Parker Hannifin Corporation (NYSE:PH) recently reported its fourth quarter earnings and discussed the following topics in its earnings conference call.
Capital Allocation Priorities
Steve Volkmann – Jefferies: I’m wondering if we can touch a little bit, the cash flow continues to be very strong and the balance sheet also, very strong and Don, you talked in the past couple, three quarters about stepping up the share repurchase, but obviously, we haven’t really seen that and I don’t think there’s any share repurchase in your guidance. So, I guess, I’m wondering if you can just address, is there enough in the pipeline acquisition-wise that you feel like you want to hold off on this, is the price not attractive or is there some potential for some share repurchase to sort of be additive to all this guidance for ’14?
Donald E. Washkewicz – Chairman, CEO and President: I think our priority as far as the capital allocations, first of all would be the dividends, okay and you’ve seen what we’ve been able to do with dividends this past year and we’ll continue to work on that. We want to get to about a 30% pay-out on the dividends moving up from 25%. So, that will continue to be of focus for us. As far as the acquisitions and the share repurchase, our interest right now is in acquisitions and basically the interest is strong now for acquisitions because of the soft global economy that we’re faced with. So, I think the organic growth for the near-term here, as you can see it’s going to be subdued. So, what we would like to do is to spend that money on acquisitions as opposed to share repurchase. However, if we’re going to continue to do at least $200 million in share repurchases to the 10b5-1, that’s kind of a steady state number for us going forward. However, if acquisitions don’t materialize for the extended period of time, I mean we will definitely consider doing more share purchase, no question about it. I don’t want to leave a lot of money on the balance sheet not putting it to good use. So, we will do one or the other or both for sure, but we also want to hit the dividends. We’ll continue to work on the dividends and then, I think we’re in pretty good shape on the pensions right now after having what we did last year for the pension side I think we’re going to have to allocate much more to the pensions at this point in time. Does that help you Steve?
Steve Volkmann – Jefferies: It does, but I’m wondering if I can just push you little bit, I mean you did about $500 million I think in acquisition revenue in ’13, is ’14 going to be up meaningfully from that?
Donald E. Washkewicz – Chairman, CEO and President: We would like to have at least that much. We’re targeting like 4% to 5% for acquisitions and so, we’d like to have at least that much. We can handle more, if we find the right properties and at the right prices. One of the challenges that you have in any time when you go on to and environment like this, especially with acquisitions from a practical standpoint is as sales the global world outlook as far as growth is subdued, of course that has a major impact on your discounted cash flow valuations. So, there is always this realization, have to be coming – meeting of the minds of you will between the buyer and the seller as to what reality is going forward. So, there is that challenge that you always have with acquisitions. We will put in what we think is a prudent growth rate. They’ll figure that of course the growth rate is going to be much higher than you have to kind of come to terms with that. So that’s one of the challenge that you have in an environment like this, especially when there is very little growth and that depends on where the growth is at as well. For instance, in some of the regions around the world, I’m not sure that you can put much of a growth rate in at all into a model, based on what we know right now. So, that’s where that the challenge comes in with acquisitions, I hope you follow what I’m saying there. That’s not to say we can’t do them and we’re going to continue to look, we’re looking at some right, we’ll continue to focus on it, and I’m hopeful that we can meet our target at least 4% to 5% and more. We’re got plenty of capacity to do more if we find the right properties.
Steve Volkmann – Jefferies: Then just quickly clarifying your 15% target for ’15. I think what you’re saying is you think you can do that kind of even in this very slow growth environment that we’re all enjoying. And I just want to make sure that, that’s on a segment basis is how you’re thinking about that?
Donald E. Washkewicz – Chairman, CEO and President: That’s correct. That’s on a segment basis, and you’re right, we are not anticipating or projecting anything special happening to get us to the ’15 other than restructuring. Now, if we go into a major recession, I mean all bets are off, but at least if we maintain, this kind of activity level, we feel comfortable we can get to 15% in ’15 for the entire Company and that’s our goal, and that’ll put us nicely into the top quartile of our peers and that’s where we want to be. That’s where we were last year. This year, we fell down a little bit, but we’ll be back. We’ll be back and next year, we’re taking some pretty definitive action here to get back to where we were.
Jeffrey Hammond – KeyBanc: So, just a few questions on restructuring, one, can you walk through the cadence of the spend, and maybe just clarify, it looks like, most of it is coming in the international segment? Then finally, what is the savings versus the $100 million spend, kind of annualized savings all-in when it’s also said and done.
Donald E. Washkewicz – Chairman, CEO and President: Let me start off and I’ll Jon and Pam finish – when you look at the actual restructuring, the majority of it’s going to happen internationally. There is some happening in North America, but the majority will happen outside of North America, throughout the year. So, that’s basically where it’s going to happen. I think if you look at the segment data that we’ve provided you as far as the operating margin data, I think you’ll be able to tell pretty quickly as to where it might happen, in international markets and other segments of our business, and I’ll turn it over to Jon and Pam.
Jon P. Marten – EVP, Finance & Administration and CFO: Yeah, Jeff, just to give you some additional context there, in the press release, we talked about the $100 million and restructuring, and that’s the gross number, and we are expecting to get off of that $30 million in savings, and if you take that $100 million in gross expenses for restructuring, taking out the $30 million in the savings, add that back, and that’s how we get to the $0.32 that is on Pam’s reconciliation, and that breaks down first half $0.21 and the last half $0.11 and that’s the net impact here of the restructuring here that we’ve got built in to the guidance for FY ’14. And as Don said the majority outside North America, but this includes all segments all regions altogether here. So, as we report back to you through FY ’14, we will be able to detail that for you in more detail at that point.
Jeffrey Hammond – KeyBanc: Just a consideration, as you go forward and report maybe if you can spike out this JV noise as well as the restructuring noise I think it’d be a big help in the presentation and reported results?
Jon P. Marten – EVP, Finance & Administration and CFO: We’ll do, we’ll do I appreciate that.
Pamela J. Huggins – VP and Treasurer: We will do that, Jeff.