Thanks, everyone for being here. It's my pleasure to have up next, Parker Hannifin Corporation, Todd Leombruno, Chief Financial Officer. Todd has, I think, a couple of slides to go through, and then we'll get into questions after that. All set? Well, Julian, thanks to be here. It's great to see so many people in the room. It's a wonderful time to be here to talk about Parker Hannifin. I just have a few slides to give an overview for those people that aren't familiar. We are now 109 years old as a company, and we have been in the motion control space that entire time. You can just see here, our sales, we're guiding to be $21 billion in sales this year, and what is really nice is, it's almost equally split across our businesses. The company now has 31% of our sales exposure in aerospace, in our Aerospace segment, and our Diversified Industrial segment, we've split that into North America and International. You can see here, it's about 30% International and about 40%, North America. If you're looking for a little additional color, you can see our technology platforms, which we break out just to give a little bit more color. And again, aerospace is 31% of the company. Filtration and Engineered Materials is now nearly 30% of the company. Flow and Process Control, a little over 20, and then Motion Systems is 17% of the company. So all of this is interconnected. It all works. The portfolio is extremely focused on serving customer needs in that space. What's a unique concept about our portfolio is, 2/3 of our portfolio comes or is sold to customers that buy from four or more of those technologies. These things can be interconnected in any way that creates value for our customers, and that, we have been trying over the last 10 years to shift the portfolio from more short-cycle business to more longer-cycle business, and I think we've been, pretty successful with that process. We tried to give you a breakdown of our markets. This is end market exposure. You can see our largest is aerospace and defense. You may say, "Well, why is that not 31%?" We do have technologies in our industrial business, mainly filtration and, sealing, technologies, that, go to aerospace end markets. We just keep them with the technologies that are in the industrial business. That's how we get to 35%. But our second largest market is In-Plant and Industrial Equipment. You can see that's 20%. Transportation would be number three at 15%. We go Off-Highway at 13%, and then obviously some nice energy and HVAC exposure. And I already said this, we're guiding to $21 billion in sales this fiscal year. If you ask yourself, well, how has Parker Hannifin been able to win? We have an unbelievable operating system. We call it the Win Strategy. We are fiercely decentralized when it comes to our operations. We have 85 individual P&L owners across the business that are responsible for growth, for margin expansion, for cash flow generation. Those are their expectations. That's how their team is compensated, and it has worked wonderfully. Our products are innovative. Some people have thought maybe these are commodity-based products. These are technologies that we apply to solve customer problems in ways that no one else can do with our offering. We have an unbelievable distribution network. 50% of our industrial business goes through this distribution network. That is mainly serving the aftermarket, but also small to medium-sized OEMs across the globe. And all of that can be put together in a system if a customer finds value in it, or we could sell an individual technology if there's more value in that transaction as well. So a very strong competitive mode. That's why we believe we're the leader in the space. And it has all worked. I love this chart. This is just a 10-year look at what we've been able to do as a company. You can see we've grown revenue at a 6% CAGR over a 10-year period. We have expanded margins unbelievably, 1,150 basis points of margin expansion over that time period. We've grown EPS at a 16% CAGR over the last 10 years, and we've grown cash flow at 10%, which is, you can see, greater than what we've been able to grow sales. So all of that has worked, and it's not over yet. When we look at how we grew EPS 16%, roughly 60%, 60% of that growth, came from implementing the Win Strategy in legacy Parker Hannifin businesses. And you can see we've added 5 wonderful companies to the portfolio: Clarcor, LORD, Exotic, Meggitt, and just recently, Curtiss. All of that has accounted to 40% of our EPS growth. And then, you probably have seen, we just recently announced the agreement to acquire the Filtration Group. We expect this trend to continue as we go into the future, and we expect Filtration Group to be just another addition to the portfolio that, we're very much looking forward to, to close. So I believe that's my last slide. So Julian, I'll take questions from wherever, and, we can get started. Great. Thanks so much, Todd. Maybe first question, you know, I think a lot of investors here are kind of wondering about, is there a real U.S. industrial recovery, something picking up in short cycle MRO or CapEx wallets being opened a little bit wider? You know, how do you see that environment right now in the U.S.? You know, any changes in kind of recent months? Well, you know, I can't start without mentioning the strength in our aerospace business. Obviously, that's a separate segment from the industrial business, but that business has been unbelievably strong. I think we're in year three of double-digit organic growth in aerospace, and it just continues to perform beyond expectations. So we expect that to continue. What is promising is on the industrial side of the business, we've started to see some movement. Obviously, we've