part of your question, Julian? It was really just around any color you could give us on, say, the backlog movement in industrial. I think that was $3.5 billion at the end of December. Yeah. It was $3.7 billion for industrial and $7.3 billion for aerospace. It was 2% higher than prior year and 5% up sequentially. That's very helpful. Thank you. If you could put a finer point on some of the aerospace growth trends sort of in the fourth quarter as you see it, just so we have the jumping-off point into 2026 on the sort of OE versus aftermarket dynamics in commercial and military. Sure. You bet. As we said, we've raised the full-year guidance organic growth to 12%. We expect commercial OEM to be mid-single- digit. This obviously is as a result of the narrow body increases and some of the wide body recovery we're seeing as well. We expect defense OEM to be low single-digit growth. We expect commercial MRO of high- teens growth. Even though there's been some reports of North America air traffic growth slowing, global growth is still increasing. We still see that we have an aging fleet out there. We expect defense MRO of high- teens growth. This is really a focus on retrofits and upgrades and really some nice increases in the public-private partnerships that we have with the Department of Defense. That's great. Thank you. Your next question comes from Scott Davis with Melius Research. Please state your question. Hey, good morning. Again, congrats on the margins and getting through what's been kind of a slower time in the core industrial stuff. This may be an impossible question to answer, Jenny. Have you guys, when you think about the margin gains you've made, obviously, mix has got to have a huge part of it. Is there any way to kind of tease out what kind of how much operational improvements have really helped you guys? Even if you can't quantify it, just color around underlying operational improvements that could really help things snap back outside of aerospace. Let's just assume aerospace isn't as much of a tailwind incrementally in 2026, 2027. I don't know. It may just be an impossible question, but I'm curious to hear your response. I would say that as I was mentioning in the presentation, you've heard us talk a lot about all the tools that we have in the Win Strategy and the nature of our decentralized operating structure, allowing those general managers to be completely in control of their business, right? With our enhanced demand and capacity tools that we have, they have better visibility than they've ever had. Their planning ability around their operations, how they run their operations, how they control the cost of their operations is greater than it's ever been. The operational improvements are going to continue to happen because they have the right tools in our toolbox. They have the ability to make these improvements even when the volume is down. We expect that as the volume comes back, we're going to use those same tools. We are going to be very mindful of how cost comes back into the business. We are going to continue to do what we have been doing. Makes sense. Just as a totally different follow-on, but M&A, just again, I know you still talk about having a pretty strong pipeline. Any additional color on what we might expect to see, whether larger deals, mid-size, small, more bolt-ons? I mean, if you can talk through that pipeline on your back, just a little bit of color there, please. Yeah. I mean, listen, the pipeline has deals of all sizes. It really does. I mean, the timing is hard to predict right now. The big thing for us, you've heard me say this before, has to be strategic. The relationships and the analysis continue to be very active. We're still looking to acquire companies where we're the clear best owner that complements our interconnected technologies, follows the secular trends, all the same criteria that you've heard me talk about before. It's active. It's the timing right now that's hard to predict. Okay. Thank you, Jenny. Yeah. I would just add, Scott, I agree with everything Jenny said. The pipeline remains unbelievably active. It is just really kind of hard to predict timing on that. We have said we would be active on capital deployment. You saw us do some share repurchase in the quarter. We have committed to operate the company around a 2.0 x net debt to adjusted EBITDA. We are still 1.7 today. Our commitment, our preference certainly is to do acquisitions. We are committed to be active in the deployment space. Gotcha. Thank you. I'll pass it on. Your next question comes from David Raso with Evercore ISI. Please state your question. Hi. Thank you for the time. The tariffs, 3% of COGS, is that a number that is expected to go up for the new fiscal year? Meaning you would think the first quarter there's some inventory on the ground, there's some mitigating costs that already landed before tariffs. Should we think of 3% of COGS as the run- rate for fiscal 2026 based off the tariffs as they are today? Yeah, David. Hey, this is Todd. That is an annualized number. The way we calculated that is basically looking at every tariff that has been announced and what our current run- rate is in those areas. I do not expect that to go up unless there is some kind of other change in the tariff space. Like Jenny said, our team is working feverishly around the globe to do everything we can to not just make sure that we protect earnings per share, but to make sure that we make the best decisions to mitigate that $375 million. How much of the run- rate is actually hitting calendar 2Q, fiscal 4Q? I'm just trying to understand. Are we at full speed, 3% hit for these three months of this quarter? Is it more of a, and it's helpful to say at the peak during this quarter, it's the 3% of COGS? I'm just trying to get a sense of the ramp and if other actions are needed to be taken for, say, July 1 price increases or whatever it may be. No, that is pretty much the run- rate as it sits today. There is no ramp on that. I would tell you the actions have already been in place. All right. Terrific. Thank you. Your next question comes from Andrew Obin with Bank of America. Please state your question. Hi. Yes. Good morning, I guess. Still good morning? Yes. Good morning. Oh, good morning. Yeah. A question, I guess. About a month ago, people were excited about potential for European recovery. International orders are improving. Can you just tell us what it is you are seeing in Europe? Also, we've been getting a lot of questions about your exposure to European defense budgets. If you could just sort of give us color on, A, what are you seeing in Europe and specifically potential exposure within aerial to European defense? Thank you. Okay. First, Andrew, talking about—let's just start with the European defense. We do have—I think we talked about this the last time we were together. We do have content. We're well positioned globally in the defense market. We sell to both U.S. and international defense prime. Many of the U.S.-built aircraft are exported. We expect that, for instance, with the F-35, a third of that total fleet will be sold to the allied military. That kind of gives you an idea of what our exposure is there. Sorry, again, I got distracted with the foreign military. Your first question, please. Yeah. The second question is just German elections at Hanover. I think nothing yet. People sort of seem to be excited about potential. What are you hearing from your partners in Europe? Yeah. Obviously, we expect this broad-based softness across the end markets in Europe to continue. I mean, we do not see that easing up. What there is some positive sentiment out there about is the proposed stimulus and future defense spending, as you were just saying. You have the European Commission proposal on defense spending. You have some big dollars out there for Germany infrastructure on energy transport. Overall defense spending is also a factor. That is longer term. That is what the teams are talking about to be positive about in the future. Gotcha. Just to follow up, how are you guys reconsidering your footprint after the second round of tariffs, if in any way? Are you adjusting CapEx down in the fourth quarter in response to tariffs in any way, shape, or form? Thank you. No, we are not adjusting CapEx as a result of that. We do not see any big need for supply chain realignment due to tariffs. Just that local-for-local model gives us global capacity around the world. We have been working with the multiple tiers throughout our supply chain. We have a lot of good actions leveraging our dual sourcing strategy. I think we are in a good position here. Thanks so much. Your next question comes from Nicole DeBlase with Deutsche Bank. Please state your question. Yeah. Thanks. Good morning, guys. Good morning. Good morning, Nicole. Maybe just first of all, with orders, definitely kind of ahead of expectations this quarter, are you guys hearing or seeing any evidence at all of pre-buy ahead of tariffs? Or was that not a factor in the strength? No. I would say minimal evidence of pre-buy activity. As we've talked about with this increase in orders, it's all longer cycle strength. Okay. Got it. Thanks, Jenny. The margins have been a real bright spot in fiscal 2025 despite a challenging volume environment. Super impressive performance from Parker. Do you guys think you can continue to target 30%-35% incrementals as we kind of flip the calendar to 2026? At some point, does it become tougher to expand margins to that extent? Thank you. Yeah. Nicole, this is Todd. That is the number that we hold our team members accountable for across the organization. We think that is a best-in-class number. It's not always 30%, right? It depends on what's going on with the top- line. If the top- line is more robust, we think we can do better. If the top- line is a little bit lower, we try to manage that as well. I would tell you that's one of the things that I don't worry about for our team members across the globe is managing incrementals, whether we're in a growth environment or if we're in a challenged