had two years of negative organic growth in that space. But our orders have turned positive. That has been trending upward. We have raised our organic growth guide. We started with 1%, we went to 2%. We just recently updated to 2.5%. So we feel really good about that on the North American side of the business. We're starting to see some pickup in the in-plant and industrial equipment. That has been really positive. Highway has been positive. Things like mining, construction have been really positive. Transportation still continues to be a more challenged market. You know, we are expecting still softness in that market. And then there's starting to be some growth in energy. Certainly, power gen has been a nice positive spot there. Our oil and gas markets are showing some positivity, which is nice. And then, you know, and lastly, I would say on the HVAC side, the commercial side of the business has been positive. You know, residential is still pretty soft, but the commercial has shown some strength. So we think it's real. We think it's time. We have been preparing for this, and I would tell you, our operations are ready. I believe our supply chain is ready, and we're ready to see that organic growth trend continue. What do you think underpins some of that? I mean, different end markets have their idiosyncratic drivers. Yes. Any broad brush, you know, trigger for the animal spirits kind of warming up? Well, obviously, you know, this has been a pretty traumatic times with tariffs and geopolitical noise and all of that. And I think we're starting to see at least, we've been able to kind of deal with it, right? Tariffs, we've got some clarity on. Interest rates are moving lower. I think both our distributors and our OEM customers have done a great job leveling inventory levels to demand. I think they've been at a good level. They've been matching demand for some time now. We're starting to hear little comments around restocking. It hasn't been material enough yet to get overly excited about, but we view it as a good sign, and we view it that it's a good sign for our future demand. Got it. When you think about that split of sort of distribution-type channels versus OEM customers, in the industrial side of the company. Right Any difference in sort of behavior on orders or sales between the two, or it's pretty consistent? No, like I just mentioned, inventory levels, we think, are at a good level in both parts of the channel. There's been positive sentiment in the distribution network for some time, and we're starting to see a little bit, you know, I would say, pockets of activity, right? Some things around data centers, some things around power gen, some things around oil and gas have been popping up as being positive. On the OEM side of it, you know, I think we're almost there. We're starting to see some good stuff in mining that is driving that. I think ag still has a way to go before that becomes anything to talk about. But overall, I would say the sentiment is leaning positive in both. Got it. And in-plant equipment, you know, big end market vertical for you. Yeah. How do you see that kind of globally, looking at present? It's been a difficult two years. Yeah. Manufacturing PMIs globally tough for a while. Yeah. You know, North America and Asia-Pac, I would say, are showing some signs of growth. Europe continues to be, you know, I would say, struggling, bouncing around the bottom. Mm-hmm. What has been really fantastic about our team is, our team has been able to generate record margins in all three segments in every business, by utilizing tools within the Win Strategy, being proactive, managing the demand levels as they are, and preparing for the rebound. So, I couldn't be more happy with the teams, that we've been able to generate these record margins even in a not-so-great growth environment. You know, you mentioned a good sign of pickup in orders in different parts of Diversified Industrial recently. You know, to what extent is that kind of longer-dated activity? Yeah. Or do you see the longer and short cycle both? It's a great point. It's something that we've talked about. Mm-hmm. It's something that we've, we've strived really hard to transform our portfolio into longer cycle. Orders have been positive for a number of quarters. You know, usually, historically, that would immediately turn into positive organic growth. It's been a little bit more stretched out. There's been some aerospace orders. Those are very long cycle. There's been some power gen orders, which are certainly longer cycle. And when we dig into the detail on the orders, we're seeing more longer cycle orders than we've ever had. So that is just kind of changing that relationship to orders and organic growth. But we're happy that they're both positive. If you look at our backlog, our backlog's at a record level. Yeah. Aerospace has been extremely robust, but even on the Industrial side, we've finally returned to growth on that Industrial backlog, and we expect that to continue. I think, you know, automation, investment by customers is an area Parker had mentioned recently as seeing a bit of a pickup. Yeah. Any way to frame—a nd I realize the definition of automation is a bit subjective, but what the sort of- Well, I would tell you, you know, we are doing it within our facilities. Yeah. I think we're doing a measured job at that. We always use lean first. We always take waste out of the process before we even think about automation. We have really focused on what we call the four Ds: dirty, dull, dangerous, or difficult. Mm-hmm. So the tasks within the facilities that, you know, fit those criteria, those are the first ones that we strive to automate. We've been really conscious to not make big