top- line. Thanks, Todd. I'll pass it on. Your next question comes from Joe O'Dea with Wells Fargo. Please state your question. Hi. Good morning. Jenny, I'm sure you anticipated a question on 2026 and so encouraging in terms of your comments around industrial and potential for growth. I think my question is really around, as you've seen some of that recovery push out this year, what it is that you're seeing that gives you confidence in seeing that growth next year, in particular in light of an elevated uncertainty kind of macro backdrop? First of all, I would say the longer cycle orders that we see coming in there, what we see is going to hit in 2026. We have a really good visibility of all our orders. When they come in, we know when they're going to hit, right? We have seen very few cancellations through the last several quarters. We're getting to the point, if you want to consider the last couple of years a recession, a much shallower one at that on the industrial side of the business, we're getting to the point where we are at the average or above the average amount of quarters that this industrial business would be negative. I'm an optimist here. As you've seen our guide throughout the whole year, I mean, we've kept planning for it the next quarter. The next quarter, unfortunately, we're not able to put that in this fourth quarter. We believe that it's going to come. When it does, we're not only going to be ready, but I think we're all going to enjoy it. That kind of waiting for it next quarter kind of dynamic, is that a matter of are there things like with the adjustment to guide, I guess the question is, are there demand trends that you're seeing soften sequentially? Or is it more a matter of things that you thought would get better sequentially just did not happen? That is probably cause for maybe there is a little bit of everything. Any color there would be helpful. Yeah. Things that we thought would get better just did not happen. We had to pull it down into Q4. Okay. Thank you. Thanks, Joe. Your next question comes from Jeff Sprague with Vertical Research Partners. Please state your question. Hey, thanks. Good morning, everyone. Hey, Jenny, just back to sort of the footprint and the like. Maybe I misinterpreted what you said. It sounds like you're not really looking at making any significant footprint changes. That just sort of surprises me, right? I wouldn't think you want to eat $375 million in tariffs. I get you've got plans to action it. Are you basically saying that you can handle it with dual sourcing? That leaves open the option to kind of flip back maybe to China at some point in the future. Probably oversimplifying a complex question, but just your view on really kind of mitigating this maybe permanently as opposed to temporarily. Yeah. First of all, I'll say this much. We are always looking at our structure and our footprint, right? That's just part of what we do either through Kaizen or Parker Lean systems. We're constantly looking at that. We make sure that we're making the best use of all our resources. That's something that's ongoing. If you look back in time at what we've done, there's good numbers on that. I would say that because we've always had this local-for-local model, we have the advantage of having capacity around the world, right? We can leverage that capacity when we need to. It's not just footprint or turning one supplier off and another supplier on that's going to mitigate all these actions. It is the dual sourcing strategy. It's working closely with suppliers on cost negotiations and further improvements. It's really making sure that all of our teams continue to use these tools that have provided this margin expansion all along. They are really good at it. I would tell you that those are the supply chain actions in addition to the Win Strategy cost actions. The pricing actions that we have a strong muscle in doing that. Are the pricing actions actually smaller than the win and sourcing actions collectively? I would not say that they are smaller. I would say that it is a little bit different for every business. It is a collection of all of those actions that gives us the confidence to say we can fully mitigate the tariff. Just maybe a little follow-on on that. Is the $375 million just simply tariffs? I assume there's other just inflation that might not be directly tariff, but perhaps is indirect. I'm sure it's included in your guide. Just curious if that $375 million is just a mathematical tariff kind of gross number. Yeah. Jeff, you're exactly right. That $375 million is solely tariff cost. No other cost changes included in that. Great. Thank you, guys. Appreciate it. Your next question comes from Joe Ritchie with Goldman Sachs. Please state your question. Hey, everybody. Good morning. Good morning. Jenny, can you just double-click a little bit on the implant project delays and what you're seeing there? I get the disconnect a little bit with the order rates that you're seeing. Be curious maybe if you can just tell us a little bit more about