monuments when it comes to automation, but to be very flexible, very focused and, making sure that we do the right things for the business and our team members in that, in that process. When it comes to customers, we're seeing a lot of the same stuff, right? Our products are, in many cases, driving some of those automation things when it comes to robotics or, even, a material handling type applications. Mm-hmm. So, it's a good fit, and I think, you know, the customer base and ourselves. I think we're learning together and making great progress. Great. As you said, the Win Strategy had phenomenal success. Mm. I think you pointed out the margins are up you know, 1,150 basis points. How do you make sure, I guess, the businesses in what is a decentralized structure keep reinvesting sufficiently? You know, make sure they don't get too focused on margin percentage expansion. Well, that's a great concept. You know, we did raise our CapEx, our internal CapEx budget. You know, for years we'd been, you know, between 1.6% and 1.8% of sales. Mm. We did move that to 2.5%, so I think that we're appropriately investing in things like automation and productivity, in some cases, capacity, where we need it in the world. So I feel like that is a great sign. But it is clearly a balance, and you know, when we have these 85 units, the team that is running those units, they're responsible for growth, they're responsible for margin expansion, they're responsible for, you know, EPS growth and they're responsible for cash flow. So all of those things kind of goes into that equation, and I feel like it's the right formula. I think we're investing the right amount. I don't see it spiking above that 2.5% of sales, and it is generating the results, and we can see them in the P&Ls. Great. On the aerospace side, you know, more of a focus now, I suppose, on OEM production rates picking up in commercial defense. A lot more discussed for 18 months now. Yeah. You know, how would you say Parker's positioned on the military side of the aero segment? Yeah. You know, whether it's military or commercial, we are unbelievably positioned, with the addition of Exotic and with the addition of Meggitt, into our business. You see it's now 35% of our exposure. So we're able to do things, for both commercial and military, applications that we never had been able to do before in the past. Things around safety, things around fluid conveyance, things around actuation, things around braking and landing systems, that just get you into deeper conversations with those OEMs. We have a nice mix between our commercial and defense business. Yeah. We see the world clearly needs more defense, and we're ready to react appropriately as that comes. So, it's a great space to be in. It's been part of our growth story up to now, and it will continue into the future. You know, I think within aerospace as an industry, commercial aero aftermarket's been a huge driver the last five years. Right. As those other areas start to show high growth as well, is there much of a margin mix impact we should watch for? We're not concerned about that. You know, we now have—y ou know, it's basically a 50/50 mix between OEM and aftermarket. We are glad the OEM is ramping. You know, you need the OEM to ramp to have aftermarket into the future. We are in the business for the long run. What we say about the OEM ramp is, you know, there's clarity, and it's very clear what you need to do. It allows you to improve efficiency, take waste out of your business, when you know what the deliveries are. And if you look back at what's been happening on the commercial side, you know, there was a lot of noise based on delivery demands and all that kind of stuff, that, that I think created drag in the P&L. And with, with, volumes ramping, it, you know, we're able to take all of that noise out. There's new platforms coming. We are gonna win those platforms. We're gonna invest appropriately in this business, and we're gonna love this, aerospace exposure for a long time. Got it. So we don't expect to have a margin drag from OEM ramp. The absolute margins in aerospace has been a huge increase, partly top-line growth, leverage, partly Meggitt synergies coming through. Yeah, it's been wonderful. Any sort of natural feeling you worry about there, or no, it's about getting those operating leverage on board? No. I mean, it is wonderful what you can do with a business when you have three years of double-digit organic growth, coupled with some synergies, coupled with great aftermarket mix, and it really has been stellar. Mm-hmm. It has allowed us to get closer to our customers. I said this already, but the offering that we have now has never been more robust. And the capabilities that we have across the portfolio, applying things like filtration, things like material science, things like thermal management, in the aerospace markets, we've never had more capabilities than we have now. So we really like the space, and I think we're positioned to win. One thing that's come up with some other companies in commercial aerospace, OEM, other suppliers, has been kind of contract renewals, sort of catching up on m any years of inflation in sort of one go with a program renewal. Is that something to watch at Parker, or there's a lot of different programs in the aerospace? There are countless programs, and I would tell you, we've been very active. We feel that we are a partner with our customers. In many cases, we have frank discussions with the customers. If the environment has changed from the time that the contract was made, we think that merits a discussion. These things are long-term in nature, and there's give and take on both sides, but I don't feel like we've been disadvantaged by the contracts when it comes to aerospace. It's been an unbelievable time of inflationary increases, but you know, the pricing muscle at Parker Hannifin is unbelievably strong, and that would include the aerospace business as well. Within Diversified Industrial, you know, again, it's been a lot of price increases. Do you get any impression of price fatigue by customers, or it's not- You know, like I said, it's been an unbelievable time on inflationary pressures. We reacted quickly. Mm-hmm. We went often. We didn't wait. We didn't have, you know, large price increases. We did that kind of in line. Okay. We are back, outside of tariffs, we are back to, like, a normal pricing cadence, a normal pricing discussion, and we've always said this on tariffs, you know, this is something that wasn't agreed upon when the PO was issued—when the contract was made, so that is a discussion that we have to have. And that is when they go up and when they go down. So the thought is that we'll be flexible on that, and we'll make sure that works, but I don't sense that there's any pricing fatigue in any of our end markets. I think in the last earnings deck, you had a good slide sort of focusing on the off-highway exposure, and it seems like some share gain has been happening there. Sure. Maybe flesh out kind of why you think that's happening. Is it something to do with the broad kind of system sale that Parker can do? And do you see that in other verticals beyond off-highway? Well, we certainly do. We've been trying to highlight, you know, maybe one vertical a quarter when it fits into the space that we have in the earnings call. But it really is a testament to the portfolio of Parker Hannifin and being able to apply, you know, conveyance and electronics and hydraulics and filtration and sealing, shielding, thermal management. And we believe that we can integrate that better than anyone else in the space. And if there's value to be had, if a customer sees value in it, if that brings a clear, documented value to their product, then, we're gonna win on those applications. The off-highway market is just one example of that. When you look at what technologies we're selling into that market, we tend to win when there's more than one technology on that application. It's really not different from any of the end markets that we play in. It really is very thoughtful on what we invest in organically in and what we invest in via acquisition. You know, on the acquisition front, you know the large transaction will close later this year. Yeah. Curtiss closed last year. Correct. Any impression you could give us around kind of organic growth profiles of those businesses? Well, one of the things that we have really focused on when it comes to our acquisition pipeline is, do they have a history of growing faster than our legacy businesses? In both cases, Filtration Group and Curtiss, they had displayed the ability to grow slightly better than our legacy businesses. And, obviously, we haven't closed Filtration Group yet, but I can tell you on Curtiss, it's doing exactly what we expected out of that transaction. And, what is really unique about that is it's completely paired with our electronics offering, and that is now one business, one of our 85 businesses, combined with our existing electronics business, and the integration is underway. Maybe kind of walk us through, because, yeah, the upcoming acquisition is pretty large. Yeah. How should we think about, I don't know, first sort of hundred days Well, we've already created the integration team. Mm-hmm. So our integration team is staffed. That has been one of the key elements of success for every one of the transactions that we've done in the past. We are talking to and meeting the Filtration Group team. Obviously, we're two different companies, so we're operating totally separately up until close, but we're starting to lay out the plans for how we would do that. The first thing that we would do would be a Win immersion session, where we would welcome the Filtration Group team members to the Parker Hannifin team and show them how we've created so much value over the past ten years. That usually is a wonderful process that both parties benefit from. So that's really kind of where we're at now, and I would say that we're on track [audio distortion] transactions to, to work their way through the system. Perfect. And when you think about the channel, I think the channel, as you said, or distribution, is a key strength of Parker. You know, how easy is it to kind of use that channel, push through different product? What's been the experience of- It's—y eah, so it's an unbelievable benefit that we have. The best benefit that we have through our distribution network is the offering that Parker Hannifin has. We can cover every element of the motion and control space... so that there is very little competitive pressures within our distribution channel. And what we'll do is we'll add the Filtration Group to that, just like we will add Curtiss to that, just like we added Lord and Clarcor to that channel. So, it is a benefit that will drive growth and margins for years to come. And then kind of firm-wide, you know, operating margins, that 29 goal you're sort of on, on track, I think, you know, this year. So- Yeah, we've, Yeah. Yeah. It's been— We set, we set 29 targets. I guess it's been 2 years ago. Yeah. The team has totally outperformed, so it's been great to be part of that. You know, we set a 27% segment operating margin target for FY 2029. We're right up on top of that right now as we speak. Aerospace has totally outperformed. You know, some of our longer cycle industrial businesses have totally outperformed. When we look at those margin targets, it's not just the margin target