that big bidding activity and how you see it playing out in the coming quarters. When we look at implant and industrial, like I mentioned, we did have that at positive low single- digit, slightly positive low single- digit. We took it to negative low single- digit. Really, this is about the industrial recovery delays just persisting. Our previous guidance, as we just mentioned, assumed that we were getting some recovery. We are not seeing that yet. Again, I would tell you that quoting is still active even though there are project delays. We are not seeing a lot of cancellations. It is really more of delays. It is not one big thing or even a small collection of any event or any area. It is just continued delays. Okay. That's helpful. If I can maybe just ask a follow-up on that, if you think about the type of work that you're bidding on and what that pipeline looks like, there's a lot of activity that's happening in the U.S. that's already been started from a mega project standpoint. I'm just curious, how much of this is new construction versus what you would normally kind of see as maintenance or renovation, repair-type projects? I don't have a specific split for you. I would tell you that it's both. I mean, when we talk to the channel, they tell us how they're participating in some retrofitting and upgrades in plants. Also with some new construction, it is a mix of both. Okay. Great. Thank you. Your next question comes from Andy Kaplowitz with Citigroup. Please state your question. Hey, good morning, everyone. Good morning. Jenny, I know you talked about Europe a bit more. Asia seems to be holding up well for Parker. Specifically, China seems to be holding up. Maybe you could give us a little more color on what you're seeing there. Latin America continues to be a source of strength for Parker. How sustainable is that growth going into 2026? For Asia-Pacific in Q3, that was up 2%, as Todd mentioned. That growth was mainly driven by electronics and semicon. We did see some gradual improvement in plant. China, just a reminder, it's 5% of our sales. Q3 sales were positive, I would say, low single digits over prior year. We're continuing to see that really be driven by electronics and semicon. Some EV, some distribution. Again, just a reminder, it's 5% of our sales. And then in. Latin America? Second part? Latin America? Yeah. Latin America continues to be robust. I would say it's really broad-based. The team there really has been focusing on areas they win. It's a big filtration market for us. It's a lot of motion systems activity. The team just really continues to manage a really volatile situation extremely well. Todd, I just want to ask you about the corporate G&A, the bridge on slide 10, the $0.08 positive. I think you talked about relatively significant cost containment in your prepared marks. Is any of that temporary? You should be thinking about any of it coming back. How does that line item look moving forward? Yeah. I mean, there was a couple of things there that we talked about, market-based benefits. Those obviously fluctuate with market activity. I think the team has done a really good job looking at what we can control. I do not foresee any significant amount of that rolling back into the business. I think I pride ourselves on being very SG&A frugal in that space. Appreciate all the color. Thanks, Andy. Your next question comes from Stephen Volkmann with Jefferies. Please state your question. Hey, good morning, guys. Thank you for fitting me in. Two follow-ups from me. One, I guess I want to turn this whole tariff thing completely around. I feel like if I was a North American manufacturer trying to figure out how to have a more local supply chain, you guys might be my first call given you're kind of local for local. I'm curious if you're seeing more inquiries as other manufacturers try to rejigger their supply chains. Actual people reaching out to us for advice? No, more reaching out to you for product. Sorry to interrupt. Given that a lot of your competitors are international and you're not as much, I wonder if there's an opportunity for you there. We do think that there could be some shared gain opportunities for us here. I mean, as I was mentioning, having this capacity globally and being able to serve the customers really well, we think that there are some opportunities here. Yeah. Steve, we were just talking about that the other day. I do not want to be overly bold on this. For any business that we could potentially lose because of tariff, there is obviously some opportunity on business that we could win. That is what the team is focused on. I think it is still early days. I like our chances there. Okay. Fine. And then maybe for you, Todd, I'm curious. Again, you stepped up the repo here. It feels like this may be a period where it's a little tougher to get deals done in general. I'm not really speaking for you. There is a lot of uncertainty around outlooks and cost bases and recessions and so forth. Is the fact that you stepped up on repo maybe telling us that the