that we're looking for. It is the organic growth target. Mm-hmm. We have a range of 4%-6%. It is an EPS target. We want to be +10% every year. And of course, we have cash flow targets that we are very much focused on. We also have a dividend record that we're very proud of, 69 years of raising our dividends every year. We're not going to let that record break. So we look at that holistically. Is 27% the end of margin expansion? No, it certainly is not. And we'll set a new target when we need to on that, but certainly not the end of margin expansion. I don't expect us to see a slowdown in margin for the foreseeable future. When we think about the kind of portfolio today, you know, do you feel confident that you can get to a, you know, X hundred basis points higher operating margin firm-wide with the current mix, or does there have to be a change in mix? No. You know, I think the company is unbelievably set up right now. You could see on those technology platforms it's pretty balanced. Yeah. You, you could see the aftermarket OEM mix across the company is 50/50. That includes aerospace and the industrial side of the business. We've never been in a more favorable aftermarket to OEM mix. We see continued opportunities to expand the aftermarket. Filtration Group is a great example. It expands our filtration aftermarket exposure by 500 basis points. So we continue, we expect to see continued expansion across all of those businesses and all of those channels for the foreseeable future. So, we don't have to do anything structurally different to continue our margin expansion story. A lot of it comes from just executing the Win Strategy over and over and over again. If you look at that Win Strategy, every item on that strategy is a margin expansion tool. Then, you know, capital deployment, you had the big announcement a few months ago. How do we think about sort of M&A cultivational pipeline? Like, do you enter a 12-month digestion period or- I mean, it's part of our, it's part of our DNA, it's part of our muscle. We never rest, we never put pencils down. Some of these transactions that we've been able to do, we had been working with, talking with, understanding for 10 years or 20 years. And you know, you never know when you're going to get to yes. Mm-hmm. We've been fortunate enough to get the yes six times over the last number of years, and that has been unbelievably meaningful for the company, and our goal is to continue that. We're not naive about this. We know that a bad deal can do a lot of damage. Our goal is to not do a bad deal, and that's because we have not strayed from our financial metrics. We've not strayed from our strategic philosophies on what is a good Parker Hannifin business. We have not needed to reach out into some other technology that we're not expert in. And you know, we're going to be $21 billion-$23 billion when we close the Filtration Group. You know, it's a $150+ billion space that continues to grow and flex as the world needs more motion control technology. So, we have room to grow within that space With that, we'll pivot to the audience response. No. Survey question, please. This is my favorite part of the show. The first one is current ownership of Parker Hannifin. Yeah, it's been a great stock to own over the last 10 years, 5 years, 2 years, no matter how you look at it. Hopefully, this is one. Oh, there we go. Thank you. Thank you for your Thank you for your support, everyone. Yeah, we'll get that 43% over the line. Yep, and we got opportunity with the 39% and [audio distortion]. There you go. That's great. The second one is around kind of current bias or attitude, aside from ownership. Yeah. You know, I don't want to bias the audience, but I've never seen a more positive environment around Parker Hannifin stock. I've been with the company 33 years, so, it- You've seen a lot of cycles. Yeah. A lot of smiling faces on, share owners. Yes. There, look at that. 80%. Fantastic, 78%. And, you know, thirdly, it's around EPS growth profile, and, and the peer set here is kind of multi-industry. I mean, this is something we worked really hard on. You know, I gave you the answer, 16% over the last 10 years. Yeah. I think that is pretty good. Should be above. Oh, yeah, look at that. 93%. Jeff, take a picture of this one. We'll take this one back. We'll take this one back to the team. I can send it off to- Good work There you go. Time for the picture. All right, perfect. All right. Next question is around. We touched on this- Oh, good ... but use of excess cash. I suppose this is sort of post the acquisition close. Yeah. This one should be fun. A lot of choices here. It's going to be split. So yeah, so M&A- All right, M&A is a big winner. Yeah, 98%, We agree, we agree. We're going to, we're going to continue to select and integrate thoughtful businesses. This one is sort of year one, you know, calendar 2026, P/E multiple. Yeah. Just a high-quality industrial right there. Yeah, you guys are great! There you go. I'll come here every year. You guys are great. Love it. We always didn't usually get these answers. Honest, honest responses. Yeah. It's not just my team faking it. And then last one is- Can you tell how many people are voting? It's not just, Not just- ... people. My team. I don't think so. Right. And then, what's the main kind of anchor on the valuation or, you know, headwind at present? Well, we got 1,000 basis points of margin expansion that we've done there. Shouldn't be number two. We put $30 billion of capital to work. I think our strategy works. Number one, I guess. Yeah. Yeah. That's no surprise. Good work. Good. Well, thanks very much, Todd. Yep, it was great. Great discussion. Thank you, everyone. Thank you for being here. Really appreciate it.