M&A is a little maybe further out and we should factor in a little more repo near term? No. Jenny mentioned this. Our team continues to work the pipeline. The one thing that does become difficult is just really being able to accurately predict the timing of a yes. I would tell you there's many targets of various sizes in that pipeline. The reason we ramped up the repo was really because of our stated commitment to operate around a 2x leverage. We had been below that really for the full part of FY 2025. We just took a little chunk out there, really just trying to fulfill our commitment to being active in that space. We are going to balance that decision depending on what we see within each given month going here. Our commitment to everyone is that we will be active in the space. Much appreciated. Thanks. Your next question comes from Tim Thein with Raymond James. Please state your question. Great. Thank you. Maybe the first one for Jenny. I'm curious as to kind of the tenor of conversation that you're having with customers. As we've gone from hopes of animal spirits being unleashed after the U.S. election to now fears of recession and concerns around trade policy, I'm curious if you think the damage is sort of done for the year in terms of customers pulling the trigger on those more discretionary capital decisions. If we're having this conversation in three months and you're looking ahead to your FY 2026, is there a potential that those kind of reverse and there's more optimism? Just curious as to what you hear from your big customers. Yeah, there's a lot of uncertainty, right? I think everybody's going to be smart. At the same time, I think everybody believes, as we do, that we'll get through this. When we get through it, we want to be able to operate at our best. I think people are cautious, just kind of waiting to see what happens in some cases. I wouldn't say there's been anything overly negative that I'm hearing from the customers. Yeah. Okay. Just on tariffs, the question is just in terms of the pricing flexibility that you have in aerospace specifically, just given typically you have more longer-term agreements. I am just curious your ability to react and adjust there. We have seen some suppliers announce force majeure clauses. Anyway, just kind of if you think about the tariff ability to offset that industrial versus aero, if there is any notable difference between the two segments. We're using the same pricing tools and strategies in aerospace that we use in the industrial segment. You are correct. There are longer-term agreements in aerospace. We're having those conversations. We've been having those conversations even prior to tariffs with the high inflationary times. We're doing everything that we do on the industrial side of the business and getting through what we can get through. Obviously, we have a little bit more pricing availability on the aftermarket side. Great. Thank you. Thanks, Tim. Hey, Diego, I think we've got time for maybe one short question here. Let's get a good one and finish strong. Absolutely. Our final question comes from Brett Linzey with Mizuho Securities. Please state your question. Hey, good morning, all. Thanks. Yeah. I guess maybe just, yeah, just one more on M&A. I understand it's just an episodic process. I am surprised there hasn't been at least a smaller bolt-on type deal given you've been on your front foot. I guess is it fair to say you're really targeting something larger, more medium-sized type assets? Have there been any priority assets that have actually just fallen out of the funnel completely? I mean, I'm going to just repeat myself again. I mean, there are strategic assets in the pipeline of all sizes. We are not focused on one size versus the other. It really does have a lot to do with timing. We are very committed to making sure that it is a strategic fit. We always are looking at different assets. We are evaluating them. We will continue to do so. The pipeline is robust and active. Hey, Brett, I would just leave you with this. The capacity that the company has has never been greater. We're going to generate over $5 billion of EBITDA this year. I already mentioned we're going to do over $3 billion of cash flow. It really is not an issue of capacity. It is really just making sure it is the right strategic or series of strategic deals that make sense for us and that we model a future that we can generate returns on those. It is really just a combination of that. All right. Great. Thanks. I'll leave that as my strong question. Appreciate it. Thanks so much. Thank you. Thank you. We'll hand it back to Todd Leombruno for closing remarks. Thank you. Thank you, Diego. This concludes our FY 2025 Q3 earnings release webcast. We appreciate your time and attention. We thank you for joining us today. Our investor relations team of Jeff Miller, Jenna Stuckey, and Chantelle O'Kelley will be available today and tomorrow for any follow-ups or clarifications. Thank you, everyone. Have a wonderful day. Thank you. This concludes today's conference.